UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-4984
AMERICAN BEACON FUNDS
(Exact name of registrant as specified in charter)
220 East Las Colinas Boulevard, Suite 1200
Irving, Texas 75039
(Address of principal executive offices)-(Zip code)
GENE L. NEEDLES, JR., PRESIDENT
220 East Las Colinas Boulevard, Suite 1200
Irving, Texas 75039
(Name and address of agent for service)
Registrant’s telephone number, including area code: (817) 391-6100
Date of fiscal year end: October 31, 2018
Date of reporting period: April 30, 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.
LARGE CAP VALUE FUND RISKS
Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund 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 the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.
American Beacon Funds | April 30, 2018 |
Contents
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| Back Cover |
![]() | Dear Shareholders,
Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term investment goals: Institutional wisdom + earned alpha = enduring value.
u We believe institutional wisdom comes from having more than 30 years of experience as manager of one of the country’s largest pension plans. As a fiduciary, we have built an investment due-diligence and oversight infrastructure, which we leverage across all our investment products. When selecting our investment managers, we focus on their people, processes and performance. We perform due-diligence reviews with each investment manager on a quarterly basis.
u We believe earned alpha – that is, the returns of an actively managed fund beyond a benchmark – comes from employing and engaging |
investment managers we believe are best-in-class and who have defined, repeatable and proven processes. Our experience has shown us that, while it’s important to be mindful of short-term considerations, having a long-term focus helps manage expectations, mitigate risks and realize goals. Thus, we seek relationships with leading investment managers who display a willingness to undertake time-intensive research strategies. The resulting investment portfolios are differentiated from their peers and allow incremental changes to help address periods of market volatility and economic uncertainty. |
u | We believe enduring value comes from “putting a portfolio in place and sticking with the plan.” Our mutual funds provide you with access to institutional-quality, research-intensive investment managers with diverse processes and styles. In the long run, having such access and spending time in the market – rather than trying to time the market – may better position you to reach your long-term investment goals. |
The markets and U.S. economy were robust during calendar year 2017. However, during periods of market volatility and economic uncertainty – such as what we’ve seen thus far in 2018 – investing for the long term requires conviction. It isn’t about identifying and anticipating the next big market move. It’s about identifying the right investment products for riding out those moves. It’s about developing an approach based on long-term participation, while seeking some measure of protection against ongoing volatility.
As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings. Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for high quality and lower risk.
At American Beacon, our approach is more than a concept. It’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment products for your portfolio.
Thank you for your continued interest in American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr. President
American Beacon Funds
1
American Beacon Large Cap Value FundSM
Performance Overview
April 30, 2018 (Unaudited)
The Investor Class of the American Beacon Large Cap Value Fund (the “Fund”) returned 2.14% for the six months ended April 30, 2018, outperforming the Russell 1000® Value Index (the “Index”) return of 1.94% for the same period.
Total Returns for the Period ended April 30, 2018 | |||||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||
Institutional Class (1,7) | AADEX | 2.29 | % | 10.57 | % | 6.82 | % | 10.30 | % | 7.33 | % | ||||||||||||||||||||||
Y Class (1,2,7) | ABLYX | 2.29 | % | 10.55 | % | 6.75 | % | 10.22 | % | 7.26 | % | ||||||||||||||||||||||
Investor Class (1,7) | AAGPX | 2.14 | % | 10.22 | % | 6.47 | % | 9.93 | % | 6.97 | % | ||||||||||||||||||||||
Advisor Class (1,7) | AVASX | 2.05 | % | 10.07 | % | 6.32 | % | 9.77 | % | 6.81 | % | ||||||||||||||||||||||
R6 Class (1,5,7) | AALRX | 2.33 | % | 10.65 | % | 6.83 | % | 10.30 | % | 7.34 | % | ||||||||||||||||||||||
A without Sales Charge (1,3,7) | ALVAX | 2.16 | % | 10.21 | % | 6.43 | % | 9.85 | % | 6.89 | % | ||||||||||||||||||||||
A with Sales Charge (1,3,7) | ALVAX | (3.70 | )% | 3.86 | % | 4.35 | % | 8.56 | % | 6.26 | % | ||||||||||||||||||||||
C without Sales Charge (1,4,7) | ALVCX | 1.86 | % | 9.53 | % | 5.67 | % | 9.05 | % | 6.27 | % | ||||||||||||||||||||||
C with Sales Charge (1,4,7) | ALVCX | 0.86 | % | 8.53 | % | 5.67 | % | 9.05 | % | 6.27 | % | ||||||||||||||||||||||
Russell 1000 Value Index (6) | 1.94 | % | 7.50 | % | 7.66 | % | 10.52 | % | 7.30 | % |
* | Not Annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. 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. |
2. | Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 4/30/08 up to 8/3/09, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/08. |
3. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 through 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/08. A Class shares have a maximum sales charge of 5.75%. |
4. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 through 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/08. A portion of the fees charged to the C Class was waived from 2010 through 2012, partially recovered in 2013, and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. C Class shares have a maximum contingent deferred sales charge of 1.00% for shares redeemed within one year of the date of purchase. |
5. | Fund performance for the three-year, five-year and ten-year periods represents the returns achieved by the Institutional Class from 4/30/08 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/08. A portion of the fees charged to the R6 Class of the Fund has been waived since 2/28/17. Performance prior to waiving fees was lower than the actual returns shown. |
6. | The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. One cannot directly invest in an index. |
7. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C and R6 Class shares were 0.60%, 0.67%, 0.92%, 1.07%, 0.98%, 1.72%, and 0.60%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. |
2
American Beacon Large Cap Value FundSM
Performance Overview
April 30, 2018 (Unaudited)
The Fund outperformed the Index due to sector allocation, whereas stock selection detracted value relative to the Index for the six-month period.
Sector allocation helped as an overweight to Energy – the best performing sector in the Index – and an underweight in Utilities – up 10.6% and down 4.2%, respectively, added relative performance compared to the Index. The Fund’s overweight position in Industrials – down 4.5% somewhat muted relative outperformance from sector allocation.
The Fund’s investments in the Financials and Consumer Staples sectors contributed most of the stock selection underperformance. In the Financials sector, American International Group – down 12.4% and Citigroup, Inc. – down 6.4% were the largest negative contributors. Positions in CVS Health Corp. – down 9.1% and Altria Group, Inc. – down 10.8% hurt the Fund’s returns in the Consumer Staples sector. Stock selections in the Energy sector partially offset relative performance. In this sector, BP PLC, Sponsored ADR – up 12.5% and ConocoPhillips – up 28.3% helped the Fund’s returns.
The sub-advisors continue to invest in a broadly diversified portfolio of companies that they believe have attractive valuations and above-average earnings growth potential. This approach should allow the Fund to benefit over the longer term.
Top Ten Holdings (% Net Assets) | ||||||||
Citigroup, Inc. | 3.3 | |||||||
JPMorgan Chase & Co. | 3.3 | |||||||
Bank of America Corp. | 2.6 | |||||||
Wells Fargo & Co. | 2.5 | |||||||
BP PLC, Sponsored ADR | 2.2 | |||||||
American International Group, Inc. | 2.0 | |||||||
ConocoPhillips | 2.0 | |||||||
Microsoft Corp. | 1.9 | |||||||
Comcast Corp., Class A | 1.8 | |||||||
Oracle Corp. | 1.7 | |||||||
Total Fund Holdings | 200 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 27.4 | |||||||
Energy | 15.6 | |||||||
Health Care | 11.7 | |||||||
Consumer Discretionary | 11.3 | |||||||
Industrials | 10.5 | |||||||
Information Technology | 10.1 | |||||||
Consumer Staples | 6.3 | |||||||
Materials | 3.9 | |||||||
Telecommunication Services | 1.7 | |||||||
Utilities | 1.4 | |||||||
Real Estate | 0.1 |
3
American Beacon Large Cap Value FundSM
Expense Examples
April 30, 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 November 1, 2017 through April 30, 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.
4
American Beacon Large Cap Value FundSM
Expense Examples
April 30, 2018 (Unaudited)
American Beacon Large Cap Value Fund | |||||||||||||||
Beginning Account Value 11/1/2017 | Ending Account Value 4/30/2018 | Expenses Paid During Period 11/1/2017-4/30/2018* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,023.30 | $2.96 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.90 | $2.96 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,022.90 | $3.21 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.60 | $3.21 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,021.40 | $4.61 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.20 | $4.61 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,020.50 | $5.36 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.50 | $5.36 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,021.60 | $4.31 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.50 | $4.31 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,018.60 | $7.16 | ||||||||||||
Hypothetical** | $1,000.00 | $1,017.70 | $7.15 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,023.30 | $2.86 | ||||||||||||
Hypothetical** | $1,000.00 | $1,022.00 | $2.86 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.59%, 0.64%, 0.92%, 1.07%, 0.86%, 1.43%, and 0.57% for the Institutional, Y, Investor, Advisor, A, C and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon Large Cap Value FundSM
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.20% | |||||||||||||||
Consumer Discretionary - 11.02% | |||||||||||||||
Auto Components - 1.74% | |||||||||||||||
Adient PLC | 177,998 | $ | 10,909,498 | ||||||||||||
Aptiv PLC | 120,797 | 10,217,010 | |||||||||||||
Goodyear Tire & Rubber Co. | 1,636,709 | 41,097,763 | |||||||||||||
Magna International, Inc. | 937,641 | 55,320,819 | |||||||||||||
|
| ||||||||||||||
117,545,090 | |||||||||||||||
|
| ||||||||||||||
Automobiles - 1.73% | |||||||||||||||
General Motors Co. | 2,790,905 | 102,537,850 | |||||||||||||
Harley-Davidson, Inc. | 355,118 | 14,606,003 | |||||||||||||
|
| ||||||||||||||
117,143,853 | |||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 0.54% | |||||||||||||||
Carnival Corp. | 152,100 | 9,591,426 | |||||||||||||
Norwegian Cruise Line Holdings Ltd.A | 501,700 | 26,825,899 | |||||||||||||
|
| ||||||||||||||
36,417,325 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 0.71% | |||||||||||||||
DR Horton, Inc. | 634,300 | 27,998,002 | |||||||||||||
Newell Brands, Inc. | 131,153 | 3,623,757 | |||||||||||||
Tupperware Brands Corp. | 370,600 | 16,513,936 | |||||||||||||
|
| ||||||||||||||
48,135,695 | |||||||||||||||
|
| ||||||||||||||
Leisure Products - 0.04% | |||||||||||||||
Hasbro, Inc. | 28,400 | 2,501,756 | |||||||||||||
|
| ||||||||||||||
Media - 3.91% | |||||||||||||||
CBS Corp., Class B, NVDR | 406,003 | 19,975,348 | |||||||||||||
Cinemark Holdings, Inc. | 346,900 | 13,588,073 | |||||||||||||
Comcast Corp., Class A | 3,881,947 | 121,854,316 | |||||||||||||
Discovery, Inc., Class AA B | 912,501 | 21,580,649 | |||||||||||||
Discovery, Inc., Class CA | 1,288,700 | 28,634,914 | |||||||||||||
Interpublic Group of Cos, Inc. | 807,700 | 19,053,643 | |||||||||||||
Omnicom Group, Inc. | 334,566 | 24,644,131 | |||||||||||||
Time Warner, Inc. | 24,936 | 2,363,933 | |||||||||||||
Walt Disney Co. | 133,400 | 13,384,022 | |||||||||||||
|
| ||||||||||||||
265,079,029 | |||||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.88% | |||||||||||||||
Dollar General Corp. | 619,456 | 59,796,088 | |||||||||||||
|
| ||||||||||||||
Specialty Retail - 1.21% | |||||||||||||||
Advance Auto Parts, Inc. | 209,200 | 23,942,940 | |||||||||||||
Bed Bath & Beyond, Inc. | 296,106 | 5,170,011 | |||||||||||||
Dick’s Sporting Goods, Inc. | 454,400 | 15,036,096 | |||||||||||||
Lowe’s Cos, Inc. | 455,900 | 37,579,837 | |||||||||||||
|
| ||||||||||||||
81,728,884 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.26% | |||||||||||||||
Hanesbrands, Inc. | 969,286 | 17,902,712 | |||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 746,250,432 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 6.07% | |||||||||||||||
Beverages - 1.00% | |||||||||||||||
Diageo PLC, Sponsored ADR | 110,749 | 15,721,928 | |||||||||||||
Molson Coors Brewing Co., Class B | 345,200 | 24,592,048 | |||||||||||||
PepsiCo, Inc. | 271,066 | 27,361,402 | |||||||||||||
|
| ||||||||||||||
67,675,378 | |||||||||||||||
|
|
See accompanying notes
6
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.20% (continued) | |||||||||||||||
Consumer Staples - 6.07% (continued) | |||||||||||||||
Food Products - 1.16% | |||||||||||||||
Archer-Daniels-Midland Co. | 174,036 | $ | 7,897,754 | ||||||||||||
Danone S.A., Sponsored ADRB | 389,098 | 6,326,733 | |||||||||||||
General Mills, Inc. | 320,021 | 13,997,719 | |||||||||||||
JM Smucker Co. | 47,830 | 5,456,446 | |||||||||||||
Kellogg Co. | 133,295 | 7,851,075 | |||||||||||||
Mondelez International, Inc., Class A | 439,100 | 17,344,450 | |||||||||||||
Nestle S.A., Sponsored ADR | 255,702 | 19,781,107 | |||||||||||||
|
| ||||||||||||||
78,655,284 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 0.92% | |||||||||||||||
CVS Health Corp. | 892,244 | 62,305,399 | |||||||||||||
|
| ||||||||||||||
Household Products - 0.22% | |||||||||||||||
Kimberly-Clark Corp. | 36,901 | 3,820,729 | |||||||||||||
Procter & Gamble Co. | 71,240 | 5,153,502 | |||||||||||||
Reckitt Benckiser Group PLC, Sponsored ADR | 388,915 | 6,172,081 | |||||||||||||
|
| ||||||||||||||
15,146,312 | |||||||||||||||
|
| ||||||||||||||
Personal Products - 0.49% | |||||||||||||||
Coty, Inc., Class A | 270,344 | 4,690,468 | |||||||||||||
Unilever PLC, ADR | 510,100 | 28,550,297 | |||||||||||||
|
| ||||||||||||||
33,240,765 | |||||||||||||||
|
| ||||||||||||||
Tobacco - 2.28% | |||||||||||||||
Altria Group, Inc. | 862,030 | 48,368,504 | |||||||||||||
Imperial Brands PLC, Sponsored ADRB | 890,614 | 32,391,631 | |||||||||||||
Philip Morris International, Inc. | 893,626 | 73,277,332 | |||||||||||||
|
| ||||||||||||||
154,037,467 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 411,060,605 | ||||||||||||||
|
| ||||||||||||||
Energy - 15.18% | |||||||||||||||
Energy Equipment & Services - 2.14% | |||||||||||||||
Halliburton Co. | 531,800 | 28,180,082 | |||||||||||||
Helmerich & Payne, Inc. | 273,500 | 19,021,925 | |||||||||||||
National Oilwell Varco, Inc. | 625,400 | 24,184,218 | |||||||||||||
Oceaneering International, Inc. | 515,500 | 10,949,220 | |||||||||||||
Schlumberger Ltd. | 912,027 | 62,528,571 | |||||||||||||
|
| ||||||||||||||
144,864,016 | |||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 13.04% | |||||||||||||||
Anadarko Petroleum Corp. | 423,500 | 28,510,020 | |||||||||||||
Andeavor | 201,000 | 27,802,320 | |||||||||||||
Apache Corp. | 1,455,900 | 59,619,105 | |||||||||||||
BP PLC, Sponsored ADR | 3,316,179 | 147,868,422 | |||||||||||||
Canadian Natural Resources Ltd. | 2,178,003 | 78,582,348 | |||||||||||||
Chevron Corp. | 545,512 | 68,249,006 | |||||||||||||
ConocoPhillips | 2,036,151 | 133,367,890 | |||||||||||||
Devon Energy Corp. | 1,232,766 | 44,786,389 | |||||||||||||
EOG Resources, Inc. | 134,357 | 15,876,967 | |||||||||||||
Exxon Mobil Corp. | 136,069 | 10,579,365 | |||||||||||||
Hess Corp. | 797,792 | 45,466,166 | |||||||||||||
Kinder Morgan, Inc. | 1,490,000 | 23,571,800 | |||||||||||||
Kosmos Energy Ltd.A | 1,247,445 | 8,782,013 | |||||||||||||
Marathon Oil Corp. | 2,740,486 | 50,013,869 | |||||||||||||
Murphy Oil Corp. | 864,760 | 26,037,923 | |||||||||||||
Occidental Petroleum Corp. | 139,476 | 10,775,916 |
See accompanying notes
7
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.20% (continued) | |||||||||||||||
Energy - 15.18% (continued) | |||||||||||||||
Oil, Gas & Consumable Fuels - 13.04% (continued) | |||||||||||||||
Phillips 66 | 652,758 | $ | 72,658,493 | ||||||||||||
Royal Dutch Shell PLC, Class A, Sponsored ADR | 441,222 | 30,841,418 | |||||||||||||
|
| ||||||||||||||
883,389,430 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 1,028,253,446 | ||||||||||||||
|
| ||||||||||||||
Financials - 26.68% | |||||||||||||||
Banks - 13.60% | |||||||||||||||
Bank of America Corp. | 5,860,398 | 175,343,108 | |||||||||||||
BNP Paribas S.A., ADR | 524,500 | 20,193,250 | |||||||||||||
CIT Group, Inc. | 176,300 | 9,335,085 | |||||||||||||
Citigroup, Inc. | 3,299,591 | 225,263,078 | |||||||||||||
Citizens Financial Group, Inc. | 524,253 | 21,751,257 | |||||||||||||
JPMorgan Chase & Co. | 2,034,384 | 221,300,291 | |||||||||||||
PNC Financial Services Group, Inc. | 364,741 | 53,109,937 | |||||||||||||
US Bancorp | 559,095 | 28,206,343 | |||||||||||||
Wells Fargo & Co. | 3,208,719 | 166,725,039 | |||||||||||||
|
| ||||||||||||||
921,227,388 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 4.24% | |||||||||||||||
Bank of New York Mellon Corp. | 452,828 | 24,683,654 | |||||||||||||
BlackRock, Inc. | 28,660 | 14,946,190 | |||||||||||||
Blackstone Group LP, MLP | 1,473,648 | 45,609,406 | |||||||||||||
Franklin Resources, Inc. | 112,935 | 3,799,133 | |||||||||||||
Goldman Sachs Group, Inc. | 225,799 | 53,814,676 | |||||||||||||
KKR & Co. LP | 3,525,808 | 73,830,420 | |||||||||||||
Moody’s Corp. | 57,872 | 9,386,838 | |||||||||||||
Morgan Stanley | 173,678 | 8,965,258 | |||||||||||||
Nasdaq, Inc. | 165,941 | 14,655,909 | |||||||||||||
State Street Corp. | 305,946 | 30,527,292 | |||||||||||||
T Rowe Price Group, Inc. | 61,062 | 6,950,077 | |||||||||||||
|
| ||||||||||||||
287,168,853 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 3.07% | |||||||||||||||
Ally Financial, Inc. | 485,900 | 12,681,990 | |||||||||||||
American Express Co. | 145,128 | 14,331,390 | |||||||||||||
Capital One Financial Corp. | 437,191 | 39,618,249 | |||||||||||||
Discover Financial Services | 364,100 | 25,942,125 | |||||||||||||
Navient Corp. | 1,180,763 | 15,656,917 | |||||||||||||
OneMain Holdings, Inc.A | 575,200 | 17,744,920 | |||||||||||||
Santander Consumer USA Holdings, Inc. | 1,362,447 | 25,137,147 | |||||||||||||
SLM Corp.A | 3,494,162 | 40,112,980 | |||||||||||||
Synchrony Financial | 494,087 | 16,388,866 | |||||||||||||
|
| ||||||||||||||
207,614,584 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.70% | |||||||||||||||
Berkshire Hathaway, Inc., Class BA | 244,091 | 47,287,749 | |||||||||||||
|
| ||||||||||||||
Insurance - 4.94% | |||||||||||||||
American International Group, Inc. | 2,456,232 | 137,548,992 | |||||||||||||
Aon PLC | 171,193 | 24,389,867 | |||||||||||||
Chubb Ltd. | 177,326 | 24,057,819 | |||||||||||||
MetLife, Inc. | 316,299 | 15,077,973 | |||||||||||||
Prudential Financial, Inc. | 71,331 | 7,583,912 | |||||||||||||
Travelers Companies, Inc. | 392,630 | 51,670,108 | |||||||||||||
XL Group Ltd. | 1,328,412 | 73,846,423 | |||||||||||||
|
| ||||||||||||||
334,175,094 | |||||||||||||||
|
|
See accompanying notes
8
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.20% (continued) | |||||||||||||||
Financials - 26.68% (continued) | |||||||||||||||
Thrifts & Mortgage Finance - 0.13% | |||||||||||||||
Radian Group, Inc. | 627,200 | $ | 8,968,960 | ||||||||||||
|
| ||||||||||||||
Total Financials | 1,806,442,628 | ||||||||||||||
|
| ||||||||||||||
Health Care - 11.41% | |||||||||||||||
Biotechnology - 1.20% | |||||||||||||||
AbbVie, Inc. | 119,184 | 11,507,215 | |||||||||||||
Biogen, Inc.A | 49,400 | 13,515,840 | |||||||||||||
Celgene Corp.A | 158,200 | 13,779,220 | |||||||||||||
Gilead Sciences, Inc. | 254,200 | 18,360,866 | |||||||||||||
Portola Pharmaceuticals, Inc.A | 265,000 | 9,574,450 | |||||||||||||
Shire PLC, ADR | 90,000 | 14,348,700 | |||||||||||||
|
| ||||||||||||||
81,086,291 | |||||||||||||||
|
| ||||||||||||||
Health Care Equipment & Supplies - 2.83% | |||||||||||||||
Abbott Laboratories | 291,906 | 16,968,496 | |||||||||||||
Danaher Corp. | 179,149 | 17,972,228 | |||||||||||||
Koninklijke Philips N.V. | 728,637 | 30,763,054 | |||||||||||||
Medtronic PLC | 1,329,083 | 106,499,421 | |||||||||||||
Zimmer Biomet Holdings, Inc. | 167,867 | 19,333,242 | |||||||||||||
|
| ||||||||||||||
191,536,441 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 1.95% | |||||||||||||||
Anthem, Inc. | 437,768 | 103,308,870 | |||||||||||||
Cigna Corp. | 69,507 | 11,942,693 | |||||||||||||
Express Scripts Holding Co.A | 93,068 | 7,045,248 | |||||||||||||
McKesson Corp. | 63,790 | 9,964,636 | |||||||||||||
|
| ||||||||||||||
132,261,447 | |||||||||||||||
|
| ||||||||||||||
Life Sciences Tools & Services - 0.28% | |||||||||||||||
Thermo Fisher Scientific, Inc. | 89,667 | 18,861,453 | |||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 5.15% | |||||||||||||||
GlaxoSmithKline PLC, Sponsored ADR | 743,234 | 29,811,116 | |||||||||||||
Horizon Pharma PLCA | 951,692 | 12,600,402 | |||||||||||||
Jazz Pharmaceuticals PLCA | 83,668 | 12,720,883 | |||||||||||||
Johnson & Johnson | 596,202 | 75,413,591 | |||||||||||||
Mallinckrodt PLCA B | 404,407 | 5,257,291 | |||||||||||||
Merck & Co., Inc. | 901,806 | 53,089,319 | |||||||||||||
Mylan N.V.A | 543,485 | 21,065,479 | |||||||||||||
Novartis AG, Sponsored ADR | 35,734 | 2,740,440 | |||||||||||||
Pfizer, Inc. | 2,351,979 | 86,105,951 | |||||||||||||
Roche Holding AG, Sponsored ADR | 81,702 | 2,271,316 | |||||||||||||
Sanofi, ADR | 1,218,245 | 47,901,393 | |||||||||||||
|
| ||||||||||||||
348,977,181 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 772,722,813 | ||||||||||||||
|
| ||||||||||||||
Industrials - 10.15% | |||||||||||||||
Aerospace & Defense - 1.93% | |||||||||||||||
Embraer S.A., Sponsored ADR | 273,900 | 6,907,758 | |||||||||||||
General Dynamics Corp. | 91,774 | 18,475,024 | |||||||||||||
Lockheed Martin Corp. | 26,936 | 8,642,146 | |||||||||||||
Northrop Grumman Corp. | 63,320 | 20,391,573 | |||||||||||||
Raytheon Co. | 208,201 | 42,668,713 | |||||||||||||
United Technologies Corp. | 280,060 | 33,649,209 | |||||||||||||
|
| ||||||||||||||
130,734,423 | |||||||||||||||
|
|
See accompanying notes
9
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.20% (continued) | |||||||||||||||
Industrials - 10.15% (continued) | |||||||||||||||
Air Freight & Logistics - 0.11% | |||||||||||||||
United Parcel Service, Inc., Class B | 67,893 | $ | 7,705,856 | ||||||||||||
|
| ||||||||||||||
Airlines - 1.43% | |||||||||||||||
American Airlines Group, Inc. | 629,140 | 27,008,980 | |||||||||||||
Delta Air Lines, Inc. | 722,800 | 37,744,616 | |||||||||||||
United Continental Holdings, Inc.A | 477,600 | 32,257,104 | |||||||||||||
|
| ||||||||||||||
97,010,700 | |||||||||||||||
|
| ||||||||||||||
Building Products - 1.45% | |||||||||||||||
Johnson Controls International PLC | 2,890,082 | 97,887,077 | |||||||||||||
|
| ||||||||||||||
Construction & Engineering - 0.22% | |||||||||||||||
AECOMA | 439,164 | 15,124,808 | |||||||||||||
|
| ||||||||||||||
Electrical Equipment - 0.38% | |||||||||||||||
Eaton Corp. PLC | 340,709 | 25,563,396 | |||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 1.96% | |||||||||||||||
3M Co. | 75,733 | 14,721,738 | |||||||||||||
General Electric Co. | 4,169,370 | 58,663,036 | |||||||||||||
Honeywell International, Inc. | 411,747 | 59,571,556 | |||||||||||||
|
| ||||||||||||||
132,956,330 | |||||||||||||||
|
| ||||||||||||||
Machinery - 1.49% | |||||||||||||||
CNH Industrial N.V. | 2,718,439 | 33,300,878 | |||||||||||||
Cummins, Inc. | 215,297 | 34,417,378 | |||||||||||||
Illinois Tool Works, Inc. | 76,323 | 10,839,393 | |||||||||||||
Ingersoll-Rand PLC | 83,744 | 7,025,284 | |||||||||||||
PACCAR, Inc. | 130,751 | 8,324,916 | |||||||||||||
Stanley Black & Decker, Inc. | 50,412 | 7,137,835 | |||||||||||||
|
| ||||||||||||||
101,045,684 | |||||||||||||||
|
| ||||||||||||||
Professional Services - 0.10% | |||||||||||||||
Equifax, Inc. | 60,346 | 6,761,769 | |||||||||||||
|
| ||||||||||||||
Road & Rail - 0.31% | |||||||||||||||
Canadian National Railway Co. | 92,436 | 7,143,454 | |||||||||||||
Union Pacific Corp. | 101,507 | 13,564,381 | |||||||||||||
|
| ||||||||||||||
20,707,835 | |||||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 0.54% | |||||||||||||||
AerCap Holdings N.V.A | 651,700 | 33,973,121 | |||||||||||||
HD Supply Holdings, Inc.A | 65,123 | 2,520,911 | |||||||||||||
|
| ||||||||||||||
36,494,032 | |||||||||||||||
|
| ||||||||||||||
Transportation Infrastructure - 0.23% | |||||||||||||||
Macquarie Infrastructure Corp. | 410,500 | 15,557,950 | |||||||||||||
|
| ||||||||||||||
Total Industrials | 687,549,860 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 9.77% | |||||||||||||||
Communications Equipment - 1.28% | |||||||||||||||
Cisco Systems, Inc. | 904,470 | 40,058,976 | |||||||||||||
Telefonaktiebolaget LM Ericsson, Sponsored ADR | 6,166,020 | 46,553,451 | |||||||||||||
|
| ||||||||||||||
86,612,427 | |||||||||||||||
|
| ||||||||||||||
Electronic Equipment, Instruments & Components - 0.69% | |||||||||||||||
Corning, Inc. | 1,413,440 | 38,191,149 | |||||||||||||
TE Connectivity Ltd. | 90,100 | 8,266,675 | |||||||||||||
|
| ||||||||||||||
46,457,824 | |||||||||||||||
|
|
See accompanying notes
10
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.20% (continued) | |||||||||||||||
Information Technology - 9.77% (continued) | |||||||||||||||
IT Services - 1.70% | |||||||||||||||
Accenture PLC, Class A | 243,219 | $ | 36,774,713 | ||||||||||||
Amdocs Ltd. | 49,156 | 3,305,741 | |||||||||||||
Cognizant Technology Solutions Corp., Class A | 53,935 | 4,412,962 | |||||||||||||
DXC Technology Co. | 69,335 | 7,145,665 | |||||||||||||
Fidelity National Information Services, Inc. | 142,319 | 13,516,035 | |||||||||||||
First Data Corp., Class AA | 1,510,000 | 27,331,000 | |||||||||||||
Fiserv, Inc.A | 144,410 | 10,232,893 | |||||||||||||
International Business Machines Corp. | 24,755 | 3,588,485 | |||||||||||||
Teradata Corp.A | 220,794 | 9,034,890 | |||||||||||||
|
| ||||||||||||||
115,342,384 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 1.40% | |||||||||||||||
Analog Devices, Inc. | 58,360 | 5,097,746 | |||||||||||||
Micron Technology, Inc.A | 886,179 | 40,746,510 | |||||||||||||
QUALCOMM, Inc. | 473,264 | 24,141,197 | |||||||||||||
Texas Instruments, Inc. | 185,109 | 18,775,606 | |||||||||||||
Versum Materials, Inc. | 161,874 | 5,694,727 | |||||||||||||
|
| ||||||||||||||
94,455,786 | |||||||||||||||
|
| ||||||||||||||
Software - 3.55% | |||||||||||||||
Microsoft Corp. | 1,360,784 | 127,260,520 | |||||||||||||
Oracle Corp. | 2,482,822 | 113,390,481 | |||||||||||||
|
| ||||||||||||||
240,651,001 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 1.15% | |||||||||||||||
Hewlett Packard Enterprise Co. | 4,572,244 | 77,956,760 | |||||||||||||
|
| ||||||||||||||
Total Information Technology | 661,476,182 | ||||||||||||||
|
| ||||||||||||||
Materials - 3.81% | |||||||||||||||
Chemicals - 2.70% | |||||||||||||||
Air Products & Chemicals, Inc. | 363,939 | 59,063,660 | |||||||||||||
DowDuPont, Inc. | 1,134,151 | 71,723,709 | |||||||||||||
Eastman Chemical Co. | 173,926 | 17,754,366 | |||||||||||||
PPG Industries, Inc. | 223,479 | 23,661,957 | |||||||||||||
Sherwin-Williams Co. | 28,833 | 10,600,741 | |||||||||||||
|
| ||||||||||||||
182,804,433 | |||||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.74% | |||||||||||||||
Crown Holdings, Inc.A | 597,883 | 29,798,489 | |||||||||||||
International Paper Co. | 394,986 | 20,365,478 | |||||||||||||
|
| ||||||||||||||
50,163,967 | |||||||||||||||
|
| ||||||||||||||
Metals & Mining - 0.37% | |||||||||||||||
Reliance Steel & Aluminum Co. | 285,675 | 25,116,546 | |||||||||||||
|
| ||||||||||||||
Total Materials | 258,084,946 | ||||||||||||||
|
| ||||||||||||||
Real Estate - 0.07% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 0.07% | |||||||||||||||
Public Storage, REIT | 23,729 | 4,788,038 | |||||||||||||
|
| ||||||||||||||
Telecommunication Services - 1.68% | |||||||||||||||
Diversified Telecommunication Services - 1.04% | |||||||||||||||
AT&T, Inc. | 1,175,986 | 38,454,742 | |||||||||||||
Verizon Communications, Inc. | 645,041 | 31,832,774 | |||||||||||||
|
| ||||||||||||||
70,287,516 | |||||||||||||||
|
|
See accompanying notes
11
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.20% (continued) | |||||||||||||||
Telecommunication Services - 1.68% (continued) | |||||||||||||||
Wireless Telecommunication Services - 0.64% | |||||||||||||||
Vodafone Group PLC, Sponsored ADR | 1,485,950 | $ | 43,701,789 | ||||||||||||
|
| ||||||||||||||
Total Telecommunication Services | 113,989,305 | ||||||||||||||
|
| ||||||||||||||
Utilities - 1.36% | |||||||||||||||
Electric Utilities - 1.36% | |||||||||||||||
Duke Energy Corp. | 269,075 | 21,569,052 | |||||||||||||
Entergy Corp. | 247,093 | 20,160,318 | |||||||||||||
PPL Corp. | 597,354 | 17,383,001 | |||||||||||||
Southern Co. | 600,483 | 27,694,276 | |||||||||||||
Xcel Energy, Inc. | 114,628 | 5,369,176 | |||||||||||||
|
| ||||||||||||||
92,175,823 | |||||||||||||||
|
| ||||||||||||||
Total Utilities | 92,175,823 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $5,016,929,222) | 6,582,794,078 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 2.79% (Cost $188,687,948) | |||||||||||||||
Investment Companies - 2.79% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%C D | 188,687,948 | 188,687,948 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 0.42% (Cost $28,813,730) | |||||||||||||||
Investment Companies - 0.42% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%C D | 28,813,730 | 28,813,730 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 100.41% (Cost $5,234,430,900) | 6,800,295,756 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (0.41%) | (28,070,614 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 6,772,225,142 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B All or a portion of this security is on loan at April 30, 2018.
C The Fund is affiliated by having the same investment advisor.
D 7-day yield.
ADR - American Depositary Receipt.
LP - Limited Partnership.
MLP - Master Limited Partnership.
NVDR - Non Voting Depositary Receipt.
PLC - Public Limited Company.
Futures Contracts Open on April 30, 2018: | ||||||||||||||||
Long Futures | ||||||||||||||||
Equity Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
S&P 500 E-Mini Index Futures | 1,304 | June 2018 | $ | 173,786,843 | $ | 172,584,400 | $ | (1,202,443 | ) | |||||||
|
|
|
|
|
| |||||||||||
$ | 173,786,843 | $ | 172,584,400 | $ | (1,202,443 | ) | ||||||||||
|
|
|
|
|
|
Index Abbreviations: | ||
S&P 500 | Standard & Poor’s U.S. Equity Large-Cap Index |
See accompanying notes
12
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2018, the investments were classified as described below:
Large Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 6,582,794,078 | $ | - | $ | - | $ | 6,582,794,078 | ||||||||||||||||||||
Short-Term Investments | 188,687,948 | - | - | 188,687,948 | ||||||||||||||||||||||||
Securities Lending Collateral | 28,813,730 | - | - | 28,813,730 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 6,800,295,756 | $ | - | $ | - | $ | 6,800,295,756 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||||||
Futures Contracts | $ | (1,202,443 | ) | $ | - | $ | - | $ | (1,202,443 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Liabilities | $ | (1,202,443 | ) | $ | - | $ | - | $ | (1,202,443 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
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 April 30, 2018, there were no transfers between levels.
See accompanying notes
13
American Beacon Large Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2018 (Unaudited)
Assets: | ||||
Investments in unaffiliated securities, at fair value†§ | $ | 6,582,794,078 | ||
Investments in affiliated securities, at fair value‡ | 217,501,678 | |||
Deposit with brokers for futures contracts | 7,206,444 | |||
Dividends and interest receivable | 6,960,783 | |||
Receivable for investments sold | 1,371,912 | |||
Receivable for fund shares sold | 8,575,205 | |||
Receivable for tax reclaims | 554,847 | |||
Prepaid expenses | 98,132 | |||
|
| |||
Total assets | 6,825,063,079 | |||
|
| |||
Liabilities: | ||||
Payable for investments purchased | 4,768,195 | |||
Payable for fund shares redeemed | 12,050,909 | |||
Payable for variation margin from open futures contracts (Note 5) | 1,199,628 | |||
Payable upon return of securities loaned (Note 9)§ | 28,813,730 | |||
Management and sub-advisory fees payable (Note 2) | 4,967,429 | |||
Service fees payable (Note 2) | 343,428 | |||
Transfer agent fees payable (Note 2) | 136,276 | |||
Custody and fund accounting fees payable | 287,800 | |||
Professional fees payable | 50,595 | |||
Trustee fees payable (Note 2) | 13,138 | |||
Payable for prospectus and shareholder reports | 144,265 | |||
Other liabilities | 62,544 | |||
|
| |||
Total liabilities | 52,837,937 | |||
|
| |||
Net assets | $ | 6,772,225,142 | ||
|
| |||
Analysis of net assets: | ||||
Paid-in-capital | $ | 5,147,687,373 | ||
Undistributed net investment income | 42,443,332 | |||
Accumulated net realized gain | 17,432,024 | |||
Unrealized appreciation of investments in unaffiliated securitiesA | 1,565,864,856 | |||
Unrealized (depreciation) of futures contracts | (1,202,443 | ) | ||
|
| |||
Net assets | $ | 6,772,225,142 | ||
|
|
See accompanying notes
14
American Beacon Large Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2018 (Unaudited)
Shares outstanding at no par value (unlimited shares authorized): | ||||
Institutional Class | 149,318,274 | |||
|
| |||
Y Class | 12,717,249 | |||
|
| |||
Investor Class | 62,168,591 | |||
|
| |||
Advisor Class | 2,939,891 | |||
|
| |||
A Class | 1,600,619 | |||
|
| |||
C Class | 292,141 | |||
|
| |||
R6 Class | 12,417,541 | |||
|
| |||
Net assets: | ||||
Institutional Class | $ | 4,275,815,368 | ||
|
| |||
Y Class | $ | 361,638,318 | ||
|
| |||
Investor Class | $ | 1,652,573,807 | ||
|
| |||
Advisor Class | $ | 77,089,742 | ||
|
| |||
A Class | $ | 42,025,877 | ||
|
| |||
C Class | $ | 7,607,431 | ||
|
| |||
R6 Class | $ | 355,474,599 | ||
|
| |||
Net asset value, offering and redemption price per share: | ||||
Institutional Class | $ | 28.64 | ||
|
| |||
Y Class | $ | 28.44 | ||
|
| |||
Investor Class | $ | 26.58 | ||
|
| |||
Advisor Class | $ | 26.22 | ||
|
| |||
A Class | $ | 26.26 | ||
|
| |||
A Class (offering price) | $ | 27.85 | ||
|
| |||
C Class | $ | 26.04 | ||
|
| |||
R6 Class | $ | 28.63 | ||
|
| |||
† Cost of investments in unaffiliated securities | $ | 5,016,929,222 | ||
‡ Cost of investments in affiliated securities | $ | 217,501,678 | ||
§ Fair value of securities on loan | $ | 27,838,132 | ||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
15
American Beacon Large Cap Value FundSM
Statement of Operations
For the period ended April 30, 2018 (Unaudited)
Investment income: | ||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 83,150,708 | ||
Dividend income from affiliated securities (Note 8) | 1,368,292 | |||
Interest income | 31,705 | |||
Income derived from securities lending (Note 9) | 391,477 | |||
|
| |||
Total investment income | 84,942,182 | |||
|
| |||
Expenses: | ||||
Management and sub-advisory fees (Note 2) | 18,651,410 | |||
Transfer agent fees: | ||||
Institutional Class (Note 2) | 700,534 | |||
Y Class (Note 2)A | 158,870 | |||
Investor Class | 39,732 | |||
Advisor Class | 2,136 | |||
A Class | 1,220 | |||
R6 Class | 922 | |||
Custody and fund accounting fees | 395,156 | |||
Professional fees | 141,301 | |||
Registration fees and expenses | 87,883 | |||
Service fees (Note 2): | ||||
Investor Class | 3,219,080 | |||
Advisor Class | 103,712 | |||
A ClassA | 10,583 | |||
C ClassA | (5,704 | ) | ||
Distribution fees (Note 2): | ||||
Advisor Class | 103,712 | |||
A Class | 50,406 | |||
C Class | 40,068 | |||
Prospectus and shareholder report expenses | 192,060 | |||
Trustee fees (Note 2) | 227,772 | |||
Other expenses | 207,435 | |||
|
| |||
Total expenses | 24,328,288 | |||
|
| |||
Net fees waived and expenses recouped (Note 2) | 1,950 | |||
|
| |||
Net expenses | 24,330,238 | |||
|
| |||
Net investment income | 60,611,944 | |||
|
| |||
Realized and unrealized gain (loss) from investments: | ||||
Net realized gain from: | ||||
Investments in unaffiliated securitiesB | 172,567,447 | |||
Commission recapture (Note 1) | 71,697 | |||
Foreign currency transactions | 16,503 | |||
Futures contracts | 11,956,693 | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investments in unaffiliated securitiesC | (68,998,659 | ) | ||
Futures contracts | (4,762,761 | ) | ||
|
| |||
Net gain from investments | 110,850,920 | |||
|
| |||
Net increase in net assets resulting from operations | $ | 171,462,864 | ||
|
| |||
† Foreign taxes | $ | 706,718 | ||
A The Manager voluntarily reimbursed service fees and sub-transfer agent fees (Note 2). | ||||
B The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities. | ||||
C The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
16
American Beacon Large Cap Value FundSM
Statement of Changes in Net Assets
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||
(unaudited) | ||||||||||||
Increase (decrease) in net assets: | ||||||||||||
Operations: | ||||||||||||
Net investment income | $ | 60,611,944 | $ | 128,855,668 | ||||||||
Net realized gain from investments in unaffiliated securities, commission recapture, foreign currency transactions, and futures contracts | 184,612,340 | 694,063,205 | ||||||||||
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, and futures contracts | (73,761,420 | ) | 828,241,553 | |||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 171,462,864 | 1,651,160,426 | ||||||||||
|
|
|
| |||||||||
Distributions to shareholders: | ||||||||||||
Net investment income: | ||||||||||||
Institutional Class | (80,030,031 | ) | (112,815,102 | ) | ||||||||
Y Class | (6,568,654 | ) | (7,905,543 | ) | ||||||||
Investor Class | (28,776,166 | ) | (44,594,218 | ) | ||||||||
Advisor Class | (1,139,533 | ) | (2,058,628 | ) | ||||||||
A Class | (631,959 | ) | (879,050 | ) | ||||||||
C Class | (69,546 | ) | (99,793 | ) | ||||||||
R6 Class | (3,120,202 | ) | – | |||||||||
Net realized gain from investments: | ||||||||||||
Institutional Class | (379,390,208 | ) | (40,827,429 | ) | ||||||||
Y Class | (32,123,502 | ) | (2,953,376 | ) | ||||||||
Investor Class | (168,008,340 | ) | (18,906,905 | ) | ||||||||
Advisor Class | (7,525,347 | ) | (953,678 | ) | ||||||||
A Class | (3,608,941 | ) | (366,411 | ) | ||||||||
C Class | (738,649 | ) | (77,352 | ) | ||||||||
R6 Class | (14,514,695 | ) | – | |||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (726,245,773 | ) | (232,437,485 | ) | ||||||||
|
|
|
| |||||||||
Capital share transactions (Note 11): | ||||||||||||
Proceeds from sales of shares | 800,626,892 | 1,070,944,813 | ||||||||||
Reinvestment of dividends and distributions | 686,933,740 | 220,594,801 | ||||||||||
Cost of shares redeemed | (1,478,282,529 | ) | (3,282,487,770 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 9,278,103 | (1,990,948,156 | ) | |||||||||
|
|
|
| |||||||||
Net (decrease) in net assets | (545,504,806 | ) | (572,225,215 | ) | ||||||||
|
|
|
| |||||||||
Net assets: | ||||||||||||
Beginning of period | 7,317,729,948 | 7,889,955,163 | ||||||||||
|
|
|
| |||||||||
End of period * | $ | 6,772,225,142 | $ | 7,317,729,948 | ||||||||
|
|
|
| |||||||||
*Includes undistributed net investment income | $ | 42,443,332 | $ | 102,167,479 | ||||||||
|
|
|
|
See accompanying notes
17
American Beacon Large Cap Value FundSM
April 30, 2018 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”), is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940 (the “Act”), as amended, as a diversified, open-end management investment company. As of April 30, 2018, the Trust consists of thirty-three active series, one of which is presented in this filing: American Beacon Large Cap Value 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 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 | Large institutional retirement plan investors - sold through retirement plan sponsors. | None |
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.
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 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”).
18
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Security Transactions and Investment Income
Security transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.
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. Realized gains (losses) from securities sold are determined on the basis of specific lot identification.
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 Fund may designate earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If a Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain in the Fund’s Statement of Operations, if applicable.
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.
19
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 $15 billion | 0.35 | % | ||
Next $15 billion | 0.325 | % | ||
Over $30 billion | 0.30 | % |
The Trust, on behalf of the Fund, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Brandywine Global Investment Management, LLC; Hotchkis and Wiley Capital Management, LLC; and Massachusetts Financial Services Company (“Sub-Advisors”) 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.
The Management and Sub-Advisory Fees paid by the Fund for the period ended April 30, 2018 were as follows:
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 12,481,374 | ||||||||
Sub-Advisor Fees | 0.18 | % | 6,170,036 | |||||||||
|
|
|
| |||||||||
Total | 0.53 | % | $ | 18,651,410 | ||||||||
|
|
|
|
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the period ended April 30, 2018, the Manager received securities lending fees of $40,310 for the securities lending activities of the Fund.
Distribution Plans
The Fund, except for the Advisor, A, and C Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the management 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 Advisor, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.
20
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Service Plans
The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor, Advisor, A, and C Classes of the Fund. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Fund. During the period ended April 31, 2018 the Manager voluntarily reimbursed service fees to the A and C classes of the Fund in the amounts of $18,035 and $10,646, respectively.
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 and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. 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 the Board approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the period ended April 30, 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 | |||
Large Cap Value | $ | 769,654 |
As of April 30, 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 | |||
Large Cap Value | $ | 66,128 |
During the period ended April 30, 2018, the Manager voluntarily reimbursed sub-transfer agent fees to the Y Class of the Fund in the amount of $39,292.
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 period ended April 30, 2018, the Manager earned fees on the Fund’s direct investments and securities lending collateral investments in the USG Select Fund as shown below:
Fund | Direct Investments in USG Select Fund | Securities Lending Collateral in USG Select Fund | Total | |||||||||
Large Cap Value | $ | 110,112 | $ | 63,155 | $ | 173,267 |
21
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 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 period ended April 30, 2018, the Large Cap Value Fund participated as a lender by loaning an average amount of $2,431,930 for 48 days at an average interest rate of 1.97% with interest charges earned of $6,554. This amount is included in “Interest income” on the Statement of Operations.
Expense Reimbursement Plan
The Manager voluntarily 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 period ended April 30, 2018, the Manager waived and/or reimbursed expenses as follows:
Expense Cap | Expiration of Reimbursed Expenses | |||||||||||||||||||
Fund | Class | 11/1/2017 - 4/30/2018 | Reimbursed Expenses | (Recouped) Expenses | ||||||||||||||||
Large Cap Value | R6 | 0.58 | % | $ | – | $ | (1,950 | ) | 2021 |
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 recoup from the Fund for any contractual or voluntary fee reductions or expense reimbursements if recoupment by 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 a reimbursement is unlikely.
The Distributor
Effective March 1, 2018, Resolute Investment Distributors, Inc. (“RID” or “Distributor”) replaced Foreside Fund Services, LLC (“Foreside”) as the Fund(s)’ distributor and principal underwriter of the Fund’s shares.
RID is a registered broker-dealer and is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Distributor is affiliated with the Manager through common ownership. Under a Distribution Agreement with the Trust, the Distributor acts as the distributor and principal underwriter of the Trust in connection with the continuous offering of shares of the Fund. The Distributor continually distributes shares of the Fund on a best efforts basis. The Distributor has no obligation to sell any specific quantity of the Fund’s shares. Pursuant to the Distribution Agreement, to the extent applicable, the Distributor receives, and may re-allow to broker-dealers, all or a portion of the sales charge paid by the purchasers of A Class and C Class shares. For A Class and C Class shares, the Distributor receives commission revenue consisting of the portion of A Class and C Class sales charge remaining after the allowances by the Distributor to the broker-dealers. The Distributor retains any portion of the commission fees that are not paid to the broker-dealers for use solely to pay distribution related expenses.
22
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Prior to March 1, 2018, Foreside served as the distributor and principal underwriter of the Fund’s shares. Pursuant to a Sub-Administration Agreement between Foreside and the Manager in effect through February 28, 2018, Foreside received a fee from the Manager for providing administrative services in connection with the marketing and distribution of shares of the Trust, including the registration of Manager employees as registered representatives of Foreside to facilitate distribution of Fund shares. Foreside also received a fee from the Manager under a Marketing Agreement pursuant to which Foreside provided services in connection with the marketing of a Fund to institutional investors. Pursuant to the Distribution Agreement with the Trust in effect through February 28, 2018, Foreside received, and may have re-allowed to broker-dealers, all or a portion of the sales charge paid by the purchasers of A and C Class shares. For A and C Class shares, Foreside received commission revenues consisting of the portion of A and C Class sales charge remaining after the allowances by Foreside to the broker dealers. Foreside retained any portion of the commission fees that were not paid to the broker-dealers for use solely to pay distribution related expenses.
Sales Commissions
The Fund’s Distributor, formerly Foreside, may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. During the period ended February 28, 2018, Foreside collected $1,070 for the Fund from the sale of Class A Shares. During the period March 1, 2018 through April 30, 2018, RID collected $483 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 period ended April 30, 2018, there were no CDSC fees collected for Class A Shares of the Fund.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the 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 period ended February 28, 2018, Foreside collected CDSC fees of $32 for Class C Shares of the Fund. During the period March 1, 2018 through April 30, 2018, RID collected $114 for Class C Shares of the Fund.
Trustee Fees and Expenses
As compensation for their service to the Trust, American Beacon Select Funds, American Beacon Institutional Funds Trust, and American Beacon Sound Point Enhanced Income Fund, 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
The price of the Fund’s shares is based on the Fund’s Net Asset Value (“NAV”). The NAV of the Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to the Fund or class, by the total number of shares outstanding of the Fund or class.
23
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally at 4:00 p.m. Eastern Time, each day that the Exchange is open for business. Equity securities, including exchange-traded funds (“ETFs”) for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade.
Investments in open-end mutual funds are valued at the closing NAV per share of the mutual fund on the day of valuation.
Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Board.
Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, the Fund is required to deposit with 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 Fund. Gains or losses are recognized, but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.
Other investments for which the above valuation procedures are inappropriate or are deemed not to reflect fair value, are stated at fair value as determined in good faith by the Manager’s Valuation Committee, pursuant to procedures established by the Board.
Valuation Inputs
Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1 | - | Quoted prices in active markets for identical securities. | ||
Level 2 | - | Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. | ||
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.
Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
4. Securities and Other Investments
American Depositary Receipts and Non-Voting Depositary Receipts
American Depositary Receipts (“ADRs”) are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Non-Voting Depositary Receipts (“NVDRs”) represent financial interests in an issuer but
24
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Fund may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or over-the-counter (“OTC”). OTC stock may be less liquid than exchange-traded stock.
Other Investment Company Securities and Other Exchange-Traded Products
The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, unit investment trusts, and other investment companies of the Trust. The Fund may invest in investment company securities advised by the Manager or 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 Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
Publicly Traded Partnerships; Master Limited Partnerships
The Fund may invest in publicly traded partnerships such as master limited partnerships (“MLPs”). MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the OTC market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. An MLP also may be an entity similar to a limited partnership, such as a limited liability company, which has a manager or managing member and non-managing members (who are like limited partners). The general partner or partners are jointly and severally responsible for the liabilities of the MLP. A Fund invests as a limited partner and normally would not be liable for the debts of an MLP beyond the amount the Fund has invested therein but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to
25
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
a limited partner. The right of an MLP’s creditors would continue even after a Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.
Real Estate Investment Trusts
The Fund may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Fund re-characterizes distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information, which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year.
5. Financial Derivative Instruments
The Fund may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.
Futures Contracts
Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Fund may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities or that the counterparty will fail to perform its obligations.
Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.
During the period ended April 30, 2018, the Fund entered into future contracts primarily for exposing cash to markets.
The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.
Average Futures Contracts Outstanding | ||||
Fund | Period Ended April 30, 2018 | |||
Large Cap Value | 1,731 |
26
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
The following is a summary of the fair valuations of the Fund’s derivative instruments categorized by risk exposure(1):
Fair values of financial instruments on the Statement of Assets and Liabilities as of April 30, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Payable for variation margin from open futures contracts(2) | $ | – | $ | – | $ | – | $ | – | $ | (1,202,443 | ) | $ | (1,202,443 | ) | |||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statement of Operations as of April 30, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized gain (loss) from derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | 11,956,693 | $ | 11,956,693 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | (4,762,761 | ) | $ | (4,762,761 | ) |
(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 Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
6. Principal Risks
Investing in the Fund may involve certain risks including, but not limited to, those described below.
Equity Investment Risk
Equity securities are subject to market risk. The Fund’s investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional 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 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 Fund may invest in securities issued by foreign companies through ADRs and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. The Fund may also invest in local currency investments. ADRs are subject to many of the risks inherent in currency fluctuations and political and financial instability in the home country of a particular ADR or foreign stock. Non-U.S. investments carry potential risks not associated with U.S. investments.
27
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity and greater volatility, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets.
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
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.
Multiple Sub-Advisor Risk
The Manager may allocate the Fund’s assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Fund’s assets. To a significant extent, the Fund’s performance will depend on the success of the Manager in allocating the Fund’s assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-adviser manages its allocated portion of the Fund independently from another sub-adviser, the same security may be held in different portions of the Fund, or may be acquired for one portion of the Fund at a time when a sub-adviser to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Fund’s holdings. Similarly, under some market conditions, one sub-adviser may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-adviser believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Fund. Because each sub-adviser directs the trading for its
28
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
own portion of the Fund, and does not aggregate its transactions with those of the other sub-advisors, the Fund may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Fund’s assets among the Fund’s sub-advisors in a manner that it believes is consistent with achieving the Fund’s investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Fund’s assets among sub-advisors.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including money market funds that are advised by the Manager. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, money market funds are subject to interest rate risk, credit risk, and market risk.
Sector Risk
Sector risk is the risk associated with a Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase.
To the extent a Fund invests in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than investment companies investing more broadly.
Securities Lending Risk
To the extent the Fund lends its securities, it may be subject to the following risks; i) borrowers of the Fund’s securities typically provide collateral in the form of cash that is reinvested in securities, ii) the securities in which the collateral is invested may not perform sufficiently to cover the return collateral payments owed to borrowers, iii) delays may occur in the recovery of securities from borrowers, which could interfere with the Fund’s ability to vote proxies or to settle transactions, and iv) there is the risk of possible loss of rights in the collateral should the borrower fail financially.
Offsetting Assets and Liabilities
The Fund is a party to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Fund employs multiple money managers and counterparties and has elected not to offset qualifying financial and derivative instruments on the Statement of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2018.
29
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Offsetting of Financial and Derivative Assets as of April 30, 2018: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | - | $ | 1,202,443 | ||||||||
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Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | - | $ | 1,202,443 | ||||||||
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Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | - | $ | (1,202,443 | ) | |||||||
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Remaining Contractual Maturity of the Agreements As of April 30, 2018 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 28,813,730 | $ | - | $ | - | $ | - | $ | 28,813,730 | ||||||||||||||||||||||||||
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Total Borrowings | $ | 28,813,730 | $ | - | $ | - | $ | - | $ | 28,813,730 | ||||||||||||||||||||||||||
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Gross amount of recognized liabilities for securities lending transactions |
| $ | 28,813,730 | |||||||||||||||||||||||||||||||||
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7. Federal Income and Excise Taxes
It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make 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 unrecognized tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2017 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.
As of April 30, 2018 the tax cost for the Fund and their respective gross unrealized appreciation (depreciation) were as follows:
Fund | Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Large Cap Value | $ | 5,357,228,796 | $ | 1,674,641,539 | $ | (231,574,579 | ) | $ | 1,443,066,960 |
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.
As of October 31, 2017, the Fund did not have any capital loss carryforwards.
30
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 2018 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Sales (non-U.S. Government Securities) | ||||||
Large Cap Value | $ | 700,550,932 | $ | 1,209,130,015 |
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2018 were as follows:
Fund | Type of Transaction | October 31, 2017 Shares/Fair Value | Purchases | Sales | April 30, 2018 Shares/Fair Value | Dividend Income | ||||||||||||||||||||||||||||||||||||
Large Cap Value | Direct | $ | 288,452,185 | $ | 1,339,234,400 | $ | 1,438,998,637 | $ | 188,687,948 | $ | 1,368,292 | |||||||||||||||||||||||||||||||
Large Cap Value | Securities Lending | 97,150,617 | 445,964,358 | 514,301,245 | 28,813,730 | N/A |
9. Securities Lending
The Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked-to-market daily. Daily mark-to-market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark-to-market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.
To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statement of Assets and Liabilities as a payable.
Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.
While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.
Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience
31
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.
As of April 30, 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 | ||||||||||||||||||||||||
Large Cap Value | $ | 27,838,132 | $ | 28,813,730 | $ | – | $ | 28,813,730 |
Cash collateral is listed on the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statement of Operations.
Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statement of Assets and Liabilities.
10. 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 period ended April 30, 2018, the Fund did not utilize this facility.
11. Capital Share Transactions
The tables below summarize the activity in capital shares for each Class of the Fund:
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 10,450,919 | $ | 307,797,114 | 22,769,063 | $ | 656,233,956 | ||||||||||||||||||||||
Reinvestment of dividends | 14,507,736 | 424,641,445 | 5,164,960 | 144,102,372 | ||||||||||||||||||||||||
Shares redeemed | (29,452,877 | ) | (878,172,685 | ) | (73,234,805 | ) | (2,103,146,975 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (4,494,222 | ) | $ | (145,734,126 | ) | (45,300,782 | ) | $ | (1,302,810,647 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
32
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 2,039,452 | $ | 60,149,119 | 3,126,566 | $ | 89,594,420 | ||||||||||||||||||||||
Reinvestment of dividends | 1,294,567 | 37,646,020 | 382,065 | 10,598,482 | ||||||||||||||||||||||||
Shares redeemed | (3,097,293 | ) | (88,480,743 | ) | (4,661,125 | ) | (131,631,686 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 236,726 | $ | 9,314,396 | (1,152,494 | ) | $ | (31,438,784 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 2,958,728 | $ | 82,282,514 | 9,354,201 | $ | 251,586,213 | ||||||||||||||||||||||
Reinvestment of dividends | 7,135,711 | 194,091,350 | 2,362,886 | 61,718,592 | ||||||||||||||||||||||||
Shares redeemed | (16,735,492 | ) | (465,319,335 | ) | (35,958,339 | ) | (961,374,863 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (6,641,053 | ) | $ | (188,945,471 | ) | (24,241,252 | ) | $ | (648,070,058 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 222,891 | $ | 6,078,448 | 472,811 | $ | 12,521,928 | ||||||||||||||||||||||
Reinvestment of dividends | 297,468 | 7,987,006 | 108,296 | 2,795,115 | ||||||||||||||||||||||||
Shares redeemed | (670,704 | ) | (18,460,295 | ) | (2,242,361 | ) | (58,812,119 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (150,345 | ) | $ | (4,394,841 | ) | (1,661,254 | ) | $ | (43,495,076 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 249,299 | $ | 6,652,461 | 740,832 | $ | 19,929,459 | ||||||||||||||||||||||
Reinvestment of dividends | 156,141 | 4,195,476 | 47,258 | 1,221,618 | ||||||||||||||||||||||||
Shares redeemed | (205,741 | ) | (5,648,472 | ) | (854,841 | ) | (22,876,376 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 199,699 | $ | 5,199,465 | (66,751 | ) | $ | (1,725,299 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 21,331 | $ | 568,642 | 38,862 | $ | 1,023,344 | ||||||||||||||||||||||
Reinvestment of dividends | 27,603 | 737,547 | 6,172 | 158,622 | ||||||||||||||||||||||||
Shares redeemed | (52,241 | ) | (1,416,450 | ) | (129,249 | ) | (3,392,547 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (3,307 | ) | $ | (110,261 | ) | (84,215 | ) | $ | (2,210,581 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
R6 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | February 28, 2017A to October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 11,190,225 | $ | 337,098,594 | 1,364,784 | $ | 40,055,493 | ||||||||||||||||||||||
Reinvestment of dividends | 602,696 | 17,634,896 | – | – | ||||||||||||||||||||||||
Shares redeemed | (698,168 | ) | (20,784,549 | ) | (41,996 | ) | (1,253,204 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 11,094,753 | $ | 333,948,941 | 1,322,788 | $ | 38,802,289 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
A Commencement of operations.
33
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
12. 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.
