-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SSrjOWrG8hbLgDuXfVRcsOeDR/Cj8ZSTRDoaoQFV/eix6vN7KkIRDCBjOUcllMgb 98eR3ofc86wX9INPyfEVUA== 0000809593-09-000024.txt : 20090707 0000809593-09-000024.hdr.sgml : 20090707 20090707163732 ACCESSION NUMBER: 0000809593-09-000024 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090430 FILED AS OF DATE: 20090707 DATE AS OF CHANGE: 20090707 EFFECTIVENESS DATE: 20090707 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN BEACON FUNDS CENTRAL INDEX KEY: 0000809593 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04984 FILM NUMBER: 09933615 BUSINESS ADDRESS: STREET 1: 4151 AMON CARTER BOULEVARD STREET 2: MD 2450 CITY: FORT WORTH STATE: TX ZIP: 76155 BUSINESS PHONE: 8179673509 MAIL ADDRESS: STREET 1: 4151 AMON CARTER BOULEVARD STREET 2: MD 2450 CITY: FORT WORTH STATE: TX ZIP: 76155 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN AADVANTAGE FUNDS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN EAGLE FUNDS DATE OF NAME CHANGE: 19890813 0000809593 S000000718 American Beacon Balanced Fund C000002089 Institutional Class AADBX C000002090 Investor Class AABPX C000002091 AMR Class AABNX C000004802 Advisor Class ABLSX 0000809593 S000001091 American Beacon Large Cap Value Fund C000002969 Institutional Class AADEX C000002970 Investor Class AAGPX C000002971 AMR Class AAGAX C000004803 Advisor Class AVASX C000076735 Retirement Class ALCRX 0000809593 S000001092 American Beacon Large Cap Growth Fund C000002972 Institutional Class ALCGX C000002973 AMR Class ALFIX 0000809593 S000001818 American Beacon Small Cap Value Fund C000004768 Institutional Class AVFIX C000004769 Investor Class AVPAX C000004770 Advisor Class AASSX C000004771 AMR Class AASVX C000076736 Retirement Class ASCVX 0000809593 S000001819 American Beacon Mid-Cap Value Fund C000004772 AMR Class AMDIX C000011075 Institutional Class AACIX C000033163 Investor Class AMPAX C000050486 Advisor Class AMCSX 0000809593 S000001821 American Beacon Enhanced Income Fund C000004774 Investor Class AANPX 0000809593 S000001825 American Beacon International Equity Fund C000004784 Institutional Class AAIEX C000004785 Investor Class AAIPX C000004786 Advisor Class AAISX C000004787 AMR Class AAIAX C000076737 Retirement Class ABIRX 0000809593 S000001826 American Beacon Emerging Markets Fund C000004788 Institutional Class AEMFX C000004789 Investor Class AAEPX C000004790 AMR Class AAMRX 0000809593 S000001830 American Beacon High Yield Bond Fund C000004795 Institutional Class AYBFX C000004796 Investor Class AHYPX C000052225 AMR Class ABMRX 0000809593 S000001831 American Beacon Intermediate Bond Fund C000004798 Institutional Class AABDX C000004799 Investor Class ABIPX 0000809593 S000001832 American Beacon Short-Term Bond Fund C000004800 Institutional Class AASBX C000004801 Investor Class AALPX N-CSRS 1 ncsr0409.txt BEACON NCSR APR 2009 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, 2009 Date of reporting period: April 30, 2009 ITEM 1. REPORTS TO STOCKHOLDERS. GUIDANCE | VISION | EXPERIENCE (AMERICAN BEACON FUNDS(SM) LOGO) Semi-Annual Report April 30, 2009 LARGE CAP VALUE FUND (GRAPHIC) About American Beacon Advisors Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management. Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company. Contents Message from American Beacon.................................... 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, 2009 (PHOTO OF GENE L. NEEDLES, JR.) FELLOW SHAREHOLDERS, Please allow me to introduce myself. I am Gene Needles, Jr., the new Executive Vice President for the American Beacon Funds. I have over 27 years of financial services experience with some of the country's largest fund complexes, and I will be primarily responsible for daily operations as well as distribution of the American Beacon Funds. I am very excited to be a part of American Beacon and look forward to building a lasting relationship with all of our shareholders. Enclosed is the American Beacon Large Cap Value Fund Semi-Annual Report for the six months ended April 30, 2009. During the six-month period covered by this report, the capital markets experienced widespread volatility brought on by concern over the world-wide credit crisis. The American Beacon Large Cap Value Fund - Institutional Class reported a return of -8.46% for the six-month period ended April 30, 2009, while the S&P 500 and Dow Jones Industrial Average Indices reported returns of -8.53% and -10.79%, respectively, for this period. In the past, long-term investors have been rewarded for their patience. We continue to believe the Fund's fundamental investment strategy and lower than average expense ratio will continue to serve the Fund well over time. 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 Funds. Sincerely, /s/ Gene L. Needles, Jr. ---------------------------------------- Gene L. Needles, Jr. Executive Vice President American Beacon Funds 1 DOMESTIC EQUITY MARKET OVERVIEW APRIL 30, 2009 (UNAUDITED) A tale of two markets might be the most accurate description of the six-month period ended April 30, 2009. The equity markets were down overall for the six months, as represented by a decline of 8.5% for the S&P 500, but for the first four months, the S&P 500 fell a breath-taking 23.2%. Through February, bleak economic performance around the world set the background for equity market declines. In addition to the well publicized economic distress in the U.S., the period featured news of staggering declines in Japanese manufacturing and sharp declines in Asian and Eastern European exports. The U.K. and Western Europe continued to be weak, with the Bank of England purchasing U.K. government debt in an aggressive move to quantitative easing as its benchmark interest rate came close to zero. Latin America slowed down, with Mexico in a deep recession. China was the global exception with domestic demand appearing to hold up and loan creation remaining solid. Starting in March, equities staged a dramatic recovery in the face of continued poor economic data, providing support for the view that valuations ultimately drive stock prices. The U.S. government's announcement of details on initiatives to stabilize the banking and housing market appeared to spark the rally. Although some economic data points began to show a hint of economic stability (or at least a deceleration in the rate of decline) toward the end of April, it is still too early to call an improvement in the economy. However, it is apparent that because the market was trading at such deeply depressed, pessimistic levels, the mere hint of a recovery was enough to cause a significant rally. Thus for March and April, the S&P 500 was up 19.2%, unwinding a large part of the earlier months' declines. 2 PERFORMANCE OVERVIEW AMERICAN BEACON LARGE CAP VALUE FUND(SM) APRIL 30, 2009 (UNAUDITED) The Institutional Class of the Large Cap Value Fund returned -8.46% for the six months ended April 30, 2009, outperforming the Russell 1000(R) Value Index ("Index") return of -13.27%, but slightly lagging the Lipper Large-Cap Value Funds Index return of -8.44%.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 --------------------------------------- 6 MONTHS* 1 YEAR 5 YEARS 10 YEARS --------- ------ ------- -------- Institutional Class(1,4) ...... -8.46% -38.28% -1.55% 0.69% Investor Class(1,4) ........... -8.59% -38.44% -1.81% 0.43% Advisor Class(1,2,4) .......... -8.68% -38.58% -2.00% 0.33% AMR Class(1,4) ................ -8.34% -38.11% -1.30% 0.96% Lipper Large-Cap Value Funds Index (3) ......... -8.44% -35.93% -2.69% -1.50% Russell 1000 Value Index (3) .. -13.27% -39.21% -2.50% -0.50%
* Not annualized 1. The Investor and Advisor Classes were formerly known as the PlanAhead and Service Classes, respectively. 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 Investor Class from 4/30/99 up to 6/1/05, the inception date of the Advisor Class, and the returns of the Advisor Class since its inception. Expenses of the Advisor Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the Advisor Class been in existence since 4/30/99. A portion of the fees charged to the Advisor 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(R) Value Index and Russell 1000 Index are registered trademarks 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, Investor, Advisor and AMR Class shares was 0.59%, 0.97%, 1.09% 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 outperformed the Index as both sector allocation and stock selection added value relative to the Index. The Fund's four times overweighting in Information Technology, the best performing sector in the Index, and a significant underweighting in Financials, the worst performing sector in the Index, added the most value relative to the Index. The positive impact from the above mentioned sector exposures was somewhat offset by an overweight in Industrials and an underweight in the Consumer Discretionary sector, which detracted from relative performance. From a stock selection standpoint, the Fund's holdings in the Industrials, Health Care, and Consumer Discretionary sectors were responsible for a large portion of the excess performance. Companies with the greatest positive impact in the Industrials sector were Honeywell International (up 4.6%), Thomas & Betts (up 5.3% for the period the Fund owned the security), and Northrop (up 5.2%). In the Health Care sector, Wyeth (up 33.9%), Hospira (up 18.2%), and Schering Plough (up 60.6%) added the most value relative to the Index. JC Penney (up 30.7%) and Gentex (up 42.5%) were major contributors in the Consumer Discretionary sector. This excess performance relative to the Index was partially offset by poor security selection in the Financials and Information Technology sectors. Bank of America (down 62.2%), Citigroup (down 77.6%), and Synovus Financial (down 68.4%) were the largest detractors in the Financials sector. In the Information Technology sector, Hewlett Packard (down 5.5%) and Intel (up 0.5%) hurt performance most. 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, 2009 (UNAUDITED) TOP TEN HOLDINGS
% OF NET ASSETS ---------- International Business Machines Corp. .. 3.3% JPMorgan Chase & Co. ................... 2.8% ConocoPhillips.......................... 2.7% AT&T, Inc. ............................. 2.5% Wyeth Corp. ............................ 2.0% The Home Depot, Inc. ................... 1.8% Verizon Communications, Inc. ........... 1.8% Hewlett-Packard Co. .................... 1.6% Dominion Resources, Inc. ............... 1.6% Philip Morris International, Inc. ...... 1.5%
SECTOR ALLOCATION
% OF EQUITIES -------- Information Technology.................. 15.5% Financials.............................. 15.4% Industrials............................. 13.0% Health Care............................. 12.7% Consumer Staples........................ 11.6% Consumer Discretionary.................. 9.3% Energy.................................. 8.0% Utilities............................... 6.3% Telecommunication Services.............. 5.2% Materials............................... 3.0%
4 FUND EXPENSES AMERICAN BEACON LARGE CAP VALUE FUND(SM) APRIL 30, 2009 (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, 2008 through April 30, 2009. 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 Investor 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 Investor 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* 11/1/08 4/30/09 11/1/08-4/30/09 --------- --------- --------------- INSTITUTIONAL CLASS Actual $1,000.00 $ 915.36 $2.85 Hypothetical $1,000.00 $1,021.82 $3.01 (5% return before expenses) INVESTOR CLASS Actual $1,000.00 $ 914.13 $4.08 Hypothetical $1,000.00 $1,020.53 $4.31 (5% return before expenses) ADVISOR CLASS Actual $1,000.00 $ 913.25 $5.22 Hypothetical $1,000.00 $1,019.34 $5.51 (5% return before expenses) AMR CLASS Actual $1,000.00 $ 916.63 $1.66 Hypothetical $1,000.00 $1,023.06 $1.76 (5% return before expenses)
* Expenses are equal to the Fund's annualized expense ratios for the six-month period of 0.60%, 0.86%, 1.10% and 0.35% for the Institutional, Investor, Advisor 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 (181) by days in the year (365) to reflect the half year period. 5 AMERICAN BEACON LARGE CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ----------- ----------- (DOLLARS IN THOUSANDS) COMMON STOCKS - 94.52% CONSUMER DISCRETIONARY - 8.79% AUTO COMPONENTS - 0.59% Gentex Corp. + ............................... 2,365,000 $ 31,620 ----------- HOTELS, RESTAURANTS & LEISURE - 1.34% Carnival Corp. ............................... 1,941,200 52,180 Wyndham Worldwide Corp. ...................... 1,680,680 19,630 ----------- 71,810 ----------- HOUSEHOLD DURABLES - 0.36% Fortune Brands, Inc. ......................... 493,500 19,399 ----------- INTERNET & CATALOG RETAIL - 0.14% eBay, Inc. ## ................................ 464,900 7,657 ----------- MEDIA - 1.89% CBS Corp. .................................... 3,099,800 21,823 Interpublic Group of Cos., Inc. ## ........... 843,700 5,281 Time Warner, Inc. ............................ 1,500,000 32,745 Walt Disney Co. Ltd. ......................... 1,318,300 28,871 Warner Music Group Corp. ..................... 2,322,000 12,492 ----------- 101,212 ----------- MULTILINE RETAIL - 1.58% J.C. Penney Company, Inc. .................... 1,634,800 50,172 Target Corp. ................................. 768,700 31,717 Wal-Mart Stores, Inc. ........................ 63,700 3,210 ----------- 85,099 ----------- SPECIALTY RETAIL - 2.00% Gap, Inc. .................................... 416,100 6,466 The Home Depot, Inc. ......................... 3,732,467 98,239 Limited Brands, Inc. ......................... 214,900 2,454 ----------- 107,159 ----------- TEXTILES & APPAREL - 0.89% Polo Ralph Lauren Corp. + .................... 890,000 47,918 ----------- TOTAL CONSUMER DISCRETIONARY .................... 471,874 ----------- CONSUMER STAPLES - 11.02% BEVERAGES - 2.11% Coca-Cola Co. ................................ 429,300 18,481 Diageo plc, ADR .............................. 1,626,200 77,814 PepsiCo, Inc. ................................ 339,900 16,913 ----------- 113,208 ----------- FOOD & DRUG RETAILING - 1.65% Safeway, Inc. ................................ 2,330,400 46,025
SHARES VALUE ----------- ----------- (DOLLARS IN THOUSANDS) Sysco Corp. .................................. 1,829,400 $ 42,680 ----------- 88,705 ----------- FOOD PRODUCTS - 3.06% ConAgra Foods, Inc. .......................... 2,600,000 46,020 H.J. Heinz Co. ............................... 497,100 17,110 Hershey Co. .................................. 1,025,550 37,063 Kellogg Co. .................................. 990,000 41,689 Kraft Foods, Inc. ............................ 703,013 16,451 Unilever plc, ADR + .......................... 311,900 6,070 ----------- 164,403 ----------- HOUSEHOLD PRODUCTS - 0.33% The Procter & Gamble Co. ..................... 355,800 17,591 ----------- PERSONAL PRODUCTS - 0.71% L'Oreal SA + ................................. 2,675,000 37,878 ----------- TOBACCO - 3.16% Altria Group, Inc. ........................... 1,312,900 21,440 Imperial Tobacco Group plc, ADR .............. 1,394,100 63,362 Lorillard, Inc. .............................. 71,100 4,488 Philip Morris International, Inc. ............ 2,212,400 80,089 ----------- 169,379 ----------- TOTAL CONSUMER STAPLES .......................... 591,164 ----------- ENERGY - 7.55% ENERGY EQUIPMENT & SERVICES - 0.71% Weatherford International Ltd. ## ............ 2,300,000 38,249 ----------- OIL & GAS - 6.84% Chevron Corp. ................................ 976,262 64,531 ConocoPhillips ............................... 3,562,296 146,054 Devon Energy Corp. ........................... 1,132,000 58,694 Duke Energy Corp. ............................ 2,260,900 31,223 Occidental Petroleum Corp. ................... 849,700 47,829 Royal Dutch Shell plc, ADR ................... 403,600 18,364 ----------- 366,695 ----------- TOTAL ENERGY .................................... 404,944 ----------- FINANCIALS - 14.42% BANKS - 7.66% Bank of America Corp. ........................ 7,773,490 69,417 Bank of New York Mellon Corp. ................ 249,100 6,347 Citigroup, Inc. .............................. 1,971,238 6,012 Comerica, Inc. ............................... 139,000 2,916 East West Bancorp, Inc. ...................... 2,068,000 14,124 JP Morgan Chase & Co. ........................ 4,584,098 151,275
See accompanying notes 6 AMERICAN BEACON LARGE CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ----------- ----------- (DOLLARS IN THOUSANDS) KeyCorp ...................................... 781,874 $ 4,809 M&T Bank Corp. ............................... 174,560 9,156 PNC Financial Services Group, Inc. + ......... 797,949 31,679 SunTrust Banks, Inc. ......................... 123,400 1,782 Synovus Financial Corp. + .................... 4,516,000 14,587 U.S. Bancorp ................................. 1,457,660 26,559 Washington Mutual, Inc. ...................... 1,765,000 -- Wells Fargo & Co. ............................ 3,071,358 61,458 Zions Bancorporation ......................... 1,000,000 10,930 ----------- 411,051 ----------- DIVERSIFIED FINANCIALS - 3.35% American Express Co. ......................... 2,195,800 55,378 Capital One Financial Corp. .................. 1,207,400 20,212 Charles Schwab Corp. ......................... 1,247,620 23,056 Discover Financial Services .................. 152,550 1,240 Mitsubishi UFJ Financial Group, Inc., ADR .... 8,256,000 44,748 Morgan Stanley Dean Witter & Co. ............. 1,000,000 23,640 SLM Corp. ## ................................. 2,435,500 11,763 ----------- 180,037 ----------- INSURANCE - 3.41% ACE Ltd. ..................................... 1,066,800 49,414 Aflac, Inc. .................................. 779,000 22,505 Allstate Corp. ............................... 174,200 4,064 American International Group, Inc. + ......... 2,397,100 3,308 Conseco, Inc. ## ............................. 309,300 495 Genworth Financial, Inc. ..................... 508,000 1,199 Hartford Financial Services Group, Inc. + .... 694,450 7,965 MetLife, Inc. ................................ 1,149,059 34,185 Prudential Financial, Inc. ................... 109,500 3,162 Travelers Cos., Inc. ......................... 982,700 40,428 XL Capital Ltd. + ............................ 1,699,100 16,159 ----------- 182,884 ----------- TOTAL FINANCIALS ................................ 773,972 ----------- HEALTH CARE - 12.02% HEALTH CARE EQUIPMENT & SUPPLIES - 1.26% Baxter International, Inc. ................... 1,305,600 63,321 Zimmer Holdings, Inc. ## ..................... 93,500 4,113 ----------- 67,434 ----------- HEALTH CARE PROVIDERS & SERVICES - 2.69% Cardinal Health, Inc. ........................ 1,317,900 44,532 CIGNA Corp. .................................. 1,599,500 31,526 UnitedHealth Group, Inc. ..................... 813,600 19,136 Universal Health Services, Inc. .............. 624,130 31,456 WellPoint, Inc. ## ........................... 419,100 17,921 ----------- 144,571 -----------
SHARES VALUE ----------- ----------- (DOLLARS IN THOUSANDS) PHARMACEUTICALS - 8.07% Amgen, Inc. ## ............................... 392,700 $ 19,034 Bristol-Myers Squibb Co. ..................... 4,013,500 77,059 Eli Lilly & Co. .............................. 1,767,900 58,199 Hospira, Inc. ## ............................. 1,143,000 37,570 Johnson & Johnson ............................ 633,100 33,149 Merck & Co., Inc. ............................ 866,300 20,999 Pfizer, Inc. ................................. 4,806,700 64,218 Schering-Plough Corp. ........................ 650,200 14,968 Wyeth Corp. .................................. 2,540,600 107,722 ----------- 432,918 ----------- TOTAL HEALTH CARE ............................... 644,923 ----------- INDUSTRIALS - 12.30% AEROSPACE & DEFENSE - 3.81% Boeing Co. ................................... 1,904,700 76,283 Northrop Grumman Corp. ....................... 1,124,900 54,389 Raytheon Co. ................................. 1,498,700 67,786 United Technologies Corp. .................... 124,000 6,056 ----------- 204,514 ----------- AIR FREIGHT & COURIERS - 0.63% FedEx Corp. .................................. 607,200 33,979 ----------- INDUSTRIAL CONGLOMERATES - 3.98% 3M Co. ....................................... 705,600 40,643 General Electric Co. ......................... 5,743,200 72,651 Honeywell International, Inc. ................ 2,484,525 77,542 Textron, Inc. + .............................. 1,029,600 11,048 Tyco International Ltd. ...................... 485,900 11,545 ----------- 213,429 ----------- MACHINERY - 3.50% Caterpillar, Inc. + .......................... 461,400 16,417 Cummins, Inc. ................................ 162,600 5,528 Deere & Co. .................................. 1,039,000 42,869 Eaton Corp. .................................. 437,500 19,162 Illinois Tool Works, Inc. .................... 1,727,900 56,675 ITT Industries, Inc. ......................... 930,300 38,152 PACCAR, Inc. + ............................... 252,700 8,956 ----------- 187,759 ----------- TRANSPORTATION INFRASTRUCTURE - 0.38% Burlington Northern Santa Fe Corp. ........... 302,800 20,433 ----------- TOTAL INDUSTRIALS ............................... 660,114 ----------- INFORMATION TECHNOLOGY - 14.66% COMMUNICATIONS EQUIPMENT - 0.96% Alcatel-Lucent, ADR ## ...................... 1,767,700 4,419
See accompanying notes 7 AMERICAN BEACON LARGE CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ----------- ----------- (DOLLARS IN THOUSANDS) Nokia Corp., ADR ............................. 3,322,500 $ 46,980 ----------- 51,399 ----------- COMPUTERS & PERIPHERALS - 7.14% Apple Computer, Inc. ## ...................... 550,000 69,206 Dell, Inc. ## ................................ 269,700 3,134 EMC Corp. ## ................................. 4,000,000 50,120 Hewlett-Packard Co. .......................... 2,372,700 85,370 International Business Machines Corp. ........ 1,696,500 175,096 ----------- 382,926 ----------- ELECTRICAL EQUIPMENT - 0.59% Molex, Inc. - Class A ........................ 1,688,000 25,810 Molex, Inc. .................................. 339,000 5,651 ----------- 31,461 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.52% Intel Corp. .................................. 4,397,400 69,391 Tyco Electronics Ltd. ........................ 701,400 12,232 ----------- 81,623 ----------- SEMICONDUCTOR EQUIPMENT & PRODUCTS - 0.72% Texas Instruments, Inc. ...................... 2,147,200 38,779 ----------- SOFTWARE - 3.73% Adobe Systems, Inc. ## ....................... 1,500,000 41,025 CA, Inc. ..................................... 923,703 15,934 Microsoft Corp. .............................. 3,314,200 67,146 Oracle Corp. ................................. 3,943,300 76,263 ----------- 200,368 ----------- TOTAL INFORMATION TECHNOLOGY .................... 786,556 ----------- MATERIALS - 2.86% CHEMICALS - 2.74% Air Products & Chemicals, Inc. ............... 1,051,400 69,287 Dow Chemical Co. ............................. 1,071,000 17,136 E. I. du Pont de Nemours & Co. ............... 1,094,900 30,548 Eastman Chemical Co. ......................... 32,900 1,305 PPG Industries, Inc. ......................... 647,600 28,527 ----------- 146,803 ----------- METALS & MINING - 0.12% Alcoa, Inc. .................................. 698,400 6,335 ----------- TOTAL MATERIALS ................................. 153,138 ----------- TELECOMMUNICATION SERVICES - 4.92% DIVERSIFIED TELECOMMUNICATION - 4.92% AT&T, Inc. ................................... 5,135,852 131,581 Fairpoint Communications, Inc. + ............. 42,246 44 Verizon Communications, Inc. ................. 3,192,746 96,868
SHARES VALUE ----------- ----------- (DOLLARS IN THOUSANDS) Vodafone Group plc, ADR ...................... 1,930,000 $ 35,415 ----------- TOTAL TELECOMMUNICATION SERVICES ................ 263,908 ----------- UTILITIES - 5.98% ELECTRIC UTILITIES - 4.66% CenterPoint Energy, Inc. ..................... 2,029,200 21,591 Constellation Energy Group, Inc. ............. 710,100 17,099 Dominion Resources, Inc. ..................... 2,813,900 84,867 Edison International ......................... 135,300 3,857 Entergy Corp. ................................ 335,000 21,698 Exelon Corp. ................................. 385,600 17,788 FPL Group, Inc. .............................. 1,117,600 60,116 Public Service Enterprise Group, Inc. ........ 782,200 23,341 ----------- 250,357 ----------- GAS UTILITIES - 0.76% Spectra Energy Corp. ......................... 2,813,500 40,796 ----------- MULTI-UTILITIES - 0.56% Questar Corp. ................................ 1,006,000 29,898 ----------- TOTAL UTILITIES ................................. 321,051 ----------- TOTAL COMMON STOCKS ............................. 5,071,644 ----------- CONVERTIBLE PREFERRED STOCKS - 0.07% FINANCIALS - 0.07% BANKS - 0.07% East West Bancorp, Inc. ...................... 8,763 3,921 ----------- PREFERRED STOCKS - 0.07% FINANCIALS - 0.07% BANKS - 0.07% Citigroup, Inc. .............................. 219,100 3,896 ----------- SHORT TERM INVESTMENTS - 5.22% American Beacon U.S. Government Money Market Select Fund +++ .............................. 60,000,000 60,000 Columbia Government Reserve Fund ................ 190,698,556 190,698
PAR AMOUNT ----------- U.S. Treasury, 0.05%, Due 6/11/2009 # ........... $ 29,419 29,413 ----------- TOTAL SHORT TERM INVESTMENTS ....................... 280,111 -----------
See accompanying notes 8 AMERICAN BEACON LARGE CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ----------- ----------- (DOLLARS IN THOUSANDS) SECURITIES LENDING COLLATERAL - 0.97% American Beacon U.S. Government Money Market Select Fund +++ ........................... $11,112,475 $ 11,113 State Street Navigator Securities Lending Prime Portfolio ................................. 40,650,218 40,650 ----------- TOTAL SECURITIES LENDING COLLATERAL ............. 51,763 ----------- TOTAL INVESTMENTS 100.85% - (COST $7,456,107) ...... 5,411,335 LIABILITIES, NET OF OTHER ASSETS - (0.85%) ......... (45,391) ----------- TOTAL NET ASSETS - 100.00% ......................... $ 5,365,944 ===========
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, 2009. +++ The Fund is affiliated by having the same investment advisor. # At April 30, 2009, 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 .. 6,445 Jun 2009 $280,358 $39,817 ======== =======
See accompanying notes 9 AMERICAN BEACON LARGE CAP VALUE FUND STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 2009 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) ASSETS: Investments in unaffiliated securities, at value (A C) ........................... $ 5,340,222 Investments in affiliated securities, at value (B) ............................... 71,113 Receivable for investments sold .................................................. 9,646 Dividends and interest receivable ................................................ 11,216 Receivable for fund shares sold .................................................. 5,778 Receivable for tax reclaims ...................................................... 231 Receivable for variation margin on open futures contracts ........................ 267 Prepaid expenses ................................................................. 122 ------------ TOTAL ASSETS .................................................................. 5,438,595 ------------ LIABILITIES: Payable for investments purchased ................................................ 8,656 Payable upon return of securities loaned ......................................... 51,763 Payable for fund shares redeemed ................................................. 6,429 Management and investment advisory fees payable (Note 2) ......................... 3,306 Administrative service and service fees payable .................................. 1,985 Other liabilities ................................................................ 512 ------------ TOTAL LIABILITIES ............................................................. 72,651 ------------ NET ASSETS .......................................................................... $ 5,365,944 ============ ANALYSIS OF NET ASSETS: Paid-in-capital .................................................................. 9,156,904 Undistributed net investment income .............................................. 33,025 Accumulated net realized loss .................................................... (1,819,030) Unrealized depreciation of investments, futures contracts, and foreign currency .. (2,004,955) ------------ NET ASSETS .......................................................................... $ 5,365,944 ============ SHARES OUTSTANDING (NO PAR VALUE): Institutional Class .............................................................. 132,745,170 ============ Investor Class ................................................................... 243,315,004 ============ Advisor Class .................................................................... 7,335,373 ============ AMR Class ........................................................................ 32,599,036 ============ NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE: Institutional Class .............................................................. $ 13.29 ============ Investor Class ................................................................... $ 12.66 ============ Advisor Class .................................................................... $ 12.57 ============ AMR Class ........................................................................ $ 13.14 ============ - ---------- (A) Cost of investments in unaffiliated securities $ 7,384,994 (B) Cost of investments in affiliated securities $ 71,113 (C) Market value of securities on loan $ 50,857
See accompanying notes 10 AMERICAN BEACON LARGE CAP VALUE FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED APRIL 30, 2009 (IN THOUSANDS) (UNAUDITED) INVESTMENT INCOME: Dividend income from unaffiliated securities (net of foreign taxes)* ............. $ 89,396 Dividend income from affiliated securities ....................................... 549 Interest income .................................................................. 115 Income derived from securities lending, net ...................................... 1,668 --------- TOTAL INVESTMENT INCOME .................................................... 91,728 --------- EXPENSES: Management and investment advisory fees (Note 2) ................................. 6,048 Administrative service fees (Note 2): Institutional Class ........................................................... 2,531 Investor Class ................................................................ 4,500 Advisor Class ................................................................. 129 AMR Class ..................................................................... 103 Transfer agent fees: Institutional Class ........................................................... 62 Investor Class ................................................................ 118 Advisor Class ................................................................. 3 AMR Class ..................................................................... 14 Custody and fund accounting fees ................................................. 389 Professional fees ................................................................ 107 Registration fees and expenses ................................................... 112 Service fees: Investor Class (Note 2) ....................................................... 3,890 Advisor Class (Note 2) ........................................................ 107 Distribution fees - Advisor Class (Note 2) ....................................... 107 Prospectus and shareholder reports ............................................... 369 Trustee fees ..................................................................... 186 Other expenses ................................................................... 349 --------- TOTAL EXPENSES ............................................................. 19,124 --------- NET INVESTMENT INCOME ............................................................... 72,604 --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from: Investments ................................................................... (471,113) Commission recapture (Note 1) ................................................. 161 Futures contracts ............................................................. (179,118) Change in net unrealized appreciation or depreciation of: Investments ................................................................... (123,984) Futures contracts ............................................................. 141,851 --------- NET LOSS ON INVESTMENTS .................................................... (632,203) --------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................... $(559,599) ========= * Foreign taxes .................................................................. $ 477
See accompanying notes 11 AMERICAN BEACON LARGE CAP VALUE FUND STATEMENT OF CHANGES OF NET ASSETS (IN THOUSANDS)
Six Months Ended Year Ended April 30, 2009 October 31, 2008 -------------- ---------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income ............................................................ $ 72,604 $ 171,389 Net realized loss on investments, futures contracts, and foreign currency transactions .................................................................. (650,070) (1,148,714) Change in net unrealized appreciation or (depreciation) of investments, futures contracts, and foreign currency translations .................................. 17,867 (3,031,895) ----------- ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS .......................... (559,599) (4,009,220) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Institutional Class ........................................................... (57,494) (41,356) Investor Class ................................................................ (96,586) (76,907) Advisor Class ................................................................. (2,701) (1,578) AMR Class ..................................................................... (15,992) (16,885) Net realized gain on investments: Institutional Class ........................................................... -- (71,604) Investor Class ................................................................ -- (153,834) Advisor Class ................................................................. -- (3,382) AMR Class ..................................................................... -- (26,071) ----------- ----------- NET DISTRIBUTIONS TO SHAREHOLDERS .......................................... (172,773) (391,617) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Proceeds from sales of shares .................................................... 773,893 3,966,783 Reinvestment of dividends and distributions ...................................... 164,886 370,495 Cost of shares redeemed .......................................................... (1,070,110) (2,471,194) ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ......... (131,331) 1,866,084 ----------- ----------- NET (DECREASE) IN NET ASSETS ........................................................ (863,703) (2,534,753) ----------- ----------- NET ASSETS: Beginning of period .............................................................. 6,229,647 8,764,400 ----------- ----------- END OF PERIOD * .................................................................. $ 5,365,944 $ 6,229,647 =========== =========== *Includes undistributed net investment income of .................................... $ 33,025 $ 133,193 =========== ===========
See accompanying notes 12 AMERICAN BEACON LARGE CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (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, as amended, (the "Act") as a 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 Lighthouse Holdings, Inc. and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors. Class Disclosure Prior to March 1, 2009, the Investor and Advisor Classes were known as the PlanAhead and Service Classes, respectively. 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: - ------ ----------- INSTITUTIONAL CLASS Investors making an initial investment of $2 million INVESTOR CLASS General public and investors investing through an intermediary ADVISOR CLASS Investors investing through an intermediary AMR CLASS Investors in the tax-exempt retirement and benefit plans of AMR Corporation and its affiliates
Administrative service fees, service fees and distribution fees vary amongst the classes as described more fully in footnote 2. 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. 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"). 13 AMERICAN BEACON LARGE CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) The Fund adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), effective with the beginning of the Fund's fiscal year. The 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. The three levels of the hierarchy under FAS 157 are described below: Level 1 - Quoted prices in active markets for identical securities. Level 2 - Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. Level 3 - Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. A summary of the inputs used to value the Fund's investments as of April 30, 2009 is as follows (in thousands):
Investments in Other Financial Valuation Inputs Securities Instruments* ---------------- -------------- --------------- Level 1 - Quoted prices........................ $5,381,922 $39,817 Level 2 - Other significant observable inputs.. 29,413 -- Level 3 - Significant unobservable inputs..... -- -- ---------- ------- Total.......................................... $5,411,335 $39,817 ---------- -------
* Other financial instruments are futures. 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. 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 14 AMERICAN BEACON LARGE CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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. Recently Issued Accounting Pronouncements In March 2008, FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("FAS 161"), which is effective for fiscal years and interim periods beginning after November 15, 2008. FAS 161 requires enhanced disclosures about derivative and hedging activities, including how such activities are accounted for and their effect on financial positions, performance and cash flows. The Manager is currently evaluating the impact the adoption of FAS 161 will have on the Fund's financial statements and related disclosures. 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. 15 AMERICAN BEACON LARGE CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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 0.05% 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, 2009 were as follows (dollars in thousands):
AMOUNTS PAID NET AMOUNTS MANAGEMENT FEE MANAGEMENT TO INVESTMENT RETAINED BY RATE FEE ADVISORS MANAGER - -------------- ---------- ------------- ----------- 0.175%-0.65% $6,048 $4,751 $1,297
As compensation for services provided by the Manager in connection with securities lending activities, the 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, 2009, securities lending fees paid to the Manager by the Fund were $250,191. 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 0.30% of the average daily net assets of the Institutional, Investor, and Advisor Classes of the Fund and 0.05% of the average daily net assets of the AMR Class of the Fund. Distribution Plans The Fund, except for the Advisor 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 Advisor 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 Advisor Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance. Service Plans The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor and Advisor Classes. As compensation for performing the duties required 16 AMERICAN BEACON LARGE CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) under the Service Plans, the Manager receives up to 0.375% of the average daily net assets of the Investor Class and 0.25% of the average daily net assets of the Advisor Class of the Fund. Investment in Affiliated Funds The Fund may invest in the American Beacon Money Market Select Fund (the "MM Select Fund") and the American Beacon US Government Money Market Select Fund (the "USG Select Fund"), (collectively the "Select Funds"). Cash collateral received by the Fund in connection with securities lending may be invested in the Select Funds. The Select Funds and the Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the Select Funds and receives from the Select Funds an annualized fee of 0.09% of its average daily net assets of the Select Funds. During the six months ended April 30, 2009, the Manager earned fees from the Select Funds totaling $40,946 on the Fund's direct investment in the Select Funds and $17,097 from the Fund's securities lending collateral invested in the Select Funds. Interfund Lending Program Pursuant to an exemptive order by the Securities and Exchange Commission ("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, 2009, 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, 2009, there were no fees waived or reimbursed expenses subject to potential recovery. 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, 2008 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, 2009 and the fiscal year ended October 31, 2008 were as follows (in thousands): 17 AMERICAN BEACON LARGE CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED)
SIX MONTHS ENDED YEAR ENDED APRIL 30, OCTOBER 31, 2009 2008 ---------------- ------------- (unaudited) DISTRIBUTIONS PAID FROM: ORDINARY INCOME* Institutional Class .. $ 57,494 $ 65,641 Investor Class ....... 96,586 129,081 Advisor Class ........ 2,701 2,725 AMR Class ............ 15,992 25,728 LONG-TERM CAPITAL GAIN Institutional Class .. -- 47,318 Investor Class ....... -- 101,660 Advisor Class ........ -- 2,235 AMR Class ............ -- 17,229 -------- -------- TOTAL DISTRIBUTIONS PAID ... $172,773 $391,617 ======== ========
* For tax purposes, short-term capital gains are considered ordinary income distributions. As of April 30, 2009, the components of distributable earnings on a tax basis were as follows (in thousands): Cost basis of investments for federal income tax purposes .. $ 7,699,793 Unrealized appreciation .................................... 167,091 Unrealized depreciation .................................... (2,455,549) ----------- Net unrealized appreciation/(depreciation) ................. (2,288,458) Undistributed ordinary income .............................. 33,025 Undistributed long-term gain/(loss) ........................ (1,535,584) ----------- Distributable earnings ..................................... $(3,791,017) ===========
Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation/(depreciation) are attributable primarily to the tax deferral of losses from wash sales and the realization for tax purposes of unrealized gains/(losses) on certain derivative instruments. Due to inherent differences in the recognition of income, expenses and realized gains/losses under U.S. 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, 2009 (in thousands): Paid-in-capital............................................. $ 1 Undistributed net investment income......................... 1 Accumulated net realized gain (loss)........................ (2) Unrealized appreciation (depreciation) of investments, futures contracts and foreign currency................... --
At April 30, 2009, the capital loss carry forward position of the Fund for federal income tax purposes was $ 1,044,692 and $490,892 expiring in 2016 and 2017, respectively. 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, 2009 were (in thousands) $920,501 and $664,592, respectively. 18 AMERICAN BEACON LARGE CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) A summary of the Fund's direct transactions in the Select Funds for the six months ended April 30, 2009 is set forth below (in thousands):
OCTOBER 31, 2008 APRIL 30, 2009 AFFILIATE SHARES/MARKET VALUE PURCHASES SALES SHARES/MARKET VALUE - --------- ------------------- --------- -------- ------------------- MM Select Fund $362,064 $ -- $362,064 $ -- USG Select Fund $ -- $60,000 $ -- $60,000
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 monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral. The amount of this temporary difference at April 30, 2009 is disclosed as the calculated mark in the table below. To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the "Agent") in money market mutual funds and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retain 75%, 15%, and 10%, respectively, of the income generated from securities lending. While securities are on loan, the Fund continues to receive any income associated with that security and any gain or loss in the market price that may occur during the term of the loan. Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default. At April 30, 2009, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):
MARKET VALUE OF TOTAL VALUE OF SECURITIES ON LOAN NON-CASH COLLATERAL CASH COLLATERAL POSTED BY BORROWER CALCULATED MARK COLLATERAL - ------------------ ------------------- ---------------------------------- --------------- -------------- $50,857 -- $51,763 619 $52,382
Cash collateral is listed in the Fund's Schedule of Investments and included in the Statement of Assets and Liabilities. Income earned on these investments is included in Income derived from securities lending in the Statement of Operations. 19 AMERICAN BEACON LARGE CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund's Schedule of Investments or Statement of Assets and Liabilities. 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, 2009
INSTITUTIONAL CLASS INVESTOR CLASS ADVISOR CLASS AMR CLASS ------------------- ------------------- ----------------- ----------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------- --------- ------ -------- ------ -------- Shares sold ................ 21,324 $ 271,189 38,901 $ 474,982 987 $ 11,867 1,258 $ 15,855 Reinvestment of dividends .. 4,043 53,008 7,465 93,236 213 2,650 1,236 15,992 Shares redeemed ............ (28,427) (361,263) (54,660) (657,760) (872) (10,414) (3,314) (40,673) ------ --------- ------- --------- ---- -------- ------ -------- Net increase (decrease) in shares outstanding ...... (3,060) $ (37,066) (8,294) $ (89,542) 328 $ 4,103 (820) $ (8,826) ====== ========= ======= ========= ==== ======== ====== ========
Year Ended October 31, 2008
INSTITUTIONAL CLASS INVESTOR CLASS ADVISOR CLASS AMR CLASS -------------------- --------------------- ----------------- ------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- ---------- ------- ----------- ------ -------- ------ --------- Shares sold ................ 72,124 $1,522,430 113,619 $ 2,297,576 5,559 $111,669 1,693 $ 35,108 Reinvestment of dividends .. 4,204 99,590 9,867 222,989 220 4,960 1,833 42,956 Shares redeemed ............ (36,318) (729,713) (81,231) (1,524,704) (2,814) (55,162) (7,797) (161,615) ------- ---------- ------- ----------- ------ -------- ------ --------- Net increase (decrease) in shares outstanding ...... 40,010 $ 892,307 42,255 $ 995,861 2,965 $ 61,467 (4,271) $ (83,551) ======= ========== ======= =========== ====== ======== ====== =========
20 AMERICAN BEACON LARGE CAP VALUE FUND FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGH THE PERIOD)
Institutional Class ------------------------------------------------------------------------- Six Months Year Ended October 31, Ended April -------------------------------------------------------- 30, 2009 2008 2007 2006 2005 2004 ------------ ---------- ---------- -------- -------- ------- (unaudited) Net asset value, beginning of period ............. $ 15.01 $ 26.03 $ 23.77 $ 21.00 $ 18.23 $ 15.62 ---------- ---------- ---------- -------- -------- ------- Income from investment operations: Net investment income(A,B) .................... 0.20 0.51 0.40 0.31 0.28 0.26 Net gains (losses) on securities (both realized and unrealized) ............................ (1.48) (10.41) 2.78 3.48 2.74 2.62 ---------- ---------- ---------- -------- -------- ------- Total income (loss) from investment operations ... (1.28) (9.90) 3.18 3.79 3.02 2.88 ---------- ---------- ---------- -------- -------- ------- Less distributions: Dividends from net investment income .......... (0.44) (0.41) (0.31) (0.26) (0.25) (0.27) Distributions from net realized gains on securities ................................. -- (0.71) (0.61) (0.76) -- -- ---------- ---------- ---------- -------- -------- ------- Total distributions .............................. (0.44) (1.12) (0.92) (1.02) (0.25) (0.27) ---------- ---------- ---------- -------- -------- ------- Net asset value, end of period ................... $ 13.29 $ 15.01 $ 26.03 $ 23.77 $ 21.00 $ 18.23 ========== ========== ========== ======== ======== ======= Total return ..................................... (8.46)%(C) (39.59)% 13.76% 18.69% 16.64% 18.59% ========== ========== ========== ======== ======== ======= Ratios and supplemental data: Net assets, end of period (in thousands) ...... $1,764,808 $2,038,539 $2,493,451 $958,830 $201,111 $48,451 Ratios to average net assets (annualized): Expenses, net of waivers ................... 0.60% 0.58% 0.59% 0.60% 0.60% 0.66% Expenses, before waivers ................... 0.60% 0.58% 0.59% 0.60% 0.60% 0.66% Net investment income, net of waivers ...... 2.93% 2.19% 1.82% 1.86% 1.58% 1.49% Net investment income (loss), before waivers ................................. 2.93% 2.19% 1.82% 1.86% 1.58% 1.49% Portfolio turnover rate ....................... 14%(C) 28% 20% 26% 25% 29%
(A) Through October 31, 2005, net investment income was calculated by subtracting class expenses per share from the Fund's net investment income per share before class expenses. (B) For purposes of this calculation, through October 31, 2007, the change in undistributed net investment income per share was derived by dividing the change in undistributed net investment income by average shares outstanding. (C) Not annualized. 21 AMERICAN BEACON LARGE CAP VALUE FUND FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Investor Class ---------------------------------------------------------------------------- Six Months Year Ended October 31, Ended April ----------------------------------------------------------- 30, 2009 2008 2007 2006 2005 2004 ----------- ---------- ---------- ---------- --------- ------- (unaudited) Net asset value, beginning of period ............. $ 14.29 $ 24.83 $ 22.74 $ 20.16 $ 17.54 $ 15.05 ---------- ---------- ---------- ---------- -------- ------- Income from investment operations: Net investment income(A, B) ................... 0.17 0.41 0.35 0.28 0.27 0.23 Net gains (losses) on securities (both realized and unrealized) ................... (1.40) (9.88) 2.63 3.31 2.58 2.49 ---------- ---------- ---------- ---------- -------- ------- Total income (loss) from investment operations ... (1.23) (9.47) 2.98 3.59 2.85 2.72 ---------- ---------- ---------- ---------- -------- ------- Less distributions: Dividends from net investment income .......... (0.40) (0.36) (0.28) (0.25) (0.23) (0.23) Distributions from net realized gains on securities ................................. -- (0.71) (0.61) (0.76) -- -- ---------- ---------- ---------- ---------- -------- ------- Total distributions .............................. (0.40) (1.07) (0.89) (1.01) (0.23) (0.23) ---------- ---------- ---------- ---------- -------- ------- Net asset value, end of period ................... $ 12.66 $ 14.29 $ 24.83 $ 22.74 $ 20.16 $ 17.54 ========== ========== ========== ========== ======== ======= Total return ..................................... (8.59)%(C) (39.72)% 13.46% 18.44% 16.33% 18.26% ========== ========== ========== ========== ======== ======= Ratios and supplemental data: Net assets, end of period (in thousands) ...... $3,080,661 $3,594,565 $5,198,835 $2,586,410 $526,357 $51,489 Ratios to average net assets (annualized): Expenses, net of waivers ................... 0.86% 0.83% 0.83% 0.85% 0.86% 0.94% Expenses, before waivers ................... 0.86% 0.83% 0.83% 0.85% 0.86% 0.94% Net investment income, net of waivers ...... 2.67% 1.94% 1.59% 1.61% 1.30% 1.21% Net investment income (loss), before waivers ................................. 2.67% 1.94% 1.59% 1.61% 1.30% 1.21% Portfolio turnover rate ....................... 14%(C) 28% 20% 26% 25% 29%
(A) Through October 31, 2005, net investment income was calculated by subtracting class expenses per share from the Fund's net investment income per share before class expenses. (B) For purposes of this calculation, through October 31, 2007, the change in undistributed net investment income per share was derived by dividing the change in undistributed net investment income by average shares outstanding. (C) Not annualized. 22 AMERICAN BEACON LARGE CAP VALUE FUND FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGH THE PERIOD)
Advisor Class ----------------------------------------------------- Six Months May Ended Year Ended October 31, 31 to April 30, ---------------------------- October 2009 2008 2007 2006 31, 2005 ----------- ------- ------- ------- -------- (unaudited) Net asset value, beginning of period ............. $ 14.19 $ 24.70 $ 22.64 $ 20.13 $ 19.33 ------- ------- ------- ------- ------- Income from investment operations: Net investment income(A,B) .................... 0.15 0.32 0.28 0.26 0.01 Net gains (losses) on securities (both realized and unrealized) ............................ (1.39) (9.79) 2.62 3.27 0.79 ------- ------- ------- ------- ------- Total income (loss) from investment operations ... (1.24) (9.47) 2.90 3.53 0.80 ------- ------- ------- ------- ------- Less distributions: Dividends from net investment income .......... (0.38) (0.33) (0.23) (0.26) -- Distributions from net realized gains on securities ................................. -- (0.71) (0.61) (0.76) -- ------- ------- ------- ------- ------- Total distributions .............................. (0.38) (1.04) (0.84) (1.02) -- ------- ------- ------- ------- ------- Net asset value, end of period ................... $ 12.57 $ 14.19 $ 24.70 $ 22.64 $ 20.13 ======= ======= ======= ======= ======= Total return ..................................... (8.68)%(C) (39.87)% 13.16% 18.18% 4.14% ======= ======= ======= ======= ======= Ratios and supplemental data: Net assets, end of period (in thousands) ...... $92,208 $99,416 $99,854 $39,077 $11,604 Ratios to average net assets (annualized): Expenses, net of waivers ................... 1.10% 1.08% 1.08% 1.09% 1.14%(D) Expenses, before waivers ................... 1.10% 1.08% 1.08% 1.09% 1.77%(D) Net investment income, net of waivers ...... 2.42% 1.69% 1.32% 1.39% 1.72%(D) Net investment income (loss), before waivers ................................. 2.42% 1.69% 1.32% 1.39% 1.09%(D) Portfolio turnover rate ....................... 14%(C) 28% 20% 26% 25%(E)
(A) Through October 31, 2005, net investment income was calculated by subtracting class expenses per share from the Fund's net investment income per share before class expenses. (B) For purposes of this calculation, through October 31, 2007, the change in undistributed net investment income per share was derived by dividing the change in undistributed net investment income by average shares outstanding. (C) Not annualized. (D) Annualized. (E) Portfolio turnover rate is for the period from November 1, 2004 through October 31, 2005. 23 AMERICAN BEACON LARGE CAP VALUE FUND FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
AMR Class --------------------------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ------------------------------------------------------ 2009 2008 2007 2006 2005 2004 ----------- -------- -------- ---------- -------- -------- (unaudited) Net asset value, beginning of period ............. $ 14.88 $ 25.80 $ 23.55 $ 20.78 $ 18.02 $ 15.44 -------- -------- -------- ---------- -------- -------- Income from investment operations: Net investment income(A, B) ................... 0.20 0.51 0.45 0.35 0.31 0.30 Net gains (losses) on securities (both realized and unrealized) ............................ (1.45) (10.26) 2.76 3.47 2.73 2.58 -------- -------- -------- ---------- -------- -------- Total income (loss) from investment operations ... (1.25) (9.75) 3.21 3.82 3.04 2.88 -------- -------- -------- ---------- -------- -------- Less distributions: Dividends from net investment income .......... (0.49) (0.46) (0.35) (0.29) (0.28) (0.30) Distributions from net realized gains on securities ................................. -- (0.71) (0.61) (0.76) -- -- -------- -------- -------- ---------- -------- -------- Total distributions .............................. (0.49) (1.17) (0.96) (1.05) (0.28) (0.30) -------- -------- -------- ---------- -------- -------- Net asset value, end of period ................... $ 13.14 $ 14.88 $ 25.80 $ 23.55 $ 20.78 $ 18.02 ======== ======== ======== ========== ======== ======== Total return ..................................... (8.34)%(C) (39.43)% 14.03% 19.08% 16.95% 18.89% ======== ======== ======== ========== ======== ======== Ratios and supplemental data: Net assets, end of period (in thousands) ...... $428,267 $497,127 $972,260 $1,024,899 $848,219 $696,206 Ratios to average net assets (annualized): Expenses, net of waivers ................... 0.35% 0.32% 0.32% 0.34% 0.35% 0.39% Expenses, before waivers ................... 0.35% 0.32% 0.32% 0.34% 0.35% 0.39% Net investment income, net of waivers ...... 3.18% 2.44% 2.13% 2.18% 1.87% 1.79% Net investment income (loss), before waivers ................................. 3.18% 2.44% 2.13% 2.18% 1.87% 1.79% Portfolio turnover rate ....................... 14%(C) 28% 20% 26% 25% 29%
(A) Through October 31, 2005, net investment income was calculated by subtracting class expenses per share from the Fund's net investment income per share before class expenses. (B) For purposes of this calculation, through October 31, 2007, the change in undistributed net investment income per share was derived by dividing the change in undistributed net investment income by average shares outstanding. (C) Not annualized. 24 This page intentionally left blank. 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) BY E-MAIL: american_beacon.funds@ambeacon.com (GRAPHIC) BY TELEPHONE: Institutional Class Call (800) 658-5811 AMR Class(SM) Call (800) 345-2345 Investor Class(R) and Advisor Class Call (800) 388-3344 AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULES In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission ("SEC") on Form N-Q as of the first and third fiscal quarters. The Fund's Forms N-Q are available on the SEC's website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC's Public Reference Room, 450 Fifth Street, NW, Washington, DC 20549. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete 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. (GRAPHIC) ON THE INTERNET: Visit our website at www.americanbeaconfunds.com (GRAPHIC) BY MAIL: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 AVAILABILITY OF PROXY VOTING POLICY AND RECORDS A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund's Statement of Additional Information, is available free of charge on the Fund's website (www.americanbeaconfunds.com) and by calling 1-800-967-9009 or by accessing the SEC's website at www.sec.gov. The Fund's proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund's Forms N-PX are available on the SEC's website at www.sec.gov. The Fund's proxy voting record may also be obtained by calling 1-800-967-9009. FUND SERVICE PROVIDERS: CUSTODIAN 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 Beacon Funds and the American Beacon Large Cap Value Fund are service marks of American Beacon Advisors, Inc. SAR 4/09 00068039 GUIDANCE | VISION | EXPERIENCE (AMERICAN BEACON FUNDS(SM) LOGO) SEMI - ANNUAL REPORT (GRAPHIC) APRIL 30, 2009 SMALL CAP VALUE FUND About American Beacon Advisors Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management. Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company. Contents Message from American Beacon .................................. 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, 2009 (PHOTO OF GENE L. NEEDLES) FELLOW SHAREHOLDERS, Please allow me to introduce myself. I am Gene Needles, Jr., the new Executive Vice President for the American Beacon Funds. I have over 27 years of financial services experience with some of the country's largest fund complexes, and I will be primarily responsible for daily operations as well as distribution of the American Beacon Funds. I am very excited to be a part of American Beacon and look forward to building a lasting relationship with all of our shareholders. Enclosed is the American Beacon Funds Semi-Annual Report for the six months ended April 30, 2009 for the American Beacon Small Cap Value Fund. During the six-month period covered by this report, the capital markets experienced widespread volatility brought on by concern over the world-wide credit crisis. The American Beacon Small Cap Value Fund - Institutional Class reported a six-month return of -3.27% for the period ended April 30, 2009, while the S&P 500 and Dow Jones Industrial Average Indices reported returns of -8.53 and -10.79%, respectively, for this period. In the past, long-term investors have been rewarded for their patience. We continue to believe the Fund's fundamental investment strategy and lower than average expense ratio will continue to serve the Fund well over time. 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 Funds. Sincerely, /s/ Gene L. Needles, Jr. Gene L. Needles, Jr. Executive Vice President American Beacon Funds 1 DOMESTIC EQUITY MARKET OVERVIEW APRIL 30, 2009 (UNAUDITED) A tale of two markets might be the most accurate description of the six-month period ended April 30, 2009. The equity markets were down overall for the six months, as represented by a decline of 8.5% for the S&P 500, but for the first four months, the S&P 500 fell a breath-taking 23.2%. Through February, bleak economic performance around the world set the background for equity market declines. In addition to the well publicized economic distress in the U.S., the period featured news of staggering declines in Japanese manufacturing and sharp declines in Asian and Eastern European exports. The U.K. and Western Europe continued to be weak, with the Bank of England purchasing U.K. government debt in an aggressive move to quantitative easing as its benchmark interest rate came close to zero. Latin America slowed down, with Mexico in a deep recession. China was the global exception with domestic demand appearing to hold up and loan creation remaining solid. Starting in March, equities staged a dramatic recovery in the face of continued poor economic data, providing support for the view that valuations ultimately drive stock prices. The U.S. government's announcement of details on initiatives to stabilize the banking and housing market appeared to spark the rally. Although some economic data points began to show a hint of economic stability (or at least a deceleration in the rate of decline) toward the end of April, it is still too early to call an improvement in the economy. However, it is apparent that because the market was trading at such deeply depressed, pessimistic levels, the mere hint of a recovery was enough to cause a significant rally. Thus for March and April, the S&P 500 was up 19.2%, unwinding a large part of the earlier months' declines. 2 PERFORMANCE OVERVIEW AMERICAN BEACON SMALL CAP VALUE FUND(SM) APRIL 30, 2009 (UNAUDITED) The Institutional Class of the Small Cap Value Fund returned -3.27% for the six months ended April 30, 2009, outperforming the Russell 2000(R) Value Index ("Index") return of -12.61% and the Lipper Small-Cap Value Funds Index return of - -5.16% for the same period.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 --------------------------------------- 6 MONTHS* 1 YEAR 5 YEARS 10 YEARS --------- ------ ------- -------- Institutional Class (1, 4)............... -3.27% -31.10% -1.47% 7.21% Investor Class(1, 4).... -3.34% -31.24% -1.71% 6.94% Advisor Class(1, 2, 4).. -3.50% -31.43% -1.97% 6.76% AMR Class(1, 4)......... -3.09% -30.89% -1.20% 7.50% Lipper Small-Cap Value Funds Index(3)............. -5.16% -29.97% -0.79% 6.14% Russell 2000 Value Index (3)............ -12.61% -31.37% -1.42% 5.51%
