N-CSR

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, 2013

Date of reporting period: October 31, 2013

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

President’s Message	1
Market and Performance Overview	2-4
Schedule of Investments	7
Financial Statements	11
Notes to the Financial Statements	15
Financial Highlights	26
Additional Information	Back Cover

The Fund may invest in futures contracts, which are a type of derivative investment. Investing in derivatives could result in losing more than the amount invested. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The intrinsic value of stocks selected for the Fund may never be realized by the market, and the prices of value stocks may go down. While investing in value stocks may limit downside risk over time, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds October 31, 2013

Dear Shareholders,   Most of the conventional measures people use to gauge the performance of the stock market as a whole are measures of large-cap stocks. The venerable Dow Jones Industrial Average, which has been around in one form or another since 1896, averages the performance of just 30 stocks. The S&P 500 Index has probably surpassed the Dow as the most common referent for the market as a whole; it contains 500 of the largest U.S. stocks.   So when people talk briefly about how the stock market is doing - for instance, the radio headlines in the evening’s rush hour - they’re generally talking about the performance of large caps. But these are hardly the full picture of the equity market, nor are they necessarily even a static benchmark to be measured against. These indexes are changing all the time.

On September 30, 2013, the Dow dropped three laggards - Hewlett-Packard, Bank of America and Alcoa - in favor of Nike, Visa and Goldman Sachs. The changes to the S&P 500 have been even more extensive. Just within the 12 months under review, there were 16 companies moving in and out of the index. There have been 241 changes to the 500 companies in that index since 1999.

That makes comparisons within the large-cap universe trickier than they might seem at first blush. That’s one reason we’re proud of our American Beacon Large Cap Value Fund. Rather than tracking an ever-changing index, our Fund is rooted in the judgment of experienced and respected large-cap managers.

• For the 12 months ended October 31, 2013, the American Beacon Large Cap Value Fund (Investor Class) returned 30.26%.

Thank you for your continued investment in the American Beacon Funds. For additional information about the Funds or to access your account information, please visit our website at www.americanbeaconfunds.com.

    Best Regards,

    Gene L. Needles, Jr.

    President

    American Beacon Funds

1

Domestic Equity Market Overview

October 31, 2013 (Unaudited)

U.S. stocks posted strong results for the year ended October 31, 2013, with the S&P 500 Index rising 27.18% over those 12 months. An improving economy, low interest rates and recovering investor sentiment helped drive the market higher, as well as the Federal Reserve’s continued quantitative easing program. Equity markets shrugged off incessant political stalemates and climbed even when the government shut down for 16 days in October. Meanwhile, robust corporate earnings growth has kept valuations in check despite the appreciation in stock prices. At current prices, the S&P 500 Index’s price-to-earnings ratio based on consensus earnings is in line with its 15-year median, yet the 10-year Treasury yield is 2.6%, well below its 15-year median.

The 12-month period began with a rough patch. During the first two weeks of November 2012, the S&P 500 Index slipped by more than 5%, as the markets reacted nervously to negotiations over the fiscal cliff. But the index quickly rebounded and gained more than 8% between that point and the end of the year, setting the stage for its gains throughout 2013.

The early part of 2013 proved to be very strong. At the end of the first quarter, the S&P 500 Index finally surpassed its pre-crash high, closing at its highest mark since October 2007. The index gained 14.1% between the first of the year and May 21. On that day, though, Federal Reserve chairman Ben Bernanke indicated that the Fed’s asset-purchasing program would be coming to an end at some point. This first mention of the so-called taper sent shock waves through the market. The S&P 500 Index dropped more than 5% in the space of a month.

Subsequently, June broke a seven-month winning streak for both the S&P 500 and the Nasdaq indexes, but the market quickly found its footing and began to rally at that point. Even with the taper-induced drop-off, by the end of June, the S&P 500 Index had posted its best first half of any year since 1998.

This performance was bolstered by a U.S. economy that appears to have formed a sound foundation with no obvious signs of a contraction in the near term. For perspective, each recession in the past 50 years has been preceded by three conditions: 1) an inverted yield curve, 2) a tight labor market and 3) a positive output gap (actual gross domestic product [GDP] expressed as a percentage of potential GDP). None of these conditions are evident today. In fact, the yield curve is steep, there is considerable slack in the labor market, and the output gap is decidedly negative.

Coming off a disappointing fourth quarter of 2012, in which GDP grew at just 0.4%, GDP bounced back to 1.1% growth in the first quarter of 2013, 2.5% in the second quarter and 2.8% in the third quarter. Unemployment continued to drop in a slow but mostly steady fashion, from 7.8% in November 2012 to 7.3% in October 2013. Although this was good news for the larger economy, the falling unemployment rate made some investors nervous, because Chairman Bernanke has indicated that the economy would be healthy enough for him to end quantitative easing once the unemployment rate reached 7.0%.

For the 12 months that ended October 31, 2013, in addition to the robust performance of the S&P 500 Index, the rally was strong in all areas of market capitalization. The Russell Midcap^® Index was up 33.79% and the Russell 2000^® Index (which represents small-cap stocks) was up 36.28%.

2

American Beacon Large Cap Value Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the Large Cap Value Fund (the “Fund”) returned 30.26% for the twelve months ended October 31, 2013. The Fund outperformed the Russell 1000^® Value Index (the “Index”) return of 28.29% and the Lipper Large-Cap Value Funds Index return of 28.82% for the same period.

Comparison of Change in Value of a $10,000 Investment for the Period from 10/31/03 through 10/31/13

Total Returns for the Period ended 10/31/2013

	1 Year			5 Years			10 Years			Value of $10,000 10/31/03- 10/31/13
Institutional Class(1,8)		30.70	%		15.47	%		8.76	%	$	23,160
Y Class (1, 2, 8)		30.59	%		15.38	%		8.72	%		23,067
Investor Class(1,8)		30.26	%		15.05	%		8.43	%		22,464
Advisor Class(1,3,8)		30.05	%		14.89	%		8.26	%		22,112
Retirement Class (1,4,8)		29.68	%		14.58	%		8.11	%		21,810
A Class with sales charge (1,5,8)		22.52	%		13.59	%		7.74	%		21,069
A Class without sales charge (1,5,8)		30.03	%		14.94	%		8.38	%		22,357
C Class with sales charge (1,6,8)		28.00	%		14.36	%		8.11	%		21,801
C Class without sales charge (1,6,8)		29.00	%		14.36	%		8.11	%		21,801
AMR Class(1,8)		31.00	%		15.75	%		9.04	%		23,762
Lipper Large-Cap Value Funds Index (7)		28.82	%		13.90	%		7.04	%		19,736
Russell 1000 Value Index (7)		28.29	%		14.06	%		7.81	%		21,208

1. Please note that recent growth 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 is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is 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, visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Institutional Class from 10/31/03 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 10/31/03.

3. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/03 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. As a result, total returns shown may be higher than they would have been had the Advisor Class been in existence since 10/31/03. A portion of the fees charged to the Advisor Class of the Fund was waived in 2005. Performance prior to waiving fees was lower than the actual returns shown for 2005.

4. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 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 10/31/03.

5. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 through 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A 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 A Class been in existence since 10/31/03. A Class shares have a maximum sales charge of 5.75%.

6. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 through 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/03. C Class has a maximum contingent deferred sales charge of 1.00% for shares redeemed within one year of the date of purchase.

7. 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.

3

American Beacon Large Cap Value Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

8. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, Retirement, A, C, and AMR Class shares was 0.60%, 0.70%, 0.97%, 1.09%, 1.43%, 1.13%, 1.89%, and 0.34%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund outperformed the Index as both stock selection and sector allocation added value relative to the Index.

From a stock selection standpoint, the Fund’s Financials and Energy sectors’ holdings added the most value to performance. In the Financials sector, companies that had the greatest impact on performance included Bank of America (up 51.5%), Lincoln National (up 86.6%) and Unum Group (up 60.2%). In the Energy sector, Exxon Mobil (up 0.5%) added the most relative value due to the Fund owning a much smaller position in the security compared to the Index. Chevron (up 12.4%) and Halliburton (up 66.8%) also contributed to the Fund’s returns. Poor stock selection in the Consumer Staples and Information Technology sectors, detracted relative value. Philip Morris International (up 4.6%), Imperial Tobacco Group (up 4.3%) and Wal-Mart (up 4.0%) hurt relative performance in the Consumer Staples sector. In the Information Technology sector, International Business Machines (down 8.1%) was the largest detractor. Not owning Yahoo, which was up 95.7% in the Index, also negatively impacted performance.

The Fund’s overweight position in Information Technology, the best performing sector in the Index, added relative value through sector allocation. Underweight positions in Utilities, the worst performing sector in the Index, and the Energy sector, also contributed to the Fund’s returns.

The sub-advisors continue to invest in a broadly diversified portfolio of companies that they believe have attractive valuations and above-average earnings growth potential. This approach should allow the Fund to benefit over the longer term.

Top Ten Holdings (% Net Assets)

JPMorgan Chase & Co.		3.7
Wells Fargo & Co.		2.6
Bank of America Corp.		2.2
Pfizer, Inc.		2.1
Microsoft Corp.		2.1
Johnson & Johnson		1.8
WellPoint, Inc.		1.7
Merck & Co., Inc.		1.6
BP plc		1.9
Citigroup		1.9
Total Fund Holdings	184

Sector Allocation (% Equities)

Financials	25.4
Health Care	14.5
Energy	12.5
Industrials	10.7
Information Technology	10.1
Consumer Discretionary	10.1
Consumer Staples	7.8
Utilities	3.8
Telecommunication Services	3.7
Materials	1.0
Manufacturing	0.4

4

American Beacon Large Cap Value Fund^SM

Fund Expenses

October 31, 2013 (Unaudited)

Fund Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments 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 May 1, 2013 through October 31, 2013.

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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The “Hypothetical” lines of the 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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Fund. 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 Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Institutional Class
Actual	$	1,000.00	$	1,113.39	$	3.09
Hypothetical **	$	1,000.00	$	1,022.28	$	2.96
Y Class
Actual	$	1,000.00	$	1,113.09	$	3.52
Hypothetical **	$	1,000.00	$	1,021.88	$	3.36
Investor Class
Actual	$	1,000.00	$	1,111.53	$	4.90
Hypothetical **	$	1,000.00	$	1,020.57	$	4.69
Advisor Class
Actual	$	1,000.00	$	1,110.68	$	5.64
Hypothetical **	$	1,000.00	$	1,019.86	$	5.40
Retirement Class
Actual	$	1,000.00	$	1,109.27	$	6.96
Hypothetical **	$	1,000.00	$	1,018.60	$	6.67
A Class
Actual	$	1,000.00	$	1,110.49	$	5.69
Hypothetical **	$	1,000.00	$	1,019.81	$	5.45
AMR Class
Actual	$	1,000.00	$	1,114.68	$	1.65
Hypothetical **	$	1,000.00	$	1,023.64	$	1.58
C Class
Actual	$	1,000.00	$	1,105.83	$	10.40
Hypothetical **	$	1,000.00	$	1,015.32	$	9.96

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.58%, 0.66%, 0.92%, 1.06%, 1.31%, 1.07%, 1.96% and 0.31% for the Institutional, Y, Investor, Advisor, Retirement, A, C 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

5

American Beacon Large Cap Value Fund^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon Large Cap Value Fund:

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of the American Beacon Large Cap Value Fund (one of the funds constituting the American Beacon Funds) (the “Fund”), as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the, American Beacon Large Cap Value Fund at October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Dallas, Texas

December 30, 2013

6

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
COMMON STOCK - 94.95%
CONSUMER DISCRETIONARY - 9.65%
Auto Components - 1.66%
Delphi Automotive PLC F		393,320	$	22,498
Johnson Controls, Inc.		2,968,035		136,975
Magna International, Inc., Class A		186,000		15,754
				175,227
Automobiles - 2.83%
General Motors Co.A		3,131,473		115,709
Hertz Global Holdings, Inc.A		3,417,800		78,473
Toyota Motor Corp., ADR B		806,800		104,416
				298,598
Hotels, Restaurants & Leisure - 0.66%
Carnival Corp.		1,685,500		58,402
McDonald’s Corp.		110,025		10,620
				69,022
Household Durables - 0.39%
Stanley Black & Decker, Inc.		518,604		41,016
Leisure Equipment & Products - 0.05%
Hasbro, Inc.		99,787		5,154
Media - 1.86%
Comcast Corp., Class A		883,000		42,013
Comcast Corp. Special Class A		583,710		27,026
Interpublic Group of Cos., Inc.		2,356,800		39,594
McGraw-Hill Cos., Inc.		76,660		5,342
Omnicom Group, Inc.		182,527		12,432
Time Warner Cable, Inc.		385,800		46,353
Viacom, Inc., Class B		110,180		9,177
Walt Disney Co.		204,955		14,058
				195,995
Multiline Retail - 1.89%
Dillard’s, Inc., Class A		379,500		31,111
Kohl’s Corp.		49,542		2,814
Target Corp.		2,545,556		164,927
				198,852
Specialty Retail - 0.31%
Advance Auto Parts, Inc.		65,486		6,495
Lowe’s Cos., Inc.		478,800		23,834
Staples, Inc.		142,537		2,298
				32,627
Total Consumer Discretionary				1,016,491
CONSUMER STAPLES - 7.49%
Beverages - 1.21%
Coca-Cola Enterprises, Inc.		90,600		3,781
Diageo PLC, ADR B		679,616		86,712
Dr Pepper Snapple Group, Inc.		103,510		4,901
Molson Coors Brewing Co., Class B		299,900		16,195
PepsiCo, Inc.		184,800		15,540
				127,129
Food & Drug Retailing - 2.53%
CVS Caremark Corp.		275,643		17,162
Kroger Co.		1,543,100		66,106
Sysco Corp.		1,520,900		49,186
Wal-Mart Stores, Inc.		1,748,060		134,163
				266,617
Food Products - 0.98%
Danone S.A., ADR B		625,450		9,313
General Mills, Inc.		304,475		15,352

	Shares		Fair Value
			(000’s)
Kellogg Co.		440,139	$	27,839
Mondelez International, Inc., Class A		939,700		31,611
Nestle S.A., ADR B		266,912		19,327
				103,442
Household Products - 0.06%
Procter & Gamble Co.		72,999		5,895
Tobacco - 2.71%
Altria Group, Inc.		1,421,742		52,931
Imperial Tobacco Group PLC, ADR B,F		912,900		68,458
Lorillard, Inc.		249,840		12,744
Philip Morris International, Inc.		1,698,351		151,358
				285,491
Total Consumer Staples				788,574
ENERGY - 11.93%
Energy Equipment & Services - 0.80%
Halliburton Co.		1,591,700		84,407
Oil & Gas - 11.13%
Apache Corp.		894,721		79,451
BP PLC, ADR B		4,300,940		199,995
Chevron Corp.		593,040		71,141
Cobalt International Energy, Inc.A		2,887,700		67,024
ConocoPhillips		1,207,340		88,498
EOG Resources, Inc.		23,306		4,158
Exxon Mobil Corp.		262,526		23,528
Hess Corp.		859,800		69,816
Kosmos Energy Ltd.A		837,000		8,922
Marathon Oil Corp.		798,600		28,159
Marathon Petroleum Corp.		453,150		32,473
Murphy Oil Corp.		301,500		18,186
Occidental Petroleum Corp.		1,612,378		154,917
Phillips 66		1,275,020		82,150
Royal Dutch Shell PLC, Class B, ADR B,F		1,339,000		93,087
Seadrill Ltd.		1,018,200		47,468
Total S.A., ADR B		1,685,800		103,137
				1,172,110
Total Energy				1,256,517
FINANCIALS - 24.11%
Banks - 4.49%
Bank of America Corp.		16,942,590		236,518
Bank of New York Mellon Corp.		1,495,057		47,543
PNC Financial Services Group, Inc.		1,350,794		99,324
SunTrust Banks, Inc.		2,672,300		89,896
				473,281
Diversified Financials - 12.84%
American Express Co.		1,212,500		99,183
BlackRock, Inc., Class A		33,245		10,000
Blackstone Group LP C		1,474,600		38,752
Capital One Financial Corp.		1,932,600		132,712
Charles Schwab Corp.		2,094,500		47,440
Citigroup, Inc.		4,163,776		203,109
Franklin Resources, Inc.		180,675		9,731
Goldman Sachs Group, Inc.		132,175		21,262
JPMorgan Chase & Co.		7,540,504		388,638
KKR & Co., LP C		1,815,500		39,850
Moody’s Corp.		71,320		5,039
Morgan Stanley		817,800		23,495
Nasdaq OMX Group		115,116		4,079

See accompanying notes

7

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
SLM Corp.		1,778,600	$	45,123
State Street Corp.		147,714		10,350
Wells Fargo & Co.		6,406,571		273,497
				1,352,260
Insurance - 6.30%
ACE Ltd.		431,396		41,172
Allstate Corp.		1,250,000		66,325
American International Group, Inc.		2,248,600		116,140
Aon PLC F		125,646		9,937
Berkshire Hathaway, Inc., Class B A		612,575		70,495
Chubb Corp.		76,500		7,044
Hartford Financial Services Group, Inc.		1,335,750		45,015
Lincoln National Corp.		1,018,400		46,246
MetLife, Inc.		2,961,741		140,119
Prudential Financial, Inc.		164,808		13,414
Travelers Cos., Inc.		172,209		14,862
Unum Group		1,697,500		53,879
XL Group PLC F		1,285,300		39,292
				663,940
Real Estate - 0.48%
Hatteras Financial Corp.D		889,600		16,191
Two Harbors Investment Corp.D		3,640,959		33,970
				50,161
Total Financials				2,539,642
HEALTH CARE - 13.81%
Health Care Equipment & Supplies - 1.95%
Covidien PLC F		545,280		34,958
Medtronic, Inc.		2,324,029		133,400
St. Jude Medical, Inc.		147,646		8,473
Thermo Fisher Scientific, Inc.		134,120		13,114
Zimmer Holdings, Inc.		179,900		15,736
				205,681
Health Care Providers & Services - 3.55%
Aetna, Inc.		267,400		16,766
Express Scripts Holding Co.A		136,830		8,555
Humana, Inc.		845,200		77,885
Quest Diagnostics, Inc.		392,942		23,541
UnitedHealth Group, Inc.		997,700		68,103
WellPoint, Inc.		2,110,100		178,936
				373,786
Pharmaceuticals - 8.31%
Abbott Laboratories		327,589		11,973
AbbVie, Inc.		44,029		2,133
AstraZeneca PLC, ADR B,F		906,700		47,928
GlaxoSmithKline PLC, ADR B,F		821,300		43,225
Johnson & Johnson		2,059,371		190,719
Merck & Co., Inc.		3,765,556		169,789
Novartis AG, ADR B		793,300		61,520
Pfizer, Inc.		7,110,607		218,154
Roche Holding AG, ADR B		92,631		6,423
Sanofi, ADR B		2,306,400		123,346
Zoetis, Inc.		9,850		312
				875,522
Total Health Care				1,454,989
INDUSTRIALS - 10.23%
Aerospace & Defense - 3.26%
Boeing Co.		318,900		41,616
General Dynamics Corp.		712,600		61,733
Lockheed Martin Corp.		546,056		72,811

	Shares		Fair Value
			(000’s)
Northrop Grumman Corp.		277,287	$	29,811
Raytheon Co.		1,401,600		115,450
United Technologies Corp.		198,085		21,047
				342,468
Air Freight & Couriers - 0.68%
FedEx Corp.		414,100		54,247
United Parcel Service, Inc., Class B		177,100		17,398
				71,645
Commercial Services & Supplies - 0.01%
Dun & Bradstreet Corp.		9,831		1,070
Electrical Equipment - 0.83%
Emerson Electric Co.		1,308,800		87,650
Industrial Conglomerates - 2.21%
3M Co.		164,383		20,688
General Electric Co.		3,248,500		84,916
Honeywell International, Inc.		1,335,368		115,816
Tyco International Ltd.		298,690		10,917
				232,337
Machinery - 3.18%
Caterpillar, Inc.		552,400		46,048
Cummins, Inc.		559,800		71,106
Danaher Corp.		191,387		13,797
Illinois Tool Works, Inc.		453,550		35,735
Joy Global, Inc.		873,300		49,560
PACCAR, Inc.		703,600		39,120
Pentair Ltd.		66,968		4,493
Reliance Steel & Aluminum Co.		495,200		36,293
Xylem, Inc.		1,137,421		39,241
				335,393
Road & Rail - 0.06%
Canadian National Railway Co.		61,488		6,759
Total Industrials				1,077,322
INFORMATION TECHNOLOGY - 9.62%
Communications Equipment - 1.04%
Cisco Systems, Inc.		822,700		18,511
Corning, Inc.		5,337,900		91,224
				109,735
Computers & Peripherals - 3.21%
Apple, Inc.		136,130		71,108
Hewlett-Packard Co.		4,211,069		102,624
International Business Machines Corp.		336,415		60,289
Seagate Technology PLC F		1,353,025		65,865
Western Digital Corp.		542,600		37,781
				337,667
Electronic Equipment & Instruments - 0.31%
Eaton Corp PLC F		134,154		9,466
TE Connectivity Ltd.		456,700		23,515
				32,981
IT Consulting & Services - 0.31%
Accenture PLC, Class A F		283,978		20,872
Fidelity National Information Services, Inc.		59,020		2,877
Fiserv, Inc.A		53,430		5,596
Western Union Co.		188,754		3,213
				32,558

See accompanying notes

8

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Semiconductor Equipment & Products - 0.86%
Applied Materials, Inc.		1,919,700	$	34,267
Intel Corp.		1,288,817		31,486
Texas Instruments, Inc.		583,800		24,566
				90,319
Software - 3.89%
Activision Blizzard, Inc.		3,880,100		64,565
Check Point Software Technologies Ltd.A		578,300		33,553
Microsoft Corp.		6,152,000		217,474
Oracle Corp.		2,832,784		94,898
				410,490
Total Information Technology				1,013,750
MATERIALS - 0.98%
Chemicals - 0.95%
Air Products & Chemicals, Inc.		38,278		4,173
Dow Chemical Co.		1,261,500		49,791
EI du Pont de Nemours & Co.		492,500		30,141
PPG Industries, Inc.		82,908		15,137
Valspar Corp.		14,390		1,007
				100,249
Containers & Packaging - 0.03%
Crown Holdings, Inc.A		72,870		3,177
Total Materials				103,426
TELECOMMUNICATION SERVICES - 3.55%
Diversified Telecommunication Services - 2.19%
AT&T, Inc.		3,879,012		140,421
Verizon Communications, Inc.		1,796,376		90,735
				231,156
Wireless Telecommunication Services - 1.36%
China Mobile Ltd., ADR B		535,100		27,836
Vodafone Group PLC, ADR B,F		3,134,044		115,395
				143,231
Total Telecommunication Services				374,387
UTILITIES - 3.58%
CenterPoint Energy, Inc.		2,704,700		66,536
Duke Energy Corp.		52,570		3,771
Edison International		391,800		19,210
Entergy Corp.		921,000		59,607
Exelon Corp.		2,538,500		72,449
NRG Energy, Inc.		1,546,300		44,116
PPL Corp.		86,176		2,640
Public Service Enterprise Group, Inc.		3,260,276		109,218
Total Utilities				377,547
Total Common Stock (Cost $7,665,801)				10,002,645
PREFERRED STOCK - 0.47%
FINANCIALS - 0.13%
Insurance - 0.05%
Allstate Corp., 1.00%, Due 1/15/2053		207,930		5,024
Real Estate Investment Trusts - 0.08%
Public Storage, Inc., 5.75%, Due 12/31/2049		402,584		8,800
Total Financials				13,824

	Shares		Fair Value
			(000’s)
MANUFACTURING - 0.34%
Aerospace/Defense - 0.01%
United Technologies Corp., 7.50%, Due 8/1/2015		14,770	$	935
Auto Manufacturing - 0.33%
General Motors Co., 4.75%, Due 12/1/2013		677,125		34,750
Total Manufacturing				35,685
Total Preferred Stock (Cost $46,266)				49,509
SHORT-TERM INVESTMENTS- 4.47%
American Beacon U.S. Government Money Market Select Fund, Select Class E		45,000,000		45,000
JPMorgan U.S. Government Money Market Fund, Capital Class		425,863,603		425,864
Total Short-Term Investments (Cost $470,864)				470,864
TOTAL INVESTMENTS - 99.89% (Cost $8,182,931)				10,523,018
OTHER ASSETS, NET OF LIABILITIES - 0.11%				11,627
TOTAL NET ASSETS - 100.00%			$	10,534,645

Percentages are stated as a percent of net assets.

^A  Non-income producing security.

^B  ADR - American Depositary Receipt.

^C  Limited Partnership.

^D  REIT - Real Estate Investment Trust.

^E  The Fund is affiliated by having the same investment advisor.

^F  PLC - Public Limited Company.