34
American Beacon Large Cap Value FundSM
(For a share outstanding throughout the period)
Institutional ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 30.98 | $ | 25.80 | $ | 28.38 | $ | 31.21 | $ | 27.59 | $ | 21.58 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.30 | 0.59 | 0.61 | 0.55 | 0.73 | 0.50 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.49 | 5.41 | (0.29 | ) | (0.70 | ) | 3.33 | 6.00 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.79 | 6.00 | 0.32 | (0.15 | ) | 4.06 | 6.50 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.55 | ) | (0.60 | ) | (0.52 | ) | (0.67 | ) | (0.44 | ) | (0.49 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.58 | ) | (0.22 | ) | (2.38 | ) | (2.01 | ) | - | – | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (3.13 | ) | (0.82 | ) | (2.90 | ) | (2.68 | ) | (0.44 | ) | (0.49 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 28.64 | $ | 30.98 | $ | 25.80 | $ | 28.38 | $ | 31.21 | $ | 27.59 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 2.33 | %C | 23.60 | % | 1.69 | % | (0.76 | )% | 14.89 | % | 30.70 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 4,275,815,368 | $ | 4,765,771,483 | $ | 5,137,688,375 | $ | 6,198,883,300 | $ | 5,816,013,064 | $ | 5,428,755,279 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.59 | %D | 0.60 | % | 0.60 | % | 0.58 | % | 0.58 | % | 0.58 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.59 | %D | 0.60 | % | 0.60 | % | 0.58 | % | 0.58 | % | 0.58 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.80 | %D | 1.78 | % | 2.16 | % | 1.88 | % | 2.35 | % | 1.99 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.80 | %D | 1.78 | % | 2.16 | % | 1.88 | % | 2.35 | % | 1.99 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 10 | %C | 25 | % | 25 | % | 32 | % | 29 | % | 34 | % |
A | On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
See accompanying notes
35
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 30.78 | $ | 25.64 | $ | 28.21 | $ | 31.04 | $ | 27.46 | $ | 21.47 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.28 | 0.48 | 0.59 | 0.56 | 0.64 | 0.40 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.49 | 5.46 | (0.29 | ) | (0.72 | ) | 3.37 | 6.05 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.77 | 5.94 | 0.30 | (0.16 | ) | 4.01 | 6.45 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.53 | ) | (0.58 | ) | (0.49 | ) | (0.66 | ) | (0.43 | ) | (0.46 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.58 | ) | (0.22 | ) | (2.38 | ) | (2.01 | ) | – | – | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (3.11 | ) | (0.80 | ) | (2.87 | ) | (2.67 | ) | (0.43 | ) | (0.46 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 28.44 | $ | 30.78 | $ | 25.64 | $ | 28.21 | $ | 31.04 | $ | 27.46 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 2.29 | %B | 23.51 | % | 1.61 | % | (0.80 | )% | 14.78 | % | 30.59 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 361,638,318 | $ | 384,155,569 | $ | 349,542,346 | $ | 419,096,844 | $ | 434,880,702 | $ | 327,938,666 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.64 | %C | 0.67 | % | 0.67 | % | 0.67 | % | 0.67 | % | 0.66 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.64 | %C | 0.67 | % | 0.67 | % | 0.67 | % | 0.67 | % | 0.66 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.75 | %C | 1.69 | % | 2.08 | % | 1.80 | % | 2.24 | % | 1.78 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.75 | %C | 1.69 | % | 2.08 | % | 1.80 | % | 2.24 | % | 1.78 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 10 | %B | 25 | % | 25 | % | 32 | % | 29 | % | 34 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
See accompanying notes
36
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 28.92 | $ | 24.13 | $ | 26.70 | $ | 29.51 | $ | 26.11 | $ | 20.43 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.21 | 0.40 | 0.46 | 0.45 | 0.57 | 0.39 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.47 | 5.12 | (0.25 | ) | (0.68 | ) | 3.18 | 5.69 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.68 | 5.52 | 0.21 | (0.23 | ) | 3.75 | 6.08 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.44 | ) | (0.51 | ) | (0.40 | ) | (0.57 | ) | (0.35 | ) | (0.40 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.58 | ) | (0.22 | ) | (2.38 | ) | (2.01 | ) | – | – | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (3.02 | ) | (0.73 | ) | (2.78 | ) | (2.58 | ) | (0.35 | ) | (0.40 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 26.58 | $ | 28.92 | $ | 24.13 | $ | 26.70 | $ | 29.51 | $ | 26.11 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 2.14 | %B | 23.20 | % | 1.33 | % | (1.07 | )% | 14.50 | % | 30.26 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 1,652,573,807 | $ | 1,990,199,621 | $ | 2,245,534,741 | $ | 3,167,585,961 | $ | 4,158,361,296 | $ | 3,899,010,929 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.92 | %C | 0.92 | % | 0.93 | % | 0.93 | % | 0.93 | % | 0.93 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.92 | %C | 0.92 | % | 0.93 | % | 0.93 | % | 0.93 | % | 0.93 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.49 | %C | 1.46 | % | 1.84 | % | 1.54 | % | 2.01 | % | 1.67 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.49 | %C | 1.46 | % | 1.84 | % | 1.54 | % | 2.01 | % | 1.67 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 10 | %B | 25 | % | 25 | % | 32 | % | 29 | % | 34 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
See accompanying notes
37
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
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(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 28.54 | $ | 23.82 | $ | 26.40 | $ | 29.24 | $ | 25.89 | $ | 20.25 | ||||||||||||||||||||||||||||||||
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Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.18 | 0.21 | 0.40 | 0.40 | 0.47 | 0.35 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.47 | 5.20 | (0.22 | ) | (0.66 | ) | 3.20 | 5.65 | ||||||||||||||||||||||||||||||||||||
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Total income (loss) from investment operations | 0.65 | 5.41 | 0.18 | (0.26 | ) | 3.67 | 6.00 | |||||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.39 | ) | (0.47 | ) | (0.38 | ) | (0.57 | ) | (0.32 | ) | (0.36 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.58 | ) | (0.22 | ) | (2.38 | ) | (2.01 | ) | – | – | ||||||||||||||||||||||||||||||||||
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Total distributions | (2.97 | ) | (0.69 | ) | (2.76 | ) | (2.58 | ) | (0.32 | ) | (0.36 | ) | ||||||||||||||||||||||||||||||||
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Net asset value, end of period | $ | 26.22 | $ | 28.54 | $ | 23.82 | $ | 26.40 | $ | 29.24 | $ | 25.89 | ||||||||||||||||||||||||||||||||
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Total returnB | 2.05 | %C | 23.00 | % | 1.21 | % | (1.19 | )% | 14.31 | % | 30.05 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 77,089,742 | $ | 88,196,090 | $ | 113,168,437 | $ | 140,975,319 | $ | 149,422,940 | $ | 128,528,036 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.07 | %D | 1.07 | % | 1.08 | % | 1.07 | % | 1.07 | % | 1.07 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.07 | %D | 1.07 | % | 1.08 | % | 1.07 | % | 1.07 | % | 1.07 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.33 | %D | 1.31 | % | 1.69 | % | 1.40 | % | 1.83 | % | 1.52 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.33 | %D | 1.31 | % | 1.69 | % | 1.40 | % | 1.83 | % | 1.52 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 10 | %C | 25 | % | 25 | % | 32 | % | 29 | % | 34 | % |
A | On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
See accompanying notes
38
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 28.61 | $ | 23.90 | $ | 26.51 | $ | 29.38 | $ | 26.03 | $ | 20.41 | ||||||||||||||||||||||||||||||||
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Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.27 | 0.28 | 0.42 | 0.47 | 0.54 | 0.38 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.41 | 5.17 | (0.21 | ) | (0.71 | ) | 3.16 | 5.65 | ||||||||||||||||||||||||||||||||||||
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Total income (loss) from investment operations | 0.68 | 5.45 | 0.21 | (0.24 | ) | 3.70 | 6.03 | |||||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.45 | ) | (0.52 | ) | (0.44 | ) | (0.62 | ) | (0.35 | ) | (0.41 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.58 | ) | (0.22 | ) | (2.38 | ) | (2.01 | ) | – | – | ||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total distributions | (3.03 | ) | (0.74 | ) | (2.82 | ) | (2.63 | ) | (0.35 | ) | (0.41 | ) | ||||||||||||||||||||||||||||||||
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Net asset value, end of period | $ | 26.26 | $ | 28.61 | $ | 23.90 | $ | 26.51 | $ | 29.38 | $ | 26.03 | ||||||||||||||||||||||||||||||||
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Total returnA | 2.16 | %B | 23.13 | % | 1.33 | % | (1.14 | )% | 14.37 | % | 30.03 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 42,025,877 | $ | 40,073,435 | $ | 35,071,001 | $ | 39,401,153 | $ | 22,781,918 | $ | 11,904,903 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.86 | %C | 0.98 | % | 0.98 | % | 0.97 | % | 1.04 | % | 1.08 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.86 | %C | 0.98 | % | 0.98 | % | 0.97 | % | 1.04 | % | 1.08 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.51 | %C | 1.38 | % | 1.78 | % | 1.48 | % | 1.83 | % | 1.44 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.51 | %C | 1.38 | % | 1.78 | % | 1.48 | % | 1.83 | % | 1.44 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 10 | %B | 25 | % | 25 | % | 32 | % | 29 | % | 34 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
See accompanying notes
39
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 28.27 | $ | 23.57 | $ | 26.17 | $ | 29.03 | $ | 25.81 | $ | 20.29 | ||||||||||||||||||||||||||||||||
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Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.13 | 0.09 | 0.20 | 0.27 | 0.35 | 0.23 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.46 | 5.11 | (0.19 | ) | (0.70 | ) | 3.11 | 5.58 | ||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.59 | 5.20 | 0.01 | (0.43 | ) | 3.46 | 5.81 | |||||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.24 | ) | (0.28 | ) | (0.23 | ) | (0.42 | ) | (0.24 | ) | (0.29 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.58 | ) | (0.22 | ) | (2.38 | ) | (2.01 | ) | - | - | ||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total distributions | (2.82 | ) | (0.50 | ) | (2.61 | ) | (2.43 | ) | (0.24 | ) | (0.29 | ) | ||||||||||||||||||||||||||||||||
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Net asset value, end of period | $ | 26.04 | $ | 28.27 | $ | 23.57 | $ | 26.17 | $ | 29.03 | $ | 25.81 | ||||||||||||||||||||||||||||||||
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Total returnA | 1.86 | %B | 22.27 | % | 0.51 | % | (1.83 | )% | 13.48 | % | 29.00 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 7,607,431 | $ | 8,351,349 | $ | 8,950,263 | $ | 12,389,141 | $ | 9,964,292 | $ | 5,199,605 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.43 | %C | 1.72 | % | 1.74 | % | 1.73 | % | 1.79 | % | 1.84 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.43 | %C | 1.72 | % | 1.74 | % | 1.73 | % | 1.81 | % | 1.92 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 0.95 | %C | 0.66 | % | 1.02 | % | 0.73 | % | 1.09 | % | 0.68 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 0.95 | %C | 0.66 | % | 1.02 | % | 0.73 | % | 1.07 | % | 0.60 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 10 | %B | 25 | % | 25 | % | 32 | % | 29 | % | 34 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
See accompanying notes
40
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||||||||||
Six Months Ended April 30, 2018 | February 28, 2017A to October 31, 2017 | |||||||||||
|
| |||||||||||
(unaudited) | ||||||||||||
Net asset value, beginning of period | $ | 30.98 | $ | 28.64 | ||||||||
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||
Net investment income | 0.36 | 0.12 | ||||||||||
Net gains on investments (both realized and unrealized) | 0.43 | 2.22 | ||||||||||
|
|
|
| |||||||||
Total income from investment operations | 0.79 | 2.34 | ||||||||||
|
|
|
| |||||||||
Less distributions: | ||||||||||||
Dividends from net investment income | (0.56 | ) | - | |||||||||
Distributions from net realized gains | (2.58 | ) | - | |||||||||
|
|
|
| |||||||||
Total distributions | (3.14 | ) | - | |||||||||
|
|
|
| |||||||||
Net asset value, end of period | $ | 28.63 | $ | 30.98 | ||||||||
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|
| |||||||||
Total returnB | 2.33 | %C | 8.17 | %C | ||||||||
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|
| |||||||||
Ratios and supplemental data: | ||||||||||||
Net assets, end of period | $ | 355,474,599 | $ | 40,982,401 | ||||||||
Ratios to average net assets: | ||||||||||||
Expenses, before reimbursements | 0.57 | %D | 0.60 | %D | ||||||||
Expenses, net of reimbursements | 0.57 | %D | 0.58 | %D | ||||||||
Net investment income, before expense reimbursements | 1.65 | %D | 1.38 | %D | ||||||||
Net investment income, net of reimbursements | 1.64 | %D | 1.40 | %D | ||||||||
Portfolio turnover rate | 10 | %C | 25 | %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 February 28, 2017 through October 31, 2017 and is not annualized. |
See accompanying notes
41
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. 20549-1520. 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 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 Kansas City, Missouri | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ERNST & YOUNG LLP Dallas, Texas | DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, TX |
This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.
American Beacon Funds and American Beacon Large Cap Value Fund are service marks of American Beacon Advisors, Inc.
SAR 04/18
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.
GARCIA HAMILTON QUALITY BOND FUND RISKS
The use of fixed-income securities entails interest rate and credit risks. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.
This may contain information obtained from third parties, including ratings from credit rating agencies such as Standard & Poor’s. Reproduction and distribution of third-party content in any form is prohibited except with the prior written permission of the related third party. Third-party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD-PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD-PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS.
Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes and should not be relied on as investment advice.
Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.
American Beacon Funds | April 30, 2018 |
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24 |
| Back Cover |
![]() | Dear Shareholders,
Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term investment goals: Institutional wisdom + earned alpha = enduring value.
u We believe institutional wisdom comes from having more than 30 years of experience as manager of one of the country’s largest pension plans. As a fiduciary, we have built an investment due-diligence and oversight infrastructure, which we leverage across all our investment products. When selecting our investment managers, we focus on their people, processes and performance. We perform due-diligence reviews with each investment manager on a quarterly basis.
u We believe earned alpha – that is, the returns of an actively managed fund beyond a benchmark – comes from employing and engaging |
investment managers we believe are best-in-class and who have defined, repeatable and proven processes. Our experience has shown us that, while it’s important to be mindful of short-term considerations, having a long-term focus helps manage expectations, mitigate risks and realize goals. Thus, we seek relationships with leading investment managers who display a willingness to undertake time-intensive research strategies. The resulting investment portfolios are differentiated from their peers and allow incremental changes to help address periods of market volatility and economic uncertainty. |
u | We believe enduring value comes from “putting a portfolio in place and sticking with the plan.” Our mutual funds provide you with access to institutional-quality, research-intensive investment managers with diverse processes and styles. In the long run, having such access and spending time in the market – rather than trying to time the market – may better position you to reach your long-term investment goals. |
The markets and U.S. economy were robust during calendar year 2017. However, during periods of market volatility and economic uncertainty – such as what we’ve seen thus far in 2018 – investing for the long term requires conviction. It isn’t about identifying and anticipating the next big market move. It’s about identifying the right investment products for riding out those moves. It’s about developing an approach based on long-term participation, while seeking some measure of protection against ongoing volatility.
As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings. Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for high quality and lower risk.
At American Beacon, our approach is more than a concept. It’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment products for your portfolio.
Thank you for your continued interest in American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon Garcia Hamilton Quality Bond FundSM
April 30, 2018 (Unaudited)
The Investor Class of the American Beacon Garcia Hamilton Quality Bond Fund (“the Fund”) returned 0.16% for the six months ended April 30, 2018, outperforming the Bloomberg Barclays U.S. Aggregate Bond Index (the “Index”) return of -1.87% for the same period.
Total Returns for the Period ended April 30, 2018 | ||||||||||||||||||||
Ticker | 6 Months* | 1 Year | Since Inception (04/04/2016) | |||||||||||||||||
Institutional Class (1,3) | GHQIX | 0.25 | % | 1.42 | % | 0.73 | % | |||||||||||||
Y Class (1,3) | GHQYX | 0.30 | % | 1.43 | % | 0.63 | % | |||||||||||||
Investor Class (1,3) | GHQPX | 0.16 | % | 1.14 | % | 0.40 | % | |||||||||||||
Bloomberg Barclays U.S. Aggregate Bond Index (2) | (1.87 | )% | (0.32 | )% | 0.41 | % |
* | Not Annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of the date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. 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 Bloomberg Barclays U.S. Aggregate Bond Index is a market value weighted performance benchmark for government, corporate, mortgage-backed and asset-backed fixed-rate debt securities of all maturities. |
3. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y and Investor Class shares were 0.70%, 0.77% and 0.94%, 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 outperformance was primarily due to its duration management. For the period, the Fund maintained a shorter duration than the benchmark, which was beneficial as interest rates rose. The subadvisor believed the market was underestimating the pace of future rate hikes, the impact of the Fed’s reduction of its balance sheet, and the potential bias for rates to move higher as geopolitical tensions with North Korea eased.
In addition to active duration management, the Fund maintained a barbell yield-curve position in anticipation of a flatter treasury curve. The Fund was overweight the shortest and longest durations along the curve and was underweight in the middle. Floating-rate corporate bonds and agency issues were used to generate yield and protect from rising rates at the short end, and 30-year treasury bonds were used to manage overall duration at the long end of the curve.
From a sector-allocation perspective, the Fund was underweight the credit sector on a duration-adjusted basis. This positioning benefited the Fund as fixed-rate spreads widened during the period. The subadvisor believed there was little value in fixed-rate spread risk, especially as the coupons on floating-rate securities adjusted higher with short-term interest rates.
Overall, the Fund continues to emphasize high-quality, active fixed-income investing that seeks to perform well in volatile markets and serves an important role in asset allocation.
2
American Beacon Garcia Hamilton Quality Bond FundSM
Performance Overview
April 30, 2018 (Unaudited)
Top Ten Holdings (% Net Assets) | ||||||||
Federal Home Loan Mortgage Corp., 2.156%, Due 7/5/2019 | 7.9 | |||||||
U.S. Treasury Notes/Bonds, 1.625%, Due 2/15/2026 | 7.8 | |||||||
U.S. Treasury Notes/Bonds, 2.875%, Due 8/15/2045 | 7.6 | |||||||
Federal Home Loan Bank, 2.152%, Due 10/26/2018 | 5.8 | |||||||
Federal Home Loan Bank, 1.911%, Due 6/12/2019 | 5.7 | |||||||
U.S. Treasury Notes/Bonds, 2.500%, Due 5/15/2046 | 4.2 | |||||||
Apple, Inc., 2.089%, Due 5/6/2019 | 3.7 | |||||||
American Express Credit Corp., 2.728%, Due 3/18/2019 | 3.4 | |||||||
Morgan Stanley, 3.759%, Due 10/24/2023 | 3.4 | |||||||
Merck & Co., Inc., 2.186%, Due 2/10/2020 | 3.3 | |||||||
Total Fund Holdings | 30 | |||||||
Sector Allocation (% Investments) | ||||||||
U.S. Treasury Obligations | 27.0 | |||||||
Financial | 20.2 | |||||||
U.S. Government Agency Obligations | 19.0 | |||||||
U.S. Agency Mortgage-Backed Obligations | 13.8 | |||||||
Technology | 9.0 | |||||||
Consumer, Non-Cyclical | 4.8 | |||||||
Communications | 3.2 | |||||||
Energy | 3.0 |
3
American Beacon Garcia Hamilton Quality Bond FundSM
April 30, 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 November 1, 2017 through April 30, 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.
4
American Beacon Garcia Hamilton Quality Bond FundSM
Expense Examples
April 30, 2018 (Unaudited)
American Beacon Garcia Hamilton Quality Bond Fund | |||||||||||||||
Beginning Account Value 11/1/2017 | Ending Account Value 4/30/2018 | Expenses Paid During Period 11/1/2017-4/30/2018* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,002.50 | $2.23 | ||||||||||||
Hypothetical** | $1,000.00 | $1,022.60 | $2.26 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,003.00 | $2.73 | ||||||||||||
Hypothetical** | $1,000.00 | $1,022.10 | $2.76 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,001.60 | $4.12 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.70 | $4.16 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.45%, 0.55%, and 0.83% for the Institutional, Y, and Investor Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon Garcia Hamilton Quality Bond FundSM
April 30, 2018 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 37.46% | |||||||||||||||
Communications - 2.94% | |||||||||||||||
Walt Disney Co., 2.415%, Due 3/4/2022, (3-mo. USD LIBOR + 0.390%)A | $ | 4,336,000 | $ | 4,360,754 | |||||||||||
|
| ||||||||||||||
Consumer, Non-Cyclical - 4.51% | |||||||||||||||
Merck & Co., Inc., 2.186%, Due 2/10/2020, (3-mo. USD LIBOR + 0.375%)A | 4,860,000 | 4,887,314 | |||||||||||||
PepsiCo, Inc., 2.728%, Due 5/2/2022, (3-mo. USD LIBOR + 0.365%)A | 1,800,000 | 1,811,626 | |||||||||||||
|
| ||||||||||||||
6,698,940 | |||||||||||||||
|
| ||||||||||||||
Energy - 2.83% | |||||||||||||||
Chevron Corp., 2.369%, Due 11/15/2021, (3-mo. USD LIBOR + 0.530%)A | 4,140,000 | 4,201,835 | |||||||||||||
|
| ||||||||||||||
Financial - 18.83% | |||||||||||||||
American Express Credit Corp., 2.728%, Due 3/18/2019, (3-mo. USD LIBOR + 0.550%)A | 5,099,000 | 5,118,040 | |||||||||||||
Goldman Sachs Group, Inc., 3.584%, Due 11/29/2023, (3-mo. USD LIBOR + 1.600%)A | 4,080,000 | 4,253,033 | |||||||||||||
JPMorgan Chase & Co., 3.589%, Due 10/24/2023, (3-mo. USD LIBOR + 1.230%)A | 4,700,000 | 4,809,069 | |||||||||||||
Morgan Stanley, 3.759%, Due 10/24/2023, (3-mo. USD LIBOR + 1.400%)A | 4,935,000 | 5,073,373 | |||||||||||||
US Bank NA, 2.839%, Due 10/28/2019, (3-mo. USD LIBOR + 0.480%)A | 4,240,000 | 4,259,601 | |||||||||||||
Wells Fargo & Co., | |||||||||||||||
3.387%, Due 7/26/2021, (3-mo. USD LIBOR + 1.025%)A | 2,815,000 | 2,867,389 | |||||||||||||
3.469%, Due 1/24/2023, (3-mo. USD LIBOR + 1.110%)A | 1,542,000 | 1,563,619 | |||||||||||||
|
| ||||||||||||||
27,944,124 | |||||||||||||||
|
| ||||||||||||||
Technology - 8.35% | |||||||||||||||
Apple, Inc., 2.089%, Due 5/6/2019, (3-mo. USD LIBOR + 0.300%)A | 5,504,000 | 5,522,397 | |||||||||||||
Intel Corp., 2.161%, Due 5/11/2022, (3-mo. USD LIBOR + 0.350%)A | 2,560,000 | 2,580,364 | |||||||||||||
Oracle Corp., 2.928%, Due 1/15/2019, (3-mo. USD LIBOR + 0.580%)A | 4,280,000 | 4,293,152 | |||||||||||||
|
| ||||||||||||||
12,395,913 | |||||||||||||||
|
| ||||||||||||||
Total Corporate Obligations (Cost $55,232,863) | 55,601,566 | ||||||||||||||
|
| ||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS - 17.67% | |||||||||||||||
Federal Farm Credit Banks, | |||||||||||||||
1.987%, Due 5/25/2018, (1-mo. USD LIBOR + 0.090%)A | 1,525,000 | 1,525,261 | |||||||||||||
2.016%, Due 11/13/2018, (1-mo. USD LIBOR + 0.120%)A | 4,220,000 | 4,225,168 | |||||||||||||
2.068%, Due 1/22/2019, (1-mo. USD LIBOR + 0.170%)A | 3,405,000 | 3,411,486 | |||||||||||||
Federal Home Loan Bank, | |||||||||||||||
1.911%, Due 6/12/2019, (3-mo. USD LIBOR - 0.160%)A | 8,490,000 | 8,499,466 | |||||||||||||
2.152%, Due 10/26/2018, (3-mo. USD LIBOR - 0.210%)A | 8,560,000 | 8,563,826 | |||||||||||||
|
| ||||||||||||||
Total U.S. Government Agency Obligations (Cost $26,214,815) | 26,225,207 | ||||||||||||||
|
| ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 12.82% | |||||||||||||||
Federal Home Loan Mortgage Corp., | |||||||||||||||
2.156%, Due 7/5/2019, (3-mo. USD LIBOR - 0.165%)A | 11,635,000 | 11,652,240 | |||||||||||||
4.500%, Due 12/1/2034 | 3,110,649 | 3,254,874 | |||||||||||||
Federal National Mortgage Association, | |||||||||||||||
5.500%, Due 1/1/2024 | 2,176,769 | 2,272,196 | |||||||||||||
5.000%, Due 7/1/2026 | 1,816,967 | 1,852,640 | |||||||||||||
|
| ||||||||||||||
Total U.S. Agency Mortgage-Backed Obligations (Cost $19,212,725) | 19,031,950 | ||||||||||||||
|
| ||||||||||||||
U.S. TREASURY OBLIGATIONS - 25.18% | |||||||||||||||
U.S. Treasury Notes/Bonds, | |||||||||||||||
2.000%, Due 10/31/2022 | 3,975,000 | 3,846,279 | |||||||||||||
1.625%, Due 2/15/2026 | 12,740,000 | 11,592,405 | |||||||||||||
2.375%, Due 5/15/2027 | 2,830,000 | 2,704,861 | |||||||||||||
6.250%, Due 5/15/2030 | 1,245,000 | 1,659,254 | |||||||||||||
2.875%, Due 8/15/2045 | 11,770,000 | 11,295,062 | |||||||||||||
2.500%, Due 5/15/2046 | 7,065,000 | 6,274,879 | |||||||||||||
|
| ||||||||||||||
Total U.S. Treasury Obligations (Cost $37,203,947) | 37,372,740 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
6
American Beacon Garcia Hamilton Quality Bond FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
SHORT-TERM INVESTMENTS - 6.56% | |||||||||||||||
Investment Companies - 0.33% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%B C | 498,687 | $ | 498,687 | ||||||||||||
|
| ||||||||||||||
Principal Amount | |||||||||||||||
U.S. Government Agency Obligations - 6.23% | |||||||||||||||
Federal Home Loan Bank Discount Note, 1.654%, Due 5/4/2018 | $ | 9,245,000 | 9,243,687 | ||||||||||||
|
| ||||||||||||||
Total Short-Term Investments (Cost $9,742,431) | 9,742,374 | ||||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 99.69% (Cost $147,606,781) | 147,973,837 | ||||||||||||||
OTHER ASSETS, NET OF LIABILITIES - 0.31% | 455,681 | ||||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 148,429,518 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A 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 April 30, 2018.
B The Fund is affiliated by having the same investment advisor.
C 7-day yield.
LIBOR - London Interbank Offered Rate.
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2018, the investments were classified as described below:
Garcia Hamilton Quality Bond Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Corporate Obligations | $ | - | $ | 55,601,566 | $ | - | $ | 55,601,566 | ||||||||||||||||||||
U.S. Government Agency Obligations | - | 26,225,207 | - | 26,225,207 | ||||||||||||||||||||||||
U.S. Agency Mortgage-Backed Obligations | - | 19,031,950 | - | 19,031,950 | ||||||||||||||||||||||||
U.S. Treasury Obligations | - | 37,372,740 | - | 37,372,740 | ||||||||||||||||||||||||
Short-Term Investments | ||||||||||||||||||||||||||||
Investment Companies | 498,687 | - | - | 498,687 | ||||||||||||||||||||||||
U.S. Government Agency Obligations | - | 9,243,687 | - | 9,243,687 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 498,687 | $ | 147,475,150 | $ | - | $ | 147,973,837 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
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 April 30, 2018, there were no transfers between levels.
See accompanying notes
7
American Beacon Garcia Hamilton Quality Bond FundSM
Statement of Assets and Liabilities
April 30, 2018 (Unaudited)
Assets: |
| |||
Investments in unaffiliated securities, at fair value† | $ | 147,475,150 | ||
Investments in affiliated securities, at fair value‡ | 498,687 | |||
Cash | 24,082 | |||
Interest receivable | 516,095 | |||
Receivable for fund shares sold | 5,281 | |||
Receivable for expense reimbursement (Note 2) | 29,017 | |||
Prepaid expenses | 41,582 | |||
|
| |||
Total assets | 148,589,894 | |||
|
| |||
Liabilities: | ||||
Payable for fund shares redeemed | 33,748 | |||
Dividends payable | 3,614 | |||
Management and sub-advisory fees payable (Note 2) | 66,731 | |||
Service fees payable (Note 2) | 2,193 | |||
Transfer agent fees payable (Note 2) | 5,673 | |||
Custody and fund accounting fees payable | 7,345 | |||
Professional fees payable | 40,781 | |||
Trustee fees payable (Note 2) | 291 | |||
|
| |||
Total liabilities | 160,376 | |||
|
| |||
Net assets | $ | 148,429,518 | ||
|
| |||
Analysis of net assets: | ||||
Paid-in-capital | $ | 151,467,124 | ||
(Overdistribution) of net investment income | (87,308 | ) | ||
Accumulated net realized (loss) | (3,317,354 | ) | ||
Unrealized appreciation of investments in unaffiliated securitiesA | 367,056 | |||
|
| |||
Net assets | $ | 148,429,518 | ||
|
| |||
Shares outstanding at no par value (unlimited shares authorized): | ||||
Institutional Class | 13,678,236 | |||
|
| |||
Y Class | 314,960 | |||
|
| |||
Investor Class | 1,069,406 | |||
|
| |||
Net assets: | ||||
Institutional Class | $ | 134,786,871 | ||
|
| |||
Y Class | $ | 3,102,235 | ||
|
| |||
Investor Class | $ | 10,540,412 | ||
|
| |||
Net asset value, offering and redemption price per share: | ||||
Institutional Class | $ | 9.85 | ||
|
| |||
Y Class | $ | 9.85 | ||
|
| |||
Investor Class | $ | 9.86 | ||
|
| |||
† Cost of investments in unaffiliated securities | $ | 147,108,094 | ||
‡ Cost of investments in affiliated securities | $ | 498,687 | ||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
See accompanying notes
8
American Beacon Garcia Hamilton Quality Bond FundSM
Statement of Operations
For the period ended April 30, 2018 (Unaudited)
Investment income: | ||||
Dividend income from affiliated securities (Note 8) | $ | 21,850 | ||
Interest income | 1,468,485 | |||
|
| |||
Total investment income | 1,490,335 | |||
|
| |||
Expenses: | ||||
Management and sub-advisory fees (Note 2) | 398,395 | |||
Transfer agent fees: | ||||
Institutional Class (Note 2) | 28,045 | |||
Y Class (Note 2) | 1,370 | |||
Investor Class | 790 | |||
Custody and fund accounting fees | 10,156 | |||
Professional fees | 23,226 | |||
Registration fees and expenses | 23,320 | |||
Service fees (Note 2): | ||||
Investor Class | 12,607 | |||
Prospectus and shareholder report expenses | 6,630 | |||
Trustee fees (Note 2) | 4,344 | |||
Other expenses | 6,005 | |||
|
| |||
Total expenses | 514,888 | |||
|
| |||
Net fees waived and expenses (reimbursed) (Note 2) | (168,232 | ) | ||
|
| |||
Net expenses | 346,656 | |||
|
| |||
Net investment income | 1,143,679 | |||
|
| |||
Realized and unrealized gain (loss) from investments: | ||||
Net realized loss from: | ||||
Investments in unaffiliated securitiesA | (859,611 | ) | ||
Change in net unrealized appreciation of: | ||||
Investments in unaffiliated securitiesB | 186,158 | |||
|
| |||
Net (loss) from investments | (673,453 | ) | ||
|
| |||
Net increase in net assets resulting from operations | $ | 470,226 | ||
|
| |||
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 period end. |
|
See accompanying notes
9
American Beacon Garcia Hamilton Quality Bond FundSM
Statement of Changes in Net Assets
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||
(unaudited) | ||||||||||||
Increase (decrease) in net assets: | ||||||||||||
Operations: | ||||||||||||
Net investment income | $ | 1,143,679 | $ | 1,879,017 | ||||||||
Net realized (loss) from investments in unaffiliated securities | (859,611 | ) | (2,226,277 | ) | ||||||||
Change in net unrealized appreciation of investments in unaffiliated securities | 186,158 | 1,566,653 | ||||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 470,226 | 1,219,393 | ||||||||||
|
|
|
| |||||||||
Distributions to shareholders: |
| |||||||||||
Net investment income: | ||||||||||||
Institutional Class | (1,137,713 | ) | (1,962,423 | ) | ||||||||
Y Class | (24,947 | ) | (43,416 | ) | ||||||||
Investor Class | (68,329 | ) | (104,914 | ) | ||||||||
Net realized gain from investments: | ||||||||||||
Institutional Class | – | (90,251 | ) | |||||||||
Y Class | – | (2,127 | ) | |||||||||
Investor Class | – | (6,000 | ) | |||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (1,230,989 | ) | (2,209,131 | ) | ||||||||
|
|
|
| |||||||||
Capital share transactions (Note 9): |
| |||||||||||
Proceeds from sales of shares | 15,690,635 | 30,683,516 | ||||||||||
Reinvestment of dividends and distributions | 1,227,127 | 2,206,616 | ||||||||||
Cost of shares redeemed | (13,160,399 | ) | (22,360,012 | ) | ||||||||
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 3,757,363 | 10,530,120 | ||||||||||
|
|
|
| |||||||||
Net increase in net assets | 2,996,600 | 9,540,382 | ||||||||||
|
|
|
| |||||||||
Net assets: |
| |||||||||||
Beginning of period | 145,432,918 | 135,892,536 | ||||||||||
|
|
|
| |||||||||
End of period * | $ | 148,429,518 | $ | 145,432,918 | ||||||||
|
|
|
| |||||||||
*Includes undistributed (overdistribution of) net investment income | $ | (87,308 | ) | $ | 2 | |||||||
|
|
|
|
See accompanying notes
10
American Beacon Garcia Hamilton Quality Bond FundSM
April 30, 2018 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”), is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940 (the “Act”), as amended, as a diversified, open-end management investment company. As of April 30, 2018, the Trust consists of thirty-three active series, one of which is presented in this filing: American Beacon Garcia Hamilton Quality Bond 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 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 |
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.
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 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 as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.
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. Realized gains (losses) from securities sold are determined on the basis of specific lot identification.
11
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 Fund 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 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.
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 Garcia Hamilton & Associates, L.P. (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 $1 billion | 0.20 | % | ||
Over $1 billion | 0.15 | % |
12
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
The Management and Sub-Advisory Fees paid by the Fund for the period ended April 30, 2018 were as follows:
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 253,524 | ||||||||
Sub-Advisor Fees | 0.20 | % | 144,871 | |||||||||
|
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| |||||||||
Total | 0.55 | % | $ | 398,395 | ||||||||
|
|
|
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Distribution Plans
The Fund has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the management 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.
Service Plans
The Manager and the Trust entered into a Service Plan that obligates the Manager to oversee additional shareholder servicing of the Investor Class of the Fund. As compensation for performing the duties required under the Service Plan, the Manager receives an annualized fee up to 0.375% of the average daily net assets of the Investor Class of the Fund.
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 and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. 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 period ended April 30, 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 | |||
Garcia Hamilton Quality Bond | $ | 27,137 |
As of April 30, 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 | |||
Garcia Hamilton Quality Bond | $ | 4,556 |
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
13
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 period ended April 30, 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 | |||
Garcia Hamilton Quality Bond | $ | 1,604 |
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 Fund 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 period ended April 30, 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 period ended April 30, 2018, the Manager waived and/or reimbursed expenses as follows:
Expense Cap | Expiration of Reimbursed Expenses | |||||||||||||||||
Fund | Class | 11/1/2017 - 4/30/2018 | Reimbursed Expenses | (Recouped) Expenses | ||||||||||||||
Garcia Hamilton Quality Bond | Institutional | 0.45 | % | $ | 160,866 | $ | – | 2021 | ||||||||||
Garcia Hamilton Quality Bond | Y | 0.55 | % | 2,930 | – | 2021 | ||||||||||||
Garcia Hamilton Quality Bond | Investor | 0.83 | % | 4,436 | – | 2021 |
Of these amounts, $29,017 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at April 30, 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 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 | ||||||||||||
Garcia Hamilton Quality Bond | $ | – | $ | 248,391 | $ | - | 2019 | |||||||||
Garcia Hamilton Quality Bond | – | 334,782 | – | 2020 |
14
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
The Distributor
Effective March 1, 2018, Resolute Investment Distributors, Inc. (“RID” or “Distributor”) replaced Foreside Fund Services, LLC (“Foreside”) as the Fund(s)’ distributor and principal underwriter of the Funds’ shares.
RID is a registered broker-dealer and is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Distributor is affiliated with the Manager through common ownership. Under a Distribution Agreement with the Trust, the Distributor acts as the distributor and principal underwriter of the Trust in connection with the continuous offering of shares of the Funds. The Distributor continually distributes shares of the Funds on a best efforts basis. The Distributor has no obligation to sell any specific quantity of the Funds’ shares. Pursuant to the Distribution Agreement, to the extent applicable, the Distributor receives, and may re-allow to broker-dealers, all or a portion of the sales charge paid by the purchasers of A Class and C Class shares. For A Class and C Class shares, the Distributor receives commission revenue consisting of the portion of A Class and C Class sales charge remaining after the allowances by the Distributor to the broker-dealers. The Distributor retains any portion of the commission fees that are not paid to the broker-dealers for use solely to pay distribution related expenses.
Prior to March 1, 2018, Foreside served as the distributor and principal underwriter of the Funds’ shares. Pursuant to a Sub-Administration Agreement between Foreside and the Manager in effect through February 28, 2018, Foreside received a fee from the Manager for providing administrative services in connection with the marketing and distribution of shares of the Trust, including the registration of Manager employees as registered representatives of Foreside to facilitate distribution of Fund shares. Foreside also received a fee from the Manager under a Marketing Agreement pursuant to which Foreside provided services in connection with the marketing of a Fund to institutional investors. Pursuant to the Distribution Agreement with the Trust in effect through February 28, 2018, Foreside received, and may have re-allowed to broker-dealers, all or a portion of the sales charge paid by the purchasers of A and C Class shares. For A and C Class shares, Foreside received commission revenues consisting of the portion of A and C Class sales charge remaining after the allowances by Foreside to the broker dealers. Foreside retained any portion of the commission fees that were not paid to the broker-dealers for use solely to pay distribution related expenses.
Trustee Fees and Expenses
As compensation for their service to the Trust, the American Beacon Select Funds, the American Beacon Institutional Funds Trust, and American Beacon Sound Point Enhanced Income Fund, 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
The price of the Fund’s shares is based on the Fund’s Net Asset Value (“NAV”). The NAV of the Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to the Fund or class, by the total number of shares outstanding of the Fund or class.
15
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally at 4:00 p.m. Eastern Time, each day that the Exchange is open for business.
Debt securities normally are valued on the 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. | ||
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.
Mortgage-related and asset-backed securities are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by pricing service providers that use broker-dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, current market data, estimated cash flows, and market-based yield spreads for each tranche, and incorporates deal collateral performance, as available. Mortgage-related and asset-backed securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
16
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
4. Securities and Other Investments
Agency Mortgage-Backed Securities
Certain mortgage-backed securities (“MBS”) may be issued or guaranteed by the U.S. government or a government sponsored entity, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Although these instruments may be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit of the United States and are still exposed to the risk of non-payment.
Fixed-Income Investments
The Fund may hold debt, including government and corporate debt, and other fixed-income securities. Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause the Fund’s net asset value to likewise decrease, and vice versa. How specific fixed-income securities may react to changes in interest rates will depend on the specific characteristics of each security. 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.
Mortgage-Backed Securities
MBS often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities’ effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of the Fund’s portfolio at the time resulting in reinvestment risk.
Rising or high interest rates may result in slower than expected principal payments which may tend to extend the duration of MBS, making them more volatile and more sensitive to changes in interest rates. This is known as extension risk.
MBS may have less potential for capital appreciation than comparable fixed-income securities due to the likelihood of increased prepayments of mortgages resulting from foreclosures or declining interest rates. These foreclosed or refinanced mortgages are paid off at face value (par) or less, causing a loss, particularly for any investor who may have purchased the security at a premium or a price above par. In such an environment, this risk limits the potential price appreciation of these securities.
Mortgage-Related and Other Asset-Backed Securities
The Fund may invest in mortgage or other ABS. These securities may include mortgage instruments issued by U.S. government agencies (“agency mortgages”) or those issued by private entities (“non-agency mortgages”). Specific types of instruments may include mortgage pass-through securities, collateralized mortgage obligations
17
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
(“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage-backed securities and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property. The value of the Fund’s MBS may be affected by, among other things, changes or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgage, or the quality of the underlying assets. The mortgages underlying the securities may default or decline in quality or value. Through its investments in MBS, a Fund has exposure to subprime loans, Alt-A loans and non-conforming loans as well as to the mortgage and credit markets generally. Underlying collateral related to subprime, Alt-A and non-conforming mortgage loans has become increasingly susceptible to defaults and declines in quality or value, especially in a declining residential real estate market. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole.
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 Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
U.S. Government Agency Securities
U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government currently provides financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law. U.S. Government securities include U.S. Treasury bills, notes and bonds, Federal Home Loan Bank (“FHLB”) obligations, Federal Farm Credit Bank (“FFCB”) obligations, U.S. Government agency obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.
U.S. Treasury Obligations
U.S. Treasury obligations include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations (known as “STRIPS”) and inflation-indexed securities. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates. U.S. Treasury obligations are subject to credit risk and interest rate risk.
18
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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.
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.
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 several times since December 2015 and has signaled additional increases in the near future. 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. Some investors buy securities with borrowed money; an increase in interest rates can cause a decline in those markets.
Investment Risk
An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.
Liquidity Risk
The Fund is 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 Fund could lose money if it is unable to dispose of an investment at a time that is most beneficial to the Fund. The Fund may be required to dispose of investments at unfavorable times or prices to satisfy obligations, which may result in losses or may be costly to the Fund. For example, the Fund may be forced to sell certain investments at unfavorable prices to meet redemption requests or other cash needs. Judgment plays a greater role in pricing illiquid investments than in investments with more active markets.
19
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Market Risk
Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects, which have resulted, and may continue to result, in fixed income instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations.
In addition, political events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. Because the impact on the markets has been widespread, it may be difficult to identify both risks and opportunities using past models of the interplay of market forces, or to predict the duration of these market conditions. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact on various markets of a significant rate increase, whether brought about by U.S. policy makers or by dislocations in world markets. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely.
Mortgage-Backed and Mortgage Related Securities Risk
Certain mortgage-backed and mortgage related securities may include securities backed by pools of loans made to “subprime” borrowers or borrowers with blemished credit histories; the risk of defaults is generally higher in the case of mortgage pools that include such subprime mortgages. A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed by the applicable entity only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Additionally, circumstances could arise that would prevent the payment of interest or principal. This could result in losses to the Fund. Securities held by the Fund that are issued by government-sponsored enterprises, such as the Fannie Mae, Freddie Mac, and FHLB are not guaranteed by the U.S. Treasury, are not backed by the full faith and credit of the U.S. Government and no assurance can be given that the U.S. Government will provide financial support. U.S. Government securities and securities of government sponsored enterprises are also subject to credit risk, interest rate risk and market risk. The Fund’s investment in CMOs may offer a higher yield than U.S. government securities, but they may also be subject to greater price fluctuation and credit risk. The cash flows and yields on interest only (“IO”) and principal only (“PO”) are extremely sensitive to the rate of principal payments (including prepayments) on the underlying mortgage loans or mortgage-backed securities. A rapid rate of principal payments may adversely affect the yield to maturity of IOs. A slow rate of principal payments may adversely affect the yield to maturity of POs. Inverse IOs and POs, which are fixed-income securities with a floating or variable rate of interest, may exhibit substantially greater price volatility than fixed rate obligations having similar credit quality, redemption provisions and maturity.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including ETFs and money market funds. To the extent that the Fund invest 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.
20
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 its price.
Redemption Risk
Due to a rise in interest rates or other market developments that may cause investors to move out of fixed income securities on a large scale, the Fund may experience periods of heavy redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Heavy redemptions could hurt the Fund’s performance.
Sector Risk
When the Fund focuses its investments in certain sectors of the economy, its performance may be driven largely by sector performance and could fluctuate more widely than if the Fund were invested more evenly across sectors.
To the extent the Fund invests in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition.
U.S. Government Securities and Government-Sponsored Enterprises Risk
A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed by the applicable entity only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Securities held by the Fund that are issued by government-sponsored enterprises, such as the Fannie Mae, Freddie Mac, FHLB, FFCB, and the Tennessee Valley Authority are not guaranteed by the U.S. Treasury and are not backed by the full faith and credit of the U.S. Government and no assurance can be given that the U.S. Government will provide financial support if these organizations do not have the funds to meet future payment obligations. U.S. Government securities and securities of government sponsored entities are also subject to credit risk, interest rate risk and market risk.
6. Federal Income and Excise Taxes
It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make 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 two year period ended October 31, 2017 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.
21
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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.
As of April 30, 2018 the tax cost for the Fund and their respective gross unrealized appreciation (depreciation) were as follows:
Fund | Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Garcia Hamilton Quality Bond | $ | 147,906,106 | $ | 323,356 | $ | (255,625 | ) | $ | 67,731 |
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.
As of October 31, 2017, the Fund had $1,844,567 of short-term and $313,851 long-term post RIC MOD capital loss carryforwards.
7. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 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 | ||||||||||||||||||||||||
Garcia Hamilton Quality Bond | $ | 5,775,410 | $ | 46,078,261 | $ | 4,290,742 | $ | 58,926,166 |
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2018 were as follows:
Fund | Type of Transaction | October 31, 2017 Shares/Fair Value | Purchases | Sales | April 30, 2018 Shares/Fair Value | Dividend Income | ||||||||||||||||||||||||||||||||||||||
Garcia Hamilton Quality Bond | Direct | $ | 1,557,790 | $ | 46,141,036 | $ | 47,200,139 | $ | 498,687 | $ | 21,850 |
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.
22
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 period ended April 30, 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 | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,438,545 | $ | 14,197,592 | 2,836,854 | $ | 27,939,755 | ||||||||||||||||||||||
Reinvestment of dividends | 114,749 | 1,134,251 | 207,980 | 2,050,230 | ||||||||||||||||||||||||
Shares redeemed | (1,257,682 | ) | (12,429,258 | ) | (2,086,333 | ) | (20,542,888 | ) | ||||||||||||||||||||
|
|
|
|
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|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 295,612 | $ | 2,902,585 | 958,501 | $ | 9,447,097 | ||||||||||||||||||||||
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Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 11,566 | $ | 114,475 | 28,621 | $ | 283,135 | ||||||||||||||||||||||
Reinvestment of dividends | 2,485 | 24,548 | 4,616 | 45,481 | ||||||||||||||||||||||||
Shares redeemed | (15,538 | ) | (154,150 | ) | (44,015 | ) | (430,968 | ) | ||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,487 | ) | $ | (15,127 | ) | (10,778 | ) | $ | (102,352 | ) | ||||||||||||||||||
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Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 139,571 | $ | 1,378,568 | 249,891 | $ | 2,460,626 | ||||||||||||||||||||||
Reinvestment of dividends | 6,911 | 68,328 | 11,248 | 110,905 | ||||||||||||||||||||||||
Shares redeemed | (58,435 | ) | (576,991 | ) | (140,498 | ) | (1,386,156 | ) | ||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 88,047 | $ | 869,905 | 120,641 | $ | 1,185,375 | ||||||||||||||||||||||
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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.
23
American Beacon Garcia Hamilton Quality Bond FundSM
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | April 4, 2016A to October 31, 2016 | ||||||||||||||||||
|
| |||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 9.91 | $ | 9.98 | $ | 10.00 | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income | 0.08 | 0.14 | 0.05 | |||||||||||||||||
Net (losses) on investments (both realized and unrealized) | (0.06 | ) | (0.05 | ) | (0.02 | ) | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total income (loss) from investment operations | 0.02 | 0.09 | 0.03 | |||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Less distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.08 | ) | (0.15 | ) | (0.05 | ) | ||||||||||||||
Distributions from net realized gains | – | (0.01 | ) | – | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total distributions | (0.08 | ) | (0.16 | ) | (0.05 | ) | ||||||||||||||
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|
|
|
| |||||||||||||||
Net asset value, end of period | $ | 9.85 | $ | 9.91 | $ | 9.98 | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total returnB | 0.25 | %C | 0.91 | % | 0.34 | %C | ||||||||||||||
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| |||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||
Net assets, end of period | $ | 134,786,871 | $ | 132,575,412 | $ | 124,032,604 | ||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Expenses, before reimbursements | 0.69 | %D | 0.70 | % | 1.06 | %D | ||||||||||||||
Expenses, net of reimbursements | 0.45 | %D | 0.45 | % | 0.45 | %D | ||||||||||||||
Net investment income, before expense reimbursements | 1.36 | %D | 1.12 | % | 0.29 | %D | ||||||||||||||
Net investment income, net of reimbursements | 1.61 | %D | 1.37 | % | 0.91 | %D | ||||||||||||||
Portfolio turnover rate | 48 | %C | 52 | % | 40 | %E | ||||||||||||||
Y Class | ||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | April 4, 2016A to October 31, 2016 | ||||||||||||||||||
|
| |||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 9.90 | $ | 9.98 | $ | 10.00 | ||||||||||||||
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|
|
|
|
| |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income | 0.07 | 0.13 | 0.05 | |||||||||||||||||
Net (losses) on investments (both realized and unrealized) | (0.04 | ) | (0.06 | ) | (0.02 | ) | ||||||||||||||
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|
|
|
|
| |||||||||||||||
Total income (loss) from investment operations | 0.03 | 0.07 | 0.03 | |||||||||||||||||
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|
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|
| |||||||||||||||
Less distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.08 | ) | (0.14 | ) | (0.05 | ) | ||||||||||||||
Distributions from net realized gains | – | (0.01 | ) | – | ||||||||||||||||
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|
|
|
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| |||||||||||||||
Total distributions | (0.08 | ) | (0.15 | ) | (0.05 | ) | ||||||||||||||
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| |||||||||||||||
Net asset value, end of period | $ | 9.85 | $ | 9.90 | $ | 9.98 | ||||||||||||||
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|
|
| |||||||||||||||
Total returnB | 0.30 | %C | 0.71 | % | 0.29 | %C | ||||||||||||||
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| |||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||
Net assets, end of period | $ | 3,102,235 | $ | 3,133,476 | $ | 3,265,315 | ||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Expenses, before reimbursements | 0.74 | %D | 0.77 | % | 1.29 | %D | ||||||||||||||
Expenses, net of reimbursements | 0.55 | %D | 0.55 | % | 0.55 | %D | ||||||||||||||
Net investment income, before expense reimbursements | 1.32 | %D | 1.05 | % | 0.11 | %D | ||||||||||||||
Net investment income, net of reimbursements | 1.51 | %D | 1.27 | % | 0.85 | %D | ||||||||||||||
Portfolio turnover rate | 48 | %C | 52 | % | 40 | %E |
A | Commencement of operations. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
E | Portfolio turnover rate is for the period from April 4, 2016 through October 31, 2016 and is not annualized. |
See accompanying notes
24
American Beacon Garcia Hamilton Quality Bond FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | April 4, 2016A to October 31, 2016 | ||||||||||||||||||
|
| |||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 9.91 | $ | 9.99 | $ | 10.00 | ||||||||||||||
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|
|
| |||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income | 0.06 | 0.10 | 0.03 | |||||||||||||||||
Net (losses) on investments (both realized and unrealized) | (0.04 | ) | (0.06 | ) | (0.01 | ) | ||||||||||||||
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|
|
|
|
| |||||||||||||||
Total income (loss) from investment operations | 0.02 | 0.04 | 0.02 | |||||||||||||||||
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| |||||||||||||||
Less distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.07 | ) | (0.11 | ) | (0.03 | ) | ||||||||||||||
Distributions from net realized gains | – | (0.01 | ) | – | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total distributions | (0.07 | ) | (0.12 | ) | (0.03 | ) | ||||||||||||||
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|
| |||||||||||||||
Net asset value, end of period | $ | 9.86 | $ | 9.91 | $ | 9.99 | ||||||||||||||
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| |||||||||||||||
Total returnB | 0.16 | %C | 0.43 | % | 0.24 | %C | ||||||||||||||
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| |||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||
Net assets, end of period | $ | 10,540,412 | $ | 9,724,030 | $ | 8,594,617 | ||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Expenses, before reimbursements | 0.92 | %D | 0.94 | % | 1.19 | %D | ||||||||||||||
Expenses, net of reimbursements | 0.83 | %D | 0.83 | % | 0.83 | %D | ||||||||||||||
Net investment income, before expense reimbursements | 1.15 | %D | 0.89 | % | 0.21 | %D | ||||||||||||||
Net investment income, net of reimbursements | 1.23 | %D | 0.99 | % | 0.57 | %D | ||||||||||||||
Portfolio turnover rate | 48 | %C | 52 | % | 40 | %E |
A | Commencement of operations. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
E | Portfolio turnover rate is for the period from April 4, 2016 through October 31, 2016 and is not annualized. |
See accompanying notes
25
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 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 Kansas City, Missouri | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas | 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 Garcia Hamilton Quality Bond Fund are service marks of American Beacon Advisors, Inc.
SAR 04/18
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.
INTERNATIONAL EQUITY FUND RISKS
Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. 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 | April 30, 2018 |
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Back Cover |
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![]() | Dear Shareholders,
Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term investment goals: Institutional wisdom + earned alpha = enduring value.
u We believe institutional wisdom comes from having more than 30 years of experience as manager of one of the country’s largest pension plans. As a fiduciary, we have built an investment due-diligence and oversight infrastructure, which we leverage across all our investment products. When selecting our investment managers, we focus on their people, processes and performance. We perform due-diligence reviews with each investment manager on a quarterly basis.
u We believe earned alpha – that is, the returns of an actively managed fund beyond a benchmark – comes from employing and engaging |
investment managers we believe are best-in-class and who have defined, repeatable and proven processes. Our experience has shown us that, while it’s important to be mindful of short-term considerations, having a long-term focus helps manage expectations, mitigate risks and realize goals. Thus, we seek relationships with leading investment managers who display a willingness to undertake time-intensive research strategies. The resulting investment portfolios are differentiated from their peers and allow incremental changes to help address periods of market volatility and economic uncertainty. |
u | We believe enduring value comes from “putting a portfolio in place and sticking with the plan.” Our mutual funds provide you with access to institutional-quality, research-intensive investment managers with diverse processes and styles. In the long run, having such access and spending time in the market – rather than trying to time the market – may better position you to reach your long-term investment goals. |
The markets and U.S. economy were robust during calendar year 2017. However, during periods of market volatility and economic uncertainty – such as what we’ve seen thus far in 2018 – investing for the long term requires conviction. It isn’t about identifying and anticipating the next big market move. It’s about identifying the right investment products for riding out those moves. It’s about developing an approach based on long-term participation, while seeking some measure of protection against ongoing volatility.
As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings. Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for high quality and lower risk.
At American Beacon, our approach is more than a concept. It’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment products for your portfolio.
Thank you for your continued interest in American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon International Equity FundSM
April 30, 2018 (Unaudited)
The Investor Class of the American Beacon International Equity Fund (the “Fund”) returned 2.84% for the six months ended April 30, 2018. The Fund underperformed the MSCI EAFE Index (the “Index”) return of 3.41%.
Total Returns for the Period ended April 30, 2018 | |||||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||
Institutional Class (1,8) | AAIEX | 3.02 | % | 13.57 | % | 3.75 | % | 5.91 | % | 2.74 | % | ||||||||||||||||||||||
Y Class (1,2,8) | ABEYX | 2.99 | % | 13.48 | % | 3.67 | % | 5.82 | % | 2.67 | % | ||||||||||||||||||||||
Investor Class (1,8) | AAIPX | 2.84 | % | 13.19 | % | 3.39 | % | 5.54 | % | 2.39 | % | ||||||||||||||||||||||
Advisor Class (1,3,8) | AAISX | 2.75 | % | 13.07 | % | 3.29 | % | 5.42 | % | 2.20 | % | ||||||||||||||||||||||
R6 Class (1,6,8) | AAERX | 3.05 | % | 13.66 | % | 3.78 | % | 5.92 | % | 2.75 | % | ||||||||||||||||||||||
A without Sales Charge (1,4,8) | AIEAX | 2.82 | % | 13.13 | % | 3.36 | % | 5.47 | % | 2.31 | % | ||||||||||||||||||||||
A with Sales Charge (1,4,8) | AIEAX | (3.10 | )% | 6.64 | % | 1.34 | % | 4.23 | % | 1.71 | % | ||||||||||||||||||||||
C without Sales Charge (1,5,8) | AILCX | 2.46 | % | 12.26 | % | 2.57 | % | 4.68 | % | 1.71 | % | ||||||||||||||||||||||
C with Sales Charge (1,5,8) | AILCX | 1.46 | % | 11.26 | % | 2.57 | % | 4.68 | % | 1.71 | % | ||||||||||||||||||||||
MSCI EAFE Index (7) | 3.41 | % | 14.51 | % | 4.94 | % | 5.90 | % | 2.43 | % |
* | Not annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. 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 the Institutional Class of the Fund was waived from 2013 through 2015. Performance prior to waiving fees was lower than actual returns shown from 2013 through 2015. |
2. | Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 4/30/08 up to 8/3/09, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/08. |
3. | A portion of the fees charged to the Advisor Class of the Fund was waived in 2007 and 2009. Performance prior to waiving fees was lower than the actual returns shown for these periods. |
4. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/08. A portion of the fees charged to the A Class of the Fund was waived from 2010 through 2012 and fully recovered in 2013. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. The maximum sales charge for A Class is 5.75%. |
5. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/08. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012, partially recovered in 2013, and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase. |
6. | Fund performance for the three-year, five-year and ten-year periods represent the returns achieved by the Institutional Class from 4/30/08 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/08. A portion of the fees charged to the R6 Class of the Fund has been waived since 2/28/17. Performance prior to waiving fees was lower than the actual returns shown. |
7. | The MSCI EAFE Index is a market capitalization weighted index of international stock performance composed of equities from developed markets excluding the U.S. and Canada. One cannot directly invest in an index. |
8. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and R6 Class shares were 0.73%, 0.80%, 1.07%, 1.20%, 1.12%, 1.88% and 0.89%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. |
2
American Beacon International Equity FundSM
Performance Overview
April 30, 2018 (Unaudited)
The Fund underperformed the Index over the six-month period due to stock selection, while country allocation helped relative performance.
Stock selections within France and Hong Kong negatively contributed to the Fund’s relative performance over the six-month period, despite value gained through selections in Italy. The Fund was hurt by investments in Compagnie De Saint Gobain – down 12.8% and Michelin (CGDE) – down 2.9% within France, and from its investment in China Merchants Port Holdings – down 28.5% and China Mobile Ltd. – down 5.3% within Hong Kong. Better performing investments in Italy included Tenaris SA – up 38.0% and Unicredit SPA – up 14.3%.
Country allocation buoyed the Fund’s relative underperformance, particularly by overweighting the United Kingdom – up 5.4% and underweighting Australia – up 1.1%. Underweighting Japan – up 5.4% detracted value to the Fund’s relative performance during the period.
Although economic and market conditions vary from period to period, the Fund’s primary strategy of investing in undervalued companies with above-average earnings growth expectations remains consistent.