* Not annualized (1.) The Investor and Advisor Classes were formerly known as the PlanAhead and Service Classes, respectively. 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 Investor Class from 4/30/99 up to 5/1/03 and the returns of the Advisor Class since its inception. Expenses of the Advisor Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the Advisor Class been in existence since 4/30/99. A portion of the fees charged to the Advisor Class of the Fund was waived through 2004. Performance prior to waiving fees was lower than the actual returns shown for periods through 2004. (3.) 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. (4.) The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Investor, Advisor and AMR Class shares was 0.82%, 1.19%, 1.32% and 0.57%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. The Fund outperformed the Index due to excess performance through both stock selection and sector allocation. Holdings in the Industrials, Consumer Discretionary, Energy, Health Care, and Financials sectors added value relative to the Index. Top contributors in the Industrials sector included Regal Beloit (up 26.0%) and Crane (up 45.0%). Ameristar Casinos (up 122.8%), Rent-A-Center (up 31.8%), and Gentex (up 42.5%) were a major source of excess performance in the Consumer Discretionary sector. Companies with the greatest positive impact in the Energy sector included Tidewater (up 0.6%), World Fuel Services (up 78.5%), and EXCO Resources (up 28.2%). Advanced Medical Optics (up 256.2%) and Amerigroup (up 19.5%) contributed most to the Fund's Health Care sector returns. Odyssey Re Holdings (up 18.0% for the period the Fund owned the security), PHH (up 108.2%), and Fidelity National Title (up 105.3%) added the most value in the Financials sector. The Fund's significant underweighting in Financials, the second worst performing sector in the Index, added value relative to the Index. Overweightings in Information Technology and Consumer Discretionary, the two best performing sectors in the Index, also added value. This positive impact was somewhat offset by an overweighting in Energy, the worst performing sector in the Index, which detracted value. 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, 2009 (UNAUDITED) TOP TEN HOLDINGS
% OF NET ASSETS ---------- Hanover Insurance Group, Inc. .............. 0.9% Tidewater, Inc. ............................ 0.9% Ingram Micro, Inc. ......................... 0.9% MAXIMUS, Inc. .............................. 0.8% Regal-Beloit Corp. ......................... 0.8% Portland General Electric Co. .............. 0.8% Aspen Insurance Holdings Ltd. .............. 0.8% Gentex Corp. ............................... 0.8% Vishay Intertechnology, Inc. ............... 0.8% Men's Wearhouse, Inc. ...................... 0.7%
SECTOR ALLOCATION
% OF EQUITIES ---------- Industrials................................. 21.9% Financials.................................. 21.3% Information Technology...................... 17.4% Consumer Discretionary...................... 16.0% Health Care................................. 7.0% Utilities................................... 5.6% Energy...................................... 4.1% Materials................................... 3.9% Consumer Staples............................ 2.5% Telecommunication Services.................. 0.3%
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, 2009 (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, 2008 through April 30, 2009. 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 Investor 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 Investor 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* 11/1/08 4/30/09 11/1/08-4/30/09 ---------- --------- --------------- INSTITUTIONAL CLASS Actual $1,000.00 $ 967.32 $4.00 Hypothetical $1,000.00 $1,020.73 $4.11 (5% return before expenses) INVESTOR CLASS Actual $1,000.00 $ 966.63 $5.27 Hypothetical $1,000.00 $1,019.44 $5.41 (5% return before expenses) ADVISOR CLASS Actual $1,000.00 $ 964.97 $6.48 Hypothetical $1,000.00 $1,018.20 $6.66 (5% return before expenses) AMR CLASS Actual $1,000.00 $ 969.06 $2.78 Hypothetical $1,000.00 $1,021.97 $2.86 (5% return before expenses)
* Expenses are equal to the Fund's annualized expense ratios for the six-month period of 0.82%, 1.08%, 1.33% and 0.57% for the Institutional, Investor, Advisor 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 (181) by days in the year (365) to reflect the half year period. 5 AMERICAN BEACON SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) COMMON STOCKS - 94.31% COMMUNICATIONS - 0.26% MEDIA - 0.26% AH Belo Corp. + .............................. 82,530 $ 157 Courier Corp. ................................ 84,799 1,330 Meredith Corp. + ............................. 109,190 2,738 Westwood One, Inc. ## ........................ 1,588,500 111 ---------- TOTAL COMMUNICATIONS ............................ 4,336 ---------- CONSUMER DISCRETIONARY - 15.12% AUTO COMPONENTS - 1.24% American Axle & Manufacturing Holdings, Inc. + .................................... 1,015,600 1,016 ATC Technology Corp. ## ...................... 21,600 343 Autoliv, Inc. ................................ 30,930 763 BorgWarner, Inc. + ........................... 126,463 3,661 Gentex Corp. + ............................... 1,008,810 13,488 Lear Corp. ## ................................ 779,700 624 Superior Industries International, Inc. + .... 58,500 882 ---------- 20,777 ---------- DISTRIBUTORS - 0.19% WESCO International, Inc. ## ................. 122,300 3,180 ---------- HOTELS, RESTAURANTS & LEISURE - 2.21% Ameristar Casinos, Inc. ...................... 559,500 11,481 CKE Restaurants, Inc. ## ..................... 241,200 2,308 Cracker Barrel Old Country Store, Inc. + ..... 82,811 2,701 Domino's Pizza, Inc. ## ...................... 68,300 645 Jack in the Box, Inc. ## ..................... 206,400 5,075 JAKKS Pacific, Inc. ## ....................... 183,900 2,326 Lakes Entertainment, Inc. ## ................. 28,100 88 Panera Bread Co. ## + ........................ 70,060 3,924 PF Chang's China Bistro, Inc. ## + ........... 90,160 2,721 Pinnacle Entertainment, Inc. ## + ............ 248,000 3,095 Speedway Motorsports, Inc. + ................. 183,500 2,753 ---------- 37,117 ---------- HOUSEHOLD DURABLES - 1.62% Black & Decker Corp. ......................... 32,900 1,326 Cavco Industries, Inc. ## + .................. 58,820 1,379 Ethan Allen Interiors, Inc. + ................ 242,990 3,268 Knoll, Inc. .................................. 314,800 2,229 Lancaster Colony Corp. ....................... 36,287 1,589 M.D.C. Holdings, Inc. ........................ 123,190 4,211 Russ Berrie & Co., Inc. ## ................... 35,800 68 Ryland Group, Inc. + ......................... 203,590 4,216 Stanley Works ................................ 72,600 2,761
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Tempur-Pedic International, Inc. ............. 71,532 $ 920 Whirlpool Corp. + ............................ 115,100 5,198 ---------- 27,165 ---------- INTERNET & CATALOG RETAIL - 0.32% NutriSystem, Inc. + .......................... 184,300 2,532 School Specialty, Inc. ## + .................. 38,400 721 Systemax, Inc. ## + .......................... 125,400 2,114 ---------- 5,367 ---------- LEISURE EQUIPMENT & PRODUCTS - 0.63% Brunswick Corp. + ............................ 516,000 3,086 Callaway Golf Co. ............................ 244,500 1,846 Polaris Industries, Inc. + ................... 41,600 1,391 Scholastic Corp. + ........................... 143,800 2,837 Thor Industries, Inc. ........................ 58,460 1,344 ---------- 10,504 ---------- MULTILINE RETAIL - 0.70% Big Lots, Inc. ## ............................ 237,850 6,574 BJ's Wholesale Club, Inc. ## ................. 144,330 4,812 Dillards, Inc. ## ............................ 51,600 398 ---------- 11,784 ---------- SPECIALTY RETAIL - 6.69% Aaron Rents, Inc. + .......................... 183,500 6,158 Bebe Stores, Inc. + .......................... 241,890 2,225 Cabela's, Inc. ## + .......................... 786,300 10,073 Chico's FAS, Inc. ## + ....................... 271,770 2,076 Childrens Place Retail Stores, Inc. ## + ..... 109,400 3,111 Dick's Sporting Goods, Inc. ## + ............. 183,961 3,495 Family Dollar Stores, Inc. ................... 168,000 5,576 Finish Line, Inc., Class A Shares ............ 4,355 37 Foot Locker, Inc. ............................ 794,300 9,444 Group 1 Automotive, Inc. + ................... 183,150 3,901 Gymboree Corp. ## + .......................... 289,280 9,951 Interline Brands, Inc. ## .................... 16,200 210 J Crew Group, Inc. ## + ...................... 192,970 3,321 Jos. A. Bank Clothiers, Inc. ## + ............ 62,660 2,534 Limited Brands, Inc. ......................... 325,700 3,720 Lululemon Athletica, Inc. ## ................. 129,924 1,812 MarineMax, Inc. ## ........................... 303,400 1,381 Men's Wearhouse, Inc. + ...................... 667,400 12,440 OfficeMax, Inc. .............................. 600,873 4,477 Penske Auto Group, Inc. + .................... 132,700 1,758 Pep Boys, Inc. + ............................. 9,700 72 RadioShack Corp. ............................. 671,800 9,459 Rent-A-Center, Inc. ## ....................... 296,450 5,707 Stage Stores, Inc. ........................... 129,320 1,584 Tractor Supply Co. ## + ...................... 84,410 3,409
See accompanying notes 6 AMERICAN BEACON SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Williams-Sonoma, Inc. + ...................... 301,894 $ 4,227 ---------- 112,158 ---------- TEXTILES & APPAREL - 1.52% Columbia Sportswear Co. + .................... 29,756 914 Jones Apparel Group, Inc. .................... 317,900 2,937 K-Swiss, Inc. ................................ 82,639 830 Phillips-Van Heusen Corp. .................... 140,700 4,085 Quiksilver, Inc. ## .......................... 1,948,600 3,215 Skechers U.S.A., Inc. ## + ................... 410,380 4,802 Timberland Co. ## ............................ 182,160 2,958 Volcom, Inc. ## + ............................ 59,700 805 Warnaco Group, Inc. ## ....................... 171,300 4,940 ---------- 25,486 ---------- TOTAL CONSUMER DISCRETIONARY .................... 253,538 ---------- CONSUMER STAPLES - 2.34% FOOD & DRUG RETAILING - 1.39% Casey's General Stores, Inc. ................. 166,183 4,422 Great Atlantic & Pacific Tea Co. ## .......... 5,300 39 Ingles Markets, Inc. ......................... 87,900 1,372 Ruddick Corp. ................................ 136,050 3,491 Spartan Stores, Inc. + ....................... 266,550 4,337 Whole Foods Market, Inc. + ................... 257,899 5,346 Winn-Dixie Stores, Inc. ## + ................. 373,500 4,281 ---------- 23,288 ---------- FOOD PRODUCTS - 0.70% Cal-Maine Foods, Inc. + ...................... 142,800 3,780 Corn Products International, Inc. ............ 28,000 669 Del Monte Foods Co. .......................... 173,200 1,308 Hain Celestial Group, Inc. ## + .............. 115,450 1,927 Herbalife Ltd. ............................... 43,400 860 Lance, Inc. + ................................ 41,037 950 Ralcorp Holdings, Inc. ## .................... 40,810 2,333 ---------- 11,827 ---------- TOBACCO - 0.25% Alliance One International, Inc. ## .......... 198,500 744 Universal Corp. .............................. 112,700 3,399 ---------- 4,143 ---------- TOTAL CONSUMER STAPLES .......................... 39,258 ---------- ENERGY - 3.90% ENERGY EQUIPMENT & SERVICES - 2.55% CARBO Ceramics, Inc. + ....................... 53,620 1,647 Dril-Quip, Inc. ## ........................... 114,720 3,944 Gulfmark Offshore, Inc. ## ................... 86,400 2,322 Helmerich & Payne, Inc. + .................... 35,900 1,106
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Lufkin Industries, Inc. ...................... 26,730 $ 933 NATCO Group, Inc. ## ......................... 92,890 2,235 Oil States International, Inc. ## ............ 235,800 4,457 Patterson-UTI Energy, Inc. ................... 127,750 1,624 SEACOR Holdings, Inc. ## + ................... 63,900 4,199 Tidewater, Inc. + ............................ 355,850 15,391 Unit Corp. ## + .............................. 182,485 4,980 ---------- 42,838 ---------- OIL & GAS - 1.35% Arena Resources, Inc. ## + ................... 172,890 4,957 Comstock Resources, Inc. ## .................. 56,110 1,934 Encore Acquisition Co. ## .................... 109,900 3,208 EXCO Resources, Inc. ## ...................... 505,900 5,959 Frontier Oil Corp. ........................... 138,180 1,756 Goodrich Petroleum Corp. ## + ................ 47,210 1,083 Holly Corp. + ................................ 174,450 3,656 ---------- 22,553 ---------- TOTAL ENERGY .................................... 65,391 ---------- FINANCIALS - 20.07% BANKS - 5.05% Associated Banc-Corp + ....................... 79,600 1,231 BancorpSouth, Inc. + ......................... 156,570 3,640 Cathay General Bancorp + ..................... 111,700 1,253 City National Corp. + ........................ 235,053 8,603 East West Bancorp, Inc. ...................... 310,800 2,123 F.N.B. Corp. + ............................... 159,192 1,197 Fifth Third Bancorp .......................... 343,400 1,408 First Horizon National Corp. + ............... 727,431 8,373 First Midwest Bancorp, Inc. + ................ 67,800 601 First Niagara Financial Group, Inc. + ........ 128,700 1,743 FirstMerit Corp. ............................. 267,020 5,183 Fulton Financial Corp. + ..................... 280,583 1,855 Hancock Holding Co. + ........................ 69,750 2,641 Home Federal Bancorp Inc. + .................. 171,000 1,725 International Bancshares Corp. ............... 2,800 38 Intervest Bancshares Corp. + ................. 58,400 229 MB Financial, Inc. + ......................... 71,400 973 National Penn Bancshares, Inc. + ............. 268,025 2,168 NewAlliance Bancshares, Inc. + ............... 633,298 8,176 Old National Bancorp + ....................... 120,887 1,648 Pacific Capital Bancorp NA + ................. 157,505 1,093 Provident Financial Services, Inc. ........... 312,900 3,339 Southwest Bancorp, Inc. ...................... 117,510 805 Susquehanna Bancshares, Inc. + ............... 271,800 2,191 Synovus Financial Corp. + .................... 301,240 973
See accompanying notes 7 AMERICAN BEACON SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Trustmark Corp. + ............................ 79,020 $ 1,718 UCBH Holdings, Inc. + ........................ 142,100 182 Umpqua Holdings Corp. + ...................... 308,300 2,956 United Community Banks, Inc. + ............... 85,023 548 Washington Federal, Inc. + ................... 322,314 4,184 Washington Trust Bancorp, Inc. ............... 28,880 527 Webster Financial Corp. + .................... 758,500 3,967 WesBanco, Inc. + ............................. 33,400 664 Whitney Holding Corp. + ...................... 518,905 6,206 Wintrust Financial Corp. + ................... 27,800 473 ---------- 84,634 ---------- DIVERSIFIED FINANCIALS - 3.77% AmeriCredit Corp. ## ......................... 31,100 316 Cash America International, Inc. ............. 90,838 2,031 Credit Acceptance Corp. ## + ................. 160,000 3,678 Ezcorp, Inc. ## .............................. 357,050 4,424 Financial Federal Corp. + .................... 166,910 4,108 First Cash Financial Services, Inc. ## + ..... 200,300 3,293 Investment Technology Group, Inc. ## ......... 421,185 9,595 Jefferies Group, Inc. + ...................... 253,460 4,960 Knight Capital Group, Inc. ## ................ 191,450 2,965 Lazard Ltd. .................................. 158,112 4,316 Legg Mason, Inc. + ........................... 298,900 5,999 MF Global Ltd. ## ............................ 67,000 409 Nelnet, Inc. ................................. 184,700 1,114 Piper Jaffray Co. ## ......................... 263,533 9,137 Raymond James Financial, Inc. + .............. 48,120 755 World Acceptance Corp. ## + .................. 205,800 6,108 ---------- 63,208 ---------- INSURANCE - 9.10% Allied World Assurance Co. Holdings Ltd. ..... 83,700 3,109 American Equity Investment Life Holding Co. + ..................................... 209,900 1,182 American Financial Group, Inc. ............... 351,000 6,170 American National Insurance Co. .............. 23,800 1,615 AmTrust Financial Services, Inc. + ........... 240,100 2,192 Argo Group International Holdings Ltd. ## .... 210,657 5,896 Aspen Insurance Holdings Ltd. ................ 573,680 13,527 CNA Surety Corp. ## .......................... 239,200 4,605 Conseco, Inc. ## ............................. 480,000 768 Delphi Financial Group, Inc. ................. 336,800 5,816 Employers Holdings, Inc. ..................... 537,400 4,482 Endurance Specialty Holdings Ltd. + .......... 125,600 3,286 Fidelity National Financial, Inc. ............ 139,633 2,531 First American Corp. ......................... 149,320 4,193 Flagstone Reinsurance Holdings Ltd. .......... 225,500 2,088 Hanover Insurance Group, Inc. ................ 515,970 15,469
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) HCC Insurance Holdings, Inc. ................. 230,170 $ 5,506 Horace Mann Educators Corp. .................. 56,800 499 Infinity Property and Casualty Corp. ......... 50,698 1,787 IPC Holdings Ltd. ............................ 115,600 3,010 Max Capital Group Ltd. ....................... 81,800 1,354 Montpelier Re Holdings Ltd. + ................ 65,108 811 National Western Life Insurance Co. .......... 2,100 239 Navigators Group, Inc. ## .................... 137,600 6,244 Old Republic International Corp. ............. 261,400 2,449 OneBeacon Insurance Group Ltd. ............... 19,500 227 Platinum Underwriters Holdings Ltd. .......... 95,900 2,759 PMA Capital Corp. ## ......................... 231,200 867 Presidential Life Corp. ...................... 108,700 1,162 ProAssurance Corp. ## ........................ 70,440 3,095 Reinsurance Group of America, Inc. ........... 265,900 8,453 Safety Insurance Group, Inc. ................. 59,700 1,973 Selective Insurance Group, Inc. .............. 22,900 338 StanCorp Financial Group, Inc. ............... 342,250 9,388 Stewart Information Services Corp. + ......... 276,600 6,254 Torchmark Corp. + ............................ 185,700 5,447 Tower Group, Inc. ............................ 21,400 582 United America Indemnity Ltd. ## ............. 1,161,065 5,887 United Fire & Casualty, Co. .................. 75,500 1,410 Unitrin, Inc. ................................ 51,400 874 Universal American Corp. ## .................. 415,100 4,288 Zenith National Insurance Corp. .............. 33,400 761 ---------- 152,593 ---------- REAL ESTATE - 2.15% Acadia Realty Trust .......................... 87,703 1,272 Alexandria Real Estate Equities, Inc. + ...... 47,590 1,736 BioMed Realty Trust, Inc. .................... 332,560 3,794 CAPLEASE, Inc. + ............................. 943,100 2,801 Cohen & Steers, Inc. + ....................... 184,718 2,719 DiamondRock Hospitality Co. + ................ 562,640 3,652 Douglas Emmett, Inc. + ....................... 217,280 2,079 EastGroup Properties, Inc. ................... 59,620 2,004 Entertainment Properties Trust + ............. 64,050 1,480 Essex Property Trust, Inc. ................... 12,160 778 Hilltop Holdings, Inc. ## + .................. 50,300 570 LaSalle Hotel Properties + ................... 293,380 3,509 MI Developments, Inc. ........................ 425,100 3,048 Mission West Properties, Inc. ................ 131,830 898 Redwood Trust, Inc. .......................... 149,595 2,434 Urstadt Biddle Properties, Inc. .............. 32,120 493 U-Store-It Trust ............................. 567,000 1,945
See accompanying notes 8 AMERICAN BEACON SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) WP Carey & Co. LLC + ......................... 39,650 $ 843 ---------- 36,055 ---------- TOTAL FINANCIALS ................................ 336,490 ---------- HEALTH CARE - 6.59% BIOTECHNOLOGY - 0.05% Viropharma, Inc. ## + ........................ 149,000 839 ---------- HEALTH CARE EQUIPMENT & SUPPLIES - 0.42% IMS Health, Inc. ............................. 196,000 2,462 Kensey Nash Corp. ## ......................... 105,450 2,208 Kinetic Concepts, Inc. ## + .................. 93,100 2,305 ---------- 6,975 ---------- HEALTH CARE PROVIDERS & SERVICES - 4.11% Air Methods Corp. ## + ....................... 131,820 3,500 AMERIGROUP Corp. ## + ........................ 246,550 7,364 Amsurg Corp. ## .............................. 94,180 1,935 Health Net, Inc. ## .......................... 19,200 277 Healthspring, Inc. ## ........................ 688,160 6,352 IPC The Hospitalist Co., Inc. ## ............. 53,143 974 Kindred Healthcare, Inc. ## .................. 95,000 1,237 LifePoint Hospitals, Inc. ## + ............... 432,240 11,173 Lincare Holdings, Inc. ## + .................. 331,000 7,987 Magellan Health Services, Inc. ## ............ 112,480 3,325 MAXIMUS, Inc. ................................ 350,425 14,133 Mednax, Inc. ## .............................. 54,880 1,970 Molina Healthcare, Inc. ## + ................. 39,300 851 Odyssey HealthCare, Inc. ## .................. 192,860 1,998 RehabCare Group, Inc. ## ..................... 75,970 1,269 Res-Care, Inc. ## ............................ 281,350 4,507 ---------- 68,852 ---------- PHARMACEUTICALS - 2.01% Endo Pharmaceuticals Holdings, Inc. ## ....... 189,450 3,134 King Pharmaceuticals, Inc. ## ................ 1,124,900 8,864 Medicis Pharmaceutical Corp. ................. 317,200 5,097 NBTY, Inc. ## ................................ 407,650 10,562 Perrigo Co. + ................................ 137,500 3,564 Sepracor, Inc. ## ............................ 179,655 2,553 ---------- 33,774 ---------- TOTAL HEALTH CARE ............................... 110,440 ---------- INDUSTRIALS - 20.60% AEROSPACE & DEFENSE - 1.68% AAR Corp. ## + ............................... 130,800 1,971 BE Aerospace, Inc. ## ........................ 281,240 3,035 Ceradyne, Inc. ## ............................ 137,600 2,372
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Curtiss-Wright Corp. ......................... 133,190 $ 4,258 Esterline Technologies Corp. ## .............. 122,650 3,232 Moog, Inc. ## ................................ 108,250 2,899 Triumph Group, Inc. .......................... 212,000 8,762 World Fuel Services Corp. + .................. 44,900 1,712 ---------- 28,241 ---------- BUILDING PRODUCTS - 2.22% Apogee Enterprises, Inc. + ................... 314,900 4,220 Armstrong World Industries, Inc. ## .......... 185,300 3,369 Crane Co. .................................... 272,850 6,300 Drew Industries, Inc. ## + ................... 217,990 3,113 Griffon Corp. ## ............................. 102,651 890 Insituform Technologies, Inc. ## + ........... 400,100 6,133 Lennox International, Inc. + ................. 116,300 3,709 Simpson Manufacturing Co., Inc. + ............ 356,455 7,935 Universal Forest Products, Inc. + ............ 44,292 1,486 ---------- 37,155 ---------- COMMERCIAL SERVICES & SUPPLIES - 5.26% Administaff, Inc. ............................ 212,800 5,673 American Ecology Corp. ....................... 95,790 1,582 Bowne & Co., Inc. ............................ 29,955 153 Brink's Co. .................................. 116,390 3,300 Brink's Home Security Holdings, Inc. ## ...... 122,910 3,267 Clean Harbors, Inc. ## ....................... 51,048 2,558 Convergys Corp. ## ........................... 218,200 2,206 Con-way, Inc. ................................ 336,000 8,326 CSG Systems International, Inc. ## ........... 109,800 1,592 Deluxe Corp. ................................. 114,000 1,653 Dollar Financial Corp. ## .................... 16,600 168 Ennis, Inc. .................................. 94,700 852 G&K Services, Inc. ........................... 37,820 944 Heidrick & Struggles International, Inc. + ... 165,500 2,797 Herman Miller, Inc. .......................... 210,700 3,133 Hudson Highland Group, Inc. ## ............... 511,600 839 Kelly Services, Inc. ......................... 149,600 1,700 Korn/Ferry International ## .................. 859,160 9,099 Layne Christensen Co. ## ..................... 69,400 1,503 Manpower, Inc. ............................... 86,400 3,723 McGrath Rentcorp ............................. 110,088 2,327 PHH Corp. ## + ............................... 374,400 6,282 Pre-Paid Legal Services, Inc. ## + ........... 62,370 2,297 Spherion Corp. ## ............................ 785,100 2,819 Team, Inc. ## ................................ 80,520 1,157 TrueBlue, Inc. ## ............................ 162,300 1,576 United Stationers, Inc. ## ................... 126,300 4,134 Valassis Communications, Inc. ## ............. 1,824,300 9,432
See accompanying notes 9 AMERICAN BEACON SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Waste Connections, Inc. ## ................... 120,770 $ 3,113 ---------- 88,205 ---------- CONSTRUCTION & ENGINEERING - 1.38% EMCOR Group, Inc. ## ......................... 462,500 9,615 Granite Construction, Inc. + ................. 98,510 3,886 Perini Corp. ## + ............................ 372,000 6,436 Shaw Group, Inc. ## .......................... 97,437 3,267 ---------- 23,204 ---------- DIVERSIFIED MANUFACTURING - 1.08% Acuity Brands, Inc. + ........................ 99,194 2,851 Andersons, Inc. + ............................ 23,700 381 Barnes Group, Inc. + ......................... 317,200 4,491 Kennametal, Inc. ............................. 508,100 10,391 ---------- 18,114 ---------- ELECTRICAL EQUIPMENT - 1.89% A.O. Smith Corp. ............................. 72,300 2,248 Airvana, Inc. ## + ........................... 157,790 898 Anixter International, Inc. ## + ............. 180,859 7,195 Baldor Electric Co. + ........................ 42,100 977 Belden, Inc. ................................. 40,900 659 Encore Wire Corp. + .......................... 38,870 849 Hubbell, Inc. ................................ 157,300 5,222 Regal-Beloit Corp. + ......................... 336,600 13,676 ---------- 31,724 ---------- ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.77% Diebold, Inc. ................................ 354,300 9,364 PerkinElmer, Inc. ............................ 246,900 3,597 ---------- 12,961 ---------- INDUSTRIAL CONGLOMERATES - 0.43% Carlisle Cos., Inc. .......................... 313,350 7,129 ---------- MACHINERY - 4.41% AGCO Corp. ## ................................ 63,630 1,546 Applied Industrial Technologies, Inc. + ...... 286,300 6,442 Astec Industries, Inc. ## + .................. 81,970 2,526 Brady Corp. .................................. 116,000 2,444 CIRCOR International, Inc. ................... 27,700 713 Flowserve Corp. .............................. 113,300 7,693 Gardner Denver, Inc. ## ...................... 242,800 6,463 Harsco Corp. ................................. 281,800 7,764 Kaydon Corp. + ............................... 81,167 2,594 Lincoln Electric Holdings, Inc. + ............ 39,400 1,755 Middleby Corp. ## ............................ 16,800 735 Miller Industries, Inc. ## ................... 231,100 1,849 Mueller Industries, Inc. ..................... 177,910 3,909 NACCO Industries, Inc. ....................... 6,390 244
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Oshkosh Corp. ................................ 773,800 $ 7,429 RSC Holdings, Inc. ## + ...................... 529,800 3,788 Terex Corp. ## + ............................. 416,300 5,745 Timken Co. ................................... 473,350 7,611 Watts Water Technologies, Inc. + ............. 117,900 2,624 ---------- 73,874 ---------- MARINE - 0.60% Cal Dive International, Inc. ## .............. 306,000 2,424 Genco Shipping & Trading Ltd. + .............. 220,700 4,215 Kirby Corp. ## ............................... 113,100 3,490 ---------- 10,129 ---------- ROAD & RAIL - 0.88% Arkansas Best Corp. + ........................ 36,000 831 Bristow Group, Inc. ## + ..................... 16,000 364 GATX Corp. + ................................. 193,400 5,823 Heartland Express, Inc. + .................... 225,430 3,370 Landstar System, Inc. ........................ 80,410 2,864 Marten Transport Ltd. ## ..................... 70,070 1,453 ---------- 14,705 ---------- TOTAL INDUSTRIALS ............................... 345,441 ---------- INFORMATION TECHNOLOGY - 16.43% COMMUNICATIONS EQUIPMENT - 1.51% Adaptec, Inc. ## ............................. 158,500 453 Arris Group, Inc. ## ......................... 269,360 2,874 Avocent Corp. ## + ........................... 211,650 3,056 Black Box Corp. .............................. 120,300 3,293 Ciena Corp. ## + ............................. 272,840 3,260 Comtech Telecommunications Corp. ## .......... 70,630 2,364 F5 Networks, Inc. ## ......................... 115,220 3,142 Harmonic, Inc. ## ............................ 231,880 1,700 Sonus Networks, Inc. ## ...................... 977,677 1,691 Sycamore Networks, Inc. ## ................... 1,195,500 3,527 ---------- 25,360 ---------- COMPUTERS & PERIPHERALS - 2.05% Cray, Inc. ## ................................ 167,520 704 Electronics for Imaging, Inc. ## ............. 547,106 5,373 Imation Corp. + .............................. 251,700 2,517 Ingram Micro, Inc. ## ........................ 996,700 14,472 Lexmark International, Inc. ## ............... 337,500 6,622 Mercury Computer Systems, Inc. ## ............ 355,200 2,884 Teradata Corp. ## ............................ 103,800 1,735 ---------- 34,307 ---------- ELECTRONIC COMPONENTS - 0.96% II-VI, Inc. ## ............................... 73,320 1,757 Plexus Corp. ## .............................. 540,100 11,963
See accompanying notes 10 AMERICAN BEACON SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Thomas & Betts Corp. ## ...................... 79,100 $ 2,462 ---------- 16,182 ---------- ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.12% Analogic Corp. ............................... 63,720 2,319 Arrow Electronics, Inc. ## ................... 358,000 8,141 AVX Corp. + .................................. 280,400 2,807 Benchmark Electronics, Inc. ## ............... 599,150 7,268 Coherent, Inc. ## ............................ 9,700 184 Jabil Circuit, Inc. .......................... 352,300 2,854 Littelfuse, Inc. ## .......................... 421,200 6,904 Methode Electronics, Inc. .................... 955,383 5,751 MTS Systems Corp. ............................ 117,000 2,472 Multi-Fineline Electronix, Inc. ## ........... 31,300 628 Vishay Intertechnology, Inc. ## .............. 2,211,710 12,983 ---------- 52,311 ---------- INTERNET SOFTWARE & SERVICES - 1.06% DealerTrack Holdings, Inc. ## ................ 199,599 3,030 EarthLink, Inc. ## + ......................... 491,100 3,723 InterActiveCorp ## ........................... 457,600 7,331 NIC, Inc. .................................... 270,710 1,462 United Online, Inc. .......................... 271,380 1,438 Websense, Inc. ## ............................ 45,960 819 ---------- 17,803 ---------- IT CONSULTING & SERVICES - 2.47% CACI International, Inc. ## .................. 139,000 5,498 Ciber, Inc. ## ............................... 71,700 232 First Advantage Corp. ## ..................... 141,132 2,024 ManTech International Corp. ## ............... 72,450 2,622 MPS Group, Inc. ## ........................... 633,600 5,094 Ness Technologies, Inc. ## ................... 395,100 1,458 Patni Computer Systems Ltd., ADR ............. 450,300 3,512 SRA International, Inc. ## ................... 218,720 3,366 SYNNEX Corp. ## + ............................ 171,900 3,701 Syntel, Inc. + ............................... 150,550 4,173 Tech Data Corp. ## ........................... 336,030 9,674 Unisys Corp. ## .............................. 51,500 63 ---------- 41,417 ---------- SEMICONDUCTOR EQUIPMENT & PRODUCTS - 2.99% Brooks Automation, Inc. ## ................... 1,340,900 8,340 Cabot Microelectronics Corp. ## .............. 101,900 2,936 Cirrus Logic, Inc. ## ........................ 266,660 1,240 Cymer, Inc. ## ............................... 105,540 2,998 FEI Co. ## ................................... 176,950 3,040 Formfactor, Inc. ## + ........................ 181,670 3,167 Integrated Device Technology, Inc. ## ........ 805,000 4,371 International Rectifier Corp. ## ............. 53,000 895
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) MKS Instruments, Inc. ## ..................... 370,490 $ 5,798 National Semiconductor Corp. ................. 64,200 794 ON Semiconductor Corp. ## .................... 1,513,300 8,202 Semtech Corp. ## ............................. 173,550 2,503 Teradyne, Inc. ## ............................ 409,790 2,434 TriQuint Semiconductor, Inc. ## .............. 832,650 3,189 Ultra Clean Holdings ## ...................... 131,750 240 ---------- 50,147 ---------- SOFTWARE - 2.27% Aspen Technology, Inc. ## + .................. 217,080 1,684 DST Systems, Inc. ## + ....................... 24,200 875 EPIQ Systems, Inc. ## + ...................... 190,603 2,949 infoGROUP, Inc. .............................. 302,200 1,224 Informatica Corp. ## ......................... 217,830 3,463 JDA Software Group, Inc. ## .................. 386,300 5,451 Lawson Software, Inc. ## + ................... 1,060,200 5,714 Manhattan Associates, Inc. ## + .............. 147,400 2,450 Mentor Graphics Corp. ## ..................... 1,108,000 7,446 Micros Systems, Inc. ## ...................... 37,360 784 Novell, Inc. ## .............................. 616,400 2,318 Omnicell, Inc. ## + .......................... 41,031 361 STEC, Inc. ## + .............................. 181,750 1,745 TIBCO Software, Inc. ## ...................... 244,200 1,543 ---------- 38,007 ---------- TOTAL INFORMATION TECHNOLOGY .................... 275,534 ---------- MATERIALS - 3.68% CHEMICALS - 1.72% Eastman Chemical Co. ......................... 121,300 4,813 H.B. Fuller Co. .............................. 43,280 764 NewMarket Corp. .............................. 24,100 1,518 Olin Corp. ................................... 415,700 5,238 OM Group, Inc. ## ............................ 17,100 476 PolyOne Corp. ## ............................. 1,617,500 4,432 RPM International, Inc. ...................... 564,300 7,799 Westlake Chemical Corp. + .................... 204,300 3,821 ---------- 28,861 ---------- CONTAINERS & PACKAGING - 0.68% Greif, Inc. .................................. 76,300 3,454 Jarden Corp. ## .............................. 141,200 2,838 Packaging Corp. of America ................... 281,090 4,461 Sonoco Products Co. .......................... 28,000 683 ---------- 11,436 ---------- METALS & MINING - 1.18% AMCOL International Corp. + .................. 71,710 1,390 Carpenter Technology Corp. ................... 336,600 6,957
See accompanying notes 11 AMERICAN BEACON SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Foundation Coal Holdings, Inc. + ............. 93,700 $ 1,522 Gibraltar Industries, Inc. + ................. 22,700 152 Schnitzer Steel Industries, Inc. + ........... 14,400 714 Universal Stainless & Alloy ## ............... 15,500 208 USEC, Inc. ## + .............................. 570,400 3,531 Worthington Industries, Inc. + ............... 355,800 5,301 ---------- 19,775 ---------- PAPER & FOREST PRODUCTS - 0.10% Wausau Paper Corp. ........................... 188,750 1,648 ---------- TOTAL MATERIALS ................................. 61,720 ---------- TELECOMMUNICATION SERVICES - 0.05% DIVERSIFIED TELECOMMUNICATION - 0.05% Cincinnati Bell, Inc. ## ..................... 289,800 808 ---------- UTILITIES - 5.27% ELECTRIC UTILITIES - 4.15% Avista Corp. ................................. 111,700 1,681 Black Hills Corp. ............................ 115,000 2,286 El Paso Electric Co. ## ...................... 258,030 3,561 Great Plains Energy, Inc. .................... 797,800 11,544 IDACORP, Inc. ................................ 286,090 6,857 OGE Energy Corp. ............................. 362,800 9,328 Pinnacle West Capital Corp. .................. 228,600 6,259 PNM Resources, Inc. .......................... 464,500 3,957 Portland General Electric Co. ................ 742,400 13,564 Westar Energy, Inc. .......................... 598,800 10,497 ---------- 69,534 ---------- GAS UTILITIES - 0.87% Atmos Energy Corp. ........................... 257,500 6,363 Energen Corp. ................................ 126,592 4,572 Integrys Energy Group, Inc. + ................ 28,700 758 Nicor, Inc. .................................. 79,450 2,554 Southwest Gas Corp. .......................... 19,100 386 ---------- 14,633 ---------- MULTI-UTILITIES - 0.25% NV Energy, Inc. .............................. 402,700 4,128 ---------- TOTAL UTILITIES ................................. 88,295 ---------- TOTAL COMMON STOCKS ............................. 1,581,251 ---------- SHORT TERM INVESTMENTS - 5.58% American Beacon U.S. Government Money Market Select Fund +++ .................... 20,000,000 20,000 Columbia Government Reserve Fund ............. 64,081,321 64,081
PAR AMOUNT VALUE ------------ ---------- (DOLLARS IN THOUSANDS) U.S. Treasury, 0.08%, Due 6/11/2009 # .................... $ 9,559 $ 9,557 ---------- TOTAL SHORT TERM INVESTMENTS .................... 93,638 ----------
SHARES ------------ SECURITIES LENDING COLLATERAL - 18.20% American Beacon U.S. Government Money Market Select Fund +++ .................... 65,496,409 65,496 State Street Navigator Securities Lending Prime Portfolio ........................... 239,590,498 239,591 ---------- TOTAL SECURITIES LENDING COLLATERAL ............. 305,087 ---------- TOTAL INVESTMENTS 118.09% - (COST $2,288,738) ...... 1,979,976 LIABILITIES, NET OF OTHER ASSETS - (18.09%) ........ (303,281) ---------- TOTAL NET ASSETS - 100.00% ......................... $1,676,695 ==========
See accompanying notes 12 AMERICAN BEACON SMALL CAP VALUE FUND SCHEDULE OF INVESTMENTS April 30, 2009 (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, 2009. +++ The Fund is affiliated by having the same investment advisor. # At April 30, 2009, 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 ...... 1,916 Jun 2009 $93,252 $15,899 ======= =======
See accompanying notes 13 AMERICAN BEACON SMALL CAP VALUE FUND(SM) STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 2009 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) ASSETS: Investments in unaffiliated securities, at value(A, C) ........ $ 1,894,480 Investments in affiliated securities, at value(B) ............. 85,496 Receivable for investments sold ............................... 11,138 Dividends and interest receivable ............................. 868 Receivable for fund shares sold ............................... 7,056 Receivable for tax reclaims ................................... 2 Prepaid expenses............................................... 62 ----------- TOTAL ASSETS ............................................... 1,999,102 ----------- LIABILITIES: Payable for investments purchased ............................. 13,342 Payable upon return of securities loaned ...................... 305,087 Payable for fund shares redeemed............................... 654 Payable for variation margin on open futures contracts......... 403 Management and investment advisory fees payable (Note 2)....... 2,084 Administrative service and service fees payable ............... 511 Other liabilities ............................................. 326 ----------- TOTAL LIABILITIES .......................................... 322,407 ----------- NET ASSETS ....................................................... $ 1,676,695 =========== ANALYSIS OF NET ASSETS: Paid-in-capital................................................ 2,603,472 Undistributed net investment income............................ 6,773 Accumulated net realized loss ................................. (640,687) Unrealized depreciation of investments, futures contracts, and foreign currency .................... (292,863) ----------- NET ASSETS ....................................................... $ 1,676,695 =========== SHARES OUTSTANDING (NO PAR VALUE): Institutional Class ........................................... 66,958,114 =========== Investor Class................................................. 56,663,274 =========== Advisor Class.................................................. 2,285,409 =========== AMR Class...................................................... 16,374,532 =========== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE: Institutional Class ........................................... $ 11.90 =========== Investor Class................................................. $ 11.64 =========== Advisor Class ................................................. $ 11.58 =========== AMR Class...................................................... $ 11.83 =========== A Cost of investments in unaffiliated securities ................. $ 2,203,242 B Cost of investments in affiliated securities.................... $ 85,496 C Market value of securities on loan ............................. $ 296,615
See accompanying notes 14 AMERICAN BEACON SMALL CAP VALUE FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED APRIL 30, 2009 (UNAUDITED) (IN THOUSANDS) INVESTMENT INCOME: Dividend income from unaffiliated securities (net of foreign taxes)* ..................................... $ 14,335 Dividend income from affiliated securities ..................... 143 Interest income................................................. 37 Income derived from securities lending, net .................... 2,757 --------- TOTAL INVESTMENT INCOME ..................................... 17,272 --------- EXPENSES: Management and investment advisory fees (Note 2) ............... 3,419 Administrative service fees (Note 2): Institutional Class.......................................... 1,077 Investor Class............................................... 881 Advisor Class................................................ 40 AMR Class.................................................... 43 Transfer agent fees: Institutional Class.......................................... 28 Investor Class............................................... 25 Advisor Class................................................ 2 AMR Class.................................................... 4 Custody and fund accounting fees................................ 111 Professional fees .............................................. 38 Registration fees and expenses ................................. 27 Service fees: Investor Class (Note 2)...................................... 759 Advisor Class (Note 2)....................................... 33 Distribution fees - Advisor Class (Note 2) ..................... 33 Prospectus and shareholder reports.............................. 180 Trustee fees.................................................... 54 Other expenses.................................................. 78 --------- TOTAL EXPENSES .............................................. 6,832 --------- NET INVESTMENT INCOME.............................................. 10,440 --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from: Investments (311,253) Commission recapture (Note 1)................................ 190 Futures contracts............................................ (49,415) Change in net unrealized appreciation or depreciation of: Investments.................................................. 232,270 Futures contracts............................................ 49,813 --------- NET LOSS ON INVESTMENTS...................................... (78,395) --------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $ (67,955) ========= * Foreign taxes................................................ $ 21
See accompanying notes 15 AMERICAN BEACON SMALL CAP VALUE FUND STATEMENT OF CHANGES OF NET ASSETS (IN THOUSANDS)
Six Months Ended Year Ended April 30, October 31, 2009 2008 ----------- ----------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income ......................................... $ 10,440 $ 32,606 Net realized loss on investments, futures contracts, and foreign currency transactions ............... (360,478) (266,287) Change in net unrealized appreciation or (depreciation) of investments, futures contracts, and foreign currency translations ............... 282,083 (785,333) ---------- ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS .... (67,955) (1,019,014) ---------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Institutional Class......................................... (13,600) (13,291) Investor Class.............................................. (8,841) (9,332) Advisor Class............................................... (311) (298) AMR Class................................................... (3,927) (4,903) Net realized gain on investments: Institutional Class......................................... -- (152,714) Investor Class.............................................. -- (145,952) Advisor Class............................................... -- (7,763) AMR Class................................................... -- (43,605) ---------- ----------- NET DISTRIBUTIONS TO SHAREHOLDERS ....................... (26,679) (377,858) ---------- ----------- CAPITAL SHARE TRANSACTIONS: Proceeds from sales of shares ................................. 239,568 463,771 Reinvestment of dividends and distributions.................... 26,349 371,165 Cost of shares redeemed ....................................... (263,896) (879,196) ---------- ----------- NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS 2,021 (44,260) ---------- ----------- NET (DECREASE) IN NET ASSETS (92,613) (1,441,132) ---------- ----------- NET ASSETS: Beginning of period ........................................... 1,769,308 3,210,440 ---------- ----------- END OF PERIOD *................................................ $1,676,695 $ 1,769,308 ========== =========== *Includes undistributed net investment income of ................. $ 6,773 $ 23,220 ========== ===========
See accompanying notes 16 AMERICAN BEACON SMALL CAP VALUE FUND(SM) NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (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, as amended, (the "Act") as a 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 Lighthouse Holdings, Inc. and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors. Class Disclosure Prior to March 1, 2009, the Investor and Advisor Classes were known as the PlanAhead and Service Classes, respectively. 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: - ------ ----------- INSTITUTIONAL CLASS Investors making an initial investment of $2 million INVESTOR CLASS General public and investors investing through an intermediary ADVISOR CLASS Investors investing through an intermediary AMR CLASS Investors in the tax-exempt retirement and benefit plans of AMR Corporation and its affiliates
Administrative service fees, service fees and distribution fees vary amongst the classes as described more fully in footnote 2. 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. 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"). 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. The Fund adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), effective with the beginning of the Fund's fiscal year. The standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value, and requires 17 AMERICAN BEACON SMALL CAP VALUE FUND(SM) NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) additional disclosures about the use of fair value measurements. The three levels of the hierarchy under FAS 157 are described below: Level 1 - Quoted prices in active markets for identical securities. Level 2 - Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. Level 3 - Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. A summary of the inputs used to value the Fund's investments as of April 30, 2009 is as follows (in thousands):
Investments in Other Financial Valuation Inputs Securities Instruments* ---------------- -------------- --------------- Level 1 - Quoted prices .......................... $1,970,419 $15,899 Level 2 - Other significant observable inputs .... 9,557 -- Level 3 - Significant unobservable inputs ....... -- -- ---------- ------- Total ............................................ $1,979,976 $15,899 ---------- -------
* Other financial instruments are futures. 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. 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. 18 AMERICAN BEACON SMALL CAP VALUE FUND(SM) NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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. Recently Issued Accounting Pronouncements In March 2008, FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("FAS 161"), which is effective for fiscal years and interim periods beginning after November 15, 2008. FAS 161 requires enhanced disclosures about derivative and hedging activities, including how such activities are accounted for and their effect on financial positions, performance and cash flows. The Manager is currently evaluating the impact the adoption of FAS 161 will have on the Fund's financial statements and related disclosures. 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 19 AMERICAN BEACON SMALL CAP VALUE FUND(SM) NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) equal to 0.05% 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, 2009 were as follows (dollars in thousands):
AMOUNTS PAID TO MANAGEMENT FEE RATE MANAGEMENT FEE INVESTMENT ADVISORS NET AMOUNTS RETAINED BY MANAGER - ------------------- -------------- ------------------- -------------------------------- 0.30%-0.55% $3,419 $3,043 $376
As compensation for services provided by the Manager in connection with securities lending activities, the 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, 2009, securities lending fees paid to the Manager by the Fund were $341,367. 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 0.30% of the average daily net assets of the Institutional, Investor, and Advisor Classes of the Fund and 0.05% of the average daily net assets of the AMR Class of the Fund. Distribution Plans The Fund, except for the Advisor 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 Advisor 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 Advisor Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance. Service Plans The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor and Advisor Classes. As compensation for performing the duties required under the Service Plans, the Manager receives up to 0.375% of the average daily net assets of the Investor Class and 0.25% of the average daily net assets of the Advisor Class 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 $34,246 for the six months ended April 30, 2009. 20 AMERICAN BEACON SMALL CAP VALUE FUND(SM) NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) Investment in Affiliated Funds The Fund may invest in the American Beacon Money Market Select Fund (the "MM Select Fund") and the American Beacon US Government Money Market Select Fund (the "USG Select Fund") (collectively, the "Select Funds"). Cash collateral received by the Fund in connection with securities lending may be invested in the Select Funds. The Select Funds and the Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the Select Funds and receives from the Select Funds an annualized fee of 0.09% of the average daily net assets of the Select Funds. During the six months ended April 30, 2009, the Manager earned fees from the Select Funds totaling $10,511 on the Fund's direct investment in the Select Funds and $27,325 from the Fund's securities lending collateral invested in the Select Funds. Interfund Lending Program Pursuant to an exemptive order by the Securities Exchange Commission ("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. During the six months ended April 30, 2009, 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, 2009, there were no fees waived or reimbursed expenses subject to potential recovery. 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, 2008 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, 2009 and the fiscal year ended October 31, 2008 were as follows (in thousands): 21 AMERICAN BEACON SMALL CAP VALUE FUND(SM) NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED)
SIX MONTHS ENDED YEAR ENDED APRIL 30, OCTOBER 31, 2009 2008 ----------- ----------- (unaudited) DISTRIBUTIONS PAID FROM: ORDINARY INCOME* Institutional Class .. $ 13,600 $ 37,816 Investor Class ....... 8,841 32,770 Advisor Class ........ 311 1,545 AMR Class ............ 3,927 11,905 LONG-TERM CAPITAL GAIN Institutional Class... -- 128,189 Investor Class ....... -- 122,514 Advisor Class ........ -- 6,516 AMR Class ............ -- 36,603 -------- -------- TOTAL DISTRIBUTIONS PAID $ 26,679 $377,858 ======== ========
* For tax purposes, short-term capital gains are considered ordinary income distributions. As of April 30, 2009, the components of distributable earnings on a tax basis were as follows (in thousands): Cost basis of investments for federal income tax purposes .. $2,353,626 Unrealized appreciation .................................... 110,828 Unrealized depreciation .................................... (484,478) ---------- Net unrealized appreciation/(depreciation) (373,650) Undistributed ordinary income .............................. 4,931 Undistributed long-term gain/(loss) ........................ (558,059) ---------- Distributable earnings ..................................... $ (926,778) ========== 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, 2009 (in thousands): Paid-in-capital ........................................... $ (1) Undistributed net investment income ....................... (208) Accumulated net realized gain (loss) ...................... 210 Unrealized appreciation (depreciation) of investments, futures contracts and foreign currency.................. (1)
At April 30, 2009, the capital loss carry forward position of the Fund for federal income tax purposes was $259,968 and $298,091 expiring in 2016 and 2017, respectively. 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, 2009 were (in thousands) $588,892 and $480,568, respectively. 22 AMERICAN BEACON SMALL CAP VALUE FUND(SM) NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) A summary of the Fund's direct transactions in the Select Funds for the six months ended April 30, 2009 is set forth below (in thousands):
OCTOBER 31, 2008 APRIL 30, 2009 AFFILIATE SHARES/MARKET VALUE PURCHASES SALES SHARES/MARKET VALUE - --------------- -------------------- --------- ------- ------------------- MM Select Fund $93,829 $ -- $93,829 $ -- USG Select Fund $ -- $20,000 $ -- $20,000
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 monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral. The amount of this temporary difference at April 30, 2009 is disclosed as the calculated mark in the table below. To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the "Agent") in money market mutual funds, and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retain 75%, 15%, and 10%, respectively, of the income generated from securities lending. While securities are on loan, the Fund continues to receive any income associated with that security and any gain or loss in the market price that may occur during the term of the loan. Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default. As of April 30, 2009, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):
MARKET VALUE OF TOTAL VALUE OF SECURITIES ON LOAN NON-CASH COLLATERAL CASH COLLATERAL POSTED BY BORROWER CALCULATED MARK COLLATERAL - ------------------ ------------------- ---------------------------------- --------------- -------------- $296,615 $-- $305,087 $(358) $304,729
Cash collateral is listed in the Fund's Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in Income derived from securities lending in the Statement of Operations. 23 AMERICAN BEACON SMALL CAP VALUE FUND(SM) NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund's Schedule of Investments or Statement of Assets and Liabilities. 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, 2009
INSTITUTIONAL CLASS INVESTOR CLASS ADVISOR CLASS AMR CLASS ------------------- ---------------- ---------------- ---------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------ ------- ------ ------- ------ -------- Shares sold ..................... 13,145 $141,353 7,484 $78,815 442 $ 4,522 1,378 $ 14,878 Reinvestment of dividends ....... 1,226 13,407 813 8,704 29 311 362 3,927 Shares redeemed ................. (13,360) (141,099) (8,880) (90,406) (946) (10,150) (2,185) (22,241) ------- -------- ------ ------- ----- ------- ------ -------- Net increase (decrease) in shares outstanding .................. 1,011 $ 13,661 (583) $(2,887) (475) $(5,317) (445) $ (3,436) ======= ======== ===== ======= ===== ======= ====== ========
Year Ended October 31, 2008
INSTITUTIONAL CLASS INVESTOR CLASS ADVISOR CLASS AMR CLASS ------------------- ------------------- ---------------- ------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------- --------- ------- --------- ------ ------- ------ --------- Shares sold ..................... 14,496 $ 244,453 10,422 $ 172,430 888 $14,694 1,925 $ 32,194 Reinvestment of dividends ....... 8,983 161,791 8,677 152,805 460 8,061 2,708 48,508 Shares redeemed ................. (21,496) (364,982) (22,737) (376,472) (1,809) (29,610) (6,475) (108,132) ------- --------- ------- --------- ------ ------- ------ --------- Net increase (decrease) in shares outstanding .................. 1,983 $ 41,262 (3,638) $ (51,237) (461) $(6,855) (1,842) $ (27,430) ======= ========= ======= ========= ====== ======= ====== =========
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, ----------------------------------------------------------- 2009 2008 2007 2006 2005(A) 2004(B) ----------- -------- ---------- ---------- ---------- -------- (unaudited) Net asset value, beginning of period .... $ 12.53 $ 22.10 $ 22.53 $ 20.43 $ 18.85 $ 16.21 -------- -------- ---------- ---------- ---------- -------- Income from investment operations: Net investment income ................ 0.08 0.25 0.22 0.19 0.11 0.07 Net gains (losses) on securities (both realized and unrealized) .......... (0.51) (7.13) 1.10 2.94 2.31 3.09 -------- -------- ---------- ---------- ---------- -------- Total income (loss) from investment operations ........................... (0.43) (6.88) 1.32 3.13 2.42 3.16 -------- -------- ---------- ---------- ---------- -------- Less distributions: Dividends from net investment income ............................ (0.20) (0.22) (0.19) (0.14) (0.07) (0.08) Distributions from net realized gains on securities ..................... -- (2.47) (1.56) (0.89) (0.77) (0.44) -------- -------- ---------- ---------- ---------- -------- Total distributions ..................... (0.20) (2.69) (1.75) (1.03) (0.84) (0.52) -------- -------- ---------- ---------- ---------- -------- Net asset value, end of period .......... $ 11.90 $ 12.53 $ 22.10 $ 22.53 $ 20.43 $ 18.85 ======== ======== ========== ========== ========== ======== Total return ............................ (3.27)%(C) (34.84)% 6.10% 15.80% 12.90% 19.86% ======== ======== ========== ========== ========== ======== Ratios and supplemental data: Net assets, end of period (in thousands) ........................ $797,010 $826,232 $1,413,734 $1,319,024 $1,076,909 $429,540 Ratios to average net assets (annualized): Expenses, net of waivers .......... 0.82% 0.81% 0.80% 0.82% 0.87% 0.89% Expenses before waivers ........... 0.82% 0.81% 0.80% 0.82% 0.87% 0.89% Net investment income (loss), net of waivers ................. 1.46% 1.36% 0.94% 0.83% 0.66% 0.57% Net investment income (loss), before waivers ................. 1.46% 1.36% 0.94% 0.83% 0.66% 0.57% Portfolio turnover rate .............. 34%(C) 62% 52% 48% 47% 35% Investor Class --------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ----------------------------------- 2009 2008 2007 2006 ----------- -------- ---------- ---------- (unaudited) Net asset value, beginning of period .... $ 12.22 $ 21.62 $ 22.08 $ 20.04 -------- -------- ---------- ---------- Income from investment operations: Net investment income ................ 0.07 0.20 0.16 0.13 Net gains (losses) on securities (both realized and unrealized) .......... (0.49) (6.97) 1.07 2.89 -------- -------- ---------- ---------- Total income (loss) from investment operations ........................... (0.42) (6.77) 1.23 3.02 -------- -------- ---------- ---------- Less distributions: Dividends from net investment income ............................ (0.16) (0.16) (0.13) (0.09) Distributions from net realized gains on securities ..................... -- (2.47) (1.56) (0.89) -------- -------- ---------- ---------- Total distributions ..................... (0.16) (2.63) (1.69) (0.98) -------- -------- ---------- ---------- Net asset value, end of period .......... $ 11.64 $ 12.22 $ 21.62 $ 22.08 ======== ======== ========== ========== Total return ............................ (3.34)%(C) (35.04)% 5.83% 15.56% ======== ======== ========== ========== Ratios and supplemental data: Net assets, end of period (in thousands) ........................ $659,524 $699,670 $1,316,188 $1,333,814 Ratios to average net assets (annualized): Expenses, net of waivers .......... 1.08% 1.06% 1.05% 1.06% Expenses before waivers ........... 1.08% 1.06% 1.05% 1.06% Net investment income (loss), net of waivers ................. 1.21% 1.12% 0.70% 0.59% Net investment income (loss), before waivers ................. 1.21% 1.12% 0.70% 0.59% Portfolio turnover rate .............. 34%(C) 62% 52% 48%
(A) 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. (B) The Boston Company Asset Management, LLC was added as an investment advisor to the Small Cap Value Fund on September 27, 2004. (C) Not annualized. 26
Advisor Class --------------------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ------------------------------------------------ 2005(A) 2004(B) 2009 2008 2007 2006 2005(A) 2004(B) - ---------- -------- ----------- ------- ------- ------- ------- ------- (unaudited) $ 18.54 $ 15.95 $ 12.13 $ 21.46 $ 21.94 $ 19.94 $ 18.49 $ 15.92 - ---------- -------- ------- ------- ------- ------- ------- ------- 0.09 0.08 0.06 0.16 0.10 0.07 0.04 0.01 2.24 2.98 (0.49) (6.93) 1.07 2.88 2.23 3.00 - ---------- -------- ------- ------- ------- ------- ------- ------- 2.33 3.06 (0.43) (6.77) 1.17 2.95 2.27 3.01 - ---------- -------- ------- ------- ------- ------- ------- ------- (0.06) (0.03) (0.12) (0.09) (0.09) (0.06) (0.05) -- (0.77) (0.44) -- (2.47) (1.56) (0.89) (0.77) (0.44) - ---------- -------- ------- ------- ------- ------- ------- ------- (0.83) (0.47) (0.12) (2.56) (1.65) (0.95) (0.82) (0.44) - ---------- -------- ------- ------- ------- ------- ------- ------- $ 20.04 $ 18.54 $ 11.58 $ 12.13 $ 21.46 $ 21.94 $ 19.94 $ 18.49 ========== ======== ======= ======= ======= ======= ======= ======= 12.63% 19.56% (3.50)%(C) (35.19)% 5.55% 15.23% 12.32% 19.24% ========== ======== ======= ======= ======= ======= ======= ======= $1,320,853 $466,364 $26,471 $33,479 $69,112 $70,602 $44,709 $11,828 1.10% 1.15% 1.33% 1.31% 1.32% 1.34% 1.40% 1.38% 1.10% 1.15% 1.33% 1.31% 1.32% 1.34% 1.40% 1.69% 0.42% 0.33% 0.98% 0.86% 0.43% 0.31% 0.12% 0.17% 0.42% 0.33% 0.98% 0.86% 0.43% 0.31% 0.12% (0.14)% 47% 35% 34%(C) 62% 52% 48% 47% 35% AMR Class - --------------------------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ----------------------------------------------------- 2009 2008 2007 2006 2005(A) 2004(B) - ----------- -------- -------- -------- -------- -------- (unaudited) $ 12.48 $ 22.05 $ 22.48 $ 20.38 $ 18.78 $ 16.13 -------- -------- -------- -------- -------- -------- 0.11 0.33 0.30 0.27 0.21 0.14 (0.52) (7.15) 1.08 2.91 2.26 3.04 -------- -------- -------- -------- -------- -------- (0.41) (6.82) 1.38 3.18 2.47 3.18 -------- -------- -------- -------- -------- -------- (0.24) (0.28) (0.25) (0.19) (0.10) (0.09) -- (2.47) (1.56) (0.89) (0.77) (0.44) -------- -------- -------- -------- -------- -------- (0.24) (2.75) (1.81) (1.08) (0.87) (0.53) -------- -------- -------- -------- -------- -------- $ 11.83 $ 12.48 $ 22.05 $ 22.48 $ 20.38 $ 18.78 ======== ======== ======== ======== ======== ======== (3.09)%(C) (34.71)% 6.39% 16.12% 13.23% 20.12% ======== ======== ======== ======== ======== ======== $193,690 $209,927 $411,406 $412,857 $424,965 $438,353 0.57% 0.56% 0.54% 0.55% 0.58% 0.60% 0.57% 0.56% 0.54% 0.55% 0.58% 0.60% 1.72% 1.62% 1.21% 1.10% 0.94% 0.84% 1.72% 1.62% 1.21% 1.10% 0.94% 0.84% 34%(C) 62% 52% 48% 47% 35%
