UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMN-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number:811-4984
AMERICAN BEACON FUNDS
(Exact name of registrant as specified in charter)
220 East Las Colinas Boulevard, Suite 1200
Irving, Texas 75039
(Address of principal executive offices)-(Zip code)
GENE L. NEEDLES, JR., PRESIDENT
220 East Las Colinas Boulevard, Suite 1200
Irving, Texas 75039
(Name and address of agent for service)
Registrant’s telephone number, including area code: (817)391-6100
Date of fiscal year end: August 31, 2019
Date of reporting period: February 28, 2019
FormN-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 Rule30e-1 under the Investment Company Act of 1940 (17 CFR270.30e-1). The Commission may use the information provided on FormN-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by FormN-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in FormN-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.
SiM HIGH YIELD OPPORTUNITIES FUND
Investments inhigh-yield securitiesare subject to greater levels of credit, interest rate, market and liquidity risks than investment-grade securities. Investing inforeign and emerging market securitiesmay involve heightened risk due to currency fluctuations and economic and political risks. Investing inderivative instrumentsinvolves liquidity, credit, interest rate and market risks.
SOUND POINT FLOATING RATE INCOME FUND
Investments inhigh-yield securities,includingloans, restricted securitiesandfloating rate securitiesare subject to greater levels of credit, interest rate, market, and liquidity risks than investment-grade securities. In addition,loansare subject to the risk that the Fund may not be able to obtain the collateral securing the loan in a timely manner and the value of the collateral may not cover the amount owed on the loan.
Please see the prospectus for a complete discussion of the Funds’ risks. There can be no assurances that the investment objectives of these Funds will be met.
Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and 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 Advisors February 28, 2019 |
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Back Cover |
![]() | Dear Shareholders,
The market volatility of December 2018 – a month in which all major U.S. equity indexes declined and the year ended in negative territory – serves as a prime example of the importance of having a long-term investment perspective.
While long-term investing isn’t about identifying and anticipating the next big market move, it is about identifying the right investment products for riding out those moves. As a long-term investor, you should strive to accomplish the three Ds: direction, discipline and diversification.
u Direction: Achieving your long-term financial goals requires an |
individualized plan of action. You may want your plan to provide some measure of protection against periods of geopolitical turmoil, economic uncertainty, market volatility and job insecurity. Your plan should be reviewed annually and be adjusted in the event your long-range needs change. |
u | Discipline:Long-term, systematic participation in an investment portfolio requires your resolution to stay the course. Spending time in the market – rather than trying to time the market – may place you in a better position to reach your long-term financial goals. |
u | Diversification: By investing in different types of investment categories and asset classes, you may be able to help mitigate financial risks across your investment portfolio. By allocating your investment portfolio according to your risk-tolerance level, you may be better positioned to weather storms and achieve your long-term financial goals. |
Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term financial goals.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. 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 investment portfolio.
Many of thesub-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 long-term rewards.
Thank you for your continued interest in American Beacon. For additional information about our funds or to access your account information, please visit our website atwww.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon SiM High Yield Opportunities FundSM
February 28, 2019 (Unaudited)
The Investor Class of the American Beacon SiM High Yield Opportunities Fund (the “Fund”) returned 1.60% for the six months ended February 28, 2019. The Fund underperformed the ICE BofAML High Yield Master II Index (the “Index”) return of 1.98% for the same period.
Total Returns for the Period ended February 28, 2019 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | Since Inception | |||||||||||||||||||||||||||
Institutional Class (1,2,4) | SHOIX | 1.76 | % | 3.99 | % | 9.30 | % | 4.78 | % | 6.65 | % | |||||||||||||||||||||
Y Class (1,2,4) | SHOYX | 1.73 | % | 3.92 | % | 9.25 | % | 4.71 | % | 6.55 | % | |||||||||||||||||||||
Investor Class (1,2,4) | SHYPX | 1.60 | % | 3.77 | % | 8.99 | % | 4.45 | % | 6.26 | % | |||||||||||||||||||||
A without Sales Charge (1,2,4) | SHOAX | 1.25 | % | 3.46 | % | 8.84 | % | 4.36 | % | 6.17 | % | |||||||||||||||||||||
A with Sales Charge (1,2,4) | SHOAX | (3.60 | )% | (1.46 | )% | 7.09 | % | 3.36 | % | 5.53 | % | |||||||||||||||||||||
C without Sales Charge (1,2,4) | SHOCX | 1.24 | % | 2.93 | % | 8.14 | % | 3.63 | % | 5.44 | % | |||||||||||||||||||||
C with Sales Charge (1,2,4) | SHOCX | 0.24 | % | 1.93 | % | 8.14 | % | 3.63 | % | 5.44 | % | |||||||||||||||||||||
ICE BofAML High Yield Master II Index (3) | 1.98 | % | 4.26 | % | 9.91 | % | 4.54 | % | 6.15 | % |
* | 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 visitwww.americanbeaconfunds.com call1-800-967-9009. 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 Class shares have a maximum sales charge of 4.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase. |
2. | A portion of the fees charged to the Institutional Class of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than actual returns shown. A portion of the fees charged to the Investor Class of the Fund was waived in 2011 and 2012, partially recovered in 2013 and fully recovered in 2016. Performance prior to waiving fees was lower than actual returns shown for 2011 and 2012. A portion of the fees charged to the A and C Classes of the Fund was waived from 2011 through 2014, partially recovered in 2015 and fully recovered in 2016. Performance prior to waiving fees was lower than the actual returns shown from 2011 through 2014. A portion of the fees charged to the Y Class of the Fund was waived from 2011 through 2013 and fully recovered in 2015. Performance prior to waving fees was lower than actual returns shown from 2011 through 2013. |
3. | The ICE BofAML High Yield Master II Index tracks the performance of U.S. dollar-denominated below-investment-grade corporate debt publicly issued in the U.S. domestic market. Qualifying securities must have a below-investment-grade rating and an investment-grade rated country of risk. In addition, qualifying securities must have at leastone-year remaining term to final maturity, a fixed coupon schedule and a minimum amount outstanding of $100 million. Defaulted securities and securities eligible for the dividends-received deduction are excluded from the Index. One cannot directly invest in an index. |
4. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, and C Class shares were 0.87%, 0.88%, 1.14%, 1.07%, and 1.85%, 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. |
Issue selection within the Fund’s Manufacturing, Consumer, and Foreign Sovereign sectors added value to performance. Conversely, the Fund’s issue selection within the Energy sector detracted from the Fund’s relative returns.
From a sector allocation standpoint, an overweight to the Transportation sector detracted the most from relative performance. Conversely, an overweight to the Consumer sector added value to the Fund’s relative return.
From a credit quality selection perspective, the Fund’s relative performance was aided by issue selection within theNot-rated and theBB-rated credit categories. Conversely, the Fund’s issue selection within theCCC-rated credit category hurt relative returns.
From a credit quality allocation standpoint, the Fund’s underweight to theBB-rated and overweight to theNot-rated credit categories detracted from the Fund’s relative performance. In contrast, an underweight in theCCC-rated credit category added value to the Fund’s returns.
2
American Beacon SiM High Yield Opportunities FundSM
Performance Overview
February 28, 2019 (Unaudited)
Thesub-advisor’s investment process of identifying long-term secular themes and seekingout-of-favor sectors throughbottom-up fundamental research remains in place.
Top Ten Holdings (% Net Assets) |
| |||||||
California Resources Corp., 8.000%, Due 12/15/2022 | 2.3 | |||||||
Hellenic Republic Government Bond, 3.000%, Due 2/24/2023, Series PSI | 1.9 | |||||||
JBS USA LUX S.A. / JBS USA Finance, Inc., 5.875%, Due 7/15/2024 | 1.8 | |||||||
MEG Energy Corp., 7.000%, Due 3/31/2024 | 1.8 | |||||||
Athabasca Oil Corp., 9.875%, Due 2/24/2022 | 1.7 | |||||||
Kissner Holdings LP / Kissner Milling Co., Ltd. / BSC Holding, Inc. / Kissner USA, 8.375%, Due 12/1/2022 | 1.7 | |||||||
Kratos Defense & Security Solutions, Inc., 6.500%, Due 11/30/2025 | 1.7 | |||||||
Post Holdings, Inc., 5.000%, Due 8/15/2026 | 1.7 | |||||||
Denbury Resources, Inc., 5.500%, Due 5/1/2022 | 1.6 | |||||||
Gartner, Inc., 5.125%, Due 4/1/2025 | 1.6 | |||||||
Total Fund Holdings | 91 | |||||||
Sector Allocation (% Investments) |
| |||||||
Consumer,Non-Cyclical | 32.1 | |||||||
Industrial | 17.2 | |||||||
Energy | 16.1 | |||||||
Consumer, Cyclical | 11.1 | |||||||
Communications | 6.7 | |||||||
Technology | 4.2 | |||||||
Basic Materials | 3.6 | |||||||
Financials | 2.6 | |||||||
Foreign Sovereign Obligations | 2.6 | |||||||
Exchange-Traded Instruments | 1.4 | |||||||
Utilities | 1.4 | |||||||
Consumer | 1.0 | |||||||
Consumer Staples | 0.0 | |||||||
Country Allocation (% Fixed Income) |
| |||||||
United States | 66.3 | |||||||
Canada | 15.5 | |||||||
Greece | 2.7 | |||||||
Brazil | 2.3 | |||||||
United Kingdom | 1.6 | |||||||
Argentina | 1.5 | |||||||
Chile | 1.5 | |||||||
Luxembourg | 1.5 | |||||||
Netherlands | 1.4 | |||||||
Mexico | 1.3 | |||||||
Monaco | 1.3 | |||||||
Norway | 1.3 | |||||||
Supranational | 1.2 | |||||||
Bermuda | 0.5 | |||||||
Spain | 0.1 |
3
American Beacon Sound Point Floating Rate Income FundSM
Performance Overview
February 28, 2019 (Unaudited)
The Investor Class of the American Beacon Sound Point Floating Rate Income Fund (the “Fund”) returned 0.86% for the six months ended February 28, 2019. The Fund underperformed the Credit Suisse Leveraged Loan Index (the “Index”) return of 1.39% for the same period. For further comparison, the Fund has returned 5.49% annualized since inception, compared to the Index return of 4.39% for the same period.
Total Returns for the Period ended February 28, 2019 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | Since Inception | |||||||||||||||||||||||||||
Institutional Class (1,2,6) | SPFLX | 1.14 | % | 3.07 | % | 5.76 | % | 4.93 | % | 5.68 | % | |||||||||||||||||||||
Y Class (1,2,3,6) | SPFYX | 1.08 | % | 3.09 | % | 5.69 | % | 4.84 | % | 5.61 | % | |||||||||||||||||||||
Investor Class (1,2,3,6) | SPFPX | 0.87 | % | 2.69 | % | 5.46 | % | 4.69 | % | 5.49 | % | |||||||||||||||||||||
A without Sales Charge (1,2,3,6) | SOUAX | 0.94 | % | 2.73 | % | 5.37 | % | 4.64 | % | 5.44 | % | |||||||||||||||||||||
A with Sales Charge (1,2,3,6) | SOUAX | (1.55 | )% | 0.12 | % | 4.47 | % | 4.11 | % | 5.01 | % | |||||||||||||||||||||
C without Sales Charge (1,2,3,6) | SOUCX | 0.57 | % | 2.07 | % | 4.62 | % | 4.16 | % | 5.06 | % | |||||||||||||||||||||
C with Sales Charge (1,2,3,6) | SOUCX | (0.43 | )% | 1.07 | % | 4.62 | % | 4.16 | % | 5.06 | % | |||||||||||||||||||||
SP Class (1,2,4,6) | SPFRX | 0.94 | % | 2.81 | % | 5.50 | % | 4.67 | % | 5.47 | % | |||||||||||||||||||||
Credit Suisse Leveraged Loan Index (5) | 1.39 | % | 3.78 | % | 6.83 | % | 3.93 | % | 4.39 | % |
* | 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 visitwww.americanbeaconfunds.com or call1-800-967-9009. 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 Class shares have a maximum sales charge of 2.50%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase. |
2. | A portion of the fees charged to the Institutional Class of the Fund has been waived from Fund inception through 2017 and partially recovered in 2018. Performance prior to waiving fees was lower than actual returns shown for Fund inception through 2017. A portion of fees charged to the Investor and Y Classes of the Fund was waived from Class inception through 2016 and fully recovered in 2017. Performance prior to waiving fees was lower than actual returns shown for Class inception through 2016. A portion of fees charged to the A, C and SP Classes of the Fund was waived from Class inception through 2016 and partially recovered in 2017 and 2018. Performance prior to waiving fees was lower than actual returns shown for Class inception through 2016. |
3. | Fund performance represents the returns achieved by the Institutional Class from 12/3/12 up to 12/11/15, the inception date of the Y, Investor, A, and C Classes, and the returns of each Class since its inception. Expenses of the Institutional Class are lower than the other Classes. Therefore, total returns shown may be higher than they would have been had each Class been in existence since 12/3/12. |
4. | Fund performance represents the returns achieved by the Institutional Class from 12/3/12 up to 5/31/14, the inception date of the SP Class, and the returns of the SP Class since its inception. Expenses of the Institutional Class are lower than the SP Class. Therefore, total returns shown may be higher than they would have been had the SP Class been in existence since 12/3/12. |
5. | The Credit Suisse Leveraged Loan Index is an index designed to mirror the investable universe of the U.S. dollar-denominated leveraged loan market. One cannot directly invest in an index. |
6. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, C, and SP Class shares were 0.84%, 0.90%, 1.06%, 1.15%, 1.90%, and 1.06%, 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 exposures to volatile sectors, including Pharmaceuticals, Gaming and Financials, was a source of underperformance as they outperformed during the period. While these sectors posted weak returns in 2018 as markets were selling off, they rebounded strongly in early-2019 with the recovery. The Fund avoids such sectors, and larger ones including Energy, Mining and Retail, as they frequently exhibit unwanted volatility and are at greater risk of credit downgrades.
Reflecting negative sentiment in risk markets, the Fund’s assets declined from $2.3 billion to $1.8 billion during the period as investors sought the safety of U.S. Treasuries. The Fund’s decline was consistent with
4
American Beacon Sound Point Floating Rate Income FundSM
Performance Overview
February 28, 2019 (Unaudited)
withdrawals from the bank loan sector overall, and it required a larger cash position than usual to fund the redemptions. The drag on returns from the additional cash contributed to its underperformance.
Notably, the Fund did outperform in late-2018 as markets sold off demonstrating the Fund’s conservative positioning. It lagged, however, in early-2019 as markets recovered. Investors were hesitant to return to high-yield credits in early-2019, so they favored large,on-the-run issues with the most trading volume. The Fund intentionally avoids these types of securities as they typically are expensive, volatile and widely held by the exchange-traded funds. Over time, these types of pricing discrepancies tend to normalize as valuations are rationalized.
Thesub-advisor continues to focus on uncovering opportunities in bank loans with lower volatility and lower credit risk and that provide a high level of current income consistent with strong, risk-adjusted returns.
Top Ten Holdings (% Net Assets) |
| |||||||
VVC Holding Corp., 7.197%, Due 2/11/2026, 2019 Term Loan B,(1-mo. LIBOR + 4.500%) | 1.1 | |||||||
William Morris Endeavor Entertainment LLC, 5.250%, Due 5/18/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 2.750%) |
| 1.0 | ||||||
RegionalCare Hospital Partners Holdings, Inc. / LifePoint Health, Inc., 9.750%, Due 12/1/2026 | 1.0 | |||||||
United Natural Foods, Inc., 6.743%, Due 10/22/2025, Term Loan B,(3-mo. LIBOR + 4.250%) | 1.0 | |||||||
Global Eagle Entertainment, Inc., 10.349%, Due 1/6/2023, 1st Lien Term Loan,(6-mo. LIBOR + 7.500%) | 0.9 | |||||||
ABG Intermediate Holdings LLC, 5.993%, Due 9/26/2024, 2017 1st LienAdd-On Term Loan,(1-mo. LIBOR + 3.500%) |
| 0.8 | ||||||
Bright Bidco B.V., 5.993%, Due 6/30/2024, 2018 Term Loan B,(1-mo. LIBOR + 3.500%) | 0.8 | |||||||
Dynatrace LLC, 5.743%, Due 8/22/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.250%) | 0.8 | |||||||
ION Trading Technologies S.a.r.l., 6.634%, Due 11/21/2024, USD Incremental Term Loan B,(2-mo. LIBOR + 4.000%) |
| 0.8 | ||||||
Univision Communications, Inc., 6.750%, Due 9/15/2022 | 0.8 | |||||||
Total Fund Holdings | 329 | |||||||
Sector Weightings (% Investments) |
| |||||||
Service | 19.1 | |||||||
Consumer | 15.6 | |||||||
Technology | 13.0 | |||||||
Manufacturing | 12.4 | |||||||
Financials | 8.9 | |||||||
Health Care | 7.0 | |||||||
Basic Materials | 5.6 | |||||||
Telecommunications | 4.2 | |||||||
Communications | 2.9 | |||||||
Energy | 2.8 | |||||||
Transportation | 2.7 | |||||||
Consumer,Non-Cyclical | 2.3 | |||||||
Media | 1.5 | |||||||
Defense | 0.8 | |||||||
Utilities | 0.6 | |||||||
Consumer, Cyclical | 0.6 | |||||||
Information Technology | 0.0 |
5
American Beacon FundsSM
February 28, 2019 (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 September 1, 2018 through February 28, 2019.
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.
6
American Beacon FundsSM
Expense Examples
February 28, 2019 (Unaudited)
American Beacon SiM High Yield Opportunities Fund |
| ||||||||||||||
Beginning Account Value 9/1/2018 | Ending Account Value 2/28/2019 | Expenses Paid During Period 9/1/2018-2/28/2019* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,017.60 | $4.20 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.63 | $4.21 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,017.30 | $4.50 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.33 | $4.51 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,016.00 | $5.75 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.09 | $5.76 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,012.50 | $5.99 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.84 | $6.01 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,012.40 | $9.48 | ||||||||||||
Hypothetical** | $1,000.00 | $1,015.37 | $9.49 |
* | Expenses are equal to the Fund’s annualized expense ratios for thesix-month period of 0.84%, 0.90%, 1.15%, 1.20%, and 1.90% for the Institutional, Y, Investor, A, and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
American Beacon Sound Point Floating Rate Income Fund |
| ||||||||||||||
Beginning Account Value 9/1/2018 | Ending Account Value 2/28/2019 | Expenses Paid During Period 9/1/2018-2/28/2019* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,011.20 | $4.19 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.63 | $4.21 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,010.70 | $4.39 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.43 | $4.41 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,008.60 | $5.88 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.94 | $5.91 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,009.20 | $5.53 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.29 | $5.56 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,005.50 | $9.35 | ||||||||||||
Hypothetical** | $1,000.00 | $1,015.47 | $9.39 | ||||||||||||
SP Class | |||||||||||||||
Actual | $1,000.00 | $1,008.30 | $5.73 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.09 | $5.76 |
* | Expenses are equal to the Fund’s annualized expense ratios for thesix-month period of 0.84%, 0.88%, 1.18%, 1.11%, 1.88% and 1.15% for the Institutional, Y, Investor, A, C, and SP 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. |
7
American Beacon SiM High Yield Opportunities FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 0.95% | |||||||||||||||
Consumer Staples - 0.04% | |||||||||||||||
Food & Staples Retailing - 0.04% | |||||||||||||||
Nueva Pescanova, S.L.A B | 301,134 | $ | 513,787 | ||||||||||||
|
| ||||||||||||||
Energy - 0.32% | |||||||||||||||
Oil, Gas & Consumable Fuels - 0.32% | |||||||||||||||
KNOT Offshore Partners LP | 207,261 | 3,751,424 | |||||||||||||
|
| ||||||||||||||
Financials - 0.31% | |||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.31% | |||||||||||||||
Annaly Capital Management, Inc. | 359,000 | 3,636,670 | |||||||||||||
|
| ||||||||||||||
Materials - 0.28% | |||||||||||||||
Chemicals - 0.28% | |||||||||||||||
CVR Partners LPB | 816,191 | 3,272,926 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $12,275,195) | 11,174,807 | ||||||||||||||
|
| ||||||||||||||
Principal Amount* | |||||||||||||||
BANK LOAN OBLIGATIONSC - 0.98% (Cost $11,415,270) | |||||||||||||||
Consumer - 0.98% | |||||||||||||||
Gol LuxCo S.A., 6.500%, Due 8/31/2020, 1st Lien Term LoanD | $ | 11,450,000 | 11,507,250 | ||||||||||||
|
| ||||||||||||||
CORPORATE OBLIGATIONS - 53.78% | |||||||||||||||
Basic Materials - 1.52% | |||||||||||||||
CVR Partners LP / CVR Nitrogen Finance Corp., 9.250%, Due 6/15/2023E | 16,915,000 | 17,843,634 | |||||||||||||
|
| ||||||||||||||
Communications - 5.11% | |||||||||||||||
Iridium Communications, Inc., 10.250%, Due 4/15/2023E | 14,775,000 | 16,141,687 | |||||||||||||
Salem Media Group, Inc., 6.750%, Due 6/1/2024E | 16,185,000 | 14,890,200 | |||||||||||||
Univision Communications, Inc., 5.125%, Due 2/15/2025E | 13,150,000 | 11,506,250 | |||||||||||||
VeriSign, Inc., 4.750%, Due 7/15/2027 | 17,680,000 | 17,459,000 | |||||||||||||
|
| ||||||||||||||
59,997,137 | |||||||||||||||
|
| ||||||||||||||
Consumer, Cyclical - 4.70% | |||||||||||||||
Buena Vista Gaming Authority, 13.000%, Due 4/1/2023E | 9,490,000 | 9,181,575 | |||||||||||||
Caesars Resort Collection LLC / CRC Finco, Inc., 5.250%, Due 10/15/2025E | 20,020,000 | 18,993,975 | |||||||||||||
Downstream Development Authority of the Quapaw Tribe of Oklahoma, 10.500%, Due 2/15/2023E | 8,605,000 | 8,755,587 | |||||||||||||
Station Casinos LLC, 5.000%, Due 10/1/2025E | 18,755,000 | 18,215,794 | |||||||||||||
|
| ||||||||||||||
55,146,931 | |||||||||||||||
|
| ||||||||||||||
Consumer,Non-Cyclical - 22.94% | |||||||||||||||
Acadia Healthcare Co., Inc., | |||||||||||||||
5.125%, Due 7/1/2022 | 5,500,000 | 5,417,500 | |||||||||||||
5.625%, Due 2/15/2023 | 12,143,000 | 12,051,928 | |||||||||||||
AMN Healthcare, Inc., 5.125%, Due 10/1/2024E | 17,772,000 | 17,549,850 | |||||||||||||
Avanos Medical, Inc., 6.250%, Due 10/15/2022 | 12,325,000 | 12,586,906 | |||||||||||||
Booz Allen Hamilton, Inc., 5.125%, Due 5/1/2025E | 18,948,000 | 18,995,370 | |||||||||||||
Charles River Laboratories International, Inc., 5.500%, Due 4/1/2026E | 16,428,000 | 17,085,120 | |||||||||||||
Dole Food Co., Inc., 7.250%, Due 6/15/2025E | 16,362,000 | 14,562,180 | |||||||||||||
Gartner, Inc., 5.125%, Due 4/1/2025E | 19,210,000 | 19,354,075 | |||||||||||||
HCA, Inc., | |||||||||||||||
4.750%, Due 5/1/2023 | 13,374,000 | 13,860,784 | |||||||||||||
4.500%, Due 2/15/2027 | 10,441,000 | 10,531,381 | |||||||||||||
MEDNAX, Inc., 5.250%, Due 12/1/2023E | 17,450,000 | 17,646,313 | |||||||||||||
Post Holdings, Inc., 5.000%, Due 8/15/2026E | 20,821,000 | 20,014,186 |
See accompanying notes
8
American Beacon SiM High Yield Opportunities FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount* | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 53.78% (continued) | |||||||||||||||
Consumer,Non-Cyclical - 22.94% (continued) | |||||||||||||||
Select Medical Corp., 6.375%, Due 6/1/2021 | $ | 13,635,000 | $ | 13,686,131 | |||||||||||
Service Corp. International, 4.625%, Due 12/15/2027 | 18,190,000 | 17,962,625 | |||||||||||||
Simmons Foods, Inc., 5.750%, Due 11/1/2024E | 21,045,000 | 17,362,125 | |||||||||||||
Tenet Healthcare Corp., 4.500%, Due 4/1/2021 | 16,200,000 | 16,402,500 | |||||||||||||
TreeHouse Foods, Inc., 6.000%, Due 2/15/2024E | 15,459,000 | 15,922,770 | |||||||||||||
Universal Health Services, Inc., 5.000%, Due 6/1/2026E | 8,180,000 | 8,282,250 | |||||||||||||
|
| ||||||||||||||
269,273,994 | |||||||||||||||
|
| ||||||||||||||
Energy - 7.50% | |||||||||||||||
Berry Petroleum Co. LLC, 7.000%, Due 2/15/2026E | 14,944,000 | 14,906,640 | |||||||||||||
California Resources Corp., 8.000%, Due 12/15/2022E | 33,720,000 | 26,933,850 | |||||||||||||
Denbury Resources, Inc., 5.500%, Due 5/1/2022 | 26,046,000 | 19,143,810 | |||||||||||||
Pioneer Energy Services Corp., 6.125%, Due 3/15/2022 | 22,922,000 | 14,097,030 | |||||||||||||
Whiting Petroleum Corp., 6.625%, Due 1/15/2026 | 13,195,000 | 12,931,100 | |||||||||||||
|
| ||||||||||||||
88,012,430 | |||||||||||||||
|
| ||||||||||||||
Financial - 0.94% | |||||||||||||||
MPT Operating Partnership LP / MPT Finance Corp., 5.000%, Due 10/15/2027 | 11,120,000 | 11,036,600 | |||||||||||||
|
| ||||||||||||||
Industrial - 6.97% | |||||||||||||||
AECOM, 5.875%, Due 10/15/2024 | 13,009,000 | 13,572,290 | |||||||||||||
BWX Technologies, Inc., 5.375%, Due 7/15/2026E | 17,270,000 | 17,615,400 | |||||||||||||
JPW Industries Holding Corp., 9.000%, Due 10/1/2024E | 11,535,000 | 11,448,487 | |||||||||||||
Kratos Defense & Security Solutions, Inc., 6.500%, Due 11/30/2025E | 19,065,000 | 19,756,106 | |||||||||||||
LSB Industries, Inc., 9.625%, Due 5/1/2023E | 10,970,000 | 11,463,650 | |||||||||||||
Multi-Color Corp., 4.875%, Due 11/1/2025E | 7,825,000 | 7,932,594 | |||||||||||||
|
| ||||||||||||||
81,788,527 | |||||||||||||||
|
| ||||||||||||||
Technology - 4.10% | |||||||||||||||
DynCorp International, Inc., 11.875%, Due 11/30/2020, Cash (10.375%) or PIK(in-kind rate 1.500%) | 9,196,789 | 9,426,709 | |||||||||||||
Entegris, Inc., 4.625%, Due 2/10/2026E | 9,640,000 | 9,471,300 | |||||||||||||
Leidos, Inc., | |||||||||||||||
7.125%, Due 7/1/2032 | 10,336,000 | 10,853,523 | |||||||||||||
5.500%, Due 7/1/2033 | 6,996,000 | 5,880,830 | |||||||||||||
Qorvo, Inc., 5.500%, Due 7/15/2026E | 12,262,000 | 12,476,585 | |||||||||||||
|
| ||||||||||||||
48,108,947 | |||||||||||||||
|
| ||||||||||||||
Total Corporate Obligations (Cost $648,990,616) | 631,208,200 | ||||||||||||||
|
| ||||||||||||||
CONVERTIBLE OBLIGATIONS - 2.21% | |||||||||||||||
Communications - 1.43% | |||||||||||||||
Gogo, Inc., 6.000%, Due 5/15/2022E | 17,526,000 | 16,760,307 | |||||||||||||
|
| ||||||||||||||
Consumer, Cyclical - 0.32% | |||||||||||||||
Titan Machinery, Inc., 3.750%, Due 5/1/2019 | 3,830,000 | 3,777,276 | |||||||||||||
|
| ||||||||||||||
Industrial - 0.46% | |||||||||||||||
DHT Holdings, Inc., 4.500%, Due 8/15/2021E | 5,570,000 | 5,395,720 | |||||||||||||
|
| ||||||||||||||
Total Convertible Obligations (Cost $26,809,078) | 25,933,303 | ||||||||||||||
|
| ||||||||||||||
FOREIGN CORPORATE OBLIGATIONS - 36.07% | |||||||||||||||
Basic Materials - 1.67% | |||||||||||||||
Kissner Holdings LP / Kissner Milling Co., Ltd. / BSC Holding, Inc. / Kissner USA, 8.375%, Due 12/1/2022E | 18,820,000 | 19,619,850 | |||||||||||||
|
|
See accompanying notes
9
American Beacon SiM High Yield Opportunities FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount* | Fair Value | ||||||||||||||
FOREIGN CORPORATE OBLIGATIONS - 36.07% (continued) | |||||||||||||||
Consumer, Cyclical - 5.85% | |||||||||||||||
Codere Finance 2 Luxembourg S.A., 7.625%, Due 11/1/2021E | $ | 6,095,000 | $ | 5,739,052 | |||||||||||
Gol Finance, Inc., 7.000%, Due 1/31/2025E | 11,935,000 | 11,442,681 | |||||||||||||
Ladbrokes Group Finance PLC, 5.125%, Due 9/8/2023F | GBP | 12,800,000 | 17,483,233 | ||||||||||||
Servicios Corporativos Javer S.A.B. de C.V., 9.875%, Due 4/6/2021E | 7,673,000 | 7,471,967 | |||||||||||||
Stars Group Holdings B.V. / Stars Group USCo-Borrower LLC, 7.000%, Due 7/15/2026E | 13,130,000 | 13,425,425 | |||||||||||||
Viking Cruises Ltd., 5.875%, Due 9/15/2027E | 13,600,000 | 13,107,000 | |||||||||||||
|
| ||||||||||||||
68,669,358 | |||||||||||||||
|
| ||||||||||||||
Consumer,Non-Cyclical - 8.51% | |||||||||||||||
Clearwater Seafoods, Inc., 6.875%, Due 5/1/2025E | 15,885,000 | 15,448,162 | |||||||||||||
IHS Markit Ltd., 5.000%, Due 11/1/2022E | 14,819,000 | 15,284,317 | |||||||||||||
JBS USA LUX S.A. / JBS USA Finance, Inc., 5.875%, Due 7/15/2024E | 20,840,000 | 21,423,520 | |||||||||||||
Minerva Luxembourg S.A., 6.500%, Due 9/20/2026E | 14,625,000 | 14,167,969 | |||||||||||||
Nova Austral S.A., 8.250%, Due 5/26/2021E F | 17,400,000 | 16,530,000 | |||||||||||||
Nueva Pescanova, S.L., | |||||||||||||||
3.000%, Due 5/23/2024, Tranche AA | EUR | 430,439 | 372,098 | ||||||||||||
1.000%, Due 5/23/2029, PIK(in-kind rate 1.000%) Tranche BA G | EUR | 630,378 | 272,469 | ||||||||||||
1.000%, Due 5/23/2034, PIK(in-kind rate 1.000%) Tranche CA G | EUR | 5,141,700 | 701,811 | ||||||||||||
Ritchie Bros Auctioneers, Inc., 5.375%, Due 1/15/2025E | 15,345,000 | 15,613,537 | |||||||||||||
|
| ||||||||||||||
99,813,883 | |||||||||||||||
|
| ||||||||||||||
Energy - 7.92% | |||||||||||||||
Athabasca Oil Corp., 9.875%, Due 2/24/2022E | 20,222,000 | 19,564,785 | |||||||||||||
Baytex Energy Corp., | |||||||||||||||
5.125%, Due 6/1/2021E | 6,649,000 | 6,549,265 | |||||||||||||
5.625%, Due 6/1/2024E | 18,160,000 | 16,298,600 | |||||||||||||
CES Energy Solutions Corp., 6.375%, Due 10/21/2024E | CAD | 20,167,000 | 14,520,485 | ||||||||||||
MEG Energy Corp., 7.000%, Due 3/31/2024E | 23,115,000 | 21,150,225 | |||||||||||||
OKEA AS., 9.322%, Due 6/28/2023,(3-mo. LIBOR + 6.50)F H | 14,600,000 | 14,892,000 | |||||||||||||
|
| ||||||||||||||
92,975,360 | |||||||||||||||
|
| ||||||||||||||
Financial - 1.32% | |||||||||||||||
Cooke Omega Investments, Inc. / Alpha VesselCo Holdings, Inc., 8.500%, Due 12/15/2022E | 15,695,000 | 15,459,575 | |||||||||||||
|
| ||||||||||||||
Industrial - 9.41% | |||||||||||||||
ATS Automation Tooling Systems, Inc., 6.500%, Due 6/15/2023E | 16,094,000 | 16,621,883 | |||||||||||||
Borealis Finance LLC, 7.500%, Due 11/16/2022E | 12,860,000 | 12,415,044 | |||||||||||||
Diana Shipping, Inc., 9.500%, Due 9/27/2023 | 8,550,000 | 8,208,000 | |||||||||||||
Eagle Bulk Shipco LLC, 8.250%, Due 11/28/2022 | 16,005,179 | 15,845,127 | |||||||||||||
MPC Container Ships Invest B.V., 7.574%, Due 9/22/2022,(3-mo. LIBOR + 4.75)F H | 16,000,000 | 16,040,000 | |||||||||||||
Navios Maritime Acquisition Corp. / Navios Acquisition Finance US, Inc., 8.125%, Due 11/15/2021E | 19,625,000 | 14,228,125 | |||||||||||||
Navios Maritime Holdings, Inc. / Navios Maritime Finance II US, Inc., 11.250%, Due 8/15/2022E | 20,345,000 | 12,919,075 | |||||||||||||
Scorpio Tankers, Inc., 3.000%, Due 5/15/2022 | 16,886,000 | 14,160,904 | |||||||||||||
|
| ||||||||||||||
110,438,158 | |||||||||||||||
|
| ||||||||||||||
Utilities - 1.39% | |||||||||||||||
Stoneway Capital Corp., 10.000%, Due 3/1/2027E | 16,453,760 | 16,350,925 | |||||||||||||
|
| ||||||||||||||
Total Foreign Corporate Obligations (Cost $433,474,870) | 423,327,109 | ||||||||||||||
|
| ||||||||||||||
FOREIGN SOVEREIGN OBLIGATIONS - 2.50% | |||||||||||||||
Hellenic Republic Government Bond, 3.000%, Due 2/24/2023, Series PSIF G I | EUR | 18,685,000 | 21,940,316 | ||||||||||||
Mexican Bonos, 6.500%, Due 6/10/2021, Series M | MXN | 147,500,000 | 7,404,911 | ||||||||||||
|
| ||||||||||||||
Total Foreign Sovereign Obligations (Cost $26,930,133) | 29,345,227 | ||||||||||||||
|
|
See accompanying notes
10
American Beacon SiM High Yield Opportunities FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
EXCHANGE-TRADED INSTRUMENTS - 1.37% (Cost $15,889,835) | |||||||||||||||
Exchange-Traded Funds - 1.37% | |||||||||||||||
SPDR Bloomberg Barclays High Yield Bond ETF | 450,000 | $ | 16,060,500 | ||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 0.87% (Cost $10,195,294) | |||||||||||||||
Investment Companies - 0.87% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 2.33%J K | 10,195,294 | 10,195,294 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 98.73% (Cost $1,185,980,291) | 1,158,751,690 | ||||||||||||||
OTHER ASSETS, NET OF LIABILITIES - 1.27% | 14,883,537 | ||||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 1,173,635,227 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. *In U.S. Dollars unless otherwise noted. |
A Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $1,860,165 or 0.16% of net assets.
BNon-income producing security.
C Bank loan obligations, unless otherwise stated, carry a floating rate of interest. The coupon rate shown on floating or adjustable rate securities represents the rate at period end.
D Fixed Rate.
E Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $771,815,047 or 65.76% of net assets. The Fund has no right to demand registration of these securities.
F Reg S - Security purchased under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.
G 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.
H 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 asT-bills, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on February 28, 2019.
I Step Up/Down - A zero coupon bond that converts to a fixed rate or variable interest rate at a designated future date. The rate disclosed represents the coupon rate at February 28, 2019. The maturity date disclosed represents the final maturity date.
J The Fund is affiliated by having the same investment advisor.
K7-day yield.
ETF - Exchange-Traded Fund.
LIBOR - London Interbank Offer Rate.
LLC - Limited Liability Company.
LP - Limited Partnership.
PIK - Payment in Kind.
PLC - Public Limited Company.
SPDR - Standard & Poor’s depositary receipt.
Short Futures Contracts Open on February 28, 2019: |
| |||||||||||||||
Currency Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
British Pound Currency Futures | 215 | March 2019 | $ | (17,068,663 | ) | $ | (17,842,313 | ) | $ | (773,650 | ) | |||||
Canadian Dollar Currency Futures | 196 | March 2019 | (14,744,916 | ) | (14,921,480 | ) | (176,564 | ) | ||||||||
Euro Currency Futures | 167 | March 2019 | (23,872,339 | ) | (23,783,931 | ) | 88,408 | |||||||||
|
|
|
|
|
| |||||||||||
$ | (55,685,918 | ) | $ | (56,547,724 | ) | $ | (861,806 | ) | ||||||||
|
|
|
|
|
|
See accompanying notes
11
American Beacon SiM High Yield Opportunities FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Glossary: | ||
Currency Abbreviations: | ||
CAD | Canadian Dollar | |
EUR | Euro | |
GBP | Pound Sterling | |
MXN | Mexican Peso |
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of February 28, 2019, the investments were classified as described below:
SiM High Yield Opportunities Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets |
| |||||||||||||||||||||||||||
Common Stocks | $ | 10,661,020 | $ | - | $ | 513,787 | $ | 11,174,807 | ||||||||||||||||||||
Bank Loan Obligations | - | 11,507,250 | - | 11,507,250 | ||||||||||||||||||||||||
Corporate Obligations | - | 631,208,200 | - | 631,208,200 | ||||||||||||||||||||||||
Convertible Obligations | - | 25,933,303 | - | 25,933,303 | ||||||||||||||||||||||||
Foreign Corporate Obligations | - | 421,980,731 | 1,346,378 | 423,327,109 | ||||||||||||||||||||||||
Foreign Sovereign Obligations | - | 29,345,227 | - | 29,345,227 | ||||||||||||||||||||||||
Exchange-Traded Instruments | 16,060,500 | - | - | 16,060,500 | ||||||||||||||||||||||||
Short-Term Investments | 10,195,294 | - | - | 10,195,294 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 36,916,814 | $ | 1,119,974,711 | $ | 1,860,165 | $ | 1,158,751,690 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||||||
Futures Contracts | $ | 88,408 | $ | - | $ | - | $ | 88,408 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 88,408 | $ | - | $ | - | $ | 88,408 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||||||
Futures Contracts | $ | (950,214 | ) | $ | - | $ | - | $ | (950,214 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Liabilities | $ | (950,214 | ) | $ | - | $ | - | $ | (950,214 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the period ended February 28, 2019, there were no transfers into or out of Level 3.
