UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-4984
AMERICAN BEACON FUNDS
(Exact name of registrant as specified in charter)
220 East Las Colinas Boulevard, Suite 1200
Irving, Texas 75039
(Address of principal executive offices)-(Zip code)
GENE L. NEEDLES, JR., PRESIDENT
220 East Las Colinas Boulevard, Suite 1200
Irving, Texas 75039
(Name and address of agent for service)
Registrant’s telephone number, including area code: (817) 391-6100
Date of fiscal year end: October 31, 2021
Date of reporting period: April 30, 2021
Form N-CSRS is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSRS in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSRS, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSRS 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, Inc. has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.
Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.
BALANCED FUND RISKS
The use of fixed-income securities entails interest rate and credit risks. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.
MID-CAP VALUE FUND RISKS
Investing in medium-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.
Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and each Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions, and, therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.
American Beacon Funds | April 30, 2021 |
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Schedules of Investments: | ||||
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Financial Highlights: | ||||
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Disclosure Regarding Approval of Management and Investment Advisory Agreements | 77 | |||
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Back Cover |
![]() | Dear Shareholders,
Throughout this reporting period, the 24-hour news cycle has continued to be dominated by headlines related to the COVID-19 pandemic, ongoing global vaccination efforts, U.S. stimulus and infrastructure spending, and the reopening of our nation’s businesses and schools. After months of seclusion and uncertainty, we can finally see the proverbial light at the end of a tunnel – and a path forward to potentially brighter days.
However, during challenging times such as we’ve all experienced over the past year, the fear of loss can be a powerful emotion. And it can cause many individuals to make short-term investment decisions that have the potential to sink their long-term financial objectives. We encourage you to remain focused on achieving your long-term investment goals by working with |
financial professionals to develop a personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand crises. By staying the course, you will be better positioned to achieve enduring financial success.
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. 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 financial rewards.
Thank you for continuing your financial journey with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon Balanced FundSM
April 30, 2021 (Unaudited)
The Investor Class of the American Beacon Balanced Fund (the “Fund”) returned 28.62% for the six months ended April 30, 2021, outperforming the 60% Russell 1000® Value Index/40% Bloomberg Barclays U.S. Aggregate Bond Index return of 20.06% for the same period.
Total Returns for the Period ended April 30, 2021 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||||
R5 Class (1,7) | AADBX | 28.86 | % | 37.33 | % | 10.71 | % | 10.49 | % | 8.99 | % | |||||||||||||||||||||
Y Class (1,2,7) | ACBYX | 28.80 | % | 37.15 | % | 10.67 | % | 10.46 | % | 8.93 | % | |||||||||||||||||||||
Investor Class (1,7) | AABPX | 28.62 | % | 36.84 | % | 10.40 | % | 10.15 | % | 8.65 | % | |||||||||||||||||||||
Advisor Class (1,7) | ABLSX | 28.55 | % | 36.59 | % | 10.20 | % | 9.96 | % | 8.47 | % | |||||||||||||||||||||
A Class without sales charge (1,3,7) | ABFAX | 28.69 | % | 36.82 | % | 10.40 | % | 10.14 | % | 8.57 | % | |||||||||||||||||||||
A Class with sales charge (1,3,7) | ABFAX | 21.25 | % | 28.95 | % | 8.25 | % | 8.84 | % | 7.93 | % | |||||||||||||||||||||
C Class without sales charge (1,4,7) | ABCCX | 28.14 | % | 35.86 | % | 9.60 | % | 9.32 | % | 7.77 | % | |||||||||||||||||||||
C Class with sales charge (1,4,7) | ABCCX | 27.14 | % | 34.86 | % | 9.60 | % | 9.32 | % | 7.77 | % | |||||||||||||||||||||
60% Russell 1000® Value Index/40% Bloomberg Barclays US Aggregate Bond Index (5) | 20.06 | % | 25.78 | % | 9.97 | % | 8.86 | % | 8.28 | % | ||||||||||||||||||||||
Russell 1000® Value Index (6) | 36.30 | % | 45.92 | % | 12.30 | % | 12.15 | % | 11.13 | % | ||||||||||||||||||||||
Bloomberg Barclays US Aggregate Bond Index (6) | (1.52 | )% | (0.27 | )% | 5.19 | % | 3.19 | % | 3.39 | % |
* | 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 date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future. |
2. | A portion of the fees charged to the Y Class of the Fund was waived in 2011, partially recovered in 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown for 2011. |
3. | A portion of the fees charged to the A Class of the Fund was waived in 2011 and 2012, partially recovered in 2013, fully recovered in 2014 and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown for 2011, 2012 and 2018. A Class has a maximum sales charge of 5.75%. |
4. | A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012, partially recovered in 2013, fully recovered in 2014 and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012 and for 2018. The maximum contingent deferred sales charge for C Class is 1% for shares redeemed within one year of the date of purchase. |
5. | To reflect the Fund’s allocation of its assets between investment-grade fixed-income securities and equity securities, the returns of the Russell 1000 Value Index and the Bloomberg Barclays U.S. Aggregate Bond Index have been combined in a 60% / 40% proportion. |
6. | The Russell 1000® Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. American Beacon Funds is not promoted, sponsored or endorsed by, nor in any way affiliated with the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. LSE Group is not responsible for and has not reviewed the American Beacon Balanced Fund nor any associated literature or publications and LSE Group makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. All rights in the Russell 1000 Value Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell 1000® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by the Manager. The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”). BARCLAYS® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith. |
2
American Beacon Balanced FundSM
Performance Overview
April 30, 2021 (Unaudited)
7. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, Advisor, A, and C Class shares were 0.69%, 0.77%, 1.01%, 1.17%, 1.02%, and 1.76%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. |
During the six-month period, the Fund’s assets on average were invested 64% in equities (including equitized cash) and 36% in fixed-income securities, ending the period with approximately the same allocation.
The equity portion of the Fund (excluding equitized cash) returned 53.1% for the period, outperforming the Russell 1000 Value Index (the “Index”) return of 36.30%. The equity portion of the Fund outperformed the Index due to both stock selection and sector allocation.
Stock selections in the Financials and Communication Services sectors contributed most to relative performance during the six-month period. In the Financials sector, Wells Fargo & Co. (up 113.9%) was the largest contributor, followed closely by Goldman Sachs Group, Inc. (up 89.0%) and Citigroup, Inc. (up 73.5%). Within the Communication Services sector, News Corp., Class A (up 104.7%) helped the most, as did Discovery, Inc., Class C (up 100.7%). Meanwhile, selections in the Information Technology sector modestly offset the Fund’s positive performance, including Cognizant Technology Solutions Corp., Class A (up 14.4%) and QUALCOMM, Inc. (up 15.5%).
The Fund’s overweight to both Financials (up 56.7%) and Energy (up 76.5%) – the best performing sectors – boosted relative performance the most.
The fixed-income portion of the Fund returned -1.6% for the six-month period, underperforming the Bloomberg Barclays U.S. Aggregate Bond Index (the “Barclays Index”) return of -1.2%. The Fund’s selections within Manufacturing contributed the most value for the period, though this was countered by negative selection in MBS. From a duration perspective, the portfolio was hurt by selections in the 7 to 10 year range and underweighting the 1 to 3 year range but was buoyed by selections in the 30+ year range. Lastly in terms of quality, overweighting and selections in A-rated securities weighed on performance during the period.
The sub-advisors continue to focus on the disciplined selection of attractive securities that should allow the Fund to benefit long-term.
Top Ten Holdings (% Net Assets) |
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Wells Fargo & Co. | 2.5 | |||||||
Citigroup, Inc. | 2.2 | |||||||
American International Group, Inc. | 2.2 | |||||||
Anthem, Inc. | 1.9 | |||||||
Goldman Sachs Group, Inc. | 1.6 | |||||||
U.S. Treasury Notes/Bonds | 1.3 | |||||||
General Electric Co. | 1.3 | |||||||
Hess Corp. | 1.2 | |||||||
Phillips 66 | 1.2 | |||||||
Comcast Corp., Class A | 1.2 | |||||||
Total Fund Holdings | 472 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 27.1 | |||||||
Industrials | 14.4 | |||||||
Consumer Discretionary | 11.1 | |||||||
Health Care | 10.7 | |||||||
Information Technology | 10.1 | |||||||
Energy | 9.6 | |||||||
Communication Services | 7.1 | |||||||
Materials | 3.2 | |||||||
Consumer Staples | 2.7 | |||||||
Utilities | 2.7 | |||||||
Real Estate | 1.3 |
3
American Beacon Balanced FundSM
Performance Overview
April 30, 2021 (Unaudited)
Sector Allocation (% Fixed Income) | ||||||||
U.S. Treasury Obligations | 33.4 | |||||||
U.S. Agency Mortgage-Backed Obligations | 19.0 | |||||||
Financial | 13.2 | |||||||
Consumer, Non-Cyclical | 6.3 | |||||||
Communications | 5.5 | |||||||
Industrial | 4.4 | |||||||
Consumer, Cyclical | 4.4 | |||||||
Energy | 3.7 | |||||||
Utilities | 3.6 | |||||||
Technology | 3.4 | |||||||
Asset-Backed Obligations | 1.6 | |||||||
Basic Materials | 0.7 | |||||||
Commercial Mortgage-Backed Obligations | 0.6 | |||||||
Foreign Sovereign Obligations | 0.1 | |||||||
Collateralized Mortgage Obligations | 0.1 |
4
American Beacon Mid-Cap Value FundSM
Performance Overview
April 30, 2021 (Unaudited)
The Investor Class of the American Beacon Mid-Cap Value Fund (the “Fund”) returned 54.01% for the six months ended April 30, 2021. The Fund outperformed the Russell Midcap® Value Index (the “Index”) return of 41.41% for the same period.
Total Returns for the Period ended April 30, 2021 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||||
R5 Class (1,3,10) | AACIX | 54.13 | % | 80.87 | % | 10.32 | % | 11.43 | % | 10.58 | % | |||||||||||||||||||||
Y Class (1,4,10) | ACMYX | 54.09 | % | 80.62 | % | 10.23 | % | 11.34 | % | 10.49 | % | |||||||||||||||||||||
Investor Class (1,2,10) | AMPAX | 54.01 | % | �� | 80.42 | % | 10.03 | % | 11.15 | % | 10.31 | % | ||||||||||||||||||||
Advisor Class (1,5,10) | AMCSX | 53.64 | % | 79.73 | % | 9.71 | % | 10.83 | % | 9.99 | % | |||||||||||||||||||||
A Class without sales charge (1,6,10) | ABMAX | 53.84 | % | 80.07 | % | 9.88 | % | 10.98 | % | 10.10 | % | |||||||||||||||||||||
A Class with sales charge (1,6,10) | ABMAX | 44.97 | % | 69.75 | % | 7.74 | % | 9.68 | % | 9.45 | % | |||||||||||||||||||||
C Class without sales charge (1,7,10) | AMCCX | 53.31 | % | 78.86 | % | 9.13 | % | 10.21 | % | 9.31 | % | |||||||||||||||||||||
C Class with sales charge (1,7,10) | AMCCX | 52.31 | % | 77.86 | % | 9.13 | % | 10.21 | % | 9.31 | % | |||||||||||||||||||||
R6 Class (1,8,10) | AMDRX | 54.25 | % | 80.96 | % | 10.42 | % | 11.49 | % | 10.61 | % | |||||||||||||||||||||
Russell Midcap® Value Index (9) | 41.41 | % | 60.70 | % | 12.27 | % | 12.18 | % | 11.31 | % |
* | Not Annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future. |
2. | A portion of the fees charged to the Investor Class of the Fund was waived from 2006 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than actual returns shown for 2006 to 2013. |
3. | A portion of the fees charged to the R5 Class of the Fund was waived from 2005 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than actual returns shown for 2005 to 2013. |
4. | A portion of the fees charged to the Y Class of the Fund was waived from 2010 through 2013. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2013. |
5. | A portion of the fees charged to the Advisor Class of the Fund was waived from 2007 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown for 2007 to 2013. |
6. | A portion of the fees charged to the A Class of the Fund was waived for 2010 through 2012 and fully recovered in 2013. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. A Class shares have a maximum sales charge of 5.75%. |
7. | A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2013. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase. |
8. | Fund performance for the five-year and ten-year periods represents the returns achieved by the R5 Class from 4/30/11 through 2/28/18, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/11. A portion of fees charged to the R6 Class of the Fund has been waived since Class inception. Performance prior to waiving fees was lower than actual returns shown since inception. |
9. | The Russell Midcap® Value Index is an unmanaged index of those stocks in the Russell Midcap Index with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index. Russell Midcap Value Index, Russell Midcap Index and Russell 1000 Index are registered trademarks of Frank Russell Company. American Beacon Funds is not promoted, sponsored or endorsed by, nor in any way affiliated with the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. LSE Group is not responsible for and has not reviewed the American Beacon Mid-Cap Value Fund nor any associated literature or publications and LSE Group makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. All rights in the Russell Midcap Value Index (the “Index”) vest in the relevant LSE Group company which owns the Index. |
5
American Beacon Mid-Cap Value FundSM
Performance Overview
April 30, 2021 (Unaudited)
Russell 1000® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by the Manager. One cannot directly invest in an index. |
10. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, Advisor, A, C, and R6 Class shares were 0.96%, 1.04%, 1.22%, 1.54%, 1.31%, 2.06% and 0.97%, 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 stock selection and sector allocation for the period.
The Fund’s performance related to security selection was mostly attributed to investments in the Consumer Discretionary and Financials sectors. In Consumer Discretionary, SeaWorld Entertainment, Inc. (up 155.0%), Marriott Vacations Worldwide Corp. (up 88.3%), and Qurate Retail, Inc., (up 100.2%) boosted relative performance. Within the Financials sector, Signature Bank (up 211.5%) was a leading contributor, as were investments in SLM Corp. (up 107.3%), and Ally Financial, Inc. (up 87.7%). Within the Communications Sector, investments in Liberty Broadband Corp., Class C (up 16.9%) and Altice USA, Inc., Class A (up 28.3%) slightly offset these gains.
From a sector allocation perspective, a leading contributor was the Fund’s overweight to both Financials (up 58.4%) and Energy (up 85.9%), which were the best performing sectors in the Index. In contrast, an underweight to Information Technology dragged on relative performance.
The sub-advisor’s philosophy of investing in undervalued companies that exhibit improving profitability and earnings growth potential should allow the Fund to benefit in the longer term.
Top Ten Holdings (% Net Assets) |
| |||||||
Axis Capital Holdings Ltd. | 2.5 | |||||||
Edison International | 1.7 | |||||||
PROG Holdings, Inc. | 1.6 | |||||||
MGM Growth Properties LLC, Class A | 1.6 | |||||||
American International Group, Inc. | 1.6 | |||||||
Fidelity National Financial, Inc. | 1.5 | |||||||
Ally Financial, Inc. | 1.3 | |||||||
Equitable Holdings, Inc. | 1.3 | |||||||
Westinghouse Air Brake Technologies Corp. | 1.3 | |||||||
Gildan Activewear, Inc. | 1.3 | |||||||
Total Fund Holdings | 120 | |||||||
Sector Allocation (% Equities) | ||||||||
Financials | 27.0 | |||||||
Industrials | 18.2 | |||||||
Consumer Discretionary | 16.7 | |||||||
Materials | 8.1 | |||||||
Energy | 6.1 | |||||||
Health Care | 5.9 | |||||||
Utilities | 5.9 | |||||||
Real Estate | 5.7 | |||||||
Information Technology | 3.1 | |||||||
Communication Services | 1.8 | |||||||
Consumer Staples | 1.5 |
6
American Beacon FundsSM
April 30, 2021 (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 November 1, 2020 through April 30, 2021.
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 R5 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 R5 Classes that invest in the Funds through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.
You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Funds, such as sales charges (loads) or redemption fees, as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.
7
American Beacon FundsSM
Expense Examples
April 30, 2021 (Unaudited)
American Beacon Balanced Fund |
| ||||||||||||||
Beginning Account Value 11/1/2020 | Ending Account Value 4/30/2021 | Expenses Paid During Period 11/1/2020-4/30/2021* | |||||||||||||
R5 Class | |||||||||||||||
Actual | $1,000.00 | $1,288.60 | $3.86 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.42 | $3.41 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,288.00 | $4.20 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.13 | $3.71 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,286.20 | $5.56 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.94 | $4.91 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,285.50 | $6.46 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.14 | $5.71 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,286.90 | $5.67 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.84 | $5.01 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,281.40 | $9.79 | ||||||||||||
Hypothetical** | $1,000.00 | $1,016.22 | $8.65 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.68%, 0.74%, 0.98%, 1.14%, 1.00%, and 1.73% for the R5, Y, Investor, Advisor, A, and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
American Beacon Mid-Cap Value Fund | |||||||||||||||
Beginning Account Value 11/1/2020 | Ending Account Value 4/30/2021 | Expenses Paid During Period 11/1/2020-4/30/2021* | |||||||||||||
R5 Class | |||||||||||||||
Actual | $1,000.00 | $1,541.30 | $6.11 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.98 | $4.86 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,540.90 | $6.55 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.64 | $5.21 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,540.10 | $7.49 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.89 | $5.96 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,536.40 | $10.00 | ||||||||||||
Hypothetical** | $1,000.00 | $1,016.91 | $7.95 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,538.40 | $8.43 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.15 | $6.71 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,533.10 | $13.06 | ||||||||||||
Hypothetical** | $1,000.00 | $1,014.48 | $10.39 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,542.50 | $5.55 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.43 | $4.41 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.97%, 1.04%, 1.19%, 1.59%, 1.34%, 2.08%, and 0.88% for the R5, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
8
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 61.41% | |||||||||||||||
Communication Services - 4.36% | |||||||||||||||
Interactive Media & Services - 0.65% | |||||||||||||||
Alphabet, Inc., Class AA | 510 | $ | 1,200,285 | ||||||||||||
|
| ||||||||||||||
Media - 3.24% | |||||||||||||||
Altice USA, Inc., Class AA | 35,760 | 1,298,446 | |||||||||||||
Comcast Corp., Class A | 38,236 | 2,146,951 | |||||||||||||
Discovery, Inc., Class CA | 30,199 | 975,730 | |||||||||||||
Interpublic Group of Cos., Inc. | 9,200 | 292,100 | |||||||||||||
News Corp., Class A | 36,500 | 956,118 | |||||||||||||
Omnicom Group, Inc. | 3,586 | 294,984 | |||||||||||||
|
| ||||||||||||||
5,964,329 | |||||||||||||||
|
| ||||||||||||||
Wireless Telecommunication Services - 0.47% | |||||||||||||||
Vodafone Group PLC, Sponsored ADR | 45,832 | 868,516 | |||||||||||||
|
| ||||||||||||||
Total Communication Services | 8,033,130 | ||||||||||||||
|
| ||||||||||||||
Consumer Discretionary - 6.81% | |||||||||||||||
Auto Components - 0.89% | |||||||||||||||
Adient PLCA | 4,932 | 228,549 | |||||||||||||
Goodyear Tire & Rubber Co.A | 14,559 | 250,560 | |||||||||||||
Magna International, Inc. | 12,304 | 1,161,744 | |||||||||||||
|
| ||||||||||||||
1,640,853 | |||||||||||||||
|
| ||||||||||||||
Automobiles - 1.02% | |||||||||||||||
General Motors Co. | 25,542 | 1,461,514 | |||||||||||||
Harley-Davidson, Inc. | 8,641 | 417,965 | |||||||||||||
|
| ||||||||||||||
�� | 1,879,479 | ||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 1.72% | |||||||||||||||
Aramark | 39,204 | 1,523,859 | |||||||||||||
Booking Holdings, Inc.A | 200 | 493,216 | |||||||||||||
Las Vegas Sands Corp. | 18,888 | 1,157,079 | |||||||||||||
|
| ||||||||||||||
3,174,154 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 0.48% | |||||||||||||||
Lennar Corp., Class A | 8,508 | 881,429 | |||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.64% | |||||||||||||||
Dollar General Corp. | 5,527 | 1,186,923 | |||||||||||||
|
| ||||||||||||||
Specialty Retail - 1.50% | |||||||||||||||
Advance Auto Parts, Inc. | 7,605 | 1,522,217 | |||||||||||||
Lowe’s Cos., Inc. | 6,342 | 1,244,617 | |||||||||||||
|
| ||||||||||||||
2,766,834 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.56% | |||||||||||||||
Ralph Lauren Corp. | 7,673 | 1,022,734 | |||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 12,552,406 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 1.67% | |||||||||||||||
Beverages - 0.86% | |||||||||||||||
Coca-Cola European Partners PLC | 28,036 | 1,593,006 | |||||||||||||
|
| ||||||||||||||
Food Products - 0.27% | |||||||||||||||
Mondelez International, Inc., Class A | 8,200 | 498,642 | |||||||||||||
|
| ||||||||||||||
See accompanying notes
9
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 61.41% (continued) | |||||||||||||||
Consumer Staples - 1.67% (continued) | |||||||||||||||
Personal Products - 0.54% | |||||||||||||||
Unilever PLC, Sponsored ADR | 16,800 | $ | 986,496 | ||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 3,078,144 | ||||||||||||||
|
| ||||||||||||||
Energy - 5.88% | |||||||||||||||
Energy Equipment & Services - 0.94% | |||||||||||||||
Baker Hughes Co. | 13,500 | 271,080 | |||||||||||||
Halliburton Co. | 26,800 | 524,208 | |||||||||||||
NOV, Inc. | 41,000 | 612,950 | |||||||||||||
Schlumberger N.V. | 12,300 | 332,715 | |||||||||||||
|
| ||||||||||||||
1,740,953 | |||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 4.94% | |||||||||||||||
APA Corp. | 48,214 | 964,280 | |||||||||||||
Chevron Corp. | 11,197 | 1,154,075 | |||||||||||||
Hess Corp. | 30,582 | 2,278,665 | |||||||||||||
Marathon Oil Corp. | 108,731 | 1,224,311 | |||||||||||||
Marathon Petroleum Corp. | 7,131 | 396,840 | |||||||||||||
Murphy Oil Corp. | 7,000 | 118,510 | |||||||||||||
Phillips 66 | 26,734 | 2,163,048 | |||||||||||||
Royal Dutch Shell PLC, Class A, Sponsored ADR | 21,135 | 803,130 | |||||||||||||
|
| ||||||||||||||
9,102,859 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 10,843,812 | ||||||||||||||
|
| ||||||||||||||
Financials - 16.64% | |||||||||||||||
Banks - 7.63% | |||||||||||||||
Bank of America Corp. | 27,798 | 1,126,653 | |||||||||||||
CIT Group, Inc. | 7,850 | 418,326 | |||||||||||||
Citigroup, Inc. | 57,894 | 4,124,368 | |||||||||||||
Citizens Financial Group, Inc. | 12,068 | 558,507 | |||||||||||||
JPMorgan Chase & Co. | 10,602 | 1,630,694 | |||||||||||||
US Bancorp | 27,196 | 1,614,083 | |||||||||||||
Wells Fargo & Co. | 102,066 | 4,598,073 | |||||||||||||
|
| ||||||||||||||
14,070,704 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 2.83% | |||||||||||||||
Bank of New York Mellon Corp. | 17,615 | 878,636 | |||||||||||||
Goldman Sachs Group, Inc. | 8,499 | 2,961,477 | |||||||||||||
Northern Trust Corp. | 7,114 | 809,573 | |||||||||||||
State Street Corp. | 6,806 | 571,364 | |||||||||||||
|
| ||||||||||||||
5,221,050 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 1.46% | |||||||||||||||
American Express Co. | 6,745 | 1,034,346 | |||||||||||||
Discover Financial Services | 2,800 | 319,200 | |||||||||||||
Navient Corp. | 30,916 | 520,316 | |||||||||||||
SLM Corp. | 41,600 | 817,856 | |||||||||||||
|
| ||||||||||||||
2,691,718 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.77% | |||||||||||||||
Berkshire Hathaway, Inc., Class BA | 3,100 | 852,345 | |||||||||||||
Equitable Holdings, Inc. | 16,300 | 557,949 | |||||||||||||
|
| ||||||||||||||
1,410,294 | |||||||||||||||
|
| ||||||||||||||
Insurance - 3.95% | |||||||||||||||
American International Group, Inc. | 83,409 | 4,041,166 |
See accompanying notes
10
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 61.41% (continued) | |||||||||||||||
Financials - 16.64% (continued) | |||||||||||||||
Insurance - 3.95% (continued) | |||||||||||||||
Chubb Ltd. | 4,827 | $ | 828,265 | ||||||||||||
Hartford Financial Services Group, Inc. | 9,900 | 653,004 | |||||||||||||
Travelers Cos., Inc. | 5,657 | 874,912 | |||||||||||||
Willis Towers Watson PLC | 3,417 | 884,524 | |||||||||||||
|
| ||||||||||||||
7,281,871 | |||||||||||||||
|
| ||||||||||||||
Total Financials | 30,675,637 | ||||||||||||||
|
| ||||||||||||||
Health Care - 6.58% | |||||||||||||||
Biotechnology - 0.11% | |||||||||||||||
Biogen, Inc.A | 772 | 206,379 | |||||||||||||
|
| ||||||||||||||
Health Care Equipment & Supplies - 1.24% | |||||||||||||||
Boston Scientific Corp.A | 6,900 | 300,840 | |||||||||||||
Medtronic PLC | 12,276 | 1,607,174 | |||||||||||||
Zimmer Biomet Holdings, Inc. | 2,132 | 377,705 | |||||||||||||
|
| ||||||||||||||
2,285,719 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 4.40% | |||||||||||||||
Anthem, Inc. | 9,091 | 3,449,034 | |||||||||||||
Centene Corp.A | 9,000 | 555,660 | |||||||||||||
CVS Health Corp. | 17,022 | 1,300,481 | |||||||||||||
HCA Healthcare, Inc. | 1,400 | 281,484 | |||||||||||||
Humana, Inc. | 1,000 | 445,240 | |||||||||||||
UnitedHealth Group, Inc. | 5,221 | 2,082,135 | |||||||||||||
|
| ||||||||||||||
8,114,034 | |||||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 0.83% | |||||||||||||||
Bristol-Myers Squibb Co. | 5,500 | 343,310 | |||||||||||||
GlaxoSmithKline PLC, Sponsored ADRB | 18,743 | 699,864 | |||||||||||||
Sanofi, ADRB | 9,203 | 481,961 | |||||||||||||
|
| ||||||||||||||
1,525,135 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 12,131,267 | ||||||||||||||
|
| ||||||||||||||
Industrials - 8.86% | |||||||||||||||
Aerospace & Defense - 1.76% | |||||||||||||||
General Dynamics Corp. | 7,123 | 1,355,008 | |||||||||||||
Raytheon Technologies Corp. | 22,650 | 1,885,386 | |||||||||||||
|
| ||||||||||||||
3,240,394 | |||||||||||||||
|
| ||||||||||||||
Air Freight & Logistics - 0.52% | |||||||||||||||
FedEx Corp. | 3,300 | 958,023 | |||||||||||||
|
| ||||||||||||||
Construction & Engineering - 1.56% | |||||||||||||||
AECOMA | 26,591 | 1,766,440 | |||||||||||||
Fluor Corp.A | 7,000 | 160,860 | |||||||||||||
Quanta Services, Inc. | 9,894 | 956,156 | |||||||||||||
|
| ||||||||||||||
2,883,456 | |||||||||||||||
|
| ||||||||||||||
Electrical Equipment - 0.28% | |||||||||||||||
Emerson Electric Co. | 5,792 | 524,118 | |||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 1.27% | |||||||||||||||
General Electric Co. | 178,700 | 2,344,544 | |||||||||||||
|
| ||||||||||||||
See accompanying notes
11
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 61.41% (continued) | |||||||||||||||
Industrials - 8.86% (continued) | |||||||||||||||
Machinery - 2.88% | |||||||||||||||
CNH Industrial N.V. | 68,680 | $ | 1,019,211 | ||||||||||||
Cummins, Inc. | 3,172 | 799,471 | |||||||||||||
Deere & Co. | 3,288 | 1,219,355 | |||||||||||||
PACCAR, Inc. | 3,039 | 273,146 | |||||||||||||
Stanley Black & Decker, Inc. | 8,491 | 1,755,684 | |||||||||||||
Westinghouse Air Brake Technologies Corp. | 2,858 | 234,556 | |||||||||||||
|
| ||||||||||||||
5,301,423 | |||||||||||||||
|
| ||||||||||||||
Road & Rail - 0.59% | |||||||||||||||
JB Hunt Transport Services, Inc. | 6,344 | 1,082,984 | |||||||||||||
|
| ||||||||||||||
Total Industrials | 16,334,942 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 6.20% | |||||||||||||||
Communications Equipment - 0.79% | |||||||||||||||
F5 Networks, Inc.A | 4,500 | 840,420 | |||||||||||||
Telefonaktiebolaget LM Ericsson, Sponsored ADR | 44,920 | 619,447 | |||||||||||||
|
| ||||||||||||||
1,459,867 | |||||||||||||||
|
| ||||||||||||||
Electronic Equipment, Instruments & Components - 0.84% | |||||||||||||||
Corning, Inc. | 19,095 | 844,190 | |||||||||||||
TE Connectivity Ltd. | 5,158 | 693,596 | |||||||||||||
|
| ||||||||||||||
1,537,786 | |||||||||||||||
|
| ||||||||||||||
IT Services - 0.78% | |||||||||||||||
Cognizant Technology Solutions Corp., Class A | 17,916 | 1,440,446 | |||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 1.68% | |||||||||||||||
Broadcom, Inc. | 3,140 | 1,432,468 | |||||||||||||
QUALCOMM, Inc. | 5,983 | 830,440 | |||||||||||||
Texas Instruments, Inc. | 4,640 | 837,567 | |||||||||||||
|
| ||||||||||||||
3,100,475 | |||||||||||||||
|
| ||||||||||||||
Software - 1.74% | |||||||||||||||
Microsoft Corp. | 5,445 | 1,373,120 | |||||||||||||
Oracle Corp. | 24,143 | 1,829,798 | |||||||||||||
|
| ||||||||||||||
3,202,918 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 0.37% | |||||||||||||||
Hewlett Packard Enterprise Co. | 43,008 | 688,988 | |||||||||||||
|
| ||||||||||||||
Total Information Technology | 11,430,480 | ||||||||||||||
|
| ||||||||||||||
Materials - 1.95% | |||||||||||||||
Chemicals - 1.70% | |||||||||||||||
Corteva, Inc. | 28,304 | 1,380,103 | |||||||||||||
International Flavors & Fragrances, Inc. | 12,310 | 1,750,113 | |||||||||||||
|
| ||||||||||||||
3,130,216 | |||||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.25% | |||||||||||||||
International Paper Co. | 7,925 | 459,650 | |||||||||||||
|
| ||||||||||||||
Total Materials | 3,589,866 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
12
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 61.41% (continued) | |||||||||||||||
Real Estate - 0.81% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 0.81% | |||||||||||||||
MGM Growth Properties LLC, Class A | 41,386 | $ | 1,490,724 | ||||||||||||
|
| ||||||||||||||
Utilities - 1.65% | |||||||||||||||
Electric Utilities - 1.65% | |||||||||||||||
Edison International | 14,867 | 883,843 | |||||||||||||
Exelon Corp. | 15,421 | 693,020 | |||||||||||||
PPL Corp. | 40,347 | 1,175,308 | |||||||||||||
Southern Co. | 4,343 | 287,376 | |||||||||||||
|
| ||||||||||||||
3,039,547 | |||||||||||||||
|
| ||||||||||||||
Total Utilities | 3,039,547 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $77,619,555) | 113,199,955 | ||||||||||||||
|
| ||||||||||||||
Principal Amount | |||||||||||||||
CORPORATE OBLIGATIONS - 13.53% | |||||||||||||||
Basic Materials - 0.21% | |||||||||||||||
Chemicals - 0.10% | |||||||||||||||
Dow Chemical Co., 3.500%, Due 10/1/2024 | $ | 61,000 | 65,855 | ||||||||||||
EI du Pont de Nemours and Co., 1.700%, Due 7/15/2025 | 70,000 | 71,930 | |||||||||||||
LYB International Finance LLC, 2.250%, Due 10/1/2030 | 60,000 | 58,522 | |||||||||||||
|
| ||||||||||||||
196,307 | |||||||||||||||
|
| ||||||||||||||
Forest Products & Paper - 0.03% | |||||||||||||||
International Paper Co., 6.000%, Due 11/15/2041 | 40,000 | 54,619 | |||||||||||||
|
| ||||||||||||||
Iron/Steel - 0.08% | |||||||||||||||
Nucor Corp., 4.000%, Due 8/1/2023 | 55,000 | 58,772 | |||||||||||||
Steel Dynamics, Inc., 3.250%, Due 1/15/2031 | 80,000 | 84,974 | |||||||||||||
|
| ||||||||||||||
143,746 | |||||||||||||||
|
| ||||||||||||||
Total Basic Materials | 394,672 | ||||||||||||||
|
| ||||||||||||||
Communications - 1.28% | |||||||||||||||
Internet - 0.27% | |||||||||||||||
Amazon.com, Inc., | |||||||||||||||
0.800%, Due 6/3/2025 | 350,000 | 350,562 | |||||||||||||
3.875%, Due 8/22/2037 | 120,000 | 138,266 | |||||||||||||
|
| ||||||||||||||
488,828 | |||||||||||||||
|
| ||||||||||||||
Media - 0.41% | |||||||||||||||
Charter Communications Operating LLC / Charter Communications Operating Capital, | |||||||||||||||
2.800%, Due 4/1/2031 | 50,000 | 49,514 | |||||||||||||
3.700%, Due 4/1/2051 | 60,000 | 56,376 | |||||||||||||
Comcast Corp., | �� | ||||||||||||||
3.150%, Due 3/1/2026 | 59,000 | 64,367 | |||||||||||||
3.400%, Due 4/1/2030 | 80,000 | 87,092 | |||||||||||||
1.950%, Due 1/15/2031 | 75,000 | 72,463 | |||||||||||||
4.600%, Due 10/15/2038 | 50,000 | 60,755 | |||||||||||||
6.550%, Due 7/1/2039 | 217,000 | 316,197 | |||||||||||||
Walt Disney Co., 6.400%, Due 12/15/2035 | 35,000 | 50,013 | |||||||||||||
|
| ||||||||||||||
756,777 | |||||||||||||||
|
| ||||||||||||||
See accompanying notes
13
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 13.53% (continued) | |||||||||||||||
Communications - 1.28% (continued) | |||||||||||||||
Telecommunications - 0.60% | |||||||||||||||
AT&T, Inc., | |||||||||||||||
0.900%, Due 3/25/2024 | $ | 110,000 | $ | 110,250 | |||||||||||
3.400%, Due 5/15/2025 | 169,000 | 183,939 | |||||||||||||
2.250%, Due 2/1/2032 | 65,000 | 61,583 | |||||||||||||
5.350%, Due 9/1/2040 | 65,000 | 80,013 | |||||||||||||
T-Mobile USA, Inc., | |||||||||||||||
3.750%, Due 4/15/2027C | 90,000 | 99,137 | |||||||||||||
3.875%, Due 4/15/2030C | 90,000 | 98,037 | |||||||||||||
Verizon Communications, Inc. | |||||||||||||||
2.625%, Due 8/15/2026 | 80,000 | 84,953 | |||||||||||||
4.329%, Due 9/21/2028 | 180,000 | 207,422 | |||||||||||||
3.150%, Due 3/22/2030 | 60,000 | 63,434 | |||||||||||||
4.500%, Due 8/10/2033 | 50,000 | 58,899 | |||||||||||||
3.550%, Due 3/22/2051 | 55,000 | 55,768 | |||||||||||||
|
| ||||||||||||||
1,103,435 | |||||||||||||||
|
| ||||||||||||||
Total Communications | 2,349,040 | ||||||||||||||
|
| ||||||||||||||
Consumer, Cyclical - 1.53% | |||||||||||||||
Airlines - 0.04% | |||||||||||||||
American Airlines Pass Through Trust, 3.150%, Due 8/15/2033, Series AA | 80,398 | 80,304 | |||||||||||||
|
| ||||||||||||||
Auto Manufacturers - 0.41% | |||||||||||||||
American Honda Finance Corp., 2.000%, Due 3/24/2028 | 55,000 | 55,512 | |||||||||||||
Cummins, Inc., 0.750%, Due 9/1/2025 | 65,000 | 64,327 | |||||||||||||
General Motors Financial Co., Inc., | |||||||||||||||
1.700%, Due 8/18/2023 | 75,000 | 76,543 | |||||||||||||
1.250%, Due 1/8/2026 | 45,000 | 44,421 | |||||||||||||
Toyota Motor Credit Corp., 1.800%, Due 2/13/2025 | 500,000 | 517,188 | |||||||||||||
|
| ||||||||||||||
757,991 | |||||||||||||||
|
| ||||||||||||||
Auto Parts & Equipment - 0.05% | |||||||||||||||
Aptiv Corp., 4.150%, Due 3/15/2024 | 80,000 | 87,167 | |||||||||||||
|
| ||||||||||||||
Home Furnishings - 0.03% | |||||||||||||||
Whirlpool Corp., 4.600%, Due 5/15/2050 | 50,000 | 59,234 | |||||||||||||
|
| ||||||||||||||
Lodging - 0.03% | |||||||||||||||
Marriott International, Inc., 2.850%, Due 4/15/2031, Series H | 55,000 | 54,640 | |||||||||||||
|
| ||||||||||||||
Retail - 0.97% | |||||||||||||||
Dollar General Corp., 4.125%, Due 5/1/2028 | 40,000 | 45,216 | |||||||||||||
Dollar Tree, Inc., 3.700%, Due 5/15/2023 | 55,000 | 58,368 | |||||||||||||
Home Depot, Inc., | |||||||||||||||
2.950%, Due 6/15/2029 | 500,000 | 534,934 | |||||||||||||
1.375%, Due 3/15/2031 | 350,000 | 325,336 | |||||||||||||
3.300%, Due 4/15/2040 | 50,000 | 53,051 | |||||||||||||
Lowe’s Cos., Inc., 2.500%, Due 4/15/2026 | 65,000 | 68,886 | |||||||||||||
McDonald’s Corp., 3.700%, Due 1/30/2026 | 73,000 | 81,159 | |||||||||||||
O’Reilly Automotive, Inc., 4.350%, Due 6/1/2028 | 80,000 | 91,215 | |||||||||||||
Starbucks Corp., 2.550%, Due 11/15/2030 | 60,000 | 60,639 | |||||||||||||
Tractor Supply Co., 1.750%, Due 11/1/2030 | 60,000 | 56,070 | |||||||||||||
Walmart, Inc., | |||||||||||||||
2.375%, Due 9/24/2029 | 150,000 | 156,674 | |||||||||||||
7.550%, Due 2/15/2030 | 169,000 | 246,113 | |||||||||||||
|
| ||||||||||||||
1,777,661 | |||||||||||||||
|
| ||||||||||||||
Total Consumer, Cyclical | 2,816,997 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
14
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 13.53% (continued) | |||||||||||||||
Consumer, Non-Cyclical - 1.65% | |||||||||||||||
Agriculture - 0.11% | |||||||||||||||
Altria Group, Inc., 4.750%, Due 5/5/2021 | $ | 145,000 | $ | 145,017 | |||||||||||
Cargill, Inc., 1.375%, Due 7/23/2023C | 50,000 | 51,055 | |||||||||||||
|
| ||||||||||||||
196,072 | |||||||||||||||
|
| ||||||||||||||
Beverages - 0.04% | |||||||||||||||
Keurig Dr Pepper, Inc., 0.750%, Due 3/15/2024 | 85,000 | 85,026 | |||||||||||||
|
| ||||||||||||||
Biotechnology - 0.03% | |||||||||||||||
Amgen, Inc., 4.400%, Due 5/1/2045 | 55,000 | 63,925 | |||||||||||||
|
| ||||||||||||||
Commercial Services - 0.08% | |||||||||||||||
Moody’s Corp., 2.550%, Due 8/18/2060 | 50,000 | 41,285 | |||||||||||||
Quanta Services, Inc., 2.900%, Due 10/1/2030 | 100,000 | 102,649 | |||||||||||||
|
| ||||||||||||||
143,934 | |||||||||||||||
|
| ||||||||||||||
Food - 0.03% | |||||||||||||||
Mondelez International, Inc., 1.500%, Due 2/4/2031 | 65,000 | 60,169 | |||||||||||||
|
| ||||||||||||||
Health Care - Products - 0.22% | |||||||||||||||
Abbott Laboratories, 1.150%, Due 1/30/2028 | 95,000 | 91,722 | |||||||||||||
Medtronic, Inc., 3.500%, Due 3/15/2025 | 219,000 | 241,423 | |||||||||||||
Zimmer Biomet Holdings, Inc., 3.550%, Due 4/1/2025 | 60,000 | 65,385 | |||||||||||||
|
| ||||||||||||||
398,530 | |||||||||||||||
|
| ||||||||||||||
Health Care - Services - 0.23% | |||||||||||||||
Baylor Scott & White Holdings, 2.839%, Due 11/15/2050, Series 2021 | 60,000 | 57,448 | |||||||||||||
Children’s Health System of Texas, 2.511%, Due 8/15/2050 | 65,000 | 58,237 | |||||||||||||
Community Health Network, Inc., 3.099%, Due 5/1/2050, Series 20-A | 80,000 | 76,450 | |||||||||||||
HCA, Inc., 4.125%, Due 6/15/2029 | 55,000 | 61,101 | |||||||||||||
Health Care Service Corp., 3.200%, Due 6/1/2050C | 40,000 | 39,113 | |||||||||||||
Kaiser Foundation Hospitals, 4.150%, Due 5/1/2047 | 30,000 | 35,995 | |||||||||||||
Sutter Health, 2.294%, Due 8/15/2030, Series 20A | 95,000 | 94,157 | |||||||||||||
|
| ||||||||||||||
422,501 | |||||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 0.91% | |||||||||||||||
AbbVie, Inc., | |||||||||||||||
4.450%, Due 5/14/2046 | 60,000 | 69,464 | |||||||||||||
4.250%, Due 11/21/2049 | 85,000 | 96,569 | |||||||||||||
Bristol-Myers Squibb Co., | |||||||||||||||
0.750%, Due 11/13/2025 | 350,000 | 346,883 | |||||||||||||
3.400%, Due 7/26/2029 | 650,000 | 716,549 | |||||||||||||
2.350%, Due 11/13/2040 | 60,000 | 55,501 | |||||||||||||
Cigna Corp., 4.125%, Due 11/15/2025 | 50,000 | 56,186 | |||||||||||||
CVS Health Corp., | |||||||||||||||
4.300%, Due 3/25/2028 | 100,000 | 113,679 | |||||||||||||
5.050%, Due 3/25/2048 | 30,000 | 36,847 | |||||||||||||
Shire Acquisitions Investments Ireland DAC, 2.875%, Due 9/23/2023 | 65,000 | 68,239 | |||||||||||||
Viatris, Inc., 3.850%, Due 6/22/2040C | 45,000 | 45,895 | |||||||||||||
Zoetis, Inc., 3.000%, Due 9/12/2027 | 60,000 | 64,613 | |||||||||||||
|
| ||||||||||||||
1,670,425 | |||||||||||||||
|
| ||||||||||||||
Total Consumer, Non-Cyclical | 3,040,582 | ||||||||||||||
|
| ||||||||||||||
Energy - 0.69% | |||||||||||||||
Oil & Gas - 0.29% | |||||||||||||||
BP Capital Markets America, Inc., 3.017%, Due 1/16/2027 | 35,000 | 37,530 | |||||||||||||
Chevron USA, Inc., 2.343%, Due 8/12/2050 | 65,000 | 55,062 |
See accompanying notes
15
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 13.53% (continued) | |||||||||||||||
Energy - 0.69% (continued) | |||||||||||||||
Oil & Gas - 0.29% (continued) | |||||||||||||||
ConocoPhillips, 4.300%, Due 8/15/2028C | $ | 60,000 | $ | 68,498 | |||||||||||
Diamondback Energy, Inc., | |||||||||||||||
2.875%, Due 12/1/2024 | 70,000 | 74,193 | |||||||||||||
3.125%, Due 3/24/2031 | 35,000 | 35,330 | |||||||||||||
EOG Resources, Inc., 4.375%, Due 4/15/2030 | 40,000 | 46,164 | |||||||||||||
Marathon Petroleum Corp., | |||||||||||||||
4.500%, Due 5/1/2023 | 65,000 | 69,630 | |||||||||||||
5.125%, Due 12/15/2026 | 60,000 | 70,703 | |||||||||||||
Pioneer Natural Resources Co., 1.900%, Due 8/15/2030 | 45,000 | 42,042 | |||||||||||||
Valero Energy Corp., 2.700%, Due 4/15/2023 | 30,000 | 31,189 | |||||||||||||
|
| ||||||||||||||
530,341 | |||||||||||||||
|
| ||||||||||||||
Pipelines - 0.40% | |||||||||||||||
Columbia Pipeline Group, Inc., 4.500%, Due 6/1/2025 | 61,000 | 68,682 | |||||||||||||
Energy Transfer LP, | |||||||||||||||
4.250%, Due 4/1/2024 | 38,000 | 41,138 | |||||||||||||
3.750%, Due 5/15/2030 | 20,000 | 20,801 | |||||||||||||
Enterprise Products Operating LLC, 6.125%, Due 10/15/2039 | 35,000 | 46,944 | |||||||||||||
MPLX LP, | |||||||||||||||
1.750%, Due 3/1/2026 | 85,000 | 85,480 | |||||||||||||
4.125%, Due 3/1/2027 | 45,000 | 50,073 | |||||||||||||
5.200%, Due 3/1/2047 | 31,000 | 36,236 | |||||||||||||
ONEOK, Inc., 4.550%, Due 7/15/2028 | 65,000 | 72,486 | |||||||||||||
Phillips 66 Partners LP, | |||||||||||||||
3.550%, Due 10/1/2026 | 33,000 | 35,706 | |||||||||||||
3.750%, Due 3/1/2028 | 40,000 | 43,060 | |||||||||||||
Sabine Pass Liquefaction LLC, | |||||||||||||||
5.625%, Due 4/15/2023 | 60,000 | 64,905 | |||||||||||||
5.625%, Due 3/1/2025 | 45,000 | 51,619 | |||||||||||||
4.200%, Due 3/15/2028 | 50,000 | 55,356 | |||||||||||||
Williams Cos., Inc., 5.400%, Due 3/4/2044 | 60,000 | 70,824 | |||||||||||||
|
| ||||||||||||||
743,310 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 1,273,651 | ||||||||||||||
|
| ||||||||||||||
Financial - 4.38% | |||||||||||||||
Banks - 2.95% | |||||||||||||||
Bank of America Corp., | |||||||||||||||
4.125%, Due 1/22/2024 | 193,000 | 211,350 | |||||||||||||
1.197%, Due 10/24/2026, (SOFR + 1.010%)D | 165,000 | 163,807 | |||||||||||||
1.734%, Due 7/22/2027, (SOFR + 0.960%)D | 350,000 | 353,070 | |||||||||||||
6.110%, Due 1/29/2037 | 176,000 | 236,182 | |||||||||||||
5.000%, Due 1/21/2044 | 145,000 | 184,185 | |||||||||||||
Citigroup, Inc., | |||||||||||||||
4.412%, Due 3/31/2031, (SOFR + 3.914%)D | 245,000 | 280,298 | |||||||||||||
5.875%, Due 1/30/2042 | 145,000 | 200,758 | |||||||||||||
Fifth Third Bank N.A., 2.250%, Due 2/1/2027 | 500,000 | 520,873 | |||||||||||||
Goldman Sachs Group, Inc., | |||||||||||||||
5.750%, Due 1/24/2022 | 385,000 | 400,166 | |||||||||||||
2.908%, Due 6/5/2023, (3-mo. USD LIBOR + 1.053%)D | 80,000 | 82,093 | |||||||||||||
3.500%, Due 1/23/2025 | 60,000 | 65,103 | |||||||||||||
3.272%, Due 9/29/2025, (3-mo. USD LIBOR + 1.201%)D | 55,000 | 59,061 | |||||||||||||
2.615%, Due 4/22/2032, (SOFR + 1.281%)D | 55,000 | 55,223 | |||||||||||||
JPMorgan Chase & Co., | |||||||||||||||
3.625%, Due 5/13/2024 | 434,000 | 473,352 | |||||||||||||
2.301%, Due 10/15/2025, (SOFR + 1.160%)D | 180,000 | 187,718 | |||||||||||||
3.782%, Due 2/1/2028, (3-mo. USD LIBOR + 1.337%)D | 105,000 | 116,511 | |||||||||||||
3.882%, Due 7/24/2038, (3-mo. USD LIBOR + 1.360%)D | 90,000 | 99,741 | |||||||||||||
5.500%, Due 10/15/2040 | 313,000 | 412,045 |
See accompanying notes
16
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 13.53% (continued) | |||||||||||||||
Financial - 4.38% (continued) | |||||||||||||||
Banks - 2.95% (continued) | |||||||||||||||
Morgan Stanley, | |||||||||||||||
3.591%, Due 7/22/2028, (3-mo. USD LIBOR + 1.340%)D | $ | 90,000 | $ | 99,005 | |||||||||||
1.794%, Due 2/13/2032, (SOFR + 1.034%)D | 115,000 | 107,761 | |||||||||||||
0.864%, Due 10/21/2025, Series I, (SOFR + 0.745%)D | 35,000 | 34,947 | |||||||||||||
PNC Financial Services Group, Inc., | |||||||||||||||
3.500%, Due 1/23/2024 | 80,000 | 86,188 | |||||||||||||
2.550%, Due 1/22/2030 | 500,000 | 513,032 | |||||||||||||
State Street Corp., | |||||||||||||||
2.354%, Due 11/1/2025, (SOFR + 0.940%)D | 65,000 | 68,380 | |||||||||||||
2.200%, Due 3/3/2031 | 55,000 | 53,979 | |||||||||||||
Truist Financial Corp., 1.267%, Due 3/2/2027, (SOFR + 0.609%)D | 55,000 | 54,724 | |||||||||||||
US Bancorp, 1.375%, Due 7/22/2030 | 85,000 | 79,651 | |||||||||||||
Wells Fargo & Co., | |||||||||||||||
2.572%, Due 2/11/2031, (SOFR + 1.262%)D | 160,000 | 161,609 | |||||||||||||
4.750%, Due 12/7/2046 | 60,000 | 71,498 | |||||||||||||
|
| ||||||||||||||
5,432,310 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.17% | |||||||||||||||
American Express Co., 4.200%, Due 11/6/2025 | 60,000 | 68,056 | |||||||||||||
CBOE Global Markets, Inc., 3.650%, Due 1/12/2027 | 60,000 | 66,393 | |||||||||||||
Charles Schwab Corp., | |||||||||||||||
0.750%, Due 3/18/2024 | 45,000 | 45,289 | |||||||||||||
3.250%, Due 5/22/2029 | 65,000 | 70,820 | |||||||||||||
Visa, Inc., 3.150%, Due 12/14/2025 | 60,000 | 65,600 | |||||||||||||
|
| ||||||||||||||
316,158 | |||||||||||||||
|
| ||||||||||||||
Insurance - 0.75% | |||||||||||||||
American International Group, Inc., 4.875%, Due 6/1/2022 | 289,000 | 302,582 | |||||||||||||
Chubb INA Holdings, Inc., 3.350%, Due 5/3/2026 | 65,000 | 71,344 | |||||||||||||
CNA Financial Corp., 2.050%, Due 8/15/2030 | 55,000 | 52,647 | |||||||||||||
Liberty Mutual Group, Inc., 4.569%, Due 2/1/2029C | 38,000 | 44,058 | |||||||||||||
MetLife, Inc., | |||||||||||||||
6.375%, Due 6/15/2034 | 169,000 | 239,249 | |||||||||||||
4.721%, Due 12/15/2044 | 193,000 | 240,492 | |||||||||||||
Prudential Financial, Inc., 4.600%, Due 5/15/2044 | 313,000 | 380,404 | |||||||||||||
Trinity Acquisition PLC, 4.400%, Due 3/15/2026 | 52,000 | 58,744 | |||||||||||||
|
| ||||||||||||||
1,389,520 | |||||||||||||||
|
| ||||||||||||||
REITS - 0.51% | |||||||||||||||
Alexandria Real Estate Equities, Inc., 1.875%, Due 2/1/2033 | 65,000 | 59,917 | |||||||||||||
American Tower Corp., 2.950%, Due 1/15/2051 | 60,000 | 54,904 | |||||||||||||
Camden Property Trust, 3.150%, Due 7/1/2029 | 60,000 | 63,893 | |||||||||||||
Crown Castle International Corp., | |||||||||||||||
3.800%, Due 2/15/2028 | 60,000 | 65,864 | |||||||||||||
2.900%, Due 4/1/2041 | 55,000 | 51,166 | |||||||||||||
Digital Realty Trust LP, 3.700%, Due 8/15/2027 | 55,000 | 60,885 | |||||||||||||
ERP Operating LP, 3.000%, Due 4/15/2023 | 37,000 | 38,667 | |||||||||||||
Healthpeak Properties, Inc., 3.250%, Due 7/15/2026 | 35,000 | 38,036 | |||||||||||||
National Retail Properties, Inc., 3.500%, Due 4/15/2051 | 45,000 | 44,870 | |||||||||||||
Omega Healthcare Investors, Inc., 3.250%, Due 4/15/2033 | 80,000 | 77,961 | |||||||||||||
Prologis LP, 1.250%, Due 10/15/2030 | 50,000 | 46,032 | |||||||||||||
Simon Property Group LP, 3.375%, Due 10/1/2024 | 313,000 | 337,131 | |||||||||||||
|
| ||||||||||||||
939,326 | |||||||||||||||
|
| ||||||||||||||
Total Financial | 8,077,314 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
17
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 13.53% (continued) | |||||||||||||||
Industrial - 1.35% | |||||||||||||||
Aerospace/Defense - 0.33% | |||||||||||||||
Boeing Co., 2.750%, Due 2/1/2026 | $ | 75,000 | $ | 77,733 | |||||||||||
General Dynamics Corp., 3.500%, Due 5/15/2025 | 75,000 | 82,567 | |||||||||||||
Northrop Grumman Corp., 3.850%, Due 4/15/2045 | 55,000 | 60,810 | |||||||||||||
Raytheon Technologies Corp., 6.125%, Due 7/15/2038 | 282,000 | 390,739 | |||||||||||||
|
| ||||||||||||||
611,849 | |||||||||||||||
|
| ||||||||||||||
Building Materials - 0.09% | |||||||||||||||
Carrier Global Corp., 2.242%, Due 2/15/2025 | 50,000 | 52,135 | |||||||||||||
Vulcan Materials Co., 3.500%, Due 6/1/2030 | 95,000 | 103,335 | |||||||||||||
|
| ||||||||||||||
155,470 | |||||||||||||||
|
| ||||||||||||||
Electrical Components & Equipment - 0.03% | |||||||||||||||
Emerson Electric Co., 1.800%, Due 10/15/2027 | 60,000 | 60,941 | |||||||||||||
|
| ||||||||||||||
Electronics - 0.03% | |||||||||||||||
Agilent Technologies, Inc., 2.100%, Due 6/4/2030 | 65,000 | 63,279 | |||||||||||||
|
| ||||||||||||||
Environmental Control - 0.04% | |||||||||||||||
Republic Services, Inc., 2.500%, Due 8/15/2024 | 65,000 | 68,613 | |||||||||||||
|
| ||||||||||||||
Machinery - Diversified - 0.28% | |||||||||||||||
John Deere Capital Corp., 2.450%, Due 1/9/2030 | 500,000 | 516,314 | |||||||||||||
|
| ||||||||||||||
Metal Fabricate/Hardware - 0.04% | |||||||||||||||
Precision Castparts Corp., 3.250%, Due 6/15/2025 | 60,000 | 65,078 | |||||||||||||
|
| ||||||||||||||
Miscellaneous Manufacturing - 0.08% | |||||||||||||||
General Electric Co., | |||||||||||||||
3.450%, Due 5/15/2024 | 65,000 | 70,091 | |||||||||||||
3.450%, Due 5/1/2027 | 65,000 | 70,987 | |||||||||||||
|
| ||||||||||||||
141,078 | |||||||||||||||
|
| ||||||||||||||
Transportation - 0.43% | |||||||||||||||
Burlington Northern Santa Fe LLC, | |||||||||||||||
3.250%, Due 6/15/2027 | 60,000 | 65,573 | |||||||||||||
5.750%, Due 5/1/2040 | 202,000 | 275,746 | |||||||||||||
CSX Corp., 5.500%, Due 4/15/2041 | 157,000 | 206,437 | |||||||||||||
FedEx Corp., 3.250%, Due 5/15/2041 | 55,000 | 54,554 | |||||||||||||
Norfolk Southern Corp., 2.900%, Due 6/15/2026 | 60,000 | 64,759 | |||||||||||||
Union Pacific Corp., 4.100%, Due 9/15/2067 | 55,000 | 60,490 | |||||||||||||
United Parcel Service, Inc., 3.400%, Due 3/15/2029 | 65,000 | 71,568 | |||||||||||||
|
| ||||||||||||||
799,127 | |||||||||||||||
|
| ||||||||||||||
Total Industrial | 2,481,749 | ||||||||||||||
|
| ||||||||||||||
Technology - 1.18% | |||||||||||||||
Computers - 0.97% | |||||||||||||||
Apple, Inc., 2.200%, Due 9/11/2029 | 300,000 | 305,609 | |||||||||||||
Dell International LLC / EMC Corp., 5.300%, Due 10/1/2029C | 65,000 | 76,921 | |||||||||||||
Hewlett Packard Enterprise Co., 6.350%, Due 10/15/2045 | 500,000 | 660,904 | |||||||||||||
HP, Inc., 4.050%, Due 9/15/2022 | 145,000 | 151,698 | |||||||||||||
International Business Machines Corp., 4.250%, Due 5/15/2049 | 500,000 | 585,766 | |||||||||||||
|
| ||||||||||||||
1,780,898 | |||||||||||||||
|
| ||||||||||||||
See accompanying notes
18
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 13.53% (continued) | |||||||||||||||
Technology - 1.18% (continued) | |||||||||||||||
Semiconductors - 0.12% | |||||||||||||||
Broadcom Corp. / Broadcom Cayman Finance Ltd., 3.125%, Due 1/15/2025 | $ | 55,000 | $ | 58,654 | |||||||||||
Lam Research Corp., | |||||||||||||||
3.750%, Due 3/15/2026 | 35,000 | 39,031 | |||||||||||||
1.900%, Due 6/15/2030 | 75,000 | 73,410 | |||||||||||||
QUALCOMM, Inc., 1.650%, Due 5/20/2032 | 59,000 | 55,042 | |||||||||||||
|
| ||||||||||||||
226,137 | |||||||||||||||
|
| ||||||||||||||
Software - 0.09% | |||||||||||||||
Fiserv, Inc., 3.200%, Due 7/1/2026 | 60,000 | 65,058 | |||||||||||||
Oracle Corp., 4.300%, Due 7/8/2034 | 92,000 | 104,186 | |||||||||||||
|
| ||||||||||||||
169,244 | |||||||||||||||
|
| ||||||||||||||
Total Technology | 2,176,279 | ||||||||||||||
|
| ||||||||||||||
Utilities - 1.26% | |||||||||||||||
Electric - 1.10% | |||||||||||||||
Appalachian Power Co., 4.500%, Due 3/1/2049, Series Y | 25,000 | 29,131 | |||||||||||||
Berkshire Hathaway Energy Co., 6.125%, Due 4/1/2036 | 277,000 | 379,221 | |||||||||||||
Consolidated Edison Co. of New York, Inc., | |||||||||||||||
4.625%, Due 12/1/2054 | 40,000 | 47,939 | |||||||||||||
5.500%, Due 12/1/2039, Series 09-C | 169,000 | 219,777 | |||||||||||||
Consumers Energy Co., 2.500%, Due 5/1/2060 | 80,000 | 68,126 | |||||||||||||
Dominion Energy, Inc., 3.375%, Due 4/1/2030, Series C | 55,000 | 59,209 | |||||||||||||
DTE Energy Co., 1.050%, Due 6/1/2025, Series F | 115,000 | 114,529 | |||||||||||||
Duke Energy Corp., 3.750%, Due 4/15/2024 | 45,000 | 48,678 | |||||||||||||
Duke Energy Progress LLC, 4.150%, Due 12/1/2044 | 100,000 | 114,868 | |||||||||||||
Entergy Arkansas LLC, 3.350%, Due 6/15/2052 | 55,000 | 56,597 | |||||||||||||
Entergy Corp., 2.800%, Due 6/15/2030 | 45,000 | 45,808 | |||||||||||||
Entergy Louisiana LLC, 4.000%, Due 3/15/2033 | 47,000 | 54,092 | |||||||||||||
Exelon Corp., 4.050%, Due 4/15/2030 | 60,000 | 67,386 | |||||||||||||
Florida Power & Light Co., 3.950%, Due 3/1/2048 | 50,000 | 57,982 | |||||||||||||
Kentucky Utilities Co., 3.300%, Due 6/1/2050 | 60,000 | 60,734 | |||||||||||||
National Rural Utilities Cooperative Finance Corp., | |||||||||||||||
2.950%, Due 2/7/2024 | 55,000 | 58,341 | |||||||||||||
4.300%, Due 3/15/2049 | 40,000 | 47,509 | |||||||||||||
Northern States Power Co., 2.600%, Due 6/1/2051 | 70,000 | 64,322 | |||||||||||||
Ohio Power Co., 2.600%, Due 4/1/2030, Series P | 60,000 | 61,741 | |||||||||||||
Southwestern Electric Power Co., 3.550%, Due 2/15/2022 | 289,000 | 293,690 | |||||||||||||
WEC Energy Group, Inc., 3.550%, Due 6/15/2025 | 66,000 | 71,999 | |||||||||||||
|
| ||||||||||||||
2,021,679 | |||||||||||||||
|
| ||||||||||||||
Gas - 0.16% | |||||||||||||||
National Fuel Gas Co., 3.950%, Due 9/15/2027 | 80,000 | 86,137 | |||||||||||||
NiSource, Inc., | |||||||||||||||
3.490%, Due 5/15/2027 | 45,000 | 49,086 | |||||||||||||
3.950%, Due 3/30/2048 | 55,000 | 59,745 | |||||||||||||
Southern California Gas Co., 2.550%, Due 2/1/2030 | 40,000 | 40,886 | |||||||||||||
Southwest Gas Corp., 2.200%, Due 6/15/2030 | 70,000 | 68,919 | |||||||||||||
|
| ||||||||||||||
304,773 | |||||||||||||||
|
| ||||||||||||||
Total Utilities | 2,326,452 | ||||||||||||||
|
| ||||||||||||||
Total Corporate Obligations (Cost $23,146,405) | 24,936,736 | ||||||||||||||
|
| ||||||||||||||
FOREIGN CORPORATE OBLIGATIONS - 2.29% | |||||||||||||||
Basic Materials - 0.05% | |||||||||||||||
Chemicals - 0.03% | |||||||||||||||
Nutrien Ltd., 4.000%, Due 12/15/2026 | 44,000 | 49,500 | |||||||||||||
|
| ||||||||||||||
See accompanying notes
19
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
FOREIGN CORPORATE OBLIGATIONS - 2.29% (continued) | |||||||||||||||
Basic Materials - 0.05% (continued) | |||||||||||||||
Mining - 0.02% | |||||||||||||||
Teck Resources Ltd., 6.000%, Due 8/15/2040 | $ | 30,000 | $ | 36,709 | |||||||||||
|
| ||||||||||||||
Total Basic Materials | 86,209 | ||||||||||||||
|
| ||||||||||||||
Communications - 0.66% | |||||||||||||||
Internet - 0.18% | |||||||||||||||
Alibaba Group Holding Ltd., 3.600%, Due 11/28/2024 | 313,000 | 339,510 | |||||||||||||
|
| ||||||||||||||
Media - 0.20% | |||||||||||||||
Thomson Reuters Corp., | |||||||||||||||
4.300%, Due 11/23/2023 | 145,000 | 157,051 | |||||||||||||
3.850%, Due 9/29/2024 | 193,000 | 209,659 | |||||||||||||
|
| ||||||||||||||
366,710 | |||||||||||||||
|
| ||||||||||||||
Telecommunications - 0.28% | |||||||||||||||
America Movil S.A.B. de C.V., 6.375%, Due 3/1/2035 | 169,000 | 236,613 | |||||||||||||
Bell Canada, Inc., 4.464%, Due 4/1/2048 | 25,000 | 29,348 | |||||||||||||
Deutsche Telekom International Finance B.V., 4.875%, Due 3/6/2042C | 150,000 | 182,345 | |||||||||||||
Rogers Communications, Inc., 3.625%, Due 12/15/2025 | 60,000 | 66,004 | |||||||||||||
|
| ||||||||||||||
514,310 | |||||||||||||||
|
| ||||||||||||||
Total Communications | 1,220,530 | ||||||||||||||
|
| ||||||||||||||
Consumer, Non-Cyclical - 0.55% | |||||||||||||||
Agriculture - 0.10% | |||||||||||||||
BAT Capital Corp., 2.259%, Due 3/25/2028 | 105,000 | 102,907 | |||||||||||||
Reynolds American, Inc., 5.700%, Due 8/15/2035 | 65,000 | 75,974 | |||||||||||||
|
| ||||||||||||||
178,881 | |||||||||||||||
|
| ||||||||||||||
Beverages - 0.43% | |||||||||||||||
Anheuser-Busch Companies LLC / Anheuser-Busch InBev Worldwide, Inc., 4.900%, Due 2/1/2046 | 35,000 | 41,769 | |||||||||||||
Anheuser-Busch InBev Worldwide, Inc., | |||||||||||||||
5.450%, Due 1/23/2039 | 500,000 | 630,928 | |||||||||||||
5.550%, Due 1/23/2049 | 35,000 | 45,201 | |||||||||||||
Coca-Cola Femsa S.A.B. de C.V., 2.750%, Due 1/22/2030 | 70,000 | 71,536 | |||||||||||||
|
| ||||||||||||||
789,434 | |||||||||||||||
|
| ||||||||||||||
Commercial Services - 0.02% | |||||||||||||||
RELX Capital, Inc., 3.500%, Due 3/16/2023 | 40,000 | 42,071 | |||||||||||||
|
| ||||||||||||||
Total Consumer, Non-Cyclical | 1,010,386 | ||||||||||||||
|
| ||||||||||||||
Energy - 0.60% | |||||||||||||||
Oil & Gas - 0.46% | |||||||||||||||
Canadian Natural Resources Ltd., 6.250%, Due 3/15/2038 | 176,000 | 229,807 | |||||||||||||
Saudi Arabian Oil Co., 4.375%, Due 4/16/2049C | 500,000 | 549,350 | |||||||||||||
Total Capital International S.A., 3.127%, Due 5/29/2050 | 70,000 | 67,101 | |||||||||||||
|
| ||||||||||||||
846,258 | |||||||||||||||
|
| ||||||||||||||
Pipelines - 0.14% | |||||||||||||||
TransCanada PipeLines Ltd., | |||||||||||||||
3.750%, Due 10/16/2023 | 145,000 | 154,841 | |||||||||||||
6.100%, Due 6/1/2040 | 82,000 | 107,928 | |||||||||||||
|
| ||||||||||||||
262,769 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 1,109,027 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
20
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
FOREIGN CORPORATE OBLIGATIONS - 2.29% (continued) | |||||||||||||||
Financial - 0.24% | |||||||||||||||
Banks - 0.24% | |||||||||||||||
Bank of Montreal, 3.300%, Due 2/5/2024, Series E | $ | 75,000 | $ | 80,662 | |||||||||||
Mitsubishi UFJ Financial Group, Inc., 2.193%, Due 2/25/2025 | 75,000 | 77,865 | |||||||||||||
Royal Bank of Canada, 2.250%, Due 11/1/2024 | 115,000 | 120,706 | |||||||||||||
Toronto-Dominion Bank, 3.250%, Due 3/11/2024 | 160,000 | 172,086 | |||||||||||||
|
| ||||||||||||||
451,319 | |||||||||||||||
|
| ||||||||||||||
Total Financial | 451,319 | ||||||||||||||
|
| ||||||||||||||
Industrial - 0.19% | |||||||||||||||
Aerospace/Defense - 0.19% | |||||||||||||||
BAE Systems Holdings, Inc., 3.800%, Due 10/7/2024C | 313,000 | 342,080 | |||||||||||||
|
| ||||||||||||||
Total Foreign Corporate Obligations (Cost $3,716,426) | 4,219,551 | ||||||||||||||
|
| ||||||||||||||
FOREIGN SOVEREIGN OBLIGATIONS - 0.04% (Cost $70,123) | |||||||||||||||
Mexico Government International Bond, 4.600%, Due 1/23/2046 | 65,000 | 67,005 | |||||||||||||
|
| ||||||||||||||
ASSET-BACKED OBLIGATIONS - 0.56% | |||||||||||||||
AmeriCredit Automobile Receivables Trust, 0.370%, Due 8/18/2025, 2021 1 A3 | 85,000 | 85,021 | |||||||||||||
CNH Equipment Trust, | |||||||||||||||
1.160%, Due 6/16/2025, 2020 A A3 | 105,000 | 105,960 | |||||||||||||
0.400%, Due 12/15/2025, 2021 A A3 | 95,000 | 94,804 | |||||||||||||
GM Financial Consumer Automobile Receivables Trust, | |||||||||||||||
1.840%, Due 9/16/2024, 2020 1 A3 | 130,000 | 131,857 | |||||||||||||
1.490%, Due 12/16/2024, 2020 2 A3 | 45,000 | 45,638 | |||||||||||||
PSNH Funding LLC, 3.094%, Due 2/1/2026, 2018 1 A1 | 65,443 | 67,962 | |||||||||||||
Toyota Auto Loan Extended Note Trust, 1.350%, Due 5/25/2033, 2020 1A AC | 135,000 | 137,488 | |||||||||||||
Toyota Auto Receivables Owner Trust, 1.360%, Due 8/15/2024, 2020 B A3 | 145,000 | 147,000 | |||||||||||||
Verizon Owner Trust, 1.850%, Due 7/22/2024, 2020 A A1A | 210,000 | 214,091 | |||||||||||||
|
| ||||||||||||||
Total Asset-Backed Obligations (Cost $1,016,209) | 1,029,821 | ||||||||||||||
|
| ||||||||||||||
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.01% (Cost $12,990) | |||||||||||||||
Freddie Mac REMIC Trust, 3.000%, Due 1/15/2047, 4881 PB | 12,988 | 13,105 | |||||||||||||
|
| ||||||||||||||
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 0.22% | |||||||||||||||
Cold Storage Trust, 1.015%, Due 11/15/2037, 2020-ICE5 A, (1-mo. USD LIBOR + 0.900%)C D | 113,044 | 113,549 | |||||||||||||
Ginnie Mae REMIC Trust, | |||||||||||||||
1.368%, Due 11/16/2041, 2013-125 AB | 144,165 | 144,433 | |||||||||||||
1.624%, Due 7/16/2039, 2013-78 AB | 38,985 | 39,023 | |||||||||||||
JPMBB Commercial Mortgage Securities Trust, 3.157%, Due 7/15/2045, 2013 C12 ASB | 98,380 | 99,789 | |||||||||||||
|
| ||||||||||||||
Total Commercial Mortgage-Backed Obligations (Cost $394,853) | 396,794 | ||||||||||||||
|
| ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 6.66% | |||||||||||||||
Federal Home Loan Mortgage Corp., | |||||||||||||||
3.500%, Due 9/1/2028 | 24,896 | 26,967 | |||||||||||||
3.000%, Due 11/1/2032 | 80,583 | 85,768 | |||||||||||||
5.000%, Due 8/1/2033 | 27,601 | 31,806 | |||||||||||||
5.500%, Due 2/1/2034 | 26,578 | 30,860 | |||||||||||||
2.500%, Due 6/1/2035 | 115,810 | 120,971 | |||||||||||||
2.000%, Due 11/1/2035 | 110,723 | 114,397 | |||||||||||||
1.500%, Due 3/1/2036 | 162,813 | 164,843 | |||||||||||||
2.000%, Due 3/1/2036 | 287,719 | 297,251 | |||||||||||||
2.000%, Due 10/1/2040 | 106,488 | 108,723 | |||||||||||||
2.000%, Due 1/1/2041 | 239,595 | 244,623 | |||||||||||||
4.000%, Due 1/1/2041 | 81,863 | 90,225 | |||||||||||||
4.500%, Due 2/1/2041 | 57,561 | 64,654 |
See accompanying notes
21
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 6.66% (continued) | |||||||||||||||
3.500%, Due 6/1/2042 | $ | 248,585 | $ | 270,810 | |||||||||||
3.000%, Due 4/1/2047 | 231,112 | 246,698 | |||||||||||||
3.500%, Due 1/1/2048 | 275,516 | 296,788 | |||||||||||||
4.000%, Due 4/1/2048 | 133,138 | 144,237 | |||||||||||||
3.000%, Due 8/1/2048 | 179,704 | 190,803 | |||||||||||||
3.000%, Due 11/1/2049 | 365,013 | 384,411 | |||||||||||||
2.500%, Due 6/1/2050 | 158,021 | 164,063 | |||||||||||||
|
| ||||||||||||||
3,078,898 | |||||||||||||||
|
| ||||||||||||||
Federal National Mortgage Association, | |||||||||||||||
3.500%, Due 1/1/2028E | 24,388 | 26,388 | |||||||||||||
5.000%, Due 3/1/2034E | 29,663 | 33,502 | |||||||||||||
4.500%, Due 4/1/2034 | 50,354 | 55,681 | |||||||||||||
3.000%, Due 10/1/2034 | 8,985 | 9,516 | |||||||||||||
2.000%, Due 11/1/2035E | 228,432 | 237,136 | |||||||||||||
2.000%, Due 12/1/2035E | 86,256 | 89,267 | |||||||||||||
2.000%, Due 1/1/2036E | 156,236 | 161,415 | |||||||||||||
2.000%, Due 5/1/2036 | 75,000 | 77,498 | |||||||||||||
3.500%, Due 6/1/2037 | 157,993 | 172,091 | |||||||||||||
5.500%, Due 6/1/2038 | 5,882 | 6,863 | |||||||||||||
4.500%, Due 1/1/2040 | 57,942 | 64,551 | |||||||||||||
5.000%, Due 5/1/2040 | 98,305 | 113,116 | |||||||||||||
5.000%, Due 6/1/2040 | 75,293 | 85,962 | |||||||||||||
4.000%, Due 9/1/2040 | 51,703 | 56,779 | |||||||||||||
4.000%, Due 1/1/2041 | 110,780 | 122,036 | |||||||||||||
3.000%, Due 6/1/2043 | 456,751 | 487,781 | |||||||||||||
3.500%, Due 7/1/2043 | 96,883 | 105,834 | |||||||||||||
3.000%, Due 8/1/2043 | 415,470 | 442,281 | |||||||||||||
4.000%, Due 11/1/2044E | 66,199 | 72,977 | |||||||||||||
4.000%, Due 7/1/2045 | 275,037 | 303,729 | |||||||||||||
3.500%, Due 8/1/2045 | 58,456 | 63,195 | |||||||||||||
3.500%, Due 11/1/2045 | 536,052 | 577,596 | |||||||||||||
3.500%, Due 5/1/2046 | 72,942 | 78,402 | |||||||||||||
4.000%, Due 7/1/2046 | 108,045 | 119,165 | |||||||||||||
3.000%, Due 10/1/2046 | 37,485 | 39,627 | |||||||||||||
3.000%, Due 11/1/2046 | 206,299 | 218,922 | |||||||||||||
3.000%, Due 12/1/2046E | 137,349 | 145,853 | |||||||||||||
3.000%, Due 3/1/2047E | 78,661 | 83,321 | |||||||||||||
3.500%, Due 3/1/2047 | 53,589 | 57,896 | |||||||||||||
4.500%, Due 7/1/2047 | 41,460 | 45,462 | |||||||||||||
4.500%, Due 8/1/2047 | 58,358 | 64,092 | |||||||||||||
3.500%, Due 9/1/2047 | 67,518 | 73,069 | |||||||||||||
4.000%, Due 3/1/2048 | 96,278 | 103,674 | |||||||||||||
4.500%, Due 4/1/2048 | 35,586 | 38,728 | |||||||||||||
4.500%, Due 7/1/2048E | 73,064 | 80,012 | |||||||||||||
4.500%, Due 7/1/2048 | 108,549 | 118,503 | |||||||||||||
3.000%, Due 9/1/2049 | 113,386 | 119,794 | |||||||||||||
4.000%, Due 10/1/2049E | 134,884 | 145,010 | |||||||||||||
4.500%, Due 10/1/2049 | 232,266 | 253,376 | |||||||||||||
4.000%, Due 11/1/2049 | 319,475 | 347,434 | |||||||||||||
2.500%, Due 6/1/2050 | 72,992 | 75,782 | |||||||||||||
2.500%, Due 7/1/2050 | 336,554 | 349,368 | |||||||||||||
2.500%, Due 8/1/2050 | 243,516 | 252,827 | |||||||||||||
3.000%, Due 8/1/2050 | 141,632 | 150,659 | |||||||||||||
2.500%, Due 9/1/2050 | 161,110 | 167,666 | |||||||||||||
2.500%, Due 10/1/2050E | 86,972 | 90,320 | |||||||||||||
3.000%, Due 10/1/2050E | 355,090 | 376,339 | |||||||||||||
2.000%, Due 3/1/2051E | 521,871 | 528,783 | |||||||||||||
2.000%, Due 4/1/2051E | 300,000 | 304,816 | |||||||||||||
|
| ||||||||||||||
7,794,094 | |||||||||||||||
|
| ||||||||||||||
See accompanying notes
22
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 6.66% (continued) | |||||||||||||||
Government National Mortgage Association, | |||||||||||||||
6.500%, Due 8/15/2027 | $ | 20,131 | $ | 22,521 | |||||||||||
6.500%, Due 11/15/2027 | 24,496 | 27,404 | |||||||||||||
7.500%, Due 12/15/2028 | 22,011 | 25,174 | |||||||||||||
5.500%, Due 7/15/2033 | 28,372 | 32,930 | |||||||||||||
6.000%, Due 12/15/2033 | 37,701 | 44,935 | |||||||||||||
5.500%, Due 2/20/2034 | 38,630 | 45,233 | |||||||||||||
5.000%, Due 10/15/2039 | 64,089 | 74,623 | |||||||||||||
3.500%, Due 9/15/2041 | 143,155 | 154,794 | |||||||||||||
3.500%, Due 8/20/2047 | 34,358 | 36,766 | |||||||||||||
3.500%, Due 10/20/2047 | 32,257 | 34,625 | |||||||||||||
4.000%, Due 1/20/2048 | 170,964 | 184,621 | |||||||||||||
4.000%, Due 1/20/2050 | 216,300 | 231,763 | |||||||||||||
5.000%, Due 1/20/2050 | 101,893 | 111,524 | |||||||||||||
4.500%, Due 2/20/2050 | 97,403 | 105,589 | |||||||||||||
5.000%, Due 2/20/2050 | 50,654 | 55,644 | |||||||||||||
2.500%, Due 9/20/2050 | 212,743 | 221,142 | |||||||||||||
|
| ||||||||||||||
1,409,288 | |||||||||||||||
|
| ||||||||||||||
Total U.S. Agency Mortgage-Backed Obligations (Cost $11,878,474) | 12,282,280 | ||||||||||||||
|
| ||||||||||||||
U.S. TREASURY OBLIGATIONS - 11.69% | |||||||||||||||
U.S. Treasury Notes/Bonds, | |||||||||||||||
2.000%, Due 2/15/2022 | 664,000 | 674,167 | |||||||||||||
1.750%, Due 9/30/2022 | 500,000 | 511,563 | |||||||||||||
1.625%, Due 11/15/2022 | 964,000 | 986,104 | |||||||||||||
2.000%, Due 2/15/2023 | 500,000 | 516,484 | |||||||||||||
2.750%, Due 7/31/2023 | 500,000 | 528,457 | |||||||||||||
2.500%, Due 8/15/2023 | 964,000 | 1,014,045 | |||||||||||||
2.375%, Due 8/15/2024 | 2,222,000 | 2,364,347 | |||||||||||||
1.250%, Due 8/31/2024 | 1,275,000 | 1,309,564 | |||||||||||||
1.750%, Due 12/31/2024 | 700,000 | 731,254 | |||||||||||||
1.125%, Due 2/28/2025 | 1,550,000 | 1,582,998 | |||||||||||||
2.875%, Due 7/31/2025 | 500,000 | 546,133 | |||||||||||||
6.875%, Due 8/15/2025 | 279,000 | 352,216 | |||||||||||||
1.625%, Due 10/31/2026 | 500,000 | 517,070 | |||||||||||||
2.000%, Due 11/15/2026 | 500,000 | 527,012 | |||||||||||||
1.750%, Due 12/31/2026 | 650,000 | 676,203 | |||||||||||||
1.500%, Due 1/31/2027 | 590,000 | 605,050 | |||||||||||||
2.875%, Due 5/15/2028 | 200,000 | 221,070 | |||||||||||||
2.875%, Due 8/15/2028 | 100,000 | 110,613 | |||||||||||||
5.250%, Due 11/15/2028 | 217,000 | 277,548 | |||||||||||||
2.625%, Due 2/15/2029 | 450,000 | 490,008 | |||||||||||||
2.375%, Due 5/15/2029 | 450,000 | 481,535 | |||||||||||||
1.625%, Due 8/15/2029 | 350,000 | 354,020 | |||||||||||||
1.750%, Due 11/15/2029 | 1,700,000 | 1,734,332 | |||||||||||||
1.500%, Due 2/15/2030 | 2,025,000 | 2,017,644 | |||||||||||||
4.750%, Due 2/15/2037 | 304,000 | 420,743 | |||||||||||||
4.500%, Due 8/15/2039 | 241,000 | 331,253 | |||||||||||||
2.750%, Due 8/15/2042 | 250,000 | 273,711 | |||||||||||||
2.875%, Due 5/15/2049 | 500,000 | 560,781 | |||||||||||||
1.375%, Due 8/15/2050 | 1,030,000 | 824,483 | |||||||||||||
|
| ||||||||||||||
21,540,408 | |||||||||||||||
|
| ||||||||||||||
Total U.S. Treasury Obligations (Cost $21,139,910) | 21,540,408 | ||||||||||||||
|
|
See accompanying notes
23
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
SHORT-TERM INVESTMENTS - 3.27% (Cost $6,036,663) | |||||||||||||||
Investment Companies - 3.27% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%F G | 6,036,663 | $ | 6,036,663 | ||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 0.46% (Cost $854,874) | |||||||||||||||
Investment Companies - 0.46% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%F G | 854,874 | 854,874 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 100.14% (Cost $145,886,482) | 184,577,192 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (0.14%) | (255,989 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 184,321,203 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at April 30, 2021 (Note 9).
C Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $1,847,526 or 1.00% of net assets. The Fund has no right to demand registration of these securities.
D Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on April 30, 2021.
E Coupon rate may change based on changes of the underlying collateral or prepayments of principal. The coupon rate shown represents the rate at period end.
F The Fund is affiliated by having the same investment advisor.
G 7-day yield.
ADR - American Depositary Receipt.
DAC - Designated Activity Company.
LIBOR - London Interbank Offered Rate.
LLC - Limited Liability Company.
LP - Limited Partnership.
PLC - Public Limited Company.
PRIME - A rate, charged by banks, based on the U.S. Federal Funds rate.
REMIC - Real Estate Mortgage Investment Conduit.
SOFR - Secured Overnight Financing Rate.
Long Futures Contracts Open on April 30, 2021: |
| |||||||||||||||
Equity Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
S&P 500 E-Mini Index Futures | 26 | June 2021 | $ | 5,313,253 | $ | 5,426,720 | $ | 113,467 | ||||||||
|
|
|
|
|
| |||||||||||
$ | 5,313,253 | $ | 5,426,720 | $ | 113,467 | |||||||||||
|
|
|
|
|
|
Index Abbreviations: | ||
S&P 500 | S&P 500 Index - U.S. Equity Large-Cap Index. |
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2021, the investments were classified as described below:
Balanced Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 113,199,955 | $ | - | $ | - | $ | 113,199,955 | ||||||||||||||||||||
Corporate Obligations | - | 24,936,736 | - | 24,936,736 | ||||||||||||||||||||||||
Foreign Corporate Obligations | - | 4,219,551 | - | 4,219,551 | ||||||||||||||||||||||||
Foreign Sovereign Obligations | - | 67,005 | - | 67,005 |
See accompanying notes
24
American Beacon Balanced FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Balanced Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets (continued) | ||||||||||||||||||||||||||||
Asset-Backed Obligations | - | 1,029,821 | - | 1,029,821 | ||||||||||||||||||||||||
Collateralized Mortgage Obligations | - | 13,105 | - | 13,105 | ||||||||||||||||||||||||
Commercial Mortgage-Backed Obligations | - | 396,794 | - | 396,794 | ||||||||||||||||||||||||
U.S. Agency Mortgage-Backed Obligations | - | 12,282,280 | - | 12,282,280 | ||||||||||||||||||||||||
U.S. Treasury Obligations | - | 21,540,408 | - | 21,540,408 | ||||||||||||||||||||||||
Short-Term Investments | 6,036,663 | - | - | 6,036,663 | ||||||||||||||||||||||||
Securities Lending Collateral | 854,874 | - | - | 854,874 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 120,091,492 | $ | 64,485,700 | $ | - | $ | 184,577,192 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||||||
Futures Contracts | $ | 113,467 | $ | - | $ | - | $ | 113,467 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 113,467 | $ | - | $ | - | $ | 113,467 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the period ended April 30, 2021, there were no transfers into or out of Level 3.
See accompanying notes
25
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.34% | |||||||||||||||
Communication Services - 1.74% | |||||||||||||||
Media - 1.74% | |||||||||||||||
Altice USA, Inc., Class AA | 57,639 | $ | 2,092,872 | ||||||||||||
Liberty Broadband Corp., Class CA | 10,600 | 1,724,832 | |||||||||||||
|
| ||||||||||||||
3,817,704 | |||||||||||||||
|
| ||||||||||||||
Total Communication Services | 3,817,704 | ||||||||||||||
|
| ||||||||||||||
Consumer Discretionary - 15.91% | |||||||||||||||
Auto Components - 1.91% | |||||||||||||||
Dana, Inc. | 82,387 | 2,084,391 | |||||||||||||
Lear Corp. | 11,461 | 2,106,990 | |||||||||||||
|
| ||||||||||||||
4,191,381 | |||||||||||||||
|
| ||||||||||||||
Automobiles - 0.69% | |||||||||||||||
Ford Motor Co.A | 132,261 | 1,526,292 | |||||||||||||
|
| ||||||||||||||
Diversified Consumer Services - 0.73% | |||||||||||||||
Adtalem Global Education, Inc.A | 46,936 | 1,610,374 | |||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 5.17% | |||||||||||||||
Aramark | 41,977 | 1,631,646 | |||||||||||||
Marriott Vacations Worldwide Corp.A | 14,108 | 2,506,004 | |||||||||||||
MGM Resorts International | 36,566 | 1,488,968 | |||||||||||||
SeaWorld Entertainment, Inc.A | 41,246 | 2,258,631 | |||||||||||||
Travel + Leisure Co. | 31,846 | 2,055,022 | |||||||||||||
Wyndham Hotels & Resorts, Inc. | 19,602 | 1,433,102 | |||||||||||||
|
| ||||||||||||||
11,373,373 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 2.14% | |||||||||||||||
Lennar Corp., Class A | 10,643 | 1,102,615 | |||||||||||||
Mohawk Industries, Inc.A | 7,291 | 1,498,301 | |||||||||||||
Newell Brands, Inc. | 77,746 | 2,096,032 | |||||||||||||
|
| ||||||||||||||
4,696,948 | |||||||||||||||
|
| ||||||||||||||
Internet & Direct Marketing Retail - 0.79% | |||||||||||||||
Qurate Retail, Inc., Series A | 145,820 | 1,735,258 | |||||||||||||
|
| ||||||||||||||
Specialty Retail - 1.30% | |||||||||||||||
Advance Auto Parts, Inc. | 8,437 | 1,688,750 | |||||||||||||
Gap, Inc. | 35,501 | 1,175,083 | |||||||||||||
|
| ||||||||||||||
2,863,833 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 3.18% | |||||||||||||||
Gildan Activewear, Inc. | 79,830 | 2,769,303 | |||||||||||||
PVH Corp. | 13,458 | 1,523,176 | |||||||||||||
Ralph Lauren Corp. | 8,262 | 1,101,242 | |||||||||||||
Skechers USA, Inc., Class AA | 33,010 | 1,600,655 | |||||||||||||
|
| ||||||||||||||
6,994,376 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 34,991,835 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 1.47% | |||||||||||||||
Beverages - 0.67% | |||||||||||||||
Coca-Cola European Partners PLC | 25,710 | 1,460,842 | |||||||||||||
|
| ||||||||||||||
Food & Staples Retailing - 0.80% | |||||||||||||||
US Foods Holding Corp.A | 42,488 | 1,761,553 | |||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 3,222,395 | ||||||||||||||
|
|
See accompanying notes
26
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.34% (continued) | |||||||||||||||
Energy - 5.77% | |||||||||||||||
Energy Equipment & Services - 2.57% | |||||||||||||||
Baker Hughes Co. | 81,387 | $ | 1,634,251 | ||||||||||||
Halliburton Co. | 104,301 | 2,040,128 | |||||||||||||
NOV, Inc. | 91,557 | 1,368,777 | |||||||||||||
Technip Energies N.V., ADRA | 2,378 | 33,791 | |||||||||||||
TechnipFMC PLC | 76,588 | 566,751 | |||||||||||||
|
| ||||||||||||||
5,643,698 | |||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 3.20% | |||||||||||||||
APA Corp. | 64,042 | 1,280,840 | |||||||||||||
Cenovus Energy, Inc. | 88,613 | 688,523 | |||||||||||||
Cheniere Energy, Inc.A | 15,282 | 1,184,661 | |||||||||||||
EQT Corp.A | 31,269 | 597,238 | |||||||||||||
Hess Corp. | 17,338 | 1,291,854 | |||||||||||||
HollyFrontier Corp. | 23,389 | 818,615 | |||||||||||||
Pioneer Natural Resources Co. | 7,684 | 1,182,030 | |||||||||||||
|
| ||||||||||||||
7,043,761 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 12,687,459 | ||||||||||||||
|
| ||||||||||||||
Financials - 25.69% | |||||||||||||||
Banks - 4.42% | |||||||||||||||
Fifth Third Bancorp | 57,321 | 2,323,793 | |||||||||||||
KeyCorp | 96,907 | 2,108,696 | |||||||||||||
Pinnacle Financial Partners, Inc. | 10,710 | 938,625 | |||||||||||||
Regions Financial Corp. | 99,159 | 2,161,666 | |||||||||||||
Signature Bank | 8,657 | 2,177,322 | |||||||||||||
|
| ||||||||||||||
9,710,102 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 2.47% | |||||||||||||||
Evercore, Inc., Class A | 5,176 | 725,313 | |||||||||||||
Invesco Ltd. | 59,153 | 1,597,131 | |||||||||||||
Jefferies Financial Group, Inc. | 65,027 | 2,114,028 | |||||||||||||
Northern Trust Corp. | 8,818 | 1,003,488 | |||||||||||||
|
| ||||||||||||||
5,439,960 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 6.13% | |||||||||||||||
Ally Financial, Inc. | 57,583 | 2,962,646 | |||||||||||||
Discover Financial Services | 20,287 | 2,312,718 | |||||||||||||
Navient Corp. | 50,928 | 857,118 | |||||||||||||
OneMain Holdings, Inc. | 25,674 | 1,373,559 | |||||||||||||
PROG Holdings, Inc. | 71,048 | 3,619,185 | |||||||||||||
SLM Corp. | 119,514 | 2,349,645 | |||||||||||||
|
| ||||||||||||||
13,474,871 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 2.27% | |||||||||||||||
Equitable Holdings, Inc. | 82,290 | 2,816,787 | |||||||||||||
Voya Financial, Inc. | 32,139 | 2,179,667 | |||||||||||||
|
| ||||||||||||||
4,996,454 | |||||||||||||||
|
| ||||||||||||||
Insurance - 10.40% | |||||||||||||||
American Financial Group, Inc. | 8,829 | 1,084,731 | |||||||||||||
American International Group, Inc. | 71,261 | 3,452,596 | |||||||||||||
Arch Capital Group Ltd.A | 38,185 | 1,516,326 | |||||||||||||
Assurant, Inc. | 9,262 | 1,441,167 | |||||||||||||
Axis Capital Holdings Ltd. | 98,479 | 5,495,128 | |||||||||||||
CNO Financial Group, Inc. | 94,508 | 2,412,789 |
See accompanying notes
27
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.34% (continued) | |||||||||||||||
Financials - 25.69% (continued) | |||||||||||||||
Insurance - 10.40% (continued) | |||||||||||||||
Fidelity National Financial, Inc. | 71,237 | $ | 3,249,832 | ||||||||||||
Markel Corp.A | 918 | 1,079,954 | |||||||||||||
Reinsurance Group of America, Inc. | 12,989 | 1,695,454 | |||||||||||||
Willis Towers Watson PLC | 5,604 | 1,450,651 | |||||||||||||
|
| ||||||||||||||
22,878,628 | |||||||||||||||
|
| ||||||||||||||
Total Financials | 56,500,015 | ||||||||||||||
|
| ||||||||||||||
Health Care - 5.64% | |||||||||||||||
Health Care Equipment & Supplies - 2.63% | |||||||||||||||
Envista Holdings Corp.A | 35,846 | 1,551,415 | |||||||||||||
Hologic, Inc.A | 10,485 | 687,292 | |||||||||||||
LivaNova PLCA | 19,709 | 1,672,703 | |||||||||||||
Zimmer Biomet Holdings, Inc. | 10,598 | 1,877,541 | |||||||||||||
|
| ||||||||||||||
5,788,951 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 3.01% | |||||||||||||||
Cardinal Health, Inc. | 22,158 | 1,337,014 | |||||||||||||
Encompass Health Corp. | 14,923 | 1,266,366 | |||||||||||||
McKesson Corp. | 8,669 | 1,625,957 | |||||||||||||
Universal Health Services, Inc., Class B | 16,087 | 2,387,472 | |||||||||||||
|
| ||||||||||||||
6,616,809 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 12,405,760 | ||||||||||||||
|
| ||||||||||||||
Industrials - 17.38% | |||||||||||||||
Aerospace & Defense - 2.82% | |||||||||||||||
BWX Technologies, Inc. | 15,254 | 1,020,798 | |||||||||||||
L3Harris Technologies, Inc. | 7,999 | 1,673,631 | |||||||||||||
Textron, Inc. | 31,223 | 2,005,765 | |||||||||||||
TransDigm Group, Inc.A | 2,431 | 1,492,002 | |||||||||||||
|
| ||||||||||||||
6,192,196 | |||||||||||||||
|
| ||||||||||||||
Airlines - 0.29% | |||||||||||||||
Alaska Air Group, Inc.A | 9,262 | 640,375 | |||||||||||||
|
| ||||||||||||||
Building Products - 1.40% | |||||||||||||||
JELD-WEN Holding, Inc.A | 56,826 | 1,657,614 | |||||||||||||
Owens Corning | 14,690 | 1,422,139 | |||||||||||||
|
| ||||||||||||||
3,079,753 | |||||||||||||||
|
| ||||||||||||||
Commercial Services & Supplies - 1.22% | |||||||||||||||
Republic Services, Inc. | 25,179 | 2,676,528 | |||||||||||||
|
| ||||||||||||||
Construction & Engineering - 2.68% | |||||||||||||||
AECOMA | 34,177 | 2,270,378 | |||||||||||||
MasTec, Inc.A | 15,762 | 1,644,922 | |||||||||||||
Quanta Services, Inc. | 20,550 | 1,985,952 | |||||||||||||
|
| ||||||||||||||
5,901,252 | |||||||||||||||
|
| ||||||||||||||
Electrical Equipment - 0.67% | |||||||||||||||
Vertiv Holdings Co. | 64,510 | 1,464,377 | |||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 0.82% | |||||||||||||||
Carlisle Cos., Inc. | 9,433 | 1,807,834 | |||||||||||||
|
| ||||||||||||||
See accompanying notes
28
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.34% (continued) | |||||||||||||||
Industrials - 17.38% (continued) | |||||||||||||||
Machinery - 4.03% | |||||||||||||||
Dover Corp. | 14,582 | $ | 2,175,488 | ||||||||||||
Stanley Black & Decker, Inc. | 8,475 | 1,752,376 | |||||||||||||
Terex Corp. | 45,938 | 2,158,627 | |||||||||||||
Westinghouse Air Brake Technologies Corp. | 33,927 | 2,784,389 | |||||||||||||
|
| ||||||||||||||
8,870,880 | |||||||||||||||
|
| ||||||||||||||
Professional Services - 0.43% | |||||||||||||||
Jacobs Engineering Group, Inc. | 7,127 | 952,238 | |||||||||||||
|
| ||||||||||||||
Road & Rail - 1.79% | |||||||||||||||
JB Hunt Transport Services, Inc. | 10,021 | 1,710,685 | |||||||||||||
Ryder System, Inc. | 27,877 | 2,225,700 | |||||||||||||
|
| ||||||||||||||
3,936,385 | |||||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 1.23% | �� | ||||||||||||||
AerCap Holdings N.V.A | 46,372 | 2,701,169 | |||||||||||||
|
| ||||||||||||||
Total Industrials | 38,222,987 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 3.00% | |||||||||||||||
Electronic Equipment, Instruments & Components - 1.20% | |||||||||||||||
Avnet, Inc. | 59,920 | 2,631,687 | |||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 1.15% | |||||||||||||||
Marvell Technology, Inc. | 15,580 | 704,372 | |||||||||||||
Microchip Technology, Inc. | 12,084 | 1,816,104 | |||||||||||||
|
| ||||||||||||||
2,520,476 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 0.65% | |||||||||||||||
Hewlett Packard Enterprise Co. | 89,655 | 1,436,273 | |||||||||||||
|
| ||||||||||||||
Total Information Technology | 6,588,436 | ||||||||||||||
|
| ||||||||||||||
Materials - 7.71% | |||||||||||||||
Chemicals - 6.94% | |||||||||||||||
Ashland Global Holdings, Inc. | 19,423 | 1,674,457 | |||||||||||||
Atotech Ltd.A | 68,901 | 1,486,195 | |||||||||||||
Axalta Coating Systems Ltd.A | 37,396 | 1,192,558 | |||||||||||||
Corteva, Inc. | 28,611 | 1,395,072 | |||||||||||||
Dow, Inc. | 20,884 | 1,305,250 | |||||||||||||
Eastman Chemical Co. | 11,548 | 1,332,524 | |||||||||||||
Element Solutions, Inc. | 99,490 | 2,176,841 | |||||||||||||
International Flavors & Fragrances, Inc. | 13,809 | 1,963,226 | |||||||||||||
Olin Corp. | 63,757 | 2,743,464 | |||||||||||||
|
| ||||||||||||||
15,269,587 | |||||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.77% | |||||||||||||||
Sealed Air Corp. | 34,318 | 1,695,309 | |||||||||||||
|
| ||||||||||||||
Total Materials | 16,964,896 | ||||||||||||||
|
| ||||||||||||||
Real Estate - 5.40% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 4.90% | |||||||||||||||
American Campus Communities, Inc. | 30,535 | 1,380,487 | |||||||||||||
AvalonBay Communities, Inc. | 5,465 | 1,049,280 | |||||||||||||
EPR Properties | 15,358 | 732,730 |
See accompanying notes
29
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 95.34% (continued) | |||||||||||||||
Real Estate - 5.40% (continued) | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 4.90% (continued) | |||||||||||||||
Lamar Advertising Co., Class A | 12,926 | $ | 1,280,191 | ||||||||||||
MGM Growth Properties LLC, Class A | 97,229 | 3,502,189 | |||||||||||||
STAG Industrial, Inc.B | 27,799 | 1,014,942 | |||||||||||||
VICI Properties, Inc.B | 57,532 | 1,823,764 | |||||||||||||
|
| ||||||||||||||
10,783,583 | |||||||||||||||
|
| ||||||||||||||
Real Estate Management & Development - 0.50% | |||||||||||||||
Howard Hughes Corp.A | 10,200 | 1,100,988 | |||||||||||||
|
| ||||||||||||||
Total Real Estate | 11,884,571 | ||||||||||||||
|
| ||||||||||||||
Utilities - 5.63% | |||||||||||||||
Electric Utilities - 5.09% | |||||||||||||||
Edison International | 63,079 | 3,750,047 | |||||||||||||
Entergy Corp. | 21,222 | 2,319,352 | |||||||||||||
Evergy, Inc. | 35,344 | 2,260,956 | |||||||||||||
NRG Energy, Inc. | 52,767 | 1,890,114 | |||||||||||||
Xcel Energy, Inc. | 13,684 | 975,669 | |||||||||||||
|
| ||||||||||||||
11,196,138 | |||||||||||||||
|
| ||||||||||||||
Gas Utilities - 0.54% | |||||||||||||||
UGI Corp. | 26,945 | 1,177,766 | |||||||||||||
|
| ||||||||||||||
Total Utilities | 12,373,904 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $131,892,350) | 209,659,962 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 4.50% (Cost $9,900,319) | |||||||||||||||
Investment Companies - 4.50% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%C D | 9,900,319 | 9,900,319 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 99.84% (Cost $141,792,669) | 219,560,281 | ||||||||||||||
OTHER ASSETS, NET OF LIABILITIES - 0.16% | 361,542 | ||||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 219,921,823 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at April 30, 2021 (Note 9).
C The Fund is affiliated by having the same investment advisor.
D 7-day yield.
ADR - American Depositary Receipt.
LLC - Limited Liability Company.
PLC - Public Limited Company.
Long Futures Contracts Open on April 30, 2021: |
| |||||||||||||||
Equity Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
S&P MidCap 400 E-Mini Index Futures | 34 | June 2021 | $ | 8,981,044 | $ | 9,249,020 | $ | 267,976 | ||||||||
|
|
|
|
|
| |||||||||||
$ | 8,981,044 | $ | 9,249,020 | $ | 267,976 | |||||||||||
|
|
|
|
|
|
Index Abbreviations: | ||
S&P MidCap 400 | Standard & Poor’s Midcap 400 Index. |
See accompanying notes
30
American Beacon Mid-Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2021, the investments were classified as described below:
Mid-Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 209,659,962 | $ | - | $ | - | $ | 209,659,962 | ||||||||||||||||||||
Short-Term Investments | 9,900,319 | - | - | 9,900,319 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 219,560,281 | $ | - | $ | - | $ | 219,560,281 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||||||
Futures Contracts | $ | 267,976 | $ | - | $ | - | $ | 267,976 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 267,976 | $ | - | $ | - | $ | 267,976 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the period ended April 30, 2021, there were no transfers into or out of Level 3.
See accompanying notes
31
American Beacon FundsSM
Statements of Assets and Liabilities
April 30, 2021 (Unaudited)
Balanced Fund | Mid-Cap Value Fund | |||||||||||
Assets: | ||||||||||||
Investments in unaffiliated securities, at fair value†§ | $ | 177,685,655 | $ | 209,659,962 | ||||||||
Investments in affiliated securities, at fair value‡ | 6,891,537 | 9,900,319 | ||||||||||
Cash collateral held at broker for futures contracts | 305,000 | 577,000 | ||||||||||
Dividends and interest receivable | 463,768 | 41,551 | ||||||||||
Receivable for investments sold | 1,299,610 | 1,893,734 | ||||||||||
Receivable for fund shares sold | 158,939 | 161,600 | ||||||||||
Receivable for expense reimbursement (Note 2) | - | 37,610 | ||||||||||
Receivable for variation margin on open futures contracts (Note 5) | 113,489 | 268,021 | ||||||||||
Prepaid expenses | 59,124 | 62,212 | ||||||||||
|
|
|
| |||||||||
Total assets | 186,977,122 | 222,602,009 | ||||||||||
|
|
|
| |||||||||
Liabilities: | ||||||||||||
Payable for investments purchased | 1,266,063 | 1,878,063 | ||||||||||
Payable for fund shares redeemed | 146,731 | 165,090 | ||||||||||
Cash due to broker for futures contracts | 148,847 | 399,254 | ||||||||||
Management and sub-advisory fees payable (Note 2) | 138,368 | 144,876 | ||||||||||
Service fees payable (Note 2) | 34,272 | 17,664 | ||||||||||
Transfer agent fees payable (Note 2) | 7,716 | 10,769 | ||||||||||
Payable upon return of securities loaned (Note 9)§ | 854,874 | - | ||||||||||
Custody and fund accounting fees payable | 19,941 | 23,212 | ||||||||||
Professional fees payable | 28,120 | 16,929 | ||||||||||
Trustee fees payable (Note 2) | 2,538 | 6,282 | ||||||||||
Payable for prospectus and shareholder reports | 6,667 | 9,644 | ||||||||||
Other liabilities | 1,782 | 8,403 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 2,655,919 | 2,680,186 | ||||||||||
|
|
|
| |||||||||
Net assets | $ | 184,321,203 | $ | 219,921,823 | ||||||||
|
|
|
| |||||||||
Analysis of net assets: | ||||||||||||
Paid-in-capital | $ | 138,331,057 | $ | 148,399,721 | ||||||||
Total distributable earnings (deficits)A | 45,990,146 | 71,522,102 | ||||||||||
|
|
|
| |||||||||
Net assets | $ | 184,321,203 | $ | 219,921,823 | ||||||||
|
|
|
|
See accompanying notes
32
American Beacon FundsSM
Statements of Assets and Liabilities
April 30, 2021 (Unaudited)
Balanced Fund | Mid-Cap Value Fund | |||||||||||
Shares outstanding at no par value (unlimited shares authorized): | ||||||||||||
R5 Class | 1,366,014 | 4,167,488 | ||||||||||
|
|
|
| |||||||||
Y Class | 2,125,356 | 2,689,926 | ||||||||||
|
|
|
| |||||||||
Investor Class | 6,052,916 | 3,034,550 | ||||||||||
|
|
|
| |||||||||
Advisor Class | 139,671 | 31,719 | ||||||||||
|
|
|
| |||||||||
A Class | 895,574 | 224,731 | ||||||||||
|
|
|
| |||||||||
C Class | 1,911,721 | 163,535 | ||||||||||
|
|
|
| |||||||||
R6 Class | N/A | 696,536 | ||||||||||
|
|
|
| |||||||||
Net assets: | ||||||||||||
R5 Class | $ | 22,522,432 | $ | 83,097,699 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 35,338,396 | $ | 53,185,927 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 84,800,665 | $ | 61,634,867 | ||||||||
|
|
|
| |||||||||
Advisor Class | $ | 2,123,353 | $ | 619,695 | ||||||||
|
|
|
| |||||||||
A Class | $ | 12,507,953 | $ | 4,389,213 | ||||||||
|
|
|
| |||||||||
C Class | $ | 27,028,404 | $ | 3,079,517 | ||||||||
|
|
|
| |||||||||
R6 Class | $ | N/A | $ | 13,914,905 | ||||||||
|
|
|
| |||||||||
Net asset value, offering and redemption price per share: | ||||||||||||
R5 Class | $ | 16.49 | $ | 19.94 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 16.63 | $ | 19.77 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 14.01 | $ | 20.31 | ||||||||
|
|
|
| |||||||||
Advisor Class | $ | 15.20 | $ | 19.54 | ||||||||
|
|
|
| |||||||||
A Class | $ | 13.97 | $ | 19.53 | ||||||||
|
|
|
| |||||||||
A Class (offering price) | $ | 14.82 | $ | 20.72 | ||||||||
|
|
|
| |||||||||
C Class | $ | 14.14 | $ | 18.83 | ||||||||
|
|
|
| |||||||||
R6 Class | $ | N/A | $ | 19.98 | ||||||||
|
|
|
| |||||||||
† Cost of investments in unaffiliated securities | $ | 138,994,945 | $ | 131,892,350 | ||||||||
‡ Cost of investments in affiliated securities | $ | 6,891,537 | $ | 9,900,319 | ||||||||
§ Fair value of securities on loan | $ | 1,122,657 | $ | 2,696,756 | ||||||||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
33
American Beacon FundsSM
Statements of Operations
For the period ended April 30, 2021 (Unaudited)
Balanced Fund | Mid-Cap Value Fund | |||||||||||
Investment income: | ||||||||||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 1,226,164 | $ | 2,717,641 | A | |||||||
Dividend income from affiliated securities (Note 2) | 193 | 519 | ||||||||||
Interest income | 828,878 | - | ||||||||||
Income derived from securities lending (Note 9) | 19,035 | 4,963 | ||||||||||
|
|
|
| |||||||||
Total investment income | 2,074,270 | 2,723,123 | ||||||||||
|
|
|
| |||||||||
Expenses: | ||||||||||||
Management and sub-advisory fees (Note 2) | 474,691 | 977,353 | ||||||||||
Transfer agent fees: | ||||||||||||
R5 Class (Note 2) | 3,140 | 12,062 | ||||||||||
Y Class (Note 2) | 19,696 | 26,089 | ||||||||||
Investor Class | 3,580 | 4,005 | ||||||||||
Advisor Class | 113 | 1,010 | ||||||||||
A Class | 412 | 319 | ||||||||||
C Class | 1,080 | 500 | ||||||||||
R6 Class | - | 205 | ||||||||||
Custody and fund accounting fees | 28,493 | 32,889 | ||||||||||
Professional fees | 30,821 | 27,363 | ||||||||||
Registration fees and expenses | 41,265 | 47,356 | ||||||||||
Service fees (Note 2): | ||||||||||||
Investor Class | 123,735 | 114,760 | ||||||||||
Advisor Class | 2,251 | 1,298 | ||||||||||
A Class | 5,595 | 2,723 | ||||||||||
C Class | 9,632 | 1,676 | ||||||||||
Distribution fees (Note 2): | ||||||||||||
Advisor Class | 2,534 | 1,337 | ||||||||||
A Class | 15,410 | 4,722 | ||||||||||
C Class | 131,919 | 15,553 | ||||||||||
Prospectus and shareholder report expenses | 12,104 | 19,336 | ||||||||||
Trustee fees (Note 2) | 7,603 | 12,792 | ||||||||||
Loan expense (Note 10) | 477 | 1,346 | ||||||||||
Other expenses | 6,319 | 18,172 | ||||||||||
|
|
|
| |||||||||
Total expenses | 920,870 | 1,322,866 | ||||||||||
|
|
|
| |||||||||
Net fees waived and expenses (reimbursed) (Note 2) | - | (57,971 | ) | |||||||||
|
|
|
| |||||||||
Net expenses | 920,870 | 1,264,895 | ||||||||||
|
|
|
| |||||||||
Net investment income | 1,153,400 | 1,458,228 | ||||||||||
|
|
|
| |||||||||
Realized and unrealized gain (loss) from investments: | ||||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments in unaffiliated securitiesB | 6,484,879 | 27,689,190 | ||||||||||
Commission recapture (Note 1) | - | 13,449 | ||||||||||
Futures contracts | 551,131 | 3,296,473 | ||||||||||
Change in net unrealized appreciation of: | ||||||||||||
Investments in unaffiliated securitiesC | 37,937,095 | 80,216,109 | ||||||||||
Futures contracts | 240,186 | 262,955 | ||||||||||
|
|
|
| |||||||||
Net gain from investments | 45,213,291 | 111,478,176 | ||||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | $ | 46,366,691 | $ | 112,936,404 | ||||||||
|
|
|
| |||||||||
† Foreign taxes | $ | 8,542 | $ | 186 | ||||||||
A Includes significant dividends from one issuer of $453,636. |
| |||||||||||
B The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities. |
| |||||||||||
C The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
34
American Beacon FundsSM
Statements of Changes in Net Assets
Balanced Fund | Mid-Cap Value Fund | |||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||
Increase (decrease) in net assets: | ||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||
Net investment income | $ | 1,153,400 | $ | 3,018,158 | $ | 1,458,228 | $ | 4,721,907 | ||||||||||||||||||||
Net realized gain (loss) from investments in unaffiliated securities, commission recapture, and futures contracts | 7,036,010 | 20,492,813 | 30,999,112 | (10,993,331 | ) | |||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, and futures contracts | 38,177,281 | (33,734,462 | ) | 80,479,064 | (54,393,925 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 46,366,691 | (10,223,491 | ) | 112,936,404 | (60,665,349 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Distributions to shareholders: |
| |||||||||||||||||||||||||||
Total retained earnings: | ||||||||||||||||||||||||||||
R5 Class | (2,618,798 | ) | (3,590,716 | ) | (1,595,645 | ) | (2,382,518 | ) | ||||||||||||||||||||
Y Class | (5,083,740 | ) | (5,090,722 | ) | (883,163 | ) | (1,359,606 | ) | ||||||||||||||||||||
Investor Class | (9,881,754 | ) | (8,793,706 | ) | (515,548 | ) | (3,045,660 | ) | ||||||||||||||||||||
Advisor Class | (226,100 | ) | (184,147 | ) | (19,048 | ) | (37,713 | ) | ||||||||||||||||||||
A Class | (1,545,987 | ) | (1,532,023 | ) | (60,706 | ) | (36,488 | ) | ||||||||||||||||||||
C Class | (3,137,016 | ) | (2,715,840 | ) | (26,795 | ) | (26,609 | ) | ||||||||||||||||||||
R6 Class | - | - | (218,896 | ) | (57,137 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net distributions to shareholders | (22,493,395 | ) | (21,907,154 | ) | (3,319,801 | ) | (6,945,731 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Capital share transactions (Note 11): | ||||||||||||||||||||||||||||
Proceeds from sales of shares | 17,782,851 | 38,024,184 | 26,547,664 | 73,144,682 | ||||||||||||||||||||||||
Reinvestment of dividends and distributions | 21,536,760 | 21,072,153 | 3,286,217 | 6,914,103 | ||||||||||||||||||||||||
Cost of shares redeemed | (51,760,465 | ) | (112,808,124 | ) | (208,365,095 | ) | (219,732,201 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in net assets from capital share transactions | (12,440,854 | ) | (53,711,787 | ) | (178,531,214 | ) | (139,673,416 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets | 11,432,442 | (85,842,432 | ) | (68,914,611 | ) | (207,284,496 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net assets: | ||||||||||||||||||||||||||||
Beginning of period | 172,888,761 | 258,731,193 | 288,836,434 | 496,120,930 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
End of period | $ | 184,321,203 | $ | 172,888,761 | $ | 219,921,823 | $ | 288,836,434 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
See accompanying notes
35
American Beacon FundsSM
April 30, 2021 (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 April 30, 2021, the Trust consists of twenty-eight active series, two of which are presented in this filing: American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund (collectively, the “Funds” and each individually a “Fund”). The remaining twenty-six 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.
In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives a fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how a Fund will use derivatives, may adversely affect a Fund’s performance and may increase costs related to a Fund’s use of derivatives.
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 | ||||
R5 Class | 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 Class | All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors. | $ | 2,500 |
36
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Class | Eligible Investors | Minimum Initial Investments | ||||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 | |||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 Class | Large institutional retirement plan investors - sold through retirement plan sponsors. | None |
Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class based on the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.
Significant Accounting Policies
The following is a summary of significant accounting policies, consistently followed by the Funds in preparation of the financial statements. The Funds are considered investment companies and accordingly, follow the investment company accounting and reporting guidance of the 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 the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Funds. Interest income, 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. 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 Statements of Operations. Income or short-term capital gain distributions received from registered investment companies, if any, are recorded as dividend income. Long-term gain distributions received from registered investment companies, if any, are recorded as realized gains.
Debt obligations may be placed on a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed for non-accrual when the issuer resumes interest payments or when collectability of interest is probable. Realized gains (losses) from securities sold are determined on the basis of specific lot identification.
37
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Distributions to Shareholders
The Balanced Fund distributes most or all of its net earnings and realized gains, if any, each taxable year in the form of dividends from net investment income on a quarterly basis and distributions of realized net capital gains and net gains or losses from foreign currency transactions on an annual basis. The Mid-Cap Value Fund distributes most or all of its net earnings and realized gains, if any, each taxable year in the form of dividends from net investment income and distributions of realized net capital gains and net gains or losses from foreign currency transactions on an annual basis. The Funds do not have a fixed dividend rate and do not guarantee that they will pay any distributions in any particular period. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Funds may designate earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Funds have established brokerage commission recapture arrangements with certain brokers or dealers. If 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 (loss) in the Funds’ Statements of Operations, if applicable.
Allocation of Income, Trust Expenses, Gains, and Losses
Investment income, realized and unrealized gains and losses from investments of the Funds are allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Funds. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Funds on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Funds or nature of the services performed and relative applicability to the Funds.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.
2. Transactions with Affiliates
Management and Investment Sub-Advisory Agreements
The Funds and the Manager are parties to a Management Agreement that obligates the Manager to provide the Funds with investment advisory and administrative services. As compensation for performing the duties under
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
the Management Agreement, the Manager will receive an annualized management fee based on a percentage of each Funds’ average daily net assets that is calculated and accrued daily according to the following schedule:
First $15 billion | 0.35 | % | ||
Next $15 billion | 0.325 | % | ||
Over $30 billion | 0.30 | % |
The Trust, on behalf of the Funds, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC and Hotchkis and Wiley Capital Management, LLC for the Balanced Fund. In addition, the Manager manages a portion of the Balanced Fund pursuant to the Management Agreement. The Trust, on behalf of the Funds, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC, Pzena Investment Management, LLC, and WEDGE Capital Management, L.L.P. for the Mid-Cap Value Fund. Pursuant to the Investment Advisory Agreements, the Funds have agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Funds’ average daily net assets.
The Management and Sub-Advisory Fees paid by the Funds for the period ended April 30, 2021 were as follows:
Balanced Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 325,165 | ||||||||
Sub-Advisor Fees | 0.17 | % | 149,526 | |||||||||
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Total | 0.52 | % | $ | 474,691 | ||||||||
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Mid-Cap Value Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 408,629 | ||||||||
Sub-Advisor Fees | 0.48 | % | 568,724 | |||||||||
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Total | 0.83 | % | $ | 977,353 | ||||||||
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As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee of 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 of 10% of such loan fees. Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statements of Operations. During the period ended April 30, 2021, the Manager received securities lending fees of $2,060 and $565 for the securities lending activities of Balanced Fund and Mid-Cap Value Fund, respectively.
Distribution Plans
The Funds, except for the Advisor, A and C Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the management fee received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Funds do not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.
39
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A and C Classes of the 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 Advisor and A Classes, and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.
Service Plans
The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor, Advisor, A, and C Classes of the Funds. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Funds.
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 R5 and Y Classes of the Funds and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Funds primarily through the use of omnibus accounts on behalf of their customers who hold positions in the Funds. Certain services would have been provided by the Funds’ transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Funds’ transfer agent. Accordingly, the Funds, pursuant to Board approval, have agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the R5 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 R5 and Y Classes on an annual basis. During the period ended April 30, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
Balanced | $ | 21,079 | ||
Mid-Cap Value | 32,295 |
As of April 30, 2021, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
Balanced | $ | 4,584 | ||
Mid-Cap Value | 4,153 |
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 listed below held the following shares with an April 30, 2021 fair value and dividend income earned from the investment in the USG Select Fund.
Affiliated Security | Type of Transaction | Fund | April 30, 2021 Shares/Principal | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Dividend Income |
| April 30, 2021 Fair Value | ||||||||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Direct | Balanced | $ | 6,036,663 | $ | — | $ | — | $ | 193 | $ | 6,036,663 |
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Affiliated Security | Type of Transaction | Fund | April 30, 2021 Shares/Principal | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Dividend Income |
| April 30, 2021 Fair Value | ||||||||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Securities Lending | Balanced | $ | 854,874 | $ | - | $ | - | $ | N/A | $ | 854,874 | ||||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Direct | Mid-Cap Value | 9,900,319 | - | - | 519 | 9,900,319 |
The Funds and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the period ended April 30, 2021, 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 Investments in USG Select Fund | Total | |||||||||
Balanced | $ | 2,112 | $ | 97 | $ | 2,209 | ||||||
Mid-Cap Value | 6,098 | 121 | 6,219 |
Interfund Credit Facility
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the period ended April 30, 2021, the Balanced Fund did not utilize the credit facility and the Mid-Cap Value Fund borrowed $10,232,971 for 1 day at an average interest rate of 0.83% with interest charges of $233.
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 April 30, 2021, the Manager waived and/or reimbursed expenses as follows:
Fund | Class | Expense Cap | Reimbursed Expenses | (Recouped) Expenses | Expiration of Reimbursed Expenses | |||||||||||||||||
1/11/2020 - 2/28/2021 | 3/1/2021 - 4/30/2021 | |||||||||||||||||||||
Mid-Cap Value | R5 | N/A | 0.91 | % | 16,012 | - | 2023-2024 | |||||||||||||||
Mid-Cap Value | Y | N/A | 0.99 | % | 9,044 | - | 2023-2024 | |||||||||||||||
Mid-Cap Value | Investor | N/A | 1.17 | % | 25,212 | - | 2023-2024 | |||||||||||||||
Mid-Cap Value | Advisor | N/A | 1.49 | % | 295 | - | 2023-2024 | |||||||||||||||
Mid-Cap Value | A | N/A | 1.26 | % | 996 | - | 2023-2024 | |||||||||||||||
Mid-Cap Value | C | N/A | 2.01 | % | 609 | - | 2023-2024 | |||||||||||||||
Mid-Cap Value | R6 | 0.87 | % | 0.90 | % | 5,803 | - | 2023-2024 |
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Of these amounts, $37,610 was disclosed as a Receivable for Expense Reimbursement on the Statements of Assets and Liabilities at April 30, 2021 for the Mid-Cap Value Fund.
The Funds have adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Funds for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years from the date of the Manager’s waiver/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 2023 and 2024. The Funds did not record a liability for potential reimbursements due to the current assessment that reimbursements are uncertain. 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 | ||||||||||||
Mid-Cap Value | - | 6,931 | * | - | 2022-2023 |
* Amount related to R6 Class
Sales Commissions
The Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers which may be used to offset distribution related expenses. During the period ended April 30, 2021, RID collected $1,935 and $38 for Balanced Fund and Mid-Cap Value Fund, respectively, from the sale of Class A Shares.
A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Funds’ Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the period ended April 30, 2021, there were no CDSC fees collected for the Class A Shares of the Funds.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Funds’ Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended April 30, 2021, CDSC fees of $168 and $591 were collected for the Class C Shares of Balanced Fund and Mid-Cap Value Fund, respectively.
Trustee Fees and Expenses
Effective January 1, 2021, as compensation for their service to the American Beacon Funds Complex, including the Trust (collectively, the “Trusts”), each Trustee is compensated from the Trusts as follows: (1) an annual retainer of $120,000; (2) meeting attendance fee (for attendance in-person or via teleconference) of (a) $12,000 for in person attendance, or $5,000 for telephonic attendance, by Board members for each regularly scheduled or special Board meeting, (b) $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, (c) $1,000 for attendance by Committee members at meetings of the Nominating and Governance Committee; and (d) $2,500 for attendance by Board members for each special telephonic Board meeting; and (3) reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. For her service as Board Chair, Ms. Cline receives an additional annual retainer of $50,000. Although she attends several
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
committee meetings at each quarterly Board meeting, she receives only a single $2,500 fee each quarter for her attendance at those meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chair of the Nominating and Governance Committee receives an additional annual retainer of $10,000.
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.
Equity securities, including shares of closed-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 and over-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 been de-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 in non-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 of
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
non-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.
Valuation Inputs
Various inputs may be used to determine the fair value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1 | - | Quoted prices in active markets for identical securities. | ||
Level 2 | - | Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. | ||
Level 3 | - | Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment. |
Level 1 and Level 2 trading assets and trading liabilities, at fair value
Common stocks, preferred securities, and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are generally categorized as Level 2 of the fair value hierarchy.
Fixed-income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. Treasury obligations, sovereign issues, bank loans, convertible preferred securities, and non-U.S. bonds are normally valued by pricing service providers that use broker dealer quotations, reported trades or valuation estimates from their internal pricing models. The service providers’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates, and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy. Fixed-income securities purchased on a delayed-delivery basis are marked-to-market daily until settlement at the forward settlement date and are categorized as Level 2 of the fair value hierarchy.
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Mortgage-related and asset-backed securities (“ABS”) are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by pricing service providers that use broker-dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, current market data, estimated cash flows, and market-based yield spreads for each tranche, and incorporates deal collateral performance, as available. Mortgage-related and ABS that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
4. Securities and Other Investments
Agency Mortgage-Backed Securities
Certain mortgage-backed securities (“MBS”) may be issued or guaranteed by the U.S. government or a government sponsored entity, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Although these instruments may be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit of the United States and are still exposed to the risk of non-payment.
American Depositary Receipts and Non-Voting Depositary Receipts
ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Non-Voting Depositary Receipts (“NVDRs”) represent financial interests in an issuer but the holder is not entitled to any voting rights. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers, and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the 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.
Asset-Backed Securities
ABS are securities issued by trusts and special purpose entities that are backed by pools of assets, such as automobile and credit-card receivables and home equity loans, which pass through the payments on the underlying obligations to the security holders (less servicing fees paid to the originator or fees for any credit enhancement). Typically, loans or accounts receivable paper are transferred from the originator to a specially created trust, which repackages the trust’s interests as securities with a minimum denomination and a specific term. The securities are then privately placed or publicly offered. Examples include certificates for automobile receivables and so-called plastic bonds, backed by credit card receivables. The Balanced Fund is permitted to invest in ABS, subject to the Fund’s rating and quality requirements.
The value of an ABS is affected by, among other things, changes in the market’s perception of the asset backing the security, the creditworthiness of the servicing agent for the loan pool, the originator of the loans and the financial institution providing any credit enhancement. Payments of principal and interest passed through to holders of ABS are frequently supported by some form of credit enhancement, such as a letter of credit, surety
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
bond, limited guarantee by another entity or by having a priority to certain of the borrower’s other assets. The degree of credit enhancement varies, and generally applies to only a portion of the ABS’s par value. Value is also affected if any credit enhancement has been exhausted.
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.
Fixed-Income Investments
The Funds may hold debt, including government and corporate debt, and other fixed-income securities. Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause the Funds’ NAV to likewise decrease, and vice versa. How specific fixed-income securities may react to changes in interest rates will depend on the specific characteristics of each security. For example, while securities with longer maturities tend to produce higher yields, they also tend to be more sensitive to changes in prevailing interest rates and are, therefore, more volatile than shorter-term securities and are subject to greater market fluctuations as a result of changes in interest rates. Fixed-income securities are also subject to credit risk, which is the risk that the credit strength of an issuer of a fixed-income security will weaken and/or that the issuer will be unable to make timely principal and interest payments and that the security may go into default. In addition, there is prepayment risk, which is the risk that during periods of falling interest rates, certain fixed-income securities with higher interest rates, such as mortgage-backed securities (“MBS”) and ABS, may be prepaid by their issuers thereby reducing the amount of interest payments. This may result in a Fund having to reinvest its proceeds in lower yielding securities. Securities underlying MBS and ABS, which may include subprime mortgages, also may be subject to a higher degree of credit risk, valuation risk, and liquidity risk.
High-Yield Securities
Non-investment-grade securities are rated below the four highest credit grades by at least one of the public rating agencies (or are unrated if not publicly rated). Participation in high-yielding securities transactions generally involves greater returns in the form of higher average yields. However, participation in such transactions involves greater risks, including sensitivity to economic changes, solvency, and relative liquidity in the secondary trading market. Lower ratings may reflect a greater possibility that the financial condition of the issuer, or adverse changes in general economic conditions, or both, may impair the ability of the issuer to make payments of interest and principal. The prices and yields of lower-rated securities generally fluctuate more than higher-quality securities, and such prices may decline significantly in periods of general economic difficulty or rising interest rates.
Illiquid and Restricted Securities
Generally, an illiquid asset is an asset that the Funds reasonably expect cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
market value of the investment, as determined pursuant to Rule 22e-4 under the Investment Company Act or as otherwise permitted or required by SEC rules and interpretations. Historically, 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. Securities that have not been registered under the Securities Act are referred to as private placements or restricted securities and are purchased directly from the issuer or in the secondary market. These securities may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. A large institutional market exists for certain securities that are not registered under the Securities Act, including repurchase agreements, commercial paper, foreign securities, municipal securities and corporate bonds and notes. Institutional investors depend on an efficient institutional market in which the unregistered security can be readily resold or on an issuer’s ability to honor a demand for repayment. However, the fact that there are contractual or legal restrictions on resale of such investments to the general public or to certain institutions may not be indicative of their liquidity.
Limitations on resale may have an adverse effect on the marketability of portfolio securities, and the Fund might be unable to dispose of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions within seven calendar days. In addition, the Fund may get only limited information about an issuer, so it may be less able to predict a loss. The Fund also might have to register such restricted securities in order to dispose of them resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities.
In recognition of the increased size and liquidity of the institutional market for unregistered securities and the importance of institutional investors in the formation of capital, the SEC adopted Rule 144A under the Securities Act. Rule 144A is designed to facilitate efficient trading among institutional investors by permitting the sale of certain unregistered securities to qualified institutional buyers. To the extent privately placed securities held by the Fund qualify under Rule 144A and an institutional market develops for those securities, the Fund likely will be able to dispose of the securities without registering them under the Securities Act. To the extent that institutional buyers become, for a time, uninterested in purchasing these securities, investing in Rule 144A securities could increase the level of the Fund’s illiquidity. The Manager or the Sub-Advisor, as applicable, may determine that certain securities qualified for trading under Rule 144A are liquid. Regulation S under the Securities Act permits the sale abroad of securities that are not registered for sale in the United States and includes a provision for U.S. investors, such as the Fund, to purchase such unregistered securities if certain conditions are met.
Securities sold in private placement offerings made in reliance on the “private placement” exemption from registration afforded by Section 4(a)(2) of the Securities Act and resold to qualified institutional buyers under Rule 144A under the Securities Act (“Section 4(a)(2) securities”) are restricted as to disposition under the federal securities laws, and generally are sold to institutional investors, such as the Fund, that agree they are purchasing the securities for investment and not with an intention to distribute to the public. Any resale by the purchaser must be pursuant to an exempt transaction and may be accomplished in accordance with Rule 144A. Section 4(a)(2) securities normally are resold to other institutional investors through or with the assistance of the issuer or dealers that make a market in the Section 4(a)(2) securities, thus providing liquidity.
Restricted securities outstanding during the period ended April 30, 2021 are disclosed in the Notes to the Schedules of Investments.
Mortgage-Backed Securities
MBS often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities’ effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of the Funds’ portfolio at the time resulting in reinvestment risk.
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Rising or high interest rates may result in slower than expected principal payments which may tend to extend the duration of MBS, making them more volatile and more sensitive to changes in interest rates. This is known as extension risk.
MBS may have less potential for capital appreciation than comparable fixed-income securities due to the likelihood of increased prepayments of mortgages resulting from foreclosures or declining interest rates. These foreclosed or refinanced mortgages are paid off at face value (par) or less, causing a loss, particularly for any investor who may have purchased the security at a premium or a price above par. In such an environment, this risk limits the potential price appreciation of these securities.
Mortgage-Related and Other Asset-Backed Securities
The Balanced Fund may invest in mortgage or other ABS. These securities may include mortgage instruments issued by U.S. government agencies (“agency mortgages”) or those issued by private entities (“non-agency mortgages”). Specific types of instruments may include mortgage pass-through securities, collateralized mortgage obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage-backed securities and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property. The value of the Fund’s MBS may be affected by, among other things, changes or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgage, or the quality of the underlying assets. The mortgages underlying the securities may default or decline in quality or value. Through its investments in MBS, a Fund has exposure to subprime loans, Alt-A loans and non-conforming loans as well as to the mortgage and credit markets generally. Underlying collateral related to subprime, Alt-A and non-conforming mortgage loans has become increasingly susceptible to defaults and declines in quality or value, especially in a declining residential real estate market. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole.
Other Investment Company Securities and Other Exchange-Traded Products
The Funds may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies (“BDCs”), ETFs, unit investment trusts, and other investment companies of the Trust. The Funds may invest in securities of an investment company advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Funds become a shareholder of that investment company. As a result, the Funds’ shareholders indirectly will bear the Funds’ proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Funds’ shareholders directly bear in connection with the Funds’ own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Funds in their Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
Privately Issued Mortgage-Backed Securities
Pools created by non-governmental issuers generally offer a higher rate of interest than government and government-related pools because there are no direct or indirect government guarantees of payments in such pools. However, timely payment of interest and principal of these pools is often partially supported by various enhancements such as over-collateralization and senior/subordination structures and by various forms of insurance or guarantees, including individual loan, title, pool and hazard insurance. The insurance and guarantees are issued by government entities, private insurers or the mortgage poolers. Although the market for such securities is becoming increasingly liquid, securities issued by certain private organizations may not be readily marketable.
48
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Publicly Traded Partnerships/Master Limited Partnerships (“MLP”)
The Funds may invest in publicly traded partnerships such as MLPs. MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the OTC market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. The general partner or partners are jointly and severally responsible for the liabilities of the MLP. (An MLP also may be an entity similar to a limited partnership, such as an LLC, which has one or more managers or managing members and non-managing members (who are like limited partners)). The Funds invest in an MLP as a limited partner and normally would not be liable for the debts of the MLP beyond the amount the Fund has invested therein, but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to a limited partner. The right of an MLP’s creditors would continue even after a Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.
Real Estate Investment Trusts
The Funds may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Funds re-characterize distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information, which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year.
U.S. Government Agency Securities
U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government currently provides financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law. U.S. Government securities include U.S. Treasury bills, notes and bonds, Federal Home Loan Bank (“FHLB”) obligations, Federal Farm Credit Bank (“FFCB”) obligations, U.S. Government agency obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.
U.S. Treasury Obligations
U.S. Treasury obligations include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations (known as “STRIPS”) and inflation-indexed securities. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates. U.S. Treasury obligations are subject to credit risk and interest rate risk.
Variable or Floating Rate Obligations
The interest rates payable on certain fixed-income securities in which the Balanced Fund may invest are not fixed and may fluctuate based upon changes in market rates. A variable rate obligation has an interest rate which is adjusted at predesignated periods in response to changes in the market rate of interest on which the interest
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
rate is based. Variable and floating rate obligations are less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons.
5. Financial Derivative Instruments
The Funds may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Funds’ use of derivatives, it is important to note that the Funds do not use derivatives for the purpose of creating financial leverage.
Futures Contracts
Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Funds may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities or that the counterparty will fail to perform its obligations.
Upon entering into a futures contract, the Funds are required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Funds usually reflect this amount on the Schedules of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statements of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.
During the period ended April 30, 2021, 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 the purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.
Average Futures Contracts Outstanding | ||||
Fund | Period Ended April 30, 2021 | |||
Balanced | 21 | |||
Mid-Cap Value | 49 |
The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure(1):
Balanced Fund
Fair values of financial instruments on the Statements of Assets and Liabilities as of April 30, 2021: |
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Derivatives not accounted for as hedging instruments |
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Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | $ | - | $ | - | $ | - | $ | - | $ | 113,467 | $ | 113,467 | |||||||||||||||||||||||||||||||||||||||||||
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
The effect of financial derivative instruments on the Statements of Operations as of April 30, 2021: |
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Derivatives not accounted for as hedging instruments |
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Realized gain (loss) from derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | - | $ | - | $ | - | $ | - | $ | 551,131 | $ | 551,131 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | - | $ | - | $ | - | $ | - | $ | 240,186 | $ | 240,186 |
Mid-Cap Value Fund
Fair values of financial instruments on the Statements of Assets and Liabilities as of April 30, 2021: |
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Derivatives not accounted for as hedging instruments |
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Assets: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivable for variation margin from open futures contracts(2) | $ | - | $ | - | $ | - | $ | - | $ | 267,976 | $ | 267,976 | |||||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statements of Operations as of April 30, 2021: |
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Derivatives not accounted for as hedging instruments |
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Realized gain (loss) from derivatives | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | - | $ | - | $ | - | $ | - | $ | 3,296,473 | $ | 3,296,473 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | - | $ | - | $ | - | $ | - | $ | 262,955 | $ | 262,955 |
(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, if applicable. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2021.
Balanced Fund
Offsetting of Financial and Derivative Assets as of April 30, 2021: | ||||||||||||
| Assets | Liabilities | ||||||||||
Futures Contracts(1) | $ | 113,467 | $ | - | ||||||||
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Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 113,467 | $ | - | ||||||||
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Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (113,467 | ) | $ | - | |||||||
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Remaining Contractual Maturity of the Agreements As of April 30, 2021 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 854,874 | $ | - | $ | - | $ | - | $ | 854,874 | ||||||||||||||||||||||||||
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Total Borrowings | $ | 854,874 | $ | - | $ | - | $ | - | $ | 854,874 | ||||||||||||||||||||||||||
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Gross amount of recognized liabilities for securities lending transactions |
| $ | 854,874 | |||||||||||||||||||||||||||||||||
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Mid-Cap Value Fund
Offsetting of Financial and Derivative Assets as of April 30, 2021: | ||||||||||||
| Assets | Liabilities | ||||||||||
Futures Contracts(1) | $ | 267,976 | $ | - | ||||||||
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Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 267,976 | $ | - | ||||||||
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Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (267,976 | ) | $ | - | |||||||
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(1) Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedules of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
6. Principal Risks
Investing in the Funds may involve certain risks including, but not limited to, those described below.
Asset-Backed and Mortgage Related Securities Risk
Investments in asset-backed and mortgage related securities are subject to market risks for fixed-income securities which include, but are not limited to, interest rate risk, prepayment risk and extension risk. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain MBS and ABS securities. If interest rates fall, the rate of prepayments tends to increase as borrowers are motivated to pay off debt and refinance at new lower rates. When mortgages and other obligations are prepaid and when securities are called, a Fund may have to reinvest in securities with a lower yield or fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss and/or a decrease in the amount of dividends and yield. Because prepayments increase when interest rates fall, the prices of MBS and ABS do not increase as much as other fixed income securities when interest rates fall. When interest rates rise, borrowers are less likely to prepay their mortgage and other loans. A decreased rate of prepayments lengthens the expected maturity of MBS and ABS. Therefore, the prices of MBS and ABS may decrease more than prices of other fixed-income securities when interest rates rise. Rising interest rates tend to extend the duration of these securities, making them more sensitive to changes in interest rates. Rising interest rates also may increase the risk of default by borrowers. As a result, in a period of rising interest rates, a Fund that holds these types of securities, may experience additional volatility and losses. A decline in the credit quality of and defaults by the issuers of asset-backed and mortgage related securities or instability in the markets for such securities may affect the value and liquidity of such securities, which could result in losses to a Fund. In addition, certain asset-backed and mortgage related securities may include securities backed by pools of loans made to “subprime” borrowers or borrowers with blemished credit histories; the risk of defaults is generally higher in the case of mortgage pools that include such subprime mortgages.
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 the Funds may have an adverse impact on its price and make it difficult for the Funds to sell it. Ratings represent a rating
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
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.
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.
Foreign Investing and Emerging Markets 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, (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. To the extent the Funds invest a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region. In addition, the economies and political environments of emerging market countries tend to be more unstable than those of developed countries, resulting in more volatile rates of return than the developed markets and substantially greater risk to investors. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currency and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depository or their agents goes bankrupt. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than, or in addition to, investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities, resulting in increased volatility and limited liquidity for emerging market securities; trading suspensions; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return.
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. There may at times be an imperfect correlation between the movement in the prices of futures
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
contracts and the value of their underlying instruments or indexes. There can be no assurance that any strategy used will succeed. There also can be no assurance that, at all times, a liquid market will exist for offsetting a futures contract that a Fund has previously bought or sold and this may result in the inability to close a futures contract when desired. Futures contracts may experience potentially dramatic price changes, which will increase the volatility of a Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
Illiquid and Restricted Securities Risk
Securities not registered in the U.S. under the Securities Act, including Rule 144A securities, are restricted as to their resale. Such securities may not be listed on an exchange and may have no active trading market. They may be more difficult to purchase or sell at an advantageous time or price because such securities may not be readily marketable in broad public markets. The Funds may not be able to sell a restricted security when the sub-advisor considers it desirable to do so and/or may have to sell the security at a lower price than the Funds believe is its fair market value. In addition, transaction costs may be higher for restricted securities and the Funds may receive only limited information regarding the issuer of a restricted security. The Funds may have to bear the expense of registering restricted securities for resale and the risk of substantial delays in effecting the registration.
Interest Rate Risk
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 long terms to maturity. Debt securities with longer durations 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 seven years, a 1% increase in interest rates could be expected to result in a 7% 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 has 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 has raised the federal funds rate several times since December 2015 and may continue to increase or decrease rates in the future. Interest rates may rise significantly and/or rapidly, potentially resulting in substantial losses to the Funds. 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.
LIBOR Risk
These Reference Rates are generally intended to represent the rate at which contributing banks may obtain short-term borrowings from each other within certain financial markets. LIBOR is produced daily by averaging the rates reported by a number of banks and may be a significant factor in determining a Fund’s payment obligations under a derivative instrument, the cost of financing to a Fund, or an investment’s value or return to a Fund, and may be used in other ways that affect a Fund’s performance. Arrangements are underway to phrase out the use of LIBOR. These arrangements and any additional regulatory or market changes may have an adverse impact on a Fund or its investments, including increased volatility or illiquidity in markets for instruments that rely on LIBOR.
Liquidity Risk
The Fund is susceptible to the risk that certain investments held by the Fund may have limited marketability, be subject to restrictions on sale, be difficult or impossible to purchase or sell at favorable times or
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Notes to Financial Statements
April 30, 2021 (Unaudited)
prices, or become less liquid in response to market developments or adverse credit events that may affect issuers or guarantors of a security. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities. Market prices for such instruments may be volatile. The Fund could lose money if it is unable to dispose of an investment at a time that is most beneficial to the Fund. The Fund may be required to dispose of investments at unfavorable times or prices to satisfy obligations, which may result in losses or may be costly to the Fund. For example, liquidity risk may be magnified in rising interest rate environments due to higher than normal redemption rates. Unexpected redemptions may force the Fund to sell certain investments at unfavorable prices to meet redemption requests or other cash needs. Judgment plays a greater role in pricing illiquid investments than in investments with more active markets.
Market Risk
The Funds are subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect a Fund’s performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future. The value of a security may decline due to adverse issuer-specific conditions, general market conditions unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole. Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Changes in value may be temporary or may last for extended periods. Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, including the U.S. presidential election, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree.
Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.
Mortgage-Backed and Mortgage Related Securities Risk
Investments in mortgage-backed and mortgage-related securities are influenced by the factors affecting the mortgages underlying the securities or the housing market. Investments in mortgage-backed and mortgage-related securities also are subject to market risks for fixed income securities, which include, but are not limited to, credit risk, interest rate risk, prepayment risk, extension risk, callable securities risk, and valuation risk. A decline in the credit quality of the issuers of mortgage-backed and mortgage-related securities or instability in the markets for such securities may affect the value and liquidity of such securities, which could result in losses to the Fund. These securities are also subject to the risk of default on the underlying mortgages, particularly during periods of market downturn, and an unexpectedly high rate of defaults on the underlying assets will adversely affect the security’s value.
55
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Multiple Sub-Advisor Risk
The Manager may allocate the Funds’ assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Funds’ assets. To a significant extent, the Funds’ performance will depend on the success of the Manager in allocating the Funds’ assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-advisor manages its allocated portion of the Funds independently from another sub-advisor, the same security may be held in different portions of the Funds, or may be acquired for one portion of the Funds at a time when a sub-advisor to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Funds’ holdings. Similarly, under some market conditions, one sub-advisor may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-advisor believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Funds. Because each sub-advisor directs the trading for its own portion of the Funds, and does not aggregate its transactions with those of the other sub-advisors, the Funds may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Funds’ assets among the Funds’ sub-advisors in a manner that it believes is consistent with achieving the Funds’ investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Funds’ assets among sub-advisors, due to factors that could impact the Manager’s revenues and profits.
Other Investment Companies Risk
The Funds may invest in shares of other registered investment companies, including money market funds that are advised by the Manager. To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses, including for example advisory and administrative fees, charged by those investment companies in addition to the Funds’ direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Funds’ investments in money market funds are subject to interest rate risk, credit risk, and market risk. The Funds must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Funds’ investment will decline, adversely affecting the Fund’s performance. To the extent the Funds invest in other investment companies that invest in equity securities, fixed-income securities and/or foreign securities, or that track an index, the Funds are subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject.
