-----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, DWqTBnFXSi38sB/wpLO2xdlzUSbj9HSlqqwrJeldc+iCvjdiKLWAzIfYkqD752PF hisqwbu92Wae06akDy8D2g== 0000809593-10-000032.txt : 20100708 0000809593-10-000032.hdr.sgml : 20100708 20100708162010 ACCESSION NUMBER: 0000809593-10-000032 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 20 CONFORMED PERIOD OF REPORT: 20100430 FILED AS OF DATE: 20100708 DATE AS OF CHANGE: 20100708 EFFECTIVENESS DATE: 20100708 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-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04984 FILM NUMBER: 10944477 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 C000085576 Y Class ACBYX C000089421 Class A ABFAX 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 C000079122 Y Class ABLYX C000089422 Class A ALVAX 0000809593 S000001092 American Beacon Large Cap Growth Fund C000002972 Institutional Class ALCGX C000002973 AMR Class ALFIX C000085577 Y Class ACLYX C000089423 Class A ABGAX 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 C000079123 Y Class ABSYX C000089424 Class A ABSAX 0000809593 S000001819 American Beacon Mid-Cap Value Fund C000004772 AMR Class AMDIX C000011075 Institutional Class AACIX C000033163 Investor Class AMPAX C000050486 Advisor Class AMCSX C000085578 Y Class ACMYX C000089425 Class A ABMAX 0000809593 S000001821 American Beacon Retirement Income and Appreciation Fund C000004774 Investor Class AANPX C000085580 Y Class ACRYX C000089427 Class A AAPAX 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 C000079124 Y Class ABEYX C000089428 Class A AIEAX 0000809593 S000001826 American Beacon Emerging Markets Fund C000004788 Institutional Class AEMFX C000004789 Investor Class AAEPX C000004790 AMR Class AAMRX C000085581 Y Class ACEYX C000089429 Class A AEMAX 0000809593 S000001830 American Beacon High Yield Bond Fund C000004795 Institutional Class AYBFX C000004796 Investor Class AHYPX C000004797 Service Class AAHSX C000052225 AMR Class ABMRX C000085582 Y Class ACYYX C000089430 Class A ABHAX 0000809593 S000001831 American Beacon Intermediate Bond Fund C000004798 Institutional Class AABDX C000004799 Investor Class ABIPX C000085583 Y Class ACTYX C000089431 Class A AITAX 0000809593 S000001832 American Beacon Short-Term Bond Fund C000004800 Institutional Class AASBX C000004801 Investor Class AALPX C000085584 Y Class ACOYX C000089432 Class A ANSAX N-CSR 1 ncsr1010.htm ncsr1010.htm

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)

GENE L. NEEDLES, JR., 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) 391-6100

Date of fiscal year end: October 31, 2010

Date of reporting period: April 30, 2010


ITEM 1. REPORTS TO STOCKHOLDERS.
 

 
 

 
 
 
 
 
 
 
 
 

 
 
About American Beacon Advisors
 
 
Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.
 
 
Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.
 
 
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, 2010
 

 
 
 

 
 
 
 
 
 
Fellow Shareholders,
 
 
Over the past six months, one universal theme seems to have emerged: while sudden and significant volatility may characterize the new economic world order, it doesn’t mean investors can’t benefit. Opportunity abounds for those who know how to capitalize on it.
 
Fortunately, this theme also underlies our investment philosophy at American Beacon:
 
With portfolios invested for the new economic reality—and conservatively managed for the longer term—we believe investors are better positioned to ride out the inevitable economic storms, whenever and wherever they occur.
 
It’s a philosophy that has served our shareholders well. It also explains how, in the face of continued weakness in the U.S. job and housing markets and mounting sovereign debt worries in Europe, our domestic equity-exposed funds could generate such respectable returns for the six-month period ended April 30, 2010. The American Beacon Large Cap Value Fund (Institutional Class), for example, generated a 16.43% return during this reporting period. Please note that the recent growth rate in the stock market has produced short-term returns that are not typical and may not continue in the future.
 
As global volatility has become the new norm, our focus at American Beacon remains trained on anticipating opportunities and meeting the challenges investors face today and will likely face tomorrow. This is what drives the composition of our fund line-up and the development of our new offerings in the last year.
 
It’s also a reflection of our commitment to you, a commitment we summarize as: Oversight 360°. Ours is a continuous commitment to cast a watchful and analytical eye over all the factors that influence our fellow shareholders’ investments.
 
As you review the enclosed market overview, portfolio listings, and detailed financial data, please know that 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 investment in the American Beacon Funds and know that we remain dedicated to offering you and your advisor the level of service and broad range of well-managed investment products you’ve come to expect from us.
 
     
     
   
Best Regards,
     
   
   
Gene L. Needles, Jr.
   
President
   
American Beacon Funds
 
 
1
 
 
 
 

 

 
 
Domestic Equity Market Overview
April 30, 2010 (Unaudited)
 
In the face of continued weakness in the U.S. employment rate and the U.S. housing market and mounting sovereign debt worries abroad, the S&P 500 still managed to return an impressive 16.43% for the six months ended April 30, 2010. Buoyed by relatively healthy corporate earnings, the broader market performance reflected the economic optimism represented by: resilient personal spending on the part of the U.S. consumer; improved credit market conditions; and enhanced corporate efficiency. Still, corporate earnings remain below the long-term trend. Earnings still have room to grow, which bodes well for investors.
 
Another positive for investors comes from the fact that the retrenchment by Corporate America in the form of cost-cutting and improved operating efficiencies, which became apparent as 2009’s fourth quarter earnings season unfolded, is expected to continue providing added operating leverage. This was hardly an insignificant trend. During the fourth quarter, incremental pre-tax margins for companies in the S&P 500 Index were an astounding 64%, in other words, every $1 in incremental revenue gain resulted in $0.64 in additional pre-tax earnings. This improved corporate free cash flow put substantial cash reserves back onto balance sheets. That cash was expected to find its way into investors’ hands through increased dividends and/or share repurchases.
 
Despite flat income growth, the consumer resurfaced during the last six months, implying that there may have been an accompanying decline in the savings rate. Willingness of the consumer to spend was significant since consumer spending comprises two-thirds of the U.S. economy (based on GDP), making it a critical factor in gauging economic progress.
 
In addition to the consumer, other signs of economic expansion emerged since last October: productivity recovered, while inflation stayed in check, and the Fed remained accommodative. Cyclical sectors naturally performed well in this environment. Consumer Discretionary, Industrial, and Financial companies led the U.S. equity markets in returns, while Telecommunications, Energy, and Consumer Staples lagged. Value stocks also remained in favor, outpacing their growth counterparts across the market cap spectrum.
 
We continue to find compelling investment opportunities as the economic recovery builds momentum. Three core factors provide support for our optimism:
 
 
 
Corporate earnings and the U.S. economy are recovering from one of the deepest recessions since the Great Depression, which should amplify the magnitude of the equity market’s recovery.
       
 
 
Companies have retrenched to such a level that modest increases in demand should be disproportionately accretive to earnings.
       
 
 
The recovery of value stocks tends to carry on for several successive years following sizable market dislocations akin to 2008.
 
With these dynamics underlying the domestic equity market, we feel there is some cause for continued investor optimism for the remainder of the year.
 
 
2
 
 
 
 

 

 
Performance Overview
American Beacon Large Cap Value FundSM
April 30, 2010 (Unaudited)
 
The Institutional Class of the Large Cap Value Fund returned 16.43% for the six months ended April 30, 2010, underperforming the Russell 1000® Value Index (“Index”) return of 17.77%, but outperforming the Lipper Large-Cap Value Funds Index return of 14.54%.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
   
6 Months*
 
1 Year
 
5 Years
 
10 Years
Institutional Class(1,6)
   
16.43
%
   
42.97
%
   
2.74
%
   
5.95
%
Y Class (1,2,6)
   
16.37
%
   
42.90
%
   
2.73
%
   
5.94
%
Investor Class(1,6)
   
16.26
%
   
42.43
%
   
2.47
%
   
5.66
%
Advisor Class(1,3,6)
   
16.19
%
   
42.26
%
   
2.24
%
   
5.54
%
Retirement Class (1,4,6)
   
16.04
%
   
41.80
%
   
2.18
%
   
5.51
%
AMR Class(1,6)
   
16.67
%
   
43.31
%
   
3.02
%
   
6.23
%
Lipper Large-Cap Value Funds Index (5)
   
14.54
%
   
38.48
%
   
2.22
%
   
1.63
%
Russell 1000 Value Index (5)
   
17.77
%
   
42.28
%
   
1.93
%
   
3.48
%
 
 
     
*
 
Not annualized
     
1.
 
Please note that the recent growth rate in the stock market has helped to produce short-term returns that are not typical and may not continue in the future. 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 one-year, five-year and ten-year periods represents the total returns achieved by the Institutional Class from 4/30/00 up to 8/3/09, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/00.
     
3.
 
Fund performance for the five-year and ten-year periods represents the total returns achieved by the Investor Class from 4/30/00 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 4/30/00. 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 for2005.
     
4.
 
Fund performance for the one-year, five-year and ten-year periods represents the total returns achieved by the Investor Class from 4/30/00 through 5/31/05 and the Advisor Class from 6/1/05 up to 5/1/09, the inception date of the Retirement Class, and the returns of the Retirement Class since its inception. Expenses of the Retirement Class are higher than those of the Advisor and Investor Classes. As a result, total returns shown may be higher than they would have been had the Retirement Class been in existence since 4/30/00.
     
5.
 
The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000® Value Index and Russell 1000 Index are registered trademarks of 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.
     
6.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, Retirement, and AMR Class shares was 0.62%, 0.69%, 0.94%, 1.13%, 1.38%, and 0.37%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
 
The Fund underperformed the Index entirely due to stock selection as sector allocation added value relative to the Index. The Fund’s holdings in the Consumer Discretionary, Materials, Telecommunication Services, and Health Care sectors detracted the most value relative to the Index. Companies in the Consumer Discretionary sector with the greatest impact to the Fund’s underperformance were CBS (up 36.6%), Time Warner Cable (up 44.5%), and Gap (up 16.7%) for the period the Fund owned the securities. In the Materials sector, E. I. du Pont de Nemours (up 25.2%), Dow Chemical (up 29.9%), and Air Products & Chemical (up 0.5%) for the period the Fund owned the securities were the largest detractors, as was AT&T (up 4.7% for the period the Fund owned the security) in the Telecommunication Services sector. In the Health Care se ctor, Baxter International (down 12.5%) and Eli Lilly (up 5.4% for the period the Fund owned the security) hurt relative performance most. Good stock selection in the Utilities sector, mostly in Constellation Energy Group (up 19.5%) and Public Service Enterprise Group (up 5.2%) for the period the Fund owned the securities, added value relative to the Index, but
 
 
3
 
 
 
 

 

Performance Overview
American Beacon Large Cap Value FundSM
April 30, 2010 (Unaudited)
 
not enough to offset the poor performance from the aforementioned sectors.
 
The Fund’s two times underweighting in Energy, the second worst performing sector in the Index, and an overweighting in Industrials, the second best performing sector in the Index, added the most value relative to the Index through sector allocation. The positive impact from the above mentioned sector exposures was somewhat offset by a two times overweight in Consumer Staples and an underweight in the Consumer Discretionary sector, the best performing sector in the Index, which detracted from relative performance.
 
The sub-advisors continue to invest in a broadly diversified portfolio of companies that they believe have attractive valuations and above-average earnings growth potential. This approach should allow the Fund to benefit over the longer term.
 
Top Ten Holdings
 
         
   
% of
   
Net Assets
ConocoPhillips
   
3.3
%
International Business Machines Corp.
   
3.0
%
JPMorgan Chase & Co.
   
3.0
%
Bank of America Corp.
   
2.6
%
Hewlett-Packard Co.
   
1.8
%
Boeing Co.
   
1.8
%
Wells Fargo & Co.
   
1.7
%
Raytheon Co.
   
1.6
%
PNC Financial Services Group, Inc.
   
1.5
%
General Electric Co.
   
1.5
%
 
Equity Sector Allocation
 
         
   
% of
   
Equities
Financials
   
21.8
%
Information Technology
   
14.5
%
Industrials
   
14.3
%
Consumer Staples
   
10.2
%
Health Care
   
10.0
%
Energy
   
9.9
%
Consumer Discretionary
   
8.8
%
Utilities
   
5.2
%
Materials
   
3.0
%
Telecommunication Services
   
2.3
%
 
See accompanying notes
 
 
4
 
 
 
 

 
Fund Expenses
American Beacon Large Cap Value FundSM
April 30, 2010 (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, 2009 through April 30, 2010.
 
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 cust odial 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.
 
                         
   
 
 
 
   
   
 
 
 
 
 
Expenses Paid
   
Beginning
Account
 
Ending
Account
 
During Period*
   
Value
11/1/09
 
Value
4/30/10
 
11/1/09-4/30/10
Institutional Class
                       
Actual
 
$
1,000.00
   
$
1,164.27
   
$
3.22
 
Hypothetical
 
$
1,000.00
   
$
1,021.82
   
$
3.01
 
(5% return before expenses)
                       
                         
Y Class
                       
Actual
 
$
1,000.00
   
$
1,163.70
   
$
3.81
 
Hypothetical
 
$
1,000.00
   
$
1,021.27
   
$
3.56
 
(5% return before expenses)
                       
                         
Investor Class
                       
Actual
 
$
1,000.00
   
$
1,162.55
   
$
5.15
 
Hypothetical
 
$
1,000.00
   
$
1,020.03
   
$
4.81
 
(5% return before expenses)
                       
                         
Advisor Class
                       
Actual
 
$
1,000.00
   
$
1,161.94
   
$
5.90
 
Hypothetical
 
$
1,000.00
   
$
1,019.34
   
$
5.51
 
(5% return before expenses)
                       
                         
Retirement Class
                       
Actual
 
$
1,000.00
   
$
1,160.41
   
$
7.34
 
Hypothetical
 
$
1,000.00
   
$
1,018.00
   
$
6.85
 
(5% return before expenses)
                       
                         
AMR Class
                       
Actual
 
$
1,000.00
   
$
1,166.68
   
$
1.88
 
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%, 0.71%, 0.96%, 1.10%, 1.37% and 0.35% for the Institutional, Y, Investor, Advisor, Retirement 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 FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
COMMON STOCKS - 95.88%
               
CONSUMER DISCRETIONARY - 8.44%
               
Auto Components - 0.64%
               
Gentex Corp.
   
2,365,000
   
$
50,824
 
               
                 
Hotels, Restaurants & Leisure - 1.78%
               
Carnival Corp.
   
1,045,800
     
43,610
 
McDonald’s Corp.
   
843,100
     
59,514
 
Wyndham Worldwide Corp.
   
1,473,480
     
39,504
 
               
             
142,628
 
               
Media - 2.15%
               
CBS Corp.
   
1,208,300
     
19,587
 
Comcast Corp.
   
671,100
     
12,650
 
Interpublic Group of Cos., Inc. ^
   
888,000
     
7,912
 
Time Warner Cable, Inc.
   
196,300
     
11,042
 
Time Warner, Inc.
   
1,944,000
     
64,307
 
Walt Disney Co. Ltd.
   
1,108,200
     
40,826
 
Warner Music Group Corp. ^
   
2,322,000
     
15,906
 
             
172,230
 
               
Multiline Retail - 1.70%
               
J.C. Penney Company, Inc.
   
1,718,900
     
50,140
 
Target Corp.
   
845,100
     
48,061
 
Wal-Mart Stores, Inc.
   
711,860
     
38,191
 
             
136,392
 
               
Specialty Retail - 1.41%
               
Gap, Inc.
   
282,500
     
6,986
 
The Home Depot, Inc.
   
2,732,167
     
96,309
 
Limited Brands, Inc.
   
364,200
     
9,761
 
             
113,056
 
               
Textiles & Apparel - 0.76%
               
Polo Ralph Lauren Corp.
   
681,000
     
61,222
 
Total Consumer Discretionary
           
676,352
 
               
CONSUMER STAPLES - 9.83%
               
Beverages - 1.97%
               
Coca-Cola Co.
   
423,200
     
22,620
 
Diageo plc, ADR
   
1,626,200
     
110,809
 
PepsiCo, Inc.
   
378,300
     
24,673
 
             
158,102
 
               
Food & Drug Retailing - 1.30%
               
CVS Caremark Corp.
   
972,500
     
35,914
 
Safeway, Inc.
   
2,272,900
     
53,641
 
Sysco Corp.
   
475,740
     
15,005
 
             
104,560
 
               
Food Products - 2.84%
               
ConAgra Foods, Inc.
   
2,600,000
     
63,622
 
H.J. Heinz Co.
   
1,166,000
     
54,650
 
Hershey Co.
   
1,200,000
     
56,412
 
Kraft Foods, Inc.
   
242,400
     
7,175
 
Unilever N.V.
   
1,500,000
     
45,390
 
             
227,249
 
               
Household Products - 0.32%
               
The Procter & Gamble Co.
   
412,000
     
25,610
 
               
Personal Products - 0.69%
               
L’Oreal SA, ADR
   
2,675,000
     
55,587
 
               
Tobacco - 2.71%
               
Altria Group, Inc.
   
1,312,900
     
27,820
 
Imperial Tobacco Group plc, ADR
   
1,394,100
     
79,450
 
Lorillard, Inc.
   
102,100
     
8,001
 
Philip Morris International, Inc.
   
2,079,700
     
102,072
 
             
217,343
 
Total Consumer Staples
           
788,451
 
               
                 
ENERGY - 9.46%
               
Energy Equipment & Services - 0.77%
               
Transocean Ltd. ^
   
277,000
     
20,069
 
Weatherford International Ltd. ^
   
2,300,000
     
41,653
 
             
61,722
 
               
Oil & Gas - 8.69%
               
BP plc, ADR
   
2,323,400
     
121,165
 
Chevron Corp.
   
1,095,562
     
89,223
 
ConocoPhillips
   
4,530,596
     
268,166
 
Devon Energy Corp.
   
223,500
     
15,048
 
Duke Energy Corp.
   
890,900
     
14,949
 
Exxon Mobil Corp.
   
1,137,300
     
77,166
 
Marathon Oil Corp.
   
131,300
     
4,221
 
Occidental Petroleum Corp.
   
774,400
     
68,658
 
Royal Dutch Shell plc, ADR
   
622,700
     
37,786
 
             
696,382
 
Total Energy
           
758,104
 
               
FINANCIALS - 20.88%
               
Banks - 13.56%
               
Banco Santander S.A., ADR
   
2,915,692
     
35,980
 
Bank of America Corp.
   
11,627,290
     
207,315
 
Bank of New York Mellon Corp.
   
822,900
     
25,617
 
Citigroup, Inc. ^
   
10,613,368
     
46,380
 
East West Bancorp Escrow ^ ‡
   
586,782
     
11,507
 
 
See accompanying notes
 
 
6
 
 
 
 

 

 
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
East West Bancorp, Inc.
   
1,638,200
   
$
32,092
 
Goldman Sachs Group, Inc.
   
210,200
     
30,521
 
JPMorgan Chase & Co.
   
5,621,098
     
239,346
 
KeyCorp
   
745,774
     
6,727
 
M&T Bank Corp.
   
590,000
     
51,537
 
PNC Financial Services Group, Inc.
   
1,838,649
     
123,576
 
State Street Corp.
   
1,348,300
     
58,651
 
SunTrust Banks, Inc.
   
180,800
     
5,352
 
U.S. Bancorp
   
1,046,260
     
28,008
 
Wells Fargo & Co.
   
4,084,958
     
135,253
 
Zions Bancorporation
   
1,728,000
     
49,645
 
             
1,087,507
 
Diversified Financials - 3.64%
               
American Express Co.
   
1,766,800
     
81,485
 
Capital One Financial Corp.
   
1,419,200
     
61,607
 
Charles Schwab Corp.
   
1,600,000
     
30,864
 
Mitsubishi UFJ Financial Group, Inc., ADR
   
8,256,000
     
42,684
 
Morgan Stanley Dean Witter & Co.
   
1,506,200
     
45,517
 
SLM Corp. ^
   
2,435,500
     
29,811
 
             
291,968
 
Insurance - 3.68%
               
ACE Ltd.
   
1,139,400
     
60,605
 
Allstate Corp.
   
421,100
     
13,757
 
Genworth Financial, Inc. ^
   
920,100
     
15,200
 
Hartford Financial Services Group, Inc.
   
1,075,750
     
30,734
 
Lincoln National Corp.
   
1,032,100
     
31,572
 
MetLife, Inc.
   
1,258,159
     
57,347
 
Prudential Financial, Inc.
   
134,700
     
8,561
 
Travelers Cos., Inc.
   
888,700
     
45,093
 
XL Capital Ltd.
   
1,811,700
     
32,248
 
             
295,117
 
Total Financials
           
1,674,592
 
               
HEALTH CARE - 9.59%
               
Health Care Equipment & Supplies - 2.13%
               
Baxter International, Inc.
   
2,259,700
     
106,703
 
Hospira, Inc. ^
   
1,143,000
     
61,482
 
Zimmer Holdings, Inc. ^
   
36,000
     
2,193
 
             
170,378
 
Health Care Providers & Services - 1.61%
               
Cardinal Health, Inc.
   
1,317,900
     
45,718
 
CIGNA Corp.
   
1,656,200
     
53,098
 
WellPoint, Inc. ^
   
565,900
     
30,445
 
             
129,261
 
Pharmaceuticals - 5.85%
               
Abbott Laboratories
   
114,840
     
5,874
 
Amgen, Inc. ^
   
432,600
     
24,814
 
Bristol-Myers Squibb Co.
   
4,170,200
     
105,464
 
Eli Lilly & Co.
   
2,391,200
     
83,620
 
Johnson & Johnson
   
1,109,200
     
71,322
 
Merck & Co., Inc.
   
1,665,999
     
58,377
 
Pfizer, Inc.
   
7,147,249
     
119,502
 
             
468,973
 
Total Health Care
           
768,612
 
               
INDUSTRIALS - 13.73%
               
Aerospace & Defense - 5.12%
               
Boeing Co.
   
2,005,900
     
145,288
 
Lockheed Martin Corp.
   
250,300
     
21,248
 
Northrop Grumman Corp.
   
1,314,600
     
89,169
 
Raytheon Co.
   
2,228,700
     
129,933
 
United Technologies Corp.
   
336,900
     
25,251
 
             
410,889
 
Air Freight & Couriers - 0.14%
               
FedEx Corp.
   
120,400
     
10,837
 
               
Construction & Engineering - 0.28%
               
Shaw Group, Inc. ^
   
585,415
     
22,410
 
               
Industrial Conglomerates - 4.20%
               
3M Co.
   
727,000
     
64,463
 
General Electric Co.
   
6,443,400
     
121,522
 
Honeywell International, Inc.
   
2,419,525
     
114,855
 
Textron, Inc.
   
995,100
     
22,728
 
Tyco International Ltd.
   
347,200
     
13,468
 
             
337,036
 
Machinery - 3.99%
               
Caterpillar, Inc.
   
358,600
     
24,417
 
Cummins, Inc.
   
166,400
     
12,019
 
Deere & Co.
   
1,039,000
     
62,153
 
Eaton Corp.
   
355,000
     
27,392
 
Illinois Tool Works, Inc.
   
689,700
     
35,243
 
ITT Industries, Inc.
   
930,300
     
51,697
 
PACCAR, Inc.
   
1,047,400
     
48,725
 
SPX Corp.
   
834,000
     
58,280
 
             
319,926
 
Total Industrials
           
1,101,098
 
               
INFORMATION TECHNOLOGY - 13.89%
               
Computers & Peripherals - 7.25%
               
Apple Computer, Inc. ^
   
349,000
     
91,131
 
Dell, Inc. ^
   
1,696,500
     
27,449
 
 
See accompanying notes
 
 
7
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
EMC Corp. ^
   
4,000,000
   
$
76,040
 
Hewlett-Packard Co.
   
2,804,500
     
145,750
 
International Business Machines Corp.
   
1,870,900
     
241,346
 
             
581,716
 
Diversified Telecommunication Services - 0.68%
               
Nokia Corp., ADR ^
   
4,478,000
     
54,453
 
                 
Electrical Equipment - 0.15%
               
Molex, Inc. — Class A
   
618,150
     
11,745
 
               
Electronic Equipment & Instruments - 1.67%
               
Intel Corp.
   
4,930,100
     
112,554
 
Tyco Electronics Ltd.
   
666,100
     
21,395
 
             
133,949
 
IT Consulting & Services - 0.05%
               
Accenture plc
   
96,800
     
4,224
 
               
Semiconductor Equipment & Products - 0.61%
               
Texas Instruments, Inc.
   
1,882,000
     
48,951
 
               
Software - 3.48%
               
Adobe Systems, Inc. ^
   
877,000
     
29,458
 
CA, Inc.
   
1,175,703
     
26,818
 
Intuit, Inc. ^
   
1,422,000
     
51,420
 
Microsoft Corp.
   
2,909,700
     
88,862
 
Oracle Corp.
   
3,183,100
     
82,251
 
             
278,809
 
Total Information Technology
           
1,113,847
 
               
MATERIALS - 2.90%
               
Chemicals - 2.90%
               
Air Products & Chemicals, Inc.
   
1,131,290
     
86,861
 
Dow Chemical Co.
   
2,919,400
     
90,005
 
E. I. du Pont de Nemours & Co.
   
1,086,700
     
43,294
 
PPG Industries, Inc.
   
176,700
     
12,434
 
Total Materials
           
232,594
 
               
TELECOMMUNICATION SERVICES - 2.16%
               
Diversified Telecommunication - 1.18%
               
Vodafone Group plc, ADR
   
4,275,200
     
94,910
 
               
                 
Diversified Telecommunication Services - 0.98%
               
AT&T, Inc.
   
2,298,552
     
59,900
 
Verizon Communications, Inc.
   
648,286
     
18,729
 
             
78,629
 
Total Telecommunication Services
           
173,539
 
               
UTILITIES - 5.00%
               
Electric Utilities - 3.58%
               
CenterPoint Energy, Inc.
   
2,216,800
     
31,833
 
Dominion Resources, Inc.
   
2,839,500
     
118,691
 
Edison International
   
327,400
     
11,253
 
Entergy Corp.
   
465,800
     
37,865
 
Exelon Corp.
   
588,400
     
25,648
 
FPL Group, Inc.
   
1,179,800
     
61,409
 
             
286,699
 
Gas Utilities - 0.82%
               
Spectra Energy Corp.
   
2,813,500
     
65,667
 
               
Multi-Utilities - 0.60%
               
Questar Corp.
   
1,006,000
     
48,238
 
Total Utilities
           
400,604
 
Total Common Stocks
           
7,687,793
 
               
SHORT TERM INVESTMENTS - 3.78%
               
American Beacon U.S. Government Money Market Select Fund #
   
60,000,000
     
60,000
 
JPMorgan U.S. Government Money Market Fund
   
212,638,158
     
212,638
 
 
 
                 
   
Par
         
   
Amount
         
U.S. Treasury,
               
0.14%, Due 6/17/2010 §
 
$
21,315
     
21,311
 
0.14%, Due 7/15/2010 §
   
9,104
     
9,101
 
Total Short Term Investments
           
303,050
 
TOTAL INVESTMENTS 99.66% — (Cost $7,577,557)
           
7,990,843
 
OTHER ASSETS, NET OF LIABILITIES - 0.34%
           
27,465
 
                 
TOTAL NET ASSETS - 100.00%
         
$
8,018,308
 
               
 
See accompanying notes
 
 
8
 
 
 

 
 

 
 
American Beacon Large Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
     
   
Percentages are stated as a percent of net assets.
     
^
 
Non-income producing security.
     
 
Restricked Stock — 6 Months
     
#
 
The Fund is affiliated by having the same investment advisor.
     
§
 
At April 30, 2010, 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
 
5,026
   
Jun 2010
 
$
297,388
   
$
5,314
 
                             
 
See accompanying notes
 
 
9
 
 
 

 
 

American Beacon Large Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2010 (in thousands, except share and per share amounts) (Unaudited)
 
         
         
Assets:
       
Investments in unaffiliated securities, at value A
 
$
7,930,843
 
Investments in affiliated securities, at value B
   
60,000
 
Receivable for investments sold
   
75,294
 
Dividends and interest receivable
   
7,193
 
Receivable for fund shares sold
   
28,798
 
Receivable for tax reclaims
   
208
 
Prepaid expenses
   
162
 
Total assets
   
8,102,498
 
Liabilities:
       
Payable for investments purchased
   
43,316
 
Payable for fund shares redeemed
   
25,390
 
Payable for variation margin on open futures contracts
   
5,765
 
Management and investment advisory fees payable (Note 2)
   
5,078
 
Administrative service and service fees payable
   
3,149
 
Professional fees payable
   
30
 
Other liabilities
   
1,462
 
Total liabilities
   
84,190
 
Net assets
 
$
8,018,308
 
       
Analysis of Net Assets:
       
Paid-in-capital
   
9,600,547
 
Undistributed net investment income
   
21,807
 
Accumulated net realized loss
   
(2,022,646
)
Unrealized appreciation of investments, futures contracts, and foreign currency
   
418,600
 
Net assets
 
$
8,018,308
 
       
Shares outstanding (no par value):
       
Institutional Class
   
142,006,729
 
Y Class
   
97,943
 
Investor Class
   
261,208,590
 
Advisor Class
   
7,707,332
 
Retirement Class
   
80
 
AMR Class
   
31,787,857
 
         
Net asset value, offering and redemption price per share:
       
Institutional Class
 
$
18.69
 
Y Class
 
$
18.63
 
Investor Class
 
$
17.76
 
Advisor Class
 
$
17.63
 
Retirement Class
 
$
17.51
 
AMR Class
 
$
18.47
 
 
 
         
A Cost of investments in unaffiliated securities
 
$
7,517,557
 
B Cost of investments in affiliated securities
 
$
60,000
 
 
See accompanying notes
 
 
10
 
 
 
 

 

 
American Beacon Large Cap Value FundSM
Statement of Operations
Six Months Ended April 30, 2010 (in thousands) (Unaudited)
 
         
         
Investment Income:
       
Dividend income from unaffiliated securities (net of foreign taxes)*
 
$
79,567
 
Dividend income from affiliated securities
   
20
 
Interest income
   
10
 
Total investment income
   
79,597
 
Expenses:
       
Management and investment advisory fees (Note 2)
   
8,773
 
Administrative service fees (Note 2):
       
Institutional Class
   
3,645
 
Y Class
   
1
 
Investor Class
   
6,300
 
Advisor Class
   
187
 
AMR Class
   
139
 
Transfer agent fees:
       
Institutional Class
   
66
 
Investor Class
   
126
 
Advisor Class
   
7
 
AMR Class
   
14
 
Custody and fund accounting fees
   
534
 
Professional fees
   
120
 
Registration fees and expenses
   
63
 
Service fees:
       
Investor Class (Note 2)
   
7,623
 
Advisor Class (Note 2)
   
156
 
Distribution fees — Service Class (Note 2)
   
157
 
Prospectus and shareholder reports
   
741
 
Trustee fees
   
245
 
Other expenses
   
240
 
Total expenses
   
29,137
 
Net investment income
   
50,460
 
       
Realized and unrealized gain (loss) on investments:
       
Net realized gain (loss) from:
       
Investments
   
(55,448
)
Commission recapture (Note 1)
   
32
 
Futures contracts
   
27,561
 
Change in net unrealized appreciation or depreciation of:
       
Investments
   
1,065,063
 
Futures contracts
   
10,188
 
Net gain on investments
   
1,047,396
 
Net increase in net assets resulting from operations
 
$
1,097,856
 
       
         
* Foreign taxes
 
$
469
 
 
See accompanying notes
 
 
11
 
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Statement of Changes in Net Assets (in thousands)
 
                 
   
Six Months
   
Year Ended
 
   
Ended
   
October 31,
 
   
April 30, 2010
   
2009
 
   
(unaudited)
         
Increase (Decrease) in Net Assets:
               
Operations:
               
Net investment income
 
$
50,460
   
$
125,394
 
Net realized loss on investments, futures contracts, and foreign currency transactions
   
(27,855
)
   
(825,817
)
Change in net unrealized appreciation of investments, futures contracts, and foreign currency translations
   
1,075,251
     
1,366,171
 
Net increase in net assets resulting from operations
   
1,097,856
     
665,748
 
             
Distributions to Shareholders:
               
Net investment income:
               
Institutional Class
   
(40,440
)
   
(57,494
)
Y Class
   
(15
)
   
 
Investor Class
   
(61,616
)
   
(96,586
)
Advisor Class
   
(1,747
)
   
(2,701
)
AMR Class
   
(10,649
)
   
(15,992
)
Net distributions to shareholders
   
(114,467
)
   
(172,773
)
             
Capital Share Transactions:
               
Proceeds from sales of shares
   
982,021
     
1,578,918
 
Reinvestment of dividends and distributions
   
109,446
     
164,886
 
Cost of shares redeemed
   
(712,088
)
   
(1,810,886
)
Net increase (decrease) in net assets from capital share transactions
   
379,379
     
(67,082
)
Net increase in net assets
   
1,362,768
     
425,893
 
             
Net Assets:
               
Beginning of period
   
6,655,540
     
6,229,647
 
End of Period *
 
$
8,018,308
   
$
6,655,540
 
* Includes undistributed net investment income of
 
$
21,807
   
$
85,814
 
             
 
See accompanying notes
 
 
12
 
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (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
 
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 $250,000
Y Class
 
Investors making an initial investment of $100,000
Investor Class
 
General public and investors investing through an intermediary
Advisor Class
 
Investors investing through an intermediary
Retirement Class
 
Investors investing through an intermediary
AMR Class
 
Investors in the tax-exempt retirement and benefit plans of the Manager, 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 FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
Valuation Inputs
 
 
Various inputs may be used to determine the value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
 
         
         
   
Level 1
 
Quoted prices in active markets for identical securities.
         
   
Level 2
 
Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
         
   
Level 3
 
Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.
 
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2010, the Fund’s investments were classified as follows: (in thousands)
 
                                 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stock
 
$
7,687,793
   
$
   
$
   
$
7,687,793
 
Short Term Investments
   
272,638
     
30,412
     
     
272,638
 
Total Investments in Securities
 
$
7,960,431
   
$
30,412
   
$
   
$
7,990,843
 
                                 
Futures Contracts
   
297,388
     
     
     
297,388
 
 
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.
 
 
14

 
 
 

 
 
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
Values of Derivative Instruments not accounted for as hedging instruments as of April 30, 2010 (in thousands)
 
             
   
Liability
   
Statement of Assets and Liabilities
 
Derivatives
 
Fair Value
Unrealized appreciation of investments, futures contracts, and foreign currency
 
Equity Contracts*
 
$
5,314
 
 
Effect of derivative instruments not accounted for as hedging instruments during the year ended April 30, 2010 (in thousands)
 
             
Statement of Operations
 
Derivative
 
Fair Value
Net realized gain (loss) from futures contracts
 
Equity Contracts
 
$
27,561
 
Change in net unrealized appreciation or depreciation of futures contracts
 
Equity Contracts
 
$
10,188
 
 
 
     
*
 
Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
 
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.
 
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 investment advisory and portfolio management services. Investment assets of the
 
 
15
 
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
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, 2010 were as follows (dollars in thousands):
 
             
       
Amounts paid to
 
Net Amounts
Management
 
Management
 
Investment
 
Retained by
Fee Rate
 
Fee
 
Advisors
 
Manager
0.175%-0.65%
 
$8,773
 
$6,945
 
$1,828
 
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, Y, Investor, Advisor, and Retirement 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 and Retirement Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no 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 and Retirement Classes 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 and 0.50% of the average daily net assets of the Retirement 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 Y, Investor, Advisor and Retirement Classes. As compensation for performing the duties required under the Service Plans, the Manager receives 0.10% of the average daily net assets of the Y Class, 0.25% of the average daily net assets of the Advisor and Retirement Classes and up to 0.375% of the average daily net assets of the Investor Class.
 
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”). 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, 2010, the Manager earned fees from the Select Funds totaling $29,753.
 
 
16
 
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
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, 2010, 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, 2010, 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 does not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2009 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, 2010 and the fiscal year ended October 31, 2009 were as follows (in thousands):
 
                 
   
 
Six Months
   
Year Ended
 
   
Ended
April 30,
   
October 31,
 
   
2010
   
2009
 
   
(unaudited)
         
Distributions paid from:
               
Ordinary income*
               
Institutional Class
 
$
40,440
   
$
57,494
 
Y Class
   
15
     
 
Investor Class
   
61,616
     
96,586
 
Advisor Class
   
1,747
     
2,701
 
AMR Class
   
10,649
     
15,992
 
Long-term capital gain
               
Institutional Class
   
     
 
Investor Class
   
     
 
Advisor Class
   
     
 
AMR Class
   
     
 
Total distributions paid
 
$
114,467
   
$
172,773
 
             
 
 
     
*
 
For tax purposes, short-term capital gains are considered ordinary income distributions.
 
17
 
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
As of April 30, 2010, the components of distributable earnings on a tax basis were as follows (in thousands):
 
         
         
Cost basis of investments for federal income tax purposes
 
$
7,846,200
 
         
Unrealized appreciation
   
992,978
 
Unrealized depreciation
   
(848,335
)
Net unrealized appreciation/(depreciation)
   
144,643
 
         
Undistributed ordinary income
   
21,807
 
Undistributed long-term gain/(loss)
   
(1,754,045
)
Other temporary differences
   
5,356
 
         
Distributable earnings
 
$
(1,582,239
)
       
 
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, 2010 (in thousands):
         
         
Paid-in-capital
 
$
2
 
Undistributed net investment income
   
 
Accumulated net realized gain (loss)
   
(2
)
Unrealized appreciation (depreciation) of investments, futures contracts and foreign currency
   
 
 
At April 30, 2010, the capital loss carry forward position of the Fund for federal income tax purposes was $1,044,692, $684,423, and $19,617 expiring in 2016, 2017, and 2018, respectively. (in thousands)
 
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, 2010 were (in thousands) $1,113,842 and $850,047, respectively.
 
A summary of the Fund’s direct transactions in the Select Funds for the six months ended April 30, 2010 is set forth below (in thousands):
 
                                 
   
October 31, 2009
                 
April 30, 2010
Affiliate
 
Shares/Market Value
 
 
Purchases
 
 
Sales
 
Shares/Market Value
USG Select Fund
 
$
60,000
   
$
   
$
   
$
60,000
 
 
5. Capital Share Transactions
 
The tables below summarize the activity in capital shares for each Class of the Fund (dollars and shares in thousands):
 
 
18
 
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
Six months Ended April 30, 2010
 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
16,009
   
$
283,566
     
97
   
$
1,744
     
39,624
   
$
670,188
 
Reinvestment of dividends
   
2,134
     
36,957
     
1
     
15
     
3,645
     
60,109
 
Shares redeemed
   
(12,277
)
   
(216,838
)
   
     
     
(26,991
)
   
(452,459
)
Net increase (decrease) in shares outstanding
   
5,866
   
$
103,685
     
98
   
$
1,759
     
16,278
   
$
277,838
 
 

 
                                                 
   
Advisor Class
   
Retirement Class
   
AMR Class
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
706
   
$
11,926
     
   
$
     
828
   
$
14,597
 
Reinvestment of dividends
   
105
     
1,716
     
     
     
623
     
10,649
 
Shares redeemed
   
(573
)
   
(9,513
)
   
     
     
(1,925
)
   
(33,278
)
Net increase (decrease) in shares outstanding
   
238
   
$
4,129
     
   
$
     
(474
)
 
$
(8,032
)
 
Year Ended October 31, 2009
 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
38,693
   
$
535,949
     
   
$
1
     
74,391
   
$
985,338
 
Reinvestment of dividends
   
4,043
     
53,008
     
     
     
7,465
     
93,236
 
Shares redeemed
   
(42,400
)
   
(575,194
)
   
     
     
(88,535
)
   
(1,151,477
)
Net increase (decrease) in shares outstanding
   
336
   
$
13,763
     
   
$
1
     
(6,679
)
 
$
(72,903
)
 

 
                                                 
   
Advisor Class
   
Retirement Class
   
AMR Class
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
1,726
   
$
22,607
     
   
$
1
     
2,516
   
$
35,022
 
Reinvestment of dividends
   
214
     
2,650
     
     
     
1,236
     
15,992
 
Shares redeemed
   
(1,478
)
   
(19,228
)
   
     
     
(4,909
)
   
(64,987
)
Net increase (decrease) in shares outstanding
   
462
   
$
6,029
     
   
$
1
     
(1,157
)
 
$
(13,973
)
 
6. Subsequent Events
 
Management has evaluated the possibility of subsequent events existing in the Fund’s financial statements. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements.
 
 
19
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
 
                                                 
   
Institutional Class
 
   
Six Months
       
   
Ended April
   
 
Year Ended October 31,
 
   
30, 2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
   
(unaudited)
                                         
Net asset value, beginning of period
 
$
16.32
   
$
15.01
   
$
26.03
   
$
23.77
   
$
21.00
   
$
18.23
 
                                     
Income from investment operations:
                                               
Net investment income A,B
   
0.15
     
0.35
     
0.51
     
0.40
     
0.31
     
0.28
 
Net gains (losses) on securities (both realized and unrealized)
   
2.52
     
1.40
     
(10.41
)
   
2.78
     
3.48
     
2.74
 
Total income (loss) from investment operations
   
2.67
     
1.75
     
(9.90
)
   
3.18
     
3.79
     
3.02
 
Less distributions:
                                               
Dividends from net investment income
   
(0.30
)
   
(0.44
)
   
(0.41
)
   
(0.31
)
   
(0.26
)
   
(0.25
)
Distributions from net realized gains on securities
   
     
     
(0.71
)
   
(0.61
)
   
(0.76
)
   
 
Total distributions
   
(0.30
)
   
(0.44
)
   
(1.12
)
   
(0.92
)
   
(1.02
)
   
(0.25
)
Net asset value, end of period
 
$
18.69
   
$
16.32
   
$
15.01
   
$
26.03
   
$
23.77
   
$
21.00
 
Total return
   
16.49
%C
   
12.41
%
   
(39.59
)%
   
13.76
%
   
18.69
%
   
16.64
%
Ratios and supplemental data:
                                               
Net assets, end of period (in thousands)
 
$
2,653,484
   
$
2,221,162
   
$
2,038,539
   
$
2,493,451
   
$
958,830
   
$
201,111
 
Ratios to average net assets (annualized):
                                               
Expenses, net of waivers
   
0.60
%
   
0.61
%
   
0.58
%
   
0.59
%
   
0.60
%
   
0.60
%
Expenses, before waivers
   
0.60
%
   
0.61
%
   
0.58
%
   
0.59
%
   
0.60
%
   
0.60
%
Net investment income, net of waivers
   
1.58
%
   
2.36
%
   
2.19
%
   
1.82
%
   
1.86
%
   
1.58
%
Net investment income (loss), before waivers
   
1.58
%
   
2.36
%
   
2.19
%
   
1.82
%
   
1.86
%
   
1.58
%
Portfolio turnover rate
   
12
%C
   
27
%
   
28
%
   
20
%
   
26
%
   
25
%
 
     
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.
 
20
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding through the period)
 
                                                                 
   
Y Class
   
Investor Class
 
   
Six
                   
   
Months
   
 
             
   
Ended
   
August 3
   
Six Months
       
   
April 30,
   
to
October
   
Ended April
   
 
Year Ended October 31,
 
   
2010
   
31, 2009
   
30, 2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
   
(unaudited)
           
(unaudited)
                                         
Net asset value, beginning of period
 
$
16.32
   
$
15.59
   
$
15.51
   
$
14.29
   
$
24.83
   
$
22.74
   
$
20.16
   
$
17.54
 
Income from investment operations:
                                                               
Net investment income A,B
   
0.16
     
0.06
     
0.11
     
0.28
     
0.41
     
0.35
     
0.28
     
0.27
 
Net gains (losses) on securities (both realized and unrealized)
   
2.49
     
0.67
     
2.39
     
1.34
     
(9.88
)
   
2.63
     
3.31
     
2.58
 
Total income (loss) from investment operations
   
2.65
     
0.73
     
2.50
     
1.62
     
(9.47
)
   
2.98
     
3.59
     
2.85
 
Less distributions:
                                                               
Dividends from net investment income
   
(0.34
)
   
     
(0.25
)
   
(0.40
)
   
(0.36
)
   
(0.28
)
   
(0.25
)
   
(0.23
)
Distributions from net realized gains on securities
   
     
     
     
     
(0.71
)
   
(0.61
)
   
(0.76
)
   
 
Total distributions
   
(0.34
)
   
     
(0.25
)
   
(0.40
)
   
(1.07
)
   
(0.89
)
   
(1.01
)
   
(0.23
)
Net asset value, end of period
 
$
18.63
   
$
16.32
   
$
17.76
   
$
15.51
   
$
14.29
   
$
24.83
   
$
22.74
   
$
20.16
 
Total return
   
16.37
%C
   
4.68
%C
   
16.26
%C
   
11.99
%
   
(39.72
)%
   
13.46
%
   
18.44
%
   
16.33
%
Ratios and supplemental data:
                                                               
Net assets, end of period (in thousands)
 
$
1,825
   
$
1
   
$
4,640,039
   
$
3,798,632
   
$
3,594,565
   
$
5,198,835
   
$
2,586,410
   
$
526,357
 
Ratios to average net assets (annualized):
                                                               
Expenses, net of waivers
   
0.71
%
   
0.68
%E
   
0.96
%
   
0.93
%
   
0.83
%
   
0.83
%
   
0.85
%
   
0.86
%
Expenses, before waivers
   
0.71
%
   
0.68
%E
   
0.96
%
   
0.93
%
   
0.83
%
   
0.83
%
   
0.85
%
   
0.86
%
Net investment income, net of waivers
   
1.10
%
   
1.58
%E
   
1.21
%
   
2.05
%
   
1.94
%
   
1.59
%
   
1.61
%
   
1.30
%
Net investment income (loss), before waivers
   
1.10
%
   
1.58
%E
   
1.21
%
   
2.05
%
   
1.94
%
   
1.59
%
   
1.61
%
   
1.30
%
Portfolio turnover rate
   
12
%C
   
27
%D
   
12
%C
   
27
%
   
28
%
   
20
%
   
26
%
   
25
%
 
     
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
 
Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.
     
E
 
Annualized.
 
21
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
 
                                                                 
   
Advisor Class
   
Retirement Class
 
   
Six
                                           
Six
       
   
Months
                                   
May
   
Months
       
   
Ended
                                   
31 to
   
Ended
   
May 1 to
 
   
April 30,
   
Year Ended October 31,
   
October
   
April 30,
   
October
 
   
2010
   
2009
   
2008
   
2007
   
2006
   
31, 2005
   
2010
   
31, 2009
 
   
(unaudited)
                                           
(unaudited)
         
Net asset value, beginning of period
 
$
15.39
   
$
14.19
   
$
24.70
   
$
22.64
   
$
20.13
   
$
19.33
   
$
15.36
   
$
12.66
 
Income from investment operations:
                                                               
Net investment income A,B
   
0.10
     
0.26
     
0.32
     
0.28
     
0.26
     
0.01
     
0.07
     
0.08
 
Net gains (losses) on securities (both realized and unrealized)
   
2.37
     
1.32
     
(9.79
)
   
2.62
     
3.27
     
0.79
     
2.37
     
2.62
 
Total income (loss) from investment operations
   
2.47
     
1.58
     
(9.47
)
   
2.90
     
3.53
     
0.80
     
2.44
     
2.70
 
Less distributions:
                                                               
Dividends from net investment income
   
(0.23
)
   
(0.38
)
   
(0.33
)
   
(0.23
)
   
(0.26
)
   
     
(0.29
)
   
 
Distributions from net realized gains on securities
   
     
     
(0.71
)
   
(0.61
)
   
(0.76
)
   
     
     
 
Total distributions
   
(0.23
)
   
(0.38
)
   
(1.04
)
   
(0.84
)
   
(1.02
)
   
     
(0.29
)
   
 
Net asset value, end of period
 
$
17.63
   
$
15.39
   
$
14.19
   
$
24.70
   
$
22.64
   
$
20.13
   
$
17.51
   
$
15.36
 
Total return
   
16.19
%C
   
11.81
%
   
(39.87
)%
   
13.16
%
   
18.18
%
   
4.14
%
   
16.04
%C
   
21.33
%C
Ratios and supplemental data:
                                                               
Net assets, end of period (in thousands)
 
$
135,881
   
$
114,945
   
$
99,416
   
$
99,854
   
$
39,077
   
$
11,604
   
$
1
   
$
1
 
Ratios to average net assets (annualized):
                                                               
Expenses, net of waivers
   
1.10
%
   
1.10
%
   
1.08
%
   
1.08
%
   
1.09
%
   
1.14
%D
   
1.37
%
   
1.37
%D
Expenses, before waivers
   
1.10
%
   
1.12
%
   
1.08
%
   
1.08
%
   
1.09
%
   
1.77
%D
   
1.37
%
   
1.37
%D
Net investment income, net of waivers
   
1.08
%
   
1.86
%
   
1.69
%
   
1.32
%
   
1.39
%
   
1.72
%D
   
0.80
%
   
1.15
%D
Net investment income (loss), before waivers
   
1.08
%
   
1.84
%
   
1.69
%
   
1.32
%
   
1.39
%
   
1.09
%D
   
0.80
%
   
1.15
%D
Portfolio turnover rate
   
12
%C
   
27
%
   
28
%
   
20
%
   
26
%
   
25
%E
   
12
%C
   
27
%F
 
     
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.
     
F
 
Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.
 
22
 
 
 

 
 
 
American Beacon Large Cap Value FundSM
Financial Highlights
(For a share outstanding through the period)
 
                                                 
   
AMR Class
 
   
Six
       
   
Months
       
   
Ended
       
   
April 30,
   
Year Ended October 31,
 
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
   
(unaudited)
                                         
Net asset value, beginning of period
 
$
16.14
   
$
14.88
   
$
25.80
   
$
23.55
   
$
20.78
   
$
18.02
 
Income from investment operations:
                                               
Net investment income A,B
   
0.16
     
0.37
     
0.51
     
0.45
     
0.35
     
0.31
 
Net gains (losses) on securities (both realized and unrealized)
   
2.50
     
1.38
     
(10.26
)
   
2.76
     
3.47
     
2.73
 
Total income (loss) from investment operations
   
2.66
     
1.75
     
(9.75
)
   
3.21
     
3.82
     
3.04
 
Less distributions:
                                               
Dividends from net investment income
   
(0.33
)
   
(0.49
)
   
(0.46
)
   
(0.35
)
   
(0.29
)
   
(0.28
)
Distributions from net realized gains on securities
   
     
     
(0.71
)
   
(0.61
)
   
(0.76
)
   
 
Total distributions
   
(0.33
)
   
(0.49
)
   
(1.17
)
   
(0.96
)
   
(1.05
)
   
(0.28
)
Net asset value, end of period
 
$
18.47
   
$
16.14
   
$
14.88
   
$
25.80
   
$
23.55
   
$
20.78
 
Total return
   
16.67
%C
   
12.59
%
   
(39.43
)%
   
14.03
%
   
19.08
%
   
16.95
%
Ratios and supplemental data:
                                               
Net assets, end of period (in thousands)
 
$
587,078
   
$
520,799
   
$
497,127
   
$
972,260
   
$
1,024,899
   
$
848,219
 
Ratios to average net assets (annualized):
                                               
Expenses, net of waivers
   
0.35
%
   
0.36
%
   
0.32
%
   
0.32
%
   
0.34
%
   
0.35
%
Expenses, before waivers
   
0.35
%
   
0.36
%
   
0.32
%
   
0.32
%
   
0.34
%
   
0.35
%
Net investment income, net of waivers
   
1.84
%
   
2.62
%
   
2.44
%
   
2.13
%
   
2.18
%
   
1.87
%
Net investment income (loss), before waivers
   
1.84
%
   
2.62
%
   
2.44
%
   
2.13
%
   
2.18
%
   
1.87
%
Portfolio turnover rate
   
12
%C
   
27
%
   
28
%
   
20
%
   
26
%
   
25
%
 
 
     
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.
 
23
 
 
 
 
 

 
 
 
 
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24
 
 
 
 

 
 
 
 
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25
 
 
 

 
 
 
 
Delivery of Documents
 
 
To reduce expenses, your financial institution may mail only one copy of the Prospectus, Annual Report and Semi-Annual Report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your financial institution. Delivery of individual copies will commence thirty days after receiving your request.
 
 
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
 
 
To obtain more information about the Fund:
 
     
     
 
     
By E-mail:
 
On the Internet:
american_beacon.funds@ambeacon.com
 
Visit our website at www.americanbeaconfunds.com
     
 
By Telephone:
 
By Mail:
Institutional, Y, Investor, Advisor and Retirement Classes
 
American Beacon Funds
Call (800) 658-5811
 
P.O. Box 219643
AMR ClassSM
 
Kansas City, MO 64121-9643
Call (800) 345-2345
   
     
Availability of Quarterly Portfolio Schedules
 
Availability of Proxy Voting Policy and Records
     
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference 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.
 
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, LLC
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 and the American Beacon Large Cap Value Fund are service marks of American Beacon Advisors, Inc.
 
 
SAR 4/10
 
 
00074817
 

 
 

 
 
 
 
 

 
 
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, 2010
 

 
 

 
 
 
 
 
 
 
Fellow Shareholders,
 
Over the past six months, one universal theme seems to have emerged: while sudden and significant volatility may characterize the new economic world order, it doesn’t mean investors can’t benefit. Opportunity abounds for those who know how to capitalize on it.
 
Fortunately, this theme also underlies our investment philosophy at American Beacon:
 
With portfolios invested for the new economic reality—and conservatively managed for the longer term—we believe investors are better positioned to ride out the inevitable economic storms, whenever and wherever they occur.
 
It’s a philosophy that has served our shareholders well. It also explains how, in the face of continued weakness in the U.S. job and housing markets and mounting sovereign debt worries in Europe, our domestic equity-exposed funds could generate such respectable returns for the six-month period ended April 30, 2010. The American Beacon Small Cap Value Fund (Institutional Class) for example, generated a 28.55% return during this reporting period. Please note that the recent growth rate in the stock market has produced short-term returns that are not typical and may not continue in the future.
 
As global volatility has become the new norm, our focus at American Beacon remains trained on anticipating opportunities and meeting the challenges investors face today and will likely face tomorrow. This is what drives the composition of our fund line-up and the development of our new offerings in the last year.
 
It’s also a reflection of our commitment to you, a commitment we summarize as: Oversight 360°. Ours is a continuous commitment to cast a watchful and analytical eye over all the factors that influence our fellow shareholders’ investments.
 
As you review the enclosed market overview, portfolio listings, and detailed financial data, please know that 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 investment in the American Beacon Funds and know that we remain dedicated to offering you and your advisor the level of service and broad range of well-managed investment products you’ve come to expect from us.
 
     
     
   
Best Regards,
     
   
   
Gene L. Needles, Jr.
   
President
   
American Beacon Funds
 
 
1
 
 
 
 

 

 
Domestic Equity Market Overview
April 30, 2010 (Unaudited)
 
In the face of continued weakness in the U.S. employment rate and the U.S. housing market and mounting sovereign debt worries abroad, the S&P 500 still managed to return an impressive 16.43% for the six months ended April 30, 2010. Buoyed by relatively healthy corporate earnings, the broader market performance reflected the economic optimism represented by: resilient personal spending on the part of the U.S. consumer; improved credit market conditions; and enhanced corporate efficiency. Still, corporate earnings remain below the long-term trend. Earnings still have room to grow, which bodes well for investors.
 
Another positive for investors comes from the fact that the retrenchment by Corporate America in the form of cost-cutting and improved operating efficiencies, which became apparent as 2009’s fourth quarter earnings season unfolded, is expected to continue providing added operating leverage. This was hardly an insignificant trend. During the fourth quarter, incremental pre-tax margins for companies in the S&P 500 Index were an astounding 64%, in other words, every $1 in incremental revenue gain resulted in $0.64 in additional pre-tax earnings. This improved corporate free cash flow put substantial cash reserves back onto balance sheets. That cash was expected to find its way into investors’ hands through increased dividends and/or share repurchases.
 
Despite flat income growth, the consumer resurfaced during the last six months, implying that there may have been an accompanying decline in the savings rate. Willingness of the consumer to spend was significant since consumer spending comprises two-thirds of the U.S. economy (based on GDP), making it a critical factor in gauging economic progress.
 
In addition to the consumer, other signs of economic expansion emerged since last October: productivity recovered, while inflation stayed in check, and the Fed remained accommodative. Cyclical sectors naturally performed well in this environment. Consumer Discretionary, Industrial, and Financial companies led the U.S. equity markets in returns, while Telecommunications, Energy, and Consumer Staples lagged. Value stocks also remained in favor, outpacing their growth counterparts across the market cap spectrum.
 
We continue to find compelling investment opportunities as the economic recovery builds momentum. Three core factors provide support for our optimism:
 
 
 
Corporate earnings and the U.S. economy are recovering from one of the deepest recessions since the Great Depression, which should amplify the magnitude of the equity market’s recovery.
       
 
 
Companies have retrenched to such a level that modest increases in demand should be disproportionately accretive to earnings.
       
 
 
The recovery of value stocks tends to carry on for several successive years following sizable market dislocations akin to 2008.
 
With these dynamics underlying the domestic equity market, we feel there is some cause for continued investor optimism for the remainder of the year.
 
 
2
 
 

 
 

 
 
 
Performance Overview
American Beacon Small Cap Value FundSM
April 30, 2010 (Unaudited)

 
The Institutional Class of the Small Cap Value Fund returned 28.55% for the six months ended April 30, 2010, lagging the Russell 2000® Value Index (“Index”) return of 30.66% but outperforming the Lipper Small-Cap Value Funds Index return of 27.52% for the same period.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
   
6 Months*
 
1 Year
 
5 Years
 
10 Years
Institutional Class(1,6)
   
28.55
%
   
55.45
%
   
5.59
%
   
12.70
%
Y Class (1,2,6)
   
28.36
%
   
55.01
%
   
5.53
%
   
12.67
%
Investor Class(1,6)
   
28.37
%
   
54.83
%
   
5.30
%
   
12.39
%
Advisor Class(1,3,6)
   
28.20
%
   
54.66
%
   
5.05
%
   
12.19
%
Retirement Class (1,4,6)
   
28.13
%
   
54.36
%
   
5.00
%
   
12.17
%
AMR Class(1,6)
   
28.66
%
   
55.74
%
   
5.85
%
   
10.72
%
Lipper Small-Cap Value Funds Index(5)
   
27.52
%
   
53.26
%
   
6.05
%
   
10.04
%
Russell 2000 Value Index (5)
   
30.66
%
   
52.44
%
   
5.26
%
   
9.58
%
 
 
     
*
 
Not annualized
     
1.
 
Please note that the recent growth rate in the stock market has helped to produce short-term returns that are not typical and may not continue in the future. 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 call 1-800-967-9009 or visit www.americanbeaconfunds.com. 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 one-year, five-year and ten-year periods represents the total returns achieved by the Institutional Class from 4/30/00 up to 8/3/09, the inception date of the Y Class. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/00.
     
3.
 
Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/00 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 4/30/00. 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.
     
4.
 
Fund performance for the five-year and ten-year periods represents the total returns achieved by the Investor Class from 4/30/00 up to 5/1/03 and the Advisor Class from 5/1/03 up to 5/1/09, the inception date of the Retirement Class, and the returns of the Retirement Class since its inception. Expenses of the Retirement Class are higher than those of the Advisor and Investor Classes. As a result, total returns shown may be higher than they would have been had the Retirement Class been in existence since 4/30/00.
     
5.
 
Russell 2000® 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.
     
6.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, Retirement, and AMR Class shares was 0.85%, 1.12%, 1.16%, 1.35%, 1.54%, and 0.60%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
 
The Fund underperformed the Index entirely due to poor performance through stock selection, as sector allocation was neutral relative to the Index.
 
Holdings in the Financials and Consumer Discretionary sectors detracted value from the Fund’s relative performance. Individual holdings in the Financials sector that had the largest impact on the Fund’s underperformance were Investment Technology Group (down 19.7%), DiamondRock Hospitality (up 42.2%), and Texas Capital Bancshares (down 3.9%) for the period the Fund owned the securities. In the Consumer Discretionary sector, Quiksilver (up 161.7%), Cabela’s (up 42.0%), and Brown Shoe (up 67.9%) were the largest detractors, for the period the Fund owned the securities. Good stock selection in the Health Care sector, where Amerigroup (up 62.6%) and Parexel International (up 90.0%) contributed most to returns, added relative value.
 
The Fund’s overweighting in Consumer Discretionary, the best performing sector in the Index, added value relative to the Index through sector allocation. This positive impact was offset by overweightings in the Health Care and Information Technology sectors, 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 FundSM
April 30, 2010 (Unaudited)
 
Top Ten Holdings
 
         
   
% of
   
Net Assets
Valassis Communications, Inc.
   
1.4
%
Tidewater, Inc.
   
0.9
%
LifePoint Hospitals, Inc.
   
0.8
%
Rent-A-Center, Inc.
   
0.8
%
NBTY, Inc.
   
0.7
%
Aspen Insurance Holdings Ltd.
   
0.7
%
Vishay Intertechnology, Inc.
   
0.7
%
Terex Corp.
   
0.6
%
Synovus Financial Corp.
   
0.6
%
StanCorp Financial Group, Inc.
   
0.6
%
 
Sector Allocation
 
         
   
% of
   
Equities
Financials
   
24.4
%
Industrials
   
16.9
%
Consumer Discretionary
   
14.8
%
Information Technology
   
14.0
%
Health Care
   
9.8
%
Materials
   
6.0
%
Energy
   
5.4
%
Utilities
   
5.4
%
Consumer Staples
   
2.6
%
Telecommunication Services
   
0.7
%
 
4
 
 

 
 

 
 
 
Fund Expenses
American Beacon Small Cap Value FundSM
April 30, 2010 (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, 2009 through April 30, 2010.
 
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 custodi al 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.
 
                         
   
 
 
 
   
   
 
 
 
 
Expenses Paid
   
Beginning
Account
 
Ending
Account
 
During Period*
   
Value
11/1/09
 
Value
4/30/10
 
11/1/09-4/30/10
Institutional Class
                       
Actual
 
$
1,000.00
   
$
1,285.50
   
$
4.70
 
Hypothetical
 
$
1,000.00
   
$
1,020.68
   
$
4.16
 
(5% return before expenses)
                       
                         
Y Class
                       
Actual
 
$
1,000.00
   
$
1,283.61
   
$
6.17
 
Hypothetical
 
$
1,000.00
   
$
1,019.39
   
$
5.46
 
(5% return before expenses)
                       
                         
Investor Class
                       
Actual
 
$
1,000.00
   
$
1,283.67
   
$
6.68
 
Hypothetical
 
$
1,000.00
   
$
1,018.94
   
$
5.91
 
(5% return before expenses)
                       
                         
Advisor Class
                       
Actual
 
$
1,000.00
   
$
1,282.03
   
$
7.53
 
Hypothetical
 
$
1,000.00
   
$
1,018.20
   
$
6.66
 
(5% return before expenses)
                       
                         
Retirement Class
                       
Actual
 
$
1,000.00
   
$
1,281.34
   
$
8.48
 
Hypothetical
 
$
1,000.00
   
$
1,017.36
   
$
7.50
 
(5% return before expenses)
                       
                         
AMR Class
                       
Actual
 
$
1,000.00
   
$
1,286.58
   
$
3.29
 
Hypothetical
 
$
1,000.00
   
$
1,021.92
   
$
2.91
 
(5% return before expenses)
                       
 
 
     
*
 
Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.83%, 1.09%, 1.18%, 1.33%, 1.50% and 0.58% for the Institutional, Y, Investor, Advisor, Retirement 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 FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
COMMON STOCKS - 94.28%
               
COMMUNICATIONS - 0.36%
               
Media - 0.36%
               
Belo Corp.
   
413,360
   
$
3,584
 
Brocade Communications Systems, Inc. ^
   
23,850
     
155
 
Meredith Corp.
   
190,610
     
6,848
 
Total Communications
           
10,587
 
               
CONSUMER DISCRETIONARY - 14.01%
               
Auto Components - 1.38%
               
American Axle & Manufacturing Holdings, Inc. ^
   
1,101,000
     
11,847
 
ATC Technology Corp. ^
   
35,100
     
717
 
Cooper Tire & Rubber Co.
   
95,100
     
2,018
 
Fuel Systems Solutions, Inc. ^ †
   
39,600
     
1,246
 
Gentex Corp.
   
791,000
     
16,999
 
Goodyear Tire & Rubber Co. ^
   
539,900
     
7,251
 
Superior Industries International, Inc.
   
58,500
     
986
 
             
41,064
 
Hotels, Restaurants & Leisure - 1.54%
               
Ameristar Casinos, Inc.
   
290,800
     
5,476
 
Bob Evans Farms, Inc.
   
53,900
     
1,667
 
Boyd Gaming Corp. ^ †
   
68,930
     
875
 
Burger King Holdings, Inc.
   
140,400
     
2,963
 
CEC Entertainment, Inc. ^
   
33,800
     
1,320
 
CKE Restaurants, Inc.
   
241,300
     
2,978
 
Cracker Barrel Old Country Store, Inc.
   
84,611
     
4,177
 
Domino’s Pizza, Inc. ^
   
120,900
     
1,863
 
Gaylord Entertainment Co. ^ †
   
85,739
     
2,894
 
Jack in the Box, Inc. ^
   
699,740
     
16,458
 
Lakes Entertainment, Inc. ^
   
150,800
     
339
 
Orient-Express Hotels Ltd. ^
   
163,400
     
2,230
 
Ruby Tuesday, Inc. ^
   
14,744
     
165
 
Speedway Motorsports, Inc.
   
166,610
     
2,707
 
              46,112   
Household Durables - 1.87%
               
Cavco Industries, Inc. ^
   
45,589
     
1,786
 
Ethan Allen Interiors, Inc.
   
283,940
     
5,736
 
Furniture Brands International, Inc. ^
   
834,260
     
6,908
 
Helen of Troy Ltd. ^
   
70,648
     
1,908
 
M.D.C. Holdings, Inc.
   
146,910
     
5,627
 
Mohawk Industries, Inc. ^
   
18,000
     
1,147
 
National Presto Industries, Inc.
   
16,000
     
1,791
 
Ryland Group, Inc.
   
322,690
     
7,351
 
Snap-On, Inc.
   
103,640
     
4,993
 
Whirlpool Corp.
   
169,800
     
18,486
 
             
55,733
 
Internet & Catalog Retail - 0.35%
               
School Specialty, Inc. ^
   
20,850
     
489
 
Systemax, Inc.
   
125,400
     
2,913
 
Weight Watchers International, Inc.
   
259,700
     
6,900
 
             
10,302
 
Leisure Equipment & Products - 0.92%
               
Brunswick Corp.
   
516,200
     
10,789
 
Callaway Golf Co.
   
783,150
     
7,354
 
M&F Worldwide Corp. ^
   
43,400
     
1,331
 
Scholastic Corp.
   
147,000
     
3,970
 
Thor Industries, Inc.
   
113,140
     
4,040
 
             
27,484
 
Media - 0.43%
               
Interpublic Group of Cos., Inc. ^
   
681,400
     
6,072
 
inVentiv Health, Inc. ^
   
78,600
     
1,810
 
John Wiley & Sons, Inc.
   
118,500
     
5,009
 
             
12,891
 
Multiline Retail - 1.17%
               
Big Lots, Inc. ^
   
314,300
     
12,006
 
BJ’s Wholesale Club, Inc. ^
   
199,560
     
7,639
 
Dillards, Inc.
   
172,600
     
4,847
 
Saks, Inc. ^ †
   
1,079,410
     
10,524
 
             
35,016
 
Specialty Retail - 5.42%
               
Aaron Rents, Inc. †
   
275,400
     
6,216
 
Aéropostale, Inc. ^
   
188,400
     
5,471
 
American Greetings Corp.
   
71,500
     
1,756
 
Bebe Stores, Inc.
   
523,290
     
4,312
 
Buckle, Inc. †
   
104,900
     
3,795
 
Cabela’s, Inc. ^ †
   
945,300
     
17,167
 
Childrens Place Retail Stores, Inc. ^
   
96,650
     
4,428
 
Foot Locker, Inc.
   
838,290
     
12,868
 
Genesco, Inc. ^
   
47,500
     
1,581
 
Group 1 Automotive, Inc. ^
   
54,900
     
1,705
 
Gymboree Corp. ^
   
372,930
     
18,322
 
Interline Brands, Inc. ^
   
16,200
     
337
 
Jos. A. Bank Clothiers, Inc. ^
   
91,170
     
5,549
 
Men’s Wearhouse, Inc.
   
660,100
     
15,598
 
OfficeMax, Inc. ^
   
518,593
     
9,853
 
Pep Boys, Inc.
   
107,100
     
1,342
 
RadioShack Corp.
   
686,800
     
14,801
 
Regis Corp.
   
114,200
     
2,183
 
Rent-A-Center, Inc. ^
   
884,148
     
22,829
 
Sonic Automotive, Inc., A Shares ^ †
   
306,000
     
3,268
 
 
See accompanying notes
 
 
6
 
 
 
 

 

 
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Stage Stores, Inc.
   
132,220
   
$
2,016
 
Williams-Sonoma, Inc.
   