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 8/31/2018 | 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 2/28/2019 | Unrealized Appreciation (Depreciation) at Period end** | ||||||||||||||||||||||||||||||
Common Stocks | $ | 454,404 | $ | - | $ | - | $ | - | $ | - | $ | 59,383 | $ | - | $ | - | $ | 513,787 | $ | 352,462 | ||||||||||||||||||||
Foreign Corporate Obligations | 1,593,515 | 5,976 | - | 41,806 | - | (294,919 | ) | - | - | 1,346,378 | (340,444 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 2,047,919 | $ | 5,976 | $ | - | $ | 41,806 | $ | - | $ | (235,536 | ) | $ | - | $ | - | $ | 1,860,165 | $ | 12,018 | ||||||||||||||||||||
|
|
|
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|
|
|
|
|
|
|
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|
|
** | Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at period end. This balance is included in the change in unrealized appreciation (depreciation) on the Statements of Operations. |
The common stock and foreign corporate obligations were received from a bankruptcy restructuring. They were fair valued based on single broker quotes, therefore, classified as Level 3 securities due to the use of significant unobservable inputs. The use of single broker quotes for valuation was a change from the prior period. The valuation methods were changed to better reflect fair values for these securities. The valuation method for the common stock was changed from private quotes to quotes from a single broker. The valuation method for the foreign corporate obligations was changed from enterprise value derived from discounted cash flow analysis to single broker quotes.
See accompanying notes
12
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 0.01% | |||||||||||||||
Consumer Discretionary - 0.01% | |||||||||||||||
Diversified Consumer Services - 0.01% | |||||||||||||||
Tweddle Group, Inc.A | 2,722 | $ | 183,735 | ||||||||||||
|
| ||||||||||||||
Financials - 0.00% | |||||||||||||||
Diversified Financial Services - 0.00% | |||||||||||||||
RCS 2L EscrowA B | 667 | - | |||||||||||||
|
| ||||||||||||||
Information Technology - 0.00% | |||||||||||||||
Internet Software & Services - 0.00% | |||||||||||||||
Answers Corp. | 23 | 27 | |||||||||||||
Answers Holdings, Inc. | 4,206 | 4,908 | |||||||||||||
|
| ||||||||||||||
4,935 | |||||||||||||||
|
| ||||||||||||||
Total Information Technology | 4,935 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $208,607) | 188,670 | ||||||||||||||
|
| ||||||||||||||
WARRANTS - 0.00% (Cost $0) | |||||||||||||||
Materials - 0.00% | |||||||||||||||
Euramax Holdings, Inc.A B | 20 | - | |||||||||||||
|
| ||||||||||||||
Principal Amount | |||||||||||||||
BANK LOAN OBLIGATIONSC - 87.99% | |||||||||||||||
Basic Materials - 5.13% | |||||||||||||||
4L Technologies, Inc., 6.993%, Due 5/8/2020, 1st Lien Term Loan,(3-mo. LIBOR + 4.500%) | $ | 10,302,493 | 10,135,077 | ||||||||||||
Archroma Finance S.a.r.l., 6.738%, Due 8/11/2024, USD 2017 Term Loan B2,(3-mo. LIBOR + 4.000%) | 1,978,950 | 1,960,803 | |||||||||||||
Atkore International, Inc., 5.560%, Due 12/22/2023, 2016 1st Lien Term Loan,(3-mo. LIBOR + 2.750%) | 4,848,370 | 4,803,910 | |||||||||||||
Concrete Pumping Holdings, Inc., 8.811%, Due 12/8/2025, Term Loan,(3-mo. LIBOR + 6.000%) | 880,000 | 849,200 | |||||||||||||
Cyanco Intermediate Corp., 5.993%, Due 3/16/2025, 2018 Term Loan B,(1-mo. LIBOR + 3.500%) | 8,568,253 | 8,475,458 | |||||||||||||
Distribution International, Inc., 7.810%, Due 12/15/2021, New Term Loan,(3-mo. LIBOR + 5.000%) | 1,090,639 | 981,575 | |||||||||||||
DuBois Chemicals, Inc., 5.743%, Due 3/15/2024, 2017 1st Lien Term Loan B,(1-mo. LIBOR + 3.250%) | 2,986,471 | 2,934,208 | |||||||||||||
Forterra Finance LLC, 5.493%, Due 10/25/2023, 2017 Term Loan B,(1-mo. LIBOR + 3.000%) | 4,907,348 | 4,555,049 | |||||||||||||
Messer Industries LLC, Due 10/1/2025, 2018 USD Term LoanD | 9,028,000 | 8,960,290 | |||||||||||||
New Arclin U.S. Holding Corp., | |||||||||||||||
5.993%, Due 2/14/2024, 2018 Term Loan,(1-mo. LIBOR + 3.500%) | 5,819,923 | 5,754,449 | |||||||||||||
11.243%, Due 2/14/2025, 2nd Lien Term Loan,(1-mo. LIBOR + 8.750%) | 2,720,000 | 2,692,800 | |||||||||||||
OCI Beaumont LLC, 6.803%, Due 2/14/2025, 2018 Term Loan,(3-mo. LIBOR + 4.000%) | 5,481,047 | 5,467,344 | |||||||||||||
Phoenix Services International LLC, 6.267%, Due 3/1/2025, Term Loan,(1-mo. LIBOR + 3.750%) | 7,940,000 | 7,865,602 | |||||||||||||
Polymer Additives, Inc., 8.493%, Due 7/31/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 6.000%) | 7,336,000 | 6,602,400 | |||||||||||||
Starfruit Finco B.V, 5.764%, Due 10/1/2025, 2018 USD Term Loan B,(3-mo. LIBOR + 3.250%) | 5,357,000 | 5,320,198 | |||||||||||||
Tensar Corp., 7.553%, Due 7/9/2021, Term Loan,(3-mo. LIBOR + 4.750%) | 705,082 | 654,549 | |||||||||||||
Vantage Specialty Chemicals, Inc., | |||||||||||||||
6.129%, Due 10/28/2024, 2017 1st Lien Term Loan,(3-mo. LIBOR + 3.500%) | 6,204,864 | 6,122,153 | |||||||||||||
10.884%, Due 10/27/2025, 2017 2nd Lien Term Loan,(3-mo. LIBOR + 8.250%) | 5,146,000 | 5,010,918 | |||||||||||||
Vectra Co., 9.743%, Due 3/8/2026, 2nd Lien Term Loan,(1-mo. LIBOR + 7.250%) | 2,397,000 | 2,301,120 | |||||||||||||
Zep, Inc., 6.803%, Due 8/12/2024, 2017 1st Lien Term Loan,(3-mo. LIBOR + 4.000%) | 4,170,862 | 3,614,761 | |||||||||||||
|
| ||||||||||||||
95,061,864 | |||||||||||||||
|
|
See accompanying notes
13
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
BANK LOAN OBLIGATIONSC - 87.99% (continued) | |||||||||||||||
Consumer - 14.63% | |||||||||||||||
ABG Intermediate Holdings LLC, 5.993%, Due 9/26/2024, 2017 1st LienAdd-On Term Loan,(1-mo. LIBOR + 3.500%) | $ | 15,078,202 | $ | 14,842,831 | |||||||||||
Alphabet Holding Co., Inc., 5.993%, Due 9/26/2024, 2017 1st Lien Term Loan,(1-mo. LIBOR + 3.500%) | 2,115,889 | 2,016,442 | |||||||||||||
American Bath Group LLC, 12.553%, Due 9/27/2024, 2016 2nd Lien Term Loan,(3-mo. LIBOR + 9.750%) | 537,000 | 534,315 | |||||||||||||
AP NMT Acquisition BV, 8.547%, Due 8/13/2021, USD 1st Lien Term Loan,(3-mo. LIBOR + 5.750%) | 4,814,179 | 4,769,070 | |||||||||||||
APX Group, Inc., | |||||||||||||||
7.493%, Due 4/1/2024, 2018 Term Loan B,(2-mo. LIBOR + 4.00%) | 5,664,941 | 5,568,184 | |||||||||||||
9.500%, Due 4/1/2024, 2018 Term Loan B,(3-mo. PRIME + 5.00%) | 6,844 | 6,727 | |||||||||||||
ASP Unifrax Holdings, Inc., | |||||||||||||||
6.528%, Due 12/12/2025, Term Loan B,(3-mo. LIBOR + 3.750%) | 5,993,000 | 5,704,617 | |||||||||||||
11.278%, Due 12/14/2026, 2nd Lien Term Loan,(3-mo. LIBOR + 8.500%) | 5,982,000 | 5,503,440 | |||||||||||||
Belfor Holdings, Inc., Due 2/14/2026, Term Loan BD | 1,554,000 | 1,565,655 | |||||||||||||
Bulldog Purchaser, Inc., | |||||||||||||||
3.750%, Due 8/22/2025, 2018 Delayed Draw Term Loan,(3-mo. LIBOR + 3.750%)E | 238,819 | 234,492 | |||||||||||||
6.243%, Due 8/22/2025, 2018 Term Loan,(1-mo. LIBOR + 3.750%) | 10,005,106 | 9,817,510 | |||||||||||||
7.750%, Due 8/21/2026, 2018 2nd Lien Delayed Draw Term LoanE F | 219,868 | 216,845 | |||||||||||||
10.243%, Due 9/4/2026, 2018 2nd Lien Term Loan,(3-mo. LIBOR + 7.750%) | 1,451,132 | 1,431,179 | |||||||||||||
Cast and Crew Payroll LLC, 6.500%, Due 2/9/2026, 2019 1st Lien Term Loan,(1-mo. LIBOR + 4.000%) | 3,500,000 | 3,512,250 | |||||||||||||
Comet Acquisition, Inc., 6.277%, Due 10/24/2025, Term Loan,(3-mo. LIBOR + 3.500%) | 2,000,000 | 1,970,000 | |||||||||||||
Corsair Components, Inc., 7.053%, Due 9/6/2024, 2017 1st Lien Term Loan B,(3-mo. LIBOR + 4.250%) | 1,572,118 | 1,556,397 | |||||||||||||
Crown Finance US, Inc., 4.993%, Due 2/28/2025, 2018 USD Term Loan,(1-mo. LIBOR + 2.500%) | 3,357,237 | 3,332,763 | |||||||||||||
Del Frisco’s Restaurant Group, Inc., 8.500%, Due 6/27/2025, 2018 Incremental Term Loan,(1-mo. LIBOR + 6.000%) | 7,838,610 | 7,603,452 | |||||||||||||
Dhanani Group, Inc., 6.243%, Due 7/20/2025, 2018 Term Loan B,(1-mo. LIBOR + 3.750%) | 5,900,338 | 5,808,174 | |||||||||||||
DHX Media Ltd., 6.243%, Due 12/29/2023, Term Loan B,(1-mo. LIBOR + 3.750%) | 6,972,960 | 6,720,190 | |||||||||||||
Financial & Risk US Holdings, Inc., 6.243%, Due 10/1/2025, 2018 USD Term Loan,(1-mo. LIBOR + 3.750%) | 8,985,000 | 8,842,228 | |||||||||||||
Fogo de Chao Churrascaria Holdings LLC, 6.743%, Due 4/5/2025, 2018 Add On Term Loan,(1-mo. LIBOR + 4.250%) | 4,117,593 | 4,117,593 | |||||||||||||
G-III Apparel Group Ltd., 7.750%, Due 12/1/2022, Term Loan B,(1-mo. LIBOR + 5.250%) | 1,304,571 | 1,307,833 | |||||||||||||
Give & Go Prepared Foods Corp., 7.053%, Due 7/29/2023, 2017 1st LienAdd-On Term Loan,(3-mo. LIBOR + 4.250%) | 9,603,212 | 8,846,959 | |||||||||||||
Global Eagle Entertainment, Inc., 10.349%, Due 1/6/2023, 1st Lien Term Loan,(6-mo. LIBOR + 7.500%) | 16,068,031 | 16,148,371 | |||||||||||||
GOBP Holdings, Inc., | |||||||||||||||
6.553%, Due 10/18/2025, 1st Lien Term Loan,(3-mo. LIBOR + 3.750%) | 3,385,000 | 3,359,613 | |||||||||||||
10.053%, Due 10/22/2026, 2nd Lien Term Loan,(2-mo. LIBOR + 7.250%) | 2,647,000 | 2,594,060 | |||||||||||||
Hearthside Food Solutions LLC, 6.181%, Due 5/23/2025, 2018 Term Loan B,(1-mo. LIBOR + 3.688%) | 4,672,665 | 4,604,911 | |||||||||||||
Holley Purchaser, Inc., 7.744%, Due 10/24/2025, Term Loan B,(3-mo. LIBOR + 5.000%) | 2,000,000 | 1,960,000 | |||||||||||||
International Textile Group, Inc., | |||||||||||||||
7.509%, Due 5/1/2024, 1st Lien Term Loan,(1-mo. LIBOR + 5.000%) | 3,469,088 | 3,391,033 | |||||||||||||
11.509%, Due 5/1/2025, 2nd Lien Term Loan,(1-mo. LIBOR + 9.000%) | 4,347,000 | 4,064,445 | |||||||||||||
Intrawest Resorts Holdings, Inc., 5.493%, Due 7/31/2024, Term Loan B1,(1-mo. LIBOR + 3.000%) | 4,310,835 | 4,292,859 | |||||||||||||
Laureate Education, Inc., 8.000%, Due 4/26/2024, 2017 Term Loan B,(1-mo. LIBOR + 3.500%) | 4,693,361 | 4,695,145 | |||||||||||||
Leslie’s Poolmart, Inc., 6.079%, Due 8/16/2023, 2016 Term Loan,(2-mo. LIBOR + 3.500%) | 8,724,555 | 8,475,294 | |||||||||||||
Lifetime Brands, Inc., 5.993%, Due 2/28/2025, Term Loan B,(1-mo. LIBOR + 3.500%) | 4,625,349 | 4,555,969 | |||||||||||||
Mavis Tire Express Services Corp., | |||||||||||||||
5.740%, Due 3/20/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.250%) | 3,223,244 | 3,182,953 | |||||||||||||
5.740%, Due 3/20/2025, 2018 Delayed Draw Term Loan,(1-mo. LIBOR + 3.250%)E | 425,682 | 420,361 | |||||||||||||
Mohegan Tribal Gaming Authority, 6.493%, Due 10/13/2023, 2016 Term Loan B,(1-mo. LIBOR + 4.000%) | 9,691,992 | 9,263,896 | |||||||||||||
NPC International, Inc., 5.993%, Due 4/19/2024, 1st Lien Term Loan,(2-mo. LIBOR + 3.500%) | 6,868,405 | 6,442,564 |
See accompanying notes
14
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
BANK LOAN OBLIGATIONSC - 87.99% (continued) | |||||||||||||||
Consumer - 14.63% (continued) | |||||||||||||||
P.F. Chang’s China Bistro, Inc., Due 2/7/2026, 2019 Term Loan BD | $ | 4,500,000 | $ | 4,462,515 | |||||||||||
Polyconcept Investments B.V., 6.243%, Due 8/16/2023, USD 2016 Term Loan B,(1-mo. LIBOR + 3.750%) | 2,722,589 | 2,722,589 | |||||||||||||
ProQuest LLC, 5.743%, Due 10/24/2021, New Term Loan B,(1-mo. LIBOR + 3.250%) | 5,129,065 | 5,107,677 | |||||||||||||
PS HoldCo LLC, 7.243%, Due 3/1/2025, Term Loan,(1-mo. LIBOR + 4.750%) | 4,488,750 | 4,466,306 | |||||||||||||
PSC Industrial Holdings Corp., 10.989%, Due 10/3/2025, 2017 2nd Lien Term Loan,(1-mo. LIBOR + 8.500%) | 3,025,000 | 2,873,750 | |||||||||||||
PT Intermediate Holdings III LLC, 6.803%, Due 12/7/2024, 1st Lien Term Loan B,(3-mo. LIBOR + 4.000%) | 4,994,550 | 4,919,632 | |||||||||||||
Pure Fishing, Inc., 7.322%, Due 11/30/2025, Term Loan,(1-mo. LIBOR + 4.500%) | 3,000,000 | 2,955,000 | |||||||||||||
Q Holding Co., 7.493%, Due 12/16/2021, Term Loan B,(1-mo. LIBOR + 5.000%) | 6,153,109 | 6,153,109 | |||||||||||||
Recess Holdings, Inc., 10.553%, Due 9/29/2025, 2017 2nd Lien Term Loan,(1-mo. LIBOR + 7.750%) | 2,367,000 | 2,260,485 | |||||||||||||
Staples, Inc., 6.509%, Due 9/12/2024, 2017 Term Loan B,(1-mo. LIBOR + 4.000%) | 2,487,838 | 2,468,233 | |||||||||||||
Stratose Intermediate Holdings II LLC, 5.743%, Due 6/22/2023, 1st Lien Term Loan,(1-mo. LIBOR + 3.250%) | 2,343,489 | 2,323,968 | |||||||||||||
TGP Holdings III LLC, | |||||||||||||||
7.053%, Due 9/25/2024, 2018 1st Lien Term Loan,(3-mo. LIBOR + 4.250%) | 7,842,438 | 7,450,316 | |||||||||||||
11.303%, Due 9/25/2025, 2nd Lien Term Loan,(3-mo. LIBOR + 8.500%) | 3,473,000 | 3,334,080 | |||||||||||||
TopGolf International, Inc., 8.020%, Due 2/9/2026, Term Loan B,(3-mo. LIBOR + 5.500%) | 4,000,000 | 3,995,000 | |||||||||||||
TouchTunes Interactive Networks, Inc., | |||||||||||||||
7.243%, Due 5/28/2021, Incremental Term Loan,(1-mo. LIBOR + 4.750%)J | 1,473,283 | 1,469,599 | |||||||||||||
7.243%, Due 5/29/2021, 1st Lien Term Loan,(1-mo. LIBOR + 4.750%) | 881,521 | 879,318 | |||||||||||||
United Natural Foods, Inc., 6.743%, Due 10/22/2025, Term Loan B,(3-mo. LIBOR + 4.250%) | 20,000,000 | 17,680,000 | |||||||||||||
USS Ultimate Holdings, Inc., 6.243%, Due 8/25/2024, 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 4,700,249 | 4,688,498 | |||||||||||||
Wand NewCo 3, Inc., 6.014%, Due 2/5/2026, 2019 1st Lien Term Loan,(3-mo. LIBOR + 3.500%) | 3,611,000 | 3,619,125 | |||||||||||||
Winnebago Industries, Inc., 6.017%, Due 11/8/2023, 2017 Term Loan,(1-mo. LIBOR + 3.500%) | 4,260,533 | 4,185,974 | |||||||||||||
|
| ||||||||||||||
271,295,794 | |||||||||||||||
|
| ||||||||||||||
Defense - 0.72% | |||||||||||||||
Maxar Technologies Ltd., 5.250%, Due 10/4/2024, Term Loan B,(3-mo. LIBOR + 2.750%) | 10,432,000 | 8,925,932 | |||||||||||||
MB Aerospace Holdings, Inc., 5.993%, Due 1/22/2025, 2017 Term Loan,(1-mo. LIBOR + 3.500%) | 4,478,760 | 4,371,763 | |||||||||||||
|
| ||||||||||||||
13,297,695 | |||||||||||||||
|
| ||||||||||||||
Energy - 2.51% | |||||||||||||||
BCP Renaissance Parent LLC, 6.244%, Due 10/31/2024, 2017 Term Loan B,(3-mo. LIBOR + 3.500%) | 2,666,600 | 2,666,040 | |||||||||||||
California Resources Corp., 7.243%, Due 12/31/2022, 2017 1st Lien Term Loan,(1-mo. LIBOR + 4.750%) | 6,507,000 | 6,398,528 | |||||||||||||
EG Finco Ltd., 10.813%, Due 4/20/2026, 2018 USD 2nd Lien Term Loan,(1-mo. LIBOR + 8.000%) | 8,986,000 | 8,693,955 | |||||||||||||
EG Finco Ltd., 6.813%, Due 2/7/2025, 2018 USD Term Loan,(3-mo. LIBOR + 4.000%) | 8,439,212 | 8,212,450 | |||||||||||||
EG Group Ltd., 6.813%, Due 2/7/2025, 2018 USD Term Loan B,(3-mo. LIBOR + 4.000%) | 1,191,000 | 1,158,998 | |||||||||||||
McDermott Technology Americas, Inc., 7.493%, Due 5/10/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 5.000%) | 4,595,287 | 4,414,601 | |||||||||||||
Natgasoline LLC, 6.250%, Due 11/14/2025, Term Loan B,(3-mo. LIBOR + 3.500%) | 7,473,000 | 7,473,000 | |||||||||||||
Navios Maritime Midstream Partners LP, 7.300%, Due 6/18/2020, Term Loan B,(3-mo. LIBOR + 4.500%) | 73,340 | 67,473 | |||||||||||||
Southcross Energy Partners LP, 7.053%, Due 8/4/2021, 1st Lien Term Loan,(3-mo. LIBOR + 4.250%) | 7,462,343 | 6,704,915 | |||||||||||||
Traverse Midstream Partners LLC, 6.600%, Due 9/27/2024, 2017 Term Loan,(6-mo. LIBOR + 4.000%) | 801,990 | 801,236 | |||||||||||||
|
| ||||||||||||||
46,591,196 | |||||||||||||||
|
|
See accompanying notes
15
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
BANK LOAN OBLIGATIONSC - 87.99% (continued) | |||||||||||||||
Financial - 8.39% | |||||||||||||||
AIS Holdco LLC, 7.803%, Due 8/15/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 5.000%) | $ | 2,508,225 | $ | 2,445,519 | |||||||||||
AmeriLife Group LLC, 7.243%, Due 6/18/2022, 1st Lien Term Loan,(1-mo. LIBOR + 4.750%) | 1,443,748 | 1,429,311 | |||||||||||||
Aretec Group, Inc., 6.743%, Due 10/1/2025, 2018 Term Loan,(3-mo. LIBOR + 4.250%) | 6,870,546 | 6,784,664 | |||||||||||||
Asurion LLC, 5.493%, Due 11/3/2024, 2018 Term Loan B7,(1-mo. LIBOR + 3.000%) | 6,841,273 | 6,837,032 | |||||||||||||
Brookfield Property REIT, Inc., 4.993%, Due 8/27/2025, 1st Lien Term Loan B,(1-mo. LIBOR + 2.500%) | 2,982,500 | 2,907,102 | |||||||||||||
Citco Funding LLC, 4.993%, Due 9/28/2023, 2017 Term Loan,(1-mo. LIBOR + 2.500%) | 6,448,359 | 6,379,878 | |||||||||||||
Confie Seguros Holding II Co., | |||||||||||||||
7.379%, Due 4/19/2022, 2016 Term Loan B,(3-mo. LIBOR + 4.750%) | 12,443,165 | 12,399,614 | |||||||||||||
11.238%, Due 10/31/2025, 2018 2nd Lien Term Loan,(3-mo. LIBOR + 8.500%) | 6,676,000 | 6,525,790 | |||||||||||||
DTZ U.S. Borrower LLC, 5.743%, Due 8/21/2025, 2018 Add On Term Loan B,(1-mo. LIBOR + 3.250%) | 5,840,515 | 5,791,221 | |||||||||||||
Edelman Financial Center LLC, 6.037%, Due 7/21/2025, 2018 1st Lien Term Loan,(3-mo. LIBOR + 3.250%) | 11,657,000 | 11,632,753 | |||||||||||||
Forest City Enterprises LP, 6.512%, Due 12/7/2025, Term Loan B,(1-mo. LIBOR + 4.000%) | 4,000,000 | 4,015,000 | |||||||||||||
Guggenheim Partners LLC, 5.243%, Due 7/21/2023, 2016 Term Loan,(1-mo. LIBOR + 2.750%) | 7,516,637 | 7,514,758 | |||||||||||||
Higginbotham Insurance Agency, Inc., 6.243%, Due 12/19/2024, 2017 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 6,263,730 | 6,075,818 | |||||||||||||
Hudson River Trading LLC, 5.993%, Due 4/3/2025, 2018 Incremental Term Loan,(1-mo. LIBOR + 3.500%) | 5,279,174 | 5,252,778 | |||||||||||||
Jane Street Group LLC, 5.493%, Due 8/25/2022, 2018 Term Loan B,(1-mo. LIBOR + 3.000%) | 8,007,993 | 7,997,983 | |||||||||||||
Kestra Financial, Inc., 6.879%, Due 6/15/2022, Term Loan,(3-mo. LIBOR + 4.250%) | 2,927,441 | 2,920,123 | |||||||||||||
Lightstone Generation LLC, | |||||||||||||||
6.243%, Due 1/30/2024, 2018 Term Loan B,(1-mo. LIBOR + 3.750%) | 4,279,309 | 4,181,826 | |||||||||||||
6.243%, Due 1/30/2024, 2018 Term Loan C,(1-mo. LIBOR + 3.750%) | 235,921 | 230,547 | |||||||||||||
Mayfield Agency Borrower, Inc., | |||||||||||||||
6.493%, Due 2/28/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 4.000%) | 9,910,992 | 9,663,218 | |||||||||||||
10.993%, Due 3/2/2026, 2018 2nd Lien Term Loan,(1-mo. LIBOR + 8.500%) | 6,119,000 | 5,966,025 | |||||||||||||
Millennium Trust Co. LLC, Due 2/26/2026, Term Loan BD | 7,072,000 | 7,001,280 | |||||||||||||
PSAV Holdings LLC, 9.986%, Due 9/1/2025, 2018 2nd Lien Term Loan,(3-mo. LIBOR + 7.250%) | 4,364,000 | 4,069,430 | |||||||||||||
St. Georges University, 5.993%, Due 6/21/2025, 2018 1st Lien Term Loan B,(1-mo. LIBOR + 3.500%) | 9,744,327 | 9,719,966 | |||||||||||||
StepStone Group LP, 6.493%, Due 3/14/2025, Term Loan B,(1-mo. LIBOR + 4.000%) | 2,833,588 | 2,819,420 | |||||||||||||
Stiphout Finance LLC, 5.493%, Due 10/26/2022, USD 1st Lien Term Loan,(1-mo. LIBOR + 3.000%) | 4,949,045 | 4,819,132 | |||||||||||||
VFH Parent LLC, Due 1/30/2026, 2019 Term Loan BD | 10,200,000 | 10,222,338 | |||||||||||||
|
| ||||||||||||||
155,602,526 | |||||||||||||||
|
| ||||||||||||||
Health Care - 6.54% | |||||||||||||||
21st Century Oncology Holdings, Inc., 8.905%, Due 1/16/2023, Exit Term Loan,(1-mo. LIBOR + 6.125%) | 4,263,733 | 3,538,898 | |||||||||||||
ABB Concise Optical Group LLC, 7.517%, Due 6/15/2023, 2016 Term Loan B,(1-mo. LIBOR + 5.000%) | 241,222 | 233,684 | |||||||||||||
Air Methods Corp., 6.303%, Due 4/21/2024, 2017 Term Loan B,(1-mo. LIBOR + 3.500%) | 9,273,000 | 7,499,539 | |||||||||||||
Amneal Pharmaceuticals LLC, 6.000%, Due 5/4/2025, 2018 Term Loan B,(1-mo. LIBOR + 3.500%) | 4,976,212 | 4,969,992 | |||||||||||||
Brightspring Health Services, | |||||||||||||||
Due 2/8/2026, Term Loan BD | 11,086,167 | 10,977,633 | |||||||||||||
Due 2/12/2026, Delayed Draw Term LoanD | 1,007,833 | 997,967 | |||||||||||||
BW NHHC Holdco, Inc., 7.481%, Due 5/15/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 5.000%) | 1,622,845 | 1,575,506 | |||||||||||||
Civitas Solutions, Inc., | |||||||||||||||
Due 2/5/2026, Term Loan BD | 2,824,561 | 2,833,967 | |||||||||||||
Due 2/5/2026, Term Loan CD | 175,439 | 176,023 | |||||||||||||
FHC Health Systems, Inc., 6.493%, Due 12/23/2021, 2014 Term Loan,(1-mo. LIBOR + 4.000%) | 143,862 | 118,326 | |||||||||||||
Gentiva Health Services, Inc., 6.250%, Due 7/2/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 4,946,512 | 4,952,695 | |||||||||||||
Global Medical Response, Inc., 6.740%, Due 3/14/2025, 2017 Term Loan B2,(1-mo. LIBOR + 4.250%) | 7,818,438 | 7,580,601 |
See accompanying notes
16
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
BANK LOAN OBLIGATIONSC - 87.99% (continued) | |||||||||||||||
Health Care - 6.54% (continued) | |||||||||||||||
Innoviva, Inc., 7.141%, Due 8/11/2022, 2017 Term Loan B,(3-mo. LIBOR + 4.500%) | $ | 357,500 | $ | 357,500 | |||||||||||
Lifescan Global Corp., | |||||||||||||||
8.797%, Due 9/27/2024, 2018 1st Lien Term Loan,(3-mo. LIBOR + 6.000%) | 6,810,000 | 6,531,948 | |||||||||||||
12.297%, Due 9/26/2025, 2018 2nd Lien Term Loan,(3-mo. LIBOR + 9.500%) | 4,506,000 | 4,100,460 | |||||||||||||
Matrix Medical Network of Arizona LLC, 7.243%, Due 2/7/2025, 2018 Term Loan B,(1-mo. LIBOR + 4.750%) | 6,153,430 | 6,084,204 | |||||||||||||
MDVIP, Inc., 6.740%, Due 11/14/2024, 2017 Term Loan,(1-mo. LIBOR + 4.250%) | 2,277,990 | 2,255,210 | |||||||||||||
Onex TSG Holdings II Corp., 6.493%, Due 7/31/2022, 1st Lien Term Loan,(1-mo. LIBOR + 4.000%) | 8,525,617 | 8,440,361 | |||||||||||||
Premise Health Holding Corp., | |||||||||||||||
Due 7/10/2025, 2018 1st Lien Delayed Draw Term LoanE | 391,699 | 387,781 | |||||||||||||
6.553%, Due 7/10/2025, 2018 1st Lien Term Loan,(3-mo. LIBOR + 3.750%) | 4,923,262 | 4,874,030 | |||||||||||||
Quorum Health Corp., 9.243%, Due 4/29/2022, Term Loan B,(1-mo. LIBOR + 6.750%) | 1,861,607 | 1,864,511 | |||||||||||||
RegionalCare Hospital Partners Holdings, Inc., 6.981%, Due 11/16/2025, 2018 Term Loan B,(1-mo. LIBOR + 4.500%) | 9,605,000 | 9,588,960 | |||||||||||||
U.S. Renal Care, Inc., 7.053%, Due 12/30/2022, 2015 1st Lien Term Loan,(3-mo. LIBOR + 4.250%) | 4,879,424 | 4,870,690 | |||||||||||||
VVC Holding Corp., 7.197%, Due 2/11/2026, 2019 Term Loan B,(1-mo. LIBOR + 4.500%) | 21,461,000 | 21,326,869 | |||||||||||||
Wellpath Holdings, Inc., 7.993%, Due 9/20/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 5.500%) | 5,000,000 | 4,787,500 | |||||||||||||
YI LLC, 6.803%, Due 11/7/2024, 2017 1st Lien Term Loan,(3-mo. LIBOR + 4.000%) | 393,458 | 390,507 | |||||||||||||
|
| ||||||||||||||
121,315,362 | |||||||||||||||
|
| ||||||||||||||
Manufacturing - 11.70% | |||||||||||||||
Advanced Integration Technology LP, 7.243%, Due 4/3/2023, 2017 Term Loan B,(1-mo. LIBOR + 4.750%) | 5,231,267 | 5,165,876 | |||||||||||||
Airxcel, Inc., | |||||||||||||||
6.993%, Due 4/28/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 4.500%) | 9,338,075 | 8,847,826 | |||||||||||||
11.243%, Due 4/27/2026, 2018 2nd Lien Term Loan,(1-mo. LIBOR + 8.750%) | 5,353,000 | 4,844,465 | |||||||||||||
Aleris International, Inc., 7.243%, Due 2/27/2023, 2018 Term Loan,(1-mo. LIBOR + 4.750%) | 6,635,655 | 6,643,950 | |||||||||||||
American Bath Group LLC, 7.053%, Due 9/30/2023, 2018 Term Loan B,(3-mo. LIBOR + 4.250%) | 876,193 | 871,812 | |||||||||||||
ASG Technologies Group, Inc., 5.993%, Due 7/31/2024, 2018 Term Loan,(1-mo. LIBOR + 3.500%) | 8,311,478 | 8,176,417 | |||||||||||||
Associated Asphalt Partners LLC, 7.743%, Due 4/5/2024, 2017 Term Loan B,(1-mo. LIBOR + 5.250%) | 5,904,538 | 5,815,970 | |||||||||||||
Big Ass Fans LLC, 6.553%, Due 5/21/2024, 2018 Term Loan,(3-mo. LIBOR + 3.750%) | 7,804,551 | 7,785,039 | |||||||||||||
Bright Bidco B.V., 5.993%, Due 6/30/2024, 2018 Term Loan B,(1-mo. LIBOR + 3.500%) | 19,209,681 | 15,600,950 | |||||||||||||
Brookfield WEC Holdings, Inc., 6.243%, Due 8/1/2025, 2018 1st Lien Term Loan,(3-mo. LIBOR + 3.750%) | 3,024,000 | 3,026,843 | |||||||||||||
Chef’s Warehouse Leasing Co. LLC, 5.990%, Due 6/22/2022, 1st Lien Term Loan,(1-mo. LIBOR + 3.500%) | 606,696 | 602,904 | |||||||||||||
Commercial Vehicle Group, Inc., | |||||||||||||||
8.493%, Due 4/12/2023, Term Loan B,(1-mo. LIBOR + 6.000%) | 2,705,863 | 2,651,746 | |||||||||||||
10.500%, Due 4/12/2023, Term Loan B,(3-mo. PRIME + 5.00%) | 107,525 | 105,374 | |||||||||||||
Constellis Holdings LLC, | �� | ||||||||||||||
7.634%, Due 4/21/2024, 2017 1st Lien Term Loan,(1-mo. LIBOR + 5.000%) | 6,370,006 | 6,131,131 | |||||||||||||
11.744%, Due 4/21/2025, 2017 2nd Lien Term Loan,(3-mo. LIBOR + 9.000%) | 5,861,000 | 5,538,645 | |||||||||||||
Covia Holdings Corp., 6.553%, Due 6/1/2025, Term Loan,(3-mo. LIBOR + 3.750%) | 5,282,455 | 4,571,965 | |||||||||||||
DAE Aviation Holdings, Inc., 6.240%, Due 7/7/2022, 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 945,781 | 946,963 | |||||||||||||
DexKo Global, Inc., 5.993%, Due 7/24/2024, 2018 USD Term Loan,(1-mo. LIBOR + 3.500%) | 2,719,892 | 2,691,551 | |||||||||||||
DG Investment Intermediate Holdings, Inc., 5.493%, Due 2/3/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.000%) | 11,774,135 | 11,538,653 | |||||||||||||
GlobalLogic Holdings, Inc., | |||||||||||||||
1.625%, Due 8/1/2025, 2018 Delayed Draw Term Loan,(1-mo. LIBOR + 1.625%)E | 1,231,625 | 1,227,006 | |||||||||||||
5.743%, Due 8/1/2025, 2018 Add On 1st Lien Term Loan,(1-mo. LIBOR + 3.250%) | 8,599,822 | 8,567,572 | |||||||||||||
Greenway Health LLC, 6.560%, Due 2/14/2024, 2017 1st Lien Term Loan,(3-mo. LIBOR + 3.750%) | 12,253,209 | 11,487,383 | |||||||||||||
Innovative Water Care Global Corp., Due 2/20/2026, 1st Lien Term LoanD | 3,192,000 | 3,040,380 |
See accompanying notes
17
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
BANK LOAN OBLIGATIONSC - 87.99% (continued) | |||||||||||||||
Manufacturing - 11.70% (continued) | |||||||||||||||
Innovative Xcessories & Services LLC, 7.250%, Due 11/29/2022, Term Loan B,(1-mo. LIBOR + 4.750%) | $ | 7,035,476 | $ | 6,982,710 | |||||||||||
Ivanti Software, Inc., | |||||||||||||||
6.770%, Due 1/20/2024, 2017 Term Loan B,(1-mo. LIBOR + 4.250%) | 1,475,187 | 1,462,279 | |||||||||||||
11.520%, Due 1/20/2025, 2017 2nd Lien Term Loan,(1-mo. LIBOR + 9.000%) | 2,828,000 | 2,710,638 | |||||||||||||
Navios Maritime Partners LP, 7.780%, Due 9/14/2020, 2017 Term Loan B,(3-mo. LIBOR + 5.000%) | 2,053,128 | 2,035,163 | |||||||||||||
Netsmart Technologies, Inc., | |||||||||||||||
6.243%, Due 4/19/2023, Term Loan D1,(1-mo. LIBOR + 3.750%) | 7,560,859 | 7,466,348 | |||||||||||||
9.993%, Due 10/19/2023, 2018 2nd Lien Term Loan B,(1-mo. LIBOR + 7.500%) | 354,000 | 350,460 | |||||||||||||
NN, Inc., | |||||||||||||||
5.743%, Due 4/2/2021, 2017 Term Loan,(1-mo. LIBOR + 3.250%) | 5,826,695 | 5,673,744 | |||||||||||||
