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)
4151 Amon Carter Boulevard, MD 2450
Fort Worth, Texas 76155
(Address of principal executive offices)-(Zip code)
WILLIAM F. QUINN, PRESIDENT
4151 Amon Carter Boulevard, MD 2450
Fort Worth, Texas 76155
(Name and address of agent for service)
Registrant's telephone number, including area code: (817) 967-3509
Date of fiscal year end: October 31, 2008
Date of reporting period: April 30, 2008
ITEM 1. REPORTS TO STOCKHOLDERS.
GUIDANCE | VISION | EXPERIENCE
(AMERICAN BEACON FUNDS(SM) LOGO)
(GRAPHIC)
SEMI-ANNUAL REPORT
April 30, 2008
INTERNATIONAL EQUITY FUND
ABOUT AMERICAN BEACON
Since 1986, American Beacon Advisors has offered a variety of products and
investment advisory services to numerous institutional and retail clients,
including a variety of mutual funds, corporate cash management, and separate
account management.
Our clients include defined benefit plans, defined contribution plans,
foundations, endowments, corporations, financial planners, and other
institutional investors. With American Beacon Advisors, you can put the
experience of a multi-billion dollar asset management firm to work for your
company.
CONTENTS
PRESIDENT'S MESSAGE................................................ 1
MARKET AND PERFORMANCE OVERVIEW.................................... 2
SCHEDULE OF INVESTMENTS............................................ 6
ADDITIONAL INFORMATION ............................................ Back Cover
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.
Investing in foreign equities entails additional risk not associated with
domestic equities, such as currency fluctuations, economic and political
instability and differences in accounting standards.
American Beacon Funds April 30, 2008
(PHOTO OF WILLIAM F. QUINN)
FELLOW SHAREHOLDERS,
I am pleased to present to you the American Beacon International Equity
Fund Semi-Annual Report for the six months ended April 30, 2008.
The American Beacon International Equity Fund-Institutional Class reported
a total return of -7.87% for this six-month period, with an expense ratio of
0.68% for its most recent fiscal year ended October 31, 2007.
The sub-prime mortgage crisis, rising oil and food prices globally all
contributed to a slowing economy that affected the developed international
equity markets negatively in the past six months. This was evident when the MSCI
EAFE Index reported a return of -9.21% for this period. During the period, the
uncertainties surrounding banks, investment banks and the entire financial
system have resulted in an extraordinary amount of volatility. We believe the
Fund's fundamental value investment philosophy and lower than average expense
ratio will continue to serve the Fund well over the longer term.
Please review the enclosed market overview, portfolio listings and detailed
financial data. As always, we welcome the opportunity to serve your financial
needs. To obtain further details about the American Beacon Funds family or to
access your account information, please visit our website at
www.americanbeaconfunds.com. Thank you for your continued confidence in the
American Beacon International Equity Fund.
Sincerely,
/s/ William F. Quinn
William F. Quinn
President
American Beacon Funds
1
INTERNATIONAL EQUITY MARKET OVERVIEW
APRIL 30, 2008 (UNAUDITED)
For the six months ended April 30, 2008, the MSCI EAFE Index produced a
negative return of -9.21% in U.S. dollar terms. This contrasts with an extended
period of exceptional performance from international equity markets from the
lows of March 31, 2003 through the peak of October 31, 2007. For that period,
the MSCI EAFE Index generated 28% annualized returns, which was in part due to
the tail wind of a depreciating U.S. dollar. Since last summer, however,
investors have turned cautious, seeking shelter from slowing global economic
growth, rising inflationary pressures, and persistent turmoil in the
U.S.-originated, mortgage-related credit crunch. The first three months of 2008,
in fact, delivered the worst quarterly performance for international equity
markets in the past five years. Unprecedented monetary policy responses
eventually brought financial stability and averted a more serious global credit
crisis. This policy relief, led by the U.S. Federal Reserve (the "Fed") and
Treasury stopped the hemorrhaging of global equity markets late in the month of
March 2008, and equity markets rebounded strongly in April. Returns during the
past six months were further enhanced by continued U.S. dollar weakness, which
was due to further slowing in the U.S. economy and negative real interest rates.
Every stock market in the MSCI EAFE benchmark delivered negative
performance during the six-month period ending April 30, 2008. Only two sectors
managed to escape the wrath of poor equity performance during this period:
Energy and Materials. Crude oil continued its meteoric rise to nearly $120 per
barrel before settling to $113.46 at April month end. Global inflationary
expectations have increased as food, the most fundamental commodity, rose
dramatically in price. Trade restrictions, drought, and alternative energy uses
drove futures prices higher, especially for grains, oilseeds, and specialty
crops. In contrast, the Financials, Consumer Discretionary, Consumer Staples,
Information Technology, and Telecommunication Services sectors all produced
double-digit declines over the trailing six months. By the end of March,
investor sentiment once again turned dramatically--this time for the
better--with an expectation that the U.S.-led financial crisis would be less
severe than originally estimated. As a beneficiary of investor optimism, the
Financial sector of the MSCI EAFE Index returned over 18% from the mid-March
lows through the end of April.
The International Monetary Fund ("IMF") reduced its estimate for U.S.
economic growth for 2008 to 0.5%, lowering the 1.5% forecast given in January of
this year. The IMF also reduced its global growth forecast to 3.7% for 2008 from
4.1%. At the regularly scheduled meeting on March 18th, the Fed cut the target
Federal Funds rate by 0.75% to 2.25% stating that "the outlook for economic
activity has weakened further." At its next meeting at the end of April, the Fed
lowered the targeted Federal Funds and the discount rates by 0.25% and sent a
message that both the cumulative effects of past policy decisions and inflation
are being watched closely. U.S. consumer prices remained unchanged from January
to February, but were 4.0% higher than a year earlier. Consumer prices in
Britain rose by 2.5% for the 12 months ended in February, up from 2.2% in the
year through January. In the Euro area, consumer prices rose by 3.3% for the 12
months ended in February. Eurozone statistics reflect decelerating growth, but
elevated prices remain the European Central Bank's primary concern and likely
will delay monetary easing. Unemployment in the European Union continued its
downward trend, reaching 7.1% in January and February. The strong euro and yen
are providing significant headwinds to non-hedged exporters based in Europe and
Japan. Canadian unemployment reached a 33-year low of 5.8% in February while its
annualized consumer price index dropped to 1.8%. With over 70% of global Gross
Domestic Product accounted for by the developed countries, G-7 economic slowing
should lessen the global demand for commodities, including metals, grains, and
energy.
2
PERFORMANCE OVERVIEW
AMERICAN BEACON INTERNATIONAL EQUITY FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Institutional Class of the International Equity Fund returned -7.87%
for the six months ended April 30, 2008. The Fund outperformed the MSCI EAFE
Index ("Index") return of -9.21% and the Lipper International Funds Index return
of -9.66% for the period.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08
----------------------------------------
6 MONTHS* 1 YEAR 5 YEARS 10 YEARS
--------- ------ ------- --------
Institutional Class(1, 4) ....... -7.87% -1.48% 20.46% 8.23%
PlanAhead Class(1, 4) ........... -7.99% -1.77% 20.17% 7.99%
Service Class(1, 2, 4) .......... -8.05% -1.99% 19.84% 7.85%
AMR Class(1, 4) ................. -7.72% -1.23% 20.79% 8.51%
Lipper Int'l. Funds Index(3) .... -9.66% 1.36% 20.72% 7.33%
MSCI EAFE Index (3) ............. -9.21% -1.78% 20.42% 6.66%
* Not annualized
1. Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares.
2. Fund performance for the ten-year period represents the total returns
achieved by the PlanAhead Class from 4/30/98 up to 5/1/03, the inception
date of the Service Class, and the returns of the Service Class since its
inception. Expenses of the Service Class are higher than those of the
PlanAhead Class. As a result, total returns shown may be higher than they
would have been had the Service Class been in existence since 4/30/98. A
portion of the fees charged to the Service Class of the Fund has been
waived. Performance prior to waiving fees was lower than the actual returns
shown.
3. The Lipper International Funds Index tracks the results of the 30 largest
mutual funds in the Lipper International Funds category. Lipper is an
independent mutual fund research and ranking service. One cannot directly
invest in an index. The MSCI EAFE Index is a market capitalization weighted
index of international stock performance composed of equities from
developed markets excluding the U.S. and Canada.
4. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional, PlanAhead, Service and AMR Class
shares was 0.68%, 0.93%, 1.15% and 0.42%, respectively. The expense ratios
above may vary from the expense ratios presented in other sections of this
report that are based on expenses incurred during the period covered by
this report.
The Fund outperformed the Index by 1.34% over the six-month period due to
stock selection and country allocation.
Country allocation benefited the Fund, primarily through underweighting
Australia (down approximately 14%), and overweighting the Netherlands (down over
5%). These positions compensated for value lost from investing in South Korea
(down nearly 18%) and underweighting Japan (down over 6%).
Stock selection had a significantly positive impact overall, specifically
in South Korea, the Netherlands, Germany, and Sweden, while stock selections in
Norway detracted from performance. In South Korea, Samsung Electronics (up
16.1%) and LG Electronics (up 49.7%) benefited performance. Unilever (up 4.9%)
in the Netherlands, Deutsche Post (up 3.1%) and E.ON (up 4.3%) in Germany, and
Atlas Copco (down 0.7%) in Sweden also contributed to the relative
outperformance. Investment in energy stock Aker Solutions (down 24.6%) hurt
performance in Norway.
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.
3
PERFORMANCE OVERVIEW
AMERICAN BEACON INTERNATIONAL EQUITY FUND(SM)
APRIL 30, 2008 (UNAUDITED)
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
BP plc .......................... 2.4%
Sanofi-Aventis S.A. ............. 2.3%
Siemens AG ...................... 2.2%
E.ON AG ......................... 1.9%
Total S.A. ...................... 1.9%
Vodafone Group plc .............. 1.9%
Deutsche Post AG ................ 1.8%
Royal Dutch Shell plc ........... 1.8%
Novartis AG ..................... 1.7%
UniCredit S.p.A. ................ 1.6%
SECTOR ALLOCATION
% OF
EQUITIES
----------
Financials ...................... 24.3%
Consumer Discretionary .......... 13.2%
Industrials ..................... 12.5%
Energy .......................... 10.8%
Telecommunication Services ...... 8.8%
Consumer Staples ................ 8.2%
Health Care ..................... 7.7%
Materials ....................... 6.0%
Information Technology .......... 4.4%
Utilities ....................... 4.1%
REGIONAL ALLOCATION*
(PIE CHART)
Central America 0.4%
Europe 76.8%
Pacific Rim 20.4%
North America 2.4%
* Shown as a percentage of equities
4
FUND EXPENSES
AMERICAN BEACON INTERNATIONAL EQUITY FUND(SM)
APRIL 30, 2008 (UNAUDITED)
FUND EXPENSE EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, such as redemption fees, and (2) ongoing costs, including management
fees, administrative service fees, distribution (12b-1) fees, and other Fund
expenses. The examples below 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, 2007
through April 30, 2008.
ACTUAL EXPENSES
The "Actual" lines of the table provide information about actual account
values and actual expenses. You may use the information in this line, 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 = 8.6), then multiply the result by the number
in the first line under the heading "Expenses Paid During Period" to estimate
the expenses you paid on your account during this period. Shareholders of the
PlanAhead and Institutional Classes that invest in the Fund through an IRA may
be subject to a custodial IRA fee of $12 that is typically deducted each
December. If your account was subject to a custodial IRA fee during the period,
your costs would have been $12 higher.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The "Hypothetical" lines of the table provide information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed 5% per year rate of return before expenses (not the
Fund's actual return). You may compare the ongoing costs of investing in the
Fund with other funds by contrasting this 5% hypothetical example and the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. Shareholders
of the PlanAhead and Institutional Classes that invest in the Fund through an
IRA may be subject to a custodial IRA fee of $12 that is typically deducted each
December. If your account was subject to a custodial IRA fee during the period,
your costs would have been $12 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 redemption fees. Similarly, the expense examples for other funds
do not reflect any transaction costs charged by those funds, such as sales
charges (loads), redemption fees or exchange fees. Therefore, the "Hypothetical"
lines of the table are useful in comparing ongoing costs only and will not help
you determine the relative total costs of owning different funds. If you were
subject to any transaction costs during the period, your costs would have been
higher.
Beginning Ending
Account Account Expenses Paid
Value Value During Period*
11/1/07 4/30/08 11/1/07-4/30/08
--------- --------- ---------------
INSTITUTIONAL CLASS
Actual ............... $1,000.00 $ 921.30 $3.15
Hypothetical ......... $1,000.00 $1,021.58 $3.32
(5% return before expenses)
PLANAHEAD CLASS
Actual ............... $1,000.00 $ 920.09 $4.39
Hypothetical ......... $1,000.00 $1,020.29 $4.62
(5% return before expenses)
SERVICE CLASS
Actual ............... $1,000.00 $ 919.50 $5.49
Hypothetical ......... $1,000.00 $1,019.14 $5.77
(5% return before expenses)
AMR CLASS
Actual ............... $1,000.00 $ 922.77 $1.91
Hypothetical ......... $1,000.00 $1,022.87 $2.01
(5% return before expenses)
* Expenses are equal to the Fund's annualized expense ratios for the
six-month period of 0.66%, 0.92%, 1.15% and 0.40% for the Institutional,
PlanAhead, Service and AMR 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 (182) by days in the
year (366) to reflect the half-year period.
5
AMERICAN BEACON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
----------- ----------
(DOLLARS IN THOUSANDS)
AUSTRALIA - 0.84%
COMMON STOCKS - 0.84%
Insurance Australia Group Ltd. ................... 1,634,781 $ 6,710
National Australia Bank Ltd. ..................... 342,730 9,769
Suncorp-Metway Ltd. .............................. 436,944 5,627
----------
TOTAL AUSTRALIA ..................................... 22,106
----------
AUSTRIA - 0.20%
COMMON STOCKS - 0.20%
Telekom Austria AG ............................... 214,770 5,315
----------
BELGIUM - 0.97%
COMMON STOCKS - 0.97%
Delhaize Group ................................... 148,220 12,923
Fortis Bank N.V. ................................. 459,700 12,569
----------
TOTAL BELGIUM ....................................... 25,492
----------
CANADA - 2.27%
COMMON STOCKS - 2.27%
Husky Energy, Inc. + ............................. 138,160 6,239
Jean Coutu Group PJC, Inc. ....................... 371,200 3,483
Manulife Financial Corp. + ....................... 316,123 12,358
Precision Drilling Trust ......................... 565,284 14,145
TELUS Corp. ...................................... 516,074 23,245
----------
TOTAL CANADA ........................................ 59,470
----------
DENMARK - 0.37%
COMMON STOCKS - 0.37%
Vestas Wind Systems A/S ## ....................... 89,236 9,784
----------
FINLAND - 1.67%
COMMON STOCKS - 1.67%
Nokia Oyj ........................................ 364,900 11,236
Stora Enso Oyj ................................... 213,542 2,648
Stora Enso Oyj, A Shares ......................... 68,102 845
Stora Enso Oyj, R Shares ......................... 232,400 2,888
UPM-Kymmene Oyj ..................................... 1,356,694 26,311
----------
TOTAL FINLAND ....................................... 43,928
----------
FRANCE - 13.48%
COMMON STOCKS - 13.48%
Accor S. A. ...................................... 153,690 12,791
AXA S.A. + ....................................... 913,738 34,107
BNP Paribas ...................................... 210,308 22,741
Compagnie Generate des Etablissements Michelin ... 95,590 8,772
Credit Agricole S.A. ............................. 384,400 12,995
Electricite de France ............................ 127,258 13,353
France Telecom S.A. .............................. 1,289,858 40,603
SHARES VALUE
----------- ----------
(DOLLARS IN THOUSANDS)
Gaz de France S.A. ............................... 212,500 $ 14,049
Groupe Danone .................................... 93,600 8,307
Public's Groupe S.A. ............................. 267,015 10,819
Sanofi-Aventis S.A. .............................. 765,497 59,944
Societe Generale ................................. 39,300 4,612
Societe Generale ## .............................. 9,825 1,138
Suez S.A. ........................................ 116,110 8,249
Technip S.A. ..................................... 279,983 25,951
Thomson S.A. ..................................... 361,550 2,315
Total S.A. ....................................... 597,776 50,347
VINCI S.A. ....................................... 308,839 22,873
----------
TOTAL FRANCE ........................................ 353,966
----------
GERMANY -10.21%
COMMON STOCKS - 9.71%
adidas AG ........................................ 112,000 7,168
Allianz AG ....................................... 37,902 7,749
Bayer AG + ....................................... 174,807 14,958
Bayerische Motoren Werke AG ...................... 247,420 13,618
Celesio AG ## + .................................. 260,090 11,188
Continental AG + ................................. 41,792 4,929
Daimler AG ....................................... 113,100 8,818
Deutsche Post AG ................................. 1,481,529 46,336
E.ON AG + ........................................ 249,123 50,845
Infineon Technologies AG ......................... 684,640 6,425
Merck KGAA ....................................... 60,560 8,625
Muenchener Rueckversicherungs-Gesellschaft AG .... 47,997 9,313
SAP AG ........................................... 149,300 7,551
Siemens AG ....................................... 487,198 57,489
----------
TOTAL COMMON STOCKS ................................. 255,012
----------
PREFERRED STOCKS - 0.50%
Henkel AG & Co. KGaA ............................. 309,010 13,196
----------
TOTAL GERMANY ....................................... 268,208
----------
GREECE - 0.84%
COMMON STOCKS - 0.84%
National Bank of Greece S.A ...................... 83,600 4,642
OPAP S.A. ........................................ 134,554 5,253
Public Power Corp. S.A ........................... 289,480 12,240
----------
TOTAL GREECE ........................................ 22,135
----------
HONG KONG/CHINA - 1.24%
COMMON STOCKS - 1.24%
Cheung Kong Holdings Ltd. ........................ 501,500 7,812
Hutchison Whampoa Ltd. ........................... 199,000 1,947
Swire Pacific Ltd. ............................... 957,100 11,188
See accompanying notes
6
AMERICAN BEACON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ----------
(DOLLARS IN THOUSANDS)
Yue Yuen Industrial Holdings Ltd. ................ 3,777,667 $ 11,489
----------
TOTAL HONG KONG/CHINA ............................... 32,436
----------
IRELAND - 2.01%
COMMON STOCKS - 2.01%
Allied Irish Banks plc ........................... 660,698 13,927
C&C Group plc .................................... 665,777 4,553
CRH plc .......................................... 437,423 16,700
CRH plc, ADR ..................................... 231,325 8,871
Smurfit Kappa Group plc .......................... 688,413 8,600
----------
TOTAL IRELAND ....................................... 52,651
----------
ITALY - 3.65%
COMMON STOCKS - 3.65%
Eni S.p.A. + ..................................... 668,511 25,825
Mediaset S.p.A. + ................................ 1,740,180 15,936
Telecom Italia S.p.A. ............................ 5,381,829 11,361
UniCredit S.p.A. + ............................... 5,602,675 42,692
----------
TOTAL ITALY ......................................... 95,814
----------
JAPAN - 12.66%
COMMON STOCKS - 12.66%
Aeon Co. Ltd. .................................... 977,600 14,262
Canon, Inc. ...................................... 91,800 4,591
Chiyoda Corp. + .................................. 739,000 5,558
Chuo Mitsui Trust Holdings, Inc. ................. 1,093,400 7,771
Daito Trust Construction Co. Ltd. ................ 184,500 8,588
East Japan Railway Co. ........................... 783 6,242
FUJIFILM Holdings Corp. .......................... 114,400 4,390
Haseko Corp. ..................................... 6,142,518 8,861
Hitachi Ltd. ..................................... 685,500 4,621
Honda Motor Co. Ltd. ............................. 586,600 18,616
HOYA Corp. ....................................... 147,700 4,091
INPEX Holdings, Inc. ............................. 478 5,332
Japan Tobacco, Inc. .............................. 1,605 7,810
JS Group Corp. ................................... 491,200 8,507
JSR Corp. ........................................ 204,100 4,603
Konica Minolta Holdings, Inc. .................... 499,500 7,474
Mitsubishi Gas Chemical Co., Inc. ................ 387,000 2,654
Mitsubishi UFJ Financial Group, Inc. ............. 3,454,000 37,999
NGK Spark Plug Co. Ltd. + ........................ 899,000 12,078
Nidec Corp. ...................................... 90,100 6,784
Nintendo Co. Ltd. ................................ 20,500 11,257
Sankyo Co. Ltd. .................................. 243,400 14,630
Sekisui House Ltd. ............................... 864,600 8,223
Shin-Etsu Chemical Company Ltd. .................. 85,200 5,260
Sony Corp. ....................................... 108,402 4,983
Sony Financial Holdings, Inc. .................... 3,261 13,767
Sumitomo Corp. ................................... 810,300 10,886
SHARES VALUE
----------- ----------
(DOLLARS IN THOUSANDS)
Sumitomo Mitsui Financial Group, Inc. ............ 864 $ 7,436
Sumitomo Trust and Banking Co. Ltd. .............. 1,190,400 10,704
Takeda Pharmaceutical Co. Ltd. ................... 497,400 26,261
THK Co. Ltd. ..................................... 589,500 13,067
Toyota Motor Corp. ............................... 274,800 13,927
Yamaha Motor Co. Ltd. ............................ 574,300 11,073
----------
TOTAL JAPAN ......................................... 332,306
----------
MEXICO - 0.25%
COMMON STOCKS - 0.25%
Telefonos de Mexico, S.A.B. de C.V., ADR ......... 182,990 6,599
----------
NETHERLANDS - 6.52%
COMMON STOCKS - 6.52%
Akzo Nobel N.V. .................................. 228,212 19,417
Heineken N.V. .................................... 81,590 4,763
ING Groep N.V. ................................... 865,429 33,121
Koninklijke Philips Electronics N.V............... 704,260 26,557
Reed Elsevier N.V. ............................... 857,900 16,303
SBM Offshore N.V. ................................ 273,650 10,494
TNT N.V. ......................................... 694,251 27,047
Unilever N.V. .................................... 848,091 28,604
VediorN.V. ....................................... 178,090 4,950
----------
TOTAL NETHERLANDS ................................... 171,256
----------
NORWAY - 1.14%
COMMON STOCKS - 1.14%
Aker Kvaener ASA ................................. 446,850 11,437
Stolt-Nielsen S.A. + ............................. 213,884 4,791
Telenor ASA ...................................... 678,970 13,742
----------
TOTAL NORWAY ..................................... 29,970
----------
PORTUGAL - 0.36%
COMMON STOCKS - 0.36%
Portugal Telecom, SGPS, S.A. ..................... 792,250 9,433
----------
SINGAPORE - 2.49%
COMMON STOCKS - 2.49%
DBS Group Holdings Ltd. .......................... 2,361,455 34,585
Flextronics International Ltd. ## ................ 899,000 9,341
Singapore Telecommunications Ltd. ................ 7,535,000 21,448
----------
TOTAL SINGAPORE ..................................... 65,374
----------
SOUTH KOREA - 2.21%
COMMON STOCKS - 2.21%
Kookmin Bank, ADR ................................ 189,010 13,183
Korea Electric Power Corp. ....................... 86,860 2,924
LG Electronics, Inc. ............................. 76,760 11,981
Samsung Electronics Co. Ltd. ..................... 23,701 16,807
See accompanying notes
7
AMERICAN BEACON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ----------
(DOLLARS IN THOUSANDS)
Samsung Electronics Co. Ltd., GDR ++ ............. 12,000 $ 4,272
Shinhan Financial Group Co. Ltd. ................. 151,404 8,743
----------
TOTAL SOUTH KOREA ................................... 57,910
----------
SPAIN - 2.89%
COMMON STOCKS - 2.89%
Banco Popular Espanol S.A. ....................... 410,355 7,099
Banco Santander S.A. ............................. 440,420 9,525
Banco Santander S.A., GDR ........................ 560,544 12,137
Repsol YPF S.A. .................................. 273,340 11,114
Telefonica S.A. .................................. 1,240,431 35,968
----------
TOTAL SPAIN ......................................... 75,843
----------
SWEDEN - 2.82%
COMMON STOCKS - 2.82%
Atlas Copco AB + ................................. 1,569,240 25,294
Nordea Bank AB ................................... 617,020 10,154
Securitas AB + ................................... 205,050 2,646
Telefonaktiebolaget LM Ericsson .................. 14,089,500 35,960
----------
TOTAL SWEDEN ........................................ 74,054
----------
SWITZERLAND - 7.15%
COMMON STOCKS - 7.15%
AdeccoS.A. + ..................................... 138,320 8,297
Ciba Specialty Chemicals Holding, Inc. + ......... 270,120 9,015
Credit Suisse Group + ............................ 225,672 12,567
Lonza Group AG ................................... 67,200 9,184
Nestle S.A. ...................................... 72,604 34,825
Novartis AG ...................................... 902,091 45,882
Roche Holding Ltd. ............................... 57,600 9,606
Swiss Reinsurance + .............................. 323,558 26,980
Swisscom AG + .................................... 14,100 5,035
UBS AG ## ........................................ 294,530 9,949
UBS AG, Right ## ................................. 294,530 497
Zurich Financial Services AG ..................... 51,911 15,894
----------
TOTAL SWITZERLAND ................................... 187,731
----------
UNITED KINGDOM - 19.42%
COMMON STOCKS - 19.42%
Anglo American plc ............................... 39,950 2,597
Aviva plc ........................................ 1,797,707 22,501
BAE Systems plc .................................. 4,369,831 40,554
BP plc ........................................... 5,118,496 62,182
British American Tobacco plc ..................... 782,679 29,521
British Sky Broadcasting Group plc ............... 914,390 9,909
Cadbury Schweppes plc ............................ 827,350 9,590
Centrica plc ..................................... 1,725,480 10,086
Compass Group plc ................................ 779,290 5,284
Debenhams plc + .................................. 3,696,366 4,722
SHARES VALUE
----------- ----------
(DOLLARS IN THOUSANDS)
Diageo plc ....................................... 334,043 $ 6,861
GlaxoSmithKline plc .............................. 1,456,006 32,453
HBOS plc ......................................... 925,416 8,657
HSBC Holdings plc ................................ 2,282,697 39,740
Imperial Tobacco Group plc ....................... 173,540 8,347
Kingfisher plc ................................... 1,331,160 3,515
Lloyds TSB Group plc ............................. 600,600 5,165
National Grid plc ................................ 318,881 4,441
Old Mutual plc ................................... 3,037,599 7,743
Pearson plc ...................................... 566,810 7,404
Prudential plc ................................... 531,800 7,296
Reckitt Benckiser Group plc ...................... 135,100 7,892
Rolls-Royce Group plc ............................ 98,260,230 9,660
Royal Bank of Scotland plc ....................... 2,696,104 18,494
Royal Dutch Shell plc, A Shares .................. 511,404 20,618
Royal Dutch Shell plc, B Shares .................. 636,085 25,484
Smiths Group plc ................................. 292,020 5,623
Standard Chartered plc ........................... 177,350 6,326
Unilever plc ..................................... 1,029,609 34,843
Vodafone Group plc ............................... 15,559,134 49,591
Yell Group plc ................................... 811,330 2,678
----------
TOTAL UNITED KINGDOM ................................ 509,777
----------
UNITED STATES - 0.29%
COMMON STOCKS - 0.29%
Invesco Ltd. ..................................... 169,965 4,371
News Corp. ....................................... 182,280 3,263
----------
TOTAL UNITED STATES ................................. 7,634
----------
SHORT TERM INVESTMENTS - 3.03%
American Beacon Money Market Select Fund # ....... 79,540,346 79,540
----------
SECURITIES LENDING COLLATERAL - 11.21%
American Beacon Cash Plus Trust # ................ 115,000,000 115,000
American Beacon Money Market Select Fund # ....... 179,427,350 179,427
----------
TOTAL SECURITIES LENDING COLLATERAL ................. 294,427
----------
TOTAL INVESTMENTS 110.19% - (Cost $2,392,058) ....... 2,893,159
LIABILITIES, NET OF OTHER ASSETS - (10.19%) ......... (267,483)
----------
TOTAL NET ASSETS - 100.00% .......................... $2,625,676
==========
See accompanying notes
8
AMERICAN BEACON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
Percentages are stated as a percent of net assets.
## Non-income producing security.
+ All or a portion of this security is on loan at April 30, 2008.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $4,272 or 0.16% of net
assets. The Fund has no right to demand registration of these securities.
# The Fund/Trust is affiliated by having the same investment advisor.
FUTURES CONTRACTS
(DOLLARS IN THOUSANDS)
UNREALIZED
NUMBER OF EXPIRATION MARKET APPRECIATION/
CONTRACTS DATE VALUE (DEPRECIATION)
--------- ---------- ------- --------------
Australia SPI Index ........ 47 Jun 2008 $ 6,202 $ 54
Canada S&PCDA 60 Index ..... 53 Jun 2008 8,705 108
France CAC 40 Index ........ 134 Jun 2008 10,228 306
Germany DAX Index .......... 31 Jun 2008 8,435 265
Hang Seng Index ............ 13 May 2008 2,146 18
Italy MIB 30 Index ......... 14 Jun 2008 3,608 123
Netherlands 200 AEX Index .. 18 May 2008 2,658 100
Spain IBEX 35 Index ........ 19 May 2008 4,052 71
Sweden OMX Index ........... 134 May 2008 2,189 33
Tokyo FE TOPIX Index ....... 149 Jun 2008 19,290 924
UK FTSE 100 Index .......... 168 Jun 2008 20,287 447
------- ------
$87,800 $2,449
======= ======
See accompanying notes
9
AMERICAN BEACON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
(dollars in thousands)
SETTLEMENT MARKET UNREALIZED
DATE VALUE GAIN/(LOSS)
---------- -------- -----------
CONTRACTS TO DELIVER
4,181 Australian Dollar .......................... 6/13/2008 $ 3,923 $ (69)
4,286 Canadian Dollar ............................ 6/13/2008 4,254 (24)
10,476 Euro Currency .............................. 6/13/2008 16,326 139
1,171,187 Japanese Yen ............................... 6/13/2008 11,293 304
5,594 Pound Sterling ............................. 6/13/2008 11,089 (51)
9,443 Swedish Krona .............................. 6/13/2008 1,574 13
3,492 Swiss Franc ................................ 6/13/2008 3,342 101
-------- -----
TOTAL CONTRACTS TO DELIVER
(RECEIVABLE AMOUNT $52,214) .......................... $ 51,801 $ 413
-------- -----
CONTRACTS TO RECEIVE
9,635 Australian Dollar .......................... 6/13/2008 $ 9,040 $ 171
11,443 Canadian Dollar ............................ 6/13/2008 11,357 (52)
26,586 Euro Currency .............................. 6/13/2008 41,432 155
2,903,273 Japanese Yen ............................... 6/13/2008 27,994 (547)
14,566 Pound Sterling ............................. 6/13/2008 28,874 (110)
20,679 Swedish Krona .............................. 6/13/2008 3,446 37
9,638 Swiss Franc ................................ 6/13/2008 9,308 (186)
-------- -----
TOTAL CONTRACTS TO RECEIVE
(PAYABLE AMOUNT $131,983) ............................ $131,451 $(532)
-------- -----
NET CURRENCY FLUCTUATION ................................ $(119)
=====
SECTOR DIVERSIFICATION
Percent of
Net Assets
----------
Consumer Discretionary ............ 12.64%
Consumer Staples .................. 7.91%
Energy ............................ 10.35%
Financials ........................ 23.32%
Health care ....................... 7.39%
Industrials ....................... 11.98%
Information Technology ............ 4.25%
Materials ......................... 5.75%
Telecommunication Services ........ 8.47%
Utilities ......................... 3.89%
Short Term Investments ............ 14.24%
Liabilities, Net of Other Assets .. (10.19)%
------
100.00%
======
See accompanying notes
10
AMERICAN BEACON INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
ASSETS:
Investments in unaffiliated securities, at value (A C)................. $ 2,519,191
Investments in affiliated securities, at value (B)..................... 373,968
Foreign currency, at value (D)......................................... 4,458
Deposit with brokers for futures contracts ............................ 6,108
Receivable for investments sold ....................................... 7,875
Dividends and interest receivable ..................................... 15,449
Receivable for fund shares sold ....................................... 1,707
Receivable for tax reclaims ........................................... 404
Receivable for variation margin on open futures contracts ............. 123
Prepaid expenses ...................................................... 61
-----------
TOTAL ASSETS ....................................................... 2,929,344
-----------
LIABILITIES:
Payable for investments purchased ..................................... 3,535
Payable upon return of securities loaned .............................. 294,427
Payable for fund shares redeemed ...................................... 2,367
Management and investment advisory fees payable (Note 2) .............. 2,266
Administrative service and service fees payable ....................... 588
Net unrealized depreciation on foreign currency contracts ............. 119
Other liabilities ..................................................... 366
-----------
TOTAL LIABILITIES .................................................. 303,668
-----------
NET ASSETS ............................................................... $ 2,625,676
===========
ANALYSIS OF NET ASSETS:
Paid-in-capital ....................................................... 1,974,311
Undistributed net investment income ................................... 40,992
Accumulated net realized gain ......................................... 107,105
Unrealized appreciation of investments, futures contracts, and foreign
currency ........................................................... 503,268
-----------
NET ASSETS ............................................................... $ 2,625,676
===========
SHARES OUTSTANDING (NO PAR VALUE):
Institutional Class ................................................... 53,383,323
===========
PlanAhead Class ....................................................... 40,007,732
===========
Service Class ......................................................... 158,177
===========
AMR Class ............................................................. 26,504,004
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE:
Institutional Class ................................................... $ 21.93
===========
PlanAhead Class ....................................................... $ 21.66
===========
Service Class ......................................................... $ 21.54
===========
AMR Class ............................................................. $ 22.09
===========
- ----------
(A) Cost of investments in unaffiliated securities ...................... $ 2,018,090
(B) Cost of investments in affiliated securities ........................ $ 373,968
(C) Market value of securities on loan .................................. $ 297,965
(D) Cost of foreign currency ............................................ $ 4,469
See accompanying notes
11
AMERICAN BEACON INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (UNAUDITED) (IN THOUSANDS)
INVESTMENT INCOME:
Dividend income from unaffiliated securities (net of foreign taxes)* .. $ 43,541
Dividend income from affiliated securities ............................ 1,281
Interest income ....................................................... 184
Income derived from securities lending, net ........................... 744
---------
TOTAL INVESTMENT INCOME ......................................... 45,750
---------
EXPENSES:
Management and investment advisory fees (Note 2) ...................... 4,657
Administrative service fees (Note 2):
Institutional Class ................................................ 1,657
PlanAhead Class .................................................... 1,033
Service Class ...................................................... 5
Transfer agent fees:
Institutional Class ................................................ 56
PlanAhead Class .................................................... 76
AMR Class .......................................................... 9
Custody and fund accounting fees ...................................... 525
Professional fees ..................................................... 40
Registration fees and expenses ........................................ 41
Service fees:
PlanAhead Class (Note 2) ........................................... 1,033
Service Class (Note 2) ............................................. 5
Distribution fees - Service Class (Note 2) ............................ 5
Prospectus and shareholder reports .................................... 104
Other expenses ........................................................ 97
---------
TOTAL EXPENSES .................................................. 9,343
=========
NET INVESTMENT INCOME .................................................... 36,407
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments ........................................................ 55,767
Commission recapture (Note 1) ...................................... 22
Foreign currency transactions ...................................... 75,516
Futures contracts .................................................. (4,953)
Change in net unrealized appreciation or depreciation of:
Investments ........................................................ (462,280)
Foreign currency translations ...................................... 38,772
Futures contracts .................................................. (209)
---------
NET LOSS ON INVESTMENTS ......................................... (297,365)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................... $(260,958)
=========
* Foreign taxes ....................................................... $ 4,576
See accompanying notes
12
AMERICAN BEACON INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES OF NET ASSETS (IN THOUSANDS)
Six Months Year Ended
Ended October 31,
April 30, 2008 2007
-------------- -----------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income .......................................... $ 36,407 $ 78,060
Net realized gain on investments, futures contracts, and foreign
currency transactions ....................................... 126,352 314,273
Change in net unrealized appreciation or (depreciation) of
investments, futures contracts, and foreign currency
translations ................................................ (423,717) 217,790
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ............................................ (260,958) 610,123
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Institutional Class ......................................... (40,936) (31,129)
PlanAhead Class ............................................. (20,913) (14,581)
Service Class ............................................... (105) (64)
AMR Class ................................................... (18,454) (12,610)
Net realized gain on investments:
Institutional Class ......................................... (155,609) (114,385)
PlanAhead Class ............................................. (87,859) (59,491)
Service Class ............................................... (483) (327)
AMR Class ................................................... (63,681) (41,178)
---------- ----------
NET DISTRIBUTIONS TO SHAREHOLDERS ........................ (388,040) (273,765)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares .................................. 282,429 572,603
Reinvestment of dividends and distributions .................... 366,395 259,288
Cost of shares redeemed ........................................ (648,272) (783,879)
Redemption fees ................................................ 457 505
---------- ----------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS .......................................... 1,009 48,517
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ............................. (647,989) 384,875
---------- ----------
NET ASSETS:
Beginning of period ............................................ $3,273,665 2,888,790
---------- ----------
END OF PERIOD * ................................................ $2,625,676 $3,273,665
========== ==========
* Includes undistributed net investment income of ................. 40,992 $ 81,197
========== ==========
See accompanying notes
13
AMERICAN BEACON INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
American Beacon Funds (the "Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940 (the
"Act"), as amended, as a no load, diversified, open-end management investment
company. These financial statements and notes to the financial statements relate
to the American Beacon International Equity Fund (the "Fund"), a series of the
Trust.
American Beacon Advisors, Inc. (the "Manager") is a wholly-owned subsidiary
of AMR Corporation ("AMR"), the parent company of American Airlines, Inc.
("American"), and was organized in 1986 to provide business management,
advisory, administrative and asset management consulting services to the Trust
and other investors.
On April 16, 2008, AMR announced that it has reached a definitive agreement
to sell American Beacon Advisors, Inc. to Lighthouse Holdings, Inc., which is
owned by investment funds affiliated with Pharos Capital Group, LLC and TPG
Capital, two leading private equity firms. AMR expects to close the sale later
this year, subject to customary closing conditions as well as the approval of
the shareholders of the American Beacon family of mutual funds and consents from
other clients of the Manager.
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: OFFERED TO: SERVICE AND DISTRIBUTION FEES:
------ -------------------------------------- ----------------------------------
INSTITUTIONAL CLASS Investors making an initial investment Administrative Service Fee - 0.25%
of $2 million
PLANAHEAD CLASS General public and investors investing Administrative Service Fee - 0.25%
through an intermediary Service Fee - 0.25%
SERVICE CLASS Investors investing through an Administrative Service Fee - 0.25%
intermediary Service Fee - 0.25%
Distribution Fee - 0.25%
AMR CLASS Investors in the tax-exempt retirement N/A
and benefit plans of AMR Corporation
and its affiliates
Investment income, net capital gains (losses) and all expenses incurred by
the Fund are allocated based on the relative net assets of each class, except
for service fees and certain other fees and expenses related solely to one class
of shares.
Security Valuation
Investments are valued at the close of the New York Stock Exchange (the
"Exchange"), normally 4 p.m. ET, each day that the Exchange is open for
business. Equity securities for which market quotations are available are valued
at the last sale price or official closing price (closing bid price or last
evaluated quote if no sale has occurred) on the primary market or exchange on
which they trade.
Debt securities (other than short-term 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. When a price is unavailable from a
pricing service or when the price provided by the pricing service is deemed not
to represent fair value, the prices of debt securities may be determined using
quotes obtained from brokers.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation. Investment grade short-term
obligations with 60 days or less to maturity are valued using the amortized cost
method, which approximates market value.
14
AMERICAN BEACON INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Securities for which 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 of Trustees
(the "Board").
Most foreign markets close before the Exchange. Developments that could
affect the values of securities that occur between the close of a foreign market
and the close of the Exchange normally will not be reflected in security
valuations. If such developments are so significant that they will, in the
judgment of the pricing committee of the Fund, clearly and materially affect the
value of securities, the foreign market closing prices may be adjusted to
reflect the fair value of the securities as of the close of the Exchange, as
determined in good faith and pursuant to procedures approved by the Board.
Adjustments to closing prices to reflect fair value on affected foreign
securities may be provided by an independent pricing service.
Security Transactions and Investment Income
Security transactions are recorded on the trade date of the security
purchase or sale.
The Fund may purchase securities with delivery or payment to occur at a
later date. At the time the Fund enters into a commitment to purchase a
security, the transaction is recorded, and the value of the security is
reflected in the net asset value. The value of the security may vary with market
fluctuations.
Dividend income, net of foreign taxes, is recorded on the ex-dividend date
except certain dividends from foreign securities which are recorded as soon as
the information is available to the Fund. Interest income is earned from
settlement date, recorded on the accrual basis, and adjusted, if necessary, for
accretion of discounts and amortization of premiums. For financial and tax
reporting purposes, realized gains and losses are determined on the basis of
specific lot identification.
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 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 in the Fund's Statement of Operations.
Forward Foreign Currency Contracts
The Fund may enter into forward foreign currency contracts to hedge the
exchange rate risk on investment transactions or to hedge the value of Fund
securities denominated in foreign currencies. Forward foreign currency contracts
are valued at the forward exchange rate prevailing on the day of valuation. The
Fund bears the market risk that arises from changes in foreign exchange rates,
and accordingly, the unrealized gain (loss) on these contracts is reflected in
the accompanying financial statements. The Fund also bears the credit risk if
the counterparty fails to perform under the contract.
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
15
AMERICAN BEACON INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
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 5% of the face value of the futures contract. The initial margin
amount is reflected as a Deposit with broker for futures contracts 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.
Dividends to Shareholders
Dividends from net investment income of the Fund normally will be declared
and paid at least annually. Distributions, if any, of net realized capital gains
are generally paid at least annually and recorded on the ex-dividend date.
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 in the Fund's Statement
of Operations.
Allocation of Income, Expenses, Gains and Losses
Income, expenses (other than those attributable to a specific class), gains
and losses are allocated daily to each class of shares based upon the relative
proportion of net assets represented by such class. Operating expenses directly
attributable to a specific class are charged against the operations of that
class.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimated.
Redemption Fees
The Fund imposes a 2% redemption fee on shares held for less than 90 days.
The fee is deducted from the redemption proceeds and is intended to offset the
trading costs, market impact and other costs associated with short-term trading
activity in the Fund. The "first-in, first-out" method is used to determine the
holding period. The fee is allocated to all classes of the Fund pro-rata based
on their respective net assets.
Recently Issued Accounting Pronouncements
In September 2006, the FASB issued Statement on Financial Accounting
Standards No. 157, "Fair Value Measurements" ("FAS 157"). This standard
clarifies the definition of fair value for financial reporting, establishes a
framework for measuring fair value and requires additional disclosures about the
use of fair value measurements. FAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. As of April 30, 2008, the Manager does not believe
the
16
AMERICAN BEACON INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
adoption of FAS 157 will materially impact the amounts reported in the financial
statements; however, additional disclosures will be required about the inputs
used to develop the measurements of fair value.
Other
Under the Trust's organizational documents, its officers and directors are
indemnified against certain liability arising out of the performance of their
duties to the Trust. In the normal course of business, the Trust enters into
contracts that provide indemnification to the other party or parties against
potential costs or liabilities. The Trust's maximum exposure under these
arrangements is dependent on claims that may be made in the future and,
therefore, cannot be estimated. The Trust has had no prior claims or losses
pursuant to any such agreement.
2. TRANSACTIONS WITH AFFILIATES
Management Agreement
The Trust and the Manager are parties to a Management Agreement that
obligates the Manager to provide or oversee the provision of all administrative,
investment advisory, fund management and securities lending services. Investment
assets of the Fund are managed by multiple investment advisors that have entered
into separate investment advisory agreements with the Manager. As compensation
for performing the duties required under the Management Agreement, the Manager
receives from the Fund an annualized fee equal to 0.10% of the average daily net
assets plus amounts paid by the Manager to the investment advisors hired by the
Manager to direct investment activities of the Fund. Management fees paid during
the six months ended April 30, 2008 were as follows (dollars in thousands):
AMOUNTS PAID NET AMOUNTS
MANAGEMENT FEE MANAGEMENT TO INVESTMENT RETAINED BY
RATE FEE ADVISORS MANAGER
- -------------- ---------- ------------- -----------
0.25%-0.60% $4,657 $3,287 $1,370
As compensation for services provided by the Manager in connection with
securities lending activities, the lending Fund pays to the Manager, with
respect to cash collateral posted by borrowers, a fee up to 25% 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 when a borrower
posts collateral other than cash, a fee up to 25% of such loan fees. This fee is
netted against securities lending income in the Statement of Operations. During
the six months ended April 30, 2008 securities lending fees paid to the Manager
were $194,125.
Administrative Services Agreement
The Manager and the Trust entered into an Administrative Services Agreement
which obligates the Manager to provide or oversee administrative services to the
Fund. As compensation for performing the duties required under the
Administrative Services Agreement, the Manager receives an annualized fee of
0.25% of the average daily net assets of the Institutional, PlanAhead, and
Service Classes of the Fund.
Distribution Plans
The Fund, except for the Service Class of the Fund, has adopted a
"defensive" Distribution Plan (the "Plan") in accordance with Rule 12b-1 under
the Act, pursuant to which no fees may be charged to the Fund for distribution
purposes. However, the Plan authorizes the management and administrative service
fees received by the Manager and the investment advisors hired by the Manager to
be used for distribution purposes. Under this Plan, the Fund does not intend to
compensate the Manager or any other party, either directly or indirectly, for
the distribution of Fund shares.
17
AMERICAN BEACON INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
A separate Distribution Plan (the "Distribution Plan") has been adopted
pursuant to Rule 12b-1 under the Act for the Service Class of the Fund. Under
the Distribution Plan, as compensation for distribution assistance, the Manager
receives an annual fee of 0.25% of the average daily net assets of the Service
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 PlanAhead and Service
Classes. As compensation for performing the duties required under the Service
Plans, the Manager receives 0.25% of the average daily net assets of the
PlanAhead and Service Classes of the Fund.
Brokerage Commissions
Affiliated entities of an investment advisor to the Fund received net
commissions on purchases and sales of the Fund's portfolio securities totaling
$1,229 for the six months ended April 30, 2008.
Investment in Affiliated Funds
The Fund is permitted, pursuant to an exemptive order by the Securities and
Exchange Commission ("SEC") and procedures approved by the Board, to invest up
to 25% of its total assets in the American Beacon Money Market Select Fund (the
"Select Fund"). Cash collateral received by the Fund in connection with
securities lending may be invested in the Select Fund and the American Beacon
Cash Plus Trust (the "Cash Trust")(collectively, the "Affiliated Funds"). The
Fund and the Affiliated Funds have the same investment advisor and therefore,
are considered to be affiliated. The Manager serves as investment advisor to the
Affiliated Funds and receives from each Affiliated Fund an annualized fee up to
0.10% of its average daily net assets. During the six months ended April 30,
2008, the Manager earned fees from the Affiliated Funds totaling $30,851 on the
Fund's direct investment in the Affiliated Funds and $68,866 from securities
lending collateral invested in the Affiliated Funds.
Interfund Lending Program
Pursuant to an exemptive order by the SEC, the Fund, along with other
registered investment companies having management contracts with the Manager,
may participate in an interfund lending program as a borrower. This program
provides an alternative credit facility allowing the Fund to borrow from other
participating Funds. For the six months ended April 30, 2008, the Fund did not
utilize the credit facility.
Expense Reimbursement Plan
The Fund has adopted an Expense Reimbursement Plan whereby the Manager may
seek repayment of fees waived or expenses reimbursed for a period of up to three
years. However, reimbursement will occur only if the Class' average net assets
have grown or expenses have declined sufficiently to allow reimbursement without
causing its expense ratio to exceed the previously agreed upon contractual
expense limit. During the six months ended April 30, 2008, there were no
additional waived fees or reimbursed expenses subject to potential recovery.
Other
At April 30, 2008, AMR Corporation and subsidiary companies and employee
benefit trusts thereof owned 22% of the Fund's shares.
18
AMERICAN BEACON INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
3. FEDERAL INCOME AND EXCISE TAXES
It is the policy of the Fund to comply with the requirements of Subchapter
M of the Internal Revenue Code and to distribute substantially all net
investment income as well as any net realized capital gains on the sale of
investments. Therefore, no federal income or excise tax provision is required.
The Fund adopted the provisions of FASB Interpretation No. 48, "Accounting
for Uncertainties in Income Taxes" ("FIN48"), on January 1, 2007. FIN 48 sets
forth a minimum threshold for financial statement recognition of the benefit of
a tax position taken or expected to be taken in a tax return. The implementation
of FIN 48 did not result in any unrecognized tax benefits in the accompanying
financial statements. Each of the tax years in the three year period ended
October 31, 2007 remains subject to examination by the Internal Revenue Service.
If applicable, the Fund recognizes interest accrued related to unrecognized tax
benefits in interest expense and penalties in "Other expenses" on the Statement
of Operations.
Dividends are categorized in accordance with income tax regulations which
may treat certain transactions differently than U.S. generally accepted
accounting principles. Accordingly, the character of distributions and
composition of net assets for tax purposes may differ from those reflected in
the accompanying financial statements.
The tax character of distributions paid during the six months ended April
30, 2008 and the year ended October 31, 2007 were as follows (in thousands):
SIX MONTHS ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
2008 2007
---------------- -----------
(unaudited)
DISTRIBUTIONS PAID FROM:
ORDINARY INCOME*
Institutional Class .............. $ 69,220 $ 55,466
PlanAhead Class .................. 36,887 27,239
Service Class .................... 193 133
AMR Class ........................ 30,031 21,371
LONG-TERM CAPITAL GAIN
Institutional Class .............. 127,324 90,048
PlanAhead Class .................. 71,886 46,834
Service Class .................... 395 257
AMR Class ........................ 52,104 32,417
-------- --------
TOTAL DISTRIBUTIONS PAID ............... $388,040 $273,765
======== ========
* For tax purposes, short-term capital gains are considered ordinary income
distributions.
As of April 30, 2008, the components of distributable earnings on a tax
basis were as follows (in thousands):
Cost basis of investments for federal
income tax purposes ................. $2,410,287
Unrealized appreciation ................ 618,334
Unrealized depreciation ................ (135,462)
----------
Net unrealized appreciation ............ 482,872
Undistributed ordinary income .......... 40,859
Undistributed long-term gain ........... 118,379
----------
Distributable earnings ................. $ 642,110
==========
Financial reporting records are adjusted for permanent book/tax differences
to reflect tax character. Financial records are not adjusted for temporary
differences. The temporary differences between financial reporting and tax-basis
reporting of unrealized appreciation/(depreciation) are attributable primarily
to the tax deferral of losses from wash sales, the realization for tax purposes
of unrealized gain/(losses) on certain
19
AMERICAN BEACON INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
derivative instruments, the realization for tax purposes of unrealized
gain/(losses) on investments in passive foreign investment companies, and
Section 732 basis adjustments.
Due to inherent differences in the recognition of income, expenses and
realized gains/(losses) under U.S. generally accepted accounting principles and
federal income tax regulations, permanent differences between book and tax
reporting have been identified and appropriately reclassified on the Statement
of Assets and Liabilities.
Accordingly, the following amounts represent current year permanent
differences derived from foreign currency gains/(losses) from sales of
investments in passive foreign investment companies, and Section 732 basis
adjustments that have been reclassified as of April 30, 2008 (in thousands):
Paid-in-capital ............................ $ 2,010
Undistributed net investment income ........ 3,796
Accumulated net realized loss .............. (5,806)
Unrealized depreciation of investments,
futures contracts and foreign currency .. --
4. INVESTMENT TRANSACTIONS
The aggregate cost of purchases and proceeds from sales of investments,
other than short-term obligations, for the six months ended April 30, 2008 were
(in thousands) $408,084 and $777,486, respectively.
A summary of the Fund's direct transactions in Affiliated Funds for the six
months ended April 30, 2008 is set forth below (in thousands):
OCTOBER 31, 2007 APRIL 30, 2008
AFFILIATE SHARES/MARKET VALUE PURCHASES SALES SHARES/MARKET VALUE
- --------- ------------------- --------- -------- -------------------
Select Fund $71,709 $743,754 $735,923 $79,540
5. 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 and initially in an amount at least
equal to 102% of the fair value of domestic securities loaned or 105% of the
fair value of international securities loaned. Collateral is marked to market
and monitored daily. To the extent that a loan is collateralized by cash, such
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.
The Fund, the Agent and the Manager retain 75%, 15%, and 10%, respectively,
of the income generated from the investment of cash collateral, less negotiated
rebate fees paid to participating brokers and transaction costs. To the extent
that a loan is secured by non-cash collateral, brokers pay the Fund negotiated
lenders' fees, which are divided between the Fund, the Agent, and the Manager
75%, 15%, and 10%, respectively. The Fund also continues to receive income on
the securities loaned, and any gain or loss in the market prices of securities
loaned that may occur during the term of the loan.
Risks to the Fund in securities lending transactions are that the borrower
may not provide additional collateral when required or return the securities
when due, and that the value of the short-term investments will be less than the
amount of cash collateral required to be returned to the borrower.
At April 30, 2008, securities with a market value of approximately
$279,965,000 were loaned by the Fund. Cash collateral held by the custodian for
the Fund in an investment in the Affiliated Funds totaled $294,427,000.
20
AMERICAN BEACON INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
6. CAPITAL SHARE TRANSACTIONS
The tables below summarize the activity in capital shares for each Class of
the Fund (dollars and shares in thousands):
Six Months ended April 30, 2008
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- ------------------ ---------------- -----------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------- --------- ------ --------- ------ ------- ------ --------
Shares sold ........................ 3,488 $ 77,704 8,399 $ 177,271 29 $ 613 1,208 $ 26,841
Reinvestment of dividends .......... 7,822 177,012 4,768 106,664 26 585 3,606 82,134
Shares redeemed .................... (19,661) (435,106)* (6,852) (149,293)* (81) (1,709)* (2,735) (61,707)*
------ --------- ----- --------- --- ------- ----- --------
Net increase (decrease) in shares
outstanding ..................... (8,351) $(180,390) 6,315 $ 134,642 (26) $ (511) 2,079 $ 47,268
====== ========= ===== ========= === ======= ===== ========
Year Ended October 31, 2007
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- ------------------- ---------------- ------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------- --------- ------- --------- ------ ------- ------ ---------
Shares sold ........................ 9,309 $ 233,941 10,042 $ 248,361 (22) $ 548 3,615 $ 89,753
Reinvestment of dividends .......... 5,632 133,085 (3,079) 72,025 (17) 390 2,264 53,788
Shares redeemed .................... (15,989) (400,672)* (11,014) (276,108)* (51) (1,254)* (4,109) (105,340)*
------ --------- ------ --------- --- ------- ----- ---------
Net increase (decrease) in shares
outstanding ................... (1,048) $ (33,646) 2,107 $ 44,278 (12) $ (316) 1,770 $ 38,201
====== ========= ====== ========= === ======= ===== =========
- ----------
* Net of Redemption Fees
21
AMERICAN BEACON INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class
-----------------------------------------------------------------------
Six
Months Year Ended October 31
Ended April --------------------------------------------------------
30, 2008 2007 2006 2005 2004(A) 2003(B)
----------- ---------- ---------- ---------- ---------- --------
(unaudited)
Net asset value, beginning of period ................. $ 27.32 $ 24.68 $ 20.98 $ 18.47 $ 15.46 $ 12.10
---------- ---------- ---------- ---------- ---------- --------
Income from investment operations:
Net investment income(C, D) ....................... 0.35 0.65 0.60 0.44 0.30 0.25
Net gains (losses) on securities (both realized and
unrealized)(C) ................................. (2.38) 4.31 4.86 2.31 3.12 3.47
---------- ---------- ---------- ---------- ---------- --------
Total income (loss) from investment operations ....... (2.03) 4.96 5.46 2.75 3.42 3.72
---------- ---------- ---------- ---------- ---------- --------
Less distributions:
Dividends from net investment income .............. (0.70) (0.50) (0.43) (0.24) (0.41) (0.36)
(Distributions from net realized gains on
securities) .................................... (2.66) (1.82) (1.33) -- -- --
---------- ---------- ---------- ---------- ---------- --------
Total distributions .................................. (3.36) (2.32) (1.76) (0.24) (0.41) (0.36)
---------- ---------- ---------- ---------- ---------- --------
Redemption fees added to beneficial interest(E) ...... 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- --------
Net asset value, end of period ....................... $ 21.93 $ 27.32 $ 24.68 $ 20.98 $ 18.47 $ 15.46
========== ========== ========== ========== ========== ========
Total return ......................................... (7.87)%(F) 21.54% 27.49% 15.04% 22.49% 31.61%
========== ========== ========== ========== ========== ========
Ratios and supplemental data:
Net assets, end of period (in thousands) .......... $1,170,445 $1,686,668 $1,549,521 $1,286,441 $1,029,272 $722,333
Ratios to average net assets (annualized):
Expenses, net of waivers(C) .................... 0.66% 0.67% 0.71% 0.70% 0.76% 0.79%
Expenses, before waivers(C) .................... 0.66% 0.67% 0.71% 0.70% 0.76% 0.79%
Net investment income, net of waivers(C) ....... 2.57% 2.46% 2.52% 2.17% 1.69% 1.97%
Net investment income (loss), before
waivers(C) .................................. 2.57% 2.46% 2.52% 2.17% 1.69% 1.97%
Portfolio turnover rate(G) ........................ 15%(F) 38% 40% 37% 36% 44%
- ----------
(A) The Boston Company Asset Management, LLC was added as an investment advisor
to the International Equity Fund on September 27, 2004.
(B) Independence Investment LLC was removed as an investment advisor to the
International Equity Fund on October 24, 2003.
(C) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the American Beacon International Equity Portfolio through February 28,
2006.
(D) Class expenses per share were subtracted from net investment income per
share for the Fund before class expenses to determine net investment income
per share through October 31, 2005.
(E) Amounts represent less than $0.01 per share.
(F) Not annualized.
(G) The International Equity Fund invested all of its investable assets in the
American Beacon International Equity Portfolio through February 28, 2006.
Portfolio turnover rate through February 28, 2006 is that of the American
Beacon International Equity Portfolio.
22
AMERICAN BEACON INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
PlanAhead Class
---------------------------------------------------------------
Six
Months
Ended Year Ended October 31
April 30, ----------------------------------------------------
2008 2007 2006 2005 2004(A) 2003(B)
----------- -------- -------- -------- -------- --------
(unaudited)
Net asset value, beginning of period ................. $ 26.99 $ 24.42 $ 20.79 $ 18.31 $ 15.34 $ 11.95
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income(C, D) ....................... 0.30 0.58 0.50 0.41 0.26 0.22
Net gains (losses) on securities (both realized and
unrealized)(C) ................................. (2.34) 4.26 4.84 2.29 3.08 3.46
-------- -------- -------- -------- -------- --------
Total income (loss) from investment operations ....... (2.04) 4.84 5.34 2.70 3.34 3.68
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .............. (0.63) (0.45) (0.38) (0.22) (0.37) (0.29)
Distributions from net realized gains on
securities .................................... (2.66) (1.82) (1.33) -- -- --
-------- -------- -------- -------- -------- --------
Total distributions .................................. (3.29) (2.27) (1.71) (0.22) (0.37) (0.29)
-------- -------- -------- -------- -------- --------
Redemption fees added to beneficial interest(E) ...... 0.00 0.00 0.00 0.00 0.00 0.00
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....................... $ 21.66 $ 26.99 $ 24.42 $ 20.79 $ 18.31 $ 15.34
======== ======== ======== ======== ======== ========
Total return ......................................... (7.99)%(F) 21.23% 27.20% 14.73% 22.16% 31.62%
======== ======== ======== ======== ======== ========
Ratios and supplemental data:
Net assets, end of period (in thousands) .......... $866,385 $909,385 $771,298 $560,770 $310,540 $177,425
Ratios to average net assets (annualized):
Expenses, net of waivers(C) .................... 0.92% 0.93% 0.96% 0.95% 1.02% 1.10%
Expenses, before waivers(C) .................... 0.92% 0.93% 0.96% 0.95% 1.02% 1.10%
Net investment income, net of waivers(C) ....... 2.56% 2.26% 2.25% 1.96% 1.46% 1.68%
Net investment income (loss), before
waivers(C) .................................. 2.56% 2.26% 2.25% 1.96% 1.46% 1.68%
Portfolio turnover rate(G) ........................ 15%(F) 38% 40% 37% 36% 44%
- ----------
(A) The Boston Company Asset Management, LLC was added as an investment advisor
to the International Equity Fund on September 27, 2004.
(B) Independence Investment LLC was removed as an investment advisor to the
International Equity Fund on October 24, 2003.
(C) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the American Beacon International Equity Portfolio through February 28,
2006.
(D) Class expenses per share were subtracted from net investment income per
share for the Fund before class expenses to determine net investment income
per share through October 31, 2005.
(E) Amounts represent less than $0.01 per share.
(F) Not annualized.
(G) The International Equity Fund invested all of its investable assets in the
American Beacon International Equity Portfolio through February 28, 2006.
Portfolio turnover rate through February 28, 2006 is that of the American
Beacon International Equity Portfolio.
23
AMERICAN BEACON INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Service Class
--------------------------------------------------------------
Six Year Ended October 31
Months ------------------------------------------------
Ended May 01 to
April 30, October 31,
2008 2007 2006 2005 2004(B) 2003(A)
----------- ------ ------ ------ ------- -----------
(unaudited)
Net asset value, beginning of period ................. $26.83 $24.24 $20.61 $18.24 $15.31 $ 12.18
------ ------ ------ ------ ------ ---------
Income from investment operations:
Net investment income(C,D) ........................ 0.25 0.56 0.46 0.37 0.30 0.09
Net gains (losses) on securities (both realized and
unrealized)(C) ................................. (2.30) 4.20 4.76 2.26 2.99 3.04
------ ------ ------ ------ ------ ---------
Total income (loss) from investment operations ....... (2.05) 4.76 5.22 2.63 3.29 3.13
------ ------ ------ ------ ------ ---------
Less distributions:
Dividends from net investment income .............. (0.58) (0.35) (0.26) (0.26) (0.36) --
Distributions from net realized gains on
securities ..................................... (2.66) (1.82) (1.33) -- -- --
------ ------ ------ ------ ------ ---------
Total distributions .................................. (3.24) (2.17) (1.59) (0.26) (0.36) --
------ ------ ------ ------ ------ ---------
Redemption fees added to beneficial interest(E) ...... 0.00 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------ ---------
Net asset value, end of period ....................... $21.54 $26.83 $24.24 $20.61 $18.24 $ 15.31
====== ====== ====== ====== ====== =========
Total return ......................................... (8.05)%(F) 20.85% 26.89% 14.45% 21.88% 25.70%
====== ====== ====== ====== ====== =========
Ratios and supplemental data:
Net assets, end of period (in thousands) .......... $3,407 $4,932 $4,740 $2,987 $ 739 $ 1
Ratios to average net assets (annualized):
Expenses, net of waivers(C) .................... 1.15% 1.12% 1.16% 1.21% 1.27% 1.50%
Expenses, before waivers(C) .................... 1.15% 1.15% 1.19% 1.21% 6.26% 1,139.08%
Net investment income, net of waivers(C) ....... 2.02% 2.04% 2.09% 1.70% 0.81% 1.33%
Net investment income (loss), before
waivers(C) .................................. 2.02% 2.01% 2.05% 1.70% (4.18)% (1,136.25)%
Portfolio turnover rate(G) ........................ 15%(F) 38% 40% 37% 36% 44%(H)
- ----------
(A) Independence Investment LLC was removed as an investment advisor to the
International Equity Fund on October 24, 2003.
(B) The Boston Company Asset Management, LLC was added as an investment advisor
to the International Equity Fund on September 27, 2004.
(C) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the American Beacon International Equity Portfolio through February 28,
2006.
(D) Class expenses per share were subtracted from net investment income per
share for the Fund before class expenses to determine net investment income
per share through October 31, 2005.
(E) Amounts represent less than $0.01 per share.
(F) Not annualized.
(G) The International Equity Fund invested all of its investable assets in the
American Beacon International Equity Portfolio through February 28, 2006.
Portfolio turnover rate through February 28, 2006 is that of the American
Beacon International Equity Portfolio.
(H) Portfolio turnover rate is for the period from November 1, 2002 through
October 31, 2003.
24
AMERICAN BEACON INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
AMR Class
------------------------------------------------------------------
Six
Months
Ended Year Ended October 31
April 30, ----------------------------------------------------
2008 2007 2006 2005 2004(A) 2003(B)
----------- -------- -------- -------- -------- --------
(unaudited)
Net asset value, beginning of period ................. $ 27.54 $ 24.86 $ 21.12 $ 18.58 $ 15.54 $ 12.18
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income(C, D) ....................... 0.35 0.73 0.63 0.50 0.34 0.29
Net gains losses on securities both realized and
unrealized(C) .................................. (2.37) 4.33 4.92 2.33 3.14 3.46
-------- -------- -------- -------- -------- --------
Total income loss from investment operations ......... (2.02) 5.06 5.55 2.83 3.48 3.75
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .............. (0.77) (0.56) (0.48) (0.29) (0.44) (0.39)
Distributions from net realized gains on
securities ..................................... (2.66) (1.82) (1.33) -- -- --
-------- -------- -------- -------- -------- --------
Total distributions .................................. (3.43) (2.38) (1.81) (0.29) (0.44) (0.39)
-------- -------- -------- -------- -------- --------
Redemption fees added to beneficial interest(E) ...... 0.00 0.00 0.00 0.00 0.00 0.00
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....................... $ 22.09 $ 27.54 $ 24.86 $ 21.12 $ 18.58 $ 15.54
======== ======== ======== ======== ======== ========
Total return ......................................... (7.72)%(F) 21.86% 27.88% 15.32% 22.84% 31.77%
======== ======== ======== ======== ======== ========
Ratios and supplemental data:
Net assets, end of period (in thousands) .......... $585,439 $672,680 $563,231 $448,096 $460,114 $322,801
Ratios to average net assets (annualized):
Expenses, net of waivers(C) .................... 0.40% 0.42% 0.45% 0.44% 0.49% 0.52%
Expenses, before waivers(C) .................... 0.40% 0.42% 0.45% 0.44% 0.49% 0.52%
Net investment income, net of waivers(C) ....... 2.98% 2.77% 2.76% 2.49% 1.97% 2.22%
Net investment income (loss), before
waivers(C) .................................. 2.98% 2.77% 2.76% 2.49% 1.97% 2.22%
Portfolio turnover rate(G) ........................ 15%(F) 38% 40% 37% 36% 44%
- ----------
(A) The Boston Company Asset Management, LLC was added as an investment advisor
to the International Equity Fund on September 27, 2004.
(B) Independence Investment LLC was removed as an investment advisor to the
International Equity Fund on October 24, 2003.
(C) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the American Beacon International Equity Portfolio through February 28,
2006.
(D) Class expenses per share were subtracted from net investment income per
share for the Fund before class expenses to determine net investment income
per share through October 31, 2005.
(E) Amounts represent less than $0.01 per share.
(F) Not annualized.
(G) The International Equity Fund invested all of its investable assets in the
American Beacon International Equity Portfolio through February 28, 2006.
Portfolio turnover rate through February 28, 2006 is that of the American
Beacon International Equity Portfolio.
25
(AMERICAN BEACON FUNDS(SM) LOGO)
DELIVERY OF DOCUMENTS
To reduce expenses, your financial institution may mail only one copy of the
Prospectus, Annual Report and Semi-Annual Report to those addresses shared by
two or more accounts. If you wish to receive individual copies of these
documents, please contact your financial institution. Delivery of individual
copies will commence thirty days after receiving your request.
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:
(GRAPHIC) (GRAPHIC)
BY E-MAIL: ON THE INTERNET:
american_beacon.funds@ambeacon.com Visit our website at
www.americanbeaconfunds.com
(GRAPHIC) (GRAPHIC)
BY TELEPHONE: BY MAIL:
Institutional Class American Beacon Funds
Call (800) 658-5811 P.O. Box 219643
AMR Class(SM) Kansas City, MO 64121-9643
Call (800) 345-2345
PlanAhead Class(R) and Service Class
Call (800) 388-3344
AVAILABILITY OF QUARTERLY AVAILABILITY OF PROXY
PORTFOLIO SCHEDULES VOTING POLICY AND RECORDS
In addition to the Schedule of A description of the policies and
Investments provided in each procedures the Fund uses to determine
semi-annual and annual report, the how to vote proxies relating to
Fund files a complete schedule of its portfolio securities is available in
portfolio holdings with the the Fund's Statement of Additional
Securities and Exchange Commission Information, is available free of
("SEC") on Form N-Q as of the first charge on the Fund's website
and third fiscal quarters. The Fund's (www.americanbeaconfunds.com) and by
Forms N-Q are available on the SEC's calling 1-800-967-9009 or by
website at www.sec.gov. The Forms N-Q accessing the SEC's website at
may also be reviewed and copied at www.sec.gov. The Fund's proxy voting
the SEC's Public Reference Room, 450 record for the most recent year ended
Fifth Street, NW, Washington, DC June 30 is filed annually with the
20549. Information regarding the SEC on Form N-PX. The Fund's Forms
operation of the SEC's Public N-PX are available on the SEC's
Reference Room may be obtained by website at www.sec.gov. The Fund's
calling 1-800-SEC-0330. A complete proxy voting record may also be
schedule of the Fund's portfolio obtained by calling 1-800-967-9009.
holdings is also available on the
Funds' website
(www.americanbeaconfunds.com)
approximately thirty days after the
end of each month.
FUND SERVICE PROVIDERS:
CUSTODIAN TRANSFER AGENT INDEPENDENT REGISTERED DISTRIBUTOR
STATE STREET BANK AND BOSTON FINANCIAL DATA PUBLIC ACCOUNTING FORESIDE FUND SERVICES
TRUST SERVICES FIRM Portland, Maine
Boston, Massachusetts Kansas City, Missouri ERNST & YOUNG LLP
Dallas, 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.
American Airlines, Inc. is not responsible for investments made in the American
Beacon Funds. American Beacon Funds is a service mark of AMR Corporation.
American Beacon International Equity Fund is a service mark of American Beacon
Advisors, Inc.
GUIDANCE | VISION | EXPERIENCE
(AMERICAN BEACON FUNDS(SM) LOGO)
(GRAPHIC)
SEMI-ANNUAL REPORT
APRIL 30, 2008
LARGE CAP VALUE FUND
About American Beacon
Since 1986, American Beacon Advisors has offered a variety of products and
investment advisory services to numerous institutional and retail clients,
including a variety of mutual funds, corporate cash management, and separate
account management.
Our clients include defined benefit plans, defined contribution plans,
foundations, endowments, corporations, financial planners, and other
institutional investors. With American Beacon Advisors, you can put the
experience of a multi-billion dollar asset management firm to work for your
company.
Contents
President's Message................................................ 1
Market and Performance Overview.................................... 2
Schedule of Investments............................................ 6
Additional Information............................................. Back Cover
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, 2008
(PHOTO OF WILLIAM F. QUINN)
FELLOW SHAREHOLDERS,
I am pleased to present to you the American Beacon Large Cap Value Fund
Semi-Annual Report for the six months ended April 30, 2008.
The American Beacon Large Cap Value Fund-Institutional Class reported a
total return of -10.41% for this six-month period, with an expense ratio of
0.60% for the most recent fiscal year ended October 31, 2007.
The sub-prime mortgage crisis, rising oil and food prices all contributed
to a slowing economy that affected the U.S. equity markets negatively in the
past six months. This was evident when the S&P 500 and Dow Jones Industrial
Average indices reported returns of -9.64% and -6.79%, respectively, for this
period. During the period, the uncertainties surrounding banks, investment banks
and the entire financial system have resulted in an extraordinary amount of
volatility. We believe the Fund's fundamental value investment philosophy and
lower than average expense ratio will continue to serve the Fund well over the
longer term.
Please review the enclosed market overview, portfolio listings and detailed
financial data. As always, we welcome the opportunity to serve your financial
needs. To obtain further details about the American Beacon Funds family or to
access your account information, please visit our website at
www.americanbeaconfunds.com. Thank you for your continued confidence in the
American Beacon Large Cap Value Fund.
Sincerely,
/s/ William F. Quinn
William F. Quinn
President
American Beacon Funds
1
DOMESTIC EQUITY MARKET OVERVIEW
APRIL 30, 2008 (UNAUDITED)
Market volatility remained prevalent in the November-through-April time
frame as concerns escalated regarding inflation, housing, credit and the
long-term viability of some well-established financial institutions. Stock
prices declined markedly as investors did not discriminate by market
capitalization, investment style or geographic region. In sharp contrast to the
equity markets, commodities continued to soar as the dollar weakened further.