Top Ten Holdings (% Net Assets) | ||||||||
Novartis AG | 2.2 | |||||||
Prudential PLC | 2.0 | |||||||
British American Tobacco PLC | 2.0 | |||||||
BP PLC | 1.9 | |||||||
Royal Dutch Shell PLC, Class B | 1.7 | |||||||
Volkswagen AG | 1.7 | |||||||
Samsung Electronics Co., Ltd. | 1.6 | |||||||
SAP SE | 1.4 | |||||||
Barclays PLC | 1.4 | |||||||
Shire PLC | 1.4 | |||||||
Total Fund Holdings | 164 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 19.3 | |||||||
Industrials | 15.7 | |||||||
Health Care | 11.7 | |||||||
Consumer Discretionary | 10.2 | |||||||
Energy | 10.1 | |||||||
Materials | 9.0 | |||||||
Telecommunication Services | 7.0 | |||||||
Consumer Staples | 6.8 | |||||||
Information Technology | 5.5 | |||||||
Utilities | 2.8 | |||||||
Real Estate | 1.9 |
3
American Beacon International Equity FundSM
Performance Overview
April 30, 2018 (Unaudited)
Country Allocation (% Equities) | ||||||||
United Kingdom | 21.2 | |||||||
Japan | 15.8 | |||||||
Germany | 10.2 | |||||||
France | 9.4 | |||||||
Switzerland | 7.4 | |||||||
Netherlands | 6.9 | |||||||
Canada | 5.1 | |||||||
Republic of Korea | 3.6 | |||||||
United States | 2.9 | |||||||
Denmark | 2.0 | |||||||
Norway | 1.7 | |||||||
Italy | 1.6 | |||||||
Ireland | 1.5 | |||||||
Sweden | 1.5 | |||||||
Australia | 1.5 | |||||||
Luxembourg | 1.3 | |||||||
China | 1.2 | |||||||
Singapore | 1.1 | |||||||
Hong Kong | 1.0 | |||||||
Belgium | 0.9 | |||||||
Spain | 0.8 | |||||||
Israel | 0.5 | |||||||
Finland | 0.5 | |||||||
Portugal | 0.4 |
4
American Beacon International Equity FundSM
April 30, 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 November 1, 2017 through April 30, 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 International Equity FundSM
Expense Examples
April 30, 2018 (Unaudited)
American Beacon International Equity Fund | |||||||||||||||
Beginning Account Value 11/1/2017 | Ending Account Value 4/30/2018 | Expenses Paid During Period 11/1/2017-4/30/2018* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,030.20 | $3.57 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.30 | $3.56 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,029.90 | $3.93 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.90 | $3.91 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,028.40 | $5.23 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.60 | $5.21 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,027.50 | $5.98 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.90 | $5.96 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,028.20 | $5.38 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.50 | $5.36 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,024.60 | $8.99 | ||||||||||||
Hypothetical** | $1,000.00 | $1,015.90 | $8.95 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,030.50 | $3.32 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.50 | $3.31 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.71%, 0.78%, 1.04%, 1.19%, 1.07%, 1.79%, and 0.66% for the Institutional, Y, Investor, Advisor, A, C and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
6
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
Australia - 1.42% | |||||||||||||||
Common Stocks - 1.42% | |||||||||||||||
BHP Billiton PLCA | 1,839,801 | $ | 38,999,274 | ||||||||||||
Caltex Australia Ltd.A | 290,708 | 6,766,367 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 45,765,641 | ||||||||||||||
|
| ||||||||||||||
Total Australia (Cost $35,685,034) | 45,765,641 | ||||||||||||||
|
| ||||||||||||||
Belgium - 0.90% | |||||||||||||||
Common Stocks - 0.90% | |||||||||||||||
Anheuser-Busch InBev S.A.A B | 164,722 | 16,309,025 | |||||||||||||
UCB S.A.A B | 166,830 | 12,572,029 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 28,881,054 | ||||||||||||||
|
| ||||||||||||||
Total Belgium (Cost $30,783,004) | 28,881,054 | ||||||||||||||
|
| ||||||||||||||
Canada - 4.89% | |||||||||||||||
Common Stocks - 4.89% | |||||||||||||||
Canadian Imperial Bank of Commerce | 27,435 | 2,389,545 | |||||||||||||
Canadian National Railway Co. | 176,300 | 13,617,096 | |||||||||||||
Canadian Pacific Railway Ltd. | 118,945 | 21,703,676 | |||||||||||||
Encana Corp. | 1,750,647 | 21,802,131 | |||||||||||||
Gildan Activewear, Inc. | 453,405 | 13,207,171 | |||||||||||||
Goldcorp, Inc. | 603,600 | 8,010,704 | |||||||||||||
Husky Energy, Inc. | 990,800 | 13,859,393 | |||||||||||||
Manulife Financial Corp. | 1,290,783 | 24,358,949 | |||||||||||||
National Bank of Canada | 403,502 | 19,163,949 | |||||||||||||
Suncor Energy, Inc. | 211,395 | 8,084,033 | |||||||||||||
Wheaton Precious Metals Corp. | 539,500 | 11,198,002 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 157,394,649 | ||||||||||||||
|
| ||||||||||||||
Total Canada (Cost $138,154,534) | 157,394,649 | ||||||||||||||
|
| ||||||||||||||
China - 1.15% | |||||||||||||||
Common Stocks - 1.15% | |||||||||||||||
China Merchants Port Holdings Co., Ltd.A | 2,543,068 | 5,682,223 | |||||||||||||
China Mobile Ltd.A | 3,303,776 | 31,418,688 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 37,100,911 | ||||||||||||||
|
| ||||||||||||||
Total China (Cost $40,936,332) | 37,100,911 | ||||||||||||||
|
| ||||||||||||||
Denmark - 1.92% | |||||||||||||||
Common Stocks - 1.92% | |||||||||||||||
AP Moller - Maersk A/S, Class BA | 8,274 | 13,248,912 | |||||||||||||
Carlsberg A/S, Class BA | 153,388 | 17,149,517 | |||||||||||||
Novozymes A/S, Class BA | 209,264 | 9,865,707 | |||||||||||||
Orsted A/SA C | 171,288 | 11,266,896 | |||||||||||||
Vestas Wind Systems A/SA | 160,403 | 10,362,173 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 61,893,205 | ||||||||||||||
|
| ||||||||||||||
Total Denmark (Cost $60,318,995) | 61,893,205 | ||||||||||||||
|
| ||||||||||||||
Finland - 0.49% (Cost $13,594,396) | |||||||||||||||
Common Stocks - 0.49% | |||||||||||||||
Sampo OYJ, Class AA | 292,130 | 15,713,795 | |||||||||||||
|
| ||||||||||||||
France - 9.08% | |||||||||||||||
Common Stocks - 9.08% | |||||||||||||||
Air Liquide S.A.A | 125,062 | 16,248,521 | |||||||||||||
AXA S.A.A B | 396,247 | 11,327,083 |
See accompanying notes
7
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
France - 9.08% (continued) | |||||||||||||||
Common Stocks - 9.08% (continued) | |||||||||||||||
BNP Paribas S.A.A | 401,153 | $ | 30,918,348 | ||||||||||||
Capgemini SEA | 142,171 | 19,512,098 | |||||||||||||
Cie de Saint-GobainA | 470,495 | 24,571,255 | |||||||||||||
Cie Generale des Etablissements MichelinA | 215,068 | 30,181,487 | |||||||||||||
Credit Agricole S.A.A | 417,175 | 6,854,002 | |||||||||||||
Engie S.A.A | 675,159 | 11,832,563 | |||||||||||||
Safran S.A.A | 155,144 | 18,195,403 | |||||||||||||
SanofiA B | 249,130 | 19,664,440 | |||||||||||||
Schneider Electric SEA | 270,226 | 24,409,470 | |||||||||||||
Societe Generale S.A.A | 241,590 | 13,233,096 | |||||||||||||
TOTAL S.A.A | 273,264 | 17,159,993 | |||||||||||||
Valeo S.A.A | 198,754 | 13,226,129 | |||||||||||||
Veolia Environnement S.A.A | 532,142 | 12,600,161 | |||||||||||||
Vinci S.A.A | 223,737 | 22,340,897 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 292,274,946 | ||||||||||||||
|
| ||||||||||||||
Total France (Cost $237,617,061) | 292,274,946 | ||||||||||||||
|
| ||||||||||||||
Germany - 9.77% | |||||||||||||||
Common Stocks - 8.09% | |||||||||||||||
BASF SEA | 272,785 | 28,340,022 | |||||||||||||
Bayer AGA | 132,041 | 15,806,573 | |||||||||||||
Deutsche Post AGA | 228,440 | 9,947,579 | |||||||||||||
Fresenius Medical Care AG & Co. KGaAA | 74,382 | 7,574,541 | |||||||||||||
Fresenius SE & Co. KGaAA | 134,009 | 10,231,013 | |||||||||||||
HeidelbergCement AGA | 152,099 | 14,913,764 | |||||||||||||
Infineon Technologies AGA | 423,175 | 10,838,138 | |||||||||||||
Innogy SEA C | 234,560 | 10,338,805 | |||||||||||||
LANXESS AGA | 212,851 | 15,762,214 | |||||||||||||
Linde AGA D | 167,915 | 37,312,810 | |||||||||||||
Merck KGaAA | 142,635 | 13,966,749 | |||||||||||||
SAP SEA | 418,255 | 46,618,021 | |||||||||||||
Siemens AGA | 133,125 | 16,934,805 | |||||||||||||
Telefonica Deutschland Holding AGA | 3,058,649 | 14,614,231 | |||||||||||||
thyssenkrupp AGA | 278,560 | 7,264,367 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 260,463,632 | ||||||||||||||
|
| ||||||||||||||
Preferred Stocks - 1.68% | |||||||||||||||
Volkswagen AGA E | 261,638 | 54,181,249 | |||||||||||||
|
| ||||||||||||||
Total Germany (Cost $254,814,504) | 314,644,881 | ||||||||||||||
|
| ||||||||||||||
Hong Kong - 0.97% | |||||||||||||||
Common Stocks - 0.97% | |||||||||||||||
AIA Group Ltd.A | 613,462 | 5,477,094 | |||||||||||||
CK Asset Holdings Ltd.A | 1,171,582 | 10,099,841 | |||||||||||||
CK Hutchison Holdings Ltd.A | 1,330,582 | 15,714,985 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 31,291,920 | ||||||||||||||
|
| ||||||||||||||
Total Hong Kong (Cost $25,980,957) | 31,291,920 | ||||||||||||||
|
| ||||||||||||||
Ireland - 1.49% | |||||||||||||||
Common Stocks - 1.49% | |||||||||||||||
Bank of Ireland Group PLCA | 1,832,639 | 16,431,065 | |||||||||||||
CRH PLCA | 343,611 | 12,183,512 | |||||||||||||
Ryanair Holdings PLC, Sponsored ADRD | 174,583 | 19,198,892 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 47,813,469 | ||||||||||||||
|
| ||||||||||||||
Total Ireland (Cost $38,233,810) | 47,813,469 | ||||||||||||||
|
|
See accompanying notes
8
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
Israel - 0.52% (Cost $26,337,710) | |||||||||||||||
Common Stocks - 0.52% | |||||||||||||||
Teva Pharmaceutical Industries Ltd., Sponsored ADR | 933,999 | $ | 16,793,302 | ||||||||||||
|
| ||||||||||||||
Italy - 1.51% | |||||||||||||||
Common Stocks - 1.51% | |||||||||||||||
Eni SpAA | 1,180,461 | 23,036,476 | |||||||||||||
UniCredit SpAA | 1,175,669 | 25,439,356 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 48,475,832 | ||||||||||||||
|
| ||||||||||||||
Total Italy (Cost $37,402,828) | 48,475,832 | ||||||||||||||
|
| ||||||||||||||
Japan - 15.25% | |||||||||||||||
Common Stocks - 15.25% | |||||||||||||||
Astellas Pharma, Inc.A | 1,070,800 | 15,692,673 | |||||||||||||
Daiwa House Industry Co., Ltd.A | 876,854 | 32,129,635 | |||||||||||||
Digital Garage, Inc.A B | 285,000 | 9,405,110 | |||||||||||||
Don Quijote Holdings Co., Ltd.A | 664,600 | 35,784,025 | |||||||||||||
East Japan Railway Co.A | 270,600 | 25,950,389 | |||||||||||||
Ezaki Glico Co., Ltd.A | 144,800 | 7,805,713 | |||||||||||||
IHI Corp.A | 212,400 | 6,966,552 | |||||||||||||
Inpex Corp.A | 502,400 | 6,434,558 | |||||||||||||
Isuzu Motors Ltd.A | 949,800 | 14,526,773 | |||||||||||||
Japan Airlines Co., Ltd.A | 696,200 | 27,429,423 | |||||||||||||
Kao Corp.A | 223,760 | 16,063,242 | |||||||||||||
KDDI Corp.A | 1,697,100 | 45,559,638 | |||||||||||||
Kirin Holdings Co., Ltd.A | 696,500 | 19,523,360 | |||||||||||||
Mitsui Fudosan Co., Ltd.A | 614,300 | 15,750,286 | |||||||||||||
Nexon Co., Ltd.A D | 969,100 | 14,094,231 | |||||||||||||
Omron Corp.A | 145,300 | 7,860,915 | |||||||||||||
Panasonic Corp.A | 631,200 | 9,354,035 | |||||||||||||
Ryohin Keikaku Co., Ltd.A | 31,800 | 10,868,808 | |||||||||||||
Seven & i Holdings Co., Ltd.A | 177,600 | 7,801,416 | |||||||||||||
SoftBank Group Corp.A | 281,800 | 21,846,689 | |||||||||||||
Sompo Holdings, Inc.A | 411,400 | 17,254,000 | |||||||||||||
Sony Corp.A | 229,700 | 11,312,182 | |||||||||||||
Sumitomo Metal Mining Co., Ltd.A | 191,200 | 8,147,522 | |||||||||||||
Sumitomo Mitsui Financial Group, Inc.A | 732,300 | 30,394,336 | |||||||||||||
Sumitomo Rubber Industries Ltd.A | 285,700 | 5,109,181 | |||||||||||||
Suntory Beverage & Food Ltd.A | 215,300 | 10,594,070 | |||||||||||||
Taiheiyo Cement Corp.A | 126,700 | 4,797,724 | |||||||||||||
Takeda Pharmaceutical Co., Ltd.A | 564,100 | 23,714,611 | |||||||||||||
United Arrows Ltd.A | 200,300 | 7,370,049 | |||||||||||||
Yamaha Corp.A | 438,400 | 21,199,920 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 490,741,066 | ||||||||||||||
|
| ||||||||||||||
Total Japan (Cost $403,369,898) | 490,741,066 | ||||||||||||||
|
| ||||||||||||||
Luxembourg - 1.20% | |||||||||||||||
Common Stocks - 1.20% | |||||||||||||||
SES S.A.A B | 1,044,083 | 16,099,865 | |||||||||||||
Tenaris S.A.A | 1,200,911 | 22,477,430 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 38,577,295 | ||||||||||||||
|
| ||||||||||||||
Total Luxembourg (Cost $38,426,928) | 38,577,295 | ||||||||||||||
|
| ||||||||||||||
Netherlands - 6.66% | |||||||||||||||
Common Stocks - 6.66% | |||||||||||||||
ABN AMRO Group N.V.A C | 259,133 | 8,035,566 | |||||||||||||
Aegon N.V.A | 2,080,660 | 15,205,010 |
See accompanying notes
9
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
Netherlands - 6.66% (continued) | |||||||||||||||
Common Stocks - 6.66% (continued) | |||||||||||||||
Akzo Nobel N.V.A | 403,366 | $ | 36,310,473 | ||||||||||||
ING Groep N.V.A | 1,154,376 | 19,366,820 | |||||||||||||
Royal Dutch Shell PLC, Class AA | 1,161,183 | 40,359,978 | |||||||||||||
Royal Dutch Shell PLC, Class BA | 1,530,092 | 54,657,730 | |||||||||||||
SBM Offshore N.V.A | 668,578 | 11,196,556 | |||||||||||||
Wolters Kluwer N.V.A | 542,393 | 29,263,997 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 214,396,130 | ||||||||||||||
|
| ||||||||||||||
Total Netherlands (Cost $166,489,480) | 214,396,130 | ||||||||||||||
|
| ||||||||||||||
Norway - 1.67% | |||||||||||||||
Common Stocks - 1.67% | |||||||||||||||
Statoil ASAA | 605,162 | 15,487,905 | |||||||||||||
Telenor ASAA | 1,195,067 | 26,430,805 | |||||||||||||
Yara International ASAA | 280,558 | 11,783,018 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 53,701,728 | ||||||||||||||
|
| ||||||||||||||
Total Norway (Cost $43,038,187) | 53,701,728 | ||||||||||||||
|
| ||||||||||||||
Portugal - 0.36% (Cost $9,288,394) | |||||||||||||||
Common Stocks - 0.36% | |||||||||||||||
Galp Energia SGPS S.A.A | 600,018 | 11,491,273 | |||||||||||||
|
| ||||||||||||||
Republic of Korea - 3.48% | |||||||||||||||
Common Stocks - 3.48% | |||||||||||||||
Hana Financial Group, Inc.A | 472,142 | 20,985,886 | |||||||||||||
KB Financial Group, Inc., ADR | 270,917 | 15,279,719 | |||||||||||||
Samsung Electronics Co., Ltd.A | 21,464 | 52,655,316 | |||||||||||||
SK Telecom Co., Ltd.A | 108,207 | 23,129,759 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 112,050,680 | ||||||||||||||
|
| ||||||||||||||
Total Republic of Korea (Cost $71,995,741) | 112,050,680 | ||||||||||||||
|
| ||||||||||||||
Singapore - 1.10% | |||||||||||||||
Common Stocks - 1.10% | |||||||||||||||
DBS Group Holdings Ltd.A | 977,210 | 22,574,685 | |||||||||||||
Singapore Telecommunications Ltd.A | 4,757,395 | 12,642,845 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 35,217,530 | ||||||||||||||
|
| ||||||||||||||
Total Singapore (Cost $25,250,773) | 35,217,530 | ||||||||||||||
|
| ||||||||||||||
Spain - 0.77% | |||||||||||||||
Common Stocks - 0.77% | |||||||||||||||
CaixaBank S.A.A | 1,448,171 | 7,039,191 | |||||||||||||
Red Electrica Corp. S.A.A | 858,151 | 17,861,972 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 24,901,163 | ||||||||||||||
|
| ||||||||||||||
Total Spain (Cost $22,036,368) | 24,901,163 | ||||||||||||||
|
| ||||||||||||||
Sweden - 1.44% | |||||||||||||||
Common Stocks - 1.44% | |||||||||||||||
Alfa Laval ABA | 219,767 | 5,452,860 | |||||||||||||
Assa Abloy AB, Class BA | 1,040,720 | 21,741,541 | |||||||||||||
Getinge AB, Class BA B | 483,082 | 4,498,216 | |||||||||||||
Nordea Bank ABA | 1,442,135 | 14,628,442 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 46,321,059 | ||||||||||||||
|
| ||||||||||||||
Total Sweden (Cost $48,608,434) | 46,321,059 | ||||||||||||||
|
|
See accompanying notes
10
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
Switzerland - 7.08% | |||||||||||||||
Common Stocks - 7.08% | |||||||||||||||
ABB Ltd.A | 1,212,072 | $ | 28,239,102 | ||||||||||||
Aryzta AGA B D | 332,801 | 7,007,244 | |||||||||||||
Cie Financiere Richemont S.A.A | 115,224 | 10,942,506 | |||||||||||||
Ferguson PLCA | 395,278 | 30,197,965 | |||||||||||||
Givaudan S.A.A | 4,535 | 10,109,785 | |||||||||||||
Julius Baer Group Ltd.A D | 224,513 | 13,328,562 | |||||||||||||
Novartis AGA | 918,192 | 70,623,810 | |||||||||||||
Roche Holding AGA | 157,787 | 35,006,902 | |||||||||||||
UBS Group AGA D | 720,258 | 12,101,372 | |||||||||||||
Zurich Insurance Group AGA D | 32,076 | 10,231,963 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 227,789,211 | ||||||||||||||
|
| ||||||||||||||
Total Switzerland (Cost $227,422,987) | 227,789,211 | ||||||||||||||
|
| ||||||||||||||
United Kingdom - 20.39% | |||||||||||||||
Common Stocks - 20.39% | |||||||||||||||
AstraZeneca PLCA | 368,598 | 25,842,407 | |||||||||||||
Aviva PLCA | 3,443,537 | 25,033,517 | |||||||||||||
BAE Systems PLCA | 1,906,726 | 16,000,874 | |||||||||||||
Balfour Beatty PLCA | 2,737,620 | 11,064,157 | |||||||||||||
Barclays PLCA | 16,074,008 | 45,872,137 | |||||||||||||
BP PLCA | 8,307,510 | 61,378,897 | |||||||||||||
British American Tobacco PLCA | 1,171,120 | 64,355,675 | |||||||||||||
BT Group PLCA | 2,132,476 | 7,301,210 | |||||||||||||
Cobham PLCA D | 8,239,963 | 12,997,242 | |||||||||||||
Compass Group PLCA | 1,005,705 | 21,571,624 | |||||||||||||
Diageo PLCA | 632,694 | 22,504,790 | |||||||||||||
GlaxoSmithKline PLCA | 1,796,008 | 36,040,233 | |||||||||||||
Howden Joinery Group PLCA | 1,786,761 | 11,718,658 | |||||||||||||
HSBC Holdings PLCA | 1,634,824 | 16,317,323 | |||||||||||||
Informa PLCA | 1,656,527 | 16,829,794 | |||||||||||||
Johnson Matthey PLCA | 180,356 | 8,159,650 | |||||||||||||
Kingfisher PLCA | 3,516,999 | 14,652,228 | |||||||||||||
Lloyds Banking Group PLCA | 15,341,238 | 13,635,185 | |||||||||||||
Melrose Industries PLCA | 2,656,060 | 8,320,222 | |||||||||||||
Micro Focus International PLCA | 504,946 | 8,745,173 | |||||||||||||
Prudential PLCA | 2,550,246 | 65,407,091 | |||||||||||||
Rolls-Royce Holdings PLC, C Shares EntitlementD | 152,979,937 | 210,607 | |||||||||||||
Rolls-Royce Holdings PLCA D | 2,228,468 | 25,641,091 | |||||||||||||
RSA Insurance Group PLCA | 890,575 | 8,049,415 | |||||||||||||
SSE PLCA | 1,133,236 | 21,506,461 | |||||||||||||
Standard Chartered PLCA | 1,953,448 | 20,576,701 | |||||||||||||
Travis Perkins PLCA | 612,136 | 10,650,940 | |||||||||||||
Unilever PLCA | 375,654 | 21,051,036 | |||||||||||||
Vodafone Group PLCA | 11,969,965 | 34,828,326 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 656,262,664 | ||||||||||||||
|
| ||||||||||||||
Total United Kingdom (Cost $634,321,622) | 656,262,664 | ||||||||||||||
|
| ||||||||||||||
United States - 2.80% | |||||||||||||||
Common Stocks - 2.80% | |||||||||||||||
Aon PLC | 170,599 | 24,305,240 | |||||||||||||
Carnival PLCA | 169,403 | 10,947,678 | |||||||||||||
QIAGEN N.V.A D | 274,583 | 9,024,921 | |||||||||||||
Shire PLCA | 860,348 | 45,721,373 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 89,999,212 | ||||||||||||||
|
| ||||||||||||||
Total United States (Cost $82,299,509) | 89,999,212 | ||||||||||||||
|
|
See accompanying notes
11
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
SHORT-TERM INVESTMENTS - 3.08% (Cost $98,921,991) | |||||||||||||||
Investment Companies - 3.08% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%F G | 98,921,991 | $ | 98,921,991 | ||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 2.39% (Cost $76,904,490) | |||||||||||||||
Investment Companies - 2.39% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%F G | 76,904,490 | 76,904,490 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 101.78% (Cost $2,888,233,967) | 3,275,319,097 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (1.78%) | (57,236,427 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 3,218,082,670 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $2,866,310,207 or 89.07% of net assets. Value was determined using significant unobservable inputs.
B All or a portion of this security is on loan at April 30, 2018.
C 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 $29,641,267 or 0.92% of net assets. The Fund has no right to demand registration of these securities.
D Non-income producing security.
E A type of Preferred Stock that has no maturity date.
F The Fund is affiliated by having the same investment advisor.
G 7-day yield.
ADR - American Depositary Receipt.
PLC - Public Limited Company.
Futures Contracts Open on April 30, 2018: | ||||||||||||||||
Long Futures | ||||||||||||||||
Equity Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
Amsterdam Index Futures | 28 | May 2018 | $ | 3,701,620 | $ | 3,741,213 | $ | 39,593 | ||||||||
CAC40 Index Futures | 173 | May 2018 | 11,121,476 | 11,439,582 | 318,106 | |||||||||||
DAX Index Futures | 26 | June 2018 | 9,697,576 | 9,903,791 | 206,215 | |||||||||||
FTSE 100 Index Futures | 176 | June 2018 | 17,242,240 | 18,084,051 | 841,811 | |||||||||||
FTSE/MIB Index Futures | 19 | June 2018 | 2,573,862 | 2,708,553 | 134,691 | |||||||||||
Hang Seng Index Futures | 19 | May 2018 | 3,681,795 | 3,711,879 | 30,084 | |||||||||||
IBEX 35 Index Futures | 27 | May 2018 | 3,187,925 | 3,253,461 | 65,536 | |||||||||||
OMXS30 Index Futures | 146 | May 2018 | 2,537,283 | 2,613,405 | 76,122 | |||||||||||
S&P/TSX 60 Index Futures | 63 | June 2018 | 8,971,930 | 9,041,492 | 69,562 | |||||||||||
SPI 200 Futures | 60 | June 2018 | 6,697,190 | 6,755,150 | 57,960 | |||||||||||
TOPIX Index Futures | 150 | June 2018 | 23,511,961 | 24,393,420 | 881,459 | |||||||||||
�� |
|
|
|
|
|
| ||||||||||
$ | 92,924,858 | $ | 95,645,997 | $ | 2,721,139 | |||||||||||
|
|
|
|
|
|
Forward Foreign Currency Contracts Open on April 30, 2018: | ||||||||||||||||||||||||||||||
Currency Purchased* | Currency Sold* | Settlement Date | Counterparty | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
AUD | 1,011,905 | USD | 1,014,706 | 6/8/2018 | BNP | $ | - | $ | (2,801 | ) | $ | (2,801 | ) | |||||||||||||||||
GBP | 1,586,759 | USD | 1,595,835 | 6/8/2018 | BOM | - | (9,076 | ) | (9,076 | ) | ||||||||||||||||||||
SEK | 2,646,606 | USD | 2,818,894 | 6/8/2018 | BOM | - | (172,288 | ) | (172,288 | ) | ||||||||||||||||||||
CAD | 9,930,558 | USD | 9,835,963 | 6/8/2018 | BOM | 94,595 | - | 94,595 | ||||||||||||||||||||||
GBP | 19,320,950 | USD | 19,505,955 | 6/8/2018 | BOM | - | (185,005 | ) | (185,005 | ) | ||||||||||||||||||||
USD | 2,649,727 | CAD | 2,600,946 | 6/8/2018 | BOM | 48,781 | - | 48,781 | ||||||||||||||||||||||
CHF | 678,678 | USD | 710,316 | 6/8/2018 | BRC | - | (31,638 | ) | (31,638 | ) | ||||||||||||||||||||
CHF | 1,113,347 | USD | 1,115,106 | 6/8/2018 | BRC | - | (1,759 | ) | (1,759 | ) |
See accompanying notes
12
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Currency Purchased* | Currency Sold* | Settlement Date | Counterparty | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
USD | 5,300,979 | GBP | 5,121,517 | 6/8/2018 | BRC | $ | 179,462 | $ | - | $ | 179,462 | |||||||||||||||||||
USD | 755,513 | AUD | 727,561 | 6/8/2018 | BRC | 27,952 | - | 27,952 | ||||||||||||||||||||||
JPY | 2,418,404 | USD | 2,496,944 | 6/8/2018 | CBK | - | (78,540 | ) | (78,540 | ) | ||||||||||||||||||||
USD | 2,904,218 | EUR | 2,816,339 | 6/8/2018 | CBK | 87,879 | - | 87,879 | ||||||||||||||||||||||
CAD | 835,808 | USD | 833,364 | 6/8/2018 | FBF | 2,444 | - | 2,444 | ||||||||||||||||||||||
USD | 7,442,927 | JPY | 7,302,989 | 6/8/2018 | FBF | 139,938 | - | 139,938 | ||||||||||||||||||||||
USD | 2,606,437 | JPY | 2,522,781 | 6/8/2018 | FBF | 83,656 | - | 83,656 | ||||||||||||||||||||||
SEK | 231,710 | USD | 246,546 | 6/8/2018 | GSC | - | (14,836 | ) | (14,836 | ) | ||||||||||||||||||||
EUR | 4,333,345 | USD | 4,342,300 | 6/8/2018 | GSC | - | (8,955 | ) | (8,955 | ) | ||||||||||||||||||||
USD | 2,239,040 | CHF | 2,170,476 | 6/8/2018 | GSC | 68,564 | - | 68,564 | ||||||||||||||||||||||
USD | 265,214 | SEK | 247,586 | 6/8/2018 | GSC | 17,628 | - | 17,628 | ||||||||||||||||||||||
HKD | 961,559 | USD | 965,488 | 6/8/2018 | JPM | - | (3,929 | ) | (3,929 | ) | ||||||||||||||||||||
GBP | 2,602,187 | USD | 2,631,161 | 6/8/2018 | JPM | - | (28,974 | ) | (28,974 | ) | ||||||||||||||||||||
AUD | 7,052,351 | USD | 7,265,853 | 6/8/2018 | JPM | - | (213,502 | ) | (213,502 | ) | ||||||||||||||||||||
USD | 1,602,351 | CHF | 1,514,416 | 6/8/2018 | JPM | 87,935 | - | 87,935 | ||||||||||||||||||||||
CAD | 1,336,810 | USD | 1,332,966 | 6/8/2018 | MYC | 3,844 | - | 3,844 | ||||||||||||||||||||||
EUR | 2,773,259 | USD | 2,838,465 | 6/8/2018 | RBC | - | (65,206 | ) | (65,206 | ) | ||||||||||||||||||||
USD | 804,484 | SEK | 777,119 | 6/8/2018 | RBC | 27,365 | - | 27,365 | ||||||||||||||||||||||
CHF | 8,984,228 | USD | 9,519,879 | 6/8/2018 | SCB | - | (535,651 | ) | (535,651 | ) | ||||||||||||||||||||
JPY | 28,094,277 | USD | 29,122,646 | 6/8/2018 | SOG | - | (1,028,369 | ) | (1,028,369 | ) | ||||||||||||||||||||
EUR | 31,755,348 | USD | 32,565,963 | 6/8/2018 | SOG | - | (810,615 | ) | (810,615 | ) | ||||||||||||||||||||
USD | 941,668 | CAD | 945,034 | 6/8/2018 | SOG | - | (3,366 | ) | (3,366 | ) | ||||||||||||||||||||
USD | 81,132 | JPY | 81,149 | 5/7/2018 | SSB | - | (17 | ) | (17 | ) | ||||||||||||||||||||
SEK | 365,840 | USD | 369,887 | 6/8/2018 | UAG | - | (4,047 | ) | (4,047 | ) | ||||||||||||||||||||
AUD | 590,240 | USD | 611,073 | 6/8/2018 | UAG | - | (20,833 | ) | (20,833 | ) | ||||||||||||||||||||
USD | 9,195,798 | EUR | 8,989,496 | 6/8/2018 | UAG | 206,302 | - | 206,302 | ||||||||||||||||||||||
JPY | 3,591,208 | USD | 3,588,187 | 6/8/2018 | WBC | 3,021 | - | 3,021 | ||||||||||||||||||||||
USD | 1,922,906 | AUD | 1,864,814 | 6/8/2018 | WBC | 58,092 | - | 58,092 | ||||||||||||||||||||||
USD | 1,840,473 | GBP | 1,820,855 | 6/8/2018 | WBC | 19,618 | - | 19,618 | ||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||
$ | 1,157,076 | $ | (3,219,407 | ) | $ | (2,062,331 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
* | All values denominated in USD. |
Glossary: | ||
Counterparty Abbreviations: | ||
BNP | BNP Paribas, N.A. | |
BOM | Bank of Montreal | |
BRC | Barclays Bank PLC | |
CBK | Citibank, N.A. | |
FBF | Credit Suisse International | |
GSC | Goldman Sachs Capital Markets | |
JPM | JPMorgan Chase Bank, N.A. | |
MYC | Morgan Stanley Bank, N.A. | |
RBC | Royal Bank of Canada | |
SCB | Standard and Chartered Bank | |
SOG | Societe Generale | |
SSB | State Street Bank & Trust Co. | |
UAG | UBS AG | |
WBC | Westpac Banking Corporation | |
Currency Abbreviations: | ||
AUD | Australian Dollar | |
CAD | Canadian Dollar | |
CHF | Swiss Franc | |
EUR | Euro | |
GBP | Pound Sterling | |
HKD | Hong Kong Dollar | |
JPY | Japanese Yen | |
SEK | Swedish Krona | |
USD | United States Dollar |
See accompanying notes
13
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Index Abbreviations: | ||
CAC40 | Euronet Paris - French Stock Market Index | |
DAX | Deutsche Boerse AG German Stock Index | |
FTSE 100 | Financial Times Stock Exchange 100 Index | |
FTSE/MIB | Borsa Italiana – Italian Stock Market Index | |
Hang Seng | Hong Kong Stock Market Index | |
IBEX | Bolsa de Madrid - Spanish Stock Market Index | |
OMXS30 | Stockholm Stock Exchange’s leading share index | |
S&P | Standard & Poor’s | |
SPI 200 | Australian Equity Market Index Future | |
TOPIX | Tokyo Stock Exchange Tokyo Price Index |
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2018, the investments were classified as described below:
International Equity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets |
| |||||||||||||||||||||||||||
Foreign Common Stocks |
| |||||||||||||||||||||||||||
Australia | $ | - | $ | 45,765,641 | $ | - | $ | 45,765,641 | ||||||||||||||||||||
Belgium | - | 28,881,054 | - | 28,881,054 | ||||||||||||||||||||||||
Canada | 157,394,649 | - | - | 157,394,649 | ||||||||||||||||||||||||
China | - | 37,100,911 | - | 37,100,911 | ||||||||||||||||||||||||
Denmark | - | 61,893,205 | - | 61,893,205 | ||||||||||||||||||||||||
Finland | - | 15,713,795 | - | 15,713,795 | ||||||||||||||||||||||||
France | - | 292,274,946 | - | 292,274,946 | ||||||||||||||||||||||||
Germany | - | 260,463,632 | - | 260,463,632 | ||||||||||||||||||||||||
Hong Kong | - | 31,291,920 | - | 31,291,920 | ||||||||||||||||||||||||
Ireland | 19,198,892 | 28,614,577 | - | 47,813,469 | ||||||||||||||||||||||||
Israel | 16,793,302 | - | - | 16,793,302 | ||||||||||||||||||||||||
Italy | - | 48,475,832 | - | 48,475,832 | ||||||||||||||||||||||||
Japan | - | 490,741,066 | - | 490,741,066 | ||||||||||||||||||||||||
Luxembourg | - | 38,577,295 | - | 38,577,295 | ||||||||||||||||||||||||
Netherlands | - | 214,396,130 | - | 214,396,130 | ||||||||||||||||||||||||
Norway | - | 53,701,728 | - | 53,701,728 | ||||||||||||||||||||||||
Portugal | - | 11,491,273 | - | 11,491,273 | ||||||||||||||||||||||||
Republic of Korea | 15,279,719 | 96,770,961 | - | 112,050,680 | ||||||||||||||||||||||||
Singapore | - | 35,217,530 | - | 35,217,530 | ||||||||||||||||||||||||
Spain | - | 24,901,163 | - | 24,901,163 | ||||||||||||||||||||||||
Sweden | - | 46,321,059 | - | 46,321,059 | ||||||||||||||||||||||||
Switzerland | - | 227,789,211 | - | 227,789,211 | ||||||||||||||||||||||||
United Kingdom | 210,607 | 656,052,057 | - | 656,262,664 | ||||||||||||||||||||||||
Foreign Preferred Stocks | ||||||||||||||||||||||||||||
Germany | - | 54,181,249 | - | 54,181,249 | ||||||||||||||||||||||||
Common Stocks | ||||||||||||||||||||||||||||
United States | 24,305,240 | 65,693,972 | - | 89,999,212 | ||||||||||||||||||||||||
Short-Term Investments | 98,921,991 | - | - | 98,921,991 | ||||||||||||||||||||||||
Securities Lending Collateral | 76,904,490 | - | - | 76,904,490 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 409,008,890 | $ | 2,866,310,207 | $ | - | $ | 3,275,319,097 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||||||
Futures Contracts | $ | 2,721,139 | $ | - | $ | - | $ | 2,721,139 | ||||||||||||||||||||
Forward Foreign Currency Contracts | - | 1,157,076 | - | 1,157,076 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 2,721,139 | $ | 1,157,076 | $ | - | $ | 3,878,215 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||||||
Forward Foreign Currency Contracts | $ | - | $ | (3,219,407 | ) | $ | - | $ | (3,219,407 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Liabilities | $ | - | $ | (3,219,407 | ) | $ | - | $ | (3,219,407 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
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 April 30, 2018, there were transfers from Level 1 to Level 2, with fair value of 2,674,005,606 as a result of a determination made by the Valuation Committee that adjustments should be applied to certain international securities due to significant movement in the market.
See accompanying notes
14
American Beacon International Equity FundSM
Statement of Assets and Liabilities
April 30, 2018 (Unaudited)
Assets: | ||||
Investments in unaffiliated securities, at fair value†§ | $ | 3,099,492,616 | ||
Investments in affiliated securities, at fair value‡ | 175,826,481 | |||
Foreign currency, at fair value^ | 442,551 | |||
Deposit with brokers for futures contracts | 9,299,430 | |||
Dividends and interest receivable | 13,248,176 | |||
Receivable for investments sold | 2,476,423 | |||
Receivable for fund shares sold | 4,730,412 | |||
Receivable for tax reclaims | 3,955,604 | |||
Receivable for expense reimbursement (Note 2) | 182 | |||
Receivable for variation margin on open futures contracts (Note 5) | 2,752,495 | |||
Unrealized appreciation from forward foreign currency contracts | 1,157,076 | |||
Prepaid expenses | 106,180 | |||
|
| |||
Total assets | 3,313,487,626 | |||
|
| |||
Liabilities: | ||||
Payable for investments purchased | 7,863,970 | |||
Payable for fund shares redeemed | 2,851,810 | |||
Foreign currency deposits with brokers for futures contracts, at fair value¤ | 563,677 | |||
Payable upon return of securities loaned (Note 9)§ | 76,904,490 | |||
Management and sub-advisory fees payable (Note 2) | 3,237,721 | |||
Service fees payable (Note 2) | 123,824 | |||
Transfer agent fees payable (Note 2) | 177,720 | |||
Custody and fund accounting fees payable | 299,687 | |||
Professional fees payable | 52,124 | |||
Trustee fees payable (Note 2) | 2,539 | |||
Payable for prospectus and shareholder reports | 56,226 | |||
Unrealized depreciation from forward foreign currency contracts | 3,219,407 | |||
Other liabilities | 51,761 | |||
|
| |||
Total liabilities | 95,404,956 | |||
|
| |||
Net assets | $ | 3,218,082,670 | ||
|
| |||
Analysis of net assets: | ||||
Paid-in-capital | $ | 2,703,709,133 | ||
Undistributed net investment income | 25,083,268 | |||
Accumulated net realized gain | 101,774,086 | |||
Unrealized appreciation of investments in unaffiliated securitiesA | 387,085,130 | |||
Unrealized (depreciation) of foreign currency transactions | (227,755 | ) | ||
Unrealized (depreciation) of forward foreign currency contracts | (2,062,331 | ) | ||
Unrealized appreciation of futures contracts | 2,721,139 | |||
|
| |||
Net assets | $ | 3,218,082,670 | ||
|
|
See accompanying notes
15
American Beacon International Equity FundSM
Statement of Assets and Liabilities
April 30, 2018 (Unaudited)
Shares outstanding at no par value (unlimited shares authorized): | ||||
Institutional Class | 84,273,895 | |||
|
| |||
Y Class | 48,775,912 | |||
|
| |||
Investor Class | 14,808,614 | |||
|
| |||
Advisor Class | 2,680,763 | |||
|
| |||
A Class | 834,632 | |||
|
| |||
C Class | 384,432 | |||
|
| |||
R6 Class | 852,071 | |||
|
| |||
Net assets: | ||||
Institutional Class | $ | 1,757,096,258 | ||
|
| |||
Y Class | $ | 1,055,549,611 | ||
|
| |||
Investor Class | $ | 306,076,124 | ||
|
| |||
Advisor Class | $ | 56,667,591 | ||
|
| |||
A Class | $ | 17,235,243 | ||
|
| |||
C Class | $ | 7,682,491 | ||
|
| |||
R6 Class | $ | 17,775,352 | ||
|
| |||
Net asset value, offering and redemption price per share: | ||||
Institutional Class | $ | 20.85 | ||
|
| |||
Y Class | $ | 21.64 | ||
|
| |||
Investor Class | $ | 20.67 | ||
|
| |||
Advisor Class | $ | 21.14 | ||
|
| |||
A Class | $ | 20.65 | ||
|
| |||
A Class (offering price) | $ | 21.91 | ||
|
| |||
C Class | $ | 19.98 | ||
|
| |||
R6 Class | $ | 20.86 | ||
|
| |||
† Cost of investments in unaffiliated securities | $ | 2,712,407,486 | ||
‡ Cost of investments in affiliated securities | $ | 175,826,481 | ||
§ Fair value of securities on loan | $ | 72,836,542 | ||
¤ Cost of foreign currency deposits with broker for futures contracts | $ | 606,748 | ||
^ Cost of foreign currency | $ | 452,795 | ||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
16
American Beacon International Equity FundSM
Statement of Operations
For the period ended April 30, 2018 (Unaudited)
Investment income: | ||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 40,919,924 | ||
Dividend income from affiliated securities (Note 8) | 685,679 | |||
Income derived from securities lending (Note 9) | 409,960 | |||
|
| |||
Total investment income | 42,015,563 | |||
|
| |||
Expenses: | ||||
Management and sub-advisory fees (Note 2) | 9,667,793 | |||
Transfer agent fees: | ||||
Institutional Class (Note 2) | 285,322 | |||
Y Class (Note 2) | 522,349 | |||
Investor Class | 7,413 | |||
Advisor Class | 1,292 | |||
A Class | 2,375 | |||
C Class | 948 | |||
R6 Class | 856 | |||
Custody and fund accounting fees | 407,817 | |||
Professional fees | 80,389 | |||
Registration fees and expenses | 81,237 | |||
Service fees (Note 2): | ||||
Investor Class | 562,800 | |||
Advisor Class | 69,678 | |||
A Class | 11,169 | |||
C Class | 2,899 | |||
Distribution fees (Note 2): | ||||
Advisor Class | 69,678 | |||
A Class | 22,090 | |||
C Class | 37,770 | |||
Prospectus and shareholder report expenses | 142,063 | |||
Trustee fees (Note 2) | 94,629 | |||
Other expenses | 203,380 | |||
|
| |||
Total expenses | 12,273,947 | |||
|
| |||
Net fees waived and expenses (reimbursed) (Note 2) | (2,346 | ) | ||
|
| |||
Net expenses | 12,271,601 | |||
|
| |||
Net investment income | 29,743,962 | |||
|
| |||
Realized and unrealized gain (loss) from investments: | ||||
Net realized gain from: | ||||
Investments in unaffiliated securitiesA | 116,287,335 | |||
Commission recapture (Note 1) | 18,178 | |||
Foreign currency transactions | 406,703 | |||
Forward foreign currency contracts | 158,459 | |||
Futures contracts | 482,810 | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investments in unaffiliated securitiesB | (54,760,562 | ) | ||
Foreign currency transactions | (92,369 | ) | ||
Forward foreign currency contracts | 884,515 | |||
Futures contracts | (1,813,091 | ) | ||
|
| |||
Net gain from investments | 61,571,978 | |||
|
| |||
Net increase in net assets resulting from operations | $ | 91,315,940 | ||
|
| |||
† Foreign taxes | $ | 4,262,058 | ||
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 period end. |
|
See accompanying notes
17
American Beacon International Equity FundSM
Statement of Changes in Net Assets
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||
(unaudited) | ||||||||||||
Increase (decrease) in net assets: | ||||||||||||
Operations: | ||||||||||||
Net investment income | $ | 29,743,962 | $ | 53,998,740 | ||||||||
Net realized gain from investments in unaffiliated securities, commission recapture, foreign currency transactions, forward foreign currency contracts, and futures contracts | 117,353,485 | 122,355,671 | ||||||||||
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions, forward foreign currency contracts, and futures contracts | (55,781,507 | ) | 393,563,481 | |||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 91,315,940 | 569,917,892 | ||||||||||
|
|
|
| |||||||||
Distributions to shareholders: | ||||||||||||
Net investment income: | ||||||||||||
Institutional Class | (27,503,626 | ) | (34,791,829 | ) | ||||||||
Y Class | (16,027,444 | ) | (18,973,818 | ) | ||||||||
Investor Class | (4,127,579 | ) | (7,051,311 | ) | ||||||||
Advisor Class | (722,996 | ) | (456,420 | ) | ||||||||
A Class | (216,006 | ) | (472,655 | ) | ||||||||
C Class | (46,381 | ) | (111,074 | ) | ||||||||
R6 Class | (187,943 | ) | - | |||||||||
Net realized gain from investments: | ||||||||||||
Institutional Class | (24,354,717 | ) | - | |||||||||
Y Class | (14,768,795 | ) | - | |||||||||
Investor Class | (4,628,528 | ) | - | |||||||||
Advisor Class | (793,726 | ) | - | |||||||||
A Class | (266,745 | ) | - | |||||||||
C Class | (109,427 | ) | - | |||||||||
R6 Class | (163,332 | ) | - | |||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (93,917,245 | ) | (61,857,107 | ) | ||||||||
|
|
|
| |||||||||
Capital share transactions (Note 11): | ||||||||||||
Proceeds from sales of shares | 399,028,256 | 775,385,640 | ||||||||||
Reinvestment of dividends and distributions | 86,428,547 | 57,320,154 | ||||||||||
Cost of shares redeemed | (342,693,037 | ) | (913,700,486 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 142,763,766 | (80,994,692 | ) | |||||||||
|
|
|
| |||||||||
Net increase in net assets | 140,162,461 | 427,066,093 | ||||||||||
|
|
|
| |||||||||
Net assets: | ||||||||||||
Beginning of period | 3,077,920,209 | 2,650,854,116 | ||||||||||
|
|
|
| |||||||||
End of period * | $ | 3,218,082,670 | $ | 3,077,920,209 | ||||||||
|
|
|
| |||||||||
*Includes undistributed net investment income | $ | 25,083,268 | $ | 44,171,281 | ||||||||
|
|
|
|
See accompanying notes
18
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”), is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940 (the “Act”), as amended, as a diversified, open-end management investment company. As of April 30, 2018, the Trust consists of thirty-three active series, one of which is presented in this filing: American Beacon International Equity 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 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 Class | Large institutional retirement plan investors – sold through retirement plan sponsors. | None |
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.
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 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”).
19
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Security Transactions and Investment Income
Security transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.
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. Realized gains (losses) from securities sold 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 Fund’s Statement 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 Fund may designate earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If a Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain in the Fund’s Statement of Operations, if applicable.
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.
20
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.
2. Transactions with Affiliates
Management 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 $15 billion | 0.35 | % | ||
Next $15 billion | 0.325 | % | ||
Over $30 billion | 0.30 | % |
The Trust, on behalf of the Fund, and the Manager have entered into Investment Advisory Agreements with Causeway Capital Management LLC; Lazard Asset Management LLC; and Templeton Investment Counsel, LLC (“Sub-Advisors”) 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.
The Management and Sub-Advisory Fees paid by the Fund for the period ended April 30, 2018 were as follows:
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 5,561,678 | ||||||||
Sub-Advisor Fees | 0.27 | % | 4,106,115 | |||||||||
|
|
|
| |||||||||
Total | 0.62 | % | $ | 9,667,793 | ||||||||
|
|
|
|
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the period ended April 30, 2018, the Manager received securities lending fees of $42,576 for the securities lending activities of the Fund.
Distribution Plans
The Fund, except for the Advisor, A, and C Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the management 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.
21
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.
Service Plans
The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor, Advisor, A, and C Classes of the Fund. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Fund.
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 and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. 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 period ended April 30, 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 | |||
International Equity | $ | 759,494 |
As of April 30, 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 | |||
International Equity | $ | 146,737 |
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 period ended April 30, 2018, the Manager earned fees on the Fund’s direct investments and securities lending collateral investments in the USG Select Fund as shown below:
Fund | Direct Investments in USG Select Fund | Securities Lending Collateral in USG Select Fund | Total | |||||||||
International Equity | $ | 54,862 | $ | 12,592 | $ | 67,454 |
22
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 Fund 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 period ended April 30, 2018, the Fund did not utilize the credit facility.
Expense Reimbursement Plan
The Manager voluntarily agreed to reduce fees and/or reimburse expenses for the R6 Class of the Fund to the extent that total operating expenses exceed the expense cap. During the period ended April 30, 2018, the Manager waived and/or reimbursed expenses as follows:
Fund | Class | Expense Cap | Reimbursed Expenses | (Recouped) Expenses | Expiration of Reimbursed Expenses | |||||||||||||||
11/1/2017 - 4/30/2018 | ||||||||||||||||||||
International Equity | R6 | 0.66 | % | $ | 2,346 | $ | - | 2021 |
Of these amounts, $182 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at April 30, 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 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 | ||||||||||||
International Equity | $ | - | $ | 3,001 | $ | - | 2020 |
The Distributor
Effective March 1, 2018, Resolute Investment Distributors, Inc. (“RID” or “Distributor”) replaced Foreside Fund Services, LLC (“Foreside”) as the Fund(s)’ distributor and principal underwriter of the Fund’s shares.
RID is a registered broker-dealer and is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Distributor is affiliated with the Manager through common ownership. Under a Distribution Agreement with the Trust, the Distributor acts as the distributor and principal underwriter of the Trust in connection with the continuous offering of shares of the Fund. The Distributor continually distributes shares of the Fund on a best efforts basis. The Distributor has no obligation to sell any specific quantity of the Fund’s shares. Pursuant to the Distribution Agreement, to the extent applicable, the Distributor receives, and may re-allow to
23
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
broker-dealers, all or a portion of the sales charge paid by the purchasers of A Class and C Class shares. For A Class and C Class shares, the Distributor receives commission revenue consisting of the portion of A Class and C Class sales charge remaining after the allowances by the Distributor to the broker-dealers. The Distributor retains any portion of the commission fees that are not paid to the broker-dealers for use solely to pay distribution related expenses.
Prior to March 1, 2018, Foreside served as the distributor and principal underwriter of the Fund’s shares. Pursuant to a Sub-Administration Agreement between Foreside and the Manager in effect through February 28, 2018, Foreside received a fee from the Manager for providing administrative services in connection with the marketing and distribution of shares of the Trust, including the registration of Manager employees as registered representatives of Foreside to facilitate distribution of Fund shares. Foreside also received a fee from the Manager under a Marketing Agreement pursuant to which Foreside provided services in connection with the marketing of a Fund to institutional investors. Pursuant to the Distribution Agreement with the Trust in effect through February 28, 2018, Foreside received, and may have re-allowed to broker-dealers, all or a portion of the sales charge paid by the purchasers of A and C Class shares. For A and C Class shares, Foreside received commission revenues consisting of the portion of A and C Class sales charge remaining after the allowances by Foreside to the broker dealers. Foreside retained any portion of the commission fees that were not paid to the broker-dealers for use solely to pay distribution related expenses.
Sales Commissions
The Fund’s Distributor, formerly Foreside, may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. During the period ended February 28, 2018, Foreside collected $3,091 for the Fund from the sale of Class A Shares. During the period March 1, 2018 through April 30, 2018, RID collected $115 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 period ended April 30, 2018, there were no CDSC fees collected for Class A Shares of the Fund.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the 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 period ended February 28, 2018, Foreside collected CDSC fees of $32 for Class C Shares of the Fund. During the period March 1, 2018 through April 30, 2018, RID collected $9 for Class C Shares of the Fund.
Trustee Fees and Expenses
As compensation for their service to the Trust, American Beacon Select Funds, the American Beacon Institutional Funds Trust, and American Beacon Sound Point Enhanced Income Fund, 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.
24
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
3. Security Valuation and Fair Value Measurements
The price of the Fund’s shares is based on the Fund’s Net Asset Value (“NAV”). The NAV of the Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to the Fund or class, by the total number of shares outstanding of the Fund or class.
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 to reflect fair value, the Manager reviews a variety of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund’s pricing time of 4:00 p.m. Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. These securities are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board, considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant American Depository Receipts (“ADR”) and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but a Fund is open. The Fund uses outside pricing services to provide closing prices and information to evaluate and/or adjust those prices. As a means of evaluating its security valuation process, the Valuation Committee routinely compares closing prices, the next day’s opening prices in the same markets, and adjusted prices.
Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, the Fund is 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 Fund. Gains or losses are recognized, but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.
Forward foreign currency contracts are valued using the prevailing forward exchange rate and are categorized as Level 2 in the fair value hierarchy. Forward foreign currency contracts involve, to varying degrees, risk of loss in excess of the unrealized appreciation (depreciation) on the Statement of Assets and Liabilities.
25
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Other investments for which the above valuation procedures are inappropriate or are deemed not to reflect fair value, are stated at fair value as determined in good faith by the Manager’s Valuation Committee, pursuant to procedures established by the Board.
Valuation Inputs
Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1 | - | Quoted prices in active markets for identical securities. | ||
Level 2 | - | Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. | ||
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.
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.
4. Securities and Other Investments
American Depositary Receipts
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
26
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
unavailable for transfer from a foreign currency), resulting in the Fund’s possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Fund may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or OTC. OTC stock may be less liquid than exchange-traded stock.
Foreign Securities
The Fund 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 (“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 Fund’s rights as an investor.
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 period ended April 30, 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 Fund, to purchase such unregistered securities if certain conditions are met.
27
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
Preferred Stock
A preferred stock blends the characteristics of a bond and common stock. It can offer the higher yield of a bond and has priority over common stock in equity ownership, but does not have the seniority of a bond and its participation in the issuer’s growth may be limited. Preferred stock generally has preference over common stock in the receipt of dividends and in any residual assets after payment to creditors should the issuer be dissolved. Although the dividend is set at a fixed or variable rate, in some circumstances it can be changed or omitted by the issuer.
Rights and Warrants
Rights are short-term warrants issued in conjunction with new stock or bond issues. Warrants are options to purchase an issuer’s securities at a stated price during a stated term. If the market price of the underlying common stock does not exceed the warrant’s exercise price during the life of the warrant, the warrant will expire worthless. Warrants usually have no voting rights, pay no dividends and have no rights with respect to the assets of the corporation issuing them. The percentage increase or decrease in the value of a warrant may be greater than the percentage increase or decrease in the value of the underlying common stock. Warrants may be purchased with values that vary depending on the change in value of one or more specified indices (“index warrants”). Index warrants are generally issued by banks or other financial institutions and give the holder the right, at any time during the term of the warrant, to receive upon exercise of the warrant a cash payment from the issuer based on the value of the underlying index at the time of the exercise. The market for warrants or rights may be very limited and it may be difficult to sell them promptly at an acceptable price. There is no specific limit on the percentage of assets the Fund may invest in rights and warrants.
5. Financial Derivative Instruments
The Fund may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.
Forward Foreign Currency Contracts
The Fund may enter into forward foreign currency contracts to hedge the exchange rate risk on investment transactions or to hedge the value of the Fund’s securities denominated in foreign currencies. Forward foreign currency contracts are valued at the forward exchange rate prevailing on the day of valuation. The Fund 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.
28
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
During the period ended April 30, 2018, the Fund entered into forward foreign currency contracts primarily for hedging foreign currency fluctuations.
The Fund’s 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 Amounts Outstanding | ||||||||||||
Fund | Purchased Contracts | Sold Contracts | ||||||||||
International Equity | $ | 146,824,706 | $ | 37,111,858 |
Futures Contracts
Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Fund may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities or that the counterparty will fail to perform its obligations.
Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.
During the period ended April 30, 2018, the Fund entered into future contracts primarily for exposing cash to markets.
The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.
Average Futures Contracts Outstanding | ||||
Fund | Period Ended April 30, 2018 | |||
International Equity | 1,046 |
The following is a summary of the fair valuations of the Fund’s derivative instruments categorized by risk exposure(1):
Fair values of financial instruments on the Statement of Assets and Liabilities as of April 30, 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 | $ | - | $ | 1,157,076 | $ | - | $ | - | $ | - | $ | 1,157,076 | |||||||||||||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | - | - | - | - | 2,721,139 | 2,721,139 |
29
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Liabilities: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized depreciation of forward foreign currency contracts | $ | - | $ | (3,219,407 | ) | $ | - | $ | - | $ | - | $ | (3,219,407 | ) | |||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statement of Operations as of April 30, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized gain (loss) from derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Forward foreign currency contracts | $ | - | $ | 158,459 | $ | - | $ | - | $ | - | $ | 158,459 | |||||||||||||||||||||||||||||||||||||||||||
Futures contracts | - | - | - | - | 482,810 | 482,810 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Forward foreign currency contracts | $ | - | $ | 884,515 | $ | - | $ | - | $ | - | $ | 884,515 | |||||||||||||||||||||||||||||||||||||||||||
Futures contracts | - | - | - | - | (1,813,091 | ) | (1,813,091 | ) |
(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 Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
Master Agreements
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 Fund may involve certain risks including, but not limited to, those described below.
Counterparty Risk
The Fund is subject to the risk that a party or participant to a transaction, such as a broker or derivative counterparty, will be unwilling or unable to satisfy its obligation to make timely principal, interest or settlement payments or to otherwise honor its obligations to the Fund.
Currency Risk
The Fund 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 Fund’s 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 Fund to additional risks that it would not be subject to if it invested directly in the securities or other instruments underlying those
30
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 Fund 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 Fund may obtain no recovery of its 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 Fund to greater losses in the event of a default by a counterparty.
Equity Investment Risk
Equity securities are subject to market risk. The Fund’s investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional 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 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 Fund may invest in securities issued by foreign companies through ADRs and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. The Fund may also invest in local currency investments. ADRs are subject to many of the risks inherent in currency fluctuations and political and financial instability in the home country of a particular ADR or foreign stock. Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity and greater volatility, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets.
The risk of investing in Europe may be heightened due to the 2016 referendum in which the United Kingdom voted to exit the European Union (EU). There is a significant degree of uncertainty about how negotiations relating to the United Kingdom’s withdrawal will be conducted, as well as the potential consequences and precise time frame for “Brexit.” It is expected that the United Kingdom’s exit from the EU will take place within two years of the United Kingdom notifying the European Council that it intends to withdraw from the EU. While it is not possible to determine the precise impact these events may have on a Fund, during this period and beyond, the impact on the United Kingdom and European economies and the broader global economy could be significant, resulting in negative impacts, such as increased volatility and illiquidity, and potentially lower economic growth, on markets in the United Kingdom, Europe and globally, which may adversely affect the value of a Fund’s investments. In addition, if one or more other countries were to exit the EU or abandon the use of the euro as a currency, the value of investments tied to those countries or the euro could decline significantly and unpredictably.
31
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 Fund 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 Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
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.
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.
32
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Multiple Sub-Advisor Risk
The Manager may allocate the Fund’s assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Fund’s assets. To a significant extent, the Fund’s performance will depend on the success of the Manager in allocating the Fund’s assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-adviser manages its allocated portion of the Fund independently from another sub-adviser, the same security may be held in different portions of the Fund, or may be acquired for one portion of the Fund at a time when a sub-adviser to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Fund’s holdings. Similarly, under some market conditions, one sub-adviser may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-adviser believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Fund. Because each sub-adviser directs the trading for its own portion of the Fund, and does not aggregate its transactions with those of the other sub-advisors, the Fund may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Fund’s assets among the Fund’s sub-advisors in a manner that it believes is consistent with achieving the Fund’s investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Fund’s assets among sub-advisors.
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.
Securities Lending Risk
To the extent the Fund lends its securities, it may be subject to the following risks; i) borrowers of the Fund’s securities typically provide collateral in the form of cash that is reinvested in securities, ii) the securities in which the collateral is invested may not perform sufficiently to cover the return collateral payments owed to borrowers, iii) delays may occur in the recovery of securities from borrowers, which could interfere with the Fund’s ability to vote proxies or to settle transactions, and iv) there is the risk of possible loss of rights in the collateral should the borrower fail financially.
Valuation Risk
The Fund may value certain assets at a price different from the price at which they can be sold. This risk may be especially pronounced for investments, such as certain derivatives, which may be illiquid or which may become illiquid.
Offsetting Assets and Liabilities
The Fund is a party to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Fund employs multiple money managers and counterparties and has elected not to offset qualifying financial and derivative instruments on the Statement of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2018.
33
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Offsetting of Financial and Derivative Assets as of April 30, 2018: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | 2,721,139 | $ | - | ||||||||
Forward Foreign Currency Contracts | 1,157,076 | 3,219,407 | ||||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 3,878,215 | $ | 3,219,407 | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (2,721,139 | ) | $ | - | |||||||
|
|
|
| |||||||||
Total derivative assets and liabilities subject to an MNA | $ | 1,157,076 | $ | 3,219,407 | ||||||||
|
|
|
|
Financial Assets, Derivatives, and Collateral Received/(Pledged) by Counterparty as of April 30, 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 | |||||||||||||||||||||||||||||||
Bank of Montreal | $ | 143,376 | $ | (143,376 | ) | $ | - | $ | - | $ | - | |||||||||||||||||||||||||
Barclays Bank PLC | 207,414 | (33,397 | ) | - | - | 174,017 | ||||||||||||||||||||||||||||||
Citibank, N.A. | 87,879 | (78,540 | ) | - | - | 9,339 | ||||||||||||||||||||||||||||||
Credit Suisse International | 226,038 | - | - | - | 226,038 | |||||||||||||||||||||||||||||||
Goldman Sachs Capital Markets | 86,192 | (23,791 | ) | - | - | 62,401 | ||||||||||||||||||||||||||||||
JPMorgan Chase Bank, N.A. | 87,935 | (87,935 | ) | - | - | - | ||||||||||||||||||||||||||||||
Morgan Stanley Bank, N.A. | 3,844 | - | - | - | 3,844 | |||||||||||||||||||||||||||||||
Royal Bank of Canada | 27,365 | (27,365 | ) | - | - | - | ||||||||||||||||||||||||||||||
UBS AG | 206,302 | (24,880 | ) | - | - | 181,422 | ||||||||||||||||||||||||||||||
Westpac Banking Corporation | 80,731 | - | - | - | 80,731 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total | $ | 1,157,076 | $ | (419,284 | ) | $ | - | $ | - | $ | 737,792 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||
BNP Paribas, N.A. | $ | 2,801 | $ | - | $ | - | $ | - | $ | 2,801 | ||||||||||||||||||||||||||
Bank of Montreal | 366,369 | (143,376 | ) | - | - | 222,993 | ||||||||||||||||||||||||||||||
Barclays Bank PLC | 33,397 | (33,397 | ) | - | - | - | ||||||||||||||||||||||||||||||
Citibank, N.A. | 78,540 | (78,540 | ) | - | - | - | ||||||||||||||||||||||||||||||
Goldman Sachs Capital Markets | 23,791 | (23,791 | ) | - | - | - | ||||||||||||||||||||||||||||||
JPMorgan Chase Bank, N.A. | 246,405 | (87,935 | ) | - | - | 158,470 | ||||||||||||||||||||||||||||||
Royal Bank of Canada | 65,206 | (27,365 | ) | - | - | 37,841 | ||||||||||||||||||||||||||||||
Societe Generale | 1,842,350 | - | - | - | 1,842,350 | |||||||||||||||||||||||||||||||
Standard and Chartered Bank | 535,651 | - | - | - | 535,651 | |||||||||||||||||||||||||||||||
State Street Bank & Trust Co. | 17 | - | - | - | 17 | |||||||||||||||||||||||||||||||
UBS AG | 24,880 | (24,880 | ) | - | - | - | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total | $ | 3,219,407 | $ | (419,284 | ) | $ | - | $ | - | $ | 2,800,123 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
34
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Remaining Contractual Maturity of the Agreements As of April 30, 2018 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 76,904,490 | $ | - | $ | - | $ | - | $ | 76,904,490 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total Borrowings | $ | 76,904,490 | $ | - | $ | - | $ | - | $ | 76,904,490 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions |
| $ | 76,904,490 | |||||||||||||||||||||||||||||||||
|
|
7. Federal Income and Excise Taxes
It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make 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 unrecognized tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2017 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.
As of April 30, 2018 the tax cost for the Fund and their respective gross unrealized appreciation (depreciation) were as follows:
Fund | Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||
International Equity | $ | 2,904,193,214 | $ | 469,839,133 | $ | (98,929,553 | ) | $ | 370,909,580 |
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.
As of October 31, 2017, the Fund 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 period ended April 30, 2018 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Sales (non-U.S. Government Securities) | ||||||
International Equity | $ | 519,008,579 | $ | 412,752,584 |
35
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2018 were as follows:
Fund | Type of Transaction | October 31, 2017 Shares/Fair Value | Purchases | Sales | April 30, 2018 Shares/Fair Value | Dividend Income | ||||||||||||||||||||||||||||||||||||
International Equity | Direct | $ | 129,125,237 | $ | 439,613,884 | $ | 469,817,130 | $ | 98,921,991 | $ | 685,679 | |||||||||||||||||||||||||||||||
International Equity | Securities Lending | 51,596,738 | 488,429,077 | 463,121,325 | 76,904,490 | N/A |
9. Securities Lending
The Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked-to-market daily. Daily mark-to-market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark-to-market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.
To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statement of Assets and Liabilities as a payable.
Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.
While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.
Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.
As of April 30, 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 | ||||||||||||||||||||||||
International Equity | $ | 72,836,542 | $ | 76,904,490 | $ | - | $ | 76,904,490 |
36
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Cash collateral is listed on the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statement of Operations.
Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statement of Assets and Liabilities.
10. 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 period ended April 30, 2018, the Fund did not utilize this facility.