6.243%, Due 10/19/2022, 2016 Term Loan B,(1-mo. LIBOR + 3.750%) | 10,230,589 | 9,991,909 | |||||||||||||
Novetta Solutions LLC, 7.500%, Due 10/16/2022, 2015 Term Loan,(1-mo. LIBOR + 5.000%) | 288,369 | 282,602 | |||||||||||||
OmniMax International, Inc. (fka Euramax International, Inc.), 8.000%, Due 2/6/2021, Unsecured Term Loan,(3-mo. LIBOR + 2.000%)A | 371,352 | 319,102 | |||||||||||||
Oxbow Carbon LLC, 5.993%, Due 1/4/2023, 2017 1st Lien Term Loan B,(1-mo. LIBOR + 3.500%) | 1,699,550 | 1,694,247 | |||||||||||||
PAE Holding Corp., 7.993%, Due 10/20/2022, 1st Lien Term Loan,(1-mo. LIBOR + 5.500%) | 3,865,509 | 3,855,846 | |||||||||||||
Pisces Midco, Inc., 6.547%, Due 4/12/2025, 2018 Term Loan,(3-mo. LIBOR + 3.750%) | 10,298,250 | 10,002,175 | |||||||||||||
PLZ Aeroscience Corp., 6.009%, Due 7/31/2022, USD Term Loan,(1-mo. LIBOR + 3.500%) | 4,226,420 | 4,184,156 | |||||||||||||
Q Technologies, Inc., 10.993%, Due 4/5/2023, Term Loan B,(1-mo. LIBOR + 8.500%)J | 5,385,887 | 5,345,492 | |||||||||||||
Springer Nature Deutschland GmbH, 5.993%, Due 8/15/2022, USD Term Loan B13,(1-mo. LIBOR + 3.500%) | 722,781 | 721,336 | |||||||||||||
Transplace Holdings, Inc., 6.231%, Due 10/7/2024, 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 6,891,521 | 6,848,448 | |||||||||||||
TRC Companies, Inc., 5.993%, Due 6/21/2024, Term Loan,(1-mo. LIBOR + 3.500%) | 4,773,575 | 4,713,905 | |||||||||||||
TurboCombustor Technology, Inc., 6.993%, Due 12/2/2020, New Term Loan B,(1-mo. LIBOR + 4.500%) | 7,441,978 | 7,088,484 | |||||||||||||
VIP Cinema Holdings, Inc., 8.500%, Due 3/1/2023, USD Term Loan B,(1-mo. LIBOR + 6.000%) | 4,592,588 | 4,294,070 | |||||||||||||
Werner FinCo LP, 6.797%, Due 7/24/2024, 2017 Term Loan,(3-mo. LIBOR + 4.000%) | 5,333,696 | 5,140,350 | |||||||||||||
|
| ||||||||||||||
217,043,885 | |||||||||||||||
|
| ||||||||||||||
Media - 1.38% | |||||||||||||||
Allen Media LLC, 9.079%, Due 9/22/2023, 2018 Term Loan B,(1-mo. LIBOR + 6.500%) | 4,031,000 | 3,879,837 | |||||||||||||
AppLovin Corp., 6.243%, Due 8/15/2025, 2018 Term Loan B,(1-mo. LIBOR + 3.750%) | 9,124,000 | 9,146,810 | |||||||||||||
CSC Holdings LLC, 5.591%, Due 4/15/2027, 2019 Term Loan B,(3-mo. LIBOR + 3.000%) | 3,778,000 | 3,771,389 | |||||||||||||
Extreme Reach, Inc., | |||||||||||||||
8.750%, Due 2/7/2020, 1st Lien Term Loan,(1-mo. LIBOR + 6.250%) | 345,818 | 336,958 | |||||||||||||
12.493%, Due 1/24/2021, 2nd Lien Term Loan,(1-mo. LIBOR + 10.000%) | 1,717,000 | 1,530,276 | |||||||||||||
Screenvision LLC, 7.553%, Due 6/28/2025, 2018 Term Loan,(3-mo. LIBOR + 4.750%) | 3,475,290 | 3,418,817 | |||||||||||||
SurveyMonkey, Inc., 6.170%, Due 10/10/2025, 2018 Term Loan B,(3-mo. LIBOR + 3.750%) | 3,530,973 | 3,491,250 | |||||||||||||
|
| ||||||||||||||
25,575,337 | |||||||||||||||
|
| ||||||||||||||
Service - 17.95% | |||||||||||||||
Access CIG LLC, 6.243%, Due 2/27/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 9,399,958 | 9,290,261 | |||||||||||||
ASP MCS Acquisition Corp., 7.243%, Due 5/18/2024, Term Loan B,(1-mo. LIBOR + 4.750%) | 6,416,108 | 5,181,007 | |||||||||||||
BCPE Eagle Buyer LLC, 6.879%, Due 3/18/2024, 2017 1st Lien Term Loan,(3-mo. LIBOR + 4.250%) | 7,319,422 | 7,118,138 | |||||||||||||
Blount International, Inc., 6.243%, Due 4/12/2023, 2018 Term Loan B,(1-mo. LIBOR + 3.750%) | 5,955,075 | 5,947,631 | |||||||||||||
Blucora, Inc., 5.493%, Due 5/22/2024, 2017 Term Loan B,(1-mo. LIBOR + 3.000%) | 1,575,867 | 1,571,927 | |||||||||||||
Boing US Holdco, Inc., | |||||||||||||||
5.989%, Due 10/3/2024, 2017 1st Lien Term Loan,(3-mo. LIBOR + 3.250%) | 5,199,466 | 5,154,855 | |||||||||||||
10.239%, Due 10/3/2025, 2017 2nd Lien Term Loan,(3-mo. LIBOR + 7.500%) | 1,934,000 | 1,885,650 | |||||||||||||
Brand Energy & Infrastructure Services, Inc., 7.011%, Due 6/21/2024, 2017 Term Loan,(2-mo. LIBOR + 4.250%) | 12,172,754 | 11,870,383 | |||||||||||||
Capstone Logistics LLC, 6.993%, Due 10/7/2021, Term Loan B,(1-mo. LIBOR + 4.500%) | 1,593,208 | 1,585,911 | |||||||||||||
CDS U.S. Intermediate Holdings, Inc., | |||||||||||||||
6.553%, Due 7/8/2022, 2017 1st Lien Term Loan,(3-mo. LIBOR + 3.750%) | 12,623,148 | 11,823,724 | |||||||||||||
11.053%, Due 7/10/2023, 2nd Lien Term Loan,(3-mo. LIBOR + 8.250%) | 6,095,796 | 5,496,396 |
See accompanying notes
18
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
BANK LOAN OBLIGATIONSC - 87.99% (continued) | |||||||||||||||
Service - 17.95% (continued) | |||||||||||||||
Cengage Learning, Inc., 6.740%, Due 6/7/2023, 2016 Term Loan B,(1-mo. LIBOR + 4.250%) | $ | 8,288,953 | $ | 7,638,768 | |||||||||||
Chloe OX Parent LLC, 7.303%, Due 12/29/2024, 1st Lien Term Loan,(3-mo. LIBOR + 4.500%) | 4,962,500 | 4,937,688 | |||||||||||||
Cvent, Inc., 6.243%, Due 11/29/2024, 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 8,944,410 | 8,810,244 | |||||||||||||
Deliver Buyer, Inc., 7.493%, Due 5/1/2024, Term Loan B,(3-mo. LIBOR + 5.000%) | 12,859,449 | 12,827,300 | |||||||||||||
DTI Holdco, Inc., 7.494%, Due 9/30/2023, 2018 Term Loan B,(2-mo. LIBOR + 4.750%) | 9,740,692 | 9,123,814 | |||||||||||||
Employbridge LLC, 7.303%, Due 4/18/2025, Term Loan B,(3-mo. LIBOR + 4.500%) | 7,395,832 | 7,371,204 | |||||||||||||
EVO Payments International LLC, 5.730%, Due 12/22/2023, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.250%) | 2,639,870 | 2,631,079 | |||||||||||||
Heartland Dental LLC, | |||||||||||||||
3.750%, Due 4/30/2025, 2018 Delayed Draw Term Loan,(1-mo. LIBOR + 3.750%)E | 587,120 | 579,417 | |||||||||||||
6.486%, Due 4/30/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 14,025,340 | 13,841,327 | |||||||||||||
I-Logic Technologies Bidco Ltd., 5.884%, Due 12/21/2024, 2018 USD Term Loan,(3-mo. LIBOR + 3.250%) | 5,745,065 | 5,524,857 | |||||||||||||
IG Investment Holdings LLC, 5.993%, Due 5/23/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.500%) | 2,169,041 | 2,162,708 | |||||||||||||
Imagine! Print Solutions, Inc., | |||||||||||||||
7.250%, Due 6/21/2022, 2017 Term Loan,(3-mo. LIBOR + 4.750%) | 8,632,128 | 8,114,200 | |||||||||||||
11.250%, Due 6/21/2023, 2017 2nd Lien Term Loan,(1-mo. LIBOR + 8.750%) | 1,019,000 | 901,815 | |||||||||||||
Internap Corp., 8.250%, Due 4/6/2022, 2017 Term Loan,(1-mo. LIBOR + 5.750%) | 901,275 | 885,503 | |||||||||||||
Keystone Acquisition Corp., 8.053%, Due 5/1/2024, 1st Lien Term Loan,(3-mo. LIBOR + 5.250%) | 3,372,313 | 3,245,851 | |||||||||||||
Kingpin Intermediate Holdings LLC, 5.990%, Due 7/3/2024, 2018 Term Loan B,(1-mo. LIBOR + 3.500%) | 11,123,384 | 11,046,967 | |||||||||||||
KUEHG Corp., 11.053%, Due 8/18/2025, 2017 2nd Lien Term Loan,(1-mo. LIBOR + 8.250%) | 5,776,000 | 5,718,240 | |||||||||||||
LifeMiles Ltd., 8.303%, Due 8/18/2022, Term Loan B,(3-mo. LIBOR + 5.500%) | 4,568,822 | 4,585,955 | |||||||||||||
LSC Communications, Inc., 7.993%, Due 9/30/2022, 2017 Term Loan B,(1-mo. LIBOR + 5.500%) | 1,228,223 | 1,220,547 | |||||||||||||
LSF9 Atlantis Holdings LLC, 8.513%, Due 5/1/2023, 2017 Term Loan,(1-mo. LIBOR + 6.000%) | 2,029,913 | 1,831,996 | |||||||||||||
NEP/NCP Holdco, Inc., | |||||||||||||||
5.743%, Due 10/20/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.250%) | 8,000,000 | 7,986,640 | |||||||||||||
9.493%, Due 10/19/2026, 2018 2nd Lien Term Loan,(3-mo. LIBOR + 7.000%) | 3,500,000 | 3,408,125 | |||||||||||||
New Millennium HoldCo, Inc., 8.993%, Due 12/21/2020, Exit Term Loan,(1-mo. LIBOR + 6.500%) | 456,096 | 221,207 | |||||||||||||
Newport Group Inc, 6.538%, Due 9/13/2025, 2018 1st Lien Term Loan,(3-mo. LIBOR + 3.750%) | 6,500,708 | 6,435,700 | |||||||||||||
nThrive, Inc., 6.993%, Due 10/20/2022, 2016 1st Lien Term Loan,(1-mo. LIBOR + 4.500%) | 2,030,950 | 1,988,645 | |||||||||||||
Playpower, Inc., 7.553%, Due 6/23/2021, 2015 1st Lien Term Loan,(1-mo. LIBOR + 4.750%) | 2,209,874 | 2,204,350 | |||||||||||||
PSC Industrial Holdings Corp., 6.239%, Due 10/3/2024, 2017 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 5,862,430 | 5,774,494 | |||||||||||||
Quad/Graphics, Inc., 7.500%, Due 1/31/2026, 2018 Term Loan B,(1-mo. LIBOR + 5.000%) | 2,000,000 | 1,992,500 | |||||||||||||
Red Ventures LLC, 5.493%, Due 11/8/2024, 2018 Term Loan B,(1-mo. LIBOR + 3.000%) | 5,009,386 | 4,995,610 | |||||||||||||
STG-Fairway Acquisitions, Inc., 7.743%, Due 6/30/2022, 2015 1st Lien Term Loan,(1-mo. LIBOR + 5.250%) | 11,252,728 | 11,196,464 | |||||||||||||
TEN-X LLC, 6.493%, Due 9/27/2024, 1st Lien Term Loan,(1-mo. LIBOR + 4.000%) | 9,915,253 | 9,783,083 | |||||||||||||
TKC Holdings, Inc., | |||||||||||||||
6.250%, Due 2/1/2023, 2017 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 10,323,514 | 10,197,670 | |||||||||||||
10.500%, Due 2/1/2024, 2017 2nd Lien Term Loan,(1-mo. LIBOR + 8.000%) | 5,833,000 | 5,664,076 | |||||||||||||
Tweddle Group, Inc., 6.981%, Due 9/17/2023, 2016 Term Loan,(1-mo. LIBOR + 4.500%)A | 329,037 | 321,370 | |||||||||||||
UFC Holdings LLC, 5.750%, Due 8/18/2023, 1st Lien Term Loan,(1-mo. LIBOR + 3.250%) | 3,303,046 | 3,302,022 | |||||||||||||
Utility One Source LP, 7.993%, Due 4/18/2023, Term Loan B,(1-mo. LIBOR + 5.500%) | 8,255,621 | 8,296,899 | |||||||||||||
Verra Mobility Corp., 6.243%, Due 2/28/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 9,068,426 | 9,098,623 | |||||||||||||
Vestcom Parent Holdings, Inc., | |||||||||||||||
6.493%, Due 12/19/2023, 2016 1st Lien Term Loan,(1-mo. LIBOR + 4.000%) | 7,327,303 | 7,052,529 | |||||||||||||
8.500%, Due 12/19/2023, 2016 1st Lien Term Loan,(3-mo. PRIME + 3.00%) | 872 | 839 | |||||||||||||
West Corp., | |||||||||||||||
5.993%, Due 10/10/2024, 2018 Term Loan B1,(3-mo. LIBOR + 3.500%) | 2,681,525 | 2,510,953 | |||||||||||||
6.493%, Due 10/10/2024, 2017 Term Loan,(3-mo. LIBOR + 4.000%) | 12,104,675 | 11,433,834 | |||||||||||||
William Morris Endeavor Entertainment LLC, 5.250%, Due 5/18/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 2.750%) | 19,472,036 | 18,863,535 | |||||||||||||
World Triathlon Corp., 6.803%, Due 6/26/2021, Term Loan,(3-mo. LIBOR + 4.000%) | 2,930,946 | 2,930,946 | |||||||||||||
WP CityMD Bidco LLC, 6.303%, Due 6/7/2024, 2018 1st Lien Term Loan,(3-mo. LIBOR + 3.500%) | 8,433,785 | 8,265,109 | |||||||||||||
Xplornet Communications, Inc., 6.803%, Due 9/9/2021, Term Loan B,(3-mo. LIBOR + 4.000%) | 7,023,133 | 7,014,354 | |||||||||||||
Yak Access LLC, 7.493%, Due 7/2/2025, 2018 1st Lien Term Loan B,(1-mo. LIBOR + 5.000%) | 2,425,744 | 2,095,236 | |||||||||||||
|
| ||||||||||||||
332,960,176 | |||||||||||||||
|
|
See accompanying notes
19
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
BANK LOAN OBLIGATIONSC - 87.99% (continued) | |||||||||||||||
Technology - 11.96% | |||||||||||||||
24-7 Intouch, Inc., 6.743%, Due 8/20/2025, 2018 Term Loan,(3-mo. LIBOR + 4.250%) | $ | 3,117,548 | $ | 3,008,433 | |||||||||||
Aptean, Inc., | |||||||||||||||
7.060%, Due 12/20/2022, 2017 1st Lien Term Loan,(3-mo. LIBOR + 4.250%) | 321,150 | 321,015 | |||||||||||||
12.310%, Due 12/14/2023, 2016 2nd Lien Term Loan,(3-mo. LIBOR + 9.500%) | 1,000,000 | 1,001,670 | |||||||||||||
AqGen Ascensus, Inc., 5.993%, Due 12/3/2022, 2017 Repriced Term Loan,(1-mo. LIBOR + 3.500%) | 6,434,872 | 6,386,611 | |||||||||||||
Brooks Automation, Inc., 5.690%, Due 10/4/2024, 2019 Term Loan B,(3-mo. LIBOR + 3.000%) | 697,000 | 693,515 | |||||||||||||
DigiCert, Inc., | |||||||||||||||
6.493%, Due 10/31/2024, 2017 Term Loan B1,(1-mo. LIBOR + 4.000%) | 9,856,140 | 9,782,219 | |||||||||||||
10.493%, Due 10/31/2025, 2017 2nd Lien Term Loan,(3-mo. LIBOR + 8.000%) | 8,400,673 | 8,127,651 | |||||||||||||
Dun & Bradstreet Corp. (The), Due 2/1/2026, Term LoanD | 11,001,000 | 11,003,750 | |||||||||||||
Dynatrace LLC, 5.743%, Due 8/22/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.250%) | 15,833,000 | 15,747,185 | |||||||||||||
EIG Investors Corp., 6.389%, Due 2/9/2023, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 4,442,583 | 4,423,702 | |||||||||||||
Genuine Financial Holdings LLC, 6.553%, Due 7/12/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 3.750%) | 8,235,360 | 8,194,183 | |||||||||||||
GI Revelation Acquisition LLC, 7.493%, Due 4/16/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 5.000%) | 6,445,610 | 6,381,154 | |||||||||||||
GrafTech Finance, Inc., 5.993%, Due 2/12/2025, 2018 Term Loan B,(1-mo. LIBOR + 3.500%) | 12,310,802 | 12,264,637 | |||||||||||||
ION Trading Technologies S.a.r.l., 6.634%, Due 11/21/2024, USD Incremental Term Loan B,(2-mo. LIBOR + 4.000%) | 15,504,980 | 14,690,969 | |||||||||||||
Lighthouse Network LLC, | |||||||||||||||
7.134%, Due 11/29/2024, 1st Lien Term Loan,(2-mo. LIBOR + 4.500%) | 8,229,870 | 8,209,295 | |||||||||||||
11.244%, Due 11/28/2025, 2nd Lien Term Loan,(3-mo. LIBOR + 8.500%) | 1,908,000 | 1,860,300 | |||||||||||||
McAfee LLC, | |||||||||||||||
6.243%, Due 9/30/2024, 2018 USD Term Loan B,(1-mo. LIBOR + 3.750%) | 11,299,637 | 11,317,265 | |||||||||||||
10.993%, Due 9/29/2025, 2017 2nd Lien Term Loan,(3-mo. LIBOR + 8.500%) | 735,583 | 743,859 | |||||||||||||
Mirion Technologies, Inc., 7.553%, Due 3/31/2022, Term Loan B,(3-mo. LIBOR + 4.750%) | 806,167 | 790,043 | |||||||||||||
Mitchell International, Inc., 5.743%, Due 11/29/2024, 2017 1st Lien Term Loan,(1-mo. LIBOR + 3.250%) | 12,870,732 | 12,540,984 | |||||||||||||
MLN US HoldCo LLC, 11.243%, Due 11/30/2026, 2018 2nd Lien Term Loan,(1-mo. LIBOR + 8.750%) | 6,060,000 | 5,933,770 | |||||||||||||
Navicure, Inc., 6.243%, Due 11/1/2024, 1st Lien Term Loan B,(1-mo. LIBOR + 3.750%) | 4,299,620 | 4,224,377 | |||||||||||||
NeuStar, Inc., 10.493%, Due 8/8/2025, 2nd Lien Term Loan,(1-mo. LIBOR + 8.000%) | 5,991,000 | 5,856,202 | |||||||||||||
OEConnection LLC, 8.500%, Due 11/22/2024, 1st Lien Term Loan,(1-mo. LIBOR + 4.000%) | 2,320,560 | 2,291,553 | |||||||||||||
Perforce Intermediate Holdings LLC, 6.993%, Due 12/27/2024, Term Loan,(1-mo. LIBOR + 4.500%) | 1,203,000 | 1,199,993 | |||||||||||||
Ping Identity Corp., 6.243%, Due 1/24/2025, 2018 Term Loan B,(1-mo. LIBOR + 3.750%) | 5,243,949 | 5,211,175 | |||||||||||||
Plantronics, Inc., 4.993%, Due 7/2/2025, 2018 Term Loan B,(1-mo. LIBOR + 2.500%) | 10,479,925 | 10,421,028 | |||||||||||||
Project Ruby Ultimate Parent Corp., 5.993%, Due 2/9/2024, 2017 Term Loan B,(1-mo. LIBOR + 3.500%) | 6,899,061 | 6,795,575 | |||||||||||||
Riverbed Technology, Inc., 5.750%, Due 4/24/2022, 2016 Term Loan,(1-mo. LIBOR + 3.250%) | 10,163,248 | 9,230,770 | |||||||||||||
SciQuest, Inc., 6.493%, Due 12/28/2024, 2017 Term Loan,(1-mo. LIBOR + 4.000%) | 4,507,470 | 4,417,321 | |||||||||||||
SonicWALL, Inc., 6.183%, Due 5/16/2025, 1st Lien Term Loan,(3-mo. LIBOR + 3.500%) | 4,987,500 | 4,853,486 | |||||||||||||
Stars Group Holdings B.V. (The), 6.303%, Due 7/10/2025, 2018 USD Incremental Term Loan,(3-mo. LIBOR + 3.500%) | 5,055,622 | 5,053,903 | |||||||||||||
TriTech Software Systems, 6.243%, Due 8/29/2025, 2018 Term Loan B,(1-mo. LIBOR + 3.750%) | 8,606,000 | 8,512,797 | |||||||||||||
Verifone Systems, Inc., 6.683%, Due 8/20/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 4.000%) | 2,499,735 | 2,488,586 | |||||||||||||
Vero Parent, Inc., 6.993%, Due 8/16/2024, 2018 Term Loan B,(1-mo. LIBOR + 4.500%) | 6,633,205 | 6,598,646 | |||||||||||||
Weld North Education LLC, 7.053%, Due 2/7/2025, Term Loan B,(3-mo. LIBOR + 4.250%) | 1,313,078 | 1,293,381 | |||||||||||||
|
| ||||||||||||||
221,871,003 | |||||||||||||||
|
| ||||||||||||||
Telecommunications - 3.91% | |||||||||||||||
CenturyLink, Inc., 5.243%, Due 1/31/2025, 2017 Term Loan B,(1-mo. LIBOR + 2.750%) | 6,780,272 | 6,671,381 | |||||||||||||
Fusion Telecommunications International, Inc., 10.234%, Due 5/4/2023, 1st Lien Term Loan B,(3-mo. LIBOR + 7.500%) | 3,178,880 | 2,860,992 | |||||||||||||
Global Tel*Link Corp., | |||||||||||||||
6.743%, Due 11/29/2025, 2018 1st Lien Term Loan,(1-mo. LIBOR + 4.250%) | 2,919,264 | 2,911,965 | |||||||||||||
10.743%, Due 11/29/2026, 2018 2nd Lien Term Loan,(1-mo. LIBOR + 8.250%) | 5,530,000 | 5,382,515 |
See accompanying notes
20
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
BANK LOAN OBLIGATIONSC - 87.99% (continued) | |||||||||||||||
Telecommunications - 3.91% (continued) | |||||||||||||||
Intelsat Jackson Holdings S.A., | |||||||||||||||
6.229%, Due 11/27/2023, 2017 Term Loan B3,(3-mo. LIBOR + 3.750%) | $ | 7,319,000 | $ | 7,311,461 | |||||||||||
6.625%, Due 1/2/2024, 2017 Term Loan B5F | 514,000 | 519,140 | |||||||||||||
6.979%, Due 1/2/2024, 2017 Term Loan B4,(1-mo. LIBOR + 4.500%) | 771,000 | 781,277 | |||||||||||||
Merrill Communications LLC, 7.994%, Due 6/1/2022, 2015 Term Loan,(3-mo. LIBOR + 5.250%) | 17,252 | 17,295 | |||||||||||||
NeuStar, Inc., 5.993%, Due 8/8/2024, 2018 Term Loan B4,(1-mo. LIBOR + 3.500%) | 7,849,686 | 7,516,075 | |||||||||||||
QualTek USA LLC, 8.384%, Due 7/18/2025, 2018 1st Lien Term Loan,(2-mo. LIBOR + 5.750%) | 8,569,106 | 8,376,301 | |||||||||||||
Securus Technologies Holdings, Inc., | |||||||||||||||
6.993%, Due 11/1/2024, 2017 1st Lien Term Loan,(1-mo. LIBOR + 4.500%) | 8,980,180 | 8,924,054 | |||||||||||||
10.743%, Due 11/1/2025, 2017 2nd Lien Term Loan,(1-mo. LIBOR + 8.250%) | 7,951,000 | 7,738,947 | |||||||||||||
U.S. Telepacific Corp., 7.803%, Due 5/2/2023, 2017 Term Loan B,(3-mo. LIBOR + 5.000%) | 13,796,912 | 13,527,872 | |||||||||||||
|
| ||||||||||||||
72,539,275 | |||||||||||||||
|
| ||||||||||||||
Transportation - 2.56% | |||||||||||||||
Accuride Corp., 8.053%, Due 11/17/2023, 2017 Term Loan B,(3-mo. LIBOR + 5.250%) | 1,599,082 | 1,359,220 | |||||||||||||
Daseke, Inc., 7.493%, Due 2/27/2024, 2017 Term Loan B,(1-mo. LIBOR + 5.000%) | 6,345,835 | 6,314,106 | |||||||||||||
Entrans International LLC, 8.493%, Due 11/2/2024, 2018 Term Loan,(1-mo. LIBOR + 6.000%) | 6,306,000 | 6,211,410 | |||||||||||||
Gruden Acquisition, Inc., 8.303%, Due 8/18/2022, 2017 Term Loan,(3-mo. LIBOR + 5.500%) | 5,864,338 | 5,769,043 | |||||||||||||
Livingston International, Inc., | |||||||||||||||
8.553%, Due 3/20/2020, Term Loan B3,(3-mo. LIBOR + 5.750%) | 3,683,476 | 3,683,476 | |||||||||||||
11.053%, Due 4/18/2020, 2nd Lien Term Loan,(3-mo. LIBOR + 8.250%) | 750,000 | 751,875 | |||||||||||||
Savage Enterprises LLC, 7.020%, Due 8/1/2025, 2018 1st Lien Term Loan B,(1-mo. LIBOR + 4.500%) | 8,187,678 | 8,214,943 | |||||||||||||
SMB Shipping Logistics LLC, 6.883%, Due 2/2/2024, 1st Lien Term Loan,(6-mo. LIBOR + 4.000%) | 8,022,162 | 7,941,940 | |||||||||||||
United Road Services, Inc., 7.743%, Due 9/1/2024, 2017 Term Loan B,(1-mo. LIBOR + 5.250%) | 7,385,262 | 7,320,641 | |||||||||||||
|
| ||||||||||||||
47,566,654 | |||||||||||||||
|
| ||||||||||||||
Utilities - 0.61% | |||||||||||||||
Compass Power Generation LLC, 5.993%, Due 12/20/2024, 2018 Term Loan B,(1-mo. LIBOR + 3.500%) | 490,000 | 488,623 | |||||||||||||
Frontera Generation Holdings LLC, 6.762%, Due 5/2/2025, 2018 Term Loan B,(1-mo. LIBOR + 4.250%) | 10,638,540 | 10,461,195 | |||||||||||||
Star West Generation LLC, 7.250%, Due 3/13/2020, 2015 Term Loan B,(1-mo. LIBOR + 4.750%) | 287,506 | 276,963 | |||||||||||||
|
| ||||||||||||||
11,226,781 | |||||||||||||||
|
| ||||||||||||||
Total Bank Loan Obligations (Cost $1,669,948,143) | 1,631,947,548 | ||||||||||||||
|
| ||||||||||||||
CORPORATE OBLIGATIONS - 5.57% | |||||||||||||||
Communications - 2.46% | |||||||||||||||
CommScope, Inc., 5.500%, Due 6/15/2024G | 15,000,000 | 14,400,000 | |||||||||||||
EIG Investors Corp., 10.875%, Due 2/1/2024 | 8,000,000 | 8,520,000 | |||||||||||||
McGraw-Hill Global Education Holdings LLC / McGraw-Hill Global Education Finance, 7.875%, Due 5/15/2024G | 2,709,000 | 2,180,745 | |||||||||||||
Univision Communications, Inc., | |||||||||||||||
6.750%, Due 9/15/2022G | 14,560,000 | 14,651,000 | |||||||||||||
5.125%, Due 2/15/2025G | 6,706,000 | 5,867,750 | |||||||||||||
|
| ||||||||||||||
45,619,495 | |||||||||||||||
|
| ||||||||||||||
Consumer, Cyclical - 0.56% | |||||||||||||||
Constellation Merger Sub, Inc., 8.500%, Due 9/15/2025G | 5,525,000 | 5,290,188 | |||||||||||||
KFC Holding Co/Pizza Hut Holdings LLC/Taco Bell of America LLC, 5.000%, Due 6/1/2024G | 5,000,000 | 5,053,750 | |||||||||||||
|
| ||||||||||||||
10,343,938 | |||||||||||||||
|
| ||||||||||||||
Consumer,Non-Cyclical - 2.20% | |||||||||||||||
Avantor, Inc., 9.000%, Due 10/1/2025G | 12,120,000 | 12,983,550 | |||||||||||||
Hadrian Merger Sub, Inc., 8.500%, Due 5/1/2026G | 3,442,000 | 3,158,035 | |||||||||||||
HLF Financing Sarl LLC / Herbalife International, Inc., 7.250%, Due 8/15/2026G | 5,000,000 | 5,100,250 |
See accompanying notes
21
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 5.57% (continued) | |||||||||||||||
Consumer,Non-Cyclical - 2.20% (continued) | |||||||||||||||
LSC Communications, Inc., 8.750%, Due 10/15/2023G | $ | 845,000 | $ | 902,037 | |||||||||||
RegionalCare Hospital Partners Holdings, Inc. / LifePoint Health, Inc., 9.750%, Due 12/1/2026G | 18,291,000 | 18,748,275 | |||||||||||||
|
| ||||||||||||||
40,892,147 | |||||||||||||||
|
| ||||||||||||||
Energy - 0.13% | |||||||||||||||
McDermott Technology Americas, Inc. / McDermott Technology US, Inc., 10.625%, Due 5/1/2024G | 2,870,000 | 2,382,100 | |||||||||||||
|
| ||||||||||||||
Technology - 0.22% | |||||||||||||||
Riverbed Technology, Inc., 8.875%, Due 3/1/2023G | 6,010,000 | 4,161,925 | |||||||||||||
|
| ||||||||||||||
Total Corporate Obligations (Cost $104,388,451) | 103,399,605 | ||||||||||||||
|
| ||||||||||||||
FOREIGN CORPORATE OBLIGATIONS - 0.48% | |||||||||||||||
Basic Materials - 0.16% | |||||||||||||||
Starfruit Finco B.V. / Starfruit US Holdco LLC, 8.000%, Due 10/1/2026G | 3,000,000 | 2,977,500 | |||||||||||||
|
| ||||||||||||||
Communications - 0.32% | |||||||||||||||
Intelsat Jackson Holdings S.A., 9.750%, Due 7/15/2025G | 5,644,000 | 5,855,650 | |||||||||||||
|
| ||||||||||||||
Total Foreign Corporate Obligations (Cost $8,744,887) | 8,833,150 | ||||||||||||||
|
| ||||||||||||||
Shares | |||||||||||||||
SHORT-TERM INVESTMENTS - 5.72% (Cost $106,043,259) | |||||||||||||||
Investment Companies - 5.72% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 2.33%H I | 106,043,259 | 106,043,259 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 99.77% (Cost $1,889,333,347) | 1,850,412,232 | ||||||||||||||
OTHER ASSETS, NET OF LIABILITIES - 0.23% | 4,255,705 | ||||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 1,854,667,937 | |||||||||||||
|
| ||||||||||||||
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 $824,207 or 0.04% of net assets.
BNon-income producing security.
C Bank loan obligations, unless otherwise stated, carry a floating rate of interest. The coupon rate shown on floating or adjustable rate securities represents the rate at period end.
D Coupon rates may not be available for bank loans that are unsettled and/or unfunded as of February 28, 2019.
E Unfunded Loan Commitment. At period end, the amount of unfunded loan commitments was $3,094,813 or 0.17% of net assets. Of this amount, $458,687, $1,231,625, $587,120, $425,682 and $391,699 relate to Bulldog Purchaser, Inc., GlobalLogic Holdings, Inc., Heartland Dental LLC, Mavis Tire Express Services Corp. and Premise Health Holding Corp., respectively.
F Fixed Rate.
G Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $103,712,755 or 5.59% of net assets. The Fund has no right to demand registration of these securities.
H The Fund is affiliated by having the same investment advisor.
I7-day yield.
J Value was determined using significant unobservable inputs.
LIBOR - London Interbank Offered Rate.
LLC - Limited Liability Company.
LP - Limited Partnership.
PRIME - A rate, charged by banks, based on the U.S. Federal Funds rate.
REIT - Real Estate Investment Trust.
See accompanying notes
22
American Beacon Sound Point Floating Rate Income FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of February 28, 2019, the investments were classified as described below:
Sound Point Floating Rate Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets |
| |||||||||||||||||||||||||||
Common Stocks | $ | 4,935 | $ | - | $ | 183,735 | (1) | $ | 188,670 | |||||||||||||||||||
Warrants | - | - | 0 | (1) | - | |||||||||||||||||||||||
Bank Loan Obligations(2) | - | 1,624,491,985 | 7,455,563 | 1,631,947,548 | ||||||||||||||||||||||||
Corporate Obligations | - | 103,399,605 | - | 103,399,605 | ||||||||||||||||||||||||
Foreign Corporate Obligations | - | 8,833,150 | - | 8,833,150 | ||||||||||||||||||||||||
Short-Term Investments | 106,043,259 | - | - | 106,043,259 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 106,048,194 | $ | 1,736,724,740 | $ | 7,639,298 | $ | 1,850,412,232 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
(1) | Includes investments held in the Fund’s portfolio with $0 fair value. |
(2) | Unfunded loan commitments represent $3,094,813 at period end. |
U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the period ended February 28, 2019, there were no transfers into or out of Level 3.
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 8/31/2018 | 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 2/28/2019 | Unrealized Appreciation (Depreciation) at Period end** | ||||||||||||||||||||||||||||||
Common Stocks | $ | 1,541,588 | (1) | $ | 148,243 | $ | 1,492,950 | - | $ | 1,456,570 | $ | (1,469,716 | ) | - | - | $ | 183,735 | (1) | $ | 35,491 | ||||||||||||||||||||
Warrants | 0 | (1) | - | - | - | - | - | - | - | 0 | (1) | - | ||||||||||||||||||||||||||||
Bank Loan Obligations | 12,650,811 | 24,691 | 5,417,394 | 6,502 | (65,282 | ) | (65,135 | ) | 321,370 | - | 7,455,563 | 56,248 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
$ | 14,192,399 | $ | 172,934 | $ | 6,910,344 | $ | 6,502 | $ | 1,391,288 | $ | (1,534,851 | ) | $ | 321,370 | $ | - | $ | 7,639,298 | $ | 91,739 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** | Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at period end. This balance is included in the change in unrealized appreciation (depreciation) on the Statements of Operations. |
(1) | Investments held in the Fund’s portfolio with $0 fair value. |
For the period ended February 28, 2019, one common stock and a warrant have been fair valued at $0 by the Valuation Committee. The remaining common stock valued at $183,735 and one bank loan obligation valued at $321,370 have been fair valued using a private valuation service. The remaining bank loan obligations valued at $7,134,193 have been classified as Level 3 due to valuations based on single broker quotes.