Responding to the liquidity crisis, the Federal Reserve ("Fed") provided
monetary stimulus not only through five cuts in interest rates over the course
of the six months (leaving the Federal Funds target rate at 2.00% on April 30,
2008, down from 4.50% on October 31, 2007), but also through significant
expansion of lending facilities to accept a wide variety of collateral from both
banks and brokerage firms. In their closely watched statement at the conclusion
of their meeting on April 30, 2008, the Fed issued a negative outlook on the
economy, suggesting that growth remained weak and could be further pressured by
"subdued" business investment. In addition, the Fed reiterated that financial
markets remained under "considerable" stress.
However, the month of April 2008 may have marked a turning point for equity
investors as stocks managed a strong rally as investors sought attractive
valuations in an economic environment that turned out not to be as bad as
initially feared. Several industry bellwethers reported solid profit news,
offering further encouragement to those non-financial sectors that have yet to
be affected by the credit crisis. Stocks were up across the board in April, with
all the major domestic market indices showing gains. Yields for U.S. Treasuries
increased (and prices for those securities dropped) as investors anticipated an
end to the Fed's easing campaign as well as in an attempt to seek better value
in the equity market.
Growth stocks in the Russell indices held up slightly better than their
value counterparts during the six-month period, although both styles declined.
Stock prices declined across all capitalization ranges; however, midcap
companies held up better than large caps, while smaller companies declined
sharply.
Weak equity performance was widespread over the semi-annual period. With
the exception of Energy, every sector in the broad market S&P 500 Index
declined. Despite interest rate cuts and relaxed Fed requirements, Financials
was the worst-performing sector, with a total return of -20.0%. Stocks in the
Information Technology, Telecommunication Services, Health Care and Consumer
Discretionary sectors also suffered double-digit declines. Other than Energy,
with a total return of 6.3%, there were no bright spots. Even Consumer Staples,
often viewed as a defensive category, pulled back slightly as investors worried
that consumer spending would not pick up anytime soon.
Since the financial crisis began last August, monetary policy makers had
been very aggressive, cutting interest rates seven different times. In addition,
the Fed had been innovative in contending with the current financial crisis by
developing (or resurrecting) policy initiatives and lending facilities in an
attempt to target liquidity without further pressuring the dollar or adding to
inflationary concerns. Yet despite these efforts, inflationary pressures
continued to build and the dollar continued to weaken. As a result, by the end
of April 2008, market interest rates had once again begun to move against the
Fed, this time upward, as global investors anticipated a pause in, if not a
completion of, the most recent Fed easing campaign.
2
PERFORMANCE OVERVIEW
AMERICAN BEACON LARGE CAP VALUE FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Institutional Class of the Large Cap Value Fund returned -10.41% for
the six months ended April 30, 2008, lagging the Russell 1000(R) Value Index
("Index") return of -9.83% and the Lipper Large-Cap Value Funds Index return of
- -10.20%.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08
---------------------------------------
6 MONTHS* 1 YEAR 5 YEARS 10 YEARS
--------- ------ ------- --------
Institutional Class(1, 4) ......... -10.41% -7.43% 15.11% 6.07%
PlanAhead Class(1, 4) ............. -10.48% -7.62% 14.82% 5.78%
Service Class(1, 2, 4) ............ -10.59% -7.87% 14.65% 5.71%
AMR Class(1, 4) ................... -10.28% -7.15% 15.42% 6.34%
Lipper Large-Cap
Value Funds Index (3) ............. -10.20% -7.41% 11.18% 4.32%
Russell 1000
Value Index (3) ................... -9.83% -8.97% 12.85% 5.97%
* Not annualized
(1.) Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares.
(2.) Fund performance for the five-year and ten-year periods represents the
total returns achieved by the PlanAhead Class from 4/30/98 up to 6/1/05,
the inception date of the Service Class, and the returns of the Service
Class since its inception. Expenses of the Service Class are higher than
those of the PlanAhead Class. Therefore, total returns shown may be higher
than they would have been had the Service Class been in existence since
4/30/98. A portion of the fees charged to the Service Class of the fund was
waived in 2005. Performance prior to waiving fees was lower than the actual
returns shown for 2005.
(3.) 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 is a registered trademark of the
Frank Russell Company. The Lipper Large-Cap Value Funds Index tracks the
results of the 30 largest mutual funds in the Lipper Large-Cap Value Funds
category. Lipper is an independent mutual fund research and ranking
service. One cannot directly invest in an index.
(4.) The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional, PlanAhead, Service and AMR Class
shares was 0.60%, 0.84%, 1.08% and 0.33%, respectively. The expense ratios
above may vary from the expense ratios presented in other sections of this
report that are based on expenses incurred during the period covered by
this report.
The Fund underperformed the Index entirely through sector allocation as
stock selection added value relative to the Index. The Fund's significant
underweighting in Energy, the best performing sector in the Index, detracted the
most value relative to the Index.
From a stock selection standpoint, the Fund's holdings in the Information
Technology and Industrials sectors added the most value relative to the Index.
Companies with the greatest positive contribution in the Information Technology
sector were IBM (up 4.7%) and Apple Computer (down 8.4%). In the Industrials
sector, Deere (up 9.2%) and Burlington Northern Santa Fe (up 18.5%) were the
largest contributors. This excess performance relative to the Index, however,
was somewhat offset by poor stock selection in the Financials sector where Bear
Stearns (down 90.7%), Citigroup (down 38.2%), and SLM (down 60.7%) were the
largest detractors.
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.
3
PERFORMANCE OVERVIEW
AMERICAN BEACON LARGE CAP VALUE FUND(SM)
APRIL 30, 2008 (UNAUDITED)
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
ConocoPhillips..................................................... 3.6%
AT&T, Inc.......................................................... 2.9%
International Business Machines Corp............................... 2.8%
Bank of America Corp............................................... 2.1%
JPMorgan Chase & Co................................................ 2.1%
American International Group, Inc.................................. 1.7%
Honeywell International, Inc....................................... 1.6%
Imperial Tobacco Group plc......................................... 1.6%
Occidental Petroleum Corp.......................................... 1.5%
Boeing Co.......................................................... 1.5%
SECTOR ALLOCATION
% OF
EQUITIES
----------
Financials......................................................... 23.0%
Industrials........................................................ 13.2%
Consumer Staples................................................... 11.4%
Information Technology............................................. 11.1%
Energy............................................................. 10.5%
Health Care........................................................ 10.3%
Consumer Discretionary............................................. 7.6%
Telecommunication Services......................................... 5.4%
Utilities.......................................................... 4.6%
Materials.......................................................... 2.9%
4
FUND EXPENSE
AMERICAN BEACON LARGE CAP VALUE FUND(SM)
APRIL 30, 2008 (UNAUDITED)
FUND EXPENSE EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs and (2) ongoing costs, including management fees, administrative service
fees, distribution (12b-1) fees, and other Fund expenses. The examples below 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, 2007
through April 30, 2008.
ACTUAL EXPENSES
The "Actual" lines of the table provide information about actual account
values and actual expenses. You may use the information in this line, 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 = 8.6), then multiply the result by the number
in the first line under the heading "Expenses Paid During Period" to estimate
the expenses you paid on your account during this period. Shareholders of the
PlanAhead and Institutional Classes that invest in the Fund through an IRA may
be subject to a custodial IRA fee of $12 that is typically deducted each
December. If your account was subject to a custodial IRA fee during the period,
your costs would have been $12 higher.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The "Hypothetical" lines of the table provide information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed 5% per year rate of return before expenses (not the
Fund's actual return). You may compare the ongoing costs of investing in the
Fund with other funds by contrasting this 5% hypothetical example and the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. Shareholders
of the PlanAhead and Institutional Classes that invest in the Fund through an
IRA may be subject to a custodial IRA fee of $12 that is typically deducted each
December. If your account was subject to a custodial IRA fee during the period,
your costs would have been $12 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. Similarly, the expense examples for other funds do not reflect any
transaction costs charged by those funds, such as sales charges (loads),
redemption fees or exchange fees. Therefore, the "Hypothetical" lines of the
table are useful in comparing ongoing costs only and will not help you determine
the relative total costs of owning different funds. If you were subject to any
transaction costs during the period, your costs would have been higher.
Beginning Ending Expenses Paid
Account Value Account During Period*
11/1/07 Value 4/30/08 11/1/07-4/30/08
------------- ------------- ---------------
INSTITUTIONAL CLASS
Actual ............... $1,000.00 $ 895.88 $2.69
Hypothetical ......... $1,000.00 $1,022.03 $2.87
(5% return before expenses)
PLANAHEAD CLASS
Actual ............... $1,000.00 $ 895.17 $3.86
Hypothetical ......... $1,000.00 $1,020.79 $4.12
(5% return before expenses)
SERVICE CLASS
Actual ............... $1,000.00 $ 894.07 $5.09
Hypothetical ......... $1,000.00 $1,019.49 $5.42
(5% return before expenses)
AMR CLASS
Actual ............... $1,000.00 $ 897.23 $1.51
Hypothetical ......... $1,000.00 $1,023.27 $1.61
(5% return before expenses)
* Expenses are equal to the Fund's annualized expense ratios for the
six-month period of 0.57%, 0.82%, 1.08% and 0.32% for the Institutional,
PlanAhead, Service and AMR 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 (182) by days in the
year (366) to reflect the half-year period.
5
AMERICAN BEACON LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
------------ ----------
(DOLLARS IN THOUSANDS)
COMMON STOCKS - 92.92%
CONSUMER DISCRETIONARY - 7.11%
HOTELS, RESTAURANTS & LEISURE - 1.21%
Carnival Corp. .................................. 1,864,200 $ 74,885
Wyndham Worldwide Corp. ......................... 1,569,280 33,708
----------
108,593
----------
HOUSEHOLD DURABLES - 0.61%
Centex Corp. + .................................. 453,900 9,450
Fortune Brands, Inc. ............................ 569,300 38,496
Newell Rubbermaid, Inc. ......................... 206,100 4,232
Pulte Homes, Inc. + ............................. 238,200 3,106
----------
55,284
----------
MEDIA - 2.02%
CBS Corp. + ..................................... 1,369,900 31,604
Idearc, Inc. + .................................. 334,000 1,102
Interpublic Group of Cos., Inc. ## + ............ 1,870,200 16,925
R.H. Donnelley Corp. ## + ....................... 312,400 1,497
Time Warner, Inc. ............................... 5,000,000 74,250
Walt Disney Co. Ltd. ............................ 1,121,400 36,367
Warner Music Group Corp. + ...................... 2,322,000 20,178
----------
181,923
----------
MULTILINE RETAIL - 1.86%
J.C. Penney Company, Inc. ....................... 1,598,500 67,936
Macy's, Inc. .................................... 1,349,212 34,122
Target Corp. .................................... 920,700 48,917
Wal-Mart Stores, Inc. ........................... 275,500 15,973
----------
166,948
----------
SPECIALTY RETAIL - 1.41%
Gap, Inc. ....................................... 643,400 11,980
Home Depot, Inc. ................................ 3,725,167 107,285
Limited Brands, Inc. ............................ 376,900 6,980
Liz Claiborne, Inc. + ........................... 41,800 739
----------
126,984
----------
TOTAL CONSUMER DISCRETIONARY 639,732
----------
CONSUMER STAPLES - 10.61%
BEVERAGES - 1.50%
Diageo plc, ADR ................................. 1,651,600 135,266
----------
FOOD & DRUG RETAILING - 1.61%
Safeway, Inc. ................................... 2,495,400 78,855
Sysco Corp. ..................................... 2,156,000 65,909
----------
144,764
----------
FOOD PRODUCTS - 2.39%
Archer-Daniels-Midland Co. ...................... 1,918,000 84,507
SHARES VALUE
------------ ----------
(DOLLARS IN THOUSANDS)
Kellogg Co. ..................................... 1,200,000 $ 61,404
Kraft Foods, Inc. ............................... 2,199,713 69,577
----------
215,488
----------
PERSONAL PRODUCTS - 0.74%
L'Oreal SA + .................................... 2,800,000 66,192
----------
TOBACCO - 4.37%
Altria Group, Inc. .............................. 2,398,800 47,976
Imperial Tobacco Group plc, ADR ................. 1,482,300 142,286
Philip Morris International, Inc. ## ............ 1,736,200 88,598
UST, Inc. + ..................................... 2,197,200 114,408
----------
393,268
----------
TOTAL CONSUMER STAPLES 954,978
----------
ENERGY - 9.77%
ENERGY EQUIPMENT & SERVICES - 1.13%
Weatherford International Ltd. ## ............... 1,265,000 102,047
----------
OIL & GAS - 8.64%
Chevron Corp. ................................... 1,069,562 102,838
ConocoPhillips .................................. 3,805,896 327,878
Devon Energy Corp. .............................. 1,172,300 132,939
Duke Energy Corp. ............................... 2,552,200 46,731
Occidental Petroleum Corp. ...................... 1,647,900 137,122
Royal Dutch Shell plc, ADR ...................... 311,700 24,842
Sunoco, Inc. .................................... 110,400 5,124
----------
777,474
----------
TOTAL ENERGY 879,521
----------
FINANCIALS - 21.20%
BANKS - 7.34%
Bank of America Corp. ........................... 5,048,978 189,539
Comerica, Inc. + ................................ 145,600 5,057
East West Bancorp, Inc. + ....................... 2,068,000 29,448
KeyCorp ......................................... 137,100 3,308
National City Corp. ## .......................... 312,700 1,873
SunTrust Banks, Inc. ............................ 265,000 14,774
Synovus Financial Corp. + ....................... 4,516,000 53,469
U.S. Bancorp .................................... 1,357,160 45,994
Wachovia Corp. + ................................ 2,105,400 61,372
Washington Mutual, Inc. ## ...................... 1,765,000 21,145
Washington Mutual, Inc. + ....................... 6,525,900 80,203
Wells Fargo & Co. ............................... 3,558,750 105,873
Zions Bancorporation + .......................... 1,053,000 48,807
----------
660,862
----------
See accompanying notes
6
AMERICAN BEACON LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
------------ ----------
(DOLLARS IN THOUSANDS)
DIVERSIFIED FINANCIALS - 8.11%
American Express Co. ............................ 45,400 $ 2,180
Capital One Financial Corp. + ................... 516,600 27,380
Charles Schwab Corp. ............................ 3,314,000 71,582
Citigroup, Inc. + ............................... 4,872,638 123,131
Discover Financial Services ..................... 266,350 4,850
Federal Home Loan Mortgage Corp. ................ 777,000 19,355
Federal National Mortgage Association ........... 420,800 11,909
Goldman Sachs Group, Inc. ....................... 252,400 48,302
JP Morgan Chase & Co. ........................... 3,948,198 188,132
Merrill Lynch & Co., Inc. ....................... 1,095,500 54,589
Mitsubishi UFJ Financial Group, Inc., ADR + ..... 5,000,000 54,950
Morgan Stanley Dean Witter & Co. ................ 1,737,100 84,423
SLM Corp. ## .................................... 2,089,700 38,722
----------
729,505
----------
INSURANCE - 5.75%
ACE Ltd. ........................................ 1,100,100 66,325
Aflac, Inc. ..................................... 1,189,000 79,271
Allstate Corp. .................................. 273,028 13,750
American International Group, Inc. .............. 3,391,300 156,678
Conseco, Inc. ## ................................ 330,700 3,853
Genworth Financial, Inc. ........................ 669,400 15,436
Hartford Financial Services Group, Inc. ......... 693,050 49,394
MetLife, Inc. ................................... 746,100 45,400
Travelers Companies, Inc. ....................... 723,400 36,459
UnumProvident Corp. ............................. 357,200 8,291
XL Capital Ltd. ................................. 1,210,100 42,220
----------
517,077
----------
TOTAL FINANCIALS 1,907,444
----------
HEALTH CARE - 9.59%
HEALTH CARE EQUIPMENT & SUPPLIES - 1.56%
Baxter International, Inc. ...................... 2,132,800 132,916
Covidien Ltd. ................................... 147,400 6,882
----------
139,798
----------
HEALTH CARE PROVIDERS & SERVICES - 1.90%
Cigna Corp. ..................................... 1,106,500 47,259
Omnicare, Inc. + ................................ 60,400 1,229
UnitedHealth Group, Inc. ........................ 628,400 20,505
Universal Health Services, Inc. ................. 961,000 60,197
WellPoint, Inc. ## .............................. 838,800 41,730
----------
170,920
----------
PHARMACEUTICALS - 6.13%
Amgen, Inc. ## .................................. 336,000 14,068
AstraZeneca plc, ADR ............................ 360,600 15,138
Bristol-Myers Squibb Co. ........................ 4,183,200 91,905
SHARES VALUE
------------ ----------
(DOLLARS IN THOUSANDS)
Eli Lilly & Co. ................................. 1,737,300 $ 83,634
Hospira, Inc. ## ................................ 1,175,000 48,351
Johnson & Johnson ............................... 530,800 35,611
Merck & Co., Inc. ............................... 307,100 11,682
Pfizer, Inc. .................................... 6,090,500 122,480
Schering-Plough Corp. ........................... 1,094,800 20,155
Wyeth Corp. ..................................... 2,449,100 108,912
----------
551,936
----------
TOTAL HEALTH CARE 862,654
----------
INDUSTRIALS - 12.26%
AEROSPACE & DEFENSE - 3.64%
Boeing Co. ...................................... 1,615,500 137,091
Northrop Grumman Corp. .......................... 1,046,400 76,984
Raytheon Co. .................................... 1,040,000 66,529
United Technologies Corp. ....................... 643,200 46,613
----------
327,217
----------
AIR FREIGHT & COURIERS - 0.50%
FedEx Corp. ..................................... 472,600 45,308
----------
INDUSTRIAL CONGLOMERATES - 4.16%
3M Co. .......................................... 593,000 45,602
General Electric Co. ............................ 3,548,000 116,020
Honeywell International, Inc. ................... 2,473,425 146,921
Textron, Inc. ................................... 750,400 45,782
Tyco International Ltd. ......................... 436,300 20,414
----------
374,739
----------
MACHINERY - 3.33%
Caterpillar, Inc. ............................... 823,100 67,396
Deere & Co. ..................................... 989,000 83,145
Illinois Tool Works, Inc. ....................... 1,637,300 85,614
ITT Industries, Inc. ............................ 989,300 63,315
----------
299,470
----------
TRANSPORTATION INFRASTRUCTURE - 0.63%
Burlington Northern Santa Fe Corp. .............. 550,900 56,495
----------
TOTAL INDUSTRIALS .................................. 1,103,229
----------
INFORMATION TECHNOLOGY - 10.30%
COMMUNICATIONS EQUIPMENT - 0.50%
Alcatel-Lucent, ADR + ........................... 1,240,800 8,276
Nokia Corp., ADR ................................ 1,213,800 36,499
----------
44,775
----------
COMPUTERS & PERIPHERALS - 5.36%
Apple Computer, Inc. ## ......................... 640,000 111,328
Hewlett-Packard Co. ............................. 2,491,000 115,458
See accompanying notes
7
AMERICAN BEACON LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
------------ ----------
(DOLLARS IN THOUSANDS)
International Business Machines Corp. ........... 2,119,800 $ 255,860
----------
482,646
----------
ELECTRICAL EQUIPMENT - 0.59%
Molex, Inc. ..................................... 2,027,000 53,374
----------
ELECTRONIC COMPONENTS - 0.53%
Thomas & Betts Corp. ## ......................... 1,285,000 48,136
----------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.58%
Intel Corp. ..................................... 1,404,700 31,268
Tyco Electronics Ltd. ........................... 548,300 20,512
----------
51,780
----------
IT CONSULTING & SERVICES - 0.38%
Electronic Data Systems Corp. ................... 1,839,700 34,145
----------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 0.64%
Texas Instruments, Inc. ......................... 1,960,000 57,154
----------
SOFTWARE - 1.72%
CA, Inc. ........................................ 1,465,003 32,435
Microsoft Corp. ................................. 919,600 26,227
Oracle Corp. ## ................................. 4,628,600 96,506
----------
155,168
----------
TOTAL INFORMATION TECHNOLOGY 927,178
----------
MATERIALS - 2.69%
CHEMICALS - 2.69%
Air Products & Chemicals, Inc. .................. 1,255,100 123,539
Dow Chemical Co. ................................ 591,700 23,757
E. I. du Pont de Nemours & Co. + ................ 1,272,900 62,258
Eastman Chemical Co. ............................ 23,400 1,720
PPG Industries, Inc. ............................ 508,900 31,231
----------
TOTAL MATERIALS .................................... 242,505
----------
TELECOMMUNICATION SERVICES - 5.06%
DIVERSIFIED TELECOMMUNICATION - 5.06%
AT&T, Inc. ...................................... 6,760,552 261,701
Fairpoint Communications, Inc. + ................ 44,846 413
Verizon Communications, Inc. .................... 3,532,646 135,936
Vodafone Group plc, ADR ......................... 1,810,949 57,335
----------
TOTAL TELECOMMUNICATION SERVICES 455,385
----------
UTILITIES - 4.33%
ELECTRIC UTILITIES - 3.56%
CenterPoint Energy, Inc. + ...................... 1,627,300 24,768
Dominion Resources, Inc. + ...................... 3,059,800 132,765
SHARES VALUE
------------ ----------
(DOLLARS IN THOUSANDS)
Entergy Corp. ................................... 592,200 $ 68,020
Exelon Corp. .................................... 861,400 73,632
FPL Group, Inc. ................................. 109,300 7,245
Public Service Enterprise Group, Inc. ........... 317,900 13,959
----------
320,389
----------
GAS UTILITIES - 0.77%
Spectra Energy Corp. ............................ 2,791,700 68,955
----------
TOTAL UTILITIES .................................... 389,344
----------
TOTAL COMMON STOCKS ................................ 8,361,970
----------
CONVERTIBLE PREFERRED STOCKS - 0.26%
FINANCIALS - 0.26%
BANKS - 0.26%
East West Bancorp, Inc. ## ...................... 8,763 9,621
National City Corp. ## .......................... 138 13,800
----------
TOTAL CONVERTIBLE PREFERRED STOCKS ................. 23,421
----------
SHORT TERM INVESTMENTS - 6.74%
American Beacon Money Market Select
Fund ++ ...................................... 569,687,688 569,688
PAR
AMOUNT
------------
United States Treasury Bill,
1.27%, Due 6/12/2008 # ....................... $ 36,861 36,807
----------
TOTAL SHORT TERM INVESTMENTS 606,495
----------
SHARES
------------
SECURITIES LENDING COLLATERAL - 4.98%
American Beacon Cash Plus Trust ++ .............. 361,052,001 361,052
American Beacon Money Market Select
Fund ++ ...................................... 87,376,775 87,377
----------
TOTAL SECURITIES LENDING COLLATERAL 448,429
----------
TOTAL INVESTMENTS 104.90% - (COST $9,247,166) ...... 9,440,315
LIABILITIES, NET OF OTHER ASSETS - (4.90%) ......... (441,223)
----------
TOTAL NET ASSETS - 100.00% ......................... $8,999,092
==========
See accompanying notes
8
AMERICAN BEACON LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
Percentages are stated as a percent of net assets.
## Non-income producing security.
+ All or a portion of this security is on loan at April 30, 2008.
++ The Fund/Trust is affiliated by having the same investment advisor.
# At April 30, 2008, security pledged as collateral for open futures
contracts.
FUTURES CONTRACTS
(DOLLARS IN THOUSANDS)
UNREALIZED
NUMBER OF EXPIRATION MARKET APPRECIATION/
CONTRACTS DATE VALUE (DEPRECIATION)
--------- ---------- -------- --------------
Emini S&P 500 Index 8,898 Jun 2008 $616,631 $22,331
======== =======
See accompanying notes
9
AMERICAN BEACON LARGE CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
ASSETS:
Investments in unaffiliated securities, at value (A, C) ...... $ 8,422,198
Investments in affiliated securities, at value (B) ........... 1,018,117
Receivable for investments sold .............................. 452
Dividends and interest receivable ............................ 10,161
Receivable for fund shares sold .............................. 20,475
Receivable for tax reclaims .................................. 196
Prepaid expenses ............................................. 149
------------
TOTAL ASSETS .............................................. 9,471,748
------------
LIABILITIES:
Payable for investments purchased ............................ 7,331
Payable upon return of securities loaned ..................... 448,429
Payable for fund shares redeemed ............................. 5,060
Payable for variation margin on open futures contracts ....... 2,310
Management and investment advisory fees payable (Note 2) ..... 5,939
Administrative service and service fees payable .............. 2,718
Other liabilities ............................................ 869
------------
TOTAL LIABILITIES ......................................... 472,656
------------
NET ASSETS ...................................................... $ 8,999,092
============
ANALYSIS OF NET ASSETS:
Paid-in-capital .............................................. 8,976,963
Undistributed net investment income .......................... 40,673
Accumulated net realized loss ................................ (234,024)
Unrealized appreciation of investments, futures
contracts, and foreign currency ........................... 215,480
------------
NET ASSETS ...................................................... $ 8,999,092
============
SHARES OUTSTANDING (NO PAR VALUE):
Institutional Class .......................................... 129,488,931
============
PlanAhead Class .............................................. 246,100,975
============
Service Class ................................................ 4,951,714
============
AMR Class .................................................... 35,858,880
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE:
Institutional Class .......................................... $ 22.26
============
PlanAhead Class .............................................. $ 21.22
============
Service Class ................................................ $ 21.10
============
AMR Class .................................................... $ 22.04
============
- ----------
(A) Cost of investments in unaffiliated securities .............. $ 8,229,049
(B) Cost of investments in affiliated securities ................ $ 1,018,117
(C) Market value of securities on loan .......................... $ 465,423
See accompanying notes
10
AMERICAN BEACON LARGE CAP VALUE FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (IN THOUSANDS) (UNAUDITED)
INVESTMENT INCOME:
Dividend income from unaffiliated securities (net of
foreign taxes)* ........................................... $ 96,350
Dividend income from affiliated securities ................... 10,193
Interest income .............................................. 542
Income derived from securities lending, net .................. 1,115
-----------
TOTAL INVESTMENT INCOME ................................ 108,200
-----------
EXPENSES:
Management and investment advisory fees (Note 2) ............. 12,050
Administrative service fees (Note 2):
Institutional Class ....................................... 3,185
PlanAhead Class ........................................... 6,142
Service Class ............................................. 133
Transfer agent fees:
Institutional Class ....................................... 95
PlanAhead Class ........................................... 154
Service Class ............................................. 3
AMR Class ................................................. 10
Custody and fund accounting fees ............................. 361
Professional fees ............................................ 61
Registration fees and expenses ............................... 68
Service fees:
PlanAhead Class (Note 2) .................................. 6,142
Service Class (Note 2) .................................... 134
Distribution fees - Service Class (Note 2) ................... 134
Prospectus and shareholder reports ........................... 368
Other expenses ............................................... 291
-----------
TOTAL EXPENSES ......................................... 29,331
-----------
NET INVESTMENT INCOME ........................................... 78,869
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments ............................................... (127,830)
Commission recapture (Note 1) ............................. 72
Futures contracts ......................................... (86,029)
Change in net unrealized appreciation or depreciation of:
Investments ............................................... (811,545)
Futures contracts ............................................ 17,952
-----------
NET LOSS ON INVESTMENTS ................................... (1,007,380)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $ (928,511)
===========
* Foreign taxes .............................................. $ 204
See accompanying notes
11
AMERICAN BEACON LARGE CAP VALUE FUND
STATEMENT OF CHANGES OF NET ASSETS (IN THOUSANDS)
Six Months Year Ended
Ended October 31,
April 30, 2008 2007
-------------- -----------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ........................................ $ 78,869 $ 120,501
Net realized gain (loss) on investments, futures
contracts, and foreign currency transactions .............. (213,787) 254,832
Change in net unrealized appreciation or (depreciation) of
investments, futures contracts, and foreign currency
translations .............................................. (793,593) 458,866
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ............................................. (928,511) 834,199
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Institutional Class ....................................... (41,356) (14,678)
PlanAhead Class ........................................... (76,907) (35,816)
Service Class ............................................. (1,578) (422)
AMR Class ................................................. (16,885) (13,818)
Net realized gain on investments:
Institutional Class ....................................... (71,604) (28,455)
PlanAhead Class ........................................... (153,834) (78,015)
Service Class ............................................. (3,382) (1,093)
AMR Class ................................................. (26,071) (23,934)
----------- -----------
NET DISTRIBUTIONS TO SHAREHOLDERS ...................... (391,617) (196,231)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares ................................ 2,268,009 4,667,772
Reinvestment of dividends and distributions .................. 370,495 185,535
Cost of shares redeemed ...................................... (1,083,684) (1,336,091)
----------- -----------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS ........................................ 1,554,820 3,517,216
----------- -----------
NET INCREASE IN NET ASSETS ...................................... 234,692 4,155,184
----------- -----------
NET ASSETS:
Beginning of period .......................................... 8,764,400 4,609,216
----------- -----------
END OF PERIOD * .............................................. $ 8,999,092 $ 8,764,400
=========== ===========
*Includes undistributed net investment income of ................ $ 40,673 $ 98,502
=========== ===========
See accompanying notes
12
AMERICAN BEACON LARGE CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
American Beacon Funds (the "Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940 (the
"Act"), as amended, as a no load, diversified, open-end management investment
company. These financial statements and notes to the financial statements relate
to the American Beacon Large Cap Value Fund (the "Fund"), a series of the Trust.
American Beacon Advisors, Inc. (the "Manager") is a wholly-owned subsidiary
of AMR Corporation ("AMR"), the parent company of American Airlines, Inc.
("American"), and was organized in 1986 to provide business management,
advisory, administrative and asset management consulting services to the Trust
and other investors.
On April 16, 2008, AMR announced that it has reached a definitive agreement
to sell American Beacon Advisors, Inc. to Lighthouse Holdings, Inc., which is
owned by investment funds affiliated with Pharos Capital Group, LLC and TPG
Capital, two leading private equity firms. AMR expects to close the sale later
this year, subject to customary closing conditions as well as the approval of
the shareholders of the American Beacon family of mutual funds and consents from
other clients of the Manager.
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: OFFERED TO: SERVICE AND DISTRIBUTIONS FEES:
- ------ -------------------------------------- ----------------------------------
INSTITUTIONAL CLASS Investors making an initial investment Administrative Service Fee - 0.25%
of $2 million
PLANAHEAD CLASS General public and investors investing Administrative Service Fee - 0.25%
through an intermediary Service Fee - 0.25%
SERVICE CLASS Investors investing through an Administrative Service Fee - 0.25%
intermediary Service Fee - 0.25%
Distribution Fee - 0.25%
AMR CLASS Investors in the tax-exempt retirement
and benefit plans of AMR Corporation
and its affiliates N/A
Investment income, net capital gains (losses) and all expenses incurred by
the Fund are allocated based on the relative net assets of each class, except
for service fees and certain other fees and expenses related solely to one class
of shares.
Security Valuation
Investments are valued at the close of the New York Stock Exchange (the
"Exchange"), normally 4 p.m. ET, each day that the Exchange is open for
business. Equity securities for which market quotations are available are valued
at the last sale price or official closing price (closing bid price or last
evaluated quote if no sale has occurred) on the primary market or exchange on
which they trade.
Debt securities (other than short-term 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. When a price is unavailable from a
pricing service or when the price provided by the pricing service is deemed not
to represent fair value, the prices of debt securities may be determined using
quotes obtained from brokers.
13
AMERICAN BEACON LARGE CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation. Investment grade short-term
obligations with 60 days or less to maturity are valued using the amortized cost
method, which approximates market value.
Securities for which 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 of Trustees
(the "Board").
Security Transactions and Investment Income
Security transactions are recorded on the trade date of the security
purchase or sale. The Fund may purchase securities with delivery or payment to
occur at a later date. At the time the Fund enters into a commitment to purchase
a security, the transaction is recorded, and the value of the security is
reflected in the net asset value. The value of the security may vary with market
fluctuations.
Dividend income, net of foreign taxes, is recorded on the ex-dividend date
except certain dividends from foreign securities which are recorded as soon as
the information is available to the Fund. Interest income is earned from
settlement date, recorded on the accrual basis, and adjusted, if necessary, for
accretion of discounts and amortization of premiums. For financial and tax
reporting purposes, realized gains and losses are determined on the basis of
specific lot identification.
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 5% of the face value of the futures contract. The Fund reflects this
amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral
for futures contracts. 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.
Dividends to Shareholders
Dividends from net investment income of the Fund normally will be declared
and paid at least annually. Distributions, if any, of net realized capital gains
are generally paid at least annually and recorded on the ex-dividend date.
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 in the Fund's Statement
of Operations.
14
AMERICAN BEACON LARGE CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Allocation of Income, Expenses, Gains and Losses
Income, expenses (other than those attributable to a specific class), gains
and losses are allocated daily to each class of shares based upon the relative
proportion of net assets represented by such class. Operating expenses directly
attributable to a specific class are charged against the operations of that
class.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles 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.
Recently Issued Accounting Pronouncements
In September 2006, the FASB issued Statement on Financial Accounting
Standards No. 157, "Fair Value Measurements" ("FAS 157"). This standard
clarifies the definition of fair value for financial reporting, establishes a
framework for measuring fair value and requires additional disclosures about the
use of fair value measurements. FAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. As of April 30, 2008, the Manager does not believe
the adoption of FAS 157 will materially impact the amounts reported in the
financial statements; however, additional disclosures will be required about the
inputs used to develop the measurements of fair value.
Other
Under the Trust's organizational documents, its officers and directors are
indemnified against certain liability arising out of the performance of their
duties to the Trust. In the normal course of business, the Trust enters into
contracts that provide indemnification to the other party or parties against
potential costs or liabilities. The Trust's maximum exposure under these
arrangements is dependent on claims that may be made in the future and,
therefore, cannot be estimated. The Trust has had no prior claims or losses
pursuant to any such agreement.
2. TRANSACTIONS WITH AFFILIATES
Management Agreement
The Trust and the Manager are parties to a Management Agreement that
obligates the Manager to provide or oversee the provision of all administrative,
investment advisory, fund management and securities lending services. Investment
assets of the Fund are managed by multiple investment advisors that have entered
into separate investment advisory agreements with the Manager. As compensation
for performing the duties required under the Management Agreement, the Manager
receives from the Fund an annualized fee equal to 0.10% of the average daily net
assets plus amounts paid by the Manager to the investment advisors hired by the
Manager to direct investment activities of the Funds. Management fees paid
during the six months ended April 30, 2008 were as follows (dollars in
thousands):
AMOUNTS PAID TO NET AMOUNTS
MANAGEMENT FEE RATE MANAGEMENT FEE INVESTMENT ADVISORS RETAINED BY MANAGER
------------------- -------------- ------------------- -------------------
0.225%-0.70% $12,050 $7,863 $4,187
As compensation for services provided by the Manager in connection with
securities lending activities, the lending Fund pays to the Manager, with
respect to cash collateral posted by borrowers, a fee up to 25% of the net
monthly interest income (the gross interest income earned by the investment of
cash collateral, less
15
AMERICAN BEACON LARGE CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
the amount paid to borrowers and related expenses) from such activities and,
with respect to loan fees paid by borrowers when a borrower posts collateral
other than cash, a fee up to 25% of such loan fees. This fee is netted against
securities lending income in the Statement of Operations. During the six months
ended April 30, 2008, securities lending fees paid to the Manager were $181,106.
Administrative Services Agreement
The Manager and the Trust entered into an Administrative Services Agreement
which obligates the Manager to provide or oversee administrative services to the
Fund. As compensation for performing the duties required under the
Administrative Services Agreement, the Manager receives an annualized fee of
0.25% of the average daily net assets of the Institutional, PlanAhead, and
Service Classes of the Fund.
Distribution Plans
The Fund, except for the Service Class of the Fund, has adopted a
"defensive" Distribution Plan (the "Plan") in accordance with Rule 12b-1 under
the Act, pursuant to which no fees may be charged to the Fund for distribution
purposes. However, the Plan authorizes the management and administrative service
fees received by the Manager and the investment advisors hired by the Manager to
be used for distribution purposes. Under this Plan, the Fund does not intend to
compensate the Manager or any other party, either directly or indirectly, for
the distribution of Fund shares.
A separate Distribution Plan (the "Distribution Plan") has been adopted
pursuant to Rule 12b-1 under the Act for the Service Class of the Fund. Under
the Distribution Plan, as compensation for distribution assistance, the Manager
receives an annual fee of 0.25% of the average daily net assets of the Service
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 PlanAhead and Service
Classes. As compensation for performing the duties required under the Service
Plans, the Manager receives 0.25% of the average daily net assets of the
PlanAhead and Service Classes of the Fund.
Investment in Affiliated Funds
The Fund is permitted, pursuant to an exemptive order by the Securities and
Exchange Commission ("SEC") and procedures approved by the Board, to invest up
to 25% of its total assets in the American Beacon Money Market Select Fund (the
"Select Fund"). Cash collateral received by the Fund in connection with
securities lending may be invested in the Select Fund and the American Beacon
Cash Plus Trust (the "Cash Trust") (collectively, the "Affiliated Funds"). The
Fund and the Affiliated Funds have the same investment advisor and therefore,
are considered to be affiliated. The Manager serves as investment advisor to the
Affiliated Funds and receives from each Affiliated Fund an annualized fee up to
0.10% of its average daily net assets. During the six months ended April 30,
2008, the Manager earned fees from the Affiliated Funds totaling $255,361 on the
Fund's direct investment in the Affiliated Funds and $206,970 from securities
lending collateral invested in the Affiliated Funds.
Interfund Lending Program
Pursuant to an exemptive order by the SEC, the Fund, along with other
registered investment companies having management contracts with the Manager,
may participate in an interfund lending program as a borrower. This program
provides an alternative credit facility allowing the Fund to borrow from other
participating Funds. For the six months ended April 30, 2008, the Fund did not
utilize the credit facility.
16
AMERICAN BEACON LARGE CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Expense Reimbursement Plan
The Fund has adopted an Expense Reimbursement Plan whereby the manager may
seek repayment of fees waived or expenses reimbursed for a period of up to three
years. However, reimbursement will occur only if the Class' average net assets
have grown or expenses have declined sufficiently to allow reimbursement without
causing its expense ratio to exceed the previously agreed upon contractual
expense limit. During the six months ended April 30, 2008, there were no fees
waived or reimbursed expenses subject to potential recovery.
Other
At April 30, 2008, AMR Corporation and subsidiary companies and employee
benefit trusts thereof owned 9% of the Fund's shares.
3. FEDERAL INCOME AND EXCISE TAXES
It is the policy of the Fund to comply with the requirements of Subchapter
M of the Internal Revenue Code and to distribute substantially all net
investment income as well as any net realized capital gains on the sale of
investments. Therefore, no federal income or excise tax provision is required.
The Fund adopted the provisions of FASB Interpretation No. 48, "Accounting
for Uncertainties in Income Taxes" ("FIN 48"), on January 1, 2007. FIN 48 sets
forth a minimum threshold for financial statement recognition of the benefit of
a tax position taken or expected to be taken in a tax return. The implementation
of FIN 48 did not result in any unrecognized tax benefits in the accompanying
financial statements. Each of the tax years in the three year period ended
October 31, 2007 remains subject to examination by the Internal Revenue Service.
If applicable, the Fund recognizes interest accrued related to unrecognized tax
benefits in interest expense and penalties in "Other expenses" on the Statement
of Operations.
Dividends are categorized in accordance with income tax regulations which
may treat certain transactions differently than U.S. generally accepted
accounting principles. Accordingly, the character of distributions and
composition of net assets for tax purposes may differ from those reflected in
the accompanying financial statements.
The tax character of distributions paid during the six months ended April
30, 2008 and the fiscal year ended October 31, 2007 were as follows (in
thousands):
SIX MONTHS ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
2008 2007
---------------- -----------
(unaudited)
DISTRIBUTIONS PAID FROM:
ORDINARY INCOME*
Institutional Class ................................ $ 65,645 $ 20,725
PlanAhead Class .................................... 129,088 52,395
Service Class ...................................... 2,725 654
AMR Class .......................................... 25,729 18,904
LONG-TERM CAPITAL GAIN
Institutional Class ................................ 47,315 22,407
PlanAhead Class .................................... 101,652 61,436
Service Class ...................................... 2,235 861
AMR Class .......................................... 17,228 18,849
-------- --------
TOTAL DISTRIBUTIONS PAID ................................. $391,617 $196,231
======== ========
* For tax purposes, short-term capital gains are considered ordinary income
distributions.
As of April 30, 2008, the components of distributable earnings on a tax
basis were as follows (in thousands):
17
AMERICAN BEACON LARGE CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Cost basis of investments for federal income tax
purposes ............................................. $9,292,691
Unrealized appreciation .................................. 1,034,338
Unrealized depreciation .................................. (886,714)
----------
Net unrealized appreciation/(depreciation) ............... 147,624
Undistributed ordinary income ............................ 40,673
Undistributed long-term gain/(loss) ...................... (166,234)
----------
Distributable earnings ................................... $ 22,063
==========
Financial reporting records are adjusted for permanent book/tax differences
to reflect tax character. Financial records are not adjusted for temporary
differences. The temporary differences between financial reporting and tax-basis
reporting of unrealized appreciation/(depreciation) are attributable primarily
to the tax deferral of losses from wash sales, the realization for tax purposes
of unrealized gains/(losses) on certain derivative instruments, and
reclassifications of income from real estate investment securities.
Due to inherent differences in the recognition of income, expenses and
realized gains/losses under U.S. generally accepted accounting principles and
federal income tax regulations, permanent differences between book and tax
reporting have been identified and appropriately reclassified on the Statement
of Assets and Liabilities.
Accordingly, the following amounts represent current year permanent
differences derived from reclassifications of income from real estate investment
securities, foreign currency, and dividend reclasses that have been reclassified
as of April 30, 2008 (in thousands):
Paid-in-capital .......................................... $ 6
Undistributed net investment income ...................... 28
Accumulated net realized gain (loss) ..................... (34)
Unrealized appreciation (depreciation) of investments,
futures contracts and foreign currency ................ --
At April 30, 2008, the capital loss carry forward position of the Fund for
federal income tax purposes was $ 166,234.
4. INVESTMENT TRANSACTIONS
The aggregate cost of purchases and proceeds from sales of investments,
other than short-term obligations for the six months ended April 30, 2008 were
(in thousands) $1,547,331 and $552,437, respectively.
A summary of the Fund's direct transactions in Affiliated Funds for the six
months ended April 30, 2008 is set forth below (in thousands):
OCTOBER 31, 2007 APRIL 30, 2008
AFFILIATE SHARES/MARKET VALUE PURCHASES SALES SHARES/MARKET VALUE
- --------- ------------------- ---------- ---------- -------------------
Select Fund $389,578 $2,495,306 $2,315,196 $569,688
5. 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 marked to market
and monitored daily. To the extent that a loan is collateralized by cash, such
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.
18
AMERICAN BEACON LARGE CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
The Fund, the Agent and the Manager retain 65%, 25%, and 10%, respectively
of the income generated from the investment of cash collateral, less negotiated
rebate fees paid to participating brokers and transaction costs. To the extent
that a loan is secured by non-cash collateral, brokers pay the Fund negotiated
lenders' fees, which are divided between the Fund, the Agent, and the Manager
65%, 25%, and 10%, respectively. The Fund also continues to receive income on
the securities loaned and any gain or loss in the market price of securities
loaned that may occur during the term of the loan.
Risks to the Fund in securities lending transactions are that the borrower
may not provide additional collateral when required or return the securities
when due, and that the value of the short-term investments will be less than the
amount of cash collateral required to be returned to the borrower.
At April 30, 2008, the value of outstanding securities on loan and the
value of collateral was as follows (in thousands):
MARKET VALUE OF
SECURITIES ON LOAN NON-CASH COLLATERAL CASH COLLATERAL
- ------------------ ------------------- ---------------
$465,423 $36,760 $448,429
Cash collateral is invested in a joint investment account, which is
comprised of an investment in the Affiliated Funds. The allocated amounts have
been included as investments in the Schedule of Investments and Statement of
Assets and Liabilities. Income earned on these investments is reported as Income
derived from securities lending in the Statement of Operations.
Non-cash collateral received by the Fund may not be sold or repledged;
therefore, non-cash collateral is not included on the Fund's Schedule of
Investments or Statement of Assets and Liabilities.
6. CAPITAL SHARE TRANSACTIONS
The tables below summarize the activity in capital shares for each Class of
the Fund (dollars and shares in thousands):
Six months Ended April 30, 2008
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- -------------------- ----------------- ------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------- --------- ------- ---------- ------ -------- ------ ---------
Shares sold ................. 42,762 $ 970,722 56,845 $1,225,392 2,437 $ 53,190 843 $ 18,705
Reinvestment of dividends ... 4,204 99,590 9,867 222,989 220 4,960 1,833 42,956
Shares redeemed ............. (13,272) (299,906) (29,966) (645,816) (1,748) (36,333) (4,507) (101,629)
------- --------- ------- ---------- ------ -------- ------ ---------
Net increase (decrease) in
shares outstanding ..... 33,694 $ 770,406 36,746 $ 802,565 909 $ 21,817 (1,831) $ (39,968)
======= ========= ======= ========== ====== ======== ====== =========
Year Ended October 31, 2007
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- --------------------- ----------------- -------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ---------- ------- ----------- ------ -------- ------- ---------
Shares sold ................. 63,236 $1,576,896 121,583 $ 2,853,467 3,247 $ 76,601 6,477 $ 160,808
Reinvestment of dividends ... 1,548 36,661 4,843 109,645 65 1,477 1,612 37,752
Shares redeemed ............. (9,321) (233,002) (30,797) (739,817) (996) (23,714) (13,926) (339,558)
------ ---------- ------- ----------- ----- -------- ------- ---------
Net increase (decrease) in
shares outstanding ..... 55,463 $1,380,555 95,629 $ 2,223,295 2,316 $ 54,364 (5,837) $(140,998)
====== ========== ======= =========== ===== ======== ======= =========
19
AMERICAN BEACON LARGE CAP VALUE FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class
---------------------------------------------------------------------
Six Months Year Ended October 31,
Ended April ----------------------------------------------------
30, 2008 2007 2006 2005 2004 2003
----------- ---------- -------- -------- ------- -------
(unaudited)
Net asset value, beginning of period .......... $ 26.03 $ 23.77 $ 21.00 $ 18.23 $ 15.62 $ 12.55
---------- ---------- -------- -------- ------- -------
Income from investment operations:
Net investment income(A) ................... 0.22 0.40 0.31 0.28 0.26 0.25(B)
Net gains (losses) on securities
(both realized and unrealized) .......... (2.87) 2.78 3.48 2.74 2.62 3.11(B)
---------- ---------- -------- -------- ------- -------
Total income (loss) from investment
operations ................................. (2.65) 3.18 3.79 3.02 2.88 3.36
---------- ---------- -------- -------- ------- -------
Less distributions:
Dividends from net investment income ....... (0.41) (0.31) (0.26) (0.25) (0.27) (0.29)
Distributions from net realized gains
on securities ........................... (0.71) (0.61) (0.76) -- -- --
---------- ---------- -------- -------- ------- -------
Total distributions ........................... (1.12) (0.92) (1.02) (0.25) (0.27) (0.29)
---------- ---------- -------- -------- ------- -------
Net asset value, end of period ................ $ 22.26 $ 26.03 $ 23.77 $ 21.00 $ 18.23 $ 15.62
========== ========== ======== ======== ======= =======
Total return .................................. (10.41)%(C) 13.76% 18.69% 16.64% 18.59% 27.30%
========== ========== ======== ======== ======= =======
Ratios and supplemental data:
Net assets, end of period (in thousands) ... $2,882,987 $2,493,451 $958,830 $201,111 $48,451 $23,512
Ratios to average net assets (annualized):
Expenses, net of waivers ................ 0.57% 0.59% 0.60% 0.60% 0.66% 0.66%
Expenses, before waivers ................ 0.57% 0.59% 0.60% 0.60% 0.66% 0.66%
Net investment income, net of waivers ... 2.00% 1.82% 1.86% 1.58% 1.49% 1.88%
Net investment income (loss), before
waivers .............................. 2.00% 1.82% 1.86% 1.58% 1.49% 1.88%
Portfolio turnover rate .................... 7%(C) 20% 26% 25% 29% 27%
PlanAhead Class
------------------------------------------------------------------------
Six Months Year Ended Ended October
April 31 -------------------------------------------------------
30, 2008 2007 2006 2005 2004 2003
----------- ----------- ---------- -------- ------- -------
(unaudited)
Net asset value, beginning of period .......... $ 24.83 $ 22.74 $ 20.16 $ 17.54 $ 15.05 $ 12.09
---------- ---------- ---------- -------- ------- -------
Income from investment operations:
Net investment income(A) ................... 0.19 0.37 0.28 0.27 0.23 0.22(B)
Net gains (losses) on securities
(both realized and unrealized) .......... (2.73) 2.61 3.31 2.58 2.49 2.99(B)
---------- ---------- ---------- -------- ------- -------
Total income (loss) from investment
operations ................................. (2.54) 2.98 3.59 2.85 2.72 3.21
---------- ---------- ---------- -------- ------- -------
Less distributions:
Dividends from net investment income ....... (0.36) (0.28) (0.25) (0.23) (0.23) (0.25)
Distributions from net realized gains
on securities ........................... (0.71) (0.61) (0.76) -- -- --
---------- ---------- ---------- -------- ------- -------
Total distributions ........................... (1.07) (0.89) (1.01) (0.23) (0.23) (0.25)
---------- ---------- ---------- -------- ------- -------
Net asset value, end of period ................ $ 21.22 $ 24.83 $ 22.74 $ 20.16 $ 17.54 $ 15.05
========== ========== ========== ======== ======= =======
Total return .................................. (10.48)%(C) 13.46% 18.44% 16.33% 18.26% 26.99%
========== ========== ========== ======== ======= =======
Ratios and supplemental data:
Net assets, end of period (in thousands) ... $5,221,461 $5,198,835 $2,586,410 $526,357 $51,489 $21,331
Ratios to average net assets (annualized):
Expenses, net of waivers ................ 0.82% 0.83% 0.85% 0.86% 0.94% 0.95%
Expenses, before waivers ................ 0.82% 0.83% 0.85% 0.86% 0.94% 0.95%
Net investment income, net of waivers ... 1.76% 1.59% 1.61% 1.30% 1.21% 1.57%
Net investment income (loss), before
waivers .............................. 1.76% 1.59% 1.61% 1.30% 1.21% 1.57%
Portfolio turnover rate .................... 7%(C) 20% 26% 25% 29% 27%
(A) Class expenses per share were subtracted from net investment income per
share for the Fund before class expenses to determine net investment income
per share through October 31, 2005.
(B) For the year ended October 31, 2003, the net investment income and net
gains (losses) on securities (both realized and unrealized) has been
restated from 0.20 and 3.16, respectively for Institutional Class and 0.10
and 3.11, respectively for PlanAhead Class.
(C) Not annualized.
(D) Annualized.
(E) Portfolio turnover rate is for the period from November 1, 2004 through
October 31, 2005.
20
Service Class
-------------------------------------------
Six Months Year Ended May
Ended October 31, 31 to
April 30, ----------------- October
2008 2007 2006 31, 2005
----------- ------- ------- --------
(unaudited)
Net asset value, beginning of period .......... $ 24.70 $ 22.64 $ 20.13 $ 19.33
-------- ------- ------- -------
Income from investment operations:
Net investment income(A) ................... 0.15 0.31 0.26 0.01
Net gains (losses) on securities
(both realized and unrealized) .......... (2.71) 2.59 3.27 0.79
-------- ------- ------- -------
Total income (loss) from investment
operations ................................. (2.56) 2.90 3.53 0.80
-------- ------- ------- -------
Less distributions:
Dividends from net investment income ....... (0.33) (0.23) (0.26) --
Distributions from net realized gains
on securities ........................... (0.71) (0.61) (0.76) --
-------- ------- ------- -------
Total distributions ........................... (1.04) (0.84) (1.02) --
-------- ------- ------- -------
Net asset value, end of period ................ $ 21.10 $ 24.70 $ 22.64 $ 20.13
======== ======= ======= =======
Total return .................................. (10.59)%(C) 13.16% 18.18% 4.14%(C)
======== ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in thousands) ... $104,459 $99,854 $39,077 $11,604
Ratios to average net assets (annualized):
Expenses, net of waivers ................ 1.08% 1.08% 1.09% 1.14%(D)
Expenses, before waivers ................ 1.08% 1.08% 1.09% 1.77%(D)
Net investment income, net of waivers ... 1.51% 1.32% 1.39% 1.72%(D)
Net investment income (loss), before
waivers .............................. 1.51% 1.32% 1.39% 1.09%(D)
Portfolio turnover rate .................... 7%(C) 20% 26% 25%(E)
AMR Class
---------------------------------------------------------------------
Six Months
Ended Year Ended October 31,
April 30, ------------------------------------------------------
2008 2007 2006 2005 2004 2003
----------- -------- ---------- -------- -------- --------
(unaudited)
Net asset value, beginning of period .......... $ 25.80 $ 23.55 $ 20.78 $ 18.02 $ 15.44 $ 12.40
-------- -------- ---------- -------- -------- --------
Income from investment operations:
Net investment income(A) ................... 0.29 0.80 0.35 0.31 0.30 0.29
Net gains (losses) on securities
(both realized and unrealized) .......... (2.88) 2.41 3.47 2.73 2.58 3.06
-------- -------- ---------- -------- -------- --------
Total income (loss) from investment
operations ................................. (2.59) 3.21 3.82 3.04 2.88 3.35
-------- -------- ---------- -------- -------- --------
Less distributions:
Dividends from net investment income ....... (0.46) (0.35) (0.29) (0.28) (0.30) (0.31)
Distributions from net realized gains
on securities ........................... (0.71) (0.61) (0.76) -- -- --
-------- -------- ---------- -------- -------- --------
Total distributions ........................... (1.17) (0.96) (1.05) (0.28) (0.30) (0.31)
-------- -------- ---------- -------- -------- --------
Net asset value, end of period ................ $ 22.04 $ 25.80 $ 23.55 $ 20.78 $ 18.02 $ 15.44
======== ======== ========== ======== ======== ========
Total return .................................. (10.28)%(C) 14.03% 19.08% 16.95% 18.89% 27.64%
======== ======== ========== ======== ======== ========
Ratios and supplemental data:
Net assets, end of period (in thousands) ... $790,185 $972,260 $1,024,899 $848,219 $696,206 $598,869
Ratios to average net assets (annualized):
Expenses, net of waivers ................ 0.32% 0.32% 0.34% 0.35% 0.39% 0.36%
Expenses, before waivers ................ 0.32% 0.32% 0.34% 0.35% 0.39% 0.36%
Net investment income, net of waivers ... 2.28% 2.13% 2.18% 1.87% 1.79% 2.13%
Net investment income (loss), before
waivers .............................. 2.28% 2.13% 2.18% 1.87% 1.79% 2.13%
Portfolio turnover rate .................... 7%(C) 20% 26% 25% 29% 27%
21
(AMERICAN BEACON FUNDS(SM) LOGO)
DELIVERY OF DOCUMENTS
To reduce expenses, your financial institution may mail only one copy of the
Prospectus, Annual Report and Semi-Annual Report to those addresses shared by
two or more accounts. If you wish to receive individual copies of these
documents, please contact your financial institution. Delivery of individual
copies will commence thirty days after receiving your request.
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:
(GRAPHIC) (GRAPHIC)
BY E-MAIL: ON THE INTERNET:
american_beacon.funds@ambeacon.com Visit our website at
www.americanbeaconfunds.com
(GRAPHIC) (GRAPHIC)
BY TELEPHONE: BY MAIL:
Institutional Class American Beacon Funds
Call (800) 658-5811 P.O. Box 219643
AMR Class(SM) Kansas City, MO 64121-9643
Call (800) 345-2345
PlanAhead Class(R) and Service Class
Call (800) 388-3344
AVAILABILITY OF QUARTERLY PORTFOLIO AVAILABILITY OF PROXY VOTING POLICY AND
SCHEDULES RECORDS
In addition to the Schedule of A description of the policies and
Investments provided in each procedures the Fund uses to determine
semi-annual and annual report, the how to vote proxies relating to
Fund files a complete schedule of its portfolio securities is available in the
portfolio holdings with the Fund's Statement of Additional
Securities and Exchange Commission Information, is available free of charge
("SEC") on Form N-Q as of the first on the Fund's website
and third fiscal quarters. The Fund's (www.americanbeaconfunds.com) and by
Forms N-Q are available on the SEC's calling 1-800-967-9009 or by accessing
website at www.sec.gov. The Forms N-Q the SEC's website at www.sec.gov. The
may also be reviewed and copied at Fund's proxy voting record for the most
the SEC's Public Reference Room, 450 recent year ended June 30 is filed
Fifth Street, NW, Washington, DC annually with the SEC on Form N-PX. The
20549. Information regarding the Fund's Forms N-PX are available on the
operation of the SEC's Public SEC's website at www.sec.gov. The Fund's
Reference Room may be obtained by proxy voting record may also be obtained
calling 1-800-SEC-0330. A complete by calling 1-800-967-9009.
schedule of the Fund's portfolio
holdings is also available on the
Funds' website
(www.americanbeaconfunds.com)
approximately thirty days after the
end of each month.
FUND SERVICE PROVIDERS:
CUSTODIAN TRANSFER AGENT INDEPENDENT REGISTERED DISTRIBUTOR
STATE STREET BANK AND BOSTON FINANCIAL DATA PUBLIC ACCOUNTING FIRM FORESIDE FUND
TRUST SERVICES ERNST & YOUNG LLP SERVICES
Boston, Massachusetts Kansas City, Missouri Dallas, Texas Portland, Maine
This report is prepared for shareholders of the American Beacon Funds and may be
distributed to others only if preceded or accompanied by a current prospectus.
American Airlines, Inc. is not responsible for investments made in the American
Beacon Funds. American Beacon Funds is a service mark of AMR Corporation.
American Beacon Large Cap Value Fund is a service mark of American Beacon
Advisors, Inc.
GUIDANCE | VISION | EXPERIENCE
(AMERICAN BEACON FUNDS(SM) LOGO)
(GRAPHIC)
SEMI-ANNUAL REPORT
April 30, 2008
SMALL CAP VALUE FUND
About American Beacon
Since 1986, American Beacon Advisors has offered a variety of products and
investment advisory services to numerous institutional and retail clients,
including a variety of mutual funds, corporate cash management, and separate
account management.
Our clients include defined benefit plans, defined contribution plans,
foundations, endowments, corporations, financial planners, and other
institutional investors. With American Beacon Advisors, you can put the
experience of a multi-billion dollar asset management firm to work for your
company.
Contents
President's Message................................................. 1
Market and Performance Overview..................................... 2
Schedule of Investments............................................. 6
Additional Information.............................................. Back Cover
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.
Investing in the securities of small capitalization companies involves greater
risk and the possibility of greater price volatility than investing in larger
capitalization and more established companies.
American Beacon Funds April 30, 2008
(PHOTO OF WILLIAM F. QUINN)
FELLOW SHAREHOLDERS,
I am pleased to present to you the American Beacon Small Cap Value Fund
Semi-Annual Report for the six months ended April 30, 2008.
The American Beacon Small Cap Value Fund-Institutional Class reported a
total return of -8.53% for this six-month period, with an expense ratio of 0.81%
for the most recent fiscal year ended October 31, 2007.
The sub-prime mortgage crisis, rising oil and food prices all contributed
to a slowing economy that affected the U.S. equity markets negatively in the
past six months. This was evident when the S&P 500 and Dow Jones Industrial
Average indices reported returns of -9.64% and -6.79%, respectively, for this
period. During the period, the uncertainties surrounding banks, investment banks
and the entire financial system have resulted in an extraordinary amount of
volatility. We feel the market's strong recovery in April 2008 might be
foretelling a bottoming out over the short term, given market levels. We believe
the Fund's fundamental value investment philosophy and lower than average
expense ratio will continue to serve the Fund well over the longer term.
Please review the enclosed market overview, portfolio listings and detailed
financial data. As always, we welcome the opportunity to serve your financial
needs. To obtain further details about the American Beacon Funds family or to
access your account information, please visit our website at
www.americanbeaconfunds.com. Thank you for your continued confidence in the
American Beacon Small Cap Value Fund.
Sincerely,
/s/ William F. Quinn
William F. Quinn
President
American Beacon Funds
1
DOMESTIC EQUITY MARKET OVERVIEW
APRIL 30, 2008 (UNAUDITED)
Market volatility remained prevalent in the November-through-April time
frame as concerns escalated regarding inflation, housing, credit and the
long-term viability of some well-established financial institutions. Stock
prices declined markedly as investors did not discriminate by market
capitalization, investment style or geographic region. In sharp contrast to the
equity markets, commodities continued to soar as the dollar weakened further.
Responding to the liquidity crisis, the Federal Reserve ("Fed") provided
monetary stimulus not only through five cuts in interest rates over the course
of the six months (leaving the Federal Funds target rate at 2.00% on April 30,
2008, down from 4.50% on October 31, 2007), but also through significant
expansion of lending facilities to accept a wide variety of collateral from both
banks and brokerage firms. In their closely watched statement at the conclusion
of their meeting on April 30, 2008, the Fed issued a negative outlook on the
economy, suggesting that growth remained weak and could be further pressured by
"subdued" business investment. In addition, the Fed reiterated that financial
markets remained under "considerable" stress.
However, the month of April 2008 may have marked a turning point for equity
investors as stocks managed a strong rally as investors sought attractive
valuations in an economic environment that turned out not to be as bad as
initially feared. Several industry bellwethers reported solid profit news,
offering further encouragement to those non-financial sectors that have yet to
be affected by the credit crisis. Stocks were up across the board in April, with
all the major domestic market indices showing gains. Yields for U.S. Treasuries
increased (and prices for those securities dropped) as investors anticipated an
end to the Fed's easing campaign as well as in an attempt to seek better value
in the equity market.
Growth stocks in the Russell indices held up slightly better than their
value counterparts during the six-month period, although both styles declined.
Stock prices declined across all capitalization ranges; however, midcap
companies held up better than large caps, while smaller companies declined
sharply.
Weak equity performance was widespread over the semi-annual period. With
the exception of Energy, every sector in the broad market S&P 500 Index
declined. Despite interest rate cuts and relaxed Fed requirements, Financials
was the worst-performing sector, with a total return of -20.0%. Stocks in the
Information Technology, Telecommunication Services, Health Care and Consumer
Discretionary sectors also suffered double-digit declines. Other than Energy,
with a total return of 6.3%, there were no bright spots. Even Consumer Staples,
often viewed as a defensive category, pulled back slightly as investors worried
that consumer spending would not pick up anytime soon.
Since the financial crisis began last August, monetary policy makers had
been very aggressive, cutting interest rates seven different times. In addition,
the Fed had been innovative in contending with the current financial crisis by
developing (or resurrecting) policy initiatives and lending facilities in an
attempt to target liquidity without further pressuring the dollar or adding to
inflationary concerns. Yet despite these efforts, inflationary pressures
continued to build and the dollar continued to weaken. As a result, by the end
of April 2008, market interest rates had once again begun to move against the
Fed, this time upward, as global investors anticipated a pause in, if not a
completion of, the most recent Fed easing campaign.
2
PERFORMANCE OVERVIEW
AMERICAN BEACON SMALL CAP VALUE FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Institutional Class of the Small Cap Value Fund returned -8.53% for the
six months ended April 30, 2008, outperforming the Russell 2000(R) Value Index
("Index") return of -11.55% and the Lipper Small-Cap Value Funds Index return of
- -10.66% for the same period.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08
---------------------------- SINCE
6 MONTHS* 1 YEAR 5 YEARS INCEPTION
--------- ------ ------- ---------
Institutional Class(1, 5) .............. -8.53% -12.03% 15.39% 11.97%
PlanAhead Class(1, 2, 5) ............... -8.67% -12.28% 15.09% 11.69%
Service Class(1, 3, 5) ................. -8.79% -12.50% 14.77% 11.52%
AMR Class(1, 2, 5) ..................... -8.45% -11.84% 15.70% 12.27%
Lipper Small-Cap Value Funds Index(4) .. -10.66% -12.60% 15.02% 10.46%
Russell 2000 Value Index (4) ........... -11.55% -15.13% 14.08% 10.10%
* Not annualized
(1.) Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares.
(2.) Fund performance for the since inception period represents the total
returns achieved by the Institutional Class from 12/31/98 up to 3/1/99, the
inception date of the PlanAhead and AMR Classes, and the returns of the
PlanAhead and AMR Classes since inception of these Classes. Expenses of the
PlanAhead Class are higher than those of the Institutional Class. As a
result, total returns shown may be higher than they would have been had the
PlanAhead Class been in existence since 12/31/98. Expenses of the AMR Class
are lower than those of the Institutional Class. As a result, total returns
shown may be lower than they would have been had the AMR Class been in
existence since 12/31/98.
(3.) Fund performance for the since inception period represents the total
returns achieved by the Institutional Class from 12/31/98 up to 3/1/99, the
returns of the PlanAhead Class from 3/1/99 up to 5/1/03 and the returns of
the Service Class since its inception. Expenses of the Service Class are
higher than those of the Institutional and PlanAhead Classes. As a result,
total returns shown may be higher than they would have been had the Service
Class been in existence since 12/31/98. A portion of the fees charged to
the Service Class of the Fund was waived through 2004. Performance prior to
waiving fees was lower than the actual returns shown for periods through
2004.
(4.) Russell 2000(R) Value Index is a registered trademark of Frank Russell
Company. 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 Lipper Small-Cap Value Funds Index tracks the
results of the 30 largest mutual funds in the Lipper Small-Cap Value Funds
category. Lipper is an independent mutual fund research and ranking
service. One cannot directly invest in an index.
(5.) The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional, PlanAhead, Service and AMR Class
shares was 0.81%, 1.06%, 1.32% and 0.55%, 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 entirely due to stock selection as sector
allocation detracted value from the Fund's relative performance.
Holdings in the Industrials, Consumer Discretionary, and Energy sectors
were a significant source of excess performance. Top contributors in the
Industrials sector included Flowserve (up 57.8%), Ryder System (up 44.3%), and
Kirby (up 24.8%). In the Consumer Discretionary sector, positions in Valassis
Communications (up 44.2%), MDC (up 8.9%), and Rent-A-Center (up 34.6%) were the
major contributors. Cimarex Energy (up 54.1%) and Helmerich & Payne (up 70.4%)
were responsible for a large portion of the excess performance in the Energy
sector.
The Fund's overweighting in Consumer Discretionary, the second worst
performing sector in the Index, and an underweight in the Materials sector
detracted value relative to the Index. This negative performance was somewhat
offset by an overweighting in Energy, the best performing sector in the Index,
and an underweighting in Telecommunication Services, the worst performing sector
in the Index.
The sub-advisors continue to focus on uncovering investment opportunities
through stock selection that should benefit the Fund's performance over the
longer-term.
3
PERFORMANCE OVERVIEW
AMERICAN BEACON SMALL CAP VALUE FUND(SM)
APRIL 30, 2008 (UNAUDITED)
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
Valassis Communications, Inc.... 1.0%
Hanover Insurance Group, Inc.... 0.9%
Atmos Energy Corp............... 0.8%
Portland General Electric Co.... 0.8%
Great Plains Energy, Inc........ 0.8%
Korn/Ferry International........ 0.8%
Timken Co....................... 0.8%
Vishay Intertechnology, Inc..... 0.7%
Regal-Beloit Corp............... 0.7%
Oil States International, Inc... 0.7%
SECTOR ALLOCATION
% OF
EQUITIES
--------
Financials...................... 25.0%
Industrials..................... 19.1%
Consumer Discretionary.......... 15.0%
Information Technology.......... 10.8%
Energy.......................... 9.4%
Utilities....................... 6.3%
Materials....................... 5.0%
Health Care..................... 5.0%
Consumer Staples................ 2.4%
Telecommunication Services...... 2.0%
Investing in the securities of small-capitalization companies involves greater
risk and the possibility of greater price volatility than investing in larger
capitalization and more established companies.
4
FUND EXPENSES
AMERICAN BEACON SMALL CAP VALUE FUND(SM)
APRIL 30, 2008 (UNAUDITED)
FUND EXPENSE EXAMPLE
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs and (2) ongoing costs, including management fees, administrative service
fees, distribution (12b-1) fees, and other Fund expenses. The examples below 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, 2007
through April 30, 2008.
ACTUAL EXPENSES
The "Actual" lines of the table provide information about actual account
values and actual expenses. You may use the information in this line, 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 = 8.6), then multiply the result by the number
in the first line under the heading "Expenses Paid During Period" to estimate
the expenses you paid on your account during this period. Shareholders of the
PlanAhead and Institutional Classes that invest in the Fund through an IRA may
be subject to a custodial IRA fee of $12 that is typically deducted each
December. If your account was subject to a custodial IRA fee during the period,
your costs would have been $12 higher.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The "Hypothetical" lines of the table provide information about
hypothetical account values and hypothetical expenses based on the Fund's actual
expense ratio and an assumed 5% per year rate of return before expenses (not the
Fund's actual return). You may compare the ongoing costs of investing in the
Fund with other funds by contrasting this 5% hypothetical example and the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
The hypothetical account values and expenses may not be used to estimate the
actual ending account balance or expenses you paid for the period. Shareholders
of the PlanAhead and Institutional Classes that invest in the Fund through an
IRA may be subject to a custodial IRA fee of $12 that is typically deducted each
December. If your account was subject to a custodial IRA fee during the period,
your costs would have been $12 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. Similarly, the expense examples for other funds do not reflect any
transaction costs charged by those funds, such as sales charges (loads),
redemption fees or exchange fees. Therefore, the "Hypothetical" lines of the
table are useful in comparing ongoing costs only and will not help you determine
the relative total costs of owning different funds. If you were subject to any
transaction costs during the period, your costs would have been higher.
Beginning Ending
Account Account Expenses Paid
Value Value During Period*
11/1/07 4/30/08 11/1/07-4/30/08
--------- --------- ---------------
INSTITUTIONAL CLASS
Actual $1,000.00 $ 914.72 $3.86
Hypothetical $1,000.00 $1,020.84 $4.07
(5% return before expenses)
PLANAHEAD CLASS
Actual $1,000.00 $ 913.32 $5.04
Hypothetical $1,000.00 $1,019.59 $5.32
(5% return before expenses)
SERVICE CLASS
Actual $1,000.00 $ 912.07 $6.28
Hypothetical $1,000.00 $1,018.30 $6.62
(5% return before expenses)
AMR CLASS
Actual $1,000.00 $ 915.54 $2.62
Hypothetical $1,000.00 $1,022.13 $2.77
(5% return before expenses)
* Expenses are equal to the Fund's annualized expense ratios for the
six-month period of 0.81%, 1.06%, 1.32% and 0.55% for the Institutional,
PlanAhead, Service and AMR 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 (182) by days in the
year (366) to reflect the half-year period.