See accompanying notes

9

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2013

Futures Contracts Open on October 31, 2013 (000’s):

Description	Type		Number of Contracts		Expiration Date		Contract Value		Unrealized Appreciation (Depreciation)
S&P 500 Mini E Index Futures		Long		3,637		December, 2013	$	318,419	$	8,852
							$	318,419	$	8,852

See accompanying notes

10

American Beacon Large Cap Value Fund^SM

Statement of Assets and Liabilities

October 31, 2013 (in thousands, except share and per share amounts)

Assets:
Investments in unaffiliated securities, at fair value A	$	10,478,018
Investments in affiliated securities, at fair value B		45,000
Deposit with brokers for futures contracts		14,919
Receivable for investments sold		1,316
Dividends and interest receivable		8,180
Receivable for fund shares sold		8,532
Receivable for tax reclaims		412
Prepaid expenses		221
Total assets		10,556,598
Liabilities:
Payable for variation margin from open futures contracts		1,746
Payable for fund shares redeemed		9,302
Payable under excess expense reimbursement plan (Note 2)		3
Management and investment advisory fees payable		6,918
Administrative service and service fees payable		3,235
Transfer agent fees payable		87
Custody and fund accounting fees payable		181
Professional fees payable		62
Prospectus and shareholder reports fees payable		192
Trustee fees payable		158
Other liabilities		69
Total liabilities		21,953
Net assets	$	10,534,645
Analysis of Net Assets:
Paid-in-capital		8,681,713
Undistributed net investment income		128,250
Accumulated net realized loss		(624,258	)
Unrealized appreciation of investments		2,340,088
Unrealized appreciation of futures contracts		8,852
Net assets	$	10,534,645
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		196,772,491
Y Class		11,942,303
Investor Class		149,317,750
Advisor Class		4,964,117
Retirement Class		162,163
A Class		457,362
C Class		201,420
AMR Class		26,695,282
Net assets (not in thousands):
Institutional Class	$	5,428,755,279
Y Class	$	327,938,666
Investor Class	$	3,899,010,929
Advisor Class	$	128,528,036
Retirement Class	$	4,132,109
A Class	$	11,904,903
C Class	$	5,199,605
AMR Class	$	729,175,488

See accompanying notes

11

American Beacon Large Cap Value Fund^SM

Statement of Assets and Liabilities

October 31, 2013 (in thousands, except share and per share amounts)

Net asset value, offering and redemption price per share:
Institutional Class	$	27.59
Y Class	$	27.46
Investor Class	$	26.11
Advisor Class	$	25.89
Retirement Class	$	25.48
A Class (offering price $27.62)	$	26.03
C Class	$	25.81
AMR Class	$	27.31
A        Cost of investments in unaffiliated securities	$	8,137,931
B        Cost of investments in affiliated securities	$	45,000

See accompanying notes

12

American Beacon Large Cap Value Fund

Statement of Operations

For the year ended October 31, 2013 (in thousands)

Investment Income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	241,379
Dividend income from affiliated securities		17
Interest income		8
Other income		2
Total investment income		241,406
Expenses:
Management and investment advisory fees (Note 2)		21,886
Administrative service fees (Note 2):
Institutional Class		14,003
Y Class		671
Investor Class		10,989
Advisor Class		346
Retirement Class		11
A Class		35
C Class		14
AMR Class		327
Transfer agent fees:
Institutional Class		696
Y Class		1
Investor Class		193
Advisor Class		7
Retirement Class		1
A Class		2
C Class		1
AMR Class		23
Custody and fund accounting fees		998
Professional fees		324
Registration fees and expenses		202
Service fees (Note 2):
Y Class		224
Investor Class		13,189
Advisor Class		289
Retirement Class		9
A Class		13
C Class		5
Distribution fees (Note 2):
Advisor Class		289
Retirement Class		18
A Class		22
C Class		36
Prospectus and shareholder report expenses		251
Insurance fees		58
Trustee fees		629
Other expenses		290
Total expenses		66,052
Net fees recouped by Manager (Note 2)		3
Net expenses		66,055
Net investment income		175,351
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) from:
Investments		568,419
Commission recapture (Note 3)		225
Futures contracts		44,888
Change in net unrealized appreciation or (depreciation) from:
Investments		1,646,696
Futures contracts		14,133
Net gain on investments		2,274,361
Net increase in net assets resulting from operations	$	2,449,712
A        Foreign taxes	$	1,866

See accompanying notes

13

American Beacon Large Cap Value Fund

Statement of Changes in Net Assets (in thousands)

	Year Ended October 31, 2013			Year Ended October 31, 2012
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	175,351		$	170,988
Net realized gain from investments and futures contracts		613,532			219,441
Change in net unrealized appreciation from investments and futures contracts		1,660,829			830,976
Net increase in net assets resulting from operations		2,449,712			1,221,405
Distributions to Shareholders:
Net investment income:
Institutional Class		(88,612	)		(82,469	)
Y Class		(2,997	)		(3,555	)
Investor Class		(64,236	)		(77,449	)
Advisor Class		(1,759	)		(2,549	)
Retirement Class		(57	)		(18	)
A Class		(126	)		(88	)
C Class		(35	)		(23	)
AMR Class		(14,045	)		(14,457	)
Net distributions to shareholders		(171,867	)		(180,608	)
Net (decrease) in net assets from capital share transactions		(98,431	)		(667,940	)
Net increase in net assets		2,179,414			372,857
Net Assets:
Beginning of period		8,355,231			7,982,374
End of Period *	$	10,534,645		$	8,355,231
*  Includes undistributed net investment income of	$	128,250		$	125,361

See accompanying notes

14

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), which is comprised of twenty-seven Funds, 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
A Class	General public and investors investing through an intermediary with applicable sales charges, which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”)
C Class	General public and investors investing through an intermediary with applicable sales charges, which may include a CDSC
AMR Class	Investors in the tax-exempt retirement and benefit plans of the Manager, AMR Corporation, and its affiliates

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include administrative service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.

New Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments in the ASU enhance disclosures about offsetting of financial assets and liabilities to enable investors to understand the effect of these arrangements on a fund’s financial position. In January 2013, FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. The amendments in ASU No. 2013-01 clarify the scope of disclosures required by ASU No. 2011-11. These ASUs are effective for annual periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Fund believes the adoption of these ASUs will not have a material impact on its financial statement disclosures.

15

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

2. Transactions with Affiliates

Management Agreement

The Trust and the Manager are parties to a Management Agreement that obligates the Manager to provide or oversee the provision of all investment advisory, fund management, and securities lending services. Investment assets of the Fund are managed by multiple 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 Fund an annualized fee equal to 0.05% of the average daily net assets plus amounts paid by the Manager to unaffiliated investment advisors hired by the Manager to direct investment activities of the Fund. Management fees paid during the year ended October 31, 2013 were as follows (dollars in thousands):

Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Net Amounts Retained by Manager
	0.23	%	$	21,886	$	17,215	$	4,671

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, 0.40% of the average daily net assets of the A and C 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, Retirement, A, and C Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no 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.

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, Retirement, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes, 0.50% of the average daily net assets of the Retirement Class, and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, Advisor, Retirement, A, and C 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, 0.15% of the average daily net assets of the A and C Classes, 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.

Investment in Affiliated Funds

The Fund 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”). 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 Management and Administrative Service fees totaling 0.10% of its average daily net assets of the Select Funds. During the year ended October 31, 2013, the Manager earned fees from the Select Funds totaling $46,532 on the Fund’s direct investment in the Select Funds.

16

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

Interfund Lending Program

Pursuant to an exemptive order issued 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. During the year ended October 31, 2013, the Fund participated as a lender by loaning, on average, $7,157,824 for 4 days at an average rate of 0.76% with interest charges of $578. This amount is included as interest income on the Statement of Operations.

Expense Reimbursement Plan

The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of 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 year ended October 31, 2013, the Manager recouped $2,821 of excess carryover expenses expiring in 2014 from the C Class. The carryover of excess expenses potentially reimbursable are $1,444 and $91, expiring in 2014 and 2015, respectively.

Sales Commissions

The Fund’s distributor, Foreside Fund Services, LLC (“Foreside”), may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. For the year ended October 31, 2013, Foreside collected $10,699 from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2013, there were no CDSC fees collected for Class A Shares.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2013, $688 in CDSC fees were collected for the Fund.

3. Security Valuation and Fair Value Measurements

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, including exchange-traded funds (“ETFs”), 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.

Investments in open-end mutual funds are valued at the closing net asset value (“NAV”) 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 fair value.

17

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Trust’s Board of Trustees (the “Board”).

Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker, an amount of cash or U.S. Government and Agency Obligations in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized, but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.

Valuation Inputs

Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1 -	Quoted prices in active markets for identical securities.
Level 2 -	Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
Level 3 -	Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Common stocks and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy. Short-term investments having a maturity of 60 days or less are generally valued at amortized cost which approximates fair value. These investments are categorized as Level 2 of the fair value hierarchy.

The Fund’s investments are summarized by level based on the inputs used to determine their values. U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) also requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of each Fund’s assets and liabilities. During the year ended October 31, 2013, there were no transfers between levels. As of October 31, 2013, the investments were classified as described below (in thousands):

	Level 1		Level 2		Level 3		Total
Common Stock*	$	10,002,645	$	—	$	—	$	10,002,645
Preferred Stock*		49,509		—		—		49,509
Short-Term Investments - Money Markets		470,864		—		—		470,864
Total Investments in Securities	$	10,523,018	$	—	$	—	$	10,523,018
Financial Derivative Instruments
Futures Contracts	$	8,852	$	—	$	—	$	8,852

* Refer to the Schedule of Investments for industry information.

18

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

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 NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Fund. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

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. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Other

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain 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 Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

4. Securities and Other Investments

Real Estate Investment Trusts

The Fund may own shares of real estate investment trusts (“REITS”) which report information on the source of their distributions annually. The Fund re-characterizes distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year. These re-characterizations are not recorded for financial statement purposes, but as an adjustment to the calculation of taxable income.

Other Investment Company Securities and Other Exchange Traded Products

The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, exchange-traded notes (“ETNs”), unit investment trusts, and other investment companies of the Trust. The Fund may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, a Fund becomes a shareholder of that investment company. As a result, Fund shareholders indirectly will bear a Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses Fund shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

5. Financial Derivative Instruments

Futures Contracts

Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Fund may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.

Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as Cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

For the six months ended October 31, 2013, the Fund entered into future contracts primarily for return enhancement, hedging and exposing cash to markets.

20

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at period end.

	Average Futures Contracts Outstanding
For the Quarter Ended	April 30, 2013		October 31, 2013
Large Cap Value Fund		185		191

The following is a summary of the Fund’s derivative financial instruments categorized by risk exposure (in thousands) ^(1) (2):

Fair Values of derivative financial instruments as of October 31, 2013:

Statement of Assets and Liabilities	Derivatives		Fair Value
Unrealized appreciation of futures contracts		Equity Contracts	$	8,852

The effect of derivative financial instruments during the year ended October 31, 2013:

Statement of Operations	Derivatives		Total
Net realized gain (loss) from futures contracts		Equity Contracts	$	44,888
Change in net unrealized appreciation or (depreciation) from futures contracts		Equity Contracts		14,133

⁽¹⁾  See Note 3 in the Notes to Financial Statements for additional information.

⁽²⁾  The volume of derivative activity described above is reflective of the derivative activity through the current period of operations.

6. Principal Risks

In the normal course of business the Fund trades financial instruments and enters into financial transactions where risk of potential loss exists. Security values fluctuate (market risk) and may decline due to factors affecting securities markets in general, particular industries represented in the securities markets or conditions specifically related to a particular company. Failure of the other party to a transaction to perform (credit and counterparty risk), for example by not making principal and interest payments when due, reduces the value of the issuer’s debt and could reduce the Fund’s income. Similar to credit risk, the Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund has unsettled or open transactions will fail to make required payments or otherwise comply with the terms of the instrument, transaction or contract. The potential loss could exceed the value of the financial assets recorded in the financial statements. Some of the Fund’s investments may be illiquid and the Fund may not be able to vary the portfolio investments in response to changes in economic and other conditions. If a Fund is required to liquidate all or a portion of its investments quickly, the Fund may realize significantly less than the value at which it previously recorded those investments.

Market Risks

The Fund’s investments in financial derivatives and other financial instruments expose the Fund to various risks such as, but not limited to, interest rate, foreign currency and equity risks.

Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income’s market price to interest rate (i.e. yield) movements.

If the Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, they will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case

21

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Fund’s investments in foreign currency denominated securities may reduce the returns of the Fund.

The fair values of equities, such as common stocks and preferred securities or equity related investments such as futures, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

7. Federal Income and Excise Taxes

It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, the Fund is treated as a single entity for the purpose of determining such qualification.

The Fund does not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2013 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. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

A Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation or depreciation, as applicable, as the income is earned or capital gains are recorded.

The tax character of distributions paid were as follows (in thousands):

	Year Ended October 31, 2013		Year Ended October 31, 2012
Distributions paid from:
Ordinary income*
Institutional Class	$	88,612	$	82,469
Y Class		2,997		3,555
Investor Class		64,236		77,449
Advisor Class		1,759		2,549
Retirement Class		57		18
A Class		126		88
C Class		35		23
AMR Class		14,045		14,457
Total distributions paid	$	171,867	$	180,608

* For tax purposes, short-term capital gains are considered ordinary income distributions.

22

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

As of October 31, 2013, the components of distributable earnings or (deficits) on a tax basis were as follows (in thousands):

Cost basis of investments for federal income tax purposes	$	8,368,666
Unrealized appreciation		2,458,818
Unrealized depreciation		(304,466	)
Net unrealized appreciation or (depreciation)		2,154,352
Undistributed ordinary income		124,792
Accumulated long-term gain or (loss)		(435,082	)
Other temporary differences		8,870
Distributable earnings or (deficits)	$	1,852,932

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 or depreciation are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains or 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 or losses under U.S. GAAP 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 Section 732 basis adjustments that have been reclassified as of October 31, 2013 (in thousands):

Paid-in-capital	$	8
Undistributed net investment income (loss)		(595	)
Accumulated net realized gain (loss)		587
Unrealized appreciation or (depreciation) of investments and futures contracts		—

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”) was enacted, which changed various technical rules governing the tax treatment of RICs. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the RIC MOD, each Fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

Finally, the RIC MOD contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions. Except for the simplification provisions related to RIC qualification, the RIC MOD is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.

At October 31, 2013 the capital loss carry forward positions that may be applied against realized net taxable gains in each succeeding year or until the expiration date, whichever occurs first, prior to the RIC MOD provisions are $383,787 and $42,443 expiring in 2017 and 2018 respectively. The Fund utilized $527,690 of net capital loss carryovers for the year ended October 31, 2013 (in thousands).

23

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

8. Investment Transactions

The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the year ended October 31, 2013, were $3,020,985 and $3,038,986, respectively (in thousands).

A summary of the Fund’s direct transactions in the USG Select Fund for the year ended October 31, 2013 is set forth below (in thousands):

Affiliate	October 31, 2012 Shares/Fair Value		Purchases		Sales		October 31, 2013 Shares/Fair Value		Dividend Income
USG Select Fund	$	35,000	$	15,000	$	5,000	$	45,000	$	17

9. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund (dollars and shares in thousands):

For the Year Ended October 31, 2013

	Institutional Class						Y Class						Investor Class						Advisor Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		40,124		$	983,383			9,020		$	216,172			29,777		$	691,666			1,229		$	28,327
Reinvestment of dividends		3,850			84,356			131			2,860			2,959			61,550			83			1,708
Shares redeemed		(28,594	)		(694,960	)		(1,332	)		(33,146	)		(61,332	)		(1,380,588	)		(1,466	)		(33,539	)
Net increase (decrease) in shares outstanding		15,380		$	372,779			7,819		$	185,886			(28,596	)	$	(627,372	)		(154	)	$	(3,504	)

	Retirement Class						A Class						C Class						AMR Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		97		$	2,175			225		$	5,373			104		$	2,465			5,766		$	143,403
Reinvestment of dividends		3			57			5			115			1			31			649			14,045
Shares redeemed		(49	)		(1,169	)		(78	)		(1,876	)		(25	)		(602	)		(7,928	)		(190,237	)
Net increase (decrease) in shares outstanding		51		$	1,063			152		$	3,612			80		$	1,894			(1,513	)	$	(32,789	)

	Totals
	Shares			Amount
Shares sold		86,342		$	2,072,964
Reinvestment of dividends		7,681			164,722
Shares redeemed		(100,804	)		(2,336,117	)
Net increase (decrease) in shares outstanding		(6,781	)	$	(98,431	)

For the Year Ended October 31, 2012

	Institutional Class						Y Class						Investor Class						Advisor Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		38,505		$	784,522			2,764		$	57,155			26,251		$	506,078			1,041		$	19,728
Reinvestment of dividends		4,077			75,537			192			3,547			4,246			74,766			143			2,499
Shares redeemed		(39,268	)		(795,028	)		(5,966	)		(126,980	)		(61,686	)		(1,177,109	)		(3,341	)		(65,045	)
Net increase (decrease) in shares outstanding		3,314		$	65,031			(3,010	)	$	(66,278	)		(31,189	)	$	(596,265	)		(2,157	)	$	(42,818	)

24

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

	Retirement Class						A Class						C Class						AMR Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		104		$	1,982			171		$	3,306			63		$	1,219			11,216		$	224,730
Reinvestment of dividends		1			18			4			79			1			20			789			14,457
Shares redeemed		(51	)		(943	)		(89	)		(1,684	)		(16	)		(317	)		(14,041	)		(270,477	)
Net increase (decrease) in shares outstanding		54		$	1,057			86		$	1,701			48		$	922			(2,036	)	$	(31,290	)

	Totals
	Shares			Amount
Shares sold		80,115		$	1,598,720
Reinvestment of dividends		9,453			170,923
Shares redeemed		(124,458	)		(2,437,583	)
Net increase (decrease) in shares outstanding		(34,890	)	$	(667,940	)

25

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended October 31,
	2013			2012			2011A			2010			2009
Net asset value, beginning of period	$	21.58		$	18.99		$	18.56		$	16.32		$	15.01
Income from investment operations:
Net investment income		0.50			0.45			0.39			0.32			0.35
Net gains (losses) from investments (both realized and unrealized)		6.00			2.60			0.30			2.22			1.40
Total income (loss) from investment operations		6.50			3.05			0.69			2.54			1.75
Less distributions:
Dividends from net investment income		(0.49	)		(0.46	)		(0.26	)		(0.30	)		(0.44	)
Distributions from net realized gains on securities		—			—			—			—			—
Total distributions		(0.49	)		(0.46	)		(0.26	)		(0.30	)		(0.44	)
Net asset value, end of period	$	27.59		$	21.58		$	18.99		$	18.56		$	16.32
Total return B		30.70	%		16.48	%		3.69	%		15.68	%		12.41	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	5,428,755		$	3,914,173		$	3,380,918		$	3,366,011		$	2,221,162
Ratios to average net assets (annualized):
Expenses, before reimbursements		0.58	%		0.59	%		0.58	%		0.59	%		0.61	%
Expenses, net of reimbursements		0.58	%		0.59	%		0.58	%		0.59	%		0.61	%
Net investment income (loss), before reimbursements		1.99	%		2.23	%		1.96	%		1.73	%		2.36	%
Net investment income, net of reimbursements		1.99	%		2.23	%		1.96	%		1.73	%		2.36	%
Portfolio turnover rate		34	%		30	%		90	%		28	%		27	%

^A On December 1, 2010, MFS Institutional Advisors, Inc. assumed management of the Large Cap Value Fund’s assets previously managed by Metropolitan West Capital Management, LLC.

^B Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^C Not annualized.

^D Annualized.

^E Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.

26

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Y Class															Investor Class
Year Ended October 31,												August 3 to Oct. 31,			Year Ended October 31,
2013			2012			2011A			2010			2009			2013			2012			2011A			2010			2009
$	21.47		$	18.92		$	18.49		$	16.32		$	15.59		$	20.43		$	17.99		$	17.61		$	15.51		$	14.29
	0.40			0.53			0.37			0.29			0.06			0.39			0.36			0.30			0.23			0.28
	6.05			2.50			0.30			2.22			0.67			5.69			2.47			0.29			2.12			1.34
	6.45			3.03			0.67			2.51			0.73			6.08			2.83			0.59			2.35			1.62
	(0.46	)		(0.48	)		(0.24	)		(0.34	)		—			(0.40	)		(0.39	)		(0.21	)		(0.25	)		(0.40	)
	—			—			—			—			—			—			—			—			—			—
	(0.46	)		(0.48	)		(0.24	)		(0.34	)		—			(0.40	)		(0.39	)		(0.21	)		(0.25	)		(0.40	)
$	27.46		$	21.47		$	18.92		$	18.49		$	16.32		$	26.11		$	20.43		$	17.99		$	17.61		$	15.51
	30.59	%		16.43	%		3.58	%		15.50	%		4.68	%C		30.26	%		16.05	%		3.30	%		15.27	%		11.99	%
$	327,939		$	88,509		$	134,968		$	2,123		$	1		$	3,899,011		$	3,635,333		$	3,761,691		$	4,140,584		$	3,798,632
	0.66	%		0.69	%		0.69	%		0.70	%		0.68	%D		0.93	%		0.96	%		0.95	%		0.96	%		0.93	%
	0.66	%		0.69	%		0.69	%		0.70	%		0.68	%D		0.93	%		0.96	%		0.95	%		0.96	%		0.93	%
	1.78	%		2.12	%		1.88	%		1.51	%		1.58	%D		1.67	%		1.89	%		1.59	%		1.36	%		2.05	%
	1.78	%		2.12	%		1.88	%		1.51	%		1.58	%D		1.67	%		1.89	%		1.59	%		1.36	%		2.05	%
	34	%		30	%		90	%		28	%		27	%E		34	%		30	%		90	%		28	%		27	%

27

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor Class
	Year Ended October 31,
	2013			2012			2011A			2010			2009
Net asset value, beginning of period	$	20.25		$	17.83		$	17.47		$	15.39		$	14.19
Income from investment operations:
Net investment income (loss)		0.35			0.31			0.27			0.21			0.26
Net gains (losses) from investments (both realized and unrealized)		5.65			2.48			0.28			2.10			1.32
Total income (loss) from investment operations		6.00			2.79			0.55			2.31			1.58
Less distributions:
Dividends from net investment income		(0.36	)		(0.37	)		(0.19	)		(0.23	)		(0.38	)
Distributions from net realized gains on securities		—			—			—			—			—
Total distributions		(0.36	)		(0.37	)		(0.19	)		(0.23	)		(0.38	)
Net asset value, end of period	$	25.89		$	20.25		$	17.83		$	17.47		$	15.39
Total return B		30.05	%		15.96	%		3.11	%		15.14	%		11.81	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	128,528		$	103,629		$	129,739		$	128,080		$	114,945
Ratios to average net assets (annualized):
Expenses, before recoupments		1.07	%		1.08	%		1.08	%		1.10	%		1.12	%
Expenses, net of recoupments		1.07	%		1.08	%		1.08	%		1.10	%		1.10	%
Net investment income (loss), before recoupements		1.52	%		1.78	%		1.46	%		1.23	%		1.84	%
Net investment income, net of recoupments		1.52	%		1.78	%		1.46	%		1.23	%		1.86	%
Portfolio turnover rate		34	%		30	%		90	%		28	%		27	%

^A On December 1, 2010, MFS Institutional Advisors, Inc. assumed management of the Large Cap Value Fund’s assets previously managed by Metropolitan West Capital Management, LLC.

^B  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^C Not annualized.

^D Annualized.

^E Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.

^F Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

28

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Retirement Class															A Class												C Class
Year Ended October 31,												May 1 to Oct. 31,			Year Ended October 31,									May 17 to Oct. 31,			Year Ended October 31,									Sept. 1 to Oct. 31,
2013			2012			2011A			2010			2009			2013			2012			2011A			2010			2013			2012			2011A			2010
$	20.07		$	17.74		$	17.32		$	15.36		$	12.66		$	20.41		$	18.01		$	17.61		$	16.93		$	20.29		$	17.95		$	17.58		$	16.17
	0.35			0.28			0.20			0.18			0.08			0.38			0.36			0.24			0.03			0.23			0.22			0.10			(0.01	)
	5.50			2.42			0.30			2.07			2.62			5.65			2.44			0.31			0.65			5.58			2.42			0.32			1.42
	5.85			2.70			0.50			2.25			2.70			6.03			2.80			0.55			0.68			5.81			2.64			0.42			1.41
	(0.44	)		(0.37	)		(0.08	)		(0.29	)		—			(0.41	)		(0.40	)		(0.15	)		—			(0.29	)		(0.30	)		(0.05	)		—
	—			—			—			—			—			—			—			—			—			—			—			—			—
	(0.44	)		(0.37	)		(0.08	)		(0.29	)		—			(0.41	)		(0.40	)		(0.15	)		—			(0.29	)		(0.30	)		(0.05	)		—
$	25.48		$	20.07		$	17.74		$	17.32		$	15.36		$	26.03		$	20.41		$	18.01		$	17.61		$	25.81		$	20.29		$	17.95		$	17.58
	29.68	%		15.57	%		2.86	%		14.78	%		21.33	%C		30.03	%		15.91	%		3.12	%		4.02	%C		29.00	%		14.97	%		2.36	%		8.72	%C
$	4,132		$	2,230		$	1,019		$	2		$	1		$	11,905		$	6,222		$	3,942		$	814		$	5,200		$	2,468		$	1,329		$	38
	1.33	%		1.42	%		1.39	%		1.37	%		1.37	%D		1.08	%		1.12	%		1.16	%		1.06	%D		1.84	%		1.88	%		2.54	%		2.14	%D
	1.33	%		1.42	%		1.39	%		1.37	%		1.37	%D		1.08	%		1.12	%		1.16	%		1.06	%D		1.92	%		1.87	%		1.84	%		1.87	%D
	1.18	%		1.19	%		1.06	%		0.95	%		1.15	%D		1.44	%		1.66	%		1.37	%		1.09	%D		0.68	%		0.89	%		(0.01	)%		(0.76	)%D
	1.18	%		1.19	%		1.06	%		0.95	%		1.15	%D		1.44	%		1.66	%		1.37	%		1.09	%D		0.60	%		0.89	%		0.68	%		(0.50	)%D
	34	%		30	%		90	%		28	%		27	%E		34	%		30	%		90	%		28	%F		34	%		30	%		90	%		28	%F

29

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	AMR Class
	Year Ended October 31,
	2013			2012			2011A			2010			2009
Net asset value, beginning of period	$	21.36		$	18.81		$	18.37		$	16.14		$	14.88
Income from investment operations:
Net investment income		0.57			0.52			0.41			0.34			0.37
Net gains (losses) from investments (both realized and unrealized)		5.92			2.54			0.32			2.22			1.38
Total income (loss) from investment operations		6.49			3.06			0.73			2.56			1.75
Less distributions:
Dividends from net investment income		(0.54	)		(0.51	)		(0.29	)		(0.33	)		(0.49	)
Distributions from net realized gains on securities		—			—			—			—			—
Total distributions		(0.54	)		(0.51	)		(0.29	)		(0.33	)		(0.49	)
Net asset value, end of period	$	27.31		$	21.36		$	18.81		$	18.37		$	16.14
Total return B		31.05	%		16.75	%		3.94	%		16.04	%		12.59	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	729,175		$	602,667		$	568,768		$	558,089		$	520,799
Ratios to average net assets (annualized):
Expenses, before reimbursements		0.32	%		0.33	%		0.33	%		0.34	%		0.36	%
Expenses, net of reimbursements		0.32	%		0.33	%		0.33	%		0.34	%		0.36	%
Net investment income (loss), before reimbursements		2.26	%		2.51	%		2.21	%		1.98	%		2.62	%
Net investment income, net of reimbursements		2.26	%		2.51	%		2.21	%		1.98	%		2.62	%
Portfolio turnover rate		34	%		30	%		90	%		28	%		27	%

^A On December 1, 2010, MFS Institutional Advisors, Inc. assumed management of the Large Cap Value Fund’s assets previously managed by Metropolitan West Capital Management, LLC.