See accompanying notes
23
Statements of Assets and Liabilities
February 28, 2019 (Unaudited)
SiM High Yield Opportunities Fund | Sound Point Floating Rate Income Fund | |||||||||||
Assets: |
| |||||||||||
Investments in unaffiliated securities, at fair value† | $ | 1,148,556,396 | $ | 1,744,368,973 | ||||||||
Investments in affiliated securities, at fair value‡ | 10,195,294 | 106,043,259 | ||||||||||
Foreign currency, at fair value^ | 5,997 | - | ||||||||||
Cash | - | 4,798,554 | ||||||||||
Deposits with broker for futures contracts | 2,175,656 | - | ||||||||||
Dividends and interest receivable | 19,781,743 | 11,280,075 | ||||||||||
Receivable for investments sold | 2,245,500 | 96,818,168 | ||||||||||
Receivable for fund shares sold | 3,089,879 | 8,808,352 | ||||||||||
Receivable for tax reclaims | 39 | - | ||||||||||
Receivable for expense reimbursement (Note 2) | 2,289 | - | ||||||||||
Prepaid expenses | 95,561 | 260,258 | ||||||||||
|
|
|
| |||||||||
Total assets | 1,186,148,354 | 1,972,377,639 | ||||||||||
|
|
|
| |||||||||
Liabilities: |
| |||||||||||
Payable for investments purchased | 6,617,764 | 102,793,983 | ||||||||||
Payable for fund shares redeemed | 3,444,876 | 9,785,941 | ||||||||||
Payable for expense reimbursement (Note 2) | - | 8,280 | ||||||||||
Dividends payable | 645,609 | 437,430 | ||||||||||
Unfunded loan commitments | - | 3,094,813 | ||||||||||
Management andsub-advisory fees payable (Note 2) | 644,005 | 1,023,533 | ||||||||||
Service fees payable (Note 2) | 64,442 | 165,604 | ||||||||||
Transfer agent fees payable (Note 2) | 73,809 | 84,993 | ||||||||||
Custody and fund accounting fees payable | 66,413 | 188,015 | ||||||||||
Professional fees payable | 33,745 | 52,232 | ||||||||||
Trustee fees payable (Note 2) | 17,825 | 23,667 | ||||||||||
Payable for prospectus and shareholder reports | 42,823 | - | ||||||||||
Payable for variation margin from open futures contracts (Note 5) | 858,903 | - | ||||||||||
Other liabilities | 2,913 | 51,211 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 12,513,127 | 117,709,702 | ||||||||||
|
|
|
| |||||||||
Net assets | $ | 1,173,635,227 | $ | 1,854,667,937 | ||||||||
|
|
|
| |||||||||
Analysis of net assets: |
| |||||||||||
Paid-in-capital | $ | 1,216,900,868 | $ | 1,922,936,942 | ||||||||
Total distributable earnings (deficits)A | (43,265,641 | ) | (68,269,005 | ) | ||||||||
|
|
|
| |||||||||
Net assets | $ | 1,173,635,227 | $ | 1,854,667,937 | ||||||||
|
|
|
|
See accompanying notes
24
American Beacon FundsSM
Statements of Assets and Liabilities
February 28, 2019 (Unaudited)
SiM High Yield Opportunities Fund | Sound Point Floating Rate Income Fund | |||||||||||
Shares outstanding at no par value (unlimited shares authorized): |
| |||||||||||
Institutional Class | 42,638,785 | 34,319,926 | ||||||||||
|
|
|
| |||||||||
Y Class | 65,471,252 | 102,773,133 | ||||||||||
|
|
|
| |||||||||
Investor Class | 8,523,361 | 35,138,036 | ||||||||||
|
|
|
| |||||||||
A Class | 2,430,372 | 5,352,697 | ||||||||||
|
|
|
| |||||||||
C Class | 5,965,169 | 6,838,609 | ||||||||||
|
|
|
| |||||||||
SP Class | N/A | 57,209 | ||||||||||
|
|
|
| |||||||||
Net assets: |
| |||||||||||
Institutional Class | $ | 400,521,177 | $ | 344,828,305 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 614,301,904 | $ | 1,033,651,594 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 79,779,997 | $ | 352,576,112 | ||||||||
|
|
|
| |||||||||
A Class | $ | 22,760,919 | $ | 53,924,077 | ||||||||
|
|
|
| |||||||||
C Class | $ | 56,271,230 | $ | 69,110,364 | ||||||||
|
|
|
| |||||||||
SP Class | N/A | $ | 577,485 | |||||||||
|
|
|
| |||||||||
Net asset value, offering and redemption price per share: |
| |||||||||||
Institutional Class | $ | 9.39 | $ | 10.05 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 9.38 | $ | 10.06 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 9.36 | $ | 10.03 | ||||||||
|
|
|
| |||||||||
A Class | $ | 9.37 | $ | 10.07 | ||||||||
|
|
|
| |||||||||
A Class (offering price) | $ | 9.84 | $ | 10.57 | ||||||||
|
|
|
| |||||||||
C Class | $ | 9.43 | $ | 10.11 | ||||||||
|
|
|
| |||||||||
SP Class | N/A | $ | 10.09 | |||||||||
|
|
|
| |||||||||
† Cost of investments in unaffiliated securities | $ | 1,175,784,997 | $ | 1,783,290,088 | ||||||||
‡ Cost of investments in affiliated securities | $ | 10,195,294 | $ | 106,043,259 | ||||||||
^ Cost of foreign currency | $ | 6,027 | $ | - | ||||||||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
25
American Beacon FundsSM
Statements of Operations
For the period ended February 28, 2019 (Unaudited)
SiM High Yield Opportunities Fund | Sound Point Floating Rate Income Fund | |||||||||||
Investment income: |
| |||||||||||
Dividend income from unaffiliated securities | $ | 532,326 | $ | - | ||||||||
Dividend income from affiliated securities (Note 8) | 112,690 | 2,839,884 | ||||||||||
Interest income | 39,949,783 | 69,334,802 | ||||||||||
|
|
|
| |||||||||
Total investment income | 40,594,799 | 72,174,686 | ||||||||||
|
|
|
| |||||||||
Expenses: |
| |||||||||||
Management andsub-advisory fees (Note 2) | 4,120,005 | 7,708,046 | ||||||||||
Transfer agent fees: | ||||||||||||
Institutional Class (Note 2) | 88,625 | 56,686 | ||||||||||
Y Class (Note 2) | 332,996 | 577,442 | ||||||||||
Investor Class | 2,514 | 7,020 | ||||||||||
A Class | 2,775 | 1,307 | ||||||||||
C Class | 1,915 | 1,623 | ||||||||||
SP Class | - | 17 | ||||||||||
Custody and fund accounting fees | 101,739 | 345,285 | ||||||||||
Professional fees | 53,949 | 66,508 | ||||||||||
Registration fees and expenses | 71,104 | 176,785 | ||||||||||
Service fees (Note 2): | ||||||||||||
Investor Class | 145,535 | 959,222 | ||||||||||
A Class | 22,174 | 21,441 | ||||||||||
C Class | 32,105 | 31,466 | ||||||||||
Distribution fees (Note 2): | ||||||||||||
A Class | 37,494 | 70,794 | ||||||||||
C Class | 288,262 | 329,458 | ||||||||||
SP Class | - | 820 | ||||||||||
Prospectus and shareholder report expenses | 43,887 | 28,984 | ||||||||||
Trustee fees (Note 2) | 37,046 | 64,261 | ||||||||||
Other expenses | 28,295 | 198,449 | ||||||||||
|
|
|
| |||||||||
Total expenses | 5,410,420 | 10,645,614 | ||||||||||
|
|
|
| |||||||||
Net fees waived and expenses recouped (Note 2) | 17,328 | 59,845 | ||||||||||
|
|
|
| |||||||||
Net expenses | 5,427,748 | 10,705,459 | ||||||||||
|
|
|
| |||||||||
Net investment income | 35,167,051 | 61,469,227 | ||||||||||
|
|
|
| |||||||||
Realized and unrealized gain (loss) from investments: |
| |||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments in unaffiliated securitiesA | (3,797,309 | ) | (17,072,273 | ) | ||||||||
Foreign currency transactions | 40,679 | - | ||||||||||
Futures contracts | 2,565,092 | - | ||||||||||
Change in net unrealized appreciation (depreciation) of: | ||||||||||||
Investments in unaffiliated securitiesB | (14,263,750 | ) | (31,753,676 | ) | ||||||||
Foreign currency transactions | 33,316 | - | ||||||||||
Futures contracts | (1,967,670 | ) | - | |||||||||
|
|
|
| |||||||||
Net (loss) from investments | (17,389,642 | ) | (48,825,949 | ) | ||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | $ | 17,777,409 | $ | 12,643,278 | ||||||||
|
|
|
| |||||||||
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
26
American Beacon FundsSM
Statements of Changes in Net Assets
SiM High Yield Opportunities Fund | Sound Point Floating Rate Income Fund | |||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||||||||||||||
Operations: |
| |||||||||||||||||||||||||||
Net investment income | $ | 35,167,051 | $ | 70,683,646 | $ | 61,469,227 | $ | 75,888,985 | ||||||||||||||||||||
Net realized gain (loss) from investments in unaffiliated securities, foreign currency transactions, and futures contracts | (1,191,538 | ) | 3,252,838 | (17,072,273 | ) | (3,396,848 | ) | |||||||||||||||||||||
Change in net unrealized (depreciation) of investments in unaffiliated securities, foreign currency transactions, and futures contracts | (16,198,104 | ) | (15,494,279 | ) | (31,753,676 | ) | (7,128,886 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in net assets resulting from operations | 17,777,409 | 58,442,205 | 12,643,278 | 65,363,251 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Distributions to shareholders: |
| |||||||||||||||||||||||||||
Net investment income: | ||||||||||||||||||||||||||||
Institutional Class | - | (21,073,065 | ) | - | (15,197,926 | ) | ||||||||||||||||||||||
Y Class | - | (35,799,953 | ) | - | (41,992,309 | ) | ||||||||||||||||||||||
Investor Class | - | (5,903,365 | ) | - | (14,184,672 | ) | ||||||||||||||||||||||
A Class | - | (2,911,855 | ) | - | (2,073,340 | ) | ||||||||||||||||||||||
C Class | - | (3,125,031 | ) | - | (1,694,366 | ) | ||||||||||||||||||||||
SP Class | - | - | - | (37,275 | ) | |||||||||||||||||||||||
Net realized gain from investments: | ||||||||||||||||||||||||||||
Institutional Class | - | - | - | (653,654 | ) | |||||||||||||||||||||||
Y Class | - | - | - | (1,522,613 | ) | |||||||||||||||||||||||
Investor Class | - | - | - | (381,529 | ) | |||||||||||||||||||||||
A Class | - | - | - | (87,467 | ) | |||||||||||||||||||||||
C Class | - | - | - | (88,440 | ) | |||||||||||||||||||||||
SP Class | - | - | - | (2,075 | ) | |||||||||||||||||||||||
Total retained earnings:* | ||||||||||||||||||||||||||||
Institutional Class | (12,306,332 | ) | - | (13,262,861 | ) | - | ||||||||||||||||||||||
Y Class | (17,991,598 | ) | - | (39,985,007 | ) | - | ||||||||||||||||||||||
Investor Class | (2,466,737 | ) | - | (14,907,786 | ) | - | ||||||||||||||||||||||
A Class | (885,996 | ) | - | (1,696,268 | ) | - | ||||||||||||||||||||||
C Class | (1,514,225 | ) | - | (1,552,453 | ) | - | ||||||||||||||||||||||
SP Class | - | - | (19,102 | ) | - | |||||||||||||||||||||||
Tax return of capital: | ||||||||||||||||||||||||||||
Institutional Class | - | (640,329 | ) | - | - | |||||||||||||||||||||||
Y Class | - | (1,009,412 | ) | - | - | |||||||||||||||||||||||
Investor Class | - | (149,749 | ) | - | - | |||||||||||||||||||||||
A Class | - | (64,791 | ) | - | - | |||||||||||||||||||||||
C Class | - | (87,259 | ) | - | - | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net distributions to shareholders | (35,164,888 | ) | (70,764,809 | ) | (71,423,477 | ) | (77,915,666 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Capital share transactions (Note 10): |
| |||||||||||||||||||||||||||
Proceeds from sales of shares | 316,275,672 | 551,075,868 | 762,520,107 | 1,822,617,349 | ||||||||||||||||||||||||
Reinvestment of dividends and distributions | 31,110,890 | 64,533,431 | 67,984,103 | 73,930,335 | ||||||||||||||||||||||||
Cost of shares redeemed | (318,538,843 | ) | (644,287,572 | ) | (1,227,442,495 | ) | (506,619,445 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 28,847,719 | (28,678,273 | ) | (396,938,285 | ) | 1,389,928,239 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets | 11,460,240 | (41,000,877 | ) | (455,718,484 | ) | 1,377,375,824 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net assets: |
| |||||||||||||||||||||||||||
Beginning of period | 1,162,174,987 | 1,203,175,864 | 2,310,386,421 | 933,010,597 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
End of period | $ | 1,173,635,227 | $ | 1,162,174,987 | $ | 1,854,667,937 | $ | 2,310,386,421 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
* Distributions from net investment income and net realized capital gains are combined for the period ended February 28, 2019. See Note 1 in the Notes to Financial Statements for more information regarding new accounting pronouncements. |
|
See accompanying notes
27
American Beacon FundsSM
February 28, 2019 (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, as amended (the “Act”), as diversified,open-end management investment companies. As of February 28, 2019, the Trust consists of thirty-three active series, two of which are presented in this filing: American Beacon SiM High Yield Opportunities Fund and American Beacon Sound Point Floating Rate Income Fund (collectively, the “Funds” and each individually a “Fund”). The remainingthirty-one active series are reported in separate filings.
American Beacon Advisors, Inc. (the “Manager”) is a Delaware corporation and a wholly-owned subsidiary of Resolute Investment Managers, Inc. (“RIM”) organized in 1986 to provide business management, advisory, administrative, and asset management consulting services to the Trust and other investors. The Manager is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). RIM is, in turn, a wholly-owned subsidiary of Resolute Acquisition, Inc., which is a wholly-owned subsidiary of Resolute Topco, Inc., a wholly-owned subsidiary of Resolute Investment Holdings, LLC (“RIH”). RIH is owned primarily by Kelso Investment Associates VIII, L.P., KEP VI, LLC and Estancia Capital Partners L.P., investment funds affiliated with Kelso & Company, L.P. (“Kelso”) or Estancia Capital Management, LLC (“Estancia”), which are private equity firms.
Recently Adopted Accounting Pronouncements
In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2017-08,Premium Amortization of Purchased Callable Debt Securities. The amendments in the ASU shorten the premium amortization period on a purchased callable debt security from the security’s contractual life to the earliest call date. It is anticipated that this change will enhance disclosures by reducing losses recognized when a security is called on an earlier date. This ASU is effective for fiscal years beginning after December 15, 2018. The Manager continues to evaluate the impact this ASU will have on the financial statements and other disclosures.
In August 2018, the FASB issued ASU2018-13,Fair Value Measurement (“Topic 820”). The amendments in the ASU impact disclosure requirements for fair value measurement. It is anticipated that this change will enhance the effectiveness of disclosures in the notes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and can include the entire standard or certain provisions that exclude or amend disclosures. For the period ended February 28, 2019, the Funds have chosen to adopt the standard. The adoption of this ASU guidance did not have a material impact on the financial statements and other disclosures.
In August 2018, the U.S. Securities and Exchange Commission (“SEC”) adopted amendments to certain disclosure requirements in Securities Act ReleaseNo. 33-10532, Disclosure Update and Simplification, which is intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. Effective with the current reporting period, the Funds adopted the amendments with the impacts being that the Funds are no longer required to present components of distributable earnings on the Statements of Assets and Liabilities or the sources of distributable earnings and the amount of undistributed net investment income on the Statements of Changes in Net Assets.
28
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Class Disclosure
Each Fund has multiple classes of shares designed to meet the needs of different groups of investors; however, not all of the Funds offer all classes. The following table sets forth the differences amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
Institutional | Large Institutional investors - sold directly or through intermediary channels. | $ | 250,000 | |||
Y Class | Large institutional retirement plan investors - sold directly or through intermediary channels. | $ | 100,000 | |||
Investor | All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors - sold directly through intermediary channels. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include afront-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 | |||
SP Class | Retail investors who invest directly through a financial intermediary such as a broker, or through employee directed benefit plans and were formerly shareholders of the Investor Class Shares of the Sound Point Floating Rate Income Fund prior to its reorganization. | $ | 1,000 |
Each class offered by the Trust has equal rights as to assets and voting privileges. Income andnon-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, andsub-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 FASB Accounting Standards 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 theex-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. Realized 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 Statements 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 Statements of Operations. Paydown gains (losses) on mortgage-related and other asset-backed securities, if any, are recorded as components of interest income on the
29
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
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 anon-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 fornon-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.
Currency Translation
All assets and liabilities initially expressed in foreign currency values are converted into U.S. dollar values at the mean of the bid and ask prices of such currencies against U.S. dollars as last quoted by a recognized dealer. Income, expenses, and purchases and sales of investments are translated into U.S. dollars at the rate of the exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and is reported with all other foreign currency gains and losses on the Funds’ Statements of Operations.
Distributions to Shareholders
Distributions, if any, of net investment income are generally paid at least annually and recorded on theex-dividend date. Distributions, if any, of net realized capital gains are generally paid at least annually and recorded on theex-dividend date. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Funds may designate earnings and profits distributed to shareholders on the redemption of shares.
Allocation of Income, Trust Expenses, Gains, and Losses
Investment income, realized and unrealized gains and losses from investments of the Funds are allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Funds. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust, American Beacon Select Funds, American Beacon Institutional Funds Trust, American Beacon Sound Point Enhanced Income Fund, and American Beacon Apollo Total Return Fund (the “Trusts”) will be allocated among and charged to the assets of the Funds on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Funds or nature of the services performed and relative applicability to the Funds.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.
30
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
2. Transactions with Affiliates
Management and InvestmentSub-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 the Funds’ average daily net assets that is calculated and accrued daily according to the following schedule:
First $5 billion | 0.35 | % | ||
Next $5 billion | 0.325 | % | ||
Next $10 billion | 0.30 | % | ||
Over $20 billion | 0.275 | % |
The Trust, on behalf of the Funds, and the Manager have entered into an Investment Advisory Agreement with the followingSub-Advisors pursuant to which each Fund has agreed to pay an annualizedsub-advisory fee that is calculated and accrued daily based on the applicable Fund’s average daily net assets according to the following schedules:
Strategic Income Management, LLC
First $250 million | 0.45 | % | ||
Next $250 million | 0.40 | % | ||
Next $500 million | 0.35 | % | ||
Over $1 billion | 0.30 | % |
Sound Point Capital Management, LP
All Assets | 0.35 | % |
The Management andSub-Advisory Fees paid by the Funds for the period ended February 28, 2019 were as follows:
SiM High Yield Opportunities Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 1,985,153 | ||||||||
Sub-Advisor Fees | 0.37 | % | 2,134,852 | |||||||||
|
|
|
| |||||||||
Total | 0.72 | % | $ | 4,120,005 | ||||||||
|
|
|
|
Sound Point Floating Rate Income Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 3,854,165 | ||||||||
Sub-Advisor Fees | 0.35 | % | 3,853,881 | |||||||||
|
|
|
| |||||||||
Total | 0.70 | % | $ | 7,708,046 | ||||||||
|
|
|
|
Distribution Plans
The Funds, except for the A, C, and SP Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule12b-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.
31
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule12b-1 under the Act for the A, C, and SP Classes of the Funds. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the A and SP 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, 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, and up to 0.375% of the average daily net assets of the Investor Class of the Funds.
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 certainnon-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 February 28, 2019, thesub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
SiM High Yield Opportunities | $ | 400,587 | ||
Sound Point Floating Rate Income | 609,990 |
As of February 28, 2019, the Funds owed the Manager the following reimbursement ofsub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
SiM High Yield Opportunities | $ | 63,821 | ||
Sound Point Floating Rate Income | 77,973 |
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 February 28, 2019, the Manager earned fees on the Funds’ direct investments in the USG Select Fund as shown below:
Fund | Direct Investments in USG Select Fund | |||
SiM High Yield Opportunities | $ | 5,271 | ||
Sound Point Floating Rate Income | 136,008 |
32
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Interfund Credit Facility
Pursuant to an exemptive order issued by the 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 February 28, 2019, the SiM High Yield Opportunities Fund borrowed on average $9,070,975 for 2 days at an average interest rate of 2.96% with interest charges of $1,432. These amounts are recorded as “Other expenses” in the Statements of Operations. For the period ended February 28, 2019, the Sound Point Floating Rate Income 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 Funds to the extent that total operating expenses exceed the Funds’ expense cap. During the period ended February 28, 2019, the Manager waived and/or reimbursed expenses as follows:
Expense Cap | Expiration of Reimbursed Expenses | |||||||||||||||||
Fund | Class | 9/1/2018 - 2/28/2019 | Reimbursed Expenses | (Recouped) Expenses | ||||||||||||||
SiM High Yield Opportunities | Institutional | 0.84 | % | $ | - | $ | (17,328 | ) | 2022 | |||||||||
Sound Point Floating Rate Income | Institutional | 0.84 | % | - | (59,475 | ) | 2022 | |||||||||||
Sound Point Floating Rate Income | SP | N/A | - | (370 | ) | 2022 |
Of these amounts, $2,289 was disclosed as a receivable from the Manager on the Statements of Assets and Liabilities at February 28, 2019 for the SiM High Yield Opportunities Fund and $8,280 was disclosed as a payable to the Manager on the Statements of Assets and Liabilities at February 28, 2019 for the Sound Point Floating Rate Income Fund.
The Funds have adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Funds for any contractual 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 2022. The Funds did not record a liability for potential reimbursements due to the current assessment that reimbursements are unlikely. The carryover of excess expenses potentially reimbursable to the Manager, but not recorded as a liability are as follows:
Fund | Recouped Expenses | Excess Expense Carryover | Expired Expense Carryover | Expiration of Reimbursed Expenses | ||||||||||||
SiM High Yield Opportunities | $ | 17,328 | $ | 157,803 | $ | - | 2019 | |||||||||
SiM High Yield Opportunities | - | 44,356 | - | 2020 | ||||||||||||
SiM High Yield Opportunities | - | 108,508 | - | 2021 | ||||||||||||
Sound Point Floating Rate Income | 59,845 | (1) | 71,569 | - | 2019 | |||||||||||
Sound Point Floating Rate Income | - | 14,168 | - | 2020 |
(1) | Of this amount, $59,475 and $370 relate to Institutional and SP classes, respectively. |
33
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Sales Commissions
The Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), 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, 2019, RID collected $9,759 and $21,900 for the SiM High Yield Opportunities Fund and Sound Point Floating Rate Income 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 February 28, 2019, CDSC fees of $2,443 and $6,704 were collected for the Class A Shares of SiM High Yield Opportunities Fund and Sound Point Floating Rate Income Fund, respectively.
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, 2019, CDSC fees of $2,539 and $19,179 were collected for the Class C Shares of SiM High Yield Opportunities Fund and Sound Point Floating Rate Income Fund, respectively.
Trustee Fees and Expenses
As compensation for their service to the Trust’s, 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 Chair receives an additional annual retainer of $50,000 as well as a $2,500 fee each quarter for attendance at the committee meetings. The Chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each fund of the Trusts according to its respective net assets.
3. Security Valuation and Fair Value Measurements
The price of the Fund’s shares is based on its net asset value (“NAV”) per share. The Fund’s NAV is computed by adding total assets, subtracting all the Fund’s liabilities, and dividing the result by the total number of shares outstanding.
The NAV of each class of the Fund’s shares is determined based on a pro rata allocation of the Fund’s investment income, expenses and total capital gains and losses. The Fund’s NAV per share is determined each business day as of the regular close of trading on the New York Stock Exchange (“NYSE” or “Exchange”), which is typically 4:00 p.m. Eastern Time (“ET”). However, if trading on the NYSE closes at a time other than 4:00 p.m. ET, the Fund’s NAV per share typically would still be determined as of the regular close of trading on the NYSE. The Fund does not price its shares on days that the NYSE is closed. Foreign exchanges may permit trading in foreign securities on days when the Fund is not open for business, which may result in the value of the Fund’s portfolio investments being affected at a time when you are unable to buy or sell shares.
34
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Equity securities, including shares ofclosed-end funds and exchange-traded funds (“ETFs”), are valued at the last sale price or official closing price taken from the primary exchange in which each security trades. Investments in other mutual funds are valued at the closing NAV per share on the day of valuation. Debt securities are valued at bid quotes from broker/dealers or evaluated bid prices from pricing services, who may consider a number of inputs and factors, such as prices of comparable securities, yield curves, spreads, credit ratings, coupon rates, maturity, default rates, and underlying collateral. Futures are valued based on their daily settlement prices. Exchange-traded andover-the-counter (“OTC”) options are valued at the last sale price. Options with no last sale for the day are priced at mid quote. Swaps are valued at evaluated mid prices from pricing services.
The valuation of securities traded on foreign markets and certain fixed income securities will generally be based on prices determined as of the earlier closing time of the markets on which they primarily trade unless a significant event has occurred. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. ET.
Securities may be valued at fair value, as determined in good faith and pursuant to procedures approved by the Board, under certain limited circumstances. For example, fair value pricing will be used when market quotations are not readily available or reliable, as determined by the Manager, such as when (i) trading for a security is restricted or stopped; (ii) a security’s trading market is closed (other than customary closings); or (iii) a security has beende-listed from a national exchange. A security with limited market liquidity may require fair value pricing if the Manager determines that the available price does not reflect the security’s true market value. In addition, if a significant event that the Manager determines to affect the value of one or more securities held by the Fund occurs after the close of a related exchange but before the determination of the Fund’s NAV, fair value pricing may be used on the affected security or securities. Securities of small-capitalization companies are also more likely to require a fair value determination using these procedures because they are more thinly traded and less liquid than the securities of larger-capitalization companies. The Fund may fair value securities as a result of significant events occurring after the close of the foreign markets in which the Fund invests as described below. In addition, the Fund may invest in illiquid securities requiring these procedures.
The Fund may use fair value pricing for securities primarily traded innon-U.S. markets because most foreign markets close well before the Fund’s pricing time of 4:00 p.m. ET. 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. If the Manager determines that the last quoted prices ofnon-U.S. securities will, in its judgment, materially affect the value of some or all its portfolio securities, the Manager can 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. These securities are fair valued using a pricing service, using methods approved by the Board, that 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 Depositary Receipts (“ADRs”) and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but the 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.
Attempts to determine the fair value of securities introduce an element of subjectivity to the pricing of securities. As a result, the price of a security determined through fair valuation techniques may differ from the price quoted or published by other sources and may not accurately reflect the market value of the security when trading resumes. If a reliable market quotation becomes available for a security formerly valued through fair valuation techniques, the Manager compares the new market quotation to the fair value price to evaluate the effectiveness of the Fund’s fair valuation procedures. If any significant discrepancies are found, the Manager may adjust the Fund’s fair valuation procedures.
35
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Valuation Inputs
Various inputs may be used to determine the fair value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1 | - | Quoted prices in active markets for identical securities. | ||
Level 2 | - | Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. | ||
Level 3 | - | Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment. |
Level 1 and Level 2 trading assets and trading liabilities, at fair value
Common stocks, ETFs, 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. Securities using these valuation adjustments are categorized as Level 2 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are generally categorized as Level 2 of the fair value hierarchy.
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, andnon-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 aremarked-to-market daily until settlement at the forward settlement date and are categorized as Level 2 of the fair value hierarchy.
Investments in registeredopen-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
Level 3 trading assets and trading liabilities, at fair value
The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of the fair value hierarchy are as follows.
Securities and other assets for which market quotes are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction and may be categorized as Level 3 of the fair value hierarchy.
Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the Exchange close, that materially affect the values of the Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade, do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Manager the responsibility for monitoring significant events that may materially affect the fair values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should bere-evaluated in light of such significant events.
36
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
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
Bank Loans and Senior Loans
Loans are typically administered by a bank, insurance company, finance company or other financial institution (the “agent”) for a lending syndicate of financial institutions. In a typical loan, the agent administers the terms of the loan agreement and is responsible for the collection of principal and interest and fee payments from the borrower and the apportionment of these payments to all lenders that are parties to the loan agreement. In addition, an institution (which may be the agent) may hold collateral on behalf of the lenders. Typically, under loan agreements, the agent is given broad authority in monitoring the borrower’s performance and is obligated to use the same care it would use in the management of its own property. In asserting rights against a borrower, the Funds normally will be dependent on the willingness of the lead bank to assert these rights, or upon a vote of all the lenders to authorize the action. If an agent becomes insolvent, or has a receiver, conservator, or similar official appointed for it by the appropriate regulatory authority, or becomes a debtor in a bankruptcy proceeding, the agent’s appointment may be terminated and a successor agent would be appointed. If an appropriate regulator or court determines that assets held by the agent for the benefit of purchasers of loans are subject to the claims of the agent’s general or secured creditors, the Funds might incur certain costs and delays in realizing payment on a loan or suffer a loss of principal and/or interest. The Funds may be subject to similar risks when it buys a participation interest or an assignment from an intermediary.
Bank loans are fixed and floating rate loans arranged through private negotiations between a company or anon-U.S. government and one or more financial institutions (lenders). The Funds may invest in senior loans, which are floating rate loans that hold a senior position in the capital structure of U.S. and foreign corporations, partnerships or other business entities. Under normal circumstances, senior loans have priority of claim ahead of other obligations of a borrower in the event of liquidation. Senior loans may be collateralized or uncollateralized. They pay interest at rates that float above, or are adjusted periodically based on, a benchmark that reflects current interest rates.
The Funds may invest in such loans in the form of participations in loans and assignments of all or a portion of loans from third parties. In connection with purchasing participations in such instruments, the Funds generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loan, nor any rights ofset-off against the borrower, and the Funds may not benefit directly from any collateral supporting the loan in which it has purchased the participation. When the Funds purchases assignments from lenders, the Funds will acquire direct rights against the borrower on the loan. A Fund may acquire bank and senior loan assignments or participations. The purchaser of an assignment typically succeeds to all the rights and obligations of the assigning institution and becomes a lender under the credit agreement with respect to the debt obligation; however, the purchaser’s rights can be more restricted than those of the assigning institution, and, in
37
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
any event, the Funds may not be able to unilaterally enforce all rights and remedies under the loan and with regard to any associated collateral. A participation typically results in a contractual relationship only with the institution participating out the interest, not with the borrower. In purchasing participations, the Funds generally will have no right to enforce compliance by the borrower with the terms of the loan agreement against the borrower, and the Funds may not directly benefit from the collateral supporting the debt obligation in which it has purchased the participation. As a result, a Fund will be exposed to the credit risk of both the borrower and the institution selling the participation.
The Funds earn a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is included in “Interest income” on the Statements of Operations, is recognized ratably over the commitment period. Unfunded floating rate loan interests aremarked-to-market daily, and any unrealized appreciation (depreciation) is included on the Statements of Assets and Liabilities and Statements of Operations.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or 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.
Convertible Securities
Convertible securities include corporate bonds, notes, preferred stock or other securities that may be converted into or exchanged for a prescribed amount of common stock of the same or a different issuer within a particular period of time at a specified price or formula. A convertible security entitles the holder to receive interest paid or accrued on debt or dividends paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. While no securities investment is without some risk, investments in convertible securities generally entail less risk than the issuer’s common stock, although the extent to which such risk is reduced depends in large measure upon the degree to which the convertible security sells above its value as a fixed income security. The market value of convertible securities tends to decline as interest rates increase and, conversely, to increase as interest rates decline. While convertible securities generally offer lower interest or dividend yields thannon-convertible debt securities of similar quality, they do enable the investor to benefit from increases in the market price of the underlying common stock. Holders of convertible securities have a claim on the assets of the issuer prior to the common stockholders, but may be subordinated to holders of similarnon-convertible securities of the same issuer. Because of the conversion feature, certain convertible securities may be considered equity equivalents.
Corporate Debt and Other Fixed-Income Securities
Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause a Fund’s net asset value to likewise decrease, and vice versa. How specific fixed-income securities may react to changes in interest rates will depend on specific characteristics of each security. Fixed-income securities are also subject to credit risk, which is the risk that the credit strength of an issuer of a fixed-income security will weaken and/or that the issuer will be unable to make timely principal and interest payments and that the security may go into default.
38
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Delayed Funding Loans and Revolving Credit Facilities
A Fund may enter into, or acquire participations in, delayed funding loans and revolving credit facilities. Delayed funding loans and revolving credit facilities are borrowing arrangements in which the lender agrees to make loans up to a maximum amount upon demand by the borrower during a specific term. A revolving credit facility differs from a delayed funding loan in that as the borrower repays the loan, an amount equal to the repayment may be borrowed again during the term of the revolving credit facility. Delayed funding loans and revolving credit facilities usually provide for floating or variable rates of interest. These commitments may have the effect of requiring a Fund to increase its investment in a company at a time when it might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that such amounts will be repaid). To the extent that a Fund is committed to advance additional funds, it will at all times segregate or “earmark” assets, determined to be liquid in accordance with procedures established by the Board, in an amount sufficient to meet such commitments.
A Fund may invest in delayed funding loans and revolving credit facilities with credit quality comparable to that of issuers of its securities investments. Delayed funding loans and revolving credit facilities may be subject to restrictions on transfer, and only limited opportunities may exist to resell such instruments. As a result, a Fund may be unable to sell such investments at an opportune time or may have to resell them at less than fair market value.
Floating Rate Loan Interest
The Funds may invest in floating rate loan interests. The floating rate loan interests held by the Funds are typically issued to companies (the “borrower”) by banks, other financial institutions, and privately and publicly offered corporations (the “lender”). Floating rate loan interests are generallynon-investment grade, often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Funds may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loan interests may include fully funded term loans or revolving lines of credit. Floating rate loan interests are typically senior in the corporate capital structure of the borrower. Floating rate loan interests generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally the lending rate offered by one or more European banks, such as the London Interbank Offered Rate (“LIBOR”), the prime rate offered by one or more U.S. banks or the certificate of deposit rate. Floating rate loan interests may involve foreign borrowers, and investments may be denominated in foreign currencies. The Funds considers these investments to be investments in debt securities for purposes of its investment policies.
When the Funds purchase a floating rate loan interest it may receive a facility fee and when it sells a floating rate loan interest, it may pay a facility fee. On an ongoing basis, the Funds may receive a commitment fee based on the undrawn portion of the underlying line of credit amount of a floating rate loan interest. Facility and commitment fees are typically amortized to income over the term of the loan or term of the commitment, respectively. Consent and amendment fees are recorded to income as earned. Prepayment penalty fees, which may be received by the Funds upon the prepayment of a floating rate loan interest by a borrower, are recorded as realized gains. The Funds may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.
Floating rate loan interests are usually freely callable at the borrower’s option. The Funds may invest in such loans in the form of participations in loans (“Participations”) or assignments (“Assignments”) of all or a portion of loans from third parties. Participations typically will result in the Funds having a contractual relationship only with the lender, not with the borrower. The Funds will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, the Funds generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of offset against the borrower, and the Funds may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, the Funds will assume the credit risk of both the borrower
39
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
and the lender that is selling the Participation. The Funds’ investment in Participations involves the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, the Funds may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower. Assignments typically result in the Funds having a direct contractual relationship with the borrower, and the Funds may enforce compliance by the borrower with the terms of the loan agreement.
In connection with floating rate loan interests, the Funds may also enter into unfunded floating rate loan interests (“commitments”). In connection with these commitments, the Funds earns a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is included in “Interest income” on the Statement of Operations, is recognized ratably over the commitment period. Unfunded floating rate loan interests aremarked-to-market daily, and any unrealized appreciation (depreciation) is included on the Statements of Assets and Liabilities and Statements of Operations.
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 benon-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 innon-dollar securities; (d) debt obligations and other fixed income securities of foreign corporate issuers (both dollar andnon-dollar denominated); and (e) U.S. corporate issuers (both Eurodollar andnon-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 andnon-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.
40
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Illiquid and Restricted Securities
The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities may be sold privately, but are required to be registered or exempted from such registration before being sold to the public. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933 (the “Securities Act”). Illiquid securities have included securities that have not been registered under the Securities Act, securities that are otherwise not readily marketable, and repurchase agreements having a remaining maturity of longer than seven calendar days. Disposal of both illiquid and restricted securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted securities outstanding during the period ended February 28, 2019 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.
Inflation-Indexed Bonds
The Funds may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted based on the rate of inflation. The interest rate on these bonds is generally fixed at issuance at a rate lower than typical bonds. Over the life of an inflation-indexed bond, however, interest will be paid based on principal value, which is adjusted for inflation. Any increase or decrease in the principal amount of an inflation-indexed bond will be included as interest income on the Statements of Operations, even though investors do not receive their principal until maturity.
Other Investment Company Securities and Other Exchange-Traded Products
The Funds may invest in shares of other investment companies, includingopen-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 asub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Funds become a shareholder of that investment company. As a result, the Funds’ shareholders indirectly will bear the Funds’ proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Funds’ shareholders directly bear in connection with the Funds’ own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Funds in their Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
Preferred Stock
A preferred stock blends the characteristics of a bond and common stock. It can offer the higher yield of a bond and has priority over common stock in equity ownership, but does not have the seniority of a bond and its participation in the issuer’s growth may be limited. Preferred stock generally has preference over common stock in the receipt of dividends and in any residual assets after payment to creditors should the issuer be dissolved. Although the dividend is set at a fixed or variable rate, in some circumstances it can be changed or omitted by the issuer. Preferred stocks are subject to the risks associated with other types of equity securities, as well as additional risks, such as credit risk, interest rate risk, potentially greater volatility and risks related to deferral,non-cumulative dividends, subordination, liquidity, limited voting rights, and special redemption rights.
41
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Payment-In-Kind Securities
The Funds may invest inpayment-in-kind securities (“PIKs”). PIKs give the issuer the option at each interest payment date of making interest payments in either cash or additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a dirty price) and require apro-rata adjustment from the “Unrealized appreciation (depreciation) of investments” to “Dividend and interest receivable” in the Statements of Assets and Liabilities.
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 Fundsre-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, there-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, are-characterization will be made the following year.
5. Financial Derivative Instruments
The Funds may utilize derivative instruments to gain market exposure on cash balances to hedge foreign currency exposure 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 February 28, 2019, the SiM High Yield Opportunities Fund entered into futures contracts primarily for hedging and 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 February 28, 2019 | |||
SiM High Yield Opportunities | 505 |
42
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure(1):
SiM High Yield Opportunities Fund
Fair values of financial instruments on the Statements of Assets and Liabilities as of February 28, 2019: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | $ | - | $ | 88,408 | $ | - | $ | - | $ | - | $ | 88,408 | |||||||||||||||||||||||||||||||||||||||||||
Liabilities: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Payable for variation margin from open futures contracts(2) | $ | - | $ | (950,214 | ) | $ | - | $ | - | $ | - | $ | (950,214 | ) | |||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statements of Operations as of February 28, 2019: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | - | $ | 2,565,092 | $ | - | $ | - | $ | - | $ | 2,565,092 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | - | $ | (1,967,670 | ) | $ | - | $ | - | $ | - | $ | (1,967,670 | ) |
(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.
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, February 28, 2019.
SiM High Yield Opportunities Fund
Offsetting of Financial and Derivative Assets as of February 28, 2019: |
| |||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts | $ | 88,408 | $ | 950,214 | ||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 88,408 | $ | 950,214 | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (88,408 | ) | $ | (950,214 | ) | ||||||
|
|
|
|
43
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
6. Principal Risks
Investing in the Funds may involve certain risks including, but not limited to, those described below.
Callable Securities Risk
The Funds may invest in fixed-income securities with call features. A call feature allows the issuer of the security to redeem or call the security prior to its stated maturity date. In periods of falling interest rates, issuers may be more likely to call in securities that are paying higher coupon rates than prevailing interest rates. In the event of a call the Funds would lose the income that would have been earned to maturity on that security, and the proceeds received by the Funds may be invested in securities paying lower coupon rates and may not benefit from any increase in value that might otherwise result from declining interest rates.
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. A decline in the credit rating of an individual security held by a Fund may have an adverse impact on its price and make it difficult for a Fund to sell it. Ratings represent a rating agency’s opinion regarding the quality of the security and are not a guarantee of quality. Rating agencies might not always change their credit rating on an issuer or security in a timely manner to reflect events that could affect the issuer’s ability to make timely payments on its obligations. Credit risk is typically greater for securities with ratings that are below investment grade.
Currency Risk
The Funds may have exposure to foreign currencies by making direct investments innon-U.S. currencies or in securities denominated innon-U.S. currencies, purchasing or selling forward foreign currency exchange contracts innon-U.S. currencies, including bothnon-deliverable forwards (“NDFs”) and deliverable forwards,non-U.S. currency futures contracts, options (includingnon-deliverable options (“NDOs”) onnon-U.S. currencies andnon-U.S. currency futures) and swaps for cross-currency investments. Foreign currencies may decline, in value relative to the U.S. dollar and other currencies and thereby affect the Funds’ investments in foreign(non-U.S.) currencies.
Equity Investments 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.
44
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the 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).
Floating Rate Securities Risk
The coupons on certain fixed income securities in which the Funds may invest are not fixed and may fluctuate based upon changes in market rates. The coupon on a floating rate security is generally based on an interest rate such as a money-market index, LIBOR or a Treasury bill rate. Such securities are subject to interest rate risk and 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. As short-term interest rates decline, the coupons on floating rate securities typically decrease. Alternatively, during periods of rising interest rates, changes in the coupons of floating rate securities may lag behind changes in market rates or may have limits on the maximum increases in the coupon rates. The value of floating rate securities may decline if their coupons 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. Floating rate obligations are less effective than fixed rate obligations at locking in a particular yield and are subject to credit risk.