5
AMERICAN BEACON SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
COMMON STOCKS - 95.21%
COMMUNICATIONS - 1.35%
MEDIA- 1.35%
AH Belo Corp. ## ............................... 113,700 $ 1,109
Belo Corp. ..................................... 730,230 7,375
Courier Corp. + ................................ 65,669 1,546
Cox Radio, Inc. ## + ........................... 314,960 3,663
Getty Images, Inc. ## .......................... 78,700 2,569
Hearst-Argyle Television, Inc. + ............... 93,800 1,943
Journal Communications, Inc. ................... 115,943 668
McClatchy Co. + ................................ 25,400 267
Meredith Corp. ................................. 191,990 6,222
New York Times Co. + ........................... 354,300 6,909
Westwood One, Inc. ............................. 1,742,300 2,910
------------
TOTAL COMMUNICATIONS .............................. 35,181
------------
CONSUMER DISCRETIONARY - 14.25%
AUDIO/VIDEO PRODUCTS - 0.04%
Harman International Industries, Inc. .......... 23,200 948
------------
AUTO COMPONENTS - 1.91%
Aftermarket Technology Corp. ## ................ 25,000 573
American Axle & Manufacturing Holdings, Inc.+ .. 644,200 12,974
Gentex Corp. + ................................. 105,800 1,976
Lear Corp. ## .................................. 580,700 16,591
Modine Manufacturing Co. + ..................... 120,540 2,118
Superior Industries International, Inc. + ...... 46,500 944
Tenneco, Inc. ## ............................... 246,410 6,303
TRW Automotive Holdings Corp. ## ............... 327,300 8,366
------------
49,845
------------
AUTOMOBILES - 0.21%
Winnebago Industries, Inc. + ................... 344,000 5,535
------------
HOTELS, RESTAURANTS & LEISURE -1.13%
CBRL Group, Inc. + ............................. 109,611 4,049
CEC Entertainment, Inc. ## ..................... 25,700 956
Domino's Pizza, Inc. + ......................... 173,600 2,305
Jack in the Box, Inc. ## ....................... 52,300 1,399
JAKKS Pacific, Inc. ## + ....................... 140,100 3,291
Landry's Restaurants, Inc. + ................... 14,900 238
Lodgian, Inc. ## ............................... 495,000 4,806
Panera Bread Co. ## + .......................... 136,680 7,143
Ruby Tuesday, Inc. + ........................... 246,250 2,096
Speedway Motorsports, Inc. + ................... 121,500 3,164
------------
29,447
------------
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
HOUSEHOLD DURABLES -1.29%
Beazer Homes USA, Inc. + ....................... 111,900 $ 1,239
Blyth, Inc. .................................... 147,100 2,477
Cavco Industries, Inc. ## + .................... 44,210 1,765
Champion Enterprises, Inc. ## + ................ 446,050 4,603
Ethan Allen Interiors, Inc. + .................. 240,240 6,599
Furniture Brands International, Inc. + ......... 199,200 2,699
Knoll, Inc. .................................... 150,000 1,953
Lancaster Colony Corp. + ....................... 26,880 1,027
Leggett & Platt, Inc. + ........................ 51,700 858
M.D.C. Holdings, Inc. + ........................ 143,970 6,274
NVR, Inc. ## + ................................. 3,000 1,841
Russ Berrie & Co., Inc. ## + ................... 94,500 1,325
Ryland Group, Inc. ............................. 30,900 988
------------
33,648
------------
INTERNET & CATALOG RETAIL - 0.19%
Insight Enterprises, Inc. ## ................... 391,499 4,722
School Specialty, Inc. ## + .................... 13,500 397
------------
5,119
------------
LEISURE EQUIPMENT & PRODUCTS - 0.60%
Brunswick Corp. + .............................. 691,400 11,532
Polaris Industries, Inc. + ..................... 47,800 2,225
Scholastic Corp. ## + .......................... 64,500 1,816
------------
15,573
------------
MULTILINE RETAIL - 0.37%
BJ's Wholesale Club, Inc. ## + ................. 217,510 8,291
Saks, Inc. ## .................................. 102,200 1,330
------------
9,621
------------
SPECIALTY RETAIL - 6.27%
Aaron Rents, Inc. + ............................ 221,100 5,505
American Greetings Corp. + ..................... 106,800 1,912
AnnTaylor Stores Corp. ## ...................... 246,320 6,232
Asbury Automotive Group, Inc. .................. 305,430 5,085
AutoNation, Inc. ##+ ........................... 168,700 2,701
Bebe Stores, Inc. + ............................ 120,380 1,203
Cache, Inc. ## ................................. 138,750 1,701
Cato Corp. ..................................... 125,100 2,158
Charlotte Russe Holding, Inc. ## ............... 136,841 2,173
Charming Shoppes, Inc. ## + .................... 105,100 542
Childrens Place Retail Stores, Inc. ## ......... 145,290 3,378
Collective Brands, Inc. ## + ................... 53,100 657
Conn's, Inc. ## + .............................. 31,300 552
Dress Barn, Inc. ## + .......................... 195,300 2,629
Family Dollar Stores, Inc. ..................... 598,000 12,797
Foot Locker, Inc. .............................. 347,620 4,397
Genesco, Inc. ## + ............................. 19,200 426
See accompanying notes
6
AMERICAN BEACON SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
Group 1 Automotive, Inc. + ..................... 331,850 $ 8,854
Gymboree Corp. ## .............................. 154,250 6,667
Hibbett Sports, Inc. ## + ...................... 58,390 1,066
Interline Brands, Inc. ## ...................... 16,600 321
Jos. A. Bank Clothiers, Inc. ## + .............. 162,070 3,956
MarineMax, Inc. ## + ........................... 342,600 3,906
Men's Wearhouse, Inc. + ........................ 690,100 18,377
OfficeMax, Inc. ................................ 135,300 2,472
Pacific Sunwear of California ## ............... 478,100 6,411
Penske Auto Group, Inc. + ...................... 685,400 14,346
RadioShack Corp. + ............................. 52,400 728
Regis Corp. .................................... 200,620 5,858
Rent-A-Center, Inc. ## ......................... 519,450 11,184
Sonic Automotive, Inc., A Shares + ............. 541,300 10,983
Stage Stores, Inc. ............................. 96,320 1,516
Tractor Supply Co. ## + ........................ 32,600 1,159
Wet Seal, Inc. ## + ............................ 92,000 319
Williams-Sonoma, Inc. + ........................ 84,200 2,223
Zale Corp. ## + ................................ 449,710 9,318
------------
163,712
------------
TEXTILES & APPAREL - 2.24%
Brown Shoe Company, Inc. + ..................... 154,700 2,580
Columbia Sportswear Co. + ...................... 45,056 1,891
Jones Apparel Group, Inc. ...................... 454,400 7,193
Kenneth Cole Productions, Inc. + ............... 138,310 2,662
K-Swiss, Inc.+ ................................. 144,739 2,120
Phillips-Van Heusen Corp. ...................... 98,500 4,158
Quiksilver, Inc. ## ............................ 761,200 7,407
Skechers U.S.A., Inc. ## ....................... 90,200 2,133
Steven Madden Ltd. ## .......................... 142,815 2,701
Timberland Co. ## + ............................ 202,300 2,954
Warnaco Group, Inc. ## ......................... 236,800 10,926
Wolverine World Wide, Inc. ..................... 411,200 11,818
------------
58,543
------------
TOTAL CONSUMER DISCRETIONARY ...................... 371,991
------------
CONSUMER STAPLES - 2.31%
FOOD & DRUG RETAILING - 1.01%
Casey's General Stores, Inc. ................... 195,200 4,320
Great Atlantic & Pacific Tea Co. ## + .......... 45,292 1,246
Longs Drug Stores Corp. ........................ 271,270 10,867
Spartan Stores, Inc. ........................... 376,200 7,855
Winn-Dixie Stores, Inc. ## ..................... 112,900 2,002
------------
26,290
------------
FOOD PRODUCTS - 1.05%
Chiquita Brands International, Inc. ## + ....... 93,700 2,132
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
Del Monte Foods Co. ............................ 848,500 $ 7,653
JM Smucker Co. ................................. 39,410 1,966
Lance, Inc. + .................................. 153,900 3,226
Ralcorp Holdings, Inc. ## + .................... 131,580 8,032
Sanderson Farms, Inc. + ........................ 96,700 4,029
Smithfield Foods, Inc. ## + .................... 5,200 149
TreeHouse Foods, Inc. ## ....................... 16,000 363
------------
27,550
------------
TOBACCO - 0.25%
Universal Corp. + .............................. 101,300 6,502
------------
TOTAL CONSUMER STAPLES ......................... 60,342
------------
ENERGY - 8.93%
ENERGY EQUIPMENT & SERVICES - 4.55%
Basic Energy Services, Inc. ## + ............... 200,400 4,649
CARBO Ceramics, Inc. + ......................... 101,640 4,831
Complete Production Services, Inc. ## .......... 172,400 4,657
Dril-Quip, Inc. ## ............................. 77,090 4,407
Grey Wolf, Inc. ## + ........................... 870,700 5,459
Gulfmark Offshore, Inc. ## + ................... 110,200 6,590
Hercules Offshore, Inc. ## ..................... 153,100 4,036
Key Energy Services, Inc. ## ................... 255,900 3,506
Lufkin Industries, Inc. ........................ 36,700 2,769
Oil States International, Inc. ## + ............ 381,370 19,091
Parker Drilling Co. ## + ....................... 288,200 2,311
Patterson-UTI Energy, Inc. + ................... 493,000 13,774
SEACOR Holdings, Inc. ## ....................... 38,600 3,285
Superior Energy Services, Inc. ## .............. 23,800 1,056
Superior Well Services, Inc. ## + .............. 99,400 2,367
Tetra Technologies, Inc. ## + .................. 158,190 2,572
Tidewater, Inc. + .............................. 276,260 18,018
Trico Marine Services, Inc. ## + ............... 30,800 1,161
UnitCorp. ## ................................... 152,370 9,677
W-H Energy Services, Inc. ## ................... 60,910 4,708
------------
118,924
------------
OIL & GAS - 4.38%
Alon USA Energy, Inc.+ ......................... 38,666 539
Cimarex Energy Co. ............................. 236,590 14,739
Delek US Holdings, Inc. ........................ 63,400 699
Encore Acquisition Co. ## ...................... 200,300 9,140
EXCO Resources, Inc. ## + ...................... 768,400 17,151
Helix Energy Solutions Group, Inc. ## .......... 47,000 1,624
Holly Corp. .................................... 245,200 10,171
Parallel Petroleum Corp. ## .................... 232,800 4,933
Penn Virginia Corp. ............................ 179,900 9,445
Pioneer Drilling Co. ## + ...................... 373,580 6,100
See accompanying notes
7
AMERICAN BEACON SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
Rosetta Resources, Inc. ## ..................... 23,482 $ 512
St. Mary Land & Exploration Co. ................ 374,700 16,382
Stone Energy Corp. ## .......................... 118,700 7,234
Swift Energy Co. ## + .......................... 93,900 4,896
W&T Offshore, Inc. + ........................... 261,000 10,675
------------
114,240
------------
TOTAL ENERGY ...................................... 233,164
------------
FINANCIALS - 23.80%
BANKS - 8.46%
1st Source Corp. ............................... 20,300 402
Anchor BanCorp Wisconsin, Inc. + ............... 49,838 757
Associated Banc-Corp. + ........................ 318,500 9,004
Astoria Financial Corp. ........................ 80,600 1,910
BancorpSouth, Inc. ............................. 310,530 7,462
Bank of Hawaii Corp. ........................... 175,100 9,601
BankAtlantic Bancorp, Inc. + ................... 376,010 1,158
Cathay General Bancorp + ....................... 184,200 3,141
Chemical Financial Corp. ....................... 114,031 2,769
Citizens Republic Bancorp, Inc. + .............. 320,200 2,642
City National Corp. + .......................... 192,180 9,325
Colonial BancGroup, Inc. + ..................... 212,400 1,729
Columbia Banking System, Inc. .................. 75,900 2,055
Community Trust Bancorp, Inc. .................. 30,400 914
Corus Bankshares, Inc. + ....................... 32,328 237
Cullen/Frost Bankers, Inc. ..................... 148,224 8,274
CVB Financial Corp. + .......................... 352,747 4,050
F.N.B. Corp. + ................................. 255,900 3,956
First Commonwealth Financial Corp. + ........... 57,800 720
First Horizon National Corp. + ................. 634,900 6,857
First Midwest BancorD Inc. + .................. 157,700 4,026
First Niagara Financial Group, Inc. ............ 18,700 270
FirstMerit Corp. ............................... 277,290 5,690
Flushing Financial Corp. ....................... 110,330 2,154
Frontier Financial Corp. + ..................... 72,300 1,157
Fulton Financial Corp. + ....................... 723,778 9,025
Hancock Holding Co. + .......................... 38,200 1,577
Harleysville National Corp. + .................. 18,677 270
Home Federal Bancorp Inc. ...................... 201,700 2,408
IBERIABANK Corp. + ............................. 53,700 2,588
International Bancshares Corp. ................. 330,950 8,270
Intervest Bancshares Corp. ..................... 74,380 769
National Penn Bancshares, Inc. + ............... 207,725 3,467
NBT Bancorp, Inc. + ............................ 136,506 3,110
NewAlliance Bancshares, Inc. + ................. 186,000 2,504
Old National Bancorp + ......................... 186,120 3,185
Pacific Capital Bancorp NA + ................... 420,730 8,574
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
Park National Corp. + .......................... 59,800 $ 4,545
Prosperity Bancshares, Inc. + .................. 34,200 1,059
Provident Bankshares Corp. + ................... 26,220 336
S&T Bancorp, Inc. + ............................ 31,564 1,075
Southwest Bancorp, Inc. ........................ 105,880 1,863
Sterling Bancshares, Inc. ...................... 610,650 6,345
Susquehanna Bancshares, Inc. + ................. 311,700 6,200
SVB Financial Group ## ......................... 11,000 535
TCF Financial Corp. + .......................... 93,100 1,620
Trustmark Corp. + .............................. 280,760 6,115
Umpqua Holdings Corp. + ........................ 56,700 836
United Bankshares, Inc. + ...................... 207,471 6,035
Washington Federal, Inc. ....................... 535,654 12,754
Washington Trust Bancorp, Inc. + ............... 33,780 817
Webster Financial Corp. ........................ 446,000 11,618
WesBanco, Inc. + ............................... 113,300 2,437
Whitney Holding Corp. + ........................ 361,345 8,459
Wilmington Trust Corp. + ....................... 338,650 11,135
Wintrust Financial Corp. + ..................... 32,000 1,015
------------
220,806
------------
DIVERSIFIED FINANCIALS - 2.81%
Apollo Investment Corp. + ...................... 362,850 5,871
Ares Capital Corp. + ........................... 377,000 4,245
Asta Funding, Inc. + ........................... 147,850 2,110
CIT Group, Inc. ................................ 63,300 689
Credit Acceptance Corp. ## + ................... 73,400 1,413
Ezcorp, Inc. ## ................................ 430,500 5,226
Financial Federal Corp. + ...................... 287,090 6,704
First Cash Financial Services, Inc. ## + ....... 406,900 6,038
Investment Technology Group, Inc. ## ........... 216,600 10,453
Jefferies Group, Inc. ## ....................... 102,800 1,933
KKR Financial Holdings LLC ..................... 160,510 2,039
Knight Capital Group, Inc. ## .................. 216,700 4,054
MCG Capital Corp. + ............................ 391,450 2,999
Nelnet, Inc. + ................................. 105,700 1,352
Piper Jaffray Co. ## + ......................... 156,613 5,835
Raymond James Financial, Inc. + ................ 58,200 1,674
Texas Capital Bancshares, Inc. ## + ............ 77,570 1,431
World Acceptance Corp. ## + .................... 235,350 9,268
------------
73,334
------------
INSURANCE - 9.28%
American Equity Investment Life Holding Co. + .. 240,700 2,323
American Financial Group, Inc. ................. 202,100 5,542
American National Insurance Co. ................ 11,600 1,297
AmTrust Financial Services, Inc. + ............. 39,000 606
Argo Group International Holdings Ltd. ## ...... 129,157 4,626
See accompanying notes
8
AMERICAN BEACON SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
Aspen Insurance Holdings Ltd. .................. 439,480 $ 11,422
Assured Guaranty Ltd. + ........................ 370,550 9,371
CNA Surety Corp. ## ............................ 186,100 2,462
Conseco, Inc. ## ............................... 692,199 8,064
Delphi Financial Group, Inc. ................... 372,050 10,127
Employers Holdings, Inc. ....................... 455,600 8,693
Endurance Specialty Holdings Ltd. .............. 16,600 616
FBL Financial Group, Inc. ...................... 126,948 3,515
Fidelity National Financial, Inc. .............. 65,600 1,049
First American Corp. ........................... 34,900 1,145
Hanover Insurance Group, Inc. .................. 545,550 24,484
Harleysville Group, Inc. ....................... 127,704 4,655
HCC Insurance Holdings, Inc. ................... 263,470 6,502
Horace Mann Educators Corp. .................... 309,400 5,235
Infinity Property and Casualty Corp. ........... 69,398 2,690
IPC Holdings Ltd. .............................. 24,400 710
LandAmerica Financial Group, Inc. + ............ 65,050 1,867
Max Capital Group Ltd. ......................... 23,800 557
Mercury General Corp. + ........................ 231,400 11,545
Montpelier Re Holdings Ltd. + .................. 38,800 640
National Western Life Insurance Co. ............ 2,400 609
Navigators Group, Inc. ## ...................... 130,550 6,397
Odyssey Re Holdings Corp. + .................... 295,300 10,566
OneBeacon Insurance Group Ltd. ................. 21,200 417
Philadelphia Consolidated Holding Co. ## ....... 215,940 7,964
Phoenix Cos., Inc. ............................. 365,400 4,750
Platinum Underwriters Holdings Ltd. ............ 18,400 660
PMA Capital Corp. ## + ......................... 224,300 2,082
Presidential Life Corp. ........................ 124,800 2,117
ProAssurance Corp. ## .......................... 12,000 635
Protective Life Corp. .......................... 295,880 12,610
Reinsurance Group of America, Inc. ............. 253,300 13,167
RLI Corp. + .................................... 46,400 2,227
Safety Insurance Group, Inc. ................... 68,500 2,459
Selective Insurance Group, Inc. ................ 199,200 4,247
StanCorp Financial Group, Inc. ................. 358,000 18,344
State Auto Financial Corp. ..................... 117,400 3,234
Stewart Information Services Corp. + ........... 274,300 6,718
United America Indemnity Ltd. ## ............... 299,797 4,635
United Fire & Casualty, Co. .................... 81,700 2,692
Unitrin, Inc. + ................................ 103,300 3,919
Universal American Corp. ## .................... 52,000 558
Zenith National Insurance Corp. ................ 38,500 1,430
------------
242,180
------------
REAL ESTATE - 3.25%
Alexandria Real Estate Equities, Inc. .......... 19,570 2,055
BioMed Realty Trust, Inc. ...................... 59,570 1,549
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
California Coastal Communities, Inc. ## + ...... 198,500 $ 1,310
CapLease, Inc. + ............................... 912,900 7,586
Care Investment Trust, Inc. .................... 159,140 1,762
Cohen & Steers, Inc. + ......................... 59,900 1,672
Corrections Corp. of America ## ................ 86,460 2,205
DiamondRock Hospitality Co. .................... 502,200 6,403
Education Realty Trust, Inc. ................... 220,250 2,938
Entertainment Properties Trust + ............... 73,200 3,906
Health Care Real Estate Investment
Trust, Inc. ................................. 52,520 2,545
Jones Lang LaSalle, Inc. ....................... 12,500 970
LaSalle Hotel Properties + ..................... 221,240 7,095
Lexington Realty Trust + ....................... 580,370 8,357
MI Developments, Inc. .......................... 425,100 11,490
Mission West Properties, Inc. + ................ 139,990 1,665
Redwood Trust, Inc. + .......................... 217,800 7,251
Sunstone Hotel Investors, Inc. ................. 334,850 6,255
U-Store-lt Trust + ............................. 643,000 7,761
------------
84,775
------------
TOTAL FINANCIALS .................................. 621,095
------------
HEALTH CARE - 4.79%
BIOTECHNOLOGY - 0.22%
Charles River Laboratories
International, Inc. ## ...................... 54,430 3,160
Invitrogen Corp. ## ............................ 28,210 2,639
------------
5,799
------------
HEALTH CARE EQUIPMENT & SUPPLIES - 0.26%
Allscripts Healthcare Solutions, Inc. ## + ..... 106,500 1,188
Hillenbrand, Inc. ## ........................... 37,910 722
Hill-Rom Holdings, Inc. ........................ 37,910 953
Kensey Nash Corp. ## ........................... 95,510 2,785
Medical Action Industries, Inc. ## + ........... 60,770 996
------------
6,644
------------
HEALTH CARE PROVIDERS & SERVICES - 3.28%
Air Methods Corp. ## + ......................... 91,530 3,670
Amedisys, Inc. ## + ............................ 111,320 5,766
AMERIGROUP Corp. ## ............................ 210,000 5,458
Apria Healthcare Group, Inc. ## ................ 215,700 3,801
HealthSouth Corp. ## + ......................... 215,030 4,230
Healthspring, Inc. ## .......................... 542,110 9,129
LifePoint Hospitals, Inc. ## ................... 428,900 12,918
Lincare Holdings, Inc. ## ...................... 60,700 1,477
Magellan Health Services, Inc. ## .............. 129,950 5,015
MAXIMUS, Inc. .................................. 496,875 18,842
MDS, Inc. ## ................................... 75,100 1,495
Odyssey Healthcare, Inc. ## .................... 243,450 2,228
See accompanying notes
9
AMERICAN BEACON SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
Pediatrix Medical Group, Inc. ## ............... 101,760 $ 6,922
Res-Care, Inc. ## .............................. 279,870 4,559
------------
85,510
------------
PHARMACEUTICALS -1.03%
King Pharmaceuticals, Inc. ## .................. 148,900 1,398
KV Pharmaceutical Co. ## + ..................... 161,850 3,956
Medicines Co. ## ............................... 190,040 3,753
Medici's Pharmaceutical Corp. + ................ 71,560 1,474
NBTY, Inc. ## .................................. 367,950 10,358
Sciele Pharma, Inc. ## + ....................... 313,050 6,033
------------
26,972
------------
TOTAL HEALTH CARE ................................. 124,925
------------
INDUSTRIALS- 18.19%
AEROSPACE & DEFENSE -1.19%
Alliant Techsystems, Inc. ## + ................. 9,410 1,035
BE Aerospace, Inc. ## .......................... 113,240 4,570
Ceradyne, Inc. ## + ............................ 57,300 2,233
Curtiss-Wright Corp. ........................... 161,990 7,693
Esterline Technologies Corp. ## ................ 100,650 5,602
Moog, Inc. ## .................................. 95,380 4,112
Triumph Group, Inc. + .......................... 99,800 5,875
------------
31,120
------------
BUILDING PRODUCTS - 1.46%
Apogee Enterprises, Inc. + ..................... 288,750 6,442
Crane Co. ...................................... 234,700 9,609
Drew Industries, Inc. ## + ..................... 90,140 2,198
Insituform Technologies, Inc. ## + ............. 362,700 6,137
Lennox International, Inc. ..................... 270,700 8,971
NCI Building Systems, Inc. ## + ................ 16,500 398
Simpson Manufacturing Co., Inc. + .............. 48,000 1,267
Universal Forest Products, Inc. + .............. 87,292 3,030
------------
38,052
------------
COMMERCIAL SERVICES & SUPPLIES - 6.45%
American Ecology Corp. ......................... 92,460 2,458
Bowne & Co., Inc. .............................. 117,400 1,954
Bright Horizons Family Solutions, Inc. ## ...... 57,350 2,719
Brink's Co. .................................... 40,220 2,926
Casella Waste Systems, Inc. ## ................. 255,900 2,728
Clean Harbors, Inc. ## + ....................... 110,970 7,321
Consolidated Graphics, Inc. ## ................. 84,150 4,895
Con-way, Inc. .................................. 286,100 13,232
Corinthian Colleges, Inc. ## ................... 40,800 463
Ennis, Inc. .................................... 108,700 1,841
Headwaters, Inc. ## + .......................... 201,200 2,300
Heidrick & Struggles International, Inc. + ..... 52,800 1,580
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
Herman Miller, Inc. ............................ 183,000 $ 4,269
Hewitt Associates, Inc. ## ..................... 50,200 2,058
Hudson Highland Group, Inc. ## ................. 510,500 4,528
Kelly Services, Inc. ........................... 569,500 12,671
Kforce, Inc. ## ................................ 344,250 2,833
Korn/Ferry International ## .................... 1,078,700 20,129
LECG Corp. ## .................................. 207,800 2,159
McGrath Rentcorp + ............................. 131,928 3,408
Mobile Mini, Inc. ## + ......................... 330,600 7,025
PHH Corp. ## ................................... 318,600 6,254
Pre-Paid Legal Services, Inc. ## + ............. 54,670 2,391
Providence Service Corp. ## + .................. 133,720 3,763
Sotheby's + .................................... 321,000 8,892
Spherion Corp. ## .............................. 371,900 1,837
Steelcase, Inc., A Shares + .................... 136,270 1,510
TAL International Group, Inc. + ................ 33,900 821
TetraTech, Inc. ## + ........................... 141,970 3,000
TrueBlue, Inc. ## .............................. 186,100 2,369
United Stationers, Inc. ## ..................... 53,160 2,344
Valassis Communications, Inc. ## + ............. 1,781,400 25,296
Waste Connections, Inc. ## ..................... 196,680 6,307
------------
168,281
------------
CONSTRUCTION & ENGINEERING - 0.77%
Comfort Systems USA, Inc. ...................... 97,462 1,326
EMCOR Group, Inc. ## ........................... 227,500 5,701
Granite Construction, Inc. ..................... 167,500 5,745
Perini Corp. ## ................................ 199,550 7,220
------------
19,992
------------
DIVERSIFIED MANUFACTURING - 0.73%
Acuity Brands, Inc. + .......................... 41,594 1,990
Andersons, Inc. ................................ 9,200 418
Barnes Group, Inc. + ........................... 145,000 3,782
Kennametal, Inc. ............................... 367,200 12,767
------------
18,957
------------
ELECTRICAL EQUIPMENT - 1.29%
A.O. Smith Corp. + ............................. 102,800 3,180
Anixter International, Inc. ## + ............... 158,359 9,022
Regal-Beloit Corp. + ........................... 517,150 19,181
Superior Essex, Inc. ## ........................ 74,100 2,203
------------
33,586
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.56%
Diebold, Inc. .................................. 322,200 12,630
PerkinElmer, Inc. .............................. 76,640 2,036
------------
14,666
------------
See accompanying notes
10
AMERICAN BEACON SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
ENGINEERING/R&D SERVICES - 0.09%
URS Corp. ## ................................... 61,600 $ 2,485
------------
FREIGHT TRANSPORTATION - 0.81%
Pacer International, Inc. ...................... 166,200 3,084
Ryder System, Inc. ............................. 245,300 16,796
TBS International Ltd. ## + .................... 34,500 1,386
------------
21,266
------------
INDUSTRIAL CONGLOMERATES - 0.20%
Carlisle Cos. , Inc. + ......................... 180,250 5,206
------------
MACHINERY - 2.94%
Actuant Corp. + ................................ 54,800 1,856
Applied Industrial Technologies, Inc. .......... 107,200 2,590
Brady Corp. .................................... 172,750 5,865
Flowserve Corp. ................................ 30,200 3,748
Gardner Denver, Inc. ## ........................ 180,000 8,361
Harsco Corp. ................................... 104,700 6,212
Kaydon Corp. + ................................. 240,200 12,579
Lincoln Electric Holdings, Inc. ................ 10,700 816
Miller Industries, Inc. ## ..................... 231,100 2,607
Mueller Industries, Inc. ....................... 181,710 5,882
NACCO Industries, Inc. ......................... 5,700 512
Oshkosh Corp. .................................. 106,400 4,320
Reliance Steel & Aluminum Co. + ................ 29,200 1,775
Timken Co. ..................................... 542,100 19,597
------------
76,720
------------
MARINE-0.52%
Alexander & Baldwin, Inc. + .................... 25,000 1,256
Genco Shipping & Trading Ltd. + ................ 77,900 5,270
Hornbeck Offshore Services, Inc. ## + .......... 42,700 2,129
Overseas Shipholding Group, Inc. + ............. 67,000 5,042
------------
13,697
------------
RENTAL AUTO/EQUIPMENT - 0.25%
United Rentals, Inc. ## ........................ 346,200 6,522
------------
ROAD & RAIL - 0.85%
Arkansas Best Corp. + .......................... 106,800 4,217
Celadon Group, Inc. ## + ....................... 341,300 3,512
GATX Corp. + ................................... 110,600 4,866
Heartland Express, Inc. + ...................... 395,160 6,113
Landstar System, Inc. .......................... 29,600 1,538
Werner Enterprises, Inc. + ..................... 70,100 1,363
YRC Worldwide, Inc. ## + ....................... 30,000 488
------------
22,097
------------
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
TRADING COMPANIES & DISTRIBUTORS - 0.08%
MSC Industrial Direct Co., Inc. + .............. 42,570 $ 2,076
------------
TOTAL INDUSTRIALS ................................. 474,723
------------
INFORMATION TECHNOLOGY - 10.28%
COMMUNICATIONS EQUIPMENT - 0.52%
ADC Telecommunications, Inc. ## ................ 58,700 823
Avocent Corp. ## ............................... 197,650 3,856
CommScope, Inc. ## ............................. 24,600 1,170
Comtech Telecommunications Corp. ## ............ 93,040 3,603
Foundry Networks, Inc. ## ...................... 75,000 955
Plantronics, Inc. .............................. 33,300 829
Sonus Networks, Inc. ## + ...................... 134,400 539
Sycamore Networks, Inc. ## ..................... 582,600 1,876
------------
13,651
------------
COMPUTERS & PERIPHERALS - 1.23%
Avid Technology, Inc. ## + ..................... 98,540 2,057
Cray, Inc. ## + ................................ 327,800 2,042
Electronics for Imaging, Inc. ## ............... 406,040 5,855
Ingram Micro, Inc. ## .......................... 1,104,000 18,779
Mercury Computer Systems, Inc. ## + ............ 420,300 3,371
------------
32,104
------------
ELECTRONIC COMPONENTS - 0.50%
Plexus Corp. ## ................................ 505,200 12,170
Thomas & Betts Corp. ## ........................ 26,090 978
------------
13,148
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.62%
Benchmark Electronics, Inc. ## ................. 740,950 13,174
Coherent, Inc. ## .............................. 10,700 319
IKON Office Solutions, Inc. .................... 713,000 7,807
Littelfuse, Inc. ## ............................ 305,100 11,216
Methode Electronics, Inc. ...................... 674,800 7,315
MTS Systems Corp. .............................. 84,760 2,914
TTM Technologies, Inc. ## ...................... 481,150 6,404
Vishay Intertechnology, Inc. ## ................ 2,030,400 19,187
------------
68,336
------------
INTERNET SOFTWARE & SERVICES - 0.39%
Acme Packet, Inc. ## ........................... 49,300 451
Interwoven, Inc. ## ............................ 175,440 1,976
Netgear, Inc. ## ............................... 196,545 3,186
NIC, Inc. + .................................... 224,760 1,456
United Online, Inc. + .......................... 286,380 3,059
------------
10,128
------------
IT CONSULTING & SERVICES - 1.28%
CACI International, Inc. ## + .................. 130,000 6,516
First Advantage Corp. ## + ..................... 52,700 1,081
See accompanying notes
11
AMERICAN BEACON SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
ManTech International Corp. ## ................. 146,600 $ 7,003
MPS Group, Inc. ## ............................. 77,600 833
Patni Computer Systems Ltd., ADR + ............. 218,800 2,936
Phase Forward, Inc. ## ......................... 163,710 3,012
SRA International, Inc. ## ..................... 219,200 5,758
SYNNEX Corp. ## + .............................. 156,300 3,732
Tech Data Corp. ## ............................. 63,200 2,124
Unisys Corp. ## ................................ 83,100 346
------------
33,341
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 2.11%
Advanced Energy Industries, Inc. ## ............ 167,216 2,341
Amkor Technology, Inc. ## + .................... 77,000 735
Brooks Automation, Inc. ## ..................... 1,134,100 11,749
Cirrus Logic, Inc. ## .......................... 271,270 1,939
Cymer, Inc. ##+ ................................ 117,760 3,061
FEI Co. ##+ .................................... 164,510 3,598
MKS Instruments, Inc. ## ....................... 408,780 9,341
Novellus Systems, Inc. ## + .................... 34,000 743
ON Semiconductor Corp. ## + .................... 1,395,800 10,427
Photronics, Inc. ## ............................ 121,200 1,285
RF Micro Devices, Inc. ## + .................... 257,500 868
Rudolph Technologies, Inc. ## .................. 135,090 1,372
Sigma Designs, Inc. ## + ....................... 39,800 712
Teradyne, Inc. ## .............................. 341,490 4,538
Ultra Clean Holdings ## ........................ 141,670 1,514
Zoran Corp. ## ................................. 64,500 849
------------
55,072
------------
SOFTWARE- 1.63%
Aspen Technology, Inc. ## ...................... 287,610 3,952
EPIQ Systems, Inc. ## + ........................ 187,256 2,891
Lawson Software, Inc. ## ....................... 465,300 3,718
Mentor Graphics Corp. ## ....................... 1,289,500 12,985
Novell, Inc. ## ................................ 618,000 3,881
Omnicell, Inc. ## .............................. 131,900 1,585
Parametric Technology Corp. ## ................. 189,470 3,303
RealNetworks, Inc. ## .......................... 219,100 1,350
Sybase, Inc. ## + .............................. 303,230 8,921
------------
42,586
------------
TOTAL INFORMATION TECHNOLOGY ...................... 268,366
------------
MATERIALS - 4.74%
CHEMICALS - 2.29%
Ashland, Inc. .................................. 31,300 1,659
Cytec Industries, Inc. ......................... 10,500 620
FMC Corp ....................................... 172,140 10,807
Georgia Gulf Corp. + ........................... 542,200 3,259
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
H.B. Fuller Co. + .............................. 192,700 $ 4,447
Hercules, Inc. ................................. 515,600 9,693
International Flavors & Fragrances, Inc. ....... 21,700 990
Olin Corp. ..................................... 314,600 6,345
OM Group, Inc. ## .............................. 5,200 285
PolyOne Corp. ## ............................... 1,898,100 14,008
RPM International, Inc. ........................ 291,300 6,496
Tronox, Inc. + ................................. 397,900 1,225
------------
59,834
------------
CONSTRUCTION MATERIALS - 0.07%
Ameron International Corp. + ................... 7,700 761
Eagle Materials, Inc.+ ......................... 25,300 918
------------
1,679
------------
CONTAINERS & PACKAGING - 0.32%
Packaging Corp. of America ..................... 127,200 2,796
Rock-Tenn Co. .................................. 38,900 1,320
Silgan Holdings, Inc. .......................... 37,958 2,022
Sonoco Products Co. ............................ 32,300 1,064
Temple-Inland, Inc. + .......................... 107,900 1,259
------------
8,461
------------
METALS & MINING - 1.82%
A.M. Castle & Co. ## ........................... 11,300 349
AMCOL International Corp. + .................... 102,680 3,050
Century Aluminum Co. ## + ...................... 178,800 12,389
Commercial Metals Co. .......................... 214,500 6,680
Foundation Coal Holdings, Inc. ................. 145,200 8,709
Gibraltar Industries, Inc. + ................... 277,450 2,899
GrafTech Int'l Ltd. ## ......................... 490,300 9,635
USEC, Inc. ## + ................................ 95,100 441
Worthington Industries, Inc. + ................. 190,800 3,436
------------
47,588
------------
PAPER & FOREST PRODUCTS - 0.24%
Glatfelter ..................................... 151,730 2,214
Louisiana-Pacific Corp. ........................ 91,100 1,048
Neenah Paper, Inc. + ........................... 75,970 1,746
Wausau Paper Corp. + ........................... 144,920 1,122
------------
6,130
------------
TOTAL MATERIALS ................................... 123,692
------------
TELECOMMUNICATION SERVICES - 0.58%
DIVERSIFIED TELECOMMUNICATION - 0.58%
Cincinnati Bell, Inc. ## ....................... 2,068,530 9,598
Harris Stratex Networks, Inc. ## + ............. 144,690 1,373
NeuStar, Inc. ## + ............................. 155,500 4,278
------------
TOTAL TELECOMMUNICATION SERVICES .................. 15,249
------------
See accompanying notes
12
AMERICAN BEACON SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
UTILITIES - 5.99%
Electric Utilities - 4.11%
ALLETE, Inc. ................................... 84,400 $ 3,525
Avista Corp. ................................... 117,900 2,421
Black Hills Corp. + ............................ 261,590 10,205
CH Energy Group, Inc. + ........................ 10,800 382
El Paso Electric Co. ## ........................ 125,540 2,833
Great Plains Energy, Inc. + .................... 792,600 20,322
Hawaiian Electric Industries, Inc. + ........... 200,870 4,951
Idacorp, Inc. + ................................ 324,280 10,520
NSTAR .......................................... 84,900 2,735
OGE Energy Corp. ............................... 388,300 12,694
Pike Electric Corp. ## ......................... 94,590 1,517
PNM Resources, Inc. + .......................... 63,700 923
Portland General Electric Co. .................. 852,910 20,470
Puget Energy, Inc. ............................. 99,700 2,713
Sierra Pacific Resources Corp. ................. 80,000 1,090
Westar Energy, Inc. + .......................... 423,000 9,809
------------
107,110
------------
GAS UTILITIES - 1.85%
AGL Resources, Inc. ............................ 385,940 13,122
Atmos Energy Corp. ............................. 751,980 20,815
Nicor, Inc. + .................................. 177,500 6,234
Southwest Gas Corp. ............................ 56,100 1,619
UGI Corp. ...................................... 98,960 2,573
WGL Holdings, Inc. + ........................... 121,500 3,985
------------
48,348
------------
WATER UTILITIES - 0.03%
SJW Corp. + .................................... 25,270 760
------------
TOTAL UTILITIES ................................... 156,218
------------
TOTAL COMMON STOCKS ............................... 2,484,946
------------
SHORT TERM INVESTMENTS - 5.09%
American Beacon Money Market Select Fund++ ..... 123,316,094 123,316
PAR
AMOUNT
-----------
U.S. Treasury Bill,
1.34%, Due 6/12/2008 # ...................... $ 9,514 9,500
------------
TOTAL SHORT TERM INVESTMENTS 132,816
------------
SHARES
-----------
SECURITIES LENDING COLLATERAL - 24.71%
American Beacon Cash Plus Trust ++ 519,389,408 519,390
SHARES VALUE
------------ ------------
(DOLLARS IN THOUSANDS)
American Beacon Money Market Select Fund ++ .... 125,695,388 $ 125,695
------------
TOTAL SECURITIES LENDING COLLATERAL ............... 645,085
------------
TOTAL INVESTMENTS 125.01% - (Cost $3,244,944) .... 3,262,847
LIABILITIES, NET OF OTHER ASSETS - (25.01%) ....... (652,798)
------------
TOTAL NET ASSETS - 100.00% ........................ $ 2,610,049
============
See accompanying notes
13
AMERICAN BEACON SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)
Percentages are stated as percent of net assets.
## Non-income producing security.
+ All or a portion of this security is on loan at April 30, 2008.
++ The Fund/Trust is affiliated by having the same investment advisor.
# At April 30, 2008, security pledged as collateral for open futures
contracts.
FUTURES CONTRACTS
(DOLLARS IN THOUSANDS)
UNREALIZED
NUMBER OF EXPIRATION MARKET APPRECIATION/
CONTRACTS DATE VALUE (DEPRECIATION)
--------- ---------- -------- --------------
Emini Mini Russell 1,847 Jun 2008 $132,522 $5,265
======== ======
See accompanying notes
14
AMERICAN BEACON SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
ASSETS:
Investments in unaffiliated securities, at value (A, C) ....... $ 2,494,446
Investments in affiliated securities, at value (B) ............ 768,401
Receivable for investments sold ............................... 8,050
Dividends and interest receivable ............................. 1,454
Receivable for fund shares sold ............................... 1,416
Prepaid expenses .............................................. 63
-----------
TOTAL ASSETS ............................................... 3,273,830
-----------
LIABILITIES:
Payable for investments purchased ............................. 11,434
Payable upon return of securities loaned ...................... 645,085
Payable for fund shares redeemed .............................. 2,112
Payable for variation margin on open futures contracts ........ 322
Management and investment advisory fees payable (Note 2) ...... 3,644
Administrative service and service fees payable ............... 698
Other liabilities ............................................. 486
-----------
TOTAL LIABILITIES .......................................... 663,781
-----------
NET ASSETS ....................................................... $ 2,610,049
===========
ANALYSIS OF NET ASSETS:
Paid-in-capital ............................................... 2,708,370
Undistributed net investment income ........................... 9,576
Accumulated net realized loss ................................. (131,065)
Unrealized appreciation of investments, futures contracts, and
foreign currency ........................................... 23,168
-----------
NET ASSETS ....................................................... $ 2,610,049
===========
SHARES OUTSTANDING (NO PAR VALUE):
Institutional Class ........................................... 67,924,629
===========
PlanAhead Class ............................................... 60,591,686
===========
Service Class ................................................. 3,311,245
===========
AMR Class ..................................................... 18,173,030
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE:
Institutional Class ........................................... $ 17.59
===========
PlanAhead Class ............................................... $ 17.18
===========
Service Class ................................................. $ 17.07
===========
AMR Class ..................................................... $ 17.50
===========
- ----------
(A) Cost of investments in unaffiliated securities ............... $ 2,476,543
(B) Cost of investments in affiliated securities ................. $ 768,401
(C) Market value of securities on loan ........................... $ 625,164
See accompanying notes
15
AMERICAN BEACON SMALL CAP VALUE FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (IN THOUSANDS) (UNAUDITED)
INVESTMENT INCOME:
Dividend income from unaffiliated securities (net of foreign
taxes)* .................................................... $ 24,807
Dividend income from affiliated securities .................... 2,183
Interest income ............................................... 101
Income derived from securities lending, net ................... 2,803
---------
TOTAL INVESTMENT INCOME ................................. 29,894
---------
EXPENSES:
Management and investment advisory fees (Note 2) .............. 6,813
Administrative service fees (Note 2):
Institutional Class ........................................ 1,485
PlanAhead Class ............................................ 1,356
Service Class .............................................. 72
Transfer agent fees:
Institutional Class ........................................ 60
PlanAhead Class ............................................ 59
Service Class .............................................. 7
AMR Class .................................................. 11
Custody and fund accounting fees .............................. 111
Professional fees ............................................. 36
Registration fees and expenses ................................ 33
Service fees:
PlanAhead Class (Note 2) ................................... 1,356
Service Class (Note 2) ..................................... 72
Distribution fees - Service Class (Note 2) .................... 72
Prospectus and shareholder reports ............................ 186
Other expenses ................................................ 88
---------
TOTAL EXPENSES .......................................... 11,817
=========
NET INVESTMENT INCOME ............................................ 18,077
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investments ................................................ (101,007)
Commission recapture (Note 1) .............................. 156
Futures contracts .......................................... (15,198)
Change in net unrealized appreciation or depreciation of:
Investments ................................................ (190,790)
Futures contracts .......................................... 3,571
---------
NET LOSS ON INVESTMENTS ................................. (303,268)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. $(285,191)
=========
* Foreign taxes ............................................... $ 19
See accompanying notes
16
AMERICAN BEACON SMALL CAP VALUE FUND
STATEMENT OF CHANGES OF NET ASSETS (IN THOUSANDS)
Six Months
Ended Year Ended
April 30, October 31,
2008 2007
----------- -----------
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ......................................... $ 18,077 $ 29,550
Net realized gain (loss) on investments, futures contracts, and
foreign currency transactions .............................. (116,049) 344,695
Change in net unrealized appreciation or (depreciation) of
investments, futures contracts, and foreign currency
translations ............................................... (187,219) (182,874)
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ........................................... (285,191) 191,371
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Institutional Class ........................................ (13,291) (10,903)
PlanAhead Class ............................................ (9,332) (8,142)
Service Class .............................................. (298) (295)
AMR Class .................................................. (4,903) (4,490)
Net realized gain on investments:
Institutional Class ........................................ (152,714) (90,742)
PlanAhead Class ............................................ (145,952) (94,401)
Service Class .............................................. (7,763) (5,063)
AMR Class .................................................. (43,605) (28,623)
---------- ----------
NET DISTRIBUTIONS TO SHAREHOLDERS ....................... (377,858) (242,659)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares ................................. 229,921 808,393
Reinvestment of dividends and distributions ................... 371,165 237,930
Cost of shares redeemed ....................................... (538,428) (920,892)
---------- ----------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS ......................................... 62,658 125,431
========== ==========
NET INCREASE (DECREASE) IN NET ASSETS ............................ (600,391) 74,143
---------- ----------
NET ASSETS:
Beginning of period ........................................... 3,210,440 3,136,297
---------- ----------
END OF PERIOD * ............................................... $2,610,049 $3,210,440
========== ==========
* Includes undistributed net investment income of ................ $ 9,576 $ 20,863
========== ==========
See accompanying notes
17
AMERICAN BEACON SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
American Beacon Funds (the "Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940 (the
"Act"), as amended, as a no load, diversified, open-end management investment
company. These financial statements and notes to the financial statements relate
to the American Beacon Small Cap Value Fund (the "Fund"), a series of the Trust.
American Beacon Advisors, Inc. (the "Manager") is a wholly-owned subsidiary
of AMR Corporation ("AMR"), the parent company of American Airlines, Inc.
("American"), and was organized in 1986 to provide business management,
advisory, administrative and asset management consulting services to the Trust
and other investors.
On April 16, 2008, AMR announced that it has reached a definitive agreement
to sell American Beacon Advisors, Inc. to Lighthouse Holdings, Inc., which is
owned by investment funds affiliated with Pharos Capital Group, LLC and TPG
Capital, two leading private equity firms. AMR expects to close the sale later
this year, subject to customary closing conditions as well as the approval of
the shareholders of the American Beacon family of mutual funds and consents from
other clients of the Manager.
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: OFFERED TO: SERVICE AND DISTRIBUTIONS FEES:
- ------ ----------- -------------------------------
INSTITUTIONAL CLASS Investors making an initial investment of $2 million Administrative Service Fee - 0.25%
PLANAHEAD CLASS General public and investors investing through an Administrative Service Fee - 0.25%
intermediary Service Fee - 0.25%
SERVICE CLASS Investors investing through an intermediary Administrative Service Fee - 0.25%
Service Fee - 0.25%
Distribution Fee - 0.25%
AMR CLASS Investors in the tax-exempt retirement and benefit
plans of AMR Corporation and its affiliates N/A
Investment income, net capital gains (losses) and all expenses incurred by
the Fund are allocated based on the relative net assets of each class, except
for service fees and certain other fees and expenses related solely to one class
of shares.
Security Valuation
Investments are valued at the close of the New York Stock Exchange (the
"Exchange"), normally 4 p.m. ET, each day that the Exchange is open for
business. Equity securities for which market quotations are available are valued
at the last sale price or official closing price (closing bid price or last
evaluated quote if no sale has occurred) on the primary market or exchange on
which they trade.
Debt securities (other than short-term 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. When a price is unavailable from a
pricing service or when the price provided by the pricing service is deemed not
to represent fair value, the prices of debt securities may be determined using
quotes obtained from brokers.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation. Investment grade short-term
obligations with 60 days or less to maturity are valued using the amortized cost
method, which approximates market value.
18
AMERICAN BEACON SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Securities for which 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 of Trustees
(the "Board").
Security Transactions and Investment Income
Security transactions are recorded on the trade date of the security
purchase or sale.
The Fund may purchase securities with delivery or payment to occur at a
later date. At the time the Fund enters into a commitment to purchase a
security, the transaction is recorded, and the value of the security is
reflected in the net asset value. The value of the security may vary with market
fluctuations.
Dividend income, net of foreign taxes, is recorded on the ex-dividend date
except certain dividends from foreign securities which are recorded as soon as
the information is available to the Fund. Interest income is earned from
settlement date, recorded on the accrual basis, and adjusted, if necessary, for
accretion of discounts and amortization of premiums. For financial and tax
reporting purposes, realized gains and losses are determined on the basis of
specific lot identification.
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 5% of the face value of the futures contract. The Fund reflects this
amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral
for futures contracts. 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.
Dividends to Shareholders
Dividends from net investment income of the Fund normally will be declared
and paid at least annually. Distributions, if any, of net realized capital gains
are generally paid at least annually and recorded on the ex-dividend date.
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 in the Fund's Statement
of Operations.
19
AMERICAN BEACON SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Allocation of Income, Expenses, Gains and Losses
Income, expenses (other than those attributable to a specific class), gains
and losses are allocated daily to each class of shares based upon the relative
proportion of net assets represented by such class. Operating expenses directly
attributable to a specific class are charged against the operations of that
class.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles 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.
Recently Issued Accounting Pronouncements
In September 2006, the FASB issued Statement on Financial Accounting
Standards No. 157, "Fair Value Measurements" ("FAS 157"). This standard
clarifies the definition of fair value for financial reporting, establishes a
framework for measuring fair value and requires additional disclosures about the
use of fair value measurements. FAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. As of April 30, 2008, the Manager does not believe
the adoption of FAS 157 will materially impact the amounts reported in the
financial statements; however, additional disclosures will be required about the
inputs used to develop the measurements of fair value.
Other
Under the Trust's organizational documents, its officers and directors are
indemnified against certain liability arising out of the performance of their
duties to the Trust. In the normal course of business, the Trust enters into
contracts that provide indemnification to the other party or parties against
potential costs or liabilities. The Trust's maximum exposure under these
arrangements is dependent on claims that may be made in the future and,
therefore, cannot be estimated. The Trust has had no prior claims or losses
pursuant to any such agreement.
2. TRANSACTIONS WITH AFFILIATES
Management Agreement
The Trust and the Manager are parties to a Management Agreement that
obligates the Manager to provide or oversee the provision of all administrative,
investment advisory, fund management and securities lending services. Investment
assets of the Fund are managed by multiple investment advisors that have entered
into separate investment advisory agreements with the Manager. As compensation
for performing the duties required under the Management Agreement, the Manager
receives from the Fund an annualized fee equal to 0.10% of the average daily net
assets plus amounts paid by the Manager to the investment advisors hired by the
Manager to direct investment activities of the Funds. Management fees paid
during the six months ended April 30, 2008 were as follows (dollars in
thousands):
AMOUNTS PAID TO NET AMOUNTS
MANAGEMENT FEE RATE MANAGEMENT FEE INVESTMENT ADVISORS RETAINED BY MANAGER
- ------------------- -------------- ------------------- -------------------
0.35%-0.60% $6,813 $5,483 $1,330
As compensation for services provided by the Manager in connection with
securities lending activities, the lending Fund pays to the Manager, with
respect to cash collateral posted by borrowers, a fee up to 25% 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 when a borrower
posts collateral other than cash, a fee up to 25% of such loan fees. This fee is
netted against securities
20
AMERICAN BEACON SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
lending income in the Statement of Operations. During the six months ended April
30, 2008, securities lending fees paid to the Manager were $446,212.
Administrative Services Agreement
The Manager and the Trust entered into an Administrative Services Agreement
which obligates the Manager to provide or oversee administrative services to the
Fund. As compensation for performing the duties required under the
Administrative Services Agreement, the Manager receives an annualized fee of
0.25% of the average daily net assets of the Institutional, PlanAhead, and
Service Classes of the Fund.
Distribution Plans
The Fund, except for the Service Class of the Fund, has adopted a
"defensive" Distribution Plan (the "Plan") in accordance with Rule 12b-1 under
the Act, pursuant to which no fees may be charged to the Fund for distribution
purposes. However, the Plan authorizes the management and administrative service
fees received by the Manager and the investment advisors hired by the Manager to
be used for distribution purposes. Under this Plan, the Fund does not intend to
compensate the Manager or any other party, either directly or indirectly, for
the distribution of Fund shares.
A separate Distribution Plan (the "Distribution Plan") has been adopted
pursuant to Rule 12b-1 under the Act for the Service Class of the Fund. Under
the Distribution Plan, as compensation for distribution assistance, the Manager
receives an annual fee of 0.25% of the average daily net assets of the Service
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 PlanAhead and Service
Classes. As compensation for performing the duties required under the Service
Plans, the Manager receives 0.25% of the average daily net assets of the
PlanAhead and Service Classes of the Fund.
Brokerage Commissions
Affiliated entities of an investment advisor to the Fund received net
commissions on purchases and sales of the Fund's portfolio securities totaling
$4,793 for the six months ended April 30, 2008.
Investment in Affiliated Funds
The Fund is permitted, pursuant to an exemptive order by the Securities and
Exchange Commission ("SEC") and procedures approved by the Board, to invest up
to 25% of its total assets in the American Beacon Money Market Select Fund (the
"Select Fund"). Cash collateral received by the Fund in connection with
securities lending may be invested in the Select Fund and the American Beacon
Cash Plus Trust (the "Cash Trust") (collectively, the "Affiliated Funds"). The
Fund and the Affiliated Funds have the same investment advisor and therefore,
are considered to be affiliated. The Manager serves as investment advisor to the
Affiliated Funds and receives from each Affiliated Fund an annualized fee up to
0.10% of its average daily net assets. During the six months ended April 30,
2008, the Manager earned fees from the Affiliated Funds totaling $54,281 on the
Fund's direct investment in the Affiliated Funds and $318,156 from securities
lending collateral invested in the Affiliated Funds.
Interfund Lending Program
Pursuant to an exemptive order by the SEC, the Fund, along with other
registered investment companies having management contracts with the Manager,
may participate in an interfund lending program as a borrower. This program
21
AMERICAN BEACON SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
provides an alternative credit facility allowing the Fund to borrow from other
participating Funds. For the six months ended April 30, 2008, the Fund did not
utilize the credit facility.
Expense Reimbursement Plan
The Fund has adopted an Expense Reimbursement Plan whereby the Manager may
seek repayment of fees waived or expenses reimbursed for a period of up to three
years. However, reimbursement will occur only if the Class' average net assets
have grown or expenses have declined sufficiently to allow reimbursement without
causing its expense ratio to exceed the previously agreed upon contractual
expense limit. For the six months ended April 30, 2008, there were no fees
waived or reimbursed expenses subject to potential recovery.
Other
At April 30, 2008, AMR Corporation and subsidiary companies and employee
benefit trusts thereof owned 12% of the Fund's shares.
3. FEDERAL INCOME AND EXCISE TAXES
It is the policy of the Fund to comply with the requirements of Subchapter
M of the Internal Revenue Code and to distribute substantially all net
investment income as well as any net realized capital gains on the sale of
investments. Therefore, no federal income or excise tax provision is required.
The Fund adopted the provisions of FASB Interpretation No. 48, "Accounting
for Uncertainties in Income Taxes" ("FIN 48"), on January 1, 2007. FIN 48 sets
forth a minimum threshold for financial statement recognition of the benefit of
a tax position taken or expected to be taken in a tax return. The implementation
of FIN 48 did not result in any unrecognized tax benefits in the accompanying
financial statements. Each of the tax years in the three year period ended
October 31, 2007 remains subject to examination by the Internal Revenue Service.
If applicable, the Fund recognizes interest accrued related to unrecognized tax
benefits in interest expense and penalties in "Other expenses" on the Statement
of Operations.
Dividends are categorized in accordance with income tax regulations which
may treat certain transactions differently than U.S. generally accepted
accounting principles. Accordingly, the character of distributions and
composition of net assets for tax purposes may differ from those reflected in
the accompanying financial statements.
The tax character of distributions paid during the six months ended April
30, 2008 and the fiscal year ended October 31, 2007 were as follows (in
thousands):
SIX MONTHS ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
2008 2007
----------------- -----------
(unaudited)
DISTRIBUTIONS PAID FROM:
ORDINARY INCOME*
Institutional Class ........................ $ 37,811 $ 36,981
PlanAhead Class ............................ 32,766 35,272
Service Class .............................. 1,545 1,750
AMR Class .................................. 11,904 12,717
LONG-TERM CAPITAL GAIN
Institutional Class ........................ 128,194 64,664
PlanAhead Class ............................ 122,518 67,270
Service Class .............................. 6,516 3,608
AMR Class .................................. 36,604 20,397
-------- --------
TOTAL DISTRIBUTIONS PAID ......................... $377,858 $242,659
======== ========
* For tax purposes, short-term capital gains are considered ordinary income
distributions.
22
AMERICAN BEACON SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
As of April 30, 2008, the components of distributable earnings on a tax
basis were as follows (in thousands):
Cost basis of investments for federal income tax
purposes ...................................... $3,268,319
Unrealized appreciation .......................... 293,936
Unrealized depreciation .......................... (299,408)
----------
Net unrealized appreciation/(depreciation) ....... (5,472)
Undistributed ordinary income .................... 7,569
Undistributed long-term gain/(loss) .............. (100,418)
----------
Distributable earnings ........................... $ (98,321)
==========
Financial reporting records are adjusted for permanent book/tax differences
to reflect tax character. Financial records are not adjusted for temporary
differences. The temporary differences between financial reporting and tax-basis
reporting of unrealized appreciation/(depreciation) are attributable primarily
to the tax deferral of losses from wash sales, the realization for tax purposes
of unrealized gains/(losses) on certain derivative instruments, and
reclassifications of income from real estate investment securities.
Due to inherent differences in the recognition of income, expenses and
realized gains/losses under U.S. generally accepted accounting principles and
federal income tax regulations, permanent differences between book and tax
reporting have been identified and appropriately reclassified on the Statement
of Assets and Liabilities.
Accordingly, the following amounts represent current year permanent
differences derived from reclassifications of income from real estate investment
securities, foreign currency, and dividend reclasses that have been reclassified
as of April 30, 2008 (in thousands):
Paid-in-capital .................................. $ (1)
Undistributed net investment income .............. (1,540)
Accumulated net realized gain (loss) ............. 1,541
Unrealized appreciation (depreciation) of
investments, futures contracts and foreign
currency ...................................... --
At April 30, 2008, the capital loss carry forward position of the Fund for
federal income tax purposes was $100,418.
4. INVESTMENT TRANSACTIONS
The aggregate cost of purchases and proceeds from sales of investments,
other than short-term obligations, for the six months ended April 30, 2008 were
(in thousands) $735,510 and $1,057,662, respectively.
A summary of the Fund's direct transactions in Affiliated Funds for the six
months ended April 30, 2008 is set forth below (in thousands):
OCTOBER 31, 2007 APRIL 30, 2008
AFFILIATE SHARES/MARKET VALUE PURCHASES SALES SHARES/MARKET VALUE
- --------- ------------------- --------- -------- -------------------
Select Fund $87,216 $824,942 $788,842 $123,316
5. 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 marked to market
and monitored daily. To the extent that a loan is collateralized by cash, such
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.
23
AMERICAN BEACON SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
The Fund, the Agent and the Manager retain 65%, 25%, and 10%, respectively
of the income generated from the investment of cash collateral, less negotiated
rebate fees paid to participating brokers and transaction costs. To the extent
that a loan is secured by non-cash collateral, brokers pay the Fund negotiated
lenders' fees, which are divided between the Fund, the Agent and the Manager
65%, 25%, and 10%, respectively. The Fund also continues to receive income on
the securities loaned, and any gain or loss in the market price of securities
loaned that may occur during the term of the loan.
Risks to the Fund in securities lending transactions are that the borrower
may not provide additional collateral when required or return the securities
when due, and that the value of the short-term investments will be less than the
amount of cash collateral required to be returned to the borrower.
At April 30, 2008, the value of outstanding securities on loan and the
value of collateral was as follows (in thousands):
MARKET VALUE OF
SECURITIES ON LOAN NON-CASH COLLATERAL CASH COLLATERAL
- ------------------ ------------------- ---------------
$625,164 $746 $645,085
Cash collateral is invested in a joint investment account, which is
comprised of an investment in the Affiliated Funds. The allocated amounts have
been included as investments in the Schedule of Investments and Statement of
Assets and Liabilities. Income earned on these investments is reported as Income
derived from securities lending in the Statement of Operations.
Non-cash collateral received by the Fund may not be sold or repledged;
therefore, non-cash collateral is not included on the Fund's Schedule of
Investments or Statement of Assets and Liabilities.
6. CAPITAL SHARE TRANSACTIONS
The tables below summarize the activity in capital shares for each Class of
the Fund (dollars and shares in thousands):
Six Months Ended April 30, 2008
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- ------------------- ----------------- -----------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------- --------- ------- --------- ------ -------- ------ --------
Shares sold ........................ 6,919 $ 121,474 5,037 $ 86,192 474 $ 8,187 809 $ 14,068
Reinvestment of dividends .......... 8,983 161,791 8,677 152,805 460 8,061 2,709 48,508
Shares redeemed .................... (11,941) (213,039) (14,007) (240,282) (844) (14,524) (4,006) (70,583)
------- --------- ------- --------- ------ -------- ------ ---------
Net increase (decrease) in shares
outstanding .................... 3,961 $ 70,226 (293) $ (1,285) 90 $ 1,724 (488) $ (8,007)
======= ========= ======= ========= ====== ======== ====== ========
Year Ended October 31, 2007
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- ------------------- ----------------- ------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------- --------- ------- --------- ------ -------- ------ ---------
Shares sold ........................ 16,091 $ 361,583 12,210 $ 271,462 1,200 $ 26,348 6,699 $ 149,000
Reinvestment of dividends .......... 4,613 98,950 4,782 100,509 256 5,358 1,551 33,113
Shares redeemed .................... (15,274) (343,946) (16,524) (363,461) (1,453) (31,825) (7,953) (181,660)
------- --------- ------- --------- ------ -------- ------ ---------
Net increase (decrease) in
shares outstanding ............. 5,430 $ 116,587 468 $ 8,510 3 $ (119) 297 $ 453
======= ========= ======= ========= ====== ======== ====== =========
24
(This page intentionally left blank)
25
AMERICAN BEACON SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class
--------------------------------------------------------------------------
Six Months
Ended Year Ended October 31,
April 30, ---------------------------------------------------------
2008 2007 2006 2005(B) 2004(C) 2003(A)
---------- ---------- ---------- ---------- -------- -------
(unaudited)
Net asset value, beginning of period .. $ 22.10 $ 22.53 $ 20.43 $ 18.85 $ 16.21 $ 11.28
---------- ---------- ---------- ---------- -------- -------
Income from investment operations:
Net investment income (loss) ....... 0.13 0.22 0.19 0.11 0.07 (0.01)
Net gains (losses) on securities
(both realized and unrealized) .. (1.95) 1.10 2.94 2.31 3.09 5.24
---------- ---------- ---------- ---------- -------- -------
Total income (loss) from investment
operations ......................... (1.82) 1.32 3.13 2.42 3.16 5.23
---------- ---------- ---------- ---------- -------- -------
Less distributions:
Dividends from net investment
income .......................... (0.22) (0.19) (0.14) (0.07) (0.08) (0.02)
Distributions from net realized
gains on securities ............. (2.47) (1.56) (0.89) (0.77) (0.44) (0.28)
---------- ---------- ---------- ---------- -------- -------
Total distributions ................... (2.69) (1.75) (1.03) (0.84) (0.52) (0.30)
---------- ---------- ---------- ---------- -------- -------
Net asset value, end of period ........ $ 17.59 $ 22.10 $ 22.53 $ 20.43 $ 18.85 $ 16.21
========== ========== ========== ========== ======== =======
Total return .......................... (8.53)%(D) 6.10% 15.80% 12.90% 19.86% 47.45%
========== ========== ========== ========== ======== =======
Ratios and supplemental data:
Net assets, end of period
(in thousands) .................. $1,194,668 $1,413,734 $1,319,024 $1,076,909 $429,540 $89,579
Ratios to average net assets
(annualized):
Expenses, net of waivers ........ 0.81% 0.80% 0.82% 0.87% 0.89% 0.89%
Expenses before waivers ......... 0.81% 0.80% 0.82% 0.87% 0.89% 0.89%
Net investment income (loss),
net of waivers ................ 1.43% 0.94% 0.83% 0.66% 0.57% 0.60%
Net investment income (loss),
before waivers ................ 1.43% 0.94% 0.83% 0.66% 0.57% 0.60%
Portfolio turnover rate ............ 28%(D) 52% 48% 47% 35% 75%
PlanAhead Class
--------------------------------------------------------------------------
Six Months
Ended Year Ended October 31,
April 30, ---------------------------------------------------------
2008 2007 2006 2005(B) 2004(C) 2003(A)
---------- ---------- ---------- ---------- -------- -------
(unaudited)
Net asset value, beginning of period .. $ 21.62 $ 22.08 $ 20.04 $ 18.54 $ 15.95 $ 11.22
---------- ---------- ---------- ---------- -------- -------
Income from investment operations:
Net investment income (loss) ....... 0.11 0.16 0.13 0.09 0.08 0.05
Net gains (losses) on securities
(both realized and unrealized) .. (1.92) 1.07 2.89 2.24 2.98 5.08
---------- ---------- ---------- ---------- -------- -------
Total income (loss) from investment
operations ......................... (1.81) 1.23 3.02 2.33 3.06 5.13
---------- ---------- ---------- ---------- -------- -------
Less distributions:
Dividends from net investment
income .......................... (0.16) (0.13) (0.09) (0.06) (0.03) (0.12)
Distributions from net realized
gains on securities ............. (2.47) (1.56) (0.89) (0.77) (0.44) (0.28)
---------- ---------- ---------- ---------- -------- -------
Total distributions ................... (2.63) (1.69) (0.98) (0.83) (0.47) (0.40)
---------- ---------- ---------- ---------- -------- -------
Net asset value, end of period ........ $ 17.18 $ 21.62 $ 22.08 $ 20.04 $ 18.54 $ 15.95
========== ========== ========== ========== ======== =======
Total return .......................... (8.67)%(D) 5.83% 15.56% 12.63% 19.56% 47.12%
========== ========== ========== ========== ======== =======
Ratios and supplemental data:
Net assets, end of period
(in thousands) .................. $1,040,860 $1,316,188 $1,333,814 $1,320,853 $466,364 $66,906
Ratios to average net assets
(annualized):
Expenses, net of waivers ........ 1.06% 1.05% 1.06% 1.10% 1.15% 1.16%
Expenses before waivers ......... 1.06% 1.05% 1.06% 1.10% 1.15% 1.16%
Net investment income (loss),
net of waivers ................ 1.20% 0.70% 0.59% 0.42% 0.33% 0.39%
Net investment income (loss),
before waivers ................ 1.20% 0.70% 0.59% 0.42% 0.33% 0.39%
Portfolio turnover rate ............ 28%(D) 52% 48% 47% 35% 75%
(A) Barrow, Hanley, Mewhinney & Strauss, Inc. was added as an investment
advisor to the Small Cap Value Fund on September 18, 2003.
(B) Opus Capital Group, LLC was added as an investment advisor on February 1,
2005 and Metropolitan West Capital Management, LLC and Dreman Value
Management, LLC were added as investment advisors on August 31, 2005.
(C) The Boston Company Asset Management, LLC was added as an investment advisor
to the Small Cap Value Fund on September 27, 2004.
(D) Not annualized.
(E) Annualized.
(F) Portfolio turnover rate is for the period from November 1, 2002 through
October 31, 2003.
26
Service Class
------------------------------------------------------------------
Six Months
Ended Year Ended October 31, May 01 to
April 30, ------------------------------------- October
2008 2007 2006 2005(B) 2004(C) 31, 2003(A)
---------- ------- ------- ------- ------- -----------
(unaudited)
Net asset value, beginning of period .. $ 21.46 $ 21.94 $ 19.94 $ 18.49 $ 15.92 $ 11.88
------- ------- ------- ------- ------- ---------
Income from investment operations:
Net investment income (loss) ....... 0.08 0.10 0.07 0.04 0.01 --
Net gains (losses) on securities
(both realized and unrealized) .. (1.91) 1.07 2.88 2.23 3.00 4.04
------- ------- ------- ------- ------- ---------
Total income (loss) from investment
operation .......................... (1.83) 1.17 2.95 2.27 3.01 4.04
------- ------- ------- ------- ------- ---------
Less distributions:
Dividends from net investment
income .......................... (0.09) (0.09) (0.06) (0.05) -- --
Distributions from net realized
gains on securities ............. (2.47) (1.56) (0.89) (0.77) (0.44) --
------- ------- ------- ------- ------- ---------
Total distributions ................... (2.56) (1.65) (0.95) (0.82) (0.44) --
------- ------- ------- ------- ------- ---------
Net asset value, end of period ........ $ 17.07 $ 21.46 $ 21.94 $ 19.94 $ 18.49 $ 15.92
======= ======= ======= ======= ======= =========
Total return .......................... (8.79)%(D) 5.54% 15.23% 12.32% 19.24% 34.01%(D)
======= ======= ======= ======= ======= =========
Ratios and supplemental data:
Net assets, end of period
(in thousands) .................. $56,518 $69,112 $70,602 $44,709 $11,828 $ 1
Ratios to average net assets
(annualized):
Expenses, net of waivers ........ 1.32% 1.32% 1.34% 1.40% 1.38% 1.49%(E)
Expenses before waivers ......... 1.32% 1.32% 1.34% 1.40% 1.69% 1089.04%
Net investment income (loss),
net of waivers ................ 0.93% 0.43% 0.31% 0.12% 0.17% (0.05)%
Net investment income (loss),
before waivers ................ 0.93% 0.43% 0.31% 0.12% (0.14)% (1087.60)%
Portfolio turnover rate ............ 28%(D) 52% 48% 47% 35% 75%(F)
AMR Class
-----------------------------------------------------------------
Six Months
Ended Year Ended October 31,
April 30, ----------------------------------------------------
2008 2007 2006 2005(B) 2004(C) 2003(A)
---------- -------- -------- -------- -------- --------
(unaudited)
Net asset value, beginning of period .. $ 22.05 $ 22.48 $ 20.38 $ 18.78 $ 16.13 $ 11.30
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) ....... 0.17 0.30 0.27 0.21 0.14 0.10
Net gains (losses) on securities
(both realized and unrealized) .. (1.97) 1.08 2.91 2.26 3.04 5.15
-------- -------- -------- -------- -------- --------
Total income (loss) from investment
operation .......................... (1.80) 1.38 3.18 2.47 3.18 5.25
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income .......................... (0.28) (0.25) (0.19) (0.10) (0.09) (0.14)
Distributions from net realized
gains on securities ............. (2.47) (1.56) (0.89) (0.77) (0.44) (0.28)
-------- -------- -------- -------- -------- --------
Total distributions ................... (2.75) (1.81) (1.08) (0.87) (0.53) (0.42)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........ $ 17.50 $ 22.05 $ 22.48 $ 20.38 $ 18.78 $ 16.13
======== ======== ======== ======== ======== ========
Total return .......................... (8.45)%(D) 6.40% 16.12% 13.23% 20.12% 47.93%
======== ======== ======== ======== ======== ========
Ratios and supplemental data:
Net assets, end of period
(in thousands) .................. $318,003 $411,406 $412,857 $424,965 $438,353 $327,542
Ratios to average net assets
(annualized):
Expenses, net of waivers ........ 0.55% 0.54% 0.55% 0.58% 0.60% 0.61%
Expenses before waivers ......... 0.55% 0.54% 0.55% 0.58% 0.60% 0.61%
Net investment income (loss),
net of waivers ................ 1.70% 1.21% 1.10% 0.94% 0.84% 0.95%
Net investment income (loss),
before waivers ................ 1.70% 1.21% 1.10% 0.94% 0.84% 0.95%
Portfolio turnover rate ............ 28%(D) 52% 48% 47% 35% 75%
27
(AMERICAN BEACON FUNDS(SM) LOGO)
DELIVERY OF DOCUMENTS
To reduce expenses, your financial institution may mail only one copy of the
Prospectus, Annual Report and Semi-Annual Report to those addresses shared by
two or more accounts. If you wish to receive individual copies of these
documents, please contact your financial institution. Delivery of individual
copies will commence thirty days after receiving your request.
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:
(GRAPHIC) (GRAPHIC)
BY E-MAIL: ON THE INTERNET:
american_beacon.funds@ambeacon.com Visit our website at
www.americanbeaconfunds.com
(GRAPHIC) (GRAPHIC)
BY TELEPHONE: BY MAIL:
Institutional Class American Beacon Funds
Call (800) 658-5811 P.O. Box 219643
AMR Class(SM) Kansas City, MO 64121-9643
Call (800) 345-2345
PlanAhead Class(R) and Service Class
Call (800) 388-3344
AVAILABILITY OF QUARTERLY PORTFOLIO AVAILABILITY OF PROXY VOTING POLICY
SCHEDULES AND RECORDS
In addition to the Schedule of A description of the policies and
Investments provided in each semi-annual procedures the Fund uses to determine
and annual report, the Fund files a how to vote proxies relating to
complete schedule of its portfolio portfolio securities is available in
holdings with the Securities and the Fund's Statement of Additional
Exchange Commission ("SEC") on Form N-Q Information, is available free of
as of the first and third fiscal charge on the Fund's website
quarters. The Fund's Forms N-Q are (www.americanbeaconfunds.com) and by
available on the SEC's website at calling 1-800-967-9009 or by
www.sec.gov. The Forms N-Q may also be accessing the SEC's website at
reviewed and copied at the SEC's Public www.sec.gov. The Fund's proxy voting
Reference Room, 450 Fifth Street, NW, record for the most recent year ended
Washington, DC 20549. Information June 30 is filed annually with the
regarding the operation of the SEC's SEC on Form N-PX. The Fund's Forms
Public Reference Room may be obtained by N-PX are available on the SEC's
calling 1-800-SEC-0330. A complete website at www.sec.gov. The Fund's
schedule of the Fund's portfolio proxy voting record may also be
holdings is also available on the Funds' obtained by calling 1-800-967-9009.
website (www.americanbeaconfunds.com)
approximately thirty days after the end
of each month.
FUND SERVICE PROVIDERS:
CUSTODIAN TRANSFER AGENT INDEPENDENT REGISTERED DISTRIBUTOR
STATE STREET BANK AND BOSTON FINANCIAL DATA PUBLIC ACCOUNTING FIRM FORESIDE FUND SERVICES
TRUST SERVICES ERNST & YOUNG LLP Portland, Maine
Boston, Massachusetts Kansas City, Missouri Dallas, 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.