225,714
     
6,501
 
             
161,898
 
Textiles & Apparel - 0.93%
               
Deckers Outdoor Corp. ^
   
17,300
     
2,432
 
Jones Apparel Group, Inc.
   
381,600
     
8,304
 
Quiksilver, Inc. ^
   
1,230,500
     
6,558
 
Timberland Co. ^
   
184,070
     
3,957
 
True Religion Apparel, Inc. ^
   
15,700
     
491
 
Unifirst Corp.
   
33,700
     
1,647
 
Warnaco Group, Inc. ^
   
32,900
     
1,574
 
Wolverine World Wide, Inc.
   
88,960
     
2,723
 
             
27,686
 
Total Consumer Discretionary
           
418,186
 
                 
CONSUMER STAPLES - 2.47%
               
Food & Drug Retailing - 0.87%
               
Casey’s General Stores, Inc.
   
164,893
     
6,370
 
Flowers Foods, Inc.
   
172,300
     
4,542
 
Nash Finch Co.
   
18,900
     
662
 
Ruddick Corp.
   
62,500
     
2,209
 
Spartan Stores, Inc.
   
551,420
     
8,321
 
Winn-Dixie Stores, Inc. ^
   
313,510
     
3,953
 
             
26,057
 
Food Products - 1.29%
               
American Italian Pasta Co. ^
   
43,900
     
1,722
 
Cal-Maine Foods, Inc. †
   
146,000
     
4,873
 
Chiquita Brands International, Inc. ^
   
100,900
     
1,518
 
Del Monte Foods Co.
   
397,100
     
5,933
 
Fresh Del Monte Produce, Inc. ^
   
116,900
     
2,440
 
Hain Celestial Group, Inc. ^
   
181,310
     
3,586
 
Herbalife Ltd.
   
117,700
     
5,679
 
Lance, Inc.
   
85,430
     
1,980
 
Overhill Farms, Inc. ^
   
316,300
     
1,917
 
Sanderson Farms, Inc.
   
46,000
     
2,607
 
Smithfield Foods, Inc. ^
   
331,600
     
6,214
 
             
38,469
 
Personal Products - 0.00%
               
Alberto-Culver Co. ^
   
3,540
     
102
 
Tobacco - 0.31%
               
Alliance One International, Inc. ^
   
237,300
     
1,208
 
Schweitzer Mauduit International, Inc.
   
35,800
     
2,038
 
Universal Corp.
   
112,700
     
5,835
 
             
9,081
 
Total Consumer Staples
           
73,709
 
                 
ENERGY - 5.07%
               
Energy Equipment & Services - 3.26%
               
Atwood Oceanics, Inc. ^
   
144,800
     
5,272
 
Bristow Group, Inc. ^
   
66,900
     
2,590
 
Complete Production Services, Inc. ^
   
44,900
     
678
 
Dresser-Rand Group, Inc. ^
   
165,000
     
5,821
 
Dril-Quip, Inc. ^
   
108,110
     
6,263
 
Exterran Holdings, Inc. ^
   
126,100
     
3,676
 
Global Industries Ltd. ^
   
180,300
     
1,208
 
Hercules Offshore, Inc. ^
   
73,200
     
290
 
Matrix Service Co. ^
   
205,590
     
2,185
 
Oil States International, Inc. ^
   
274,000
     
13,237
 
Parker Drilling Co. ^
   
245,400
     
1,357
 
Patterson-UTI Energy, Inc.
   
117,150
     
1,791
 
Rowan Companies, Inc. ^
   
212,100
     
6,321
 
SEACOR Holdings, Inc. ^
   
65,300
     
5,496
 
Superior Energy Services, Inc. ^
   
92,500
     
2,503
 
Tesco Corp. ^
   
219,260
     
2,743
 
Tidewater, Inc.
   
492,180
     
26,386
 
Unit Corp. ^
   
174,425
     
8,332
 
Willbros Group, Inc. ^
   
90,800
     
1,139
 
             
97,288
 
Oil & Gas - 1.81%
               
Comstock Resources, Inc. ^
   
136,970
     
4,391
 
CVR Energy, Inc. ^
   
200,400
     
1,701
 
EXCO Resources, Inc.
   
533,600
     
9,898
 
Frontier Oil Corp.
   
487,610
     
7,412
 
Helix Energy Solutions Group, Inc. ^
   
218,300
     
3,183
 
Holly Corp.
   
279,650
     
7,551
 
Penn Virginia Corp.
   
231,420
     
5,904
 
St. Mary Land & Exploration Co.
   
140,210
     
5,642
 
Stone Energy Corp. ^
   
520,800
     
8,489
 
             
54,171
 
Total Energy
           
151,459
 
                 
FINANCIALS - 22.97%
               
Banks - 7.18%
               
Associated Banc-Corp
   
795,510
     
11,559
 
Astoria Financial Corp.
   
220,200
     
3,554
 
Bank of the Ozarks, Inc. †
   
253,200
     
9,741
 
Cathay General Bancorp
   
157,000
     
1,942
 
Citizens Republic Bancorp, Inc. ^
   
3,153,690
     
3,942
 
 
See accompanying notes
 
 
7
 
 
 

 
 
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
City National Corp.
   
200,793
   
$
12,505
 
Columbia Banking System, Inc. ^
   
32,360
     
727
 
Community Bank System, Inc.
   
31,000
     
765
 
CVB Financial Corp. †
   
477,583
     
5,258
 
F.N.B. Corp.
   
180,200
     
1,679
 
First Financial Bancorp
   
522,400
     
9,983
 
First Financial Holdings, Inc. ^
   
4,000
     
56
 
First Horizon National Corp. ^
   
781,851
     
11,063
 
First Interstate Bancsystem, Inc.
   
244,300
     
3,941
 
First Midwest Bancorp, Inc.
   
132,900
     
2,020
 
First Niagara Financial Group, Inc.
   
181,200
     
2,519
 
FirstMerit Corp.
   
281,922
     
6,625
 
Fulton Financial Corp.
   
397,100
     
4,170
 
Glacier Bancorp, Inc.
   
236,350
     
4,370
 
Home Federal Bancorp Inc.
   
171,000
     
2,724
 
Iberiabank Corp.
   
179,200
     
11,046
 
International Bancshares Corp.
   
136,102
     
3,290
 
MB Financial, Inc.
   
105,000
     
2,572
 
National Penn Bancshares, Inc.
   
484,927
     
3,550
 
NewAlliance Bancshares, Inc.
   
413,568
     
5,389
 
Northwest Bancshares, Inc.
   
214,100
     
2,674
 
Old National Bancorp
   
386,470
     
5,183
 
PacWest Bancorp
   
133,960
     
3,216
 
Popular, Inc. †
   
1,438,900
     
5,669
 
Provident Financial Services, Inc.
   
370,640
     
4,885
 
Southwest Bancorp, Inc.
   
152,130
     
2,230
 
Sterling Bancshares, Inc.
   
176,330
     
1,037
 
Susquehanna Bancshares, Inc.
   
123,400
     
1,345
 
SVB Financial Group ^
   
98,440
     
4,846
 
Synovus Financial Corp. †
   
6,391,300
     
19,238
 
Umpqua Holdings Corp.
   
191,000
     
2,854
 
United Community Banks, Inc. ^
   
755,000
     
4,409
 
Washington Federal, Inc.
   
498,234
     
10,249
 
Washington Trust Bancorp, Inc.
   
31,400
     
569
 
Webster Financial Corp.
   
584,600
     
12,113
 
Whitney Holding Corp.
   
297,950
     
4,082
 
Wilmington Trust Corp.
   
147,247
     
2,552
 
Wintrust Financial Corp.
   
60,200
     
2,245
 
             
214,386
 
Diversified Financials - 3.42%
               
AmeriCredit Corp. ^
   
124,400
     
2,978
 
Ares Capital Corp.
   
549,700
     
8,718
 
CapitalSource, Inc.
   
645,500
     
3,854
 
Cash America International, Inc.
   
300,538
     
11,138
 
Credit Acceptance Corp. ^
   
121,550
     
5,482
 
E*Trade Financial Corp. ^
   
3,893,400
     
6,541
 
Ezcorp, Inc. ^
   
836,974
     
17,334
 
Federated Investors, Inc. †
   
116,800
     
2,817
 
Fifth Street Finance Corp.
   
273,950
     
3,493
 
Investment Technology Group, Inc. ^
   
626,755
     
10,887
 
Knight Capital Group, Inc. ^
   
306,750
     
4,770
 
MF Global Holdings Ltd. ^
   
276,300
     
2,547
 
National Financial Partners Corp. ^
   
83,800
     
1,290
 
Nelnet, Inc.
   
188,800
     
3,768
 
Piper Jaffray Co. ^
   
128,123
     
5,043
 
Symetra Financial Corp. ^
   
549,800
     
7,422
 
Territorial Bancorp, Inc.
   
6,700
     
127
 
Walter Investment Management Corp. ‡
   
138,600
     
2,513
 
World Acceptance Corp. ^ †
   
41,100
     
1,450
 
             
102,172
 
Insurance - 9.51%
               
Allied World Assurance Co. Holdings Ltd.
   
103,100
     
4,492
 
American Equity Investment Life Holding Co.
   
214,600
     
2,258
 
American Financial Group, Inc.
   
418,465
     
12,315
 
American National Insurance Co.
   
45,700
     
5,034
 
AmTrust Financial Services, Inc.
   
244,392
     
3,331
 
Argo Group International Holdings Ltd.
   
278,900
     
9,201
 
Aspen Insurance Holdings Ltd.
   
782,730
     
21,118
 
Assured Guaranty Ltd.
   
129,930
     
2,800
 
CNA Surety Corp. ^
   
105,420
     
1,768
 
CNO Financial Group, Inc. ^
   
1,967,400
     
11,608
 
Delphi Financial Group, Inc.
   
519,600
     
14,289
 
Employers Holdings, Inc.
   
571,900
     
9,425
 
Endurance Specialty Holdings Ltd.
   
142,500
     
5,251
 
Enstar Group Ltd. ^
   
15,403
     
1,018
 
FBL Financial Group, Inc.
   
13,300
     
344
 
First American Corp.
   
371,930
     
12,858
 
Flagstone Reinsurance Holdings Ltd.
   
230,500
     
2,570
 
Hanover Insurance Group, Inc.
   
421,910
     
19,007
 
HCC Insurance Holdings, Inc.
   
250,670
     
6,816
 
Horace Mann Educators Corp.
   
98,000
     
1,687
 
Infinity Property and Casualty Corp.
   
51,798
     
2,389
 
Maiden Holdings Ltd.
   
124,300
     
931
 
Max Capital Group Ltd.
   
113,900
     
2,540
 
Mercury General Corp.
   
123,200
     
5,543
 
MGIC Investment Corp. ^ †
   
765,919
     
7,988
 
Montpelier Re Holdings Ltd.
   
125,208
     
2,078
 
National Western Life Insurance Co.
   
2,100
     
401
 
Navigators Group, Inc. ^
   
198,500
     
7,966
 
Old Republic International Corp.
   
123,400
     
1,852
 
OneBeacon Insurance Group Ltd.
   
49,000
     
795
 
Platinum Underwriters Holdings Ltd.
   
126,600
     
4,711
 
PMA Capital Corp. ^
   
231,200
     
1,588
 
Presidential Life Corp.
   
104,100
     
1,226
 
 
See accompanying notes
 
 
8
 
 
 
 

 
 
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
ProAssurance Corp. ^
   
73,100
   
$
4,455
 
Protective Life Corp.
   
340,120
     
8,187
 
Reinsurance Group of America, Inc.
   
265,900
     
13,728
 
RLI Corp.
   
42,200
     
2,448
 
Safety Insurance Group, Inc.
   
45,000
     
1,678
 
Selective Insurance Group, Inc.
   
106,500
     
1,780
 
StanCorp Financial Group, Inc.
   
425,550
     
19,133
 
Torchmark Corp.
   
185,700
     
9,942
 
Tower Group, Inc.
   
276,200
     
6,369
 
United America Indemnity Ltd. ^
   
1,255,543
     
11,928
 
Unitrin, Inc.
   
124,900
     
3,653
 
Universal American Corp. ^
   
424,400
     
6,515
 
White Mountains Insurance Group Ltd.
   
19,674
     
6,760
 
             
283,774
 
Real Estate - 2.86%
               
Alexandria Real Estate Equities, Inc. ‡
   
1,040
     
74
 
BioMed Realty Trust, Inc. ‡
   
796,880
     
14,750
 
Brandywine Realty Trust ‡
   
194,890
     
2,483
 
CapLease, Inc. ‡
   
943,100
     
5,498
 
CBL & Associates Properties, Inc. ‡
   
413,610
     
6,039
 
Corrections Corp. of America ^
   
7,340
     
152
 
DCT Industrial Trust, Inc. ^ ‡
   
252,420
     
1,328
 
DiamondRock Hospitality Co. ‡
   
396,470
     
4,357
 
Entertainment Properties Trust ‡
   
192,080
     
8,398
 
Essex Property Trust, Inc. ‡
   
52,480
     
5,553
 
Hospitality Properties Trust ‡
   
3,680
     
98
 
Kilroy Realty Corp. ‡
   
125,830
     
4,412
 
LaSalle Hotel Properties ‡
   
257,610
     
6,788
 
Lexington Realty Trust ‡
   
703,570
     
4,981
 
Mack-Cali Realty Corp. ‡
   
2,250
     
77
 
MI Developments, Inc.
   
448,600
     
5,993
 
National Health Investors, Inc. ‡
   
83,660
     
3,398
 
Omega Healthcare Investors, Inc. ‡
   
230,100
     
4,607
 
Urstadt Biddle Properties, Inc. ‡
   
72,190
     
1,217
 
U-Store-It Trust ‡
   
392,300
     
3,382
 
WP Carey & Co. LLC
   
52,470
     
1,615
 
             
85,200
 
Total Financials
           
685,532
 
                 
HEALTH CARE - 9.22%
               
Biotechnology - 0.11%
               
Cubist Pharmaceuticals, Inc. ^
   
116,400
     
2,610
 
Viropharma, Inc. ^
   
45,900
     
584
 
             
3,194
 
Health Care Equipment & Supplies - 1.12%
               
CONMED Corp. ^
   
27,800
     
618
 
Haemonetics Corp. ^
   
116,110
     
6,718
 
Hillenbrand, Inc.
   
77,500
     
1,905
 
Kensey Nash Corp. ^
   
114,140
     
2,585
 
Kinetic Concepts, Inc. ^
   
299,600
     
12,973
 
STERIS Corp.
   
257,870
     
8,582
 
             
33,381
 
Health Care Providers & Services - 6.13%
               
Air Methods Corp. ^
   
141,130
     
4,669
 
Almost Family, Inc. ^
   
80,850
     
3,425
 
Amedisys, Inc. ^ †
   
56,500
     
3,253
 
AMERIGROUP Corp. ^
   
464,780
     
16,844
 
Amsurg Corp. ^
   
45,100
     
934
 
Assisted Living Concepts, Inc. ^
   
60,130
     
2,111
 
Centene Corp. ^
   
546,300
     
12,510
 
Community Health Systems, Inc. ^
   
73,900
     
3,020
 
Coventry Health Care, Inc. ^
   
50,500
     
1,199
 
Gentiva Health Services, Inc. ^
   
522,853
     
14,995
 
Health Net, Inc. ^
   
225,400
     
4,963
 
HealthSouth Corp. ^
   
612,900
     
12,540
 
Healthspring, Inc. ^
   
115,800
     
2,038
 
Healthways, Inc. ^
   
54,100
     
881
 
Kindred Healthcare, Inc. ^
   
81,800
     
1,459
 
LHC Group, Inc. ^
   
23,892
     
815
 
LifePoint Hospitals, Inc. ^
   
664,380
     
25,366
 
Magellan Health Services, Inc. ^
   
243,500
     
10,278
 
MAXIMUS, Inc.
   
191,100
     
11,831
 
Mednax, Inc. ^
   
104,250
     
5,727
 
Molina Healthcare, Inc. ^
   
53,500
     
1,561
 
Odyssey HealthCare, Inc. ^
   
644,390
     
13,423
 
Parexel International Corp. ^
   
282,700
     
6,666
 
Psychiatric Solutions, Inc. ^
   
82,800
     
2,664
 
RehabCare Group, Inc. ^
   
294,920
     
8,411
 
Res-Care, Inc. ^
   
311,900
     
3,630
 
Sun Healthcare Group, Inc. ^
   
357,890
     
3,200
 
Triple-S Management Corp. ^
   
51,400
     
935
 
Universal Health Services, Inc.
   
101,240
     
3,758
 
             
183,106
 
Pharmaceuticals - 1.86%
               
Endo Pharmaceuticals Holdings, Inc. ^
   
818,870
     
17,933
 
King Pharmaceuticals, Inc. ^
   
926,800
     
9,083
 
Medicis Pharmaceutical Corp.
   
186,800
     
4,741
 
NBTY, Inc. ^
   
534,500
     
21,743
 
Par Pharmaceutical Cos., Inc. ^
   
78,800
     
2,139
 
             
55,639
 
Total Health Care
           
275,320
 
               
 
See accompanying notes
 
 
9
 
 

 
 

 
 
 
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
INDUSTRIALS - 15.92%
               
Aerospace & Defense - 1.99%
               
AAR Corp. ^
   
133,700
   
$
3,260
 
Aircastle Ltd.
   
180,169
     
2,164
 
BE Aerospace, Inc. ^
   
191,800
     
5,698
 
Ceradyne, Inc. ^
   
57,100
     
1,268
 
Esterline Technologies Corp. ^
   
167,600
     
9,349
 
Hawk Corp. ^
   
112,500
     
2,603
 
Hexcel Corp. ^
   
215,490
     
3,491
 
Spirit Aerosystems Holdings, Inc. ^
   
505,540
     
11,213
 
TransDigm Group, Inc.
   
15,400
     
851
 
Triumph Group, Inc.
   
205,420
     
15,932
 
World Fuel Services Corp.
   
124,300
     
3,534
 
             
59,363
 
Building Products - 1.72%
               
Apogee Enterprises, Inc.
   
206,200
     
2,833
 
Armstrong World Industries, Inc. ^
   
160,940
     
7,009
 
Crane Co.
   
385,250
     
13,846
 
Drew Industries, Inc. ^
   
125,691
     
3,224
 
Griffon Corp. ^
   
158,051
     
2,228
 
Insituform Technologies, Inc. ^
   
400,300
     
9,595
 
Simpson Manufacturing Co., Inc.
   
371,625
     
12,632
 
             
51,367
 
Commercial Services & Supplies - 6.23%
               
Administaff, Inc.
   
212,800
     
4,711
 
Atlas Air Worldwide Holdings, Inc. ^
   
36,276
     
2,005
 
Clean Harbors, Inc. ^
   
114,348
     
7,253
 
Convergys Corp. ^
   
287,900
     
3,639
 
Con-way, Inc.
   
394,300
     
15,315
 
Corinthian Colleges, Inc. ^ †
   
716,500
     
11,192
 
CSG Systems International, Inc. ^
   
112,200
     
2,549
 
Deluxe Corp.
   
136,200
     
2,856
 
Dollar Financial Corp. ^
   
48,400
     
1,133
 
DynCorp International, Inc. ^
   
646,800
     
11,125
 
Ennis, Inc.
   
96,800
     
1,790
 
FTI Consulting, Inc. ^
   
163,010
     
6,705
 
G&K Services, Inc.
   
38,620
     
1,062
 
Heidrick & Struggles International, Inc.
   
209,100
     
5,522
 
Hudson Highland Group, Inc. ^
   
630,300
     
3,536
 
Kelly Services, Inc. ^
   
152,900
     
2,459
 
Korn/Ferry International ^
   
550,860
     
8,929
 
Layne Christensen Co. ^
   
40,852
     
1,119
 
Lincoln Educational Services Corp. ^
   
34,963
     
873
 
Manpower, Inc.
   
87,100
     
4,886
 
McGrath Rentcorp
   
102,908
     
2,675
 
PHH Corp. ^
   
552,900
     
12,545
 
Steelcase, Inc., A Shares
   
520,071
     
4,270
 
Team, Inc. ^
   
154,034
     
2,680
 
United Stationers, Inc. ^
   
129,100
     
7,903
 
Valassis Communications, Inc. ^
   
1,279,200
     
41,817
 
Viad Corp.
   
135,310
     
3,166
 
Waste Connections, Inc. ^
   
190,820
     
6,829
 
Wright Express Corp. ^
   
156,900
     
5,330
 
             
185,874
 
Construction & Engineering - 1.15%
               
Comfort Systems USA, Inc.
   
694,745
     
9,782
 
EMCOR Group, Inc. ^
   
505,000
     
14,423
 
Granite Construction, Inc.
   
175,280
     
5,891
 
MasTec, Inc. ^
   
164,864
     
2,062
 
Shaw Group, Inc. ^
   
2,610
     
100
 
Sterling Construction Co., Inc. ^
   
115,340
     
2,019
 
             
34,277
 
Electrical Equipment - 0.69%
               
AZZ, Inc.
   
25,700
     
1,044
 
Hubbell, Inc.
   
160,800
     
7,472
 
Regal-Beloit Corp.
   
189,500
     
11,990
 
             
20,506
 
Electronic Equipment & Instruments - 0.54%
               
Diebold, Inc.
   
511,930
     
16,049
 
PerkinElmer, Inc.
   
4,000
     
100
 
             
16,149
 
Industrial Conglomerates - 0.08%
               
Chemed Corp. ^
   
1,370
     
76
 
US Ecology, Inc.
   
151,810
     
2,368
 
             
2,444
 
Machinery - 2.38%
               
Applied Industrial Technologies, Inc.
   
178,400
     
5,491
 
Astec Industries, Inc. ^
   
163,100
     
5,402
 
Chart Industries, Inc. ^
   
18,600
     
428
 
Colfax Corp. ^
   
86,500
     
1,129
 
John Bean Technologies Corp.
   
70,300
     
1,291
 
Middleby Corp. ^
   
26,700
     
1,632
 
Miller Industries, Inc.
   
231,100
     
3,305
 
Mueller Industries, Inc.
   
200,700
     
5,951
 
Oshkosh Corp. ^
   
286,400
     
11,061
 
Reliance Steel & Aluminum Co.
   
28,800
     
1,406
 
SPX Corp.
   
47,300
     
3,305
 
Terex Corp. ^
   
726,000
     
19,253
 
Trinity Industries, Inc.
   
158,400
     
3,942
 
Valmont Industries, Inc.
   
38,600
     
3,215
 
Watts Water Technologies, Inc.
   
120,500
     
4,275
 
             
71,086
 
               
 
See accompanying notes
 
 
10
 
 
 

 
 
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Marine - 0.80%
               
Cal Dive International, Inc. ^
   
338,070
   
$
2,218
 
Genco Shipping & Trading Ltd. ^ †
   
425,800
     
9,862
 
Gulfmark Offshore, Inc. ^
   
24,662
     
850
 
Kirby Corp. ^
   
181,300
     
7,629
 
Overseas Shipholding Group, Inc.
   
68,400
     
3,424
 
             
23,983
 
Road & Rail - 0.34%
               
Amerco, Inc. ^
   
21,235
     
1,326
 
Arkansas Best Corp.
   
36,000
     
1,097
 
GATX Corp.
   
197,700
     
6,453
 
Marten Transport Ltd. ^
   
65,650
     
1,434
 
             
10,310
 
Total Industrials
           
475,359
 
                 
INFORMATION TECHNOLOGY - 13.17%
               
Communications Equipment - 1.50%
               
Adaptec, Inc. ^
   
162,000
     
501
 
Arris Group, Inc. ^
   
585,350
     
7,194
 
Black Box Corp.
   
395,600
     
12,339
 
Harmonic, Inc. ^
   
668,910
     
4,575
 
Harte Hanks, Inc.
   
97,600
     
1,405
 
Interdigital, Inc. ^
   
455,900
     
12,615
 
Sonus Networks, Inc. ^
   
1,274,697
     
3,302
 
Tekelec, Inc. ^
   
157,160
     
2,849
 
             
44,780
 
Computers & Peripherals - 1.25%
               
Avid Technology, Inc. ^
   
296,020
     
4,322
 
Electronics for Imaging, Inc. ^
   
361,700
     
4,648
 
Hypercom Corp. ^
   
645,500
     
2,679
 
Ingram Micro, Inc. ^
   
852,400
     
15,479
 
Lexmark International, Inc. ^
   
156,900
     
5,813
 
Mercury Computer Systems, Inc. ^
   
351,300
     
4,518
 
             
37,459
 
Electronic Components - 0.57%
               
Plexus Corp. ^
   
354,700
     
13,141
 
Thomas & Betts Corp. ^
   
93,510
     
3,922
 
             
17,063
 
Electronic Equipment & Instruments - 2.43%
               
Analogic Corp.
   
79,680
     
3,810
 
Arrow Electronics, Inc. ^
   
246,700
     
7,524
 
AVX Corp.
   
286,600
     
4,428
 
Benchmark Electronics, Inc. ^
   
432,700
     
9,364
 
Coherent, Inc. ^
   
9,700
     
365
 
Littelfuse, Inc. ^
   
416,600
     
17,593
 
Methode Electronics, Inc.
   
754,800
     
8,378
 
Multi-Fineline Electronix, Inc. ^
   
47,350
     
1,227
 
Vishay Intertechnology, Inc. ^
   
1,921,100
     
19,999
 
             
72,688
 
Internet Software & Services - 1.04%
               
DealerTrack Holdings, Inc. ^
   
289,539
     
4,416
 
EarthLink, Inc.
   
502,100
     
4,529
 
Ebix, Inc. ^ †
   
57,000
     
927
 
InterActiveCorp ^
   
467,800
     
10,488
 
SonicWALL, Inc. ^
   
280,740
     
2,844
 
United Online, Inc.
   
239,180
     
1,906
 
Websense, Inc. ^
   
254,860
     
5,803
 
             
30,913
 
It Consulting & Services - 1.95%
               
Broadridge Financial Solutions, Inc.
   
238,427
     
5,677
 
CACI International, Inc. ^
   
222,800
     
10,567
 
ManTech International Corp. ^
   
219,100
     
9,866
 
Ness Technologies, Inc. ^
   
458,500
     
2,966
 
Stanley, Inc. ^
   
32,660
     
1,033
 
SYNNEX Corp. ^
   
431,200
     
11,824
 
Syntel, Inc.
   
70,707
     
2,554
 
Tech Data Corp. ^
   
262,100
     
11,244
 
Unisys Corp. ^
   
85,000
     
2,382
 
             
58,113
 
Semiconductor Equipment & Products - 1.66%
               
Amkor Technology, Inc. ^ †
   
366,400
     
2,763
 
Brooks Automation, Inc. ^
   
1,244,200
     
12,094
 
Cymer, Inc. ^
   
145,820
     
4,980
 
Entropic Communications, Inc. ^
   
391,520
     
2,067
 
Fairchild Semiconductor International, Inc. ^
   
159,400
     
1,788
 
Formfactor, Inc. ^
   
237,360
     
3,563
 
International Rectifier Corp. ^
   
53,000
     
1,220
 
MKS Instruments, Inc. ^
   
303,339
     
6,880
 
Novellus Systems, Inc. ^
   
4,550
     
119
 
ON Semiconductor Corp. ^
   
431,900
     
3,429
 
Teradyne, Inc. ^
   
453,990
     
5,552
 
Tessera Technologies, Inc. ^
   
245,000
     
4,969
 
Varian Semiconductor Equipment Associates, Inc. ^
   
3,340
     
110
 
             
49,534
 
Software - 2.77%
               
Aspen Technology, Inc. ^
   
306,460
     
3,607
 
Cadence Design Systems, Inc. ^
   
689,100
     
5,141
 
Cognex Corp.
   
569,900
     
11,917
 
DST Systems, Inc.
   
76,600
     
3,252
 
Fair Isaac Corp.
   
75,000
     
1,580
 
FARO Technologies, Inc. ^
   
167,500
     
4,223
 
 
See accompanying notes
 
 
11
 
 
 
 
 

 
 
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
infoGROUP, Inc. ^
   
1,148,700
   
$
9,201
 
JDA Software Group, Inc. ^
   
566,150
     
16,362
 
Lawson Software, Inc. ^
   
927,500
     
7,197
 
Mentor Graphics Corp. ^
   
1,184,700
     
10,650
 
Netscout Systems, Inc. ^
   
216,810
     
3,148
 
Novell, Inc. ^
   
591,700
     
3,319
 
Synopsys, Inc. ^
   
5,480
     
124
 
TradeStation Group, Inc. ^
   
351,640
     
2,940
 
             
82,661
 
Total Information Technology
           
393,211
 
                 
MATERIALS - 5.65%
               
Chemicals - 1.66%
               
H.B. Fuller Co.
   
110,000
     
2,579
 
Innophos Holdings, Inc.
   
42,700
     
1,217
 
NewMarket Corp.
   
33,800
     
3,718
 
OM Group, Inc. ^
   
71,900
     
2,714
 
PolyOne Corp. ^
   
1,618,100
     
18,301
 
RPM International, Inc.
   
697,200
     
15,394
 
Stepan Co.
   
18,400
     
1,394
 
Westlake Chemical Corp. †
   
151,019
     
4,241
 
             
49,558
 
Construction Materials - 0.38%
               
Tutor Perini Corp. ^
   
459,200
     
11,145
 
                 
Containers & Packaging - 1.24%
               
Greif, Inc.
   
153,600
     
9,090
 
Jarden Corp.
   
212,600
     
6,829
 
Packaging Corp. of America
   
199,680
     
4,938
 
Pactiv Corp. ^
   
179,200
     
4,553
 
Rock-Tenn Co.
   
78,500
     
4,050
 
Temple-Inland, Inc.
   
324,640
     
7,571
 
             
37,031
 
Metals & Mining - 1.85%
               
Carpenter Technology Corp.
   
153,530
     
6,029
 
Century Aluminum Co. ^
   
172,500
     
2,325
 
Coeur d’Alene Mines Corp. ^
   
428,870
     
7,685
 
Compass Minerals International, Inc.
   
47,900
     
3,607
 
Gibraltar Industries, Inc. ^
   
433,339
     
6,509
 
Haynes International, Inc.
   
175,400
     
6,299
 
Kaiser Aluminum Corp. †
   
356,200
     
14,316
 
RTI International Metals, Inc. ^
   
258,075
     
6,981
 
Universal Stainless & Alloy ^
   
66,900
     
1,561
 
             
55,312
 
Paper & Forest Products - 0.52%
               
Clearwater Paper Corp. ^
   
20,200
     
1,287
 
Domtar Corp. ^
   
49,180
     
3,484
 
Louisiana-Pacific Corp. ^
   
761,250
     
8,952
 
Wausau Paper Corp. ^
   
213,140
     
1,886
 
             
15,609
 
Total Materials
           
168,655
 
               
TELECOMMUNICATION SERVICES - 0.33%
               
Diversified Telecommunication Services - 0.33%
               
Aviat Networks, Inc. ^
   
286,910
     
1,865
 
Cincinnati Bell, Inc. ^
   
551,500
     
1,859
 
EchoStar Corp. ^
   
88,100
     
1,692
 
Loral Space & Communications, Inc. ^
   
11,100
     
478
 
Neutral Tandem, Inc. ^
   
228,450
     
3,872
 
Total Telecommunication Services
           
9,766
 
                 
UTILITIES - 5.11%
               
Electric Utilities - 3.69%
               
Avista Corp.
   
135,200
     
2,924
 
Black Hills Corp.
   
115,000
     
3,782
 
El Paso Electric Co. ^
   
340,810
     
7,242
 
Empire District Electric Co.
   
396,250
     
7,731
 
Great Plains Energy, Inc.
   
951,300
     
18,389
 
IDACORP, Inc.
   
169,700
     
6,123
 
OGE Energy Corp.
   
362,800
     
15,013
 
Pike Electric Corp. ^
   
271,070
     
2,914
 
Pinnacle West Capital Corp.
   
185,110
     
6,912
 
PNM Resources, Inc.
   
474,900
     
6,454
 
Portland General Electric Co.
   
883,330
     
17,561
 
Westar Energy, Inc.
   
635,600
     
15,057
 
             
110,102
 
Gas Utilities - 0.98%
               
AGL Resources, Inc.
   
146,540
     
5,790
 
Atmos Energy Corp.
   
544,640
     
16,111
 
Energen Corp.
   
2,300
     
112
 
Southern Union Co.
   
190,600
     
4,980
 
Southwest Gas Corp.
   
67,100
     
2,087
 
UGI Corp. ^
   
3,690
     
101
 
             
29,181
 
Multi-Utilities - 0.44%
               
NV Energy, Inc.
   
1,065,698
     
13,310
 
Total Utilities
           
152,593
 
Total Common Stocks
           
2,814,377
 
               
SHORT TERM INVESTMENTS - 6.10%
               
American Beacon U.S. Government Money Market Select Fund #
   
20,000,000
     
20,000
 
 
See accompanying notes
 
 
12
 
 
 
 

 

 
American Beacon Small Cap Value FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
JPMorgan U.S. Government Money Market Fund
   
146,360,643
   
$
146,361
 
 
 
                 
   
Par
         
   
Amount
         
U.S. Treasury,
               
0.14%, Due 6/17/2010 §
 
$
4,468
     
4,467
 
0.14%, Due 7/15/2010 §
   
11,384
     
11,381
 
Total Short Term Investments
           
182,209
 
 
 
                 
   
Shares
         
SECURITIES LENDING COLLATERAL - 3.72%
               
American Beacon U.S. Government Money Market Select Fund
   
96,344,976
     
96,345
 
Wells Fargo Advantage Government Money Market Fund
   
14,625,920
     
14,625
 
Total Securities Lending Collateral
           
110,970
 
TOTAL INVESTMENTS 104.10% - (Cost $2,592,966)
           
3,107,556
 
LIABILITIES, NET OF OTHER ASSETS - (4.10%)
           
(122,442
)
TOTAL NET ASSETS - 100.00%
         
$
2,985,114
 
 
 
     
   
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, 2010.
     
 
REIT — Real Estate Investment Trust
     
#
 
The Fund is affiliated by having the same investment advisor.
     
§
 
At April 30, 2010, 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
 
2,458
   
Jun 2010
 
$
175,870
   
$
5,767
 
                             
 
See accompanying notes
 
 
13
 
 
 
 

 

 
American Beacon Small Cap Value FundSM
Statement of Assets and Liabilities
April 30, 2010 (Unaudited) (in thousands except share and per share amounts)
 
         
         
Assets:
       
Investments in unaffiliated securities, at value A C
 
$
2,991,211
 
Investments in affiliated securities, at value B
   
116,345
 
Receivable for investments sold
   
42,557
 
Dividends and interest receivable
   
701
 
Receivable for fund shares sold
   
6,925
 
Receivable for tax reclaims
   
2
 
Prepaid expenses
   
77
 
Total assets
   
3,157,818
 
       
Liabilities:
       
Payable for investments purchased
   
48,060
 
Payable upon return of securities loaned
   
110,970
 
Payable for fund shares redeemed
   
2,118
 
Payable for variation margin on open futures contracts
   
6,561
 
Management and investment advisory fees payable (Note 2)
   
3,663
 
Administrative service and service fees payable
   
838
 
Professional fees payable
   
14
 
Other liabilities
   
480
 
Total liabilities
   
172,704
 
Net assets
 
$
2,985,114
 
         
Analysis of Net Assets:
       
Paid-in-capital
   
2,968,957
 
Undistributed net investment income
   
3,210
 
Accumulated net realized loss
   
(507,409
)
Unrealized appreciation of investments, futures contracts, and foreign currency
   
520,356
 
Net assets
 
$
2,985,114
 
       
Shares outstanding (no par value):
       
Institutional Class
   
82,635,863
 
Y Class
   
46,641
 
Investor Class
   
49,941,726
 
Advisor Class
   
2,032,465
 
Retirement Class
   
507
 
AMR Class
   
29,017,431
 
       
Net asset value, offering and redemption price per share:
       
Institutional Class
 
$
18.39
 
Y Class
 
$
18.32
 
Investor Class
 
$
17.97
 
Advisor Class
 
$
17.92
 
Retirement Class
 
$
17.83
 
AMR Class
 
$
18.28
 
 
A Cost of investments in unaffiliated securities
 
$
2,476,621
 
B Cost of investments in affiliated securities
 
$
116,345
 
C Market value of securities on loan
 
$
108,071
 
 
See accompanying notes
 
 
14
 
 
 
 

 

American Beacon Small Cap Value FundSM
Statement of Operations
Six Months ended April 30, 2010 (Unaudited) (in thousands)
 
         
         
Investment Income:
       
Dividend income from unaffiliated securities (net of foreign taxes)*
 
$
16,031
 
Dividend income from affiliated securities
   
7
 
Interest income
   
4
 
Income derived from securities lending, net
   
195
 
Total investment income
   
16,237
 
Expenses:
       
Management and investment advisory fees (Note 2)
   
5,701
 
Administrative service fees (Note 2):
       
Institutional Class
   
1,862
 
Investor Class
   
1,178
 
Advisor Class
   
46
 
AMR Class
   
85
 
Transfer agent fees:
       
Institutional Class
   
34
 
Investor Class
   
26
 
Advisor Class
   
1
 
AMR Class
   
14
 
Custody and fund accounting fees
   
181
 
Professional fees
   
46
 
Registration fees and expenses
   
45
 
Service fees:
       
Investor Class (Note 2)
   
1,388
 
Advisor Class (Note 2)
   
38
 
Distribution fees — Service Class (Note 2)
   
38
 
Prospectus and shareholder reports
   
183
 
Trustee fees
   
75
 
Other expenses
   
78
 
Total expenses
   
11,019
 
Net investment income
   
5,218
 
       
         
Realized and unrealized gain (loss) on investments:
       
Net realized gain (loss) from:
       
Investments
   
102,553
 
Commission recapture (Note 1)
   
79
 
Futures contracts
   
24,617
 
Change in net unrealized appreciation or depreciation of:
       
Investments
   
458,080
 
Futures contracts
   
11,735
 
Net gain on investments
   
597,064
 
Net increase in net assets resulting from operations
 
$
602,282
 
         
* Foreign taxes
 
$
10
 
 
See accompanying notes
 
 
15
 
 
 
 

 

 
American Beacon Small Cap Value FundSM
Statement of Changes in Net Assets (in thousands)

 
                 
   
Six Months
   
Year Ended
 
   
Ended
   
October 31,
 
   
April 30, 2010
   
2009
 
   
(unaudited)
         
Increase (Decrease) in Net Assets:
               
Operations:
               
Net investment income
 
$
5,218
   
$
13,566
 
Net realized gain (loss) on investments, futures contracts, and foreign currency transactions
   
127,249
     
(354,995
)
Change in net unrealized appreciation of investments, futures contracts, and foreign currency translations
   
469,815
     
625,488
 
Net increase in net assets resulting from operations
   
602,282
     
284,059
 
             
Distributions to Shareholders:
               
Net investment income:
               
Institutional Class
   
(6,896
)
   
(13,600
)
Investor Class
   
(2,275
)
   
(8,841
)
Advisor Class
   
     
(311
)
AMR Class
   
(2,187
)
   
(3,927
)
Net distributions to shareholders
   
(11,358
)
   
(26,679
)
             
Capital Share Transactions:
               
Proceeds from sales of shares
   
600,588
     
529,412
 
Reinvestment of dividends and distributions
   
11,249
     
26,349
 
Cost of shares redeemed
   
(277,092
)
   
(523,004
)
Net increase in net assets from capital share transactions
   
334,745
     
32,757
 
Net increase in net assets
   
925,669
     
290,137
 
             
Net Assets:
               
Beginning of period
   
2,059,445
     
1,769,308
 
End of Period *
 
$
2,985,114
   
$
2,059,445
 
* Includes undistributed net investment income of
 
$
3,210
   
$
9,850
 
 
See accompanying notes
 
 
16
 
 
 
 

 

 
 
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (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
 
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 $250,000
Y Class
 
Investors making an initial investment of $100,000
Investor Class
 
General public and investors investing through an intermediary
Advisor Class
 
Investors investing through an intermediary
Retirement Class
 
Investors investing through an intermediary
AMR Class
 
Investors in the tax-exempt retirement and benefit plans of the Manager, 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.
 
Seurity 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”).
 
 
17
 
 
 
 

 

 
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
Valuation Inputs
 
Various inputs may be used to determine the value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
 
     
Level 1 —
 
Quoted prices in active markets for identical securities.
 
 
     
Level 2 —
 
Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.

 
     
Level 3 —
 
Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.
 
The Fund’s investments are summarized by level based on the inputs used to determine their values. As of April 30, 2010, the Fund’s investments were classified as follows: (in thousands)
 
                                 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stock
 
$
2,814,377
   
$
   
$
   
$
2,814,377
 
Securities Lending Collateral
   
110,970
     
     
     
110,970
 
Short Term Investments
   
166,361
     
15,848
     
     
182,209
 
Total Investments in Securities
 
$
3,091,708
   
$
15,848
   
$
   
$
3,107,556
 
                                 
Futures Contracts
 
$
175,870
     
     
   
$
175,870
 
 
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 FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
Values of Derivative Instruments not accounted for as hedging instruments as of April 30, 2010 (in thousands)
 
             
   
Liability
   
Statement of Assets and Liabilities
 
Derivatives
 
Fair Value
Unrealized appreciation of investments, futures contracts, and foreign currency
 
Equity Contracts*
 
$
5,767
 
 
Effect of derivative instruments not accounted for as hedging instruments during the year ended April 30, 2010 (in thousands)
 
             
Statement of Operations
 
Derivative
 
Fair Value
Net realized gain (loss) from futures contracts
 
Equity Contracts
 
$
24,617
 
Change in net unrealized appreciation or depreciation of futures contracts
 
Equity Contracts
 
$
11,735
 
 
 
     
*
 
Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
 
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.
 
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.
 
 
19
 
 
 

 
 

 
 
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (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 investment advisory and portfolio 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, 2010 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%
 
$5,701
 
$5,101
 
$600
 
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, 2010, securities lending fees paid to the Manager by the Fund were $35,297.
 
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, Y, Investor, Advisor, and Retirement 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 and Retirement Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no 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 and Retirement Classes 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 and 0.50% of the average daily net assets of the Retirement 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 Y, Investor, Advisor, and Retirement Classes. As compensation for performing the
 
 
20
 
 
 
 

 

 
American Beacon Small Cap Value FundSM
Notes to Financial Statements
 
 
April 30, 2010 (Unaudited)
 
duties required under the Service Plans, the Manager receives 0.10% of the average daily net assets of the Y Class, 0.25% of the average daily net assets of the Advisor, and Retirement Classes, and up to 0.375% of the average daily net assets of the Investor 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 $3,546 for the six months ended April 30, 2010.
 
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, 2010, the Manager earned fees from the Select Funds totaling $9,562 on the Fund’s direct investment in the Select Funds and $32,218 from the Fund’s sec urities 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, 2010, 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, 2010, 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 does not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2009 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.
 
 
21
 
 

 
 

 
 
 
 
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
The tax character of distributions paid during the six months ended April 30, 2010 and the fiscal year ended October 31, 2009 were as follows (in thousands):
 
                 
   
Six Months Ended
   
Year Ended
 
   
April 30,
   
October 31,
 
   
2010
   
2009
 
   
(unaudited)
         
Distributions paid from:
               
Ordinary income*
               
Institutional Class
 
$
6,896
   
$
13,600
 
Investor Class
   
2,275
     
8,841
 
Advisor Class
   
     
311
 
AMR Class
   
2,187
     
3,927
 
Long-term capital gain
               
Institutional Class
   
     
 
Investor Class
   
     
 
Advisor Class
   
     
 
AMR Class
   
     
 
Total distributions paid
 
$
11,358
   
$
26,679
 
 

 
     
*
 
For tax purposes, short-term capital gains are considered ordinary income distributions.
 
As of April 30, 2010, the components of distributable earnings on a tax basis were as follows (in thousands):
 
         
Cost basis of investments for federal income tax purposes
 
$
2,639,839
 
         
Unrealized appreciation
   
542,834
 
Unrealized depreciation
   
(75,117
)
         
Net unrealized appreciation/(depreciation)
   
467,717
 
         
Undistributed ordinary income
   
1,184
 
Undistributed long-term gain/(loss)
   
(458,511
)
Undistributed long-term gain/(loss)
   
5,767
 
         
Distributable earnings
 
$
16,157
 
 
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, 2010 (in thousands):
 
         
Paid-in-capital
 
$
3
 
Undistributed net investment income
   
(500
)
Accumulated net realized gain (loss)
   
498
 
Unrealized appreciation (depreciation) of investments, futures contracts and foreign currency
   
(1
)
 
At April 30, 2010, the capital loss carry forward position of the Fund for federal income tax purposes was $129,137 and $323,607 expiring in 2016 and 2017, respectively.
 
 
The Fund utilized $130,831 of net capital loss carryovers for the six months ended April 30, 2010.
 
 
22
 
 
 
 

 

 
 
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
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, 2010 were (in thousands) $966,580 and $670,011, respectively.
 
A summary of the Fund’s direct transactions in the Select Funds for the six months ended April 30, 2010 is set forth below (in thousands):
 
                                 
   
October 31, 2009
                 
April 30, 2010
 
Affiliate
 
Shares/Market Value
 
 
Purchases
 
 
Sales
 
Shares/Market Value
USG Select Fund
 
$
20,000
   
$
5,000
   
$
5,000
   
$
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.
 
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, 2010, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):
 
         
Market Value of
       
Securities on Loan
 
Non-Cash Collateral
 
Cash Collateral Posted by Borrower
$108,071
 
$—
 
$110,970
 
23
 
 
 
 

 
 
American Beacon Small Cap Value FundSM
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
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.
 
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, 2010
 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
16,258
   
$
272,783
     
47
   
$
889
     
6,570
   
$
109,031
 
Reinvestment of dividends
   
430
     
6,838
     
     
     
143
     
2,224
 
Shares redeemed
   
(6,386
)
   
(103,761
)
   
     
(8
)
   
(7,980
)
   
(127,874
)
Net increase (decrease) in shares outstanding
   
10,302
   
$
175,860
     
47
   
$
881
     
(1,267
)
 
$
(16,619
)
 

 
                                                 
   
Advisor Class
   
Retirement Class
   
AMR Class
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
624
   
$
10,718
     
   
$
8
     
12,247
   
$
207,159
 
Reinvestment of dividends
   
     
     
     
     
139
     
2,187
 
Shares redeemed
   
(620
)
   
(10,275
)
   
     
     
(2,301
)
   
(35,174
)
Net increase (decrease) in shares outstanding
   
4
   
$
443
     
   
$
8
     
10,085
   
$
174,172
 
 
Year Ended October 31, 2009
 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
26,973
   
$
326,038
     
   
$
1
     
11,685
   
$
134,422
 
Reinvestment of dividends
   
1,227
     
13,407
     
     
     
813
     
8,704
 
Shares redeemed
   
(21,813
)
   
(257,527
)
   
     
     
(18,535
)
   
(216,176
)
Net increase (decrease) in shares outstanding
   
6,387
   
$
81,918
     
   
$
1
     
(6,037
)
 
$
(73,050
)
 

 
                                                 
   
Advisor Class
   
Retirement Class
   
AMR Class
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
752
   
$
8,517
     
   
$
1
     
4,659
   
$
60,433
 
Reinvestment of dividends
   
29
     
311
     
     
     
361
     
3,927
 
Shares redeemed
   
(1,513
)
   
(17,313
)
   
     
     
(2,907
)
   
(31,988
)
Net increase (decrease) in shares outstanding
   
(732
)
 
$
(8,485
)
   
   
$
1
     
2,113
   
$
32,372
 
 
7. Subsequent Events
 
 
Management has evaluated the possibility of subsequent events existing in the Fund’s financial statements. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements.
 
 
24
 
 
 

 
 

 
 
25
 
 
 
 

 

 
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
 
                                                                 
   
Institutional Class
   
Y Class
 
                                                 
Six
   
 
 
   
Six Months
                                           
Months
   
August
 
   
Ended April
   
 
Year Ended October 31,
   
Ended
April 30,
   
3 to
October
 
   
30, 2010
   
2009
   
2008
   
2007
   
2006
   
2005A
   
2010
   
31, 2009
 
   
(unaudited)
                                           
(unaudited)
         
Net asset value, beginning of period
 
$
14.39
   
$
12.53
   
$
22.10
   
$
22.53
   
$
20.43
   
$
18.85
   
$
14.37
   
$
14.03
 
Income from investment operations:
                                                               
                                                                 
Net investment income
   
0.04
     
0.10
     
0.25
     
0.22
     
0.19
     
0.11
     
0.11
     
0.00
 
Net gains (losses) on securities (both realized and unrealized)
   
4.05
     
1.96
     
(7.13
)
   
1.10
     
2.94
     
2.31
     
3.95
     
0.34
 
Total income (loss) from investment operations
   
4.09
     
2.06
     
(6.88
)
   
1.32
     
3.13
     
2.42
     
4.06
     
0.34
 
Less distributions:
                                                               
Dividends from net investment income
   
(0.09
)
   
(0.20
)
   
(0.22
)
   
(0.19
)
   
(0.14
)
   
(0.07
)
   
(0.11
)
   
 
Distributions from net realized gains on securities
   
     
     
(2.47
)
   
(1.56
)
   
(0.89
)
   
(0.77
)
   
     
 
Total distributions
   
(0.09
)
   
(0.20
)
   
(2.69
)
   
(1.75
)
   
(1.03
)
   
(0.84
)
   
(0.11
)
   
 
Net asset value, end of period
 
$
18.39
   
$
14.39
   
$
12.53
   
$
22.10
   
$
22.53
   
$
20.43
   
$
18.32
   
$
14.37
 
Total return B
   
28.55
%C
   
16.97
%
   
(34.84
)%
   
6.10
%
   
15.80
%
   
12.90
%
   
28.36
%C
   
2.42
%C
Ratios and supplemental data:
                                                               
Net assets, end of period (in thousands)
 
$
1,519,719
   
$
1,040,805
   
$
826,232
   
$
1,413,734
   
$
1,319,024
   
$
1,076,909
   
$
855
   
$
1
 
Ratios to average net assets (annualized):
                                                               
Expenses, net of waivers
   
0.83
%
   
0.84
%
   
0.81
%
   
0.80
%
   
0.82
%
   
0.87
%
   
1.09
%
   
1.11
%D
Expenses before waivers
   
0.83
%
   
0.84
%
   
0.81
%
   
0.80
%
   
0.82
%
   
0.87
%
   
1.09
%
   
1.11
%D
Net investment income (loss), net of waivers
   
0.52
%
   
0.87
%
   
1.36
%
   
0.94
%
   
0.83
%
   
0.66
%
   
(0.19
)%
   
0.03
%D
Net investment income (loss), before waivers
   
0.52
%
   
0.87
%
   
1.36
%
   
0.94
%
   
0.83
%
   
0.66
%
   
(0.19
)%
   
0.03
%D
Portfolio turnover rate
   
30
%C
   
61
%
   
62
%
   
52
%
   
48
%
   
47
%
   
30
%C
   
61
%E
 

 
     
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
 
May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net assets for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.
     
C
 
Not annualized.
     
D
 
Annualized.
     
E
 
Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.
 
26
 
 
 
 

 

 
                                                                                                 
Investor Class
   
Advisor Class
     
Six
                                           
Six
           
Months
                                           
Months
           
Ended
                                           
Ended
           
April 30,
   
Year Ended October 31,
   
April 30,
   
Year Ended October 31,
     
2010
   
2009
   
2008
   
2007
   
2006
   
2005A
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005A
     
(unaudited)
                                           
(unaudited)
                                             
$
14.05
   
$
12.22
   
$
21.62
   
$
22.08
   
$
20.04
   
$
18.54
   
$
13.97
   
$
12.13
   
$
21.46
   
$
21.94
   
$
19.94
   
$
18.49
     
                                                                         
                                                                                                 
 
0.02
     
0.08
     
0.20
     
0.16
     
0.13
     
0.09
     
0.00
     
0.06
     
0.16
     
0.10
     
0.07
     
0.04
     
                                                                                                 
                                                                                                 
 
3.95
     
1.91
     
(6.97
)
   
1.07
     
2.89
     
2.24
     
3.95
     
1.90
     
(6.93
)
   
1.07
     
2.88
     
2.23
     
                                                                         
 
 
3.97
     
1.99
     
(6.77
)
   
1.23
     
3.02
     
2.33
     
3.95
     
1.96
     
(6.77
)
   
1.17
     
2.95
     
2.27
     
                                                                         
                                                                                                 
 
 
(0.05
)
   
(0.16
)
   
(0.16
)
   
(0.13
)
   
(0.09
)
   
(0.06
)
   
     
(0.12
)
   
(0.09
)
   
(0.09
)
   
(0.06
)
   
(0.05
)
   
                                                                                                 
                                                                                                 
 
     
     
(2.47
)
   
(1.56
)
   
(0.89
)
   
(0.77
)
   
     
     
(2.47
)
   
(1.56
)
   
(0.89
)
   
(0.77
)
   
                                                                         
 
(0.05
)
   
(0.16
)
   
(2.63
)
   
(1.69
)
   
(0.98
)
   
(0.83
)
   
     
(0.12
)
   
(2.56
)
   
(1.65
)
   
(0.95
)
   
(0.82
)
   
                                                                         
$
17.97
   
$
14.05
   
$
12.22
   
$
21.62
   
$
22.08
   
$
20.04
   
$
17.92
   
$
13.97
   
$
12.13
   
$
21.46
   
$
21.94
   
$
19.94
     
                                                                         
 
28.28
%c
   
16.59
%
   
(35.04
)%
   
5.83
%
   
15.56
%
   
12.63
%
   
28.27
%c
   
16.41
%
   
(35.19
)%
   
5.55
%
   
15.23
%
   
12.32
%
   
                                                                         
                                                                                                 
 
$
897,551
   
$
719,239
   
$
699,670
   
$
1,316,188
   
$
1,333,814
   
$
1,320,853
   
$
36,412
   
$
28,333
   
$
33,479
   
$
69,112
   
$
70,602
   
$
44,709
     
                                                                                                 
                                                                                                 
                                                                                                 
 
1.18
%
   
1.15
%
   
1.06
%
   
1.05
%
   
1.06
%
   
1.10
%
   
1.33
%
   
1.31
%
   
1.31
%
   
1.32
%
   
1.34
%
   
1.40
%
   
 
1.18
%
   
1.15
%
   
1.06
%
   
1.05
%
   
1.06
%
   
1.10
%
   
1.33
%
   
1.34
%
   
1.31
%
   
1.32
%
   
1.34
%
   
1.40
%
   
 
 
0.18
%
   
0.59
%
   
1.12
%
   
0.70
%
   
0.59
%
   
0.42
%
   
0.03
%
   
0.48
%
   
0.86
%
   
0.43
%
   
0.31
%
   
0.12
%
   
                                                                                                 
                                                                                                 
 
0.18
%
   
0.59
%
   
1.12
%
   
0.70
%
   
0.59
%
   
0.42
%
   
0.03
%
   
0.44
%
   
0.86
%
   
0.43
%
   
0.31
%
   
0.12
%
   
 
30
%c
   
61
%
   
62
%
   
52
%
   
48
%
   
47
%
   
30
%c
   
61
%
   
62
%
   
52
%
   
48
%
   
47
%
   
 
27
 
 
 
 

 

 
American Beacon Small Cap Value FundSM
Financial Highlights
(For a share outstanding throughout the period)
 
                                                                 
   
Retirement Class
   
AMR Class
 
   
Six
           
Six
       
   
Months
           
Months
       
   
Ended
   
May 1 to
   
Ended
       
   
April 30,
   
October
   
April 30,
   
Year Ended October 31,
 
   
2010
   
31, 2009
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005A
 
   
(unaudited)
           
(unaudited)
                                         
Net asset value, beginning of period
 
$
13.95
   
$
11.58
   
$
14.32
   
$
12.48
   
$
22.05
   
$
22.48
   
$
20.38
   
$
18.78
 
Income from investment operations:
                                                               
Net investment income (loss)
   
0.04
     
(0.02
)
   
0.05
F
   
0.11
     
0.33
     
0.30
     
0.27
     
0.21
 
Net gains (losses) on securities (both realized and unrealized)
   
3.88
     
2.39
     
4.03
     
1.97
     
(7.15
)
   
1.08
     
2.91
     
2.26
 
Total income (loss) from investment operations
   
3.92
     
2.37
     
4.08
     
2.08
     
(6.82
)
   
1.38
     
3.18
     
2.47
 
Less distributions:
                                                               
Dividends from net investment income
   
(0.04
)
   
     
(0.12
)
   
(0.24
)
   
(0.28
)
   
(0.25
)
   
(0.19
)
   
(0.10
)
Distributions from net realized gains on securities
   
     
     
     
     
(2.47
)
   
(1.56
)
   
(0.89
)
   
(0.77
)
Total distributions
   
(0.04
)
   
     
(0.12
)
   
(0.24
)
   
(2.75
)
   
(1.81
)
   
(1.08
)
   
(0.87
)
Net asset value, end of period
 
$
17.83
   
$
13.95
   
$
18.28
   
$
14.32
   
$
12.48
   
$
22.05
   
$
22.48
   
$
20.38
 
Total returnB
   
28.13
%c
   
20.47
%c
   
28.66
%c
   
17.30
%
   
(34.71
)%
   
6.39
%
   
16.12
%
   
13.23
%
Ratios and supplemental data:
                                                               
Net assets, end of period (in thousands)
 
$
9
   
$
1
   
$
530,568
   
$
271,066
   
$
209,927
   
$
411,406
   
$
412,857
   
$
424,965
 
Ratios to average net assets (annualized):
                                                               
Expenses, net of waivers
   
1.50
%
   
1.53
%D
   
0.58
%
   
0.59
%
   
0.56
%
   
0.54
%
   
0.55
%
   
0.58
%
Expenses before waivers
   
1.50
%
   
1.53
%D
   
0.58
%
   
0.59
%
   
0.56
%
   
0.54
%
   
0.55
%
   
0.58
%
Net investment income (loss), net of waivers
   
(0.18
)%
   
(0.28
)%D
   
0.72
%
   
1.11
%
   
1.62
%
   
1.21
%
   
1.10
%
   
0.94
%
Net investment income (loss), before waivers
   
(0.18
)%
   
(0.28
)%D
   
0.72
%
   
1.11
%
   
1.62
%
   
1.21
%
   
1.10
%
   
0.94
%
Portfolio turnover rate
   
30
%c
   
61
%E
   
30
%c
   
61
%
   
62
%
   
52
%
   
48
%
   
47
%
 

 
     
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
 
May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net assets for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.
     
C
 
Not annualized.
     
D
 
Annualized.
     
E
 
Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.
     
F
 
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.
 
28
 
 
 
 

 

 
 
 
 
 
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29
 
 

 
 

 
 
 
 
 
 
 
 
Delivery of Documents
 
To reduce expenses, your financial institution may mail only one copy of the Prospectus, Annual Report and Semi-Annual Report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your financial institution. Delivery of individual copies will commence thirty days after receiving your request.
 
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
 
 
To obtain more information about the Fund:
 
     
     
By E-mail:
 
On the Internet:
american_beacon.funds@ambeacon.com
 
Visit our website at www.americanbeaconfunds.com
     
 
By Telephone:
 
By Mail:
Institutional Class
 
American Beacon Funds
Call (800) 658-5811
 
P.O. Box 219643
AMR ClassSM
 
Kansas City, MO 64121-9643
Call (800) 345-2345
   
Investor Class® and Advisor Class
   
Call (800) 388-3344
   
 

 
     
     
Availability of Quarterly Portfolio Schedules
 
Availability of Proxy Voting Policy and Records
     
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference 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.
 
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 Trust
Boston, Massachusetts
 
Boston Financial Data
Services
 
Public Accounting
Firm
 
Foreside Fund Services, LLC
Portland, Maine
   
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 and American Beacon Small Cap Value Fund are service marks of American Beacon Advisors, Inc.
 
 
SAR 04/10
 
 
00074816
 
 
 
 

 
 
 
 
 
 

 

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
   
2-9
 
         
Schedule of investments:
       
         
Emerging Markets
   
10
 
International Equity
   
16
 
         
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, 2010
 

 
 
 

 
 
 
 
Fellow Shareholders,
 
 
Over the past six months, one universal theme seems to have emerged: while sudden and significant volatility may characterize the new economic world order, it doesn’t mean investors can’t benefit. Opportunity abounds for those who know how to capitalize on it.
 
Fortunately, this theme also underlies our investment philosophy at American Beacon:
 
With portfolios invested for the new economic reality—and conservatively managed for the longer term—we believe investors are better positioned to ride out the inevitable economic storms, whenever and wherever they occur.
 
It’s a philosophy that has served our shareholders well. It also explains how, in the face of the sovereign debt situation within peripheral European countries, the American Beacon Emerging Markets Fund (Institutional Class) reported a return of 11.66% for the six months ended April 30, 2010, while the American Beacon International Equity Fund (Institutional Class) experienced a 4.69% gain over the same period.
 
As global volatility has become the new norm, our focus at American Beacon remains trained on anticipating opportunities and meeting the challenges investors face today and will likely face tomorrow. This is what drives the composition of our fund line-up and the development of our new offerings in the last year.
 
It’s also a reflection of our commitment to you, a commitment we summarize as: Oversight 360°. Ours is a continuous commitment to cast a watchful and analytical eye over all the factors that influence our fellow shareholders’ investments.
 
As you review the enclosed market overview, portfolio listings, and detailed financial data, please know that 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 investment in the American Beacon Funds and know that we remain dedicated to offering you and your advisor the level of service and broad range of well-managed investment products you’ve come to expect from us.
 
 
 
     
     
   
Best Regards,
     
   
   
Gene L. Needles, Jr.
   
President
   
American Beacon Funds
 
 
1
 
 

 
 

 
 
 
Emerging Markets Overview
April 30, 2010 (Unaudited)
 
 
During the six months ended April 30, the MSCI Emerging Markets Index gained 12.37% as the global equity marketplace survived a variety of challenges. The emerging markets asset class ended 2009 on a strong note led by a strong economic rebound thanks to a favorable mix of organic and state-sponsored growth initiatives. These initiatives further served to buoy commodities prices. In China, the world’s fastest growing major economy, Gross Domestic Product growth continued to accelerate.
 
However, challenges developed in January with the emergence of both deteriorating financial conditions within the peripheral European countries and from China’s move toward monetary tightening in the midst of a global recovery. As a result of this combination of developments, riskier assets suffered a mild correction through mid-February. These assets managed to bounce back in February as Greece announced austerity plans and talks among Greece, the European Union and the International Monetary Fund revived investors’ hopes that a positive resolution will be found to its crisis.
 
The March economic reports from the U.S. added to the general sense of relief late in the period, when labor data for February showed signs of improvement and spending data indicated that the U.S. consumer remained resilient.
 
From a regional perspective, the Emerging Europe, Middle East and Africa region gained 14.4%. Latin America and Emerging Asia followed, returning 12.0% and 11.8%, respectively. From a sector standpoint, Health Care (20.6%), Information Technology (20.0%), Consumer Discretionary (18.3%) and Materials (18.3%) led the gains. Energy (4.8%), Telecommunication Services (7.6%) and Financials (8.1%) were the worst performers.
 
 
2
 
 
 
 

 

 
Performance Overview
American Beacon Emerging Markets FundSM
April 30, 2010 (Unaudited)
 
 
The Institutional Class of the Emerging Markets Fund returned 11.66% for the six months ended April 30, 2010. The Fund underperformed the MSCI Emerging Markets Index (“Index”) return of 12.37% and the Lipper Emerging Markets Funds Index return of 13.37% for the period.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
                           
Since
                           
Incep.
   
6 Months*
 
1 Year
 
5 Years
 
(7/31/00)
Institutional Class(1,5)
   
11.66
%
   
56.06
%
   
14.91
%
   
11.58
%
Y Class (1,2,5)
   
11.57
%
   
55.94
%
   
14.89
%
   
11.57
%
Investor Class(1,3,5)
   
11.42
%
   
55.56
%
   
14.56
%
   
11.32
%
AMR Class(1,5)
   
11.73
%
   
56.34
%
   
15.19
%
   
11.86
%
MSCI Emg Mkts Index(4)
   
12.37
%
   
57.13
%
   
16.56
%
   
12.03
%
Lipper Emg Mkts Funds Index(4)
   
13.37
%
   
59.50
%
   
14.60
%
   
11.25
%
 
 
     
*
 
Not annualized
     
1.
 
Performance shown is historical and may not be indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.
     
2.
 
Fund performance for the six month, one-year, five-year and since inception periods represent the total returns achieved by the Institutional Class from 7/31/00 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 7/31/00.
     
3.
 
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.
     
4.
 
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.
     
5.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor and AMR Class shares was 1.67%, 1.77%, 1.97 and 1.43%, 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 as a result of poor stock selection. Country allocation added value for the period.
 
Stock selections in South Korea, Taiwan, and South Africa led to the relative underperformance, and more than offset positive selections in India. In South Korea, investments in Hyundai Development Co. (down 23.5% during the period the stock was held by the Fund) and Kb Financial Group, Inc. (down 0.8%) contributed to the relative underperformance. Detractors in Taiwan included Sinopac Financial Holdings Co. Ltd. (down 9.3%) and First Financial Holding Co. Ltd. (down 6.2%), and in South Africa, Murray & Roberts Holdings Ltd. (down 21.0%) and ArcelorMittal South Africa Ltd. (down 15.0%) underperformed. Positive contributors in India, such as Glenmark Pharmaceuticals Ltd. (up 27.5% during the period it was held by the Fund), IndusInd Bank Ltd. (up 75.6%), and India Cements Ltd. (up 20.6%) added value for the period.
 
Relative contribution from country allocation was positive for the six-month period, as a result of overweighting Egypt (up 9.7%) and South Korea (up 19.7%). Not investing in Chile (up 18.6%) detracted from 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 FundSM
April 30, 2010 (Unaudited)
 
 
Top Ten Holdings
 
         
   
% of
   
Net Assets
Samsung Electronics Co. Ltd.
   
3.2
%
Petroleo Brasileiro S.A.
   
2.6
%
Vale S.A.
   
2.0
%
China Mobile Ltd.
   
1.7
%
America Movil, S.A.B. de C.V.
   
1.6
%
Itau Unibanco Banco Holding S.A.
   
1.5
%
MTN Group Ltd.
   
1.4
%
China Construction Bank Corp.
   
1.3
%
LUKOIL Oil Co.
   
1.3
%
Gazprom OAO
   
1.3
%
 
Sector Allocation
 
         
   
% of
   
Equities
Financials
   
24.5
%
Information Technology
   
11.8
%
Telecommunication Services
   
13.2
%
Energy
   
11.7
%
Materials
   
11.4
%
Industrials
   
7.5
%
Consumer Staples
   
7.3
%
Consumer Discretionary
   
6.9
%
Utilities
   
3.7
%
Health Care
   
2.0
%
 
Country Allocation
 
 
 
 
Country Allocation
 
         
   
% of
   
Equities
Hong Kong/China
   
16.6
%
South Korea
   
15.0
%
Brazil
   
13.6
%
India
   
10.1
%
Taiwan
   
9.7
%
Other Asia
   
8.7
%
South Africa
   
8.6
%
Other Europe, Middle East, Africa
   
7.1
%
Russia
   
4.4
%
Mexico
   
4.4
%
Egypt
   
1.2
%
Lebanon
   
0.3
%
Singapore
   
0.2
%
United States
   
0.1
%
 
4
 
 
 
 

 

 
Fund Expenses
American Beacon Emerging Markets FundSM
April 30, 2010 (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, 2009 through April 30, 2010.
 
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 cust odial 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.
 
                         
   
 
 
 
   
   
 
 
 
 
Expenses Paid
   
 
Beginning
Account
 
 
Ending
Account
 
During Period
   
Value
11/1/09
 
Value
4/30/10
 
11/1/09-4/30/10
Institutional Class*
                       
Actual
 
$
1,000.00
   
$
1,116.59
   
$
7.45
 
Hypothetical
 
$
1,000.00
   
$
1,017.75
   
$
7.10
 
(5% return before expenses)
                       
                         
Y Class**
                       
Actual
 
$
1,000.00
   
$
1,070.79
   
$
2.57
 
Hypothetical
 
$
1,000.00
   
$
1,005.84
   
$
2.53
 
(5% return before expenses)
                       
                         
Investor Class*
                       
Actual
 
$
1,000.00
   
$
1,114.20
   
$
9.23
 
Hypothetical
 
$
1,000.00
   
$
1,016.07
   
$
8.80
 
(5% return before expenses)
                       
                         
AMR Class*
                       
Actual
 
$
1,000.00
   
$
1,117.28
   
$
6.46
 
Hypothetical
 
$
1,000.00
   
$
1,018.70
   
$
6.16
 
(5% return before expenses)
                       
 

 
     
*
 
Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.42%, 1.76% and 1.23% 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.
     
**
 
Beginning account value for Y Class is the inception date of 3/1/10. Expenses are equal to the Class annualized expense ratio for the period of 1.51% multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the period (61) by days in the year (365).
 
5
 
 
 
 

 

 
International Equity Market Overview
April 30, 2010 (Unaudited)
 
During the six months ended April 30, improving global economic conditions and corporate fundamentals led most equity markets to trend higher despite periodic bouts of volatility and escalating concerns over the eventual impact of the sovereign debt situation within peripheral European countries. The MSCI EAFE Index posted a return of 2.48% for the 6-month time period.
 