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) BY E-MAIL: american_beacon.funds@ambeacon.com (GRAPHIC) BY TELEPHONE: Institutional Class Call (800) 658-5811 AMR Class(SM) Call (800) 345-2345 Investor Class(R) and Advisor Class Call (800) 388-3344 AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULES In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission ("SEC") on Form N-Q as of the first and third fiscal quarters. The Fund's Forms N-Q are available on the SEC's website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC's Public Reference Room, 450 Fifth Street, NW, Washington, DC 20549. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete 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. (GRAPHIC) ON THE INTERNET: Visit our website at www.americanbeaconfunds.com (GRAPHIC) BY MAIL: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 AVAILABILITY OF PROXY VOTING POLICY AND RECORDS A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund's Statement of Additional Information, is available free of charge on the Fund's website (www.americanbeaconfunds.com) and by calling 1-800-967-9009 or by accessing the SEC's website at www.sec.gov. The Fund's proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund's Forms N-PX are available on the SEC's website at www.sec.gov. The Fund's proxy voting record may also be obtained by calling 1-800-967-9009. FUND SERVICE PROVIDERS: CUSTODIAN 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 Beacon Funds and American Beacon Small Cap Value Fund are service marks of American Beacon Advisors, Inc. SAR 04/09 00068035 GUIDANCE | VISION | EXPERIENCE (AMERICAN BEACON FUNDS(SM) LOGO) SEMI-ANNUAL REPORT (GRAPHIC) April 30, 2009 EMERGING MARKETS FUND INTERNATIONAL EQUITY FUND ABOUT AMERICAN BEACON ADVISORS Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management. Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company. CONTENTS Message from American Beacon.......................... 1 Annualized Total Returns.............................. 3 Market and Performance Overview....................... 6 American Beacon Schedules of Investments Emerging Markets Fund.............................. 10 International Equity Fund.......................... 15 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. The risks of investing in foreign equities are heightened when investing in emerging markets. American Beacon Funds April 30, 2009 (PHOTO OF GENE L. NEEDLES) FELLOW SHAREHOLDERS, Please allow me to introduce myself. I am Gene Needles, Jr., the new Executive Vice President for the American Beacon Funds. I have over 27 years of financial services experience with some of the country's largest fund complexes, and I will be primarily responsible for daily operations as well as distribution of the American Beacon Funds. I am very excited to be a part of American Beacon and look forward to building a lasting relationship with all of our shareholders. Enclosed is the American Beacon Emerging Markets and International Equity Funds Semi-Annual Report for the six months ended April 30, 2009. During the six-month period covered by this report, the capital markets experienced widespread volatility brought on by concern over the world-wide credit crisis. The American Beacon Emerging Markets and International Equity Funds, both Institutional Class, reported six-month returns of 14.88% and - -1.98%, respectively, for the period ended April 30, 2009 while the MSCI Emerging Markets Indices and MSCI EAFE reported returns of 17.38% and -2.64%, respectively, for this period. In the past, long-term investors have been rewarded for their patience. We continue to believe the Funds' fundamental investment strategies will continue to serve the Funds well over time. 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 Funds. Sincerely, /s/ Gene L. Needles Gene L. Needles, Jr. Executive Vice President American Beacon Funds 1 EMERGING MARKETS OVERVIEW APRIL 30, 2009 (UNAUDITED) For the six months ended April 30 2009, the MSCI Emerging Markets Index produced a return of 17.4%. 2008 ended on a painful note for investors as the US housing crisis created an unprecedented implosion of credit, demand, and confidence. Emerging markets were not spared in the aftermath. It became clear that local consumption could not offset the dramatic fall in exports to the U.S., Europe, and Japan. As the global recession threatened to become the worst since the early 1980's, factories across emerging markets were closing, dissolving job creation and creating a vicious circle of rising unemployment and weak consumption. This sharp reversal in Gross Domestic Product ("GDP") expansion forced emerging market central banks to slash interest rates, even in countries with vulnerable currencies, such as Turkey and South Africa. As the new year progressed, marginal month-over-month improvements in U.S. housing, income and consumption data, coupled with the positive investor reception of the U.S. Treasury's plan to partner with private investors to purchase toxic bank assets, spurred a market rally. Stimulus packages were enacted worldwide, representing an unprecedented commitment from governments across the globe to stabilize the world's economies. Although the global economy remains under tremendous stress, an improvement in the pace of contraction helped strengthen investor confidence. With emerging markets among the worst performing equities last year, the rebound was expectedly robust. The favored BRIC markets (Brazil, Russia, India, China) and cyclical sectors delivered strong results, but low quality areas actually posted sizable gains. Many of these markets, such as Eastern Europe, were oversold and due for some type of re-rating. Currencies have rebounded, lowering inflation risk and allowing for more accommodative monetary policy; the Reserve Bank of India, for example, had slashed its lending rate to 4.75% by April 21, 2009. Many economists are watching China, where government officials have delivered a stimulus package rivaled only by the U.S. Loans are already soaring and 2009 GDP forecasts for China may be conservative. 2 PERFORMANCE OVERVIEW AMERICAN BEACON EMERGING MARKETS FUND(SM) APRIL 30, 2009 (UNAUDITED) The Institutional Class of the Emerging Markets Fund returned 14.88% for the six months ended April 30, 2009. The Fund underperformed the MSCI Emerging Markets Index ("Index") return of 17.38% but outperformed the Lipper Emerging Markets Funds Index return of 11.51% for the period.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 ---------------------------------------- SINCE INCEP. 6 MONTHS* 1 YEAR 5 YEARS (7/31/00) --------- ------ ------- --------- Institutional Class(1,4) ....... 14.88% -42.37% 9.20% 7.38% Investor Class(1,2,4) .......... 14.77% -42.55% 8.88% 7.14% AMR Class(1,4) ................. 15.06% -42.21% 9.46% 7.66% MSCI Emg Mkts Index(3) .................... 17.38% -42.90% 11.10% 7.78% Lipper Emg Mkts Funds Index(3) .................... 11.51% -46.11% 8.94% 6.76%
* Not annualized 1. The Investor Class was formerly known as the PlanAhead Class. 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 Investor Class, and the returns of the Investor Class since its inception. Expenses of the Investor Class are higher than those of the Institutional Class. Therefore, total returns shown may be higher than they would have been had the Investor Class been in existence since 7/31/00. A portion of the fees charged to the Investor 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, Investor and AMR Class shares was 1.39%, 1.73% 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 the Fund's equitized cash balances returning less than the Index and stock selection. Country allocation added value for the period. Poor stock selections in South Korea, Brazil, and India more than offset positive selections in Taiwan and led to the relative underperformance. In South Korea, investments in Samsung Electronics Co. Ltd. (up 11.3%) and Sk Telecom Co. Ltd. (down 8.9%) hurt performance. Braskem S.A. (down 35.7%) in Brazil and Satyam Computer Services Ltd. (down 82.1%) in India also contributed negatively to the Fund's relative performance. Investments in Taiwanese stocks Chinatrust Financial Holding Co. Ltd. (up 60.0%), Quanta Computer, Inc. (up 43.2%), and United Microelectronics Corp. (up 35.1%) benefited performance for the period. Relative contribution from country allocation was positive for the six-month period, as a result of overweighting China (up 30.1%) and Indonesia (up 44.9%). Overweighting Poland (down 20.3%) hurt performance for the period. The Fund's basic philosophy remains focused on investing in attractively valued companies with above-average earnings growth expectations. 3 PERFORMANCE OVERVIEW AMERICAN BEACON EMERGING MARKETS FUND(SM) APRIL 30, 2009 (UNAUDITED) TOP TEN HOLDINGS
% OF NET ASSETS ------------ Samsung Electronics Co. Ltd. .............. 3.5% Petroleo Brasileiro S.A. .................. 2.9% China Mobile Ltd. ......................... 2.6% Taiwan Semiconductor Manufacturing Co. Ltd. ................................... 2.0% Itau Unibanco Banco Multiplo S.A. ......... 1.9% PetroChina Co. Ltd. ....................... 1.9% LUKOIL Oil Co. ............................ 1.6% Gazprom OAO ............................... 1.6% America Movil, S.A.B. de C.V. ............. 1.6% Cia Vale do Rio Doce ...................... 1.5%
SECTOR ALLOCATION
% OF EQUITIES -------- Financials................................. 24.7% Telecommunication Services................. 15.1% Information Technology .................... 13.3% Energy..................................... 12.2% Materials.................................. 10.0% Consumer Discretionary..................... 8.2% Industrials................................ 5.1% Consumer Staples........................... 4.9% Utilities.................................. 4.8% Health Care................................ 1.7%
COUNTRY ALLOCATION (PIE CHART)
% OF EQUITIES --------- China...................................... 18.5% South Korea................................ 13.9% Brazil..................................... 13.0% Taiwan..................................... 10.9% Other Asia................................. 9.8% Other Europe, Middle East, Africa.......... 8.6% India...................................... 8.1% South Africa............................... 7.6% Russia..................................... 5.7% Mexico..................................... 3.9%
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. 4 FUND EXPENSES AMERICAN BEACON EMERGING MARKETS FUND(SM) APRIL 30, 2009 (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, 2008 through April 30, 2009. 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 Investor 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 Investor 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* 11/1/08 4/30/09 11/1/08-4/30/09 --------- --------- --------------- INSTITUTIONAL CLASS Actual ....................... $1,000.00 $1,148.78 $ 9.43 Hypothetical ................. $1,000.00 $1,016.02 $ 8.85 (5% return before expenses) INVESTOR CLASS Actual ....................... $1,000.00 $1,147.65 $11.18 Hypothetical ................. $1,000.00 $1,014.38 $10.49 (5% return before expenses) AMR CLASS Actual ....................... $1,000.00 $1,150.65 $ 8.11 Hypothetical ................. $1,000.00 $1,017.26 $ 7.60 (5% return before expenses)
* Expenses are equal to the Fund's annualized expense ratios for the six-month period of 1.77%, 2.10% and 1.52% for the Institutional, Investor 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 (181) by days in the year (365) to reflect the half year period. 5 INTERNATIONAL EQUITY MARKET OVERVIEW APRIL 30, 2009 (UNAUDITED) The six-month period encompassed the highs and the lows of recent equity market fluctuations as the MSCI EAFE Index fell 2.6% for the period ended April 30, 2009. Stocks plummeted at the beginning of the period in the aftermath of Lehman Brothers' failure and American International Group's effective nationalization, and volatility neared its highest levels ever. The fallout in credit markets from the collapse of Wall Street's investment banks was severe, and the global credit crisis took its toll on the real economy. The Baltic Dry Index, a key measure of global trade activity, fell by a staggering 94%, unemployment in the U.S. hit a 26-year high, home prices and manufacturing volumes contracted sharply, and the world economy entered its first global recession since World War II. In response, global monetary authorities aggressively intervened in the marketplace, pledging essentially unlimited amounts of capital to stabilize faltering economies and shore up equity markets. By the end of 2008, most major economies had entered, or stood on the brink of, recession, and most major markets had delivered their worst annual returns since the Great Depression. The situation worsened at the beginning of 2009, as equity markets broke through November's lows in early March due to disappointing corporate earnings results, additional bank write-downs and the further deterioration of economic conditions. Yet, sentiment shifted in the latter part of March, and in April, global stocks posted their steepest monthly gains in two decades as corporate earnings came in better than lowered expectations and investors seemed to believe the worst of the credit crisis was behind them. The rally was led by some of the hardest hit, most indebted and most economically sensitive sectors, including financials, materials, industrials and consumer discretionary. In currency markets, the Dollar weakened against the Euro, but strengthened slightly against the Yen amid volatile trading. 6 PERFORMANCE OVERVIEW AMERICAN BEACON INTERNATIONAL EQUITY FUND(SM) APRIL 30, 2009 (UNAUDITED) The Institutional Class of the International Equity Fund returned -1.98% for the six months ended April 30, 2009. The Fund outperformed the MSCI EAFE Index ("Index") return of -2.64% but underperformed the Lipper International Funds Index return of -1.59% for the period.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 -------------------------------------- 6 MONTHS* 1 YEAR 5 YEARS 10 YEARS -------- ------ ------- -------- Institutional Class(1,4) ....... -1.98% -41.28% 0.82% 2.22% Investor Class(1,4) ....... -2.15% -41.47% 0.55% 1.98% Advisor Class (1,2,4) .......... -2.32% -41.68% 0.27% 1.81% AMR Class(1,4) ...... -1.91% -41.17% 1.08% 2.47% Lipper Int'l. Funds Index(3) ... -1.59% -42.02% 1.47% 1.39% MSCI EAFE Index (3).. -2.64% -42.76% 0.66% -0.04%
* Not annualized 1. The Investor and Advisor Classes were formerly known as the PlanAhead and Service Classes, respectively. 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 Investor Class from 4/30/99 up to 5/1/03, the inception date of the Advisor Class, and the returns of the Advisor Class since its inception. Expenses of the Advisor Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the Advisor Class been in existence since 4/30/99. A portion of the fees charged to the Advisor 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. The MSCI EAFE Index is a market capitalization weighted index of international stock performance composed of equities from developed markets excluding the U.S. and Canada. One cannot directly invest in an index. 4. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Investor, Advisor and AMR Class shares was 0.67%, 1.05%, 1.19% 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 0.66% over the six-month period due to stock selection, as country allocation detracted from performance. Stock selection had a significantly positive impact overall, particularly in Germany, Greece, the United Kingdom, and Ireland, while the Fund lost value through selections in Hong Kong and Canada. In Germany, Siemens AG (up 18.7%) was the most significant contributor to relative outperformance. In Greece, the Fund benefited from investments in Public Power Corp. S.A. (up 59.0%) and OPAP S.A. (up 49.4%). Vodafone Group plc (down 1.9%) in the United Kingdom and CRH plc (up 43.3%) in Ireland also helped performance. Investments in HSBC Holdings plc (down 33.3%) in Hong Kong, and TELUS Corp. and Precision Drilling Trust (down 27.9% and 53.1%, respectively) in Canada, weakened performance during the period. Country allocation hurt performance, specifically underweighting Australia (up 7.5%) and Japan (down 2.4%), and overweighting Ireland (down 19.0%). However, investing in South Korea (up 20.3%) added value. 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. 7 PERFORMANCE OVERVIEW AMERICAN BEACON INTERNATIONAL EQUITY FUND(SM) APRIL 30, 2009 (UNAUDITED) TOP TEN HOLDINGS
% OF NET ASSETS ---------- Siemens AG....................... 2.7% E.ON AG.......................... 2.5% Vodafone Group plc............... 2.4% Sanofi-Aventis S.A............... 2.3% Total S.A........................ 2.0% Royal Dutch Shell plc............ 1.9% HSBC Holdings plc................ 1.9% BP plc........................... 1.7% BAE Systems plc.................. 1.7% GlaxoSmithKline plc.............. 1.6%
SECTOR ALLOCATION
% OF EQUITIES ---------- Financials....................... 19.9% Consumer Discretionary........... 13.6% Industrials...................... 16.0% Energy........................... 10.4% Telecommunication Services....... 9.2% Consumer Staples................. 6.9% Health Care...................... 8.2% Materials........................ 5.4% Information Technology........... 6.0% Utilities........................ 4.4%
REGIONAL ALLOCATION* (PIE CHART) * Shown as a percentage of equities
% OF EQUITIES ---------- Europe........................... 76.3% Pacific Rim...................... 21.5% North America.................... 2.2%
8 FUND EXPENSES AMERICAN BEACON INTERNATIONAL EQUITY FUND(SM) APRIL 30, 2009 (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, 2008 through April 30, 2009. 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 Investor 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 Investor 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* 11/1/08 4/30/09 11/1/08-4/30/09 --------- --------- --------------- INSTITUTIONAL CLASS Actual $1,000.00 $ 980.24 $3.58 Hypothetical $1,000.00 $1,021.17 $3.66 (5% return before expenses) INVESTOR CLASS Actual $1,000.00 $ 978.46 $4.86 Hypothetical $1,000.00 $1,019.89 $4.96 (5% return before expenses) ADVISOR CLASS Actual $1,000.00 $ 976.82 $6.57 Hypothetical $1,000.00 $1,018.15 $6.71 (5% return before expenses) AMR CLASS Actual $1,000.00 $ 980.89 $2.36 Hypothetical $1,000.00 $1,022.41 $2.41 (5% return before expenses)
* Expenses are equal to the Fund's annualized expense ratios for the six-month period of 0.73%, 0.99%, 1.34% and 0.48% for the Institutional, Investor, Advisor 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 (181) by days in the year (365) to reflect the half year period. 9 AMERICAN BEACON EMERGING MARKETS FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) BRAZIL - 11.99% COMMON STOCKS - 8.46% Amil Participacoes S.A. ## ................... 7,000 $ 26 Banco Bradesco S.A., ADR + ................... 12,900 158 BM & F Bovespa S.A. ## ....................... 75,000 304 Centrais Eletricas Brasileiras S.A. .......... 24,966 328 Cia de Bebidas das Americas, ADR + ........... 6,700 378 Cia de Saneamento Basico do Estado de Sao Paulo ..................................... 9,570 136 Cia de Saneamento Basico do Estado de Sao Paulo, ADR + .............................. 1,260 36 Cia de Saneamento de Minas Gerais-COPASA ..... 27,100 295 Cia Energetica de Minas Gerais, ADR + ........ 2,474 37 Cia Vale do Rio Doce, ADR + .................. 30,540 504 Empresa Brasileira de Aeronautica S.A. (Embraer), ADR + .......................... 5,480 89 Grendene S.A. ................................ 45,400 309 Itau Unibanco Banco Multiplo S.A., ADR + ..... 118,875 1,632 Lojas Renner SA .............................. 19,800 181 Medial Saude S.A. ## ......................... 52,000 162 PDG Realty SA Empreendimentos e Participacoes ............................. 17,700 167 Perdigao S.A. ## ............................. 22,605 333 Petroleo Brasileiro S.A., ADR ................ 1,750 59 Petroleo Brasileiro S.A., A Shares, ADR ...... 99,299 2,679 Vivo Participacoes S.A., ADR + ............... 7,500 120 Votorantim Celulose e Papel S.A., ADR ## + ... 10,650 93 ---------- TOTAL COMMON STOCKS ............................. 8,026 ---------- PREFERRED STOCKS - 3.53% Banco Bradesco S.A. .......................... 7,500 93 Braskem S.A. ## .............................. 83,300 235 Cia de Tecidos do Norte de Minas - Coteminas ## .............................. 57,862 107 Cia Energetica de Minas Gerais ............... 32,750 399 Cia Vale do Rio Doce, ADR .................... 59,386 815 Cia Vale do Rio Doce, A Shares ............... 9,804 136 Companhia Paranaense de Energia .............. 17,500 216 Itau Unibanco Banco Multiplo S.A. ............ 11,487 160 Net Servicos de Comunicacao S.A. ## .......... 42,377 347 Tele Norte Leste Participacoes S.A., ADR + ... 40,310 627 Ultrapar Participacoes S.A. .................. 7,600 212 ---------- TOTAL PREFERRED STOCKS .......................... 3,347 ---------- TOTAL BRAZIL .................................... 11,373 ---------- CZECH REPUBLIC - 1.17% COMMON STOCKS - 1.17% CEZ .......................................... 10,752 447 Komercni Banka, a.s. ......................... 2,864 387
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Telefonica O2 ## ............................. 12,953 $ 277 ---------- TOTAL CZECH REPUBLIC ............................ 1,111 ---------- HONG KONG/CHINA - 17.06% COMMON STOCKS - 17.06% Anhui Conch Cement Co. Ltd. ## + ............. 58,200 390 Anhui Expressway Co. Ltd. .................... 324,000 163 Bank of China Ltd. ........................... 1,687,900 632 Beijing Enterprises Holdings Ltd. ## + ....... 66,500 292 Belle International Holdings Ltd. ............ 276,000 214 Bosideng International Holdings Ltd. ......... 2,798,000 227 BYD Electronic International Co. Ltd. ........ 194,000 100 China Communications Services Corp. Ltd. ## .. 256,000 152 China Construction Bank Corp. + .............. 1,116,000 652 China Life Insurance Co. Ltd. + .............. 245,000 869 China Mobile Ltd. ............................ 225,500 1,967 China Mobile Ltd., ADR ....................... 12,340 533 China Molybdenum Co. Ltd. .................... 166,000 84 China Power International Development Ltd. + .................................... 2,261,800 511 China Railway Construction Corp. Ltd. ## ..... 66,100 92 China Resources Power Holdings Co. Ltd. ...... 120,000 271 China Telecom Corp. Ltd. ..................... 315,100 157 China Unicom Hong Kong Ltd. + ................ 336,744 388 China Zhongwang Holdings Ltd. ## ............. 392,400 358 CNOOC Ltd. ................................... 92,000 103 CNOOC Ltd., ADR + ............................ 4,040 450 COSCO Pacific Ltd. ........................... 462,000 442 Datang International Power Generation Co. Ltd. + .................................... 294,000 143 Denway Motors Ltd. ........................... 792,700 332 Dongfang Electric Corp. Ltd. ## + ............ 93,800 247 Dongfeng Motor Group Co. Ltd. ................ 814,000 614 Focus Media Holding Ltd., ADR ## + ........... 9,100 57 Global Bio-chem Technology Group Co. Ltd. .... 1,267,800 170 GOME Electrical Appliances Holdings Ltd. ++ .. 2,368,000 345 Huaneng Power International, Inc. ## ......... 279,900 191 Huaneng Power International, Inc., ADR ## + 530 14 Industrial & Commercial Bank of China + ...... 1,010,000 584 NWS Holdings Ltd. ............................ 72,167 146 PetroChina Co. Ltd. + ........................ 1,746,000 1,543 PetroChina Co. Ltd., ADR + ................... 2,550 222 Ping'an Insurance Co. Ltd. ## + .............. 61,000 381 Shanghai Industrial Holdings Ltd. ............ 171,750 588 Sina Corp. ## ................................ 3,100 87 Sinopec Shanghai Petrochemical Co. Ltd. ...... 421,470 144 Sinotrans Ltd. ............................... 1,348,000 250 Texwinca Holdings Ltd. ....................... 244,000 150 TPV Technology Ltd. + ........................ 728,970 243 Weiqiao Textile Co. + ........................ 693,600 278
See accompanying notes 10 AMERICAN BEACON EMERGING MARKETS FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Yanzhou Coal Mining Co. Ltd. ## .............. 346,000 $ 326 Yanzhou Coal Mining Co. Ltd., ADR ## + ....... 8,940 86 ---------- TOTAL HONG KONG/CHINA ........................... 16,188 ---------- HUNGARY - 0.58% COMMON STOCKS - 0.58% Gedeon Richter Rt. ## ........................ 2,910 382 Magyar Telekom Telecommunications plc ........ 70,000 164 ---------- TOTAL HUNGARY ................................... 546 ---------- INDIA - 7.46% COMMON STOCKS - 7.46% ACC Ltd. ..................................... 7,700 101 Andhra Bank .................................. 89,380 100 Axis Bank Ltd. ............................... 16,900 190 Bharat Heavy Electricals Ltd. ................ 13,355 446 Bharat Petroleum Corp. Ltd. .................. 10,383 80 Deccan Chronicle Holdings Ltd. ............... 51,879 65 Dr Reddys Laboratories Ltd. ## ............... 21,210 232 Dr Reddys Laboratories Ltd., ADR ## + ........ 2,230 25 HDFC Bank Ltd. ............................... 29,263 650 Hero Honda Motors Ltd. ## .................... 12,326 292 Hindalco Industries Ltd. ..................... 87,060 94 Hindustan Petroleum Corp. Ltd. ............... 63,080 347 Hindustan Unilever Ltd. ...................... 87,767 413 ICICI Bank Ltd., ADR + ....................... 3,530 73 India Cements Ltd. ........................... 136,880 315 Infosys Technologies Ltd. .................... 17,112 512 ITC Ltd. ## .................................. 62,750 237 Jaiprakash Associates Ltd. ## ................ 19,000 53 Mahanagar Telephone Nigam Ltd. ............... 192,030 276 Mahindra & Mahindra Ltd. ..................... 8,905 88 Maruti Suzuki India Ltd. ..................... 5,882 96 Oil & Natural Gas Corp. Ltd. ................. 19,641 341 Reliance Industries Ltd. ..................... 5,190 188 State Bank of India Ltd. ## .................. 19,630 509 State Bank of India Ltd., GDR + # ............ 9,700 543 Steel Authority of India Ltd. ................ 33,406 73 Sterlite Industries (India) Ltd. ............. 6,590 55 Sterlite Industries (India) Ltd., ADR + ...... 18,830 160 Tata Consultancy Services Ltd. ............... 21,080 263 Union Bank of India ## ....................... 43,600 142 Unitech Ltd. ## .............................. 130,863 119 ---------- TOTAL INDIA ..................................... 7,078 ---------- INDONESIA - 2.58% COMMON STOCKS - 2.58% Astra International Tbk PT ................... 124,900 212 Bank Mandiri Tbk PT .......................... 969,000 254
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) PT Bank Central Asia Tbk ..................... 1,130,500 $ 358 PT Bank Rakyat Indonesia Tbk ................. 486,000 266 PT Bumi Resources Tbk ........................ 551,500 77 PT Gudang Garam Tbk .......................... 388,800 274 PT Kalbe Farma Tbk ........................... 2,502,600 213 PT Perusahaan Gas Negara Persero Tbk ......... 757,500 186 PT Telekomunikasi Indonesia Tbk .............. 814,800 604 ---------- TOTAL INDONESIA ................................. 2,444 ---------- ISRAEL - 1.13% COMMON STOCKS - 1.13% Bank Hapoalim B.M. ## ........................ 71,760 165 Check Point Software Technologies Ltd. ## + .. 9,268 215 Israel Discount Bank Ltd. .................... 236,905 223 Teva Pharmaceutical Industries Ltd., ADR + ... 10,753 472 ---------- TOTAL ISRAEL .................................... 1,075 ---------- MALAYSIA - 3.05% COMMON STOCKS - 3.05% Commerce Asset-Holding Bhd ................... 76,700 174 Digi.Com BHD ................................. 21,100 132 Gamuda Bhd ................................... 433,500 292 Genting Bhd .................................. 259,530 341 Malayan Banking Bhd .......................... 670,170 817 Resorts World Bhd ............................ 384,300 261 Sime Darby Bhd ............................... 244,500 454 Tenaga Nasional Bhd .......................... 204,400 422 ---------- TOTAL MALAYSIA .................................. 2,893 ---------- MEXICO - 3.63% COMMON STOCKS - 3.63% America Movil, S.A.B. de C.V., ADR ........... 44,787 1,471 Consorcio ARA, S.A.B. de C.V. + .............. 339,400 104 Desarrolladora Homex, S.A.B. de C.V., ADR ## + .................................. 6,212 115 Embotelladoras Arca, S.A.B. de C.V. + ........ 111,530 251 Gruma, S.A.B. de C.V. ## ..................... 103,490 63 Grupo Continential, S.A.B. de C.V. ........... 166,950 295 Grupo Financiero Banorte, S.A.B. de C.V. ## .. 165,689 256 Grupo Modelo, S.A.B. de C.V. ## .............. 74,400 217 Grupo Televisa, S.A., ADR ## ................. 25,000 387 Wal-Mart de Mexico, S.A.B. de C.V. + ......... 105,313 286 ---------- TOTAL MEXICO .................................... 3,445 ---------- NETHERLANDS - 0.00% COMMON STOCKS - 0.00% X5 Retail Group NV, GDR ## ................... 251 3 ----------
See accompanying notes 11 AMERICAN BEACON EMERGING MARKETS FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) PHILIPPINES - 0.28% COMMON STOCKS - 0.28% ABS-CBN Broadcasting Corp. ................... 97,500 $ 34 Bank of the Philippine Islands ............... 143,527 117 Metropolitan Bank & Trust .................... 58,200 36 Union Bank of the Philippines ................ 156,300 77 ---------- TOTAL PHILIPPINES ............................... 264 ---------- POLAND - 1.88% COMMON STOCKS - 1.88% Bank Handlowy W Warszawie S.A. ## ............ 5,975 93 Bank Pekao S.A. ## ........................... 17,672 639 Bank Zachodni WBK S.A. ## .................... 5,433 144 KGHM Polska Miedz S.A. ....................... 2,688 48 PGNiG Group ## ............................... 106,450 123 Powszechna Kasa Oszczednosci Bank Polski SA ........................................ 48,997 394 Telekomunikacja Polska S.A. .................. 65,072 344 ---------- TOTAL POLAND .................................... 1,785 ---------- RUSSIA - 5.23% COMMON STOCKS - 5.23% Gazprom OAO, ADR ............................. 83,910 1,500 LUKOIL Oil Co., ADR + ........................ 34,712 1,548 Mobile TeleSystems OJSC, ADR ## .............. 10,010 332 OAO Severstal, GDR # ......................... 9,060 35 OJSC MMC Norilsk Nickel, ADR + ............... 40,024 333 OJSC Rosneft Oil Co. ## ...................... 86,754 456 Polyus Gold Co., ADR ## + .................... 9,141 207 Vimpel-Communications, ADR ## ................ 30,276 285 Wimm-Bill-Dann Foods OJSC, ADR ## + .......... 3,912 175 X 5 Retail Group NV ## ....................... 6,524 87 ---------- TOTAL RUSSIA .................................... 4,958 ---------- SOUTH AFRICA - 6.96% COMMON STOCKS - 6.96% African Bank Investments Ltd. ................ 69,379 222 Anglo Platinum Ltd. ## ....................... 3,547 192 AngloGold Ashanti Ltd. ....................... 8,675 268 AngloGold Ashanti Ltd., ADR + ................ 21,544 664 ArcelorMittal South Africa Ltd. .............. 11,380 108 FirstRand Ltd. ............................... 312,410 481 Gold Fields Ltd., ADR + ...................... 15,760 164 Harmony Gold Mining Co. Ltd. ## .............. 15,300 143 Harmony Gold Mining Co. Ltd., ADR ## ......... 2,300 21 Impala Platinum Holdings Ltd. ................ 19,500 377 JD Group Ltd. ................................ 49,860 202 Mr Price Group Ltd. .......................... 48,193 149 MTN Group Ltd. ............................... 54,696 717
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Nampak Ltd. .................................. 211,240 $ 314 Naspers Ltd. ................................. 20,626 423 Nedbank Group Ltd. ........................... 42,284 434 SABMiller plc ................................ 14,704 251 Sanlam Ltd. .................................. 59,040 111 Sappi Ltd. ................................... 82,614 222 Sasol Ltd. ................................... 10,295 314 Sasol Ltd., ADR .............................. 4,610 139 Telkom South Africa Ltd. ..................... 34,410 436 Tiger Brands Ltd. ............................ 16,249 254 ---------- TOTAL SOUTH AFRICA .............................. 6,606 ---------- SOUTH KOREA - 12.82% COMMON STOCKS - 12.54% Amorepacific Corp. ........................... 398 212 Cheil Industries, Inc. ....................... 5,888 211 Cheil Worldwide, Inc. ........................ 1,202 218 Hanwha Chemical Corp. ........................ 5,001 45 Hyundai Motor Co. ............................ 7,638 408 Kangwon Land, Inc. ........................... 19,990 243 KB Financial Group, Inc. ## .................. 32,707 1,013 KB Financial Group, Inc., ADR ## + ........... 420 13 Korea Electric Power Corp. ## ................ 25,555 558 KT Corp. ..................................... 8,910 260 KT Corp., ADR + .............................. 27,550 395 KT&G Corp. ................................... 4,260 234 LG Chemical Ltd. ............................. 3,487 385 LG Electronics, Inc. ......................... 3,734 308 LG Telecom Ltd. .............................. 13,270 93 Lotte Shopping Co. Ltd. ...................... 2,771 484 NHN Corp. ## ................................. 3,992 484 POSCO ........................................ 1,676 519 POSCO, ADR ................................... 650 50 Samsung Electronics Co. Ltd. ................. 6,586 3,039 Samsung Fire & Marine Insurance Co. Ltd. ..... 1,810 247 Shinhan Financial Group Co. Ltd. ## .......... 34,816 860 SK Telecom Co. Ltd. .......................... 2,731 391 SK Telecom Co. Ltd., ADR ..................... 41,140 645 SSCP Co. Ltd. ## ............................. 8,596 88 Woongjin Coway Co. Ltd. ...................... 19,726 491 ---------- TOTAL COMMON STOCKS ............................. 11,894 ---------- PREFERRED STOCKS - 0.28% Samsung Electronics Co. Ltd. ................. 1,043 270 ---------- TOTAL SOUTH KOREA ............................... 12,164 ---------- TAIWAN - 10.06% COMMON STOCKS - 10.06% Acer, Inc. ................................... 165,680 317
See accompanying notes 12 AMERICAN BEACON EMERGING MARKETS FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Cathay Financial Holding Co. Ltd.............. 351,400 $ 394 China Motor Corp.............................. 39,245 17 Chinatrust Financial Holding Co. Ltd.......... 891,267 408 Chunghwa Telecom Co. Ltd...................... 170,196 324 Compal Electronics, Inc....................... 640,379 544 First Financial Holding Co. Ltd............... 427,873 226 Fubon Financial Holding Co. Ltd. ##........... 302,000 235 HON HAI Precision Industry Co. Ltd............ 409,750 1,184 HTC Corp...................................... 35,400 480 Mega Financial Holding Co. Ltd................ 700,000 284 Nan Ya Printed Circuit Board Corp............. 104,480 292 Nien Hsing Textile Co. Ltd.................... 144,000 51 Quanta Computer, Inc.......................... 352,875 527 Siliconware Precision Industries Co. ##....... 226,000 284 SinoPac Financial Holdings Co. Ltd............ 1,851,987 487 Taiwan Fertilizer Co. Ltd..................... 21,000 48 Taiwan Semiconductor Manufacturing Co. Ltd........................................ 1,034,503 1,727 Taiwan Semiconductor Manufacturing Co. Ltd., ADR.................................. 12,600 133 United Microelectronics Corp.................. 2,150,226 806 Wistron Corp. ##.............................. 180,000 228 Yaego Corp.................................... 1,000,000 226 Yuanta Financial Holding Co. Ltd.............. 549,000 322 ---------- TOTAL TAIWAN..................................... 9,544 ---------- THAILAND - 3.14% COMMON STOCKS - 3.14% Bangkok Bank PCL.............................. 196,390 475 Charoen Pokphand Foods PCL.................... 3,244,200 305 Kasikornbank PCL.............................. 479,800 757 Krung Thai Bank PCL........................... 2,282,000 343 PTT Exploration & Production PCL.............. 36,000 106 PTT PCL....................................... 77,900 397 Siam Cement PCL............................... 86,500 299 Siam Commercial Bank PCL...................... 70,500 117 Thai Union Frozen Products PCL................ 297,400 177 ---------- TOTAL THAILAND................................... 2,976 ---------- TURKEY - 3.08% COMMON STOCKS - 3.08% Akbank TAS.................................... 134,472 521 Anadolu Efes Biracilik Ve Malt Sanayii A.S. ##.................................... 21,655 154 Haci Omer Sabanci Holding A.S. ##............. 46,843 120 Turk Telekomunikasyon A.S. ##................. 36,035 99 Turkcell Iletisim Hizmetleri A.S.............. 64,058 328 Turkcell Iletisim Hizmetleri A.S., ADR ## +... 16,710 212 Turkiye Garanti Bankasi A.S. ##............... 306,541 644 Turkiye Halk Bankasi A.S. ##.................. 52,414 183 Turkiye Is Bankasi (Isbank)................... 159,310 460
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Turkiye Sise ve Cam Fabrikalari A.S. ## ...... 250,337 $ 196 ---------- TOTAL TURKEY .................................... 2,917 ---------- UNITED KINGDOM - 0.08% COMMON STOCKS - 0.08% JKX Oil & Gas plc ............................ 25,530 77 ---------- SHORT TERM INVESTMENTS - 6.75% Columbia Government Reserve Fund ............. 5,302,720 5,303
PAR AMOUNT ------------ U.S. Treasury, 0.08%, Due 6/11/2009 ss. .................. $ 1,105 1,105 ---------- TOTAL SHORT TERM INVESTMENTS .................... 6,408 ----------
SHARES ------------ SECURITIES LENDING COLLATERAL - 11.54% American Beacon U.S. Government Money Market Select Fund * ...................... 2,351,168 2,351 State Street Navigator Securities Lending Prime Portfolio ........................... 8,600,738 8,601 ---------- TOTAL SECURITIES LENDING COLLATERAL ............. 10,952 ---------- TOTAL INVESTMENTS 110.47% - (COST $113,464) ........ 104,807 LIABILITIES, NET OF OTHER ASSETS - (10.47%) ........ (9,932) ---------- TOTAL NET ASSETS - 100.00% ......................... $ 94,875 ==========
See accompanying notes 13 AMERICAN BEACON EMERGING MARKETS FUND SCHEDULE OF INVESTMENTS April 30, 2009 (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, 2009. ++ Valued at fair value pursuant to procedures approved by the Board of Trustees. # 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 $578 or 0.61% of net assets. The Fund has no right to demand registration of these securities. ss. At April 30, 2009, security pledged as collateral for open futures contracts. * The Fund is affiliated by having the same investment advisor. FUTURES CONTRACTS (DOLLARS IN THOUSANDS)
UNREALIZED NUMBER OF EXPIRATION MARKET APPRECIATION/ CONTRACTS DATE VALUE (DEPRECIATION) --------- ---------- ------ -------------- Emini S&P 500 Index... 171 Jun 2009 $7,439 $816 ====== ====
SECTOR DIVERSIFICATION
Percent of Net Assets ---------- Communications..................... 1.19% Consumer Discretionary............. 7.54% Consumer Staples................... 4.55% Energy............................. 11.27% Financials......................... 22.81% Health Care........................ 1.60% Industrials........................ 4.65% Information Technology............. 12.21% Materials.......................... 9.24% Telecommunication Services......... 12.73% Utilities.......................... 4.38% Short Term Investments............. 18.30% Liabilities, Net of Other Assets... (10.47)% ------ 100.00% ======
See accompanying notes 14 AMERICAN BEACON INTERNATIONAL EQUITY FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) AUSTRALIA - 0.49% COMMON STOCKS - 0.49% Insurance Australia Group Ltd.................... 2,154,061 $ 5,432 ---------- AUSTRIA - 0.24% COMMON STOCKS - 0.24% Telekom Austria AG............................... 202,700 2,685 ---------- BELGIUM - 0.36% COMMON STOCKS - 0.36% Anheuser-Busch Companies, Inc. +................. 127,200 3,924 ---------- BERMUDA - 0.21% COMMON STOCKS - 0.21% Esprit Holdings Ltd. ##.......................... 374,000 2,309 ---------- CANADA - 1.74% COMMON STOCKS - 1.74% Manulife Financial Corp.......................... 425,636 7,248 Precision Drilling Trust +....................... 819,901 3,896 TELUS Corp....................................... 339,469 8,108 ---------- TOTAL CANADA........................................ 19,252 ---------- DENMARK - 0.21% COMMON STOCKS - 0.21% Novo Nordisk.AS ##............................... 47,425 2,270 ---------- FINLAND - 1.70% COMMON STOCKS - 1.70% Nokia Oyj +...................................... 988,845 14,300 UPM-Kymmene Oyj.................................. 499,367 4,513 ---------- TOTAL FINLAND....................................... 18,813 ---------- FRANCE - 13.60% COMMON STOCKS - 13.60% Accor S.A. ##.................................... 50,500 2,153 AXA S.A. ## +.................................... 700,921 11,820 BNP Paribas ##................................... 161,068 8,578 Bouygues S.A. +.................................. 64,500 2,775 Carrefour S.A. ## +.............................. 208,060 8,504 Compagnie Generale des Etablissements Michelin ## +................................. 90,220 4,655 Credit Agricole S.A.............................. 530,773 7,865 EDF.............................................. 76,785 3,587 France Telecom S.A............................... 717,877 16,023 GDF Suez +....................................... 130,800 4,725 Groupe Danone +.................................. 42,300 2,022 Sanofi-Aventis S.A. +............................ 443,282 25,671 Technip S.A. +................................... 269,169 11,701
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Total S.A........................................ 431,237 $ 21,878 VINCI S.A. +..................................... 246,269 11,144 Vivendi S.A. ## +................................ 264,220 7,156 ---------- TOTAL FRANCE........................................ 150,257 ---------- GERMANY - 11.87% COMMON STOCKS - 11.30% adidas AG +...................................... 64,600 2,446 Allianz SE +..................................... 56,602 5,223 Bayer AG ## +.................................... 98,969 4,925 Bayerische Motoren Werke AG...................... 178,770 6,209 Celesio AG +..................................... 245,480 5,453 Daimler AG....................................... 68,400 2,457 Deutsche Post AG................................. 1,286,985 14,899 E.ON AG +........................................ 808,982 27,444 Linde AG ## +.................................... 90,661 7,237 Merck KGaA....................................... 81,740 7,349 Muenchener Rueckversicherungs-Gesellschaft AG +.......................................... 45,297 6,271 SAP AG........................................... 140,910 5,411 Siemens AG....................................... 437,558 29,543 ---------- TOTAL COMMON STOCKS................................. 124,867 ---------- PREFERRED STOCKS - 0.57% Henkel AG & Co. KGaA +........................... 231,222 6,281 ---------- TOTAL GERMANY....................................... 131,148 ---------- GREECE - 1.22% COMMON STOCKS - 1.22% OPAP S.A......................................... 289,765 8,987 Public Power Corp. S.A........................... 228,870 4,442 ---------- TOTAL GREECE........................................ 13,429 ---------- HONG KONG/CHINA - 1.50% COMMON STOCKS - 1.50% Cheung Kong Holdings Ltd......................... 472,500 4,963 Hutchison Whampoa Ltd............................ 187,000 1,105 Swire Pacific Ltd................................ 622,100 4,884 Yue Yuen Industrial Holdings Ltd................. 2,537,667 5,645 ---------- TOTAL HONG KONG/CHINA............................... 16,597 ---------- IRELAND - 0.82% COMMON STOCKS - 0.82% C&C Group plc.................................... 1,138,147 2,624 CRH plc, ADR..................................... 167,632 4,407 Smurfit Kappa Group plc.......................... 688,413 2,015 ---------- TOTAL IRELAND....................................... 9,046 ----------
See accompanying notes 15 AMERICAN BEACON INTERNATIONAL EQUITY FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) ITALY - 2.52% COMMON STOCKS - 2.52% Atlantia S.p.A ##................................ 157,900 $ 2,806 Eni S.p.A........................................ 486,151 10,581 Finmeccanica SpA ##.............................. 275,110 3,906 Intesa Sanpaolo S.p.A ##......................... 824,480 2,659 Mediaset S.p.A. ##............................... 923,190 5,225 UniCredit S.p.A. ##.............................. 1,086,667 2,687 ---------- TOTAL ITALY......................................... 27,864 ---------- JAPAN - 14.17% COMMON STOCKS - 14.17% Aeon Co. Ltd. +.................................. 695,800 5,419 Canon, Inc....................................... 158,200 4,732 Central Japan Railway Co......................... 544 3,216 Chiyoda Corp..................................... 426,000 2,536 Chuo Mitsui Trust Holdings, Inc.................. 1,093,400 3,559 Daito Trust Construction Co. Ltd................. 104,900 4,350 Fanuc Ltd........................................ 118,400 8,488 FUJIFILM Holdings Corp........................... 107,900 2,735 Haseko Corp. ##.................................. 4,226,018 2,657 Honda Motor Co. Ltd.............................. 157,700 4,549 HOYA Corp........................................ 149,400 2,571 INPEX Corp....................................... 335 2,116 Japan Tobacco, Inc............................... 1,360 3,406 JS Group Corp.................................... 308,100 3,749 KDDI Corp........................................ 1,792 8,032 Keyence Corp. ##................................. 5,900 1,039 Konica Minolta Holdings, Inc..................... 347,500 2,826 Kurita Water Industries Ltd. ##.................. 67,300 1,624 Mitsubishi Corp.................................. 182,200 2,790 Mitsubishi Estate Co. Ltd........................ 156,000 2,030 Mitsubishi Gas Chemical Co., Inc................. 859,000 3,981 Mitsubishi UFJ Financial Group, Inc.............. 1,726,700 9,367 NGK Spark Plug Co. Ltd. +........................ 541,000 5,200 Nintendo Co. Ltd................................. 11,400 3,041 Nomura Research Institute Ltd.................... 134,300 2,375 Olympus Corp. +.................................. 52,800 857 Sankyo Co. Ltd................................... 110,800 5,595 Secom Co. Ltd.................................... 93,400 3,447 Shin-Etsu Chemical Company Ltd................... 106,900 5,160 Sony Corp........................................ 118,902 3,050 Sony Financial Holdings, Inc..................... 2,609 8,175 Sumitomo Mitsui Financial Group, Inc............. 110,300 3,803 T&D Holdings, Inc................................ 34,950 1,035 Takeda Pharmaceutical Co. Ltd.................... 74,900 2,658 Tokio Marine Holdings, Inc....................... 43,900 1,155 Tokyo Electron Ltd............................... 216,900 9,853 Tokyo Gas Co. Ltd. ##............................ 332,000 1,259 Toyota Motor Corp. ##............................ 280,700 10,958
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Yamaha Motor Co. Ltd............................. 304,400 $ 3,201 ---------- TOTAL JAPAN......................................... 156,594 ---------- NETHERLANDS - 5.24% COMMON STOCKS - 5.24% Akzo Nobel N.V. +................................ 207,557 8,760 ASML Holding N.V................................. 401,720 8,270 ING Groep N.V. ##................................ 379,330 3,556 Koninklijke Philips Electronics N.V. ##.......... 707,136 12,874 Randstad Holding N.V. ## +....................... 55,060 1,271 Reed Elsevier N.V................................ 409,961 4,534 SBM Offshore N.V. ## +........................... 258,280 4,203 TNT N.V.......................................... 465,355 8,657 Unilever N.V..................................... 292,965 5,824 ---------- TOTAL NETHERLANDS................................... 57,949 ---------- NORWAY - 0.87% COMMON STOCKS - 0.87% Aker Solutions ASA............................... 783,350 4,814 Stolt-Nielsen S.A................................ 88,384 781 Telenor ASA ##................................... 640,840 4,022 ---------- TOTAL NORWAY........................................ 9,617 ---------- PORTUGAL - 0.52% COMMON STOCKS - 0.52% Portugal Telecom, SGPS, S.A. +................... 747,760 5,748 ---------- SINGAPORE - 2.66% COMMON STOCKS - 2.66% DBS Group Holdings Ltd........................... 2,483,182 15,934 Flextronics International Ltd. ##................ 848,510 3,292 Singapore Telecommunications Ltd................. 5,892,000 10,188 ---------- TOTAL SINGAPORE..................................... 29,414 ---------- SOUTH KOREA - 1.18% COMMON STOCKS - 1.18% Hyundai Heavy Industries......................... 49,183 8,817 KB Financial Group, Inc., ADR ## +............... 132,710 4,231 ---------- TOTAL SOUTH KOREA................................... 13,048 ---------- SPAIN - 2.51% COMMON STOCKS - 2.51% Banco Santander S.A.............................. 361,009 3,473 Banco Santander S.A., GDR ##..................... 400,828 3,688 Enagas S.A. ##................................... 100,485 1,759 Repsol YPF S.A................................... 257,990 4,939 Telefonica S.A. ##............................... 726,270 13,847 ---------- TOTAL SPAIN......................................... 27,706 ----------
See accompanying notes 16 AMERICAN BEACON INTERNATIONAL EQUITY FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) SWEDEN - 1.80% COMMON STOCKS - 1.80% Atlas Copco AB +................................. 645,240 $ 6,076 Nordea Bank AB................................... 582,370 4,276 Telefonaktiebolaget LM Ericsson ## +............. 1,082,375 9,553 ---------- TOTAL SWEDEN........................................ 19,905 ---------- SWITZERLAND - 7.34% COMMON STOCKS - 7.34% Adecco S.A. ##................................... 130,550 5,172 Credit Suisse Group AG........................... 178,066 6,958 Julius Baer Holdings............................. 126,800 4,222 Lonza Group AG +................................. 52,740 4,861 Nestle S.A. +.................................... 286,838 9,389 Novartis AG...................................... 327,330 12,447 Richemont S.A. ##................................ 319,086 5,759 Roche Holding AG................................. 56,180 7,113 Swiss Reinsurance................................ 100,960 2,431 UBS AG ##........................................ 853,789 11,932 Zurich Financial Services AG..................... 57,666 10,822 ---------- TOTAL SWITZERLAND................................... 81,106 ---------- UNITED KINGDOM - 20.17% COMMON STOCKS - 20.17% Anglo American plc ##............................ 325,770 7,152 Aviva plc........................................ 1,874,344 8,748 BAE Systems plc.................................. 3,465,085 18,364 BG Group plc..................................... 145,400 2,351 BP plc........................................... 2,655,249 18,953 British American Tobacco plc ##.................. 299,558 7,263 British Sky Broadcasting Group plc............... 863,040 6,215 Cadbury plc...................................... 499,764 3,752 Cairn Energy plc ##.............................. 34,200 1,084 Centrica plc..................................... 1,359,965 4,567 Compass Group plc................................ 735,520 3,526 GlaxoSmithKline plc.............................. 1,131,896 17,565 HSBC Holdings plc................................ 2,921,544 20,715 Imperial Tobacco Group plc....................... 203,210 4,663 Kingfisher plc................................... 1,256,400 3,459 Michael Page International ##.................... 546,569 2,232 National Grid plc................................ 228,981 1,912 Pearson plc...................................... 534,980 5,591 Prudential plc................................... 702,300 4,086 Reckitt Benckiser Group plc...................... 59,800 2,359 Rio Tinto plc.................................... 97,200 3,989 Rolls-Royce Group plc C Shares Entitlement Jul. 09 ## ++................................. 87,828,312 130 Rolls-Royce Group plc............................ 1,023,640 5,118 Royal Dutch Shell plc, A Shares +................ 334,822 7,784 Royal Dutch Shell plc, B Shares.................. 581,659 13,398
SHARES VALUE ------------ ---------- (DOLLARS IN THOUSANDS) Smith Nephew ##.................................. 429,240 $ 3,051 Smiths Group plc ##.............................. 275,620 2,991 Standard Chartered plc........................... 167,390 2,620 Tesco plc........................................ 615,900 3,072 Unilever plc..................................... 521,061 10,221 Vodafone Group plc............................... 14,106,744 26,023 ---------- TOTAL UNITED KINGDOM................................ 222,954 ---------- UNITED STATES - 0.13% COMMON STOCKS - 0.13% News Corp........................................ 172,040 1,421 ---------- SHORT TERM INVESTMENTS - 4.68% American Beacon U.S. Government Money Market Select Fund #.......................... 10,000,000 10,000 Columbia Government Reserve Fund................. 41,722,418 41,722 ---------- TOTAL SHORT TERM INVESTMENTS........................ 51,722 ---------- SECURITIES LENDING COLLATERAL - 18.65% JP Morgan U.S. Government Money Market Fund.......................................... 103,053,049 103,053 Wells Fargo Advantage Government Money Market Fund................................... 103,053,049 103,053 ---------- TOTAL SECURITIES LENDING COLLATERAL.............. 206,106 ---------- TOTAL INVESTMENTS 116.40% - (COST $1,509,234)....... 1,286,316 LIABILITIES, NET OF OTHER ASSETS - (16.40%)......... (181,213) ---------- TOTAL NET ASSETS - 100.00%.......................... $1,105,103 ==========
See accompanying notes 17 AMERICAN BEACON INTERNATIONAL EQUITY FUND SCHEDULE OF INVESTMENTS April 30, 2009 (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, 2009. ++ Valued at fair value pursuant to procedures approved by the Board of Trustees. # The Fund is affiliated by having the same investment advisor. FUTURES CONTRACTS (DOLLARS IN THOUSANDS)
UNREALIZED NUMBER OF EXPIRATION MARKET APPRECIATION/ CONTRACTS DATE VALUE (DEPRICIATION) --------- ---------- ------- -------------- Australia SPI Index ............... 75 Jun 2009 $ 5,188 $ 176 Canada S&PCDA 60 Index ........... 77 Jun 2009 7,309 391 France CAC 40 Index .............. 190 Jun 2009 7,729 787 Germany DAX Index ................ 39 Jun 2009 6,200 732 Hang Seng Index .................. 21 May 2009 2,085 91 Italy MIB 30 Index ............... 24 Jun 2009 2,976 459 Netherlands 200 AEX Index ........ 32 May 2009 2,039 44 Spain IBEX 35 Index .............. 29 May 2009 3,418 79 Sweden OMX Index ................. 223 May 2009 2,103 63 Tokyo FE TOPIX Index ............. 198 Jun 2009 16,925 677 UK FTSE 100 Index ................ 230 Jun 2009 14,338 1,090 ------- ------ $70,310 $4,589 ======= ======
See accompanying notes 18 AMERICAN BEACON INTERNATIONAL EQUITY FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited) FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS (DOLLARS IN THOUSANDS)
SETTLEMENT MARKET UNREALIZED DATE VALUE GAIN/(LOSS) ---------- ------- --------------- CONTRACTS TO DELIVER 2,450 Australian Dollar ............................. 6/19/2009 $1,775 $ (39) 3,066 Canadian Dollar ............................... 6/19/2009 2,570 (76) 5,720 Euro Currency ................................. 6/19/2009 7,567 53 614,776 Japanese Yen .................................. 6/19/2009 6,237 (44) 3,732 Pound Sterling ................................ 6/19/2009 5,521 (10) 5,251 Swedish Krona ................................. 6/19/2009 653 (5) 2,085 Swiss Franc ................................... 6/19/2009 1,828 0 TOTAL CONTRACTS TO DELIVER ------- ------ (RECEIVABLE AMOUNT $26,030) $26,151 $ (121) ------- ------ CONTRACTS TO RECEIVE 8,053 Australian Dollar ............................. 6/19/2009 $ 5,835 $ 432 9,129 Canadian Dollar ............................... 6/19/2009 7,652 425 17,219 Euro Currency ................................. 6/19/2009 22,778 281 2,345,366 Japanese Yen .................................. 6/19/2009 23,797 (153) 11,257 Pound Sterling ................................ 6/19/2009 16,652 684 15,117 Swedish Krona ................................. 6/19/2009 1,879 84 7,895 Swiss Franc ................................... 6/19/2009 6,922 117 TOTAL CONTRACTS TO RECEIVE ------- ------ (PAYABLE AMOUNT $83,645) $85,515 $1,870 ------- ------ Net Currency Fluctuation $1,749 ======
SECTOR DIVERSIFICATION
Percent of Net Assets ---------- Consumer Discretionary ....................................... 12.65% Consumer Staples ............................................. 6.42% Energy ....................................................... 9.74% Financials ................................................... 18.50% Health Care .................................................. 7.64% Industrials .................................................. 14.87% Information Technology ....................................... 5.56% Materials .................................................... 5.05% Telecommunication Services ................................... 8.57% Utilities .................................................... 4.07% Short Term Investments ....................................... 23.33% Liabilities, Net of Other Assets ............................. ------ 100.00% ======
See accompanying notes 19 AMERICAN BEACON FUNDS STATEMENTS OF ASSETS AND LIABILITIES APRIL 30, 2009 (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
EMERGING MARKETS INTERNATIONAL FUND EQUITY FUND ---------- ------------- ASSETS: Investments in unaffiliated securities, at value (A, D) ................ $ 102,456 $ 1,276,316 Investments in affiliated securities, at value (B) ..................... 2,351 10,000 Foreign currency, at value (C) ......................................... 920 7,729 Cash ................................................................... -- 1,109 Deposit with brokers for futures contracts ............................. -- 11,330 Receivable for investments sold ........................................ 809 8,180 Dividends and interest receivable ...................................... 349 6,273 Receivable for fund shares sold ........................................ 12 1,093 Receivable for tax reclaims ............................................ 5 483 Receivable for variation margin on open futures contracts .............. 8 1,186 Net unrealized appreciation on foreign currency contracts .............. -- 1,749 Prepaid expenses ....................................................... 18 56 Other assets ........................................................... -- 41 ---------- ----------- TOTAL ASSETS ........................................................ 106,928 1,325,545 ---------- ----------- LIABILITIES: Payable for investments purchased ...................................... 845 10,040 Payable upon return of securities loaned ............................... 10,952 207,215 Payable for fund shares redeemed ....................................... 42 1,653 Management and investment advisory fees payable (Note 2) ............... 195 952 Administrative service and service fees payable ........................ 6 296 Other liabilities ...................................................... 13 286 ---------- ----------- TOTAL LIABILITIES ................................................... 12,053 220,442 ---------- ----------- NET ASSETS ................................................................ $ 94,875 $ 1,105,103 ========== =========== ANALYSIS OF NET ASSETS: Paid-in-capital ........................................................... 137,005 1,546,766 Undistributed net investment income ....................................... 193 17,636 Accumulated net realized (loss) ........................................... (34,491) (243,003) Unrealized (depreciation) of investments, futures contracts, and foreign currency ............................................................... (7,832) (216,296) ---------- ----------- NET ASSETS ................................................................ $ 94,875 $ 1,105,103 ========== =========== Shares outstanding (no par value): Institutional Class .................................................... 732,681 34,055,209 ========== =========== Investor Class ......................................................... 661,759 30,894,856 ========== =========== Advisor Class .......................................................... N/A 136,674 ========== =========== AMR Class .............................................................. 9,670,433 27,797,490 ========== =========== Net asset value, offering and redemption price per share: Institutional Class .................................................... $ 8.55 $ 11.93 ========== =========== Investor Class ......................................................... $ 8.43 $ 11.79 ========== =========== Advisor Class .......................................................... N/A $ 11.73 ========== =========== AMR Class .............................................................. $ 8.59 $ 11.99 ========== =========== (A) Cost of investments in unaffiliated securities ........................ $ 111,113 $ 1,499,234 (B) Cost of investments in affiliated securities .......................... $ 2,351 $ 10,000 (C) Cost of foreign currency .............................................. $ 908 $ 7,693 (D) Market value of securities on loan .................................... $ 10,512 $ 196,972
See accompanying notes 20 AMERICAN BEACON FUNDS STATEMENTS OF OPERATIONS SIX MONTHS ENDED APRIL 30, 2009 (UNAUDITED) (IN THOUSANDS)
EMERGING MARKETS INTERNATIONAL FUND EQUITY FUND -------- ------------- INVESTMENT INCOME: Dividend income from unaffiliated securities (net of foreign taxes) (A) .......................................................... $ 831 $ 20,617 Dividend income from affiliated securities ............................. 7 42 Interest income ........................................................ 3 30 Income derived from securities lending, net ............................ 89 531 -------- --------- TOTAL INVESTMENT INCOME .......................................... 930 21,220 -------- --------- EXPENSES: Management and investment advisory fees (Note 2) ....................... 308 1,756 Administrative service fees (Note 2): Institutional Class ................................................. 8 652 Investor Class ...................................................... 7 540 Advisor Class ....................................................... -- 2 AMR Class ........................................................... 18 77 Transfer agent fees: Institutional Class ................................................. -- 27 Investor Class ...................................................... 2 21 Advisor Class ....................................................... -- 1 AMR Class ........................................................... 3 12 Custody and fund accounting fees ....................................... 210 167 Professional fees ...................................................... 27 35 Registration fees and expenses ......................................... 14 35 Service fees (Note 2): Investor Class ...................................................... 6 460 Advisor Class ....................................................... -- 2 Distribution fees- Advisor Class (Note 2) .............................. -- 2 Prospectus and shareholder reports ..................................... 5 147 Trustee fees ........................................................... 2 33 Other expenses ......................................................... 43 141 -------- --------- TOTAL EXPENSES ................................................... 653 4,110 -------- --------- NET INVESTMENT INCOME ..................................................... 277 17,110 -------- --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from: (B) Investments ......................................................... (15,601) (189,872) Commission recapture (Note 1) ....................................... -- 33 Foreign currency transactions ....................................... (4,409) (25,838) Futures contracts ................................................... (2,208) (24,231) Change in net unrealized appreciation or depreciation of: Investments ......................................................... 27,823 134,358 Foreign currency translations ....................................... 4,228 30,760 Futures contracts ................................................... 2,131 21,382 -------- --------- NET GAIN (LOSS) ON INVESTMENTS ................................... 11,964 (53,408) -------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ........... $ 12,241 $ (36,298) ======== ========= (A) Foreign taxes ......................................................... $ 95 $ 1,964 (B) Net of foreign withholding taxes on capital gains ..................... $ 2 $ --