11. Capital Share Transactions
The tables below summarize the activity in capital shares for each Class of the Fund:
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 12,683,482 | $ | 267,809,400 | 24,547,005 | $ | 463,671,500 | ||||||||||||||||||||||
Reinvestment of dividends | 2,331,173 | 48,325,212 | 1,852,549 | 31,919,427 | ||||||||||||||||||||||||
Shares redeemed | (9,475,343 | ) | (199,952,829 | ) | (30,936,620 | ) | (572,495,075 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 5,539,312 | $ | 116,181,783 | (4,537,066 | ) | $ | (76,904,148 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 3,994,944 | $ | 87,017,450 | 9,603,129 | $ | 188,451,831 | ||||||||||||||||||||||
Reinvestment of dividends | 1,249,691 | 26,893,341 | 972,177 | 17,372,801 | ||||||||||||||||||||||||
Shares redeemed | (4,040,062 | ) | (88,388,112 | ) | (8,510,279 | ) | (164,255,587 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 1,204,573 | $ | 25,522,679 | 2,065,027 | $ | 41,569,045 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
37
American Beacon International Equity FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 994,911 | $ | 20,714,159 | 3,314,057 | $ | 61,659,507 | ||||||||||||||||||||||
Reinvestment of dividends | 423,698 | 8,719,712 | 410,726 | 7,027,516 | ||||||||||||||||||||||||
Shares redeemed | (1,927,564 | ) | (40,253,443 | ) | (7,835,357 | ) | (145,535,610 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (508,955 | ) | $ | (10,819,572 | ) | (4,110,574 | ) | $ | (76,848,587 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 264,900 | $ | 5,643,538 | 1,750,129 | $ | 35,235,104 | ||||||||||||||||||||||
Reinvestment of dividends | 72,002 | 1,516,353 | 26,039 | 456,207 | ||||||||||||||||||||||||
Shares redeemed | (290,944 | ) | (6,219,605 | ) | (486,266 | ) | (9,383,666 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 45,958 | $ | 940,286 | 1,289,902 | $ | 26,307,645 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 223,254 | $ | 4,615,526 | 806,495 | $ | 14,930,964 | ||||||||||||||||||||||
Reinvestment of dividends | 22,967 | 472,205 | 25,526 | 435,992 | ||||||||||||||||||||||||
Shares redeemed | (275,920 | ) | (5,736,676 | ) | (1,051,715 | ) | (20,195,546 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (29,699 | ) | $ | (648,945 | ) | (219,694 | ) | $ | (4,828,590 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 58,467 | $ | 1,175,539 | 293,130 | $ | 5,116,728 | ||||||||||||||||||||||
Reinvestment of dividends | 7,541 | 150,449 | 6,515 | 108,211 | ||||||||||||||||||||||||
Shares redeemed | (63,971 | ) | (1,298,494 | ) | (93,337 | ) | (1,664,605 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 2,037 | $ | 27,494 | 206,308 | $ | 3,560,334 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
R6 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | February 28, 2017A to October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 570,575 | $ | 12,052,644 | 313,319 | $ | 6,320,006 | ||||||||||||||||||||||
Reinvestment of dividends | 16,937 | 351,275 | - | - | ||||||||||||||||||||||||
Shares redeemed | (40,213 | ) | (843,878 | ) | (8,547 | ) | (170,397 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | 547,299 | $ | 11,560,041 | 304,772 | $ | 6,149,609 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
A Commencement of operations.
12. 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.
38
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Institutional ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 20.88 | $ | 17.41 | $ | 18.79 | $ | 19.51 | $ | 20.07 | $ | 16.05 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.20 | 0.39 | 0.29 | 0.35 | 0.54 | 0.36 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.43 | 3.51 | (1.24 | ) | (0.55 | ) | (0.77 | ) | 4.07 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.63 | 3.90 | (0.95 | ) | (0.20 | ) | (0.23 | ) | 4.43 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.35 | ) | (0.43 | ) | (0.27 | ) | (0.52 | ) | (0.33 | ) | (0.41 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.31 | ) | - | (0.16 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.66 | ) | (0.43 | ) | (0.43 | ) | (0.52 | ) | (0.33 | ) | (0.41 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 20.85 | $ | 20.88 | $ | 17.41 | $ | 18.79 | $ | 19.51 | $ | 20.07 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 3.02 | %D | 22.94 | % | (5.07 | )% | (0.99 | )% | (1.18 | )% | 28.14 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 1,757,096,258 | $ | 1,644,165,106 | $ | 1,450,052,040 | $ | 1,037,148,821 | $ | 956,960,452 | $ | 870,729,423 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.71 | %E | 0.73 | % | 0.69 | % | 0.70 | % | 0.72 | % | 0.72 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.71 | %E | 0.73 | % | 0.69 | % | 0.69 | % | 0.70 | % | 0.71 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.97 | %E | 2.01 | % | 2.22 | % | 1.93 | % | 2.74 | % | 2.16 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.97 | %E | 2.01 | % | 2.22 | % | 1.94 | % | 2.76 | % | 2.17 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %D | 32 | % | 25 | % | 33 | % | 23 | % | 27 | % |
A | On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class. |
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. |
See accompanying notes
39
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 21.64 | $ | 18.03 | $ | 19.46 | $ | 20.21 | $ | 20.81 | $ | 16.65 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.20 | 0.38 | 0.41 | 0.35 | 0.50 | 0.62 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.44 | 3.65 | (1.40 | ) | (0.57 | ) | (0.77 | ) | 3.97 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.64 | 4.03 | (0.99 | ) | (0.22 | ) | (0.27 | ) | 4.59 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.33 | ) | (0.42 | ) | (0.28 | ) | (0.53 | ) | (0.33 | ) | (0.43 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.31 | ) | - | (0.16 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.64 | ) | (0.42 | ) | (0.44 | ) | (0.53 | ) | (0.33 | ) | (0.43 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | A | 0.00 | A | 0.00 | A | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 21.64 | $ | 21.64 | $ | 18.03 | $ | 19.46 | $ | 20.21 | $ | 20.81 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 2.99 | %C | 22.84 | % | (5.14 | )% | (1.06 | )% | (1.31 | )% | 28.04 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 1,055,549,611 | $ | 1,029,629,647 | $ | 820,596,038 | $ | 587,949,806 | $ | 530,836,707 | $ | 441,945,876 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.78 | %D | 0.80 | % | 0.77 | % | 0.77 | % | 0.82 | % | 0.85 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.78 | %D | 0.80 | % | 0.77 | % | 0.77 | % | 0.82 | % | 0.85 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.87 | %D | 1.95 | % | 2.43 | % | 1.87 | % | 2.62 | % | 2.55 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.87 | %D | 1.95 | % | 2.43 | % | 1.87 | % | 2.62 | % | 2.55 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %C | 32 | % | 25 | % | 33 | % | 23 | % | 27 | % |
A | Amount represents less than $0.01 per share. |
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. |
See accompanying notes
40
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 20.67 | $ | 17.24 | $ | 18.60 | $ | 19.32 | $ | 19.86 | $ | 15.88 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.17 | 0.35 | 0.34 | 0.31 | 0.46 | 0.25 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.42 | 3.45 | (1.33 | ) | (0.57 | ) | (0.76 | ) | 4.09 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.59 | 3.80 | (0.99 | ) | (0.26 | ) | (0.30 | ) | 4.34 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.28 | ) | (0.37 | ) | (0.21 | ) | (0.46 | ) | (0.24 | ) | (0.36 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.31 | ) | - | (0.16 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.59 | ) | (0.37 | ) | (0.37 | ) | (0.46 | ) | (0.24 | ) | (0.36 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | A | 0.00 | A | 0.00 | A | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 20.67 | $ | 20.67 | $ | 17.24 | $ | 18.60 | $ | 19.32 | $ | 19.86 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 2.84 | %C | 22.50 | % | (5.38 | )% | (1.35 | )% | (1.54 | )% | 27.81 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 306,076,124 | $ | 316,589,769 | $ | 334,895,337 | $ | 342,720,411 | $ | 348,541,811 | $ | 337,424,064 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.04 | %D | 1.07 | % | 1.06 | % | 1.03 | % | 1.05 | % | 1.04 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.04 | %D | 1.07 | % | 1.06 | % | 1.03 | % | 1.05 | % | 1.04 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.59 | %D | 1.69 | % | 1.95 | % | 1.60 | % | 2.36 | % | 1.67 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.59 | %D | 1.69 | % | 1.95 | % | 1.60 | % | 2.36 | % | 1.67 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %C | 32 | % | 25 | % | 33 | % | 23 | % | 27 | % |
A | Amount represents less than $0.01 per share. |
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. |
See accompanying notes
41
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 21.15 | $ | 17.62 | $ | 19.01 | $ | 19.76 | $ | 20.36 | $ | 16.36 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.16 | 0.23 | 0.35 | 0.38 | 0.44 | (0.41 | ) | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.42 | 3.64 | (1.37 | ) | (0.68 | ) | (0.77 | ) | 4.83 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.58 | 3.87 | (1.02 | ) | (0.30 | ) | (0.33 | ) | 4.42 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.28 | ) | (0.34 | ) | (0.21 | ) | (0.45 | ) | (0.27 | ) | (0.42 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.31 | ) | - | (0.16 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.59 | ) | (0.34 | ) | (0.37 | ) | (0.45 | ) | (0.27 | ) | (0.42 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 21.14 | $ | 21.15 | $ | 17.62 | $ | 19.01 | $ | 19.76 | $ | 20.36 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 2.75 | %D | 22.38 | % | (5.40 | )% | (1.51 | )% | (1.64 | )% | 27.51 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 56,667,591 | $ | 55,715,606 | $ | 23,692,313 | $ | 22,912,069 | $ | 7,677,201 | $ | 5,231,812 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.19 | %E | 1.20 | % | 1.19 | % | 1.16 | % | 1.19 | % | 1.20 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.19 | %E | 1.20 | % | 1.19 | % | 1.16 | % | 1.19 | % | 1.20 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.47 | %E | 1.51 | % | 1.87 | % | 1.55 | % | 2.21 | % | 1.39 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.47 | %E | 1.51 | % | 1.87 | % | 1.55 | % | 2.21 | % | 1.39 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %D | 32 | % | 25 | % | 33 | % | 23 | % | 27 | % |
A | On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class. |
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. |
See accompanying notes
42
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 20.63 | $ | 17.23 | $ | 18.59 | $ | 19.32 | $ | 19.92 | $ | 16.02 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.16 | 0.30 | 0.32 | 0.31 | 0.46 | 0.43 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.42 | 3.48 | (1.30 | ) | (0.59 | ) | (0.78 | ) | 3.89 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.58 | 3.78 | (0.98 | ) | (0.28 | ) | (0.32 | ) | 4.32 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.25 | ) | (0.38 | ) | (0.22 | ) | (0.45 | ) | (0.28 | ) | (0.42 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.31 | ) | - | (0.16 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.56 | ) | (0.38 | ) | (0.38 | ) | (0.45 | ) | (0.28 | ) | (0.42 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | A | 0.00 | A | 0.00 | A | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 20.65 | $ | 20.63 | $ | 17.23 | $ | 18.59 | $ | 19.32 | $ | 19.92 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 2.82 | %C | 22.43 | % | (5.34 | )% | (1.42 | )% | (1.65 | )% | 27.51 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 17,235,243 | $ | 17,829,657 | $ | 18,673,142 | $ | 10,747,749 | $ | 8,540,234 | $ | 4,113,299 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.07 | %D | 1.12 | % | 1.07 | % | 1.08 | % | 1.15 | % | 1.21 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.07 | %D | 1.12 | % | 1.07 | % | 1.08 | % | 1.15 | % | 1.25 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 1.57 | %D | 1.65 | % | 1.94 | % | 1.55 | % | 2.31 | % | 1.73 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 1.57 | %D | 1.65 | % | 1.94 | % | 1.55 | % | 2.31 | % | 1.69 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %C | 32 | % | 25 | % | 33 | % | 23 | % | 27 | % |
A | Amount represents less than $0.01 per share. |
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. |
See accompanying notes
43
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
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(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 19.93 | $ | 16.73 | $ | 18.09 | $ | 18.83 | $ | 19.47 | $ | 15.70 | ||||||||||||||||||||||||||||||||
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Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.10 | 0.17 | 0.18 | 0.16 | 0.30 | 0.52 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.39 | 3.36 | (1.28 | ) | (0.56 | ) | (0.75 | ) | 3.59 | |||||||||||||||||||||||||||||||||||
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Total income (loss) from investment operations | 0.49 | 3.53 | (1.10 | ) | (0.40 | ) | (0.45 | ) | 4.11 | |||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.13 | ) | (0.33 | ) | (0.10 | ) | (0.34 | ) | (0.19 | ) | (0.34 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.31 | ) | - | (0.16 | ) | - | - | - | ||||||||||||||||||||||||||||||||||||
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Total distributions | (0.44 | ) | (0.33 | ) | (0.26 | ) | (0.34 | ) | (0.19 | ) | (0.34 | ) | ||||||||||||||||||||||||||||||||
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Redemption fees added to beneficial interests | - | - | - | 0.00 | A | 0.00 | A | 0.00 | A | |||||||||||||||||||||||||||||||||||
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Net asset value, end of period | $ | 19.98 | $ | 19.93 | $ | 16.73 | $ | 18.09 | $ | 18.83 | $ | 19.47 | ||||||||||||||||||||||||||||||||
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Total returnB | 2.46 | %C | 21.50 | % | (6.12 | )% | (2.12 | )% | (2.36 | )% | 26.56 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 7,682,491 | $ | 7,622,425 | $ | 2,945,246 | $ | 3,899,081 | $ | 3,028,934 | $ | 1,219,537 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.79 | %D | 1.88 | % | 1.85 | % | 1.82 | % | 1.90 | % | 1.95 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.79 | %D | 1.88 | % | 1.85 | % | 1.83 | % | 1.90 | % | 1.99 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 0.86 | %D | 0.96 | % | 1.12 | % | 0.77 | % | 1.53 | % | 1.13 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 0.86 | %D | 0.96 | % | 1.12 | % | 0.77 | % | 1.53 | % | 1.09 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 14 | %C | 32 | % | 25 | % | 33 | % | 23 | % | 27 | % |
A | Amount represents less than $0.01 per share. |
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. |
See accompanying notes
44
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||||||||||
Six Months Ended April 30, | February 28, 2017A to October 31, | |||||||||||
2018 | 2017 | |||||||||||
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(unaudited) | ||||||||||||
Net asset value, beginning of period | $ | 20.89 | $ | 17.80 | ||||||||
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Income from investment operations: | ||||||||||||
Net investment income | 0.25 | 0.08 | ||||||||||
Net gains on investments (both realized and unrealized) | 0.39 | 3.01 | ||||||||||
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Total income from investment operations | 0.64 | 3.09 | ||||||||||
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Less distributions: | ||||||||||||
Dividends from net investment income | (0.36 | ) | - | |||||||||
Distributions from net realized gains | (0.31 | ) | - | |||||||||
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Total distributions | (0.67 | ) | - | |||||||||
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Net asset value, end of period | $ | 20.86 | $ | 20.89 | ||||||||
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Total returnB | 3.05 | %C | 17.36 | %C | ||||||||
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Ratios and supplemental data: |
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Net assets, end of period | $ | 17,775,352 | $ | 6,367,999 | ||||||||
Ratios to average net assets: | ||||||||||||
Expenses, before reimbursements | 0.70 | %D | 0.89 | %D | ||||||||
Expenses, net of reimbursements | 0.66 | %D | 0.66 | %D | ||||||||
Net investment income, before expense reimbursements | 2.32 | %D | 1.63 | %D | ||||||||
Net investment income, net of reimbursements | 2.36 | %D | 1.85 | %D | ||||||||
Portfolio turnover rate | 14 | %C | 32 | %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 February 28, 2017 through October 31, 2017 and is not annualized. |
See accompanying notes
45
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 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 Kansas City, Missouri | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas | 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 International Equity Fund are service marks of American Beacon Advisors, Inc.
SAR 04/18
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.
SMALL CAP VALUE FUND RISKS
Investing in small-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund 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 the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.
American Beacon Funds | April 30, 2018 |
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45 |
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Back Cover |
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![]() | Dear Shareholders,
Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term investment goals: Institutional wisdom + earned alpha = enduring value.
u We believe institutional wisdom comes from having more than 30 years of experience as manager of one of the country’s largest pension plans. As a fiduciary, we have built an investment due-diligence and oversight infrastructure, which we leverage across all our investment products. When selecting our investment managers, we focus on their people, processes and performance. We perform due-diligence reviews with each investment manager on a quarterly basis.
u We believe earned alpha – that is, the returns of an actively managed fund beyond a benchmark – comes from employing and engaging |
investment managers we believe are best-in-class and who have defined, repeatable and proven processes. Our experience has shown us that, while it’s important to be mindful of short-term considerations, having a long-term focus helps manage expectations, mitigate risks and realize goals. Thus, we seek relationships with leading investment managers who display a willingness to undertake time-intensive research strategies. The resulting investment portfolios are differentiated from their peers and allow incremental changes to help address periods of market volatility and economic uncertainty. |
u | We believe enduring value comes from “putting a portfolio in place and sticking with the plan.” Our mutual funds provide you with access to institutional-quality, research-intensive investment managers with diverse processes and styles. In the long run, having such access and spending time in the market – rather than trying to time the market – may better position you to reach your long-term investment goals. |
The markets and U.S. economy were robust during calendar year 2017. However, during periods of market volatility and economic uncertainty – such as what we’ve seen thus far in 2018 – investing for the long term requires conviction. It isn’t about identifying and anticipating the next big market move. It’s about identifying the right investment products for riding out those moves. It’s about developing an approach based on long-term participation, while seeking some measure of protection against ongoing volatility.
As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings. Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for high quality and lower risk.
At American Beacon, our approach is more than a concept. It’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment products for your portfolio.
Thank you for your continued interest in American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon Small Cap Value FundSM
April 30, 2018 (Unaudited)
The Investor Class of the American Beacon Small Cap Value Fund (the “Fund”) returned 0.46% for the six months ended April 30, 2018, underperforming the Russell 2000® Value Index (the “Index”) return of 0.94% for the same period.
Total Returns for the Period ended April 30, 2018 | |||||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||
Institutional Class (1,8) | AVFIX | 0.64 | % | 6.26 | % | 8.50 | % | 11.19 | % | 9.46 | % | ||||||||||||||||||||||
Y Class (1,2,8) | ABSYX | 0.62 | % | 6.19 | % | 8.42 | % | 11.09 | % | 9.35 | % | ||||||||||||||||||||||
Investor Class (1,8) | AVPAX | 0.46 | % | 5.93 | % | 8.16 | % | 10.82 | % | 9.09 | % | ||||||||||||||||||||||
Advisor Class (1,3,8) | AASSX | 0.38 | % | 5.73 | % | 7.98 | % | 10.64 | % | 8.92 | % | ||||||||||||||||||||||
A without Sales Charge (1,4,8) | ABSAX | 0.43 | % | 5.84 | % | 8.08 | % | 10.72 | % | 8.98 | % | ||||||||||||||||||||||
A with Sales Charge (1,4,8) | ABSAX | (5.35 | )% | (0.24 | )% | 5.97 | % | 9.42 | % | 8.34 | % | ||||||||||||||||||||||
C without Sales Charge (1,5,8) | ASVCX | 0.22 | % | 5.21 | % | 7.32 | % | 9.92 | % | 8.36 | % | ||||||||||||||||||||||
C with Sales Charge (1,5,8) | ASVCX | (0.78 | )% | 4.21 | % | 7.32 | % | 9.92 | % | 8.36 | % | ||||||||||||||||||||||
R6 Class (1,6,8) | AASRX | 0.63 | % | 6.25 | % | 8.50 | % | 11.19 | % | 9.46 | % | ||||||||||||||||||||||
Russell 2000® Value Index (7) | 0.94 | % | 6.53 | % | 9.27 | % | 10.36 | % | 8.46 | % |
* | Not Annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. 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. |
2. | Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 4/30/08 up to 8/3/09, the inception date of the Y Class. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/08. |
3. | A portion of the fees charged to the Advisor Class of the Fund was waived in 2009. Performance prior to waiving fees was lower than the actual returns shown for the ten-year period. |
4. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/08. A portion of the fees charged to the A Class of the Fund was waived in 2010, 2012, 2013, and 2014 and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown in 2010, 2012, 2013, and 2014. The maximum sales charge for A Class is 5.75%. |
5. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/08. A portion of the fees charged to the C Class of the Fund was waived in 2010, 2012, and 2013 and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown in 2010, 2012 and 2013. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase. |
6. | Fund performance for the three-year, five-year and ten-year periods represent the returns achieved by the Institutional Class from 4/30/08 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/08. A portion of the fees charged to the R6 Class of the Fund has been waived since 2/28/17. Performance prior to waiving fees was lower than the actual returns shown. |
7. | The Russell 2000 Value Index is an unmanaged index of those stocks in the Russell 2000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 2000 Value Index and Russell 2000 Index are registered trademarks of Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. One cannot directly invest in an index. |
2
American Beacon Small Cap Value FundSM
Performance Overview
April 30, 2018 (Unaudited)
8. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and R6 Class shares were 0.83%, 0.91%, 1.13%, 1.31%, 1.21%, 1.97% and 0.81%, 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. |
Prior to the deduction of expenses, the Fund outperformed the Index due to sector allocation. Stock selection detracted value relative to the Index.
From a sector allocation perspective, the Fund’s underweight positions in both Real Estate and Utilities, which struggled during this period, contributed positively to performance. Performance also benefited by an overweight position in Consumer Discretionary, one of the better performing sectors. A partial offset to this performance was an overweight position to Information Technology, which as a sector, only outpaced Telecom and Real Estate to become the third worst performing sector.
From a stock selection standpoint, the Fund’s investments in the Consumer Discretionary, Industrials and Materials sectors detracted relative value. The Fund’s position in American Eagle Outfitters – up 17.6% vs. 61.0% for the Index and investment in Tenneco, Inc. – down 22.5%, negatively impacted performance in the Consumer Discretionary sector. Investments in the Industrials sector that detracted from performance included Terex Corp. – down 22.2% and Tutor Perini Corp. – down 29.2%. Ferroglobe PLC – down 29.3% and Owens Illinois, Inc. – down 15.1% were the largest detractors in the Materials sector. The aforementioned performance was somewhat offset by good stock selection in the Financials sector. TCF Financial Corp. – up 38.0%, Texas Capital Bancshares, Inc. – up 15.0% and Popular, Inc. – up 28.2% were the largest contributors in the Financials sector.
The sub-advisors continue to focus on uncovering investment opportunities through stock selection that should benefit the Fund’s performance over the longer-term.
Top Ten Holdings (% Net Assets) | ||||||||
Texas Capital Bancshares, Inc. | 0.9 | |||||||
Callon Petroleum Co. | 0.8 | |||||||
Vishay Intertechnology, Inc. | 0.8 | |||||||
Associated Banc-Corp | 0.8 | |||||||
Whiting Petroleum Corp. | 0.8 | |||||||
UMB Financial Corp. | 0.7 | |||||||
II-VI, Inc. | 0.7 | |||||||
ARRIS International PLC | 0.7 | |||||||
Portland General Electric Co. | 0.7 | |||||||
Enstar Group Ltd. | 0.7 | |||||||
Total Fund Holdings | 756 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 26.7 | |||||||
Industrials | 19.6 | |||||||
Consumer Discretionary | 14.5 | |||||||
Information Technology | 12.6 | |||||||
Energy | 7.4 | |||||||
Materials | 5.8 | |||||||
Health Care | 4.1 | |||||||
Real Estate | 3.8 | |||||||
Consumer Staples | 2.7 | |||||||
Utilities | 2.4 | |||||||
Exchange-Traded Instruments | 0.2 | |||||||
Telecommunication Services | 0.2 |
3
American Beacon Small Cap Value FundSM
April 30, 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 November 1, 2017 through April 30, 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.
4
American Beacon Small Cap Value FundSM
Expense Examples
April 30, 2018 (Unaudited)
American Beacon Small Cap Value Fund | |||||||||||||||
Beginning Account Value 11/1/2017 | Ending Account Value 4/30/2018 | Expenses Paid During Period 11/1/2017-4/30/2018* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,006.40 | $3.98 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.80 | $4.01 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,006.20 | $4.33 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.50 | $4.36 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,004.60 | $5.52 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.30 | $5.56 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,003.80 | $6.41 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.40 | $6.46 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,004.30 | $5.81 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.00 | $5.86 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,001.80 | $8.19 | ||||||||||||
Hypothetical** | $1,000.00 | $1,016.60 | $8.25 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,006.30 | $3.88 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.90 | $3.91 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.80%, 0.87%, 1.11%, 1.29%, 1.17%, 1.65% and 0.78% for the Institutional, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon Small Cap Value FundSM
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% | |||||||||||||||
Consumer Discretionary - 13.90% | |||||||||||||||
Auto Components - 1.66% | |||||||||||||||
American Axle & Manufacturing Holdings, Inc.A | 2,692,611 | $ | 41,304,653 | ||||||||||||
Cooper Tire & Rubber Co. | 289,197 | 7,070,867 | |||||||||||||
Cooper-Standard Holdings, Inc.A | 57,998 | 7,180,152 | |||||||||||||
Dana, Inc. | 607,756 | 14,422,050 | |||||||||||||
Gentherm, Inc.A | 352,628 | 11,918,826 | |||||||||||||
Modine Manufacturing Co.A | 246,154 | 4,233,849 | |||||||||||||
Motorcar Parts of America, Inc.A | 50,165 | 955,142 | |||||||||||||
Standard Motor Products, Inc. | 118,177 | 5,359,327 | |||||||||||||
Stoneridge, Inc.A | 15,900 | 418,647 | |||||||||||||
Superior Industries International, Inc. | 250,917 | 3,299,559 | |||||||||||||
Tenneco, Inc. | 395,866 | 17,691,251 | |||||||||||||
Tower International, Inc. | 39,882 | 1,176,519 | |||||||||||||
|
| ||||||||||||||
115,030,842 | |||||||||||||||
|
| ||||||||||||||
Automobiles - 0.17% | |||||||||||||||
Winnebago Industries, Inc. | 306,100 | 11,601,190 | |||||||||||||
|
| ||||||||||||||
Diversified Consumer Services - 1.01% | |||||||||||||||
Adtalem Global Education, Inc.A | 435,837 | 20,745,841 | |||||||||||||
American Public Education, Inc.A | 99,110 | 3,994,133 | |||||||||||||
Bridgepoint Education, Inc.A | 322,854 | 1,885,467 | |||||||||||||
Capella Education Co. | 17,814 | 1,634,434 | |||||||||||||
Graham Holdings Co., Class B | 13,052 | 7,871,009 | |||||||||||||
H&R Block, Inc. | 576,885 | 15,950,870 | |||||||||||||
Sotheby’sA | 95,977 | 5,067,586 | |||||||||||||
Strayer Education, Inc. | 68,086 | 7,153,796 | |||||||||||||
Weight Watchers International, Inc.A | 87,519 | 6,130,706 | |||||||||||||
|
| ||||||||||||||
70,433,842 | |||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 0.93% | |||||||||||||||
Belmond Ltd., Class AA | 905,750 | 9,691,525 | |||||||||||||
Bloomin’ Brands, Inc. | 402,422 | 9,521,305 | |||||||||||||
Bojangles’, Inc.A | 112,800 | 1,663,800 | |||||||||||||
Brinker International, Inc.B | 97,100 | 4,232,589 | |||||||||||||
Carrols Restaurant Group, Inc.A | 82,654 | 851,336 | |||||||||||||
Cheesecake Factory, Inc.B | 382,217 | 19,856,173 | |||||||||||||
Chuy’s Holdings, Inc.A | 51,055 | 1,460,173 | |||||||||||||
Dave & Buster’s Entertainment, Inc.A | 173,980 | 7,392,410 | |||||||||||||
Del Frisco’s Restaurant Group, Inc.A | 62,169 | 988,487 | |||||||||||||
El Pollo Loco Holdings, Inc.A | 135,600 | 1,356,000 | |||||||||||||
Eldorado Resorts, Inc.A | 23,900 | 967,950 | |||||||||||||
ILG, Inc. | 36,100 | 1,232,093 | |||||||||||||
International Speedway Corp., Class A | 74,475 | 3,060,923 | |||||||||||||
Ruth’s Hospitality Group, Inc. | 17,200 | 461,820 | |||||||||||||
Speedway Motorsports, Inc. | 103,862 | 1,833,164 | |||||||||||||
|
| ||||||||||||||
64,569,748 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 2.52% | |||||||||||||||
Century Communities, Inc.A | 113,213 | 3,481,300 | |||||||||||||
CSS Industries, Inc. | 37,532 | 640,296 | |||||||||||||
Ethan Allen Interiors, Inc. | 570,977 | 12,590,043 | |||||||||||||
Flexsteel Industries, Inc. | 25,682 | 941,502 | |||||||||||||
Green Brick Partners, Inc.A | 30,600 | 309,060 | |||||||||||||
Helen of Troy Ltd.A | 204,310 | 18,214,236 | |||||||||||||
Hooker Furniture Corp. | 7,800 | 294,450 | |||||||||||||
KB Home | 688,735 | 18,285,914 | |||||||||||||
La-Z-Boy, Inc. | 219,795 | 6,330,096 |
See accompanying notes
6
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Consumer Discretionary - 13.90% (continued) | |||||||||||||||
Household Durables - 2.52% (continued) | |||||||||||||||
LGI Homes, Inc.A B | 57,627 | $ | 3,987,788 | ||||||||||||
Lifetime Brands, Inc. | 39,020 | 464,338 | |||||||||||||
M/I Homes, Inc.A | 354,709 | 10,811,530 | |||||||||||||
MDC Holdings, Inc. | 155,416 | 4,508,618 | |||||||||||||
Meritage Homes Corp.A | 127,925 | 5,692,663 | |||||||||||||
Taylor Morrison Home Corp., Class AA | 915,259 | 21,746,554 | |||||||||||||
Tempur Sealy International, Inc.A B | 152,924 | 6,843,349 | |||||||||||||
TRI Pointe Group, Inc.A | 1,657,278 | 28,356,027 | |||||||||||||
Tupperware Brands Corp. | 81,716 | 3,641,265 | |||||||||||||
Whirlpool Corp. | 111,457 | 17,270,262 | |||||||||||||
William Lyon Homes, Class AA | 399,628 | 10,734,008 | |||||||||||||
|
| ||||||||||||||
175,143,299 | |||||||||||||||
|
| ||||||||||||||
Internet & Direct Marketing Retail - 0.03% | |||||||||||||||
Duluth Holdings, Inc., Class BA B | 19,400 | 336,590 | |||||||||||||
Lands’ End, Inc.A | 94,613 | 1,830,762 | |||||||||||||
|
| ||||||||||||||
2,167,352 | |||||||||||||||
|
| ||||||||||||||
Leisure Products - 0.37% | |||||||||||||||
Brunswick Corp. | 214,028 | 12,815,997 | |||||||||||||
Malibu Boats, Inc., Class AA | 305,620 | 10,299,394 | |||||||||||||
MCBC Holdings, Inc.A | 61,610 | 1,478,640 | |||||||||||||
Nautilus, Inc.A | 53,500 | 778,425 | |||||||||||||
Sturm Ruger & Co., Inc.B | 6,900 | 381,225 | |||||||||||||
|
| ||||||||||||||
25,753,681 | |||||||||||||||
|
| ||||||||||||||
Media - 1.81% | |||||||||||||||
AMC Networks, Inc., Class AA | 147,541 | 7,672,132 | |||||||||||||
Entercom Communications Corp., Class AB | 146,348 | 1,485,432 | |||||||||||||
Entravision Communications Corp., Class A | 224,796 | 1,045,301 | |||||||||||||
EW Scripps Co., Class A | 1,067,472 | 11,880,963 | |||||||||||||
Gannett Co., Inc. | 315,300 | 3,048,951 | |||||||||||||
Gray Television, Inc.A | 705,801 | 7,975,551 | |||||||||||||
John Wiley & Sons, Inc., Class A | 95,057 | 6,269,009 | |||||||||||||
Marcus Corp. | 25,900 | 771,820 | |||||||||||||
MDC Partners, Inc., Class AA | 1,256,512 | 9,486,666 | |||||||||||||
Meredith Corp.B | 277,996 | 14,400,193 | |||||||||||||
MSG Networks, Inc., Class AA | 230,854 | 4,732,507 | |||||||||||||
New Media Investment Group, Inc. | 110,639 | 1,834,395 | |||||||||||||
New York Times Co. | 916,830 | 21,499,664 | |||||||||||||
Nexstar Media Group, Inc., Class A | 15,700 | 977,325 | |||||||||||||
Scholastic Corp. | 407,487 | 16,869,962 | |||||||||||||
Sinclair Broadcast Group, Inc., Class A | 374,075 | 10,605,026 | |||||||||||||
TEGNA, Inc. | 462,551 | 4,889,164 | |||||||||||||
|
| ||||||||||||||
125,444,061 | |||||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.54% | |||||||||||||||
Big Lots, Inc. | 372,543 | 15,814,450 | |||||||||||||
Dillard’s, Inc., Class AB | 284,142 | 21,182,786 | |||||||||||||
Fred’s, Inc., Class A | 94,957 | 227,422 | |||||||||||||
|
| ||||||||||||||
37,224,658 | |||||||||||||||
|
| ||||||||||||||
�� | |||||||||||||||
Specialty Retail - 4.17% | |||||||||||||||
Aaron’s, Inc. | 330,197 | 13,792,329 | |||||||||||||
Abercrombie & Fitch Co., Class A | 278,126 | 7,125,588 | |||||||||||||
American Eagle Outfitters, Inc. | 500,200 | 10,344,136 | |||||||||||||
Asbury Automotive Group, Inc.A | 75,420 | 5,056,911 |
See accompanying notes
7
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Consumer Discretionary - 13.90% (continued) | |||||||||||||||
Specialty Retail - 4.17% (continued) | |||||||||||||||
Ascena Retail Group, Inc.A | 328,840 | $ | 730,025 | ||||||||||||
AutoNation, Inc.A | 258,457 | 11,938,129 | |||||||||||||
Bed Bath & Beyond, Inc. | 289,900 | 5,061,654 | |||||||||||||
Buckle, Inc.B | 364,994 | 8,413,112 | |||||||||||||
Caleres, Inc. | 337,951 | 11,061,136 | |||||||||||||
Cato Corp., Class A | 88,487 | 1,434,374 | |||||||||||||
Chico’s FAS, Inc. | 648,526 | 6,439,863 | |||||||||||||
Dick’s Sporting Goods, Inc. | 508,651 | 16,831,262 | |||||||||||||
DSW, Inc., Class A | 420,996 | 9,388,211 | |||||||||||||
Express, Inc.A | 1,613,594 | 12,650,577 | |||||||||||||
Finish Line, Inc., Class A | 167,446 | 2,272,242 | |||||||||||||
Francesca’s Holdings Corp.A | 289,221 | 1,431,644 | |||||||||||||
GameStop Corp., Class AB | 79,171 | 1,080,684 | |||||||||||||
Genesco, Inc.A | 108,101 | 4,621,318 | |||||||||||||
Group 1 Automotive, Inc. | 225,886 | 14,761,650 | |||||||||||||
Guess?, Inc. | 699,895 | 16,300,555 | |||||||||||||
Hibbett Sports, Inc.A | 163,996 | 4,460,691 | |||||||||||||
Kirkland’s, Inc.A | 138,189 | 1,463,422 | |||||||||||||
Lithia Motors, Inc., Class A | 73,775 | 7,072,072 | |||||||||||||
Lumber Liquidators Holdings, Inc.A B | 93,385 | 2,247,777 | |||||||||||||
Michaels Cos, Inc.A | 511,421 | 9,522,659 | |||||||||||||
Murphy USA, Inc.A | 66,100 | 4,135,877 | |||||||||||||
Office Depot, Inc. | 7,484,769 | 17,140,121 | |||||||||||||
Penske Automotive Group, Inc. | 242,005 | 10,914,425 | |||||||||||||
Pier 1 Imports, Inc. | 250,693 | 559,045 | |||||||||||||
Shoe Carnival, Inc. | 55,004 | 1,340,447 | |||||||||||||
Sonic Automotive, Inc., Class A | 1,231,085 | 24,375,483 | |||||||||||||
Tailored Brands, Inc. | 136,400 | 4,303,420 | |||||||||||||
Urban Outfitters, Inc.A | 318,218 | 12,814,639 | |||||||||||||
Williams-Sonoma, Inc.B | 507,628 | 24,264,618 | |||||||||||||
Zumiez, Inc.A | 170,343 | 3,986,026 | |||||||||||||
|
| ||||||||||||||
289,336,122 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.69% | |||||||||||||||
Crocs, Inc.A | 354,005 | 5,593,279 | |||||||||||||
Deckers Outdoor Corp.A | 169,031 | 15,763,831 | |||||||||||||
Fossil Group, Inc.A B | 97,436 | 1,456,668 | |||||||||||||
G-III Apparel Group Ltd.A | 13,600 | 496,264 | |||||||||||||
Movado Group, Inc. | 155,798 | 6,146,231 | |||||||||||||
Oxford Industries, Inc. | 140,720 | 10,841,069 | |||||||||||||
Steven Madden Ltd. | 8,600 | 414,950 | |||||||||||||
Vera Bradley, Inc.A | 317,392 | 3,611,921 | |||||||||||||
Wolverine World Wide, Inc. | 124,986 | 3,744,581 | |||||||||||||
|
| ||||||||||||||
48,068,794 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 964,773,589 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 2.63% | |||||||||||||||
Beverages - 0.46% | |||||||||||||||
Boston Beer Co., Inc., Class AA | 141,986 | 31,826,162 | |||||||||||||
|
| ||||||||||||||
Food & Staples Retailing - 1.17% | |||||||||||||||
Andersons, Inc. | 152,610 | 4,982,716 | |||||||||||||
Casey’s General Stores, Inc. | 67,662 | 6,536,149 | |||||||||||||
Chefs’ Warehouse, Inc.A | 62,143 | 1,506,968 | |||||||||||||
Natural Grocers by Vitamin Cottage, Inc.A | 42,977 | 307,286 | |||||||||||||
Performance Food Group Co.A | 231,200 | 7,502,440 |
See accompanying notes
8
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Consumer Staples - 2.63% (continued) | |||||||||||||||
Food & Staples Retailing - 1.17% (continued) | |||||||||||||||
SpartanNash Co. | 241,439 | $ | 4,389,361 | ||||||||||||
Sprouts Farmers Market, Inc.A | 486,361 | 12,173,616 | |||||||||||||
SUPERVALU, Inc.A B | 70,005 | 1,225,787 | |||||||||||||
United Natural Foods, Inc.A | 871,794 | 39,248,166 | |||||||||||||
Village Super Market, Inc., Class A | 29,100 | 791,520 | |||||||||||||
Weis Markets, Inc. | 55,296 | 2,544,722 | |||||||||||||
|
| ||||||||||||||
81,208,731 | |||||||||||||||
|
| ||||||||||||||
Food Products - 0.71% | |||||||||||||||
B&G Foods, Inc.B | 29,783 | 677,563 | |||||||||||||
Darling Ingredients, Inc.A | 1,542,987 | 26,446,797 | |||||||||||||
Dean Foods Co. | 106,593 | 917,766 | |||||||||||||
Fresh Del Monte Produce, Inc. | 234,659 | 11,533,490 | |||||||||||||
Hain Celestial Group, Inc.A | 95,769 | 2,789,751 | |||||||||||||
Sanderson Farms, Inc. | 64,416 | 7,160,483 | |||||||||||||
|
| ||||||||||||||
49,525,850 | |||||||||||||||
|
| ||||||||||||||
Household Products - 0.23% | |||||||||||||||
Energizer Holdings, Inc. | 279,545 | 16,034,701 | |||||||||||||
|
| ||||||||||||||
Personal Products - 0.04% | |||||||||||||||
Natural Health Trends Corp.B | 48,478 | 899,752 | |||||||||||||
Nu Skin Enterprises, Inc., Class A | 11,000 | 782,650 | |||||||||||||
USANA Health Sciences, Inc.A | 10,500 | 1,108,275 | |||||||||||||
|
| ||||||||||||||
2,790,677 | |||||||||||||||
|
| ||||||||||||||
Tobacco - 0.02% | |||||||||||||||
Universal Corp. | 28,161 | 1,324,975 | |||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 182,711,096 | ||||||||||||||
|
| ||||||||||||||
Energy - 7.14% | |||||||||||||||
Energy Equipment & Services - 2.70% | |||||||||||||||
C&J Energy Services, Inc.A | 462,450 | 13,808,757 | |||||||||||||
CARBO Ceramics, Inc.A B | 357,887 | 3,163,721 | |||||||||||||
Diamond Offshore Drilling, Inc.A B | 435,216 | 8,003,622 | |||||||||||||
Dril-Quip, Inc.A | 287,724 | 11,926,160 | |||||||||||||
Ensco PLC, Class AB | 320,775 | 1,812,379 | |||||||||||||
Frank’s International N.V.B | 4,462,141 | 31,190,366 | |||||||||||||
Helix Energy Solutions Group, Inc.A | 416,700 | 3,216,924 | |||||||||||||
Key Energy Services, Inc.A | 308,100 | 4,938,843 | |||||||||||||
Matrix Service Co.A | 100,983 | 1,555,138 | |||||||||||||
McDermott International, Inc.A | 1,487,358 | 9,816,563 | |||||||||||||
Nabors Industries Ltd. | 591,700 | 4,502,837 | |||||||||||||
Natural Gas Services Group, Inc.A | 108,367 | 2,611,645 | |||||||||||||
Newpark Resources, Inc.A | 1,144,463 | 12,016,861 | |||||||||||||
Nine Energy Service, Inc.A | 224,400 | 6,853,176 | |||||||||||||
Oceaneering International, Inc. | 58,264 | 1,237,527 | |||||||||||||
Oil States International, Inc.A | 640,997 | 23,043,842 | |||||||||||||
Patterson-UTI Energy, Inc. | 1,047,138 | 22,429,696 | |||||||||||||
Quintana Energy Services, Inc.A | 235,700 | 1,824,318 | |||||||||||||
Rowan Cos PLC, Class AA | 372,200 | 5,374,568 | |||||||||||||
SEACOR Holdings, Inc.A | 127,970 | 7,017,875 | |||||||||||||
Smart Sand, Inc.A B | 233,342 | 1,708,063 | |||||||||||||
Unit Corp.A | 149,200 | 3,383,856 | |||||||||||||
US Silica Holdings, Inc. | 197,620 | 5,950,338 | |||||||||||||
|
| ||||||||||||||
187,387,075 | |||||||||||||||
|
| ||||||||||||||
See accompanying notes
9
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Energy - 7.14% (continued) | |||||||||||||||
Oil, Gas & Consumable Fuels - 4.44% | |||||||||||||||
Alliance Holdings GP LP | 44,093 | $ | 1,127,899 | ||||||||||||
Alliance Resource Partners LP, MLP | 174,323 | 3,076,801 | |||||||||||||
Arch Coal, Inc., Class A | 121,551 | 9,824,967 | |||||||||||||
BP Prudhoe Bay Royalty Trust | 56,780 | 1,320,135 | |||||||||||||
Callon Petroleum Co.A | 4,193,959 | 58,337,970 | |||||||||||||
Carrizo Oil & Gas, Inc.A | 122,430 | 2,457,170 | |||||||||||||
CNX Midstream Partners LP, MLP | 20,500 | 390,115 | |||||||||||||
CNX Resources Corp.A | 632,800 | 9,403,408 | |||||||||||||
Cosan Ltd., Class A | 295,356 | 2,977,188 | |||||||||||||
CVR Energy, Inc.B | 11,300 | 389,850 | |||||||||||||
CVR Refining LP | 106,318 | 1,828,669 | |||||||||||||
Delek US Holdings, Inc. | 84,048 | 3,981,354 | |||||||||||||
Denbury Resources, Inc.A | 1,395,584 | 4,591,471 | |||||||||||||
Energy XXI Gulf Coast, Inc.A | 851,824 | 4,923,543 | |||||||||||||
Gran Tierra Energy, Inc.A B | 1,370,815 | 4,537,398 | |||||||||||||
Gulfport Energy Corp.A | 402,560 | 3,743,808 | |||||||||||||
HighPoint Resources Corp.A | 505,406 | 3,492,355 | |||||||||||||
International Seaways, Inc.A | 85,297 | 1,717,029 | |||||||||||||
Kosmos Energy Ltd.A | 2,686,393 | 18,912,207 | |||||||||||||
Midstates Petroleum Co., Inc.A | 123,047 | 1,721,427 | |||||||||||||
Murphy Oil Corp. | 486,800 | 14,657,548 | |||||||||||||
Noble Midstream Partners LP | 6,600 | 297,000 | |||||||||||||
Nordic American Tankers Ltd.B | 496,227 | 932,907 | |||||||||||||
Oasis Petroleum, Inc.A | 1,542,421 | 17,012,904 | |||||||||||||
Par Pacific Holdings, Inc.A | 126,600 | 2,135,742 | |||||||||||||
PBF Energy, Inc., Class A | 328,200 | 12,579,906 | |||||||||||||
PBF Logistics LP | 52,700 | 1,051,365 | |||||||||||||
PDC Energy, Inc.A | 356,409 | 19,082,138 | |||||||||||||
Peabody Energy Corp. | 117,135 | 4,316,425 | |||||||||||||
QEP Resources, Inc.A | 446,100 | 5,433,498 | |||||||||||||
Renewable Energy Group, Inc.A | 413,062 | 5,328,500 | |||||||||||||
REX American Resources Corp.A | 13,475 | 1,007,660 | |||||||||||||
Rice Midstream Partners LP | 16,300 | 299,594 | |||||||||||||
SM Energy Co. | 309,200 | 7,405,340 | |||||||||||||
Southwestern Energy Co.A | 686,138 | 2,813,166 | |||||||||||||
SRC Energy, Inc.A | 1,535,600 | 16,953,024 | |||||||||||||
W&T Offshore, Inc.A | 631,759 | 3,853,730 | |||||||||||||
Whiting Petroleum Corp.A | 1,317,990 | 53,800,352 | |||||||||||||
World Fuel Services Corp. | 25,500 | 547,485 | |||||||||||||
|
| ||||||||||||||
308,263,048 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 495,650,123 | ||||||||||||||
|
| ||||||||||||||
Financials - 25.70% | |||||||||||||||
Banks - 16.29% | |||||||||||||||
1st Source Corp. | 14,300 | 743,600 | |||||||||||||
Access National Corp. | 24,517 | 681,818 | |||||||||||||
American National Bankshares, Inc. | 7,932 | 304,985 | |||||||||||||
Arrow Financial Corp. | 9,899 | 350,425 | |||||||||||||
Associated Banc-Corp | 2,122,827 | 56,148,774 | |||||||||||||
Banc of California, Inc. | 129,134 | 2,479,373 | |||||||||||||
Bancorp, Inc.A | 409,132 | 4,234,516 | |||||||||||||
BancorpSouth Bank | 189,495 | 6,262,810 | |||||||||||||
Bank of Marin Bancorp | 20,086 | 1,457,239 | |||||||||||||
Bank of NT Butterfield & Son Ltd. | 500,889 | 23,767,183 | |||||||||||||
BankUnited, Inc. | 473,429 | 18,752,523 | |||||||||||||
Banner Corp. | 322,449 | 18,508,573 |
See accompanying notes
10
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Financials - 25.70% (continued) | |||||||||||||||
Banks - 16.29% (continued) | |||||||||||||||
Bar Harbor Bankshares | 24,700 | $ | 721,734 | ||||||||||||
BCB Bancorp, Inc. | 49,292 | 764,026 | |||||||||||||
Berkshire Hills Bancorp, Inc. | 458,714 | 17,408,196 | |||||||||||||
Boston Private Financial Holdings, Inc. | 109,419 | 1,756,175 | |||||||||||||
Bridge Bancorp, Inc. | 30,318 | 997,462 | |||||||||||||
Brookline Bancorp, Inc. | 449,353 | 7,459,260 | |||||||||||||
Bryn Mawr Bank Corp. | 153,625 | 6,851,675 | |||||||||||||
Byline Bancorp, Inc.A | 35,100 | 745,875 | |||||||||||||
C&F Financial Corp. | 13,255 | 767,464 | |||||||||||||
Camden National Corp. | 24,600 | 1,090,026 | |||||||||||||
Carolina Financial Corp. | 38,400 | 1,505,664 | |||||||||||||
Cathay General Bancorp | 384,625 | 15,388,846 | |||||||||||||
CenterState Bank Corp. | 588,994 | 17,069,046 | |||||||||||||
Central Pacific Financial Corp. | 294,819 | 8,573,337 | |||||||||||||
Chemical Financial Corp. | 280,035 | 15,371,121 | |||||||||||||
Chemung Financial Corp. | 6,774 | 319,733 | |||||||||||||
City Holding Co. | 15,700 | 1,123,806 | |||||||||||||
CoBiz Financial, Inc. | 269,550 | 5,431,432 | |||||||||||||
Community Trust Bancorp, Inc. | 28,984 | 1,391,232 | |||||||||||||
ConnectOne Bancorp, Inc. | 56,416 | 1,489,382 | |||||||||||||
Customers Bancorp, Inc.A | 444,228 | 12,802,651 | |||||||||||||
CVB Financial Corp. | 396,667 | 8,786,174 | |||||||||||||
Enterprise Financial Services Corp. | 59,467 | 3,023,897 | |||||||||||||
FCB Financial Holdings, Inc., Class AA | 314,603 | 18,184,053 | |||||||||||||
Fidelity Southern Corp. | 49,900 | 1,134,227 | |||||||||||||
Financial Institutions, Inc. | 45,500 | 1,415,050 | |||||||||||||
First BanCorpA | 1,886,094 | 13,617,599 | |||||||||||||
First Busey Corp. | 140,600 | 4,168,790 | |||||||||||||
First Business Financial Services, Inc. | 15,463 | 401,883 | |||||||||||||
First Citizens BancShares, Inc., Class A | 13,848 | 5,986,352 | |||||||||||||
First Commonwealth Financial Corp. | 227,904 | 3,450,467 | |||||||||||||
First Financial Bancorp | 54,100 | 1,674,395 | |||||||||||||
First Financial Corp. | 123,439 | 5,277,017 | |||||||||||||
First Hawaiian, Inc. | 1,293,072 | 35,624,134 | |||||||||||||
First Internet Bancorp | 37,900 | 1,296,180 | |||||||||||||
First Interstate BancSystem, Inc., Class A | 269,646 | 10,920,663 | |||||||||||||
First Merchants Corp. | 74,287 | 3,200,284 | |||||||||||||
First Mid-Illinois Bancshares, Inc. | 18,156 | 667,233 | |||||||||||||
First Midwest Bancorp, Inc. | 695,594 | 16,909,890 | |||||||||||||
Flushing Financial Corp. | 93,702 | 2,427,819 | |||||||||||||
FNB Corp. | 968,977 | 12,596,701 | |||||||||||||
Franklin Financial Network, Inc.A | 42,600 | 1,435,620 | |||||||||||||
Fulton Financial Corp. | 2,015,479 | 34,061,595 | |||||||||||||
Glacier Bancorp, Inc. | 63,689 | 2,358,404 | |||||||||||||
Great Western Bancorp, Inc. | 180,882 | 7,441,485 | |||||||||||||
Hancock Holding Co. | 571,744 | 27,929,694 | |||||||||||||
Hanmi Financial Corp. | 84,602 | 2,335,015 | |||||||||||||
Heartland Financial USA, Inc. | 49,299 | 2,644,891 | |||||||||||||
Heritage Financial Corp. | 227,783 | 6,765,155 | |||||||||||||
Hilltop Holdings, Inc. | 474,659 | 10,641,855 | |||||||||||||
HomeTrust Bancshares, Inc.A | 26,640 | 695,304 | |||||||||||||
Hope Bancorp, Inc. | 455,700 | 7,879,053 | |||||||||||||
Horizon Bancorp | 53,817 | 1,547,777 | |||||||||||||
IBERIABANK Corp. | 279,643 | 20,959,243 | |||||||||||||
International Bancshares Corp. | 558,875 | 22,243,225 | |||||||||||||
Investors Bancorp, Inc. | 933,029 | 12,474,598 | |||||||||||||
Live Oak Bancshares, Inc. | 44,600 | 1,259,950 |
See accompanying notes
11
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Financials - 25.70% (continued) | |||||||||||||||
Banks - 16.29% (continued) | |||||||||||||||
MB Financial, Inc. | 232,194 | $ | 9,896,108 | ||||||||||||
Midland States Bancorp, Inc. | 44,700 | 1,408,050 | |||||||||||||
MidSouth Bancorp, Inc. | 53,100 | 740,745 | |||||||||||||
MidWestOne Financial Group, Inc. | 40,256 | 1,299,061 | |||||||||||||
National Bank Holdings Corp., Class A | 411,697 | 14,483,500 | |||||||||||||
National Bankshares, Inc. | 7,963 | 365,104 | |||||||||||||
Northrim BanCorp, Inc. | 32,788 | 1,154,138 | |||||||||||||
Norwood Financial Corp. | 11,800 | 349,398 | |||||||||||||
OFG Bancorp | 202,361 | 2,731,873 | |||||||||||||
Old National Bancorp | 2,104,582 | 36,198,810 | |||||||||||||
Opus Bank | 136,300 | 3,843,660 | |||||||||||||
Orrstown Financial Services, Inc. | 13,700 | 360,995 | |||||||||||||
Peapack Gladstone Financial Corp. | 32,400 | 1,070,496 | |||||||||||||
Penns Woods Bancorp, Inc. | 14,553 | 633,056 | |||||||||||||
Peoples Financial Services Corp. | 7,479 | 350,765 | |||||||||||||
Popular, Inc. | 656,854 | 30,405,772 | |||||||||||||
Prosperity Bancshares, Inc. | 609,492 | 43,743,241 | |||||||||||||
Renasant Corp. | 136,627 | 6,179,639 | |||||||||||||
Republic Bancorp, Inc., Class A | 53,090 | 2,238,805 | |||||||||||||
S&T Bancorp, Inc. | 89,168 | 3,805,690 | |||||||||||||
Sandy Spring Bancorp, Inc. | 17,900 | 709,377 | |||||||||||||
Seacoast Banking Corp. of FloridaA | 616,491 | 17,033,646 | |||||||||||||
Simmons First National Corp., Class A | 87,016 | 2,627,883 | |||||||||||||
South State Corp. | 173,712 | 15,034,774 | |||||||||||||
Southern National Bancorp of Virginia, Inc. | 85,600 | 1,391,000 | |||||||||||||
State Bank Financial Corp. | 36,500 | 1,150,115 | |||||||||||||
Sterling Bancorp | 311,462 | 7,397,222 | |||||||||||||
TCF Financial Corp. | 1,568,285 | 38,940,517 | |||||||||||||
Texas Capital Bancshares, Inc.A | 656,278 | 64,741,825 | |||||||||||||
TriCo Bancshares | 29,413 | 1,099,164 | |||||||||||||
Trustmark Corp. | 423,347 | 13,254,995 | |||||||||||||
UMB Financial Corp. | 661,631 | 50,667,702 | |||||||||||||
Umpqua Holdings Corp. | 1,896,319 | 44,677,276 | |||||||||||||
Union Bankshares Corp. | 407,057 | 15,390,825 | |||||||||||||
United Community Banks, Inc. | 507,647 | 16,209,169 | |||||||||||||
Valley National Bancorp | 3,438,196 | 43,149,360 | |||||||||||||
Webster Financial Corp. | 529,324 | 31,860,012 | |||||||||||||
WesBanco, Inc. | 268,182 | 11,746,372 | |||||||||||||
West Bancorp, Inc. | 14,100 | 343,335 | |||||||||||||
Westamerica Bancorp | 161,051 | 8,988,256 | |||||||||||||
Wintrust Financial Corp. | 191,092 | 17,093,179 | |||||||||||||
|
| ||||||||||||||
1,130,920,544 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 1.98% | |||||||||||||||
AllianceBernstein Holding LP, MLP | 300,779 | 8,181,189 | |||||||||||||
Artisan Partners Asset Management, Inc., Class A | 100,300 | 3,224,645 | |||||||||||||
BrightSphere Investment Group PLC | 870,316 | 13,202,694 | |||||||||||||
Cohen & Steers, Inc. | 183,613 | 7,362,881 | |||||||||||||
Donnelley Financial Solutions, Inc.A | 189,375 | 3,484,500 | |||||||||||||
Ellington Financial LLC | 67,600 | 1,008,592 | |||||||||||||
Evercore, Inc., Class A | 188,594 | 19,095,142 | |||||||||||||
Federated Investors, Inc., Class B | 614,868 | 16,275,556 | |||||||||||||
GAMCO Investors, Inc., Class A | 38,000 | 974,700 | |||||||||||||
Greenhill & Co., Inc.B | 72,300 | 1,467,690 | |||||||||||||
INTL. FCStone, Inc.A | 35,568 | 1,594,158 | |||||||||||||
Manning & Napier, Inc. | 97,919 | 303,549 | |||||||||||||
Morningstar, Inc. | 112,824 | 12,250,430 |
See accompanying notes
12
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
�� | |||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Financials - 25.70% (continued) | |||||||||||||||
Capital Markets - 1.98% (continued) | |||||||||||||||
Och-Ziff Capital Management Group LLC | 436,799 | $ | 851,758 | ||||||||||||
Oppenheimer Holdings, Inc., Class A | 254,040 | 6,820,974 | |||||||||||||
Piper Jaffray Cos | 46,500 | 3,257,325 | |||||||||||||
Stifel Financial Corp. | 280,659 | 16,356,806 | |||||||||||||
Virtus Investment Partners, Inc. | 32,903 | 3,795,361 | |||||||||||||
Waddell & Reed Financial, Inc., Class A | 894,796 | 18,110,671 | |||||||||||||
|
| ||||||||||||||
137,618,621 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 1.12% | |||||||||||||||
Encore Capital Group, Inc.A B | 71,263 | 3,178,330 | |||||||||||||
EZCORP, Inc., Class AA | 366,586 | 5,022,228 | |||||||||||||
Nelnet, Inc., Class A | 217,087 | 11,464,365 | |||||||||||||
OneMain Holdings, Inc.A | 254,300 | 7,845,155 | |||||||||||||
PRA Group, Inc.A | 622,434 | 22,158,650 | |||||||||||||
SLM Corp.A | 2,452,500 | 28,154,700 | |||||||||||||
|
| ||||||||||||||
77,823,428 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.02% | |||||||||||||||
FGL HoldingsA | 161,921 | 1,543,107 | |||||||||||||
|
| ||||||||||||||
Insurance - 4.52% | |||||||||||||||
Ambac Financial Group, Inc.A | 296,455 | 5,048,629 | |||||||||||||
American Equity Investment Life Holding Co. | 513,076 | 15,494,895 | |||||||||||||
AMERISAFE, Inc. | 36,806 | 2,182,596 | |||||||||||||
Argo Group International Holdings Ltd. | 256,069 | 14,967,233 | |||||||||||||
Aspen Insurance Holdings Ltd. | 99,027 | 4,203,696 | |||||||||||||
Assurant, Inc. | 130,500 | 12,113,010 | |||||||||||||
CNO Financial Group, Inc. | 1,420,042 | 30,445,700 | |||||||||||||
eHealth, Inc.A | 199,944 | 3,766,945 | |||||||||||||
EMC Insurance Group, Inc. | 23,922 | 621,494 | |||||||||||||
Employers Holdings, Inc. | 89,828 | 3,673,965 | |||||||||||||
Enstar Group Ltd.A | 215,404 | 45,267,151 | |||||||||||||
FBL Financial Group, Inc., Class A | 36,247 | 2,818,204 | |||||||||||||
Global Indemnity Ltd. | 383,447 | 15,679,148 | |||||||||||||
Greenlight Capital Re Ltd., Class AA | 85,311 | 1,322,321 | |||||||||||||
Hallmark Financial Services, Inc.A | 34,836 | 357,766 | |||||||||||||
Hanover Insurance Group, Inc. | 182,912 | 21,007,443 | |||||||||||||
Horace Mann Educators Corp. | 588,982 | 26,327,495 | |||||||||||||
Infinity Property & Casualty Corp. | 35,259 | 4,654,188 | |||||||||||||
Kemper Corp. | 297,222 | 20,062,485 | |||||||||||||
MBIA, Inc.A B | 153,455 | 1,307,437 | |||||||||||||
National General Holdings Corp. | 338,300 | 8,717,991 | |||||||||||||
National Western Life Group, Inc., Class A | 10,149 | 3,221,394 | |||||||||||||
Navigators Group, Inc. | 63,967 | 3,614,136 | |||||||||||||
RenaissanceRe Holdings Ltd. | 88,972 | 12,103,751 | |||||||||||||
Safety Insurance Group, Inc. | 105,361 | 8,428,880 | |||||||||||||
Selective Insurance Group, Inc. | 295,036 | 17,466,131 | |||||||||||||
State Auto Financial Corp. | 75,680 | 2,363,486 | |||||||||||||
Stewart Information Services Corp. | 34,700 | 1,447,337 | |||||||||||||
Third Point Reinsurance Ltd.A | 401,894 | 5,345,190 | |||||||||||||
United Fire Group, Inc. | 85,079 | 4,278,623 | |||||||||||||
Universal Insurance Holdings, Inc. | 102,124 | 3,313,924 | |||||||||||||
White Mountains Insurance Group Ltd. | 13,881 | 12,011,090 | |||||||||||||
|
| ||||||||||||||
313,633,734 | |||||||||||||||
|
| ||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.14% | |||||||||||||||
Apollo Commercial Real Estate Finance, Inc. | 317,146 | 5,714,971 |
See accompanying notes
13
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Financials - 25.70% (continued) | |||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.14% (continued) | |||||||||||||||
Ares Commercial Real Estate Corp. | 79,000 | $ | 966,170 | ||||||||||||
Great Ajax Corp. | 23,400 | 314,496 | |||||||||||||
Owens Realty Mortgage, Inc.B | 20,600 | 319,506 | |||||||||||||
PennyMac Mortgage Investment Trust | 45,200 | 795,068 | |||||||||||||
Resource Capital Corp. | 157,007 | 1,532,388 | |||||||||||||
|
| ||||||||||||||
9,642,599 | |||||||||||||||
|
| ||||||||||||||
Thrifts & Mortgage Finance - 1.63% | |||||||||||||||
Beneficial Bancorp, Inc. | 197,293 | 3,127,094 | |||||||||||||
BofI Holding, Inc.A B | 176,291 | 7,101,001 | |||||||||||||
Capitol Federal Financial, Inc. | 409,699 | 5,108,946 | |||||||||||||
Dime Community Bancshares, Inc. | 145,205 | 2,867,799 | |||||||||||||
Essent Group Ltd.A | 272,603 | 8,984,995 | |||||||||||||
Flagstar Bancorp, Inc.A | 158,306 | 5,469,472 | |||||||||||||
HomeStreet, Inc.A | 48,800 | 1,244,400 | |||||||||||||
Kearny Financial Corp. | 225,872 | 3,173,502 | |||||||||||||
Luther Burbank Corp. | 252,900 | 3,151,134 | |||||||||||||
Meridian Bancorp, Inc. | 90,403 | 1,708,617 | |||||||||||||
Meta Financial Group, Inc. | 24,900 | 2,767,635 | |||||||||||||
MGIC Investment Corp.A | 955,192 | 9,571,024 | |||||||||||||
Northfield Bancorp, Inc. | 203,335 | 3,220,826 | |||||||||||||
Northwest Bancshares, Inc. | 248,579 | 4,126,411 | |||||||||||||
Oritani Financial Corp. | 176,740 | 2,704,122 | |||||||||||||
PCSB Financial Corp.A | 53,914 | 1,092,837 | |||||||||||||
PHH Corp.A | 102,265 | 1,085,032 | |||||||||||||
Provident Financial Services, Inc. | 144,230 | 3,767,288 | |||||||||||||
Radian Group, Inc. | 597,107 | 8,538,630 | |||||||||||||
Southern Missouri Bancorp, Inc. | 9,114 | 318,079 | |||||||||||||
Territorial Bancorp, Inc. | 9,485 | 288,723 | |||||||||||||
TrustCo Bank Corp. | 157,500 | 1,346,625 | |||||||||||||
United Financial Bancorp, Inc. | 140,939 | 2,329,722 | |||||||||||||
Walker & Dunlop, Inc. | 86,136 | 4,919,227 | |||||||||||||
Washington Federal, Inc. | 781,148 | 24,801,449 | |||||||||||||
|
| ||||||||||||||
112,814,590 | |||||||||||||||
|
| ||||||||||||||
Total Financials | 1,783,996,623 | ||||||||||||||
|
| ||||||||||||||
Health Care - 3.92% | |||||||||||||||
Biotechnology - 0.09% | |||||||||||||||
Emergent BioSolutions, Inc.A | 114,581 | 5,942,171 | |||||||||||||
|
| ||||||||||||||
Health Care Equipment & Supplies - 0.85% | |||||||||||||||
Anika Therapeutics, Inc.A | 124,655 | 5,486,067 | |||||||||||||
Globus Medical, Inc., Class AA | 19,100 | 977,729 | |||||||||||||
Haemonetics Corp.A | 114,280 | 8,918,411 | |||||||||||||
Integra LifeSciences Holdings Corp.A | 40,557 | 2,499,528 | |||||||||||||
Invacare Corp. | 1,266,742 | 23,054,704 | |||||||||||||
Meridian Bioscience, Inc. | 162,541 | 2,373,099 | |||||||||||||
Natus Medical, Inc.A | 178,500 | 5,899,425 | |||||||||||||
NuVasive, Inc.A | 139,066 | 7,399,702 | |||||||||||||
STAAR Surgical Co.A | 69,198 | 1,124,467 | |||||||||||||
Varex Imaging Corp.A | 29,600 | 1,065,304 | |||||||||||||
|
| ||||||||||||||
58,798,436 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 2.13% | |||||||||||||||
Aceto Corp. | 256,589 | 646,604 | |||||||||||||
Amedisys, Inc.A | 257,903 | 17,044,809 |
See accompanying notes
14
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Health Care - 3.92% (continued) | |||||||||||||||
Health Care Providers & Services - 2.13% (continued) | |||||||||||||||
AMN Healthcare Services, Inc.A | 402,267 | $ | 26,891,549 | ||||||||||||
Encompass Health Corp. | 514,780 | 31,308,920 | |||||||||||||
Hanger, Inc.A | 697,921 | 12,771,954 | |||||||||||||
LHC Group, Inc.A | 64,773 | 4,820,407 | |||||||||||||