The period began with the global economy exiting its worst recession since the Second World War. It was greatly aided by an unprecedented level of government stimuli throughout the world. This surge in liquidity served to reinvigorate global demand, supported the financial system, and created easier access to credit.
The general level of market enthusiasm was significantly dampened in January as news of the rapidly deteriorating fiscal conditions in Greece spread. This sent interest rates in that country higher, and greatly diminished global investors’ newly reacquired appetite for risk. During January, the markets were further troubled by news that China made a move to tighten monetary conditions in an attempt to cool down its growing economy. Ongoing discussions of regulatory reform in the Financial sector increased investors’ discomfort and stocks sold off through February.
 
Stocks rebounded in March as corporate earnings reignited optimism. With companies throughout the world reporting better than expected operating results, market losses were generally recovered by the end of the period.
 
Also underpinning the market’s late-period rise was the fact that G7 policymakers kept monetary conditions extremely loose. The most dramatic of these policy actions came in Europe, where the ongoing deterioration of sovereign balance sheets posed an increasingly dangerous threat to the survival of the monetary union. The European Union and International Monetary Fund agreed to provide funding to stabilize the regional financial system shortly after the close of the reporting period. The move came after ratings downgrades for the sovereign credits of Greece and Portugal incited the biggest surge in market volatility since the immediate aftermath of the Lehman Brothers collapse. The anxiety generated by Greece had pushed the euro to its lowest levels against the dollar in almost a year, though the weaker currency benefited exports an d European services and manufacturing industries expanded at their fastest pace in over two years.
 
Providing support for continued optimism, the International Monetary Fund (IMF) raised its forecast for 2010 global GDP growth to 4.2%, yet it cautioned that the public debt situation may experience “severe” consequences.
 
 
6
 
 
 

 
 

Performance Overview
American Beacon International Equity FundSM
April 30, 2010 (Unaudited)
 
 
The Institutional Class of the International Equity Fund returned 4.69% for the six months ended April 30, 2010. The Fund outperformed the MSCI EAFE Index (“Index”) return of 2.48% but underperformed the Lipper International Funds Index return of 6.22% for the period.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
   
6 Months*
 
1 Year
 
5 Years
 
10 Years
Institutional Class(1,6)
   
4.69
%
   
36.11
%
   
4.00
%
   
4.36
%
Y Class (1,2,6)
   
4.71
%
   
36.13
%
   
4.01
%
   
4.36
%
Investor Class(1,6)
   
4.52
%
   
35.75
%
   
3.72
%
   
4.13
%
Advisor Class (1,3,6)
   
4.41
%
   
35.29
%
   
3.42
%
   
3.91
%
Retirement Class (1,4,6)
   
4.34
%
   
35.21
%
   
3.41
%
   
3.91
%
AMR Class(1,6)
   
4.83
%
   
36.49
%
   
4.27
%
   
4.62
%
Lipper Int’l. Funds Index(5)
   
6.22
%
   
38.36
%
   
5.58
%
   
2.63
%
MSCI EAFE Index (5)
   
2.48
%
   
34.43
%
   
3.86
%
   
1.64
%
 
 
     
*
 
Not annualized
     
1.
 
Performance shown is historical and may not be indicative of future returns. Please note that the recent growth rate in the stock market has helped to produce short-term returns that are not typical and may not continue in the future. 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 one-year, five year, and ten-year periods represents the total returns achieved by the Institutional Class from 4/30/00 up to 8/3/09, the inception date of the Y Class, and the returns of the Y Class since its inception.
     
3.
 
Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 4/30/00 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 4/30/00. A portion of the fees charged to the Advisor Class of the Fund was waived through 2007. Performance prior to waiving fees was lower than the actual returns shown for periods through 2007.
     
4.
 
Fund performance for the five-year and ten-year periods represents the total returns achieved by the Investor Class from 4/30/00 through 4/30/03 and the Advisor Class from 5/1/03 up to 5/1/09, the inception date of the Retirement Class, and the returns of the Retirement Class since its inception. Expenses of the Retirement Class are higher than those of the Advisor and Investor Classes. As a result, total returns shown may be higher than they would have been had the Retirement Class been in existence since 4/30/00.
     
5.
 
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.
     
6.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, Retirement, and AMR Class shares was 0.74%, 0.70%, 1.06%, 1.46%, 1.49%, and 0.49%, 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 2.21% over the six-month period due to stock selection, as country allocation detracted from performance.
 
Stock selections within Japan, the Netherlands, and Norway had a significantly positive impact overall. In Japan, the Fund benefited from investments in Fanuc Ltd. (up 39.7%) and Sony Financial Holdings, Inc. (up 24.6%). In the Netherlands, Koninklijke Philips Electronics N.V. (up 37.6%) and TNT N.V. (up 16.8%) contributed to the Fund’s relative outperformance. Norwegian security Aker Solutions ASA (up 43.0%) was the most significant contributor to relative performance within that country. Stock selection in Australia detracted from relative performance, including Nufarm Ltd. (down 17.9% during the period the stock was held by the Fund), and Bluescope Steel Ltd. (down 9.6%). Stock selection within France also weakened performance during the period, including Societe Generale (down 19.8%) and Sanofi-Aventis S.A. (down 6.4%).
 
Country allocation hurt performance, specifically underweighting Australia (up 8.6%) and Japan (up 7.7%), though investing in South Korea (up 19.7%) added value for the period.
 
Although economic and market conditions vary from period to period, the Fund’s primary strategy of investing in undervalued companies with above-average earnings growth expectations remains consistent.
 
 
7
 
 
 
 

 

 
Performance Overview
American Beacon International Equity FundSM
April 30, 2010 (Unaudited)
 
Top Ten Holdings
 
         
   
% of
   
Net Assets
Sanofi-Aventis S.A.
   
2.4
%
Siemens AG
   
2.3
%
Royal Dutch Shell plc
   
2.1
%
HSBC Holdings plc
   
1.9
%
DBS Group Holdings Ltd.
   
1.8
%
Vodafone Group plc
   
1.8
%
GlaxoSmithKline plc
   
1.6
%
Novartis AG
   
1.6
%
Total S.A.
   
1.5
%
E.ON AG
   
1.5
%
 
Sector Allocation
 
         
   
% of
   
Equities
Financials
   
24.5
%
Telecommunication Services
   
13.2
%
Information Technology
   
11.8
%
Energy
   
11.7
%
Materials
   
11.4
%
Industrials
   
7.5
%
Consumer Staples
   
7.3
%
Consumer Discretionary
   
6.9
%
Utilities
   
3.7
%
Health Care
   
2.0
%
 
Regional Allocation*
 
 
 
     
*
 
Shown as a percentage of equities
 

 
         
   
% of
   
Equities
Europe
   
71.9
%
Pacific Rim
   
26.1
%
North America
   
2.0
%
 
8
 
 
 
 

 

 
 
Fund Expenses
American Beacon International Equity FundSM
April 30, 2010 (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, 2009 through April 30, 2010.
 
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 custodi al 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
 
Expenses Paid During
   
Account
 
Account
 
Period*
   
Value
11/1/09
 
Value
4/30/10
 
11/1/09-4/30/10
Institutional Class
                       
Actual
 
$
1,000.00
   
$
1,046.93
   
$
3.55
 
Hypothetical
 
$
1,000.00
   
$
1,021.32
   
$
3.51
 
(5% return before expenses)
                       
                         
Y Class
                       
Actual
 
$
1,000.00
   
$
1,047.07
   
$
3.60
 
Hypothetical
 
$
1,000.00
   
$
1,021.27
   
$
3.56
 
(5% return before expenses)
                       
                         
Investor Class
                       
Actual
 
$
1,000.00
   
$
1,045.16
   
$
5.38
 
Hypothetical
 
$
1,000.00
   
$
1,019.54
   
$
5.31
 
(5% return before expenses)
                       
                         
Advisor Class
                       
Actual
 
$
1,000.00
   
$
1,044.07
   
$
6.39
 
Hypothetical
 
$
1,000.00
   
$
1,018.55
   
$
6.31
 
(5% return before expenses)
                       
                         
Retirement Class
                       
Actual
 
$
1,000.00
   
$
1,043.41
   
$
7.55
 
Hypothetical
 
$
1,000.00
   
$
1,017.41
   
$
7.45
 
(5% return before expenses)
                       
                         
AMR Class
                       
Actual
 
$
1,000.00
   
$
1,048.32
   
$
2.29
 
Hypothetical
 
$
1,000.00
   
$
1,022.56
   
$
2.26
 
(5% return before expenses)
                       
 
 
     
*
 
Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.70%, 0.71%, 1.06%, 1.26%, 1.49% and 0.45% for the Institutional, Y, Investor, Advisor, Retirement 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 FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
BRAZIL - 13.13%
               
COMMON STOCKS - 10.94%
               
Banco Bradesco S.A., ADR
   
21,940
   
$
409
 
Banco Santander Brasil S.A., ADR
   
66,680
     
775
 
BRF - Brasil Foods S.A.
   
48,610
     
635
 
Centrais Eletricas Brasileiras S.A.
   
9,966
     
142
 
Cia de Bebidas das Americas, ADR
   
6,000
     
587
 
Cia de Concessoes Rodoviarias
   
5,900
     
137
 
Cia de Saneamento Basico do Estado de Sao Paulo
   
10,670
     
205
 
Cia de Saneamento Basico do Estado de Sao Paulo, ADR
   
1,410
     
55
 
Cia de Saneamento de Minas Gerais-COPASA
   
28,600
     
415
 
Cia Energetica de Minas Gerais, ADR
   
2,037
     
33
 
Cielo S.A.
   
83,400
     
810
 
Empresa Brasileira de Aeronautica S.A. (Embraer), ADR
   
21,450
     
516
 
Grendene S.A.
   
55,740
     
257
 
Itau Unibanco Banco Holding S.A., GDR
   
83,469
     
1,810
 
JBS S.A.
   
21,900
     
103
 
MRV Engenharia e Participacoes S.A.
   
40,900
     
289
 
OGX Petroleo e Gas Participacoes S.A.
   
18,800
     
187
 
PDG Realty SA Empreendimentos e Participacoes
   
33,400
     
307
 
Petroleo Brasileiro S.A., ADR
   
14,360
     
609
 
Petroleo Brasileiro S.A., A Shares, ADR
   
79,359
     
3,011
 
Porto Seguro SA
   
48,500
     
500
 
Redecard S.A.
   
27,600
     
456
 
TIM Participacoes S.A., ADR
   
5,700
     
148
 
Tractebel Energia S.A.
   
17,430
     
222
 
Vale S.A., ADR
   
87,366
     
2,498
 
Vivo Participacoes S.A., GDR
   
11,800
     
312
 
Total Common Stocks
           
15,428
 
                 
PREFERRED STOCKS - 2.19%
               
Banco Bradesco S.A.
   
8,800
     
161
 
Braskem S.A.
   
58,300
     
422
 
Cia de Tecidos do Norte de Minas - Coteminas
   
54,862
     
168
 
Cia Energetica de Minas Gerais
   
47,903
     
759
 
Itau Unibanco Banco Holding S.A.
   
13,955
     
303
 
Net Servicos de Comunicacao S.A. ^
   
24,477
     
289
 
Tele Norte Leste Participacoes S.A., ADR
   
30,240
     
449
 
Ultrapar Participacoes S.A.
   
5,400
     
255
 
Vale S.A., A Shares
   
10,704
     
286
 
Total Preferred Stocks
           
3,092
 
Total Brazil
           
18,520
 
                 
CZECH REPUBLIC - 0.68%
               
COMMON STOCKS - 0.68%
               
CEZ
   
3,452
     
166
 
Komercni Banka, a.s.
   
2,924
     
603
 
Telefonica O2 Czech Republic a.s.
   
8,453
     
187
 
Total Czech Republic
           
956
 
                 
EGYPT - 1.15%
               
COMMON STOCKS - 1.15%
               
Commercial International Bank Egypt SAE
   
51,296
     
694
 
Orascom Construction Industries
   
9,734
     
471
 
Telecom Egypt
   
137,495
     
457
 
Total Egypt
           
1,622
 
                 
HONG KONG/CHINA - 15.95%
               
COMMON STOCKS - 15.95%
               
Asia Cement China Holdings Corp.
   
520,500
     
252
 
Bank of China Ltd.
   
756,900
     
389
 
Beijing Capital International Airport Co. Ltd.
   
296,000
     
178
 
Beijing Enterprises Holdings Ltd.
   
56,500
     
368
 
Belle International Holdings Ltd.
   
275,000
     
378
 
Bosideng International Holdings Ltd.
   
406,000
     
112
 
China Citic Bank Corp. Ltd.
   
474,000
     
310
 
China Coal Energy Ltd.
   
255,000
     
381
 
China Communications Services Corp. Ltd.
   
436,000
     
218
 
China Construction Bank Corp.
   
2,325,360
     
1,886
 
China Dongxiang Group Co.
   
189,000
     
127
 
China Life Insurance Co. Ltd.
   
167,000
     
759
 
China Longyuan Power Group Corp. ^
   
10,000
     
11
 
China Mobile Ltd.
   
184,000
     
1,802
 
China Mobile Ltd., ADR
   
10,780
     
527
 
China Oilfield Services Ltd.
   
212,000
     
298
 
China Pacific Insurance Group Co Ltd.
   
96,800
     
396
 
China Petroleum & Chemical Corp.
   
930,000
     
744
 
China Petroleum & Chemical Corp., ADR
   
840
     
67
 
China Power International Development Ltd.
   
1,511,800
     
344
 
China Railway Construction Corp. Ltd.
   
576,000
     
715
 
China Resources Power Holdings Co. Ltd.
   
218,000
     
440
 
China Telecom Corp. Ltd.
   
734,000
     
335
 
China Unicom Hong Kong Ltd.
   
418,744
     
522
 
China Zhongwang Holdings Ltd. ^
   
367,600
     
313
 
COSCO Pacific Ltd.
   
179,578
     
239
 
Denway Motors Ltd.
   
1,080,700
     
637
 
Dongfeng Motor Group Co. Ltd.
   
254,000
     
358
 
Fushan International Energy Group Ltd.
   
282,000
     
197
 
Global Bio-chem Technology Group Co. Ltd.
   
1,163,800
     
268
 
GOME Electrical Appliances Holdings Ltd.
   
2,280,240
     
730
 
Harbin Power Equipment Co. Ltd.
   
294,000
     
231
 
Hengan International Group Co. Ltd.
   
20,000
     
153
 
Huaneng Power International, Inc.
   
779,900
     
449
 
 
See accompanying notes
 
 
10
 
 
 

 
 
American Beacon Emerging Markets FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Huaneng Power International, Inc., ADR
   
4,180
   
$
96
 
Industrial & Commercial Bank of China
   
1,506,000
     
1,105
 
Lumena Resources Corp. ^
   
858,000
     
252
 
Maanshan Iron & Steel
   
722,000
     
379
 
NWS Holdings Ltd.
   
254,757
     
444
 
PetroChina Co. Ltd.
   
1,198,000
     
1,381
 
PetroChina Co. Ltd., ADR
   
1,960
     
226
 
Ping’an Insurance Co. of China Ltd.
   
40,000
     
341
 
Renhe Commercial Holdings Co. Ltd.
   
2,114,000
     
513
 
Sany Heavy Equipment International Holdings Co. Ltd. ^
   
149,000
     
181
 
Shanghai Industrial Holdings Ltd.
   
121,000
     
522
 
Sinotrans Ltd.
   
1,448,000
     
344
 
Soho China Ltd.
   
737,500
     
419
 
Sohu.com, Inc. ^
   
3,230
     
156
 
Tianjin Development Holdings
   
76,000
     
48
 
TPV Technology Ltd.
   
206,970
     
160
 
Tsingtao Brewery Co. Ltd.
   
34,000
     
168
 
Want Want China Holdings Ltd.
   
302,000
     
225
 
Weiqiao Textile Co.
   
536,600
     
396
 
Total Hong Kong/China
           
22,490
 
                 
HUNGARY - 0.93%
               
COMMON STOCKS - 0.93%
               
Mol Hungarian Oil and Gas plc ^
   
6,528
     
656
 
OTP Bank ^
   
4,246
     
150
 
Richter Gedeon Nyrt.
   
2,382
     
504
 
Total Hungary
           
1,310
 
                 
INDIA - 9.74%
               
COMMON STOCKS - 9.74%
               
Andhra Bank
   
47,780
     
143
 
Asian Paints Ltd.
   
4,854
     
227
 
Bank of India
   
56,780
     
483
 
Bharat Heavy Electricals Ltd.
   
6,338
     
354
 
Bharat Petroleum Corp. Ltd.
   
31,403
     
368
 
Bharti Airtel Ltd.
   
128,540
     
869
 
Colgate-Palmolive India Ltd.
   
10,188
     
171
 
Deccan Chronicle Holdings Ltd.
   
36,179
     
121
 
Dr Reddys Laboratories Ltd.
   
13,612
     
382
 
Glenmark Pharmaceuticals Ltd.
   
127,285
     
765
 
Godrej Consumer Products Ltd.
   
25,313
     
165
 
HDFC Bank Ltd.
   
19,345
     
862
 
Hero Honda Motors Ltd.
   
3,745
     
160
 
Hindalco Industries Ltd.
   
71,684
     
286
 
Hindustan Construction Co.
   
63,508
     
188
 
Hindustan Petroleum Corp. Ltd.
   
54,970
     
390
 
India Cements Ltd.
   
236,260
     
666
 
Indian Bank
   
84,893
     
431
 
IndusInd Bank Ltd.
   
74,974
     
327
 
Infosys Technologies Ltd.
   
14,824
     
904
 
ITC Ltd.
   
38,350
     
229
 
KSK Energy Ventures Ltd. ^
   
46,000
     
198
 
Mahanagar Telephone Nigam Ltd.
   
182,310
     
291
 
Marico Ltd.
   
54,100
     
130
 
Nestle India Ltd.
   
2,084
     
129
 
NMDC Ltd.
   
36,870
     
247
 
Reliance Industries Ltd.
   
50,666
     
1,169
 
Rolta India Ltd.
   
87,400
     
370
 
Rural Electrification Corp. Ltd.
   
26,030
     
149
 
Shree Renuka Sugars Ltd.
   
79,260
     
110
 
State Bank of India
   
3,532
     
278
 
State Bank of India, GDR ‡
   
9,190
     
942
 
Sun TV Network Ltd.
   
17,777
     
168
 
Tata Motors Ltd.
   
27,377
     
532
 
Wipro Ltd.
   
15,741
     
237
 
Yes Bank Ltd. ^
   
45,160
     
290
 
Total India
           
13,731
 
                 
INDONESIA - 2.50%
               
COMMON STOCKS - 2.50%
               
Astra International Tbk PT
   
112,400
     
581
 
PT Bank Central Asia Tbk
   
675,000
     
407
 
PT Bank Rakyat Indonesia Tbk
   
269,500
     
266
 
PT Bumi Resources Tbk
   
839,500
     
217
 
PT Indofood Sukses Makmur Tbk
   
698,500
     
298
 
PT Indosat Tbk
   
581,500
     
376
 
PT International Nickel Indonesia Tbk
   
445,000
     
242
 
PT Medco Energi Internasional Tbk
   
732,000
     
235
 
PT Perusahaan Gas Negara Persero Tbk
   
579,500
     
260
 
PT Telekomunikasi Indonesia Tbk
   
747,300
     
643
 
Total Indonesia
           
3,525
 
                 
ISRAEL - 0.41%
               
COMMON STOCKS - 0.41%
               
Bank Hapoalim B.M. ^
   
14,990
     
60
 
Makhteshim-Agan Industries Ltd.
   
68,920
     
291
 
Teva Pharmaceutical Industries Ltd., ADR
   
3,940
     
232
 
Total Israel
           
583
 
               
LEBANON - 0.28%
               
COMMON STOCKS - 0.28%
               
Banque Audi sal- Audi Saradar Group, GDR
   
2,492
     
219
 
BLOM Bank SAL, GDR
   
1,819
     
174
 
Total Lebanon
           
393
 
               
MALAYSIA - 2.38%
               
COMMON STOCKS - 2.38%
               
Axiata Group Bhd
   
284,300
     
345
 
Gamuda Bhd
   
449,900
     
423
 
 
See accompanying notes
 
 
11
 
 
 

 
 

American Beacon Emerging Markets FundSM
Schedule of Investments
April 30, 2010 (Unaudited)

 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Gamuda Bhd, Right ^
   
56,237
   
$
 
Genting Malaysia Bhd
   
822,910
     
742
 
Malayan Banking Bhd
   
572,270
     
1,367
 
Sime Darby Bhd
   
114,800
     
313
 
Tenaga Nasional Bhd
   
62,300
     
165
 
Total Malaysia
           
3,355
 
                 
MEXICO - 4.19%
               
COMMON STOCKS - 4.19%
               
America Movil, S.A.B. de C.V., ADR
   
44,297
     
2,280
 
Consorcio ARA, S.A.B. de C.V.
   
288,900
     
198
 
Desarrolladora Homex, S.A.B. de C.V., ADR ^
   
13,130
     
380
 
Embotelladoras Arca, S.A.B. de C.V.
   
127,230
     
481
 
Fomento Economico Mexicano, S.A.B. de C.V., ADR
   
18,000
     
852
 
Grupo Continential, S.A.B. de C.V.
   
132,350
     
354
 
Grupo Financiero Banorte, S.A.B. de C.V.
   
100,089
     
402
 
Grupo Televisa, S.A., ADR
   
27,600
     
574
 
Industrias CH S.A.B de C.V. ^
   
33,900
     
142
 
Wal-Mart de Mexico, S.A.B. de C.V.
   
103,000
     
240
 
Total Mexico
           
5,903
 
                 
PHILIPPINES - 0.97%
               
COMMON STOCKS - 0.97%
               
Ayala Corp.
   
27,430
     
208
 
Bank of the Philippine Islands
   
163,027
     
165
 
Metro Pacific Investments Corp. ^
   
3,169,000
     
224
 
Metropolitan Bank & Trust
   
190,200
     
226
 
Philippine Long Distance Telephone Co.
   
4,470
     
250
 
SM Investments Corp.
   
23,120
     
206
 
Union Bank of the Philippines
   
85,200
     
86
 
Total Philippines
           
1,365
 
                 
POLAND - 2.12%
               
COMMON STOCKS - 2.12%
               
Asseco Poland SA
   
18,020
     
345
 
Asseco Poland SA, Right ^
   
2,020
     
 
Bank Handlowy W Warszawie S.A.
   
6,076
     
167
 
Bank Pekao S.A.
   
1,760
     
100
 
Bank Zachodni WBK S.A. ^
   
2,200
     
161
 
Central European Distribution Corp.
   
12,582
     
436
 
Polski Koncern Naftowy Orlen S.A. ^
   
33,444
     
443
 
Powszechna Kasa Oszczednosci Bank Polski S.A.
   
39,382
     
565
 
Telekomunikacja Polska S.A.
   
141,203
     
769
 
Total Poland
           
2,986
 
                 
RUSSIA - 4.22%
               
COMMON STOCKS - 4.22%
               
Gazprom OAO, ADR
   
77,330
     
1,796
 
LUKOIL Oil Co., ADR
   
32,616
     
1,866
 
OJSC MMC Norilsk Nickel, ADR
   
13,149
     
252
 
OJSC Rosneft Oil Co., GDR
   
68,079
     
552
 
Polyus Gold Co., GDR
   
2,044
     
51
 
RusHydro, ADR ^
   
88,820
     
515
 
Sberbank RF, GDR
   
900
     
246
 
Wimm-Bill-Dann Foods OJSC, ADR
   
15,748
     
342
 
X 5 Retail Group NV ^
   
9,232
     
328
 
X 5 Retail Group NV, GDR ^
   
251
     
9
 
Total Russia
           
5,957
 
                 
SINGAPORE - 0.17%
               
COMMON STOCKS - 0.17%
               
Golden Agri-Resources Ltd.
   
586,000
     
247
 
               
SOUTH AFRICA - 8.27%
               
COMMON STOCKS - 8.27%
               
Anglo Platinum Ltd.
   
8,131
     
890
 
AngloGold Ashanti Ltd., ADR
   
10,194
     
427
 
ArcelorMittal South Africa Ltd.
   
27,784
     
320
 
AVI Ltd.
   
60,200
     
195
 
Barloworld Ltd.
   
50,660
     
338
 
FirstRand Ltd.
   
141,160
     
389
 
Gold Fields Ltd., ADR
   
18,120
     
243
 
Impala Platinum Holdings Ltd.
   
29,400
     
828
 
Imperial Holdings Ltd.
   
21,500
     
285
 
JD Group Ltd.
   
79,660
     
470
 
Kumba Iron Ore Ltd.
   
772
     
36
 
MTN Group Ltd.
   
129,486
     
1,906
 
Murray & Roberts Holdings Ltd.
   
107,360
     
598
 
Nampak Ltd.
   
191,290
     
464
 
Naspers Ltd.
   
21,226
     
856
 
Nedbank Group Ltd.
   
17,111
     
308
 
SABMiller plc
   
22,704
     
710
 
Sappi Ltd.
   
76,204
     
321
 
Sasol Ltd.
   
14,610
     
593
 
Sasol Ltd., ADR
   
5,140
     
209
 
Standard Bank Group Ltd.
   
22,635
     
351
 
Telkom South Africa Ltd.
   
72,420
     
363
 
Tiger Brands Ltd.
   
21,849
     
556
 
Total South Africa
           
11,656
 
                 
SOUTH KOREA - 14.41%
               
COMMON STOCKS - 14.19%
               
Amorepacific Corp.
   
253
     
191
 
Cheil Industries, Inc.
   
4,230
     
302
 
Cheil Worldwide, Inc.
   
1,068
     
336
 
CJ CheilJedang Corp.
   
1,069
     
214
 
Hyundai Development Co.
   
16,270
     
401
 
Hyundai Engineering & Construction Co. Ltd.
   
2,595
     
125
 
 
See accompanying notes
 
 
12
 
 

 
 

 
 
American Beacon Emerging Markets FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Hyundai Mobis
   
1,926
   
$
320
 
Hyundai Motor Co.
   
2,476
     
303
 
Jinro Ltd.
   
5,100
     
161
 
Kangwon Land, Inc.
   
40,710
     
631
 
KB Financial Group, Inc.
   
18,233
     
881
 
KB Financial Group, Inc., ADR
   
370
     
18
 
Kia Motors Corp.
   
17,506
     
427
 
Korea Electric Power Corp.
   
16,035
     
490
 
Korea Exchange Bank
   
1,090
     
13
 
Korean Reinsurance Co.
   
46,103
     
402
 
KT Corp.
   
8,160
     
364
 
KT Corp., ADR
   
13,970
     
316
 
KT&G Corp.
   
10,109
     
510
 
LG Chem Ltd.
   
2,752
     
700
 
LG Display Co. Ltd.
   
11,500
     
487
 
LG Display Co. Ltd., ADR
   
4,600
     
97
 
LG Electronics, Inc.
   
1,243
     
135
 
LG Telecom Ltd.
   
5,356
     
40
 
Lotte Chilsung Beverage Co. Ltd.
   
95
     
73
 
Lotte Shopping Co. Ltd.
   
1,179
     
334
 
NCSoft Corp.
   
403
     
60
 
NHN Corp. ^
   
1,927
     
322
 
Nong Shim Co. Ltd.
   
1,718
     
331
 
OCI Co. Ltd.
   
3,511
     
668
 
POSCO
   
1,915
     
860
 
POSCO, ADR
   
270
     
30
 
Samsung Electronics Co. Ltd.
   
5,476
     
4,142
 
Samsung Fire & Marine Insurance Co. Ltd.
   
4,272
     
788
 
Samsung Life Insurance Co. Ltd.
   
2,510
     
249
 
Shinhan Financial Group Co. Ltd.
   
24,686
     
1,043
 
Shinsegae Co. Ltd.
   
610
     
280
 
SK Telecom Co. Ltd.
   
217
     
33
 
SK Telecom Co. Ltd., ADR
   
39,510
     
731
 
S-Oil Corp.
   
7,257
     
370
 
SSCP Co. Ltd. ^
   
10,299
     
70
 
Tong Yang Life Insurance
   
44,480
     
558
 
Woongjin Coway Co. Ltd.
   
13,136
     
433
 
Woori Finance Holdings Co. Ltd.
   
14,720
     
233
 
Yuhan Corp.
   
3,721
     
537
 
Total Common Stocks
           
20,009
 
               
PREFERRED STOCKS - 0.22%
               
Samsung Electronics Co. Ltd.
   
658
     
312
 
Total South Korea
           
20,321
 
                 
TAIWAN - 9.37%
               
COMMON STOCKS - 9.37%
               
Acer, Inc.
   
98,886
     
268
 
Asia Cement Corp.
   
302,000
     
282
 
Asustek Computer, Inc.
   
362,356
     
696
 
AU Optronics Corp.
   
347,520
     
404
 
AU Optronics Corp., ADR
   
13,660
     
158
 
Catcher Technology Co. Ltd.
   
170,000
     
446
 
Cathay Financial Holding Co. Ltd.
   
249,400
     
397
 
Chang Hwa Commercial Bank
   
821,000
     
367
 
China Steel Corp.
   
671,502
     
716
 
Chinatrust Financial Holding Co. Ltd.
   
837,326
     
470
 
Evergreen Marine Corp. ^
   
165,900
     
106
 
First Financial Holding Co. Ltd.
   
1,168,201
     
640
 
Fubon Financial Holding Co. Ltd.
   
289,000
     
351
 
HON HAI Precision Industry Co. Ltd.
   
292,112
     
1,365
 
HTC Corp.
   
46,970
     
627
 
Lite-On Technology Corp.
   
149,000
     
197
 
MediaTek, Inc.
   
8,000
     
135
 
Mega Financial Holding Co. Ltd.
   
197,000
     
115
 
Nan Ya Printed Circuit Board Corp.
   
100,989
     
417
 
Quanta Computer, Inc.
   
473,000
     
886
 
SinoPac Financial Holdings Co. Ltd.
   
1,481,987
     
505
 
Taishin Financial Holdings Co. Ltd.
   
134,636
     
52
 
Taiwan Fertilizer Co. Ltd.
   
43,000
     
136
 
Taiwan Semiconductor Manufacturing Co. Ltd.
   
815,385
     
1,590
 
Taiwan Semiconductor Manufacturing Co. Ltd., ADR
   
13,330
     
141
 
Tatung Co. Ltd. ^
   
2,161,000
     
442
 
Transcend Information, Inc.
   
29,520
     
94
 
Uni-President Enterprises Corp.
   
211,000
     
234
 
United Microelectronics Corp.
   
1,195,226
     
601
 
Wistron Corp.
   
109,014
     
209
 
Yuanta Financial Holding Co. Ltd.
   
286,000
     
170
 
Total Taiwan
           
13,217
 
               
THAILAND - 2.54%
               
COMMON STOCKS - 2.54%
               
Bangkok Bank PCL #
   
206,590
     
756
 
Banpu pcl #
   
15,000
     
294
 
Kasikornbank PCL
   
288,600
     
825
 
Krung Thai Bank PCL
   
563,400
     
195
 
PTT Exploration & Production PCL
   
36,000
     
168
 
PTT PCL
   
67,300
     
503
 
Siam Cement PCL #
   
29,200
     
237
 
Siam Commercial Bank PCL
   
96,800
     
237
 
Thai Union Frozen Products PCL
   
139,800
     
164
 
Total Access Communication Pcl #
   
188,800
     
198
 
Total Thailand
           
3,577
 
               
TURKEY - 2.63%
               
COMMON STOCKS - 2.63%
               
Akbank TAS
   
50,179
     
249
 
Anadolu Efes Biracilik Ve Malt Sanayii A.S.
   
46,728
     
580
 
 
See accompanying notes
 
 
13
 
 
 
 

 

 
American Beacon Emerging Markets FundSM
Schedule of Investments
April 30, 2010 (Unaudited)

 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Coca-Cola Icecek A.S.
   
21,520
   
$
211
 
TAV Havalimanlari Holding A.S. ^
   
74,597
     
361
 
Tupras-Turkiye Petrol Rafinerileri A.S.
   
9,681
     
214
 
Turk Telekomunikasyon A.S.
   
58,877
     
217
 
Turkcell Iletisim Hizmetleri A.S.
   
78,983
     
511
 
Turkcell Iletisim Hizmetleri A.S., ADR
   
14,870
     
241
 
Turkiye Garanti Bankasi A.S.
   
89,419
     
435
 
Turkiye Halk Bankasi A.S.
   
10,492
     
83
 
Turkiye Is Bankasi (Isbank)
   
118,292
     
412
 
Turkiye Sise ve Cam Fabrikalari A.S.
   
144,687
     
194
 
Total Turkey
           
3,708
 
               
UNITED KINGDOM - 0.06%
               
COMMON STOCKS - 0.06%
               
JKX Oil & Gas plc
   
21,780
     
87
 
               
UNITED STATES - 0.13%
               
COMMON STOCKS - 0.13%
               
Fuqi International, Inc. ^
   
16,920
     
178
 
               
SHORT TERM INVESTMENTS - 2.95%
               
JPMorgan U.S. Government Money Market Fund
   
3,551,589
     
3,552
 
 
 
                 
   
Par
         
   
Amount
         
U.S. Treasury, 0.14%, Due 6/17/2010 §
 
$
605
     
605
 
Total Short Term Investments
           
4,157
 
TOTAL INVESTMENTS 99.18% - (Cost $110,680)
           
139,844
 
OTHER ASSETS, NET OF LIABILITIES - 0.82%
           
1,160
 
TOTAL NET ASSETS - 100.00%
         
$
141,004
 
 
 
     
   
Percentages are stated as a percent of net assets.
     
^
 
Non-income producing security.
     
 
Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $942 or 0.67% of net assets. The Fund has no right to demand registration of these securities.
     
#
 
NVDR — Non Voting Depository Receipt
     
§
 
At April 30, 2010, 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
   
88
   
Jun 2010
 
$
5,207
   
$
92
 
                             
 
See accompanying notes
 
 
14
 
 

 
 

 
 
American Beacon Emerging Markets FundSM
Schedule of Investments
April 30, 2010 (Unaudited)
Sector Diversification
 
         
   
Percent of
   
Net Assets
Communications
   
1.34
%
Consumer Discretionary
   
6.66
%
Consumer Staples
   
7.06
%
Energy
   
11.28
%
Financials
   
23.56
%
Health Care
   
1.91
%
Industrials
   
7.24
%
Information Technology
   
11.32
%
Materials
   
10.94
%
Telecommunication Services
   
11.34
%
Utilities
   
3.58
%
Short Term Investments
   
2.95
%
Other Assets, Net of Liabilities
   
0.82
%
     
100.00
%
 
See accompanying notes
 
 
15
 
 

 
 

 
 
 
American Beacon International Equity Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
AUSTRALIA - 1.72%
               
COMMON STOCKS - 1.72%
               
BlueScope Steel Ltd.
   
1,942,031
   
$
4,661
 
Foster’s Group Ltd.
   
958,071
     
4,809
 
Insurance Australia Group Ltd.
   
2,154,061
     
7,573
 
Nufarm Ltd.
   
58,422
     
413
 
Nufarm Ltd. †
   
495,870
     
3,481
 
QBE Insurance Group Ltd.
   
156,500
     
3,045
 
Total Australia
           
23,982
 
                 
AUSTRIA - 0.19%
               
COMMON STOCKS - 0.19%
               
Telekom Austria AG
   
202,700
     
2,694
 
               
BELGIUM - 0.44%
               
COMMON STOCKS - 0.44%
               
Anheuser-Busch InBev NV †
   
127,200
     
6,189
 
               
CANADA - 1.10%
               
COMMON STOCKS - 1.10%
               
Potash Corp of Saskatchewan, Inc.
   
31,400
     
3,469
 
Precision Drilling Trust
   
746,429
     
5,666
 
Rogers Communications, Inc.
   
93,800
     
3,344
 
TELUS Corp.
   
80,100
     
2,963
 
Total Canada
           
15,442
 
               
DENMARK - 0.20%
               
COMMON STOCKS - 0.20%
               
DSV AS
   
40,850
     
727
 
Novo Nordisk AS
   
25,525
     
2,085
 
Total Denmark
           
2,812
 
               
FINLAND - 0.90%
               
COMMON STOCKS - 0.90%
               
Nokia Oyj
   
614,339
     
7,477
 
UPM-Kymmene Oyj
   
357,847
     
5,166
 
Total Finland
           
12,643
 
                 
FRANCE - 11.99%
               
COMMON STOCKS - 11.99%
               
Accor S.A.
   
154,849
     
8,849
 
AXA S.A. †
   
544,351
     
10,820
 
BNP Paribas
   
161,474
     
11,098
 
Carrefour S.A.
   
136,040
     
6,673
 
Cie Generale des Etablissements Michelin
   
90,220
     
6,528
 
EADS N.V.
   
371,021
     
6,876
 
France Telecom S.A.
   
544,892
     
11,944
 
Gemalto N.V. ^
   
50,347
     
2,257
 
Sanofi-Aventis S.A. †
   
498,839
     
34,157
 
Societe Generale
   
172,380
     
9,172
 
Technip S.A. †
   
166,739
     
13,325
 
Total S.A.
   
391,987
     
21,240
 
Valeo ^
   
84,196
     
2,813
 
VINCI S.A.
   
178,714
     
10,009
 
Vivendi S.A. †
   
453,916
     
11,947
 
Total France
           
167,708
 
               
GERMANY - 9.15%
               
COMMON STOCKS - 9.15%
               
Allianz SE †
   
38,750
     
4,449
 
Bayer AG †
   
76,715
     
4,910
 
Bayerische Motoren Werke AG
   
269,010
     
13,181
 
Celesio AG †
   
245,480
     
8,042
 
Deutsche Post AG
   
825,359
     
13,365
 
E.ON AG ^ †
   
562,911
     
20,806
 
Linde AG †
   
88,106
     
10,535
 
Merck KGaA
   
57,150
     
4,696
 
Muenchener Rueckversicherungs-Gesellschaft AG †
   
45,297
     
6,405
 
SAP AG
   
204,010
     
9,828
 
Siemens AG
   
321,970
     
31,831
 
Total Germany
           
128,048
 
               
GREECE - 0.56%
               
COMMON STOCKS - 0.56%
               
OPAP S.A.
   
255,077
     
5,184
 
Public Power Corp. S.A.
   
165,900
     
2,693
 
Total Greece
           
7,877
 
               
HONG KONG/CHINA - 2.17%
               
COMMON STOCKS - 2.17%
               
Cheung Kong Holdings Ltd.
   
472,500
     
5,855
 
Esprit Holdings Ltd.
   
842,305
     
6,033
 
Hang Seng Bank Ltd.
   
344,800
     
4,704
 
Hutchison Whampoa Ltd.
   
187,000
     
1,281
 
Swire Pacific Ltd.
   
322,100
     
3,595
 
Swire Properties Ltd. ^
   
32,210
     
89
 
Yue Yuen Industrial Holdings Ltd.
   
2,537,667
     
8,810
 
Total Hong Kong/China
           
30,367
 
               
IRELAND - 0.86%
               
COMMON STOCKS - 0.86%
               
CRH plc
   
255,152
     
7,229
 
Smurfit Kappa Group plc
   
465,636
     
4,752
 
Total Ireland
           
11,981
 
               
ITALY - 2.76%
               
COMMON STOCKS - 2.76%
               
Atlantia S.p.A
   
121,000
     
2,582
 
 
See accompanying notes
 
 
16
 
 
 

 
 
 
American Beacon International Equity Fund
Schedule of Investments
April 30, 2010 (Unaudited)
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Buzzi Unicem S.p.A. †
   
217,715
   
$
3,255
 
Eni S.p.A.
   
233,856
     
5,243
 
Finmeccanica S.p.A.
   
536,770
     
6,868
 
Intesa Sanpaolo S.p.A ^
   
824,480
     
2,713
 
Prysmian S.p.A.
   
139,442
     
2,505
 
Saras S.p.A.
   
315,900
     
765
 
Snam Rete Gas S.p.A
   
1,281,558
     
6,073
 
UniCredit S.p.A.
   
3,248,724
     
8,521
 
Total Italy
           
38,525
 
                 
JAPAN - 16.25%
               
COMMON STOCKS - 16.25%
               
Benesse Holdings, Inc.
   
52,200
     
2,406
 
Bridgestone Corp.
   
342,700
     
5,719
 
Canon, Inc.
   
139,900
     
6,387
 
Chuo Mitsui Trust Holdings, Inc.
   
1,043,400
     
3,999
 
Daito Trust Construction Co. Ltd.
   
104,900
     
5,616
 
East Japan Railway Co.
   
65,200
     
4,355
 
Fanuc Ltd.
   
84,500
     
9,995
 
FUJIFILM Holdings Corp.
   
107,900
     
3,704
 
Haseko Corp.
   
3,521,018
     
3,674
 
Honda Motor Co. Ltd.
   
247,600
     
8,367
 
Hoya Corp.
   
185,300
     
5,097
 
Inpex Corp.
   
335
     
2,368
 
JS Group Corp.
   
189,400
     
3,730
 
KDDI Corp.
   
2,985
     
14,475
 
Keyence Corp.
   
14,500
     
3,458
 
Konica Minolta Holdings, Inc.
   
347,500
     
4,374
 
Kubota Corp.
   
333,000
     
2,929
 
Mitsubishi Corp.
   
191,800
     
4,551
 
Mitsubishi Gas Chemical Co., Inc.
   
935,000
     
5,647
 
Mitsubishi UFJ Financial Group, Inc.
   
3,125,200
     
16,260
 
Nintendo Co. Ltd.
   
11,400
     
3,831
 
Nomura Holdings, Inc.
   
1,102,100
     
7,603
 
Sankyo Co. Ltd.
   
171,900
     
7,901
 
Seven & I Holdings Co. Ltd.
   
224,200
     
5,725
 
Shin-Etsu Chemical Co. Ltd.
   
267,200
     
15,429
 
SMC Corp.
   
40,800
     
5,856
 
Sony Financial Holdings, Inc.
   
2,609
     
9,416
 
Sumitomo Corp.
   
502,000
     
6,075
 
Sumitomo Mitsui Financial Group, Inc.
   
139,400
     
4,599
 
Tokyo Electron Ltd.
   
91,900
     
6,075
 
Tokyo Gas Co. Ltd.
   
908,000
     
3,857
 
Tokyo Steel Manufacturing Co. Ltd.
   
432,100
     
5,814
 
Toyoda Gosei Co. Ltd.
   
139,100
     
3,820
 
Toyota Motor Corp.
   
388,500
     
15,004
 
Yahoo! Japan Corp.
   
10,630
     
4,062
 
Yamada Denki Co. Ltd.
   
65,480
     
5,093
 
Total Japan
           
227,271
 
                 
NETHERLANDS - 5.13%
               
COMMON STOCKS - 5.13%
               
Akzo Nobel N.V. †
   
219,225
     
12,886
 
Heineken N.V. †
   
56,100
     
2,604
 
ING Groep N.V.
   
704,470
     
6,306
 
Koninklijke Philips Electronics N.V.
   
308,897
     
10,438
 
Randstad Holding N.V. ^
   
55,060
     
2,807
 
Reed Elsevier N.V. †
   
950,052
     
11,279
 
SBM Offshore N.V.
   
265,765
     
5,267
 
TNT N.V. †
   
513,554
     
15,781
 
Unilever N.V., GDR
   
144,180
     
4,406
 
Total Netherlands
           
71,774
 
                 
NORWAY - 1.94%
               
COMMON STOCKS - 1.94%
               
Aker Solutions ASA
   
831,450
     
13,908
 
StatoilHydro ASA
   
170,440
     
4,115
 
Telenor ASA
   
640,840
     
9,156
 
Total Norway
           
27,179
 
                 
PORTUGAL - 0.54%
               
COMMON STOCKS - 0.54%
               
Portugal Telecom, SGPS, S.A. †
   
747,760
     
7,582
 
                 
SINGAPORE - 2.58%
               
COMMON STOCKS - 2.58%
               
DBS Group Holdings Ltd.
   
2,313,182
     
25,628
 
Singapore Telecommunications Ltd.
   
4,703,000
     
10,435
 
Total Singapore
           
36,063
 
                 
SOUTH KOREA - 2.15%
               
COMMON STOCKS - 2.15%
               
Hyundai Heavy Industries Co. Ltd.
   
57,700
     
13,007
 
Hyundai Mobis
   
19,500
     
3,238
 
KB Financial Group, Inc., ADR †
   
143,018
     
6,979
 
KT&G Corp.
   
75,564
     
3,811
 
Samsung Electronics Co. Ltd., GDR ‡
   
7,800
     
2,990
 
Total South Korea
           
30,025
 
                 
SPAIN - 3.60%
               
COMMON STOCKS - 3.60%
               
Amadeus IT Holdings S.A. ^
   
108,600
     
1,735
 
Banco Santander S.A.
   
1,199,374
     
15,017
 
Enagas S.A.
   
229,984
     
4,595
 
Gamesa Corp. Tecnologica S.A.
   
360,310
     
4,453
 
Grifols S.A.
   
401,920
     
5,063
 
Iberdrola S.A.
   
368,865
     
2,938
 
Repsol YPF S.A.
   
257,990
     
6,056
 
 
See accompanying notes
 
 
17
 
 
 
 

 

 
American Beacon International Equity Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Telefonica S.A.
   
467,503
   
$
10,499
 
Total Spain
           
50,356
 
               
SWEDEN - 1.60%
               
COMMON STOCKS - 1.60%
               
Atlas Copco AB †
   
265,000
     
4,310
 
Skandinaviska Enskilda Banken ^
   
1,107,383
     
7,629
 
Telefonaktiebolaget LM Ericsson
   
898,930
     
10,462
 
Total Sweden
           
22,401
 
               
SWITZERLAND - 8.14%
               
COMMON STOCKS - 8.14%
               
Adecco S.A.
   
130,550
     
7,703
 
Compagnie Financiere Richemont S.A.
   
134,407
     
4,969
 
Credit Suisse Group AG
   
134,300
     
6,144
 
Givaudan S.A.
   
7,174
     
6,245
 
Julius Baer Group Ltd.
   
53,000
     
1,830
 
Lonza Group AG
   
49,816
     
3,908
 
Nestle S.A.
   
162,878
     
7,949
 
Novartis AG
   
435,368
     
22,213
 
Roche Holding AG
   
131,213
     
20,740
 
Sulzer AG
   
32,317
     
3,209
 
Swiss Reinsurance Co. Ltd.
   
100,960
     
4,401
 
UBS AG
   
887,300
     
13,708
 
Zurich Financial Services AG
   
48,556
     
10,826
 
Total Switzerland
           
113,845
 
               
UNITED KINGDOM - 20.25%
               
COMMON STOCKS - 20.25%
               
Anglo American plc
   
182,744
     
7,827
 
Aviva plc
   
1,874,344
     
9,919
 
BAE Systems plc
   
2,071,389
     
10,888
 
Barclays Bank plc
   
863,600
     
4,422
 
BG Group plc
   
308,300
     
5,176
 
BHP Billiton plc
   
155,700
     
4,783
 
BP plc
   
1,773,030
     
15,446
 
British American Tobacco plc
   
280,840
     
8,826
 
British Sky Broadcasting Group plc
   
863,040
     
8,094
 
Centrica plc
   
800,305
     
3,587
 
GlaxoSmithKline plc
   
1,201,832
     
22,269
 
HSBC Holdings plc
   
1,089,996
     
11,217
 
HSBC Holdings plc †
   
1,508,926
     
15,372
 
Informa plc
   
837,593
     
5,085
 
International Power plc
   
597,900
     
3,021
 
Kingfisher plc
   
1,256,400
     
4,801
 
Lloyds Banking Group plc
   
4,600,244
     
4,600
 
Marks and Spencer Group plc
   
510,270
     
2,861
 
Michael Page International plc
   
685,409
     
4,484
 
Pearson plc
   
534,980
     
8,588
 
Prudential plc
   
459,100
     
4,071
 
Reed Elsevier plc
   
596,110
     
4,693
 
Rexam plc
   
1,097,099
     
5,392
 
Rio Tinto plc
   
89,515
     
4,515
 
Rolls-Royce Group plc C Shares Entitlement May 10 ^
   
132,627,600
     
203
 
Rolls-Royce Group plc
   
1,473,640
     
13,014
 
Royal Dutch Shell plc, A Shares
   
134,200
     
4,199
 
Royal Dutch Shell plc, A Shares †
   
356,178
     
11,178
 
Royal Dutch Shell plc, B Shares
   
454,373
     
13,711
 
Standard Chartered plc
   
328,990
     
8,769
 
Tesco plc
   
615,900
     
4,097
 
Unilever plc
   
426,551
     
12,778
 
Vodafone Group plc
   
11,458,837
     
25,484
 
WPP Group plc
   
352,600
     
3,749
 
Xstrata plc
   
370,100
     
6,129
 
Total United Kingdom
           
283,248
 
               
UNITED STATES - 0.71%
               
COMMON STOCKS - 0.71%
               
Flextronics International Ltd. ^
   
848,510
     
6,576
 
Transocean Ltd. ^
   
46,147
     
3,407
 
Total United States
           
9,983
 
               
SHORT TERM INVESTMENTS - 3.53%
               
American Beacon U.S. Government Money Market Select Fund #
   
956,093
     
956
 
JPMorgan U.S. Government Money Market Fund
   
48,432,185
     
48,432
 
Total Short Term Investments
           
49,388
 
               
SECURITIES LENDING COLLATERAL - 10.26%
               
American Beacon U.S. Government Money Market Select Fund #
   
136,550,764
     
136,551
 
Wells Fargo Advantage Government Money Market Fund
   
7,000,000
     
7,000
 
Total Securities Lending Collateral
           
143,551
 
               
TOTAL INVESTMENTS 108.72% — (Cost $1,403,909)
           
1,520,934
 
LIABILITIES, NET OF OTHER ASSETS — (8.72%)
           
(122,026
)
                 
TOTAL NET ASSETS - 100.00%
         
$
1,398,908
 
               
 
See accompanying notes
 
 
18
 
 
 
 

 

 
American Beacon International Equity Fund
Schedule of Investments
April 30, 2010 (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, 2010.
     
 
Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $2,990 or 0.21% of net assets. The Fund has no right to demand registration of these securities.
     
#
 
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)
 
Australia SPI Index
   
51
   
Jun 2010
 
$
5,719
   
$
(53
)
Canada S&PCDA 60 Index
   
51
   
Jun 2010
   
7,192
     
118
 
France CAC 40 Index
   
131
   
Jun 2010
   
6,466
     
(216
)
Germany DAX Index
   
24
   
Jun 2010
   
4,891
     
103
 
Hang Seng Index
   
12
   
May 2010
   
1,614
     
(18
)
Italy MIB 30 Index
   
15
   
Jun 2010
   
2,109
     
(130
)
Netherlands 200 AEX Index
   
20
   
May 2010
   
1,827
     
(42
)
Spain IBEX 35 Index
   
18
   
May 2010
   
2,473
     
(228
)
Sweden OMX Index
   
136
   
May 2010
   
1,971
     
36
 
Tokyo FE TOPIX Index
   
133
   
Jun 2010
   
13,907
     
568
 
UK FTSE 100 Index
   
153
   
Jun 2010
   
12,898
     
(200
)
               
$
61,067
   
$
(62
)
 
Forward Foreign Currency Exchange Contracts
(dollars in thousands)
 
                             
               
 
   
Unrealized
 
           
Settlement
Date
 
Market
Value
   
Gain/(Loss)
 
Contracts To Receive
                   
 
5,139
   
Australian Dollar
 
6/18/2010
 
$
4,730
   
$
66
 
 
6,055
   
Canadian Dollar
 
6/18/2010
   
5,961
     
35
 
 
11,057
   
Euro Currency
 
6/18/2010
   
14,724
     
(359
)
 
1,106,319
   
Japanese Yen
 
6/18/2010
   
11,782
     
(392
)
 
7,458
   
Pound Sterling
 
6/18/2010
   
11,409
     
170
 
 
10,604
   
Swedish Krona
 
6/18/2010
   
1,464
     
(25
)
 
5,050
   
Swiss Franc
 
6/18/2010
   
4,695
     
(32
)
Total contracts to receive
(Payable amount $55,302)
     
$
54,765
   
$
(537
)
Net Currency Fluctuation
             
$
(537
)
 
See accompanying notes
 
 
19
 
 
 
 

 

 
American Beacon International Equity Fund
Schedule of Investments
April 30, 2010 (Unaudited)
Sector Diversification
 
         
   
Percent of
   
Net Assets
Consumer Discretionary
   
13.77
%
Consumer Staples
   
4.85
%
Energy
   
8.37
%
Financials
   
19.78
%
Health Care
   
8.53
%
Industrials
   
15.70
%
Information Technology
   
4.75
%
Materials
   
8.55
%
Telecommunication Services
   
7.23
%
Utilities
   
3.40
%
Short Term Investments
   
13.79
%
Liabilities, Net of Other Assets
   
(8.72
)%
     
100.00
%
         
 
See accompanying notes
 
 
20
 
 

 
 

 
 
 
American Beacon Funds
Statements of Assets and Liabilities
April 30, 2010 (Unaudited) (in thousands, except share and per share amounts)
 
                 
   
Emerging
       
   
Markets
   
International
 
   
Fund
   
Equity Fund
 
Assets:
               
Investments in unaffiliated securities, at value A D
 
$
139,844
   
$
1,383,427
 
Investments in affiliated securities, at value B
   
     
137,507
 
Foreign currency, at value C
   
1,202
     
5,950
 
Deposit with brokers for futures contracts
   
     
6,086
 
Receivable for investments sold
   
979
     
18,181
 
Dividends and interest receivable
   
411
     
5,206
 
Receivable for fund shares sold
   
158
     
3,229
 
Receivable for tax reclaims
   
6
     
701
 
Receivable for expense reimbursement
   
2
     
 
Prepaid expenses
   
28
     
70
 
Total assets
   
142,630
     
1,560,357
 
             
Liabilities:
               
Payable for investments purchased
   
1,109
     
14,509
 
Payable upon return of securities loaned
   
     
143,551
 
Payable for fund shares redeemed
   
36
     
663
 
Payable for variation margin on open futures contracts
   
99
     
141
 
Management and investment advisory fees payable (Note 2)
   
335
     
1,409
 
Administrative service and service fees payable
   
12
     
389
 
Net unrealized depreciation on foreign currency contracts
   
     
538
 
Professional fees payable
   
11
     
18
 
Trustee fees payable
   
1
     
27
 
Prospectus and shareholder reports
   
7
     
175
 
Other liabilities
   
16
     
29
 
Total liabilities
   
1,626
     
161,449
 
Net Assets
 
$
141,004
   
$
1,398,908
 
             
Analysis of Net Assets:
               
Paid-in-capital
   
132,868
     
1,497,387
 
Undistributed net investment income
   
(452
)
   
9,868
 
Accumulated net realized (loss)
   
(20,678
)
   
(224,556
)
Unrealized appreciation of investments, futures contracts, and foreign currency
   
29,266
     
116,209
 
Net assets
 
$
141,004
   
$
1,398,908
 
             
Shares outstanding (no par value):
               
Institutional Class
   
795,876
     
32,239,231
 
Y Class
   
81
     
67
 
Investor Class
   
923,678
     
28,609,745
 
Advisor Class
   
N/A
     
42,012
 
Retirement Class
   
N/A
     
85
 
AMR Class
   
8,957,873
     
28,124,097
 
Net asset value, offering and redemption price per share:
               
Institutional Class
 
$
13.17
   
$
15.75
 
Y Class
 
$
13.16
   
$
16.25
 
Investor Class
 
$
12.96
   
$
15.55
 
Advisor Class
   
N/A
   
$
15.87
 
Retirement Class
   
N/A
   
$
15.86
 
AMR Class
 
$
13.23
   
$
15.84
 
                 
A Cost of investments in unaffiliated securities
 
$
110,680
   
$
1,266,402
 
B Cost of investments in affiliated securities
 
$
   
$
137,507
 
C Cost of foreign currency
 
$
1,195
   
$
5,935
 
D Market value of securities on loan
 
$
   
$
136,601
 
 
See accompanying notes
 
 
21
 
 
 
 

 

 
American Beacon Funds
Statements of Operations
Six Months Ended April 30, 2010 (Unaudited) (in thousands)
 
                 
   
Emerging
       
   
Markets
   
International
 
   
Fund
   
Equity Fund
 
Investment Income:
               
Dividend income from unaffiliated securities (net of foreign taxes) A
 
$
1,229
   
$
17,928
 
Dividend income from affiliated securities
   
     
1
 
Interest income
   
1
     
6
 
Income derived from securities lending, net
   
     
232
 
Total investment income
   
1,230
     
18,167
 
             
Expenses:
               
Management and investment advisory fees (Note 2)
   
528
     
2,214
 
Administrative service fees (Note 2):
               
Institutional Class
   
15
     
756
 
Investor Class
   
17
     
678
 
Advisor Class
   
     
1
 
AMR Class
   
29
     
110
 
Transfer agent fees:
               
Institutional Class
   
     
17
 
Investor Class
   
2
     
18
 
AMR Class
   
2
     
14
 
Custody and fund accounting fees
   
228
     
226
 
Professional fees
   
15
     
37
 
Registration fees and expenses
   
14
     
47
 
Service fees (Note 2):
               
Investor Class
   
14
     
810
 
Advisor Class
   
     
1
 
Distribution fees- Advisor Class (Note 2)
   
     
1
 
Prospectus and shareholder reports
   
3
     
110
 
Trustee fees
   
4
     
51
 
Other expenses
   
12
     
86
 
Total expenses
   
883
     
5,177
 
Net (fees waived and expenses reimbursed)/recouped by Manager (Note 2)
   
(3
)
   
 
Net expenses
   
880
     
5,177
 
Net investment income
   
350
     
12,990
 
Realized and unrealized gain (loss) on investments:
               
Net realized gain (loss) from:
               
Investments
   
9,709
     
23,966
 
Commission recapture (Note 1)
   
     
26
 
Foreign currency transactions
   
315
     
3,445
 
Futures contracts
   
663
     
2,925
 
Change in net unrealized appreciation or depreciation of:
               
Investments
   
1,260
     
107,434
 
Foreign currency translations
   
2,425
     
(88,161
)
Futures contracts
   
210
     
1,171
 
Net gain on investments
   
14,582
     
50,806
 
Net increase in net assets resulting from operations
 
$
14,932
   
$
63,796
 
A Foreign taxes
 
$
130
   
$
1,625
 
 
See accompanying notes
 
 
22
 
 
 
 

 

 
American Beacon Funds
Statements of Changes in Net Assets (in thousands)
 
                                 
   
Emerging Markets Fund
   
International Equity Fund
 
   
 
   
Year
   
 
   
 
 
   
Six Months
Ended
   
Ended
October
   
Six Months
Ended
   
 
Year Ended
 
   
April 30,
2010
    31,
2009
   
April 30, 2010
   
October 31,
2009
 
   
(unaudited)
           
(unaudited)
         
Increase (Decrease) in Net Assets:
                               
Operations:
                               
Net investment income
 
$
350
   
$
1,224
   
$
12,990
   
$
32,804
 
Net realized gain (loss) on investments, futures contracts, and foreign currency transactions
   
10,687
     
(19,055
)
   
30,362
     
(244,402
)
Change in net unrealized appreciation or depreciation of investments, futures contracts, and foreign currency translations
   
3,895
     
67,385
     
20,444
     
498,561
 
Net increase in net assets resulting from operations
   
14,932
     
49,554
     
63,796
     
286,963
 
Distributions to Shareholders:
                               
Net investment income:
                               
Institutional Class
   
(130
)
   
(129
)
   
(15,298
)
   
(22,416
)
Investor Class
   
(131
)
   
(93
)
   
(12,702
)
   
(17,116
)
Advisor Class
   
     
     
     
(61
)
AMR Class
   
(1,717
)
   
(2,146
)
   
(14,360
)
   
(17,313
)
Net realized gain on investments:
                               
Institutional Class
   
     
(798
)
   
     
(12,166
)
Investor Class
   
     
(756
)
   
     
(10,088
)
Advisor Class
   
     
     
     
(40
)
AMR Class
   
     
(11,268
)
   
     
(8,489
)
Net distributions to shareholders
   
(1,978
)
   
(15,190
)
   
(42,360
)
   
(87,689
)
Capital Share Transactions:
                               
Proceeds from sales of shares
   
9,319
     
21,046
     
120,375
     
264,266
 
Reinvestment of dividends and distributions
   
1,969
     
15,153
     
39,420
     
81,731
 
Cost of shares redeemed
   
(12,941
)
   
(24,071
)
   
(151,084
)
   
(500,348
)
Redemption fees
   
16
     
18
     
105
     
217
 
Net increase (decrease) in net assets from capital share transactions
   
(1,637
)
   
12,146
     
8,816
     
(154,134
)
Net increase in net assets
   
11,317
     
46,510
     
30,252
     
45,140
 
Net Assets:
                               
Beginning of period
   
129,687
     
83,177
     
1,368,656
     
1,323,516
 
End of Period *
 
$
141,004
   
$
129,687
   
$
1,398,908
   
$
1,368,656
 
*Includes undistributed net investment income (loss) of
 
$
(452
)
 
$
1,183
   
$
9,868
   
$
41,027
 
 
See accompanying notes
 
 
23
 
 
 
 

 

 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (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 Markets and International Equity Funds (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
 
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 $250,000
Y Class
 
Investors making an initial investment of $100,000
Investor Class
 
General public and investors investing through an intermediary
Advisor Class
 
Investors investing through an intermediary
Retirement Class
 
Investors investing through an intermediary
AMR Class
 
Investors in the tax-exempt retirement and benefit plans of the Manager, 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”).
 
 
24
 
 
 
 

 

 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (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. Of the total investments at April 30, 2010, for the Emerging Markets and International Equity Funds $91,816 or 65.1% and $1,062,397 or 75.9%, respectively, were valued at fair value based on procedures established by the Board.
 
Valuation Inputs
 
Various inputs may be used to determine the value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
 
Level 1 — Quoted prices in active markets for identical securities.
 
Level 2 — Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
 
Level 3 — Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.
 
The Funds’ investments are summarized by level based on the inputs used to determine their values. As of April 30, 2010 the Funds’ investments were classified as follows: (in thousands)
 
                                 
Emerging Markets
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Preferred Stocks
 
$
3,092
   
$
312
   
$
   
$
3,404
 
Common Stocks
   
40,779
     
91,504
     
     
132,283
 
Short Term Investments
   
3,552
     
605
     
     
4,157
 
Total Investments in Securities
 
$
47,423
   
$
92,421
   
$
   
$
139,844
 
Futures Contracts
   
5,207
     
     
     
5,207
 
 
 
                                 
International Equity
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Preferred Stocks
 
$
   
$
   
$
   
$
 
Common Stocks
   
265,598
     
1,062,397
     
     
1,327,995
 
Short Term Investments
   
49,388
     
     
     
49,388
 
Securities Lending Collateral
   
143,551
     
     
     
143,551
 
Total Investments in Securities
 
$
458,537
   
$
1,062,397
   
$
   
$
1,520,934
 
Forward Exchange Contracts — Liabilities
   
(54,765
)
   
     
     
(54,765
)
Futures Contracts
   
61,067
     
     
     
61,067
 
 
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.
 
 
25
 
 
 

 
 

American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
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 the Funds’ securities denominated in foreign currencies. Forward foreign currency contracts are valued at the forward exchange rate prevailing on the day of valuation. The Funds 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.
 
Emerging MarketsValues of Derivative Instruments not accounted for as hedging instruments as of April 30, 2010 (in thousands)

 
             
   
 
Liability
   
Fair Value
Statement of Assets and Liabilities
 
Derivatives
 
$92
Unrealized appreciation of investments, futures contracts, and foreign currency
 
Equity Contracts*
 
 
 
 
 
Effect of derivative instruments not accounted for as hedging instruments during the year ended April 30, 2010 (in thousands)
 
             
Statement of Operations
 
Derivative
 
Fair Value
Net realized gain (loss) from futures contracts
 
Equity Contracts
 
$
663
 
Change in net unrealized appreciation or depreciation of futures contracts
 
Equity Contracts
   
210
 
 
26
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
International EquityValues of Derivative Instruments not accounted for as hedging instruments as of April 30, 2010 (in thousands)
 
             
Statement of Assets and Liabilities
 
Asset Derivatives
 
Fair Value
Net unrealized appreciation on foreign currency contracts
 
Foreign Exchange
Currency Contracts
 
$
(537
)
Unrealized appreciation of investments, futures contracts, and foreign currency
 
Equity Contracts*
   
62
 
 
Effect of derivative instruments not accounted for as hedging instruments during the year ended April 30, 2010 (in thousands)
 
             
Statement of Operations
 
Derivative
 
Fair Value
Net realized gain (loss) from futures contracts
 
Equity Contracts
 
$
2,925
 
Change in net unrealized appreciation or depreciation of futures contracts
 
Equity Contracts
   
1,171
 
 
 
     
*
 
Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
 
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.
 
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
 
 
27
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
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 investment advisory and portfolio 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, 2010 were as follows (dollars in thousands):
 
                                 
                   
 
Amounts
 
 
   
 
Management
 
 
Management
 
paid to
Investment
 
Net Amounts
Retained by
   
Fee Rate
 
Fee
 
Advisors
 
Manager
Emerging Markets
   
0.60%-0.95
%
 
$
528
   
$
494
   
$
34
 
International Equity
   
0.20%-0.55
%
 
$
2,214
   
$
1,865
   
$
349
 
 
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, 2010 securities lending fees paid to the Manager on behalf of the International Equity Fund were $56,123.
 
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, Y, Investor, Advisor, and Retirement Classes of the Funds and 0.05% of the average daily net assets of the AMR Class of the Funds.
 
Distribution Plans
 
The Funds, except for the Advisor and Retirement Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no 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 and Retirement Classes 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 and 0.50% of the average daily net assets of the Retirement 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.
 
 
28
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
Service Plans
 
The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, Advisor and Retirement Classes. As compensation for performing the duties required under the Service Plans, the Manager receives 0.10% of the average daily net assets of the Y Class, 0.25% of the average daily net assets of the Advisor and Retirement Classes and up to 0.375% of the average daily net assets of the Investor Class 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 $1,442 and $389 for the Emerging Markets and International Equity Funds, respectively for the six months ended April 30, 2010.
 
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, 2010, 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
International Equity Fund
 
$
1,071
   
$
14,004
   
$
15,076
 
 
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, 2010, the Funds did not utilize the credit facility.
 
Reimbursement of Expenses
 
The Manager contractually agreed to reimburse the Emerging Markets Fund to the extent that total annual operating expenses exceeded the Fund’s expense cap. For the six months ended April 30, 2010, the Manager reimbursed expenses as follows:
 
                             
   
Expense Cap
       
11/1/09
 
3/1/10
 
Waived or
       
to
 
to
 
Reimbursed
Fund
 
Class
 
2/28/10
 
4/30/10
 
Expenses
Emerging Markets
 
Institutional
   
     
1.35
%
 
$
3,142
 
Emerging Markets
 
Y
   
     
1.45
%
   
 
Emerging Markets
 
Investor
   
     
1.79
%
   
220
 
 
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
 
 
29
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
six months ended April 30, 2010, 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 Funds do not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2009 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, 2010 and the year ended October 31, 2009 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,
 
   
2010
   
2009
   
2010
   
2009
 
   
(unaudited)
           
(unaudited)
         
Distributions paid from:
                               
Ordinary income*
                               
Institutional Class
 
$
130
   
$
129
   
$
15,298
   
$
22,114
 
Investor Class
   
131
     
93
     
12,702
     
17,999
 
Advisor Class
   
     
     
     
66
 
AMR Class
   
1,717
     
2,146
     
14,360
     
17,924
 
Long-term capital gain
                               
Institutional Class
   
     
798
     
     
10,468
 
Investor Class
   
     
756
     
     
9,205
 
Advisor Class
   
     
     
     
35
 
AMR Class
   
     
11,268
     
     
7,878
 
Total distributions paid
 
$
1,978
   
$
15,190
   
$
42,360
   
$
87,689
 
 
 
     
*
 
For tax purposes, short-term capital gains are considered ordinary income distributions.
 
As of April 30, 2010, 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
 
$
127,667
   
$
1,442,865
 
Unrealized appreciation
   
25,393
     
201,619
 
Unrealized depreciation
   
(7,216
)
   
(123,550
)
             
Net unrealized appreciation
   
18,177
     
78,069
 
                 
Undistributed ordinary income
   
297
     
15,907
 
Undistributed long-term gain
   
(10,439
)
   
(195,339
)
Other temporary differences
   
101
     
2,884
 
Distributable earnings
 
$
8,136
   
$
(98,479
)
 
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
 
 
30
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
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.
 
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, 2010 (in thousands):
 
                 
   
Emerging
 
International
   
Markets
 
Equity
Paid-in-capital
 
$
   
$
419
 
Undistributed net investment income
   
(7
)
   
(1,789
)
Accumulated net realized gain (loss)
   
6
     
1,369
 
Unrealized depreciation of investments, futures contracts and foreign currency
   
1
     
1
 
 
At April 30, 2010, the capital loss carry forward position for federal income tax purposes was $10,348 and $195,403 for the Emerging Markets and International Equity Funds, respectively, both expiring in 2017.
 
The Emerging Markets and International Equity Funds utilized $7,658 and $29,318, respectively of net capital loss carryovers for the six months ended April 30, 2010.
 