High-Yield Securities Risk
Investing in high-yield, below investment-grade securities (commonly referred to as “junk bonds”) generally involves significantly greater risks of loss of your money than an investment in investment grade securities. High-yield debt securities may fluctuate more widely in price and yield and may fall in price when the economy is weak or expected to become weak. High-yield securities are considered to be speculative with respect to an issuer’s ability to pay interest and principal and carry a greater risk that the issuers of lower-rated securities will default on the timely payment of principal and interest. Below investment grade securities may experience greater price volatility and less liquidity than investment grade securities.
Illiquid and Restricted Securities Risk
Securities not registered in the U.S. under the Securities Act of 1933, as amended (the “Securities Act”), including Rule 144A securities, are restricted as to their resale. Such securities may not be listed on an exchange and may have no active trading market. They may be more difficult to purchase or sell at an advantageous time or price because such securities may not be readily marketable in broad public markets. The Funds may not be able to sell a restricted security when thesub-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
Investments in fixed-income securities or derivatives that are influenced by interest rates are subject to interest rate risk. The value of the Funds’ fixed-income investments typically will fall when interest rates rise. The Funds may be particularly sensitive to changes in interest rates if it invests in debt securities with intermediate and
45
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
long terms to maturity. Debt securities with longer maturities tend to be more sensitive to changes in interest rates, usually making them more volatile than debt securities with shorter durations. For example, if a bond has a duration of four years, a 1% increase in interest rates could be expected to result in a 4% decrease in the value of the bond. Yields of debt securities will fluctuate over time. Following the financial crisis that started in 2008, the Federal Reserve attempted to stabilize the economy and support the economic recovery by keeping the federal funds rate (the interest rate at which depository institutions lend reserve balances to each other overnight) at or near zero percent. 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 significantly and/or rapidly, potentially resulting insubstantial losses to the Fund. During periods of very low or negative interest rates, the Funds may be unable to maintain positive returns. Certain European countries and Japan have recently experienced negative interest rates on deposits and debt securities have traded at negative yields. Negative interest rates may become more prevalent among non-U.S. issuers, and potentially within the United States. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund performance to the extent the Funds are exposed to such interest rates.
Liquidity Risk
When there is little or no active trading market for a specific security it can become more difficult to purchase or sell the securities at or near their perceived value. During such periods, certain investments held by the Fund may be difficult to sell or other investments may be difficult to purchase at favorable times or prices. As a result, the Fund may have to lower the price on certain securities that it is trying to sell, sell other securities instead or forgo an investment opportunity, any of which could have a negative effect on Fund management or performance. Redemptions by a few large investors in the Fund at such times may have a significant adverse effect on the Fund’s NAV and remaining Fund shareholders. In addition, the market-making capacity of dealers in certain types of securities has been reduced in recent years, in part as a result of structural and regulatory changes, such as fewer proprietary trading desks and increased regulatory capital requirements for broker-dealers. Further, many broker-dealers have reduced their inventory of certain debt securities. This could negatively affect the Fund’s ability to buy or sell debt securities and increase the related volatility and trading costs. The Fund may lose money if it is forced to sell certain investments at unfavorable prices to meet redemption requests or other cash needs.
Loan Interests Risk
Unlike publicly traded common stocks which trade on national exchanges, there is no central place or exchange for loans, including bank loans and senior loans, to trade. Loans trade in anover-the-counter market, and confirmation and settlement, which are effected through standardized procedures and documentation, may take significantly longer than seven days to complete. Extended trade settlement periods may, in unusual market conditions with a high volume of shareholder redemptions, present risk to shareholders regarding a Fund’s ability to pay redemption proceeds within the allowable time periods stated in its prospectus. The secondary market for floating rate loans also may be subject to irregular trading activity and wide bid/ask spreads. The lack of an active trading market for certain loans may impair the ability of a Fund to sell its loan interests at a time when it may otherwise be desirable to do so or may require a Fund to sell them at prices that are less than what a Fund regards as their fair market value and may make it difficult to value such loans. Interest in loans made to finance highly leveraged companies or transactions, such as corporate acquisitions, may be especially vulnerable to adverse changes in economic or market conditions. When a Fund’s loan interest is a participation, the Fund is subject to the risk that the party selling the participation interest will not remit a Fund’s pro rata share of loan payments to the Fund, and the Fund may have less control over the exercise of remedies than the party selling the participation interest.
Market Risk
Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects. Conditions in the U.S. and many foreign economies have resulted, and may continue to result, in
46
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
certain 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 some cases, traditional market participants have been less willing to make a market in some types of debt instruments, which has affected the liquidity of those instruments. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Treasury, causing the prices of these securities to rise and the yields to decline. The reduced liquidity in fixed income and credit markets may negatively affect many issuers worldwide. 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. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations in ways that cannot necessarily be foreseen at the present time.
In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. In some countries where economic conditions are recovering, they are nevertheless perceived as still fragile. Withdrawal of government support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding, could adversely impact the value and liquidity of certain securities. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations, including changes in tax laws. The impact of new financial regulation legislation on the markets and the practical implications for market participants may not be fully known for some time. Regulatory changes are causing some financial services companies to exit long-standing lines of business, resulting in dislocations for other market participants. In addition, political and diplomatic events within the U.S. and abroad, such as the U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, the threat of a federal government shutdown and threats not to increase the federal government’s debt limit, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The U.S. government has recently reduced federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets’ expectations for changes in government policies are not borne out.
Changes in market conditions will not have the same impact on all types of securities. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact of a significant rate increase on various markets. For example, because investors may buy securities or other investments with borrowed money, a significant increase in interest rates may cause a decline in the markets for those investments. Because of the sharp decline in the worldwide price of oil, there is a concern that oil producing nations may withdraw significant assets now held in U.S. Treasuries, which could force a substantial increase in interest rates. Regulators have expressed concern that rate increases may cause investors to sell fixed income securities faster than the market can absorb them, contributing to price volatility. 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. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse. The precise details and the resulting impact of the United Kingdom’s vote to leave the European Union (“EU”), commonly referred to as “Brexit,” are not yet known. The effect on the United Kingdom’s economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are matters to be negotiated. The outcomes may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time, which could significantly adversely affect the value of the Fund’s investments in the United Kingdom and Europe.
47
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Other Investment Companies Risk
The Funds may invest in shares of other registered investment companies, including money market funds. To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses charged by the underlying funds in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, money market funds are subject to interest rate risk, credit risk, and market risk.
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.
Unrated Securities Risk
Because the Funds may purchase securities that are not rated by any rating organization, thesub-advisor, after assessing their credit quality, may internally assign ratings to certain of those securities in categories similar to those of rating organizations. Some unrated securities may not have an active trading market or may be difficult to value, which means a Fund might have difficulty selling them promptly at an acceptable price. Unrated securities may be subject to greater liquidity risk and price volatility.
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 February 28, 2019 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.
48
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
As of February 28, 2019 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) | ||||||||||||||||||||||||
SiM High Yield Opportunities | $ | 1,198,555,019 | $ | 15,937,119 | $ | (55,727,093 | ) | $ | (39,789,974 | ) | ||||||||||||||||||
Sound Point Floating Rate Income | 1,889,551,514 | 3,921,411 | (43,060,693 | ) | (39,139,282 | ) |
Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the Funds in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.
During the year ended August 31, 2018, the SiM High Yield Opportunities Fund utilized $257,037 long term post RIC MOD capital loss carryforwards. The Sound Point Floating Rate Income Fund had $10,997,192 in short-term and $1,394,882 in long-term 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 February 28, 2019 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Sales (non-U.S. Government Securities) | ||||||||||
SiM High Yield Opportunities | $ | 227,740,423 | $ | 191,898,315 | ||||||||
Sound Point Floating Rate Income | 687,718,742 | 853,673,836 |
A summary of the Funds’ transactions in the USG Select Fund for the period ended February 28, 2019 were as follows:
Fund | Type of Transaction | August 31, 2018 Shares/Fair Value | Purchases | Sales | February 28, 2019 Shares/Fair Value | Dividend Income | ||||||||||||||||||||||||||||||||||||
SiM High Yield Opportunities | Direct | $ | 13,065,359 | $ | 219,331,321 | $ | 222,201,386 | $ | 10,195,294 | $ | 112,690 | |||||||||||||||||||||||||||||||
Sound Point Floating Rate Income | Direct | 406,580,401 | 505,549,717 | 806,086,859 | 106,043,259 | 2,839,884 |
9. Borrowing Arrangements
Effective November 15, 2018 (the “Effective Date”), 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 $250 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 plus 1.25% per annum on amounts borrowed. Each of the Participating Funds will pay a closing fee of $100,000 on the Effective Date and a quarterly commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 14, 2019, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.
On the Effective Date, the Funds, along with certain other Participating Funds managed by the Manager, also 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
49
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
annum or (b) the Federal Funds rate plus 1.25% per annum on each outstanding loan. Each of the Participating Funds will pay a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 14, 2019 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 February 28, 2019, the Funds did not utilize this facility.
10. Capital Share Transactions
The tables below summarize the activity in capital shares for each Class of the Funds:
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
SiM High Yield Opportunities Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 9,957,895 | $ | 93,186,128 | 15,411,903 | $ | 148,250,877 | ||||||||||||||||||||||
Reinvestment of dividends | 1,133,376 | 10,568,988 | 2,106,104 | 20,276,450 | ||||||||||||||||||||||||
Shares redeemed | (8,580,376 | ) | (79,529,467 | ) | (14,382,218 | ) | (138,261,396 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 2,510,895 | $ | 24,225,649 | 3,135,789 | $ | 30,265,931 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
SiM High Yield Opportunities Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 21,763,821 | $ | 203,084,138 | 34,800,437 | $ | 335,555,442 | ||||||||||||||||||||||
Reinvestment of dividends | 1,723,984 | 16,063,499 | 3,434,577 | 33,017,264 | ||||||||||||||||||||||||
Shares redeemed | (20,235,278 | ) | (188,084,289 | ) | (36,151,317 | ) | (347,190,605 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 3,252,527 | $ | 31,063,348 | 2,083,697 | $ | 21,382,101 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
SiM High Yield Opportunities Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,460,728 | $ | 13,687,279 | 4,057,128 | $ | 39,070,118 | ||||||||||||||||||||||
Reinvestment of dividends | 252,703 | 2,348,872 | 605,205 | 5,805,700 | ||||||||||||||||||||||||
Shares redeemed | (2,618,940 | ) | (24,415,863 | ) | (7,313,779 | ) | (70,090,118 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (905,509 | ) | $ | (8,379,712 | ) | (2,651,446 | ) | $ | (25,214,300 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
SiM High Yield Opportunities Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 239,830 | $ | 2,242,490 | 2,478,582 | $ | 24,008,251 | ||||||||||||||||||||||
Reinvestment of dividends | 86,793 | 809,852 | 275,461 | 2,654,662 | ||||||||||||||||||||||||
Shares redeemed | (1,885,287 | ) | (17,451,891 | ) | (7,601,596 | ) | (73,416,572 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,558,664 | ) | $ | (14,399,549 | ) | (4,847,553 | ) | $ | (46,753,659 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
SiM High Yield Opportunities Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 434,223 | $ | 4,075,637 | 433,740 | $ | 4,191,180 | ||||||||||||||||||||||
Reinvestment of dividends | 140,887 | 1,319,679 | 287,554 | 2,779,355 | ||||||||||||||||||||||||
Shares redeemed | (968,417 | ) | (9,057,333 | ) | (1,585,023 | ) | (15,328,881 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (393,307 | ) | $ | (3,662,017 | ) | (863,729 | ) | $ | (8,358,346 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
50
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Sound Point Floating Rate Income Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 14,023,171 | $ | 142,687,191 | 20,598,612 | $ | 212,735,632 | ||||||||||||||||||||||
Reinvestment of dividends | 1,138,331 | 11,446,524 | 1,351,680 | 13,952,530 | ||||||||||||||||||||||||
Shares redeemed | (18,917,908 | ) | (190,574,564 | ) | (6,232,481 | ) | (64,334,923 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | (3,756,406 | ) | $ | (36,440,849 | ) | 15,717,811 | $ | 162,353,239 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Sound Point Floating Rate Income Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 42,038,504 | $ | 427,190,093 | 98,071,417 | $ | 1,013,780,487 | ||||||||||||||||||||||
Reinvestment of dividends | 3,837,838 | 38,622,559 | 4,036,837 | 41,673,333 | ||||||||||||||||||||||||
Shares redeemed | (65,631,791 | ) | (661,153,421 | ) | (28,536,670 | ) | (295,019,930 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | (19,755,449 | ) | $ | (195,340,769 | ) | 73,571,584 | $ | 760,433,890 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Sound Point Floating Rate Income Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 15,851,383 | $ | 161,207,566 | 50,083,235 | $ | 516,124,472 | ||||||||||||||||||||||
Reinvestment of dividends | 1,471,521 | 14,794,908 | 1,409,179 | 14,498,970 | ||||||||||||||||||||||||
Shares redeemed | (34,684,731 | ) | (347,831,667 | ) | (11,561,053 | ) | (118,971,050 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | (17,361,827 | ) | $ | (171,829,193 | ) | 39,931,361 | $ | 411,652,392 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Sound Point Floating Rate Income Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,265,947 | $ | 12,881,173 | 4,148,221 | $ | 42,863,294 | ||||||||||||||||||||||
Reinvestment of dividends | 167,663 | 1,690,139 | 208,376 | 2,150,545 | ||||||||||||||||||||||||
Shares redeemed | (1,817,016 | ) | (18,323,758 | ) | (1,755,335 | ) | (18,134,112 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | (383,406 | ) | $ | (3,752,446 | ) | 2,601,262 | $ | 26,879,727 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Sound Point Floating Rate Income Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,815,178 | $ | 18,516,174 | 3,553,532 | $ | 36,703,691 | ||||||||||||||||||||||
Reinvestment of dividends | 139,624 | 1,411,149 | 156,573 | 1,616,139 | ||||||||||||||||||||||||
Shares redeemed | (929,092 | ) | (9,388,970 | ) | (932,851 | ) | (9,636,871 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 1,025,710 | $ | 10,538,353 | 2,777,254 | $ | 28,682,959 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
SP Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Sound Point Floating Rate Income Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 3,721 | $ | 37,910 | 39,534 | $ | 409,773 | ||||||||||||||||||||||
Reinvestment of dividends | 1,863 | 18,824 | 3,754 | 38,818 | ||||||||||||||||||||||||
Shares redeemed | (16,946 | ) | (170,115 | ) | (50,521 | ) | (522,559 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (11,362 | ) | $ | (113,381 | ) | (7,233 | ) | $ | (73,968 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
11. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Funds’ financial statements through this date.
51
American Beacon SiM High Yield Opportunities FundSM
Financial Highlights
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.52 | $ | 9.61 | $ | 9.49 | $ | 9.43 | $ | 10.35 | $ | 10.16 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.29 | 0.59 | 0.57 | 0.59 | 0.57 | 0.64 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.13 | ) | (0.11 | ) | 0.13 | 0.05 | (0.65 | ) | 0.47 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.16 | 0.48 | 0.70 | 0.64 | (0.08 | ) | 1.11 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.29 | ) | (0.55 | ) | (0.53 | ) | (0.52 | ) | (0.55 | ) | (0.69 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.29 | ) | (0.23 | ) | ||||||||||||||||||||||||||||||||||||
Tax return of capital | - | (0.02 | )A | (0.05 | )A | (0.06 | )A | - | - | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.29 | ) | (0.57 | ) | (0.58 | ) | (0.58 | ) | (0.84 | ) | (0.92 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 9.39 | $ | 9.52 | $ | 9.61 | $ | 9.49 | $ | 9.43 | $ | 10.35 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 1.76 | %D | 5.13 | % | 7.51 | % | 7.28 | % | (0.78 | )% | 11.34 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 400,521,177 | $ | 382,074,042 | $ | 355,492,590 | $ | 419,036,240 | $ | 230,287,454 | $ | 75,388,828 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 0.83 | %E | 0.87 | % | 0.85 | % | 0.91 | % | 0.88 | % | 0.86 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 0.84 | %E | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | 0.84 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 6.33 | %E | 5.91 | % | 6.00 | % | 6.30 | % | 5.38 | % | 5.88 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 6.32 | %E | 5.94 | % | 6.01 | % | 6.37 | % | 5.41 | % | 5.90 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 40 | %D | 51 | % | 50 | % | 57 | % | 43 | % | 38 | % |
A | Tax return of capital is calculated based on outstanding shares at the time of distribution. |
B | Amount represents less than $0.01 per share. Effective December 29, 2016, the redemption fee was terminated by the Trust’s Board of Trustees. |
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
52
American Beacon SiM High Yield Opportunities FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.51 | $ | 9.60 | $ | 9.48 | $ | 9.42 | $ | 10.34 | $ | 10.14 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.29 | 0.59 | 0.58 | 0.59 | 0.53 | 0.64 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.13 | ) | (0.11 | ) | 0.11 | 0.05 | (0.62 | ) | 0.46 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.16 | 0.48 | 0.69 | 0.64 | (0.09 | ) | 1.10 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.29 | ) | (0.55 | ) | (0.52 | ) | (0.52 | ) | (0.54 | ) | (0.67 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.29 | ) | (0.23 | ) | ||||||||||||||||||||||||||||||||||||
Tax return of capital | - | (0.02 | )A | (0.05 | )A | (0.06 | )A | - | - | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.29 | ) | (0.57 | ) | (0.57 | ) | (0.58 | ) | (0.83 | ) | (0.90 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 9.38 | $ | 9.51 | $ | 9.60 | $ | 9.48 | $ | 9.42 | $ | 10.34 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 1.73 | %D | 5.09 | % | 7.46 | % | 7.21 | % | (0.87 | )% | 11.33 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 614,301,904 | $ | 591,845,939 | $ | 577,349,417 | $ | 446,395,255 | $ | 300,014,547 | $ | 247,179,395 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 0.90 | %E | 0.88 | % | 0.89 | % | 0.91 | % | 0.91 | % | 0.94 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 0.90 | %E | 0.88 | % | 0.89 | % | 0.91 | % | 0.93 | % | 0.94 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 6.26 | %E | 5.90 | % | 5.93 | % | 6.28 | % | 5.32 | % | 5.77 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 6.26 | %E | 5.90 | % | 5.93 | % | 6.29 | % | 5.30 | % | 5.77 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 40 | %D | 51 | % | 50 | % | 57 | % | 43 | % | 38 | % |
A | Tax return of capital is calculated based on outstanding shares at the time of distribution. |
B | Amount represents less than $0.01 per share. Effective December 29, 2016, the redemption fee was terminated by the Trust’s Board of Trustees. |
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
53
American Beacon SiM High Yield Opportunities FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.49 | $ | 9.58 | $ | 9.45 | $ | 9.40 | $ | 10.32 | $ | 10.12 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.26 | 0.51 | 0.53 | 0.50 | 0.50 | 0.56 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.11 | ) | (0.06 | ) | 0.15 | 0.10 | (0.61 | ) | 0.52 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.15 | 0.45 | 0.68 | 0.60 | (0.11 | ) | 1.08 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.28 | ) | (0.52 | ) | (0.51 | ) | (0.49 | ) | (0.52 | ) | (0.65 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.29 | ) | (0.23 | ) | ||||||||||||||||||||||||||||||||||||
Tax return of capital | - | (0.02 | )A | (0.04 | )A | (0.06 | )A | - | - | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.28 | ) | (0.54 | ) | (0.55 | ) | (0.55 | ) | (0.81 | ) | (0.88 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 9.36 | $ | 9.49 | $ | 9.58 | $ | 9.45 | $ | 9.40 | $ | 10.32 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 1.60 | %D | 4.81 | % | 7.31 | % | 6.82 | % | (1.14 | )% | 11.08 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 79,779,997 | $ | 89,459,142 | $ | 115,679,739 | $ | 129,503,495 | $ | 196,928,349 | $ | 199,533,521 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.15 | %E | 1.14 | % | 1.13 | % | 1.17 | % | 1.19 | % | 1.11 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.15 | %E | 1.14 | % | 1.13 | % | 1.18 | % | 1.19 | % | 1.11 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 6.00 | %E | 5.62 | % | 5.70 | % | 5.97 | % | 5.05 | % | 5.68 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 6.00 | %E | 5.62 | % | 5.70 | % | 5.96 | % | 5.05 | % | 5.68 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 40 | %D | 51 | % | 50 | % | 57 | % | 43 | % | 38 | % |
A | Tax return of capital is calculated based on outstanding shares at the time of distribution. |
B | Amount represents less than $0.01 per share. Effective December 29, 2016, the redemption fee was terminated by the Trust’s Board of Trustees. |
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
54
American Beacon SiM High Yield Opportunities FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.53 | $ | 9.61 | $ | 9.49 | $ | 9.43 | $ | 10.36 | $ | 10.15 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.17 | 0.48 | 0.55 | 0.54 | 0.49 | 0.57 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.06 | ) | (0.01 | ) | 0.11 | 0.07 | (0.62 | ) | 0.49 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.11 | 0.47 | 0.66 | 0.61 | (0.13 | ) | 1.06 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.53 | ) | (0.50 | ) | (0.49 | ) | (0.51 | ) | (0.62 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.29 | ) | (0.23 | ) | ||||||||||||||||||||||||||||||||||||
Tax return of capital | - | (0.02 | )A | (0.04 | )A | (0.06 | )A | - | - | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.27 | ) | (0.55 | ) | (0.54 | ) | (0.55 | ) | (0.80 | ) | (0.85 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 9.37 | $ | 9.53 | $ | 9.61 | $ | 9.49 | $ | 9.43 | $ | 10.36 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 1.25 | %D | 5.00 | % | 7.12 | % | 6.87 | % | (1.27 | )% | 10.87 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 22,760,919 | $ | 37,998,012 | $ | 84,955,157 | $ | 79,917,424 | $ | 81,147,262 | $ | 93,060,715 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.20 | %E | 1.07 | % | 1.20 | % | 1.23 | % | 1.22 | % | 1.33 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.20 | %E | 1.07 | % | 1.20 | % | 1.24 | % | 1.24 | % | 1.32 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 5.91 | %E | 5.65 | % | 5.62 | % | 5.99 | % | 5.01 | % | 5.44 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 5.91 | %E | 5.65 | % | 5.62 | % | 5.98 | % | 4.99 | % | 5.45 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 40 | %D | 51 | % | 50 | % | 57 | % | 43 | % | 38 | % |
A | Tax return of capital is calculated based on outstanding shares at the time of distribution. |
B | Amount represents less than $0.01 per share. Effective December 29, 2016, the redemption fee was terminated by the Trust’s Board of Trustees. |
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
55
American Beacon SiM High Yield Opportunities FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.56 | $ | 9.65 | $ | 9.53 | $ | 9.47 | $ | 10.40 | $ | 10.16 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.24 | 0.48 | 0.47 | 0.48 | 0.42 | 0.49 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.13 | ) | (0.09 | ) | 0.12 | 0.06 | (0.62 | ) | 0.50 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.11 | 0.39 | 0.59 | 0.54 | (0.20 | ) | 0.99 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.24 | ) | (0.47 | ) | (0.43 | ) | (0.43 | ) | (0.44 | ) | (0.52 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | - | - | (0.29 | ) | (0.23 | ) | ||||||||||||||||||||||||||||||||||||
Tax return of capital | - | (0.01 | )A | (0.04 | )A | (0.05 | )A | - | - | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.24 | ) | (0.48 | ) | (0.47 | ) | (0.48 | ) | (0.73 | ) | (0.75 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Redemption fees added to beneficial interests | - | - | - | 0.00 | B | 0.00 | B | 0.00 | B | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 9.43 | $ | 9.56 | $ | 9.65 | $ | 9.53 | $ | 9.47 | $ | 10.40 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 1.24 | %D | 4.08 | % | 6.33 | % | 6.08 | % | (1.98 | )% | 10.12 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 56,271,230 | $ | 60,797,852 | $ | 69,698,961 | $ | 73,668,689 | $ | 73,213,378 | $ | 76,536,190 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.90 | %E | 1.85 | % | 1.94 | % | 1.97 | % | 1.97 | % | 2.08 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.90 | %E | 1.85 | % | 1.94 | % | 1.99 | % | 1.99 | % | 2.07 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 5.25 | %E | 4.93 | % | 4.90 | % | 5.26 | % | 4.26 | % | 4.68 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 5.25 | %E | 4.93 | % | 4.90 | % | 5.25 | % | 4.24 | % | 4.69 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 40 | %D | 51 | % | 50 | % | 57 | % | 43 | % | 38 | % |
A | Tax return of capital is calculated based on outstanding shares at the time of distribution. |
B | Amount represents less than $0.01 per share. Effective December 29, 2016, the redemption fee was terminated by the Trust’s Board of Trustees. |
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
56
American Beacon Sound Point Floating Rate Income FundSM
Financial Highlights
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.28 | $ | 10.35 | $ | 10.20 | $ | 10.38 | $ | 10.49 | $ | 10.58 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.23 | 0.53 | 0.46 | 0.51 | 0.52 | A | 0.57 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.17 | ) | (0.05 | ) | 0.18 | (0.10 | ) | 0.06 | 0.14 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.06 | 0.48 | 0.64 | 0.41 | 0.58 | 0.71 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.29 | ) | (0.52 | ) | (0.47 | ) | (0.55 | ) | (0.52 | ) | (0.58 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | (0.02 | ) | (0.04 | ) | (0.17 | ) | (0.22 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.29 | ) | (0.55 | ) | (0.49 | ) | (0.59 | ) | (0.69 | ) | (0.80 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 10.05 | $ | 10.28 | $ | 10.35 | $ | 10.20 | $ | 10.38 | $ | 10.49 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 1.12 | %C | 4.71 | % | 6.37 | % | 4.12 | % | 5.75 | % | 6.92 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 344,828,305 | $ | 391,526,212 | $ | 231,445,512 | $ | 63,147,618 | $ | 42,903,291 | $ | 19,578,492 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 0.81 | %D | 0.82 | % | 0.85 | % | 1.26 | % | 1.88 | % | 2.37 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 0.84 | %D | 0.84 | % | 0.84 | % | 0.92 | %E | 0.90 | % | 1.58 | %F | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 5.76 | %D | 5.16 | % | 4.51 | % | 4.78 | % | 4.06 | % | 4.56 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 5.73 | %D | 5.14 | % | 4.52 | % | 5.12 | % | 5.04 | % | 5.35 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 40 | %C | 69 | % | 86 | % | 168 | % | 196 | % | 165 | % |
A | Per share amounts have been calculated using the average shares method. |
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 | Expense ratios may exceed stated expense caps in Note 2 due topre-adoption expenses. |
F | The expense limitation for the Institutional Class Shares was reduced from 1.60% to 0.90% upon reorganization into the Trust. Prior to the reorganization on May 31, 2014, the Fund was organized as aclosed-end,non-diversified, management investment company. |
See accompanying notes
57
American Beacon Sound Point Floating Rate Income FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | December 11, 2015A to August 31, | ||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.29 | $ | 10.36 | $ | 10.21 | $ | 10.34 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.23 | 0.52 | 0.46 | 0.53 | ||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.18 | ) | (0.04 | ) | 0.17 | (0.09 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total income (loss) from investment operations | 0.05 | 0.48 | 0.63 | 0.44 | �� | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.28 | ) | (0.52 | ) | (0.46 | ) | (0.53 | ) | ||||||||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | (0.02 | ) | (0.04 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total distributions | (0.28 | ) | (0.55 | ) | (0.48 | ) | (0.57 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net asset value, end of period | $ | 10.06 | $ | 10.29 | $ | 10.36 | $ | 10.21 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total returnB | 1.07 | %C | 4.68 | % | 6.27 | % | 4.37 | %C | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||
Net assets, end of period | $ | 1,033,651,594 | $ | 1,260,705,246 | $ | 507,077,617 | $ | 22,952,034 | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 0.88 | %D | 0.88 | % | 0.92 | % | 1.42 | %D | ||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 0.88 | %D | 0.88 | % | 0.93 | % | 0.94 | %D | ||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 5.68 | %D | 5.13 | % | 4.43 | % | 4.64 | %D | ||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 5.68 | %D | 5.13 | % | 4.42 | % | 5.11 | %D | ||||||||||||||||||||
Portfolio turnover rate | 40 | %C | 69 | % | 86 | % | 168 | %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
58
American Beacon Sound Point Floating Rate Income FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | December 11, 2015A to August 31, | ||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.26 | $ | 10.33 | $ | 10.18 | $ | 10.33 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.21 | 0.50 | 0.46 | 0.50 | ||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.17 | ) | (0.04 | ) | 0.15 | (0.09 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total income (loss) from investment operations | 0.04 | 0.46 | 0.61 | 0.41 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.50 | ) | (0.44 | ) | (0.52 | ) | ||||||||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | (0.02 | ) | (0.04 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total distributions | (0.27 | ) | (0.53 | ) | (0.46 | ) | (0.56 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net asset value, end of period | $ | 10.03 | $ | 10.26 | $ | 10.33 | $ | 10.18 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total returnB | 0.86 | %C | 4.51 | % | 6.12 | % | 4.16 | %C | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||
Net assets, end of period | $ | 352,576,112 | $ | 538,668,514 | $ | 129,817,379 | $ | 3,641,581 | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.18 | %D | 1.04 | % | 1.07 | % | 1.31 | %D | ||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.18 | %D | 1.04 | % | 1.09 | % | 1.22 | %D | ||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 5.34 | %D | 5.02 | % | 4.24 | % | 4.26 | %D | ||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 5.34 | %D | 5.02 | % | 4.22 | % | 4.35 | %D | ||||||||||||||||||||
Portfolio turnover rate | 40 | %C | 69 | % | 86 | % | 168 | %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
59
American Beacon Sound Point Floating Rate Income FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | December 11, 2015A to August 31, | ||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.28 | $ | 10.35 | $ | 10.20 | $ | 10.33 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.25 | 0.49 | 0.42 | 0.51 | ||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.19 | ) | (0.04 | ) | 0.17 | (0.10 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total income (loss) from investment operations | 0.06 | 0.45 | 0.59 | 0.41 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.49 | ) | (0.42 | ) | (0.50 | ) | ||||||||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | (0.02 | ) | (0.04 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total distributions | (0.27 | ) | (0.52 | ) | (0.44 | ) | (0.54 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net asset value, end of period | $ | 10.07 | $ | 10.28 | $ | 10.35 | $ | 10.20 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total returnB | 0.92 | %C | 4.39 | % | 5.92 | % | 4.13 | %C | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||
Net assets, end of period | $ | 53,924,077 | $ | 58,987,550 | $ | 32,450,342 | $ | 6,849,306 | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.11 | %D | 1.13 | % | 1.22 | % | 1.67 | %D | ||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.11 | %D | 1.14 | % | 1.24 | % | 1.24 | %D | ||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 5.47 | %D | 4.85 | % | 4.07 | % | 4.51 | %D | ||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 5.47 | %D | 4.84 | % | 4.04 | % | 4.93 | %D | ||||||||||||||||||||
Portfolio turnover rate | 40 | %C | 69 | % | 86 | % | 168 | %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
60
American Beacon Sound Point Floating Rate Income FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | December 11, 2015A to August 31, | ||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.29 | $ | 10.35 | $ | 10.21 | $ | 10.33 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.24 | 0.42 | 0.35 | 0.45 | ||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.19 | ) | (0.04 | ) | 0.16 | (0.08 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total income (loss) from investment operations | 0.05 | 0.38 | 0.51 | 0.37 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.23 | ) | (0.41 | ) | (0.35 | ) | (0.45 | ) | ||||||||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | (0.02 | ) | (0.04 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total distributions | (0.23 | ) | (0.44 | ) | (0.37 | ) | (0.49 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net asset value, end of period | $ | 10.11 | $ | 10.29 | $ | 10.35 | $ | 10.21 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total returnB | 0.55 | %C | 3.73 | % | 5.03 | % | 3.67 | %C | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||
Net assets, end of period | $ | 69,110,364 | $ | 59,792,915 | $ | 31,434,098 | $ | 3,040,244 | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.88 | %D | 1.88 | % | 1.97 | % | 2.55 | %D | ||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.88 | %D | 1.88 | % | 1.99 | % | 1.99 | %D | ||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 4.74 | %D | 4.10 | % | 3.31 | % | 3.50 | %D | ||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 4.74 | %D | 4.10 | % | 3.29 | % | 4.06 | %D | ||||||||||||||||||||
Portfolio turnover rate | 40 | %C | 69 | % | 86 | % | 168 | %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
61
American Beacon Sound Point Floating Rate Income FundSM
Financial Highlights
(For a share outstanding throughout the period)
SP ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | May 31, 2014B to August 31, | ||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.30 | $ | 10.36 | $ | 10.19 | $ | 10.38 | $ | 10.49 | $ | 10.62 | C | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.25 | 0.49 | 0.25 | D | 0.30 | 0.43 | D | 0.13 | ||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.19 | ) | (0.03 | ) | 0.37 | 0.07 | 0.12 | (0.00 | )E | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.06 | 0.46 | 0.62 | 0.37 | 0.55 | 0.13 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.27 | ) | (0.49 | ) | (0.43 | ) | (0.52 | ) | (0.49 | ) | (0.26 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.03 | ) | (0.02 | ) | (0.04 | ) | (0.17 | ) | - | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.27 | ) | (0.52 | ) | (0.45 | ) | (0.56 | ) | (0.66 | ) | (0.26 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 10.09 | $ | 10.30 | $ | 10.36 | $ | 10.19 | $ | 10.38 | $ | 10.49 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnF | 0.83 | %G | 4.49 | % | 6.13 | % | 3.70 | % | 5.53 | % | 1.19 | %G | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 577,485 | $ | 705,984 | $ | 785,649 | $ | 11,651,032 | $ | 125,577 | $ | 1,138 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.04 | %H | 1.04 | % | 1.08 | % | 1.49 | % | 1.74 | % | 1.95 | %H | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 1.15 | %H | 1.15 | % | 1.12 | % | 1.19 | %I | 1.15 | % | 1.15 | %H | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements or recoupments | 5.54 | %H | 4.86 | % | 4.25 | % | 4.01 | % | 3.59 | % | 3.70 | %H | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements or recoupments | 5.43 | %H | 4.75 | % | 4.21 | % | 4.30 | % | 4.18 | % | 4.50 | %H | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 40 | %G | 69 | % | 86 | % | 168 | % | 196 | % | 17 | %G |
A | Prior to the reorganization on December 11, 2015, the SP Class was known as the Investor Class. |
B | Commencement of operations for the Predecessor Fund is December 31, 2010. |
C | NAV at Class inception. |
D | Per share amounts have been calculated using the average shares method. |
E | Amount represents less than $0.01 per share. |
F | 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. |
G | Not annualized. |
H | Annualized. |
I | Expense ratios may exceed stated expense caps in Note 2 due topre-adoption expenses. |
See accompanying notes
62
Delivery of Documents
eDelivery isNOW AVAILABLE - Stop traditional mail delivery and receive your
shareholder reports and summary prospectuson-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, bye-mail. If you are interested in this option, please go towww.icsdelivery.comand search for your financial institution’s name or contact your financial institution directly.
To obtain more information about the Fund:
![]() | ![]() | |
ByE-mail: | On the Internet: | |
american_beacon.funds@ambeacon.com | Visit our website atwww.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 FormN-Q as of the first and third fiscal quarters. The Fund’s FormsN-Q are available on the SEC’s website atwww.sec.gov. The FormsN-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 calling1-800-SEC-0330. A complete schedule of each Fund’s portfolio holdings is also made available on the Funds’ website atwww.americanbeaconfunds.com, approximately sixty days after the end of each quarter for the Sound Point Floating Rate Income Fund and twenty days after the end of each month for the SiM High Yield Opportunities Fund. | Availability of Proxy Voting Policy and Records A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, which is available free of charge on the Fund’s website atwww.americanbeaconfunds.com and by calling1-800-967-9009 or by accessing the SEC’s website atwww.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on FormN-PX. The Fund’s FormsN-PX are available on the SEC’s website atwww.sec.gov. The Fund’s proxy voting record may also be obtained by calling1-800-967-9009. |
Fund Service Providers:
CUSTODIAN State Street Bank and Trust Company Boston, Massachusetts | TRANSFER AGENT DST Asset Manager Solutions, Inc. Quincy, Massachusetts | 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, American Beacon SiM High Yield Opportunities Fund and American Beacon Sound Point Floating Rate Income Fund are service marks of American Beacon Advisors, Inc.
SAR 2/19
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.
THE LONDON COMPANY INCOME EQUITY FUND
Investing insmall- and medium-capitalization stocksmay involve greater volatility and lower liquidity than larger company stocks. Investing inforeign securitiesmay involve heightened risk due to currency fluctuations and economic and political risks. Investing individend-paying stocksmay result in less earnings growth or capital appreciation than investing innon-dividend paying stocks. The use offixed-income securitiesentails interest rate and credit risks. Because the Fund may invest infewer issuersthan a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. The use offutures contractsfor cash management may subject the Fund to losing more money than invested. The Fund participates in asecurities lendingprogram.
ZEBRA SMALL CAP EQUITY FUND
Investing insmall-capitalization stocksmay involve greater volatility and lower liquidity than larger company stocks. Investing inforeign securitiesmay involve heightened risk due to currency fluctuations and economic and political risks. At times, certain securities may havelimited marketabilityand may be difficult to sell. The use offutures contractsfor cash management may subject the Fund to losing more money than invested. The Fund participates in asecurities lendingprogram.
Please see the prospectus for a complete discussion of the Funds’ risks. There can be no assurances that the investment objectives of these Funds will be met.
Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and 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 February 28, 2019 |
Contents
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| Back Cover |
![]() | Dear Shareholders,
The market volatility of December 2018 – a month in which all major U.S. equity indexes declined and the year ended in negative territory – serves as a prime example of the importance of having a long-term investment perspective.
While long-term investing isn’t about identifying and anticipating the next big market move, it is about identifying the right investment products for riding out those moves. As a long-term investor, you should strive to accomplish the three Ds: direction, discipline and diversification.
u Direction: Achieving your long-term financial goals requires an |
individualized plan of action. You may want your plan to provide some measure of protection against periods of geopolitical turmoil, economic uncertainty, market volatility and job insecurity. Your plan should be reviewed annually and be adjusted in the event your long-range needs change. |
u | Discipline:Long-term, systematic participation in an investment portfolio requires your resolution to stay the course. Spending time in the market – rather than trying to time the market – may place you in a better position to reach your long-term financial goals. |
u | Diversification: By investing in different types of investment categories and asset classes, you may be able to help mitigate financial risks across your investment portfolio. By allocating your investment portfolio according to your risk-tolerance level, you may be better positioned to weather storms and achieve your long-term financial goals. |
Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term financial goals.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. 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 investment portfolio.
Many of thesub-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 long-term rewards.