LifePoint Health, Inc.A | 141,590 | 6,782,161 | |||||||||||||
Magellan Health, Inc.A | 157,075 | 13,170,739 | |||||||||||||
National HealthCare Corp. | 16,793 | 1,029,075 | |||||||||||||
Owens & Minor, Inc. | 223,973 | 3,639,561 | |||||||||||||
Providence Service Corp.A | 68,793 | 5,220,013 | |||||||||||||
Select Medical Holdings Corp.A | 527,354 | 9,518,740 | |||||||||||||
Tivity Health, Inc.A | 393,712 | 14,153,946 | |||||||||||||
US Physical Therapy, Inc. | 10,000 | 912,500 | |||||||||||||
|
| ||||||||||||||
147,910,978 | |||||||||||||||
|
| ||||||||||||||
Health Care Technology - 0.24% | |||||||||||||||
Omnicell, Inc.A | 228,669 | 9,855,634 | |||||||||||||
Quality Systems, Inc.A | 506,599 | 6,803,624 | |||||||||||||
|
| ||||||||||||||
16,659,258 | |||||||||||||||
|
| ||||||||||||||
Life Sciences Tools & Services - 0.38% | |||||||||||||||
Cambrex Corp.A | 407,118 | 21,556,898 | |||||||||||||
Charles River Laboratories International, Inc.A | 49,713 | 5,179,597 | |||||||||||||
|
| ||||||||||||||
26,736,495 | |||||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 0.23% | |||||||||||||||
Innoviva, Inc.A | 298,188 | 4,323,726 | |||||||||||||
Supernus Pharmaceuticals, Inc.A | 245,664 | 11,521,642 | |||||||||||||
|
| ||||||||||||||
15,845,368 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 271,892,706 | ||||||||||||||
|
| ||||||||||||||
Industrials - 18.82% | |||||||||||||||
Aerospace & Defense - 1.79% | |||||||||||||||
AAR Corp. | 509,985 | 22,082,351 | |||||||||||||
Aerojet Rocketdyne Holdings, Inc.A | 412,207 | 11,517,064 | |||||||||||||
Aerovironment, Inc.A | 194,060 | 10,576,270 | |||||||||||||
Astronics Corp.A | 26,900 | 984,002 | |||||||||||||
Cubic Corp. | 80,101 | 4,946,237 | |||||||||||||
Embraer S.A., Sponsored ADR | 951,063 | 23,985,809 | |||||||||||||
Esterline Technologies Corp.A | 177,755 | 12,771,697 | |||||||||||||
KLX, Inc.A | 259,773 | 20,322,042 | |||||||||||||
Moog, Inc., Class AA | 61,117 | 5,009,760 | |||||||||||||
National Presto Industries, Inc.B | 10,547 | 1,009,875 | |||||||||||||
Triumph Group, Inc. | 301,699 | 7,135,181 | |||||||||||||
Vectrus, Inc.A | 31,951 | 1,150,236 | |||||||||||||
Wesco Aircraft Holdings, Inc.A | 248,294 | 2,507,769 | |||||||||||||
|
| ||||||||||||||
123,998,293 | |||||||||||||||
|
| ||||||||||||||
Air Freight & Logistics - 0.67% | |||||||||||||||
Air Transport Services Group, Inc.A | 1,039,453 | 21,038,529 | |||||||||||||
Atlas Air Worldwide Holdings, Inc.A | 71,315 | 4,521,371 | |||||||||||||
Hub Group, Inc., Class AA | 477,828 | 21,000,540 | |||||||||||||
|
| ||||||||||||||
46,560,440 | |||||||||||||||
|
| ||||||||||||||
Airlines - 0.18% | |||||||||||||||
Allegiant Travel Co. | 9,644 | 1,545,451 | |||||||||||||
Hawaiian Holdings, Inc. | 37,900 | 1,561,480 |
See accompanying notes
15
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Industrials - 18.82% (continued) | |||||||||||||||
Airlines - 0.18% (continued) | |||||||||||||||
SkyWest, Inc. | 146,266 | $ | 8,322,536 | ||||||||||||
Spirit Airlines, Inc.A | 25,306 | 903,930 | |||||||||||||
|
| ||||||||||||||
12,333,397 | |||||||||||||||
|
| ||||||||||||||
Building Products - 1.83% | |||||||||||||||
American Woodmark Corp.A | 3,800 | 312,360 | |||||||||||||
Apogee Enterprises, Inc. | 7,300 | 300,103 | |||||||||||||
Armstrong Flooring, Inc.A | 423,004 | 5,224,100 | |||||||||||||
Builders FirstSource, Inc.A | 441,900 | 8,055,837 | |||||||||||||
Caesarstone Ltd. | 69,143 | 1,275,688 | |||||||||||||
Gibraltar Industries, Inc.A | 502,738 | 17,671,241 | |||||||||||||
Insteel Industries, Inc. | 27,100 | 813,813 | |||||||||||||
Masonite International Corp.A | 463,800 | 28,152,660 | |||||||||||||
Simpson Manufacturing Co., Inc. | 538,353 | 29,437,142 | |||||||||||||
Trex Co., Inc.A | 188,472 | 19,578,471 | |||||||||||||
Universal Forest Products, Inc. | 507,509 | 16,179,387 | |||||||||||||
|
| ||||||||||||||
127,000,802 | |||||||||||||||
|
| ||||||||||||||
Commercial Services & Supplies - 1.98% | |||||||||||||||
ACCO Brands Corp. | 665,587 | 8,020,323 | |||||||||||||
Deluxe Corp. | 367,877 | 25,214,290 | |||||||||||||
Ennis, Inc. | 52,600 | 941,540 | |||||||||||||
Essendant, Inc. | 268,065 | 1,994,404 | |||||||||||||
Herman Miller, Inc. | 196,081 | 6,019,687 | |||||||||||||
InnerWorkings, Inc.A | 392,783 | 3,967,108 | |||||||||||||
Interface, Inc. | 343,997 | 7,567,934 | |||||||||||||
Knoll, Inc. | 896,402 | 17,094,386 | |||||||||||||
LSC Communications, Inc. | 1,302,375 | 22,765,515 | |||||||||||||
Matthews International Corp., Class A | 112,135 | 5,511,435 | |||||||||||||
Mobile Mini, Inc. | 568,269 | 23,867,298 | |||||||||||||
MSA Safety, Inc. | 86,797 | 7,537,452 | |||||||||||||
Quad/Graphics, Inc. | 73,900 | 1,826,069 | |||||||||||||
Steelcase, Inc., Class A | 278,669 | 3,692,364 | |||||||||||||
Team, Inc.A B | 64,175 | 1,087,766 | |||||||||||||
UniFirst Corp. | 4,600 | 738,760 | |||||||||||||
|
| ||||||||||||||
137,846,331 | |||||||||||||||
|
| ||||||||||||||
Construction & Engineering - 2.63% | |||||||||||||||
AECOMA | 416,578 | 14,346,946 | |||||||||||||
Aegion Corp.A | 231,666 | 5,256,502 | |||||||||||||
Comfort Systems USA, Inc. | 649,663 | 27,415,779 | |||||||||||||
Dycom Industries, Inc.A | 3,800 | 394,668 | |||||||||||||
EMCOR Group, Inc. | 307,488 | 22,628,042 | |||||||||||||
Granite Construction, Inc. | 129,965 | 6,807,567 | |||||||||||||
KBR, Inc. | 2,093,282 | 34,936,877 | |||||||||||||
MasTec, Inc.A | 287,422 | 12,646,568 | |||||||||||||
MYR Group, Inc.A | 46,279 | 1,388,370 | |||||||||||||
Primoris Services Corp. | 981,802 | 25,124,313 | |||||||||||||
Quanta Services, Inc.A | 288,361 | 9,371,732 | |||||||||||||
Tutor Perini Corp.A | 539,716 | 11,145,135 | |||||||||||||
Valmont Industries, Inc. | 76,658 | 10,893,102 | |||||||||||||
|
| ||||||||||||||
182,355,601 | |||||||||||||||
|
| ||||||||||||||
Electrical Equipment - 1.54% | |||||||||||||||
Atkore International Group, Inc.A | 179,400 | 3,187,938 | |||||||||||||
Encore Wire Corp. | 405,780 | 21,364,317 | |||||||||||||
EnerSys | 615,043 | 42,167,348 |
See accompanying notes
16
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Industrials - 18.82% (continued) | |||||||||||||||
Electrical Equipment - 1.54% (continued) | |||||||||||||||
Generac Holdings, Inc.A | 240,957 | $ | 10,845,475 | ||||||||||||
Preformed Line Products Co. | 15,465 | 1,040,021 | |||||||||||||
Regal Beloit Corp. | 257,578 | 18,339,554 | |||||||||||||
Sunrun, Inc.A B | 201,200 | 1,855,064 | |||||||||||||
Thermon Group Holdings, Inc.A | 101,106 | 2,304,206 | |||||||||||||
TPI Composites, Inc.A | 257,293 | 5,827,686 | |||||||||||||
|
| ||||||||||||||
106,931,609 | |||||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 0.06% | |||||||||||||||
Raven Industries, Inc. | 121,364 | 4,441,922 | |||||||||||||
|
| ||||||||||||||
Machinery - 4.50% | |||||||||||||||
Actuant Corp., Class A | 1,024,262 | 24,121,370 | |||||||||||||
Allison Transmission Holdings, Inc. | 234,900 | 9,158,751 | |||||||||||||
Altra Industrial Motion Corp. | 115,140 | 4,795,581 | |||||||||||||
Astec Industries, Inc. | 186,966 | 10,387,831 | |||||||||||||
Barnes Group, Inc. | 464,751 | 25,807,623 | |||||||||||||
Briggs & Stratton Corp. | 579,674 | 10,451,522 | |||||||||||||
Chart Industries, Inc.A | 352,739 | 20,014,411 | |||||||||||||
Colfax Corp.A | 585,000 | 18,140,850 | |||||||||||||
Columbus McKinnon Corp. | 99,593 | 3,573,397 | |||||||||||||
Commercial Vehicle Group, Inc.A | 141,817 | 951,592 | |||||||||||||
EnPro Industries, Inc. | 106,998 | 8,040,900 | |||||||||||||
Federal Signal Corp. | 1,430,425 | 30,983,005 | |||||||||||||
Global Brass & Copper Holdings, Inc. | 343,207 | 10,296,210 | |||||||||||||
Graham Corp. | 18,800 | 405,704 | |||||||||||||
Greenbrier Cos, Inc.B | 376,034 | 16,489,091 | |||||||||||||
Hillenbrand, Inc. | 218,359 | 10,120,940 | |||||||||||||
Hurco Cos, Inc. | 24,000 | 1,060,800 | |||||||||||||
Hyster-Yale Materials Handling, Inc. | 151,626 | 10,795,771 | |||||||||||||
Kennametal, Inc. | 126,251 | 4,601,849 | |||||||||||||
Lindsay Corp. | 129,426 | 11,371,368 | |||||||||||||
Luxfer Holdings PLC | 29,579 | 414,106 | |||||||||||||
Meritor, Inc.A | 321,031 | 6,250,474 | |||||||||||||
Miller Industries, Inc. | 259,542 | 6,423,665 | |||||||||||||
Mueller Industries, Inc. | 10,200 | 277,236 | |||||||||||||
Navistar International Corp.A | 106,166 | 3,695,638 | |||||||||||||
Park-Ohio Holdings Corp. | 80,437 | 3,048,562 | |||||||||||||
Sun Hydraulics Corp. | 113,086 | 5,492,587 | |||||||||||||
Tennant Co. | 56,107 | 4,151,918 | |||||||||||||
Terex Corp. | 674,039 | 24,615,904 | |||||||||||||
TriMas Corp.A | 204,474 | 5,541,245 | |||||||||||||
Trinity Industries, Inc. | 384,932 | 12,267,783 | |||||||||||||
Wabash National Corp. | 200,851 | 4,029,071 | |||||||||||||
Watts Water Technologies, Inc., Class A | 61,789 | 4,603,281 | |||||||||||||
|
| ||||||||||||||
312,380,036 | |||||||||||||||
|
| ||||||||||||||
Marine - 0.51% | |||||||||||||||
Kirby Corp.A | 116,228 | 9,914,248 | |||||||||||||
Matson, Inc. | 873,147 | 25,522,087 | |||||||||||||
|
| ||||||||||||||
35,436,335 | |||||||||||||||
|
| ||||||||||||||
Professional Services - 1.35% | |||||||||||||||
Barrett Business Services, Inc. | 21,200 | 1,855,424 | |||||||||||||
CBIZ, Inc.A | 22,700 | 422,220 | |||||||||||||
FTI Consulting, Inc.A | 32,500 | 1,898,000 | |||||||||||||
Heidrick & Struggles International, Inc. | 202,718 | 7,632,333 |
See accompanying notes
17
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Industrials - 18.82% (continued) | |||||||||||||||
Professional Services - 1.35% (continued) | |||||||||||||||
Hudson Global, Inc.A | 623,926 | $ | 1,172,981 | ||||||||||||
Huron Consulting Group, Inc.A | 161,007 | 6,029,712 | |||||||||||||
Insperity, Inc. | 6,400 | 513,600 | |||||||||||||
Kelly Services, Inc., Class A | 377,818 | 11,054,955 | |||||||||||||
Kforce, Inc. | 42,700 | 1,133,685 | |||||||||||||
Korn/Ferry International | 753,181 | 40,265,056 | |||||||||||||
Navigant Consulting, Inc.A | 319,063 | 6,824,757 | |||||||||||||
Resources Connection, Inc. | 238,972 | 3,739,912 | |||||||||||||
RPX Corp. | 360,250 | 3,901,507 | |||||||||||||
TrueBlue, Inc.A | 283,483 | 7,554,822 | |||||||||||||
|
| ||||||||||||||
93,998,964 | |||||||||||||||
|
| ||||||||||||||
Road & Rail - 0.46% | |||||||||||||||
ArcBest Corp. | 431,280 | 13,844,088 | |||||||||||||
Marten Transport Ltd. | 310,302 | 6,050,889 | |||||||||||||
Ryder System, Inc. | 99,600 | 6,716,028 | |||||||||||||
Werner Enterprises, Inc. | 161,430 | 5,537,049 | |||||||||||||
|
| ||||||||||||||
32,148,054 | |||||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 1.32% | |||||||||||||||
Air Lease Corp. | 291,302 | 12,144,380 | |||||||||||||
Aircastle Ltd. | 677,287 | 13,274,825 | |||||||||||||
Applied Industrial Technologies, Inc. | 104,450 | 6,679,578 | |||||||||||||
GATX Corp. | 108,056 | 7,049,573 | |||||||||||||
Kaman Corp. | 193,769 | 11,750,152 | |||||||||||||
MRC Global, Inc.A | 213,450 | 3,997,919 | |||||||||||||
Rush Enterprises, Inc., Class AA | 448,285 | 18,303,477 | |||||||||||||
Textainer Group Holdings Ltd.A | 55,661 | 957,369 | |||||||||||||
Titan Machinery, Inc.A | 74,191 | 1,433,370 | |||||||||||||
Triton International Ltd. | 227,600 | 7,057,876 | |||||||||||||
WESCO International, Inc.A | 149,100 | 8,878,905 | |||||||||||||
|
| ||||||||||||||
91,527,424 | |||||||||||||||
|
| ||||||||||||||
Total Industrials | 1,306,959,208 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 12.10% | |||||||||||||||
Communications Equipment - 1.79% | |||||||||||||||
ADTRAN, Inc. | 67,128 | 983,425 | |||||||||||||
ARRIS International PLCA | 1,804,592 | 48,723,984 | |||||||||||||
Ciena Corp.A | 726,940 | 18,718,705 | |||||||||||||
Comtech Telecommunications Corp. | 86,725 | 2,652,918 | |||||||||||||
Digi International, Inc.A | 150,688 | 1,732,912 | |||||||||||||
EchoStar Corp., Class AA | 111,027 | 5,833,358 | |||||||||||||
InterDigital, Inc. | 64,900 | 4,831,805 | |||||||||||||
NETGEAR, Inc.A | 282,344 | 15,613,623 | |||||||||||||
NetScout Systems, Inc.A | 393,505 | 10,683,661 | |||||||||||||
Plantronics, Inc. | 210,693 | 13,726,649 | |||||||||||||
Quantenna Communications, Inc.A | 85,500 | 1,083,285 | |||||||||||||
|
| ||||||||||||||
124,584,325 | |||||||||||||||
|
| ||||||||||||||
Electronic Equipment, Instruments & Components - 4.99% | |||||||||||||||
Anixter International, Inc.A | 84,595 | 4,982,646 | |||||||||||||
Avnet, Inc. | 338,387 | 13,274,922 | |||||||||||||
AVX Corp. | 522,522 | 7,712,425 | |||||||||||||
Belden, Inc. | 232,395 | 14,315,532 | |||||||||||||
Benchmark Electronics, Inc. | 144,248 | �� | 3,793,722 | ||||||||||||
Celestica, Inc.A | 538,363 | 6,191,175 |
See accompanying notes
18
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Information Technology - 12.10% (continued) | |||||||||||||||
Electronic Equipment, Instruments & Components - 4.99% (continued) | |||||||||||||||
Daktronics, Inc. | 176,810 | $ | 1,593,058 | ||||||||||||
ePlus, Inc.A | 4,500 | 359,325 | |||||||||||||
FabrinetA | 365,734 | 10,317,356 | |||||||||||||
FARO Technologies, Inc.A | 464,144 | 23,439,272 | |||||||||||||
II-VI, Inc.A | 1,297,905 | 49,450,180 | |||||||||||||
Insight Enterprises, Inc.A | 177,755 | 6,301,415 | |||||||||||||
Itron, Inc.A | 131,944 | 8,629,138 | |||||||||||||
Jabil, Inc. | 455,933 | 12,127,818 | |||||||||||||
KEMET Corp.A | 159,700 | 2,750,034 | |||||||||||||
Methode Electronics, Inc. | 356,242 | 14,214,056 | |||||||||||||
MTS Systems Corp. | 397,943 | 20,215,504 | |||||||||||||
Park Electrochemical Corp. | 57,205 | 974,201 | |||||||||||||
PC Connection, Inc. | 95,543 | 2,550,043 | |||||||||||||
Plexus Corp.A | 577,345 | 31,661,600 | |||||||||||||
Sanmina Corp.A | 227,044 | 6,697,798 | |||||||||||||
ScanSource, Inc.A | 253,377 | 8,690,831 | |||||||||||||
SYNNEX Corp. | 113,082 | 11,327,424 | |||||||||||||
Tech Data Corp.A | 238,653 | 18,197,291 | |||||||||||||
TTM Technologies, Inc.A | 302,584 | 4,218,021 | |||||||||||||
VeriFone Systems, Inc.A | 173,735 | 3,997,642 | |||||||||||||
Vishay Intertechnology, Inc. | 3,290,199 | 58,072,012 | |||||||||||||
|
| ||||||||||||||
346,054,441 | |||||||||||||||
|
| ||||||||||||||
Internet Software & Services - 0.42% | |||||||||||||||
Blucora, Inc.A | 366,400 | 9,526,400 | |||||||||||||
Cars.com, Inc.A | 35,078 | 999,021 | |||||||||||||
LivePerson, Inc.A | 309,358 | 5,197,214 | |||||||||||||
NIC, Inc. | 548,370 | 8,143,295 | |||||||||||||
Shutterstock, Inc.A | 17,200 | �� | 724,808 | ||||||||||||
Web.com Group, Inc.A | 246,445 | 4,583,877 | |||||||||||||
|
| ||||||||||||||
29,174,615 | |||||||||||||||
|
| ||||||||||||||
IT Services - 1.57% | |||||||||||||||
Acxiom Corp.A | 649,340 | 16,869,853 | |||||||||||||
CACI International, Inc., Class AA | 53,462 | 8,075,435 | |||||||||||||
Convergys Corp. | 454,273 | 10,611,817 | |||||||||||||
CSG Systems International, Inc. | 439,282 | 18,796,877 | |||||||||||||
Luxoft Holding, Inc.A | 14,800 | 597,180 | |||||||||||||
Science Applications International Corp. | 92,262 | 7,915,157 | |||||||||||||
Sykes Enterprises, Inc.A | 127,656 | 3,671,386 | |||||||||||||
Syntel, Inc.A | 292,300 | 8,441,624 | |||||||||||||
Teradata Corp.A | 367,280 | 15,029,098 | |||||||||||||
Travelport Worldwide Ltd. | 973,540 | 16,686,476 | |||||||||||||
Unisys Corp.A B | 207,146 | 2,320,035 | |||||||||||||
|
| ||||||||||||||
109,014,938 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 2.75% | |||||||||||||||
Advanced Energy Industries, Inc.A | 228,500 | 13,607,175 | |||||||||||||
Ambarella, Inc.A | 15,279 | 711,849 | |||||||||||||
Amkor Technology, Inc.A | 1,096,156 | 9,076,172 | |||||||||||||
Brooks Automation, Inc. | 1,630,614 | 40,569,676 | |||||||||||||
ChipMOS TECHNOLOGIES, Inc., ADRB | 127,463 | 1,755,166 | |||||||||||||
Cirrus Logic, Inc.A | 256,829 | 9,366,554 | |||||||||||||
Cohu, Inc. | 94,111 | 2,013,975 | |||||||||||||
Cree, Inc.A | 228,461 | 8,526,165 | |||||||||||||
Diodes, Inc.A | 1,422,005 | 40,598,243 | |||||||||||||
Ichor Holdings Ltd.A B | 30,024 | 663,530 |
See accompanying notes
19
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Information Technology - 12.10% (continued) | |||||||||||||||
Semiconductors & Semiconductor Equipment - 2.75% (continued) | |||||||||||||||
Kulicke & Soffa Industries, Inc.A | 280,759 | $ | 6,426,573 | ||||||||||||
Mellanox Technologies Ltd.A | 11,145 | 875,997 | |||||||||||||
PDF Solutions, Inc.A | 71,265 | 794,605 | |||||||||||||
Photronics, Inc.A | 2,836,414 | 21,698,567 | |||||||||||||
Rudolph Technologies, Inc.A | 13,300 | 337,155 | |||||||||||||
Semtech Corp.A | 217,504 | 8,547,907 | |||||||||||||
SMART Global Holdings, Inc.A | 119,100 | 4,662,765 | |||||||||||||
Synaptics, Inc.A | 33,886 | 1,474,719 | |||||||||||||
Veeco Instruments, Inc.A | 100,923 | 1,559,260 | |||||||||||||
Xcerra Corp.A | 1,334,340 | 16,118,827 | |||||||||||||
Xperi Corp. | 56,389 | 1,240,558 | |||||||||||||
|
| ||||||||||||||
190,625,438 | |||||||||||||||
|
| ||||||||||||||
Software - 0.40% | |||||||||||||||
CommVault Systems, Inc.A | 92,055 | 6,439,248 | |||||||||||||
MicroStrategy, Inc., Class AA | 7,700 | 981,442 | |||||||||||||
Monotype Imaging Holdings, Inc. | 28,700 | 635,705 | |||||||||||||
Synchronoss Technologies, Inc.A | 110,245 | 1,234,744 | |||||||||||||
Verint Systems, Inc.A | 444,552 | 18,715,639 | |||||||||||||
|
| ||||||||||||||
28,006,778 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 0.18% | |||||||||||||||
3D Systems Corp.A B | 143,193 | 1,437,658 | |||||||||||||
Cray, Inc.A | 437,492 | 10,434,184 | |||||||||||||
Super Micro Computer, Inc.A | 34,200 | 605,340 | |||||||||||||
|
| ||||||||||||||
12,477,182 | |||||||||||||||
|
| ||||||||||||||
Total Information Technology | 839,937,717 | ||||||||||||||
|
| ||||||||||||||
Materials - 5.60% | |||||||||||||||
Chemicals - 1.84% | |||||||||||||||
American Vanguard Corp. | 74,900 | 1,614,095 | |||||||||||||
Cabot Corp. | 409,838 | 22,893,551 | |||||||||||||
Core Molding Technologies, Inc. | 17,596 | 272,738 | |||||||||||||
FutureFuel Corp. | 49,630 | 580,671 | |||||||||||||
GCP Applied Technologies, Inc.A | 24,200 | 693,330 | |||||||||||||
Hawkins, Inc. | 19,200 | 624,000 | |||||||||||||
HB Fuller Co. | 112,664 | 5,573,488 | |||||||||||||
Innospec, Inc. | 83,678 | 6,083,391 | |||||||||||||
Koppers Holdings, Inc.A | 104,558 | 4,579,640 | |||||||||||||
Kraton Corp.A | 240,708 | 10,993,134 | |||||||||||||
Kronos Worldwide, Inc. | 215,515 | 4,965,466 | |||||||||||||
LSB Industries, Inc.A B | 124,315 | 687,462 | |||||||||||||
Minerals Technologies, Inc. | 87,988 | 6,075,571 | |||||||||||||
PolyOne Corp. | 721,880 | 30,210,678 | |||||||||||||
Rayonier Advanced Materials, Inc. | 289,191 | 6,188,687 | |||||||||||||
Stepan Co. | 152,460 | 10,720,987 | |||||||||||||
Trecora ResourcesA | 29,700 | 384,615 | |||||||||||||
Trinseo S.A. | 204,306 | 14,904,123 | |||||||||||||
|
| ||||||||||||||
128,045,627 | |||||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.35% | |||||||||||||||
Greif, Inc., Class A | 79,951 | 4,678,732 | |||||||||||||
Owens-Illinois, Inc.A | 975,493 | 19,831,773 | |||||||||||||
|
| ||||||||||||||
24,510,505 | |||||||||||||||
|
| ||||||||||||||
Metals & Mining - 2.52% | |||||||||||||||
Allegheny Technologies, Inc.A B | 1,589,900 | 42,243,643 |
See accompanying notes
20
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Materials - 5.60% (continued) | |||||||||||||||
Metals & Mining - 2.52% (continued) | |||||||||||||||
Carpenter Technology Corp. | 602,944 | $ | 32,112,798 | ||||||||||||
Cleveland-Cliffs, Inc.A | 836,500 | 6,206,830 | |||||||||||||
Coeur Mining, Inc.A | 581,944 | 4,405,316 | |||||||||||||
Commercial Metals Co. | 379,206 | 7,967,118 | |||||||||||||
Compass Minerals International, Inc.B | 23,116 | 1,555,707 | |||||||||||||
Ferroglobe PLCA | 2,562,970 | 28,961,561 | |||||||||||||
Ferroglobe Representation & Warranty InsuranceC | 2,123,070 | - | |||||||||||||
Haynes International, Inc. | 64,053 | 2,678,056 | |||||||||||||
Hecla Mining Co. | 2,037,791 | 7,804,740 | |||||||||||||
Hudbay Minerals, Inc. | 376,394 | 2,615,938 | |||||||||||||
Materion Corp. | 317,451 | 16,110,638 | |||||||||||||
Pan American Silver Corp. | 393,267 | 6,339,464 | |||||||||||||
Real Industry, Inc.A | 722,432 | 278,136 | |||||||||||||
Schnitzer Steel Industries, Inc., Class A | 238,000 | 7,009,100 | |||||||||||||
SunCoke Energy Partners LP | 38,700 | 594,045 | |||||||||||||
Worthington Industries, Inc. | 173,836 | 7,740,917 | |||||||||||||
|
| ||||||||||||||
174,624,007 | |||||||||||||||
|
| ||||||||||||||
Paper & Forest Products - 0.89% | |||||||||||||||
Boise Cascade Co. | 30,120 | 1,252,992 | |||||||||||||
Clearwater Paper Corp.A | 19,484 | 460,797 | |||||||||||||
Domtar Corp. | 413,743 | 18,163,318 | |||||||||||||
Louisiana-Pacific Corp. | 989,990 | 28,046,417 | |||||||||||||
Mercer International, Inc. | 257,361 | 3,448,637 | |||||||||||||
PH Glatfelter Co. | 265,339 | 5,542,932 | |||||||||||||
Schweitzer-Mauduit International, Inc. | 86,585 | 3,379,412 | |||||||||||||
Verso Corp., Class AA | 76,618 | 1,383,721 | |||||||||||||
|
| ||||||||||||||
61,678,226 | |||||||||||||||
|
| ||||||||||||||
Total Materials | 388,858,365 | ||||||||||||||
|
| ||||||||||||||
Real Estate - 3.64% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 3.59% | |||||||||||||||
Agree Realty Corp. | 201,976 | 9,872,587 | |||||||||||||
Ashford Hospitality Trust, Inc. | 848,153 | 5,835,293 | |||||||||||||
Brandywine Realty Trust | 468,396 | 7,545,859 | |||||||||||||
CoreCivic, Inc. | �� | 608,701 | 12,271,412 | ||||||||||||
Cousins Properties, Inc. | 836,804 | 7,439,188 | |||||||||||||
Education Realty Trust, Inc. | 214,536 | 7,060,380 | |||||||||||||
Front Yard Residential Corp. | 137,136 | 1,346,675 | |||||||||||||
GEO Group, Inc. | 1,236,542 | 27,822,195 | |||||||||||||
Granite Real Estate Investment Trust | 596,260 | 23,558,233 | |||||||||||||
Hospitality Properties Trust | 108,731 | 2,705,227 | |||||||||||||
LaSalle Hotel Properties | 440,827 | 13,035,254 | |||||||||||||
Lexington Realty Trust | 1,579,269 | 12,697,323 | |||||||||||||
Medical Properties Trust, Inc. | 540,332 | 6,905,443 | |||||||||||||
New York REIT, Inc.B | 112,311 | 2,428,164 | |||||||||||||
Outfront Media, Inc. | 542,721 | 10,176,019 | |||||||||||||
Pebblebrook Hotel Trust | 360,369 | 12,609,311 | |||||||||||||
Preferred Apartment Communities, Inc., Class A, | 523,930 | 7,707,010 | |||||||||||||
Ramco-Gershenson Properties Trust | 422,455 | 5,048,337 | |||||||||||||
Retail Properties of America, Inc., Class A, | 744,839 | 8,595,442 | |||||||||||||
RLJ Lodging Trust | 284,472 | 5,908,483 | |||||||||||||
Ryman Hospitality Properties, Inc. | 125,994 | 9,875,410 | |||||||||||||
Select Income REIT | 462,695 | 8,772,697 | |||||||||||||
Seritage Growth PropertiesB | 716,559 | 25,488,004 | |||||||||||||
Sunstone Hotel Investors, Inc. | 639,232 | 9,972,019 |
See accompanying notes
21
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.96% (continued) | |||||||||||||||
Real Estate - 3.64% (continued) | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 3.59% (continued) | |||||||||||||||
Urban Edge Properties | 219,933 | $ | 4,524,022 | ||||||||||||
|
| ||||||||||||||
249,199,987 | |||||||||||||||
|
| ||||||||||||||
Real Estate Management & Development - 0.05% | |||||||||||||||
Forestar Group, Inc.A B | 110,086 | 2,399,875 | |||||||||||||
Tejon Ranch Co.A | 50,412 | 1,226,524 | |||||||||||||
|
| ||||||||||||||
3,626,399 | |||||||||||||||
|
| ||||||||||||||
Total Real Estate | 252,826,386 | ||||||||||||||
|
| ||||||||||||||
Telecommunication Services - 0.19% | |||||||||||||||
Diversified Telecommunication Services - 0.06% | |||||||||||||||
ATN International, Inc. | 22,432 | 1,188,896 | |||||||||||||
Iridium Communications, Inc.A B | 276,385 | 3,288,981 | |||||||||||||
|
| ||||||||||||||
4,477,877 | |||||||||||||||
|
| ||||||||||||||
Wireless Telecommunication Services - 0.13% | |||||||||||||||
Spok Holdings, Inc. | 93,901 | 1,399,125 | |||||||||||||
Telephone & Data Systems, Inc. | 265,654 | 7,260,324 | |||||||||||||
|
| ||||||||||||||
8,659,449 | |||||||||||||||
|
| ||||||||||||||
Total Telecommunication Services | 13,137,326 | ||||||||||||||
|
| ||||||||||||||
Utilities - 2.32% | |||||||||||||||
Electric Utilities - 1.25% | |||||||||||||||
ALLETE, Inc. | 101,938 | 7,789,083 | |||||||||||||
El Paso Electric Co. | 11,900 | 607,495 | |||||||||||||
Hawaiian Electric Industries, Inc. | 310,867 | 10,783,976 | |||||||||||||
IDACORP, Inc. | 221,125 | 20,564,625 | |||||||||||||
Otter Tail Corp. | 7,500 | 328,875 | |||||||||||||
PNM Resources, Inc. | 36,368 | 1,441,991 | |||||||||||||
Portland General Electric Co. | 1,072,991 | 45,580,658 | |||||||||||||
|
| ||||||||||||||
87,096,703 | |||||||||||||||
|
| ||||||||||||||
Gas Utilities - 0.77% | |||||||||||||||
Chesapeake Utilities Corp. | 155,487 | 11,817,012 | |||||||||||||
National Fuel Gas Co. | 237,063 | 12,173,185 | |||||||||||||
Northwest Natural Gas Co. | 18,865 | 1,156,425 | |||||||||||||
South Jersey Industries, Inc.B | 322,187 | 9,955,578 | |||||||||||||
Southwest Gas Holdings, Inc. | 235,654 | 17,200,386 | |||||||||||||
Star Group LP | 68,124 | 662,165 | |||||||||||||
Suburban Propane Partners LP | 13,700 | 316,881 | |||||||||||||
|
| ||||||||||||||
53,281,632 | |||||||||||||||
|
| ||||||||||||||
Independent Power & Renewable Electricity Producers - 0.14% | |||||||||||||||
NRG Yield, Inc., Class A | 95,748 | 1,686,122 | |||||||||||||
NRG Yield, Inc., Class C | 467,360 | 8,319,008 | |||||||||||||
|
| ||||||||||||||
10,005,130 | |||||||||||||||
|
| ||||||||||||||
Multi-Utilities - 0.16% | |||||||||||||||
Avista Corp. | 28,904 | 1,498,961 | |||||||||||||
NorthWestern Corp. | 165,322 | 9,082,791 | |||||||||||||
Unitil Corp. | 6,800 | 330,412 | |||||||||||||
|
| ||||||||||||||
10,912,164 | |||||||||||||||
|
| ||||||||||||||
Total Utilities | 161,295,629 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $5,543,741,090) | 6,662,038,768 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
22
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
EXCHANGE-TRADED INSTRUMENTS - 0.22% (Cost $15,434,928) | |||||||||||||||
Exchange-Traded Funds - 0.22% | |||||||||||||||
iShares Russell 2000 Value ETFB | 123,567 | $ | 15,338,372 | ||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 3.61% (Cost $250,178,951) | |||||||||||||||
Investment Companies - 3.61% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%D E | 250,178,951 | 250,178,951 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 2.61% (Cost $181,319,674) | |||||||||||||||
Investment Companies - 2.61% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%D E | 181,319,674 | 181,319,674 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 102.40% (Cost $5,990,674,643) | 7,108,875,765 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (2.40%) | (166,335,538 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 6,942,540,227 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B All or a portion of this security is on loan at April 30, 2018.
C 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.
D The Fund is affiliated by having the same investment advisor.
E 7-day yield.
ADR - American Depositary Receipt.
ETF - Exchange-Traded Fund.
LLC - Limited Liability Company.
LP - Limited Partnership.
MLP – Master Limited Partnership.
PLC - Public Limited Company.
Futures Contracts Open on April 30, 2018: | ||||||||||||||||
Long Futures | ||||||||||||||||
Equity Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
Russell 2000 E-Mini Index Futures | 3,112 | June 2018 | $ | 245,220,635 | $ | 240,215,280 | $ | (5,005,355 | ) | |||||||
|
|
|
|
|
| |||||||||||
$ | 245,220,635 | $ | 240,215,280 | $ | (5,005,355 | ) | ||||||||||
|
|
|
|
|
|
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2018, the investments were classified as described below:
Small Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 6,662,038,768 | $ | - | $ | 0 | (1) | $ | 6,662,038,768 | |||||||||||||||||||
Exchange-Traded Instruments | 15,338,372 | - | - | 15,338,372 | ||||||||||||||||||||||||
Short-Term Investments | 250,178,951 | - | - | 250,178,951 | ||||||||||||||||||||||||
Securities Lending Collateral | 181,319,674 | - | - | 181,319,674 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 7,108,875,765 | $ | - | $ | - | $ | 7,108,875,765 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||||||
Futures Contracts | $ | (5,005,355 | ) | $ | - | $ | - | $ | (5,005,355 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Liabilities | $ | (5,005,355 | ) | $ | - | $ | - | $ | (5,005,355 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
(1) Investment held in the Fund’s Portfolio with $0 fair value.
See accompanying notes
23
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
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 April 30, 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 | 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 4/30/2018 | Change in Unrealized Appreciation (Depreciation) at Period end** | ||||||||||||||||||||||||
Common Stocks | $0(1) | $ - | $ - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 0(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 Statement of Operations. |
(1) | Investment held in the Fund’s Portfolio with $0 fair value. |
The common stock, classified as Level 3, is beneficial interest units in a representation and warranty insurance trust. The shares have been fair valued at $0 due to limited market transparency.
See accompanying notes
24
American Beacon Small Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2018 (Unaudited)
Assets: |
| |||
Investments in unaffiliated securities, at fair value†§ | $ | 6,677,377,140 | ||
Investments in affiliated securities, at fair value‡ | 431,498,625 | |||
Deposit with brokers for futures contracts | 13,190,598 | |||
Dividends and interest receivable | 2,703,803 | |||
Receivable for investments sold | 14,103,131 | |||
Receivable for fund shares sold | 6,304,276 | |||
Prepaid expenses | 93,816 | |||
|
| |||
Total assets | 7,145,271,389 | |||
|
| |||
Liabilities: |
| |||
Payable for investments purchased | 3,515,774 | |||
Payable for fund shares redeemed | 7,765,788 | |||
Payable for variation margin from open futures contracts (Note 5) | 4,998,416 | |||
Payable upon return of securities loaned (Note 9)§ | 181,319,674 | |||
Management and sub-advisory fees payable (Note 2) | 4,285,411 | |||
Service fees payable (Note 2) | 211,022 | |||
Transfer agent fees payable (Note 2) | 151,937 | |||
Custody and fund accounting fees payable | 362,962 | |||
Professional fees payable | 41,273 | |||
Trustee fees payable (Note 2) | 8,852 | |||
Payable for prospectus and shareholder reports | 27,715 | |||
Other liabilities | 42,338 | |||
|
| |||
Total liabilities | 202,731,162 | |||
|
| |||
Net assets | $ | 6,942,540,227 | ||
|
| |||
Analysis of net assets: |
| |||
Paid-in-capital | $ | 5,540,949,790 | ||
Undistributed net investment income | 8,047,964 | |||
Accumulated net realized gain | 280,346,549 | |||
Unrealized appreciation of investments in unaffiliated securitiesA | 1,118,201,122 | |||
Unrealized appreciation of foreign currency transactions | 157 | |||
Unrealized (depreciation) of futures contracts | (5,005,355 | ) | ||
|
| |||
Net assets | $ | 6,942,540,227 | ||
|
| |||
Shares outstanding at no par value (unlimited shares authorized): |
| |||
Institutional Class | 192,476,397 | |||
|
| |||
Y Class | 14,038,965 | |||
|
| |||
Investor Class | 22,539,929 | |||
|
| |||
Advisor Class | 3,590,348 | |||
|
| |||
A Class | 2,847,922 | |||
|
| |||
C Class | 592,127 | |||
|
| |||
R6 Class | 21,464,664 | |||
|
| |||
Net assets: |
| |||
Institutional Class | $ | 5,217,419,465 | ||
|
| |||
Y Class | $ | 375,345,589 | ||
|
| |||
Investor Class | $ | 588,093,536 | ||
|
| |||
Advisor Class | $ | 92,439,111 | ||
|
| |||
A Class | $ | 72,961,773 | ||
|
| |||
C Class | $ | 14,569,083 | ||
|
| |||
R6 Class | $ | 581,711,670 | ||
|
| |||
Net asset value, offering and redemption price per share: |
| |||
Institutional Class | $ | 27.11 | ||
|
| |||
Y Class | $ | 26.74 | ||
|
| |||
Investor Class | $ | 26.09 | ||
|
| |||
Advisor Class | $ | 25.75 | ||
|
| |||
A Class | $ | 25.62 | ||
|
| |||
A Class (offering price) | $ | 27.18 | ||
|
| |||
C Class | $ | 24.60 | ||
|
| |||
R6 Class | $ | 27.10 | ||
|
| |||
† Cost of investments in unaffiliated securities | $ | 5,559,176,018 | ||
‡ Cost of investments in affiliated securities | $ | 431,498,625 | ||
§ Fair value of securities on loan | $ | 173,944,582 | ||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
25
American Beacon Small Cap Value FundSM
Statement of Operations
For the period ended April 30, 2018 (Unaudited)
Investment income: |
| |||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 50,814,943 | ||
Dividend income from affiliated securities | 1,544,857 | |||
Income derived from securities lending (Note 9) | 1,419,371 | |||
|
| |||
Total investment income | 53,779,171 | |||
|
| |||
Expenses: |
| |||
Management and sub-advisory fees (Note 2) | 25,952,479 | |||
Transfer agent fees: | ||||
Institutional Class (Note 2) | 786,877 | |||
Y Class (Note 2) | 169,697 | |||
Investor Class | 15,776 | |||
Advisor Class | 3,553 | |||
A Class | 3,271 | |||
C Class | 1,382 | |||
R6 Class | 1,898 | |||
Custody and fund accounting fees | 359,190 | |||
Professional fees | 151,093 | |||
Registration fees and expenses | 87,253 | |||
Service fees (Note 2): | ||||
Investor Class | 1,035,407 | |||
Advisor Class | 120,109 | |||
A Class | 49,831 | |||
C ClassA | (11,881 | ) | ||
Distribution fees (Note 2): | ||||
Advisor Class | 120,157 | |||
A Class | 90,098 | |||
C Class | 75,013 | |||
Prospectus and shareholder report expenses | 178,693 | |||
Trustee fees (Note 2) | 215,736 | |||
Other expenses | 190,246 | |||
|
| |||
Total expenses | 29,595,878 | |||
|
| |||
Net investment income | 24,183,293 | |||
|
| |||
Realized and unrealized gain (loss) from investments: |
| |||
Net realized gain (loss) from: | ||||
Investments in unaffiliated securitiesB | 324,568,696 | |||
Commission recapture (Note 1) | 8,906 | |||
Foreign currency transactions | (10,817 | ) | ||
Futures contracts | 11,406,617 | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investments in unaffiliated securitiesC | (306,241,714 | ) | ||
Foreign currency transactions | 596 | |||
Futures contracts | (11,566,695 | ) | ||
|
| |||
Net gain from investments | 18,165,589 | |||
|
| |||
Net increase in net assets resulting from operations | $ | 42,348,882 | ||
|
| |||
† Foreign taxes | $ | 220,523 | ||
A The Manager voluntarily reimbursed service fees. | ||||
B The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities. |
| |||
C The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
26
American Beacon Small Cap Value FundSM
Statement of Changes in Net Assets
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||
(unaudited) | ||||||||||||
Increase (decrease) in net assets: |
| |||||||||||
Operations: |
| |||||||||||
Net investment income | $ | 24,183,293 | $ | 35,906,655 | ||||||||
Net realized gain from investments in unaffiliated securities, commission recapture, foreign currency transactions, and futures contracts | 335,973,402 | 579,320,266 | ||||||||||
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions, and futures contracts | (317,807,813 | ) | 807,767,623 | |||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 42,348,882 | 1,422,994,544 | ||||||||||
|
|
|
| |||||||||
Distributions to shareholders: |
| |||||||||||
Net investment income: | ||||||||||||
Institutional Class | (28,167,910 | ) | (44,712,589 | ) | ||||||||
Y Class | (1,779,257 | ) | (2,820,317 | ) | ||||||||
Investor Class | (1,528,820 | ) | (3,777,116 | ) | ||||||||
Advisor Class | (46,233 | ) | (514,722 | ) | ||||||||
A Class | (145,351 | ) | (310,111 | ) | ||||||||
R6 Class | (2,178,923 | ) | – | |||||||||
Net realized gain from investments: | ||||||||||||
Institutional Class | (455,822,949 | ) | (122,225,000 | ) | ||||||||
Y Class | (32,696,634 | ) | (8,295,210 | ) | ||||||||
Investor Class | (57,157,688 | ) | (15,742,672 | ) | ||||||||
Advisor Class | (8,668,613 | ) | (2,933,912 | ) | ||||||||
A Class | (6,270,522 | ) | (1,474,164 | ) | ||||||||
C Class | (1,398,032 | ) | (344,117 | ) | ||||||||
R6 Class | (33,334,855 | ) | – | |||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (629,195,787 | ) | (203,149,930 | ) | ||||||||
|
|
|
| |||||||||
Capital share transactions (Note 11): |
| |||||||||||
Proceeds from sales of shares | 980,889,022 | 2,041,595,238 | ||||||||||
Reinvestment of dividends and distributions | 608,543,857 | 196,388,754 | ||||||||||
Cost of shares redeemed | (1,100,414,442 | ) | (2,233,807,450 | ) | ||||||||
|
|
|
| |||||||||
Net increase in net assets from capital share transactions | 489,018,437 | 4,176,542 | ||||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets | (97,828,468 | ) | 1,224,021,156 | |||||||||
|
|
|
| |||||||||
Net assets: |
| |||||||||||
Beginning of period | 7,040,368,695 | 5,816,347,539 | ||||||||||
|
|
|
| |||||||||
End of period * | $ | 6,942,540,227 | $ | 7,040,368,695 | ||||||||
|
|
|
| |||||||||
*Includes undistributed net investment income | $ | 8,047,964 | $ | 17,711,165 | ||||||||
|
|
|
|
See accompanying notes
27
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”), is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940 (the “Act”), as amended, as a diversified, open-end management investment company. As of April 30, 2018, the Trust consists of thirty-three active series, one of which is presented in this filing: American Beacon Small Cap Value 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 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary, such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 | Large institutional retirement plan investors - sold through retirement plan sponsors. | None |
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.
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 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”).
28
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Security Transactions and Investment Income
Security transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.
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. Realized gains (losses) from securities sold are determined on the basis of specific lot identification.
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 Fund may designate earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If a Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain in the Fund’s Statement of Operations, if applicable.
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.
29
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 $15 billion | 0.35 | % | ||
Next $15 billion | 0.325 | % | ||
Over $30 billion | 0.30 | % |
The Trust, on behalf of the Fund, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Brandywine Global Investment Management, LLC; Foundry Partners, LLC; Hillcrest Asset Management, LLC; Hotchkis and Wiley Capital Management, LLC; and BNY Mellon Asset Management North America Corporation (“Sub-Advisors”) 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.
The Management and Sub-Advisory Fees paid by the Fund for the period ended April 30, 2018 were as follows:
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 12,413,066 | ||||||||
Sub-Advisor Fees | 0.40 | % | 13,539,413 | |||||||||
|
|
|
| |||||||||
Total | 0.75 | % | $ | 25,952,479 | ||||||||
|
|
|
|
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the period ended April 30, 2018, the Manager received securities lending fees of $151,657 for the securities lending activities of the Fund.
Distribution Plans
The Fund, except for the Advisor, A, and C Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the management 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 Advisor, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.
30
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Service Plans
The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor, Advisor, A, and C Classes of the Fund. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Fund.
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 and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. 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 the Board approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the period ended April 30, 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 | |||
Small Cap Value | $ | 848,118 |
As of April 30, 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 | |||
Small Cap Value | $ | 97,529 |
Brokerage Commissions
Affiliated entities of a sub-advisor to the Fund received net commissions on purchases and sales of the Fund’s portfolio securities totaling $62,578 for the period ended April 30, 2018.
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 period ended April 30, 2018, the Manager earned fees on the Fund’s direct investments and securities lending collateral investments in the USG Select Fund as shown below:
Fund | Direct Investments in USG Select Fund | Securities Lending Collateral in USG Select Fund | Total | |||||||||
Small Cap Value | $ | 120,492 | $ | 103,715 | $ | 224,207 |
31
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 Fund 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 period ended April 30, 2018, the Fund did not utilize the credit facility.
Expense Reimbursement Plan
The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of 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. During the period ended April 30, 2018 there were no waived fees, expenses reimbursed, or recouped expenses.
The Distributor
Effective March 1, 2018, Resolute Investment Distributors, Inc. (“RID” or “Distributor”) replaced Foreside Fund Services, LLC (“Foreside”) as the Fund(s)’ distributor and principal underwriter of the Fund’s shares.
RID is a registered broker-dealer and is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Distributor is affiliated with the Manager through common ownership. Under a Distribution Agreement with the Trust, the Distributor acts as the distributor and principal underwriter of the Trust in connection with the continuous offering of shares of the Fund. The Distributor continually distributes shares of the Fund on a best efforts basis. The Distributor has no obligation to sell any specific quantity of the Fund’s shares. Pursuant to the Distribution Agreement, to the extent applicable, the Distributor receives, and may re-allow to broker-dealers, all or a portion of the sales charge paid by the purchasers of A Class and C Class shares. For A Class and C Class shares, the Distributor receives commission revenue consisting of the portion of A Class and C Class sales charge remaining after the allowances by the Distributor to the broker-dealers. The Distributor retains any portion of the commission fees that are not paid to the broker-dealers for use solely to pay distribution related expenses.
Prior to March 1, 2018, Foreside served as the distributor and principal underwriter of the Fund’s shares. Pursuant to a Sub-Administration Agreement between Foreside and the Manager in effect through February 28, 2018, Foreside received a fee from the Manager for providing administrative services in connection with the marketing and distribution of shares of the Trust, including the registration of Manager employees as registered representatives of Foreside to facilitate distribution of Fund shares. Foreside also received a fee from the Manager under a Marketing Agreement pursuant to which Foreside provided services in connection with the marketing of a Fund to institutional investors. Pursuant to the Distribution Agreement with the Trust in effect through February 28, 2018, Foreside received, and may have re-allowed to broker-dealers, all or a portion of the sales
32
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
charge paid by the purchasers of A and C Class shares. For A and C Class shares, Foreside received commission revenues consisting of the portion of A and C Class sales charge remaining after the allowances by Foreside to the broker dealers. Foreside retained any portion of the commission fees that were not paid to the broker-dealers for use solely to pay distribution related expenses.
Sales Commissions
The Fund’s Distributor, formerly Foreside, may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. During the period ended February 28, 2018, Foreside collected $3,562 for the Fund from the sale of Class A Shares. During the period March 1, 2018 through April 30, 2018, RID collected $391 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 period ended April 30, 2018, there were no CDSC fees collected for Class A Shares of the Fund.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the 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 period ended February 28, 2018, Foreside collected CDSC fees of $229 for Class C Shares of the Fund. During the period March 1, 2018 through April 30, 2018, RID collected $187 for Class C Shares of the Fund.
Trustee Fees and Expenses
As compensation for their service to the Trust, American Beacon Select Funds, American Beacon Institutional Funds Trust, and American Beacon Sound Point Enhanced Income Fund, 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
The price of the Fund’s shares is based on the Fund’s Net Asset Value (“NAV”). The NAV of the Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to the Fund or class, by the total number of shares outstanding of the Fund or class.
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.
33
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Investments in open-end mutual funds are valued at the closing NAV per share of the mutual fund on the day of valuation.
Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Board.
Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, the Fund is required to deposit with 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 Fund. Gains or losses are recognized, but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.
Other investments for which the above valuation procedures are inappropriate or are deemed not to reflect fair value, are stated at fair value as determined in good faith by the Manager’s Valuation Committee, pursuant to procedures established by the Board.
Valuation Inputs
Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1 | - | Quoted prices in active markets for identical securities. | ||
Level 2 | - | Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. | ||
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, 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.
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.
34
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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
American Depositary Receipts
American Depositary Receipts (“ADRs”) are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers, and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Fund’s possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Fund may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in
35
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or over-the-counter (“OTC”). OTC stock may be less liquid than exchange-traded stock.
Other Investment Company Securities and Other Exchange-Traded Products
The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, unit investment trusts, and other investment companies of the Trust. The Fund may invest in investment company securities advised by the Manager or 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 Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
Real Estate Investment Trusts
The Fund may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Fund re-characterizes distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information, which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year.
5. Financial Derivative Instruments
The Fund may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.
Futures Contracts
Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Fund may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities or that the counterparty will fail to perform its obligations.
Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.
36
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
During the period ended April 30, 2018, the Fund entered into future contracts primarily for exposing cash to markets.
The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.
Average Futures Contracts Outstanding | ||||
Fund | Period Ended April 30, 2018 | |||
Small Cap Value | 2,806 |
The following is a summary of the fair valuations of the Fund’s derivative instruments categorized by risk exposure(1):
Fair values of financial instruments on the Statement of Assets and Liabilities as of April 30, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Payable for variation margin from open futures contracts(2) | $ | – | $ | – | $ | – | $ | – | $ | (5,005,355 | ) | $ | (5,005,355 | ) | |||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statement of Operations as of April 30, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized gain (loss) from derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | 11,406,617 | $ | 11,406,617 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | (11,566,695 | ) | $ | (11,566,695 | ) |
(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 Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
6. Principal Risks
Investing in the Fund may involve certain risks including, but not limited to, those described below.
Equity Investment Risk
Equity securities are subject to market risk. The Fund’s investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional 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 have an effect on the convertible securities’ investment
37
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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
Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity and greater volatility, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets.
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
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.
Multiple Sub-Advisor Risk
The Manager may allocate the Fund’s assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Fund’s assets. To a significant extent, the Fund’s performance will depend on
38
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
the success of the Manager in allocating the Fund’s assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-adviser manages its allocated portion of the Fund independently from another sub-adviser, the same security may be held in different portions of the Fund, or may be acquired for one portion of the Fund at a time when a sub-adviser to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Fund’s holdings. Similarly, under some market conditions, one sub-adviser may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-adviser believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Fund. Because each sub-adviser directs the trading for its own portion of the Fund, and does not aggregate its transactions with those of the other sub-advisors, the Fund may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Fund’s assets among the Fund’s sub-advisors in a manner that it believes is consistent with achieving the Fund’s investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Fund’s assets among sub-advisors.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including ETFs and money market funds that are advised by the Manager. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies. 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.
Securities Lending Risk
To the extent the Fund lends its securities, it may be subject to the following risks; i) borrowers of the Fund’s securities typically provide collateral in the form of cash that is reinvested in securities, ii) the securities in which the collateral is invested may not perform sufficiently to cover the return collateral payments owed to borrowers, iii) delays may occur in the recovery of securities from borrowers, which could interfere with the Fund’s ability to vote proxies or to settle transactions, and iv) there is the risk of possible loss of rights in the collateral should the borrower fail financially.
Sector Risk
Sector risk is the risk associated with a Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase.
To the extent a Fund invests in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than investment companies investing more broadly.
Offsetting Assets and Liabilities
The Fund is a party to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Fund employs multiple money managers and counterparties and has elected not to offset qualifying financial and derivative instruments on the Statement of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net
39
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2018.
Offsetting of Financial and Derivative Assets as of April 30, 2018: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | - | $ | 5,005,355 | ||||||||
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|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | - | $ | 5,005,355 | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | - | $ | (5,005,355 | ) | |||||||
|
|
|
|
Remaining Contractual Maturity of the Agreements As of April 30, 2018 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 181,319,674 | $ | - | $ | - | $ | - | $ | 181,319,674 | ||||||||||||||||||||||||||
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|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total Borrowings | $ | 181,319,674 | $ | - | $ | - | $ | - | $ | 181,319,674 | ||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions |
| $ | 181,319,674 | |||||||||||||||||||||||||||||||||
|
|
7. Federal Income and Excise Taxes
It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make 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 October 31, 2017 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.
As of April 30, 2018 the tax cost for the Fund and their respective gross unrealized appreciation (depreciation) were as follows:
Fund | Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Small Cap Value | $ | 6,056,383,241 | $ | 1,301,263,321 | $ | (248,770,640 | ) | $ | 1,052,492,681 |
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.
For the period ended October 31, 2017, the Fund did not have any capital loss carryforwards.
40
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 2018 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Sales (non-U.S. Government Securities) | ||||||
Small Cap Value | $ | 2,236,025,010 | $ | 2,397,642,318 |
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2018 were as follows:
Fund | Type of Transaction | October 31, 2017 Shares/Fair Value | Purchases | Sales | April 30, 2018 Shares/Fair Value | Dividend Income | ||||||||||||||||||||||||||||||||||||
Small Cap Value | Direct | $ | 209,651,676 | $ | 935,730,904 | $ | 895,203,629 | $ | 250,178,951 | $ | 1,544,857 | |||||||||||||||||||||||||||||||
Small Cap Value | Securities Lending | 236,088,074 | 498,117,796 | 552,886,196 | 181,319,674 | N/A |
9. Securities Lending
The Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked-to-market daily. Daily mark-to-market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark-to-market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.
To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statement of Assets and Liabilities as a payable.
Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.
While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.
Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral
41
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.
As of April 30, 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 | ||||||||||||||||||||||||
Small Cap Value | $ | 173,944,582 | $ | 181,319,674 | $ | – | $ | 181,319,674 |
Cash collateral is listed on the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statement of Operations.
Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statement of Assets and Liabilities.
10. 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 period ended April 30, 2018, the Fund did not utilize this facility.
42
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
11. Capital Share Transactions
The tables below summarize the activity in capital shares for each Class of the Fund:
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 17,560,227 | $ | 491,083,890 | 49,422,685 | $ | 1,376,685,742 | ||||||||||||||||||||||
Reinvestment of dividends | 16,834,083 | 466,809,134 | 5,798,690 | 161,493,508 | ||||||||||||||||||||||||
Shares redeemed | (29,213,479 | ) | (821,471,679 | ) | (61,608,781 | ) | (1,720,366,623 | ) | ||||||||||||||||||||
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Net increase (decrease) in shares outstanding | 5,180,831 | $ | 136,421,345 | (6,387,406 | ) | $ | (182,187,373 | ) | ||||||||||||||||||||
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Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 2,465,147 | $ | 67,789,460 | 5,596,098 | $ | 152,304,889 | ||||||||||||||||||||||
Reinvestment of dividends | 1,202,236 | 32,893,173 | 377,530 | 10,385,850 | ||||||||||||||||||||||||
Shares redeemed | (2,651,578 | ) | (72,579,098 | ) | (5,257,927 | ) | (143,345,782 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net increase in shares outstanding | 1,015,805 | $ | 28,103,535 | 715,701 | $ | 19,344,957 | ||||||||||||||||||||||
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Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,616,082 | $ | 43,759,952 | 5,842,502 | $ | 156,520,663 | ||||||||||||||||||||||
Reinvestment of dividends | 2,130,538 | 56,927,968 | 705,910 | 19,003,095 | ||||||||||||||||||||||||
Shares redeemed | (4,407,286 | ) | (118,449,928 | ) | (9,608,715 | ) | (256,230,663 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net (decrease) in shares outstanding | (660,666 | ) | $ | (17,762,008 | ) | (3,060,303 | ) | $ | (80,706,905 | ) | ||||||||||||||||||
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Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 415,737 | $ | 11,102,013 | 1,009,536 | $ | 26,701,726 | ||||||||||||||||||||||
Reinvestment of dividends | 330,358 | 8,714,846 | 129,599 | 3,448,634 | ||||||||||||||||||||||||
Shares redeemed | (670,595 | ) | (17,837,421 | ) | (2,369,756 | ) | (62,775,350 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 75,500 | $ | 1,979,438 | (1,230,621 | ) | $ | (32,624,990 | ) | ||||||||||||||||||||
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A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 840,801 | $ | 22,609,385 | 1,059,496 | $ | 27,970,034 | ||||||||||||||||||||||
Reinvestment of dividends | 241,813 | 6,345,165 | 66,206 | 1,754,460 | ||||||||||||||||||||||||
Shares redeemed | (502,831 | ) | (13,357,712 | ) | (1,591,955 | ) | (41,214,901 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 579,783 | $ | 15,596,838 | (466,253 | ) | $ | (11,490,407 | ) | ||||||||||||||||||||
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C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 50,091 | $ | 1,286,125 | 226,407 | $ | 5,808,095 | ||||||||||||||||||||||
Reinvestment of dividends | 53,040 | 1,339,793 | 11,793 | 303,207 | ||||||||||||||||||||||||
Shares redeemed | (79,407 | ) | (2,035,689 | ) | (203,109 | ) | (5,189,248 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net increase in shares outstanding | 23,724 | $ | 590,229 | 35,091 | $ | 922,054 | ||||||||||||||||||||||
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43
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
R6 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | February 28, 2017A to October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 12,139,833 | $ | 343,258,197 | 10,184,651 | $ | 295,604,089 | ||||||||||||||||||||||
Reinvestment of dividends | 1,281,161 | 35,513,778 | - | - | ||||||||||||||||||||||||
Shares redeemed | (1,980,324 | ) | (54,682,915 | ) | (160,657 | ) | (4,684,883 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net increase in shares outstanding | 11,440,670 | $ | 324,089,060 | 10,023,994 | $ | 290,919,206 | ||||||||||||||||||||||
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A Commencement of operations.