^B Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

30

American Beacon Funds

Privacy Policy & Federal Tax Information

October 31, 2013 (Unaudited)

Privacy Policy

The American Beacon Funds recognize and respect the privacy of our shareholders. We are providing this notice to you so you will understand how shareholder information may be collected and used.

We may collect nonpublic personal information about you from one or more of the following sources:

• information we receive from you on applications or other forms;

• information about your transactions with us or our service providers; and

• information we receive from third parties.

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

We restrict access to your nonpublic personal information to those employees or service providers who need to know that information to provide products or services to you. To ensure the confidentiality of your nonpublic personal information, we maintain safeguards that comply with federal standards.

Federal Tax Information

Certain tax information regarding the Fund is required to be provided to shareholders based upon the Fund’s income and distribution for the taxable year ended October 31, 2013. The information and distributions reported herein may differ from information and distribution taxable to the shareholders for the calendar year ended December 31, 2013.

The Fund designated the following items with regard to distributions paid during the fiscal year ended October 31, 2012. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends Received Deduction	77.06	%
Qualified Dividend Income	100.00	%

Shareholders will receive notification in January 2014 of the applicable tax information necessary to prepare their 2013 income tax returns.

31

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

At its May 29, 2013 meeting, the Board of Trustees (“Board”) considered the renewal of the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Beacon Trust”) on behalf of each of their series (collectively, the “Funds”) and the renewal of each investment advisory agreement between the Manager and a subadvisor (each an “Investment Advisory Agreement”). The Management Agreement and the Investment Advisory Agreements are collectively referred to herein as the “Agreements.” In preparation for the Board’s consideration to renew and approve these Agreements, the Board and its Investment Committee undertook steps to gather and consider information furnished by the Manager, the subadvisors, Lipper, Inc. (“Lipper”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and each subadvisor.

In addition, the Board’s Investment Committee worked with Lipper to obtain relevant comparative information regarding the performance, fees and expenses of the Funds. The Investment Committee, for the benefit of all Trustees, sponsored a separate meeting on May 10, 2013 to consider the information provided by Lipper. Further, the Board took into consideration information furnished for the Board’s review and consideration throughout the year at regular Board and Investment Committee meetings, as well as information specifically prepared in connection with the renewal process.

In connection with the Board’s consideration of the Management Agreement and each Investment Advisory Agreement, the Trustees received and evaluated such information as they deemed necessary. The information requested by the Board included, among other information, the following materials. For various reasons, a subadvisor may not have provided responses to each requested item. In these instances, the Board considered the materials that were received from such subadvisor. References herein to the “firm” refer to the Manager and/or each applicable subadvisor.

• a description of any significant changes (actual or anticipated) to principal activities, personnel, services provided to the Funds, or any other area, including how these changes might affect the Funds;

• a copy of the firm’s most recent audited or unaudited financial statements, as well as Parts 1 and 2 of its Form ADV registration statement with the SEC;

• a summary of any material pending or anticipated litigation or regulatory proceedings involving the firm or its personnel, including the results of any recent regulatory examination or independent audit;

• a comparison of the performance of that portion of Fund assets managed or to be managed by each firm with the performance of other similar accounts managed by the firm, including a discussion of relative performance versus a peer group average and any actual or potential remedial measures if the firm’s longer-term performance was materially below that of the peer group;

• any actual or anticipated economies of scale in relation to the services the firm provides or will provide to each Fund and whether the current fee rates charged or to be charged to each Fund reflect these economies of scale for the benefit of the Fund’s investors;

• an analysis of compensation, including a comparison with fee rates charged to other clients for which similar services are provided, any proposed changes to the fee rate schedule, if applicable, and the effect of any fee waivers;

• a description of any payments made or to be made by the subadvisors to the Manager to support a Fund’s marketing efforts;

• a copy of the firm’s proxy voting policies and procedures and, if applicable, the name of the third-party voting service used by the firm;

• an evaluation of any other benefits to the firm or Funds as a result of their relationship, if any;

• confirmation that the firm’s financial condition would not impair its ability to provide high-quality advisory services to the Funds;

• a description of the scope of portfolio management services provided or to be provided to the Funds, including whether such services differ from the services provided to other clients, including other registered investment companies, and any advantages or disadvantages that might accrue to the Funds due to the firm’s involvement in other activities;

• a description of the personnel who are or will be assigned primary responsibility for managing the Funds, including any changes during the past year, and a discussion of the adequacy of current and projected staffing levels to service the Funds;

• a description of the basis upon which portfolio managers are compensated, including any “incentive” arrangements, and a description of the oversight mechanisms used to prevent a portfolio manager whose compensation is tied to performance of a Fund from taking undue risks;

• a description of the firm’s practices in monitoring the quality of portfolio holdings and in reviewing portfolio valuation, including any fair value determinations;

• a description of the firm’s use of derivatives, short positions, leveraged trading strategies or other similar trading strategies for the Funds;

• a discussion of the firm’s methodology for obtaining best execution, including any plans to improve the quality of execution in the upcoming year, and the use of any affiliated broker-dealers;

• a description of any actual or potential conflicts of interest anticipated in managing Fund assets;

• a discussion of whether the firm has identified any investment or operational matters that likely present a high risk in managing Fund assets;

• a description of the firm’s criteria for assessing counterparties and counterparty risk to the extent the firm enters into transactions with counterparties on a Fund’s behalf;

• a description of trade allocation procedures among accounts managed by the firm;

• a discussion of whether the firm utilizes “commission recapture” or “directed brokerage” arrangements for the benefit of the Funds or “step-out” transactions;

• a discussion of whether the firm receives, or anticipates receiving, other compensation, including any payment for electronic communication network liquidity rebates with respect to the Funds;

32

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

• a certification by the firm regarding the reasonable design of its compliance program;

• a summary of the results of the firm’s most recent annual review of its compliance program and a discussion of any material compliance problems encountered by a subadvisor since the most recent annual review;

• confirmation that the firm is prepared to provide to the Manager, directly or in summary form, any regulatory review comments that could have a material impact on services provided to the Funds;

• a discussion of whether, due to the firm’s trading activities on behalf of the Funds, the firm would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendments to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt;

• information regarding the firm’s code of ethics, insider trading policy and disaster recovery plan, including a description of any material changes thereto and a related certification of compliance by the firm;

• a description of the firm’s affiliation with any broker-dealer;

• a discussion of any anticipated change in the firm’s controlling persons; and

• verification of the firm’s insurance coverage with regards to the services provided to the Funds.

In addition to the foregoing, the Manager provided the following information specific to the renewal of the Management Agreement:

• a comparison of the performance of a share class of each Fund to comparable investment companies and appropriate indices, including comments on the relative performance of, as applicable, each subadvisor and each Fund versus the respective peer group average;

• a discussion, if applicable, of any underperformance by a subadvisor relative to its peer group and what, if any, remedial measures the Manager has or intends to take;

• a comparison of advisory fee rates and expense ratios for comparable mutual funds;

• a profit/loss analysis of the Manager;

• an analysis of any material complaints received from Fund shareholders;

• a description of the extent to which the Manager monitors the investment activities and financial conditions of each subadvisor to the Funds;

• a discussion of whether the Manager provides different types or levels of administrative and accounting related services to certain Funds;

• a description of the Manager’s distribution activities with respect to promoting sales of Fund shares, including any revenue sharing practices;

• a description of arrangements pursuant to which certain firms may make any direct or indirect payments to partially reimburse the Manager for its marketing or other expenses on behalf of the Funds;

• a description of the Manager’s securities lending practices and the fees received from such practices;

• a discussion of any rebate arrangements between the Manager and a service provider to the Funds pursuant to which the Manager receives direct or indirect benefits from the service provider;

• a description of the portfolio turnover rate for each Fund and, as applicable, each subadvisor to a Fund;

• a description of how expenses that are not readily identifiable to a particular Fund are allocated; and

• confirmation that the Manager complies with applicable CFTC and National Futures Association rules and requirements for applicable Funds and a discussion regarding whether, due to the Manager’s trading activities on behalf of other Funds, the Manager would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendment to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt.

In connection with the Management Agreement and each Investment Advisory Agreement, the Board also obtained an analysis provided by Lipper that compared: (i) investment performance of each Fund versus comparable investment companies and appropriate indices; (ii) total Fund expenses of each Fund versus comparable mutual funds; and (iii) each Fund’s investment advisory fee rate versus comparable mutual funds. For certain Funds, the Board also considered information regarding the performance of the Manager and individual subadvisors with respect to their allocated portions of a Fund’s portfolio, net of management or subadvisory fees, as applicable, but not other Fund expenses. For each Fund with more than one class of shares, the class of shares used for comparative purposes was the class with the longest performance history, which in most cases was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

Provided below is an overview of the primary factors the Trustees considered at the Investment Committee meeting on May 10, 2013 at which the Trustees reviewed the investment performance of the Manager and each subadvisor and the primary factors considered by the Board at its May 29, 2013 meeting at which the Board considered the renewal of the Management Agreement and Investment Advisory Agreements.

The Board did not identify any particular information that was most relevant to its consideration to renew or approve each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal and approval of each Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of the contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Funds and their shareholders.

33

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

Considerations With Respect to the Renewal of the Management Agreement and each Investment Advisory Agreement

In determining whether to renew the Management Agreement and each Investment Advisory Agreement on behalf of the Funds, the Trustees considered the best interests of each Fund separately. While the Management Agreement and the Investment Advisory Agreements for all of the Funds were considered at the May 29, 2013 meeting, the Board considered each Fund’s investment management and subadvisory relationships separately.

In each instance, the Board considered, among other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of a Fund and, as applicable, each subadvisor for a Fund; (3) the costs incurred by the Manager in rendering services to the Funds and its resulting profits or losses; (4) the extent to which economies of scale have been taken into account in setting each fee rate schedule; (5) whether fee rate levels reflect these economies of scale for the benefit of Fund investors; (6) comparisons of services and fee rates with contracts entered into by the Manager or a subadvisor or their affiliates with other clients (such as pension funds and other institutional funds); and (7) any other benefits derived or anticipated to be derived by the Manager or a subadvisor from their relationship with a Fund. The Trustees posed questions to various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the renewal.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: each Fund’s long-term performance and the background and experience of key investment personnel at the Manager; the cost structure of the Funds; the Manager’s culture of compliance and support for compliance operations that reduce risks to the Funds; the Manager’s commitment to enhance the Funds’ product line and increase assets in the Funds; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; the Manager’s commitment to training employees; and the Manager’s efforts to retain key employees and maintain staff levels.

With respect to the renewal of each Investment Advisory Agreement, the Trustees considered the level of staffing, quality, background and experience of each subadvisor’s investment personnel responsible for managing the Funds, the size of the subadvisor and the subadvisor’s ability to continue to attract and retain qualified investment personnel. The Board also considered the adequacy of the resources committed to the Funds by each subadvisor, and whether those resources were commensurate with the needs of the Funds and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of each subadvisor. The Board also considered the subadvisors’ representations regarding their compliance programs and codes of ethics. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and each subadvisor were appropriate for each Fund and, thus, determined to renew the Management Agreement and the Investment Advisory Agreement for each Fund.

Investment Performance. The Board evaluated the comparative information provided by Lipper and the Manager regarding each Fund’s investment performance relative to its Lipper performance universe, Lipper performance group, and/or benchmark index(es). The Board considered the information provided by Lipper regarding its independent peer selection methodology to select all performance groups and universes. The Board also considered that the performance groups and universes selected by Lipper may not provide appropriate comparisons for each Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also considered in each instance the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to each Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Costs of the Services Provided to the Funds and the Profits Realized by the Manager from its Relationship with the Funds. In analyzing the cost of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager. The profits or losses were noted at both an aggregate level for all Funds and at an individual Fund level, with some Funds being profitable for the Manager and with the Manager sustaining losses with respect to other Funds. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Funds, the difference reflects the greater level of responsibility and regulatory requirements associated with managing the Funds.

The Board also noted that the Manager proposed to continue the expense waivers and reimbursements for certain Funds and classes that were in place during the last fiscal year. The Board further considered that with respect to each Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager plus the amount payable by the Manager to a subadvisor. The Board also considered that the Manager receives service and administrative fees to compensate the Manager for providing administrative services to the Funds and to compensate third-party administrators and broker-dealers for services to Fund shareholders. In addition, the Board considered that the Manager receives management fees for overseeing the securities lending program on behalf of various Funds. The Board also noted that certain classes of the Funds maintain higher expense ratios in order to compensate third-party distributors.

In analyzing the cost of services for each subadvisor in connection with its investment advisory services to the Fund, the Board considered that, in many cases, the Manager has negotiated the lowest subadvisory fee rate a subadvisor charges for any comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board noted that subadvisors may not account for their profits on an account-by-account basis and, those that do, likely employ different methodologies in connection with these calculations.

Based on the foregoing information, the Board concluded that the profitability levels of the Manager were reasonable in light of the services performed by the Manager. A discussion regarding the Board’s considerations with respect to each Fund’s fee rates is set forth below under “Additional Considerations and Conclusions with Respect to Each Fund.”

34

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as the Funds grow and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that the Manager has negotiated breakpoints in many subadvisory fee rates. The Board also noted that, for purposes of determining the fee rates chargeable to the Funds, many subadvisors have agreed to take into account assets of AMR Corporation and its pension plans that are managed by the subadvisors. Thus, the Funds are able to receive lower effective fee rates.

In addition, the Board noted the Manager’s representation that many of the Funds benefit from economies of scale because comparably low fee rate levels are reflected in the current management and administration fee rates the Manager charges. The Board further noted the Manager’s representation that many of the Funds benefit from these comparably low fee rate levels despite not having yet reached an asset size at which economies of scale would traditionally be considered to exist, and the Manager’s belief that breakpoints are not appropriate at this time. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for each Fund provide for a reasonable sharing of benefits from any economies of scale with the Funds.

Benefits Derived from the Relationship with the Funds. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisors as a result of the advisory relationships with the Funds, including greater exposure in the marketplace with respect to the Manager’s or subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors.

In addition, the Manager noted that the Funds also derive benefits from their association with the Manager. Specifically, the Board noted the Manager’s representation that it provides services to most Funds at a lower than industry average cost. The Board considered that certain of the subadvisors reimburse the Manager for certain of its costs relating to distribution activities for the Funds. The Board also considered that the Funds did not pay commissions to any affiliated broker-dealer of the Manager or the relevant subadvisor during the most recent fiscal year ended December 31, 2012.

Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisors by virtue of their relationships with the Funds appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to Each Fund

The performance comparisons below were made versus each Fund’s Lipper performance universe median, Lipper performance group median and/or benchmark index. References below to each Fund’s Lipper performance group and Lipper performance universe are to the respective group or universe of comparable mutual funds included in the analysis provided by Lipper. A Lipper performance group consists of the Fund and a representative sample of funds with similar investment classifications and objectives as the Fund, as selected by Lipper. A Lipper performance universe is an expansion of the performance group, providing a broader view of performance across the Fund’s investment classification/objective and allowing for a more extensive comparison. In reviewing the performance, the Trustees viewed longer-term performance over a full market cycle, typically five years or longer, as the most important consideration, because relative performance over shorter periods may be significantly impacted by market or economic events that do not reflect manager skill.

The expense comparisons below were made versus each Fund’s Lipper expense universe median and Lipper expense group median. References below to each Fund’s expense group and expense universe are to the respective group or universe of comparable mutual funds included in the analysis by Lipper. A Lipper expense group consists of the Fund and a representative sample of funds with similar operating structures, as selected by Lipper. A Lipper expense universe includes all funds in the investment classification/objective with a similar load type to the share class of the Fund included in the Lipper comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Trustees also considered a Fund’s Morningstar fee level category. In reviewing expenses, the Trustees considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the use of soft dollars was requested from the Manager and all subadvisors and was considered by the Trustees.

Additional Considerations and Conclusions with Respect to the American Beacon Large Cap Value Fund

In considering the renewal of the Management Agreement for the American Beacon Large Cap Value Fund, the Trustees considered the following additional factors: (1) the American Beacon Large Cap Value Fund outperformed the Lipper performance universe median for the one-, three-, five-, and ten-year periods ended March 31, 2013; (2) the Fund outperformed the Lipper performance group median for the one-, three- and five-year periods ended March 31, 2013; (3) the expense ratio of the Institutional Class of the Fund was lower than the median of its Lipper expense universe and higher than the median of its Lipper expense group; and (4) the Institutional Class of the Fund was categorized by Morningstar as having a low expense ratio.

In considering the renewal of the Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC (“Barrow”), Brandywine Global Investment Management, LLC (“Brandywine”), Hotchkis and Wiley Capital Management, LLC (“Hotchkis”), and Massachusetts Financial Services Company (“MFS”), the Trustees considered the following additional factors: (1) Barrow outperformed the Lipper performance universe median for the three-, five- and ten-year periods ended March 31, 2013, but underperformed for the one-year period; (2) Brandywine outperformed the Lipper performance universe median for the one-, three- and ten-year periods ended March 31, 2013, but underperformed for the five-year period; (3) Hotchkis outperformed the Lipper performance universe median for the one-, three-, five- and ten-year periods ended March 31, 2013; (4) MFS outperformed the Lipper performance universe median for the one-year period ended March 31, 2013; (5) the Manager’s explanation that Brandywine’s underperformance for some of the periods considered was due in part to underperformance in 2008, Brandywine’s defensive position in 2009, and a focus on high quality securities and large capitalization companies in 2011, when these types of investments generally underperformed; (6) representations by each subadvisor regarding fee rates charged by the subadvisor to other comparable clients; and (7) the Manager’s recommendation to continue to retain each subadvisor.

35

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisors under the Agreements are fair and reasonable; (2) determined that the American Beacon Large Cap Value Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon Large Cap Value Fund.

36

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. Unless otherwise indicated, the address of each person listed below is 4151 Amon Carter Boulevard, MD 2450, Fort Worth, Texas 76155. Each Trustee oversees twenty-six funds in the fund complex that includes the Trust and the American Beacon Select Funds. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES
	Term
	Lifetime of Trust until removal, resignation or retirement*
Gerard J. Arpey** (55)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Chairman and Chief Executive Officer, AMR Corp. and American Airlines; Inc. (2003-2011); Director, S. C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present).
Alan D. Feld*** (76)	Trustee since 1996	Sole Shareholder of a professional corporation which is a Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Mileage Funds (1996-2012); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Master Trust (1996-2012).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
W. Humphrey Bogart (69)	Trustee since 2004	Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Brenda A. Cline (52)	Trustee since 2004	Executive Vice President, Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Eugene J. Duffy (59)	Trustee since 2008	Principal and Executive Vice President, Paradigm Asset Management (1994-Present); Director, Sunrise Bank of Atlanta (2008-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Thomas M. Dunning (71)	Trustee since 2008	Chairman Emeritus (2008-Present) and Chairman (1998-2008)), Lockton Dunning Benefits (consulting firm in employee benefits); Lead Director, Oncor Electric Delivery Company LLC (2007-Present); Board Member, BancTec (2010-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Richard A. Massman (70)	Trustee since 2004 Chairman since 2008	Consultant and General Counsel Emeritus (2009-Present) and Senior Vice President and General Counsel (1994-2009), Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).

37

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
Barbara J. McKenna, CFA (50)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present).
R. Gerald Turner (67)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-Present); Director, Kronus Worldwide Inc. (chemical manufacturing) (2003-Present); Trustee, American Beacon Mileage Funds (2001-2012); Trustee, American Beacon Select Funds (2001-Present); Trustee, American Beacon Master Trust (2001-2012)
Paul J. Zucconi, CPA (73)	Trustee since 2008	Director, Affirmative Insurance Holdings, Inc. (producer of nonstandard automobile insurance) (2004-Present); Director, Titanium Metals Corporation (producer of titanium melted and mill products) (2002-2012); Director, Torchmark Corporation (life and health insurance products) (2002-Present); Director, Charter Bank (community bank services and products) (2010-2011); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
OFFICERS
	Term
	One Year
Gene L. Needles, Jr. (58)	President since 2009 Executive Vice President since 2009	President, CEO and Director (2009-Present), American Beacon Advisors, Inc.; President (2009-Present), President, CEO and Director (2009-Present), Lighthouse Holdings, Inc.; President and CEO (2009-Present), Lighthouse Holdings Parent, Inc.; President (2009-Present), American Beacon Select Funds; President (2009-Present), American Beacon Mileage Funds; President (2008-2009), Touchstone Investments; President (2003-2007), CEO (2004-2007), AIM Distributors.
Rosemary K. Behan (54)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Legal and Compliance, American Beacon Advisors, Inc. (2006-Present); Secretary, American Beacon Advisors, Inc. (2008 - present); Secretary, Lighthouse Holdings, Inc. (2008-Present); Secretary Lighthouse Holdings Parent, Inc. (2008-Present).
Brian E. Brett (53)	VP since 2004	Vice President, Director of Sales, American Beacon Advisors, Inc. (2004-Present).
Wyatt L. Crumpler (47)	VP since 2007	Chief Investment Officer (2012-Present), Vice President, Asset Management (2009-2012), and Vice President, Trust Investments (2007-2009), American Beacon Advisors, Inc.
Erica Duncan (43)	VP Since 2011	Vice President, Marketing and Client Services (2011-Present), American Beacon Advisors, Inc.; Supervisor, Brand Marketing (2010-2011), Invesco; Supervisor, Marketing Communications (2009-2010) and Senior Financial Writer (2004-2009), Invesco AIM.
Michael W. Fields (59)	VP since 1989	Chief Fixed Income Officer (2011-Present) and Vice President, Fixed Income Investments, American Beacon Advisors, Inc. (1988-2011); Director, American Beacon Global Funds SPC (2002-2011); Director, American Beacon Global Funds plc (2007-2009).
Melinda G. Heika (52)	Treasurer since 2010	Treasurer (2010-Present), and Controller (2005-2009), American Beacon Advisors, Inc.; Treasurer, Lighthouse Holdings, Inc. (2010 – Present); Treasurer, Lighthouse Holdings Parent, Inc. (2010-Present).
Terri L. McKinney (49)	VP since 2010	Vice President, Enterprise Services (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.
Jeffrey K. Ringdahl (38)	VP since 2010	Chief Operating Officer, American Beacon Advisors, Inc. (2010-Present); Vice President, Product Management, Touchstone Advisors, Inc. (2007-2010); Senior Director, Business Integration, Fidelity Investments (2005-2007).

38

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
Samuel J. Silver (50)	VP Since 2011	Vice President, Fixed Income Investments (2011-Present) and Senior Portfolio Manager, Fixed Income Investments (1999-2011), American Beacon Advisors, Inc.
Christina E. Sears (42)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Chief Compliance Officer (2004-Present), American Beacon Advisors, Inc.
John J. Okray (39)	Asst. Secretary since 2010	Deputy General Counsel (2012-Present) and Assistant General Counsel (2010-2012), American Beacon Advisors, Inc.; Asst. Secretary (2010-Present), Lighthouse Holdings, Inc.; Asst. Secretary (2010-Present), Lighthouse Holdings Parent, Inc.; Vice President, OppenheimerFunds, Inc. (2004-2010).
Sonia L. Bates (56)	Asst. Treasurer since 2011	Director, Tax and Financial Reporting (2011 - Present) and Manager, Tax and Financial Reporting (2005-2010), American Beacon Advisors, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings Parent, Inc.

* The Board has adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 72, provided, however, that the board may determine to grant one or more annual exemptions to this requirement.

** Mr. Arpey is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Arpey previously served as CEO of AMR Corp., which has a material relationship with the Manager.

*** Mr. Feld is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Feld’s law firm of Akin, Gump, Strauss, Hauer & Feld LLP has provided legal services within the past two years to the Manager and one or more of the Trust’s sub-advisors.

39

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41

Delivery of Documents

eDelivery is NOW AVAILABLE - Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Summary 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: american_beacon.funds@ambeacon.com	On the Internet: Visit our website at www.americanbeaconfunds.com
By Telephone: Institutional, Y, Investor, Advisor, Retirement Classes Call (800) 658-5811 AMR ClassSM Call (800) 345-2345	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, DC 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 202-551-8090. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	Availability of Proxy Voting Policy and Records A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Boston, Massachusetts TRANSFER AGENT Boston Financial Data Services Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Foreside Fund Services, 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 or Summary Prospectus.

American Airlines, Inc. is not responsible for investments made in the American Beacon Funds. American Beacon Funds is a service mark of AMR Corporation. American Beacon Large Cap Value Fund is a service mark of American Beacon Advisors, Inc.