See accompanying notes 21 AMERICAN BEACON FUNDS STATEMENTS OF CHANGES IN NET ASSETS (IN THOUSANDS)
Emerging Markets Fund International Equity Fund ------------------------ --------------------------- Six Months Ended Year Ended Six Months Year Ended April 30, October 31, Ended October 31, 2009 2008 April 30, 2009 2008 ----------- ----------- -------------- ----------- (unaudited) (unaudited) INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income .................................................. $ 277 $ 2,837 $ 17,110 $ 71,599 Net realized gain (loss) on investments, futures contracts, and foreign currency transactions ............................................... (22,218) 1,673 (239,908) 33,063 Change in net unrealized appreciation or depreciation of investments, futures contracts, and foreign currency translations ................ 34,182 (133,877) 186,500 (1,329,781) -------- --------- ---------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................................................... 12,241 (129,367) (36,298) (1,225,119) -------- --------- ---------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Institutional Class ................................................. (129) (58) (22,416) (40,937) Investor Class ...................................................... (93) (43) (17,116) (20,913) Advisor Class ....................................................... -- -- (61) (105) AMR Class ........................................................... (2,146) (2,023) (17,313) (18,454) Net realized gain on investments: Institutional Class ................................................. (798) (2,019) (12,166) (155,609) Investor Class ...................................................... (756) (1,876) (10,088) (87,859) Advisor Class ....................................................... -- -- (40) (482) AMR Class ........................................................... (11,267) (39,911) (8,489) (63,681) -------- --------- ---------- ----------- NET DISTRIBUTIONS TO SHAREHOLDERS ................................ (15,189) (45,930) (87,689) (388,040) -------- --------- ---------- ----------- CAPITAL SHARE TRANSACTIONS: Proceeds from sales of shares .......................................... 10,727 28,155 145,312 443,828 Reinvestment of dividends and distributions ............................ 15,153 45,849 81,731 366,395 Cost of shares redeemed ................................................ (11,243) (112,884) (321,599) (1,148,081) Redemption fees ........................................................ 9 161 130 868 -------- --------- ---------- ----------- NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS .................................................. 14,646 (38,719) (94,426) (336,990) -------- --------- ---------- ----------- NET INCREASE (DECREASE) IN NET ASSETS ..................................... 11,698 (214,016) (218,413) (1,950,149) -------- --------- ---------- ----------- NET ASSETS: Beginning of period .................................................... 83,177 297,193 1,323,516 3,273,665 -------- --------- ---------- ----------- END OF PERIOD * ........................................................ $ 94,875 $ 83,177 $1,105,103 $ 1,323,516 ======== ========= ========== =========== *Includes undistributed net investment income (loss) of ................... $ 193 $ 2,109 $ 17,636 $ 70,764 ======== ========= ========== ===========
See accompanying notes 22 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (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, as amended, (the "Act") as a diversified, open-end management investment company. These financial statements and notes to the financial statements relate to the American Beacon Emerging Market and International Equity Funds (the "Funds"), a series of the Trust. American Beacon Advisors, Inc. (the "Manager") is a wholly-owned subsidiary of Lighthouse Holdings, Inc. and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors. Class Disclosure Prior to March 1, 2009, the Investor and Advisor Classes were formerly known as the PlanAhead and Service Classes, respectively. The Funds have 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: - ------ ----------- INSTITUTIONAL CLASS Investors making an initial investment of $2 million INVESTOR CLASS General public and investors investing through an intermediary ADVISOR CLASS Investors investing through an intermediary AMR CLASS Investors in the tax-exempt retirement and benefit plans of AMR Corporation and its affiliates
Administrative service fees, service fees and distribution fees vary amongst the classes as described more fully in footnote 2. 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. 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. 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"). 23 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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. The Funds adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), effective with the beginning of the Fund's fiscal year. The 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. The three levels of the hierarchy under FAS 157 are described below: Level 1 - Quoted prices in active markets for identical securities. Level 2 - Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. Level 3 - Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. A summary of the inputs used to value the Funds' investments as of April 30, 2009 is as follows (in thousands): Emerging Markets
Investments in Other Financial Valuation Inputs Securities Instruments* ---------------- --------------- --------------- Level 1 - Quoted prices....................................... $103,357 $816 Level 2 - Other significant observable inputs................. 1,105 -- Level 3 - Significant unobservable inputs.................... 345 -- -------- ---- Total......................................................... $104,807 $816 -------- ----
International Equity
Investments in Other Financial Valuation Inputs Securities Instruments* ---------------- -------------- --------------- Level 1 - Quoted prices....................................... $1,286,186 $4,589 Level 2 - Other significant observable inputs................. -- 1,749 Level 3 - Significant unobservable inputs..................... 130 ---------- ------ Total......................................................... $1,286,316 $6,338 ---------- ------
* Other financial instruments are futures and foreign currency exchange contracts. The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value: (in thousands)
EMERGING MARKETS INTERNATIONAL EQUITY Investments in Investments in Securities Securities ---------------- -------------------- Balance as of 10/31/08...................................... $ -- $ -- Transfers in................................................ 449 128 Change in unrealized appreciation/(depreciation)............ (104) 2 ----- ---- Balance as of 4/30/09....................................... $ 345 $130 ----- ----
The amount of total unrealized appreciation / (depreciation) on investments in level 3 securities still held at April 30, 2009 was $(301) and $2,for the Emerging and International Equity Funds, respectively, which is included in the Statements of Operations as part of the net change in unrealized appreciation (depreciation on investments. 24 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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 Funds may enter into forward foreign currency contracts to hedge the exchange rate risk on investment transactions or to hedge the value of Funds securities denominated in foreign currencies. Forward foreign currency contracts are valued at the forward exchange rate prevailing on the day of valuation. The Funds bear the market risk that arises from changes in foreign exchange rates, and accordingly, the unrealized gain (loss) on these contracts is reflected in the accompanying financial statements. The Funds also bear the credit risk if the counterparty fails to perform under the contract. Futures Contracts Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Funds may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations. Upon entering into a futures contract, the Funds are required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents 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 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. 25 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) Dividends to Shareholders Dividends from net investment income of the Funds 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 Funds have established brokerage commission recapture arrangements with certain brokers or dealers. If the Funds' investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Funds. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Funds. This amount is reported with the net realized gain in the Funds' Statements of Operations. 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 Funds impose a 2% redemption fee on shares held for less than 90 days. The fee is deducted from the redemption proceeds and is intended to offset the trading costs, market impact and other costs associated with short-term trading activity in the Funds. The "first-in, first-out" method is used to determine the holding period. The fee is allocated to all classes of the Funds pro-rata based on their respective net assets. Recently Issued Accounting Pronouncements In March 2008, FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("FAS 161"), which is effective for fiscal years and interim periods beginning after November 15, 2008. FAS 161 requires enhanced disclosures about derivative and hedging activities, including how such activities are accounted for and their effect on financial positions, performance and cash flows. The Manager is currently evaluating the impact the adoption of FAS 161 will have on the Funds' financial statements and related disclosures. 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. 26 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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 Funds 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 Funds an annualized fee equal to 0.05% 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, 2009 were as follows (dollars in thousands):
AMOUNTS PAID TO NET AMOUNTS MANAGEMENT MANAGEMENT INVESTMENT RETAINED BY FEE RATE FEE ADVISORS MANAGER ----------- ---------- --------------- ----------- Emerging Markets............. 0.60%-1.15% $ 308 $ 287 $ 21 International Equity......... 0.25%-0.55% $1,756 $1,480 $276
As compensation for services provided by the Manager in connection with securities lending activities, the 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, 2009 securities lending fees paid to the Manager on behalf of the Emerging Markets and International Equity Funds were $12,398 and $119,704, respectively. 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 0.30% of the average daily net assets of the Institutional, Investor, and Advisor Classes and 0.05% of the average daily net assets of the AMR Classes of the Funds. Distribution Plans The Funds, except for the Advisor 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 Funds do not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Funds shares. A separate Distribution Plan (the "Distribution Plan") has been adopted pursuant to Rule 12b-1 under the Act for the Advisor 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 Advisor 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. 27 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) Service Plans The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor and Advisor Classes. As compensation for performing the duties required under the Service Plans, the Manager receives up to 0.375% of the average daily net assets of the Investor Classes and 0.25% of the average daily net assets of the Advisor Classes of the Funds. Brokerage Commissions Affiliated entities of an investment advisor to the Funds received net commissions on purchases and sales of the Funds' portfolio securities totaling $403 and $2,420 for the Emerging Markets and International Equity Funds, respectively for the six months ended April 30, 2009. Investment in Affiliated Funds The Funds may invest in the American Beacon Money Market Select Fund (the "MM Select Fund") and the American Beacon U.S. Government Money Market Select Fund (the "USG Select Fund") (collectively the "Select Funds"). Cash collateral received by the Funds in connection with securities lending may be invested in the Select Funds. The Funds and the Select Funds have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the Select Funds and receives from the Select Funds an annualized management fee of 0.09% of the average daily net assets of the Select Funds. During the six months ended April 30, 2009, fees earned by the Manager from the Select Funds were as follows:
SECURITIES LENDING DIRECT INVESTMENTS IN COLLATERAL INVESTED SELECT FUNDS IN SELECT FUNDS TOTAL --------------------- ------------------- ------ Emerging Market Fund................ $ 594 $1,032 $1,627 International Equity Fund........... 3,015 -- 3,015
Interfund Lending Program Pursuant to an exemptive order by the Securities and Exchange Commission (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, 2009, the Funds did not utilize the credit facility. 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. During the six months ended April 30, 2009, there were no additional waived fees or reimbursed expenses subject to potential recovery. 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 28 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (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, 2008 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, 2009 and the year ended October 31, 2008 were as follows (in thousands):
EMERGING MARKETS INTERNATIONAL EQUITY -------------------------------- ------------------------------ SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2009 2008 2009 2008 ---------------- ------------- ---------------- ----------- DISTRIBUTIONS PAID FROM: (unaudited) (unaudited) ORDINARY INCOME* Institutional Class............. $ 129 $ 550 $22,416 $69,221 Investor Class.................. 93 499 17,116 36,886 Advisor Class................... -- -- 61 193 AMR Class....................... 2,146 11,725 17,313 30,031 LONG-TERM CAPITAL GAIN Institutional Class............. 798 1,527 12,166 127,324 Investor Class.................. 756 1,420 10,088 71,886 Advisor Class................... -- -- 40 395 AMR Class....................... 11,267 30,209 8,489 52,104 ------- ------- ------- -------- TOTAL DISTRIBUTIONS PAID.............. $15,189 $45,930 $37,869 $388,040 ======= ======= ======= ========
* For tax purposes, short-term capital gains are considered ordinary income distributions. As of April 30, 2009, the components of distributable earnings on a tax basis were as follows (in thousands):
EMERGING INTERNATIONAL MARKETS EQUITY --------- ------------- Cost basis of investments for federal income tax purposes ....... $127,719 $1,548,757 Unrealized appreciation ......................................... 4,570 88,931 Unrealized depreciation ......................................... (27,482) (351,372) -------- ---------- Net unrealized appreciation ..................................... (22,912) (262,441) Undistributed ordinary income ................................... 297 20,633 Undistributed long-term gain .................................... (19,177) (204,816) -------- ---------- Distributable earnings .......................................... $(41,792) $ (446,624) ======== ==========
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 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 Statements of Assets and Liabilities. 29 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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, 2009 (in thousands):
EMERGING INTERNATIONAL MARKETS EQUITY --------- -------------- Paid-in-capital ................................... $ -- $ 1,731 Undistributed net investment income ............... 175 (13,332) Accumulated net realized loss ..................... (175) 11,601 Unrealized depreciation of investments, futures contracts and foreign currency ......... -- --
At April 30, 2009, the capital loss carry forward position for federal income tax purposes was $19,177 and $204,816 for the Emerging Markets and International Equity Funds, respectively, both expiring in 2017. 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, 2009 were (in thousands):
EMERGING INTERNATIONAL MARKETS EQUITY --------- -------------- Purchases.......................................... $39,185 $226,613 Sales and maturities............................... $26,689 $309,505
A summary of the Funds' direct transactions in the Select Funds for the six months ended April 30, 2009 is set forth below (in thousands):
OCTOBER 31, 2008 APRIL 30, 2009 AFFILIATED FUND SHARES/MARKET VALUE PURCHASES SALES SHARES/MARKET VALUE --------------- ------------------- --------- ------- ------------------- Emerging Markets.......... MM Select Fund $ 5,304 -- $ 5,304 $ -- International Equity...... MM Select Fund $26,918 -- $26,918 $ -- International Equity...... USG Select Fund -- 10,000 -- 10,000
5. SECURITIES LENDING The Funds may lend their securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned and initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral. The amount of this temporary difference at April 30, 2009 is disclosed as the calculated mark in the table below. To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the "Agent") in money market mutual funds, and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retain 75%, 15%, and 10%, respectively, of the income generated from securities lending. 30 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) While securities are on loan, the Fund continues to receive any income associated with that security and any gain or loss in the market price that may occur during the term of the loan. Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Funds could also experience delays and costs in gaining access to the collateral. The Funds bear the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default. At April 30, 2009, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):
MARKET VALUE OF CASH COLLATERAL TOTAL VALUE OF FUND SECURITIES ON LOAN NON-CASH COLLATERAL POSTED BY BORROWER CALCULATED MARK COLLATERAL - ---- ------------------ ------------------- ------------------ --------------- -------------- Emerging Markets 10,512 -- 10,952 67 11,019 International Equity 196,972 -- 207,215 -- 207,215
Cash collateral is listed in the Funds' Schedules of Investments and is shown on Statements of Assets and Liabilities. Income earned on these investments is included in Income derived from securities lending in the Statements of Operations. Non-cash collateral received by the Funds may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Funds' Schedules of Investments or Statements of Assets and Liabilities. 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, 2009
INSTITUTIONAL CLASS I NVESTOR CLASS AMR CLASS ------------------- ----------------- ----------------- EMERGING MARKETS FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - --------------------- ------ ------ ------ ------ ------ -------- Shares sold ................................ 2 $ 18 65 $ 494 1,231 $ 10,215 Reinvestment of dividends .................. 126 917 114 822 1,833 13,414 Shares redeemed ............................ (4) (29)* (103) (739)* (1,400) (10,466)* --- ----- ---- ----- ------ -------- Net increase in shares outstanding ......... 124 $ 906 76 $ 577 1,664 $ 13,163 === ===== ==== ===== ====== ========
INSTITUTIONAL CLASS INVESTOR CLASS ADVISOR CLASS AMR CLASS ------------------- ------------------ --------------- ----------------- INTERNATIONAL EQUITY FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - ------------------------- ------- --------- ------ --------- ------ ------ ------ -------- Shares sold ............................ 4,520 $ 51,803 4,923 $ 56,497 14 $152 3,118 $ 36,860 Reinvestment of dividends .............. 2,451 29,191 2,263 26,656 7 82 2,157 25,802 Shares redeemed ........................ (16,121) (189,662)* (9,214) (106,482)* (4) (46)* (2,246) (25,279)* ------- --------- ------ --------- --- ---- ------ -------- Net increase (decrease) in shares outstanding ......................... (9,150) $(108,668) (2,028) $ (23,329) 17 $188 3,029 $ 37,383 ======= ========= ====== ========= === ==== ====== ========
Year Ended October 31, 2008
INSTITUTIONAL CLASS INVESTOR CLASS AMR CLASS ------------------- ------------------- -------------------- EMERGING MARKETS FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - --------------------- ------ ------- ------ -------- ------ --------- Shares sold ............................ 7 $ 117 540 $ 9,707 1,030 $ 18,331 Reinvestment of dividends .............. 109 2,039 101 1,876 2,222 41,934 Shares redeemed ........................ (76) (1,074)* (544) (9,254)* (6,393) (102,395)* --- ------- ---- ------- ------ --------- Net increase (decrease) in shares outstanding ......................... 40 $ 1,082 97 $ 2,329 (3,141) $ (42,130) === ======= ==== ======= ====== ========
31 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED)
INSTITUTIONAL CLASS INVESTOR CLASS ADVISOR CLASS AMR CLASS -------------------- ------------------- ---------------- ------------------- INTERNATIONAL EQUITY FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - ------------------------- ------- ---------- ------- --------- ------ ------- ------- --------- Shares sold ............................ 6,925 $ 137,615 12,711 $ 257,961 40 $ 790 2,312 $ 47,462 Reinvestment of dividends .............. 7,822 177,012 4,768 106,664 26 585 3,605 82,134 Shares redeemed ........................ (33,276) (680,261)* (18,249) (352,680)* (130) (2,617)* (5,574) (111,655)* ------- --------- ------- --------- ---- ------- ------ --------- Net increase (decrease) in shares outstanding ......................... (18,529) $(365,634) (770) $ 11,945 (64) $(1,242) 343 $ 17,941 ======= ========= ======= ========= ==== ======= ====== =========
- ---------- * Net of Redemption Fees 32 This page intentionally left blank. 33 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, ----------------------------------------------------- 2009 2008 2007 2006 2005 2004 ----------- ------- ------- ------- ------ ------ (unaudited) Net asset value, beginning of period ............. $ 9.00 $ 24.20 $ 17.42 $ 15.10 $12.64 $10.62 -------- ------- ------- ------- ------ ------ Income from investment operations: Net investment income (loss) .................. (0.01) 0.23 0.26 0.11 0.15 0.07 Net gains (losses) on securities (both realized and unrealized) ............................ 1.08 (11.78) 9.11 4.63 3.45 2.01 -------- ------- ------- ------- ------ ------ Total income (loss) from investment operations ... 1.07 (11.55) 9.37 4.74 3.60 2.08 -------- ------- ------- ------- ------ ------ Less distributions: Dividends from net investment income .......... (0.21) (0.10) (0.10) (0.21) (0.06) (0.06) Distributions from net realized gains on securities ................................. (1.31) (3.55) (2.49) (2.21) (1.08) -- -------- ------- ------- ------- ------ ------ Total distributions .............................. (1.52) (3.65) (2.59) (2.42) (1.14) (0.06) -------- ------- ------- ------- ------ ------ Redemption fees added to beneficial interests .... --(A) --(A) --(A) --(A) --(A) --(A) Net asset value, end of period ................... $ 8.55 $ 9.00 $ 24.20 $ 17.42 $15.10 $12.64 ======== ======= ======= ======= ====== ====== Total return ..................................... 14.88%(B) (55.59)% 60.83% 34.49% 30.11% 19.65% ======== ======= ======= ======= ====== ====== Ratios and supplemental data: Net assets, end of period (in thousands) ...... $ 6,262 $ 5,478 $13,773 $16,552 $9,348 $7,282 Ratios to average net assets (annualized): Expenses, net of waivers ...................... 1.77% 1.38% 1.60% 1.56% 1.52% 1.85% Expenses, before waivers ...................... 1.77% 1.38% 1.60% 1.56% 1.52% 1.85% Net investment income, net of waivers ......... 0.29% 1.35% 0.93% 0.80% 1.22% 0.74% Net investment income, before waivers ......... 0.29% 1.35% 0.93% 0.80% 1.22% 0.74% Portfolio turnover rate ....................... 36%(B) 82% 81% 67% 63% 76%
(A) Amounts represent less than $0.01 per share. (B) Not annualized. 34
Investor Class AMR Class - --------------------------------------------------------------- -------------------------------------------------------------- Six Six Months Months Ended Year Ended October 31, Ended Year Ended October 31, April 30, ------------------------------------------------ April 30, ------------------------------------------------- 2009 2008 2007 2006 2005 2004 2009 2008 2007 2006 2005 2004 - ----------- --------- ------- ------ ------ ------ ----------- ------- -------- -------- ------- ------- (unaudited) (unaudited) $ 8.85 $ 23.91 $ 17.22 $14.98 $12.53 $10.55 $ 9.06 $ 24.37 $ 17.52 $ 15.17 $ 12.68 $ 10.66 - ------ ------- ------- ------ ------ ------ -------- ------- -------- -------- ------- ------- 0.01 0.17 0.11 0.09 0.15 0.04 (0.01) 0.33 0.19 0.15 0.24 0.10 1.04 (11.60) 9.11 4.55 3.41 1.99 1.10 (11.91) 9.30 4.65 3.42 2.00 - ------ ------- ------- ------ ------ ------ -------- ------- -------- -------- ------- ------- 1.05 (11.43) 9.22 4.64 3.56 2.03 1.09 (11.58) 9.49 4.80 3.66 2.10 - ------ ------- ------- ------ ------ ------ -------- ------- -------- -------- ------- ------- (0.16) (0.08) (0.04) (0.19) (0.03) (0.05) (0.25) (0.18) (0.15) (0.24) (0.09) (0.08) (1.31) (3.55) (2.49) (2.21) (1.08) -- (1.31) (3.55) (2.49) (2.21) (1.08) -- - ------ ------- ------- ------ ------ ------ -------- ------- -------- -------- ------- ------- (1.47) (3.63) (2.53) (2.40) (1.11) (0.05) (1.56) (3.73) (2.64) (2.45) (1.17) (0.08) - ------ ------- ------- ------ ------ ------ -------- ------- -------- -------- ------- ------- --(A) --(A) --(A) --(A) --(A) --(A) --(A) --(A) --(A) -- -- -- $ 8.43 $ 8.85 $ 23.91 $17.22 $14.98 $12.53 $ 8.59 $ 9.06 $ 24.37 $ 17.52 $ 15.17 $ 12.68 ====== ======= ======= ====== ====== ====== ======== ======= ======== ======== ======= ======= 14.77%(B) (55.77)% 60.17% 34.16% 29.95% 19.33% 15.06%(B) (55.48)% 61.19% 34.87% 30.43% 20.00% ====== ======= ======= ====== ====== ====== ======== ======= ======== ======== ======= ======= $5,577 $ 5,183 $11,694 $5,841 $2,592 $1,214 $ 83,036 $72,516 $271,726 $135,146 $94,864 $74,199 2.10% 1.72% 1.96% 2.04% 1.75% 2.14% 1.52% 1.17% 1.37% 1.30% 1.25% 1.59% 2.10% 1.72% 1.96% 1.91% 2.01% 2.20% 1.52% 1.17% 1.37% 1.30% 1.25% 1.59% 0.15% 1.00% 0.65% 0.49% 1.16% 0.37% 0.73% 1.46% 1.25% 1.01% 1.60% 1.01% 0.15% 1.00% 0.65% 0.62% 0.90% 0.31% 0.73% 1.46% 1.25% 1.01% 1.60% 1.01% 36%(B) 82% 81% 67% 63% 76% 36%(B) 82% 81% 67% 63% 76%
35 AMERICAN BEACON INTERNATIONAL EQUITY FUND FINANCIAL HIGHLIGHTS (For a share outstanding throughout the period)
Institutional Class ---------------------------------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ------------------------------------------------------------- 2009 2008 2007 2006 2005 2004(A) ----------- -------- ---------- ---------- ---------- ---------- (unaudited) Net asset value, beginning of period ............. $ 13.13 $ 27.32 $ 24.68 $ 20.98 $ 18.47 $ 15.46 -------- -------- ---------- ---------- ---------- ---------- Income from investment operations: Net investment income(B, C) ................... 0.33 0.77 0.65 0.60 0.44 0.30 Net gains (losses) on securities (both realized and unrealized)(B) ......................... (0.59) (11.60) 4.31 4.86 2.31 3.12 -------- -------- ---------- ---------- ---------- ---------- Total income (loss) from investment operations ... (0.26) (10.83) 4.96 5.46 2.75 3.42 -------- -------- ---------- ---------- ---------- ---------- Less distributions: Dividends from net investment income .......... (0.61) (0.70) (0.50) (0.43) (0.24) (0.41) Distributions from net realized gains on securities ................................. (0.33) (2.66) (1.82) (1.33) -- -- -------- -------- ---------- ---------- ---------- ---------- Total distributions .............................. (0.94) (3.36) (2.32) (1.76) (0.24) (0.41) -------- -------- ---------- ---------- ---------- ---------- Redemption fees added to beneficial interest(D) .. 0.00 0.00 0.00 0.00 0.00 0.00 -------- -------- ---------- ---------- ---------- ---------- Net asset value, end of period ................... $ 11.93 $ 13.13 $ 27.32 $ 24.68 $ 20.98 $ 18.47 ======== ======== ========== ========== ========== ========== Total return ..................................... (1.98)%(E) (44.81)% 21.54% 27.49% 15.04% 22.49% ======== ======== ========== ========== ========== ========== Ratios and supplemental data: Net assets, end of period (in thousands) ...... $406,178 $567,414 $1,686,668 $1,549,521 $1,286,441 $1,029,272 Ratios to average net assets (annualized): Expenses, net of waivers(B) ................ 0.73% 0.66% 0.67% 0.71% 0.70% 0.76% Expenses, before waivers(B) ................ 0.73% 0.66% 0.67% 0.71% 0.70% 0.76% Net investment income, net of waivers(B) ... 3.05% 2.91% 2.46% 2.52% 2.17% 1.69% Net investment income (loss), before ....... 3.05% 2.91% 2.46% 2.52% 2.17% 1.69% Portfolio turnover rate(F) ....................... 22%(E) 31% 38% 40% 37% 36%
- ---------- (A) The Boston Company Asset Management, LLC was added as an investment advisor to the International Equity Fund on September 27, 2004. (B) 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. (C) 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. (D) Amounts represent less than $0.01 per share. (E) Not annualized. (F) 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. 36 AMERICAN BEACON INTERNATIONAL EQUITY FUND FINANCIAL HIGHLIGHTS (For a share outstanding throughout the period)
Investor Class -------------------------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ----------------------------------------------------- 2009 2008 2007 2006 2005 2004(A) ----------- -------- -------- -------- -------- -------- (unaudited) Net asset value, beginning of period ............. $ 12.95 $ 26.99 $ 24.42 $ 20.79 $ 18.31 $ 15.34 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income(B,C) .................... 0.21 0.66 0.58 0.50 0.41 0.26 Net gains (losses) on securities (both realized and unrealized)(B) ......................... (0.48) (11.41) 4.26 4.84 2.29 3.08 -------- -------- -------- -------- -------- -------- Total income (loss) from investment operations ... (0.27) (10.75) 4.84 5.34 2.70 3.34 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income .......... (0.56) (0.63) (0.45) (0.38) (0.22) (0.37) Distributions from net realized gains on securities ................................. (0.33) (2.66) (1.82) (1.33) -- -- -------- -------- -------- -------- -------- -------- Total distributions .............................. (0.89) (3.29) (2.27) (1.71) (0.22) (0.37) -------- -------- -------- -------- -------- -------- Redemption fees added to beneficial interest(D) .. 0.00 0.00 0.00 0.00 0.00 0.00 -------- -------- -------- -------- -------- -------- Net asset value, end of period ................... $ 11.79 $ 12.95 $ 26.99 $ 24.42 $ 20.79 $ 18.31 ======== ======== ======== ======== ======== ======== Total return ..................................... (2.15)%(E) (44.96)% 21.22% 27.20% 14.73% 22.16% ======== ======== ======== ======== ======== ======== Ratios and supplemental data: Net assets, end of period (in thousands) ...... $364,100 $426,473 $909,385 $771,298 $560,770 $310,540 Ratios to average net assets (annualized): Expenses, net of waivers(B) ................ 0.99% 0.92% 0.93% 0.96% 0.95% 1.02% Expenses, before waivers(B) ................ 0.99% 0.92% 0.93% 0.96% 0.95% 1.02% Net investment income, net of waivers(B) ... 2.87% 2.82% 2.26% 2.25% 1.96% 1.46% Net investment income (loss), before waivers(B) .............................. 2.87% 2.82% 2.26% 2.25% 1.96% 1.46% Portfolio turnover rate(F) .................... 22%(E) 31% 38% 40% 37% 36%
- ---------- (A) The Boston Company Asset Management, LLC was added as an investment advisor to the International Equity Fund on September 27, 2004. (B) 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. (C) 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. (D) Amounts represent less than $0.01 per share. (E) Not annualized. (F) 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. 37 AMERICAN BEACON INTERNATIONAL EQUITY FUND FINANCIAL HIGHLIGHTS (For a share outstanding throughout the period)
Advisor Class ------------------------------------------------------------ Six Months Ended Year Ended October 31, April 30, ---------------------------------------------- 2009 2008 2007 2006 2005 2004(A) ----------- ------- ------ ------ ------- ------ (unaudited) Net asset value, beginning of period ............. $12.86 $ 26.83 $24.24 $20.61 $ 18.24 $15.31 ------ ------- ------ ------ ------- ------ Income from investment operations: Net investment income(B,C) .................... 0.13 0.62 0.56 0.46 0.37 0.30 Net gains (losses) on securities (both realized and unrealized)(B) ......................... (0.43) (11.35) 4.20 4.76 2.26 2.99 ------ ------- ------ ------ ------- ------ Total income (loss) from investment operations ... (0.30) (10.73) 4.76 5.22 2.63 3.29 ------ ------- ------ ------ ------- ------ Less distributions: Dividends from net investment income .......... (0.50) (0.58) (0.35) (0.26) (0.26) (0.36) Distributions from net realized gains on securities ................................. (0.33) (2.66) (1.82) (1.33) -- -- ------ ------- ------ ------ ------- ------ Total distributions .............................. (0.83) (3.24) (2.17) (1.59) (0.26) (0.36) ------ ------- ------ ------ ------- ------ Redemption fees added to beneficial interest(D) .. 0.00 0.00 0.00 0.00 0.00 0.00 ------ ------- ------ ------ ------- ------ Net asset value, end of period ................... $11.73 $ 12.86 $26.83 $24.24 $ 20.61 $18.24 ====== ======= ====== ====== ======= ====== Total return ..................................... (2.32)%(E) (45.10)% 20.85% 26.89% 14.45% 21.88% ====== ======= ====== ====== ======= ====== Ratios and supplemental data: Net assets, end of period (in thousands) ...... $1,604 $ 1,546 $4,932 $4,740 $ 2,987 $ 739 Ratios to average net assets (annualized): Expenses, net of waivers(B) ................ 1.34% 1.19% 1.12% 1.16% 1.21% 1.27% Expenses, before waivers(B) ................ 1.34% 1.19% 1.15% 1.19% 1.21% 6.26% Net investment income, net of waivers(B) ... 2.62% 2.36% 2.04% 2.09% 1.70% 0.81% Net investment income (loss), before waivers(B) .............................. 2.62% 2.36% 2.01% 2.05% 1.70% (4.18)% Portfolio turnover rate(F) .................... 22%(E) 31% 38% 40% 37% 36%
- ---------- (A) The Boston Company Asset Management, LLC was added as an investment advisor to the International Equity Fund on September 27, 2004. (B) 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. (C) 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. (D) Amounts represent less than $0.01 per share. (E) Not annualized. (F) 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. 38 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, ----------------------------------------------------- 2009 2008 2007 2006 2005 2004(A) ----------- -------- -------- -------- -------- -------- (unaudited) Net asset value, beginning of period ............. $ 13.25 $ 27.54 $ 24.86 $ 21.12 $ 18.58 $ 15.54 -------- -------- -------- -------- -------- -------- Income from investment operations: Net investment income(B, C) ................... 0.17 0.72 0.73 0.63 0.50 0.34 Net gains (losses) on securities (both realized and unrealized)(B) ......................... (0.43) (11.58) 4.33 4.92 2.33 3.14 -------- -------- -------- -------- -------- -------- Total income (loss) from investment operations ... (0.26) (10.86) 5.06 5.55 2.83 3.48 -------- -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income .......... (0.67) (0.77) (0.56) (0.48) (0.29) (0.44) Distributions from net realized gains on securities ................................. (0.33) (2.66) (1.82) (1.33) -- -- -------- -------- -------- -------- -------- -------- Total distributions .............................. (1.00) (3.43) (2.38) (1.81) (0.29) (0.44) -------- -------- -------- -------- -------- -------- Redemption fees added to beneficial interest(D) .. 0.00 0.00 0.00 0.00 0.00 0.00 -------- -------- -------- -------- -------- -------- Net asset value, end of period ................... $ 11.99 $ 13.25 $ 27.54 $ 24.86 $ 21.12 $ 18.58 ======== ======== ======== ======== ======== ======== Total return ..................................... (1.91)%(E) (44.65)% 21.86% 27.88% 15.32% 22.84% ======== ======== ======== ======== ======== ======== Ratios and supplemental data: Net assets, end of period (in thousands) ...... $333,221 $328,083 $672,680 $563,231 $448,096 $460,114 Ratios to average net assets (annualized): Expenses, net of waivers(B) ................ 0.48% 0.41% 0.42% 0.45% 0.44% 0.49% Expenses, before waivers(B) ................ 0.48% 0.41% 0.42% 0.45% 0.44% 0.49% Net investment income, net of waivers(B) ... 3.43% 3.24% 2.77% 2.76% 2.49% 1.97% Net investment income (loss), before waivers(B) .............................. 3.43% 3.24% 2.77% 2.76% 2.49% 1.97% Portfolio turnover rate(F) .................... 22%(E) 31% 38% 40% 37% 36%
- ---------- (A) The Boston Company Asset Management, LLC was added as an investment advisor to the International Equity Fund on September 27, 2004. (B) 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. (C) 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. (D) Amounts represent less than $0.01 per share. (E) Not annualized. (F) 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. 39 This page intentionally left blank This page intentionally left blank (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) BY E-MAIL: american_beacon.funds@ambeacon.com (GRAPHIC) BY TELEPHONE: Institutional Class Call (800) 658-5811 AMR Class(SM) Call (800) 345-2345 Investor Class(R) and Advisor Class Call (800) 388-3344 (GRAPHIC) ON THE INTERNET: Visit our website at www.americanbeaconfunds.com (GRAPHIC) BY MAIL: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULES In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission ("SEC") on Form N-Q as of the first and third fiscal quarters. The Fund's Forms N-Q are available on the SEC's website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC's Public Reference Room, 450 Fifth Street, NW, Washington, DC 20549. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete 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. AVAILABILITY OF PROXY VOTING POLICY AND RECORDS A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund's Statement of Additional Information, is available free of charge on the Fund's website (www.americanbeaconfunds.com) and by calling 1-800-967-9009 or by accessing the SEC's website at www.sec.gov. The Fund's proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund's Forms N-PX are available on the SEC's website at www.sec.gov. The Fund's proxy voting record may also be obtained by calling 1-800-967-9009. FUND SERVICE PROVIDERS: CUSTODIAN 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 Beacon Funds, American Beacon Emerging Markets Fund and American Beacon International Equity Fund are a service marks of American Beacon Advisors, Inc. SAR 04//09 00068038 GUIDANCE | VISION | EXPERIENCE (AMERICAN BEACON FUNDS(SM) LOGO) Semi-Annual Report APRIL 30, 2009 BALANCED FUND LARGE CAP GROWTH FUND MID-CAP VALUE FUND SMALL CAP VALUE OPPORTUNITY FUND (GRAPHIC) About American Beacon Advisors Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management. Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company. Contents Message from American Beacon....................................... 1 Market and Performance Overviews................................... 2-10 American Beacon Schedules of Investments Balanced Fund................................................... 11 Large Cap Growth Fund........................................... 20 Mid-Cap Value Fund.............................................. 23 Small Cap Value Opportunity Fund................................ 26 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 GENE L. NEEDLES, JR.) FELLOW SHAREHOLDERS, Please allow me to introduce myself. I am Gene Needles, Jr., the new Executive Vice President for the American Beacon Funds. I have over 27 years of financial services experience with some of the country's largest fund complexes, and I will be primarily responsible for daily operations as well as distribution of the American Beacon Funds. I am very excited to be a part of American Beacon and look forward to building a lasting relationship with all of our shareholders. Enclosed is the American Beacon Funds Semi-Annual Report for the six months ended April 30, 2009 for our Balanced, Large Cap Growth, Mid-Cap Value and Small Cap Value Opportunity Funds. During the six-month period covered by this report, the capital markets experienced widespread volatility brought on by concern over the world-wide credit crisis. The American Beacon Mid-Cap Value Fund - Institutional Class reported a six-month return of 3.40% for the period ended April 30, 2009 while the S&P 500 and Dow Jones Industrial Average Indices reported returns of -8.53% and -10.79%, respectively, for this period. In the past, long-term investors have been rewarded for their patience. We continue to believe the Funds' fundamental investment strategies will continue to serve the Funds well over time. 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 Funds. Sincerely, /s/ Gene L. Needles, Jr. Gene L. Needles, Jr. Executive Vice President American Beacon Funds 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, 2009 1 DOMESTIC EQUITY MARKET OVERVIEW APRIL 30, 2009 (UNAUDITED) A tale of two markets might be the most accurate description of the six-month period ended April 30, 2009. The equity markets were down for the 6 months, as represented by a decline of 8.5% for the S&P 500, but for the first four months, the S&P 500 fell a breath-taking 23.2%. Through February, bleak economic performance around the world set the background for equity market declines. In addition to the well publicized economic distress in the U.S., the period featured news of staggering declines in Japanese manufacturing and sharp declines in Asian and Eastern European exports. The U.K. and Western Europe continued to be weak, with the Bank of England purchasing U.K. government debt in an aggressive move to quantitative easing as its benchmark interest rate came close to zero. Latin America slowed down, with Mexico in a deep recession. China was the global exception with domestic demand appearing to hold up and loan creation remaining solid. Starting in March, equities staged a dramatic recovery in the face of continued poor economic data, providing support for the view that valuations ultimately drive stock prices. The U.S. government's announcement of details on initiatives to stabilize the banking and housing market appeared to spark the rally. Although some economic data points began to show a hint of economic stability (or at least a deceleration in the rate of decline) toward the end of April, it is still too early to call an improvement in the economy. However it is apparent that because the market was trading at such deeply depressed, pessimistic levels, the mere hint of a recovery was enough to cause a significant rally. Thus for March and April, the S&P 500 was up 19.2%, unwinding a large part of the earlier months' declines. 2 PERFORMANCE OVERVIEW AMERICAN BEACON BALANCED FUND(SM) APRIL 30, 2009 (UNAUDITED) The Balanced Fund's Institutional Class returned -1.21% for the six months ended April 30, 2009, outperforming the 60% Russell 1000(R) Value Index/40% Barclays Capital Aggregate Index benchmark return of -4.74% and the Lipper Mixed Asset Target Allocation Growth Funds Index return of -1.90% for the same period.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 --------------------------------------- 6 MONTHS* 1 YEAR 5 YEARS 10 YEARS --------- ------ ------- -------- Institutional Class(1,5) ............... -1.21% -24.56% 0.42% 2.44% Investor Class(1,5) .................... -1.32% -24.72% 0.15% 2.17% Advisor Class(1,2,5) ................... -1.43% -24.86% -0.09% 2.05% AMR Class(1,5) ......................... -1.04% -24.35% 0.68% 2.71% Balanced Composite Index (3) ........... -4.74% -23.78% 0.68% 2.28% Russell 1000 Value Index(4) ............ -13.27% -39.21% -2.50% -0.50% Barclays Capital Aggregate Index(4) .... 7.75% 3.84% 4.78% 5.71% Lipper Mixed-Asset Target Allocations Growth Funds Index(4) ................ -1.90% -26.77% -0.11% 1.29%
* Not annualized (1.) The Investor and Advisor Classes were formerly known as the PlanAhead and Service Classes, respectively. 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 Investor Class from 4/30/99 up to 5/31/05, the inception date of the Advisor Class, and the returns of the Advisor Class since its inception. Expenses of the Advisor Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the Advisor Class been in existence since 4/30/99. A portion of the fees charged to the Advisor 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 Barclays Capital 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 and Russell 1000 Index are registered trademarks of Frank Russell Company. The Barclays Capital 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, Investor, Advisor and AMR Class shares was 0.57%, 0.91%, 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 55% in equities (including equitized cash) and 45% in fixed-income securities, ending the period with approximately 58% invested in equities and 42% in fixed-income securities. The equity portion of the Fund (excluding equitized cash) returned -10.6% for the period, exceeding the Russell 1000 Value Index ("Russell Value Index") return of -13.3%. The Fund's good performance versus the Russell Value Index was primarily due to sector allocation, as stock selection added only modest value to performance. During the six-month period, a four times overweighting in Information Technology, the best performing sector in the Russell Value Index, and an underweight in Financials, the worst performing sector in the Russell Value Index, added value to the Fund's relative returns through sector allocation. Excess performance from the Fund's allocation to the aforementioned sectors was somewhat offset by underperformance generated by an underweight in the Consumer Discretionary sector and an overweight in the Industrials sector. The Fund's holdings in the Industrials and Health Care sectors added the most value relative to the Russell Value Index. In the Industrials sector, Honeywell International (up 4.6%), Illinois Tool Works (up 0.1%), and Paccar (up 23.2%) contributed most to performance. Wyeth (up 33.9%), Schering Plough (up 60.6%), and Cigna (up 21.3%) were the largest contributors in the Health Care sector. Good stock selection in the aforementioned sectors was mostly offset by holdings in the Information Technology and Financials sectors. Microsoft (down 8.0%), Hewlett Packard (down 5.5%), and CA (down 2.7%) were the largest detractors in the Information Technology sector. In the Financials sector, Bank of America (down 62.2%), Citigroup (down 77.6%), and Capital One Financial (down 55.6%) hurt performance most. 3 PERFORMANCE OVERVIEW AMERICAN BEACON BALANCED FUND(SM) APRIL 30, 2009 (UNAUDITED) The fixed-income portion of the Fund returned 11.2% for the six-month period, outperforming the Barclays Capital Aggregate Index return of 7.7%. The Fund's fixed-income excess performance was due mostly to good security selection in the Agency and Corporate 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 -------- JPMorgan Chase & Co..................... 1.7% AT&T, Inc............................... 1.6% Philip Morris International, Inc........ 1.4% Wyeth Corp.............................. 1.4% ConocoPhillips.......................... 1.3% Microsoft Corp.......................... 1.3% International Business Machines Corp.... 1.3% Bristol-Myers Squibb Co................. 1.1% Verizon Communications, Inc............. 1.1% Honeywell International, Inc............ 1.1%
EQUITY SECTOR ALLOCATION
% OF EQUITIES -------- Financials.............................. 17.4% Industrials............................. 15.7% Health Care............................. 13.0% Information Technology.................. 12.7% Consumer Staples........................ 9.5% Consumer Discretionary.................. 8.5% Energy.................................. 8.5% Utilities............................... 5.6% Telecommunication Services.............. 5.2% Materials............................... 3.9%
FIXED-INCOME SECTOR ALLOCATION
% OF FIXED INCOME ------------ Corporate............................... 42.8% Mortgage-Backed......................... 28.8% Agency.................................. 18.2% U.S. Treasury........................... 8.8% Asset-Backed............................ 1.4%
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, 2009 (UNAUDITED) The Institutional Class of the Large Cap Growth Fund returned -3.03% for the six months ended April 30, 2009, compared to the Russell 1000(R) Growth Index ("Index") return of -1.52% and the Lipper Large-Cap Growth Funds Index return of -1.65%.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 ------------------------------------------- SINCE INCEP. 6 MONTHS* 1 YEAR 5 YEARS (7/31/00) --------- ------ ------- ------------ Institutional Class(1,3) ............... -3.03% -34.28% -4.61% -8.46% AMR Class(1,3) ......................... -3.06% -34.11% -4.33% -8.27% Russell 1000 Growth Index(2) .......... -1.52% -31.57% -2.39% -7.40% Lipper Large-Cap Growth Funds Index(2).. -1.65% -33.80% -2.58% -7.76%
* 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 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 1.01% and 0.65%, 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, and to a lesser extent, through sector allocation. From a stock selection standpoint, the Fund was hurt most by poor stock selection in the Industrials, Financials, Health Care, and Information Technology sectors. Companies with the greatest negative impact in the Industrials sector included Norfolk Southern (down 39.0%) and Boeing (down 38.8% for the period the Fund owned the security). In the Financials sector, AFLAC and Simon Property Group were the largest detractors (down 57.6% and 46.3%, respectively, for the period the Fund owned the securities). Positions in Varian Medical System (down 26.7%), Baxter (down 19.0%), and Abbott Labs (down 22.9%) hurt the Fund's Health Care sector returns, while Accenture (down 11.0%) and Microsoft (down 8.0%) detracted the most value relative to the Index in the Information Technology sector. The Fund's overweighting in the Health Care sector produced negative relative returns from a sector allocation perspective. Underweighting the Information Technology sector, the best-performing sector in the Index, also contributed to the Fund's underperformance. 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 ---------- Union Pacific Corp...................... 2.4% Monsanto................................ 2.3% Apple Computer, Inc..................... 2.3% Medco Health Solutions, Inc............. 2.1% Gilead Sciences, Inc.................... 2.1% Microsoft Corp.......................... 2.0% Hewlett-Packard Co...................... 1.9% QUALCOMM, Inc........................... 1.9% United Technologies Corp................ 1.9% Oracle Corp............................. 1.8%
SECTOR ALLOCATION
% OF EQUITIES -------- Information Technology.................. 25.9% Industrials............................. 20.0% Health Care............................. 18.5% Consumer Discretionary.................. 11.6% Financials.............................. 6.8% Consumer Staples........................ 5.9% Energy.................................. 5.5% Telecommunication Services.............. 1.5% Utilities............................... 0.5%
5 PERFORMANCE OVERVIEW AMERICAN BEACON MID-CAP VALUE FUND(SM) APRIL 30, 2009 (UNAUDITED) The Institutional Class of the Mid-Cap Value Fund returned 3.40% for the six months ended April 30, 2009. The Fund outperformed the Russell Midcap(R) Value Index ("Index") return of -6.14% and the Lipper Mid-Cap Value Funds Index return of -1.17%.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 ------------------------------------------- SINCE INCEP. 6 MONTHS* 1 YEAR 3 YEARS (6/30/04) --------- ------ ------- ------------ Institutional Class(1,3,6) ............. 3.40% -31.56% -11.84% -2.23% Investor Class (1,2,6) ................. 3.22% -31.76% -12.09% -2.41% Advisor Class (1,4,6) .................. 3.61% -31.55% -12.06% -2.38% AMR Class (1,6) ........................ 3.38% -31.50% -11.70% -2.11% Russell Midcap(R) Value Index(5) ....... -6.14% -36.76% -12.56% -1.18% Lipper Mid-Cap Value Funds Index(5) .... -1.17% -34.47% -11.24% -1.93%
* Not annualized (1.) The Investor and Advisor Classes were formerly known as the PlanAhead and Service Classes, respectively. 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 since inception period represents the total returns achieved by the AMR Class from 6/30/04 up to 3/1/06, the inception date of the Investor Class, and the returns of the Investor Class since its inception. Expenses of the Investor Class are higher than those of the AMR Class. As a result, total returns shown may be higher than they would have been had the Investor Class been in existence since 6/30/04. A portion of the fees charged to the Investor 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 for the since inception period 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 Advisor 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 Investor 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 Advisor Class and the historical fees and expenses of the AMR, Institutional and Investor Classes. Because the AMR, Institutional and Investor Classes had lower expenses, their performance was better than the Advisor Class would have realized during the same period. A portion of the fees charged to the Advisor 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 Index. Russell Midcap Value Index, Russell Midcap 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, Investor, Advisor, and AMR Class shares was 1.17%, 1.33%, 2.05%, and 0.83%, 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 as both sector allocation and stock selection added value relative to the Index. Significant overweightings in Consumer Discretionary, Information Technology, and Health Care, three of the top performing sectors in the Index, were a major source of excess performance. An underweight in Financials, the worst performing sector in the Index, also added to the Fund's performance. From a stock selection standpoint, investments in the Financials and Utilities sectors contributed most to the Fund's excess performance. In the Financials sector, Moody's (up 16.4%) and Annaly Capital Management (up 8.1%) added the most value relative to the Index. Xcel Energy (up 8.7%) and Sempra Energy (up 10.0%) were the largest contributors in the Utilities sector. The Fund's holdings in the Health Care sector detracted value. Health Care companies with the greatest negative impact included Hill-Rom Holdings (down 37.8% for the period the Fund owned the security), IMS Health (down 12.0%), and Omnicare (down 6.6%). 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. 6 PERFORMANCE OVERVIEW AMERICAN BEACON MID-CAP VALUE FUND(SM) APRIL 30, 2009 (UNAUDITED) TOP TEN HOLDINGS
% OF NET ASSETS ---------- L-3 Communications Holdings, Inc........ 3.0% J.C. Penney Company, Inc................ 1.9% Avnet, Inc.............................. 1.8% Motorola, Inc........................... 1.8% Tyco Electronics Ltd.................... 1.8% GameStop Corp........................... 1.7% Omnicare, Inc........................... 1.7% Alcatel-Lucent.......................... 1.7% Stanley Works........................... 1.7% Annaly Capital Management, Inc.......... 1.7%
SECTOR ALLOCATION
% OF EQUITIES -------- Consumer Discretionary ................. 24.2% Financials.............................. 19.7% Information Technology ................. 14.9% Health Care ............................ 12.4% Industrials ............................ 12.4% Utilities .............................. 7.5% Consumer Staples ....................... 4.8% Energy ................................. 4.1%
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, 2009 (UNAUDITED) The Small Cap Value Opportunity Fund closed on May 29, 2009.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 --------------------------------- SINCE INCEP. 6 MONTHS* 1 YEAR (3/31/06) --------- ------ ------------ Institutional Class(1,3)................ -15.99% -36.01% -16.63% Investor Class(1,3)..................... -16.07% -36.07% -16.74% Russell 2000 Value Index (2)............ -12.61% -31.37% -13.06% Lipper Small-Cap Value Funds Index (2).. -5.16% -29.97% -11.83%
* Not annualized (1.) The Investor Class was formerly known as the PlanAhead Class. 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 Investor 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 and Russell 2000 Index are registered trademarks 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 Investor Class shares was 1.57% and 1.83%, 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. 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. 8 FUND EXPENSES - ACTUAL APRIL 30, 2009 (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, 2008 through April 30, 2009. 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 Investor 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 LARGE CAP VALUE BALANCED GROWTH MID-CAP OPPORTUNITY INSTITUTIONAL CLASS FUND FUND VALUE FUND FUND - ------------------- --------- --------- ---------- ----------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $ 987.94 $ 969.68 $1,034.03 $ 840.11 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 2.81 $ 4.30 $ 4.94 $ 8.67 Annualized Expense Ratio ........................ 0.57% 0.88% 0.98% 1.90%
SMALL CAP VALUE BALANCED MID-CAP OPPORTUNITY INVESTOR CLASS FUND VALUE FUND FUND - -------------- --------- ---------- ----------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $ 986.79 $1,032.23 $ 839.25 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 4.14 $ 6.20 $ 5.97 Annualized Expense Ratio ........................ 0.84% 1.23% 1.31%
BALANCED MID-CAP ADVISOR CLASS FUND VALUE FUND - ------------- --------- ---------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $ 985.68 $1,036.06 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 5.27 $ 2.68 Annualized Expense Ratio ........................ 1.07% 0.53%
BALANCED LARGE CAP MID-CAP AMR CLASS FUND GROWTH FUND VALUE FUND - --------- --------- ----------- ---------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/2009 .................. $ 989.61 $ 969.43 $1,033.78 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 1.58 $ 2.78 $ 4.34 Annualized Expense Ratio ........................ 0.32% 0.57% 0.86%
- ---------- * 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 ( 181 ) by days in the year ( 365 ) to reflect the half-year period. 9 FUND EXPENSES - HYPOTHETICAL APRIL 30, 2009 (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 Investor 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 LARGE CAP VALUE BALANCED GROWTH MID-CAP OPPORTUNITY INSTITUTIONAL CLASS FUND FUND VALUE FUND FUND - ------------------- --------- --------- ---------- ----------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $1,021.97 $1,020.43 $1,019.93 $1,015.37 Expenses Paid During Period 11/1/08-04/30/09 * .. $ 2.86 $ 4.41 $ 4.91 $ 9.49 Annualized Expense Ratio ........................ 0.57% 0.88% 0.98% 1.90%
SMALL CAP VALUE BALANCED MID-CAP OPPORTUNITY INVESTOR CLASS FUND VALUE FUND FUND - -------------- --------- ---------- ----------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $1,020.63 $1,018.70 $1,018.30 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 4.21 $ 6.16 $ 6.56 Annualized Expense Ratio ........................ 0.84% 1.23% 1.31%
BALANCED MID-CAP ADVISOR CLASS FUND VALUE FUND - ------------- --------- ---------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $1,019.49 $1,022.17 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 5.36 $ 2.66 Annualized Expense Ratio ........................ 1.07% 0.53%
BALANCED LARGE CAP MID-CAP AMR CLASS FUND GROWTH FUND VALUE FUND - --------- --------- ----------- ---------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $1,023.21 $1,021.97 $1,020.53 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 1.61 $ 2.86 $ 4.31 Annualized Expense Ratio ........................ 0.32% 0.57% 0.86%
* Expenses are equal to the Fund's annualized expense ratios 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 ( 181 ) by days in the year ( 365 ) to reflect the half year period. 10 AMERICAN BEACON BALANCED FUND SCHEDULE OF INVESTMENTS APRIL 30, 2009 (UNAUDITED)
SHARES VALUE ---------- ------------ (DOLLARS IN THOUSANDS) COMMON STOCKS - 53.73% CONSUMER DISCRETIONARY - 4.61% HOTELS, RESTAURANTS & LEISURE - 0.83% Carnival Corp. ............................... 155,300 $ 4,174 Wyndham Worldwide Corp. ...................... 143,200 1,673 ------------ 5,847 ------------ HOUSEHOLD DURABLES - 0.33% Fortune Brands, Inc. ......................... 60,000 2,359 ------------ INTERNET & CATALOG RETAIL - 0.30% eBay, Inc. ## ................................ 128,000 2,108 ------------ MEDIA - 0.83% CBS Corp. .................................... 236,700 1,666 Interpublic Group of Cos., Inc. ## ........... 240,900 1,508 Walt Disney Co. Ltd. ......................... 121,000 2,650 ------------ 5,824 ------------ MULTILINE RETAIL - 1.00% J.C. Penney Company, Inc. .................... 109,400 3,358 Target Corp. ................................. 67,700 2,793 Wal-Mart Stores, Inc. ........................ 18,200 917 ------------ 7,068 ------------ SPECIALTY RETAIL - 1.32% Gap, Inc. .................................... 118,600 1,843 The Home Depot, Inc. ......................... 256,050 6,739 Limited Brands, Inc. ......................... 62,900 719 ------------ 9,301 ------------ TOTAL CONSUMER DISCRETIONARY .................... 32,507 ------------ CONSUMER STAPLES - 5.11% BEVERAGES - 1.16% Coca-Cola Co. ................................ 67,100 2,889 Diageo plc, ADR .............................. 68,200 3,263 PepsiCo, Inc. ................................ 41,200 2,050 ------------ 8,202 ------------ FOOD & DRUG RETAILING - 0.41% Safeway, Inc. ................................ 147,000 2,903 ------------ FOOD PRODUCTS - 0.71% H.J. Heinz Co. ............................... 46,500 1,601 Kraft Foods, Inc. ............................ 70,045 1,639 Unilever plc, ADR ............................ 89,000 1,732 ------------ 4,972 ------------
SHARES VALUE ---------- ------------ (DOLLARS IN THOUSANDS) HOUSEHOLD PRODUCTS - 0.19% The Procter & Gamble Co. ..................... 27,700 $ 1,370 ------------ TOBACCO - 2.64% Altria Group, Inc. ........................... 103,000 1,682 Imperial Tobacco Group plc, ADR .............. 121,900 5,540 Lorillard, Inc. .............................. 21,000 1,326 Philip Morris International, Inc. ............ 277,000 10,027 ------------ 18,575 ------------ TOTAL CONSUMER STAPLES .......................... 36,022 ------------ ENERGY - 4.58% OIL & GAS - 4.58% Chevron Corp. ................................ 101,428 6,704 ConocoPhillips ............................... 230,376 9,445 Devon Energy Corp. ........................... 87,900 4,558 Duke Energy Corp. ............................ 178,000 2,458 Occidental Petroleum Corp. ................... 69,600 3,918 Royal Dutch Shell plc, ADR ................... 115,100 5,237 ------------ TOTAL ENERGY .................................... 32,320 ------------ FINANCIALS - 9.23% BANKS - 5.45% Bank of America Corp. ........................ 725,480 6,478 Bank of New York Mellon Corp. ................ 40,100 1,022 Citigroup, Inc. .............................. 241,042 735 Comerica, Inc. ............................... 39,700 833 JP Morgan Chase & Co. ........................ 361,234 11,921 KeyCorp ...................................... 223,257 1,373 PNC Financial Services Group, Inc. ........... 148,858 5,910 SunTrust Banks, Inc. ......................... 30,000 433 U.S. Bancorp ................................. 118,560 2,160 Washington Mutual, Inc. ...................... 468,800 -- Wells Fargo & Co. ............................ 376,098 7,526 ------------ 38,391 ------------ DIVERSIFIED FINANCIALS - 1.01% American Express Co. ......................... 204,800 5,165 Capital One Financial Corp. .................. 69,700 1,167 SLM Corp. ## + ............................... 165,200 798 ------------ 7,130 ------------ INSURANCE - 2.77% ACE Ltd. ..................................... 77,500 3,590 Allstate Corp. ............................... 49,600 1,157 American International Group, Inc. + ......... 88,000 121 Conseco, Inc. ## ............................. 95,500 153 Genworth Financial, Inc. ..................... 149,900 354