Prepayment and Extension Risk
When interest rates fall, borrowers will generally repay the loans that underlie certain debt securities, especially mortgage-related and other types of asset-backed securities, more quickly than expected, causing the issuer of the security to repay the principal prior to the security’s expected maturity date. The Fund may need to reinvest the proceeds at a lower interest rate, reducing its income. Securities subject to prepayment risk generally offer less potential for gains when prevailing interest rates fall. If the Fund buys those securities at a premium, accelerated prepayments on those securities could cause the Fund to lose a portion of its principal investment. The impact of prepayments on the price of a security may be difficult to predict and may increase the security’s price volatility. 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, increase the risk of default and delayed payment, heighten interest rate risk and increase the potential for a decline in its price. In addition, as a consequence of a decrease in prepayments, the amount of principal available to the Fund for investment would be reduced.
Recent Market Events Risk
An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. The transmission of COVID-19 and
56
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions and closed borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event changes, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession. The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time.
The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets and has signaled that it plans to maintain its interventions at an elevated level. Amid these ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. The U.S. government has reduced the federal corporate income tax rate, 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. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on January 31, 2020, commonly referred to as “Brexit,” and a trade agreement between the United Kingdom and the European Union, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.
Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.
Redemption Risk
The Funds may experience periods of heavy redemptions that could cause the Funds to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in the Funds, have short investment horizons, or have unpredictable cash flow needs. A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from mutual funds that hold large amounts of fixed-income securities. This, coupled with a reduction in the ability or willingness of dealers and other institutional investors to buy or hold fixed-income securities, may result in decreased liquidity and increased volatility in the fixed-income markets, and heightened redemption risk. Heavy redemptions, whether by a few large investors or many smaller investors, could hurt the Funds’ performance. This risk is heightened if the Fund invests in emerging market securities, which are generally less liquid than the securities of U.S. and other developed markets. The sale of assets to meet redemption requests may create net capital gains or losses, which could cause the Funds to have to distribute substantial capital gains.
Sector Risk
Sector risk is the risk associated with a Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase. In addition, when a Fund focuses its investments in certain sectors of the economy, its
57
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
performance may be driven largely by sector performance and could fluctuate more widely than if a Fund were invested more evenly across sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The businesses that constitute a sector may all react the same way to economic, political or regulatory events. A Fund’s performance could also be affected if the sectors do not perform as expected. The lack of exposure to one or more sectors may adversely affect performance. As a Fund’s portfolio changes over time, a Fund’s exposure to a particular sector may become higher or lower.
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. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.
U.S. Government Securities and Government-Sponsored Enterprises Risk
A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Additionally, circumstances could arise that would prevent the payment of interest or principal. This could result in losses to the Fund. Investments in government-sponsored enterprises are debt obligations issued by agencies and instrumentalities of the U.S. Government. These obligations vary in the level of support they receive from the U.S. Government. They may be: (i) supported by the full faith and credit of the U.S. Treasury, such as those of the Government National Mortgage Association (‘‘Ginnie Mae’’); (ii) supported by the right of the issuer to borrow from the U.S. Treasury, such as those of the Federal Home Loan Bank and the Federal Farm Credit Banks; (iii) supported by the discretionary authority of the U.S. Government to purchase the agency obligations, such as those of Fannie Mae and Freddie Mac or (iv) supported only by the credit of the issuer, such as those of the Federal Farm Credit Bureau. The U.S. Government may choose not to provide financial support to U.S. Government-sponsored agencies or instrumentalities if it is not legally obligated to do so, in which case, if the issuer defaulted, to the extent the Funds hold securities of such issuers, it might not be able to recover its investment from the U.S. Government. U.S. government securities and securities of government-sponsored entities are also subject to credit risk, interest rate risk and market risk. The rising U.S. national debt may lead to adverse impacts on the value of U.S. government securities due to potentially higher costs for the U.S. government to obtain new financing.
7. Federal Income and Excise Taxes
It is the policy of each Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, each Fund is treated as a single entity for the purpose of determining such qualification.
The Funds do not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2020 remain subject to examination by the Internal Revenue
58
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Service. If applicable, the Funds recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statements of Operations.
The Funds may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation (depreciation), as applicable, as the income is earned or capital gains are recorded.
Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.
As of April 30, 2021, the tax cost for each Fund and their respective gross unrealized appreciation (depreciation) were as follows:
Fund | Tax Cost |
| Unrealized Appreciation |
| Unrealized (Depreciation) |
| Net Unrealized Appreciation (Depreciation) | |||||||||||||||||||||
Balanced | $ | 148,890,355 | $ | 37,004,777 | $ | (1,317,940 | ) | $ | 35,686,837 | |||||||||||||||||||
Mid-Cap Value | 146,814,684 | 75,342,905 | (2,597,307 | ) | 72,745,598 |
Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the Funds in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.
As of October 31, 2020, the Funds had the following capital loss carryforwards:
Fund | Short-Term Capital Loss Carryforwards |
| Long-Term Capital Loss Carryforwards | |||||||||
Balanced | $ | - | $ | - | ||||||||
Mid-Cap Value | 24,193,808 | 4,636,872 |
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 2021 were as follows:
Fund | Purchases (non-U.S. Government Securities) |
| Purchases of U.S. Government Securities |
| Sales (non-U.S. Government Securities) |
| Sales of U.S. Government Securities | |||||||||||||||||||||
Balanced | $ | 22,526,823 | $ | 8,380,920 | $ | 58,778,812 | $ | 4,420,655 | ||||||||||||||||||||
Mid-Cap Value | 29,560,976 | - | 204,972,389 | - |
A summary of the Funds’ transactions in the USG Select Fund for the period ended April 30, 2021 were as follows:
Fund | Type of Transaction | October 31, 2020 Shares/Fair Value | Purchases | Sales | April 30, 2021 Shares/Fair Value | |||||||||||||||||||||||||||||
Balanced | Direct | $ | 3,476,667 | $ | 42,605,229 | $ | 40,045,233 | $ | 6,036,663 | |||||||||||||||||||||||||
Balanced | Securities Lending | - | 4,482,127 | 3,627,253 | 854,874 | |||||||||||||||||||||||||||||
Mid-Cap Value | Direct | 10,068,703 | 227,835,947 | 228,004,331 | 9,900,319 | |||||||||||||||||||||||||||||
Mid-Cap Value | Securities Lending | - | 9,187,295 | 9,187,295 | - |
59
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
9. Securities Lending
The Funds may lend their securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked-to-market daily. Daily mark-to-market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark-to-market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.
To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Funds’ Schedule of Investments and the collateral is shown on the Statements of Assets and Liabilities as a payable.
Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Funds, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.
While securities are on loan, the Funds continue to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Funds would be subject to on the dividend.
Securities lending transactions pose certain risks to the Funds, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Funds could also experience delays and costs in gaining access to the collateral. The Funds bear the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.
As of April 30, 2021, the value of outstanding securities on loan and the value of collateral were as follows:
Fund | Market Value of Securities on Loan |
| Cash Collateral Received |
| Non-Cash Collateral Received |
| Total Collateral Received | |||||||||||||||||||||
Balanced | $ | 1,122,657 | $ | 854,874 | $ | 298,235 | $ | 1,153,109 | ||||||||||||||||||||
Mid-Cap Value | 2,696,756 | - | 2,760,023 | 2,760,023 |
Cash collateral is listed on the Funds’ Schedules of Investments and is shown on the Statements of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statements of Operations.
Non-cash collateral received by the Funds may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Funds’ Schedules of Investments or Statements of Assets and Liabilities.
60
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
10. Borrowing Arrangements
Effective November 12, 2020 (the “Effective Date”), the Funds, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, 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 renewed 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) Overnight Bank Funding Rate (”OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 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 “Loan expense” on the Statements of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.
During the period ended April 30, 2021, 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:
R5 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | �� | ||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 71,001 | $ | 1,101,234 | 720,836 | $ | 10,869,956 | ||||||||||||||||||||||
Reinvestment of dividends | 178,758 | 2,606,723 | 231,222 | 3,577,398 | ||||||||||||||||||||||||
Shares redeemed | (449,952 | ) | (6,919,881 | ) | (2,234,516 | ) | (34,374,196 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (200,193 | ) | $ | (3,211,924 | ) | (1,282,458 | ) | $ | (19,926,842 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 261,741 | $ | 4,096,632 | 694,721 | $ | 10,316,369 | ||||||||||||||||||||||
Reinvestment of dividends | 309,357 | 4,544,619 | 298,946 | 4,637,904 | ||||||||||||||||||||||||
Shares redeemed | (1,457,931 | ) | (22,756,616 | ) | (1,803,400 | ) | (25,905,317 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (886,833 | ) | $ | (14,115,365 | ) | (809,733 | ) | $ | (10,951,044 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 832,208 | $ | 11,295,902 | 923,920 | $ | 11,824,522 | ||||||||||||||||||||||
Reinvestment of dividends | 780,650 | 9,683,505 | 641,609 | 8,601,456 | ||||||||||||||||||||||||
Shares redeemed | (1,054,160 | ) | (13,923,986 | ) | (2,760,850 | ) | (35,445,519 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 558,698 | $ | 7,055,421 | (1,195,321 | ) | $ | (15,019,541 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 7,400 | $ | 106,563 | 22,115 | $ | 314,694 | ||||||||||||||||||||||
Reinvestment of dividends | 16,807 | 226,100 | 12,577 | 180,473 | ||||||||||||||||||||||||
Shares redeemed | (16,382 | ) | (239,824 | ) | (296,651 | ) | (4,511,571 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 7,825 | $ | 92,839 | (261,959 | ) | $ | (4,016,404 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 61,868 | $ | 825,640 | 164,986 | $ | 2,093,500 | ||||||||||||||||||||||
Reinvestment of dividends | 112,216 | 1,387,328 | 110,056 | 1,470,053 | ||||||||||||||||||||||||
Shares redeemed | (316,437 | ) | (4,223,854 | ) | (369,930 | ) | (4,745,607 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (142,353 | ) | $ | (2,010,886 | ) | (94,888 | ) | $ | (1,182,054 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Balanced Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 25,975 | $ | 356,880 | 207,575 | $ | 2,605,143 | ||||||||||||||||||||||
Reinvestment of dividends | 246,960 | 3,088,485 | 191,599 | 2,604,869 | ||||||||||||||||||||||||
Shares redeemed | (273,235 | ) | (3,696,304 | ) | (617,259 | ) | (7,825,914 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (300 | ) | $ | (250,939 | ) | (218,085 | ) | $ | (2,615,902 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
R5 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 721,484 | $ | 12,710,466 | 1,887,260 | $ | 23,300,801 | ||||||||||||||||||||||
Reinvestment of dividends | 98,960 | 1,574,461 | 146,744 | 2,365,592 | ||||||||||||||||||||||||
Shares redeemed | (2,155,643 | ) | (36,228,914 | ) | (7,448,022 | ) | (100,146,293 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,335,199 | ) | $ | (21,943,987 | ) | (5,414,018 | ) | $ | (74,479,900 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 137,698 | $ | 2,459,660 | 1,035,791 | $ | 11,573,165 | ||||||||||||||||||||||
Reinvestment of dividends | 55,418 | 874,492 | 84,354 | 1,348,865 | ||||||||||||||||||||||||
Shares redeemed | (1,239,788 | ) | (20,310,857 | ) | (2,933,125 | ) | (36,543,666 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,046,672 | ) | $ | (16,976,705 | ) | (1,812,980 | ) | $ | (23,621,636 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
62
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 374,840 | $ | 6,446,288 | 1,905,185 | $ | 23,857,782 | ||||||||||||||||||||||
Reinvestment of dividends | 31,633 | 513,090 | 186,420 | 3,042,503 | ||||||||||||||||||||||||
Shares redeemed | (8,800,957 | ) | (145,749,445 | ) | (5,424,561 | ) | (70,707,388 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (8,394,484 | ) | $ | (138,790,067 | ) | (3,332,956 | ) | $ | (43,807,103 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 4,265 | $ | 69,331 | 48,344 | $ | 648,990 | ||||||||||||||||||||||
Reinvestment of dividends | 1,219 | 19,048 | 2,384 | 37,713 | ||||||||||||||||||||||||
Shares redeemed | (70,533 | ) | (1,191,364 | ) | (164,068 | ) | (2,191,914 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (65,049 | ) | $ | (1,102,985 | ) | (113,340 | ) | $ | (1,505,211 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 43,660 | $ | 722,090 | 64,954 | $ | 824,817 | ||||||||||||||||||||||
Reinvestment of dividends | 3,860 | 60,258 | 2,289 | 36,239 | ||||||||||||||||||||||||
Shares redeemed | (37,213 | ) | (623,097 | ) | (102,155 | ) | (1,300,626 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 10,307 | $ | 159,251 | (34,912 | ) | $ | (439,570 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 4,924 | $ | 86,132 | 13,300 | $ | 166,142 | ||||||||||||||||||||||
Reinvestment of dividends | 1,721 | 25,972 | 1,704 | 26,053 | ||||||||||||||||||||||||
Shares redeemed | (79,774 | ) | (1,276,984 | ) | (78,574 | ) | (923,215 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (73,129 | ) | $ | (1,164,880 | ) | (63,570 | ) | $ | (731,020 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
R6 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Mid-Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 231,945 | $ | 4,053,697 | 1,135,634 | $ | 12,772,985 | ||||||||||||||||||||||
Reinvestment of dividends | 13,733 | 218,896 | 3,542 | 57,138 | ||||||||||||||||||||||||
Shares redeemed | (172,844 | ) | (2,984,434 | ) | (661,613 | ) | (7,919,099 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase in shares outstanding | 72,834 | $ | 1,288,159 | 477,563 | $ | 4,911,024 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
12. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Funds’ financial statements through this date.
63
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
R5 ClassA B | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020C | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.35 | $ | 16.36 | $ | 16.20 | $ | 17.30 | $ | 15.26 | $ | 15.79 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.10 | 0.20 | 0.31 | 0.28 | 0.36 | 0.27 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.80 | (0.80 | ) | 1.23 | (0.10 | ) | 2.04 | 0.20 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.90 | (0.60 | ) | 1.54 | 0.18 | 2.40 | 0.47 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.11 | ) | (0.24 | ) | (0.26 | ) | (0.48 | ) | (0.36 | ) | (0.25 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.65 | ) | (1.17 | ) | (1.12 | ) | (0.80 | ) | - | (0.75 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.76 | ) | (1.41 | ) | (1.38 | ) | (1.28 | ) | (0.36 | ) | (1.00 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.49 | $ | 14.35 | $ | 16.36 | $ | 16.20 | $ | 17.30 | $ | 15.26 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnD | 28.86 | %E | (4.14 | )% | 10.89 | % | 0.84 | % | 15.82 | % | 3.30 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 22,522,432 | $ | 22,476,942 | $ | 46,593,155 | $ | 60,191,704 | $ | 88,015,702 | $ | 485,231,068 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.68 | %F | 0.88 | % | 0.66 | % | 0.62 | % | 0.59 | % | 0.62 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.68 | %F | 0.88 | % | 0.66 | % | 0.62 | % | 0.59 | % | 0.62 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.57 | %F | 1.82 | % | 2.24 | % | 1.95 | % | 1.80 | % | 1.90 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.57 | %F | 1.82 | % | 2.24 | % | 1.95 | % | 1.80 | % | 1.90 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 17 | %E | 82 | % | 68 | % | 28 | % | 32 | % | 16 | % |
A | Prior to February 28, 2020, the R5 Class was known as Institutional Class. |
B | On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class. |
C | On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
D | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
E | Not annualized. |
F | Annualized. |
See accompanying notes
64
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.46 | $ | 16.47 | $ | 16.31 | $ | 17.39 | $ | 15.30 | $ | 15.84 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.10 | 0.25 | 0.33 | 0.35 | 0.24 | 0.30 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.82 | (0.86 | ) | 1.20 | (0.16 | ) | 2.20 | 0.13 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.92 | (0.61 | ) | 1.53 | 0.19 | 2.44 | 0.43 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.10 | ) | (0.23 | ) | (0.25 | ) | (0.47 | ) | (0.35 | ) | (0.22 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.65 | ) | (1.17 | ) | (1.12 | ) | (0.80 | ) | - | (0.75 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.75 | ) | (1.40 | ) | (1.37 | ) | (1.27 | ) | (0.35 | ) | (0.97 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 16.63 | $ | 14.46 | $ | 16.47 | $ | 16.31 | $ | 17.39 | $ | 15.30 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 28.80 | %C | (4.17 | )% | 10.75 | % | 0.88 | % | 16.05 | % | 3.06 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 35,338,396 | $ | 43,550,846 | $ | 62,956,422 | $ | 71,296,735 | $ | 64,926,394 | $ | 28,843,268 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.74 | %D | 0.96 | % | 0.74 | % | 0.70 | % | 0.68 | % | 0.72 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.74 | %D | 0.96 | % | 0.74 | % | 0.70 | % | 0.68 | % | 0.72 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.50 | %D | 1.71 | % | 2.15 | % | 1.86 | % | 1.67 | % | 1.95 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.50 | %D | 1.71 | % | 2.15 | % | 1.86 | % | 1.67 | % | 1.95 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 17 | %C | 82 | % | 68 | % | 28 | % | 32 | % | 16 | % |
A | On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
See accompanying notes
65
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.43 | $ | 14.36 | $ | 14.41 | $ | 15.51 | $ | 13.71 | $ | 14.30 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.18 | 0.03 | 0.18 | 0.20 | 0.15 | 0.18 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.14 | (0.58 | ) | 1.11 | (0.07 | ) | 1.96 | 0.18 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.32 | (0.55 | ) | 1.29 | 0.13 | 2.11 | 0.36 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.21 | ) | (0.22 | ) | (0.43 | ) | (0.31 | ) | (0.20 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.65 | ) | (1.17 | ) | (1.12 | ) | (0.80 | ) | - | (0.75 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.74 | ) | (1.38 | ) | (1.34 | ) | (1.23 | ) | (0.31 | ) | (0.95 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 14.01 | $ | 12.43 | $ | 14.36 | $ | 14.41 | $ | 15.51 | $ | 13.71 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 28.62 | %C | (4.41 | )% | 10.50 | % | 0.62 | % | 15.52 | % | 2.85 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 84,800,665 | $ | 68,284,615 | $ | 96,065,263 | $ | 107,677,984 | $ | 124,143,894 | $ | 127,235,433 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.98 | %D | 1.20 | % | 0.97 | % | 0.95 | % | 0.89 | % | 0.95 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.98 | %D | 1.20 | % | 0.97 | % | 0.95 | % | 0.89 | % | 0.95 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.27 | %D | 1.47 | % | 1.92 | % | 1.62 | % | 1.48 | % | 1.72 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.27 | %D | 1.47 | % | 1.92 | % | 1.62 | % | 1.48 | % | 1.72 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 17 | %C | 82 | % | 68 | % | 28 | % | 32 | % | 16 | % |
A | On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
See accompanying notes
66
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.35 | $ | 15.34 | $ | 15.29 | $ | 16.38 | $ | 14.46 | $ | 15.02 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.11 | 0.18 | B | 0.26 | 0.16 | 0.21 | 0.24 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.47 | (0.81 | ) | 1.11 | (0.06 | ) | 1.99 | 0.12 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.58 | (0.63 | ) | 1.37 | 0.10 | 2.20 | 0.36 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.08 | ) | (0.19 | ) | (0.20 | ) | (0.39 | ) | (0.28 | ) | (0.17 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.65 | ) | (1.17 | ) | (1.12 | ) | (0.80 | ) | - | (0.75 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.73 | ) | (1.36 | ) | (1.32 | ) | (1.19 | ) | (0.28 | ) | (0.92 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 15.20 | $ | 13.35 | $ | 15.34 | $ | 15.29 | $ | 16.38 | $ | 14.46 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 28.55 | %D | (4.65 | )% | 10.41 | % | 0.42 | % | 15.31 | % | 2.71 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 2,123,353 | $ | 1,760,622 | $ | 6,039,168 | $ | 6,174,284 | $ | 10,944,675 | $ | 10,603,004 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.14 | %E | 1.36 | % | 1.14 | % | 1.12 | % | 1.08 | % | 1.12 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.14 | %E | 1.36 | % | 1.14 | % | 1.12 | % | 1.08 | % | 1.12 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.11 | %E | 1.29 | % | 1.76 | % | 1.45 | % | 1.29 | % | 1.55 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.11 | %E | 1.29 | % | 1.76 | % | 1.45 | % | 1.29 | % | 1.55 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 17 | %D | 82 | % | 68 | % | 28 | % | 32 | % | 16 | % |
A | On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
B | Per share amounts have been calculated using the average shares method. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
See accompanying notes
67
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.39 | $ | 14.33 | $ | 14.38 | $ | 15.48 | $ | 13.69 | $ | 14.27 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.01 | 0.15 | 0.22 | 0.22 | 0.16 | 0.21 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.31 | (0.71 | ) | 1.07 | (0.07 | ) | 1.93 | 0.15 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.32 | (0.56 | ) | 1.29 | 0.15 | 2.09 | 0.36 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.21 | ) | (0.22 | ) | (0.45 | ) | (0.30 | ) | (0.19 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.65 | ) | (1.17 | ) | (1.12 | ) | (0.80 | ) | - | (0.75 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.74 | ) | (1.38 | ) | (1.34 | ) | (1.25 | ) | (0.30 | ) | (0.94 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 13.97 | $ | 12.39 | $ | 14.33 | $ | 14.38 | $ | 15.48 | $ | 13.69 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 28.69 | %C | (4.49 | )% | 10.54 | % | 0.73 | % | 15.36 | % | 2.84 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 12,507,953 | $ | 12,863,938 | $ | 16,228,685 | $ | 18,121,273 | $ | 21,934,880 | $ | 24,892,096 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.00 | %D | 1.21 | % | 1.01 | % | 0.91 | % | 0.99 | % | 1.02 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.00 | %D | 1.21 | % | 1.01 | %E | 0.83 | % | 0.99 | % | 1.02 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.25 | %D | 1.46 | % | 1.88 | % | 1.66 | % | 1.39 | % | 1.64 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.25 | %D | 1.46 | % | 1.88 | % | 1.74 | % | 1.39 | % | 1.64 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 17 | %C | 82 | % | 68 | % | 28 | % | 32 | % | 16 | % |
A | On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
E | This ratio does not include a voluntary reimbursement of service fees as included in the prior year. |
See accompanying notes
68
American Beacon Balanced FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.53 | $ | 14.48 | $ | 14.55 | $ | 15.64 | $ | 13.83 | $ | 14.43 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.04 | 0.05 | 0.10 | 0.13 | 0.08 | 0.12 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.26 | (0.70 | ) | 1.09 | (0.09 | ) | 1.92 | 0.13 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 3.30 | (0.65 | ) | 1.19 | 0.04 | 2.00 | 0.25 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.04 | ) | (0.13 | ) | (0.14 | ) | (0.33 | ) | (0.19 | ) | (0.10 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (1.65 | ) | (1.17 | ) | (1.12 | ) | (0.80 | ) | - | (0.75 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (1.69 | ) | (1.30 | ) | (1.26 | ) | (1.13 | ) | (0.19 | ) | (0.85 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 14.14 | $ | 12.53 | $ | 14.48 | $ | 14.55 | $ | 15.64 | $ | 13.83 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 28.14 | %C | (5.09 | )% | 9.63 | % | 0.04 | % | 14.50 | % | 2.03 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 27,028,404 | $ | 23,951,798 | $ | 30,848,500 | $ | 36,046,543 | $ | 42,575,983 | $ | 40,827,570 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.73 | %D | 1.95 | % | 1.76 | % | 1.66 | % | 1.73 | % | 1.77 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.73 | %D | 1.95 | % | 1.76 | %E | 1.54 | % | 1.73 | % | 1.77 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.51 | %D | 0.72 | % | 1.13 | % | 0.91 | % | 0.63 | % | 0.89 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.51 | %D | 0.72 | % | 1.13 | % | 1.02 | % | 0.63 | % | 0.89 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 17 | %C | 82 | % | 68 | % | 28 | % | 32 | % | 16 | % |
A | On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
E | This ratio does not include a voluntary reimbursement of service fees as included in the prior year. |
See accompanying notes
69
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R5 ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.19 | $ | 15.41 | $ | 15.52 | $ | 17.25 | $ | 14.03 | $ | 14.62 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.14 | B | 0.33 | 0.25 | 0.21 | 0.16 | 0.26 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 6.92 | (2.29 | ) | 0.65 | (1.34 | ) | 3.28 | 0.03 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 7.06 | (1.96 | ) | 0.90 | (1.13 | ) | 3.44 | 0.29 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.31 | ) | (0.26 | ) | (0.22 | ) | (0.16 | ) | (0.22 | ) | (0.17 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (0.79 | ) | (0.44 | ) | - | (0.71 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.31 | ) | (0.26 | ) | (1.01 | ) | (0.60 | ) | (0.22 | ) | (0.88 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.94 | $ | 13.19 | $ | 15.41 | $ | 15.52 | $ | 17.25 | $ | 14.03 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 54.13 | %D | (13.03 | )% | 7.08 | % | (6.89 | )% | 24.71 | % | 2.39 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 83,097,699 | $ | 72,565,048 | $ | 168,201,120 | $ | 248,752,034 | $ | 265,934,589 | $ | 195,472,135 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.01 | %E | 0.95 | % | 0.93 | % | 0.85 | % | 0.89 | % | 0.89 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.97 | %EF | 0.95 | % | 0.93 | % | 0.85 | % | 0.89 | % | 0.89 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.19 | %E | 1.45 | % | 1.40 | % | 1.19 | % | 1.06 | % | 1.65 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.23 | %E | 1.45 | % | 1.40 | % | 1.19 | % | 1.06 | % | 1.65 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %D | 35 | % | 30 | % | 34 | % | 28 | % | 27 | % |
A | Prior to February 28, 2020, the R5 Class was known as Institutional Class. |
B | Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0389. |
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 the change in the contractual expense caps on February 28, 2021. |
See accompanying notes
70
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.07 | $ | 15.27 | $ | 15.39 | $ | 17.11 | $ | 13.92 | $ | 14.52 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.12 | A | 0.19 | 0.22 | 0.19 | 0.15 | 0.23 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 6.87 | (2.14 | ) | 0.65 | (1.32 | ) | 3.25 | 0.05 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 6.99 | (1.95 | ) | 0.87 | (1.13 | ) | 3.40 | 0.28 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.29 | ) | (0.25 | ) | (0.20 | ) | (0.15 | ) | (0.21 | ) | (0.17 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (0.79 | ) | (0.44 | ) | - | (0.71 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.29 | ) | (0.25 | ) | (0.99 | ) | (0.59 | ) | (0.21 | ) | (0.88 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.77 | $ | 13.07 | $ | 15.27 | $ | 15.39 | $ | 17.11 | $ | 13.92 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 54.09 | %C | (13.08 | )% | 6.97 | % | (6.96 | )% | 24.60 | % | 2.29 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 53,185,927 | $ | 48,840,223 | $ | 84,763,978 | $ | 96,799,413 | $ | 100,190,167 | $ | 68,994,531 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.08 | %D | 1.03 | % | 0.98 | % | 0.93 | % | 0.97 | % | 0.96 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.04 | %DE | 1.03 | % | 0.98 | % | 0.93 | % | 0.97 | % | 0.96 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.13 | %D | 1.37 | % | 1.36 | % | 1.11 | % | 0.98 | % | 1.59 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.17 | %D | 1.37 | % | 1.36 | % | 1.11 | % | 0.98 | % | 1.59 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %C | 35 | % | 30 | % | 34 | % | 28 | % | 27 | % |
A | Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0436. |
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 the change in the contractual expense caps on February 28, 2021. |
See accompanying notes
71
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.32 | $ | 15.56 | $ | 15.65 | $ | 17.40 | $ | 14.14 | $ | 14.73 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.43 | A | 0.17 | 0.18 | 0.16 | 0.14 | 0.21 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 6.72 | (2.20 | ) | 0.69 | (1.34 | ) | 3.31 | 0.05 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 7.15 | (2.03 | ) | 0.87 | (1.18 | ) | 3.45 | 0.26 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.16 | ) | (0.21 | ) | (0.17 | ) | (0.13 | ) | (0.19 | ) | (0.14 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (0.79 | ) | (0.44 | ) | - | (0.71 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.16 | ) | (0.21 | ) | (0.96 | ) | (0.57 | ) | (0.19 | ) | (0.85 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 20.31 | $ | 13.32 | $ | 15.56 | $ | 15.65 | $ | 17.40 | $ | 14.14 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
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|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 54.01 | %C | (13.30 | )% | 6.79 | % | (7.13 | )% | 24.52 | % | 2.12 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 61,634,867 | $ | 152,245,804 | $ | 229,639,964 | $ | 379,123,913 | $ | 274,552,551 | $ | 243,421,035 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.26 | %D | 1.21 | % | 1.18 | % | 1.12 | % | 1.09 | % | 1.12 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.19 | %DE | 1.21 | % | 1.18 | % | 1.12 | % | 1.09 | % | 1.12 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.32 | %D | 1.19 | % | 1.12 | % | 0.92 | % | 0.86 | % | 1.44 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.39 | %D | 1.19 | % | 1.12 | % | 0.92 | % | 0.86 | % | 1.44 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %C | 35 | % | 30 | % | 34 | % | 28 | % | 27 | % |
A | Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0416. |
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 the change in the contractual expense caps on February 28, 2021. |
See accompanying notes
72
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.88 | $ | 15.06 | $ | 15.17 | $ | 16.83 | $ | 13.69 | $ | 14.27 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
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|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.05 | A B | 0.16 | 0.15 | 0.10 | 0.10 | 0.16 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 6.81 | (2.16 | ) | 0.66 | (1.29 | ) | 3.18 | 0.05 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 6.86 | (2.00 | ) | 0.81 | (1.19 | ) | 3.28 | 0.21 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.18 | ) | (0.13 | ) | (0.03 | ) | (0.14 | ) | (0.08 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (0.79 | ) | (0.44 | ) | - | (0.71 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.20 | ) | (0.18 | ) | (0.92 | ) | (0.47 | ) | (0.14 | ) | (0.79 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.54 | $ | 12.88 | $ | 15.06 | $ | 15.17 | $ | 16.83 | $ | 13.69 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 53.64 | %D | (13.51 | )% | 6.50 | % | (7.38 | )% | 24.10 | % | 1.82 | % | ||||||||||||||||||||||||||||||||
|
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|
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|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 619,695 | $ | 1,245,906 | $ | 3,163,999 | $ | 3,597,339 | $ | 3,682,231 | $ | 6,622,356 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.65 | %E | 1.53 | % | 1.45 | % | 1.39 | % | 1.40 | % | 1.40 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.59 | %E F | 1.53 | % | 1.45 | % | 1.39 | % | 1.40 | % | 1.40 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.55 | %E | 0.92 | % | 0.90 | % | 0.64 | % | 0.55 | % | 1.16 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.61 | %E | 0.92 | % | 0.90 | % | 0.64 | % | 0.55 | % | 1.16 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %D | 35 | % | 30 | % | 34 | % | 28 | % | 27 | % |
A | Per share amounts have been calculated using the average shares method. |
B | Net investment income includes significant dividend payment from Quarte Retail, Inc. amounting to $0.0193. |
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 the change in the contractual expense caps on February 28, 2021. |
See accompanying notes
73
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.91 | $ | 15.03 | $ | 15.15 | $ | 16.84 | $ | 13.70 | $ | 14.28 | ||||||||||||||||||||||||||||||||
|
|
|
|
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|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.03 | A | 0.23 | 0.49 | 0.18 | 0.13 | 0.18 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 6.85 | (2.20 | ) | 0.32 | (1.36 | ) | 3.18 | 0.05 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 6.88 | (1.97 | ) | 0.81 | (1.18 | ) | 3.31 | 0.23 | ||||||||||||||||||||||||||||||||||||
�� |
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.26 | ) | (0.15 | ) | (0.14 | ) | (0.07 | ) | (0.17 | ) | (0.10 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (0.79 | ) | (0.44 | ) | - | (0.71 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.26 | ) | (0.15 | ) | (0.93 | ) | (0.51 | ) | (0.17 | ) | (0.81 | ) | ||||||||||||||||||||||||||||||||
|
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|
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|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.53 | $ | 12.91 | $ | 15.03 | $ | 15.15 | $ | 16.84 | $ | 13.70 | ||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||
Total returnB | 53.84 | %C | (13.31 | )% | 6.57 | % | (7.32 | )% | 24.26 | % | 1.98 | % | ||||||||||||||||||||||||||||||||
|
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|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 4,389,213 | $ | 2,767,845 | $ | 3,748,595 | $ | 12,080,510 | $ | 18,170,218 | $ | 19,486,655 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.39 | %D | 1.30 | % | 1.35 | % | 1.25 | % | 1.27 | % | 1.26 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.34 | %D E | 1.30 | % | 1.35 | % | 1.25 | % | 1.27 | % | 1.26 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.72 | %D | 1.09 | % | 0.94 | % | 0.78 | % | 0.69 | % | 1.30 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.77 | %D | 1.09 | % | 0.94 | % | 0.78 | % | 0.69 | % | 1.30 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %C | 35 | % | 30 | % | 34 | % | 28 | % | 27 | % |
A | Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0356. |
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 the change in the contractual expense caps on February 28, 2021. |
See accompanying notes
74
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.39 | $ | 14.49 | $ | 14.60 | $ | 16.27 | $ | 13.26 | $ | 13.87 | ||||||||||||||||||||||||||||||||
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|
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|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.01 | AB | 0.01 | 0.02 | 0.03 | (0.03 | ) | 0.07 | ||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 6.56 | (2.02 | ) | 0.69 | (1.26 | ) | 3.11 | 0.06 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 6.57 | (2.01 | ) | 0.71 | (1.23 | ) | 3.08 | 0.13 | ||||||||||||||||||||||||||||||||||||
|
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|
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|
|
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|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.13 | ) | (0.09 | ) | (0.03 | ) | - | (0.07 | ) | (0.03 | ) | |||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (0.79 | ) | (0.44 | ) | - | (0.71 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.13 | ) | (0.09 | ) | (0.82 | ) | (0.44 | ) | (0.07 | ) | (0.74 | ) | ||||||||||||||||||||||||||||||||
|
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|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 18.83 | $ | 12.39 | $ | 14.49 | $ | 14.60 | $ | 16.27 | $ | 13.26 | ||||||||||||||||||||||||||||||||
|
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|
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|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 53.31 | %D | (13.99 | )% | 5.94 | % | (7.85 | )% | 23.27 | % | 1.19 | % | ||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 3,079,517 | $ | 2,932,329 | $ | 4,349,946 | $ | 5,840,412 | $ | 6,520,983 | $ | 6,030,130 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 2.12 | %E | 2.05 | % | 2.02 | % | 1.87 | % | 2.04 | % | 2.04 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 2.08 | %E F | 2.05 | % | 2.02 | % | 1.87 | % | 2.04 | % | 2.04 | % | ||||||||||||||||||||||||||||||||
Net investment income (loss), before expense reimbursements | 0.08 | %E | 0.35 | % | 0.32 | % | 0.17 | % | (0.09 | )% | 0.53 | % | ||||||||||||||||||||||||||||||||
Net investment income (loss), net of reimbursements | 0.12 | %E | 0.35 | % | 0.32 | % | 0.17 | % | (0.09 | )% | 0.53 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %D | 35 | % | 30 | % | 34 | % | 28 | % | 27 | % |
A | Per share amounts have been calculated using the average shares method. |
B | Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0324. |
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 the change in the contractual expense caps on February 28, 2021. |
See accompanying notes
75
American Beacon Mid-Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | February 28, 2018A to October 31, | ||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.21 | $ | 15.42 | $ | 15.52 | $ | 16.94 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||
Net investment income | 0.09 | B | 0.28 | 0.20 | 0.10 | |||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 7.00 | (2.23 | ) | 0.71 | (1.52 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total income (loss) from investment operations | 7.09 | (1.95 | ) | 0.91 | (1.42 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||
Dividends from net investment income | (0.32 | ) | (0.26 | ) | (0.22 | ) | - | |||||||||||||||||||||
Distributions from net realized gains | - | - | (0.79 | ) | - | |||||||||||||||||||||||
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Total distributions | (0.32 | ) | (0.26 | ) | (1.01 | ) | - | |||||||||||||||||||||
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Net asset value, end of period | $ | 19.98 | $ | 13.21 | $ | 15.42 | $ | 15.52 | ||||||||||||||||||||
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Total returnC | 54.25 | %D | (12.93 | )% | 7.15 | % | (8.38 | )%D | ||||||||||||||||||||
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Ratios and supplemental data: | ||||||||||||||||||||||||||||
Net assets, end of period | $ | 13,914,905 | $ | 8,239,279 | $ | 2,253,328 | $ | 191,772 | ||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.98 | %E | 0.96 | % | 0.90 | % | 3.09 | %E | ||||||||||||||||||||
Expenses, net of reimbursements | 0.88 | %E | 0.87 | % | 0.83 | % | 0.88 | %E | ||||||||||||||||||||
Net investment income (loss), before expense reimbursements | 1.13 | %E | 1.34 | % | 1.51 | % | (0.88 | )%E | ||||||||||||||||||||
Net investment income, net of reimbursements | 1.23 | %E | 1.43 | % | 1.58 | % | 1.32 | %E | ||||||||||||||||||||
Portfolio turnover rate | 13 | %D | 35 | % | 30 | % | 34 | %D |
A | Commencement of operations. |
B | Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0467. |
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
76
Disclosure Regarding Approval of Management and Investment Advisory Agreements (Unaudited)
Approval related to the American Beacon Mid-Cap Value Fund
At their June 3-4, 2020 meetings, the Board of Trustees (the “Board”) of American Beacon Funds (the “Trust”) considered the approval of an amendment to an existing investment advisory agreement (the “Agreement”) on behalf of the American Beacon Mid-Cap Value Fund (the “Fund”) to reflect a reduction in the fee rate payable to WEDGE Capital Management LLP (“WEDGE”), which is one of the Fund’s investment advisers. In particular, the Board considered an amendment to the Agreement among American Beacon Advisors, Inc. (the “Manager”), WEDGE and the Trust, on behalf of the Fund (the “Amendment”).
The Board determined that it did not need to consider certain factors that it typically considers during its review of investment advisory agreements because the Board had reviewed, among other matters, the nature, extent and quality of services being provided to the Fund by WEDGE at the Board’s May 14, 2020 and June 3-4, 2020 meetings in connection with its annual renewal of the Agreement. Additionally, the Board considered that, other than reducing the sub-advisory fee rate included in the Agreement, the Amendment would not result in any other changes to the information considered by the Board during its annual review meetings on May 14, 2020 and June 3-4, 2020, including the nature, extent and quality of services provided to the Fund and the personnel providing day-to-day services for the Fund.
Based on the various considerations described above, the Board, including a majority of Trustees who are not “interested persons” of the Fund, the Manager, or WEDGE, as that term is defined in the Investment Company Act of 1940, as amended, concluded that the proposed investment advisory fee rate is fair and reasonable and the approval of the Amendment is in the best interests of the Fund, and approved the Amendment.
Approvals of Investment Advisory Agreements Related to American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund
At its November 10-11, 2020 meetings, the Board of Trustees (“Board”) considered the approval of new investment advisory agreements among American Beacon Advisors, Inc. (“Manager”), Barrow, Hanley, Mewhinney & Strauss, LLC (“Barrow”), and American Beacon Funds ( “Trust”), on behalf of the American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund (each a “Fund” and collectively, the “Funds”) (“New Agreements”). The Board was advised that Barrow was expected to undergo a change of control later in the fourth quarter of 2020, and that the change in control would result in an assignment and the automatic termination of the existing Investment Advisory Agreements among the Manager, Barrow and the Trust, on behalf of the Funds (“Existing Agreements”).
Prior to the November 10-11, 2020 meetings, information was provided to the Board by Barrow and the Manager regarding the change of control and the New Agreements. In connection with its evaluation of the New Agreements, the Board considered, among other matters, that (1) the New Agreements would contain the same substantive terms and conditions as the Existing Agreements, (2) the services to be provided by Barrow to the Funds and the fee rates to be paid by the Funds to Barrow would remain unchanged, and (3) the individuals who currently provide portfolio management services to the Funds would remain the same after the change of control. In addition, the Board considered certain information provided by Barrow and the Manager in connection with the renewal of the Existing Agreements, in determining whether to approve the New Agreements.
Based on the foregoing considerations, the Board, including a majority of Trustees who are not “interested persons” of the Funds, the Manager or Barrow, as that term is defined in the Investment Company Act of 1940, as amended, concluded that the approval of the New Agreements was in the best interests of the Funds and approved the New Agreements.
77
Disclosure Regarding Liquidity Risk Management Program
Rule 22e-4 under the Investment Company Act of 1940, as amended (“Rule 22e-4”), requires open-end registered investment companies (other than money market funds) to adopt and implement a written liquidity risk management program that is reasonably designed to assess and manage liquidity risk. The Fund has adopted a Liquidity Risk Management Program (the “Program”) that is designed to assess and manage liquidity risk, which is the risk that the Fund could not meet requests to redeem its shares without significant dilution of the remaining shareholders’ interests in the Fund. Pursuant to Rule 22e-4, the Program includes the following elements:
• | Assessment, management, and periodic review of liquidity risk; |
• | Classification of each of the Fund’s portfolio investments into one of four liquidity categories: highly liquid, moderately liquid, less liquid, and illiquid; |
• | Determination and review of a highly liquid investment minimum for any Fund that does not primarily hold assets that are highly liquid investments; |
• | Policies and procedures to respond to a shortfall in the highly liquid investment minimum, including associated reports to the Fund’s Board of Trustees (the “Board”) and the Securities and Exchange Commission (“SEC”); |
• | A prohibition against a Fund acquiring an illiquid investment if immediately after the acquisition the Fund would have more than 15% of its net assets invested in illiquid investments that are assets; |
• | Reporting of breaches of the illiquid investment prohibition to the Board and the SEC; and |
• | Policies and procedures regarding how and when a Fund will satisfy redemption requests by distributing portfolio securities or other assets. |
The Manager’s Liquidity Committee administers the Program and has provided quarterly reports to the Board regarding the Fund’s liquidity risk. In addition, at the Board’s March 3-4, 2021 meetings, the Board reviewed the Liquidity Committee’s written report (“Report”) that addressed the operation of the Program and assessed the adequacy and effectiveness of its implementation from January 1, 2020 through December 31, 2020 (the “review period”).
Key conclusions that the Liquidity Committee included in the Report are listed below:
• | The Program is reasonably designed to assess and manage the Fund’s liquidity risk. |
• | The operation of the Program was adequate during the review period. |
• | There were no material changes to the Program during the review period. |
• | The Fund included in this shareholder report was deemed to primarily hold assets that are highly liquid, and no highly liquid investment minimum was recommended. |
• | The Program was effectively implemented by the Liquidity Committee during the review period. |
• | Administration of the Program by the Liquidity Committee continues to be appropriate. |
78
Delivery of Documents
Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
To obtain more information about the Fund:
![]() | ![]() | |
By E-mail: | On the Internet: | |
american_beacon.funds@ambeacon.com | Visit our website at www.americanbeaconfunds.com | |
By Telephone: Call (800) 658-5811 | By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 | |
Availability of Quarterly Portfolio Schedules | Availability of Proxy Voting Policy and Records | |
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the end of each fiscal quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month. | A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009. |
Fund Service Providers:
CUSTODIAN State Street Bank and Trust 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 Balanced Fund and American Beacon Mid-Cap Value Fund are service marks of American Beacon Advisors, Inc.
SAR 04/21
About American Beacon Advisors
Since 1986, American Beacon Advisors, Inc. has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.
Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.
GARCIA HAMILTON QUALITY BOND FUND RISKS
The use of fixed-income securities entails interest rate and credit risks. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.
This may contain information obtained from third parties, including ratings from credit rating agencies such as Standard & Poor’s. Reproduction and distribution of third-party content in any form is prohibited except with the prior written permission of the related third party. Third-party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD-PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD-PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS.
Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes and should not be relied on as investment advice.
Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.
American Beacon Funds | April 30, 2021 |
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Financial Highlights: | ||||
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Back Cover |
![]() | Dear Shareholders,
Throughout this reporting period, the 24-hour news cycle has continued to be dominated by headlines related to the COVID-19 pandemic, ongoing global vaccination efforts, U.S. stimulus and infrastructure spending, and the reopening of our nation’s businesses and schools. After months of seclusion and uncertainty, we can finally see the proverbial light at the end of a tunnel – and a path forward to potentially brighter days.
However, during challenging times such as we’ve all experienced over the past year, the fear of loss can be a powerful emotion. And it can cause many individuals to make short-term investment decisions that have the potential to sink their long-term financial objectives. We encourage you to remain focused on achieving your long-term investment goals by working with |
financial professionals to develop a personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand crises. By staying the course, you will be better positioned to achieve enduring financial success.
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. 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 financial rewards.
Thank you for continuing your financial journey with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon Garcia Hamilton Quality Bond FundSM
Performance Overview
April 30, 2021 (Unaudited)
The Investor Class of the American Beacon Garcia Hamilton Quality Bond Fund (the “Fund”) returned -0.56% for the six months ended April 30, 2021. The Bloomberg Barclays U.S. Aggregate Bond Index (the “Index”) returned -1.52% for the same period.
Total Returns for the Period ended April 30, 2021 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Year | 5 Year | Since Inception | |||||||||||||||||||||||||||
R5 Class (1,4) | GHQIX | (0.37 | )% | 2.00 | % | 3.06 | % | 2.24 | % | 2.10 | % | |||||||||||||||||||||
Y Class (1,4) | GHQYX | (0.41 | )% | 1.91 | % | 2.96 | % | 2.14 | % | 2.00 | % | |||||||||||||||||||||
Investor Class (1,4) | GHQPX | (0.56 | )% | 1.71 | % | 2.63 | % | 1.85 | % | 1.72 | % | |||||||||||||||||||||
R6 Class (1,3,4) | GHQRX | (0.25 | )% | 2.14 | % | 3.09 | % | 2.26 | % | 2.12 | % | |||||||||||||||||||||
Bloomberg Barclays U.S. Aggregate Bond Index (2) | (1.52 | )% | (0.27 | )% | 5.19 | % | 3.19 | % | 3.21 | % |
* | Not Annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of the date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to each Class of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than the actual returns shown since inception. |
2. | The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”). BARCLAYS® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith. |
3. | Fund performance for the three-year, five-year and since inception periods represent the returns achieved by the R5 Class from 4/4/16 through 2/28/19, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/4/16. |
4. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor and R6 Class shares were 0.68%, 0.74%, 1.20% and 0.64%, 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 as longer-term bond yields finally began to rise. The Fund’s average duration of approximately 3 years during the period was well below the Index duration of over 6 years and protected the Fund as rates increased. For context, the yield on the 10-year U.S. Treasury ended the period at 1.63% (up from 0.87% at the beginning of the period), resulting in a -6.2% total return.
The credit markets fared much better than government bonds during the period as yield spreads continued to narrow. Corporate bonds benefitted from spread tightening as government stimulus and historic-low interest rates encouraged investors to reallocate into higher-yielding assets. Investment-grade credit spreads were back to the lows reached prior to the coronavirus outbreak, and lower-quality issuers outperformed higher-quality issuers as spreads tightened. The Fund benefitted from its overweight position in corporates, primarily in Financials, and held shorter-duration, floating-rate securities which outperformed as yields rose. Additionally, the Fund limited its corporate maturities to 10-years, which helped as longer maturities in the Index underperformed due to rising rates.
Given narrow credit spreads and rising yields, the Fund increased its holdings in U.S. government agency mortgages near period end in anticipation of a slowdown in refinancing activity following higher mortgage rates. Additionally, while not anticipated in the near term, the higher-quality agency issuers should offer more stability in the event of volatility in the credit markets.
2
American Beacon Garcia Hamilton Quality Bond FundSM
Performance Overview
April 30, 2021 (Unaudited)
The primary components of the Fund’s strategy are to actively manage duration, sector allocation and yield-curve exposures based on top-down views of the economy. The Fund invests in high-quality, low-volatility securities to provide the benefit of fixed-income investing when investors need it most. No derivatives, leverage, foreign currency or high-yield bonds are used in the Fund’s strategy.
Top Ten Holdings (% Net Assets) |
| |||||||
Federal Agricultural Mortgage Corp., 0.076%, Due 1/25/2022, (3-mo. USD LIBOR - 0.100%) | 5.6 | |||||||
Federal National Mortgage Association, 4.500%, Due 6/1/2039 | 4.7 | |||||||
Federal National Mortgage Association, 3.000%, Due 7/1/2040 | 4.0 | |||||||
U.S. Treasury Bill, 0.001%, Due 5/21/2021 | 4.0 | |||||||
Federal Home Loan Mortgage Corp., 4.000%, Due 12/1/2034 | 3.6 | |||||||
Federal National Mortgage Association, 4.000%, Due 6/1/2034 | 3.4 | |||||||
Federal Home Loan Mortgage Corp., 4.000%, Due 4/1/2039 | 3.3 | |||||||
American Express Co., 0.786%, Due 8/1/2022, (3-mo. USD LIBOR + 0.610%) | 3.2 | |||||||
Federal National Mortgage Association, 4.000%, Due 2/1/2034 | 3.1 | |||||||
Federal National Mortgage Association, 3.500%, Due 4/1/2040 | 3.0 | |||||||
Total Fund Holdings | 41 | |||||||
Sector Allocation (% Investments) | ||||||||
U.S. Agency Mortgage-Backed Obligations | 59.4 | |||||||
Financial | 18.4 | |||||||
U.S. Government Agency Obligations | 5.6 | |||||||
Industrial | 5.2 | |||||||
Technology | 4.4 | |||||||
U.S. Treasury Obligations | 4.0 | |||||||
Utilities | 1.9 | |||||||
Communications | 1.1 |
3
American Beacon Garcia Hamilton Quality Bond FundSM
Expense Examples
April 30, 2021 (Unaudited)
Fund Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees, if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from November 1, 2020 through April 30, 2021.
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 R5 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 R5 Classes that invest in the Funds through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.
You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Fund, such as sales charges (loads) or redemption fees, as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.
4
American Beacon Garcia Hamilton Quality Bond FundSM
Expense Examples
April 30, 2021 (Unaudited)
American Beacon Garcia Hamilton Quality Bond Fund |
| ||||||||||||||
Beginning Account Value 11/1/2020 | Ending Account Value 4/30/2021 | Expenses Paid During Period 11/1/2020-4/30/2021* | |||||||||||||
R5 Class | |||||||||||||||
Actual | $1,000.00 | $996.30 | $2.23 | ||||||||||||
Hypothetical** | $1,000.00 | $1,022.56 | $2.26 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $995.90 | $2.67 | ||||||||||||
Hypothetical** | $1,000.00 | $1,022.12 | $2.71 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $994.40 | $4.10 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.68 | $4.16 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $997.50 | $2.03 | ||||||||||||
Hypothetical** | $1,000.00 | $1,022.76 | $2.06 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.45%, 0.54%, 0.83%, and 0.41% for the R5, Y, Investor, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon Garcia Hamilton Quality Bond FundSM
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
CORPORATE OBLIGATIONS - 30.85% | |||||||||||||||
Communications - 1.05% | |||||||||||||||
Media - 1.05% | |||||||||||||||
Walt Disney Co., 7.430%, Due 10/1/2026 | $ | 3,037,000 | $ | 3,974,036 | |||||||||||
|
| ||||||||||||||
Financial - 18.31% | |||||||||||||||
Banks - 13.99% | |||||||||||||||
Bank of America Corp., 3.974%, Due 2/7/2030, (3-mo. USD LIBOR + 1.210%)A | 6,113,000 | 6,814,055 | |||||||||||||
Citigroup, Inc., 3.980%, Due 3/20/2030, (3-mo. USD LIBOR + 1.338%)A | 6,030,000 | 6,722,008 | |||||||||||||
Goldman Sachs Group, Inc., 4.223%, Due 5/1/2029, (3-mo. USD LIBOR + 1.301%)A | 8,600,000 | 9,717,530 | |||||||||||||
JPMorgan Chase & Co., 2.083%, Due 4/22/2026, (SOFR + 1.850%)A | 7,450,000 | 7,700,007 | |||||||||||||
Morgan Stanley, 0.731%, Due 4/5/2024, (SOFR + 0.616%)A | 11,125,000 | 11,150,810 | |||||||||||||
Wells Fargo & Co., 4.478%, Due 4/4/2031, (3-mo. USD LIBOR + 3.770%)A | 9,125,000 | 10,553,688 | |||||||||||||
|
| ||||||||||||||
52,658,098 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 4.32% | |||||||||||||||
American Express Co., 0.786%, Due 8/1/2022, (3-mo. USD LIBOR + 0.610%)A | 12,120,000 | 12,185,575 | |||||||||||||
American Express Credit Corp., 0.884%, Due 3/3/2022, (3-mo. USD LIBOR + 0.700%)A | 4,029,000 | 4,049,139 | |||||||||||||
|
| ||||||||||||||
16,234,714 | |||||||||||||||
|
| ||||||||||||||
Total Financial | 68,892,812 | ||||||||||||||
|
| ||||||||||||||
Industrial - 5.17% | |||||||||||||||
Machinery - Diversified - 2.80% | |||||||||||||||
John Deere Capital Corp., 0.656%, Due 9/8/2022, (3-mo. USD LIBOR + 0.480%)A | 10,478,000 | 10,544,405 | |||||||||||||
|
| ||||||||||||||
Transportation - 2.37% | |||||||||||||||
United Parcel Service, Inc., 0.652%, Due 4/1/2023, (3-mo. USD LIBOR + 0.450%)A | 8,849,000 | 8,900,143 | |||||||||||||
|
| ||||||||||||||
Total Industrial | 19,444,548 | ||||||||||||||
|
| ||||||||||||||
Technology - 4.39% | |||||||||||||||
Computers - 2.30% | |||||||||||||||
International Business Machines Corp., 7.000%, Due 10/30/2025 | 6,860,000 | 8,659,432 | |||||||||||||
|
| ||||||||||||||
Semiconductors - 2.09% | |||||||||||||||
Intel Corp., 3.400%, Due 3/25/2025 | 7,170,000 | 7,846,932 | |||||||||||||
|
| ||||||||||||||
Total Technology | 16,506,364 | ||||||||||||||
|
| ||||||||||||||
Utilities - 1.93% | |||||||||||||||
Electric - 1.93% | |||||||||||||||
Duke Energy Progress LLC, 0.369%, Due 2/18/2022, Series A, (3-mo. USD LIBOR + 0.180%)A | 7,270,000 | 7,268,571 | |||||||||||||
|
| ||||||||||||||
Total Corporate Obligations (Cost $116,257,898) | 116,086,331 | ||||||||||||||
|
| ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 59.09% | |||||||||||||||
Federal Home Loan Mortgage Corp., | |||||||||||||||
4.000%, Due 12/1/2034 | 12,497,688 | 13,351,494 | |||||||||||||
4.500%, Due 12/1/2034 | 1,477,385 | 1,645,074 | |||||||||||||
4.000%, Due 8/1/2038 | 2,911,959 | 3,162,578 | |||||||||||||
4.000%, Due 4/1/2039 | 11,595,427 | 12,518,188 | |||||||||||||
3.500%, Due 8/1/2039 | 9,482,871 | 10,128,790 | |||||||||||||
3.500%, Due 10/1/2039 | 4,719,906 | 5,034,173 | |||||||||||||
3.500%, Due 8/1/2040 | 6,538,497 | 6,987,277 | |||||||||||||
Federal National Mortgage Association, | |||||||||||||||
5.500%, Due 1/1/2024B | 724,248 | 751,636 | |||||||||||||
3.500%, Due 9/1/2033 | 10,119,583 | 10,823,876 | |||||||||||||
4.000%, Due 2/1/2034B | 10,885,526 | 11,619,516 |
See accompanying notes
6
American Beacon Garcia Hamilton Quality Bond FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Principal Amount | Fair Value | ||||||||||||||
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 59.09% (continued) | |||||||||||||||
4.000%, Due 6/1/2034B | $ | 11,898,186 | $ | 12,707,123 | |||||||||||
3.500%, Due 5/1/2035B | 6,947,324 | 7,426,322 | |||||||||||||
3.500%, Due 3/1/2037 | 7,793,032 | 8,383,412 | |||||||||||||
3.500%, Due 4/1/2037 | 5,286,174 | 5,623,422 | |||||||||||||
3.500%, Due 5/1/2038B | 5,594,566 | 5,995,877 | |||||||||||||
4.000%, Due 5/1/2039 | 4,116,046 | 4,445,298 | |||||||||||||
4.500%, Due 6/1/2039B | 16,107,451 | 17,702,603 | |||||||||||||
4.000%, Due 9/1/2039 | 11,198,973 | 12,094,871 | |||||||||||||
3.500%, Due 10/1/2039 | 10,558,049 | 11,244,254 | |||||||||||||
3.500%, Due 11/1/2039B | 8,780,114 | 9,345,642 | |||||||||||||
3.500%, Due 3/1/2040B | 5,715,005 | 6,102,983 | |||||||||||||
3.500%, Due 4/1/2040B | 10,693,274 | 11,388,148 | |||||||||||||
3.000%, Due 7/1/2040B | 14,171,532 | 14,886,737 | |||||||||||||
4.000%, Due 8/1/2040B | 8,544,558 | 9,244,065 | |||||||||||||
4.000%, Due 6/1/2049B | 9,128,328 | 9,773,967 | |||||||||||||
|
| ||||||||||||||
Total U.S. Agency Mortgage-Backed Obligations (Cost $221,095,151) | 222,387,326 | ||||||||||||||
|
| ||||||||||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS - 5.56% (Cost $20,905,000) | |||||||||||||||
Federal Agricultural Mortgage Corp., 0.076%, Due 1/25/2022, (3-mo. USD LIBOR - 0.100%)A | 20,905,000 | 20,901,924 | |||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 4.01% (Cost $15,099,993) | |||||||||||||||
U.S. Treasury Obligations - 4.01% | |||||||||||||||
U.S. Treasury Bill, 0.001%, Due 5/20/2021 | 15,100,000 | 15,099,985 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 99.51% (Cost $373,358,042) | 374,475,566 | ||||||||||||||
OTHER ASSETS, NET OF LIABILITIES - 0.49% | 1,860,982 | ||||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 376,336,548 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on April 30, 2021.
B 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.
LIBOR - London Interbank Offered Rate.
LLC - Limited Liability Company.
PRIME - A rate, charged by banks, based on the U.S. Federal Funds rate.
SOFR - Secured Overnight Financing Rate.
USD - United States Dollar.
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2021, the investments were classified as described below:
Garcia Hamilton Quality Bond Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets |
| |||||||||||||||||||||||||||
Corporate Obligations | $ | - | $ | 116,086,331 | $ | - | $ | 116,086,331 | ||||||||||||||||||||
U.S. Agency Mortgage-Backed Obligations | - | 222,387,326 | - | 222,387,326 | ||||||||||||||||||||||||
U.S. Government Agency Obligations | - | 20,901,924 | - | 20,901,924 | ||||||||||||||||||||||||
Short-Term Investments | - | 15,099,985 | - | 15,099,985 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | - | $ | 374,475,566 | $ | - | $ | 374,475,566 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the period ended April 30, 2021, there were no transfers into or out of Level 3.
See accompanying notes
7
American Beacon Garcia Hamilton Quality Bond FundSM
Statement of Assets and Liabilities
April 30, 2021 (Unaudited)
Assets: |
| |||
Investments in unaffiliated securities, at fair value† | $ | 374,475,566 | ||
Cash | 23,295,974 | |||
Interest receivable | 1,036,786 | |||
Receivable for fund shares sold | 305,373 | |||
Receivable for expense reimbursement (Note 2) | 64,979 | |||
Prepaid expenses | 56,328 | |||
|
| |||
Total assets | 399,235,006 | |||
|
| |||
Liabilities: |
| |||
Payable for investments purchased | 22,532,086 | |||
Payable for fund shares redeemed | 37,154 | |||
Dividends payable | 85,611 | |||
Management and sub-advisory fees payable (Note 2) | 166,591 | |||
Service fees payable (Note 2) | 109 | |||
Transfer agent fees payable (Note 2) | 9,515 | |||
Custody and fund accounting fees payable | 24,717 | |||
Professional fees payable | 31,731 | |||
Trustee fees payable (Note 2) | 4,859 | |||
Payable for prospectus and shareholder reports | 6,033 | |||
Other liabilities | 52 | |||
|
| |||
Total liabilities | 22,898,458 | |||
|
| |||
Net assets | $ | 376,336,548 | ||
|
| |||
Analysis of net assets: |
| |||
Paid-in-capital | $ | 376,348,072 | ||
Total distributable earnings (deficits)A | (11,524 | ) | ||
|
| |||
Net assets | $ | 376,336,548 | ||
|
| |||
Shares outstanding at no par value (unlimited shares authorized): |
| |||
R5 Class | 19,293,190 | |||
|
| |||
Y Class | 2,180,544 | |||
|
| |||
Investor Class | 35,952 | |||
|
| |||
R6 Class | 16,198,605 | |||
|
| |||
Net assets: |
| |||
R5 Class | $ | 192,596,165 | ||
|
| |||
Y Class | $ | 21,772,081 | ||
|
| |||
Investor Class | $ | 358,454 | ||
|
| |||
R6 Class | $ | 161,609,848 | ||
|
| |||
Net asset value, offering and redemption price per share: |
| |||
R5 Class | $ | 9.98 | ||
|
| |||
Y Class | $ | 9.98 | ||
|
| |||
Investor Class | $ | 9.97 | ||
|
| |||
R6 Class | $ | 9.98 | ||
|
| |||
† Cost of investments in unaffiliated securities | $ | 373,358,042 | ||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
8
American Beacon Garcia Hamilton Quality Bond FundSM
Statement of Operations
For the period ended April 30, 2021 (Unaudited)
Investment income: |
| |||
Interest income | $ | 1,264,970 | ||
|
| |||
Expenses: |
| |||
Management and sub-advisory fees (Note 2) | 954,697 | |||
Transfer agent fees: | ||||
R5 Class (Note 2) | 24,879 | |||
Y Class (Note 2) | 10,001 | |||
Investor Class | 622 | |||
R6 Class | 2,253 | |||
Custody and fund accounting fees | 30,811 | |||
Professional fees | 33,705 | |||
Registration fees and expenses | 31,069 | |||
Service fees (Note 2): | ||||
Investor Class | 695 | |||
Prospectus and shareholder report expenses | 10,043 | |||
Trustee fees (Note 2) | 14,266 | |||
Loan expense (Note 8) | 884 | |||
Other expenses | 19,643 | |||
|
| |||
Total expenses | 1,133,568 | |||
|
| |||
Net fees waived and expenses (reimbursed) (Note 2) | (373,552 | ) | ||
|
| |||
Net expenses | 760,016 | |||
|
| |||
Net investment income | 504,954 | |||
|
| |||
Realized and unrealized gain (loss) from investments: |
| |||
Net realized gain from: | ||||
Investments in unaffiliated securitiesA | 1,043,029 | |||
Change in net unrealized (depreciation) of: | ||||
Investments in unaffiliated securitiesB | (2,686,802 | ) | ||
|
| |||
Net (loss) from investments | (1,643,773 | ) | ||
|
| |||
Net (decrease) in net assets resulting from operations | $ | (1,138,819 | ) | |
|
| |||
A The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities. |
| |||
B The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
9
American Beacon Garcia Hamilton Quality Bond FundSM
Statement of Changes in Net Assets
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||
(unaudited) | ||||||||||||
Increase (decrease) in net assets: |
| |||||||||||
Operations: |
| |||||||||||
Net investment income | $ | 504,954 | $ | 5,114,914 | ||||||||
Net realized gain from investments in unaffiliated securities | 1,043,029 | 10,350,030 | ||||||||||
Change in net unrealized (depreciation) of investments in unaffiliated securities | (2,686,802 | ) | (2,386,916 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | (1,138,819 | ) | 13,078,028 | |||||||||
|
|
|
| |||||||||
Distributions to shareholders: |
| |||||||||||
Total retained earnings: | ||||||||||||
R5 Class | (4,213,834 | ) | (3,807,202 | ) | ||||||||
Y Class | (457,063 | ) | (287,618 | ) | ||||||||
Investor Class | (8,595 | ) | (72,178 | ) | ||||||||
R6 Class | (3,813,419 | ) | (2,328,652 | ) | ||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (8,492,911 | ) | (6,495,650 | ) | ||||||||
|
|
|
| |||||||||
Capital share transactions (Note 9): |
| |||||||||||
Proceeds from sales of shares | 78,998,558 | 151,802,968 | ||||||||||
Reinvestment of dividends and distributions | 7,995,666 | 5,321,824 | ||||||||||
Cost of shares redeemed | (34,987,529 | ) | (309,368,514 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets from capital share transactions | 52,006,695 | (152,243,722 | ) | |||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets | 42,374,965 | (145,661,344 | ) | |||||||||
|
|
|
| |||||||||
Net assets: |
| |||||||||||
Beginning of period | 333,961,583 | 479,622,927 | ||||||||||
|
|
|
| |||||||||
End of period | $ | 376,336,548 | $ | 333,961,583 | ||||||||
|
|
|
|
See accompanying notes
10
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of April 30, 2021, the Trust consists of twenty-eight active series, one of which is presented in this filing: American Beacon Garcia Hamilton Quality Bond Fund (the “Fund”). The remaining twenty-seven 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.
In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives a fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how the Fund will use derivatives, may adversely affect the Fund’s performance and may increase costs related to the Fund’s use of derivatives.
Class Disclosure
The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
R5 Class | 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 Class | All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors. | $ | 2,500 | |||
R6 Class | Large institutional retirement plan investors - sold through retirement plan sponsors. | None |
11
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class based on the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.
Significant Accounting Policies
The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the 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 the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Fund. Interest income, 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 based on specific lot identification.
Distributions to Shareholders
The Fund distributes most or all of its net earnings and realized gains, if any, each taxable year in the form of dividends from net investment income on a monthly basis and distributions of realized net capital gains and net gains or losses from foreign currency transactions on an annual basis. The Fund does not have a fixed dividend rate and does not guarantee that it will pay any distributions in any particular year. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund may designate earnings and profits distributed to shareholders on the redemption of shares.
Allocation of Income, Trust Expenses, Gains, and Losses
Investment income, realized and unrealized gains and losses from investments of the Fund is allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Fund. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Fund on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Fund or nature of the services performed and relative applicability to the Fund.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.
12
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.
2. Transactions with Affiliates
Management and Investment Sub-Advisory Agreements
The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide the Fund with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of the Fund’s average daily net assets that is calculated and accrued daily according to the following schedule:
First $5 billion | 0.35 | % | ||
Next $5 billion | 0.325 | % | ||
Next $10 billion | 0.30 | % | ||
Over $20 billion | 0.275 | % |
The Trust, on behalf of the Fund, and the Manager have entered into an Investment Advisory Agreement with Garcia Hamilton & Associates, L.P. (the “Sub-Advisor”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets according to the following schedule:
First $1 billion | 0.20 | % | ||
Over $1 billion | 0.15 | % |
The Management and Sub-Advisory Fees paid by the Fund for the period ended April 30, 2021 were as follows:
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 607,534 | ||||||||
Sub-Advisor Fees | 0.20 | % | 347,163 | |||||||||
|
|
|
| |||||||||
Total | 0.55 | % | $ | 954,697 | ||||||||
|
|
|
|
Distribution Plans
The Fund has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the management fees received by the Manager and/or the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.
Service Plans
The Manager and the Trust entered into a Service Plan that obligates the Manager to oversee additional shareholder servicing of the Investor Class of the Fund. As compensation for performing the duties required under the Service Plan, the Manager receives an annualized fee up to 0.375% of the average daily net assets of the Investor Class of the Fund.
13
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
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 R5 and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to Board approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the R5 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 R5 and Y Classes on an annual basis. During the period ended April 30, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
Garcia Hamilton Quality Bond | $ | 31,446 |
As of April 30, 2021, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
Garcia Hamilton Quality Bond | $ | 6,603 |
Interfund Credit Facility
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the Fund because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the period ended April 30, 2021, the Fund did not utilize the credit facility.
Expense Reimbursement Plan
The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Fund to the extent that total operating expenses exceed the Fund’s expense cap. During the period ended April 30, 2021, the Manager waived and/or reimbursed expenses as follows:
Expense Cap | Expiration of Reimbursed Expenses | |||||||||||||||||||||
Fund | Class | 11/1/2020 - 2/28/2021 | 3/1/2021 - 4/30/2021 | Reimbursed Expenses | (Recouped) Expenses | |||||||||||||||||
Garcia Hamilton Quality Bond | R5 | 0.45 | % | 0.45 | % | $ | 184,009 | $ | - | 2023-2024 | ||||||||||||
Garcia Hamilton Quality Bond | Y | 0.55 | % | 0.51 | % | 19,231 | - | 2023-2024 | ||||||||||||||
Garcia Hamilton Quality Bond | Investor | 0.83 | % | 0.83 | % | 948 | - | 2023-2024 | ||||||||||||||
Garcia Hamilton Quality Bond | R6 | 0.41 | % | 0.41 | % | 169,364 | - | 2023-2024 |
14
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Of these amounts, $64,979 was disclosed as a Receivable for Expense Reimbursement on the Statement of Assets and Liabilities at April 30, 2021.
The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years from the date of the Manager’s waiver/reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. The reimbursed expenses listed above will expire in 2023 and 2024. The Fund did not record a liability for potential reimbursement due to the current assessment that a reimbursement is uncertain. 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 | ||||||||||||
Garcia Hamilton Quality Bond | $ | - | $ | 242,715 | $ | 168,232 | 2020-2021 | |||||||||
Garcia Hamilton Quality Bond | - | 745,393 | - | 2021-2022 | ||||||||||||
Garcia Hamilton Quality Bond | - | 855,336 | - | 2022-2023 |
Trustee Fees and Expenses
Effective January 1, 2021, as compensation for their service to the American Beacon Funds Complex, including the Trust (collectively, the “Trusts”), each Trustee is compensated from the Trusts as follows: (1) an annual retainer of $120,000; (2) meeting attendance fee (for attendance in-person or via teleconference) of (a) $12,000 for in person attendance, or $5,000 for telephonic attendance, by Board members for each regularly scheduled or special Board meeting, (b) $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, (c) $1,000 for attendance by Committee members at meetings of the Nominating and Governance Committee; and (d) $2,500 for attendance by Board members for each special telephonic Board meeting; and (3) reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. For her service as Board Chair, Ms. Cline receives an additional annual retainer of $50,000. Although she attends several committee meetings at each quarterly Board meeting, she receives only a single $2,500 fee each quarter for her attendance at those meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chair of the Nominating and Governance Committee receives an additional annual retainer of $10,000.
3. Security Valuation and Fair Value Measurements
The price of the Fund’s shares is based on the Fund’s Net Asset Value (“NAV”). The NAV of the Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to the Fund or class, by the total number of shares outstanding of the Fund or class.
Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally at 4:00 p.m. Eastern Time, each day that the Exchange is open for business.
Debt securities normally are valued on the basis of prices provided by an independent pricing service and may take into account appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. Prices of debt securities may be determined using quotes obtained from brokers.
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American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Investments in open-end mutual funds are valued at the closing NAV per share of the mutual fund on the day of valuation.
Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Board.
Other investments, including restricted securities and those financial instruments for which the above valuation procedures are inappropriate or are deemed not to reflect fair value, are stated at fair value, as determined in good faith by the Manager’s Valuation Committee, pursuant to procedures established by the Board.
Valuation Inputs
Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1 | - | Quoted prices in active markets for identical securities. | ||
Level 2 | - | Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. | ||
Level 3 | - | Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment. |
Level 1 and Level 2 trading assets and trading liabilities, at fair value
Fixed-income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. Treasury obligations, sovereign issues, bank loans, convertible preferred securities, and non-U.S. bonds are normally valued by pricing service providers that use broker dealer quotations, reported trades or valuation estimates from their internal pricing models. The service providers’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates, and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy. Fixed-income securities purchased on a delayed delivery basis are marked-to-market daily until settlement at the forward settlement date and are categorized as Level 2 of the fair value hierarchy.
Mortgage-related and asset-backed securities (“ABS”) are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by pricing service providers that use broker-dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, current market data, estimated cash flows, and market-based yield spreads for each tranche, and incorporates deal collateral performance, as available. Mortgage-related and ABS that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
4. Securities and Other Investments
Agency Mortgage-Backed Securities
Certain mortgage-backed securities (“MBS”) may be issued or guaranteed by the U.S. government or a government sponsored entity, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal
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American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Home Loan Mortgage Corporation (“Freddie Mac”). Although these instruments may be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit of the United States and are still exposed to the risk of non-payment.