AR 10/13

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

President’s Message	1
Market and Performance Overview	2-4
Schedule of Investments	7
Financial Statements	14
Notes to the Financial Statements	18
Financial Highlights	30
Additional Information	Back Cover

The Fund may invest in futures contracts, which are a type of derivative investment. Investing in derivatives could result in losing more than the amount invested. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The intrinsic value of stocks selected for the Fund may never be realized by the market, and the prices of value stocks may go down. While investing in value stocks may limit downside risk over time, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The Fund invests in small and/or mid-sized companies, which involves additional risks such as limited liquidity and greater volatility than larger companies. The Fund may participate in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds October 31, 2013

Dear Shareholders,   The past year has been a very strong period for small-cap stocks. Even though the larger-cap issues in the S&P 500 Index returned 27.18% in the 12 months under review, the Russell 2000 Index, which represents small-cap companies, beat that figure with room to spare, increasing by an impressive 36.28%.   Since much investing research suggests that, over the long term, small-cap stocks tend to outperform larger-cap stocks, it might be assumed that the past 12 months are the natural order of things. But recent history shows this isn’t the case. In fact, as recently as 2011, while the S&P 500 Index was nudging upward at 2.11%, the Russell 2000 Index was actually losing ground, declining in value by 4.18%.

That illustrates the fact that smaller stocks tend to be more volatile than larger ones. That’s just one reason that we at American Beacon Advisors believe in actively managed funds, where the judgment of seasoned investment professionals can be put to work for your portfolio. That sort of judgment can be even more critical in the realm of small-cap stocks.

• For the 12 months ended October 31, 2013, the American Beacon Small Cap Value Fund (Investor Class) returned 38.11%.

The Fund boasts six highly regarded sub-advisors, chosen to complement each other’s strategies. That manager diversification is also another factor helping mitigate the inherent volatility of the small-cap arena.

Thank you for your continued investment in the American Beacon Funds. For additional information about the Funds or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Domestic Equity Market Overview

October 31, 2013 (Unaudited)

U.S. stocks posted strong results for the year ended October 31, 2013, with the S&P 500 Index rising 27.18% over those 12 months. An improving economy, low interest rates and recovering investor sentiment helped drive the market higher, as well as the Federal Reserve’s continued quantitative easing program. Equity markets shrugged off incessant political stalemates and climbed even when the government shut down for 16 days in October. Meanwhile, robust corporate earnings growth has kept valuations in check despite the appreciation in stock prices. At current prices, the S&P 500 Index’s price-to-earnings ratio based on consensus earnings is in line with its 15-year median, yet the 10-year Treasury yield is 2.6%, well below its 15-year median.

The 12-month period began with a rough patch. During the first two weeks of November 2012, the S&P 500 Index slipped by more than 5%, as the markets reacted nervously to negotiations over the fiscal cliff. But the index quickly rebounded and gained more than 8% between that point and the end of the year, setting the stage for its gains throughout 2013.

The early part of 2013 proved to be very strong. At the end of the first quarter, the S&P 500 Index finally surpassed its pre-crash high, closing at its highest mark since October 2007. The index gained 14.1% between the first of the year and May 21. On that day, though, Federal Reserve chairman Ben Bernanke indicated that the Fed’s asset-purchasing program would be coming to an end at some point. This first mention of the so-called taper sent shock waves through the market. The S&P 500 Index dropped more than 5% in the space of a month.

Subsequently, June broke a seven-month winning streak for both the S&P 500 and the Nasdaq indexes, but the market quickly found its footing and began to rally at that point. Even with the taper-induced drop-off, by the end of June, the S&P 500 Index had posted its best first half of any year since 1998.

This performance was bolstered by a U.S. economy that appears to have formed a sound foundation with no obvious signs of a contraction in the near term. For perspective, each recession in the past 50 years has been preceded by three conditions: 1) an inverted yield curve, 2) a tight labor market and 3) a positive output gap (actual gross domestic product [GDP] expressed as a percentage of potential GDP). None of these conditions are evident today. In fact, the yield curve is steep, there is considerable slack in the labor market, and the output gap is decidedly negative.

Coming off a disappointing fourth quarter of 2012, in which GDP grew at just 0.4%, GDP bounced back to 1.1% growth in the first quarter of 2013, 2.5% in the second quarter and 2.8% in the third quarter. Unemployment continued to drop in a slow but mostly steady fashion, from 7.8% in November 2012 to 7.3% in October 2013. Although this was good news for the larger economy, the falling unemployment rate made some investors nervous, because Chairman Bernanke has indicated that the economy would be healthy enough for him to end quantitative easing once the unemployment rate reached 7.0%.

For the 12 months that ended October 31, 2013, in addition to the robust performance of the S&P 500 Index, the rally was strong in all areas of market capitalization. The Russell Midcap^® Index was up 33.79% and the Russell 2000^® Index (which represents small-cap stocks) was up 36.28%.

2

American Beacon Small Cap Value Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the Small Cap Value Fund (the “Fund”) returned 38.11% for the twelve months ended October 31, 2013, outperforming the Russell 2000^® Value Index (the “Index”) return of 32.83% and the Lipper Small-Cap Value Funds Index return of 33.56% for the same period.

Comparison of Change in Value of a $10,000 Investment

For the Period from 10/31/03 through 10/31/13

Total Returns for the Period ended 10/31/2013

	1 Year			5 Years			10 Years			Value of $10,000 10/31/03- 10/31/13
Institutional Class (1,8)		38.59	%		19.19	%		10.05	%	$	26,060
Y Class (1,2,8)		38.45	%		19.04	%		9.98	%		25,894
Investor Class (1,8)		38.11	%		18.77	%		9.72	%		25,285
Advisor Class (1,3,8)		37.86	%		18.60	%		9.50	%		24,773
Retirement Class (1,4,8)		37.47	%		18.31	%		9.36	%		24,468
A Class with sales charge (1,5,8)		29.91	%		17.21	%		9.00	%		23,680
A Class without sales Charge (1,5,8)		37.83	%		18.62	%		9.65	%		25,120
C Class with sales charge (1,6,8)		35.88	%		18.03	%		9.38	%		24,510
C Class without sales charge (1,6,8)		36.88	%		18.03	%		9.38	%		24,510
AMR Class (1,8)		38.90	%		19.49	%		10.33	%		26,727
Lipper Small-Cap Value Funds Index (7)		33.56	%		17.17	%		9.47	%		24,722
Russell 2000 Value Index (7)		32.83	%		14.84	%		8.78	%		23,207

1. Please note 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 is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is 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, visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Institutional Class from 10/31/03 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 10/31/03.

3. 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 represent the total returns achieved by the Advisor Class from 10/31/03 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 10/31/03.

5. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A 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 A Class been in existence since 10/31/03. The maximum sales charge for A Class is 5.75%.

6. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/03. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

7. 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. Russell 2000 Value Index and Russell 2000 Index are registered trademarks of the Frank Russell Company. The Lipper Small-Cap Value Funds Index tracks the results of the 30 largest mutual funds in the Lipper Small-Cap Value Funds category. Lipper is an independent mutual fund research and ranking service. One cannot directly invest in an index.

8. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, Retirement, A, C, and AMR Class shares was 0.92%, 1.01%, 1.28%, 1.42%, 1.73%, 1.54%, 2.31%, and 0.66%, 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.

3

American Beacon Small Cap Value Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Fund outperformed the Index mostly through stock selection, although sector allocation also added significant value relative to the Index.

Most of the Fund’s excess performance was attributed to holdings in the Financials sector which contributed approximately 215 basis points (2.15%) to relative performance. In the Financials sector, E*Trade Financial (up 102.8%) and Avis Budget Group (up 87.5%) were the largest contributors. Not owning Armour Residential REIT, which was down 32.9% in the Index, also positively impacted performance. Holdings in the Consumer Discretionary, Health Care and Materials sectors, also added relative value. In the Consumer Discretionary sector, Brunswick (up 91.6%) and Quiksilver (up 170.7%) were the largest contributors. Health Management Associates (up 101.5%), HealthSouth (up 61.2%) and Covance (up 83.2%) added the most value to performance in the Health Care sector. In the Materials sector, US Silicia Holdings (up 196.0%) and PolyOne (up 60.3%) contributed most to the Fund’s returns. Not owning Hecla Mining, which was down 52.2% in the Index, also added relative value. Poor stock selection in the Information Technology sector detracted value relative to the Index. Ebix (down 38.7%) was the largest detractor in the Information Technology sector. Not owning MEMC Electronic Materials, also hurt performance.

An overweight in Industrials, one of the better performing sectors in the Index, added relative value through sector allocation. Underweight positions in the Utilities and Financials sectors also contributed to the Fund’s returns.

The sub-advisors continue to focus on uncovering investment opportunities through stock selection that should benefit the Fund’s performance over the longer term.

Top Ten Holdings (% Net Assets)

Oshkosh Corp.		0.9
LifePoint Hospitals, Inc.		0.8
First Horizon National Corp.		0.8
HealthSouth Corp.		0.7
Endurance Specialty Holdings Ltd.		0.7
Brunswick Corp.		0.7
Aspen Insurance Holdings Ltd.		0.6
E*Trade Financial Corp.		0.6
Rent-A-Center, Inc.		0.6
Con-way, Inc.		0.6
Total Fund Holdings	511

Sector Allocation (% Equities)

Financials	28.9
Industrials	21.1
Consumer Discretionary	13.7
Information Technology	12.8
Materials	6.6
Health Care	6.6
Energy	6.2
Utilities	2.9
Consumer Staples	0.7
Telecommunication Services	0.4

4

American Beacon Small Cap Value Fund^SM

Fund Expenses

October 31, 2013 (Unaudited)

Fund Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments 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 May 1, 2013 through October 31, 2013.

Actual Expense

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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The “Hypothetical” lines of the 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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Fund. 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 Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Institutional Class
Actual	$	1,000.00	$	1,179.14	$	4.45
Hypothetical **	$	1,000.00	$	1,021.12	$	4.13
Y Class
Actual	$	1,000.00	$	1,178.39	$	4.94
Hypothetical **	$	1,000.00	$	1,020.67	$	4.58
Investor Class
Actual	$	1,000.00	$	1,176.95	$	6.42
Hypothetical **	$	1,000.00	$	1,019.31	$	5.96
Advisor Class
Actual	$	1,000.00	$	1,176.01	$	7.13
Hypothetical **	$	1,000.00	$	1,018.65	$	6.61
Retirement Class
Actual	$	1,000.00	$	1,173.73	$	8.71
Hypothetical **	$	1,000.00	$	1,017.19	$	8.08
A Class
Actual	$	1,000.00	$	1,175.72	$	7.24
Hypothetical **	$	1,000.00	$	1,018.55	$	6.72
AMR Class
Actual	$	1,000.00	$	1,180.09	$	3.02
Hypothetical **	$	1,000.00	$	1,022.43	$	2.80
C Class
Actual	$	1,000.00	$	1,171.28	$	11.33
Hypothetical **	$	1,000.00	$	1,014.77	$	10.51

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.81%, 0.90%, 1.17%, 1.30%, 1.59%, 1.32%, 2.07% and 0.55% for the Institutional, Y, Investor, Advisor, Retirement, A, C 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

5

American Beacon Small Cap Value Fund^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon Small Cap Value Fund:

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of the American Beacon Small Cap Value Fund (one of the funds constituting the American Beacon Funds) (the “Funds”), as of October 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the American Beacon Small Cap Value Fund at October 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Dallas, Texas

December 30, 2013

6

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
COMMON STOCK - 92.94%
CONSUMER DISCRETIONARY - 12.74%
Auto Components - 1.27%
American Axle & Manufacturing Holdings, Inc.A		1,646,109	$	30,634
Dana Holding Corp.		1,132,340		22,194
Standard Motor Products, Inc.		68,887		2,491
Tenneco, Inc.A		183,200		9,722
				65,041
Automobiles - 0.83%
Avis Budget Group, Inc.A		932,400		29,212
Hyster-Yale Materials Handling, Inc.		54,452		4,271
Thor Industries, Inc.		157,570		9,141
				42,624
Hotels, Restaurants & Leisure - 0.69%
Brinker International, Inc.		133,295		5,921
CEC Entertainment, Inc.		39,235		1,819
International Speedway Corp., Class A		79,434		2,598
Lakes Entertainment, Inc.A		150,800		632
Orient-Express Hotels Ltd., Class AA		581,940		7,746
Ruby Tuesday, Inc.A		500,100		2,966
Speedway Motorsports, Inc.		103,500		1,890
The Cheesecake Factory, Inc.		250,250		11,823
				35,395
Household Durables - 1.48%
Cavco Industries, Inc.A		59,779		3,501
Ethan Allen Interiors, Inc.		290,070		7,727
Helen of Troy Ltd.A		185,189		8,652
InvenSense, Inc.A B		499,230		8,432
Knoll, Inc.		336,880		5,532
M/I Homes, Inc.A		305,676		6,257
Matthews International Corp., Class A		38,880		1,579
Standard Pacific Corp.A		1,085,420		8,607
Whirlpool Corp.		174,200		25,435
				75,722
Internet & Catalog Retail - 0.05%
Insight Enterprises, Inc.A		116,389		2,452
Leisure Equipment & Products - 0.86%
Brunswick Corp.		781,590		35,274
Callaway Golf Co.		122,120		1,029
LeapFrog Enterprises, Inc.A B		191,800		1,642
Smith & Wesson Holding Corp.A B		187,800		2,024
Sturm Ruger & Co., Inc.B		58,000		3,794
				43,763
Media - 1.66%
Banner Corp.		29,600		1,132
DreamWorks Animation SKG, Inc., Class AA B		198,780		6,806
EW Scripps Co., Class A A		409,100		8,108
John Wiley & Sons, Inc., Class A		322,593		16,223
Meredith Corp.		179,247		9,195
New York Times Co., Class A B		1,077,920		14,908
Valassis Communications, Inc.B		1,031,430		28,221
				84,593
Multiline Retail - 0.39%
Big Lots, Inc.		518,430		18,850
Fred’s, Inc., Class A		79,540		1,289
				20,139

	Shares		Fair Value
			(000’s)
Specialty Retail - 3.70%
Aaron’s, Inc.		128,410	$	3,643
America’s Car-Mart, Inc.A		252,750		11,561
Asbury Automotive Group, Inc.A		83,220		3,999
Cato Corp., Class A		226,500		6,788
Children’s Place Retail Stores, Inc.A		193,550		10,566
Express, Inc.		627,970		14,575
Genesco, Inc.A		65,500		4,461
Jos A Bank Clothiers, Inc.A		98,140		4,709
Men’s Wearhouse, Inc.		455,223		19,257
OfficeMax, Inc.		1,050,300		15,734
Penske Automotive Group, Inc.		164,700		6,525
Pep Boys, Inc.A		864,390		11,185
Rent-A-Center, Inc.B		949,718		32,519
Rush Enterprises, Inc., Class AA		485,000		13,881
Sonic Automotive, Inc., Class A		673,440		15,004
Titan Machinery, Inc.A B		410,000		7,232
Zumiez, Inc.A		223,050		6,611
				188,250
Textiles & Apparel - 1.81%
Deckers Outdoor Corp.A B		251,280		17,296
G-III Apparel Group Ltd.A		50,200		2,847
Guess?, Inc.		969,970		30,311
Jones Group, Inc.		364,500		5,664
Oxford Industries, Inc.		96,430		6,921
Quiksilver, Inc.A		1,436,700		11,953
Skechers U.S.A., Inc., Class AA		392,340		11,433
Vera Bradley, Inc.A B		272,850		6,044
				92,469
Total Consumer Discretionary				650,448
CONSUMER STAPLES - 0.68%
Food & Drug Retailing - 0.30%
Andersons, Inc.		46,640		3,460
Casey’s General Stores, Inc.		155,436		11,328
Ingles Markets, Inc., Class A		23,000		594
				15,382
Food Products - 0.31%
Dean Foods Co.		455,620		8,885
Fresh Del Monte Produce, Inc.		150,480		4,001
USANA Health Sciences, Inc.A		37,900		2,586
				15,472
Personal Products - 0.01%
Steiner Leisure Ltd.A		11,700		655
Tobacco - 0.06%
Universal Corp.B		58,400		3,097
Total Consumer Staples				34,606
ENERGY - 5.77%
Energy Equipment & Services - 3.87%
Atwood Oceanics, Inc.A		426,447		22,657
Bristow Group, Inc.		91,740		7,382
Exterran Holdings, Inc.A		197,300		5,633
Gulf Island Fabrication, Inc.		170,870		4,309
Hercules Offshore, Inc.A		398,670		2,711
Key Energy Services, Inc.A		2,603,510		20,359
McDermott International, Inc.A		802,000		5,670
Newpark Resources, Inc.A		1,373,100		17,507
Parker Drilling Co.A		362,400		2,609

See accompanying notes

7

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Patterson-UTI Energy, Inc.		441,800	$	10,718
PDC Energy, Inc.A		58,320		3,955
Precision Drilling Corp.B		2,732,000		28,933
RPC, Inc.B		548,800		10,065
SEACOR Holdings, Inc.		58,710		5,742
Superior Energy Services, Inc.A		583,040		15,643
Tesco Corp.A		740,044		12,714
Tidewater, Inc.		148,490		8,942
Unit Corp.A		234,676		12,065
				197,614
Oil & Gas - 1.90%
Berry Petroleum Co., Class A		353,800		16,894
Bill Barrett Corp.A B		146,000		4,040
Cloud Peak Energy, Inc.		582,150		9,087
Comstock Resources, Inc.		111,100		1,901
EPL Oil & Gas, Inc.A		363,500		11,588
Helix Energy Solutions Group, Inc.A		618,600		14,636
Resolute Energy Corp.A		174,800		1,640
Stone Energy Corp.A		149,900		5,226
Synergy Resources Corp.A		726,200		7,523
Ultra Petroleum Corp.A B		210,510		3,865
Western Refining, Inc.B		227,200		7,332
WPX Energy, Inc.A		601,500		13,317
				97,049
Total Energy				294,663
FINANCIALS - 26.90%
Banks - 11.67%
1st Source Corp.		60,700		1,905
Associated Banc-Corp.		1,774,620		28,855
Astoria Financial Corp.		271,800		3,590
Bancorp, Inc.A		356,837		5,770
BancorpSouth, Inc.		458,497		10,133
Bank of Hawaii Corp.		52,100		3,021
Bank of the Ozarks, Inc.		426,250		21,091
BankUnited, Inc.		46,400		1,428
BBCN Bancorp, Inc.		195,100		2,893
Berkshire Hills Bancorp, Inc.		51,898		1,317
BOK Financial Corp.		77,570		4,750
Boston Private Financial Holdings, Inc.		587,110		6,687
Brookline Bancorp, Inc.		794,250		7,045
Cardinal Financial Corp.		265,500		4,381
Cathay General Bancorp		198,960		4,900
Central Pacific Financial Corp.		76,500		1,409
Chemical Financial Corp.		106,330		3,114
City Holding Co.B		35,710		1,625
City National Corp.		366,175		26,405
CoBiz Financial, Inc.		422,227		4,581
Columbia Banking System, Inc.		106,830		2,744
Community Bank System, Inc.		26,230		952
Community Trust Bancorp, Inc.		37,900		1,614
CVB Financial Corp.		844,593		12,280
Dime Community Bancshares, Inc.		86,255		1,411
East West Bancorp, Inc.		359,405		12,108
First Commonwealth Financial Corp.		283,600		2,464
First Financial Bancorp		167,800		2,604
First Horizon National Corp.		3,848,783		40,989
First Interstate Bancsystem, Inc.		214,000		5,374
First Midwest Bancorp, Inc.		827,542		13,762
First Niagara Financial Group, Inc.		1,270,477		14,013
FirstMerit Corp.		601,721		13,515
Flushing Financial Corp.		30,900		621

	Shares		Fair Value
			(000’s)
FNB Corp.		319,630	$	3,999
Fulton Financial Corp.		878,365		10,725
Glacier Bancorp, Inc.		449,000		12,406
Hancock Holding Co.		427,813		14,024
Hanmi Financial Corp.		391,700		6,847
Home Federal Bancorp, Inc.		172,900		2,696
Iberiabank Corp.		360,270		21,051
Independent Bank Corp.		49,080		1,761
International Bancshares Corp.		229,017		5,233
Lakeland Financial Corp.		35,410		1,260
MB Financial, Inc.		465,230		13,817
National Penn Bancshares, Inc.		384,277		3,985
NBT Bancorp, Inc.		120,363		2,933
Northwest Bancshares, Inc.		282,190		3,948
Old National Bancorp		255,840		3,720
Pinnacle Financial Partners, Inc.		161,220		4,998
Popular, Inc.A		226,200		5,712
PrivateBancorp, Inc.		192,800		4,697
Prosperity Bancshares, Inc.		421,174		26,302
Provident Financial Services, Inc.		534,580		10,018
Renasant Corp.		62,900		1,804
Republic Bancorp, Inc., Class A		45,800		1,054
S&T Bancorp, Inc.		89,100		2,185
Sandy Spring Bancorp, Inc.		58,700		1,438
State Bank Financial Corp.		861,150		14,691
Sterling Financial Corp.		153,900		4,457
Susquehanna Bancshares, Inc.		466,320		5,496
Synovus Financial Corp.		8,992,870		29,227
Taylor Capital Group, Inc.A		27,000		621
TCF Financial Corp.		158,541		2,407
UMB Financial Corp.		121,240		7,143
Umpqua Holdings Corp.B		398,965		6,531
United Community Banks, Inc.A		326,990		5,098
Valley National BancorpB		1,067,170		10,405
Washington Federal, Inc.		476,260		10,849
Washington Trust Bancorp, Inc.		67,360		2,215
Webster Financial Corp.		900,016		25,101
WesBanco, Inc.		128,543		3,779
Western Alliance BancorpA		532,818		11,269
Wintrust Financial Corp.		462,140		20,108
				595,361
Diversified Financials - 4.02%
Capitol Federal Financial, Inc.		411,650		5,216
Cash America International, Inc.		387,500		15,287
CoreLogic, Inc.A		542,540		18,050
Credit Acceptance Corp.A		69,268		8,194
E*Trade Financial Corp.A		1,928,890		32,619
Encore Capital Group, Inc.A B		244,800		11,958
ExlService Holdings, Inc.A		298,800		8,638
EZCORP, Inc., Class AA		1,010,150		15,890
Federated Investors, Inc., Class BB		238,942		6,480
Global Cash Access Holdings, Inc.A		1,307,600		10,853
Green Dot Corp., Class AA		720,000		15,451
Interactive Brokers Group, Inc., Class A		142,421		2,938
Janus Capital Group, Inc.B		1,924,535		18,995
Nelnet, Inc., Class A		128,804		5,491
NewStar Financial, Inc.A		64,030		1,115
Oritani Financial Corp.		111,800		1,813
Piper Jaffray Cos.A		263,567		9,459
Prospect Capital Corp.B		120,967		1,372
Stifel Financial Corp.A		174,800		7,158
Waddell & Reed Financial, Inc., Class A		71,717		4,429

See accompanying notes

8

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
World Acceptance Corp.A B		39,580	$	4,121
				205,527
Insurance - 7.09%
Allied World Assurance Co. Holdings AG		141,445		15,317
American Equity Investment Life Holding Co.		180,670		3,765
American Financial Group, Inc.		204,535		11,507
Amtrust Financial Services, Inc.B		203,621		7,811
Argo Group International Holdings Ltd.		220,700		9,265
Aspen Insurance Holdings Ltd.		849,780		33,151
Assurant, Inc.		37,900		2,216
Assured Guaranty Ltd.		131,110		2,688
CNO Financial Group, Inc.		1,273,830		19,846
Employers Holdings, Inc.		111,360		3,349
Endurance Specialty Holdings Ltd.		650,670		35,977
Enstar Group Ltd.A		167,943		22,829
FBL Financial Group, Inc., Class A		38,700		1,731
Global Indemnity PLCA,F		434,123		10,692
Hanover Insurance Group, Inc.		197,220		11,545
HCC Insurance Holdings, Inc.		188,860		8,621
Hilltop Holdings, Inc.A		50,000		867
Horace Mann Educators Corp.		533,700		14,783
Infinity Property & Casualty Corp.		43,738		3,000
Kemper Corp.		153,190		5,671
Maiden Capital Financing Trust		166,160		1,819
MBIA, Inc.A		89,300		1,015
Montpelier Re Holdings Ltd.		239,613		6,616
National Western Life Insurance Co., Class A		7,730		1,608
Navigators Group, Inc.A		39,693		2,232
Old Republic International Corp.		431,500		7,245
Platinum Underwriters Holdings Ltd.		196,547		12,223
Primerica, Inc.		95,400		4,097
ProAssurance Corp.		285,910		12,957
Protective Life Corp.		493,650		22,748
Renaissancere Holdings Ltd.		51,000		4,779
RLI Corp.		97,800		9,240
Safety Insurance Group, Inc.		38,030		2,080
Selective Insurance Group, Inc.		123,290		3,239
StanCorp Financial Group, Inc.		31,020		1,827
State Auto Financial Corp.		61,949		1,177
Stewart Information Services Corp.		9,800		307
Symetra Financial Corp.		1,113,865		20,863
United Fire Group, Inc.		40,700		1,290
Validus Holdings Ltd.		249,130		9,836
White Mountains Insurance Group Ltd.		17,204		10,048
				361,877
Real Estate - 4.04%
Acadia Realty TrustC		193,300		5,155
Ashford Hospitality Trust, Inc.C		173,130		2,261
Associated Estates Realty Corp.C		135,480		2,078
Brandywine Realty TrustC		410,555		5,842
Campus Crest Communities, Inc.C		1,268,950		12,702
CapLease, Inc.C		1,191,838		10,131
CBL & Associates Properties, Inc.C		203,115		4,024
Chatham Lodging TrustC		500,000		9,430
Chesapeake Lodging TrustC		535,100		12,612
Colony Financial, Inc.C		480,700		9,725
Corporate Office Properties TrustC		345,920		8,510
EastGroup Properties, Inc.C		129,520		8,245
First Potomac Realty TrustC		267,100		3,283
Forestar Group, Inc.A		86,800		1,938