See accompanying notes 11 AMERICAN BEACON BALANCED FUND SCHEDULE OF INVESTMENTS APRIL 30, 2009 (UNAUDITED)
SHARES VALUE ---------- ------------ (DOLLARS IN THOUSANDS) Hartford Financial Services Group, Inc. ...... 33,000 $ 378 MetLife, Inc. ................................ 186,788 5,557 Prudential Financial, Inc. ................... 31,300 904 Travelers Cos., Inc. ......................... 120,800 4,970 XL Capital Ltd. .............................. 244,500 2,325 ------------ 19,509 ------------ TOTAL FINANCIALS ................................ 65,030 ------------ HEALTH CARE - 6.99% HEALTH CARE EQUIPMENT & SUPPLIES - 0.33% Baxter International, Inc. ................... 24,000 1,164 Zimmer Holdings, Inc. ## ..................... 26,700 1,175 ------------ 2,339 ------------ HEALTH CARE PROVIDERS & SERVICES - 1.24% Cardinal Health, Inc. ........................ 69,100 2,335 CIGNA Corp. .................................. 153,900 3,033 UnitedHealth Group, Inc. ..................... 72,300 1,700 WellPoint, Inc. ## ........................... 39,000 1,668 ------------ 8,736 ------------ PHARMACEUTICALS - 5.42% Amgen, Inc. ## ............................... 22,300 1,081 Bristol-Myers Squibb Co. ..................... 421,000 8,083 Eli Lilly & Co. .............................. 90,000 2,963 Johnson & Johnson ............................ 63,300 3,314 Merck & Co., Inc. ............................ 120,000 2,909 Pfizer, Inc. ................................. 444,700 5,941 Schering-Plough Corp. ........................ 185,600 4,273 Wyeth Corp. .................................. 226,700 9,612 ------------ 38,176 ------------ TOTAL HEALTH CARE ............................... 49,251 ------------ INDUSTRIALS - 8.47% AEROSPACE & DEFENSE - 2.02% Boeing Co. ................................... 96,100 3,849 Northrop Grumman Corp. ....................... 71,200 3,443 Raytheon Co. ................................. 128,200 5,798 United Technologies Corp. .................... 23,600 1,153 ------------ 14,243 ------------ AIR FREIGHT & COURIERS - 0.71% FedEx Corp. .................................. 90,000 5,036 ------------ INDUSTRIAL CONGLOMERATES - 3.10% 3M Co. ....................................... 69,900 4,026 General Electric Co. ......................... 447,300 5,659 Honeywell International, Inc. ................ 250,500 7,818 Textron, Inc. ................................ 100,000 1,073
SHARES VALUE ---------- ------------ (DOLLARS IN THOUSANDS) Tyco International Ltd. ...................... 139,025 $ 3,303 ------------ 21,879 ------------ MACHINERY - 2.16% Caterpillar, Inc. + .......................... 40,000 1,423 Cummins, Inc. ................................ 46,400 1,577 Eaton Corp. .................................. 40,300 1,765 Illinois Tool Works, Inc. .................... 143,900 4,720 ITT Industries, Inc. ......................... 77,000 3,158 PACCAR, Inc. + ............................... 72,200 2,559 ------------ 15,202 ------------ TRANSPORTATION INFRASTRUCTURE - 0.48% Burlington Northern Santa Fe Corp. ........... 49,600 3,347 ------------ TOTAL INDUSTRIALS ............................... 59,707 ------------ INFORMATION TECHNOLOGY - 6.82% COMMUNICATIONS EQUIPMENT - 0.71% Alcatel-Lucent, ADR ## ....................... 504,000 1,260 Nokia Corp., ADR ............................. 264,000 3,733 ------------ 4,993 ------------ COMPUTERS & PERIPHERALS - 2.20% Hewlett-Packard Co. .......................... 185,400 6,670 International Business Machines Corp. ........ 85,600 8,835 ------------ 15,505 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.31% Intel Corp. .................................. 364,600 5,753 Tyco Electronics Ltd. ........................ 200,025 3,489 ------------ 9,242 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS - 0.19% Texas Instruments, Inc. ...................... 75,800 1,369 ------------ SOFTWARE - 2.41% CA, Inc. ..................................... 263,674 4,548 Microsoft Corp. .............................. 463,900 9,399 Oracle Corp. ................................. 155,300 3,004 ------------ 16,951 ------------ TOTAL INFORMATION TECHNOLOGY .................... 48,060 ------------ MATERIALS - 2.11% CHEMICALS - 1.85% Air Products & Chemicals, Inc. ............... 24,000 1,581 Dow Chemical Co. ............................. 74,600 1,194 E. I. du Pont de Nemours & Co. ............... 173,900 4,852 Eastman Chemical Co. ......................... 50,100 1,988 PPG Industries, Inc. ......................... 78,500 3,458 ------------ 13,073 ------------
See accompanying notes 12 AMERICAN BEACON BALANCED FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ---------- ------------ (DOLLARS IN THOUSANDS) METALS & MINING - 0.26% Alcoa, Inc. .................................. 199,500 $ 1,809 ------------ TOTAL MATERIALS ................................. 14,882 ------------ TELECOMMUNICATION SERVICES - 2.78% DIVERSIFIED TELECOMMUNICATION - 2.78% AT&T, Inc. ................................... 453,677 11,623 Fairpoint Communications, Inc. ............... 3,428 4 Verizon Communications, Inc. ................. 263,728 8,001 ------------ TOTAL TELECOMMUNICATION SERVICES ................ 19,628 ------------ UTILITIES - 3.03% ELECTRIC UTILITIES - 2.54% CenterPoint Energy, Inc. ..................... 162,000 1,724 Constellation Energy Group, Inc. ............. 48,100 1,158 Dominion Resources, Inc. ..................... 105,300 3,176 Edison International ......................... 38,500 1,098 Entergy Corp. ................................ 42,400 2,746 Exelon Corp. ................................. 78,200 3,607 FPL Group, Inc. .............................. 46,600 2,506 Public Service Enterprise Group, Inc. ........ 64,000 1,910 ------------ 17,925 ------------ GAS UTILITIES - 0.49% Spectra Energy Corp. ......................... 236,100 3,424 ------------ TOTAL UTILITIES ................................. 21,349 ------------ TOTAL COMMON STOCKS ............................. 378,756 ------------ PREFERRED STOCKS - 0.16% FINANCIALS - 0.16% BANKS - 0.16% Citigroup, Inc. .............................. 62,500 1,111 ------------
PAR AMOUNT ---------- CORPORATE OBLIGATIONS - 17.55% AEROSPACE & DEFENSE - 0.08% Raytheon Co., 5.375%, Due 4/1/2013 ...................... $ 550 571 ------------ BANKS - 1.55% Bank of America Corp., 7.80%, Due 9/15/2016 ...................... 900 620 6.00%, Due 9/1/2017 ....................... 400 335 5.75%, Due 12/1/2017 ...................... 875 715 Bank of New York Mellon Corp., 4.95%, Due 11/1/2012 ...................... 355 368
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) 5.125%, Due 8/27/2013 ..................... $ 400 $ 415 Bank One Corp., 5.90%, Due 11/15/2011 ..................... 820 832 4.90%, Due 4/30/2015 ...................... 550 494 BP Capital Markets plc, 3.125%, Due 3/10/2012 ..................... 415 421 Citigroup, Inc., 5.125%, Due 2/14/2011 ..................... 2,175 2,038 6.125%, Due 11/21/2017 .................... 960 791 Fifth Third Bancorp, 8.25%, Due 3/1/2038 ....................... 1,500 877 ING Bank, NV, 5.125%, Due 5/1/2015 ++ ................... 450 396 JP Morgan Chase & Co., 6.00%, Due 1/15/2018 ...................... 500 486 Wachovia Corp., 5.70%, Due 8/1/2013 ....................... 180 176 Washington Mutual Finance Corp., 6.875%, Due 5/15/2011 ..................... 660 602 Wells Fargo & Co., 5.25%, Due 10/23/2012 ..................... 840 843 5.625%, Due 12/11/2017 .................... 525 489 ------------ 10,898 ------------ BASIC MATERIALS - 0.16% ArcelorMittal, 6.125%, Due 6/1/2018 ...................... 365 294 EI Du Pont de Nemours & Co., 5.875%, Due 1/15/2014 ..................... 560 597 Lubrizol Corp., 8.875%, Due 2/1/2019 ...................... 185 201 ------------ 1,092 ------------ COMMUNICATIONS - 1.80% Alltel Corp., 7.00%, Due 7/1/2012 ....................... 300 317 British Telecommunications plc, 8.625%, Due 12/15/2010 # .................. 575 601 Comcast Cable Communications Holdings, Inc., 8.375%, Due 3/15/2013 ..................... 850 937 Comcast Corp., 5.30%, Due 1/15/2014 ...................... 410 414 5.875%, Due 2/15/2018 ..................... 305 302 6.45%, Due 3/15/2037 ...................... 2,630 2,438 Nokia Corp., 5.375%, Due 5/15/2019 ..................... 600 594 Rogers Communications, Inc., 6.80%, Due 8/15/2018 ...................... 350 367
See accompanying notes 13 AMERICAN BEACON BALANCED FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) Time Warner Cable, Inc., 8.25%, Due 2/14/2014 ...................... $ 300 $ 329 5.85%, Due 5/1/2017 ....................... 1,055 1,014 7.30%, Due 7/1/2038 ....................... 1,920 1,919 Verizon Wireless Capital, LLC, 8.50%, Due 11/15/2018 ++ .................. 920 1,102 Viacom, Inc., 6.875%, Due 4/30/2036 ..................... 2,880 2,349 ------------ 12,683 ------------ CONSUMER DISCRETIONARY - 0.58% Best Buy Co., Inc., 6.75%, Due 7/15/2013 ...................... 415 410 Lowe's Companies, Inc., 5.50%, Due 10/15/2035 ..................... 210 171 6.65%, Due 9/15/2037 ...................... 170 170 Target Corp., 6.50%, Due 10/15/2037 ..................... 445 386 Walgreen Co., 5.25%, Due 1/15/2019 ...................... 390 388 Wal-Mart Stores, Inc., 7.55%, Due 2/15/2030 ...................... 425 490 6.50%, Due 8/15/2037 ...................... 1,340 1,421 6.20%, Due 4/15/2038 ...................... 656 683 ------------ 4,119 ------------ CONSUMER STAPLES - 0.61% Altria Group, Inc., 9.70%, Due 11/10/2018 ..................... 365 427 Archer-Daniels-Midland Co., 6.45%, Due 1/15/2038 ...................... 350 356 Coca-Cola Enterprises, Inc., 7.375%, Due 3/3/2014 ...................... 175 200 Dr Pepper Snapple Group, Inc., 6.82%, Due 5/1/2018 ....................... 250 243 Kellogg Co., 4.25%, Due 3/6/2013 ....................... 500 505 Kraft Foods, Inc., 6.75%, Due 2/19/2014 ...................... 300 327 6.50%, Due 8/11/2017 ...................... 240 249 7.00%, Due 8/11/2037 ...................... 1,580 1,553 Kroger Co., 7.50%, Due 1/15/2014 ...................... 190 212 Safeway, Inc., 6.25%, Due 3/15/2014 ...................... 180 191 ------------ 4,263 ------------ ENERGY - 1.51% Cameron International Corp., 6.375%, Due 7/15/2018 ..................... 215 188
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) Canadian Natural Resources Ltd., 6.70%, Due 7/15/2011 ...................... $ 410 $ 425 6.25%, Due 3/15/2038 ...................... 425 346 ConocoPhillips, 5.20%, Due 5/15/2018 ...................... 425 417 5.75%, Due 2/1/2019 ....................... 335 342 6.50%, Due 2/1/2039 ....................... 705 699 Consolidated Natural Gas Co., 6.00%, Due 10/15/2010 ..................... 495 511 Energy Transfer Partners LP, 8.50%, Due 4/15/2014 ...................... 300 324 9.00%, Due 4/15/2019 ...................... 260 284 EOG Resources Canada, Inc., 4.75%, Due 3/15/2014 ++ ................... 550 551 Marathon Oil Corp., 6.00%, Due 10/1/2017 ...................... 445 424 Shell International Finance BV, 6.375%, Due 12/15/2038 .................... 2,180 2,320 TransCanada Pipelines Ltd., 7.625%, Due 1/15/2039 ..................... 390 427 Transocean, Inc., 6.80%, Due 3/15/2038 ...................... 3,170 3,034 Valero Energy Corp., 9.375%, Due 3/15/2019 ..................... 155 173 6.625%, Due 6/15/2037 ..................... 185 146 ------------ 10,611 ------------ FINANCE - 2.21% American Express Co., 8.15%, Due 3/19/2038 ...................... 325 308 American Express Credit Corp., 5.875%, Due 5/2/2013 ...................... 475 468 American General Finance Corp., 4.875%, Due 5/15/2010 ..................... 500 332 4.00%, Due 3/15/2011 ...................... 630 319 Ameriprise Financial, Inc., 5.35%, Due 11/15/2010 ..................... 975 961 Bear Stearns Cos., Inc., 6.40%, Due 10/2/2017 ...................... 555 540 7.25%, Due 2/1/2018 ....................... 340 347 CIT Group, Inc., 4.75%, Due 12/15/2010 ..................... 270 200 CME Group, Inc., 5.40%, Due 8/1/2013 ....................... 475 492 Countrywide Home Loans, Inc., 4.00%, Due 3/22/2011 ...................... 140 131 General Electric Capital Corp., 4.375%, Due 3/3/2012 ...................... 700 684 5.65%, Due 6/9/2014 ....................... 1,050 1,043
See accompanying notes 14 AMERICAN BEACON BALANCED FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) 5.625%, Due 5/1/2018 ...................... $ 500 $ 436 6.875%, Due 1/10/2039 ..................... 390 306 Goldman Sachs Group, Inc., 4.75%, Due 7/15/2013 ...................... 450 436 6.25%, Due 9/1/2017 ....................... 550 520 5.95%, Due 1/18/2018 ...................... 280 260 6.75%, Due 10/1/2037 ...................... 1,402 1,069 HSBC Finance Corp., 5.25%, Due 1/14/2011 ...................... 1,700 1,650 International Lease Finance Corp., 5.75%, Due 6/15/2011 ...................... 475 362 JP Morgan Chase & Co., 6.75%, Due 2/1/2011 ....................... 1,075 1,115 Korea Development Bank, 8.00%, Due 1/23/2014 ...................... 900 945 Merrill Lynch & Co., Inc., 5.45%, Due 2/5/2013 ....................... 340 298 6.875%, Due 4/25/2018 ..................... 250 211 6.11%, Due 1/29/2037 ...................... 425 248 Novartis Capital Corp., 4.125%, Due 2/10/2014 ..................... 560 580 Novartis Securities Investment Ltd., 5.125%, Due 2/10/2019 ..................... 1,164 1,192 SLM Corp., 5.375%, Due 1/15/2013 ..................... 185 124 ------------ 15,577 ------------ HEALTH CARE - 0.72% Amgen, Inc., 6.40%, Due 2/1/2039 ....................... 445 448 Covidien International Finance SA, 5.45%, Due 10/15/2012 ..................... 360 374 6.55%, Due 10/15/2037 ..................... 1,500 1,480 UnitedHealth Group, Inc., 5.25%, Due 3/15/2011 ...................... 865 879 6.625%, Due 11/15/2037 .................... 2,000 1,654 6.875%, Due 2/15/2038 ..................... 285 248 ------------ 5,083 ------------ INDUSTRIALS - 2.47% American Honda Finance Corp., 4.625%, Due 4/2/2013 ++ ................... 425 380 Burlington Northern Santa Fe Corp., 5.75%, Due 3/15/2018 ...................... 425 423 Canadian National Railway Co., 5.55%, Due 5/15/2018 ...................... 500 506 5.55%, Due 3/1/2019 ....................... 175 178 Caterpillar Financial Services Corp., 4.85%, Due 12/7/2012 ...................... 265 264
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) Con-way, Inc., 8.875%, Due 5/1/2010 ...................... $ 1,850 $ 1,823 CRH America, Inc., 6.00%, Due 9/30/2016 ...................... 985 769 Daimler Finance NA LLC, 7.75%, Due 1/18/2011 ...................... 1,000 1,010 5.875%, Due 3/15/2011 ..................... 450 445 5.75%, Due 9/8/2011 ....................... 550 540 Eaton Corp., 5.60%, Due 5/15/2018 ...................... 340 317 FedEx Corp., 8.00%, Due 1/15/2019 ...................... 900 974 Home Depot, Inc., 5.20%, Due 3/1/2011 ....................... 445 453 Honeywell International, Inc., 4.25%, Due 3/1/2013 ....................... 500 519 ITT Corp., 4.90%, Due 5/1/2014 ....................... 845 856 John Deere Capital Corp., 5.40%, Due 10/17/2011 ..................... 650 675 Koninklijke Philips Electronics NV, 5.75%, Due 3/11/2018 ...................... 335 336 Nissan Motor Acceptance Corp., 5.625%, Due 3/14/2011 ++ .................. 500 456 Norfolk Southern Corp., 5.75%, Due 4/1/2018 ....................... 425 419 Tyco Electronics Group SA, 6.55%, Due 10/1/2017 ...................... 2,057 1,583 7.125%, Due 10/1/2037 ..................... 1,750 1,067 Tyco International Finance SA, 8.50%, Due 1/15/2019 ...................... 240 257 Unilever Capital Corp., 7.125%, Due 11/1/2010 ..................... 2,000 2,147 Union Pacific Corp., 6.50%, Due 4/15/2012 ...................... 550 569 United Technologies Corp., 6.125%, Due 7/15/2038 ..................... 210 209 Waste Management, Inc., 7.375%, Due 3/11/2019 ..................... 255 259 ------------ 17,434 ------------ INSURANCE - 0.69% Aegon Funding Corp., 5.75%, Due 12/15/2020 ..................... 450 369 American International Group, Inc., 5.85%, Due 1/16/2018 ...................... 550 186 6.25%, Due 5/1/2036 ....................... 425 145 John Hancock Global Funding II, 7.90%, Due 7/2/2010 ++ .................... 25 26
See accompanying notes 15 AMERICAN BEACON BALANCED FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) Liberty Mutual Insurance Co., 7.875%, Due 10/15/2026 ++ .................... $ 1,500 $ 968 Lincoln National Corp., 4.75%, Due 2/15/2014 ......................... 245 157 MetLife, Inc., 5.375%, Due 12/15/2012 ....................... 660 628 6.375%, Due 6/15/2034 ........................ 450 345 Metropolitan Life Global Funding I, 4.625%, Due 8/19/2010 ++ ..................... 900 875 Prudential Financial, Inc., 4.50%, Due 7/15/2013 ......................... 550 447 5.10%, Due 9/20/2014 ......................... 550 435 Willis North America, Inc., 6.20%, Due 3/28/2017 ......................... 360 261 ------------ 4,842 ------------ PHARMACEUTICALS - 1.48% Amgen, Inc., 6.90%, Due 6/1/2038 .......................... 1,480 1,587 AstraZeneca plc, 6.45%, Due 9/15/2037 ......................... 1,880 2,024 Biogen Idec, Inc., 6.875%, Due 3/1/2018 ......................... 1,500 1,466 Bristol-Myers Squibb Co., 5.45%, Due 5/1/2018 .......................... 250 256 6.125%, Due 5/1/2038 ......................... 875 890 GlaxoSmithKline Capital, Inc., 5.65%, Due 5/15/2018 ......................... 250 260 6.375%, Due 5/15/2038 ........................ 1,370 1,411 Hospira, Inc., 6.05%, Due 3/30/2017 ......................... 360 323 Pfizer, Inc., 4.45%, Due 3/15/2012 ......................... 770 809 5.35%, Due 3/15/2015 ......................... 420 452 Wyeth Corp., 5.50%, Due 2/1/2014 .......................... 890 955 ------------ 10,433 ------------ REAL ESTATE - 0.25% Equity Residential, 5.125%, Due 3/15/2016 ........................ 365 301 ProLogis, 5.50%, Due 4/1/2012 .......................... 450 366 5.625%, Due 11/15/2016 ....................... 550 368 Simon Property Group LP, 5.30%, Due 5/30/2013 ......................... 425 379 5.75%, Due 12/1/2015 ......................... 460 378 ------------ 1,792 ------------
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) TECHNOLOGY - 1.02% Cisco Systems, Inc., 5.90%, Due 2/15/2039 ...................... $ 1,420 $ 1,344 Computer Sciences Corp., 5.50%, Due 3/15/2013 ...................... 190 189 6.50%, Due 3/15/2018 ...................... 495 483 Dell, Inc., 6.50%, Due 4/15/2038 ...................... 500 413 Hewlett-Packard Co., 4.25%, Due 2/24/2012 ...................... 585 607 4.50%, Due 3/1/2013 ....................... 425 440 6.125%, Due 3/1/2014 ...................... 460 506 International Business Machines Corp., 7.625%, Due 10/15/2018 .................... 770 913 Oracle Corp., 6.50%, Due 4/15/2038 ...................... 1,055 1,076 United Technologies Corp., 6.125%, Due 2/1/2019 ...................... 950 1,023 Xerox Corp., 5.65%, Due 5/15/2013 ...................... 250 225 ------------ 7,219 ------------ TELEPHONE - 0.97% America Movil, S.A.B. de C.V., 6.375%, Due 3/1/2035 ...................... 425 343 AT&T Wireless Services, Inc., 8.75%, Due 3/1/2031 ....................... 445 509 AT&T, Inc., 5.10%, Due 9/15/2014 ...................... 985 1,024 5.625%, Due 6/15/2016 ..................... 550 560 5.50%, Due 2/1/2018 ....................... 300 299 6.80%, Due 5/15/2036 ...................... 250 242 6.40%, Due 5/15/2038 ...................... 1,840 1,725 Deutsche Telekom AG, 8.50%, Due 6/15/2010 ...................... 380 399 Telefonica Emisiones SAU, 5.984%, Due 6/20/2011 ..................... 380 396 Verizon Communications, Inc., 5.50%, Due 4/1/2017 ....................... 500 498 6.90%, Due 4/15/2038 ...................... 425 420 Vodafone Group plc, 6.15%, Due 2/27/2037 ...................... 425 411 ------------ 6,826 ------------ UTILITIES - 1.45% American Water Capital Corp., 6.593%, Due 10/15/2037 .................... 1,492 1,120 Columbus Southern Power Co., 5.50%, Due 3/1/2013 ....................... 660 668
See accompanying notes 16 AMERICAN BEACON BALANCED FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) Dominion Resources, Inc., Series A, 5.60%, Due 11/15/2016 ........... $ 500 $ 490 8.875%, Due 1/15/2019 ..................... 120 139 Duke Energy Carolinas LLC, 5.10%, Due 4/15/2018 ...................... 500 508 Duke Energy Corp., 6.30%, Due 2/1/2014 ....................... 270 285 Duke Energy Indiana, Inc., 6.05%, Due 6/15/2016 ...................... 520 530 MidAmerican Energy Holdings Co., 5.875%, Due 10/1/2012 ..................... 960 992 6.125%, Due 4/1/2036 ...................... 425 369 Pacific Gas & Electric Co., 6.25%, Due 12/1/2013 ...................... 175 190 Public Service Enterprise Group, Inc., 6.95%, Due 6/1/2012 ....................... 845 865 Southern Power Co., 6.25%, Due 7/15/2012 ...................... 705 730 Union Electric Co., 6.70%, Due 2/1/2019 ....................... 325 320 Virginia Electric and Power Co., 5.40%, Due 4/30/2018 ...................... 500 510 8.875%, Due 11/15/2038 .................... 955 1,235 Westar Energy, Inc., 6.00%, Due 7/1/2014 ....................... 175 175 Wisconsin Electric Power Co., 6.25%, Due 12/1/2015 ...................... 280 296 Xcel Energy, Inc., 5.613%, Due 4/1/2017 ...................... 869 828 ------------ 10,250 ------------ TOTAL CORPORATE OBLIGATIONS ..................... 123,693 ------------ NON-AGENCY MORTGAGE-BACKED OBLIGATIONS - 2.64% COMMERCIAL MORTGAGE-BACKED SECURITY - 1.38% Banc of America Commercial Mortgage, Inc., 2005-6 A1, 5.001%, Due 9/10/2047 .......... 486 485 2007-2 A2, 5.634%, Due 4/10/2049 .......... 1,100 941 Bear Stearns Commercial Mortgage Securities, Inc., 2006-T22 A2, 5.63%, Due 4/12/2038 ......... 905 844 2004-PWR5 A4, 4.831%, Due 7/11/2042 ....... 2,010 1,772 2005-T20 A2, 5.127%, Due 10/12/2042 ....... 875 845 Citigroup Commercial Mortgage Trust, 2004-C2 A3, 4.38%, Due 10/15/2041 ......... 995 903 GE Capital Commercial Mortgage Corp., 2003-C2 A2, 4.17%, Due 7/10/2037 .......... 127 125
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) JP Morgan Chase Commercial Mortgage Securities Corp., 2004-CBX A4, 4.529%, Due 1/12/2037 ........ $ 555 $ 486 2005-LDP3 A1, 4.655%, Due 8/15/2042 ....... 128 128 2005-LDP1 A2, 4.625%, Due 3/15/2046 ....... 1,033 1,001 2007-CB19 A4, 5.937%, Due 2/12/2049 ....... 800 571 2007-CB20 A2, 5.629%, Due 2/12/2051 ....... 850 727 LB-UBS Commercial Mortgage Trust, 2004-C1 A4, 5.424%, Due 2/15/2040 ......... 650 469 Wachovia Bank Commercial Mortgage Trust, 2007-C32 A2, 5.924%, Due 6/15/2049 ........ 530 456 ------------ 9,753 ------------ WHOLE LOAN COLLATERALIZED MORTGAGE OBLIGATIONS - 1.26% Chase Mortgage Finance Corp., 2006-A1 A1, 6.037%, Due 9/25/2036 ss ...... 1,280 982 Citicorp Mortgage Securities, Inc., 2006-3 2A1, 5.50%, Due 6/25/2021 .......... 1,125 991 Citigroup/Deutsche Bank Commercial Mortgage Trust, 5.886%, Due 11/15/2044 .................... 1,690 1,317 Countrywide Home Loan Mortgage Pass Through Trust, 2007-18 A1, 6.00%, Due 9/25/2037 .......... 1,410 952 JP Morgan Chase Commercial Mortgage Securities Corp., 2006-LDP9 A3, 5.336%, Due 5/15/2047 ....... 615 475 JP Morgan Mortgage Trust, 7.00%, Due 8/25/2037 ...................... 777 505 Morgan Stanley Capital I, 5.692%, Due 4/15/2049 ..................... 1,060 723 Prime Mortgage Trust, 2005-2, 5.25%, Due 7/25/2020 .............. 1,504 1,512 Wells Fargo Mortgage Backed Securities Trust, 2006-11 A8, 6.00%, Due 9/25/2036 .......... 771 613 2007-7 A1, 6.00%, Due 6/25/2037 ........... 1,384 810 ------------ 8,880 ------------ TOTAL NON-AGENCY MORTGAGE-BACKED OBLIGATIONS .... 18,633 ------------ ASSET-BACKED SECURITIES - 0.57% American Express Credit Account Master Trust, 2006-2 A, 5.35%, Due 1/15/2014 ............ 1,700 1,709 Capital Auto Receivables Asset Trust, 2006-SN1A A4A, 5.32%, Due 3/20/2010 ++ .... 642 640 Capital One Multi-Asset Execution Trust, 2006-A10 A10, 5.15%, Due 6/16/2014 ........ 1,250 1,248
See accompanying notes 17 AMERICAN BEACON BALANCED FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) Volkswagen Auto Loan Enhanced Trust, 2008-2 A4A, 6.24%, Due 7/20/2015 .......... $ 400 $ 410 ------------ TOTAL ASSET-BACKED SECURITIES ................... 4,007 ------------ U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 9.16% FEDERAL HOME LOAN MORTGAGE CORPORATION - 3.10% 4.50%, Due 3/1/2019 ....................... 715 739 5.00%, Due 10/1/2020 ...................... 291 302 5.00%, Due 4/1/2023 ....................... 1,422 1,472 5.50%, Due 1/1/2024 ....................... 666 693 5.00%, Due 8/1/2033 ....................... 1,471 1,517 5.50%, Due 2/1/2034 ....................... 1,361 1,412 5.00%, Due 3/1/2034 ....................... 1,141 1,176 6.00%, Due 6/1/2034 ....................... 829 869 6.00%, Due 8/1/2034 ....................... 707 743 5.00%, Due 8/1/2035 ....................... 1,044 1,075 5.00%, Due 9/1/2035 ....................... 1,324 1,363 5.00%, Due 9/1/2035 ....................... 740 762 6.00%, Due 8/1/2036 ....................... 1,447 1,513 5.50%, Due 11/1/2036 ...................... 1,296 1,342 5.50%, Due 4/1/2037 ....................... 752 779 5.50%, Due 5/1/2037 ....................... 893 925 6.00%, Due 9/1/2037 ....................... 501 524 5.00%, Due 3/1/2038 ....................... 1,656 1,704 6.00%, Due 3/1/2038 ....................... 2,802 2,928 ------------ 21,838 ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION - 5.36% 5.50%, Due 2/1/2014 ....................... 293 308 6.00%, Due 4/1/2016 ....................... 249 263 5.00%, Due 12/1/2017 ...................... 688 718 4.50%, Due 9/1/2018 ....................... 417 432 4.00%, Due 8/1/2020 ....................... 883 898 5.50%, Due 5/1/2023 ....................... 209 217 5.00%, Due 12/1/2023 ...................... 636 659 5.00%, Due 3/1/2024 ....................... 722 747 5.00%, Due 3/1/2034 ....................... 1,525 1,575 4.50%, Due 9/1/2034 ....................... 695 709 5.50%, Due 12/1/2035 ...................... 492 511 5.50%, Due 12/1/2035 ...................... 380 395 5.50%, Due 1/1/2036 ....................... 1,215 1,262 5.50%, Due 2/1/2036 ....................... 815 846 5.00%, Due 2/1/2036 ....................... 750 774 5.00%, Due 3/1/2036 ....................... 1,365 1,408 5.50%, Due 4/1/2036 ....................... 1,049 1,089 6.00%, Due 9/1/2036 ....................... 922 965 6.50%, Due 9/1/2036 ....................... 1,951 2,072 5.50%, Due 12/1/2036 ...................... 1,547 1,605
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) 5.50%, Due 2/1/2037 ....................... $ 1,503 $ 1,559 5.50%, Due 8/1/2037 ....................... 960 998 6.00%, Due 8/1/2037 ....................... 1,274 1,333 6.50%, Due 8/1/2037 ....................... 327 347 6.00%, Due 11/1/2037 ...................... 682 713 5.50%, Due 3/1/2038 ....................... 5,432 5,634 5.00%, Due 4/1/2038 ....................... 4,580 4,715 5.00%, Due 6/1/2038 ....................... 1,923 1,980 5.50%, Due 6/1/2038 ....................... 2,413 2,503 6.00%, Due 9/1/2038 ....................... 557 583 ------------ 37,818 ------------ GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.70% 7.00%, Due 12/15/2025 ..................... 270 290 4.201%, Due 8/16/2026 ..................... 602 612 6.50%, Due 8/15/2027 ...................... 318 340 6.50%, Due 11/15/2027 ..................... 325 348 7.50%, Due 12/15/2028 ..................... 243 262 5.50%, Due 7/15/2033 ...................... 870 907 6.00%, Due 12/15/2033 ..................... 918 961 5.50%, Due 2/20/2034 ...................... 1,180 1,227 ------------ 4,947 ------------ TOTAL U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS ... 64,603 ------------ U.S. AGENCY OBLIGATIONS - 7.49% FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.00% 4.50%, Due 1/15/2015 + .................... 24,090 26,372 6.25%, Due 7/15/2032 ...................... 1,500 1,826 28,198 FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.49% 5.125%, Due 1/2/2014 ...................... 645 663 4.625%, Due 10/15/2014 .................... 1,000 1,100 5.375%, Due 6/12/2017 + ................... 2,650 2,985 6.25%, Due 5/15/2029 ...................... 12,200 14,672 6.00%, Due 4/18/2036 ...................... 5,065 5,198 ------------ 24,618 ------------ TOTAL U.S. AGENCY OBLIGATIONS ................... 52,816 ------------ U.S. TREASURY OBLIGATIONS - 3.06% 1.375%, Due 2/15/2012 ..................... 1,900 1,905 1.75%, Due 3/31/2014 ...................... 3,845 3,802 2.75%, Due 2/15/2019 ...................... 3,220 3,119 7.875%, Due 2/15/2021 ..................... 1,200 1,674 6.25%, Due 8/15/2023 ...................... 1,400 1,750 6.875%, Due 8/15/2025 ..................... 580 785 5.25%, Due 11/15/2028 ..................... 750 865 4.75%, Due 2/15/2037 ...................... 800 889
See accompanying notes 18 AMERICAN BEACON BALANCED FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ---------- ------------ (DOLLARS IN THOUSANDS) 4.50%, Due 5/15/2038 ...................... $ 6,275 $ 6,752 ------------ TOTAL U.S. TREASURY OBLIGATIONS ................. 21,541 ------------
SHARES ---------- SHORT TERM INVESTMENTS - 5.12% American Beacon U.S. Government Money Market Select Fund * ...................... 5,000,000 5,000 Columbia Government Reserve Fund ............. 27,268,781 27,269
PAR AMOUNT ---------- U.S. Treasury, 0.12%, Due 6/11/2009 @ .................... $ 3,819 3,818 ------------ TOTAL SHORT TERM INVESTMENTS 36,087 ------------
SHARES ---------- SECURITIES LENDING COLLATERAL - 0.80% American Beacon U.S. Government Money Market Select Fund * ....................... 1,209,900 1,210 State Street Navigator Securities Lending Prime Portfolio ............................ 4,425,898 4,426 ------------ TOTAL SECURITIES LENDING COLLATERAL 5,636 ------------ TOTAL INVESTMENTS 100.28% - (COST $821,527) 706,883 LIABILITIES, NET OF OTHER ASSETS - (0.28%) (1,989) ------------ TOTAL NET ASSETS - 100.00% $ 704,894 ============
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, 2009. ++ 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 $5,394 or 0.77% of net assets. The Fund has no right to demand registration of these securities. # Step Up/Down ss. 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. * The Fund is affiliated by having the same investment advisor. @ At April 30, 2009, 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 .. 831 Jun 2009 $36,149 $3,328 ======= ======
See accompanying notes 19 American Beacon Large Cap Growth Fund Schedule of Investments April 30, 2009 (Unaudited)
Shares Value ------ ----- (dollars in thousands) COMMON STOCKS - 94.66% CONSUMER DISCRETIONARY - 10.98% Hotels, Restaurants & Leisure - 1.47% Carnival Corp. ..................................... 15,300 $ 412 McDonald's Corp. ................................... 7,735 412 ------ 824 ------ Household Durables - 0.69% Dolby Laboratories, Inc. ## ........................ 9,600 385 ------ Internet & Catalog Retail - 0.87% priceline.com, Inc. ## ............................. 5,000 485 ------ Multiline Retail - 2.37% Kohl's Corp. ## .................................... 7,800 354 Wal-Mart Stores, Inc. .............................. 19,239 969 ------ 1,323 ------ Specialty Retail - 4.20% AutoZone, Inc. ## .................................. 2,488 414 Best Buy Company, Inc. ............................. 19,961 766 Dollar Tree, Inc. ## ............................... 11,281 478 GameStop Corp. ## .................................. 14,080 425 Lowe's Companies, Inc. ............................. 12,200 262 ------ 2,345 ------ Textiles & Apparel - 1.38% Coach, Inc. ## ..................................... 31,418 770 ------ Total Consumer Discretionary ........................ 6,132 ------ CONSUMER STAPLES - 5.62% Food & Drug Retailing - 1.66% CVS Caremark Corp. ................................. 16,400 521 The Kroger Co. ..................................... 18,754 406 ------ 927 ------ Food Products - 3.17% General Mills, Inc. ................................ 16,861 855 H.J. Heinz Co. ..................................... 13,957 480 Kellogg Co. ........................................ 10,366 437 ------ 1,772 ------ Household Products - 0.79% Colgate-Palmolive Co. .............................. 7,432 438 ------ Total Consumer Staples .............................. 3,137 ------ ENERGY - 5.18% Energy Equipment & Services - 2.47% FMC Technologies, Inc. ## .......................... 9,400 322 Halliburton Co. .................................... 26,340 533 Transocean Ltd. ## ................................. 7,815 $ 527 ------ 1,382 ------ Oil & Gas - 2.71% Apache Corp. ....................................... 7,134 519 Murphy Oil Corp. ................................... 10,100 482 Petro-Canada ## .................................... 8,400 265 Petroleo Brasileiro S.A., ADR ...................... 7,300 245 ------ 1,511 ------ Total Energy ........................................ 2,893 ------ FINANCIALS - 6.41% Banks - 0.83% JP Morgan Chase & Co. .............................. 14,100 465 ------ Diversified Financials - 5.58% BlackRock, Inc. .................................... 2,800 410 Charles Schwab Corp. ............................... 36,900 682 Goldman Sachs Group, Inc. .......................... 1,100 142 IntercontinentalExchange, Inc. ## .................. 4,200 368 Mastercard, Inc. ................................... 3,200 587 Visa, Inc. ## ...................................... 14,300 929 ------ 3,118 ------ Total Financials .................................... 3,583 ------ HEALTH CARE - 17.55% Biotechnology - 2.05% Gilead Sciences, Inc. ## ........................... 25,036 1,147 ------ Health Care Equipment & Supplies - 5.83% Baxter International, Inc. ......................... 20,125 976 Becton, Dickinson & Co. ............................ 6,937 420 Illumina, Inc. ## .................................. 7,000 261 Mindray Medical International Ltd., ADR ............ 11,500 262 St. Jude Medical, Inc. ## .......................... 25,983 871 Varian Medical Systems, Inc. ## .................... 13,931 465 ------ 3,255 ------ Health Care Providers & Services - 1.65% Aetna, Inc. ........................................ 18,478 407 Express Scripts, Inc. ## ........................... 8,063 516 ------ 923 ------ Pharmaceuticals - 8.02% Abbott Laboratories ................................ 11,018 461 Amgen, Inc. ## ..................................... 10,380 503 Bristol-Myers Squibb Co. ........................... 23,637 454 Cephalon, Inc. ## .................................. 4,800 315 Eli Lilly & Co. .................................... 13,237 436
See accompanying notes 20 American Beacon Large Cap Growth Fund Schedule of Investments April 30, 2009 (Unaudited)
Shares Value ------ ----- (dollars in thousands) Johnson & Johnson ...................................... 9,149 $ 479 Medco Health Solutions, Inc. ## ........................ 26,700 1,163 Teva Pharmaceutical Industries Ltd., ADR ............... 15,300 671 ------ 4,482 ------ Total Health Care ....................................... 9,807 ------ INDUSTRIALS - 18.94% Aerospace & Defense - 5.57% General Dynamics Corp. ................................. 8,723 451 Goodrich Corp. ......................................... 12,788 566 Lockheed Martin Corp. .................................. 8,537 671 Precision Castparts Corp. .............................. 5,000 374 United Technologies Corp. .............................. 21,481 1,049 ------ 3,111 ------ Air Freight & Couriers - 1.13% Expeditors International of Washington, Inc. ........... 4,500 156 FedEx Corp. ............................................ 8,506 476 ------ 632 ------ Commercial Services & Supplies - 4.01% Apollo Group, Inc. ## .................................. 11,702 737 CH Robinson Worldwide, Inc. ............................ 5,000 266 H&R Block, Inc. ........................................ 29,339 444 ITT Educational Services, Inc. ## ...................... 7,892 795 ------ 2,242 ------ Construction & Engineering - 0.79% Fluor Corp. ............................................ 11,655 441 ------ Industrial Conglomerates - 0.87% Honeywell International, Inc. .......................... 15,587 487 ------ Machinery - 2.47% Danaher Corp. ## ....................................... 13,000 760 Flowserve Corp. ........................................ 9,152 621 ------ 1,381 ------ Road & Rail - 3.27% Norfolk Southern Corp. ................................. 13,348 476 Union Pacific Corp. .................................... 27,512 1,352 ------ 1,828 ------ Trading Companies & Distributors - 0.83% Fastenal Co. ........................................... 12,000 460 ------ Total Industrials ....................................... 10,582 ------ INFORMATION TECHNOLOGY - 24.51% Communications Equipment - 4.98% Cisco Systems, Inc. ## ................................. 36,400 703 Harris Corp. ........................................... 16,108 $ 492 Juniper Networks, Inc. ## .............................. 11,900 258 QUALCOMM, Inc. ......................................... 25,000 1,058 Research In Motion Ltd. ## ............................. 3,900 271 ------ 2,782 ------ Computers & Peripherals - 7.75% Apple Computer, Inc. ## ................................ 10,296 1,296 Dell, Inc. ## .......................................... 44,740 520 EMC Corp. ## ........................................... 39,855 499 Hewlett-Packard Co. .................................... 30,003 1,079 International Business Machines Corp. .................. 4,363 450 Western Digital Corp. ## ............................... 20,567 484 ------ 4,328 ------ Internet Software & Services - 3.31% Baidu, Inc., ADR ## .................................... 1,700 396 Equinix, Inc. ## ....................................... 6,000 421 Google, Inc. ## ........................................ 2,050 812 McAfee, Inc. ## ........................................ 5,900 222 ------ 1,851 ------ IT Consulting & Services - 2.80% Accenture Ltd. ......................................... 15,520 457 Affiliated Computer Services, Inc. ## .................. 8,576 415 Cognizant Technology Solutions Corp. ## ................ 28,000 694 ------ 1,566 ------ Semiconductor Equipment & Products - 0.24% Lam Research Corp. ## .................................. 4,800 134 ------ Software - 5.43% Activision Blizzard, Inc. ## ........................... 46,545 501 Adobe Systems, Inc. ## ................................. 10,200 279 Autodesk, Inc. ## ...................................... 6,800 136 Microsoft Corp. ........................................ 55,280 1,120 Oracle Corp. ........................................... 51,646 999 ------ 3,035 ------ Total Information Technology ............................ 13,696 ------ MATERIALS - 3.59% Chemicals - 3.59% Ecolab, Inc. ........................................... 6,800 262 Monsanto Co. ........................................... 15,360 1,304 The Mosaic Co. ......................................... 10,839 438 ------ Total Materials ......................................... 2,004 ------
See accompanying notes 21 American Beacon Large Cap Growth Fund Schedule of Investments April 30, 2009 (Unaudited)
Shares Value ------ ----- (dollars in thousands) TELECOMMUNICATION SERVICES - 1.39% Wireless Telecommunication Services - 1.39% America Movil, S.A.B. de C.V., ADR ............... 7,800 $ 256 American Tower Corp. ## .......................... 8,700 277 MetroPCS Communications, Inc. ## ................. 14,400 246 --------- Total Telecommunication Services .................. 779 --------- UTILITIES - 0.49% Gas Utilities - 0.49% Southwestern Energy Co. ## ....................... 7,600 272 --------- Total Common Stocks ............................... 52,885 --------- SHORT TERM INVESTMENTS - 5.22% Columbia Government Reserve Fund ................. 2,302,795 2,303
Par Amount ------ U.S. Treasury, 0.08%, Due 6/11/2009++ ......................... $ 614 614 --------- Total Short Term Investments ...................... 2,917 --------- TOTAL INVESTMENTS 99.88% - (Cost $56,908) ......... 55,802 OTHER ASSETS, NET OF LIABILITIES - 0.12% ........... 68 --------- TOTAL NET ASSETS - 100.00% ......................... $ 55,870 =========
Percentages are stated as a percent of net assets. ## Non-income producing security. ++ At April 30, 2009, 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 ........................................................ 67 Jun 2009 $2,915 $103 ====== ====
See accompanying notes 22 American Beacon Mid-Cap Value Fund Schedule of Investments April 30, 2009 (Unaudited)
Shares Value ------ ----- (dollars in thousands) COMMON STOCKS - 95.15% CONSUMER DISCRETIONARY - 23.04% Audio/Video Products - 0.94% Harman International Industries, Inc. .............. 28,425 $ 517 ------ Auto Components - 2.70% Advance Auto Parts, Inc. ........................... 19,100 836 Lear Corp. ## ...................................... 59,200 47 Magna International, Inc. .......................... 17,500 594 ------ 1,477 ------ Hotels, Restaurants & Leisure - 2.30% International Game Technology ...................... 71,500 883 Royal Caribbean Cruises Ltd. + ..................... 25,800 380 ------ 1,263 ------ Household Durables - 3.93% Black & Decker Corp. ............................... 18,400 741 Stanley Works ...................................... 24,300 924 Whirlpool Corp. + .................................. 10,775 487 ------ 2,152 ------ Leisure Equipment & Products - 1.05% Mattel, Inc. ....................................... 38,525 576 ------ Media - 1.13% Omnicom Group, Inc. ................................ 19,725 621 ------ Multiline Retail - 1.86% J.C. Penney Company, Inc. .......................... 33,275 1,021 ------ Specialty Retail - 8.61% Family Dollar Stores, Inc. ......................... 21,200 704 GameStop Corp. ## .................................. 31,800 959 Gildan Activewear, Inc. ## ......................... 41,875 480 Hanesbrands, Inc. ## + ............................. 40,300 663 Regis Corp. ........................................ 39,625 759 Rent-A-Center, Inc. ## ............................. 37,625 724 Sherwin-Williams Co. ............................... 7,700 436 ------ 4,725 ------ Textiles & Apparel - 0.52% Sealy Corp. ## ..................................... 80,525 285 ------ Total Consumer Discretionary ........................ 12,637 ------ CONSUMER STAPLES - 4.56% Food Products - 1.82% Del Monte Foods Co. ................................ 79,650 601 Sara Lee Corp. ..................................... 47,825 $ 398 ------ 999 ------ Personal Products - 1.03% Avon Products, Inc. ................................ 24,825 565 ------ Tobacco - 1.71% Lorillard, Inc. .................................... 7,600 480 Reynolds American, Inc. ............................ 12,100 460 ------ 940 ------ Total Consumer Staples .............................. 2,504 ------ ENERGY - 3.87% Energy Equipment & Services - 1.44% BJ Services Co. .................................... 56,775 789 ------ Oil & Gas - 2.43% El Paso Corp. ...................................... 74,700 515 Murphy Oil Corp. ................................... 17,200 821 ------ 1,336 ------ Total Energy ........................................ 2,125 ------ FINANCIALS - 18.74% Banks - 4.80% Comerica, Inc. ..................................... 23,525 494 First Horizon National Corp. ....................... 12,730 146 New York Community Bancorp, Inc. + ................ 34,900 395 People's United Financial, Inc. .................... 43,154 674 PNC Financial Services Group, Inc. ................. 19,003 754 Popular, Inc. + ................................... 59,175 169 ------ 2,632 ------ Diversified Financials - 3.09% Capital One Financial Corp. ........................ 29,200 489 Moody's Corp. + ................................... 30,525 901 SLM Corp. ## + ..................................... 62,700 303 ------ 1,693 ------ Insurance - 9.18% Axis Capital Holdings Ltd. ......................... 26,600 655 Conseco, Inc. ## ................................... 92,050 147 Delphi Financial Group, Inc. ....................... 47,800 826 First American Corp. ............................... 8,975 252 IPC Holdings Ltd. .................................. 15,125 394 Protective Life Corp. .............................. 46,725 400 RenaissanceRe Holdings Ltd. ........................ 14,575 709 Torchmark Corp. .................................... 25,425 746 Willis Group Holdings Ltd. ......................... 32,100 883
See accompanying notes 23 American Beacon Mid-Cap Value Fund Schedule of Investments April 30, 2009 (Unaudited)
Shares Value ------ ----- (dollars in thousands) XL Capital Ltd. .................................... 2,400 $ 23 ------- 5,035 ------- Real Estate - 1.67% Annaly Capital Management, Inc. .................... 65,100 916 ------- Total Financials .................................... 10,276 ------- HEALTH CARE - 11.78% Biotechnology - 0.41% Charles River Laboratories International, Inc. ## .......................................... 8,050 222 ------- Health Care Equipment & Supplies - 1.50% IMS Health, Inc. ................................... 47,625 598 Zimmer Holdings, Inc. ## ............................ 5,150 227 ------- 825 ------- Health Care Providers & Services - 9.31% Aetna, Inc. ........................................ 16,200 357 AmerisourceBergen Corp. ............................ 24,950 839 Cardinal Health, Inc. .............................. 16,700 564 CIGNA Corp. ........................................ 23,900 471 Coventry Health Care, Inc. ## ....................... 36,000 573 Mednax, Inc. ## ..................................... 13,850 497 Omnicare, Inc. ..................................... 37,300 959 Quest Diagnostics, Inc. ............................ 16,500 847 ------- 5,107 ------- Pharmaceuticals - 0.56% Mead Johnson Nutrition Co. ## ....................... 10,900 308 ------- Total Health Care ................................... 6,462 ------- INDUSTRIALS - 11.86% Aerospace & Defense - 5.35% Goodrich Corp. ..................................... 13,400 593 L-3 Communications Holdings, Inc. .................. 21,850 1,664 Spirit Aerosystems Holdings, Inc. ## ................ 53,350 680 ------- 2,937 ------- Building Products - 1.13% Armstrong World Industries, Inc. ## ................. 34,025 619 ------- Commercial Services & Supplies - 1.78% Avery Dennison Corp. ............................... 25,100 721 Pitney Bowes, Inc. ................................. 10,300 253 ------- 974 ------- Freight Transportation - 0.79% Ryder System, Inc. ................................. 15,700 435 ------- Machinery - 2.81% Brady Corp. ........................................ 13,525 $ 285 Eaton Corp. ........................................ 16,100 705 ITT Industries, Inc. ............................... 13,400 550 ------- 1,540 ------- Total Industrials ................................... 6,505 ------- INFORMATION TECHNOLOGY - 14.18% Communications Equipment - 3.53% Alcatel-Lucent, ADR ## + ............................ 377,698 944 Motorola, Inc. ..................................... 179,200 991 ------- 1,935 ------- Electronic Equipment & Instruments - 3.60% Avnet, Inc. ## ...................................... 45,875 1,004 Tyco Electronics Ltd. .............................. 55,500 968 ------- 1,972 ------- IT Consulting & Services - 3.75% Alliance Data Systems Corp. ## + .................... 13,800 578 Computer Sciences Corp. ## .......................... 23,500 869 Tech Data Corp. ## .................................. 21,300 613 ------- 2,060 ------- Semiconductor Equipment & Products - 1.92% Lam Research Corp. ## ............................... 19,475 543 Microchip Technology, Inc. ......................... 22,300 513 ------- 1,056 ------- Software - 1.38% CA, Inc. ........................................... 43,725 754 ------- Total Information Technology ........................ 7,777 ------- UTILITIES - 7.12% Electric Utilities - 4.75% CenterPoint Energy, Inc. ........................... 52,300 557 Pinnacle West Capital Corp. ........................ 22,800 624 PNM Resources, Inc. ................................ 61,425 523 Xcel Energy, Inc. .................................. 48,800 900 ------- 2,604 ------- Gas Utilities - 2.37% MDU Resources Group, Inc. .......................... 28,550 502 Sempra Energy ...................................... 11,875 546 Spectra Energy Corp. ............................... 17,300 251 ------- 1,299 ------- Total Utilities ..................................... 3,903 ------- Total Common Stocks ................................. 52,189 -------
See accompanying notes 24 American Beacon Mid-Cap Value Fund Schedule of Investments April 30, 2009 (Unaudited)
Shares Value ------ ----- (dollars in thousands) SHORT TERM INVESTMENTS - 5.85% Columbia Government Reserve Fund ................... 2,607,561 $ 2,608
Par Amount ------ U.S. Treasury, 0.07%, Due 6/11/2009++ ............................ $ 601 601 ---------- Total Short Term Investments ......................... 3,209 ----------
Shares ------ SECURITIES LENDING COLLATERAL - 2.51% American Beacon U.S. Government Money Market Select Fund # ....................... 295,893 296 State Street Navigator Securities Lending Prime Portfolio ............................ 1,082,399 1,082 ---------- Total Securities Lending Collateral ............ 1,378 ---------- TOTAL INVESTMENTS 103.51% - (Cost $77,611) ..... 56,776 LIABILITIES, NET OF OTHER ASSETS - (3.51%) ...... (1,925) ---------- TOTAL NET ASSETS - 100.00% ...................... $ 54,851 ==========
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, 2009. ++ At April 30, 2009, security pledged as collateral for open futures contracts. # The Fund is affiliated by having the same investment advisor. Futures Contracts (dollars in thousands)
Unrealized Number of Expiration Market Appreciation/ Contracts Date Value (Depreciation) --------- ---------- ------ -------------- Emini S&P 400 Index ....................................................... 57 Jun 2009 $3,192 $290 ====== ====
See accompanying notes 25 AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
Shares Value -------- ------- (dollars in thousands) SHORT-TERM INVESTMENTS - 101.99% iShares Russell 2000 Value Index Fund 7,745 $ 353 ------- TOTAL INVESTMENTS - 101.99% (Cost $363) 353 LIABILITIES, NET OF OTHER ASSETS - (1.99%) (7) TOTAL NET ASSETS - 100.00% $ 346 =======
See accompanying notes 26 AMERICAN BEACON FUNDS STATEMENTS OF ASSETS AND LIABILITIES April 30, 2009 (Unaudited)(in thousands except share and per share amounts)
SMALL CAP VALUE BALANCED LARGE CAP MID-CAP OPPORTUNITY FUND GROWTH FUND VALUE FUND FUND ------------ ------------- ---------- ------------ ASSETS: Investments in unaffiliated securities, at value A C ..... $ 700,673 $ 55,802 $ 56,480 $ 353 Investments in affiliated securities, at value B ......... 6,210 -- 296 -- Receivable for investments sold .......................... 2,009 400 282 3 Dividends and interest receivable ........................ 4,184 41 58 -- Receivable for fund shares sold .......................... 110 108 33 -- Receivable for tax reclaims .............................. 9 -- -- -- Receivable for expense reimbursement ..................... -- -- -- 6 Receivable for variation margin on open futures contracts 35 4 3 -- Prepaid expenses ......................................... 20 -- 19 -- ------------ ------------ ----------- --------- Total assets ....................................... 713,250 56,355 57,171 362 ------------ ------------ ----------- --------- LIABILITIES: Payable for investments purchased ........................ 2,061 359 771 -- Payable upon return of securities loaned ................. 5,636 -- 1,378 -- Payable for fund shares redeemed ......................... 115 28 46 -- Management and investment advisory fees payable (Note 2) . 378 74 99 3 Administrative service and service fees payable .......... 82 2 7 -- Other liabilities ........................................ 84 22 19 13 ------------ ------------ ----------- --------- Total liabilities .................................. 8,356 485 2,320 16 ------------ ------------ ----------- --------- NET ASSETS ..................................................... $ 704,894 $ 55,870 $ 54,851 $ 346 ============ ============ =========== ========= ANALYSIS OF NET ASSETS: Paid-in-capital ................................................ 931,635 85,759 95,301 7,005 Undistributed net investment income ............................ 6,386 164 183 (19) Accumulated net realized (loss) ................................ (121,812) (29,050) (20,088) (6,629) Unrealized (depreciation) of investments, futures contracts, and foreign currency ............................................... (111,315) (1,003) (20,545) (11) ------------ ------------ ----------- --------- NET ASSETS ..................................................... $ 704,894 $ 55,870 $ 54,851 $ 346 ============ ============ =========== ========= Shares outstanding (no par value): Institutional Class ...................................... 3,968,980 18,441 311,359 17,460 ============ ============ =========== ========= Investor Class ........................................... 10,332,515 N/A 2,691,973 45,480 ============ ============ =========== ========= Advisor Class ............................................ 738,040 N/A 95 N/A ============ ============ =========== ========= AMR Class ................................................ 58,703,321 12,944,245 6,142,111 N/A ============ ============ =========== ========= Net asset value, offering and redemption price per share: Institutional Class ...................................... $ 10.02 $ 4.29 $ 6.00 $ 5.20 ============ ============ =========== ========= Investor Class ........................................... $ 9.30 N/A $ 5.98 $ 5.49 ============ ============ =========== ========= Advisor Class ............................................ $ 9.64 N/A $ 5.94 N/A ============ ============ =========== ========= AMR Class ................................................ $ 9.57 $ 4.31 $ 6.01 N/A ============ ============ =========== ========= A Cost of investments in unaffiliated securities ............... $ 815,317 $ 56,908 $ 77,315 $ 363 B Cost of investments in affiliated securities ................. $ 6,210 $ -- $ 296 $ -- C Market value of securities on loan ........................... $ 5,501 $ -- $ 1,326 $ --
See accompanying notes 27 AMERICAN BEACON FUNDS STATEMENTS OF OPERATIONS Six Months Ended April 30, 2009 (in thousands) (Unaudited)
SMALL CAP LARGE CAP VALUE BALANCED GROWTH MID-CAP OPPORTUNITY FUND FUND VALUE FUND FUND --------- --------- ---------- ----------- INVESTMENT INCOME: Dividend income from unaffiliated securities (net of foreign taxes)A $ 6,870 $ 480 $ 600 $ 18 Dividend income from affiliated securities ......................... 51 5 6 -- Interest income .................................................... 8,407 1 1 4 Income derived from securities lending, net ........................ 554 55 52 -- -------- -------- -------- -------- Total investment income ...................................... 15,882 541 659 22 -------- -------- -------- -------- EXPENSES: Management and investment advisory fees (Note 2) ................... 727 112 154 5 Administrative service fees (Note 2): Institutional Class ............................................. 55 -- 3 3 Investor Class .................................................. 142 -- 22 -- Advisor Class ................................................... 11 -- -- -- AMR Class ....................................................... 136 13 8 -- Transfer agent fees: Institutional Class ............................................. 1 -- -- -- Investor Class .................................................. 6 -- -- -- AMR Class ....................................................... 16 1 -- -- Custody and fund accounting fees ................................... 47 3 3 -- Professional fees .................................................. 19 12 12 11 Registration fees and expenses ..................................... 22 -- 18 14 Service fees (Note 2): Investor Class .................................................. 125 -- 18 -- Advisor Class ................................................... 9 -- -- -- Distribution fees- Advisor Class (Note 2) .......................... 9 -- -- -- Prospectus and shareholder reports ................................. 33 2 4 2 Trustee fees ....................................................... 28 1 1 -- Other expenses ..................................................... 27 4 5 1 -------- -------- -------- -------- TOTAL EXPENSES .................................................. 1,413 148 248 36 -------- -------- -------- -------- Net (fees waived and expenses reimbursed)/recouped by Manager (Note 2) ...................................................... -- -- (11) (19) -------- -------- -------- -------- NET EXPENSES .............................................. 1,413 148 237 17 -------- -------- -------- -------- NET INVESTMENT INCOME .................................................... 14,469 393 422 5 -------- -------- -------- -------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from: Investments ..................................................... (29,847) (12,620) (6,046) (2,036) Commission recapture (Note 1) ................................... 6 5 16 -- Futures contracts ............................................... (17,883) (1,401) (1,649) -- Change in net unrealized appreciation or depreciation of: Investments ..................................................... 9,749 10,939 6,805 1,405 Futures contracts ............................................... 13,090 877 1,680 -- -------- -------- -------- -------- NET GAIN (LOSS) ON INVESTMENTS .................................. (24,885) (2,200) 806 (631) -------- -------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .......... $(10,416) $ (1,807) $ 1,228 $ (626) ========= ========= ======== ========= A Foreign taxes .......................................................... $ 25 $ -- $ 1 $ --
See accompanying notes 28 American Beacon Funds Statement of Changes in Net Assets (in thousands)
Balanced Fund Large Cap Growth Fund -------------------------- -------------------------- Six Months Six Months Ended Year Ended Ended Year Ended April 30, October 31, April 30, October 2009 2008 2009 31, 2008 ----------- ----------- ----------- ----------- (unaudited) (unaudited) Increase (Decrease) in Net Assets: Operations: Net investment income .............................. $ 14,469 $ 35,336 $ 393 $ 868 Net realized (loss) on investments, futures contracts, and foreign currency transactions .. (47,724) (67,673) (14,016) (14,713) Change in net unrealized appreciation or depreciation of investments, futures contracts, and foreign currency translations ............. 22,839 (277,483) 11,816 (24,338) ----------- ----------- ----------- ----------- Net (decrease) in net assets resulting from operations .................................... (10,416) (309,820) (1,807) (38,183) ----------- ----------- ----------- ----------- Distributions to Shareholders: Net investment income: Institutional Class .............................. (1,697) (1,424) (1) (1) Investor Class ................................... (4,916) (5,471) -- -- Advisor Class .................................... -- (318) -- -- AMR Class ........................................ (28,892) (27,782) (836) (791) Net realized gain on investments: Institutional Class .............................. -- (2,559) -- (3) Investor Class ................................... -- (10,490) -- -- Advisor Class .................................... -- (602) -- -- AMR Class ........................................ -- (45,704) -- (2,748) ----------- ----------- ----------- ----------- Net distributions to shareholders ............. (35,505) (94,350) (837) (3,543) ----------- ----------- ----------- ----------- Capital Share Transactions: Proceeds from sales of shares ...................... 35,574 83,795 8,034 34,857 Reinvestment of dividends and distributions ........ 35,347 93,808 837 3,543 Cost of shares redeemed ............................ (74,019) (181,757) (7,416) (41,432) ----------- ----------- ----------- ----------- Net increase (decrease) in net assets from capital share transactions .................... (3,098) (4,154) 1,455 (3,032) ----------- ----------- ----------- ----------- Net (decrease) in net assets ............................. (49,019) (408,324) (1,189) (44,758) ----------- ----------- ----------- ----------- Net Assets: Beginning of period ................................ 753,913 1,162,237 57,059 101,817 ----------- ----------- ----------- ----------- End of Period * .................................... $ 704,894 $ 753,913 $ 55,870 $ 57,059 =========== =========== =========== =========== *Includes undistributed net investment income (loss) of .. $ 6,386 $ 27,287 $ 164 $ 610 =========== =========== =========== ===========
See accompanying notes 29 American Beacon Funds Statements of Changes in Net Assets (in thousands)
Small Cap Value Mid-Cap Value Fund Opportunity Fund -------------------------- -------------------------- Six Months Six Months Ended Year Ended Ended Year Ended April 30, October April 30, October 2009 31, 2008 2009 31, 2008 ----------- ----------- ----------- ----------- (unaudited) (unaudited) Increase (Decrease) in Net Assets: Operations: Net investment income .............................. $ 422 $ 1,382 $ 5 $ 104 Net realized (loss) on investments, futures contracts, and foreign currency transactions .. (7,679) (12,043) (2,036) (4,266) Change in net unrealized appreciation or depreciation of investments, futures contracts, and foreign currency translations ............. 8,485 (31,024) 1,405 312 ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations ............................... 1,228 (41,685) (626) (3,850) ----------- ----------- ----------- ----------- Distributions to Shareholders: Net investment income: Institutional Class .............................. (42) (84) (85) (134) Investor Class ................................... (285) (326) (2) (1) AMR Class ........................................ (838) (1,140) -- -- Net realized gain on investments: Institutional Class .............................. -- (405) -- -- Investor Class ................................... -- (2,179) -- -- AMR Class......................................... -- (4,985) -- -- ----------- ----------- ----------- ----------- Net distributions to shareholders ............. (1,165) (9,119) (87) (135) ----------- ----------- ----------- ----------- Capital Share Transactions: Proceeds from sales of shares ...................... 9,733 30,505 344 1,610 Reinvestment of dividends and distributions ........ 1,163 9,098 87 135 Cost of shares redeemed ............................ (9,179) (63,782) (3,746) (23,073) Redemption fees .................................... 11 43 -- -- ----------- ----------- ----------- ----------- Net increase (decrease) in net assets from capital share transactions .................... 1,728 (24,136) (3,315) (21,328) ----------- ----------- ----------- ----------- Net increase (decrease) in net assets .................... 1,791 (74,940) (4,028) (25,313) ----------- ----------- ----------- ----------- Net Assets: Beginning of period ................................ 53,060 128,000 4,374 29,687 ----------- ----------- ----------- ----------- End of Period * .................................... $ 54,851 $ 53,060 $ 346 $ 4,374 =========== =========== =========== =========== *Includes undistributed net investment income (loss) of .. $ 183 $ 937 $ (19) $ 65 =========== =========== =========== ===========