Fixed-Income Investments
The Fund may hold debt, including government and corporate debt, and other fixed-income securities. Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease, and vice versa. How specific fixed-income securities may react to changes in interest rates will depend on the specific characteristics of each security. For example, while securities with longer maturities tend to produce higher yields, they also tend to be more sensitive to changes in prevailing interest rates and are, therefore, more volatile than shorter-term securities and are subject to greater market fluctuations as a result of changes in interest rates. Fixed-income securities are also subject to credit risk, which is the risk that the credit strength of an issuer of a fixed-income security will weaken and/or that the issuer will be unable to make timely principal and interest payments and that the security may go into default. In addition, there is prepayment risk, which is the risk that during periods of falling interest rates, certain fixed-income securities with higher interest rates, such as mortgage-backed securities (“MBS”) and ABS, may be prepaid by their issuers thereby reducing the amount of interest payments. This may result in a Fund having to reinvest its proceeds in lower yielding securities. Securities underlying MBS and ABS, which may include subprime mortgages, also may be subject to a higher degree of credit risk, valuation risk, and liquidity risk.
Mortgage-Backed Securities
MBS often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities’ effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of the Fund’s portfolio at the time resulting in reinvestment risk.
Rising or high interest rates may result in slower than expected principal payments which may tend to extend the duration of MBS, making them more volatile and more sensitive to changes in interest rates. This is known as extension risk.
MBS may have less potential for capital appreciation than comparable fixed-income securities due to the likelihood of increased prepayments of mortgages resulting from foreclosures or declining interest rates. These foreclosed or refinanced mortgages are paid off at face value (par) or less, causing a loss, particularly for any investor who may have purchased the security at a premium or a price above par. In such an environment, this risk limits the potential price appreciation of these securities.
Mortgage-Related and Other Asset-Backed Securities
The Fund may invest in mortgage or other ABS. These securities may include mortgage instruments issued by U.S. government agencies (“agency mortgages”) or those issued by private entities (“non-agency mortgages”). Specific types of instruments may include mortgage pass-through securities, collateralized mortgage obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage-backed securities and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property. The value of the Fund’s MBS may be affected by, among other things, changes or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgage, or the quality of the underlying assets. The mortgages underlying the securities may default or decline in quality or value. Through its investments in MBS, a Fund has exposure to subprime loans, Alt-A loans and non-conforming loans as well as to the mortgage and credit markets generally. Underlying collateral
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Notes to Financial Statements
April 30, 2021 (Unaudited)
related to subprime, Alt-A and non-conforming mortgage loans has become increasingly susceptible to defaults and declines in quality or value, especially in a declining residential real estate market. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole.
Other Investment Company Securities and Other Exchange-Traded Products
The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies (“BDCs”), ETFs, unit investment trusts, and other investment companies of the Trust. The Fund may invest in securities of an investment company advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Fund becomes a shareholder of that investment company. As a result, the Fund’s shareholders indirectly will bear the Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
U.S. Government Agency Securities
U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government currently provides financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law. U.S. Government securities include U.S. Treasury bills, notes and bonds, Federal Home Loan Bank (“FHLB”) obligations, Federal Farm Credit Bank (“FFCB”) obligations, U.S. Government agency obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.
U.S. Treasury Obligations
U.S. Treasury obligations include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations (known as “STRIPS”) and inflation-indexed securities. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates. U.S. Treasury obligations are subject to credit risk and interest rate risk.
5. Principal Risks
Investing in the Fund may involve certain risks including, but not limited to, those described below.
Credit Risk
The Fund is subject to the risk that the issuer or guarantor of a debt security, or the counterparty to a derivatives contract or a loan will fail to make timely payment of interest or principal or otherwise honor its obligations or default completely. A decline in the credit rating of an individual security held by the Fund may have an adverse impact on its price and make it difficult for the 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
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American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
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. Since the Fund can invest significantly in high-yield investments considered speculative in nature, this risk may be substantial.
Floating Rate Securities Risk
The coupons on certain fixed income securities in which the Fund 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, London Interbank Offered Rate (“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.
Interest Rate Risk
The Fund is subject to the risk that the market value of fixed-income securities or derivatives it holds will decline due to rising interest rates. Generally, the value of investments with interest rate risk, such as fixed income securities, will move in the opposite direction to movements in interest rates. As of the date of this Annual Report, interest rates are historically low. In the future, interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to the Fund. During periods of very low or negative interest rates, the Fund may be unable to maintain positive returns. 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 Fund is exposed to such interest rates. The prices of fixed income securities and derivatives are also affected by their maturities. Fixed-income securities and derivatives with longer maturities generally have greater sensitivity to changes in interest rates. For example, if a bond has a duration of three years, a 1% increase in interest rates could be expected to result in a 3% decrease in the value of the bond, whereas if a bond has a duration of one year, a 1% increase in interest rates could be expected to result in a 1% decline in value. An increase in interest rates can impact markets broadly as well. Some investors buy securities and derivatives with borrowed money; an increase in interest rates can cause a decline in those markets. To the extent the Fund holds an investment with a negative interest rate to maturity, the Fund would generate a negative return on that investment.
Investment Risk
An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.
LIBOR Risk
Certain of the instruments identified in a Fund’s principal investment strategies have variable or floating coupon rates that are based on LIBOR, Euro Interbank Offered Rate and other similar types of reference rates (each, a “Reference Rate”). These Reference Rates are generally intended to represent the rate at which contributing banks may obtain short-term borrowings from each other within certain financial markets. LIBOR is produced daily by averaging the rates reported by a number of banks and may be a significant factor in determining a Fund’s payment obligations under a derivative instrument, the cost of financing to a Fund, or an investment’s value or return to a Fund, and may be used in other ways that affect a Fund’s performance.
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American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Arrangements are underway to phrase out the use of LIBOR. These arrangements and any additional regulatory or market changes may have an adverse impact on a Fund or its investments, including increased volatility or illiquidity in markets for instruments that rely on LIBOR.
Regulators and market participants are working together to identify or develop successor Reference Rates. Additionally, it is expected that market participants will focus on the transition mechanisms by which the Reference Rates in existing contracts or instruments may be amended, whether through marketwide protocols, fallback contractual provisions, bespoke negotiations or amendments or otherwise. Nonetheless, the termination of certain Reference Rates presents risks to a Fund. Financial industry groups have begun planning for a transition to the use of a different Reference Rate or benchmark rate, but there are obstacles to converting certain securities and transactions to a new Reference Rate or benchmark rate. The transition process, or the failure of an industry to transition, could lead to increased volatility and illiquidity in markets for instruments that currently rely on LIBOR to determine interest rates and a reduction in the values of some LIBOR-based investments, all of which would impact the Fund. While some LIBOR-based instruments may contemplate a scenario where LIBOR becomes unavailable by providing for an alternative rate-setting methodology, not all may have such provisions and there may be significant uncertainty regarding the effectiveness of any such methodologies. In addition, the alternative reference or benchmark rate may be an ineffective substitute, potentially resulting in prolonged adverse market conditions for a Fund. The elimination of a Reference Rate or any other changes or reforms to the determination or supervision of Reference Rates could have an adverse impact on the market for or value of any securities or payments linked to those Reference Rates and other financial obligations held by a Fund or on its overall financial condition or results of operations. Any substitute Reference Rate and any pricing adjustments imposed by a regulator or by counterparties or otherwise may adversely affect a Fund’s performance and/or NAV. At this time, it is not possible to completely identify or predict the effect of any such changes, any establishment of alternative Reference Rates or any other reforms to Reference Rates that may be enacted in the UK or elsewhere. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, any of the effects described above could occur prior to the official phasing out of LIBOR.
Liquidity Risk
The Fund is susceptible to the risk that certain investments held by the Fund may have limited marketability, be subject to restrictions on sale, be difficult or impossible to purchase or sell at favorable times or prices, or become less liquid in response to market developments or adverse credit events that may affect issuers or guarantors of a security. An inability to sell a portfolio position can adversely affect the Fund’s value or prevent the Fund from being able to take advantage of other investment opportunities. Market prices for such instruments may be volatile. The Fund could lose money if it is unable to dispose of an investment at a time that is most beneficial to the Fund. The Fund may be required to dispose of investments at unfavorable times or prices to satisfy obligations, which may result in losses or may be costly to the Fund. For example, liquidity risk may be magnified in rising interest rate environments due to higher than normal redemption rates. Unexpected redemptions may force the Fund to sell certain investments at unfavorable prices to meet redemption requests or other cash needs. Judgment plays a greater role in pricing illiquid investments than in investments with more active markets.
Market Risk
The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund’s performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future. The value of a security may decline due to adverse issuer-specific conditions, general market conditions
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American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole. Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Changes in value may be temporary or may last for extended periods. Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, including the U.S. presidential election, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree.
Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.
Mortgage-Backed and Mortgage Related Securities Risk
Investments in mortgage-backed and mortgage-related securities are influenced by the factors affecting the mortgages underlying the securities or the housing market. Investments in mortgage-backed and mortgage-related securities also are subject to market risks for fixed income securities, which include, but are not limited to, credit risk, interest rate risk, prepayment risk, extension risk, callable securities risk, and valuation risk. A decline in the credit quality of the issuers of mortgage-backed and mortgage-related securities or instability in the markets for such securities may affect the value and liquidity of such securities, which could result in losses to the Fund. These securities are also subject to the risk of default on the underlying mortgages, particularly during periods of market downturn, and an unexpectedly high rate of defaults on the underlying assets will adversely affect the security’s value.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including money market funds that are advised by the Manager. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses, including for example advisory and administrative fees, charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Fund’s investments in money market funds are subject to interest rate risk, credit risk, and market risk. The Fund must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Fund’s investment will decline, adversely affecting the Fund’s performance. To the extent the Fund invests in other investment companies that invest in equity securities, fixed income securities and/or foreign securities, or that track an index, the Fund is subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject.
Prepayment and Extension Risk
When interest rates fall, borrowers will generally repay the loans that underlie certain debt securities, especially mortgage-related and other types of asset-backed securities, more quickly than expected, causing the issuer of the security to repay the principal prior to the security’s expected maturity date. The Fund may need to reinvest the proceeds at a lower interest rate, reducing its income. Securities subject to prepayment risk generally offer less potential for gains when prevailing interest rates fall. If the Fund buys those securities at a premium, accelerated prepayments on those securities could cause the Fund to lose a portion of its principal investment. The impact of prepayments on the price of a security may be difficult to predict and may increase the security’s price volatility. Extension risk is the risk that a decrease in prepayments may, as a result of higher interest rates or other
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American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
factors, result in the extension of a security’s effective maturity, increase the risk of default and delayed payment, heighten interest rate risk and increase the potential for a decline in its price. In addition, as a consequence of a decrease in prepayments, the amount of principal available to the Fund for investment would be reduced.
Recent Market Events Risk
An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. The transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions and closed borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event changes, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession. The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time.
The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets and has signaled that it plans to maintain its interventions at an elevated level. Amid these ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. The U.S. government has reduced the federal corporate income tax rate, 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. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on January 31, 2020, commonly referred to as “Brexit,” and a trade agreement between the United Kingdom and the European Union, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.
Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.
Redemption Risk
The Fund may experience periods of heavy redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in the Fund, have short investment horizons, or have unpredictable cash flow needs. A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from mutual funds that hold large amounts of fixed-income securities. This, coupled with a reduction in the ability or willingness of dealers and other institutional investors to buy or hold fixed-income securities, may result in decreased liquidity and increased volatility in the fixed-income markets, and heightened redemption risk. Heavy redemptions, whether by a few large investors or many smaller investors, could hurt the Fund’s performance. This risk is heightened if the Fund invests in emerging market securities, which are generally less liquid than the securities of U.S. and other developed markets. The sale of assets to meet redemption requests may create net capital gains or losses, which could cause the Fund to have to distribute substantial capital gains.
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American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Sector Risk
Sector risk is the risk associated with the Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase. In addition, when a Fund focuses its investments in certain sectors of the economy, its performance may be driven largely by sector performance and could fluctuate more widely than if a Fund were invested more evenly across sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The businesses that constitute a sector may all react the same way to economic, political or regulatory events. A Fund’s performance could also be affected if the sectors do not perform as expected. The lack of exposure to one or more sectors may adversely affect performance. As a Fund’s portfolio changes over time, a Fund’s exposure to a particular sector may become higher or lower.
U.S. Government Securities and Government-Sponsored Enterprises Risk
A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Additionally, circumstances could arise that would prevent the payment of interest or principal. This could result in losses to the Fund. Investments in government-sponsored enterprises are debt obligations issued by agencies and instrumentalities of the U.S. Government. These obligations vary in the level of support they receive from the U.S. Government. They may be: (i) supported by the full faith and credit of the U.S. Treasury, such as those of the Government National Mortgage Association (‘‘Ginnie Mae’’); (ii) supported by the right of the issuer to borrow from the U.S. Treasury, such as those of the Federal Home Loan Bank and the Federal Farm Credit Banks; (iii) supported by the discretionary authority of the U.S. Government to purchase the agency obligations, such as those of Fannie Mae and Freddie Mac or (iv) supported only by the credit of the issuer, such as those of the Federal Farm Credit Bureau. The U.S. Government may choose not to provide financial support to U.S. Government-sponsored agencies or instrumentalities if it is not legally obligated to do so, in which case, if the issuer defaulted, to the extent the Fund held securities of such issuers, it might not be able to recover its investment from the U.S. Government. U.S. government securities and securities of government-sponsored entities are also subject to credit risk, interest rate risk and market risk. The rising U.S. national debt may lead to adverse impacts on the value of U.S. government securities due to potentially higher costs for the U.S. government to obtain new financing.
Variable and Floating Rate Securities Risk
The coupons on certain fixed income securities in which a Fund may invest are not fixed and may fluctuate based upon changes in market rates. 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 variable and floating rate securities typically decrease. Alternatively, during periods of rising interest rates, changes in the coupons of variable and 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 variable and floating rate securities may decline if their coupons do not rise as much, or as quickly, as interest rates in general. Conversely, variable and floating rate securities will not generally increase in value if interest rates decline. Variable and floating rate securities are less effective at locking in a particular yield and are subject to credit risk. Certain types of floating rate instruments may also be subject to greater liquidity risk than other debt securities.
6. Federal Income and Excise Taxes
It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, the Fund is treated as a single entity for the purpose of determining such qualification.
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American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
The Fund does not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2020 remain subject to examination by the Internal Revenue Service. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statement of Operations.
The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation (depreciation), as applicable, as the income is earned or capital gains are recorded.
Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.
As of April 30, 2021, the tax cost for the Fund and their respective gross unrealized appreciation (depreciation) were as follows:
Fund | Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Garcia Hamilton Quality Bond | $ | 373,888,087 | $ | 1,415,555 | $ | (828,076 | ) | $ | 587,479 |
Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the Fund in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.
As of October 31, 2020, the Fund did not have any capital loss carryforwards.
7. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 2021 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Purchases of U.S. Government Securities | Sales (non-U.S. Government Securities) | Sales of U.S. Government Securities | ||||||||||||||||||||||||
Garcia Hamilton Quality Bond | $ | 61,872,870 | $ | 230,380,905 | $ | 119,948,114 | $ | 96,343,283 |
8. Borrowing Arrangements
Effective November 12, 2020 (the “Effective Date”), the Fund, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.
On the Effective Date, the Fund, along with certain other Participating Funds managed by the Manager, also renewed 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
24
American Beacon Garcia Hamilton Quality Bond FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
is $50 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (”OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 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 “Loan expense” on the Statement of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.
During the period ended April 30, 2021, the Fund did not utilize this facility.
9. Capital Share Transactions
The tables below summarize the activity in capital shares for each Class of the Fund:
R5 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 4,981,520 | $ | 50,331,249 | 10,920,910 | $ | 110,830,535 | ||||||||||||||||||||||
Reinvestment of dividends | 367,812 | 3,718,713 | 260,888 | 2,639,245 | ||||||||||||||||||||||||
Shares redeemed | (2,880,107 | ) | (29,465,638 | ) | (25,867,704 | ) | (260,818,722 | ) | ||||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 2,469,225 | $ | 24,584,324 | (14,685,906 | ) | $ | (147,348,942 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 742,607 | $ | 7,499,886 | 1,687,321 | $ | 16,967,230 | ||||||||||||||||||||||
Reinvestment of dividends | 45,020 | 454,974 | 27,949 | 283,161 | ||||||||||||||||||||||||
Shares redeemed | (450,386 | ) | (4,581,847 | ) | (1,656,596 | ) | (16,761,196 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net increase in shares outstanding | 337,241 | $ | 3,373,013 | 58,674 | $ | 489,195 | ||||||||||||||||||||||
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| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 5,196 | $ | 52,275 | 83,368 | $ | 837,398 | ||||||||||||||||||||||
Reinvestment of dividends | 847 | 8,560 | 7,035 | 70,766 | ||||||||||||||||||||||||
Shares redeemed | (5,697 | ) | (56,890 | ) | (1,538,154 | ) | (15,461,294 | ) | ||||||||||||||||||||
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|
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| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 346 | $ | 3,945 | (1,447,751 | ) | $ | (14,553,130 | ) | ||||||||||||||||||||
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R6 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Garcia Hamilton Quality Bond Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 2,080,908 | $ | 21,115,148 | 2,293,937 | $ | 23,167,805 | ||||||||||||||||||||||
Reinvestment of dividends | 377,645 | 3,813,419 | 229,895 | 2,328,652 | ||||||||||||||||||||||||
Shares redeemed | (87,462 | ) | (883,154 | ) | (1,663,069 | ) | (16,327,302 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Net increase in shares outstanding | 2,371,091 | $ | 24,045,413 | 860,763 | $ | 9,169,155 | ||||||||||||||||||||||
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10. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.
25
American Beacon Garcia Hamilton Quality Bond FundSM
Financial Highlights
(For a share outstanding throughout the period)
R5 ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | April 4, 2016B to October 31, | ||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.27 | $ | 10.05 | $ | 9.79 | $ | 9.91 | $ | 9.98 | $ | 10.00 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.03 | 0.11 | 0.24 | 0.20 | 0.14 | 0.05 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.07 | ) | 0.28 | 0.26 | (0.13 | ) | (0.05 | ) | (0.02 | ) | ||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (0.04 | ) | 0.39 | 0.50 | 0.07 | 0.09 | 0.03 | |||||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.06 | ) | (0.17 | ) | (0.24 | ) | (0.19 | ) | (0.15 | ) | (0.05 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.19 | ) | – | – | – | (0.01 | ) | – | ||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total distributions | (0.25 | ) | (0.17 | ) | (0.24 | ) | (0.19 | ) | (0.16 | ) | (0.05 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 9.98 | $ | 10.27 | $ | 10.05 | $ | 9.79 | $ | 9.91 | $ | 9.98 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnC | (0.37 | )%D | 3.93 | % | 5.20 | % | 0.74 | % | 0.91 | % | 0.34 | %D | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 192,596,165 | $ | 172,774,140 | $ | 316,582,604 | $ | 234,919,975 | $ | 132,575,412 | $ | 124,032,604 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.66 | %E | 0.68 | % | 0.66 | % | 0.69 | % | 0.70 | % | 1.06 | %E | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.45 | %E | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | %E | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.07 | %E | 1.15 | % | 2.18 | % | 1.68 | % | 1.12 | % | 0.29 | %E | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.28 | %E | 1.38 | % | 2.39 | % | 1.92 | % | 1.37 | % | 0.91 | %E | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 64 | %D | 122 | % | 58 | % | 143 | % | 52 | % | 40 | %F |
A | Prior to February 28, 2020, the R5 Class was known as Institutional Class. |
B | Commencement of operations. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
F | Portfolio turnover rate is for the period from April 4, 2016 through October 31, 2016 and is not annualized. |
See accompanying notes
26
American Beacon Garcia Hamilton Quality Bond FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | April 4, 2016A to October 31, | ||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.27 | $ | 10.05 | $ | 9.79 | $ | 9.90 | $ | 9.98 | $ | 10.00 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.02 | 0.13 | 0.24 | 0.18 | 0.13 | 0.05 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.06 | ) | 0.25 | 0.25 | (0.11 | ) | (0.06 | ) | (0.02 | ) | ||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | (0.04 | ) | 0.38 | 0.49 | 0.07 | 0.07 | 0.03 | |||||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.06 | ) | (0.16 | ) | (0.23 | ) | (0.18 | ) | (0.14 | ) | (0.05 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.19 | ) | – | – | – | (0.01 | ) | – | ||||||||||||||||||||||||||||||||||||
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Total distributions | (0.25 | ) | (0.16 | ) | (0.23 | ) | (0.18 | ) | (0.15 | ) | (0.05 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 9.98 | $ | 10.27 | $ | 10.05 | $ | 9.79 | $ | 9.90 | $ | 9.98 | ||||||||||||||||||||||||||||||||
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Total returnB | (0.41 | )%C | 3.83 | % | 5.09 | % | 0.74 | % | 0.71 | % | 0.29 | %C | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 21,772,081 | $ | 18,928,869 | $ | 17,927,537 | $ | 3,685,857 | $ | 3,133,476 | $ | 3,265,315 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.73 | %D | 0.74 | % | 0.73 | % | 0.75 | % | 0.77 | % | 1.29 | %D | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.54 | %D | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | %D | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.01 | %D | 1.03 | % | 2.14 | % | 1.58 | % | 1.05 | % | 0.11 | %D | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.20 | %D | 1.22 | % | 2.32 | % | 1.78 | % | 1.27 | % | 0.85 | %D | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 64 | %C | 122 | % | 58 | % | 143 | % | 52 | % | 40 | %E |
A | Commencement of operations. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
E | Portfolio turnover rate is for the period from April 4, 2016 through October 31, 2016 and is not annualized. |
See accompanying notes
27
American Beacon Garcia Hamilton Quality Bond FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | April 4, 2016A to October 31, | ||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.26 | $ | 10.05 | $ | 9.79 | $ | 9.91 | $ | 9.99 | $ | 10.00 | ||||||||||||||||||||||||||||||||
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Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | (0.01 | )B | 0.13 | B | 0.21 | 0.15 | 0.10 | 0.03 | ||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.05 | ) | 0.22 | 0.26 | (0.11 | ) | (0.06 | ) | (0.01 | ) | ||||||||||||||||||||||||||||||||||
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Total income (loss) from investment operations | (0.06 | ) | 0.35 | 0.47 | 0.04 | 0.04 | 0.02 | |||||||||||||||||||||||||||||||||||||
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Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.04 | ) | (0.14 | ) | (0.21 | ) | (0.16 | ) | (0.11 | ) | (0.03 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (0.19 | ) | - | - | - | (0.01 | ) | - | ||||||||||||||||||||||||||||||||||||
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Total distributions | (0.23 | ) | (0.14 | ) | (0.21 | ) | (0.16 | ) | (0.12 | ) | (0.03 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 9.97 | $ | 10.26 | $ | 10.05 | $ | 9.79 | $ | 9.91 | $ | 9.99 | ||||||||||||||||||||||||||||||||
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Total returnC | (0.56 | )%D | 3.54 | % | 4.80 | % | 0.36 | % | 0.43 | % | 0.24 | %D | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 358,454 | $ | 365,190 | $ | 14,904,591 | $ | 10,995,242 | $ | 9,724,030 | $ | 8,594,617 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements or recoupments | 1.34 | %E | 1.20 | % | 1.04 | % | 0.92 | % | 0.94 | % | 1.19 | %E | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements or recoupments | 0.83 | %E | 0.83 | % | 0.83 | % | 0.83 | % | 0.83 | % | 0.83 | %E | ||||||||||||||||||||||||||||||||
Net investment income (loss), before expense reimbursements or recoupments | (0.63 | )%E | 0.90 | % | 1.81 | % | 1.41 | % | 0.89 | % | 0.21 | %E | ||||||||||||||||||||||||||||||||
Net investment income (loss), net of reimbursements or recoupments | (0.12 | )%E | 1.27 | % | 2.02 | % | 1.50 | % | 0.99 | % | 0.57 | %E | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 64 | %D | 122 | % | 58 | % | 143 | % | 52 | % | 40 | %F |
A | Commencement of operations. |
B | Based on average shares outstanding for the period. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
F | Portfolio turnover rate is for the period from April 4, 2016 through October 31, 2016 and is not annualized. |
See accompanying notes
28
American Beacon Garcia Hamilton Quality Bond FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | February 28, 2019A to October 31, 2019 | ||||||||||||||||||
|
| |||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 10.26 | $ | 10.04 | $ | 9.87 | ||||||||||||||
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Income (loss) from investment operations: | ||||||||||||||||||||
Net investment income | 0.02 | 0.14 | 0.17 | |||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | (0.05 | ) | 0.25 | 0.17 | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total income (loss) from investment operations | (0.03 | ) | 0.39 | 0.34 | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Less distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.06 | ) | (0.17 | ) | (0.17 | ) | ||||||||||||||
Distributions from net realized gains | (0.19 | ) | - | - | ||||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total distributions | (0.25 | ) | (0.17 | ) | (0.17 | ) | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Net asset value, end of period | $ | 9.98 | $ | 10.26 | $ | 10.04 | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total returnB | (0.25 | )%C | 3.97 | % | 3.44 | %C | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||
Net assets, end of period | $ | 161,609,848 | $ | 141,893,384 | $ | 130,208,195 | ||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Expenses, before reimbursements | 0.63 | %D | 0.64 | % | 0.66 | %D | ||||||||||||||
Expenses, net of reimbursements | 0.41 | %D | 0.41 | % | 0.41 | %D | ||||||||||||||
Net investment income, before expense reimbursements | 0.10 | %D | 1.13 | % | 1.90 | %D | ||||||||||||||
Net investment income, net of reimbursements | 0.32 | %D | 1.36 | % | 2.15 | %D | ||||||||||||||
Portfolio turnover rate | 64 | %C | 122 | % | 58 | %E |
A | Commencement of operations. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
E | Portfolio turnover rate is for the period from February 28, 2019 through October 31, 2019 and is not annualized. |
See accompanying notes
29
Disclosure Regarding Liquidity Risk Management Program
Rule 22e-4 under the Investment Company Act of 1940, as amended (“Rule 22e-4”), requires open-end registered investment companies (other than money market funds) to adopt and implement a written liquidity risk management program that is reasonably designed to assess and manage liquidity risk. The Fund has adopted a Liquidity Risk Management Program (the “Program”) that is designed to assess and manage liquidity risk, which is the risk that the Fund could not meet requests to redeem its shares without significant dilution of the remaining shareholders’ interests in the Fund. Pursuant to Rule 22e-4, the Program includes the following elements:
• | Assessment, management, and periodic review of liquidity risk; |
• | Classification of each of the Fund’s portfolio investments into one of four liquidity categories: highly liquid, moderately liquid, less liquid, and illiquid; |
• | Determination and review of a highly liquid investment minimum for any Fund that does not primarily hold assets that are highly liquid investments; |
• | Policies and procedures to respond to a shortfall in the highly liquid investment minimum, including associated reports to the Fund’s Board of Trustees (the “Board”) and the Securities and Exchange Commission (“SEC”); |
• | A prohibition against a Fund acquiring an illiquid investment if immediately after the acquisition the Fund would have more than 15% of its net assets invested in illiquid investments that are assets; |
• | Reporting of breaches of the illiquid investment prohibition to the Board and the SEC; and |
• | Policies and procedures regarding how and when a Fund will satisfy redemption requests by distributing portfolio securities or other assets. |
The Manager’s Liquidity Committee administers the Program and has provided quarterly reports to the Board regarding the Fund’s liquidity risk. In addition, at the Board’s March 3-4, 2021 meetings, the Board reviewed the Liquidity Committee’s written report (“Report”) that addressed the operation of the Program and assessed the adequacy and effectiveness of its implementation from January 1, 2020 through December 31, 2020 (the “review period”).
Key conclusions that the Liquidity Committee included in the Report are listed below:
• | The Program is reasonably designed to assess and manage the Fund’s liquidity risk. |
• | The operation of the Program was adequate during the review period. |
• | There were no material changes to the Program during the review period. |
• | The Fund included in this shareholder report was deemed to primarily hold assets that are highly liquid, and no highly liquid investment minimum was recommended. |
• | The Program was effectively implemented by the Liquidity Committee during the review period. |
• | Administration of the Program by the Liquidity Committee continues to be appropriate. |
30
Delivery of Documents
Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
To obtain more information about the Fund:
![]() | ![]() | |
By E-mail: | On the Internet: | |
american_beacon.funds@ambeacon.com | Visit our website at www.americanbeaconfunds.com | |
By Telephone: Call (800) 658-5811 | By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 | |
Availability of Quarterly Portfolio Schedules | Availability of Proxy Voting Policy and Records | |
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the end of each fiscal quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month. | A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009. |
Fund Service Providers:
CUSTODIAN State Street Bank and Trust 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 and American Beacon Garcia Hamilton Quality Bond Fund are service marks of American Beacon Advisors, Inc.
SAR 04/21
About American Beacon Advisors
Since 1986, American Beacon Advisors, Inc. has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.
Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.
INTERNATIONAL EQUITY FUND RISKS
Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.
TOCQUEVILLE INTERNATIONAL VALUE FUND RISKS
Investing in foreign securities including emerging markets may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.
Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and each Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions, and, therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.
American Beacon Funds | April 30, 2021 |
Contents
1 | ||||
2 | ||||
6 | ||||
Schedules of Investments: | ||||
8 | ||||
14 | ||||
17 | ||||
21 | ||||
Financial Highlights: | ||||
46 | ||||
53 | ||||
Disclosure Regarding Approval of Management and Investment Advisory Agreements | 56 | |||
57 |
Back Cover |
![]() | Dear Shareholders,
Throughout this reporting period, the 24-hour news cycle has continued to be dominated by headlines related to the COVID-19 pandemic, ongoing global vaccination efforts, U.S. stimulus and infrastructure spending, and the reopening of our nation’s businesses and schools. After months of seclusion and uncertainty, we can finally see the proverbial light at the end of a tunnel – and a path forward to potentially brighter days.
However, during challenging times such as we’ve all experienced over the past year, the fear of loss can be a powerful emotion. And it can cause many individuals to make short-term investment decisions that have the potential to sink their long-term financial objectives. We encourage you to remain focused on achieving your long-term investment goals by working with |
financial professionals to develop a personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand crises. By staying the course, you will be better positioned to achieve enduring financial success.
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. 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 financial rewards.
Thank you for continuing your financial journey with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon International Equity FundSM
April 30, 2021 (Unaudited)
The Investor Class of the American Beacon International Equity Fund (the “Fund”) returned 36.87% for the six months ended April 30, 2021. The Fund outperformed the MSCI EAFE Index (Net) (the “Index”) return of 28.84%.
Total Returns for the Period ended April 30, 2021 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||||
R5 Class (1,6) | AAIEX | 37.08 | % | 46.21 | % | 3.04 | % | 6.55 | % | 4.09 | % | |||||||||||||||||||||
Y Class (1,6) | ABEYX | 37.02 | % | 46.15 | % | 2.97 | % | 6.47 | % | 4.01 | % | |||||||||||||||||||||
Investor Class (1,6) | AAIPX | 36.87 | % | 45.78 | % | 2.70 | % | 6.18 | % | 3.73 | % | |||||||||||||||||||||
Advisor Class (1,6) | AAISX | 36.83 | % | 45.60 | % | 2.57 | % | 6.07 | % | 3.59 | % | |||||||||||||||||||||
A Class without sales charge (1,2,6) | AIEAX | 36.80 | % | 45.61 | % | 2.62 | % | 6.12 | % | 3.65 | % | |||||||||||||||||||||
A Class with sales Charge (1,2,6) | AIEAX | 28.91 | % | 37.27 | % | 0.62 | % | 4.87 | % | 3.03 | % | |||||||||||||||||||||
C Class without sales charge (1,3,6) | AILCX | 36.33 | % | 44.60 | % | 1.89 | % | 5.35 | % | 2.88 | % | |||||||||||||||||||||
C Class with sales charge (1,3,6) | AILCX | 35.33 | % | 43.60 | % | 1.89 | % | 5.35 | % | 2.88 | % | |||||||||||||||||||||
R6 Class (1,4,6) | AAERX | 37.04 | % | 46.25 | % | 3.11 | % | 6.61 | % | 4.12 | % | |||||||||||||||||||||
MSCI EAFE Index (Net)** (5) | 28.84 | % | 39.88 | % | 6.27 | % | 8.87 | % | 5.22 | % |
* | Not Annualized. |
** | Reflects the reinvestment of dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident individuals who do not benefit from double taxation treaties. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to the R5 Class of the Fund was waived from 2013 through 2015. Performance prior to waiving fees was lower than actual returns shown for 2013 through 2015. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future. |
2. | A portion of the fees charged to the A Class of the Fund was waived from 2010 through 2012 and fully recovered in 2013. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012. The maximum sales charge for A Class is 5.75%. |
3. | A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012, partially recovered in 2013, and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase. |
4. | Fund performance for the five-year and ten-year periods represents the returns achieved by the R5 Class from 4/30/11 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/11. A portion of the fees charged to the R6 Class of the Fund has been waived since Class inception. Performance prior to waiving fees was lower than the actual returns shown since inception. |
5. | The MSCI EAFE Index (Net) is a market capitalization weighted index of international stock performance composed of equities from developed markets excluding the U.S. and Canada. One cannot directly invest in an index. The MSCI information contained herein: (1) is provided “as is,” (2) is proprietary to MSCI and/or its content providers, (3) may not be used to create any financial instruments or products or any indexes and (4) may not be copied or distributed without MSCI’s express written consent. MSCI disclaims all warranties with respect to the information. Neither MSCI nor its content providers are responsible for any damages or losses arising from any use of this information. |
6. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, Advisor, A, C and R6 Class shares were 0.72%, 0.80%, 1.07%, 1.20%, 1.13%, 1.86%, and 0.80%, 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 over the six-month period both due to stock selection and country allocation.
Stock selections within the United Kingdom and Germany positively contributed to the Fund’s relative performance over the six-month period, despite some detraction from selections in Hong Kong. The Fund was helped by investments in Barclays PLC (up 79.0%) and WPP PLC (up 67.3%) within the United Kingdom, and from its investments in Volkswagen AG Preferred (up 86.5%) and Daimler AG Registered Shares (up 75.6%) within Germany. On the other hand, investments in Hong Kong including out-of-Index CNOOC Ltd. (up 0.9%) detracted from relative returns.
2
American Beacon International Equity FundSM
Performance Overview
April 30, 2021 (Unaudited)
The Fund’s relative performance benefitted from country allocation, particularly by its underweight allocation to Japan (up 17.3%) and overweight allocation to France (up 40.2%). Underweighting Australia (up 33.4%) partially offset the Fund’s relative performance during the period.
Although economic and market conditions vary from period to period, the Fund’s primary strategy of investing in undervalued companies with above-average earnings growth expectations remains consistent.
Top Ten Holdings (% Net Assets) |
| |||||||
Sanofi | 3.6 | |||||||
Novartis AG | 2.4 | |||||||
TOTAL SE | 2.2 | |||||||
Barclays PLC | 2.1 | |||||||
Samsung Electronics Co. Ltd. | 1.9 | |||||||
Takeda Pharmaceutical Co. Ltd. | 1.8 | |||||||
Sumitomo Mitsui Financial Group, Inc. | 1.7 | |||||||
Enel SpA | 1.6 | |||||||
GlaxoSmithKline PLC | 1.6 | |||||||
BNP Paribas S.A. | 1.6 | |||||||
Total Fund Holdings | 141 | |||||||
Sector Allocation (% Equities) |
| |||||||
Financials | 22.6 | |||||||
Industrials | 17.5 | |||||||
Health Care | 14.4 | |||||||
Consumer Discretionary | 10.4 | |||||||
Information Technology | 8.2 | |||||||
Communication Services | 7.4 | |||||||
Consumer Staples | 5.5 | |||||||
Energy | 5.1 | |||||||
Materials | 4.5 | |||||||
Utilities | 3.3 | |||||||
Real Estate | 1.1 | |||||||
Country Allocation (% Equities) |
| |||||||
United Kingdom | 18.8 | |||||||
France | 17.3 | |||||||
Japan | 17.3 | |||||||
Germany | 9.9 | |||||||
Switzerland | 8.3 | |||||||
Netherlands | 4.3 | |||||||
Republic of Korea | 4.1 | |||||||
Spain | 4.1 | |||||||
Italy | 4.0 | |||||||
Canada | 2.7 | |||||||
United States | 1.3 | |||||||
Denmark | 1.3 | |||||||
Ireland | 1.1 | |||||||
China/Hong Kong | 1.0 | |||||||
Norway | 1.0 | |||||||
Finland | 0.7 | |||||||
Sweden | 0.7 | |||||||
Singapore | 0.6 | |||||||
Australia | 0.5 | |||||||
Israel | 0.4 | |||||||
Portugal | 0.3 | |||||||
South Africa | 0.3 |
3
American Beacon Tocqueville International Value FundSM
Performance Overview
April 30, 2021 (Unaudited)
The Investor Class returned 26.71% for the six-month period ending April 30, 2021, which underperformed the MSCI EAFE Index (Net) (the “Index”) return of 28.84% for the same period.
Total Returns for the Period ended April 30, 2021 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||||
R5 Class (1,3,5) | TOVIX | 26.90 | % | 49.21 | % | 5.64 | % | 7.80 | % | 5.55 | % | |||||||||||||||||||||
Y Class (1,2,5) | TOVYX | 26.83 | % | 49.17 | % | 5.56 | % | 7.75 | % | 5.52 | % | |||||||||||||||||||||
Investor Class (1,5) | TIVFX | 26.71 | % | 48.74 | % | 5.39 | % | 7.65 | % | 5.47 | % | |||||||||||||||||||||
MSCI EAFE Index (Net)** (4) | 28.84 | % | 39.88 | % | 6.27 | % | 8.87 | % | 5.22 | % |
* | Not Annualized. |
** | Reflects the reinvestment of dividends after the deduction of withholding taxes, using a tax rate applicable to non-resident individuals who do not benefit from double taxation treaties. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of fees charged to the Investor Class of the Fund was waived from Fund inception through 2019. Performance prior to waiving fees was lower than the actual returns shown for that period. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future. |
2. | Fund performance for the three-year, five-year and ten-year periods represents the total returns achieved by the Investor Class from 4/30/11 up to 1/18/19, the inception date of the Y Class. Expenses of the Y Class are lower than those of the Investor Class. As a result, total returns shown may be lower than they would have been had the Y Class been in existence since 4/30/11. |
3. | Fund performance for the three-year, five-year and ten-year periods represents the total returns achieved by the Investor Class from 4/30/11 up to 1/18/19, the inception date of the R5 Class. Expenses of the R5 Class are lower than those of the Investor Class. As a result, total returns shown may be lower than they would have been had the R5 Class been in existence since 4/30/11. A portion of fees charged to the R5 Class has been waived since Class inception. Performance prior to waiving fees was lower than the actual returns shown in 2019 and 2020. |
4. | The MSCI EAFE Index (Net) is a market capitalization weighted index of international stock performance composed of equities from developed markets excluding the U.S. and Canada. One cannot directly invest in an index. The MSCI information contained herein: (1) is provided “as is,” (2) is proprietary to MSCI and/or its content providers, (3) may not be used to create any financial instruments or products or any indexes and (4) may not be copied or distributed without MSCI’s express written consent. MSCI disclaims all warranties with respect to the information. Neither MSCI nor its content providers are responsible for any damages or losses arising from any use of this information. |
5. | The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y and Investor Class shares were 0.91%, 0.99%, and 1.18%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. |
The Fund underperformed the Index over the six-month period due to stock selection, while country allocation somewhat offset underperformance.
Stock selections within France and Hong Kong primarily weighed on the Fund’s relative performance, while stock selections in the United Kingdom added value. Detracting securities within France included Accor S.A. (down 38.3%), while in Hong Kong, Tencent Holdings Ltd., ADR (up 5.2%) and Shangri-La Asia Ltd. (down 1.5%) hurt performance. Meanwhile, the Fund’s investments in the United Kingdom, especially IMI PLC (up 66.5%) and ITV PLC (up 51.0%) helped relative performance during the prior six months.
From a country allocation perspective, an allocation to out-of-Index Korea (up 43.8%) and an overweight to France (up 40.2%) contributed the most to the Fund’s performance relative to the Index. On the other hand, an allocation to out-of-Index China (up 6.6%) partially detracted from performance during the period.
Although economic and market conditions vary from period to period, the Fund’s primary strategy of investing in undervalued companies with above-average earnings growth expectations remains consistent.
4
American Beacon Tocqueville International Value FundSM
Performance Overview
April 30, 2021 (Unaudited)
Top Ten Holdings (% Net Assets) |
| |||||||
Siemens AG, Sponsored ADR | 3.2 | |||||||
Samsung Electronics Co. Ltd. | 3.1 | |||||||
Hitachi Ltd. | 2.9 | |||||||
CRH PLC | 2.9 | |||||||
EssilorLuxottica S.A. | 2.8 | |||||||
Infineon Technologies AG | 2.8 | |||||||
FANUC Corp. | 2.7 | |||||||
Bureau Veritas S.A. | 2.6 | |||||||
Diageo PLC, Sponsored ADR | 2.6 | |||||||
Smiths Group PLC | 2.6 | |||||||
Total Fund Holdings | 53 | |||||||
Sector Allocation (% Equities) |
| |||||||
Industrials | 23.5 | |||||||
Consumer Discretionary | 15.0 | |||||||
Information Technology | 12.5 | |||||||
Consumer Staples | 11.0 | |||||||
Communication Services | 10.1 | |||||||
Health Care | 10.0 | |||||||
Materials | 8.7 | |||||||
Financials | 6.1 | |||||||
Energy | 2.0 | |||||||
Real Estate | 1.1 | |||||||
Country Allocation (% Equities) |
| |||||||
Japan | 22.0 | |||||||
Germany | 16.2 | |||||||
France | 15.3 | |||||||
United Kingdom | 13.3 | |||||||
Switzerland | 7.0 | |||||||
China/Hong Kong | 6.1 | |||||||
Canada | 3.6 | |||||||
Republic of Korea | 3.1 | |||||||
Ireland | 2.9 | |||||||
Mexico | 2.8 | |||||||
Belgium | 2.3 | |||||||
Australia | 2.0 | |||||||
Spain | 1.4 | |||||||
South Africa | 1.2 | |||||||
Taiwan | 0.8 |
5
American Beacon FundsSM
April 30, 2021 (Unaudited)
Fund Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees, if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from November 1, 2020 through April 30, 2021.
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 R5 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 R5 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
April 30, 2021 (Unaudited)
American Beacon International Equity Fund | |||||||||||||||
Beginning Account Value 11/1/2020 | Ending Account Value 4/30/2021 | Expenses Paid During Period 11/1/2020-4/30/2021* | |||||||||||||
R5 Class | |||||||||||||||
Actual | $1,000.00 | $1,370.80 | $4.17 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.27 | $3.56 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,370.20 | $4.58 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.93 | $3.91 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,368.70 | $6.11 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.64 | $5.21 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,368.30 | $6.93 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.94 | $5.91 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,368.00 | $6.52 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.29 | $5.56 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,363.30 | $10.78 | ||||||||||||
Hypothetical** | $1,000.00 | $1,015.67 | $9.20 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,370.40 | $4.06 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.37 | $3.46 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.71%, 0.78%, 1.04%, 1.18%, 1.11%, 1.84%, and 0.69% for the R5, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
American Beacon Tocqueville International Value Fund | |||||||||||||||
Beginning Account Value 11/1/2020 | Ending Account Value 4/30/2021 | Expenses Paid During Period 11/1/2020-4/30/2021* | |||||||||||||
R5 Class | |||||||||||||||
Actual | $1,000.00 | $1,269.00 | $5.01 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.38 | $4.46 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,268.30 | $5.29 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.13 | $4.71 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,267.10 | $6.63 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.94 | $5.91 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.89%, 0.94%, and 1.18% for the R5, Y, and Investor Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
7
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
Australia - 0.51% (Cost $6,377,703) | |||||||||||||||
Common Stocks - 0.51% | |||||||||||||||
BHP Group PLCA | 454,768 | $ | 13,739,307 | ||||||||||||
|
| ||||||||||||||
Canada - 2.63% | |||||||||||||||
Common Stocks - 2.63% | |||||||||||||||
Air CanadaB C | 847,500 | 17,078,937 | |||||||||||||
CAE, Inc. | 295,786 | 9,264,745 | |||||||||||||
Canadian National Railway Co. | 134,469 | 14,476,901 | |||||||||||||
Cogeco Communications, Inc. | 79,611 | 7,561,798 | |||||||||||||
Suncor Energy, Inc. | 583,561 | 12,481,649 | |||||||||||||
Teck Resources Ltd., Class B | 465,767 | 9,860,287 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 70,724,317 | ||||||||||||||
|
| ||||||||||||||
Total Canada (Cost $62,763,317) | 70,724,317 | ||||||||||||||
|
| ||||||||||||||
China/Hong Kong - 0.98% | |||||||||||||||
Common Stocks - 0.98% | |||||||||||||||
ArcelorMittal S.A.A C | 183,402 | 5,349,329 | |||||||||||||
ESR Cayman Ltd.A C D | 3,264,000 | 11,126,047 | |||||||||||||
Sands China Ltd.A C | 2,088,400 | 9,899,626 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 26,375,002 | ||||||||||||||
|
| ||||||||||||||
Total China/Hong Kong (Cost $18,598,134) | 26,375,002 | ||||||||||||||
|
| ||||||||||||||
Denmark - 1.22% | |||||||||||||||
Common Stocks - 1.22% | |||||||||||||||
Carlsberg A/S, Class BA | 89,990 | 15,763,654 | |||||||||||||
Vestas Wind Systems A/SA | 412,550 | 17,127,374 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 32,891,028 | ||||||||||||||
|
| ||||||||||||||
Total Denmark (Cost $16,988,505) | 32,891,028 | ||||||||||||||
|
| ||||||||||||||
Finland - 0.67% | |||||||||||||||
Common Stocks - 0.67% | |||||||||||||||
Nordea Bank AbpA | 1,100,556 | 11,432,768 | |||||||||||||
Sampo OYJ, Class AA | 137,523 | 6,544,752 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 17,977,520 | ||||||||||||||
|
| ||||||||||||||
Total Finland (Cost $17,324,928) | 17,977,520 | ||||||||||||||
|
| ||||||||||||||
France - 16.73% | |||||||||||||||
Common Stocks - 16.73% | |||||||||||||||
Air Liquide S.A.A | 112,245 | 18,905,472 | |||||||||||||
Airbus SEA C | 157,712 | 18,941,091 | |||||||||||||
Alstom S.A.A C | 369,520 | 20,180,500 | |||||||||||||
Atos SEA B C | 202,002 | 13,731,537 | |||||||||||||
AXA S.A.A B | 555,373 | 15,711,718 | |||||||||||||
BNP Paribas S.A.A C | 659,651 | 42,355,977 | |||||||||||||
Capgemini SEA | 51,462 | 9,425,997 | |||||||||||||
Carrefour S.A.A | 151,773 | 2,938,008 | |||||||||||||
Danone S.A.A | 207,697 | 14,637,489 | |||||||||||||
Engie S.A.A C | 1,573,979 | 23,401,368 | |||||||||||||
Ipsen S.A.A | 74,933 | 7,245,693 | |||||||||||||
Pernod Ricard S.A.A | 75,916 | 15,577,169 | |||||||||||||
Publicis Groupe S.A.A | 385,936 | 24,983,655 | |||||||||||||
Safran S.A.A C | 87,772 | 13,100,192 | |||||||||||||
SanofiA B | 928,536 | 97,366,770 | |||||||||||||
Societe Generale S.A.A C | 451,971 | 12,866,610 | |||||||||||||
TOTAL SEA | 1,363,090 | 60,347,929 |
See accompanying notes
8
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
France - 16.73% (continued) | |||||||||||||||
Common Stocks - 16.73% (continued) | |||||||||||||||
Valeo S.A.A | 130,403 | $ | 4,222,152 | ||||||||||||
Vinci S.A.A | 105,146 | 11,550,440 | |||||||||||||
Vivendi SEA | 651,968 | 22,726,247 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 450,216,014 | ||||||||||||||
|
| ||||||||||||||
Total France (Cost $378,003,045) | 450,216,014 | ||||||||||||||
|
| ||||||||||||||
Germany - 9.55% | |||||||||||||||
Common Stocks - 8.58% | |||||||||||||||
BASF SEA | 237,754 | 19,174,661 | |||||||||||||
Bayer AGA | 161,744 | 10,463,021 | |||||||||||||
Bayerische Motoren Werke AGA | 317,627 | 31,837,130 | |||||||||||||
Commerzbank AGA C | 2,242,166 | 14,801,583 | |||||||||||||
Continental AGA C | 69,525 | 9,417,131 | |||||||||||||
Daimler AGA | 353,005 | 31,417,685 | |||||||||||||
Infineon Technologies AGA | 443,624 | 17,914,996 | |||||||||||||
Merck KGaAA | 87,628 | 15,425,171 | |||||||||||||
ProSiebenSat.1 Media SEA C | 697,633 | 15,108,227 | |||||||||||||
RWE AGA | 508,176 | 19,255,397 | |||||||||||||
SAP SEA | 182,713 | 25,700,830 | |||||||||||||
Siemens AGA | 122,396 | 20,427,664 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 230,943,496 | ||||||||||||||
|
| ||||||||||||||
Preferred Stocks - 0.97% | |||||||||||||||
Volkswagen AGA E | 99,560 | 25,998,761 | |||||||||||||
|
| ||||||||||||||
Total Germany (Cost $179,799,950) | 256,942,257 | ||||||||||||||
|
| ||||||||||||||
Ireland - 1.03% (Cost $16,321,252) | |||||||||||||||
Common Stocks - 1.03% | |||||||||||||||
Ryanair Holdings PLC, Sponsored ADRC | 237,135 | 27,709,225 | |||||||||||||
|
| ||||||||||||||
Israel - 0.40% (Cost $9,526,205) | |||||||||||||||
Common Stocks - 0.40% | |||||||||||||||
Bank Leumi Le-Israel BMA | 1,539,064 | 10,818,020 | |||||||||||||
|
| ||||||||||||||
Italy - 3.86% | |||||||||||||||
Common Stocks - 3.86% | |||||||||||||||
Enel SpAA | 4,430,602 | 44,131,342 | |||||||||||||
Eni SpAA | 1,784,081 | 21,287,482 | |||||||||||||
Saras SpAA B C | 60,002 | 41,398 | |||||||||||||
UniCredit SpAA | 3,708,605 | 38,310,414 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 103,770,636 | ||||||||||||||
|
| ||||||||||||||
Total Italy (Cost $107,882,212) | 103,770,636 | ||||||||||||||
|
| ||||||||||||||
Japan - 16.64% | |||||||||||||||
Common Stocks - 16.64% | |||||||||||||||
Alfresa Holdings Corp.A | 774,200 | 13,866,959 | |||||||||||||
Daiwa House Industry Co., Ltd.A | 549,155 | 16,263,115 | |||||||||||||
Digital Garage, Inc.A | 180,900 | 7,444,959 | |||||||||||||
Dowa Holdings Co., Ltd.A | 160,500 | 6,694,328 | |||||||||||||
FANUC Corp.A | 87,200 | 20,104,898 | |||||||||||||
Fujitsu Ltd.A | 75,084 | 11,895,122 | |||||||||||||
Haseko Corp.A | 1,113,100 | 14,928,056 | |||||||||||||
Hazama Ando Corp.A | 550,700 | 4,198,191 |
See accompanying notes
9
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
Japan - 16.64% (continued) | |||||||||||||||
Common Stocks - 16.64% (continued) | |||||||||||||||
Hitachi Ltd.A | 522,400 | $ | 25,736,744 | ||||||||||||
Makita Corp.A | 320,900 | 14,435,802 | |||||||||||||
Matsumotokiyoshi Holdings Co. Ltd.A | 132,600 | 5,336,501 | |||||||||||||
Mitsubishi UFJ Financial Group, Inc.A | 6,535,900 | 34,926,889 | |||||||||||||
Mizuho Financial Group, Inc.A | 1,372,080 | 19,543,652 | |||||||||||||
Murata Manufacturing Co. Ltd.A | 267,600 | 21,252,651 | |||||||||||||
Nexon Co. Ltd.A | 556,459 | 18,440,577 | |||||||||||||
Nintendo Co. Ltd.A | 22,600 | 12,947,960 | |||||||||||||
Nippon Television Holdings, Inc.A | 281,600 | 3,685,949 | |||||||||||||
Nissan Motor Co. Ltd.A B C | 4,775,200 | 23,949,593 | |||||||||||||
Ryohin Keikaku Co. Ltd.A | 363,100 | 7,646,051 | |||||||||||||
Sompo Holdings, Inc.A | 155,600 | 5,784,532 | |||||||||||||
Sumitomo Mitsui Financial Group, Inc.A | 1,351,600 | 47,057,035 | |||||||||||||
Sumitomo Rubber Industries Ltd.A | 662,100 | 8,194,839 | |||||||||||||
Suzuken Co. Ltd.A | 308,900 | 11,128,990 | |||||||||||||
Suzuki Motor Corp.A | 251,700 | 9,561,614 | |||||||||||||
Taisei Corp.A | 423,400 | 15,621,352 | |||||||||||||
Takeda Pharmaceutical Co. Ltd.A | 1,470,300 | 49,175,445 | |||||||||||||
Toho Holdings Co. Ltd.A | 263,400 | 4,448,289 | |||||||||||||
Yamaha Corp.A | 250,700 | 13,656,426 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 447,926,519 | ||||||||||||||
|
| ||||||||||||||
Total Japan (Cost $420,306,611) | 447,926,519 | ||||||||||||||
|
| ||||||||||||||
Netherlands - 4.19% | |||||||||||||||
Common Stocks - 4.19% | |||||||||||||||
Aegon N.V.A | 5,486,405 | 25,508,630 | |||||||||||||
Akzo Nobel N.V.A | 282,458 | 33,918,951 | |||||||||||||
ING Groep N.V.A | 1,196,185 | 15,292,996 | |||||||||||||
JDE Peet’s N.V.A C | 195,312 | 7,591,185 | |||||||||||||
NN Group N.V.A | 290,043 | 14,499,325 | |||||||||||||
Wolters Kluwer N.V.A | 175,461 | 15,882,482 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 112,693,569 | ||||||||||||||
|
| ||||||||||||||
Total Netherlands (Cost $82,337,430) | 112,693,569 | ||||||||||||||
|
| ||||||||||||||
Norway - 0.94% | |||||||||||||||
Common Stocks - 0.94% | |||||||||||||||
Equinor ASAA | 529,726 | 10,714,685 | |||||||||||||
Telenor ASAA | 822,828 | 14,683,641 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 25,398,326 | ||||||||||||||
|
| ||||||||||||||
Total Norway (Cost $23,359,196) | 25,398,326 | ||||||||||||||
|
| ||||||||||||||
Portugal - 0.33% (Cost $8,544,895) | |||||||||||||||
Common Stocks - 0.33% | |||||||||||||||
Galp Energia SGPS S.A.A | 770,732 | 8,878,849 | |||||||||||||
|
| ||||||||||||||
Republic of Korea - 3.94% | |||||||||||||||
Common Stocks - 3.94% | |||||||||||||||
Hana Financial Group, Inc.A | 96,407 | 3,952,771 | |||||||||||||
Hyundai Mobis Co., Ltd.A | 74,506 | 18,017,898 | |||||||||||||
Hyundai Motor Co.A | 58,055 | 11,009,135 | |||||||||||||
Samsung Electronics Co. Ltd.A | 696,796 | 50,916,495 | |||||||||||||
SK Hynix, Inc.A | 192,391 | 22,027,334 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 105,923,633 | ||||||||||||||
|
| ||||||||||||||
Total Republic of Korea (Cost $65,902,778) | 105,923,633 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
10
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
Singapore - 0.54% (Cost $9,138,906) | |||||||||||||||
Common Stocks - 0.54% | |||||||||||||||
DBS Group Holdings Ltd.A | 648,010 | $ | 14,573,456 | ||||||||||||
|
| ||||||||||||||
South Africa - 0.32% (Cost $8,375,087) | |||||||||||||||
Common Stocks - 0.32% | |||||||||||||||
Anglo American PLCA | 204,473 | 8,682,572 | |||||||||||||
|
| ||||||||||||||
Spain - 3.92% | |||||||||||||||
Common Stocks - 3.92% | |||||||||||||||
Aena SME S.A.A C D | 89,969 | 15,647,544 | |||||||||||||
Amadeus IT Group S.A.A C | 372,340 | 25,354,908 | |||||||||||||
Banco Bilbao Vizcaya Argentaria S.A.A | 3,551,129 | 19,897,972 | |||||||||||||
Banco Santander S.A.A C | 3,678,877 | 14,213,001 | |||||||||||||
CaixaBank S.A.A | 5,002,723 | 16,045,494 | |||||||||||||
Indra Sistemas S.A.A C | 500,060 | 5,207,699 | |||||||||||||
Industria de Diseno Textil S.A. | 76,787 | 2,753,116 | |||||||||||||
Telefonica S.A.A | 1,385,159 | 6,424,844 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 105,544,578 | ||||||||||||||
|
| ||||||||||||||
Total Spain (Cost $79,907,160) | 105,544,578 | ||||||||||||||
|
| ||||||||||||||
Sweden - 0.64% (Cost $14,658,293) | |||||||||||||||
Common Stocks - 0.64% | |||||||||||||||
Sandvik ABA B | 697,229 | 17,222,848 | |||||||||||||
|
| ||||||||||||||
Switzerland - 7.99% | |||||||||||||||
Common Stocks - 7.99% | |||||||||||||||
ABB Ltd.A | 1,084,703 | 35,212,387 | |||||||||||||
Cie Financiere Richemont S.A.A | 138,725 | 14,234,737 | |||||||||||||
Credit Suisse Group AGA | 4,006,148 | 42,254,559 | |||||||||||||
Novartis AGA | 769,872 | 65,761,285 | |||||||||||||
Roche Holding AGA | 71,479 | 23,288,538 | |||||||||||||
UBS Group AGA | 1,072,290 | 16,401,013 | |||||||||||||
Zurich Insurance Group AGA | 43,774 | 17,964,239 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 215,116,758 | ||||||||||||||
|
| ||||||||||||||
Rights - 0.00% | |||||||||||||||
Credit Suisse Group AGB C | 4,006,148 | - | |||||||||||||
|
| ||||||||||||||
Total Switzerland (Cost $194,381,983) | 215,116,758 | ||||||||||||||
|
| ||||||||||||||
United Kingdom - 18.12% | |||||||||||||||
Common Stocks - 18.12% | |||||||||||||||
3i Group PLCA | 541,513 | 9,584,631 | |||||||||||||
AstraZeneca PLC, Sponsored ADRB | 627,544 | 33,303,760 | |||||||||||||
Babcock International Group PLCA C | 3,436,511 | 13,665,789 | |||||||||||||
BAE Systems PLCA | 1,810,782 | 12,671,833 | |||||||||||||
Balfour Beatty PLCA C | 943,028 | 4,066,575 | |||||||||||||
Barclays PLCA | 22,979,529 | 55,670,741 | |||||||||||||
BP PLCA | 4,393,040 | 18,338,666 | |||||||||||||
British American Tobacco PLCA | 389,108 | 14,437,309 | |||||||||||||
BT Group PLCA C | 8,410,716 | 19,155,451 | |||||||||||||
Capita PLCA C | 3,318,472 | 2,003,268 | |||||||||||||
Compass Group PLCA C | 214,874 | 4,664,506 | |||||||||||||
GlaxoSmithKline PLCA | 2,308,280 | 42,696,436 | |||||||||||||
Imperial Brands PLCA | 907,137 | 18,880,764 | |||||||||||||
Informa PLCA C | 1,295,204 | 10,052,398 | |||||||||||||
International Consolidated Airlines Group S.A.A C | 2,229,442 | 6,240,160 | |||||||||||||
Kingfisher PLCA C | 1,318,146 | 6,503,408 |
See accompanying notes
11
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
United Kingdom - 18.12% (continued) | |||||||||||||||
Common Stocks - 18.12% (continued) | |||||||||||||||
Prudential PLCA | 1,526,994 | $ | 32,345,158 | ||||||||||||
RELX PLCA | 1,422,493 | 36,933,482 | |||||||||||||
Rolls-Royce Holdings PLCA C | 22,027,807 | 31,874,696 | |||||||||||||
Standard Chartered PLCA | 1,225,617 | 8,796,986 | |||||||||||||
Taylor Wimpey PLCA | 4,800,863 | 11,902,827 | |||||||||||||
Tesco PLCA | 4,256,441 | 12,987,004 | |||||||||||||
Unilever PLCA | 606,712 | 35,574,238 | |||||||||||||
WH Smith PLCA C | 403,111 | 10,070,486 | |||||||||||||
WPP PLCA | 2,627,523 | 35,389,694 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 487,810,266 | ||||||||||||||
|
| ||||||||||||||
Total United Kingdom (Cost $465,267,031) | 487,810,266 | ||||||||||||||
|
| ||||||||||||||
United States - 1.27% | |||||||||||||||
Common Stocks - 1.27% | |||||||||||||||
Aon PLC, Class A | 80,558 | 20,255,504 | |||||||||||||
Ferguson PLCA | 110,712 | 13,959,963 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 34,215,467 | ||||||||||||||
|
| ||||||||||||||
Total United States (Cost $15,250,153) | 34,215,467 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 3.09% (Cost $83,294,087) | |||||||||||||||
Investment Companies - 3.09% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%F G | 83,294,087 | 83,294,087 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 2.35% (Cost $63,186,402) | |||||||||||||||
Investment Companies - 2.35% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%F G | 63,186,402 | 63,186,402 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 101.86% (Cost $2,347,495,263) | 2,741,630,656 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (1.86%) | (50,193,032 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 2,691,437,624 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $2,440,404,245 or 90.67% of net assets.
B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at April 30, 2021 (Note 9).
C Non-income producing security.
D Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $26,773,591 or 0.99% of net assets. The Fund has no right to demand registration of these securities.
E A type of Preferred Stock that has no maturity date.
F The Fund is affiliated by having the same investment advisor.
G 7-day yield.
ADR - American Depositary Receipt.
PLC - Public Limited Company.
Long Futures Contracts Open on April 30, 2021: | ||||||||||||||||||
Equity Futures Contracts | ||||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||||
MSCI EAFE Index Futures | 807 | June 2021 | $ | 90,700,348 | $ | 91,082,055 | $ | 381,707 | ||||||||||
|
|
|
|
|
| |||||||||||||
$ | 90,700,348 | $ | 91,082,055 | $ | 381,707 | |||||||||||||
|
|
|
|
|
|
See accompanying notes
12
American Beacon International Equity FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Index Abbreviations: | ||
MSCI EAFE | Morgan Stanley Capital International - Europe, Australasia, and Far East. |
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2021, the investments were classified as described below:
International Equity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets |
| |||||||||||||||||||||||||||
Foreign Common Stocks |
| |||||||||||||||||||||||||||
Australia | $ | - | $ | 13,739,307 | $ | - | $ | 13,739,307 | ||||||||||||||||||||
Canada | 70,724,317 | - | - | 70,724,317 | ||||||||||||||||||||||||
China/Hong Kong | - | 26,375,002 | - | 26,375,002 | ||||||||||||||||||||||||
Denmark | - | 32,891,028 | - | 32,891,028 | ||||||||||||||||||||||||
Finland | - | 17,977,520 | - | 17,977,520 | ||||||||||||||||||||||||
France | - | 450,216,014 | - | 450,216,014 | ||||||||||||||||||||||||
Germany | - | 230,943,496 | - | 230,943,496 | ||||||||||||||||||||||||
Ireland | 27,709,225 | - | - | 27,709,225 | ||||||||||||||||||||||||
Israel | - | 10,818,020 | - | 10,818,020 | ||||||||||||||||||||||||
Italy | - | 103,770,636 | - | 103,770,636 | ||||||||||||||||||||||||
Japan | - | 447,926,519 | - | 447,926,519 | ||||||||||||||||||||||||
Netherlands | - | 112,693,569 | - | 112,693,569 | ||||||||||||||||||||||||
Norway | - | 25,398,326 | - | 25,398,326 | ||||||||||||||||||||||||
Portugal | - | 8,878,849 | - | 8,878,849 | ||||||||||||||||||||||||
Republic of Korea | - | 105,923,633 | - | 105,923,633 | ||||||||||||||||||||||||
Singapore | - | 14,573,456 | - | 14,573,456 | ||||||||||||||||||||||||
South Africa | - | 8,682,572 | - | 8,682,572 | ||||||||||||||||||||||||
Spain | 2,753,116 | 102,791,462 | - | 105,544,578 | ||||||||||||||||||||||||
Sweden | - | 17,222,848 | - | 17,222,848 | ||||||||||||||||||||||||
Switzerland | - | 215,116,758 | - | 215,116,758 | ||||||||||||||||||||||||
United Kingdom | 33,303,760 | 454,506,506 | - | 487,810,266 | ||||||||||||||||||||||||
Foreign Preferred Stocks |
| |||||||||||||||||||||||||||
Germany | - | 25,998,761 | - | 25,998,761 | ||||||||||||||||||||||||
Foreign Rights |
| |||||||||||||||||||||||||||
Switzerland | - | - | - | - | ||||||||||||||||||||||||
Common Stocks |
| |||||||||||||||||||||||||||
United States | 20,255,504 | 13,959,963 | - | 34,215,467 | ||||||||||||||||||||||||
Short-Term Investments | 83,294,087 | - | - | 83,294,087 | ||||||||||||||||||||||||
Securities Lending Collateral | 63,186,402 | - | - | 63,186,402 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 301,226,411 | $ | 2,440,404,245 | $ | - | $ | 2,741,630,656 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets |
| |||||||||||||||||||||||||||
Futures Contracts | $ | 381,707 | $ | - | $ | - | $ | 381,707 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 381,707 | $ | - | $ | - | $ | 381,707 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the period ended April 30, 2021, there were no transfers into or out of Level 3.
See accompanying notes
13
American Beacon Tocqueville International Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares/Par Amount | Fair Value | ||||||||||||||
Australia - 2.01% (Cost $4,263,423) | |||||||||||||||
Common Stocks - 2.01% | |||||||||||||||
BHP Group Ltd., Sponsored ADRA | 104,200 | $ | 7,581,592 | ||||||||||||
|
| ||||||||||||||
Belgium - 2.24% (Cost $6,414,791) | |||||||||||||||
Common Stocks - 2.24% | |||||||||||||||
Groupe Bruxelles Lambert S.A.B | 77,312 | 8,454,426 | |||||||||||||
|
| ||||||||||||||
Canada - 3.55% | |||||||||||||||
Common Stocks - 3.55% | |||||||||||||||
Nutrien Ltd. | 106,000 | 5,850,140 | |||||||||||||
Restaurant Brands International, Inc. | 110,000 | 7,547,100 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 13,397,240 | ||||||||||||||
|
| ||||||||||||||
Total Canada (Cost $10,895,560) | 13,397,240 | ||||||||||||||
|
| ||||||||||||||
China/Hong Kong - 5.97% | |||||||||||||||
Common Stocks - 5.97% | |||||||||||||||
Alibaba Group Holding Ltd., Sponsored ADRC | 31,200 | 7,205,640 | |||||||||||||
Shangri-La Asia Ltd.B C | 3,509,000 | 3,340,610 | |||||||||||||
Swire Pacific Ltd., Class AB | 500,000 | 4,038,384 | |||||||||||||
Tencent Holdings Ltd., ADRA | 100,000 | 7,966,000 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 22,550,634 | ||||||||||||||
|
| ||||||||||||||
Total China (Cost $17,513,566) | 22,550,634 | ||||||||||||||
|
| ||||||||||||||
France - 15.10% | |||||||||||||||
Common Stocks - 15.10% | |||||||||||||||
Accor S.A.B C | 135,000 | 5,430,762 | |||||||||||||
Bollore S.A.B | 1,852,220 | 9,349,031 | |||||||||||||
Bureau Veritas S.A.B C | 327,998 | 9,810,213 | |||||||||||||
Danone S.A.A B | 54,400 | 3,833,851 | |||||||||||||
EssilorLuxottica S.A.B | 63,300 | 10,530,318 | |||||||||||||
SanofiA B | 86,081 | 9,026,499 | |||||||||||||
Vivendi SEB | 261,000 | 9,097,917 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 57,078,591 | ||||||||||||||
|
| ||||||||||||||
Total France (Cost $44,243,531) | 57,078,591 | ||||||||||||||
|
| ||||||||||||||
Germany - 15.96% | |||||||||||||||
Common Stocks - 13.63% | |||||||||||||||
adidas AGB C | 24,000 | 7,411,259 | |||||||||||||
Duerr AGB | 148,982 | 6,261,516 | |||||||||||||
GEA Group AGB | 105,064 | 4,611,209 | |||||||||||||
Infineon Technologies AGB | 259,400 | 10,475,425 | |||||||||||||
KION Group AGB | 48,888 | 4,874,934 | |||||||||||||
Siemens AG, Sponsored ADR | 146,400 | 12,203,904 | |||||||||||||
Software AGB | 130,900 | 5,675,525 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 51,513,772 | ||||||||||||||
|
| ||||||||||||||
Preferred Stocks - 2.33% | |||||||||||||||
Henkel AG & Co. KGaAB D | 76,800 | 8,821,237 | |||||||||||||
|
| ||||||||||||||
Total Germany (Cost $39,878,625) | 60,335,009 | ||||||||||||||
|
| ||||||||||||||
Ireland - 2.91% (Cost $7,611,535) | |||||||||||||||
Common Stocks - 2.91% | |||||||||||||||
CRH PLCB | 232,375 | 10,980,518 | |||||||||||||
|
| ||||||||||||||
See accompanying notes
14
American Beacon Tocqueville International Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares/Par Amount | Fair Value | ||||||||||||||
Japan - 21.77% | |||||||||||||||
Common Stocks - 21.77% | |||||||||||||||
Amano Corp.B | 314,103 | $ | 8,536,398 | ||||||||||||
Asahi Group Holdings Ltd.B | 171,300 | 7,158,911 | |||||||||||||
FANUC Corp.B | 43,900 | 10,121,617 | |||||||||||||
Hitachi Ltd.B | 223,868 | 11,029,161 | |||||||||||||
Hoya Corp.B | 55,600 | 6,330,234 | |||||||||||||
Kao Corp.B | 74,200 | 4,766,118 | |||||||||||||
Makita Corp.B | 156,500 | 7,040,209 | |||||||||||||
Rohm Co. Ltd.B | 74,100 | 7,318,241 | |||||||||||||
Sony Group Corp., Sponsored ADR | 86,800 | 8,693,888 | |||||||||||||
TBS Holdings, Inc.B | 283,500 | 5,522,649 | |||||||||||||
Toyota Industries Corp.B | 71,800 | 5,751,037 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 82,268,463 | ||||||||||||||
|
| ||||||||||||||
Total Japan (Cost $58,482,017) | 82,268,463 | ||||||||||||||
|
| ||||||||||||||
Mexico - 2.77% | |||||||||||||||
Common Stocks - 2.77% | |||||||||||||||
Fomento Economico Mexicano S.A.B. de C.V., Series B, Sponsored ADR | 63,400 | 4,913,500 | |||||||||||||
Grupo Televisa S.A.B., ADRC | 450,000 | 5,571,000 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 10,484,500 | ||||||||||||||
|
| ||||||||||||||
Total Mexico (Cost $7,905,254) | 10,484,500 | ||||||||||||||
|
| ||||||||||||||
Republic of Korea - 3.10% (Cost $5,361,805) | |||||||||||||||
Preferred Stocks - 3.10% | |||||||||||||||
Samsung Electronics Co. Ltd.B D | 178,800 | 11,733,768 | |||||||||||||
|
| ||||||||||||||
South Africa - 1.19% (Cost $3,549,353) | |||||||||||||||
Common Stocks - 1.19% | |||||||||||||||
Impala Platinum Holdings Ltd.B | 240,900 | 4,510,090 | |||||||||||||
|
| ||||||||||||||
Spain - 1.37% (Cost $4,901,596) | |||||||||||||||
Common Stocks - 1.37% | |||||||||||||||
Applus Services S.A.B C | 488,507 | 5,166,871 | |||||||||||||
|
| ||||||||||||||
Switzerland - 6.87% | |||||||||||||||
Common Stocks - 6.87% | |||||||||||||||
Alcon, Inc.A C | 103,000 | 7,769,290 | |||||||||||||
Novartis AG, Sponsored ADR | 78,000 | 6,648,720 | |||||||||||||
Roche Holding AGB | 10,900 | 3,551,324 | |||||||||||||
UBS Group AGA C | 522,460 | 7,988,413 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 25,957,747 | ||||||||||||||
|
| ||||||||||||||
Total Switzerland (Cost $20,849,949) | 25,957,747 | ||||||||||||||
|
| ||||||||||||||
Taiwan - 0.81% (Cost $1,158,352) | |||||||||||||||
Common Stocks - 0.81% | |||||||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., Sponsored ADR | 26,100 | 3,046,914 | |||||||||||||
|
| ||||||||||||||
United Kingdom - 13.12% | |||||||||||||||
Common Stocks - 13.12% | |||||||||||||||
BP PLC, Sponsored ADR | 304,000 | 7,648,640 | |||||||||||||
Diageo PLC, Sponsored ADR | 54,200 | 9,720,770 | |||||||||||||
HSBC Holdings PLC, ADRA | 201,700 | 6,297,074 | |||||||||||||
IMI PLCB | 306,800 | 6,756,703 | |||||||||||||
Johnson Matthey PLCB | 80,000 | 3,589,839 | |||||||||||||
Smith & Nephew PLCB | 184,000 | 3,989,613 |
See accompanying notes
15
American Beacon Tocqueville International Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares/Par Amount | Fair Value | ||||||||||||||
United Kingdom - 13.12% (continued) | |||||||||||||||
Common Stocks - 13.12% (continued) | |||||||||||||||
Smiths Group PLCB | 432,400 | $ | 9,703,377 | ||||||||||||
Unilever PLC, Sponsored ADR | 32,000 | 1,879,040 | |||||||||||||
|
| ||||||||||||||
Total Common Stocks | 49,585,056 | ||||||||||||||
|
| ||||||||||||||
Total United Kingdom (Cost $38,639,969) | 49,585,056 | ||||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 5.77% (Cost $21,797,557) | |||||||||||||||
Investment Companies - 5.77% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%E F | 21,797,557 | 21,797,557 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 104.51% (Cost $293,466,883) | 394,928,976 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (4.51%) | (17,026,506 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 377,902,470 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at April 30, 2021 (Note 9).
B Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $254,599,794 or 67.37% of net assets.
C Non-income producing security.
D A type of Preferred Stock that has no maturity date.
E 7-day yield.
F The Fund is affiliated by having the same investment advisor.
ADR - American Depositary Receipt.
PLC - Public Limited Company.
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2021, the investments were classified as described below:
Tocqueville International Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets |
| |||||||||||||||||||||||||||
Foreign Common Stocks |
| |||||||||||||||||||||||||||
Australia | $ | 7,581,592 | $ | - | $ | - | $ | 7,581,592 | ||||||||||||||||||||
Belgium | - | 8,454,426 | - | 8,454,426 | ||||||||||||||||||||||||
Canada | 13,397,240 | - | - | 13,397,240 | ||||||||||||||||||||||||
China/Hong Kong | 15,171,640 | 7,378,994 | - | 22,550,634 | ||||||||||||||||||||||||
France | - | 57,078,591 | - | 57,078,591 | ||||||||||||||||||||||||
Germany | 12,203,904 | 39,309,868 | - | 51,513,772 | ||||||||||||||||||||||||
Ireland | - | 10,980,518 | - | 10,980,518 | ||||||||||||||||||||||||
Japan | 8,693,888 | 73,574,575 | - | 82,268,463 | ||||||||||||||||||||||||
Mexico | 10,484,500 | - | - | 10,484,500 | ||||||||||||||||||||||||
South Africa | - | 4,510,090 | - | 4,510,090 | ||||||||||||||||||||||||
Spain | - | 5,166,871 | - | 5,166,871 | ||||||||||||||||||||||||
Switzerland | 22,406,423 | 3,551,324 | - | 25,957,747 | ||||||||||||||||||||||||
Taiwan | 3,046,914 | - | - | 3,046,914 | ||||||||||||||||||||||||
United Kingdom | 25,545,524 | 24,039,532 | - | 49,585,056 | ||||||||||||||||||||||||
Foreign Preferred Stocks |
| |||||||||||||||||||||||||||
Germany | - | 8,821,237 | - | 8,821,237 | ||||||||||||||||||||||||
Republic of Korea | - | 11,733,768 | - | 11,733,768 | ||||||||||||||||||||||||
Securities Lending Collateral | 21,797,557 | - | - | 21,797,557 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 140,329,182 | $ | 254,599,794 | $ | - | $ | 394,928,976 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the period ended April 30, 2021, there were no transfers into or out of Level 3.
See accompanying notes
16
American Beacon FundsSM
Statements of Assets and Liabilities
April 30, 2021 (Unaudited)
International Equity Fund | Tocqueville International Value Fund | |||||||||||
Assets: |
| |||||||||||
Investments in unaffiliated securities, at fair value†§ | $ | 2,595,150,167 | $ | 373,131,419 | ||||||||
Investments in affiliated securities, at fair value‡ | 146,480,489 | 21,797,557 | ||||||||||
Foreign currency, at fair value¤ | 1,023,999 | - | ||||||||||
Cash | 5,511 | - | ||||||||||
Cash collateral held at broker for futures contracts | 6,307,000 | - | ||||||||||
Dividends and interest receivable | 10,942,090 | 697,687 | ||||||||||
Receivable for investments sold | 3,199,582 | 3,474,587 | ||||||||||
Receivable for fund shares sold | 2,839,574 | 634,811 | ||||||||||
Receivable for tax reclaims | 4,976,816 | 2,515,085 | ||||||||||
Receivable for variation margin on open futures contracts (Note 5) | 383,490 | - | ||||||||||
Prepaid expenses | 119,908 | 44,681 | ||||||||||
|
|
|
| |||||||||
Total assets | 2,771,428,626 | 402,295,827 | ||||||||||
|
|
|
| |||||||||
Liabilities: |
| |||||||||||
Payable for investments purchased | 9,134,740 | 1,615,734 | ||||||||||
Payable for foreign currency, at fair value^ | - | 363,499 | ||||||||||
Payable for fund shares redeemed | 2,968,605 | 83,639 | ||||||||||
Payable for expense recoupment (Note 2) | 4,913 | 56,352 | ||||||||||
Cash due to broker for futures contracts | 1,553,125 | - | ||||||||||
Management and sub-advisory fees payable (Note 2) | 2,384,123 | 211,596 | ||||||||||
Service fees payable (Note 2) | 50,912 | 43,120 | ||||||||||
Transfer agent fees payable (Note 2) | 138,582 | 18,475 | ||||||||||
Payable upon return of securities loaned (Note 9)§ | 63,186,402 | 21,797,557 | ||||||||||
Custody and fund accounting fees payable | 277,955 | 83,029 | ||||||||||
Professional fees payable | 132,474 | 41,727 | ||||||||||
Trustee fees payable (Note 2) | 28,072 | 5,519 | ||||||||||
Payable for prospectus and shareholder reports | 94,835 | 48,405 | ||||||||||
Other liabilities | 36,264 | 24,705 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 79,991,002 | 24,393,357 | ||||||||||
|
|
|
| |||||||||
Net assets | $ | 2,691,437,624 | $ | 377,902,470 | ||||||||
|
|
|
| |||||||||
Analysis of net assets: |
| |||||||||||
Paid-in-capital | $ | 2,354,390,412 | $ | 296,898,395 | ||||||||
Total distributable earnings (deficits)A | 337,047,212 | 81,004,075 | ||||||||||
|
|
|
| |||||||||
Net assets | $ | 2,691,437,624 | $ | 377,902,470 | ||||||||
|
|
|
|
See accompanying notes
17
American Beacon FundsSM
Statements of Assets and Liabilities
April 30, 2021 (Unaudited)
International Equity Fund | Tocqueville International Value Fund | |||||||||||
Shares outstanding at no par value (unlimited shares authorized): |
| |||||||||||
R5 Class | 64,387,399 | 1,120,182 | ||||||||||
|
|
|
| |||||||||
Y Class | 41,481,810 | 7,462,256 | ||||||||||
|
|
|
| |||||||||
Investor Class | 6,317,091 | 10,630,604 | ||||||||||
|
|
|
| |||||||||
Advisor Class | 944,003 | N/A | ||||||||||
|
|
|
| |||||||||
A Class | 548,182 | N/A | ||||||||||
|
|
|
| |||||||||
C Class | 236,896 | N/A | ||||||||||
|
|
|
| |||||||||
R6 Class | 19,811,286 | N/A | ||||||||||
|
|
|
| |||||||||
Net assets: |
| |||||||||||
R5 Class | $ | 1,278,618,363 | $ | 21,996,197 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 859,864,037 | $ | 146,463,381 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 124,429,185 | $ | 209,442,892 | ||||||||
|
|
|
| |||||||||
Advisor Class | $ | 19,140,219 | $ | N/A | ||||||||
|
|
|
| |||||||||
A Class | $ | 10,774,133 | $ | N/A | ||||||||
|
|
|
| |||||||||
C Class | $ | 4,490,980 | $ | N/A | ||||||||
|
|
|
| |||||||||
R6 Class | $ | 394,120,707 | $ | N/A | ||||||||
|
|
|
| |||||||||
Net asset value, offering and redemption price per share: |
| |||||||||||
R5 Class | $ | 19.86 | $ | 19.64 | ||||||||
|
|
|
| |||||||||
Y Class | $ | 20.73 | $ | 19.63 | ||||||||
|
|
|
| |||||||||
Investor Class | $ | 19.70 | $ | 19.70 | ||||||||
|
|
|
| |||||||||
Advisor Class | $ | 20.28 | $ | N/A | ||||||||
|
|
|
| |||||||||
A Class | $ | 19.65 | $ | N/A | ||||||||
|
|
|
| |||||||||
A Class (offering price) | $ | 20.85 | $ | N/A | ||||||||
|
|
|
| |||||||||
C Class | $ | 18.96 | $ | N/A | ||||||||
|
|
|
| |||||||||
R6 Class | $ | 19.89 | $ | N/A | ||||||||
|
|
|
| |||||||||
† Cost of investments in unaffiliated securities | $ | 2,201,014,774 | $ | 271,669,326 | ||||||||
‡ Cost of investments in affiliated securities | $ | 146,480,489 | $ | 21,797,557 | ||||||||
§ Fair value of securities on loan | $ | 111,001,014 | $ | 45,323,415 | ||||||||
¤ Cost of foreign currency | $ | 1,011,772 | $ | - | ||||||||
^ Cost of payable for foreign currency | $ | - | $ | (366,071 | ) | |||||||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
18
American Beacon FundsSM
Statements of Operations
For the period ended April 30, 2021 (Unaudited)
International Equity Fund | Tocqueville International Value Fund | |||||||||||
Investment income: |
| |||||||||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 33,413,449 | A | $ | 4,504,723 | B | ||||||
Dividend income from affiliated securities (Note 2) | 3,160 | 199 | ||||||||||
Income derived from securities lending (Note 9) | 121,120 | 35,362 | ||||||||||
|
|
|
| |||||||||
Total investment income | 33,537,729 | 4,540,284 | ||||||||||
|
|
|
| |||||||||
Expenses: |
| |||||||||||
Management and sub-advisory fees (Note 2) | 7,791,474 | 1,402,123 | ||||||||||
Transfer agent fees: | ||||||||||||
R5 Class (Note 2) | 180,424 | 5,437 | ||||||||||
Y Class (Note 2) | 441,594 | 70,567 | ||||||||||
Investor Class | 3,869 | 6,777 | ||||||||||
Advisor Class | 860 | - | ||||||||||
A Class | 1,618 | - | ||||||||||
C Class | 1,399 | - | ||||||||||
R6 Class | 10,095 | - | ||||||||||
Custody and fund accounting fees | 342,877 | 48,777 | ||||||||||
Professional fees | 118,845 | 42,492 | ||||||||||
Registration fees and expenses | 73,752 | 28,203 | ||||||||||
Service fees (Note 2): | ||||||||||||
Investor Class | 192,335 | 372,369 | ||||||||||
Advisor Class | 23,264 | - | ||||||||||
A Class | 8,629 | - | ||||||||||
C Class | 2,303 | - | ||||||||||
Distribution fees (Note 2): | ||||||||||||
Advisor Class | 24,104 | - | ||||||||||
A Class | 14,081 | - | ||||||||||
C Class | 22,004 | - | ||||||||||
Prospectus and shareholder report expenses | 137,162 | - | ||||||||||
Trustee fees (Note 2) | 94,734 | 15,780 | ||||||||||
Loan expense (Note 10) | 6,417 | 1,679 | ||||||||||
Other expenses | 135,464 | 21,092 | ||||||||||
|
|
|
| |||||||||
Total expenses | 9,627,304 | 2,015,296 | ||||||||||
|
|
|
| |||||||||
Net fees waived and expenses (reimbursed) (Note 2) | - | (604 | ) | |||||||||
|
|
|
| |||||||||
Net expenses | 9,627,304 | 2,014,692 | ||||||||||
|
|
|
| |||||||||
Net investment income | 23,910,425 | 2,525,592 | ||||||||||
|
|
|
| |||||||||
Realized and unrealized gain (loss) from investments: |
| |||||||||||
Net realized gain (loss) from: | ||||||||||||
Investments in unaffiliated securitiesC | 92,435,287 | 24,386,244 | ||||||||||
Commission recapture (Note 1) | 9,786 | - | ||||||||||
Foreign currency transactions | 389,979 | (172,872 | ) | |||||||||
Futures contracts | 16,846,551 | - | ||||||||||
Change in net unrealized appreciation of: | ||||||||||||
Investments in unaffiliated securitiesD | 616,702,983 | 62,054,935 | ||||||||||
Foreign currency transactions | (143,198 | ) | 34,726 | |||||||||
Futures contracts | 2,380,986 | - | ||||||||||
|
|
|
| |||||||||
Net gain from investments | 728,622,374 | 86,303,033 | ||||||||||
|
|
|
| |||||||||
Net increase in net assets resulting from operations | $ | 752,532,799 | $ | 88,828,625 | ||||||||
|
|
|
| |||||||||
† Foreign taxes | $ | 3,508,812 | $ | 403,514 | ||||||||
A Includes significant dividends from one issuer of $3,819,940. | ||||||||||||
B Includes significant dividends from one issuer of $940,165. | ||||||||||||
C The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities. |
| |||||||||||
D The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
19
American Beacon FundsSM
Statements of Changes in Net Assets
International Equity Fund | Tocqueville International Value Fund | |||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||
Increase (decrease) in net assets: |
| |||||||||||||||||||||||||||
Operations: |
| |||||||||||||||||||||||||||
Net investment income | $ | 23,910,425 | $ | 44,031,672 | $ | 2,525,592 | $ | 3,137,388 | ||||||||||||||||||||
Net realized gain (loss) from investments in unaffiliated securities, commission recapture, foreign currency transactions, and futures contracts | 109,681,603 | (109,117,617 | ) | 24,213,372 | (41,543,654 | ) | ||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions, and futures contracts | 618,940,771 | (334,130,907 | ) | 62,089,661 | 27,876,142 | |||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 752,532,799 | (399,216,852 | ) | 88,828,625 | (10,530,124 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Distributions to shareholders: |
| |||||||||||||||||||||||||||
Total retained earnings: | ||||||||||||||||||||||||||||
R5 Class | (19,243,533 | ) | (43,205,283 | ) | (153,791 | ) | (913,408 | ) | ||||||||||||||||||||
Y Class | (12,813,335 | ) | (24,303,477 | ) | (658,999 | ) | (5,529,636 | ) | ||||||||||||||||||||
Investor Class | (1,252,478 | ) | (5,738,579 | ) | (746,996 | ) | (5,612,764 | ) | ||||||||||||||||||||
Advisor Class | (149,763 | ) | (1,077,549 | ) | - | - | ||||||||||||||||||||||
A Class | (146,453 | ) | (369,593 | ) | - | - | ||||||||||||||||||||||
C Class | (25,086 | ) | (117,950 | ) | - | - | ||||||||||||||||||||||
R6 Class | (6,209,328 | ) | (6,125,156 | ) | - | - | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net distributions to shareholders | (39,839,976 | ) | (80,937,587 | ) | (1,559,786 | ) | (12,055,808 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Capital share transactions (Note 11): |
| |||||||||||||||||||||||||||
Proceeds from sales of shares | 391,953,041 | 961,004,171 | 36,674,302 | 65,256,388 | ||||||||||||||||||||||||
Reinvestment of dividends and distributions | 38,609,524 | 76,255,966 | 1,341,676 | 9,872,145 | ||||||||||||||||||||||||
Cost of shares redeemed | (496,695,344 | ) | (1,375,328,666 | ) | (103,179,734 | ) | (318,581,846 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in net assets from capital share transactions | (66,132,779 | ) | (338,068,529 | ) | (65,163,756 | ) | (243,453,313 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in net assets | 646,560,044 | (818,222,968 | ) | 22,105,083 | (266,039,245 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net assets: |
| |||||||||||||||||||||||||||
Beginning of period | 2,044,877,580 | 2,863,100,548 | 355,797,387 | 621,836,632 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
End of period | $ | 2,691,437,624 | $ | 2,044,877,580 | $ | 377,902,470 | $ | 355,797,387 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
See accompanying notes
20
American Beacon FundsSM
April 30, 2021 (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 April 30, 2021, the Trust consists of twenty-eight active series, two of which are presented in this filing: American Beacon International Equity Fund and American Beacon Tocqueville International Value Fund (collectively, the “Funds” and each individually a “Fund”). The remaining twenty-six 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.
In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives a fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how a Fund will use derivatives, may adversely affect a Fund’s performance and may increase costs related to a Fund’s use of derivatives.
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 | ||||
R5 Class | 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 Class | All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors. | $ | 2,500 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 |
21
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Class | Eligible Investors | Minimum Initial Investments | ||||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 Class | Large institutional retirement plan investors - sold through retirement plan sponsors. | None |
Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class based on the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.
Significant Accounting Policies
The following is a summary of significant accounting policies, consistently followed by the Funds in preparation of the financial statements. The Funds are considered investment companies and accordingly, follow the investment company accounting and reporting guidance of the 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 the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Funds. Interest income, 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 based on 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
The Funds distribute most or all of their net earnings and realized gains, if any, each taxable year in the form of dividends from net investment income and distributions of realized net capital gains and net gains from foreign currency transactions on an annual basis. The Funds do not have a fixed dividend rate and do not guarantee that they will pay any distributions in any particular period. Dividends to shareholders are determined in
22
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Funds may designate earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Funds have established brokerage commission recapture arrangements with certain brokers or dealers. If 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 (loss) in the Funds’ Statements of Operations, if applicable.
Allocation of Income, Trust Expenses, Gains, and Losses
Investment income, realized and unrealized gains and losses from investments of the Funds are allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Funds. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Funds on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Funds or nature of the services performed and relative applicability to the Funds.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.
2. Transactions with Affiliates
Management and Investment Sub-Advisory Agreements
The Funds and the Manager are parties to a Management Agreement that obligates the Manager to provide the Funds with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of the Funds’ average daily net assets that is calculated and accrued daily according to the following schedules:
International Equity Fund
First $15 billion | 0.35 | % | ||
Next $15 billion | 0.325 | % | ||
Over $30 billion | 0.30 | % |
23
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Tocqueville International Value Fund
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 American Beacon International Equity Fund, and the Manager have entered into Investment Advisory Agreements with Causeway Capital Management LLC; Lazard Asset Management LLC; and American Century Investment Management Inc. (“Sub-Advisors”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets.
The Trust, on behalf of the American Beacon Tocqueville International Value Fund, and the Manager have entered into an Investment Advisory Agreement with Tocqueville Asset Management L.P. (“Sub-Advisor”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily according to the following schedule:
First $1 billion | 0.40 | % | ||
Next $1 billion | 0.35 | % | ||
Over $2 billion | 0.325 | % |
The Management and Sub-Advisory Fees paid by the Funds for the period ended April 30, 2021 were as follows:
International Equity Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 4,505,710 | ||||||||
Sub-Advisor Fees | 0.26 | % | 3,285,764 | |||||||||
|
|
|
| |||||||||
Total | 0.61 | % | $ | 7,791,474 | ||||||||
|
|
|
|
Tocqueville International Value Fund
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 656,418 | ||||||||
Sub-Advisor Fees | 0.40 | % | 745,705 | |||||||||
|
|
|
| |||||||||
Total | 0.75 | % | $ | 1,402,123 | ||||||||
|
|
|
|
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee of 10% of the net monthly interest income (the gross 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 of 10% of such loan fees. Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statements of Operations. During the period ended April 30, 2021, the Manager received securities lending fees of $4,887 and $4,295 for the securities lending activities of International Equity Fund and Tocqueville International Value Fund, respectively.
24
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Distribution Plans
The Funds, except for the Advisor, A, and C Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the management fee received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Funds do not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.
Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A, and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.
Service Plans
The Investor, A and C Classes have each adopted a Service Plan (collectively, the “Plans”). The Plans authorize the payment to the Manager an annual fee up to 0.375% of the average daily net assets of the Investor Class, up to 0.25% of the average daily net assets of the A Class and up to 0.25% of the average daily net assets of the C Class. In addition, the Funds may reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries attributable to Y Class and R5 Class. The Manager or other approved entities may spend such amounts on any activities or expenses primarily intended to result in or relate to the servicing of A Class, C Class, Y Class, R5 Class and Investor Class including, but not limited to, payment of shareholder service fees and transfer agency or sub-transfer agency expenses. The fees will be payable monthly in arrears. The primary expenses expected to be incurred under the Plans are shareholder servicing, record keeping fees and servicing fees paid to financial intermediaries such as plan sponsors and broker-dealers.
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 R5 and Y Classes of the Funds and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Funds primarily through the use of omnibus accounts on behalf of their customers who hold positions in the Funds. Certain services would have been provided by the Funds’ transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Funds’ transfer agent. Accordingly, the Funds, pursuant to Board approval, have agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the R5 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 R5 and Y Classes on an annual basis. During the period ended April 30, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
International Equity | $ | 581,959 | ||
Tocqueville International Value | 68,869 |
As of April 30, 2021, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
International Equity | $ | 115,237 | ||
Tocqueville International Value | 11,508 |
25
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (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 listed below held the following shares with an April 30, 2021 fair value and dividend income earned from the investment in the USG Select Fund.
Affiliated Security | Type of Transaction | Fund | April 30, 2021 Shares/Principal | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Dividend Income | April 30, 2021 Fair Value | |||||||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Direct | International Equity | $ | 83,294,087 | $ | - | $ | - | $ | 3,160 | $ | 83,294,087 | ||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Securities Lending | International Equity | 63,186,402 | - | - | N/A | 63,186,402 | |||||||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Direct | Tocqueville International Value | - | - | - | 199 | - | |||||||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Securities Lending | Tocqueville International Value | 21,797,557 | - | - | N/A | 21,797,557 |
The Funds and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the period ended April 30, 2021, 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 Investments in USG Select Fund | Total | |||||||||
International Equity | $ | 37,941 | $ | 4,442 | $ | 42,383 | ||||||
Tocqueville International Value | 2,727 | 1,475 | 4,202 |
Interfund Credit Facility
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the period ended April 30, 2021, the Tocqueville International Value Fund borrowed an average amount of $1,483,367 for 15 days at an average interest rate of 0.82% with interest charges earned of $505. This amount is included in “Interest income” on the Statement of Operations.
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April 30, 2021 (Unaudited)
Expense Reimbursement Plan
The Manager contractually agreed to reduce fees and/or reimburse expenses for the R6 Class of the International Equity Fund and the R5 and Y Classes of the Tocqueville International Value Fund to the extent that total operating expenses exceed the expense cap. During the period ended April 30, 2021, the Manager waived and/or reimbursed expenses as follows:
Expense Cap | Expiration of Reimbursed Expenses | |||||||||||||||||||||
Fund | Class | 11/1/2020 - 2/28/2021 | 3/1/2021 - 4/30/2021 | Reimbursed Expenses | (Recouped) Expenses | |||||||||||||||||
International Equity | R6 | 0.69 | % | 0.69 | % | $ | - | $ | (16,765 | )* | 2023-2024 | |||||||||||
Tocqueville International Value | R5 | 0.89 | % | 0.89 | % | 604 | (1,418 | )* | 2023-2024 | |||||||||||||
Tocqueville International Value | Y | 0.99 | % | 0.99 | % | - | - | 2023-2024 | ||||||||||||||
Tocqueville International Value | Investor | 1.25 | % | N/A | - | - | 2023-2024 |
* | This amount represents Recouped Expenses from prior fiscal years and is reflected in Total Expenses on the Statement of Operations |
Of these amounts, $4,913 and $56,352 were disclosed as a Payable for Expense Recoupment on the Statements of Assets and Liabilities at April 30, 2021 for the International Equity Fund and Tocqueville International Value Fund, respectively.
The Funds have adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Funds for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years from the date of the Manager’s waiver/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 2023 and 2024. The Funds did not record a liability for potential reimbursements due to the current assessment that reimbursements are uncertain. 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 | ||||||||||||
International Equity | $ | 3,462 | $ | - | $ | - | 2021-2022 | |||||||||
International Equity | 13,303 | 78,104 | - | 2022-2023 | ||||||||||||
Tocqueville International Value | 1,418 | 3,057 | - | 2022-2023 |
Sales Commissions
The Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers which may be used to offset distribution related expenses. During the period ended April 30, 2021, RID collected $13 for International Equity Fund from the sale of Class A Shares. The Tocqueville International Value Fund does not offer Class A Shares.
A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Funds’ Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the period ended April 30, 2021, there were no CDSC fees collected for the Class A Shares of the International Equity Fund.
A CDSC of 1.00% will be deducted with respect to Class C of the International Equity Fund Shares redeemed within 12 months of purchase, unless waived as discussed in the Fund’s Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended April 30, 2021, CDSC fees of $7 were collected for the Class C Shares of International Equity Fund. The Tocqueville International Value Fund does not offer Class C Shares.
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Trustee Fees and Expenses
Effective January 1, 2021, as compensation for their service to the American Beacon Funds Complex, including the Trust (collectively, the “Trusts”), each Trustee is compensated from the Trusts as follows: (1) an annual retainer of $120,000; (2) meeting attendance fee (for attendance in person or via teleconference) of (a) $12,000 for in-person attendance, or $5,000 for telephonic attendance, by Board members for each regularly scheduled or special Board meeting, (b) $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, (c) $1,000 for attendance by Committee members at meetings of the Nominating and Governance Committee; and (d) $2,500 for attendance by Board members for each special telephonic Board meeting; and (3) reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. For her service as Board Chair, Ms. Cline receives an additional annual retainer of $50,000. Although she attends several committee meetings at each quarterly Board meeting, she receives only a single $2,500 fee each quarter for her attendance at those meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chair of the Nominating and Governance Committee receives an additional annual retainer of $10,000.
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.
Equity securities, including shares of closed-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 and over-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
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security has been de-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 in non-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 of non-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.
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
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April 30, 2021 (Unaudited)
valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are generally categorized as Level 2 of the fair value hierarchy. Valuation adjustments may be applied to certain securities that are solely traded on a foreign exchange to account for the market movement between the close of the foreign market and the close of the Exchange. These securities are valued using pricing service providers that consider the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments. Securities using these valuation adjustments are categorized as Level 2 of the fair value hierarchy.
Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
OTC financial derivative instruments, such as forward foreign currency contracts derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. These contracts are normally valued on the basis of broker dealer quotations or pricing service providers. Depending on the product and the terms of the transaction, the fair value of the financial derivative contracts can be estimated by a pricing service provider using a series of techniques, including simulation pricing models. The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest rates, curves, dividends, and exchange rates. Financial derivatives that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
Level 3 trading assets and trading liabilities, at fair value
The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of the fair value hierarchy are as follows.
Securities and other assets for which market quotes are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction and may be categorized as Level 3 of the fair value hierarchy.
Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the Exchange close, that materially affect the values of the Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade, do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Manager the responsibility for monitoring significant events that may materially affect the fair values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be re-evaluated in light of such significant events.
The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated the responsibility for applying the valuation methods to the Manager. For instances in which daily market quotes are not readily available, investments may be valued pursuant to guidelines established by the Board. In the event that the security or asset cannot be valued, pursuant to one of the valuation methods established by the Board, the fair value of the security or asset will be determined in good faith by the Valuation Committee, generally based upon recommendations provided by the Manager.
When a Fund uses fair valuation methods applied by the Manager that use significant unobservable inputs to determine its NAV, the securities priced using this methodology are categorized as Level 3 of the fair value hierarchy. These methods may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of the Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.
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American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
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.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or OTC. OTC stock may be less liquid than exchange-traded stock.
Foreign Securities
The Funds may invest in U.S. dollar-denominated and non-U.S. dollar denominated equity and debt securities of foreign issuers and foreign branches of U.S. banks, including negotiable 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.
Illiquid and Restricted Securities
Generally, an illiquid asset is an asset that the Funds reasonably expect cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, as determined pursuant to Rule 22e-4 under the Investment Company Act or as
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otherwise permitted or required by SEC rules and interpretations. Historically, 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. Securities that have not been registered under the Securities Act are referred to as private placements or restricted securities and are purchased directly from the issuer or in the secondary market. These securities may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. A large institutional market exists for certain securities that are not registered under the Securities Act, including repurchase agreements, commercial paper, foreign securities, municipal securities and corporate bonds and notes. Institutional investors depend on an efficient institutional market in which the unregistered security can be readily resold or on an issuer’s ability to honor a demand for repayment. However, the fact that there are contractual or legal restrictions on resale of such investments to the general public or to certain institutions may not be indicative of their liquidity.
Limitations on resale may have an adverse effect on the marketability of portfolio securities, and the Fund might be unable to dispose of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions within seven calendar days. In addition, the Fund may get only limited information about an issuer, so it may be less able to predict a loss. The Fund also might have to register such restricted securities in order to dispose of them resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities.
In recognition of the increased size and liquidity of the institutional market for unregistered securities and the importance of institutional investors in the formation of capital, the SEC adopted Rule 144A under the Securities Act. Rule 144A is designed to facilitate efficient trading among institutional investors by permitting the sale of certain unregistered securities to qualified institutional buyers. To the extent privately placed securities held by the Fund qualify under Rule 144A and an institutional market develops for those securities, the Fund likely will be able to dispose of the securities without registering them under the Securities Act. To the extent that institutional buyers become, for a time, uninterested in purchasing these securities, investing in Rule 144A securities could increase the level of the Fund’s illiquidity. The Manager or the Sub-Advisor, as applicable, may determine that certain securities qualified for trading under Rule 144A are liquid. Regulation S under the Securities Act permits the sale abroad of securities that are not registered for sale in the United States and includes a provision for U.S. investors, such as the Fund, to purchase such unregistered securities if certain conditions are met.
Securities sold in private placement offerings made in reliance on the “private placement” exemption from registration afforded by Section 4(a)(2) of the Securities Act and resold to qualified institutional buyers under Rule 144A under the Securities Act (“Section 4(a)(2) securities”) are restricted as to disposition under the federal securities laws, and generally are sold to institutional investors, such as the Fund, that agree they are purchasing the securities for investment and not with an intention to distribute to the public. Any resale by the purchaser must be pursuant to an exempt transaction and may be accomplished in accordance with Rule 144A. Section 4(a)(2) securities normally are resold to other institutional investors through or with the assistance of the issuer or dealers that make a market in the Section 4(a)(2) securities, thus providing liquidity.
Restricted securities outstanding during the period ended April 30, 2021 are disclosed in the Notes to the Schedules of Investments.
Other Investment Company Securities and Other Exchange-Traded Products
The Funds may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies (“BDCs”), ETFs, unit investment trusts, and other investment companies of the Trust. The Funds may invest in securities of an investment company advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Funds become a shareholder of that investment
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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.
The Funds can invest free cash balances in registered open-end investment companies regulated as money market funds under the Investment Company Act, to provide liquidity or for defensive purposes. The Funds could invest in money market funds rather than purchasing individual short-term investments. If the Funds invest in money market funds, shareholders will bear their proportionate share of the expenses, including for example, advisory and administrative fees, of the money market funds in which the Funds invest, including advisory fees charged by the Manager to any applicable money market funds advised by the Manager.
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.
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.
Forward Foreign Currency Contracts
The Funds may enter into forward foreign currency contracts to hedge the exchange rate risk on investment transactions or to hedge the value of the Funds’ securities denominated in foreign currencies. Forward foreign currency contracts are valued at the forward exchange rate prevailing on the day of valuation. The Funds may also use currency contracts to increase exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another. The Funds bear the market risk that arises from changes in foreign exchange rates, and accordingly, the unrealized gain (loss) on these contracts is reflected in the accompanying financial statements. The Funds also bear the credit risk if the counterparty fails to perform under the contract.
During the period ended April 30, 2021, the International Equity Fund entered into forward foreign currency contracts primarily for hedging foreign currency fluctuations.
The Fund’s forward foreign currency contract notional dollar values outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of forward foreign currency contracts. For the purpose of this disclosure, volume is measured by the amounts bought and sold in USD at each quarter end.
Average Forward Foreign Currency Notional Amounts Outstanding | ||||||||||||
Fund | Purchased Contracts | Sold Contracts | ||||||||||
International Equity | $ | 144,173 | $ | - |
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Futures Contracts
Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Funds may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities or that the counterparty will fail to perform its obligations.
Upon entering into a futures contract, the Funds are required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Funds usually reflect this amount on the Schedules of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statements of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.
During the period ended April 30, 2021, the International Equity Fund entered into futures contracts primarily for exposing cash to markets.
The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For the purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.
Average Futures Contracts Outstanding | ||||
Fund | Period Ended April 30, 2021 | |||
International Equity | 660 |
The following is a summary of the fair valuations of the Funds’ derivative instruments categorized by risk exposure(1):
International Equity Fund
Fair values of financial instruments on the Statements of Assets and Liabilities as of April 30, 2021: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | - | $ | - | $ | - | $ | - | $ | 381,707 | $ | 381,707 | |||||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statements of Operations as of April 30, 2021: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | – | $ | – | $ | - | $ | – | $ | 16,846,551 | $ | 16,846,551 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | 2,380,986 | $ | 2,380,986 |
(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.
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April 30, 2021 (Unaudited)
Master Agreements
Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors surrounding the settlement of certain forward settling transactions, such as delayed delivery or sale-buyback financing transactions by and between the Fund and select counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral.
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, if applicable. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2021.
International Equity Fund
Offsetting of Financial and Derivative Assets as of April 30, 2021: |
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Futures Contracts(1) | $ | 381,707 | $ | - | ||||||||
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Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 381,707 | $ | - | ||||||||
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Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (381,707 | ) | $ | - | |||||||
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Remaining Contractual Maturity of the Agreements As of April 30, 2021 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 63,186,402 | $ | — | $ | — | $ | — | $ | 63,186,402 | ||||||||||||||||||||||||||
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Total Borrowings | $ | 63,186,402 | $ | — | $ | — | $ | — | $ | 63,186,402 | ||||||||||||||||||||||||||
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Gross amount of recognized liabilities for securities lending transactions |
| $ | 63,186,402 | |||||||||||||||||||||||||||||||||
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(1) 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.
Tocqueville International Value Fund
Remaining Contractual Maturity of the Agreements As of April 30, 2021 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions |
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Common Stocks | $ | 21,797,557 | $ | — | $ | — | $ | — | $ | 21,797,557 | ||||||||||||||||||||||||||
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Total Borrowings | $ | 21,797,557 | $ | — | $ | — | $ | — | $ | 21,797,557 | ||||||||||||||||||||||||||
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Gross amount of recognized liabilities for securities lending transactions |
| $ | 21,797,557 | |||||||||||||||||||||||||||||||||
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35
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
6. Principal Risks
Investing in the Funds may involve certain risks including, but not limited to, those described below.
Counterparty Risk
The Funds are subject to the risk that a party or participant to a transaction, such as a broker or derivative counterparty, will be unwilling or unable to satisfy its obligation to make timely principal, interest or settlement payments or to otherwise honor its obligations to the Funds. As a result the Fund may obtain no recovery of its investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose the Fund to greater losses in the event of a default by a counterparty.
Some of the markets in which the Funds may effect derivative transactions are OTC or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight to the same extent as are members of “exchange-based” markets. This exposes the Funds to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a credit or liquidity problem with the counterparty and the recent turbulence in the financial markets highlights the importance of being aware of counterparty risk resulting from OTC derivative transactions. The Funds are subject to the risk that a party or participant to a transaction, such as a broker or derivative counterparty, will be unwilling or unable to satisfy its obligation to make timely principal, interest or settlement payments or to otherwise honor its obligations to the Funds. As a result, the Funds may obtain no recovery of its investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose the Funds to greater losses in the event of a default by a counterparty.
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 the Funds may have an adverse impact on its price and make it difficult for the Funds 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. Since the Funds can invest significantly in high-yield investments considered speculative in nature, this risk may be substantial.
Currency Risk
The Funds may have exposure to foreign currencies by making direct investments in non-U.S. currencies or in securities denominated in non-U.S. currencies, or by purchasing or selling forward currency exchange contracts in non-U.S. currencies. Foreign currencies may decline in value relative to the U.S. dollar, or, in the case of hedging positions, the U.S. dollar may decline in value relative to the currency being hedged, and thereby affect a Fund’s investments in foreign (non-U.S.) currencies or in securities that trade in, and receive revenues in, or in derivatives that provide exposure to, foreign (non-U.S.) currencies. Currency exchange rates may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Funds’ investments in foreign currency denominated securities may reduce the returns of the Funds. Currency futures, forwards, options or swaps may not always work as intended, and in specific cases, the Funds may be worse off than if it had not used such instrument(s). There may not always be suitable hedging instruments available. Even where suitable hedging instruments are available, the Funds may choose to not hedge its currency risks.
36
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
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, real estate investment trusts (“REITs”), depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Funds to additional risk. The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company. Preferred stocks and convertible securities are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency fluctuations and political and financial instability in the home country of a particular depositary receipt or foreign stock.
Foreign Investing and Emerging Markets 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, (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. To the extent the Funds invest a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region. In addition, the economies and political environments of emerging market countries tend to be more unstable than those of developed countries, resulting in more volatile rates of return than the developed markets and substantially greater risk to investors. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currency and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depository or their agents goes bankrupt. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than, or in addition to, investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities, resulting in increased volatility and limited liquidity for emerging market securities; trading suspensions; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return.
Forward Foreign Currency Contracts Risk
Forward foreign currency contracts, including non-deliverable forwards, are derivative instruments pursuant to a contract with a counterparty to pay a fixed price for an agreed amount of securities or other underlying assets at an agreed date or to buy or sell a specific currency at a future date at a price set at the time of the contract. The use of forward foreign currency contracts may expose the Funds to additional risks that it would not be subject to if it invested directly in the securities or currencies underlying the forward foreign currency contract.
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the
37
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. There may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes. There can be no assurance that any strategy used will succeed. There also can be no assurance that, at all times, a liquid market will exist for offsetting a futures contract that a Fund has previously bought or sold and this may result in the inability to close a futures contract when desired. Futures contracts may experience potentially dramatic price changes, which will increase the volatility of a Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
Market Risk
The Funds are subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect a Fund’s performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future. The value of a security may decline due to adverse issuer-specific conditions, general market conditions unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole. Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Changes in value may be temporary or may last for extended periods. Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, including the U.S. presidential election, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree.
Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.
Market Timing Risk
Because the Funds invest in foreign securities, it is particularly subject to the risk of market timing activities. Frequent trading by Fund shareholders poses risks to other shareholders in the Funds, including (i) the dilution of the Funds’ NAV, (ii) an increase in the Funds’ expenses, and (iii) interference with the portfolio manager’s ability to execute efficient investment strategies. Because of specific securities in which the Funds may invest, it could be subject to the risk of market timing activities by shareholders. Some examples of these types of securities are high-yield and foreign securities. The limited trading activity of some high-yield securities may result in market prices that do not reflect the true market value of these securities. The Funds generally prices foreign securities using their closing prices from the foreign markets in which they trade, typically prior to the Funds’ calculation of its NAV. These prices may be affected by events that occur after the close of a foreign market but before the Funds price its shares. In such instances, the Funds may fair value high yield and foreign securities. However, some investors may engage in frequent short-term trading in the Funds to take advantage of any price differentials that may be reflected in the NAV of the Funds’ shares. While the Manager monitors trading in the Funds, there is no guarantee that it can detect all market timing activities.
38
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Multiple Sub-Advisor Risk
The Manager may allocate the Funds’ assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Funds’ assets. To a significant extent, the Funds’ performance will depend on the success of the Manager in allocating the Funds’ assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-advisor manages its allocated portion of the Funds independently from another sub-advisor, the same security may be held in different portions of the Funds, or may be acquired for one portion of the Funds at a time when a sub-advisor to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Funds’ holdings. Similarly, under some market conditions, one sub-advisor may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-advisor believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Funds. Because each sub-advisor directs the trading for its own portion of the Funds, and does not aggregate its transactions with those of the other sub-advisors, the Funds may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Funds’ assets among the Funds’ sub-advisors in a manner that it believes is consistent with achieving the Funds’ investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Funds’ assets among sub-advisors, due to factors that could impact the Manager’s revenues and profits.
Recent Market Events Risk
An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. The transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions and closed borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event changes, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession. The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time.
The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets and has signaled that it plans to maintain its interventions at an elevated level. Amid these ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. The U.S. government has reduced the federal corporate income tax rate, 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. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on January 31, 2020, commonly referred to as “Brexit,” and trade agreement between the United Kingdom and the European Union, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.
Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.
39
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Other Investment Companies Risk
To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses, including, for example, advisory and administrative fees, charged by those investment companies in addition to the Funds, direct fees and expenses. If the Funds invest in other investment companies, the Funds may receive distributions of taxable gains from portfolio transactions by that investment company and may recognize taxable gains from transactions in shares of that investment company, which could be taxable to the Funds’ shareholders when distributed to them. The Funds must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Funds’ investment may decline, adversely affecting the Fund’s performance. To the extent the Funds invest in other investment companies that invest in equity securities, fixed income securities and/or foreign securities, or that track an index, the Funds are subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject. The Funds will be subject to the risks associated with investments in those companies, including but not limited to interest rate risk, credit risk, and market risk.
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. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.
Valuation Risk
This is the risk that a Fund has valued a security at a price different from the price at which it can be sold. This risk may be especially pronounced for investments, such as derivatives, which may be illiquid or which may become illiquid and for securities that trade in relatively thin markets and/or markets that experience extreme volatility. If market conditions make it difficult to value certain investments, a Fund may value these investments using more subjective methods, such as fair-value methodologies. Investors who purchase or redeem Fund shares on days when a Fund is holding fair-valued securities may receive fewer or more shares, or lower or higher redemption proceeds, than they would have received if the Fund had not fair-valued the securities or had used a different valuation methodology. The value of foreign securities, certain fixed-income securities and currencies, as applicable, may be materially affected by events after the close of the markets on which they are traded, but before a Fund determines its NAV. The Fund’s ability to value its investments in an accurate and timely manner may be impacted by technological issues and/or errors by third-party service providers, such as pricing services or accounting agents.
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.
40
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
The Funds do not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2020 remain subject to examination by the Internal Revenue Service. If applicable, the Funds recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statements of Operations.
The Funds may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation (depreciation), as applicable, as the income is earned or capital gains are recorded.
Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.
As of April 30, 2021, 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) | ||||||||||||||||||||||||
International Equity | $ | 2,381,552,872 | $ | 458,890,552 | $ | (98,558,175 | ) | $ | 360,332,377 | |||||||||||||||||||
Tocqueville International Value | 294,561,310 | 100,667,096 | (199,285 | ) | 100,467,811 |
Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the Funds in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.
As of October 31, 2020, the Funds had the following capital loss carryforwards:
Fund | Short-Term Capital Loss Carryforwards | Long-Term Capital Loss Carryforwards | ||||||||||
International Equity | $ | 62,592,823 | $ | 89,404,879 | ||||||||
Tocqueville International Value | 6,777,051 | 38,111,036 |
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 2021 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Sales (non-U.S. Government Securities) | ||||||||||
International Equity | $ | 562,518,532 | $ | 645,729,516 | ||||||||
Tocqueville International Value | 76,128,014 | 123,449,963 |
A summary of the Funds’ transactions in the USG Select Fund for the period ended April 30, 2021 were as follows:
Fund | Type of Transaction | October 31, 2020 Shares/Fair Value | Purchases | Sales | April 30, 2021 Shares/Fair Value | |||||||||||||||||||||||||||||
International Equity | Direct | $ | 55,081,499 | $ | 560,030,294 | 531,817,706 | $ | 83,294,087 | ||||||||||||||||||||||||||
International Equity | Securities Lending | 5,030,543 | 127,492,437 | 69,336,578 | 63,186,402 | |||||||||||||||||||||||||||||
Tocqueville International Value | Direct | 11,592,030 | 72,687,128 | 84,279,158 | - | |||||||||||||||||||||||||||||
Tocqueville International Value | Securities Lending | 3,339,142 | 44,557,617 | 26,099,202 | 21,797,557 |
41
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
9. Securities Lending
The Funds may lend their securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked-to-market daily. Daily mark-to-market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark-to-market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.
To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Funds’ Schedule of Investments and the collateral is shown on the Statements of Assets and Liabilities as a payable.
Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Funds, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.
While securities are on loan, the Funds continue to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Funds would be subject to on the dividend.
Securities lending transactions pose certain risks to the Funds, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Funds could also experience delays and costs in gaining access to the collateral. The Funds bear the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.
As of April 30, 2021, the value of outstanding securities on loan and the value of collateral were as follows:
Fund | Market Value of Securities on Loan | Cash Collateral Received | Non-Cash Collateral Received | Total Collateral Received | ||||||||||||||||||||||||
International Equity | $ | 111,001,014 | $ | 63,186,402 | $ | 52,179,604 | $ | 115,366,006 | ||||||||||||||||||||
Tocqueville International Value | 45,323,415 | 21,797,557 | 25,624,061 | 47,421,618 |
Cash collateral is listed on the Funds’ Schedules of Investments and is shown on the Statements of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statements of Operations.
Non-cash collateral received by the Funds may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Funds’ Schedules of Investments or Statements of Assets and Liabilities.
42
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
10. Borrowing Arrangements
Effective November 12, 2020 (the “Effective Date”), the Funds, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, 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 renewed 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) Overnight Bank Funding Rate (”OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 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 “Loan expense” on the Statements of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.
During the period ended April 30, 2021, 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:
R5 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 7,612,007 | $ | 143,423,401 | 28,411,612 | $ | 413,054,584 | ||||||||||||||||||||||
Reinvestment of dividends | 1,023,705 | 18,293,611 | 2,205,748 | 40,475,468 | ||||||||||||||||||||||||
Shares redeemed | (10,027,791 | ) | (186,735,425 | ) | (47,892,354 | ) | (714,194,178 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,392,079 | ) | $ | (25,018,413 | ) | (17,274,994 | ) | $ | (260,664,126 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 6,045,701 | $ | 114,204,782 | 15,009,570 | $ | 226,696,600 | ||||||||||||||||||||||
Reinvestment of dividends | 680,368 | 12,695,662 | 1,184,510 | 22,683,362 | ||||||||||||||||||||||||
Shares redeemed | (8,162,471 | ) | (159,443,684 | ) | (20,937,732 | ) | (342,134,108 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,436,402 | ) | $ | (32,543,240 | ) | (4,743,652 | ) | $ | (92,754,146 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
43
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 2,464,090 | $ | 47,520,602 | 1,943,992 | $ | 28,602,293 | ||||||||||||||||||||||
Reinvestment of dividends | 68,848 | 1,222,060 | 311,501 | 5,672,429 | ||||||||||||||||||||||||
Shares redeemed | (2,585,544 | ) | (48,217,841 | ) | (8,253,006 | ) | (123,295,754 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | (52,606 | ) | $ | 524,821 | (5,997,513 | ) | $ | (89,021,032 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 52,551 | $ | 1,013,835 | 662,934 | $ | 9,904,449 | ||||||||||||||||||||||
Reinvestment of dividends | 8,194 | 149,699 | 57,643 | 1,077,351 | ||||||||||||||||||||||||
Shares redeemed | (213,245 | ) | (4,083,002 | ) | (2,124,838 | ) | (34,005,957 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (152,500 | ) | $ | (2,919,468 | ) | (1,404,261 | ) | $ | (23,024,157 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 78,419 | $ | 1,453,855 | 248,254 | $ | 3,772,133 | ||||||||||||||||||||||
Reinvestment of dividends | 8,158 | 144,484 | 20,020 | 364,173 | ||||||||||||||||||||||||
Shares redeemed | (192,068 | ) | (3,603,663 | ) | (397,233 | ) | (6,125,328 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (105,491 | ) | $ | (2,005,324 | ) | (128,959 | ) | $ | (1,989,022 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 27,054 | $ | 480,505 | 45,274 | $ | 697,918 | ||||||||||||||||||||||
Reinvestment of dividends | 1,411 | 24,166 | 6,493 | 114,278 | ||||||||||||||||||||||||
Shares redeemed | (36,870 | ) | (673,764 | ) | (165,810 | ) | (2,343,389 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (8,405 | ) | $ | (169,093 | ) | (114,043 | ) | $ | (1,531,193 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
R6 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
International Equity Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 4,413,063 | $ | 83,856,061 | 19,524,226 | $ | 278,276,194 | ||||||||||||||||||||||
Reinvestment of dividends | 339,656 | 6,079,842 | 319,483 | 5,868,905 | ||||||||||||||||||||||||
Shares redeemed | (4,911,947 | ) | (93,937,965 | ) | (9,816,515 | ) | (153,229,952 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | (159,228 | ) | $ | (4,002,062 | ) | 10,027,194 | $ | 130,915,147 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
R5 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Tocqueville International Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 141,490 | $ | 2,690,675 | 254,151 | $ | 3,799,313 | ||||||||||||||||||||||
Reinvestment of dividends | 8,607 | 153,726 | 56,556 | 910,567 | ||||||||||||||||||||||||
Shares redeemed | (334,719 | ) | (6,341,242 | ) | (1,379,136 | ) | (17,985,926 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (184,622 | ) | $ | (3,496,841 | ) | (1,068,429 | ) | $ | (13,276,046 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
44
American Beacon FundsSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Tocqueville International Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,433,114 | $ | 27,707,788 | 2,542,137 | $ | 38,027,861 | ||||||||||||||||||||||
Reinvestment of dividends | 26,969 | 481,673 | 223,999 | 3,604,138 | ||||||||||||||||||||||||
Shares redeemed | (2,776,722 | ) | (49,701,867 | ) | (8,650,732 | ) | (124,089,686 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,316,639 | ) | $ | (21,512,406 | ) | (5,884,596 | ) | $ | (82,457,687 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Tocqueville International Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 336,979 | $ | 6,275,839 | 1,585,655 | $ | 23,429,214 | ||||||||||||||||||||||
Reinvestment of dividends | 39,369 | 706,277 | 331,320 | 5,357,440 | ||||||||||||||||||||||||
Shares redeemed | (2,493,299 | ) | (47,136,625 | ) | (11,936,282 | ) | (176,506,234 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (2,116,951 | ) | $ | (40,154,509 | ) | (10,019,307 | ) | $ | (147,719,580 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
12. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Funds’ financial statements through this date.
45
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
R5 ClassAB | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020C | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.73 | $ | 18.06 | $ | 18.71 | $ | 20.88 | $ | 17.41 | $ | 18.79 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.19 | D | 0.36 | 0.55 | 0.44 | 0.39 | 0.29 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 5.24 | (3.15 | ) | 0.34 | (1.95 | ) | 3.51 | (1.24 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 5.43 | (2.79 | ) | 0.89 | (1.51 | ) | 3.90 | (0.95 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.54 | ) | (0.40 | ) | (0.35 | ) | (0.43 | ) | (0.27 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (1.14 | ) | (0.31 | ) | - | (0.16 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.30 | ) | (0.54 | ) | (1.54 | ) | (0.66 | ) | (0.43 | ) | (0.43 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.86 | $ | 14.73 | $ | 18.06 | $ | 18.71 | $ | 20.88 | $ | 17.41 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnE | 37.08 | %F | (16.04 | )% | 5.94 | % | (7.55 | )% | 22.94 | % | (5.07 | )% | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 1,278,618,363 | $ | 968,859,543 | $ | 1,499,867,401 | $ | 1,613,462,237 | $ | 1,644,165,106 | $ | 1,450,052,040 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.71 | %G | 0.72 | % | 0.73 | % | 0.73 | % | 0.73 | % | 0.69 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.71 | %G | 0.72 | % | 0.73 | % | 0.73 | % | 0.73 | % | 0.69 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.92 | %G | 1.83 | % | 2.93 | % | 2.17 | % | 2.01 | % | 2.22 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.92 | %G | 1.83 | % | 2.93 | % | 2.17 | % | 2.01 | % | 2.22 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 23 | %F | 77 | % | 36 | % | 29 | % | 32 | % | 25 | % |
A | Prior to February 28, 2020, the R5 Class was known as Institutional Class. |
B | On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class. |
C | On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund. |
D | Net investment income includes significant dividend payment from Tesco PLC, amounting to $0.0284. |
E | 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. |
F | Not annualized. |
G | Annualized. |
See accompanying notes
46
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020A | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 15.36 | $ | 18.81 | $ | 19.42 | $ | 21.64 | $ | 18.03 | $ | 19.46 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.18 | B | 0.36 | 0.54 | 0.46 | 0.38 | 0.41 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 5.47 | (3.28 | ) | 0.37 | (2.04 | ) | 3.65 | (1.40 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 5.65 | (2.92 | ) | 0.91 | (1.58 | ) | 4.03 | (0.99 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.28 | ) | (0.53 | ) | (0.38 | ) | (0.33 | ) | (0.42 | ) | (0.28 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (1.14 | ) | (0.31 | ) | - | (0.16 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.28 | ) | (0.53 | ) | (1.52 | ) | (0.64 | ) | (0.42 | ) | (0.44 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 20.73 | $ | 15.36 | $ | 18.81 | $ | 19.42 | $ | 21.64 | $ | 18.03 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 37.02 | %D | (16.09 | )% | 5.83 | % | (7.58 | )% | 22.84 | % | (5.14 | )% | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 859,864,037 | $ | 659,159,857 | $ | 896,442,437 | $ | 904,847,058 | $ | 1,029,629,647 | $ | 820,596,038 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.78 | %E | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | 0.77 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.78 | %E | 0.80 | % | 0.80 | % | 0.80 | % | 0.80 | % | 0.77 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.82 | %E | 1.77 | % | 2.87 | % | 2.10 | % | 1.95 | % | 2.43 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.82 | %E | 1.77 | % | 2.87 | % | 2.10 | % | 1.95 | % | 2.43 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 23 | %D | 77 | % | 36 | % | 29 | % | 32 | % | 25 | % |
A | On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund. |
B | Net investment income includes significant dividend payment from Tesco PLC amounting to $0.0292. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
See accompanying notes
47
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020A | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.57 | $ | 17.87 | $ | 18.52 | $ | 20.67 | $ | 17.24 | $ | 18.60 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.16 | B | 0.40 | 0.49 | 0.41 | 0.35 | 0.34 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 5.19 | (3.22 | ) | 0.33 | (1.97 | ) | 3.45 | (1.33 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 5.35 | (2.82 | ) | 0.82 | (1.56 | ) | 3.80 | (0.99 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.22 | ) | (0.48 | ) | (0.33 | ) | (0.28 | ) | (0.37 | ) | (0.21 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (1.14 | ) | (0.31 | ) | - | (0.16 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.22 | ) | (0.48 | ) | (1.47 | ) | (0.59 | ) | (0.37 | ) | (0.37 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.70 | $ | 14.57 | $ | 17.87 | $ | 18.52 | $ | 20.67 | $ | 17.24 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 36.87 | %D | (16.33 | )% | 5.55 | % | (7.86 | )% | 22.50 | % | (5.38 | )% | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 124,429,185 | $ | 92,817,287 | $ | 221,043,036 | $ | 250,804,403 | $ | 316,589,769 | $ | 334,895,337 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.04 | %E | 1.07 | % | 1.05 | % | 1.06 | % | 1.07 | % | 1.06 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.04 | %E | 1.07 | % | 1.05 | % | 1.06 | % | 1.07 | % | 1.06 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.64 | %E | 1.35 | % | 2.59 | % | 1.83 | % | 1.69 | % | 1.95 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.64 | %E | 1.35 | % | 2.59 | % | 1.83 | % | 1.69 | % | 1.95 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 23 | %D | 77 | % | 36 | % | 29 | % | 32 | % | 25 | % |
A | On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund. |
B | Net investment income includes significant dividend payment from Tesco PLC amounting to $0.0267. |
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
48
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020B | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.94 | $ | 18.31 | $ | 18.93 | $ | 21.15 | $ | 17.62 | $ | 19.01 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.17 | C | 0.37 | 0.43 | 0.36 | 0.23 | 0.35 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 5.32 | (3.29 | ) | 0.39 | (1.99 | ) | 3.64 | (1.37 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 5.49 | (2.92 | ) | 0.82 | (1.63 | ) | 3.87 | (1.02 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.45 | ) | (0.30 | ) | (0.28 | ) | (0.34 | ) | (0.21 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (1.14 | ) | (0.31 | ) | - | (0.16 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.15 | ) | (0.45 | ) | (1.44 | ) | (0.59 | ) | (0.34 | ) | (0.37 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 20.28 | $ | 14.94 | $ | 18.31 | $ | 18.93 | $ | 21.15 | $ | 17.62 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnD | 36.83 | %E | (16.43 | )% | 5.38 | % | (7.99 | )% | 22.38 | % | (5.40 | )% | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 19,140,219 | $ | 16,387,094 | $ | 45,797,068 | $ | 48,571,916 | $ | 55,715,606 | $ | 23,692,313 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.18 | %F | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | 1.19 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.18 | %F | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | 1.19 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.40 | %F | 1.34 | % | 2.40 | % | 1.70 | % | 1.51 | % | 1.87 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.40 | %F | 1.34 | % | 2.40 | % | 1.70 | % | 1.51 | % | 1.87 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 23 | %E | 77 | % | 36 | % | 29 | % | 32 | % | 25 | % |
A | On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class. |
B | On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund. |
C | Net investment income includes significant dividend payment from Tesco PLC amounting to $0.0277. |
D | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
E | Not annualized. |
F | Annualized. |
See accompanying notes
49
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020A | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.55 | $ | 17.85 | $ | 18.50 | $ | 20.63 | $ | 17.23 | $ | 18.59 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.13 | B | 0.21 | 0.45 | 0.38 | 0.30 | 0.32 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 5.20 | (3.04 | ) | 0.36 | (1.95 | ) | 3.48 | (1.30 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 5.33 | (2.83 | ) | 0.81 | (1.57 | ) | 3.78 | (0.98 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.23 | ) | (0.47 | ) | (0.32 | ) | (0.25 | ) | (0.38 | ) | (0.22 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (1.14 | ) | (0.31 | ) | - | (0.16 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.23 | ) | (0.47 | ) | (1.46 | ) | (0.56 | ) | (0.38 | ) | (0.38 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.65 | $ | 14.55 | $ | 17.85 | $ | 18.50 | $ | 20.63 | $ | 17.23 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 36.80 | %D | (16.37 | )% | 5.46 | % | (7.89 | )% | 22.43 | % | (5.34 | )% | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 10,774,133 | $ | 9,512,972 | $ | 13,973,709 | $ | 14,141,551 | $ | 17,829,657 | $ | 18,673,142 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.11 | %E | 1.13 | % | 1.15 | % | 1.08 | % | 1.12 | % | 1.07 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.11 | %E | 1.13 | % | 1.15 | % | 1.08 | % | 1.12 | % | 1.07 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.45 | %E | 1.35 | % | 2.50 | % | 1.80 | % | 1.65 | % | 1.94 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.45 | %E | 1.35 | % | 2.50 | % | 1.80 | % | 1.65 | % | 1.94 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 23 | %D | 77 | % | 36 | % | 29 | % | 32 | % | 25 | % |
A | On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund. |
B | Net investment income includes significant dividend payment from Tesco PLC amounting to $0.0272. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
See accompanying notes
50
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020A | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 13.99 | $ | 17.18 | $ | 17.84 | $ | 19.93 | $ | 16.73 | $ | 18.09 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.06 | B | 0.01 | 0.29 | 0.22 | 0.17 | 0.18 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 5.01 | (2.86 | ) | 0.37 | (1.87 | ) | 3.36 | (1.28 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 5.07 | (2.85 | ) | 0.66 | (1.65 | ) | 3.53 | (1.10 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.10 | ) | (0.34 | ) | (0.18 | ) | (0.13 | ) | (0.33 | ) | (0.10 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | (1.14 | ) | (0.31 | ) | - | (0.16 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.10 | ) | (0.34 | ) | (1.32 | ) | (0.44 | ) | (0.33 | ) | (0.26 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 18.96 | $ | 13.99 | $ | 17.18 | $ | 17.84 | $ | 19.93 | $ | 16.73 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 36.33 | %D | (16.98 | )% | 4.69 | % | (8.52 | )% | 21.50 | % | (6.12 | )% | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 4,490,980 | $ | 3,431,934 | $ | 6,174,460 | $ | 6,625,329 | $ | 7,622,425 | $ | 2,945,246 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.84 | %E | 1.86 | % | 1.87 | % | 1.81 | % | 1.88 | % | 1.85 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.84 | %E | 1.86 | % | 1.87 | % | 1.81 | % | 1.88 | % | 1.85 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.77 | %E | 0.61 | % | 1.73 | % | 1.08 | % | 0.96 | % | 1.12 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.77 | %E | 0.61 | % | 1.73 | % | 1.08 | % | 0.96 | % | 1.12 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 23 | %D | 77 | % | 36 | % | 29 | % | 32 | % | 25 | % |
A | On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund. |
B | Net investment income includes significant dividend payment from Tesco PLC amounting to $0.0270. |
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
51
American Beacon International Equity FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | February 28, 2017B to October 31, | ||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.76 | $ | 18.08 | $ | 18.73 | $ | 20.89 | $ | 17.80 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||||||||||||||
Net investment income | 0.17 | C | 0.39 | 0.51 | 0.39 | 0.08 | ||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 5.26 | (3.16 | ) | 0.39 | (1.88 | ) | 3.01 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total income (loss) from investment operations | 5.43 | (2.77 | ) | 0.90 | (1.49 | ) | 3.09 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.30 | ) | (0.55 | ) | (0.41 | ) | (0.36 | ) | – | |||||||||||||||||||||||||||
Distributions from net realized gains | – | – | (1.14 | ) | (0.31 | ) | – | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total distributions | (0.30 | ) | (0.55 | ) | (1.55 | ) | (0.67 | ) | – | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.89 | $ | 14.76 | $ | 18.08 | $ | 18.73 | $ | 20.89 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total returnD | 37.04 | %E | (15.93 | )% | 5.98 | % | (7.47 | )% | 17.36 | %E | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 394,120,707 | $ | 294,708,893 | $ | 179,802,437 | $ | 48,725,523 | $ | 6,367,999 | ||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.69 | %F | 0.72 | % | 0.70 | % | 0.70 | % | 0.89 | %F | ||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.69 | %F | 0.69 | % | 0.66 | % | 0.66 | % | 0.66 | %F | ||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.91 | %F | 1.88 | % | 3.09 | % | 2.11 | % | 1.63 | %F | ||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.91 | %F | 1.91 | % | 3.13 | % | 2.15 | % | 1.85 | %F | ||||||||||||||||||||||||||
Portfolio turnover rate | 23 | %E | 77 | % | 36 | % | 29 | % | 32 | %G |
A | On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund. |
B | Commencement of operations. |
C | Net investment income includes significant dividend payment from Tesco PLC amounting to $0.0285. |
D | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
E | Not annualized. |
F | Annualized. |
G | Portfolio turnover rate is for the period from February 28, 2017 through October 31, 2017 and is not annualized. |
See accompanying notes
52
American Beacon Tocqueville International Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R5 ClassA | ||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | January 22, 2019B to October 31, 2019 | ||||||||||||||||||
|
| |||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 15.58 | $ | 15.65 | $ | 14.78 | ||||||||||||||
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|
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| |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.11 | C | 0.03 | 0.21 | ||||||||||||||||
Net gains on investments (both realized and unrealized) | 4.07 | 0.29 | 0.66 | |||||||||||||||||
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|
| |||||||||||||||
Total income from investment operations | 4.18 | 0.32 | 0.87 | |||||||||||||||||
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| |||||||||||||||
Less distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.12 | ) | (0.39 | ) | – | |||||||||||||||
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| |||||||||||||||
Total distributions | (0.12 | ) | (0.39 | ) | – | |||||||||||||||
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| |||||||||||||||
Net asset value, end of period | $ | 19.64 | $ | 15.58 | $ | 15.65 | ||||||||||||||
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| |||||||||||||||
Total returnD | 26.90 | %E | 1.94 | % | 5.89 | %E | ||||||||||||||
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Ratios and supplemental data: |
| |||||||||||||||||||
Net assets, end of period | $ | 21,996,197 | $ | 20,327,704 | $ | 37,138,368 | ||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Expenses, before reimbursements or recoupments | 0.90 | %F | 0.91 | % | 0.93 | %F | ||||||||||||||
Expenses, net of reimbursements or recoupments | 0.89 | %F | 0.89 | % | 0.89 | %F | ||||||||||||||
Net investment income, before expense reimbursements or recoupments | 1.51 | %F | 0.84 | % | 2.18 | %F | ||||||||||||||
Net investment income, net of reimbursements or recoupments | 1.52 | %F | 0.86 | % | 2.22 | %F | ||||||||||||||
Portfolio turnover rate | 21 | %E | 28 | % | 35 | %G |
A | Prior to February 28, 2020, the R5 Class was known as Institutional Class. |
B | Commencement of operations. |
C | Net investment income includes significant dividend payment from Siemens AG amounting to $0.0493. |
D | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
E | Not annualized. |
F | Annualized. |
G | Portfolio turnover is for the period ended herein. |
See accompanying notes
53
American Beacon Tocqueville International Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | January 22, 2019A to October 31, 2019 | ||||||||||||||||||
|
| |||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Net asset value, beginning of period | $ | 15.56 | $ | 15.64 | $ | 14.78 | ||||||||||||||
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|
| |||||||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.12 | B | 0.05 | 0.23 | ||||||||||||||||
Net gains on investments (both realized and unrealized) | 4.05 | 0.25 | 0.63 | |||||||||||||||||
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|
|
| |||||||||||||||
Total income from investment operations | 4.17 | 0.30 | 0.86 | |||||||||||||||||
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|
|
|
|
| |||||||||||||||
Less distributions: | ||||||||||||||||||||
Dividends from net investment income | (0.10 | ) | (0.38 | ) | - | |||||||||||||||
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|
|
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| |||||||||||||||
Total distributions | (0.10 | ) | (0.38 | ) | - | |||||||||||||||
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|
|
|
| |||||||||||||||
Net asset value, end of period | $ | 19.63 | $ | 15.56 | $ | 15.64 | ||||||||||||||
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| |||||||||||||||
Total returnC | 26.83 | %D | 1.84 | % | 5.82 | %D | ||||||||||||||
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| |||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||
Net assets, end of period | $ | 146,463,381 | $ | 136,563,697 | $ | 229,275,205 | ||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||
Expenses, before reimbursements | 0.94 | %E | 0.99 | % | 0.98 | %E | ||||||||||||||
Expenses, net of reimbursements | 0.94 | %E | 0.99 | % | 0.98 | %E | ||||||||||||||
Net investment income, before expense reimbursements | 1.48 | %E | 0.78 | % | 2.10 | %E | ||||||||||||||
Net investment income, net of reimbursements | 1.48 | %E | 0.78 | % | 2.10 | %E | ||||||||||||||
Portfolio turnover rate | 21 | %D | 28 | % | 35 | %F |
A | Commencement of operations. |
B | Net investment income includes significant dividend payment from Siemens AG amounting to $0.0489. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
F | Portfolio turnover is for the period ended herein. |
See accompanying notes
54
American Beacon Tocqueville International Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 15.60 | $ | 15.61 | $ | 15.06 | $ | 17.58 | $ | 14.44 | $ | 14.59 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.19 | B | 0.25 | 0.40 | 0.24 | A | 0.14 | A | 0.14 | A | ||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 3.97 | 0.01 | 0.34 | (2.53 | ) | 3.23 | 0.14 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 4.16 | 0.26 | 0.74 | (2.29 | ) | 3.37 | 0.28 | |||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.06 | ) | (0.27 | ) | (0.19 | ) | (0.17 | ) | (0.15 | ) | (0.25 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | - | - | (0.06 | ) | (0.08 | ) | (0.18 | ) | |||||||||||||||||||||||||||||||||||
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|
|
|
|
|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.06 | ) | (0.27 | ) | (0.19 | ) | (0.23 | ) | (0.23 | ) | (0.43 | ) | ||||||||||||||||||||||||||||||||
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|
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|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 19.70 | $ | 15.60 | $ | 15.61 | $ | 15.06 | $ | 17.58 | $ | 14.44 | ||||||||||||||||||||||||||||||||
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|
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|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 26.71 | %D | 1.63 | % | 5.03 | % | (13.20 | )% | 23.70 | % | 2.00 | % | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 209,442,892 | $ | 198,905,986 | $ | 355,423,059 | $ | 1,060,000,108 | $ | 1,120,993,795 | $ | 525,808,058 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.18 | %E | 1.18 | % | 1.29 | % | 1.48 | % | 1.53 | % | 1.58 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.18 | %E | 1.18 | % | 1.18 | % | 1.25 | % | 1.25 | % | 1.25 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.26 | %E | 0.63 | % | 1.42 | % | 1.09 | % | 0.73 | % | 0.90 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.26 | %E | 0.63 | % | 1.53 | % | 1.32 | % | 1.01 | % | 1.23 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 21 | %D | 28 | % | 35 | % | 25 | % | 22 | % | 26 | % |
A | Net investment income per share is calculated using the ending balance prior to consideration or adjustment for permanent book-to-tax differences. |
B | Net investment income includes significant dividend payment from Siemens AG amounting to $0.0489. |
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
Disclosure Regarding Approval of Management and Investment Advisory Agreements (Unaudited)
Approval related to the American Beacon International Equity Fund
At their August 17-18, 2020 meetings, the Board of Trustees (the “Board”) of American Beacon Funds (the “Trust”) considered the approval of an amendment to an existing investment advisory agreement (the “Agreement”) on behalf of the American Beacon International Equity Fund (the “Fund”) to reflect a reduction in the fee rate payable to Lazard Asset Management LLC (“Lazard”), which is one of the Fund’s investment advisers. In particular, the Board considered an amendment to the Agreement among American Beacon Advisors, Inc. (the “Manager”), Lazard and the Trust, on behalf of the Fund (the “Amendment”).
The Board determined that it did not need to consider certain factors that it typically considers during its review of investment advisory agreements because the Board had reviewed, among other matters, the nature, extent and quality of services being provided to the Fund by Lazard at the Board’s May 14, 2020 and June 3-4, 2020 meetings in connection with its annual renewal of the Agreement. Additionally, the Board considered that, other than reducing the sub-advisory fee rate included in the Agreement, the Amendment would not result in any other changes to the information considered by the Board during its annual review meetings on May 14, 2020 and June 3-4, 2020, including the nature, extent and quality of services provided to the Fund and the personnel providing day-to-day services for the Fund.
Based on the various considerations described above, the Board, including a majority of Trustees who are not “interested persons” of the Fund, the Manager, or Lazard, as that term is defined in the Investment Company Act of 1940, as amended, concluded that the proposed investment advisory fee rate is fair and reasonable and the approval of the Amendment is in the best interests of the Fund, and approved the Amendment.