	Shares		Fair Value
			(000’s)
Getty Realty Corp.C		347,460	$	6,664
Granite Real Estate Investment TrustC		145,300		5,010
HFF, Inc., Class A		148,020		3,634
Hospitality Properties TrustC		139,733		4,105
KKR Financial Holdings LLCB D G		195,098		1,933
LaSalle Hotel PropertiesC		755,900		23,471
Mack-Cali Realty Corp.C		185,686		3,818
National Health Investors, Inc.C		146,910		9,185
Pebblebrook Hotel TrustC		338,244		10,215
Pennsylvania Real Estate Investment TrustC		204,845		3,714
RLJ Lodging TrustC		948,050		23,948
Starwood Property Trust, Inc.C		411,950		10,583
Urstadt Biddle Properties, Inc., Class AC		219,300		4,329
				206,545
Real Estate Investment Trusts - 0.08%
Omega Healthcare Investors, Inc.B C		128,935		4,286
Total Financials				1,373,596
HEALTH CARE - 6.12%
Biotechnology - 0.37%
Charles River Laboratories International, Inc.A		118,794		5,846
United Therapeutics Corp.A		149,700		13,251
				19,097
Health Care Equipment & Supplies - 0.77%
Computer Programs and Systems, Inc.		131,390		7,494
CONMED Corp.		59,220		2,148
Fabrinet		86,400		1,446
Globus Medical, Inc., Class AA		253,840		4,874
Hillenbrand, Inc.		78,720		2,221
Hill-Rom Holdings, Inc.		113,934		4,704
ICU Medical, Inc.A		85,820		5,304
Integra LifeSciences Holdings Corp.A		63,885		2,925
Natus Medical, Inc.A		417,720		8,242
				39,358
Health Care Providers & Services - 4.59%
Air Methods Corp.B		228,930		10,009
Allscripts Healthcare Solutions, Inc.		904,060		12,503
Amsurg Corp.A		192,780		8,268
Community Health Systems, Inc.		227,300		9,917
Covance, Inc.A		182,300		16,272
Ensign Group, Inc.		481,249		20,492
Gentiva Health Services, Inc.		75,665		866
Hanger Orthopedic Group, Inc.A		477,840		17,537
Health Management Associates, Inc., Class A		405,600		5,200
HealthSouth Corp.		1,078,470		37,866
Kindred Healthcare, Inc.		308,800		4,286
LifePoint Hospitals, Inc.A		798,710		41,246
Magellan Health Services, Inc.A		76,510		4,491
MAXIMUS, Inc.		137,820		6,677
Omnicell, Inc.A		339,350		7,829
Owens & Minor, Inc.		152,420		5,704
Select Medical Holdings Corp.		172,770		1,465
Triple-S Management Corp., Class BA		126,961		2,261
WellCare Health Plans, Inc.A		318,000		21,204
				234,093
Pharmaceuticals - 0.39%
Jazz Pharmaceuticals PLCA,F		107,400		9,745

See accompanying notes

9

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Taro Pharmaceutical Industries Ltd.A		132,800	$	10,405
				20,150
Total Health Care				312,698
INDUSTRIALS - 19.63%
Aerospace & Defense - 2.63%
AAR Corp.		222,186		6,506
Aerovironment, Inc.A		746,660		20,242
Aircastle Ltd.		584,586		11,031
Alliant Techsystems, Inc.		196,215		21,362
Curtiss-Wright Corp.		121,852		6,066
Exelis, Inc.		564,700		9,312
Huntington Ingalls Industries, Inc.		346,300		24,777
Moog, Inc., Class AA		270,700		16,169
Triumph Group, Inc.		265,700		19,037
				134,502
Building Products - 2.13%
American Woodmark Corp.A		126,190		4,280
Apogee Enterprises, Inc.		207,617		6,494
Armstrong World Industries, Inc.		193,640		10,346
Crane Co.		417,304		26,500
Drew Industries, Inc.		107,430		5,399
Masonite International Corp.		421,400		20,585
Simpson Manufacturing Co., Inc.		381,325		13,518
Trex Co., Inc.A		281,800		19,788
Universal Forest Products, Inc.		40,100		2,122
				109,032
Commercial Services & Supplies - 5.96%
ABM Industries, Inc.		117,930		3,244
Aceto Corp.		336,950		5,374
Atlas Air Worldwide Holdings, Inc.A		57,600		2,133
Bridgepoint Education, Inc.A		162,500		3,185
Brink’s Co.		178,310		5,599
Convergys Corp.		308,790		6,096
Con-way, Inc.		780,310		32,150
CSG Systems International, Inc.		326,380		9,093
Deluxe Corp.		138,960		6,544
DeVry, Inc.		204,600		7,345
Dun & Bradstreet Corp.		101,600		11,053
Ennis, Inc.		81,580		1,448
Geo Group, Inc.C		330,172		11,645
Global Payments, Inc.		139,100		8,274
Heidrick & Struggles International, Inc.		161,500		2,991
Herman Miller, Inc.		832,890		25,270
Hudson Global, Inc.A		630,300		2,048
Interface, Inc.		567,870		11,499
ITT Educational Services, Inc.B		70,000		2,808
Kelly Services, Inc., Class A		109,800		2,290
Koppers Holdings, Inc.		83,094		3,699
Korn/Ferry InternationalA		1,059,460		25,215
McGrath Rentcorp		221,688		7,908
Mobile Mini, Inc.		605,400		21,867
Monotype Imaging Holdings, Inc.		278,650		7,864
Navigant Consulting, Inc.A		213,443		3,703
PHH Corp.A		807,900		19,430
PHI, Inc.A		31,100		1,238
Pitney Bowes, Inc.B		605,200		12,915
Quad Graphics, Inc.B		81,800		2,856
RR Donnelley & Sons Co.B		544,900		10,119
Steelcase, Inc., Class A		514,492		8,433
TAL International Group, Inc.B		101,480		4,902

	Shares		Fair Value
			(000’s)
TrueBlue, Inc.A		346,940	$	8,569
United Stationers Supply Co.		119,600		5,315
				304,122
Construction & Engineering - 1.94%
AECOM Technology Corp.A		302,300		9,607
Aegion Corp.A		589,077		12,076
Comfort Systems USA, Inc.		912,715		17,004
Dycom Industries, Inc.A		650,550		19,289
EMCOR Group, Inc.		62,775		2,326
MYR Group, Inc.A		414,500		10,964
Tutor Perini Corp.		596,977		13,701
URS Corp.		259,760		14,084
				99,051
Diversified Manufacturing - 0.24%
Barnes Group, Inc.		348,122		12,372
Electrical Equipment - 1.53%
Brady Corp., Class A		78,359		2,287
Energy XXI Bermuda Ltd.		173,860		5,052
EnerSys, Inc.		275,025		18,248
General Cable Corp.		275,964		9,087
Geospace Technologies Corp.A		122,121		11,897
Global Power Equipment Group, Inc.		160,210		3,262
Regal-Beloit Corp.		384,220		28,176
				78,009
Industrial Conglomerates - 0.22%
Carlisle Cos., Inc.		42,992		3,125
Chemed Corp.B		96,100		6,517
Standex International Corp.		27,700		1,704
				11,346
Machinery - 3.15%
American Railcar Industries, Inc.B		38,900		1,593
Astec Industries, Inc.		147,360		4,982
CIRCOR International, Inc.		120,900		8,919
Esterline Technologies Corp.A		124,191		9,955
FreightCar America, Inc.		187,660		4,174
Greenbrier Cos., Inc.A		68,000		1,805
ITT Corp.		128,700		5,113
John Bean Technologies Corp.		98,700		2,683
L.B. Foster Co., Class A		19,680		920
Meritor, Inc.A		1,249,000		8,581
Miller Industries, Inc.		231,100		4,331
Oshkosh Corp.		915,100		43,549
SPX Corp.		31,384		2,847
Terex Corp.		726,000		25,374
Titan International, Inc.		1,054,700		15,293
Trinity Industries, Inc.		361,431		18,299
Wabash National Corp.A		205,400		2,395
				160,813
Marine - 0.27%
Gulfmark Offshore, Inc., Class A		66,700		3,320
Matson, Inc.		379,800		10,289
				13,609
Real Estate - 0.25%
Amerco, Inc.		63,690		12,861
Road & Rail - 0.77%
Forward Air Corp.		380,009		15,383
Landstar System, Inc.		125,360		6,931
Ryder System, Inc.		260,615		17,156
				39,470

See accompanying notes

10

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Trading Companies & Distributors - 0.54%
Air Lease Corp.		299,600	$	8,808
MRC Global, Inc.A		388,400		10,856
WESCO International, Inc.A B		92,600		7,914
				27,578
Total Industrials				1,002,765
INFORMATION TECHNOLOGY - 11.93%
Communications Equipment - 1.87%
Anixter International, Inc.		89,100		7,617
ARRIS Group, Inc.A		1,375,368		24,563
Brocade Communications Systems, Inc.A		2,841,092		22,786
InterDigital, Inc.		396,650		15,370
IxiaA		513,470		7,281
Plantronics, Inc.		122,550		5,262
Symmetricom, Inc.A		315,000		2,259
Verint Systems, Inc.A		286,490		10,463
				95,601
Computers & Peripherals - 0.24%
Lexmark International, Inc., Class A		187,700		6,673
Mercury Systems, Inc.A		580,637		5,353
				12,026
Electronic Equipment & Instruments - 3.34%
Arrow Electronics, Inc.		261,600		12,562
AVX Corp.		505,800		6,702
Benchmark Electronics, Inc.A		176,500		4,012
Celestica, Inc.A		171,185		1,876
Ingram Micro, Inc., Class AA		653,401		15,139
Intersil Corp., Class A		476,600		5,319
Itron, Inc.A		71,371		3,045
Jabil Circuit, Inc.		385,000		8,031
Littelfuse, Inc.		203,300		17,287
Methode Electronics, Inc.		774,500		19,812
Plexus Corp.A		624,825		23,918
Sanmina Corp.A		350,385		5,102
Scansource, Inc.A		69,700		2,681
Tech Data Corp.A		128,804		6,706
TTM Technologies, Inc.A		295,545		2,586
Veeco Instruments, Inc.A		139,320		4,070
Vishay Intertechnology, Inc.A		2,577,610		31,626
				170,474
Internet Software & Services - 0.38%
Netgear, Inc.A		666,200		19,160
IT Consulting & Services - 0.93%
Booz Allen Hamilton Holding Corp.		414,100		8,199
CACI International, Inc., Class AA		75,500		5,434
CIBER, Inc.A		117,200		381
InnerWorkings, Inc.A		108,110		1,035
Mantech International Corp., Class A		128,625		3,594
Sykes Enterprises, Inc.A		198,120		3,709
SYNNEX Corp.A		362,260		22,206
Unisys Corp.A		120,000		3,162
				47,720
Semiconductor Equipment & Products - 3.93%
Advanced Energy Industries, Inc.A		271,840		5,676
ATMI, Inc.A		271,220		7,415
Brooks Automation, Inc.		1,442,900		13,910
Cirrus Logic, Inc.A B		279,590		6,271
Diodes, Inc.A		670,500		16,240
Entropic Communications, Inc.A		1,730,300		7,406

	Shares		Fair Value
			(000’s)
Fairchild Semiconductor International, Inc.A		1,245,400	$	15,779
FEI Co.		84,210		7,501
GT Advanced Technologies, Inc.A B		642,640		4,820
International Rectifier Corp.A		172,900		4,502
Kulicke & Soffa Industries, Inc.A		1,274,327		16,440
Micrel, Inc.		186,209		1,713
Microsemi Corp.		180,745		4,542
MKS Instruments, Inc.		267,390		7,925
Omnivision Technologies, Inc.A		839,500		11,761
ON Semiconductor Corp.A		1,742,500		12,302
Photronics, Inc.A		856,000		7,190
PMC - Sierra, Inc.A		755,340		4,434
QLogic Corp.A		923,940		11,411
Semtech Corp.A		303,800		9,451
Teradyne, Inc.A B		1,179,870		20,637
TriQuint Semiconductor, Inc.A		495,000		3,925
				201,251
Software - 1.24%
Cognex Corp.		172,570		5,393
Comverse, Inc.A		192,280		6,072
DST Systems, Inc.		69,210		5,867
Epiq Systems, Inc.		70,329		1,052
FARO Technologies, Inc.A		364,010		17,290
Mentor Graphics Corp.		827,190		18,265
Netscout Systems, Inc.A		327,330		9,270
				63,209
Total Information Technology				609,441
MATERIALS - 6.15%
Chemicals - 2.49%
A. Schulman, Inc.		50,690		1,679
American Vanguard Corp.		563,600		14,710
Cabot Corp.		119,003		5,547
Cytec Industries, Inc.		122,180		10,152
Huntsman Corp.		720,772		16,736
Innophos Holdings, Inc.		125,950		6,313
Innospec, Inc.		64,700		2,980
Landec Corp.A		521,850		6,111
Olin Corp.B		868,540		19,551
PolyOne Corp.		957,400		29,008
Scotts Miracle-Gro Co., Class A		247,900		14,557
				127,344
Containers & Packaging - 0.48%
KapStone Paper and Packaging Corp.		255,872		13,295
Owens-Illinois, Inc.A		350,400		11,139
				24,434
Metals & Mining - 2.84%
Allegheny Technologies, Inc.		300,450		9,945
Allied Nevada Gold Corp.A B		1,327,910		5,418
AMCOL International Corp.		255,908		8,210
AuRico Gold, Inc.B		2,389,600		9,821
Carpenter Technology Corp.		161,320		9,571
Coeur d’Alene Mines Corp.		179,969		2,197
Gibraltar Industries, Inc.A		468,139		7,495
Haynes International, Inc.		112,300		6,053
Horsehead Holding Corp.A		860,400		12,484
Kaiser Aluminum Corp.		219,770		14,823
Materion Corp.		687,200		20,485
Noranda Aluminum Holding Corp.		1,357,600		3,693
Pan American Silver Corp.		224,038		2,377

See accompanying notes

11

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
RTI International Metals, Inc.A		86,100	$	2,919
Steel Dynamics, Inc.		240,998		4,331
US Silica Holdings, Inc.B		398,350		13,871
Worthington Industries, Inc.		280,810		11,384
				145,077
Paper & Forest Products - 0.34%
Louisiana-Pacific Corp.A		476,540		8,106
Resolute Forest Products, Inc.A		278,900		4,460
Schweitzer-Mauduit International, Inc.		79,400		4,913
				17,479
Total Materials				314,334
TELECOMMUNICATION SERVICES - 0.36%
Diversified Telecommunication Services - 0.16%
EchoStar Corp., Class A A		125,700		6,029
Vonage Holdings Corp.A		588,000		2,193
				8,222
Wireless Telecommunication Services - 0.20%
Iridium Communications, Inc. A,B		143,600		866
Telephone & Data Systems, Inc.		303,263		9,455
				10,321
Total Telecommunication Services				18,543
UTILITIES - 2.66%
Electric - 1.96%
El Paso Electric Co.		301,120		10,590
Great Plains Energy, Inc.		979,210		22,953
Hawaiian Electric Industries, Inc.B		423,590		11,255
IDACORP, Inc.		241,265		12,449
NorthWestern Corp.		174,450		7,997
Ormat Technologies, Inc.B		113,500		2,959
PNM Resources, Inc.		218,910		5,236
Portland General Electric Co.		920,464		26,418
TECO Energy, Inc.		20,935		359
				100,216
Gas - 0.35%
Laclede Group, Inc.		158,030		7,438
WGL Holdings, Inc.		232,230		10,453
				17,891
Multi-Utilities - 0.35%
Avista Corp.		146,030		4,058
Westar Energy, Inc.		431,690		13,646
				17,704
Total Utilities				135,811
Total Common Stock (Cost $3,576,495)				4,746,905
SHORT-TERM INVESTMENTS - 6.22%
American Beacon U.S. Government Money Market Select Fund, Select Class E		20,000,000		20,000
JPMorgan U.S. Government Money Market Fund, Capital Class		297,502,677		297,503
Total Short-Term Investments (Cost $317,503)				317,503

	Shares		Fair Value
			(000’s)
SECURITIES LENDING COLLATERAL - 5.87%
American Beacon U.S. Government Money Market Select Fund, Select Class E		267,629,679	$	267,629
DWS Government and Agency Securities Portfolio, Institutional Class		32,053,754		32,054
Total Securities Lending Collateral (Cost $299,683)				299,683
TOTAL INVESTMENTS - 105.03% (Cost $4,193,681)				5,364,091
LIABILITIES, NET OF OTHER ASSETS - (5.03%)				(256,678	)
TOTAL NET ASSETS - 100.00%			$	5,107,413

Percentages are stated as a percent of net assets.

^A  Non-income producing security.

^B  All or a portion of this security is on loan at October 31, 2013.

^C  REIT - Real Estate Investment Trust.

^D  Limited Liability Company.

^E  The Fund is affiliated by having the same investment advisor.

^F  PLC - Public Limited Company.

^G  Master Limited Partnership.

See accompanying notes

12

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2013

Futures Contracts Open on October 31, 2013 (000’s):

Description	Type		Number of Contracts		Expiration Date		Contract Value		Unrealized Appreciation (Depreciation)
Russell 2000 Mini Index Future		Long		2,748		December, 2013	$	301,675	$	8,081
							$	301,675	$	8,081

See accompanying notes

13

American Beacon Small Cap Value Fund^SM

Statement of Assets and Liabilities

October 31, 2013 (in thousands, except share and per share amounts)

Assets:
Investments in unaffiliated securities, at fair value A C	$	5,076,462
Investments in affiliated securities, at fair value B		287,629
Deposit with brokers for futures contracts		11,493
Receivable for investments sold		47,095
Dividends and interest receivable		1,188
Receivable for fund shares sold		8,443
Prepaid expenses		87
Total assets		5,432,397
Liabilities:
Payable for investments purchased		12,799
Payable for variation margin from open futures contracts		2,364
Payable upon return of securities loaned		299,683
Payable for fund shares redeemed		1,452
Payable under excess expense reimbursement plan (Note 2)		—
Foreign currency, at fair value D		6
Management and investment advisory fees payable		6,888
Administrative service and service fees payable		1,350
Transfer agent fees payable		67
Custody and fund accounting fees payable		58
Professional fees payable		41
Prospectus and shareholder reports fees payable		205
Trustee fees payable		40
Other liabilities		31
Total liabilities		324,984
Net assets	$	5,107,413
Analysis of Net Assets:
Paid-in-capital		3,498,099
Undistributed net investment income		17,740
Accumulated net realized gain		413,084
Unrealized appreciation of investments		1,170,409
Unrealized appreciation of futures contracts		8,081
Net assets	$	5,107,413
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		122,323,085
Y Class		4,417,308
Investor Class		34,251,856
Advisor Class		3,253,317
Retirement Class		392,283
A Class		496,345
C Class		240,446
AMR Class		17,942,253
Net assets (not in thousands):
Institutional Class	$	3,430,107,382
Y Class	$	122,849,739
Investor Class	$	934,041,370
Advisor Class	$	88,032,906
Retirement Class	$	10,445,612
A Class	$	13,417,645
C Class	$	6,396,419
AMR Class	$	502,121,807

See accompanying notes

14

American Beacon Small Cap Value Fund^SM

Statement of Assets and Liabilities

October 31, 2013 (in thousands, except share and per share amounts)

Net asset value, offering and redemption price per share:
Institutional Class	$	28.04
Y Class	$	27.81
Investor Class	$	27.27
Advisor Class	$	27.06
Retirement Class	$	26.63
A Class (offering price $28.68)	$	27.03
C Class	$	26.60
AMR Class	$	27.99
A        Cost of investments in unaffiliated securities	$	3,906,052
B        Cost of investments in affiliated securities	$	287,629
C        Fair value of securities on loan	$	292,628
D        Cost of foreign currency	$	(6	)

See accompanying notes

15

American Beacon Small Cap Value Fund^SM

Statement of Operations

For the year ended October 31, 2013 (in thousands)

Investment Income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	74,376
Dividend income from affiliated securities		5
Interest income		5
Income derived from securities lending, net		2,261
Total investment income		76,647
Expenses:
Management and investment advisory fees (Note 2)		19,539
Administrative service fees (Note 2):
Institutional Class		8,399
Y Class		213
Investor Class		2,454
Advisor Class		187
Retirement Class		22
A Class		29
C Class		16
AMR Class		195
Transfer agent fees:
Institutional Class		350
Y Class		4
Investor Class		57
Advisor Class		5
Retirement Class		4
A Class		4
C Class		2
AMR Class		9
Custody and fund accounting fees		458
Professional fees		165
Registration fees and expenses		132
Service fees (Note 2):
Y Class		71
Investor Class		2,989
Advisor Class		156
Retirement Class		19
A Class		11
C Class		6
Distribution fees (Note 2):
Advisor Class		156
Retirement Class		37
A Class		18
C Class		40
Prospectus and shareholder report expenses		277
Insurance fees		14
Trustee fees		278
Other expenses		195
Total expenses		36,511
Net fees waived and expenses (reimbursed) or recouped (Note 2)		(3	)
Net expenses		36,508
Net investment income		40,139
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) from:
Investments		405,345
Commission recapture (Note 3)		121
Foreign currency transactions		6
Futures contracts		44,815
Change in net unrealized appreciation or (depreciation) from:
Investments		830,613
Futures contracts		11,445
Net gain on investments		1,292,345
Net increase in net assets resulting from operations	$	1,332,484
A       Foreign taxes	$	204

See accompanying notes

16

American Beacon Small Cap Value Fund^SM

Statement of Changes of Net Assets (in thousands)

	Year Ended October 31, 2013			Year Ended October 31, 2012
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	40,139		$	26,394
Net realized gain from investments, futures contracts, and foreign currency transactions		450,287			231,741
Change in net unrealized appreciation from investments, futures contracts, and foreign currency transactions		842,058			125,094
Net increase in net assets resulting from operations		1,332,484			383,229
Distributions to Shareholders:
Net investment income:
Institutional Class		(28,357	)		(8,493	)
Y Class		(583	)		(185	)
Investor Class		(6,427	)		(197	)
Advisor Class		(423	)		—
Retirement Class		(46	)		(14	)
A Class		(41	)		(4	)
C Class		(11	)		—
AMR Class		(4,619	)		(2,114	)
Net realized gain on investments:
Institutional Class		(61,004	)		—
Y Class		(1,275	)		—
Investor Class		(20,484	)		—
Advisor Class		(1,302	)		—
Retirement Class		(190	)		—
A Class		(120	)		—
C Class		(71	)		—
AMR Class		(8,358	)		—
Net distributions to shareholders		(133,311	)		(11,007	)
Net increase (decrease) in net assets from capital share transactions		566,911			(123,312	)
Net increase in net assets		1,766,084			248,910
Net Assets:
Beginning of period		3,341,329			3,092,419
End of Period *	$	5,107,413		$	3,341,329
*  Includes undistributed net investment income of	$	17,740		$	19,858

See accompanying notes

17

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), which is comprised of twenty-seven Funds, 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
A Class	General public and investors investing through an intermediary with applicable sales charges, which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”)
C Class	General public and investors investing through an intermediary with applicable sales charges, which may include a CDSC
AMR Class	Investors in the tax-exempt retirement and benefit plans of the Manager, AMR Corporation, and its affiliates

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include administrative service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.

New Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments in the ASU enhance disclosures about offsetting of financial assets and liabilities to enable investors to understand the effect of these arrangements on a fund’s financial position. In January 2013, FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. The amendments in ASU No. 2013-01 clarify the scope of disclosures required by ASU No. 2011-11. These ASUs are effective for annual periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Fund believes the adoption of these ASUs will not have a material impact on its financial statement disclosures.

2. Transactions with Affiliates

Management Agreement

The Trust and the Manager are parties to a Management Agreement that obligates the Manager to provide or oversee the provision of all investment advisory, fund management, and securities lending services. Investment assets of the Fund are managed by multiple investment advisors which have entered into separate investment advisory agreements with the Manager. As compensation for performing the duties required under the Management Agreement,

18

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

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 unaffiliated investment advisors hired by the Manager to direct investment activities of the Fund. Management fees paid during the year ended October 31, 2013 were as follows (dollars in thousands):

Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Net Amounts Retained by Manager
	0.47	%	$	19,539	$	17,208	$	2,331

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, a fee up to 25% of such loan fees. This fee is included in Income derived from securities lending and Management and investment advisory fees on the Statement of Operations. During the year ended October 31, 2013, securities lending fees paid to the Manager were $260,101.

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, 0.40% of the average daily net assets of the A and C 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, Retirement, A, and C Classes of the Fund, has adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no 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.

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, Retirement, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes, 0.50% of the average daily net assets of the Retirement Class, and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, Advisor, Retirement, A, and C 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, 0.15% of the average daily net assets of the A and C Classes, 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 $12,970 for the year ended October 31, 2013.

19

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

Investment in Affiliated Funds

The Fund 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 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 Management and Administrative Service fees totaling 0.10% of the average daily net assets of the Select Funds. During the year ended October 31, 2013, the Manager earned fees from the Select Funds totaling $16,888 on the Fund’s direct investment in the Select Funds and $218,552 from the Fund’s securities lending collateral invested in the Select Funds.

Interfund Lending Program

Pursuant to an exemptive order by the Securities and Exchange Commission (“SEC”), the Fund, along with other registered investment companies having management contracts with the Manager, may participate in an interfund lending program as a borrower. This program provides an alternative credit facility allowing the Fund to borrow from other participating Funds. During the year ended October 31, 2013, 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 year ended October 31, 2013, the manager contractually reimbursed $2,549 for the A Class and $672 for the C Class. Of these amounts $251 was payable to the Manager at October 31, 2013. The reimbursed expenses will expire in 2016. The carryover of excess expenses potentially reimbursable to the Manager but not recorded as a liability is $5,000 expiring in 2015. The Manager recouped $1 of excess carryover expenses expiring in 2014 from the Y Class. The Fund did not record a liability for potential reimbursements due to the current assessment that a reimbursement is unlikely.

Sales Commissions

The Fund’s distributor, Foreside Fund Services, LLC (“Foreside”), may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. For the year ended October 31, 2013, Foreside collected $8,573 from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2013, there were no CDSC fees collected for Class A Shares.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2013, $1,562 in CDSC fees were collected for the Fund.

3. Security Valuation and Fair Value Measurements

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, including exchange traded funds (“ETFs”) 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.