Thank you for your continued interest in American Beacon. For additional information about our funds or to access your account information, please visit our website atwww.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon The London Company Income Equity FundSM
February 28, 2019 (Unaudited)
The Investor Class of the American Beacon The London Company Income Equity Fund (the “Fund”) returned 0.32% for the six months ended February 28, 2019. The Fund outperformed the Russell 1000 Value Index (the “Index”) return of-1.62% for the same period.
Total Returns for the Period ended February 28, 2019 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | Since Inception | |||||||||||||||||||||||||||
Institutional Class (1,2,4) | ABCIX | 0.48 | % | 7.63 | % | 11.93 | % | 9.55 | % | 11.89 | % | |||||||||||||||||||||
Y Class (1,2,4) | ABCYX | 0.45 | % | 7.60 | % | 11.84 | % | 9.48 | % | 11.82 | % | |||||||||||||||||||||
Investor Class (1,2,4) | ABCVX | 0.32 | % | 7.24 | % | 11.55 | % | 9.20 | % | 11.52 | % | |||||||||||||||||||||
A without Sales Charge (1,2,4) | ABCAX | 0.31 | % | 7.31 | % | 11.54 | % | 9.15 | % | 11.44 | % | |||||||||||||||||||||
A with Sales Charge (1,2,4) | ABCAX | (5.47 | )% | 1.16 | % | 9.37 | % | 7.87 | % | 10.47 | % | |||||||||||||||||||||
C without Sales Charge (1,2,4) | ABECX | (0.10 | )% | 6.47 | % | 10.69 | % | 8.32 | % | 10.60 | % | |||||||||||||||||||||
C with Sales Charge (1,2,4) | ABECX | (1.10 | )% | 5.47 | % | 10.69 | % | 8.32 | % | 10.60 | % | |||||||||||||||||||||
Russell 1000® Value Index (3) | (1.62 | )% | 3.16 | % | 12.80 | % | 8.09 | % | 12.38 | % |
* | 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 visitwww.americanbeaconfunds.com or call1-800-967-9009. 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 Class shares have a maximum sales charge of 5.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase. |
2. | A portion of the fees charged to the Y, A, and C Classes of the Fund was waived from 2012 through 2014 and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown from 2012 through 2014. A portion of the fees charged to the Investor Class of the Fund was waived in 2012 and 2013 and fully recovered in 2014 and 2015. Performance prior to waiving fees was lower than actual returns shown in 2012 and 2013. A portion of the fees charged to the Institutional Class of the Fund was waived from 2012 through 2014, partially recovered in 2015, and fully recovered in 2016. Performance prior to waiving fees was lower than actual returns shown from 2012 through 2014. |
3. | The Russell 1000® Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lowerprice-to-book ratios and lower forecasted growth values. Russell 1000® Value Index and Russell 1000 Index are registered trademarks of the Frank Russell Company. One cannot directly invest in an index. |
4. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, and C Class shares were 0.73%, 0.79%, 1.05%, 1.03%, and 1.81%, 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. |
The Fund outperformed the Index due to both security selection and sector allocation.
From a security selection standpoint, the Fund’s holdings in the Industrials, Energy and Health Care sectors contributed positively to performance. In the Industrials sector, companies that added to the Fund’s relative outperformance included Fastenal, Co. (up 15.8%) and Paccar, Inc. (up 3.4%). In the Energy sector, Kinder Morgan (up 10.6%) added to performance, while an absence from Schlumberger Ltd. (down 28.1%) also helped the Fund’s relative performance. In the Health Care sector, Merck & Co., Inc. (up 20.1%) contributed positively. The aforementioned positive performance was somewhat offset by security selection in the Information Technology and Consumer Discretionary sectors. In the Information Technology sector, Apple, Inc. (down 23.3%) and Microsoft Corp. (down 1.5%) detracted from relative performance, and Target Corp. (down 15.5%) also detracted from performance in the Consumer Discretionary sector.
From a sector allocation perspective, the Fund’s underweight in Energy (down 11.3%) and Financials (down 5.9%), and overweight in Information Technology (up 2.7%) contributed to the Fund’s relative performance, while an overweight in Industrials (down 4.6%) somewhat detracted.
2
American Beacon The London Company Income Equity FundSM
Performance Overview
February 28, 2019 (Unaudited)
Thesub-advisor’s investment process continues to focus on downside protection, current income and capital appreciation.
Top Ten Holdings (% Net Assets) |
| |||||||
Apple, Inc. | 4.6 | |||||||
Carnival Corp. | 4.5 | |||||||
Cisco Systems, Inc. | 4.2 | |||||||
Merck & Co., Inc. | 3.9 | |||||||
Wells Fargo & Co. | 3.9 | |||||||
Norfolk Southern Corp. | 3.7 | |||||||
PACCAR, Inc. | 3.7 | |||||||
Intel Corp. | 3.6 | |||||||
Cincinnati Financial Corp. | 3.5 | |||||||
Johnson & Johnson | 3.4 | |||||||
Total Fund Holdings | 35 | |||||||
Sector Allocation (% Equities) |
| |||||||
Information Technology | 20.7 | |||||||
Industrials | 16.9 | |||||||
Financials | 15.7 | |||||||
Consumer Staples | 11.0 | |||||||
Health Care | 11.0 | |||||||
Consumer Discretionary | 9.8 | |||||||
Energy | 4.1 | |||||||
Real Estate | 3.2 | |||||||
Utilities | 3.1 | |||||||
Communication Services | 2.9 | |||||||
Materials | 1.6 |
3
American Beacon Zebra Small Cap Equity FundSM
Performance Overview
February 28, 2019 (Unaudited)
The Investor Class of the American Beacon Zebra Small Cap Equity Fund (the “Fund”) returned-5.34% for thesix-month period ended February 28, 2019. The Fund outperformed the Russell 2000® Index (the “Index”) return of-8.86%.
Total Returns for the Period ended February 28, 2019 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | Since Inception | |||||||||||||||||||||||||||
Institutional Class (1,3,5) | AZSIX | (5.23 | )% | 10.24 | % | 15.87 | % | 8.99 | % | 13.05 | % | |||||||||||||||||||||
Y Class (1,3,5) | AZSYX | (5.24 | )% | 10.16 | % | 15.76 | % | 8.88 | % | 12.93 | % | |||||||||||||||||||||
Investor Class (1,3,5) | AZSPX | (5.34 | )% | 9.93 | % | 15.44 | % | 8.59 | % | 12.62 | % | |||||||||||||||||||||
A without Sales Charge (1,3,5) | AZSAX | (5.36 | )% | 9.83 | % | 15.42 | % | 8.57 | % | 12.55 | % | |||||||||||||||||||||
A with Sales Charge (1,3,5) | AZSAX | (10.81 | )% | 3.54 | % | 13.17 | % | 7.30 | % | 11.80 | % | |||||||||||||||||||||
C without Sales Charge (1,2,3,5) | AZSCX | (5.71 | )% | 9.08 | % | 14.57 | % | 7.76 | % | 11.73 | % | |||||||||||||||||||||
C with Sales Charge (1,2,3,5) | AZSCX | (6.71 | )% | 8.08 | % | 14.57 | % | 7.76 | % | 11.73 | % | |||||||||||||||||||||
Russell 2000® Index (4) | (8.86 | )% | 5.58 | % | 16.67 | % | 7.36 | % | 12.35 | % |
* | Not annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visitwww.americanbeaconfunds.com or call1-800-967-9009. 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 Class shares have a maximum sales charge of 5.75%. |
2. | Fund performance represents the total returns achieved by the Investor Class from 6/1/10 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 6/1/10. The maximum contingent deferred sales charge is 1.00% for shares redeemed within one year of the date of purchase. |
3. | 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. |
4. | The Russell 2000® Index is an unmanaged index comprised of approximately 2,000 smaller-capitalization stocks from various industrial sectors. Russell 2000 Index is a registered trademark of the Frank Russell Company. One cannot directly invest in an index. |
5. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A and C Class shares were 1.23%, 1.27%, 1.44%, 1.54%, and 2.29%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. |
The Fund outperformed the Index primarily due to stock selection. Sector allocation was also positive during this period.
From a stock selection standpoint, the Fund’s investments in the Health Care and Consumer Discretionary sectors contributed to relative performance. Innoviva, Inc. (up 7.2%), The Ensign Group, Inc. (up 26.4%), and Omnicell, Inc. (up 23.3%) contributed positively in the Health Care sector. Helen of Troy Ltd. (up 16.0%), Dorman Products, Inc. (up 7.3%), and Tupperware Brands Corp. (up 12.6%) contributed positively in the Consumer Discretionary sector. The aforementioned performance was slightly offset by stock selection in the Industrials sector. Maxar Technologies, Ltd. (down 52.0%), NL Industries (down 43.7%), and Deluxe Corp. (down 21.5%) detracted from relative performance in the Industrials sector.
From a sector allocation perspective, the Fund’s underweight position to the Energy sector and overweight position to the Information Technology sector contributed positively to relative performance. A partial offset to this performance was an underweight to the Communication Services sector.
4
American Beacon Zebra Small Cap Equity FundSM
Performance Overview
February 28, 2019 (Unaudited)
Thesub-advisor continues to focus on uncovering opportunities by investing in a portfolio of securities that are generally less popular with investors but nevertheless have strong fundamental characteristics. At the same time, the portfolio will be underweight stocks that are heavily followed but have weak fundamentals. Thesub-advisor believes that when these quality companies are recognized by investors, trading volumes are likely to increase and stock prices are likely to rise.
Top Ten Holdings (% Net Assets) |
| |||||||
Entegris, Inc. | 1.7 | |||||||
j2 Global, Inc. | 1.6 | |||||||
AVX Corp. | 1.5 | |||||||
National General Holdings Corp. | 1.4 | |||||||
Office Depot, Inc. | 1.2 | |||||||
Mr Cooper Group, Inc. | 1.1 | |||||||
Amedisys, Inc. | 1.0 | |||||||
Enstar Group Ltd. | 1.0 | |||||||
Insight Enterprises, Inc. | 1.0 | |||||||
Omnicell, Inc. | 1.0 | |||||||
Total Fund Holdings | 295 | |||||||
Sector Allocation (% Equities) |
| |||||||
Financials | 19.9 | |||||||
Information Technology | 17.5 | |||||||
Health Care | 16.6 | |||||||
Industrials | 16.5 | |||||||
Consumer Discretionary | 9.6 | |||||||
Real Estate | 5.8 | |||||||
Materials | 4.1 | |||||||
Communication Services | 2.6 | |||||||
Energy | 2.6 | |||||||
Utilities | 2.5 | |||||||
Consumer Staples | 2.3 |
5
American Beacon FundsSM
February 28, 2019 (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 Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from September 1, 2018 through February 28, 2019.
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 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.
Hypothetical Example for Comparison Purposes
The “Hypothetical” lines of the tables provide information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio and an assumed 5% per year rate of return before expenses (not the Funds’ actual return). You may compare the ongoing costs of investing in the Funds with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Shareholders of the Investor and Institutional Classes that invest in the Funds through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.
You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Funds, such as sales charges (loads) or redemption fees, as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.
6
American Beacon FundsSM
Expense Examples
February 28, 2019 (Unaudited)
American Beacon The London Company Income Equity Fund |
| ||||||||||||||
Beginning Account Value 9/1/2018 | Ending Account Value 2/28/2019 | Expenses Paid During Period 9/1/2018-2/28/2019* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $1,004.80 | $3.58 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.22 | $3.61 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,004.50 | $3.93 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.88 | $3.96 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,003.20 | $5.26 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.54 | $5.31 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,003.10 | $5.31 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.49 | $5.36 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $999.00 | $9.07 | ||||||||||||
Hypothetical** | $1,000.00 | $1,015.72 | $9.15 |
* | Expenses are equal to the Fund’s annualized expense ratios for thesix-month period of 0.72%, 0.79%, 1.06%, 1.07%, and 1.83% for the Institutional, Y, Investor, A, and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
American Beacon Zebra Small Cap Equity Fund |
| ||||||||||||||
Beginning Account Value 9/1/2018 | Ending Account Value 2/28/2019 | Expenses Paid During Period 9/1/2018-2/28/2019* | |||||||||||||
Institutional Class | |||||||||||||||
Actual | $1,000.00 | $947.70 | $4.30 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.38 | $4.46 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $947.60 | $4.78 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.89 | $4.96 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $946.60 | $6.13 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.50 | $6.36 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $946.40 | $6.23 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.40 | $6.46 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $942.90 | $9.83 | ||||||||||||
Hypothetical** | $1,000.00 | $1,014.68 | $10.19 |
* | Expenses are equal to the Fund’s annualized expense ratios for thesix-month period of 0.89%, 0.99%, 1.27%, 1.29%, and 2.04% for the Institutional, Y, Investor, A, and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
7
American Beacon The London Company Income Equity FundSM
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.13% | |||||||||||||||
Communication Services - 2.71% | |||||||||||||||
Diversified Telecommunication Services - 2.71% | |||||||||||||||
Verizon Communications, Inc. | 494,539 | $ | 28,149,160 | ||||||||||||
|
| ||||||||||||||
Consumer Discretionary - 9.33% | |||||||||||||||
Hotels, Restaurants & Leisure - 4.47% | |||||||||||||||
Carnival Corp. | 802,890 | 46,374,926 | |||||||||||||
|
| ||||||||||||||
Leisure Products - 0.74% | |||||||||||||||
Hasbro, Inc. | 89,987 | 7,639,896 | |||||||||||||
|
| ||||||||||||||
Multiline Retail - 1.74% | |||||||||||||||
Target Corp. | 249,300 | 18,109,152 | |||||||||||||
|
| ||||||||||||||
Specialty Retail - 2.38% | |||||||||||||||
Lowe’s Cos, Inc. | 234,938 | 24,689,635 | |||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 96,813,609 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 10.44% | |||||||||||||||
Beverages - 5.10% | |||||||||||||||
Coca-Cola Co. | 384,537 | 17,434,908 | |||||||||||||
Diageo PLC, Sponsored ADR | 228,790 | 35,412,116 | |||||||||||||
|
| ||||||||||||||
52,847,024 | |||||||||||||||
|
| ||||||||||||||
Food Products - 2.00% | |||||||||||||||
Nestle S.A., Sponsored ADR | 230,100 | 20,784,933 | |||||||||||||
|
| ||||||||||||||
Tobacco - 3.34% | |||||||||||||||
Altria Group, Inc. | 424,401 | 22,242,856 | |||||||||||||
Philip Morris International, Inc. | 142,670 | 12,403,730 | |||||||||||||
34,646,586 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 108,278,543 | ||||||||||||||
|
| ||||||||||||||
Energy - 3.86% | |||||||||||||||
Oil, Gas & Consumable Fuels - 3.86% | |||||||||||||||
Chevron Corp. | 197,454 | 23,611,549 | |||||||||||||
Kinder Morgan, Inc. | 857,475 | 16,429,221 | |||||||||||||
|
| ||||||||||||||
40,040,770 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 40,040,770 | ||||||||||||||
|
| ||||||||||||||
Financials - 14.98% | |||||||||||||||
Banks - 3.93% | |||||||||||||||
Wells Fargo & Co. | 817,883 | 40,804,183 | |||||||||||||
|
| ||||||||||||||
Capital Markets - 5.32% | |||||||||||||||
BlackRock, Inc. | 79,722 | 35,334,385 | |||||||||||||
Franklin Resources, Inc. | 609,200 | 19,866,012 | |||||||||||||
|
| ||||||||||||||
55,200,397 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 2.24% | |||||||||||||||
Berkshire Hathaway, Inc., Class BA | 115,720 | 23,294,436 | |||||||||||||
|
| ||||||||||||||
Insurance - 3.49% | |||||||||||||||
Cincinnati Financial Corp. | 416,671 | 36,175,376 | |||||||||||||
|
| ||||||||||||||
Total Financials | 155,474,392 | ||||||||||||||
|
|
See accompanying notes
8
American Beacon The London Company Income Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.13% (continued) | |||||||||||||||
Health Care - 10.50% | |||||||||||||||
Pharmaceuticals - 10.50% | |||||||||||||||
Johnson & Johnson | 259,642 | $ | 35,477,483 | ||||||||||||
Merck & Co., Inc. | 491,993 | 39,994,111 | |||||||||||||
Pfizer, Inc. | 771,183 | 33,430,783 | |||||||||||||
|
| ||||||||||||||
108,902,377 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 108,902,377 | ||||||||||||||
|
| ||||||||||||||
Industrials - 16.09% | |||||||||||||||
Aerospace & Defense - 2.24% | |||||||||||||||
General Dynamics Corp. | 136,775 | 23,281,841 | |||||||||||||
|
| ||||||||||||||
Air Freight & Logistics - 3.06% | |||||||||||||||
United Parcel Service, Inc., Class B | 287,871 | 31,723,384 | |||||||||||||
|
| ||||||||||||||
Machinery - 3.73% | |||||||||||||||
PACCAR, Inc. | 570,663 | 38,690,951 | |||||||||||||
|
| ||||||||||||||
Road & Rail - 3.71% | |||||||||||||||
Norfolk Southern Corp. | 214,640 | 38,484,952 | |||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 3.35% | |||||||||||||||
Fastenal Co. | 552,600 | 34,780,644 | |||||||||||||
|
| ||||||||||||||
Total Industrials | 166,961,772 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 19.73% | |||||||||||||||
Communications Equipment - 4.16% | |||||||||||||||
Cisco Systems, Inc. | 833,340 | 43,142,012 | |||||||||||||
|
| ||||||||||||||
IT Services - 2.73% | |||||||||||||||
Paychex, Inc. | 367,591 | 28,311,859 | |||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 5.61% | |||||||||||||||
Intel Corp. | 698,141 | 36,973,547 | |||||||||||||
Texas Instruments, Inc. | 200,510 | 21,209,948 | |||||||||||||
|
| ||||||||||||||
58,183,495 | |||||||||||||||
|
| ||||||||||||||
Software - 2.64% | |||||||||||||||
Microsoft Corp. | 244,938 | 27,440,404 | |||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 4.59% | |||||||||||||||
Apple, Inc. | 275,053 | 47,625,427 | |||||||||||||
|
| ||||||||||||||
Total Information Technology | 204,703,197 | ||||||||||||||
|
| ||||||||||||||
Materials - 1.55% | |||||||||||||||
Chemicals - 1.55% | |||||||||||||||
NewMarket Corp. | 36,761 | 16,138,079 | |||||||||||||
|
| ||||||||||||||
Real Estate - 3.00% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 3.00% | |||||||||||||||
Crown Castle International Corp. | 262,150 | 31,130,312 | |||||||||||||
|
| ||||||||||||||
Utilities - 2.94% | |||||||||||||||
Electric Utilities - 1.80% | |||||||||||||||
Duke Energy Corp. | 208,681 | 18,710,339 | |||||||||||||
|
| ||||||||||||||
See accompanying notes
9
American Beacon The London Company Income Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.13% (continued) | |||||||||||||||
Utilities - 2.94% (continued) | |||||||||||||||
Multi-Utilities - 1.14% | |||||||||||||||
Dominion Energy, Inc. | 159,338 | $ | 11,805,352 | ||||||||||||
|
| ||||||||||||||
Total Utilities | 30,515,691 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $764,428,675) | 987,107,902 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 4.02% (Cost $41,677,597) | |||||||||||||||
Investment Companies - 4.02% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 2.33%B C | 41,677,597 | 41,677,597 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 99.15% (Cost $806,106,272) | 1,028,785,499 | ||||||||||||||
OTHER ASSETS, NET OF LIABILITIES - 0.85% | 8,786,528 | ||||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 1,037,572,027 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
ANon-income producing security.
B The Fund is affiliated by having the same investment advisor.
C7-day yield.
ADR - American Depositary Receipt.
PLC - Public Limited Company.
Long Futures Contracts Open on February 28, 2019: |
| |||||||||||||
Equity Futures Contracts | ||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||
S&P 500E-Mini Index Futures | 280 | March 2019 | $ 37,157,332 | $ | 38,985,800 | $ | 1,828,468 | |||||||
|
|
|
|
| ||||||||||
$ 37,157,332 | $ | 38,985,800 | $ | 1,828,468 | ||||||||||
|
|
|
|
|
Index Abbreviations: | ||
S&P 500 | Standard & Poor’s U.S. EquityLarge-Cap Index. |
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of February 28, 2019, the investments were classified as described below:
The London Company Income Equity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 987,107,902 | $ | - | $ | - | $ | 987,107,902 | ||||||||||||||||||||
Short-Term Investments | 41,677,597 | - | - | 41,677,597 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 1,028,785,499 | $ | - | $ | - | $ | 1,028,785,499 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||||||
Futures Contracts | $ | 1,828,468 | $ | - | $ | - | $ | 1,828,468 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 1,828,468 | $ | - | $ | - | $ | 1,828,468 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP requires transfers between all levels to/from level 3 to be disclosed. During the period ended February 28, 2019, there were no transfers into or out of Level 3.
See accompanying notes
10
American Beacon Zebra Small Cap Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 98.08% | |||||||||||||||
Communication Services - 2.51% | |||||||||||||||
Interactive Media & Services - 0.14% | |||||||||||||||
TravelzooA | 7,959 | $ | 105,616 | ||||||||||||
|
| ||||||||||||||
Media - 2.27% | |||||||||||||||
Entravision Communications Corp., Class A | 22,236 | 87,832 | |||||||||||||
Loral Space & Communications, Inc.A | 7,674 | 313,943 | |||||||||||||
MSG Networks, Inc., Class AA | 24,413 | 589,330 | |||||||||||||
National CineMedia, Inc. | 19,851 | 153,646 | |||||||||||||
Saga Communications, Inc., Class A | 2,328 | 78,221 | |||||||||||||
Scholastic Corp. | 9,938 | 420,477 | |||||||||||||
TechTarget, Inc.A | 4,991 | 82,751 | |||||||||||||
|
| ||||||||||||||
1,726,200 | |||||||||||||||
|
| ||||||||||||||
Wireless Telecommunication Services - 0.10% | |||||||||||||||
Spok Holdings, Inc. | 5,302 | 73,221 | |||||||||||||
|
| ||||||||||||||
Total Communication Services | 1,905,037 | ||||||||||||||
|
| ||||||||||||||
Consumer Discretionary - 9.38% | |||||||||||||||
Auto Components - 0.88% | |||||||||||||||
LCI Industries | 6,694 | 545,427 | |||||||||||||
Shiloh Industries, Inc.A | 19,412 | 120,937 | |||||||||||||
|
| ||||||||||||||
666,364 | |||||||||||||||
|
| ||||||||||||||
Distributors - 0.20% | |||||||||||||||
Weyco Group, Inc. | 4,983 | 151,084 | |||||||||||||
|
| ||||||||||||||
Diversified Consumer Services - 1.29% | |||||||||||||||
American Public Education, Inc.A | 7,710 | 249,110 | |||||||||||||
Career Education Corp.A | 44,156 | 733,873 | |||||||||||||
|
| ||||||||||||||
982,983 | |||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 0.56% | |||||||||||||||
Monarch Casino & Resort, Inc.A | 4,235 | 185,705 | |||||||||||||
Nathan’s Famous, Inc. | 1,421 | 101,005 | |||||||||||||
RCI Hospitality Holdings, Inc. | 3,375 | 78,941 | |||||||||||||
Town Sports International Holdings, Inc.A | 10,547 | 57,481 | |||||||||||||
|
| ||||||||||||||
423,132 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 1.14% | |||||||||||||||
Bassett Furniture Industries, Inc. | 5,895 | 116,426 | |||||||||||||
Flexsteel Industries, Inc. | 2,641 | 65,735 | |||||||||||||
Green Brick Partners, Inc.A | 50,917 | 453,670 | |||||||||||||
Hooker Furniture Corp. | 7,259 | 227,933 | |||||||||||||
|
| ||||||||||||||
863,764 | |||||||||||||||
|
| ||||||||||||||
Internet & Direct Marketing Retail - 0.52% | |||||||||||||||
1-800-Flowers.com, Inc., Class AA | 17,916 | 319,622 | |||||||||||||
Leaf Group Ltd.A | 8,895 | 72,316 | |||||||||||||
|
| ||||||||||||||
391,938 | |||||||||||||||
|
| ||||||||||||||
Leisure Products - 1.33% | |||||||||||||||
Escalade, Inc. | 11,480 | 140,056 | |||||||||||||
Johnson Outdoors, Inc., Class A | 3,821 | 250,810 | |||||||||||||
Marine Products Corp. | 20,312 | 287,618 | |||||||||||||
MasterCraft Boat Holdings, Inc.A | 13,419 | 331,047 | |||||||||||||
|
| ||||||||||||||
1,009,531 | |||||||||||||||
|
| ||||||||||||||
See accompanying notes
11
American Beacon Zebra Small Cap Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 98.08% (continued) | |||||||||||||||
Consumer Discretionary - 9.38% (continued) | |||||||||||||||
Specialty Retail - 2.92% | |||||||||||||||
America’sCar-Mart, Inc.A | 4,049 | $ | 330,398 | ||||||||||||
Citi Trends, Inc. | 5,589 | 120,946 | |||||||||||||
Haverty Furniture Cos, Inc. | 8,911 | 217,072 | |||||||||||||
J. Jill, Inc.A | 24,085 | 143,306 | |||||||||||||
Office Depot, Inc. | 259,195 | 899,407 | |||||||||||||
RTW RetailWinds, Inc.A | 39,231 | 119,262 | |||||||||||||
Sportsman’s Warehouse Holdings, Inc.A | 18,044 | 113,497 | |||||||||||||
Winmark Corp. | 1,573 | 270,949 | |||||||||||||
|
| ||||||||||||||
2,214,837 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.54% | |||||||||||||||
Culp, Inc. | 6,460 | 119,833 | |||||||||||||
Rocky Brands, Inc. | 3,561 | 106,652 | |||||||||||||
Superior Group of Cos., Inc. | 10,709 | 186,122 | |||||||||||||
|
| ||||||||||||||
412,607 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 7,116,240 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 2.25% | |||||||||||||||
Food & Staples Retailing - 0.80% | |||||||||||||||
Ingles Markets, Inc., Class A | 2,875 | 89,470 | |||||||||||||
SpartanNash Co. | 11,845 | 224,818 | |||||||||||||
Village Super Market, Inc., Class A | 2,851 | 87,383 | |||||||||||||
Weis Markets, Inc. | 4,076 | 205,064 | |||||||||||||
|
| ||||||||||||||
606,735 | |||||||||||||||
|
| ||||||||||||||
Household Products - 0.29% | |||||||||||||||
Central Garden & Pet Co., Class AA | 7,909 | 220,266 | |||||||||||||
|
| ||||||||||||||
Personal Products - 0.83% | |||||||||||||||
Inter Parfums, Inc. | 8,519 | 628,446 | |||||||||||||
|
| ||||||||||||||
Tobacco - 0.33% | |||||||||||||||
Turning Point Brands, Inc. | 6,092 | 249,102 | |||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 1,704,549 | ||||||||||||||
|
| ||||||||||||||
Energy - 2.58% | |||||||||||||||
Energy Equipment & Services - 0.83% | |||||||||||||||
Mammoth Energy Services, Inc. | 23,885 | 549,116 | |||||||||||||
RigNet, Inc.A | 5,407 | 83,701 | |||||||||||||
|
| ||||||||||||||
632,817 | |||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 1.75% | |||||||||||||||
Adams Resources & Energy, Inc. | 1,834 | 72,883 | |||||||||||||
Evolution Petroleum Corp. | 10,789 | 76,278 | |||||||||||||
Goodrich Petroleum Corp.A | 5,673 | 73,579 | |||||||||||||
Hallador Energy Co. | 12,507 | 67,163 | |||||||||||||
NACCO Industries, Inc., Class A | 2,158 | 78,918 | |||||||||||||
Panhandle Oil and Gas, Inc., Class A | 4,389 | 72,067 | |||||||||||||
Par Pacific Holdings, Inc.A | 11,935 | 201,702 | |||||||||||||
Renewable Energy Group, Inc.A | 6,409 | 170,287 | |||||||||||||
SilverBow Resources, Inc.A | 11,599 | 260,977 | |||||||||||||
W&T Offshore, Inc.A | 48,551 | 252,951 | |||||||||||||
|
| ||||||||||||||
1,326,805 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 1,959,622 | ||||||||||||||
|
|
See accompanying notes
12
American Beacon Zebra Small Cap Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 98.08% (continued) | |||||||||||||||
Financials - 19.55% | |||||||||||||||
Banks - 11.96% | |||||||||||||||
ACNB Corp. | 1,944 | $ | 76,594 | ||||||||||||
American National Bankshares, Inc. | 3,376 | 120,861 | |||||||||||||
BancFirst Corp. | 12,220 | 688,964 | |||||||||||||
Bar Harbor Bankshares | 3,388 | 87,478 | |||||||||||||
BCB Bancorp, Inc. | 6,430 | 84,362 | |||||||||||||
Bryn Mawr Bank Corp. | 7,744 | 315,645 | |||||||||||||
C&F Financial Corp. | 1,049 | 54,118 | |||||||||||||
Central Valley Community Bancorp | 4,654 | 90,613 | |||||||||||||
Civista Bancshares, Inc. | 6,043 | 128,897 | |||||||||||||
CNB Financial Corp. | 6,088 | 169,246 | |||||||||||||
Codorus Valley Bancorp, Inc. | 3,084 | 69,945 | |||||||||||||
Community Financial Corp. | 2,121 | 63,757 | |||||||||||||
County Bancorp, Inc. | 4,021 | 76,761 | |||||||||||||
Enterprise Bancorp, Inc. | 2,880 | 91,354 | |||||||||||||
Evans Bancorp, Inc. | 1,818 | 64,812 | |||||||||||||
Farmers National Banc Corp. | 6,401 | 94,223 | |||||||||||||
First Bancorp, Inc. | 2,566 | 67,614 | |||||||||||||
First Financial Corp. | 4,998 | 221,811 | |||||||||||||
FirstMid-Illinois Bancshares, Inc. | 6,962 | 243,043 | |||||||||||||
Great Southern Bancorp, Inc. | 5,471 | 309,823 | |||||||||||||
Horizon Bancorp, Inc. | 15,421 | 272,489 | |||||||||||||
International Bancshares Corp. | 14,605 | 596,176 | |||||||||||||
LCNB Corp. | 4,788 | 81,396 | |||||||||||||
Live Oak Bancshares, Inc.B | 14,900 | 241,529 | |||||||||||||
Macatawa Bank Corp. | 11,938 | 130,244 | |||||||||||||
Middlefield Banc Corp. | 1,522 | 63,848 | |||||||||||||
Midland States Bancorp, Inc. | 9,808 | 250,104 | |||||||||||||
MutualFirst Financial, Inc. | 3,680 | 115,699 | |||||||||||||
Nicolet Bankshares, Inc.A | 3,266 | 187,534 | |||||||||||||
Northeast Bancorp | 3,553 | 72,055 | |||||||||||||
Northrim BanCorp, Inc. | 2,521 | 94,563 | |||||||||||||
Oak Valley Bancorp | 3,134 | 55,942 | |||||||||||||
Old Second Bancorp, Inc. | 10,559 | 150,782 | |||||||||||||
Orrstown Financial Services, Inc. | 3,506 | 71,593 | |||||||||||||
Pacific City Financial Corp. | 6,825 | 116,025 | |||||||||||||
Pacific Mercantile BancorpA | 8,027 | 66,223 | |||||||||||||
Parke Bancorp, Inc. | 3,473 | 77,066 | |||||||||||||
Peoples Bancorp, Inc. | 7,714 | 257,185 | |||||||||||||
Peoples Financial Services Corp. | 1,770 | 77,437 | |||||||||||||
Premier Financial Bancorp, Inc. | 3,774 | 62,535 | |||||||||||||
QCR Holdings, Inc. | 6,747 | 241,205 | |||||||||||||
Renasant Corp. | 20,053 | 767,629 | |||||||||||||
Republic Bancorp, Inc., Class A | 8,252 | 373,320 | |||||||||||||
Shore Bancshares, Inc. | 4,812 | 75,789 | |||||||||||||
Stock Yards Bancorp, Inc. | 7,101 | 252,938 | |||||||||||||
Summit Financial Group, Inc. | 4,740 | 115,703 | |||||||||||||
Towne Bank | 27,397 | 755,335 | |||||||||||||
United Security Bancshares | 6,385 | 68,958 | |||||||||||||
Unity Bancorp, Inc. | 5,172 | 114,249 | |||||||||||||
West Bancorporation, Inc. | 6,282 | 145,240 | |||||||||||||
|
| ||||||||||||||
9,070,712 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 1.47% | |||||||||||||||
B. Riley Financial, Inc. | 6,524 | 111,169 | |||||||||||||
Cohen & Steers, Inc. | 13,339 | 557,037 | |||||||||||||
Diamond Hill Investment Group, Inc. | 885 | 125,635 | |||||||||||||
Donnelley Financial Solutions, Inc.A | 6,651 | 94,511 |
See accompanying notes
13
American Beacon Zebra Small Cap Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 98.08% (continued) | |||||||||||||||
Financials - 19.55% (continued) | |||||||||||||||
Capital Markets - 1.47% (continued) | |||||||||||||||
GAMCO Investors, Inc., Class A | 4,742 | $ | 97,116 | ||||||||||||
Pzena Investment Management, Inc., Class A | 6,694 | 66,672 | |||||||||||||
Westwood Holdings Group, Inc. | 1,679 | 64,893 | |||||||||||||
|
| ||||||||||||||
1,117,033 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 0.48% | |||||||||||||||
Enova International, Inc.A | 9,208 | 234,988 | |||||||||||||
EZCORP, Inc., Class AA | 13,169 | 128,661 | |||||||||||||
|
| ||||||||||||||
363,649 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.18% | |||||||||||||||
Marlin Business Services Corp. | 5,590 | 131,589 | |||||||||||||
|
| ||||||||||||||
Insurance - 2.79% | |||||||||||||||
Enstar Group Ltd.A | 4,391 | 783,354 | |||||||||||||
Independence Holding Co. | 3,533 | 134,925 | |||||||||||||
Investors Title Co. | 425 | 72,424 | |||||||||||||
National General Holdings Corp. | 40,566 | 1,047,009 | |||||||||||||
NI Holdings, Inc.A | 5,199 | 78,453 | |||||||||||||
|
| ||||||||||||||
2,116,165 | |||||||||||||||
|
| ||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.16% | |||||||||||||||
Great Ajax Corp. | 8,899 | 117,734 | |||||||||||||
|
| ||||||||||||||
Thrifts & Mortgage Finance - 2.51% | |||||||||||||||
First Defiance Financial Corp. | 7,716 | 238,733 | |||||||||||||
Home Bancorp, Inc. | 3,803 | 134,512 | |||||||||||||
Mr Cooper Group, Inc.A | 58,575 | 799,549 | |||||||||||||
Southern Missouri Bancorp, Inc. | 3,931 | 142,224 | |||||||||||||
Waterstone Financial, Inc. | 6,659 | 112,137 | |||||||||||||
WSFS Financial Corp. | 11,058 | 478,590 | |||||||||||||
|
| ||||||||||||||
1,905,745 | |||||||||||||||
|
| ||||||||||||||
Total Financials | 14,822,627 | ||||||||||||||
|
| ||||||||||||||
Health Care - 16.27% | |||||||||||||||
Biotechnology - 3.09% | |||||||||||||||
Avid Bioservices, Inc.A | 31,881 | 124,017 | |||||||||||||
BioSpecifics Technologies Corp.A | 1,835 | 127,441 | |||||||||||||
ChemoCentryx, Inc.A | 12,853 | 138,170 | |||||||||||||
Emergent BioSolutions, Inc.A | 1,329 | 77,547 | |||||||||||||
Enanta Pharmaceuticals, Inc.A | 1,603 | 164,372 | |||||||||||||
Fennec Pharmaceuticals, Inc.A | 17,568 | 116,827 | |||||||||||||
FibroGen, Inc.A | 1,262 | 72,944 | |||||||||||||
Genomic Health, Inc.A | 6,200 | 471,014 | |||||||||||||
Halozyme Therapeutics, Inc.A | 8,340 | 143,865 | |||||||||||||
Myriad Genetics, Inc.A | 2,794 | 86,698 | |||||||||||||
Natera, Inc.A | 9,598 | 152,032 | |||||||||||||
PDL BioPharma, Inc.A | 29,977 | 108,816 | |||||||||||||
Repligen Corp.A | 2,644 | 157,371 | |||||||||||||
Retrophin, Inc.A | 5,923 | 133,623 | |||||||||||||
Vanda Pharmaceuticals, Inc.A | 3,605 | 72,965 | |||||||||||||
Veracyte, Inc.A | 6,533 | 132,032 | |||||||||||||
Xencor, Inc.A | 2,186 | 66,323 | |||||||||||||
|
| ||||||||||||||
2,346,057 | |||||||||||||||
|
| ||||||||||||||
See accompanying notes
14
American Beacon Zebra Small Cap Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 98.08% (continued) | |||||||||||||||
Health Care - 16.27% (continued) | |||||||||||||||
Health Care Equipment & Supplies - 5.29% | |||||||||||||||
Anika Therapeutics, Inc.A | 1,912 | $ | 62,388 | ||||||||||||
AtriCure, Inc.A | 6,206 | 198,220 | |||||||||||||
Atrion Corp. | 344 | 270,511 | |||||||||||||
AxoGen, Inc.A | 5,370 | 99,130 | |||||||||||||
Cardiovascular Systems, Inc.A | 2,680 | 94,792 | |||||||||||||
CONMED Corp. | 5,648 | 434,331 | |||||||||||||
FONAR Corp.A | 2,837 | 61,421 | |||||||||||||
Lantheus Holdings, Inc.A | 6,639 | 151,701 | |||||||||||||
LeMaitre Vascular, Inc. | 2,478 | 74,142 | |||||||||||||
Meridian Bioscience, Inc. | 11,900 | 203,133 | |||||||||||||
Neogen Corp.A | 10,612 | 657,519 | |||||||||||||
Orthofix Medical, Inc.A | 3,483 | 212,811 | |||||||||||||
Quidel Corp.A | 9,403 | 616,461 | |||||||||||||
RTI Surgical, Inc.A | 15,644 | 77,907 | |||||||||||||
SeaSpine Holdings Corp.A | 4,241 | 65,057 | |||||||||||||
STAAR Surgical Co.A | 7,091 | 260,949 | |||||||||||||
Surmodics, Inc.A | 2,294 | 133,855 | |||||||||||||
Utah Medical Products, Inc. | 703 | 59,671 | |||||||||||||
Varex Imaging Corp.A | 8,739 | 274,754 | |||||||||||||
|
| ||||||||||||||
4,008,753 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 4.18% | |||||||||||||||
Addus HomeCare Corp.A | 3,778 | 253,919 | |||||||||||||
Amedisys, Inc.A | 6,363 | 790,921 | |||||||||||||
CorVel Corp.A | 4,259 | 286,631 | |||||||||||||
Cross Country Healthcare, Inc.A | 7,214 | 63,050 | |||||||||||||
Ensign Group, Inc. | 14,893 | 736,459 | |||||||||||||
Magellan Health, Inc.A | 4,326 | 294,644 | |||||||||||||
National HealthCare Corp. | 3,028 | 246,509 | |||||||||||||
National Research Corp., Class A | 9,326 | 363,061 | |||||||||||||
RadNet, Inc.A | 10,143 | 138,351 | |||||||||||||
|
| ||||||||||||||
3,173,545 | |||||||||||||||
|
| ||||||||||||||
Health Care Technology - 1.56% | |||||||||||||||
HealthStream, Inc. | 4,836 | 134,441 | |||||||||||||
NextGen Healthcare, Inc.A | 14,956 | 261,730 | |||||||||||||
Omnicell, Inc.A | 9,238 | 784,768 | |||||||||||||
|
| ||||||||||||||
1,180,939 | |||||||||||||||
|
| ||||||||||||||
Life Sciences Tools & Services - 0.91% | |||||||||||||||
Harvard Bioscience, Inc.A | 21,948 | 88,231 | |||||||||||||
Luminex Corp. | 8,700 | 221,676 | |||||||||||||
NeoGenomics, Inc.A | 19,501 | 382,220 | |||||||||||||
|
| ||||||||||||||
692,127 | |||||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 1.24% | |||||||||||||||
Corcept Therapeutics, Inc.A B | 17,521 | 218,487 | |||||||||||||
Innoviva, Inc.A | 32,620 | 512,134 | |||||||||||||
Phibro Animal Health Corp., Class A | 7,059 | 206,829 | |||||||||||||
|
| ||||||||||||||
937,450 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 12,338,871 | ||||||||||||||
|
| ||||||||||||||
Industrials - 16.23% | |||||||||||||||
Air Freight & Logistics - 0.13% | |||||||||||||||
Radiant Logistics, Inc.A | 15,651 | 100,010 | |||||||||||||
|
| ||||||||||||||
See accompanying notes
15