56
Disclosure Regarding Liquidity Risk Management Program
Rule 22e-4 under the Investment Company Act of 1940, as amended (“Rule 22e-4”), requires open-end registered investment companies (other than money market funds) to adopt and implement a written liquidity risk management program that is reasonably designed to assess and manage liquidity risk. The Fund has adopted a Liquidity Risk Management Program (the “Program”) that is designed to assess and manage liquidity risk, which is the risk that the Fund could not meet requests to redeem its shares without significant dilution of the remaining shareholders’ interests in the Fund. Pursuant to Rule 22e-4, the Program includes the following elements:
• | Assessment, management, and periodic review of liquidity risk; |
• | Classification of each of the Fund’s portfolio investments into one of four liquidity categories: highly liquid, moderately liquid, less liquid, and illiquid; |
• | Determination and review of a highly liquid investment minimum for any Fund that does not primarily hold assets that are highly liquid investments; |
• | Policies and procedures to respond to a shortfall in the highly liquid investment minimum, including associated reports to the Fund’s Board of Trustees (the “Board”) and the Securities and Exchange Commission (“SEC”); |
• | A prohibition against a Fund acquiring an illiquid investment if immediately after the acquisition the Fund would have more than 15% of its net assets invested in illiquid investments that are assets; |
• | Reporting of breaches of the illiquid investment prohibition to the Board and the SEC; and |
• | Policies and procedures regarding how and when a Fund will satisfy redemption requests by distributing portfolio securities or other assets. |
The Manager’s Liquidity Committee administers the Program and has provided quarterly reports to the Board regarding the Fund’s liquidity risk. In addition, at the Board’s March 3-4, 2021 meetings, the Board reviewed the Liquidity Committee’s written report (“Report”) that addressed the operation of the Program and assessed the adequacy and effectiveness of its implementation from January 1, 2020 through December 31, 2020 (the “review period”).
Key conclusions that the Liquidity Committee included in the Report are listed below:
• | The Program is reasonably designed to assess and manage the Fund’s liquidity risk. |
• | The operation of the Program was adequate during the review period. |
• | There were no material changes to the Program during the review period. |
• | The Fund included in this shareholder report was deemed to primarily hold assets that are highly liquid, and no highly liquid investment minimum was recommended. |
• | The Program was effectively implemented by the Liquidity Committee during the review period. |
• | Administration of the Program by the Liquidity Committee continues to be appropriate. |
57
Delivery of Documents
Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
To obtain more information about the Fund:
![]() | ![]() | |
By E-mail: | On the Internet: | |
american_beacon.funds@ambeacon.com | Visit our website at www.americanbeaconfunds.com | |
By Telephone: Call (800) 658-5811 | By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 | |
Availability of Quarterly Portfolio Schedules | Availability of Proxy Voting Policy and Records | |
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the end of each fiscal quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month. | A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009. |
Fund Service Providers:
CUSTODIAN State Street Bank and Trust 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 International Equity Fund and American Beacon Tocqueville International Value Fund are service marks of American Beacon Advisors, Inc.
SAR 04/21
About American Beacon Advisors
Since 1986, American Beacon Advisors, Inc. has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.
Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.
LARGE CAP VALUE FUND RISKS
Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.
Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.
American Beacon Funds | April 30, 2021 |
1 | ||||
2 | ||||
4 | ||||
Schedule of Investments: | ||||
6 | ||||
13 | ||||
17 | ||||
Financial Highlights: | ||||
36 | ||||
Disclosure Regarding Approval of Management and Investment Advisory Agreements | 43 | |||
44 |
Back Cover |
![]() | Dear Shareholders,
Throughout this reporting period, the 24-hour news cycle has continued to be dominated by headlines related to the COVID-19 pandemic, ongoing global vaccination efforts, U.S. stimulus and infrastructure spending, and the reopening of our nation’s businesses and schools. After months of seclusion and uncertainty, we can finally see the proverbial light at the end of a tunnel – and a path forward to potentially brighter days.
However, during challenging times such as we’ve all experienced over the past year, the fear of loss can be a powerful emotion. And it can cause many individuals to make short-term investment decisions that have the potential to sink their long-term financial objectives. We encourage you to remain focused on achieving your long-term investment goals by working with |
financial professionals to develop a personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand crises. By staying the course, you will be better positioned to achieve enduring financial success.
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. 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 financial rewards.
Thank you for continuing your financial journey with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon Large Cap Value FundSM
April 30, 2021 (Unaudited)
The Investor Class of the American Beacon Large Cap Value Fund (the “Fund”) returned 43.53% for the six months ended April 30, 2021, outperforming the Russell 1000® Value Index (the “Index”) return of 36.30% for the same period.
Total Returns for the Period ended April 30, 2021 |
| |||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||
R5 Class (1,6) | AADEX | 43.78% | 56.95% | 12.54% | 13.23% | 11.10% | ||||||||||||||||
Y Class (1,6) | ABLYX | 43.72% | 56.79% | 12.44% | 13.15% | 11.01% | ||||||||||||||||
Investor Class (1,6) | AAGPX | 43.53% | 56.36% | 12.16% | 12.85% | 10.72% | ||||||||||||||||
Advisor Class (1,6) | AVASX | 43.45% | 56.19% | 12.01% | 12.69% | 10.57% | ||||||||||||||||
A Class without sales charge (1,2,6) | ALVAX | 43.53% | 56.36% | 12.12% | 12.81% | 10.63% | ||||||||||||||||
A Class with sales charge (1,2,6) | ALVAX | 35.27% | 47.40% | 9.93% | 11.49% | 9.98% | ||||||||||||||||
C Class without sales charge (1,3,6) | ALVCX | 43.07% | 55.28% | 11.36% | 12.04% | 9.84% | ||||||||||||||||
C Class with sales charge (1,3,6) | ALVCX | 42.07% | 54.28% | 11.36% | 12.04% | 9.84% | ||||||||||||||||
R6 Class (1,4,6) | AALRX | 43.83% | 57.01% | 12.58% | 13.27% | 11.12% | ||||||||||||||||
Russell 1000® Value Index (5) | 36.30% | 45.92% | 12.30% | 12.15% | 11.13% |
* | Not Annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future. |
2. | A Class shares have a maximum sales charge of 5.75%. |
3. | A portion of the fees charged to the C Class was waived from 2010 through 2012, partially recovered in 2013 and 2014, and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012 and for 2018. C Class shares have a maximum contingent deferred sales charge of 1.00% for shares redeemed within one year of the date of purchase. |
4. | Fund performance for the five-year and ten-year periods represents the returns achieved by the R5 Class from 4/30/11 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/11. A portion of the fees charged to the R6 Class of the Fund has been waived since Class inception. Performance prior to waiving fees was lower than the actual returns shown since 2017. |
5. | The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. American Beacon Funds is not promoted, sponsored or endorsed by, nor in any way affiliated with the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. LSE Group is not responsible for and has not reviewed the American Beacon Large Cap Value Fund nor any associated literature or publications and LSE Group makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. All rights in the Russell 1000 Value Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell 1000® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by the Manager. 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 R5, Y, Investor, Advisor, A, C and R6 Class shares were 0.63%, 0.70%, 0.96%, 1.10%, 1.00%, 1.68%, and 0.62%, 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 stock selection and sector allocation for the six-month period.
The Fund’s stock selections in the Financials and Communication Services sectors contributed the most to outperformance. In the Financials sector, Wells Fargo + Co. (up 112.8%), Goldman Sachs Group, Inc. (up 88.3%) and Citigroup, Inc. (up 73.6%) were the largest contributors. Positions in News Corp Class A (up 107.8%) and Discovery,
2
American Beacon Large Cap Value FundSM
Performance Overview
April 30, 2021 (Unaudited)
Inc., Class C (up 100.8%) boosted Fund returns in the Communication Services sector. In contrast, stock selections in the Information Technology sector partially offset relative performance. Within this sector, a position in QUALCOMM, Inc. (up 14.2%) dragged on relative performance.
Sector allocation boosted relative performance, led by an overweight to Financials (up 56.7%) and an underweight to Consumer Staples (up 15.2%). However, the Fund’s slight underweight position in Consumer Discretionary (up 38.2%) somewhat muted relative performance during the period.
The sub-advisors continue to invest in a broadly diversified portfolio of companies that they believe have attractive valuations and above-average earnings growth potential. This approach should allow the Fund to benefit over the longer term.
Top Ten Holdings (% Net Assets) |
| |||||||
Citigroup, Inc. | 3.2 | |||||||
Wells Fargo & Co. | 2.6 | |||||||
American International Group, Inc. | 2.4 | |||||||
JPMorgan Chase & Co. | 2.4 | |||||||
Comcast Corp., Class A | 2.3 | |||||||
Goldman Sachs Group, Inc. | 2.1 | |||||||
Anthem, Inc. | 2.0 | |||||||
Medtronic PLC | 1.8 | |||||||
General Electric Co. | 1.4 | |||||||
US Bancorp | 1.4 | |||||||
Total Fund Holdings | 164 | |||||||
Sector Allocation (% Equities) |
| |||||||
Financials | 27.6 | |||||||
Industrials | 15.3 | |||||||
Health Care | 13.5 | |||||||
Information Technology | 10.3 | |||||||
Consumer Discretionary | 7.6 | |||||||
Energy | 6.9 | |||||||
Communication Services | 6.0 | |||||||
Consumer Staples | 4.3 | |||||||
Utilities | 4.0 | |||||||
Materials | 3.5 | |||||||
Real Estate | 1.0 |
3
American Beacon Large Cap Value FundSM
April 30, 2021 (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 November 1, 2020 through April 30, 2021.
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 R5 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 R5 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.
4
American Beacon Large Cap Value FundSM
Expense Examples
April 30, 2021 (Unaudited)
American Beacon Large Cap Value Fund |
| ||||||||||||||
Beginning Account Value 11/1/2020 | Ending Account Value 4/30/2021 | Expenses Paid During Period 11/1/2020-4/30/2021* | |||||||||||||
R5 Class | |||||||||||||||
Actual | $1,000.00 | $1,437.80 | $3.75 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.72 | $3.11 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,437.20 | $4.23 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.32 | $3.51 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,435.30 | $5.74 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.08 | $4.76 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,434.50 | $6.64 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.34 | $5.51 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,435.30 | $6.04 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.84 | $5.01 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,430.70 | $10.19 | ||||||||||||
Hypothetical** | $1,000.00 | $1,016.41 | $8.45 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,438.30 | $3.63 | ||||||||||||
Hypothetical** | $1,000.00 | $1,021.82 | $3.01 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.62%, 0.70%, 0.95%, 1.10%, 1.00%, 1.69%, and 0.60% for the R5, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.21% | |||||||||||||||
Communication Services - 5.87% | |||||||||||||||
Diversified Telecommunication Services - 0.10% | |||||||||||||||
Verizon Communications, Inc. | 69,789 | $ | 4,033,106 | ||||||||||||
|
| ||||||||||||||
Interactive Media & Services - 0.74% | |||||||||||||||
Alphabet, Inc., Class AA | 13,500 | 31,772,250 | |||||||||||||
|
| ||||||||||||||
Media - 4.50% | |||||||||||||||
Altice USA, Inc., Class AA | 845,082 | 30,684,928 | |||||||||||||
Comcast Corp., Class A | 1,725,115 | 96,865,207 | |||||||||||||
Discovery, Inc., Class CA | 767,200 | 24,788,232 | |||||||||||||
Interpublic Group of Cos., Inc. | 242,700 | 7,705,725 | |||||||||||||
News Corp., Class A | 959,200 | 25,126,244 | |||||||||||||
Omnicom Group, Inc. | 91,878 | 7,557,884 | |||||||||||||
|
| ||||||||||||||
192,728,220 | |||||||||||||||
|
| ||||||||||||||
Wireless Telecommunication Services - 0.53% | |||||||||||||||
Vodafone Group PLC, Sponsored ADR | 1,190,650 | 22,562,818 | |||||||||||||
|
| ||||||||||||||
Total Communication Services | 251,096,394 | ||||||||||||||
|
| ||||||||||||||
Consumer Discretionary - 7.39% | |||||||||||||||
Auto Components - 0.98% | |||||||||||||||
Adient PLCA | 134,798 | 6,246,539 | |||||||||||||
Goodyear Tire & Rubber Co.A | 361,200 | 6,216,252 | |||||||||||||
Magna International, Inc. | 312,600 | 29,515,692 | |||||||||||||
|
| ||||||||||||||
41,978,483 | |||||||||||||||
|
| ||||||||||||||
Automobiles - 1.15% | |||||||||||||||
General Motors Co. | 673,332 | 38,528,057 | |||||||||||||
Harley-Davidson, Inc. | 219,112 | 10,598,447 | |||||||||||||
|
| ||||||||||||||
49,126,504 | |||||||||||||||
|
| ||||||||||||||
Hotels, Restaurants & Leisure - 1.88% | |||||||||||||||
Aramark | 917,471 | 35,662,098 | |||||||||||||
Booking Holdings, Inc.A | 5,000 | 12,330,400 | |||||||||||||
Las Vegas Sands Corp. | 440,195 | 26,966,345 | |||||||||||||
Marriott International, Inc., Class AA | 35,840 | 5,322,957 | |||||||||||||
|
| ||||||||||||||
80,281,800 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 0.50% | |||||||||||||||
Lennar Corp., Class A | 205,121 | 21,250,536 | |||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.65% | |||||||||||||||
Dollar General Corp. | 128,834 | 27,667,102 | |||||||||||||
|
| ||||||||||||||
Specialty Retail - 1.68% | |||||||||||||||
Advance Auto Parts, Inc. | 179,312 | 35,891,090 | |||||||||||||
Lowe’s Cos., Inc. | 183,908 | 36,091,945 | |||||||||||||
|
| ||||||||||||||
71,983,035 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.55% | |||||||||||||||
Ralph Lauren Corp. | 178,272 | 23,761,875 | |||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 316,049,335 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 4.20% | |||||||||||||||
Beverages - 1.70% | |||||||||||||||
Coca-Cola European Partners PLC | 730,337 | 41,497,748 |
See accompanying notes
6
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.21% (continued) | |||||||||||||||
Consumer Staples - 4.20% (continued) | |||||||||||||||
Beverages - 1.70% (continued) | |||||||||||||||
Diageo PLC, Sponsored ADR | 115,623 | $ | 20,736,985 | ||||||||||||
PepsiCo, Inc. | 72,182 | 10,405,757 | |||||||||||||
|
| ||||||||||||||
72,640,490 | |||||||||||||||
|
| ||||||||||||||
Food Products - 1.08% | |||||||||||||||
Archer-Daniels-Midland Co. | 126,355 | 7,976,791 | |||||||||||||
JM Smucker Co. | 28,673 | 3,755,876 | |||||||||||||
Mondelez International, Inc., Class A | 207,800 | 12,636,318 | |||||||||||||
Nestle S.A., Sponsored ADR | 181,848 | 21,736,292 | |||||||||||||
|
| ||||||||||||||
46,105,277 | |||||||||||||||
|
| ||||||||||||||
Household Products - 0.67% | |||||||||||||||
Colgate-Palmolive Co. | 128,990 | 10,409,493 | |||||||||||||
Kimberly-Clark Corp. | 76,151 | 10,152,451 | |||||||||||||
Reckitt Benckiser Group PLC, Sponsored ADRB | 459,464 | 8,325,488 | |||||||||||||
|
| ||||||||||||||
28,887,432 | |||||||||||||||
|
| ||||||||||||||
Personal Products - 0.59% | |||||||||||||||
Unilever PLC, Sponsored ADR | 426,800 | 25,061,696 | |||||||||||||
|
| ||||||||||||||
Tobacco - 0.16% | |||||||||||||||
Philip Morris International, Inc. | 71,970 | 6,837,150 | |||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 179,532,045 | ||||||||||||||
|
| ||||||||||||||
Energy - 6.74% | |||||||||||||||
Energy Equipment & Services - 1.04% | |||||||||||||||
Baker Hughes Co. | 320,000 | 6,425,600 | |||||||||||||
Halliburton Co. | 708,800 | 13,864,128 | |||||||||||||
NOV, Inc. | 1,096,500 | 16,392,675 | |||||||||||||
Schlumberger N.V. | 301,200 | 8,147,460 | |||||||||||||
|
| ||||||||||||||
44,829,863 | |||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 5.70% | |||||||||||||||
APA Corp. | 1,242,400 | 24,848,000 | |||||||||||||
Chevron Corp. | 311,150 | 32,070,230 | |||||||||||||
ConocoPhillips | 201,124 | 10,285,481 | |||||||||||||
EOG Resources, Inc. | 101,065 | 7,442,427 | |||||||||||||
Hess Corp. | 703,743 | 52,435,891 | |||||||||||||
Marathon Oil Corp. | 2,839,086 | 31,968,108 | |||||||||||||
Marathon Petroleum Corp. | 181,580 | 10,104,927 | |||||||||||||
Murphy Oil Corp. | 186,870 | 3,163,709 | |||||||||||||
Phillips 66 | 560,516 | 45,351,350 | |||||||||||||
Pioneer Natural Resources Co. | 44,154 | 6,792,210 | |||||||||||||
Royal Dutch Shell PLC, Class A, Sponsored ADR | 508,922 | 19,339,036 | |||||||||||||
|
| ||||||||||||||
243,801,369 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 288,631,232 | ||||||||||||||
|
| ||||||||||||||
Financials - 26.82% | |||||||||||||||
Banks - 11.50% | |||||||||||||||
Bank of America Corp. | 707,062 | 28,657,223 | |||||||||||||
CIT Group, Inc. | 196,900 | 10,492,801 | |||||||||||||
Citigroup, Inc. | 1,895,674 | 135,047,816 | |||||||||||||
Citizens Financial Group, Inc. | 310,953 | 14,390,905 | |||||||||||||
JPMorgan Chase & Co. | 662,556 | 101,907,738 | |||||||||||||
PNC Financial Services Group, Inc. | 97,130 | 18,158,454 |
See accompanying notes
7
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.21% (continued) | |||||||||||||||
Financials - 26.82% (continued) | |||||||||||||||
Banks - 11.50% (continued) | |||||||||||||||
Truist Financial Corp. | 199,953 | $ | 11,859,212 | ||||||||||||
US Bancorp | 1,001,554 | 59,442,230 | |||||||||||||
Wells Fargo & Co. | 2,486,442 | 112,014,212 | |||||||||||||
|
| ||||||||||||||
491,970,591 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 5.18% | |||||||||||||||
Bank of New York Mellon Corp. | 447,600 | 22,326,288 | |||||||||||||
BlackRock, Inc. | 23,779 | 19,482,135 | |||||||||||||
Goldman Sachs Group, Inc. | 252,721 | 88,060,633 | |||||||||||||
Moody’s Corp. | 23,689 | 7,739,433 | |||||||||||||
Morgan Stanley | 239,575 | 19,776,916 | |||||||||||||
Nasdaq, Inc. | 159,086 | 25,698,752 | |||||||||||||
Northern Trust Corp. | 168,834 | 19,213,309 | |||||||||||||
State Street Corp. | 173,880 | 14,597,226 | |||||||||||||
T Rowe Price Group, Inc. | 27,108 | 4,857,754 | |||||||||||||
|
| ||||||||||||||
221,752,446 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 2.18% | |||||||||||||||
American Express Co. | 311,555 | 47,776,959 | |||||||||||||
Discover Financial Services | 70,200 | 8,002,800 | |||||||||||||
Navient Corp. | 921,813 | 15,514,113 | |||||||||||||
SLM Corp. | 1,109,687 | 21,816,446 | |||||||||||||
|
| ||||||||||||||
93,110,318 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.87% | |||||||||||||||
Berkshire Hathaway, Inc., Class BA | 80,400 | 22,105,980 | |||||||||||||
Equitable Holdings, Inc. | 438,100 | 14,996,163 | |||||||||||||
|
| ||||||||||||||
37,102,143 | |||||||||||||||
|
| ||||||||||||||
Insurance - 7.09% | |||||||||||||||
American International Group, Inc. | 2,095,707 | 101,537,004 | |||||||||||||
Aon PLC, Class A | 133,170 | 33,484,265 | |||||||||||||
Chubb Ltd. | 280,881 | 48,196,371 | |||||||||||||
Hartford Financial Services Group, Inc. | 261,400 | 17,241,944 | |||||||||||||
Marsh & McLennan Cos., Inc. | 201,924 | 27,401,087 | |||||||||||||
Progressive Corp. | 143,335 | 14,439,568 | |||||||||||||
Travelers Cos., Inc. | 262,705 | 40,629,955 | |||||||||||||
Willis Towers Watson PLC | 79,815 | 20,660,911 | |||||||||||||
|
| ||||||||||||||
303,591,105 | |||||||||||||||
|
| ||||||||||||||
Total Financials | 1,147,526,603 | ||||||||||||||
|
| ||||||||||||||
Health Care - 13.08% | |||||||||||||||
Biotechnology - 0.12% | |||||||||||||||
Biogen, Inc.A | 18,700 | 4,999,071 | |||||||||||||
|
| ||||||||||||||
Health Care Equipment & Supplies - 3.55% | |||||||||||||||
Abbott Laboratories | 171,274 | 20,566,582 | |||||||||||||
Boston Scientific Corp.A | 494,788 | 21,572,757 | |||||||||||||
Danaher Corp. | 95,000 | 24,124,300 | |||||||||||||
Medtronic PLC | 583,237 | 76,357,388 | |||||||||||||
Zimmer Biomet Holdings, Inc. | 52,867 | 9,365,918 | |||||||||||||
|
| ||||||||||||||
151,986,945 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 5.75% | |||||||||||||||
Anthem, Inc. | 226,153 | 85,800,186 |
See accompanying notes
8
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.21% (continued) | |||||||||||||||
Health Care - 13.08% (continued) | |||||||||||||||
Health Care Providers & Services - 5.75% (continued) | |||||||||||||||
Centene Corp.A | 209,600 | $ | 12,940,704 | ||||||||||||
Cigna Corp. | 137,774 | 34,307,104 | |||||||||||||
CVS Health Corp. | 432,233 | 33,022,601 | |||||||||||||
HCA Healthcare, Inc. | 37,000 | 7,439,220 | |||||||||||||
Humana, Inc. | 24,300 | 10,819,332 | |||||||||||||
McKesson Corp. | 66,837 | 12,535,948 | |||||||||||||
UnitedHealth Group, Inc. | 123,240 | 49,148,112 | |||||||||||||
|
| ||||||||||||||
246,013,207 | |||||||||||||||
|
| ||||||||||||||
Life Sciences Tools & Services - 0.57% | |||||||||||||||
Thermo Fisher Scientific, Inc. | 51,693 | 24,307,599 | |||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 3.09% | |||||||||||||||
Bristol-Myers Squibb Co. | 138,600 | 8,651,412 | |||||||||||||
GlaxoSmithKline PLC, Sponsored ADRB | 489,434 | 18,275,466 | |||||||||||||
Johnson & Johnson | 300,094 | 48,834,297 | |||||||||||||
Merck & Co., Inc. | 235,347 | 17,533,351 | |||||||||||||
Pfizer, Inc. | 550,433 | 21,274,235 | |||||||||||||
Roche Holding AG, Sponsored ADR | 132,056 | 5,376,000 | |||||||||||||
Sanofi, ADRB | 236,364 | 12,378,383 | |||||||||||||
|
| ||||||||||||||
132,323,144 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 559,629,966 | ||||||||||||||
|
| ||||||||||||||
Industrials - 14.89% | |||||||||||||||
Aerospace & Defense - 2.99% | |||||||||||||||
General Dynamics Corp. | 166,049 | 31,587,501 | |||||||||||||
Lockheed Martin Corp. | 32,621 | 12,414,248 | |||||||||||||
Northrop Grumman Corp. | 78,091 | 27,678,574 | |||||||||||||
Raytheon Technologies Corp. | 677,842 | 56,423,568 | |||||||||||||
|
| ||||||||||||||
128,103,891 | |||||||||||||||
|
| ||||||||||||||
Air Freight & Logistics - 0.55% | |||||||||||||||
FedEx Corp. | 81,200 | 23,573,172 | |||||||||||||
|
| ||||||||||||||
Building Products - 1.17% | |||||||||||||||
Johnson Controls International PLC | 311,273 | 19,404,759 | |||||||||||||
Masco Corp. | 225,107 | 14,379,835 | |||||||||||||
Trane Technologies PLC | 92,280 | 16,041,032 | |||||||||||||
|
| ||||||||||||||
49,825,626 | |||||||||||||||
|
| ||||||||||||||
Construction & Engineering - 1.50% | |||||||||||||||
AECOMA | 568,633 | 37,774,290 | |||||||||||||
Fluor Corp.A | 182,300 | 4,189,254 | |||||||||||||
Quanta Services, Inc. | 229,169 | 22,146,892 | |||||||||||||
|
| ||||||||||||||
64,110,436 | |||||||||||||||
|
| ||||||||||||||
Electrical Equipment - 0.80% | |||||||||||||||
Eaton Corp. PLC | 149,689 | 21,395,049 | |||||||||||||
Emerson Electric Co. | 142,584 | 12,902,426 | |||||||||||||
|
| ||||||||||||||
34,297,475 | |||||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 2.25% | |||||||||||||||
General Electric Co. | 4,540,700 | 59,573,984 | |||||||||||||
Honeywell International, Inc. | 165,341 | 36,877,657 | |||||||||||||
|
| ||||||||||||||
96,451,641 | |||||||||||||||
|
| ||||||||||||||
See accompanying notes
9
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.21% (continued) | |||||||||||||||
Industrials - 14.89% (continued) | |||||||||||||||
Machinery - 3.97% | |||||||||||||||
CNH Industrial N.V. | 1,792,339 | $ | 26,598,311 | ||||||||||||
Cummins, Inc. | 79,397 | 20,011,220 | |||||||||||||
Deere & Co. | 70,032 | 25,971,367 | |||||||||||||
Illinois Tool Works, Inc. | 106,861 | 24,627,186 | |||||||||||||
Otis Worldwide Corp. | 58,384 | 4,546,362 | |||||||||||||
PACCAR, Inc. | 77,851 | 6,997,248 | |||||||||||||
Stanley Black & Decker, Inc. | 268,643 | 55,547,313 | |||||||||||||
Westinghouse Air Brake Technologies Corp. | 66,621 | 5,467,586 | |||||||||||||
|
| ||||||||||||||
169,766,593 | |||||||||||||||
|
| ||||||||||||||
Professional Services - 0.38% | |||||||||||||||
Equifax, Inc. | 71,504 | 16,390,862 | |||||||||||||
|
| ||||||||||||||
Road & Rail - 1.28% | |||||||||||||||
Canadian National Railway Co. | 71,721 | 7,720,765 | |||||||||||||
JB Hunt Transport Services, Inc. | 154,649 | 26,400,131 | |||||||||||||
Union Pacific Corp. | 92,331 | 20,505,792 | |||||||||||||
|
| ||||||||||||||
54,626,688 | |||||||||||||||
|
| ||||||||||||||
Total Industrials | 637,146,384 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 9.99% | |||||||||||||||
Communications Equipment - 0.86% | |||||||||||||||
F5 Networks, Inc.A | 114,400 | 21,365,344 | |||||||||||||
Telefonaktiebolaget LM Ericsson, Sponsored ADR | 1,123,820 | 15,497,478 | |||||||||||||
|
| ||||||||||||||
36,862,822 | |||||||||||||||
|
| ||||||||||||||
Electronic Equipment, Instruments & Components - 0.93% | |||||||||||||||
Corning, Inc. | 487,140 | 21,536,459 | |||||||||||||
TE Connectivity Ltd. | 135,400 | 18,207,238 | |||||||||||||
|
| ||||||||||||||
39,743,697 | |||||||||||||||
|
| ||||||||||||||
IT Services - 2.44% | |||||||||||||||
Accenture PLC, Class A | 125,910 | 36,510,123 | |||||||||||||
Cognizant Technology Solutions Corp., Class A | 391,630 | 31,487,052 | |||||||||||||
Fidelity National Information Services, Inc. | 110,422 | 16,883,524 | |||||||||||||
Fiserv, Inc.A | 162,138 | 19,476,016 | |||||||||||||
|
| ||||||||||||||
104,356,715 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 3.49% | |||||||||||||||
Analog Devices, Inc. | 63,843 | 9,778,194 | |||||||||||||
Broadcom, Inc. | 78,045 | 35,604,129 | |||||||||||||
Intel Corp. | 222,863 | 12,821,308 | |||||||||||||
NXP Semiconductors N.V. | 60,694 | 11,684,202 | |||||||||||||
QUALCOMM, Inc. | 147,250 | 20,438,300 | |||||||||||||
Texas Instruments, Inc. | 327,330 | 59,086,338 | |||||||||||||
|
| ||||||||||||||
149,412,471 | |||||||||||||||
|
| ||||||||||||||
Software - 1.87% | |||||||||||||||
Microsoft Corp. | 139,108 | 35,080,256 | |||||||||||||
Oracle Corp. | 591,442 | 44,825,389 | |||||||||||||
|
| ||||||||||||||
79,905,645 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 0.40% | |||||||||||||||
Hewlett Packard Enterprise Co. | 1,086,044 | 17,398,425 | |||||||||||||
|
| ||||||||||||||
Total Information Technology | 427,679,775 | ||||||||||||||
|
| ||||||||||||||
See accompanying notes
10
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.21% (continued) | |||||||||||||||
Materials - 3.37% | |||||||||||||||
Chemicals - 3.10% | |||||||||||||||
Corteva, Inc. | 748,611 | $ | 36,502,272 | ||||||||||||
DuPont de Nemours, Inc. | 114,481 | 8,827,630 | |||||||||||||
International Flavors & Fragrances, Inc. | 310,283 | 44,112,934 | |||||||||||||
PPG Industries, Inc. | 152,779 | 26,161,876 | |||||||||||||
Sherwin-Williams Co. | 61,481 | 16,837,802 | |||||||||||||
|
| ||||||||||||||
132,442,514 | |||||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.27% | |||||||||||||||
International Paper Co. | 202,786 | 11,761,588 | |||||||||||||
|
| ||||||||||||||
Total Materials | 144,204,102 | ||||||||||||||
|
| ||||||||||||||
Real Estate - 0.93% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 0.93% | |||||||||||||||
MGM Growth Properties LLC, Class A | 964,670 | 34,747,414 | |||||||||||||
Public Storage | 18,332 | 5,154,225 | |||||||||||||
|
| ||||||||||||||
39,901,639 | |||||||||||||||
|
| ||||||||||||||
Total Real Estate | 39,901,639 | ||||||||||||||
|
| ||||||||||||||
Utilities - 3.93% | |||||||||||||||
Electric Utilities - 3.45% | |||||||||||||||
American Electric Power Co., Inc. | 118,589 | 10,520,030 | |||||||||||||
Duke Energy Corp. | 291,295 | 29,330,494 | |||||||||||||
Edison International | 372,721 | 22,158,263 | |||||||||||||
Exelon Corp. | 386,285 | 17,359,648 | |||||||||||||
PPL Corp. | 1,016,454 | 29,609,305 | |||||||||||||
Southern Co. | 474,025 | 31,366,234 | |||||||||||||
Xcel Energy, Inc. | 101,217 | 7,216,772 | |||||||||||||
|
| ||||||||||||||
147,560,746 | |||||||||||||||
|
| ||||||||||||||
Multi-Utilities - 0.48% | |||||||||||||||
Dominion Energy, Inc. | 257,311 | 20,559,149 | |||||||||||||
|
| ||||||||||||||
Total Utilities | 168,119,895 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $2,687,968,835) | 4,159,517,370 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 2.64% (Cost $112,857,015) | |||||||||||||||
Investment Companies - 2.64% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%C D | 112,857,015 | 112,857,015 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 0.13% (Cost $5,590,724) | |||||||||||||||
Investment Companies - 0.13% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%C D | 5,590,724 | 5,590,724 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 99.98% (Cost $2,806,416,574) | 4,277,965,109 | ||||||||||||||
OTHER ASSETS, NET OF LIABILITIES - 0.02% | 911,112 | ||||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 4,278,876,221 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at April 30, 2021 (Note 9).
C The Fund is affiliated by having the same investment advisor.
D 7-day yield.
See accompanying notes
11
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
ADR - American Depositary Receipt.
LLC - Limited Liability Company.
PLC - Public Limited Company.
Long Futures Contracts Open on April 30, 2021: |
| |||||||||||||||
Equity Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
S&P 500 E-Mini Index Futures | 525 | June 2021 | $ | 109,571,358 | $ | 109,578,000 | $ | 6,642 | ||||||||
|
|
|
|
|
| |||||||||||
$ | 109,571,358 | $ | 109,578,000 | $ | 6,642 | |||||||||||
|
|
|
|
|
|
Index Abbreviations: | ||
S&P 500 | S&P 500 Index - U.S. Equity Large-Cap Index. |
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2021, the investments were classified as described below:
Large Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Common Stocks | $ | 4,159,517,370 | $ | - | $ | - | $ | 4,159,517,370 | ||||||||||||||||||||
Short-Term Investments | 112,857,015 | - | - | 112,857,015 | ||||||||||||||||||||||||
Securities Lending Collateral | 5,590,724 | - | - | 5,590,724 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 4,277,965,109 | $ | - | $ | - | $ | 4,277,965,109 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Assets | ||||||||||||||||||||||||||||
Futures Contracts | $ | 6,642 | $ | - | $ | - | $ | 6,642 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Assets | $ | 6,642 | $ | - | $ | - | $ | 6,642 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the period ended April 30, 2021, there were no transfers into or out of Level 3.
See accompanying notes
12
American Beacon Large Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2021 (Unaudited)
Assets: |
| |||
Investments in unaffiliated securities, at fair value†§ | $ | 4,159,517,370 | ||
Investments in affiliated securities, at fair value‡ | 118,447,739 | |||
Cash collateral held at broker for futures contracts | 6,747,000 | |||
Dividends and interest receivable | 3,974,428 | |||
Receivable for investments sold | 4,633,901 | |||
Receivable for fund shares sold | 3,268,189 | |||
Receivable for tax reclaims | 599,942 | |||
Receivable for expense reimbursement (Note 2) | 135,220 | |||
Receivable for variation margin on open futures contracts (Note 5) | 7,748 | |||
Prepaid expenses | 119,030 | |||
|
| |||
Total assets | 4,297,450,567 | |||
|
| |||
Liabilities: |
| |||
Payable for investments purchased | 5,684,856 | |||
Payable for fund shares redeemed | 1,886,281 | |||
Cash due to broker for futures contracts | 787,692 | |||
Management and sub-advisory fees payable (Note 2) | 4,060,038 | |||
Service fees payable (Note 2) | 76,391 | |||
Transfer agent fees payable (Note 2) | 38,455 | |||
Payable upon return of securities loaned (Note 9)§ | 5,590,724 | |||
Custody and fund accounting fees payable | 168,391 | |||
Professional fees payable | 127,034 | |||
Trustee fees payable (Note 2) | 51,552 | |||
Payable for prospectus and shareholder reports | 43,671 | |||
Other liabilities | 59,261 | |||
|
| |||
Total liabilities | 18,574,346 | |||
|
| |||
Net assets | $ | 4,278,876,221 | ||
|
| |||
Analysis of net assets: |
| |||
Paid-in-capital | $ | 2,688,898,346 | ||
Total distributable earnings (deficits)A | 1,589,977,875 | |||
|
| |||
Net assets | $ | 4,278,876,221 | ||
|
|
See accompanying notes
13
American Beacon Large Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2021 (Unaudited)
Shares outstanding at no par value (unlimited shares authorized): |
| |||
R5 Class | 71,655,534 | |||
|
| |||
Y Class | 8,183,429 | |||
|
| |||
Investor Class | 31,998,750 | |||
|
| |||
Advisor Class | 2,394,704 | |||
|
| |||
A Class | 624,240 | |||
|
| |||
C Class | 266,135 | |||
|
| |||
R6 Class | 35,025,734 | |||
|
| |||
Net assets: |
| |||
R5 Class | $ | 2,092,395,860 | ||
|
| |||
Y Class | $ | 236,675,154 | ||
|
| |||
Investor Class | $ | 842,311,207 | ||
|
| |||
Advisor Class | $ | 61,879,581 | ||
|
| |||
A Class | $ | 16,120,009 | ||
|
| |||
C Class | $ | 6,823,794 | ||
|
| |||
R6 Class | $ | 1,022,670,616 | ||
|
| |||
Net asset value, offering and redemption price per share: |
| |||
R5 Class | $ | 29.20 | ||
|
| |||
Y Class | $ | 28.92 | ||
|
| |||
Investor Class | $ | 26.32 | ||
|
| |||
Advisor Class | $ | 25.84 | ||
|
| |||
A Class | $ | 25.82 | ||
|
| |||
A Class (offering price) | $ | 27.40 | ||
|
| |||
C Class | $ | 25.64 | ||
|
| |||
R6 Class | $ | 29.20 | ||
|
| |||
† Cost of investments in unaffiliated securities | $ | 2,687,968,835 | ||
‡ Cost of investments in affiliated securities | $ | 118,447,739 | ||
§ Fair value of securities on loan | $ | 8,973,740 | ||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
14
American Beacon Large Cap Value FundSM
Statement of Operations
For the period ended April 30, 2021 (Unaudited)
Investment income: |
| |||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 43,829,292 | ||
Dividend income from affiliated securities (Note 2) | 4,259 | |||
Income derived from securities lending (Note 9) | 502,638 | |||
|
| |||
Total investment income | 44,336,189 | |||
|
| |||
Expenses: |
| |||
Management and sub-advisory fees (Note 2) | 11,727,342 | |||
Transfer agent fees: | ||||
R5 Class (Note 2) | 310,547 | |||
Y Class (Note 2) | 109,631 | |||
Investor Class | 18,027 | |||
Advisor Class | 1,384 | |||
A Class | 671 | |||
C Class | 128 | |||
R6 Class | 17,062 | |||
Custody and fund accounting fees | 210,244 | |||
Professional fees | 125,019 | |||
Registration fees and expenses | 70,958 | |||
Service fees (Note 2): | ||||
Investor Class | 1,424,310 | |||
Advisor Class | 69,353 | |||
A Class | 16,787 | |||
C Class | 2,449 | |||
Distribution fees (Note 2): | ||||
Advisor Class | 69,303 | |||
A Class | 27,768 | |||
C Class | 27,561 | |||
Prospectus and shareholder report expenses | 81,394 | |||
Trustee fees (Note 2) | 167,492 | |||
Loan expense (Note 10) | 10,839 | |||
Other expenses | 202,877 | |||
|
| |||
Total expenses | 14,691,146 | |||
|
| |||
Net fees waived and expenses (reimbursed) (Note 2) | (18,227 | ) | ||
|
| |||
Net expenses | 14,672,919 | |||
|
| |||
Net investment income | 29,663,270 | |||
|
| |||
Realized and unrealized gain from investments: |
| |||
Net realized gain from: | ||||
Investments in unaffiliated securitiesA | 191,447,243 | |||
Foreign currency transactions | 232 | |||
Futures contracts | 20,764,035 | |||
Change in net unrealized appreciation of: | ||||
Investments in unaffiliated securitiesB | 1,271,594,972 | |||
Futures contracts | 4,052,970 | |||
|
| |||
Net gain from investments | 1,487,859,452 | |||
|
| |||
Net increase in net assets resulting from operations | $ | 1,517,522,722 | ||
|
| |||
† Foreign taxes | $ | 307,172 | ||
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
15
American Beacon Large Cap Value FundSM
Statement of Changes in Net Assets
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||
(unaudited) | ||||||||||||
Increase (decrease) in net assets: |
| |||||||||||
Operations: |
| |||||||||||
Net investment income | $ | 29,663,270 | $ | 81,178,908 | ||||||||
Net realized gain from investments in unaffiliated securities, foreign currency transactions and futures contracts | 212,211,510 | 467,774,870 | ||||||||||
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities and futures contracts | 1,275,647,942 | (1,000,341,114 | ) | |||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 1,517,522,722 | (451,387,336 | ) | |||||||||
|
|
|
| |||||||||
Distributions to shareholders: |
| |||||||||||
Total retained earnings: | ||||||||||||
R5 Class | (254,078,202 | ) | (273,627,748 | ) | ||||||||
Y Class | (26,891,195 | ) | (29,187,098 | ) | ||||||||
Investor Class | (112,558,225 | ) | (110,555,842 | ) | ||||||||
Advisor Class | (7,618,655 | ) | (6,464,926 | ) | ||||||||
A Class | (3,990,605 | ) | (4,077,104 | ) | ||||||||
C Class | (690,733 | ) | (658,758 | ) | ||||||||
R6 Class | (155,468,634 | ) | (76,992,021 | ) | ||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (561,296,249 | ) | (501,563,497 | ) | ||||||||
|
|
|
| |||||||||
Capital share transactions (Note 11): |
| |||||||||||
Proceeds from sales of shares | 498,567,389 | 1,238,519,195 | ||||||||||
Reinvestment of dividends and distributions | 510,804,379 | 461,617,755 | ||||||||||
Cost of shares redeemed | (1,464,963,109 | ) | (2,384,380,519 | ) | ||||||||
|
|
|
| |||||||||
Net (decrease) in net assets from capital share transactions | (455,591,341 | ) | (684,243,569 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets | 500,635,132 | (1,637,194,402 | ) | |||||||||
|
|
|
| |||||||||
Net assets: |
| |||||||||||
Beginning of period | 3,778,241,089 | 5,415,435,491 | ||||||||||
|
|
|
| |||||||||
End of period | $ | 4,278,876,221 | $ | 3,778,241,089 | ||||||||
|
|
|
|
See accompanying notes
16
American Beacon Large Cap Value FundSM
April 30, 2021 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of April 30, 2021, the Trust consists of twenty-eight active series, one of which is presented in this filing: American Beacon Large Cap Value Fund (the “Fund”). The remaining twenty-seven 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.
In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives a fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how the Fund will use derivatives, may adversely affect the Fund’s performance and may increase costs related to the Fund’s use of derivatives.
Class Disclosure
The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
R5 Class | 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 Class | All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors. | $ | 2,500 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 |
17
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Class | Eligible Investors | Minimum Initial Investments | ||||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 Class | Large institutional retirement plan investors - sold through retirement plan sponsors. | None |
Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class based on the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.
Significant Accounting Policies
The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the 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 the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Fund. Interest income, 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 based on specific lot identification.
Distributions to Shareholders
The Fund distributes most or all of its net earnings and realized gains, if any, each taxable year in the form of dividends from net investment income and distributions of realized net capital gains and net gains from foreign currency transactions on an annual basis. The Fund does not have a fixed dividend rate and does not guarantee that it will pay any distributions in any particular period. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund may designate earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If the Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the
18
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain (loss) in the Fund’s Statement of Operations, if applicable.
Allocation of Income, Trust Expenses, Gains, and Losses
Investment income, realized and unrealized gains and losses from investments of the Fund is allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Fund. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Fund on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Fund or nature of the services performed and relative applicability to the Fund.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.
2. Transactions with Affiliates
Management and Investment Sub-Advisory Agreements
The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide the Fund with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of the Fund’s average daily net assets that is calculated and accrued daily according to the following schedule:
First $15 billion | 0.35 | % | ||
Next $15 billion | 0.325 | % | ||
Over $30 billion | 0.30 | % |
The Trust, on behalf of the Fund, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Hotchkis and Wiley Capital Management, LLC; and Massachusetts Financial Services Company (“Sub-Advisors”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets.
The Management and Sub-Advisory Fees paid by the Fund for the period ended April 30, 2021 were as follows:
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 7,483,162 | ||||||||
Sub-Advisor Fees | 0.20 | % | 4,244,180 | |||||||||
|
|
|
| |||||||||
Total | 0.55 | % | $ | 11,727,342 | ||||||||
|
|
|
|
19
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee of 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 of 10% of such loan fees. Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the period ended April 30, 2021, the Manager received securities lending fees of $55,105 for the securities lending activities of the Fund.
Distribution Plans
The Fund, except for the Advisor, A and C Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the management fee received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.
Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.
Service Plans
The Manager and the Trust entered into a Service Plan that obligates the Manager to oversee additional shareholder servicing of the Investor, Advisor, A, and C Classes of the Fund. As compensation for performing the duties required under the Service Plan, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the Advisor, A and C Classes, and up to 0.375% of the average daily net assets of the Investor Class of the Fund.
Sub-Transfer Agent Fees
The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the R5 and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to Board approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the R5 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 R5 and Y Classes on an annual basis. During the period ended April 30, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
Large Cap Value | $ | 381,889 |
20
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
As of April 30, 2021, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
Large Cap Value | $ | 3,949 |
Investments in Affiliated Funds
The Fund may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Fund in connection with securities lending may also be invested in the USG Select Fund. The Fund listed below held the following shares with an April 30, 2021 fair value and dividend income earned from the investment in the USG Select Fund.
Affiliated Security | Type of Transaction | Fund | April 30, 2021 Shares/Principal | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Dividend Income | April 30, 2021 Fair Value | |||||||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Direct | Large Cap Value | $ | 112,857,015 | $ | - | $ | - | $ | 4,259 | $ | 112,857,015 | ||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Securities Lending | Large Cap Value | 5,590,724 | - | - | - | 5,590,724 |
The Fund and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the period ended April 30, 2021, the Manager earned fees on the Fund’s direct investments and securities lending collateral investments in the USG Select Fund as shown below:
Fund | Direct Investments in USG Select Fund | Securities Lending Collateral Investments in USG Select Fund | Total | |||||||||
Large Cap Value | $ | 53,194 | $ | 1,882 | $ | 55,076 |
Interfund Credit Facility
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the period ended April 30, 2021, the Fund participated as a lender by loaning an average amount of $1,290,612 for 31 days at an average interest rate of 0.83% with interest charges earned of $907. This amount is included in “Interest income” on the Statement of Operations.
21
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Expense Reimbursement Plan
The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Fund to the extent that total operating expenses exceed the Fund’s expense cap. During the period ended April 30, 2021, the Manager waived and/or reimbursed expenses as follows:
Expense Cap | Expiration of Reimbursed Expenses | |||||||||||||||||||||
Fund | Class | 11/1/2020 - 2/28/2021 | 3/1/2021 - 4/30/2021 | Reimbursed Expenses | (Recouped) Expenses | |||||||||||||||||
Large Cap Value | R6 | 0.59 | % | 0.60 | % | $ | 18,227 | $ | (22,783 | )* | 2023-2024 |
* | This amount represents Recouped Expenses from prior fiscal years and is reflected in Total Expenses on the Statement of Operations. |
Of these amounts, $135,220 was disclosed as a Receivable for Expense Reimbursement on the Statement of Assets and Liabilities at April 30, 2021.
The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years from the date of the Manager’s waiver/reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. The reimbursed expenses listed above will expire in 2023 and 2024. 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 | ||||||||||||
Large Cap Value | $ | 22,783 | $ | 235,308 | $ | - | 2022-2023 |
Sales Commissions
The Fund’s Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers which may be used to offset distribution related expenses. During the period ended April 30, 2021, RID collected $212 from the sale of Class A Shares of the Fund.
A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Fund’s Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the period ended April 30, 2021, there were no CDSC fees collected for the Class A Shares of the Fund.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Fund’s Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended April 30, 2021, CDSC fees of $761 were collected for Class C Shares of the Fund.
Trustee Fees and Expenses
Effective January 1, 2021, as compensation for their service to the American Beacon Funds Complex, including the Trust (collectively, the “Trusts”), each Trustee is compensated from the Trusts as follows: (1) an annual retainer of $120,000; (2) meeting attendance fee (for attendance in-person or via teleconference) of (a) $12,000 for in person attendance, or $5,000 for telephonic attendance, by Board members for each regularly scheduled or special Board meeting, (b) $2,500 for attendance by Committee members at meetings of the Audit
22
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Committee and the Investment Committee, (c) $1,000 for attendance by Committee members at meetings of the Nominating and Governance Committee; and (d) $2,500 for attendance by Board members for each special telephonic Board meeting; and (3) reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. For her service as Board Chair, Ms. Cline receives an additional annual retainer of $50,000. Although she attends several committee meetings at each quarterly Board meeting, she receives only a single $2,500 fee each quarter for her attendance at those meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chair of the Nominating and Governance Committee receives an additional annual retainer of $10,000.
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.
Equity securities, including shares of closed-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 and over-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 been de-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
23
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
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 in non-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 of non-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.
Valuation Inputs
Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1 | - | Quoted prices in active markets for identical securities. | ||
Level 2 | - | Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. | ||
Level 3 | - | Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment. |
Level 1 and Level 2 trading assets and trading liabilities, at fair value
Common stocks, preferred securities and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are generally categorized as Level 2 of the fair value hierarchy.
Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
24
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
4. Securities and Other Investments
American Depositary Receipts and Non-Voting Depositary Receipts
ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Non-Voting Depositary Receipts (“NVDRs”) represent financial interests in an issuer but the holder is not entitled to any voting rights. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers, and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Fund’s possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Fund may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or OTC. OTC stock may be less liquid than exchange-traded stock.
Other Investment Company Securities and Other Exchange-Traded Products
The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies (“BDCs”), ETFs, unit investment trusts, and other investment companies of the Trust. The Fund may invest in securities of an investment company advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Fund becomes a shareholder of that investment company. As a result, the Fund’s shareholders indirectly will bear the Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
Publicly Traded Partnerships/Master Limited Partnerships (“MLPs”)
The Fund may invest in publicly traded partnerships such as MLPs. MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the OTC market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. The general partner or partners are jointly and severally responsible for the liabilities of the MLP. (An MLP also may be an
25
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
entity similar to a limited partnership, such as an LLC, which has one or more managers or managing members and non-managing members (who are like limited partners)). The Fund invests in an MLP as a limited partner and normally would not be liable for the debts of an MLP beyond the amount the Fund has invested therein, but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to a limited partner. The right of an MLP’s creditors would continue even after a Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.
Real Estate Investment Trusts
The Fund may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Fund re-characterizes distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information, which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year.
5. Financial Derivative Instruments
The Fund may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.
Futures Contracts
Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Fund may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities or that the counterparty will fail to perform its obligations.
Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.
During the period ended April 30, 2021, the Fund entered into futures contracts primarily for exposing cash to markets.
The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For the purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.
26
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Average Futures Contracts Outstanding | ||||
Fund | Period Ended April 30, 2021 | |||
Large Cap Value | 565 |
The following is a summary of the fair valuations of the Fund’s derivative instruments categorized by risk exposure(1):
Fair values of financial instruments on the Statement of Assets and Liabilities as of April 30, 2021: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) | $ | - | $ | - | $ | - | $ | - | $ | 6,642 | $ | 6,642 | |||||||||||||||||||||||||||||||||||||||||||
The effect of financial derivative instruments on the Statement of Operations as of April 30, 2021: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | – | $ | – | $ | – | $ | – | $ | 20,764,035 | $ | 20,764,035 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | – | $ | – | $ | – | $ | – | $ | 4,052,970 | $ | 4,052,970 |
(1) See Note 3 in the Notes to Financial Statements for additional information.
(2) Includes cumulative appreciation (depreciation) of futures contracts as reported in the Fund’s Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
Offsetting Assets and Liabilities
The Fund is a party to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Fund employs multiple money managers and counterparties and has elected not to offset qualifying financial and derivative instruments on the Statement of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below, if applicable. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2021.
Offsetting of Financial and Derivative Assets as of April 30, 2021: | ||||||||||||
Assets | Liabilities | |||||||||||
Futures Contracts(1) | $ | 6,642 | $ | - | ||||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | 6,642 | $ | - | ||||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | (6,642 | ) | $ | - | |||||||
|
|
|
|
27
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Remaining Contractual Maturity of the Agreements As of April 30, 2021 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions | ||||||||||||||||||||||||||||||||||||
Common Stocks | $ | 5,590,724 | $ | - | $ | - | $ | - | $ | 5,590,724 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total Borrowings | $ | 5,590,724 | $ | - | $ | - | $ | - | $ | 5,590,724 | ||||||||||||||||||||||||||
|
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|
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|
|
|
|
|
| |||||||||||||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions |
| $ | 5,590,724 | |||||||||||||||||||||||||||||||||
|
|
(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 Statement of Assets and Liabilities.
6. Principal Risks
Investing in the Fund may involve certain risks including, but not limited to, those described below.
Equity Investments Risk
Equity securities are subject to market risk. The Fund’s investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional risk. The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company. Preferred stocks and convertible securities are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency exchange rate fluctuations, political and financial instability in the home country of a particular depositary receipt, less liquidity and more volatility, less government regulation and supervision and delays in transaction settlement.
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, (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. To the extent the Fund invests a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region.
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. There may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes. There can be no assurance that any strategy used will succeed. There also can be no assurance that, at all times, a liquid market will exist for offsetting a futures contract that a Fund has previously bought or sold and this may result in the inability to close a futures
28
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
contract when desired. Futures contracts may experience potentially dramatic price changes, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
Market Risk
The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund’s performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future. The value of a security may decline due to adverse issuer-specific conditions, general market conditions unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole. Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Changes in value may be temporary or may last for extended periods. Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, including the U.S. presidential election, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree.
Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.
Multiple Sub-Advisor Risk
The Manager may allocate the Fund’s assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Fund’s assets. To a significant extent, the Fund’s performance will depend on the success of the Manager in allocating the Fund’s assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-advisor manages its allocated portion of the Fund independently from another sub-advisor, the same security may be held in different portions of the Fund, or may be acquired for one portion of the Fund at a time when a sub-advisor to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Fund’s holdings. Similarly, under some market conditions, one sub-advisor may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-advisor believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Fund. Because each sub-advisor directs the trading for its own portion of the Fund, and does not aggregate its transactions with those of the other sub-advisors, the Fund may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Fund’s assets among the Fund’s sub-advisors in a manner that it believes is consistent with achieving the Fund’s investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Fund’s assets among sub-advisors, due to factors that could impact the Manager’s revenues and profits.
29
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including money market funds that are advised by the Manager. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses, including for example advisory and administrative fees, charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Fund’s investments in money market funds are subject to interest rate risk, credit risk, and market risk. The Fund must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Fund’s investment will decline, adversely affecting the Fund’s performance. To the extent the Fund invests in other investment companies that invest in equity securities, fixed-income securities and/or foreign securities, or that track an index, the Fund is subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject.
Recent Market Events Risk
An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. The transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions and closed borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event changes, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession. The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time.
The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets and has signaled that it plans to maintain its interventions at an elevated level. Amid these ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. The U.S. government has reduced the federal corporate income tax rate, 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. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on January 31, 2020, commonly referred to as “Brexit,” a trade agreement between the United Kingdom and the European Union, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.
Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.
Sector Risk
Sector risk is the risk associated with a Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain
30
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase.
To the extent a Fund invests significantly in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than investment companies investing more broadly.
Securities Lending Risk
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. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.
7. Federal Income and Excise Taxes
It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, the Fund is treated as a single entity for the purpose of determining such qualification.
The Fund does not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2020 remain subject to examination by the Internal Revenue Service. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statement of Operations.
The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation (depreciation), as applicable, as the income is earned or capital gains are recorded.
Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.
As of April 30, 2021, the tax cost for the Fund and their respective gross unrealized appreciation (depreciation) were as follows:
Fund | Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Large Cap Value | $ | 2,922,953,529 | $ | 1,375,427,210 | $ | (20,415,630 | ) | $ | 1,355,011,580 |
31
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the Fund in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.
As of October 31, 2020, the Fund did not have any capital loss carryforwards.
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 2021 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Sales (non-U.S. Government Securities) | ||||||||||
Large Cap Value | $ | 511,595,718 | $ | 1,510,624,280 |
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2021 were as follows:
Fund | Type of Transaction | October 31, 2020 Shares/Fair Value | Purchases | Sales | April 30, 2021 Shares/Fair Value | |||||||||||||||||||||||||||||
Large Cap Value | Direct | $ | 84,250,125 | $ | 1,571,103,653 | $ | 1,542,496,763 | $ | 112,857,015 | |||||||||||||||||||||||||
Large Cap Value | Securities Lending | - | 63,367,320 | 57,776,596 | 5,590,724 |
9. Securities Lending
The Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked-to-market daily. Daily mark-to-market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark-to-market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.
To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statement of Assets and Liabilities as a payable.
Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.
While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.
32
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.
As of April 30, 2021, the value of outstanding securities on loan and the value of collateral were as follows:
Fund | Market Value of Securities on Loan | Cash Collateral Received | Non-Cash Collateral Received | Total Collateral Received | ||||||||||||||||||||||||
Large Cap Value | $ | 8,973,740 | $ | 5,590,724 | $ | 3,669,319 | $ | 9,260,043 |
Cash collateral is listed on the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statement of Operations.
Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statement of Assets and Liabilities.
10. Borrowing Arrangements
Effective November 12, 2020 (the “Effective Date”), the Fund, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.
On the Effective Date, the Fund, along with certain other Participating Funds managed by the Manager, also renewed 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) Overnight Bank Funding Rate (”OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 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 “Loan expense” on the Statement of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.
During the period ended April 30, 2021, the Fund did not utilize this facility.
33
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
11. Capital Share Transactions
The tables below summarize the activity in capital shares for each Class of the Fund:
R5 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 7,212,046 | $ | 192,619,832 | 14,583,865 | $ | 345,640,279 | ||||||||||||||||||||||
Reinvestment of dividends | 9,027,196 | 216,381,886 | 8,842,185 | 241,214,794 | ||||||||||||||||||||||||
Shares redeemed | (21,967,622 | ) | (587,672,932 | ) | (56,846,970 | ) | (1,416,115,045 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (5,728,380 | ) | $ | (178,671,214 | ) | (33,420,920 | ) | $ | (829,259,972 | ) | ||||||||||||||||||
|
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|
|
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|
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| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,345,033 | $ | 35,504,927 | 4,619,593 | $ | 106,515,177 | ||||||||||||||||||||||
Reinvestment of dividends | 1,085,985 | 25,792,134 | 1,043,006 | 28,234,181 | ||||||||||||||||||||||||
Shares redeemed | (1,937,111 | ) | (50,041,744 | ) | (8,700,548 | ) | (223,599,140 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 493,907 | $ | 11,255,317 | (3,037,949 | ) | $ | (88,849,782 | ) | ||||||||||||||||||||
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| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 2,204,993 | $ | 53,719,085 | 4,873,178 | $ | 102,511,782 | ||||||||||||||||||||||
Reinvestment of dividends | 5,150,897 | 111,413,905 | 4,323,502 | 107,957,844 | ||||||||||||||||||||||||
Shares redeemed | (8,568,356 | ) | (203,220,605 | ) | (19,147,457 | ) | (414,908,921 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,212,466 | ) | $ | (38,087,615 | ) | (9,950,777 | ) | $ | (204,439,295 | ) | ||||||||||||||||||
|
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|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 279,402 | $ | 6,533,294 | 549,199 | $ | 11,028,542 | ||||||||||||||||||||||
Reinvestment of dividends | 331,974 | 7,054,439 | 209,035 | 5,140,176 | ||||||||||||||||||||||||
Shares redeemed | (412,752 | ) | (9,647,508 | ) | (1,135,706 | ) | (25,190,406 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 198,624 | $ | 3,940,225 | (377,472 | ) | $ | (9,021,688 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 49,372 | $ | 1,155,474 | 224,146 | $ | 5,007,909 | ||||||||||||||||||||||
Reinvestment of dividends | 184,657 | 3,920,273 | 164,301 | 4,035,240 | ||||||||||||||||||||||||
Shares redeemed | (840,228 | ) | (19,014,654 | ) | (684,117 | ) | (13,767,798 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (606,199 | ) | $ | (13,938,907 | ) | (295,670 | ) | $ | (4,724,649 | ) | ||||||||||||||||||
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|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 57,664 | $ | 1,394,576 | 24,726 | $ | 531,337 | ||||||||||||||||||||||
Reinvestment of dividends | 31,897 | 673,993 | 25,018 | 611,677 | ||||||||||||||||||||||||
Shares redeemed | (49,366 | ) | (1,164,290 | ) | (91,652 | ) | (1,912,256 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 40,195 | $ | 904,279 | (41,908 | ) | $ | (769,242 | ) | ||||||||||||||||||||
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|
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|
| |||||||||||||||||||||
34
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
R6 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Large Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 7,734,965 | $ | 207,640,201 | 26,236,020 | $ | 667,284,169 | ||||||||||||||||||||||
Reinvestment of dividends | 6,072,914 | 145,567,749 | 2,730,148 | 74,423,843 | ||||||||||||||||||||||||
Shares redeemed | (21,934,557 | ) | (594,201,376 | ) | (11,934,191 | ) | (288,886,953 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | (8,126,678 | ) | $ | (240,993,426 | ) | 17,031,977 | $ | 452,821,059 | ||||||||||||||||||||
|
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|
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|
|
|
12. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.
35
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R5 ClassAB | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020C | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.36 | $ | 28.32 | $ | 28.41 | $ | 30.98 | $ | 25.80 | $ | 28.38 | ||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.26 | 0.65 | 0.63 | 0.63 | 0.59 | 0.61 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 9.18 | (2.89 | ) | 1.69 | (0.07 | ) | 5.41 | (0.29 | ) | |||||||||||||||||||||||||||||||||||
|
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|
|
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|
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 9.44 | (2.24 | ) | 2.32 | 0.56 | 6.00 | 0.32 | |||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.49 | ) | (0.62 | ) | (0.55 | ) | (0.55 | ) | (0.60 | ) | (0.52 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (3.11 | ) | (2.10 | ) | (1.86 | ) | (2.58 | ) | (0.22 | ) | (2.38 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (3.60 | ) | (2.72 | ) | (2.41 | ) | (3.13 | ) | (0.82 | ) | (2.90 | ) | ||||||||||||||||||||||||||||||||
|
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|
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|
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 29.20 | $ | 23.36 | $ | 28.32 | $ | 28.41 | $ | 30.98 | $ | 25.80 | ||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||
Total returnD | 43.78 | %E | (9.29 | )% | 10.14 | % | 1.51 | % | 23.60 | % | 1.69 | % | ||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 2,092,395,860 | $ | 1,807,587,315 | $ | 3,137,789,485 | $ | 3,700,700,522 | $ | 4,765,771,483 | $ | 5,137,688,375 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.62 | %F | 0.63 | % | 0.63 | % | 0.62 | % | 0.60 | % | 0.60 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.62 | %F | 0.63 | % | 0.63 | % | 0.62 | % | 0.60 | % | 0.60 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.47 | %F | 1.90 | % | 2.07 | % | 1.83 | % | 1.78 | % | 2.16 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.47 | %F | 1.90 | % | 2.07 | % | 1.83 | % | 1.78 | % | 2.16 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %E | 67 | % | 23 | % | 23 | % | 25 | % | 25 | % |
A | Prior to February 28, 2020, the R5 Class was known as Institutional Class. |
B | On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class. |
C | On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
D | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
E | Not annualized. |
F | Annualized. |
See accompanying notes
36
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.16 | $ | 28.10 | $ | 28.20 | $ | 30.78 | $ | 25.64 | $ | 28.21 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.21 | 0.39 | 0.56 | 0.57 | 0.48 | 0.59 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 9.14 | (2.63 | ) | 1.72 | (0.04 | ) | 5.46 | (0.29 | ) | |||||||||||||||||||||||||||||||||||
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|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 9.35 | (2.24 | ) | 2.28 | 0.53 | 5.94 | 0.30 | |||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.48 | ) | (0.60 | ) | (0.52 | ) | (0.53 | ) | (0.58 | ) | (0.49 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (3.11 | ) | (2.10 | ) | (1.86 | ) | (2.58 | ) | (0.22 | ) | (2.38 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total distributions | (3.59 | ) | (2.70 | ) | (2.38 | ) | (3.11 | ) | (0.80 | ) | (2.87 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 28.92 | $ | 23.16 | $ | 28.10 | $ | 28.20 | $ | 30.78 | $ | 25.64 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnB | 43.72 | %C | (9.35 | )% | 10.05 | % | 1.42 | % | 23.51 | % | 1.61 | % | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 236,675,154 | $ | 178,065,442 | $ | 301,457,382 | $ | 298,017,629 | $ | 384,155,569 | $ | 349,542,346 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.70 | %D | 0.70 | % | 0.70 | % | 0.68 | % | 0.67 | % | 0.67 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.70 | %D | 0.70 | % | 0.70 | % | 0.68 | % | 0.67 | % | 0.67 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.39 | %D | 1.84 | % | 1.98 | % | 1.77 | % | 1.69 | % | 2.08 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.39 | %D | 1.84 | % | 1.98 | % | 1.77 | % | 1.69 | % | 2.08 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %C | 67 | % | 23 | % | 23 | % | 25 | % | 25 | % |
A | On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
See accompanying notes
37
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 21.32 | $ | 26.06 | $ | 26.33 | $ | 28.92 | $ | 24.13 | $ | 26.70 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.13 | 0.29 | 0.41 | 0.41 | 0.40 | 0.46 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 8.39 | (2.41 | ) | 1.63 | 0.02 | 5.12 | (0.25 | ) | ||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 8.52 | (2.12 | ) | 2.04 | 0.43 | 5.52 | 0.21 | |||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.41 | ) | (0.52 | ) | (0.45 | ) | (0.44 | ) | (0.51 | ) | (0.40 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (3.11 | ) | (2.10 | ) | (1.86 | ) | (2.58 | ) | (0.22 | ) | (2.38 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total distributions | (3.52 | ) | (2.62 | ) | (2.31 | ) | (3.02 | ) | (0.73 | ) | (2.78 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 26.32 | $ | 21.32 | $ | 26.06 | $ | 26.33 | $ | 28.92 | $ | 24.13 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnB | 43.53 | %C | (9.59 | )% | 9.77 | % | 1.18 | % | 23.20 | % | 1.33 | % | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 842,311,207 | $ | 707,970,431 | $ | 1,124,625,846 | $ | 1,505,354,807 | $ | 1,990,199,621 | $ | 2,245,534,741 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.95 | %D | 0.96 | % | 0.96 | % | 0.95 | % | 0.92 | % | 0.93 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.95 | %D | 0.96 | % | 0.96 | % | 0.95 | % | 0.92 | % | 0.93 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.14 | %D | 1.57 | % | 1.74 | % | 1.50 | % | 1.46 | % | 1.84 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.14 | %D | 1.57 | % | 1.74 | % | 1.50 | % | 1.46 | % | 1.84 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %C | 67 | % | 23 | % | 23 | % | 25 | % | 25 | % |
A | On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
See accompanying notes
38
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020B | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 20.97 | $ | 25.68 | $ | 25.95 | $ | 28.54 | $ | 23.82 | $ | 26.40 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.20 | 0.24 | 0.47 | 0.28 | 0.21 | 0.40 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 8.16 | (2.36 | ) | 1.52 | 0.10 | 5.20 | (0.22 | ) | ||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 8.36 | (2.12 | ) | 1.99 | 0.38 | 5.41 | 0.18 | |||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.38 | ) | (0.49 | ) | (0.40 | ) | (0.39 | ) | (0.47 | ) | (0.38 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (3.11 | ) | (2.10 | ) | (1.86 | ) | (2.58 | ) | (0.22 | ) | (2.38 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total distributions | (3.49 | ) | (2.59 | ) | (2.26 | ) | (2.97 | ) | (0.69 | ) | (2.76 | ) | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 25.84 | $ | 20.97 | $ | 25.68 | $ | 25.95 | $ | 28.54 | $ | 23.82 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnC | 43.45 | %D | (9.73 | )% | 9.64 | % | 1.00 | % | 23.00 | % | 1.21 | % | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 61,879,581 | $ | 46,049,690 | $ | 66,077,449 | $ | 62,811,940 | $ | 88,196,090 | $ | 113,168,437 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.10 | %E | 1.10 | % | 1.10 | % | 1.09 | % | 1.07 | % | 1.08 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.10 | %E | 1.10 | % | 1.10 | % | 1.09 | % | 1.07 | % | 1.08 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.99 | %E | 1.42 | % | 1.58 | % | 1.36 | % | 1.31 | % | 1.69 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.99 | %E | 1.42 | % | 1.58 | % | 1.36 | % | 1.31 | % | 1.69 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %D | 67 | % | 23 | % | 23 | % | 25 | % | 25 | % |
A | On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class. |
B | On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
See accompanying notes
39
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 20.96 | $ | 25.66 | $ | 26.00 | $ | 28.61 | $ | 23.90 | $ | 26.51 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.13 | B | 0.20 | 0.40 | 0.48 | 0.28 | 0.42 | |||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 8.24 | (2.29 | ) | 1.59 | (0.06 | ) | 5.17 | (0.21 | ) | |||||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 8.37 | (2.09 | ) | 1.99 | 0.42 | 5.45 | 0.21 | |||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.40 | ) | (0.51 | ) | (0.47 | ) | (0.45 | ) | (0.52 | ) | (0.44 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (3.11 | ) | (2.10 | ) | (1.86 | ) | (2.58 | ) | (0.22 | ) | (2.38 | ) | ||||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (3.51 | ) | (2.61 | ) | (2.33 | ) | (3.03 | ) | (0.74 | ) | (2.82 | ) | ||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 25.82 | $ | 20.96 | $ | 25.66 | $ | 26.00 | $ | 28.61 | $ | 23.90 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Total returnC | 43.53 | %D | (9.65 | )% | 9.72 | % | 1.15 | % | 23.13 | % | 1.33 | % | ||||||||||||||||||||||||||||||||
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Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 16,120,009 | $ | 25,792,400 | $ | 39,157,098 | $ | 42,722,617 | $ | 40,073,435 | $ | 35,071,001 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.00 | %E | 1.00 | % | 1.01 | % | 0.93 | % | 0.98 | % | 0.98 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.00 | %E | 1.00 | % | 1.01 | % | 0.93 | % | 0.98 | % | 0.98 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.09 | %E | 1.52 | % | 1.68 | % | 1.49 | % | 1.38 | % | 1.78 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.09 | %E | 1.52 | % | 1.68 | % | 1.49 | % | 1.38 | % | 1.78 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %D | 67 | % | 23 | % | 23 | % | 25 | % | 25 | % |
A | On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
B | Per share amounts have been calculated using the average shares method. |
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
40
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2021 | 2020A | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 20.74 | $ | 25.43 | $ | 25.71 | $ | 28.27 | $ | 23.57 | $ | 26.17 | ||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.18 | 0.08 | 0.26 | 0.21 | 0.09 | 0.20 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 8.04 | (2.32 | ) | 1.57 | 0.05 | 5.11 | (0.19 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 8.22 | (2.24 | ) | 1.83 | 0.26 | 5.20 | 0.01 | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.21 | ) | (0.35 | ) | (0.25 | ) | (0.24 | ) | (0.28 | ) | (0.23 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | (3.11 | ) | (2.10 | ) | (1.86 | ) | (2.58 | ) | (0.22 | ) | (2.38 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (3.32 | ) | (2.45 | ) | (2.11 | ) | (2.82 | ) | (0.50 | ) | (2.61 | ) | ||||||||||||||||||||||||||||||||
|
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|
|
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|
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|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 25.64 | $ | 20.74 | $ | 25.43 | $ | 25.71 | $ | 28.27 | $ | 23.57 | ||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 43.07 | %C | (10.26 | )% | 8.94 | % | 0.57 | % | 22.27 | % | 0.51 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
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|
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| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 6,823,794 | $ | 4,687,004 | $ | 6,811,169 | $ | 6,851,003 | $ | 8,351,349 | $ | 8,950,263 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.69 | %D | 1.68 | % | 1.70 | % | 1.64 | % | 1.72 | % | 1.74 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.69 | %D | 1.68 | % | 1.70 | %E | 1.54 | % | 1.72 | % | 1.74 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.39 | %D | 0.84 | % | 0.99 | % | 0.79 | % | 0.66 | % | 1.02 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.39 | %D | 0.84 | % | 0.99 | % | 0.90 | % | 0.66 | % | 1.02 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %C | 67 | % | 23 | % | 23 | % | 25 | % | 25 | % |
A | On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
B | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
C | Not annualized. |
D | Annualized. |
E | This ratio does not include a voluntary reimbursement of service fees as included in the prior year. |
See accompanying notes
41
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||||||||||||||||||||||||||||||||||
Six Months Ended April 30, | Year Ended October 31, | February 28, 2017A to October 31, | ||||||||||||||||||||||||||||||||||
2021 | 2020B | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 23.36 | $ | 28.31 | $ | 28.41 | $ | 30.98 | $ | 28.64 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||
Net investment income | 0.16 | 0.56 | 0.61 | 0.59 | 0.12 | |||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 9.29 | (2.78 | ) | 1.71 | (0.02 | ) | 2.22 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total income (loss) from investment operations | 9.45 | (2.22 | ) | 2.32 | 0.57 | 2.34 | ||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.50 | ) | (0.63 | ) | (0.56 | ) | (0.56 | ) | - | |||||||||||||||||||||||||||
Distributions from net realized gains | (3.11 | ) | (2.10 | ) | (1.86 | ) | (2.58 | ) | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total distributions | (3.61 | ) | (2.73 | ) | (2.42 | ) | (3.14 | ) | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Net asset value, end of period | $ | 29.20 | $ | 23.36 | $ | 28.31 | $ | 28.41 | $ | 30.98 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total returnC | 43.83 | %D | (9.23 | )% | 10.15 | % | 1.54 | % | 8.17 | %D | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Ratios and supplemental data: | ||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 1,022,670,616 | $ | 1,008,088,807 | $ | 739,517,062 | $ | 571,236,567 | $ | 40,982,401 | ||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.60 | %E | 0.62 | % | 0.60 | % | 0.59 | % | 0.60 | %E | ||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.60 | %E | 0.59 | % | 0.58 | % | 0.58 | % | 0.58 | %E | ||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 1.48 | %E | 1.90 | % | 2.07 | % | 1.75 | % | 1.38 | %E | ||||||||||||||||||||||||||
Net investment income, net of reimbursements | 1.48 | %E | 1.93 | % | 2.09 | % | 1.76 | % | 1.40 | %E | ||||||||||||||||||||||||||
Portfolio turnover rate | 13 | %D | 67 | % | 23 | % | 23 | % | 25 | %F |
A | Commencement of operations. |
B | On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
F | Portfolio turnover rate is for the period from February 28, 2017 through October 31, 2017 and is not annualized. |
See accompanying notes
42
Disclosure Regarding Approval of Management and Investment Advisory Agreements (Unaudited)
Approval of Investment Advisory Agreement
At its November 10-11, 2020 meetings, the Board of Trustees (“Board”) considered the approval of a new investment advisory agreement among American Beacon Advisors, Inc. (“Manager”), Barrow, Hanley, Mewhinney & Strauss, LLC (“Barrow”), and American Beacon Funds (“Trust”), on behalf of the American Beacon Large Cap Value Fund (the “Fund”) (“New Agreement”). The Board was advised that Barrow was expected to undergo a change of control later in the fourth quarter of 2020, and that the change in control would result in an assignment and the automatic termination of the existing Investment Advisory Agreement among the Manager, Barrow and the Trust, on behalf of the Fund (“Existing Agreement”).