See accompanying notes 30 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (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, and the American Beacon Small Cap Value Opportunity 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 Lighthouse Holdings, Inc., and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors. The American Beacon Small Cap Value Opportunity Fund closed on May 29, 2009. Class Disclosure Prior to March 1, 2009, the Investor and Advisor Classes were known as the PlanAhead and Service Classes, respectively. Each 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: - ------ ----------- INSTITUTIONAL CLASS Investors making an initial investment of $2 million INVESTOR CLASS General public and investors investing through an intermediary ADVISOR CLASS Investors investing through an intermediary AMR CLASS Investors in the tax-exempt retirement and benefit plans of AMR Corporation and its affiliates
Administrative service fees, service fees and distribution fees vary amongst the classes as described more fully in footnote 2. 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. 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. 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. 31 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (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"). The Funds adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), effective with the beginning of the Fund's fiscal year. The 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. The three levels of the hierarchy under FAS 157 are described below: Level 1 - Quoted prices in active markets for identical securities. Level 2 - Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. Level 3 - Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. A summary of the inputs used to value each Fund's investments as of April 30, 2009 is as follows (in thousands): Balanced Fund
Investments Other Financial Valuation Inputs in Securities Instruments* ---------------- ------------- --------------- Level 1 - Quoted prices........................ $492,129 $3,328 Level 2 - Other significant observable inputs.. 214,754 -- Level 3 - Significant unobservable inputs..... -- -- -------- ------ Total.......................................... $706,883 $3,328 -------- ------
Large Cap Growth Fund
Investments Other Financial Valuation Inputs in Securities Instruments* ---------------- ------------- --------------- Level 1 - Quoted prices........................ $55,188 $103 Level 2 - Other significant observable inputs.. 614 -- Level 3 - Significant unobservable inputs..... -- -- ------- ---- Total.......................................... $55,802 $103 ------- ----
Mid-Cap Value Fund
Investments Other Financial Valuation Inputs in Securities Instruments* ---------------- ------------- --------------- Level 1 - Quoted prices........................ $56,175 $290 Level 2 - Other significant observable inputs.. 601 -- Level 3 - Significant unobservable inputs..... -- -- ------- ---- Total.......................................... $56,776 $290 ------- ----
Small Cap Value Opportunity Fund
Investments Other Financial Valuation Inputs in Securities Instruments* ---------------- ------------- --------------- Level 1 - Quoted prices........................ $353 $-- Level 2 - Other significant observable inputs.. -- -- Level 3 - Significant unobservable inputs...... -- -- ---- --- Total.......................................... $353 $-- ---- ---
- ---------- * Other financial instruments are futures. 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 32 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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. Futures Contracts Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Funds may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations. Upon entering into a futures contract, the 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 Funds 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 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. 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. 33 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) Recently Issued Accounting Pronouncements In March 2008, FASB issued Statement on Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("FAS 161"), which is effective for fiscal years and interim periods beginning after November 15, 2008. FAS 161 requires enhanced disclosures about derivative and hedging activities, including how such activities are accounted for and their effect on financial position, performance and cash flows. The Manager is currently evaluating the impact the adoption of FAS 161 will have on the Funds' financial statements and related disclosures. 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 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 Funds an annualized fee equal to 0.05% 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 is one of the investment advisors of the Balanced Fund and receives an annualized fee of 0.15% on the portion of assets managed by the Manager. Management fees paid during the six months ended April 30, 2009 were as follows (dollars in thousands):
AMOUNTS PAID TO NET AMOUNTS MANAGEMENT FEE RATE MANAGEMENT FEE INVESTMENT ADVISORS RETAINED BY MANAGER ------------------- -------------- ------------------- ------------------- Balanced..................... 0.225%-0.70% $727 $556 $171 Large Cap Growth............. 0.35%-0.55% 112 99 13 Mid-Cap Value................ 0.35%-1.10% 154 142 12 Small Cap Value Opportunity.. 0.45%-0.55% 5 4 1
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, 2009, securities lending fees paid to the Manager were as follows (in thousands): Balanced..................... $69 Large Cap Growth............. 7 Mid-Cap Value................ 7
34 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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 0.30% of the average daily net assets of the Institutional, Investor, and Advisor Classes and 0.05% of the average daily net assets of the AMR Class of each of the Funds. Distribution Plans The Trust, except for the Advisor 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 Advisor 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 Advisor Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance. Service Plans The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor and Advisor Classes. As compensation for performing the duties required under the Service Plans, the Manager receives up to 0.375% of the average daily net assets of the Investor Class and 0.25% of the average daily net assets of the Advisor Class of each Fund. Brokerage Commissions Affiliated entities of an investment advisor to the Large Cap Growth Fund received net commissions on purchases and sales of the Fund's portfolio securities totaling $628 for the six months ended April 30, 2009. Investment in Affiliated Funds The Funds may invest in the American Beacon Money Market (the "MM Select Fund) or US Government Money Market Select Fund (the USG Select Fund) (collectively the "Select Funds"). Cash collateral received by certain Funds in connection with securities lending may be invested in the Select Funds. The Funds and the Select Funds have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the Select Funds and receives from each Select Fund an annualized fee of 0.09% of its average daily net assets. During the six months ended April 30, 2009, fees earned by the Manager as a result of the Funds' investment in the Select Funds were as follows:
SECURITIES LENDING DIRECT INVESTMENT IN COLLATERAL INVESTED IN AFFILIATED FUNDS AFFILIATED FUNDS TOTAL -------------------- ---------------------- ------ Balanced..................... $3,809 $5,989 $9,798 Large Cap Growth............. -- 628 628 Mid-Cap Value................ 470 585 1,055 Small Cap Value Opportunity.. 10 33 43
35 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) Interfund Lending Program Pursuant to an exemptive order by the Securities Exchange Commission ("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. During the six months ended April 30, 2009, 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, 2009, the Manager waived or reimbursed expenses as follows:
Expense Cap ----------------------- 11/1/08 3/1/09 WAIVED OR TO TO REIMBURSED FUND CLASS 2/28/09 4/30/09 EXPENSES - ---- ------------- ------- ------- ---------- Large Cap Growth............. Institutional 0.90% -- $ 21 Mid-Cap Value................ Institutional 0.98% 0.98% 1,661 Mid-Cap Value................ Investor 1.23% 1.23% 9,568 Mid-Cap Value................ Advisor 1.50% 1.50% 3 Small Cap Value Opportunity.. Institutional 1.05% 1.05% 14,245 Small Cap Value Opportunity.. Investor 1.30% 1.30% 5,287
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. During the six months ended April 30, 2009, the Funds have not recorded a liability for potential reimbursement, due to the current assessment that a reimbursement is unlikely. 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 November 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, 2008 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. 36 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) The tax character of distributions paid during the six months ended April 30, 2009 and fiscal year ended October 31, 2008 were as follows (in thousands):
BALANCED LARGE CAP GROWTH ------------------------ ------------------------ SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED APRIL 30, OCTOBER APRIL 30, OCTOBER 2009 31, 2008 2009 31, 2008 ----------- ---------- ----------- ---------- (UNAUDITED) (UNAUDITED) DISTRIBUTIONS PAID FROM: ORDINARY INCOME* Institutional Class ...... $ 1,697 $ 1,997 $ 1 $ 1 Investor Class ........... 4,916 7,821 -- -- Advisor Class ............ -- 453 -- -- AMR Class ................ 28,892 38,025 836 791 LONG-TERM CAPITAL GAIN Institutional Class ...... -- 1,986 -- 3 Investor Class ........... -- 8,140 -- -- Advisor Class ............ -- 467 -- -- AMR Class ................ -- 35,461 -- 2,748 ------- ------- ---- ------- TOTAL DISTRIBUTIONS PAID .... $35,505 $94,350 $837 $ 3,543 ======= ======= ==== =======
MID-CAP VALUE SMALL CAP VALUE OPPORTUNITY ------------------------ --------------------------- SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED APRIL 30, OCTOBER APRIL 30, OCTOBER 2009 31, 2008 2009 31, 2008 ----------- ---------- ----------- ---------- (UNAUDITED) (UNAUDITED) DISTRIBUTIONS PAID FROM: ORDINARY INCOME* Institutional Class ...... $ 42 $ 139 $85 $134 Investor Class ........... 285 618 2 1 Advisor Class ............ -- -- -- -- AMR Class ................ 838 1,809 -- -- LONG-TERM CAPITAL GAIN Institutional Class ...... -- 350 -- -- Investor Class ........... -- 1,887 -- -- Advisor Class ............ -- -- -- -- AMR Class ................ -- 4,316 -- -- ------ ------ --- ---- TOTAL DISTRIBUTIONS PAID .... $1,165 $9,119 $87 $135 ====== ====== === ====
* For tax purposes, short-term capital gains are considered ordinary income distributions. As of April 30, 2009, the components of distributable earnings on a tax basis were as follows (in thousands):
SMALL CAP VALUE BALANCED LARGE CAP GROWTH MID-CAP VALUE OPPORTUNITY --------- ---------------- ------------- --------------- Cost basis of investments for federal income tax purpose .. $ 836,594 $ 57,803 $ 78,186 $ 363 Unrealized appreciation ................................... 32,514 4,053 1,830 -- Unrealized depreciation ................................... (162,225) (6,054) (23,240) (10) --------- -------- -------- ------- Net unrealized appreciation (depreciation) ................ (129,711) (2,001) (21,410) (10) Undistributed ordinary income ............................. 6,981 166 183 -- Undistributed long-term gain (loss) ....................... (104,024) (28,052) (19,223) (6,629) --------- -------- -------- ------- Distributable earnings (losses) ........................... $(226,754) $(29,887) $(40,450) $(6,639) ========= ======== ======== =======
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 37 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) derivative instruments, book amortization for premiums, 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 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, 2009 (in thousands):
SMALL CAP LARGE CAP MID-CAP VALUE BALANCED GROWTH VALUE OPPORTUNITY -------- --------- ------- ----------- Paid-in-capital ....................... $ 165 $ 2 $ (9) $(1) Undistributed net investment income ... 135 (2) (11) (2) Accumulated net realized gain (loss) .. (302) -- 20 3 Unrealized appreciation (depreciation) of investments, futures contracts and foreign currency ..... -- -- -- --
At April 30, 2009 capital loss carry forward positions for federal income tax purposes were as follows (in thousands):
FUND 2015 2016 2017 TOTAL - ---- ---- ------- ------- -------- Balanced ..................... $ -- $68,541 $35,483 $104,024 Large Cap Growth ............. -- 15,053 12,999 28,052 Mid-Cap Value ................ -- 13,378 5,845 19,223 Small Cap Value Opportunity .. 313 4,273 2,043 6,629
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, 2009 were as follows (in thousands):
LARGE CAP MID-CAP SMALL CAP VALUE BALANCED GROWTH VALUE OPPORTUNITY -------- ------- ------- --------------- Purchases (excluding U.S. government securities) $181,758 $64,450 $21,184 $1,897 Sales and maturities (excluding U.S. government securities) 154,777 56,440 9,055 5,177 Purchases of U.S. government securities 54,369 -- -- -- Sales and maturities of U.S. government securities 59,124 -- -- --
A summary of the Funds' direct transactions in the Select Funds for the six months ended April 30, 2009 is set forth below (in thousands):
OCTOBER 31, 2008 APRIL 30, 2009 AFFILIATE SHARES/MARKET VALUE PURCHASES SALES SHARES/MARKET VALUE --------------- ------------------- --------- ------- ------------------- Balanced ..................... MM Select Fund $34,006 $ -- $34,006 $ -- Balanced ..................... USG Select Fund -- 5,000 -- 5,000 Large Cap Growth ............. MM Select Fund 3,451 -- 3,451 -- Mid-Cap Value ................ MM Select Fund 4,196 -- 4,196 -- Small Cap Value Opportunity .. MM Select Fund 90 -- 90 --
38 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral. The amount of the temporary difference at April 30, 2009, is disclosed as the calculated mark in the table below. To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the "Agent") in money market mutual funds, and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities lending income is generated from the demand premium (if any) by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Funds, the Agent and the Manager retain 75%, 15%, and 10%, respectively, of the income generated from securities lending. While securities are on loan the Funds continue to receive any income associated with that security and any gain or loss in the market price that may occur during the term of the loan. Securities lending transactions pose certain risks to the Funds, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Funds could also experience delays and costs in gaining access to the collateral. The Funds bear the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default. As of April 30, 2009, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):
CASH COLLATERAL MARKET VALUE OF NON-CASH POSTED BY CALCULATED TOTAL VALUE OF FUND SECURITIES ON LOAN COLLATERAL BORROWER MARK COLLATERAL - ---- ------------------ ---------- --------------- ---------- -------------- Balanced ....... $5,501 $-- $5,636 4 $5,640 Mid-Cap Value .. 1,326 -- 1,378 (7) 1,371
Cash collateral is listed on each Fund's Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in Income derived from securities lending in the Statements of Operations. Non-cash collateral received by the Funds may not be sold or repledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Funds' Schedules of Investments or Statements of Assets and Liabilities. 39 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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, 2009
INSTITUTIONAL INVESTOR ADVISOR CLASS CLASS CLASS AMR CLASS ---------------- ----------------- --------------- ----------------- BALANCED FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - ------------- ------ ------- ------ -------- ------ ------ ------ -------- Shares sold ..................... 929 $ 9,119 990 $ 8,999 46 $ 428 1,796 $ 17,028 Reinvestment of dividends ....... 170 1,684 517 4,771 -- -- 3,048 28,892 Shares redeemed ................. (570) (5,441) (1,823) (16,378) (93) (880) (5,428) (51,320) ---- ------- ------ -------- --- ----- ------ -------- Net increase (decrease) in shares outstanding .................. 529 $ 5,362 (316) $ (2,608) (47) $(452) (584) $ (5,400) ==== ======= ====== ======== === ===== ====== ========
INSTITUTIONAL CLASS AMR CLASS --------------- ---------------- LARGE CAP GROWTH FUND SHARES AMOUNT SHARES AMOUNT - --------------------- ------ ------ ------ ------- Shares sold ......................... -- $ 1 1,975 $ 8,033 Reinvestment of dividends ........... -- 1 205 836 Shares redeemed ..................... -- (2) (1,847) (7,414) --- --- ------ ------- Net increase in shares outstanding .. -- $-- 333 $ 1,455 === === ====== =======
INSTITUTIONAL CLASS INVESTOR CLASS ADVISOR CLASS AMR CLASS --------------- ---------------- --------------- ---------------- MID-CAP VALUE FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - ------------------ ------ ------ ------ ------- ------ ------ ------ ------- Shares sold ..................... 11 $ 61 525 $ 2,873 -- $-- 1,247 $ 6,799 Reinvestment of dividends ....... 7 41 52 284 -- -- 153 838 Shares redeemed ................. (87) (451)* (685) (3,585)* -- --* (999) (5,132)* ---- ----- ---- -------- --- --- ----- ------- Net increase (decrease) in shares outstanding .................. (69) $(349) (108) $ (428) -- $-- 401 $ 2,505 ==== ===== ==== ======== === === ===== =======
* Net of Redemption Fees
INSTITUTIONAL CLASS INVESTOR CLASS ---------------- --------------- SMALL CAP VALUE OPPORTUNITY FUND SHARES AMOUNT SHARES AMOUNT - -------------------------------- ------ ------- ------ ------ Shares sold ..................... 30 $ 170 31 $174 Reinvestment of dividends ....... 13 85 -- 2 Shares redeemed ................. (664) (3,739) (1) (7) ---- ------- --- ---- Net increase (decrease) in shares outstanding .................. (621) $(3,484) 30 $169 ==== ======= === ====
PERIOD ENDED OCTOBER 31, 2008
INSTITUTIONAL CLASS INVESTOR CLASS ADVISOR CLASS AMR CLASS ----------------- ----------------- ---------------- ----------------- BALANCED FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - ------------- ------ -------- ------ -------- ------ ------- ------ -------- Shares sold ..................... 1,198 $ 16,083 2,230 $ 28,546 297 $ 3,951 2,713 $ 35,215 Reinvestment of dividends ....... 272 3,895 1,160 15,508 70 920 5,368 73,485 Shares redeemed ................. (1,225) (16,311) (6,179) (76,210) (218) (2,729) (6,818) (86,507) ------ -------- ------ -------- ---- ------- ------ -------- Net increase (decrease) in shares outstanding .................. 245 $ 3,667 (2,789) $(32,156) 149 $ 2,142 1,263 $ 22,193 ====== ======== ====== ======== ==== ======= ====== ========
40 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED)
INSTITUTIONAL CLASS AMR CLASS --------------- ----------------- LARGE CAP GROWTH FUND SHARES AMOUNT SHARES AMOUNT - --------------------- ------ ------ ------ -------- Shares sold .................................... 4 $22 5,386 $ 34,835 Reinvestment of dividends ...................... -- 4 492 3,539 Shares redeemed ................................ (1) (8) (6,432) (41,424) --- --- ------ ======== Net increase (decrease) in shares outstanding .. 3 $18 (554) $ (3,050) === === ====== ========
INSTITUTIONAL CLASS INVESTOR CLASS ADVISOR CLASS AMR CLASS ---------------- ----------------- --------------- ----------------- MID-CAP VALUE FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - ------------------ ------ ------- ------ -------- ------ ------ ------ -------- Shares sold ........................... 322 $ 2,868 1,423 $ 12,385 -- $-- 1,756 $ 15,252 Reinvestment of dividends ............. 50 469 263 2,504 -- -- 641 6,125 Shares redeemed ....................... (541) (4,589)* (2,825) (25,705)* -- --* (3,772) (33,445)* ---- ------- ------ -------- --- --- ------ -------- Net (decrease) in shares outstanding .. (169) $(1,252) (1,139) $(10,816) -- $-- (1,375) $(12,068) ==== ======= ====== ======== === === ====== ========
* Net of Redemption Fees
INSTITUTIONAL CLASS INVESTOR CLASS ----------------- --------------- SMALL CAP VALUE OPPORTUNITY FUND SHARES AMOUNT SHARES AMOUNT - -------------------------------- ------ -------- ------ ------ Shares sold .................................... 164 $ 1,406 24 $ 204 Reinvestment of dividends ...................... 14 134 -- 1 Shares redeemed ................................ (2,405) (22,928) (17) (145) ------ -------- --- ----- Net increase (decrease) in shares outstanding .. (2,227) $(21,388) 7 $ 60 ====== ======== === =====
41 AMERICAN BEACON BALANCED FUND FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class ------------------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ----------------------------------------------- 2009 2008 2007 2006 2005 2004 ----------- ------- ------- ------- ------- ------ (unaudited) Net asset value, beginning of period ............. $ 10.63 $ 16.09 $ 15.83 $ 15.00 $ 14.31 $12.99 ------- ------- ------- ------- ------- ------ Income from investment operations: Net investment income(A) ...................... 0.20 0.47 0.50 0.39 0.36 0.29 Net gains (losses) on securities (both realized and unrealized) ................... (0.33) (4.70) 0.90 1.54 1.11 1.36 ------- ------- ------- ------- ------- ------ Total income (loss) from investment operations ... (0.13) (4.23) 1.40 1.93 1.47 1.65 ------- ------- ------- ------- ------- ------ Less distributions: Dividends from net investment income .......... (0.48) (0.44) (0.42) (0.38) (0.31) (0.33) Distributions from net realized gains on securities ................................. -- (0.79) (0.72) (0.72) (0.47) -- ------- ------- ------- ------- ------- ------ Total distributions .............................. (0.48) (1.23) (1.14) (1.10) (0.78) (0.33) ------- ------- ------- ------- ------- ------ Net asset value, end of period ................... $ 10.02 $ 10.63 $ 16.09 $ 15.83 $ 15.00 $14.31 ======= ======= ======= ======= ======= ====== Total return ..................................... (1.21)%(B) (28.23)% 9.31% 13.60% 12.78% 10.53% ======= ======= ======= ======= ======= ====== Ratios and supplemental data: Net assets, end of period (in thousands) ..... $39,781 $36,557 $51,399 $22,587 $14,122 $8,378 Ratios to average net assets (annualized): Expenses, net of waivers ...................... 0.57% 0.56% 0.57% 0.59% 0.56% 0.63% Expenses, before waivers ...................... 0.57% 0.56% 0.57% 0.59% 0.56% 0.63% Net investment income, net of waivers ......... 4.05% 3.37% 2.91% 2.81% 2.45% 2.15% Net investment income (loss), before waivers .. 4.05% 3.37% 2.91% 2.81% 2.45% 2.15% Portfolio turnover rate ....................... 33%(B) 53% 50% 59% 58% 62% Investor Class --------------------------------------------- Six Months Ended Year Ended October 31, April 30, ------------------------------- 2009 2008 2007 2006 ----------- -------- -------- -------- (unaudited) Net asset value, beginning of period ............. $ 9.91 $ 15.09 $ 14.91 $ 14.20 ------- -------- -------- -------- Income from investment operations: Net investment income(A) ...................... 0.18 0.41 0.41 0.35 Net gains (losses) on securities (both realized and unrealized) ................... (0.31) (4.39) 0.87 1.44 ------- -------- -------- -------- Total income (loss) from investment operations ... (0.13) (3.98) 1.28 1.79 ------- -------- -------- -------- Less distributions: Dividends from net investment income .......... (0.48) (0.41) (0.38) (0.36) Distributions from net realized gains on securities ................................. -- (0.79) (0.72) (0.72) ------- -------- -------- -------- Total distributions .............................. (0.48) (1.20) (1.10) (1.08) ------- -------- -------- -------- Net asset value, end of period ................... $ 9.30 $ 9.91 $ 15.09 $ 14.91 ======= ======== ======== ======== Total return ..................................... (1.32)%(B) (28.39)% 9.06% 13.31% ======= ======== ======== ======== Ratios and supplemental data: Net assets, end of period (in thousands) ..... $96,083 $105,473 $202,750 $111,837 Ratios to average net assets (annualized): Expenses, net of waivers ...................... 0.84% 0.82% 0.83% 0.85% Expenses, before waivers ...................... 0.84% 0.82% 0.83% 0.85% Net investment income, net of waivers ......... 3.80% 3.12% 2.65% 2.55% Net investment income (loss), before waivers .. 3.80% 3.12% 2.65% 2.55% Portfolio turnover rate ....................... 33%(B) 53% 50% 59%
(A) Through October 31, 2005, net investment income was calculated by subtracting class expenses per share from the Fund's net investment income per share before class expenses. (B) Not annualized. (C) Annualized. (D) Portfolio turnover rate is for the period from November 1, 2004 through October 31, 2005. 42
Advisor Class - ----------------- ------------------------------------------------------ Six Months Ended Year Ended October 31, May 31 to April 30, -------------------------- October 31, 2005 2004 2009 2008 2007 2006 2005 - ------- ------- ----------- ------- ------ ------ ----------- (unaudited) $ 13.62 $ 12.40 $ 9.77 $ 14.95 $14.83 $14.16 $ 13.96 - ------- ------- ------ ------- ------ ------ -------- 0.34 0.27 0.05 0.34 0.41 0.38 0.09 1.01 1.25 (0.18) (4.31) 0.83 1.35 0.11 - ------- ------- ------ ------- ------ ------ -------- 1.35 1.52 (0.13) (3.97) 1.24 1.73 0.20 - ------- ------- ------ ------- ------ ------ -------- (0.30) (0.30) -- (0.42) (0.40) (0.34) -- (0.47) -- -- (0.79) (0.72) (0.72) -- - ------- ------- ------ ------- ------ ------ -------- (0.77) (0.30) -- (1.21) (1.12) (1.06) -- - ------- ------- ------ ------- ------ ------ -------- $ 14.20 $ 13.62 $ 9.64 $ 9.77 $14.95 $14.83 $ 14.16 ======= ======= ====== ======= ====== ====== ======== 10.12% 12.44% (1.43)%(B) (28.58)% 8.76% 13.01% 1.43%(B) ======= ======= ====== ======= ====== ====== ======== $86,875 $21,571 $7,115 $ 7,674 $9,504 $1,562 $ 1 0.86% 0.93% 1.07% 1.07% 1.07% 1.22% 1.09%(C) 0.86% 0.93% 1.07% 1.07% 1.07% 1.22% 360.24%(C) 2.14% 1.84% 3.56% 2.86% 2.34% 2.18% 1.52%(C) 2.14% 1.84% 3.56% 2.86% 2.34% 2.17% (357.63)%(C) 58% 62% 33%(B) 53% 50% 59% 58%(D) AMR Class - -------------------------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ----------------------------------------------------- 2009 2008 2007 2006 2005 2004 - ----------- -------- -------- -------- -------- -------- (unaudited) $ 10.19 $ 15.49 $ 15.27 $ 14.49 $ 13.87 $ 12.60 - -------- -------- -------- -------- -------- -------- 0.22 0.49 0.50 0.45 0.39 0.32 (0.33) (4.52) 0.89 1.46 1.05 1.31 - -------- -------- -------- -------- -------- -------- (0.11) (4.03) 1.39 1.91 1.44 1.63 - -------- -------- -------- -------- -------- -------- (0.51) (0.48) (0.45) (0.41) (0.35) (0.36) -- (0.79) (0.72) (0.72) (0.47) -- - -------- -------- -------- -------- -------- -------- (0.51) (1.27) (1.17) (1.13) (0.82) (0.36) - -------- -------- -------- -------- -------- -------- $ 9.57 $ 10.19 $ 15.49 $ 15.27 $ 14.49 $ 13.87 ======== ======== ======== ======== ======== ======== (1.04)%(B) (28.08)% 9.59% 13.98% 10.63% 13.13% ======== ======== ======== ======== ======== ======== $561,915 $604,209 $898,584 $817,333 $712,073 $636,420 0.32% 0.31% 0.31% 0.33% 0.33% 0.37% 0.32% 0.31% 0.31% 0.33% 0.33% 0.37% 4.33% 3.62% 3.21% 3.08% 2.70% 2.40% 4.33% 3.62% 3.21% 3.08% 2.70% 2.40% 33%(B) 53% 50% 59% 58% 62%
43 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, ----------------------------------------------- 2009(C) 2008 2007 2006(A) 2005 2004 ----------- ------- ------ ------- ------ ------- (unaudited) Net asset value, beginning of period ............. $ 4.49 $ 7.67 $ 6.89 $ 6.18 $ 5.82 $ 5.47 ------- ------- ------ ------ ------ ------- Income from investment operations: Net investment income ......................... 0.03 0.05 0.04 0.04 0.04 0.02 Net gains (losses) on securities (both realized and unrealized) ................... (0.18) (2.97) 0.77 0.70 0.37 0.35 ------- ------- ------ ------ ------ ------- Total income (loss) from investment operations ... (0.15) (2.92) 0.81 0.74 0.41 0.37 ------- ------- ------ ------ ------ ------- Less distributions: Dividends from net investment income .......... (0.05) (0.04) (0.03) (0.03) (0.05) (0.02) Distributions from net realized gains on securities ................................. -- (0.22) -- -- -- -- ------- ------- ------ ------ ------ ------- Total distributions .............................. (0.05) (0.26) (0.03) (0.03) (0.05) (0.02) ------- ------- ------ ------ ------ ------- Net asset value, end of period ................... $ 4.29 $ 4.49 $ 7.67 $ 6.89 $ 6.18 $ 5.82 ======= ======= ====== ====== ====== ======= Total return ..................................... (3.03)%(B) (39.48)% 11.84% 12.04% 7.06% 6.71% ======= ======= ====== ====== ====== ======= Ratios and supplemental data: Net assets, end of period (in thousands) ...... $ 79 $ 83 $ 119 $ 110 $ 105 $ 1 Ratios to average net assets (annualized): Expenses, net of waivers ...................... 0.88% 0.89% 0.90% 0.90% 0.89% 0.84% Expenses, before waivers ...................... 0.94% 0.95% 1.06% 0.99% 4.64% 13.22% Net investment income (loss), net of waivers .. 1.22% 0.74% 0.58% 0.56% (0.18)% 0.18% Net investment income (loss), before waivers .. 1.17% 0.68% 0.42% 0.48% (3.93)% (12.20)% Portfolio turnover rate ....................... 119%(B) 112% 128% 181% 164% 131%
(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. (C) On March 17, 2009, Winslow Capital Management, Inc. assumed management of the Large Cap Growth Fund's assets previously managed by Goldman Sachs Asset Management, L.P. 44
AMR Class - --------------------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ------------------------------------------------- 2009(C) 2008 2007 2006(A) 2005 2004 - ----------- ------- -------- ------- ------- ------- (unaudited) $ 4.52 $ 7.72 $ 6.95 $ 6.21 $ 5.84 $ 5.48 - ------- ------- -------- ------- ------- ------- 0.03 0.07 0.06 0.05 0.06 0.02 (0.17) (2.99) 0.77 0.73 0.36 0.36 - ------- ------- -------- ------- ------- ------- (0.14) (2.92) 0.83 0.78 0.42 0.38 - ------- ------- -------- ------- ------- ------- (0.07) (0.06) (0.06) (0.04) (0.05) (0.02) -- (0.22) -- -- -- -- - ------- ------- -------- ------- ------- ------- (0.07) (0.28) (0.06) (0.04) (0.05) (0.02) - ------- ------- -------- ------- ------- ------- $ 4.31 $ 4.52 $ 7.72 $ 6.95 $ 6.21 $ 5.84 ======= ======= ======== ======= ======= ======= (3.06)%(B) (39.17)% 12.07% 12.52% 7.22% 6.88% ======= ======= ======== ======= ======= ======= $55,791 $56,976 $101,698 $82,042 $63,183 $55,121 0.57% 0.59% 0.60% 0.59% 0.64% 0.71% 0.57% 0.59% 0.60% 0.59% 0.64% 0.71% 1.53% 1.05% 0.85% 0.88% 0.98% 0.34% 1.53% 1.05% 0.85% 0.88% 0.98% 0.34% 119%(B) 112% 128% 181% 164% 131%
45 AMERICAN BEACON MID-CAP VALUE FUND FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class Investor Class --------------------------------------- ---------------------------------------- Six November Six Months Year Ended 30, 2005 Months Year Ended February Ended October 31, to Ended October 31, 28 to April 30, ---------------- October April 30, ----------------- October 2009 2008 2007 31, 2006 2009 2008 2007 31, 2006 ----------- ------- ------ -------- ----------- ------- ------- -------- (unaudited) (unaudited) Net asset value, beginning of period ........ $ 5.94 $ 11.01 $10.81 $12.09 $ 5.91 $ 10.96 $ 10.80 $ 9.80 ------ ------- ------ ------ ------- ------- ------- ------- Income from investment operations: Net investment income .................... 0.06 0.16 0.12 0.21 0.05 0.14 0.10 0.01 Net gains (losses) on securities (both realized and unrealized) .............. 0.12 (4.31) 0.41 1.25 0.13 (4.31) 0.40 0.99 ------ ------- ------ ------ ------- ------- ------- ------- Total income (loss) from investment operations ............................... 0.18 (4.15) 0.53 1.46 0.18 (4.17) 0.50 1.00 ------ ------- ------ ------ ------- ------- ------- ------- Less distributions: Dividends from net investment income ..... (0.12) (0.16) (0.07) (0.16) (0.11) (0.11) (0.08) -- Distributions from net realized gains on securities ......................... -- (0.76) (0.26) (2.58) -- (0.76) (0.26) -- ------ ------- ------ ------ ------- ------- ------- ------- Total distributions ......................... (0.12) (0.92) (0.33) (2.74) (0.11) (0.87) (0.34) -- ------ ------- ------ ------ ------- ------- ------- ------- Redemption fees added to beneficial interests ................................ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Net asset value, end of period .............. $ 6.00 $ 5.94 $11.01 $10.81 $ 5.98 $ 5.92 $ 10.96 $ 10.80 ====== ======= ====== ====== ======= ======= ======= ======= Total return ................................ 3.40%(C) (40.96)% 4.87% 15.30%(C) 3.22%(C) (41.14)% 4.68% 10.20%(C) ====== ======= ====== ====== ======= ======= ======= ======= Ratios and supplemental data: Net assets, end of period (in thousands) ............................ $1,869 $ 2,256 $6,047 $3,396 $16,094 $16,550 $43,158 $27,240 Ratios to average net assets (annualized): Expenses, net of waivers ................. 0.98% 0.98% 0.92% 1.19%(D) 1.23% 1.23% 1.23% 1.49%(D) Expenses, before waivers ................. 1.16% 1.16% 1.09% 1.19%(D) 1.36% 1.32% 1.26% 1.61%(D) Net investment income, net of waivers .... 1.75% 1.51% 1.22% 1.11%(D) 1.48% 1.27% 0.93% 0.57%(D) Net investment income, before waivers .... 1.57% 1.33% 1.05% 1.11%(D) 1.35% 1.18% 0.90% 0.44%(D) Portfolio turnover rate .................. 21%(C) 28% 35% 42%(E) 21%(C) 28% 35% 42%(E)
(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. 46
AMR Class (formerly Institutional Class Advisor Class prior to December 1, 2005)(A) - -------------------------------- --------------------------------------------------------------- Six Six Months Year June Months June Ended Ended 29 to Ended Year Ended October 31, 30 to April 30, October October April 30, -------------------------------------- October 2009 31, 2008 31, 2007 2009 2008 2007 2006 2005 31, 2004 - ----------- -------- -------- ----------- ------- ------- -------- ------- -------- (unaudited) (unaudited) $ 5.87 $ 10.94 $11.73 $ 5.97 $ 11.07 $ 10.87 $ 11.72 $ 10.27 $ 10.00 - ------ ------- ------ ------- ------- ------- ------- ------- ------- 0.06 0.10 0.01 0.05 0.18 0.18 0.12 0.13 0.02(B) 0.14 (4.27) (0.80) 0.14 (4.35) 0.36 1.75 1.37 0.25 - ------ ------- ------ ------- ------- ------- ------- ------- ------- 0.20 (4.17) (0.79) 0.19 (4.17) 0.54 1.87 1.50 0.27 - ------ ------- ------ ------- ------- ------- ------- ------- ------- (0.13) (0.14) -- (0.15) (0.17) (0.08) (0.14) (0.05) -- -- (0.76) -- -- (0.76) (0.26) (2.58) -- -- - ------ ------- ------ ------- ------- ------- ------- ------- ------- (0.13) (0.90) -- (0.15) (0.93) (0.34) (2.72) (0.05) -- - ------ ------- ------ ------- ------- ------- ------- ------- ------- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $ 5.94 $ 5.87 $10.94 $ 6.01 $ 5.97 $ 11.07 $ 10.87 $ 11.72 $ 10.27 ====== ======= ====== ======= ======= ======= ======= ======= ======= 3.61%(C) (41.24)% (6.65)%(C) 3.38%(C) (40.87)% 5.19% 19.16% 14.63% 2.70%(C) ====== ======= ====== ======= ======= ======= ======= ======= ======= $ 1 $ 1 $ 1 $36,887 $34,253 $78,794 $66,290 $44,342 $25,546 0.53% 1.50% 1.50%(D) 0.86% 0.82% 0.75% 0.97% 1.01% 1.14%(D) 1.55% 2.04% 1.80%(D) 0.86% 0.82% 0.75% 0.92% 1.02% 1.34%(D) 2.24% 1.02% 0.32%(D) 1.85% 1.68% 1.41% 1.38% 0.92% 0.73%(D) 1.22% 0.48% 0.02%(D) 1.85% 1.68% 1.40% 1.42% 0.91% 0.53%(D) 21%(C) 28% 35%(F) 21%(C) 28% 35% 42% 298% 6%(C)
47 AMERICAN BEACON SMALL CAP VALUE OPPORTUNITY FUND FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class ------------------------------------------ Year Ended October 31, Six Months Ended ---------------------- April 30, 2009 2008 2007 ---------------- ------- ------- (unaudited) Net asset value, beginning of period ................................ $ 6.69 $ 10.33 $ 10.26 ------- ------- ------- Income from investment operations: Net investment income (loss) ..................................... (0.14)(A) 0.09(A) 0.11(A) Net gains (losses) on securities (both realized and unrealized) .. (1.22)(A) (3.61)(A) - (A) ------- ------- ------- Total income (loss) from investment operations ...................... (1.36) (3.52) 0.11 ------- ------- ------- Less distributions: Dividends from net investment income ............................. (0.13) (0.12) (0.03) Distributions from net realized gains on securities .............. -- -- (0.01) ------- ------- ------- Total distributions ................................................. (0.13) (0.12) (0.04) ------- ------- ------- Net asset value, end of period ...................................... $ 5.20 $ 6.69 $ 10.33 ======= ======= ======= Total return ........................................................ (15.99)%(B) (34.49)% 1.08% ======= ======= ======= Ratios and supplemental data: Net assets, end of period (in thousands) ......................... $ 91 $ 4,268 $29,596 Ratios to average net assets (annualized): Expenses, net of waivers ......................................... 1.90% 1.05% 1.05% Expenses, before waivers ......................................... 3.63% 1.56% 1.27% Net investment income, net of waivers ............................ 0.50% 1.22% 0.96% Net investment income (loss), before waivers ..................... (1.24)% 0.71% 0.73% Portfolio turnover rate .......................................... 101%(B) 75% 58%
(A) Based upon average shares outstanding. (B) Not annualized. 48
Investor Class ----------------------------------------------------------- Year Ended October 31, March 31 to Six Months Ended ---------------------- March 31 to October 31, 2006 April 30, 2009 2008 2007 October 31, 2006 - ---------------- ---------------- ------- ------ ---------------- (unaudited) $10.00 $ 6.65 $ 10.28 $10.26 $ 10.00 ------ ------- ------- ------ ------- 0.01 0.15 0.10 0.14(A) 0.01 0.25 (1.20) (3.63) (0.05)(A) 0.25 ------ ------- ------- ------ ------- 0.26 (1.05) (3.53) 0.09 0.26 ------ ------- ------- ------ ------- -- (0.11) (0.10) (0.06) -- -- -- -- (0.01) -- ------ ------- ------- ------ ------- -- (0.11) (0.10) (0.07) -- ------ ------- ------- ------ ------- $10.26 $ 5.49 $ 6.65 $10.28 $ 10.26 ====== ======= ======= ====== ======= 2.60%(B) (16.07)%(B) (34.60)% 0.96% 2.60%(B) ====== ======= ======= ====== ======= $4,693 $ 250 $ 106 $ 91 $ 70 1.03% 1.31% 1.26% 1.30% 1.28% 6.12% 7.16% 1.82% 1.70% 20.05% 0.30% 0.94% 0.93% 0.97% 0.21% (4.80)% (4.91)% 0.37% 0.57% (18.56)% 32%(B) 101%(B) 75% 58% 32%(B)
49 RESULTS OF SHAREHOLDER MEETING (UNAUDITED) A special meeting of shareholders of the American Beacon Balanced Fund and the American Beacon Enhanced Income Fund (each a "Fund") of the American Beacon Funds (the "Trust") was held on February 13, 2009. The shareholders of the Funds were asked to vote on a proposal to approve and ratify an advisory fee under the current Investment Management Agreement between American Beacon Advisors, Inc. (the "Manager") and the Funds (the "Investment Management Agreement.") Shareholders previously approved the Investment Management Agreement at a special meeting held on August 22, 2008 in connection with the change of control of the Manager. The proxy statement provided to shareholders in connection with that meeting accurately disclosed that there were no proposed changes to the total aggregate fees payable to the Manager for management, advisory, securities lending and administrative services provided to the Funds. However, the advisory fee had been inadvertently omitted from the fee schedule to the form of the Investment Management Agreement and comparative fee table included as appendices to the proxy statement provided to shareholders in connection with that meeting. This proposal required a majority of shareholders of each Fund to achieve a quorum. The shareholders of the Funds passed the vote with the following results:
FUND FOR AGAINST ABSTAIN NON-VOTING ---- -------------- ------------ --------- ---------- Balanced 601,896,430.17 1,636,527.29 71,959.48 -0- Enhanced Income 83,387,906.04 24,152.10 -0- -0-
50 (This Page Intentionally left blank) 51 (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) BY E-MAIL: american_beacon.funds@ambeacon.com (GRAPHIC) BY TELEPHONE: Institutional Class Call (800) 658-5811 AMR Class(SM) Call (800) 345-2345 Investor Class(R) and Advisor Class Call (800) 388-3344 (GRAPHIC) ON THE INTERNET: Visit our website at www.americanbeaconfunds.com (GRAPHIC) BY MAIL: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULES In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission ("SEC") on Form N-Q as of the first and third fiscal quarters. The Fund's Forms N-Q are available on the SEC's website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC's Public Reference Room, 450 Fifth Street, NW, Washington, DC 20549. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete 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. AVAILABILITY OF PROXY VOTING POLICY AND RECORDS A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund's Statement of Additional Information, is available free of charge on the Fund's website (www.americanbeaconfunds.com) and by calling 1-800-967-9009 or by accessing the SEC's website at www.sec.gov. The Fund's proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund's Forms N-PX are available on the SEC's website at www.sec.gov. The Fund's proxy voting record may also be obtained by calling 1-800-967-9009. FUND SERVICE PROVIDERS: CUSTODIAN 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 Beacon Funds, 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. SAR 04//09 00068036 GUIDANCE | VISION | EXPERIENCE (AMERICAN BEACON FUNDS(SM) LOGO) SEMI-ANNUAL REPORT (GRAPHIC) APRIL 30, 2009 HIGH YIELD BOND FUND ENHANCED INCOME FUND INTERMEDIATE BOND FUND SHORT-TERM BOND FUND About American Beacon Advisors Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management. Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company. Contents Message from American Beacon............ 1 Market and Performance Overviews........ 2-10 American Beacon Schedules of Investments High Yield Bond Fund................. 13 Enhanced Income Fund................. 22 Intermediate Bond Fund............... 28 Short-Term Bond Fund................. 38 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 GENE L. NEEDLES) FELLOW SHAREHOLDERS, Please allow me to introduce myself. I am Gene Needles, Jr., the new Executive Vice President for the American Beacon Funds. I have over 27 years of financial services experience with some of the country's largest fund complexes, and I will be primarily responsible for daily operations as well as distribution of the American Beacon Funds. I am very excited to be a part of American Beacon and look forward to building a lasting relationship with all of our shareholders. Enclosed is the American Beacon Funds Semi-Annual Report for the six months ended April 30, 2009 for our High Yield Bond, Enhanced Income, Intermediate Bond, and Short-Term Bond Funds. During the six month period covered by this report, the capital markets experienced widespread volatility brought on by concern over the world-wide credit crisis. The American Beacon Intermediate Bond Fund - Institutional Class reported a six-month return of 8.56% for the period ended April 30, 2009 while the Barclays Capital Aggregate Index reported a return of 7.74% for this period. In the past, long-term investors have been rewarded for their patience. We continue to believe the Funds' fundamental investment strategies will continue to serve the Funds well over time. 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 Funds. Sincerely, /s/ Gene L. Needles, Jr. Gene L. Needles, Jr. Executive Vice President American Beacon Funds 1 DOMESTIC BOND MARKET OVERVIEW APRIL 30, 2008 (UNAUDITED) The period began during the depths of financial market despair after the bankruptcy of Lehman and conservatorship of Fannie Mae and Freddie Mac, followed by government bailouts of major financial firms. Credit markets ground almost to a halt, and fears were rampant that another Great Depression could possibly occur. While the U.S. economy had been in a recession for some time, the pace of economic decline accelerated and spread across the globe. With even good companies unable to access credit markets, default rates began to escalate. After a brutal two months that began the year, the month of March came back to life. Investors found renewed confidence in the much advertised changes promised by the Obama administration, legislative actions in Congress and an ever expanding series of rescue packages from the U.S. Treasury and Federal Reserve ("Fed"). However, the numerous programs intended to stabilize the nation's banking system have created as much anxiety as hope among investors worried that a "shot gun approach" may be long on spending but short on success. Concern was magnified as economic news continued to verify the persistence of the worst recession in over 25 years. Final Gross Domestic Product for the fourth quarter of 2008 was a dismal -6.8%, the worst performance since 1982. Not surprisingly, consumer confidence fell to the lowest level on record, while the loss of over five million jobs in the past 15 months pushed the unemployment rate to 8.5%. As the nearly $800 billion stimulus package designed to help the economy recover "began" to be spent, the administration's focus has moved back to the financial system. Concerned about extreme and persistent economic weakness, but with the Fed Funds rate already effectively at 0%, the Fed applied shock therapy in its mid-March announcement of a plan to purchase up to $300 billion in Treasuries in the secondary market over the next six months. This action essentially targeted economic stimulus through a direct increase in the money supply, versus the more indirect method of "credit easing" via lower rates and lending terms. 2 HIGH YIELD BOND MARKET OVERVIEW APRIL, 30 2009 (UNAUDITED) Despite the strong 14.0% return for the JPMorgan Global High-Yield Index for the six months ended April 30, 2009, the period began during the depths of financial market despair following the bankruptcy of Lehman and conservatorship of Fannie Mae and Freddie Mac, followed by government bailouts of major financial firms. Credit markets ground almost to a halt, and fears were rampant that another Great Depression could possibly occur. While the U.S. economy had been in a recession for some time, the pace of economic decline accelerated and spread across the globe. With even good companies unable to access credit markets, default rates began to escalate. In this environment, high yield bonds began the period with their second worst monthly performance in history (dating back to 1986), having just come off their worst month ever in October 2008. High yield spreads began the period at 15%, eventually rising to a peak above 19% in December. With valuations at severely depressed levels, and with the hope that government stimulus plans would ultimately work, investors began returning to the high yield sector toward year-end 2008, driving a technical rally into the beginning of 2009 that was focused mainly on higher quality (BB-rated) high yield credits. However, the fundamental picture remained generally poor, leading to significant volatility as the opposing factors of strong technicals and weak fundamentals waged battle. As the semi-annual period neared an end, signs began to emerge that perhaps the worst of the economic downturn was past, thus leading investors to seek out riskier assets. In April 2009, the high yield index experienced its highest monthly return ever, as investors continued to put money into the asset class and began seeking out higher return opportunities. The spread tightened significantly down to 12.5%, but still remained well above its long-term average of around 6%. With lower-quality (CCC-rated) credits leading the rally, the new issue market is beginning to open to companies rated below BB. While the economy still faces serious challenges, the ability of companies to refinance maturing debt and pay down bank lines could lead to a fundamental improvement in credit quality for select companies over the coming months. 3 PERFORMANCE OVERVIEW AMERICAN BEACON HIGH YIELD BOND FUND(SM) APRIL 30, 2009 (UNAUDITED) The Institutional Class of the High Yield Bond Fund returned 11.12% for the six months ended April 30, 2009. The Fund underperformed the JPMorgan Global High-Yield Index ("Index") return of 13.98% but outperformed the Lipper High Current Yield Funds Index, which gained 7.44% for the period.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 ----------------------------------------- SINCE INCEP. 6 MONTHS* 1 YEAR 5 YEARS (12/29/00) --------- ------ ------- ---------- Institutional Class(1,5)............ 11.12% -17.96% 0.40% 4.46% Investor Class(1,2,5).......... 10.96% -18.28% 0.15% 4.21% AMR Class (1,3,5)........ 11.25% -17.74% 0.49% 4.52% JPMorgan GlobaL High-Yield Index(4)... 13.98% -14.70% 2.08% 5.47% Lipper High Current Yield Funds Index(4).. 7.44% -19.33% 0.34% 2.82%
* Not annualized 1. The Investor Class was formerly known as the PlanAhead Class. 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 Investor Class, and the returns of the Investor Class since its inception. Expenses of the Investor Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Investor Class been in existence since 12/29/00. 3. Fund performance for the 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 returns 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, Investor, and AMR Class shares was 0.86%, 1.11%, and 0.59%, 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 the Fund's cash balances returning less than the Index, issue selection from a sector perspective and credit quality allocation. Sector allocation and issue selection from a credit quality perspective added value for the period. From a sector standpoint, issue selection in the Manufacturing, Finance, and Utility sectors contributed to the relative underperformance, despite positive contribution from selections in the Service, Consumer, and Energy sectors. From a sector allocation perspective, the Fund benefited from underweighting the Manufacturing sector (up 6.6%) and overweighting the period's top performing sector, Finance (up 27.5%). Overweighting the Cable/Media sector (up 8.5%) detracted from performance. From a credit quality perspective, issue selections in the CC and BB-rated credit groups added value, while selections in the CCC-rated credit group hurt performance. From a credit quality allocation perspective, overweighting the A-rated credit group and underweighting the BB-rated group contributed significantly to the relative underperformance. The sub-advisors' "bottom-up", research intensive investment process, which focuses on companies with strong cash flow and fundamental credit strength, remains in place. 4 PERFORMANCE OVERVIEW AMERICAN BEACON HIGH YIELD BOND FUND(SM) APRIL 30, 2009 (UNAUDITED) TOP TEN HOLDINGS
% OF NET ASSETS ---------- HCA, Inc., 9.125%, Due 11/15/2014............................ 1.4% Ford Motor Credit Co. LLC, 9.875%, Due 8/10/2011............. 1.3% Freeport-McMoRan Copper & Gold, Inc., 8.375%, Due 4/1/2017... 1.2% Inmarsat Finance II plc, 10.375%, Due 11/15/2012............. 1.1% Texas Competitive Electric Holdings Co. LLC, 10.25%, Due 11/1/2015................................................. 1.1% GMAC LLC, 6.875%, Due 9/15/2011.............................. 1.0% Ford Motor Credit Co. LLC, 9.75%, Due 9/15/2010.............. 1.0% Crown Castle International Corp., 9.00%, Due 1/15/2015....... 1.0% SunGard Data Systems, Inc., 10.25%, Due 8/15/2015 ........... 1.0% Rio Tinto Finance USA Ltd., 9.00%, Due 5/1/2019.............. 0.9%
FIXED INCOME SECTOR ALLOCATION
% OF FIXED INCOME ------------ Corporate..... 99.4% Convertibles.. 0.4% CMO........... 0.2%
EQUITY SECTOR ALLOCATION
% OF EQUITY INCOME ------------- Financials.... 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. 5 PERFORMANCE OVERVIEW AMERICAN BEACON ENHANCED INCOME FUND(SM) APRIL 30, 2009 (UNAUDITED) The Investor Class of the Enhanced Income Fund returned 10.09% for the six months ended April 30, 2009. Its benchmark, a blend of 75% Barclays Capital Aggregate and 25% Merrill Lynch All U.S. Convertibles Index, returned 8.85%. The Fund's peer group, the Lipper Intermediate Investment Grade Index, returned 5.97% for the same period.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 --------------------------------------- SINCE INCEP. 6 MONTHS* 1 YEAR 5 YEARS (7/1/03) --------- ------ ------- -------- Investor Class(1,4) ......... 10.09% -2.11% 3.14% 3.13% Enhanced Income Composite Index(3) ....... 8.85% -4.36% 3.00% 3.14% Barclays Capital Aggregrate Index (2) ..... 7.75% 3.84% 4.78% 6.01% Merrill Lynch All U.S. ...... Convertibles Index (2) ... 11.50% -27.25% -1.50% 0.87% Lipper Intermediate Investment Grade Index (2) ................ 5.97% -3.10% 2.75% 2.45%
* Not annualized 1. The Investor Class was formerly known as the PlanAhead Class. 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 Barclays Capital Aggregate Index represents returns of the Barclays Capital Gov./Credit Intermediate Index ("Intermediate Index") up to October 31, 2006 and the Barclays Capital 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 Barclays Capital 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 Investor Class shares was 1.04%. 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 9.1% before expenses outperforming the 7.7% return for the Barclays Capital Aggregate Index. This portion of the Fund benefited from holdings in Treasuries and Commercial Mortgage Backed securities, which added to relative performance. The remaining portion of the Fund, managed by the Fund's sub-advisor, returned 12.8% before expenses. These results exceeded the 11.5% 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. Broadly speaking, convertible issues with higher equity sensitivity performed better, reflecting an increase in market volatility, as well as their underlying stocks performing better than the broad equity market during the period. The sub-advisor also utilized 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 convertible benchmark return. The Manager and the Fund's sub-advisor remain focused on the Fund's investment objectives of generating income and capital appreciation. 6 PERFORMANCE OVERVIEW AMERICAN BEACON ENHANCED INCOME FUND(SM) APRIL 30, 2009 (UNAUDITED) TOP TEN HOLDINGS
% OF NET ASSETS ---------- U.S. Treasury Note, 4.125%, Due 5/15/2015 ..................... 3.3% Federal Home Loan Mortgage Corp., Pool #G08079, 5.00%, Due 9/1/2035 ................................................... 2.7% U.S. Treasury, 1.375%, Due 3/15/2012 .......................... 2.4% U.S. Treasury, 6.25%, Due 8/15/2023 ........................... 2.2% Federal Home Loan Mortgage Corp., Pool #G08255, 5.00%, Due 3/1/2038 ................................................... 1.9% Citigroup, Inc., 5.125%, Due 2/14/2011 ........................ 1.8% Federal Home Loan Mortgage Corp., Pool #G08269, 5.50%, Due 5/1/2038 ................................................... 1.8% Federal National Mortgage Association, Pool #745418, 5.50%, Due 4/1/2036 ............................................... 1.7% American Express Credit Account Master Trust, 5.35%, Due 1/15/2014 .................................................. 1.6% HSBC Finance Corp., 5.25%, Due 1/14/2011 ...................... 1.5%
FIXED-INCOME SECTOR ALLOCATION
% OF FIXED INCOME ------------ Corporate Bonds..... 36.2% Mortgage-Backed..... 29.9% Convertible Bonds... 15.5% Treasury............ 13.0% Asset-Backed........ 4.1% Agency.............. 1.3%
EQUITY SECTOR ALLOCATION
% OF EQUITIES -------- Financials................ 22.3% Information Technology.... 17.2% Consumer Staples.......... 13.6% Energy.................... 13.5% Consumer Discretionary.... 10.9% Health Care............... 10.2% Materials................. 6.4% Industrials............... 5.9%
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. 7 PERFORMANCE OVERVIEW AMERICAN BEACON INTERMEDIATE BOND FUND(SM) APRIL 30, 2009 (UNAUDITED) The Institutional Class of the Intermediate Bond Fund returned 8.56% for the six months ended April 30, 2009, outperforming the Barclays Capital Aggregate Index ("Index") return of 7.75% and the Lipper Intermediate Investment Grade Debt Funds Index return of 5.97% for the same period.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 --------------------------------------- 6 MONTHS* 1 YEAR 5 YEARS 10 YEARS --------- ------ ------- -------- Institutional Class(1,4) ... 8.56% 3.54% 4.82% 5.46% Investor Class (1,2,4) ..... 8.50% 3.47% 4.80% 5.45% Barclays Capital Agg. ...... Index (3) ............... 7.75% 3.84% 4.78% 5.71% Lipper Intermediate Inv. ... Grade Index (3) ......... 5.97% -3.10% 2.75% 4.48%
* 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. 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. Fund performance represents the total returns achieved by the Institutional Class up to 3/2/09, the inception date of the Investor Class, and the returns of the Investor Class since its inception. Expenses of the Investor Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Investor Class been in existence since 4/30/99. 3. The Barclays Capital 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. 4. The total annual Fund operating expense ratios set forth in the most recent Fund prospectus for the Institutional and Investor Class shares was 0.31% and 0.88%, respectively. The expense ratios above may vary from the expense ratios 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 among U.S. Treasuries, Commercial Mortgage-Backed and Corporate securities. The Fund's overweighting in the Corporate sector, the top performing sector in the Index, also contributed to relative performance, although the outperformance was largely offset by a small allocation to Collateralized Mortgage Obligations. The average duration of the Fund's portfolio was slightly longer than the Index over the course of the six months, with holdings in the three- to five-year duration range adding the most value relative to the Index. 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 ---------- Federal National Mortgage Association, Pool #961981, 5.50%, Due 3/1/2038 ................................................ 3.3% Federal National Mortgage Association, Pool #982033, 5.00%, Due 4/1/2038 ................................................ 3.2% U.S. Treasury Note, 4.125%, Due 5/15/2015 ...................... 2.5% Federal Home Loan Mortgage Corp., 1.50%, Due 1/7/2011 .......... 2.2% Morgan Stanley (FDIC Guaranteed), 2.25%, Due 3/13/2012 ......... 2.2% Citibank NA (FDIC Guaranteed), 1.625%, Due 3/30/2011 ........... 2.2% Federal Home Loan Mortgage Corp., 5.125%, Due 4/18/2011 ........ 2.1% Federal National Mortgage Association, 5.375%, Due 6/12/2017 ... 2.0% U.S. Treasury, 2.75%, Due 2/15/2019 ............................ 2.0% Federal National Mortgage Association, Pool #982817, 5.00%, Due 5/1/2038 ................................................ 1.8%
SECTOR ALLOCATION
% OF FIXED INCOME ------------ Mortgage-Backed... 40.2% Corporates........ 28.2% U.S. Treasury..... 15.6% U.S. Agency....... 14.9% Asset-Backed...... 1.1%
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. 8 PERFORMANCE OVERVIEW AMERICAN BEACON SHORT-TERM BOND FUND(SM) APRIL 30, 2009 (UNAUDITED) The Institutional Class of the Short-Term Bond Fund returned 2.96% for the six months ended April 30, 2009, which underperformed the Merrill Lynch 1-3 Year Gov/Corp Index ("Index") return of 3.44% but outperformed the Lipper Short Investment Grade Bond Funds Index ("Lipper") return of 2.31%.
ANNUALIZED TOTAL RETURNS PERIODS ENDED 4/30/09 --------------------------------------- 6 MONTHS* 1 YEAR 5 YEARS 10 YEARS --------- ------ ------- -------- Institutional Class(1,3) ... 2.96% 2.38% 3.51% 4.47% Investor Class(1,3) ........ 2.84% 1.99% 2.99% 3.97% Lipper Short Inv. Grade Index(2) ................ 2.31% -2.42% 1.97% 3.34% Merrill Lynch 1-3 Yr. ...... Gov./Corp. Index(2) ..... 3.44% 3.57% 3.91% 4.73%
* Not annualized 1. The Investor Class was formerly known as the PlanAhead Class. 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 Investor 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 Investor Class shares was 0.32% and 0.89%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. As compared to the Index, the Fund underperformed slightly due to a modest underweight position in the Corporate sector. The Corporate sector had the highest returns among the Index sectors during the period as the markets began to recover in early 2009. The Fund generally maintains an overweight position in investment-grade Corporate securities to generate incremental yield-to-maturity compared to the Index. However, due to the unusually volatile markets over the past year and due to unusual volatility in the Fund's asset balances, the Fund maintained a large position in the Treasury and Agency sectors for liquidity purposes. This position is expected to be temporary, and we look to reassume our overweight position in the Corporate sector as the markets normalize. Duration did not play a significant role during the period as the Fund's duration was essentially neutral to that of the Index. Looking forward, with interest rates at such low levels, the Fund will likely seek a duration range of neutral-to-short of the Index while the economy regains its footing and interest rates begin to rise. Overall, the period was challenging, but we remain confident in the long-term success of the Fund's investment strategy. Markets have begun to stabilize, and the worst of the financial crisis appears to be behind us. However, the recovery is not expected to be swift and will require diligence as it unfolds. We will continue to be conservative in our approach to credit risk, and we will look to take advantage of opportunities in this market to generate attractive long-term results. 9 PERFORMANCE OVERVIEW AMERICAN BEACON SHORT-TERM BOND FUND(SM) APRIL 30, 2009 (UNAUDITED) TOP TEN HOLDINGS
% OF NET ASSETS ---------- U.S. Treasury Note, 4.375%, Due 12/15/2010 ............... 9.7% U.S. Treasury Note, 1.50%, Due 10/31/2010 ................ 9.3% Federal Home Loan Mortgage Corp., 2.125%, Due 3/23/2012 .. 9.3% Federal Home Loan Mortgage Corp., 1.625%, Due 4/26/2011 .. 9.2% U.S. Treasury Note, 2.875%, Due 6/30/2010 ................ 4.7% Bank of American Corp. (FDIC Guaranteed), 2.375%, Due 6/22/2012 ............................................. 4.7% Goldman Sachs Group, Inc. (FDIC Guaranteed), 1.70%, Due 3/15/2011 ............................................. 4.6% Morgan Stanley (FDIC Guaranteed), 2.25%, Due 3/13/2012 ... 4.6% Citibank NA (FDIC Guaranteed), 1.625%, Due 3/30/2011 ..... 4.6% Federal National Mortgage Association, 1.375%, Due 4/28/2011 ............................................. 4.6%
SECTOR ALLOCATION
% OF FIXED INCOME ------------ Agency.............. 53.5% Treasury............ 22.7% Corporate Bonds..... 18.0% Asset-Backed........ 4.3% Mortgage-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. 10 FUND EXPENSES - ACTUAL APRIL 30, 2009 (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, 2008 through April 30, 2009. 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 Investor 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.
HIGH YIELD INTERMEDIATE SHORT-TERM INSTITUTIONAL CLASS BOND FUND BOND FUND BOND FUND - ------------------- ---------- ------------ ---------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $1,111.17 $1,085.61 $1,029.64 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 4 .29 $ 1.55 $ 1.51 Annualized Expense Ratio ........................ 0.82% 0.30% 0.30%
HIGH YIELD ENHANCED INTERMEDIATE SHORT-TERM INVESTOR CLASS BOND FUND INCOME FUND BOND FUND BOND FUND - -------------- ---------- ----------- ------------ ---------- Beginning Account Value 11/1/08 .. $1,000.00 $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/09 ..... $1,109.64 $1,100.90 $1,012.81 $1,028.42 Expenses Paid During Period 11/1/08-4/30/09 * ............. $ 5.54 $ 4.95 $ 1.04 $ 2.72 Annualized Expense Ratio ......... 1.06% 0.95% 0.64% 0.54%
HIGH YIELD AMR CLASS BOND FUND - --------- ---------- Beginning Account Value 11/1/08 .. $1,000.00 Ending Account Value 4/30/2009 ... $1,112.53 Expenses Paid During Period 11/1/08-4/30/09 * ............. $ 2.99 Annualized Expense Ratio ......... 0.57%
* 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 (181) by days in the year (365) to reflect the half-year period. 11 FUND EXPENSES - HYPOTHETICAL APRIL 30, 2009 (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 Investor 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.