American Airlines, Inc. is not responsible for investments made in the American
Beacon Funds. American Beacon Funds is a service mark of AMR Corporation.
American Beacon Small Cap Value Fund is a service mark of American Beacon
Advisors, Inc.
GUIDANCE | VISION | EXPERIENCE
(AMERICAN BEACON FUNDS(SM) LOGO)
Semi-Annual Report
(GRAPHIC)
APRIL 30, 2008
EQUITY FUNDS
BALANCED FUND
LARGE CAP GROWTH FUND
MID-CAP VALUE FUND
SMALL CAP VALUE OPPORTUNITY FUND
EMERGING MARKETS FUND
BOND FUNDS
HIGH YIELD BOND FUND
ENHANCED INCOME FUND
INTERMEDIATE BOND FUND
SHORT-TERM BOND FUND
About American Beacon
Since 1986, American Beacon Advisors has offered a variety of products and
investment advisory services to numerous institutional and retail clients,
including a variety of mutual funds, corporate cash management, and separate
account management.
Our clients include defined benefit plans, defined contribution plans,
foundations, endowments, corporations, financial planners, and other
institutional investors. With American Beacon Advisors, you can put the
experience of a multi-billion dollar asset management firm to work for your
company.
Contents
President's Message ............................................... 1
Market and Performance Overviews .................................. 2-22
American Beacon Schedules of Investments
Balanced Fund .................................................. 25
Large Cap Growth Fund .......................................... 34
Mid-Cap Value Fund ............................................. 39
Small Cap Value Opportunity Fund ............................... 42
Emerging Markets Fund .......................................... 46
High Yield Bond Fund ........................................... 52
Enhanced Income Fund ........................................... 59
Intermediate Bond Fund ......................................... 66
Short-Term Bond Fund ........................................... 75
Additional Information ............................................ Back Cover
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.
(PHOTO OF WILLIAM F. QUINN)
FELLOW SHAREHOLDERS,
I am pleased to present to you the American Beacon Funds Semi-Annual Report
for the six months ended April 30, 2008.
Our domestic equity funds, the Mid-Cap Value and Small Cap Value
Opportunity Funds, both Institutional Class, reported returns of -10.79% and
- -13.99%, respectively, for the six-month period ended April 30, 2008, with
respective expense ratios of 1.10% and 1.28% for their most recent fiscal year
ended October 31, 2007. Our foreign equity market fund, the Emerging Markets
Fund-Institutional Class, reported a total return of -11.47% for the same period
with an expense ratio of 1.41% for its most recent fiscal year ended October 31,
2007.
During this fiscal period, the Federal Reserve Bank lowered interest rates
to 2.00%. Against that backdrop, the Lehman Brothers Aggregate Index ("Lehman")
posted a positive return of 4.08%. The American Beacon Enhanced Income Fund -
PlanAhead Class, and the Intermediate Bond and Short-Term Bond Funds -
Institutional Class, all reported positive returns for the period with the
Intermediate Bond Fund beating Lehman by 50 basis points (0.50%).
The sub-prime mortgage crisis, rising oil and food prices all contributed
to a slowing economy that affected the U.S. and international equity markets
negatively in the past six months. This was evident when the S&P 500 and Dow
Jones Industrial Average indices reported returns of -9.64% and -6.79%,
respectively, and the MSCI EAFE Index reported returns of -9.21%, all for this
period. During the period, the uncertainties surrounding banks, investment banks
and the entire financial system have resulted in an extraordinary amount of
volatility. We believe the Funds' fundamental value investment philosophies and
lower than average expense ratios will continue to serve the Funds well over the
longer term.
Please review the enclosed market overview, portfolio listings and detailed
financial data. As always, we welcome the opportunity to serve your financial
needs. To obtain further details about the American Beacon Funds family or to
access your account information, please visit our website,
www.americanbeaconfunds.com. Thank you for your continued confidence in the
American Beacon Funds.
Sincerely,
/s/ William F. Quinn
William F. Quinn
President
American Beacon Funds
Investing in foreign equities entails additional risk not associated with
domestic equities, such as currency fluctuations, economic and political
instability and differences in accounting standards. The risks of investing in
foreign equities are heightened when investing in emerging markets. Investing in
debt securities entails interest rate risk which is the risk that debt
securities will decrease in value with increases in market interest rates.
Investing in the securities of small and mid-capitalization companies involves
greater risk and the possibility of greater price volatility than investing in
larger capitalization and more established companies.
American Beacon Funds April 30, 2008
1
DOMESTIC EQUITY MARKET OVERVIEW
APRIL 30, 2008 (UNAUDITED)
Market volatility remained prevalent in the November-through-April time
frame as concerns escalated regarding inflation, housing, credit and the
long-term viability of some well-established financial institutions. Stock
prices declined markedly as investors did not discriminate by market
capitalization, investment style or geographic region. In sharp contrast to the
equity markets, commodities continued to soar as the dollar weakened further.
Responding to the liquidity crisis, the Federal Reserve ("Fed") provided
monetary stimulus not only through five cuts in interest rates over the course
of the six months (leaving the Federal Funds target rate at 2.00% on April 30,
2008, down from 4.50% on October 31, 2007), but also through significant
expansion of lending facilities to accept a wide variety of collateral from both
banks and brokerage firms. In their closely watched statement at the conclusion
of their meeting on April 30, 2008, the Fed issued a negative outlook on the
economy, suggesting that growth remained weak and could be further pressured by
"subdued" business investment. In addition, the Fed reiterated that financial
markets remained under "considerable" stress.
However, the month of April 2008 may have marked a turning point for equity
investors as stocks managed a strong rally as investors sought attractive
valuations in an economic environment that turned out not to be as bad as
initially feared. Several industry bellwethers reported solid profit news,
offering further encouragement to those non-financial sectors that have yet to
be affected by the credit crisis. Stocks were up across the board in April, with
all the major domestic market indices showing gains. Yields for U.S. Treasuries
increased (and prices for those securities dropped) as investors anticipated an
end to the Fed's easing campaign as well as in an attempt to seek better value
in the equity market.
Growth stocks in the Russell indices held up slightly better than their
value counterparts during the six-month period, although both styles declined.
Stock prices declined across all capitalization ranges; however, midcap
companies held up better than large caps, while smaller companies declined
sharply.
Weak equity performance was widespread over the semi-annual period. With
the exception of Energy, every sector in the broad market S&P 500 Index
declined. Despite interest rate cuts and relaxed Fed requirements, Financials
was the worst-performing sector, with a total return of -20.0%. Stocks in the
Information Technology, Telecommunication Services, Health Care and Consumer
Discretionary sectors also suffered double-digit declines. Other than Energy,
with a total return of 6.3%, there were no bright spots. Even Consumer Staples,
often viewed as a defensive category, pulled back slightly as investors worried
that consumer spending would not pick up anytime soon.
Since the financial crisis began last August, monetary policy makers had
been very aggressive, cutting interest rates seven different times. In addition,
the Fed had been innovative in contending with the current financial crisis by
developing (or resurrecting) policy initiatives and lending facilities in an
attempt to target liquidity without further pressuring the dollar or adding to
inflationary concerns. Yet despite these efforts, inflationary pressures
continued to build and the dollar continued to weaken. As a result, by the end
of April 2008, market interest rates had once again begun to move against the
Fed, this time upward, as global investors anticipated a pause in, if not a
completion of, the most recent Fed easing campaign.
2
PERFORMANCE OVERVIEW
AMERICAN BEACON BALANCED FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Balanced Fund's Institutional Class returned -6.01% for the six months
ended April 30, 2008, lagging the 60% Russell 1000(R) Value Index/40% Lehman
Brothers Aggregate Index benchmark return of -4.36%, but exceeding the Lipper
Mixed-Asset Target Allocation Growth Funds Index return of -6.15% for the same
period.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08
---------------------------------------
6 MONTHS* 1 YEAR 5 YEARS 10 YEARS
--------- ------ ------- --------
Institutional Class(1,5) ............... -6.01% -4.65% 10.60% 5.90%
PlanAhead Class(1,5) ................... -6.14% -4.88% 10.24% 5.62%
Service Class(1,2,5) ................... -6.30% -5.16% 10.02% 5.52%
AMR Class(1,5) ......................... -5.92% -4.37% 10.84% 6.18%
Balanced Composite Index (3) ........... -4.36% -2.72% 9.51% 6.26%
Russell 1000 Value Index(4) ............ -9.83% -8.97% 12.85% 5.97%
Lehman Bros. Aggregate Index(4) ........ 4.08% 6.87% 4.37% 5.96%
Lipper Mixed-Asset Target
Allocations Growth Funds Index(4) ... -6.15% -1.47% 9.99% 5.48%
* Not annualized
1. Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares.
2. Fund performance for the five-year and ten-year periods represents the
total returns achieved by the PlanAhead Class from 4/30/98 up to 5/31/05,
the inception date of the Service Class, and the returns of the Service
Class since its inception. Expenses of the Service Class are higher than
those of the PlanAhead Class. Therefore, total returns shown may be higher
than they would have been had the Service Class been in existence since
4/30/98. A portion of the fees charged to the Service Class of the Fund was
waived in 2005. Performance prior to waiving fees was lower than actual
returns shown for 2005.
3. 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 Lehman Brothers Aggregate Index have been combined
in a 60%/40% proportion.
4. 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 is a registered trademark of Frank
Russell Company. The Lehman Brothers Aggregate Index is a market value
weighted index of government, corporate, mortgage-backed and asset-backed
fixed-rate debt securities of all maturities. The Lipper Mixed-Asset Target
Allocation Growth Funds Index tracks the results of the 30 largest mutual
funds in the Lipper Mixed-Asset Target Allocation Growth Funds category.
Lipper is an independent mutual fund research and ranking service. One
cannot directly invest in an index.
5. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional, PlanAhead, Service and AMR Class
shares was 0.58%, 0.84%, 1.08% and 0.32%, 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 65%
in equities (including equitized cash) and 35% in fixed-income securities,
ending the period with the same investment allocation.
The equity portion of the Fund (excluding equitized cash) returned -12.6%,
underperforming the Russell 1000 Value Index ("Russell Value Index") return of
- -9.8%. The Fund's poor performance versus the Russell Value Index was due to
poor stock selection and sector allocation. The Fund's holdings in the
Financials, Consumer Discretionary, and Health Care sectors detracted the most
value relative to the Russell Value Index. In the Financials sector, Bear
Stearns (down 90.7% for the period the Fund held the security), Washington
Mutual (down 55.5%), and Citigroup (down 38.2%) hurt performance most. RH
Donnelley (down 91.3%), Idearc (down 87.0%), and Wyndham Worldwide (down 34.4%),
were the largest detractors in the Consumer Discretionary sector as were Bristol
Myers Squibb (down 24.8%) and Wellpoint (down 37.2%) in the Health Care sector.
Good stock selection in the Information Technology and Industrials sectors added
value to performance but did not generate enough excess performance to offset
the poor performance mentioned above. IBM (up 4.7%) and Tyco Electronics (up
5.7%) were the largest contributors in the Information Technology sector, while
Burlington Northern Santa Fe (up 18.5%) and Tyco International (up 14.5%) added
the most value in the Industrials sector.
Equity sector allocation had a negative impact on the Fund's relative
returns during the six-month period, as the Fund was underweight in the Energy
sector, the best-performing sector in the Russell Value Index, and overweight in
the Information Technology sector, the worst-performing sector in the Russell
Value Index. This negative performance was somewhat offset by positive
performance generated by an underweighting in the Financials sector.
3
PERFORMANCE OVERVIEW
AMERICAN BEACON BALANCED FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The fixed-income portion of the Fund returned 4.9% for the six-month
period, outperforming the Lehman Brothers Aggregate Index return of 4.1%. The
Fund's fixed-income excess performance was due mostly to good security selection
in the Corporate, Collateralized Mortgage Obligation, and Agency sectors.
The sub-advisors continue to focus on the disciplined selection of
attractive securities that should allow the Fund to benefit long-term.
TOP TEN EQUITY HOLDINGS
% OF
EQUITIES
--------
ConocoPhillips........................... 1.9%
Bank of America Corp..................... 1.8%
AT&T, Inc................................ 1.5%
International Business Machines Corp..... 1.5%
Washington Mutual, Inc................... 1.4%
Citigroup, Inc........................... 1.3%
Honeywell International, Inc............. 1.3%
Occidental Petroleum Corp................ 1.2%
Devon Energy Corp........................ 1.2%
Pfizer, Inc.............................. 1.2%
EQUITY SECTOR ALLOCATION
% OF
EQUITIES
--------
Financials............................... 24.9%
Industrials.............................. 13.3%
Energy................................... 11.3%
Information Technology................... 11.1%
Health Care.............................. 10.1%
Consumer Discretionary................... 9.5%
Consumer Staples......................... 7.1%
Utilities................................ 5.4%
Telecommunication Services............... 4.5%
Materials................................ 2.8%
FIXED-INCOME SECTOR ALLOCATION
% OF
FIXED INCOME
------------
Corporate Bonds.......................... 33.3%
Mortgage-Backed.......................... 26.4%
Agency................................... 24.0%
U.S. Treasury............................ 14.8%
Asset-Backed............................. 1.5%
Investing in debt securities entails interest rate risk which is the risk that
debt securities will decrease in value with increases in market interest rates.
4
PERFORMANCE OVERVIEW
AMERICAN BEACON LARGE CAP GROWTH FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Institutional Class of the Large Cap Growth Fund returned -10.71% for
the six months ended April 30, 2008, compared to the Russell 1000(R) Growth
Index ("Index") return of -9.28% and the Lipper Large-Cap Growth Funds Index
return of -9.52%.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08
---------------------------- SINCE INCEP.
6 MONTHS* 1 YEAR 5 YEARS (7/31/00)
--------- ------ ------- ------------
Institutional Class(1,3)................. -10.71% -5.80% 8.40% -4.46%
AMR Class(1,3)........................... -10.50% -5.48% 8.65% -4.27%
Russell 1000 Growth Index(2)............ -9.28% -0.24% 9.52% -3.71%
Lipper Large-Cap Growth Funds Index(2)... -9.52% 3.08% 9.53% -3.72%
* Not annualized
1. Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares. A portion of the fees charged to the Institutional
Class of the Fund has been waived since 2004. Performance prior to waiving
the fees was lower than the actual returns shown for periods since 2004.
2. The Russell 1000 Growth Index is an unmanaged index of those stocks in the
Russell 1000(R) Index with higher price-to-book ratios and higher
forecasted growth values. Russell 1000 Growth Index and Russell 1000 Index
are registered trademarks of Frank Russell Company. The Lipper Large-Cap
Growth Funds Index tracks the results of the 30 largest mutual funds in the
Lipper Large-Cap Growth Funds category. Lipper is an independent mutual
fund research and ranking service. One cannot directly invest in an index.
3. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional and AMR Class shares was 1.06% and
0.61%, 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 primarily through stock selection, as
sector allocation added modest value to the Fund's performance. From a stock
selection standpoint, the Fund was hurt most by poor stock selection in the
Information Technology, Consumer Discretionary, and Telecommunication Services
sectors. Positions in Dell, Inc. (down 39.1%) and NVIDIA Corp. (down 41.9%)
detracted most from the Information Technology sector's relative performance. In
the Consumer Discretionary sector, the largest detractors were Apollo Group,
Inc. (down 35.8%) and ITT Educational Services (down 39.7%), while Sprint Nextel
Corp. (down 53.2%) hurt the Fund's Telecommunication Services sector returns.
This was offset somewhat by good stock selection in the Health Care sector where
Gilead Sciences, Inc. (up 12.1%) was the largest contributor.
The Fund's overweighting in the best-performing sector and underweighting
in the worst-performing sector in the Index, the Energy and Financial sectors
respectively, provided positive relative performance.
Looking forward, the Fund's sub-advisors will continue to maintain a
disciplined, long-term approach to equity investing in larger stocks with
above-average growth potential.
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
Microsoft Corp................................................. 3.1%
Halliburton Co................................................. 1.9%
McDonald's Corp................................................ 1.8%
Hewlett-Packard Co............................................. 1.4%
The Kroger Co.................................................. 1.3%
Best Buy Company, Inc.......................................... 1.3%
The Boeing Company............................................. 1.3%
Accenture Ltd.................................................. 1.3%
Texas Instruments, Inc......................................... 1.3%
Express Scripts, Inc........................................... 1.3%
SECTOR ALLOCATION
% OF
EQUITIES
--------
Information Technology......................................... 22.6%
Industrials.................................................... 17.0%
Health Care.................................................... 15.3%
Consumer Discretionary......................................... 12.0%
Energy......................................................... 11.4%
Consumer Staples............................................... 8.9%
Financials..................................................... 5.4%
Materials...................................................... 5.2%
Telecommunication Services..................................... 1.2%
Utilities...................................................... 1.0%
5
PERFORMANCE OVERVIEW
AMERICAN BEACON MID-CAP VALUE FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Institutional Class of the Mid-Cap Value Fund returned -10.79% for the
six months ended April 30, 2008. The Fund trailed the Russell Midcap(R) Value
Index ("Index") return of -9.20% and the Lipper Mid-Cap Value Funds Index return
of -9.23%.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08 SINCE
---------------------------- INCEP.
6 MONTHS* 1 YEAR 3 YEARS (6/30/04)
--------- ------ ------- ---------
Institutional Class(1,3,6)............ -10.79% -15.25% 6.16% 7.30%
PlanAhead Class (1,2,6)............... -10.96% -15.44% 5.96% 7.14%
Service Class (1,4,6)................. -11.06% -15.60% 5.89% 7.09%
AMR Class (1,6)....................... -10.76% -14.98% 6.34% 7.44%
Russell Midcap(R) Value Index(5)...... -9.20% -11.65% 9.66% 11.03%
Lipper Mid-Cap Value Funds Index(5)... -9.23% -8.27% 9.49% 8.94%
* Not annualized
1. Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares. A portion of the fees charged to the AMR Class of the
Fund was waived through 2006. Performance prior to waiving fees was lower
than the actual returns shown.
2. Fund performance for the three-year and since inception periods represents
the total returns achieved by the AMR Class from 6/30/04 up to 3/1/06, the
inception date of the PlanAhead Class, and the returns of the PlanAhead
Class since its inception. Expenses of the PlanAhead Class are higher than
those of the AMR Class. As a result, total returns shown may be higher than
they would have been had the PlanAhead Class been in existence since
6/30/04. A portion of the fees charged to the PlanAhead Class of the Fund
has been waived since 2006. Performance prior to waiving fees was lower
than actual returns shown since 2006.
3. Fund performance represents the total returns achieved by the AMR Class
from 6/30/04 up to 11/30/05, the inception date of the Institutional Class,
and the returns of the Institutional Class since its inception. Expenses of
the Institutional Class are higher than those of the AMR Class. As a
result, total returns shown may be higher than they would have been had the
Institutional Class been in existence since 6/30/04. A portion of the fees
charged to the Institutional Class of the Fund has been waived since 2007.
Performance prior to waiving fees was lower than actual returns shown since
2007.
4. Performance shown prior to the 6/29/07 inception of the Service Class is
that of the AMR Class from 6/30/04 to 11/30/05, the Institutional Class
from 11/30/05 to 2/28/06 and the PlanAhead Class from 2/28/06 to 6/29/07.
The returns have not been adjusted for any difference between the fees and
expenses of the Service Class and the historical fees and expenses of the
AMR, Institutional and PlanAhead Classes. Because the AMR, Institutional
and PlanAhead Class had lower expenses, their performance was better than
the Service Class would have realized during the same period. A portion of
the fees charged to the Service Class of the Fund has been waived since
2007. Performance prior to waiving fees was lower than the actual returns
shown since 2007.
5. 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(R) Index. Russell Midcap Value Index
and Russell 1000 Index are registered trademarks of Frank Russell Company.
The Lipper Mid-Cap Value Funds Index tracks the results of the 30 largest
mutual funds in the Lipper Mid-Cap Value Funds category. Lipper is an
independent mutual fund research and ranking service. One cannot directly
invest in an index.
6. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional, PlanAhead, Service, and AMR Class
shares was 1.10%, 1.27%, 1.81%, and 0.76%, 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.
The Fund underperformed the Index primarily through sector allocation and
to a lesser extent, through stock selection. A significant overweighting in the
Consumer Discretionary sector and an underweight in Energy, the best performing
sector in the Index, detracted from the Fund's performance relative to the
Index. An absence from Materials, the second best performing sector in the
Index, also hurt the Fund's performance. Partially offsetting the aforementioned
poor performance was a more than three times overweighting in the Health Care
sector and an absence from Telecommunication Services, the second worst
performing sector in the Index, which added value relative to the Index.
The Fund's investments in the Health Care and Financials sectors hurt
performance most. In the Health Care sector, the largest detractors were
Omnicare (down 30.9%) and Coventry Health Care (down 25.8%). XL Capital (down
50.6%), CIT Group (down 68.5%), and South Financial Group (down 69.9%) were
responsible for most of the underperformance in the Financials sector. The
Fund's holdings in the Consumer Discretionary and Information Technology sectors
added value relative to the Index, but not enough to offset the shortfall of the
aforementioned sectors. Rent-A-Center (up 34.6%) and TJX (up 12.1%) were the
largest contributors in the Consumer Discretionary sector, as was Affiliated
Computer Services (up 4.6%) in the Information Technology sector.
6
PERFORMANCE OVERVIEW
AMERICAN BEACON MID-CAP VALUE FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The sub-advisors' philosophy of investing in undervalued companies that
exhibit improving profitability and earnings growth potential should allow the
Fund to benefit longer term.
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
L-3 Communications Holdings, Inc.............................. 3.1%
Alcatle-Lucent................................................ 2.6%
Murphy Oil Corp............................................... 2.3%
Rent-A-Center, Inc............................................ 2.2%
Ryder System, Inc............................................. 2.0%
Lear Corp..................................................... 1.8%
Protective Life Corp.......................................... 1.8%
MDU Resources Group, Inc...................................... 1.8%
El Paso Corp.................................................. 1.7%
Federal Home Loan Mortgage Corp............................... 1.7%
SECTOR ALLOCATION
% OF
EQUITIES
--------
Financials.................................................... 30.2 %
Industrials................................................... 14.3 %
Consumer Discretionary........................................ 11.6 %
Information Technology........................................ 11.5 %
Materials..................................................... 7.9 %
Energy........................................................ 6.3 %
Health Care................................................... 6.1 %
Utilities..................................................... 5.6 %
Consumer Staples.............................................. 4.8 %
Telecommunication Services.................................... 1.7 %
Investing in the securities of mid-capitalization companies involves greater
risk and the possibility of greater price volatility than investing in larger
capitalization and more established companies.
7
PERFORMANCE OVERVIEW
AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND(SM)
APRIL 30, 2007 (UNAUDITED)
The Institutional Class of the Small Cap Value Opportunity Fund returned
- -13.99% for the six months ended April 30, 2008. The Fund lagged the Russell
2000(R) Value Index ("Index") return of -11.55% and the Lipper Small-Cap Value
Funds Index return of -10.66%.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08
------------------------ SINCE INCEP.
6 MONTHS* 1 YEAR (3/31/06)
--------- ------ ------------
Institutional Class(1,3) ................ -13.99% -19.23% -5.34%
PlanAhead Class(1,3) .................... -14.14% -19.32% -5.48%
Russell 2000 Value Index (2) ............ -11.55% -15.13% -2.61%
Lipper Small-Cap Value Funds Index (2) .. -10.66% -12.60% -1.51%
* Not annualized
1. Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares. A portion of the fees charged to the Institutional
and PlanAhead Classes of the Fund has been waived. Performance prior to
waiving fees was lower than the actual returns shown.
2. The Russell 2000 Value Index is an unmanaged index of those stocks in the
Russell 2000 Index with lower price-to-book ratios and lower forecasted
growth values. Russell 2000 Value Index is a registered trademark of Frank
Russell Company . The Lipper Small-Cap Value Funds Index tracks the results
of the 30 largest mutual funds in the Lipper Small-Cap Value Funds
category. Lipper is an independent mutual fund research and ranking
service. One cannot directly invest in an index.
3. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional and PlanAhead Class shares was 1.28%
and 1.71%, 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 primarily due to poor stock selection, as
sector allocation detracted modest value relative to the Index. Most of the poor
performance came from the Fund's holdings in the Financials and Industrials
sectors. Among the Fund's Financials sector holdings, Boston Private Financial
(down 67.2%), FirstFed Financial (down 64.3%), and South Financial Group (down
69.9%) were the largest detractors. Deluxe (down 46.3%), Dollar Thrifty
Automotive (down 61.8%), and Belden (down 42.0%) hurt performance most in the
Industrials sector. Holdings in the Consumer Discretionary sector added value
relative to the Index. Tupperware (up 10.5%), Unifirst (up 24.6%), and Warnaco
Group (up 13.4%) were the largest contributors in the sector.
An overweight in Telecommunication Services, the worst-performing sector in
the Index, detracted from the Fund's performance through sector allocation.
The sub-advisor's disciplined approach of investing in a diversified
portfolio of small cap value companies should allow the Fund to generate
competitive performance over longer periods of time.
8
PERFORMANCE OVERVIEW
AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND(SM)
APRIL 30, 2008 (UNAUDITED)
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
Tupperware Corp....................................... 1.5%
UMB Financial Corp.................................... 1.2%
Compass Minerals International, Inc................... 1.2%
Oil States International, Inc......................... 1.2%
Premiere Global Services, Inc......................... 1.1%
Ruddick Corp.......................................... 1.1%
Parker Drilling Co.................................... 1.0%
Harleysville Group, Inc............................... 1.0%
Trico Marine Services, Inc............................ 1.0%
AptarGroup, Inc....................................... 1.0%
SECTOR ALLOCATION
% OF
EQUITIES
--------
Financials............................................ 30.2 %
Industrials........................................... 14.3 %
Consumer Discretionary................................ 11.6 %
Information Technology................................ 11.5 %
Materials............................................. 7.9 %
Energy................................................ 6.3 %
Health Care........................................... 6.1 %
Utilities............................................. 5.6 %
Consumer Staples...................................... 4.8 %
Telecommunication Services............................ 1.7 %
Investing in the securities of small-capitalization companies involves greater
risk and the possibility of greater price volatility than investing in larger
capitalization and more established companies.
9
PERFORMANCE OVERVIEW
AMERICAN BEACON EMERGING MARKETS FUND(SM)
APRIL 30, 2008 (UNAUDITED)
For the six months ended April 30, 2008, the MSCI EM Index produced a
negative return of -10.28% in U.S. dollar terms. Emerging market economic
expansion has held up against a more challenging macro environment, validating
the decoupling theory championed by several strategists. Capital markets have
not demonstrated as much resilience. The key concern is inflation and the impact
on domestic consumption, the key to sustainable decoupling. Food and fuel prices
have soared, causing panic in more poverty-stricken countries and friction in
most markets. As food becomes a greater proportion of disposable income,
discretionary purchasing might suffer, as would credit growth. A shortfall in
domestic spending will be problematic for countries with falling exports. In
addition, wages are beginning to creep up, which could dent record profit
margins. Demographics should support sustainable growth through consumption;
most countries now have a fiscal surplus, and governments are generally stable.
ASIA - China is contending with soaring food inflation, rising wage costs,
and a shift in economic structure. The country will increasingly rely on
consumption, not exports, for economic expansion. This is counter to the prior
deflationary policy of exporting cheap labor and capital, which is responsible
for low global inflation and interest rates. Developed markets could experience
a profit squeeze as the benefits of offshore production diminish. Nearer term
China has slowed, but not markedly, and very much in line with government
objectives. The market is down 35% from its 12-month high and is trading 7%
below trend. A recovery will likely favor more locally focused companies. India
has successfully curbed rising inflation with a range of in monetary policy
changes. Consumer spending has declined, and core ex-fuel inflation is subdued.
South Korea remains exposed to the U.S. through exports. However, demand
for capital goods in emerging Asia, a nascent local economic recovery, and
recent elections provide support. Additionally, the export segment has increased
trade with China and Europe offsetting reliance on the US. Taiwan's market has
been buoyed by the recent KMT party victories for the legislature and
presidency. The party is strongly in favor of deeper ties with mainland China,
which could herald the beginning of a more normalized relationship. The country
remains one of the least expensive in Asia, with 20% earnings growth forecasted
for 2008. Thailand looks to be entering a period of political stability after
voters approved a new constitution in the country's first-ever referendum.
Public sector investment could offset the impact of oil prices on consumers.
LATIN AMERICA - Rising inflation and weak U.S. demand could create
headwinds for Latin America. Rising costs are likely to constrain monetary
policy leading to lower Gross Domestic Product ("GDP") growth versus 2007.
Mexico is clearly the most vulnerable to a U.S. slowdown, and we have already
observed a fall in remittances in export activity. However, public spending and
tax reform could help offset these factors. Brazil is more optimally positioned
due to rising wages and the lag effect of monetary easing. Once heavily
dependent on the commodity cycle, Brazil's local economy is set to take a larger
role in the country's growth. This thesis may be tested later in 2008 as
Brazil's central bank considers raising interest rates in upcoming policy
meetings to offset moderately rising inflation expectations.
EUROPE, MIDDLE EAST AND AFRICA (EMEA) - Inflation is the main risk facing
Central Europe, with policy reaction varying by country. In Poland, local demand
is robust and inflation rising. Fiscal stimulus is expected to keep growth in
line with 2007, causing inflation to remain high. Hungary is dealing with
lackluster growth and a current account deficit. The country is growing at 2.5%,
below its 4% potential. Domestic demand in Turkey has fallen as higher interest
rates have curbed spending. Although an extended period of lower inflation
appears more realistic, falling wage costs will likely suppress consumption in
the near term. The political uncertainty surrounding the Turkish military's
recommendation to the High Court to ban the AK Party, including PM Erdogen and
President Gul, a party which recently won 47% of the popular vote, could weigh
on the market for some time. Russian consumer confidence and oil prices should
support further expansion in 2008. President Putin handed over the reigns to new
President Medvedev and assumed the Prime Minister position, securing his control
over Russian policy. Liquidity is likely to stay high, as the government appears
intent to keep expansion on track despite higher prices. South Africa has
enjoyed a relatively long period of domestic consumption strength. Inflation is
stubbornly high at 7%, leading to higher rates and a period of weak domestic
demand.
10
PERFORMANCE OVERVIEW
AMERICAN BEACON EMERGING MARKETS FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Institutional Class of the Emerging Markets Fund returned -11.47% for
the six months ended April 30, 2008. The Fund underperformed the MSCI Emerging
Markets Index ("Index") return of -10.28% and the Lipper Emerging Markets Funds
Index return of -9.84% for the period.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08 SINCE
---------------------------- INCEP.
6 MONTHS* 1 YEAR 5 YEARS (7/31/00)
--------- ------ ------- ---------
Institutional Class (1,4)...... -11.47% 19.90% 33.03% 16.36%
PlanAhead Class (1,2,4) ....... -11.63% 19.42% 32.66% 16.12%
AMR Class (1,4)................ -11.36% 20.21% 33.38% 16.66%
MSCI Emg Mkts Index(3)......... -10.28% 25.37% 35.34% 16.98%
Lipper Emg Mkts Funds
Index (3)................... -9.84% 21.02% 34.20% 16.60%
* Not annualized
1. Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares.
2. Fund performance for the since inception period represents the total
returns achieved by the Institutional Class from 7/31/00 up to 10/1/02, the
inception date of the PlanAhead Class, and the returns of the PlanAhead
Class since its inception. Expenses of the PlanAhead Class are higher than
those of the Institutional Class. Therefore, total returns shown may be
higher than they would have been had the PlanAhead Class been in existence
since 7/31/00. A portion of the fees charged to the PlanAhead Class of the
Fund was waived in 2004 and 2005 and recouped in 2006. Performance prior to
fee waivers and fee recoupment is different than the actual returns shown.
3. The MSCI Emerging Markets Index is a market capitalization weighted index
composed of companies that are representative of the market structure of
developing countries in Latin America, Asia, Eastern Europe, the Middle
East and Africa. The Lipper Emerging Market Funds Index tracks the results
of the 30 largest mutual funds in the Lipper Emerging Market Funds
category. Lipper is an independent mutual fund research and ranking
service. One cannot directly invest in an index.
4. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional, PlanAhead and AMR Class shares was
1.41%, 1.77% 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 country
allocation, Fund expenses, and sub-Index returns on the Fund's equitized cash
balances. Stock selection added value for the period.
Relative contribution from country allocation was negative for the
six-month period, as a result of underweighting Brazil and Israel (up over 7%
and 5%, respectively), and Taiwan (which fell nearly 4%). Overweighting Turkey
(down over 31%) also contributed to the comparative underperformance.
Stock selection was positive during the six-month period, as strong
selections in China, South Korea, and Taiwan more than offset poor selections in
Brazil. In China, the Fund benefited from investments in China Mobile (down
15.1%), Global Bio-chem Technology Group (up 26.3%), and GOME Electrical
Appliances Holdings (up 2.3%). South Korean investments in Samsung Electronics
(up 16.1%), and Hyundai Motor (up 7.0%) added value, as did Taiwanese financial
stocks Chinatrust Financial Holding and First Financial Holding (each up over
40%), and Chunghwa Telecom Co. (up 32.9%). In Brazil, significant detractors
from performance included Unibanco (down 6.1%) and Companhia de Tecidos Norte de
Minas (down 43.0%).
The Fund's basic philosophy remains focused on investing in attractively
valued companies with above-average earnings growth expectations.
11
PERFORMANCE OVERVIEW
AMERICAN BEACON EMERGING MARKETS FUND(SM)
APRIL 30, 2008 (UNAUDITED)
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
Petroleo Brasileiro S.A. .................................... 3.9%
Gazprom OAO.................................................. 3.7%
Samsung Electronics Company Ltd. ............................ 2.8%
LUKOIL Oil Co. .............................................. 2.8%
China Mobile Ltd. ........................................... 2.2%
America Movil, S.A.B. de C.V. ............................... 1.1%
Unibanco - Uniao de Bancos Brasileiros S.A. ................. 1.1%
Companhia Vale do Rio Doce................................... 1.1%
Taiwan Semiconductor Manufacturing Co. Ltd................... 1.1%
PetroChina Co. Ltd. ......................................... 1.0%
SECTOR ALLOCATION
% OF
EQUITIES
----------
Financials................................................... 22.2%
Energy....................................................... 17.1%
Materials.................................................... 12.8%
Telecommunication Services................................... 12.6%
Information Technology ...................................... 10.6%
Consumer Discretionary....................................... 9.3%
Industrials.................................................. 6.6%
Consumer Staples............................................. 3.6%
Utilities.................................................... 3.5%
Health Care.................................................. 1.7%
COUNTRY ALLOCATION
(PIE CHART)
% OF
EQUITIES
----------
China........................................................ 16.1%
South Korea.................................................. 15.0%
Brazil....................................................... 12.9%
Taiwan....................................................... 10.3%
Russia....................................................... 9.8%
India........................................................ 8.0%
Other Asia................................................... 7.8%
South Africa................................................. 7.2%
Other Europe, Middle East, Africa............................ 6.9%
Mexico....................................................... 5.4%
Other Latin America.......................................... 0.6%
Investing in foreign equities entails additional risk not associated with
domestic equities, such as currency fluctuations, economic and political
instability and differences in accounting standards. The risks of investing in
foreign equities are heightened when investing in emerging markets.
12
DOMESTIC BOND MARKET OVERVIEW
APRIL 30, 2008 (UNAUDITED)
For the six-month period ended April 30, 2008, the investment grade
fixed-income market, as defined by the Lehman Brothers Aggregate Index (the
"Index"), produced a 4.08% total return. The government sectors benefited from
the flight-to-quality that continued into 2008 from the sub-prime mortgage
meltdown, while the remaining sectors felt the brunt of the market disruption.
This period marked one of the most extreme dislocations in the financial markets
in recent history, and it is likely to have a prolonged effect on the economy.
However, by period end, the markets were just beginning to find a glimmer of
hope that the worst of the liquidity freeze was behind them. The consumer and
the economy still have challenges ahead, but the fear and panic in the financial
markets may have begun to subside.
TOTAL RETURNS
PERIODS ENDED 4/30/08
---------------------
6 MONTH 12 MONTH
--------- ---------
Lehman Aggregate........... 4.08% 6.87%
Lehman Gov/Credit.......... 4.14% 7.09%
SECTOR
U.S. Treasury.............. 5.87% 9.72%
U.S. Agency................ 5.10% 8.49%
Mortgage-Backed............ 4.62% 7.39%
Commercial MBS............. 1.16% 2.62%
Asset-Backed............... -4.03% -2.46%
U.S. Credit................ 2.02% 3.84%
Industrial.............. 1.93% 4.20%
Utility................. 1.68% 3.35%
Finance................. 1.04% 1.74%
Non-Corporate........... 4.90% 8.28%
CREDIT RATING
Aaa........................ 4.73% 7.82%
Aa......................... 3.03% 4.80%
A.......................... 1.52% 3.07%
Baa........................ 0.65% 2.21%
U.S.TREASURY YIELD
6 MONTH 12 MONTH
------- --------
2 Year..................... 4.42% 7.93%
3 Year..................... 5.24% 9.25%
5 Year..................... 7.16% 11.21%
10 Year.................... 7.35% 11.04%
30 Year.................... 6.29% 9.91%
The yield curve steepened significantly during the period as the Federal
Reserve Board (the "Fed") slashed interest rates in what became the most
aggressive series of interest rate cuts since the early '80's - when rates were
north of 15%. The Fed Funds rate began this six-month period at 4.50% and ended
at 2.00%. While the rate cuts will take time to settle into the economy, the
markets had calmed sufficiently by period end to allow the Fed an opportunity to
pause and assess the impact of its rate cuts thus far. Despite the U.S.
slowdown, persistent commodity price increases kept the Fed's eye on inflation
and held the longer end of the U.S. Treasury curve relatively stable.
(PERFORMANCE GRAPH)
All credit sectors were adversely affected by the sub-prime disruption.
Within the U.S. Credit sector, Financials continued to see the brunt of the
underperformance. The abrupt sale of 85-year-old Bear Stearns in mid-March due
to a lack of liquidity epitomized the severity of the crisis. Issuers that were
most reliant on short-term funding faced significant challenges as liquidity
dried up. Industrials and Utilities also underperformed government equivalents,
but this was due to the general market contagion rather than from direct
sub-prime exposure. The nature of a credit freeze is that entire sectors are
pulled down at once - regardless of affiliation
The Asset-Backed sector posted a negative return for the period due to the
home-equity loan segment, which returned -23.4%, due to its proximity to
sub-prime mortgages. The Commercial Mortgage sector also experienced severe
spread widening as did all mortgages other than agency-backed securities. The
non-agency sectors were also particularly affected by the collapse of the
Collateralized Debt Obligations ("CDO") market and other structured investment
products. These entities represented significant sources of demand for
asset-backed and commercial mortgage-backed securities, and when these buyers
vanished, prices dropped. Furthermore, as losses mounted, many of these
structures were then forced to liquidate assets into a market that was already
down and out.
13
DOMESTIC BOND MARKET OVERVIEW
APRIL 30, 2008 (UNAUDITED)
(PERFORMANCE GRAPH)
The markets continued to struggle through their challenges, but investors
found comfort in the fact that capital, though expensive, was ultimately
available to those who needed it. Yes, there were casualties, as there are in
every crisis, but in the end, the markets gradually regained their footing. By
period end, most of the initial pain was likely over. Going forward, however,
companies will have to contend with a slowing economy and an exhausted consumer.
To the extent that these issues can be managed over time and in an orderly
fashion, the worst of the sub-prime saga may finally be behind us.
14
HIGH YIELD BOND MARKET OVERVIEW
APRIL, 30 2008 (UNAUDITED)
Concerns about market liquidity and a possible recession in the U.S. led to
heightened financial market volatility over the six-month period ended April 30,
2008. U.S. economic sluggishness was confirmed by anemic Gross Domestic Product
("GDP") annualized growth in both the fourth quarter of 2007 (0.6%) and the
first quarter of 2008 (0.9%). Flat-line market expectations for GDP growth in
the first half of 2008 connote the market's reduced expectations for corporate
earnings, but excluding the financials sector of the S&P 500, corporate earnings
were still positive during the first quarter of 2008. Nonetheless, weak economic
growth and prevailing aversion toward risk taking significantly pressured
equities and the S&P 500 Index's total return was -9.6% over the six months
under review.
Given the potential for the U.S. to slip into recession, the Federal
Reserve Board not only reduced its target rate for short-term loans from 4.50%
to 2.00%, but also broadened liquidity to certain banks and brokerage firms--and
facilitated the sale of Bear Stearns to JPMorgan Chase. With the slowing economy
and weakening labor market, core consumer inflation began to tick lower and even
headline inflation, which had been pushed up with the surge in energy prices,
moved down from its 2007 highs. Overall, in this environment, 10-year Treasury
bond yields declined from 4.47% to 3.73% by period-end.
As a result of the drop in the equity market, broad financial market risk
aversion, economic concerns, and still-pending potential supply from past
leveraged buyout transactions, high-yield spreads widened from 4.4% at the end
of October 2007 to 6.8% as of April 30, 2008. At that level, high-yield
valuations were cheap relative to their 10-year average spread of approximately
5.9%. In terms of fundamentals, default rates have edged higher thus far in 2008
but remain low relative to historical averages. Valuation levels still price in
a meaningful increase in default rates going forward, driven by a combination of
weaker corporate earnings growth and considering the lower quality of new
high-yield issuance that has come to market over the past two-to-three years.
Widening spreads put downward pressure on prices, and caused the overall
high-yield market to generate a total return of -0.8% (as measured by the
JPMorgan Global High-Yield Index), compared to the more interest-rate sensitive
Lehman U.S. Aggregate Bond Index (a broad index of investment-grade fixed income
securities), which rose 4.1%. Generally, within the Lehman Aggregate Index, more
credit-sensitive sectors underperformed Treasury returns during the period.
15
PERFORMANCE OVERVIEW
AMERICAN BEACON HIGH YIELD BOND FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Institutional Class of the High Yield Bond Fund returned -1.18% for the
six months ended April 30, 2008. The Fund underperformed the JPMorgan Global
High-Yield Index ("Index") return of -0.82% but outperformed the Lipper High
Current Yield Funds Index, which returned -1.92% for the period.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08 SINCE
---------------------------- INCEP.
6 MONTHS* 1 YEAR 5 YEARS (12/29/00)
--------- ------ ------- ----------
Institutional Class (1, 5) ...... -1.18% -0.68% 6.78% 7.96%
PlanAhead Class (1, 2, 5) ....... -1.18% -0.88% 6.51% 7.72%
AMR Class (1, 3, 5) ............. -1.04% -0.49% 6.82% 7.98%
JPMorgan GlobaL High-Yield
Index (4) .................... -0.82% -0.63% 8.67% 8.56%
Lipper High Current Yield
Funds Index (4) .............. -1.92% -1.81% 7.75% 6.27%
* Not annualized
1. Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares. A portion of the fees charged to the Institutional
Class of the Fund was waived through 2004. Performance prior to waiving
fees was lower than the actual returns shown for periods through 2004.
2. Fund performance for the since inception period represents the total
returns achieved by the Institutional Class from 12/29/00 up to 3/1/02, the
inception date of the PlanAhead Class, and the returns of the PlanAhead
Class since its inception. Expenses of the PlanAhead Class are higher than
those of the Institutional Class. As a result, total returns shown may be
higher than they would have been had the PlanAhead Class been in existence
since 12/29/00.
3. Fund performance for the one-year, five-year and since inception periods
represents the total returns achieved by the Institutional Class from
12/29/00 up to 9/4/07, the inception date of the AMR Class, and the returns
of the AMR Class since its inception. Expenses of the AMR Class are lower
than those of the Institutional Class. As a result, total rturns shown may
be lower than they would have been had the AMR Class been in existence
since 12/29/00.
4. The JPMorgan Global High-Yield Index ("JPMorgan Index") is an unmanaged
index of fixed income securities with a maximum credit rating of BB+ or
Ba1. Issues must be publicly registered or issued under Rule 144A under the
Securities Act of 1933, with a minimum issue size of $75 million (par
amount). A maximum of two issues per issuer are included in the JPMorgan
Index. Convertible bonds, preferred stock, and floating-rate bonds are
excluded from the JPMorgan Index. The Lipper High Current Yield Funds Index
tracks the results of the 30 largest mutual funds in the Lipper High
Current Yield Funds category. Lipper is an independent mutual fund research
and ranking service. One cannot directly invest in an index.
5. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional, PlanAhead, and AMR Class shares was
0.87%, 1.09%, 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 underperformed the Index over the six-month period due to issue
selection, fund expenses, and sector allocation. Issue selection in the
Manufacturing and Consumer sectors contributed to the relative underperformance,
despite added value from selections in the Cable/Media, Service and Finance
sectors.
From a sector allocation perspective, the Fund benefited from overweighting
the Other Corporate sector (up 3.3%) and underweighting the Finance sector (down
3.1%). The Fund underperformed the Index primarily due to overweighting the
Cable/Media sector (down 7.6%), which was the worst-performing sector in the
Index for the period. Underweighting the Utility and Energy sectors (up 1.0% and
4.1%, respectively) also contributed to the underperformance. The Energy sector
was the best-performing sector over the six months.
The sub-advisors' "bottom-up", research intensive investment process, which
focuses on companies with strong cash flow and fundamental credit strength,
remains in place.
16
PERFORMANCE OVERVIEW
AMERICAN BEACON HIGH YIELD BOND FUND(SM)
APRIL 30, 2008 (UNAUDITED)
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
General Motors Acceptance Corp., 6.875%, Due 9/15/2011....... 1.2%
Ford Motor Credit Co. LLC, 9.875%, Due 8/10/2011............. 1.1%
Edison Mission Energy, 7.000%, Due 5/15/2017................. 1.1%
Penske Auto Group, Inc., 7.750%, Due 12/15/2016.............. 1.0%
Prestige Brands, Inc., 9.250%, Due 4/15/2012................. 1.0%
Block Communications, Inc., 8.250%, Due 12/15/2015........... 1.0%
NRG Energy, Inc., 7.375%, due 2/1/2016....................... 0.9%
Newark Group, Inc., 9.750%, Due 3/15/2014.................... 0.9%
Jarden Corp., 7.500%, Due 5/1/2017 .......................... 0.9%
Hercules, Inc., 6.750%, Due 10/15/2029....................... 0.9%
SECTOR ALLOCATION
% OF
FIXED INCOME
------------
Corporate.................................................... 100.0%
Investing in debt securities entails interest rate risk which is the risk that
debt securities will decrease in value with increases in market interest rates.
Investing in high yield securities involves additional risks when compared to
investing in investment grade securities. These include a greater risk of
default or bankruptcy and an increased sensitivity to financial difficulties or
changes in interest rates.
17
PERFORMANCE OVERVIEW
AMERICAN BEACON ENHANCED INCOME FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The PlanAhead Class of the Enhanced Income Fund returned 1.19% for the six
months ended April 30, 2008. Its benchmark, a blend of 75% Lehman Brothers
Aggregate and 25% Merrill Lynch All U.S. Convertibles Index, returned 1.62%. The
Fund's peer group, the Lipper Intermediate Investment Grade Index, returned
2.06% for the same period.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08 SINCE
---------------------------- INCEP.
6 MONTHS* 1 YEAR 3 YEARS (7/1/03)
--------- ------ ------- --------
PlanAhead Class(1,4).......... 1.19% 4.60% 5.22% 4.25%
Enhanced Income
Composite Index(3).......... 1.62% 4.94% 5.81% 4.77%
Linked Lehman Bros.
Aggregrate Index (2)........ 4.08% 6.87% 4.94% 6.22%
Merrill Lynch All U.S.
Convertibles Index (2)...... -5.43% -1.08% 8.67% 7.93%
Lipper Intermediate
Investment Grade Index (2).. 2.06% 4.02% 4.01% 3.64%
* Not annualized
1. Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares.
2. The Linked Lehman Brothers Aggregate Index represents returns of the Lehman
Bros. Gov./Credit Intermediate Index ("Intermediate Index") up to October
31, 2006 and the Lehman Bros. Aggregate Index ("Aggregate Index")
thereafter. The Intermediate Index is an unmanaged index of investment
grade corporate and government debt issues with maturities between one and
ten years. The Aggregate Index is a market value weighted index of
government, corporate, mortgage-backed and asset-backed fixed-rate debt
securities of all maturities. The Merrill Lynch All U.S. Convertibles Index
is an unmanaged index of domestic securities of all quality grades that are
convertible into U.S. dollar-denominated common stock, ADRs or cash
equivalents. The Lipper Intermediate Investment Grade Index tracks the
results of the 30 largest mutual funds in the Lipper Intermediate
Investment Grade category. Lipper is an independent mutual fund research
and ranking service. One cannot directly invest in an index.
3. To reflect the Fund's allocation of its assets between investment grade
fixed-income securities and convertible securities, the returns of the
Linked Lehman Brothers Aggregate Index and the Merrill Lynch All U.S.
Convertibles Index have been combined in a 75%/25% proportion.
4. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the PlanAhead Class shares was 0.95%. The expense ratio
above may vary from the expense ratio presented in other sections of this
report that is based on expenses incurred during the period covered by this
report.
The Fund's assets have been allocated approximately 75% to American Beacon
Advisors, Inc. (the "Manager") which invests primarily in income producing,
short- and intermediate-term investment grade bonds and 25% to a sub-advisor
which invests in securities including convertible bonds, convertible preferreds,
high yield bonds, and equities in order to try to enhance the return of the
overall Fund.
During the six-month period, the investment grade bond portion of the Fund
returned 4.4% before expenses outperforming the 4.1% return for the Lehman
Brothers Aggregate Index. This portion of the Fund benefited from holdings in
Corporate and Asset-Backed securities, which added to relative performance.
The remaining portion of the Fund, managed by the Fund's sub-advisor,
returned -6.2% before expenses. These results slightly trailed the -5.8% return
of the Merrill Lynch All U.S. Convertibles Index. This portion of the Fund's
greater equity sensitivity relative to its benchmark helped performance in the
period as convertible issues with higher equity sensitivity held up better,
reflecting an increase in market volatility, as well as their underlying stocks
performing better than the broad equity market. The sub-advisor also utilizes
common stocks and corporate bonds in order to better manage the risk/reward
profile of this portion of the Fund. The common stock holdings detracted from
performance in the period, as the equity market suffered, yet the straight
corporate bond holdings added to results as they outperformed the benchmark
return.
The Manager and the Fund's sub-advisor remain focused on the Fund's
investment objectives of generating income and capital appreciation.
18
PERFORMANCE OVERVIEW
AMERICAN BEACON ENHANCED INCOME FUND(SM)
APRIL 30, 2008 (UNAUDITED)
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
U.S. Treasury Note, 4.750%, Due 5/15/2014..................... 3.4%
Federal Home Loan Mortgage Corp., Pool #G08079, 5.000%, Due
9/1/2035................................................... 2.5%
Federal National Mortgage Association, 7.250%, Due
1/15/2010.................................................. 2.2%
Federal Home Loan Mortgage Corp., 5.125%, Due 4/18/2011....... 2.1%
U.S. Treasury Bond, 7.875%, Due 2/15/2021..................... 1.9%
Federal Home Loan Bank, 4.500%, Due 9/16/2013................. 1.7%
U.S. Treasury Note, 4.125%, Due 5/15/2015..................... 1.7%
Federal National Mortgage Association, Pool #745275, 5.000%,
Due 2/1/2036............................................... 1.7%
Federal National Mortgage Association, Pool #745418, 5.500%,
Due 4/1/2036............................................... 1.7%
Federal National Mortgage Association, 5.375%, Due 6/12/2017.. 1.5%
FIXED-INCOME SECTOR ALLOCATION
% OF
FIXED INCOME
------------
Corporate Bonds............................................... 32.3%
Mortgage-Backed............................................... 29.3%
Total Convertible Bonds....................................... 14.2%
Treasury...................................................... 10.6%
Agency........................................................ 9.3%
Asset-Backed.................................................. 4.3%
EQUITY SECTOR ALLOCATION
% OF
EQUITIES
--------
Information Technology........................................ 27.4%
Industrials................................................... 23.9%
Financials.................................................... 20.6%
Healthcare.................................................... 14.7%
Consumer Staples.............................................. 6.0%
Consumer Discretionary........................................ 3.7%
Materials..................................................... 3.7%
Investing in debt securities entails interest rate risk which is the risk that
debt securities will decrease in value with increases in market interest rates.
19
PERFORMANCE OVERVIEW
AMERICAN BEACON INTERMEDIATE BOND FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Institutional Class of the Intermediate Bond Fund returned 4.58% for
the six months ended April 30, 2008, outperforming the Lehman Brothers Aggregate
Index ("Index") return of 4.08% and the Lipper Intermediate Investment Grade
Index return of 2.06% for the same period.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08
---------------------------------------
6 MONTHS* 1 YEAR 5 YEARS 10 YEARS
--------- ------ ------- --------
Institutional Class(1,3)........... 4.58% 7.39% 4.45% 5.67%
Lehman Bros. Agg.
Index (2)....................... 4.08% 6.87% 4.37% 5.96%
Lipper Intermediate Inv.
Grade Index (2)................. 2.06% 4.02% 3.89% 5.39%
* Not annualized
1. Performance shown is historical and may not be 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 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. Performance shown reflects the Fund's receipt in
December 2006 and March 2008 of class action proceeds that were related to
investment activity in 2002. The Fund's performance was higher than it
would have been absent receipt of the settlement proceeds.
2. The Lehman Brothers Aggregate Index is a market value weighted index of
government, corporate, mortgage-backed and asset-backed fixed-rate debt
securities of all maturities. The Lipper Intermediate Investment Grade
Index tracks the results of the 30 largest mutual funds in the Lipper
Intermediate Investment Grade category. Lipper is an independent mutual
fund research and ranking service. One cannot directly invest in an index.
3. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional Class shares was 0.35%. The expense
ratio above may vary from the expense ratio presented in other sections of
this report that is based on expenses incurred during the period covered by
this report.
The Fund's excess performance relative to the Index was primarily due to
good security selection in the Corporate sector and exposure to U.S. Treasuries.
From a duration perspective, the Fund's holdings in longer termed maturities (10
to 20 years) added value relative to the benchmark. The Fund's duration overall
was relatively neutral versus the Index over the course of the six months.
Finally, somewhat offsetting the Fund's good performance was an overweight
versus the Index in BBB and A quality bonds, which lagged performance of higher
quality bonds.
The Fund's investment managers remain focused on a conservative approach
toward investing in the bond market and on issuer-specific opportunities.
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
U.S. Treasury Note, 4.750%, Due 5/15/2014..................... 5.5%
U.S. Treasury Note, 2.750%, Due 2/28/2013..................... 5.1%
Federal Home Loan Bank, 4.500%, Due 9/16/2013................. 3.3%
Federal National Mortgage Association, 7.250%, Due 1/15/2010.. 3.3%
U.S. Treasury Note, 4.500%, Due 3/13/2012..................... 2.9%
Federal Home Loan Mortgage Corp., 5.125%, Due 4/18/2011....... 2.8%
U.S. Treasury Note, 3.500%, Due 2/15/2018..................... 2.4%
U.S. Treasury Note, 4.125%, Due 5/15/2015..................... 1.9%
Federal Home Loan Mortgage Corp., Pool #A73703, 5.000%, Due
3/1/2038...................................................... 1.4%
Federal National Mortgage Association, 5.375%, Due 6/12/2017.. 1.3%
SECTOR ALLOCATION
% OF
FIXED INCOME
------------
Mortgage-Backed............................................... 33.0%
Corporates.................................................... 25.8%
U.S. Treasury................................................. 24.0%
U.S. Agency................................................... 15.6%
Asset-Backed.................................................. 1.6%
Investing in debt securities entails interest rate risk which is the risk that
debt securities will decrease in value with increases in market interest rates.
20
PERFORMANCE OVERVIEW
AMERICAN BEACON SHORT-TERM BOND FUND(SM)
APRIL 30, 2008 (UNAUDITED)
The Institutional Class of the Short-Term Bond Fund returned 2.79% for the
six months ended April 30, 2008, which underperformed the Merrill Lynch 1-3 Year
Gov/Corp Index ("Index") return of 3.83% but outperformed the Lipper Short
Investment Grade Bond Funds Index return of 1.09%.
ANNUALIZED TOTAL RETURNS
PERIODS ENDED 4/30/08
---------------------------------------
6 MONTHS* 1 YEAR 5 YEARS 10 YEARS
--------- ------ ------- --------
Institutional Class(1,3)........... 2.79% 5.28% 3.46% 4.72%
PlanAhead Class(1,3) .............. 2.40% 4.74% 2.90% 4.19%
Lipper Short Inv. Grade Index(2)... 1.09% 3.05% 2.78% 4.11%
Merrill Lynch 1-3 Yr.
Gov./Corp. Index(2).............. 3.83% 7.13% 3.52% 4.97%
* Not annualized
1. Performance shown is historical and may not be 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 as of date indicated, and current performance may be lower or
higher than the performance data quoted. To obtain performance as of the
most recent month end, please visit www.americanbeaconfunds.com or call
1-800-967-9009. Fund performance in the table above does not reflect the
deduction of taxes a shareholder would pay on distributions or the
redemption of shares. A portion of the fees charged to the PlanAhead Class
of the Fund has been waived. Performance prior to waiving fees was lower
than the actual returns shown. Performance shown reflects the Fund's
receipt in December 2006 and March 2008 of class action proceeds that were
related to investment activity in 2002. The Fund's performance was higher
than it would have been absent receipt of the settlement proceeds.
2. The Merrill Lynch 1-3 Yr. Gov./Corp. Index is a market value weighted
performance benchmark for government and corporate fixed-rate debt
securities with maturities between one and three years. The Lipper Short
Investment Grade Bond Funds Index tracks the results of the 30 largest
mutual funds in the Lipper Short Investment Grade Bond Funds category.
Lipper is an independent mutual fund research and ranking service. One
cannot directly invest in an index.
3. The total annual Fund operating expense ratio set forth in the most recent
Fund prospectus for the Institutional and PlanAhead Class shares was 0.38%
and 0.99%, respectively. The expense ratios above may vary from the expense
ratios presented in other sections of this report that are based on
expenses incurred during the period covered by this report.
The Fund's relative return during the period reflects its holdings in the
various credit sectors. As compared to the Index, the Fund underperformed
because it was overweighted in Corporates and Asset-Backed securities.
The Fund generally maintains an overweight position in investment-grade
Corporates to generate incremental yield-to-maturity compared to the Index.
However, during periods of significant market disruptions, these holdings can
underperform government equivalents. To protect against these events, the Fund's
holdings are limited to investment-grade issuers that we believe are likely to
weather such unexpected volatility.
Duration did not play a significant role during the period. The Fund began
the period with a duration neutral to the Index and ended the period with a
short duration, but this change did not significantly affect the Fund's relative
returns. With interest rates at such low levels, the Fund's duration will likely
remain short-to-neutral until the economy regains its footing.
Overall, the period was challenging, but we remain confident in the
long-term success of the Fund's investment strategy. Markets began to stabilize
by period end and may have marked an end to this unusual period of disruption.
We will continue to be conservative in our approach to credit risk, and we look
to take advantage of opportunities in this market to generate attractive
long-term results.
21
PERFORMANCE OVERVIEW
AMERICAN BEACON SHORT-TERM BOND FUND(SM)
APRIL 30, 2008 (UNAUDITED)
TOP TEN HOLDINGS
% OF
NET ASSETS
----------
U.S. Treasury Note, 3.125%, Due 11/30/2009.................... 11.8%
Federal Home Loan Mortgage Corp., 4.750%, Due 11/3/2009....... 5.0%
General Electric Capital Corp., 5.875%, Due 2/15/2012......... 3.0%
USAA Auto Owner Trust, 5.550%, Due 2/15/2013.................. 3.0%
HSBC Automotive Trust, 4.350%, Due 6/18/2012.................. 2.9%
Banc of America Securities Auto Trust, 4.080%, Due 4/18/2010.. 2.9%
John Deere Capital Corp., 4.125%, Due 1/15/2010............... 2.4%
Merrill Lynch & Co., Inc., 6.00%, Due 2/17/2009............... 2.4%
Comerica Bank, 6.000%, Due 10/1/2008.......................... 2.1%
MBNA Corp., 7.500%, Due 3/15/2012............................. 2.1%
SECTOR ALLOCATION
% OF
FIXED INCOME
------------
Corporate Bonds............................................... 58.9%
Asset-Backed.................................................. 19.1%
Treasury...................................................... 12.2%
Agency........................................................ 5.1%
Mortgage-Backed............................................... 4.7%
Investing in debt securities entails interest rate risk which is the risk that
debt securities will decrease in value with increases in market interest rates.
22
FUND EXPENSES - ACTUAL
APRIL 30, 2008 (UNAUDITED)
FUND EXPENSE EXAMPLE
As a shareholder of a Fund, you incur two types of costs: (1) transaction
costs, including redemption fees if applicable, and (2) ongoing costs, including
management fees, administrative service fees, and other Fund expenses. The
examples below are intended to help you understand the ongoing cost (in dollars)
of investing in a particular 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, 2007 through April 30, 2008.
ACTUAL EXPENSES
The following 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 = 8.6), then multiply the result by the "Expenses Paid During
Period" for the applicable Fund to estimate the expenses you paid on your
account during this period. Shareholders of the PlanAhead and Institutional
Classes that invest in a Fund through an IRA may be subject to a custodial IRA
fee of $12 that is typically deducted each December. If your account was subject
to a custodial IRA fee during the period, your costs would have been $12 higher.
SMALL CAP HIGH
LARGE CAP MID-CAP VALUE EMERGING YIELD
BALANCED GROWTH VALUE OPPORTUNITY MARKETS BOND INTERMEDIATE SHORT-TERM
INSTITUTIONAL CLASS FUND FUND FUND FUND FUND FUND BOND FUND BOND FUND
- ------------------- --------- --------- --------- ----------- --------- --------- ------------ ----------
Beginning Account Value 11/1/07 .. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value 04/30/08 .... $ 939.85 $ 892.91 $ 892.13 $ 860.13 $ 885.32 $ 988.24 $1,045.76 $1,027.88
Expenses Paid During
Period 11/1/07-04/30/08* ...... $ 2.75 $ 4.24 $ 3.86 $ 4.86 $ 6.38 $ 4.50 $ 1.58 $ 1.71
Annualized Expense Ratio ......... 0.57% 0.90% 0.82% 1.05% 1.36% 0.91% 0.31% 0.34%
SMALL CAP
MID-CAP VALUE EMERGING ENHANCED
BALANCED VALUE OPPORTUNITY MARKETS HIGH YIELD INCOME SHORT-TERM
PLANAHEAD CLASS FUND FUND FUND FUND BOND FUND FUND BOND FUND
- --------------- --------- --------- ----------- --------- ---------- --------- ----------
Beginning Account Value 11/1/07 .. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value 04/30/08 .... $ 938.63 $ 890.39 $ 858.56 $ 883.69 $ 988.20 $1,011.92 $1,023.96
Expenses Paid During
Period 11/1/07-04/30/08 * ..... $ 3.95 $ 5.78 $ 5.55 $ 8.34 $ 5.49 $ 4.65 $ 4.43
Annualized Expense Ratio ......... 0.82% 1.23% 1.20% 1.78% 1.11% 0.93% 0.88%
BALANCED MID-CAP
SERVICE CLASS FUND VALUE FUND
- ------------- --------- ----------
Beginning Account Value 11/1/07 .. $1,000.00 $1,000.00
Ending Account Value 04/30/08 .... $ 936.96 $ 889.43
Expenses Paid During
Period 11/1/07-04/30/08 * ..... $ 5.10 $ 7.09
Annualized Expense Ratio ......... 1.06% 1.51%
BALANCED LARGE CAP MID-CAP EMERGING HIGH YIELD
AMR CLASS FUND GROWTH FUND VALUE FUND MARKETS FUND BOND FUND
- --------- --------- ----------- ---------- ------------ ----------
Beginning Account Value 11/1/07 .. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value 04/30/08 .... $ 940.82 $ 894.97 $ 892.36 $ 886.43 $ 989.64
Expenses Paid During
Period 11/1/07-04/30/08* ...... $ 1.50 $ 2.83 $ 3.72 $ 5.53 $ 3.12
Annualized Expense Ratio ......... 0.31% 0.60% 0.79% 1.18% 0.63%
- ----------
* Expenses are equal to the Fund's annualized expense ratio for the six-month
period 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 (182) by days in the year (366) to reflect the half-year
period.
23
FUND EXPENSES - HYPOTHETICAL
APRIL 30, 2008 (UNAUDITED)
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The following tables provide information about hypothetical account values
and hypothetical expenses based on a 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 a particular 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
PlanAhead and Institutional Classes that invest in a Fund through an IRA may be
subject to a custodial IRA fee of $12 that is typically deducted each December.
If your account was subject to a custodial IRA fee during the period, your costs
would have been $12 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 a
Fund, such as 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
following 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.
SMALL CAP HIGH
LARGE CAP MID-CAP VALUE EMERGING YIELD
BALANCED GROWTH VALUE OPPORTUNITY MARKETS BOND INTERMEDIATE SHORT-TERM
INSTITUTIONAL CLASS FUND FUND FUND FUND FUND FUND BOND FUND BOND FUND
- ------------------- --------- --------- --------- ----------- --------- --------- ------------ ----------
Beginning Account Value 11/1/07 .. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value 04/30/08 .... $1,022.03 $1,020.39 $1,020.79 $1,019.64 $1,018.10 $1,020.34 $1,023.32 $1,023.17
Expenses Paid During
Period 11/1/07-04/30/08 * ..... $ 2.87 $ 4.52 $ 4.12 $ 5.27 $ 6.82 $ 4.57 $ 1.56 $ 1.71
Annualized Expense Ratio ......... 0.57% 0.90% 0.82% 1.05% 1.36% 0.91% 0.31% 0.34%
SMALL CAP
MID-CAP VALUE EMERGING ENHANCED
BALANCED VALUE OPPORTUNITY MARKETS HIGH YIELD INCOME SHORT-TERM
PLANAHEAD CLASS FUND FUND FUND FUND BOND FUND FUND BOND FUND
- --------------- --------- --------- ----------- --------- ---------- --------- ----------
Beginning Account Value 11/1/07 .. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value 04/30/08 .... $1,020.79 $1,018.75 $1,018.90 $1,016.01 $1,019.34 $1,020.24 $1,020.49
Expenses Paid During
Period 11/1/07-04/30/08 * ..... $ 4.12 $ 6.17 $ 6.02 $ 8.92 $ 5.57 $ 4.67 $ 4.42
Annualized Expense Ratio ......... 0.82% 1.23% 1.20% 1.78% 1.11% 0.93% 0.88%
BALANCED MID-CAP
SERVICE CLASS FUND VALUE FUND
- ------------- --------- ----------
Beginning Account Value 11/1/07 .. $1,000.00 $1,000.00
Ending Account Value 04/30/08 .... $1,019.59 $1,017.35
Expenses Paid During
Period 11/1/07-04/30/08 * ..... $ 5.32 $ 7.57
Annualized Expense Ratio ......... 0.82% 1.23%
BALANCED LARGE CAP MID-CAP EMERGING HIGH YIELD
AMR CLASS FUND GROWTH FUND VALUE FUND MARKETS FUND BOND FUND
- --------- --------- ----------- ---------- ------------ ----------
Beginning Account Value 11/1/07 .. $1,000.00 $1,000.00 $1,000.00 $1,000.00 $1,000.00
Ending Account Value 04/30/08 .... $1,023.32 $1,021.88 $1,020.93 $1,019.00 $1,021.73
Expenses Paid During
Period 11/1/07-04/30/08 * ..... $ 1.56 $ 3.02 $ 3.97 $ 5.92 $ 3.17
Annualized Expense Ratio ......... 0.31% 0.60% 0.79% 1.18% 0.63%
- ----------
* Expenses are equal to the Fund's annualized expense ratio for the six-month
period 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 (182) by days in the year (366) to reflect the half-year
period.