20

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

Investments in open-end mutual funds are valued at the closing net asset value (“NAV”) 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 fair 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 Trust’s Board of Trustees (the “Board”).

Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker, an amount of cash or U.S. Government and Agency Obligations in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized, but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statement of Assets and Liabilities.

Valuation Inputs

Various inputs may be used to determine the fair value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1 -	Quoted prices in active markets for identical securities.
Level 2 -	Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.
Level 3 -	Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Common stocks and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy. Short-term investments having a maturity of 60 days or less are generally valued at amortized cost which approximates fair value. These investments are categorized as Level 2 of the fair value hierarchy.

The Fund’s investments are summarized by level based on the inputs used to determine their values. U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) also requires all transfers between any levels to be disclosed. The end of period timing recognition has been adopted for the transfers between levels of each Fund’s assets and liabilities. During the year ended October 31, 2013, there were no transfers between levels. As of October 31, 2013, the investments were classified as described below (in thousands):

21

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

	Level 1		Level 2		Level 3		Total
Common Stock*	$	4,746,905	$	—	$	—	$	4,746,905
Short-Term Investments - Money Markets		317,503		—		—		317,503
Securities Lending Collateral invested in Money Market Funds		299,683		—		—		299,683
Total Investments in Securities	$	5,364,091	$	—	$	—	$	5,364,901
Financial Derivative Instruments
Futures Contracts	$	8,081	$	—	$	—	$	8,081

* Refer to the Schedule of Investments for industry information.

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 NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Fund. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

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. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Other

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain 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.

22

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

4. Securities and Other Investments

Real Estate Investment Trusts

The Fund may own shares of real estate investment trusts (“REITS”) which report information on the source of their distributions annually. The Fund re-characterizes distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year. These re-characterizations are not recorded for financial statement purposes, but as an adjustment to the calculation of taxable income.

Other Investment Company Securities and Other Exchange Traded Products

The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, exchange-traded notes (“ETNs”), unit investment trusts, and other investment companies of the Trust. The Fund may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, a Fund becomes a shareholder of that investment company. As a result, Fund shareholders indirectly will bear a Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses Fund shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

5. Financial Derivative Instruments

Futures Contracts

Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Fund may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.

Upon entering into a futures contract, the Fund is required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as Cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

For the six months ended October 31, 2013, the Fund entered into future contracts primarily for return enhancement, hedging and exposing cash to markets.

23

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

The Fund’s average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at period end.

	Average Futures Contracts Outstanding
For the Quarter Ended	April 30, 2013		October 31, 2013
Small Cap Value Fund		99		119

The following is a summary of the Fund’s derivative financial instruments categorized by risk exposure (in thousands) ^(1) (2):

Fair Values of derivative financial instruments as of October 31, 2013:

Statement of Assets and Liabilities	Derivatives	Fair Value
Unrealized appreciation of futures contracts	Equity Contracts	$	8,081

The effect of derivative financial instruments during the year ended October 31, 2013:

Statement of Operations	Derivatives	Balance
Net realized gain (loss) from futures contracts	Equity Contracts	$	44,815
Change in net unrealized appreciation or (depreciation) from futures contracts	Equity Contracts		11,445

⁽¹⁾  See Note 3 in the Notes to Financial Statements for additional information.

⁽²⁾  The volume of derivative activity described above is reflective of the derivative activity through the current period of operations.

6. Principal Risks

In the normal course of business the Fund trades financial instruments and enters into financial transactions where risk of potential loss exists. Security values fluctuate (market risk) and may decline due to factors affecting securities markets in general, particular industries represented in the securities markets or conditions specifically related to a particular company. Failure of the other party to a transaction to perform (credit and counterparty risk), for example by not making principal and interest payments when due, reduces the value of the issuer’s debt and could reduce the Fund’s income. Similar to credit risk, the Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which the Fund has unsettled or open transactions will fail to make required payments or otherwise comply with the terms of the instrument, transaction or contract. The potential loss could exceed the value of the financial assets recorded in the financial statements. Some of the Fund’s investments may be illiquid and the Fund may not be able to vary the portfolio investments in response to changes in economic and other conditions. If a Fund is required to liquidate all or a portion of its investments quickly, the Fund may realize significantly less than the value at which it previously recorded those investments.

Market Risks

The Fund’s investments in financial derivatives and other financial instruments expose the Fund to various risks such as, but not limited to, interest rate, foreign currency and equity risks.

Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income’s market price to interest rate (i.e. yield) movements.

If the Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, they will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest

24

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Fund’s investments in foreign currency denominated securities may reduce the returns of the Fund.

The fair values of equities, such as common stocks and preferred securities or equity related investments such as futures, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

7. Federal Income and Excise Taxes

It is the policy of the Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, the Fund is treated as a single entity for the purpose of determining such qualification.

The Fund does not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2013 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. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

A Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation or depreciation, as applicable, as the income is earned or capital gains are recorded.

The tax character of distributions paid were as follows (in thousands):

	Year Ended October 31, 2013		Year Ended October 31, 2012
Distributions paid from:
Ordinary income*
Institutional Class	$	28,357	$	8,493
Y Class		583		185
Investor Class		6,427		197
Advisor Class		423		—
Retirement Class		46		14
A Class		41		4
C Class		11		—
AMR Class		4,619		2,114
Long-Term Capital gain
Institutional Class		61,004		—
Y Class		1,275		—
Investor Class		20,484		—
Advisor Class		1,302		—
Retirement Class		190		—
A Class		120		—
C Class		71		—
AMR Class		8,358		—
Total distributions paid	$	133,311	$	11,007

* For tax purposes, short-term capital gains are considered ordinary income distributions.

25

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

As of October 31, 2013, the components of distributable earnings or (deficits) on a tax basis were as follows (in thousands):

Cost basis of investments for federal income tax purposes	$	4,229,436
Unrealized appreciation		1,225,683
Unrealized depreciation		(91,028	)
Net unrealized appreciation or (depreciation)		1,134,655
Undistributed ordinary income		138,320
Accumulated long-term gain or (loss)		328,258
Other temporary differences		8,081
Distributable earnings or (deficits)	$	1,609,314

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 or 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. GAAP 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 foreign currency and income from real estate investment securities as of October 31, 2013 (in thousands):

Paid-in-capital	$	(59	)
Undistributed net investment income (loss)		(1,750	)
Accumulated net realized gain (loss)		1,809
Unrealized appreciation or (depreciation) of investments and futures contracts		—

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”) was enacted, which changed various technical rules governing the tax treatment of RICs. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the RIC MOD, each Fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

Finally, the RIC MOD contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions. Except for the simplification provisions related to RIC qualification, the RIC MOD is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.

For the year ended October 31, 2013 the Fund did not have capital loss carryovers.

8. Investment Transactions

The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the year ended October 31, 2013 were $2,213,166 and $1,906,487, respectively (in thousands).

26

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

A summary of the Fund’s transactions in the USG Select Fund for the year ended October 31, 2013 is set forth below (in thousands):

	Affiliate		October 31, 2012 Shares/Fair Value		Purchases		Sales		October 31, 2013 Shares/Fair Value		Dividend Income
Direct		USG Select Fund	$	5,000	$	15,000	$	—	$	20,000	$	5
Securities Lending		USG Select Fund		155,060		886,178		773,609		267,629		—

9. Securities Lending

The Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.

To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds, and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statements of Assets and Liabilities as a payable.

Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retained 80%, 10% and 10%, respectively, of the income generated from securities lending.

While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.

Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience 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 October 31, 2013, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):

Fair Value of Securities on Loan		Non-Cash Collateral		Cash Collateral Posted by Borrower
$	292,628	$	—	$	299,683

27

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

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.

10. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund (dollars and shares in thousands):

For the Year Ended October 31, 2013

	Institutional Class						Y Class						Investor Class						Advisor Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		37,159		$	902,916			3,218		$	79,916			8,515		$	204,966			1,651		$	39,639
Reinvestment of dividends		4,074			87,155			76			1,609			1,280			26,702			83			1,725
Shares redeemed		(22,965	)		(558,334	)		(743	)		(18,501	)		(12,103	)		(280,730	)		(678	)		(15,889	)
Net increase (decrease) in shares outstanding		18,268		$	431,737			2,551		$	63,024			(2,308	)	$	(49,062	)		1,056		$	25,475

	Retirement Class						A Class						C Class						AMR Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		241		$	5,651			379		$	9,237			137		$	3,248			6,574		$	163,072
Reinvestment of dividends		12			236			8			151			4			80			609			12,977
Shares redeemed		(178	)		(3,948	)		(90	)		(2,136	)		(17	)		(396	)		(3,840	)		(92,435	)
Net increase in shares outstanding		75		$	1,939			297		$	7,252			124		$	2,932			3,343		$	83,614

	Totals
	Shares			Amount
Shares sold		57,874		$	1,408,645
Reinvestment of dividends		6,146			130,635
Shares redeemed		(40,614	)		(972,369	)
Net increase in shares outstanding		23,406		$	566,911

For the Year Ended October 31, 2012

	Institutional Class						Y Class						Investor Class						Advisor Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		23,720		$	479,712			849		$	16,953			6,070		$	119,765			1,164		$	22,488
Reinvestment of dividends		434			8,287			10			185			10			194			—			—
Shares redeemed		(18,398	)		(371,650	)		(560	)		(11,286	)		(15,772	)		(310,055	)		(786	)		(15,262	)
Net increase (decrease) in shares outstanding		5,756		$	116,349			299		$	5,852			(9,692	)	$	(190,096	)		378		$	7,226

	Retirement Class						A Class						C Class						AMR Class
	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		273		$	5,134			157		$	3,079			68		$	1,319			7,278		$	139,525
Reinvestment of dividends		1			14			—			4			—			—			111			2,114
Shares redeemed		(57	)		(1,121	)		(57	)		(1,158	)		(13	)		(260	)		(10,896	)		(211,293	)
Net increase (decrease) in shares outstanding		217		$	4,027			100		$	1,925			55		$	1,059			(3,507	)	$	(69,654	)

28

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2013

	Totals
	Shares			Amount
Shares sold		39,579		$	787,975
Reinvestment of dividends		566			10,798
Shares redeemed		(46,539	)		(922,085	)
Net decrease in shares outstanding		(6,394	)	$	(123,312	)

29

American Beacon Small Cap Value Fund ^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class															Y Class
	Year Ended October 31,															Year Ended October 31,												August 3 to Oct. 31,
	2013			2012			2011A			2010			2009			2013			2012			2011A			2010			2009
Net asset value, beginning of period	$	21.04		$	18.75		$	17.84		$	14.39		$	12.53		$	20.89		$	18.66		$	17.76		$	14.37		$	14.03
Income from investment operations:
Net investment income (loss)		0.25			0.17			0.08			0.08			0.10			0.22			0.15			0.06			0.14			0.00
Net gains (losses) from investments (both realized and unrealized)		7.60			2.20			0.92			3.46			1.96			7.55			2.19			0.92			3.36			0.34
Total income (loss) from investment operations		7.85			2.37			1.00			3.54			2.06			7.77			2.34			0.98			3.50			0.34
Less distributions:
Dividends from net investment income		(0.27	)		(0.08	)		(0.09	)		(0.09	)		(0.20	)		(0.27	)		(0.11	)		(0.08	)		(0.11	)		—
Distributions from net realized gains on securities		(0.58	)		—			—			—			—			(0.58	)		—			—			—			—
Total distributions		(0.85	)		(0.08	)		(0.09	)		(0.09	)		(0.20	)		(0.85	)		(0.11	)		(0.08	)		(0.11	)		—
Net asset value, end of period	$	28.04		$	21.04		$	18.75		$	17.84		$	14.39		$	27.81		$	20.89		$	18.66		$	17.76		$	14.37
Total return B		38.59	%		12.71	%		5.57	%		24.71	%		16.97	%		38.45	%		12.58	%		5.49	%		24.44	%		2.42	%E
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	3,430,107		$	2,189,761		$	1,843,285		$	1,470,084		$	1,040,805		$	122,850		$	38,982		$	29,234		$	931		$	1
Ratios to average net assets:
Expenses before (reimbursements) or recoupments		0.82	%		0.82	%		0.82	%		0.81	%		0.84	%		0.91	%		0.91	%		0.94	%		0.91	%		1.11	%C
Expenses, net of (reimbursements) or recoupments		0.82	%		0.82	%		0.82	%		0.81	%		0.84	%		0.91	%		0.91	%		0.94	%		0.91	%		1.11	%C
Net investment income (loss), before (reimbursements) or recoupments		1.01	%		0.87	%		0.47	%		0.52	%		0.87	%		0.74	%		0.77	%		0.30	%		0.39	%		0.03	%C
Net investment income (loss), net of (reimbursements) or recoupments		1.01	%		0.87	%		0.47	%		0.52	%		0.87	%		0.74	%		0.77	%		0.30	%		0.39	%		0.03	%C
Portfolio turnover rate		48	%		51	%		59	%		59	%		61	%		48	%		51	%		59	%		59	%		61	%D

^A On November 30, 2010, Metropolitan West Capital Management LLC was terminated and ceased managing assets of the Small Cap Value Fund.

^B Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^C Annualized.

^D Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.

^E Not annualized.

30

American Beacon Small Cap Value Fund ^SM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class															Advisor Class
Year Ended October 31,															Year Ended October 31,
2013			2012			2011A			2010			2009			2013			2012			2011A			2010			2009
$	20.47		$	18.23		$	17.40		$	14.05		$	12.22		$	20.35		$	18.15		$	17.33		$	13.97		$	12.13
	0.18			0.11			0.02			0.03			0.08			0.14			0.06			(0.01	)		0.01			0.06
	7.38			2.13			0.88			3.37			1.91			7.34			2.14			0.89			3.35			1.90
	7.56			2.24			0.90			3.40			1.99			7.48			2.20			0.88			3.36			1.96
	(0.18	)		0.00			(0.07	)		(0.05	)		(0.16	)		(0.19	)		—			(0.06	)		—			(0.12	)
	(0.58	)		—			—			—			—			(0.58	)		—			—			—			—
	(0.76	)		0.00			(0.07	)		(0.05	)		(0.16	)		(0.77	)		—			(0.06	)		—			(0.12	)
$	27.27		$	20.47		$	18.23		$	17.40		$	14.05		$	27.06		$	20.35		$	18.15		$	17.33		$	13.97
	38.11	%		12.31	%		5.20	%		24.21	%		16.59	%		37.93	%		12.12	%		5.07	%		24.05	%		16.41	%
$	934,041		$	748,550		$	843,400		$	911,737		$	719,239		$	88,033		$	44,731		$	33,032		$	32,295		$	28,333
	1.18	%		1.18	%		1.17	%		1.18	%		1.15	%		1.31	%		1.32	%		1.32	%		1.32	%		1.34	%
	1.18	%		1.18	%		1.17	%		1.18	%		1.15	%		1.31	%		1.32	%		1.32	%		1.32	%		1.31	%
	0.73	%		0.51	%		0.12	%		0.17	%		0.59	%		0.46	%		0.35	%		(0.02	)%		0.03	%		0.44	%
	0.73	%		0.51	%		0.12	%		0.17	%		0.59	%		0.46	%		0.35	%		(0.02	)%		0.03	%		0.48	%
	48	%		51	%		59	%		59	%		61	%		48	%		51	%		59	%		59	%		61	%

31

American Beacon Small Cap Value Fund ^SM

Financial Highlights

(For a share outstanding throughout the period)

	Retirement Class															A Class
	Year Ended October 31,												May 1 to Oct. 31,			Year Ended October 31,									May 17 to Oct. 31,
	2013			2012			2011A			2010			2009			2013			2012			2011A			2010
Net asset value, beginning of period	$	20.05		$	18.01		$	17.23		$	13.95		$	11.58		$	20.35		$	18.19		$	17.39		$	17.33
Income from investment operations:
Net investment income (loss)		0.09			0.06			0.02			0.04			(0.02	)		0.16			0.08			0.03			0.00
Net gains (losses) from investments (both realized and unrealized)		7.21			2.05			0.81			3.28			2.39			7.30			2.12			0.83			0.06
Total income (loss) from investment operations		7.30			2.11			0.83			3.32			2.37			7.46			2.20			0.86			0.06
Less distributions:
Dividends from net investment income		(0.14	)		(0.07	)		(0.05	)		(0.04	)		—			(0.20	)		(0.04	)		(0.06	)		—
Distributions from net realized gains on securities		(0.58	)		—			—			—			—			(0.58	)		—			—			—
Total distributions		(0.72	)		(0.07	)		(0.05	)		(0.04	)		—			(0.78	)		(0.04	)		(0.06	)		—
Net asset value, end of period	$	26.63		$	20.05		$	18.01		$	17.23		$	13.95		$	27.03		$	20.35		$	18.19		$	17.39
Total return B		37.52	%		11.77	%		4.79	%		23.82	%		20.47	%E		37.83	%		12.11	%		4.92	%		0.35	%E
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	10,446		$	6,366		$	1,817		$	360		$	1		$	13,418		$	4,064		$	1,822		$	18
Ratios to average net assets:
Expenses before reimbursements		1.60	%		1.63	%		1.62	%		1.54	%		1.53	%C		1.35	%		1.44	%		1.57	%		1.28	%C
Expenses, net of reimbursements		1.60	%		1.63	%		1.62	%		1.54	%		1.53	%C		1.32	%		1.34	%		1.57	%		1.28	%C
Net investment income (loss), before reimbursements		0.29	%		0.02	%		(0.35	)%		(0.20	)%		(0.28	)%C		0.30	%		0.21	%		(0.32	)%		0.01	%C
Net investment income (loss), net of reimbursements		0.29	%		0.02	%		(0.35	)%		(0.20	)%		(0.28	)%C		0.34	%		0.32	%		(0.32	)%		0.01	%C
Portfolio turnover rate		48	%		51	%		59	%		59	%		61	%D		48	%		51	%		59	%		59	%F

^A On November 30, 2010, Metropolitan West Capital Management LLC was terminated and ceased managing assets of the Small Cap Value Fund.

^B Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^C Annualized.

^D Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.

^E Not annualized.

^F Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

32

American Beacon Small Cap Value Fund ^SM

Financial Highlights

(For a share outstanding throughout the period)

C Class												AMR Class
Year Ended October 31,									Sept. 1 to Oct. 31,			Year Ended October 31,
2013			2012			2011A			2010			2013			2012			2011A			2010			2009
$	20.07		$	18.04		$	17.37		$	15.62		$	21.00		$	18.71		$	17.76		$	14.32		$	12.48
	0.03			(0.03	)		(0.04	)		(0.01	)		0.23			0.34			0.13			0.18			0.11
	7.17			2.06			0.74			1.76			7.66			2.08			0.92			3.38			1.97
	7.20			2.03			0.70			1.75			7.89			2.42			1.05			3.56			2.08
	(0.09	)		—			(0.03	)		—			(0.32	)		(0.13	)		(0.10	)		(0.12	)		(0.24	)
	(0.58	)		—			—			—			(0.58	)		—			—			—			—
	(0.67	)		—			(0.03	)		—			(0.90	)		(0.13	)		(0.10	)		(0.12	)		(0.24	)
$	26.60		$	20.07		$	18.04		$	17.37		$	27.99		$	21.00		$	18.71		$	17.76		$	14.32
	36.88	%		11.25	%		4.06	%		11.20	%E		38.95	%		13.00	%		5.85	%		25.00	%		17.30	%
$	6,396		$	2,330		$	1,106		$	6		$	502,122		$	306,545		$	338,723		$	320,715		$	271,066
	2.09	%		2.21	%		2.60	%		2.69	%C		0.56	%		0.56	%		0.56	%		0.57	%		0.59	%
	2.07	%		2.10	%		2.60	%		2.10	%C		0.56	%		0.56	%		0.56	%		0.57	%		0.59	%
	(0.41	)%		(0.54	)%		(1.36	)%		(1.86	)%C		1.26	%		1.14	%		0.72	%		0.76	%		1.11	%
	(0.39	)%		(0.43	)%		(1.36	)%		(1.28	)%C		1.26	%		1.14	%		0.72	%		0.76	%		1.11	%
	48	%		51	%		59	%		59	%F		48	%		51	%		59	%		59	%		61	%

33

American Beacon Funds ^SM

Privacy Policy and Federal Tax Information

October 31, 2013 (Unaudited)

Privacy Policy

The American Beacon Funds recognize and respect the privacy of our shareholders. We are providing this notice to you so you will understand how shareholder information may be collected and used.

We may collect nonpublic personal information about you from one or more of the following sources:

• information we receive from you on applications or other forms;

• information about your transactions with us or our service providers; and

• information we receive from third parties.

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

We restrict access to your nonpublic personal information to those employees or service providers who need to know that information to provide products or services to you. To ensure the confidentiality of your nonpublic personal information, we maintain safeguards that comply with federal standards.

Federal Tax Information

Certain tax information regarding the Fund is required to be provided to shareholders based upon the Fund’s income and distribution for the taxable year ended October 31, 2013. The information and distributions reported herein may differ from information and distribution taxable to the shareholders for the calendar year ended December 31, 2013.

The Fund designated the following items with regard to distributions paid during the fiscal year ended October 31, 2012. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends Received Deduction	79.14	%
Qualified Dividend Income	100.00	%

The Small Cap Value Fund designated $92,808,449 as long term capital gains distributions for the year ended October 31, 2013.

Shareholders will receive notification in January 2014 of the applicable tax information necessary to prepare their 2013 income tax returns.

34

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

At its May 29, 2013 meeting, the Board of Trustees (“Board”) considered the renewal of the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Beacon Trust”) on behalf of each of their series (collectively, the “Funds”) and the renewal of each investment advisory agreement between the Manager and a subadvisor (each an “Investment Advisory Agreement”). The Management Agreement and the Investment Advisory Agreements are collectively referred to herein as the “Agreements.” In preparation for the Board’s consideration to renew and approve these Agreements, the Board and its Investment Committee undertook steps to gather and consider information furnished by the Manager, the subadvisors, Lipper, Inc. (“Lipper”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and each subadvisor.

In addition, the Board’s Investment Committee worked with Lipper to obtain relevant comparative information regarding the performance, fees and expenses of the Funds. The Investment Committee, for the benefit of all Trustees, sponsored a separate meeting on May 10, 2013 to consider the information provided by Lipper. Further, the Board took into consideration information furnished for the Board’s review and consideration throughout the year at regular Board and Investment Committee meetings, as well as information specifically prepared in connection with the renewal process.

In connection with the Board’s consideration of the Management Agreement and each Investment Advisory Agreement, the Trustees received and evaluated such information as they deemed necessary. The information requested by the Board included, among other information, the following materials. For various reasons, a subadvisor may not have provided responses to each requested item. In these instances, the Board considered the materials that were received from such subadvisor. References herein to the “firm” refer to the Manager and/or each applicable subadvisor.

• a description of any significant changes (actual or anticipated) to principal activities, personnel, services provided to the Funds, or any other area, including how these changes might affect the Funds;

• a copy of the firm’s most recent audited or unaudited financial statements, as well as Parts 1 and 2 of its Form ADV registration statement with the SEC;

• a summary of any material pending or anticipated litigation or regulatory proceedings involving the firm or its personnel, including the results of any recent regulatory examination or independent audit;

• a comparison of the performance of that portion of Fund assets managed or to be managed by each firm with the performance of other similar accounts managed by the firm, including a discussion of relative performance versus a peer group average and any actual or potential remedial measures if the firm’s longer-term performance was materially below that of the peer group;

• any actual or anticipated economies of scale in relation to the services the firm provides or will provide to each Fund and whether the current fee rates charged or to be charged to each Fund reflect these economies of scale for the benefit of the Fund’s investors;

• an analysis of compensation, including a comparison with fee rates charged to other clients for which similar services are provided, any proposed changes to the fee rate schedule, if applicable, and the effect of any fee waivers;

• a description of any payments made or to be made by the subadvisors to the Manager to support a Fund’s marketing efforts;

• a copy of the firm’s proxy voting policies and procedures and, if applicable, the name of the third-party voting service used by the firm;

• an evaluation of any other benefits to the firm or Funds as a result of their relationship, if any;

• confirmation that the firm’s financial condition would not impair its ability to provide high-quality advisory services to the Funds;

• a description of the scope of portfolio management services provided or to be provided to the Funds, including whether such services differ from the services provided to other clients, including other registered investment companies, and any advantages or disadvantages that might accrue to the Funds due to the firm’s involvement in other activities;

• a description of the personnel who are or will be assigned primary responsibility for managing the Funds, including any changes during the past year, and a discussion of the adequacy of current and projected staffing levels to service the Funds;

• a description of the basis upon which portfolio managers are compensated, including any “incentive” arrangements, and a description of the oversight mechanisms used to prevent a portfolio manager whose compensation is tied to performance of a Fund from taking undue risks;

• a description of the firm’s practices in monitoring the quality of portfolio holdings and in reviewing portfolio valuation, including any fair value determinations;

• a description of the firm’s use of derivatives, short positions, leveraged trading strategies or other similar trading strategies for the Funds;

• a discussion regarding the firm’s participation in third-party and/or proprietary “soft dollar” arrangements, if any, or other brokerage allocation policies with respect to Fund transactions;

• a discussion of the firm’s methodology for obtaining best execution, including any plans to improve the quality of execution in the upcoming year, and the use of any affiliated broker-dealers;

• a description of any actual or potential conflicts of interest anticipated in managing Fund assets;

• a discussion of whether the firm has identified any investment or operational matters that likely present a high risk in managing Fund assets;

• a description of the firm’s criteria for assessing counterparties and counterparty risk to the extent the firm enters into transactions with counterparties on a Fund’s behalf;

35

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

• a description of trade allocation procedures among accounts managed by the firm;

• a discussion of whether the firm utilizes “commission recapture” or “directed brokerage” arrangements for the benefit of the Funds or “step-out” transactions;

• a discussion of whether the firm receives, or anticipates receiving, other compensation, including any payment for electronic communication network liquidity rebates with respect to the Funds;

• a certification by the firm regarding the reasonable design of its compliance program;

• a summary of the results of the firm’s most recent annual review of its compliance program and a discussion of any material compliance problems encountered by a subadvisor since the most recent annual review;

• confirmation that the firm is prepared to provide to the Manager, directly or in summary form, any regulatory review comments that could have a material impact on services provided to the Funds;

• a discussion of whether, due to the firm’s trading activities on behalf of the Funds, the firm would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendments to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt;

• information regarding the firm’s code of ethics, insider trading policy and disaster recovery plan, including a description of any material changes thereto and a related certification of compliance by the firm;

• a description of the firm’s affiliation with any broker-dealer;

• a discussion of any anticipated change in the firm’s controlling persons; and

• verification of the firm’s insurance coverage with regards to the services provided to the Funds.