HIGH YIELD INTERMEDIATE SHORT-TERM INSTITUTIONAL CLASS BOND FUND BOND FUND BOND FUND - ------------------- ---------- ------------ ---------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $1,020.73 $1,023.31 $1,023.31 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 4.11 $ 1.51 $ 1.51 Annualized Expense Ratio ........................ 0.82% 0.30% 0.30%
HIGH YIELD ENHANCED INTERMEDIATE SHORT-TERM INVESTOR CLASS BOND FUND INCOME FUND BOND FUND BOND FUND - -------------- ---------- ----------- ------------ ---------- Beginning Account Value 11/1/08 ................. $1,000.00 $1,000.00 $1,000.00 $1,000.00 Ending Account Value 4/30/09 .................... $1,019.54 $1,020.08 $1,021.62 $1,022.12 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 5.31 $ 4.76 $ 3.21 $ 2.71 Annualized Expense Ratio ........................ 1.06% 0.95% 0.64% 0.54%
HIGH YIELD AMR CLASS BOND FUND - --------- ---------- Beginning Account Value 11/1/08 ................. $1,000.00 Ending Account Value 4/30/09 .................... $1,021.97 Expenses Paid During Period 11/1/08-4/30/09 * ... $ 2.86 Annualized Expense Ratio ........................ 0.57%
- ---------- * 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 (181) by days in the year (365) to reflect the half-year period. 12 AMERICAN BEACON HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS APRIL 30, 2009 (UNAUDITED)
SHARES VALUE ------------ ----------- (DOLLARS IN THOUSANDS) PREFERRED STOCKS - 0.09% FINANCIALS - 0.09% DIVERSIFIED FINANCIALS - 0.09% Federal Home Loan Mortgage Corp. .................................. 10,000 $ 5 Preferred Blocker, Inc. ++ ........................................ 454 136 ----------- TOTAL PREFERRED STOCKS ............................................ 141 -----------
PAR AMOUNT ------------ CORPORATE OBLIGATIONS - 94.42% AUTO COMPONENTS - 0.66% Allison Transmission, Inc., 11.00%, Due 11/1/2015 ++ .............. $ 900 540 Cooper-Standard Automotive, Inc., 8.375%, Due 12/15/2014 .......... 920 74 TRW Automotive, Inc., 7.25%, Due 3/15/2017 ++ ..................... 900 481 ----------- 1,095 ----------- AUTO LOAN - 3.96% Ford Motor Credit Co. LLC, 9.75%, Due 9/15/2010 ........................................... 1,875 1,687 9.875%, Due 8/10/2011 .......................................... 2,530 2,214 GMAC LLC, 5.625%, Due 5/15/2009 .......................................... 370 366 7.25%, Due 3/2/2011 ++ ......................................... 395 348 6.875%, Due 9/15/2011 ++ ....................................... 2,000 1,740 8.00%, Due 11/1/2031 ++ ........................................ 307 215 ----------- 6,570 ----------- AUTOMOBILES - 0.05% General Motors Corp., 8.375%, Due 7/15/2033 ....................... 970 82 ----------- BASIC MATERIALS - 1.24% Anglo American Capital plc, 9.375%, Due 4/8/2014 ++ ............... 500 519 Rio Tinto Finance USA Ltd., 9.00%, Due 5/1/2019 ................... 1,500 1,542 ----------- 2,061 ----------- CASINO/GAMING - 2.33% Caesars Entertainment, Inc., 7.875%, Due 3/15/2010 ................ 500 295 Fontainebleau Las Vegas Holdings LLC, 11.00%, Due 6/15/2015 ++ .... 1,800 63 Las Vegas Sands Corp., 6.375%, Due 2/15/2015 ...................... 850 557 Mandalay Resort Group, 9.375%, Due 2/15/2010 ...................... 1,085 578 MGM Mirage, 6.00%, Due 10/1/2009 ........................................... 215 181 6.625%, Due 7/15/2015 .......................................... 1,400 712 Pinnacle Entertainment, Inc., 8.25%, Due 3/15/2012 ........................................... 700 683 8.75%, Due 10/1/2013 ........................................... 100 96 Pokagon Gaming Authority, 10.375%, Due 6/15/2014 ++ ............... 600 555 Station Casinos, Inc., 6.875%, Due 3/1/2016 ........................................... 500 16
See accompanying notes 13 AMERICAN BEACON HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) 7.75%, Due 8/15/2016 ........................................... $ 400 $ 136 ----------- 3,872 ----------- COMMERCIAL SERVICES - 0.62% Iron Mountain, Inc., 8.75%, Due 7/15/2018 ........................................... 100 101 8.00%, Due 6/15/2020 ........................................... 300 290 RSC Equipment Rental, Inc., 9.50%, Due 12/1/2014 .................. 1,000 643 ----------- 1,034 ----------- COMMUNICATIONS - 18.26% CanWest Media, Inc., 8.00%, Due 9/15/2012 ......................... 800 208 CC Holdings GS V LLC, 7.75%, Due 5/1/2017 ++ ...................... 100 101 CCO Holdings LLC, 8.75%, Due 11/15/2013 # ......................... 1,200 1,041 Charter Communications Holdings LLC, 10.25%, Due 9/15/2010 .......................................... 1,100 1,001 13.50%, Due 1/15/2011 # ........................................ 1,100 6 1.00%, Due 1/15/2014 ........................................... 1,100 11 10.875%, Due 9/15/2014 ++ ...................................... 800 796 11.00%, Due 10/1/2015 .......................................... 800 62 Cricket Communications, Inc., 9.375%, Due 11/1/2014 ............... 1,285 1,272 Crown Castle International Corp., 9.00%, Due 1/15/2015 ............ 1,640 1,673 CSC Holdings, Inc., 8.50%, Due 4/15/2014 ++ ........................................ 400 408 7.625%, Due 7/15/2018 .......................................... 400 384 8.625%, Due 2/15/2019 ++ ....................................... 525 529 Dex Media, Inc., 9.875%, Due 8/15/2013 # ........................................ 970 276 8.00%, Due 11/15/2013 # ........................................ 1,100 132 9.00%, Due 11/15/2013 # ss. .................................... 400 48 Digicel Group Ltd., 8.875%, Due 1/15/2015 ++ ....................................... 1,000 725 9.125%, Due 1/15/2015 ++ ....................................... 1,550 1,054 DirecTV Holdings LLC, 7.625%, Due 5/15/2016 ....................... 600 594 DISH DBS Corp., 7.00%, Due 10/1/2013 ........................................... 790 754 7.125%, Due 2/1/2016 ........................................... 1,300 1,215 Frontier Communications Corp., 8.25%, Due 5/1/2014 ............................................ 510 501 9.00%, Due 8/15/2031 ........................................... 830 660 HSN, Inc., 11.25%, Due 8/1/2016 ++ ................................ 650 475 Idearc, Inc., 8.00%, Due 11/15/2016 # ............................. 2,214 36 Intelsat Corp., 9.25%, Due 8/15/2014 ++ ........................... 750 728 Intelsat Jackson Holdings Ltd., 11.25%, Due 6/15/2016 ............. 700 716 Intelsat Subsidiary Holding Co. Ltd., 8.50%, Due 4/15/2013 ++ ..... 900 891 iPCS, Inc., 3.295%, Due 5/1/2013 ss. .............................. 315 255
See accompanying notes 14 AMERICAN BEACON HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) L-3 Communications Corp., 6.125%, Due 7/15/2013 .......................................... $ 200 $ 192 6.375%, Due 10/15/2015 ......................................... 200 189 Lamar Media Corp., 7.25%, Due 1/1/2013 ............................................ 900 806 9.75%, Due 4/1/2014 ++ ......................................... 200 201 Liberty Media LLC, 5.70%, Due 5/15/2013 ........................... 1,000 840 LIN Television Corp., 6.50%, Due 5/15/2013 ........................ 1,000 580 Mediacom LLC, 9.50%, Due 1/15/2013 ................................ 830 813 MetroPCS Wireless, Inc., 9.25%, Due 11/1/2014 ........................................... 1,000 1,001 9.25%, Due 11/1/2014 ++ ........................................ 200 199 Nortel Networks Ltd., 10.75%, Due 7/15/2016 ++ .................... 800 212 Quebecor Media, Inc., 7.75%, Due 3/15/2016 ........................ 1,300 1,086 Qwest Communications International, Inc., 7.50%, Due 2/15/2014 .... 800 742 Qwest Corp., 4.57%, Due 6/15/2013 ss. ....................................... 460 416 8.375%, Due 5/1/2016 ++ ........................................ 975 970 6.875%, Due 9/15/2033 .......................................... 590 417 Radio One, Inc., 6.375%, Due 2/15/2013 ............................ 800 145 Sprint Capital Corp., 7.625%, Due 1/30/2011 .......................................... 250 241 8.75%, Due 3/15/2032 ........................................... 1,525 1,159 Telesat Canada, 12.50%, Due 11/1/2017 ++ .......................... 825 685 Tim Hellas Telecommunications, 6.881%, Due 1/15/2015 ++ Ss. ....... 500 110 Time Warner Telecom Holdings, Inc., 9.25%, Due 2/15/2014 .......... 650 652 Univision Communications, Inc., 7.85%, Due 7/15/2011 ........................................... 430 349 9.75%, Due 3/15/2015 ++ ........................................ 1,900 295 VIP Finance Ireland Ltd., 9.125%, Due 4/30/2018 ++ ................ 370 264 Virgin Media Finance PLC, 8.75%, Due 4/15/2014 .................... 875 866 Visant Holding Corp., 8.75%, Due 12/1/2013 ........................ 325 299 ----------- 30,281 ----------- CONSTRUCTION & ENGINEERING - 0.26% KB Home, 6.25%, Due 6/15/2015 ..................................... 500 428 ----------- CONSUMER DISCRETIONARY - 4.01% Carrols Corp., 9.00%, Due 1/15/2013 ............................... 562 520 Dollar General Corp., 10.625%, Due 7/15/2015 ...................... 1,000 1,040 Education Management LLC, 10.25%, Due 6/1/2016 .................... 1,160 1,113 Jostens Holding Corp., 10.25%, Due 12/1/2013 Ss. .................. 150 142 Jostens IH Corp., 7.625%, Due 10/1/2012 ........................... 900 873 Meritage Homes Corp., 6.25%, Due 3/15/2015 ........................ 475 347 Michaels Stores, Inc., 10.00%, Due 11/1/2014 ...................... 1,000 605 Neiman Marcus Group, Inc., 9.00%, Due 10/15/2015 .................. 420 231
See accompanying notes 15 AMERICAN BEACON HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) NPC International, Inc., 9.50%, Due 5/1/2014 ...................... $ 200 $ 179 Ryland Group, Inc., 8.40%, Due 5/15/2017 .......................... 575 563 Saks, Inc., 9.875%, Due 10/1/2011 ................................. 280 263 Staples, Inc., 9.75%, Due 1/15/2014 ............................... 275 302 Ticketmaster Entertainment, Inc., 10.75%, Due 8/1/2016 ++ ......... 690 471 ----------- 6,649 ----------- CONSUMER STAPLES - 5.52% Altria Group, Inc., 9.70%, Due 11/10/2018 .......................................... 230 269 9.25%, Due 8/6/2019 ............................................ 500 572 CRC Health Corp., 10.75%, Due 2/1/2016 ............................ 1,115 758 Dean Foods Co., 7.00%, Due 6/1/2016 ............................... 1,000 975 Dole Food Co, Inc., 13.875%, Due 3/15/2014 ++ ..................... 900 947 Ingles Markets, Inc., 8.875%, Due 5/15/2017 ++ .................... 300 290 Jarden Corp., 8.00%, Due 5/1/2016 ............................................ 615 600 7.50%, Due 5/1/2017 ............................................ 1,000 885 JBS USA LLC, 11.625%, Due 5/1/2014 ++ ............................. 1,600 1,520 Pinnacle Foods Finance LLC, 10.625%, Due 4/1/2017 ................. 1,125 844 Prestige Brands, Inc., 9.25%, Due 4/15/2012 ....................... 280 274 Reable Therapeutics, 11.75%, Due 11/15/2014 ....................... 550 355 Smithfield Foods, Inc., 7.75%, Due 5/15/2013 ...................... 400 282 SUPERVALU, Inc., 8.00%, Due 5/1/2016 .............................. 600 582 ----------- 9,153 ----------- ENERGY - 14.19% Chesapeake Energy Corp., 9.50%, Due 2/15/2015 ........................................... 590 596 6.625%, Due 1/15/2016 ++ ....................................... 1,600 1,424 Cie Generale de Geophysique-Veritas, 7.50%, Due 5/15/2015 ......... 1,100 924 Compton Petroleum Finance Corp., 7.625%, Due 12/1/2013 ............ 750 287 Copano Energy LLC, 8.125%, Due 3/1/2016 ........................................... 800 728 7.75%, Due 6/1/2018 ++ ......................................... 200 175 Dynegy Holdings, Inc., 8.375%, Due 5/1/2016 ....................... 1,200 960 El Paso Corp., 12.00%, Due 12/12/2013 ......................................... 700 756 8.25%, Due 2/15/2016 ........................................... 500 488 Forest Oil Corp., 8.50%, Due 2/15/2014 ++ ......................... 420 407 Helix Energy Solutions Group, Inc., 9.50%, Due 1/15/2016 ++ ....... 500 355 Intergen NV, 9.00%, Due 6/30/2017 ++ .............................. 1,000 950 Linn Energy LLC, 9.875%, Due 7/1/2018 ++ .......................... 1,280 1,152 Mariner Energy, Inc., 7.50%, Due 4/15/2013 ........................ 1,000 810 MarkWest Energy Partners LP, 6.875%, Due 11/1/2014 .......................................... 700 574 8.75%, Due 4/15/2018 ........................................... 675 560
See accompanying notes 16 AMERICAN BEACON HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Mirant Americas Generation LLC, 8.30%, Due 5/1/2011 ............... $ 325 $ 325 Mirant North America LLC, 7.375%, Due 12/31/2013 .................. 1,000 962 NRG Energy, Inc., 7.25%, Due 2/1/2014 ............................................ 1,300 1,254 7.375%, Due 2/1/2016 ........................................... 600 577 OPTI Canada, Inc., 8.25%, Due 12/15/2014 .......................... 775 426 Peabody Energy Corp., 6.875%, Due 3/15/2013 .......................................... 700 686 7.375%, Due 11/1/2016 .......................................... 300 293 PetroHawk Energy Corp., 9.125%, Due 7/15/2013 .......................................... 1,200 1,176 10.50%, Due 8/1/2014 ++ ........................................ 900 904 Plains Exploration & Production Co., 10.00%, Due 3/1/2016 ........................................... 420 410 7.625%, Due 6/1/2018 ........................................... 1,000 868 Quicksilver Resources, Inc., 8.25%, Due 8/1/2015 .................. 1,000 815 Regency Energy Partners LP, 8.375%, Due 12/15/2013 ................ 402 376 SandRidge Energy, Inc., 8.00%, Due 6/1/2018 ++ .................... 1,000 875 Seitel, Inc., 9.75%, Due 2/15/2014 ................................ 550 270 Tennessee Gas Pipeline Co., 8.00%, Due 2/1/2016 ++ ................ 140 143 Tesoro Corp., 6.50%, Due 6/1/2017 ................................. 1,000 813 Williams Cos., Inc., 7.625%, Due 7/15/2019 .......................................... 700 690 8.75%, Due 1/15/2020 ++ ........................................ 125 128 7.875%, Due 9/1/2021 ........................................... 400 395 ----------- 23,532 ----------- FINANCE - 7.83% American Real Estate Partners, L.P., 8.125%, Due 6/1/2012 ......... 745 663 E*Trade Financial Corp., 12.50%, Due 11/30/2017 ................... 1,328 661 Forest City Enterprises, Inc., 7.625%, Due 6/1/2015 ............... 800 384 Fresenius US Finance II, Inc., 9.00%, Due 7/15/2015 ++ ............ 700 742 Galaxy Entertainment Finance Co. Ltd., 9.875%, Due 12/15/2012 ++ .. 1,000 780 Hawker Beechcraft Acquisition Co. LLC, 9.75%, Due 4/1/2017 ........ 775 190 Hexion US Finance Corp., 9.75%, Due 11/15/2014 .................... 660 254 HUB International Holdings, Inc., 10.25%, Due 6/15/2015 ++ ........ 755 423 Hughes Network Systems LLC, 9.50%, Due 4/15/2014 .................. 850 795 International Lease Finance Corp., 4.375%, Due 11/1/2009 .......................................... 405 385 5.75%, Due 6/15/2011 ........................................... 250 191 JP Morgan Chase & Co., 7.90%, Due 12/31/2049 ...................... 1,000 761 KAR Holdings, Inc., 10.00%, Due 5/1/2015 .......................... 975 565 LaBranche & Co., Inc., 11.00%, Due 5/15/2012 ...................... 600 546 Lehman Brothers Holdings, Inc., 6.20%, Due 9/26/2014 .............. 900 128 Liberty Mutual Group, Inc., 10.75%, Due 6/15/2058 ++ .............. 500 275
See accompanying notes 17 AMERICAN BEACON HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Merrill Lynch & Co., Inc., 6.40%, Due 8/28/2017 ........................................... $ 200 $ 163 6.875%, Due 4/25/2018 .......................................... 500 421 Nationwide Life Global Funding I, 1.42%, Due 12/14/2010 ++ ss. ... 325 297 Nuveen Investments, Inc., 5.00%, Due 9/15/2010 .................... 825 670 Petroplus Finance Ltd., 6.75%, Due 5/1/2014 ++ .................... 1,000 825 Rainbow National Services LLC, 10.375%, Due 9/1/2014 ++ ........... 525 546 Realogy Corp., 10.50%, Due 4/15/2014 .............................. 900 297 Rouse Company, 8.00%, Due 4/30/2009 ............................... 700 355 USI Holdings Corp., 5.113%, Due 11/15/2014 ++ ss. ................. 920 442 Wachovia Capital Trust III, 5.80%, Due 3/15/2042 .................. 500 232 Washington Mutual, Inc., 7.25%, Due 11/1/2017 ..................... 485 234 Wells Fargo Capital XIII, 7.70%, Due 12/29/2049 ................... 400 256 Wells Fargo Capital XV, 9.75%, Due 12/29/2049 ..................... 600 510 ----------- 12,991 ----------- FOOD PRODUCTS - 0.37% Tyson Foods, Inc., 10.50%, Due 3/1/2014 ++ ........................ 585 611 ----------- HEALTH CARE - 8.33% Community Health Systems, Inc., 8.875%, Due 7/15/2015 ............. 1,000 995 DaVita, Inc., 7.25%, Due 3/15/2015 ................................ 1,000 977 Fresenius Medical Care Capital Trust IV, 7.875%, Due 6/15/2011 .... 900 918 HCA, Inc., 9.125%, Due 11/15/2014 ++ ...................................... 2,300 2,277 6.50%, Due 2/15/2016 ........................................... 300 231 9.625%, Due 11/15/2016 # ....................................... 700 649 8.50%, Due 4/15/2019 ++ ........................................ 700 704 Health Net, Inc., 6.375%, Due 6/1/2017 ............................ 625 438 HealthSouth Corp., 8.323%, Due 6/15/2014 ss. ...................... 925 837 Tenet Healthcare Corp., 9.875%, Due 7/1/2014 ........................................... 800 744 10.00%, Due 5/1/2018 ++ ........................................ 400 416 United Surgical Partners International, Inc., 9.25%, Due 5/1/2017 ....................................................... 1,000 745 Universal Hospital Services, Inc., 5.943%, Due 6/1/2015 ss. ............................................................ 975 748 US Oncology, Inc., 6.904%, Due 3/15/2012 ss. ...................................... 1,005 603 10.75%, Due 8/15/2014 .......................................... 705 654 Vanguard Health Holding Co. I LLC, Zero Coupon, Due 10/1/2015 ss. .................................................. 1,050 935 Vanguard Health Holding Co. II LLC, 9.00%, Due 10/1/2014 .......... 1,000 953 ----------- 13,824 ----------- HOTELS, RESTAURANTS & LEISURE - 1.83% Denny's Holdings, Inc., 10.00%, Due 10/1/2012 ..................... 655 611 Host Hotels & Resorts LP, 6.875%, Due 11/1/2014 ................... 300 274 Host Marriott LP, 7.125%, Due 11/1/2013 ........................... 700 658 Royal Caribbean Cruises Ltd., 7.25%, Due 3/15/2018 ................ 1,000 635
See accompanying notes 18 AMERICAN BEACON HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Starwood Hotels & Resorts Worldwide, Inc., 6.75%, Due 5/15/2018 ... $ 1,000 $ 855 ----------- 3,033 ----------- INDUSTRIALS - 9.86% AEP Industries, Inc., 7.875%, Due 3/15/2013 ....................... 565 390 Allied Waste North America, Inc., 7.25%, Due 3/15/2015 ........................................... 450 441 7.125%, Due 5/15/2016 .......................................... 425 416 6.875%, Due 6/1/2017 ........................................... 300 291 Biomet, Inc., 10.375%, Due 10/15/2017 ............................. 1,200 1,155 Bowater, Inc., 9.00%, Due 8/1/2009 # .............................. 625 77 Case New Holland, Inc., 7.125%, Due 3/1/2014 ...................... 900 787 Casella Waste Systems, Inc., 9.75%, Due 2/1/2013 .................. 850 739 Celestica, Inc., 7.625%, Due 7/1/2013 ............................. 300 285 CEVA Group plc, 10.00%, Due 9/1/2014 ++ ........................... 800 396 Crown Americas LLC, 7.75%, Due 11/15/2015 ......................... 1,000 1,015 Freescale Semiconductor, Inc., 8.875%, Due 12/15/2014 ............. 2,650 901 Goodyear Tire & Rubber Co., 6.318%, Due 12/1/2009 ss. ............. 1,105 1,090 Intertape Polymer US, Inc., 8.50%, Due 8/1/2014 ................... 1,100 445 Johnsondiversey Holdings, Inc., 10.67%, Due 5/15/2013 ss. ......... 800 636 K Hovnanian Enterprises, Inc., 11.50%, Due 5/1/2013 ............... 612 526 Kansas City Southern de Mexico S.A. de C.V., 12.50%, Due 4/1/2016 ++ .................................................... 300 290 Masco Corp., 1.631%, Due 3/12/2010 ss. ............................ 260 248 NewPage Corp., 10.00%, Due 5/1/2012 ............................... 1,000 470 Novelis, Inc., 7.25%, Due 2/15/2015 ............................... 1,000 520 Owens-Brockway Glass Container, Inc., 6.75%, Due 12/1/2014 ........ 700 681 Owens-Illinois, Inc., 7.80%, Due 5/15/2018 ........................ 300 292 RBS Global, Inc., 9.50%, Due 8/1/2014 ............................. 1,000 817 Sanmina-SCI Corp., 8.125%, Due 3/1/2016 ........................... 1,000 505 Service Corp International, 7.00%, Due 6/15/2017 .................. 405 363 Smurfit Kappa Funding plc, 7.75%, Due 4/1/2015 .................... 100 59 Smurfit-Stone Container Enterprises, Inc., 8.375%, Due 7/1/2012 # ..................................................... 750 158 Solo Cup Co., 8.50%, Due 2/15/2014 ................................ 775 651 Stallion Oilfield Services, 9.75%, Due 2/1/2015 ++ ................ 500 98 TFM S.A.B. de C.V., 9.375%, Due 5/1/2012 .......................... 1,000 915 WCA Waste Corp., 9.25%, Due 6/15/2014 ............................. 850 689 ----------- 16,346 ----------- MATERIALS - 4.80% Freeport-McMoRan Copper & Gold, Inc., 8.375%, Due 4/1/2017 ........ 2,045 2,004 Georgia-Pacific LLC, 9.50%, Due 12/1/2011 ......................... 600 610 Huntsman International LLC, 7.875%, Due 11/15/2014 ......................................... 1,000 660 7.375%, Due 1/1/2015 ........................................... 575 374 Ineos Group Holdings plc, 8.50%, Due 2/15/2016 ++ ................. 1,100 165 MacDermid, Inc., 9.50%, Due 4/15/2017 ++ .......................... 2,200 1,089 Nalco Co., 8.875%, Due 11/15/2013 ................................. 1,000 1,005
See accompanying notes 19 AMERICAN BEACON HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Newark Group, Inc., 9.75%, Due 3/15/2014 # ........................ $ 2,200 $ 22 Norske Skogindustrier ASA, 8.625%, Due 6/15/2011 .......................................... 1,100 611 6.125%, Due 10/15/2015 ++ ...................................... 750 394 Sappi Papier Holding AG, 7.50%, Due 6/15/2032 ++ .................. 825 311 Steel Dynamics, Inc., 8.25%, Due 4/15/2016 ++ ..................... 750 593 Tube City IMS Corp., 9.75%, Due 2/1/2015 .......................... 500 120 ----------- 7,958 ----------- MEDIA - 0.36% WMG Holdings Corp., Zero Coupon, Due 12/15/2014 ss. ............... 1,300 598 ----------- SERVICES - 1.22% ARAMARK Corp., 4.67%, Due 2/1/2015 ss. ........................................ 1,345 1,076 8.50%, Due 2/1/2015 ............................................ 1,000 955 ----------- 2,031 ----------- TECHNOLOGY - 3.29% First Data Corp., 9.875%, Due 9/24/2015 ........................... 2,130 1,472 Jabil Circuit, Inc., 8.25%, Due 3/15/2018 ......................... 930 767 Seagate Technology International, 10.00%, Due 5/1/2014 ++ ......... 800 788 STATS ChipPAC Ltd., 7.50%, Due 7/19/2010 .......................... 575 535 SunGard Data Systems, Inc., 9.125%, Due 8/15/2013 .......................................... 300 286 10.25%, Due 8/15/2015 .......................................... 1,850 1,610 ----------- 5,458 ----------- TELECOMMUNICATION SERVICES - 2.10% Inmarsat Finance II plc, 10.375%, Due 11/15/2012 ss. .............. 1,800 1,845 Millicom International Cellular S.A., 10.00%, Due 12/1/2013 ....... 600 600 Wind Acquisition Finance S.A., 10.75%, Due 12/1/2015 ++ ........... 1,000 1,040 ----------- 3,485 ----------- UTILITIES - 3.33% AES Corp., 9.375%, Due 9/15/2010 .......................................... 292 293 8.75%, Due 5/15/2013 ++ ........................................ 315 318 9.75%, Due 4/15/2016 ++ ........................................ 1,025 1,015 8.00%, Due 10/15/2017 .......................................... 900 823 Edison Mission Energy, 7.00%, Due 5/15/2017 ....................... 700 529 Elwood Energy LLC, 8.159%, Due 7/5/2026 ........................... 501 395 Energy Future Holdings Corp., 10.875%, Due 11/1/2017 .............. 150 102 Orion Power Holdings, Inc., 12.00%, Due 5/1/2010 .................. 235 246 Texas Competitive Electric Holdings Co. LLC, 10.25%, Due 11/1/2015 3,165 1,796 ----------- 5,517 ----------- TOTAL CORPORATE OBLIGATIONS ....................................... 156,609 -----------
See accompanying notes 20 AMERICAN BEACON HIGH YIELD BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) CONVERTIBLE OBLIGATIONS - 0.38% ENERGY - 0.19% International Coal Group, Inc., 9.00%, Due 8/1/2012 ............... $ 495 $ 309 ----------- INDUSTRIALS - 0.19% Horizon Lines, Inc., 4.25%, Due 8/15/2012 ......................... 625 323 ----------- TOTAL CONVERTIBLE OBLIGATIONS ..................................... 632 ----------- NON-AGENCY MORTGAGE-BACKED OBLIGATIONS - 0.23% Crown Castle Towers LLC, 5.772%, Due 11/15/2036 ++ ................ 225 203 Global Signal Trust, 6.495%, Due 2/15/2036 ++ ..................... 175 181 ----------- TOTAL NON-AGENCY MORTGAGE-BACKED OBLIGATIONS ...................... 384 -----------
SHARES ------------ SHORT TERM INVESTMENTS - 5.69% Columbia Government Reserve Fund .................................. 9,442,724 9,443 ----------- TOTAL INVESTMENTS - 100.81% (COST $196,597) .......................... $ 167,209 LIABILITIES, NET OF OTHER ASSETS - (0.81%) ........................... (1,350) ----------- TOTAL NET ASSETS - 100.00% ........................................... $ 165,859 ===========
Percentages are stated as a percent of net assets. ++ 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 $38,200 or 23.03% of net assets. The Fund has no right to demand registration of these securities. # Non-income producing - Issuer is in default. ss. 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. See accompanying notes 21 AMERICAN BEACON ENHANCED INCOME FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ----------- (DOLLARS IN THOUSANDS) COMMON STOCKS - 2.85% CONSUMER DISCRETIONARY - 0.24% SPECIALTY RETAIL - 0.24% NIKE, Inc. ..................................................... 3,890 $ 204 ----------- CONSUMER STAPLES - 0.21% BEVERAGES - 0.21% Coca-Cola Co. .................................................. 4,160 179 ----------- ENERGY - 0.74% ENERGY EQUIPMENT & SERVICES - 0.74% ENSCO International, Inc. ...................................... 3,800 108 Noble Corp. .................................................... 10,150 277 Transocean Ltd. ## ............................................. 3,500 236 ----------- TOTAL ENERGY ...................................................... 621 ----------- FINANCIALS - 0.41% DIVERSIFIED FINANCIALS - 0.41% BlackRock, Inc. ................................................ 625 92 T Rowe Price Group, Inc. ....................................... 6,500 250 ----------- TOTAL FINANCIALS .................................................. 342 ----------- HEALTH CARE - 0.18% OPTICAL SUPPLIES - 0.18% Alcon, Inc. .................................................... 1,630 150 ----------- INDUSTRIALS - 0.13% AEROSPACE & DEFENSE - 0.13% United Technologies Corp. ...................................... 2,150 105 ----------- INFORMATION TECHNOLOGY - 0.94% COMMUNICATIONS EQUIPMENT - 0.56% Cisco Systems, Inc. ## ......................................... 9,280 179 QUALCOMM, Inc. ................................................. 6,775 287 ----------- 466 ----------- IT CONSULTING & SERVICES - 0.38% Accenture Ltd. ................................................. 10,970 323 ----------- TOTAL INFORMATION TECHNOLOGY ...................................... 789 ----------- TOTAL COMMON STOCKS ............................................... 2,390 ----------- CONVERTIBLE PREFERRED STOCKS - 1.40% CONSUMER STAPLES - 0.53% FOOD PRODUCTS - 0.53% Bunge Ltd. ..................................................... 3,325 443 -----------
SHARES VALUE ------------ ----------- (DOLLARS IN THOUSANDS) FINANCIALS - 0.32% DIVERSIFIED FINANCIALS - 0.32% Bank of America Corp. .......................................... 475 $ 274 ----------- INDUSTRIALS - 0.20% HOUSEHOLD DURABLES - 0.20% Stanley Works .................................................. 255 166 ----------- MATERIALS - 0.35% METALS & MINING - 0.35% Freeport-McMoRan Copper & Gold, Inc. ........................... 4,360 293 ----------- TOTAL CONVERTIBLE PREFERRED STOCKS ................................ 1,176 ----------- PREFERRED STOCKS - 1.22% CONSUMER DISCRETIONARY - 0.36% FOOD PRODUCTS - 0.36% Archer-Daniels-Midland Co. ..................................... 8,850 296 ----------- FINANCIALS - 0.48% DIVERSIFIED FINANCIALS - 0.43% Citigroup, Inc. ................................................ 11,500 364 ----------- INSURANCE - 0.05% American International Group, Inc. ............................. 8,100 41 ----------- TOTAL FINANCIALS .................................................. 405 ----------- HEALTH CARE - 0.38% PHARMACEUTICALS - 0.38% Schering-Plough Corp. .......................................... 1,510 319 ----------- TOTAL PREFERRED STOCKS ............................................ 1,020 -----------
PAR AMOUNT ------------ CORPORATE OBLIGATIONS - 31.46% AEROSPACE & DEFENSE - 0.31% Raytheon Co., 5.375%, Due 4/1/2013 ........................................ $ 250 260 ----------- BANKS - 5.38% Bank of America Corp., 7.80%, Due 9/15/2016 ........................................ 600 413 6.00%, Due 9/1/2017 ......................................... 400 335 Bank of New York Mellon Corp., 5.125%, Due 8/27/2013 ....................................... 350 363 Bank One Corp., 4.90%, Due 4/30/2015 ........................................ 250 224
See accompanying notes 22 AMERICAN BEACON ENHANCED INCOME FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Citigroup, Inc., 5.125%, Due 2/14/2011 ....................................... $ 1,625 $ 1,523 6.125%, Due 11/21/2017 ...................................... 275 227 ING Bank, NV, 5.125%, Due 5/1/2015 ++ ..................................... 300 264 JP Morgan Chase & Co., 6.00%, Due 1/15/2018 ........................................ 250 243 Wells Fargo & Co., 5.25%, Due 10/23/2012 ....................................... 660 662 5.625%, Due 12/11/2017 ...................................... 275 256 ----------- 4,510 ----------- BEVERAGES - 0.49% Constellation Brands, Inc., 7.25%, Due 9/1/2016 ......................................... 425 410 ----------- COMMUNICATIONS - 1.37% Comcast Cable Communications Holdings, Inc., 8.375%, Due 3/15/2013 ....................................... 500 551 DirecTV Holdings LLC/DirecTV Financing Co., 8.375%, Due 3/15/2013 ....................................... 300 305 Time Warner Cable, Inc., 5.85%, Due 5/1/2017 ......................................... 300 288 ----------- 1,144 ----------- CONSUMER DISCRETIONARY - 1.39% JC Penney Corp, Inc., 5.75%, Due 2/15/2018 ........................................ 150 131 Royal Caribbean Cruises Ltd., 7.50%, Due 10/15/2027 ....................................... 500 312 Wal-Mart Stores, Inc., 7.55%, Due 2/15/2030 ........................................ 325 375 Wesco Distribution, Inc., 7.50%, Due 10/15/2017 ....................................... 450 343 ----------- 1,161 ----------- CONSUMER STAPLES - 0.91% Coca-Cola Enterprises, Inc., 7.375%, Due 3/3/2014 ........................................ 150 171 Hanesbrands, Inc., 5.698%, Due 12/15/2014 # .................................... 440 337 Kellogg Co., 4.25%, Due 3/6/2013 ......................................... 250 253 ----------- 761 ----------- ENERGY - 1.28% Canadian Natural Resources Ltd., 6.25%, Due 3/15/2038 ........................................ 325 264
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) ConocoPhillips, 5.20%, Due 5/15/2018 ........................................ $ 325 $ 319 EOG Resources Canada, Inc., 4.75%, Due 3/15/2014 ++ ..................................... 250 251 Hornbeck Offshore Services, Inc., 6.125%, Due 12/1/2014 ....................................... 290 239 ----------- 1,073 ----------- FINANCE - 4.39% American General Finance Corp., 4.875%, Due 5/15/2010 ....................................... 300 199 General Electric Capital Corp., 5.65%, Due 6/9/2014 ......................................... 500 497 5.625%, Due 5/1/2018 ........................................ 250 218 Goldman Sachs Group, Inc., 4.75%, Due 7/15/2013 ........................................ 250 242 6.25%, Due 9/1/2017 ......................................... 250 236 HSBC Finance Corp., 5.25%, Due 1/14/2011 ........................................ 1,300 1,262 JP Morgan Chase & Co., 6.75%, Due 2/1/2011 ......................................... 800 830 Merrill Lynch & Co., Inc., 6.11%, Due 1/29/2037 ........................................ 325 190 ----------- 3,674 ----------- HEALTH CARE - 0.14% Psychiatric Solutions, Inc., 7.75%, Due 7/15/2015 ........................................ 125 114 ----------- INDUSTRIALS - 5.35% American Honda Finance Corp., 4.625%, Due 4/2/2013 ++ ..................................... 325 290 BE Aerospace, Inc., 8.50%, Due 7/1/2018 ......................................... 325 294 Burlington Northern Santa Fe Corp., 5.75%, Due 3/15/2018 ........................................ 325 323 Canadian National Railway Co., 5.55%, Due 5/15/2018 ........................................ 250 253 Caterpillar Financial Services Corp., 4.15%, Due 1/15/2010 ........................................ 300 304 4.25%, Due 2/8/2013 ......................................... 250 243 Daimler Finance NA LLC, 5.875%, Due 3/15/2011 ....................................... 250 247 5.75%, Due 9/8/2011 ......................................... 250 246 Gardner Denver, Inc., 8.00%, Due 5/1/2013 ......................................... 300 262 Goodyear Tire & Rubber Co., 7.857%, Due 8/15/2011 ....................................... 300 279
See accompanying notes 23 AMERICAN BEACON ENHANCED INCOME FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Honeywell International, Inc., 4.25%, Due 3/1/2013 ......................................... $ 250 $ 260 Kansas City Southern Railway, 13.00%, Due 12/15/2013 ...................................... 210 223 NBTY, Inc., 7.125%, Due 10/1/2015 ....................................... 150 135 Nissan Motor Acceptance Corp., 5.625%, Due 3/14/2011 ++ .................................... 300 273 Norfolk Southern Corp., 5.75%, Due 4/1/2018 ......................................... 325 320 Terex Corp., 8.00%, Due 11/15/2017 ....................................... 125 103 Union Pacific Corp., 6.50%, Due 4/15/2012 ........................................ 250 259 United Technologies Corp., 6.125%, Due 7/15/2038 ....................................... 165 164 ----------- 4,478 ----------- INSURANCE - 2.03% Aegon Funding Corp., 5.75%, Due 12/15/2020 ....................................... 350 287 American International Group, Inc., 5.85%, Due 1/16/2018 ........................................ 250 84 6.25%, Due 5/1/2036 ......................................... 325 111 Lincoln National Corp., 4.75%, Due 2/15/2014 ........................................ 105 67 MetLife, Inc., 6.375%, Due 6/15/2034 ....................................... 350 269 Metropolitan Life Global Funding I, 4.625%, Due 8/19/2010 ++ .................................... 700 681 Prudential Financial, Inc., 4.50%, Due 7/15/2013 ........................................ 250 203 ----------- 1,702 ----------- INTERNET & CATALOG RETAIL - 0.32% Expedia, Inc., 7.456%, Due 8/15/2018 ....................................... 300 271 ----------- PHARMACEUTICALS - 0.56% Bristol-Myers Squibb Co., 5.45%, Due 5/1/2018 ......................................... 125 128 GlaxoSmithKline Capital, Inc., 5.65%, Due 5/15/2018 ........................................ 125 130 Pfizer, Inc., 5.35%, Due 3/15/2015 ........................................ 200 215 ----------- 473 ----------- REAL ESTATE - 0.79% ProLogis, 5.50%, Due 4/1/2012 ......................................... 250 203
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) 5.625%, Due 11/15/2016 ...................................... $ 250 $ 168 Simon Property Group LP, 5.30%, Due 5/30/2013 ........................................ 325 290 ----------- 661 ----------- TECHNOLOGY - 2.74% Cisco Systems, Inc., 5.25%, Due 2/22/2011 ........................................ 250 266 Hewlett-Packard Co., 4.50%, Due 3/1/2013 ......................................... 325 337 International Business Machines Corp., 7.625%, Due 10/15/2018 ...................................... 150 178 Jabil Circuit, Inc., 8.25%, Due 3/15/2018 ........................................ 325 268 Lender Processing Services, Inc., 8.125%, Due 7/1/2016 ........................................ 325 322 Seagate Technology, 6.80%, Due 10/1/2016 ........................................ 350 252 SunGard Data Systems, Inc., 9.125%, Due 8/15/2013 ....................................... 300 286 Syniverse Technologies, Inc., 7.75%, Due 8/15/2013 ........................................ 325 276 Xerox Corp., 5.65%, Due 5/15/2013 ........................................ 125 113 ----------- 2,298 ----------- TELEPHONE - 2.84% America Movil, S.A.B. de C.V., 6.375%, Due 3/1/2035 ........................................ 325 262 AT&T Wireless Services, Inc., 7.875%, Due 3/1/2011 ........................................ 250 271 AT&T, Inc., 5.625%, Due 6/15/2016 ....................................... 250 255 5.50%, Due 2/1/2018 ......................................... 400 399 6.80%, Due 5/15/2036 ........................................ 125 121 6.40%, Due 5/15/2038 ........................................ 200 188 Verizon Communications, Inc., 5.50%, Due 4/1/2017 ......................................... 250 249 6.90%, Due 4/15/2038 ........................................ 325 321 Vodafone Group plc, 6.15%, Due 2/27/2037 ........................................ 325 314 ----------- 2,380 ----------- UTILITIES - 1.17% Duke Energy Carolinas LLC, 5.10%, Due 4/15/2018 ........................................ 250 254 MidAmerican Energy Holdings Co., 6.125%, Due 4/1/2036 ........................................ 325 282 Pacific Gas & Electric Co., 6.25%, Due 12/1/2013 ........................................ 175 190
See accompanying notes 24 AMERICAN BEACON ENHANCED INCOME FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Virginia Electric and Power Co., 5.40%, Due 4/30/2018 ........................................ $ 250 $ 255 ----------- 981 ----------- TOTAL CORPORATE OBLIGATIONS ....................................... 26,351 ----------- CONVERTIBLE OBLIGATIONS - 13.61% BASIC MATERIALS - 0.79% Newmont Mining Corp., 3.00%, Due 2/15/2012 ........................................ 50 60 1.25%, Due 7/15/2014 ........................................ 325 364 1.625%, Due 7/15/2017 ....................................... 220 239 ----------- 663 ----------- COMMUNICATIONS - 1.88% Anixter International, Inc., 1.00%, Due 2/15/2013 ........................................ 400 336 Interpublic Group of Cos., Inc., 4.25%, Due 3/15/2023 ........................................ 240 216 Symantec Corp., 1.00%, Due 6/15/2013 ........................................ 750 806 VeriSign, Inc., 3.25%, Due 8/15/2037 ........................................ 300 217 ----------- 1,575 ----------- CONSUMER DISCRETIONARY - 0.93% Archer-Daniels-Midland Co., 0.875%, Due 2/15/2014 ....................................... 280 257 Best Buy Co., Inc., 2.25%, Due 1/15/2022 ........................................ 200 199 BorgWarner, Inc., 3.50%, Due 4/15/2012 ........................................ 80 92 GameStop Corp., 8.00%, Due 10/1/2012 ........................................ 225 228 ----------- 776 ----------- CONSUMER STAPLES - 0.27% Kinetic Concepts, Inc., 3.25%, Due 4/15/2015 ++ ..................................... 310 231 ----------- ENERGY - 1.07% Cameron International Corp., 2.50%, Due 6/15/2026 ........................................ 190 207 2.50%, Due 5/15/2037 ........................................ 570 413 Schlumberger Ltd., 2.125%, Due 6/1/2023 ........................................ 40 55 SESI LLC, 1.50%, Due 12/15/2026 ....................................... 270 220 ----------- 895 -----------
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) FINANCE - 0.68% Affiliated Managers Group, Inc., 3.95%, Due 8/15/2038 ++ ..................................... $ 370 $ 295 Leucadia National Corp., 3.75%, Due 4/15/2014 ........................................ 250 275 ----------- 570 ----------- HEALTH CARE - 0.78% Gilead Sciences, Inc., 0.50%, Due 5/1/2011 ......................................... 360 455 Henry Schein, Inc., 3.00%, Due 8/15/2034 ........................................ 100 108 Hologic, Inc., 2.00%, Due 12/15/2037 ....................................... 130 92 ----------- 655 ----------- INDUSTRIAL - 0.07% Ingersoll-Rand Co Ltd., 4.50%, Due 4/15/2012 ........................................ 40 56 ----------- INDUSTRIALS - 1.53% Alliant Techsystems, Inc., 2.75%, Due 9/15/2011 ........................................ 320 326 Danaher Corp., Zero Coupon, Due 1/22/2021 .................................. 370 332 Fisher Scientific International, Inc., 3.25%, Due 3/1/2024 ......................................... 230 269 SEACOR Holdings, Inc., 2.875%, Due 12/15/2024 ...................................... 210 214 Trinity Industries, Inc., 3.875%, Due 6/1/2036 ........................................ 250 139 ----------- 1,280 ----------- PHARMACEUTICALS - 2.14% Amgen, Inc., 0.375%, Due 2/1/2013 ........................................ 675 610 Beckman Coulter, Inc., 2.50%, Due 12/15/2036 ....................................... 213 215 Life Technologies Corp., 1.50%, Due 2/15/2024 ........................................ 246 233 Mylan, Inc., 1.25%, Due 3/15/2012 ........................................ 480 424 Teva Pharmaceutical Finance LLC, 0.25%, Due 2/1/2026 ......................................... 295 308 ----------- 1,790 ----------- TECHNOLOGY - 3.47% Apogent Technologies, Inc., 0.07%, Due 12/15/2033 # ..................................... 100 120
See accompanying notes 25 AMERICAN BEACON ENHANCED INCOME FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) CACI International, Inc., 2.125%, Due 5/1/2014 ........................................ $ 230 $ 209 DST Systems, Inc., 4.125%, Due 8/15/2023 ....................................... 220 216 EMC Corp., 1.75%, Due 12/1/2013 ........................................ 865 889 Intel Corp., 2.95%, Due 12/15/2035 ....................................... 255 218 NetApp, Inc., 1.75%, Due 6/1/2013 ++ ...................................... 775 689 Sybase, Inc., 1.75%, Due 2/22/2025 ........................................ 405 565 ----------- 2,906 ----------- TOTAL CONVERTIBLE OBLIGATIONS ..................................... 11,397 ----------- NON-AGENCY MORTGAGE-BACKED OBLIGATIONS - 2.91% COMMERCIAL MORTGAGE-BACKED SECURITY - 2.91% Banc of America Commercial Mortgage, Inc., 2005-6 A1, 5.001%, Due 9/10/2047 ............................ 389 388 2007-2 A2, 5.634%, Due 4/10/2049 ............................ 650 556 JP Morgan Chase Commercial Mortgage Securities Corp., 2005-LDP3 A1, 4.655%, Due 8/15/2042 ......................... 100 99 2007-CB19 A4, 5.937%, Due 2/12/2049 ......................... 400 285 2007-CB20 A2, 5.629%, Due 2/12/2051 ......................... 650 556 LB-UBS Commercial Mortgage Trust, 2004-C1 A4, 5.424%, Due 2/15/2040 ........................... 450 325 Wachovia Bank Commercial Mortgage Trust, 2007-C32 A2, 5.924%, Due 6/15/2049 .......................... 260 224 ----------- TOTAL NON-AGENCY MORTGAGE-BACKED OBLIGATIONS ...................... 2,433 ----------- ASSET-BACKED SECURITIES - 3.58% American Express Credit Account Master Trust, 2006-2 A, 5.35%, Due 1/15/2014 .............................. 1,300 1,307 Capital Auto Receivables Asset Trust, 2006-SN1A A4A, 5.32%, Due 3/20/2010 ++ ...................... 385 384 Capital One Multi-Asset Execution Trust, 2006-A10 A10, 5.15%, Due 6/16/2014 .......................... 1,000 998 Volkswagen Auto Loan Enhanced Trust, 2008-2 A4A, 6.24%, Due 7/20/2015 ............................ 300 308 ----------- TOTAL ASSET-BACKED SECURITIES ..................................... 2,997 ----------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 23.17% FEDERAL HOME LOAN MORTGAGE CORPORATION - 9.81% 5.00%, Due 2/1/2021 ......................................... 1,025 1,064
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) 4.50%, Due 4/1/2021 ......................................... $ 986 $ 1,014 5.00%, Due 9/1/2035 ......................................... 2,221 2,287 5.50%, Due 4/1/2037 ......................................... 752 779 5.00%, Due 3/1/2038 ......................................... 1,509 1,553 5.50%, Due 5/1/2038 ......................................... 1,465 1,517 ----------- 8,214 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION - 9.47% 6.50%, Due 7/1/2032 ......................................... 382 410 5.50%, Due 6/1/2033 ......................................... 875 911 4.50%, Due 9/1/2034 ......................................... 417 425 5.50%, Due 12/1/2035 ........................................ 913 949 5.00%, Due 2/1/2036 ......................................... 750 774 5.50%, Due 4/1/2036 ......................................... 1,398 1,452 5.50%, Due 2/1/2037 ......................................... 1,127 1,169 6.00%, Due 9/1/2037 ......................................... 765 800 6.00%, Due 1/1/2038 ......................................... 999 1,046 ----------- 7,936 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 3.89% 4.201%, Due 8/16/2026 ....................................... 468 476 6.00%, Due 2/15/2033 ........................................ 815 852 5.50%, Due 4/15/2033 ........................................ 1,086 1,132 5.00%, Due 5/15/2033 ........................................ 768 797 ----------- 3,257 ----------- TOTAL U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS ..................... 19,407 ----------- U.S. AGENCY OBLIGATIONS - 1.16% FEDERAL HOME LOAN MORTGAGE CORPORATION - 1.16% 6.25%, Due 7/15/2032 ........................................ 800 974 ----------- U.S. TREASURY OBLIGATIONS - 11.36% 1.375%, Due 3/15/2012 ....................................... 2,000 2,004 4.125%, Due 5/15/2015 ....................................... 2,500 2,758 3.75%, Due 11/15/2018 + ..................................... 1,000 1,051 6.25%, Due 8/15/2023 ........................................ 1,500 1,875 5.25%, Due 11/15/2028 ....................................... 1,050 1,211 4.75%, Due 2/15/2037 ........................................ 550 611 ----------- TOTAL U.S. TREASURY OBLIGATIONS ...................................... 9,510 -----------
SHARES ------------ SHORT TERM INVESTMENTS - 6.56% Columbia Government Reserve Fund .................................. 5,495,956 5,496 ----------- SECURITIES LENDING COLLATERAL - 1.30% American Beacon U.S. Government Money Market Select Fund ss. ...... 234,539 234
See accompanying notes 26 AMERICAN BEACON ENHANCED INCOME FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ----------- (DOLLARS IN THOUSANDS) State Street Navigator Securities Lending Prime Portfolio ...... $ 857,961 $ 858 ----------- TOTAL SECURITIES LENDING COLLATERAL ............................... 1,092 ----------- TOTAL INVESTMENTS 100.58% - (COST $87,912) ........................... 84,243 LIABILITIES, NET OF OTHER ASSETS - (0.58%) ........................... (488) ----------- TOTAL NET ASSETS - 100.00% ........................................... $ 83,755 ===========
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, 2009. ++ 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 $3,358 or 4.01% 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. ss. The Fund is affiliated by having the same investment advisor. See accompanying notes 27 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) CORPORATE OBLIGATIONS - 26.11% AEROSPACE & DEFENSE - 0.09% Raytheon Co., 5.375%, Due 4/1/2013 ................................ $ 200 $ 208 ----------- BANKS - 3.15% Bank of America Corp., 7.80%, Due 9/15/2016 ........................................... 500 344 6.00%, Due 9/1/2017 ............................................ 200 167 5.75%, Due 12/1/2017 ........................................... 960 784 Bank of New York Mellon Corp., 4.95%, Due 11/1/2012 ........................................... 140 145 5.125%, Due 8/27/2013 .......................................... 250 259 Bank One Corp., 5.90%, Due 11/15/2011 .......................................... 940 954 4.90%, Due 4/30/2015 + ......................................... 200 180 BP Capital Markets plc, 3.125%, Due 3/10/2012 ..................... 520 528 Citigroup, Inc., 5.125%, Due 2/14/2011 .......................................... 1,200 1,124 6.125%, Due 11/21/2017 ......................................... 555 458 ING Bank, NV, 5.125%, Due 5/1/2015 ++ ............................. 250 220 JP Morgan Chase & Co., 6.75%, Due 2/1/2011 ............................................ 625 648 6.00%, Due 1/15/2018 ........................................... 250 243 Wachovia Corp., 5.70%, Due 8/1/2013 ............................... 100 98 Washington Mutual Finance Corp., 6.875%, Due 5/15/2011 ............ 230 210 Wells Fargo & Co., 5.25%, Due 10/23/2012 .......................................... 500 502 5.625%, Due 12/11/2017 ......................................... 200 186 ----------- 7,050 ----------- BASIC MATERIALS - 0.43% ArcelorMittal, 6.125%, Due 6/1/2018 ............................... 340 274 EI Du Pont de Nemours & Co., 5.875%, Due 1/15/2014 ................ 395 421 Lubrizol Corp., 8.875%, Due 2/1/2019 .............................. 255 277 ----------- 972 ----------- COMMUNICATIONS - 2.33% Alltel Corp., 7.00%, Due 7/1/2012 ................................. 215 227 British Telecommunications plc, 8.625%, Due 12/15/2010 # .......... 645 674 Comcast Cable Communications Holdings, Inc., 8.375%, Due 3/15/2013 650 717 Comcast Corp., 5.30%, Due 1/15/2014 ........................................... 555 560 5.875%, Due 2/15/2018 .......................................... 235 233 Nokia Corp., 5.375%, Due 5/15/2019 ................................ 650 644 Rogers Communications, Inc., 6.80%, Due 8/15/2018 ................. 250 262 Time Warner Cable, Inc., 8.25%, Due 2/14/2014 ........................................... 330 362
See accompanying notes 28 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) 5.85%, Due 5/1/2017 ............................................ $ 730 $ 702 Verizon Wireless Capital, LLC, 8.50%, Due 11/15/2018 ++ ........... 700 838 ----------- 5,219 ----------- CONSUMER DISCRETIONARY - 0.76% Best Buy Co., Inc., 6.75%, Due 7/15/2013 .......................... 240 237 Lowe's Companies, Inc., 5.50%, Due 10/15/2035 .......................................... 300 245 6.65%, Due 9/15/2037 ........................................... 130 130 Walgreen Co., 5.25%, Due 1/15/2019 ................................ 275 274 Wal-Mart Stores, Inc., 7.55%, Due 2/15/2030 ........................................... 250 288 6.20%, Due 4/15/2038 ........................................... 495 515 ----------- 1,689 ----------- CONSUMER STAPLES - 0.96% Altria Group, Inc., 9.70%, Due 11/10/2018 ......................... 375 438 Archer-Daniels-Midland Co., 6.45%, Due 1/15/2038 .................. 140 142 Coca-Cola Enterprises, Inc., 7.375%, Due 3/3/2014 ................. 175 200 Dr Pepper Snapple Group, Inc., 6.82%, Due 5/1/2018 ................ 140 136 Kellogg Co., 4.25%, Due 3/6/2013 .................................. 250 253 Kraft Foods, Inc., 6.75%, Due 2/19/2014 ........................................... 250 273 6.50%, Due 8/11/2017 ........................................... 290 301 Kroger Co., 7.50%, Due 1/15/2014 .................................. 220 245 Safeway, Inc., 6.25%, Due 3/15/2014 ............................... 140 149 ----------- 2,137 ----------- ENERGY - 1.83% Cameron International Corp., 6.375%, Due 7/15/2018 ................ 125 110 Canadian Natural Resources Ltd., 6.70%, Due 7/15/2011 ........................................... 400 415 6.25%, Due 3/15/2038 ........................................... 250 203 ConocoPhillips, 5.20%, Due 5/15/2018 ........................................... 250 245 5.75%, Due 2/1/2019 ............................................ 380 388 Consolidated Natural Gas Co., 6.00%, Due 10/15/2010 ............... 175 181 Energy Transfer Partners LP, 8.50%, Due 4/15/2014 ........................................... 340 367 9.00%, Due 4/15/2019 ........................................... 300 327 EOG Resources Canada, Inc., 4.75%, Due 3/15/2014 ++ ............... 200 201 Marathon Oil Corp., 6.00%, Due 10/1/2017 .......................... 275 262 Shell International Finance BV, 6.375%, Due 12/15/2038 ............ 450 479 TransCanada Pipelines Ltd., 7.625%, Due 1/15/2039 ................. 520 569 Valero Energy Corp., 9.375%, Due 3/15/2019 .......................................... 170 190 6.625%, Due 6/15/2037 .......................................... 205 162 ----------- 4,099 -----------
See accompanying notes 29 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) FINANCE - 3.55% American Express Co., 8.15%, Due 3/19/2038 ........................ $ 325 $ 308 American Express Credit Corp., 5.875%, Due 5/2/2013 ............... 495 488 American General Finance Corp., 4.875%, Due 5/15/2010 .......................................... 200 133 4.00%, Due 3/15/2011 ........................................... 430 218 Ameriprise Financial, Inc., 5.35%, Due 11/15/2010 ................. 930 917 Bear Stearns Cos., Inc., 6.40%, Due 10/2/2017 ........................................... 605 589 7.25%, Due 2/1/2018 ............................................ 270 276 CIT Group, Inc., 4.75%, Due 12/15/2010 ............................ 265 196 CME Group, Inc., 5.40%, Due 8/1/2013 .............................. 370 383 Countrywide Home Loans, Inc., 4.00%, Due 3/22/2011 ................ 70 66 General Electric Capital Corp., 4.375%, Due 3/3/2012 ........................................... 350 342 5.65%, Due 6/9/2014 ............................................ 450 447 5.625%, Due 5/1/2018 ........................................... 250 218 6.875%, Due 1/10/2039 .......................................... 370 290 Goldman Sachs Group, Inc., 4.75%, Due 7/15/2013 ........................................... 300 291 6.25%, Due 9/1/2017 ............................................ 200 189 5.95%, Due 1/18/2018 ........................................... 215 199 6.75%, Due 10/1/2037 ........................................... 245 187 HSBC Finance Corp., 5.25%, Due 1/14/2011 .......................... 1,000 970 International Lease Finance Corp., 5.75%, Due 6/15/2011 ........... 240 183 Merrill Lynch & Co., Inc., 5.45%, Due 2/5/2013 ............................................ 145 127 6.875%, Due 4/25/2018 .......................................... 305 257 6.11%, Due 1/29/2037 ........................................... 250 146 Novartis Capital Corp., 4.125%, Due 2/10/2014 ..................... 395 409 SLM Corp., 5.375%, Due 1/15/2013 .................................. 170 114 ----------- 7,943 ----------- HEALTH CARE - 0.71% Amgen, Inc., 6.40%, Due 2/1/2039 .................................. 445 448 Covidien International Finance SA, 5.45%, Due 10/15/2012 .......... 120 124 UnitedHealth Group, Inc., 5.25%, Due 3/15/2011 .................... 1,010 1,026 ----------- 1,598 ----------- INDUSTRIALS - 3.11% American Honda Finance Corp., 4.625%, Due 4/2/2013 ++ ............. 250 223 Burlington Northern Santa Fe Corp., 5.75%, Due 3/15/2018 .......... 250 249 Canadian National Railway Co., 5.55%, Due 5/15/2018 ........................................... 250 253 5.55%, Due 3/1/2019 ............................................ 165 168 Caterpillar Financial Services Corp., 4.15%, Due 1/15/2010 ........................................... 200 203
See accompanying notes 30 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Caterpillar Financial Services Corp., 4.85%, Due 12/7/2012 ........................................... $ 195 $ 194 4.25%, Due 2/8/2013 ............................................ 250 243 CRH America, Inc., 6.00%, Due 9/30/2016 ........................... 370 289 Daimler Finance NA LLC, 5.875%, Due 3/15/2011 .......................................... 300 297 5.75%, Due 9/8/2011 ............................................ 200 197 Eaton Corp., 5.60%, Due 5/15/2018 ................................. 195 182 Home Depot, Inc., 5.20%, Due 3/1/2011 ............................. 485 494 Honeywell International, Inc., 4.25%, Due 3/1/2013 ................ 250 260 ITT Corp., 4.90%, Due 5/1/2014 .................................... 940 953 John Deere Capital Corp., 4.125%, Due 1/15/2010 .......................................... 675 683 5.40%, Due 10/17/2011 .......................................... 480 498 Koninklijke Philips Electronics NV, 5.75%, Due 3/11/2018 .......... 165 165 Nissan Motor Acceptance Corp., 5.625%, Due 3/14/2011 ++ ........... 200 182 Norfolk Southern Corp., 5.75%, Due 4/1/2018 ....................... 250 246 Tyco Electronics Group SA, 6.55%, Due 10/1/2017 ................... 225 173 Tyco International Finance SA, 8.50%, Due 1/15/2019 ............... 185 198 Union Pacific Corp., 6.50%, Due 4/15/2012 ......................... 200 207 United Technologies Corp., 6.125%, Due 7/15/2038 .................. 125 124 Waste Management, Inc., 7.375%, Due 3/11/2019 ..................... 270 274 ----------- 6,955 ----------- INSURANCE - 1.13% Aegon Funding Corp., 5.75%, Due 12/15/2020 ........................ 200 164 American International Group, Inc., 5.85%, Due 1/16/2018 ........................................... 200 67 6.25%, Due 5/1/2036 ............................................ 250 85 John Hancock Global Funding II, 7.90%, Due 7/2/2010 ++ ............ 700 716 Lincoln National Corp., 4.75%, Due 2/15/2014 ...................... 50 32 MetLife, Inc., 5.375%, Due 12/15/2012 ......................................... 240 228 6.375%, Due 6/15/2034 .......................................... 200 154 Metropolitan Life Global Funding I, 4.625%, Due 8/19/2010 ++ ...... 500 486 Prudential Financial, Inc., 4.50%, Due 7/15/2013 ........................................... 200 163 5.10%, Due 9/20/2014 ........................................... 280 222 Willis North America, Inc., 6.20%, Due 3/28/2017 .................. 280 203 ----------- 2,520 ----------- PHARMACEUTICALS - 1.36% Bristol-Myers Squibb Co., 5.45%, Due 5/1/2018 ..................... 125 128 GlaxoSmithKline Capital, Inc., 5.65%, Due 5/15/2018 ........................................... 125 130 6.375%, Due 5/15/2038 .......................................... 325 335 Hospira, Inc., 6.05%, Due 3/30/2017 ............................... 205 184
See accompanying notes 31 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Pfizer, Inc., 4.45%, Due 3/15/2012 ........................................... $ 845 $ 888 5.35%, Due 3/15/2015 ........................................... 380 408 Wyeth Corp., 5.50%, Due 2/1/2014 .................................. 900 966 ----------- 3,039 ----------- REAL ESTATE - 0.55% Equity Residential, 5.125%, Due 3/15/2016 ......................... 380 313 ProLogis, 5.50%, Due 4/1/2012 ............................................ 300 244 5.625%, Due 11/15/2016 ......................................... 200 134 Simon Property Group LP, 5.30%, Due 5/30/2013 ........................................... 250 223 5.75%, Due 12/1/2015 ........................................... 370 304 ----------- 1,218 ----------- TECHNOLOGY - 1.91% Cisco Systems, Inc., 5.25%, Due 2/22/2011 ......................... 200 213 Computer Sciences Corp., 5.50%, Due 3/15/2013 ........................................... 220 218 6.50%, Due 3/15/2018 ........................................... 505 493 Hewlett-Packard Co., 4.25%, Due 2/24/2012 ........................................... 625 648 4.50%, Due 3/1/2013 ............................................ 250 259 6.125%, Due 3/1/2014 ........................................... 510 561 International Business Machines Corp., 7.625%, Due 10/15/2018 ..... 750 889 United Technologies Corp., 6.125%, Due 2/1/2019 ................... 820 883 Xerox Corp., 5.65%, Due 5/15/2013 ................................. 125 113 ----------- 4,277 ----------- TELEPHONE - 1.95% America Movil, S.A.B. de C.V., 6.375%, Due 3/1/2035 ............... 250 202 AT&T Wireless Services, Inc., 7.875%, Due 3/1/2011 ........................................... 200 217 8.75%, Due 3/1/2031 ............................................ 435 498 AT&T, Inc., 5.10%, Due 9/15/2014 ........................................... 1,155 1,200 5.625%, Due 6/15/2016 .......................................... 200 204 5.50%, Due 2/1/2018 ............................................ 300 299 6.80%, Due 5/15/2036 ........................................... 125 121 6.40%, Due 5/15/2038 ........................................... 125 117 Deutsche Telekom AG, 8.50%, Due 6/15/2010 ......................... 450 473 Telefonica Emisiones SAU, 5.984%, Due 6/20/2011 ................... 285 297 Verizon Communications, Inc., 5.50%, Due 4/1/2017 ............................................ 250 249 6.90%, Due 4/15/2038 ........................................... 250 247 Vodafone Group plc, 6.15%, Due 2/27/2037 .......................... 250 242 ----------- 4,366 -----------
See accompanying notes 32 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) UTILITIES - 2.29% Columbus Southern Power Co., 5.50%, Due 3/1/2013 .................. $ 495 $ 501 Dominion Resources, Inc., Series A, 5.60%, Due 11/15/2016 ................................ 475 466 8.875%, Due 1/15/2019 .......................................... 80 93 Duke Energy Carolinas LLC, 5.10%, Due 4/15/2018 ................... 250 254 Duke Energy Indiana, Inc., 6.05%, Due 6/15/2016 ................... 355 362 MidAmerican Energy Holdings Co., 5.875%, Due 10/1/2012 .......................................... 405 418 6.125%, Due 4/1/2036 ........................................... 250 217 Pacific Gas & Electric Co., 6.25%, Due 12/1/2013 .................. 150 163 Public Service Enterprise Group, Inc., 6.95%, Due 6/1/2012 ........ 590 604 Southern Power Co., 6.25%, Due 7/15/2012 .......................... 450 466 Union Electric Co., 6.70%, Due 2/1/2019 ........................... 370 364 Virginia Electric and Power Co., 5.40%, Due 4/30/2018 ............. 250 255 Westar Energy, Inc., 6.00%, Due 7/1/2014 .......................... 200 200 Wisconsin Electric Power Co., 6.25%, Due 12/1/2015 ................ 200 211 Xcel Energy, Inc., 5.613%, Due 4/1/2017 ........................... 581 554 ----------- 5,128 ----------- TOTAL CORPORATE OBLIGATIONS ....................................... 58,418 ----------- NON-AGENCY MORTGAGE-BACKED OBLIGATIONS - 4.62% Banc of America Commercial Mortgage, Inc., 2005-6 A1, 5.001%, Due 9/10/2047 ............................... 195 194 2007-2 A2, 5.634%, Due 4/10/2049 ............................... 450 385 Bear Stearns Commercial Mortgage Securities, Inc., 2006-T22 A2, 5.63%, Due 4/12/2038 .............................. 830 775 2004-PWR5 A4, 4.831%, Due 7/11/2042 ............................ 835 736 2005-T20 A2, 5.127%, Due 10/12/2042 ............................ 430 415 Chase Mortgage Finance Corp., 2006-A1 A1, 6.037%, Due 9/25/2036 ss. ............................................................ 900 690 Citicorp Mortgage Securities, Inc., 2006-3 2A1, 5.50%, Due 6/25/2021 ...................................................... 422 372 Citigroup Commercial Mortgage Trust, 2004-C2 A3, 4.38%, Due 10/15/2041 ..................................................... 770 698 Citigroup/Deutsche Bank Commercial Mortgage Trust, 2007-CD5 A4, 5.886%, Due 11/15/2044 ......................................... 840 655 Countrywide Home Loan Mortgage Pass Through Trust, 2007-18 A1, 6.00%, Due 9/25/2037 ........................................... 764 516 GE Capital Commercial Mortgage Corp., 2003-C2 A2, 4.17%, Due 7/10/2037 ...................................................... 138 136 JP Morgan Chase Commercial Mortgage Securities Corp., 2004-CBX A4, 4.529%, Due 1/12/2037 ............................. 255 223 2005-LDP3 A1, 4.655%, Due 8/15/2042 ............................ 57 57 2005-LDP1 A2, 4.625%, Due 3/15/2046 ............................ 784 759 2006-LDP9 A3, 5.336%, Due 5/15/2047 ............................ 695 537 2007-CB19 A4, 5.937%, Due 2/12/2049 ............................ 300 214 2007-CB20 A2, 5.629%, Due 2/12/2051 ............................ 500 428 JP Morgan Mortgage Trust, 2007-S3 1A90, 7.00%, Due 8/25/2037 ...... 454 295 LB-UBS Commercial Mortgage Trust, 2004-C1 A4, 5.424%, Due 2/15/2040 ...................................................... 400 288 Morgan Stanley Capital I, 2007-IQ14 A4, 5.692%, Due 4/15/2049 ..... 910 621