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, 2010 were (in thousands):
 
                 
   
Emerging
 
International
   
Markets
 
Equity
Purchases
 
$
41,656
   
$
268,872
 
Sales and maturities
 
$
43,511
   
$
301,223
 
 
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, 2009
                 
 
April 30, 2010
   
 
Affiliated Fund
 
Shares/Market Value
 
 
Purchases
 
 
Sales
 
Shares/Market Value
International Equity
 
USG Select Fund
 
$
3,956
     
   
$
3,000-
   
$
956
 
 
5. Securities Lending
 
 
The International Equity Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned and initially in an amount at least equal to 102% of the fair value of domestic securities loaned 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 collate ral.
 
 
31
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
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 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, 2010, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):
 
         
Market Value of
       
Securities on Loan
 
Non-Cash Collateral
 
Cash Collateral Posted by Borrower
$ 136,601
 
$ —
 
$ 110,970
 
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, 2010
 
                                                                 
   
Institutional Class
   
Y Class
   
Investor Class
   
AMR Class
 
Emerging Markets Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
45
   
$
562
     
   
$
1
     
233
   
$
2,942
     
448
   
$
5,814
 
Reinvestment of dividends
   
10
     
125
     
     
     
10
     
127
     
137
     
1,717
 
Shares redeemed
   
(53
)
   
(716
)*
   
     
*
   
(187
)
   
(2,362
)*
   
(775
)
   
(9,847
)*
Net increase (decrease) in shares outstanding
   
2
   
$
(29
)
   
   
$
1
     
56
   
$
707
     
(190
)
 
$
(2,316
)
 
32
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
International Equity Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
2,577
   
$
40,931
     
   
$
     
3,435
   
$
53,705
 
Reinvestment of dividends
   
802
     
12,580
     
     
     
806
     
12,480
 
Shares redeemed
   
(2,716
)
   
(43,147
)*
   
     
*
   
(4,756
)
   
(74,569
)*
Net increase (decrease) in shares outstanding
   
663
   
$
10,364
     
   
$
     
(515
)
 
$
(8,384
)
 

 
                                                 
   
Advisor Class
   
Retirement Class
   
AMR Class
 
International Equity Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
3
   
$
46
     
   
$
     
1,602
   
$
25,693
 
Reinvestment of dividends
   
     
     
     
     
912
     
14,360
 
Shares redeemed
   
(74
)
   
(1,205
)*
   
     
*
   
(2,031
)
   
(32,058
)*
Net increase (decrease) in shares outstanding
   
(71
)
 
$
(1,159
)
   
   
$
     
483
   
$
7,995
 
 
Year Ended October 31, 2009
 
                                                 
   
Institutional Class
   
Investor Class
   
AMR Class
 
Emerging Markets Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
119
   
$
1,207
     
355
   
$
3,717
     
1,767
   
$
16,122
 
Reinvestment of dividends
   
126
     
917
     
114
     
822
     
1,832
     
13,414
 
Shares redeemed
   
(59
)
   
(672
)*
   
(187
)
   
(1,654
)*
   
(2,458
)
   
(21,727
)*
Net increase in shares outstanding
   
186
   
$
1,452
     
282
   
$
2,885
     
1,141
   
$
7,809
 
 

 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
International Equity Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
7,840
   
$
100,116
     
   
$
1
     
7,880
   
$
99,626
 
Reinvestment of dividends
   
2,451
     
29,191
     
     
     
2,263
     
26,656
 
Shares redeemed
   
(21,920
)
   
(270,772
)*
   
     
*
   
(13,941
)
   
(175,030
)*
Net increase (decrease) in shares outstanding
   
(11,629
)
 
$
(141,465
)
   
   
$
1
     
(3,798
)
 
$
(48,748
)
 

 
                                                 
   
Advisor Class
   
Retirement Class
   
AMR Class
 
International Equity Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
21
   
$
262
     
   
$
1
     
4,956
   
$
64,260
 
Reinvestment of dividends
   
7
     
82
     
     
     
2,157
     
25,802
 
Shares redeemed
   
(35
)
   
(464
)*
   
     
*
   
(4,240
)
   
(53,865
)*
Net increase (decrease) in shares outstanding
   
(7
)
 
$
(120
)
   
   
$
1
     
2,873
   
$
36,197
 
 
 
     
*
 
Net of Redemption Fees
 
7. Subsequent Events
 
Management has evaluated the possibility of subsequent events existing in the Funds’ financial statements. Management has determined that there are no material events that would require disclosure in the Funds’ financial statements.
 
 
33
 
 
 

 
 
American Beacon Emerging Markets Fund
Financial Highlights
(For a share outstanding throughout the period)
 
                                                                 
   
 
Institutional Class
   
 
Y Class
   
Investor Class
 
   
Six
                                           
 
       
   
Months
                                           
March
   
Six Months
 
   
Ended
April 30,
   
 
Year Ended October 31,
   
01 to
April 30,
   
Ended April
 
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
   
2010
   
30, 2010
 
   
(unaudited)
                                           
(unaudited)
   
(unaudited)
 
Net asset value, beginning of period
 
$
11.95
   
$
9.00
   
$
24.20
   
$
17.42
   
$
15.10
   
$
12.64
   
$
12.29
   
$
11.77
 
                                                 
Income from investment operations:
                                                               
Net investment income
   
0.03
     
0.05
     
0.23
     
0.26
     
0.11
     
0.15
     
0.03
     
0.01
 
Net gains (losses) on securities (both realized and unrealized)
   
1.35
     
4.42
     
(11.78
)
   
9.11
     
4.63
     
3.45
     
0.84
     
1.33
 
                                                 
Total income (loss) from investment operations
   
1.38
     
4.47
     
(11.55
)
   
9.37
     
4.74
     
3.60
     
0.87
     
1.34
 
                                                 
Less distributions:
                                                               
Dividends from net investment income
   
(0.16
)
   
(0.21
)
   
(0.10
)
   
(0.10
)
   
(0.21
)
   
(0.06
)
   
     
(0.15
)
Distributions from net realized gains on securities
   
     
(1.31
)
   
(3.55
)
   
(2.49
)
   
(2.21
)
   
(1.08
)
   
     
 
                                                 
Total distributions
   
(0.16
)
   
(1.52
)
   
(3.65
)
   
(2.59
)
   
(2.42
)
   
(1.14
)
   
     
(0.15
)
                                                 
Redemption fees added to beneficial interestsA
   
     
     
     
     
     
     
     
 
Net asset value, end of period
 
$
13.17
   
$
11.95
   
$
9.00
   
$
24.20
   
$
17.42
   
$
15.10
   
$
13.16
   
$
12.96
 
                                                 
Total returnE
   
11.66
%B
   
60.56
%
   
(55.59
)%
   
60.83
%
   
34.58
%
   
30.03
%
   
7 .08
%B
   
11.42
%B
                                                 
Ratios and supplemental data:
                                                               
Net assets, end of period (in thousands)
 
$
10,481
   
$
9,494
   
$
5,478
   
$
13,773
   
$
16,552
   
$
9,348
   
$
1
   
$
11,970
 
Ratios to average net assets (annualized):
                                                               
Expenses, net of waivers
   
1.42
%
   
1.66
%
   
1.38
%
   
1.60
%
   
1.56
%
   
1.52
%
   
1.51
%C
   
1.76
%
Expenses, before waivers
   
1.48
%
   
1.66
%
   
1.38
%
   
1.60
%
   
1.56
%
   
1.52
%
   
1.51
%C
   
1.76
%
Net investment income, net of waivers
   
0.38
%
   
0.95
%
   
1.35
%
   
0.93
%
   
0.80
%
   
1.22
%
   
1.39
%C
   
0.07
%
Net investment income, before waivers
   
0.32
%
   
0.95
%
   
1.35
%
   
0.93
%
   
0.80
%
   
1.22
%
   
1.39
%C
   
0.07
%
Portfolio turnover rate
   
32
%B
   
70
%
   
82
%
   
81
%
   
67
%
   
63
%
   
32
%B,D
   
32
%B

 
     
A
 
Amounts represent less than $0.01 per share.
     
B
 
Not annualized.
     
C
 
Annualized.
     
D
 
Portfolio turnover rate is for the period from November 1, 2009 through April 30, 2010.
     
E
 
May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net assets values may differ from the net asset value and returns for shareholder transactions.
 
34
 
 
 
 

 

 
 
                                                                                         
                                           
AMR Class
 
                                           
Six
       
                                           
Months
       
                                           
Ended
       
   
Year Ended October 31,
   
April 30,
   
Year Ended October 31,
 
   
2009
   
2008
   
2007
   
2006
   
2005
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
                                           
(unaudited)
                                         
 
 
 
$
8.85
   
$
23.91
   
$
17.22
   
$
14.98
   
$
12.53
   
$
12.02
   
$
9.06
   
$
24.37
   
$
17.52
   
$
15.17
   
$
12.68
 
                                                                   
 
 
                                                                                       
 
 
   
0.04
     
0.17
     
0.11
     
0.09
     
0.15
     
0.04
     
0.09
     
0.33
     
0.19
     
0.15
     
0.24
 
 
 
 
 
   
4.35
     
(11.60
)
   
9.11
     
4.55
     
3.41
     
1.36
     
4.43
     
(11.91
)
   
9.30
     
4.65
     
3.42
 
                                                                   
 
 
   
4.39
     
(11.43
)
   
9.22
     
4.64
     
3.56
     
1.40
     
4.52
     
(11.58
)
   
9.49
     
4.80
     
3.66
 
                                                                   
                                                                                         
 
 
   
(0.16
)
   
(0.08
)
   
(0.04
)
   
(0.19
)
   
(0.03
)
   
(0.19
)
   
(0.25
)
   
(0.18
)
   
(0.15
)
   
(0.24
)
   
(0.09
)
 
 
 
   
(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
)
   
(0.19
)
   
(1.56
)
   
(3.73
)
   
(2.64
)
   
(2.45
)
   
(1.17
)
                                                                   
 
 
   
     
     
     
     
     
     
     
     
     
     
 
 
 
 
$
11.77
   
$
8.85
   
$
23.91
   
$
17.22
   
$
14.98
   
$
13.23
   
$
12.02
   
$
9.06
   
$
24.37
   
$
17.52
   
$
15.17
 
                                                                   
     
60.24
%
   
(55.75
)%
   
60.38
%
   
34.01
%
   
29.86
%
   
11.73
%B
   
61.01
%
   
(55.48
)%
   
61.28
%
   
34.88
%
   
30.45
%
                                                                   
 
 
                                                                                       
 
 
 
 
$
10,208
   
$
5,183
   
$
11,694
   
$
5,841
   
$
2,592
   
$
118,552
   
$
109,985
   
$
72,516
   
$
271,726
   
$
135,146
   
$
94,864
 
 
 
                                                                                       
 
 
   
1 .96
%
   
1.72
%
   
1.96
%
   
2.04
%
   
1.75
%
   
1.23
%
   
1.42
%
   
1.17
%
   
1.37
%
   
1.30
%
   
1.25
%
 
 
   
1.96
%
   
1.72
%
   
1.96
%
   
1.91
%
   
2.01
%
   
1.23
%
   
1.42
%
   
1.17
%
   
1.37
%
   
1.30
%
   
1.25
%
 
 
 
   
0.65
%
   
1.00
%
   
0.65
%
   
0.49
%
   
1.16
%
   
0.57
%
   
1.27
%
   
1.46
%
   
1.25
%
   
1.01
%
   
1.60
%
 
 
 
   
0.65
%
   
1.00
%
   
0.65
%
   
0.62
%
   
0.90
%
   
0.57
%
   
1.27
%
   
1.46
%
   
1.25
%
   
1.01
%
   
1.60
%
     
70
%
   
82
%
   
81
%
   
67
%
   
63
%
   
32
%B
   
70
%
   
82
%
   
81
%
   
67
%
   
63
%
 
35
 
 
 
 
 

 
 
American Beacon International Equity Fund
Financial Highlights
(For a share outstanding throughout the period)

 
                                                         
   
Institutional Class
   
Y Class
 
   
Six
                                           
Six
 
   
Months
                                           
Months
 
   
Ended
                                           
Ended
 
   
April 30,
   
Year Ended October 31,
   
April 30,
 
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
   
2010
 
   
(unaudited)
                                           
(unaudited)
 
Net asset value, beginning of period
 
$
15.51
   
$
13.13
   
$
27.32
   
$
24.68
   
$
20.98
   
$
18.47
   
$
15.52
 
                                           
Income from investment operations:
                                                       
Net investment incomeA,B
   
0.15
     
0.54
     
0.77
     
0.65
     
0.60
     
0.44
     
0.15
 
Net gains (losses) on securities (both realized and unrealized)A
   
0.58
     
2.78
     
(11.60
)
   
4.31
     
4.86
     
2.31
     
0.58
 
                                           
Total income (loss) from investment operations
   
0.73
     
3.32
     
(10.83
)
   
4.96
     
5.46
     
2.75
     
0.73
 
                                           
Less distributions:
                                                       
Dividends from net investment income
   
(0.49
)
   
(0.61
)
   
(0.70
)
   
(0.50
)
   
(0.43
)
   
(0.24
)
   
 
Distributions from net realized gains on securities
   
     
(0.33
)
   
(2.66
)
   
(1.82
)
   
(1.33
)
   
     
 
                                           
Total distributions
   
(0.49
)
   
(0.94
)
   
(3.36
)
   
(2.32
)
   
(1.76
)
   
(0.24
)
   
 
                                           
Redemption fees added to beneficial interestC
   
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
 
                                           
Net asset value, end of period
 
$
15.75
   
$
15.51
   
$
13.13
   
$
27.32
   
$
24.68
   
$
20.98
   
$
16.25
 
                                           
Total returnG
   
4 .69
%D
   
27.44
%
   
(44.81
)%
   
21.54
%
   
27.55
%
   
14.99
%
   
4.70
%D
                                           
Ratios and supplemental data:
                                                       
Net assets, end of period (in thousands)
 
$
507,896
   
$
489,837
   
$
567,414
   
$
1,686,668
   
$
1,549,521
   
$
1,286,441
   
$
1
 
Ratios to average net assets (annualized):
                                                       
Expenses, net of waiversA
   
0.70
%
   
0.73
%
   
0.66
%
   
0.67
%
   
0.71
%
   
0.70
%
   
0.71
%
Expenses, before waiversA
   
0.70
%
   
0.73
%
   
0.66
%
   
0.67
%
   
0.71
%
   
0.70
%
   
0.86
%
Net investment income, net of waiversA
   
1.90
%
   
2.76
%
   
2.91
%
   
2.46
%
   
2.52
%
   
2.17
%
   
1.91
%
Net investment income (loss), before waiversA
   
1.90
%
   
2.76
%
   
2.91
%
   
2.46
%
   
2.52
%
   
2.17
%
   
1.76
%
Portfolio turnover rateE
   
20
%D
   
41
%
   
31
%
   
38
%
   
40
%
   
37
%
   
20
%D
 

 
     
A
 
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.
     
B
 
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.
     
C
 
Amounts represent less than $0.01 per share.
     
D
 
Not annualized.
     
E
 
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.
     
F
 
Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.
     
G
 
May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net assets values may differ from the net asset value and returns for shareholder transactions.
     
H
 
Annualized.
 
36
 
 
 

 
 

                                                         
           
Investor Class
 
           
Six
       
   
August
   
Months
       
   
3 to
   
Ended
       
   
October
   
April 30,
   
Year Ended October 31,
 
   
31, 2009
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
           
(unaudited)
                                         
 
 
 
$
14.89
   
$
15.30
   
$
12.95
   
$
26.99
   
$
24.42
   
$
20.79
   
$
18.31
 
                                           
 
 
                                                       
     
0.04
     
0.12
     
0.37
     
0.66
     
0.58
     
0.50
     
0.41
 
 
 
 
 
   
0.59
     
0.57
     
2.87
     
(11.41
)
   
4.26
     
4.84
     
2.29
 
                                           
 
 
   
0.63
     
0.69
     
3.24
     
(10.75
)
   
4.84
     
5.34
     
2.70
 
                                           
                                                         
 
 
   
     
(0.44
)
   
(0.56
)
   
(0.63
)
   
(0.45
)
   
(0.38
)
   
(0.22
)
 
 
 
   
     
     
(0.33
)
   
(2.66
)
   
(1.82
)
   
(1.33
)
   
 
                                           
     
     
(0.44
)
   
(0.89
)
   
(3.29
)
   
(2.27
)
   
(1.71
)
   
(0.22
)
                                           
 
 
   
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
 
                                           
 
 
 
$
15.52
   
$
15.55
   
$
15.30
   
$
12.95
   
$
26.99
   
$
24.42
   
$
20.79
 
                                           
     
4.23
%D
   
4.52
%D
   
27.08
%
   
(44.96
)%
   
21.22
%
   
27.20
%
   
14.80
%
                                           
 
 
                                                       
 
 
 
$
1
   
$
444,863
   
$
445,596
   
$
426,473
   
$
909,385
   
$
771,298
   
$
560,770
 
 
 
                                                       
 
 
   
0.69
%H
   
1.06
%
   
1.05
%
   
0.92
%
   
0.93
%
   
0.96
%
   
0.95
%
 
 
   
0.69
%H
   
1.06
%
   
1.05
%
   
0.92
%
   
0.93
%
   
0.96
%
   
0.95
%
 
 
   
1.00
%H
   
1.53
%
   
2.45
%
   
2.82
%
   
2.26
%
   
2.25
%
   
1.96
%
 
 
   
1.00
%H
   
1.53
%
   
2.45
%
   
2.82
%
   
2.26
%
   
2.25
%
   
1.96
%
     
41
%F
   
20
%D
   
41
%
   
31
%
   
38
%
   
40
%
   
37
%
 
37
 
 
 
 

 

 
American Beacon International Equity Fund
Financial Highlights
(For a share outstanding throughout the period)

 
                                                 
   
Advisor Class
 
   
Six
       
   
Months
       
   
Ended
       
   
April 30,
   
Year Ended October 31,
 
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
   
(unaudited)
                                         
Net asset value, beginning of period
 
$
15.20
   
$
12.86
   
$
26.83
   
$
24.24
   
$
20.61
   
$
18.24
 
                                     
Income from investment operations:
                                               
Net investment income A,B
   
0.82
     
0.31
     
0.62
     
0.56
     
0.46
     
0.37
 
Net gains (losses) on securities
(both realized and unrealized) A
   
(0.15
)
   
2.86
     
(11.35
)
   
4.20
     
4.76
     
2.26
 
                                     
Total income (loss) from investment operations
   
0.67
     
3.17
     
(10.73
)
   
4.76
     
5.22
     
2.63
 
                                     
Less distributions:
                                               
Dividends from net investment income
   
     
(0.50
)
   
(0.58
)
   
(0.35
)
   
(0.26
)
   
(0.26
)
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
)
                                     
Redemption fees added to beneficial interest C
   
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
 
                                     
Net asset value, end of period
 
$
15.87
   
$
15.20
   
$
12.86
   
$
26.83
   
$
24.24
   
$
20.61
 
                                     
Total return G
   
4.41
%D
   
26.58
%
   
(45.10
)%
   
21.00
%
   
26.73
%
   
14.51
%
                                     
Ratios and supplemental data:
                                               
Net assets, end of period (in thousands)
 
$
667
   
$
1,722
   
$
1,546
   
$
4,932
   
$
4,740
   
$
2,987
 
Ratios to average net assets (annualized):
                                               
Expenses, net of waivers A
   
1.26
%
   
1.44
%
   
1.19
%
   
1.12
%
   
1.16
%
   
1.21
%
Expenses, before waivers A
   
1.26
%
   
1.45
%
   
1.19
%
   
1.15
%
   
1.19
%
   
1.21
%
Net investment income, net of waivers A
   
1.44
%
   
2.26
%
   
2.36
%
   
2.04
%
   
2.09
%
   
1.70
%
Net investment income (loss), before waivers A
   
1.44
%
   
2.25
%
   
2.36
%
   
2.01
%
   
2.05
%
   
1.70
%
Portfolio turnover rate E
   
20
% D
   
41
%
   
31
%
   
38
%
   
40
%
   
37
%

 
 
     
A
 
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.
     
B
 
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.
     
C
 
Amounts represent less than $0.01 per share.
     
D
 
Not annualized.
     
E
 
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.
     
F
 
Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.
     
G
 
May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net assets values may differ from the net asset value and returns for shareholder transactions.
     
H
 
Annualized.
 
38
 
 
 
 

 

 
                                                                 
   
Retirement Class
   
AMR Class
 
   
Six
           
Six
       
   
Months
           
Months
       
   
Ended
   
May 1 to
   
Ended
       
   
April 30,
   
October
   
April 30,
   
Year Ended October 31,
 
   
2010
   
31, 2009
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
   
(unaudited)
           
(unaudited)
                                         
 
 
 
$
15.20
   
$
11.78
   
$
15.61
   
$
13.25
   
$
27.54
   
$
24.86
   
$
21.12
   
$
18.58
 
                                                 
                                                                 
     
0.09
     
0.12
     
0.17
     
0.37
     
0.72
     
0.73
     
0.63
     
0.50
 
 
 
 
   
0.57
     
3.30
     
0.58
     
2.99
     
(11.58
)
   
4.33
     
4.92
     
2.33
 
                                                 
 
 
   
0.66
     
3.42
     
0.75
     
3.36
     
(10.86
)
   
5.06
     
5.55
     
2.83
 
                                                 
                                                                 
 
 
   
     
     
(0.52
)
   
(0.67
)
   
(0.77
)
   
(0.56
)
   
(0.48
)
   
(0.29
)
 
 
   
     
     
     
(0.33
)
   
(2.66
)
   
(1.82
)
   
(1.33
)
   
 
                                                 
     
     
     
(0.52
)
   
(1.00
)
   
(3.43
)
   
(2.38
)
   
(1.81
)
   
(0.29
)
                                                 
 
 
   
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
 
                                                 
   
$
15.86
   
$
15.20
   
$
15.84
   
$
15.61
   
$
13.25
   
$
27.54
   
$
24.86
   
$
21.12
 
                                                 
     
4.34
%D
   
29.03
%D
   
4.83
%D
   
27.70
%
   
(44.65
)%
   
21.86
%
   
27.88
%
   
15.32
%
                                                 
                                                                 
 
 
 
$
1
   
$
1
   
$
445,480
   
$
431,499
   
$
328,083
   
$
672,680
   
$
563,231
   
$
448,096
 
 
 
                                                               
     
1.49
%
   
1.48
%H
   
0.45
%
   
0.48
%
   
0.41
%
   
0.42
%
   
0.45
%
   
0.44
%
     
1.49
%
   
1.48
%H
   
0.45
%
   
0.48
%
   
0.41
%
   
0.42
%
   
0.45
%
   
0.44
%
 
 
   
1.12
%
   
1.72
%H
   
2.15
%
   
3.00
%
   
3.24
%
   
2.77
%
   
2.76
%
   
2.49
%
 
 
   
1.12
%
   
1.72
%H
   
2.15
%
   
3.00
%
   
3.24
%
   
2.77
%
   
2.76
%
   
2.49
%
     
20
%D
   
41
%F
   
20
%D
   
41
%
   
31
%
   
38
%
   
40
%
   
37
%
 
39
 
 
 
 

 
 
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Delivery of Documents
 
To reduce expenses, your financial institution may mail only one copy of the Prospectus, Annual Report and Semi-Annual Report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your financial institution. Delivery of individual copies will commence thirty days after receiving your request.
 
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
 
To obtain more information about the Fund:
 
     
     
 
By E-mail:
 
On the Internet:
american_beacon.funds@ambeacon.com
 
Visit our website at www.americanbeaconfunds.com
 

 
     
     
 
By Telephone:
 
By Mail:
Institutional, Y, Investor, Advisor and Retirement Classes
 
American Beacon Funds
Call (800) 658-5811
 
P.O. Box 219643
AMR ClassSM
 
Kansas City, MO 64121-9643
Call (800) 345-2345
   
 
 
     
     
Availability of Quarterly Portfolio Schedules
 
Availability of Proxy Voting Policy and Records
     
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference 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.
 
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:
 
             
             
CustodianState Street Bank and Trust
Boston, Massachusetts
 
Transfer Agent
Boston Financial Data Services
Kansas City, Missouri
 
Independent Registered
Public Accounting
FirmErnst & Young LLP
Dallas, Texas
 
Distributor
Foreside Fund Services,
LLC
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 Emerging Markets Fund and American Beacon International Equity Fund are service marks of American Beacon Advisors, Inc.
 
 
SAR 04//10
 
 
00074814
 

 
 

 
 
 
 
 

 
 

 
 
 
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
   
10
 
Large Cap Growth Fund
   
20
 
Mid-Cap Value Fund
   
23
 
         
Additional Information
 
Back Cover
 
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 mid-capitalization companies involves greater risk and the possibility of greater price volatility than investing in larger capitalization and more established companies.
 
 
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.
 
 
 
 
 

 

 
 

Fellow Shareholders,

 
 
Over the past six months, one universal theme seems to have emerged: while sudden and significant volatility may characterize the new economic world order, it doesn’t mean investors can’t benefit. Opportunity abounds for those who know how to capitalize on it.
 
Fortunately, this theme also underlies our investment philosophy at American Beacon:
 
With portfolios invested for the new economic reality—and conservatively managed for the longer term—we believe investors are better positioned to ride out the inevitable economic storms, whenever and wherever they occur.
 
It’s a philosophy that has served our shareholders well. It also explains how, in the face of continued weakness in the U.S. job and housing markets and mounting sovereign debt worries in Europe, our domestic equity-exposed funds could generate such respectable returns for the six-month period ended April 30, 2010. The American Beacon Balanced Fund (Institutional Class) returned 11.35%; the American Beacon Large Cap Growth Fund (Institutional Class) generated 14.28% and the American Beacon Mid-Cap Value Fund (Institutional Class) rose an impressive 25.05% over this period. Please note that the recent growth rate in the stock market has produced short-term returns that are not typical and may not continue in the future.
 
As global volatility has become the new norm, our focus at American Beacon remains trained on anticipating opportunities and meeting the challenges investors face today and will likely face tomorrow. This is what drives the composition of our fund line-up and the development of our new offerings in the last year.
 
It’s also a reflection of our commitment to you, a commitment we summarize as: Oversight 360°. Ours is a continuous commitment to cast a watchful and analytical eye over all the factors that influence our fellow shareholders’ investments.
 
As you review the enclosed market overview, portfolio listings, and detailed financial data, please know that 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 investment in the American Beacon Funds and know that we remain dedicated to offering you and your advisor the level of service and broad range of well-managed investment products you’ve come to expect from us.
 
 
 
     
     
   
Best Regards,
     
   
   
Gene L. Needles, Jr.
   
President
   
American Beacon Funds
 
 
         
         
American Beacon Funds
 
1
 
April 30, 2010
 

 
 

 
 

Domestic Equity Market Overview
April 30, 2010 (Unaudited)
 
 
In the face of continued weakness in the U.S. employment rate and the U.S. housing market and mounting sovereign debt worries abroad, the S&P 500 still managed to return an impressive 16.43% for the six months ended April 30, 2010. Buoyed by relatively healthy corporate earnings, the broader market performance reflected the economic optimism represented by: resilient personal spending on the part of the U.S. consumer; improved credit market conditions; and enhanced corporate efficiency. Still, corporate earnings remain below the long-term trend. Earnings still have room to grow, which bodes well for investors.
 
Another positive for investors comes from the fact that the retrenchment by Corporate America in the form of cost-cutting and improved operating efficiencies, which became apparent as 2009’s fourth quarter earnings season unfolded, is expected to continue providing added operating leverage. This was hardly an insignificant trend. During the fourth quarter, incremental pre-tax margins for companies in the S&P 500 Index were an astounding 64%, in other words, every $1 in incremental revenue gain resulted in $0.64 in additional pre-tax earnings. This improved corporate free cash flow put substantial cash reserves back onto balance sheets. That cash was expected to find its way into investors’ hands through increased dividends and/or share repurchases.
 
Despite flat income growth, the consumer resurfaced during the last six months, implying that there may have been an accompanying decline in the savings rate. Willingness of the consumer to spend was significant since consumer spending comprises two-thirds of the U.S. economy (based on GDP), making it a critical factor in gauging economic progress.
 
In addition to the consumer, other signs of economic expansion emerged since last October: productivity recovered, while inflation stayed in check, and the Fed remained accommodative. Cyclical sectors naturally performed well in this environment. Consumer Discretionary, Industrial, and Financial companies led the U.S. equity markets in returns, while Telecommunications, Energy, and Consumer Staples lagged. Value stocks also remained in favor, outpacing their growth counterparts across the market cap spectrum.
 
We continue to find compelling investment opportunities as the economic recovery builds momentum. Three core factors provide support for our optimism:
 
 
 
Corporate earnings and the U.S. economy are recovering from one of the deepest recessions since the Great Depression, which should amplify the magnitude of the equity market’s recovery.
       
 
 
Companies have retrenched to such a level that modest increases in demand should be disproportionately accretive to earnings.
       
 
 
The recovery of value stocks tends to carry on for several successive years following sizable market dislocations akin to 2008.
 
With these dynamics underlying the domestic equity market, we feel there is some cause for continued investor optimism for the remainder of the year.
 
 
2
 
 
 
 

 

 
Performance Overview
American Beacon Balanced FundSM
April 30, 2010 (Unaudited)

The Balanced Fund’s Institutional Class returned 11.35% for the six months ended April 30, 2010, lagging the 60% Russell 1000® Value Index/40% Barclays Capital Aggregate Index benchmark return of 11.56% but outperforming the Lipper Mixed Asset Target Allocation Growth Funds Index return of 11.10% for the same period.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
   
6 Months*
 
1 Year
 
5 Years
 
10 Years
Institutional Class(1,6)
   
11.35
%
   
31.47
%
   
3.80
%
   
6.19
%
Y Class (1,2,6)
   
11.27
%
   
31.37
%
   
3.78
%
   
6.18
%
Investor Class(1,6)
   
11.17
%
   
31.01
%
   
3.53
%
   
5.92
%
Advisor Class(1,3,6)
   
11.11
%
   
30.82
%
   
3.25
%
   
5.78
%
AMR Class(1,6)
   
11.53
%
   
31.81
%
   
4.07
%
   
6.48
%
Balanced Composite Index (4)
   
11.56
%
   
27.88
%
   
3.67
%
   
4.99
%
Russell 1000 Value Index(5)
   
17.77
%
   
42.28
%
   
1.93
%
   
3.48
%
Barclays Capital Aggregate Index(5)
   
2.54
%
   
8.30
%
   
5.38
%
   
6.43
%
Lipper Mixed-Asset Target Allocations Growth Funds Index(5)
   
11.10
%
   
32.44
%
   
4.16
%
   
4.15
%
 

 
     
*
 
Not annualized
     
1.
 
Performance shown is historical and may not be indicative of future returns. Please note that the recent growth rate in the stock market has helped to produce short-term returns that are not typical and may not continue in the future. 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 call 1-800-967-9009 or visit www.americanbeaconfunds.com. 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 six month, one-year, five-year and ten-year periods represents the total returns achieved by the Institutional Class from 4/30/00 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Institutional Class are lower than those of the Y Class. Therefore, total returns shown may be lower than they would have been had the Y Class been in existence since 4/30/00.
3.
 
Fund performance for the five-year and ten-year periods represents the total returns achieved by the Investor Class from 4/30/00 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 4/30/00. 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.
4.
 
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.
5.
 
The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. 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.
6.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor and AMR Class shares was 0.61%, 0.71%, 0.90%, 1.10% and 0.36%, 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 63% in equities (including equitized cash) and 37% in fixed-income securities, ending the period with approximately 64% invested in equities and 36% in fixed-income securities.
 
The equity portion of the Fund (excluding equitized cash) returned 17.16% for the period, slightly trailing the Russell 1000 Value Index (“the Index”) return of 17.77%. The Fund’s poor performance versus the Index was entirely due to stock selection as sector allocation added value relative to the Index.
 
The Fund’s holdings in the Consumer Discretionary, Information Technology, and Telecommunication Services sectors detracted the most value from relative performance. Companies in the Consumer Discretionary sector that had the most negative impact on the Fund’s underperformance were CBS (up 35.3%), Time Warner Cable (up 43.9%), and J.C. Penney (down 11.1%) for the period the Fund owned the securities. In the Information Technology sector, Intel (up 20.9%) and Hewlett Packard (up 9.8%) for the period the Fund owned the securities were the largest detractors from performance. AT&T (up 4.8% for the period the Fund owned the security) hurt relative returns in the Telecommunication Services sector.
 
During the six-month period, a significant underweighting in Energy, the second worst performing sector in the Index, and an overweighting in Industrials, the second best performing sector in the Index, added value to the Fund’s relative returns through sector allocation. Excess performance from the Fund’s allocation to
 
 
3
 
 
 
 

 
 
Performance Overview
American Beacon Balanced FundSM
April 30, 2010 (Unaudited)
 
the aforementioned sectors was somewhat offset by underperformance resulting from an underweighting in Consumer Discretionary, the best performing sector in the Index, and an overweighting in the Consumer Staples sector.
 
The fixed income portion of the Fund returned 2.95% for the six-month period, outperforming the Barclays Capital Aggregate Index return of 2.54%. The Fund’s fixed income excess performance was mostly due to a more than two times overweighting in the Corporates sector and the Fund’s underweight in U.S. Treasuries.
 
The sub-advisors continue to focus on the disciplined selection of attractive securities that should allow the Fund to benefit long-term.
 
Top Ten Holdings
 
 
         
   
% of
   
Net Assets
ConocoPhillips
   
2.6
%
JPMorgan Chase & Co.
   
2.1
%
Bank of America Corp.
   
1.8
%
Wells Fargo & Co.
   
1.7
%
International Business Machines Corp.
   
1.7
%
Hewlett-Packard Co.
   
1.4
%
Honeywell International, Inc.
   
1.3
%
Raytheon Co.
   
1.3
%
PNC Financial Services Group, Inc.
   
1.3
%
Pfizer, Inc.
   
1.2
%
 
Equity Sector Allocation
 
         
   
% of
   
Equities
Financials
   
24.2
%
Industrials
   
15.8
%
Energy
   
12.4
%
Information Technology
   
12.1
%
Health Care
   
10.2
%
Consumer Discretionary
   
7.9
%
Consumer Staples
   
7.6
%
Utilities
   
4.8
%
Telecommunication Services
   
2.8
%
Materials
   
2.2
%
 
Fixed-Income Sector Allocation
 
         
   
% of
   
Fixed Income
Corporate
   
47.5
%
Mortgage-Backed
   
18.8
%
U.S. Treasury
   
15.7
%
Agency
   
14.4
%
Asset-Backed
   
2.8
%
Municipal/Other Governments
   
0.8
%
 
4
 
 
 

 
 
Performance Overview
American Beacon Large Cap Growth FundSM
April 30, 2010 (Unaudited)
 
 
The Institutional Class of the Large Cap Growth Fund returned 14.28% for the six months ended April 30, 2010, compared to the Russell 1000® Growth Index (“Index”) return of 15.79% and the Lipper Large-Cap Growth Funds Index return of 15.31%.
 
                                 
   
Annualized Total Returns
   
   
Periods Ended 4/30/10
 
Since Incep.
   
6 Months*
 
1 Year
 
5 Years
 
(7/31/00)
Institutional Class(1,4)
   
14.28
%
   
32.39
%
   
0.77
%
   
-4.93
%
Y Class (1,2,4)
   
14.28
%
   
32.39
%
   
0.77
%
   
-4.93
%
AMR Class(1,4)
   
14.50
%
   
32.83
%
   
1.09
%
   
-4.72
%
Russell 1000 Growth Index(3)
   
15.79
%
   
38.16
%
   
4.05
%
   
-3.52
%
Lipper Large-Cap Growth Funds Index(3)
   
15.31
%
   
37.06
%
   
3.48
%
   
-3.93
%
 

 
     
*
 
Not annualized
     
1.
 
Performance shown is historical and may not be indicative of future returns. Please note that the recent growth rate in the stock market has helped to produce short-term returns that are not typical and may not continue in the future. 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.
 
Fund performance for the six month, one-year, five-year and since inception periods represents the total returns achieved by the Institutional Class from 7/31/00 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Institutional Class are lower than those of the Y Class. Therefore, total returns shown may be lower than they would have been had the Y Class been in existence since 7/31/00.
     
3.
 
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.
     
4.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, and AMR Class shares was 0.95%, 1.05%, and 0.64%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
 
The Fund underperformed the Index entirely through stock selection as sector allocation added value relative to the Index. From a stock selection standpoint, the Fund was hurt most by poor stock selection in the Financials and Industrials sectors. Companies, in the Financials sector, with the greatest negative impact to the Fund’s performance included Knight Capital Group (down 13.3%) and Western Union (down 6.8%) for the period the Fund owned the securities. In the Industrials sector, Fluor (up 7.8%) and H&R Block (down 7.0%) for the period the Fund owned the securities, detracted the most value relative to the Index.
 
The Fund’s six times underweighting in the Consumer Staples sector generated positive returns from a sector allocation perspective. An overweighting in Industrials and Consumer Discretionary, the two best performing sectors in the Index, as well as an absence from Utilities, the worst performing sector in the Index, also added relative value. A more than two times overweighting in the Energy sector produced negative returns, slightly offsetting the aforementioned good performance.
 
Looking forward, the Fund’s sub-advisors will continue to maintain a disciplined, long-term approach to equity investing in larger stocks with above-average growth potential.
 
 
Top Ten Holdings
 
         
   
% of
   
Net Assets
Apple Computer, Inc.
   
3.1
%
Cognizant Technology Solutions Corp.
   
2.5
%
Hewlett-Packard Co.
   
2.4
%
Cisco Systems, Inc.
   
2.2
%
priceline.com, Inc.
   
2.0
%
Oracle Corp.
   
1.8
%
Visa, Inc.
   
1.8
%
Microsoft Corp.
   
1.7
%
Goldman Sachs Group, Inc.
   
1.7
%
Target Corp.
   
1.5
%
 
Equity Sector Allocation
 
         
   
% of
   
Equities
Information Technology
   
33.6
%
Consumer Discretionary
   
19.0
%
Industrials
   
16.9
%
Health Care
   
10.9
%
Financials
   
8.2
%
Energy
   
6.9
%
Consumer Staples
   
2.7
%
Materials
   
1.8
%
 
5
 
 
 
 

 

 
Performance Overview
American Beacon Mid-Cap Value FundSM
April 30, 2010 (Unaudited)
 
 
The Institutional Class of the Mid-Cap Value Fund returned 25.05% for the six months ended April 30, 2010. The Fund lagged the Russell Midcap® Value Index (“Index”) return of 26.54% but outperformed the Lipper Mid-Cap Value Funds Index return of 22.82%.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
                           
Since
                           
Incep.
   
6 Months*
 
1 Year
 
5 Years
 
(6/30/04)
Institutional Class(1,3,7)
   
25.05
%
   
57.77
%
   
5.26
%
   
6.13
%
Y Class (1,4,7)
   
25.05
%
   
57.77
%
   
5.26
%
   
6.13
%
Investor Class (1,2,7)
   
24.93
%
   
57.32
%
   
5.01
%
   
5.92
%
Advisor Class (1,5,7)
   
24.52
%
   
56.95
%
   
4.99
%
   
5.90
%
AMR Class (1,7)
   
25.01
%
   
57.87
%
   
5.40
%
   
6.25
%
Russell Midcap® Value Index(6)
   
26.54
%
   
54.39
%
   
5.18
%
   
6.68
%
Lipper Mid-Cap Value Funds Index(6)
   
22.82
%
   
49.95
%
   
5.22
%
   
5.47
%
 

 
     
*
 
Not annualized
     
1.
 
Performance shown is historical and may not be indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. A portion of the fees charged to the AMR Class of the Fund was waived through 2005. Performance prior to waiving fees was lower than the actual returns shown for periods through 2005.
     
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.
 
Fund performance for the six month, one-year, five-year and 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 from 12/1/05 to 3/1/10 its inception. Expenses of the Institutional and AMR Classes are lower than those of the Y Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 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.
     
5.
 
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 3/1/06 and the Investor Class from 3/1/06 to 6/29/07. 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.
     
6.
 
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.
     
7.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, and AMR Class shares was 1.15%, 1.25%, 1.36%, 1.60%, and 0.84%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
 
The Fund underperformed the Index entirely through stock selection as sector allocation added value relative to the Index.
 
 
Holdings in the Information Technology, Consumer Discretionary, and Energy sectors detracted the most relative value from the Fund’s performance through stock selection. In the Information Technology sector, the Fund’s investments in Alcatel Lucent (down 13.3%), Motorola (down 17.5%), and Tech Data (down 0.2% for the period the Fund owned the security) had the largest negative impact on the Fund’s performance. In the Consumer Discretionary sector, GameStop (down 2.9%), Whirlpool (up 16.0%), and Limited Brands (up 25.6%) were the largest detractors for the period the Fund owned the securities. Murphy Oil (down 1.3%) and El Paso (up 22.9%), for the period the Fund owned the securities, were the Energy sector companies that hurt the Fund’s relative performance most.
 
 
6
 
 
 
 

 
 
Performance Overview
American Beacon Mid-Cap Value FundSM
April 30, 2010 (Unaudited)

A significant overweighting in Consumer Discretionary, the best performing sector in the Index, added relative value through sector allocation.
 
The sub-advisors’ philosophy of investing in undervalued companies that exhibit improving profitability and earnings growth potential should allow the Fund to benefit longer term.
 
 
Top Ten Holdings
 
         
   
% of
   
Net Assets
L-3 Communications Holdings, Inc.
   
2.8
%
Willis Group Holdings plc
   
2.4
%
Fifth Third Bancorp
   
2.4
%
Stanley Black & Decker, Inc.
   
2.3
%
PNC Financial Services Group, Inc.
   
2.2
%
Tyco Electronics Ltd.
   
1.6
%
Protective Life Corp.
   
1.6
%
Eaton Corp.
   
1.5
%
Capital One Financial Corp.
   
1.5
%
Torchmark Corp.
   
1.4
%
 
Equity Sector Allocation
 
         
   
% of
   
Equities
Financials
   
28.3
%
Consumer Discretionary
   
20.2
%
Industrials
   
14.2
%
Information Technology
   
11.1
%
Health Care
   
10.8
%
Utilities
   
7.9
%
Energy
   
3.4
%
Consumer Staples
   
3.2
%
Materials
   
0.9
%
 
7
 
 
 
 

 

 
Fund Expenses — Actual
April 30, 2010 (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, 2009 through April 30, 2010.
 
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.
 
                         
           
Large Cap
   
 
Institutional Class
 
Balanced
Fund
 
Growth
Fund
 
Mid-Cap
Value Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,113.53
   
$
1,142.75
   
$
1,250.53
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
3.09
   
$
4.78
   
$
5.41
 
Annualized Expense Ratio
   
0.59
%
   
0.90
%
   
0.97
%
 
 
                         
           
Large Cap
   
 
Y Class
 
Balanced
Fund
 
Growth
Fund
 
Mid-Cap
Value Fund
Beginning Account Value 3/1/10**
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,049.18
   
$
1,048.06
   
$
1,109.67
 
Expenses Paid During Period 3/1/10-4/30/10 **
 
$
1.18
   
$
1.78
   
$
1.91
 
Annualized Expense Ratio
   
0.70
%
   
1.06
%
   
1.10
%
 
 
                 
 
Investor Class
 
Balanced
Fund
 
Mid-Cap
Value Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,111.71
   
$
1,249.35
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
4.82
   
$
6.80
 
Annualized Expense Ratio
   
0.92
%
   
1.22
%
 
 
                 
 
Advisor Class
 
Balanced
Fund
 
Mid-Cap
Value Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,111.10
   
$
1,245.17
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
5.71
   
$
8.07
 
Annualized Expense Ratio
   
1.09
%
   
1.45
%
 
 
                         
                 
 
AMR Class
 
Balanced
Fund
 
Large Cap
Growth Fund
 
Mid-Cap
Value Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/2010
 
$
1,115.30
   
$
1,144.99
   
$
1,250.06
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
1.73
   
$
3.51
   
$
4.30
 
Annualized Expense Ratio
   
0.33
%
   
0.66
%
   
0.77
%
 

 
     
*
 
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.
     
**
 
Beginning account value for Y Class is the inception date of 3/1/10. Expenses are equal to the Fund’s annualized expense ratio for the period multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the period ( 61 ) by days in the year ( 365 ).
 
8
 
 
 
 

 

 
Fund Expenses — Hypothetical
April 30, 2010 (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 pe riod, 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.
 
                         
           
Large Cap
   
 
Institutional Class
 
Balanced
Fund
 
Growth
Fund
 
Mid-Cap
Value Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,021.87
   
$
1,020.33
   
$
1,019.98
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
2.96
   
$
4.51
   
$
4.86
 
Annualized Expense Ratio
   
0.59
%
   
0.90
%
   
0.97
%
 
 
                         
           
Large Cap
   
 
Y Class
 
Balanced
Fund
 
Growth
Fund
 
Mid-Cap
Value Fund
Beginning Account Value 3/1/10**
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,007.18
   
$
1,006.58
   
$
1,006.51
 
Expenses Paid During Period 3/1/10-4/30/10 **
 
$
1.18
   
$
1.79
   
$
1.85
 
Annualized Expense Ratio
   
0.70
%
   
1.06
%
   
1.10
%
 
 
                 
 
Investor Class
 
Balanced
Fund
 
Mid-Cap
Value Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,020.23
   
$
1,018.74
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
4.61
   
$
6.11
 
Annualized Expense Ratio
   
0.92
%
   
1.22
%
 
 
                 
 
Advisor Class
 
Balanced
Fund
 
Mid-Cap
Value Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,019.39
   
$
1,017.60
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
5.46
   
$
7.25
 
Annualized Expense Ratio
   
1.09
%
   
1.45
%
 
 
                         
           
Large Cap
   
 
AMR Class
 
Balanced
Fund
 
Growth
Fund
 
Mid-Cap
Value Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,023.16
   
$
1,021.52
   
$
1,020.98
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
1.66
   
$
3.31
   
$
3.86
 
Annualized Expense Ratio
   
0.33
%
   
0.66
%
   
0.77
%
 

 
     
*
 
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.
     
**
 
Beginning account value for Y Class is the inception date of 3/1/10. Expenses are equal to the Fund’s annualized expense ratio for the period multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the period ( 61 ) by days in the year ( 365 ).
 
9
 
 
 

 
 

American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
COMMON STOCKS - 60.54%
               
                 
CONSUMER DISCRETIONARY - 4.76%
               
Hotels, Restaurants & Leisure - 1.26%
               
Carnival Corp.
   
100,800
   
$
4,203
 
McDonald’s Corp.
   
55,900
     
3,946
 
Wyndham Worldwide Corp.
   
120,000
     
3,217
 
               
             
11,366
 
               
Media - 1.29%
               
CBS Corp.
   
97,000
     
1,572
 
Comcast Corp.
   
138,800
     
2,617
 
Interpublic Group of Cos., Inc. ^
   
186,400
     
1,661
 
Time Warner Cable, Inc.
   
42,100
     
2,368
 
Walt Disney Co. Ltd.
   
92,400
     
3,404
 
               
             
11,622
 
               
Multiline Retail - 1.30%
               
J.C. Penney Company, Inc.
   
100,100
     
2,920
 
Target Corp.
   
67,700
     
3,850
 
Wal-Mart Stores, Inc.
   
92,800
     
4,979
 
               
             
11,749
 
               
Specialty Retail - 0.91%
               
Gap, Inc.
   
60,300
     
1,491
 
The Home Depot, Inc.
   
130,050
     
4,584
 
Limited Brands, Inc.
   
78,000
     
2,091
 
               
             
8,166
 
               
Total Consumer Discretionary
           
42,903
 
               
                 
CONSUMER STAPLES - 4.61%
               
Beverages - 1.02%
               
Coca-Cola Co.
   
34,400
     
1,839
 
Diageo plc, ADR
   
68,200
     
4,647
 
PepsiCo, Inc.
   
41,200
     
2,687
 
               
             
9,173
 
               
Food & Drug Retailing - 0.87%
               
CVS Caremark Corp.
   
115,700
     
4,273
 
Safeway, Inc.
   
99,500
     
2,348
 
Sysco Corp.
   
38,600
     
1,217
 
               
             
7,838
 
               
Food Products - 0.16%
               
Kraft Foods, Inc.
   
49,600
     
1,468
 
               
                 
Household Products - 0.26%
               
The Procter & Gamble Co.
   
38,000
     
2,362
 
               
                 
Tobacco - 2.30%
               
Altria Group, Inc.
   
103,000
     
2,183
 
Imperial Tobacco Group plc, ADR
   
121,900
     
6,947
 
Lorillard, Inc.
   
20,600
     
1,614
 
Philip Morris International, Inc.
   
204,500
     
10,037
 
               
             
20,781
 
               
Total Consumer Staples
           
41,622
 
               
                 
ENERGY - 7.52%
               
Energy Equipment & Services - 0.19%
               
Transocean Ltd. ^
   
23,800
     
1,724
 
               
                 
Oil & Gas - 7.33%
               
BP plc, ADR
   
191,700
     
9,997
 
Chevron Corp.
   
94,028
     
7,658
 
ConocoPhillips
   
394,976
     
23,379
 
Devon Energy Corp.
   
21,000
     
1,414
 
Duke Energy Corp.
   
70,700
     
1,186
 
Exxon Mobil Corp.
   
119,500
     
8,108
 
Marathon Oil Corp.
   
26,400
     
849
 
Occidental Petroleum Corp.
   
63,200
     
5,603
 
Royal Dutch Shell plc, ADR
   
130,400
     
7,913
 
               
             
66,107
 
               
Total Energy
           
67,831
 
               
                 
FINANCIALS - 14.63%
               
Banks - 9.13%
               
Bank of America Corp.
   
924,280
     
16,480
 
Bank of New York Mellon Corp.
   
70,900
     
2,207
 
Citigroup, Inc. ^
   
1,366,003
     
5,969
 
Goldman Sachs Group, Inc.
   
16,700
     
2,425
 
JPMorgan Chase & Co.
   
444,734
     
18,937
 
KeyCorp
   
158,757
     
1,432
 
PNC Financial Services Group, Inc.
   
174,958
     
11,759
 
State Street Corp.
   
101,300
     
4,407
 
SunTrust Banks, Inc.
   
38,900
     
1,152
 
U.S. Bancorp
   
93,060
     
2,491
 
Wells Fargo & Co.
   
456,398
     
15,111
 
               
             
82,370
 
               
Diversified Financials - 1.97%
               
American Express Co.
   
153,500
     
7,079
 
Capital One Financial Corp.
   
112,300
     
4,875
 
Morgan Stanley Dean Witter & Co.
   
125,600
     
3,796
 
SLM Corp. ^
   
165,200
     
2,022
 
               
             
17,772
 
               
Insurance - 3.53%
               
ACE Ltd.
   
77,500
     
4,122
 
Allstate Corp.
   
87,800
     
2,869
 
 
See accompanying notes
 
 
10
 
 
 

 
 
 
American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Genworth Financial, Inc. ^
   
186,500
   
$
3,081
 
Hartford Financial Services Group, Inc.
   
62,700
     
1,791
 
Lincoln National Corp.
   
80,600
     
2,466
 
MetLife, Inc.
   
152,288
     
6,941
 
Prudential Financial, Inc.
   
29,400
     
1,869
 
Travelers Cos., Inc.
   
91,100
     
4,622
 
XL Capital Ltd.
   
228,100
     
4,060
 
               
             
31,821
 
               
Total Financials
           
131,963
 
               
                 
HEALTH CARE - 6.17%
               
Health Care Equipment & Supplies - 0.54%
               
Baxter International, Inc.
   
94,500
     
4,462
 
Zimmer Holdings, Inc. ^
   
7,600
     
463
 
               
             
4,925
 
               
Health Care Providers & Services - 1.19%
               
Cardinal Health, Inc.
   
69,100
     
2,397
 
CIGNA Corp.
   
142,900
     
4,581
 
UnitedHealth Group, Inc.
   
32,700
     
991
 
WellPoint, Inc. ^
   
50,900
     
2,739
 
               
             
10,708
 
               
Pharmaceuticals - 4.44%
               
Amgen, Inc. ^
   
30,400
     
1,744
 
Bristol-Myers Squibb Co.
   
384,800
     
9,732
 
Eli Lilly & Co.
   
175,000
     
6,120
 
Johnson & Johnson
   
89,900
     
5,780
 
Merck & Co., Inc.
   
175,676
     
6,156
 
Pfizer, Inc.
   
626,454
     
10,474
 
               
             
40,006
 
               
Total Health Care
           
55,639
 
               
                 
INDUSTRIALS - 9.58%
               
Aerospace & Defense - 3.15%
               
Boeing Co.
   
95,000
     
6,881
 
Lockheed Martin Corp.
   
51,200
     
4,346
 
Northrop Grumman Corp.
   
46,700
     
3,168
 
Raytheon Co.
   
200,700
     
11,701
 
United Technologies Corp.
   
30,800
     
2,308
 
               
             
28,404
 
               
Air Freight & Couriers - 0.26%
               
FedEx Corp.
   
25,700
     
2,313
 
               
                 
Construction & Engineering - 0.20%
               
Shaw Group, Inc. ^
   
46,600
     
1,784
 
               
                 
Industrial Conglomerates - 3.55%
               
3M Co.
   
63,300
     
5,613
 
General Electric Co.
   
502,000
     
9,468
 
Honeywell International, Inc.
   
249,400
     
11,839
 
Textron, Inc.
   
100,000
     
2,284
 
Tyco International Ltd.
   
73,325
     
2,844
 
               
             
32,048
 
               
Machinery - 2.42%
               
Caterpillar, Inc.
   
40,000
     
2,724
 
Cummins, Inc.
   
34,700
     
2,506
 
Eaton Corp.
   
34,400
     
2,654
 
Illinois Tool Works, Inc.
   
54,100
     
2,765
 
ITT Industries, Inc.
   
77,000
     
4,279
 
PACCAR, Inc.
   
147,900
     
6,880
 
               
             
21,808
 
               
Total Industrials
           
86,357
 
               
                 
INFORMATION TECHNOLOGY - 7.33%
               
Computers & Peripherals - 3.36%
               
Dell, Inc. ^
   
137,000
     
2,217
 
Hewlett-Packard Co.
   
251,100
     
13,050
 
International Business Machines Corp.
   
116,800
     
15,067
 
               
             
30,334
 
               
Diversified Telecommunication Services - 0.49%
               
Nokia Corp., ADR ^
   
364,800
     
4,436
 
               
Electronic Equipment & Instruments - 1.52%
               
Intel Corp.
   
405,300
     
9,253
 
Tyco Electronics Ltd.
   
138,925
     
4,462
 
               
             
13,715
 
               
IT Consulting & Services - 0.10%
               
Accenture plc
   
20,400
     
890
 
               
Software - 1.86%
               
CA, Inc.
   
250,574
     
5,715
 
Microsoft Corp.
   
305,100
     
9,318
 
Oracle Corp.
   
66,100
     
1,708
 
               
             
16,741
 
               
Total Information Technology
           
66,116
 
               
                 
MATERIALS - 1.31%
               
Chemicals - 1.31%
               
Air Products & Chemicals, Inc.
   
35,800
     
2,749
 
Dow Chemical Co.
   
68,300
     
2,106
 
E. I. du Pont de Nemours & Co.
   
107,000
     
4,263
 
 
See accompanying notes
 
 
11
 
 
 
 

 

American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
PPG Industries, Inc.
   
38,500
   
$
2,709
 
               
Total Materials
           
11,827
 
               
                 
TELECOMMUNICATION SERVICES - 1.71%
               
Diversified Telecommunication - 0.88%
               
Vodafone Group plc, ADR
   
355,800
     
7,899
 
               
Diversified Telecommunication Services - 0.83%
               
AT&T, Inc.
   
229,377
     
5,977
 
Verizon Communications, Inc.
   
52,808
     
1,526
 
               
             
7,503
 
               
Total Telecommunication Services
           
15,402
 
               
                 
UTILITIES - 2.92%
               
Electric Utilities - 2.31%
               
CenterPoint Energy, Inc.
   
177,100
     
2,543
 
Dominion Resources, Inc.
   
107,400
     
4,489
 
Edison International
   
65,900
     
2,265
 
Entergy Corp.
   
47,400
     
3,853
 
Exelon Corp.
   
122,100
     
5,323
 
FPL Group, Inc.
   
44,400
     
2,311
 
               
             
20,784
 
               
Gas Utilities - 0.61%
               
Spectra Energy Corp.
   
236,100
     
5,510
 
               
Total Utilities
           
26,294
 
               
Total Common Stocks
           
545,954
 
               
                 
   
Par
       
   
Amount
       
AGENCIES - 0.09%
               
Agency - 0.09%
               
EDF SA, 4.60%, Due 1/27/2020 ‡
 
$
320
     
320
 
Petrobras International Finance Co., 6.875%, Due 1/20/2040
   
125
     
130
 
Petroleos Mexicanos, 6.00%, Due 3/5/2020 ‡
   
325
     
334
 
               
Total Agencies
           
784
 
               
                 
CORPORATE OBLIGATIONS - 17.22%
               
Finance - 5.38%
               
Aegon Funding Corp., 5.75%, Due 12/15/2020
   
350
     
349
 
American Express Co., 8.15%, Due 3/19/2038
   
325
     
428
 
American Express Credit Corp., 5.875%, Due 5/2/2013
   
710
     
776
 
Ameriprise Financial, Inc., 5.35%, Due 11/15/2010
   
775
     
793
 
ANZ National Int’l Ltd., 2.375%, Due 12/21/2012 ‡
   
350
     
353
 
Bank of America Corp.,
               
6.50%, Due 8/1/2016
   
2,090
     
2,254
 
7.80%, Due 9/15/2016
   
700
     
782
 
6.00%, Due 9/1/2017
   
400
     
415
 
Bank of New York Mellon Corp., 4.95%, Due 11/1/2012
   
355
     
385
 
Bank One Corp., 4.90%, Due 4/30/2015
   
250
     
256
 
Barclays Bank plc,
               
3.90%, Due 4/7/2015
   
330
     
334
 
6.75%, Due 5/22/2019
   
350
     
393
 
Bear Stearns Cos., Inc.,
               
6.40%, Due 10/2/2017
   
555
     
614
 
7.25%, Due 2/1/2018
   
340
     
392
 
Berkshire Hathaway Finance Corp., 5.75%, Due 1/15/2040
   
360
     
366
 
Berkshire Hathaway, Inc., 1.40%, Due 2/10/2012
   
2,110
     
2,125
 
BNP Paribas, 0.695%, Due 4/8/2013 #
   
800
     
800
 
Citigroup, Inc.,
               
6.375%, Due 8/12/2014
   
1,170
     
1,262
 
0.529%, Due 11/5/2014 #
   
320
     
297
 
6.01%, Due 1/15/2015
   
540
     
575
 
6.125%, Due 11/21/2017
   
760
     
790
 
8.50%, Due 5/22/2019
   
650
     
767
 
CME Group, Inc.,
               
5.40%, Due 8/1/2013
   
260
     
286
 
5.75%, Due 2/15/2014
   
565
     
625
 
CNA Financial Corp., 7.35%, Due 11/15/2019
   
245
     
262
 
Countrywide Financial Corp., 5.80%, Due 6/7/2012
   
235
     
250
 
Credit Suisse N.Y.,
               
3.45%, Due 7/2/2012
   
700
     
726
 
5.30%, Due 8/13/2019
   
325
     
340
 
Deutsche Bank AG, 3.875%, Due 8/18/2014
   
325
     
336
 
Fifth Third Bancorp, 8.25%, Due 3/1/2038
   
1,500
     
1,655
 
General Electric Capital Corp.,
               
5.25%, Due 10/19/2012
   
285
     
307
 
0.495%, Due 1/8/2016 #
   
1,125
     
1,031
 
5.625%, Due 5/1/2018
   
765
     
811
 
6.00%, Due 8/7/2019
   
350
     
378
 
 
See accompanying notes
 
 
12
 
 
 
 

 

 
American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
5.50%, Due 1/8/2020
 
$
250
   
$
260
 
5.875%, Due 1/14/2038
   
625
     
618
 
Goldman Sachs Group, Inc.,
               
5.125%, Due 1/15/2015
   
285
     
294
 
5.35%, Due 1/15/2016
   
725
     
739
 
6.25%, Due 9/1/2017
   
650
     
680
 
5.95%, Due 1/18/2018
   
280
     
287
 
6.75%, Due 10/1/2037
   
1,402
     
1,359
 
Hartford Financial Services Group, Inc., 7.90%, Due 6/15/2010
   
305
     
308
 
HSBC Finance Corp., 5.25%, Due 1/14/2011
   
1,400
     
1,437
 
ING Bank, NV, 5.125%, Due 5/1/2015 ‡
   
450
     
471
 
John Hancock Global Funding II, 7.90%, Due 7/2/2010 ‡
   
25
     
25
 
JP Morgan Chase & Co.,
               
3.70%, Due 1/20/2015
   
1,705
     
1,740
 
6.00%, Due 1/15/2018
   
500
     
539
 
JP Morgan Chase Bank, NA, 0.587%, Due 6/13/2016 #
   
415
     
390
 
Liberty Mutual Insurance Co., 7.875%, Due 10/15/2026 ‡
   
1,500
     
1,607
 
Lincoln National Corp., 4.75%, Due 2/15/2014
   
245
     
252
 
Lloyds TSB Bank plc, 4.375%, Due 1/12/2015 ‡
   
325
     
323
 
MassMutual Global Funding II, 0.412%, Due 12/6/2013 ‡ #
   
400
     
388
 
Mellon Funding Corp., 0.40%, Due 5/15/2014 #
   
250
     
247
 
Merrill Lynch & Co., Inc.,
               
6.40%, Due 8/28/2017
   
1,000
     
1,050
 
6.50%, Due 7/15/2018
   
260
     
272
 
6.11%, Due 1/29/2037
   
365
     
338
 
MetLife, Inc.,
               
5.375%, Due 12/15/2012
   
535
     
579
 
6.375%, Due 6/15/2034
   
350
     
373
 
Metropolitan Life Global Funding I, 0.507%, Due 3/15/2012 ‡ #
   
320
     
316
 
Monumental Global Funding III, 0.503%, Due 1/15/2014 ‡ #
   
325
     
310
 
Morgan Stanley,
               
0.783%, Due 10/15/2015 #
   
320
     
297
 
7.30%, Due 5/13/2019
   
350
     
384
 
5.625%, Due 9/23/2019
   
350
     
345
 
Nasdaq OMX Group,
               
4.00%, Due 1/15/2015
   
185
     
187
 
5.55%, Due 1/15/2020
   
185
     
188
 
Nordea Bank AB, 2.50%, Due 11/13/2012 ‡
   
350
     
354
 
PNC Funding Corp., 4.25%, Due 9/21/2015
   
460
     
476
 
Pricoa Global Funding I, 5.40%, Due 10/18/2012 ‡
   
175
     
189
 
ProLogis, 5.625%, Due 11/15/2016
   
550
     
544
 
Prudential Financial, Inc.,
               
4.50%, Due 7/15/2013
   
550
     
576
 
5.10%, Due 9/20/2014
   
550
     
589
 
Rabobank Nederland NV, 4.20%, Due 5/13/2014 ‡
   
200
     
210
 
Simon Property Group LP, 10.35%, Due 4/1/2019
   
325
     
421
 
State Street Corp., 4.30%, Due 5/30/2014
   
290
     
307
 
UBS AG, 5.875%, Due 12/20/2017
   
325
     
344
 
UnitedHealth Group, Inc.,
               
5.25%, Due 3/15/2011
   
765
     
792
 
6.625%, Due 11/15/2037
   
2,000
     
2,131
 
Wachovia Corp.,
               
0.673%, Due 10/15/2016 #
   
650
     
597
 
5.75%, Due 2/1/2018
   
775
     
834
 
Wells Fargo & Co., 5.625%, Due 12/11/2017
   
250
     
269
 
Westpac Banking Corp., 2.25%, Due 11/19/2012
   
430
     
435
 
Willis North America, Inc., 6.20%, Due 3/28/2017
   
360
     
369
 
               
             
48,553
 
               
                 
Industrials - 10.38%
               
Alltel Corp., 7.00%, Due 7/1/2012
   
300
     
334
 
Altria Group, Inc., 9.70%, Due 11/10/2018
   
365
     
459
 
America Movil, S.A.B. de C.V., 6.375%, Due 3/1/2035
   
350
     
360
 
American Honda Finance Corp., 4.625%, Due 4/2/2013 ‡
   
425
     
452
 
Amgen, Inc., 6.90%, Due 6/1/2038
   
1,480
     
1,741
 
Anheuser-Busch InBev Worldwide, Inc.,
               
3.00%, Due 10/15/2012
   
470
     
483
 
5.00%, Due 4/15/2020 ‡
   
330
     
335
 
8.00%, Due 11/15/2039 ‡
   
125
     
162
 
 
See accompanying notes
 
 
13
 
 
 
 

 

 
American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
AstraZeneca plc, 6.45%, Due 9/15/2037
 
$
1,880
   
$
2,155
 
AT&T Wireless Services, Inc., 8.75%, Due 3/1/2031
   
330
     
435
 
AT&T, Inc.,
               
5.10%, Due 9/15/2014
   
860
     
939
 
5.625%, Due 6/15/2016
   
400
     
444
 
5.50%, Due 2/1/2018
   
300
     
323
 
6.80%, Due 5/15/2036
   
150
     
164
 
6.40%, Due 5/15/2038
   
1,840
     
1,929
 
BAE Systems Holdings, Inc., 4.75%, Due 8/15/2010 ‡
   
650
     
657
 
Baxter International, Inc., 1.80%, Due 3/15/2013
   
230
     
230
 
Best Buy Co., Inc., 6.75%, Due 7/15/2013
   
415
     
464
 
Biogen Idec, Inc., 6.875%, Due 3/1/2018
   
1,500
     
1,671
 
Boeing Co., 1.875%, Due 11/20/2012
   
350
     
354
 
BP Capital Markets plc,
               
3.125%, Due 3/10/2012
   
415
     
430
 
3.875%, Due 3/10/2015
   
200
     
209
 
Bristol-Myers Squibb Co., 5.45%, Due 5/1/2018
   
250
     
274
 
Burlington Northern Santa Fe LLC,
               
5.75%, Due 3/15/2018
   
425
     
463
 
7.95%, Due 8/15/2030
   
205
     
255
 
CA, Inc., 5.375%, Due 12/1/2019
   
305
     
318
 
Cameron International Corp., 6.375%, Due 7/15/2018
   
215
     
229
 
Canadian National Railway Co.,
               
5.55%, Due 5/15/2018
   
350
     
382
 
5.55%, Due 3/1/2019
   
175
     
191
 
Canadian Natural Resources Ltd.,
               
6.70%, Due 7/15/2011
   
410
     
436
 
6.25%, Due 3/15/2038
   
365
     
384
 
Caterpillar Financial Services Corp.,
               
4.85%, Due 12/7/2012
   
545
     
588
 
1.90%, Due 12/17/2012
   
300
     
303
 
Cisco Systems, Inc., 5.90%, Due 2/15/2039
   
1,420
     
1,489
 
Coca-Cola Enterprises, Inc., 7.375%, Due 3/3/2014
   
175
     
206
 
Comcast Cable Communications Holdings, Inc., 8.375%, Due 3/15/2013
   
128
     
149
 
Comcast Corp.,
               
6.30%, Due 11/15/2017
   
480
     
532
 
5.875%, Due 2/15/2018
   
305
     
329
 
6.45%, Due 3/15/2037
   
2,630
     
2,755
 
6.55%, Due 7/1/2039
   
350
     
370
 
Computer Sciences Corp., 5.50%, Due 3/15/2013
   
310
     
335
 
ConocoPhillips,
               
4.60%, Due 1/15/2015
   
900
     
973
 
5.20%, Due 5/15/2018
   
425
     
458
 
5.75%, Due 2/1/2019
   
310
     
346
 
Con-way, Inc., 8.875%, Due 5/1/2010
   
1,850
     
1,850
 
Costco Wholesale Corp., 5.30%, Due 3/15/2012
   
825
     
886
 
Covidien International Finance SA,
               
5.15%, Due 10/15/2010
   
650
     
663
 
5.45%, Due 10/15/2012
   
360
     
393
 
6.55%, Due 10/15/2037
   
1,500
     
1,727
 
CRH America, Inc., 6.00%, Due 9/30/2016
   
835
     
914
 
Daimler Finance NA LLC,
               
7.75%, Due 1/18/2011
   
1,000
     
1,047
 
5.875%, Due 3/15/2011
   
450
     
467
 
5.75%, Due 9/8/2011
   
550
     
580
 
Dell, Inc.,
               
3.375%, Due 6/15/2012
   
290
     
302
 
5.875%, Due 6/15/2019
   
90
     
100
 
Deutsche Telekom AG, 8.50%, Due 6/15/2010
   
525
     
529
 
DIRECTV Holdings LLC,
               
3.55%, Due 3/15/2015 ‡
   
530
     
528
 
6.35%, Due 3/15/2040 ‡
   
160
     
165
 
E. I. du Pont de Nemours & Co., 5.875%, Due 1/15/2014
   
560
     
628
 
Eaton Corp., 5.60%, Due 5/15/2018
   
340
     
366
 
EI Du Pont de Nemours & Co., 3.25%, Due 1/15/2015
   
635
     
648
 
EOG Resources Canada, Inc., 4.75%, Due 3/15/2014 ‡
   
350
     
370
 
Equity Residential, 5.125%, Due 3/15/2016
   
470
     
489
 
Express Scripts, Inc., 6.25%, Due 6/15/2014
   
570
     
639
 
FedEx Corp., 8.00%, Due 1/15/2019
   
900
     
1,124
 
France Telecom S.A., 4.375%, Due 7/8/2014
   
465
     
497
 
 
See accompanying notes
 
 
14
 
 
 