Prior to the November 10-11, 2020 meetings, information was provided to the Board by Barrow and the Manager regarding the change of control and the New Agreement. In connection with its evaluation of the New Agreement, the Board considered, among other matters, that (1) the New Agreement would contain the same substantive terms and conditions as the Existing Agreement, (2) the services to be provided by Barrow to the Fund and the fee rates to be paid by the Fund to Barrow would remain unchanged, and (3) the individuals who currently provide portfolio management services to the Fund would remain the same after the change of control. In addition, the Board considered certain information provided by Barrow and the Manager in connection with the renewal of the Existing Agreement, in determining whether to approve the New Agreement.
Based on the foregoing considerations, the Board, including a majority of Trustees who are not “interested persons” of the Fund, the Manager or Barrow, as that term is defined in the Investment Company Act of 1940, as amended, concluded that the approval of the New Agreement was in the best interests of the Fund and approved the New Agreement.
43
Disclosure Regarding Liquidity Risk Management Program
Rule 22e-4 under the Investment Company Act of 1940, as amended (“Rule 22e-4”), requires open-end registered investment companies (other than money market funds) to adopt and implement a written liquidity risk management program that is reasonably designed to assess and manage liquidity risk. The Fund has adopted a Liquidity Risk Management Program (the “Program”) that is designed to assess and manage liquidity risk, which is the risk that the Fund could not meet requests to redeem its shares without significant dilution of the remaining shareholders’ interests in the Fund. Pursuant to Rule 22e-4, the Program includes the following elements:
• | Assessment, management, and periodic review of liquidity risk; |
• | Classification of each of the Fund’s portfolio investments into one of four liquidity categories: highly liquid, moderately liquid, less liquid, and illiquid; |
• | Determination and review of a highly liquid investment minimum for any Fund that does not primarily hold assets that are highly liquid investments; |
• | Policies and procedures to respond to a shortfall in the highly liquid investment minimum, including associated reports to the Fund’s Board of Trustees (the “Board”) and the Securities and Exchange Commission (“SEC”); |
• | A prohibition against a Fund acquiring an illiquid investment if immediately after the acquisition the Fund would have more than 15% of its net assets invested in illiquid investments that are assets; |
• | Reporting of breaches of the illiquid investment prohibition to the Board and the SEC; and |
• | Policies and procedures regarding how and when a Fund will satisfy redemption requests by distributing portfolio securities or other assets. |
The Manager’s Liquidity Committee administers the Program and has provided quarterly reports to the Board regarding the Fund’s liquidity risk. In addition, at the Board’s March 3-4, 2021 meetings, the Board reviewed the Liquidity Committee’s written report (“Report”) that addressed the operation of the Program and assessed the adequacy and effectiveness of its implementation from January 1, 2020 through December 31, 2020 (the “review period”).
Key conclusions that the Liquidity Committee included in the Report are listed below:
• | The Program is reasonably designed to assess and manage the Fund’s liquidity risk. |
• | The operation of the Program was adequate during the review period. |
• | There were no material changes to the Program during the review period. |
• | The Fund included in this shareholder report was deemed to primarily hold assets that are highly liquid, and no highly liquid investment minimum was recommended. |
• | The Program was effectively implemented by the Liquidity Committee during the review period. |
• | Administration of the Program by the Liquidity Committee continues to be appropriate. |
44
Delivery of Documents
Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
To obtain more information about the Fund:
![]() | ![]() | |
By E-mail: | On the Internet: | |
american_beacon.funds@ambeacon.com | Visit our website at www.americanbeaconfunds.com | |
By Telephone: Call (800) 658-5811 | By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 | |
Availability of Quarterly Portfolio Schedules | Availability of Proxy Voting Policy and Records | |
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the end of each fiscal quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month. | A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009. |
Fund Service Providers:
CUSTODIAN State Street Bank and Trust 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 and American Beacon Large Cap Value Fund are service marks of American Beacon Advisors, Inc.
SAR 04/21
About American Beacon Advisors
Since 1986, American Beacon Advisors, Inc. has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.
Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.
SMALL CAP VALUE FUND RISKS
Investing in small-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.
Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.
American Beacon Funds | April 30, 2021 |
1 | ||||
2 | ||||
4 | ||||
Schedule of Investments: | ||||
6 | ||||
24 | ||||
27 | ||||
Financial Highlights: | ||||
47 | ||||
Disclosure Regarding Approval of Management and Investment Advisory Agreements | 54 | |||
55 |
Back Cover |
![]() | Dear Shareholders,
Throughout this reporting period, the 24-hour news cycle has continued to be dominated by headlines related to the COVID-19 pandemic, ongoing global vaccination efforts, U.S. stimulus and infrastructure spending, and the reopening of our nation’s businesses and schools. After months of seclusion and uncertainty, we can finally see the proverbial light at the end of a tunnel – and a path forward to potentially brighter days.
However, during challenging times such as we’ve all experienced over the past year, the fear of loss can be a powerful emotion. And it can cause many individuals to make short-term investment decisions that have the potential to sink their long-term financial objectives. We encourage you to remain focused on achieving your long-term investment goals by working with financial |
professionals to develop a personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand crises. By staying the course, you will be better positioned to achieve enduring financial success.
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. 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 financial rewards.
Thank you for continuing your financial journey with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.
Best Regards,
Gene L. Needles, Jr.
President
American Beacon Funds
1
American Beacon Small Cap Value FundSM
April 30, 2021 (Unaudited)
The Investor Class of the American Beacon Small Cap Value Fund (the “Fund”) returned 56.66% for the six months ended April 30, 2021, underperforming the Russell 2000® Value Index (the “Index”) return of 59.17% for the same period.
Total Returns for the Period ended April 30, 2021 |
| |||||||||||||||||||||||||||||||
Ticker | 6 Months* | 1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||||
R5 Class (1,6) | AVFIX | 56.86 | % | 81.05 | % | 10.31 | % | 12.10 | % | 9.97 | % | |||||||||||||||||||||
Y Class (1,6) | ABSYX | 56.81 | % | 80.91 | % | 10.22 | % | 12.01 | % | 9.88 | % | |||||||||||||||||||||
Investor Class (1,6) | AVPAX | 56.66 | % | 80.46 | % | 9.96 | % | 11.74 | % | 9.60 | % | |||||||||||||||||||||
Advisor Class (1,6) | AASSX | 56.56 | % | 80.20 | % | 9.79 | % | 11.56 | % | 9.43 | % | |||||||||||||||||||||
A without Sales Charge (1,2,6) | ABSAX | 56.55 | % | 80.27 | % | 9.84 | % | 11.64 | % | 9.47 | % | |||||||||||||||||||||
A with Sales Charge (1,2,6) | ABSAX | 47.53 | % | 69.89 | % | 7.70 | % | 10.32 | % | 8.82 | % | |||||||||||||||||||||
C without Sales Charge (1,3,6) | ASVCX | 56.04 | % | 78.99 | % | 9.08 | % | 10.87 | % | 8.68 | % | |||||||||||||||||||||
C with Sales Charge (1,3,6) | ASVCX | 55.04 | % | 77.99 | % | 9.08 | % | 10.87 | % | 8.68 | % | |||||||||||||||||||||
R6 Class (1,4,6) | AASRX | 56.92 | % | 81.14 | % | 10.35 | % | 12.12 | % | 9.98 | % | |||||||||||||||||||||
Russell 2000® Value Index (5) | 59.17 | % | 78.96 | % | 11.68 | % | 13.54 | % | 10.10 | % |
* | Not Annualized. |
1. | Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future. |
2. | A portion of the fees charged to the A Class of the Fund was waived in, 2012, 2013 and 2014 and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown for 2012, 2013 and 2014. The maximum sales charge for A Class is 5.75%. |
3. | A portion of the fees charged to the C Class of the Fund was waived in 2012 and 2013, fully recovered in 2015, and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown in 2012, 2013 and 2018. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase. |
4. | Fund performance for the five-year and ten-year periods represents the returns achieved by the R5 Class from 4/30/11 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/30/11. |
5. | The Russell 2000 Value Index is an unmanaged index of those stocks in the Russell 2000 Index with lower price-to-book ratios and lower forecasted growth values. The Russell 2000® Index is an unmanaged index comprised of approximately 2,000 smaller-capitalization stocks. Russell 2000 Value Index and Russell 2000 Index are registered trademarks of Frank Russell Company. American Beacon Funds is not promoted, sponsored or endorsed by, nor in any way affiliated with the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. LSE Group is not responsible for and has not reviewed the American Beacon Small Cap Value Fund nor any associated literature or publications and LSE Group makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. All rights in the Russell 2000 Index and the Russell 2000 Value Index (the “Indexes”) vest in the relevant LSE Group company which owns the Indexes. Russell 2000® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Indexes are calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Indexes or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Indexes for the purpose to which it is being put by the Manager. 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 R5, Y, Investor, Advisor, A, C and R6 Class shares were 0.83%, 0.90%, 1.16%, 1.26%, 1.27%, 1.97%, and 0.80%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. |
The Fund underperformed the Index due to security selection, while sector allocation marginally added value relative to the Index.
2
American Beacon Small Cap Value FundSM
Performance Overview
April 30, 2021 (Unaudited)
From a stock selection standpoint, the Fund’s investments in the Energy and Consumer Discretionary sectors detracted from relative performance. In the Energy sector, detractors included an out-of-index position in Equitrans Midstream Corp. (up 16.7%), Ovintiv, Inc. (up 49.3%), and not owning index-position Matador Resources (up 272.6%). Detractors in the Consumer Discretionary sector included an absence from index-positions GameStop Corp. (up 1,558.0%) and Macy’s, Inc. (up 167.0%). The aforementioned performance was somewhat offset by positive stock selection in the Financials sector; contributors to relative performance included out-of-index positions in SLM Corp. (up 116.1%) and Evercore, Inc., Class A (up 82.5%).
From a sector allocation perspective, overweight allocations to the Consumer Discretionary and Energy sectors and an underweight to the Utilities sector contributed positively to relative performance. Conversely, an overweight to the Financials sector detracted slightly from relative performance.
The sub-advisors continue to focus on uncovering investment opportunities through stock selection that should benefit the Fund’s performance over the long term.
Top Ten Holdings (% Net Assets) |
| |||||||
KBR, Inc. | 1.4 | |||||||
Diodes, Inc. | 1.3 | |||||||
Evercore, Inc., Class A | 1.0 | |||||||
Greenbrier Cos., Inc. | 1.0 | |||||||
MGIC Investment Corp. | 1.0 | |||||||
Enstar Group Ltd. | 0.9 | |||||||
Fluor Corp. | 0.9 | |||||||
Popular, Inc. | 0.9 | |||||||
Portland General Electric Co. | 0.8 | |||||||
Umpqua Holdings Corp. | 0.8 | |||||||
Total Fund Holdings | 726 | |||||||
Sector Allocation (% Equities) |
| |||||||
Financials | 27.2 | |||||||
Industrials | 22.1 | |||||||
Consumer Discretionary | 13.1 | |||||||
Information Technology | 10.5 | |||||||
Energy | 6.1 | |||||||
Materials | 5.4 | |||||||
Real Estate | 4.7 | |||||||
Health Care | 3.7 | |||||||
Consumer Staples | 2.9 | |||||||
Utilities | 2.6 | |||||||
Communication Services | 1.7 |
3
American Beacon Small Cap Value FundSM
April 30, 2021 (Unaudited)
Fund Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees, if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from November 1, 2020 through April 30, 2021.
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 R5 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 R5 Classes that invest in the Funds through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.
You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Fund, such as sales charges (loads) or redemption fees, as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.
4
American Beacon Small Cap Value FundSM
Expense Examples
April 30, 2021 (Unaudited)
American Beacon Small Cap Value Fund | |||||||||||||||
Beginning Account Value 11/1/2020 | Ending Account Value 4/30/2021 | Expenses Paid During Period 11/1/2020-4/30/2021* | |||||||||||||
R5 Class | |||||||||||||||
Actual | $1,000.00 | $1,568.60 | $5.16 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.78 | $4.06 | ||||||||||||
Y Class | |||||||||||||||
Actual | $1,000.00 | $1,568.10 | $5.67 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.38 | $4.46 | ||||||||||||
Investor Class | |||||||||||||||
Actual | $1,000.00 | $1,566.60 | $7.32 | ||||||||||||
Hypothetical** | $1,000.00 | $1,019.09 | $5.76 | ||||||||||||
Advisor Class | |||||||||||||||
Actual | $1,000.00 | $1,565.60 | $8.21 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.40 | $6.46 | ||||||||||||
A Class | |||||||||||||||
Actual | $1,000.00 | $1,565.50 | $7.95 | ||||||||||||
Hypothetical** | $1,000.00 | $1,018.60 | $6.26 | ||||||||||||
C Class | |||||||||||||||
Actual | $1,000.00 | $1,560.40 | $12.44 | ||||||||||||
Hypothetical** | $1,000.00 | $1,015.08 | $9.79 | ||||||||||||
R6 Class | |||||||||||||||
Actual | $1,000.00 | $1,569.20 | $4.97 | ||||||||||||
Hypothetical** | $1,000.00 | $1,020.93 | $3.91 |
* | Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.81%, 0.89%, 1.15%, 1.29%, 1.25%, 1.96%, and 0.78% for the R5, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period. |
** | 5% return before expenses. |
5
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% | |||||||||||||||
Communication Services - 1.69% | |||||||||||||||
Diversified Telecommunication Services - 0.00% | |||||||||||||||
Liberty Latin America Ltd., Class AA | 1,876 | $ | 26,073 | ||||||||||||
Liberty Latin America Ltd., Class CA | 8,076 | 113,235 | |||||||||||||
|
| ||||||||||||||
139,308 | |||||||||||||||
|
| ||||||||||||||
Entertainment - 0.11% | |||||||||||||||
IMAX Corp.A | 349,965 | 7,216,278 | |||||||||||||
|
| ||||||||||||||
Interactive Media & Services - 0.14% | |||||||||||||||
Cargurus, Inc.A | 101,500 | 2,505,020 | |||||||||||||
Genius Sports Ltd.A B | 305,099 | 6,437,589 | |||||||||||||
|
| ||||||||||||||
8,942,609 | |||||||||||||||
|
| ||||||||||||||
Media - 1.44% | |||||||||||||||
AMC Networks, Inc., Class AA | 94,621 | 4,757,544 | |||||||||||||
Emerald Holding, Inc.A | 117,092 | 656,886 | |||||||||||||
Entravision Communications Corp., Class A | 46,776 | 180,088 | |||||||||||||
Gray Television, Inc. | 1,061,596 | 21,571,631 | |||||||||||||
John Wiley & Sons, Inc., Class A | 72,500 | 4,128,150 | |||||||||||||
MDC Partners, Inc., Class AA | 1,479,508 | 6,598,606 | |||||||||||||
MSG Networks, Inc., Class AA | 458,628 | 7,278,426 | |||||||||||||
Nexstar Media Group, Inc., Class A | 25,052 | 3,692,915 | |||||||||||||
Scholastic Corp. | 168,792 | 5,119,865 | |||||||||||||
Sinclair Broadcast Group, Inc., Class A | 155,734 | 5,056,683 | |||||||||||||
TEGNA, Inc. | 1,614,308 | 32,384,124 | |||||||||||||
|
| ||||||||||||||
91,424,918 | |||||||||||||||
|
| ||||||||||||||
Total Communication Services | 107,723,113 | ||||||||||||||
|
| ||||||||||||||
Consumer Discretionary - 12.79% | |||||||||||||||
Auto Components - 2.58% | |||||||||||||||
Adient PLCA | 997,472 | 46,222,853 | |||||||||||||
American Axle & Manufacturing Holdings, Inc.A | 3,368,477 | 31,259,467 | |||||||||||||
Cooper Tire & Rubber Co. | 129,578 | 7,384,650 | |||||||||||||
Dana, Inc. | 710,998 | 17,988,738 | |||||||||||||
Gentherm, Inc.A | 479,601 | 34,147,591 | |||||||||||||
Goodyear Tire & Rubber Co.A | 755,855 | 13,008,441 | |||||||||||||
LCI Industries | 861 | 127,547 | |||||||||||||
Motorcar Parts of America, Inc.A | 19,587 | 423,218 | |||||||||||||
Standard Motor Products, Inc. | 166,964 | 7,151,111 | |||||||||||||
Visteon Corp.A | 57,508 | 7,005,050 | |||||||||||||
|
| ||||||||||||||
164,718,666 | |||||||||||||||
|
| ||||||||||||||
Automobiles - 0.49% | |||||||||||||||
Harley-Davidson, Inc. | 209,000 | 10,109,330 | |||||||||||||
Winnebago Industries, Inc. | 263,815 | 21,092,009 | |||||||||||||
|
| ||||||||||||||
31,201,339 | |||||||||||||||
|
| ||||||||||||||
Distributors - 0.07% | |||||||||||||||
Core-Mark Holding Co., Inc. | 498 | 21,173 | |||||||||||||
Funko, Inc., Class AA | 197,367 | 4,251,285 | |||||||||||||
|
| ||||||||||||||
4,272,458 | |||||||||||||||
|
| ||||||||||||||
Diversified Consumer Services - 0.67% | |||||||||||||||
Graham Holdings Co., Class B | 12,762 | 8,111,655 | |||||||||||||
H&R Block, Inc. | 1,206,532 | 26,857,402 | |||||||||||||
Houghton Mifflin Harcourt Co.A | 844,915 | 7,671,828 | |||||||||||||
Perdoceo Education Corp.A | 6,532 | 77,108 | |||||||||||||
Strategic Education, Inc. | 1,066 | 82,718 | |||||||||||||
|
| ||||||||||||||
42,800,711 | |||||||||||||||
|
|
See accompanying notes
6
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Consumer Discretionary - 12.79% (continued) | |||||||||||||||
Hotels, Restaurants & Leisure - 1.12% | |||||||||||||||
Bally’s Corp. | 141,940 | $ | 8,226,842 | ||||||||||||
Boyd Gaming Corp.A | 192,267 | 12,718,462 | |||||||||||||
Brinker International, Inc. | 5,600 | 375,928 | |||||||||||||
Cheesecake Factory, Inc. | 189,791 | 11,878,865 | |||||||||||||
Cracker Barrel Old Country Store, Inc. | 115 | 19,195 | |||||||||||||
Hilton Grand Vacations, Inc.A | 15,544 | 692,641 | |||||||||||||
International Game Technology PLCB | 1,168,535 | 20,122,140 | |||||||||||||
Jack in the Box, Inc. | 139,995 | 16,890,397 | |||||||||||||
Travel + Leisure Co. | 7,800 | 503,334 | |||||||||||||
|
| ||||||||||||||
71,427,804 | |||||||||||||||
|
| ||||||||||||||
Household Durables - 3.61% | |||||||||||||||
Beazer Homes USA, Inc. | 1,014 | 22,611 | |||||||||||||
Cavco Industries, Inc.A | 37,265 | 7,804,409 | |||||||||||||
Century Communities, Inc.A | 119,312 | 8,821,929 | |||||||||||||
Ethan Allen Interiors, Inc. | 24,499 | 703,366 | |||||||||||||
Green Brick Partners, Inc.A | 167,296 | 4,317,910 | |||||||||||||
Hamilton Beach Brands Holding Co., Class A | 755 | 14,733 | |||||||||||||
Helen of Troy Ltd.A | 81,550 | 17,224,176 | |||||||||||||
Hooker Furniture Corp. | 15,947 | 598,172 | |||||||||||||
KB Home | 598,357 | 28,858,758 | |||||||||||||
La-Z-Boy, Inc. | 452,839 | 20,133,182 | |||||||||||||
LGI Homes, Inc.A | 82,331 | 13,648,833 | |||||||||||||
M/I Homes, Inc.A | 278,422 | 19,411,582 | |||||||||||||
MDC Holdings, Inc. | 221,077 | 12,968,377 | |||||||||||||
Meritage Homes Corp.A | 200,710 | 21,353,537 | |||||||||||||
Taylor Morrison Home Corp.A | 430,634 | 13,440,087 | |||||||||||||
Tempur Sealy International, Inc. | 421,800 | 16,087,452 | |||||||||||||
TRI Pointe Homes, Inc.A | 743,670 | 17,714,219 | |||||||||||||
Whirlpool Corp. | 114,473 | 27,067,141 | |||||||||||||
|
| ||||||||||||||
230,190,474 | |||||||||||||||
|
| ||||||||||||||
Internet & Direct Marketing Retail - 0.06% | |||||||||||||||
PetMed Express, Inc.B | 3,500 | 102,987 | |||||||||||||
Points International Ltd.A | 254,400 | 3,950,832 | |||||||||||||
|
| ||||||||||||||
4,053,819 | |||||||||||||||
|
| ||||||||||||||
Leisure Products - 0.41% | |||||||||||||||
Johnson Outdoors, Inc., Class A | 3,800 | 538,878 | |||||||||||||
Malibu Boats, Inc., Class AA | 184,923 | 15,415,181 | |||||||||||||
Smith & Wesson Brands, Inc. | 2,581 | 44,608 | |||||||||||||
Sturm Ruger & Co., Inc. | 1,076 | 70,201 | |||||||||||||
Vista Outdoor, Inc.A | 303,375 | 9,893,059 | |||||||||||||
|
| ||||||||||||||
25,961,927 | |||||||||||||||
|
| ||||||||||||||
Multiline Retail - 0.51% | |||||||||||||||
Big Lots, Inc. | 218,997 | 15,097,220 | |||||||||||||
Dillard’s, Inc., Class A | 115,971 | 11,470,691 | |||||||||||||
Franchise Group, Inc. | 7,600 | 292,828 | |||||||||||||
Macy’s, Inc. | 1,876 | 31,038 | |||||||||||||
Nordstrom, Inc. | 153,182 | 5,618,716 | |||||||||||||
|
| ||||||||||||||
32,510,493 | |||||||||||||||
|
| ||||||||||||||
Specialty Retail - 2.37% | |||||||||||||||
Academy Sports & Outdoors, Inc. | 1,854 | 56,841 | |||||||||||||
American Eagle Outfitters, Inc.B | 11,600 | 401,012 | |||||||||||||
Asbury Automotive Group, Inc.A | 51,429 | 10,214,314 |
See accompanying notes
7
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Consumer Discretionary - 12.79% (continued) | |||||||||||||||
Specialty Retail - 2.37% (continued) | |||||||||||||||
Bed Bath & Beyond, Inc. | 136,146 | $ | 3,447,217 | ||||||||||||
Buckle, Inc. | 108,205 | 4,538,118 | |||||||||||||
Caleres, Inc. | 212,522 | 4,953,888 | |||||||||||||
Camping World Holdings, Inc., Class AB | 241,574 | 10,519,723 | |||||||||||||
Cato Corp., Class A | 39,200 | 525,280 | |||||||||||||
Foot Locker, Inc. | 7,200 | 424,656 | |||||||||||||
Genesco, Inc.A | 14,500 | 725,000 | |||||||||||||
Group 1 Automotive, Inc. | 142,313 | 23,362,675 | |||||||||||||
Guess?, Inc. | 123,164 | 3,330,354 | |||||||||||||
Hibbett Sports, Inc.A | 7,492 | 595,239 | |||||||||||||
MarineMax, Inc.A | 37,267 | 2,116,765 | |||||||||||||
ODP Corp.A | 784,482 | 31,716,711 | |||||||||||||
OneWater Marine, Inc., Class AA | 13,100 | 671,113 | |||||||||||||
Penske Automotive Group, Inc. | 168,477 | 14,773,748 | |||||||||||||
Rent-A-Center, Inc. | 158,315 | 9,111,028 | |||||||||||||
Sally Beauty Holdings, Inc.A | 476,292 | 9,559,270 | |||||||||||||
Signet Jewelers Ltd. | 521 | 31,207 | |||||||||||||
Sonic Automotive, Inc., Class A | 271,162 | 13,379,019 | |||||||||||||
Sportsman’s Warehouse Holdings, Inc.A | 38,900 | 683,084 | |||||||||||||
Tilly’s, Inc., Class AA | 16,900 | 203,814 | |||||||||||||
Urban Outfitters, Inc.A | 156,241 | 5,609,087 | |||||||||||||
Zumiez, Inc.A | 8,041 | 345,522 | |||||||||||||
|
| ||||||||||||||
151,294,685 | |||||||||||||||
|
| ||||||||||||||
Textiles, Apparel & Luxury Goods - 0.90% | |||||||||||||||
Capri Holdings Ltd.A | 233,559 | 12,864,430 | |||||||||||||
Culp, Inc. | 7,800 | 110,370 | |||||||||||||
G-III Apparel Group Ltd.A | 353,541 | 11,486,547 | |||||||||||||
Movado Group, Inc. | 1,062 | 33,097 | |||||||||||||
Oxford Industries, Inc. | 103,954 | 9,483,723 | |||||||||||||
Rocky Brands, Inc. | 3,500 | 184,275 | |||||||||||||
Skechers USA, Inc., Class AA | 258,269 | 12,523,464 | |||||||||||||
Vera Bradley, Inc.A | 50,500 | 560,550 | |||||||||||||
Wolverine World Wide, Inc. | 234,641 | 9,789,223 | |||||||||||||
|
| ||||||||||||||
57,035,679 | |||||||||||||||
|
| ||||||||||||||
Total Consumer Discretionary | 815,468,055 | ||||||||||||||
|
| ||||||||||||||
Consumer Staples - 2.84% | |||||||||||||||
Beverages - 0.04% | |||||||||||||||
Duckhorn Portfolio, Inc.A | 132,900 | 2,486,559 | |||||||||||||
|
| ||||||||||||||
Food & Staples Retailing - 0.46% | |||||||||||||||
Andersons, Inc. | 127,453 | 3,660,450 | |||||||||||||
Chefs’ Warehouse, Inc.A | 267,437 | 8,619,495 | |||||||||||||
Ingles Markets, Inc., Class A | 63,949 | 3,919,434 | |||||||||||||
Natural Grocers by Vitamin Cottage, Inc. | 17,100 | 268,812 | |||||||||||||
SpartanNash Co. | 209,326 | 4,054,645 | |||||||||||||
Sprouts Farmers Market, Inc.A | 12,400 | 317,564 | |||||||||||||
United Natural Foods, Inc.A | 212,914 | 7,847,749 | |||||||||||||
Village Super Market, Inc., Class A | 20,828 | 508,554 | |||||||||||||
Weis Markets, Inc. | 5,300 | 274,805 | |||||||||||||
|
| ||||||||||||||
29,471,508 | |||||||||||||||
|
| ||||||||||||||
Food Products - 1.56% | |||||||||||||||
B&G Foods, Inc. | 102,469 | 2,990,045 | |||||||||||||
Calavo Growers, Inc. | 84,091 | 6,570,030 |
See accompanying notes
8
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Consumer Staples - 2.84% (continued) | |||||||||||||||
Food Products - 1.56% (continued) | |||||||||||||||
Darling Ingredients, Inc.A | 588,965 | $ | 40,903,619 | ||||||||||||
Fresh Del Monte Produce, Inc. | 81,907 | 2,310,548 | |||||||||||||
Hain Celestial Group, Inc.A B | 194,487 | 7,975,912 | |||||||||||||
J&J Snack Foods Corp. | 27,061 | 4,454,511 | |||||||||||||
Pilgrim’s Pride Corp.A | 392,383 | 9,401,497 | |||||||||||||
Sanderson Farms, Inc. | 758 | 123,358 | |||||||||||||
Seneca Foods Corp., Class AA | 512 | 24,073 | |||||||||||||
SunOpta, Inc.A B | 1,981,889 | 24,555,605 | |||||||||||||
|
| ||||||||||||||
99,309,198 | |||||||||||||||
|
| ||||||||||||||
Household Products - 0.39% | |||||||||||||||
Central Garden & Pet Co.A | 10,100 | 546,814 | |||||||||||||
Energizer Holdings, Inc. | 4,200 | 207,060 | |||||||||||||
Spectrum Brands Holdings, Inc. | 275,866 | 24,314,829 | |||||||||||||
|
| ||||||||||||||
25,068,703 | |||||||||||||||
|
| ||||||||||||||
Personal Products - 0.32% | |||||||||||||||
Edgewell Personal Care Co. | 213,053 | 8,138,928 | |||||||||||||
Inter Parfums, Inc. | 79,281 | 5,835,082 | |||||||||||||
Nu Skin Enterprises, Inc., Class A | 103,777 | 5,485,652 | |||||||||||||
USANA Health Sciences, Inc.A | 6,100 | 548,939 | |||||||||||||
|
| ||||||||||||||
20,008,601 | |||||||||||||||
|
| ||||||||||||||
Tobacco - 0.07% | |||||||||||||||
Universal Corp. | 79,580 | 4,474,580 | |||||||||||||
|
| ||||||||||||||
Total Consumer Staples | 180,819,149 | ||||||||||||||
|
| ||||||||||||||
Energy - 5.93% | |||||||||||||||
Energy Equipment & Services - 1.23% | |||||||||||||||
Bristow Group, Inc. | 3,053 | 81,620 | |||||||||||||
Cactus, Inc., Class A | 308,972 | 9,210,649 | |||||||||||||
ChampionX Corp.A | 22,600 | 474,826 | |||||||||||||
Core Laboratories N.V. | 5,000 | 140,900 | |||||||||||||
Dril-Quip, Inc.A | 9,000 | 275,850 | |||||||||||||
Frank’s International N.V.A | 4,695,783 | 15,261,295 | |||||||||||||
Helix Energy Solutions Group, Inc.A | 2,317,244 | 9,940,977 | |||||||||||||
Helmerich & Payne, Inc. | 340,376 | 8,723,837 | |||||||||||||
Hoegh LNG Partners LP | 12,591 | 210,270 | |||||||||||||
KLX Energy Services Holdings, Inc.A B | 28,125 | 216,844 | |||||||||||||
Liberty Oilfield Services, Inc., Class AB | 49,175 | 576,036 | |||||||||||||
NexTier Oilfield Solutions, Inc.A | 1,626,611 | 5,839,534 | |||||||||||||
NOV, Inc. | 1,051,200 | 15,715,440 | |||||||||||||
Oceaneering International, Inc. | 1,665 | 18,122 | |||||||||||||
Oil States International, Inc.A | 30,200 | 169,422 | |||||||||||||
Patterson-UTI Energy, Inc. | 592,650 | 4,006,314 | |||||||||||||
ProPetro Holding Corp.A | 33,826 | 325,744 | |||||||||||||
RPC, Inc.A | 3,450 | 17,193 | |||||||||||||
Select Energy Services, Inc., Class AA | 61,500 | 297,045 | |||||||||||||
Solaris Oilfield Infrastructure, Inc., Class A | 36,507 | 399,387 | |||||||||||||
Technip Energies N.V., ADRA | 3,240 | 46,040 | |||||||||||||
TechnipFMC PLC | 16,200 | 119,880 | |||||||||||||
Transocean Ltd.A B | 1,952,825 | 6,288,334 | |||||||||||||
|
| ||||||||||||||
78,355,559 | |||||||||||||||
|
| ||||||||||||||
Oil, Gas & Consumable Fuels - 4.70% | |||||||||||||||
Altus Midstream Co.B | 95,506 | 5,730,360 | |||||||||||||
Antero Midstream Corp. | 1,841,026 | 15,906,465 |
See accompanying notes
9
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Energy - 5.93% (continued) | |||||||||||||||
Oil, Gas & Consumable Fuels - 4.70% (continued) | |||||||||||||||
Antero Resources Corp. | 2,275 | $ | 20,973 | ||||||||||||
APA Corp. | 286,300 | 5,726,000 | |||||||||||||
Berry Corp. | 521,489 | 3,186,480 | |||||||||||||
Bonanza Creek Energy, Inc.A | 200,962 | 6,649,832 | |||||||||||||
BP Midstream Partners LP, MLP | 15,900 | 207,654 | |||||||||||||
Callon Petroleum Co.A | 145,700 | 5,447,723 | |||||||||||||
Cimarex Energy Co. | 284,504 | 18,834,165 | |||||||||||||
CNX Resources Corp.A | 2,321,719 | 31,157,469 | |||||||||||||
Comstock Resources, Inc.A | 1,203,111 | 6,605,079 | |||||||||||||
CVR Energy, Inc. | 125,809 | 2,678,474 | |||||||||||||
DHT Holdings, Inc. | 975,353 | 5,754,583 | |||||||||||||
Earthstone Energy, Inc., Class AA | 75,137 | 527,462 | |||||||||||||
EQT Corp.A | 1,434,110 | 27,391,501 | |||||||||||||
Equitrans Midstream Corp. | 2,192,800 | 17,893,248 | |||||||||||||
Frontline Ltd. | 16,688 | 128,721 | |||||||||||||
Green Plains, Inc.A B | 6,000 | 178,800 | |||||||||||||
Hess Midstream LP, Class A | 103,019 | 2,300,414 | |||||||||||||
HollyFrontier Corp. | 185,176 | 6,481,160 | |||||||||||||
Kosmos Energy Ltd. | 2,475,008 | 7,078,523 | |||||||||||||
Marathon Oil Corp. | 379,035 | 4,267,934 | |||||||||||||
Murphy Oil Corp. | 764,377 | 12,940,903 | |||||||||||||
NACCO Industries, Inc., Class A | 437 | 10,132 | |||||||||||||
Noble Midstream Partners LP, MLP | 26,300 | 377,931 | |||||||||||||
Northern Oil and Gas, Inc.A | 55,900 | 809,432 | |||||||||||||
Oasis Petroleum, Inc. | 90,900 | 7,055,658 | |||||||||||||
PBF Energy, Inc., Class AA | 380,415 | 5,394,633 | |||||||||||||
PDC Energy, Inc.A | 539,228 | 19,687,214 | |||||||||||||
Penn Virginia Corp.A | 18,400 | 250,792 | |||||||||||||
Range Resources Corp.A | 3,857,198 | 37,877,253 | |||||||||||||
Rattler Midstream LP | 34,700 | 393,845 | |||||||||||||
REX American Resources Corp.A | 4,701 | 379,512 | |||||||||||||
Scorpio Tankers, Inc. | 6,022 | 109,848 | |||||||||||||
SFL Corp. Ltd. | 7,346 | 57,619 | |||||||||||||
Shell Midstream Partners LP, MLP | 31,000 | 478,330 | |||||||||||||
Southwestern Energy Co.A | 2,135,904 | 9,120,310 | |||||||||||||
Viper Energy Partners LP | 345,597 | 6,224,202 | |||||||||||||
Whiting Petroleum Corp.A | 266,160 | 10,665,031 | |||||||||||||
World Fuel Services Corp. | 452,763 | 14,004,438 | |||||||||||||
|
| ||||||||||||||
299,990,103 | |||||||||||||||
|
| ||||||||||||||
Total Energy | 378,345,662 | ||||||||||||||
|
| ||||||||||||||
Financials - 26.54% | |||||||||||||||
Banks - 14.69% | |||||||||||||||
1st Source Corp. | 8,056 | 383,385 | |||||||||||||
Amalgamated Financial Corp. | 17,134 | 276,714 | |||||||||||||
Ameris Bancorp | 327,599 | 17,719,830 | |||||||||||||
Associated Banc-Corp | 1,404,527 | 30,745,096 | |||||||||||||
Atlantic Union Bankshares Corp. | 72,636 | 2,808,834 | |||||||||||||
Banc of California, Inc. | 85,106 | 1,523,397 | |||||||||||||
BancorpSouth Bank | 146,675 | 4,340,321 | |||||||||||||
Bank of NT Butterfield & Son Ltd. | 976,280 | 38,290,081 | |||||||||||||
Bank OZK | 246,684 | 10,111,577 | |||||||||||||
BankUnited, Inc. | 100,361 | 4,677,826 | |||||||||||||
Banner Corp. | 170,268 | 9,678,033 | |||||||||||||
Bar Harbor Bankshares | 8,494 | 243,438 | |||||||||||||
Berkshire Hills Bancorp, Inc. | 29,200 | 647,948 |
See accompanying notes
10
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Financials - 26.54% (continued) | |||||||||||||||
Banks - 14.69% (continued) | |||||||||||||||
BOK Financial Corp. | 5,400 | $ | 474,876 | ||||||||||||
Brookline Bancorp, Inc. | 38,933 | 626,821 | |||||||||||||
Bryn Mawr Bank Corp. | 7,586 | 348,653 | |||||||||||||
Cadence BanCorp | 139,373 | 3,101,049 | |||||||||||||
Camden National Corp. | 4,974 | 237,359 | |||||||||||||
Cathay General Bancorp | 464,952 | 18,821,438 | |||||||||||||
Central Pacific Financial Corp. | 362,455 | 9,768,162 | |||||||||||||
CIT Group, Inc. | 12,900 | 687,441 | |||||||||||||
Civista Bancshares, Inc. | 10,300 | 238,239 | |||||||||||||
CNB Financial Corp. | 8,500 | 216,410 | |||||||||||||
Columbia Banking System, Inc. | 249,267 | 10,850,593 | |||||||||||||
Community Trust Bancorp, Inc. | 11,173 | 497,869 | |||||||||||||
ConnectOne Bancorp, Inc. | 19,592 | 531,923 | |||||||||||||
CrossFirst Bankshares, Inc.A | 28,800 | 424,512 | |||||||||||||
Customers Bancorp, Inc.A | 22,181 | 765,688 | |||||||||||||
CVB Financial Corp. | 191,862 | 4,069,393 | |||||||||||||
Dime Community Bancshares, Inc. | 20,579 | 681,576 | |||||||||||||
Eagle Bancorp, Inc. | 13,498 | 720,928 | |||||||||||||
Enterprise Financial Services Corp. | 39,347 | 1,933,118 | |||||||||||||
Equity Bancshares, Inc., Class AA | 18,000 | 526,680 | |||||||||||||
FB Financial Corp. | 11,515 | 483,169 | |||||||||||||
Financial Institutions, Inc. | 11,488 | 366,812 | |||||||||||||
First BanCorp | 1,508,098 | 24,184,410 | |||||||||||||
First Busey Corp. | 74,192 | 1,853,316 | |||||||||||||
First Business Financial Services, Inc. | 9,659 | 255,577 | |||||||||||||
First Commonwealth Financial Corp. | 88,630 | 1,284,249 | |||||||||||||
First Financial Bancorp | 110,838 | 2,716,958 | |||||||||||||
First Financial Corp. | 12,544 | 554,947 | |||||||||||||
First Hawaiian, Inc. | 1,434,948 | 39,403,672 | |||||||||||||
First Internet Bancorp | 8,752 | 300,631 | |||||||||||||
First Interstate BancSystem, Inc., Class A | 272,790 | 12,812,946 | |||||||||||||
First Merchants Corp. | 163,110 | 7,537,313 | |||||||||||||
First Midwest Bancorp, Inc. | 960,507 | 20,142,251 | |||||||||||||
First of Long Island Corp. | 18,900 | 402,381 | |||||||||||||
Flushing Financial Corp. | 31,839 | 740,894 | |||||||||||||
FNB Corp. | 1,338,215 | 17,249,591 | |||||||||||||
Fulton Financial Corp. | 1,501,592 | 25,602,144 | |||||||||||||
Great Southern Bancorp, Inc. | 8,638 | 487,270 | |||||||||||||
Great Western Bancorp, Inc. | 23,059 | 762,100 | |||||||||||||
Hancock Whitney Corp. | 463,372 | 21,426,842 | |||||||||||||
Hanmi Financial Corp. | 34,953 | 709,546 | |||||||||||||
Harborone Bancorp, Inc. | 431,512 | 6,174,937 | |||||||||||||
Heartland Financial USA, Inc. | 41,850 | 2,103,896 | |||||||||||||
Heritage Commerce Corp. | 552,409 | 6,667,577 | |||||||||||||
Heritage Financial Corp. | 192,572 | 5,411,273 | |||||||||||||
Hilltop Holdings, Inc. | 722,523 | 25,432,810 | |||||||||||||
Home BancShares, Inc. | 386,904 | 10,767,538 | |||||||||||||
HomeTrust Bancshares, Inc. | 5,793 | 158,728 | |||||||||||||
Hope Bancorp, Inc. | 163,836 | 2,459,657 | |||||||||||||
Horizon Bancorp, Inc. | 20,224 | 370,908 | |||||||||||||
Independent Bank Group, Inc. | 100,834 | 7,613,975 | |||||||||||||
International Bancshares Corp. | 129,448 | 6,134,541 | |||||||||||||
Investors Bancorp, Inc. | 1,859,694 | 27,225,920 | |||||||||||||
Lakeland Bancorp, Inc. | 87,307 | 1,582,876 | |||||||||||||
Live Oak Bancshares, Inc. | 8,277 | 529,397 | |||||||||||||
Mercantile Bank Corp. | 12,000 | 387,360 | |||||||||||||
Metropolitan Bank Holding Corp.A | 6,800 | 427,380 |
See accompanying notes
11
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Financials - 26.54% (continued) | |||||||||||||||
Banks - 14.69% (continued) | |||||||||||||||
Midland States Bancorp, Inc. | 24,008 | $ | 676,615 | ||||||||||||
MidWestOne Financial Group, Inc. | 12,716 | 401,317 | |||||||||||||
National Bank Holdings Corp., Class A | 295,877 | 11,805,492 | |||||||||||||
NBT Bancorp, Inc. | 40,200 | 1,523,178 | |||||||||||||
Northrim BanCorp, Inc. | 5,586 | 238,243 | |||||||||||||
OceanFirst Financial Corp. | 65,625 | 1,500,188 | |||||||||||||
OFG Bancorp | 1,445,284 | 34,238,778 | |||||||||||||
Old National Bancorp | 1,447,352 | 27,355,860 | |||||||||||||
Orrstown Financial Services, Inc. | 9,916 | 235,108 | |||||||||||||
Pacific Premier Bancorp, Inc. | 62,605 | 2,756,498 | |||||||||||||
PacWest Bancorp | 126,367 | 5,485,591 | |||||||||||||
Peapack Gladstone Financial Corp. | 18,122 | 579,904 | |||||||||||||
Peoples Bancorp, Inc. | 3,900 | 130,377 | |||||||||||||
Pinnacle Financial Partners, Inc. | 84,143 | 7,374,293 | |||||||||||||
Popular, Inc. | 798,468 | 59,054,693 | |||||||||||||
Preferred Bank | 7,800 | 511,212 | |||||||||||||
Primis Financial Corp. | 27,045 | 388,096 | |||||||||||||
Prosperity Bancshares, Inc. | 379,096 | 27,810,483 | |||||||||||||
RBB Bancorp | 16,427 | 346,281 | |||||||||||||
Renasant Corp. | 90,100 | 3,795,913 | |||||||||||||
Republic Bancorp, Inc., Class A | 29,043 | 1,304,902 | |||||||||||||
S&T Bancorp, Inc. | 20,800 | 685,360 | |||||||||||||
Sandy Spring Bancorp, Inc. | 48,937 | 2,219,782 | |||||||||||||
Seacoast Banking Corp. of FloridaA | 791,817 | 28,782,548 | |||||||||||||
Sierra Bancorp | 7,600 | 205,732 | |||||||||||||
Silvergate Capital Corp., Class AA | 44,946 | 4,819,110 | |||||||||||||
Simmons First National Corp., Class A | 158,096 | 4,505,736 | |||||||||||||
South State Corp. | 40,612 | 3,424,404 | |||||||||||||
Sterling Bancorp | 178,432 | 4,483,996 | |||||||||||||
Synovus Financial Corp. | 15,300 | 716,958 | |||||||||||||
Texas Capital Bancshares, Inc.A | 597,644 | 41,016,308 | |||||||||||||
Towne Bank | 15,700 | 486,386 | |||||||||||||
TriCo Bancshares | 17,840 | 825,635 | |||||||||||||
TriState Capital Holdings, Inc.A | 121,092 | 2,890,466 | |||||||||||||
Trustmark Corp. | 130,051 | 4,214,953 | |||||||||||||
UMB Financial Corp. | 432,521 | 41,967,513 | |||||||||||||
Umpqua Holdings Corp. | 2,676,329 | 49,886,773 | |||||||||||||
United Bankshares, Inc. | 144,367 | 5,669,335 | |||||||||||||
United Community Banks, Inc. | 390,309 | 12,770,911 | |||||||||||||
Univest Financial Corp. | 12,052 | 336,612 | |||||||||||||
Valley National Bancorp | 627,866 | 8,645,715 | |||||||||||||
Veritex Holdings, Inc. | 485,958 | 16,415,661 | |||||||||||||
Washington Trust Bancorp, Inc. | 6,300 | 321,615 | |||||||||||||
Webster Financial Corp. | 522,217 | 27,630,501 | |||||||||||||
WesBanco, Inc. | 284,255 | 10,315,759 | |||||||||||||
Wintrust Financial Corp. | 205,419 | 15,837,805 | |||||||||||||
|
| ||||||||||||||
936,283,596 | |||||||||||||||
|
| ||||||||||||||
Capital Markets - 3.55% | |||||||||||||||
Affiliated Managers Group, Inc. | 123,687 | 19,934,634 | |||||||||||||
AllianceBernstein Holding LP, MLP | 199,589 | 8,604,282 | |||||||||||||
Artisan Partners Asset Management, Inc., Class A | 398 | 20,318 | |||||||||||||
Associated Capital Group, Inc., Class A | 563 | 20,055 | |||||||||||||
B. Riley Financial, Inc. | 25,100 | 1,789,379 | |||||||||||||
BrightSphere Investment Group, Inc. | 211,853 | 4,768,811 | |||||||||||||
Cohen & Steers, Inc. | 82,891 | 5,638,246 | |||||||||||||
Cowen, Inc., Class A | 16,900 | 667,381 |
See accompanying notes
12
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Financials - 26.54% (continued) | |||||||||||||||
Capital Markets - 3.55% (continued) | |||||||||||||||
Diamond Hill Investment Group, Inc. | 1,800 | $ | 307,800 | ||||||||||||
Evercore, Inc., Class A | 467,701 | 65,538,941 | |||||||||||||
Federated Hermes, Inc. | 664,026 | 19,122,948 | |||||||||||||
Greenhill & Co., Inc. | 30,452 | 462,261 | |||||||||||||
Lazard Ltd., Class A | 613,263 | 27,590,702 | |||||||||||||
LPL Financial Holdings, Inc. | 82,806 | 12,975,700 | |||||||||||||
Piper Sandler Cos. | 28,191 | 3,269,874 | |||||||||||||
Stifel Financial Corp. | 580,616 | 40,172,821 | |||||||||||||
StoneX Group, Inc.A | 45,368 | 2,881,775 | |||||||||||||
Victory Capital Holdings, Inc., Class A | 61,046 | 1,694,027 | |||||||||||||
Virtus Investment Partners, Inc. | 17,949 | 4,908,334 | |||||||||||||
WisdomTree Investments, Inc. | 888,222 | 6,027,163 | |||||||||||||
|
| ||||||||||||||
226,395,452 | |||||||||||||||
|
| ||||||||||||||
Consumer Finance - 0.79% | |||||||||||||||
Enova International, Inc.A | 47,204 | 1,616,265 | |||||||||||||
Navient Corp. | 466,503 | 7,851,125 | |||||||||||||
Nelnet, Inc., Class A | 53,671 | 3,983,998 | |||||||||||||
PROG Holdings, Inc. | 218,882 | 11,148,914 | |||||||||||||
SLM Corp. | 1,302,490 | 25,606,953 | |||||||||||||
|
| ||||||||||||||
50,207,255 | |||||||||||||||
|
| ||||||||||||||
Diversified Financial Services - 0.07% | |||||||||||||||
Banco Latinoamericano de Comercio Exterior S.A. | 943 | 14,142 | |||||||||||||
Holicity, Inc., Class AA B | 200,906 | 2,123,576 | |||||||||||||
Silver Spike Acquisition Corp., Class AA B | 120,725 | 2,112,688 | |||||||||||||
|
| ||||||||||||||
4,250,406 | |||||||||||||||
|
| ||||||||||||||
Insurance - 4.17% | |||||||||||||||
Ambac Financial Group, Inc.A | 32,769 | 561,988 | |||||||||||||
American Equity Investment Life Holding Co. | 565,677 | 17,524,673 | |||||||||||||
Argo Group International Holdings Ltd. | 319,444 | 16,668,719 | |||||||||||||
Assured Guaranty Ltd. | 180,705 | 9,188,849 | |||||||||||||
Axis Capital Holdings Ltd. | 213,229 | 11,898,178 | |||||||||||||
Brighthouse Financial, Inc.A | 218,989 | 10,246,495 | |||||||||||||
CNO Financial Group, Inc. | 1,951,966 | 49,834,026 | |||||||||||||
Employers Holdings, Inc. | 12,399 | 501,912 | |||||||||||||
Enstar Group Ltd.A | 225,338 | 56,600,399 | |||||||||||||
Genworth Financial, Inc., Class AA | 1,219,460 | 5,269,121 | |||||||||||||
Global Indemnity Group LLC, Class A | 367,928 | 10,581,609 | |||||||||||||
Hanover Insurance Group, Inc. | 5,700 | 788,367 | |||||||||||||
Horace Mann Educators Corp. | 272,902 | 10,943,370 | |||||||||||||
James River Group Holdings Ltd. | 7,300 | 343,903 | |||||||||||||
Kemper Corp. | 76,480 | 5,970,029 | |||||||||||||
Mercury General Corp. | 365,400 | 22,753,458 | |||||||||||||
National Western Life Group, Inc., Class A | 7,933 | 1,819,049 | |||||||||||||
ProAssurance Corp. | 147,057 | 3,676,425 | |||||||||||||
Selective Insurance Group, Inc. | 113,815 | 8,665,874 | |||||||||||||
SiriusPoint Ltd.A | 63,501 | 672,336 | |||||||||||||
State Auto Financial Corp. | 23,106 | 436,002 | |||||||||||||
Stewart Information Services Corp. | 76,858 | 4,507,722 | |||||||||||||
United Fire Group, Inc. | 551 | 16,829 | |||||||||||||
Unum Group | 574,798 | 16,243,791 | |||||||||||||
|
| ||||||||||||||
265,713,124 | |||||||||||||||
|
| ||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.19% | |||||||||||||||
Apollo Commercial Real Estate Finance, Inc. | 14,600 | 222,066 | |||||||||||||
Arlington Asset Investment Corp., Class AA B | 49,100 | 201,310 |
See accompanying notes
13
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Financials - 26.54% (continued) | |||||||||||||||
Mortgage Real Estate Investment Trusts (REITs) - 0.19% (continued) | |||||||||||||||
Chimera Investment Corp. | 9,828 | $ | 128,753 | ||||||||||||
Colony Credit Real Estate, Inc. | 58,956 | 512,328 | |||||||||||||
Granite Point Mortgage Trust, Inc. | 17,000 | 225,080 | |||||||||||||
Great Ajax Corp. | 27,664 | 337,777 | |||||||||||||
MFA Financial, Inc. | 45,600 | 200,640 | |||||||||||||
New Residential Investment Corp. | 973,309 | 10,433,872 | |||||||||||||
TPG RE Finance Trust, Inc. | 15,400 | 191,884 | |||||||||||||
|
| ||||||||||||||
12,453,710 | |||||||||||||||
|
| ||||||||||||||
Thrifts & Mortgage Finance - 3.08% | |||||||||||||||
America First Multifamily Investors LP, MLP | 26,900 | 157,903 | |||||||||||||
Axos Financial, Inc.A | 337,254 | 15,227,018 | |||||||||||||
Bridgewater Bancshares, Inc.A | 9,000 | 152,190 | |||||||||||||
Essent Group Ltd. | 435,833 | 22,916,099 | |||||||||||||
Federal Agricultural Mortgage Corp., Class C | 5,500 | 565,730 | |||||||||||||
Flagstar Bancorp, Inc. | 133,354 | 6,206,295 | |||||||||||||
FS Bancorp, Inc. | 3,233 | 220,976 | |||||||||||||
HomeStreet, Inc. | 37,375 | 1,526,395 | |||||||||||||
Luther Burbank Corp. | 267,613 | 2,981,209 | |||||||||||||
Meridian Bancorp, Inc. | 12,157 | 268,791 | |||||||||||||
MGIC Investment Corp. | 4,333,034 | 66,035,438 | |||||||||||||
Mr Cooper Group, Inc.A | 211,736 | 7,300,657 | |||||||||||||
NMI Holdings, Inc., Class AA | 583,201 | 15,069,914 | |||||||||||||
Northfield Bancorp, Inc. | 25,926 | 419,483 | |||||||||||||
Northwest Bancshares, Inc. | 300,500 | 4,219,020 | |||||||||||||
PennyMac Financial Services, Inc. | 169,523 | 10,206,980 | |||||||||||||
Premier Financial Corp. | 9,800 | 309,582 | |||||||||||||
Provident Financial Services, Inc. | 210,649 | 4,964,997 | |||||||||||||
Radian Group, Inc. | 649,216 | 15,996,712 | |||||||||||||
Southern Missouri Bancorp, Inc. | 5,978 | 250,419 | |||||||||||||
Territorial Bancorp, Inc. | 7,526 | 189,279 | |||||||||||||
TrustCo Bank Corp. | 70,887 | 518,538 | |||||||||||||
Walker & Dunlop, Inc. | 73,238 | 8,118,432 | |||||||||||||
Washington Federal, Inc. | 263,797 | 8,586,592 | |||||||||||||
WSFS Financial Corp. | 79,145 | 4,043,518 | |||||||||||||
|
| ||||||||||||||
196,452,167 | |||||||||||||||
|
| ||||||||||||||
Total Financials | 1,691,755,710 | ||||||||||||||
|
| ||||||||||||||
Health Care - 3.62% | |||||||||||||||
Biotechnology - 0.23% | |||||||||||||||
Alkermes PLCA | 255,219 | 5,616,094 | |||||||||||||
Emergent BioSolutions, Inc.A | 140,916 | 8,593,058 | |||||||||||||
Vanda Pharmaceuticals, Inc.A | 18,100 | 300,460 | |||||||||||||
|
| ||||||||||||||
14,509,612 | |||||||||||||||
|
| ||||||||||||||
Health Care Equipment & Supplies - 0.47% | |||||||||||||||
Integer Holdings Corp.A | 139,600 | 13,105,648 | |||||||||||||
Invacare Corp. | 588,214 | 5,311,573 | |||||||||||||
NuVasive, Inc.A | 160,263 | 11,450,791 | |||||||||||||
Varex Imaging Corp.A | 4,727 | 113,050 | |||||||||||||
|
| ||||||||||||||
29,981,062 | |||||||||||||||
|
| ||||||||||||||
Health Care Providers & Services - 2.27% | |||||||||||||||
Acadia Healthcare Co., Inc.A | 176,337 | 10,742,450 | |||||||||||||
AdaptHealth Corp.A B | 152,735 | 4,438,479 | |||||||||||||
AMN Healthcare Services, Inc.A | 306,531 | 24,307,908 |
See accompanying notes
14
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Health Care - 3.62% (continued) | |||||||||||||||
Health Care Providers & Services - 2.27% (continued) | |||||||||||||||
Apria, Inc.A | 242,368 | $ | 7,258,922 | ||||||||||||
Encompass Health Corp. | 269,495 | 22,869,346 | |||||||||||||
Hanger, Inc.A | 636,805 | 15,875,549 | |||||||||||||
MEDNAX, Inc.A | 14,483 | 381,421 | |||||||||||||
ModivCare, Inc.A | 18,257 | 2,557,440 | |||||||||||||
Patterson Cos., Inc. | 3,857 | 124,644 | |||||||||||||
R1 RCM, Inc.A | 448,873 | 12,245,255 | |||||||||||||
Select Medical Holdings Corp.A | 868,650 | 32,765,478 | |||||||||||||
Triple-S Management Corp., Class BA | 487,700 | 11,563,367 | |||||||||||||
|
| ||||||||||||||
145,130,259 | |||||||||||||||
|
| ||||||||||||||
Health Care Technology - 0.35% | |||||||||||||||
Evolent Health, Inc., Class AA | 547,335 | 11,855,276 | |||||||||||||
NextGen Healthcare, Inc.A | 243,370 | 4,456,105 | |||||||||||||
Omnicell, Inc.A | 39,810 | 5,773,246 | |||||||||||||
|
| ||||||||||||||
22,084,627 | |||||||||||||||
|
| ||||||||||||||
Pharmaceuticals - 0.30% | |||||||||||||||
Amneal Pharmaceuticals, Inc.A | 163,155 | 899,500 | |||||||||||||
Collegium Pharmaceutical, Inc.A B | 166,885 | 3,721,536 | |||||||||||||
Pacira BioSciences, Inc.A | 62,560 | 3,952,541 | |||||||||||||
Supernus Pharmaceuticals, Inc.A | 333,518 | 10,155,623 | |||||||||||||
Taro Pharmaceutical Industries Ltd.A | 8,798 | 651,228 | |||||||||||||
|
| ||||||||||||||
19,380,428 | |||||||||||||||
|
| ||||||||||||||
Total Health Care | 231,085,988 | ||||||||||||||
|
| ||||||||||||||
Industrials - 21.61% | |||||||||||||||
Aerospace & Defense - 0.74% | |||||||||||||||
AAR Corp. | 14,700 | 591,528 | |||||||||||||
AeroVironment, Inc.A | 99,133 | 10,941,309 | |||||||||||||
Curtiss-Wright Corp. | 72,800 | 9,311,120 | |||||||||||||
Hexcel Corp.A | 80,856 | 4,561,087 | |||||||||||||
Kaman Corp. | 21,730 | 1,159,296 | |||||||||||||
Moog, Inc., Class A | 6,500 | 562,575 | |||||||||||||
National Presto Industries, Inc. | 4,588 | 472,013 | |||||||||||||
Parsons Corp.A | 283,300 | 12,558,689 | |||||||||||||
Spirit AeroSystems Holdings, Inc., Class A | 139,105 | 6,355,708 | |||||||||||||
Vectrus, Inc.A | 11,263 | 589,618 | |||||||||||||
|
| ||||||||||||||
47,102,943 | |||||||||||||||
|
| ||||||||||||||
Air Freight & Logistics - 0.42% | |||||||||||||||
Air Transport Services Group, Inc.A | 768,618 | 20,230,026 | |||||||||||||
Atlas Air Worldwide Holdings, Inc.A | 92,915 | 6,309,711 | |||||||||||||
Forward Air Corp. | 4,200 | 370,818 | |||||||||||||
|
| ||||||||||||||
26,910,555 | |||||||||||||||
|
| ||||||||||||||
Airlines - 0.52% | |||||||||||||||
JetBlue Airways Corp.A | 415,875 | 8,467,215 | |||||||||||||
SkyWest, Inc. | 351,662 | 17,463,797 | |||||||||||||
Spirit Airlines, Inc.A | 210,147 | 7,527,466 | |||||||||||||
|
| ||||||||||||||
33,458,478 | |||||||||||||||
|
| ||||||||||||||
Building Products - 2.18% | |||||||||||||||
Apogee Enterprises, Inc. | 770,220 | 27,057,829 | |||||||||||||
Armstrong Flooring, Inc.A | 486,170 | 2,523,222 | |||||||||||||
Armstrong World Industries, Inc. | 82,312 | 8,531,639 |
See accompanying notes
15
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Industrials - 21.61% (continued) | |||||||||||||||
Building Products - 2.18% (continued) | |||||||||||||||
Builders FirstSource, Inc.A | 324,718 | $ | 15,804,025 | ||||||||||||
Caesarstone Ltd. | 4,054 | 57,409 | |||||||||||||
Gibraltar Industries, Inc.A | 399,783 | 36,724,066 | |||||||||||||
Griffon Corp. | 186,144 | 5,050,108 | |||||||||||||
Insteel Industries, Inc. | 1,370 | 52,268 | |||||||||||||
JELD-WEN Holding, Inc.A | 2,931 | 85,645 | |||||||||||||
Masonite International Corp.A | 5,612 | 708,739 | |||||||||||||
Resideo Technologies, Inc.A | 293,364 | 8,803,854 | |||||||||||||
UFP Industries, Inc. | 398,126 | 33,458,509 | |||||||||||||
|
| ||||||||||||||
138,857,313 | |||||||||||||||
|
| ||||||||||||||
Commercial Services & Supplies - 0.67% | |||||||||||||||
ABM Industries, Inc. | 9,858 | 507,404 | |||||||||||||
ACCO Brands Corp. | 81,522 | 699,520 | |||||||||||||
Brink’s Co. | 252 | 20,088 | |||||||||||||
CoreCivic, Inc. | 6,970 | 53,790 | |||||||||||||
Deluxe Corp. | 133,195 | 5,863,092 | |||||||||||||
Ennis, Inc. | 23,095 | 478,759 | |||||||||||||
Harsco Corp.A | 1,232,938 | 22,106,578 | |||||||||||||
Herman Miller, Inc. | 192,282 | 7,980,367 | |||||||||||||
HNI Corp. | 1,840 | 78,350 | |||||||||||||
Interface, Inc. | 47,580 | 610,927 | |||||||||||||
KAR Auction Services, Inc. | 1,283 | 19,204 | |||||||||||||
Kimball International, Inc., Class B | 26,900 | 392,202 | |||||||||||||
Knoll, Inc. | 37,784 | 903,038 | |||||||||||||
Matthews International Corp., Class A | 2,599 | 107,096 | |||||||||||||
Quad/Graphics, Inc.A | 514,469 | 1,852,088 | |||||||||||||
Steelcase, Inc., Class A | 43,511 | 600,452 | |||||||||||||
US Ecology, Inc.A | 5,464 | 231,593 | |||||||||||||
|
| ||||||||||||||
42,504,548 | |||||||||||||||
|
| ||||||||||||||
Construction & Engineering - 3.97% | |||||||||||||||
Comfort Systems USA, Inc. | 7,600 | 625,936 | |||||||||||||
Construction Partners, Inc., Class AA | 92,666 | 2,940,292 | |||||||||||||
Dycom Industries, Inc.A | 126,416 | 11,859,085 | |||||||||||||
EMCOR Group, Inc. | 378,232 | 45,312,193 | |||||||||||||
Fluor Corp.A | 2,542,139 | 58,418,455 | |||||||||||||
Granite Construction, Inc. | 247,404 | 9,426,237 | |||||||||||||
Great Lakes Dredge & Dock Corp.A | 293,048 | 4,600,854 | |||||||||||||
MasTec, Inc.A | 115,053 | 12,006,931 | |||||||||||||
Matrix Service Co.A | 456,820 | 6,034,592 | |||||||||||||
MYR Group, Inc.A | 5,250 | 408,975 | |||||||||||||
Primoris Services Corp. | 1,425,642 | 46,561,468 | |||||||||||||
Sterling Construction Co., Inc.A | 14,400 | 300,240 | |||||||||||||
Tutor Perini Corp.A | 192,932 | 3,106,119 | |||||||||||||
Valmont Industries, Inc. | 26,424 | 6,522,764 | |||||||||||||
WillScot Mobile Mini Holdings Corp.A | 1,542,070 | 45,136,389 | |||||||||||||
|
| ||||||||||||||
253,260,530 | |||||||||||||||
|
| ||||||||||||||
Electrical Equipment - 1.28% | |||||||||||||||
Acuity Brands, Inc. | 2,200 | 408,144 | |||||||||||||
Atkore, Inc.A | 3,500 | 273,980 | |||||||||||||
AZZ, Inc. | 12,233 | 644,031 | |||||||||||||
Encore Wire Corp. | 291,604 | 21,776,987 | |||||||||||||
EnerSys | 187,918 | 17,209,909 | |||||||||||||
GrafTech International Ltd. | 1,602,611 | 20,385,212 | |||||||||||||
nVent Electric PLC | 341,942 | 10,412,134 |
See accompanying notes
16
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Industrials - 21.61% (continued) | |||||||||||||||
Electrical Equipment - 1.28% (continued) | |||||||||||||||
Powell Industries, Inc. | 9,300 | $ | 327,732 | ||||||||||||
Preformed Line Products Co. | 4,997 | 330,801 | |||||||||||||
Regal Beloit Corp. | 63,999 | 9,243,375 | |||||||||||||
Thermon Group Holdings, Inc.A | 36,097 | 689,453 | |||||||||||||
|
| ||||||||||||||
81,701,758 | |||||||||||||||
|
| ||||||||||||||
Industrial Conglomerates - 0.04% | |||||||||||||||
Raven Industries, Inc. | 67,153 | 2,727,755 | |||||||||||||
|
| ||||||||||||||
Machinery - 7.07% | |||||||||||||||
Allison Transmission Holdings, Inc. | 1,119,472 | 46,424,504 | |||||||||||||
Astec Industries, Inc. | 128,291 | 9,623,598 | |||||||||||||
Barnes Group, Inc. | 304 | 15,201 | |||||||||||||
Blue Bird Corp.A | 20,617 | 555,422 | |||||||||||||
Colfax Corp.A | 713,186 | 32,228,875 | |||||||||||||
Crane Co. | 237,101 | 22,301,720 | |||||||||||||
Energy Recovery, Inc.A | 335,380 | 7,110,056 | |||||||||||||
Enerpac Tool Group Corp. | 889,688 | 23,665,701 | |||||||||||||
EnPro Industries, Inc. | 393,765 | 33,726,262 | |||||||||||||
Federal Signal Corp. | 949,599 | 39,341,887 | |||||||||||||
Flowserve Corp. | 8,900 | 352,796 | |||||||||||||
Gorman-Rupp Co. | 56,380 | 1,946,238 | |||||||||||||
Graham Corp. | 12,392 | 169,894 | |||||||||||||
Greenbrier Cos., Inc. | 1,322,520 | 62,475,845 | |||||||||||||
Hillenbrand, Inc. | 447,956 | 21,990,160 | |||||||||||||
Hyster-Yale Materials Handling, Inc. | 69,054 | 5,583,016 | |||||||||||||
Kennametal, Inc. | 918,016 | 36,867,523 | |||||||||||||
Lindsay Corp. | 51,682 | 8,567,842 | |||||||||||||
Manitowoc Co., Inc. | 1,263 | 28,626 | |||||||||||||
Meritor, Inc.A | 560,214 | 15,143,401 | |||||||||||||
Miller Industries, Inc. | 230,183 | 9,902,473 | |||||||||||||
Mueller Industries, Inc. | 10,734 | 482,677 | |||||||||||||
Mueller Water Products, Inc., Class A | 22,820 | 327,695 | |||||||||||||
Oshkosh Corp. | 93,804 | 11,672,032 | |||||||||||||
REV Group, Inc. | 4,866 | 89,164 | |||||||||||||
Rexnord Corp. | 233,531 | 11,660,203 | |||||||||||||
Shyft Group, Inc. | 279,900 | 9,914,058 | |||||||||||||
Timken Co. | 271,820 | 22,797,543 | |||||||||||||
TriMas Corp.A | 5,800 | 184,672 | |||||||||||||
Trinity Industries, Inc. | 254,085 | 7,022,909 | |||||||||||||
Wabash National Corp. | 494,340 | 8,705,293 | |||||||||||||
|
| ||||||||||||||
450,877,286 | |||||||||||||||
|
| ||||||||||||||
Marine - 0.27% | |||||||||||||||
Costamare, Inc. | 8,070 | 85,850 | |||||||||||||
Kirby Corp.A | 261,912 | 16,683,795 | |||||||||||||
Matson, Inc. | 7,580 | 495,201 | |||||||||||||
|
| ||||||||||||||
17,264,846 | |||||||||||||||
|
| ||||||||||||||
Professional Services - 2.32% | |||||||||||||||
BGSF, Inc. | 14,200 | 198,942 | |||||||||||||
CBIZ, Inc.A | 12,400 | 416,516 | |||||||||||||
FTI Consulting, Inc.A | 3,000 | 416,550 | |||||||||||||
GP Strategies Corp.A | 19,858 | 312,737 | |||||||||||||
Heidrick & Struggles International, Inc. | 16,800 | 710,640 | |||||||||||||
Hudson Global, Inc.A | 61,058 | 1,083,779 | |||||||||||||
Huron Consulting Group, Inc.A | 120,472 | 6,777,755 |
See accompanying notes
17
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Industrials - 21.61% (continued) | |||||||||||||||
Professional Services - 2.32% (continued) | |||||||||||||||
KBR, Inc. | 2,229,710 | $ | 88,207,328 | ||||||||||||
Kelly Services, Inc., Class AA | 24,285 | 608,339 | |||||||||||||
Kforce, Inc. | 4,300 | 240,972 | |||||||||||||
Korn Ferry | 602,441 | 40,899,719 | |||||||||||||
Resources Connection, Inc. | 41,587 | 586,793 | |||||||||||||
Science Applications International Corp. | 70,174 | 6,274,959 | |||||||||||||
TrueBlue, Inc.A | 35,392 | 1,003,022 | |||||||||||||
|
| ||||||||||||||
147,738,051 | |||||||||||||||
|
| ||||||||||||||
Road & Rail - 0.39% | |||||||||||||||
ArcBest Corp. | 92,131 | 6,703,722 | |||||||||||||
Schneider National, Inc., Class B | 8,500 | 205,955 | |||||||||||||
Universal Logistics Holdings, Inc. | 17,291 | 432,436 | |||||||||||||
Werner Enterprises, Inc. | 372,254 | 17,209,302 | |||||||||||||
|
| ||||||||||||||
24,551,415 | |||||||||||||||
|
| ||||||||||||||
Trading Companies & Distributors - 1.74% | |||||||||||||||
Air Lease Corp. | 286,279 | 13,372,092 | |||||||||||||
Beacon Roofing Supply, Inc.A | 231,645 | 13,048,848 | |||||||||||||
Boise Cascade Co. | 194,878 | 13,002,260 | |||||||||||||
DXP Enterprises, Inc.A | 19,700 | 576,619 | |||||||||||||
GATX Corp.B | 34,434 | 3,364,293 | |||||||||||||
H&E Equipment Services, Inc. | 6,000 | 233,400 | |||||||||||||
Herc Holdings, Inc. | 386 | 40,876 | |||||||||||||
McGrath RentCorp | 120,900 | 9,911,382 | |||||||||||||
MSC Industrial Direct Co., Inc., Class A | 88,866 | 8,012,159 | |||||||||||||
NOW, Inc.A | 1,069,826 | 10,505,691 | |||||||||||||
Rush Enterprises, Inc., Class A | 223,160 | 11,015,178 | |||||||||||||
Titan Machinery, Inc.A | 63,507 | 1,658,168 | |||||||||||||
Triton International Ltd. | 265,066 | 13,298,361 | |||||||||||||
Univar Solutions, Inc.A | 511,142 | 11,935,166 | |||||||||||||
WESCO International, Inc.A | 8,378 | 768,658 | |||||||||||||
|
| ||||||||||||||
110,743,151 | |||||||||||||||
|
| ||||||||||||||
Total Industrials | 1,377,698,629 | ||||||||||||||
|
| ||||||||||||||
Information Technology - 10.20% | |||||||||||||||
Communications Equipment - 1.36% | |||||||||||||||
ADTRAN, Inc. | 523,418 | 8,945,214 | |||||||||||||
Calix, Inc.A | 218,092 | 9,223,111 | |||||||||||||
Casa Systems, Inc.A | 103,617 | 812,875 | |||||||||||||
Ciena Corp.A | 402,624 | 20,320,433 | |||||||||||||
CommScope Holding Co., Inc.A | 337,869 | 5,557,945 | |||||||||||||
Comtech Telecommunications Corp. | 27,000 | 647,460 | |||||||||||||
Extreme Networks, Inc.A | 429,966 | 4,893,013 | |||||||||||||
Infinera Corp.A B | 3,156,475 | 29,102,700 | |||||||||||||
NETGEAR, Inc.A | 193,821 | 7,212,256 | |||||||||||||
NetScout Systems, Inc. | 685 | 18,193 | |||||||||||||
|
| ||||||||||||||
86,733,200 | |||||||||||||||
|
| ||||||||||||||
Electronic Equipment, Instruments & Components - 3.35% | |||||||||||||||
Arrow Electronics, Inc.A | 46,200 | 5,270,034 | |||||||||||||
Avnet, Inc. | 588,155 | 25,831,768 | |||||||||||||
Belden, Inc. | 243,421 | 10,535,982 | |||||||||||||
Benchmark Electronics, Inc. | 69,555 | 2,088,184 | |||||||||||||
Daktronics, Inc. | 2,866 | 17,749 | |||||||||||||
ePlus, Inc.A | 3,700 | 371,332 | |||||||||||||
FabrinetA | 159,429 | 13,650,311 |
See accompanying notes
18
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Information Technology - 10.20% (continued) | |||||||||||||||
Electronic Equipment, Instruments & Components - 3.35% (continued) | |||||||||||||||
FARO Technologies, Inc.A | 334,852 | $ | 25,396,850 | ||||||||||||
II-VI, Inc.A B | 543,915 | 36,518,453 | |||||||||||||
Insight Enterprises, Inc.A | 8,787 | 883,263 | |||||||||||||
Jabil, Inc. | 87,389 | 4,580,931 | |||||||||||||
Kimball Electronics, Inc.A | 16,547 | 382,102 | |||||||||||||
Methode Electronics, Inc. | 141,366 | 6,351,760 | |||||||||||||
nLight, Inc.A | 144,065 | 4,226,867 | |||||||||||||
PC Connection, Inc. | 9,910 | 449,418 | |||||||||||||
Plexus Corp.A | 2,200 | 203,368 | |||||||||||||
Rogers Corp.A | 152,637 | 29,892,430 | |||||||||||||
Sanmina Corp.A | 363,483 | 14,845,578 | |||||||||||||
ScanSource, Inc.A | 118,693 | 3,591,135 | |||||||||||||
TTM Technologies, Inc.A | 210,245 | 3,154,298 | |||||||||||||
Vishay Intertechnology, Inc. | 676,621 | 16,624,578 | |||||||||||||
Vishay Precision Group, Inc.A | 278,986 | 8,894,074 | |||||||||||||
|
| ||||||||||||||
213,760,465 | |||||||||||||||
|
| ||||||||||||||
IT Services - 1.25% | |||||||||||||||
Alliance Data Systems Corp. | 98,786 | 11,641,930 | |||||||||||||
BM Technologies, Inc.A | 8,037 | 78,857 | |||||||||||||
Cass Information Systems, Inc. | 12,300 | 564,447 | |||||||||||||
CSG Systems International, Inc. | 175,863 | 8,087,939 | |||||||||||||
Euronet Worldwide, Inc.A | 242,700 | 34,810,461 | |||||||||||||
ExlService Holdings, Inc.A | 138,000 | 12,748,440 | |||||||||||||
MAXIMUS, Inc. | 119,396 | 10,941,450 | |||||||||||||
Sykes Enterprises, Inc.A | 12,500 | 547,875 | |||||||||||||
|
| ||||||||||||||
79,421,399 | |||||||||||||||
|
| ||||||||||||||
Semiconductors & Semiconductor Equipment - 3.19% | |||||||||||||||
Advanced Energy Industries, Inc. | 74,575 | 8,227,390 | |||||||||||||
Brooks Automation, Inc. | 453,185 | 45,921,236 | |||||||||||||
Canadian Solar, Inc.A B | 68,499 | 2,824,899 | |||||||||||||
Cohu, Inc.A | 828,268 | 33,139,003 | |||||||||||||
Diodes, Inc.A | 1,089,075 | 83,651,851 | |||||||||||||
Ichor Holdings Ltd. | 1,589 | 89,653 | |||||||||||||
MaxLinear, Inc. | 3,119 | 114,255 | |||||||||||||
NVE Corp. | 4,300 | 329,079 | |||||||||||||
Onto Innovation, Inc.A | 127,936 | 8,766,175 | |||||||||||||
Photronics, Inc.A | 1,260,808 | 16,012,261 | |||||||||||||
Ultra Clean Holdings, Inc.A | 91,002 | 4,647,472 | |||||||||||||
|
| ||||||||||||||
203,723,274 | |||||||||||||||
|
| ||||||||||||||
Software - 0.77% | |||||||||||||||
A10 Networks, Inc.A | 459,914 | 3,992,054 | |||||||||||||
ChannelAdvisor Corp.A | 197,356 | 4,174,079 | |||||||||||||
Cloudera, Inc.A B | 1,245,222 | 15,801,867 | |||||||||||||
Ebix, Inc.B | 12,746 | 383,782 | |||||||||||||
Progress Software Corp. | 194,554 | 8,494,228 | |||||||||||||
Xperi Holding Corp. | 444,412 | 9,132,667 | |||||||||||||
Zuora, Inc., Class AA | 446,817 | 7,238,435 | |||||||||||||
|
| ||||||||||||||
49,217,112 | |||||||||||||||
|
| ||||||||||||||
Technology Hardware, Storage & Peripherals - 0.28% | |||||||||||||||
Diebold Nixdorf, Inc.A | 18,900 | 283,689 | |||||||||||||
Super Micro Computer, Inc.A | 73,506 | 2,722,654 | |||||||||||||
Xerox Holdings Corp. | 607,700 | 14,669,878 | |||||||||||||
|
| ||||||||||||||
17,676,221 | |||||||||||||||
|
| ||||||||||||||
Total Information Technology | 650,531,671 | ||||||||||||||
|
|
See accompanying notes
19
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Materials - 5.30% | |||||||||||||||
Chemicals - 1.26% | |||||||||||||||
American Vanguard Corp. | 28,496 | $ | 563,651 | ||||||||||||
Avient Corp. | 1,526 | 77,000 | |||||||||||||
Cabot Corp. | 166,984 | 9,164,082 | |||||||||||||
Chase Corp. | 23,685 | 2,805,251 | |||||||||||||
Chemours Co. | 543,147 | 16,403,039 | |||||||||||||
Ferro Corp.A | 196,770 | 3,279,227 | |||||||||||||
FutureFuel Corp. | 8,800 | 111,760 | |||||||||||||
Hawkins, Inc. | 4,400 | 146,740 | |||||||||||||
HB Fuller Co. | 5,513 | 368,720 | |||||||||||||
Ingevity Corp.A | 1,261 | 98,517 | |||||||||||||
Kraton Corp.A | 128,396 | 4,591,441 | |||||||||||||
Livent Corp.A B | 319,608 | 5,759,336 | |||||||||||||
Minerals Technologies, Inc. | 189,252 | 14,789,128 | |||||||||||||
Orion Engineered Carbons S.A. | 567,360 | 11,267,770 | |||||||||||||
PQ Group Holdings, Inc. | 22,800 | 319,200 | |||||||||||||
Stepan Co. | 25,685 | 3,356,002 | |||||||||||||
Tredegar Corp. | 21,300 | 311,406 | |||||||||||||
Trinseo S.A. | 10,900 | 674,819 | |||||||||||||
Tronox Holdings PLC, Class A | 274,778 | 5,826,248 | |||||||||||||
Westlake Chemical Partners LP, MLP | 11,300 | 303,631 | |||||||||||||
WR Grace & Co. | 2,800 | 192,444 | |||||||||||||
|
| ||||||||||||||
80,409,412 | |||||||||||||||
|
| ||||||||||||||
Construction Materials - 0.16% | |||||||||||||||
Eagle Materials, Inc. | 74,259 | 10,258,138 | |||||||||||||
|
| ||||||||||||||
Containers & Packaging - 0.43% | |||||||||||||||
Graphic Packaging Holding Co. | 692,800 | 12,851,440 | |||||||||||||
Greif, Inc., Class A | 102,103 | 6,178,253 | |||||||||||||
O-I Glass, Inc.A | 499,612 | 8,238,466 | |||||||||||||
|
| ||||||||||||||
27,268,159 | |||||||||||||||
|
| ||||||||||||||
Metals & Mining - 3.24% | |||||||||||||||
Alamos Gold, Inc., Class A | 1,932,703 | 15,461,624 | |||||||||||||
Alcoa Corp.A | 385,117 | 14,110,687 | |||||||||||||
Allegheny Technologies, Inc.A | 1,776,008 | 41,309,946 | |||||||||||||
Arconic Corp.A | 717 | 20,914 | |||||||||||||
Carpenter Technology Corp. | 279,084 | 10,568,911 | |||||||||||||
Coeur Mining, Inc.A | 602,061 | 4,864,653 | |||||||||||||
Commercial Metals Co. | 737,446 | 21,548,893 | |||||||||||||
Compass Minerals International, Inc. | 1,927 | 131,744 | |||||||||||||
Elah Holdings, Inc.A | 3,535 | 351,697 | |||||||||||||
Ferroglobe PLCA | 1,834,956 | 7,523,320 | |||||||||||||
Ferroglobe Representation & Warranty InsuranceA C D | 2,123,070 | - | |||||||||||||
Hecla Mining Co. | 918,440 | 5,427,980 | |||||||||||||
Kaiser Aluminum Corp. | 5,347 | 644,153 | |||||||||||||
Materion Corp. | 294,259 | 20,836,480 | |||||||||||||
MP Materials Corp.A B | 289,284 | 8,690,091 | |||||||||||||
New Gold, Inc.A B | 1,316,670 | 2,185,672 | |||||||||||||
Pan American Silver Corp. | 91,442 | 2,909,685 | |||||||||||||
Pretium Resources, Inc.A | 202,937 | 2,128,809 | |||||||||||||
Schnitzer Steel Industries, Inc., Class A | 437,330 | 20,646,349 | |||||||||||||
United States Steel Corp. | 543,511 | 12,506,188 | |||||||||||||
Warrior Met Coal, Inc. | 153,121 | 2,426,968 | |||||||||||||
Worthington Industries, Inc. | 146,360 | 9,551,454 | |||||||||||||
Yamana Gold, Inc.B | 563,107 | 2,584,661 | |||||||||||||
|
| ||||||||||||||
206,430,879 | |||||||||||||||
|
|
See accompanying notes
20
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Materials - 5.30% (continued) | |||||||||||||||
Paper & Forest Products - 0.21% | |||||||||||||||
Domtar Corp. | 176,294 | $ | 6,950,557 | ||||||||||||
Glatfelter Corp. | 10,700 | 157,504 | |||||||||||||
Mercer International, Inc. | 34,638 | 571,181 | |||||||||||||
Schweitzer-Mauduit International, Inc. | 121,081 | 5,529,769 | |||||||||||||
|
| ||||||||||||||
13,209,011 | |||||||||||||||
|
| ||||||||||||||
Total Materials | 337,575,599 | ||||||||||||||
|
| ||||||||||||||
Real Estate - 4.57% | |||||||||||||||
Equity Real Estate Investment Trusts (REITs) - 4.02% | |||||||||||||||
Agree Realty Corp. | 154,815 | 10,892,783 | |||||||||||||
Alexander’s, Inc. | 1,600 | 443,584 | |||||||||||||
Apple Hospitality REIT, Inc. | 305,274 | 4,841,646 | |||||||||||||
Brandywine Realty Trust | 1,161,302 | 15,712,416 | |||||||||||||
CareTrust REIT, Inc. | 879,706 | 21,271,291 | |||||||||||||
Corporate Office Properties Trust | 512,900 | 14,381,716 | |||||||||||||
DiamondRock Hospitality Co.A | 442,370 | 4,609,495 | |||||||||||||
Equity Commonwealth | 205,643 | 5,922,518 | |||||||||||||
Highwoods Properties, Inc. | 78,947 | 3,536,036 | |||||||||||||
Industrial Logistics Properties Trust | 173,036 | 4,291,293 | |||||||||||||
Kite Realty Group Trust | 320,910 | 6,678,137 | |||||||||||||
Lexington Realty Trust | 2,267,910 | 27,759,218 | |||||||||||||
MGM Growth Properties LLC, Class A | 145,446 | 5,238,965 | |||||||||||||
Pebblebrook Hotel Trust | 268,406 | 6,409,535 | |||||||||||||
Physicians Realty Trust | 549,276 | 10,287,940 | |||||||||||||
Piedmont Office Realty Trust, Inc., Class A | 916,374 | 17,062,884 | |||||||||||||
PotlatchDeltic Corp. | 361,032 | 21,430,860 | |||||||||||||
Rayonier, Inc. | 305,124 | 11,069,899 | |||||||||||||
Retail Opportunity Investments Corp. | 364,158 | 6,409,181 | |||||||||||||
RLJ Lodging Trust | 1,208 | 19,428 | |||||||||||||
Seritage Growth Properties, Class AA | 1,134,945 | 19,521,054 | |||||||||||||
STAG Industrial, Inc.B | 137,193 | 5,008,917 | |||||||||||||
Sunstone Hotel Investors, Inc. | 849,979 | 11,185,724 | |||||||||||||
Terreno Realty Corp. | 103,568 | 6,682,207 | |||||||||||||
Urban Edge Properties | 514,738 | 9,702,811 | |||||||||||||
Weingarten Realty Investors | 179,376 | 5,801,020 | |||||||||||||
|
| ||||||||||||||
256,170,558 | |||||||||||||||
|
| ||||||||||||||
Real Estate Management & Development - 0.55% | |||||||||||||||
Howard Hughes Corp.A | 63,252 | 6,827,421 | |||||||||||||
Newmark Group, Inc., Class A | 1,050,105 | 11,288,629 | |||||||||||||
RE/MAX Holdings, Inc., Class A | 4,400 | 161,612 | |||||||||||||
Realogy Holdings Corp.A B | 373,561 | 6,455,824 | |||||||||||||
RMR Group, Inc., Class A | 271,000 | 10,726,180 | |||||||||||||
|
| ||||||||||||||
35,459,666 | |||||||||||||||
|
| ||||||||||||||
Total Real Estate | 291,630,224 | ||||||||||||||
|
| ||||||||||||||
Utilities - 2.55% | |||||||||||||||
Electric Utilities - 1.04% | |||||||||||||||
ALLETE, Inc. | 45,047 | 3,169,507 | |||||||||||||
Hawaiian Electric Industries, Inc. | 171,600 | 7,389,096 | |||||||||||||
IDACORP, Inc. | 27,306 | 2,798,319 | |||||||||||||
Otter Tail Corp. | 14,500 | 684,835 | |||||||||||||
PNM Resources, Inc. | 13,901 | 686,153 | |||||||||||||
Portland General Electric Co. | 1,011,498 | 51,444,788 | |||||||||||||
|
| ||||||||||||||
66,172,698 | |||||||||||||||
|
|
See accompanying notes
21
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
Shares | Fair Value | ||||||||||||||
COMMON STOCKS - 97.64% (continued) | |||||||||||||||
Utilities - 2.55% (continued) | |||||||||||||||
Gas Utilities - 0.58% | |||||||||||||||
Chesapeake Utilities Corp. | 61,103 | $ | 7,241,928 | ||||||||||||
National Fuel Gas Co. | 123,871 | 6,151,434 | |||||||||||||
South Jersey Industries, Inc.B | 29,788 | 737,317 | |||||||||||||
Southwest Gas Holdings, Inc. | 307,484 | 21,437,784 | |||||||||||||
Spire, Inc. | 9,299 | 700,587 | |||||||||||||
Star Group LP | 20,619 | 218,355 | |||||||||||||
Suburban Propane Partners LP, MLP | 43,771 | 665,319 | |||||||||||||
|
| ||||||||||||||
37,152,724 | |||||||||||||||
|
| ||||||||||||||
Multi-Utilities - 0.93% | |||||||||||||||
Avista Corp. | 893,940 | 41,139,119 | |||||||||||||
NorthWestern Corp. | 268,355 | 18,256,191 | |||||||||||||
|
| ||||||||||||||
59,395,310 | |||||||||||||||
|
| ||||||||||||||
Total Utilities | 162,720,732 | ||||||||||||||
|
| ||||||||||||||
Total Common Stocks (Cost $4,256,386,046) | 6,225,354,532 | ||||||||||||||
|
| ||||||||||||||
SHORT-TERM INVESTMENTS - 2.41% (Cost $153,431,588) | |||||||||||||||
Investment Companies - 2.41% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%E F | 153,431,588 | 153,431,588 | |||||||||||||
|
| ||||||||||||||
SECURITIES LENDING COLLATERAL - 0.27% (Cost $16,934,963) | |||||||||||||||
Investment Companies - 0.27% | |||||||||||||||
American Beacon U.S. Government Money Market Select Fund, 0.01%E F | 16,934,963 | 16,934,963 | |||||||||||||
|
| ||||||||||||||
TOTAL INVESTMENTS - 100.32% (Cost $4,426,752,597) | 6,395,721,083 | ||||||||||||||
LIABILITIES, NET OF OTHER ASSETS - (0.32%) | (20,180,488 | ) | |||||||||||||
|
| ||||||||||||||
TOTAL NET ASSETS - 100.00% | $ | 6,375,540,595 | |||||||||||||
|
| ||||||||||||||
Percentages are stated as a percent of net assets. |
A Non-income producing security.