24
AMERICAN BEACON BALANCED FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
------- -------
(DOLLARS IN
THOUSANDS)
COMMON STOCKS - 56.37%
CONSUMER DISCRETIONARY - 5.43%
HOTELS, RESTAURANTS & LEISURE - 0.86%
Carnival Corp. + ........................................ 155,300 $ 6,239
Wyndham Worldwide Corp. + ............................... 127,200 2,732
-------
8,971
-------
HOUSEHOLD DURABLES - 0.82%
Centex Corp. + .......................................... 120,800 2,515
Fortune Brands, Inc. .................................... 58,900 3,983
Newell Rubbermaid, Inc. ................................. 60,400 1,240
Pulte Homes, Inc. ....................................... 63,400 827
-------
8,565
-------
MEDIA - 0.99%
CBS Corp. + ............................................. 101,700 2,346
Idearc, Inc. + .......................................... 88,800 293
Interpublic Group of Cos., Inc. ## + .................... 486,000 4,399
R.H. Donnelley Corp. ## + ............................... 82,100 393
Walt Disney Co. Ltd. .................................... 89,400 2,899
-------
10,330
-------
MULTILINE RETAIL - 1.31%
J.C. Penney Company, Inc. + ............................. 68,500 2,911
Macy's, Inc. ............................................ 121,154 3,064
Target Corp. ............................................ 65,500 3,480
Wal-Mart Stores, Inc. ................................... 73,300 4,250
-------
13,705
-------
SPECIALTY RETAIL - 1.45%
Gap, Inc. ............................................... 171,200 3,188
Home Depot, Inc. ........................................ 335,050 9,649
Limited Brands, Inc. + .................................. 100,300 1,858
Liz Claiborne, Inc. + ................................... 23,600 417
-------
15,112
-------
TOTAL CONSUMER DISCRETIONARY ............................... 56,683
-------
CONSUMER STAPLES - 4.03%
BEVERAGES - 0.54%
Diageo plc, ADR ......................................... 68,200 5,586
-------
FOOD & DRUG RETAILING - 0.18%
Safeway, Inc. ........................................... 60,100 1,899
-------
FOOD PRODUCTS - 0.58%
General Mills, Inc. ..................................... 11,900 719
Kraft Foods, Inc. ....................................... 169,945 5,375
-------
6,094
-------
SHARES VALUE
------- -------
(DOLLARS IN
THOUSANDS)
TOBACCO - 2.73%
Altria Group, Inc. ...................................... 166,800 $ 3,336
Imperial Tobacco Group plc, ADR ......................... 121,900 11,701
Philip Morris International, Inc. ## .................... 178,100 9,089
UST, Inc. + ............................................. 85,100 4,431
-------
28,557
-------
TOTAL CONSUMER STAPLES ..................................... 42,136
-------
ENERGY - 6.40%
OIL & GAS - 6.40%
Chevron Corp. ........................................... 92,028 8,849
ConocoPhillips .......................................... 235,176 20,261
Devon Energy Corp. ...................................... 111,100 12,599
Duke Energy Corp. ....................................... 224,700 4,114
Occidental Petroleum Corp. .............................. 155,200 12,914
Royal Dutch Shell plc, ADR .............................. 82,900 6,607
Sunoco, Inc. ............................................ 31,100 1,443
-------
TOTAL ENERGY ............................................... 66,787
-------
FINANCIALS - 13.76%
BANKS - 5.27%
Bank of America Corp. ................................... 500,696 18,796
Comerica, Inc. .......................................... 39,700 1,379
KeyCorp ................................................. 36,100 871
National City Corp. ## .................................. 87,400 524
SunTrust Banks, Inc. .................................... 18,500 1,031
U.S. Bancorp ............................................ 111,260 3,771
Wachovia Corp. + ........................................ 335,800 9,789
Washington Mutual, Inc. ## .............................. 468,800 5,616
Washington Mutual, Inc. + ............................... 744,600 9,151
Wells Fargo & Co. ....................................... 138,000 4,105
-------
55,033
-------
DIVERSIFIED FINANCIALS - 4.69%
American Express Co. .................................... 12,100 581
Capital One Financial Corp. + ........................... 40,100 2,125
Citigroup, Inc. + ....................................... 532,842 13,465
Federal Home Loan Mortgage Corp. ........................ 206,700 5,149
Federal National Mortgage Association ................... 46,700 1,322
Goldman Sachs Group, Inc. ............................... 21,100 4,038
JP Morgan Chase & Co. ................................... 249,534 11,890
Merrill Lynch & Co., Inc. ............................... 87,000 4,335
Morgan Stanley Dean Witter & Co. ........................ 62,600 3,043
SLM Corp. ## + .......................................... 165,200 3,061
-------
49,009
-------
INSURANCE - 3.80%
ACE Ltd. ................................................ 77,800 4,690
See accompanying notes
25
AMERICAN BEACON BALANCED FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
------- -------
(DOLLARS IN
THOUSANDS)
Allstate Corp. .......................................... 22,500 $ 1,133
American International Group, Inc. ...................... 163,800 7,567
Conseco, Inc. ## ........................................ 95,500 1,113
Genworth Financial, Inc. ................................ 177,400 4,091
Hartford Financial Services Group, Inc. ................. 36,800 2,623
MetLife, Inc. ........................................... 109,880 6,686
Travelers Cos., Inc. .................................... 91,600 4,617
UnumProvident Corp. ..................................... 95,000 2,205
XL Capital Ltd. + ....................................... 142,000 4,954
-------
39,679
-------
TOTAL FINANCIALS ........................................... 143,721
-------
HEALTH CARE - 5.73%
HEALTH CARE EQUIPMENT & SUPPLIES - 0.57%
Baxter International, Inc. .............................. 66,100 4,119
Covidien Ltd. ........................................... 39,225 1,832
-------
5,951
-------
HEALTH CARE PROVIDERS & SERVICES - 0.93%
Cigna Corp. ............................................. 104,100 4,446
UnitedHealth Group, Inc. ................................ 56,600 1,847
WellPoint, Inc. ## ...................................... 68,300 3,398
-------
9,691
-------
PHARMACEUTICALS - 4.23%
Amgen, Inc. ## .......................................... 11,400 477
AstraZeneca plc, ADR + .................................. 96,000 4,030
Bristol-Myers Squibb Co. ................................ 437,300 9,608
Eli Lilly & Co. ......................................... 92,400 4,448
Johnson & Johnson ....................................... 55,000 3,690
Merck & Co., Inc. ....................................... 28,900 1,099
Pfizer, Inc. ............................................ 607,700 12,221
Schering-Plough Corp. + ................................. 291,300 5,363
Wyeth Corp. ............................................. 72,100 3,206
-------
44,142
-------
TOTAL HEALTH CARE .......................................... 59,784
-------
INDUSTRIALS - 7.58%
AEROSPACE & DEFENSE - 1.69%
Boeing Co. .............................................. 60,700 5,151
Northrop Grumman Corp. .................................. 45,700 3,362
Raytheon Co. ............................................ 78,900 5,047
United Technologies Corp. ............................... 56,100 4,066
-------
17,626
-------
AIR FREIGHT & COURIERS - 0.45%
FedEx Corp. ............................................. 48,600 4,659
-------
SHARES VALUE
------- -------
(DOLLARS IN
THOUSANDS)
INDUSTRIAL CONGLOMERATES - 3.11%
3M Co. .................................................. 54,900 $ 4,222
General Electric Co. .................................... 161,900 5,294
Honeywell International, Inc. ........................... 221,500 13,157
Textron, Inc. ........................................... 72,200 4,405
Tyco International Ltd. ................................. 116,125 5,434
-------
32,512
-------
MACHINERY - 1.79%
Caterpillar, Inc. + ..................................... 75,900 6,215
Illinois Tool Works, Inc. ............................... 143,900 7,524
ITT Industries, Inc. .................................... 77,000 4,928
-------
18,667
-------
TRANSPORTATION INFRASTRUCTURE - 0.54%
Burlington Northern Santa Fe Corp. ...................... 55,400 5,681
-------
TOTAL INDUSTRIALS .......................................... 79,145
-------
INFORMATION TECHNOLOGY - 6.28%
COMMUNICATIONS EQUIPMENT - 0.48%
Alcatel-Lucent, ADR + ................................... 329,900 2,200
Nokia Corp., ADR ........................................ 93,500 2,812
-------
5,012
-------
COMPUTERS & PERIPHERALS - 2.38%
Hewlett-Packard Co. ..................................... 206,800 9,585
International Business Machines Corp. ................... 126,900 15,317
-------
24,902
-------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.79%
Intel Corp. ............................................. 124,300 2,767
Tyco Electronics Ltd. ................................... 145,825 5,455
-------
8,222
-------
IT CONSULTING & SERVICES - 0.87%
Electronic Data Systems Corp. ........................... 490,100 9,096
-------
SOFTWARE - 1.76%
CA, Inc. ................................................ 388,174 8,594
Microsoft Corp. ......................................... 244,700 6,979
Oracle Corp. ## ......................................... 132,600 2,765
-------
18,338
-------
TOTAL INFORMATION TECHNOLOGY ............................... 65,570
-------
MATERIALS - 1.56%
CHEMICALS - 1.56%
Air Products & Chemicals, Inc. .......................... 31,200 3,071
Dow Chemical Co. ........................................ 56,500 2,268
E. I. du Pont de Nemours & Co. + ........................ 108,300 5,297
Eastman Chemical Co. + .................................. 46,800 3,440
See accompanying notes
26
AMERICAN BEACON BALANCED FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
------- -------
(DOLLARS IN
THOUSANDS)
PPG Industries, Inc. .................................... 36,700 $ 2,252
-------
TOTAL MATERIALS ............................................ 16,328
-------
TELECOMMUNICATION SERVICES - 2.56%
DIVERSIFIED TELECOMMUNICATION - 2.56%
AT&T, Inc. .............................................. 400,277 15,495
Fairpoint Communications, Inc. + ........................ 3,428 32
Verizon Communications, Inc. ............................ 290,628 11,183
-------
TOTAL TELECOMMUNICATION SERVICES ........................... 26,710
-------
UTILITIES - 3.04%
ELECTRIC UTILITIES - 2.48%
CenterPoint Energy, Inc. + .............................. 143,000 2,176
Dominion Resources, Inc. + .............................. 113,600 4,929
Entergy Corp. + ......................................... 64,100 7,362
Exelon Corp. ............................................ 93,400 7,984
FPL Group, Inc. ......................................... 29,700 1,969
Public Service Enterprise Group, Inc. ................... 35,200 1,546
-------
25,966
-------
GAS UTILITIES - 0.56%
Spectra Energy Corp. + .................................. 236,100 5,832
-------
TOTAL UTILITIES ............................................ 31,798
-------
TOTAL COMMON STOCKS ........................................ 588,662
-------
CONVERTIBLE PREFERRED
STOCKS - 0.34%
FINANCIALS - 0.34%
BANKS - 0.34%
National City Corp. ## .................................. 36 3,600
-------
PAR
AMOUNT
-------
CORPORATE OBLIGATIONS - 13.23%
AEROSPACE & DEFENSE - 0.05%
Raytheon Co.,
5.375%, Due 4/1/2013 ....................................... $ 550 562
-------
BANKS - 2.09%
Bank of America Corp.,
5.375%, Due 6/15/2014 ................................... 425 432
7.80%, Due 9/15/2016 .................................... 900 1,022
6.00%, Due 9/1/2017 ..................................... 600 625
5.75%, Due 12/1/2017 .................................... 535 545
Bank of New York Mellon Corp.,
4.95%, Due 11/1/2012 .................................... 355 360
Bank One Corp.,
5.90%, Due 11/15/2011 ................................... 1,225 1,277
PAR
AMOUNT VALUE
------- -------
(DOLLARS IN
THOUSANDS)
4.90%, Due 4/30/2015 ................................. $ 550 $ 533
Citigroup, Inc.,
5.125%, Due 2/14/2011 ................................ 2,500 2,508
6.125%, Due 11/21/2017 ............................... 1,055 1,071
Credit Suisse First Boston,
6.50%, Due 5/1/2008 + ++ ............................. 750 750
Fifth Third Bancorp,
8.25%, Due 3/1/2038 .................................. 1,275 1,347
ING Bank, NV,
5.125%, Due 5/1/2015 ++ .............................. 450 439
JP Morgan Chase & Co.,
6.75%, Due 2/1/2011 .................................. 1,350 1,408
6.00%, Due 1/15/2018 ................................. 1,210 1,254
National City Bank,
4.50%, Due 3/15/2010 ................................. 1,600 1,521
Synovus Financial Corp.,
4.875%, Due 2/15/2013 ................................ 550 520
Wachovia Corp.,
5.30%, Due 10/15/2011 ................................ 500 502
5.70%, Due 8/1/2013 .................................. 405 405
5.75%, Due 2/1/2018 .................................. 340 339
Washington Mutual Finance Corp.,
6.875%, Due 5/15/2011 ................................ 660 689
Washington Mutual, Inc.,
8.25%, Due 4/1/2010 + ................................ 500 475
4.625%, Due 4/1/2014 ................................. 1,050 829
Wells Fargo & Co.,
5.25%, Due 10/23/2012 ................................ 1,140 1,164
4.375%, Due 1/31/2013 ................................ 480 475
5.625%, Due 12/11/2017 ............................... 1,245 1,283
-------
21,773
-------
BASIC MATERIALS - 0.03%
Weyerhaeuser Co.,
5.95%, Due 11/1/2008 ................................. 340 344
-------
COMMUNICATIONS - 0.97%
Comcast Cable Communications Holdings, Inc.,
8.375%, Due 3/15/2013 ................................ 1,050 1,176
Comcast Corp.,
5.30%, Due 1/15/2014 ................................. 710 699
5.875%, Due 2/15/2018 ................................ 500 499
6.45%, Due 3/15/2037 ................................. 2,630 2,616
Time Warner Cable, Inc.,
5.85%, Due 5/1/2017 .................................. 1,180 1,171
Verizon Communications, Inc.,
6.40%, Due 2/15/2038 ................................. 350 356
6.90%, Due 4/15/2038 ................................. 708 767
See accompanying notes
27
AMERICAN BEACON BALANCED FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Viacom, Inc.,
6.875%, Due 4/30/2036 ........................ $ 2,880 $ 2,885
------------
10,169
------------
CONSUMER DISCRETIONARY - 0.34%
Wal-Mart Stores, Inc.,
4.55%, Due 5/1/2013 .......................... 790 800
7.55%, Due 2/15/2030 ......................... 500 578
6.50%, Due 8/15/2037 ......................... 1,340 1,422
6.20%, Due 4/15/2038 ......................... 781 795
------------
3,595
------------
CONSUMER STAPLES - 0.22%
Archer-Daniels-Midland Co.,
6.45%, Due 1/15/2038 ......................... 350 363
Diageo Capital plc,
5.75%, Due 10/23/2017 ........................ 440 449
Dr Pepper Snapple Group, Inc.,
6.82%, Due 5/1/2018 ++ ....................... 250 259
Kellogg Co.,
4.25%, Due 3/6/2013 .......................... 500 492
Kraft Foods, Inc.,
6.50%, Due 8/11/2017 ......................... 655 685
------------
2,248
------------
ELECTRONIC COMPONENTS - 0.18%
Tyco Electronics Group SA,
6.55%, Due 10/1/2017 ++ ...................... 1,292 1,323
7.125%, Due 10/1/2037 ++ ..................... 500 512
------------
1,835
------------
ENERGY - 0.85%
Apache Corp.,
5.25%, Due 4/15/2013 ......................... 1,055 1,083
Canadian Natural Resources Ltd.,
6.70%, Due 7/15/2011 ......................... 410 431
5.90%, Due 2/1/2018 .......................... 265 269
6.25%, Due 3/15/2038 ......................... 500 488
Consolidated Natural Gas Co.,
6.00%, Due 10/15/2010 ........................ 495 515
EOG Resources, Inc.,
4.75%, Due 3/15/2014 ++ ...................... 550 570
Marathon Oil Corp.,
6.00%, Due 10/1/2017 ......................... 545 555
6.60%, Due 10/1/2037 ......................... 240 243
Transocean, Inc.,
6.00%, Due 3/15/2018 ......................... 775 802
6.80%, Due 3/15/2038 ......................... 3,170 3,372
Weatherford International, Inc.,
5.95%, Due 6/15/2012 ......................... 510 530
------------
8,858
------------
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
FINANCE - 2.29%
American Express Co.,
8.15%, Due 3/19/2038 ......................... $ 325 $ 378
American General Finance Corp.,
4.875%, Due 5/15/2010 ........................ 500 496
4.00%, Due 3/15/2011 ......................... 1,245 1,180
American Honda Finance Corp.,
4.625%, Due 4/2/2013 ++ ...................... 650 639
Ameriprise Financial, Inc.,
5.35%, Due 11/15/2010 ........................ 975 986
Bear Stearns Cos., Inc.,
7.25%, Due 2/1/2018 .......................... 340 372
Capital One Financial Corp.,
5.70%, Due 9/15/2011 + ....................... 490 478
Countrywide Home Loans, Inc.,
4.00%, Due 3/22/2011 ......................... 140 128
Federal National Mortgage Association,
6.00%, Due 4/18/2036 + ....................... 5,065 5,366
General Electric Capital Corp.,
4.375%, Due 3/3/2012 ......................... 995 990
5.65%, Due 6/9/2014 + ........................ 1,050 1,092
5.625%, Due 5/1/2018 ......................... 500 505
5.875%, Due 1/14/2038 ........................ 350 334
Goldman Sachs Group, Inc.,
4.75%, Due 7/15/2013 ......................... 450 442
6.25%, Due 9/1/2017 .......................... 550 562
5.95%, Due 1/18/2018 ......................... 280 279
6.75%, Due 10/1/2037 ......................... 1,402 1,374
HSBC Finance Corp.,
5.25%, Due 1/14/2011 ......................... 2,150 2,161
International Lease Finance Corp.,
6.375%, Due 3/15/2009 ........................ 1,025 1,031
5.75%, Due 6/15/2011 ......................... 475 474
Lehman Brothers Holdings, Inc.,
4.25%, Due 1/27/2010 ......................... 550 541
5.625%, Due 1/24/2013 ........................ 340 335
6.20%, Due 9/26/2014 ......................... 150 151
6.875%, Due 7/17/2037 ........................ 2,695 2,498
Merrill Lynch & Co., Inc.,
5.45%, Due 2/5/2013 .......................... 340 331
6.875%, Due 4/25/2018 ........................ 330 333
6.11%, Due 1/29/2037 ......................... 500 422
------------
23,878
------------
HEALTH CARE - 0.05%
Covidien International Finance SA,
5.45%, Due 10/15/2012 ++ ..................... 360 363
See accompanying notes
28
AMERICAN BEACON BALANCED FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
6.00%, Due 10/15/2017 ++ ..................... $ 180 $ 184
------------
547
------------
INDUSTRIAL - 0.03%
Koninklijke Philips Electronics NV,
5.75%, Due 3/11/2018 ......................... 335 344
------------
INDUSTRIALS - 1.72%
Burlington Northern Santa Fe Corp.,
5.75%, Due 3/15/2018 ......................... 650 659
Canadian National Railway Co.,
5.55%, Due 5/15/2018 ......................... 500 507
Caterpillar Financial Services Corp.,
4.15%, Due 1/15/2010 ......................... 500 503
4.85%, Due 12/7/2012 ......................... 505 511
4.25%, Due 2/8/2013 .......................... 500 493
Con-way, Inc.,
8.875%, Due 5/1/2010 ......................... 1,850 1,978
Covidien International Finance SA,
6.55%, Due 10/15/2037 ++ ..................... 578 591
CRH America, Inc.,
6.00%, Due 9/30/2016 ......................... 985 926
Daimler Finance NA LLC,
7.75%, Due 1/18/2011 ......................... 1,000 1,069
5.875%, Due 3/15/2011 ........................ 450 461
5.75%, Due 9/8/2011 .......................... 550 564
Honeywell International, Inc.,
4.25%, Due 3/1/2013 .......................... 500 497
John Deere Capital Corp.,
4.125%, Due 1/15/2010 ........................ 1,250 1,256
5.40%, Due 10/17/2011 ........................ 655 677
Kraft Foods, Inc.,
7.00%, Due 8/11/2037 ......................... 1,990 2,095
Masco Corp.,
6.125%, Due 10/3/2016 ........................ 430 401
Nissan Motor Acceptance Corp.,
5.625%, Due 3/14/2011 ++ ..................... 500 501
Norfolk Southern Corp.,
5.75%, Due 4/1/2018 ++ ....................... 650 659
Starbucks Corp.,
6.25%, Due 8/15/2017 ......................... 400 397
Target Corp.,
6.50%, Due 10/15/2037 ........................ 445 448
Unilever Capital Corp.,
7.125%, Due 11/1/2010 ........................ 2,000 2,170
Union Pacific Corp.,
6.50%, Due 4/15/2012 ......................... 550 583
------------
17,946
------------
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
INSURANCE - 1.33%
Aegon Funding Corp.,
5.75%, Due 12/15/2020 ........................ $ 450 $ 421
American International Group, Inc.,
5.85%, Due 1/16/2018 ......................... 550 550
6.25%, Due 5/1/2036 .......................... 500 488
ASIF Global Financing,
3.90%, Due 10/22/2008 ++ ..................... 700 697
Hartford Financial Services Group, Inc.,
5.25%, Due 10/15/2011 ........................ 1,250 1,267
5.375%, Due 3/15/2017 ........................ 685 668
John Hancock Global Funding II,
7.90%, Due 7/2/2010 ++ ....................... 1,500 1,642
Liberty Mutual Insurance Co.,
7.875%, Due 10/15/2026 ++ .................... 1,500 1,675
Lincoln National Corp.,
4.75%, Due 2/15/2014 ......................... 275 266
MetLife, Inc.,
5.375%, Due 12/15/2012 ....................... 660 676
5.00%, Due 6/15/2015 ......................... 485 481
6.375%, Due 6/15/2034 ........................ 525 520
Metropolitan Life Global Funding I,
4.625%, Due 8/19/2010 ++ ..................... 1,200 1,219
Prudential Financial, Inc.,
4.50%, Due 7/15/2013 ......................... 550 537
5.10%, Due 9/20/2014 ......................... 690 681
UnitedHealth Group, Inc.,
6.625%, Due 11/15/2037 ....................... 1,821 1,717
Willis North America, Inc.,
6.20%, Due 3/28/2017 ......................... 360 351
------------
13,856
------------
PHARMACEUTICALS - 0.71%
Abbott Laboratories,
6.15%, Due 11/30/2037 ........................ 447 465
AstraZeneca plc,
5.40%, Due 9/15/2012 ......................... 980 1,015
6.45%, Due 9/15/2037 ......................... 1,880 2,031
Biogen Idec, Inc.,
6.875%, Due 3/1/2018 ......................... 900 888
Bristol-Myers Squibb Co.,
5.45%, Due 5/1/2018 .......................... 250 253
6.125%, Due 5/1/2038 ......................... 875 883
Hospira, Inc.,
6.05%, Due 3/30/2017 ......................... 360 353
Schering-Plough Corp.,
6.75%, Due 12/1/2033 ......................... 600 616
See accompanying notes
29
AMERICAN BEACON BALANCED FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Wyeth Corp.,
5.50%, Due 2/1/2014 .......................... $ 935 $ 960
------------
7,464
------------
REAL ESTATE - 0.35%
Equity Residential,
5.125%, Due 3/15/2016 ........................ 895 821
iStar Financial, Inc.,
5.85%, Due 3/15/2017 + ....................... 750 622
ProLogis Trust,
5.50%, Due 4/1/2012 .......................... 450 440
5.625%, Due 11/15/2016 ....................... 550 512
Simon Property Group LP,
5.375%, Due 6/1/2011 ......................... 550 550
5.75%, Due 12/1/2015 ......................... 710 694
------------
3,639
------------
TECHNOLOGY - 0.39%
Cisco Systems, Inc.,
5.25%, Due 2/22/2011 ......................... 550 568
Computer Sciences Corp.,
5.50%, Due 3/15/2013 + ++ .................... 140 141
6.50%, Due 3/15/2018 ++ ...................... 495 511
Hewlett-Packard Co.,
4.50%, Due 3/1/2013 .......................... 1,085 1,094
Oracle Corp.,
4.95%, Due 4/15/2013 ......................... 455 463
6.50%, Due 4/15/2038 ......................... 970 1,002
Xerox Corp.,
5.65%, Due 5/15/2013 ......................... 250 251
------------
4,030
------------
TELEPHONE - 0.68%
America Movil, S.A.B. de C.V.,
6.375%, Due 3/1/2035 ......................... 500 490
AT&T, Inc.,
5.10%, Due 9/15/2014 ......................... 1,335 1,339
5.625%, Due 6/15/2016 ........................ 550 558
5.50%, Due 2/1/2018 .......................... 425 425
6.80%, Due 5/15/2036 ......................... 250 263
Cingular Wireless Services, Inc.,
7.875%, Due 3/1/2011 ......................... 550 595
8.75%, Due 3/1/2031 .......................... 445 548
Deutsche Telekom AG,
8.00%, Due 6/15/2010 ......................... 380 407
Nextel Communications, Inc.,
6.875%, Due 10/31/2013 ....................... 615 507
Telecom Italia S.p.A.,
4.00%, Due 11/15/2008 ........................ 580 577
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Telefonica Emisiones SAU,
5.984%, Due 6/20/2011 ........................ $ 380 $ 388
Verizon Communications, Inc.,
5.50%, Due 4/1/2017 .......................... 500 502
Vodafone Group plc,
6.15%, Due 2/27/2037 + ....................... 500 492
------------
7,091
------------
UTILITIES - 0.95%
American Water Capital Corp.,
6.593%, Due 10/15/2037 ++ .................... 1,492 1,436
Columbus Southern Power Co.,
5.50%, Due 3/1/2013 .......................... 830 839
Dominion Resources, Inc.,
Series A, 5.60%, Due 11/15/2016 ................. 500 500
Duke Energy Carolinas LLC,
5.10%, Due 4/15/2018 ......................... 500 497
Duke Energy Indiana, Inc.,
6.05%, Due 6/15/2016 ......................... 520 528
FPL Group Capital, Inc.,
5.625%, Due 9/1/2011 ......................... 1,175 1,221
MidAmerican Energy Holdings Co.,
5.875%, Due 10/1/2012 ........................ 1,070 1,115
6.125%, Due 4/1/2036 ......................... 500 499
Public Service Enterprise Group, Inc.,
6.95%, Due 6/1/2012 .......................... 925 984
Southern Power Co.,
6.25%, Due 7/15/2012 ......................... 690 728
Virginia Electric and Power Co.,
5.40%, Due 4/30/2018 ......................... 500 495
Xcel Energy, Inc.,
5.613%, Due 4/1/2017 ......................... 1,089 1,078
------------
9,920
------------
TOTAL CORPORATE OBLIGATIONS ..................... 138,099
------------
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS - 2.04%
COMMERCIAL MORTGAGE-BACKED SECURITY - 1.12%
Banc of America Commercial Mortgage, Inc.,
2005-6 A1, 5.001%, Due 9/10/2047 ............. 681 683
2007-2 A2, 5.634%, Due 4/10/2049 ............. 1,100 1,096
Bear Stearns Commercial Mortgage
Securities, Inc.,
2006-T22 A2, 5.631%, Due 4/12/2038 ........... 905 910
2004-PWR5 A4, 4.831%, Due 7/11/2042 .......... 2,010 1,961
2005-T20 A2, 5.127%, Due 10/12/2042 .......... 875 878
Citigroup Commercial Mortgage Trust,
2004-C2 A3, 4.38%, Due 10/15/2041 ............ 995 974
See accompanying notes
30
AMERICAN BEACON BALANCED FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
General Electric Capital Commercial
Mortgage Corp.,
2003-C2 A2, 4.17%, Due 7/10/2037 ................ $ 224 $ 223
JP Morgan Chase Commercial Mortgage
Securities Corp.,
2004-CBX A4, 4.529%, Due 1/12/2037 .............. 555 546
2005-LDP3 A1, 4.655%, Due 8/15/2042 ............. 237 237
2005-LDP4 A1, 4.613%, Due 10/15/2042 ............ 64 64
2005-LDP1 A2, 4.625%, Due 3/15/2046 ............. 1,035 1,031
2007-CB19 A4, 5.937%, Due 2/12/2049 ............. 800 794
2007-CB20 A2, 5.629%, Due 2/12/2051 ............. 1,050 1,045
LB-UBS Commercial Mortgage Trust,
2004-C1 A4, 5.424%, Due 2/15/2040 ............... 750 728
Wachovia Bank Commercial Mortgage Trust,
2007-C32 A2, 5.923%, Due 6/15/2049 .............. 530 531
------------
11,701
------------
WHOLE LOAN COLLATERALIZED MORTGAGE
OBLIGATIONS - 0.92%
Banc of America Mortgage Securities, Inc.,
2004-8 3A1, 5.25%, Due 10/25/2019 ............ 1,023 1,025
Chase Mortgage Finance Corp.,
2006-A1 A1, 6.037%, Due 9/25/2036 # .......... 1,515 1,541
Citicorp Mortgage Securities, Inc.,
2006-3 2A1, 5.50%, Due 6/25/2021 ............. 1,370 1,382
Countrywide Home Loan Mortgage Pass Through
Trust, 2007-18 A1, 6.00%, Due 9/25/2037 ...... 1,544 1,500
Prime Mortgage Trust,
2005-2, 5.25%, Due 7/25/2020 ................. 1,814 1,830
Wells Fargo Mortgage Backed Securities Trust,
2006-11 A8, 6.00%, Due 9/25/2036 ............. 913 878
2007-7 A1, 6.00%, Due 6/25/2037 .............. 1,528 1,454
------------
9,610
------------
TOTAL NON-AGENCY MORTGAGE-BACKED OBLIGATIONS ....... 21,311
------------
ASSET-BACKED SECURITIES - 0.61%
American Express Credit Account Master Trust,
2006-2 A, 5.35%, Due 1/15/2014 ............... 2,150 2,192
Capital Auto Receivables Asset Trust,
2006-SN1A A4A, 5.32%, Due 3/20/2010 ++ ....... 1,500 1,513
Capital One Multi-Asset Execution Trust,
2006-A10 A10, 5.15%, Due 6/15/2014 ........... 1,600 1,615
Volkswagen Auto Loan Enhanced Trust,
2005-1 A4, 4.86%, Due 4/20/2012 .............. 1,000 1,008
------------
TOTAL ASSET-BACKED SECURITIES ...................... 6,328
------------
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
U.S. AGENCY MORTGAGE-BACKED
OBLIGATIONS - 8.44%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.41%
5.50%, Due 8/1/2017 ............................. $ 67 $ 68
5.50%, Due 9/1/2017 ............................. 290 297
5.50%, Due 6/1/2018 ............................. 137 140
5.50%, Due 10/1/2018 ............................ 1,164 1,191
4.50%, Due 3/1/2019 ............................. 860 854
5.00%, Due 10/1/2020 ............................ 1,195 1,204
5.50%, Due 5/1/2021 ............................. 703 717
5.00%, Due 7/1/2021 ............................. 1,666 1,680
5.50%, Due 9/1/2021 ............................. 330 336
5.00%, Due 11/1/2021 ............................ 612 616
5.50%, Due 4/1/2022 ............................. 370 377
5.00%, Due 5/1/2022 ............................. 578 582
6.50%, Due 5/1/2029 ............................. 61 64
6.50%, Due 6/1/2029 ............................. 11 11
6.50%, Due 7/1/2029 ............................. 186 194
6.00%, Due 8/1/2029 ............................. 103 106
5.00%, Due 8/1/2033 ............................. 1,642 1,619
5.50%, Due 2/1/2034 ............................. 1,610 1,624
5.00%, Due 3/1/2034 ............................. 1,288 1,270
6.00%, Due 6/1/2034 ............................. 962 990
6.00%, Due 8/1/2034 ............................. 869 892
5.00%, Due 8/1/2035 ............................. 1,158 1,140
5.00%, Due 9/1/2035 ............................. 1,496 1,473
5.00%, Due 9/1/2035 ............................. 1,648 1,623
5.50%, Due 11/1/2036 ............................ 1,593 1,605
5.897%, Due 12/1/2036 # ......................... 1,953 1,995
5.839%, Due 1/1/2037 # .......................... 2,379 2,435
5.796%, Due 3/1/2037 # .......................... 1,440 1,468
5.256%, Due 4/1/2037 # .......................... 1,690 1,721
5.50%, Due 4/1/2037 ............................. 1,783 1,797
5.50%, Due 5/1/2037 ............................. 3,912 3,942
6.00%, Due 7/1/2037 ............................. 3,937 4,031
6.50%, Due 8/1/2037 ............................. 536 556
6.00%, Due 9/1/2037 ............................. 591 605
6.00%, Due 12/1/2037 ............................ 2,401 2,458
5.00%, Due 3/1/2038 ............................. 4,399 4,327
------------
46,008
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.48%
5.50%, Due 2/1/2014 ............................. 415 426
6.00%, Due 4/1/2016 ............................. 330 340
5.00%, Due 12/1/2017 ............................ 863 873
5.00%, Due 6/1/2018 ............................. 1,835 1,854
4.50%, Due 9/1/2018 ............................. 1,400 1,392
5.50%, Due 12/1/2018 ............................ 86 88
4.00%, Due 8/1/2020 ............................. 1,046 1,007
See accompanying notes
31
AMERICAN BEACON BALANCED FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
5.50%, Due 4/1/2021 ............................. $ 1,113 $ 1,137
6.00%, Due 1/1/2029 ............................. 543 560
5.50%, Due 11/1/2033 ............................ 2,166 2,186
5.00%, Due 3/1/2034 ............................. 1,694 1,669
4.50%, Due 9/1/2034 ............................. 753 719
6.50%, Due 3/1/2035 ............................. 288 298
5.50%, Due 12/1/2035 ............................ 1,348 1,358
5.50%, Due 12/1/2035 ............................ 417 420
5.50%, Due 1/1/2036 ............................. 1,424 1,434
5.50%, Due 2/1/2036 ............................. 978 985
5.00%, Due 2/1/2036 ............................. 836 822
5.00%, Due 3/1/2036 ............................. 1,522 1,497
5.50%, Due 3/1/2036 ............................. 349 352
5.50%, Due 4/1/2036 ............................. 2,410 2,428
6.00%, Due 8/1/2036 ............................. 604 618
6.00%, Due 9/1/2036 ............................. 1,104 1,130
6.00%, Due 9/1/2036 ............................. 205 210
6.00%, Due 10/1/2036 ............................ 1,296 1,327
5.50%, Due 12/1/2036 ............................ 1,837 1,850
6.50%, Due 12/1/2036 ............................ 2,012 2,085
5.50%, Due 2/1/2037 ............................. 1,767 1,779
6.50%, Due 8/1/2037 ............................. 860 891
6.00%, Due 9/1/2037 ............................. 2,266 2,318
6.50%, Due 9/1/2037 ............................. 542 561
6.00%, Due 11/1/2037 ............................ 722 739
6.50%, Due 11/1/2037 ............................ 952 987
------------
36,340
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.55%
7.00%, Due 12/15/2025 ........................... 323 347
4.201%, Due 8/16/2026 ........................... 817 814
6.50%, Due 8/15/2027 ............................ 377 394
6.50%, Due 11/15/2027 ........................... 378 395
7.50%, Due 12/15/2028 ........................... 283 305
5.50%, Due 7/15/2033 ............................ 1,005 1,020
6.00%, Due 12/15/2033 ........................... 1,061 1,094
5.50%, Due 2/20/2034 ............................ 1,350 1,369
------------
5,738
------------
TOTAL U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS ...... 88,086
------------
U.S. AGENCY OBLIGATIONS - 9.51%
FEDERAL HOME LOAN BANK - 0.86%
5.00%, Due 10/16/2009 + ......................... 2,280 2,302
5.25%, Due 11/3/2009 ............................ 1,360 1,378
4.50%, Due 9/16/2013 ............................ 5,100 5,294
------------
8,974
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 6.62%
Zero Coupon, Due 12/15/2008 ..................... 20,325 20,060
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
5.25%, Due 2/24/2011 + .......................... $ 2,860 $ 2,923
5.125%, Due 4/18/2011 + ......................... 3,700 3,911
4.50%, Due 1/15/2015 + .......................... 34,290 35,345
5.40%, Due 3/17/2021 ............................ 2,740 2,888
6.00%, Due 12/15/2031 ........................... 2,195 2,261
6.25%, Due 7/15/2032 + .......................... 1,500 1,778
------------
69,166
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.03%
7.25%, Due 1/15/2010 ............................ 3,000 3,218
5.125%, Due 1/2/2014 ............................ 820 838
5.375%, Due 6/12/2017 + ......................... 2,650 2,864
6.25%, Due 5/15/2029 + .......................... 12,200 14,223
------------
21,143
------------
TOTAL U.S. AGENCY OBLIGATIONS ...................... 99,283
------------
U.S. TREASURY OBLIGATIONS - 3.30%
4.50%, Due 3/31/2012 + .......................... 1,760 1,868
2.75%, Due 2/28/2013 + .......................... 3,700 3,652
4.75%, Due 5/15/2014 + .......................... 9,810 10,665
4.125%, Due 5/15/2015 + ......................... 2,125 2,222
3.50%, Due 2/15/2018 + .......................... 4,445 4,350
9.125%, Due 5/15/2018 + ......................... 1,250 1,791
7.875%, Due 2/15/2021 + ......................... 1,200 1,623
6.25%, Due 8/15/2023 + .......................... 1,400 1,685
6.875%, Due 8/15/2025 + ......................... 1,580 2,034
5.25%, Due 11/15/2028 + ......................... 1,250 1,371
5.00%, Due 5/15/2037 + .......................... 2,900 3,143
------------
TOTAL U.S. TREASURY OBLIGATIONS .................... 34,404
------------
SHARES
----------
SHORT TERM INVESTMENTS - 5.84%
American Beacon Money Market Select
Fund Section ................................. 34,245,287 34,245
PAR
AMOUNT
----------
U.S. Treasury Bill,
3.26%, Due 5/15/2008 + @ ........................ $ 24,000 23,991
1.23%, Due 6/12/2008 @ .......................... 2,780 2,776
------------
TOTAL SHORT TERM INVESTMENTS ....................... 61,012
------------
SHARES
-----------
SECURITIES LENDING
COLLATERAL - 18.68%
American Beacon Cash Plus Trust Section ........ 157,087,445 157,088
See accompanying notes
32
AMERICAN BEACON BALANCED FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
American Beacon Money Market Select Fund Section $38,016,115 $ 38,016
------------
TOTAL SECURITIES LENDING COLLATERAL 195,104
------------
TOTAL INVESTMENTS 118.36% - (COST $1,171,336) 1,235,889
LIABILITIES, NET OF OTHER ASSETS - (18.36%) (191,691)
------------
TOTAL NET ASSETS - 100.00% $ 1,044,198
============
Percentages are stated as a percent of net assets.
## Non-income producing security.
+ All or a portion of this security is on loan at April 30, 2008.
++ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $15,624 or 1.50% of net
assets. The Fund has no right to demand registration of these
securities.
# The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the final maturity date.
Section The Fund/Trust is affiliated by having the same investment advisor.
@ At April 30, 2008, security pledged as collateral for open futures
contracts.
FUTURES CONTRACTS
(DOLLARS IN THOUSANDS)
UNREALIZED
NUMBER OF EXPIRATION MARKET APPRECIATION/
CONTRACTS DATE VALUE (DEPRECIATION)
--------- ---------- ------- --------------
Emini S&P 500 Index .. 518 Jun 2008 $35,897 $1,260
======= ======
See accompanying notes
33
AMERICAN BEACON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
COMMON STOCKS - 96.38%
CONSUMER DISCRETIONARY - 11.55%
AUTO COMPONENTS - 0.90%
Johnson Controls, Inc. + ........................ 21,609 $ 762
------------
EDUCATION & TRAINING SERVICES - 0.03%
DeVry, Inc. + ................................... 500 28
------------
HOTELS, RESTAURANTS & LEISURE - 2.76%
McDonald's Corp. ................................ 25,559 1,523
Yum! Brands, Inc. + ............................. 19,891 809
------------
2,332
------------
INTERNET & CATALOG RETAIL - 0.49%
Amazon.com, Inc. ## + ........................... 3,500 275
eBay, Inc. ## ................................... 4,400 138
------------
413
------------
MEDIA - 2.89%
CBS Corp. + ..................................... 30,445 702
Liberty Media Holding Corp. ## .................. 1,200 18
Omnicom Group, Inc. + ........................... 16,708 798
Time Warner, Inc. + ............................. 62,000 921
------------
2,439
------------
MULTILINE RETAIL - 1.19%
BJ's Wholesale Club, Inc. ## + .................. 8,800 335
Costco Wholesale Corp. .......................... 8,800 627
Wal-Mart Stores, Inc. + ......................... 700 41
------------
1,003
------------
SPECIALTY RETAIL - 3.29%
Aeropostale, Inc. ## + .......................... 3,800 121
AutoNation, Inc. ## + ........................... 801 13
Best Buy Company, Inc. + ........................ 25,653 1,103
GameStop Corp. ## + ............................. 7,800 429
Nike, Inc. + .................................... 12,540 838
TJX Cos., Inc. .................................. 8,400 271
------------
2,775
------------
TOTAL CONSUMER DISCRETIONARY ....................... 9,752
------------
CONSUMER STAPLES - 8.60%
BEVERAGES - 1.47%
Coca-Cola Co. ................................... 11,692 688
Hansen Natural Corp. ## + ....................... 500 18
PepsiCo, Inc. ................................... 7,800 535
------------
1,241
------------
FOOD & DRUG RETAILING - 1.79%
CVS Caremark Corp. .............................. 2,500 101
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
The Kroger Co. + ................................ 40,837 $ 1,113
Ruddick Corp. + ................................. 4,000 155
Safeway, Inc. + ................................. 3,700 117
SUPERVALU, Inc. ................................. 700 23
------------
1,509
------------
FOOD PRODUCTS - 1.74%
Bunge Ltd. ## + ................................. 1,100 126
H.J. Heinz Co. + ................................ 15,763 741
Herbalife Ltd. + ................................ 6,600 289
Hormel Foods Corp. .............................. 600 24
Kellogg Co. ..................................... 100 5
Tyson Foods, Inc. ............................... 15,800 281
------------
1,466
------------
HOUSEHOLD PRODUCTS - 0.85%
Church & Dwight Co., Inc. + ..................... 500 28
Colgate-Palmolive Co. ........................... 9,136 646
The Procter & Gamble Co. ........................ 700 47
------------
721
------------
PERSONAL PRODUCTS - 0.93%
Alberto-Culver Co. .............................. 1,700 43
Avon Products, Inc. ............................. 19,082 744
------------
787
------------
TOBACCO - 1.82%
Altria Group, Inc. .............................. 14,600 292
Loews Corp. ..................................... 1,100 72
Philip Morris International, Inc. ## ............ 11,700 597
Universal Corp. + ............................... 1,700 109
UST, Inc. + ..................................... 8,900 464
------------
1,534
------------
TOTAL CONSUMER STAPLES ............................. 7,258
------------
ENERGY - 11.03%
ENERGY EQUIPMENT & SERVICES - 7.24%
Cameron International Corp. ## + ................ 16,934 834
Diamond Offshore Drilling, Inc. ................. 100 12
Dresser-Rand Group, Inc. ## ..................... 5,000 183
FMC Technologies, Inc. ## + ..................... 2,500 168
Global Industries Ltd. ## ....................... 23,400 373
Halliburton Co. + ............................... 34,458 1,582
National Oilwell Varco, Inc. ## + ............... 14,098 965
Oceaneering International, Inc. ## .............. 900 60
Patterson-UTI Energy, Inc. + .................... 100 3
Schlumberger Ltd. ............................... 8,760 881
SEACOR Holdings, Inc. ## + ...................... 900 77
Smith International, Inc. + ..................... 12,750 975
------------
6,113
------------
See accompanying notes
34
AMERICAN BEACON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
OIL & GAS - 3.79%
Anadarko Petroleum Corp. + ...................... 9,400 $ 626
Cabot Oil & Gas Corp. ........................... 1,800 102
Denbury Resources, Inc. ## ...................... 1,900 58
Exterran Holdings, Inc. ## + .................... 1,600 107
Exxon Mobil Corp. ............................... 7,400 689
Murphy Oil Corp. + .............................. 10,099 912
Noble Energy, Inc. .............................. 100 9
Occidental Petroleum Corp. ...................... 500 42
Pioneer Natural Resources Co. + ................. 700 40
Ultra Petroleum Corp. ## ........................ 1,200 100
Valero Energy Corp. ............................. 8,500 415
W&T Offshore, Inc. + ............................ 2,500 102
------------
3,202
------------
TOTAL ENERGY ....................................... 9,315
------------
FINANCIALS - 5.19%
BANKS - 0.39%
Bank of America Corp. ........................... 6,100 229
Bank of New York Mellon Corp. ................... 1,800 79
Hudson City Bancorp, Inc. ....................... 900 17
------------
325
------------
DIVERSIFIED FINANCIALS - 1.49%
Alliance Data Systems Corp. ## .................. 200 12
Blackrock, Inc. + ............................... 800 161
Capital One Financial Corp. + ................... 800 42
Eaton Vance Corp. + ............................. 4,100 150
Federated Investors, Inc. ....................... 1,000 33
Mastercard, Inc. + .............................. 700 195
State Street Corp. + ............................ 8,825 637
The Western Union Co. ........................... 1,000 23
------------
1,253
------------
INSURANCE - 1.71%
American International Group, Inc. .............. 12,896 596
Arch Capital Group Ltd. ## ...................... 100 7
Axis Capital Holdings Ltd. ...................... 2,000 68
Berkshire Hathaway, Inc. ## ..................... 1 134
Prudential Financial, Inc. ...................... 8,485 642
------------
1,447
------------
REAL ESTATE - 1.60%
AvalonBay Communities, Inc. + ................... 300 30
Equity Residential .............................. 300 12
Federal Realty Investment Trust + ............... 900 74
Jones Lang LaSalle, Inc. ........................ 700 54
Macerich Co. .................................... 500 37
ProLogis ........................................ 16,600 1,039
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Ventas, Inc. .................................... 2,200 $ 107
------------
1,353
------------
TOTAL FINANCIALS ................................... 4,378
------------
HEALTH CARE - 14.73%
BIOTECHNOLOGY - 2.56%
Biogen Idec, Inc. ## + .......................... 15,000 910
Genentech, Inc. ## .............................. 200 14
Gilead Sciences, Inc. ## + ...................... 20,297 1,050
Idexx Laboratories, Inc. ## + ................... 200 11
Invitrogen Corp. ## + ........................... 1,900 178
------------
2,163
------------
HEALTH CARE EQUIPMENT & SUPPLIES - 2.41%
Baxter International, Inc. ...................... 11,000 685
Beckman Coulter, Inc. ........................... 1,200 82
Becton, Dickinson & Co. ......................... 8,017 717
Boston Scientific Corp. ## ...................... 4,700 63
Covidien Ltd. ................................... 1,700 79
Intuitive Surgical, Inc. ## + ................... 200 58
Kinetic Concepts, Inc. ## + ..................... 4,000 159
Medtronic, Inc. + ............................... 3,300 161
STERIS Corp. .................................... 200 5
Varian Medical Systems, Inc. ## + ............... 500 23
------------
2,032
------------
HEALTH CARE PROVIDERS & SERVICES - 2.52%
AmerisourceBergen Corp. ......................... 9,100 369
Express Scripts, Inc. ## ........................ 15,571 1,090
Laboratory Corp. of America Holdings ## + ....... 8,870 671
------------
2,130
------------
PHARMACEUTICALS - 7.24%
Abbott Laboratories ............................. 15,018 792
Amgen, Inc. ## .................................. 8,200 344
Eli Lilly & Co. + ............................... 21,137 1,018
Johnson & Johnson ............................... 10,584 710
Medco Health Solutions, Inc. ## + ............... 21,400 1,060
Merck & Co., Inc. ............................... 15,700 597
Pfizer, Inc. .................................... 41,800 841
Watson Pharmaceuticals, Inc. ## + ............... 1,100 34
Wyeth Corp. ..................................... 16,037 713
------------
6,109
------------
TOTAL HEALTH CARE .................................. 12,434
------------
INDUSTRIALS - 16.37%
AEROSPACE & DEFENSE - 6.38%
Boeing Co. ...................................... 12,955 1,099
General Dynamics Corp. .......................... 9,214 833
See accompanying notes
35
AMERICAN BEACON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Goodrich Corp. .................................. 11,208 $ 764
Lockheed Martin Corp. ........................... 9,823 1,042
Northrop Grumman Corp. .......................... 11,900 875
Raytheon Co. + .................................. 900 58
United Technologies Corp. ....................... 9,881 716
------------
5,387
------------
COMMERCIAL SERVICES & SUPPLIES - 0.88%
Apollo Group, Inc. ## ........................... 10,600 540
Global Payments, Inc. ## + ...................... 1,000 44
Herman Miller, Inc. + ........................... 600 14
Hewitt Associates, Inc. ## ...................... 1,200 49
Manpower, Inc. + ................................ 1,400 94
------------
741
------------
CONSTRUCTION & ENGINEERING - 0.78%
Fluor Corp. + ................................... 400 61
KBR, Inc. + ..................................... 5,300 153
McDermott International, Inc. ## ................ 8,400 450
------------
664
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.29%
Emerson Electric Co. ............................ 14,426 754
Energizer Holdings, Inc. ## ..................... 1,400 111
PerkinElmer, Inc. ............................... 100 3
Rockwell Automation, Inc. + ..................... 4,100 222
------------
1,090
------------
INDUSTRIAL CONGLOMERATES - 2.31%
3M Co. .......................................... 10,968 844
Honeywell International, Inc. ................... 16,696 992
Tyco International Ltd. ......................... 2,400 112
------------
1,948
------------
MACHINERY - 3.88%
AGCO Corp. ## + ................................. 10,600 637
Caterpillar, Inc. ............................... 2,500 205
Flowserve Corp. ................................. 600 74
Illinois Tool Works, Inc. + ..................... 14,480 757
Ingersoll-Rand Co. Ltd. + ....................... 10,100 448
Joy Global, Inc. ................................ 1,700 126
Reliance Steel & Aluminum Co. + ................. 300 18
SPX Corp. ....................................... 200 25
Terex Corp. ## + ................................ 14,186 989
------------
3,279
------------
ROAD & RAIL - 0.83%
JB Hunt Transport Services, Inc. + .............. 14,400 489
Landstar System, Inc. ........................... 2,000 104
Werner Enterprises, Inc. + ...................... 5,400 105
------------
698
------------
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
TRADING COMPANIES & DISTRIBUTORS - 0.02%
W.W. Grainger, Inc. + ........................... 200 $ 17
------------
TOTAL INDUSTRIALS .................................. 13,824
------------
INFORMATION TECHNOLOGY - 21.85%
COMMUNICATIONS EQUIPMENT - 3.37%
Adtran, Inc. .................................... 200 5
Cisco Systems, Inc. ## .......................... 41,457 1,063
Harris Corp. + .................................. 13,505 730
Juniper Networks, Inc. ## + ..................... 36,300 1,002
Qualcomm, Inc. ## ............................... 1,000 43
------------
2,843
------------
COMPUTERS & PERIPHERALS - 7.01%
Apple Computer, Inc. ## ......................... 5,000 870
Dell, Inc. ## ................................... 47,118 878
EMC Corp. ## .................................... 13,300 205
Hewlett-Packard Co. ............................. 25,079 1,162
International Business Machines Corp. ........... 7,354 888
NVIDIA Corp. ## + ............................... 35,462 729
Seagate Technology + ............................ 49,495 934
Teradata Corp. ## ............................... 2,700 57
Western Digital Corp. ## + ...................... 6,700 194
------------
5,917
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.29%
Agilent Technologies, Inc. ## + ................. 3,800 115
Avnet, Inc. ## + ................................ 1,100 29
Intel Corp. ..................................... 1,100 24
Tyco Electronics Ltd. ........................... 2,000 75
------------
243
------------
INTERNET SOFTWARE & SERVICES - 0.73%
Google, Inc. ## ................................. 500 287
VeriSign, Inc. ## + ............................. 3,900 141
Yahoo! Inc. ## + ................................ 6,800 186
------------
614
------------
IT CONSULTING & SERVICES - 1.39%
Accenture Ltd. + ................................ 29,124 1,094
Electronic Data Systems Corp. + ................. 500 9
MPS Group, Inc. ## .............................. 1,100 12
Tech Data Corp. ## .............................. 1,900 64
------------
1,179
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 3.80%
Analog Devices, Inc. ............................ 12,900 415
Lam Research Corp. ## + ......................... 17,687 722
MEMC Electronic Materials, Inc. ## .............. 13,400 844
National Semiconductor Corp. + .................. 2,300 47
QLogic Corp. ## ................................. 5,800 93
See accompanying notes
36
AMERICAN BEACON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Texas Instruments, Inc. + ....................... 37,400 $ 1,091
------------
3,212
------------
SOFTWARE - 5.26%
Activision, Inc. ## ............................. 6,200 168
Advent Software, Inc. ## + ...................... 4,000 159
Amdocs Ltd. ## .................................. 1,000 31
CA, Inc. + ...................................... 3,600 80
DST Systems, Inc. ## + .......................... 200 12
Microsoft Corp. ................................. 90,581 2,583
Oracle Corp. ## ................................. 34,126 712
Salesforce.com, Inc. ## + ....................... 900 60
Symantec Corp. ## ............................... 24,800 427
Synopsys, Inc. ## ............................... 9,100 210
------------
4,442
------------
TOTAL INFORMATION TECHNOLOGY ....................... 18,450
------------
MATERIALS - 4.99%
CHEMICALS - 2.25%
Celanese Corp. + ................................ 3,200 143
CF Industries Holdings, Inc. + .................. 2,000 267
FMC Corp. + ..................................... 500 31
Lubrizol Corp. .................................. 400 23
Minerals Technologies, Inc. + ................... 1,200 81
Monsanto Co. .................................... 1,100 126
The Mosaic Co. ## ............................... 2,600 319
Praxair, Inc. + ................................. 8,291 757
Scotts Miracle-Gro Co. + ........................ 200 7
Terra Industries, Inc. ## + ..................... 3,800 144
------------
1,898
------------
CONTAINERS & PACKAGING - 0.13%
Owens-Illinois, Inc. ## ......................... 2,000 111
------------
METALS & MINING - 2.61%
Freeport-McMoRan Copper & Gold, Inc. + .......... 7,702 876
Nucor Corp. ..................................... 12,928 976
Southern Copper Corp. + ......................... 2,700 310
Worthington Industries, Inc. + .................. 2,500 45
------------
2,207
------------
TOTAL MATERIALS .................................... 4,216
------------
TELECOMMUNICATION SERVICES - 1.13%
DIVERSIFIED TELECOMMUNICATION - 1.13%
AT&T, Inc. ...................................... 23,608 914
Embarq Corp. + .................................. 900 37
------------
TOTAL TELECOMMUNICATION SERVICES ................... 951
------------
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
UTILITIES - 0.94%
ELECTRIC UTILITIES - 0.94%
Reliant Energy, Inc. ## ......................... 30,925 $ 796
------------
TOTAL COMMON STOCKS ................................ 81,374
------------
SHORT TERM INVESTMENTS - 3.59%
American Beacon Money Market Select
Fund ++ ...................................... 2,795,999 2,796
PAR
AMOUNT
----------
United States Treasury Bill,
1.32%, Due 6/12/2008 # ....................... $ 239 238
------------
TOTAL SHORT TERM INVESTMENTS ....................... 3,034
------------
SHARES
----------
SECURITIES LENDING
COLLATERAL - 24.42%
American Beacon Cash Plus Trust ++ .............. 16,597,157 16,597
American Beacon Money Market Select Fund ++ ..... 4,016,613 4,017
------------
TOTAL SECURITIES LENDING COLLATERAL ................ 20,614
------------
TOTAL INVESTMENTS 124.39% - (COST $100,817) ........ 105,022
LIABILITIES, NET OF OTHER ASSETS - (24.39%) ........ (20,595)
------------
TOTAL NET ASSETS - 100.00% ......................... $ 84,427
============
See accompanying notes
37
AMERICAN BEACON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
Percentages are stated as a percent of net assets.
## Non-income producing security.
+ All or a portion of this security is on loan at April 30, 2008.
++ The Fund/Trust is affiliated by having the same investment advisor.
# At April 30, 2008, security pledged as collateral for open futures
contracts.
FUTURES CONTRACTS
(DOLLARS IN THOUSANDS)
UNREALIZED
NUMBER OF EXPIRATION MARKET APPRECIATION/
CONTRACTS DATE VALUE (DEPRECIATION)
--------- ---------- ------ --------------
Emini S&P 500 Index .. 41 Jun 2008 $2,841 $57
====== ===
See accompanying notes
38
AMERICAN BEACON MID-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
COMMON STOCKS - 91.71%
CONSUMER DISCRETIONARY - 21.16%
AUTO COMPONENTS - 3.97%
Advance Auto Parts, Inc. + ..................... 26,800 $ 930
Lear Corp. ## + ................................ 59,200 1,691
Magna International, Inc. ...................... 14,550 1,086
------------
3,707
------------
HOTELS, RESTAURANTS & LEISURE - 1.48%
Royal Caribbean Cruises Ltd. + ................. 43,400 1,385
------------
HOUSEHOLD DURABLES - 4.88%
Black & Decker Corp. + ......................... 23,950 1,572
Stanley Works + ................................ 30,900 1,491
Whirlpool Corp. + .............................. 20,625 1,501
------------
4,564
------------
MEDIA - 0.14%
Idearc, Inc. + ................................. 40,100 132
------------
MULTILINE RETAIL - 1.05%
J.C. Penney Company, Inc. ...................... 11,800 501
Kohl's Corp. ## + .............................. 9,775 478
------------
979
------------
SPECIALTY RETAIL - 9.11%
Family Dollar Stores, Inc. + ................... 69,400 1,485
Hanesbrands, Inc. ## + ......................... 40,700 1,425
Office Depot, Inc. ## + ........................ 32,600 413
Regis Corp. + .................................. 53,000 1,548
Rent-A-Center, Inc. ## + ....................... 95,375 2,054
Sherwin-Williams Co. + ......................... 17,100 946
TJX Cos., Inc. + ............................... 19,875 640
------------
8,511
------------
TEXTILES & APPAREL - 0.53%
Sealy Corp. + .................................. 80,525 491
------------
TOTAL CONSUMER DISCRETIONARY ...................... 19,769
------------
CONSUMER STAPLES - 5.46%
FOOD PRODUCTS - 1.70%
Del Monte Foods Co. + .......................... 176,100 1,588
------------
TOBACCO - 3.76%
Loews Corp. + .................................. 21,000 1,379
Reynolds American, Inc. + ...................... 28,000 1,508
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
UST, Inc. + .................................... 12,100 $ 630
------------
3,517
------------
TOTAL CONSUMER STAPLES ............................ 5,105
------------
ENERGY - 4.06%
OIL & GAS - 4.06%
El Paso Corp. + ................................ 95,000 1,629
Murphy Oil Corp. + ............................. 24,000 2,168
------------
TOTAL ENERGY ...................................... 3,797
------------
FINANCIALS - 23.64%
BANKS - 5.39%
Comerica, Inc. + ............................... 34,425 1,196
New York Community Bancorp, Inc. + ............. 30,000 560
People's United Financial, Inc. + .............. 92,254 1,565
Popular, Inc. + ................................ 41,750 521
UnionBanCal Corp. + ............................ 22,725 1,193
------------
5,035
------------
DIVERSIFIED FINANCIALS - 3.53%
CIT Group, Inc. + .............................. 26,700 291
Countrywide Financial Corp. + .................. 63,600 367
Federal Home Loan Mortgage Corp. ............... 64,850 1,615
SLM Corp. ## + ................................. 55,300 1,025
------------
3,298
\ ------------
INSURANCE - 11.70%
Axis Capital Holdings Ltd. + ................... 28,700 973
Conseco, Inc. ## + ............................. 57,300 667
Delphi Financial Group, Inc. + ................. 18,800 512
First American Corp. ........................... 16,975 557
IPC Holdings Ltd. + ............................ 34,000 990
Old Republic International Corp. + ............. 80,387 1,154
Protective Life Corp. + ........................ 39,450 1,681
RenaissanceRe Holdings Ltd. + .................. 23,325 1,200
Torchmark Corp. ................................ 22,375 1,449
Willis Group Holdings Ltd. ..................... 32,200 1,119
XL Capital Ltd. + .............................. 18,125 632
------------
10,934
------------
REAL ESTATE - 3.02%
Annaly Capital Management, Inc. ................ 90,000 1,509
First Industrial Realty Trust, Inc. + .......... 43,400 1,311
------------
2,820
------------
TOTAL FINANCIALS .................................. 22,087
------------
See accompanying notes
39
AMERICAN BEACON MID-CAP VALUE FUND .
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
HEALTH CARE - 8.19%
HEALTH CARE EQUIPMENT & SUPPLIES - 2.39%
Hill-Rom Holdings, Inc. + ...................... 27,375 $ 688
IMS Health, Inc. + ............................. 62,400 1,544
------------
2,232
------------
HEALTH CARE PROVIDERS & SERVICES - 5.80%
AmerisourceBergen Corp. ........................ 35,875 1,455
Cigna Corp. + .................................. 15,900 679
Coventry Health Care, Inc. ## + ................ 23,100 1,033
Omnicare, Inc. + ............................... 59,200 1,205
Quest Diagnostics, Inc. + ...................... 21,000 1,054
------------
5,426
------------
TOTAL HEALTH CARE ................................. 7,658
------------
INDUSTRIALS - 13.44%
AEROSPACE & DEFENSE - 4.62%
Goodrich Corp. + ............................... 21,500 1,465
L-3 Communications Holdings, Inc. .............. 25,625 2,856
------------
4,321
------------
COMMERCIAL SERVICES & SUPPLIES - 4.52%
Avery Dennison Corp. ........................... 31,700 1,528
Con-way, Inc. + ................................ 13,000 601
Kelly Services, Inc. + ......................... 46,200 1,028
Pitney Bowes, Inc. + ........................... 18,200 657
United Stationers, Inc. ## + ................... 9,275 409
------------
4,223
------------
FREIGHT TRANSPORTATION - 1.98%
Ryder System, Inc. ............................. 27,000 1,849
------------
MACHINERY - 2.32%
Brady Corp. + .................................. 18,850 640
Briggs & Stratton Corp. + ...................... 27,900 424
ITT Industries, Inc. ........................... 17,200 1,101
------------
2,165
------------
TOTAL INDUSTRIALS ................................. 12,558
------------
INFORMATION TECHNOLOGY - 7.79%
COMMUNICATIONS EQUIPMENT - 2.65%
Alcatel-Lucent, ADR + .......................... 370,748 2,473
------------
IT CONSULTING & SERVICES - 3.77%
Affiliated Computer Services, Inc. ## + ........ 29,600 1,568
Computer Sciences Corp. ## + ................... 29,800 1,299
Tech Data Corp. ## ............................. 19,575 658
------------
3,525
------------
SHARES VALUE
----------- ------------
(DOLLARS IN THOUSANDS)
SOFTWARE - 1.37%
CA, Inc. + ..................................... 57,750 $ 1,278
TOTAL INFORMATION TECHNOLOGY ...................... 7,276
UTILITIES - 7.97%
ELECTRIC UTILITIES - 5.23%
CenterPoint Energy, Inc. + ..................... 66,600 1,013
Pinnacle West Capital Corp. + .................. 29,200 991
Wisconsin Energy Corp. + ....................... 31,325 1,487
Xcel Energy, Inc. + ............................ 67,100 1,396
------------
4,887
------------
GAS UTILITIES - 2.74%
MDU Resources Group, Inc. ...................... 57,850 1,670
Sempra Energy + ................................ 15,725 891
------------
2,561
------------
TOTAL UTILITIES ................................... 7,448
------------
TOTAL COMMON STOCKS ............................... 85,698
------------
SHORT TERM INVESTMENTS - 8.46%
American Beacon Money Market Select
Fund ++ ........................................ 7,458,407 7,459
------------
PAR
AMOUNT
-----------
U.S. Treasury Bill,
1.30%, Due 6/12/2008 # ...................... $ 447 446
------------
TOTAL SHORT TERM INVESTMENTS ...................... 7,905
------------
SHARES
-----------
SECURITIES LENDING
COLLATERAL - 14.49%
American Beacon Cash Plus Trust ++ ............. 10,898,571 10,899
American Beacon Money Market Select
Fund ++ ..................................... 2,637,520 2,637
------------
TOTAL SECURITIES LENDING COLLATERAL ............... 13,536
------------
TOTAL INVESTMENTS 114.66% - (COST $118,140) ....... 107,139
LIABILITIES, NET OF OTHER ASSETS - (14.66%) ....... (13,699)
------------
TOTAL NET ASSETS - 100.00% ........................ $ 93,440
============
See accompanying notes
40
AMERICAN BEACON MID-CAP VALUE FUND .
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
Percentages are stated as a percent of net assets.
## Non-income producing security.
+ All or a portion of this security is on loan at April 30, 2008.
++ The Fund/Trust is affiliated by having the same investment advisor.
# At April 30, 2008, security pledged as collateral for open futures
contracts.
FUTURES CONTRACTS
(DOLLARS IN THOUSANDS)
UNREALIZED
NUMBER OF EXPIRATION MARKET APPRECIATION/
CONTRACTS DATE VALUE (DEPRECIATION)
--------- ---------- ------ --------------
Emini S&P 400 Index 94 Jun 2008 $7,897 $549
====== ====
See accompanying notes
41
AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
COMMON STOCKS - 96.83%
CONSUMER DISCRETIONARY - 11.20%
AUTO COMPONENTS - 0.41%
Aftermarket Technology Corp. ## ................. 1,575 $ 36
------------
HOTELS, RESTAURANTS & LEISURE - 1.38%
Bob Evans Farms, Inc. + ......................... 1,945 54
Jack in the Box, Inc. ## ........................ 2,492 67
------------
121
------------
HOUSEHOLD DURABLES - 2.10%
CSS Industries, Inc. ............................ 715 23
Ethan Allen Interiors, Inc. + ................... 1,204 33
Tupperware Corp. ................................ 3,279 129
------------
185
------------
INTERNET & CATALOG RETAIL - 0.50%
Insight Enterprises, Inc. ## .................... 3,679 44
------------
LEISURE EQUIPMENT & PRODUCTS - 1.46%
Callaway Golf Co. + ............................. 2,825 39
Polaris Industries, Inc. + ...................... 1,110 51
Scholastic Corp. ## + ........................... 1,340 38
------------
128
------------
SPECIALTY RETAIL - 1.79%
Collective Brands, Inc. ## + .................... 3,220 40
Gymboree Corp. ## ............................... 900 39
Men's Wearhouse, Inc. + ......................... 775 20
Regis Corp. + ................................... 2,009 59
------------
158
------------
TEXTILES & APPAREL - 3.56%
Brown Shoe Company, Inc. ........................ 2,569 43
Movado Group, Inc. + ............................ 1,935 42
Perry Ellis International, Inc. ## .............. 3,184 73
Unifirst Corp. .................................. 1,746 82
Warnaco Group, Inc. ## + ........................ 1,606 74
------------
314
------------
TOTAL CONSUMER DISCRETIONARY ....................... 986
------------
CONSUMER STAPLES - 4.64%
FOOD & DRUG RETAILING - 2.66%
Casey's General Stores, Inc. + .................. 2,170 48
Longs Drug Stores Corp. ......................... 818 33
Ruddick Corp. + ................................. 2,550 99
Spartan Stores, Inc. + .......................... 2,638 55
------------
235
------------
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
FOOD PRODUCTS - 0.92%
Fresh Del Monte Produce, Inc. ## ................ 940 $ 30
Sensient Technologies Corp. + ................... 1,710 51
------------
81
------------
PERSONAL PRODUCTS - 0.61%
Elizabeth Arden, Inc. ## ........................ 2,914 54
------------
TOBACCO - 0.45%
Universal Corp. + ............................... 615 39
------------
TOTAL CONSUMER STAPLES ............................. 409
------------
ENERGY - 6.14%
ENERGY EQUIPMENT & SERVICES - 4.45%
Grey Wolf, Inc. ## + ............................ 8,123 51
Gulfmark Offshore, Inc. ## + .................... 964 58
Oil States International, Inc. ## + ............. 2,039 102
Parker Drilling Co. ## + ........................ 11,423 91
Trico Marine Services, Inc. ## + ................ 2,365 89
------------
391
------------
OIL & GAS - 1.69%
Comstock Resources, Inc. ## ..................... 1,625 74
Swift Energy Co. ## ............................. 1,439 75
------------
149
------------
TOTAL ENERGY ....................................... 540
------------
FINANCIALS - 29.19%
BANKS - 10.27%
Banco Latinoamericano de Exportaciones
S.A ............................................. 2,068 39
Boston Private Financial Holdings, Inc. + ....... 2,870 27
Brookline Bancorp, Inc. + ....................... 4,670 51
Central Pacific Financial Corp. + ............... 2,289 42
Columbia Banking System, Inc. ................... 700 19
Community Bank System, Inc. + ................... 2,639 67
CVB Financial Corp. ............................. 3,800 44
Dime Community Bancshares, Inc. ................. 2,400 45
First Community Bancorp, Inc. + ................. 929 20
First Niagara Financial Group, Inc. + ........... 4,201 61
FirstMerit Corp. + .............................. 2,355 48
Lakeland Financial Corp. ........................ 1,100 26
National Penn Bancshares, Inc. + ................ 4,458 75
Preferred Bank + ................................ 1,204 14
Simmons First National Corp. .................... 900 29
South Financial Group, Inc. + ................... 2,219 13
Sterling Bancshares, Inc. + ..................... 2,686 28
Sterling Financial Corp. + ...................... 2,634 32
See accompanying notes
42
AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Susquehanna Bancshares, Inc. + .................. 2,430 $ 48
SVB Financial Group ## + ........................ 1,394 68
UMB Financial Corp. + ........................... 2,200 109
------------
905
------------
DIVERSIFIED FINANCIALS - 2.75%
Advanta Corp., Class B Shares + ................. 2,650 23
Cash America International, Inc. ................ 1,570 64
GAMCO Investors, Inc. ........................... 527 24
SWS Group, Inc. + ............................... 2,974 39
Texas Capital Bancshares, Inc. ## + ............. 2,575 48
World Acceptance Corp. ## + ..................... 1,116 44
------------
242
------------
INSURANCE - 8.17%
Argo Group International Holdings Ltd. ## + ..... 2,006 72
Aspen Insurance Holdings Ltd. ................... 1,559 41
Delphi Financial Group, Inc. + .................. 2,545 69
FPIC Insurance Group, Inc. ## + ................. 639 30
Harleysville Group, Inc. ........................ 2,456 90
LandAmerica Financial Group, Inc. + ............. 775 22
Max Capital Group Ltd. + ........................ 890 21
Navigators Group, Inc. ## + ..................... 1,771 87
Phoenix Cos., Inc. + ............................ 2,003 26
Platinum Underwriters Holdings Ltd. ............. 1,240 44
ProAssurance Corp. ## + ......................... 1,364 72
SeaBright Insurance Holdings, Inc. ## ........... 4,339 67
Selective Insurance Group, Inc. + ............... 2,914 62
Stewart Information Services Corp. + ............ 699 17
------------
720
------------
REAL ESTATE - 8.00%
Ashford Hospitality Trust, Inc. + ............... 6,533 38
DiamondRock Hospitality Co. + ................... 4,873 62
EastGroup Properties, Inc. ...................... 770 37
Entertainment Properties Trust .................. 589 31
Equity Lifestyle Properties, Inc. ............... 640 32
Extra Space Storage, Inc. + ..................... 2,780 47
FelCor Lodging Trust, Inc. ...................... 2,510 31
LaSalle Hotel Properties + ...................... 2,344 75
Lexington Realty Trust + ........................ 3,414 49
Nationwide Health Properties, Inc. + ............ 1,506 54
PS Business Parks, Inc. ......................... 589 34
Senior Housing Properties Trust + ............... 3,124 75
Strategic Hotel Capital, Inc. + ................. 3,544 51
Sunstone Hotel Investors, Inc. + ................ 3,039 57
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Tanger Factory Outlet Centers, Inc. + .............. 775 $ 31
------------
704
------------
TOTAL FINANCIALS ................................... 2,571
------------
HEALTH CARE - 5.92%
HEALTH CARE EQUIPMENT & SUPPLIES - 0.82%
STERIS Corp. + .................................. 2,609 72
------------
HEALTH CARE PROVIDERS & SERVICES - 4.20%
Centene Corp. ## + .............................. 2,384 44
Gentiva Health Services, Inc. ## ................ 2,444 53
Molina Healthcare, Inc. ## + .................... 1,270 31
Owens & Minor, Inc. + ........................... 1,850 84
PSS World Medical, Inc. ## + .................... 2,785 46
Res-Care, Inc. ## ............................... 3,840 63
Stewart Enterprises, Inc. + ..................... 7,175 49
------------
370
------------
PHARMACEUTICALS - 0.90%
Sciele Pharma, Inc. ## + ........................ 4,099 79
------------
TOTAL HEALTH CARE .................................. 521
------------
INDUSTRIALS - 13.86%
AEROSPACE & DEFENSE - 0.15%
Cubic Corp. ..................................... 491 13
------------
BUILDING PRODUCTS - 0.78%
Lennox International, Inc. ...................... 2,060 68
------------
COMMERCIAL SERVICES & SUPPLIES - 4.55%
ABM Industries, Inc. + .......................... 1,714 36
Atlas Air Worldwide Holdings, Inc. ## + ......... 906 55
Bowne & Co., Inc. + ............................. 1,178 20
Consolidated Graphics, Inc. ## .................. 1,065 62
Deluxe Corp. .................................... 1,867 40
Ennis, Inc. + ................................... 3,979 67
Heidrick & Struggles International, Inc. + ...... 980 29
Korn/Ferry International ## ..................... 2,853 53
United Stationers, Inc. ## + .................... 881 39
------------
401
------------
CONSTRUCTION & ENGINEERING - 0.56%
EMCOR Group, Inc. ## + .......................... 1,982 50
------------
DIVERSIFIED MANUFACTURING - 1.76%
Acuity Brands, Inc. + ........................... 1,278 61
Barnes Group, Inc. + ............................ 1,514 40
See accompanying notes
43
AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Kennametal, Inc. ................................... 1,555 $ 54
------------
155
------------
ELECTRICAL EQUIPMENT - 1.14%
A.O. Smith Corp. + .............................. 1,420 44
Belden, Inc. + .................................. 1,070 36
Regal-Beloit Corp. + ............................ 561 21
------------
101
------------
MACHINERY - 2.96%
Actuant Corp. + ................................. 1,205 41
Applied Industrial Technologies, Inc. + ......... 2,285 55
CIRCOR International, Inc. ## ................... 945 46
Columbus McKinnon Corp. ## + .................... 1,195 34
EnPro Industries, Inc. ## + ..................... 1,411 51
Kadant, Inc. ## ................................. 1,320 34
------------
261
------------
MARINE - 0.50%
Hornbeck Offshore Services, Inc. ## + ........... 880 44
------------
ROAD & RAIL - 1.46%
Bristow Group, Inc. ## + ........................ 1,625 85
Saia, Inc. ## ................................... 3,094 43
------------
128
------------
TOTAL INDUSTRIALS .................................. 1,221
------------
INFORMATION TECHNOLOGY - 11.17%
COMMUNICATIONS EQUIPMENT - 0.40%
Emulex Corp. ## + ............................... 2,665 35
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.68%
Benchmark Electronics, Inc. ## + ................ 2,355 42
Checkpoint Systems, Inc. ## ..................... 2,664 69
CTS Corp. ....................................... 2,634 30
MTS Systems Corp. ............................... 1,284 44
Technitrol, Inc. + .............................. 2,444 51
------------
236
------------
IT CONSULTING & SERVICES - 3.13%
CACI International, Inc. ## + ................... 1,045 52
MPS Group, Inc. ## + ............................ 5,844 63
Ness Technologies, Inc. ## ...................... 5,640 51
Perot Systems Corp. ## + ........................ 4,275 67
Sykes Enterprises, Inc. ## + .................... 2,569 43
------------
276
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS - 2.60%
Brooks Automation, Inc. ## + 2,467 26
Photronics, Inc. ## + 5,040 53
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Skyworks Solutions, Inc. ## + ................... 5,350 $ 47
Standard Microsystems Corp. ## + ................ 2,100 62
TriQuint Semiconductor, Inc. ## + ............... 6,275 41
------------
229
------------
SOFTWARE - 2.36%
JDA Software Group, Inc. ## + ................... 4,419 83
Sybase, Inc. ## ................................. 1,658 49
TIBCO Software, Inc. ## + ....................... 9,869 76
------------
208
------------
TOTAL INFORMATION TECHNOLOGY ....................... 984
------------
MATERIALS - 7.62%
CHEMICALS - 2.56%
H.B. Fuller Co. ................................. 2,845 66
Hercules, Inc. + ................................ 1,445 27
OM Group, Inc. ## + ............................. 950 52
Rockwood Holdings, Inc. ## ...................... 1,791 66
Spartech Corp. + ................................ 1,585 14
------------
225
------------
CONTAINERS & PACKAGING - 2.54%
AptarGroup, Inc. + .............................. 1,990 88
Greif, Inc. ..................................... 1,066 69
Rock-Tenn Co. ................................... 1,965 67
------------
224
------------
METALS & MINING - 1.46%
Compass Minerals International, Inc. ............ 1,665 105
Worthington Industries, Inc. + .................. 1,340 24
------------
129
------------
PAPER & FOREST PRODUCTS - 1.06%
Buckeye Technologies, Inc. ## ................... 3,414 29
Potlatch Corp. .................................. 1,422 64
------------
93
------------
TOTAL MATERIALS .................................... 671
------------
TELECOMMUNICATION SERVICES - 1.69%
DIVERSIFIED TELECOMMUNICATION - 1.69%
General Communication, Inc. ## + ................ 2,009 12
Premiere Global Services, Inc. ## ............... 6,944 101
Syniverse Holdings, Inc. ## ..................... 2,260 36
------------
TOTAL TELECOMMUNICATION SERVICES ................... 149
------------
UTILITIES - 5.40%
ELECTRIC UTILITIES - 3.42%
Black Hills Corp. + ............................. 2,219 87
El Paso Electric Co. ## ......................... 3,730 84
See accompanying notes
44
AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Empire District Electric Co. .................... 3,139 $ 65
PNM Resources, Inc. + ........................... 1,474 21
Portland General Electric Co. ................... 1,810 44
------------
301
------------
GAS UTILITIES - 1.98%
Atmos Energy Corp. + ............................ 1,411 39
Southwest Gas Corp. ............................. 1,954 56
WGL Holdings, Inc. + ............................ 2,414 79
------------
174
------------
TOTAL UTILITIES .................................... 475
------------
TOTAL COMMON STOCKS ................................ 8,527
------------
SHORT TERM INVESTMENTS - 3.55%
American Beacon Money Market Select
Fund ++ ...................................... 180,437 181
iShares Russell 2000 Value Index Fund + ......... 1,942 132
------------
TOTAL SHORT TERM INVESTMENTS ....................... 313
------------
SECURITIES LENDING
COLLATERAL - 20.65%
American Beacon Cash Plus Trust ++ .............. 1,464,145 1,464
American Beacon Money Market Select
Fund ++ ...................................... 354,332 355
------------
TOTAL SECURITIES LENDING COLLATERAL ................ 1,819
------------
TOTAL INVESTMENTS 121.03% - (COST $11,865) ......... 10,659
LIABILITIES, NET OF OTHER ASSETS - (21.03%) ........ (1,852)
------------
TOTAL NET ASSETS - 100.00% ......................... $ 8,807
============
Percentages are stated as a percent of net assets.