 
 
 
American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
GlaxoSmithKline Capital, Inc.,
               
5.65%, Due 5/15/2018
 
$
250
   
$
277
 
6.375%, Due 5/15/2038
   
1,020
     
1,155
 
Hewlett-Packard Co.,
               
4.25%, Due 2/24/2012
   
585
     
618
 
4.50%, Due 3/1/2013
   
425
     
458
 
6.125%, Due 3/1/2014
   
460
     
523
 
Honeywell International, Inc., 4.25%, Due 3/1/2013
   
1,080
     
1,155
 
Hospira, Inc., 6.05%, Due 3/30/2017
   
360
     
395
 
International Business Machines Corp.,
               
4.75%, Due 11/29/2012
   
480
     
520
 
7.625%, Due 10/15/2018
   
770
     
965
 
ITT Corp., 4.90%, Due 5/1/2014
   
845
     
907
 
John Deere Capital Corp., 4.90%, Due 9/9/2013
   
670
     
732
 
Johnson Controls, Inc., 5.00%, Due 3/30/2020
   
505
     
515
 
Kellogg Co., 4.25%, Due 3/6/2013
   
500
     
532
 
Kerr-McGee Corp., 6.95%, Due 7/1/2024
   
380
     
429
 
Koninklijke Philips Electronics NV, 5.75%, Due 3/11/2018
   
335
     
368
 
Kraft Foods, Inc.,
               
7.00%, Due 8/11/2037
   
1,580
     
1,800
 
6.50%, Due 2/9/2040
   
245
     
264
 
L-3 Communications Corp., 5.20%, Due 10/15/2019 ‡
   
190
     
195
 
Lorillard Tobacco Co., 8.125%, Due 6/23/2019
   
310
     
350
 
Lowe’s Companies, Inc.,
               
5.50%, Due 10/15/2035
   
210
     
208
 
6.65%, Due 9/15/2037
   
170
     
195
 
Marathon Oil Corp., 6.00%, Due 10/1/2017
   
415
     
454
 
Mead Johnson Nutrition Co., 4.90%, Due 11/1/2019 ‡
   
285
     
288
 
Medtronic, Inc., 3.00%, Due 3/15/2015
   
1,065
     
1,076
 
Nationwide Building Society, 5.50%, Due 7/18/2012 ‡
   
500
     
537
 
Norfolk Southern Corp., 5.75%, Due 4/1/2018
   
425
     
464
 
Northrop Grumman Corp., 5.05%, Due 8/1/2019
   
150
     
157
 
Novartis Capital Corp.,
               
1.90%, Due 4/24/2013
   
695
     
697
 
4.125%, Due 2/10/2014
   
560
     
597
 
Novartis Securities Investment Ltd., 5.125%, Due 2/10/2019
   
1,164
     
1,251
 
Oracle Corp., 6.50%, Due 4/15/2038
   
1,055
     
1,206
 
Pfizer, Inc., 4.45%, Due 3/15/2012
   
770
     
815
 
Quest Diagnostics, Inc., 4.75%, Due 1/30/2020
   
660
     
658
 
Raytheon Co.,
               
5.375%, Due 4/1/2013
   
550
     
603
 
4.40%, Due 2/15/2020
   
455
     
461
 
Rogers Communications, Inc., 6.80%, Due 8/15/2018
   
350
     
404
 
Safeway, Inc., 6.25%, Due 3/15/2014
   
535
     
600
 
Shell International Finance BV, 6.375%, Due 12/15/2038
   
1,760
     
1,995
 
Simon Property Group LP, 5.75%, Due 12/1/2015
   
460
     
497
 
Telecom Italia Capital SA, 4.95%, Due 9/30/2014
   
475
     
489
 
Telefonica Emisiones SAU,
               
5.984%, Due 6/20/2011
   
380
     
400
 
4.949%, Due 1/15/2015
   
515
     
546
 
6.421%, Due 6/20/2016
   
350
     
391
 
Thermo Fisher Scientific, Inc., 3.20%, Due 5/1/2015
   
240
     
241
 
Thomson Reuters Corp., 4.70%, Due 10/15/2019
   
350
     
359
 
Time Warner Cable, Inc.,
               
8.25%, Due 2/14/2014
   
300
     
354
 
5.85%, Due 5/1/2017
   
350
     
379
 
6.75%, Due 7/1/2018
   
545
     
618
 
7.30%, Due 7/1/2038
   
1,920
     
2,214
 
Time Warner, Inc., 4.875%, Due 3/15/2020
   
160
     
159
 
Transocean, Inc., 6.80%, Due 3/15/2038
   
3,170
     
3,502
 
Tyco Electronics Group SA,
               
6.55%, Due 10/1/2017
   
2,057
     
2,305
 
7.125%, Due 10/1/2037
   
1,750
     
1,967
 
Tyco International Finance SA,
               
4.125%, Due 10/15/2014
   
175
     
183
 
8.50%, Due 1/15/2019
   
385
     
488
 
Unilever Capital Corp., 7.125%, Due 11/1/2010
   
2,000
     
2,066
 
 
See accompanying notes
 
 
15
 
 
 
 

 

 
American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Union Pacific Corp., 7.875%, Due 1/15/2019
 
$
350
   
$
428
 
United Technologies Corp.,
               
6.125%, Due 2/1/2019
   
190
     
218
 
6.125%, Due 7/15/2038
   
210
     
235
 
Valero Energy Corp.,
               
9.375%, Due 3/15/2019
   
155
     
190
 
6.625%, Due 6/15/2037
   
185
     
186
 
Verizon Communications, Inc.,
               
5.50%, Due 4/1/2017
   
350
     
378
 
6.90%, Due 4/15/2038
   
275
     
312
 
Verizon Wireless Capital, LLC,
               
3.75%, Due 5/20/2011
   
360
     
371
 
8.50%, Due 11/15/2018
   
515
     
652
 
Viacom, Inc., 6.875%, Due 4/30/2036
   
2,880
     
3,150
 
Vodafone Group plc, 6.15%, Due 2/27/2037
   
365
     
380
 
Wal-Mart Stores, Inc.,
               
7.55%, Due 2/15/2030
   
350
     
442
 
6.50%, Due 8/15/2037
   
1,340
     
1,532
 
Waste Management, Inc.,
               
7.375%, Due 3/11/2019
   
255
     
303
 
6.125%, Due 11/30/2039
   
155
     
161
 
Wyeth Corp., 5.50%, Due 2/1/2014
   
890
     
987
 
Xerox Corp.,
               
5.65%, Due 5/15/2013
   
75
     
81
 
8.25%, Due 5/15/2014
   
160
     
187
 
               
             
93,582
 
               
Other Government - 0.04%
               
Province of Ontario Canada, 4.10%, Due 6/16/2014
   
350
     
371
 
               
                 
Utilities — 1.42%
               
Columbus Southern Power Co., 5.50%, Due 3/1/2013
   
660
     
717
 
Consolidated Edison Co. of New York, Inc., 5.50%, Due 12/1/2039
   
350
     
349
 
Dominion Resources, Inc.,
               
Series A, 5.60%, Due 11/15/2016
   
500
     
546
 
Series D, 8.875%, Due 1/15/2019
   
120
     
154
 
Duke Energy Carolinas LLC, 5.10%, Due 4/15/2018
   
350
     
370
 
Duke Energy Indiana, Inc., 6.05%, Due 6/15/2016
   
520
     
581
 
Energy Transfer Partners LP,
               
8.50%, Due 4/15/2014
   
605
     
710
 
9.00%, Due 4/15/2019
   
260
     
325
 
Enterprise Products Operating LLC,
               
5.65%, Due 4/1/2013
   
505
     
546
 
6.125%, Due 10/15/2039
   
310
     
317
 
Exelon Generation Co. LLC, 6.25%, Due 10/1/2039
   
310
     
323
 
FirstEnergy Solutions Corp., 4.80%, Due 2/15/2015
   
175
     
181
 
MidAmerican Energy Holdings Co.,
               
5.875%, Due 10/1/2012
   
960
     
1,051
 
6.125%, Due 4/1/2036
   
350
     
365
 
Pacific Gas & Electric Co., 6.25%, Due 12/1/2013
   
175
     
198
 
Progress Energy, Inc., 4.875%, Due 12/1/2019
   
350
     
350
 
Public Service Enterprise Group, Inc., 6.95%, Due 6/1/2012
   
845
     
931
 
Sempra Energy, 6.50%, Due 6/1/2016
   
315
     
358
 
Southern Power Co., 6.25%, Due 7/15/2012
   
705
     
772
 
Spectra Energy Capital Corp., 5.65%, Due 3/1/2020
   
310
     
326
 
Spectra Energy Capital LLC, 5.668%, Due 8/15/2014
   
310
     
336
 
TransCanada PipeLines Ltd., 7.625%, Due 1/15/2039
   
340
     
423
 
Union Electric Co., 6.70%, Due 2/1/2019
   
345
     
392
 
Virginia Electric and Power Co., 5.40%, Due 4/30/2018
   
350
     
379
 
Westar Energy, Inc., 6.00%, Due 7/1/2014
   
175
     
195
 
Wisconsin Electric Power Co., 6.25%, Due 12/1/2015
   
570
     
657
 
Xcel Energy, Inc., 5.613%, Due 4/1/2017
   
869
     
931
 
               
             
12,783
 
               
Total Corporate Obligations
           
155,289
 
               
                 
MUNICIPAL SECURITIES - 0.27%
               
Municipal Obligations - 0.27%
               
Municipal Electric Authority of Georgia,
               
6.637%, Due 4/1/2057
   
1,420
     
1,489
 
6.655%, Due 4/1/2057
   
710
     
746
 
 
See accompanying notes
 
 
16
 
 
 
 

 

 
American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
State of Illinois, 1.823%, Due 1/1/2011
 
$
200
   
$
201
 
               
Total Municipal Securities
           
2,436
 
               
                 
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS - 1.25%
               
Commercial Mortgage Backed Securities - 1.25%
               
Banc of America Commercial Mortgage, Inc.,
               
2005-6 A1, 5.001%, Due 9/10/2047
   
261
     
262
 
2007-2 A2, 5.634%, Due 4/10/2049
   
700
     
727
 
Bear Stearns Commercial Mortgage Securities, Inc.,
               
2006-PWR14 A4, 5.201%, Due 12/11/2038
   
665
     
672
 
2006-PW13 A4, 5.54%, Due 9/11/2041
   
1,420
     
1,469
 
2004-PWR5 A4, 4.831%, Due 7/11/2042
   
2,010
     
2,044
 
Citigroup Commercial Mortgage Trust, 2004-C2 A3, 4.38%, Due 10/15/2041
   
995
     
1,011
 
Citigroup/Deutsche Bank Commercial Mortgage Trust, 2007-CD5 A4, 5.886%, Due 11/15/2044
   
930
     
941
 
JP Morgan Chase Commercial Mortgage Securities Corp.,
               
2004-CBX A4, 4.529%, Due 1/12/2037
   
555
     
568
 
2005-LDP1 A2, 4.625%, Due 3/15/2046
   
437
     
445
 
2007-CB19 A4, 5.937%, Due 2/12/2049
   
550
     
558
 
2007-CB20 A2, 5.629%, Due 2/12/2051
   
700
     
723
 
LB-UBS Commercial Mortgage Trust, 2007-C1 A4, 5.424%, Due 2/15/2040
   
500
     
494
 
Prime Mortgage Trust, 2005-2, 5.25%, Due 7/25/2020
   
1,085
     
1,071
 
Wachovia Bank Commercial Mortgage Trust, 2007-C32 A2, 5.924%, Due 6/15/2049
   
330
     
340
 
               
Total Non-Agency Mortgage-Backed Obligations
           
11,325
 
               
                 
ASSET-BACKED SECURITIES - 1.00%
               
American Express Credit Account Master Trust, 2006-2 A, 5.35%, Due 1/15/2014
   
1,400
     
1,470
 
Bank of America Auto Trust, 2010-1A A2, 0.75%, Due 6/15/2012 ‡
   
650
     
650
 
BMW Floorplan Master Owner Trust, 2009-1A A, 1.404%, Due 9/15/2014 ‡ #
   
350
     
350
 
Capital One Multi-Asset Execution Trust, 2006-A10 A10, 5.15%, Due 6/15/2014
   
1,050
     
1,107
 
Citibank Credit Card Issuance Trust, 2009-A2 A2, 1.804%, Due 5/15/2014 #
   
650
     
668
 
Discover Card Master Trust, 2009-A2 A, 1.53%, Due 2/17/2015 #
   
200
     
204
 
Ford Credit Auto Lease Trust, 2010-A A2, 1.04%, Due 3/15/2013 ‡
   
950
     
949
 
Ford Credit Floorplan Master Owner Trust, 2009-2 A, 1.804%, Due 9/15/2014 #
   
350
     
353
 
Harley-Davidson Motorcycle Trust, 2009-4 A3, 1.87%, Due 2/15/2014
   
350
     
353
 
Honda Auto Receivables Owner Trust, 2009-3 A4, 3.30%, Due 9/15/2015
   
470
     
487
 
Hyundai Auto Receivables Trust, 2009-A A4, 3.15%, Due 3/15/2016
   
270
     
279
 
John Deere Owner Trust,
               
2009-A A3, 2.59%, Due 10/15/2013
   
480
     
487
 
2009-A A4, 3.96%, Due 5/16/2016
   
265
     
278
 
Nissan Master Owner Trust Receivables, 2010-2A A, 1.404%, Due 1/15/2015 ‡ #
   
650
     
652
 
Volkswagen Auto Loan Enhanced Trust,
               
2010-1 A2, 0.66%, Due 5/21/2012
   
325
     
325
 
2008-2 A4A, 6.24%, Due 7/20/2015
   
400
     
443
 
               
Total Asset-Backed Securities
           
9,055
 
               
                 
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 5.54%
               
Federal Home Loan Mortgage Corporation - 2.03%
               
4.50%, Due 3/1/2019
   
557
     
584
 
5.00%, Due 10/1/2020
   
221
     
235
 
5.00%, Due 4/1/2023
   
850
     
900
 
5.00%, Due 8/1/2033
   
1,200
     
1,255
 
5.50%, Due 2/1/2034
   
1,010
     
1,071
 
5.00%, Due 3/1/2034
   
907
     
947
 
6.00%, Due 6/1/2034
   
646
     
703
 
6.00%, Due 8/1/2034
   
524
     
568
 
5.00%, Due 8/1/2035
   
844
     
878
 
5.00%, Due 9/1/2035
   
1,661
     
1,728
 
6.00%, Due 8/1/2036
   
626
     
672
 
5.50%, Due 11/1/2036
   
854
     
904
 
5.50%, Due 4/1/2037
   
1,085
     
1,148
 
5.50%, Due 5/1/2037
   
596
     
630
 
6.00%, Due 9/1/2037
   
362
     
389
 
5.50%, Due 12/1/2037
   
851
     
900
 
5.00%, Due 3/1/2038
   
1,301
     
1,350
 
6.00%, Due 3/1/2038
   
1,855
     
1,988
 
5.50%, Due 5/1/2038
   
461
     
487
 
5.50%, Due 10/1/2039
   
896
     
947
 
               
             
18,284
 
               
Federal National Mortgage Association - 2.85%
               
5.50%, Due 2/1/2014
   
169
     
182
 
6.00%, Due 4/1/2016
   
181
     
195
 
5.00%, Due 12/1/2017
   
516
     
550
 
 
See accompanying notes
 
 
17
 
 
 

 
 

American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
4.50%, Due 9/1/2018
 
$
328
   
$
346
 
4.00%, Due 8/1/2020
   
687
     
714
 
5.00%, Due 12/1/2023
   
459
     
485
 
5.00%, Due 3/1/2024
   
523
     
553
 
4.50%, Due 4/1/2024
   
646
     
673
 
5.00%, Due 3/1/2034
   
1,271
     
1,327
 
4.50%, Due 9/1/2034
   
606
     
618
 
5.50%, Due 12/1/2035
   
691
     
731
 
5.50%, Due 1/1/2036
   
881
     
931
 
5.00%, Due 2/1/2036
   
611
     
636
 
5.50%, Due 2/1/2036
   
619
     
654
 
5.00%, Due 3/1/2036
   
1,111
     
1,156
 
5.50%, Due 4/1/2036
   
820
     
867
 
6.00%, Due 9/1/2036
   
680
     
726
 
6.50%, Due 9/1/2036
   
1,283
     
1,394
 
5.50%, Due 12/1/2036
   
1,114
     
1,176
 
5.50%, Due 2/1/2037
   
1,108
     
1,170
 
5.50%, Due 8/1/2037
   
796
     
843
 
5.50%, Due 3/1/2038
   
1,871
     
1,973
 
5.00%, Due 4/1/2038
   
3,494
     
3,622
 
5.00%, Due 6/1/2038
   
1,639
     
1,700
 
5.50%, Due 6/1/2038
   
2,002
     
2,111
 
6.00%, Due 9/1/2038
   
402
     
428
 
               
             
25,761
 
               
Government National Mortgage Association - 0.66%
               
7.00%, Due 12/15/2025
   
226
     
253
 
4.201%, Due 8/16/2026
   
512
     
524
 
6.50%, Due 8/15/2027
   
259
     
283
 
6.50%, Due 11/15/2027
   
268
     
293
 
7.50%, Due 12/15/2028
   
205
     
231
 
5.50%, Due 7/15/2033
   
682
     
731
 
6.00%, Due 12/15/2033
   
695
     
756
 
5.50%, Due 2/20/2034
   
935
     
998
 
5.50%, Due 2/15/2040
   
1,760
     
1,876
 
               
             
5,945
 
               
Total U.S. Agency Mortgage-Backed Obligations
           
49,990
 
               
                 
U.S. AGENCY OBLIGATIONS - 5.14%
               
Federal Farm Credit Bank - 0.07%
               
3.00%, Due 9/22/2014
   
600
     
614
 
               
                 
Federal Home Loan Mortgage Corporation - 2.67%
               
4.50%, Due 1/15/2015
   
22,140
     
24,034
 
               
                 
Federal National Mortgage Association - 2.38%
               
5.125%, Due 1/2/2014
   
645
     
705
 
4.625%, Due 10/15/2014
   
1,000
     
1,092
 
6.25%, Due 5/15/2029
   
12,200
     
14,282
 
6.00%, Due 4/18/2036
   
5,065
     
5,416
 
               
             
21,495
 
               
Tennessee Valley Authority - 0.02%
               
5.25%, Due 9/15/2039
   
170
     
173
 
               
Total U.S. Agency Obligations
           
46,316
 
               
                 
U.S. TREASURY OBLIGATIONS - 4.67%
               
1.375%, Due 2/15/2012
   
4,025
     
4,062
 
2.375%, Due 2/28/2015
   
4,150
     
4,153
 
4.25%, Due 8/15/2015
   
1,900
     
2,066
 
3.00%, Due 9/30/2016
   
1,000
     
1,001
 
3.125%, Due 10/31/2016
   
6,500
     
6,549
 
3.75%, Due 11/15/2018
   
4,000
     
4,086
 
3.625%, Due 2/15/2020
   
8,605
     
8,579
 
7.875%, Due 2/15/2021
   
1,200
     
1,635
 
6.25%, Due 8/15/2023
   
800
     
978
 
6.875%, Due 8/15/2025
   
580
     
756
 
5.25%, Due 11/15/2028
   
750
     
837
 
5.375%, Due 2/15/2031
   
775
     
880
 
4.75%, Due 2/15/2037
   
130
     
136
 
4.50%, Due 5/15/2038
   
2,370
     
2,369
 
4.50%, Due 8/15/2039
   
1,800
     
1,791
 
4.375%, Due 11/15/2039
   
2,260
     
2,203
 
               
Total U.S. Treasury Obligations
           
42,081
 
               
                 
   
Shares
       
SHORT TERM INVESTMENTS - 3.77%
               
American Beacon U.S. Government Money Market Select Fund §
   
5,000,000
     
5,000
 
JPMorgan U.S. Government Money Market Fund
   
19,823,770
     
19,824
 
                 
   
Par
       
   
Amount
       
U.S. Treasury, 0.14%, Due 6/17/2010 ¤
 
$
2,978
     
2,977
 
0.14%, Due 7/15/2010 ¤
   
125
     
125
 
0.22%, Due 10/21/2010
   
5,000
     
4,995
 
0.01%, Due 4/7/2011
   
1,050
     
1,045
 
Total Short Term Investments
           
33,966
 
               
TOTAL INVESTMENTS 99.49% - (Cost $820,374)
           
897,196
 
OTHER ASSETS, NET OF LIABILITIES - 0.51%
           
4,583
 
                 
TOTAL NET ASSETS - 100.00%
         
$
901,779
 
               
 
See accompanying notes
 
 
18
 
 
 
 

 

 
American Beacon Balanced Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
     
   
Percentages are stated as a percent of net assets.
     
^
 
Non-income producing security.
     
 
Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to$11,490 or 1.27% 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.
     
§
 
The Fund is affiliated by having the same investment advisor.
     
¤
 
At April 30, 2010, 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
   
450
   
Jun 2010
 
$
26,627
   
$
470
 
                             
 
See accompanying notes
 
 
19
 
 

 
 

 
 
 
American Beacon Large Cap Growth Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
COMMON STOCKS - 92.89%
               
                 
CONSUMER DISCRETIONARY - 17.63%
               
Hotels, Restaurants & Leisure - 1.34%
               
Cheesecake Factory, Inc. ^
   
24,035
   
$
653
 
Yum! Brands, Inc.
   
9,600
     
407
 
               
             
1,060
 
               
Internet & Catalog Retail - 3.56%
               
Amazon.com, Inc. ^
   
4,950
     
678
 
eBay, Inc. ^
   
23,967
     
571
 
priceline.com, Inc. ^
   
6,035
     
1,582
 
               
             
2,831
 
               
Leisure Equipment & Products - 0.85%
               
Mattel, Inc.
   
29,393
     
678
 
               
                 
Media - 0.78%
               
The McGraw-Hill Companies, Inc.
   
18,460
     
622
 
               
                 
Multiline Retail - 3.72%
               
Costco Wholesale Corp.
   
9,400
     
555
 
Kohl’s Corp. ^
   
9,400
     
517
 
Nordstrom, Inc.
   
17,164
     
709
 
Target Corp.
   
20,654
     
1,175
 
               
             
2,956
 
               
Specialty Retail - 6.48%
               
Aéropostale, Inc. ^
   
25,935
     
753
 
AutoZone, Inc. ^
   
3,943
     
729
 
Dollar Tree, Inc. ^
   
12,306
     
747
 
O’Reilly Automotive, Inc. ^
   
9,450
     
462
 
Ross Stores, Inc.
   
13,299
     
745
 
Staples, Inc.
   
16,800
     
395
 
Tiffany & Co.
   
14,823
     
719
 
Urban Outfitters, Inc. ^
   
16,100
     
604
 
               
             
5,154
 
               
Textiles & Apparel - 0.90%
               
Coach, Inc.
   
17,079
     
713
 
               
Total Consumer Discretionary
           
14,014
 
               
                 
CONSUMER STAPLES - 2.49%
               
Beverages - 0.52%
               
PepsiCo, Inc.
   
6,300
     
411
 
               
                 
Household Products - 1.65%
               
Colgate-Palmolive Co.
   
8,038
     
676
 
The Procter & Gamble Co.
   
10,244
     
637
 
               
             
1,313
 
               
Personal Products - 0.32%
               
The Esteé Lauder Companies, Inc.
   
3,900
     
257
 
               
Total Consumer Staples
           
1,981
 
               
                 
ENERGY - 6.43%
               
Energy Equipment & Services - 4.00%
               
Dresser-Rand Group, Inc. ^
   
12,500
     
441
 
FMC Technologies, Inc. ^
   
6,050
     
410
 
Helmerich & Payne, Inc.
   
17,259
     
701
 
Schlumberger Ltd.
   
15,100
     
1,078
 
Transocean Ltd. ^
   
7,508
     
544
 
               
             
3,174
 
               
Oil & Gas - 2.43%
               
EOG Resources, Inc.
   
3,500
     
392
 
Occidental Petroleum Corp.
   
12,005
     
1,064
 
Peabody Energy Corp.
   
10,200
     
477
 
               
             
1,933
 
               
Total Energy
           
5,107
 
               
                 
FINANCIALS - 7.63%
               
Banks - 3.14%
               
Goldman Sachs Group, Inc.
   
9,213
     
1,338
 
JPMorgan Chase & Co.
   
27,300
     
1,162
 
               
             
2,500
 
               
Diversified Financials - 4.49%
               
Charles Schwab Corp.
   
20,100
     
388
 
Franklin Resources, Inc.
   
6,047
     
699
 
IntercontinentalExchange, Inc. ^
   
3,350
     
391
 
Invesco Ltd.
   
7,000
     
161
 
Mastercard, Inc.
   
2,050
     
508
 
Visa, Inc.
   
15,750
     
1,421
 
               
             
3,568
 
               
Total Financials
           
6,068
 
               
                 
HEALTH CARE - 10.18%
               
Biotechnology - 1.78%
               
Celgene Corp. ^
   
9,900
     
613
 
Gilead Sciences, Inc. ^
   
20,202
     
802
 
               
             
1,415
 
               
Health Care Providers & Services - 3.20%
               
AmerisourceBergen Corp.
   
23,673
     
730
 
Express Scripts, Inc. ^
   
5,400
     
541
 
McKesson Corp.
   
10,659
     
691
 
UnitedHealth Group, Inc.
   
19,368
     
587
 
               
             
2,549
 
 
See accompanying notes
 
 
20
 
 
 

 
 

American Beacon Large Cap Growth Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Pharmaceuticals - 5.20%
               
Abbott Laboratories
   
12,990
   
$
665
 
Amgen, Inc. ^
   
11,200
     
642
 
Johnson & Johnson
   
10,045
     
646
 
Medco Health Solutions, Inc. ^
   
17,200
     
1,013
 
Shire plc, ADR
   
5,800
     
382
 
Teva Pharmaceutical Industries Ltd., ADR
   
13,350
     
784
 
               
             
4,132
 
               
Total Health Care
           
8,096
 
               
                 
INDUSTRIALS - 15.66%
               
Aerospace & Defense - 1.90%
               
Lockheed Martin Corp.
   
7,831
     
665
 
United Technologies Corp.
   
11,300
     
847
 
               
             
1,512
 
               
Air Freight & Couriers - 0.51%
               
CH Robinson Worldwide, Inc.
   
6,700
     
404
 
               
                 
Commercial Services & Supplies - 1.18%
               
ITT Educational Services, Inc. ^
   
6,284
     
636
 
New Oriental Education & Technology Group, ADR ^
   
3,200
     
299
 
               
             
935
 
               
Construction & Engineering - 0.43%
               
Fluor Corp.
   
6,500
     
343
 
               
                 
Electrical Equipment - 0.36%
               
First Solar, Inc. ^
   
2,000
     
287
 
               
                 
Electronic Equipment & Instruments - 0.84%
               
Emerson Electric Co.
   
12,757
     
666
 
               
                 
Energy - 0.72%
               
Walter Energy, Inc.
   
7,131
     
576
 
               
                 
Industrial Conglomerates - 0.91%
               
3M Co.
   
8,182
     
726
 
               
                 
Machinery - 7.38%
               
Danaher Corp.
   
12,900
     
1,087
 
Deere & Co.
   
17,746
     
1,062
 
Eaton Corp.
   
9,236
     
713
 
Flowserve Corp.
   
9,773
     
1,120
 
Illinois Tool Works, Inc.
   
11,400
     
582
 
Joy Global, Inc.
   
11,004
     
625
 
Parker Hannifin Corp. ^
   
9,829
     
680
 
               
             
5,869
 
               
Road & Rail - 1.43%
               
Union Pacific Corp.
   
15,000
     
1,135
 
               
Total Industrials
           
12,453
 
               
                 
INFORMATION TECHNOLOGY - 31.19%
               
Communications Equipment - 4.37%
               
Cisco Systems, Inc. ^
   
64,379
     
1,733
 
Corning, Inc.
   
34,075
     
656
 
Juniper Networks, Inc. ^
   
7,350
     
209
 
QUALCOMM, Inc.
   
22,600
     
875
 
               
             
3,473
 
               
Computers & Peripherals - 10.91%
               
Apple Computer, Inc. ^
   
9,558
     
2,496
 
Dell, Inc. ^
   
25,200
     
408
 
EMC Corp. ^
   
59,611
     
1,133
 
Hewlett-Packard Co.
   
37,353
     
1,941
 
International Business Machines Corp.
   
5,150
     
664
 
SanDisk Corp. ^
   
16,792
     
670
 
Seagate Technology ^
   
36,959
     
679
 
Western Digital Corp. ^
   
16,568
     
681
 
               
             
8,672
 
               
Electronic Equipment & Instruments - 2.59%
               
Agilent Technologies, Inc. ^
   
9,700
     
352
 
Broadcom Corp.
   
29,670
     
1,023
 
Intel Corp.
   
29,880
     
682
 
               
             
2,057
 
               
Internet Software & Services - 2.46%
               
Baidu, Inc., ADR ^
   
630
     
434
 
Equinix, Inc. ^
   
6,700
     
675
 
Google, Inc. ^
   
1,620
     
851
 
               
             
1,960
 
               
IT Consulting & Services - 2.47%
               
Cognizant Technology Solutions Corp. ^
   
38,448
     
1,968
 
               
Semiconductor Equipment & Products - 4.09%
               
Altera Corp.
   
27,543
     
698
 
Lam Research Corp. ^
   
9,500
     
385
 
Linear Technology Corp.
   
9,500
     
286
 
Marvell Technology Group Ltd. ^
   
23,300
     
481
 
QLogic Corp. ^
   
35,648
     
691
 
Texas Instruments, Inc.
   
27,263
     
709
 
               
             
3,250
 
               
 
See accompanying notes
 
 
21
 
 
 
 

 

 
American Beacon Large Cap Growth Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                     
   
Shares
   
Value
     
   
(dollars in thousands)
     
Software - 4.30%
                   
Citrix Systems, Inc. ^
   
8,000
   
$
376
     
Microsoft Corp.
   
44,526
     
1,360
     
Oracle Corp.
   
56,107
     
1,450
     
Salesforce.com, Inc. ^
   
1,100
     
94
     
VMware, Inc. ^
   
2,300
     
142
     
                   
             
3,422
     
                   
Total Information Technology
           
24,802
     
                   
                     
MATERIALS - 1.68%
                   
Chemicals - 0.49%
                   
Ecolab, Inc.
   
7,950
     
388
     
                   
                     
Metals & Mining - 1.19%
                   
Cliffs Natural Resources, Inc.
   
9,100
     
569
     
Freeport-McMoRan Copper & Gold, Inc.
   
5,000
     
378
     
                   
             
947
     
                   
Total Materials
           
1,335
     
                   
Total Common Stocks
           
73,856
     
                   
                     
SHORT TERM INVESTMENTS - 5.76%
                   
JPMorgan U.S. Government Money Market Fund
   
4,035,007
     
4,035
     
                     
   
Par
           
   
Amount
           
U.S. Treasury,
                   
0.14%, Due 6/17/2010 ‡
 
$
193
     
193
     
0.14%, Due 7/15/2010 ‡
   
350
     
350
     
                   
Total Short Term Investments
           
4,578
     
                   
TOTAL INVESTMENTS 98.65% — (Cost $63,689)
           
78,434
     
                   
OTHER ASSETS, NET OF LIABILITIES - 1.35%
           
1,076
     
                   
                     
TOTAL NET ASSETS - 100.00%
         
$
79,510
     
 
 
     
   
Percentages are stated as a percent of net assets.
     
^
 
Non-income producing security.
     
 
At April 30, 2010, 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
   
76
   
Jun 2010
 
$
4,497
   
$
(5
)
                             
 
See accompanying notes
 
 
22
 
 
 
 

 

 
American Beacon Mid-Cap Value Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
COMMON STOCKS - 94.06%
               
                 
CONSUMER DISCRETIONARY - 18.24%
               
Auto Components - 1.65%
               
Advance Auto Parts, Inc.
   
17,300
   
$
780
 
Magna International, Inc.
   
14,050
     
923
 
               
             
1,703
 
               
Hotels, Restaurants & Leisure - 2.29%
               
International Game Technology
   
68,900
     
1,452
 
Royal Caribbean Cruises Ltd. ^
   
25,600
     
918
 
               
             
2,370
 
               
Household Durables - 3.27%
               
Fortune Brands, Inc.
   
19,125
     
1,002
 
Stanley Black & Decker, Inc.
   
38,194
     
2,374
 
               
             
3,376
 
               
Media - 1.43%
               
Omnicom Group, Inc.
   
34,525
     
1,473
 
               
                 
Multiline Retail - 1.36%
               
J.C. Penney Company, Inc.
   
47,975
     
1,399
 
               
                 
Specialty Retail - 6.77%
               
Family Dollar Stores, Inc.
   
31,900
     
1,262
 
GameStop Corp. ^
   
30,700
     
746
 
Hanesbrands, Inc. ^
   
42,800
     
1,218
 
Limited Brands, Inc.
   
43,100
     
1,155
 
Regis Corp.
   
39,625
     
758
 
Rent-A-Center, Inc. ^
   
29,200
     
754
 
Sherwin-Williams Co.
   
14,075
     
1,099
 
               
             
6,992
 
               
Textiles & Apparel - 1.47%
               
Gildan Activewear, Inc. ^
   
40,375
     
1,168
 
Sealy Corp. ^
   
93,775
     
351
 
               
             
1,519
 
               
Total Consumer Discretionary
           
18,832
 
               
                 
CONSUMER STAPLES - 3.07%
               
Food & Drug Retailing - 1.00%
               
Sysco Corp.
   
32,700
     
1,031
 
               
                 
Personal Products - 0.58%
               
Avon Products, Inc.
   
18,425
     
596
 
               
                 
Tobacco - 1.49%
               
Lorillard, Inc.
   
9,400
     
737
 
Reynolds American, Inc.
   
15,000
     
801
 
               
             
1,538
 
               
Total Consumer Staples
           
3,165
 
               
                 
ENERGY - 3.27%
               
Energy Equipment & Services - 0.36%
               
Baker Hughes, Inc. ^
   
7,577
     
377
 
               
                 
Oil & Gas - 2.91%
               
El Paso Corp.
   
83,400
     
1,009
 
Murphy Oil Corp.
   
20,200
     
1,215
 
Valero Energy Corp.
   
37,475
     
779
 
               
             
3,003
 
               
Total Energy
           
3,380
 
               
                 
FINANCIALS - 26.87%
               
Banks - 7.96%
               
Comerica, Inc.
   
30,350
     
1,275
 
Fifth Third Bancorp
   
164,450
     
2,452
 
First Horizon National Corp. ^
   
13,525
     
191
 
KeyCorp
   
64,875
     
585
 
New York Community Bancorp, Inc.
   
65,700
     
1,082
 
PNC Financial Services Group, Inc.
   
33,903
     
2,279
 
Primerica, Inc. ^
   
15,050
     
357
 
               
             
8,221
 
               
Diversified Financials - 3.64%
               
Ameriprise Financial, Inc.
   
16,300
     
756
 
Capital One Financial Corp.
   
34,700
     
1,506
 
Marshall & Ilsley Corp.
   
63,850
     
581
 
SLM Corp. ^
   
74,900
     
917
 
               
             
3,760
 
               
Insurance - 13.15%
               
Axis Capital Holdings Ltd.
   
32,900
     
1,025
 
The Chubb Corp.
   
19,200
     
1,015
 
CNO Financial Group, Inc. ^
   
92,050
     
543
 
Delphi Financial Group, Inc.
   
52,775
     
1,451
 
Fidelity National Financial, Inc.
   
72,700
     
1,104
 
Hartford Financial Services Group, Inc.
   
15,400
     
440
 
Protective Life Corp.
   
68,525
     
1,649
 
RenaissanceRe Holdings Ltd.
   
21,050
     
1,178
 
Torchmark Corp.
   
27,925
     
1,495
 
Validus Holdings Ltd.
   
28,932
     
740
 
Willis Group Holdings plc
   
72,545
     
2,499
 
XL Capital Ltd.
   
24,300
     
433
 
               
             
13,572
 
               
 
See accompanying notes
 
 
23
 
 
 
 

 

 
American Beacon Mid-Cap Value Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Real Estate - 2.12%
               
Annaly Capital Management, Inc.
   
55,300
   
$
938
 
Hospitality Properties Trust
   
47,350
     
1,254
 
               
             
2,192
 
               
Total Financials
           
27,745
 
               
                 
HEALTH CARE - 10.26%
               
Health Care Equipment & Supplies - 2.58%
               
Immucor, Inc. ^
   
56,225
     
1,204
 
Zimmer Holdings, Inc. ^
   
24,025
     
1,463
 
               
             
2,667
 
               
Health Care Providers & Services - 7.68%
               
Aetna, Inc.
   
35,425
     
1,047
 
Cardinal Health, Inc.
   
32,100
     
1,113
 
CIGNA Corp.
   
29,500
     
946
 
Coventry Health Care, Inc. ^
   
56,600
     
1,344
 
Laboratory Corp. of America Holdings ^
   
6,475
     
509
 
Mednax, Inc. ^
   
13,850
     
761
 
Omnicare, Inc.
   
46,200
     
1,284
 
Quest Diagnostics, Inc.
   
16,100
     
920
 
               
             
7,924
 
               
Total Health Care
           
10,591
 
               
                 
INDUSTRIALS - 13.51%
               
Aerospace & Defense - 5.25%
               
Goodrich Corp.
   
16,500
     
1,224
 
L-3 Communications Holdings, Inc.
   
30,750
     
2,877
 
Spirit Aerosystems Holdings, Inc. ^
   
59,650
     
1,323
 
               
             
5,424
 
               
Commercial Services & Supplies - 0.72%
               
Dun & Bradstreet Corp.
   
9,700
     
747
 
               
                 
Electrical Equipment - 0.96%
               
Cooper Industries plc
   
20,225
     
993
 
               
                 
Machinery - 5.70%
               
Brady Corp.
   
43,200
     
1,484
 
Eaton Corp.
   
19,900
     
1,536
 
Graco, Inc.
   
27,500
     
954
 
ITT Industries, Inc.
   
16,500
     
917
 
SPX Corp.
   
14,200
     
992
 
               
             
5,883
 
               
Road & Rail - 0.88%
               
Ryder System, Inc.
   
19,400
     
902
 
               
Total Industrials
           
13,949
 
               
                 
INFORMATION TECHNOLOGY - 10.51%
               
Communications Equipment - 1.15%
               
Alcatel-Lucent, ADR
   
271,398
     
860
 
Motorola, Inc. ^
   
46,300
     
328
 
               
             
1,188
 
               
Electrical Equipment - 0.73%
               
Molex, Inc.
   
33,600
     
753
 
               
                 
Electronic Equipment & Instruments - 3.00%
               
Avnet, Inc. ^
   
44,425
     
1,420
 
Tyco Electronics Ltd.
   
52,175
     
1,676
 
               
             
3,096
 
               
IT Consulting & Services - 2.51%
               
Alliance Data Systems Corp. ^
   
17,500
     
1,314
 
Computer Sciences Corp. ^
   
24,300
     
1,273
 
               
             
2,587
 
               
Semiconductor Equipment & Products - 2.02%
               
Lam Research Corp. ^
   
23,850
     
967
 
Microchip Technology, Inc.
   
38,300
     
1,119
 
               
             
2,086
 
               
Software - 1.10%
               
CA, Inc.
   
49,950
     
1,139
 
               
Total Information Technology
           
10,849
 
               
                 
MATERIALS - 0.87%
               
Containers & Packaging - 0.87%
               
Jarden Corp.
   
27,825
     
894
 
               
                 
UTILITIES - 7.46%
               
Electric Utilities - 5.12%
               
CenterPoint Energy, Inc.
   
64,600
     
928
 
Edison International
   
23,900
     
821
 
Pinnacle West Capital Corp.
   
23,100
     
863
 
PNM Resources, Inc.
   
61,425
     
835
 
Portland General Electric Co.
   
42,075
     
836
 
Xcel Energy, Inc.
   
46,300
     
1,007
 
               
             
5,290
 
               
Gas Utilities - 2.34%
               
MDU Resources Group, Inc.
   
45,450
     
964
 
Sempra Energy
   
14,925
     
734
 
 
See accompanying notes
 
 
24
 
 
 

 
 

American Beacon Mid-Cap Value Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
Spectra Energy Corp.
   
30,700
   
$
716
 
               
             
2,414
 
               
Total Utilities
           
7,704
 
               
Total Common Stocks
           
97,109
 
               
                 
                 
PREFERRED STOCKS - 0.98%
               
                 
CONSUMER DISCRETIONARY - 0.98%
               
Textiles & Apparel - 0.98%
               
Sealy Corp.
   
9,571
     
1,014
 
               
                 
SHORT TERM INVESTMENTS - 4.80%
               
JPMorgan U.S. Government Money Market Fund
   
4,145,346
     
4,145
 
                 
   
Par
         
   
Amount
         
U.S. Treasury,
               
0.14%, Due 6/17/2010 ‡
 
$
409
     
409
 
0.14%, Due 7/15/2010 ‡
   
400
     
400
 
Total Short Term Investments
           
4,954
 
               
TOTAL INVESTMENTS 99.84% — (Cost $89,541)
           
103,077
 
OTHER ASSETS, NET OF LIABILITIES - 0.16%
           
169
 
                 
TOTAL NET ASSETS - 100.00%
         
$
103,246
 
               
 
 
     
   
Percentages are stated as a percent of net assets.
     
^
 
Non-income producing security.
     
 
At April 30, 2010, security pledged as collateral for open futures contracts.
 
Futures Contracts
(dollars in thousands)
 
                                 
                           
Unrealized
 
   
Number of
   
Expiration
   
Market
   
Appreciation/
 
   
Contracts
   
Date
   
Value
   
(Depreciation)
 
Emini S&P 400 Index
   
59
   
Jun 2010
 
$
4,847
   
$
95
 
                             
 
See accompanying notes
 
 
25
 
 
 
 

 

 
 
American Beacon Funds
Statements of Assets and Liabilities
April 30, 2010 (Unaudited) (in thousands except share and per share amounts)
 
                         
   
 
   
Large Cap
   
Mid-Cap
 
   
Balanced
Fund
   
Growth Fund
   
Value Fund
 
Assets:
                       
Investments in unaffiliated securities, at value A
 
$
892,196
   
$
78,434
   
$
103,077
 
Investments in affiliated securities, at value B
   
5,000
     
     
 
Receivable for investments sold
   
1,935
     
1,758
     
180
 
Dividends and interest receivable
   
3,734
     
26
     
57
 
Receivable for fund shares sold
   
2,041
     
251
     
295
 
Receivable for tax reclaims
   
11
     
     
 
Receivable for expense reimbursement
   
     
     
1
 
Prepaid expenses
   
43
     
19
     
37
 
                   
Total assets
   
904,960
     
80,488
     
103,647
 
                   
Liabilities:
                       
Payable for investments purchased
   
1,750
     
728
     
48
 
Payable for fund shares redeemed
   
136
     
6
     
5
 
Payable for variation margin on open futures contracts
   
503
     
99
     
137
 
Management and investment advisory fees payable (Note 2)
   
557
     
112
     
173
 
Administrative service and service fees payable
   
89
     
3
     
15
 
Professional fees payable
   
16
     
11
     
10
 
Trustee fees payable
   
14
     
1
     
 
Prospectus and shareholder reports
   
70
     
13
     
9
 
Other liabilities
   
46
     
5
     
4
 
                   
Total liabilities
   
3,181
     
978
     
401
 
                   
Net Assets
 
$
901,779
   
$
79,510
   
$
103,246
 
                   
                         
Analysis of Net Assets:
                       
Paid-in-capital
   
937,353
     
90,826
     
110,250
 
Undistributed net investment income
   
4,716
     
27
     
220
 
Accumulated net realized (loss)
   
(117,582
)
   
(26,083
)
   
(20,855
)
                         
Unrealized appreciation of investments, futures contracts, and foreign currency
   
77,292
     
14,740
     
13,631
 
                   
Net assets
 
$
901,779
   
$
79,510
   
$
103,246
 
                   
Shares outstanding (no par value):
                       
Institutional Class
   
2,790,032
     
14,090
     
307,692
 
                   
Y Class
   
3,562
     
185
     
118
 
                   
Investor Class
   
8,293,519
     
N/A
     
3,406,948
 
                   
Advisor Class
   
559,404
     
N/A
     
1,917
 
                   
AMR Class
   
62,319,430
     
13,921,944
     
7,282,093
 
                   
Net asset value, offering and redemption price per share:
                       
Institutional Class
 
$
12.81
   
$
5.68
   
$
9.41
 
                   
Y Class
 
$
12.80
   
$
5.67
   
$
9.41
 
                   
Investor Class
 
$
11.85
     
N/A
   
$
9.35
 
                   
Advisor Class
 
$
12.30
     
N/A
   
$
9.29
 
                   
AMR Class
 
$
12.21
   
$
5.71
   
$
9.40
 
                   
                         
A Cost of investments in unaffiliated securities
 
$
815,374
   
$
63,689
   
$
89,541
 
B Cost of investments in affiliated securities
 
$
5,000
   
$
   
$
 
 
See accompanying notes
 
 
26
 
 
 
 

 
 
 
American Beacon Funds
Statements of Operations
Six Months ended April 30, 2010 (in thousands) (Unaudited)
 
                         
           
 
       
   
 
   
Large Cap
   
Mid-Cap
 
   
Balanced
Fund
   
Growth
Fund
   
Value Fund
 
Investment Income:
                       
                         
Dividend income from unaffiliated securities (net of foreign taxes) A
 
$
6,140
   
$
345
   
$
872
 
Dividend income from affiliated securities
   
2
     
     
 
Interest income
   
7,582
     
     
 
                   
Total investment income
   
13,724
     
345
     
872
 
                   
                         
Expenses:
                       
Management and investment advisory fees (Note 2)
   
978
     
193
     
269
 
Administrative service fees (Note 2):
                       
Institutional Class
   
46
     
     
4
 
Investor Class
   
141
     
     
40
 
Advisor Class
   
10
     
     
 
AMR Class
   
180
     
19
     
15
 
Transfer agent fees:
                       
Institutional Class
   
1
     
     
1
 
Investor Class
   
4
     
     
1
 
AMR Class
   
20
     
1
     
1
 
Custody and fund accounting fees
   
64
     
6
     
7
 
Professional fees
   
25
     
14
     
13
 
Registration fees and expenses
   
21
     
2
     
18
 
Service fees (Note 2):
                       
Investor Class
   
158
     
     
34
 
Advisor Class
   
9
     
     
 
Distribution fees- Advisor Class (Note 2)
   
8
     
     
 
Prospectus and shareholder reports
   
35
     
7
     
4
 
Trustee fees
   
27
     
2
     
3
 
Other expenses
   
34
     
5
     
5
 
                   
Total expenses
   
1,761
     
249
     
415
 
                   
Net (fees waived and expenses reimbursed)/recouped by Manager (Note 2)
   
     
     
(8
)
                   
Net expenses
   
1,761
     
249
     
407
 
                   
Net investment income
   
11,963
     
96
     
465
 
                   
Realized and unrealized gain (loss) on investments:
                       
Net realized gain (loss) from:
                       
Investments
   
5,428
     
1,899
     
193
 
Commission recapture (Note 1)
   
4
     
5
     
7
 
Futures contracts
   
3,641
     
660
     
1,135
 
Change in net unrealized appreciation or depreciation of:
                       
                   
Investments
   
70,143
     
7,017
     
17,502
 
Futures contracts
   
1,302
     
92
     
357
 
                   
Net gain on investments
   
80,518
     
9,673
     
19,194
 
                   
Net increase in net assets resulting from operations
 
$
92,481
   
$
9,769
   
$
19,659
 
                   
A Foreign taxes
 
$
   
$
2
   
$
 
 
See accompanying notes
 
 
27
 
 
 
 

 

 
American Beacon Funds
Statements of Changes in Net Assets (in thousands)
 
                                                 
   
Balanced Fund
   
Large Cap Growth Fund
   
Mid-Cap Value Fund
 
   
Six Months
   
Year
   
Six Months
   
Year
   
Six Months
   
Year
 
   
Ended
   
Ended
   
Ended
   
Ended
   
Ended
   
Ended
 
   
April 30,
   
October 31,
   
April 30,
   
October
   
April 30,
   
October
 
   
2010
   
2009
   
2010
   
31, 2009
   
2010
   
31, 2009
 
   
(unaudited)
         
(unaudited)
         
(unaudited)
       
Increase (Decrease) in Net Assets:
                                               
Operations:
                                               
Net investment income
 
$
11,963
   
$
26,761
   
$
96
   
$
501
   
$
465
   
$
731
 
Net realized gain (loss) on investments, futures contracts, and foreign currency transactions
   
9,073
     
(52,176
)
   
2,564
     
(13,613
)
   
1,335
     
(9,782
)
Change in net unrealized appreciation or depreciation of investments, futures contracts, and foreign currency translations
   
71,445
     
140,003
     
7,109
     
20,450
     
17,859
     
24,803
 
                                     
Net increase in net assets resulting from operations
   
92,481
     
114,588
     
9,769
     
7,338
     
19,659
     
15,752
 
                                     
Distributions to Shareholders:
                                               
Net investment income:
                                               
Institutional Class
   
(829
)
   
(1,697
)
   
     
(1
)
   
(15
)
   
(42
)
Investor Class
   
(2,602
)
   
(4,916
)
   
     
     
(161
)
   
(285
)
Advisor Class
   
(174
)
   
     
     
     
     
 
AMR Class
   
(22,873
)
   
(28,892
)
   
(342
)
   
(836
)
   
(561
)
   
(838
)
                                     
Net distributions to shareholders
   
(26,478
)
   
(35,505
)
   
(342
)
   
(837
)
   
(737
)
   
(1,165
)
                                     
Capital Share Transactions:
                                               
Proceeds from sales of shares
   
46,770
     
88,318
     
11,076
     
20,562
     
16,984
     
26,852
 
Reinvestment of dividends and distributions
   
26,424
     
35,347
     
342
     
837
     
736
     
1,163
 
Cost of shares redeemed
   
(50,150
)
   
(143,929
)
   
(12,619
)
   
(13,675
)
   
(12,607
)
   
(16,512
)
Redemption fees
   
     
     
     
     
34
     
27
 
                                     
Net increase (decrease) in net assets from capital share transactions
   
23,044
     
(20,264
)
   
(1,201
)
   
7,724
     
5,147
     
11,530
 
                                     
Net increase in net assets
   
89,047
     
58,819
     
8,226
     
14,225
     
24,069
     
26,117
 
                                     
Net Assets:
                                               
Beginning of period
   
812,732
     
753,913
     
71,284
     
57,059
     
79,177
     
53,060
 
                                     
End of Period *
 
$
901,779
   
$
812,732
   
$
79,510
   
$
71,284
   
$
103,246
   
$
79,177
 
                                     
* Includes undistributed net investment income (loss) of
 
$
4,716
   
$
19,001
   
$
27
   
$
274
   
$
220
   
$
492
 
                                     
 
See accompanying notes
 
 
28
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (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 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, and the American Beacon Mid-Cap Value 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
 
The inception date of the Y Class is March 1, 2010.
 
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 $250,000
Y Class
 
Investors making an initial investment of $100,000
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 the Manager, 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.
 
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”).
 
 
29
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
Valuation Inputs
 
 
Various inputs may be used to determine the value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
 
 
Level 1 —
 
Quoted prices in active markets for identical securities.
       
 
Level 2 —
 
Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
       
 
Level 3 —
 
Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.
 
The Funds’ investments are summarized by level based on the inputs used to determine their values. As of April 30, 2010 the investments were classified as described below: (in thousands)
 
                                 
Balanced Fund
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stock
 
$
545,954
   
$
   
$
   
$
545,954
 
Agencies
   
     
784
     
     
784
 
U.S. Treasury Obligations
   
     
42,081
     
     
42,081
 
Corporate Obligations
   
     
155,289
     
     
155,289
 
Municipal Securities
   
     
2,436
     
     
2,436
 
Non-Agency Mortgage Backed Obligations
   
     
11,325
     
     
11,325
 
Asset Backed Securities
   
     
9,055
     
     
9,055
 
U.S. Agency Mortgage Backed Obligations
   
     
49,990
     
     
49,990
 
U.S. Agency Obligations
   
     
46,316
     
     
46,316
 
Short Term Investments
   
24,824
     
9,142
     
     
33,966
 
                         
Total Investments in Securities
 
$
570,778
   
$
326,418
   
$
   
$
897,196
 
                         
                                 
Futures Contracts
   
26,627
     
     
     
26,627
 
                                 
Large Cap Growth Fund
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stock
 
$
73,856
   
$
   
$
   
$
73,856
 
Short Term Investments
   
4,035
     
543
     
     
4,578
 
                         
Total Investments in Securities
 
$
77,891
   
$
543
   
$
   
$
78,434
 
                         
                                 
Futures Contracts
   
4,497
     
     
     
4,497
 
                                 
Mid-Cap Value Fund
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stock
 
$
97,109
   
$
   
$
   
$
97,109
 
Preferred Stock
   
1,014
     
     
     
1,014
 
Short Term Investments
   
4,145
     
809
     
     
4,954
 
                         
Total Investments in Securities
 
$
102,268
   
$
809
   
$
   
$
103,077
 
                         
                                 
Futures Contracts
   
4,847
     
     
     
4,847
 
 
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
 
 
30
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
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 eac h day by the exchange on which they are traded.
 
Balanced
 
Values of Derivative Instruments not accounted for as hedging instruments as of April 30, 2010 (in thousands)
 
             
   
Liability
   
Statement of Assets and Liabilities
 
Derivatives
 
Fair Value
Unrealized appreciation of investments, futures contracts, and foreign currency
 
Equity Contracts*
 
$
470
 
 
Effect of derivative instruments not accounted for as hedging instruments during the six months ended April 30, 2010 (in thousands)
 
             
Statement of Operations
 
Derivative
 
Fair Value
Net realized gain (loss) from futures contracts
 
Equity Contracts
 
$
3,641
 
Change in net unrealized appreciation or depreciation of futures contracts
 
Equity Contracts
   
1,302
 
 
Large Cap Growth
 
Values of Derivative Instruments not accounted for as hedging instruments as of April 30, 2010 (in thousands)
 
             
   
Liability
   
Statement of Assets and Liabilities
 
Derivatives
 
Fair Value
Unrealized appreciation of investments, futures contracts, and foreign currency
 
Equity Contracts*
 
$
(5
)
 
Effect of derivative instruments not accounted for as hedging instruments during the six months ended April 30, 2010 (in thousands)
 
             
Statement of Operations
 
Derivative
 
Fair Value
Net realized gain (loss) from futures contracts
 
Equity Contracts
 
$
660
 
Change in net unrealized appreciation or depreciation of futures contracts
 
Equity Contracts
   
92
 
 
Mid-Cap Value
 
Values of Derivative Instruments not accounted for as hedging instruments as of April 30, 2010 (in thousands)
 
             
   
Liability
   
Statement of Assets and Liabilities
 
Derivatives
 
Fair Value
Unrealized appreciation of investments, futures contracts, and foreign currency
 
Equity Contracts*
 
$
95
 
 
Effect of derivative instruments not accounted for as hedging instruments during the six months ended April 30, 2010 (in thousands)
 
             
Statement of Operations
 
Derivative
 
Fair Value
Net realized gain (loss) from futures contracts
 
Equity Contracts
 
$
1,135
 
Change in net unrealized appreciation or depreciation of futures contracts
 
Equity Contracts
   
357
 
 
     
*
 
Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
 
31
 
 
 

 
 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (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 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.
 
Redemption Fees
 
The AMR Class of the Mid-Cap Value Fund imposes a 2% redemption fee on certain shares held for less than 180 days. The fee is deducted from the redemption proceeds and is intended to offset the trading costs, market impact and other costs associated with short-term trading activity in the Funds. The “first-in, first-out” method is used to determine the holding period. The fee is allocated to all classes of each Fund pro-rata based on their respective net assets.
 
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 investment advisory and portfolio management 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
 
 
32
 
 
 

 
 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
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, 2010 were as follows (dollars in thousands):
 
                                 
                   
 
Amounts
 
 
Net
   
 
 
Management
 
 
 
Management
 
paid
to Investment
 
Amounts
Retained by
   
Fee Rate
 
Fee
 
Advisors
 
Manager
Balanced
   
0.175%-0.65
%
 
$
978
   
$
765
   
$
213
 
Large Cap Growth
   
0.30%-0.60
%
   
193
     
175
     
18
 
Mid-Cap Value
   
0.35%-0.90
%
   
269
     
246
     
23
 
 
Administrative Services Agreement
 
The Manager and the Trust entered into an Administrative Services Agreement which obligates the Manager to provide or oversee administrative services to the Funds. As compensation for performing the duties required under the Administrative Services Agreement, the Manager receives an annualized fee of 0.30% of the average daily net assets of the Institutional, Y, 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 Y, Investor and Advisor Classes. As compensation for performing the duties required under the Service Plans, the Manager receives 0.10% of the average daily net assets of the Y Class, 0.25% of the average daily net assets of the Advisor Class and up to 0.375% of the average daily net assets of the Investor Class of each Fund.
 
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”). 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 average daily net assets. During the six months ended April 30, 2010, fees earned by the Manager as a result of the Balanced Fund’s investment in the Select Funds was $2,479.
 
 
33
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (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, 2010, the Large Cap Growth Fund borrowed from the USG Select Fund on average $1,547,218 for two days at 0.77% with interest charges of $65.
 
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, 2010, the Manager waived or reimbursed expenses as follows:
 
                             
       
Expense Cap
   
       
11/1/09
 
3/1/10
 
Waived or
       
to
 
to
 
Reimbursed
Fund
 
Class
 
2/28/10
 
4/30/10
 
Expenses
Mid-Cap Value
 
Institutional
   
0.98
%
   
0.98
%
 
$
1,136
 
Mid-Cap Value
 
Y
   
     
1.08
%
   
 
Mid-Cap Value
 
Investor
   
1.23
%
   
1.23
%
   
6,833
 
Mid-Cap Value
 
Advisor
   
1.50
%
   
1.49
%
   
4
 
 
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, 2010, 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 does not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2009 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, 2010 and fiscal year ended October 31, 2009 were as follows (in thousands):
 
 
34
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
                                                 
   
Balanced
   
Large Cap Growth
   
Mid-Cap Value
 
   
Six Months
           
Six Months
           
Six Months
       
   
Ended
   
Year Ended
   
Ended
   
Year Ended
   
Ended
   
Year Ended
 
   
April 30,
   
October 31,
   
April 30,
   
October 31,
   
April 30,
   
October 31,
 
   
2010
   
2009
   
2010
   
2009
   
2010
   
2009
 
   
(Unaudited)
         
(Unaudited)
         
(Unaudited)
       
Distributions paid from:
                                               
Ordinary income*
                                               
Institutional Class
 
$
829
   
$
1,697
   
$
   
$
1
   
$
15
   
$
42
 
Investor Class
   
2,602
     
4,916
     
     
     
161
     
285
 
Advisor Class
   
174
     
     
     
     
     
 
AMR Class
   
22,873
     
28,892
     
342
     
836
     
561
     
838
 
Long-term capital gain
                                               
Institutional Class
   
     
     
     
     
     
 
Investor Class
   
     
     
     
     
     
 
Advisor Class
   
     
     
     
     
     
 
AMR Class
   
     
     
     
     
     
 
                                     
Total distributions paid
 
$
26,478
   
$
35,505
   
$
342
   
$
837
   
$
737
   
$
1,165
 
                                     
 
 
     
*
 
For tax purposes, short-term capital gains are considered ordinary income distributions.
 
As of April 30, 2010, the components of distributable earnings on a tax basis were as follows (in thousands):
 
                         
           
Large Cap
   
Mid-Cap
 
   
Balanced
   
Growth
   
Value
 
Cost basis of investments for federal income tax purposes
 
$
852,772
   
$
64,286
   
$
98,150
 
                         
Unrealized appreciation
   
113,700
     
14,739
     
17,303
 
Unrealized depreciation
   
(69,276
)
   
(591
)
   
(4,376
)
                   
Net unrealized appreciation (depreciation)
   
44,424
     
14,148
     
12,927
 
                         
Undistributed ordinary income
   
5,337
     
28
     
220
 
Undistributed long-term gain (loss)
   
(85,815
)
   
(25,487
)
   
(20,247
)
Other temporary differences
   
480
     
(5
)
   
96
 
                   
                         
Distributable earnings (losses)
 
$
(35,574
)
 
$
(11,316
)
 
$
(7,004
)
                   
 
Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation/(depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains/(losses) on certain derivative instruments, book amortization for premiums, 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, 2010 (in thousands):
 
                         
           
Large Cap
 
Mid-Cap
   
Balanced
 
Growth
 
Value
Paid-in-capital
 
$
   
$
   
$
(1
)
Undistributed net investment income
   
230
     
(1
)
   
 
Accumulated net realized gain (loss)
   
(230
)
   
1
     
1
 
Unrealized appreciation (depreciation) of investments, futures contracts and foreign currency
   
     
     
 
 
35
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
At April 30, 2010 capital loss carry forward positions for federal income tax purposes were as follows (in thousands):
 
                         
Fund
 
2016
 
2017
 
Total
Balanced
 
$
60,916
   
$
24,427
   
$
85,343
 
Large Cap Growth
   
12,629
     
12,863
     
25,492
 
Mid-Cap Value
   
11,754
     
8,397
     
20,151
 
 
The Balanced, Large Cap Growth, and Mid-Cap Value Funds utilized $7,625, $2,424, and $1,624, respectively of net capital loss carryovers for the six months ended April 30, 2010.
 
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, 2010 were as follows (in thousands):
 
                         
           
Large
   
           
Cap
 
Mid-Cap
   
Balanced
 
Growth
 
Value
Purchases (excluding U.S. government securities)
 
$
172,152
   
$
34,756
   
$
21,954
 
Sales and maturities (excluding U.S. government securities)
   
152,407
     
36,523
     
14,909
 
Purchases of U.S. government securities
   
52,236
     
     
 
Sales and maturities of U.S. government securities
   
40,753
     
     
 
 
A summary of the Funds’ direct transactions in the Select Funds for the six months ended April 30, 2010 is set forth below (in thousands):
 
                                     
       
October 31, 2009
                 
April 30, 2010
   
 
Affiliate
 
Shares/Market Value
 
 
Purchases
 
 
Sales
 
Shares/Market Value
Balanced
 
USG Select Fund
 
$
5,000
     
     
   
$
5,000
 
 
5. 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, 2010
 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
Balanced Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
586
   
$
7,342
     
4
   
$
46
     
1,516
   
$
17,496
 
Reinvestment of dividends
   
68
     
818
     
     
     
230
     
2,559
 
Shares redeemed
   
(384
)
   
(4,752
)
   
     
     
(2,115
)
   
(24,046
)
                                     
Net increase (decrease) in shares outstanding
   
270
   
$
3,408
     
4
   
$
46
     
(369
)
 
$
(3,991
)
                                     
 

 
                                 
   
Advisor Class
   
AMR Class
 
Balanced Fund
 
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
67
   
$
788
     
1,791
   
$
21,098
 
Reinvestment of dividends
   
15
     
174
     
1,994
     
22,873
 
Shares redeemed
   
(123
)
   
(1,451
)
   
(1,680
)
   
(19,901
)
                         
Net increase (decrease) in shares outstanding
   
(41
)
 
$
(489
)
   
2,105
   
$
24,070
 
                         
 
36
 
 
 
 

 
 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
                                                 
   
Institutional Class
   
Y Class
   
AMR Class
 
Large Cap Growth Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
   
$
     
   
$
1
     
1,998
   
$
11,075
 
Reinvestment of dividends
   
     
     
     
     
63
     
342
 
Shares redeemed
   
(12
)
   
(66
)
   
     
     
(2,359
)
   
(12,553
)
                                     
Net increase (decrease) in shares outstanding
   
(12
)
 
$
(66
)
   
   
$
1
     
(298
)
 
$
(1,136
)
                                     
 
 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
Mid-Cap Value Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
37
   
$
310
     
   
$
1
     
480
   
$
4,140
 
Reinvestment of dividends
   
2
     
14
     
     
     
20
     
161
 
Shares redeemed
   
(21
)
   
(173
)*
   
     
*
   
(194
)
   
(1,616
)*
                                     
Net increase in shares outstanding
   
18
   
$
151
     
   
$
1
     
306
   
$
2,685
 
                                     
 
 
                                 
   
Advisor Class
   
AMR Class
 
Mid-Cap Value Fund
 
Shares
   
Amount
   
Shares
   
Amount
 
                         
Shares sold
   
1
   
$
9
     
1,440
   
$
12,524
 
Reinvestment of dividends
   
     
     
68
     
561
 
Shares redeemed
   
     
*
   
(1,292
)
   
(10,784
)*
                         
Net increase in shares outstanding
   
1
   
$
9
     
216
   
$
2,301
 
                         
 
 
     
*
 
Net of Redemption Fees
 
Period Ended October 31, 2009
 
                                                                 
   
Institutional Class
   
Investor Class
   
Advisor Class
   
AMR Class
 
Balanced Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
1,198
   
$
12,097
     
2,427
   
$
24,255
     
76
   
$
744
     
5,034
   
$
51,222
 
Reinvestment of dividends
   
170
     
1,684
     
517
     
4,771
     
     
     
3,047
     
28,892
 
Shares redeemed
   
(2,288
)
   
(23,603
)
   
(4,930
)
   
(47,789
)
   
(261
)
   
(2,590
)
   
(7,155
)
   
(69,947
)
                                                 
Net increase (decrease) in shares outstanding
   
(920
)
 
$
(9,822
)
   
(1,986
)
 
$
(18,763
)
   
(185
)
 
$
(1,846
)
   
926
   
$
10,167
 
                                                 
 
 
                                 
   
Institutional Class
   
AMR Class
 
Large Cap Growth Fund
 
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
27
   
$
121
     
4,528
   
$
20,441
 
Reinvestment of dividends
   
     
1
     
205
     
836
 
Shares redeemed
   
(19
)
   
(93
)
   
(3,124
)
   
(13,582
)
                         
Net increase in shares outstanding
   
8
   
$
29
     
1,609
   
$
7,695
 
                         
 
 
                                                                 
   
Institutional Class
   
Investor Class
   
Advisor Class
   
AMR Class
 
Mid-Cap Value Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
39
   
$
255
     
1,083
   
$
6,831
     
1
   
$
5
     
3,018
   
$
19,761
 
Reinvestment of dividends
   
7
     
41
     
52
     
284
     
     
     
153
     
838
 
Shares redeemed
   
(136
)
   
(792
)*
   
(834
)
   
(4,607
)*
   
     
*
   
(1,846
)
   
(11,086
)*
                                                 
Net increase (decrease) in shares outstanding
   
(90
)
 
$
(496
)
   
301
   
$
2,508
     
1
   
$
5
     
1,325
   
$
9,513
 
                                                 
 
 
     
*
 
Net of Redemption Fees
 
6. Subsequent Events
 
Management has evaluated the possibility of subsequent events existing in the Funds’ financial statements. Management has determined that there are no material events that would require disclosure in the Funds’ financial statements.
 
 
37
 
 
 

 
 
 
American Beacon Balanced Fund
Financial Highlights
(For a share outstanding throughout the period)
 
                                                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
   
Six
                                                   
Six
       
   
Months
                                                   
Months
       
   
Ended
                                           
March 1
   
Ended
   
Year Ended October
 
   
April 30,
   
Year Ended October 31,
   
to April
   
April 30,
   
31,
 
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
   
30, 2010
   
2010
   
2009
   
2008
 
   
(unaudited)
                                           
(unaudited)
   
(unaudited)
                 
Net asset value, beginning of period
 
$
11.83
   
$
10.63
   
$
16.09
   
$
15.83
   
$
15.00
   
$
14.31
   
$
12.20
   
$
10.96
   
$
9.91
   
$
15.09
 
                                                             
Income from investment operations:
                                                                               
Net investment incomeA
   
0.17
     
0.43
     
0.47
     
0.50
     
0.39
     
0.36
     
0.00
     
0.13
     
0.30
     
0.41
 
Net gains (losses) on securities (both realized and unrealized)
   
1.15
     
1.25
     
(4.70
)
   
0.90
     
1.54
     
1.11
     
0.60
     
1.07
     
1.23
     
(4.39
)
                                                             
Total income (loss) from investment operations
   
1.32
     
1.68
     
(4.23
)
   
1.40
     
1.93
     
1.47
     
0.60
     
1.20
     
1.53
     
(3.98
)
                                                             
Less distributions:
                                                                               
Dividends from net investment income
   
(0.34
)
   
(0.48
)
   
(0.44
)
   
(0.42
)
   
(0.38
)
   
(0.31
)
   
     
(0.31
)
   
(0.48
)
   
(0.41
)
Distributions from net realized gains on securities
   
     
     
(0.79
)
   
(0.72
)
   
(0.72
)
   
(0.47
)
   
     
     
     
(0.79
)
                                                             
Total distributions
   
(0.34
)
   
(0.48
)
   
(1.23
)
   
(1.14
)
   
(1.10
)
   
(0.78
)
   
     
(0.31
)
   
(0.48
)
   
(1.20
)
                                                             
Net asset value, end of period
 
$
12.81
   
$
11.83
   
$
10.63
   
$
16.09
   
$
15.83
   
$
15.00
   
$
12.80
   
$
11.85
   
$
10.96
   
$
9.91
 
                                                             
Total return
   
11.35
%B
   
16.64
%
   
(28.23
)%
   
9.31
%
   
13.60
%
   
10.53
%
   
4.92
%B
   
11.17
%B
   
16.29
%
   
(28.39
)%
                                                             
Ratios and supplemental data:
                                                                               
Net assets, end of period (in thousands)
 
$
35,741
   
$
29,808
   
$
36,557
   
$
51,399
   
$
22,587
   
$
14,122
   
$
46
   
$
98,250
   
$
94,915
   
$
105,473
 
                                                                                 
Ratios to average net assets (annualized):
                                                                               
Expenses, net of waivers
   
0.59
%
   
0.60
%
   
0.56
%
   
0.57
%
   
0.59
%
   
0.56
%
   
0.70
%C
   
0.92
%
   
0.89
%
   
0.82
%
Expenses, before waivers
   
0.59
%
   
0.60
%
   
0.56
%
   
0.57
%
   
0.59
%
   
0.56
%
   
0.77
%C
   
0.92
%
   
0.89
%
   
0.82
%
Net investment income, net of waivers
   
2.62
%
   
3.60
%
   
3.37
%
   
2.91
%
   
2.81
%
   
2.45
%
   
1.50
%C
   
2.30
%
   
3.26
%
   
3.12
%
Net investment income (loss), before waivers
   
2.62
%
   
3.60
%
   
3.37
%
   
2.91
%
   
2.81
%
   
2.45
%
   
1.44
%C
   
2.30
%
   
3.26
%
   
3.12
%
Portfolio turnover rate
   
19
%B
   
57
%
   
53
%
   
50
%
   
59
%
   
58
%
   
19
%B,D
   
19
%B
   
57
%
   
53
%
 
 
     
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, 2009 through April 30, 2010.
     