In addition to the foregoing, the Manager provided the following information specific to the renewal of the Management Agreement:

• a comparison of the performance of a share class of each Fund to comparable investment companies and appropriate indices, including comments on the relative performance of, as applicable, each subadvisor and each Fund versus the respective peer group average;

• a discussion, if applicable, of any underperformance by a subadvisor relative to its peer group and what, if any, remedial measures the Manager has or intends to take;

• a comparison of advisory fee rates and expense ratios for comparable mutual funds;

• a profit/loss analysis of the Manager;

• an analysis of any material complaints received from Fund shareholders;

• a description of the extent to which the Manager monitors the investment activities and financial conditions of each subadvisor to the Funds;

• a discussion of whether the Manager provides different types or levels of administrative and accounting related services to certain Funds;

• a description of the Manager’s distribution activities with respect to promoting sales of Fund shares, including any revenue sharing practices;

• a description of arrangements pursuant to which certain firms may make any direct or indirect payments to partially reimburse the Manager for its marketing or other expenses on behalf of the Funds;

• a description of the Manager’s securities lending practices and the fees received from such practices;

• a discussion of any rebate arrangements between the Manager and a service provider to the Funds pursuant to which the Manager receives direct or indirect benefits from the service provider;

• a description of the portfolio turnover rate for each Fund and, as applicable, each subadvisor to a Fund;

• a description of how expenses that are not readily identifiable to a particular Fund are allocated; and

• confirmation that the Manager complies with applicable CFTC and National Futures Association rules and requirements for applicable Funds and a discussion regarding whether, due to the Manager’s trading activities on behalf of other Funds, the Manager would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendment to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt.

In connection with the Management Agreement and each Investment Advisory Agreement, the Board also obtained an analysis provided by Lipper that compared: (i) investment performance of each Fund versus comparable investment companies and appropriate indices; (ii) total Fund expenses of each Fund versus comparable mutual funds; and (iii) each Fund’s investment advisory fee rate versus comparable mutual funds. For certain Funds, the Board also considered information regarding the performance of the Manager and individual subadvisors with respect to their allocated portions of a Fund’s portfolio, net of management or subadvisory fees, as applicable, but not other Fund expenses. For each Fund with more than one class of shares, the class of shares used for comparative purposes was the class with the longest performance history, which in most cases was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

36

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

Provided below is an overview of the primary factors the Trustees considered at the Investment Committee meeting on May 10, 2013 at which the Trustees reviewed the investment performance of the Manager and each subadvisor and the primary factors considered by the Board at its May 29, 2013 meeting at which the Board considered the renewal of the Management Agreement and Investment Advisory Agreements.

The Board did not identify any particular information that was most relevant to its consideration to renew or approve each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal and approval of each Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of the contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Funds and their shareholders.

Considerations With Respect to the Renewal of the Management Agreement and each Investment Advisory Agreement

In determining whether to renew the Management Agreement and each Investment Advisory Agreement on behalf of the Funds, the Trustees considered the best interests of each Fund separately. While the Management Agreement and the Investment Advisory Agreements for all of the Funds were considered at the May 29, 2013 meeting, the Board considered each Fund’s investment management and subadvisory relationships separately.

In each instance, the Board considered, among other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of a Fund and, as applicable, each subadvisor for a Fund; (3) the costs incurred by the Manager in rendering services to the Funds and its resulting profits or losses; (4) the extent to which economies of scale have been taken into account in setting each fee rate schedule; (5) whether fee rate levels reflect these economies of scale for the benefit of Fund investors; (6) comparisons of services and fee rates with contracts entered into by the Manager or a subadvisor or their affiliates with other clients (such as pension funds and other institutional funds); and (7) any other benefits derived or anticipated to be derived by the Manager or a subadvisor from their relationship with a Fund. The Trustees posed questions to various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the renewal.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: each Fund’s long-term performance and the background and experience of key investment personnel at the Manager; the cost structure of the Funds; the Manager’s culture of compliance and support for compliance operations that reduce risks to the Funds; the Manager’s commitment to enhance the Funds’ product line and increase assets in the Funds; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; the Manager’s commitment to training employees; and the Manager’s efforts to retain key employees and maintain staff levels.

With respect to the renewal of each Investment Advisory Agreement, the Trustees considered the level of staffing, quality, background and experience of each subadvisor’s investment personnel responsible for managing the Funds, the size of the subadvisor and the subadvisor’s ability to continue to attract and retain qualified investment personnel. The Board also considered the adequacy of the resources committed to the Funds by each subadvisor, and whether those resources were commensurate with the needs of the Funds and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of each subadvisor. The Board also considered the subadvisors’ representations regarding their compliance programs and codes of ethics. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and each subadvisor were appropriate for each Fund and, thus, determined to renew the Management Agreement and the Investment Advisory Agreement for each Fund.

Investment Performance. The Board evaluated the comparative information provided by Lipper and the Manager regarding each Fund’s investment performance relative to its Lipper performance universe, Lipper performance group, and/or benchmark index(es). The Board considered the information provided by Lipper regarding its independent peer selection methodology to select all performance groups and universes. The Board also considered that the performance groups and universes selected by Lipper may not provide appropriate comparisons for each Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also considered in each instance the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to each Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Costs of the Services Provided to the Funds and the Profits Realized by the Manager from its Relationship with the Funds. In analyzing the cost of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager. The profits or losses were noted at both an aggregate level for all Funds and at an individual Fund level, with some Funds being profitable for the Manager and with the Manager sustaining losses with respect to other Funds. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Funds, the difference reflects the greater level of responsibility and regulatory requirements associated with managing the Funds.

The Board also noted that the Manager proposed to continue the expense waivers and reimbursements for certain Funds and classes that were in place during the last fiscal year. The Board further considered that with respect to each Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager plus the amount payable by the Manager to a subadvisor. The Board also considered that the Manager receives service and administrative fees to compensate the Manager for providing administrative services to the Funds and to compensate third-party administrators and broker-dealers for services to Fund shareholders. In addition, the Board considered that the Manager receives management fees for overseeing the securities lending program on behalf of various Funds. The Board also noted that certain classes of the Funds maintain higher expense ratios in order to compensate third-party distributors.

37

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

In analyzing the cost of services for each subadvisor in connection with its investment advisory services to the Fund, the Board considered that, in many cases, the Manager has negotiated the lowest subadvisory fee rate a subadvisor charges for any comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board noted that subadvisors may not account for their profits on an account-by-account basis and, those that do, likely employ different methodologies in connection with these calculations.

Based on the foregoing information, the Board concluded that the profitability levels of the Manager were reasonable in light of the services performed by the Manager. A discussion regarding the Board’s considerations with respect to each Fund’s fee rates is set forth below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as the Funds grow and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that the Manager has negotiated breakpoints in many subadvisory fee rates. The Board also noted that, for purposes of determining the fee rates chargeable to the Funds, many subadvisors have agreed to take into account assets of AMR Corporation and its pension plans that are managed by the subadvisors. Thus, the Funds are able to receive lower effective fee rates.

In addition, the Board noted the Manager’s representation that many of the Funds benefit from economies of scale because comparably low fee rate levels are reflected in the current management and administration fee rates the Manager charges. The Board further noted the Manager’s representation that many of the Funds benefit from these comparably low fee rate levels despite not having yet reached an asset size at which economies of scale would traditionally be considered to exist, and the Manager’s belief that breakpoints are not appropriate at this time. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for each Fund provide for a reasonable sharing of benefits from any economies of scale with the Funds.

Benefits Derived from the Relationship with the Funds. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisors as a result of the advisory relationships with the Funds, including greater exposure in the marketplace with respect to the Manager’s or subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors.

In addition, the Manager noted that the Funds also derive benefits from their association with the Manager. Specifically, the Board noted the Manager’s representation that it provides services to most Funds at a lower than industry average cost. The Board considered that certain of the subadvisors reimburse the Manager for certain of its costs relating to distribution activities for the Funds. The Board also considered that the Funds did not pay commissions to any affiliated broker-dealer of the Manager or the relevant subadvisor during the most recent fiscal year ended December 31, 2012.

Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisors by virtue of their relationships with the Funds appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to Each Fund

The performance comparisons below were made versus each Fund’s Lipper performance universe median, Lipper performance group median and/or benchmark index. References below to each Fund’s Lipper performance group and Lipper performance universe are to the respective group or universe of comparable mutual funds included in the analysis provided by Lipper. A Lipper performance group consists of the Fund and a representative sample of funds with similar investment classifications and objectives as the Fund, as selected by Lipper. A Lipper performance universe is an expansion of the performance group, providing a broader view of performance across the Fund’s investment classification/objective and allowing for a more extensive comparison. In reviewing the performance, the Trustees viewed longer-term performance over a full market cycle, typically five years or longer, as the most important consideration, because relative performance over shorter periods may be significantly impacted by market or economic events that do not reflect manager skill.

The expense comparisons below were made versus each Fund’s Lipper expense universe median and Lipper expense group median. References below to each Fund’s expense group and expense universe are to the respective group or universe of comparable mutual funds included in the analysis by Lipper. A Lipper expense group consists of the Fund and a representative sample of funds with similar operating structures, as selected by Lipper. A Lipper expense universe includes all funds in the investment classification/objective with a similar load type to the share class of the Fund included in the Lipper comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Trustees also considered a Fund’s Morningstar fee level category. In reviewing expenses, the Trustees considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the use of soft dollars was requested from the Manager and all subadvisors and was considered by the Trustees.

Additional Considerations and Conclusions with Respect to the American Beacon Small Cap Value Fund

In considering the renewal of the Management Agreement for the American Beacon Small Cap Value Fund, the Trustees considered the following additional factors: (1) the American Beacon Small Cap Value Fund outperformed the Lipper performance universe median for the one-, three-, five- and ten-year periods ended March 31, 2013; (2) the Fund outperformed the Lipper performance group median for the one- and three-year periods ended March 31, 2013 and had performance equal to the peer group median for the five-year period; (3) the expense ratio of the Institutional Class of the Fund was lower than the median of its Lipper expense universe and Lipper expense group; and (4) the Institutional Class of the Fund was categorized by Morningstar as having a low expense ratio.

38

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Fund (Unaudited)

In considering the renewal of the Investment Advisory Agreements with Barrow, Hanley, MeWhinney & Strauss, LLC (“Barrow”), Brandywine Global Investment Management, LLC (“Brandywine”), Dreman Value Management, LLC (“Dreman”), Hotchkis and Wiley Capital Management LLC (“Hotchkis”), Opus Capital Group, LLC (“Opus”), and The Boston Company Asset Management, LLC (“TBC”) , the Trustees considered the following additional factors: (1) Barrow and TBC each outperformed the Lipper performance universe median for the one-, three- and five-year periods ended March 31, 2013; (2) Brandywine outperformed the Lipper performance universe median for the one- and three-year periods ended March 31, 2013, but underperformed for the five- and ten-year periods; (3) Dreman underperformed the Lipper performance universe median for the one-year period ended March 31, 2013; (4) Hotchkis outperformed the Lipper performance universe median for the one-, three-, five- and ten-year periods ended March 31, 2013; (5) Opus underperformed the Lipper performance universe median for the one-, three- and five-year periods ended March 31, 2013; (6) the Manager’s explanation that Brandywine’s underperformance was due in part to its underperformance compared to its peers in 2009 when it focused on small capitalization companies with earnings which generally underperformed those with negative earnings or no earnings that year, and Brandywine’s underperformance in 2010 and 2012 significantly impacted period results; (7) the Manager’s explanation that Opus’ underperformance was due to the underperformance of its portfolio in 2009 when companies with negative earnings or no earnings performed better than companies with positive earnings and during 2012 when Opus’ high quality investment approach was not favored by the market, though this approach historically has provided long-term outperformance and downside protection and the Manager’s belief that the portfolio is currently well positioned to outperform when the strategy returns to favor; (8) the Manager’s explanation that Dreman’s underperformance was due primarily to its underperformance in 2012; (9) representations by each subadvisor regarding fee rates charged by the subadvisor to other comparable clients; and (10) the Manager’s recommendation to continue to retain each subadvisor.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisors under the Agreements are fair and reasonable; (2) determined that the American Beacon Small Cap Value Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon Small Cap Value Fund.

39

Trustees and Officers of the American Beacon Funds

(Unaudited)

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. Unless otherwise indicated, the address of each person listed below is 4151 Amon Carter Boulevard, MD 2450, Fort Worth, Texas 76155. Each Trustee oversees twenty-six funds in the fund complex that includes the Trust and the American Beacon Select Funds. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES
	Term
	Lifetime of Trust until removal, resignation or retirement*
Gerard J. Arpey** (55)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Chairman and Chief Executive Officer, AMR Corp. and American Airlines; Inc. (2003-2011); Director, S. C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present).
Alan D. Feld*** (76)	Trustee since 1996	Sole Shareholder of a professional corporation which is a Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Mileage Funds (1996-2012); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Master Trust (1996-2012).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
W. Humphrey Bogart (69)	Trustee since 2004	Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Brenda A. Cline (52)	Trustee since 2004	Executive Vice President, Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Eugene J. Duffy (59)	Trustee since 2008	Principal and Executive Vice President, Paradigm Asset Management (1994-Present); Director, Sunrise Bank of Atlanta (2008-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Thomas M. Dunning (71)	Trustee since 2008	Chairman Emeritus (2008-Present) and Chairman (1998-2008)), Lockton Dunning Benefits (consulting firm in employee benefits); Lead Director, Oncor Electric Delivery Company LLC (2007-Present); Board Member, BancTec (2010-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Richard A. Massman (70)	Trustee since 2004 Chairman since 2008	Consultant and General Counsel Emeritus (2009-Present) and Senior Vice President and General Counsel (1994-2009), Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).

40

Trustees and Officers of the American Beacon Funds ^SM

(Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
Barbara J. McKenna, CFA (50)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present).
R. Gerald Turner (67)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-Present); Director, Kronus Worldwide Inc. (chemical manufacturing) (2003-Present); Trustee, American Beacon Mileage Funds (2001-2012); Trustee, American Beacon Select Funds (2001-Present); Trustee, American Beacon Master Trust (2001-2012).
Paul J. Zucconi,CPA (73)	Trustee since 2008	Director, Affirmative Insurance Holdings, Inc. (producer of nonstandard automobile insurance) (2004-Present); Director, Titanium Metals Corporation (producer of titanium melted and mill products) (2002-2012); Director, Torchmark Corporation (life and health insurance products) (2002-Present); Director, Charter Bank (community bank services and products) (2010-2011); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
OFFICERS
	Term
	One Year
Gene L. Needles, Jr. (58)	President since 2009 Executive Vice President since 2009	President, CEO and Director (2009-Present), American Beacon Advisors, Inc.; President (2009-Present), President, CEO and Director (2009-Present), Lighthouse Holdings, Inc.; President and CEO (2009-Present), Lighthouse Holdings Parent, Inc.; President (2009-Present), American Beacon Select Funds; President (2009-Present), American Beacon Mileage Funds; President (2008-2009), Touchstone Investments; President (2003-2007), CEO (2004-2007), AIM Distributors.
Rosemary K. Behan (54)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Legal and Compliance, American Beacon Advisors, Inc. (2006-Present); Secretary, American Beacon Advisors, Inc. (2008 – present); Secretary, Lighthouse Holdings, Inc. (2008-Present); Secretary Lighthouse Holdings Parent, Inc. (2008-Present).
Brian E. Brett (53)	VP since 2004	Vice President, Director of Sales, American Beacon Advisors, Inc. (2004-Present).
Wyatt L. Crumpler (47)	VP since 2007	Chief Investment Officer (2012-Present), Vice President, Asset Management (2009-2012), and Vice President, Trust Investments (2007-2009), American Beacon Advisors, Inc.
Erica Duncan (43)	VP Since 2011	Vice President, Marketing and Client Services (2011-Present), American Beacon Advisors, Inc.; Supervisor, Brand Marketing (2010-2011), Invesco; Supervisor, Marketing Communications (2009-2010) and Senior Financial Writer (2004-2009), Invesco AIM.
Michael W. Fields (59)	VP since 1989	Chief Fixed Income Officer (2011-Present) and Vice President, Fixed Income Investments, American Beacon Advisors, Inc. (1988-2011); Director, American Beacon Global Funds SPC (2002-2011); Director, American Beacon Global Funds plc (2007-2009).
Melinda G. Heika (52)	Treasurer since 2010	Treasurer (2010-Present), and Controller (2005-2009), American Beacon Advisors, Inc.; Treasurer, Lighthouse Holdings, Inc. (2010 – Present); Treasurer, Lighthouse Holdings Parent, Inc. (2010-Present).
Terri L. McKinney (49)	VP since 2010	Vice President, Enterprise Services (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.
Jeffrey K. Ringdahl (38)	VP since 2010	Chief Operating Officer, American Beacon Advisors, Inc. (2010-Present); Vice President, Product Management, Touchstone Advisors, Inc. (2007-2010); Senior Director, Business Integration, Fidelity Investments (2005-2007).

41

Trustees and Officers of the American Beacon Funds ^SM

(Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
Samuel J. Silver (50)	VP Since 2011	Vice President, Fixed Income Investments (2011-Present) and Senior Portfolio Manager, Fixed Income Investments (1999-2011), American Beacon Advisors, Inc.
Christina E. Sears (42)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Chief Compliance Officer (2004-Present), American Beacon Advisors, Inc.
John J. Okray (39)	Asst. Secretary since 2010	Deputy General Counsel (2012-Present) and Assistant General Counsel (2010-2012), American Beacon Advisors, Inc.; Asst. Secretary (2010-Present), Lighthouse Holdings, Inc.; Asst. Secretary (2010-Present), Lighthouse Holdings Parent, Inc.; Vice President, OppenheimerFunds, Inc. (2004-2010).
Sonia L. Bates (56)	Asst. Treasurer since 2011	Director, Tax and Financial Reporting (2011 - Present) and Manager, Tax and Financial Reporting (2005-2010), American Beacon Advisors, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings Parent, Inc.

* The Board has adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 72, provided, however, that the board may determine to grant one or more annual exemptions to this requirement.

** Mr. Arpey is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Arpey previously served as CEO of AMR Corp., which has a material relationship with the Manager.

*** Mr. Feld is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Feld’s law firm of Akin, Gump, Strauss, Hauer & Feld LLP has provided legal services within the past two years to the Manager and one or more of the Trust’s sub-advisors.

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45

Delivery of Documents

eDelivery is NOW AVAILABLE - Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Summary 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: american_beacon.funds@ambeacon.com	On the Internet: Visit our website at www.americanbeaconfunds.com
By Telephone: Institutional, Y, Investor, Advisor and Retirement Classes Call (800) 658-5811 AMR ClassSM Call (800) 345-2345	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 202-551-8090. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	Availability of Proxy Voting Policy and Records A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Boston, Massachusetts TRANSFER AGENT Boston Financial Data Services Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Foreside Fund Services, 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 or Summary Prospectus.

American Beacon Funds and American Beacon Small Cap Value Fund are service marks of American Beacon Advisors, Inc.

AR 10/13

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

President’s Message	1
Market and Performance Overviews	2-8
Schedules of Investments Emerging Markets Fund	11
International Equity Fund	16
Financial Statements	20
Notes to the Financial Statements	24
Financial Highlights	40
Additional Information	Back Cover

The Emerging Markets Fund may invest in futures contracts, which are a type of derivative investment. Investing in derivatives could result in losing more than the amount invested. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The risks of investing in foreign securities are heightened when investing in emerging markets. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

The International Equity Fund may invest in futures contracts, which are a type of derivative investment. Investing in derivatives could result in losing more than the amount invested. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The intrinsic value of stocks selected for the Fund may never be realized by the market, and the prices of value stocks may go down. While investing in value stocks may limit downside risk over time, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The Fund may participate in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and the Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and, therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds October 31, 2013

Dear Shareholders,   The biggest single change in the life of the global stock markets over the past 12 months may have stemmed from a U.S. event: Ben Bernanke’s announcement in May that the Federal Reserve would begin considering how to end its monthly asset purchases. International stocks, particularly those in emerging markets, went into a prolonged sell-off, not just because of concerns about the strength of the U.S. stock market but concerns about rising interest rates as well.   But the recent changes in emerging markets go beyond the taper, and may simply reflect maturing economies. As Ruchir Sharma of Morgan Stanley Investment Management (a sub-advisor to the American Beacon Emerging Markets Fund) points out in his book Breakout Nations, boom economies begin to slow from 9% to 10% annual growth down to 5% or 6% when their per capita income reaches a middle-class level. Currently, a middle-class income in emerging markets is about $4,000 a year.

The economies of the BRIC countries – Brazil, Russia, India, China – may be slowing down now because of that middle-class barrier. Though these countries have been driving the emerging markets for the past decade, the global economy could be turning a corner now, with new economies stepping up to fuel the world’s growth.

We believe it takes a seasoned hand to navigate the complexities of an ever-changing global economy. That’s why we have some of the world’s most respected international asset managers as sub-advisors to the American Beacon International Equity Fund and the American Beacon Emerging Markets Fund.

For the 12 months ended October 31, 2013:

• The American Beacon Emerging Markets Fund (Investor Class) returned 7.89%.

• The American Beacon International Equity Fund (Investor Class) returned 27.73%.

Thank you for your continued investment in the American Beacon Funds. For additional information about the Funds or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Emerging Markets Overview

October 31, 2013 (Unaudited)

For the 12-month period that ended October 31, 2013, emerging markets trailed their developed market counterparts. However, starting in August, emerging markets outperformed developed-market equities for three months in a row, as measured by the MSCI Emerging Markets Index and the MSCI World Index, respectively. For the 12-month period as a whole, the MSCI Emerging Markets Index increased by 6.53% (in U.S. dollars).

Within emerging markets, a key contributor to performance at the end of 2012 had been the decidedly more positive tone of economic data from China, which alleviated concerns that the world’s second-largest economy would succumb to a sharp slowdown. The country’s manufacturing sector continued to expand, consumer confidence remained stable and both retail sales and electricity generation were on the rise, providing more evidence that China’s recovery would extend into 2013. Notable reforms also continued in India, where select industries were opened up to foreign investment, creating a more promising long-term market environment.

The rally carried through to the beginning of 2013, helped by news that reinforced the global economic recovery. Headlines from Europe were encouraging, but sentiment was later tempered when a hotly contested bailout of the Cypriot financial system added to fears that the eurozone’s debt crisis could be deepening. Meanwhile, China’s manufacturing sector extended its recovery, albeit at a mild pace, strengthening hopes for a more robust economy as the country completed a key leadership transition. By the end of the first quarter, India’s central bank cut rates and offered very dovish rhetoric for continued easing despite higher inflation, which negatively affected the market.

By the second quarter, volatility set in as investors pondered the end of the easy-money era. In May, when U.S. Federal Reserve chairman Ben Bernanke indicated that the central bank could begin winding down its bond-buying programs, the 10-year Treasury yield spiked. This caused the carry trade, which had supported emerging-market equities and currencies, to unwind quickly. Countries with sizable current account deficits and some dependency on foreign investment to fund such a profile were hit hardest – particularly India, Indonesia, Brazil, South Africa and Turkey.

Eventually, selling pressure abated toward the end of the summer due to a number of positive factors. Supportive signs included relatively consistent data supporting a reacceleration of China’s economy, fairly aggressive government policy responses in some of the markets with the weakest currencies, including India, Indonesia and Turkey, and the U.S. Federal Reserve stepping back from its plan to begin tapering its quantitative-easing policy. At the same time, the broader global economic outlook also improved, with economies in the U.S., Japan and Europe showing signs of growth.

2

American Beacon Emerging Markets Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the Emerging Markets Fund (the “Fund”) returned 7.89% for the twelve months ended October 31, 2013. The Fund outperformed the MSCI Emerging Markets Index (the “Index”) return of 6.53% and the Lipper Emerging Markets Funds Index return of 7.83% for the period.

Comparison of Change in Value of a $10,000 Investment

For The Period From 10/31/03 Through 10/31/13

Total Returns for the Period ended 10/31/13

	1 Year			5 Years			10 Years			Value of $10,000 10/31/03- 10/31/13
Institutional Class (1,6)		8.39	%		14.21	%		11.26	%	$	29,058
Y Class (1,2,6)		8.22	%		14.09	%		11.20	%		28,911
Investor Class (1,6)		7.89	%		13.77	%		10.88	%		28,090
A Class with sales charge (1,3,6)		1.72	%		12.41	%		10.22	%		28,064
A Class without sales charge (1,3,6)		7.94	%		13.75	%		10.87	%		26,459
C Class with sales charge (1,4,6)		6.06	%		13.21	%		10.61			27,403
C Class without sales charge (1,4,6)		7.06	%		13.21	%		10.61	%		27,403
AMR Class (1,6)		8.34	%		14.29	%		11.44	%		29,542
MSCI Emg Mkts Index (5)		6.53	%		15.34	%		12.41	%		32,228
Lipper Emg Mkts Funds Index (5)		7.83	%		15.39	%		11.99	%		31,029

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is as of the date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the five-year and ten-year periods represent the returns achieved by the Institutional Class from 10/31/03 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 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 10/31/03.

3. Fund performance for the five-year and ten-year periods represent the returns achieved by the Investor Class from 10/31/03 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A 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 A Class been in existence since 10/31/03. The maximum sales charge for A Class is 5.75%.