## Non-income producing security.
+ All or a portion of this security is on loan at April 30, 2008.
++ The Fund/Trust is affiliated by having the same investment advisor.
See accompanying notes
45
AMERICAN BEACON EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
AUSTRIA - 0.22%
COMMON STOCKS - 0.22%
Raiffeisen International Bank-Holding AG ........ 2,820 $ 458
------------
BRAZIL - 12.12%
COMMON STOCKS - 8.43%
Amil Participacoes S.A. ......................... 13,900 84
Aracruz Celulose S.A., ADR + .................... 7,000 564
Banco do Brasil S.A. ............................ 42,024 731
Banco Itau Holding Financeira S.A., ADR ......... 17,810 500
Banco Nossa Caixa S.A. .......................... 29,000 443
Centrais Eletricas Brasileiras S.A. ............. 27,666 416
Cia de Saneamento de Minas Gerais-COPASA ........ 16,800 281
Companhia de Saneamento Basico do
Estado de Sao Paulo .......................... 5,570 139
Companhia de Saneamento Basico do
Estado de Sao Paulo, ADR + ................... 3,470 176
Companhia Energetica de Minas Gerais,
ADR + ........................................ 12,324 253
Companhia Siderurgica Nacional S.A. ............. 9,972 437
Cyrela Brazil Realty S.A. ....................... 40,296 672
Empresa Brasileira de Aeronautica S.A. ..........
(Embraer), ADR .................................. 4,740 198
Gafisa S.A. ..................................... 15,020 330
Gafisa S.A., ADR + .............................. 4,850 211
Grendene S.A. ................................... 53,700 575
Perdigao S.A. ................................... 21,187 583
Petroleo Brasileiro S.A., ADR ................... 1,940 235
Petroleo Brasileiro S.A., A Shares, ADR ......... 79,321 8,019
Unibanco - Uniao de Bancos Brasileiros S.A ...... 15,378 229
Unibanco - Uniao de Bancos Brasileiros S.A.,
GDR .......................................... 14,344 2,086
Usinas Siderurgicas de Minas Gerais S.A. ........ 12,042 616
------------
TOTAL COMMON STOCKS ................................ 17,778
------------
PREFERRED STOCKS - 3.69%
Banco Itau Holding Financeira S.A ............... 17,048 486
Braskem S.A. .................................... 76,100 656
Centrais Eletricas Brasileiras S.A .............. 28,340 440
Companhia de Tecidos Norte de Minas ............. 80,562 368
Companhia Energetica de Minas Gerais ............ 23,800 494
Companhia Vale do Rio Doce, ADR ................. 64,628 2,058
Companhia Vale do Rio Doce, A Shares ............ 7,504 242
Itausa - Investimentos Itau S.A. ................ 58,005 382
Itausa - Investimentos Itau S.A., Right ## ...... 427 1
Net Servicos de Comunicacao S.A. ## ............. 34,751 478
Tele Norte Leste Participacoes S.A., ADR ........ 46,570 1,067
Telemig Celular Participacoes S.A ............... 10,954 378
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Usinas Siderurgicas de Minas Gerais S.A. ........ 14,823 $ 724
TOTAL PREFERRED STOCKS ............................. 7,774
------------
TOTAL BRAZIL ....................................... 25,552
------------
CHILE - 0.31%
COMMON STOCKS - 0.31%
Banco Santander-Chile, ADR ...................... 4,800 252
Compania Cervecerias Unidas S.A., ADR ........... 11,240 410
------------
TOTAL CHILE ........................................ 662
------------
COLOMBIA - 0.26%
COMMON STOCKS - 0.26%
Bancolombia S.A., ADR ........................... 13,670 546
------------
CZECH REPUBLIC - 0.91%
COMMON STOCKS - 0.91%
Central European Media Enterprises Ltd. ## + .... 9,739 1,033
Komercni Banka, a.s. ............................ 3,650 894
------------
TOTAL CZECH REPUBLIC ............................... 1,927
------------
EGYPT - 0.20%
COMMON STOCKS - 0.20%
ElSwedy Cables Holding Co. ## ................... 15,795 415
------------
HONG KONG/CHINA - 15.16%
COMMON STOCKS - 15.16%
Anhui Expressway Co. Ltd. + ..................... 556,000 434
Bank of China Ltd. + ............................ 2,172,000 1,112
Belle International Holdings Ltd. ............... 17,000 18
Bosideng International Holdings Ltd. ## + ....... 1,772,000 346
Brilliance China Automotive Holdings Ltd. ## +... 2,112,000 396
BYD Electronic International Co. Ltd. ........... 285,000 315
China CITIC Bank + .............................. 564,000 373
China Coal Energy Ltd. + ........................ 774,000 1,639
China Construction Bank Corp. + ................. 2,210,000 1,994
China COSCO Holdings Co. Ltd. + ................. 419,000 1,253
China Mobile Ltd. ............................... 262,500 4,514
China Mobile Ltd., ADR .......................... 240 21
China Netcom Group Corp. (Hong Kong) Ltd. ....... 163,000 492
China Overseas Land & Investment Ltd. + ......... 248,000 522
China Petroleum & Chemical Corp. ................ 946,000 1,004
China Power International Development Ltd. + .... 2,453,800 894
China Resources Power Holdings Co. .............. 212,000 539
China Telecom Corp. Ltd. + ...................... 1,017,100 683
COSCO Pacific Ltd. .............................. 370,000 700
Datang International Power Generation Co.
Ltd. + ....................................... 510,000 352
Denway Motors Ltd. + ............................ 854,700 434
See accompanying notes
46
AMERICAN BEACON EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Dongfeng Motor Group Co. Ltd. ................... 1,024,000 $ 557
Focus Media Holding Ltd., ADR ## + .............. 22,200 819
Genting International plc ## .................... 42,320 19
Global Bio-chem Technology Group Co. Ltd. + ..... 1,499,800 697
GOME Electrical Appliances Holdings Ltd. ........ 621,000 1,439
Hopson Development Holdings Ltd. + .............. 198,100 422
Huaneng Power International, Inc. + ............. 917,900 763
Industrial & Commercial Bank of China + ......... 2,293,000 1,815
Maanshan Iron & Steel Co. Ltd. + ................ 793,000 511
NWS Holdings Ltd. ............................... 71,784 197
PetroChina Co. Ltd. + ........................... 1,274,000 1,896
PetroChina Co. Ltd., ADR + ...................... 1,080 163
Ping'an Insurance Co. Ltd. + .................... 122,500 1,162
Shanghai Industrial Holdings Ltd. + ............. 155,000 642
Sinopec Shanghai Petrochemical Co. Ltd. + ....... 1,088,000 427
Sinotrans Ltd. .................................. 1,135,000 384
Texwinca Holdings Ltd. .......................... 756,000 569
TPV Technology Ltd. ............................. 898,000 625
Weiqiao Textile Co. Ltd. ........................ 682,600 819
------------
TOTAL HONG KONG/CHINA ............................... 31,961
------------
HUNGARY - 0.25%
COMMON STOCKS - 0.25%
Magyar Telekom Telecommunications plc ........... 96,750 516
------------
INDIA - 7.48%
COMMON STOCKS - 7.48%
Aban Offshore Ltd. .............................. 2,200 184
ABB Ltd. ........................................ 16,000 452
Andhra Bank ..................................... 128,990 261
Axis Bank Ltd. .................................. 28,700 651
Bharat Heavy Electricals Ltd. ................... 8,500 399
Bharat Petroleum Corp. Ltd. ..................... 71,343 720
Bharti Airtel Ltd. ## ........................... 18,100 400
Deccan Chronicle Holdings Ltd. .................. 81,979 308
Glenmark Pharmaceuticals Ltd. ................... 39,000 649
GVK Power & Infrastructure Ltd. ## .............. 226,000 253
HDFC Bank Ltd. .................................. 8,800 327
HDFC Bank Ltd., ADR + ........................... 5,800 654
Hindalco Industries Ltd. ## ..................... 135,290 646
Hindustan Petroleum Corp. Ltd. .................. 108,050 685
Hindustan Unilever Ltd. ......................... 39,500 245
Housing Development Finance Corp. ............... 5,800 398
ICICI Bank Ltd., ADR ............................ 7,610 339
India Cements Ltd. .............................. 153,000 652
Infosys Technologies Ltd. ....................... 15,700 680
Infrastructure Development Finance Co. Ltd. ..... 56,500 247
Mahanagar Telephone Nigam Ltd. .................. 112,790 308
Mahanagar Telephone Nigam Ltd., ADR + ........... 12,080 67
Mahindra & Mahindra Ltd. ........................ 17,101 278
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Maruti Suzuki India Ltd. ........................ 14,900 $ 273
Oil & Natural Gas Corp. Ltd. .................... 33,111 843
Praj Industries Ltd. ............................ 45,500 222
Reliance Industries Ltd. ........................ 20,800 1,339
Satyam Computer Services Ltd. ................... 40,010 467
State Bank of India Ltd., GDR ................... 11,740 1,091
Steel Authority of India Ltd. ................... 64,600 293
Sterlite Industries (India) Ltd. ................ 12,480 266
Sterlite Industries (India) Ltd., ADR ## + ...... 4,560 95
Tata Consultancy Services Ltd. .................. 29,250 664
Tata Motors Ltd. ................................ 12,456 203
Television Eighteen India Ltd. .................. 21,000 181
Zee Entertainment Enterprises Ltd. .............. 4,500 24
------------
TOTAL INDIA ........................................ 15,764
------------
INDONESIA - 1.99%
COMMON STOCKS - 1.99%
PT Astra International Tbk ...................... 230,900 501
PT Bank Central Asia Tbk ........................ 903,000 294
PT Bank Mandiri (Persero) Tbk ................... 548,000 171
PT Bank Rakyat Indonesia Tbk .................... 419,000 270
PT Bumi Resources Tbk ........................... 1,432,000 1,033
PT Gudang Garam Tbk ............................. 530,300 437
PT International Nickel Indonesia Tbk ........... 84,000 60
PT Kalbe Farma Tbk .............................. 2,479,100 245
PT Perusahaan Gas Negara Persero Tbk ............ 82,000 107
PT Telekomunikasi Indonesia Tbk ................. 1,132,300 1,087
------------
TOTAL INDONESIA .................................... 4,205
------------
ISRAEL - 0.92%
COMMON STOCKS - 0.92%
Bank Leumi le-Israel B.M. ....................... 55,590 277
Israel Discount Bank Ltd. ## .................... 277,355 674
Teva Pharmaceutical Industries Ltd., ADR ........ 21,350 999
------------
TOTAL ISRAEL ....................................... 1,950
------------
LUXEMBOURG - 0.37%
COMMON STOCKS - 0.37%
Millicom International Cellular S.A. ............ 7,302 789
------------
MALAYSIA - 2.18%
COMMON STOCKS - 2.18%
AMMB Holdings Bhd ............................... 404,750 482
Gamuda Bhd ...................................... 258,200 255
IOI Corp. Bhd ................................... 264,250 611
Malayan Banking Bhd ............................. 619,500 1,569
Proton Holdings Bhd ## .......................... 32,900 40
Resorts World Bhd ............................... 423,200 453
Sime Darby Bhd .................................. 179,500 545
See accompanying notes
47
AMERICAN BEACON EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Tenaga Nasional Bhd ............................. 312,000 $ 647
------------
TOTAL MALAYSIA ..................................... 4,602
------------
MEXICO - 5.12%
COMMON STOCKS - 5.12%
America Movil, S.A.B. de C.V., ADR .............. 41,457 2,403
Cemex, S.A.B. de C.V. ## ........................ 106,875 297
Cemex, S.A.B. de C.V., ADR ## + ................. 14,530 402
Consorcio ARA, S.A.B. de C.V. + ................. 178,500 187
Controladora Commercial Mexicana, S.A.B.
de C.V. ...................................... 211,100 594
Corp GEO, S.A.B. de C.V. ## ..................... 83,399 311
Desarrolladora Homex, S.A.B. de C.V., ADR ## + .. 7,188 428
Embotelladoras Arca, S.A.B. de C.V. ............. 114,830 438
Empresas ICA, S.A.B. de C.V. ## ................. 69,957 423
Gruma, S.A.B. de C.V. ........................... 151,800 420
Grupo Continential, S.A.B ....................... 332,950 817
Grupo Financiero Banorte, S.A.B. de C.V. + ...... 184,500 815
Grupo Mexico, S.A.B. de C.V. .................... 44,700 326
Grupo Modelo, S.A.B. de C.V. .................... 138,200 610
Kimberly-Clark de Mexico, S.A.B. de C.V. ........ 80,600 383
Telefonos de Mexico, S.A.B. de C.V., ADR ........ 16,140 582
Urbi Desarrollos Urbanos, S.A.B. de C.V. ## + ... 85,284 274
Wal-Mart de Mexico, S.A.B. de C.V. + ............ 212,380 854
Wal-Mart de Mexico, S.A.B. de C.V., ADR + ....... 5,848 235
------------
TOTAL MEXICO ....................................... 10,799
------------
PHILIPPINES - 0.48%
COMMON STOCKS - 0.48%
ABS-CBN Broadcasting Corp. ...................... 172,400 102
Bank of the Philippine Islands .................. 373,023 441
Manila Electric Co. ............................. 104,320 200
Metropolitan Bank & Trust Co. ................... 49,600 41
PNOC Energy Development Corp. ................... 295,000 37
Union Bank of the Philippines ................... 225,300 181
------------
TOTAL PHILIPPINES .................................. 1,002
------------
POLAND - 2.14%
COMMON STOCKS - 2.14%
Bank Pekao S.A. ................................. 10,595 925
Bank Zachodni WBK S.A. .......................... 5,034 370
Budimex S.A. ## ................................. 2,784 99
Getin Holding S.A. ## ........................... 78,485 432
KGHM Polska Miedz S.A. .......................... 4,100 190
PBG S.A. ## ..................................... 2,038 272
Polimex Mostostal S.A. .......................... 76,135 240
Polski Koncern Naftowy Orlen S.A. ## ............ 23,950 455
Powszechna Kasa Oszczednosci Bank Polski SA ..... 14,191 295
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Telekomunikacja Polska S.A. ..................... 87,830 $ 886
TVN S.A. ........................................ 33,658 346
------------
TOTAL POLAND ....................................... 4,510
------------
RUSSIA - 9.27%
COMMON STOCKS - 9.27%
CTC Media, Inc. ## + ............................ 6,028 156
Evraz Group S.A., GDR ........................... 5,810 603
Gazprom OAO, ADR ................................ 146,794 7,810
LUKOIL Oil Co., ADR ............................. 64,444 5,819
Mechel OAO, ADR ................................. 4,773 696
OJSC MMC Norilsk Nickel, ADR .................... 22,417 605
OJSC Rosneft Oil Co. ## ......................... 118,156 1,158
OJSC Surgutneftegaz, ADR + ...................... 21,500 210
Severstal OAO, GDR .............................. 13,900 342
Vimpel-Communications, ADR ...................... 39,787 1,200
VTB Bank OJSC, GDR ## ++ ........................ 40,360 302
Wimm-Bill-Dann Foods OJSC, ADR + ................ 4,019 489
X5 Retail Group NV ## ........................... 4,375 153
------------
TOTAL RUSSIA ....................................... 19,543
------------
SOUTH AFRICA - 6.78%
COMMON STOCKS - 6.78%
African Bank Investments Ltd. ................... 10,546 37
AngloGold Ashanti Ltd., ADR + ................... 33,380 1,139
ArcelorMittal South Africa Ltd. ................. 32,259 977
Aspen Pharmacare Holdings Ltd. .................. 172,150 707
Bidvest Group Ltd. .............................. 28,334 427
Exxaro Resources Ltd. ........................... 32,100 531
FirstRand Ltd. .................................. 156,950 325
Gold Fields Ltd., ADR ........................... 40,830 551
JD Group Ltd. ................................... 67,570 316
MTN Group Ltd. .................................. 89,759 1,715
Murray & Roberts Holdings Ltd. .................. 34,939 409
Nampak Ltd. ..................................... 273,020 596
Nedbank Group Ltd. .............................. 86,970 1,317
Raubex Group Ltd. ............................... 86,894 448
Sanlam Ltd. ..................................... 152,410 403
Sappi Ltd. ...................................... 64,530 871
Sasol Ltd. ...................................... 33,646 1,913
Standard Bank Group Ltd. ........................ 21,876 260
Steinhoff International Holdings Ltd. ........... 183,099 449
Telkom South Africa Ltd. ........................ 47,940 815
Tiger Brands Ltd. ............................... 4,690 90
------------
TOTAL SOUTH AFRICA ................................. 14,296
------------
SOUTH KOREA - 14.12%
COMMON STOCKS - 13.83%
Amorepacific Corp. .............................. 467 296
See accompanying notes
48
AMERICAN BEACON EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Cheil Communications, Inc. ...................... 1,596 $ 429
Cheil Industries, Inc. .......................... 7,136 391
GS Engineering & Construction Corp. ............. 1,689 248
Hana Financial Group, Inc. ...................... 12,060 545
Hanwha Chemical Corp. ........................... 28,380 413
Hite Brewery Co. Ltd. ........................... 1,178 139
Hynix Semiconductor, Inc. ## .................... 10,651 285
Hyundai Heavy Industries Co. Ltd. ............... 1,548 553
Hyundai Mobis ................................... 13,656 1,252
Hyundai Motor Co. Ltd. .......................... 24,212 2,043
Kookmin Bank .................................... 28,194 1,966
Kookmin Bank, ADR ............................... 1,050 73
Korea Electric Power Corp. ...................... 32,265 1,086
Korea Zinc Company Ltd. ......................... 4,057 490
KT Corp. ........................................ 6,870 317
KT Corp., ADR ................................... 30,870 714
Kumho Tire Co., Inc. ............................ 48,450 553
LG Chemical Ltd. ................................ 6,597 658
LG Display Co. Ltd. ............................. 18,879 830
LG Electronics, Inc. ............................ 4,752 742
Lotte Shopping Co. Ltd. ......................... 2,740 1,000
NHN Corp. ## .................................... 3,348 778
Nong Shim Co. Ltd. .............................. 3,266 601
POSCO ........................................... 3,066 1,500
POSCO, ADR ...................................... 2,590 320
Samsung Electronics Co. Ltd. .................... 7,426 5,266
Samsung Fire & Marine Insurance Co. Ltd. ........ 2,049 447
Shinhan Financial Group Co. Ltd. ................ 28,760 1,661
SK Telecom Co. Ltd., ADR ........................ 74,950 1,692
S-Oil Corp. ..................................... 6,759 456
SSCP Co. Ltd. ## ................................ 10,764 186
STX Pan Ocean Co. Ltd. .......................... 43,650 114
STX Pan Ocean Co. Ltd. + ........................ 179,000 445
Woongjin Coway Co. Ltd. ......................... 2 0,916 661
------------
TOTAL COMMON STOCKS ................................ 29,150
------------
PREFERRED STOCKS - 0.29%
Samsung Electronics Co. Ltd. .................... 1,182 608
------------
TOTAL SOUTH KOREA 29,758
------------
TAIWAN - 9.64%
COMMON STOCKS - 9.64%
Acer, Inc. ...................................... 8,000 17
Asustek Computer, Inc. .......................... 250,655 813
AU Optronics Corp. .............................. 609,946 1,192
Cathay Financial Holding Co. Ltd. ............... 245,000 688
China Motor Corp. ............................... 433,245 380
China Steel Corp. ............................... 466,000 765
Chinatrust Financial Holding Co. Ltd. ........... 1,425,149 1,486
Chunghwa Telecom Co. Ltd., ADR .................. 30,925 789
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Compal Electronics, Inc. ........................ 1,324,885 $ 1,482
First Financial Holding Co. Ltd. ................ 929,496 1,130
Formosa Plastics Corp. .......................... 262,000 749
High Tech Computer Corp. ........................ 24,000 619
Mega Financial Holding Co. Ltd. ................. 658,000 579
Nan Ya Printed Circuit Board Corp. .............. 88,480 466
Nien Hsing Textile Co. Ltd. ..................... 259,000 174
Powerchip Semiconductor Corp. ................... 1,199,444 492
Quanta Computer, Inc. ........................... 1,006,675 1,676
Radiant Opto-Electronics Corp. .................. 17,329 25
SinoPac Financial Holdings Co. Ltd. ............. 2,576,987 1,274
Taiwan Cement Corp. ............................. 381,000 619
Taiwan Semiconductor Manufacturing Co. Ltd. ..... 880,474 1,929
Taiwan Semiconductor Manufacturing Co.
Ltd., ADR .................................... 27,035 304
United Microelectronics Corp. ................... 2,547,542 1,556
Wistron Corp. ................................... 2,000 4
Yaego Corp. ..................................... 1,441,000 497
Yang Ming Marine Transport Corp. ................ 298,823 232
Yuanta Financial Holding Co. Ltd. ............... 412,000 392
------------
TOTAL TAIWAN 20,329
------------
THAILAND - 2.72%
COMMON STOCKS - 2.72%
Advanced Info Service PCL ....................... 53,800 157
Bangkok Bank PCL ................................ 236,100 1,037
Charoen Pokphand Foods PCL ...................... 4,051,200 606
Delta Electronics PCL ........................... 80,900 54
Italian -Thai Development PCL ................... 486,100 115
Kasikornbank PCL ................................ 354,300 981
Krung Thai Bank PCL ............................. 1,770,600 558
Land and Houses PCL ............................. 305,400 86
PTT Exploration & Production PCL ................ 76,400 400
PTT PCL ......................................... 30,900 326
Siam Cement PCL ................................. 120,100 818
Siam Commercial Bank PCL ........................ 86,600 240
Siam Makro PCL .................................. 8,700 28
Thai Union Frozen Products PCL .................. 532,500 326
------------
TOTAL THAILAND ..................................... 5,732
------------
TURKEY - 1.45%
COMMON STOCKS - 1.45%
Akcansa Cimento A.S. ............................ 13,230 56
Aksigorta A.S. .................................. 45,266 227
Asya Katilim Bankasi A.S. ## .................... 36,000 250
Tekfen Holding A.S. ............................. 83,981 520
Turkcell Iletisim Hizmetleri A.S. ............... 48,013 384
Turkiye Garanti Bankasi A.S. .................... 37,974 204
Turkiye Is Bankasi (Isbank) ..................... 202,779 938
See accompanying notes
49
AMERICAN BEACON EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Turkiye Sise ve Cam Fabrikalari A.S.
(Sisecam) .................................... 308,397 $ 479
Yapi ve Kredi Bankasi A.S. ## ................... 1 --
------------
TOTAL TURKEY ....................................... 3,058
------------
SHORT TERM INVESTMENTS - 4.74%
American Beacon Money Market Select Fund # ...... 9,078,361 9,078
PAR
AMOUNT
----------
U.S. Treasury Bill,
1.32%, Due 6/12/2008 Section .................... $ 913 912
------------
TOTAL SHORT TERM INVESTMENTS ....................... 9,990
------------
SHARES
-----------
SECURITIES LENDING
COLLATERAL - 8.49%
American Beacon Cash Plus Trust # ............... 14,415,599 14,415
American Beacon Money Market Select Fund # ...... 3,488,662 3,489
------------
TOTAL SECURITIES LENDING COLLATERAL ................ 17,904
------------
TOTAL INVESTMENTS 107.32% - (COST $196,471) ........ 226,268
LIABILITIES, NET OF OTHER ASSETS - (7.32%) ......... (15,440)
------------
TOTAL NET ASSETS - 100.00% ......................... $ 210,828
============
Percentages are stated as a percent of net assets.
## Non-income producing security.
+ All or a portion of this security is on loan at April 30, 2008.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $302 or 0.14% of net assets.
The Fund has no right to demand registration of these securities.
# The Fund/Trust is affiliated by having the same investment advisor.
Section At April 30, 2008, security pledged as collateral for open futures
contracts.
FUTURES CONTRACTS
(DOLLARS IN THOUSANDS)
UNREALIZED
NUMBER OF EXPIRATION MARKET APPRECIATION/
CONTRACTS DATE VALUE (DEPRECIATION)
--------- ---------- ------- --------------
Emini S&P 500 Index ...... 176 Jun 2008 $12,197 $420
======= ====
See accompanying notes
50
AMERICAN BEACON EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SECTOR DIVERSIFICATION
Percent of
Net Assets
----------
Communications ..................... 1.05%
Consumer Discretionary ............. 8.72%
Consumer Staples ................... 3.34%
Energy ............................. 16.11%
Financials ......................... 20.92%
Health Care ........................ 1.60%
Industrials ........................ 6.25%
Information Technology ............. 10.01%
Materials .......................... 12.01%
Telecommunication Services ......... 10.82%
Utilities .......................... 3.26%
Short Term Investments ............. 13.23%
Liabilities, Net of Other Assets ... (7.32)%
------
100.00%
======
See accompanying notes
51
AMERICAN BEACON HIGH YIELD BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
CORPORATE OBLIGATIONS - 93.42%
AUTO COMPONENTS - 2.25%
Allison Transmission, 11.00%, Due 11/1/2015
+ ++ ......................................... $ 500 $ 491
Stanadyne Corp., 10.00%, Due 8/15/2014 .......... 1,000 965
TriMas Corp., 9.875%, Due 6/15/2012 ............. 965 842
TRW Automotive, Inc., 7.25%, Due 3/15/2017 ++ ... 900 876
United Components, Inc., 9.375%, Due 6/15/2013 .. 1,250 1,235
------------
4,409
------------
AUTO LOAN - 3.32%
Ford Motor Credit Co. LLC,
5.80%, Due 1/12/2009 ......................... 300 293
9.75%, Due 9/15/2010 ......................... 1,700 1,652
9.875%, Due 8/10/2011 ........................ 2,300 2,226
General Motors Acceptance Corp., 6.875%, Due
9/15/2011 .................................... 2,800 2,333
------------
6,504
------------
AUTOMOBILES - 0.62%
Ford Motor Co., 8.875%, Due 1/15/2022 ........... 200 162
General Motors Corp.,
7.70%, Due 4/15/2016 ......................... 900 702
7.40%, Due 9/1/2025 .......................... 500 352
------------
1,216
------------
CASINO/GAMING - 0.31%
Fontainebleau Las Vegas Holdings LLC, 10.25%, Due
6/15/2015 ++ ................................. 700 502
Pinnacle Entertainment, Inc., 8.75%, Due
10/1/2013 .................................... 100 102
------------
604
------------
COMMERCIAL SERVICES - 1.87%
Harland Clarke Holdings, 7.815%, Due 5/15/2015 .. 1,500 1,080
Iron Mountain, Inc.,
6.625%, Due 1/1/2016 ......................... 750 725
8.75%, Due 7/15/2018 + ....................... 900 958
RSC Equipment Rental, Inc., 9.50%, Due
12/1/2014 .................................... 1,000 895
------------
3,658
------------
COMMUNICATIONS - 13.62%
American Tower Corp., 7.00%, Due 10/15/2017 ++ .. 900 909
Cadmus Communications Corp., 8.375%, Due
6/15/2014 .................................... 1,700 1,360
CanWest Media, Inc., 8.00%, Due 9/15/2012 ....... 1,000 957
Charter Communications Holdings LLC,
10.25%, Due 9/15/2010 ........................ 1,100 1,059
11.00%, Due 10/1/2015 ........................ 1,800 1,391
Clear Channel Communications, Inc., 7.65%, Due
9/15/2010 .................................... 1,000 1,040
CSC Holdings, Inc.,
7.625%, Due 4/1/2011 ......................... 200 201
7.625%, Due 7/15/2018 ........................ 1,000 972
Dex Media, Inc., 8.00%, Due 11/15/2013 .......... 860 658
Digicel Group Ltd., 8.875%, Due 1/15/2015 ++ .... 1,000 858
See accompanying notes
52
AMERICAN BEACON HIGH YIELD BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Echostar DBS Corp., 7.125%, Due 2/1/2016 ........ $ 600 $ 589
Fairpoint Communications, Inc., 13.125%, Due
4/1/2018 ++ .................................. 500 505
Idearc, Inc., 8.00%, Due 11/15/2016 ............. 1,000 650
Intelsat Intermediate Holding Co. Ltd., Zero
Coupon, Due 2/1/2015 # ....................... 800 684
Intelsat Subsidiary Holding Co. Ltd., 8.25%, Due
1/15/2013 .................................... 600 605
L-3 Communications Corp., 6.125%, Due
7/15/2013 .................................... 500 496
Lamar Media Corp., 7.25%, Due 1/1/2013 .......... 1,100 1,089
Liberty Media LLC, 5.70%, Due 5/15/2013 ......... 1,100 985
LIN Television Corp., 6.50%, Due 5/15/2013 ...... 500 481
MasTec, Inc., 7.625%, Due 2/1/2017 .............. 700 613
MetroPCS Wireless, Inc., 9.25%, Due 11/1/2014 ... 1,000 983
Network Communications, Inc., 10.75%, Due
12/1/2013 .................................... 1,000 746
Nortel Networks Ltd., 6.963%, Due 7/15/2011 # ... 1,000 943
Quebecor Media, Inc., 7.75%, Due 3/15/2016 ...... 1,750 1,684
Qwest Capital Funding, Inc., 7.25%, Due
2/15/2011 .................................... 1,000 980
Qwest Communications International, Inc., 7.50%,
Due 2/15/2014 ................................ 1,200 1,179
Radio One, Inc., 6.375%, Due 2/15/2013 .......... 800 606
Reader's Digest Association, Inc., 9.00%, Due
2/15/2017 ++ ................................. 2,000 1,430
Umbrella Acquisition, Inc., 9.75%, Due
3/15/2015 + ++ ............................... 1,000 720
Videotron Ltd., 9.125%, Due 4/15/2018 ++ ........ 800 852
West Corp., 9.50%, Due 10/15/2014 ............... 500 478
------------
26,703
------------
CONSTRUCTION & ENGINEERING - 0.46%
KB Home,
6.25%, Due 6/15/2015 ......................... 700 630
7.25%, Due 6/15/2018 ......................... 300 278
------------
908
------------
CONSUMER DISCRETIONARY - 3.44%
AMC Entertainment, Inc., 11.00%, Due 2/1/2016 ... 1,000 995
Commercial Vehicle Group, Inc., 8.00%, Due
7/1/2013 ..................................... 200 171
FTD, Inc., 7.75%, Due 2/15/2014 ................. 923 831
Michaels Stores, Inc., 10.00%, Due 11/1/2014 + .. 1,000 970
OSI Restaurant Partners, Inc., 10.00%, Due
6/15/2015 + ++ ............................... 600 453
Penske Auto Group, Inc., 7.75%, Due 12/15/2016 .. 2,250 2,048
Simmons Co., 7.875%, Due 1/15/2014 .............. 750 662
Travelport LLC, 7.701%, Due 9/1/2014 # .......... 700 605
------------
6,735
------------
CONSUMER STAPLES - 5.11%
Blyth, Inc., 5.50%, Due 11/1/2013 ............... 1,500 1,245
Collective Brands, Inc., 8.25%, Due 8/1/2013 .... 1,500 1,354
Dean Foods Co., 7.00%, Due 6/1/2016 ............. 600 561
Dole Food Co., Inc., 8.625%, Due 5/1/2009 ....... 100 97
Jarden Corp., 7.50%, Due 5/1/2017 + ............. 1,900 1,748
Prestige Brands, Inc., 9.25%, Due 4/15/2012 ..... 2,000 1,980
Rafaella Apparel Group, Inc., 11.25%, Due
6/15/2011 .................................... 1,077 754
See accompanying notes
53
AMERICAN BEACON HIGH YIELD BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Reynolds American, Inc., 7.625%, Due 6/1/2016 ... $ 1,200 $ 1,271
Smithfield Foods, Inc., 7.75%, Due 5/15/2013 .... 1,000 1,002
------------
10,012
------------
ENERGY - 11.80%
AmeriGas Partners, L.P., 7.125%, Due 5/20/2016 .. 750 756
Aquila, Inc., 9.95%, Due 2/1/2011 ............... 900 933
Chesapeake Energy Corp., 6.625%, Due 1/15/2016 .. 1,400 1,400
Cie Generale de Geophysique-Veritas,
7.50%, Due 5/15/2015 ......................... 800 826
7.75%, Due 5/15/2017 ......................... 200 207
Copano Energy LLC, 8.125%, Due 3/1/2016 ......... 900 936
Dynegy Holdings, Inc., 8.375%, Due 5/1/2016 ..... 1,000 1,042
El Paso Corp., 6.875%, Due 6/15/2014 ............ 1,000 1,037
Intergen NV, 9.00%, Due 6/30/2017 ++ ............ 900 941
Mariner Energy, Inc., 7.50%, Due 4/15/2013 ...... 900 889
MarkWest Energy Partners LP,
6.875%, Due 11/1/2014 ........................ 800 772
8.75%, Due 4/15/2018 ++ ...................... 600 623
Massey Energy Co., 6.875%, Due 12/15/2013 ....... 525 525
Mirant Americas Generation LLC, 8.30%, Due
5/1/2011 ..................................... 700 726
Mirant North America LLC, 7.375%, Due
12/31/2013 ................................... 1,000 1,037
NRG Energy, Inc.,
7.25%, Due 2/1/2014 .......................... 700 719
7.375%, Due 2/1/2016 ......................... 1,800 1,854
Peabody Energy Corp.,
6.875%, Due 3/15/2013 ........................ 200 204
7.375%, Due 11/1/2016 ........................ 700 735
PetroQuest Energy, Inc., 10.375%, Due
5/15/2012 .................................... 1,115 1,160
Regency Energy Partners LP, 8.375%, Due
12/15/2013 ................................... 877 914
Swift Energy Co., 7.625%, Due 7/15/2011 ......... 900 911
Tenaska, Inc., 6.528%, Due 12/30/2014 ++ ........ 1,130 1,183
Tesoro Corp., 6.50%, Due 6/1/2017 ............... 1,100 1,009
VeraSun Energy Corp., 9.375%, Due 6/1/2017 ++ ... 500 330
Williams Cos., Inc.,
7.625%, Due 7/15/2019 ........................ 500 540
7.875%, Due 9/1/2021 ......................... 400 437
8.75%, Due 3/15/2032 ......................... 400 473
------------
23,119
------------
FINANCE - 5.19%
CPI International, Inc., 8.936%, Due
2/1/2015 # ................................... 669 682
Deluxe Corp., 5.00%, Due 12/15/2012 ............. 500 433
FMC Finance III SA, 6.875%, Due 7/15/2017 ....... 300 302
Forest City Enterprises, Inc., 7.625%, Due
6/1/2015 ..................................... 600 558
Icahn Enterprises LP, 7.125%, Due 2/15/2013 ..... 1,697 1,583
JP Morgan Chase & Co., 7.90%, Due 12/31/2049 .... 800 815
See accompanying notes
54
AMERICAN BEACON HIGH YIELD BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Lehman Brothers Holdings, Inc., 6.20%,
Due 9/26/2014 ................................ $ 1,000 $ 1,006
Leucadia National Corp., 7.125%, Due 3/15/2017 .. 1,750 1,671
Merrill Lynch & Co., Inc., 6.875%,
Due 4/25/2018 ................................ 1,000 1,008
Petroplus Finance Ltd., 6.75%, Due 5/1/2014 ++ .. 1,100 1,034
Rainbow National Services LLC, 10.375%,
Due 9/1/2014 ++ .............................. 1,000 1,075
------------
10,167
------------
HEALTH CARE - 6.65%
Angiotech Pharmaceuticals, Inc., 6.826%,
Due 12/1/2013 # .............................. 1,000 880
DaVita, Inc., 7.25%, Due 3/15/2015 .............. 1,100 1,103
Elan Finance PLC/Elan Finance Corp., 7.201%,
Due 12/1/2013 # .............................. 1,075 984
Fresenius Medical Care Capital Trust IV, 7.875%,
Due 6/15/2011 ................................ 800 838
HCA, Inc.,
9.125%, Due 11/15/2014 ....................... 1,000 1,060
6.50%, Due 2/15/2016 ......................... 1,000 895
Interactive Health, 7.25%, Due 4/1/2011 ++ ...... 1,259 692
Omnicare, Inc.,
6.75%, Due 12/15/2013 ........................ 500 465
6.875%, Due 12/15/2015 ....................... 500 456
Skilled Healthcare Group, Inc., 11.00%,
Due 1/15/2014 ................................ 845 906
Tenet Healthcare Corp., 9.875%, Due 7/1/2014 + .. 1,000 1,023
United Surgical Partners International, Inc.,
9.25%, Due 5/1/2017 .......................... 900 871
US Oncology, Inc.,
7.949%, Due 3/15/2012 # ...................... 948 763
9.00%, Due 8/15/2012 ......................... 500 507
10.75%, Due 8/15/2014 ........................ 760 768
Vanguard Health Holding Co. II LLC, 9.00%,
Due 10/1/2014 ................................ 800 814
------------
13,025
------------
HOTELS, RESTAURANTS & LEISURE - 4.39%
Cinemark, Inc., Zero Coupon, Due 3/15/2014 # .... 550 518
Host Hotels & Resorts LP, 6.875%,
Due 11/1/2014 ................................ 800 788
Host Marriott LP, 7.125%, Due 11/1/2013 ......... 600 598
MGM Mirage,
6.75%, Due 4/1/2013 .......................... 750 690
6.625%, Due 7/15/2015 ........................ 1,500 1,309
Pinnacle Entertainment, Inc., 8.25%,
Due 3/15/2012 ................................ 100 99
Royal Caribbean Cruises Ltd., 7.25%,
Due 3/15/2018 ................................ 1,200 1,086
San Pasqual Casino Development Group, 8.00%,
Due 9/15/2013 ++ ............................. 1,550 1,445
Station Casinos, Inc., 6.875%, Due 3/1/2016 + ... 1,000 643
Turning Stone Casino Resort, 9.125%,
Due 12/15/2010 ++ ............................ 1,460 1,438
------------
8,614
------------
INDUSTRIALS - 15.27%
Allied Waste North America, Inc., 6.875%,
Due 6/1/2017 ................................. 500 500
Altra Industrial Motion, Inc., 9.00%,
Due 12/1/2011 ................................ 1,100 1,089
Berry Plastics Corp.,
8.875%, Due 9/15/2014 ........................ 500 468
See accompanying notes
55
AMERICAN BEACON HIGH YIELD BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
7.568%, Due 2/15/2015 ++ # ................... $ 450 $ 434
Celestica, Inc., 7.625%, Due 7/1/2013 ........... 200 196
CEVA Group plc, 10.00%, Due 9/1/2014 ++ ......... 1,000 1,030
Clean Harbors, Inc., 11.25%, Due 7/15/2012 ...... 650 692
Coleman Cable, Inc., 9.875%, Due 10/1/2012 ...... 1,000 915
Communications & Power Industries, Inc., 8.00%,
Due 2/1/2012 ................................. 750 739
Crown Americas LLC, 7.75%, Due 11/15/2015 ....... 1,000 1,055
DRS Technologies, Inc.,
6.875%, Due 11/1/2013 ........................ 900 893
7.625%, Due 2/1/2018 ......................... 100 102
Dycom Industries, Inc., 8.125%, Due 10/15/2015 .. 1,000 960
Freescale Semiconductor, Inc.,
8.875%, Due 12/15/2014 ....................... 900 792
9.125%, Due 12/15/2014 ....................... 430 354
GenCorp, Inc., 9.50%, Due 8/15/2013 ............. 1,500 1,507
Goodyear Tire & Rubber Co., 8.663%,
Due 12/1/2009 # .............................. 500 501
Greenbrier Cos., Inc., 8.375%, Due 5/15/2015 .... 800 764
Impress Holdings BV, 5.838%,
Due 9/15/2013 ++ # ........................... 1,400 1,171
Intertape Polymer US, Inc., 8.50%,
Due 8/1/2014 ................................. 1,300 1,144
Noranda Aluminium Holding Corp., 10.488%,
Due 11/15/2014 ++ # .......................... 1,000 800
Nortek, Inc., 8.50%, Due 9/1/2014 ............... 800 586
Nova Chemicals Corp., 7.863%, Due 11/15/2013 # .. 1,070 926
Novelis, Inc., 7.25%, Due 2/15/2015 ............. 1,000 915
Owens-Brockway Glass Containers, Inc., 6.75%,
Due 12/1/2014 ................................ 900 913
Plastipak Holdings, Inc., 8.50%,
Due 12/15/2015 ++ ............................ 1,050 984
RBS Global, Inc., 9.50%, Due 8/1/2014 ........... 1,000 1,000
Sanmina-SCI Corp.,
6.75%, Due 3/1/2013 .......................... 500 453
5.55%, Due 6/15/2014 ++ # .................... 200 185
8.125%, Due 3/1/2016 ......................... 800 736
Smurfit Kappa Funding plc, 7.75%, Due 4/1/2015 .. 1,000 907
Stewart & Stevenson LLC, 10.00%, Due 7/15/2014 .. 1,000 970
Superior Essex Communications, 9.00%,
Due 4/15/2012 ................................ 1,400 1,382
Terex Corp., 8.00%, Due 11/15/2017 .............. 1,000 1,023
TransDigm, Inc., 7.75%, Due 7/15/2014 ........... 900 920
United Rentals North America, Inc.,
6.50%, Due 2/15/2012 ......................... 800 750
7.75%, Due 11/15/2013 ........................ 200 172
WCA Waste Corp., 9.25%, Due 6/15/2014 ........... 1,000 1,010
------------
29,938
------------
MATERIALS - 5.70%
Freeport-McMoRan Copper & Gold, Inc., 8.375%,
Due 4/1/2017 ................................. 1,000 1,105
Hercules, Inc., 6.75%, Due 10/15/2029 ........... 1,750 1,689
Huntsman International LLC, 7.875%,
Due 11/15/2014 ............................... 700 739
Ineos Group Holdings plc, 8.50%,
Due 2/15/2016 + ++ ........................... 1,100 891
See accompanying notes
56
AMERICAN BEACON HIGH YIELD BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
MacDermid, Inc., 9.50%, Due 4/15/2017 ++ ........ $ 900 $ 859
Nalco Co., 8.875%, Due 11/15/2013 ............... 1,100 1,158
Neenah Paper, Inc., 7.375%, Due 11/15/2014 ...... 750 675
Newark Group, Inc., 9.75%, Due 3/15/2014 ........ 2,200 1,749
NewPage Corp., 10.00%, Due 5/1/2012 ++ .......... 1,000 1,068
Phibro Animal Health Corp., 10.00%,
Due 8/1/2013 ++ .............................. 1,250 1,237
------------
11,170
------------
MEDIA - 2.82%
IESY Repository GmbH, 10.375%,
Due 2/15/2015 ++ ............................. 1,500 1,425
Kabel Deutschland GmbH, 10.625%, Due 7/1/2014 ... 1,156 1,202
R.H. Donnelley Corp.,
6.875%, Due 1/15/2013 ........................ 100 64
8.875%, Due 1/15/2016 ........................ 1,400 910
8.875%, Due 10/15/2017 ++ .................... 100 65
Sheridan Group, Inc., 10.25%, Due 8/15/2011 ..... 1,125 1,038
WMG Acquisition Corp., 7.375%, Due 4/15/2014 .... 1,000 830
------------
5,534
------------
RETAIL - 1.40%
Dollar General Corp., 10.625%, Due 7/15/2015 + .. 1,000 995
Jostens IH Corp., 7.625%, Due 10/1/2012 ......... 1,000 995
Susser Holdings LLC, 10.625%, Due 12/15/2013 .... 736 754
------------
2,744
------------
SERVICES - 1.94%
ARAMARK Corp., 8.50%, Due 2/1/2015 .............. 1,000 1,043
Interpublic Group of Cos., Inc., 5.40%,
Due 11/15/2009 + ............................. 1,000 980
Knowledge Learning Corp., 7.75%,
Due 2/1/2015 ++ .............................. 700 672
Valassis Communications, Inc., 8.25%,
Due 3/1/2015 + ............................... 1,250 1,112
------------
3,807
------------
TECHNOLOGY - 1.75%
Alion Science and Technology Corp., 10.25%,
Due 2/1/2015 ................................. 600 382
Amkor Technology, Inc., 7.75%, Due 5/15/2013 .... 850 814
First Data Corp., 9.875%, Due 9/24/2015 + ++ .... 700 637
SunGard Data Systems, Inc.,
9.125%, Due 8/15/2013 ........................ 200 209
10.25%, Due 8/15/2015 + ...................... 1,300 1,381
------------
3,423
------------
TELECOMMUNICATION SERVICES - 3.05%
Block Communications, Inc., 8.25%,
Due 12/15/2015 ++ ............................ 2,000 1,915
Inmarsat Finance plc, Zero Coupon,
Due 11/15/2012 # ............................. 1,000 986
Millicom International Cellular S.A., 10.00%,
Due 12/1/2013 ................................ 500 534
Rural Cellular Corp., 8.25%, Due 3/15/2012 ...... 750 780
Stratos Global Corp., 9.875%, Due 2/15/2013 ..... 750 787
Wind Acquisition Finance S.A., 10.75%,
Due 12/1/2015 ++ ............................. 900 970
------------
5,972
------------
See accompanying notes
57
AMERICAN BEACON HIGH YIELD BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
UTILITIES - 2.46%
AES Corp., 8.00%, Due 10/15/2017 ................ $ 1,100 $ 1,147
Edison Mission Energy, 7.00%, Due 5/15/2017 ..... 2,200 2,222
Texas Competitive Electric Holdings Co. LLC,
10.25%, Due 11/1/2015 ++ ..................... 1,400 1,459
4,828
------------
TOTAL CORPORATE OBLIGATIONS ..................... 183,090
------------
SHARES
----------
SHORT TERM INVESTMENTS - 4.01%
American Beacon Money Market Select Fund
Section ...................................... 7,859,483 7,860
------------
PAR
AMOUNT
----------
SECURITIES LENDING COLLATERAL - 5.80%
AIM Short-Term Investment Company Liquid Asset
Fund, 2.82% .................................. $ 3,371 3,371
Banc of America Securities LLC Repo, 2.508%,
Due 5/1/2008 @ ............................... 8,000 8,000
------------
TOTAL SECURITIES LENDING COLLATERAL ............. 11,371
------------
TOTAL INVESTMENTS - 103.23% (COST $212,439) ........ $ 202,321
LIABILITIES, NET OF OTHER ASSETS - (3.23%) ......... (6,331)
------------
TOTAL NET ASSETS - 100.00% ......................... $ 195,990
============
Percentages are stated as a percent of net assets.
+ All or a portion of this security is on loan at April 30, 2008.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $32,159 or 16.41% of net
assets. The Fund has no right to demand registration of these securities.
# The coupon rate shown on floating or adjustable rate securities represents
the rate at period end. The due date on these types of securities reflects
the final maturity date.
Section The Fund/Trust is affiliated by having the same investment advisor.
@ Held at Bank of New York, Collateralized by Corporate Obligations valued at
$8,160, 2.5075%, 11/15/2014.
See accompanying notes
58
AMERICAN BEACON ENHANCED INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
COMMON STOCKS - 4.86%
CONSUMER DISCRETIONARY - 0.27%
SPECIALTY RETAIL - 0.27%
Nike, Inc. + .................................... 3,890 $ 260
------------
CONSUMER STAPLES - 0.43%
BEVERAGES - 0.43%
Coca-Cola Co. ................................... 7,060 415
------------
FINANCIALS - 0.49%
DIVERSIFIED FINANCIALS - 0.23%
T Rowe Price Group, Inc. ..................... 3,800 223
------------
INSURANCE - 0.26%
AON Corp. + .................................. 5,555 252
------------
TOTAL FINANCIALS 475
------------
HEALTH CARE - 0.71%
BIOTECHNOLOGY - 0.24%
Biogen Idec, Inc. ## + .......................... 3,825 232
------------
OPTICAL SUPPLIES - 0.26%
Alcon, Inc. ..................................... 1,630 258
------------
PHARMACEUTICALS - 0.21%
Merck & Co., Inc. ............................... 5,425 206
------------
TOTAL HEALTH CARE 696
------------
INDUSTRIALS - 1.01%
AEROSPACE & DEFENSE - 0.24%
United Technologies Corp. ....................... 3,250 236
------------
COMMERCIAL SERVICES & SUPPLIES - 0.30%
Apollo Group, Inc. ## + ......................... 2,485 127
ITT Educational Services, Inc. ## + ............. 2,145 164
------------
291
------------
INDUSTRIAL CONGLOMERATES - 0.24%
Honeywell International, Inc. ................... 3,890 231
------------
MACHINERY - 0.23%
Illinois Tool Works, Inc. + ..................... 4,310 225
------------
TOTAL INDUSTRIALS 983
------------
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
INFORMATION TECHNOLOGY - 1.95%
COMMUNICATIONS EQUIPMENT - 0.44%
Cisco Systems, Inc. @@ .......................... 16,780 $ 430
------------
IT CONSULTING & SERVICES - 0.29%
Accenture Ltd. + ................................ 7,470 281
------------
SOFTWARE - 1.22%
Adobe Systems, Inc. @@ .......................... 7,000 261
Electronic Arts, Inc. @@ + ...................... 4,440 228
Microsoft Corp. + ............................... 7,500 214
Oracle Corp. @@ + ............................... 23,200 484
------------
1,187
------------
TOTAL INFORMATION TECHNOLOGY 1,898
------------
TOTAL COMMON STOCKS 4,727
------------
CONVERTIBLE PREFERRED
STOCKS - 1.54%
FINANCIALS - 0.48%
DIVERSIFIED FINANCIALS - 0.48%
Bank of America Corp. ........................... 425 467
------------
HEALTH CARE - 0.33%
PHARMACEUTICALS - 0.33%
Schering-Plough Corp. ........................... 1,785 322
------------
INDUSTRIALS - 0.47%
AUTOMOBILES - 0.24%
General Motors Corp. ............................ 12,630 235
------------
HOUSEHOLD DURABLES - 0.23%
Stanley Works ................................... 255 217
------------
TOTAL INDUSTRIALS 452
------------
MATERIALS - 0.26%
METALS & MINING - 0.26%
Freeport-McMoRan Copper & Gold, Inc. ............ 1,560 254
------------
TOTAL CONVERTIBLE PREFERRED STOCKS 1,495
------------
PREFERRED STOCKS - 0.72%
FINANCIALS - 0.49%
DIVERSIFIED FINANCIALS - 0.49%
Citigroup, Inc. + ............................... 9,250 482
------------
See accompanying notes
59
AMERICAN BEACON ENHANCED INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
INDUSTRIALS - 0.23%
CHEMICALS - 0.23%
Avery Dennison Corp. ............................ 4,600 $ 220
------------
TOTAL PREFERRED STOCKS 702
------------
PAR
AMOUNT
----------
CORPORATE OBLIGATIONS - 29.12%
AEROSPACE & DEFENSE - 0.26%
Raytheon Co.,
5.375%, Due 4/1/2013 ......................... $ 250 255
------------
BANKS - 7.37%
Bank of America Corp.,
7.80%, Due 9/15/2016 ......................... 600 681
6.00%, Due 9/1/2017 .......................... 200 208
Bank One Corp.,
4.90%, Due 4/30/2015 + ....................... 250 242
Citigroup, Inc.,
5.125%, Due 2/14/2011 + ...................... 1,300 1,304
6.125%, Due 11/21/2017 + ..................... 275 279
Credit Suisse First Boston,
6.50%, Due 5/1/2008 + ++ ..................... 500 500
ING Bank, NV,
5.125%, Due 5/1/2015 ++ ...................... 300 293
JP Morgan Chase & Co.,
6.75%, Due 2/1/2011 .......................... 650 678
6.00%, Due 1/15/2018 ......................... 250 259
National City Bank,
4.50%, Due 3/15/2010 ......................... 800 760
Synovus Financial Corp.,
4.875%, Due 2/15/2013 ........................ 250 236
Wachovia Corp.,
5.30%, Due 10/15/2011 ........................ 300 301
Washington Mutual, Inc.,
8.25%, Due 4/1/2010 + ........................ 300 285
4.625%, Due 4/1/2014 ......................... 500 395
Wells Fargo & Co.,
5.25%, Due 10/23/2012 ........................ 460 470
5.625%, Due 12/11/2017 ....................... 275 284
------------
7,175
------------
BEVERAGES - 0.31%
Constellation Brands, Inc.,
7.25%, Due 9/1/2016 300 302
------------
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
COMMUNICATIONS - 1.48%
Comcast Cable Communications Holdings, Inc.,
8.375%, Due 3/15/2013 ........................ $ 500 $ 560
DirecTV Holdings LLC/DirecTV Financing Co.,
8.375%, Due 3/15/2013 ........................ 300 308
Time Warner Cable, Inc.,
5.85%, Due 5/1/2017 .......................... 300 298
Verizon Communications, Inc.,
6.90%, Due 4/15/2038 ......................... 250 271
------------
1,437
------------
CONSUMER DISCRETIONARY - 0.68%
Royal Caribbean Cruises Ltd.,
7.50%, Due 10/15/2027 ........................ 275 238
Wal-Mart Stores, Inc.,
7.55%, Due 2/15/2030 + ....................... 250 289
Wesco Distribution, Inc.,
7.50%, Due 10/15/2017 ........................ 150 136
------------
663
------------
CONSUMER STAPLES - 0.47%
Dole Food Co., Inc.,
8.875%, Due 3/15/2011 + ...................... 92 82
Hanesbrands, Inc.,
8.204%, Due 12/15/2014 # ..................... 140 132
Kellogg Co.,
4.25%, Due 3/6/2013 .......................... 250 246
------------
460
------------
ENERGY - 0.52%
Canadian Natural Resources Ltd.,
6.25%, Due 3/15/2038 ......................... 250 244
EOG Resources, Inc.,
4.75%, Due 3/15/2014 ++ ...................... 250 259
------------
503
------------
FINANCE - 4.23%
American General Finance Corp.,
4.875%, Due 5/15/2010 ........................ 300 298
Capital One Financial Corp.,
5.70%, Due 9/15/2011 ......................... 310 303
General Electric Capital Corp.,
5.65%, Due 6/9/2014 .......................... 500 520
5.625%, Due 5/1/2018 ......................... 250 253
Goldman Sachs Group, Inc.,
4.75%, Due 7/15/2013 ......................... 250 246
6.25%, Due 9/1/2017 .......................... 250 255
HSBC Finance Corp.,
5.25%, Due 1/14/2011 ......................... 1,050 1,055
See accompanying notes
60
AMERICAN BEACON ENHANCED INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
International Lease Finance Corp.,
6.375%, Due 3/15/2009 ........................ $ 725 $ 729
Lehman Brothers Holdings, Inc.,
4.25%, Due 1/27/2010 + ....................... 250 246
Merrill Lynch & Co., Inc.,
6.11%, Due 1/29/2037 ......................... 250 211
------------
4,116
------------
HEALTH CARE - 0.13%
Psychiatric Solutions, Inc.,
7.75%, Due 7/15/2015 ......................... 125 128
------------
INDUSTRIALS - 4.43%
Canadian National Railway Co.,
5.55%, Due 5/15/2018 ......................... 250 254
Caterpillar Financial Services Corp.,
4.15%, Due 1/15/2010 ......................... 300 302
4.25%, Due 2/8/2013 .......................... 250 246
Daimler Finance NA LLC,
5.875%, Due 3/15/2011 ........................ 250 256
5.75%, Due 9/8/2011 .......................... 250 256
Ford Motor Credit Co. LLC,
8.625%, Due 11/1/2010 ........................ 285 271
Gardner Denver, Inc.,
8.00%, Due 5/1/2013 .......................... 300 302
Goodyear Tire & Rubber Co.,
7.857%, Due 8/15/2011 ........................ 300 313
Honeywell International, Inc.,
4.25%, Due 3/1/2013 .......................... 250 248
John Deere Capital Corp.,
4.125%, Due 1/15/2010 + ...................... 750 754
NBTY, Inc.,
7.125%, Due 10/1/2015 ........................ 150 144
Nissan Motor Acceptance Corp.,
5.625%, Due 3/14/2011 ++ ..................... 300 301
Norfolk Southern Corp.,
8.625%, Due 5/15/2010 ........................ 250 271
Terex Corp.,
8.00%, Due 11/15/2017 ........................ 125 128
Union Pacific Corp.,
6.50%, Due 4/15/2012 ......................... 250 265
------------
4,311
------------
INSURANCE - 3.92%
Aegon Funding Corp.,
5.75%, Due 12/15/2020 ......................... 350 328
American International Group, Inc.,
5.85%, Due 1/16/2018 ......................... 250 250
6.25%, Due 5/1/2036 + ........................ 250 244
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
ASIF Global Financing,
3.90%, Due 10/22/2008 ++ ..................... $ 500 $ 498
Hartford Financial Services Group, Inc.,
5.25%, Due 10/15/2011 ........................ 600 608
John Hancock Global Funding II,
7.90%, Due 7/2/2010 ++ ....................... 675 739
Lincoln National Corp.,
4.75%, Due 2/15/2014 ......................... 125 121
MetLife, Inc.,
6.375%, Due 6/15/2034 ........................ 275 272
Metropolitan Life Global Funding I,
4.625%, Due 8/19/2010 ++ ..................... 500 508
Prudential Financial, Inc.,
4.50%, Due 7/15/2013 ......................... 250 244
------------
3,812
------------
INTERNET & CATALOG RETAIL - 0.32%
Expedia, Inc.,
7.456%, Due 8/15/2018 ........................ 300 307
------------
PHARMACEUTICALS - 0.13%
Bristol-Myers Squibb Co.,
5.45%, Due 5/1/2018 .......................... 125 126
------------
REAL ESTATE - 1.09%
iStar Financial, Inc.,
5.85%, Due 3/15/2017 ......................... 400 332
ProLogis Trust,
5.50%, Due 4/1/2012 + ........................ 250 244
5.625%, Due 11/15/2016 ....................... 250 233
Simon Property Group LP,
5.375%, Due 6/1/2011 ......................... 250 250
------------
1,059
------------
TECHNOLOGY - 1.29%
Cisco Systems, Inc.,
5.25%, Due 2/22/2011 ......................... 250 258
Hewlett-Packard Co.,
4.50%, Due 3/1/2013 .......................... 250 252
Sungard Data Systems, Inc.,
9.125%, Due 8/15/2013 ........................ 300 314
Syniverse Technologies, Inc.,
7.75%, Due 8/15/2013 ......................... 325 309
Xerox Corp.,
5.65%, Due 5/15/2013 ......................... 125 125
------------
1,258
------------
TELEPHONE - 1.72%
America Movil, S.A.B. de C.V.,
6.375%, Due 3/1/2035 ......................... 250 245
See accompanying notes
61
AMERICAN BEACON ENHANCED INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
AT&T, Inc.,
5.625%, Due 6/15/2016 ........................ $ 250 $ 254
5.50%, Due 2/1/2018 .......................... 275 275
6.80%, Due 5/15/2036 + ....................... 125 132
Cingular Wireless Services, Inc.,
7.875%, Due 3/1/2011 ......................... 250 270
Verizon Communications, Inc.,
5.50%, Due 4/1/2017 .......................... 250 251
Vodafone Group plc,
6.15%, Due 2/27/2037 + ....................... 250 246
------------
1,673
------------
UTILITIES - 0.77%
Duke Energy Carolinas LLC,
5.10%, Due 4/15/2018 + ....................... 250 248
MidAmerican Energy Holdings Co.,
6.125%, Due 4/1/2036 ......................... 250 250
Virginia Electric and Power Co.,
5.40%, Due 4/30/2018 ......................... 250 248
------------
746
------------
TOTAL CORPORATE OBLIGATIONS 28,331
------------
CONVERTIBLE OBLIGATIONS - 13.11%
BANKS - 0.27%
Bank of America Corp.,
0.25%, Due 2/15/2012 ......................... 270 267
------------
COMMUNICATIONS - 1.73%
Anixter International, Inc.,
1.00%, Due 2/15/2013 ......................... 200 217
Juniper Networks, Inc.,
Zero Coupon, Due 6/15/2008 ................... 292 400
Liberty Media LLC,
0.75%, Due 3/30/2023 + ....................... 320 324
Symantec Corp.,
1.00%, Due 6/15/2013 ......................... 210 227
VeriSign, Inc.,
3.25%, Due 8/15/2037 ++ ...................... 410 511
------------
1,679
------------
CONSUMER DISCRETIONARY - 1.02%
Archer-Daniels-Midland Co.,
0.875%, Due 2/15/2014 ........................ 450 537
Carnival Corp.,
2.00%, Due 4/15/2021 ......................... 416 454
------------
991
------------
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
ENERGY - 2.15%
Cameron International Corp.,
2.50%, Due 6/15/2026 ......................... $ 275 $ 431
Pioneer Natural Resources Co.,
2.875%, Due 1/15/2038 ........................ 235 288
Schlumberger Ltd.,
2.125%, Due 6/1/2023 ......................... 145 367
SESI LLC,
1.50%, Due 12/15/2026 ++ ..................... 270 312
Transocean, Inc.,
1.625%, Due 12/15/2037 ....................... 620 698
------------
2,096
------------
FINANCE - 0.50%
Lehman Brothers Holdings, Inc.,
0.25%, Due 2/16/2012 ......................... 270 259
Nasdaq OMX Group,
2.50%, Due 8/15/2013 ++ ...................... 225 223
------------
482
------------
FINANCIALS - 0.25%
SVB Financial Group,
3.875%, Due 4/15/2011 ++ ..................... 225 246
------------
HEALTH CARE - 0.82%
Hologic, Inc.,
1.00%, Due 12/15/2037 ........................ 345 340
Medtronic, Inc.,
1.50%, Due 4/15/2011 ......................... 280 289
1.625%, Due 4/15/2013 + ...................... 160 165
------------
794
------------
INDUSTRIALS - 1.43%
Alliant Techsystems, Inc.,
2.75%, Due 9/15/2011 ++ ...................... 320 412
Danaher Corp.,
Zero Coupon, Due 1/22/2021 ...................... 205 236
Fisher Scientific International, Inc.,
3.25%, Due 3/1/2024 .......................... 400 624
Lockheed Martin Corp.,
2.815%, Due 8/15/2033 # ...................... 83 121
------------
1,393
------------
PHARMACEUTICALS - 1.78%
Beckman Coulter, Inc.,
2.50%, Due 12/15/2036 + ...................... 203 229
2.50%, Due 12/15/2036 ++ ..................... 210 237
Genzyme Corp.,
1.25%, Due 12/1/2023 + ....................... 200 222
See accompanying notes
62
AMERICAN BEACON ENHANCED INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Gilead Sciences, Inc.,
0.50%, Due 5/1/2011 ++ .......................... $ 360 $ 512
Invitrogen Corp.,
1.50%, Due 2/15/2024 ............................ 246 257
Sciele Pharma, Inc.,
2.625%, Due 5/15/2027 ........................... 30 28
Teva Pharmaceutical Finance LLC,
0.25%, Due 2/1/2026 ............................. 240 250
------------
1,735
------------
REAL ESTATE - 0.25%
GameStop Corp.,
8.00%, Due 10/1/2012 ......................... 225 240
------------
SERVICES - 0.21%
Quanta Services, Inc.,
3.75%, Due 4/30/2026 ++ ...................... 150 204
------------
SOFTWARE - 0.25%
Red Hat, Inc.,
0.50%, Due 1/15/2024 ......................... 240 239
------------
TECHNOLOGY - 2.45%
Avnet, Inc.,
2.00%, Due 3/15/2034 ......................... 210 217
CA, Inc.,
1.625%, Due 12/15/2009 ....................... 190 231
DRS Technologies, Inc.,
2.00%, Due 2/1/2026 ++ ....................... 310 364
EMC Corp.,
1.75%, Due 12/1/2011 + ....................... 490 583
Intel Corp.,
2.95%, Due 12/15/2035 ........................ 486 482
Sybase, Inc.,
1.75%, Due 2/22/2025 ......................... 405 510
------------
2,387
------------
TOTAL CONVERTIBLE OBLIGATIONS 12,753
------------
NON-AGENCY MORTGAGE-BACKED
OBLIGATIONS - 3.16%
COMMERCIAL MORTGAGE-BACKED SECURITY - 3.16%
Banc of America Commercial Mortgage, Inc.,
2005-6 A1, 5.001%, Due 9/10/2047 ............. 545 546
2007-2 A2, 5.634%, Due 4/10/2049 ............. 650 648
JP Morgan Chase Commercial Mortgage
Securities Corp.,
2005-LDP3 A1, 4.655%, Due 8/15/2042 .......... 184 184
2005-LDP4 A1, 4.613%, Due 10/15/2042 ......... 50 50
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
2007-CB19 A4, 5.937%, Due 2/12/2049 .......... $ 400 $ 397
2007-CB20 A2, 5.629%, Due 2/12/2051 .......... 550 547
LB-UBS Commercial Mortgage Trust,
2004-C1 A4, 5.424%, Due 2/15/2040 ............ 450 437
Wachovia Bank Commercial Mortgage Trust,
2007-C32 A2, 5.923%, Due 6/15/2049 ........... 260 261
------------
TOTAL NON-AGENCY MORTGAGE-BACKED OBLIGATIONS 3,070
------------
ASSET-BACKED SECURITIES - 3.90%
American Express Credit Account Master Trust,
2006-2 A, 5.35%, Due 1/15/2014 ............... 1,050 1,071
Capital Auto Receivables Asset Trust,
2006-SN1A A4A, 5.32%, Due 3/20/2010 ++ ....... 900 907
Capital One Multi-Asset Execution Trust,
2006-A10 A10, 5.15%, Due 6/15/2014 ........... 800 808
Volkswagen Auto Loan Enhanced Trust,
2005-1 A4, 4.86%, Due 4/20/2012 .............. 1,000 1,008
------------
TOTAL ASSET-BACKED SECURITIES 3,794
------------
U.S. AGENCY MORTGAGE-BACKED
OBLIGATIONS - 23.40%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 8.08%
5.00%, Due 2/1/2021 ............................. 1,251 1,262
4.50%, Due 4/1/2021 ............................. 1,163 1,151
5.00%, Due 5/1/2021 ............................. 1,184 1,193
5.50%, Due 11/1/2021 ............................ 905 922
5.00%, Due 9/1/2035 ............................. 2,472 2,434
5.50%, Due 4/1/2037 ............................. 892 898
------------
7,860
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 11.49%
6.50%, Due 7/1/2032 ............................. 454 472
5.50%, Due 6/1/2033 ............................. 1,012 1,021
4.50%, Due 9/1/2034 ............................. 452 431
5.50%, Due 12/1/2035 ............................ 1,031 1,038
5.00%, Due 2/1/2036 ............................. 1,671 1,645
5.50%, Due 4/1/2036 ............................. 1,607 1,619
6.00%, Due 9/1/2036 ............................. 1,407 1,441
6.50%, Due 12/1/2036 ............................ 1,207 1,251
5.50%, Due 2/1/2037 ............................. 1,325 1,334
6.00%, Due 9/1/2037 ............................. 906 927
------------
11,179
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 3.83%
4.201%, Due 8/16/2026 ........................... 636 634
6.00%, Due 2/15/2033 ............................ 956 986
5.50%, Due 4/15/2033 ............................ 1,237 1,256
See accompanying notes
63
AMERICAN BEACON ENHANCED INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
5.00%, Due 5/15/2033 ............................ $ 859 $ 853
------------
3,729
------------
TOTAL U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS 22,768
------------
U.S. AGENCY OBLIGATIONS - 8.45%
FEDERAL HOME LOAN BANK - 1.71%
4.50%, Due 9/16/2013 ............................ 1,600 1,661
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 3.04%
5.125%, Due 4/18/2011 + ......................... 1,900 2,009
6.25%, Due 7/15/2032 + .......................... 800 948
------------
2,957
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.70%
7.25%, Due 1/15/2010 ............................ 2,000 2,145
5.375%, Due 6/12/2017 + ......................... 1,350 1,459
------------
3,604
------------
TOTAL U.S. AGENCY OBLIGATIONS 8,222
------------
U.S. TREASURY OBLIGATIONS - 9.59%
4.75%, Due 5/15/2014 + .......................... 3,000 3,261
4.125%, Due 5/15/2015 + ......................... 1,575 1,647
7.875%, Due 2/15/2021 + ......................... 1,400 1,893
6.25%, Due 8/15/2023 + .......................... 650 782
6.875%, Due 8/15/2025 + ......................... 800 1,030
5.25%, Due 11/15/2028 + ......................... 650 713
------------
TOTAL U.S. TREASURY OBLIGATIONS 9,326
------------
SHARES
----------
SHORT TERM INVESTMENTS - 1.57%
American Beacon Money Market Select
Fund Section ................................. 1,527,984 1,528
------------
SECURITIES LENDING
COLLATERAL - 21.71%
American Beacon Cash Plus Trust Section ......... 17,006,200 17,006
American Beacon Money Market Select
Fund Section ................................. 4,115,604 4,116
------------
TOTAL SECURITIES LENDING COLLATERAL 21,122
------------
TOTAL INVESTMENTS 121.13% - (COST $115,883) 117,838
LIABILITIES, NET OF OTHER ASSETS - (21.13%) (20,552)
------------
TOTAL NET ASSETS - 100.00% $ 97,286
============
Percentages are stated as a percent of net assets.
## Non-income producing security.
See accompanying notes
64
AMERICAN BEACON ENHANCED INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
+ All or a portion of this security is on loan at April 30, 2008.
++ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $7,026 or 7.22% of net
assets. The Fund has no right to demand registration of these
securities.
# The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the final maturity date.
Section The Fund/Trust is affiliated by having the same investment advisor.