E
 
Portfolio turnover rate is for the period from November 1, 2004 through October 31, 2005.
 
38
 
 
 
 

 

 
 
 
                                                                         
                           
Advisor Class
 
                           
Six
                                       
                           
Months
                                       
                           
Ended
                                   
May 31 to
 
                           
April 30,
   
Year Ended October 31,
   
October 31,
 
2007
       
2006
   
2005
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
                           
(unaudited)
                                         
 
$
14.91
       
$
14.20
   
$
13.62
   
$
11.35
   
$
9.77
   
$
14.95
   
$
14.83
   
$
14.16
   
$
13.96
 
                                                       
 
 
                                                                       
 
0.41
         
0.35
     
0.34
     
0.15
     
0.37
     
0.34
     
0.41
     
0.38
     
0.09
 
 
 
 
0.87
         
1.44
     
1.01
     
1.09
     
1.21
     
(4.31
)
   
0.83
     
1.35
     
0.11
 
                                                       
 
 
1.28
         
1.79
     
1.35
     
1.24
     
1.58
     
(3.97
)
   
1.24
     
1.73
     
0.20
 
                                                       
                                                                         
 
 
(0.38
)
       
(0.36
)
   
(0.30
)
   
(0.29
)
   
     
(0.42
)
   
(0.40
)
   
(0.34
)
   
 
 
 
(0.72
)
       
(0.72
)
   
(0.47
)
   
     
     
(0.79
)
   
(0.72
)
   
(0.72
)
   
 
                                                       
 
(1.10
)
       
(1.08
)
   
(0.77
)
   
(0.29
)
           
(1.21
)
   
(1.12
)
   
(1.06
)
   
 
                                                       
$
15.09
       
$
14.91
   
$
14.20
   
$
12.30
   
$
11.35
   
$
9.77
   
$
14.95
   
$
14.83
   
$
14.16
 
                                                       
 
9.06
%
       
13.31
%
   
10.12
%
   
11.11
%B
   
16.17
%
   
(28.65
)%
   
8.83
%
   
12.94
%
   
1.43
%B
                                                       
                                                                         
 
$
202,750
       
$
111,837
   
$
86,875
   
$
6,879
   
$
6,812
   
$
7,674
   
$
9,504
   
$
1,562
   
$
1
 
 
 
 
                                                                       
 
0.83
%
       
0.85
%
   
0.86
%
   
1.09
%
   
1.09
%
   
1.07
%
   
1.07
%
   
1.22
%
   
1.09
%C
 
0.83
%
       
0.85
%
   
0.86
%
   
1.09
%
   
1.09
%
   
1.07
%
   
1.07
%
   
1.22
%
   
360.24
%C
 
 
2.65
%
       
2.55
%
   
2.14
%
   
2.15
%
   
3.06
%
   
2.86
%
   
2.34
%
   
2.18
%
   
1.52
%C
 
 
2.65
%
       
2.55
%
   
2.14
%
   
2.15
%
   
3.06
%
   
2.86
%
   
2.34
%
   
2.17
%
   
(357.63
)%C
 
50
%
       
59
%
   
58
%
   
19
%B
   
57
%
   
53
%
   
50
%
   
59
%
   
58
%E
 
39
 
 
 
 

 
 
American Beacon Balanced Fund
Financial Highlights
(For a share outstanding throughout the period)
 
                                                 
   
AMR Class
 
   
Six
       
   
Months
       
   
Ended
       
   
April 30,
   
Year Ended October 31,
 
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
   
(unaudited)
                                         
Net asset value, beginning of period
 
$
11.31
   
$
10.19
   
$
15.49
   
$
15.27
   
$
14.49
   
$
13.87
 
                                     
Income from investment operations:
                                               
Net investment incomeA
   
0.17
     
0.39
     
0.49
     
0.50
     
0.45
     
0.39
 
Net gains (losses) on securities (both realized and unrealized)
   
1.11
     
1.24
     
(4.52
)
   
0.89
     
1.46
     
1.05
 
                                     
Total income (loss) from investment operations
   
1.28
     
1.63
     
(4.03
)
   
1.39
     
1.91
     
1.44
 
                                     
Less distributions:
                                               
Dividends from net investment income
   
(0.38
)
   
(0.51
)
   
(0.48
)
   
(0.45
)
   
(0.41
)
   
(0.35
)
Distributions from net realized gains on securities
   
     
     
(0.79
)
   
(0.72
)
   
(0.72
)
   
(0.47
)
                                     
Total distributions
   
(0.38
)
   
(0.51
)
   
(1.27
)
   
(1.17
)
   
(1.13
)
   
(0.82
)
                                     
Net asset value, end of period
 
$
12.21
   
$
11.31
   
$
10.19
   
$
15.49
   
$
15.27
   
$
14.49
 
                                     
Total return
   
11.53
%B
   
16.95
%
   
(28.08
)%
   
9.59
%
   
13.98
%
   
10.63
%
                                     
                                                 
Ratios and supplemental data:
                                               
Net assets, end of period (in thousands)
 
$
760,863
   
$
681,197
   
$
604,209
   
$
898,584
   
$
817,333
   
$
712,073
 
                                                 
Ratios to average net assets (annualized):
                                               
Expenses, net of waivers
   
0.33
%
   
0.35
%
   
0.31
%
   
0.31
%
   
0.33
%
   
0.33
%
Expenses, before waivers
   
0.33
%
   
0.35
%
   
0.31
%
   
0.31
%
   
0.33
%
   
0.33
%
Net investment income, net of waivers
   
2.89
%
   
3.75
%
   
3.62
%
   
3.21
%
   
3.08
%
   
2.70
%
Net investment income (loss), before waivers
   
2.89
%
   
3.75
%
   
3.62
%
   
3.21
%
   
3.08
%
   
2.70
%
Portfolio turnover rate
   
19
%B
   
57
%
   
53
%
   
50
%
   
59
%
   
58
%
 

 
     
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, 2009 through April 30, 2010.
     
E
 
Portfolio turnover rate is for the period from November 1, 2004 through October 31, 2005.
 
40
 
 
 
 
 

 
 
This page intentionally left blank.
 
 
41
 
 
 
 
 

 
 
American Beacon Large Cap Growth Fund
Financial Highlights
(For a share outstanding throughout the period)
 
                                                 
   
Institutional Class
 
   
Six
       
   
Months
       
   
Ended
       
   
April 30,
   
Year Ended October 31,
 
   
2010
   
2009A
   
2008
   
2007
   
2006B
   
2005
 
   
(unaudited)
                                         
Net asset value, beginning of period
 
$
4.97
   
$
4.49
   
$
7.67
   
$
6.89
   
$
6.18
   
$
5.82
 
                                     
Income from investment operations:
                                               
Net investment income (loss)
   
0.00
G
   
0.03
     
0.05
     
0.04
     
0.04
     
0.04
 
Net gains (losses) on securities (both realized and unrealized)
   
0.72
     
0.50
     
(2.97
)
   
0.77
     
0.70
     
0.37
 
                                     
Total income (loss) from investment operations
   
0.72
     
0.53
     
(2.92
)
   
0.81
     
0.74
     
0.41
 
                                     
Less distributions:
                                               
Dividends from net investment income
   
(0.01
)
   
(0.05
)
   
(0.04
)
   
(0.03
)
   
(0.03
)
   
(0.05
)
Distributions from net realized gains on securities
   
     
     
(0.22
)
   
     
     
 
                                     
Total distributions
   
(0.01
)
   
(0.05
)
   
(0.26
)
   
(0.03
)
   
(0.03
)
   
(0.05
)
                                     
Net asset value, end of period
 
$
5.68
   
$
4.97
   
$
4.49
   
$
7.67
   
$
6.89
   
$
6.18
 
                                     
Total returnF
   
14.48
%C
   
12.09
%
   
(39.35
)%
   
11.84
%
   
12.04
%
   
7.06
%
                                     
Ratios and supplemental data:
                                               
Net assets, end of period (in thousands)
 
$
80
   
$
130
   
$
83
   
$
119
   
$
110
   
$
105
 
Ratios to average net assets (annualized):
                                               
Expenses, net of waivers
   
0.90
%
   
0.93
%
   
0.89
%
   
0.90
%
   
0.90
%
   
0.89
%
Expenses, before waivers
   
0.90
%
   
0.94
%
   
0.95
%
   
1.06
%
   
0.99
%
   
4.64
%
Net investment income (loss), net of waivers
   
0.08
%
   
0.38
%
   
0.74
%
   
0.58
%
   
0.56
%
   
(0.18
)%
Net investment income (loss), before waivers
   
0.08
%
   
0.36
%
   
0.68
%
   
0.42
%
   
0.48
%
   
(3.93
)%
Portfolio turnover rate
   
49
%C
   
147
%
   
112
%
   
128
%
   
181
%
   
164
%
 

 
     
A
 
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.
     
B
 
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.
     
C
 
Not annualized.
     
D
 
Annualized.
     
E
 
Portfolio turnover rate is for the period from November 1, 2009 through April 30, 2010.
     
F
 
May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net assets values may differ from the net asset value and returns for shareholder transactions. The total return of the Institutional Class for the year ended 2008 has been restated from (39.48%).
     
G
 
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.
 
42
 
 

 
 

 
 
 
 
 
                                                         
Y Class
       
AMR Class
 
           
Six
       
           
Months
       
March 1
       
Ended
       
to April
       
April 30,
   
Year Ended October 31,
 
30, 2010
       
2010
   
2009A
   
2008
   
2007
   
2006B
   
2005
 
(unaudited)
       
(unaudited)
                                         
$
5.41
       
$
5.00
   
$
4.52
   
$
7.72
   
$
6.95
   
$
6.21
   
$
5.84
 
                                           
                                                         
 
0.00
G
       
0.01
     
0.04
     
0.07
     
0.06
     
0.05
     
0.06
 
                                                         
 
0.27
         
0.72
     
0.51
     
(2.99
)
   
0.77
     
0.73
     
0.36
 
                                           
 
0.26
         
0.73
     
0.55
     
(2.92
)
   
0.83
     
0.78
     
0.42
 
                                           
                                                         
 
         
(0.02
)
   
(0.07
)
   
(0.06
)
   
(0.06
)
   
(0.04
)
   
(0.05
)
                                                         
 
         
     
     
(0.22
)
   
     
     
 
                                           
 
         
(0.02
)
   
(0.07
)
   
(0.28
)
   
(0.06
)
   
(0.04
)
   
(0.05
)
                                           
$
5.67
       
$
5.71
   
$
5.00
   
$
4.52
   
$
7.72
   
$
6.95
   
$
6.21
 
                                           
 
4.81
%C
       
14.70
%C
   
12.46
%
   
(39.17
)%
   
12.07
%
   
12.52
%
   
7.22
%
                                           
                                                         
$
1
       
$
79,429
   
$
71,154
   
$
56,976
   
$
101,698
   
$
82,042
   
$
63,183
 
                                                         
 
1.06
%D
       
0.66
%
   
0.63
%
   
0.59
%
   
0.60
%
   
0.59
%
   
0.64
%
 
1.12
%D
       
0.66
%
   
0.63
%
   
0.59
%
   
0.60
%
   
0.59
%
   
0.64
%
 
(0.51
)%D
       
0.25
%
   
0.86
%
   
1.05
%
   
0.85
%
   
0.88
%
   
0.98
%
 
(0.57
)%D
       
0.25
%
   
0.86
%
   
1.05
%
   
0.85
%
   
0.88
%
   
0.98
%
 
49
%C,E
       
49
%C
   
147
%
   
112
%
   
128
%
   
181
%
   
164
%
 
43
 
 
 
 
 

 
 
 
American Beacon Mid-Cap Value Fund
Financial Highlights
(For a share outstanding throughout the period)
 
                                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
   
Six
                                           
Six
   
Year
 
   
Months
                           
November
           
Months
   
Ended
 
   
Ended
                           
30 to
   
March 1
   
Ended
   
October
 
   
April 30,
   
Year Ended October 31,
   
October
   
to April
   
April 30,
   
31,
 
   
2010
   
2009
   
2008
   
2007
   
31, 2006
   
30, 2010
   
2010
   
2009
 
   
(unaudited)
                                   
(unaudited)
   
(unaudited)
         
Net asset value, beginning of period
 
$
7.57
   
$
5.94
   
$
11.01
   
$
10.81
   
$
12.09
   
$
8.48
   
$
7.54
   
$
5.92
 
                                                 
Income from investment operations:
                                                               
Net investment income
   
0.04
     
0.10
     
0.16
     
0.12
     
0.21
     
0.01
     
0.03
     
0.07
 
Net gains (losses) on securities (both realized and unrealized)
   
1.85
     
1.65
     
(4.31
)
   
0.41
     
1.25
     
0.92
     
1.83
     
1.66
 
                                                 
Total income (loss) from investment operations
   
1.89
     
1.75
     
(4.15
)
   
0.53
     
1.46
     
0.93
     
1.86
     
1.73
 
                                                 
Less distributions:
                                                               
Dividends from net investment income
   
(0.05
)
   
(0.12
)
   
(0.16
)
   
(0.07
)
   
(0.16
)
   
     
(0.05
)
   
(0.11
)
Distributions from net realized gains on securities
   
     
     
(0.76
)
   
(0.26
)
   
(2.58
)
   
     
     
 
                                                 
Total distributions
   
(0.05
)
   
(0.12
)
   
(0.92
)
   
(0.33
)
   
(2.74
)
   
     
(0.05
)
   
(0.11
)
                                                 
Redemption fees added to beneficial interestsB
   
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
     
0.00
 
Net asset value, end of period
 
$
9.41
   
$
7.57
   
$
5.94
   
$
11.01
   
$
10.81
   
$
9.41
   
$
9.35
   
$
7.54
 
                                                 
Total return C
   
25.05
%D
   
30.24
%
   
(40.86
)%
   
4.97
%
   
15.19
%D
   
10.97
%D
   
24.77
%D
   
29.93
%
                                                 
Ratios and supplemental data:
                                                               
Net assets, end of period (in thousands)
 
$
2,896
   
$
2,197
   
$
2,256
   
$
6,047
   
$
3,396
   
$
1
   
$
31,853
   
$
23,369
 
Ratios to average net assets (annualized):
                                                               
Expenses, net of waivers
   
0.97
%
   
0.98
%
   
0.98
%
   
0.92
%
   
1.19
%E
   
1.10
%E
   
1.22
%
   
1.23
%
Expenses, before waivers
   
1.06
%
   
1.13
%
   
1.16
%
   
1.09
%
   
1.19
%E
   
1.27
%E
   
1.27
%
   
1.34
%
Net investment income, net of waivers
   
0.98
%
   
1.29
%
   
1.51
%
   
1.22
%
   
1.11
%E
   
0.90
%E
   
0.73
%
   
0.98
%
Net investment income, before waivers
   
0.89
%
   
1.14
%
   
1.33
%
   
1.05
%
   
1.11
%E
   
0.72
%E
   
0.68
%
   
0.87
%
Portfolio turnover rate
   
18
%D
   
42
%
   
28
%
   
35
%
   
42
%F
   
18
%D,G
   
18
%D
   
42
%
 
 
     
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
 
Amounts represent less than $0.01 per share.
     
C
 
May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. For the Institutional Class for the years and period then ended 2008, 2007 and 2006, the total returns have been restated from (40.96%), 4.87%, and 15.30%, respectively. For the Investor Class for the year ended 2008, the total return has been restated from (41.14%). For the Advisor Class for the years and period then ended 2008 and 2007, the total returns have been restated from (41.24%) and (6.65%), respectively. For the AMR Class for the years ended 2008 and 2007, the total returns have been restated from (40.87 %) and 5.19%, respectively.
     
D
 
Not annualized.
     
E
 
Annualized.
     
F
 
Portfolio turnover rate is for the period from November 1, 2005 through October 31, 2006.
     
G
 
Portfolio turnover rate is for the period from November 1, 2009 through April 30, 2010.
     
H
 
Portfolio turnover rate is for the period from November 1, 2006 through October 31, 2007.
 
44
 
 

 
 

 
 
                                                                                                         
                           
Advisor Class
   
AMR Class (formerly Institutional Class prior to December 1, 2005)A
 
                           
Six
                           
Six
                         
                   
February
   
Months
                   
June
   
Months
                         
                   
28 to
   
Ended
   
Year Ended October
   
29 to
   
Ended
                         
                   
October
   
April 30,
   
31,
   
October
   
April 30,
   
Year Ended October 31,
 
2008
       
2007
   
31, 2006
   
2010
   
2009
   
2008
   
31, 2007
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
                         
(unaudited)
                           
(unaudited)
                                         
$
10.96
       
$
10.80
   
$
9.80
   
$
7.49
   
$
5.87
   
$
10.94
   
$
11.73
   
$
7.59
   
$
5.97
   
$
11.07
   
$
10.87
   
$
11.72
   
$
10.27
 
                                                                               
                                                                                                         
 
0.14
         
0.10
     
0.01
     
0.05
     
0.15
     
0.10
     
0.01
     
0.05
     
0.07
     
0.18
     
0.18
     
0.12
     
0.13
 
 
 
 
(4.31
)
       
0.40
     
0.99
     
1.80
     
1.60
     
(4.27
)
   
(0.80
)
   
1.84
     
1.70
     
(4.35
)
   
0.36
     
1.75
     
1.37
 
                                                                               
 
 
(4.17
)
       
0.50
     
1.00
     
1.85
     
1.75
     
(4.17
)
   
(0.79
)
   
1.89
     
1.77
     
(4.17
)
   
0.54
     
1.87
     
1.50
 
                                                                               
                                                                                                         
 
 
(0.11
)
       
(0.08
)
   
     
(0.05
)
   
(0.13
)
   
(0.14
)
   
     
(0.08
)
   
(0.15
)
   
(0.17
)
   
(0.08
)
   
(0.14
)
   
(0.05
)
 
 
(0.76
)
       
(0.26
)
   
     
     
     
(0.76
)
   
     
     
     
(0.76
)
   
(0.26
)
   
(2.58
)
   
 
                                                                               
 
(0.87
)
       
(0.34
)
   
     
(0.05
)
   
(0.13
)
   
(0.90
)
   
     
(0.08
)
   
(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
     
0.00
     
0.00
     
0.00
     
0.00
 
$
5.92
       
$
10.96
   
$
10.80
   
$
9.29
   
$
7.49
   
$
5.87
   
$
10.94
   
$
9.40
   
$
7.59
   
$
5.97
   
$
11.07
   
$
10.87
   
$
11.72
 
                                                                               
 
(41.04
)%
       
4.68
%
   
10.20
%D
   
24.82
%D
   
30.64
%
   
(41.28
)%
   
(6.73
)%D
   
25.01
%D
   
30.56
%
   
(40.82
)%
   
5.09
%
   
19.16
%
   
14.63
%
                                                                               
                                                                                                         
 
$
 
16,550
       
$
43,158
   
$
27,240
   
$
18
   
$
7
   
$
1
   
$
1
   
$
68,478
   
$
53,604
   
$
34,253
   
$
78,794
   
$
66,290
   
$
44,342
 
 
 
                                                                                                       
 
1.23
%
       
1.23
%
   
1.49
%E
   
1.45
%
   
1.50
%
   
1.50
%
   
1.50
%E
   
0.77
%
   
0.83
%
   
0.82
%
   
0.75
%
   
0.97
%
   
1.01
%
 
1.32
%
       
1.26
%
   
1.61
%E
   
1.53
%
   
1.58
%
   
2.04
%
   
1.80
%E
   
0.77
%
   
0.82
%
   
0.82
%
   
0.75
%
   
0.92
%
   
1.02
%
 
 
1.27
%
       
0.93
%
   
0.57
%E
   
0.48
%
   
0.22
%
   
1.02
%
   
0.32
%E
   
1.18
%
   
1.38
%
   
1.68
%
   
1.41
%
   
1.38
%
   
0.92
%
 
 
1.18
%
       
0.90
%
   
0.44
%E
   
0.40
%
   
0.14
%
   
0.48
%
   
0.02
%E
   
1.18
%
   
1.38
%
   
1.68
%
   
1.40
%
   
1.42
%
   
0.91
%
 
28
%
       
35
%
   
42
%F
   
18
%D
   
42
%
   
28
%
   
35
%H
   
18
%D
   
42
%
   
28
%
   
35
%
   
42
%
   
298
%
 
45
 
 

 
 
 
 

 
 
 
 
Delivery of Documents
 
 
To reduce expenses, your financial institution may mail only one copy of the Prospectus, Annual Report and Semi-Annual Report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your financial institution. Delivery of individual copies will commence thirty days after receiving your request.
 
 
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
 
 
To obtain more information about the Fund:
 
     
     
 
By E-mail:
 
On the Internet:
american_beacon.funds@ambeacon.com
 
Visit our website at www.americanbeaconfunds.com
     
 
By Telephone:
 
By Mail:
Institutional, Y, Investor, and Advisor Classes
 
American Beacon Funds
Call (800) 658-5811
 
P.O. Box 219643
AMR ClassSM
 
Kansas City, MO 64121-9643
Call (800) 345-2345
   
 

 
     
     
Availability of Quarterly Portfolio Schedules
 
Availability of Proxy Voting Policy and Records
     
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference 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.
 
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, LLC
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 Balanced Fund, American Beacon Large Cap Growth Fund, and American Beacon Mid-Cap Value Fund are service marks of American Beacon Advisors, Inc.
 
 
SAR 04/10
 
 
00074813
 
 
 
 

 
 
 
 
 
 

 
 
 
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
 
         
Retirement Income and Appreciation Fund
   
22
 
         
Internediate Bond Fund
   
29
 
         
Short-Term Bond Fund
   
40
 
 
 
     
     
Additional Information
 
Back Cover
 
 
 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. The four highest Moody’s ratings for long-term obligations (or issuers thereof) are Aaa, Aa, A and Baa. Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk. Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. Obligations rated A are considered upper-medium g rade and are subject to low credit risk. Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics. Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
 
 
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.
 
 

 
 

 
 
 
 
 
Fellow Shareholders,
 
 
Over the past six months, one universal theme seems to have emerged: while sudden and significant volatility may characterize the new economic world order, it doesn’t mean investors can’t benefit. Opportunity abounds for those who know how to capitalize on it.
 
Fortunately, this theme also underlies our investment philosophy at American Beacon:
 
With portfolios invested for the new economic reality—and conservatively managed for the longer term—we believe investors are better positioned to ride out the inevitable economic storms, whenever and wherever they occur.
 
It’s a philosophy that has served our shareholders well. It also explains how, in the face of continued weakness in the U.S. job and housing markets and mounting sovereign debt worries in Europe, our bond funds were able to produce positive returns.
 
For the six months ended April 30, 2010, the American Beacon High Yield Bond Fund (Institutional Class) returned 10.48%. The American Beacon Retirement Income & Appreciation Fund (Investor Class) generated 3.30%. The American Beacon Intermediate Bond Fund (Institutional Class) rose 2.31% while the American Beacon Short-Term Bond Fund (Institutional Class) generated a positive 1.63% return.
 
As global volatility has become the new norm, our focus at American Beacon remains trained on anticipating opportunities and meeting the challenges investors face today and will likely face tomorrow. This is what drives the composition of our fund line-up and the development of our new offerings in the last year.
 
It’s also a reflection of our commitment to you, a commitment we summarize as: Oversight 360°. Ours is a continuous commitment to cast a watchful and analytical eye over all the factors that influence our fellow shareholders’ investments.
 
As you review the enclosed market overview, portfolio listings, and detailed financial data, please know that 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 investment in the American Beacon Funds and know that we remain dedicated to offering you and your advisor the level of service and broad range of well-managed investment products you’ve come to expect from us.
 
 
Sincerely,
 
 
 
     
     
   
Sincerely,
     
   
   
Gene L. Needles, Jr.
   
President
   
American Beacon Funds
 
 
 
1
 
 
 
 

 

 
Domestic Bond Market Overview
April 30, 2010 (Unaudited)
 
 
During the six months ended April 30, 2010, the domestic bond market continued on the path of recovery that it began in early 2009. All of the credit sectors in the Barclays Aggregate Index outperformed treasuries as investors persisted in their search for yield. Still, the treasury sector managed to produce positive returns, but it underperformed the other sectors as the markets remained focused on the large U.S. budget deficits and escalating U.S. Treasury issuance.
 
The corporate bond market performed well as credit spreads tightened during the period, though they did so at a slower pace than in early 2009. Corporate issuers benefitted from the stabilizing economy and improving credit fundamentals, they also gained from the lack of attractive alternatives for investors. As the U.S. Treasury Department flooded the market with new securities and the Federal Reserve Bank purchased the bulk of new mortgage securities, investors focused on searching for other credit sectors for relative value.
 
Inflation concerns arose periodically throughout the reporting period, but with the unemployment rate hovering near the 10% level, and a moribund housing market, inflation fears have not yet taken hold.
 
Concerns regarding the potential impact from the tenuous situation in Europe also became a factor in the later part of the reporting period. Several smaller countries in the European Union are facing large debt balances and budget deficits resulting from stimulus spending and weak economies. These fiscal imbalances have attracted the attention of investors who are demanding a response. Despite the media focus and concerns, as of April 30, 2010, investors appeared hopeful the situation would not spread to other countries and regions. The European volatility lead to a rise in the U.S. dollar (versus the euro) and to a flight to quality, which boosted U.S. Treasury securities prices.
 
Also during the reporting period, Congress turned its attention away from stabilizing the economy to berating the banking sector. With credit trends finally improving, bankers faced a new challenge—defending their business models from politicians and regulators. The securities markets took the ensuing headlines in stride, but the nature of any reform that might result remains a point of unease for investors.
 
Overall, the bond market performed well throughout the reporting period as the economy continued to improve and investors continued to search for value. The credit sectors recovered most of the ground they lost during the financial crisis. A sense of normalcy returned, but investors were reminded of the still tenuous state of the global economy and the interdependence of the global capital markets as the news of endangered sovereign debt in Europe’s peripheral nations spread.
 
 
2
 
 
 
 

 

 
High Yield Bond Market Overview
April, 30 2010 (Unaudited)
 
 
During the six-month period ending April 30, 2010, the high yield market continued the recovery it began in late 2008 as the JPMorgan Global High-Yield Index returned 11.8%. Spreads were much tighter at the beginning of the reporting period than they were during the height of the financial crisis, but were still above historical average levels. Accordingly, as signs of fundamental economic improvement became more pronounced throughout the six-month period, spreads on high yield bonds continued to tighten. The exception occurred during a brief period of weakness in January and February when Greece’s debt problems caused a temporary investor aversion to most risky asset classes, including high yield corporate bonds. However, that weakness was short-lived, and market spreads conti nued to tighten through the end of the period. The high yield market ended the period with spreads just inside 6%, tighter than the 7.5% at which they started, but roughly in-line with the longer-term historical average.
 
Spreads were also aided by the fact that earnings continued to improve throughout the period. Many bond issuers posted significant year-over-year gains during the fourth quarter of 2009 and into the first quarter of 2010. The improved earnings, combined with generally robust capital markets, enabled high yield borrowers to issue debt to refinance shorter-term maturities and to replace bank loans that had troublesome covenants. As a result, new issuance was heavy, but strong demand was able to absorb the supply as investors searching for yield or seeking an alternative to equities continued to pour money into the high yield corporate market throughout the reporting period. Consequently, the favorable technical environment, combined with the improved fundamental economic outlook, generated a double-digit total return for the high yield asse t class.
 
 
3
 
 
 
 

 
 
Performance Overview
American Beacon High Yield Bond FundSM
April 30, 2010 (Unaudited)

The Institutional Class of the High Yield Bond Fund returned 10.48% for the six months ended April 30, 2010. The Fund underperformed the JPMorgan Global High-Yield Index (“Index”) return of 11.81% and the Lipper High Current Yield Funds Index return of 11.52% for the period.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
                           
Since
                           
Incep.
   
6 Months*
 
1 Year
 
5 Years
 
(12/29/00)
Institutional Class(1,6)
   
10.48
%
   
38.26
%
   
6.13
%
   
7.64
%
Y Class (1,2,6)
   
10.47
%
   
38.26
%
   
6.13
%
   
7.64
%
Investor Class(1,3,6)
   
10.34
%
   
37.92
%
   
5.87
%
   
7.38
%
AMR Class (1,4,6)
   
10.61
%
   
38.60
%
   
6.27
%
   
7.72
%
JPMorgan GlobaL High-Yield Index(5)
   
11.81
%
   
44.76
%
   
8.48
%
   
9.11
%
Lipper High Current Yield Funds Index(5)
   
11.52
%
   
40.82
%
   
6.23
%
   
6.34
%
 
 
     
*
 
Not annualized
     
1.
 
Performance shown is historical and may not be indicative of future returns. Please note that recent market performance has helped to produce short-term returns that are not typical and may not continue in the future. 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 six month, one-year, five-year, and since inception period represents the total returns achieved by the Institutional Class from 12/29/00 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 12/29/00.
     
3.
 
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.
     
4.
 
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.
     
5.
 
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.
     
6.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, and AMR Class shares was 0.80%, 0.90%, 1.02%, and 0.54%, 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, as well as issue selection and allocation from a sector and credit quality perspective.
 
 
From a sector standpoint, issue selections in the Finance, Cable/Media, and Energy sectors contributed to the relative underperformance, despite positive contribution from selections in the Manufacturing and Utility sectors.
 
 
From a sector allocation perspective, the Fund benefited from overweighting the Cable/Media sector (up 13.5%), but not enough to compensate for value lost through underweighting the Finance sector (up 18.1%) and overweighting the Other Corporate sector (up 5.1%).
 
 
From a credit quality perspective, issue selections in the CCC and BB-rated credit groups detracted from performance.
 
 
From a credit quality allocation perspective, underweighting the CC-rated credit group contributed to the Fund’s relative underperformance, while overweighting the CCC-rated group and underweighting the BB-rated group contributed positively for the period.
 
 
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 FundSM
April 30, 2010 (Unaudited)
 
Top Ten Holdings
 
         
   
% of
   
Net Assets
HCA, Inc., 9.625%, Due 11/15/2016
   
1.3
%
Ford Motor Credit Co. LLC, 7.500%, Due 8/1/2012
   
1.1
%
Harrah’s Operating Co., Inc., 11.250%, Due 6/1/2017
   
1.1
%
Intelsat Jackson Holdings Ltd., 11.250%, Due 6/15/2016
   
1.0
%
MacDermid, Inc., 9.500%, Due 4/15/2017
   
1.0
%
Wind Acquisition Finance S.A., 10.750%, Due 12/1/2015
   
0.9
%
JBS USA LLC, 11.625%, Due 5/14/2011
   
0.9
%
CCH II Holdings LLC, 13.500%, Due 11/30/2016
   
0.9
%
NewPage Corp., 11.375%, Due 12/31/2014
   
0.9
%
Ally Financial, Inc., 6.875%, Due 8/28/2012
   
0.8
%
 
Fixed Income Sector Allocation
 
         
   
% of
   
Fixed Income
Corporate
   
99.2
%
Convertibles
   
0.5
%
Asset-Backed
   
0.3
%
 
Equity Sector Allocation
 
         
   
% of
   
Equities
Communications
   
74.1
%
Finance
   
25.9
%
 
5
 
 
 
 

 

 
Performance Overview
American Beacon Retirement Income and Appreciation FundSM
April 30, 2010 (Unaudited)
 
 
The Investor Class of the Retirement Income and Appreciation Fund returned 3.30% for the six months ended April 30, 2010. Its benchmark, a blend of 75% Barclays Capital Aggregate and 25% BofA Merrill Lynch All U.S. Convertibles Index, returned 5.32%. The Fund’s peer group, the Lipper Intermediate Investment Grade Index, returned 4.84% for the same period.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
                           
Since
                           
Incep.
   
6 Months*
 
1 Year
 
5 Years
 
(7/1/03)
Investor Class(1,5)
   
3.30
%
   
14.01
%
   
5.39
%
   
4.65
%
Y Class (1,2,5)
   
3.27
%
   
13.97
%
   
5.38
%
   
4.65
%
Enhanced Income Composite Index(4)
   
5.89
%
   
16.28
%
   
5.67
%
   
4.97
%
Barclays Capital Aggregrate Index (3)
   
2.54
%
   
8.30
%
   
5.38
%
   
4.71
%
BofA Merrill Lynch All U.S.Convertibles Index (3)
   
16.28
%
   
43.14
%
   
5.97
%
   
6.17
%
Lipper Intermediate Investment Grade Index (3)
   
4.84
%
   
16.52
%
   
4.90
%
   
4.40
%
 
 
     
*
 
Not annualized
     
1.
 
Performance shown is historical and may not be indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.
     
2.
 
Fund performance for the six month, one-year, five-year, and since inception period represents the total returns achieved by the Investor Class from 7/1/03 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are lower than those of the Investor Class. As a result, total returns shown may be lower than they would have been had the Y Class been in existence since 7/1/03.
     
3.
 
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 BofA 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.
     
4.
 
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 BofA Merrill Lynch All U.S. Convertibles Index have been combined in a 75%/25% proportion.
     
5.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Investor and Y Class shares was 1.02% and 0.77%, respectively. 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 2.6% before expenses slightly outperforming the 2.5% return for the Barclays Capital Aggregate Index. This portion of the Fund benefited from a two times overweighting in the Corporate sector, which added to relative performance. The Fund’s selection in Corporate and Asset-Backed securities negatively impacted returns.
 
The remaining portion of the Fund, managed by the Fund’s sub-advisor, returned 7.8% before expenses. These results trailed the 16.3% return of the BofA Merrill Lynch All U.S. Convertibles Index. This portion of the Fund’s investment in higher quality securities, relative to its benchmark, detracted from performance during the period. Broadly speaking, the most speculative, lower quality convertible issues performed better in the period. The sub-advisor’s portion of the portfolio was invested in names with better balance sheets, lower debt levels, and higher cash flows. This portion of the portfolio was also hurt by an overweighting in the Information Technology and Energy sectors.
 
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 Retirement Income and Appreciation FundSM
April 30, 2010 (Unaudited)
 
Top Ten Holdings
 
         
   
% of
   
Net Assets
Federal Home Loan Mortgage Corporation, Pool # G08079, 5.000%, Due 9/1/2035
   
1.6
%
JPMorgan Chase & Co., 3.700%, Due 1/20/2015
   
1.3
%
Federal Farm Credit Bank, 3.000%, Due 9/22/2014
   
1.2
%
Federal Home Loan Mortgage Corporation, Pool # A73703, 5.000%, Due 3/1/2038
   
1.1
%
Federal National Mortgage Association, Pool # 745418, 5.500%, Due 4/1/2036
   
1.0
%
American Express Credit Account Master Trust, 5.350%, Due 1/15/2014
   
0.9
%
HSBC Finance Corp., 5.250%, Due 1/14/2011
   
0.9
%
Government National Mortgage Association, Pool # 781589, 5.500%, Due 4/15/2033
   
0.8
%
EMC Corp., 1.750%, Due 12/1/2013
   
0.8
%
General Electric Capital Corp., 0.495%, Due 1/8/2016
   
0.8
%
 
Fixed-Income Sector Allocation
 
         
   
% of
   
Fixed Income
Corporate Bonds
   
40.9
%
Treasury
   
20.5
%
Mortgage-Backed
   
16.6
%
Convertible Bonds
   
13.5
%
Asset-Backed
   
6.0
%
Agency
   
2.0
%
Municipal/Other Governments
   
0.5
%
 
Equity Sector Allocation
 
         
   
% of
   
Equities
Financials
   
23.4
%
Energy
   
22.9
%
Health Care
   
15.7
%
Information Technology
   
13.1
%
Industrials
   
9.2
%
Consumer Discretionary
   
7.9
%
Consumer Staples
   
7.8
%
 
7
 
 
 
 

 

 
 
Performance Overview
American Beacon Intermediate Bond FundSM
April 30, 2010 (Unaudited)
 
 
The Institutional Class of the Intermediate Bond Fund returned 2.31% for the six months ended April 30, 2010, trailing the Barclays Capital Aggregate Index (“Index”) return of 2.54% and the Lipper Intermediate Investment Grade Debt Funds Index return of 4.84% for the same period.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
   
6 Months*
 
1 Year
 
5 Years
 
10 Years
Institutional Class(1,5)
   
2.31
%
   
9.48
%
   
5.69
%
   
6.42
%
Y Class (1,2,5)
   
2.29
%
   
9.46
%
   
5.68
%
   
6.41
%
Investor Class (1,3,5)
   
2.03
%
   
8.85
%
   
5.55
%
   
6.35
%
Barclays Capital Agg. Index (4)
   
2.54
%
   
8.30
%
   
5.38
%
   
6.43
%
Lipper Intermediate Inv. Grade Index (4)
   
4.84
%
   
16.52
%
   
4.90
%
   
6.05
%
 

 
     
*
 
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 recei pt of the settlement proceeds.
     
2.
 
Fund performance for the six month, one-year, five-year, and ten-year period represents the total returns achieved by the Institutional Class from 4/30/00 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/00.
     
3.
 
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 4/30/00.
     
4.
 
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.
     
5.
 
The total annual Fund operating expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, and Investor Class shares was 0.33%, 0.43%, and 1.23%, 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.
 
Prior to the impact of expenses, the Fund outperformed the Index entirely due to sector allocation as security selection detracted value relative to the Index.
 
The Fund’s two times overweighting in the Corporate sector contributed most to relative returns from a sector allocation perspective. A two times underweighting in U.S. Treasuries also added value. From a security selection standpoint, the Fund’s underperformance was primarily due to poor selection among Corporates and Commercial Mortgage-Backed securities.
 
The average duration of the Fund’s portfolio was slightly shorter than the Index over the course of the six months, with a slightly higher credit quality which detracted 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 Home Loan Mortgage Corporation, Pool # G08269, 5.500%, Due 5/1/2038
   
1.4
%
Federal Home Loan Mortgage Corporation, Pool # A78321, 5.500%, Due 12/1/2037
   
1.0
%
JPMorgan Chase & Co., 3.700%, Due 1/20/2015
   
1.0
%
Federal National Mortgage Association, Pool # 948590, 6.500%, Due 8/1/2037
   
0.9
%
Berkshire Hathaway, Inc., 1.400%, Due 2/10/2012
   
0.8
%
Federal Home Loan Mortgage Corporation, Pool # A73703, 5.000%, Due 3/1/2038
   
0.8
%
HSBC Finance Corp., 5.250%, Due 1/14/2011
   
0.7
%
American Express Credit Account Master Trust, 5.350%, Due 1/15/2014
   
0.7
%
Government National Mortgage Association, Pool # 782916, 5.500%, Due 2/15/2040
   
0.7
%
 
Sector Allocation
 
         
   
% of
   
Fixed
   
Income
Corporate
   
44.5
%
Mortgage-Backed
   
26.1
%
U.S. Treasury
   
23.7
%
Asset-Backed
   
4.5
%
U.S. Agency
   
0.9
%
Municipal/Other Governments
   
0.3
%
 
8
 
 

 
 

 
 
 
 
Performance Overview
American Beacon Short-Term Bond FundSM
April 30, 2010 (Unaudited)
 
 
The Institutional Class of the Short-Term Bond Fund returned 1.63% for the six months ended April 30, 2010, which outperformed the BofA Merrill Lynch 1-3 Year Corp/Gov Index (“Index”) return of 1.24% but underperformed the Lipper Short Investment Grade Bond Funds Index (“Lipper”) return of 2.82%.
 
                                 
   
Annualized Total Returns
   
Periods Ended 4/30/10
   
6
         
5
 
10
   
Months*
 
1 Year
 
Years
 
Years
Institutional Class(1,4)
   
1.63
%
   
5.18
%
   
4.28
%
   
4.65
%
Y Class (1,2,4)
   
1.74
%
   
5.29
%
   
4.31
%
   
4.66
%
Investor Class(1,4)
   
1.53
%
   
4.99
%
   
3.82
%
   
4.17
%
Lipper Short Inv. Grade Index(3)
   
2.82
%
   
10.21
%
   
3.63
%
   
4.03
%
BofA Merrill Lynch 1-3 Yr. Gov./Corp. Index(3)
   
1.24
%
   
4.10
%
   
4.46
%
   
4.77
%
 
 
     
*
 
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 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.
 
Fund performance for the six month, one-year, five-year, and ten-year period represents the total returns achieved by the Institutional Class from 4/30/00 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 4/30/00.
     
3.
 
The BofA 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.
     
4.
 
The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, and Investor Class shares was 0.33%, 0.43%, and 0.85%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.
 
As compared to the Index, the Fund outperformed due to its overweight positions in the Corporate and Asset-Backed sectors. These sectors outperformed Treasuries and Agencies during the period as the credit markets continued to recover following the improving economy. The Fund generally maintains overweight positions in these sectors to generate incremental yield-to-maturity compared to the Index.
 
The Fund’s duration was shorter than the Index duration during the period in response to the ultra-low interest rate environment. The Fund’s short duration resulted in a slightly lower total return than would have been the case with a neutral duration. While we do not expect the Federal Reserve Bank (the “Fed”) to raise interest rates soon, we do want to protect the Fund from an ultimate rise in rates that will inevitably accompany Fed monetary policy. In the mean time, we intend to opportunistically add duration to the Fund to keep it within approximately 30% of Index duration until the Fed rate hikes become more imminent.
 
Despite the recent volatility emanating from Europe, the U.S. short-term fixed-income markets have recovered significantly from where they were in early 2009. During the past six months, the recovery continued – albeit at a more moderate pace. The credit markets have largely stabilized, and the financial crisis is behind us, but the global recovery is still fragile. As such, while we search for value in the new credit environment, we will maintain our conservative approach and will look for opportunity to generate attractive long-term results.
 
 
9
 
 
 
 

 

 
Performance Overview
American Beacon Short-Term Bond FundSM
April 30, 2010 (Unaudited)

 
Top Ten Holdings
 
         
   
% of
   
Net Assets
Bank of America Corp., 2.375%, Due 6/22/2012
   
6.1
%
Dexia Credit Local N.Y., 0.652%, Due 3/5/2013
   
1.8
%
John Deere Owner Trust, 0.720%, Due 7/16/2012
   
1.8
%
Chrysler Financial Lease Trust, 1.780%, Due 6/15/2011
   
1.8
%
USAA Auto Owner Trust, 5.550%, Due 2/15/2013
   
1.8
%
Government National Mortgage Association 2010-52 A, 3.069%, Due 6/16/2036
   
1.8
%
JPMorgan Chase & Co., 0.902%, Due 2/26/2013
   
1.8
%
AT&T Wireless Services, Inc., 7.875%, Due 3/1/2011
   
1.6
%
Citigroup, Inc., 0.558%, Due 11/5/2014
   
1.4
%
MBNA Corp., 7.500%, Due 3/15/2012
   
1.3
%
 
Sector Allocation
 
         
   
% of
   
Fixed Income
Corporate Bonds
   
53.0
%
Asset-Backed
   
24.6
%
Treasury
   
9.0
%
Mortgage-Backed
   
7.1
%
Agency
   
6.1
%
Municipal
   
0.2
%
 
10
 
 

 
 

 
 
 
Fund Expenses — Actual
April 30, 2010 (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, 2009 through April 30, 2010.
 
 
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 11/1/09
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,104.78
   
$
1,023.09
   
$
1,016.34
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
4.02
   
$
1.76
   
$
1.95
 
Annualized Expense Ratio
   
0.77
%
   
0.35
%
   
0.39
%
 
 
                                 
           
Retirement
       
           
Income and
       
   
High Yield
 
Appreciation
 
Intermediate
 
Short-Term
Y Class
 
Bond Fund
 
Fund
 
Bond Fund
 
Bond Fund
Beginning Account Value 3/1/10**
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,046.60
   
$
1,014.80
   
$
1,009.70
   
$
1,005.90
 
Expenses Paid During Period 3/1/10-4/30/10 **
 
$
1.52
   
$
1.13
   
$
0.74
   
$
0.71
 
Annualized Expense Ratio
   
0.89
%
   
0.67
%
   
0.44
%
   
0.42
%
 
 
                                 
           
Retirement
       
           
Income and
       
   
High Yield
 
Appreciation
 
Intermediate
 
Short-Term
Investor Class
 
Bond Fund
 
Fund
 
Bond Fund
 
Bond Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,103.38
   
$
1,033.04
   
$
1,020.26
   
$
1,015.28
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
5.37
   
$
5.49
   
$
3.61
   
$
3.10
 
Annualized Expense Ratio
   
1.03
%
   
1.09
%
   
0.72
%
   
0.62
%
 
 
         
   
High Yield
AMR Class
 
Bond Fund
Beginning Account Value 11/1/09
 
$
1,000.00
 
Ending Account Value 4/30/2010
 
$
1,106.10
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
2.77
 
Annualized Expense Ratio
   
0.53
%
 
 
     
*
 
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.
     
**
 
Beginning account value for Y Class is the inception date of 3/1/10. Expenses are equal to the Fund’s annualized expense ratio for the period multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the period ( 61 ) by days in the year ( 365 ).
 
11
 
 
 
 

 

 
Fund Expenses — Hypothetical
April 30, 2010 (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 pe riod, 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 11/1/09
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,020.98
   
$
1,023.06
   
$
1,022.86
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
3.86
   
$
1.76
   
$
1.96
 
Annualized Expense Ratio
   
0.77
%
   
0.35
%
   
0.39
%
 

 
                                 
           
Retirement
       
           
Income and
       
   
High Yield
 
Appreciation
 
Intermediate
 
Short-Term
Y Class
 
Bond Fund
 
Fund
 
Bond Fund
 
Bond Fund
Beginning Account Value 3/1/10**
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,006.87
   
$
1,007.23
   
$
1,007.62
   
$
1,007.65
 
Expenses Paid During Period 3/1/10-4/30/10**
 
$
1.49
   
$
1.13
   
$
0.74
   
$
0.71
 
Annualized Expense Ratio
   
0.89
%
   
0.67
%
   
0.44
%
   
0.42
%
 

 
                                 
           
Retirement
       
           
Income and
       
   
High Yield
 
Appreciation
 
Intermediate
 
Short-Term
Investor Class
 
Bond Fund
 
Fund
 
Bond Fund
 
Bond Fund
Beginning Account Value 11/1/09
 
$
1,000.00
   
$
1,000.00
   
$
1,000.00
   
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,019.69
   
$
1,019.39
   
$
1,021.22
   
$
1,021.72
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
5.16
   
$
5.46
   
$
3.61
   
$
3.11
 
Annualized Expense Ratio
   
1.03
%
   
1.09
%
   
0.72
%
   
0.62
%
 

 
         
   
High Yield
AMR Class
 
Bond Fund
Beginning Account Value 11/1/09
 
$
1,000.00
 
Ending Account Value 4/30/10
 
$
1,022.17
 
Expenses Paid During Period 11/1/09-4/30/10 *
 
$
2.66
 
Annualized Expense Ratio
   
0.53
%
 
 
     
*
 
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.
     
**
 
Beginning account value for Y Class is the inception date of 3/1/10. Expenses are equal to the Fund’s annualized expense ratio for the period multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the period ( 61 ) by days in the year ( 365 ).
 
12
 
 
 
 
 

 
 

American Beacon High Yield Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
COMMON STOCKS — 0.47%
               
COMMUNICATIONS — 0.47%
               
Communications — 0.08%
               
Charter Communications, Inc. ^
   
4,260
   
$
161
 
Charter Communications, Inc., Warrant ^
   
5,175
     
24
 
             
185
 
               
                 
Media — 0.39%
               
Dex One Corp. ^
   
30,265
     
917
 
SuperMedia, Inc. ^
   
1,037
     
47
 
             
964
 
               
Total Common Stocks
           
1,149
 
               
                 
PREFERRED STOCKS — 0.17%
               
FINANCE — 0.17%
               
Diversified Financials — 0.01%
               
Federal Home Loan Mortgage Corp. ^
   
10,000
     
16
 
               
                 
Finance — 0.16%
               
Ally Financial, Inc. ‡
   
454
     
386
 
               
Total Preferred Stocks
           
402
 
               
 

 
                 
   
Par
       
   
Amount
       
CORPORATE OBLIGATIONS — 95.18%
               
Cable / Media — 10.81%
               
Cablevision Systems Corp., 8.625%, Due 9/15/2017 ‡
 
$
1,000
     
1,055
 
CCH II Holdings LLC,
               
13.50%, Due 11/30/2016
   
1,050
     
1,271
 
13.50%, Due 11/30/2016 ‡
   
807
     
968
 
CCO Holdings LLC, 8.125%, Due 4/30/2020 ‡
   
400
     
409
 
Cengage Learning Acquisitions, Inc., 10.50%, Due 1/15/2015 ‡
   
705
     
691
 
Cequel Communications Holdings I LLC, 8.625%, Due 11/15/2017 ‡
   
525
     
534
 
Clear Channel Worldwide Holdings, Inc., 9.25%, Due 12/15/2017 ‡
   
1,450
     
1,552
 
CSC Holdings LLC, 8.50%, Due 4/15/2014 ‡
   
500
     
536
 
DISH DBS Corp., 7.125%, Due 2/1/2016
   
1,500
     
1,522
 
HSN, Inc., 11.25%, Due 8/1/2016
   
650
     
733
 
Hughes Network Systems LLC, 9.50%, Due 4/15/2014
   
650
     
670
 
Intelsat Jackson Holdings SA, 11.25%, Due 6/15/2016
   
2,200
     
2,382
 
Intelsat Luxembourg SA, 11.50%, Due 2/4/2017
   
650
     
686
 
Lamar Media Corp., 7.875%, Due 4/15/2018 ‡
   
400
     
409
 
Liberty Media LLC, 5.70%, Due 5/15/2013
   
500
     
502
 
LIN Television Corp.,
               
6.50%, Due 5/15/2013
   
600
     
594
 
8.375%, Due 4/15/2018 ‡
   
100
     
103
 
Media General, Inc., 11.75%, Due 2/15/2017 ‡
   
800
     
854
 
Mediacom LLC, 9.125%, Due 8/15/2019 ‡
   
400
     
412
 
Québécor Média, Inc., 7.75%, Due 3/15/2016
   
500
     
501
 
 
See accompanying notes
 
 
13
 
 
 
 

 

 
American Beacon High Yield Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Radio One, Inc., 6.375%, Due 2/15/2013
 
$
900
   
$
754
 
Rainbow National Services LLC,
               
8.75%, Due 9/1/2012 ‡
   
550
     
558
 
10.375%, Due 9/1/2014 ‡
   
625
     
656
 
Sinclair Television Group, Inc., 9.25%, Due 11/1/2017 ‡
   
1,000
     
1,062
 
Telesat Canada, 12.50%, Due 11/1/2017
   
897
     
1,046
 
Univision Communications, Inc.,
               
12.00%, Due 7/1/2014 ‡
   
895
     
989
 
10.50%, Due 3/15/2015 ‡
   
1,080
     
980
 
UPC Germany GmbH, 8.125%, Due 12/1/2017 ‡
   
1,000
     
1,020
 
WMG Acquisition Corp., 9.50%, Due 6/15/2016 ‡
   
1,000
     
1,080
 
WMG Holdings Corp., 9.50%, Due 12/15/2014 #
   
1,755
     
1,777
 
             
26,306
 
               
                 
Casino/Gaming — 0.01%
               
Fontainebleau Las Vegas Holdings LLC, 10.25%, Due 6/15/2015 ‡ §
   
1,800
     
25
 
Station Casinos, Inc., 6.875%, Due 3/1/2016 §
   
500
     
4
 
             
29
 
               
                 
Communications — 0.12%
               
Columbus International, Inc., 11.50%, Due 11/20/2014 ‡
   
260
     
286
 
               
                 
Consumer — 4.55%
               
Alliance One International, Inc., 10.00%, Due 7/15/2016 ‡
   
400
     
424
 
Central Garden and Pet Co., 8.25%, Due 3/1/2018
   
595
     
608
 
Cott Beverages, Inc., 8.375%, Due 11/15/2017 ‡
   
400
     
418
 
Dole Food Co, Inc., 13.875%, Due 3/15/2014
   
615
     
744
 
Easton-Bell Sports, Inc., 9.75%, Due 12/1/2016 ‡
   
855
     
911
 
Fage Dairy Industries, 9.875%, Due 2/1/2020 ‡
   
815
     
766
 
Independencia International Ltd., 15.00%, Due 3/31/2015 ‡
   
550
     
505
 
Jarden Corp., 7.50%, Due 5/1/2017
   
1,000
     
1,022
 
JBS USA LLC, 11.625%, Due 5/14/2011
   
1,835
     
2,110
 
Jostens IH Corp., 7.625%, Due 10/1/2012
   
500
     
502
 
Libbey Glass, Inc., 10.00%, Due 2/15/2015 ‡
   
1,010
     
1,067
 
Pinnacle Foods Finance LLC,
               
9.25%, Due 4/1/2015 ‡
   
800
     
832
 
10.625%, Due 4/1/2017
   
475
     
511
 
Prestige Brands, Inc., 8.25%, Due 4/1/2018 ‡
   
630
     
649
 
             
11,069
 
               
                 
Energy — 11.17%
               
Antero Resources Finance Corp., 9.375%, Due 12/1/2017 ‡
   
700
     
724
 
Berry Petroleum Co., 10.25%, Due 6/1/2014
   
1,047
     
1,160
 
Chesapeake Energy Corp., 6.625%, Due 1/15/2016 ‡
   
2,000
     
1,970
 
Cie Generale de Geophysique-Veritas,
               
7.50%, Due 5/15/2015
   
500
     
506
 
9.50%, Due 5/15/2016
   
500
     
535
 
 
See accompanying notes
 
 
14
 
 
 
 

 

 
American Beacon High Yield Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Coffeyville Resources LLC,
               
9.00%, Due 4/1/2015 ‡
 
$
265
   
$
270
 
10.875%, Due 4/1/2017 ‡
   
605
     
617
 
Compton Petroleum Finance Corp., 7.625%, Due 12/1/2013
   
775
     
659
 
Copano Energy LLC, 8.125%, Due 3/1/2016
   
1,000
     
1,015
 
Denbury Resources, Inc., 8.25%, Due 2/15/2020
   
932
     
1,000
 
El Paso Corp.,
               
12.00%, Due 12/12/2013
   
500
     
595
 
7.00%, Due 6/15/2017
   
900
     
925
 
Enterprise Products Operating LLC, 7.034%, Due 1/15/2068
   
1,710
     
1,652
 
Helix Energy Solutions Group, Inc., 9.50%, Due 1/15/2016 ‡
   
685
     
712
 
Hilcorp Energy, 8.00%, Due 2/15/2020 ‡
   
795
     
775
 
Holly Corp., 9.875%, Due 6/15/2017 ‡
   
300
     
312
 
Linn Energy LLC,
               
9.875%, Due 7/1/2018
   
1,130
     
1,220
 
8.625%, Due 4/15/2020 ‡
   
1,000
     
1,038
 
Mariner Energy, Inc.,
               
7.50%, Due 4/15/2013
   
200
     
207
 
11.75%, Due 6/30/2016
   
100
     
128
 
MarkWest Energy Partners LP, 8.75%, Due 4/15/2018
   
780
     
808
 
Martin Midstream Partners & Finance, 8.875%, Due 4/1/2018 ‡
   
895
     
908
 
OPTI Canada, Inc.,
               
9.00%, Due 12/15/2012 ‡
   
1,020
     
1,046
 
8.25%, Due 12/15/2014
   
735
     
706
 
Penn Virginia Resource Finance Corp., 8.25%, Due 4/15/2018
   
460
     
469
 
Petrohawk Energy Corp.,
               
10.50%, Due 8/1/2014
   
1,000
     
1,105
 
7.875%, Due 6/1/2015
   
430
     
444
 
Plains Exploration & Production Co., 10.00%, Due 3/1/2016
   
1,200
     
1,329
 
Quicksilver Resources, Inc.,
               
8.25%, Due 8/1/2015
   
500
     
515
 
9.125%, Due 8/15/2019
   
500
     
536
 
Regency Energy Partners LP, 9.375%, Due 6/1/2016 ‡
   
635
     
681
 
SandRidge Energy, Inc.,
               
9.875%, Due 5/15/2016 ‡
   
750
     
788
 
8.00%, Due 6/1/2018 ‡
   
900
     
884
 
Tesoro Corp., 6.50%, Due 6/1/2017
   
1,000
     
940
 
             
27,179
 
               
                 
Finance — 9.90%
               
Alliant Holdings I, Inc., 11.00%, Due 5/1/2015 ‡
   
700
     
723
 
Ally Financial, Inc.,
               
6.875%, Due 8/28/2012
   
2,000
     
2,037
 
8.30%, Due 2/12/2015 ‡
   
655
     
684
 
8.00%, Due 12/31/2018
   
400
     
398
 
8.00%, Due 11/1/2031
   
975
     
951
 
 
See accompanying notes
 
 
15
 
 
 
 

 

 
American Beacon High Yield Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Bank of America Corp., 8.125%, Due 12/29/2049
 
$
1,000
   
$
1,007
 
CEDC Finance Corp International, Inc., 9.125%, Due 12/1/2016 ‡
   
1,600
     
1,696
 
CEVA Group plc,
               
11.625%, Due 10/1/2016 ‡
   
100
     
109
 
11.50%, Due 4/1/2018 ‡
   
800
     
861
 
CIT Group, Inc., 7.00%, Due 5/1/2017
   
900
     
856
 
E*Trade Financial Corp., 12.50%, Due 11/30/2017
   
900
     
1,075
 
Expro Finance Luxembourg SCA, 8.50%, Due 12/15/2016 ‡
   
1,000
     
1,025
 
Financiera Independencia S.A.B. de C.V., 10.00%, Due 3/15/2015 ‡
   
260
     
262
 
HUB International Holdings, Inc., 10.25%, Due 6/15/2015 ‡
   
1,250
     
1,219
 
Icahn Enterprises LP, 8.00%, Due 1/15/2018 ‡
   
1,135
     
1,104
 
International Lease Finance Corp.,
               
5.65%, Due 6/1/2014
   
1,200
     
1,098
 
8.625%, Due 9/15/2015 ‡
   
600
     
593
 
JP Morgan Chase & Co., 7.90%, Due 12/31/2049
   
500
     
525
 
Lehman Brothers Holdings, Inc., 6.20%, Due 9/26/2014 §
   
1,500
     
330
 
Liberty Mutual Group, Inc., 10.75%, Due 6/15/2058 ‡
   
735
     
856
 
Marsico Parent Co. LLC,
               
10.625%, Due 1/15/2016 ‡
   
800
     
529
 
12.50%, Due 7/15/2016 ‡
   
619
     
168
 
MBNA Capital A, 8.278%, Due 12/1/2026
   
625
     
633
 
Midwest Gaming Borrower LLC, 11.625%, Due 4/15/2016 ‡
   
950
     
976
 
Nationwide Mutual Insurance Co., 9.375%, Due 8/15/2039 ‡
   
500
     
598
 
NES Rentals Holdings, Inc., 12.25%, Due 4/15/2015 ‡
   
355
     
341
 
PE Paper Escrow GmbH, 12.00%, Due 8/1/2014 ‡
   
950
     
1,083
 
Prime Dig Pte Ltd., 11.75%, Due 11/3/2014 ‡
   
195
     
214
 
Reliance Intermediate Holdings LP, 9.50%, Due 12/15/2019 ‡
   
820
     
866
 
Rouse Company, 8.00%, Due 4/30/2049 §
   
660
     
739
 
Wells Fargo Capital XIII, 7.70%, Due 12/29/2049
   
500
     
520
 
             
24,076
 
               
                 
Manufacturing — 23.01%
               
Advanced Micro Devices, Inc., 8.125%, Due 12/15/2017 ‡
   
200
     
206
 
AK Steel Corp., 7.625%, Due 5/15/2020
   
550
     
566
 
Allison Transmission, Inc., 11.00%, Due 11/1/2015 ‡
   
1,200
     
1,296
 
American Axle & Manufacturing Holdings, Inc., 9.25%, Due 1/15/2017 ‡
   
560
     
595
 
Amsted Industries, Inc., 8.125%, Due 3/15/2018 ‡
   
675
     
675
 
ArvinMeritor, Inc., 10.625%, Due 3/15/2018
   
400
     
430
 
Belden, Inc., 9.25%, Due 6/15/2019 ‡
   
715
     
769
 
Boise Paper Holdings LLC, 8.00%, Due 4/1/2020 ‡
   
600
     
618
 
Building Materials Corp. of America, 7.50%, Due 3/15/2020 ‡
   
690
     
688
 
Cemex Finance LLC, 9.50%, Due 12/14/2016 ‡
   
205
     
207
 
Cleaver-Brooks, Inc., 12.25%, Due 5/1/2016 ‡
   
390
     
394
 
Colt Defense LLC, 8.75%, Due 11/15/2017 ‡
   
700
     
665
 
Consol Energy, Inc., 8.00%, Due 4/1/2017 ‡
   
670
     
708
 
 
See accompanying notes
 
 
16
 
 
 

 
 

 
American Beacon High Yield Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
8.25%, Due 4/1/2020 ‡
 
$
535
   
$
570
 
Cooper Standard Automotive, 8.50%, Due 5/1/2018 ‡
   
300
     
307
 
CPG International I, Inc.,
               
7.18%, Due 7/1/2012 #
   
460
     
442
 
10.50%, Due 7/1/2013
   
350
     
354
 
Diversey Holdings, Inc., 10.50%, Due 5/15/2020 ‡
   
800
     
890
 
Fibria Overseas Finance Ltd., 7.50%, Due 5/4/2020 ‡
   
895
     
898
 
First Data Corp.,
               
9.875%, Due 9/24/2015
   
1,000
     
915
 
10.55%, Due 9/24/2015
   
1,474
     
1,304
 
Ford Motor Credit Co. LLC,
               
7.50%, Due 8/1/2012
   
2,500
     
2,584
 
7.00%, Due 4/15/2015
   
1,090
     
1,108
 
8.125%, Due 1/15/2020
   
1,140
     
1,208
 
Freeport-McMoRan Copper & Gold, Inc., 8.375%, Due 4/1/2017
   
500
     
561
 
Freescale Semiconductor, Inc.,
               
8.875%, Due 12/15/2014
   
1,200
     
1,182
 
9.125%, Due 12/15/2014
   
700
     
698
 
9.25%, Due 4/15/2018 ‡
   
450
     
468
 
Goodman Global Group, Inc., Zero Coupon, Due 12/15/2014 ‡
   
535
     
326
 
Graphic Packaging International, Inc., 9.50%, Due 6/15/2017
   
500
     
537
 
Grupo Papelero Scribe SA, 8.875%, Due 4/7/2020 ‡
   
440
     
414
 
Hanesbrands, Inc., 8.00%, Due 12/15/2016
   
500
     
522
 
Huntsman International LLC, 7.875%, Due 11/15/2014
   
1,200
     
1,218
 
Ineos Group Holdings plc, 8.50%, Due 2/15/2016 ‡
   
500
     
445
 
International Coal Group, Inc., 9.125%, Due 4/1/2018
   
540
     
559
 
K Hovnanian Enterprises, Inc., 10.625%, Due 10/15/2016
   
810
     
887
 
KB Home,
               
6.25%, Due 6/15/2015
   
500
     
489
 
9.10%, Due 9/15/2017
   
400
     
431
 
LBI Escrow Corp., 8.00%, Due 11/1/2017 ‡
   
605
     
627
 
MacDermid, Inc., 9.50%, Due 4/15/2017 ‡
   
2,425
     
2,504
 
Manitowoc Co., Inc., 9.50%, Due 2/15/2018
   
500
     
525
 
Meritage Homes Corp., 6.25%, Due 3/15/2015
   
925
     
890
 
Momentive Performance Materials, Inc., 9.75%, Due 12/1/2014
   
900
     
916
 
Motors Liquidation Co., 8.375%, Due 7/15/2033 §
   
1,570
     
601
 
Navistar International Corp., 8.25%, Due 11/1/2021
   
1,115
     
1,176
 
NewPage Corp., 11.375%, Due 12/31/2014
   
2,150
     
2,209
 
Norske Skogindustrier ASA, 6.125%, Due 10/15/2015 ‡
   
1,450
     
947
 
Novelis, Inc., 7.25%, Due 2/15/2015
   
1,100
     
1,083
 
NXP b.v., 9.50%, Due 10/15/2015
   
900
     
884
 
Oshkosh Corp.,
               
8.25%, Due 3/1/2017 ‡
   
100
     
105
 
8.50%, Due 3/1/2020 ‡
   
510
     
537
 
Owens-Brockway Glass Container, Inc., 6.75%, Due 12/1/2014
   
1,000
     
1,025
 
 
See accompanying notes
 
 
17
 
 
 
 

 

 
American Beacon High Yield Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Peabody Energy Corp., 7.375%, Due 11/1/2016
 
$
1,000
   
$
1,060
 
Phillips-Van Heusen Corp., 7.375%, Due 5/15/2020
   
200
     
205
 
RBS Global, Inc., 8.50%, Due 5/1/2018 ‡
   
1,875
     
1,880
 
Reynolds Group, 8.50%, Due 5/15/2018 ‡
   
1,350
     
1,360
 
Ryerson, Inc., 12.00%, Due 11/1/2015
   
570
     
616
 
Sanmina-SCI Corp., 8.125%, Due 3/1/2016
   
1,000
     
1,012
 
Solo Cup Co., 8.50%, Due 2/15/2014
   
1,800
     
1,809
 
Standard Pacific Corp., 8.375%, Due 5/15/2018
   
300
     
305
 
Stratus Technologies, Inc., 12.00%, Due 3/29/2015 ‡
   
425
     
411
 
SunGard Data Systems, Inc.,
               
9.125%, Due 8/15/2013
   
200
     
205
 
10.25%, Due 8/15/2015
   
700
     
738
 
Thermon Industries, Inc., 9.50%, Due 5/1/2017 ‡
   
1,320
     
1,346
 
TransDigm, Inc., 7.75%, Due 7/15/2014 ‡
   
380
     
389
 
TriMas Corp., 9.75%, Due 12/15/2017 ‡
   
625
     
645
 
TRW Automotive, Inc.,
               
7.25%, Due 3/15/2017 ‡
   
1,000
     
1,007
 
8.875%, Due 12/1/2017 ‡
   
590
     
626
 
Tube City IMS Corp., 9.75%, Due 2/1/2015
   
500
     
505
 
USG Corp., 9.75%, Due 8/1/2014 ‡
   
460
     
497
 
Viasat, Inc., 8.875%, Due 9/15/2016 ‡
   
200
     
205
 
             
55,984
 
               
                 
Other Corporate — 3.08%
               
AES Corp., 9.75%, Due 4/15/2016 ‡
   
50
     
54
 
Crown Castle International Corp., 9.00%, Due 1/15/2015
   
1,000
     
1,074
 
Dynegy Holdings, Inc.,
               
7.50%, Due 6/1/2015 ‡
   
1,000
     
875
 
8.375%, Due 5/1/2016
   
1,500
     
1,320
 
Forest City Enterprises, Inc., 7.625%, Due 6/1/2015
   
1,100
     
1,023
 
Intergen NV, 9.00%, Due 6/30/2017 ‡
   
1,000
     
1,045
 
Novasep Holding SAS, 9.75%, Due 12/15/2019 ‡
   
605
     
611
 
NRG Energy, Inc., 7.375%, Due 2/1/2016
   
1,500
     
1,485
 
             
7,487
 
               
                 
Service — 21.45%
               
American Renal Holdings, 8.375%, Due 5/15/2018 ‡
   
110
     
111
 
Boston Scientific Corp., 6.00%, Due 1/15/2020
   
800
     
791
 
Burlington Coat Factory Warehouse Corp., 11.125%, Due 4/15/2014
   
275
     
289
 
Carrols Corp., 9.00%, Due 1/15/2013
   
675
     
690
 
Casella Waste Systems, Inc.,
               
9.75%, Due 2/1/2013
   
1,150
     
1,159
 
11.00%, Due 7/15/2014 ‡
   
650
     
705
 
Clean Harbors, Inc., 7.625%, Due 8/15/2016
   
625
     
651
 
Country Garden Holdings Co., 11.25%, Due 4/22/2017 ‡
   
335
     
331
 
CRC Health Corp., 10.75%, Due 2/1/2016
   
1,350
     
1,286
 
DaVita, Inc., 7.25%, Due 3/15/2015
   
1,000
     
1,020
 
 
See accompanying notes
 
 
18
 
 
 
 

 

 
American Beacon High Yield Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Denny’s Holdings, Inc., 10.00%, Due 10/1/2012
 
$
620
   
$
632
 
Dollar General Corp., 10.625%, Due 7/15/2015
   
985
     
1,095
 
Equinox Holdings, Inc., 9.50%, Due 2/1/2016 ‡
   
950
     
969
 
Felcor Lodging LP, 10.00%, Due 10/1/2014
   
500
     
522
 
Fresenius Medical Care Capital Trust IV, 7.875%, Due 6/15/2011
   
1,000
     
1,050
 
Fresenius US Finance II, Inc., 9.00%, Due 7/15/2015 ‡
   
500
     
562
 
Great Atlantic & Pacific Tea Co., 11.375%, Due 8/1/2015 ‡
   
950
     
940
 
Harrah’s Operating Co., Inc., 11.25%, Due 6/1/2017
   
2,400
     
2,616
 
HCA, Inc., 9.625%, Due 11/15/2016
   
3,000
     
3,262
 
Health Net, Inc., 6.375%, Due 6/1/2017
   
650
     
604
 
Healthsouth Corp., 10.75%, Due 6/15/2016
   
550
     
600
 
Iron Mountain, Inc., 8.00%, Due 6/15/2020
   
600
     
622
 
Live Nation Entertainment, Inc., 8.125%, Due 5/15/2018 ‡
   
930
     
956
 
MGM Mirage,
               
8.375%, Due 2/1/2011
   
1,000
     
1,012
 
6.625%, Due 7/15/2015
   
1,900
     
1,639
 
9.00%, Due 3/15/2020 ‡
   
300
     
315
 
Michaels Stores, Inc., 10.00%, Due 11/1/2014
   
1,200
     
1,272
 
MTR Gaming Group, Inc., 12.625%, Due 7/15/2014
   
275
     
289
 
NCL Corp Ltd., 11.75%, Due 11/15/2016 ‡
   
1,000
     
1,110
 
Neiman Marcus Group, Inc., 10.375%, Due 10/15/2015
   
935
     
985
 
Nielsen Finance LLC, Zero Coupon, Due 8/1/2016 #
   
620
     
601
 
NPC International, Inc., 9.50%, Due 5/1/2014
   
800
     
810
 
PharmaNet Development Group, Inc., 10.875%, Due 4/15/2017 ‡
   
525
     
537
 
Pinnacle Entertainment, Inc.,
               
7.50%, Due 6/15/2015
   
1,100
     
1,059
 
8.75%, Due 5/15/2020 ‡
   
575
     
574
 
Pokagon Gaming Authority, 10.375%, Due 6/15/2014 ‡
   
1,000
     
1,050
 
Psychiatric Solutions, Inc., 7.75%, Due 7/15/2015 ‡
   
1,250
     
1,275
 
QVC, Inc., 7.50%, Due 10/1/2019 ‡
   
375
     
384
 
Reable Therapeutics, 11.75%, Due 11/15/2014
   
1,100
     
1,172
 
Realogy Corp., 11.00%, Due 4/15/2014
   
1,668
     
1,526
 
Rite Aid Corp., 9.75%, Due 6/12/2016
   
1,305
     
1,437
 
RSC Equipment Rental, Inc., 9.50%, Due 12/1/2014
   
1,000
     
1,027
 
Sally Holdings LLC, 10.50%, Due 11/15/2016
   
800
     
878
 
Shingle Springs Tribal Gaming Authority, 9.375%, Due 6/15/2015 ‡
   
500
     
425
 
Sitel LLC, 11.50%, Due 4/1/2018 ‡
   
500
     
508
 
Speedway Motorsports, Inc., 8.75%, Due 6/1/2016
   
410
     
439
 
Starwood Hotels & Resorts Worldwide, Inc., 6.75%, Due 5/15/2018
   
1,000
     
1,030
 
Station Casinos, Inc., 7.75%, Due 8/15/2016 §
   
500
     
26
 
SUPERVALU, Inc., 8.00%, Due 5/1/2016
   
400
     
407
 
Tenet Healthcare Corp., 10.00%, Due 5/1/2018 ‡
   
1,000
     
1,139
 
Ticketmaster Entertainment, Inc., 10.75%, Due 8/1/2016
   
1,000
     
1,125
 
United Surgical Partners International, Inc., 9.25%, Due 5/1/2017
   
1,000
     
1,050
 
 
See accompanying notes
 
 
19
 
 
 

 
 

American Beacon High Yield Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Universal City Development Partners Ltd., 8.875%, Due 11/15/2015 ‡
 
$
1,000
   
$
1,025
 
US Oncology, Inc.,
               
6.643%, Due 3/15/2012 #
   
2,062
     
1,969
 
10.75%, Due 8/15/2014
   
300
     
313
 
Vanguard Health Holding Co II LLC, 8.00%, Due 2/1/2018 ‡
   
500
     
495
 
WCA Waste Corp., 9.25%, Due 6/15/2014
   
1,000
     
1,011
 
Yonkers Racing Corp., 11.375%, Due 7/15/2016 ‡
   
725
     
794
 
             
52,171
 
               
                 
Telecommunications — 3.54%
               
Clearwire Communications LLC, 12.00%, Due 12/1/2015 ‡
   
550
     
571
 
Cricket Communications, Inc., 7.75%, Due 5/15/2016
   
965
     
1,001
 
Digicel Group Ltd.,
               
8.875%, Due 1/15/2015 ‡
   
1,445
     
1,445
 
9.125%, Due 1/15/2015 ‡
   
100
     
101
 
10.50%, Due 4/15/2018 ‡
   
750
     
801
 
GCI, Inc., 8.625%, Due 11/15/2019 ‡
   
580
     
590
 
Level 3 Financing, Inc., 10.00%, Due 2/1/2018 ‡
   
650
     
640
 
MetroPCS Wireless, Inc., 9.25%, Due 11/1/2014
   
1,200
     
1,245
 
NII Capital Corp., 10.00%, Due 8/15/2016 ‡
   
1,360
     
1,509
 
TW Telecom Holdings, Inc., 8.00%, Due 3/1/2018 ‡
   
675
     
699
 
             
8,602
 
               
                 
Transportation — 1.28%
               
General Maritime Corp., 12.00%, Due 11/15/2017 ‡
   
1,350
     
1,465
 
Greenbrier Cos., Inc., 8.375%, Due 5/15/2015
   
500
     
475
 
Kansas City Southern de Mexico SA de CV, 12.50%, Due 4/1/2016
   
1,000
     
1,182
 
             
3,122
 
               
                 
Utilities — 0.13%
               
CRTX Energy Finance, 8.875%, Due 2/15/2018 ‡
   
300
     
312
 
               
                 
Utility — 6.13%
               
Cincinnati Bell, Inc., 8.75%, Due 3/15/2018
   
680
     
689
 
CMS Energy Corp., 8.75%, Due 6/15/2019
   
800
     
916
 
Elwood Energy LLC, 8.159%, Due 7/5/2026
   
694
     
667
 
Energy Future Holdings Corp., 10.875%, Due 11/1/2017
   
1,500
     
1,181
 
Integra Telecom Holdings, Inc., 10.75%, Due 4/15/2016 ‡
   
500
     
510
 
New Communications Holdings, Inc.,
               
8.25%, Due 4/15/2017 ‡
   
200
     
206
 
8.50%, Due 4/15/2020 ‡
   
200
     
206
 
8.75%, Due 4/15/2022 ‡
   
400
     
412
 
Qwest Communications International, Inc., 7.50%, Due 2/15/2014
   
700
     
712
 
Qwest Corp.,
               
8.375%, Due 5/1/2016
   
500
     
570
 
6.875%, Due 9/15/2033
   
725
     
696
 
Sprint Capital Corp., 8.75%, Due 3/15/2032
   
1,500
     
1,500
 
Sprint Nextel Corp., 8.375%, Due 8/15/2017
   
1,815
     
1,876
 
 
See accompanying notes
 
 
20
 
 
 

 
 

American Beacon High Yield Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Texas Competitive Electric Holdings Co. LLC, 10.25%, Due 11/1/2015
 
$
2,500
   
$
1,875
 
Wind Acquisition Finance S.A.,
               
12.00%, Due 12/1/2015 ‡ ¤
   
2,000
     
2,135
 
11.75%, Due 7/15/2017 ‡
   
45
     
50
 
12.25%, Due 7/15/2017 ‡
   
670
     
702
 
             
14,903
 
               
Total Corporate Obligations
           
231,526
 
               
                 
CONVERTIBLE OBLIGATIONS — 0.45%
               
Finance — 0.16%
               
E*Trade Financial Corp., 12.50%, Due 8/31/2019
   
240
     
392
 
               
                 
Hotels, Restaurants & Leisure — 0.29%
               
Horizon Lines, Inc., 4.25%, Due 8/15/2012
   
800
     
714
 
               
Total Convertible Obligations
           
1,106
 
               
                 
ASSET-BACKED SECURITIES — 0.26%
               
Discover Financial Services, 10.25%, Due 7/15/2019
   
525
     
644
 
               
                 
   
Shares
         
SHORT TERM INVESTMENTS — 3.86%
               
JPMorgan U.S. Government Money Market Fund
   
9,378,518
     
9,379
 
               
TOTAL INVESTMENTS — 100.39% (Cost $227,636)
         
$
244,206
 
LIABILITIES, NET OF OTHER ASSETS — (0.39%)
           
(950
)
TOTAL NET ASSETS — 100.00%
         
$
243,256
 
               
 
Percentages are stated as a percent of net assets.
 