12. 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.
44
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016B | 2015 | 2014C | 2013 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 29.51 | $ | 24.36 | $ | 24.69 | $ | 27.80 | $ | 28.04 | $ | 21.04 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.10 | 0.17 | 0.23 | 0.24 | 0.17 | 0.25 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 0.14 | 5.83 | 0.79 | 0.02 | 2.18 | 7.60 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income from investment operations | 0.24 | 6.00 | 1.02 | 0.26 | 2.35 | 7.85 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.23 | ) | (0.20 | ) | (0.19 | ) | (0.14 | ) | (0.27 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.49 | ) | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (2.64 | ) | (0.85 | ) | (1.35 | ) | (3.37 | ) | (2.59 | ) | (0.85 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 27.11 | $ | 29.51 | $ | 24.36 | $ | 24.69 | $ | 27.80 | $ | 28.04 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnD | 0.64 | %E | 24.80 | % | 4.58 | % | 0.87 | % | 8.78 | % | 38.59 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 5,217,419,465 | $ | 5,527,380,111 | $ | 4,717,291,753 | $ | 4,313,522,956 | $ | 4,002,884,144 | $ | 3,430,107,382 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.80 | %F | 0.82 | % | 0.83 | % | 0.81 | % | 0.80 | % | 0.82 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.80 | %F | 0.82 | % | 0.83 | % | 0.81 | % | 0.80 | % | 0.82 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.73 | %F | 0.58 | % | 1.01 | % | 0.99 | % | 0.67 | % | 1.01 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.73 | %F | 0.58 | % | 1.01 | % | 0.99 | % | 0.67 | % | 1.01 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 33 | %E | 48 | % | 53 | % | 47 | % | 73 | % | 48 | % |
A | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
B | On August 19, 2014, Opus Capital Group, LLC was terminated and ceased managing assets of the Small Cap Value Fund. On March 17, 2014, Barrow Hanley, Mewhinney & Strauss, LLC began managing additional assets of the Small Cap Value Fund. On September 19, 2014, Hillcrest Asset Management, LLC began managing assets of the Small Cap Value Fund. |
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. |
See accompanying notes
45
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016A | 2015 | 2014B | 2013 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 29.13 | $ | 24.06 | $ | 24.41 | $ | 27.52 | $ | 27.81 | $ | 20.89 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.09 | 0.12 | 0.23 | 0.23 | 0.18 | 0.22 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 0.15 | 5.78 | 0.76 | 0.01 | 2.12 | 7.55 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income from investment operations | 0.24 | 5.90 | 0.99 | 0.24 | 2.30 | 7.77 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.14 | ) | (0.21 | ) | (0.19 | ) | (0.17 | ) | (0.14 | ) | (0.27 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.49 | ) | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (2.63 | ) | (0.83 | ) | (1.34 | ) | (3.35 | ) | (2.59 | ) | (0.85 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 26.74 | $ | 29.13 | $ | 24.06 | $ | 24.41 | $ | 27.52 | $ | 27.81 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 0.62 | %D | 24.70 | % | 4.49 | % | 0.79 | % | 8.67 | % | 38.45 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 375,345,589 | $ | 379,409,116 | $ | 296,082,333 | $ | 251,360,287 | $ | 190,416,114 | $ | 122,849,739 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.87 | %E | 0.90 | % | 0.90 | % | 0.90 | % | 0.89 | % | 0.91 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.87 | %E | 0.90 | % | 0.90 | % | 0.90 | % | 0.89 | % | 0.91 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.67 | %E | 0.50 | % | 0.94 | % | 0.90 | % | 0.58 | % | 0.74 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.67 | %E | 0.50 | % | 0.94 | % | 0.90 | % | 0.58 | % | 0.74 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 33 | %D | 48 | % | 53 | % | 47 | % | 73 | % | 48 | % |
A | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
B | On August 19, 2014, Opus Capital Group, LLC was terminated and ceased managing assets of the Small Cap Value Fund. On March 17, 2014, Barrow Hanley, Mewhinney & Strauss, LLC began managing additional assets of the Small Cap Value Fund. On September 19, 2014, Hillcrest Asset Management, LLC began managing assets of the Small Cap Value Fund. |
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. |
See accompanying notes
46
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016A | 2015 | 2014B | 2013 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 28.46 | $ | 23.52 | $ | 23.86 | $ | 26.96 | $ | 27.27 | $ | 20.47 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.07 | 0.11 | 0.19 | 0.18 | 0.10 | 0.18 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.12 | 5.60 | 0.73 | (0.02 | ) | 2.09 | 7.38 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.19 | 5.71 | 0.92 | 0.16 | 2.19 | 7.56 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.07 | ) | (0.15 | ) | (0.11 | ) | (0.08 | ) | (0.05 | ) | (0.18 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.49 | ) | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (2.56 | ) | (0.77 | ) | (1.26 | ) | (3.26 | ) | (2.50 | ) | (0.76 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 26.09 | $ | 28.46 | $ | 23.52 | $ | 23.86 | $ | 26.96 | $ | 27.27 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 0.46 | %D | 24.43 | % | 4.27 | % | 0.50 | % | 8.40 | % | 38.11 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 588,093,536 | $ | 660,241,571 | $ | 617,552,712 | $ | 723,044,801 | $ | 851,731,763 | $ | 934,041,370 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.11 | %E | 1.12 | % | 1.14 | % | 1.15 | % | 1.16 | % | 1.18 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.11 | %E | 1.12 | % | 1.14 | % | 1.15 | % | 1.16 | % | 1.18 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.43 | %E | 0.27 | % | 0.70 | % | 0.67 | % | 0.33 | % | 0.73 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.43 | %E | 0.27 | % | 0.70 | % | 0.67 | % | 0.33 | % | 0.73 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 33 | %D | 48 | % | 53 | % | 47 | % | 73 | % | 48 | % |
A | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
B | On August 19, 2014, Opus Capital Group, LLC was terminated and ceased managing assets of the Small Cap Value Fund. On March 17, 2014, Barrow Hanley, Mewhinney & Strauss, LLC began managing additional assets of the Small Cap Value Fund. On September 19, 2014, Hillcrest Asset Management, LLC began managing assets of the Small Cap Value Fund. |
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. |
See accompanying notes
47
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016B | 2015 | 2014C | 2013 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 28.09 | $ | 23.22 | $ | 23.60 | $ | 26.69 | $ | 27.06 | $ | 20.35 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.03 | 0.03 | 0.12 | 0.13 | 0.06 | 0.14 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 0.13 | 5.57 | 0.73 | 0.01 | 2.07 | 7.34 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income from investment operations | 0.16 | 5.60 | 0.85 | 0.14 | 2.13 | 7.48 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.01 | ) | (0.11 | ) | (0.08 | ) | (0.05 | ) | (0.05 | ) | (0.19 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.49 | ) | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (2.50 | ) | (0.73 | ) | (1.23 | ) | (3.23 | ) | (2.50 | ) | (0.77 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 25.75 | $ | 28.09 | $ | 23.22 | $ | 23.60 | $ | 26.69 | $ | 27.06 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnD | 0.38 | %E | 24.26 | % | 4.01 | % | 0.41 | % | 8.22 | % | 37.93 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 92,439,111 | $ | 98,718,359 | $ | 110,205,158 | $ | 98,224,328 | $ | 102,681,998 | $ | 88,032,906 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.29 | %F | 1.30 | % | 1.31 | % | 1.31 | % | 1.29 | % | 1.31 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.29 | %F | 1.30 | % | 1.31 | % | 1.31 | % | 1.29 | % | 1.31 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.25 | %F | 0.11 | % | 0.53 | % | 0.51 | % | 0.18 | % | 0.46 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.25 | %F | 0.11 | % | 0.53 | % | 0.51 | % | 0.18 | % | 0.46 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 33 | %E | 48 | % | 53 | % | 47 | % | 73 | % | 48 | % |
A | On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class. |
B | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
C | On August 19, 2014, Opus Capital Group, LLC was terminated and ceased managing assets of the Small Cap Value Fund. On March 17, 2014, Barrow Hanley, Mewhinney & Strauss, LLC began managing additional assets of the Small Cap Value Fund. On September 19, 2014, Hillcrest Asset Management, LLC began managing assets of the Small Cap Value Fund. |
D | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
E | Not annualized. |
F | Annualized. |
See accompanying notes
48
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016A | 2015 | 2014B | 2013 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 27.99 | $ | 23.14 | $ | 23.54 | $ | 26.63 | $ | 27.03 | $ | 20.35 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.05 | 0.07 | 0.15 | 0.13 | 0.11 | 0.16 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments (both realized and unrealized) | 0.13 | 5.53 | 0.73 | 0.02 | 2.03 | 7.30 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income from investment operations | 0.18 | 5.60 | 0.88 | 0.15 | 2.14 | 7.46 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.06 | ) | (0.13 | ) | (0.13 | ) | (0.06 | ) | (0.09 | ) | (0.20 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.49 | ) | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (2.55 | ) | (0.75 | ) | (1.28 | ) | (3.24 | ) | (2.54 | ) | (0.78 | ) | ||||||||||||||||||||||||||||||||
|
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|
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Net asset value, end of period | $ | 25.62 | $ | 27.99 | $ | 23.14 | $ | 23.54 | $ | 26.63 | $ | 27.03 | ||||||||||||||||||||||||||||||||
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Total returnC | 0.43 | %D | 24.36 | % | 4.17 | % | 0.45 | % | 8.30 | % | 37.83 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: |
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Net assets, end of period | $ | 72,961,773 | $ | 63,481,305 | $ | 63,277,387 | $ | 54,815,183 | $ | 29,569,753 | $ | 13,417,645 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.17 | %E | 1.20 | % | 1.21 | % | 1.21 | % | 1.27 | % | 1.35 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.17 | %E | 1.20 | % | 1.21 | % | 1.22 | % | 1.27 | % | 1.32 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 0.36 | %E | 0.20 | % | 0.64 | % | 0.56 | % | 0.19 | % | 0.30 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 0.36 | %E | 0.20 | % | 0.64 | % | 0.54 | % | 0.20 | % | 0.34 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 33 | %D | 48 | % | 53 | % | 47 | % | 73 | % | 48 | % |
A | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
B | On August 19, 2014, Opus Capital Group, LLC was terminated and ceased managing assets of the Small Cap Value Fund. On March 17, 2014, Barrow Hanley, Mewhinney & Strauss, LLC began managing additional assets of the Small Cap Value Fund. On September 19, 2014, Hillcrest Asset Management, LLC began managing assets of the Small Cap Value Fund. |
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. |
See accompanying notes
49
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2017 | 2016A | 2015 | 2014B | 2013 | ||||||||||||||||||||||||||||||||||||||||
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(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 26.98 | $ | 22.39 | $ | 22.84 | $ | 26.05 | $ | 26.60 | $ | 20.07 | ||||||||||||||||||||||||||||||||
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Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | - | (0.14 | ) | (0.02 | ) | 0.03 | (0.07 | ) | 0.03 | |||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.11 | 5.35 | 0.72 | (0.06 | ) | 1.97 | 7.17 | |||||||||||||||||||||||||||||||||||||
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Total income (loss) from investment operations | 0.11 | 5.21 | 0.70 | (0.03 | ) | 1.90 | 7.20 | |||||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | - | - | - | - | - | (0.09 | ) | |||||||||||||||||||||||||||||||||||||
Distributions from net realized gains | (2.49 | ) | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.58 | ) | ||||||||||||||||||||||||||||||||
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Total distributions | (2.49 | ) | (0.62 | ) | (1.15 | ) | (3.18 | ) | (2.45 | ) | (0.67 | ) | ||||||||||||||||||||||||||||||||
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Net asset value, end of period | $ | 24.60 | $ | 26.98 | $ | 22.39 | $ | 22.84 | $ | 26.05 | $ | 26.60 | ||||||||||||||||||||||||||||||||
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Total returnC | 0.18 | %D | 23.39 | % | 3.42 | % | (0.31 | )% | 7.46 | % | 36.88 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: |
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Net assets, end of period | $ | 14,569,083 | $ | 15,335,554 | $ | 11,938,196 | $ | 11,718,580 | $ | 9,676,368 | $ | 6,396,419 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.65 | %E | 1.96 | % | 1.96 | % | 1.97 | % | 2.03 | % | 2.09 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.65 | %E | 1.96 | % | 1.96 | % | 1.98 | % | 2.03 | % | 2.07 | % | ||||||||||||||||||||||||||||||||
Net investment (loss), before expense reimbursements or recoupments | (0.12 | )%E | (0.58 | )% | (0.12 | )% | (0.17 | )% | (0.56 | )% | (0.41 | )% | ||||||||||||||||||||||||||||||||
Net investment (loss), net of reimbursements or recoupments | (0.12 | )%E | (0.58 | )% | (0.12 | )% | (0.17 | )% | (0.56 | )% | (0.39 | )% | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 33 | %D | 48 | % | 53 | % | 47 | % | 73 | % | 48 | % |
A | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Asset Management. |
B | On August 19, 2014, Opus Capital Group, LLC was terminated and ceased managing assets of the Small Cap Value Fund. On March 17, 2014, Barrow Hanley, Mewhinney & Strauss, LLC began managing additional assets of the Small Cap Value Fund. On September 19, 2014, Hillcrest Asset Management, LLC began managing assets of the Small Cap Value Fund. |
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. |
See accompanying notes
50
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||||||||||
Six Months Ended April 30, 2018 | February 28, 2017A to October 31, 2017 | |||||||||||
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(unaudited) | ||||||||||||
Net asset value, beginning of period | $ | 29.51 | $ | 28.03 | ||||||||
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Income from investment operations: | ||||||||||||
Net investment income | 0.14 | - | B | |||||||||
Net gains on investments (both realized and unrealized) | 0.10 | 1.48 | ||||||||||
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Total income from investment operations | 0.24 | 1.48 | ||||||||||
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Less distributions: | ||||||||||||
Dividends from net investment income | (0.16 | ) | - | |||||||||
Distributions from net realized gains | (2.49 | ) | - | |||||||||
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Total distributions | (2.65 | ) | - | |||||||||
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Net asset value, end of period | $ | 27.10 | $ | 29.51 | ||||||||
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Total returnC | 0.63 | %D | 5.28 | %D | ||||||||
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Ratios and supplemental data: |
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Net assets, end of period | $ | 581,711,670 | $ | 295,802,679 | ||||||||
Ratios to average net assets: | ||||||||||||
Expenses, before reimbursements | 0.78 | %E | 0.80 | %E | ||||||||
Expenses, net of reimbursementsG | 0.78 | %E | 0.80 | %E | ||||||||
Net investment income (loss), before expense reimbursements | 0.74 | %E | (0.04 | )%E | ||||||||
Net investment income (loss), net of reimbursements | 0.74 | %E | (0.04 | )%E | ||||||||
Portfolio turnover rate | 33 | %D | 48 | %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 February 28, 2017 through October 31, 2017 and is not annualized. |
G | Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses, which are not reimbursable under the agreement with the Manager. |
See accompanying notes
51
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. 20549-1520. 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 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 Kansas City, Missouri | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas | 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 Small Cap Value Fund are service marks of American Beacon Advisors, Inc.
SAR 04/18
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.
BALANCED FUND RISKS
The use of fixed-income securities entails interest rate and credit risks. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. 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.
MID-CAP VALUE FUND RISKS
Investing in medium-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund 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 | April 30, 2018 |
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Schedules of Investments: | ||||
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Financial Highlights: | ||||
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66 |
| Back Cover |
![]() | Dear Shareholders,
Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term investment goals: Institutional wisdom + earned alpha = enduring value.
u We believe institutional wisdom comes from having more than 30 years of experience as manager of one of the country’s largest pension plans. As a fiduciary, we have built an investment due-diligence and oversight infrastructure, which we leverage across all our investment products. When selecting our investment managers, we focus on their people, processes and performance. We perform due-diligence reviews with each investment manager on a quarterly basis.
u We believe earned alpha – that is, the returns of an actively managed fund beyond a benchmark – comes from employing and engaging |
investment managers we believe are best-in-class and who have defined, repeatable and proven processes. Our experience has shown us that, while it’s important to be mindful of short-term considerations, having a long-term focus helps manage expectations, mitigate risks and realize goals. Thus, we seek relationships with leading investment managers who display a willingness to undertake time-intensive research strategies. The resulting investment portfolios are differentiated from their peers and allow incremental changes to help address periods of market volatility and economic uncertainty. |
u | We believe enduring value comes from “putting a portfolio in place and sticking with the plan.” Our mutual funds provide you with access to institutional-quality, research-intensive investment managers with diverse processes and styles. In the long run, having such access and spending time in the market – rather than trying to time the market – may better position you to reach your long-term investment goals. |
The markets and U.S. economy were robust during calendar year 2017. However, during periods of market volatility and economic uncertainty – such as what we’ve seen thus far in 2018 – investing for the long term requires conviction. It isn’t about identifying and anticipating the next big market move. It’s about identifying the right investment products for riding out those moves. It’s about developing an approach based on long-term participation, while seeking some measure of protection against ongoing volatility.
As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings. Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for high quality and lower risk.
At American Beacon, our approach is more than a concept. It’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment products for your portfolio.
Thank you for your continued interest in American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon Balanced FundSM
April 30, 2018 (Unaudited)
The Investor Class of the American Beacon Balanced Fund (the “Fund”) returned 1.59% for the six months ended April 30, 2018, outperforming the 60% Russell 1000® Value Index/40% Bloomberg Barclays U.S. Aggregate Bond Index (Balanced Composite Index) return of 0.47% for the same period.
Total Returns for the Period ended April 30, 2018 | |||||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||
Institutional Class (1,7) | AADBX | 1.79 | % | 7.87 | % | 5.40 | % | 7.65 | % | 6.71 | % | ||||||||||||||||||||||
Y Class (1,2,7) | ACBYX | 1.74 | % | 7.84 | % | 5.35 | % | 7.60 | % | 6.64 | % | ||||||||||||||||||||||
Investor Class (1,7) | AABPX | 1.59 | % | 7.59 | % | 5.04 | % | 7.30 | % | 6.37 | % | ||||||||||||||||||||||
Advisor Class (1,7) | ABLSX | 1.54 | % | 7.43 | % | 4.86 | % | 7.12 | % | 6.19 | % | ||||||||||||||||||||||
A without Sales Charge (1,3,7) | ABFAX | 1.71 | % | 7.61 | % | 5.01 | % | 7.23 | % | 6.29 | % | ||||||||||||||||||||||
A with Sales Charge (1,3,7) | ABFAX | (4.11 | )% | 1.42 | % | 2.95 | % | 5.97 | % | 5.67 | % | ||||||||||||||||||||||
C without Sales Charge (1,4,7) | ABCCX | 1.32 | % | 6.80 | % | 4.20 | % | 6.42 | % | 5.67 | % | ||||||||||||||||||||||
C with Sales Charge (1,4,7) | ABCCX | 0.32 | % | 5.80 | % | 4.20 | % | 6.42 | % | 5.67 | % | ||||||||||||||||||||||
Balanced Composite Index (5) | 0.47 | % | 4.40 | % | 5.13 | % | 6.96 | % | 6.13 | % | |||||||||||||||||||||||
Russell 1000® Value Index (6) | 1.94 | % | 7.50 | % | 7.66 | % | 10.52 | % | 7.30 | % | |||||||||||||||||||||||
Bloomberg Barclays U.S. Aggregate Bond Index (6) | (1.87 | )% | (0.32 | )% | 1.07 | % | 1.47 | % | 3.57 | % |
* | Not Annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. 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. |
2. | Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 4/30/08 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. Therefore, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/08. A portion of the fees charged to the Y Class of the Fund was waived in 2011, partially recovered in 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown in 2011. |
3. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/08. A portion of the fees charged to the A Class of the Fund was waived in 2011 and 2012, partially recovered in 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown in 2011 and 2012. A Class has a maximum sales charge of 5.75%. |
4. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/08. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012, partially recovered in 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. The maximum contingent deferred sales charge for C Class is 1% for shares redeemed within one year of the date of purchase. |
5. | To reflect the Fund’s allocation of its assets between investment-grade fixed-income securities and equity securities, the returns of the Russell 1000 Value Index and the Bloomberg Barclays U.S. Aggregate Bond Index have been combined in a 60% / 40% proportion. |
6. | The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. The Bloomberg Barclays U.S. Aggregate Bond Index is a market value weighted index of government, corporate, mortgage-backed and asset-backed fixed-rate debt securities of all maturities. One cannot directly invest in an index. |
7. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A and C Class shares were 0.60%, 0.69%, 0.90%, 1.09%, 1.00% and 1.74%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. |
2
American Beacon Balanced FundSM
Performance Overview
April 30, 2018 (Unaudited)
During the six-month period, the Fund’s assets on average were invested 67% in equities (including equitized cash) and 33% in fixed-income securities, ending the period with approximately the same allocation.
The equity portion of the Fund (excluding equitized cash) returned 3.7% for the period, outperforming the Russell 1000 Value Index (the “Index”) return of 1.9%. The equity portion of the Fund outperformed the Index as both stock selection and sector allocation added value relative to the Index.
Stock selections in the Energy, Information Technology and Telecommunications sectors contributed most of the outperformance during the six-month period. In the Energy sector, ConocoPhillips – up 28.9% was the largest contributor, followed closely by BP PLC Sponsored ADR – up 12.9%. In the Information Technology sector, Hewlett Packard Enterprise – up 24.7% was the largest contributor, followed by Microsoft Corp. – up 13.7%. In the Telecommunication Services sector, the Fund’s position in Vodafone Group PLC, Sponsored ADR – up 3.8% led to the outperformance. The aforementioned positive sector’s positions outweighed negative performance from investments in American International Group – down 12.3% and Citigroup, Inc. – down 6.1% within the Financials sector.
The Fund’s overweight to Energy – up 10.6% – the best performing sector in the Index – and underweight to Utilities, Real Estate and Consumer Staples – down 4.2%, 3.7% and 7.1%, respectively helped performance the most through sector allocation. On the other hand, being overweight in Industrials – down 4.5% weighed on the Fund’s relative value.
The fixed-income portion of the Fund returned -1.0% for the six-month period, outperforming the Bloomberg Barclays U.S. Aggregate Bond Index (the “Barclays Index”) return of -1.9%. The Fund’s fixed-income excess performance relative to the Barclays Index was due solely to good security selection. The Fund’s selections within U.S. Treasuries – down 0.1% added relative value. Good selections in the Manufacturing and Finance sectors within Corporates also added to the Fund. From a duration perspective, the portfolio was helped most by overweighting the 0 to 1 year range, as well as underweighting the 10 to 30 year range.
The sub-advisors continue to focus on the disciplined selection of attractive securities that should allow the Fund to benefit long-term.
3
American Beacon Balanced FundSM
Performance Overview
April 30, 2018 (Unaudited)
Top Ten Holdings (% Net Assets) | ||||||||
U.S. Treasury Notes/Bonds, 1.604%, Due 7/31/2018 | 4.1 | |||||||
Citigroup, Inc. | 2.4 | |||||||
Bank of America Corp. | 2.1 | |||||||
JPMorgan Chase & Co. | 1.9 | |||||||
BP PLC, Sponsored ADR | 1.8 | |||||||
American International Group, Inc. | 1.7 | |||||||
ConocoPhillips | 1.6 | |||||||
Microsoft Corp. | 1.5 | |||||||
Wells Fargo & Co. | 1.5 | |||||||
General Motors Co. | 1.3 | |||||||
Total Fund Holdings | 499 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 26.5 | |||||||
Energy | 18.0 | |||||||
Consumer Discretionary | 13.2 | |||||||
Information Technology | 10.7 | |||||||
Health Care | 10.3 | |||||||
Industrials | 9.5 | |||||||
Consumer Staples | 4.7 | |||||||
Materials | 3.9 | |||||||
Telecommunication Services | 1.9 | |||||||
Utilities | 1.3 | |||||||
Sector Allocation (% Fixed Income) | ||||||||
U.S. Treasury Obligations | 41.5 | |||||||
Financial | 14.9 | |||||||
U.S. Agency Mortgage-Backed Obligations | 14.2 | |||||||
Consumer, Cyclical | 5.9 | |||||||
Communications | 4.4 | |||||||
Consumer, Non-Cyclical | 3.2 | |||||||
Industrial | 3.0 | |||||||
Technology | 2.7 | |||||||
Utilities | 2.7 | |||||||
Asset-Backed Obligations | 2.3 | |||||||
Commercial Mortgage-Backed Obligations | 2.0 | |||||||
Energy | 1.8 | |||||||
Basic Materials | 0.9 | |||||||
Foreign Sovereign Obligations | 0.5 |
4
American Beacon Mid-Cap Value FundSM
Performance Overview
April 30, 2018 (Unaudited)
The Investor Class of the American Beacon Mid-Cap Value Fund (the “Fund”) returned -0.60% for the six months ended April 30, 2018. The Fund underperformed the Russell Midcap® Value Index (the “Index”) return of 2.55% for the same period.
Total Returns for the Period ended April 30, 2018 | ||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||
Institutional Class (1,3,10) | AACIX | (0.47 | )% | 6.83 | % | 7.28 | % | 10.81 | % | 9.93 | % | |||||||||||
Y Class (1,4,10) | ACMYX | (0.49 | )% | 6.75 | % | 7.20 | % | 10.73 | % | 9.87 | % | |||||||||||
Investor Class (1,2,10) | AMPAX | (0.60 | )% | 6.63 | % | 7.04 | % | 10.57 | % | 9.73 | % | |||||||||||
Advisor Class (1,5,10) | AMCSX | (0.72 | )% | 6.29 | % | 6.72 | % | 10.23 | % | 9.43 | % | |||||||||||
A without Sales Charge (1,6,10) | ABMAX | (0.71 | )% | 6.43 | % | 6.85 | % | 10.35 | % | 9.46 | % | |||||||||||
A with Sales Charge (1,6,10) | ABMAX | (6.44 | )% | 0.30 | % | 4.76 | % | 9.06 | % | 8.81 | % | |||||||||||
C without Sales Charge (1,7,10) | AMCCX | (0.97 | )% | 5.65 | % | 6.06 | % | 9.52 | % | 8.85 | % | |||||||||||
C with Sales Charge (1,7,10) | AMCCX | (1.97 | )% | 4.65 | % | 6.06 | % | 9.52 | % | 8.85 | % | |||||||||||
R6 Class (1,8,10) | AMDRX | (0.47 | )% | 6.83 | % | 7.28 | % | 10.81 | % | 9.93 | % | |||||||||||
Russell Midcap® Value Index (9) | 2.55 | % | 6.83 | % | 7.81 | % | 10.97 | % | 9.22 | % |
* | Not Annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. 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. |
2. | A portion of the fees charged to the Investor Class of the Fund was waived from 2006 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than actual returns shown from 2008 through 2013. |
3. | A portion of the fees charged to the Institutional Class of the Fund was waived from 2007 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than actual returns shown from 2008 through 2013. |
4. | Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 4/30/08 up to 3/1/10, the inception date of the Y Class and the returns of the Y Class since its inception. Expenses of the Institutional Class are lower than those of the Y Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/08. A portion of the fees charged to the Y Class of the Fund was waived from 2010 through 2013. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2013. |
5. | A portion of the fees charged to the Advisor Class of the Fund was waived from 2007 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown from 2008 through 2013. |
6. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the Investor Class are lower than those of the A Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 4/30/08. A portion of the fees charged to the A Class of the Fund was waived from 2010 through 2012 and fully recovered in 2013. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. A Class shares have a maximum sales charge of 5.75%. |
7. | Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/08 to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the Investor Class are lower than those of the C Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 4/30/08. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2013. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase. |
8. | Fund performance for the six-month, one-year, three-year, five-year and ten-year periods represents the returns achieved by the Institutional Class from 4/30/08 through 2/28/18, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/08. A portion of fees charged to the R6 Class of the Fund has been waived since 2/28/2018. Performance prior to waiving fees was lower than actual returns shown. |
5
American Beacon Mid-Cap Value FundSM
Performance Overview
April 30, 2018 (Unaudited)
9. | The Russell Midcap Value Index is an unmanaged index of those stocks in the Russell Midcap Index with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index. Russell Midcap Value Index, Russell Midcap Index and Russell 1000 Index are registered trademarks of Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. One cannot directly invest in an index. |
10. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C and R6 Class shares were 0.90%, 0.98%, 1.10%, 1.41%, 1.28%, 2.05% and 0.89%, 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 due to stock selection. Sector allocation added relative value for the period.
The Fund’s performance related to security selection was mostly attributed to investments in the Information Technology, Energy and Industrials sectors. Holdings in the Information Technology sector detracting from performance included Micro Focus International – down 55.8% and Microchip Technology – down 11.9%. In the Energy sector, EQT Corp. – down 19.4% was the largest detractor. Not owning Marathon Petroleum, which was up 27.1% in the Index, also detracted relative value. Within the Industrials sector, the largest detractors were Jeld Wen Holdings, Inc. – down 25.0%, Ryder System – down 15.6% and Owens Corning – down 21.8%.
The aforementioned performance was slightly offset by the Fund’s investments in the Financials sector. Voya Financial was up 32.1% and Validus Holdings was up 40.2%, which contributed to performance.
From a sector allocation perspective, the Fund’s significant underweight positions in the Real Estate and Utilities sectors added value relative to the Index. An overweight in Information Technology, the second best performing sector for the Index, also contributed to performance. In contrast, the Fund’s overweight to Industrials detracted value for the period.
The sub-advisors’ philosophy of investing in undervalued companies that exhibit improving profitability and earnings growth potential should allow the Fund to benefit in the longer term.
Top Ten Holdings (% Net Assets) | ||||||||
Murphy Oil Corp. | 2.1 | |||||||
Pinnacle West Capital Corp. | 2.0 | |||||||
Fifth Third Bancorp | 2.0 | |||||||
Cardinal Health, Inc. | 2.0 | |||||||
KeyCorp | 1.9 | |||||||
Willis Towers Watson PLC | 1.8 | |||||||
Dover Corp. | 1.7 | |||||||
Axis Capital Holdings Ltd. | 1.7 | |||||||
FNF Group | 1.4 | |||||||
Avnet, Inc. | 1.4 | |||||||
Total Fund Holdings | 116 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 25.2 | |||||||
Industrials | 16.4 | |||||||
Consumer Discretionary | 14.3 | |||||||
Information Technology | 9.4 | |||||||
Energy | 9.4 | |||||||
Health Care | 8.1 | |||||||
Utilities | 6.3 | |||||||
Real Estate | 4.9 | |||||||
Materials | 4.5 | |||||||
Consumer Staples | 1.5 |
6
American Beacon FundsSM
April 30, 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 November 1, 2017 through April 30, 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.
7
American Beacon FundsSM
Expense Examples
April 30, 2018 (Unaudited)
American Beacon Balanced Fund | |||||||||||||||
Beginning Account Value 11/1/2017 | Ending Account Value 4/30/2018 | Expenses Paid During Period 11/1/2017-4/30/2018* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,016.60 | $3.20 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.60 | $3.21 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,016.80 | $3.55 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.30 | $3.56 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,015.90 | $4.60 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.20 | $4.61 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,014.70 | $5.64 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.20 | $5.66 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,017.10 | $3.85 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.00 | $3.86 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,013.20 | $7.29 | ||||||||||||
Hypothetical** | $1,000.00 | $1,017.60 | $7.30 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.64%, 0.71%, 0.92%, 1.13%, 0.77%, and 1.46% for the Institutional, Y, Investor, Advisor, A and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
American Beacon Mid-Cap Value Fund | |||||||||||||||
Beginning Account Value 11/1/2017 | Ending Account Value 4/30/2018 | Expenses Paid During Period 11/1/2017-4/30/2018* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $995.30 | $4.16 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.60 | $4.21 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $995.10 | $4.55 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.20 | $4.61 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $994.00 | $5.24 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.50 | $5.31 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $992.80 | $6.97 | ||||||||||||
Hypothetical** | $1,000.00 | $1,017.80 | $7.05 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $993.50 | $6.03 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.70 | $6.11 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $990.90 | $9.13 | ||||||||||||
Hypothetical** | $1,000.00 | $1,015.60 | $9.25 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $995.30 | $1.47 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.40 | $4.41 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.84%, 0.92%, 1.06%, 1.41%, 1.22%, 1.85%, and 0.88% for the Institutional, Y, Investor, Advisor, A, C and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
8
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 64.53% | |||||||||||||||
Consumer Discretionary - 8.49% | |||||||||||||||
Auto Components - 1.30% | |||||||||||||||
Adient PLC | 6,632 | $ | 406,475 | ||||||||||||
Goodyear Tire & Rubber Co. | 67,608 | 1,697,637 | |||||||||||||
Magna International, Inc. | 35,827 | 2,113,793 | |||||||||||||
|
| ||||||||||||||
4,217,905 | |||||||||||||||
|
| ||||||||||||||
Automobiles - 1.48% | |||||||||||||||
General Motors Co. | 115,932 | 4,259,342 | |||||||||||||
Harley-Davidson, Inc. | 12,741 | 524,037 | |||||||||||||
|
| ||||||||||||||
4,783,379 | |||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 0.47% | |||||||||||||||
Carnival Corp. | 6,242 | 393,620 | |||||||||||||
Norwegian Cruise Line Holdings Ltd.A | 20,865 | 1,115,652 | |||||||||||||
|
| ||||||||||||||
1,509,272 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 0.59% | |||||||||||||||
DR Horton, Inc. | 27,311 | 1,205,508 | |||||||||||||
Tupperware Brands Corp. | 15,900 | 708,504 | |||||||||||||
|
| ||||||||||||||
1,914,012 | |||||||||||||||
|
| ||||||||||||||
Media - 2.59% | |||||||||||||||
CBS Corp., Class B, NVDR | 17,252 | 848,798 | |||||||||||||
Cinemark Holdings, Inc. | 7,300 | 285,941 | |||||||||||||
Comcast Corp., Class A | 126,553 | 3,972,499 | |||||||||||||
Discovery, Inc., Class AA B | 35,300 | 834,845 | |||||||||||||
Discovery, Inc., Class CA | 52,699 | 1,170,972 | |||||||||||||
Interpublic Group of Cos, Inc. | 15,500 | 365,645 | |||||||||||||
Omnicom Group, Inc. | 4,186 | 308,341 | |||||||||||||
Walt Disney Co. | 6,000 | 601,980 | |||||||||||||
|
| ||||||||||||||
8,389,021 | |||||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.69% | |||||||||||||||
Dollar General Corp. | 23,151 | 2,234,766 | |||||||||||||
|
| ||||||||||||||
Specialty Retail - 1.26% | |||||||||||||||
Advance Auto Parts, Inc. | 9,300 | 1,064,385 | |||||||||||||
Bed Bath & Beyond, Inc. | 16,824 | 293,747 | |||||||||||||
Dick’s Sporting Goods, Inc. | 20,600 | 681,654 | |||||||||||||
Lowe’s Cos, Inc. | 24,724 | 2,037,999 | |||||||||||||
|
| ||||||||||||||
4,077,785 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.11% | |||||||||||||||
Hanesbrands, Inc. | 19,500 | 360,165 | |||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 27,486,305 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 3.07% | |||||||||||||||
Beverages - 0.58% | |||||||||||||||
Molson Coors Brewing Co., Class B | 14,800 | 1,054,352 | |||||||||||||
PepsiCo, Inc. | 8,300 | 837,802 | |||||||||||||
|
| ||||||||||||||
1,892,154 | |||||||||||||||
|
| ||||||||||||||
Food Products - 0.31% | |||||||||||||||
Kellogg Co. | 5,392 | 317,589 | |||||||||||||
Mondelez International, Inc., Class A | 17,200 | 679,400 | |||||||||||||
|
| ||||||||||||||
996,989 | |||||||||||||||
|
|
See accompanying notes
9
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 64.53% (continued) | |||||||||||||||
Consumer Staples - 3.07% (continued) | |||||||||||||||
Health Care Providers & Services - 0.71% | |||||||||||||||
CVS Health Corp. | 32,715 | $ | 2,284,488 | ||||||||||||
|
| ||||||||||||||
Personal Products - 0.36% | |||||||||||||||
Unilever PLC, ADR | 20,700 | 1,158,579 | |||||||||||||
|
| ||||||||||||||
Tobacco - 1.11% | |||||||||||||||
Altria Group, Inc. | 22,796 | 1,279,084 | |||||||||||||
Imperial Brands PLC, Sponsored ADR | 28,646 | 1,041,855 | |||||||||||||
Philip Morris International, Inc. | 15,601 | 1,279,282 | |||||||||||||
|
| ||||||||||||||
3,600,221 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 9,932,431 | ||||||||||||||
|
| ||||||||||||||
Energy - 11.61% | |||||||||||||||
Energy Equipment & Services - 1.54% | |||||||||||||||
Halliburton Co. | 21,900 | 1,160,481 | |||||||||||||
Helmerich & Payne, Inc. | 11,200 | 778,960 | |||||||||||||
National Oilwell Varco, Inc. | 24,300 | 939,681 | |||||||||||||
Oceaneering International, Inc. | 23,155 | 491,812 | |||||||||||||
Schlumberger Ltd. | 23,600 | 1,618,016 | |||||||||||||
|
| ||||||||||||||
4,988,950 | |||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 10.07% | |||||||||||||||
Anadarko Petroleum Corp. | 19,597 | 1,319,270 | |||||||||||||
Andeavor | 7,600 | 1,051,232 | |||||||||||||
Apache Corp. | 57,614 | 2,359,293 | |||||||||||||
BP PLC, Sponsored ADR | 129,355 | 5,767,940 | |||||||||||||
Canadian Natural Resources Ltd. | 95,265 | 3,437,161 | |||||||||||||
Chevron Corp. | 16,320 | 2,041,795 | |||||||||||||
ConocoPhillips | 76,756 | 5,027,518 | |||||||||||||
Devon Energy Corp. | 47,207 | 1,715,030 | |||||||||||||
Hess Corp. | 32,132 | 1,831,203 | |||||||||||||
Kinder Morgan, Inc. | 55,200 | 873,264 | |||||||||||||
Kosmos Energy Ltd.A | 43,969 | 309,542 | |||||||||||||
Marathon Oil Corp. | 110,431 | 2,015,366 | |||||||||||||
Murphy Oil Corp. | 32,875 | 989,866 | |||||||||||||
Phillips 66 | 24,295 | 2,704,276 | |||||||||||||
Royal Dutch Shell PLC, Class A, Sponsored ADR | 16,435 | 1,148,807 | |||||||||||||
|
| ||||||||||||||
32,591,563 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 37,580,513 | ||||||||||||||
|
| ||||||||||||||
Financials - 17.09% | |||||||||||||||
Banks - 8.93% | |||||||||||||||
Bank of America Corp. | 231,102 | 6,914,572 | |||||||||||||
BNP Paribas S.A., ADR | 22,600 | 870,100 | |||||||||||||
CIT Group, Inc. | 6,650 | 352,117 | |||||||||||||
Citigroup, Inc. | 115,232 | 7,866,889 | |||||||||||||
Citizens Financial Group, Inc. | 20,768 | 861,664 | |||||||||||||
JPMorgan Chase & Co. | 56,801 | 6,178,813 | |||||||||||||
PNC Financial Services Group, Inc. | 8,076 | 1,175,946 | |||||||||||||
Wells Fargo & Co. | 90,509 | 4,702,848 | |||||||||||||
|
| ||||||||||||||
28,922,949 | |||||||||||||||
|
|
See accompanying notes
10
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 64.53% (continued) | |||||||||||||||
Financials - 17.09% (continued) | |||||||||||||||
Capital Markets - 2.19% | |||||||||||||||
Bank of New York Mellon Corp. | 6,715 | $ | 366,035 | ||||||||||||
Blackstone Group LP, MLP | 61,330 | 1,898,163 | |||||||||||||
Goldman Sachs Group, Inc. | 3,797 | 904,939 | |||||||||||||
KKR & Co. LP | 137,984 | 2,889,385 | |||||||||||||
Morgan Stanley | 6,537 | 337,440 | |||||||||||||
State Street Corp. | 7,006 | 699,059 | |||||||||||||
|
| ||||||||||||||
7,095,021 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 2.35% | |||||||||||||||
Ally Financial, Inc. | 19,900 | 519,390 | |||||||||||||
Capital One Financial Corp. | 16,929 | 1,534,106 | |||||||||||||
Discover Financial Services | 15,500 | 1,104,375 | |||||||||||||
Navient Corp. | 41,739 | 553,459 | |||||||||||||
OneMain Holdings, Inc.A | 23,965 | 739,320 | |||||||||||||
Santander Consumer USA Holdings, Inc. | 57,879 | 1,067,868 | |||||||||||||
SLM Corp.A | 125,282 | 1,438,237 | |||||||||||||
Synchrony Financial | 19,506 | 647,014 | |||||||||||||
|
| ||||||||||||||
7,603,769 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.61% | |||||||||||||||
Berkshire Hathaway, Inc., Class B, Class BA | 10,242 | 1,984,183 | |||||||||||||
|
| ||||||||||||||
Insurance - 2.86% | |||||||||||||||
American International Group, Inc. | 99,147 | 5,552,232 | |||||||||||||
Travelers Companies, Inc. | 7,957 | 1,047,141 | |||||||||||||
XL Group Ltd. | 47,800 | 2,657,202 | |||||||||||||
|
| ||||||||||||||
9,256,575 | |||||||||||||||
|
| ||||||||||||||
Thrifts & Mortgage Finance - 0.15% | |||||||||||||||
Radian Group, Inc. | 33,061 | 472,772 | |||||||||||||
|
| ||||||||||||||
Total Financials | 55,335,269 | ||||||||||||||
|
| ||||||||||||||
Health Care - 6.62% | |||||||||||||||
Biotechnology - 0.99% | |||||||||||||||
AbbVie, Inc. | 4,285 | 413,717 | |||||||||||||
Biogen, Inc.A | 2,072 | 566,899 | |||||||||||||
Celgene Corp.A | 6,286 | 547,511 | |||||||||||||
Gilead Sciences, Inc. | 9,720 | 702,075 | |||||||||||||
Portola Pharmaceuticals, Inc.A | 11,300 | 408,269 | |||||||||||||
Shire PLC, ADRB | 3,600 | 573,948 | |||||||||||||
|
| ||||||||||||||
3,212,419 | |||||||||||||||
|
| ||||||||||||||
Health Care Equipment & Supplies - 1.57% | |||||||||||||||
Koninklijke Philips N.V. | 29,293 | 1,236,751 | |||||||||||||
Medtronic PLC | 37,653 | 3,017,135 | |||||||||||||
Zimmer Biomet Holdings, Inc. | 7,232 | 832,909 | |||||||||||||
|
| ||||||||||||||
5,086,795 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 0.99% | |||||||||||||||
Anthem, Inc. | 13,580 | 3,204,744 | |||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 3.07% | |||||||||||||||
GlaxoSmithKline PLC, Sponsored ADR | 30,643 | 1,229,091 | |||||||||||||
Horizon Pharma PLCA | 39,612 | 524,463 | |||||||||||||
Jazz Pharmaceuticals PLCA | 3,293 | 500,668 | |||||||||||||
Johnson & Johnson | 9,213 | 1,165,352 |
See accompanying notes
11
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 64.53% (continued) | |||||||||||||||
Health Care - 6.62% (continued) | |||||||||||||||
Pharmaceuticals - 3.07% (continued) | |||||||||||||||
Mallinckrodt PLCA | 17,712 | $ | 230,256 | ||||||||||||
Merck & Co., Inc. | 30,688 | 1,806,603 | |||||||||||||
Mylan N.V.A | 20,644 | 800,161 | |||||||||||||
Pfizer, Inc. | 51,896 | 1,899,913 | |||||||||||||
Sanofi, ADR | 45,273 | 1,780,134 | |||||||||||||
|
| ||||||||||||||
9,936,641 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 21,440,599 | ||||||||||||||
|
| ||||||||||||||
Industrials - 6.14% | |||||||||||||||
Aerospace & Defense - 1.00% | |||||||||||||||
Embraer S.A., Sponsored ADR | 10,824 | 272,981 | |||||||||||||
General Dynamics Corp. | 3,278 | 659,894 | |||||||||||||
Raytheon Co. | 7,933 | 1,625,789 | |||||||||||||
United Technologies Corp. | 5,619 | 675,123 | |||||||||||||
|
| ||||||||||||||
3,233,787 | |||||||||||||||
|
| ||||||||||||||
Airlines - 1.20% | |||||||||||||||
American Airlines Group, Inc. | 26,561 | 1,140,264 | |||||||||||||
Delta Air Lines, Inc. | 28,045 | 1,464,510 | |||||||||||||
United Continental Holdings, Inc.A | 19,100 | 1,290,014 | |||||||||||||
|
| ||||||||||||||
3,894,788 | |||||||||||||||
|
| ||||||||||||||
Building Products - 0.91% | |||||||||||||||
Johnson Controls International PLC | 87,229 | 2,954,446 | |||||||||||||
|
| ||||||||||||||
Construction & Engineering - 0.20% | |||||||||||||||
AECOMA | 18,481 | 636,486 | |||||||||||||
|
| ||||||||||||||
Electrical Equipment - 0.16% | |||||||||||||||
Eaton Corp. PLC | 6,983 | 523,934 | |||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 1.10% | |||||||||||||||
General Electric Co. | 160,884 | 2,263,638 | |||||||||||||
Honeywell International, Inc. | 9,002 | 1,302,409 | |||||||||||||
|
| ||||||||||||||
3,566,047 | |||||||||||||||
|
| ||||||||||||||
Machinery - 0.93% | |||||||||||||||
CNH Industrial N.V. | 115,580 | 1,415,855 | |||||||||||||
Cummins, Inc. | 7,972 | 1,274,404 | |||||||||||||
PACCAR, Inc. | 5,339 | 339,934 | |||||||||||||
|
| ||||||||||||||
3,030,193 | |||||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 0.44% | |||||||||||||||
AerCap Holdings N.V.A | 27,191 | 1,417,467 | |||||||||||||
|
| ||||||||||||||
Transportation Infrastructure - 0.20% | |||||||||||||||
Macquarie Infrastructure Corp. | 16,900 | 640,510 | |||||||||||||
|
| ||||||||||||||
Total Industrials | 19,897,658 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 6.94% | |||||||||||||||
Communications Equipment - 1.19% | |||||||||||||||
Cisco Systems, Inc. | 44,871 | 1,987,337 | |||||||||||||
Telefonaktiebolaget LM Ericsson, Sponsored ADR | 248,620 | 1,877,081 | |||||||||||||
|
| ||||||||||||||
3,864,418 | |||||||||||||||
|
|
See accompanying notes
12
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 64.53% (continued) | |||||||||||||||
Information Technology - 6.94% (continued) | |||||||||||||||
Electronic Equipment, Instruments & Components - 0.58% | |||||||||||||||
Corning, Inc. | 56,895 | $ | 1,537,303 | ||||||||||||
TE Connectivity Ltd. | 3,658 | 335,621 | |||||||||||||
|
| ||||||||||||||
1,872,924 | |||||||||||||||
|
| ||||||||||||||
IT Services - 0.48% | |||||||||||||||
First Data Corp., Class AA | 66,000 | 1,194,600 | |||||||||||||
Teradata Corp.A | 9,018 | 369,017 | |||||||||||||
|
| ||||||||||||||
1,563,617 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 0.95% | |||||||||||||||
Micron Technology, Inc.A | 36,335 | 1,670,683 | |||||||||||||
QUALCOMM, Inc. | 27,484 | 1,401,959 | |||||||||||||
|
| ||||||||||||||
3,072,642 | |||||||||||||||
|
| ||||||||||||||
Software - 2.79% | |||||||||||||||
Microsoft Corp. | 51,033 | 4,772,606 | |||||||||||||
Oracle Corp. | 93,182 | 4,255,622 | |||||||||||||
|
| ||||||||||||||
9,028,228 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 0.95% | |||||||||||||||
Hewlett Packard Enterprise Co. | 179,808 | 3,065,726 | |||||||||||||
|
| ||||||||||||||
Total Information Technology | 22,467,555 | ||||||||||||||
|
| ||||||||||||||
Materials - 2.49% | |||||||||||||||
Chemicals - 1.63% | |||||||||||||||
Air Products & Chemicals, Inc. | 13,582 | 2,204,223 | |||||||||||||
DowDuPont, Inc. | 36,890 | 2,332,923 | |||||||||||||
Eastman Chemical Co. | 7,085 | 723,237 | |||||||||||||
|
| ||||||||||||||
5,260,383 | |||||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.56% | |||||||||||||||
Crown Holdings, Inc.A | 19,335 | 963,657 | |||||||||||||
International Paper Co. | 16,625 | 857,185 | |||||||||||||
|
| ||||||||||||||
1,820,842 | |||||||||||||||
|
| ||||||||||||||
Metals & Mining - 0.30% | |||||||||||||||
Reliance Steel & Aluminum Co. | 11,087 | 974,769 | |||||||||||||
|
| ||||||||||||||
Total Materials | 8,055,994 | ||||||||||||||
|
| ||||||||||||||
Telecommunication Services - 1.24% | |||||||||||||||
Diversified Telecommunication Services - 0.73% | |||||||||||||||
AT&T, Inc. | 41,173 | 1,346,357 | |||||||||||||
Verizon Communications, Inc. | 20,795 | 1,026,234 | |||||||||||||
|
| ||||||||||||||
2,372,591 | |||||||||||||||
|
| ||||||||||||||
Wireless Telecommunication Services - 0.51% | |||||||||||||||
Vodafone Group PLC, Sponsored ADR | 56,032 | 1,647,901 | |||||||||||||
|
| ||||||||||||||
Total Telecommunication Services | 4,020,492 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
13
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 64.53% (continued) | |||||||||||||||
Utilities - 0.84% | |||||||||||||||
Electric Utilities - 0.84% | |||||||||||||||
Entergy Corp. | 14,236 | $ | 1,161,515 | ||||||||||||
PPL Corp. | 26,347 | 766,698 | |||||||||||||
Southern Co. | 17,343 | 799,859 | |||||||||||||
|
| ||||||||||||||
2,728,072 | |||||||||||||||
|
| ||||||||||||||
Total Utilities | 2,728,072 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $160,141,378) | 208,944,888 | ||||||||||||||
|
| ||||||||||||||
Principal Amount | |||||||||||||||
CORPORATE OBLIGATIONS - 11.13% | |||||||||||||||
Basic Materials - 0.21% | |||||||||||||||
Dow Chemical Co., | |||||||||||||||
4.125%, Due 11/15/2021 | $ | 145,000 | 148,192 | ||||||||||||
3.500%, Due 10/1/2024 | 299,000 | 292,337 | |||||||||||||
EI du Pont de Nemours & Co., 2.200%, Due 5/1/2020 | 70,000 | 69,006 | |||||||||||||
Nucor Corp., | |||||||||||||||
4.125%, Due 9/15/2022 | 77,000 | 79,322 | |||||||||||||
4.000%, Due 8/1/2023 | 80,000 | 81,684 | |||||||||||||
|
| ||||||||||||||
670,541 | |||||||||||||||
|
| ||||||||||||||
Communications - 0.93% | |||||||||||||||
Amazon.com, Inc., 3.875%, Due 8/22/2037C | 70,000 | 69,384 | |||||||||||||
AT&T, Inc., | |||||||||||||||
4.450%, Due 4/1/2024 | 80,000 | 81,941 | |||||||||||||
3.400%, Due 5/15/2025 | 169,000 | 160,944 | |||||||||||||
4.500%, Due 5/15/2035 | 106,000 | 101,057 | |||||||||||||
6.350%, Due 3/15/2040 | 60,000 | 68,201 | |||||||||||||
CBS Corp., 3.375%, Due 3/1/2022 | 337,000 | 333,892 | |||||||||||||
Charter Communications Operating LLC, 3.750%, Due 2/15/2028 | 130,000 | 118,600 | |||||||||||||
Comcast Corp., | |||||||||||||||
3.150%, Due 3/1/2026 | 84,000 | 79,989 | |||||||||||||
3.900%, Due 3/1/2038 | 90,000 | 85,202 | |||||||||||||
6.550%, Due 7/1/2039 | 217,000 | 278,823 | |||||||||||||
eBay, Inc., 2.150%, Due 6/5/2020 | 95,000 | 93,192 | |||||||||||||
NBCUniversal Enterprise, Inc., 2.708%, Due 4/1/2021, (3-mo. USD LIBOR + 0.400%)C D | 735,000 | 738,994 | |||||||||||||
RELX Capital, Inc., 3.500%, Due 3/16/2023 | 55,000 | 54,470 | |||||||||||||
Time Warner, Inc., | |||||||||||||||
4.875%, Due 3/15/2020 | 217,000 | 224,135 | |||||||||||||
4.750%, Due 3/29/2021 | 157,000 | 163,217 | |||||||||||||
Verizon Communications, Inc., | |||||||||||||||
4.600%, Due 4/1/2021 | 173,000 | 179,828 | |||||||||||||
4.125%, Due 3/16/2027 | 180,000 | 179,973 | |||||||||||||
|
| ||||||||||||||