See accompanying notes
65
AMERICAN BEACON INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
CORPORATE OBLIGATIONS - 24.74%
AEROSPACE & DEFENSE - 0.12%
Raytheon Co., 5.375%, Due 4/1/2013 .............. $ 200 $ 204
------------
BANKS - 5.12%
Bank of America Corp.,
5.375%, Due 6/15/2014 ........................ 145 147
7.80%, Due 9/15/2016 ......................... 500 568
6.00%, Due 9/1/2017 .......................... 200 208
5.75%, Due 12/1/2017 + ....................... 190 194
Bank of New York Mellon Corp., 4.95%,
Due 11/1/2012 ................................ 140 142
Bank One Corp.,
5.90%, Due 11/15/2011 ........................ 440 459
4.90%, Due 4/30/2015 ......................... 200 194
Citigroup, Inc.,
5.125%, Due 2/14/2011 + ...................... 1,200 1,204
6.125%, Due 11/21/2017 ....................... 455 462
Credit Suisse First Boston, 6.50%,
Due 5/1/2008 + ++ ............................ 350 350
ING Bank, NV, 5.125%, Due 5/1/2015 ++ ........... 250 244
JP Morgan Chase & Co.,
6.75%, Due 2/1/2011 .......................... 500 521
6.00%, Due 1/15/2018 ......................... 610 632
National City Bank, 4.50%, Due 3/15/2010 ........ 600 570
Synovus Financial Corp., 4.875%, Due 2/15/2013 .. 200 189
Wachovia Corp.,
5.30%, Due 10/15/2011 ........................ 200 201
5.70%, Due 8/1/2013 .......................... 135 135
5.75%, Due 2/1/2018 + ........................ 145 145
Washington Mutual Finance Corp., 6.875%,
Due 5/15/2011 ................................ 230 240
Washington Mutual, Inc.,
8.25%, Due 4/1/2010 + ........................ 200 190
4.625%, Due 4/1/2014 ......................... 450 356
Wells Fargo & Co.,
5.25%, Due 10/23/2012 ........................ 400 408
4.375%, Due 1/31/2013 ........................ 200 198
5.625%, Due 12/11/2017 ....................... 465 479
------------
8,436
------------
BASIC MATERIALS - 0.13%
Weyerhaeuser Co., 5.95%, Due 11/1/2008 .......... 210 212
------------
COMMUNICATIONS - 1.08%
Comcast Cable Communications Holdings,
Inc., 8.375%, Due 3/15/2013 .................. 450 504
Comcast Corp.,
5.30%, Due 1/15/2014 ......................... 220 217
5.875%, Due 2/15/2018 ........................ 135 134
See accompanying notes
66
AMERICAN BEACON INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
Time Warner Cable, Inc., 5.85%, Due 5/1/2017 .... $ 505 $ 501
Verizon Communications, Inc.,
6.40%, Due 2/15/2038 ......................... 145 148
6.90%, Due 4/15/2038 ......................... 250 271
------------
1,775
------------
CONSUMER DISCRETIONARY - 0.51%
Wal-Mart Stores, Inc.,
4.55%, Due 5/1/2013 .......................... 280 283
7.55%, Due 2/15/2030 ......................... 250 289
6.20%, Due 4/15/2038 ......................... 265 270
------------
842
------------
CONSUMER STAPLES - 0.60%
Archer-Daniels-Midland Co., 6.45%,
Due 1/15/2038 ................................ 140 145
Diageo Capital plc, 5.75%, Due 10/23/2017 ....... 145 148
Dr Pepper Snapple Group, Inc., 6.82%,
Due 5/1/2018 ++ .............................. 140 145
Kellogg Co., 4.25%, Due 3/6/2013 ................ 250 246
Kraft Foods, Inc., 6.50%, Due 8/11/2017 ......... 285 298
------------
982
------------
ELECTRONIC COMPONENTS - 0.09%
Tyco Electronics Group SA, 6.55%,
Due 10/1/2017 ++ ............................. 150 154
------------
ENERGY - 1.26%
Apache Corp., 5.25%, Due 4/15/2013 .............. 360 370
Canadian Natural Resources Ltd.,
6.70%, Due 7/15/2011 ......................... 135 142
5.90%, Due 2/1/2018 .......................... 150 152
6.25%, Due 3/15/2038 ......................... 250 244
Consolidated Natural Gas Co., 6.00%,
Due 10/15/2010 ............................... 175 182
EOG Resources, Inc., 4.75%, Due 3/15/2014 ++ .... 200 207
Marathon Oil Corp.,
6.00%, Due 10/1/2017 ......................... 200 204
6.60%, Due 10/1/2037 + ....................... 80 81
Transocean, Inc., 6.00%, Due 3/15/2018 .......... 290 300
Weatherford International, Inc., 5.95%,
Due 6/15/2012 ................................ 180 187
------------
2,069
------------
FINANCE - 3.85%
American Express Co., 8.15%, Due 3/19/2038 ...... 165 192
American General Finance Corp.,
4.875%, Due 5/15/2010 ........................ 200 199
4.00%, Due 3/15/2011 + ....................... 535 507
American Honda Finance Corp., 4.625%,
Due 4/2/2013 ++ .............................. 350 344
Ameriprise Financial, Inc., 5.35%,
Due 11/15/2010 ............................... 480 485
Bear Stearns Cos., Inc., 7.25%, Due 2/1/2018 .... 145 159
Capital One Financial Corp., 5.70%,
Due 9/15/2011 + .............................. 200 195
Countrywide Home Loans, Inc., 4.00%,
Due 3/22/2011 + .............................. 70 64
See accompanying notes
67
AMERICAN BEACON INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
General Electric Capital Corp.,
4.375%, Due 3/3/2012 ......................... $ 350 $ 348
5.65%, Due 6/9/2014 .......................... 450 468
5.625%, Due 5/1/2018 ......................... 250 253
5.875%, Due 1/14/2038 ........................ 140 133
Goldman Sachs Group, Inc.,
4.75%, Due 7/15/2013 ......................... 300 295
6.25%, Due 9/1/2017 .......................... 200 204
5.95%, Due 1/18/2018 + ....................... 215 215
6.75%, Due 10/1/2037 ......................... 145 142
HSBC Finance Corp., 5.25%, Due 1/14/2011 ........ 800 804
International Lease Finance Corp.,
6.375%, Due 3/15/2009 + ...................... 250 251
5.75%, Due 6/15/2011 ......................... 165 165
Lehman Brothers Holdings, Inc.,
4.25%, Due 1/27/2010 + ....................... 200 197
5.625%, Due 1/24/2013 ........................ 140 138
6.20%, Due 9/26/2014 ......................... 50 50
Merrill Lynch & Co., Inc.,
5.45%, Due 2/5/2013 + ........................ 145 141
6.875%, Due 4/25/2018 ........................ 180 181
6.11%, Due 1/29/2037 ......................... 250 211
------------
6,341
------------
HEALTH CARE - 0.11%
Covidien International Finance SA,
5.45%, Due 10/15/2012 ++ ..................... 120 121
6.00%, Due 10/15/2017 ++ ..................... 60 61
------------
182
------------
INDUSTRIAL - 0.10%
Koninklijke Philips Electronics NV, 5.75%,
Due 3/11/2018 ................................ 165 169
------------
INDUSTRIALS - 2.56%
Burlington Northern Santa Fe Corp., 5.75%,
Due 3/15/2018 + .............................. 350 355
Canadian National Railway Co., 5.55%,
Due 5/15/2018 ................................ 250 254
Caterpillar Financial Services Corp.,
4.15%, Due 1/15/2010 ......................... 200 201
4.85%, Due 12/7/2012 ......................... 185 187
4.25%, Due 2/8/2013 .......................... 250 247
CRH America, Inc., 6.00%, Due 9/30/2016 ......... 315 296
Daimler Finance NA LLC,
5.875%, Due 3/15/2011 ........................ 300 307
5.75%, Due 9/8/2011 .......................... 200 205
Honeywell International, Inc., 4.25%,
Due 3/1/2013 ................................. 250 249
John Deere Capital Corp.,
4.125%, Due 1/15/2010 + ...................... 500 502
See accompanying notes
68
AMERICAN BEACON INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
5.40%, Due 10/17/2011 ........................ $ 235 $ 243
Kraft Foods, Inc., 7.00%, Due 8/11/2037 ......... 135 142
Masco Corp., 6.125%, Due 10/3/2016 .............. 135 126
Nissan Motor Acceptance Corp., 5.625%,
Due 3/14/2011 ++ ............................. 200 200
Norfolk Southern Corp., 5.75%, Due 4/1/2018 ++ .. 350 355
Starbucks Corp., 6.25%, Due 8/15/2017 ........... 135 134
Union Pacific Corp., 6.50%, Due 4/15/2012 + ..... 200 212
------------
4,215
------------
INSURANCE - 2.54%
Aegon Funding Corp., 5.75%, Due 12/15/2020 ...... 200 187
American International Group, Inc.,
5.85%, Due 1/16/2018 ......................... 200 200
6.25%, Due 5/1/2036 .......................... 250 244
ASIF Global Financing, 3.90%,
Due 10/22/2008 ++ ............................ 300 299
Hartford Financial Services Group, Inc.,
5.25%, Due 10/15/2011 ........................ 450 456
5.375%, Due 3/15/2017 ........................ 345 337
John Hancock Global Funding II, 7.90%,
Due 7/2/2010 ++ .............................. 550 602
Lincoln National Corp., 4.75%, Due 2/15/2014 .... 100 97
MetLife, Inc.,
5.375%, Due 12/15/2012 + ..................... 240 246
5.00%, Due 6/15/2015 ......................... 320 318
6.375%, Due 6/15/2034 ........................ 200 198
Metropolitan Life Global Funding I, 4.625%,
Due 8/19/2010 ++ ............................. 400 406
Prudential Financial, Inc.,
4.50%, Due 7/15/2013 ......................... 200 195
5.10%, Due 9/20/2014 + ....................... 280 276
Willis North America, Inc., 6.20%,
Due 3/28/2017 ................................ 130 127
------------
4,188
------------
PHARMACEUTICALS - 0.68%
AstraZeneca plc, 5.40%, Due 9/15/2012 ........... 320 332
Bristol-Myers Squibb Co., 5.45%, Due 5/1/2018 ... 125 126
Hospira, Inc., 6.05%, Due 3/30/2017 ............. 130 127
Schering-Plough Corp., 6.75%, Due 12/1/2033 ..... 185 190
Wyeth Corp., 5.50%, Due 2/1/2014 ................ 335 344
------------
1,119
------------
REAL ESTATE - 0.89%
Equity Residential, 5.125%, Due 3/15/2016 ....... 355 326
iStar Financial, Inc., 5.85%, Due 3/15/2017 + ... 350 291
ProLogis Trust,
5.50%, Due 4/1/2012 .......................... 300 293
5.625%, Due 11/15/2016 ....................... 200 186
Simon Property Group LP,
5.375%, Due 6/1/2011 ......................... 200 200
See accompanying notes
69
AMERICAN BEACON INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
5.75%, Due 12/1/2015 ......................... $ 170 $ 166
------------
1,462
------------
TECHNOLOGY - 0.87%
Cisco Systems, Inc., 5.25%, Due 2/22/2011 ....... 200 207
Computer Sciences Corp.,
5.50%, Due 3/15/2013 ++ ...................... 70 70
6.50%, Due 3/15/2018 ++ ...................... 240 248
Hewlett-Packard Co., 4.50%, Due 3/1/2013 ........ 535 540
Oracle Corp., 4.95%, Due 4/15/2013 + ............ 245 249
Xerox Corp., 5.65%, Due 5/15/2013 ............... 125 125
------------
1,439
------------
TELEPHONE - 1.97%
America Movil, S.A.B. de C.V.,
6.375%, Due 3/1/2035 ......................... 250 245
AT&T, Inc.,
5.10%, Due 9/15/2014 ......................... 655 657
5.625%, Due 6/15/2016 ........................ 200 203
5.50%, Due 2/1/2018 .......................... 300 300
6.80%, Due 5/15/2036 ......................... 125 132
Cingular Wireless Services, Inc.,
7.875%, Due 3/1/2011 ......................... 200 216
8.75%, Due 3/1/2031 .......................... 170 209
Deutsche Telekom AG, 8.00%, Due 6/15/2010 ....... 150 161
Nextel Communications, Inc.,
6.875%, Due 10/31/2013 + ..................... 290 239
Telecom Italia S.p.A., 4.00%, Due 11/15/2008 .... 220 219
Telefonica Emisiones SAU,
5.984%, Due 6/20/2011 ........................ 160 163
Verizon Communications, Inc.,
5.50%, Due 4/1/2017 .......................... 250 251
Vodafone Group plc, 6.15%, Due 2/27/2037 + ...... 250 246
------------
3,241
------------
UTILITIES - 2.26%
Columbus Southern Power Co.,
5.50%, Due 3/1/2013 .......................... 320 324
Dominion Resources, Inc., Series A,
5.60%, Due 11/15/2016 ........................ 135 135
Duke Energy Carolinas LLC,
5.10%, Due 4/15/2018 ......................... 250 248
Duke Energy Indiana, Inc.,
6.05%, Due 6/15/2016 + ....................... 205 208
FPL Group Capital, Inc., 5.625%, Due 9/1/2011 ... 540 561
MidAmerican Energy Holdings Co.,
5.875%, Due 10/1/2012 ........................ 405 422
6.125%, Due 4/1/2036 ......................... 250 250
Public Service Enterprise Group, Inc.,
6.95%, Due 6/1/2012 ......................... 430 457
Southern Power Co., 6.25%, Due 7/15/2012 ........ 270 285
Virginia Electric and Power Co.,
5.40%, Due 4/30/2018 ......................... 250 248
Xcel Energy, Inc., 5.613%, Due 4/1/2017 ......... 581 575
------------
3,713
------------
TOTAL CORPORATE OBLIGATIONS ........................ 40,743
------------
See accompanying notes
70
AMERICAN BEACON INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS - 6.63%
Banc of America Commercial Mortgage, Inc.,
2005-6 A1, 5.001%, Due 9/10/2047 ............ $ 272 $ 273
2007-2 A2, 5.634%, Due 4/10/2049 ............ 450 448
Banc of America Mortgage Securities, Inc.,
2004-8 3A1, 5.25%, Due 10/25/2019 ........... 689 691
Bear Stearns Commercial Mortgage
Securities, Inc.,
2006-T22 A2, 5.631%, Due 4/12/2038 .......... 830 835
2004-PWR5 A4, 4.831%, Due 7/11/2042 ......... 835 815
2005-T20 A2, 5.127%, Due 10/12/2042 ......... 430 431
Chase Mortgage Finance Corp.,
2006-A1 A1, 6.037%, Due 9/25/2036 # ......... 1,065 1,083
Citicorp Mortgage Securities, Inc.,
2006-3 2A1, 5.50%, Due 6/25/2021 ............ 514 519
Citigroup Commercial Mortgage Trust,
2004-C2 A3, 4.38%, Due 10/15/2041 ........... 770 754
Countrywide Home Loan Mortgage Pass Through
Trust, 2007-18 A1, 6.00%, Due 9/25/2037 ..... 836 813
General Electric Capital Commercial Mortgage
Corp., 2003-C2 A2, 4.17%, Due 7/10/2037 ..... 244 242
JP Morgan Chase Commercial Mortgage
Securities Corp.,
2004-CBX A4, 4.529%, Due 1/12/2037 .......... 255 251
2005-LDP3 A1, 4.655%, Due 8/15/2042 ......... 105 105
2005-LDP4 A1, 4.613%, Due 10/15/2042 ........ 28 28
2005-LDP1 A2, 4.625%, Due 3/15/2046 ......... 785 782
2007-CB19 A4, 5.937%, Due 2/12/2049 ......... 300 298
2007-CB20 A2, 5.629%, Due 2/12/2051 ......... 400 398
LB-UBS Commercial Mortgage Trust,
2004-C1 A4, 5.424%, Due 2/15/2040 ........... 300 291
Prime Mortgage Trust,
2005-2, 5.25%, Due 7/25/2020 ................ 621 626
Wachovia Bank Commercial Mortgage Trust,
2007-C32 A2, 5.923%, Due 6/15/2049 .......... 210 210
Wells Fargo Mortgage Backed Securities Trust,
2006-11 A8, 6.00%, Due 9/25/2036 ............ 577 555
2007-7 A1, 6.00%, Due 6/25/2037 ............. 503 479
------------
TOTAL NON-AGENCY MORTGAGE-BACKED OBLIGATIONS ... 10,927
------------
ASSET-BACKED SECURITIES - 1.54%
American Express Credit Account Master Trust,
2006-2 A, 5.35%, Due 1/15/2014 .............. 800 816
Capital Auto Receivables Asset Trust,
2006-SN1A A4A, 5.32%, Due 3/20/2010 ++ ...... 600 605
Capital One Multi-Asset Execution Trust,
2006-A10 A10, 5.15%, Due 6/15/2014 .......... 600 605
Volkswagen Auto Loan Enhanced Trust,
2005-1 A4, 4.86%, Due 4/20/2012 ............. 500 504
------------
TOTAL ASSET-BACKED SECURITIES .................. 2,530
------------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 25.03%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 9.34%
5.50%, Due 9/1/2017 ......................... 193 198
4.50%, Due 3/1/2019 ......................... 573 569
5.00%, Due 10/1/2020 ........................ 562 567
5.00%, Due 7/1/2021 ......................... 481 485
5.50%, Due 11/1/2021 ........................ 377 384
5.00%, Due 11/1/2021 ........................ 84 85
5.50%, Due 4/1/2022 ......................... 40 41
See accompanying notes
71
AMERICAN BEACON INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
------- -------
(DOLLARS IN
THOUSANDS)
5.00%, Due 5/1/2022 ..................................... $ 169 $ 170
5.50%, Due 12/1/2022 .................................... 202 206
6.50%, Due 9/1/2028 ..................................... 82 86
6.00%, Due 8/1/2029 ..................................... 294 303
5.00%, Due 8/1/2033 ..................................... 746 736
5.50%, Due 2/1/2034 ..................................... 1,073 1,083
6.00%, Due 8/1/2034 ..................................... 511 525
6.50%, Due 4/1/2035 ..................................... 43 44
5.00%, Due 8/1/2035 ..................................... 496 489
5.00%, Due 9/1/2035 ..................................... 728 717
5.00%, Due 9/1/2035 ..................................... 412 406
5.50%, Due 11/1/2036 .................................... 794 800
5.897%, Due 12/1/2036 # ................................. 571 584
5.839%, Due 1/1/2037 # .................................. 672 688
5.796%, Due 3/1/2037 # .................................. 525 535
5.256%, Due 4/1/2037 # .................................. 559 569
5.50%, Due 4/1/2037 ..................................... 892 898
5.50%, Due 5/1/2037 ..................................... 1,051 1,059
6.00%, Due 7/1/2037 ..................................... 432 442
6.50%, Due 8/1/2037 ..................................... 37 38
6.00%, Due 12/1/2037 .................................... 402 411
5.00%, Due 3/1/2038 ..................................... 2,299 2,261
-------
15,379
-------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 14.50%
6.50%, Due 2/1/2017 ..................................... 246 256
5.50%, Due 8/1/2017 ..................................... 332 340
5.00%, Due 12/1/2017 .................................... 863 873
4.50%, Due 9/1/2018 ..................................... 600 597
5.50%, Due 11/1/2018 .................................... 162 166
5.50%, Due 12/1/2018 .................................... 148 152
5.00%, Due 3/1/2020 ..................................... 199 201
4.00%, Due 8/1/2020 ..................................... 448 432
5.50%, Due 4/1/2021 ..................................... 18 18
5.50%, Due 11/1/2021 .................................... 43 44
5.00%, Due 3/1/2034 ..................................... 934 921
5.50%, Due 6/1/2034 ..................................... 514 519
4.50%, Due 9/1/2034 ..................................... 301 287
5.50%, Due 2/1/2035 ..................................... 1,153 1,163
5.00%, Due 11/1/2035 .................................... 1,669 1,642
5.50%, Due 12/1/2035 .................................... 421 424
5.50%, Due 1/1/2036 ..................................... 730 735
5.50%, Due 1/1/2036 ..................................... 758 763
5.50%, Due 2/1/2036 ..................................... 907 914
5.00%, Due 3/1/2036 ..................................... 775 763
See accompanying notes
72
AMERICAN BEACON INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
------- -------
(DOLLARS IN
THOUSANDS)
5.50%, Due 3/1/2036 ..................................... $ 628 $ 633
5.50%, Due 4/1/2036 ..................................... 803 809
6.00%, Due 9/1/2036 ..................................... 473 484
6.00%, Due 10/1/2036 .................................... 8 8
5.50%, Due 11/1/2036 .................................... 709 713
6.00%, Due 11/1/2036 .................................... 819 839
6.50%, Due 12/1/2036 .................................... 805 834
6.00%, Due 12/1/2036 .................................... 745 763
5.50%, Due 1/1/2037 ..................................... 1,877 1,889
5.50%, Due 2/1/2037 ..................................... 1,325 1,334
6.50%, Due 8/1/2037 ..................................... 1,136 1,177
6.00%, Due 9/1/2037 ..................................... 1,359 1,391
6.00%, Due 11/1/2037 .................................... 1,679 1,718
5.00%, Due 3/1/2038 ..................................... 70 69
-------
23,871
-------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 1.19%
4.201%, Due 8/16/2026 ................................... 363 362
6.50%, Due 3/15/2028 .................................... 444 463
6.00%, Due 4/15/2031 .................................... 535 553
5.50%, Due 2/20/2034 .................................... 579 587
-------
1,965
-------
TOTAL U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS .............. 41,215
-------
U.S. AGENCY OBLIGATIONS - 15.02%
FEDERAL HOME LOAN BANK - 4.11%
5.00%, Due 10/16/2009 + ................................. 1,005 1,015
5.25%, Due 11/3/2009 .................................... 250 253
4.50%, Due 9/16/2013 .................................... 5,300 5,502
-------
6,770
-------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 6.00%
5.25%, Due 2/24/2011 .................................... 1,260 1,288
5.125%, Due 4/18/2011 ................................... 4,400 4,651
5.40%, Due 3/17/2021 .................................... 965 1,017
6.00%, Due 12/15/2031 ................................... 1,470 1,514
6.25%, Due 7/15/2032 + .................................. 1,200 1,423
-------
9,893
-------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.91%
7.25%, Due 1/15/2010 .................................... 5,000 5,363
5.125%, Due 1/2/2014 .................................... 545 556
5.375%, Due 6/12/2017 + ................................. 2,000 2,162
-------
8,081
-------
TOTAL U.S. AGENCY OBLIGATIONS .............................. 24,744
-------
U.S. TREASURY OBLIGATIONS - 23.03%
4.875%, Due 4/30/2011 + ................................. 1,800 1,925
See accompanying notes
73
AMERICAN BEACON INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR AMOUNT VALUE
----------- --------
(DOLLARS IN
THOUSANDS)
4.50%, Due 3/31/2012 + ............................. $ 4,500 $ 4,777
2.75%, Due 2/28/2013 + ............................. 8,470 8,361
4.75%, Due 5/15/2014 + ............................. 8,380 9,111
4.125%, Due 5/15/2015 + ............................ 3,000 3,137
3.50%, Due 2/15/2018 + ............................. 4,000 3,915
9.125%, Due 5/15/2018 + ............................ 400 573
7.875%, Due 2/15/2021 + ............................ 1,050 1,420
6.25%, Due 8/15/2023 + ............................. 900 1,083
6.875%, Due 8/15/2025 + ............................ 770 991
5.25%, Due 11/15/2028 + ............................ 750 822
5.00%, Due 5/15/2037 + ............................. 1,670 1,810
--------
TOTAL U.S. TREASURY OBLIGATIONS ....................... 37,925
--------
SHARES
-----------
SHORT TERM INVESTMENTS - 3.09%
American Beacon Money Market Select Fund Section ... 5,082,233 5,082
--------
SECURITIES LENDING COLLATERAL - 25.51%
American Beacon Cash Plus Trust Section ............ 33,828,456 33,828
American Beacon Money Market Select Fund Section ... 8,186,691 8,187
--------
TOTAL SECURITIES LENDING COLLATERAL ................ 42,015
--------
TOTAL INVESTMENTS - 124.59% (COST $204,223) ........... $205,181
LIABILITIES, NET OF OTHER ASSETS - (24.59%) ........... (40,494)
--------
TOTAL NET ASSETS - 100.00% ............................ $164,687
========
Percentages are stated as a percent of net assets.
+ All or a portion of this security is on loan at April 30, 2008.
++ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $4,411 or 2.68% of net
assets. The Fund has no right to demand registration of these
securities.
# The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the final maturity date.
Section The Fund/Trust is affiliated by having the same investment advisor.
See accompanying notes
74
AMERICAN BEACON SHORT-TERM BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
CORPORATE OBLIGATIONS - 56.88%
BANKS - 15.60%
Citigroup, Inc.,
4.125%, Due 2/22/2010 ........................ $ 1,000 $ 982
4.625%, Due 8/3/2010 ......................... 1,000 990
Comerica Bank, 6.00%, Due 10/1/2008 ............. 2,200 2,219
HSBC Bank USA, 3.875%, Due 9/15/2009 ............ 2,000 1,991
JP Morgan Chase & Co., 6.75%, Due 2/1/2011 + .... 2,000 2,086
National City Bank, 4.50%, Due 3/15/2010 ........ 2,000 1,901
National Westminster Bank plc, 7.375%, Due
10/1/2009 .................................... 2,000 2,082
Wachovia Corp., 5.30%, Due 10/15/2011 ........... 2,000 2,006
Washington Mutual, Inc., 8.25%, Due 4/1/2010 + .. 2,000 1,900
------------
16,157
------------
COMMUNICATIONS - 1.95%
Comcast Cable Communications Holdings, Inc.,
6.20%, Due 11/15/2008 ........................ 2,000 2,015
------------
FINANCE - 14.89%
Capital One Financial Corp., 5.70%, Due
9/15/2011 .................................... 1,000 976
Countrywide Home Loans, Inc., 3.25%, Due
5/21/2008 + .................................. 2,000 1,995
Credit Suisse USA, Inc., 4.70%, Due 6/1/2009 .... 2,000 2,016
General Electric Capital Corp., 5.875%, Due
2/15/2012 .................................... 3,000 3,141
Goldman Sachs Group, Inc., 6.65%, Due
5/15/2009 .................................... 1,000 1,022
Lehman Brothers Holdings, Inc., 4.25%, Due
1/27/2010 .................................... 1,600 1,574
MBNA Corp., 7.50%, Due 3/15/2012 ................ 2,000 2,194
Merrill Lynch & Co., Inc., 6.00%, Due
2/17/2009 .................................... 2,500 2,507
------------
15,425
------------
INDUSTRIALS - 9.11%
Bunge Limited Finance Corp., 4.375%, Due
12/15/2008 ................................... 1,000 1,002
Caterpillar Financial Services Corp., 4.15%,
Due 1/15/2010 ................................ 2,000 2,014
Daimler Finance NA LLC, 5.75%, Due 9/8/2011 ..... 1,000 1,024
John Deere Capital Corp., 4.125%, Due
1/15/2010 + .................................. 2,500 2,512
Nissan Motor Acceptance Corp., 4.625%, Due
3/8/2010 ++ .................................. 1,000 1,003
Norfolk Southern Corp., 8.625%, Due 5/15/2010 ... 750 814
Northrop Grumman Corp., 7.125%, Due 2/15/2011 ... 1,000 1,066
------------
9,435
------------
INSURANCE - 9.58%
ASIF Global Financing, 3.90%, Due 10/22/2008
++ ........................................... 2,000 1,993
Hartford Financial Services Group, Inc., 5.25%,
Due 10/15/2011 ............................... 700 709
ING Security Life Institutional Funding, 4.25%,
Due 1/15/2010 ++ ............................. 1,500 1,496
John Hancock Global Funding II, 7.90%, Due
7/2/2010 ++ .................................. 2,000 2,190
Metropolitan Life Global Funding I, 4.625%, Due
8/19/2010 ++ ................................. 1,500 1,524
Monumental Global Funding II, 4.625%, Due
3/15/2010 ++ ................................. 1,000 1,006
Pricoa Global Funding 1, 4.20%, Due
1/15/2010 ++ ................................. 1,000 1,001
------------
9,919
------------
See accompanying notes
75
AMERICAN BEACON SHORT-TERM BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
PAR
AMOUNT VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
REAL ESTATE - 0.87%
iStar Financial, Inc., 5.375%, Due 4/15/2010 + .. $ 1,000 $ 900
------------
TELEPHONE - 2.95%
AT&T Corp., 6.00%, Due 3/15/2009 ................ 2,000 2,029
Vodafone Group plc, 5.50%, Due 6/15/2011 ........ 1,000 1,027
------------
3,056
------------
UTILITIES - 1.93%
MidAmerican Energy Holdings Co., 3.50%, Due
5/15/2008 .................................... 2,000 2,000
------------
TOTAL CORPORATE OBLIGATIONS...................... 58,907
------------
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS - 1.94%
Banc of America Commercial Mortgage, Inc.,
2005-6 A1, 5.001%, Due 9/10/2047 ............. 545 546
2007-2 A2, 5.634%, Due 4/10/2049 ............. 800 797
Wachovia Bank Commercial Mortgage Trust,
2006-C23 A1, 5.203%, Due 1/15/2045 ........... 664 665
------------
TOTAL NON-AGENCY MORTGAGE-BACKED OBLIGATIONS .... 2,008
------------
ASSET-BACKED SECURITIES - 18.46%
Banc of America Securities Auto Trust, 2005-WF1
A4, 4.08%, Due 4/18/2010 ..................... 3,000 3,007
Capital Auto Receivables Asset Trust,
2006-SN1A A4A, 5.32%, Due 3/20/2010 ++ ....... 2,000 2,017
2006-1 A4, 5.04%, Due 5/17/2010 .............. 250 252
CarMax Auto Owner Trust, 2005-3 A4, 4.91%, Due
1/18/2011 .................................... 1,200 1,211
Chase Manhattan Auto Owner Trust, 2006-A A4,
5.36%, Due 1/15/2013 ......................... 2,000 2,030
DaimlerChrysler Auto Trust, 2004-C A4, 3.28%,
Due 12/8/2009 ................................ 996 996
Harley-Davidson Motorcycle Trust, 2007-3 A4,
5.52%, Due 11/15/2013 ........................ 2,000 2,023
HSBC Automotive Trust, 2005-1 A4, 4.35%, Due
6/18/2012 .................................... 3,000 3,009
USAA Auto Owner Trust, 2007-1 A4, 5.55%, Due
2/15/2013 .................................... 3,000 3,055
Volkswagen Auto Loan Enhanced Trust, 2005-1 A4,
4.86%, Due 4/20/2012 ......................... 1,500 1,512
------------
TOTAL ASSET-BACKED SECURITIES ................... 19,112
------------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 2.64%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 2.64%
4.968%, Due 9/15/2008 ........................ 913 919
4.201%, Due 8/16/2026 ........................ 1,816 1,810
------------
TOTAL U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS ... 2,729
------------
U.S. AGENCY OBLIGATIONS - 4.96%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.96%
4.75%, Due 11/3/2009 + .......................... 5,000 5,134
U.S. TREASURY OBLIGATIONS - 11.76%
3.125%, Due 11/30/2009 + ........................ 12,000 12,176
------------
See accompanying notes
76
AMERICAN BEACON SHORT-TERM BOND FUND
SCHEDULE OF INVESTMENTS
April 30, 2008 (Unaudited)
SHARES VALUE
---------- ------------
(DOLLARS IN THOUSANDS)
SHORT TERM INVESTMENTS - 2.91%
American Beacon Money Market Select Fund # ...... 3,016,556 $ 3,017
------------
SECURITIES LENDING COLLATERAL - 20.20%
American Beacon Cash Plus Trust # ............... 16,845,535 16,845
American Beacon Money Market Select Fund # ...... 4,076,722 4,077
------------
TOTAL SECURITIES LENDING COLLATERAL ............. 20,922
------------
TOTAL INVESTMENTS - 119.75% (COST $123,654)......... $ 124,005
LIABILITIES, NET OF OTHER ASSETS - (19.75%)......... (20,450)
------------
TOTAL NET ASSETS - 100.00% $ 103,555
============
Percentages are stated as a percent of net assets.
+ All or a portion of this security is on loan at April 30, 2008.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $12,230 or 11.81% of net
assets. The Fund has no right to demand registration of these securities.
# The Fund/Trust is affiliated by having the same investment advisor.
See accompanying notes
77
AMERICAN BEACON FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED) (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
SMALL CAP
VALUE EMERGING
BALANCED LARGE CAP MID-CAP OPPORTUNITY MARKETS
FUND GROWTH FUND VALUE FUND FUND FUND
----------- ----------- ---------- ----------- -----------
ASSETS:
Investments in unaffiliated securities, at value(A, D).. $ 1,006,540 $ 81,612 $ 86,144 $ 8,660 $ 199,285
Investments in affiliated securities, at value(B) ...... 229,349 23,410 20,995 1,999 26,983
Foreign currency, at value(C)........................... -- -- -- -- 2,406
Cash ................................................... -- -- -- -- --
Receivable for investments sold ........................ 3,524 878 335 237 1,754
Dividends and interest receivable ...................... 4,698 53 68 8 545
Receivable for fund shares sold ........................ 89 67 97 -- 16
Receivable for tax reclaims ............................ 5 -- -- -- 20
Receivable for expense reimbursement ................... -- -- -- 10 --
Prepaid expenses ....................................... 27 1 32 -- 16
----------- ----------- ---------- -------- -----------
TOTAL ASSETS ........................................ 1,244,232 106,021 107,671 10,914 231,025
----------- ----------- ---------- -------- -----------
LIABILITIES:
Payable for investments purchased ...................... 2,985 777 269 262 1,352
Payable upon return of securities loaned ............... 195,104 20,614 13,536 1,818 17,904
Payable for fund shares redeemed ....................... 877 30 181 1 272
Payable for variation margin on open futures
contracts ........................................... 139 11 10 -- 46
Dividends payable ...................................... -- -- -- -- --
Payable under excess expense reimbursement plan ........ -- -- -- -- 4
Management and investment advisory fees payable (Note 2) 692 132 185 15 536
Administrative service and service fees payable ........ 80 -- 12 2 6
Other liabilities ...................................... 157 30 38 9 77
----------- ----------- ---------- -------- -----------
TOTAL LIABILITIES ................................... 200,034 21,594 14,231 2,107 20,197
----------- ----------- ---------- -------- -----------
NET ASSETS ................................................ $ 1,044,198 $ 84,427 $ 93,440 $ 8,807 $ 210,828
=========== =========== ========== ======== ===========
ANALYSIS OF NET ASSETS:
Paid-in-capital ........................................... 984,484 84,891 105,034 13,349 157,811
Undistributed net investment income ....................... 9,527 202 360 37 1,061
Accumulated net realized gain (loss) ..................... (15,626) (4,928) (1,502) (3,372) 21,749
Unrealized appreciation (depreciation) of investments,
futures contracts, and foreign currency ................ 65,813 4,262 (10,452) (1,207) 30,207
----------- ----------- ---------- -------- -----------
NET ASSETS ................................................ $ 1,044,198 $ 84,427 $ 93,440 $ 8,807 $ 210,828
=========== =========== ========== ======== ===========
Shares outstanding (no par value):
Institutional Class .................................... 3,586,310 17,736 574,591 992,486 638,212
=========== =========== ========== ======== ===========
PlanAhead Class ........................................ 12,725,951 N/A 3,580,512 11,180 679,104
=========== =========== ========== ======== ===========
Service Class .......................................... 777,373 N/A 92 N/A N/A
=========== =========== ========== ======== ===========
AMR Class .............................................. 61,445,761 12,670,060 6,248,897 N/A 10,383,205
=========== =========== ========== ======== ===========
Net asset value, offering and redemption price per share:
Institutional Class .................................... $ 13.92 $ 6.62 $ 8.97 $ 8.77 $ 17.94
=========== =========== ========== ======== ===========
PlanAhead Class ........................................ $ 12.99 N/A $ 8.94 $ 8.74 $ 17.68
=========== =========== ========== ======== ===========
Service Class .......................................... $ 12.83 N/A $ 8.89 N/A N/A
=========== =========== ========== ======== ===========
AMR Class .............................................. $ 13.33 $ 6.65 $ 9.01 N/A $ 18.05
=========== =========== ========== ======== ===========
A Cost of investments in unaffiliated securities .......... $ 941,987 $ 77,407 $ 97,145 $ 9,866 $ 169,488
B Cost of investments in affiliated securities ............ $ 229,349 $ 23,410 $ 20,995 $ 1,999 $ 26,983
C Cost of foreign currency ................................ $ -- $ -- $ -- $ -- $ 2,412
D Market value of securities on loan ...................... $ 195,930 $ 21,087 $ 14,184 $ 1,766 $ 18,127
See accompanying notes
78
ENHANCED
HIGH YIELD INCOME INTERMEDIATE SHORT-TERM
BOND FUND FUND BOND FUND BOND FUND
----------- ---------- ------------ -----------
ASSETS:
Investments in unaffiliated securities, at value(A, D).. $ 194,461 $ 95,188 $ 158,084 $ 100,066
Investments in affiliated securities, at value(B) ...... 7,860 22,650 47,097 23,939
Foreign currency, at value(C) .......................... -- -- -- --
Cash ................................................... 7 -- -- --
Receivable for investments sold ........................ 1,074 96 244 --
Dividends and interest receivable ...................... 4,346 828 1,522 1,043
Receivable for fund shares sold ........................ 620 172 555 74
Receivable for tax reclaims ............................ -- 1 1 --
Receivable for expense reimbursement ................... -- -- -- --
Prepaid expenses ....................................... 17 2 11 17
----------- ---------- ----------- -----------
TOTAL ASSETS ........................................ 208,385 118,937 207,514 125,139
----------- ---------- ----------- -----------
LIABILITIES:
Payable for investments purchased ...................... 369 374 590 --
Payable upon return of securities loaned ............... 11,387 21,122 42,015 20,922
Payable for fund shares redeemed ....................... 155 -- 161 579
Payable for variation margin on open futures
contracts ........................................... -- -- -- --
Dividends payable ...................................... 91 -- 1 34
Payable under excess expense reimbursement plan ........ -- -- -- --
Management and investment advisory fees payable (Note 2) 278 88 33 23
Administrative service and service fees payable ........ 25 37 -- 4
Other liabilities ...................................... 90 30 27 22
----------- ---------- ----------- -----------
TOTAL LIABILITIES ................................... 12,395 21,651 42,827 21,584
----------- ---------- ----------- -----------
NET ASSETS ................................................ $ 195,990 $ 97,286 $ 164,687 $ 103,555
=========== ========== =========== ===========
ANALYSIS OF NET ASSETS:
Paid-in-capital ........................................... 210,336 95,018 170,529 110,476
Undistributed net investment income ....................... 503 (450) 502 (19)
Accumulated net realized gain (loss) ..................... (4,731) 763 (7,302) (7,253)
Unrealized appreciation (depreciation) of investments,
futures contracts, and foreign currency ................ (10,118) 1,955 958 351
----------- ---------- ----------- -----------
NET ASSETS ................................................ $ 195,990 $ 97,286 $ 164,687 $ 103,555
=========== ========== =========== ===========
Shares outstanding (no par value):
Institutional Class .................................... 10,170,035 N/A 15,960,325 11,092,966
=========== ========== =========== ===========
PlanAhead Class ........................................ 3,244,568 9,648,659 N/A 650,001
=========== ========== =========== ===========
Service Class .......................................... N/A N/A N/A N/A
=========== ========== =========== ===========
AMR Class .............................................. 6,972,368 N/A N/A N/A
=========== ========== =========== ===========
Net asset value, offering and redemption price per share:
Institutional Class .................................... $ 9.61 N/A $ 10.32 $ 8.82
=========== ========== =========== ===========
PlanAhead Class ........................................ $ 9.62 $ 10.08 N/A $ 8.83
=========== ========== =========== ===========
Service Class .......................................... N/A N/A N/A N/A
=========== ========== =========== ===========
AMR Class .............................................. $ 9.61 N/A N/A N/A
=========== ========== =========== ===========
- ----------
(A) Cost of investments in unaffiliated securities .......... $ 204,579 $ 93,233 $ 157,126 $ 99,715
(B) Cost of investments in affiliated securities ............ $ 7,860 $ 22,650 $ 47,097 $ 23,939
(C) Cost of foreign currency ................................ $ -- $ -- $ -- $ --
(D) Market value of securities on loan ...................... $ 11,141 $ 20,707 $ 41,361 $ 20,518
See accompanying notes
79
AMERICAN BEACON FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (IN THOUSANDS) (UNAUDITED)
LARGE CAP
BALANCED GROWTH MID-CAP
FUND FUND VALUE FUND
-------- --------- ----------
INVESTMENT INCOME:
Dividend income from unaffiliated securities
(net of foreign taxes) (A) ..................... $ 8,042 $ 569 $ 1,036
Dividend income from affiliated securities ......... 871 86 108
Interest income .................................... 10,682 2 15
Income derived from securities lending, net ........ 717 52 50
-------- -------- --------
TOTAL INVESTMENT INCOME ......................... 20,312 709 1,209
-------- -------- --------
EXPENSES:
Management and investment advisory fees (Note 2) ... 1,475 237 339
Administrative service fees (Note 2):
Institutional Class ............................. 61 -- 7
PlanAhead Class ................................. 221 -- 38
Service Class ................................... 13 -- --
Transfer agent fees:
Institutional Class ............................. 3 -- --
PlanAhead Class ................................. 13 -- 1
AMR Class ....................................... 17 -- 8
Custody and fund accounting fees ................... 42 4 4
Professional fees .................................. 22 13 12
Registration fees and expenses ..................... 30 -- 13
Service fees (Note 2):
PlanAhead Class ................................. 221 -- 38
Service Class ................................... 13 -- --
Distribution fees- Service Class (Note 2) .......... 13 -- --
Prospectus and shareholder reports ................. 19 4 5
Other expenses ..................................... 43 3 5
-------- -------- --------
TOTAL EXPENSES .................................. 2,206 261 470
-------- -------- --------
Net (fees waived and expenses reimbursed)/
recouped by Manager (Note 2) .................... -- -- (12)
-------- -------- --------
NET EXPENSES .................................... 2,206 261 458
-------- -------- --------
NET INVESTMENT INCOME ................................. 18,106 448 751
-------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from: (B)
Investments ..................................... (6,289) (3,519) 18
Commission recapture (Note 1) ................... 3 4 9
Foreign currency transactions ................... -- -- --
Futures contracts ............................... (3,763) (1,079) (1,123)
Change in net unrealized appreciation or
depreciation of: (C)
Investments ..................................... (76,761) (7,280) (12,896)
Foreign currency translations ................... -- -- --
Futures contracts ............................... (753) 23 450
-------- -------- --------
NET GAIN (LOSS) ON INVESTMENTS ............... (87,563) (11,851) (13,542)
-------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS .................................... $(69,457) $(11,403) $(12,791)
======== ======== ========
- ----------
(A) Foreign taxes ..................................... $ -- $ -- $ 3
(B) Net of foreign withholding taxes on capital
gains ............................................. $ -- $ -- $ --
(C) Net of unrealized appreciation of foreign
withholding taxes on capital gains ................ $ -- $ -- $ --
See accompanying notes
80
SMALL CAP HIGH
VALUE EMERGING YIELD ENHANCED
OPPORTUNITY MARKETS BOND INCOME INTERMEDIATE SHORT-TERM
FUND FUND FUND FUND BOND FUND BOND FUND
----------- -------- -------- -------- ------------ ----------
INVESTMENT INCOME:
Dividend income from unaffiliated securities
(net of foreign taxes) (A) ..................... $ 108 $ 2,358 $ -- $ 83 $ -- $ --
Dividend income from affiliated securities ......... 1 270 164 63 172 206
Interest income .................................... -- 10 8,157 1,994 3,123 2,143
Income derived from securities lending, net ........ 11 96 34 68 131 36
------- -------- -------- ------- ------- -------
TOTAL INVESTMENT INCOME ......................... 120 2,734 8,355 2,208 3,426 2,385
------- -------- -------- ------- ------- -------
EXPENSES:
Management and investment advisory fees (Note 2) ... 27 973 491 169 171 123
Administrative service fees (Note 2):
Institutional Class ............................. 12 14 120 -- -- --
PlanAhead Class ................................. -- 14 30 120 -- 6
Service Class ................................... -- -- -- -- -- --
Transfer agent fees:
Institutional Class ............................. 1 1 36 -- 3 --
PlanAhead Class ................................. -- 5 4 2 -- 2
AMR Class ....................................... -- 5 16 -- -- --
Custody and fund accounting fees ................... -- 383 11 6 8 6
Professional fees .................................. 12 14 16 13 15 12
Registration fees and expenses ..................... 16 14 14 9 11 14
Service fees (Note 2):
PlanAhead Class ................................. -- 14 30 121 -- 6
Service Class ................................... -- -- -- -- -- --
Distribution fees- Service Class (Note 2) .......... -- -- -- -- -- --
Prospectus and shareholder reports ................. -- 3 17 5 2 2
Other expenses ..................................... 1 9 7 3 3 8
------- -------- -------- ------- ------- -------
TOTAL EXPENSES .................................. 69 1,449 792 448 213 179
------- -------- -------- ------- ------- -------
Net (fees waived and expenses reimbursed)/
recouped by Manager (Note 2) .................... (18) -- -- -- -- (1)
------- -------- -------- ------- ------- -------
NET EXPENSES .................................... 51 1,449 792 448 213 178
------- -------- -------- ------- ------- -------
NET INVESTMENT INCOME ................................. 69 1,285 7,563 1,760 3,213 2,207
------- -------- -------- ------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from: (B)
Investments ..................................... (3,037) 23,832 (2,816) 939 1,559 106
Commission recapture (Note 1) ................... 1 -- -- -- -- --
Foreign currency transactions ................... -- 2,618 -- -- -- --
Futures contracts ............................... -- (3,368) -- -- -- --
Change in net unrealized appreciation or
depreciation of: (C)
Investments ..................................... 521 (56,898) (7,368) (1,527) 749 212
Foreign currency translations ................... -- (4,986) -- -- -- --
Futures contracts ............................... -- 227 -- -- -- --
------- -------- -------- ------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS ............... (2,515) (38,575) (10,184) (588) 2,308 318
------- -------- -------- ------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS .................................... $(2,446) $(37,290) $ (2,621) $ 1,172 $ 5,521 $ 2,525
======= ======== ======== ======= ======= =======
- ----------
(A) Foreign taxes ..................................... $ -- $ 236 $ -- $ -- $ -- $ --
(B) Net of foreign withholding taxes on capital
gains ............................................. $ -- $ 68 $ -- $ -- $ -- $ --
(C) Net of unrealized appreciation of foreign
withholding taxes on capital gains ................ $ -- $ (122) $ -- $ -- $ -- $ --
See accompanying notes
81
AMERICAN BEACON FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (IN THOUSANDS)
Balanced Fund Large Cap Growth Fund Mid-Cap Value Fund
------------------------ ------------------------ ------------------------
Six Six Six
Months Year Months Year Months Year
Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31,
2008 2007 2008 2007 2008 2007
----------- ----------- ----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited)
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income ...... $ 18,106 $ 33,625 $ 448 $ 815 $ 751 $ 1,701
Net realized gain (loss)
on investments, futures
contracts, and foreign
currency transactions ... (10,049) 60,813 (4,594) 6,273 (1,096) 7,903
Change in net unrealized
appreciation or
depreciation of
investments, futures
contracts, and foreign
currency translations ... (77,514) 2,006 (7,257) 4,085 (12,446) (3,979)
---------- ---------- -------- -------- -------- --------
NET INCREASE
(DECREASE)
IN NET ASSETS
RESULTING
FROM OPERATIONS ... (69,457) 96,444 (11,403) 11,173 (12,791) 5,625
---------- ---------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Institutional Class ..... (1,424) (762) (1) (1) (84) (22)
PlanAhead Class ......... (5,471) (3,106) -- -- (326) (206)
Service Class ........... (318) (43) -- -- -- --
AMR Class ............... (27,782) (23,927) (791) (737) (1,140) (563)
Net realized gain on
investments:
Institutional Class ..... (2,559) (1,300) (3) -- (405) (86)
PlanAhead Class ......... (10,490) (5,825) -- -- (2,179) (706)
Service Class ........... (602) (77) -- -- -- --
AMR Class ............... (45,704) (38,430) (2,748) -- (4,985) (1,766)
---------- ---------- -------- -------- -------- --------
NET DISTRIBUTIONS TO
SHAREHOLDERS ...... (94,350) (73,470) (3,543) (738) (9,119) (3,349)
---------- ---------- -------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of
shares .................. 51,670 239,343 21,836 44,637 18,224 85,804
Reinvestment of dividends
and distributions ....... 93,808 72,959 3,543 738 9,098 3,346
Cost of shares redeemed .... (99,710) (126,358) (27,823) (36,145) (39,996) (60,513)
Redemption fees ............ -- -- -- -- 24 161
---------- ---------- -------- -------- -------- --------
NET INCREASE
(DECREASE)
IN NET ASSETS FROM
CAPITAL SHARE
TRANSACTIONS ...... 45,768 185,944 (2,444) 9,230 (12,650) 28,798
---------- ---------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN
NET ASSETS ................. (118,039) 208,918 (17,390) 19,665 (34,560) 31,074
---------- ---------- -------- -------- -------- --------
NET ASSETS:
Beginning of period ........ 1,162,237 953,319 101,817 82,152 128,000 96,926
---------- ---------- -------- -------- -------- --------
END OF PERIOD * ............ $1,044,198 $1,162,237 $ 84,427 $101,817 $ 93,440 $128,000
========== ========== ======== ======== ======== ========
*Includes undistributed net
investment income
(loss) of .................. $ 9,527 $ 26,249 $ 202 $ 552 $ 360 $ 1,243
========== ========== ======== ======== ======== ========
See accompanying notes
82
Small Cap Value
Opportunity Fund Emerging Markets Fund High Yield Bond Fund Enhanced Income Fund
------------------------ ------------------------ ------------------------ ------------------------
Six Six Six Six
Months Year Months Year Months Year Months Year
Ended Ended Ended Ended Ended Ended Ended Ended
April 30, October 31, April 30, October 31, April 30, October 31, April 30, October 31,
2008 2007 2008 2007 2008 2007 2008 2007
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income ...... $ 69 $ 148 $ 1,285 $ 2,414 $ 7,563 $ 22,739 $ 1,760 $ 3,774
Net realized gain (loss)
on investments, futures
contracts, and foreign
currency transactions ... (3,036) (371) 23,082 43,507 (2,816) 1,834 939 2,870
Change in net unrealized
appreciation or
depreciation of
investments, futures
contracts, and foreign
currency translations ... 521 (1,878) (61,657) 55,340 (7,368) (3,549) (1,527) 212
-------- ------- -------- -------- -------- --------- -------- --------
NET INCREASE
(DECREASE)
IN NET ASSETS
RESULTING
FROM OPERATIONS ... (2,446) (2,101) (37,290) 101,261 (2,621) 21,024 1,172 6,856
-------- ------- -------- -------- -------- --------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Institutional Class ..... (134) (17) (58) (101) (3,758) (16,871) -- --
PlanAhead Class ......... (1) -- (43) (15) (903) (4,915) (2,888) (4,171)
Service Class ........... -- -- -- -- -- -- -- --
AMR Class ............... -- -- (2,023) (1,130) (2,902) (949) -- --
Net realized gain on
investments:
Institutional Class ..... -- (9) (2,019) (2,407) -- -- -- --
PlanAhead Class ......... -- -- (1,876) (922) -- -- (2,097) (74)
Service Class ........... -- -- -- -- -- -- -- --
AMR Class ............... -- -- (39,911) (19,268) -- -- -- --
-------- ------- -------- -------- -------- --------- -------- --------
NET DISTRIBUTIONS TO
SHAREHOLDERS ...... (135) (26) (45,930) (23,843) (7,563) (22,735) (4,985) (4,245)
-------- ------- -------- -------- -------- --------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of
shares .................. 915 29,224 21,807 87,824 47,032 209,900 8,664 15,667
Reinvestment of dividends
and distributions ....... 135 26 45,849 23,764 6,672 19,203 4,997 4,245
Cost of shares redeemed .... (19,349) (2,199) (70,908) (49,405) (73,521) (313,378) (12,351) (48,649)
Redemption fees ............ -- -- 107 53 -- -- -- --
-------- ------- -------- -------- -------- --------- -------- --------
NET INCREASE
(DECREASE)
IN NET ASSETS FROM
CAPITAL SHARE
TRANSACTIONS ...... (18,299) 27,051 (3,145) 62,236 (19,817) (84,275) 1,310 (28,737)
-------- ------- -------- -------- -------- --------- -------- --------
NET INCREASE (DECREASE) IN
NET ASSETS ................. (20,880) 24,924 (86,365) 139,654 (30,001) (85,986) (2,503) (26,126)
-------- ------- -------- -------- -------- --------- -------- --------
NET ASSETS:
Beginning of period ........ 29,687 4,763 297,193 157,539 225,991 311,977 99,789 125,915
-------- ------- -------- -------- -------- --------- -------- --------
END OF PERIOD * ............ $ 8,807 $29,687 $210,828 $297,193 $195,990 $ 225,991 $ 97,286 $ 99,789
======== ======= ======== ======== ======== ========= ======== ========
*Includes undistributed net
investment income
(loss) of .................. $ 37 $ 126 $ 1,061 $ 2,180 $ 503 $ 503 $ (450) $ 575
======== ======= ======== ======== ======== ========= ======== ========
See accompanying notes
83
AMERICAN BEACON FUNDS
STATEMENTS OF CHANGES IN NEW ASSETS (IN THOUSANDS)
Intermediate Bond Fund Short-Term Bond Fund
------------------------- -------------------------
Six Months Six Months Year
Ended Year Ended Ended Ended
April 30, October 31, April 30, October 31,
2008 2007 2008 2007
----------- ----------- ----------- -----------
(unaudited) (unaudited)
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................. $ 3,213 $ 4,932 $ 2,207 $ 3,893
Net realized gain on investments, futures contracts,
and foreign currency transactions .................. 1,559 280 106 237
Change in net unrealized appreciation or
depreciation of investments, futures contracts,
and foreign currency translations .................. 749 560 212 624
--------- --------- --------- ---------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ......................................... 5,521 5,772 2,525 4,754
--------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Institutional Class ................................ (3,215) (4,946) (2,305) (4,046)
PlanAhead Class .................................... -- (13) (97) (227)
--------- --------- --------- ---------
NET DISTRIBUTIONS TO SHAREHOLDERS .................. (3,215) (4,959) (2,402) (4,273)
--------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sales of shares ......................... 78,491 26,882 24,071 22,984
Reinvestment of dividends and distributions ........... 3,213 4,957 2,347 4,264
Cost of shares redeemed ............................... (28,997) (21,223) (15,389) (15,932)
--------- --------- --------- ---------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS ....................................... 52,707 10,616 11,029 11,316
--------- --------- --------- ---------
NET INCREASE IN NET ASSETS ............................... 55,013 11,429 11,152 11,797
--------- --------- --------- ---------
NET ASSETS:
Beginning of period ................................ 109,674 98,245 92,403 80,606
--------- --------- --------- ---------
END OF PERIOD * .................................... $ 164,687 $ 109,674 $ 103,555 $ 92,403
========= ========= ========= =========
*Includes undistributed net investment income (loss) of .. $ 502 $ 502 $ (19) $ 19
========= ========= ========= =========
See accompanying notes
84
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
American Beacon Funds (the "Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940 (the
"Act"), as amended, as a no load, diversified, open-end management investment
company. These financial statements and notes to the financial statements relate
to the American Beacon Balanced Fund, the American Beacon Large Cap Growth Fund,
the American Beacon Mid-Cap Value Fund, the American Beacon Small Cap Value
Opportunity Fund, the American Beacon Emerging Markets Fund, the American Beacon
High Yield Bond Fund, the American Beacon Enhanced Income Fund, the American
Beacon Intermediate Bond Fund and the American Beacon Short-Term Bond Fund (each
a "Fund" and collectively, the "Funds"), each a series of the Trust.
American Beacon Advisors, Inc. (the "Manager"), is a wholly-owned
subsidiary of AMR Corporation ("AMR"), the parent company of American Airlines,
Inc. ("American"), and was organized in 1986 to provide business management,
advisory, administrative and asset management consulting services to the Trust
and other investors.
On April 16, 2008, AMR announced that it has reached a definitive agreement
to sell American Beacon Advisors, Inc. to Lighthouse Holdings, Inc., which is
owned by investment funds affiliated with Pharos Capital Group, LLC and TPG
Capital, two leading private equity firms. AMR expects to close the sale later
this year, subject to customary closing conditions as well as the approval of
the shareholders of the American Beacon family of mutual funds and consents from
other clients of the Manager.
Class Disclosure
Each Fund, except the Enhanced Income Fund, has multiple classes of shares
designed to meet the needs of different groups of investors; however, not all
Funds offer all classes. The following table sets forth the differences amongst
the classes:
CLASS: OFFERED TO: SERVICE AND DISTRIBUTIONS FEES:
- ------------------- -------------------------------------------------------------- ---------------------------------
INSTITUTIONAL CLASS Investors making an initial investment of $2 million Administrative Service Fee - 0.25%
PLANAHEAD CLASS General public and investors investing through an intermediary Administrative Service Fee - 0.25%
Service Fee - 0.25%
SERVICE CLASS Investors investing through an intermediary Administrative Service Fee - 0.25%
Service Fee - 0.25%
Distribution Fee - 0.25%
AMR CLASS Investors in the tax-exempt retirement and benefit plans of
AMR Corporation and its affiliates
N/A
Investment income, net capital gains (losses) and all expenses incurred by
the Funds are allocated based on the relative net assets of each class, except
for service fees and certain other fees and expenses related solely to one class
of shares.
Effective February 28, 2007, the PlanAhead Class of the Intermediate Bond
Fund was closed.
Security Valuation
Investments are valued at the close of the New York Stock Exchange (the
"Exchange"), normally 4 p.m. ET, each day that the Exchange is open for
business. Equity securities for which market quotations are available are valued
at the last sale price or official closing price (closing bid price or last
evaluated quote if no sale has occurred) on the primary market or exchange on
which they trade.
Debt securities (other than short-term 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
85
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
characteristics and other market data. When a price is unavailable from a
pricing service or when the price provided by the pricing service is deemed not
to represent fair value, the prices of debt securities may be determined using
quotes obtained from brokers.
Investments in mutual funds are valued at the closing net asset value per
share of the mutual fund on the day of valuation. Investment grade short-term
obligations with 60 days or less to maturity are valued using the amortized cost
method, which approximates market value.
Securities for which 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 of Trustees
(the "Board").
Most foreign markets close before the Exchange. Developments that could
affect the values of securities that occur between the close of a foreign market
and the close of the Exchange normally will not be reflected in security
valuations. If such developments are so significant such that they will, in the
judgment of the pricing committee of the Funds, clearly and materially affect
the value of securities, the previous closing prices may be adjusted to reflect
the fair value of the securities as of the close of the Exchange, as determined
in good faith and pursuant to procedures approved by the Board. Adjustments to
closing prices to reflect fair value on affected foreign securities may be
provided by an independent pricing service.
Security Transactions and Investment Income
Security transactions are recorded on the trade date of the security
purchase or sale.
The Funds may purchase securities with delivery or payment to occur at a
later date. At the time the Funds enter into a commitment to purchase a
security, the transaction is recorded and the value of the security is reflected
in the net asset value. The value of the security may vary with market
fluctuations.
Dividend income, net of foreign taxes, is recorded on the ex-dividend date
except certain dividends from foreign securities which are recorded as soon as
the information is available to the Funds. Interest income is earned from
settlement date, recorded on the accrual basis, and adjusted, if necessary, for
accretion of discounts and amortization of premiums. For financial and tax
reporting purposes, realized gains and losses are determined on the basis of
specific lot identification.
Currency Translation
All assets and liabilities initially expressed in foreign currency values
are converted into U.S. dollar values at the mean of the bid and ask prices of
such currencies against U.S. dollars as last quoted by a recognized dealer.
Income, expenses and purchases and sales of investments are translated into U.S.
dollars at the rate of 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 in the Funds' Statements of Operations.
Forward Foreign Currency Contracts
The Emerging Markets Fund may enter into forward foreign currency contracts
to hedge the exchange rate risk on investment transactions or to hedge the value
of Fund securities denominated in foreign currencies. Forward foreign currency
contracts are valued at the forward exchange rate prevailing on the day of
valuation. The Fund bears the market risk that arises from changes in foreign
exchange rates, and accordingly, the unrealized gain (loss) on these contracts
is reflected in the accompanying financial statements. The Fund also bears the
credit risk if the counterparty fails to perform under the contract.
86
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Repurchase Agreements
Under the terms of a repurchase agreement, securities are acquired by a
Fund from a securities dealer or a bank which are subject to resale at a later
date. Repurchase agreements are fully collateralized. The collateral is
monitored daily by each Fund so that the collateral's market value equals or
exceeds the carrying value of the repurchase agreement, including accrued
interest.
Futures Contracts
Futures contracts are contracts to buy or sell a standard quantity of
securities at a specified price on a future date. The Balanced, Large Cap
Growth, Mid-Cap Value, Small Cap Value Opportunity, Emerging Markets, High Yield
Bond, and Enhanced Income 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 Fund is required to set aside or
deposit with a broker an amount, termed the initial margin, which typically
represents 5% of the face value of the futures contract. The Funds reflect this
amount on the Schedules of Investments as a U.S. Treasury Bill held as
collateral for futures contracts or as a Deposit with broker for futures
contracts 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.
Dividends to Shareholders
Dividends from net investment income of the Balanced, Large Cap Growth,
Mid-Cap Value, Small Cap Value Opportunity, and Emerging Markets Funds normally
will be declared and paid at least annually. The High Yield Bond, Enhanced
Income, Intermediate Bond, and Short-Term Bond Funds generally declare dividends
from net investment income daily, payable monthly. Distributions, if any, of net
realized capital gains are generally paid at least annually and recorded on the
ex-dividend date.
Commission Recapture
The Funds have established brokerage commission recapture arrangements with
certain brokers or dealers. If a Fund's investment advisor chooses to execute a
transaction through a participating broker, the broker rebates a portion of the
commission back to the Fund. Any collateral benefit received through
participation in the commission recapture program is directed exclusively to the
Fund. These amounts are reported with the net realized gains in the Funds'
Statements of Operations.
Allocation of Income, Expenses, Gains and Losses
Income, expenses (other than those attributable to a specific class), gains
and losses are allocated daily to each class of shares based upon the relative
proportion of net assets represented by such class. Operating expenses directly
attributable to a specific class are charged against the operations of that
class.
87
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimated.
Redemption Fees
The Institutional, PlanAhead, and AMR Classes of the Emerging Markets Fund
impose a 2% redemption fee on certain shares held for less than 90 days, and the
AMR Class of the Mid-Cap Value Fund imposes a 2% redemption fee on certain
shares held for less than 180 days. The fee is deducted from the redemption
proceeds and is intended to offset the trading costs, market impact and other
costs associated with short-term trading activity in the Funds. The "first-in,
first-out" method is used to determine the holding period. The fee is allocated
to all classes of each Fund pro-rata based on their respective net assets.
Recently Issued Accounting Pronouncements
In September 2006, the FASB issued Statement on Financial Accounting
Standards No. 157, "Fair Value Measurements" ("FAS 157"). This standard
clarifies the definition of fair value for financial reporting, establishes a
framework for measuring fair value and requires additional disclosures about the
use of fair value measurements. FAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim periods
within those fiscal years. As of April 30, 2008, the Manager does not believe
the adoption of FAS 157 will materially impact the amounts represented in the
financial statements; however, additional disclosures will be required about the
inputs used to develop the measurements of fair value.
Other
Under the Trust's organizational documents, its officers and directors are
indemnified against certain liability arising out of the performance of their
duties to the Trust. In the normal course of business, the Trust enters into
contracts that provide indemnification to the other party or parties against
potential costs or liabilities. The Trust's maximum exposure under these
arrangements is dependent on claims that may be made in the future and,
therefore, cannot be estimated. The Trust has had no prior claims or losses
pursuant to any such agreement.
2. TRANSACTIONS WITH AFFILIATES
Management Agreement
The Trust and the Manager are parties to a Management Agreement that
obligates the Manager to provide or oversee the provision of all administrative,
investment advisory, fund management and securities lending services. Investment
assets of the Balanced, Large Cap Growth, Mid-Cap Value, Small Cap Value
Opportunity, Emerging Markets, High Yield Bond, Enhanced Income, and
Intermediate Bond Funds are managed by one or more investment advisors which
have entered into separate investment advisory agreements with the Manager. As
compensation for performing the duties required under the Management Agreement,
the Manager receives from the Balanced Fund, Large Cap Growth Fund, Mid-Cap
Value Fund, Small Cap Value Opportunity Fund, Emerging Markets Fund, High Yield
Bond Fund, and Enhanced Income Fund an annualized fee equal to 0.10% of the
average daily net assets plus amounts paid by the Manager to the investment
advisors hired by the Manager to direct investment activities of the Funds. The
Manager receives an annualized fee of 0.25% of the average daily net assets of
the Intermediate Bond Fund and pays a portion of its fee to an investment
advisor hired by the Manager to direct investment activities of a portion of the
Fund. The Manager is one of the investment advisors of the Balanced and Enhanced
Income Funds and receives an annualized fee of 0.15% on the portion of assets
managed by the Manager. The Manager serves as the sole investment advisor to the
88
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Short-Term Bond Fund. Pursuant to the Management Agreement, the Manager receives
from the Fund an annualized fee equal to 0.25% of the average daily net assets
of the Short-Term Bond Fund. Management fees paid during the six months ended
April 30, 2008 were as follows (dollars in thousands):
AMOUNTS PAID NET AMOUNTS
MANAGEMENT MANAGEMENT TO INVESTMENT RETAINED BY
FEE RATE FEE ADVISORS MANAGER
----------- ---------- ------------- -----------
Balanced...................... 0.225%-0.70% $1,475 $942 $533
Large Cap Growth.............. 0.35%-0.55% 237 193 44
Mid-Cap Value................. 0.35%-1.10% 339 290 49
Small Cap Value Opportunity... 0.45%-0.55% 27 22 5
Emerging Markets.............. 0.79%-1.20% 973 854 119
High Yield Bond............... 0.52% 491 395 96
Enhanced Income............... 0.25%-0.85% 169 121 48
Intermediate Bond............. 0.25% 171 55 116
As compensation for services provided by the Manager in connection with
securities lending activities, the lending Fund pays to the Manager, with
respect to cash collateral posted by borrowers, a fee up to 25% 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 when a borrower
posts collateral other than cash, a fee up to 25% of such loan fees. This fee is
netted against securities lending income in the Statements of Operations. During
the six months ended April 30, 2008, securities lending fees paid to the Manager
were as follows (in thousands):
Balanced........................................................ $113
Large Cap Growth................................................ 8
Mid-Cap Value................................................... 8
Emerging Markets................................................ 15
High Yield Bond................................................. 4
Enhanced Income................................................. 11
Intermediate Bond............................................... 23
Administrative Services Agreement
The Manager and the Trust entered into an Administrative Services Agreement
which obligates the Manager to provide or oversee administrative services to the
Funds. As compensation for performing the duties required under the
Administrative Services Agreement, the Manager receives an annualized fee of
0.25% of the average daily net assets of the Institutional, PlanAhead, and
Service Classes of each of the Funds.
Distribution Plans
The Trust, except for the Service Class of the Funds, has adopted a
"defensive" Distribution Plan (the "Plan") in accordance with Rule 12b-1 under
the Act, pursuant to which no fees may be charged to the Funds for distribution
purposes. However, the Plan authorizes the management and administrative service
fees received by the Manager and the investment advisors hired by the Manager to
be used for distribution purposes. Under this Plan, the Trust does not intend to
compensate the Manager or any other party, either directly or indirectly, for
the distribution of Trust shares.
A separate Distribution Plan (the "Distribution Plan") has been adopted
pursuant to Rule 12b-1 under the Act for the Service Class of the Funds. Under
the Distribution Plan, as compensation for distribution assistance, the Manager
receives an annual fee of 0.25% of the average daily net assets of the Service
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 PlanAhead and Service
Classes. As compensation for performing the duties
89
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
required under the Service Plans, the Manager receives 0.25% of the average
daily net assets of the PlanAhead and Service Classes of each Fund.
Brokerage Commissions
Affiliated entities of an investment advisor to the Large Cap Growth Fund
and the Emerging Markets Fund received net commissions on purchases and sales of
the Fund's portfolio securities totaling $256 and $1,597, respectively for the
six months ended April 30, 2008.
Investment in Affiliated Funds
The Funds are permitted, pursuant to an exemptive order by the Securities
and Exchange Commission ("SEC") and procedures approved by the Board, to invest
up to 25% of its total assets in the American Beacon Money Market Select Fund
(the "Select Fund"). Cash collateral received by certain Funds in connection
with securities lending may be invested in the Select Fund and the American
Beacon Cash Plus Trust (the "Cash Trust") (collectively, the "Affiliated
Funds"). The Funds and the Affiliated Funds have the same investment advisor and
therefore, are considered to be affiliated. The Manager serves as investment
advisor to the Affiliated Funds and receives from each Affiliated Fund an
annualized fee up to 0.10% of its average daily net assets. During the six
months ended April 30, 2008, fees earned by the Manager from the Affiliated
Funds were as follows:
SECURITIES LENDING
DIRECT INVESTMENT IN COLLATERAL INVESTED
AFFILIATED FUNDS IN AFFILIATED FUNDS TOTAL
-------------------- ------------------- --------
Balanced.......................... $21,401 $106,437 $127,838
Large Cap Growth.................. 454 10,311 10,766
Mid-Cap Value..................... 2,858 7,625 10,483
Small Cap Value Opportunity....... 28 1,207 1,236
Emerging Markets.................. 6,446 11,536 17,983
High Yield Bond................... 4,129 -- 4,129
Enhanced Income................... 1,553 10,966 12,520
Intermediate Bond................. 4,480 16,512 20,992
Short-Term Bond................... 5,086 5,704 10,791
Interfund Lending Program
Pursuant to an exemptive order by the SEC, the Funds, along with other
registered investment companies having management contracts with the Manager,
may participate in an interfund lending program as a borrower. This program
provides an alternative credit facility allowing the Funds to borrow from other
participating Funds. For the six months ended April 30, 2008, the Fund did not
utilize the credit facility.
Reimbursement of Expenses
The Manager agreed to reimburse the following Funds to the extent that
total annual fund operating expenses exceed the Fund's expense cap. For the
period ended April 30, 2008, the Manager waived or reimbursed expenses as
follows:
Expense Cap
11/1/07 3/1/08 WAIVED OR
TO TO REIMBURSED
FUND CLASS 2/28/08 4/30/08 EXPENSES
- ---- ------------- ------- ------- ----------
Large Cap Growth.................. Institutional 0.90% 0.90% $ 51
Mid-Cap Value..................... Institutional 0.90% 0.98% 5,528
Mid-Cap Value..................... PlanAhead 1.23% 1.23% 6,599
Mid-Cap Value..................... Service 1.50% 2
Small Cap Value Opportunity....... Institutional 1.05% 1.05% 18,302
Small Cap Value Opportunity....... PlanAhead 1.30% 1.30% 179
Short-Term Bond................... PlanAhead 0.87% N/A 1,064
90
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Expense Reimbursement Plan
The Funds have adopted an Expense Reimbursement Plan whereby the Manager
may seek repayment of fees waived or expenses reimbursed for a period of up to
three years. However, reimbursement will occur only if the Class' average net
assets have grown or expenses have declined sufficiently to allow reimbursement
without causing its expense ratio to exceed the previously agreed upon
contractual expense limit.
The activity related to repayment of prior year fee waivers and expense
reimbursements during the six months ended April 30, 2008 was as follows:
Balanced- Service Class
EXPIRATION LIABILITY AT LIABILITY AT
YEAR 10/31/07 ACCRUED EXPIRED RECOUPED 4/30/08
- ---------- ------------ ------- ------- -------- ------------
2008 1,016 -- -- 697 319
2009 13 -- -- -- 13
------ --- --- ---- ----
$1,029 $-- $-- $697 $332
====== === === ==== ====
Emerging Markets- PlanAhead Class
EXPIRATION LIABILITY AT LIABILITY AT
YEAR 10/31/07 ACCRUED EXPIRED RECOUPED 4/30/08
- ---------- ------------ ------- ------- -------- ------------
2008 4,734 -- -- 3,534 1,200
2009 2,926 -- -- -- 2,926
------ --- --- ------ ------
$7,660 $-- $-- $3,534 $4,126
====== === === ====== ======
Mid-Cap Value- AMR Class
EXPIRATION LIABILITY AT LIABILITY AT
YEAR 10/31/07 REVERSED EXPIRED RECOUPED 4/30/08
- ---------- ------------ ------- ------- -------- ------------
2008 5,596 -- -- 5,596 --
2009 2,537 2,537 -- -- --
------ ------ --- ------ ---
$8,133 $2,537 $-- $5,596 $--
====== ====== === ====== ===
The remaining Funds have not recorded a liability for potential
reimbursement, due to the current assessment that a reimbursement is unlikely.