     
     
^
 
Non-income producing security.
     
 
Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $100,114 or 41.16% 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.
     
§
 
Non-income producing — Issuer is in default.
     
¤
 
Step Up/Down
 
See accompanying notes
 
 
21
 
 
 
 

 

 
 
American Beacon Retirement Income and Appreciation Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
COMMON STOCKS — 5.06%
               
CONSUMER DISCRETIONARY — 0.27%
               
Hotels, Restaurants & Leisure — 0.15%
               
Carnival Corp.
   
4,200
   
$
175
 
               
                 
Internet & Catalog Retail — 0.12%
               
eBay, Inc. ^
   
6,000
     
143
 
               
Total Consumer Discretionary
           
318
 
               
                 
ENERGY — 1.66%
               
Energy Equipment & Services — 0.64%
               
Ensco plc, ADR
   
7,300
     
344
 
Noble Corp.
   
10,150
     
401
 
               
             
745
 
               
                 
Oil & Gas — 1.02%
               
Apache Corp.
   
4,250
     
433
 
Devon Energy Corp.
   
6,050
     
407
 
Occidental Petroleum Corp.
   
4,000
     
355
 
               
             
1,195
 
               
Total Energy
           
1,940
 
               
                 
FINANCIALS — 0.64%
               
Banks — 0.24%
               
Bank of America Corp.
   
8,000
     
143
 
JPMorgan Chase & Co.
   
3,300
     
140
 
               
             
283
 
               
Diversified Financials — 0.40%
               
Affiliated Managers Group, Inc. ^
   
2,300
     
194
 
T Rowe Price Group, Inc.
   
4,800
     
276
 
               
             
470
 
               
Total Financials
           
753
 
               
                 
HEALTH CARE — 0.89%
               
Health Care Equipment & Supplies — 0.53%
               
Medtronic, Inc.
   
7,000
     
306
 
Stryker Corp.
   
5,400
     
310
 
               
             
616
 
               
                 
Optical Supplies — 0.22%
               
Alcon, Inc.
   
1,630
     
254
 
               
                 
Pharmaceuticals — 0.14%
               
Merck & Co., Inc.
   
4,777
     
167
 
               
Total Health Care
           
1,037
 
               
                 
INDUSTRIALS — 0.66%
               
Aerospace & Defense — 0.14%
               
United Technologies Corp.
   
2,150
     
161
 
               
                 
Machinery — 0.52%
               
Eaton Corp.
   
3,900
     
301
 
Parker Hannifin Corp. ^
   
4,500
     
311
 
               
             
612
 
               
Total Industrials
           
773
 
               
                 
INFORMATION TECHNOLOGY — 0.94%
               
Communications Equipment — 0.52%
               
Cisco Systems, Inc. ^
   
12,500
     
337
 
QUALCOMM, Inc.
   
7,200
     
279
 
               
             
616
 
               
                 
Computers & Peripherals — 0.13%
               
SanDisk Corp. ^
   
3,700
     
151
 
               
                 
IT Consulting & Services — 0.29%
               
Accenture plc
   
7,770
     
339
 
               
Total Information Technology
           
1,106
 
               
Total Common Stocks
           
5,927
 
               
                 
CONVERTIBLE PREFERRED
               
STOCKS — 1.06%
               
CONSUMER STAPLES — 0.24%
               
Food Products — 0.24%
               
Bunge Ltd.
   
525
     
280
 
               
                 
FINANCIALS — 0.57%
               
Banks — 0.57%
               
Bank of America Corp.
   
385
     
378
 
Wells Fargo & Co.
   
300
     
296
 
               
Total Financials
           
674
 
               
                 
HEALTH CARE — 0.25%
               
Pharmaceuticals — 0.25%
               
Mylan, Inc.
   
225
     
288
 
               
Total Convertible Preferred Stocks
           
1,242
 
               
                 
PREFERRED STOCKS — 1.09%
               
CONSUMER DISCRETIONARY — 0.30%
               
Food Products — 0.30%
               
Archer-Daniels-Midland Co.
   
8,850
     
350
 
               
 
See accompanying notes
 
 
22
 
 
 

 
 

American Beacon Retirement Income and Appreciation Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Shares
   
Value
 
   
(dollars in thousands)
 
CONSUMER STAPLES — 0.32%
               
Food Products — 0.32%
               
Bunge Ltd.
   
4,500
   
$
382
 
               
FINANCIALS — 0.47%
               
Diversified Financials — 0.47%
               
AMG Capital Trust I
   
4,150
     
197
 
Vale Capital II
   
4,000
     
349
 
               
Total Financials
           
546
 
               
Total Preferred Stocks
           
1,278
 
               
 
                 
   
Par
       
   
Amount
       
AGENCIES — 0.52%
               
Agency — 0.52%
               
EDF SA, 4.60%, Due 1/27/2020 ‡
 
$
300
     
300
 
Petroleos Mexicanos, 6.00%, Due 3/5/2020 ‡
   
300
     
309
 
Total Agencies
           
609
 
               
                 
CORPORATE OBLIGATIONS — 37.18%
               
Finance — 16.63%
               
Aegon Funding Corp., 5.75%, Due 12/15/2020
   
250
     
250
 
ANZ National Int’l Ltd., 2.375%, Due 12/21/2012 ‡
   
300
     
303
 
Bank of America Corp.,
               
7.80%, Due 9/15/2016
   
600
     
670
 
6.00%, Due 9/1/2017
   
400
     
415
 
7.625%, Due 6/1/2019
   
200
     
228
 
Bank One Corp., 4.90%, Due 4/30/2015
   
250
     
256
 
Barclays Bank plc,
               
3.90%, Due 4/7/2015
   
290
     
293
 
6.75%, Due 5/22/2019
   
300
     
337
 
BNP Paribas, 0.695%, Due 4/8/2013 #
   
750
     
750
 
Citigroup, Inc.,
               
0.529%, Due 11/5/2014 #
   
300
     
279
 
6.125%, Due 11/21/2017
   
275
     
286
 
8.50%, Due 5/22/2019
   
750
     
885
 
CME Group, Inc., 5.40%, Due 8/1/2013
   
230
     
253
 
Credit Suisse N.Y.,
               
3.45%, Due 7/2/2012
   
600
     
622
 
5.30%, Due 8/13/2019
   
250
     
262
 
Deutsche Bank AG, 3.875%, Due 8/18/2014
   
275
     
284
 
General Electric Capital Corp.,
               
0.495%, Due 1/8/2016 #
   
1,033
     
947
 
5.625%, Due 5/1/2018
   
250
     
265
 
6.00%, Due 8/7/2019
   
300
     
324
 
5.50%, Due 1/8/2020
   
350
     
365
 
Goldman Sachs Group, Inc.,
               
5.35%, Due 1/15/2016
   
475
     
484
 
6.25%, Due 9/1/2017
   
550
     
576
 
Hartford Financial Services Group, Inc., 7.90%, Due 6/15/2010
   
280
     
282
 
HSBC Finance Corp., 5.25%, Due 1/14/2011
   
1,050
     
1,078
 
ING Bank, NV, 5.125%, Due 5/1/2015 ‡
   
300
     
314
 
Janus Capital Group, Inc., 6.95%, Due 6/15/2017
   
125
     
127
 
JP Morgan Chase & Co.,
               
3.70%, Due 1/20/2015
   
1,450
     
1,480
 
6.00%, Due 1/15/2018
   
250
     
270
 
JP Morgan Chase Bank, NA, 0.587%, Due 6/13/2016 #
   
375
     
352
 
Leucadia National Corp., 8.125%, Due 9/15/2015
   
100
     
105
 
Lincoln National Corp., 4.75%, Due 2/15/2014
   
105
     
108
 
Lloyds TSB Bank plc, 4.375%, Due 1/12/2015 ‡
   
300
     
298
 
MassMutual Global Funding II, 0.412%, Due 12/6/2013 ‡ #
   
400
     
388
 
Mellon Funding Corp., 0.40%, Due 5/15/2014 #
   
250
     
247
 
Merrill Lynch & Co., Inc., 6.11%, Due 1/29/2037
   
275
     
254
 
MetLife, Inc., 6.375%, Due 6/15/2034
   
250
     
267
 
Metropolitan Life Global Funding I, 0.507%, Due 3/15/2012 ‡ #
   
300
     
296
 
Monumental Global Funding III, 0.503%, Due 1/15/2014 ‡ #
   
300
     
286
 
Morgan Stanley,
               
0.783%, Due 10/15/2015 #
   
300
     
278
 
7.30%, Due 5/13/2019
   
280
     
307
 
5.625%, Due 9/23/2019
   
250
     
247
 
Nordea Bank AB, 2.50%, Due 11/13/2012 ‡
   
250
     
253
 
Pricoa Global Funding I, 5.40%, Due 10/18/2012 ‡
   
150
     
162
 
 
See accompanying notes
 
 
23
 
 
 
 

 
 
 
American Beacon Retirement Income and Appreciation Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
ProLogis, 5.625%, Due 11/15/2016
 
$
250
   
$
247
 
Prudential Financial, Inc., 4.50%, Due 7/15/2013
   
250
     
262
 
Rabobank Nederland NV, 4.20%, Due 5/13/2014 ‡
   
200
     
210
 
Simon Property Group LP, 10.35%, Due 4/1/2019
   
300
     
389
 
UBS AG, 5.875%, Due 12/20/2017
   
275
     
291
 
Wachovia Corp.,
               
0.673%, Due 10/15/2016 #
   
600
     
551
 
5.75%, Due 2/1/2018
   
475
     
511
 
Wells Fargo & Co., 5.625%, Due 12/11/2017
   
275
     
296
 
               
             
19,490
 
               
                 
Industrials — 18.81%
               
America Movil, S.A.B. de C.V., 6.375%, Due 3/1/2035
   
275
     
282
 
American Honda Finance Corp., 4.625%, Due 4/2/2013 ‡
   
325
     
346
 
Anheuser-Busch InBev Worldwide, Inc.,
               
5.00%, Due 4/15/2020 ‡
   
290
     
294
 
8.00%, Due 11/15/2039 ‡
   
100
     
130
 
AT&T, Inc.,
               
5.625%, Due 6/15/2016
   
200
     
222
 
5.50%, Due 2/1/2018
   
400
     
431
 
6.80%, Due 5/15/2036
   
125
     
137
 
6.40%, Due 5/15/2038
   
125
     
131
 
ATP Oil & Gas Corp., 11.875%, Due 5/1/2015 ‡
   
150
     
150
 
BAE Systems Holdings, Inc., 4.75%, Due 8/15/2010 ‡
   
700
     
707
 
BE Aerospace, Inc., 8.50%, Due 7/1/2018
   
325
     
348
 
Bio Rad Labs, 8.00%, Due 9/15/2016
   
275
     
294
 
Boeing Co., 1.875%, Due 11/20/2012
   
250
     
253
 
BP Capital Markets plc, 3.875%, Due 3/10/2015
   
200
     
209
 
Bristol-Myers Squibb Co., 5.45%, Due 5/1/2018
   
125
     
137
 
Burlington Northern Santa Fe LLC, 5.75%, Due 3/15/2018
   
325
     
354
 
Canadian National Railway Co., 5.55%, Due 5/15/2018
   
250
     
273
 
Canadian Natural Resources Ltd., 6.25%, Due 3/15/2038
   
275
     
290
 
Caterpillar Financial Services Corp.,
               
1.90%, Due 12/17/2012
   
100
     
101
 
4.25%, Due 2/8/2013
   
250
     
265
 
Cisco Systems, Inc., 5.25%, Due 2/22/2011
   
250
     
259
 
Coca-Cola Enterprises, Inc., 7.375%, Due 3/3/2014
   
150
     
177
 
Comcast Cable Communications Holdings, Inc., 8.375%, Due 3/15/2013
   
109
     
127
 
Comcast Corp., 6.55%, Due 7/1/2039
   
300
     
317
 
Comstock Resources, Inc., 8.375%, Due 10/15/2017
   
300
     
310
 
Concho Resources, Inc., 8.625%, Due 10/1/2017
   
275
     
294
 
ConocoPhillips,
               
4.60%, Due 1/15/2015
   
200
     
216
 
5.20%, Due 5/15/2018
   
325
     
350
 
Covidien International Finance SA, 5.15%, Due 10/15/2010
   
600
     
612
 
Daimler Finance NA LLC,
               
5.875%, Due 3/15/2011
   
250
     
259
 
5.75%, Due 9/8/2011
   
250
     
264
 
Dell, Inc., 5.875%, Due 6/15/2019
   
70
     
78
 
Deutsche Telekom AG, 8.50%, Due 6/15/2010
   
480
     
484
 
EOG Resources Canada, Inc., 4.75%, Due 3/15/2014 ‡
   
250
     
264
 
France Telecom S.A., 4.375%, Due 7/8/2014
   
150
     
160
 
Frontier Oil Corp., 8.50%, Due 9/15/2016
   
250
     
258
 
FTI Consulting, Inc., 7.75%, Due 10/1/2016
   
150
     
154
 
Gardner Denver, Inc., 8.00%, Due 5/1/2013
   
300
     
302
 
GlaxoSmithKline Capital, Inc., 5.65%, Due 5/15/2018
   
125
     
138
 
Hanesbrands, Inc., 8.00%, Due 12/15/2016
   
300
     
313
 
Hewlett-Packard Co., 4.50%, Due 3/1/2013
   
325
     
350
 
Honeywell International, Inc., 4.25%, Due 3/1/2013
   
250
     
267
 
 
See accompanying notes
 
 
24
 
 
 
 

 

 
American Beacon Retirement Income and Appreciation Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
International Business Machines Corp., 7.625%, Due 10/15/2018
 
$
150
   
$
188
 
Jabil Circuit, Inc., 8.25%, Due 3/15/2018
   
325
     
352
 
Jarden Corp.,
               
7.50%, Due 5/1/2017
   
30
     
31
 
7.50%, Due 1/15/2020
   
120
     
123
 
JDA Software Group, Inc., 8.00%, Due 12/15/2014 ‡
   
20
     
21
 
Johnson Controls, Inc., 5.00%, Due 3/30/2020
   
300
     
306
 
Kansas City Southern Railway, 13.00%, Due 12/15/2013
   
210
     
251
 
Kellogg Co., 4.25%, Due 3/6/2013
   
250
     
266
 
Nationwide Building Society, 5.50%, Due 7/18/2012 ‡
   
450
     
483
 
NetFlix, Inc., 8.50%, Due 11/15/2017
   
275
     
293
 
Norfolk Southern Corp., 5.75%, Due 4/1/2018
   
325
     
354
 
Northrop Grumman Corp., 5.05%, Due 8/1/2019
   
150
     
157
 
Oshkosh Corp.,
               
8.25%, Due 3/1/2017 ‡
   
50
     
53
 
8.50%, Due 3/1/2020 ‡
   
125
     
132
 
Petroplus Finance Ltd., 9.375%, Due 9/15/2019 ‡
   
225
     
215
 
Quest Diagnostics, Inc., 4.75%, Due 1/30/2020
   
250
     
249
 
Range Resources Corp., 8.00%, Due 5/15/2019
   
100
     
108
 
Raytheon Co., 5.375%, Due 4/1/2013
   
250
     
274
 
Royal Caribbean Cruises Ltd., 7.50%, Due 10/15/2027
   
500
     
462
 
Seagate Technology, 6.80%, Due 10/1/2016
   
350
     
355
 
Service Corp International, 8.00%, Due 11/15/2021
   
225
     
234
 
SESI LLC, 6.875%, Due 6/1/2014
   
435
     
433
 
Spirit Aerosystems, Inc., 7.50%, Due 10/1/2017 ‡
   
300
     
307
 
Swift Energy Co., 7.125%, Due 6/1/2017
   
375
     
367
 
Syniverse Technologies, Inc., 7.75%, Due 8/15/2013
   
325
     
330
 
Telefonica Emisiones SAU, 6.421%, Due 6/20/2016
   
300
     
335
 
Terex Corp., 8.00%, Due 11/15/2017
   
125
     
122
 
Thomson Reuters Corp., 4.70%, Due 10/15/2019
   
250
     
257
 
Time Warner Cable, Inc., 5.85%, Due 5/1/2017
   
300
     
325
 
Time Warner, Inc., 4.875%, Due 3/15/2020
   
150
     
149
 
Triumph Group, Inc., 8.00%, Due 11/15/2017
   
300
     
300
 
Tyco International Finance SA, 4.125%, Due 10/15/2014
   
125
     
131
 
Union Pacific Corp., 7.875%, Due 1/15/2019
   
300
     
367
 
United Technologies Corp., 6.125%, Due 7/15/2038
   
165
     
185
 
Verizon Communications, Inc.,
               
5.50%, Due 4/1/2017
   
250
     
270
 
6.90%, Due 4/15/2038
   
325
     
369
 
Verizon Wireless Capital, LLC, 3.75%, Due 5/20/2011
   
270
     
278
 
Vodafone Group plc, 6.15%, Due 2/27/2037
   
275
     
286
 
Wal-Mart Stores, Inc., 7.55%, Due 2/15/2030
   
250
     
315
 
WESCO Distribution, Inc., 7.50%, Due 10/15/2017
   
450
     
445
 
Xerox Corp.,
               
5.65%, Due 5/15/2013
   
75
     
80
 
8.25%, Due 5/15/2014
   
150
     
176
 
               
             
22,041
 
               
                 
Other Government — 0.27%
               
Province of Ontario Canada, 4.10%, Due 6/16/2014
   
300
     
318
 
               
                 
Utilities — 1.47%
               
Consolidated Edison Co. of New York, Inc., 5.50%, Due 12/1/2039
   
300
     
299
 
Duke Energy Carolinas LLC, 5.10%, Due 4/15/2018
   
250
     
264
 
FirstEnergy Solutions Corp., 4.80%, Due 2/15/2015
   
150
     
155
 
MidAmerican Energy Holdings Co., 6.125%, Due 4/1/2036
   
275
     
287
 
Pacific Gas & Electric Co., 6.25%, Due 12/1/2013
   
175
     
198
 
 
See accompanying notes
 
 
25
 
 
 
 

 

 
American Beacon Retirement Income and Appreciation Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Progress Energy, Inc., 4.875%, Due 12/1/2019
 
$
250
   
$
250
 
Virginia Electric and Power Co., 5.40%, Due 4/30/2018
   
250
     
271
 
               
             
1,724
 
               
Total Corporate Obligations
           
43,573
 
               
                 
CONVERTIBLE OBLIGATIONS — 12.13%
               
Basic Materials — 1.43%
               
Allegheny Technologies, Inc., 4.25%, Due 6/1/2014
   
260
     
380
 
Goldcorp, Inc., 2.00%, Due 8/1/2014 ‡
   
225
     
268
 
Newmont Mining Corp.,
               
3.00%, Due 2/15/2012
   
50
     
67
 
1.25%, Due 7/15/2014
   
425
     
570
 
1.625%, Due 7/15/2017
   
220
     
301
 
Sterlite Industries India Ltd., 4.00%, Due 10/30/2014
   
90
     
93
 
               
             
1,679
 
               
                 
Communications — 1.73%
               
Anixter International, Inc., 1.00%, Due 2/15/2013
   
410
     
412
 
Arris Group, Inc., 2.00%, Due 11/15/2026
   
240
     
243
 
priceline.com, Inc., 1.25%, Due 3/15/2015 ‡
   
300
     
320
 
Symantec Corp.,
               
0.75%, Due 6/15/2011
   
150
     
158
 
1.00%, Due 6/15/2013
   
400
     
428
 
VeriSign, Inc., 3.25%, Due 8/15/2037
   
500
     
471
 
               
             
2,032
 
               
                 
Consumer Discretionary — 1.07%
               
Archer-Daniels-Midland Co., 0.875%, Due 2/15/2014
   
430
     
423
 
Best Buy Co., Inc., 2.25%, Due 1/15/2022
   
200
     
227
 
Carnival Corp., 2.00%, Due 4/15/2021
   
135
     
152
 
International Game Technology, 3.25%, Due 5/1/2014 ‡
   
110
     
140
 
RadioShack Corp., 2.50%, Due 8/1/2013 ‡
   
275
     
308
 
               
             
1,250
 
               
                 
Consumer Staples — 0.28%
               
Kinetic Concepts, Inc., 3.25%, Due 4/15/2015 ‡
   
310
     
328
 
               
                 
Energy — 0.59%
               
Cameron International Corp.,
               
2.50%, Due 6/15/2026
   
180
     
227
 
2.50%, Due 5/15/2037
   
570
     
467
 
               
             
694
 
               
                 
Finance — 0.47%
               
Janus Capital Group, Inc., 3.25%, Due 7/15/2014
   
190
     
235
 
Leucadia National Corp., 3.75%, Due 4/15/2014
   
250
     
315
 
               
             
550
 
               
                 
Health Care — 1.18%
               
Biovail Corp., 5.375%, Due 8/1/2014 ‡
   
350
     
452
 
LifePoint Hospitals, Inc., 3.50%, Due 5/15/2014
   
325
     
337
 
Medtronic, Inc., 1.625%, Due 4/15/2013
   
560
     
593
 
               
             
1,382
 
               
                 
Industrials — 0.93%
               
Danaher Corp., Zero Coupon, Due 1/22/2021
   
370
     
450
 
Fisher Scientific International, Inc., 3.25%, Due 3/1/2024
   
230
     
325
 
ON Semiconductor Corp., 2.625%, Due 12/15/2026
   
300
     
309
 
               
             
1,084
 
               
                 
Pharmaceuticals — 1.09%
               
Charles River Laboratories International, Inc., 2.25%, Due 6/15/2013
   
140
     
136
 
Life Technologies Corp., 1.50%, Due 2/15/2024
   
246
     
293
 
Mylan, Inc., 1.25%, Due 3/15/2012
   
430
     
476
 
Teva Pharmaceutical Finance Co. LLC, 0.25%, Due 2/1/2026
   
295
     
371
 
               
             
1,276
 
               
                 
Technology — 3.36%
               
CACI International, Inc., 2.125%, Due 5/1/2014
   
230
     
238
 
EMC Corp., 1.75%, Due 12/1/2013
   
715
     
931
 
 
See accompanying notes
 
 
26
 
 
 
 
 

 
 
 
 
American Beacon Retirement Income and Appreciation Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Intel Corp., 3.25%, Due 8/1/2039 ‡
 
$
200
   
$
245
 
Linear Technology Corp., 3.00%, Due 5/1/2027
   
295
     
294
 
Maxtor Corp., 2.375%, Due 8/15/2012
   
120
     
140
 
Micron Technology, Inc., 1.875%, Due 6/1/2014
   
300
     
278
 
Navistar International Corp., 3.00%, Due 10/15/2014
   
300
     
352
 
NetApp, Inc., 1.75%, Due 6/1/2013
   
545
     
677
 
Rovi Corp., 2.625%, Due 2/15/2040 ‡
   
300
     
312
 
SanDisk Corp., 1.00%, Due 5/15/2013
   
175
     
155
 
Sybase, Inc., 3.50%, Due 8/15/2029 ‡
   
280
     
321
 
               
             
3,943
 
               
Total Convertible Obligations
           
14,218
 
               
                 
MUNICIPAL SECURITIES — 0.17%
               
Municipal Obligations — 0.17%
               
State of Illinois, 1.823%, Due 1/1/2011
   
200
     
200
 
               
                 
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS — 2.20%
               
Commercial Mortgage Backed Securities — 2.20%
               
Banc of America Commercial Mortgage, Inc.,
               
2005-6 A1, 5.001%, Due 9/10/2047
   
209
     
210
 
2007-2 A2, 5.634%, Due 4/10/2049
   
650
     
675
 
JP Morgan Chase Commercial Mortgage Securities Corp.,
               
2007-CB19 A4, 5.937%, Due 2/12/2049
   
400
     
405
 
2007-CB20 A2, 5.629%, Due 2/12/2051
   
550
     
568
 
LB-UBS Commercial Mortgage Trust, 2007-C1 A4, 5.424%, Due 2/15/2040
   
450
     
445
 
Wachovia Bank Commercial Mortgage Trust, 2007-C32 A2, 5.924%, Due 6/15/2049
   
260
     
268
 
Total Non-Agency Mortgage-Backed Obligations
           
2,571
 
               
                 
ASSET-BACKED SECURITIES — 5.38%
               
American Express Credit Account Master Trust, 2006-2 A, 5.35%, Due 1/15/2014
   
1,050
     
1,103
 
Bank of America Auto Trust, 2010-1A A2, 0.75%, Due 6/15/2012 ‡
   
600
     
600
 
BMW Floorplan Master Owner Trust, 2009-1A A, 1.404%, Due 9/15/2014 ‡ #
   
250
     
250
 
Capital One Multi-Asset Execution Trust, 2006-A10 A10, 5.15%, Due 6/15/2014
   
800
     
843
 
Citibank Credit Card Issuance Trust, 2009-A2 A2, 1.804%, Due 5/15/2014 #
   
600
     
616
 
Discover Card Master Trust, 2009-A2 A, 1.53%, Due 2/17/2015 #
   
200
     
204
 
Ford Credit Auto Lease Trust, 2010-A A2, 1.04%, Due 3/15/2013 ‡
   
900
     
900
 
Ford Credit Floorplan Master Owner Trust, 2009-2 A, 1.804%, Due 9/15/2014 #
   
250
     
252
 
Harley-Davidson Motorcycle Trust, 2009-4 A3, 1.87%, Due 2/15/2014
   
300
     
303
 
Nissan Master Owner Trust Receivables, 2010-2A A, 1.404%, Due 1/15/2015 ‡ #
   
600
     
602
 
Volkswagen Auto Loan Enhanced Trust,
               
2010-1 A2, 0.66%, Due 5/21/2012
   
300
     
300
 
2008-2 A4A, 6.24%, Due 7/20/2015
   
300
     
332
 
Total Asset-Backed Securities
           
6,305
 
               
                 
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS — 12.75%
               
Federal Home Loan Mortgage Corporation — 5.09%
               
5.00%, Due 2/1/2021
   
723
     
771
 
4.50%, Due 4/1/2021
   
739
     
778
 
5.00%, Due 9/1/2035
   
1,811
     
1,884
 
5.50%, Due 4/1/2037
   
543
     
574
 
5.00%, Due 3/1/2038
   
1,215
     
1,260
 
5.50%, Due 5/1/2038
   
658
     
696
 
               
             
5,963
 
               
                 
Federal National Mortgage Association — 5.34%
               
6.50%, Due 7/1/2032
   
294
     
324
 
5.50%, Due 6/1/2033
   
674
     
715
 
4.50%, Due 9/1/2034
   
364
     
371
 
5.50%, Due 12/1/2035
   
758
     
801
 
5.00%, Due 2/1/2036
   
611
     
636
 
5.50%, Due 4/1/2036
   
1,093
     
1,156
 
5.50%, Due 2/1/2037
   
831
     
877
 
6.00%, Due 9/1/2037
   
548
     
583
 
6.00%, Due 1/1/2038
   
752
     
801
 
               
             
6,264
 
               
                 
Government National Mortgage Association — 2.32%
               
4.201%, Due 8/16/2026
   
398
     
407
 
6.00%, Due 2/15/2033
   
638
     
695
 
5.50%, Due 4/15/2033
   
878
     
940
 
 
See accompanying notes
 
 
27
 
 
 
 

 

 
American Beacon Retirement Income and Appreciation Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
5.00%, Due 5/15/2033
 
$
642
   
$
675
 
               
             
2,717
 
               
Total U.S. Agency Mortgage-Backed Obligations
           
14,944
 
               
                 
U.S. AGENCY OBLIGATIONS - 1.34%
               
Federal Farm Credit Bank - 1.23%
               
3.00%, Due 9/22/2014
   
1,400
     
1,433
 
               
                 
Tennessee Valley Authority - 0.11%
               
5.25%, Due 9/15/2039
   
130
     
132
 
               
Total U.S. Agency Obligations
           
1,565
 
               
                 
U.S. TREASURY OBLIGATIONS - 15.94%
               
4.25%, Due 8/15/2015
   
1,500
     
1,631
 
3.00%, Due 9/30/2016
   
1,750
     
1,753
 
3.125%, Due 10/31/2016
   
3,800
     
3,828
 
3.75%, Due 11/15/2018
   
2,550
     
2,605
 
3.625%, Due 2/15/2020
   
3,350
     
3,340
 
7.875%, Due 2/15/2021
   
300
     
409
 
6.25%, Due 8/15/2023
   
1,500
     
1,835
 
6.875%, Due 8/15/2025
   
250
     
326
 
5.25%, Due 11/15/2028
   
1,050
     
1,171
 
4.75%, Due 2/15/2037
   
420
     
438
 
4.50%, Due 8/15/2039
   
1,350
     
1,343
 
               
Total U.S. Treasury Obligations
           
18,679
 
               
 
 
                 
   
Shares
         
SHORT TERM INVESTMENTS - 4.33%
               
JPMorgan U.S. Government Money Market
               
Fund
   
2,076,096
     
2,076
 
 
 
                 
   
Par
         
   
Amount
         
U.S. Treasury,
               
0.22%, Due 10/21/2010
 
$
3,000
     
2,997
 
Total Short Term Investments
           
5,073
 
               
TOTAL INVESTMENTS 99.15% — (Cost $110,991)
           
116,184
 
OTHER ASSETS, NET OF LIABILITIES - 0.85%
           
999
 
                 
               
TOTAL NET ASSETS - 100.00%
         
$
117,183
 
               
 
Percentages are stated as a percent of net assets.
 
     
     
 
^
 
Non-income producing security.
     
 
Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $11,267 or 9.61% 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.
 
See accompanying notes
 
 
28
 
 

 
 

 
 
 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
AGENCIES — 0.38%
               
Agency — 0.38%
               
EDF SA, 4.60%, Due 1/27/2020 ‡
 
$
380
   
$
380
 
Petrobras International Finance Co., 6.875%, Due 1/20/2040
   
110
     
114
 
Petroleos Mexicanos, 6.00%, Due 3/5/2020 ‡
   
375
     
386
 
Total Agencies
           
880
 
               
                 
CORPORATE OBLIGATIONS — 43.41%
               
Finance — 18.08%
               
Aegon Funding Corp., 5.75%, Due 12/15/2020
   
400
     
399
 
American Express Co., 8.15%, Due 3/19/2038
   
325
     
428
 
American Express Credit Corp., 5.875%, Due 5/2/2013
   
610
     
667
 
Ameriprise Financial, Inc., 5.35%, Due 11/15/2010
   
730
     
747
 
ANZ National Int’l Ltd., 2.375%, Due 12/21/2012 ‡
   
350
     
353
 
Bank of America Corp.,
               
7.80%, Due 9/15/2016
   
700
     
782
 
6.00%, Due 9/1/2017
   
200
     
208
 
7.625%, Due 6/1/2019
   
800
     
913
 
Bank of New York Mellon Corp., 4.95%, Due 11/1/2012
   
290
     
314
 
Bank One Corp., 4.90%, Due 4/30/2015
   
500
     
511
 
Barclays Bank plc,
               
3.90%, Due 4/7/2015
   
380
     
384
 
6.75%, Due 5/22/2019
   
350
     
393
 
Bear Stearns Cos., Inc.,
               
6.40%, Due 10/2/2017
   
605
     
669
 
7.25%, Due 2/1/2018
   
270
     
311
 
Berkshire Hathaway Finance Corp., 5.75%, Due 1/15/2040
   
325
     
330
 
Berkshire Hathaway, Inc., 1.40%, Due 2/10/2012
   
1,900
     
1,914
 
BNP Paribas, 0.695%, Due 4/8/2013 #
   
950
     
950
 
Citigroup, Inc.,
               
0.529%, Due 11/5/2014 #
   
380
     
353
 
6.01%, Due 1/15/2015
   
520
     
554
 
6.125%, Due 11/21/2017
   
755
     
784
 
8.50%, Due 5/22/2019
   
1,100
     
1,299
 
CME Group, Inc.,
               
5.40%, Due 8/1/2013
   
260
     
286
 
5.75%, Due 2/15/2014
   
510
     
564
 
CNA Financial Corp., 7.35%, Due 11/15/2019
   
210
     
224
 
Countrywide Financial Corp., 5.80%, Due 6/7/2012
   
210
     
223
 
Credit Suisse N.Y.,
               
3.45%, Due 7/2/2012
   
700
     
726
 
5.30%, Due 8/13/2019
   
425
     
445
 
Deutsche Bank AG, 3.875%, Due 8/18/2014
   
400
     
414
 
General Electric Capital Corp., 5.25%, Due 10/19/2012
   
245
     
264
 
 
See accompanying notes
 
 
29
 
 
 
 

 
 
 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
General Electric Capital Corp.,
               
0.495%, Due 1/8/2016 #
 
$
1,300
   
$
1,192
 
5.625%, Due 5/1/2018
   
695
     
736
 
6.00%, Due 8/7/2019
   
350
     
378
 
5.50%, Due 1/8/2020
   
400
     
417
 
5.875%, Due 1/14/2038
   
645
     
638
 
Goldman Sachs Group, Inc.,
               
5.125%, Due 1/15/2015
   
245
     
253
 
5.35%, Due 1/15/2016
   
800
     
815
 
6.25%, Due 9/1/2017
   
800
     
837
 
5.95%, Due 1/18/2018
   
215
     
221
 
6.75%, Due 10/1/2037
   
245
     
238
 
Hartford Financial Services Group, Inc., 7.90%, Due 6/15/2010
   
350
     
353
 
HSBC Finance Corp., 5.25%, Due 1/14/2011
   
1,550
     
1,591
 
ING Bank, NV, 5.125%, Due 5/1/2015 ‡
   
250
     
262
 
John Hancock Global Funding II, 7.90%, Due 7/2/2010 ‡
   
700
     
707
 
JP Morgan Chase & Co.,
               
3.70%, Due 1/20/2015
   
2,330
     
2,378
 
6.00%, Due 1/15/2018
   
250
     
270
 
JP Morgan Chase Bank, NA, 0.587%, Due 6/13/2016 #
   
480
     
451
 
Lincoln National Corp., 4.75%, Due 2/15/2014
   
50
     
52
 
Lloyds TSB Bank plc, 4.375%, Due 1/12/2015 ‡
   
375
     
372
 
MassMutual Global Funding II, 0.412%, Due 12/6/2013 ‡ #
   
500
     
484
 
Mellon Funding Corp., 0.40%, Due 5/15/2014 #
   
500
     
493
 
Merrill Lynch & Co., Inc.,
               
6.40%, Due 8/28/2017
   
905
     
950
 
6.50%, Due 7/15/2018
   
520
     
543
 
6.11%, Due 1/29/2037
   
360
     
333
 
MetLife, Inc.,
               
5.375%, Due 12/15/2012
   
240
     
260
 
6.375%, Due 6/15/2034
   
400
     
427
 
Metropolitan Life Global Funding I, 0.507%, Due 3/15/2012 ‡ #
   
380
     
375
 
Monumental Global Funding III, 0.503%, Due 1/15/2014 ‡ #
   
375
     
358
 
Morgan Stanley,
               
0.783%, Due 10/15/2015 #
   
380
     
353
 
7.30%, Due 5/13/2019
   
370
     
406
 
5.625%, Due 9/23/2019
   
400
     
395
 
Nasdaq OMX Group,
               
4.00%, Due 1/15/2015
   
165
     
166
 
5.55%, Due 1/15/2020
   
165
     
167
 
Nordea Bank AB, 2.50%, Due 11/13/2012 ‡
   
400
     
405
 
PNC Funding Corp., 4.25%, Due 9/21/2015
   
390
     
403
 
Pricoa Global Funding I, 5.40%, Due 10/18/2012 ‡
   
175
     
189
 
ProLogis, 5.625%, Due 11/15/2016
   
200
     
198
 
 
See accompanying notes
 
 
30
 
 
 
 

 

 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Prudential Financial, Inc.,
               
4.50%, Due 7/15/2013
 
$
200
   
$
210
 
5.10%, Due 9/20/2014
   
280
     
300
 
Rabobank Nederland NV, 4.20%, Due 5/13/2014 ‡
   
600
     
630
 
Simon Property Group LP, 10.35%, Due 4/1/2019
   
375
     
486
 
State Street Corp., 4.30%, Due 5/30/2014
   
260
     
275
 
UBS AG, 5.875%, Due 12/20/2017
   
400
     
423
 
UnitedHealth Group, Inc., 5.25%, Due 3/15/2011
   
820
     
849
 
Wachovia Corp.,
               
0.673%, Due 10/15/2016 #
   
750
     
689
 
5.75%, Due 2/1/2018
   
750
     
807
 
Wells Fargo & Co., 5.625%, Due 12/11/2017
   
475
     
512
 
Westpac Banking Corp., 2.25%, Due 11/19/2012
   
375
     
379
 
Willis North America, Inc., 6.20%, Due 3/28/2017
   
280
     
287
 
             
41,322
 
               
                 
Industrials — 20.26%
               
Alltel Corp., 7.00%, Due 7/1/2012
   
215
     
239
 
Altria Group, Inc., 9.70%, Due 11/10/2018
   
275
     
346
 
America Movil, S.A.B. de C.V., 6.375%, Due 3/1/2035
   
375
     
385
 
American Honda Finance Corp., 4.625%, Due 4/2/2013 ‡
   
250
     
266
 
Anheuser-Busch InBev Worldwide, Inc.,
               
3.00%, Due 10/15/2012
   
390
     
401
 
5.00%, Due 4/15/2020 ‡
   
380
     
385
 
8.00%, Due 11/15/2039 ‡
   
175
     
227
 
AT&T Wireless Services, Inc., 8.75%, Due 3/1/2031
   
335
     
442
 
AT&T, Inc.,
               
5.10%, Due 9/15/2014
   
755
     
824
 
5.625%, Due 6/15/2016
   
400
     
444
 
5.50%, Due 2/1/2018
   
300
     
323
 
6.80%, Due 5/15/2036
   
225
     
246
 
6.40%, Due 5/15/2038
   
200
     
210
 
BAE Systems Holdings, Inc., 4.75%, Due 8/15/2010 ‡
   
800
     
808
 
Baxter International, Inc., 1.80%, Due 3/15/2013
   
210
     
210
 
Best Buy Co., Inc., 6.75%, Due 7/15/2013
   
345
     
386
 
Boeing Co., 1.875%, Due 11/20/2012
   
400
     
405
 
BP Capital Markets plc,
               
3.125%, Due 3/10/2012
   
520
     
538
 
3.875%, Due 3/10/2015
   
600
     
628
 
Bristol-Myers Squibb Co., 5.45%, Due 5/1/2018
   
125
     
137
 
Burlington Northern Santa Fe LLC,
               
5.75%, Due 3/15/2018
   
250
     
272
 
7.95%, Due 8/15/2030
   
180
     
224
 
CA, Inc., 5.375%, Due 12/1/2019
   
370
     
386
 
Cameron International Corp., 6.375%, Due 7/15/2018
   
125
     
133
 
 
See accompanying notes
 
 
31
 
 
 
 

 

 
 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Canadian National Railway Co.,
               
5.55%, Due 5/15/2018
 
$
400
   
$
437
 
5.55%, Due 3/1/2019
   
165
     
181
 
Canadian Natural Resources Ltd.,
               
6.70%, Due 7/15/2011
   
400
     
426
 
6.25%, Due 3/15/2038
   
360
     
379
 
Caterpillar Financial Services Corp.,
               
4.85%, Due 12/7/2012
   
470
     
507
 
1.90%, Due 12/17/2012
   
100
     
101
 
4.25%, Due 2/8/2013
   
250
     
265
 
Cisco Systems, Inc., 5.25%, Due 2/22/2011
   
200
     
207
 
Coca-Cola Enterprises, Inc., 7.375%, Due 3/3/2014
   
175
     
206
 
Comcast Cable Communications Holdings, Inc., 8.375%, Due 3/15/2013
   
128
     
149
 
Comcast Corp.,
               
6.30%, Due 11/15/2017
   
465
     
515
 
5.875%, Due 2/15/2018
   
235
     
253
 
6.55%, Due 7/1/2039
   
350
     
370
 
Computer Sciences Corp., 5.50%, Due 3/15/2013
   
280
     
302
 
ConocoPhillips,
               
4.60%, Due 1/15/2015
   
1,060
     
1,146
 
5.20%, Due 5/15/2018
   
250
     
269
 
5.75%, Due 2/1/2019
   
380
     
424
 
Costco Wholesale Corp., 5.30%, Due 3/15/2012
   
645
     
692
 
Covidien International Finance SA,
               
5.15%, Due 10/15/2010
   
750
     
765
 
5.45%, Due 10/15/2012
   
120
     
131
 
CRH America, Inc., 6.00%, Due 9/30/2016
   
370
     
405
 
Daimler Finance NA LLC,
               
5.875%, Due 3/15/2011
   
300
     
311
 
5.75%, Due 9/8/2011
   
200
     
211
 
Dell, Inc.,
               
3.375%, Due 6/15/2012
   
235
     
245
 
5.875%, Due 6/15/2019
   
90
     
100
 
Deutsche Telekom AG, 8.50%, Due 6/15/2010
   
611
     
616
 
DIRECTV Holdings LLC,
               
3.55%, Due 3/15/2015 ‡
   
475
     
474
 
6.35%, Due 3/15/2040 ‡
   
145
     
150
 
E. I. du Pont de Nemours & Co., 5.875%, Due 1/15/2014
   
395
     
443
 
Eaton Corp., 5.60%, Due 5/15/2018
   
280
     
301
 
EI Du Pont de Nemours & Co., 3.25%, Due 1/15/2015
   
660
     
674
 
EOG Resources Canada, Inc., 4.75%, Due 3/15/2014 ‡
   
400
     
423
 
Equity Residential, 5.125%, Due 3/15/2016
   
425
     
442
 
Express Scripts, Inc., 6.25%, Due 6/15/2014
   
480
     
538
 
France Telecom S.A., 4.375%, Due 7/8/2014
   
415
     
444
 
GlaxoSmithKline Capital, Inc., 5.65%, Due 5/15/2018
   
125
     
139
 
 
See accompanying notes
 
 
32
 
 

 
 

 
 
 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Hewlett-Packard Co.,
               
4.25%, Due 2/24/2012
 
$
440
   
$
465
 
4.50%, Due 3/1/2013
   
250
     
269
 
6.125%, Due 3/1/2014
   
310
     
352
 
Honeywell International, Inc., 4.25%, Due 3/1/2013
   
770
     
824
 
Hospira, Inc., 6.05%, Due 3/30/2017
   
205
     
225
 
International Business Machines Corp.,
               
4.75%, Due 11/29/2012
   
325
     
352
 
7.625%, Due 10/15/2018
   
695
     
871
 
ITT Corp., 4.90%, Due 5/1/2014
   
640
     
687
 
John Deere Capital Corp., 4.90%, Due 9/9/2013
   
650
     
710
 
Johnson Controls, Inc., 5.00%, Due 3/30/2020
   
545
     
556
 
Kellogg Co., 4.25%, Due 3/6/2013
   
250
     
266
 
Kerr-McGee Corp., 6.95%, Due 7/1/2024
   
325
     
367
 
Koninklijke Philips Electronics NV, 5.75%, Due 3/11/2018
   
165
     
181
 
Kraft Foods, Inc., 6.50%, Due 2/9/2040
   
220
     
237
 
L-3 Communications Corp., 5.20%, Due 10/15/2019 ‡
   
160
     
164
 
Lorillard Tobacco Co., 8.125%, Due 6/23/2019
   
255
     
288
 
Lowe’s Companies, Inc.,
               
5.50%, Due 10/15/2035
   
300
     
298
 
6.65%, Due 9/15/2037
   
130
     
149
 
Marathon Oil Corp., 6.00%, Due 10/1/2017
   
275
     
301
 
Mead Johnson Nutrition Co., 4.90%, Due 11/1/2019 ‡
   
275
     
278
 
Medtronic, Inc., 3.00%, Due 3/15/2015
   
965
     
975
 
Nationwide Building Society, 5.50%, Due 7/18/2012 ‡
   
550
     
590
 
Norfolk Southern Corp., 5.75%, Due 4/1/2018
   
250
     
273
 
Northrop Grumman Corp., 5.05%, Due 8/1/2019
   
200
     
209
 
Novartis Capital Corp.,
               
1.90%, Due 4/24/2013
   
630
     
632
 
4.125%, Due 2/10/2014
   
395
     
421
 
Pfizer, Inc., 4.45%, Due 3/15/2012
   
565
     
598
 
Quest Diagnostics, Inc., 4.75%, Due 1/30/2020
   
665
     
663
 
Raytheon Co.,
               
5.375%, Due 4/1/2013
   
200
     
219
 
4.40%, Due 2/15/2020
   
390
     
395
 
Rogers Communications, Inc., 6.80%, Due 8/15/2018
   
250
     
288
 
Safeway, Inc., 6.25%, Due 3/15/2014
   
460
     
516
 
Simon Property Group LP, 5.75%, Due 12/1/2015
   
370
     
400
 
Telecom Italia Capital SA, 4.95%, Due 9/30/2014
   
395
     
407
 
Telefonica Emisiones SAU,
               
5.984%, Due 6/20/2011
   
390
     
410
 
4.949%, Due 1/15/2015
   
425
     
451
 
6.421%, Due 6/20/2016
   
350
     
391
 
Thermo Fisher Scientific, Inc., 3.20%, Due 5/1/2015
   
230
     
231
 
Thomson Reuters Corp., 4.70%, Due 10/15/2019
   
400
     
411
 
 
See accompanying notes
 
 
33
 
 
 
 

 

 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Time Warner Cable, Inc.,
               
8.25%, Due 2/14/2014
 
$
330
   
$
390
 
5.85%, Due 5/1/2017
   
350
     
379
 
6.75%, Due 7/1/2018
   
375
     
425
 
Time Warner, Inc., 4.875%, Due 3/15/2020
   
190
     
188
 
Tyco Electronics Group SA, 6.55%, Due 10/1/2017
   
225
     
252
 
Tyco International Finance SA,
               
4.125%, Due 10/15/2014
   
200
     
209
 
8.50%, Due 1/15/2019
   
320
     
406
 
Union Pacific Corp., 7.875%, Due 1/15/2019
   
350
     
428
 
United Technologies Corp.,
               
6.125%, Due 2/1/2019
   
155
     
178
 
6.125%, Due 7/15/2038
   
125
     
140
 
Valero Energy Corp.,
               
9.375%, Due 3/15/2019
   
170
     
209
 
6.625%, Due 6/15/2037
   
205
     
206
 
Verizon Communications, Inc.,
               
5.50%, Due 4/1/2017
   
400
     
432
 
6.90%, Due 4/15/2038
   
400
     
454
 
Verizon Wireless Capital, LLC,
               
3.75%, Due 5/20/2011
   
370
     
381
 
8.50%, Due 11/15/2018
   
435
     
550
 
Vodafone Group plc, 6.15%, Due 2/27/2037
   
360
     
375
 
Wal-Mart Stores, Inc., 7.55%, Due 2/15/2030
   
400
     
505
 
Waste Management, Inc.,
               
7.375%, Due 3/11/2019
   
270
     
321
 
6.125%, Due 11/30/2039
   
130
     
135
 
Wyeth Corp., 5.50%, Due 2/1/2014
   
590
     
655
 
Xerox Corp.,
               
5.65%, Due 5/15/2013
   
50
     
54
 
8.25%, Due 5/15/2014
   
190
     
223
 
             
46,321
 
               
                 
Other Government — 0.16%
               
Province of Ontario Canada, 4.10%, Due 6/16/2014
   
350
     
371
 
               
                 
Utilities — 4.91%
               
Columbus Southern Power Co., 5.50%, Due 3/1/2013
   
495
     
537
 
Consolidated Edison Co. of New York, Inc., 5.50%, Due 12/1/2039
   
350
     
349
 
Dominion Resources, Inc.,
               
Series A, 5.60%, Due 11/15/2016
   
475
     
519
 
Series D, 8.875%, Due 1/15/2019
   
80
     
103
 
Duke Energy Carolinas LLC, 5.10%, Due 4/15/2018
   
400
     
422
 
Duke Energy Indiana, Inc., 6.05%, Due 6/15/2016
   
355
     
396
 
Energy Transfer Partners LP,
               
8.50%, Due 4/15/2014
   
520
     
611
 
 
See accompanying notes
 
 
34
 
 
 
 

 

 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
9.00%, Due 4/15/2019
 
$
300
   
$
375
 
Enterprise Products Operating LLC,
               
5.65%, Due 4/1/2013
   
490
     
530
 
6.125%, Due 10/15/2039
   
255
     
261
 
Exelon Generation Co. LLC, 6.25%, Due 10/1/2039
   
365
     
381
 
FirstEnergy Solutions Corp., 4.80%, Due 2/15/2015
   
175
     
181
 
MidAmerican Energy Holdings Co.,
               
5.875%, Due 10/1/2012
   
505
     
553
 
6.125%, Due 4/1/2036
   
375
     
391
 
Pacific Gas & Electric Co., 6.25%, Due 12/1/2013
   
150
     
169
 
Progress Energy, Inc., 4.875%, Due 12/1/2019
   
400
     
400
 
Public Service Enterprise Group, Inc., 6.95%, Due 6/1/2012
   
590
     
650
 
Sempra Energy, 6.50%, Due 6/1/2016
   
285
     
324
 
Southern Power Co., 6.25%, Due 7/15/2012
   
550
     
602
 
Spectra Energy Capital Corp., 5.65%, Due 3/1/2020
   
265
     
279
 
Spectra Energy Capital LLC, 5.668%, Due 8/15/2014
   
255
     
276
 
TransCanada PipeLines Ltd., 7.625%, Due 1/15/2039
   
520
     
648
 
Union Electric Co., 6.70%, Due 2/1/2019
   
370
     
421
 
Virginia Electric and Power Co., 5.40%, Due 4/30/2018
   
400
     
433
 
Westar Energy, Inc., 6.00%, Due 7/1/2014
   
200
     
223
 
Wisconsin Electric Power Co., 6.25%, Due 12/1/2015
   
500
     
576
 
Xcel Energy, Inc., 5.613%, Due 4/1/2017
   
581
     
622
 
             
11,232
 
               
Total Corporate Obligations
           
99,246
 
               
                 
MUNICIPAL SECURITIES — 0.11%
               
Municipal Obligations — 0.11%
               
State of Illinois, 1.823%, Due 1/1/2011
   
250
     
251
 
               
                 
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS — 3.83%
               
Banc of America Commercial Mortgage, Inc.,
               
2005-6 A1, 5.001%, Due 9/10/2047
   
104
     
105
 
2007-2 A2, 5.634%, Due 4/10/2049
   
850
     
882
 
Bear Stearns Commercial Mortgage Securities, Inc.,
               
2006-PWR14 A4, 5.201%, Due 12/11/2038
   
790
     
798
 
2006-PW13 A4, 5.54%, Due 9/11/2041
   
1,185
     
1,226
 
2004-PWR5 A4, 4.831%, Due 7/11/2042
   
835
     
849
 
Citigroup Commercial Mortgage Trust, 2004-C2 A3, 4.38%, Due 10/15/2041
   
770
     
782
 
Citigroup/Deutsche Bank Commercial Mortgage Trust, 2007-CD5 A4, 5.886%, Due 11/15/2044
   
840
     
850
 
JP Morgan Chase Commercial Mortgage Securities Corp.,
               
2004-CBX A4, 4.529%, Due 1/12/2037
   
255
     
261
 
2005-LDP1 A2, 4.625%, Due 3/15/2046
   
331
     
338
 
2007-CB19 A4, 5.937%, Due 2/12/2049
   
550
     
558
 
2007-CB20 A2, 5.629%, Due 2/12/2051
   
750
     
774
 
LB-UBS Commercial Mortgage Trust, 2007-C1 A4, 5.424%, Due 2/15/2040
   
550
     
543
 
 
See accompanying notes
 
 
35
 
 
 

 
 

American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Prime Mortgage Trust, 2005-2, 5.25%, Due 7/25/2020
 
$
371
   
$
367
 
Wachovia Bank Commercial Mortgage Trust, 2007-C32 A2, 5.924%, Due 6/15/2049
   
410
     
423
 
Total Non-Agency Mortgage-Backed Obligations
           
8,756
 
               
                 
ASSET-BACKED SECURITIES — 4.37%
               
American Express Credit Account Master Trust, 2006-2 A, 5.35%, Due 1/15/2014
   
1,550
     
1,628
 
Bank of America Auto Trust, 2010-1A A2, 0.75%, Due 6/15/2012 ‡
   
750
     
750
 
BMW Floorplan Master Owner Trust, 2009-1A A, 1.404%, Due 9/15/2014 ‡ #
   
400
     
400
 
Capital One Multi-Asset Execution Trust, 2006-A10 A10, 5.15%, Due 6/15/2014
   
1,150
     
1,212
 
Citibank Credit Card Issuance Trust, 2009-A2 A2, 1.804%, Due 5/15/2014 #
   
750
     
770
 
Discover Card Master Trust, 2009-A2 A, 1.53%, Due 2/17/2015 #
   
600
     
613
 
Ford Credit Auto Lease Trust, 2010-A A2, 1.04%, Due 3/15/2013 ‡
   
1,150
     
1,150
 
Ford Credit Floorplan Master Owner Trust, 2009-2 A, 1.804%, Due 9/15/2014 #
   
400
     
404
 
Harley-Davidson Motorcycle Trust, 2009-4 A3, 1.87%, Due 2/15/2014
   
350
     
353
 
Honda Auto Receivables Owner Trust, 2009-3 A4, 3.30%, Due 9/15/2015
   
385
     
399
 
Hyundai Auto Receivables Trust, 2009-A A4, 3.15%, Due 3/15/2016
   
220
     
227
 
John Deere Owner Trust,
               
2009-A A3, 2.59%, Due 10/15/2013
   
395
     
401
 
2009-A A4, 3.96%, Due 5/16/2016
   
215
     
225
 
Nissan Master Owner Trust Receivables, 2010-2A A, 1.404%, Due 1/15/2015 ‡ #
   
750
     
752
 
Volkswagen Auto Loan Enhanced Trust,
               
2010-1 A2, 0.66%, Due 5/21/2012
   
375
     
375
 
2008-2 A4A, 6.24%, Due 7/20/2015
   
300
     
332
 
Total Asset-Backed Securities
           
9,991
 
               
                 
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS — 21.49%
               
Federal Home Loan Mortgage Corporation — 7.39%
               
4.50%, Due 3/1/2019
   
371
     
390
 
5.00%, Due 10/1/2020
   
883
     
941
 
5.00%, Due 4/1/2023
   
245
     
260
 
5.00%, Due 8/1/2033
   
546
     
570
 
5.50%, Due 2/1/2034
   
673
     
714
 
6.00%, Due 8/1/2034
   
308
     
334
 
5.00%, Due 8/1/2035
   
362
     
376
 
5.00%, Due 9/1/2035
   
1,420
     
1,478
 
6.00%, Due 8/1/2036
   
388
     
416
 
5.50%, Due 11/1/2036
   
426
     
451
 
5.50%, Due 4/1/2037
   
543
     
574
 
5.50%, Due 5/1/2037
   
303
     
321
 
6.00%, Due 9/1/2037
   
228
     
244
 
5.50%, Due 12/1/2037
   
2,114
     
2,235
 
6.00%, Due 12/1/2037
   
280
     
301
 
5.00%, Due 3/1/2038
   
2,572
     
2,670
 
6.00%, Due 3/1/2038
   
2,034
     
2,179
 
5.50%, Due 5/1/2038
   
822
     
870
 
 
See accompanying notes
 
 
36
 
 
 
 

 

 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
5.50%, Due 6/1/2038
 
$
666
   
$
705
 
5.50%, Due 10/1/2039
   
806
     
852
 
             
16,881
 
               
                 
Federal National Mortgage Association — 12.76%
               
6.50%, Due 2/1/2017
   
142
     
154
 
5.00%, Due 12/1/2017
   
516
     
550
 
4.50%, Due 9/1/2018
   
984
     
1,038
 
4.00%, Due 8/1/2020
   
294
     
306
 
5.00%, Due 12/1/2023
   
505
     
533
 
5.00%, Due 3/1/2024
   
1,413
     
1,494
 
4.50%, Due 4/1/2024
   
579
     
603
 
5.00%, Due 3/1/2034
   
701
     
732
 
5.50%, Due 6/1/2034
   
373
     
396
 
4.50%, Due 9/1/2034
   
243
     
247
 
5.50%, Due 2/1/2035
   
794
     
843
 
5.00%, Due 11/1/2035
   
1,145
     
1,191
 
5.50%, Due 12/1/2035
   
869
     
919
 
5.50%, Due 1/1/2036
   
1,158
     
1,224
 
5.00%, Due 2/1/2036
   
611
     
636
 
5.50%, Due 2/1/2036
   
574
     
607
 
5.00%, Due 3/1/2036
   
566
     
589
 
5.50%, Due 4/1/2036
   
1,366
     
1,444
 
6.00%, Due 9/1/2036
   
291
     
311
 
6.50%, Due 9/1/2036
   
958
     
1,041
 
5.50%, Due 11/1/2036
   
447
     
472
 
6.00%, Due 11/1/2036
   
554
     
591
 
6.50%, Due 12/1/2036
   
451
     
489
 
5.50%, Due 2/1/2037
   
831
     
877
 
5.50%, Due 8/1/2037
   
1,978
     
2,096
 
6.00%, Due 9/1/2037
   
822
     
875
 
6.00%, Due 1/1/2038
   
1,203
     
1,281
 
5.00%, Due 3/1/2038
   
143
     
149
 
5.00%, Due 4/1/2038
   
1,726
     
1,790
 
5.00%, Due 5/1/2038
   
3,015
     
3,126
 
5.00%, Due 6/1/2038
   
984
     
1,020
 
5.50%, Due 6/1/2038
   
1,474
     
1,555
 
             
29,179
 
               
                 
Government National Mortgage Association — 1.34%
               
4.201%, Due 8/16/2026
   
227
     
233
 
6.50%, Due 3/15/2028
   
292
     
322
 
6.00%, Due 4/15/2031
   
346
     
377
 
5.50%, Due 2/20/2034
   
401
     
428
 
 
See accompanying notes
 
 
37
 
 
 
 

 

 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
5.50%, Due 2/15/2040
 
$
1,605
   
$
1,711
 
             
3,071
 
               
Total U.S. Agency Mortgage-Backed Obligations
           
49,131
 
               
                 
U.S. AGENCY OBLIGATIONS — 0.51%
               
Federal National Mortgage Association — 0.42%
               
5.125%, Due 1/2/2014
   
385
     
421
 
4.625%, Due 10/15/2014
   
500
     
546
 
             
967
 
               
                 
Tennessee Valley Authority — 0.09%
               
5.25%, Due 9/15/2039
   
200
     
203
 
               
Total U.S. Agency Obligations
           
1,170
 
               
                 
U.S. TREASURY OBLIGATIONS — 22.13%
               
1.375%, Due 2/15/2012
   
9,270
     
9,354
 
1.375%, Due 3/15/2012
   
1,000
     
1,009
 
2.375%, Due 2/28/2015
   
7,965
     
7,970
 
4.25%, Due 8/15/2015
   
2,500
     
2,719
 
3.00%, Due 9/30/2016
   
1,050
     
1,052
 
3.125%, Due 10/31/2016
   
6,300
     
6,347
 
3.75%, Due 11/15/2018
   
3,100
     
3,167
 
3.625%, Due 2/15/2020
   
10,220
     
10,190
 
7.875%, Due 2/15/2021
   
1,050
     
1,430
 
6.25%, Due 8/15/2023
   
1,400
     
1,712
 
6.875%, Due 8/15/2025
   
770
     
1,003
 
5.25%, Due 11/15/2028
   
750
     
837
 
4.75%, Due 2/15/2037
   
1,300
     
1,356
 
4.50%, Due 8/15/2039
   
1,000
     
995
 
4.375%, Due 11/15/2039
   
1,485
     
1,448
 
Total U.S. Treasury Obligations
           
50,589
 
               
 
 
                 
   
Shares
         
SHORT TERM INVESTMENTS — 2.91%
               
JPMorgan U.S. Government Money Market Fund
   
4,645,844
     
4,646
 

 
                 
   
Par
         
   
Amount
         
U.S. Treasury, 0.22%, Due 10/21/2010
 
$
2,000
     
1,998
 
Total Short Term Investments
           
6,644
 
               
                 
TOTAL INVESTMENTS — 99.14% (Cost $218,438)
         
$
226,658
 
OTHER ASSETS, NET OF LIABILITIES — 0.86%
           
1,968
 
TOTAL NET ASSETS — 100.00%
         
$
228,626
 
               
 
See accompanying notes
 
 
38
 
 
 
 

 

 
 
American Beacon Intermediate Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
 
Percentages are stated as a percent of net assets.
 