3,011,842 | |||||||||||||||
|
| ||||||||||||||
Consumer, Cyclical - 1.93% | |||||||||||||||
American Honda Finance Corp., | |||||||||||||||
1.700%, Due 2/22/2019 | 140,000 | 139,049 | |||||||||||||
3.875%, Due 9/21/2020C | 250,000 | 254,807 | |||||||||||||
Costco Wholesale Corp., 2.150%, Due 5/18/2021 | 265,000 | 258,938 | |||||||||||||
CVS Health Corp., 2.125%, Due 6/1/2021 | 110,000 | 106,100 | |||||||||||||
Daimler Finance North America LLC, | |||||||||||||||
2.250%, Due 9/3/2019C | 169,000 | 167,518 | |||||||||||||
2.450%, Due 5/18/2020C | 313,000 | 308,467 | |||||||||||||
2.354%, Due 2/22/2021C E | 575,000 | 576,100 | |||||||||||||
Delphi Corp., 4.150%, Due 3/15/2024 | 155,000 | 157,126 | |||||||||||||
Dollar General Corp., 4.125%, Due 5/1/2028 | 50,000 | 49,592 | |||||||||||||
Dollar Tree, Inc., 3.700%, Due 5/15/2023 | 85,000 | 84,379 | |||||||||||||
Ford Motor Credit Co. LLC, | |||||||||||||||
3.025%, Due 6/15/2018, (3-mo. USD LIBOR + 0.900%)D | 472,000 | 472,459 | |||||||||||||
3.331%, Due 1/9/2020, (3-mo. USD LIBOR + 1.000%)D | 222,000 | 224,224 |
See accompanying notes
14
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 11.13% (continued) | |||||||||||||||
Consumer, Cyclical - 1.93% (continued) | |||||||||||||||
Ford Motor Credit Co. LLC, (continued) | |||||||||||||||
2.835%, Due 4/5/2021E | $ | 470,000 | $ | 471,930 | |||||||||||
5.875%, Due 8/2/2021 | 200,000 | 212,816 | |||||||||||||
3.810%, Due 1/9/2024 | 95,000 | 92,579 | |||||||||||||
General Motors Financial Co., Inc., | |||||||||||||||
3.272%, Due 4/13/2020, (3-mo. USD LIBOR + 0.930%)D | 805,000 | 812,416 | |||||||||||||
3.150%, Due 6/30/2022 | 90,000 | 87,560 | |||||||||||||
Home Depot, Inc., | |||||||||||||||
2.700%, Due 4/1/2023 | 72,000 | 70,200 | |||||||||||||
3.350%, Due 9/15/2025 | 65,000 | 64,125 | |||||||||||||
McDonald’s Corp., 3.700%, Due 1/30/2026 | 183,000 | 182,654 | |||||||||||||
Nissan Motor Acceptance Corp., 2.350%, Due 3/4/2019C | 289,000 | 288,107 | |||||||||||||
PACCAR Financial Corp., | |||||||||||||||
1.300%, Due 5/10/2019 | 58,000 | 57,265 | |||||||||||||
2.200%, Due 9/15/2019 | 92,000 | 91,432 | |||||||||||||
Toyota Motor Credit Corp., 2.125%, Due 7/18/2019 | 320,000 | 317,854 | |||||||||||||
Volkswagen Group of America Finance LLC, 2.450%, Due 11/20/2019C | 313,000 | 309,447 | |||||||||||||
Walgreens Boots Alliance, Inc., 3.800%, Due 11/18/2024 | 145,000 | 142,909 | |||||||||||||
Walmart, Inc., 7.550%, Due 2/15/2030 | 169,000 | 231,948 | |||||||||||||
|
| ||||||||||||||
6,232,001 | |||||||||||||||
|
| ||||||||||||||
Consumer, Non-Cyclical - 0.98% | |||||||||||||||
Abbott Laboratories, | |||||||||||||||
2.350%, Due 11/22/2019 | 57,000 | 56,503 | |||||||||||||
4.900%, Due 11/30/2046 | 90,000 | 97,387 | |||||||||||||
AbbVie, Inc., | |||||||||||||||
3.200%, Due 5/14/2026 | 85,000 | 79,345 | |||||||||||||
4.300%, Due 5/14/2036 | 87,000 | 84,133 | |||||||||||||
Altria Group, Inc., 4.750%, Due 5/5/2021 | 145,000 | 151,418 | |||||||||||||
Amgen, Inc., 4.400%, Due 5/1/2045 | 95,000 | 92,427 | |||||||||||||
Anheuser-Busch InBev Finance, Inc., | |||||||||||||||
2.650%, Due 2/1/2021 | 170,000 | 168,028 | |||||||||||||
3.650%, Due 2/1/2026 | 170,000 | 166,209 | |||||||||||||
Anheuser-Busch InBev Worldwide, Inc., 4.375%, Due 4/15/2038 | 35,000 | 34,587 | |||||||||||||
Anthem, Inc., 2.500%, Due 11/21/2020 | 90,000 | 88,490 | |||||||||||||
Baxalta, Inc., 4.000%, Due 6/23/2025 | 67,000 | 65,632 | |||||||||||||
Bayer US Finance LLC, 2.375%, Due 10/8/2019C | 300,000 | 297,104 | |||||||||||||
Becton Dickinson and Co., 3.125%, Due 11/8/2021 | 94,000 | 92,485 | |||||||||||||
Celgene Corp., 5.250%, Due 8/15/2043 | 70,000 | 73,550 | |||||||||||||
CVS Health Corp., 5.050%, Due 3/25/2048 | 55,000 | 55,874 | |||||||||||||
General Mills, Inc., 2.200%, Due 10/21/2019 | 289,000 | 285,354 | |||||||||||||
Genzyme Corp., 5.000%, Due 6/15/2020 | 39,000 | 40,513 | |||||||||||||
Humana, Inc., 3.150%, Due 12/1/2022 | 145,000 | 142,948 | |||||||||||||
Kaiser Foundation Hospitals, 4.150%, Due 5/1/2047 | 45,000 | 45,412 | |||||||||||||
Kraft Heinz Foods Co., 5.000%, Due 7/15/2035 | 65,000 | 65,886 | |||||||||||||
Medtronic, Inc., 3.500%, Due 3/15/2025 | 313,000 | 309,900 | |||||||||||||
Molson Coors Brewing Co., 3.000%, Due 7/15/2026 | 135,000 | 123,607 | |||||||||||||
Philip Morris International, Inc., 2.625%, Due 3/6/2023 | 85,000 | 81,662 | |||||||||||||
Reynolds American, Inc., 5.850%, Due 8/15/2045 | 65,000 | 73,132 | |||||||||||||
UnitedHealth Group, Inc., | |||||||||||||||
1.625%, Due 3/15/2019 | 120,000 | 118,984 | |||||||||||||
3.950%, Due 10/15/2042 | 80,000 | 76,843 | |||||||||||||
Zimmer Biomet Holdings, Inc., 3.550%, Due 4/1/2025 | 135,000 | 130,039 | |||||||||||||
Zoetis, Inc., 3.000%, Due 9/12/2027 | 95,000 | 87,672 | |||||||||||||
|
| ||||||||||||||
3,185,124 | |||||||||||||||
|
| ||||||||||||||
Energy - 0.31% | |||||||||||||||
Buckeye Partners LP, 4.875%, Due 2/1/2021 | 80,000 | 81,977 | |||||||||||||
Chevron Corp., 1.790%, Due 11/16/2018 | 100,000 | 99,718 | |||||||||||||
Columbia Pipeline Group, Inc., 4.500%, Due 6/1/2025 | 101,000 | 101,868 | |||||||||||||
Enterprise Products Operating LLC, 6.125%, Due 10/15/2039 | 65,000 | 77,781 | |||||||||||||
EOG Resources, Inc., 4.150%, Due 1/15/2026 | 70,000 | 71,547 | |||||||||||||
Marathon Petroleum Corp., 3.625%, Due 9/15/2024 | 80,000 | 78,592 | |||||||||||||
MPLX LP, | |||||||||||||||
4.875%, Due 12/1/2024 | 87,000 | 90,189 | |||||||||||||
5.200%, Due 3/1/2047 | 46,000 | 47,043 |
See accompanying notes
15
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 11.13% (continued) | |||||||||||||||
Energy - 0.31% (continued) | |||||||||||||||
Phillips 66, 4.300%, Due 4/1/2022 | $ | 82,000 | $ | 84,874 | |||||||||||
Phillips 66 Partners LP, | |||||||||||||||
3.550%, Due 10/1/2026 | 53,000 | 50,030 | |||||||||||||
3.750%, Due 3/1/2028 | 70,000 | 66,729 | |||||||||||||
Spectra Energy Partners LP, 3.375%, Due 10/15/2026 | 63,000 | 58,365 | |||||||||||||
Sunoco Logistics Partners Operations LP, 4.250%, Due 4/1/2024 | 48,000 | 47,230 | |||||||||||||
TC PipeLines LP, 3.900%, Due 5/25/2027 | 55,000 | 52,189 | |||||||||||||
|
| ||||||||||||||
1,008,132 | |||||||||||||||
|
| ||||||||||||||
Financial - 4.16% | |||||||||||||||
American Campus Communities Operating Partnership LP, 3.625%, Due 11/15/2027 | 85,000 | 79,190 | |||||||||||||
American Express Co., | |||||||||||||||
3.400%, Due 2/27/2023 | 175,000 | 173,624 | |||||||||||||
4.050%, Due 12/3/2042 | 110,000 | 107,316 | |||||||||||||
American International Group, Inc., 4.875%, Due 6/1/2022 | 289,000 | 302,554 | |||||||||||||
Bank of America Corp., | |||||||||||||||
3.124%, Due 1/20/2023, (3-mo. USD LIBOR + 1.160%)D | 265,000 | 260,856 | |||||||||||||
4.125%, Due 1/22/2024 | 193,000 | 197,560 | |||||||||||||
6.110%, Due 1/29/2037 | 176,000 | 205,012 | |||||||||||||
5.000%, Due 1/21/2044 | 245,000 | 264,886 | |||||||||||||
Bank of New York Mellon Corp., | |||||||||||||||
2.200%, Due 3/4/2019 | 176,000 | 175,628 | |||||||||||||
3.250%, Due 5/16/2027 | 175,000 | 167,557 | |||||||||||||
BB&T Corp., 2.750%, Due 4/1/2022 | 205,000 | 200,439 | |||||||||||||
Boston Properties LP, 3.650%, Due 2/1/2026 | 175,000 | 168,834 | |||||||||||||
Capital One Financial Corp., 2.450%, Due 4/24/2019 | 135,000 | 134,599 | |||||||||||||
CBOE Global Markets, Inc., 3.650%, Due 1/12/2027 | 125,000 | 120,595 | |||||||||||||
Chubb INA Holdings, Inc., 3.350%, Due 5/3/2026 | 70,000 | 68,119 | |||||||||||||
Citibank NA, 2.189%, Due 2/12/2021E | 510,000 | 510,355 | |||||||||||||
Citigroup, Inc., | |||||||||||||||
3.700%, Due 1/12/2026 | 178,000 | 172,715 | |||||||||||||
3.887%, Due 1/10/2028, (3-mo. USD LIBOR + 1.563%)D | 175,000 | 170,100 | |||||||||||||
5.875%, Due 1/30/2042 | 145,000 | 171,820 | |||||||||||||
Crown Castle International Corp., 3.400%, Due 2/15/2021 | 84,000 | 84,069 | |||||||||||||
Digital Realty Trust LP, 3.700%, Due 8/15/2027 | 95,000 | 90,261 | |||||||||||||
ERP Operating LP, 3.000%, Due 4/15/2023 | 77,000 | 74,926 | |||||||||||||
Goldman Sachs Group, Inc., | |||||||||||||||
5.750%, Due 1/24/2022 | 385,000 | 414,321 | |||||||||||||
2.556%, Due 2/23/2023E | 1,040,000 | 1,040,437 | |||||||||||||
2.908%, Due 6/5/2023, (3-mo. USD LIBOR + 1.053%)D | 225,000 | 217,556 | |||||||||||||
3.500%, Due 1/23/2025 | 95,000 | 91,809 | |||||||||||||
3.272%, Due 9/29/2025E | 85,000 | 80,840 | |||||||||||||
HCP, Inc., 2.625%, Due 2/1/2020 | 85,000 | 83,975 | |||||||||||||
Intercontinental Exchange, Inc., 2.750%, Due 12/1/2020 | 92,000 | 91,133 | |||||||||||||
JPMorgan Chase & Co., | |||||||||||||||
3.625%, Due 5/13/2024 | 434,000 | 430,893 | |||||||||||||
3.782%, Due 2/1/2028, (3-mo. USD LIBOR + 1.337%)D | 160,000 | 155,284 | |||||||||||||
3.882%, Due 7/24/2038, (3-mo. USD LIBOR + 1.360%)D | 140,000 | 130,346 | |||||||||||||
5.500%, Due 10/15/2040 | 313,000 | 360,934 | |||||||||||||
JPMorgan Chase Bank NA, 2.673%, Due 9/21/2018, (3-mo. USD LIBOR + 0.450%)D | 217,000 | 217,295 | |||||||||||||
KeyCorp, 5.100%, Due 3/24/2021 | 60,000 | 62,961 | |||||||||||||
Liberty Mutual Group, Inc., 4.250%, Due 6/15/2023C | 113,000 | 114,600 | |||||||||||||
Mastercard, Inc., 3.375%, Due 4/1/2024 | 120,000 | 120,190 | |||||||||||||
MetLife, Inc., | |||||||||||||||
6.375%, Due 6/15/2034 | 169,000 | 208,299 | |||||||||||||
4.721%, Due 12/15/2044 | 193,000 | 200,981 | |||||||||||||
Metropolitan Life Global Funding I, | |||||||||||||||
2.398%, Due 9/19/2019C E | 355,000 | 355,530 | |||||||||||||
2.561%, Due 1/8/2021C E | 480,000 | 480,133 | |||||||||||||
Morgan Stanley, | |||||||||||||||
7.300%, Due 5/13/2019 | 361,000 | 377,328 | |||||||||||||
5.625%, Due 9/23/2019 | 169,000 | 174,964 | |||||||||||||
3.700%, Due 10/23/2024 | 235,000 | 231,982 | |||||||||||||
3.591%, Due 7/22/2028, (3-mo. USD LIBOR + 1.340%)D | 145,000 | 137,853 |
See accompanying notes
16
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 11.13% (continued) | |||||||||||||||
Financial - 4.16% (continued) | |||||||||||||||
National Rural Utilities Cooperative Finance Corp., | |||||||||||||||
1.650%, Due 2/8/2019 | $ | 92,000 | $ | 91,252 | |||||||||||
2.950%, Due 2/7/2024 | 90,000 | 86,974 | |||||||||||||
PNC Financial Services Group, Inc., 3.300%, Due 3/8/2022 | 160,000 | 159,374 | |||||||||||||
Prudential Financial, Inc., 4.600%, Due 5/15/2044 | 313,000 | 323,288 | |||||||||||||
Public Storage, 2.370%, Due 9/15/2022 | 125,000 | 119,727 | |||||||||||||
Raymond James Financial, Inc., 3.625%, Due 9/15/2026 | 125,000 | 121,026 | |||||||||||||
Simon Property Group LP, | |||||||||||||||
2.200%, Due 2/1/2019 | 240,000 | 239,238 | |||||||||||||
3.375%, Due 10/1/2024 | 313,000 | 304,558 | |||||||||||||
State Street Corp., 3.550%, Due 8/18/2025 | 135,000 | 134,281 | |||||||||||||
SunTrust Bank, 2.450%, Due 8/1/2022 | 140,000 | 134,434 | |||||||||||||
Travelers Companies, Inc., 4.000%, Due 5/30/2047 | 90,000 | 87,748 | |||||||||||||
US Bancorp, 1.950%, Due 11/15/2018 | 255,000 | 254,509 | |||||||||||||
Ventas Realty LP, 5.700%, Due 9/30/2043 | 65,000 | 72,456 | |||||||||||||
Visa, Inc., | |||||||||||||||
2.800%, Due 12/14/2022 | 95,000 | 93,371 | |||||||||||||
3.150%, Due 12/14/2025 | 130,000 | 126,769 | |||||||||||||
Wells Fargo & Co., | |||||||||||||||
2.150%, Due 1/30/2020, Series N | 70,000 | 69,077 | |||||||||||||
2.550%, Due 12/7/2020 | 110,000 | 108,387 | |||||||||||||
3.387%, Due 7/26/2021, (3-mo. USD LIBOR + 1.025%)D | 1,087,000 | 1,107,230 | |||||||||||||
3.000%, Due 10/23/2026 | 65,000 | 59,812 | |||||||||||||
4.750%, Due 12/7/2046 | 90,000 | 88,802 | |||||||||||||
|
| ||||||||||||||
13,462,972 | |||||||||||||||
|
| ||||||||||||||
Industrial - 0.85% | |||||||||||||||
BAE Systems Holdings, Inc., 3.800%, Due 10/7/2024C | 313,000 | 312,184 | |||||||||||||
Burlington Northern Santa Fe LLC, | |||||||||||||||
3.650%, Due 9/1/2025 | 65,000 | 65,373 | |||||||||||||
5.750%, Due 5/1/2040 | 202,000 | 243,630 | |||||||||||||
Caterpillar Financial Services Corp., 1.350%, Due 5/18/2019 | 125,000 | 123,304 | |||||||||||||
CSX Corp., 5.500%, Due 4/15/2041 | 157,000 | 176,850 | |||||||||||||
Eaton Corp., | |||||||||||||||
5.600%, Due 5/15/2018 | 77,000 | 77,085 | |||||||||||||
2.750%, Due 11/2/2022 | 75,000 | 72,654 | |||||||||||||
General Electric Co., | |||||||||||||||
5.625%, Due 5/1/2018 | 181,000 | 181,000 | |||||||||||||
6.000%, Due 8/7/2019 | 169,000 | 175,426 | |||||||||||||
5.500%, Due 1/8/2020 | 120,000 | 124,717 | |||||||||||||
John Deere Capital Corp., | |||||||||||||||
1.950%, Due 6/22/2020 | 150,000 | 146,900 | |||||||||||||
2.150%, Due 9/8/2022 | 90,000 | 85,672 | |||||||||||||
Martin Marietta Materials, Inc., 4.250%, Due 12/15/2047 | 95,000 | 85,706 | |||||||||||||
Northrop Grumman Corp., | |||||||||||||||
5.050%, Due 8/1/2019 | 72,000 | 73,898 | |||||||||||||
3.850%, Due 4/15/2045 | 155,000 | 142,132 | |||||||||||||
Stanley Black & Decker, Inc., 2.451%, Due 11/17/2018 | 185,000 | 184,834 | |||||||||||||
Union Pacific Corp., 4.100%, Due 9/15/2067 | 90,000 | 83,765 | |||||||||||||
United Technologies Corp., | |||||||||||||||
1.900%, Due 5/4/2020 | 135,000 | 132,443 | |||||||||||||
6.125%, Due 7/15/2038 | 217,000 | 259,527 | |||||||||||||
|
| ||||||||||||||
2,747,100 | |||||||||||||||
|
| ||||||||||||||
Technology - 0.89% | |||||||||||||||
Analog Devices, Inc., 3.900%, Due 12/15/2025 | 95,000 | 94,524 | |||||||||||||
Apple, Inc., 2.850%, Due 5/11/2024 | 240,000 | 232,798 | |||||||||||||
Autodesk, Inc., 3.500%, Due 6/15/2027 | 95,000 | 89,605 | |||||||||||||
Broadcom Corp., 2.375%, Due 1/15/2020 | 41,000 | 40,416 | |||||||||||||
Broadridge Financial Solutions, Inc., 3.400%, Due 6/27/2026 | 90,000 | 85,380 | |||||||||||||
Dell International LLC / EMC Corp., 4.420%, Due 6/15/2021C | 210,000 | 213,927 | |||||||||||||
Hewlett Packard Enterprise Co., 6.350%, Due 10/15/2045 | 1,178,000 | 1,210,372 | |||||||||||||
HP, Inc., 4.050%, Due 9/15/2022 | 145,000 | 147,574 | |||||||||||||
Intel Corp., 3.300%, Due 10/1/2021 | 116,000 | 117,137 |
See accompanying notes
17
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 11.13% (continued) | |||||||||||||||
Technology - 0.89% (continued) | |||||||||||||||
Microsoft Corp., 4.450%, Due 11/3/2045 | $ | 135,000 | $ | 144,342 | |||||||||||
Oracle Corp., | |||||||||||||||
2.500%, Due 5/15/2022 | 115,000 | 112,249 | |||||||||||||
4.300%, Due 7/8/2034 | 157,000 | 163,276 | |||||||||||||
QUALCOMM, Inc., | |||||||||||||||
2.100%, Due 5/20/2020 | 85,000 | 84,696 | |||||||||||||
3.000%, Due 5/20/2022 | 65,000 | 63,368 | |||||||||||||
Xilinx, Inc., 2.950%, Due 6/1/2024 | 90,000 | 85,508 | |||||||||||||
|
| ||||||||||||||
2,885,172 | |||||||||||||||
|
| ||||||||||||||
Utilities - 0.87% | |||||||||||||||
Berkshire Hathaway Energy Co., 6.125%, Due 4/1/2036 | 287,000 | 359,714 | |||||||||||||
Consolidated Edison Co. of New York, Inc., | |||||||||||||||
5.500%, Due 12/1/2039, Series 09-C | 169,000 | 200,281 | |||||||||||||
4.625%, Due 12/1/2054 | 55,000 | 58,607 | |||||||||||||
Delmarva Power & Light Co., 3.500%, Due 11/15/2023 | 106,000 | 105,812 | |||||||||||||
Dominion Energy, Inc., 2.579%, Due 7/1/2020 | 90,000 | 88,603 | |||||||||||||
Duke Energy Corp., 3.550%, Due 9/15/2021 | 180,000 | 181,147 | |||||||||||||
Duke Energy Progress LLC, 4.150%, Due 12/1/2044 | 125,000 | 127,048 | |||||||||||||
Edison International, 2.950%, Due 3/15/2023 | 82,000 | 79,141 | |||||||||||||
Entergy Louisiana, LLC, 4.000%, Due 3/15/2033 | 67,000 | 66,844 | |||||||||||||
Florida Power & Light Co., 3.950%, Due 3/1/2048 | 50,000 | 49,760 | |||||||||||||
Georgia Power Co., 1.950%, Due 12/1/2018 | 75,000 | 74,772 | |||||||||||||
MidAmerican Energy Co., 3.100%, Due 5/1/2027 | 125,000 | 119,570 | |||||||||||||
National Fuel Gas Co., 3.950%, Due 9/15/2027 | 125,000 | 119,552 | |||||||||||||
Nevada Power Co., 2.750%, Due 4/15/2020, Series BB | 50,000 | 49,853 | |||||||||||||
NiSource, Inc., | |||||||||||||||
3.490%, Due 5/15/2027 | 70,000 | 67,080 | |||||||||||||
3.950%, Due 3/30/2048 | 95,000 | 87,812 | |||||||||||||
Southern Co., | |||||||||||||||
2.150%, Due 9/1/2019 | 92,000 | 91,004 | |||||||||||||
2.750%, Due 6/15/2020 | 241,000 | 238,787 | |||||||||||||
Southern Power Co., | |||||||||||||||
4.150%, Due 12/1/2025 | 84,000 | 84,968 | |||||||||||||
4.950%, Due 12/15/2046, Series F | 87,000 | 88,625 | |||||||||||||
Southwestern Electric Power Co., 3.550%, Due 2/15/2022 | 289,000 | 290,285 | |||||||||||||
Union Electric Co., 6.700%, Due 2/1/2019 | 96,000 | 98,721 | |||||||||||||
WEC Energy Group, Inc., 3.550%, Due 6/15/2025 | 94,000 | 92,340 | |||||||||||||
|
| ||||||||||||||
2,820,326 | |||||||||||||||
|
| ||||||||||||||
Total Corporate Obligations (Cost $35,624,687) | 36,023,210 | ||||||||||||||
|
| ||||||||||||||
FOREIGN CORPORATE OBLIGATIONS - 1.85% | |||||||||||||||
Basic Materials - 0.09% | |||||||||||||||
LYB International Finance II B.V., 3.500%, Due 3/2/2027 | 145,000 | 137,492 | |||||||||||||
Nutrien Ltd., 4.000%, Due 12/15/2026 | 94,000 | 91,933 | |||||||||||||
Rio Tinto Finance USA Ltd., 3.750%, Due 6/15/2025 | 65,000 | 65,607 | |||||||||||||
|
| ||||||||||||||
295,032 | |||||||||||||||
|
| ||||||||||||||
Communications - 0.53% | |||||||||||||||
Alibaba Group Holding Ltd., 3.600%, Due 11/28/2024 | 313,000 | 307,803 | |||||||||||||
America Movil S.A.B. de C.V., 6.375%, Due 3/1/2035 | 169,000 | 201,754 | |||||||||||||
Bell Canada, Inc., 4.464%, Due 4/1/2048 | 45,000 | 44,362 | |||||||||||||
Deutsche Telekom International Finance B.V., 4.875%, Due 3/6/2042C | 150,000 | 158,933 | |||||||||||||
Rogers Communications, Inc., 3.625%, Due 12/15/2025 | 115,000 | 112,088 | |||||||||||||
TELUS Corp., 2.800%, Due 2/16/2027 | 99,000 | 90,366 | |||||||||||||
Thomson Reuters Corp., | |||||||||||||||
4.300%, Due 11/23/2023 | 145,000 | 146,856 | |||||||||||||
3.850%, Due 9/29/2024 | 193,000 | 189,254 | |||||||||||||
Vodafone Group PLC, 6.150%, Due 2/27/2037 | 393,000 | 447,625 | |||||||||||||
|
| ||||||||||||||
1,699,041 | |||||||||||||||
|
| ||||||||||||||
See accompanying notes
18
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
FOREIGN CORPORATE OBLIGATIONS - 1.85% (continued) | |||||||||||||||
Consumer, Non-Cyclical - 0.08% | |||||||||||||||
Coca-Cola Femsa S.A.B. de C.V., 3.875%, Due 11/26/2023 | $ | 65,000 | $ | 65,602 | |||||||||||
Sanofi, 4.000%, Due 3/29/2021 | 105,000 | 107,805 | |||||||||||||
Shire Acquisitions Investments Ireland DAC, 2.875%, Due 9/23/2023 | 105,000 | 99,062 | |||||||||||||
|
| ||||||||||||||
272,469 | |||||||||||||||
|
| ||||||||||||||
Energy - 0.27% | |||||||||||||||
Canadian Natural Resources Ltd., | |||||||||||||||
3.900%, Due 2/1/2025 | 90,000 | 88,759 | |||||||||||||
6.250%, Due 3/15/2038 | 176,000 | 210,499 | |||||||||||||
Husky Energy, Inc., 3.950%, Due 4/15/2022 | 135,000 | 136,756 | |||||||||||||
Shell International Finance B.V., 1.625%, Due 11/10/2018 | 185,000 | 184,322 | |||||||||||||
TransCanada PipeLines Ltd., | |||||||||||||||
3.750%, Due 10/16/2023 | 145,000 | 145,893 | |||||||||||||
6.100%, Due 6/1/2040 | 82,000 | 98,541 | |||||||||||||
|
| ||||||||||||||
864,770 | |||||||||||||||
|
| ||||||||||||||
Financial - 0.74% | |||||||||||||||
ABN AMRO Bank N.V., 1.800%, Due 6/4/2018C | 289,000 | 288,903 | |||||||||||||
Bank of Montreal, 1.750%, Due 9/11/2019 | 160,000 | 157,744 | |||||||||||||
HSBC Holdings PLC, 3.262%, Due 3/13/2023, (3-mo. USD LIBOR + 1.055%)D | 178,000 | 175,133 | |||||||||||||
Macquarie Bank Ltd., 2.662%, Due 4/4/2019C E | 355,000 | 355,031 | |||||||||||||
National Australia Bank Ltd., 2.414%, Due 5/22/2020, (3-mo. USD LIBOR + 0.510%)C D | 470,000 | 472,119 | |||||||||||||
Nordea Bank AB, 4.875%, Due 1/27/2020C | 120,000 | 123,496 | |||||||||||||
Royal Bank of Canada, | |||||||||||||||
2.125%, Due 3/2/2020 | 175,000 | 172,131 | |||||||||||||
3.200%, Due 4/30/2021 | 170,000 | 170,083 | |||||||||||||
Toronto-Dominion Bank, | |||||||||||||||
2.625%, Due 9/10/2018 | 185,000 | 185,155 | |||||||||||||
2.550%, Due 1/25/2021 | 130,000 | 128,076 | |||||||||||||
Trinity Acquisition PLC, 4.400%, Due 3/15/2026 | 87,000 | 87,104 | |||||||||||||
Westpac Banking Corp., 2.650%, Due 1/25/2021 | 90,000 | 88,897 | |||||||||||||
|
| ||||||||||||||
2,403,872 | |||||||||||||||
|
| ||||||||||||||
Industrial - 0.14% | |||||||||||||||
Canadian National Railway Co., 5.550%, Due 5/15/2018 | 169,000 | 169,186 | |||||||||||||
Ingersoll-Rand Luxembourg Finance S.A., 2.625%, Due 5/1/2020 | 145,000 | 143,435 | |||||||||||||
Johnson Controls International PLC, 5.000%, Due 3/30/2020 | 145,000 | 150,112 | |||||||||||||
|
| ||||||||||||||
462,733 | |||||||||||||||
|
| ||||||||||||||
Total Foreign Corporate Obligations (Cost $5,888,333) | 5,997,917 | ||||||||||||||
|
| ||||||||||||||
FOREIGN SOVEREIGN OBLIGATIONS - 0.17% | |||||||||||||||
European Investment Bank, 2.375%, Due 6/15/2022 | 140,000 | 137,168 | |||||||||||||
Kreditanstalt fuer Wiederaufbau, 2.125%, Due 6/15/2022 | 140,000 | 135,787 | |||||||||||||
Province of Ontario Canada, 2.500%, Due 4/27/2026 | 170,000 | 159,435 | |||||||||||||
Province of Quebec Canada, 2.375%, Due 1/31/2022 | 125,000 | 121,895 | |||||||||||||
|
| ||||||||||||||
Total Foreign Sovereign Obligations (Cost $574,016) | 554,285 | ||||||||||||||
|
| ||||||||||||||
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 0.67% | |||||||||||||||
Ginnie Mae REMIC Trust, | |||||||||||||||
1.147%, Due 12/16/2038, 2013-139 A | 318,597 | 315,043 | |||||||||||||
1.624%, Due 7/16/2039, 2013-78 AB | 591,758 | 577,660 | |||||||||||||
2.586%, Due 9/16/2039, 2014-31 AB | 14,825 | 14,805 | |||||||||||||
1.368%, Due 11/16/2041, 2013-125 AB | 679,905 | 655,146 | |||||||||||||
3.200%, Due 11/16/2044, 2011-92 B | 39,786 | 39,739 | |||||||||||||
GS Mortgage Securities Trust, 3.679%, Due 8/10/2043, 2010-C1 A1C | 21,566 | 21,685 | |||||||||||||
JP Morgan Chase Commercial Mortgage Securities Trust, 4.388%, Due 2/15/2046, 2011-C3 A3C | 2,170 | 2,189 | |||||||||||||
JPMBB Commercial Mortgage Securities Trust, 3.157%, Due 7/15/2045, 2013-C12 ASB | 320,000 | 320,262 | |||||||||||||
WFRBS Commercial Mortgage Trust, 3.660%, Due 3/15/2047, 2014-C19 A3 | 219,000 | 221,111 | |||||||||||||
|
| ||||||||||||||
Total Commercial Mortgage-Backed Obligations (Cost $2,213,758) | 2,167,640 | ||||||||||||||
|
|
See accompanying notes
19
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
ASSET-BACKED OBLIGATIONS - 0.74% | |||||||||||||||
Ally Auto Receivables Trust, 1.750%, Due 12/15/2021, 2017 4 A3 | $ | 285,000 | $ | 280,930 | |||||||||||
Americredit Automobile Receivables Trust, 1.530%, Due 7/8/2021, 2016 4 A3 | 118,000 | 116,984 | |||||||||||||
AmeriCredit Automobile Receivables Trust, 1.900%, Due 3/18/2022, 2017 3 A3 | 185,000 | 181,984 | |||||||||||||
BMW Vehicle Lease Trust, 2.070%, Due 10/20/2020, 2017 2 A3 | 180,000 | 177,999 | |||||||||||||
Capital One Multi-Asset Execution Trust, 1.340%, Due 4/15/2022, 2016 A3 A3 | 318,000 | 313,348 | |||||||||||||
Chase Issuance Trust, 1.370%, Due 6/15/2021, 2016 A2 A | 265,000 | 261,182 | |||||||||||||
Ford Credit Auto Lease Trust, 2.030%, Due 12/15/2020, 2017 B A3 | 170,000 | 168,099 | |||||||||||||
Ford Credit Auto Owner Trust, 2.030%, Due 8/15/2020, 2015 A B | 292,000 | 290,475 | |||||||||||||
GM Financial Automobile Leasing Trust, 2.060%, Due 5/20/2020, 2017 1 A3 | 284,000 | 282,080 | |||||||||||||
GM Financial Consumer Automobile Receivables Trust, 2.320%, Due 7/18/2022, 2018 1 A3 | 95,000 | 93,832 | |||||||||||||
Nissan Auto Receivables Owner Trust, 2.120%, Due 4/18/2022, 2017 C A3 | 100,000 | 98,560 | |||||||||||||
World Omni Auto Receivables Trust, 1.950%, Due 2/15/2023, 2017 B A3 | 135,000 | 132,145 | |||||||||||||
|
| ||||||||||||||
Total Asset-Backed Obligations (Cost $2,426,863) | 2,397,618 | ||||||||||||||
|
| ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 4.68% | |||||||||||||||
Federal Home Loan Mortgage Corp., | |||||||||||||||
4.500%, Due 3/1/2019 | 7,720 | 7,783 | |||||||||||||
5.000%, Due 10/1/2020 | 7,719 | 7,853 | |||||||||||||
3.500%, Due 8/1/2026 | 35,924 | 36,406 | |||||||||||||
3.500%, Due 9/1/2028 | 245,318 | 248,757 | |||||||||||||
5.000%, Due 8/1/2033 | 50,507 | 53,931 | |||||||||||||
5.500%, Due 2/1/2034 | 49,705 | 54,452 | |||||||||||||
4.000%, Due 1/1/2041 | 175,282 | 180,160 | |||||||||||||
4.500%, Due 2/1/2041 | 125,810 | 132,434 | |||||||||||||
3.500%, Due 6/1/2042 | 572,369 | 573,056 | |||||||||||||
3.500%, Due 7/1/2042 | 159,861 | 160,053 | |||||||||||||
3.500%, Due 11/1/2047 | 374,918 | 372,635 | |||||||||||||
|
| ||||||||||||||
1,827,520 | |||||||||||||||
|
| ||||||||||||||
Federal National Mortgage Association, | |||||||||||||||
4.500%, Due 9/1/2018 | 1,720 | 1,732 | |||||||||||||
4.000%, Due 8/1/2020 | 16,375 | 16,800 | |||||||||||||
4.000%, Due 5/1/2026 | 149,139 | 153,111 | |||||||||||||
4.000%, Due 6/1/2026 | 216,512 | 224,566 | |||||||||||||
3.500%, Due 1/1/2028E | 112,590 | 114,048 | |||||||||||||
3.000%, Due 4/1/2032 | 233,878 | 232,152 | |||||||||||||
5.000%, Due 3/1/2034E | 55,098 | 59,340 | |||||||||||||
4.500%, Due 4/1/2034 | 94,867 | 99,793 | |||||||||||||
3.500%, Due 6/1/2037 | 323,549 | 325,845 | |||||||||||||
5.500%, Due 6/1/2038 | 10,472 | 11,442 | |||||||||||||
4.500%, Due 1/1/2040 | 138,636 | 145,886 | |||||||||||||
5.000%, Due 5/1/2040 | 223,419 | 240,041 | |||||||||||||
5.000%, Due 6/1/2040 | 170,337 | 183,175 | |||||||||||||
4.000%, Due 9/1/2040 | 118,087 | 121,174 | |||||||||||||
4.000%, Due 1/1/2041 | 231,503 | 237,561 | |||||||||||||
4.500%, Due 10/1/2041 | 150,598 | 158,436 | |||||||||||||
3.000%, Due 6/1/2043 | 910,155 | 885,459 | |||||||||||||
3.500%, Due 7/1/2043 | 157,665 | 157,540 | |||||||||||||
3.000%, Due 8/1/2043 | 792,142 | 770,698 | |||||||||||||
4.000%, Due 11/1/2044E | 137,176 | 141,334 | |||||||||||||
4.000%, Due 7/1/2045 | 773,660 | 790,483 | |||||||||||||
3.500%, Due 8/1/2045 | 147,430 | 146,675 | |||||||||||||
3.500%, Due 11/1/2045 | 1,622,062 | 1,612,741 | |||||||||||||
3.000%, Due 4/1/2046 | 190,856 | 184,404 | |||||||||||||
3.500%, Due 5/1/2046 | 556,057 | 552,862 | |||||||||||||
3.000%, Due 6/1/2046 | 298,777 | 288,675 | |||||||||||||
4.000%, Due 7/1/2046 | 688,421 | 702,830 | |||||||||||||
3.000%, Due 11/1/2046 | 369,478 | 357,452 | |||||||||||||
3.500%, Due 11/1/2046 | 578,963 | 576,184 | |||||||||||||
3.500%, Due 3/1/2047 | 117,865 | 117,150 | |||||||||||||
4.500%, Due 7/1/2047 | 145,680 | 151,881 |
See accompanying notes
20
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 4.68% (continued) | |||||||||||||||
Federal National Mortgage Association, (continued) | |||||||||||||||
4.000%, Due 11/1/2047 | $ | 326,168 | $ | 332,910 | |||||||||||
4.500%, Due 12/1/2047 | 146,438 | 152,991 | |||||||||||||
4.500%, Due 4/1/2048 | 269,367 | 281,373 | |||||||||||||
|
| ||||||||||||||
10,528,744 | |||||||||||||||
|
| ||||||||||||||
Government National Mortgage Association, | |||||||||||||||
6.500%, Due 8/15/2027 | 47,375 | 52,990 | |||||||||||||
6.500%, Due 11/15/2027 | 52,672 | 58,915 | |||||||||||||
7.500%, Due 12/15/2028 | 47,673 | 53,719 | |||||||||||||
5.500%, Due 7/15/2033 | 52,423 | 57,508 | |||||||||||||
6.000%, Due 12/15/2033 | 66,221 | 76,181 | |||||||||||||
5.500%, Due 2/20/2034 | 72,859 | 79,904 | |||||||||||||
5.000%, Due 10/15/2039 | 108,177 | 116,231 | |||||||||||||
3.500%, Due 9/15/2041 | 298,479 | 300,461 | |||||||||||||
3.000%, Due 1/20/2046 | 87,532 | 85,765 | |||||||||||||
3.000%, Due 6/20/2046 | 295,475 | 288,914 | |||||||||||||
3.500%, Due 8/20/2047 | 153,182 | 153,535 | |||||||||||||
3.500%, Due 10/20/2047 | 234,765 | 235,316 | |||||||||||||
4.000%, Due 1/20/2048 | 539,109 | 552,621 | |||||||||||||
4.500%, Due 2/20/2048 | 402,087 | 418,666 | |||||||||||||
4.500%, Due 4/20/2048 | 245,000 | 255,471 | |||||||||||||
|
| ||||||||||||||
2,786,197 | |||||||||||||||
|
| ||||||||||||||
Total U.S. Agency Mortgage-Backed Obligations (Cost $15,452,893) | 15,142,461 | ||||||||||||||
|
| ||||||||||||||
U.S. TREASURY OBLIGATIONS - 13.66% | |||||||||||||||
U.S. Treasury Notes/Bonds, | |||||||||||||||
2.018%, Due 7/31/2018, (3-mo. Treasury money market yield + 0.174%)D | 13,340,000 | 13,347,264 | |||||||||||||
1.984%, Due 1/31/2019, (3-mo. Treasury money market yield + 0.140%)D | 2,496,000 | 2,499,542 | |||||||||||||
1.914%, Due 4/30/2019, (3-mo. Treasury money market yield + 0.070%)D | 3,355,000 | 3,358,941 | |||||||||||||
1.125%, Due 5/31/2019 | 723,000 | 713,793 | |||||||||||||
0.750%, Due 7/15/2019 | 646,000 | 633,787 | |||||||||||||
0.875%, Due 7/31/2019 | 482,000 | 473,207 | |||||||||||||
1.904%, Due 7/31/2019, (3-mo. Treasury money market yield + 0.060%)D | 2,290,000 | 2,292,797 | |||||||||||||
0.875%, Due 9/15/2019 | 1,205,000 | 1,180,335 | |||||||||||||
1.250%, Due 2/29/2020 | 964,000 | 942,837 | |||||||||||||
1.877%, Due 4/30/2020E | 1,410,000 | 1,410,000 | |||||||||||||
1.750%, Due 10/31/2020 | 964,000 | 944,607 | |||||||||||||
1.250%, Due 3/31/2021 | 964,000 | 926,871 | |||||||||||||
1.375%, Due 4/30/2021 | 964,000 | 929,055 | |||||||||||||
2.000%, Due 5/31/2021 | 1,446,000 | 1,418,266 | |||||||||||||
2.000%, Due 11/15/2021 | 1,264,000 | 1,234,819 | |||||||||||||
2.000%, Due 2/15/2022 | 1,801,000 | 1,755,061 | |||||||||||||
1.750%, Due 9/30/2022 | 500,000 | 479,043 | |||||||||||||
1.625%, Due 11/15/2022 | 964,000 | 917,118 | |||||||||||||
2.000%, Due 2/15/2023 | 500,000 | 482,578 | |||||||||||||
2.625%, Due 2/28/2023 | 880,000 | 873,778 | |||||||||||||
2.500%, Due 8/15/2023 | 964,000 | 949,088 | |||||||||||||
2.375%, Due 8/15/2024 | 1,000,000 | 971,211 | |||||||||||||
6.875%, Due 8/15/2025 | 279,000 | 352,161 | |||||||||||||
2.000%, Due 11/15/2026 | 1,595,000 | 1,482,789 | |||||||||||||
5.250%, Due 11/15/2028 | 217,000 | 262,240 | |||||||||||||
4.750%, Due 2/15/2037 | 304,000 | 381,188 | |||||||||||||
4.500%, Due 8/15/2039 | 241,000 | 296,769 | |||||||||||||
3.125%, Due 11/15/2041 | 961,000 | 970,985 | |||||||||||||
2.500%, Due 5/15/2046 | 1,963,000 | 1,743,466 | |||||||||||||
|
| ||||||||||||||
44,223,596 | |||||||||||||||
|
| ||||||||||||||
Total U.S. Treasury Obligations (Cost $44,579,927) | 44,223,596 | ||||||||||||||
|
|
See accompanying notes
21
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
SHORT-TERM INVESTMENTS - 2.37% (Cost $7,674,972) | |||||||||||||||
Investment Companies - 2.37% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%F G | 7,674,972 | $ | 7,674,972 | ||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 0.32% (Cost $1,020,973) | |||||||||||||||
Investment Companies - 0.32% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%F G | 1,020,973 | 1,020,973 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 100.12% (Cost $275,597,800) | 324,147,560 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (0.12%) | (376,120 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 323,771,440 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B All or a portion of this security is on loan at April 30, 2018.
C 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 $5,908,658 or 1.82% of net assets. The Fund has no right to demand registration of these securities.
D 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 April 30, 2018.
E 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.
F The Fund is affiliated by having the same investment advisor.
G 7-day yield.
ADR - American Depositary Receipt.
LIBOR - London Interbank Offered Rate.
LLC - Limited Liability Company.
LP - Limited Partnership.
MLP - Master Limited Partnership.
NVDR - Non Voting Depositary Receipt.
PLC - Public Limited Company.
Futures Contracts Open on April 30, 2018: | ||||||||||||||||
Long Futures | ||||||||||||||||
Equity Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
S&P 500 E-Mini Index Futures | 49 | June 2018 | $ | 6,545,068 | $ | 6,485,150 | $ | (59,918 | ) | |||||||
|
|
|
|
|
| |||||||||||
$ | 6,545,068 | $ | 6,485,150 | $ | (59,918 | ) | ||||||||||
|
|
|
|
|
|
Index Abbreviations: | ||||||||||
S&P 500 | Standard & Poor’s U.S. Equity Large-Cap Index |
See accompanying notes
22
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2018, the investments were classified as described below:
Balanced Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 208,944,888 | $ | - | $ | - | $ | 208,944,888 | ||||||||||||||||||||
Corporate Obligations | - | 36,023,210 | - | 36,023,210 | ||||||||||||||||||||||||
Foreign Corporate Obligations | - | 5,997,917 | - | 5,997,917 | ||||||||||||||||||||||||
Foreign Sovereign Obligations | - | 554,285 | - | 554,285 | ||||||||||||||||||||||||
Commercial Mortgage-Backed Obligations | - | 2,167,640 | - | 2,167,640 | ||||||||||||||||||||||||
Asset-Backed Obligations | - | 2,397,618 | - | 2,397,618 | ||||||||||||||||||||||||
U.S. Agency Mortgage-Backed Obligations | - | 15,142,461 | - | 15,142,461 | ||||||||||||||||||||||||
U.S. Treasury Obligations | - | 44,223,596 | - | 44,223,596 | ||||||||||||||||||||||||
Short-Term Investments | 7,674,972 | - | - | 7,674,972 | ||||||||||||||||||||||||
Securities Lending Collateral | 1,020,973 | - | - | 1,020,973 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 217,640,833 | $ | 106,506,727 | $ | - | $ | 324,147,560 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Liabilities | ||||||||||||||||||||||||||||
Futures Contracts | $ | (59,918 | ) | $ | - | $ | - | $ | (59,918 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Liabilities | $ | (59,918 | ) | $ | - | $ | - | $ | (59,918 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
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 April 30, 2018, there were no transfers between levels.
See accompanying notes
23
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.86% | |||||||||||||||
Consumer Discretionary - 13.68% | |||||||||||||||
Auto Components - 1.77% | |||||||||||||||
Adient PLC | 73,249 | $ | 4,489,431 | ||||||||||||
Dana, Inc. | 247,922 | 5,883,189 | |||||||||||||
Delphi Technologies PLC | 84,727 | 4,101,634 | |||||||||||||
|
| ||||||||||||||
14,474,254 | |||||||||||||||
|
| ||||||||||||||
Diversified Consumer Services - 0.48% | |||||||||||||||
Adtalem Global Education, Inc.A | 81,800 | 3,893,680 | |||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 3.17% | |||||||||||||||
Norwegian Cruise Line Holdings Ltd.A | 141,697 | 7,576,538 | |||||||||||||
Royal Caribbean Cruises Ltd. | 65,320 | 7,066,971 | |||||||||||||
SeaWorld Entertainment, Inc.A B | 198,285 | 2,992,121 | |||||||||||||
Wyndham Worldwide Corp. | 71,801 | 8,200,392 | |||||||||||||
|
| ||||||||||||||
25,836,022 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 1.73% | |||||||||||||||
DR Horton, Inc. | 122,629 | 5,412,844 | |||||||||||||
Newell Brands, Inc. | 81,629 | 2,255,409 | |||||||||||||
Whirlpool Corp. | 41,408 | 6,416,170 | |||||||||||||
|
| ||||||||||||||
14,084,423 | |||||||||||||||
|
| ||||||||||||||
Media - 2.98% | |||||||||||||||
Interpublic Group of Cos, Inc. | 314,335 | 7,415,163 | |||||||||||||
Meredith Corp. | 70,956 | 3,675,521 | |||||||||||||
News Corp., Class A | 333,122 | 5,323,290 | |||||||||||||
Omnicom Group, Inc. | 107,434 | 7,913,588 | |||||||||||||
|
| ||||||||||||||
24,327,562 | |||||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.99% | |||||||||||||||
Dollar General Corp. | 83,465 | 8,056,876 | |||||||||||||
|
| ||||||||||||||
Specialty Retail - 1.99% | |||||||||||||||
Aaron’s, Inc. | 100,511 | 4,198,344 | |||||||||||||
Advance Auto Parts, Inc. | 63,611 | 7,280,279 | |||||||||||||
L Brands, Inc. | 137,315 | 4,793,667 | |||||||||||||
|
| ||||||||||||||
16,272,290 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.57% | |||||||||||||||
Hanesbrands, Inc. | 251,023 | 4,636,395 | |||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 111,581,502 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 1.48% | |||||||||||||||
Beverages - 0.80% | |||||||||||||||
Coca-Cola European Partners PLC | 167,383 | 6,561,413 | |||||||||||||
|
| ||||||||||||||
Household Products - 0.68% | |||||||||||||||
Spectrum Brands Holdings, Inc.B | 76,759 | 5,534,324 | |||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 12,095,737 | ||||||||||||||
|
| ||||||||||||||
Energy - 9.04% | |||||||||||||||
Energy Equipment & Services - 1.79% | |||||||||||||||
Superior Energy Services, Inc.A | 248,098 | 2,662,092 | |||||||||||||
TechnipFMC PLC | 199,268 | 6,567,873 | |||||||||||||
Weatherford International PLCA B | 1,808,960 | 5,336,432 | |||||||||||||
|
| ||||||||||||||
14,566,397 | |||||||||||||||
|
|
See accompanying notes
24
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.86% (continued) | |||||||||||||||
Energy - 9.04% (continued) | |||||||||||||||
Oil, Gas & Consumable Fuels - 7.25% | |||||||||||||||
Cenovus Energy, Inc.B | 605,572 | $ | 6,073,887 | ||||||||||||
Chesapeake Energy Corp.A B | 558,104 | 1,657,569 | |||||||||||||
Devon Energy Corp. | 218,623 | 7,942,574 | |||||||||||||
EQT Corp. | 224,612 | 11,273,276 | |||||||||||||
Golar LNG Ltd. | 227,602 | 7,317,404 | |||||||||||||
Murphy Oil Corp. | 561,812 | 16,916,159 | |||||||||||||
Vermilion Energy, Inc.B | 236,604 | 7,999,581 | |||||||||||||
|
| ||||||||||||||
59,180,450 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 73,746,847 | ||||||||||||||
|
| ||||||||||||||
Financials - 24.15% | |||||||||||||||
Banks - 7.77% | |||||||||||||||
CIT Group, Inc. | 88,214 | 4,670,931 | |||||||||||||
Cullen/Frost Bankers, Inc. | 25,214 | 2,885,742 | |||||||||||||
Fifth Third Bancorp | 489,439 | 16,234,692 | |||||||||||||
FNB Corp. | 417,940 | 5,433,220 | |||||||||||||
KeyCorp | 776,565 | 15,469,175 | |||||||||||||
Pinnacle Financial Partners, Inc. | 42,200 | 2,702,910 | |||||||||||||
Regions Financial Corp. | 431,348 | 8,066,208 | |||||||||||||
Signature BankA | 31,500 | 4,005,225 | |||||||||||||
Valley National Bancorp | 218,371 | 2,740,556 | |||||||||||||
Webster Financial Corp. | 18,633 | 1,121,520 | |||||||||||||
|
| ||||||||||||||
63,330,179 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 3.02% | |||||||||||||||
Apollo Global Management LLC, Class A, MLP | 190,325 | 5,488,973 | |||||||||||||
Franklin Resources, Inc. | 171,895 | 5,782,547 | |||||||||||||
Invesco Ltd. | 202,373 | 5,862,746 | |||||||||||||
KKR & Co. LP | 358,068 | 7,497,944 | |||||||||||||
|
| ||||||||||||||
24,632,210 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 3.50% | |||||||||||||||
Ally Financial, Inc. | 423,206 | 11,045,677 | |||||||||||||
Capital One Financial Corp. | 20,842 | 1,888,702 | |||||||||||||
Discover Financial Services | 63,198 | 4,502,857 | |||||||||||||
Navient Corp. | 345,366 | 4,579,553 | |||||||||||||
SLM Corp.A | 568,622 | 6,527,781 | |||||||||||||
|
| ||||||||||||||
28,544,570 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 1.60% | |||||||||||||||
Leucadia National Corp. | 113,985 | 2,740,200 | |||||||||||||
Voya Financial, Inc. | 197,275 | 10,327,346 | |||||||||||||
|
| ||||||||||||||
13,067,546 | |||||||||||||||
|
| ||||||||||||||
Insurance - 7.14% | |||||||||||||||
Allstate Corp. | 42,369 | 4,144,536 | |||||||||||||
Assurant, Inc. | 47,800 | 4,436,796 | |||||||||||||
Axis Capital Holdings Ltd. | 237,091 | 13,917,242 | |||||||||||||
FNF GroupC | 318,280 | 11,722,252 | |||||||||||||
Hanover Insurance Group, Inc. | 62,193 | 7,142,866 | |||||||||||||
Torchmark Corp. | 26,492 | 2,297,916 | |||||||||||||
Willis Towers Watson PLC | 98,233 | 14,588,583 | |||||||||||||
|
| ||||||||||||||
58,250,191 | |||||||||||||||
|
|
See accompanying notes
25
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.86% (continued) | |||||||||||||||
Financials - 24.15% (continued) | |||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.40% | |||||||||||||||
MFA Financial, Inc. | 433,712 | $ | 3,261,514 | ||||||||||||
|
| ||||||||||||||
Thrifts & Mortgage Finance - 0.72% | |||||||||||||||
New York Community Bancorp, Inc. | 496,477 | 5,898,147 | |||||||||||||
|
| ||||||||||||||
Total Financials | 196,984,357 | ||||||||||||||
|
| ||||||||||||||
Health Care - 7.80% | |||||||||||||||
Health Care Equipment & Supplies - 1.17% | |||||||||||||||
Zimmer Biomet Holdings, Inc. | 83,250 | 9,587,903 | |||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 5.52% | |||||||||||||||
Cardinal Health, Inc. | 249,778 | 16,028,254 | |||||||||||||
Cigna Corp. | 42,198 | 7,250,460 | |||||||||||||
MEDNAX, Inc.A | 232,316 | 10,665,628 | |||||||||||||
Universal Health Services, Inc., Class B | 97,060 | 11,084,252 | |||||||||||||
|
| ||||||||||||||
45,028,594 | |||||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 1.11% | |||||||||||||||
Mylan N.V.A | 233,396 | 9,046,429 | |||||||||||||
|
| ||||||||||||||
Total Health Care | 63,662,926 | ||||||||||||||
|
| ||||||||||||||
Industrials - 15.71% | |||||||||||||||
Aerospace & Defense - 2.42% | |||||||||||||||
Spirit AeroSystems Holdings, Inc., Class A | 110,247 | 8,860,551 | |||||||||||||
TransDigm Group, Inc. | 33,838 | 10,847,448 | |||||||||||||
|
| ||||||||||||||
19,707,999 | |||||||||||||||
|
| ||||||||||||||
Airlines - 0.54% | |||||||||||||||
Alaska Air Group, Inc. | 68,000 | 4,415,240 | |||||||||||||
|
| ||||||||||||||
Building Products - 2.32% | |||||||||||||||
JELD-WEN Holding, Inc.A | 298,586 | 8,393,253 | |||||||||||||
Johnson Controls International PLC | 118,058 | 3,998,624 | |||||||||||||
Owens Corning | 99,085 | 6,489,077 | |||||||||||||
|
| ||||||||||||||
18,880,954 | |||||||||||||||
|
| ||||||||||||||
Commercial Services & Supplies - 0.87% | |||||||||||||||
Republic Services, Inc. | 110,115 | 7,122,238 | |||||||||||||
|
| ||||||||||||||
Construction & Engineering - 1.27% | |||||||||||||||
AECOMA | 144,791 | 4,986,602 | |||||||||||||
KBR, Inc. | 322,787 | 5,387,315 | |||||||||||||
|
| ||||||||||||||
10,373,917 | |||||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 1.04% | |||||||||||||||
Carlisle Companies, Inc. | 78,521 | 8,459,067 | |||||||||||||
|
| ||||||||||||||
Machinery - 3.89% | |||||||||||||||
Dover Corp. | 153,126 | 14,194,780 | |||||||||||||
Snap-on, Inc. | 35,428 | 5,145,917 | |||||||||||||
Stanley Black & Decker, Inc. | 54,041 | 7,651,665 | |||||||||||||
Terex Corp. | 128,807 | 4,704,032 | |||||||||||||
|
| ||||||||||||||
31,696,394 | |||||||||||||||
|
|
See accompanying notes
26
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.86% (continued) | |||||||||||||||
Industrials - 15.71% (continued) | |||||||||||||||
Professional Services - 0.56% | |||||||||||||||
Nielsen Holdings PLC | 145,578 | $ | 4,578,428 | ||||||||||||
|
| ||||||||||||||
Road & Rail - 1.90% | |||||||||||||||
Avis Budget Group, Inc.A | 126,547 | 6,252,687 | |||||||||||||
Ryder System, Inc. | 137,471 | 9,269,670 | |||||||||||||
|
| ||||||||||||||
15,522,357 | |||||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 0.90% | |||||||||||||||
AerCap Holdings N.V.A | 141,300 | 7,365,969 | |||||||||||||
|
| ||||||||||||||
Total Industrials | 128,122,563 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 9.05% | |||||||||||||||
Electronic Equipment, Instruments & Components - 3.07% | |||||||||||||||
Anixter International, Inc.A | 90,300 | 5,318,670 | |||||||||||||
Avnet, Inc. | 290,485 | 11,395,727 | |||||||||||||
Flex Ltd.A | 153,578 | 1,996,514 | |||||||||||||
Keysight Technologies, Inc.A | 123,130 | 6,363,358 | |||||||||||||
|
| ||||||||||||||
25,074,269 | |||||||||||||||
|
| ||||||||||||||
IT Services - 1.82% | |||||||||||||||
Alliance Data Systems Corp. | 24,100 | 4,893,505 | |||||||||||||
Genpact Ltd. | 165,393 | 5,274,383 | |||||||||||||
Total System Services, Inc. | 55,766 | 4,687,690 | |||||||||||||
|
| ||||||||||||||
14,855,578 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 3.00% | |||||||||||||||
Marvell Technology Group Ltd. | 379,124 | 7,605,227 | |||||||||||||
Microchip Technology, Inc. | 131,619 | 11,011,246 | |||||||||||||
Versum Materials, Inc. | 166,725 | 5,865,385 | |||||||||||||
|
| ||||||||||||||
24,481,858 | |||||||||||||||
|
| ||||||||||||||
Software - 0.19% | |||||||||||||||
Micro Focus International PLC, Sponsored ADR | 89,690 | 1,553,431 | |||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 0.97% | |||||||||||||||
Hewlett Packard Enterprise Co. | 462,041 | 7,877,799 | |||||||||||||
|
| ||||||||||||||
Total Information Technology | 73,842,935 | ||||||||||||||
|
| ||||||||||||||
Materials - 4.30% | |||||||||||||||
Chemicals - 2.71% | |||||||||||||||
Ashland Global Holdings, Inc. | 90,953 | 6,019,270 | |||||||||||||
Axalta Coating Systems Ltd.A | 229,248 | 7,083,763 | |||||||||||||
Celanese Corp., Series A | 30,293 | 3,291,940 | |||||||||||||
Eastman Chemical Co. | 56,002 | 5,716,684 | |||||||||||||
|
| ||||||||||||||
22,111,657 | |||||||||||||||
|
| ||||||||||||||
Construction Materials - 0.32% | |||||||||||||||
CRH PLC, Sponsored ADRB | 72,898 | 2,577,673 | |||||||||||||
|
| ||||||||||||||
Containers & Packaging - 1.27% | |||||||||||||||
Owens-Illinois, Inc.A | 242,067 | 4,921,222 | |||||||||||||
Packaging Corp. of America | 47,096 | 5,448,537 | |||||||||||||
|
| ||||||||||||||
10,369,759 | |||||||||||||||
|
| ||||||||||||||
Total Materials | 35,059,089 | ||||||||||||||
|
|
See accompanying notes
27
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.86% (continued) | |||||||||||||||
Real Estate - 4.65% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 4.08% | |||||||||||||||
AvalonBay Communities, Inc. | 36,748 | $ | 5,989,924 | ||||||||||||
EPR Properties | 130,864 | 7,200,137 | |||||||||||||
GEO Group, Inc. | 94,141 | 2,118,173 | |||||||||||||
Lamar Advertising Co., Class A | 109,575 | 6,981,023 | |||||||||||||
MGM Growth Properties LLC, Class A | 391,896 | 10,961,331 | |||||||||||||
|
| ||||||||||||||
33,250,588 | |||||||||||||||
|
| ||||||||||||||
Real Estate Management & Development - 0.57% | |||||||||||||||
Realogy Holdings Corp.B | 188,489 | 4,676,412 | |||||||||||||
|
| ||||||||||||||
Total Real Estate | 37,927,000 | ||||||||||||||
|
| ||||||||||||||
Utilities - 6.00% | |||||||||||||||
Electric Utilities - 5.34% | |||||||||||||||
Edison International | 138,196 | 9,054,602 | |||||||||||||
Great Plains Energy, Inc. | 292,147 | 9,561,971 | |||||||||||||
Pinnacle West Capital Corp. | 206,234 | 16,601,837 | |||||||||||||
Xcel Energy, Inc. | 178,507 | 8,361,268 | |||||||||||||
|
| ||||||||||||||
43,579,678 | |||||||||||||||
|
| ||||||||||||||
Gas Utilities - 0.66% | |||||||||||||||
UGI Corp. | 110,532 | 5,348,644 | |||||||||||||
|
| ||||||||||||||
Total Utilities | 48,928,322 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $711,420,109) | 781,951,278 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 4.51% (Cost $36,806,943) | |||||||||||||||
Investment Companies - 4.51% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%D E | 36,806,943 | 36,806,943 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 3.13% (Cost $25,546,272) | |||||||||||||||
Investment Companies - 3.13% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.61%D E | 25,546,272 | 25,546,272 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 103.50% (Cost $773,773,324) | 844,304,493 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (3.50%) | (28,567,428 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 815,737,065 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B All or a portion of this security is on loan at April 30, 2018.
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.
D The Fund is affiliated by having the same investment advisor.
E 7-day yield.
ADR - American Depositary Receipt.
LLC - Limited Liability Company.
LP - Limited Partnership.
MLP - Master Limited Partnership.
PLC - Public Limited Company.
See accompanying notes
28
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2018 (Unaudited)
Futures Contracts Open on April 30, 2018: | ||||||||||||||
Long Futures | ||||||||||||||
Equity Futures Contracts | ||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||
S&P MidCap 400 E-Mini Index Futures | 177 | June 2018 | $34,062,770 | $ | 33,136,170 | $ | (926,600 | ) | ||||||
|
|
|
|
| ||||||||||
$34,062,770 | $ | 33,136,170 | $ | (926,600 | ) | |||||||||
|
|
|
|
|
Index Abbreviations: | ||
S&P | Standard & Poor’s |
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2018, the investments were classified as described below:
Mid-Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets |
| |||||||||||||||||||||||||||
Common Stocks | $ | 781,951,278 | $ | - | $ | - | $ | 781,951,278 | ||||||||||||||||||||
Short-Term Investments | 36,806,943 | - | - | 36,806,943 | ||||||||||||||||||||||||
Securities Lending Collateral | 25,546,272 | - | - | 25,546,272 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 844,304,493 | $ | - | $ | - | $ | 844,304,493 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||||||
Futures Contracts | $ | (926,600 | ) | $ | - | $ | - | $ | (926,600 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Liabilities | $ | (926,600 | ) | $ | - | $ | - | $ | (926,600 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
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 April 30, 2018, there were no transfers between levels.
See accompanying notes
29
American Beacon FundsSM
Statements of Assets and Liabilities
April 30, 2018 (Unaudited)
Balanced Fund | Mid-Cap Value Fund | |||||||||||
Assets: |
| |||||||||||
Investments in unaffiliated securities, at fair value† § | $ | 315,451,615 | $ | 781,951,278 | ||||||||
Investments in affiliated securities, at fair value‡ | 8,695,945 | 62,353,215 | ||||||||||
Deposit with brokers for futures contracts | 333,512 | 1,924,908 | ||||||||||
Dividends and interest receivable | 770,479 | 467,157 | ||||||||||
Receivable for investments sold | 52,148 | 507,991 | ||||||||||
Receivable for fund shares sold | 109,685 | 1,064,592 | ||||||||||
Receivable for expense reimbursement (Note 2) | - | 148 | ||||||||||
Prepaid expenses | 240,236 | 92,296 | ||||||||||
|
|
|
| |||||||||
Total assets | 325,653,620 | 848,361,585 | ||||||||||
|
|
|
| |||||||||
Liabilities: |
| |||||||||||
Payable for investments purchased | 147,652 | 4,216,949 | ||||||||||
Payable for fund shares redeemed | 343,762 | 1,229,953 | ||||||||||
Payable for variation margin from open futures contracts (Note 5) | 59,834 | 926,241 | ||||||||||
Payable upon return of securities loaned (Note 9)§ | 1,020,973 | 25,546,272 | ||||||||||
Management and sub-advisory fees payable (Note 2) | 137,926 | 524,946 | ||||||||||
Service fees payable (Note 2) | 60,510 | 108,215 | ||||||||||
Transfer agent fees payable (Note 2) | 15,163 | 20,860 | ||||||||||
Custody and fund accounting fees payable | 53,186 | 31,626 | ||||||||||
Professional fees payable | 29,262 | 15,995 | ||||||||||
Trustee fees payable (Note 2) | 860 | - | ||||||||||
Payable for prospectus and shareholder reports | 12,253 | - | ||||||||||
Other liabilities | 799 | 3,463 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 1,882,180 | 32,624,520 | ||||||||||
|
|
|
| |||||||||
Net assets | $ | 323,771,440 | $ | 815,737,065 | ||||||||
|
|
|
| |||||||||
Analysis of net assets: |
| |||||||||||
Paid-in-capital | $ | 264,801,312 | $ | 726,531,586 | ||||||||
Undistributed net investment income | 1,413,151 | 2,557,232 | ||||||||||
Accumulated net realized gain | 9,067,135 | 17,043,615 | ||||||||||
Unrealized appreciation of investments in unaffiliated securitiesA | 48,549,760 | 70,531,169 | ||||||||||
Unrealized appreciation of foreign currency transactions | - | 63 | ||||||||||
Unrealized (depreciation) of futures contracts | (59,918 | ) | (926,600 | ) | ||||||||
|
|
|
| |||||||||
Net assets | $ | 323,771,440 | $ | 815,737,065 | ||||||||
|
|
|
|
See accompanying notes
30
American Beacon FundsSM
Statements of Assets and Liabilities
April 30, 2018 (Unaudited)
Balanced Fund | Mid-Cap Value Fund | |||||||||||
Shares outstanding at no par value (unlimited shares authorized): |
| |||||||||||
Institutional Class | 4,539,192 | 16,608,295 | ||||||||||
|
|
|
| |||||||||
Y Class | 3,932,569 | 6,630,763 | ||||||||||
|
|
|
| |||||||||
Investor Class | 7,921,735 | 24,207,521 | ||||||||||
|
|
|
| |||||||||
Advisor Class | 439,346 | 246,455 | ||||||||||
|
|
|
| |||||||||
A Class | 1,425,725 | 887,125 | ||||||||||
|
|
|
| |||||||||
C Class | 2,674,808 | 439,571 | ||||||||||
|
|
|
| |||||||||
R6 ClassB | N/A | 5,903 | ||||||||||
|
|
|
| |||||||||
Net assets: |
| |||||||||||
Institutional Class | $ | 74,831,833 | $ | 275,607,991 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 65,258,364 | $ | 109,139,225 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 116,294,718 | $ | 405,581,397 | ||||||||
|
|
|
| |||||||||
Advisor Class | $ | 6,842,344 | $ | 4,007,125 | ||||||||
|
|
|
| |||||||||
A Class | $ | 20,896,532 | $ | 14,404,048 | ||||||||
|
|
|
| |||||||||
C Class | $ | 39,647,649 | $ | 6,899,344 | ||||||||
|
|
|
| |||||||||
R6 ClassB | N/A | $ | 97,935 | |||||||||
|
|
|
| |||||||||
Net asset value, offering and redemption price per share: |
| |||||||||||
Institutional ClassC | $ | 16.49 | $ | 16.59 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 16.59 | $ | 16.46 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 14.68 | $ | 16.75 | ||||||||
|
|
|
| |||||||||
Advisor Class | $ | 15.57 | $ | 16.26 | ||||||||
|
|
|
| |||||||||
A Class | $ | 14.66 | $ | 16.24 | ||||||||
|
|
|
| |||||||||
A Class (offering price) | $ | 15.55 | $ | 17.22 | ||||||||
|
|
|
| |||||||||
C Class | $ | 14.82 | $ | 15.70 | ||||||||
|
|
|
| |||||||||
R6 ClassB | N/A | $ | 16.59 | |||||||||
|
|
|
| |||||||||
† Cost of investments in unaffiliated securities | $ | 266,901,855 | $ | 711,420,109 | ||||||||
‡ Cost of investments in affiliated securities | $ | 8,695,945 | $ | 62,353,215 | ||||||||
§ Fair value of securities on loan | $ | 985,712 | $ | 24,558,560 |
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end.
B Class commenced operations March 1, 2018 (Note 1).
C Net asset value has been rounded due to inclusion of the AMR Class assets of the Balanced Fund (Note 1).