B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at April 30, 2021 (Note 9).
C Value was determined using significant unobservable inputs.
D Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $0 or 0.00% of net assets.
E The Fund is affiliated by having the same investment advisor.
F 7-day yield.
ADR - American Depositary Receipt.
LLC - Limited Liability Company.
LP - Limited Partnership.
MLP - Master Limited Partnership.
PLC - Public Limited Company.
Long Futures Contracts Open on April 30, 2021: |
| |||||||||||||||
Equity Futures Contracts | ||||||||||||||||
Description | Number of Contracts | Expiration Date | Notional Amount | Contract Value | Unrealized Appreciation (Depreciation) | |||||||||||
Russell 2000 E-Mini Index Futures | 1,290 | June 2021 | $ | 148,439,652 | $ | 145,866,750 | $ | (2,572,902 | ) | |||||||
|
|
|
|
|
| |||||||||||
$ | 148,439,652 | $ | 145,866,750 | $ | (2,572,902 | ) | ||||||||||
|
|
|
|
|
|
See accompanying notes
22
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2021 (Unaudited)
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2021, the investments were classified as described below:
Small Cap Value Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets |
| |||||||||||||||||||||||||||
Common Stocks | $ | 6,225,354,532 | $ | - | $ | 0 | (1) | $ | 6,225,354,532 | |||||||||||||||||||
Short-Term Investments | 153,431,588 | - | - | 153,431,588 | ||||||||||||||||||||||||
Securities Lending Collateral | 16,934,963 | - | - | 16,934,963 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Investments in Securities - Assets | $ | 6,395,721,083 | $ | - | $ | - | $ | 6,395,721,083 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Financial Derivative Instruments - Liabilities |
| |||||||||||||||||||||||||||
Futures Contracts | $ | (2,572,902 | ) | $ | - | $ | - | $ | (2,572,902 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total Financial Derivative Instruments - Liabilities | $ | (2,572,902 | ) | $ | - | $ | - | $ | (2,572,902 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
(1) | Investment held in the Fund’s Portfolio with $0 fair value. |
U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the period ended April 30, 2021, there were no transfers into or out of Level 3.
See accompanying notes
23
American Beacon Small Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2021 (Unaudited)
Assets: |
| |||
Investments in unaffiliated securities, at fair value†§ | $ | 6,225,354,532 | ||
Investments in affiliated securities, at fair value‡ | 170,366,551 | |||
Cash collateral held at broker for futures contracts | 9,708,000 | |||
Dividends and interest receivable | 1,637,700 | |||
Deposits with broker for futures contracts | 499,725 | |||
Receivable for investments sold | 4,215,233 | |||
Receivable for fund shares sold | 32,083,250 | |||
Prepaid expenses | 124,292 | |||
|
| |||
Total assets | 6,443,989,283 | |||
|
| |||
Liabilities: | ||||
Payable for investments purchased | 20,254,596 | |||
Payable for fund shares redeemed | 24,003,953 | |||
Management and sub-advisory fees payable (Note 2) | 3,932,196 | |||
Service fees payable (Note 2) | 146,665 | |||
Transfer agent fees payable (Note 2) | 97,451 | |||
Payable upon return of securities loaned (Note 9)§ | 16,934,963 | |||
Custody and fund accounting fees payable | 191,273 | |||
Professional fees payable | 179,009 | |||
Trustee fees payable (Note 2) | 38,876 | |||
Payable for variation margin from open futures contracts (Note 5) | 2,570,464 | |||
Other liabilities | 99,242 | |||
|
| |||
Total liabilities | 68,448,688 | |||
|
| |||
Net assets | $ | 6,375,540,595 | ||
|
| |||
Analysis of net assets: | ||||
Paid-in-capital | $ | 4,262,074,669 | ||
Total distributable earnings (deficits)A | 2,113,465,926 | |||
|
| |||
Net assets | $ | 6,375,540,595 | ||
|
| |||
Shares outstanding at no par value (unlimited shares authorized): | ||||
R5 Class | 124,090,189 | |||
|
| |||
Y Class | 8,814,276 | |||
|
| |||
Investor Class | 14,621,506 | |||
|
| |||
Advisor Class | 1,957,026 | |||
|
| |||
A Class | 2,344,155 | |||
|
| |||
C Class | 433,183 | |||
|
| |||
R6 Class | 56,358,243 | |||
|
| |||
Net assets: | ||||
R5 Class | $ | 3,812,588,727 | ||
|
| |||
Y Class | $ | 266,451,694 | ||
|
| |||
Investor Class | $ | 429,660,284 | ||
|
| |||
Advisor Class | $ | 56,690,428 | ||
|
| |||
A Class | $ | 67,390,522 | ||
|
| |||
C Class | $ | 11,806,804 | ||
|
| |||
R6 Class | $ | 1,730,952,136 | ||
|
| |||
Net asset value, offering and redemption price per share: | ||||
R5 Class | $ | 30.72 | ||
|
| |||
Y Class | $ | 30.23 | ||
|
| |||
Investor Class | $ | 29.39 | ||
|
| |||
Advisor Class | $ | 28.97 | ||
|
| |||
A Class | $ | 28.75 | ||
|
| |||
A Class (offering price) | $ | 30.50 | ||
|
| |||
C Class | $ | 27.26 | ||
|
| |||
R6 Class | $ | 30.71 | ||
|
| |||
† Cost of investments in unaffiliated securities | $ | 4,256,386,046 | ||
‡ Cost of investments in affiliated securities | $ | 170,366,551 | ||
§ Fair value of securities on loan | $ | 103,626,619 | ||
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at period end. |
|
See accompanying notes
24
American Beacon Small Cap Value FundSM
Statement of Operations
For the period ended April 30, 2021 (Unaudited)
Investment income: | ||||
Dividend income from unaffiliated securities (net of foreign taxes)† | $ | 43,931,261 | ||
Dividend income from affiliated securities (Note 2) | 5,972 | |||
Income derived from securities lending (Note 9) | 909,177 | |||
|
| |||
Total investment income | 44,846,410 | |||
|
| |||
Expenses: | ||||
Management and sub-advisory fees (Note 2) | 21,691,584 | |||
Transfer agent fees: | ||||
R5 Class (Note 2) | 538,725 | |||
Y Class (Note 2) | 122,980 | |||
Investor Class | 9,604 | |||
Advisor Class | 2,586 | |||
A Class | 4,327 | |||
C Class | 1,765 | |||
R6 Class | 22,079 | |||
Custody and fund accounting fees | 245,543 | |||
Professional fees | 171,661 | |||
Registration fees and expenses | 78,157 | |||
Service fees (Note 2): | ||||
Investor Class | 692,347 | |||
Advisor Class | 66,200 | |||
A Class | 59,794 | |||
C Class | 7,604 | |||
Distribution fees (Note 2): | ||||
Advisor Class | 66,257 | |||
A Class | 74,401 | |||
C Class | 53,241 | |||
Prospectus and shareholder report expenses | 182,727 | |||
Trustee fees (Note 2) | 191,731 | |||
Loan expense (Note 10) | 14,428 | |||
Other expenses | 227,722 | |||
|
| |||
Total expenses | 24,525,463 | |||
|
| |||
Net investment income | 20,320,947 | |||
|
| |||
Realized and unrealized gain (loss) from investments: | ||||
Net realized gain from: | ||||
Investments in unaffiliated securitiesA | 541,905,727 | |||
Commission recapture (Note 1) | 4,988 | |||
Foreign currency transactions | 93 | |||
Futures contracts | 48,247,270 | |||
Change in net unrealized appreciation (depreciation) of: | ||||
Investments in unaffiliated securitiesB | 1,871,075,933 | |||
Foreign currency transactions | (14 | ) | ||
Futures contracts | (1,813,880 | ) | ||
|
| |||
Net gain from investments | 2,459,420,117 | |||
|
| |||
Net increase in net assets resulting from operations | $ | 2,479,741,064 | ||
|
| |||
† Foreign taxes | $ | 107,161 | ||
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
25
American Beacon Small Cap Value FundSM
Statement of Changes in Net Assets
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||
(unaudited) | ||||||||||||
Increase (decrease) in net assets: |
| |||||||||||
Operations: |
| |||||||||||
Net investment income | $ | 20,320,947 | $ | 51,286,061 | ||||||||
Net realized gain (loss) from investments in unaffiliated securities, commission recapture, foreign currency transactions and futures contracts | 590,158,078 | (349,000,273 | ) | |||||||||
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions and futures contracts | 1,869,262,039 | (450,826,828 | ) | |||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets resulting from operations | 2,479,741,064 | (748,541,040 | ) | |||||||||
|
|
|
| |||||||||
Distributions to shareholders: |
| |||||||||||
Total retained earnings: | ||||||||||||
R5 Class | (30,252,473 | ) | (77,630,333 | ) | ||||||||
Y Class | (1,814,421 | ) | (4,669,476 | ) | ||||||||
Investor Class | (2,372,133 | ) | (7,055,350 | ) | ||||||||
Advisor Class | (272,130 | ) | (889,167 | ) | ||||||||
A Class | (318,938 | ) | (920,254 | ) | ||||||||
C Class | - | (127,221 | ) | |||||||||
R6 Class | (13,695,714 | ) | (25,997,687 | ) | ||||||||
|
|
|
| |||||||||
Net distributions to shareholders | (48,725,809 | ) | (117,289,488 | ) | ||||||||
|
|
|
| |||||||||
Capital share transactions (Note 11): |
| |||||||||||
Proceeds from sales of shares | 918,126,600 | 1,304,585,937 | ||||||||||
Reinvestment of dividends and distributions | 46,257,815 | 112,103,096 | ||||||||||
Cost of shares redeemed | (1,577,625,974 | ) | (2,191,361,762 | ) | ||||||||
|
|
|
| |||||||||
Net (decrease) in net assets from capital share transactions | (613,241,559 | ) | (774,672,729 | ) | ||||||||
|
|
|
| |||||||||
Net increase (decrease) in net assets | 1,817,773,696 | (1,640,503,257 | ) | |||||||||
|
|
|
| |||||||||
Net assets: |
| |||||||||||
Beginning of period | 4,557,766,899 | 6,198,270,156 | ||||||||||
|
|
|
| |||||||||
End of period | $ | 6,375,540,595 | $ | 4,557,766,899 | ||||||||
|
|
|
|
See accompanying notes
26
American Beacon Small Cap Value FundSM
April 30, 2021 (Unaudited)
1. Organization and Significant Accounting Policies
American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of April 30, 2021, the Trust consists of twenty-eight active series, one of which is presented in this filing: American Beacon Small Cap Value Fund (the “Fund”). The remaining twenty-seven 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.
In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives a fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how the Fund will use derivatives, may adversely affect the Fund’s performance and may increase costs related to the Fund’s use of derivatives.
Class Disclosure
The Fund has multiple classes of shares designed to meet the needs of different groups of investors. The following table sets forth the differences amongst the classes:
Class | Eligible Investors | Minimum Initial Investments | ||||
R5 Class | 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 Class | All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors. | $ | 2,500 | |||
Advisor Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrators. | $ | 2,500 |
27
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Class | Eligible Investors | Minimum Initial Investments | ||||
A Class | All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”). | $ | 2,500 | |||
C Class | Retail investors who invest directly through a financial intermediary, such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC. | $ | 1,000 | |||
R6 Class | Large institutional retirement plan investors - sold through retirement plan sponsors. | None |
Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class based on the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.
Significant Accounting Policies
The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the 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 the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Fund. Interest income, 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 based on specific lot identification.
Distributions to Shareholders
The Fund distributes most or all of its net earnings and realized gains, if any, each taxable year in the form of dividends from net investment income and distributions of realized net capital gains and net gains from foreign currency transactions on an annual basis. The Fund does not have a fixed dividend rate and does not guarantee that it will pay any distributions in any particular period. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund may designate earnings and profits distributed to shareholders on the redemption of shares.
Commission Recapture
The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If the Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain (loss) in the Fund’s Statement of Operations, if applicable.
28
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Allocation of Income, Trust Expenses, Gains, and Losses
Investment income, realized and unrealized gains and losses from investments of the Fund is allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Fund. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Fund on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Fund or nature of the services performed and relative applicability to the Fund.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.
Other
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.
2. Transactions with Affiliates
Management and Investment Sub-Advisory Agreements
The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide the Fund with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of the Fund’s average daily net assets that is calculated and accrued daily according to the following schedule:
First $15 billion | 0.35 | % | ||
Next $15 billion | 0.325 | % | ||
Over $30 billion | 0.30 | % |
The Trust, on behalf of the Fund, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Brandywine Global Investment Management, LLC; Foundry Partners, LLC; Hillcrest Asset Management, LLC; Hotchkis and Wiley Capital Management, LLC; and Mellon Investments Corporation (“Sub-Advisors”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets.
The Management and Sub-Advisory Fees paid by the Fund for the period ended April 30, 2021 were as follows:
Effective Fee Rate | Amount of Fees Paid | |||||||||||
Management Fees | 0.35 | % | $ | 10,312,749 | ||||||||
Sub-Advisor Fees | 0.39 | % | 11,378,835 | |||||||||
|
|
|
| |||||||||
Total | 0.74 | % | $ | 21,691,584 | ||||||||
|
|
|
|
As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers,
29
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
a fee of 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 of 10% of such loan fees. Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the period ended April 30, 2021, the Manager received securities lending fees of $80,731 for the securities lending activities of the Fund.
Distribution Plans
Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.
For all other share classes, the Fund have utilized a “defensive” Distribution Plan (the “Plan”) pursuant to which no separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the use of management fees received by the Manager and/or the investment advisors hired by the Manager for distribution purposes. Under this Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly for the distribution of Fund shares.
Service Plans
The Manager and the Trust entered into a Service Plan that obligates the Manager to oversee additional shareholder servicing of the Investor, Advisor, A and C Classes of the Fund. As compensation for performing the duties required under the Service Plan, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Fund.
Sub-Transfer Agent Fees
The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the R5 and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to Board approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the R5 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 R5 and Y Classes on an annual basis. During the period ended April 30, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:
Fund | Sub-Transfer Agent Fees | |||
Small Cap Value | $ | 598,901 |
30
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
As of April 30, 2021, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:
Fund | Reimbursement Sub-Transfer Agent Fees | |||
Small Cap Value | $ | 61,920 |
Brokerage Commissions
Affiliated entities of a sub-advisor to the Fund received commissions on purchases and sales of the Fund’s portfolio securities totaling $194,825 for the period ended April 30, 2021.
Investments in Affiliated Funds
The Fund may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). The Fund listed below held the following shares with an April 30, 2021 fair value and dividend income earned from the investment in the USG Select Fund.
Affiliated Security | Type of Transaction | Fund | April 30, 2021 Shares/Principal | Change in Unrealized Gain (Loss) | Realized Gain (Loss) | Dividend Income | April 30, 2021 Fair Value | |||||||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Direct | Small Cap Value | $ | 153,431,588 | $ | - | $ | - | $ | 5,972 | $ | 153,431,588 | ||||||||||||||||||||||||||||||||||||
U.S. Government Money Market Select Fund | Securities Lending | Small Cap Value | 16,934,963 | - | - | - | 16,934,963 |
The Fund and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the period ended April 30, 2021, the Manager earned fees on the Fund’s direct investments and securities lending collateral investments in the USG Select Fund as shown below:
Fund | Direct Investments in USG Select Fund | Securities Lending Collateral Investments in USG Select Fund | Total | |||||||||
Small Cap Value | $ | 74,242 | $ | 13,705 | $ | 87,947 |
Interfund Credit Facility
Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During
31
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
the period ended April 30, 2021, the Fund participated as a lender and loaned $14,817,038 for 7 days at an interest rate of 0.82% with interest charges earned of $2,333. During the period ended April 30, 2021, the Fund borrowed $2,891,743 for 1 day at an interest rate of 0.84% with interest charges earned of $67. These amounts are included in “Interest income” on the Statement of Operations.
Expense Reimbursement Plan
The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years from the date of the Manager’s waiver/reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. During the period ended April 30, 2021 there were no waived fees, expenses reimbursed, or recouped expenses.
Sales Commissions
The Fund’s Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers which may be used to offset distribution related expenses. During the period ended April 30, 2021, RID collected $674 from the sale of Class A Shares of the Fund.
A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Fund’s Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the period ended April 30, 2021, there were no CDSC fees collected for the Class A Shares of the Fund.
A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Fund’s Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the period ended April 30, 2021, CDSC fees of $47 were collected for Class C Shares of the Fund.
Trustee Fees and Expenses
Effective January 1, 2021, as compensation for their service to the American Beacon Funds Complex, including the Trust (collectively, the “Trusts”), each Trustee is compensated from the Trusts as follows: (1) an annual retainer of $120,000; (2) meeting attendance fee (for attendance in-person or via teleconference) of (a) $12,000 for in person attendance, or $5,000 for telephonic attendance, by Board members for each regularly scheduled or special Board meeting, (b) $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, (c) $1,000 for attendance by Committee members at meetings of the Nominating and Governance Committee; and (d) $2,500 for attendance by Board members for each special telephonic Board meeting; and (3) reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. For her service as Board Chair, Ms. Cline receives an additional annual retainer of $50,000. Although she attends several committee meetings at each quarterly Board meeting, she receives only a single $2,500 fee each quarter for her attendance at those meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chair of the Nominating and Governance Committee receives an additional annual retainer of $10,000.
32
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
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.
Equity securities, including shares of closed-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 and over-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 been de-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 in non-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 of non-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
33
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
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.
Valuation Inputs
Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level 1 | - | Quoted prices in active markets for identical securities. | ||
Level 2 | - | Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. | ||
Level 3 | - | Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment. |
Level 1 and Level 2 trading assets and trading liabilities, at fair value
Common stocks, ETFs, preferred securities, and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are generally categorized as Level 2 of the fair value hierarchy.
Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.
Level 3 trading assets and trading liabilities, at fair value
The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of the fair value hierarchy are as follows.
Securities and other assets for which market quotes are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction and may be categorized as Level 3 of the fair value hierarchy.
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
34
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
of the relevant market, but prior to the Exchange close, that materially affect the values of the Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade, do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Manager the responsibility for monitoring significant events that may materially affect the fair values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be re-evaluated in light of such significant events.
The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated the responsibility for applying the valuation methods to the Manager. For instances in which daily market quotes are not readily available, investments may be valued pursuant to guidelines established by the Board. In the event that the security or asset cannot be valued, pursuant to one of the valuation methods established by the Board, the fair value of the security or asset will be determined in good faith by the Valuation Committee, generally based upon recommendations provided by the Manager.
When a Fund uses fair valuation methods applied by the Manager that use significant unobservable inputs to determine its NAV, the securities priced using this methodology are categorized as Level 3 of the fair value hierarchy. These methods may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of the Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.
4. Securities and Other Investments
American Depositary Receipts
ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers, and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Fund’s possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Fund may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.
Common Stock
Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or OTC. OTC stock may be less liquid than exchange-traded stock.
35
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Other Investment Company Securities and Other Exchange-Traded Products
The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies (“BDCs”), ETFs, unit investment trusts, and other investment companies of the Trust. The Fund may invest in securities of an investment company advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Fund becomes a shareholder of that investment company. As a result, the Fund’s shareholders indirectly will bear the Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.
Publicly Traded Partnerships/Master Limited Partnerships (“MLPs”)
The Fund may invest in publicly traded partnerships such as MLPs. MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the OTC market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. The general partner or partners are jointly and severally responsible for the liabilities of the MLP. (An MLP also may be an entity similar to a limited partnership, such as an LLC, which has one or more managers or managing members and non-managing members (who are like limited partners)). The Fund invests in an MLP as a limited partner and normally would not be liable for the debts of an MLP beyond the amount the Fund has invested therein, but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to a limited partner. The right of an MLP’s creditors would continue even after a Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.
Real Estate Investment Trusts
The Fund may own shares of real estate investment trusts (“REITs”) which report information on the source of their distributions annually. The Fund re-characterizes distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information, which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year.
5. Financial Derivative Instruments
The Fund may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Funds’ use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.
Futures Contracts
Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Fund may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities or that the counterparty will fail to perform its obligations.
36
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.
During the period ended April 30, 2021, the Fund entered into futures contracts primarily for exposing cash to markets.
The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of futures contracts. For the purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.
Average Futures Contracts Outstanding | ||||
Fund | Period Ended April 30, 2021 | |||
Small Cap Value | 1,597 |
The following is a summary of the fair valuations of the Fund’s derivative instruments categorized by risk exposure(1):
Fair values of financial instruments on the Statement of Assets and Liabilities as of April 30, 2021: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives not accounted for as hedging instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Payable for variation margin from open futures contracts(2) | $ | - | $ | - | $ | - | $ | - | $ | 2,572,902 | $ | 2,572,902 |
The effect of financial derivative instruments on the Statement of Operations as of April 30, 2021: |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | - | $ | - | $ | - | $ | - | $ | 48,247,270 | $ | 48,247,270 | |||||||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation | Credit contracts | Foreign exchange contracts | Commodity contracts | Interest rate contracts | Equity contracts | Total | |||||||||||||||||||||||||||||||||||||||||||||||||
Futures contracts | $ | - | $ | - | $ | - | $ | - | $ | (1,813,880 | ) | $ | (1,813,880 | ) |
(1) See Note 3 in the Notes to Financial Statements for additional information.
(2) Includes cumulative appreciation (depreciation) of futures contracts as reported in the Fund’s Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
Offsetting Assets and Liabilities
The Fund is a party to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Fund employs multiple money managers and counterparties and has elected not to offset qualifying financial and derivative instruments on the Statement of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below, if applicable. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default.
37
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, April 30, 2021.
Offsetting of Financial and Derivative Assets as of April 30, 2021: |
| |||||||||||
| Assets | Liabilities | ||||||||||
Futures Contracts(1) | $ | - | $ | (2,572,902 | ) | |||||||
|
|
|
| |||||||||
Total derivative assets and liabilities in the Statement of Assets and Liabilities | $ | - | $ | (2,572,902 | ) | |||||||
|
|
|
| |||||||||
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”) | $ | - | $ | 2,572,902 | ||||||||
|
|
|
|
Remaining Contractual Maturity of the Agreements As of April 30, 2021 | ||||||||||||||||||||||||||||||||||||
Overnight and Continuous | <30 days | Between 30 & 90 days | >90 days | Total | ||||||||||||||||||||||||||||||||
Securities Lending Transactions |
| |||||||||||||||||||||||||||||||||||
Common Stocks | $ | 16,934,963 | $ | - | $ | - | $ | - | $ | 16,934,963 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total Borrowings | $ | 16,934,963 | $ | - | $ | - | $ | - | $ | 16,934,963 | ||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Gross amount of recognized liabilities for securities lending transactions |
| $ | 16,934,963 | |||||||||||||||||||||||||||||||||
|
|
(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 Fund may involve certain risks including, but not limited to, those described below.
Equity Investments Risk
Equity securities are subject to market risk. The Fund’s investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional risk. The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company. Preferred stocks and convertible securities are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency exchange rate fluctuations, political and financial instability in the home country of a particular depositary receipt, less liquidity and more volatility, less government regulation and supervision and delays in transaction settlement.
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, (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. To the extent the Fund invests a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region.
38
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
Futures Contracts Risk
Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. There may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes. There can be no assurance that any strategy used will succeed. There also can be no assurance that, at all times, a liquid market will exist for offsetting a futures contract that a Fund has previously bought or sold and this may result in the inability to close a futures contract when desired. Futures contracts may experience potentially dramatic price changes, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).
Market Risk
The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund’s performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future. The value of a security may decline due to adverse issuer-specific conditions, general market conditions unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole. Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Such market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, a reduction in the willingness and ability of some lenders to extend credit, difficulties for some borrowers in obtaining financing on attractive terms, if at all, and adverse investor sentiment or publicity. Changes in value may be temporary or may last for extended periods. Adverse market events may also lead to increased shareholder redemptions, which could cause a Fund to experience a loss or difficulty in selling investments to meet redemption requests by shareholders and may increase a Fund’s portfolio turnover, which will increase the costs that a Fund incurs and lower a Fund’s performance. Even when securities markets perform well, there is no assurance that the investments held by a Fund will increase in value along with the broader market.
Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, such as changes in the U.S. presidential administration and Congress, 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 severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers.
Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. The financial markets generally
39
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.
Multiple Sub-Advisor Risk
The Manager may allocate the Fund’s assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Fund’s assets. To a significant extent, the Fund’s performance will depend on the success of the Manager in allocating the Fund’s assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-advisor manages its allocated portion of the Fund independently from another sub-advisor, the same security may be held in different portions of the Fund, or may be acquired for one portion of the Fund at a time when a sub-advisor to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Fund’s holdings. Similarly, under some market conditions, one sub-advisor may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-advisor believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Fund. Because each sub-advisor directs the trading for its own portion of the Fund, and does not aggregate its transactions with those of the other sub-advisors, the Fund may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Fund’s assets among the Fund’s sub-advisors in a manner that it believes is consistent with achieving the Fund’s investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Fund’s assets among sub-advisors, due to factors that could impact the Manager’s revenues and profits.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including money market funds and ETFs. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses, including for example, advisory and administrative fees, charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Fund’s investments in money market funds are subject to interest rate risk, credit risk, and market risk. The Fund must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Fund’s investment may decline, adversely affecting the Fund’s performance. ETFs are subject to the following risks that do not apply to conventional funds: (1) the market price of an ETF’s shares may trade at a discount or premium to its NAV; (2) an active trading market for an ETF’s shares may not develop or be maintained; or (3) trading of an ETF’s shares may be halted if the listing exchange’s officials deem such action appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally. An ETF that tracks an index may not precisely replicate the returns of its benchmark index. To the extent the Fund invests in other investment companies that invest in equity securities, fixed-income securities and/or foreign securities, or that track an index, the Fund is subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject. ETFs have expenses associated with their operation, typically including advisory fees.
Recent Market Events Risk
An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. The transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions and closed borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event changes, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. Markets generally have also been adversely impacted by reduced demand for oil and other energy commodities as a result of the slowdown in economic activity resulting from the spread of COVID-19 and by price competition among key oil producing companies. Public health crises caused by the COVID-19 outbreak may
40
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty and further developments could result in additional disruptions and uncertainty. These impacts have caused significant volatility in global financial markets, which have caused and may continue to cause losses for investors. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession.
The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time.
The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets and has signaled that it plans to maintain its interventions at an elevated level. Amid these ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. The U.S. government has reduced the federal corporate income tax rate, 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 market’s expectations for changes in government policies are not borne out. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty.
A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on January 31, 2020, commonly referred to as “Brexit,” and trade agreement negotiations during the transition period, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time. Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.
Sector Risk
Sector risk is the risk associated with a Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase.
To the extent a Fund invests significantly in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than investment companies investing more broadly.
Securities Lending Risk
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
41
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
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. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.
7. Federal Income and Excise Taxes
It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, the Fund is treated as a single entity for the purpose of determining such qualification.
The Fund does not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2020 remain subject to examination by the Internal Revenue Service. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statement of Operations.
The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation (depreciation), as applicable, as the income is earned or capital gains are recorded.
Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.
As of April 30, 2021, the tax cost for the Fund and their respective gross unrealized appreciation (depreciation) were as follows:
Fund | Tax Cost | Unrealized Appreciation | Unrealized (Depreciation) | Net Unrealized Appreciation (Depreciation) | ||||||||||||||||||||||||
Small Cap Value | $ | 4,550,292,467 | $ | 1,979,858,734 | $ | (134,430,118 | ) | $ | 1,845,428,616 |
Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the Fund in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.
As of October 31, 2020, the Fund had the following capital loss carryforwards:
Fund | Short-Term Capital Loss Carryforwards | Long-Term Capital Loss Carryforwards | ||||||||||
Small Cap Value | $ | 118,678,194 | $ | 198,805,194 |
42
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
8. Investment Transactions
The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the period ended April 30, 2021 were as follows:
Fund | Purchases (non-U.S. Government Securities) | Sales (non-U.S. Government Securities) | ||||||||||
Small Cap Value | $ | 1,590,252,326 | $ | 2,176,234,348 |
A summary of the Fund’s transactions in the USG Select Fund for the period ended April 30, 2021 were as follows:
Fund | Type of Transaction | October 31, 2020 Shares/Fair Value | Purchases | Sales | April 30, 2021 Shares/Fair Value | |||||||||||||||||||||||||||||
Small Cap Value | Direct | $ | 110,411,904 | $ | 1,211,649,530 | $ | 1,168,629,846 | $ | 153,431,588 | |||||||||||||||||||||||||
Small Cap Value | Securities Lending | 25,629,116 | 161,000,377 | 169,694,530 | 16,934,963 |
9. Securities Lending
The Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked-to-market daily. Daily mark-to-market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark-to-market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.
To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statement of Assets and Liabilities as a payable.
Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retained 80%, 10%, and 10%, respectively, of the income generated from securities lending.
While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.
Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience
43
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.
As of April 30, 2021, the value of outstanding securities on loan and the value of collateral were as follows:
Fund | Market Value of Securities on Loan | Cash Collateral Received | Non-Cash Collateral Received | Total Collateral Received | ||||||||||||||||||||||
Small Cap Value | $103,626,619 | $ | 16,934,963 | $ | 92,650,289 | $ | 109,585,252 |
Cash collateral is listed on the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statement of Operations.
Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statement of Assets and Liabilities.
10. Borrowing Arrangements
Effective November 12, 2020 (the “Effective Date”), the Fund, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.
On the Effective Date, the Fund, along with certain other Participating Funds managed by the Manager, also renewed 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) Overnight Bank Funding Rate (”OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 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 “Loan expense” on the Statement of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.
During the period ended April 30, 2021, the Fund did not utilize this facility.
44
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
11. Capital Share Transactions
The tables below summarize the activity in capital shares for each Class of the Fund:
R5 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 15,922,543 | $ | 446,050,523 | 39,439,761 | $ | 716,366,582 | ||||||||||||||||||||||
Reinvestment of dividends | 1,148,888 | 28,354,544 | 3,024,304 | 73,672,049 | ||||||||||||||||||||||||
Shares redeemed | (34,695,327 | ) | (927,532,385 | ) | (76,877,109 | ) | (1,510,018,985 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (17,623,896 | ) | $ | (453,127,318 | ) | (34,413,044 | ) | $ | (719,980,354 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Y Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 1,805,044 | $ | 47,213,049 | 3,989,719 | $ | 73,667,583 | ||||||||||||||||||||||
Reinvestment of dividends | 70,195 | 1,705,030 | 183,614 | 4,403,056 | ||||||||||||||||||||||||
Shares redeemed | (1,844,277 | ) | (48,952,336 | ) | (6,576,100 | ) | (127,119,945 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | 30,962 | $ | (34,257 | ) | (2,402,767 | ) | $ | (49,049,306 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 2,462,912 | $ | 64,991,366 | 3,792,630 | $ | 69,752,665 | ||||||||||||||||||||||
Reinvestment of dividends | 95,069 | 2,246,481 | 289,400 | 6,757,492 | ||||||||||||||||||||||||
Shares redeemed | (3,967,176 | ) | (101,266,311 | ) | (7,246,353 | ) | (133,927,076 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (1,409,195 | ) | $ | (34,028,464 | ) | (3,164,323 | ) | $ | (57,416,919 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Advisor Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 444,723 | $ | 11,529,996 | 657,797 | $ | 11,111,813 | ||||||||||||||||||||||
Reinvestment of dividends | 11,670 | 272,037 | 38,598 | 888,909 | ||||||||||||||||||||||||
Shares redeemed | (810,379 | ) | (20,515,613 | ) | (1,213,292 | ) | (23,166,720 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (353,986 | ) | $ | (8,713,580 | ) | (516,897 | ) | $ | (11,165,998 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
A Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 392,534 | $ | 10,229,624 | 848,676 | $ | 15,605,209 | ||||||||||||||||||||||
Reinvestment of dividends | 13,698 | 316,837 | 40,097 | 916,617 | ||||||||||||||||||||||||
Shares redeemed | (556,679 | ) | (14,001,583 | ) | (1,316,735 | ) | (24,718,335 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (150,447 | ) | $ | (3,455,122 | ) | (427,962 | ) | $ | (8,196,509 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 40,422 | $ | 1,011,680 | 95,220 | $ | 1,611,629 | ||||||||||||||||||||||
Reinvestment of dividends | - | - | 5,705 | 124,090 | ||||||||||||||||||||||||
Shares redeemed | (68,504 | ) | (1,692,612 | ) | (254,971 | ) | (4,363,916 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net (decrease) in shares outstanding | (28,082 | ) | $ | (680,932 | ) | (154,046 | ) | $ | (2,628,197 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
45
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2021 (Unaudited)
R6 Class | ||||||||||||||||||||||||||||
Six Months Ended April 30, 2021 | Year Ended October 31, 2020 | |||||||||||||||||||||||||||
(unaudited) |
| |||||||||||||||||||||||||||
Small Cap Value Fund | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Shares sold | 12,239,522 | $ | 337,100,362 | 21,325,959 | $ | 416,470,456 | ||||||||||||||||||||||
Reinvestment of dividends | 541,665 | 13,362,886 | 1,040,693 | 25,340,883 | ||||||||||||||||||||||||
Shares redeemed | (16,549,272 | ) | (463,665,134 | ) | (18,819,838 | ) | (368,046,785 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||
Net increase (decrease) in shares outstanding | (3,768,085 | ) | $ | (113,201,886 | ) | 3,546,814 | $ | 73,764,554 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
12. Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.
46
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R5 ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016B | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 19.76 | $ | 23.13 | $ | 26.14 | $ | 29.51 | $ | 24.36 | $ | 24.69 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.13 | 0.26 | 0.26 | 0.21 | 0.17 | 0.23 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 11.05 | (3.18 | ) | (0.25 | ) | (0.94 | ) | 5.83 | 0.79 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 11.18 | (2.92 | ) | 0.01 | (0.73 | ) | 6.00 | 1.02 | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.22 | ) | (0.29 | ) | (0.18 | ) | (0.15 | ) | (0.23 | ) | (0.20 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | (2.84 | ) | (2.49 | ) | (0.62 | ) | (1.15 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.22 | ) | (0.45 | ) | (3.02 | ) | (2.64 | ) | (0.85 | ) | (1.35 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 30.72 | $ | 19.76 | $ | 23.13 | $ | 26.14 | $ | 29.51 | $ | 24.36 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 56.86 | %D | (13.00 | )% | 2.01 | % | (2.96 | )% | 24.80 | % | 4.58 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 3,812,588,727 | $ | 2,799,722,660 | $ | 4,073,332,655 | $ | 4,604,864,422 | $ | 5,527,380,111 | $ | 4,717,291,753 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.81 | %E | 0.82 | % | 0.83 | % | 0.80 | % | 0.82 | % | 0.83 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.81 | %E | 0.82 | % | 0.83 | % | 0.80 | % | 0.82 | % | 0.83 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.73 | %E | 1.04 | % | 1.07 | % | 0.66 | % | 0.58 | % | 1.01 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.73 | %E | 1.04 | % | 1.07 | % | 0.66 | % | 0.58 | % | 1.01 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 29 | %D | 61 | % | 48 | % | 69 | % | 48 | % | 53 | % |
A | Prior to February 28, 2020, the R5 Class was known as Institutional Class. |
B | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
See accompanying notes
47
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Y Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016A | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 19.44 | $ | 22.76 | $ | 25.77 | $ | 29.13 | $ | 24.06 | $ | 24.41 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.08 | 0.22 | 0.26 | 0.17 | 0.12 | 0.23 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 10.91 | (3.11 | ) | (0.27 | ) | (0.90 | ) | 5.78 | 0.76 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 10.99 | (2.89 | ) | (0.01 | ) | (0.73 | ) | 5.90 | 0.99 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.27 | ) | (0.16 | ) | (0.14 | ) | (0.21 | ) | (0.19 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | (2.84 | ) | (2.49 | ) | (0.62 | ) | (1.15 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.20 | ) | (0.43 | ) | (3.00 | ) | (2.63 | ) | (0.83 | ) | (1.34 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 30.23 | $ | 19.44 | $ | 22.76 | $ | 25.77 | $ | 29.13 | $ | 24.06 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 56.81 | %C | (13.06 | )% | 1.93 | % | (3.03 | )% | 24.70 | % | 4.49 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 266,451,694 | $ | 170,726,299 | $ | 254,599,477 | $ | 342,125,601 | $ | 379,409,116 | $ | 296,082,333 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.89 | %D | 0.89 | % | 0.90 | % | 0.87 | % | 0.90 | % | 0.90 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.89 | %D | 0.89 | % | 0.90 | % | 0.87 | % | 0.90 | % | 0.90 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.64 | %D | 0.96 | % | 1.00 | % | 0.59 | % | 0.50 | % | 0.94 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.64 | %D | 0.96 | % | 1.00 | % | 0.59 | % | 0.50 | % | 0.94 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 29 | %C | 61 | % | 48 | % | 69 | % | 48 | % | 53 | % |
A | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC. |
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
48
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Investor Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016A | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.88 | $ | 22.12 | $ | 25.12 | $ | 28.46 | $ | 23.52 | $ | 23.86 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.09 | 0.21 | 0.22 | 0.11 | 0.11 | 0.19 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 10.57 | (3.08 | ) | (0.29 | ) | (0.89 | ) | 5.60 | 0.73 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 10.66 | (2.87 | ) | (0.07 | ) | (0.78 | ) | 5.71 | 0.92 | |||||||||||||||||||||||||||||||||||
|
|
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|
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|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.15 | ) | (0.21 | ) | (0.09 | ) | (0.07 | ) | (0.15 | ) | (0.11 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | (2.84 | ) | (2.49 | ) | (0.62 | ) | (1.15 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.15 | ) | (0.37 | ) | (2.93 | ) | (2.56 | ) | (0.77 | ) | (1.26 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 29.39 | $ | 18.88 | $ | 22.12 | $ | 25.12 | $ | 28.46 | $ | 23.52 | ||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 56.66 | %C | (13.30 | )% | 1.67 | % | (3.28 | )% | 24.43 | % | 4.27 | % | ||||||||||||||||||||||||||||||||
|
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|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 429,660,284 | $ | 302,626,954 | $ | 424,569,237 | $ | 538,602,473 | $ | 660,241,571 | $ | 617,552,712 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.15 | %D | 1.15 | % | 1.14 | % | 1.13 | % | 1.12 | % | 1.14 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.15 | %D | 1.15 | % | 1.14 | % | 1.13 | % | 1.12 | % | 1.14 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.39 | %D | 0.70 | % | 0.76 | % | 0.33 | % | 0.27 | % | 0.70 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.39 | %D | 0.70 | % | 0.76 | % | 0.33 | % | 0.27 | % | 0.70 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 29 | %C | 61 | % | 48 | % | 69 | % | 48 | % | 53 | % |
A | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC. |
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
49
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
Advisor ClassA | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016B | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.60 | $ | 21.79 | $ | 24.77 | $ | 28.09 | $ | 23.22 | $ | 23.60 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.05 | 0.15 | 0.14 | 0.06 | 0.03 | 0.12 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 10.44 | (3.01 | ) | (0.25 | ) | (0.88 | ) | 5.57 | 0.73 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 10.49 | (2.86 | ) | (0.11 | ) | (0.82 | ) | 5.60 | 0.85 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.12 | ) | (0.17 | ) | (0.03 | ) | (0.01 | ) | (0.11 | ) | (0.08 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | (2.84 | ) | (2.49 | ) | (0.62 | ) | (1.15 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.12 | ) | (0.33 | ) | (2.87 | ) | (2.50 | ) | (0.73 | ) | (1.23 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 28.97 | $ | 18.60 | $ | 21.79 | $ | 24.77 | $ | 28.09 | $ | 23.22 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 56.56 | %D | (13.40 | )% | 1.48 | % | (3.44 | )% | 24.26 | % | 4.01 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 56,690,428 | $ | 42,987,242 | $ | 61,618,406 | $ | 77,578,775 | $ | 98,718,359 | $ | 110,205,158 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.29 | %E | 1.25 | % | 1.34 | % | 1.28 | % | 1.30 | % | 1.31 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.29 | %E | 1.25 | % | 1.34 | % | 1.28 | % | 1.30 | % | 1.31 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.26 | %E | 0.60 | % | 0.56 | % | 0.18 | % | 0.11 | % | 0.53 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.26 | %E | 0.60 | % | 0.56 | % | 0.18 | % | 0.11 | % | 0.53 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 29 | %D | 61 | % | 48 | % | 69 | % | 48 | % | 53 | % |
A | On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class. |
B | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
See accompanying notes
50
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
A Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016A | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.47 | $ | 21.64 | $ | 24.65 | $ | 27.99 | $ | 23.14 | $ | 23.54 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.04 | 0.12 | 0.14 | 0.07 | 0.07 | 0.15 | ||||||||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 10.37 | (2.95 | ) | (0.24 | ) | (0.86 | ) | 5.53 | 0.73 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 10.41 | (2.83 | ) | (0.10 | ) | (0.79 | ) | 5.60 | 0.88 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.13 | ) | (0.18 | ) | (0.07 | ) | (0.06 | ) | (0.13 | ) | (0.13 | ) | ||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | (2.84 | ) | (2.49 | ) | (0.62 | ) | (1.15 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | (0.13 | ) | (0.34 | ) | (2.91 | ) | (2.55 | ) | (0.75 | ) | (1.28 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 28.75 | $ | 18.47 | $ | 21.64 | $ | 24.65 | $ | 27.99 | $ | 23.14 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnB | 56.55 | %C | (13.38 | )% | 1.56 | % | (3.37 | )% | 24.36 | % | 4.17 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 67,390,522 | $ | 46,067,043 | $ | 63,246,155 | $ | 66,380,615 | $ | 63,481,305 | $ | 63,277,387 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.25 | %D | 1.26 | % | 1.26 | % | 1.20 | % | 1.20 | % | 1.21 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.25 | %D | 1.26 | % | 1.26 | % | 1.20 | % | 1.20 | % | 1.21 | % | ||||||||||||||||||||||||||||||||
Net investment income, before expense reimbursements | 0.29 | %D | 0.59 | % | 0.64 | % | 0.25 | % | 0.20 | % | 0.64 | % | ||||||||||||||||||||||||||||||||
Net investment income, net of reimbursements | 0.29 | %D | 0.59 | % | 0.64 | % | 0.25 | % | 0.20 | % | 0.64 | % | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 29 | %C | 61 | % | 48 | % | 69 | % | 48 | % | 53 | % |
A | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC. |
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
51
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
C Class | ||||||||||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | |||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016A | ||||||||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.47 | $ | 20.51 | $ | 23.60 | $ | 26.98 | $ | 22.39 | $ | 22.84 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||
Net investment (loss) | (0.09 | ) | (0.17 | ) | (0.01 | )B | (0.08 | ) | (0.14 | ) | (0.02 | ) | ||||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 9.88 | (2.66 | ) | (0.24 | ) | (0.81 | ) | 5.35 | 0.72 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total income (loss) from investment operations | 9.79 | (2.83 | ) | (0.25 | ) | (0.89 | ) | 5.21 | 0.70 | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | - | (0.05 | ) | - | - | - | - | |||||||||||||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | (2.84 | ) | (2.49 | ) | (0.62 | ) | (1.15 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total distributions | – | (0.21 | ) | (2.84 | ) | (2.49 | ) | (0.62 | ) | (1.15 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Net asset value, end of period | $ | 27.26 | $ | 17.47 | $ | 20.51 | $ | 23.60 | $ | 26.98 | $ | 22.39 | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Total returnC | 56.04 | %D | (14.00 | )% | 0.85 | % | (3.89 | )% | 23.39 | % | 3.42 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 11,806,804 | $ | 8,057,935 | $ | 12,619,613 | $ | 13,480,297 | $ | 15,335,554 | $ | 11,938,196 | ||||||||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 1.96 | %E | 1.96 | % | 1.95 | % | 1.86 | % | 1.96 | % | 1.96 | % | ||||||||||||||||||||||||||||||||
Expenses, net of reimbursements | 1.96 | %E | 1.96 | % | 1.95 | %F | 1.76 | % | 1.96 | % | 1.96 | % | ||||||||||||||||||||||||||||||||
Net investment (loss), before expense reimbursements | (0.43 | )%E | (0.10 | )% | (0.06 | )% | (0.41 | )% | (0.58 | )% | (0.12 | )% | ||||||||||||||||||||||||||||||||
Net investment (loss), net of reimbursements | (0.43 | )%E | (0.10 | )% | (0.06 | )% | (0.31 | )% | (0.58 | )% | (0.12 | )% | ||||||||||||||||||||||||||||||||
Portfolio turnover rate | 29 | %D | 61 | % | 48 | % | 69 | % | 48 | % | 53 | % |
A | On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC. |
B | Per share amounts have been calculated using the average shares method. |
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 | This ratio does not include a voluntary reimbursement of service fees as included in the prior year. |
See accompanying notes
52
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
R6 Class | ||||||||||||||||||||||||||||||||||||
Six Months 2021 | Year Ended October 31, | February 28, 2017 | ||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 19.75 | $ | 23.12 | $ | 26.14 | $ | 29.51 | $ | 28.03 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 0.09 | 0.22 | 0.26 | 0.22 | (0.00 | )B | ||||||||||||||||||||||||||||||
Net gains (losses) on investments (both realized and unrealized) | 11.10 | (3.14 | ) | (0.25 | ) | (0.94 | ) | 1.48 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total income (loss) from investment operations | 11.19 | (2.92 | ) | 0.01 | (0.72 | ) | 1.48 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.23 | ) | (0.29 | ) | (0.19 | ) | (0.16 | ) | - | |||||||||||||||||||||||||||
Distributions from net realized gains | - | (0.16 | ) | (2.84 | ) | (2.49 | ) | - | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total distributions | (0.23 | ) | (0.45 | ) | (3.03 | ) | (2.65 | ) | - | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Net asset value, end of period | $ | 30.71 | $ | 19.75 | $ | 23.12 | $ | 26.14 | $ | 29.51 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Total returnC | 56.92 | %D | (12.98 | )% | 2.01 | % | (2.93 | )% | 5.28 | %D | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
Ratios and supplemental data: |
| |||||||||||||||||||||||||||||||||||
Net assets, end of period | $ | 1,730,952,136 | $ | 1,187,578,766 | $ | 1,308,284,613 | $ | 902,241,051 | $ | 295,802,679 | ||||||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||||||||||||||
Expenses, before reimbursements | 0.78 | %E | 0.79 | % | 0.80 | % | 0.77 | % | 0.80 | %E | ||||||||||||||||||||||||||
Expenses, net of reimbursements | 0.78 | %E | 0.79 | % | 0.80 | % | 0.77 | % | 0.80 | %E | ||||||||||||||||||||||||||
Net investment income (loss), before expense reimbursements | 0.75 | %E | 1.06 | % | 1.08 | % | 0.66 | % | (0.04 | )%E | ||||||||||||||||||||||||||
Net investment income (loss), net of reimbursements | 0.75 | %E | 1.06 | % | 1.08 | % | 0.66 | % | (0.04 | )%E | ||||||||||||||||||||||||||
Portfolio turnover rate | 29 | %D | 61 | % | 48 | % | 69 | % | 48 | %F |
A | Commencement of operations. |
B | Amount represents less than $0.01 per share. |
C | Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. |
D | Not annualized. |
E | Annualized. |
F | Portfolio turnover rate is for the period from February 28, 2017 through October 31, 2017 and is not annualized. |
See accompanying notes
53
Disclosure Regarding Approval of Management and Investment Advisory Agreements (Unaudited)
Approval of Investment Advisory Agreement
At its June 3-4, 2020 meetings, the Board of Trustees (the “Board”) of American Beacon Funds (the “Trust”) considered the approval of a new investment advisory agreement among American Beacon Advisors, Inc. (“Manager”), Brandywine Global Investment Management, LLC (“Brandywine”), and the Trust, on behalf of the American Beacon Small Cap Value Fund (the “Fund”) (“New Agreement”). The Board was advised that Brandywine was expected to undergo a change of control in the third quarter of 2020, and that the change in control would result in an assignment and the automatic termination of the existing Investment Advisory Agreement among the Manager, Brandywine and the Trust, on behalf of the Fund (“Existing Agreement”).
Prior to the June 3-4, 2020 meetings, information was provided to the Board by Brandywine and the Manager regarding the change of control and the New Agreement. In addition, information was provided to the Board by Brandywine and the Manager prior to the Board’s May 14, 2020 and June 3-4, 2020 meetings in connection with the Board’s annual renewal of the Existing Agreement. In connection with its evaluation of the New Agreement, the Board considered, among other matters, that (1) the New Agreement would contain the same terms and conditions as the Existing Agreements, (2) the services to be provided by Brandywine to the Fund and the fee rates to be paid by the Fund to Brandywine would remain unchanged, and (3) the individuals who currently provide portfolio management services to the Funds would remain the same after the change of control. In addition, the Board considered certain information provided by Brandywine and the Manager in connection with the renewal of the Existing Agreement, in determining whether to approve the New Agreement.
Based on the foregoing considerations, the Board, including a majority of Trustees who are not “interested persons” of the Fund, the Manager or Brandywine, as that term is defined in the Investment Company Act of 1940, as amended, concluded that the approval of the New Agreement was in the best interests of the Fund and approved the New Agreement.
Approval of Change in Control of Investment Advisory Agreement
At its November 10-11, 2020 meetings, the Board of Trustees (“Board”) considered the approval of a new investment advisory agreement among American Beacon Advisors, Inc. (“Manager”), Barrow, Hanley, Mewhinney & Strauss, LLC (“Barrow”), and American Beacon Funds (“Trust”), on behalf of the American Beacon Small Cap Value Fund (the “Fund”) (“New Agreement”). The Board was advised that Barrow was expected to undergo a change of control later in the fourth quarter of 2020, and that the change in control would result in an assignment and the automatic termination of the existing Investment Advisory Agreement among the Manager, Barrow and the Trust, on behalf of the Fund (“Existing Agreement”).
Prior to the November 10-11, 2020 meetings, information was provided to the Board by Barrow and the Manager regarding the change of control and the New Agreement. In connection with its evaluation of the New Agreement, the Board considered, among other matters, that (1) the New Agreement would contain the same substantive terms and conditions as the Existing Agreement, (2) the services to be provided by Barrow to the Fund and the fee rates to be paid by the Fund to Barrow would remain unchanged, and (3) the individuals who currently provide portfolio management services to the Fund would remain the same after the change of control. In addition, the Board considered certain information provided by Barrow and the Manager in connection with the renewal of the Existing Agreement, in determining whether to approve the New Agreement.
Based on the foregoing considerations, the Board, including a majority of Trustees who are not “interested persons” of the Fund, the Manager or Barrow, as that term is defined in the Investment Company Act of 1940, as amended, concluded that the approval of the New Agreement was in the best interests of the Fund and approved the New Agreement.
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Disclosure Regarding Liquidity Risk Management Program
Rule 22e-4 under the Investment Company Act of 1940, as amended (“Rule 22e-4”), requires open-end registered investment companies (other than money market funds) to adopt and implement a written liquidity risk management program that is reasonably designed to assess and manage liquidity risk. The Fund has adopted a Liquidity Risk Management Program (the “Program”) that is designed to assess and manage liquidity risk, which is the risk that the Fund could not meet requests to redeem its shares without significant dilution of the remaining shareholders’ interests in the Fund. Pursuant to Rule 22e-4, the Program includes the following elements:
• | Assessment, management, and periodic review of liquidity risk; |
• | Classification of each of the Fund’s portfolio investments into one of four liquidity categories: highly liquid, moderately liquid, less liquid, and illiquid; |
• | Determination and review of a highly liquid investment minimum for any Fund that does not primarily hold assets that are highly liquid investments; |
• | Policies and procedures to respond to a shortfall in the highly liquid investment minimum, including associated reports to the Fund’s Board of Trustees (the “Board”) and the Securities and Exchange Commission (“SEC”); |
• | A prohibition against a Fund acquiring an illiquid investment if immediately after the acquisition the Fund would have more than 15% of its net assets invested in illiquid investments that are assets; |
• | Reporting of breaches of the illiquid investment prohibition to the Board and the SEC; and |
• | Policies and procedures regarding how and when a Fund will satisfy redemption requests by distributing portfolio securities or other assets. |
The Manager’s Liquidity Committee administers the Program and has provided quarterly reports to the Board regarding the Fund’s liquidity risk. In addition, at the Board’s March 3-4, 2021 meetings, the Board reviewed the Liquidity Committee’s written report (“Report”) that addressed the operation of the Program and assessed the adequacy and effectiveness of its implementation from January 1, 2020 through December 31, 2020 (the “review period”).
Key conclusions that the Liquidity Committee included in the Report are listed below:
• | The Program is reasonably designed to assess and manage the Fund’s liquidity risk. |
• | The operation of the Program was adequate during the review period. |
• | There were no material changes to the Program during the review period. |
• | The Fund included in this shareholder report was deemed to primarily hold assets that are highly liquid, and no highly liquid investment minimum was recommended. |
• | The Program was effectively implemented by the Liquidity Committee during the review period. |
• | Administration of the Program by the Liquidity Committee continues to be appropriate. |
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Delivery of Documents
Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
To obtain more information about the Fund:
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By E-mail: | On the Internet: | |
american_beacon.funds@ambeacon.com | Visit our website at www.americanbeaconfunds.com | |
By Telephone: Call (800) 658-5811 | By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 | |
Availability of Quarterly Portfolio Schedules | Availability of Proxy Voting Policy and Records | |
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the end of each fiscal quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month. | A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009. |
Fund Service Providers:
CUSTODIAN State Street Bank and Trust 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 and American Beacon Small Cap Value Fund are service marks of American Beacon Advisors, Inc.
SAR 04/21
ITEM 2. | CODE OF ETHICS. |
Not Applicable.
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not Applicable.
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not Applicable.
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not Applicable.
ITEM 6. | SCHEDULE OF INVESTMENTS. |
The schedules of investments for each series of the Trust are included in the shareholder reports presented in Item 1.
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not Applicable.
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not Applicable.
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not Applicable.
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
The Trust has made no material changes to the procedures by which shareholders may recommend nominees to the Trust’s Board of Trustees since the Trust last disclosed such procedures in Schedule 14A.
ITEM 11. | CONTROLS AND PROCEDURES. |
(a) Based upon an evaluation within 90 days of the filing date of this report, the principal executive and financial officers concluded that the disclosure controls and procedures of the Trust are effective.
(b) There were no changes in the Trust’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 DFR 270.30a-3(d)) that occurred during 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)(2) Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): American Beacon Funds
By /s/ Gene L. Needles, Jr. |
Gene L. Needles, Jr. |
President |
American Beacon Funds |
Date: July 7, 2021 |
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. | By /s/ Sonia L. Bates | |||
Gene L. Needles, Jr. | Sonia L. Bates | |||
President | Treasurer | |||
American Beacon Funds | American Beacon Funds | |||
Date: July 7, 2021 | Date: July 7, 2021 |