     
     
 
Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $11,718 or 5.13% 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.
 
See accompanying notes
 
 
39
 
 

 
 

 
 
 
American Beacon Short-Term Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
CORPORATE OBLIGATIONS — 52.48%
               
Finance - 25.70%
               
Barclays Bank plc, 5.45%, Due 9/12/2012
 
$
1,000
   
$
1,078
 
Berkshire Hathaway Finance Corp., 4.00%, Due 4/15/2012
   
1,000
     
1,055
 
Berkshire Hathaway, Inc., 0.68%, Due 2/11/2013 ‡
   
2,000
     
2,006
 
BNP Paribas, 0.695%, Due 4/8/2013 ‡
   
1,500
     
1,500
 
Citigroup, Inc., 0.529%, Due 11/5/2014 ‡
   
2,573
     
2,390
 
CME Group, Inc., 5.40%, Due 8/1/2013
   
250
     
275
 
Credit Suisse First Boston, 5.00%, Due 5/15/2013
   
2,000
     
2,152
 
Dexia Credit Local N.Y., 0.652%, Due 3/5/2013 ‡#
   
3,000
     
3,002
 
General Electric Capital Corp.,
               
0.401%, Due 3/20/2014 ‡
   
1,446
     
1,395
 
0.517%, Due 9/15/2014 ‡
   
1,218
     
1,177
 
Goldman Sachs Group, Inc., 4.75%, Due 7/15/2013
   
2,000
     
2,069
 
HSBC Finance Corp., 6.75%, Due 5/15/2011
   
1,000
     
1,053
 
John Hancock Global Funding II, 7.90%, Due 7/2/2010 #
   
2,000
     
2,021
 
JP Morgan Chase & Co., 0.902%, Due 2/26/2013 ‡
   
3,000
     
3,008
 
MassMutual Global Funding II,
               
3.625%, Due 7/16/2012 #
   
500
     
523
 
0.412%, Due 12/6/2013 ‡ #
   
700
     
678
 
MBNA Corp., 7.50%, Due 3/15/2012
   
2,000
     
2,168
 
Mellon Funding Corp., 0.40%, Due 5/15/2014 ‡
   
2,000
     
1,972
 
Metropolitan Life Global Funding I,
               
0.507%, Due 3/15/2012 ‡ #
   
1,000
     
987
 
2.875%, Due 9/17/2012 #
   
1,000
     
1,019
 
Monumental Global Funding III, 0.503%, Due 1/15/2014 ‡ #
   
1,000
     
954
 
Morgan Stanley, 0.595%, Due 1/9/2014 ‡
   
2,000
     
1,918
 
Pricoa Global Funding I,
               
0.438%, Due 1/30/2012 ‡ #
   
800
     
783
 
5.40%, Due 10/18/2012 #
   
500
     
540
 
Rabobank Nederland NV, 2.65%, Due 8/17/2012 #
   
2,000
     
2,059
 
Svenska Handelsbanken AB, 4.875%, Due 6/10/2014 #
   
1,500
     
1,598
 
UBS AG, 1.352%, Due 2/23/2012 ‡
   
1,000
     
1,006
 
UnitedHealth Group, Inc., 5.125%, Due 11/15/2010
   
1,000
     
1,023
 
Wachovia Bank NA, 0.629%, Due 11/3/2014 ‡
   
1,000
     
971
 
Wachovia Corp., 2.019%, Due 5/1/2013 ‡
   
1,000
     
1,030
 
             
43,410
 
               
                 
Industrials — 24.94%
               
American Honda Finance Corp., 4.625%, Due 4/2/2013 #
   
1,000
     
1,064
 
Anheuser-Busch InBev Worldwide, Inc.,
               
3.00%, Due 10/15/2012
   
1,000
     
1,028
 
2.50%, Due 3/26/2013 #
   
1,000
     
1,005
 
AT&T Wireless Services, Inc., 7.875%, Due 3/1/2011
   
2,500
     
2,645
 
BAE Systems Holdings, Inc., 4.75%, Due 8/15/2010 #
   
1,100
     
1,111
 
Burlington Northern Santa Fe LLC, 6.75%, Due 7/15/2011
   
1,000
     
1,059
 
 
See accompanying notes
 
 
40
 
 

 
 

 
 
 
American Beacon Short-Term Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
Canadian Natural Resources Ltd., 6.70%, Due 7/15/2011
 
$
1,000
   
$
1,064
 
Caterpillar Financial Services Corp., 4.25%, Due 2/8/2013
   
500
     
530
 
Cellco Partnership / Verizon Wireless Capital LLC, 5.25%, Due 2/1/2012
   
1,000
     
1,066
 
Cisco Systems, Inc., 5.25%, Due 2/22/2011
   
550
     
570
 
Comcast Cable Communications Holdings, Inc., 8.375%, Due 3/15/2013
   
1,365
     
1,586
 
Covidien International Finance SA, 5.15%, Due 10/15/2010
   
1,000
     
1,020
 
Daimler Finance NA LLC, 5.75%, Due 9/8/2011
   
1,000
     
1,055
 
Dell, Inc., 3.375%, Due 6/15/2012
   
500
     
521
 
Deutsche Telekom AG, 8.50%, Due 6/15/2010
   
2,000
     
2,017
 
Devon Financing Corp. U.L.C., 6.875%, Due 9/30/2011
   
1,000
     
1,076
 
France Telecom S.A., 7.75%, Due 3/1/2011
   
1,000
     
1,056
 
General Mills, Inc., 5.25%, Due 8/15/2013
   
1,000
     
1,099
 
Hewlett-Packard Co., 2.25%, Due 5/27/2011
   
500
     
506
 
John Deere Capital Corp., 5.25%, Due 10/1/2012
   
1,000
     
1,089
 
Kellogg Co., 6.60%, Due 4/1/2011
   
1,000
     
1,050
 
Kraft Foods, Inc., 5.625%, Due 11/1/2011
   
500
     
530
 
Marathon Oil Canada Corp., 8.375%, Due 5/1/2012
   
1,000
     
1,123
 
Nationwide Building Society, 5.50%, Due 7/18/2012 #
   
1,000
     
1,073
 
Nissan Motor Acceptance Corp., 5.625%, Due 3/14/2011 #
   
2,000
     
2,075
 
Norfolk Southern Corp., 8.625%, Due 5/15/2010
   
1,000
     
1,002
 
Northrop Grumman Corp., 7.125%, Due 2/15/2011
   
1,000
     
1,047
 
Roche Holdings, Inc., 4.50%, Due 3/1/2012 #
   
1,000
     
1,057
 
Simon Property Group LP, 5.30%, Due 5/30/2013
   
1,000
     
1,072
 
Telefonica Emisiones SAU, 0.58%, Due 2/4/2013 ‡
   
1,000
     
982
 
Time Warner Cable, Inc., 5.40%, Due 7/2/2012
   
1,000
     
1,076
 
Tyco International Finance SA, 6.75%, Due 2/15/2011
   
2,000
     
2,090
 
Union Pacific Corp.,
               
3.625%, Due 6/1/2010
   
860
     
862
 
6.50%, Due 4/15/2012
   
500
     
546
 
5.45%, Due 1/31/2013
   
1,000
     
1,090
 
Vodafone Group plc, 5.50%, Due 6/15/2011
   
1,000
     
1,049
 
Xerox Corp., 5.65%, Due 5/15/2013
   
300
     
322
 
XTO Energy, Inc.,
               
5.90%, Due 8/1/2012
   
1,000
     
1,098
 
6.25%, Due 4/15/2013
   
719
     
807
 
             
42,118
 
               
                 
Utilities — 1.84%
               
Dominion Resources, Inc., 5.70%, Due 9/17/2012
   
1,000
     
1,088
 
FPL Group Capital, Inc., 0.65%, Due 11/9/2012 ‡
   
1,000
     
999
 
Midamerican Energy Holdings Co., 3.15%, Due 7/15/2012
   
1,000
     
1,030
 
             
3,117
 
               
Total Corporate Obligations
           
88,645
 
               
 
See accompanying notes
 
 
41
 
 
 

 
 

American Beacon Short-Term Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
MUNICIPAL SECURITIES — 0.21%
               
Municipal Obligations — 0.21%
               
State of Illinois, 1.823%, Due 1/1/2011
 
$
350
   
$
351
 
               
                 
NON-AGENCY MORTGAGE-BACKED OBLIGATIONS — 1.88%
               
Banc of America Commercial Mortgage, Inc.,
               
2005-6 A1, 5.001%, Due 9/10/2047
   
209
     
210
 
2007-2 A2, 5.634%, Due 4/10/2049
   
800
     
830
 
GMAC Mortgage Servicer Advance Funding Co. Ltd., 2010-1A A, 4.25%, Due 1/15/2022 #
   
2,000
     
2,000
 
Wachovia Bank Commercial Mortgage Trust, 2006-C23 A1, 5.203%, Due 1/15/2045
   
132
     
133
 
Total Non-Agency Mortgage-Backed Obligations
           
3,173
 
               
                 
ASSET-BACKED SECURITIES — 24.39%
               
Bank of America Auto Trust,
               
2010-1A A2, 0.75%, Due 6/15/2012 #
   
1,000
     
1,000
 
2009-1A A3, 2.67%, Due 7/15/2013 #
   
1,000
     
1,020
 
2009-2A A3, 2.13%, Due 9/15/2013 #
   
1,000
     
1,014
 
BMW Floorplan Master Owner Trust, 2009-1A A, 1.404%, Due 9/15/2014 ‡ #
   
2,000
     
2,000
 
Capital One Multi-Asset Execution Trust, 2009-A2 A2, 3.20%, Due 4/15/2014
   
2,000
     
2,051
 
CarMax Auto Owner Trust, 2010-1 A2, 0.83%, Due 11/15/2012
   
1,000
     
1,000
 
Chase Issuance Trust, 2009-A2 A2, 1.804%, Due 4/15/2014 ‡
   
2,000
     
2,049
 
Chrysler Financial Lease Trust, 2010-A A2, 1.78%, Due 6/15/2011 #
   
3,000
     
2,997
 
Citibank Credit Card Issuance Trust, 2009-A3 A3, 2.70%, Due 6/24/2013
   
2,000
     
2,040
 
CitiFinancial Auto Issuance Trust, 2009-1 A3, 2.59%, Due 10/15/2013 #
   
2,000
     
2,023
 
Discover Card Master Trust, 2009-A2 A, 1.53%, Due 2/17/2015 ‡
   
2,000
     
2,043
 
Ford Credit Auto Owner Trust, 2009-D A3, 2.17%, Due 10/15/2013
   
1,000
     
1,014
 
Ford Credit Floorplan Master Owner Trust, 2009-2 A, 1.804%, Due 9/15/2014 ‡
   
2,000
     
2,019
 
GE Capital Credit Card Master Note Trust, 2009-2 A, 3.69%, Due 7/15/2015
   
2,000
     
2,071
 
GE Equipment Midticket LLC, 2009-1 A3, 2.34%, Due 6/17/2013
   
1,000
     
1,013
 
Harley-Davidson Motorcycle Trust, 2007-3 A4, 5.52%, Due 11/15/2013
   
2,000
     
2,088
 
Honda Auto Receivables Owner Trust, 2009-3 A3, 2.31%, Due 5/15/2013
   
1,500
     
1,525
 
John Deere Owner Trust, 2010-A A2, 0.72%, Due 7/16/2012
   
3,000
     
3,000
 
Mercedes-Benz Auto Receivables Trust, 2010-1 A2, 0.70%, Due 8/15/2012
   
1,000
     
999
 
Nissan Auto Lease Trust, 2009-B A3, 2.07%, Due 1/15/2015
   
2,000
     
2,025
 
Nissan Master Owner Trust Receivables, 2010-2A A, 1.404%, Due 1/15/2015 ‡ #
   
1,000
     
1,003
 
USAA Auto Owner Trust, 2007-1 A4, 5.55%, Due 2/15/2013
   
3,000
     
3,100
 
Volkswagen Auto Loan Enhanced Trust,
               
2010-1 A2, 0.66%, Due 5/21/2012
   
1,000
     
1,000
 
2008-2 A4A, 6.24%, Due 7/20/2015
   
1,000
     
1,108
 
Total Asset-Backed Securities
           
41,202
 
               
                 
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS — 5.15%
               
Government National Mortgage Association — 5.15%
               
4.968%, Due 12/16/2021
   
490
     
500
 
4.201%, Due 8/16/2026
   
1,137
     
1,164
 
 
See accompanying notes
 
 
42
 
 
 
 

 

 
American Beacon Short-Term Bond Fund
Schedule of Investments
April 30, 2010 (Unaudited)
 
                 
   
Par
       
   
Amount
   
Value
 
   
(dollars in thousands)
 
2.782%, Due 6/16/2036
 
$
1,994
   
$
1,996
 
3.069%, Due 6/16/2036
   
3,000
     
3,027
 
3.21%, Due 10/16/2039
   
1,995
     
2,017
 
Total U.S. Agency Mortgage-Backed Obligations
           
8,704
 
               
                 
U.S. AGENCY OBLIGATIONS — 6.07%
               
Bank of America Corp. (FDIC Guaranteed) — 6.07%
               
2.375%, Due 6/22/2012
   
10,000
     
10,244
 
               
                 
U.S. TREASURY OBLIGATIONS— 8.93%
               
2.50%, Due 3/31/2015
   
15,000
     
15,075
 
               
 
                 
   
Shares
         
SHORT TERM INVESTMENTS — 0.35%
               
JPMorgan U.S. Government Money Market Fund
   
584,389
     
584
 
               
                 
TOTAL INVESTMENTS — 99.46% (Cost $165,116)
         
$
167,978
 
OTHER ASSETS, NET OF LIABILITIES — 0.54%
           
918
 
TOTAL NET ASSETS — 100.00%
         
$
168,896
 
               
Percentages are stated as a percent of net assets.
 
     
     
 
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.
     
#
 
Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $34,606 or 20.49% of net assets. The Fund has no right to demand registration of these securities.
 
See accompanying notes
 
 
43
 
 
 
 

 

 
 
American Beacon Funds
Statements of Assets and Liabilities
April 30, 2009 (Unaudited) (in thousands except share and per share amounts)
 
                                 
           
 
             
           
Retirement
             
   
 
High Yield
   
Income and
Appreciation
   
 
Intermediate
   
Short-Term
 
   
Bond Fund
   
Fund
   
Bond Fund
   
Bond Fund
 
Assets:
                               
Investments in securities, at value A
 
$
244,206
   
$
116,184
   
$
226,658
   
$
167,978
 
Receivable for investments sold
   
4,035
     
438
     
     
 
Dividends and interest receivable
   
5,723
     
912
     
1,865
     
1,060
 
Receivable for fund shares sold
   
999
     
178
     
202
     
148
 
Receivable for tax reclaims
   
     
7
     
9
     
4
 
Receivable for expense reimbursement
   
     
     
     
4
 
Prepaid expenses
   
53
     
27
     
40
     
31
 
                         
Total assets
   
255,016
     
117,746
     
228,774
     
169,225
 
                         
Liabilities:
                               
Payable for investments purchased
   
10,595
     
367
     
     
 
Payable for fund shares redeemed
   
574
     
     
47
     
198
 
Dividends payable
   
174
     
     
     
5
 
Management and investment advisory fees payable (Note 2)
   
294
     
112
     
36
     
27
 
Administrative service and service fees payable
   
52
     
56
     
10
     
25
 
Professional fees payable
   
10
     
10
     
15
     
20
 
Trustee fees payable
   
6
     
2
     
7
     
8
 
Prospectus and shareholder reports
   
40
     
11
     
19
     
30
 
Other liabilities
   
15
     
5
     
14
     
16
 
                         
Total liabilities
   
11,760
     
563
     
148
     
329
 
                         
Net Assets
 
$
243,256
   
$
117,183
   
$
228,626
   
$
168,896
 
                         
                                 
Analysis of Net Assets:
                               
Paid-in-capital
   
245,154
     
114,325
     
219,325
     
174,152
 
Undistributed net investment income
   
503
     
103
     
501
     
(554
)
Accumulated net realized gain (loss)
   
(18,971
)
   
(2,232
)
   
580
     
(7,564
)
Unrealized appreciation of investments, futures contracts, and foreign currency
   
16,570
     
4,987
     
8,220
     
2,862
 
                         
Net assets
 
$
243,256
   
$
117,183
   
$
228,626
   
$
168,896
 
                         
Shares outstanding (no par value):
                               
Institutional Class
   
5,110,866
     
N/A
     
21,048,377
     
14,043,359
 
                         
Y Class
   
116
     
97
     
94
     
113
 
                         
Investor Class
   
11,284,456
     
11,248,072
     
260,864
     
5,051,927
 
                         
AMR Class
   
10,935,156
     
N/A
     
N/A
     
N/A
 
                         
Net asset value, offering and redemption price per share:
                               
Institutional Class
 
$
8.90
     
N/A
   
$
10.73
   
$
8.84
 
                         
Y Class
 
$
8.90
   
$
10.41
   
$
10.73
   
$
8.85
 
                         
Investor Class
 
$
8.90
   
$
10.42
   
$
10.71
   
$
8.85
 
                         
AMR Class
 
$
8.90
     
N/A
     
N/A
     
N/A
 
                         
                                 
A Cost of investments in securities
 
$
227,636
   
$
110,991
   
$
218,438
   
$
165,116
 
 
See accompanying notes
 
 
44
 
 
 
 

 

 
 
American Beacon Funds
Statements of Operations
Six Months Ended April 30, 2010 (in thousands) (Unaudited)
 
                                 
           
 
             
                           
   
 
High
   
 
Retirement
   
 
   
 
Short-
 
   
Yield
Bond Fund
   
Income and
Appreciation Funnd
   
 
Intermediate
Bond Fund
   
Term
Bond Fund
 
Investment Income:
                               
Dividend income
 
$
20
   
$
138
   
$
3
   
$
2
 
Interest income
   
12,605
     
2,113
     
4,616
     
2,176
 
                         
Total investment income
   
12,625
     
2,251
     
4,619
     
2,178
 
                         
                                 
Expenses:
                               
Management and investment advisory fees (Note 2)
   
506
     
184
     
219
     
162
 
Administrative service fees (Note 2):
                               
Institutional Class
   
71
     
     
54
     
31
 
Investor Class
   
147
     
168
     
4
     
59
 
AMR Class
   
29
     
     
     
 
Transfer agent fees:
                               
Institutional Class
   
1
     
     
9
     
7
 
Investor Class
   
4
     
4
     
     
2
 
AMR Class
   
6
     
     
     
 
Custody and fund accounting fees
   
26
     
11
     
22
     
18
 
Professional fees
   
15
     
17
     
21
     
25
 
Registration fees and expenses
   
18
     
9
     
18
     
14
 
Service fees (Note 2):
                               
Investor Class
   
122
     
205
     
3
     
50
 
Prospectus and shareholder reports
   
23
     
5
     
18
     
30
 
Trustee fees
   
9
     
5
     
12
     
7
 
Other expenses
   
11
     
5
     
11
     
12
 
                         
Total expenses
   
988
     
613
     
391
     
417
 
                         
Net (fees waived and expenses reimbursed)/recouped by Manager (Note 2)
   
     
     
(2
)
   
(53
)
                         
Net expenses
   
988
     
613
     
389
     
364
 
                         
Net investment income
   
11,637
     
1,638
     
4,230
     
1,814
 
                         
Realized and unrealized gain (loss) on investments:
                               
Net realized gain (loss) from:
                               
Investments
   
8,790
     
129
     
1,215
     
1,057
 
Change in net unrealized appreciation or depreciation of:
                               
Investments
   
5,761
     
1,741
     
(302
)
   
(232
)
                         
Net gain on investments
   
14,551
     
1,870
     
913
     
825
 
                         
Net increase in net assets resulting from operations
 
$
26,188
   
$
3,508
   
$
5,143
   
$
2,639
 
                         
 
See accompanying notes
 
 
45
 
 
 
 

 

 
American Beacon Funds
Statements of Changes in Net Assets (in thousands)
 
                                 
                   
Retirement Income and
 
   
High Yield Bond Fund
   
Appreciation Fund
 
   
Six Months
           
Six Months
       
   
Ended
   
Year Ended
   
Ended
   
Year Ended
 
   
April 30,
   
October 31,
   
April 30,
   
October
 
   
2010
   
2009
   
2010
   
31, 2009
 
   
(unaudited)
           
(unaudited)
         
Increase (Decrease) in Net Assets:
                               
Operations:
                               
Net investment income
 
$
11,637
   
$
19,821
   
$
1,638
   
$
3,433
 
                                 
Net realized gain (loss) on investments, futures contracts, and foreign currency transactions
   
8,790
     
(11,143
)
   
129
     
(242
)
                                 
Change in net unrealized appreciation or depreciation of investments, futures contracts, and foreign currency translations
   
5,761
     
61,933
     
1,741
     
14,228
 
                         
Net increase in net assets resulting from operations
   
26,188
     
70,611
     
3,508
     
17,419
 
                         
Distributions to Shareholders:
                               
Net investment income:
                               
Institutional Class
   
(2,128
)
   
(6,264
)
   
     
 
Investor Class
   
(4,227
)
   
(4,848
)
   
(1,810
)
   
(3,577
)
AMR Class
   
(5,279
)
   
(8,707
)
   
     
 
Return of Capital:
                               
Investor Class
   
     
     
     
(173
)
                         
Net distributions to shareholders
   
(11,634
)
   
(19,819
)
   
(1,810
)
   
(3,750
)
                         
Capital Share Transactions:
                               
Proceeds from sales of shares
   
214,805
     
297,510
     
25,669
     
24,626
 
Reinvestment of dividends and distributions
   
10,603
     
17,602
     
1,808
     
3,745
 
Cost of shares redeemed
   
(227,358
)
   
(255,402
)
   
(5,719
)
   
(48,782
)
Redemption fees
   
3
     
     
     
 
                         
Net increase (decrease) in net assets from capital share transactions
   
(1,947
)
   
59,710
     
21,758
     
(20,411
)
                         
Net increase (decrease) in net assets
   
12,607
     
110,502
     
23,456
     
(6,742
)
                         
Net Assets:
                               
Beginning of period
   
230,649
     
120,147
     
93,727
     
100,469
 
                         
End of Period *
 
$
243,256
   
$
230,649
   
$
117,183
   
$
93,727
 
                         
*Includes undistributed net investment income (loss) of
 
$
503
   
$
503
   
$
103
   
$
(117
)
                         
 
See accompanying notes
 
 
46
 
 
 

 
 

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,
 
   
2010
   
2009
   
2010
   
2009
 
   
(unaudited)
           
(unaudited)
         
Increase (Decrease) in Net Assets:
                               
Operations:
                               
Net investment income
 
$
4,230
   
$
8,798
   
$
1,814
   
$
5,710
 
Net realized gain on investments, futures contracts, and foreign currency transactions
   
1,215
     
1,112
     
1,057
     
5,301
 
Change in net unrealized appreciation or depreciation of investments, futures contracts, and foreign currency translations
   
(302
)
   
17,269
     
(232
)
   
2,645
 
                         
Net increase in net assets resulting from operations
   
5,143
     
27,179
     
2,639
     
13,656
 
                         
Distributions to Shareholders:
                               
Net investment income:
                               
Institutional Class
   
(4,187
)
   
(8,775
)
   
(1,870
)
   
(7,180
)
Investor Class
   
(43
)
   
(23
)
   
(552
)
   
(653
)
                         
Net distributions to shareholders
   
(4,230
)
   
(8,798
)
   
(2,422
)
   
(7,833
)
                         
Capital Share Transactions:
                               
Proceeds from sales of shares
   
27,710
     
154,268
     
50,794
     
92,994
 
Reinvestment of dividends and distributions
   
4,230
     
8,797
     
2,370
     
7,696
 
Cost of shares redeemed
   
(17,423
)
   
(115,884
)
   
(39,678
)
   
(214,778
)
                         
Net increase (decrease) in net assets from capital share transactions
   
14,517
     
47,181
     
13,486
     
(114,088
)
                         
Net increase (decrease) in net assets
   
15,430
     
65,562
     
13,703
     
(108,265
)
                         
Net Assets:
                               
Beginning of period
   
213,196
     
147,634
     
155,193
     
263,458
 
                         
End of Period *
 
$
228,626
   
$
213,196
   
$
168,896
   
$
155,193
 
                         
*Includes undistributed net investment income (loss) of
 
$
501
   
$
501
   
$
(554
)
 
$
(137
)
                         
 
See accompanying notes
 
 
47
 
 
 

 
 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (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 Retirement Income and Appreciation 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. Prior to December 30, 2009, the American Beacon Retirement Income and Appreciation Fund was known as the American Beacon Enhanced Income Fund. From December 30, 2009 to March 1, 2010, the American Beacon Retirement Income and Appreciati on Fund was known as the American Beacon Retirement Income Fund.
 
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
 
March 1, 2010 is the inception date of each Y Class of the Funds.
 
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 $250,000
     
Y Class
 
Investors making an initial investment of $100,000
     
Investor Class
 
General public and investors investing through an intermediary
     
AMR Class
 
Investors in the tax-exempt retirement and benefit plans of the Manager, 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.
 
 
48
 
 
 
 

 

 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (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”).
 
Valuation Inputs
 
Various inputs may be used to determine the value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
 
Level 1 — Quoted prices in active markets for identical securities.
 
Level 2 — Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
 
Level 3 — Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, 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, 2010 is as follows (in thousands):
 
                                 
High Yield Bond
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stocks
 
$
1,149
   
$
   
$
   
$
1,149
 
Preferred Stocks
   
402
     
     
     
402
 
Corporate Obligations
   
     
231,526
     
     
231,526
 
Convertible Obligations
   
     
1,106
     
     
1,106
 
Asset-Backed Securities
   
     
644
     
     
644
 
Short Term Investments
   
9,379
     
     
     
9,379
 
Total Investments in Securities
 
$
10,930
   
$
233,276
   
$
   
$
244,206
 
 

 
                                 
Retirement Income and Appreciation Fund
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Common Stocks
 
$
5,927
   
$
   
$
   
$
5,927
 
Convertible Preferred
   
962
     
280
     
     
1,242
 
Preferred Stock
   
1,278
     
     
     
1,278
 
Agencies
   
     
609
     
     
609
 
Corporate Obligations
   
     
43,573
     
     
43,573
 
Convertible Obligations
   
     
14,218
     
     
14,218
 
Municipal Securities
   
     
200
     
     
200
 
Non-Agency Mortgage Backed Obligations
   
     
2,571
     
     
2,571
 
Asset-Backed Obligations
   
     
6,305
     
     
6,305
 
U.S. Agency Mortgage Backed Obligations
   
     
14,944
     
     
14,944
 
U.S. Agency Obligations
   
     
1,565
     
     
1,565
 
U.S. Treasury Obligations
   
     
18,679
     
     
18,679
 
Short Term Investments
   
2,076
     
2,997
     
     
5,073
 
Total Investments in Securities
 
$
10,243
   
$
105,941
   
$
   
$
116,184
 
 

 
                                 
Intermediate Bond Fund
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Agencies
 
$
   
$
880
   
$
   
$
880
 
Corporate Obligations
   
     
99,246
     
     
99,246
 
Municipal Securities
   
     
251
     
     
251
 
Non-Agency Mortgage Backed Obligations
   
     
8,756
     
     
8,756
 
Asset-Backed Securities
   
     
9,991
     
     
9,991
 
U.S. Agency Mortgage Backed Obligations
   
     
49,131
     
     
49,131
 
U.S. Agency Obligations
   
     
1,170
     
     
1,170
 
U.S. Treasury Obligations
   
     
50,589
     
     
50,589
 
Short Term Investments
   
4,646
     
1,998
     
     
6,644
 
Total Investments in Securities
 
$
4,646
   
$
222,012
   
$
   
$
226,658
 
 
49
 
 
 
 

 

 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
                                 
Short-Term Bond Fund
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Corporate Obligations
 
$
   
$
88,645
   
$
   
$
88,645
 
Municipal Securities
   
     
351
     
     
351
 
Non-Agency Mortgage Backed Obligations
   
     
3,173
     
     
3,173
 
Asset-Backed Securities
   
     
41,202
     
     
41,202
 
U.S. Agency Mortgage Backed Obligations
   
     
8,704
     
     
8,704
 
U.S. Agency Obligations
   
     
10,244
     
     
10,244
 
U.S. Treasury Obligations
   
     
15,075
     
     
15,075
 
Short Term Investments
   
584
     
     
     
584
 
Total Investments in Securities
 
$
584
   
$
167,394
   
$
   
$
167,978
 
 
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. 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.
 
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
 
 
50
 
 
 
 

 

 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
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 investment advisory and portfolio management services. Investment assets of the High Yield Bond, Retirement Income and Appreciation, 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 Retirement Income and Appreciation 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 a verage 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 Retirement Income and Appreciation 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, 2010 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%-0.45
%
 
$
506
   
$
441
   
$
65
 
Retirement Income and Appreciation
   
0.20%-0.80
%
   
184
     
156
     
28
 
Intermediate Bond
   
0.20
%
   
219
     
91
     
128
 
 
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, Y, 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.
 
Service Plans
 
The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y and Investor Classes. As compensation for performing the duties required under
 
 
51
 
 
 
 

 

 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
the Service Plans, the Manager receives 0.10% of the average daily net assets of the Y Class of each Fund and up to 0.375% of the average daily net assets of the Investor Class of each Fund.
 
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”). 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, 2010, there were no investments in the Select Funds.
 
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, 2010, the High Yield Bond Fund borrowed from both the MM Select Fund and the USG Select Fund on average $6,751,271, for 8 days at 0.77% with interest charges of $1,133.
 
Reimbursement of Expenses
 
Since March 1, 2010, the Manager contractually agreed to reimburse the Investor Class of the Intermediate and Short-Term Bond Funds for operating expenses and voluntarily agreed to reimburse expense of the Y Class of the Intermediate and Short-Term Bond Funds. During the period ended April 30, 2010, the Manager reimbursed fees for the Intermediate Bond Investor and Y Classes of $1,687 and $0.45, respectively. The Manager reimbursed fees for the Short-Term Bond Investor and Y Classes of $52,814 and $0.40, respectively.
 
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, 2010, 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 do not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2009 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
 
 
52
 
 

 
 

 
 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
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, 2010 and fiscal year ended October 31, 2009 were as follows (in thousands):
 
                                 
                   
Retirement Income and
 
   
High Yield Bond
   
Appreciation
 
   
 
Six Months
   
Year Ended
   
 
Six Months
   
Year Ended
 
   
Ended
April 30,
   
October 31,
   
Ended
April 30,
   
October 31,
 
   
2010
   
2009
   
2010
   
2009
 
   
(Unaudited)
           
(Unaudited)
         
Distributions paid from:
                               
Ordinary income*
                               
Institutional Class
 
$
2,128
   
$
6,264
   
$
   
$
 
Investor Class
   
4,227
     
4,848
     
1,810
     
3,577
 
AMR Class
   
5,279
     
8,707
     
     
 
Long-term capital gain
                   
         
Institutional Class
   
     
     
     
 
Investor Class
   
     
     
     
173
 
AMR Class
   
     
     
     
 
Total distributions paid
 
$
11,634
   
$
19,819
   
$
1,810
   
$
3,750
 
 

 
                                 
   
Intermediate Bond
   
Short-Term Bond
 
   
 
Six Months
   
Year Ended
   
 
Six Months
   
Year Ended
 
   
Ended
April 30,
   
October 31,
   
Ended
April 30,
   
October 31,
 
   
2010
   
2009
   
2010
   
2009
 
   
(Unaudited)
           
(Unaudited)
         
Distributions paid from:
                               
Ordinary income*
                               
Institutional Class
 
$
4,187
   
$
8,775
   
$
1,870
   
$
7,180
 
Investor Class
   
43
     
23
     
552
     
653
 
AMR Class
   
     
     
     
 
Long-term capital gain
   
             
         
Institutional Class
   
     
     
     
 
Investor Class
   
     
     
     
 
AMR Class
   
     
     
     
 
Total distributions paid
 
$
4,230
   
$
8,798
   
$
2,422
   
$
7,833
 
 

 
     
*
 
For tax purposes, short-term capital gains are considered ordinary income distributions.
 
As of April 30, 2010, the components of distributable earnings on a tax basis were as follows (in thousands):
 
                                 
           
 
             
   
High Yield
   
Retirement
Income and
   
 
Intermediate
   
Short-Term
 
   
Bond
   
Appreciation
   
Bond
   
Bond
 
Cost basis of investments for federal income tax purpose
 
$
229,359
   
$
111,094
   
$
218,456
   
$
166,207
 
                                 
Unrealized appreciation
   
19,089
     
5,841
     
8,606
     
2,348
 
Unrealized depreciation
   
(4,242
)
   
(751
)
   
(404
)
   
(613
)
                         
Net unrealized appreciation (depreciation)
   
14,847
     
5,090
     
8,202
     
1,771
 
                                 
Undistributed ordinary income
   
329
     
     
503
     
537
 
Undistributed long-term gain (loss)
   
(17,248
)
   
(2,232
)
   
597
     
(7,564
)
Other temporary differences
   
174
     
     
(1
)
   
 
                         
Distributable earnings (losses)
 
$
(1,898
)
 
$
2,858
   
$
9,301
   
$
(5,256
)
 
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
 
 
53
 
 
 
 

 

 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
 
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, 2010 (in thousands):
 
                                 
           
Retirement
       
   
High Yield
 
Income and
 
Intermediate
 
Short-Term
   
Bond
 
Appreciation
 
Bond
 
Bond
Paid-in-capital
 
$
1
   
$
(350
)
 
$
1
   
$
(1
)
Undistributed net investment income
   
(3
)
   
392
     
     
191
 
Accumulated net realized gain (loss)
   
3
     
164
     
(1
)
   
(191
)
Unrealized appreciation (depreciation) of investments and futures contracts
   
(1
)
   
(206
)
   
     
1
 
 
At April 30, 2010 capital loss carry forward positions for federal income tax purposes were as follows (in thousands):
 
                                         
Fund
 
2014
 
2015
 
2016
 
2017
 
Total
High Yield Bond
   
     
     
8,321
     
8,926
     
17,247
 
Retirement Income and Appreciation
   
     
     
1,768
     
465
     
2,233
 
Short-Term Bond
   
1,899
     
467
     
5,198
     
     
7,564
 
 
The High Yield Bond, Retirement Income and Appreciation, Intermediate and Short-Term Bond Funds utilized $7,783, $290, $626 and $866, respectively of net capital loss carryovers for the six months ended April 30, 2010.
 
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, 2010 were as follows (in thousands):
 
                                 
           
Retirement
         
Short-
   
High Yield
 
Income and
 
Intermediate
 
Term
   
Bond
 
Appreciation
 
Bond
 
Bond
Purchases (excluding U.S. government securities)
 
$
254,171
   
$
53,872
   
$
113,553
   
$
81,428
 
Sales and maturities (excluding U.S. government securities)
   
260,191
     
33,454
     
85,540
     
61,206
 
Purchases of U.S. government securities
   
     
23,241
     
67,943
     
14,901
 
Sales and maturities of U.S. government securities
   
     
11,798
     
42,037
     
 
 
54
 
 

 
 

 
 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
5. 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, 2010
 
                                                                 
   
Institutional Class
   
Y Class
   
Investor Class
   
AMR Class
 
High Yield Bond Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
478
   
$
4,117
     
   
$
1
     
9,224
   
$
79,713
     
15,331
   
$
130,974
 
Reinvestment of dividends
   
134
     
1,164
     
     
     
479
     
4,160
     
609
     
5,279
 
Shares redeemed
   
(1,113
)
   
(9,689
)*
   
     
*
   
(9,189
)
   
(78,914
)*
   
(16,009
)
   
(138,752
)*
                                                 
Net increase (decrease) in shares outstanding
   
(501
)
 
$
(4,408
)
   
   
$
1
     
514
   
$
4,959
     
(69
)
 
$
(2,499
)
                                                 
 
 
     
*
 
Net of Redemption Fees
 
 
                                 
   
Y Class
   
Investor Class
 
Retirement Income and Appreciation Fund
 
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
   
$
1
     
2,485
   
$
25,668
 
Reinvestment of dividends
   
     
     
175
     
1,808
 
Shares redeemed
   
     
     
(555
)
   
(5,719
)
                         
Net increase in shares outstanding.
   
   
$
1
     
2,105
   
$
21,757
 
                         
 
 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
Intermediate Bond Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
2,527
   
$
26,977
     
   
$
1
     
69
   
$
732
 
Reinvestment of dividends
   
392
     
4,187
     
     
     
4
     
43
 
Shares redeemed
   
(1,615
)
   
(17,221
)
   
     
     
(19
)
   
(202
)
                                     
Net increase in shares outstanding
   
1,304
   
$
13,943
     
   
$
1
     
54
   
$
573
 
                                     
 
 
                                                 
   
Institutional Class
   
Y Class
   
Investor Class
 
Short-Term Bond Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
1,404
   
$
12,411
     
   
$
1
     
4,339
   
$
38,382
 
Reinvestment of dividends
   
212
     
1,868
     
     
     
57
     
502
 
Shares redeemed
   
(1,705
)
   
(15,063
)
   
     
     
(2,784
)
   
(24,615
)
                                     
Net increase (decrease) in shares outstanding
   
(89
)
 
$
(784
)
   
   
$
1
     
1,612
   
$
14,269
 
                                     
 
Period Ended October 31, 2009
 
                                                 
   
Institutional Class
   
Investor Class
   
AMR Class
 
High Yield Bond Fund
 
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
4,158
   
$
27,998
     
16,984
   
$
119,477
     
20,142
   
$
150,035
 
Reinvestment of dividends
   
601
     
4,158
     
626
     
4,738
     
1,177
     
8,706
 
Shares redeemed
   
(8,324
)
   
(58,240
)
   
(8,898
)
   
(65,269
)
   
(16,820
)
   
(131,893
)
                                     
Net increase (decrease) in shares outstanding
   
(3,565
)
 
$
(26,084
)
   
8,712
   
$
58,946
     
4,499
   
$
26,848
 
                                     
 
55
 
 

 
 

 
 
 
American Beacon Funds
Notes to Financial Statements
April 30, 2010 (Unaudited)
 
                 
   
Investor Class
 
Retirement Income and Appreciation Fund
 
Shares
   
Amount
 
Shares sold
   
2,591
   
$
24,626
 
Reinvestment of dividends
   
393
     
3,745
 
Shares redeemed
   
(5,256
)
   
(48,782
)
             
Net (decrease) in shares outstanding
   
(2,272
)
 
$
(20,411
)
             
 
 
                                 
   
Institutional Class
   
Investor Class
 
Intermediate Bond Fund
 
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
14,857
   
$
152,046
     
213
   
$
2,222
 
Reinvestment of dividends
   
850
     
8,774
     
2
     
23
 
Shares redeemed
   
(11,318
)
   
(115,800
)
   
(8
)
   
(84
)
                         
Net increase in shares outstanding
   
4,389
   
$
45,020
     
207
   
$
2,161
 
                         
 
 
                                 
   
Institutional Class
   
Investor Class
 
Short-Term Bond Fund
 
Shares
   
Amount
   
Shares
   
Amount
 
Shares sold
   
4,547
   
$
39,495
     
6,121
   
$
53,499
 
Reinvestment of dividends
   
827
     
7,178
     
59
     
518
 
Shares redeemed
   
(21,058
)
   
(182,876
)
   
(3,640
)
   
(31,902
)
                         
Net increase (decrease) in shares outstanding
   
(15,684
)
 
$
(136,203
)
   
2,540
   
$
22,115
 
                         
 
6. Subsequent Events
 
Management has evaluated the possibility of subsequent events existing in the Funds’ financial statements. Management has determined that there are no material events that would require disclosure in the Funds’ financial statements.
 
 
56
 
 

 
 

 
 
 
 
 
 
This page intentionally left blank.
 
 
57
 
 
 
 

 

 
 
American Beacon High Yield Bond Fund
Financial Highlights
(For a share outstanding throughout the period)
 
                                                         
   
Institutional Class
   
Y Class
 
   
Six
                                               
   
Months
                                               
   
Ended
                                           
March 1
 
   
April 30,
   
Year Ended October 31,
   
to April
 
   
2010
   
2009
   
2008A
   
2007
   
2006B
   
2005
   
30, 2010
 
   
(unaudited)
                                 
(unaudited)
 
Net asset value, beginning of period
 
$
8.42
   
$
6.77
   
$
10.11
   
$
10.20
   
$
10.22
   
$
10.86
   
$
8.63
 
                                           
Income from investment operations:
                                                       
Net investment income
   
0.39
     
0.79
     
0.78
     
0.77
     
0.88
     
0.76
     
0.13
 
Net gains (losses) on securities (both realized and unrealized)
   
0.47
     
1.66
     
(3.34
)
   
(0.09
)
   
0.09
     
(0.84
)
   
0.27
 
                                           
Total income (loss) from investment operations
   
0.86
     
2.45
     
(2.56
)
   
0.68
     
0.97
     
(0.08
)
   
0.40
 
                                           
Less distributions:
                                                       
Dividends from net investment income
   
(0.38
)
   
(0.80
)
   
(0.78
)
   
(0.77
)
   
(0.88
)
   
(0.76
)
   
(0.13
)
Distributions from net realized gains on securities
   
     
     
     
     
(0.11
)
   
0.20
     
 
                                           
Total distributions
   
(0.38
)
   
(0.80
)
   
(0.78
)
   
(0.77
)
   
(0.99
)
   
(0.56
)
   
(0.13
)
                                           
Net asset value, end of period
 
$
8.90
   
$
8.42
   
$
6.77
   
$
10.11
   
$
10.20
   
$
10.22
   
$
8.90
 
                                           
Total return
   
10.48
%C
   
39.06
%
   
(27.03
)%
   
6.85
%
   
8.78
%
   
3.03
%
   
4.66
%C
                                           
Ratios and supplemental data:
                                                       
Net assets, end of period (in thousands)
 
$
45,473
   
$
47,254
   
$
62,138
   
$
114,911
   
$
231,693
   
$
216,744
   
$
1
 
Ratios to average net assets (annualized):
                                                       
Expenses, net of waivers
   
0.77
%
   
0.79
%
   
0.85
%
   
0.85
%
   
0.85
%
   
0.84
%
   
0.89
%D
Expenses, before waivers
   
0.77
%
   
0.79
%
   
0.85
%
   
0.86
%
   
0.85
%
   
0.84
%
   
0.89
%D
Net investment income, net of waivers
   
8.96
%
   
11.46
%
   
8.38
%
   
7.55
%
   
7.55
%
   
7.24
%
   
8.95
%D
Net investment income, before waivers
   
8.96
%
   
11.46
%
   
8.38
%
   
7.54
%
   
7.55
%
   
7.24
%
   
8.95
%D
Portfolio turnover rate
   
103
%C
   
212
%
   
157
%
   
92
%
   
88
%
   
128
%
   
103
%C,E
 
 
     
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, 2009 through April 30, 2010.
     
F
 
Portfolio turnover rate is for the period from November 1, 2006 through October 31, 2007.
 
58
 
 

 
 

 
 
 
 
 
                                                                                 
   
Investor Class
   
AMR Class
 
   
Six
                                           
Six
                       
   
Months
                                           
Months
                   
September
 
   
Ended
                                           
Ended
   
 
   
4 to
 
   
April 30,
   
Year Ended October 31,
   
April 30,
   
Year Ended October 31,
   
October
 
   
2010
   
2009
   
2008A
   
2007
   
2006B
   
2005
   
2010
   
2009
   
2008A
   
31, 2007
 
   
(unaudited)
                                 
(unaudited)
                   
   
$
8.42
   
$
6.77
   
$
10.11
   
$
10.21
   
$
10.22
   
$
10.87
   
$
8.42
   
$
6.77
   
$
10.11
   
$
9.94
 
                                                             
                                                                                 
     
0.37
     
0.78
     
0.75
     
0.75
     
0.85
     
0.74
     
0.40
     
0.81
     
0.80
     
0.12
 
 
 
   
0.48
     
1.65
     
(3.34
)
   
(0.10
)
   
0.10
     
(0.85
)
   
0.48
     
1.65
     
(3.34
)
   
0.17
 
                                                             
 
 
   
0.85
     
2.43
     
(2.59
)
   
0.65
     
0.95
     
(0.11
)
   
0.88
     
2.46
     
(2.54
)
   
0.29
 
                                                             
                                                                                 
 
 
   
(0.37
)
   
(0.78
)
   
(0.75
)
   
(0.75
)
   
(0.85
)
   
(0.74
)
   
(0.40
)
   
(0.81
)
   
(0.80
)
   
(0.12
)
 
 
   
     
     
     
     
(0.11
)
   
0.20
     
     
     
     
 
                                                             
     
(0.37
)
   
(0.78
)
   
(0.75
)
   
(0.75
)
   
(0.96
)
   
(0.54
)
   
(0.40
)
   
(0.81
)
   
(0.80
)
   
(0.12
)
                                                             
   
$
8.90
   
$
8.42
   
$
6.77
   
$
10.11
   
$
10.21
   
$
10.22
   
$
8.90
   
$
8.42
   
$
6.77
   
$
10.11
 
                                                             
     
10.34
%C
   
38.70
%
   
(27.24
)%
   
6.52
%
   
8.63
%
   
2.69
%
   
10.61
%C
   
39.41
%
   
(26.84
)%
   
2.94
%C
                                                             
                                                                                 
 
 
 
$
100,465
   
$
90,736
   
$
13,949
   
$
28,758
   
$
80,284
   
$
120,360
   
$
97,317
   
$
92,659
   
$
44,060
   
$
82,322
 
 
 
                                                                               
     
1.03
%
   
1.01
%
   
1.10
%
   
1.08
%
   
1.08
%
   
1.08
%
   
0.53
%
   
0.53
%
   
0.58
%
   
0.61
%D
     
1.03
%
   
1.01
%
   
1.10
%
   
1.08
%
   
1.08
%
   
1.08
%
   
0.53
%
   
0.53
%
   
0.58
%
   
0.61
%D
 
 
   
8.68
%
   
9.36
%
   
8.06
%
   
7.32
%
   
7.33
%
   
7.00
%
   
9.13
%
   
10.34
%
   
8.64
%
   
7.54
%D
 
 
   
8.68
%
   
9.36
%
   
8.06
%
   
7.32
%
   
7.33
%
   
7.00
%
   
9.13
%
   
10.34
%
   
8.64
%
   
7.54
%D
     
103
%C
   
212
%
   
157
%
   
92
%
   
88
%
   
128
%
   
103
%C
   
212
%
   
157
%
   
92
%F
 
59
 
 

 
 

 
 
 
American Beacon Retirement Income and Appreciation Fund
Financial Highlights
(For a share outstanding throughout the period)
 
                                                         
   
Y Class
   
Investor Class
 
         
Six
       
         
Months
       
   
March 1
   
Ended
       
   
to April
   
April 30,
   
Year Ended October 31,
 
   
30, 2010
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
   
(unaudited)
   
(unaudited)
                               
Net asset value, beginning of period
 
$
10.31
   
$
10.25
   
$
8.80
   
$
10.50
   
$
10.25
   
$
9.98
   
$
10.16
 
                                           
Income from investment operations:
                                                       
Net investment income
   
0.05
     
0.21
     
0.32
     
0.41
     
0.36
     
0.33
     
0.29
 
Net gains (losses) on securities (both realized and unrealized)
   
0.10
     
0.13
     
1.53
     
(1.39
)
   
0.32
     
0.29
     
(0.16
)
                                           
Total income (loss) from investment operations
   
0.15
     
0.34
     
1.85
     
(0.98
)
   
0.68
     
0.62
     
0.13
 
                                           
Less distributions:
                                                       
Dividends from net investment income
   
(0.05
)
   
(0.17
)
   
(0.40
)
   
(0.49
)
   
(0.42
)
   
(0.35
)
   
(0.31
)
Distributions from net realized gains on securities
   
     
     
     
(0.23
)
   
(0.01
)
   
     
 
Return of capital
   
     
     
0.00
D
   
     
     
     
 
                                           
Total distributions
   
(0.05
)
   
(0.17
)
   
(0.40
)
   
(0.72
)
   
(0.43
)
   
(0.35
)
   
(0.31
)
                                           
Net asset value, end of period
 
$
10.41
   
$
10.42
   
$
10.25
   
$
8.80
   
$
10.50
   
$
10.25
   
$
9.98
 
                                           
Total return
   
1.48
%A
   
3.30
%A
   
21.50
%
   
(10.02
)%
   
6.75
%
   
6.36
%
   
1.32
%
                                           
Ratios and supplemental data:
                                                       
Net assets, end of period (in thousands)
 
$
1
   
$
117,182
   
$
93,727
   
$
100,469
   
$
99,789
   
$
125,915
   
$
112,341
 
Ratios to average net assets (annualized):
                                                       
Expenses
   
0.67
%B
   
1.09
%
   
1.01
%
   
0.92
%
   
0.94
%
   
0.93
%
   
0.92
%
Expenses, before waivers
   
0.67
%B
   
1.09
%
   
1.01
%
   
0.92
%
   
0.94
%
   
0.93
%
   
0.92
%
Net investment income
   
3.12
%B
   
2.92
%
   
3.86
%
   
3.64
%
   
3.69
%
   
3.21
%
   
2.79
%
Net investment income, before waivers
   
3.12
%B
   
2.92
%
   
3.86
%
   
3.64
%
   
3.69
%
   
3.21
%
   
2.79
%
Portfolio turnover rate
   
32
%A,C
   
32
%A
   
53
%
   
76
%
   
103
%
   
65
%
   
41
%
 
 
     
A
 
Not annualized.
     
B
 
Annualized.
     
C
 
Portfolio turnover rate is for the period from November 1, 2009 through April 30, 2010.
     
D
 
The tax return of capital is calculated based upon outstanding shares at the time of distribution. Amounts are less than $0.01 per share.
 
60
 
 

 
 

 
 
 
American Beacon Intermediate Bond Fund
Financial Highlights
(For a share outstanding throughout the period)
 
                                                                         
   
Institutional Class (formerly AMR Class prior to 3/1/05)
   
Y Class
   
Investor Class
 
   
 
                                                 
 
       
   
Six
Months
                                                 
Six
Months
   
 
March 2
 
   
Ended
                                           
March 1
   
Ended
   
to
 
   
April 30,
   
Year Ended October 31,
   
to April
   
April 30,
   
October
 
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005A
   
30, 2010
   
2010
   
31, 2009
 
   
(unaudited)
                                 
(unaudited)
   
(unaudited)
       
Net asset value, beginning of period
 
$
10.69
   
$
9.61
   
$
10.10
   
$
10.02
   
$
10.01
   
$
10.33
   
$
10.69
   
$
10.68
   
$
10.14
 
                                                       
Income from investment operations:
                                                                       
Net investment income
   
0.21
     
0.46
     
0.50
     
0.50
     
0.46
     
0.42
     
0.06
     
0.18
     
0.27
 
Net gains (losses) on securities (both realized and unrealized)
   
0.03
     
1.07
     
(0.51
)
   
0.07
     
0.02
     
(0.29
)
   
0.04
     
0.03
     
0.54
 
                                                       
Total income (loss) from investment operations
   
0.24
     
1.53
     
(0.01
)
   
0.57
     
0.48
     
0.13
     
0.10
     
0.21
     
0.81
 
                                                       
Less distributions:
                                                                       
Dividends from net investment income
   
(0.20
)
   
(0.45
)
   
(0.48
)
   
(0.49
)
   
(0.47
)
   
(0.45
)
   
(0.06
)
   
(0.18
)
   
(0.27
)
Distributions from net realized gains on securities
   
             
     
     
     
     
     
         
                                                       
Total distributions
   
(0.20
)
   
(0.45
)
   
(0.48
)
   
(0.49
)
   
(0.47
)
   
(0.45
)
   
(0.06
)
   
(0.18
)
   
(0.27
)
                                                       
Net asset value, end of period
 
$
10.73
   
$
10.69
   
$
9.61
   
$
10.10
   
$
10.02
   
$
10.01
   
$
10.73
   
$
10.71
   
$
10.68
 
                                                       
Total return
   
2.31
%B
   
16.17
%
   
(0.26
)%
   
5.83
%
   
4.96
%
   
1.26
%
   
0.97
%B
   
2.03
%B
   
8.05
%B
                                                       
                                                                         
                                                                       
Ratios and supplemental data:
                                                                       
Net assets, end of period (in thousands)
 
$
225,830
   
$
210,983
   
$
147,634
   
$
109,674
   
$
97,319
   
$
93,270
   
$
1
   
$
2,795
   
$
2,213
 
                                                                         
Ratios to average net assets (annualized):
                                                                       
Expenses, net of waivers
   
0.35
%
   
0.32
%
   
0.30
%
   
0.34
%
   
0.35
%
   
0.31
%
   
0.44
%C
   
0.72
%
   
0.81
%C
Expenses, before waivers
   
0.35
%
   
0.32
%
   
0.30
%
   
0.34
%
   
0.35
%
   
0.31
%
   
0.71
%C
   
0.85
%
   
1.22
%C
Net investment income, net of waivers
   
3.86
%
   
4.32
%
   
4.70
%
   
4.86
%
   
4.64
%
   
4.12
%
   
3.57
%C
   
3.48
%
   
3.74
%C
Net investment income, before waivers
   
3.86
%
   
4.31
%
   
4.70
%
   
4.86
%
   
4.64
%
   
4.12
%
   
3.30
%C
   
3.34
%
   
3.33
%C
Portfolio turnover rate
   
41
%B
   
157
%
   
105
%
   
85
%
   
122
%
   
119
%
   
41
%B,D
   
41
%B
   
157
%E
 
 
     
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
 
Annualized.
     
D
 
Portfolio turnover rate is for the period from November 1, 2009 through April 30, 2010.
     
E
 
Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.
 
61
 
 

 
 

 
 
 
American Beacon Short-Term Bond Fund
Financial Highlights
(For a share outstanding throughout the period)
 
                                                 
   
Institutional Class
 
   
Six
       
   
Months
       
   
Ended
       
   
April 30,
   
Year Ended October 31,
 
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005A
 
   
(unaudited)
                               
Net asset value, beginning of period
 
$
8.83
   
$
8.58
   
$
8.79
   
$
8.74
   
$
8.75
   
$
9.07
 
                                     
Income from investment operations:
                                               
Net investment income
   
0.10
     
0.22
B
   
0.35
B
   
0.39
B
   
0.32
B
   
0.29
 
                                                 
Net gains (losses) on securities (both realized and unrealized)
   
0.04
     
0.33
     
(0.15
)
   
0.09
     
0.07
     
(0.20
)
                                     
Total income from investment operations
   
0.14
     
0.55
     
0.20
     
0.48
     
0.39
     
0.09
 
                                     
Less distributions:
                                               
Dividends from net investment income
   
(0.13
)
   
(0.30
)
   
(0.41
)
   
(0.43
)
   
(0.40
)
   
(0.41
)
Distributions from net realized gains on securities
   
     
     
     
     
     
 
                                     
Total distributions
   
(0.13
)
   
(0.30
)
   
(0.41
)
   
(0.43
)
   
(0.40
)
   
(0.41
)
                                     
Net asset value, end of period
 
$
8.84
   
$
8.83
   
$
8.58
   
$
8.79
   
$
8.74
   
$
8.75
 
                                     
Total return
   
1.63
%C
   
6.56
%
   
2.21
%
   
5.61
%
   
4.56
%
   
1.00
%
                                     
Ratios and supplemental data:
                                               
Net assets, end of period (in thousands)
 
$
124,186
   
$
124,791
   
$
255,725
   
$
89,427
   
$
73,417
   
$
79,683
 
Ratios to average net assets (annualized):
                                               
Expenses, net of waivers
   
0.39
%
   
0.33
%
   
0.31
%
   
0.37
%
   
0.35
%
   
0.33
%
Expenses, before waivers
   
0.39
%
   
0.33
%
   
0.31
%
   
0.37
%
   
0.35
%
   
0.33
%
Net investment income, net of waivers
   
2.30
%
   
2.62
%
   
3.75
%
   
4.48
%
   
3.64
%
   
3.15
%
Net investment income, before waivers
   
2.30
%
   
2.61
%
   
3.75
%
   
4.48
%
   
3.64
%
   
3.15
%
Portfolio turnover rate
   
39
%C
   
140
%
   
21
%
   
40
%
   
48
%
   
38
%
 
 
     
A
 
On March 1, 2005, the existing Institutional Class shares were terminated and exchanged for AMR Class shares at a conversion rate of 1.0014. Following this exchange, the former AMR Class Shares were re-named Institutional Class.
     
B
 
For purposes of this calculation, the change in undistributed net investment income per share was derived by dividing the change in undistributed net investment income by average shares outstanding for the period.
     
C
 
Not annualized.
     
D
 
Annualized.
     
E
 
Portfolio turnover rate is for the period from November 1, 2009 through April 30, 2010.
 
62
 
 

 
 

 
 
 
 
                                                         
   
Y Class
   
Investor Class
 
         
Six
       
         
Months
       
   
March 1
   
Ended
       
   
to April
   
April 30,
   
Year Ended October 31,
 
   
30, 2010
   
2010
   
2009
   
2008
   
2007
   
2006
   
2005
 
   
(unaudited)
   
(unaudited)
                               
   
$
8.84
   
$
8.84
   
$
8.59
   
$
8.81
   
$
8.76
   
$
8.77
   
$
9.09
 
                                           
                                                         
     
0.04
     
0.09
B
   
0.20
B
   
0.29
B
   
0.35
B
   
0.27
B
   
0.28
 
                                                         
 
 
   
0.01
     
0.04
     
0.34
     
(0.15
)
   
0.09
     
0.07
     
(0.24
)
                                           
     
0.05
     
0.13
     
0.54
     
0.14
     
0.44
     
0.34
     
0.04
 
                                           
                                                         
     
(0.04
)
   
(0.12
)
   
(0.29
)
   
(0.36
)
   
(0.39
)
   
(0.35
)
   
(0.36
)
                                                         
     
     
     
     
     
     
     
 
                                           
     
(0.04
)
   
(0.12
)
   
(0.29
)
   
(0.36
)
   
(0.39
)
   
(0.35
)
   
(0.36
)
                                           
   
$
8.85
   
$
8.85
   
$
8.84
   
$
8.59
   
$
8.81
   
$
8.76
   
$
8.77
 
                                           
     
0.59
%C
   
1.53
%C
   
6.34
%
   
1.54
%
   
5.08
%
   
4.01
%
   
0.46
%
                                           
                                                         
   
$
1
   
$
44,709
   
$
30,402
   
$
7,733
   
$
2,976
   
$
7,189
   
$
8,582
 
                                                         
     
0.42
%D
   
0.62
%
   
0.54
%
   
0.85
%
   
0.87
%
   
0.88
%
   
0.87
%
     
0.66
%D
   
0.88
%
   
0.85
%
   
0.88
%
   
0.98
%
   
0.90
%
   
0.94
%
     
2.82
%D
   
2.03
%
   
2.20
%
   
3.19
%
   
3.91
%
   
3.10
%
   
2.59
%
     
2.58
%D
   
1.76
%
   
1.89
%
   
3.16
%
   
3.81
%
   
3.08
%
   
2.52
%
     
39
%C,E
   
39
%C
   
140
%
   
21
%
   
40
%
   
48
%
   
38
%
 
63
 
 
 
 

 
 
 
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64
 
 

 
 
 

 
 
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65
 
 
 
 

 

 
 
 
 
Delivery of Documents
 
 
To reduce expenses, your financial institution may mail only one copy of the Prospectus, Annual Report and Semi-Annual Report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your financial institution. Delivery of individual copies will commence thirty days after receiving your request.
 
 
If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, by e-mail. If you are interested in this option, please go to www.icsdelivery.com and search for your financial institution’s name or contact your financial institution directly.
 
 
To obtain more information about the Fund:
 
     
     
 
By E-mail:
 
On the Internet:
american_beacon.funds@ambeacon.com
 
Visit our website at www.americanbeaconfunds.com
     
 
By Telephone:
 
By Mail:
Institutional Class
 
American Beacon Funds
Call (800) 658-5811
 
P.O. Box 219643
AMR ClassSM
 
Kansas City, MO 64121-9643
Call (800) 345-2345
   
Investor Class® Class
   
Call (800) 388-3344
   
 

 
     
     
Availability of Quarterly Portfolio Schedules
 
Availability of Proxy Voting Policy and Records
     
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference 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.
 
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 Retirement Income and Appreciation Fund, American Beacon Intermediate Bond and American Beacon Short-Term Bond Fund are service marks of American Beacon Advisors, Inc.
 
 
SAR 04/10
 
 
00074811
 
 

 
 
 

 
ITEM 2. CODE OF ETHICS.
 
The Trust amended the code of ethics by updating the names of the principal executive and financial officers.  The Trust did not 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) Filed herewith as EX-99.CODE ETH.
 

     (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
 
 
Gene L. Needles, Jr.
 
President
 
American Beacon Funds
 
Date: July 8, 2010
 
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.
 
 
Gene L. Needles, Jr.
 
President
 
American Beacon Funds
 
Date: July 8, 2010
 
 
Melinda G. Heika
 
Treasurer
 
American Beacon Funds
 
Date: July 8, 2010
 
 
 
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EX-99.CODE ETH 18 exhibit99code.htm exhibit99code.htm

AMERICAN BEACON FUNDS
AMERICAN BEACON MILEAGE FUNDS
AMERICAN BEACON SELECT FUNDS
AMERICAN BEACON MASTER TRUST

Code of Ethics for Principal Executive and Financial Officers

Dated: February 16, 2010

Purpose
The American Beacon Funds, the American Beacon Mileage Funds, the American Beacon Select Funds, and the American Beacon Master Trust (collectively, the “Trusts”) have adopted this Code of Ethics for Principal Executive and Financial Officers (the “Code”), which applies to the Trusts’ Principal Executive Officer and Principal Financial Officer (the “Covered Officers” as set forth in Exhibit A), for the purpose of promoting:
 
·  
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
·  
full, fair, accurate, timely, and understandable disclosure in reports and documents that a Trust files with, or submits to, the Securities and Exchange Commission (the “SEC”) and in other public communications made by the registrant;
·  
compliance with applicable governmental laws, rules, and regulations;
·  
the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and
·  
accountability for adherence to the Code.
 
Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

Conflicts of Interest
For purposes of this Code, a “conflict of interest” occurs when a Covered Officer’s “personal interests” interfere with the interests of, or his/her service to, the Trusts.  For example, a conflict of interest would arise if a Covered Officer, or a member of his/her family, receives improper personal benefits as a result of his/her position with the Trusts.

Certain conflicts of interest arise out of the relationship between Covered Officers and the Trusts and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (“Investment Company Act”) and the Investment Advisers Act of 1940 (“Investment Advisers Act”).  For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Trusts because of their status as “affiliated persons” of the Trusts.

Conflicts also may arise from a Covered Officer’s position or employment at American Beacon Advisors, Inc. (“AmBeacon”), the Trusts’ manager, and his/her position with each Trust.  This Code recognizes that the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on AmBeacon and the Trusts.  The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Trusts and AmBeacon and is consistent with
 
 
 
 

 
 
the performance by the Covered Officers of their duties as officers of the Trusts.  Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act.  The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive.  The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Trusts.

Each Covered Officer should not:
 
·  
use his/her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Trusts whereby the Covered Officer would benefit personally to the detriment of the Trusts; or
·  
cause the Trusts to take action, or fail to take action, for the personal benefit of the Covered Officer rather than the benefit of the Trusts.

At times, certain situations may arise that may, or may not, be considered conflicts of interest under this Code.  Covered Officers are encouraged to discuss such situations with the Trusts' Chief Legal Officer ("CLO”).  Examples of these types of situations include:
 
·  
service as a director on the board of any public or private company;
·  
the receipt of any non-nominal gifts in excess of $150;
·  
the receipt of any entertainment from any company with which the Trusts have current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety;
·  
any ownership interest in, or any consulting or employment relationship with, any of the Trusts' service providers, other than AmBeacon, the distributor for the Trusts' shares, or any affiliated person thereof;
·  
a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Trusts for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership.

Disclosure and Compliance
Each Covered Officer:
 
·  
should familiarize himself/herself with the disclosure requirements generally applicable to the Trusts;
·  
should not knowingly misrepresent, or cause others to misrepresent, facts about the Trusts to others, whether within or outside the Trusts, including to the Trusts’ Trustees and auditors, and to governmental regulators and self-regulatory organizations;
·  
should, to the extent appropriate within his/her area of responsibility, consult with other officers and employees of the Trusts and AmBeacon with the goal of promoting
·  
full, fair, accurate, timely and understandable disclosure in the reports and documents the Trusts file with, or submit to, the SEC and in other public communications made by the Trusts; and
·  
is responsible to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.
 

 
 
 

 
Reporting and Accountability
Each Covered Officer must:
 
·  
upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he/she has received, read, and understands the Code;
·  
annual thereafter affirm to the Board that he/she has complied with the requirements of the Code;
·  
complete at least annually the Officer Questionnaire by detailing any directorships with public or private companies and/or material relationships or transactions with affiliated persons of any Trust or its series;
·  
not retaliate against any other Covered Officer or any employee of the Trusts or their affiliated persons for reports of potential violations that are made in good faith; and
·  
notify the Legal Officer promptly if he/she knows of any violations of this Code.  Failure to do so is itself a violation of this Code.

The CLO is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation.  In addition, the CLO is authorized and encouraged to consult with counsel to the Trusts and counsel to the Independent Trustees of the Trusts’ Boards of Trustees.  However, any approvals or waivers sought by the Covered Officers will be considered by the Independent Trustees.

The Trusts will follow these procedures in investigating and enforcing this Code:
 
·  
the CLO will take all appropriate action to investigate any potential violations reported to him;
·  
if, after such investigation, the CLO believes that no violation has occurred, the CLO is not required to take any further action;
·  
any matter that the CLO believes is a violation will be reported to the Independent Trustees;
·  
if the Independent Trustees concur that a violation has occurred, they will inform and make a recommendation to the applicable Trust’s Board of Trustees, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of AmBeacon or its board; or a recommendation to dismiss the Covered Officer;
·  
the Independent Trustees will be responsible for granting waivers, as appropriate; and
·  
any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the Trusts for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder.  Insofar as other policies or procedures of the Trusts, AmBeacon, the distributor for the Trusts' shares, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code.  The Trusts’ and AmBeacon’ codes of ethics under Rule 17j-1 under the Investment Company Act and the more detailed policies and procedures set forth in the Trusts’ Statement of Policy on Material Non-Public In formation are separate requirements applying to the Covered Officers and others, and are not part of nor replaced by this Code.

Amendments
Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, including a majority of Independent Trustees.

Confidentiality
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly.  Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the appropriate Board of Trustees, its counsel and AmBeacon.

Internal Use
This Code is intended solely for the internal use by the Trusts and does not constitute an admission, by or on behalf of any Trust, as to any fact, circumstance, or legal conclusion.


 
 

 


 
EXHIBIT A

Persons Covered by this Code of Ethics


 
 
Position with each Trust
 
Name
Principal Executive Officer
President
Gene L. Needles, Jr.
Principal Financial Officer
Treasurer
Melinda G. Heika

EX-99.CERT 19 exhibit99cert-10.htm exhibit99cert-10.htm
For period ended 04/30/2010
 
Registrant Name: American Beacon Funds
 
File Number: 811-4984
 
EXHIBIT 99.CERT
 
I, Melinda G. Heika, 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.
 

 
Melinda G. Heika
Treasurer
American Beacon Funds
Date:  July 8, 2010    

 
 
 
 

 
 
I, Gene L. Needles, Jr., 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.
 
 
 

Gene L. Needles, Jr.
President
American Beacon Funds
Date:  July 8, 2010         

 
EX-99.906 CERT 20 exhibit906cert-10.htm exhibit906cert-10.htm
For period ended 04/30/2010
 
Registrant Name: American Beacon Funds
 
File Number: 811-4984
 

 
EXHIBIT 99.906CERT
 

 
Gene L. Needles, Jr. and Melinda G. Heika, 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, 2010 (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.
 
 
     
Gene L. Needles, Jr.
 
      Melinda G. Heika
President
 
      Treasurer
American Beacon Funds
 
      American Beacon Funds

 
Date: July 8, 2010
 

 
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.
 
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