See accompanying notes
31
American Beacon FundsSM
Statements of Operations
For the period ended April 30, 2018 (Unaudited)
Balanced Fund | Mid-Cap Value Fund | |||||||||||
Investment income: |
| |||||||||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 2,698,241 | $ | 7,607,847 | ||||||||
Dividend income from affiliated securities (Note 8) | 36,156 | 283,770 | ||||||||||
Interest income (net of foreign taxes)† | 1,522,876 | 2,012 | ||||||||||
Income derived from securities lending (Note 9) | 20,269 | 43,390 | ||||||||||
|
|
|
| |||||||||
Total investment income | 4,277,542 | 7,937,019 | ||||||||||
|
|
|
| |||||||||
Expenses: |
| |||||||||||
Management and sub-advisory fees (Note 2) | 903,029 | 2,951,631 | ||||||||||
Transfer agent fees: | ||||||||||||
Institutional Class (Note 2) | 6,232 | 28,224 | ||||||||||
Y Class (Note 2)A | 28,887 | 50,211 | ||||||||||
Investor Class | 4,648 | 6,184 | ||||||||||
Advisor Class | 293 | 1,141 | ||||||||||
A Class | 905 | 820 | ||||||||||
C Class | 1,312 | 640 | ||||||||||
R6 Class | - | 305 | ||||||||||
Custody and fund accounting fees | 38,883 | 39,846 | ||||||||||
Professional fees | 31,354 | 28,349 | ||||||||||
Registration fees and expenses | 43,166 | 55,789 | ||||||||||
Service fees (Note 2): | ||||||||||||
Investor Class | 178,723 | 411,970 | ||||||||||
Advisor Class | 11,688 | A | 4,557 | |||||||||
A Class | (11,498 | )A | 10,095 | |||||||||
C Class | (34,541 | )A | 211 | |||||||||
Distribution fees (Note 2): | ||||||||||||
Advisor Class | 11,688 | 4,557 | ||||||||||
A Class | 26,865 | 18,509 | ||||||||||
C Class | 207,392 | 34,447 | ||||||||||
Prospectus and shareholder report expenses | 18,715 | 22,328 | ||||||||||
Trustee fees (Note 2) | 11,070 | 20,879 | ||||||||||
Other expenses | 19,541 | 21,964 | ||||||||||
|
|
|
| |||||||||
Total expenses | 1,498,352 | 3,712,657 | ||||||||||
|
|
|
| |||||||||
Net fees waived and expenses (reimbursed) / recouped (Note 2) | - | (301 | ) | |||||||||
|
|
|
| |||||||||
Net expenses | 1,498,352 | 3,712,356 | ||||||||||
|
|
|
| |||||||||
Net investment income | 2,779,190 | 4,224,663 | ||||||||||
|
|
|
| |||||||||
Realized and unrealized gain (loss) from investments: |
| |||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments in unaffiliated securitiesB | 10,781,628 | 20,648,418 | ||||||||||
Commission recapture (Note 1) | 1,522 | 36,561 | ||||||||||
Foreign currency transactions | 699 | (104 | ) | |||||||||
Futures contracts | 134,900 | 2,236,679 | ||||||||||
Change in net unrealized appreciation (depreciation) of: | ||||||||||||
Investments in unaffiliated securitiesC | (7,262,175 | ) | (39,972,361 | ) | ||||||||
Foreign currency transactions | - | 191 | ||||||||||
Futures contracts | (157,597 | ) | (2,187,738 | ) | ||||||||
|
|
|
| |||||||||
Net gain (loss) from investments | 3,498,977 | (19,238,354 | ) | |||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | $ | 6,278,167 | $ | (15,013,691 | ) | |||||||
|
|
|
| |||||||||
† Foreign taxes | $ | 23,600 | $ | 39,862 |
A The Manager voluntarily reimbursed service fees and sub-transfer agent fees (Note 2).
B The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
C The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at period end.
See accompanying notes
32
American Beacon FundsSM
Statements of Changes in Net Assets
Balanced Fund | Mid-Cap Value Fund | |||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||
Net investment income | $ | 2,779,190 | $ | 8,296,612 | $ | 4,224,663 | $ | 5,825,978 | ||||||||||||||||||||
Net realized gain from investments in unaffiliated securities, commission recapture, foreign currency transactions, and futures contracts | 10,918,749 | 61,221,937 | 22,921,554 | 34,267,279 | ||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions, and futures contracts | (7,419,772 | ) | 11,140,075 | (42,159,908 | ) | 92,030,585 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 6,278,167 | 80,658,624 | (15,013,691 | ) | 132,123,842 | |||||||||||||||||||||||
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| |||||||||||||||||||||
Distributions to shareholders: | ||||||||||||||||||||||||||||
Net investment income: | ||||||||||||||||||||||||||||
Institutional Class | (1,561,784 | ) | (3,922,895 | ) | (2,517,255 | ) | (3,184,300 | ) | ||||||||||||||||||||
Y Class | (1,175,553 | ) | (1,320,074 | ) | (867,845 | ) | (1,054,082 | ) | ||||||||||||||||||||
Investor Class | (2,327,766 | ) | (2,791,629 | ) | (2,066,989 | ) | (3,122,003 | ) | ||||||||||||||||||||
Advisor Class | (171,069 | ) | (196,602 | ) | (5,325 | ) | (63,730 | ) | ||||||||||||||||||||
A Class | (422,397 | ) | (506,915 | ) | (59,166 | ) | (224,784 | ) | ||||||||||||||||||||
C Class | (657,743 | ) | (535,923 | ) | - | (30,824 | ) | |||||||||||||||||||||
Net realized gain from investments: | ||||||||||||||||||||||||||||
Institutional Class | (4,036,261 | ) | - | (6,917,398 | ) | - | ||||||||||||||||||||||
Y Class | (3,001,735 | ) | - | (2,579,185 | ) | - | ||||||||||||||||||||||
Investor Class | (6,279,352 | ) | - | (7,195,645 | ) | - | ||||||||||||||||||||||
Advisor Class | �� | (538,844 | ) | - | (89,403 | ) | - | |||||||||||||||||||||
A Class | (1,099,592 | ) | - | (374,971 | ) | - | ||||||||||||||||||||||
C Class | (2,097,060 | ) | - | (184,144 | ) | - | ||||||||||||||||||||||
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| |||||||||||||||||||||
Net distributions to shareholders | (23,369,156 | ) | (9,274,038 | ) | (22,857,326 | ) | (7,679,723 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Capital share transactions (Note 11): | ||||||||||||||||||||||||||||
Proceeds from sales of shares | 26,853,327 | 125,828,653 | 272,397,062 | 180,157,266 | ||||||||||||||||||||||||
Reinvestment of dividends and distributions | 22,665,976 | 8,901,335 | 22,545,457 | 7,582,763 | ||||||||||||||||||||||||
Cost of shares redeemed | (61,198,402 | ) | (571,205,485 | ) | (110,385,176 | ) | (183,160,251 | ) | ||||||||||||||||||||
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|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | (11,679,099 | ) | (436,475,497 | ) | 184,557,343 | 4,579,778 | ||||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets | (28,770,088 | ) | (365,090,911 | ) | 146,686,326 | 129,023,897 | ||||||||||||||||||||||
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| |||||||||||||||||||||
Net assets: | ||||||||||||||||||||||||||||
Beginning of period | 352,541,528 | 717,632,439 | 669,050,739 | 540,026,842 | ||||||||||||||||||||||||
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End of period * | $ | 323,771,440 | $ | 352,541,528 | $ | 815,737,065 | $ | 669,050,739 | ||||||||||||||||||||
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*Includes undistributed net investment income | $ | 1,413,151 | $ | 4,950,273 | $ | 2,557,232 | $ | 3,849,149 | ||||||||||||||||||||
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See accompanying notes
33
American Beacon FundsSM
April 30, 2018 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”), is organized as a Massachusetts business trust. The Funds, each a series within the Trust, are registered under the Investment Company Act of 1940 (the “Act”), as amended, as diversified, open-end management investment companies. As of April 30, 2018, the Trust consists of thirty-three active series, two of which are presented in this filing: American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund (collectively, the “Funds” and each individually a “Fund”). The remaining thirty-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
February 28, 2018 is the inception date of the R6 Class of the Mid-Cap Value Fund.
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 |
| Minimum Initial Investments | ||||
Institutional | Large institutional investors - sold directly or through intermediary channels. | $ | 250,000 | |||
Y Class | Large institutional retirement plan investors - sold directly or through intermediary channels. | $ | 100,000 | |||
Investor | All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors. | $ | 2,500 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 | Large institutional retirement plan investors – sold through retirement plan sponsors. | None |
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.
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”).
34
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Security Transactions and Investment Income
Security transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.
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 convertible securities, premiums attributable to the conversion feature are not amortized. Realised gains (losses) from securities sold are determined on the basis of specific lot identification. Estimated tax liabilities on certain foreign securities are recorded on an accrual basis and are reflected as components of interest income or net change in unrealized appreciation (depreciation) on investments on the Statement of Operations, as appropriate. Tax liabilities realized as a result of such security sales are reflected as a component of net realized gain (loss) on investments on the Statement of Operations. Paydown gains (losses) on mortgage-related and other asset-backed securities, if any, are recorded as components of interest income on the Statements of Operations. Income or short-term capital gain distributions received from registered investment companies, if any, are recorded as dividend income. Long-term gain distributions received from registered investment companies, if any, are recorded as realized gains.
Debt obligations may be placed on a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed for non-accrual when the issuer resumes interest payments or when collectability of interest is probable. Realized gains (losses) from securities sold are determined on the basis of specific lot identification.
Distributions to Shareholders
Distributions, if any, of net investment income of the Balanced Fund will normally be declared and paid quarterly. Distributions, if any, of net investment income of the Mid-Cap Value Fund will normally be declared and be paid at least annually. Distributions, if any, of net realized capital gains are generally paid at least annually and recorded on the ex-dividend date. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Funds may designate earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Funds have established brokerage commission recapture arrangements with certain brokers or dealers. If a 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’ Statements of Operations, if applicable.
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.
35
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 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 April 30, 2018, based on management’s evaluation of the shareholder account base, exclusive of omnibus accounts, one account has been identified as representing a non-affiliated significant ownership of approximately 7% of the Balanced Fund’s outstanding shares and one account has been identified as representing a non-affiliated significant ownership of approximately 16% of the Mid-Cap Value Fund’s outstanding shares.
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 Funds’ average daily net assets that is calculated and accrued daily according to the following schedule:
First $15 billion | 0.35 | % | ||
Next $15 billion | 0.325 | % | ||
Over $30 billion | 0.30 | % |
The Trust, on behalf of the Funds, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Brandywine Global Investment Management, LLC; and Hotchkis and Wiley Capital Management, LLC for the Balanced Fund. In addition, the Manager manages a portion of the Balanced Fund pursuant to the Management Agreement. The Trust, on behalf of the Funds, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Pzena Investment Management, LLC; and WEDGE Capital Management, L.L.P. for the Mid-Cap Value Fund. Pursuant to the Investment Advisory Agreements, 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.
The Management and Sub-Advisory Fees paid by the Funds for the period ended April 30, 2018 were as follows:
Balanced Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.36 | % | $ | 601,851 | ||||||||
Sub-Advisor Fees | 0.18 | % | 301,178 | |||||||||
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|
|
| |||||||||
Total | 0.54 | % | $ | 903,029 | ||||||||
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|
|
|
36
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Mid-Cap Value Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 1,336,518 | ||||||||
Sub-Advisor Fees | 0.44 | % | 1,615,113 | |||||||||
|
|
|
| |||||||||
Total | 0.79 | % | $ | 2,951,631 | ||||||||
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|
|
|
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee 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 period ended April 30, 2018, the Manager received securities lending fees of $2,194 and $4,833 for the securities lending activities of the Balanced Fund and Mid-Cap Value Fund, respectively.
Distribution Plans
The Funds, except for the Advisor, A, and C Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees 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 Advisor, A, and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes, 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 Investor, Advisor, A, and C Classes of the Funds. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Funds. During the period ended April 31, 2018 the Manager voluntarily reimbursed service fees to the Advisor, A and C Classes of the Balanced Fund in the amounts of $115, $28,001 and $66,581, respectively. Service fees to the A and C Classes of the Mid-Cap Value Fund were reimbursed in the amount of $1,233 and $5,045, respectively.
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 and Y Classes of the Funds and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Funds primarily through the use of omnibus accounts on behalf of their customers who hold positions in the Funds. Certain services would have been provided by the Funds’ transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Funds’ transfer agent. Accordingly, the Funds, pursuant to Board approval, have agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial
37
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the period ended April 30, 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 | |||
Balanced | $ | 31,976 | ||
Mid-Cap Value | 67,823 |
As of April 30, 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 | |||
Balanced | $ | 7,250 | ||
Mid-Cap Value | 11,078 |
During the period ended April 30, 2018, the Manager voluntarily reimbursed sub-transfer agent fees to the Y Classes of the Balanced Fund and the Mid-Cap Value Fund in the amount of $3,923 and $1,436, respectively.
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 period ended April 30, 2018, the Manager earned fees on the Funds’ direct investments and securities lending collateral investments in the USG Select Fund as shown below:
Fund | Direct Investments in USG Select Fund | Securities Lending Collateral in USG Select Fund | Total | |||||||||
Balanced | $ | 2,911 | $ | 2,862 | $ | 5,773 | ||||||
Mid-Cap Value | 22,233 | 9,479 | 31,712 |
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 period ended April 30, 2018, the Balanced Fund borrowed on average $4,754,923 for 1 day at an average interest rate of 2.06% with interest charges of $268. This amount is included in “Other expenses” on the Statements of Operations. For the period ended April 30, 2018, the Mid-Cap Value Fund did not utilize the credit facility.
38
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Expense Reimbursement Plan
The Manager voluntarily 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 period ended April 30, 2018, the Manager waived and/or reimbursed expenses as follows:
Expense Cap | ||||||||||||||||||||
Fund | Class | 11/1/2017 - 4/30/2018 | Reimbursed Expenses | (Recouped) Expenses | Expiration of Reimbursed Expenses | |||||||||||||||
Mid-Cap Value | R6 | 0.88 | %(1) | $ | 301 | $ | – | 2021 |
(1) Voluntary expense cap effective February 28, 2018.
Of these amounts, $148 was disclosed as a receivable from the Manager on the Statements of Assets and Liabilities at April 30, 2018 for the Mid-Cap Value 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 Fund did not record a liability for potential reimbursement due to the current assessment that a reimbursement is unlikely.
The Distributor
Effective March 1, 2018, Resolute Investment Distributors, Inc. (“RID” or “Distributor”) replaced Foreside Fund Services, LLC (“Foreside”) as the Fund(s)’ distributor and principal underwriter of the Funds’ shares.
RID is a registered broker-dealer and is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Distributor is affiliated with the Manager through common ownership. Under a Distribution Agreement with the Trust, the Distributor acts as the distributor and principal underwriter of the Trust in connection with the continuous offering of shares of the Funds. The Distributor continually distributes shares of the Funds on a best efforts basis. The Distributor has no obligation to sell any specific quantity of the Funds’ shares. Pursuant to the Distribution Agreement, to the extent applicable, the Distributor receives, and may re-allow to broker-dealers, all or a portion of the sales charge paid by the purchasers of A Class and C Class shares. For A Class and C Class shares, the Distributor receives commission revenue consisting of the portion of A Class and C Class sales charge remaining after the allowances by the Distributor to the broker-dealers. The Distributor retains any portion of the commission fees that are not paid to the broker-dealers for use solely to pay distribution related expenses.
Prior to March 1, 2018, Foreside served as the distributor and principal underwriter of the Funds’ shares. Pursuant to a Sub-Administration Agreement between Foreside and the Manager in effect through February 28, 2018, Foreside received a fee from the Manager for providing administrative services in connection with the marketing and distribution of shares of the Trust, including the registration of Manager employees as registered representatives of Foreside to facilitate distribution of Fund shares. Foreside also received a fee from the Manager under a Marketing Agreement pursuant to which Foreside provided services in connection with the marketing of a Fund to institutional investors. Pursuant to the Distribution Agreement with the Trust in effect through February 28, 2018, Foreside received, and may have re-allowed to broker-dealers, all or a portion of the sales charge paid by the purchasers of A and C Class shares. For A and C Class shares, Foreside received commission revenues consisting of the portion of A and C Class sales charge remaining after the allowances by Foreside to the broker dealers. Foreside retained any portion of the commission fees that were not paid to the broker-dealers for use solely to pay distribution related expenses.
39
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Sales Commissions
The Funds’ Distributor, formerly Foreside, may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. During the period ended February 28, 2018, Foreside collected $3,380 and $2,255 in sales commissions for Balanced Fund and Mid-Cap Value Fund, respectively, from the sale of Class A Shares. During the period March 1, 2018 through April 30, 2018, RID collected $1,994 and $82 for the Balanced Fund and Mid-Cap Value 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 period ended April 30, 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 period ended February 28, 2018, Foreside collected CDSC fees of $2,422 and $64 for Class C Shares of the Balanced Fund and Mid-Cap Value Fund, respectively. During the period March 1, 2018 through April 30, 2018, RID collected $487 and $482 for both Funds, respectively, for Class C Shares.
Trustee Fees and Expenses
As compensation for their service to the Trust, American Beacon Select Funds, American Beacon Institutional Funds Trust, and American Beacon Sound Point Enhanced Income Fund, 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
The price of the Fund’s shares is based on the Fund’s Net Asset Value (“NAV”). The NAV of the Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to the Fund or class, by the total number of shares outstanding of the Fund or class.
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. Certain fixed-income securities purchased on a delayed-delivery basis are marked-to-market daily until settlement at the forward settlement date.
40
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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”) 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.
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.
Mortgage-related and asset-backed securities are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by pricing service providers that use broker-dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
usually consider tranche-level attributes, current market data, estimated cash flows, and market-based yield spreads for each tranche, and incorporates deal collateral performance, as available. Mortgage-related and asset-backed securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
4. Securities and Other Investments
Agency Mortgage-Backed Securities
Certain mortgage-backed securities (“MBS”) may be issued or guaranteed by the U.S. government or a government sponsored entity, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Although these instruments may be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit of the United States and are still exposed to the risk of non-payment.
American Depositary Receipts and Non-Voting Depositary Receipts
American Depositary Receipts (“ADRs”) are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Non-Voting Depositary Receipts (“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.
Asset-Backed Securities
Asset-Back Securities (“ABS”) may include MBS, loans, receivables or other assets. The value of the Funds’ ABS may be affected by, among other things, actual or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the receivables, the market’s assessment of the quality of underlying assets or actual or perceived changes in the credit worthiness of the individual borrowers, the originator, the servicing agent or the financial institution providing the credit support.
Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities.
Rising or high interest rates tend to extend the duration of ABS, making them more volatile and more sensitive to changes in interest rates. The underlying assets are sometimes subject to prepayments which can shorten the security’s weighted average life and may lower its return. Defaults on loans underlying ABS have become an increasing risk for ABS that are secured by home equity loans related to sub-prime, Alt-A or non conforming mortgage loans, especially in a declining residential real estate market.
42
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
ABS (other than MBS) present certain risks that are not presented by MBS. Primarily, these securities may not have the benefit of any security interest in the related assets. Credit card receivables are generally unsecured and the debtors are entitled to the protection of a number of state and federal consumer credit laws, many of which give such debtors the right to set off certain amounts owed on the credit cards, thereby reducing the balance due. There is the possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on these securities. ABS are often backed by a pool of assets representing the obligations of a number of different parties. To lessen the effect of failures by obligors on underlying assets to make payments, the securities may contain elements of credit support which fall into two categories: (i) liquidity protection, and (ii) protection against losses resulting from ultimate default by an obligor on the underlying assets. Liquidity protection refers to the provision of advances, generally by the entity administering the pool of assets, to ensure that the receipt of payments on the underlying pool occurs in a timely fashion. Protection against losses results from payment of the insurance obligations on at least a portion of the assets in the pool. This protection may be provided through guarantees, policies or letters of credit obtained by the issuer or sponsor from third parties, through various means of structuring the transaction or through a combination of such approaches. The Funds will not pay any additional or separate fees for credit support. The degree of credit support provided for each issue is generally based on historical information respecting the level of credit risk associated with the underlying assets.
Delinquency or loss in excess of that anticipated or failure of the credit support could adversely affect the return on an investment in such a security. The availability of ABS may be affected by legislative or regulatory developments. It is possible that such developments may require the Funds to dispose of any then existing holdings of such securities.
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.
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
43
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 (“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.
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 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 rates.
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
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 period ended April 30, 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.
Mortgage-Backed Securities
MBS often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities’ effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of the Funds’ portfolio at the time resulting in reinvestment risk.
Rising or high interest rates may result in slower than expected principal payments which may tend to extend the duration of MBS, making them more volatile and more sensitive to changes in interest rates. This is known as extension risk.
MBS may have less potential for capital appreciation than comparable fixed-income securities due to the likelihood of increased prepayments of mortgages resulting from foreclosures or declining interest rates. These foreclosed or refinanced mortgages are paid off at face value (par) or less, causing a loss, particularly for any investor who may have purchased the security at a premium or a price above par. In such an environment, this risk limits the potential price appreciation of these securities.
Mortgage-Related and Other Asset-Backed Securities
The Balance Fund may invest in mortgage or other ABS. These securities may include mortgage instruments issued by U.S. government agencies (“agency mortgages”) or those issued by private entities (“non-agency mortgages”). Specific types of instruments may include mortgage pass-through securities, collateralized mortgage obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage-backed securities and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property. The value of the Funds’ MBS may be affected by, among other things, changes or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgage, or the quality of the underlying assets. The mortgages underlying the securities may default or decline in quality or value. Through its investments in MBS, a Fund has exposure to subprime loans, Alt-A loans and non-conforming loans as well as to the mortgage and credit markets generally. Underlying collateral related to subprime, Alt-A and non-conforming mortgage loans has become increasingly susceptible to defaults and declines in quality or value, especially in a declining residential real estate market. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole.
Municipal Securities
Municipal securities may include general obligation bonds, municipal lease obligations, resource recovery obligations, revenue obligations, anticipation notes, private activity bonds and municipal warrants. The Funds may invest in municipal securities that pay taxable or tax exempt interest. Municipal securities are subject to credit risk where a municipal issuer of a security might not make interest or principal payments on a security as they become due. Municipal securities are also subject to interest rate risk. A downgrade in the issuer’s or security’s credit rating can reduce the market value of the security. A number of municipalities may face severe financial hardship
45
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
making the possibility of their defaulting on obligations, and/or declaring bankruptcy where allowable, a risk to the value of municipal securities held by the Funds.
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.
Privately Issued Mortgage-Backed Securities
MBS held by a Fund may be issued by private issuers including commercial banks, savings associations, mortgage companies, investment banking firms, finance companies and special purpose finance entities (called special purpose vehicles (“SPV”)) and other entities that acquire and package mortgage loans for resale as MBS. These privately issued non-agency MBS may offer higher yields than those issued by government agencies, but also may be subject to greater price changes than governmental issues. Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their loans. Alt-A loans refer to loans extended to borrowers who have incomplete documentation of income, assets, or other variables that are important to the credit underwriting processes. Non-conforming mortgages are loans that do not meet the standards that allow purchase by government-sponsored enterprises. MBS with exposure to subprime loans, Alt-A loans or non-conforming loans have had in many cases higher default rates than those loans that meet government underwriting requirements. The risk of non-payment is greater for MBS that are backed by mortgage pools that contain subprime, Alt-A and non-conforming loans, but a level of risk exists for all loans.
Unlike agency MBS issued or guaranteed by the U.S. government or a government-sponsored entity (e.g., Fannie Mae and Freddie Mac), MBS issued by private issuers do not have a government or government-sponsored entity guarantee, but may have credit enhancements provided by external entities such as banks or financial institutions or achieved through the structuring of the transaction itself. Examples of such credit support arising out of the structure of the transaction include the issue of senior and subordinated securities (e.g., the issuance of securities by an SPV in multiple classes or “tranches,” with one or more classes being senior to other subordinated classes as to the payment of principal and interest, with the result that defaults on the underlying mortgage loans are borne first by the holders of the subordinated class); creation of “reserve funds” (in which case cash or investments, sometimes funded from a portion of the payments on the underlying mortgage loans, are held in reserve against future losses); and “overcollateralization” (in which case the scheduled payments on, or the principal amount of, the underlying mortgage loans exceeds that required to make payment on the securities and pay any servicing or other fees). However, there can be no guarantee that credit enhancements, if any, will be sufficient to prevent losses in the event of defaults on the underlying mortgage loans. In addition, MBS that are issued by private issuers are not subject to the underwriting requirements for the underlying mortgages that are applicable to those MBS that have a government or government-sponsored entity guarantee. As a result, the mortgage loans underlying private MBS may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics than government or government-sponsored MBS and have wider variances in a number of terms including interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently include second mortgages, high loan-to-value mortgages and manufactured housing loans. The coupon rates and maturities of the underlying mortgage loans in a private-label MBS pool may vary to a greater extent than those included in a government guaranteed pool, and the pool may include subprime mortgage loans.
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Privately issued MBS are not traded on an exchange and there may be a limited market for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors. Without an active trading market, MBS held in the Funds’ portfolio may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans.
Publicly Traded Partnerships; Master Limited Partnerships
The Funds may invest in publicly traded partnerships such as master limited partnerships (“MLPs”). MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the OTC market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. An MLP also may be an entity similar to a limited partnership, such as a limited liability company, which has a manager or managing member and non-managing members (who are like limited partners). The general partner or partners are jointly and severally responsible for the liabilities of the MLP. A Fund invests as a limited partner and normally would not be liable for the debts of an MLP beyond the amount the Fund has invested therein but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to a limited partner. The right of an MLP’s creditors would continue even after a Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.
Real Estate Investment Trusts
The Funds may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Funds re-characterize distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information, which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year.
U.S. Government Agency Securities
U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government currently provides financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law. U.S. Government securities include U.S. Treasury bills, notes and bonds, Federal Home Loan Bank (“FHLB”) obligations, Federal Farm Credit Bank (“FFCB”) obligations, U.S. Government agency obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.
U.S. Treasury Obligations
U.S. Treasury obligations include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations, known as “STRIPS”, and inflation-indexed securities. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates and credit ratings. The principal and interest components of selected securities are traded independently under the STRIPS program. Under the STRIPS program, the principal and
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
interest components are individually numbered and separately issued by the U.S. Treasury at the request of depository financial institutions, which then trade the component parts independently.
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 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 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 period ended April 30, 2018, the Funds entered into future contracts primarily for exposing cash to markets.
The Funds’ average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.
Average Futures Contracts Outstanding | ||||
Fund | Period Ended April 30, 2018 | |||
Balanced | 43 | |||
Mid-Cap Value | 190 |
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk
exposure(1):
Balanced Fund
Fair values of financial instruments on the Statements of Assets and Liabilities as of April 30, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Payable for variation margin from open futures contracts(2) | $ | – | $ | – | $ | – | $ | – | $ | (59,918 | ) | $ | (59,918 | ) | |||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statements of Operations as of April 30, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized gain (loss) from derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | 134,900 | $ | 134,900 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | (157,597 | ) | $ | (157,597 | ) |
Mid-Cap Value Fund
Fair values of financial instruments on the Statements of Assets and Liabilities as of April 30, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Payable for variation margin from open futures contracts(2) | $ | – | $ | – | $ | – | $ | – | $ | (926,600 | ) | $ | (926,600 | ) | |||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statements of Operations as of April 30, 2018: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized gain (loss) from derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | 2,236,679 | $ | 2,236,679 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | (2,187,738 | ) | $ | (2,187,738 | ) |
(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 Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
6. Principal Risks
Investing in the Funds may involve certain risks including, but not limited to, those described below.
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Asset-Backed and Mortgage Related Securities Risk
Investments in asset-backed and mortgage related securities, are subject to market risks for fixed-income securities which include, but are not limited to, credit risk, extension risk, interest rate risk and prepayment risk. A decline in the credit quality of the issuers of asset-backed and mortgage related securities or instability in the markets for such securities may affect the value and liquidity of such securities, which could result in losses to 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.
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, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. 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 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 and greater volatility, (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).
50
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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.
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 several times since December 2015 and has signaled additional increases in the near future. Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to the Funds. The prices of fixed-income securities are also affected by their duration. Fixed-income securities with longer duration generally have greater sensitivity to changes in interest rates. An increase in interest rates can impact markets broadly as well. Some investors buy securities and derivatives with borrowed money; an increase in interest rates can cause a decline in those markets.
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 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
51
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
precedent for this situation, it is difficult to predict the impact on various markets of a significant rate increase, whether brought about by U.S. policy makers or by dislocations in world markets. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely.
Mortgage-Backed and Mortgage Related Securities Risk
Certain mortgage-backed and mortgage related securities may include securities backed by pools of loans made to “subprime” borrowers or borrowers with blemished credit histories; the risk of defaults is generally higher in the case of mortgage pools that include such subprime mortgages. A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed by the applicable entity only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Additionally, circumstances could arise that would prevent the payment of interest or principal. This could result in losses to the Funds. Securities held by the Funds that are issued by government-sponsored enterprises, such as the Fannie Mae, Freddie Mac, and FHLB are not guaranteed by the U.S. Treasury, are not backed by the full faith and credit of the U.S. Government and no assurance can be given that the U.S. Government will provide financial support. U.S. Government securities and securities of government sponsored enterprises are also subject to credit risk, interest rate risk and market risk. The Funds’ investment in CMOs may offer a higher yield than U.S. government securities, but they may also be subject to greater price fluctuation and credit risk. The cash flows and yields on interest only (“IO”) and principal only (“PO”) are extremely sensitive to the rate of principal payments (including prepayments) on the underlying mortgage loans or mortgage-backed securities. A rapid rate of principal payments may adversely affect the yield to maturity of IOs. A slow rate of principal payments may adversely affect the yield to maturity of POs. Inverse IOs and POs, which are fixed-income securities with a floating or variable rate of interest, may exhibit substantially greater price volatility than fixed rate obligations having similar credit quality, redemption provisions and maturity.
Multiple Sub-Advisor Risk
The Manager may allocate the Funds’ assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Funds’ assets. To a significant extent, the Funds’ performance will depend on the success of the Manager in allocating the Funds’ assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-adviser manages its allocated portion of the Funds independently from another sub-adviser, the same security may be held in different portions of the Funds, or may be acquired for one portion of the Funds at a time when a sub-adviser to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Funds’ holdings. Similarly, under some market conditions, one sub-adviser may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-adviser believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Funds. Because each sub-adviser directs the trading for its own portion of the Funds, and does not aggregate its transactions with those of the other sub-advisors, the Funds may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Funds’ assets among the Funds’ sub-advisors in a manner that it believes is consistent with achieving the Funds’ investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Funds’ assets among sub-advisors.
Other Investment Companies Risk
The Funds may invest in shares of other registered investment companies, including ETFs and money market funds that are advised by the Manager. 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 those investment companies in addition to the Funds’ direct fees and expenses and will be subject to the risks associated with investments in those companies.
52
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 Funds 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 its price.
Redemption Risk
The Funds may experience periods of high levels of redemptions that could cause the Funds to sell assets at inopportune times or at a loss or depressed value. The sale of assets to meet redemption requests may create net capital gains, which could cause the Funds to have to distribute substantial capital gains.
Sector Risk
Sector risk is the risk associated with a Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase.
To the extent a Fund invests in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than investment companies investing more broadly.
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.
U.S. Government Securities and Government-Sponsored Enterprises Risk
A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed by the applicable entity only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Securities held by the Fund that are issued by government-sponsored enterprises, such as the Fannie Mae, Freddie Mac, FHLB, FFCB, and the Tennessee Valley Authority are not guaranteed by the U.S. Treasury and are not backed by the full faith and credit of the U.S. Government and no assurance can be given that the U.S. Government will provide financial support if these organizations do not have the funds to meet future payment obligations. U.S. Government securities and securities of government sponsored entities are also subject to credit risk, interest rate risk and market risk.
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
53
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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.
Offsetting Assets and Liabilities
The Funds are parties to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Funds employ multiple money managers and counterparties and have elected not to offset qualifying financial and derivative instruments on the Statements of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2018.
Balanced Fund
Offsetting of Financial and Derivative Assets as of April 30, 2018: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | - | $ | 59,918 | ||||||||
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|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | - | $ | 59,918 | ||||||||
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|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | - | $ | (59,918 | ) | |||||||
|
|
|
|
Remaining Contractual Maturity of the Agreements As of April 30, 2018 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 1,020,973 | $ | - | $ | - | $ | - | $ | 1,020,973 | ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
Total Borrowings | $ | 1,020,973 | $ | - | $ | - | $ | - | $ | 1,020,973 | ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 1,020,973 | ||||||||||||||||||||||||||||||||||
|
|
Mid-Cap Value Fund
Offsetting of Financial and Derivative Assets as of April 30, 2018: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | - | $ | 926,600 | ||||||||
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|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | - | $ | 926,600 | ||||||||
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|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | - | $ | (926,600 | ) | |||||||
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|
|
Remaining Contractual Maturity of the Agreements As of April 30, 2018 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 25,546,272 | $ | - | $ | - | $ | - | $ | 25,546,272 | ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
Total Borrowings | $ | 25,546,272 | $ | - | $ | - | $ | - | $ | 25,546,272 | ||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions | $ | 25,546,272 | ||||||||||||||||||||||||||||||||||
|
|
54
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
7. Federal Income and Excise Taxes
It is the policy of each Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make 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. Each of the tax years in the four year period ended October 31, 2017 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.
As of April 30, 2018 the tax cost for each Fund and their respective gross unrealized appreciation (depreciation) were as follows:
Fund | Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Balanced | $ | 276,493,007 | $ | 56,997,030 | $ | (9,342,477 | ) | $ | 47,654,553 | |||||||||||||||||||
Mid-Cap Value | 779,598,267 | 99,966,456 | (35,260,167 | ) | 64,706,289 |
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.
As of October 31, 2017, 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 period ended April 30, 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 | ||||||||||||||||||||||||
Balanced | $ | 33,290,324 | $ | 7,139,040 | $ | 59,405,652 | $ | 8,911,555 | ||||||||||||||||||||
Mid-Cap Value | 286,365,451 | - | 116,916,135 | - |
A summary of the Funds’ transactions in the USG Select Fund for the period ended April 30, 2018 were as follows:
Fund | Type of Transaction | October 31, 2017 Shares/Fair Value | Purchases | Sales | April 30, 2018 Shares/Fair Value | Dividend Income | ||||||||||||||||||||||||||||||||||||
Balanced | Direct | $ | 7,863,253 | $ | 61,993,039 | $ | 62,181,320 | $ | 7,674,972 | $ | 36,156 | |||||||||||||||||||||||||||||||
Balanced | Securities Lending | 3,085,328 | 40,112,799 | 42,177,154 | 1,020,973 | N/A | ||||||||||||||||||||||||||||||||||||
Mid-Cap Value | Direct | 32,552,471 | 297,992,861 | 293,738,389 | 36,806,943 | 283,770 | ||||||||||||||||||||||||||||||||||||
Mid-Cap Value | Securities Lending | 19,270,065 | 126,283,612 | 120,007,405 | 25,546,272 | N/A |
55
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Funds’ Schedule of Investments and the collateral is shown on the Statement of Assets and Liabilities as a payable.
Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Funds, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.
While securities are on loan, the Funds continue to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Funds would be subject to on the dividend.
Securities lending transactions pose certain risks to the Funds, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Funds could also experience delays and costs in gaining access to the collateral. The Funds bear the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.
As of April 30, 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 | ||||||||||||||||||||||||
Balanced | $ | 985,712 | $ | 1,020,973 | $ | – | $ | 1,020,973 | ||||||||||||||||||||
Mid-Cap Value | 24,558,560 | 25,546,272 | – | 25,546,272 |
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.
56
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
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 period ended April 30, 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 | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
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Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 389,351 | $ | 6,517,481 | 1,092,787 | $ | 18,080,161 | ||||||||||||||||||||||
Reinvestment of dividends | 331,965 | 5,569,260 | 238,615 | 3,910,236 | ||||||||||||||||||||||||
Shares redeemed | (1,273,657 | ) | (21,621,857 | ) | (28,034,177 | ) | (458,858,477 | ) | ||||||||||||||||||||
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Net (decrease) in shares outstanding | (552,341 | ) | $ | (9,535,116 | ) | (26,702,775 | ) | $ | (436,868,080 | ) | ||||||||||||||||||
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Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 532,320 | $ | 9,118,075 | 3,930,687 | $ | 64,515,384 | ||||||||||||||||||||||
Reinvestment of dividends | 227,854 | 3,842,180 | 65,834 | 1,098,461 | ||||||||||||||||||||||||
Shares redeemed | (561,134 | ) | (9,562,659 | ) | (2,147,617 | ) | (35,745,768 | ) | ||||||||||||||||||||
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Net increase in shares outstanding | 199,040 | $ | 3,397,596 | 1,848,904 | $ | 29,868,077 | ||||||||||||||||||||||
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Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 429,879 | $ | 6,491,858 | 1,891,239 | $ | 27,893,209 | ||||||||||||||||||||||
Reinvestment of dividends | 565,005 | 8,436,406 | 183,821 | 2,729,041 | ||||||||||||||||||||||||
Shares redeemed | (1,077,636 | ) | (16,195,594 | ) | (3,351,461 | ) | (49,631,206 | ) | ||||||||||||||||||||
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|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (82,752 | ) | $ | (1,267,330 | ) | (1,276,401 | ) | $ | (19,008,956 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
57
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 41,749 | $ | 667,875 | 105,859 | $ | 1,651,482 | ||||||||||||||||||||||
Reinvestment of dividends | 44,791 | 709,913 | 12,537 | 196,603 | ||||||||||||||||||||||||
Shares redeemed | (315,333 | ) | (4,998,032 | ) | (183,384 | ) | (2,863,636 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (228,793 | ) | $ | (3,620,244 | ) | (64,988 | ) | $ | (1,015,551 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 106,098 | $ | 1,600,973 | 410,539 | $ | 6,059,817 | ||||||||||||||||||||||
Reinvestment of dividends | 98,483 | 1,468,449 | 31,357 | 464,996 | ||||||||||||||||||||||||
Shares redeemed | (195,546 | ) | (2,959,671 | ) | (843,857 | ) | (12,512,241 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 9,035 | $ | 109,751 | (401,961 | ) | $ | (5,987,428 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 161,029 | $ | 2,457,065 | 511,750 | $ | 7,628,600 | ||||||||||||||||||||||
Reinvestment of dividends | 174,747 | 2,639,768 | 33,550 | 501,998 | ||||||||||||||||||||||||
Shares redeemed | (382,645 | ) | (5,860,589 | ) | (776,384 | ) | (11,594,157 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (46,869 | ) | $ | (763,756 | ) | (231,084 | ) | $ | (3,463,559 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 3,041,802 | $ | 52,348,801 | 5,954,710 | $ | 95,148,198 | ||||||||||||||||||||||
Reinvestment of dividends | 526,390 | 9,164,443 | 200,907 | 3,102,004 | ||||||||||||||||||||||||
Shares redeemed | (2,374,767 | ) | (41,187,152 | ) | (4,676,013 | ) | (74,643,061 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 1,193,425 | $ | 20,326,092 | 1,479,604 | $ | 23,607,141 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,268,801 | $ | 21,731,809 | 1,882,597 | $ | 30,182,084 | ||||||||||||||||||||||
Reinvestment of dividends | 197,830 | 3,416,518 | 68,733 | 1,052,987 | ||||||||||||||||||||||||
Shares redeemed | (691,286 | ) | (11,926,972 | ) | (1,053,861 | ) | (16,770,607 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 775,345 | $ | 13,221,355 | 897,469 | $ | 14,464,464 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 10,628,064 | $ | 191,529,131 | 2,951,825 | $ | 47,658,072 | ||||||||||||||||||||||
Reinvestment of dividends | 526,115 | 9,254,355 | 199,673 | 3,114,890 | ||||||||||||||||||||||||
Shares redeemed | (2,726,881 | ) | (47,672,293 | ) | (4,583,694 | ) | (73,830,629 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 8,427,298 | $ | 153,111,193 | (1,432,196 | ) | $ | (23,057,667 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
58
American Beacon FundsSM
Notes to Financial Statements
April 30, 2018 (Unaudited)
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
73,734 | $ | 1,227,607 | 81,445 | $ | 1,272,473 | |||||||||||||||||||||||
Reinvestment of dividends | 5,543 | 94,728 | 4,212 | 63,730 | ||||||||||||||||||||||||
Shares redeemed | (51,592 | ) | (877,700 | ) | (350,490 | ) | (5,453,538 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 27,685 | $ | 444,635 | (264,833 | ) | $ | (4,117,335 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 256,070 | $ | 4,307,729 | 318,235 | $ | 4,979,042 | ||||||||||||||||||||||
Reinvestment of dividends | 25,397 | 433,278 | 14,503 | 219,286 | ||||||||||||||||||||||||
Shares redeemed | (473,593 | ) | (8,016,652 | ) | (676,186 | ) | (10,691,000 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (192,126 | ) | $ | (3,275,645 | ) | (343,448 | ) | $ | (5,492,672 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2018 | Year Ended October 31, 2017 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 70,560 | $ | 1,151,985 | 60,211 | $ | 917,397 | ||||||||||||||||||||||
Reinvestment of dividends | 11,018 | 182,135 | 2,030 | 29,866 | ||||||||||||||||||||||||
Shares redeemed | (42,742 | ) | (704,407 | ) | (116,353 | ) | (1,771,416 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 38,836 | $ | 629,713 | (54,112 | ) | $ | (824,153 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
R6 Class | ||||||||||||||||||||||||||||
February 28, 2018A to April 30, 2018 | ||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | ||||||||||||||||||||||||||
Shares sold | 5,903 | $ | 100,000 | |||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
Net (decrease) in shares outstanding | 5,903 | $ | 100,000 | |||||||||||||||||||||||||
|
|
|
|
A Commencement of operations.
12. 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.
59
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Institutional ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.30 | $ | 15.26 | $ | 15.79 | $ | 16.79 | $ | 16.31 | $ | 14.27 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.14 | 0.36 | 0.27 | 0.32 | 0.38 | 0.30 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.17 | 2.04 | 0.20 | (0.32 | ) | 1.35 | 2.35 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income from investment operations | 0.31 | 2.40 | 0.47 | – | 1.73 | 2.65 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.32 | ) | (0.36 | ) | (0.25 | ) | (0.22 | ) | (0.42 | ) | (0.30 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.80 | ) | – | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.12 | ) | (0.36 | ) | (1.00 | ) | (1.00 | ) | (1.25 | ) | (0.61 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.49 | $ | 17.30 | $ | 15.26 | $ | 15.79 | $ | 16.79 | $ | 16.31 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 1.66 | %C | 15.82 | % | 3.30 | % | (0.07 | )% | 11.15 | % | 19.04 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 74,831,833 | $ | 88,015,702 | $ | 485,231,068 | $ | 99,173,943 | $ | 74,422,347 | $ | 60,916,035 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.64 | %D | 0.59 | % | 0.62 | % | 0.58 | % | 0.58 | % | 0.60 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.64 | %D | 0.59 | % | 0.62 | % | 0.58 | % | 0.58 | % | 0.60 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.86 | %D | 1.80 | % | 1.90 | % | 1.83 | % | 2.24 | % | 1.86 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.86 | %D | 1.80 | % | 1.90 | % | 1.83 | % | 2.24 | % | 1.86 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %C | 32 | % | 16 | % | 62 | % | 34 | % | 56 | % |
A | On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
See accompanying notes
60
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.39 | $ | 15.30 | $ | 15.84 | $ | 16.83 | $ | 16.37 | $ | 14.32 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.16 | 0.24 | 0.30 | 0.30 | 0.40 | 0.39 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.15 | 2.20 | 0.13 | (0.30 | ) | 1.31 | 2.26 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income from investment operations | 0.31 | 2.44 | 0.43 | - | 1.71 | 2.65 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.31 | ) | (0.35 | ) | (0.22 | ) | (0.21 | ) | (0.42 | ) | (0.29 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.80 | ) | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.11 | ) | (0.35 | ) | (0.97 | ) | (0.99 | ) | (1.25 | ) | (0.60 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.59 | $ | 17.39 | $ | 15.30 | $ | 15.84 | $ | 16.83 | $ | 16.37 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 1.68 | %B | 16.05 | % | 3.06 | % | (0.07 | )% | 10.98 | % | 18.97 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 65,258,364 | $ | 64,926,394 | $ | 28,843,268 | $ | 39,151,318 | $ | 36,113,608 | $ | 7,262,894 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 0.71 | %C | 0.68 | % | 0.72 | % | 0.66 | % | 0.67 | % | 0.68 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 0.71 | %C | 0.68 | % | 0.72 | % | 0.66 | % | 0.68 | % | 0.70 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 1.78 | %C | 1.67 | % | 1.95 | % | 1.75 | % | 2.01 | % | 1.71 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 1.78 | %C | 1.67 | % | 1.95 | % | 1.75 | % | 2.01 | % | 1.69 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %B | 32 | % | 16 | % | 62 | % | 34 | % | 56 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
See accompanying notes
61
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 15.51 | $ | 13.71 | $ | 14.30 | $ | 15.31 | $ | 14.98 | $ | 13.16 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.11 | 0.15 | 0.18 | 0.22 | 0.42 | 0.26 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.15 | 1.96 | 0.18 | (0.26 | ) | 1.11 | 2.13 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.26 | 2.11 | 0.36 | (0.04 | ) | 1.53 | 2.39 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.29 | ) | (0.31 | ) | (0.20 | ) | (0.19 | ) | (0.37 | ) | (0.26 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.80 | ) | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.09 | ) | (0.31 | ) | (0.95 | ) | (0.97 | ) | (1.20 | ) | (0.57 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 14.68 | $ | 15.51 | $ | 13.71 | $ | 14.30 | $ | 15.31 | $ | 14.98 | ||||||||||||||||||||||||||||||||
|
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|
| |||||||||||||||||||||||||||||||||
Total returnA | 1.59 | %B | 15.52 | % | 2.85 | % | (0.35 | )% | 10.75 | % | 18.65 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 116,294,718 | $ | 124,143,894 | $ | 127,235,433 | $ | 155,757,561 | $ | 165,808,020 | $ | 109,336,889 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.92 | %C | 0.89 | % | 0.95 | % | 0.91 | % | 0.92 | % | 0.92 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.92 | %C | 0.89 | % | 0.95 | % | 0.91 | % | 0.92 | % | 0.92 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.57 | %C | 1.48 | % | 1.72 | % | 1.51 | % | 1.84 | % | 1.62 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.57 | %C | 1.48 | % | 1.72 | % | 1.51 | % | 1.84 | % | 1.62 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %B | 32 | % | 16 | % | 62 | % | 34 | % | 56 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
See accompanying notes
62
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 16.38 | $ | 14.46 | $ | 15.02 | $ | 16.04 | $ | 15.65 | $ | 13.73 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.05 | 0.21 | 0.24 | 0.22 | 0.18 | (0.12 | ) | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.21 | 1.99 | 0.12 | (0.29 | ) | 1.39 | 2.60 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.26 | 2.20 | 0.36 | (0.07 | ) | 1.57 | 2.48 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.28 | ) | (0.17 | ) | (0.17 | ) | (0.35 | ) | (0.25 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.80 | ) | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.07 | ) | (0.28 | ) | (0.92 | ) | (0.95 | ) | (1.18 | ) | (0.56 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.57 | $ | 16.38 | $ | 14.46 | $ | 15.02 | $ | 16.04 | $ | 15.65 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 1.47 | %B | 15.31 | % | 2.71 | % | (0.58 | )% | 10.58 | % | 18.52 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 6,842,344 | $ | 10,944,675 | $ | 10,603,004 | $ | 13,510,138 | $ | 14,705,747 | $ | 6,352,890 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.13 | %C | 1.08 | % | 1.12 | % | 1.06 | % | 1.07 | % | 1.07 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.13 | %C | 1.08 | % | 1.12 | % | 1.06 | % | 1.07 | % | 1.07 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.38 | %C | 1.29 | % | 1.55 | % | 1.35 | % | 1.75 | % | 1.32 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.38 | %C | 1.29 | % | 1.55 | % | 1.35 | % | 1.75 | % | 1.32 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %B | 32 | % | 16 | % | 62 | % | 34 | % | 56 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
See accompanying notes
63
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 15.48 | $ | 13.69 | $ | 14.27 | $ | 15.29 | $ | 14.97 | $ | 13.16 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.14 | 0.16 | 0.21 | 0.23 | 0.33 | 0.22 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.14 | 1.93 | 0.15 | (0.29 | ) | 1.18 | 2.14 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.28 | 2.09 | 0.36 | (0.06 | ) | 1.51 | 2.36 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.30 | ) | (0.19 | ) | (0.18 | ) | (0.36 | ) | (0.24 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.80 | ) | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.10 | ) | (0.30 | ) | (0.94 | ) | (0.96 | ) | (1.19 | ) | (0.55 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 14.66 | $ | 15.48 | $ | 13.69 | $ | 14.27 | $ | 15.29 | $ | 14.97 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 1.71 | %B | 15.36 | % | 2.84 | % | (0.48 | )% | 10.67 | % | 18.45 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 20,896,532 | $ | 21,934,880 | $ | 24,892,096 | $ | 29,074,120 | $ | 25,578,944 | $ | 6,284,539 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 0.77 | %C | 0.99 | % | 1.02 | % | 0.97 | % | 1.02 | % | 1.10 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 0.77 | %C | 0.99 | % | 1.02 | % | 0.97 | % | 1.04 | % | 1.10 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 1.72 | %C | 1.39 | % | 1.64 | % | 1.44 | % | 1.68 | % | 1.31 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 1.72 | %C | 1.39 | % | 1.64 | % | 1.44 | % | 1.67 | % | 1.30 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %B | 32 | % | 16 | % | 62 | % | 34 | % | 56 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
See accompanying notes
64
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 15.64 | $ | 13.83 | $ | 14.43 | $ | 15.47 | $ | 15.13 | $ | 13.33 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.08 | 0.12 | 0.14 | 0.21 | 0.17 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 0.15 | 1.92 | 0.13 | (0.29 | ) | 1.20 | 2.11 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.23 | 2.00 | 0.25 | (0.15 | ) | 1.41 | 2.28 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.25 | ) | (0.19 | ) | (0.10 | ) | (0.11 | ) | (0.24 | ) | (0.17 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.80 | ) | - | (0.75 | ) | (0.78 | ) | (0.83 | ) | (0.31 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.05 | ) | (0.19 | ) | (0.85 | ) | (0.89 | ) | (1.07 | ) | (0.48 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 14.82 | $ | 15.64 | $ | 13.83 | $ | 14.43 | $ | 15.47 | $ | 15.13 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 1.32 | %B | 14.50 | % | 2.03 | % | (1.14 | )% | 9.80 | % | 17.50 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 39,647,649 | $ | 42,575,983 | $ | 40,827,570 | $ | 45,641,648 | $ | 32,045,404 | $ | 11,573,900 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.46 | %C | 1.73 | % | 1.77 | % | 1.72 | % | 1.78 | % | 1.84 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.46 | %C | 1.73 | % | 1.77 | % | 1.72 | % | 1.79 | % | 1.85 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 1.03 | %C | 0.63 | % | 0.89 | % | 0.69 | % | 0.94 | % | 0.51 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 1.03 | %C | 0.63 | % | 0.89 | % | 0.69 | % | 0.93 | % | 0.50 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %B | 32 | % | 16 | % | 62 | % | 34 | % | 56 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
See accompanying notes
65
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015A | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.25 | $ | 14.03 | $ | 14.62 | $ | 14.76 | $ | 14.33 | $ | 10.95 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.10 | 0.16 | 0.26 | 0.16 | 0.12 | 0.13 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.16 | ) | 3.28 | 0.03 | 0.25 | 1.27 | 3.93 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (0.06 | ) | 3.44 | 0.29 | 0.41 | 1.39 | 4.06 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.16 | ) | (0.22 | ) | (0.17 | ) | (0.10 | ) | (0.11 | ) | (0.20 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.44 | ) | – | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.60 | ) | (0.22 | ) | (0.88 | ) | (0.55 | ) | (0.96 | ) | (0.68 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.59 | $ | 17.25 | $ | 14.03 | $ | 14.62 | $ | 14.76 | $ | 14.33 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | (0.47 | )%D | 24.71 | % | 2.39 | % | 2.73 | % | 10.20 | % | 39.18 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 275,607,991 | $ | 265,934,589 | $ | 195,472,135 | $ | 258,503,278 | $ | 193,634,639 | $ | 72,206,907 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 0.84 | %E | 0.89 | % | 0.89 | % | 0.85 | % | 0.89 | % | 0.99 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 0.84 | %E | 0.89 | % | 0.89 | % | 0.85 | % | 0.93 | % | 0.98 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 1.23 | %E | 1.06 | % | 1.65 | % | 1.10 | % | 0.92 | % | 1.05 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 1.23 | %E | 1.06 | % | 1.65 | % | 1.10 | % | 0.88 | % | 1.06 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 16 | %D | 28 | % | 27 | % | 79 | % | 24 | % | 48 | % |
A | WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015. |
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. |
See accompanying notes
66
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015A | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.11 | $ | 13.92 | $ | 14.52 | $ | 14.66 | $ | 14.25 | $ | 10.92 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.10 | 0.15 | 0.23 | 0.15 | 0.18 | 0.17 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.16 | ) | 3.25 | 0.05 | 0.26 | 1.19 | 3.86 | |||||||||||||||||||||||||||||||||||||
|
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|
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|
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|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (0.06 | ) | 3.40 | 0.28 | 0.41 | 1.37 | 4.03 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.21 | ) | (0.17 | ) | (0.10 | ) | (0.11 | ) | (0.22 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.44 | ) | – | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.59 | ) | (0.21 | ) | (0.88 | ) | (0.55 | ) | (0.96 | ) | (0.70 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | – | – | – | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.46 | $ | 17.11 | $ | 13.92 | $ | 14.52 | $ | 14.66 | $ | 14.25 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | (0.49 | )%D | 24.60 | % | 2.29 | % | 2.76 | % | 10.15 | % | 38.99 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 109,139,225 | $ | 100,190,167 | $ | 68,994,531 | $ | 70,009,288 | $ | 31,074,584 | $ | 2,813,712 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.92 | %E | 0.97 | % | 0.96 | % | 0.94 | % | 0.98 | % | 1.11 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.92 | %E | 0.97 | % | 0.96 | % | 0.94 | % | 0.98 | % | 1.08 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.16 | %E | 0.98 | % | 1.59 | % | 1.02 | % | 0.80 | % | 0.79 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.16 | %E | 0.98 | % | 1.59 | % | 1.02 | % | 0.80 | % | 0.82 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 16 | %D | 28 | % | 27 | % | 79 | % | 24 | % | 48 | % |
A | WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015. |
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. |
See accompanying notes
67
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015A | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.40 | $ | 14.14 | $ | 14.73 | $ | 14.89 | $ | 14.47 | $ | 10.98 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.09 | 0.14 | 0.21 | 0.13 | 0.16 | 0.23 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.17 | ) | 3.31 | 0.05 | 0.25 | 1.21 | 3.83 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (0.08 | ) | 3.45 | 0.26 | 0.38 | 1.37 | 4.06 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.13 | ) | (0.19 | ) | (0.14 | ) | (0.09 | ) | (0.10 | ) | (0.09 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.44 | ) | – | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.57 | ) | (0.19 | ) | (0.85 | ) | (0.54 | ) | (0.95 | ) | (0.57 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | – | – | – | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.75 | $ | 17.40 | $ | 14.14 | $ | 14.73 | $ | 14.89 | $ | 14.47 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | (0.60 | )%D | 24.52 | % | 2.12 | % | 2.52 | % | 9.99 | % | 38.69 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 405,581,397 | $ | 274,552,551 | $ | 243,421,035 | $ | 304,799,582 | $ | 246,404,670 | $ | 17,871,568 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.06 | %E | 1.09 | % | 1.12 | % | 1.09 | % | 1.13 | % | 1.25 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.06 | %E | 1.09 | % | 1.12 | % | 1.09 | % | 1.14 | % | 1.23 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 1.04 | %E | 0.86 | % | 1.44 | % | 0.87 | % | 0.61 | % | 0.68 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 1.04 | %E | 0.86 | % | 1.44 | % | 0.87 | % | 0.60 | % | 0.70 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 16 | %D | 28 | % | 27 | % | 79 | % | 24 | % | 48 | % |
A | WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015. |
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. |
See accompanying notes
68
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015A | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 16.83 | $ | 13.69 | $ | 14.27 | $ | 14.46 | $ | 14.07 | $ | 10.81 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.05 | 0.10 | 0.16 | 0.08 | 0.11 | 0.11 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.15 | ) | 3.18 | 0.05 | 0.25 | 1.17 | 3.83 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (0.10 | ) | 3.28 | 0.21 | 0.33 | 1.28 | 3.94 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.03 | ) | (0.14 | ) | (0.08 | ) | (0.07 | ) | (0.04 | ) | (0.20 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.44 | ) | – | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.47 | ) | (0.14 | ) | (0.79 | ) | (0.52 | ) | (0.89 | ) | (0.68 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | – | – | – | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.26 | $ | 16.83 | $ | 13.69 | $ | 14.27 | $ | 14.46 | $ | 14.07 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | (0.72 | )%D | 24.10 | % | 1.82 | % | 2.25 | % | 9.58 | % | 38.43 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 4,007,125 | $ | 3,682,231 | $ | 6,622,356 | $ | 6,684,131 | $ | 7,149,083 | $ | 727,587 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.41 | %E | 1.40 | % | 1.40 | % | 1.37 | % | 1.40 | % | 1.61 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.41 | %E | 1.40 | % | 1.40 | % | 1.37 | % | 1.46 | % | 1.49 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 0.67 | %E | 0.55 | % | 1.16 | % | 0.58 | % | 0.35 | % | 0.46 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 0.67 | %E | 0.55 | % | 1.16 | % | 0.58 | % | 0.30 | % | 0.58 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 16 | %D | 28 | % | 27 | % | 79 | % | 24 | % | 48 | % |
A | WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015. |
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. |
See accompanying notes
69
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015A | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 16.84 | $ | 13.70 | $ | 14.28 | $ | 14.43 | $ | 14.09 | $ | 10.82 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.10 | 0.13 | 0.18 | 0.11 | 0.13 | 0.14 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.19 | ) | 3.18 | 0.05 | 0.25 | 1.16 | 3.80 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (0.09 | ) | 3.31 | 0.23 | 0.36 | 1.29 | 3.94 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.07 | ) | (0.17 | ) | (0.10 | ) | (0.06 | ) | (0.10 | ) | (0.19 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.44 | ) | - | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.51 | ) | (0.17 | ) | (0.81 | ) | (0.51 | ) | (0.95 | ) | (0.67 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.24 | $ | 16.84 | $ | 13.70 | $ | 14.28 | $ | 14.43 | $ | 14.09 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | (0.65 | )%D | 24.26 | % | 1.98 | % | 2.35 | % | 9.68 | % | 38.39 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 14,404,048 | $ | 18,170,218 | $ | 19,486,655 | $ | 16,422,504 | $ | 18,345,497 | $ | 1,666,696 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.22 | %E | 1.27 | % | 1.26 | % | 1.25 | % | 1.33 | % | 1.48 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.22 | %E | 1.27 | % | 1.26 | % | 1.25 | % | 1.33 | % | 1.49 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 0.83 | %E | 0.69 | % | 1.30 | % | 0.71 | % | 0.42 | % | 0.44 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 0.83 | %E | 0.69 | % | 1.30 | % | 0.71 | % | 0.42 | % | 0.43 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 16 | %D | 28 | % | 27 | % | 79 | % | 24 | % | 48 | % |
A | WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015. |
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. |
See accompanying notes
70
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015A | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 16.27 | $ | 13.26 | $ | 13.87 | $ | 14.08 | $ | 13.81 | $ | 10.70 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.03 | (0.03 | ) | 0.07 | 0.01 | 0.08 | 0.11 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.16 | ) | 3.11 | 0.06 | 0.23 | 1.09 | 3.67 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (0.13 | ) | 3.08 | 0.13 | 0.24 | 1.17 | 3.78 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | - | (0.07 | ) | (0.03 | ) | - | (0.05 | ) | (0.19 | ) | ||||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.44 | ) | - | (0.71 | ) | (0.45 | ) | (0.85 | ) | (0.48 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.44 | ) | (0.07 | ) | (0.74 | ) | (0.45 | ) | (0.90 | ) | (0.67 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.70 | $ | 16.27 | $ | 13.26 | $ | 13.87 | $ | 14.08 | $ | 13.81 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | (0.91 | )%D | 23.27 | % | 1.19 | % | 1.57 | % | 8.88 | % | 37.32 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
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Ratios and supplemental data: |
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Net assets, end of period | $ | 6,899,344 | $ | 6,520,983 | $ | 6,030,130 | $ | 6,238,827 | $ | 5,104,394 | $ | 904,692 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.85 | %E | 2.04 | % | 2.04 | % | 2.01 | % | 2.12 | % | 2.25 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.85 | %E | 2.04 | % | 2.04 | % | 2.01 | % | 2.13 | % | 2.24 | % | ||||||||||||||||||||||||||||||||
Net investment income (loss), before expense reimbursements or recoupments | 0.23 | %E | (0.09 | )% | 0.53 | % | (0.05 | )% | (0.33 | )% | (0.27 | )% | ||||||||||||||||||||||||||||||||
Net investment income (loss), net of reimbursements or recoupments | 0.23 | %E | (0.09 | )% | 0.53 | % | (0.05 | )% | (0.34 | )% | (0.26 | )% | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 16 | %D | 28 | % | 27 | % | 79 | % | 24 | % | 48 | % |
A | WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015. |
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. |
See accompanying notes
71
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||
February 28, 2018A to April 30, 2018 | ||||
(unaudited) | ||||
Net asset value, beginning of period | $ | 16.94 | ||
|
| |||
Income (loss) from investment operations: | ||||
Net investment income | 0.04 | |||
Net gains (losses) on investments (both realized and unrealized) | (0.39 | ) | ||
|
| |||
Total income (loss) from investment operations | (0.35 | ) | ||
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| |||
Net asset value, end of period | $ | 16.59 | ||
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| |||
Total returnB | (0.47 | )%C | ||
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Ratios and supplemental data: |
| |||
Net assets, end of period | $ | 97,935 | ||
Ratios to average net assets: | ||||
Expenses, before reimbursements | 2.69 | %D | ||
Expenses, net of reimbursements | 0.88 | %D | ||
Net investment income (loss), before expense reimbursements | (0.36 | )%D | ||
Net investment income, net of reimbursements | 1.45 | %D | ||
Portfolio turnover rate | 16 | %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. |
See accompanying notes
72
Delivery of Documents
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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 Funds file a complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) on Forms N-Q as of the first and third fiscal quarters. The Funds’ 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. Complete schedules of the Funds’ portfolio holdings are 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 Kansas City, Missouri | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas | DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, TX |
This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.
American Beacon Funds, American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund are service marks of American Beacon Advisors, Inc.
SAR 04/18
ITEM 2. CODE OF ETHICS.
Not Applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not Applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not Applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not Applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
The schedules of investments for each series of the Trust are included in the shareholder reports presented in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not Applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not Applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not Applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Trust has made no material changes to the procedures by which shareholders may recommend nominees to the Trust’s Board of Trustees since the Trust last disclosed such procedures in Schedule 14A.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon an evaluation within 90 days of the filing date of this report, the principal executive and financial officers concluded that the disclosure controls and procedures of the Trust are effective.
(b) There were no changes in the Trust’s internal control over financial reporting during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not Applicable.
(a)(2) A separate certification for each principal executive officer and principal financial officer of the Trust as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) is attached hereto as EX-99.CERT.
(a)(3) Not Applicable.
(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940 are attached hereto as EX-99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): American Beacon Funds
By | /s/ Gene L. Needles, Jr. | |
Gene L. Needles, Jr. | ||
President | ||
American Beacon Funds |
Date: July 10, 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: July 10, 2018
By | /s/ Melinda G. Heika | |
Melinda G. Heika | ||
Treasurer | ||
American Beacon Funds |
Date: July 10, 2018