American Beacon Zebra Small Cap Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 98.08% (continued) | |||||||||||||||
Industrials - 16.23% (continued) | |||||||||||||||
Building Products - 2.64% | |||||||||||||||
Apogee Enterprises, Inc. | 7,109 | $ | 253,720 | ||||||||||||
Builders FirstSource, Inc.A | 35,445 | 493,749 | |||||||||||||
CSW Industrials, Inc.A | 4,818 | 273,566 | |||||||||||||
Patrick Industries, Inc.A | 8,602 | 388,897 | |||||||||||||
Universal Forest Products, Inc. | 19,020 | 589,049 | |||||||||||||
|
| ||||||||||||||
1,998,981 | |||||||||||||||
|
| ||||||||||||||
Commercial Services & Supplies - 5.19% | |||||||||||||||
ACCO Brands Corp. | 40,293 | 374,725 | |||||||||||||
Deluxe Corp. | 11,862 | 551,939 | |||||||||||||
Ennis, Inc. | 7,871 | 166,865 | |||||||||||||
Herman Miller, Inc. | 18,664 | 684,595 | |||||||||||||
HNI Corp. | 11,230 | 433,815 | |||||||||||||
Interface, Inc. | 17,053 | 302,691 | |||||||||||||
Kimball International, Inc., Class B | 8,805 | 138,150 | |||||||||||||
Knoll, Inc. | 13,373 | 282,973 | |||||||||||||
Matthews International Corp., Class A | 11,489 | 456,918 | |||||||||||||
NL Industries, Inc.A | 54,482 | 235,907 | |||||||||||||
SP Plus Corp.A | 6,620 | 227,728 | |||||||||||||
VSE Corp. | 2,230 | 78,830 | |||||||||||||
|
| ||||||||||||||
3,935,136 | |||||||||||||||
|
| ||||||||||||||
Electrical Equipment - 0.10% | |||||||||||||||
Preformed Line Products Co. | 1,277 | 76,237 | |||||||||||||
|
| ||||||||||||||
Machinery - 2.86% | |||||||||||||||
Blue Bird Corp.A | 4,896 | 91,066 | |||||||||||||
Commercial Vehicle Group, Inc.A | 17,373 | 138,984 | |||||||||||||
Franklin Electric Co., Inc. | 13,624 | 724,933 | |||||||||||||
Global Brass & Copper Holdings, Inc. | 7,502 | 253,192 | |||||||||||||
Lydall, Inc.A | 3,470 | 97,681 | |||||||||||||
Miller Industries, Inc. | 2,621 | 88,878 | |||||||||||||
Omega Flex, Inc. | 2,137 | 157,924 | |||||||||||||
Park-Ohio Holdings Corp. | 7,302 | 232,131 | |||||||||||||
Standex International Corp. | 3,639 | 298,434 | |||||||||||||
Twin Disc, Inc.A | 4,907 | 86,805 | |||||||||||||
|
| ||||||||||||||
2,170,028 | |||||||||||||||
|
| ||||||||||||||
Professional Services - 1.77% | |||||||||||||||
Forrester Research, Inc. | 5,246 | 263,349 | |||||||||||||
GP Strategies Corp.A | 5,326 | 89,157 | |||||||||||||
Kelly Services, Inc., Class A | 15,242 | 367,790 | |||||||||||||
Kforce, Inc. | 7,618 | 281,942 | |||||||||||||
Resources Connection, Inc. | 5,689 | 98,818 | |||||||||||||
TrueBlue, Inc.A | 10,341 | 238,050 | |||||||||||||
|
| ||||||||||||||
1,339,106 | |||||||||||||||
|
| ||||||||||||||
Road & Rail - 0.38% | |||||||||||||||
Universal Logistics Holdings, Inc. | 12,954 | 286,931 | |||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 3.16% | |||||||||||||||
Applied Industrial Technologies, Inc. | 11,410 | 663,377 | |||||||||||||
BMC Stock Holdings, Inc.A | 21,583 | 412,883 | |||||||||||||
Foundation Building Materials, Inc.A | 14,097 | 156,759 | |||||||||||||
H&E Equipment Services, Inc. | 8,009 | 230,579 | |||||||||||||
Lawson Products, Inc.A | 2,879 | 90,890 | |||||||||||||
Rush Enterprises, Inc., Class A | 11,573 | 485,140 |
See accompanying notes
16
American Beacon Zebra Small Cap Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 98.08% (continued) | |||||||||||||||
Industrials - 16.23% (continued) | |||||||||||||||
Trading Companies & Distributors - 3.16% (continued) | |||||||||||||||
Systemax, Inc. | 13,859 | $ | 280,783 | ||||||||||||
Willis Lease Finance Corp.A | 1,817 | 76,423 | |||||||||||||
|
| ||||||||||||||
2,396,834 | |||||||||||||||
|
| ||||||||||||||
Total Industrials | 12,303,263 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 17.21% | |||||||||||||||
Communications Equipment - 1.54% | |||||||||||||||
Clearfield, Inc.A | 5,738 | 83,316 | |||||||||||||
DASAN Zhone Solutions, Inc.A | 5,897 | 81,555 | |||||||||||||
Plantronics, Inc. | 15,208 | 764,050 | |||||||||||||
Ribbon Communications, Inc.A | 45,689 | 235,298 | |||||||||||||
|
| ||||||||||||||
1,164,219 | |||||||||||||||
|
| ||||||||||||||
Electronic Equipment, Instruments & Components - 5.82% | |||||||||||||||
Anixter International, Inc.A | 10,934 | 641,607 | |||||||||||||
AVX Corp. | 63,853 | 1,162,125 | |||||||||||||
Bel Fuse, Inc., Class B | 4,446 | 108,705 | |||||||||||||
CTS Corp. | 9,745 | 313,009 | |||||||||||||
ePlus, Inc.A | 4,028 | 360,264 | |||||||||||||
Insight Enterprises, Inc.A | 14,009 | 781,982 | |||||||||||||
Kimball Electronics, Inc.A | 6,506 | 100,843 | |||||||||||||
Napco Security Technologies, Inc.A | 4,323 | 92,901 | |||||||||||||
PC Connection, Inc. | 10,998 | 442,560 | |||||||||||||
ScanSource, Inc.A | 10,836 | 406,892 | |||||||||||||
|
| ||||||||||||||
4,410,888 | |||||||||||||||
|
| ||||||||||||||
IT Services - 3.50% | |||||||||||||||
CSG Systems International, Inc. | 10,847 | 450,693 | |||||||||||||
Hackett Group, Inc. | 9,629 | 156,568 | |||||||||||||
Information Services Group, Inc.A | 19,228 | 82,873 | |||||||||||||
NIC, Inc. | 11,757 | 200,927 | |||||||||||||
Presidio, Inc. | 39,829 | 662,356 | |||||||||||||
PRGX Global, Inc.A | 6,823 | 64,000 | |||||||||||||
Sykes Enterprises, Inc.A | 16,426 | 486,045 | |||||||||||||
TTEC Holdings, Inc. | 16,181 | 554,361 | |||||||||||||
|
| ||||||||||||||
2,657,823 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 3.41% | |||||||||||||||
Advanced Energy Industries, Inc.A | 6,550 | 329,924 | |||||||||||||
Alpha & Omega Semiconductor Ltd.A | 8,744 | 94,085 | |||||||||||||
Amkor Technology, Inc.A | 75,087 | 659,264 | |||||||||||||
Cohu, Inc. | 11,599 | 207,506 | |||||||||||||
Entegris, Inc. | 36,572 | 1,292,089 | |||||||||||||
|
| ||||||||||||||
2,582,868 | |||||||||||||||
|
| ||||||||||||||
Software - 2.94% | |||||||||||||||
American Software, Inc., Class A | 6,922 | 80,226 | |||||||||||||
Ebix, Inc.B | 8,602 | 501,239 | |||||||||||||
j2 Global, Inc. | 14,598 | 1,240,976 | |||||||||||||
MajescoA | 11,140 | 81,099 | |||||||||||||
QAD, Inc., Class A | 4,066 | 184,027 | |||||||||||||
Zix Corp.A | 15,949 | 144,019 | |||||||||||||
|
| ||||||||||||||
2,231,586 | |||||||||||||||
|
| ||||||||||||||
Total Information Technology | 13,047,384 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
17
American Beacon Zebra Small Cap Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 98.08% (continued) | |||||||||||||||
Materials - 4.03% | |||||||||||||||
Chemicals - 3.69% | |||||||||||||||
Chase Corp. | 2,416 | $ | 233,265 | ||||||||||||
Hawkins, Inc. | 2,398 | 98,846 | |||||||||||||
Innophos Holdings, Inc. | 5,154 | 171,113 | |||||||||||||
Innospec, Inc. | 9,115 | 746,154 | |||||||||||||
Koppers Holdings, Inc.A | 8,142 | 200,212 | |||||||||||||
Kronos Worldwide, Inc. | 39,405 | 600,926 | |||||||||||||
OMNOVA Solutions, Inc.A | 15,281 | 124,540 | |||||||||||||
Tredegar Corp. | 7,086 | 123,438 | |||||||||||||
Valhi, Inc. | 123,523 | 500,268 | |||||||||||||
|
| ||||||||||||||
2,798,762 | |||||||||||||||
|
| ||||||||||||||
Construction Materials - 0.15% | |||||||||||||||
United States Lime & Minerals, Inc. | 1,549 | 111,528 | |||||||||||||
|
| ||||||||||||||
Metals & Mining - 0.19% | |||||||||||||||
Olympic Steel, Inc. | 3,581 | 69,543 | |||||||||||||
Synalloy Corp. | 4,938 | 75,403 | |||||||||||||
|
| ||||||||||||||
144,946 | |||||||||||||||
|
| ||||||||||||||
Total Materials | 3,055,236 | ||||||||||||||
|
| ||||||||||||||
Real Estate - 5.64% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 3.69% | |||||||||||||||
Alexander’s, Inc. | 1,126 | 429,805 | |||||||||||||
BRT Apartments Corp. | 6,747 | 89,735 | |||||||||||||
LTC Properties, Inc. | 9,647 | 428,520 | |||||||||||||
NexPoint Residential Trust, Inc. | 6,348 | 228,147 | |||||||||||||
One Liberty Properties, Inc. | 3,805 | 109,660 | |||||||||||||
PotlatchDeltic Corp. | 12,995 | 467,690 | |||||||||||||
PS Business Parks, Inc. | 5,103 | 751,009 | |||||||||||||
Saul Centers, Inc. | 5,118 | 290,037 | |||||||||||||
|
| ||||||||||||||
2,794,603 | |||||||||||||||
|
| ||||||||||||||
Real Estate Management & Development - 1.95% | |||||||||||||||
Consolidated-Tomoka Land Co. | 1,138 | 67,256 | |||||||||||||
HFF, Inc., Class A | 9,040 | 408,608 | |||||||||||||
Marcus & Millichap, Inc.A | 10,845 | 418,834 | |||||||||||||
Maui Land & Pineapple Co., Inc.A | 5,362 | 61,180 | |||||||||||||
RE/MAX Holdings, Inc., Class A | 2,459 | 96,467 | |||||||||||||
RMR Group, Inc., Class A | 5,147 | 368,268 | |||||||||||||
Stratus Properties, Inc.A | 2,507 | 60,920 | |||||||||||||
|
| ||||||||||||||
1,481,533 | |||||||||||||||
|
| ||||||||||||||
Total Real Estate | 4,276,136 | ||||||||||||||
|
| ||||||||||||||
Utilities - 2.43% | |||||||||||||||
Electric Utilities - 1.61% | |||||||||||||||
MGE Energy, Inc. | 8,379 | 535,586 | |||||||||||||
Otter Tail Corp. | 13,659 | 686,774 | |||||||||||||
|
| ||||||||||||||
1,222,360 | |||||||||||||||
|
| ||||||||||||||
Gas Utilities - 0.08% | |||||||||||||||
RGC Resources, Inc. | 2,218 | 61,128 | |||||||||||||
|
| ||||||||||||||
Water Utilities - 0.74% | |||||||||||||||
Artesian Resources Corp., Class A | 2,251 | 88,329 | |||||||||||||
Consolidated Water Co., Ltd. | 5,452 | 72,021 |
See accompanying notes
18
American Beacon Zebra Small Cap Equity FundSM
Schedule of Investments
February 28, 2019 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 98.08% (continued) | |||||||||||||||
Utilities - 2.43% (continued) | |||||||||||||||
Water Utilities - 0.74% (continued) | |||||||||||||||
Middlesex Water Co. | 5,013 | $ | 295,115 | ||||||||||||
York Water Co. | 2,937 | 107,054 | |||||||||||||
|
| ||||||||||||||
562,519 | |||||||||||||||
|
| ||||||||||||||
Total Utilities | 1,846,007 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $68,400,931) | 74,374,972 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 1.65% (Cost $1,250,188) | |||||||||||||||
Investment Companies - 1.65% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 2.33%C D | 1,250,188 | 1,250,188 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 0.90% (Cost $679,578) | |||||||||||||||
Investment Companies - 0.90% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, Select Class, 2.33%C D | 679,578 | 679,578 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 100.63% (Cost $70,330,697) | 76,304,738 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (0.63%) | (478,141 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 75,826,597 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
ANon-income producing security.
B All or a portion of this security is on loan at February 28, 2019.
C The Fund is affiliated by having the same investment advisor.
D7-day yield.
Long Futures Contracts Open on February 28, 2019: |
| |||||||||||||
Equity Futures Contracts | ||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||
Russell 2000E-Mini Index Futures | 15 | March 2019 | $ 1,151,386 | $ | 1,181,625 | $ | 30,239 | |||||||
|
|
|
|
| ||||||||||
$ 1,151,386 | $ | 1,181,625 | $ | 30,239 | ||||||||||
|
|
|
|
|
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of February 28, 2019, the investments were classified as described below:
Zebra Small Cap Equity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 74,374,972 | $ | - | $ | - | $ | 74,374,972 | ||||||||||||||||||||
Short-Term Investments | 1,250,188 | - | - | 1,250,188 | ||||||||||||||||||||||||
Securities Lending Collateral | 679,578 | - | - | 679,578 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 76,304,738 | $ | - | $ | - | $ | 76,304,738 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||||||
Futures Contracts | $ | 30,239 | $ | - | $ | - | $ | 30,239 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 30,239 | $ | - | $ | - | $ | 30,239 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP requires transfers between all levels to/from level 3 to be disclosed. During the period ended February 28, 2019, there were no transfers into or out of Level 3.
See accompanying notes
19
Statements of Assets and Liabilities
February 28, 2019 (Unaudited)
The London Company Income Equity Fund | Zebra Small Cap Equity Fund | |||||||||||
Assets: | ||||||||||||
Investments in unaffiliated securities, at fair value†§ | $ | 987,107,902 | $ | 74,374,972 | ||||||||
Investments in affiliated securities, at fair value‡ | 41,677,597 | 1,929,766 | ||||||||||
Deposits with broker for futures contracts | - | 11,255 | ||||||||||
Dividends and interest receivable | 3,325,985 | 73,939 | ||||||||||
Receivable for fund shares sold | 5,311,678 | 160,946 | ||||||||||
Receivable for expense reimbursement (Note 2) | - | 12,483 | ||||||||||
Receivable for variation margin on open futures contracts (Note 5) | 1,829,070 | 30,292 | ||||||||||
Prepaid expenses | 49,169 | 35,467 | ||||||||||
|
|
|
| |||||||||
Total assets | 1,039,301,401 | 76,629,120 | ||||||||||
|
|
|
| |||||||||
Liabilities: | ||||||||||||
Payable for fund shares redeemed | 662,782 | 28,108 | ||||||||||
Cash due to broker for futures contracts | 288,932 | - | ||||||||||
Management andsub-advisory fees payable (Note 2) | 504,381 | 50,121 | ||||||||||
Service fees payable (Note 2) | 116,818 | 5,017 | ||||||||||
Transfer agent fees payable (Note 2) | 48,884 | 4,392 | ||||||||||
Payable upon return of securities loaned (Note 8)§ | - | 679,578 | ||||||||||
Custody and fund accounting fees payable | 37,065 | 8,383 | ||||||||||
Professional fees payable | 25,636 | 25,548 | ||||||||||
Trustee fees payable (Note 2) | 15,811 | 955 | ||||||||||
Payable for prospectus and shareholder reports | 24,922 | 176 | ||||||||||
Other liabilities | 4,143 | 245 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 1,729,374 | 802,523 | ||||||||||
|
|
|
| |||||||||
Net assets | $ | 1,037,572,027 | $ | 75,826,597 | ||||||||
|
|
|
| |||||||||
Analysis of net assets: |
| |||||||||||
Paid-in-capital | $ | 773,558,259 | $ | 72,847,374 | ||||||||
Total distributable earnings (deficits)A | 264,013,768 | 2,979,223 | ||||||||||
|
|
|
| |||||||||
Net assets | $ | 1,037,572,027 | $ | 75,826,597 | ||||||||
|
|
|
| |||||||||
Shares outstanding at no par value (unlimited shares authorized): |
| |||||||||||
Institutional Class | 12,930,009 | 842,849 | ||||||||||
|
|
|
| |||||||||
Y Class | 34,265,489 | 2,936,568 | ||||||||||
|
|
|
| |||||||||
Investor Class | 1,348,184 | 678,606 | ||||||||||
|
|
|
| |||||||||
A Class | 3,200,034 | 242,469 | ||||||||||
|
|
|
| |||||||||
C Class | 7,256,655 | 196,291 | ||||||||||
|
|
|
| |||||||||
Net assets: |
| |||||||||||
Institutional Class | $ | 228,712,142 | $ | 13,051,190 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 602,908,870 | $ | 45,823,825 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 23,756,834 | $ | 10,388,339 | ||||||||
|
|
|
| |||||||||
A Class | $ | 56,052,334 | $ | 3,717,733 | ||||||||
|
|
|
| |||||||||
C Class | $ | 126,141,847 | $ | 2,845,510 | ||||||||
|
|
|
| |||||||||
Net asset value, offering and redemption price per share: |
| |||||||||||
Institutional Class | $ | 17.69 | $ | 15.48 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 17.60 | $ | 15.60 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 17.62 | $ | 15.31 | ||||||||
|
|
|
| |||||||||
A Class | $ | 17.52 | $ | 15.33 | ||||||||
|
|
|
| |||||||||
A Class (offering price) | $ | 18.59 | $ | 16.27 | ||||||||
|
|
|
| |||||||||
C Class | $ | 17.38 | $ | 14.50 | ||||||||
|
|
|
| |||||||||
† Cost of investments in unaffiliated securities | $ | 764,428,675 | $ | 68,400,931 | ||||||||
‡ Cost of investments in affiliated securities | $ | 41,677,597 | $ | 1,929,766 | ||||||||
§ Fair value of securities on loan | $ | - | $ | 656,807 | ||||||||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
20
American Beacon FundsSM
Statements of Operations
For the period ended February 28, 2019 (Unaudited)
The London Company Income Equity Fund | Zebra Small Cap Equity Fund | |||||||||||
Investment income: |
| |||||||||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 14,406,346 | $ | 673,339 | ||||||||
Dividend income from affiliated securities (Note 8) | 364,294 | 12,180 | ||||||||||
Interest income | 5,710 | 253 | ||||||||||
Income derived from securities lending (Note 9) | - | 817 | ||||||||||
|
|
|
| |||||||||
Total investment income | 14,776,350 | 686,589 | ||||||||||
|
|
|
| |||||||||
Expenses: |
| |||||||||||
Management andsub-advisory fees (Note 2) | 3,201,764 | 308,480 | ||||||||||
Transfer agent fees: | ||||||||||||
Institutional Class (Note 2) | 20,563 | 2,801 | ||||||||||
Y Class (Note 2) | 242,207 | 14,181 | ||||||||||
Investor Class | 1,260 | 898 | ||||||||||
A Class | 1,785 | 317 | ||||||||||
C Class | 2,949 | 316 | ||||||||||
Custody and fund accounting fees | 57,567 | 16,087 | ||||||||||
Professional fees | 40,660 | 22,988 | ||||||||||
Registration fees and expenses | 43,725 | 37,471 | ||||||||||
Service fees (Note 2): | ||||||||||||
Investor Class | 41,971 | 15,798 | ||||||||||
A Class | 29,444 | 2,395 | ||||||||||
C Class | 72,319 | 1,546 | ||||||||||
Distribution fees (Note 2): | ||||||||||||
A Class | 67,368 | 5,043 | ||||||||||
C Class | 616,783 | 14,204 | ||||||||||
Prospectus and shareholder report expenses | 21,641 | 3,161 | ||||||||||
Trustee fees (Note 2) | 32,160 | 2,112 | ||||||||||
Other expenses | 20,571 | 3,219 | ||||||||||
|
|
|
| |||||||||
Total expenses | 4,514,737 | 451,017 | ||||||||||
|
|
|
| |||||||||
Net fees waived and expenses (reimbursed) / recouped (Note 2) | - | (80,407 | ) | |||||||||
|
|
|
| |||||||||
Net expenses | 4,514,737 | 370,610 | ||||||||||
|
|
|
| |||||||||
Net investment income | 10,261,613 | 315,979 | ||||||||||
|
|
|
| |||||||||
Realized and unrealized gain (loss) from investments: |
| |||||||||||
Net realized gain from: | ||||||||||||
Investments in unaffiliated securitiesA | 44,031,646 | (2,858,770 | ) | |||||||||
Commission recapture (Note 1) | 2,790 | - | ||||||||||
Foreign currency transactions | - | (81 | ) | |||||||||
Futures contracts | (1,348,460 | ) | (6,940 | ) | ||||||||
Change in net unrealized appreciation (depreciation) of: | ||||||||||||
Investments in unaffiliated securitiesB | (49,367,528 | ) | (1,810,149 | ) | ||||||||
Futures contracts | 1,550,418 | 21,122 | ||||||||||
|
|
|
| |||||||||
Net (loss) from investments | (5,131,134 | ) | (4,654,818 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | $ | 5,130,479 | $ | (4,338,839 | ) | |||||||
|
|
|
| |||||||||
† Foreign taxes | $ | - | $ | 2,104 | ||||||||
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
21
American Beacon FundsSM
Statements of Changes in Net Assets
The London Company Income Equity Fund | Zebra Small Cap Equity Fund | |||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||||||||||||||
Operations: |
| |||||||||||||||||||||||||||
Net investment income | $ | 10,261,613 | $ | 20,475,574 | $ | 315,979 | $ | 276,643 | ||||||||||||||||||||
Net realized gain (loss) from investments in unaffiliated securities, commission recapture, foreign currency transactions, and futures contracts | 42,685,976 | 21,722,969 | (2,865,791 | ) | 6,346,625 | |||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, and futures contracts | (47,817,110 | ) | 105,835,036 | (1,789,027 | ) | 5,661,903 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 5,130,479 | 148,033,579 | (4,338,839 | ) | 12,285,171 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Distributions to shareholders: |
| |||||||||||||||||||||||||||
Net investment income: | ||||||||||||||||||||||||||||
Institutional Class | - | (4,670,451 | ) | - | (15,431 | ) | ||||||||||||||||||||||
Y Class | - | (12,791,912 | ) | - | (56,016 | ) | ||||||||||||||||||||||
Investor Class | - | (579,365 | ) | - | (11,670 | ) | ||||||||||||||||||||||
A Class | - | (1,295,100 | ) | - | (4,944 | ) | ||||||||||||||||||||||
C Class | - | (1,456,384 | ) | - | - | |||||||||||||||||||||||
Net realized gain from investments: | ||||||||||||||||||||||||||||
Institutional Class | - | - | - | (616,281 | ) | |||||||||||||||||||||||
Y Class | - | - | - | (2,237,225 | ) | |||||||||||||||||||||||
Investor Class | - | - | - | (597,062 | ) | |||||||||||||||||||||||
A Class | - | - | - | (300,058 | ) | |||||||||||||||||||||||
C Class | - | - | - | (180,750 | ) | |||||||||||||||||||||||
Total retained earnings:* | ||||||||||||||||||||||||||||
Institutional Class | (6,080,288 | ) | - | (1,075,441 | ) | - | ||||||||||||||||||||||
Y Class | (15,339,546 | ) | - | (3,866,855 | ) | - | ||||||||||||||||||||||
Investor Class | (652,521 | ) | - | (847,909 | ) | - | ||||||||||||||||||||||
A Class | (1,429,396 | ) | - | (345,371 | ) | - | ||||||||||||||||||||||
C Class | (2,858,502 | ) | - | (277,583 | ) | - | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net distributions to shareholders | (26,360,253 | ) | (20,793,212 | ) | (6,413,159 | ) | (4,019,437 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Capital share transactions (Note 11): |
| |||||||||||||||||||||||||||
Proceeds from sales of shares | 149,894,385 | 187,282,549 | 21,678,737 | 59,061,135 | ||||||||||||||||||||||||
Reinvestment of dividends and distributions | 15,049,221 | 11,435,964 | 6,373,935 | 3,987,828 | ||||||||||||||||||||||||
Cost of shares redeemed | (140,022,488 | ) | (455,348,646 | ) | (19,777,064 | ) | (35,541,319 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets from capital share transactions | 24,921,118 | (256,630,133 | ) | 8,275,608 | 27,507,644 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets | 3,691,344 | (129,389,766 | ) | (2,476,390 | ) | 35,773,378 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net assets: |
| |||||||||||||||||||||||||||
Beginning of period | 1,033,880,683 | 1,163,270,449 | 78,302,987 | 42,529,609 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
End of period | $ | 1,037,572,027 | $ | 1,033,880,683 | $ | 75,826,597 | $ | 78,302,987 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
* Distributions from net investment income and net realized capital gains are combined for the period ended February 28, 2019. See Note 1 in the Notes to Financial Statements for more information regarding new accounting pronouncements. |
|
See accompanying notes
22
American Beacon FundsSM
February 28, 2019 (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, as amended (the “Act”), as diversified,open-end management investment companies. As of February 28, 2019, the Trust consists of thirty-three active series, two of which are presented in this filing: American Beacon The London Company Income Equity Fund and American Beacon Zebra Small Cap Equity Fund (collectively, the “Funds” and each individually a “Fund”). The remainingthirty-one active series are reported in separate filings.
American Beacon Advisors, Inc. (the “Manager”) is a Delaware corporation and a wholly-owned subsidiary of Resolute Investment Managers, Inc. (“RIM”) organized in 1986 to provide business management, advisory, administrative, and asset management consulting services to the Trust and other investors. The Manager is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). RIM is, in turn, a wholly-owned subsidiary of Resolute Acquisition, Inc., which is a wholly-owned subsidiary of Resolute Topco, Inc., a wholly-owned subsidiary of Resolute Investment Holdings, LLC (“RIH”). RIH is owned primarily by Kelso Investment Associates VIII, L.P., KEP VI, LLC and Estancia Capital Partners L.P., investment funds affiliated with Kelso & Company, L.P. (“Kelso”) or Estancia Capital Management, LLC (“Estancia”), which are private equity firms.
Recently Adopted Accounting Pronouncements
In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2017-08,Premium Amortization of Purchased Callable Debt Securities. The amendments in the ASU shorten the premium amortization period on a purchased callable debt security from the security’s contractual life to the earliest call date. It is anticipated that this change will enhance disclosures by reducing losses recognized when a security is called on an earlier date. This ASU is effective for fiscal years beginning after December 15, 2018. The Manager continues to evaluate the impact this ASU will have on the financial statements and other disclosures.
In August 2018, the FASB issued ASU2018-13,Fair Value Measurement (“Topic 820”). The amendments in the ASU impact disclosure requirements for fair value measurement. It is anticipated that this change will enhance the effectiveness of disclosures in the notes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and can include the entire standard or certain provisions that exclude or amend disclosures. For the period ended February 28, 2019, the Funds have chosen to adopt the standard. The adoption of this ASU guidance did not have a material impact on the financial statements and other disclosures.
In August 2018, the U.S. Securities and Exchange Commission (“SEC”) adopted amendments to certain disclosure requirements in Securities Act ReleaseNo. 33-10532, Disclosure Update and Simplification, which is intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. Effective with the current reporting period, the Funds adopted the amendments with the impacts being that the Funds are no longer required to present components of distributable earnings on the Statements of Assets and Liabilities or the sources of distributable earnings and the amount of undistributed net investment income on the Statements of Changes in Net Assets.
23
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Class Disclosure
Each Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
Institutional | Large institutional investors—sold directly or through intermediary channels. | $ | 250,000 | |||
Y Class | Large institutional retirement plan investors—sold directly or through intermediary channels. | $ | 100,000 | |||
Investor | All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include afront-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 |
Each class offered by the Trust has equal rights as to assets and voting privileges. Income andnon-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, andsub-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 FASB Accounting Standards 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 theex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Funds. Interest income, net of foreign taxes, 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. Dividends, 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. If all or a portion of any Fund distribution exceeds the sum of the Fund’s investment company taxable income and realized net capital gain for a taxable year, the excess would be treated (i) first, as dividend
24
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
income to the extent of the Fund’s current or accumulated earnings and profits, as calculated for federal income tax purposes (“E&P”), (ii) then as atax-free “return of capital,” reducing a Shareholder’s adjusted tax basis in his or her Shares (which would result in a higher tax liability when the Shares are sold, even if they had not increased in value, or, in fact, had lost value), and (iii) then, after that basis is reduced to zero, as realized capital gain (assuming the Shares are held as capital assets), long- or short-term, depending on the Shareholder’s holding period for the Shares.
Section 19(a) of the Investment Company Act and Rule19a-1 thereunder require the Fund to provide a written statement accompanying any distribution from a source other than net income that adequately discloses its source or sources. Thus, if the source of a distribution were the original capital contribution of the Shareholder, and the payment amounted to a return of capital, the Fund would be required to provide written disclosure to that effect. Nevertheless, persons who periodically receive the payment of a dividend or other distribution may be under the impression that they are receiving net profits when they are not. Shareholders should read any written disclosure provided pursuant to Section 19(a) and Rule19a-1 carefully and should not assume that the source of any distribution from the Fund is net profit.
Commission Recapture
The Funds have established brokerage commission recapture arrangements with certain brokers or dealers. If the 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. For the period ended February 28, 2019, there was recapture in The London Company Income Equity Fund.
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 the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust, American Beacon Select Funds, American Beacon Institutional Funds Trust, American Beacon Sound Point Enhanced Income Fund, and American Beacon Apollo Total Return Fund (the “Trusts”) will be allocated among and charged to the assets of the Funds on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Funds or nature of the services performed and relative applicability to the Funds.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.
25
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
2. Transactions with Affiliates
Management and InvestmentSub-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 the Funds’ average daily net assets that is calculated and accrued daily according to the following schedule:
First $5 billion | 0.35 | % | ||
Next $5 billion | 0.325 | % | ||
Next $10 billion | 0.30 | % | ||
Over $20 billion | 0.275 | % |
The Trust, on behalf of the Funds, and the Manager have entered into an Investment Advisory Agreement with the followingSub-Advisors pursuant to which each Fund has agreed to pay an annualizedsub-advisory fee that is calculated and accrued daily based on the applicable Fund’s average daily net assets according to the following schedules:
The London Company of Virginia, LLC
First $25 million | 0.40 | % | ||
Next $225 million | 0.35 | % | ||
Over $250 million | 0.30 | % |
Zebra Capital Management, LLC
First $350 million | 0.55 | % | ||
Next $400 million | 0.50 | % | ||
Over $750 million | 0.45 | % |
The Management andSub-Advisory Fees paid by the Funds for the period ended February 28, 2019 were as follows:
The London Company Income Equity Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 1,698,139 | ||||||||
Sub-Advisor Fees | 0.30 | % | 1,503,625 | |||||||||
|
|
|
| |||||||||
Total | 0.65 | % | $ | 3,201,764 | ||||||||
|
|
|
|
Zebra Small Cap Equity Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 121,119 | ||||||||
Sub-Advisor Fees | 0.55 | % | 187,361 | |||||||||
|
|
|
| |||||||||
Total | 0.90 | % | $ | 308,480 | ||||||||
|
|
|
|
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Funds pay to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statements of Operations. During the period ended February 28, 2019, the Manager received securities lending fees of $98 for the securities lending activities of Zebra Small Cap Equity Fund.
26
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Distribution Plans
The Funds, except for the A and C Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule12b-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 Rule12b-1 under the Act for the A and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Manager receives an annual fee up of 0.25% of the average daily net assets of the A Class and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.
Service Plans
The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor, A, and C Classes of the Funds. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes and up to 0.375% of the average daily net assets of the Investor Class of the Funds.
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 certainnon-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 February 28, 2019, thesub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
The London Company Income Equity | $ | 248,487 | ||
Zebra Small Cap Equity | 15,017 |
As of February 28, 2019, the Funds owed the Manager the following reimbursement ofsub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
The London Company Income Equity | $ | 40,876 | ||
Zebra Small Cap Equity | 3,375 |
27
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
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 February 28, 2019, 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 | |||||||||
The London Company Income Equity | $ | 16,628 | $ | - | $ | 16,628 | ||||||
Zebra Small Cap Equity | 574 | 114 | 688 |
Interfund Credit Facility
Pursuant to an exemptive order issued by the 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 February 28, 2019, the Zebra Small Cap Equity Fund borrowed on average $621,929 for 9 days at an average rate of 2.89% with interest charges of $440. During the period ended February 28, 2019, The London Company Income Equity 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 Funds to the extent that total operating expenses exceed the Funds’ expense cap. During the period ended February 28, 2019, the Manager waived and/or reimbursed expenses as follows:
Class | Expense Cap | Reimbursed Expenses | (Recouped) Expenses | Expiration of Reimbursed Expenses | ||||||||||||||
Fund | 9/1/2018 - 2/28/2019 | |||||||||||||||||
Zebra Small Cap Equity | Institutional | 0.89 | % | $ | 16,620 | $ | - | 2022 | ||||||||||
Zebra Small Cap Equity | Y | 0.99 | % | 45,230 | - | 2022 | ||||||||||||
Zebra Small Cap Equity | Investor | 1.27 | % | 10,686 | - | 2022 | ||||||||||||
Zebra Small Cap Equity | A | 1.29 | % | 4,624 | - | 2022 | ||||||||||||
Zebra Small Cap Equity | C | 2.04 | % | 3,247 | - | 2022 |
Of these amounts, $12,483 was disclosed as a receivable from the Manager on the Statements of Assets and Liabilities at February 28, 2019 for the Zebra Small Cap Equity 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
28
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
any contractual 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 2022. The Fund did not record a liability for potential reimbursements, due to the current assessment that a reimbursement is unlikely. The carryover of excess expenses potentially reimbursable to the Manager are as follows:
Fund | Recouped Expenses | Excess Expense Carryover | Expired Expense Carryover | Expiration of Reimbursed Expenses | ||||||||||||
Zebra Small Cap Equity | $ | - | $ | 130,345 | $ | - | 2019 | |||||||||
Zebra Small Cap Equity | - | 144,028 | - | 2020 | ||||||||||||
Zebra Small Cap Equity | - | 165,989 | - | 2021 |
Sales Commissions
The Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers and it may be used to offset distribution related expenses. During the period ended February 28, 2019, RID collected $14,518 and $3,724 for The London Company Income Equity Fund and Zebra Small Cap Equity 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 February 28, 2019, CDSC fees of $8 were collected for the Class A Shares of Zebra Small Cap Equity Fund. During the period ended February 28, 2019, there were no CDSC fees collected for Class A Shares of The London Company Income Equity 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 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, 2019, CDSC fees of $1,826 were collected for Class C Shares of the The London Company Income Equity Fund. There were no CDSC fees collected for Class C Shares of the Zebra Small Cap Equity Fund.
Trustee Fees and Expenses
As compensation for their service to the Trust’s, 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 attendance at the committee meetings. The Chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each fund of the Trusts according to its respective net assets.
3. Security Valuation and Fair Value Measurements
The price of the Fund’s shares is based on its net asset value (“NAV”) per share. The Fund’s NAV is computed by adding total assets, subtracting all the Fund’s liabilities, and dividing the result by the total number of shares outstanding.
29
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
The NAV of each class of the Fund’s shares is determined based on a pro rata allocation of the Fund’s investment income, expenses and total capital gains and losses. The Fund’s NAV per share is determined each business day as of the regular close of trading on the New York Stock Exchange (“NYSE” or “Exchange”), which is typically 4:00 p.m. Eastern Time (“ET”). However, if trading on the NYSE closes at a time other than 4:00 p.m. ET, the Fund’s NAV per share typically would still be determined as of the regular close of trading on the NYSE. The Fund does not price its shares on days that the NYSE is closed. Foreign exchanges may permit trading in foreign securities on days when the Fund is not open for business, which may result in the value of the Fund’s portfolio investments being affected at a time when you are unable to buy or sell shares.