Other
At April 30, 2008, AMR Corporation and subsidiary companies and employee
benefit trusts thereof owned the following percentage of each Fund's shares:
% OWNERSHIP
-----------
Balanced............. 78%
Large Cap Growth..... 100%
Mid-Cap Value........ 60%
Emerging Markets..... 89%
High Yield Bond...... 34%
Intermediate Bond.... 96%
Short-Term Bond...... 92%
3. FEDERAL INCOME AND EXCISE TAXES
It is the policy of each of the Funds to comply with the requirements of
Subchapter M of the Internal Revenue Code and to distribute substantially all
net investment income as well as any net realized capital gains on the sale of
investments. Therefore, no federal income or excise tax provision is required.
The Funds adopted the provisions of FASB Interpretation No. 48, "Accounting
for Uncertainties in Income Taxes" ("FIN 48"), on January 1, 2007. FIN 48 sets
forth a minimum threshold for financial statement
91
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
recognition of the benefit of a tax position taken or expected to be taken in a
tax return. The implementation of FIN 48 did not result in any unrecognized tax
benefits in the accompanying financial statements. Each of the tax years in the
three year period ended October 31, 2007 remains subject to examination by the
Internal Revenue Service. If applicable, the Funds recognize interest accrued
related to unrecognized tax benefits in interest expense and penalties in "Other
expenses" on the Statements of Operations.
Dividends are categorized in accordance with income tax regulations which
may treat certain transactions differently than U.S. generally accepted
accounting principles. Accordingly, the character of distributions and
composition of net assets for tax purposes may differ from those reflected in
the accompanying financial statements.
The tax character of distributions paid during the six months ended April
30, 2008 and fiscal year ended October 31, 2007 were as follows (in thousands):
BALANCED LARGE CAP GROWTH MID-CAP VALUE
------------------------- ------------------------- -------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2008 2007 2008 2007 2008 2007
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
DISTRIBUTIONS PAID FROM:
ORDINARY INCOME*
Institutional Class ..... $ 1,995 $ 906 $ 1 $ 1 $ 138 $ 84
PlanAhead Class ......... 7,809 3,751 -- -- 618 714
Service Class ........... 452 52 -- -- -- --
AMR Class ............... 37,969 28,183 791 737 1,809 1,835
LONG-TERM CAPITAL GAIN
Institutional Class ..... 1,989 1,156 3 -- 351 24
PlanAhead Class ......... 8,151 5,180 -- -- 1,887 198
Service Class ........... 468 68 -- -- -- --
AMR Class ............... 35,517 34,174 2,748 -- 4,316 494
------- ------- ------ ---- ------ ------
TOTAL DISTRIBUTIONS PAID ... $94,350 $73,470 $3,543 $738 $9,119 $3,349
------- ------- ------ ---- ------ ------
SMALL CAP
VALUE OPPORTUNITY EMERGING MARKETS HIGH YIELD BOND
------------------------- ------------------------- -------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2008 2007 2008 2007 2008 2007
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
DISTRIBUTIONS PAID FROM:
ORDINARY INCOME*
Institutional Class ..... $134 $25 $ 549 $ 412 $3,758 $16,871
PlanAhead Class ......... 1 1 499 135 903 4,915
Service Class ........... -- -- -- -- -- --
AMR Class ............... -- -- 11,725 3,613 2,902 949
LONG-TERM CAPITAL GAIN
Institutional Class ..... -- -- 1,528 2,096 -- --
PlanAhead Class ......... -- -- 1,420 802 -- --
Service Class ........... -- -- -- -- -- --
AMR Class ............... -- -- 30,209 16,785 -- --
---- --- ------- ------- ------ -------
TOTAL DISTRIBUTIONS PAID ... $135 $26 $45,930 $23,843 $7,563 $22,735
---- --- ------- ------- ------ -------
92
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
ENHANCED INCOME INTERMEDIATE BOND SHORT-TERM BOND
------------------------- ------------------------- -------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2008 2007 2008 2007 2008 2007
----------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
DISTRIBUTIONS PAID FROM:
ORDINARY INCOME*
Institutional Class ..... $ -- $ -- $3,215 $4,946 $2,305 $4,046
PlanAhead Class ......... 3,524 4,171 -- 13 97 227
AMR Class ............... -- -- -- -- -- --
LONG-TERM CAPITAL GAIN ..... -- -- --
Institutional Class ..... -- -- -- -- -- --
PlanAhead Class ......... 1,461 74 -- -- -- --
AMR Class ............... -- -- -- -- -- --
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS PAID ... $4,985 $4,245 $3,215 $4,959 $2,402 $4,273
------ ------ ------ ------ ------ ------
* For tax purposes, short-term capital gains are considered ordinary income
distributions.
As of April 30, 2008, the components of distributable earnings on a tax basis
were as follows (in thousands):
SMALL CAP
LARGE CAP MID-CAP VALUE EMERGING
BALANCED GROWTH VALUE OPPORTUNITY MARKETS
----------- --------- --------- ----------- ---------
Cost basis of investments for federal income
tax purpose ............................... $1,179,363 $101,064 $118,498 $11,881 $199,325
Unrealized appreciation ...................... 131,799 8,323 4,072 467 35,679
Unrealized depreciation ...................... (76,183) (4,365) (15,431) (1,689) (8,736)
---------- -------- -------- ------- --------
Net unrealized appreciation (depreciation) ... 55,616 3,958 (11,359) (1,222) 26,943
Undistributed ordinary income ................ 10,436 200 347 33 1,124
Undistributed long-term gain (loss) .......... (6,359) (4,622) (580) (3,353) 24,966
---------- -------- -------- ------- --------
Distributable earnings (losses) .............. $ 59,693 $ (464) $(11,592) $(4,542) $ 53,033
========== ======== ======== ======= ========
HIGH YIELD ENHANCED INTERMEDIATE SHORT-TERM
BOND INCOME BOND BOND
----------- --------- ------------ -----------
Cost basis of investments for federal income
tax purpose ............................... $212,576 $116,248 $ 204,226 $124,209
Unrealized appreciation ...................... 1,823 2,891 1,973 702
Unrealized depreciation ...................... (12,078) (1,301) (1,018) (906)
-------- -------- -------- --------
Net unrealized appreciation (depreciation) ... (10,255) 1,590 955 (204)
Undistributed ordinary income ................ 382 388 501 530
Undistributed long-term gain (loss) .......... (4,594) 403 (7,300) (7,254)
-------- -------- -------- --------
Distributable earnings (losses) .............. $(14,467) $ 2,381 $ (5,844) $ (6,928)
======== ======== ======== ========
Financial reporting records are adjusted for permanent book/tax differences
to reflect tax character. Financial records are not adjusted for temporary
differences. The temporary differences between financial reporting and tax-basis
reporting of unrealized appreciation/(depreciation) are attributable primarily
to the tax deferral of losses from wash sales, the realization for tax purposes
of unrealized gains/(losses) on certain derivative instruments, book
amortization for premiums, the realization for tax purposes of unrealized
gains/(losses) on investments in passive foreign investment companies,
reclassifications of income from real estate investment securities, and income
adjustments associated with contingent payment debt instruments.
Due to inherent differences in the recognition of income, expenses and
realized gains/losses under U.S. generally accepted accounting principles and
federal income tax regulations, permanent differences between
93
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
book and tax reporting have been identified and appropriately reclassified on
the Statements of Assets and Liabilities.
Accordingly, the following amounts represent current year permanent
differences derived from reclassifications of income from real estate investment
securities, foreign currency, book amortization of premium, pay down reclasses,
income adjustments associated with contingent payment debt instruments, and
dividend reclasses that have been reclassified as of April 30, 2008 (in
thousands):
LARGE CAP MID-CAP SMALL CAP VALUE EMERGING
BALANCED GROWTH VALUE OPPORTUNITY MARKETS
-------- --------- ------- --------------- --------
Paid-in-capital.......................... $ 1 $-- $ -- $ -- $ --
Undistributed net investment income...... 167 (6) (84) (23) (280)
Accumulated net realized gain (loss)..... (168) 6 84 23 280
Unrealized appreciation (depreciation)
of investments, futures contracts and
foreign currency...................... -- -- -- -- --
HIGH ENHANCED INTERMEDIATE SHORT-TERM
YIELD BOND INCOME BOND BOND
---------- -------- ------------ ----------
Paid-in-capital.......................... $-- $(17) $-- $ 1
Undistributed net investment income...... -- 103 2 157
Accumulated net realized gain (loss)..... (1) (86) (2) (157)
Unrealized appreciation (depreciation)
of investments, futures contracts and
foreign currency...................... 1 -- -- (1)
At April 30, 2008 capital loss carry forward positions for federal income
tax purposes were as follows (in thousands):
FUND 2008 2009 2010 2011 2012 2013 2014 2015 2016 TOTAL
- ---- ------ ---- ----- ---- ---- ------ ------ ---- ------ ------
Balanced ..................... $ -- $-- $ -- $ -- $ -- $ -- $ -- $ -- $6,359 $6,359
Large Cap Growth ............. -- -- -- -- -- -- -- -- 4,622 4,622
Mid-Cap Value ................ -- -- -- -- -- -- -- -- 580 580
Small Cap Value Opportunity .. -- -- -- -- -- -- -- 313 3,040 3,353
High Yield Bond .............. -- -- -- -- -- -- 1,772 -- 2,822 4,594
Intermediate Bond ............ 5,557 -- 328 -- -- 318 1,097 -- -- 7,300
Short-Term Bond .............. 1,218 -- 913 161 800 1,256 2,387 467 52 7,254
The Intermediate Bond Fund utilized $1,551 of net capital loss carryovers
for the six months ended April 30, 2008.
4. INVESTMENT TRANSACTIONS
The aggregate cost of purchases and proceeds from sales and maturities of
long-term investments during the six months ended April 30, 2008 were as follows
(in thousands):
LARGE CAP MID-CAP SMALL CAP VALUE EMERGING
BALANCED GROWTH VALUE OPPORTUNITY MARKETS
-------- --------- ------- --------------- --------
Purchases (excluding U.S. government
securities) $211,797 $44,348 $87,740 $ 2,201 $186,405
Sales and maturities (excluding U.S.
government securities) 148,095 48,824 41,348 20,749 155,508
Purchases of U.S. government
securities 71,941 -- -- -- --
Sales and maturities of U.S.
government securities 145,486 -- -- -- --
HIGH ENHANCED INTERMEDIATE SHORT-TERM
YIELD BOND INCOME BOND BOND
---------- -------- ------------ ----------
Purchases (excluding U.S. government
securities) $45,031 $19,173 $47,472 $20,345
Sales and maturities (excluding U.S.
government securities) 67,733 14,953 8,991 2,824
Purchases of U.S. government
securities -- 3,754 69,397 --
Sales and maturities of U.S.
government securities -- 7,748 58,158 --
94
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
A summary of the Funds' direct transactions in Affiliated Funds for the six
months ended April 30, 2008 is set forth below (in thousands):
OCTOBER 31, 2007 APRIL 30, 2008
AFFILIATE SHARES/MARKET VALUE PURCHASES SALES SHARES/MARKET VALUE
----------- ------------------- --------- -------- -------------------
Balanced...................... Select Fund $57,102 $222,836 $245,693 $34,245
Large Cap Growth.............. Select Fund 4,534 35,745 37,483 2,796
Mid-Cap Value................. Select Fund 2,299 58,817 53,656 7,458
Small Cap Value Opportunity... Select Fund 30 1,226 1,075 180
Emerging Markets.............. Select Fund 17,218 85,162 93,301 9,079
High Yield Bond............... Select Fund 7,084 56,404 55,629 7,860
Enhanced Income............... Select Fund 3,297 21,094 22,863 1,528
Intermediate Bond............. Select Fund 3,359 73,195 71,472 5,082
Short-Term Bond............... Select Fund 7,599 25,144 29,726 3,017
5. SECURITIES LENDING
Each 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 and initially in an amount at least
equal to 102% of the fair value of domestic securities loaned or 105% of the
fair value of international securities loaned. Collateral is marked to market
and monitored daily. To the extent that a loan is collateralized by cash, such
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.
For all Funds except the High Yield Bond Fund, the Funds, the Agent and the
Manager retain 65%, 25%, and 10%, respectively, of the income generated from the
investment of cash collateral, less negotiated rebate fees paid to participating
brokers and transaction costs. For the High Yield Bond Fund, the Fund, the
Agent, and the Manager retain 80%, 10%, and 10%, respectively of the income
generated from the lending. To the extent that a loan is secured by non-cash
collateral, brokers pay the Fund negotiated lenders' fees, which are divided
between the Fund, the Agent, and the Manager using the same percentages as
above. The Fund also continues to receive income on the securities loaned, and
any gain or loss in the market price of securities loaned that may occur during
the term of the loan.
Risks to the Fund in securities lending transactions are that the borrower
may not provide additional collateral when required or return the securities
when due, and that the value of the short-term investments will be less than the
amount of cash collateral required to be returned to the borrower.
At April 30, 2008, the value of outstanding securities on loan and the
value of collateral was as follows (in thousands):
MARKET VALUE
OF SECURITIES NON-CASH CASH
FUND ON LOAN COLLATERAL COLLATERAL
- ---- ------------- ---------- ----------
Balanced $192,930 $1,763 $195,104
Large Cap Growth 21,087 1,020 20,614
Mid-Cap Value 14,184 1,079 13,536
Small Cap Value Opportunity 1,766 11 1,818
Emerging Markets 18,127 1,214 17,904
High Yield Bond 11,141 -- 11,387
Enhanced Income 20,707 -- 21,122
Intermediate Bond 41,361 -- 42,015
Short-Term Bond 20,518 -- 20,922
95
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
Cash collateral for each Fund, other than High Yield Bond, was invested in
a joint investment account, which is comprised of an investment in the
Affiliated Funds. The allocated amounts have been included as investments in
each Fund's Schedule of Investments and Statement of Assets and Liabilities.
Income earned on these investments is reported as Income derived from securities
lending in the Statements of Operations.
Non-cash collateral received by the Funds may not be sold or repledged;
therefore, non-cash collateral is not included on the Funds' Schedules of
Investments or Statements of Assets and Liabilities.
6. CAPITAL SHARE TRANSACTIONS
The tables below summarize the activity in capital shares for each Class of
the Funds (shares and dollars in thousands):
SIX MONTHS ENDED APRIL 30, 2008
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- ------------------ ----------------- ------------------
BALANCED FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ------------- ------- --------- ------ --------- ------ -------- ------ ---------
Shares sold ......................... 736 $10,414 1,260 $ 17,176 232 $ 3,197 1,554 $ 20,883
Reinvestment of dividends ........... 272 3,895 1,160 15,508 70 920 5,368 73,485
Shares redeemed ..................... (617) (8,719) (3,131) (41,572) (161) (2,059) (3,501) (47,360)
---- ------- ------ -------- ---- ------- ------ --------
Net increase (decrease) in shares
outstanding ...................... 391 $ 5,590 (711) $ (8,888) 141 $ 2,058 3,421 $ 47,008
==== ======= ====== ======== ==== ======= ====== ========
INSTITUTIONAL CLASS AMR CLASS
------------------- -----------------
LARGE CAP GROWTH FUND SHARES AMOUNT SHARES AMOUNT
- --------------------- -------- -------- ------ --------
Shares sold 3 $17 3,148 $ 21,819
Reinvestment of dividends -- 4 492 3,539
Shares redeemed (1) (7) (4,135) (27,816)
--- --- ------ --------
Net increase (decrease) in
shares outstanding 2 $14 (495) $ (2,458)
=== === ====== ========
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- ------------------ ----------------- ------------------
MID-CAP VALUE FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ------------------ ------- --------- ------ --------- ------ -------- ------ ---------
Shares sold...................... 139 $ 1,284 1,115 $ 9,878 -- $-- 743 $ 7,062
Reinvestment of dividends........ 50 469 263 2,504 -- -- 641 6,125
Shares redeemed................. (163) (1,502) (1,737) (17,157) -- -- (2,252) (21,313)*
---- ------- ------ -------- --- --- ------ --------
Net increase (decrease) in shares
outstanding................... 26 $ 251 (359) $ (4,775) -- $-- (868) $ (8,126)
==== ======= ====== ======== === === ====== ========
* Net of Redemption Fees
96
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
INSTITUTIONAL CLASS PLANAHEAD CLASS
------------------- ---------------
SMALL CAP VALUE OPPORTUNITY FUND SHARES AMOUNT SHARES AMOUNT
- -------------------------------- ------ -------- ------ ------
Shares sold ............................ 102 $ 896 2 $19
Reinvestment of dividends .............. 14 134 -- 1
Shares redeemed ........................ (1,989) (19,349) -- --
------ -------- --- ---
Net increase (decrease) in shares
outstanding ......................... (1,873) $(18,319) 2 $20
====== ======== === ===
INSTITUTIONAL CLASS PLANAHEAD CLASS AMR CLASS
------------------- ---------------- -----------------
EMERGING MARKETS FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- --------------------- ------ ------- ------ ------- ------ --------
Shares sold ............................ 3 $ 68 475 $ 8,743 662 $ 12,996
Reinvestment of dividends .............. 109 2,039 101 1,876 2,222 41,934
Shares redeemed ........................ (43) (719)* (386) (7,029)* (3,649) (63,053)*
--- ------ ---- ------- ------ --------
Net increase (decrease) in shares
outstanding ......................... 69 $1,388 190 $ 3,590 (765) $ (8,123)
=== ====== ==== ======= ====== ========
* Net of Redemption Fees
INSTITUTIONAL CLASS PLANAHEAD CLASS AMR CLASS
------------------- ----------------- -----------------
HIGH YIELD BOND FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------- ------ -------- ------ -------- ------ --------
Shares sold ............................ 1,738 $ 16,654 1,974 $ 18,890 1,184 $ 11,488
Reinvestment of dividends .............. 304 2,913 89 854 303 2,905
Shares redeemed ........................ (3,242) (31,600) (1,662) (16,244) (2,659) (25,677)
------ -------- ------ -------- ------ --------
Net increase (decrease) in shares
outstanding ......................... (1,200) $(12,033) 401 $ 3,500 (1,172) $(11,284)
====== ======== ====== ======== ====== ========
PLANAHEAD CLASS
-----------------
ENHANCED INCOME FUND SHARES AMOUNT
- -------------------- ------ --------
Shares sold ............................ 854 $ 8,664
Reinvestment of dividends .............. 492 4,997
Shares redeemed ........................ (1,199) 12,351
------ --------
Net increase in shares outstanding ..... 147 $ 1,310
====== ========
INSTITUTIONAL CLASS
-------------------
INTERMEDIATE BOND FUND SHARES AMOUNT
- ---------------------- ------ --------
Shares sold ............................ 7,605 $ 78,491
Reinvestment of dividends .............. 311 3,213
Shares redeemed ........................ (2,818) (28,997)
------ --------
Net increase in shares outstanding ..... 5,098 $ 52,707
====== ========
INSTITUTIONAL CLASS PLANAHEAD CLASS
------------------- ----------------
SHORT-TERM BOND FUND SHARES AMOUNT SHARES AMOUNT
- -------------------- ------ -------- ------ -------
Shares sold ............................ 2,315 $ 20,528 400 $ 3,543
Reinvestment of dividends .............. 257 2,278 8 69
Shares redeemed ........................ (1,649) (14,538) (96) (851)
------ -------- --- -------
Net increase in shares outstanding ..... 923 $ 8,268 312 $ 2,761
====== ======== === =======
97
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
PERIOD ENDED OCTOBER 31, 2007
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- ------------------ ---------------- -----------------
BALANCED FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ------------- ------ -------- ------ --------- ------ ------- ------ --------
Shares sold ............................ 2,632 $ 40,892 9,160 $ 133,607 637 $ 9,354 3,668 $ 55,490
Reinvestment of dividends .............. 133 2,010 596 8,472 8 120 4,292 62,357
Shares redeemed ........................ (997) (15,809) (3,818) (56,412) (115) (1,681) (3,474) (52,456)
----- -------- ------ --------- ---- ------- ------ --------
Net increase in shares outstanding ..... 1,768 $ 27,093 5,938 $ 85,667 531 $ 7,793 4,486 $ 65,391
===== ======== ====== ========= ==== ======= ====== ========
INSTITUTIONAL CLASS AMR CLASS
------------------- -----------------
LARGE CAP GROWTH FUND SHARES AMOUNT SHARES AMOUNT
- --------------------- ------ ------ ------ --------
Shares sold ............................ 6 $ 42) 6,218 $ 44,595
Reinvestment of dividends .............. -- 1 106 737
Shares redeemed ........................ (6 (47) (4,970) (36,098)
--- ---- ------ --------
Net increase (decrease) in shares
outstanding ......................... -- $ (4) 1,355 $ 9,234
=== ==== ====== ========
INSTITUTIONAL CLASS PLANAHEAD CLASS SERVICE CLASS AMR CLASS
------------------- ---------------- --------------- -----------------
MID-CAP VALUE FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ------------------ ------ -------- ------ ------- ------ ------ ------ --------
Shares sold ............................ 306 $ 3,462 2,186 $24,108 -- $ 1 5,200 $ 58,233
Reinvestment of dividends .............. 10 106 85 911 -- -- 215 2,329
Shares redeemed ........................ (81) (899)* (854) (9,358)* -- -- (4,398) (50,095)*
--- ------- ----- ------- --- --- ------ --------
Net increase in shares outstanding ..... 235 $ 2,669 1,417 $15,661 -- $ 1 1,017 $ 10,467
=== ======= ===== ======= === === ====== ========
* Net of Redemption Fees
INSTITUTIONAL CLASS PLANAHEAD CLASS
------------------- ---------------
SMALL CAP VALUE OPPORTUNITY FUND SHARES AMOUNT SHARES AMOUNT
- -------------------------------- ------ ------- ------ ------
Shares sold ............................ 2,568 $28,729 46 $ 495
Reinvestment of dividends .............. 2 25 -- 1
Shares redeemed ........................ (163) (1,721) (44) (478)
----- ------- --- -----
Net increase in shares outstanding ..... 2,408 $27,033 2 $ 18
===== ======= === =====
INSTITUTIONAL CLASS PLANAHEAD CLASS AMR CLASS
------------------- ---------------- -----------------
EMERGING MARKETS FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- --------------------- ------ -------- ------ ------- ------ --------
Shares sold ............................ 158 $ 2,910 276 $ 5,295 3,940 $ 79,619
Reinvestment of dividends .............. 149 2,456 56 910 1,236 20,398
Shares redeemed ........................ (689) (13,376)* (182) (3,347)* (1,740) (32,629)*
---- -------- ---- ------- ------ --------
Net increase (decrease) in shares
outstanding ......................... (381) $ (8,010) 150 $ 2,858 3,436 $ 67,388
==== ======== ==== ======= ====== ========
* Net of Redemption Fees
INSTITUTIONAL CLASS PLANAHEAD CLASS AMR CLASS
------------------- ----------------- ----------------
HIGH YIELD BOND FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------- ------- --------- ------ -------- ------ -------
Shares sold ............................ 8,987 $ 92,399 2,989 $ 30,489 8,737 $87,012
Reinvestment of dividends .............. 1,310 13,435 469 4,820 94 948
Shares redeemed ........................ (21,641) (219,761) (8,481) (86,687) (687) (6,930)
------- --------- ------ -------- ----- -------
Net increase (decrease) in shares
outstanding ......................... (11,344) $(113,927) (5,022) $(51,378) 8,144 $81,030
======= ========= ====== ======== ===== =======
98
AMERICAN BEACON FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)
PLANAHEAD CLASS
-----------------
ENHANCED INCOME FUND SHARES AMOUNT
- -------------------- ------ --------
Shares sold ............................ 1,524 $ 15,667
Reinvestment of dividends .............. 412 4,245
Shares redeemed ........................ (4,716) (48,649)
------ --------
Net (decrease) in shares outstanding ... (2,780) $(28,737)
====== ========
INSTITUTIONAL CLASS PLANAHEAD CLASS
------------------- ----------------
INTERMEDIATE BOND FUND SHARES AMOUNT SHARES AMOUNT
- ---------------------- ------ -------- ------ -------
Shares sold ............................ 2,676 $ 26,814 7 $ 68
Reinvestment of dividends .............. 493 4,945 1 12
Shares redeemed ........................ (2,019) (20,209) (100) (1,014)
------ -------- ---- -------
Net increase (decrease) in shares
outstanding ......................... 1,150 $ 11,550 (92 $ (934)
====== ======== ==== =======
INSTITUTIONAL CLASS PLANAHEAD CLASS
------------------- ----------------
SHORT-TERM BOND FUND SHARES AMOUNT SHARES AMOUNT
- -------------------- ------ ------- ------ -------
Shares sold ............................ 2,310 $20,272 309 $ 2,712
Reinvestment of dividends .............. 461 4,044 25 220
Shares redeemed ........................ (998) (8,754) (817) (7,178)
----- ------- ---- -------
Net increase (decrease) in shares
outstanding ......................... 1,772 $15,562 (483) $(4,246)
===== ======= ==== =======
99
AMERICAN BEACON BALANCED FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class
-----------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, ---------------------------------------------
2008 2007 2006 2005 2004 2003
----------- ------- ------- ------- ------ ------
(unaudited)
Net asset value, beginning of period .................... $ 16.09 $ 15.83 $ 15.00 $ 14.31 $12.99 $10.97
------- ------- ------- ------- ------ ------
Income from investment operations:
Net investment income(A) ............................. 0.24 0.50 0.39 0.36 0.29 0.31(B)
Net gains (losses) on securities (both realized
and unrealized) ................................... (1.18) 0.90 1.54 1.11 1.36 1.84(B)
------- ------- ------- ------- ------ ------
Total income (loss) from investment operations .......... (0.94) 1.40 1.93 1.47 1.65 2.15
------- ------- ------- ------- ------ ------
Less distributions:
Dividends from net investment income ................. (0.44) (0.42) (0.38) (0.31) (0.33) (0.13)
Distributions from net realized gains on securities .. (0.79) (0.72) (0.72) (0.47) -- --
------- ------- ------- ------- ------ ------
Total distributions ..................................... (1.23) (1.14) (1.10) (0.78) (0.33) (0.13)
------- ------- ------- ------- ------ ------
Net asset value, end of period .......................... $ 13.92 $ 16.09 $ 15.83 $ 15.00 $14.31 $12.99
======= ======= ======= ======= ====== ======
Total return ............................................ (6.01)%(C) 9.31% 13.60% 12.78% 10.53% 19.77%
======= ======= ======= ======= ====== ======
Ratios and supplemental data:
Net assets, end of period (in thousands) ............. $49,911 $51,399 $22,587 $14,122 $8,378 $9,041
Ratios to average net assets (annualized):
Expenses, net of waivers ............................. 0.57% 0.57% 0.59% 0.56% 0.63% 0.63%
Expenses, before waivers ............................. 0.57% 0.57% 0.59% 0.56% 0.63% 0.63%
Net investment income, net of waivers ................ 3.24% 2.91% 2.81% 2.45% 2.15% 2.74%
Net investment income (loss), before waivers ......... 3.24% 2.91% 2.81% 2.45% 2.15% 2.74%
Portfolio turnover rate .............................. 27%(C) 50% 59% 58% 62% 69%
PlanAhead Class
---------------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, -------------------------------------------------
2008 2007 2006 2005 2004 2003
----------- -------- -------- ------- ------- -------
(unaudited)
Net asset value, beginning of period .................... $ 15.09 $ 14.91 $ 14.20 $ 13.62 $ 12.40 $ 10.81
-------- -------- -------- ------- ------- -------
Income from investment operations:
Net investment income(A) ............................. 0.20 0.41 0.35 0.34 0.27 0.28(B)
Net gains (losses) on securities (both realized
and unrealized) ................................... (1.10) 0.87 1.44 1.01 1.25 1.74(B)
-------- -------- -------- ------- ------- -------
Total income (loss) from investment operations .......... (0.90) 1.28 1.79 1.35 1.52 2.02
-------- -------- -------- ------- ------- -------
Less distributions:
Dividends from net investment income ................. (0.41) (0.38) (0.36) (0.30) (0.30) (0.43)
Distributions from net realized gains on securities .. (0.79) (0.72) (0.72) (0.47) -- --
-------- -------- -------- ------- ------- -------
Total distributions ..................................... (1.20) (1.10) (1.08) (0.77) (0.30) (0.43)
-------- -------- -------- ------- ------- -------
Net asset value, end of period .......................... $ 12.99 $ 15.09 $ 14.91 $ 14.20 $ 13.62 $ 12.40
======== ======== ======== ======= ======= =======
Total return ............................................ (6.14)%(C) 9.06% 13.31% 10.12% 12.44% 19.36%
======== ======== ======== ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in thousands) ............. $165,288 $202,750 $111,837 $86,875 $21,571 $13,321
Ratios to average net assets (annualized):
Expenses, net of waivers ............................. 0.82% 0.83% 0.85% 0.86% 0.93% 0.94%
Expenses, before waivers ............................. 0.82% 0.83% 0.85% 0.86% 0.93% 0.94%
Net investment income, net of waivers ................ 2.99% 2.65% 2.55% 2.14% 1.84% 2.40%
Net investment income (loss), before waivers ......... 2.99% 2.65% 2.55% 2.14% 1.84% 2.40%
Portfolio turnover rate .............................. 27%(C) 50% 59% 58% 62% 69%
(A) Class expenses per share were subtracted from net investment income per
share for the Fund before class expenses to determine net investment income
per share through October 31, 2005.
(B) For the year ended October 31, 2003, the net investment income and net
gains (losses) on securities (both realized and unrealized) has been
restated from 0.30 and 1.85, respectively for Institutional Class and 0.36
and 1.66, respectively for PlanAhead Class.
(C) Not annualized.
(D) Annualized.
(E) Portfolio turnover rate is for the period from November 1, 2004 through
October 31, 2005.
100
Service Class
------------------------------------------
Six
Months Year Ended
Ended October 31, May 31 to
April 30, --------------- October 31,
2008 2007 2006 2005
----------- ------ ------ -----------
(unaudited)
Net asset value, beginning of period .................... $14.95 $14.83 $14.16 $ 13.96
------ ------ ------ ---------
Income from investment operations:
Net investment income(A) ............................. 0.16 0.41 0.38 0.09
Net gains (losses) on securities (both realized
and unrealized) ................................... (1.07) 0.83 1.35 0.11
------ ------ ------ ---------
Total income (loss) from investment operations .......... (0.91) 1.24 1.73 0.20
------ ------ ------ ---------
Less distributions:
Dividends from net investment income ................. (0.42) (0.40) (0.34) --
Distributions from net realized gains on securities .. (0.79) (0.72) (0.72) --
------ ------ ------ ---------
Total distributions ..................................... (1.21) (1.12) (1.06) --
------ ------ ------ ---------
Net asset value, end of period .......................... $12.83 $14.95 $14.83 $ 14.16
====== ====== ====== =========
Total return ............................................ (6.30)%(C) 8.76% 13.01% 1.43%(C)
====== ====== ====== =========
Ratios and supplemental data:
Net assets, end of period (in thousands) ............. $9,977 $9,504 $1,562 $ 1
Ratios to average net assets (annualized):
Expenses, net of waivers ............................. 1.06% 1.07% 1.22% 1.09%(D)
Expenses, before waivers ............................. 1.06% 1.07% 1.22% 360.24%(D)
Net investment income, net of waivers ................ 2.74% 2.34% 2.18% 1.52%(D)
Net investment income (loss), before waivers ......... 2.74% 2.34% 2.17% (357.63)%(D)
Portfolio turnover rate .............................. 27%(C) 50% 59% 58%(E)
AMR Class
------------------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, ----------------------------------------------------
2008 2007 2006 2005 2004 2003
----------- --------- -------- -------- -------- --------
(unaudited)
Net asset value, beginning of period .................... $ 15.49 $ 15.27 $ 14.49 $ 13.87 $ 12.60 $ 10.98
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income(A) ............................. 0.25 0.50 0.45 0.39 0.32 0.34
Net gains (losses) on securities (both realized
and unrealized) ................................... (1.14) 0.89 1.46 1.05 1.31 1.78
-------- -------- -------- -------- -------- --------
Total income (loss) from investment operations .......... (0.89) 1.39 1.91 1.44 1.63 2.12
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ................. (0.48) (0.45) (0.41) (0.35) (0.36) (0.50)
Distributions from net realized gains on securities .. (0.79) (0.72) (0.72) (0.47) -- --
-------- -------- -------- -------- -------- --------
Total distributions ..................................... (1.27) (1.17) (1.13) (0.82) (0.36) (0.50)
-------- -------- -------- -------- -------- --------
Net asset value, end of period .......................... $ 13.33 $ 15.49 $ 15.27 $ 14.49 $ 13.87 $ 12.60
======== ======== ======== ======== ======== ========
Total return ............................................ (5.92)%(C) 9.59% 13.98% 10.63% 13.13% 20.06%
======== ======== ======== ======== ======== ========
Ratios and supplemental data:
Net assets, end of period (in thousands) ............. $819,022 $898,584 $817,333 $712,073 $636,420 $557,612
Ratios to average net assets (annualized):
Expenses, net of waivers ............................. 0.31% 0.31% 0.33% 0.33% 0.37% 0.38%
Expenses, before waivers ............................. 0.31% 0.31% 0.33% 0.33% 0.37% 0.38%
Net investment income, net of waivers ................ 3.50% 3.21% 3.08% 2.70% 2.40% 2.98%
Net investment income (loss), before waivers ......... 3.50% 3.21% 3.08% 2.70% 2.40% 2.98%
Portfolio turnover rate .............................. 27%(C) 50% 59% 58% 62% 69%
101
AMERICAN BEACON LARGE CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class
--------------------------------------------------------------
Six Months
Ended Year Ended October 31,
April 30, ------------------------------------------------
2008 2007 2006(A) 2005 2004 2003
----------- ------- ------- ------ ------- ------
(unaudited)
Net asset value, beginning of period ............. $ 7.67 $ 6.89 $ 6.18 $ 5.82 $ 5.47 $ 4.53
------- ------ ------ ------ ------- ------
Income from investment operations:
Net investment income ......................... 0.02 0 .04 0.04 0.04 0.02 0.02
Net gains (losses) on securities (both
realized and unrealized) ................... (0.81) 0.77 0.70 0.37 0.35 0.94
------- ------ ------ ------ ------- ------
Total income (loss) from investment operations ... (0.79) 0.81 0.74 0.41 0.37 0.96
------- ------ ------ ------ ------- ------
Less distributions:
Dividends from net investment income .......... (0.04) (0.03) (0.03) (0.05) (0.02) (0.02)
Distributions from net realized gains on
securities ................................. (0.22) -- -- -- -- --
------- ------ ------ ------ ------- ------
Total distributions .............................. (0.26) (0.03) (0.03) (0.05) (0.02) (0.02)
------- ------ ------ ------ ------- ------
Net asset value, end of period ................... $ 6.62 $ 7.67 $ 6.89 $ 6.18 $ 5.82 $ 5.47
======= ====== ====== ====== ======= ======
Total return ..................................... (10.71)%(B) 11.84% 12.04% 7.06% 6.71% 21.15%
======= ====== ====== ====== ======= ======
Ratios and supplemental data:
Net assets, end of period (in thousands) ...... $ 117 $ 119 $ 110 $ 105 $ 1 $ 1
Ratios to average net assets (annualized):
Expenses, net of waivers ...................... 0.90% 0.90% 0.90% 0.89% 0.84% 0.87%
Expenses, before waivers ...................... 0.99% 1.06% 0.99% 4.64% 13.22% 0.87%
Net investment income (loss), net of waivers .. 0.70% 0.58% 0.56% (0.18)% 0.18% 0.18%
Net investment income (loss), before waivers .. 0.60% 0.42% 0.48% (3.93)% (12.20)% 0.18%
Portfolio turnover rate ....................... 52%(B) 128% 181% 164% 131% 138%
(A) On September 12, 2006, The Renaissance Group, LLC assumed management of the
Large Cap Growth Fund's assets previously managed by J.P. Morgan Investment
Management, Inc.
(B) Not annualized.
102
AMR Class
--------------------------------------------------------------
Six Months
Ended Year Ended October 31,
April 30, ------------------------------------------------
2008 2007 2006(A) 2005 2004 2003
----------- -------- ------- ------- ------- -------
(unaudited)
Net asset value, beginning of period ............. $ 7.72 $ 6.95 $ 6.21 $ 5.84 $ 5.48 $ (4.54)
------- -------- ------- ------- ------- -------
Income from investment operations:
Net investment income ......................... 0.04 0.06 0.05 0.06 0.02 0.02
Net gains (losses) on securities (both
realized and unrealized) ................... (0.83) 0.77 0.73 0.36 0.36 0.93
------- -------- ------- ------- ------- -------
Total income (loss) from investment operations ... (0.79) 0.83 0.78 0.42 0.38 0.95
------- -------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income .......... (0.06) (0.06) (0.04) (0.05) (0.02) (0.01)
Distributions from net realized gains on
securities ................................. (0.22) -- -- -- -- --
------- -------- ------- ------- ------- -------
Total distributions .............................. (0.28) (0.06) (0.04) (0.05) (0.02) (0.01)
------- -------- ------- ------- ------- -------
Net asset value, end of period ................... $ 6.65 $ 7.72 $ 6.95 $ 6.21 $ 5.84 $ 5.48
======= ======== ======= ======= ======= =======
Total return ..................................... (10.50)%(B) 12.07% 12.52% 7.22% 6.88% 21.09%
======= ======== ======= ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in thousands) ...... $84,310 $101,698 $82,042 $63,183 $55,121 $48,926
Ratios to average net assets (annualized):
Expenses, net of waivers ...................... 0.60% 0.60% 0.59% 0.64% 0.71% 0.68%
Expenses, before waivers ...................... 0.60% 0.60% 0.59% 0.64% 0.71% 0.68%
Net investment income (loss), net of waivers .. 1.02% 0.85% 0.88% 0.98% 0.34% 0.40%
Net investment income (loss), before waivers .. 1.02% 0.85% 0.88% 0.98% 0.34% 0.40%
Portfolio turnover rate ....................... 52%(B) 128% 181% 164% 131% 138%
103
AMERICAN BEACON MID-CAP VALUE FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class PlanAhead Class Service Class
------------------------------- ------------------------------ ----------------------
Six Months Year November Six Months Year February Six Months June 29
Ended Ended 30 to Ended Ended 28 to Ended to
April 30, October October April 30, October October April 30, October
2008 31, 2007 31, 2006 2008 31, 2007 31, 2006 2008 31, 2007
----------- -------- -------- ----------- -------- -------- ----------- --------
(unaudited) (unaudited) (unaudited)
Net asset value, beginning
of period ................. $ 11.01 $10.81 $12.09 $ 10.96 $ 10.80 $ 9.80 $ 10.94 $11.73
------- ------ ------ ------- ------- ------- -------- ------
Income from investment
operations:
Net investment income ..... 0.08 0.12 0.21 0.08 0.10 0.01 0.06 0.01
Net gains (losses) on
securities (both
realized and
unrealized) ............ (1.20) 0.41 1.25 (1.23) 0.40 0.99 (1.21) (0.80)
------- ------ ------ ------- ------- ------- -------- ------
Total income (loss) from
investment operations ..... (1.12) 0.53 1.46 (1.15) 0.50 1.00 (1.15) (0.79)
------- ------ ------ ------- ------- ------- -------- ------
Less distributions:
Dividends from net
investment income ...... (0.16) (0.07) (0.16) (0.11) (0.08) -- (0.14) --
Distributions from net
realized gains on
securities ............. (0.76) (0.26) (2.58) (0.76) (0.26) -- (0.76) --
------- ------ ------ ------- ------- ------- -------- ------
Total distributions .......... (0.92) (0.33) (2.74) (0.87) (0.34) -- (0.90) --
------- ------ ------ ------- ------- ------- -------- ------
Redemption fees added to
beneficial interests ...... -- -- -- -- -- -- -- --
Net asset value, end of
period .................... $ 8.97 $11.01 $10.81 $ 8.94 $ 10.96 $ 10.80 $ 8.89 $10.94
======= ====== ====== ======= ======= ======= ======== ======
Total return ................. (10.79)%(C) 4.87% 15.30%(C) (10.96)%(C) 4.68% 10.20%(C) (11.06)%(C) (6.65)%(C)
======= ====== ====== ======= ======= ======= ======== ======
Ratios and supplemental
data:
Net assets, end of period
(in thousands) ......... $ 5,153 $6,047 $3,396 $32,007 $43,158 $27,240 $ 1 $ 1
Ratios to average net
assets (annualized):
Expenses, net of waivers .. 0.81% 0.92% 1.19%(D) 1.23% 1.23% 1.49%(D) 1.50% 1.50%(D)
Expenses, before waivers .. 1.03% 1.09% 1.19%(D) 1.27% 1.26% 1.61%(D) 2.05% 1.80%(D)
Net investment income, net
of waivers ............. 1.64% 1.22% 1.11%(D) 1.22% 0.93% 0.57%(D) 0.98% 0.32%(D)
Net investment income,
before waivers ......... 1.42% 1.05% 1.11%(D) 1.18% 0.90% 0.44%(D) 0.43% 0.02%(D)
Portfolio turnover rate ... 11% 35% 42%(E) 11% 35% 42%(E) 11% 35%(F)
(A) On November 30, 2005, the Mid-Cap Value Fund's Institutional Class of
shares was renamed the AMR Class and the Fund began offering a new class of
shares known as the Institutional Class.
(B) Based on average shares outstanding.
(C) Not annualized.
(D) Annualized.
(E) Portfolio turnover rate is for the period from November 1, 2005 through
October 31, 2006.
(F) Portfolio turnover rate is for the period from November 1, 2006 through
October 31, 2007.
104
AMR Class (formerly Institutional Class prior to
December 1, 2005)(A)
------------------------------------------------
Six Months June 30
Ended Year Ended October 31, to
April 30, ------------------------- October
2008 2007 2006 2005 31, 2004
----------- ------- ------- ------- --------
(unaudited)
Net asset value, beginning
of period .................... $ 11.07 $ 10.87 $ 11.72 $ 10.27 $10.00
------- ------- ------- ------- ------
Income from investment
operations:
Net investment income ........ 0.10 0.18 0.12 0.13 0.02(B)
Net gains (losses) on
securities (both
realized and unrealized) .. (1.23) 0.36 1.75 1.37 0.25
------- ------- ------- ------- ------
Total income (loss) from
investment operations ........ (1.13) 0.54 1.87 1.50 0.27
------- ------- ------- ------- ------
Less distributions:
Dividends from net
investment income ......... (0.17) (0.08) (0.14) (0.05) --
Distributions from net
realized gains on
securities ................ (0.76) (0.26) (2.58) -- --
------- ------- ------- ------- ------
Total distributions ............. (0.93) (0.34) (2.72) (0.05) --
------- ------- ------- ------- ------
Redemption fees added to
beneficial interests ......... -- -- -- -- --
Net asset value, end of
period ....................... $ 9.01 $ 11.07 $ 10.87 $ 11.72 $10.27
======= ======= ======= ======= ======
Total return .................... (10.76)%(C) 5.19% 19.16% 14.63% 2.70%(C)
======= ======= ======= ======= ======
Ratios and supplemental
data:
Net assets, end of period
(in thousands) ............ $56,279 $78,794 $66,290 $44,342 $25,546
Ratios to average net assets
(annualized):
Expenses, net of waivers ..... 0.79% 0.75% 0.97% 1.01% 1.14%(D)
Expenses, before waivers ..... 0.79% 0.75% 0.92% 1.02% 1.34%(D)
Net investment income, net
of waivers ................ 1.66% 1.41% 1.38% 0.92% 0.73%(D)
Net investment income,
before waivers ............ 1.66% 1.40% 1.42% 0.91% 0.53%(D)
Portfolio turnover rate ...... 11% 35% 42% 298% 6%(C)
105
AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class
---------------------------------------
Six Months Year Ended March 31 to
Ended April October October
30, 2008 31, 2007 31, 2006
------------ ---------- -----------
(unaudited)
Net asset value, beginning of period ... $ 10.33 $ 10.26 $10.00
Income from investment operations:
Net investment income ............... 0.14 0.06(A) 0.01
Net gains (losses) on securities
(both realized and unrealized) ... (1.58) 0.05(A) 0.25
------- ------- ------
Total income (loss) from investment
operations .......................... (1.44) 0.11 0.26
------- ------- ------
Less distributions:
Dividends from net investment
income ........................... (0.12) (0.03) --
Distributions from net realized gains
on securities .................... -- (0.01) --
------- ------- ------
Total distributions .................... (0.12) (0.04) --
------- ------- ------
Net asset value, end of period ......... $ 8.77 $ 10.33 $10.26
======= ======= ======
Total return ........................... (13.99)%(B) 1.08% 2.60%(B)
======= ======= ======
Ratios and supplemental data:
Net assets, end of period (in
thousands) ....................... $ 8,709 $29,596 $4,693
Ratios to average net assets
(annualized):
Expenses, net of waivers ............ 1.05% 1.05% 1.03%
Expenses, before waivers ............ 1.44% 1.27% 6.12%
Net investment income, net of
waivers .......................... 1.45% 0.96% 0.30%
Net investment income (loss), before
waivers .......................... 1.07% 0.73% (4.80)%
Portfolio turnover rate ............. 18%(B) 58% 32%(B)
(A) Based upon average shares outstanding.
(B) Not annualized.
106
PlanAhead Class
---------------------------------------
Six Months Year Ended March 31 to
Ended April October October
30, 2008 31, 2007 31, 2006
------------ ---------- -----------
(unaudited)
Net asset value, beginning of period ... $ 10.28 $10.26 $ 10.00
Income from investment operations:
Net investment income ............... 0.03 0.23(A) 0.01
Net gains (losses) on securities
(both realized and unrealized) ... (1.47) (0.14)(A) 0.25
------- ------ -------
Total income (loss) from investment
operations .......................... (1.44) 0.09 0.26
------- ------ -------
Less distributions:
Dividends from net investment
income ........................... (0.10) (0.06) --
Distributions from net realized gains
on securities .................... -- (0.01) --
------- ------ -------
Total distributions .................... (0.10) (0.07) --
------- ------ -------
Net asset value, end of period ......... $ 8.74 $10.28 $ 10.26
======= ====== =======
Total return ........................... (14.14)%(B) 0.96% 2.60%(B)
======= ====== =======
Ratios and supplemental data:
Net assets, end of period (in
thousands) ....................... $ 98 $ 91 $ 70
Ratios to average net assets
(annualized):
Expenses, net of waivers ............ 1.20% 1.30% 1.28%
Expenses, before waivers ............ 1.59% 1.70% 20.05%
Net investment income, net of
waivers .......................... 1.27% 0.97% 0.21%
Net investment income (loss), before
waivers .......................... 0.88% 0.57% (18.56)%
Portfolio turnover rate ............. 18%(B) 58% 32%(B)
107
AMERICAN BEACON EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class
---------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, --------------------------------------------
2008 2007 2006 2005 2004 2003
----------- ------- ------- ------ ------ ------
(unaudited)
Net asset value, beginning of period $ 24.20 $ 17.42 $ 15.10 $12.64 $10.62 $ 7.20
------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income ............................................ 0.08 0.26 0.11 0.15 0.07 0.04
Net gains (losses) on securities (both realized and unrealized)... (2.69) 9.11 4.63 3.45 2.01 3.43
------- ------- ------- ------ ------ ------
Total income (loss) from investment operations ...................... (2.61) 9.37 4.74 3.60 2.08 3.47
------- ------- ------- ------ ------ ------
Less distributions:
Dividends from net investment income ............................. (0.10) (0.10) (0.21) (0.06) (0.06) (0.05)
Distributions from net realized gains on securities .............. (3.55) (2.49) (2.21) (1.08) -- --
------- ------- ------- ------ ------ ------
Total distributions ................................................. (3.65) (2.59) (2.42) (1.14) (0.06) (0.05)
------- ------- ------- ------ ------ ------
Redemption fees added to beneficial interests ....................... --(A) -- -- --(A) --(A) --
Net asset value, end of period ...................................... $ 17.94 $ 24.20 $ 17.42 $15.10 $12.64 $10.62
======= ======= ======= ====== ====== ======
Total return ........................................................ (11.47)%(B) 60.83% 34.49% 30.11% 19.65% 48.45%
======= ======= ======= ====== ====== ======
Ratios and supplemental data:
Net assets, end of period (in thousands) ......................... $11,452 $13,773 $16,552 $9,348 $7,282 $3,557
Ratios to average net assets (annualized):
Expenses, net of waivers ......................................... 1.36% 1.60% 1.56% 1.52% 1.85% 1.76%
Expenses, before waivers ......................................... 1.36% 1.60% 1.56% 1.52% 1.85% 1.76%
Net investment income, net of waivers ............................ 0.98% 0.93% 0.80% 1.22% 0.74% 0.62%
Net investment income, before waivers ............................ 0.98% 0.93% 0.80% 1.22% 0.74% 0.62%
Portfolio turnover rate .......................................... 43%(B) 81% 67% 63% 76% 80%
(A) Amounts represent less than $0.01 per share.
(B) Not annualized.
108
PlanAhead Class
---------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, --------------------------------------------
2008 2007 2006 2005 2004 2003
----------- ------- ------- ------ ------ ------
(unaudited)
Net asset value, beginning of period $ 23.91 $ 17.22 $ 14.98 $12.53 $10.55 $ 7.19
------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income ............................................ 0.04 0.11 0.09 0.15 0.04 0.09
Net gains (losses) on securities (both realized and unrealized)... (2.64) 9.11 4.55 3.41 1.99 3.34
------- ------- ------- ------ ------ ------
Total income (loss) from investment operations ...................... (2.60) 9.22 4.64 3.56 2.03 3.43
------- ------- ------- ------ ------ ------
Less distributions:
Dividends from net investment income ............................. (0.08) (0.04) (0.19) (0.03) (0.05) (0.07)
Distributions from net realized gains on securities .............. (3.55) (2.49) (2.21) (1.08) -- --
------- ------- ------- ------ ------ ------
Total distributions ................................................. (3.63) (2.53) (2.40) (1.11) (0.05) (0.07)
------- ------- ------- ------ ------ ------
Redemption fees added to beneficial interests ....................... --(A) -- -- --(A) --(A) --(A)
Net asset value, end of period ...................................... $ 17.68 $ 23.91 $ 17.22 $14.98 $12.53 $10.55
======= ======= ======= ====== ====== ======
Total return ........................................................ (11.63)%(B) 60.17% 34.16% 29.95% 19.33% 48.07%
======= ======= ======= ====== ====== ======
Ratios and supplemental data:
Net assets, end of period (in thousands) ......................... $12,006 $11,694 $ 5,841 $2,592 $1,214 $ 492
Ratios to average net assets (annualized):
Expenses, net of waivers ......................................... 1.78% 1.96% 2.04% 1.75% 2.14% 2.08%
Expenses, before waivers ......................................... 1.78% 1.96% 1.91% 2.01% 2.20% 2.08%
Net investment income, net of waivers ............................ 0.59% 0.65% 0.49% 1.16% 0.37% 0.57%
Net investment income, before waivers ............................ 0.59% 0.65% 0.62% 0.90% 0.31% 0.57%
Portfolio turnover rate .......................................... 43%(B) 81% 67% 63% 76% 80%
AMR Class
-----------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, ---------------------------------------------
2008 2007 2006 2005 2004 2003
----------- -------- -------- ------- ------- -------
(unaudited)
Net asset value, beginning of period $ 24.37 $ 17.52 $ 15.17 $ 12.68 $ 10.66 $ 7.22
-------- -------- -------- ------- ------- -------
Income from investment operations:
Net investment income ............................................ 0.12 0.19 0.15 0.24 0.10 0.07
Net gains (losses) on securities (both realized and unrealized)... (2.71) 9.30 4.65 3.42 2.00 3.44
-------- -------- -------- ------- ------- -------
Total income (loss) from investment operations ...................... (2.59) 9.49 4.80 3.66 2.10 3.51
-------- -------- -------- ------- ------- -------
Less distributions:
Dividends from net investment income ............................. (0.18) (0.15) (0.24) (0.09) (0.08) (0.07)
Distributions from net realized gains on securities .............. (3.55) (2.49) (2.21) (1.08) -- --
-------- -------- -------- ------- ------- -------
Total distributions ................................................. (3.73) (2.64) (2.45) (1.17) (0.08) (0.07)
-------- -------- -------- ------- ------- -------
Redemption fees added to beneficial interests ....................... --(A) -- -- -- -- --
Net asset value, end of period ...................................... $ 18.05 $ 24.37 $ 17.52 $ 15.17 $ 12.68 $ 10.66
======== ======== ======== ======= ======= =======
Total return ........................................................ (11.36)%(B) 61.19% 34.87% 30.43% 20.00% 48.84%
======== ======== ======== ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in thousands) ......................... $187,370 $271,726 $135,146 $94,864 $74,199 $51,498
Ratios to average net assets (annualized):
Expenses, net of waivers ......................................... 1.18% 1.37% 1.30% 1.25% 1.59% 1.50%
Expenses, before waivers ......................................... 1.18% 1.37% 1.30% 1.25% 1.59% 1.50%
Net investment income, net of waivers ............................ 1.11% 1.25% 1.01% 1.60% 1.01% 0.92%
Net investment income, before waivers ............................ 1.11% 1.25% 1.01% 1.60% 1.01% 0.92%
Portfolio turnover rate .......................................... 43%(B) 81% 67% 63% 76% 80%
109
AMERICAN BEACON HIGH YIELD BOND FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class
------------------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, ----------------------------------------------------
2008 2007 2006 (A) 2005 2004 2003
----------- -------- -------- -------- -------- --------
(unaudited)
Net asset value, beginning of period ........... $ 10.11 $ 10.20 $ 10.22 $ 10.86 $ 10.73 $ 9.63
------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income ....................... 0.38 0.77 0.88 0.76 0.78 0.78
Net gains (losses) on securities
(both realized and unrealized) ........... (0.50) (0.09) 0.09 (0.44) 0.27 1.10
------- -------- -------- -------- -------- --------
Total income (loss) from investment
operations .................................. (0.12) 0.68 0.97 0.32 1.05 1.88
------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ........ (0.38) (0.77) (0.88) (0.76) (0.78) (0.78)
Distributions from net realized
gains on securities ...................... -- -- (0.11) (0.20) (0.14) --
------- ------ --------- -------- -------- --------
Total distributions ............................ (0.38) (0.77) (0.99) (0.96) (0.92) (0.78)
------- -------- -------- -------- -------- --------
Net asset value, end of period ................. $ 9.61 $ 10.11 $ 10.20 $ 10.22 $ 10.86 $ 10.73
======= ======== ======== ======== ======== ========
Total return ................................... (1.18)%(B) 6.85% 8.78% 3.03% 10.19% 20.11%
======= ======== ======== ======== ======== ========
Ratios and supplemental data:
Net assets, end of period (in thousands) .... $97,756 $114,911 $231,693 $216,744 $241,777 $161,380
Ratios to average net assets (annualized):
Expenses, net of waivers .................... 0.90% 0.85% 0.85% 0.84% 0.88% 0.90%
Expenses, before waivers .................... 0.90% 0.86% 0.85% 0.84% 0.92% 1.00%
Net investment income, net of waivers ....... 7.81% 7.55% 7.55% 7.24% 7.27% 7.51%
Net investment income, before waivers ....... 7.81% 7.54% 7.55% 7.24% 7.23% 7.41%
Portfolio turnover rate ..................... 24%(B) 92% 88% 128% 138% 114%
(A) Franklin Advisers, Inc. was added as an investment advisor to the High
Yield Bond Fund on September 12, 2006.
(B) Not annualized.
(C) Annualized.
(D) Portfolio turnover rate is for the period from November 1, 2006 through
October 31, 2007.
110
PlanAhead Class
----------------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, --------------------------------------------------
2008 2007 2006(A) 2005 2004 2003
------------ ------- ------- -------- -------- --------
(unaudited)
Net asset value, beginning of period ........... $ 10.11 $ 10.21 $ 10.22 $ 10.87 $ 10.73 $ 9.63
------- ------- ------- -------- -------- --------
Income from investment operations:
Net investment income ....................... 0.37 0.75 0.85 0.74 0.74 0.75
Net gains (losses) on securities
(both realized and unrealized) ........... (0.49) (0.10) 0.10 (0.45) 0.28 1.10
------- ------- ------- -------- -------- --------
Total income (loss) from investment
operations .................................. (0.12) 0.65 0.95 0.29 1.02 1.85
------- ------- ------- -------- -------- --------
Less distributions:
Dividends from net investment income ........ (0.37) (0.75) (0.85) (0.74) (0.74) (0.75)
Distributions from net realized
gains on securities ...................... -- -- (0.11) (0.20) (0.14) --
------- ------- ------- -------- -------- --------
Total distributions ............................ (0.37) (0.75) (0.96) (0.94) (0.88) (0.75)
------- ------- ------- -------- -------- --------
Net asset value, end of period ................. $ 9.62 $ 10.11 $ 10.21 $ 10.22 $ 10.87 $ 10.73
======= ======= ======= ======== ======== ========
Total return ................................... (1.18)%(B) 6.52% 8.63% 2.69% 9.94% 19.57%(B)
======= ======= ======= ======== ======== ========
Ratios and supplemental data:
Net assets, end of period (in thousands) .... $31,204 $28,758 $80,284 $120,360 $148,266 $125,654
Ratios to average net assets (annualized):
Expenses, net of waivers .................... 1.11% 1.08% 1.08% 1.08% 1.20% 1.24%
Expenses, before waivers .................... 1.11% 1.08% 1.08% 1.08% 1.20% 1.24%
Net investment income, net of waivers ....... 7.55% 7.32% 7.33% 7.00% 6.95% 7.11%
Net investment income, before waivers ....... 7.55% 7.32% 7.33% 7.00% 6.95% 7.11%
Portfolio turnover rate ..................... 24%B 92% 88% 128% 138% 114%
AMR Class
-----------------------
Six
Months September
Ended 4 to
April 30, October
2008 31, 2007
----------- ---------
(unaudited)
Net asset value, beginning of period ........... $ 10.11 $ 9.94
------- -------
Income from investment operations:
Net investment income ....................... 0.39 0.12
Net gains (losses) on securities
(both realized and unrealized) ........... (0.50) 0.17
------- -------
Total income (loss) from investment
operations .................................. (0.11) 0.29
------- -------
Less distributions:
Dividends from net investment income ........ (0.39) (0.12)
Distributions from net realized
gains on securities ...................... -- --
------- -------
Total distributions ............................ (0.39) (0.12)
------- -------
Net asset value, end of period ................. $ 9.61 $ 10.11
======= =======
Total return ................................... (1.04)%(B) 2.94%(B)
======= =======
Ratios and supplemental data:
Net assets, end of period (in thousands) .... $67,030 $82,322
Ratios to average net assets (annualized):
Expenses, net of waivers .................... 0.62% 0.61%(C)
Expenses, before waivers .................... 0.62% 0.61%(C)
Net investment income, net of waivers ....... 8.09% 7.54%(C)
Net investment income, before waivers ....... 8.09% 7.54%(C)
Portfolio turnover rate ..................... 24%(B) 92%(D)
111
AMERICAN BEACON ENHANCED INCOME FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
PlanAhead Class
-----------------------------------------------------------------
Six
Months June 30
Ended Year Ended October 31, to
April 30, ---------------------------------------- October
2008 2007 2006 2005 2004 31, 2003
----------- ------- -------- -------- -------- --------
(unaudited)
Net asset value, beginning of period ..................... $ 10.50 $ 10.25 $ 9.98 $ 10.16 $ 9.96 $ 10.00
------- ------- -------- -------- -------- --------
Income from investment operations:
Net investment income ................................. 0.07 0.36 0.33 0.29 0.26 0.07(A)
Net gains (losses) on securities (both realized and
unrealized) ........................................ (0.07) 0.32 0.29 (0.16) 0.20 (0.04)
------- ------- -------- -------- -------- --------
Total income from investment operations .................. 0.00 0.68 0.62 0.13 0.46 0.03
------- ------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .................. (0.19) (0.42) (0.35) (0.31) (0.26) (0.07)
Distributions from net realized gains on securities ... (0.23) (0.01) -- -- -- --
------- ------- -------- -------- -------- --------
Total distributions ...................................... (0.42) (0.43) (0.35) (0.31) (0.26) (0.07)
------- ------- -------- -------- -------- --------
Net asset value, end of period ........................... $ 10.08 $ 10.50 $ 10.25 $ 9.98 $ 10.16 $ 9.96
======= ======= ======== ======== ======== ========
Total return ............................................. 1.19%(B) 6.75% 6.36% 1.32% 4.70% 0.32%(B)
======= ======= ======== ======== ======== ========
Ratios and supplemental data:
Net assets, end of period (in thousands) .............. $97,286 $99,789 $125,915 $112,341 $103,897 $101,072
Ratios to average net assets (annualized):
Expenses .............................................. 0.93% 0.94% 0.93% 0.92% 1.00% 0.93%(C)
Net investment income .................................... 3.64% 3.69% 3.21% 2.79% 2.54% 2.20%(C)
Portfolio turnover rate .................................. 24%(B) 103% 65% 41% 72% 57%(B)
(A) Based on average shares outstanding.
(B) Not annualized.
(C) Annualized.
112
AMERICAN BEACON INTERMEDIATE BOND FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class (formerly AMR Class prior to 3/1/05)
---------------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, -------------------------------------------------
2008 2007 2006 2005(A) 2004 2003
----------- -------- ------- ------- ------- --------
(unaudited)
Net asset value, beginning of period ..................... $ 10.10 $ 10.02 $ 10.01 $ 10.33 $ 10.24 $ 10.22
-------- -------- ------- ------- ------- --------
Income from investment operations:
Net investment income ................................. 0.27 0.50 0.46 0.42 0.40 0.45
Net gains (losses) on securities (both realized and
unrealized) ........................................ 0.19 0.07 0.02 (0.29) 0.14 0.02
-------- -------- ------- ------- ------- --------
Total income from investment operations .................. 0.46 0.57 0.48 0.13 0.54 0.47
-------- -------- ------- ------- ------- --------
Less distributions:
Dividends from net investment income .................. (0.24) (0.49) (0.47) (0.45) (0.45) (0.45)
Distributions from net realized gains on securities ... -- -- -- -- -- --
-------- -------- ------- ------- ------- --------
Total distributions ...................................... (0.24) (0.49) (0.47) (0.45) (0.45) (0.45)
-------- -------- ------- ------- ------- --------
Net asset value, end of period ........................... $ 10.32 $ 10.10 $ 10.02 $ 10.01 $ 10.33 $ 10.24
======== ======== ======= ======= ======= ========
Total return ............................................. 4.58%(B) 5.83% 4.96% 1.26% 5.38% 4.62%
======== ======== ======= ======= ======= ========
Ratios and supplemental data:
Net assets, end of period (in thousands) .............. $164,687 $109,674 $97,319 $93,270 $96,242 $131,927
Ratios to average net assets (annualized):
Expenses, net of waivers .............................. 0.31% 0.34% 0.35% 0.31% 0.34% 0.32%
Expenses, before waivers .............................. 0.31% 0.34% 0.35% 0.31% 0.34% 0.32%
Net investment income, net of waivers. ................ 4.66% 4.86% 4.64% 4.12% 3.97% 4.32%
Net investment income, before waivers ................. 4.66% 4.86% 4.64% 4.12% 3.97% 4.32%
Portfolio turnover rate ............................... 51%(B) 85% 122% 119% 106% 187%
(A) On March 1, 2005, the existing Institutional Class shares were terminated
and exchanged for AMR Class shares at a conversion rate of 1.0202.
Following this exchange, the former AMR Class Shares were re-named
Institutional Class.
(B) Not annualized.
113
AMERICAN BEACON SHORT-TERM BOND FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class
---------------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, -------------------------------------------------
2008 2007 2006 2005(A) 2004 2003
----------- ------- -------- -------- ------- -------
(unaudited)
Net asset value, beginning of period ................. $ 8.79 $ 8.74 $ 8.75 $ 9.07 $ 9.31 $ 9.07
Income from investment operations:
Net investment income ............................. 0.27 0.39(B) 0.32(B) 0.29 0.27 0.29
Net gains (losses) on securities (both realized and
unrealized) .................................... (0.03) 0.09 0.07 (0.20) (0.05) (0.20)
------ ------- ------ -------- ------- -------
Total income from investment operations .............. 0.24 0.48 0.39 0.09 0.22 0.09
------ ------- ------ -------- ------- -------
Less distributions:
Dividends from net investment income .............. (0.21) (0.43) (0.40) (0.41) (0.46) (0.41)
Distributions from net realized gains
on securities .................................. -- -- -- -- -- --
------- ------- -------- ------- ------- -------
Total distributions .................................. (0.21) (0.43) (0.40) (0.41) (0.46) (0.41)
------- ------- -------- ------- ------- -------
Net asset value, end of period ....................... $ 8.82 $ 8.79 $ 8.74 $ 8.75 $ 9.07 $ 8.75
======= ======= ======== ======= ======= =======
Total return ......................................... 2.79%(C) 5.61% 4.56% 1.00% 2.39% 1.00%
======= ======= ======== ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in thousands) .......... $97,816 $89,427 $73,417 $79,683 $80,504 $79,683
Ratios to average net assets (annualized):
Expenses, net of waivers .......................... 0.33% 0.37% 0.35% 0.33% 0.33% 0.33%
Expenses, before waivers .......................... 0.33% 0.37% 0.35% 0.33% 0.33% 0.33%
Net investment income, net of waivers. ............ 4.49% 4.48% 3.64% 3.15% 3.00% 3.15%
Net investment income, before waivers ............. 4.49% 4.48% 3.64% 3.15% 3.00% 3.15%
Portfolio turnover rate ........................... 3%(C) 40% 48% 38% 41% 38%
(A) On March 1, 2005, the existing Institutional Class shares were terminated
and exchanged for AMR Class shares at a conversion rate of 1.0014.
Following this exchange, the former AMR Class Shares were re-named
Institutional Class.
(B) For purposes of this calculation, the change in undistributed net
investment income per share was derived by dividing the change in
undistributed net investment income by average shares outstanding for the
period.
(C) Not annualized.
114
PlanAhead Class
----------------------------------------------------------
Six
Months
Ended Year Ended October 31,
April 30, --------------------------------------------
2008 2007 2006 2005(A) 2004 2003
----------- ------ ------ ------- ------ ------
(unaudited)
Net asset value, beginning of period ................. $ 8.81 $ 8.76 $ 8.77 $ 9.09 $ 9.33 $ 9.45
------- ------ ------ ------ ------ ------
Income from investment operations:
Net investment income ............................. 0.24 0.35(B) 0.27(B) 0.28 0.25 0.39
Net gains (losses) on securities (both realized and
unrealized) .................................... (0.03) 0.09 0.07 (0.24) (0 07) (0.08)
------- ------ ------ ------ ------ ------
Total income from investment operations .............. 0.21 0.44 0.34 0.04 0.18 0.31
------- ------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income .............. (0.19) (0.39) (0.35) (0.36) (0.42) (0.43)
Distributions from net realized gains
on securities .................................. -- -- -- -- -- --
------- ------ ------ ------ ------ ------
Total distributions .................................. (0.19) (0.39) (0.35) (0.36) (0.42) (0.43)
------- ------ ------ ------ ------ ------
Net asset value, end of period ....................... $ 8.83 $ 8.81 $ 8.76 $ 8.77 $ 9.09 $ 9.33
======= ====== ====== ====== ====== ======
Total return ......................................... 2.40%(C) 5.08% 4.01% 0.46% 1.84% 3.38%
======= ====== ====== ====== ====== ======
Ratios and supplemental data:
Net assets, end of period (in thousands) .......... $ 5,739 $2,976 $7,189 $8,582 $7,781 $5,783
Ratios to average net assets (annualized):
Expenses, net of waivers .......................... 0.88% 0.87% 0.88% 0.87% 0.87% 0.86%
Expenses, before waivers .......................... 0.92% 0.98% 0.90% 0.94% 0.87% 0.86%
Net investment income, net of waivers ............. 3.92% 3.91% 3.10% 2.59% 2.44% 4.00%
Net investment income, before waivers ............. 3.87% 3.81% 3.08% 2.52% 2.44% 4.00%
Portfolio turnover rate ........................... 3%(C) 40% 48% 38% 41% 81%
115
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(AMERICAN BEACON FUNDS(SM) LOGO)
DELIVERY OF DOCUMENTS
To reduce expenses, your financial institution may mail only one copy of the
Prospectus, Annual Report and Semi-Annual Report to those addresses shared by
two or more accounts. If you wish to receive individual copies of these
documents, please contact your financial institution. Delivery of individual
copies will commence thirty days after receiving your request.
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: BY MAIL:
Institutional Class American Beacon Funds
Call (800) 658-5811 P.O. Box 219643
AMR Class(SM) Kansas City, MO 64121-9643
Call (800) 345-2345
PlanAhead Class(R) and Service Class
Call (800) 388-3344
AVAILABILITY OF QUARTERLY AVAILABILITY OF PROXY VOTING
PORTFOLIO SCHEDULES POLICY AND RECORDS
In addition to the Schedule of A description of the policies and
Investments provided in each procedures the Fund uses to determine
semi-annual and annual report, the how to vote proxies relating to
Fund files a complete schedule of its portfolio securities is available in
portfolio holdings with the the Fund's Statement of Additional
Securities and Exchange Commission Information, is available free of
("SEC") on Form N-Q as of the first charge on the Fund's website
and third fiscal quarters. The Fund's (www.americanbeaconfunds.com) and by
Forms N-Q are available on the SEC's calling 1-800-967-9009 or by
website at www.sec.gov. The Forms N-Q accessing the SEC's website at
may also be reviewed and copied at www.sec.gov. The Fund's proxy voting
the SEC's Public Reference Room, 450 record for the most recent year ended
Fifth Street, NW, Washington, DC June 30 is filed annually with the
20549. Information regarding the SEC on Form N-PX. The Fund's Forms
operation of the SEC's Public N-PX are available on the SEC's
Reference Room may be obtained by website at www.sec.gov. The Fund's
calling 1-800-SEC-0330. A complete proxy voting record may also be
schedule of the Fund's portfolio obtained by calling 1-800-967-9009.
holdings is also available on the
Funds' website
(www.americanbeaconfunds.com)
approximately thirty days after the
end of each month.
FUND SERVICE PROVIDERS:
CUSTODIAN TRANSFER AGENT INDEPENDENT REGISTERED DISTRIBUTOR
STATE STREET BANK AND TRUST BOSTON FINANCIAL DATA PUBLIC ACCOUNTING FIRM FORESIDE FUND SERVICES
Boston, Massachusetts SERVICES ERNST & YOUNG LLP Portland, Maine
Kansas City, Missouri Dallas, 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.
AMERICAN AIRLINES, INC. IS NOT RESPONSIBLE FOR INVESTMENTS MADE IN THE AMERICAN
BEACON FUNDS. AMERICAN BEACON FUNDS IS A SERVICE MARK OF AMR CORPORATION.
AMERICAN BEACON BALANCED FUND, AMERICAN BEACON LARGE CAP GROWTH FUND, AMERICAN
BEACON MID-CAP VALUE FUND, AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND,
AMERICAN BEACON EMERGING MARKETS FUND, AMERICAN BEACON HIGH YIELD BOND FUND,
AMERICAN BEACON ENHANCED INCOME FUND, AMERICAN BEACON INTERMEDIATE BOND AND
AMERICAN BEACON SHORT-TERM BOND FUND ARE SERVICE MARKS OF AMERICAN BEACON
ADVISORS, INC.
ITEM 2. CODE OF ETHICS.
The Trust did not amend the code of ethics that applies to its principal
executive and financial officers (the "Code") nor did it grant any waivers to
the provisions of the Code during the period covered by the shareholder reports
presented in Item 1.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not Applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not Applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
The schedules of investments for each series of the Trust are included in the
shareholder reports presented in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Trust has made no material changes to the procedures by which shareholders
may recommend nominees to the Trust's Board of Trustees since the Trust last
disclosed such procedures in Schedule 14A.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon an evaluation within 90 days of the filing date of this
report, the principal executive and financial officers concluded that
the disclosure controls and procedures of the Trust are effective.
(b) There were no changes in the Trust's internal control over financial
reporting during the second fiscal quarter of the period covered by
this report that has materially affected, or is reasonably likely to
materially affect, the Trust's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the Trust as required by Rule
30a-2(a) under the Investment Company Act of 1940 is attached hereto
as EX-99.CERT.
(a)(3) Not applicable.
(b) The certifications required by Rule 30a-2(b) under the Investment
Company Act of 1940 are attached hereto as EX-99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): American Beacon Funds
By /s/ William F. Quinn
--------------------
William F. Quinn
President
Date: July 1, 2008
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/ William F. Quinn
--------------------
William F. Quinn
President
Date: July 1, 2008
By /s/ Rebecca L. Harris
---------------------
Rebecca L. Harris
Treasurer
Date: July 1, 2008