See accompanying notes 33 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) Prime Mortgage Trust, 2005-2, 5.25%, Due 7/25/2020 ................ $ 515 $ 517 Wachovia Bank Commercial Mortgage Trust, 2007-C32 A2, 5.924%, Due 6/15/2049 ...................................................... 210 181 Wells Fargo Mortgage Backed Securities Trust, 2006-11 A8, 6.00%, Due 9/25/2036 ............................... 487 387 2007-7 A1, 6.00%, Due 6/25/2037 ................................ 456 267 ----------- TOTAL NON-AGENCY MORTGAGE-BACKED OBLIGATIONS ...................... 10,346 ----------- ASSET-BACKED SECURITIES - 1.04% American Express Credit Account Master Trust, 2006-2 A, 5.35%, Due 1/15/2014 ...................................................... 1,000 1,005 Capital Auto Receivables Asset Trust, 2006-SN1A A4A, 5.32%, Due 3/20/2010 ++ ................................................... 257 256 Capital One Multi-Asset Execution Trust, 2006-A10 A10, 5.15%, Due 6/16/2014 ...................................................... 750 749 Volkswagen Auto Loan Enhanced Trust, 2008-2 A4A, 6.24%, Due 7/20/2015 ...................................................... 300 308 ----------- TOTAL ASSET-BACKED SECURITIES ..................................... 2,318 ----------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 34.60% FEDERAL HOME LOAN MORTGAGE CORPORATION - 9.09% 4.50%, Due 3/1/2019 ............................................ 477 493 5.00%, Due 10/1/2020 ........................................... 1,164 1,207 5.50%, Due 12/1/2022 ........................................... 160 166 5.00%, Due 4/1/2023 ............................................ 410 425 5.50%, Due 1/1/2024 ............................................ 751 781 5.00%, Due 8/1/2033 ............................................ 669 689 5.50%, Due 2/1/2034 ............................................ 907 942 6.00%, Due 8/1/2034 ............................................ 416 437 5.00%, Due 8/1/2035 ............................................ 447 461 5.00%, Due 9/1/2035 ............................................ 644 664 5.00%, Due 9/1/2035 ............................................ 1,111 1,144 6.00%, Due 8/1/2036 ............................................ 897 938 5.50%, Due 11/1/2036 ........................................... 646 669 5.50%, Due 4/1/2037 ............................................ 1,504 1,557 5.50%, Due 5/1/2037 ............................................ 455 471 6.00%, Due 9/1/2037 ............................................ 315 329 6.00%, Due 12/1/2037 ........................................... 371 389 5.00%, Due 3/1/2038 ............................................ 2,137 2,198 6.00%, Due 3/1/2038 ............................................ 3,073 3,210 5.00%, Due 3/1/2038 ............................................ 1,110 1,142 5.50%, Due 5/1/2038 ............................................ 1,077 1,115 5.50%, Due 6/1/2038 ............................................ 876 907 ----------- 20,334 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION - 24.77% 6.50%, Due 2/1/2017 ............................................ 192 203 5.00%, Due 12/1/2017 ........................................... 688 718 4.50%, Due 9/1/2018 ............................................ 1,252 1,296 4.00%, Due 8/1/2020 ............................................ 379 385 5.50%, Due 5/1/2023 ............................................ 61 63
See accompanying notes 34 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) 5.00%, Due 12/1/2023 ........................................... $ 700 $ 725 5.00%, Due 3/1/2024 ............................................ 1,950 2,020 5.00%, Due 3/1/2034 ............................................ 842 869 5.50%, Due 6/1/2034 ............................................ 452 470 4.50%, Due 9/1/2034 ............................................ 278 284 5.50%, Due 2/1/2035 ............................................ 1,005 1,046 5.00%, Due 11/1/2035 ........................................... 1,495 1,541 5.50%, Due 12/1/2035 ........................................... 703 730 5.50%, Due 12/1/2035 ........................................... 384 399 5.50%, Due 1/1/2036 ............................................ 623 647 5.50%, Due 1/1/2036 ............................................ 979 1,017 5.50%, Due 2/1/2036 ............................................ 756 785 5.00%, Due 2/1/2036 ............................................ 750 774 5.00%, Due 3/1/2036 ............................................ 696 717 5.50%, Due 4/1/2036 ............................................ 1,748 1,816 6.00%, Due 9/1/2036 ............................................ 395 414 6.50%, Due 9/1/2036 ............................................ 1,456 1,547 5.50%, Due 11/1/2036 ........................................... 599 621 6.00%, Due 11/1/2036 ........................................... 710 743 6.50%, Due 12/1/2036 ........................................... 670 711 6.00%, Due 12/1/2036 ........................................... 644 674 5.50%, Due 2/1/2037 ............................................ 1,127 1,169 5.50%, Due 8/1/2037 ............................................ 2,388 2,482 6.00%, Due 8/1/2037 ............................................ 748 783 6.50%, Due 8/1/2037 ............................................ 1,009 1,070 6.00%, Due 9/1/2037 ............................................ 1,147 1,201 6.00%, Due 11/1/2037 ........................................... 1,295 1,355 6.00%, Due 1/1/2038 ............................................ 1,599 1,673 5.50%, Due 3/1/2038 ............................................ 7,092 7,354 5.00%, Due 3/1/2038 ............................................ 167 172 5.00%, Due 4/1/2038 ............................................ 910 937 5.00%, Due 4/1/2038 ............................................ 6,941 7,146 5.00%, Due 5/1/2038 ............................................ 3,903 4,018 5.50%, Due 6/1/2038 ............................................ 867 899 5.00%, Due 6/1/2038 ............................................ 1,154 1,188 5.50%, Due 6/1/2038 ............................................ 2,651 2,749 ----------- 55,411 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.74% 4.201%, Due 8/16/2026 .......................................... 268 272 6.50%, Due 3/15/2028 ........................................... 372 398 6.00%, Due 4/15/2031 ........................................... 442 463
See accompanying notes 35 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) 5.50%, Due 2/20/2034 ........................................... $ 506 $ 526 ----------- 1,659 ----------- TOTAL U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS ..................... 77,404 ----------- U.S. AGENCY OBLIGATIONS - 15.85% FDIC GUARANTEED - 5.84% Citibank NA (FDIC Guaranteed), 1.625%, Due 3/30/2011 ........... 5,000 5,026 Morgan Stanley (FDIC Due Guaranteed), 2.25%, 3/13/2012 ......... 5,000 5,027 Bank of America Corp. (FDIC Guaranteed), 2.10%, Due 4/30/2012 .. 3,000 3,019 ----------- 13,072 ----------- FEDERAL HOME LOAN BANK - 1.65% 4.50%, Due 9/16/2013 + ......................................... 3,400 3,694 ----------- FEDERAL HOME LOAN MORTGAGE CORPORATION - 5.01% 1.50%, Due 1/7/2011 + .......................................... 5,000 5,027 5.125%, Due 4/18/2011 + ........................................ 4,400 4,719 6.25%, Due 7/15/2032 ........................................... 1,200 1,461 ----------- 11,207 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.35% 2.875%, Due 12/11/2013 + ....................................... 2,000 2,041 5.125%, Due 1/2/2014 ........................................... 385 395 4.625%, Due 10/15/2014 + ....................................... 500 550 5.375%, Due 6/12/2017 + ........................................ 4,000 4,506 ----------- 7,492 ----------- TOTAL U.S. AGENCY OBLIGATIONS ..................................... 35,465 ----------- U.S. TREASURY OBLIGATIONS - 15.23% 1.375%, Due 2/15/2012 .......................................... 2,925 2,933 2.00%, Due 11/30/2013 + ........................................ 2,000 2,009 1.75%, Due 3/31/2014 + ......................................... 3,910 3,866 4.125%, Due 5/15/2015 + ........................................ 5,000 5,516 4.25%, Due 11/15/2017 + ........................................ 2,400 2,632 9.125%, Due 5/15/2018 .......................................... 650 953 2.75%, Due 2/15/2019 + ......................................... 4,590 4,446 7.875%, Due 2/15/2021 + ........................................ 1,050 1,465 6.25%, Due 8/15/2023 + ......................................... 1,900 2,375 6.875%, Due 8/15/2025 + ........................................ 770 1,042 5.25%, Due 11/15/2028 + ........................................ 750 865 4.75%, Due 2/15/2037 + ......................................... 3,000 3,332 4.50%, Due 5/15/2038 + ......................................... 2,445 2,631 ----------- TOTAL U.S. TREASURY OBLIGATIONS ................................... 34,065 -----------
See accompanying notes 36 AMERICAN BEACON INTERMEDIATE BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
SHARES VALUE ------------ ----------- (DOLLARS IN THOUSANDS) SHORT TERM INVESTMENTS - 4.61% Columbia Government Reserve Fund .................................. 10,325,338 $ 10,325 ----------- SECURITIES LENDING COLLATERAL - 18.88% American Beacon U.S. Government Money Market Select Fund * ........ 9,066,065 9,066 State Street Navigator Securities Lending Prime Portfolio ......... 33,164,308 33,164 ----------- TOTAL SECURITIES LENDING COLLATERAL ............................... 42,230 ----------- TOTAL INVESTMENTS - 120.94% (COST $270,796) .......................... $ 270,571 LIABILITIES, NET OF OTHER ASSETS - (20.94%) .......................... (46,847) ----------- TOTAL NET ASSETS - 100.00% ........................................... $ 223,724 ===========
Percentages are stated as a percent of net assets. + All or a portion of this security is on loan at April 30, 2009. ++ 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 $3,122 or 1.40% of net assets. The Fund has no right to demand registration of these securities. # Step Up/Down ss. 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. * The Fund is affiliated by having the same investment advisor. See accompanying notes 37 AMERICAN BEACON SHORT-TERM BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) CORPORATE OBLIGATIONS - 18.85% BANKS - 4.56% Citigroup, Inc., 4.125%, Due 2/22/2010 .......................................... $ 1,000 $ 984 4.625%, Due 8/3/2010 ........................................... 1,000 972 Goldman Sachs Group, Inc., 6.65%, Due 5/15/2009 ................... 1,000 1,002 HSBC Bank USA, 3.875%, Due 9/15/2009 .............................. 2,000 1,981 JP Morgan Chase & Co., 6.75%, Due 2/1/2011 ........................ 2,000 2,074 National Westminster Bank plc, 7.375%, Due 10/1/2009 .............. 2,000 1,958 Wells Fargo & Co, 3.98%, Due 10/29/2010 ........................... 1,000 964 ----------- 9,935 ----------- FINANCE - 3.68% Berkshire Hathaway Finance Corp., 4.00%, Due 4/15/2012 ++ ......... 1,000 1,016 Credit Suisse USA, Inc., 4.70%, Due 6/1/2009 ...................... 2,000 2,005 General Electric Capital Corp., 5.875%, Due 2/15/2012 ............. 3,000 3,057 MBNA Corp., 7.50%, Due 3/15/2012 .................................. 2,000 1,925 ----------- 8,003 ----------- INDUSTRIALS - 5.52% Burlington Northern Santa Fe Corp., 6.75%, Due 7/15/2011 .......... 1,000 1,052 Caterpillar Financial Services Corp., 4.15%, Due 1/15/2010 ........................................... 2,000 2,028 4.25%, Due 2/8/2013 ............................................ 500 487 Daimler Finance NA LLC, 5.75%, Due 9/8/2011 ....................... 1,000 982 John Deere Capital Corp., 4.125%, Due 1/15/2010 .......................................... 2,325 2,354 5.25%, Due 10/1/2012 ........................................... 1,000 1,025 Lockheed Martin Corp., 8.20%, Due 12/1/2009 ....................... 1,000 1,020 Nissan Motor Acceptance Corp., 4.625%, Due 3/8/2010 ++ ............ 1,000 951 Norfolk Southern Corp., 8.625%, Due 5/15/2010 ..................... 1,000 1,045 Northrop Grumman Corp., 7.125%, Due 2/15/2011 ..................... 1,000 1,064 ----------- 12,008 ----------- INSURANCE - 3.16% ING Security Life Institutional Funding, 4.25%, Due 1/15/2010 ++ .. 1,500 1,450 John Hancock Global Funding II, 7.90%, Due 7/2/2010 ++ ............ 2,000 2,046 Metropolitan Life Global Funding I, 4.625%, Due 8/19/2010 ++ ...... 1,500 1,459 Monumental Global Funding II, 4.625%, Due 3/15/2010 ++ ............ 1,000 969 Pricoa Global Funding 1, 4.20%, Due 1/15/2010 ++ .................. 1,000 957 ----------- 6,881 ----------- REAL ESTATE - 0.43% Simon Property Group LP, 5.375%, Due 6/1/2011 ..................... 1,000 945 ----------- TECHNOLOGY - 0.27% Cisco Systems, Inc., 5.25%, Due 2/22/2011 ......................... 550 585 -----------
See accompanying notes 38 AMERICAN BEACON SHORT-TERM BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) TELEPHONE - 1.23% AT&T Wireless Services, Inc., 7.875%, Due 3/1/2011 ................ $ 550 $ 596 Verizon Wireless Capital, LLC, 5.25%, Due 2/1/2012 ++ ............. 1,000 1,036 Vodafone Group plc, 5.50%, Due 6/15/2011 .......................... 1,000 1,051 ----------- 2,683 ----------- TOTAL CORPORATE OBLIGATIONS ....................................... 41,040 ----------- NON-AGENCY MORTGAGE-BACKED OBLIGATIONS - 0.68% Banc of America Commercial Mortgage, Inc., 2005-6 A1, 5.001%, Due 9/10/2047 ............................... 389 388 2007-2 A2, 5.634%, Due 4/10/2049 ............................... 800 684 Wachovia Bank Commercial Mortgage Trust, 2006-C23 A1, 5.203%, Due 1/15/2045 ...................................................... 418 417 ----------- TOTAL NON-AGENCY MORTGAGE-BACKED OBLIGATIONS ...................... 1,489 ----------- ASSET-BACKED SECURITIES - 4.51% Capital Auto Receivables Asset Trust, 2006-SN1A A4A, 5.32%, Due 3/20/2010 ++ ......................... 856 853 2006-1 A4, 5.04%, Due 5/17/2010 ................................ 91 92 CarMax Auto Owner Trust, 2005-3 A4, 4.91%, Due 1/18/2011 .......... 725 731 Chase Manhattan Auto Owner Trust, 2006-A A4, 5.36%, Due 1/15/2013 ...................................................... 2,000 2,021 Harley-Davidson Motorcycle Trust, 2007-3 A4, 5.52%, Due 11/15/2013 ..................................................... 2,000 1,968 USAA Auto Owner Trust, 2007-1 A4, 5.55%, Due 2/15/2013 ............ 3,000 3,130 Volkswagen Auto Loan Enhanced Trust, 2008-2 A4A, 6.24%, Due 7/20/2015 ...................................................... 1,000 1,026 ----------- TOTAL ASSET-BACKED SECURITIES ..................................... 9,821 ----------- U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 0.88% GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.88% 4.968%, Due 12/16/2021 ......................................... 538 547 4.201%, Due 8/16/2026 .......................................... 1,338 1,360 ----------- TOTAL U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS ..................... 1,907 ----------- U.S. AGENCY OBLIGATIONS - 56.07% FDIC GUARANTEED - 29.63% US Bank NA (FDIC Guaranteed), 1.02%, Due 9/21/2009 ............. 10,000 9,985 Goldman Sachs Group, Inc. (FDIC Guaranteed), 1.70%, Due 3/15/2011 + ................................................. 10,000 10,079 Citibank NA (FDIC Guaranteed), 1.625%, Due 3/30/2011 + ......... 10,000 10,053 Citigroup, Inc. (FDIC Guaranteed), 2.875%, Due 12/9/2011 ....... 1,000 1,028 General Electric Capital Corp. (FDIC Guaranteed), 3.00%, Due 12/9/2011 ................................................... 1,000 1,032 Wells Fargo & Co. (FDIC Guaranteed), 3.00%, Due 12/9/2011 ...... 1,000 1,030 General Electric Capital Corp. (FDIC Guaranteed), 2.25%, Due 3/12/2012 ................................................... 5,000 5,048 Morgan Stanley (FDIC Guaranteed), 2.25%, Due 3/13/2012 ......... 10,000 10,054 Bank of America Corp. (FDIC Guaranteed), 3.125%, Due 6/15/2012 ................................................... 1,000 1,036 JP Morgan Chase & Co. (FDIC Guaranteed), 2.20%, Due 6/15/2012 ................................................... 3,000 3,014 Bank of America Corp. (FDIC Guaranteed), 2.375%, Due 6/22/2012 ................................................... 10,000 10,137 JP Morgan Chase & Co. (FDIC Guaranteed), 2.125%, Due 6/22/2012 ................................................... 1,000 1,002
See accompanying notes 39 AMERICAN BEACON SHORT-TERM BOND FUND SCHEDULE OF INVESTMENTS April 30, 2009 (Unaudited)
PAR AMOUNT VALUE ------------ ----------- (DOLLARS IN THOUSANDS) PNC Funding Corp. (FDIC Guaranteed), 2.30%, Due 6/22/2012 + .... $ 1,000 $ 1,003 ----------- 64,501 ----------- FEDERAL HOME LOAN MORTGAGE CORPORATION - 20.87% 4.75%, Due 11/3/2009 ........................................... 5,000 5,108 1.625%, Due 4/26/2011 + ........................................ 20,000 20,125 2.125%, Due 3/23/2012 + ........................................ 20,000 20,208 ----------- 45,441 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION - 5.57% 7.25%, Due 1/15/2010 ........................................... 2,000 2,092 1.375%, Due 4/28/2011 + ........................................ 10,000 10,021 ----------- 12,113 ----------- TOTAL U.S. AGENCY OBLIGATIONS ..................................... 122,055 ----------- U.S. TREASURY OBLIGATIONS - 23.72% 2.875%, Due 6/30/2010 .......................................... 10,000 10,269 1.50%, Due 10/31/2010 + ........................................ 20,000 20,228 4.375%, Due 12/15/2010 + ....................................... 20,000 21,153 ----------- TOTAL U.S. TREASURY OBLIGATIONS ................................... 51,650 -----------
SHARES ------------ SHORT TERM INVESTMENTS - 0.22% Columbia Government Reserve Fund .................................. 483,078 483 ----------- SECURITIES LENDING COLLATERAL - 21.90% American Beacon U.S. Government Money Market Select Fund # ........ 10,233,552 10,234 State Street Navigator Securities Lending Prime Portfolio ......... 37,435,059 37,435 ----------- TOTAL SECURITIES LENDING COLLATERAL ............................... 47,669 ----------- TOTAL INVESTMENTS - 126.83% (COST $274,340) .......................... $ 276,114 LIABILITIES, NET OF OTHER ASSETS - (26.83%) .......................... (58,415) ----------- TOTAL NET ASSETS - 100.00% ........................................... $ 217,699 ===========
Percentages are stated as a percent of net assets. + All or a portion of this security is on loan at April 30, 2009. ++ 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 $10,737 or 4.93% of net assets. The Fund has no right to demand registration of these securities. # The Fund is affiliated by having the same investment advisor. See accompanying notes 40 AMERICAN BEACON FUNDS STATEMENTS OF ASSETS AND LIABILITIES APRIL 30, 2007 (UNAUDITED)(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
ENHANCED HIGH YIELD INCOME INTERMEDIATE SHORT-TERM BOND FUND FUND BOND FUND BOND FUND ---------- ---------- ------------ ----------- ASSETS: Investments in unaffiliated securities, at value (A, C).. $ 167,209 $ 84,009 $ 261,505 $ 265,880 Investments in affiliated securities, at value (B) ...... -- 234 9,066 10,234 Receivable for investments sold ......................... 2,636 -- 1,464 -- Dividends and interest receivable ....................... 4,848 732 1,867 1,485 Receivable for fund shares sold ......................... 10,455 7 32 310 Receivable for tax reclaims ............................. 5 1 1 -- Receivable for expense reimbursement .................... -- -- 1 5 Prepaid expenses ........................................ 18 7 31 39 ---------- ---------- ------------ ----------- TOTAL ASSETS ......................................... 185,171 84,990 273,967 277,953 ---------- ---------- ------------ ----------- LIABILITIES: Payable for investments purchased ....................... 3,931 -- 1,582 -- Payable upon return of securities loaned ................ -- 1,092 42,231 47,669 Payable for fund shares redeemed ........................ 14,128 4 6,374 12,490 Dividends payable ....................................... 276 -- -- 9 Management and investment advisory fees payable (Note 2) 176 74 41 47 Administrative service and service fees payable ......... 32 43 10 21 Due to custodian for overdraft .......................... 700 -- -- -- Other liabilities ....................................... 69 22 5 18 ---------- ---------- ------------ ----------- TOTAL LIABILITIES .................................... 19,312 1,235 50,243 60,254 ---------- ---------- ------------ ----------- NET ASSETS ................................................. $ 165,859 $ 83,755 $ 223,724 $ 217,699 ========== ========== ============ =========== ANALYSIS OF NET ASSETS: Paid-in-capital ............................................ 225,312 90,571 224,076 226,062 Undistributed net investment income ........................ 503 (374) 501 (510) Accumulated net realized (loss) ............................ (30,568) (2,773) (628) (9,627) Unrealized appreciation (depreciation) of investments, futures contracts, and foreign currency ................. (29,388) (3,669) (225) 1,774 ---------- ---------- ------------ ----------- NET ASSETS ................................................. $ 165,859 $ 83,755 $ 223,724 $ 217,699 ========== ========== ============ =========== Shares outstanding (no par value): Institutional Class ..................................... 7,186,982 N/A 21,867,001 22,778,964 ========== ========== ============ =========== Investor Class .......................................... 9,340,212 8,863,863 38,501 2,322,843 ========== ========== ============ =========== AMR Class ............................................... 7,068,175 N/A N/A N/A ========== ========== ============ =========== Net asset value, offering and redemption price per share: Institutional Class ..................................... $ 7.03 N/A $ 10.21 $ 8.67 ========== ========== ============ =========== Investor Class .......................................... $ 7.03 $ 9.45 $ 10.21 $ 8.68 ========== ========== ============ =========== AMR Class ............................................... $ 7.03 N/A N/A N/A ========== ========== ============ =========== A Cost of investments in unaffiliated securities ........... $ 196,597 $ 87,678 $ 261,730 $ 264,106 B Cost of investments in affiliated securities ............. $ -- $ 234 $ 9,066 $ 10,234 C Market value of securities on loan ....................... $ -- $ 1,069 $ 41,270 $ 46,829
See accompanying notes 41 AMERICAN BEACON FUNDS STATEMENTS OF OPERATIONS SIX MONTHS ENDED APRIL 30, 2009 (IN THOUSANDS) (UNAUDITED)
ENHANCED HIGH YIELD INCOME INTERMEDIATE SHORT-TERM BOND FUND FUND BOND FUND BOND FUND ---------- ---------- ------------ ---------- INVESTMENT INCOME: Dividend income from unaffiliated securities ............ $ 28 $ 151 $ 25 $ 13 Dividend income from affiliated securities .............. 9 4 11 2 Interest income ......................................... 8,805 1,973 4,445 3,573 Income derived from securities lending, net ............. -- 92 278 420 --------- ------ ------- ------ TOTAL INVESTMENT INCOME .............................. 8,842 2,220 4,759 4,008 --------- ------ ------- ------ EXPENSES: Management and investment advisory fees (Note 2) ........ 242 127 208 281 Administrative service fees (Note 2): Institutional Class .................................. 89 -- 52 66 Investor Class ....................................... 31 129 -- 23 AMR Class ............................................ 11 -- -- -- Transfer agent fees: Institutional Class .................................. -- -- 5 6 Investor Class ....................................... 1 4 -- -- Custody and fund accounting fees ........................ 10 6 18 24 Professional fees ....................................... 13 13 10 12 Registration fees and expenses .......................... 19 9 8 20 Service fees (Note 2): Investor Class ....................................... 26 115 -- 19 Prospectus and shareholder reports ...................... 28 1 2 4 Trustee fees ............................................ 4 3 2 2 Other expenses .......................................... 4 2 4 5 --------- ------ ------- ------ TOTAL EXPENSES ....................................... 478 409 309 462 --------- ------ ------- ------ Net (fees waived and expenses reimbursed)/recouped by Manager (Note 2) ..................................... -- -- -- (20) --------- ------ ------- ------ NET EXPENSES ......................................... 478 409 309 442 --------- ------ ------- ------ NET INVESTMENT INCOME ...................................... 8,364 1,811 4,450 3,566 --------- ------ ------- ------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) from: Investments .......................................... (13,947) (480) 1,144 3,348 Change in net unrealized appreciation or depreciation of: Investments .......................................... 21,735 7,107 8,522 1,326 --------- ------ ------- ------ NET GAIN ON INVESTMENTS .............................. 7,788 6,627 9,666 4,674 --------- ------ ------- ------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....... $ 16,152 $8,438 $14,116 $8,240 ========= ====== ======= ======
See accompanying notes 42 AMERICAN BEACON FUNDS STATEMENTS OF CHANGES IN NET ASSETS (IN THOUSANDS)
High Yield Bond Fund Enhanced Income Fund ------------------------ ------------------------ Six Months Six Months Ended Year Ended Ended Year Ended April 30, October 31, April 30, October 31, 2009 2008 2009 2008 ---------- ----------- ---------- ----------- (unaudited) (unaudited) INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income ................................. $ 8,364 $ 15,343 $ 1,811 $ 3,923 Net realized (loss) on investments, futures contracts, and foreign currency transactions ....... (13,947) (14,708) (480) (1,148) Change in net unrealized appreciation or depreciation of investments, futures contracts, and foreign currency translations .................. 21,735 (48,374) 7,107 (14,259) -------- --------- --------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ....................... 16,152 (47,739) 8,438 (11,484) -------- --------- --------- --------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Institutional Class ................................ (4,032) (7,731) -- -- Investor Class ..................................... (1,307) (1,837) (2,155) (5,038) AMR Class .......................................... (3,023) (5,774) -- -- Net realized gain on investments: Investor Class ..................................... -- -- -- (2,097) -------- --------- --------- --------- NET DISTRIBUTIONS TO SHAREHOLDERS .................. (8,362) (15,342) (2,155) (7,135) -------- --------- --------- --------- CAPITAL SHARE TRANSACTIONS: Proceeds from sales of shares ......................... 104,416 72,610 8,039 79,277 Reinvestment of dividends and distributions ........... 7,068 13,364 2,153 7,127 Cost of shares redeemed ............................... (73,562) (128,737) (33,189) (67,105) -------- --------- --------- --------- NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ......................... 37,922 (42,763) (22,997) 19,299 -------- --------- --------- --------- NET INCREASE (DECREASE) IN NET ASSETS .................... 45,712 (105,844) (16,714) 680 -------- --------- --------- --------- NET ASSETS: Beginning of period ................................... 120,147 225,991 100,469 99,789 -------- --------- --------- --------- END OF PERIOD * ....................................... $165,859 $ 120,147 $ 83,755 $ 100,469 ======== ========= ========= ========= *Includes undistributed net investment income (loss) of .. $ 503 $ 503 $ (374) $ (96) ======== ========= ========= =========
See accompanying notes 43 AMERICAN BEACON FUNDS STATEMENTS OF CHANGES IN NET ASSETS (IN THOUSANDS)
Intermediate Bond Fund Short-Term Bond Fund ------------------------ ------------------------ Six Months Six Months Ended Year Ended Ended Year Ended April 30, October 31, April 30, October 31, 2009 2008 2009 2008 ---------- ----------- ---------- ----------- (unaudited) (unaudited) INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income ................................. $ 4,450 $ 7,050 $ 3,566 $ 5,355 Net realized gain (loss) on investments, futures contracts, and foreign currency transactions ....... 1,144 70 3,348 (4,833) Change in net unrealized appreciation or depreciation of investments, futures contracts, and foreign currency translations .................. 8,522 (8,956) 1,326 309 --------- ---------- --------- --------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ....................... 14,116 (1,836) 8,240 831 --------- ---------- --------- --------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Institutional Class ................................ (4,476) (7,053) (5,019) (6,084) Investor Class ..................................... (1) -- (264) (220) Net realized gain on investments: --------- ---------- --------- --------- NET DISTRIBUTIONS TO SHAREHOLDERS .................. (4,477) (7,053) (5,283) (6,304) --------- ---------- --------- --------- CAPITAL SHARE TRANSACTIONS: Proceeds from sales of shares ......................... 125,113 103,092 45,899 200,633 Reinvestment of dividends and distributions ........... 4,477 7,052 5,219 6,236 Cost of shares redeemed ............................... (63,139) (63,295) (99,834) (30,341) --------- ---------- --------- --------- NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ....................... 66,451 46,849 (48,716) 176,528 --------- ---------- --------- --------- NET INCREASE (DECREASE) IN NET ASSETS .................... 76,090 37,960 (45,759) 171,055 --------- ---------- --------- --------- NET ASSETS: Beginning of period ................................... 147,634 109,674 263,458 92,403 --------- ---------- --------- --------- END OF PERIOD * ....................................... $ 223,724 $ 147,634 $217,699 $ 263,458 ========= ========== ========= ========= *Includes undistributed net investment income (loss) of .. $ 501 $ 501 $ (510) $ (563) ========= ========== ========= =========
See accompanying notes 44 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (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, as amended, (the "Act") as a diversified, open-end management investment company. These financial statements and notes to the financial statements relate to 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 Lighthouse Holdings, Inc. and was organized in 1986 to provide business management, advisory, administrative and asset management consulting services to the Trust and other investors. Class Disclosure Prior to March 1, 2009, the Investor Class was known as the PlanAhead Class. March 2, 2009 is the inception date of the Investor Class of the Intermediate Bond Fund. 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: - ------ ----------- INSTITUTIONAL CLASS Investors making an initial investment of $2 million INVESTOR CLASS General public and investors investing through an intermediary AMR CLASS Investors in the tax-exempt retirement and benefit plans of AMR Corporation and its affiliates
Administrative service fees, service fees and distribution fees vary amongst the classes as described more fully in footnote 2. 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. 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. 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. 45 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (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"). The Funds adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), effective with the beginning of the Funds' fiscal year. The 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. The three levels of the hierarchy uder FAS 157 are described below: Level 1 - Quoted prices in active markets for identical securities. Level 2 - Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. Level 3 - Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. A summary of the inputs used to value the Fund's investments as of April 30, 2009 is as follows (in thousands): High Yield Bond
Investments in Valuation Inputs Securities ---------------- -------------- Level 1 - Quoted prices ....................... $ 9,584 Level 2 - Other significant observable inputs.. 157,625 Level 3 - Significant unobservable inputs ..... -- -------- Total ......................................... $167,209 --------
Enhanced Income
Investments in Valuation Inputs Securities ---------------- -------------- Level 1 - Quoted prices......................... $ 9,998 Level 2 - Other significant observable inputs... 74,245 Level 3 - Significant unobservable inputs....... -- -------- Total........................................... $ 84,243 --------
Intermediate Bond
Investments in Valuation Inputs Securities ---------------- -------------- Level 1 - Quoted prices......................... $ 52,555 Level 2 - Other significant observable inputs... 218,016 Level 3 - Significant unobservable inputs....... -- -------- Total........................................... $270,571 --------
Short-Term Bond
Investments in Valuation Inputs Securities ---------------- -------------- Level 1 - Quoted prices......................... $ 48,152 Level 2 - Other significant observable inputs... 227,962 Level 3 - Significant unobservable inputs....... -- -------- Total........................................... $276,114 --------
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. 46 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) Dividend income, net of foreign taxes, is recorded on the ex-dividend date. 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. Dividends to Shareholders Dividends from net investment income of the Funds generally will be declared 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. 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 March 2008, FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("FAS 161"), which is effective for fiscal years and interim periods beginning after November 15, 2008. FAS 161 requires enhanced disclosures about derivative and hedging activities, including how such activities are accounted for and their effect on financial positions, performance and cash flows. The Manager is currently evaluating the impact the adoption of FAS 161 will have on the Funds' financial statements and related disclosures. 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. 47 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) 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 investment advisory, fund management and securities lending services. Investment assets of the 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 High Yield Bond Fund and Enhanced Income Fund an annualized fee equal to 0.05% 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 0.20% 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 Enhanced Income Fund 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 Short-Term Bond Fund. Pursuant to the Management Agreement, the Manager receives from the Fund an annualized fee equal to 0.20% of the average daily net assets of the Short-Term Bond Fund. Management fees paid during the six months ended April 30, 2009 were as follows (dollars in thousands):
AMOUNTS PAID NET AMOUNTS MANAGEMENT MANAGEMENT TO INVESTMENT RETAINED BY FEE RATE FEE ADVISORS MANAGER ---------- ----------- ------------- ------------- High Yield Bond ..... 0.30%-0.37% 242 211 31 Enhanced Income ..... 0.20%-0.80% 127 106 21 Intermediate Bond ... 0.20% 208 122 86
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, 2009, securities lending fees paid to the Manager were as follows (in thousands): Enhanced Income ..... 11 Intermediate Bond ... 38 Short-Term Bond ..... 54
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 0.05% of the average daily net assets of the AMR Class and 0.30% of the average daily net assets of the Institutional and Investor Classes of each of the Funds except for the Institutional Class of the Intermediate and Short-Term Bond Funds from which the Manager received a fee of 0.05% of average daily net assets. Distribution Plans The Trust 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. 48 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) Service Plans The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor Class. As compensation for performing the duties required under the Service Plan, the Manager received 0.25% of the average daily net assets of the Investor Class of each Fund through March 31, 2009 and up to 0.375% thereafter. Investment in Affiliated Funds The Funds may invest in the American Beacon Money Market Select Fund (the "MM Select Fund") and the American Beacon US Government Money Market Select Fund (the "USG Select Fund") (collectively, the "Select Funds"). Cash collateral received by certain Funds in connection with securities lending may be invested in the Select Funds. The Funds and the Select Funds have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the Select Funds and receives from the Select Funds an annualized management fee of 0.09% of the average daily net assets of the Select Funds. During the six months ended April 30, 2009, fees earned by the Manager from the Select Funds are as follows:
SECURITIES LENDING DIRECT INVESTMENT IN COLLATERAL INVESTED SELECT FUNDS IN SELECT FUNDS TOTAL -------------------- ------------------- ----- High Yield Bond...... 268 -- 268 Enhanced Income...... 343 1,091 1,434 Intermediate Bond.... 825 4,403 5,228 Short-Term Bond...... 139 6,120 6,259
Interfund Lending Program Pursuant to an exemptive order by the Securities and Exchange Commission ("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. During the six months ended April 30, 2009, the Fund did not utilize the credit facility. Reimbursement of Expenses The Manager voluntarily agreed to reimburse the Investor Class of the Short-Term and Intermediate Bond Funds for operating expenses. During the period ended April 30, 2009, the Manager waived Short-Term Bond service fees of $20,096 and amounts waived for the Investor Class of the Intermediate Bond Fund were immaterial during the period. 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. During the six months ended April 30, 2009, the Funds have not recorded a liability for potential reimbursement, due to the current assessment that a reimbursement is unlikely. 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. 49 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) The Funds adopted the provisions of FASB Interpretation No. 48, "Accounting for Uncertainties in Income Taxes" ("FIN 48"), on November 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, 2008 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, 2009 and fiscal year ended October 31, 2008 were as follows (in thousands):
HIGH YIELD BOND ENHANCED INCOME ----------------------- ------------------------- SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2009 2008 2009 2008 ---------- ---------- ----------- ----------- (UNAUDITED) (UNAUDITED) DISTRIBUTIONS PAID FROM: ORDINARY INCOME* Institutional Class .... $4,032 $ 7,731 $ -- $ -- Investor Class ......... 1,307 1,837 2,155 5,674 AMR Class .............. 3,023 5,774 -- -- LONG-TERM CAPITAL GAIN .... -- Institutional Class .... -- -- -- -- Investor Class ......... -- -- -- 1,461 AMR Class .............. -- -- -- -- ------ ------- ------ ------ TOTAL DISTRIBUTIONS PAID .. $8,362 $15,342 $2,155 $7,135 ------ ------- ------ ------
INTERMEDIATE BOND SHORT-TERM BOND ----------------------- ----------------------- SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED APRIL 30, OCTOBER APRIL 30, OCTOBER 2009 31, 2008 2009 31, 2008 ---------- ---------- ----------- ----------- (UNAUDITED) (UNAUDITED) DISTRIBUTIONS PAID FROM: ORDINARY INCOME* Institutional Class .... $4,476 $7,053 $5,019 $6,084 Investor Class ......... 1 -- 264 220 AMR Class .............. -- -- -- -- LONG-TERM CAPITAL GAIN .... -- -- Institutional Class .... -- -- -- -- Investor Class ......... -- -- -- -- AMR Class .............. -- -- -- -- ------ ------ ------ ------ TOTAL DISTRIBUTIONS PAID .. $4,477 $7,053 $5,283 $6,304 ------ ------ ------ ------
* For tax purposes, short-term capital gains are considered ordinary income distributions. As of April 30, 2009, the components of distributable earnings on a tax basis were as follows (in thousands): 50 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED)
HIGH YIELD ENHANCED INTERMEDIATE SHORT-TERM BOND INCOME BOND BOND ---------- -------- ------------ ---------- Cost basis of investments for federal income tax purpose .. $198,935 $88,132 $270,806 $275,365 Unrealized appreciation ................................... 4,109 2,074 4,872 2,061 Unrealized depreciation ................................... (35,835) (5,963) (5,107) (1,312) -------- ------- -------- -------- Net unrealized appreciation (depreciation) ................ (31,726) (3,889) (235) 749 Undistributed ordinary income ............................. 227 -- 502 506 Undistributed long-term gain (loss) ....................... (28,230) (2,753) (618) (9,627) -------- ------- -------- -------- Distributable earnings (losses) ........................... $(59,729) $(6,642) $ (351) $ (8,372) ======== ======= ======== ========
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, book amortization for premiums, 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 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, 2009 (in thousands):
HIGH YIELD ENHANCED INTERMEDIATE SHORT-TERM BOND INCOME BOND BOND ---------- -------- ------------ ---------- Paid-in-capital ................................................ $ -- $ 137 $ (1) $ 22 Undistributed net investment income ............................ (2) 66 27 1,770 Accumulated net realized gain (loss) ........................... 1 (204) (26) (1,792) Unrealized appreciation (depreciation) of investments and futures contracts ......... 1 1 -- --
At April 30, 2009 capital loss carry forward positions for federal income tax purposes were as follows (in thousands):
FUND 2012 2013 2014 2015 2016 2017 TOTAL - ---- ---- ----- ----- ---- ------ ------ ------ High Yield Bond .... -- -- 1,772 -- 14,332 12,126 28,230 Enhanced Income .... -- -- -- -- 2,100 653 2,753 Intermediate Bond... -- -- 618 -- -- -- 618 Short-Term Bond .... 318 1,256 2,387 467 5,199 -- 9,627
The Intermediate and Short-Term Bond Funds utilized $1,126 and $1,556, respectively of net capital loss carryovers for the six months ended April 30, 2009. 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, 2009 were as follows (in thousands): 51 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED)
SHORT-TERM HIGH YIELD BOND ENHANCED INCOME INTERMEDIATE BOND BOND --------------- --------------- ----------------- ---------- Purchases (excluding U.S. government securities) .............. $119,191 $11,936 $145,408 $125,451 Sales and maturities (excluding U.S. government securities) ... 79,827 32,915 68,793 6,655 Purchases of U.S. government securities ....................... -- 5,808 111,140 95,513 Sales and maturities of U.S. government securities ............ -- 8,140 115,332 256,194
A summary of the Funds' direct transactions in the Select Funds for the six months ended April 30, 2009 is set forth below (in thousands):
OCTOBER 31, 2008 APRIL 30, 2009 AFFILIATE SHARES/MARKET VALUE PURCHASES SALES SHARES/MARKET VALUE -------------- ------------------- --------- ------ ------------------- High Yield Bond ..... MM Select Fund $5,762 -- $5,762 -- Enhanced Income ..... MM Select Fund 3,057 -- 3,057 -- Intermediate Bond ... MM Select Fund 7,368 -- 7,368 -- Short-Term Bond ..... MM Select Fund 1,241 -- 1,241 --
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, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral. The amount of this temporary difference at April 30, 2009 is disclosed as the calculated mark in the table below. To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the "Agent") in money market mutual funds, and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retain 75%, 15%, and 10%, respectively, of the income generated from securities lending. While securities are on loan, the Fund continues to receive any income associated with that security and any gain or loss in the market price that may occur during the term of the loan. Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default. 52 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED) At April 30, 2009, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):
MARKET VALUE OF NON-CASH CASH COLLATERAL TOTAL VALUE OF SECURITIES ON LOAN COLLATERAL POSTED BY BORROWER CALCULATED MARK COLLATERAL ------------------ ---------- ------------------ --------------- -------------- Enhanced Income $ 1,069 -- $ 1,093 (1) $ 1,092 Intermediate Bond 41,270 -- 42,230 (116) 42,114 Short-Term Bond 46,829 -- 47,669 113 47,782
Cash collateral is listed in the Fund's Schedule of Investments. 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 included in Income derived from securities lending in the Statement of Operations. Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund's Schedule of Investments or Statement of Assets and Liabilities. 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, 2009
INSTITUTIONAL CLASS INVESTOR CLASS AMR CLASS ------------------- ------------------ ------------------- HIGH YIELD BOND FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - --------------------------------- ------- --------- ------- -------- ------- --------- Shares sold ..................... 3,651 $ 24,029 10,461 $ 68,811 1,787 $ 11,576 Reinvestment of dividends ....... 428 2,785 190 1,261 463 3,022 Shares redeemed ................. (6,069) (40,544) (3,370) (22,097) (1,688) (10,921) ------ -------- ------ -------- ------ -------- Net increase (decrease) in shares outstanding .................. (1,990) $(13,730) 7,281 $ 47,975 562 $ 3,677 ====== ======== ====== ======== ====== ========
INVESTOR CLASS ------------------- ENHANCED INCOME FUND SHARES AMOUNT - --------------------------------------- ------- --------- Shares sold ........................... 877 $ 8,039 Reinvestment of dividends ............. 233 2,153 Shares redeemed ....................... (3,661) (33,189) ------ -------- Net (decrease) in shares outstanding .. (2,551) $(22,997) ====== ========
INSTITUTIONAL CLASS INVESTOR CLASS ------------------- --------------- INTERMEDIATE BOND FUND SHARES AMOUNT SHARES AMOUNT - -------------------------------------- ------- --------- ------ ------ Shares sold .......................... 12,257 $124,721 39 $392 Reinvestment of dividends ............ 441 4,476 -- 1 Shares redeemed ...................... (6,186) (63,139) -- -- ------ -------- --- ---- Net increase in shares outstanding ... 6,512 $ 66,058 39 $393 ====== ======== === ====
53 AMERICAN BEACON FUNDS NOTES TO FINANCIAL STATEMENTS APRIL 30, 2009 (UNAUDITED)
INSTITUTIONAL CLASS INVESTOR CLASS ------------------- ----------------- SHORT-TERM BOND FUND SHARES AMOUNT SHARES AMOUNT - --------------------------------- ------- --------- ------ -------- Shares sold ..................... 3,180 $ 27,508 2,123 $18,391 Reinvestment of dividends ....... 580 5,019 23 200 Shares redeemed ................. (10,797) (93,562) (724) (6,272) ------- -------- ----- ------- Net increase (decrease) in shares outstanding .................. (7,037) $(61,035) 1,422 $12,319 ======= ======== ===== =======
PERIOD ENDED OCTOBER 31, 2008
INSTITUTIONAL CLASS INVESTOR CLASS AMR CLASS ------------------- ------------------ ----------------- HIGH YIELD BOND FUND SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT - --------------------------------------- ------- --------- ------ --------- ------ -------- Shares sold ........................... 3,029 $ 28,128 2,332 $ 21,959 2,416 $ 22,523 Reinvestment of dividends ............. 645 5,835 193 1,751 639 5,778 Shares redeemed ....................... (5,867) (54,359) (3,309) (31,075) (4,693) (43,303) ------ -------- ------ -------- ------ -------- Net (decrease) in shares outstanding .. (2,193) $(20,396) (784) $ (7,365) (1,638) $(15,002) ====== ======== ====== ======== ====== ========
INVESTOR CLASS ------------------- ENHANCED INCOME FUND SHARES AMOUNT - ------------------------------------- ------- --------- Shares sold ......................... 8,011 $ 79,277 Reinvestment of dividends ........... 714 7,127 Shares redeemed ..................... (6,812) (67,105) ------ -------- Net increase in shares outstanding .. 1,913 $ 19,299 ====== ========
INSTITUTIONAL CLASS ------------------- INTERMEDIATE BOND FUND SHARES AMOUNT - ------------------------------------- ------- --------- Shares sold ......................... 10,030 $103,092 Reinvestment of dividends ........... 695 7,052 Shares redeemed ..................... (6,232) (63,295) ------ -------- Net increase in shares outstanding .. 4,493 $ 46,849 ====== ========
INSTITUTIONAL CLASS INVESTOR CLASS ------------------- --------------- SHORT-TERM BOND FUND SHARES AMOUNT SHARES AMOUNT - ------------------------------------- ------- --------- ------ ------ Shares sold ......................... 22,147 $193,487 816 $7,146 Reinvestment of dividends ........... 696 6,082 17 154 Shares redeemed ..................... (3,197) (27,969) (271) (2,372) ------ -------- ---- ------ Net increase in shares outstanding .. 19,646 $171,600 562 $4,928 ====== ======== ==== ======
54 This page intentionally left blank. 55 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, ---------------------------------------------------- 2009 2008(A) 2007 2006(B) 2005 2004 ----------- ------- -------- -------- -------- -------- (unaudited) Net asset value, beginning of period ............. $ 6.77 $ 10.11 $ 10.20 $ 10.22 $ 10.86 $ 10.73 ------- ------- -------- -------- -------- -------- Income from investment operations: Net investment income ......................... 0.45 0.78 0.77 0.88 0.76 0.78 Net gains (losses) on securities (both realized and unrealized) ............................ 0.26 (3.34) (0.09) 0.09 (0.84) 0.27 ------- ------- -------- -------- -------- -------- Total income (loss) from investment operations ... 0.71 (2.56) 0.68 0.97 (0.08) 1.05 ------- ------- -------- -------- -------- -------- Less distributions: Dividends from net investment income .......... (0.45) (0.78) (0.77) (0.88) (0.76) (0.78) Distributions from net realized gains on securities ................................. -- -- -- (0.11) 0.20 (0.14) ------- ------- -------- -------- -------- -------- Total distributions .............................. (0.45) (0.78) (0.77) (0.99) (0.56) (0.92) ------- ------- -------- -------- -------- -------- Net asset value, end of period ................... $ 7.03 $ 6.77 $ 10.11 $ 10.20 $ 10.22 $ 10.86 ======= ======= ======== ======== ======== ======== Total return ..................................... 11.12%(C) (27.03)% 6.85% 8.78% 3.03% 10.19% ======= ======= ======== ======== ======== ======== Ratios and supplemental data: Net assets, end of period (in thousands) ...... $50,510 $62,138 $114,911 $231,693 $216,744 $241,777 Ratios to average net assets (annualized): Expenses, net of waivers ...................... 0.82% 0.85% 0.85% 0.85% 0.84% 0.88% Expenses, before waivers ...................... 0.82% 0.85% 0.86% 0.85% 0.84% 0.92% Net investment income, net of waivers ......... 13.69% 8.38% 7.55% 7.55% 7.24% 7.27% Net investment income, before waivers ......... 13.69% 8.38% 7.54% 7.55% 7.24% 7.23% Portfolio turnover rate ....................... 70%(C) 157% 92% 88% 128% 138%
(A) On May 21, 2008, Post Advisory Group, LLC ceased managing a portion of the High Yield Bond Fund and on May 22, 2008 Logan Circle Partners, L.P. began managing a portion of the High Yield Bond Fund. (B) Franklin Advisers, Inc. was added as an investment advisor to the High Yield Bond Fund on September 12, 2006. (C) Not annualized. (D) Annualized. (E) Portfolio turnover rate is for the period from November 1, 2006 through October 31, 2007. 56
Investor Class AMR Class - ---------------------------------------------------------------- ----------------------------------- Six Six Months Months Year September Ended Year Ended October 31, Ended Ended 04 to April 30, -------------------------------------------------- April 30, October October 2009 2008(A) 2007 2006(B) 2005 2004 2009 31, 2008 31, 2007 - ----------- ------- ------- ------- -------- -------- ----------- -------- --------- (unaudited) (unaudited) $ 6.77 $ 10.11 $ 10.21 $ 10.22 $ 10.87 $ 10.73 $ 6.77 $ 10.11 $ 9.94 ------- ------- ------- ------- -------- -------- ------- ------- ------- 0.44 0.75 0.75 0.85 0.74 0.74 0.46 0.80 0.12 0.26 (3.34) (0.10) 0.10 (0.85) 0.28 0.25 (3.34) 0.17 ------- ------- ------- ------- -------- -------- ------- ------- ------- 0.70 (2.59) 0.65 0.95 (0.11) 1.02 0.71 (2.54) 0.29 ------- ------- ------- ------- -------- -------- ------- ------- ------- (0.44) (0.75) (0.75) (0.85) (0.74) (0.74) (0.45) (0.80) (0.12) -- -- -- (0.11) 0.20 (0.14) -- -- -- ------- ------- ------- ------- -------- -------- ------- ------- ------- (0.44) (0.75) (0.75) (0.96) (0.54) (0.88) (0.45) (0.80) (0.12) ------- ------- ------- ------- -------- -------- ------- ------- ------- $ 7.03 $ 6.77 $ 10.11 $ 10.21 $ 10.22 $ 10.87 $ 7.03 $ 6.77 $ 10.11 ======= ======= ======= ======= ======== ======== ======= ======= ======= 10.96%(C) (27.24)% 6.52% 8.63% 2.69% 9.94% 11.25%(C) (26.84)% 2.94%(C) ======= ======= ======= ======= ======== ======== ======= ======= ======= $65,667 $13,949 $28,758 $80,284 $120,360 $148,266 $49,682 $44,060 $82,322 1.06% 1.10% 1.08% 1.08% 1.08% 1.20% 0.57% 0.58% 0.61%(D) 1.06% 1.10% 1.08% 1.08% 1.08% 1.20% 0.57% 0.58% 0.61%(D) 12.40% 8.06% 7.32% 7.33% 7.00% 6.95% 14.06% 8.64% 7.54%(D) 12.40% 8.06% 7.32% 7.33% 7.00% 6.95% 14.06% 8.64% 7.54%(D) 70%(C) 157% 92% 88% 128% 138% 70%(C) 157% 92%(E)
57 AMERICAN BEACON ENHANCED INCOME FUND FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Investor Class ------------------------------------------------------------------ Six Months Ended Year Ended October 31, April 30, ---------------------------------------------------- 2009 2008 2007 2006 2005 2004 ----------- -------- ------- -------- -------- -------- (unaudited) Net asset value, beginning of period ......... $ 8.80 $ 10.50 $ 10.25 $ 9.98 $ 10.16 $ 9.96 ------- -------- ------- -------- -------- -------- Income from investment operations: Net investment income ..................... 0.62 0.41 0.36 0.33 0.29 0.26 Net gains (losses) on securities (both realized and unrealized) ............... 0.22 (1.39) 0.32 0.29 (0.16) 0.20 ------- -------- ------- -------- -------- -------- Total income (loss) from investment operations 0.84 (0.98) 0.68 0.62 0.13 0.46 ------- -------- ------- -------- -------- -------- Less distributions: Dividends from net investment income ...... (0.19) (0.49) (0.42) (0.35) (0.31) (0.26) Distributions from net realized gains on securities ............................. -- (0.23) (0.01) -- -- -- ------- -------- ------- -------- -------- -------- Total distributions .......................... (0.19) (0.72) (0.43) (0.35) (0.31) (0.26) ------- -------- ------- -------- -------- -------- Net asset value, end of period ............... $ 9.45 $ 8.80 $ 10.50 $ 10.25 $ 9.98 $ 10.16 ======= ======== ======= ======== ======== ======== Total return ................................. 10.09%(A) (10.02)% 6.75% 6.36% 1.32% 4.70% ======= ======== ======= ======== ======== ======== Ratios and supplemental data: Net assets, end of period (in thousands) .. $83,755 $100,469 $99,789 $125,915 $112,341 $103,897 Ratios to average net assets (annualized): Expenses .................................. 0.95% 0.92% 0.94% 0.93% 0.92% 1.00% Net investment income ..................... 4.23% 3.64% 3.69% 3.21% 2.79% 2.54% Portfolio turnover rate ................... 21%(A) 76% 103% 65% 41% 72%
(A) Not annualized. 58 AMERICAN BEACON INTERMEDIATE BOND FUND FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Institutional Class (formerly AMR Class prior to 3/1/05) Investor ---------------------------------------------------------------- Class Six Months Year Ended October 31, March 2 to Ended April ------------------------------------------------- April 30, 30, 2009 2008 2007 2006 2005(A) 2004 2009 ------------ -------- -------- ------- ------- ------- ------------ (unaudited) (unaudited) Net asset value, beginning of period ............ $ 9.61 $ 10.10 $ 10.02 $ 10.01 $ 10.33 $ 10.24 $10.14 -------- -------- -------- ------- ------- ------- ------ Income from investment operations: Net investment income ........................ 0.24 0.50 0.50 0.46 0.42 0.40 0.06 Net gains (losses) on securities (both realized and unrealized) .................. 0.58 (0.51) 0.07 0.02 (0.29) 0.14 0.07 -------- -------- -------- ------- ------- ------- ------ Total income (loss) from investment operations .. 0.82 (0.01) 0.57 0.48 0.13 0.54 0.13 -------- -------- -------- ------- ------- ------- ------ Less distributions: Dividends from net investment income ......... (0.22) (0.48) (0.49) (0.47) (0.45) (0.45) (0.06) Distributions from net realized gains on securities ................................ -- -- -- -- -- -- -- -------- -------- -------- ------- ------- ------- ------ Total distributions ............................. (0.22) (0.48) (0.49) (0.47) (0.45) (0.45) (0.06) -------- -------- -------- ------- ------- ------- ------ Net asset value, end of period .................. $ 10.21 $ 9.61 $ 10.10 $ 10.02 $ 10.01 $ 10.33 $10.21 ======== ======== ======== ======= ======= ======= ====== Total return .................................... 8.56%(B) (0.26)% 5.83% 4.96% 1.26% 5.38% 1.28%(B) ======== ======== ======== ======= ======= ======= ====== Ratios and supplemental data: Net assets, end of period (in thousands) ..... $223,331 $147,634 $109,674 $97,319 $93,270 $96,242 $ 393 Ratios to average net assets (annualized): Expenses, net of waivers ..................... 0.30% 0.30% 0.34% 0.35% 0.31% 0.34% 0.64% Expenses, before waivers ..................... 0.30% 0.30% 0.34% 0.35% 0.31% 0.34% 2.39% Net investment income, net of waivers ........ 4.27% 4.70% 4.86% 4.64% 4.12% 3.97% 3.41% Net investment income, before waivers ........ 4.27% 4.70% 4.86% 4.64% 4.12% 3.97% 1.66% Portfolio turnover rate ...................... 94%(B) 105% 85% 122% 119% 106% 94%(B, C)
(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. (C) Portfolio turnover rate is for the period from November 1, 2008 through April 30, 2009. 59 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, ------------------------------------------------------ 2009 2008 2007 2006 2005(A) 2004 ------------ -------- ------- ------- ------- ------- (unaudited) Net asset value, beginning of period ............ $ 8.58 $ 8.79 $ 8.74 $ 8.75 $ 9.07 $ 9.31 -------- -------- ------- ------- ------- ------- Income from investment operations: Net investment income ........................ 0.10(B) 0.35(B) 0.39(B) 0.32(B) 0.29 0.27 Net gains (losses) on securities (both realized and unrealized) .................. 0.15 (0.15) 0.09 0.07 (0.20) (0.05) -------- -------- ------- ------- ------- ------- Total income (loss) from investment operations .. 0.25 0.20 0.48 0.39 0.09 0.22 -------- -------- ------- ------- ------- ------- Less distributions: Dividends from net investment income ......... (0.16) (0.41) (0.43) (0.40) (0.41) (0.46) Distributions from net realized gains on securities ................................ -- -- -- -- -- -- -------- -------- ------- ------- ------- ------- Total distributions ............................. (0.16) (0.41) (0.43) (0.40) (0.41) (0.46) -------- -------- ------- ------- ------- ------- Net asset value, end of period .................. $ 8.67 $ 8.58 $ 8.79 $ 8.74 $ 8.75 $ 9.07 ======== ======== ======= ======= ======= ======= Total return .................................... 2.96%(C) 2.21% 5.61% 4.56% 1.00% 2.39% ======== ======== ======= ======= ======= ======= Ratios and supplemental data: Net assets, end of period (in thousands) ..... $197,529 $255,725 $89,427 $73,417 $79,683 $80,504 Ratios to average net assets (annualized): Expenses, net of waivers ..................... 0.30% 0.31% 0.37% 0.35% 0.33% 0.33% Expenses, before waivers ..................... 0.30% 0.31% 0.37% 0.35% 0.33% 0.33% Net investment income, net of waivers ........ 2.56% 3.75% 4.48% 3.64% 3.15% 3.00% Net investment income, before waivers ........ 2.56% 3.75% 4.48% 3.64% 3.15% 3.00% Portfolio turnover rate ...................... 84%(C) 21% 40% 48% 38% 41%
(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. 60
Investor Class - -------------------------------------------------------------- Six Months Ended Year Ended October 31, April 30, ------------------------------------------------ 2009 2008 2007 2006 2005 2004 - ----------- ------ ------ ------ ------ ------ (unaudited) $ 8.59 $ 8.81 $ 8.76 $ 8.77 $ 9.09 $ 9.33 - ------- ------ ------ ------ ------ ------ 0.11(B) 0.29(B) 0.35(B) 0.27(B) 0.28 0.25 0.13 (0.15) 0.09 0.07 (0.24) (0.07) - ------- ------ ------ ------ ------ ------ 0.24 0.14 0.44 0.34 0.04 0.18 - ------- ------ ------ ------ ------ ------ (0.15) (0.36) (0.39) (0.35) (0.36) (0.42) -- -- -- -- -- -- - ------- ------ ------ ------ ------ ------ (0.15) (0.36) (0.39) (0.35) (0.36) (0.42) - ------- ------ ------ ------ ------ ------ $ 8.68 $ 8.59 $ 8.81 $ 8.76 $ 8.77 $ 9.09 ======= ====== ====== ====== ====== ====== 2.84%(C) 1.54% 5.08% 4.01% 0.46% 1.84% ======= ====== ====== ====== ====== ====== $20,170 $7,733 $2,976 $7,189 $8,582 $7,781 0.54% 0.85% 0.87% 0.88% 0.87% 0.87% 0.80% 0.88% 0.98% 0.90% 0.94% 0.87% 2.18% 3.19% 3.91% 3.10% 2.59% 2.44% 1.92% 3.16% 3.81% 3.08% 2.52% 2.44% 84%(C) 21% 40% 48% 38% 41%
61 RESULTS OF SHAREHOLDER MEETING (UNAUDITED) A special meeting of shareholders of the American Beacon Balanced Fund and the American Beacon Enhanced Income Fund (each a "Fund") of the American Beacon Funds (the "Trust") was held on February 13, 2009. The shareholders of the Funds were asked to vote on a proposal to approve and ratify an advisory fee under the current Investment Management Agreement between American Beacon Advisors, Inc. (the "Manager") and the Funds (the "Investment Management Agreement.") Shareholders previously approved the Investment Management Agreement at a special meeting held on August 22, 2008 in connection with the change of control of the Manager. The proxy statement provided to shareholders in connection with that meeting accurately disclosed that there were no proposed changes to the total aggregate fees payable to the Manager for management, advisory, securities lending and administrative services provided to the Funds. However, the advisory fee had been inadvertently omitted from the fee schedule to the form of the Investment Management Agreement and comparative fee table included as appendices to the proxy statement provided to shareholders in connection with that meeting. This proposal required a majority of shareholders of each Fund to achieve a quorum. The shareholders of the Funds passed the vote with the following results:
FUND FOR AGAINST ABSTAIN NON-VOTING - --------------- -------------- ------------ --------- ---------- Balanced 601,896,430.17 1,636,527.29 71,959.48 -0- Enhanced Income 83,387,906.04 24,152.10 -0- -0-
62 (This page intentionally left blank) 63 (This page intentionally left blank) 64 (This page intentionally left blank) 65 (AMERICAN BEACON FUNDS(R) 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) BY E-MAIL: american_beacon.funds@ambeacon.com (GRAPHIC) BY TELEPHONE: Institutional Class Call (800) 658-5811 AMR Class(SM) Call (800) 345-2345 Investor Class(R) Class Call (800) 388-3344 AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULES In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission ("SEC") on Form N-Q as of the first and third fiscal quarters. The Fund's Forms N-Q are available on the SEC's website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC's Public Reference Room, 450 Fifth Street, NW, Washington, DC 20549. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete 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. (GRAPHIC) ON THE INTERNET: Visit our website at www.americanbeaconfunds.com (GRAPHIC) BY MAIL: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643 AVAILABILITY OF PROXY VOTING POLICY AND RECORDS A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund's Statement of Additional Information, is available free of charge on the Fund's website (www.americanbeaconfunds.com) and by calling 1-800-967-9009 or by accessing the SEC's website at www.sec.gov. The Fund's proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund's Forms N-PX are available on the SEC's website at www.sec.gov. The Fund's proxy voting record may also be obtained by calling 1-800-967-9009. FUND SERVICE PROVIDERS: CUSTODIAN STATE STREET BANK AND TRUST Boston, Massachusetts TRANSFER AGENT BOSTON FINANCIAL DATA SERVICES Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ERNST & YOUNG LLP Dallas, Texas DISTRIBUTOR FORESIDE FUND SERVICES 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 Beacon Funds, 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. SAR 04/09 00068037 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 7, 2009 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 7, 2009 By /s/ Rebecca L. Harris --------------------- Rebecca L. Harris Treasurer Date: July 7, 2009 EX-99.CERT 2 ex99cert.txt CERTIFICATION 99 For period ended 04/30/2009 Registrant Name: American Beacon Funds File Number: 811-4984 EXHIBIT 99.CERT I, Rebecca L. Harris, certify that: 1. I have reviewed this report on Form N-CSR of American Beacon Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 7, 2009 /s/ Rebecca L. Harris ------------ --------------------- Rebecca L. Harris Treasurer American Beacon Funds I, William F. Quinn, certify that: 1. I have reviewed this report on Form N-CSR of American Beacon Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 7, 2009 /s/ William F. Quinn ------------ -------------------- William F. Quinn President American Beacon Funds EX-99.906 CERT 3 ex906cert.txt CERTIFICATION 906 For period ended 04/30/2009 Registrant Name: American Beacon Funds File Number: 811-4984 EXHIBIT 99.906CERT William F. Quinn and Rebecca L. Harris, respectively, the President and Treasurer of the American Beacon Funds (the "Registrant"), each certify to the best of his or her knowledge and belief that: 1. the Registrant's report on Form N-CSR for the period ended April 30, 2009 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. /s/ William F. Quinn /s/ Rebecca L. Harris - -------------------- -------------------- William F. Quinn Rebecca L. Harris President Treasurer American Beacon Funds American Beacon Funds Date: July 7, 2009 A signed original of this written statement required by Section 906 has been provided to American Beacon Funds and will be retained by American Beacon Funds and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----