Equity securities, including shares ofclosed-end funds and exchange-traded funds (“ETFs”), are valued at the last sale price or official closing price taken from the primary exchange in which each security trades. Investments in other mutual funds are valued at the closing NAV per share on the day of valuation. Debt securities are valued at bid quotes from broker/dealers or evaluated bid prices from pricing services, who may consider a number of inputs and factors, such as prices of comparable securities, yield curves, spreads, credit ratings, coupon rates, maturity, default rates, and underlying collateral. Futures are valued based on their daily settlement prices. Exchange-traded andover-the-counter (“OTC”) options are valued at the last sale price. Options with no last sale for the day are priced at mid quote. Swaps are valued at evaluated mid prices from pricing services.
The valuation of securities traded on foreign markets and certain fixed income securities will generally be based on prices determined as of the earlier closing time of the markets on which they primarily trade unless a significant event has occurred. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. ET.
Securities may be valued at fair value, as determined in good faith and pursuant to procedures approved by the Board, under certain limited circumstances. For example, fair value pricing will be used when market quotations are not readily available or reliable, as determined by the Manager, such as when (i) trading for a security is restricted or stopped; (ii) a security’s trading market is closed (other than customary closings); or (iii) a security has beende-listed from a national exchange. A security with limited market liquidity may require fair value pricing if the Manager determines that the available price does not reflect the security’s true market value. In addition, if a significant event that the Manager determines to affect the value of one or more securities held by the Fund occurs after the close of a related exchange but before the determination of the Fund’s NAV, fair value pricing may be used on the affected security or securities. Securities of small-capitalization companies are also more likely to require a fair value determination using these procedures because they are more thinly traded and less liquid than the securities of larger-capitalization companies. The Fund may fair value securities as a result of significant events occurring after the close of the foreign markets in which the Fund invests as described below. In addition, the Fund may invest in illiquid securities requiring these procedures.
The Fund may use fair value pricing for securities primarily traded innon-U.S. markets because most foreign markets close well before the Fund’s pricing time of 4:00 p.m. ET. 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. If the Manager determines that the last quoted prices ofnon-U.S. securities will, in its judgment, materially affect the value of some or all its portfolio securities, the Manager can 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. These securities are fair valued using a pricing service, using methods approved by the Board, that 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 Depositary Receipts (“ADRs”) and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. The Fund uses outside pricing services to provide closing prices and information to evaluate and/
30
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
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.
Attempts to determine the fair value of securities introduce an element of subjectivity to the pricing of securities. As a result, the price of a security determined through fair valuation techniques may differ from the price quoted or published by other sources and may not accurately reflect the market value of the security when trading resumes. If a reliable market quotation becomes available for a security formerly valued through fair valuation techniques, the Manager compares the new market quotation to the fair value price to evaluate the effectiveness of the Fund’s fair valuation procedures. If any significant discrepancies are found, the Manager may adjust the Fund’s fair valuation procedures.
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.
Investments in registeredopen-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
4. Securities and Other Investments
American Depositary Receipts
ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers, and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Funds’ possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Funds may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Funds to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.
31
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
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.
Other Investment Company Securities and Other Exchange-Traded Products
The Funds may invest in shares of other investment companies, includingopen-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 asub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Funds become a shareholder of that investment company. As a result, the Funds’ shareholders indirectly will bear the Funds’ proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Funds’ shareholders directly bear in connection with the Funds’ own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Funds in their Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
Real Estate Investment Trusts
The Funds may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Fundsre-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, there-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, are-characterization will be made the following year.
5. Financial Derivative Instruments
The Funds may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Funds’ use of derivatives, it is important to note that the Funds do not use derivatives for the purpose of creating financial leverage.
Futures Contracts
Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Funds may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities or that the counterparty will fail to perform its obligations.
32
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
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 February 28, 2019, the Funds entered into futures contracts primarily for exposing cash to markets.
The Funds’ average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.
Average Futures Contracts Outstanding | ||||
Fund | Period Ended February 28, 2019 | |||
The London Company Income Equity | 198 | |||
Zebra Small Cap Equity | 12 |
The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure(1):
The London Company Income Equity Fund
Fair values of financial instruments on the Statements of Assets and Liabilities as of February 28, 2019: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | $ | - | $ | - | $ | - | $ | - | $ | 1,828,468 | $ | 1,828,468 | |||||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statements of Operations as of February 28, 2019: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | - | $ | - | $ | - | $ | - | $ | (1,348,460 | ) | $ | (1,348,460 | ) | |||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | - | $ | - | $ | - | $ | - | $ | 1,550,418 | $ | 1,550,418 |
33
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Zebra Small Cap Equity Fund
Fair values of financial instruments on the Statements of Assets and Liabilities as of February 28, 2019: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | $ | - | $ | - | $ | - | $ | - | $ | 30,239 | $ | 30,239 | |||||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statements of Operations as of February 28, 2019: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | - | $ | - | $ | - | $ | - | $ | (6,940 | ) | $ | (6,940 | ) | |||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | - | $ | - | $ | - | $ | - | $ | 21,122 | $ | 21,122 |
(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.
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, February 28, 2019.
The London Company Income Equity Fund
Offsetting of Financial and Derivative Assets as of February 28, 2019: |
| |||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts(1) | $ | 1,828,468 | $ | - | ||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 1,828,468 | $ | - | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (1,828,468 | ) | $ | - | |||||||
|
|
|
|
Zebra Small Cap Equity Fund
Offsetting of Financial and Derivative Assets as of February 28, 2019: |
| |||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts(1) | $ | 30,239 | $ | - | ||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 30,239 | $ | - | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (30,239 | ) | $ | - | |||||||
|
|
|
|
34
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Remaining Contractual Maturity of the Agreements As of February 28, 2019 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 679,578 | $ | - | $ | - | $ | - | $ | 679,578 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total Borrowings | $ | 679,578 | $ | - | $ | - | $ | - | $ | 679,578 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
6. Principal Risks
Investing in the Funds may involve certain risks including, but not limited to, those described below.
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. A decline in the credit rating of an individual security held by a Fund may have an adverse impact on its price and make it difficult for a Fund to sell it. Ratings represent a rating agency’s opinion regarding the quality of the security and are not a guarantee of quality. Rating agencies might not always change their credit rating on an issuer or security in a timely manner to reflect events that could affect the issuer’s ability to make timely payments on its obligations. Credit risk is typically greater for securities with ratings that are below investment grade.
Derivatives Risk
Derivatives may involve significant risk. The use of derivative instruments may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities or other instruments underlying those derivatives, including the high degree of leverage often embedded in such instruments, and potential material and prolonged deviations between the theoretical value and realizable value of a derivative. Some derivatives have the potential for unlimited loss, regardless of the size of the Funds’ initial investment. Derivatives may be illiquid and may be more volatile than other types of investments. The Funds may buy or sell derivatives not traded on an exchange and which may be subject to heightened liquidity and valuation risk. Derivative investments can increase portfolio turnover and transaction costs. Derivatives also are subject to counterparty risk. As a result, the Funds may obtain no recovery of their investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose the Funds to greater losses in the event of a default by a counterparty.
Dividend Risk
An issuer of stock held by the Funds may choose not to declare a dividend or the dividend rate might not remain at current levels. Dividend paying stocks might not experience the same level of earnings growth or capital appreciation asnon-dividend paying stocks.
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.
35
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the 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).
Liquidity Risk
When there is little or no active trading market for a specific security it can become more difficult to purchase or sell the securities at or near their perceived value. During such periods, certain investments held by the Fund may be difficult to sell or other investments may be difficult to purchase at favorable times or prices. As a result, the Fund may have to lower the price on certain securities that it is trying to sell, sell other securities instead or forgo an investment opportunity, any of which could have a negative effect on Fund management or performance. Redemptions by a few large investors in the Fund at such times may have a significant adverse effect on the Fund’s NAV and remaining Fund shareholders. In addition, the market-making capacity of dealers in certain types of securities has been reduced in recent years, in part as a result of structural and regulatory changes, such as fewer proprietary trading desks and increased regulatory capital requirements for broker-dealers. Further, many broker-dealers have reduced their inventory of certain debt securities. This could negatively affect the Fund’s ability to buy or sell debt securities and increase the related volatility and trading costs. The Fund may lose money if it is forced to sell certain investments at unfavorable prices to meet redemption requests or other cash needs.
Market Risk
Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects. Conditions in the U.S. and many foreign economies have resulted, and may continue to result, in certain 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 some cases, traditional market participants have been less willing to make a market in some types of debt instruments, which has affected the liquidity of those instruments. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Treasury, causing the prices of these securities to rise and the yields to decline. The reduced liquidity in fixed income and credit markets may negatively affect many issuers worldwide. 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. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations in ways that cannot necessarily be foreseen at the present time.
In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. In some countries where economic conditions are recovering, they are nevertheless perceived as still fragile. Withdrawal of government support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding, could adversely impact the value and liquidity of certain securities. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations, including changes in tax laws. The impact of new financial regulation legislation on the markets and the practical implications for market participants may not be fully known for some time. Regulatory changes are causing some financial services companies to exit long-standing lines of business, resulting in dislocations for other market participants. In
36
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
addition, political and diplomatic events within the U.S. and abroad, such as the U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, the threat of a federal government shutdown and threats not to increase the federal government’s debt limit, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The U.S. government has recently reduced federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets’ expectations for changes in government policies are not borne out.
Changes in market conditions will not have the same impact on all types of securities. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact of a significant rate increase on various markets. For example, because investors may buy securities or other investments with borrowed money, a significant increase in interest rates may cause a decline in the markets for those investments. Because of the sharp decline in the worldwide price of oil, there is a concern that oil producing nations may withdraw significant assets now held in U.S. Treasuries, which could force a substantial increase in interest rates. Regulators have expressed concern that rate increases may cause investors to sell fixed income securities faster than the market can absorb them, contributing to price volatility. 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. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse. The precise details and the resulting impact of the United Kingdom’s vote to leave the European Union (“EU”), commonly referred to as “Brexit,” are not yet known. The effect on the United Kingdom’s economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are matters to be negotiated. The outcomes may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time, which could significantly adversely affect the value of the Fund’s investments in the United Kingdom and Europe.
Other Investment Companies Risk
The Funds may invest in shares of other registered investment companies, including money market funds. To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses charged by the underlying funds in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies.
Securities Lending Risk
A Fund may lend its portfolio securities to brokers, dealers and financial institutions to seek income. There is a risk that a borrower may default on its obligations to return loaned securities; however, a Fund’s securities lending agent indemnifies the Fund against that risk. There is a risk that the assets of a Fund’s securities lending agent may be insufficient to satisfy any contractual indemnification requirements to the Fund. Borrowers of a Fund’s securities typically provide collateral in the form of cash that is reinvested in securities. A Fund will be responsible for the risks associated with the investment of cash collateral, including any collateral invested in an affiliated money market fund. A Fund may lose money on its investment of cash collateral or may fail to earn sufficient income on its investment to meet obligations to the borrower. In addition, delays may occur in the recovery of securities from borrowers, which could interfere with a Fund’s ability to vote proxies or to settle transactions and there is the risk of possible loss of rights in the collateral should the borrower fail financially.
37
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (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 February 28, 2019 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.
As of February 28, 2019 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) | ||||||||||||||||||||||||
The London Company Income Equity | $ | 806,538,095 | $ | 234,244,896 | $ | (11,997,492 | ) | $ | 222,247,404 | |||||||||||||||||||
Zebra Small Cap Equity | 70,806,120 | 8,672,899 | (3,174,281 | ) | 5,498,618 |
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 August 31, 2018, The London Company Income Equity Fund utilized $1,879,996 short-term and $9,001,062 long-term post RIC MOD capital loss carryforwards. The Zebra Small Cap Equity Fund did not have any capital loss carryforwards.
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the six months ended February 28, 2019 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Sales (non-U.S. Government Securities) | ||||||
The London Company Income Equity | $ | 113,987,178 | $ | 141,184,916 | ||||
Zebra Small Cap Equity | 35,450,878 | 32,882,630 |
A summary of the Funds’ transactions in the USG Select Fund for the period ended February 28, 2019 were as follows:
Fund | Type of Transaction | August 31, 2018 Shares/Fair Value | Purchases | Sales | February 28, 2019 Shares/Fair Value | Dividend Income | ||||||||||||||||||||||||||||||||||||
The London Company Income Equity | Direct | $ | 12,019,169 | $ | 238,793,108 | $ | 209,134,680 | $ | 41,677,597 | $ | 364,294 | |||||||||||||||||||||||||||||||
Zebra Small Cap Equity | Direct | 1,991,241 | 19,994,810 | 20,735,863 | 1,250,188 | 12,180 | ||||||||||||||||||||||||||||||||||||
Zebra Small Cap Equity | Securities Lending | 263,634 | 4,662,491 | 4,246,547 | 679,578 | 566 |
38
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (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 andmarked-to-market daily. Dailymark-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 formark-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 bynon-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, thatnon-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 liquidatenon-cash collateral to satisfy a borrower default.
As of February 28, 2019, 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 | ||||||||||||
Zebra Small Cap Equity | $ | 656,807 | $ | 679,578 | $ | - | $ | 679,578 |
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 orre-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.
39
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
10. Borrowing Arrangements
Effective November 15, 2018 (the “Effective Date”), 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 $250 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 closing fee of $100,000 on the Effective Date and a quarterly commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 14, 2019, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.
On the Effective Date, the Funds, along with certain other Participating Funds managed by the Manager, also 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 plus 1.25% per annum on each outstanding loan. Each of the Participating Funds will pay a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 14, 2019 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 February 28, 2019, 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 February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
The London Company Income Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,703,261 | $ | 28,867,553 | 2,952,551 | $ | 49,665,918 | ||||||||||||||||||||||
Reinvestment of dividends | 314,964 | 5,166,249 | 242,433 | 4,055,264 | ||||||||||||||||||||||||
Shares redeemed | (2,340,241 | ) | (41,007,087 | ) | (3,752,899 | ) | (63,426,927 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (322,016 | ) | $ | (6,973,285 | ) | (557,915 | ) | $ | (9,705,745 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
The London Company Income Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 6,289,113 | $ | 106,496,715 | 6,247,631 | $ | 104,772,964 | ||||||||||||||||||||||
Reinvestment of dividends | 441,320 | 7,186,514 | 326,075 | 5,420,281 | ||||||||||||||||||||||||
Shares redeemed | (4,196,309 | ) | (71,513,892 | ) | (16,195,313 | ) | (273,348,174 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 2,534,124 | $ | 42,169,337 | (9,621,607 | ) | $ | (163,154,929 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
40
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
The London Company Income Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 93,875 | $ | 1,578,114 | 973,829 | $ | 16,185,272 | ||||||||||||||||||||||
Reinvestment of dividends | 38,322 | 624,424 | 33,490 | 557,430 | ||||||||||||||||||||||||
Shares redeemed | (353,240 | ) | (6,001,023 | ) | (1,423,047 | ) | (24,223,226 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (221,043 | ) | $ | (3,798,485 | ) | (415,728 | ) | $ | (7,480,524 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
The London Company Income Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 382,675 | $ | 6,371,239 | 523,646 | $ | 8,710,107 | ||||||||||||||||||||||
Reinvestment of dividends | 53,810 | 872,148 | 49,937 | 824,306 | ||||||||||||||||||||||||
Shares redeemed | (603,655 | ) | (10,508,259 | ) | (3,165,632 | ) | (52,521,462 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (167,170 | ) | $ | (3,264,872 | ) | (2,592,049 | ) | $ | (42,987,049 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
The London Company Income Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 396,882 | $ | 6,580,764 | 477,965 | $ | 7,948,288 | ||||||||||||||||||||||
Reinvestment of dividends | 75,413 | 1,199,886 | 35,277 | 578,683 | ||||||||||||||||||||||||
Shares redeemed | (648,997 | ) | (10,992,227 | ) | (2,523,282 | ) | (41,828,857 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (176,702 | ) | $ | (3,211,577 | ) | (2,010,040 | ) | $ | (33,301,886 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Zebra Small Cap Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 246,205 | $ | 3,731,452 | 524,926 | $ | 9,185,662 | ||||||||||||||||||||||
Reinvestment of dividends | 83,251 | 1,074,766 | 38,165 | 630,864 | ||||||||||||||||||||||||
Shares redeemed | (126,598 | ) | (1,930,535 | ) | (180,141 | ) | (3,089,552 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 202,858 | $ | 2,875,683 | 382,950 | $ | 6,726,974 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Zebra Small Cap Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 925,407 | $ | 14,125,394 | 2,420,192 | $ | 41,602,291 | ||||||||||||||||||||||
Reinvestment of dividends | 294,871 | 3,836,268 | 136,185 | 2,270,208 | ||||||||||||||||||||||||
Shares redeemed | (875,966 | ) | (13,446,478 | ) | (1,116,700 | ) | (19,525,772 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 344,312 | $ | 4,515,184 | 1,439,677 | $ | 24,346,727 | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Year Ended February 28, | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Zebra Small Cap Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 179,143 | $ | 2,762,106 | 256,249 | $ | 4,482,838 | ||||||||||||||||||||||
Reinvestment of dividends | 66,208 | 845,481 | 36,917 | 606,174 | ||||||||||||||||||||||||
Shares redeemed | (139,945 | ) | (2,195,835 | ) | (395,049 | ) | (6,789,420 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 105,406 | $ | 1,411,752 | (101,883 | ) | $ | (1,700,408 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
41
American Beacon FundsSM
Notes to Financial Statements
February 28, 2019 (Unaudited)
A Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Zebra Small Cap Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 47,602 | $ | 757,237 | 151,791 | $ | 2,597,027 | ||||||||||||||||||||||
Reinvestment of dividends | 26,599 | 340,204 | 18,307 | 300,783 | ||||||||||||||||||||||||
Shares redeemed | (110,627 | ) | (1,697,129 | ) | (317,426 | ) | (5,514,879 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (36,426 | ) | $ | (599,688 | ) | (147,328 | ) | $ | (2,617,069 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended February 28, 2019 | Year Ended August 31, 2018 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Zebra Small Cap Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 18,918 | $ | 302,548 | 73,661 | $ | 1,193,317 | ||||||||||||||||||||||
Reinvestment of dividends | 22,891 | 277,216 | 11,452 | 179,799 | ||||||||||||||||||||||||
Shares redeemed | (35,966 | ) | (507,087 | ) | (38,764 | ) | (621,696 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 5,843 | $ | 72,677 | 46,349 | $ | 751,420 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
11. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Funds’ financial statements through this date.
42
American Beacon The London Company Income Equity FundSM
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.13 | $ | 16.13 | $ | 15.25 | $ | 13.85 | $ | 14.12 | $ | 11.80 | ||||||||||||||||||||||||||||||||
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|
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|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.20 | 0.35 | 0.33 | 0.32 | 0.31 | 0.30 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.16 | ) | 2.00 | 0.97 | 1.40 | (0.14 | ) | 2.39 | ||||||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.04 | 2.35 | 1.30 | 1.72 | 0.17 | 2.69 | ||||||||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.21 | ) | (0.35 | ) | (0.32 | ) | (0.32 | ) | (0.32 | ) | (0.28 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.27 | ) | – | (0.10 | ) | – | (0.12 | ) | (0.09 | ) | ||||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.48 | ) | (0.35 | ) | (0.42 | ) | (0.32 | ) | (0.44 | ) | (0.37 | ) | ||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 17.69 | $ | 18.13 | $ | 16.13 | $ | 15.25 | $ | 13.85 | $ | 14.12 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnA | 0.48 | %B | 14.75 | % | 8.64 | % | 12.57 | % | 1.08 | % | 23.13 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 228,712,142 | $ | 240,244,700 | $ | 222,730,033 | $ | 194,708,612 | $ | 137,006,660 | $ | 58,277,396 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.72 | %C | 0.73 | % | 0.74 | % | 0.75 | % | 0.75 | % | 0.82 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.72 | %C | 0.73 | % | 0.74 | % | 0.77 | % | 0.79 | % | 0.79 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 2.31 | %C | 2.08 | % | 2.12 | % | 2.32 | % | 2.35 | % | 2.31 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 2.31 | %C | 2.08 | % | 2.12 | % | 2.30 | % | 2.30 | % | 2.33 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 12 | %B | 16 | % | 14 | % | 20 | % | 15 | % | 10 | % |
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
43
American Beacon The London Company Income Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.04 | $ | 16.05 | $ | 15.17 | $ | 13.79 | $ | 14.06 | $ | 11.75 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.19 | 0.34 | 0.32 | 0.32 | 0.31 | 0.28 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.15 | ) | 1.99 | 0.97 | 1.37 | (0.15 | ) | 2.39 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.04 | 2.33 | 1.29 | 1.69 | 0.16 | 2.67 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.21 | ) | (0.34 | ) | (0.31 | ) | (0.31 | ) | (0.31 | ) | (0.27 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.27 | ) | – | (0.10 | ) | – | (0.12 | ) | (0.09 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.48 | ) | (0.34 | ) | (0.41 | ) | (0.31 | ) | (0.43 | ) | (0.36 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 17.60 | $ | 18.04 | $ | 16.05 | $ | 15.17 | $ | 13.79 | $ | 14.06 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 0.45 | %B | 14.69 | % | 8.60 | % | 12.42 | % | 1.03 | % | 23.05 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 602,908,870 | $ | 572,315,652 | $ | 663,588,078 | $ | 582,952,334 | $ | 364,477,089 | $ | 122,714,756 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.79 | %C | 0.79 | % | 0.81 | % | 0.82 | % | 0.83 | % | 0.89 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.79 | %C | 0.79 | % | 0.81 | % | 0.82 | % | 0.84 | % | 0.89 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 2.26 | %C | 2.00 | % | 2.04 | % | 2.24 | % | 2.27 | % | 2.24 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 2.26 | %C | 2.00 | % | 2.04 | % | 2.24 | % | 2.26 | % | 2.25 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 12 | %B | 16 | % | 14 | % | 20 | % | 15 | % | 10 | % |
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
44
American Beacon The London Company Income Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.06 | $ | 16.07 | $ | 15.19 | $ | 13.81 | $ | 14.08 | $ | 11.76 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.17 | 0.30 | 0.28 | 0.28 | 0.28 | 0.26 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.16 | ) | 1.98 | 0.97 | 1.37 | (0.17 | ) | 2.39 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.01 | 2.28 | 1.25 | 1.65 | 0.11 | 2.65 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.18 | ) | (0.29 | ) | (0.27 | ) | (0.27 | ) | (0.26 | ) | (0.24 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.27 | ) | – | (0.10 | ) | – | (0.12 | ) | (0.09 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.45 | ) | (0.29 | ) | (0.37 | ) | (0.27 | ) | (0.38 | ) | (0.33 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 17.62 | $ | 18.06 | $ | 16.07 | $ | 15.19 | $ | 13.81 | $ | 14.08 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 0.32 | %B | 14.37 | % | 8.33 | % | 12.13 | % | 0.71 | % | 22.83 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 23,756,834 | $ | 28,343,428 | $ | 31,897,528 | $ | 29,208,149 | $ | 20,564,814 | $ | 16,549,654 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.06 | %C | 1.05 | % | 1.05 | % | 1.06 | % | 1.04 | % | 1.06 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.06 | %C | 1.05 | % | 1.05 | % | 1.06 | % | 1.16 | % | 1.10 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.96 | %C | 1.75 | % | 1.79 | % | 2.01 | % | 2.04 | % | 2.06 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.96 | %C | 1.75 | % | 1.79 | % | 2.01 | % | 1.93 | % | 2.02 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 12 | %B | 16 | % | 14 | % | 20 | % | 15 | % | 10 | % |
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
45
American Beacon The London Company Income Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.96 | $ | 15.98 | $ | 15.11 | $ | 13.73 | $ | 14.00 | $ | 11.70 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.17 | 0.31 | 0.27 | 0.27 | 0.27 | 0.24 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.16 | ) | 1.96 | 0.96 | 1.38 | (0.16 | ) | 2.37 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 0.01 | 2.27 | 1.23 | 1.65 | 0.11 | 2.61 | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.18 | ) | (0.29 | ) | (0.26 | ) | (0.27 | ) | (0.26 | ) | (0.22 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.27 | ) | – | (0.10 | ) | – | (0.12 | ) | (0.09 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.45 | ) | (0.29 | ) | (0.36 | ) | (0.27 | ) | (0.38 | ) | (0.31 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 17.52 | $ | 17.96 | $ | 15.98 | $ | 15.11 | $ | 13.73 | $ | 14.00 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | 0.31 | %B | 14.41 | % | 8.24 | % | 12.14 | % | 0.71 | % | 22.58 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 56,052,334 | $ | 60,465,593 | $ | 95,206,378 | $ | 94,705,221 | $ | 72,363,106 | $ | 31,579,315 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.07 | %C | 1.03 | % | 1.12 | % | 1.13 | % | 1.13 | % | 1.28 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.07 | %C | 1.03 | % | 1.12 | % | 1.13 | % | 1.17 | % | 1.27 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.96 | %C | 1.75 | % | 1.73 | % | 1.94 | % | 1.96 | % | 1.85 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.96 | %C | 1.75 | % | 1.73 | % | 1.94 | % | 1.92 | % | 1.86 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 12 | %B | 16 | % | 14 | % | 20 | % | 15 | % | 10 | % |
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
46
American Beacon The London Company Income Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.83 | $ | 15.87 | $ | 15.01 | $ | 13.65 | $ | 13.93 | $ | 11.66 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.10 | 0.16 | 0.15 | 0.17 | 0.18 | 0.15 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.16 | ) | 1.97 | 0.96 | 1.36 | (0.17 | ) | 2.35 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (0.06 | ) | 2.13 | 1.11 | 1.53 | 0.01 | 2.50 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.12 | ) | (0.17 | ) | (0.15 | ) | (0.17 | ) | (0.17 | ) | (0.14 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.27 | ) | – | (0.10 | ) | – | (0.12 | ) | (0.09 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.39 | ) | (0.17 | ) | (0.25 | ) | (0.17 | ) | (0.29 | ) | (0.23 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 17.38 | $ | 17.83 | $ | 15.87 | $ | 15.01 | $ | 13.65 | $ | 13.93 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | (0.10 | )%B | 13.53 | % | 7.42 | % | 11.28 | % | (0.04 | )% | 21.69 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 126,141,847 | $ | 132,511,310 | $ | 149,848,432 | $ | 185,308,648 | $ | 122,804,166 | $ | 46,638,516 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.83 | %C | 1.81 | % | 1.86 | % | 1.87 | % | 1.88 | % | 2.02 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.83 | %C | 1.81 | % | 1.86 | % | 1.87 | % | 1.89 | % | 2.01 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.21 | %C | 0.98 | % | 0.97 | % | 1.20 | % | 1.22 | % | 1.11 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.21 | %C | 0.98 | % | 0.97 | % | 1.20 | % | 1.21 | % | 1.12 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 12 | %B | 16 | % | 14 | % | 20 | % | 15 | % | 10 | % |
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
47
American Beacon Zebra Small Cap Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Institutional Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.32 | $ | 16.04 | $ | 14.07 | $ | 14.21 | $ | 14.36 | $ | 13.66 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.11 | 0.24 | 0.18 | 0.13 | 0.14 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (1.35 | ) | 3.44 | 1.90 | 1.15 | (0.03 | ) | 2.12 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (1.27 | ) | 3.55 | 2.14 | 1.33 | 0.10 | 2.26 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.03 | ) | (0.17 | ) | (0.06 | ) | (0.04 | ) | – | |||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.48 | ) | (1.24 | ) | – | (1.41 | ) | (0.21 | ) | (1.56 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.57 | ) | (1.27 | ) | (0.17 | ) | (1.47 | ) | (0.25 | ) | (1.56 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.48 | $ | 18.32 | $ | 16.04 | $ | 14.07 | $ | 14.21 | $ | 14.36 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | (5.23 | )%B | 22.98 | % | 15.25 | % | 10.46 | % | 0.68 | % | 16.67 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
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|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 13,051,190 | $ | 11,722,213 | $ | 4,122,461 | $ | 2,305,284 | $ | 1,764,526 | $ | 1,606,024 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.19 | %C | 1.23 | % | 1.36 | % | 1.53 | % | 1.56 | % | 1.64 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursementsD | 0.89 | %C | 0.90 | % | 0.89 | % | 0.89 | % | 1.00 | % | 0.99 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.80 | %C | 0.30 | % | 0.80 | % | 0.34 | % | 0.17 | % | 0.33 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.10 | %C | 0.64 | % | 1.26 | % | 0.97 | % | 0.73 | % | 0.99 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 47 | %B | 74 | % | 77 | % | 50 | % | 97 | % | 76 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
D | 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
48
American Beacon Zebra Small Cap Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
�� |
|
| ||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.45 | $ | 16.17 | $ | 14.20 | $ | 14.33 | $ | 14.50 | $ | 13.79 | ||||||||||||||||||||||||||||||||
|
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|
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|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.08 | 0.15 | 0.12 | 0.10 | 0.56 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (1.36 | ) | 3.47 | 1.99 | 1.22 | (0.02 | ) | 1.71 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (1.28 | ) | 3.55 | 2.14 | 1.34 | 0.08 | 2.27 | |||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.03 | ) | (0.17 | ) | (0.06 | ) | (0.04 | ) | – | |||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.48 | ) | (1.24 | ) | – | (1.41 | ) | (0.21 | ) | (1.56 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.57 | ) | (1.27 | ) | (0.17 | ) | (1.47 | ) | (0.25 | ) | (1.56 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
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|
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|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.60 | $ | 18.45 | $ | 16.17 | $ | 14.20 | $ | 14.33 | $ | 14.50 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | (5.24 | )%B | 22.79 | % | 15.11 | % | 10.44 | % | 0.54 | % | 16.59 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 45,823,825 | $ | 47,832,660 | $ | 18,631,514 | $ | 10,988,456 | $ | 9,795,860 | $ | 8,168,361 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.21 | %C | 1.27 | % | 1.41 | % | 1.58 | % | 1.61 | % | 1.65 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursementsD | 0.99 | %C | 1.00 | % | 0.99 | % | 0.99 | % | 1.10 | % | 1.09 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.77 | %C | 0.26 | % | 0.54 | % | 0.28 | % | 0.12 | % | 0.19 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.99 | %C | 0.54 | % | 0.96 | % | 0.87 | % | 0.64 | % | 0.75 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 47 | %B | 74 | % | 77 | % | 50 | % | 97 | % | 76 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
D | 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
49
American Beacon Zebra Small Cap Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.14 | $ | 15.95 | $ | 14.05 | $ | 14.22 | $ | 14.39 | $ | 13.73 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.02 | 0.14 | 0.28 | 0.01 | 0.10 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (1.36 | ) | 3.43 | 1.93 | 1.00 | 0.04 | 2.12 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (1.28 | ) | 3.45 | 2.07 | 1.28 | 0.05 | 2.22 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
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|
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|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.07 | ) | (0.02 | ) | (0.17 | ) | (0.04 | ) | (0.01 | ) | – | |||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.48 | ) | (1.24 | ) | – | (1.41 | ) | (0.21 | ) | (1.56 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.55 | ) | (1.26 | ) | (0.17 | ) | (1.45 | ) | (0.22 | ) | (1.56 | ) | ||||||||||||||||||||||||||||||||
|
|
|
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|
|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.31 | $ | 18.14 | $ | 15.95 | $ | 14.05 | $ | 14.22 | $ | 14.39 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnA | (5.34 | )%B | 22.47 | % | 14.77 | % | 10.07 | % | 0.29 | % | 16.27 | % | ||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 10,388,339 | $ | 10,398,506 | $ | 10,766,976 | $ | 7,620,538 | $ | 2,573,002 | $ | 3,003,670 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.50 | %C | 1.44 | % | 1.58 | % | 1.74 | % | 1.82 | % | 1.86 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursementsD | 1.27 | %C | 1.28 | % | 1.27 | % | 1.27 | % | 1.37 | % | 1.37 | % | ||||||||||||||||||||||||||||||||
Net investment income (loss), before expense reimbursements | 0.49 | %C | 0.08 | % | 0.41 | % | 0.09 | % | (0.12 | )% | 0.15 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.72 | %C | 0.24 | % | 0.72 | % | 0.56 | % | 0.33 | % | 0.64 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 47 | %B | 74 | % | 77 | % | 50 | % | 97 | % | 76 | % |
A | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
B | Not annualized. |
C | Annualized. |
D | 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
50
American Beacon Zebra Small Cap Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.15 | $ | 15.96 | $ | 14.06 | $ | 14.22 | $ | 14.40 | $ | 13.75 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.02 | 0.03 | A | 0.16 | 0.10 | 0.05 | 0.48 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (1.30 | ) | 3.42 | 1.91 | 1.18 | - | 1.73 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (1.28 | ) | 3.45 | 2.07 | 1.28 | 0.05 | 2.21 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.06 | ) | (0.02 | ) | (0.17 | ) | (0.03 | ) | (0.02 | ) | - | |||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.48 | ) | (1.24 | ) | - | (1.41 | ) | (0.21 | ) | (1.56 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.54 | ) | (1.26 | ) | (0.17 | ) | (1.44 | ) | (0.23 | ) | (1.56 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.33 | $ | 18.15 | $ | 15.96 | $ | 14.06 | $ | 14.22 | $ | 14.40 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | (5.36 | )%C | 22.43 | % | 14.76 | % | 10.04 | % | 0.29 | % | 16.17 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 3,717,733 | $ | 5,063,046 | $ | 6,801,568 | $ | 5,212,114 | $ | 4,797,155 | $ | 4,894,024 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.52 | %D | 1.54 | % | 1.73 | % | 1.90 | % | 1.94 | % | 2.05 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursementsE | 1.29 | %D | 1.29 | % | 1.29 | % | 1.29 | % | 1.40 | % | 1.47 | % | ||||||||||||||||||||||||||||||||
Net investment income (loss), before expense reimbursements | 0.44 | %D | (0.04 | )% | 0.28 | % | (0.04 | )% | (0.21 | )% | (0.14 | )% | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.67 | %D | 0.20 | % | 0.71 | % | 0.57 | % | 0.33 | % | 0.45 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 47 | %C | 74 | % | 77 | % | 50 | % | 97 | % | 76 | % |
A | Per share amounts have been calculated using the average shares method. |
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 | 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
American Beacon Zebra Small Cap Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended February 28, | Year Ended August 31, | |||||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.26 | $ | 15.32 | $ | 13.53 | $ | 13.81 | $ | 14.08 | $ | 13.57 | ||||||||||||||||||||||||||||||||
|
|
|
|
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|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | (0.00 | )A B | (0.09 | )A | 0.03 | 0.10 | (0.07 | ) | 0.33 | |||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (1.28 | ) | 3.27 | 1.86 | 1.03 | 0.01 | 1.74 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (1.28 | ) | 3.18 | 1.89 | 1.13 | (0.06 | ) | 2.07 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | - | - | (0.10 | ) | - | - | - | |||||||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.48 | ) | (1.24 | ) | - | (1.41 | ) | (0.21 | ) | (1.56 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.48 | ) | (1.24 | ) | (0.10 | ) | (1.41 | ) | (0.21 | ) | (1.56 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 14.50 | $ | 17.26 | $ | 15.32 | $ | 13.53 | $ | 13.81 | $ | 14.08 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | (5.71 | )%D | 21.55 | % | 13.97 | % | 9.17 | % | (0.48 | )% | 15.29 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
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|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 2,845,510 | $ | 3,286,562 | $ | 2,207,090 | $ | 1,838,434 | $ | 1,398,217 | $ | 1,468,876 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 2.27 | %E | 2.29 | % | 2.47 | % | 2.65 | % | 2.69 | % | 2.81 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursementsF | 2.04 | %E | 2.05 | % | 2.04 | % | 2.04 | % | 2.15 | % | 2.22 | % | ||||||||||||||||||||||||||||||||
Net investment (loss), before expense reimbursements | (0.27 | )%E | (0.78 | )% | (0.42 | )% | (0.78 | )% | (0.96 | )% | (0.89 | )% | ||||||||||||||||||||||||||||||||
Net investment income (loss), net of reimbursements | (0.04 | )%E | (0.53 | )% | 0.01 | % | (0.18 | )% | (0.41 | )% | (0.30 | )% | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 47 | %D | 74 | % | 77 | % | 50 | % | 97 | % | 76 | % |
A | Per share amounts have been calculated using the average shares method. |
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 | 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
52
Delivery of Documents
eDelivery isNOW AVAILABLE - Stop traditional mail delivery and receive your
shareholder reports and summary prospectuson-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, bye-mail. If you are interested in this option, please go towww.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
To obtain more information about the Fund:
![]() | ![]() | |
ByE-mail: | On the Internet: | |
american_beacon.funds@ambeacon.com | Visit our website atwww.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 eachsemi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) onForm N-Q as of the first and third fiscal quarters. The Fund’sForms N-Q are available on the SEC’s website atwww.sec.gov. The FormsN-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 atwww.americanbeaconfunds.com approximately twenty days after the end of each month for the London Company Income Equity Fund and sixty days after the end of each quarter for the Zebra Small Cap Equity Fund. | 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 websitewww.americanbeaconfunds.com and by calling1-800-967-9009 or by accessing the SEC’s website atwww.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC onForm N-PX. The Fund’sForms N-PX are available on the SEC’s website atwww.sec.gov. The Fund’s proxy voting record may also be obtained by calling1-800-967-9009. |
Fund Service Providers:
CUSTODIAN State Street Bank and Trust Company Boston, Massachusetts | TRANSFER AGENT DST Asset Manager Solutions, Inc. Quincy, Massachusetts | 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, American Beacon The London Company Income Equity Fund, and American Beacon Zebra Small Cap Equity Fund are service marks of American Beacon Advisors, Inc.
SAR 2/19
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 FORCLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not Applicable.
ITEM 8. PORTFOLIO MANAGERS OFCLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not Applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BYCLOSED-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 Rule30a-2(a) under the Act (17 CFR270.30a-2(a)) is attached hereto asEX-99.CERT.
(a)(3) Not Applicable.
(b) The certifications required by Rule30a-2(b) under the Investment Company Act of 1940 are attached hereto asEX-99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): American Beacon Funds
By /s/ Gene L. Needles, Jr. |
Gene L. Needles, Jr. |
President |
American Beacon Funds |
Date: May 8, 2019 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /s/ Gene L. Needles, Jr. |
Gene L. Needles, Jr. |
President |
American Beacon Funds |
Date: May 8, 2019 |
By /s/ Melinda G. Heika |
Melinda G. Heika |
Treasurer |
American Beacon Funds |
Date: May 8, 2019 |