4. Fund performance for the five-year and ten-year periods represent the returns achieved by the Investor Class from 10/31/03 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/03. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

5. 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 Markets Funds Index tracks the results of the 30 largest mutual funds in the Lipper Emerging Markets 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, A, C, and AMR Class shares was 1.51%, 1.73%, 1.85%, 2.02%, 3.75%, and 1.25%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund outperformed the Index over the twelve-month period due to stock selection, as country allocation detracted from relative performance for the period.

Stock selections in China and Brazil added value during the period, offsetting the impact of poor selections in Mexico and India. In China, investments in Sinotrans Ltd. (up 64.0%) and Guangzhou Automobile Group (up 84.1%) benefited the Fund. In Brazil, the Fund added value through investment in TIM Participacoes S.A. (up 49.7%). Detractors in Mexico included Desarrolladora Homex SAB (down 91.4%) and Urbi Desarrollos Urbanos SAB (down 85.4%), both of which were held for less than the full twelve-month period. Detractors in India included Indian Oil Corp Ltd. (down 29.9%).

3

American Beacon Emerging Markets Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

Relative contribution from country allocation was negative for the twelve-month period, as a result of underweighting Taiwan (up 18.1%) and overweighting Brazil (down 1.5%). Underweighting Chile (down 14.6%) – the second-worst performing country in the Index – benefited relative performance during the period.

The Fund’s basic philosophy remains focused on investing in attractively valued companies with above-average earnings growth expectations.

Top Ten Holdings (% Net Assets)

Petroleo Brasileiro S.A.		3.2
Gazprom OAO		2.0
China Mobile Ltd.		1.9
KB Financial Group, Inc.		1.7
Banco Santander Brasil S.A.		1.6
POSCO		1.5
Erste Group Bank AG		1.3
Lukoil OAO		1.2
Samsung Electronics Co. Ltd.		3.9
Shinhan Financial Group Co. Ltd.		1.5
Total Fund Holdings	299

Sector Allocation (% Equities)

Financials	25.8
Information Technology	11.9
Consumer Discretionary	10.2
Energy	10.2
Industrials	9.7
Telecommunication Services	9.3
Materials	8.8
Consumer Staples	7.8
Utilities	3.7
Health Care	2.2
Private Placement	0.4

Country Allocation (% Equities)

Hong Kong/China	19.0
South Korea	18.9
Brazil	15.4
India	9.4
Taiwan	6.0
Russia	5.5
Mexico	4.3
Turkey	2.4
Thailand	2.4
Poland	2.3
South Africa	2.2
Austria	1.6
Malaysia	1.6
Philippines	1.4
Indonesia	1.3
Czech Republic	1.2
Hungary	0.9
United Kingdom	0.6
Singapore	0.5
Peru	0.5
Chile	0.4
Switzerland	0.3
Netherlands	0.3
Colombia	0.3
Egypt	0.3
Qatar	0.2
Argentina	0.2
Spain	0.2
Japan	0.2
United States	0.1
United Arab Emirates	0.1

4

American Beacon Emerging Markets Fund^SM

Fund Expenses

October 31, 2013 (Unaudited)

Fund Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments and 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 May 1, 2013 through October 31, 2013.

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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The “Hypothetical” lines of the 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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Fund, such as 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 Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Institutional Class
Actual	$	1,000.00	$	1,017.59	$	6.87
Hypothetical **	$	1,000.00	$	1,018.40	$	6.87
Y Class
Actual	$	1,000.00	$	1,016.64	$	7.37
Hypothetical **	$	1,000.00	$	1,017.90	$	7.38
Investor Class
Actual	$	1,000.00	$	1,015.32	$	9.09
Hypothetical **	$	1,000.00	$	1,016.18	$	9.10
A Class
Actual	$	1,000.00	$	1,015.35	$	9.04
Hypothetical **	$	1,000.00	$	1,016.23	$	9.05
AMR Class
Actual	$	1,000.00	$	1,017.44	$	7.17
Hypothetical **	$	1,000.00	$	1,018.10	$	7.17
C Class
Actual	$	1,000.00	$	1,011.11	$	12.88
Hypothetical **	$	1,000.00	$	1,012.40	$	12.88

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.35%, 1.45%, 1.79%, 1.78%, 2.54% and 1.41% for the Institutional, Y, Investor, A, C 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

5

International Equity Market Overview

October 31, 2013 (Unaudited)

The 12-month period through October 31, 2013, marked a time in which most international equity markets rose significantly. A number of macroeconomic events moved markets higher during the period as supportive monetary policy and improving investor sentiment overcame still-muted economic growth.

The beginning of the review period coincided with the onset of new political cycles in economies representing more than half of global economic output. U.S. president Barack Obama won a second term in the White House, senior Communist Party member Xi Jinping was tapped to lead China’s top decision-making body and Shinzo Abe won Japan’s general election, returning to the prime minister’s office.

In Japan, the newly elected prime minister vowed to tackle deflation and economic weakness, bolstering expectations. Japan’s stock market was the pacesetter for the rest of the developed world after Abe took office and the subsequent implementation of an aggressive monetary policy. The temporary resolution of the U.S. fiscal cliff – a combination of tax increases and spending cuts – also buoyed markets into the new year.

Later in 2013, the eurozone’s economy finally expanded after the longest recession since the adoption of the euro, and in Japan, equities were supported by quantitative easing policies coupled with efforts to devalue the yen and combat deflation. However, slowing growth in China and messaging from U.S. policymakers about tapering the bond-buying program were poorly received by markets during the latter part of the second quarter.

In the third quarter and through October, equities advanced globally, supported by better economic data in Europe and Asia. In the United States, the much-discussed quantitative easing taper did not occur, leading to strong stock market performance and better gross domestic product numbers. In Europe, German chancellor Angela Merkel won re-election in a show of support for the austerity and growth measures she has spearheaded in response to Europe’s sovereign debt crisis.

Despite tempered economic growth, it was a strong period for stock markets in the developed world. The MSCI EAFE Index rose by 26.9% in the 12 months ended October 31, 2013, as every country and region represented in the MSCI World Index was positive (when measured in U.S. dollars) for the period, with the exception of Israel, which fell 0.3%.

6

American Beacon International Equity Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the International Equity Fund (the “Fund”) returned 27.73% for the twelve months ended October 31, 2013. The Fund outperformed the MSCI EAFE Index (the “Index”) return of 26.88% and the Lipper International Funds Index return of 24.92% for the period.

Comparison of Change in Value of a $10,000 Investment

For The Period From 10/31/03 Through 10/31/13

Total Returns for the Period ended 10/31/13

	1 Year			5 Years			10 Years			Value of $10,000 10/31/03- 10/31/13
Institutional Class (1,8)		28.14	%		13.22	%		8.41	%	$	22,418
Y Class (1,2,8)		28.04	%		13.13	%		8.37	%		22,332
Investor Class (1,8)		27.73	%		12.83	%		8.08	%		21,751
Advisor Class (1,3,8)		27.51	%		12.57	%		7.82	%		21,224
Retirement Class (1,4,8)		27.22	%		12.45	%		7.76	%		21,114
A Class with sales charge (1,5,8)		20.16	%		11.38	%		7.38	%		20,383
A Class without sales charge (1,5,8)		27.51	%		12.71	%		8.02	%		21,632
C Class with sales charge (1,6,8)		25.56	%		12.15	%		7.75	%		21,099
C Class without sales charge (1,6,8)		26.56	%		12.15	%		7.75	%		21,099
AMR Class (1,8)		28.56	%		13.50	%		8.69	%		23,016
Lipper Int’l. Funds Index (7)		24.92	%		12.63	%		8.20	%		21,987
MSCI EAFE Index (7)		26.88	%		11.99	%		7.71	%		21,025

1. Please note 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 is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is as of date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Institutional Class from 10/31/03 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 10/31/03.

3. 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 represent the total returns achieved by Advisor Class from 10/31/03 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 10/31/03.

5. Fund performance for the five-year and ten-year periods represents the total returns achieved by the Investor Class from 10/31/03 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A 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 A Class been in existence since 10/31/03. The maximum sales charge for A Class is 5.75%.

6. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/03. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

7. 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.

8. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, Retirement, A, C, and AMR Class shares was 0.73%, 0.81%, 1.10%, 1.32%, 6.41%, 1.30%, 2.13%, and 0.46%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund outperformed the Index over the twelve-month period due to stock selection, as country allocation detracted from relative performance.

7

American Beacon International Equity Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

Stock selections in the United Kingdom and the Netherlands contributed to the Fund’s relative outperformance. Within the United Kingdom, the Fund added value through investments in Lloyds Banking Group PLC (up 88.8%) and Aviva PLC (up 41.2%). In the Netherlands, Reed Elsevier NV (up 54.5%) and SBM Offshore NV (up 63.2%) benefited relative performance for the period. Stock selections in Japan lagged during the period, including Softbank Corp. (up 41.1%) and Sony Financial Holdings Inc. (down 24.7%). Both stocks were held for less than the full twelve-month period.

From a country allocation perspective, the Fund lost value through overweighting non-Index constituents South Korea and Canada (up 12.7% and 6.0%, respectively), and underweighting Japan (up 34.0%). Underweighting Australia (up 15.5%) contributed positively to relative performance for the year.

Although economic and market conditions vary from period to period, the Fund’s primary strategy of investing in undervalued companies with above-average earnings growth expectations remains consistent.

Top Ten Holdings (% Net Assets)

Novartis AG Reg		2.5
Sanofi		2.5
BNP Paribas		2.3
Lloyds Banking Group PLC		2.0
Bayer AG Reg		2.0
Royal Dutch Shell PLC		1.9
Akzo Nobel		1.7
Siemens AG Reg		1.5
Toyota Motor Corp.		1.4
British American Tobacco plc		1.5
Total Fund Holdings	162

Sector Allocation (% Equities)

Financials	22.7
Consumer Discretionary	15.7
Industrials	12.7
Health Care	11.5
Energy	10.8
Materials	8.2
Consumer Staples	6.8
Telecommunication Services	5.4
Information Technology	4.9
Utilities	1.4

Country Allocation (% Equities)

United Kingdom	23.8
France	12.6
Japan	12.4
Germany	11.0
Switzerland	8.3
Netherlands	6.9
Sweden	3.4
Spain	2.8
South Korea	2.7
Singapore	2.5
Italy	2.4
Canada	2.3
Hong Kong/China	1.7
Belgium	1.3
Norway	1.3
Ireland	1.0
Australia	0.9
Finland	0.7
Luxembourg	0.6
Portugal	0.5
Denmark	0.4
Austria	0.3
Greece	0.2

8

American Beacon International Equity Fund^SM

Fund Expenses

October 31, 2013 (Unaudited)

Fund Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchase payments and 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 May 1, 2013 through October 31, 2013.

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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The “Hypothetical” lines of the 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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Fund, such as 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 Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Institutional Class
Actual	$	1,000.00	$	1,132.61	$	3.92
Hypothetical **	$	1,000.00	$	1,021.53	$	3.72
Y Class
Actual	$	1,000.00	$	1,132.21	$	4.68
Hypothetical **	$	1,000.00	$	1,020.82	$	4.43
Investor Class
Actual	$	1,000.00	$	1,130.98	$	5.80
Hypothetical **	$	1,000.00	$	1,019.76	$	5.50
Advisor Class
Actual	$	1,000.00	$	1,129.86	$	6.50
Hypothetical **	$	1,000.00	$	1,019.11	$	6.16
Retirement Class
Actual	$	1,000.00	$	1,128.71	$	7.89
Hypothetical **	$	1,000.00	$	1,017.80	$	7.48
A Class
Actual	$	1,000.00	$	1,129.89	$	6.71
Hypothetical **	$	1,000.00	$	1,018.90	$	6.36
AMR Class
Actual	$	1,000.00	$	1,134.81	$	2.42
Hypothetical **	$	1,000.00	$	1,022.94	$	2.29
C Class
Actual	$	1,000.00	$	1,125.42	$	10.66
Hypothetical **	$	1,000.00	$	1,015.17	$	10.11

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.73%, 0.87%, 1.08%, 1.21%, 1.47%, 1.25%, 1.99% and 0.45% for the Institutional, Y, Investor, Advisor, Retirement, A, C 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

9

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon Emerging Markets Fund and American Beacon International Equity Fund:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the American Beacon Emerging Markets Fund and American Beacon International Equity Fund (two of the funds constituting the American Beacon Funds) (collectively, the “Funds”), as of October 31, 2013, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of each Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the American Beacon Emerging Markets Fund and American Beacon International Equity Fund at October 31, 2013, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Dallas, Texas

December 30, 2013

10

American Beacon Emerging Markets Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Argentina - 0.21%
Preferred Stocks - (Cost $365)
Nortel Inversora S.A., Class B, ADR A		12,460	$	268
Austria - 1.54%
Common Stocks - (Cost $1,945)
Erste Group Bank AG		46,986		1,657
Vienna Insurance Group AG		5,774		306
Total Austria				1,963
Brazil - 14.50%
Common Stocks - (Cost $18,390)
Banco Bradesco S.A.		28,650		459
Banco do Brasil S.A.		81,190		1,078
Banco Santander Brasil S.A., ADRA		298,350		2,068
Brasil Insurance Participacoes e Administracao S.A.		31,600		288
BRF - Brasil Foods S.A.		36,674		861
CCR S.A.		33,651		280
Centrais Eletricas Brasileiras S.A., ADRA B		135,270		427
Cia de Saneamento Basico do Estado de Sao Paulo, ADRA		28,260		300
Diagnosticos da America S.A.		55,600		285
EDP - Energias do Brasil S.A.		66,800		382
Embraer S.A., ADRA		34,580		1,016
Gerdau S.A., ADRA		19,150		152
Grupo BTG Pactual		10,400		139
JBS S.A.		114,900		413
Magnesita Refratarios S.A.		67,600		188
Marfrig Alimentos S.A.		172,800		351
Petroleo Brasileiro S.A., ADRA B		117,390		2,047
Petroleo Brasileiro S.A., A Shares, ADRA B		78,999		1,435
Petroleo Brasileiro S.A.B		24,160		211
Raia Drogasil S.A.B		15,025		110
Sul America S.A.		26,243		192
Telefonica Brasil S.A., ADRA		53,215		1,180
TIM Participacoes S.A.		233,300		1,189
Ultrapar Participacoes S.A.		10,372		276
Vale S.A., ADRA		27,860		446
Viver Incorporadora e Construtora S.A.B		431,588		58
Total Common Stocks				15,831
Preferred Stocks - (Cost $2,154)
Banco Bradesco S.A.		36,496		526
Companhia de Bebidas, ADRA		13,001		484
Gerdau S.A.		23,500		185
Itau Unibanco Holding S.A.		9,110		141
Itau Unibanco Holding S.A., ADRA		51,938		799
Petroleo Brasileiro S.A.B		42,625		389
Total Preferred Stocks				2,524
Convertible Preferred Bond - (Cost $116)
Viver Incorporadora e Construtora S.A.B F		270,118		145
Total Brazil				18,500

	Shares		Fair Value
			(000’s)
Chile - 0.35%
Common Stocks - (Cost $476)
S.A.C.I. Falabella		44,469	$	443
Colombia - 0.23%
Common Stocks - (Cost $212)
Grupo de Inversiones Suramericana S.A.		10,467		207
Preferred Stocks - (Cost $97)
Grupo de Inversiones Suramericana S.A.		4,700		93
Total Colombia				300
Czech Republic - 1.09%
Common Stocks - (Cost $1,391)
Komercni Banka A.S.		1,868		464
Telefonica Czech Republic A.S.		56,930		928
Total Czech Republic				1,392
Egypt - 0.31%
Common Stocks - (Cost $392)
Eastern Tobacco B		26,280		393
Hong Kong/China - 17.91%
Common Stocks - (Cost $22,817)
Ajisen China Holdings Ltd.		384,000		403
Anhui Conch Cement Co., Ltd. H		153,000		535
Asia Cement China Holdings Corp.		91,500		50
AsiaInfo-Linkage, Inc.B		69,810		810
Bank of China Ltd. H		1,691,000		794
Beijing Capital International Airport Co. Ltd. H		562,000		395
Beijing Enterprises Holdings Ltd.		18,000		147
Bosideng International Holdings Ltd.		3,552,000		816
Chaoda Modern Agriculture Holdings Ltd.F		2,200,000		253
China Communications Services Corp. Ltd. H		338,000		209
China Construction Bank H		1,699,325		1,320
China Life Insurance Co., Ltd. H		136,000		361
China Mengniu Dairy Co., Ltd.		61,000		267
China Mobile Ltd.		233,500		2,452
China Oilfield Services Ltd. H		102,000		285
China Overseas Grand Oceans Group Ltd.		53,000		63
China Overseas Land & Investment Ltd.		64,000		198
China Pacific Insurance Group Co., Ltd. H		104,600		377
China Petroleum & Chemical Corp. H		202,800		166
China Power International Development Ltd.		272,800		107
China Railway Group Ltd. H		300,000		170
China Resources Power Holdings Co., Ltd.		98,000		257
China Shenhua Energy Co., Ltd.		105,000		319
China Yuchai International Ltd.		17,000		397
Chongqing Changan Automobile Co., Ltd.		31,600		58
CNOOC Ltd.		206,000		421
Cosco International Holdings Ltd.		1,036,000		448

See accompanying notes

11

American Beacon Emerging Markets Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
COSCO Pacific Ltd.		336,592	$	489
Dickson Concepts International Ltd.		280,445		175
Dongfang Electric Corp. H		182,800		294
Dongfeng Motor Group Co., Ltd. H		244,000		344
First Pacific Co., Ltd.		917,874		1,044
Global Bio-chem Technology Group Co., Ltd.B		1,690,520		131
Guangzhou Automobile Group Co., Ltd. H		127,370		151
Industrial & Commercial Bank of China Ltd. H		901,555		630
Lianhua Supermarket Holdings Co., Ltd. H		480,000		308
NetEase, Inc., ADRA		700		47
NWS Holdings Ltd.		269,303		422
Parkson Retail Group Ltd.B		899,000		307
People’s Food Holdings Ltd.		911		1
PICC Property and Casualty Co., Ltd. H		239,380		365
Qihoo 360 Technology Co., Ltd.B		3,578		296
Samsonite International S.A.		155,400		424
Shanghai Industrial Holdings Ltd.		151,000		497
Sihuan Pharmaceutical Holdings Group Ltd.		184,000		137
Sino Biopharmaceutical		188,000		132
Sinotrans Ltd. H		6,043,058		1,488
Sinotrans Shipping Ltd.		2,868,000		943
Tencent Holdings Ltd.		14,400		786
Tsingtao Brewery Co., Ltd. H		24,000		196
Uni-President China Holdings Ltd.		141,000		141
Weiqiao Textile Co., Ltd. H		898,600		548
Xinhua Winshare Publishing and Media Co., Ltd. H		341,000		200
Zhejiang Expressway Co., Ltd. H		312,000		285
Total Hong Kong/China				22,859
Hungary - 0.88%
Common Stocks - (Cost $1,306)
Magyar Telekom Telecommunications PLC		284,733		391
Richter Gedeon NyrtB		38,160		726
Total Hungary				1,117
India - 8.82%
Common Stocks - (Cost $12,350)
Asian Paints Ltd.B		28,345		249
Bharat Heavy Electricals Ltd.		129,720		298
Glenmark Pharmaceuticals Ltd.		30,648		281
Grasim Industries Ltd.		870		40
HCL Technologies Ltd.		13,462		239
HDFC Bank Ltd.		34,590		382
Hindustan Petroleum Corp., Ltd.		86,120		283
ICICI Bank Ltd., ADRA		2,830		106
ICICI Bank Ltd.		15,530		284
Idea Cellular Ltd.		94,034		263
India Cements Ltd.		376,000		306
Indian Oil Corp Ltd.		233,370		770
IndusInd Bank Ltd.		27,113		197
ING Bank Ltd.B		15,352		147
ITC Ltd.		72,130		393
Jubilant Life Sciences Ltd.		64,530		105
Maruti Suzuki India Ltd.		6,030		161

	Shares		Fair Value
			(000’s)
NMDC Ltd.		195,450	$	440
Oriental Bank of Commerce		47,910		141
Power Grid Corp. of India Ltd.		147,120		242
Punjab National Bank Ltd.		17,520		156
Reliance Industries Ltd.		61,520		917
Reliance Infrastructure Ltd.		185,525		1,307
Rolta India Ltd.		126,160		129
Sesa Sterlite Ltd. ADRB		4,332		56
Sesa Sterlite Ltd.		76,014		249
State Bank of India		12,120		354
State Bank of India, GDRC		2,380		139
Steel Authority of India Ltd.		279,710		283
Sun PharmaceuticalB		28,898		285
Tata Chemicals Ltd.B		144,820		632
Tata Consultancy Services Ltd.		13,193		453
UPL Ltd.B		274,087		732
Zee Entertainment Enterprises Ltd.		53,868		233
Total India				11,252
Indonesia - 1.25%
Common Stocks - (Cost $1,898)
Aneka Tambang Persero Tbk PT		407,500		58
Bank Negara Indonesia Persero Tbk PT		355,000		151
Bank Rakyat Indonesia Persero Tbk PT		80,500		56
Bank Tabungan Negara Persero Tbk PT		1,588,510		137
Gudang Garam Tbk PT		27,500		90
Indosat Tbk PT		467,500		182
Kalbe Farma Tbk PT		1,671,000		193
Matahari Department Store Tbk PT		189,500		207
Semen Indonesia PerseroB		110,500		141
XL Axiata Tbk PTB		960,603		381
Total Indonesia				1,596
Japan - 0.22%
Common Stocks - (Cost $343)
Nexon Co., Ltd.		24,100		281
Malaysia - 1.48%
Common Stocks - (Cost $1,761)
Astro Malaysia Holdings BhdB		226,800		208
CIMB Group Holdings Bhd		259,684		616
Gamuda Bhd		177,700		274
Genting Bhd		94,900		315
IHH Healthcare Bhd		149,100		195
IJM Corp., Bhd		154,600		284
Total Malaysia				1,892
Mexico - 4.01%
Common Stocks - (Cost $6,129)
ALFA S.A.B.		177,845		487
Alpek SA de C.V.B		18,000		39
America Movil, S.A.B. de C.V., Series L, ADRA		48,858		1,046
Cemex, S.A.B. de C.V., Series L, ADRA		130,172		1,378
Consorcio ARA, S.A.B. de C.V.		191,100		75
Desarrolladora Homex, S.A.B. de C.V.B		456,630		101
Fomento Economico Mexicano, S.A.B. de C.V., Series B, ADRA		3,892		363
Grupo Financiero Banorte, S.A.B. de C.V.		56,547		362

See accompanying notes

12

American Beacon Emerging Markets Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Grupo Financiero Santander Mexico, S.A.B. de C.V., ADRA		25,703	$	363
Macquarie Mexico Real Estate NPVB		100,000		184
Mexichem, S.A.B. de C.V.		49,316		205
Urbi Desarrollos Urbanos, S.A.B. de C.V.B F		1,452,850		119
Wal-Mart de Mexico, S.A.B. de C.V.		151,706		394
Total Mexico				5,116
Netherlands - 0.28%
Common Stocks - (Cost $236)
Yandex N.V. B		9,749		359
Peru - 0.49%
Common Stocks - (Cost $610)
Credicorp Ltd.		4,540		620
Philippines - 1.29%
Common Stocks - (Cost $1,382)
BDO Unibank, Inc.B		193,930		365
Bloomberry Resorts Corp.B		457,700		108
DMCI Holdings, Inc.B		211,340		253
International Container Terminal Services, Inc.B		115,250		277
Lt Group, Inc.B		247,900		95
Metro Pacific Investments Corp.		2,622,800		296
SM Investments Corp.		12,510		248
Total Philippines				1,642
Poland - 2.14%
Common Stocks - (Cost $2,354)
Asseco Poland S.A.		8,231		134
Bank Pekao S.A.		10,714		671
Bank Zachodni WBK S.A.		6,502		792
PKO Bank Polski S.A.		25,110		333
Synthos S.A.B		271,370		460
Telekomunikacja Polska S.A.		103,683		336
Total Poland				2,726
Qatar - 0.16%
Common Stocks - (Cost $209)
Ooredoo QSC B		5,439		208
Russia - 5.19%
Common Stocks - (Cost $6,315)
Gazprom OAO, ADRA		270,360		2,521
Lukoil OAO, ADRA		24,234		1,587
Lukoil OAO, ADRA		197		13
Mail.ru Group Ltd., GDRB C		8,370		309
Megafon, GDRB C		7,237		263
Mobile TeleSystems OJSC, ADRA		12,500		285
NovaTek OAO, GDRC		3,000		422
Rosneft Oil Co., GDRC		69,310		547
RusHydro JSC, ADRA		242,140		409
Sberbank, ADRA B		21,530		275
Total Russia				6,631

	Shares		Fair Value
			(000’s)
Singapore - 0.47%
Common Stocks - (Cost $487)
Flextronics International Ltd.B		21,260	$	168
Haw Par Corp., Ltd.		72,957		436
Total Singapore				604
South Africa - 2.10%
Common Stocks - (Cost $2,648)
AngloGold Ashanti Ltd.		12,210		186
Barclays Africa Group Ltd.		28,270		435
JD Group Ltd.		73,390		226
Life Healthcare Group Holdings Ltd.		39,349		161
Murray & Roberts Holdings Ltd.B		63,260		193
Naspers Ltd., N Shares		5,341		500
Pick n Pay Stores Ltd.		34,271		162
Sasol Ltd.		5,978		305
Standard Bank Group Ltd.		31,701		403
Telkom S.A. Ltd.B		42,340		111
Total South Africa				2,682
South Korea - 17.79%
Common Stocks - (Cost $18,625)
Cheil Worldwide, Inc.		4,970		122
Cosmax, Inc.B		1,980		97
Coway Co., Ltd.		4,953		283
Doosan Infracore Co., Ltd.B		5,450		78
GS Retail Co., Ltd.B		3,600		99
Hana Financial Group, Inc.		6,050		233
Hite Jinro Ltd.		14,357		353
Hotel Shilla Co., Ltd.B		2,529		163
Hyundai Department Store Co., Ltd.		528		84
Hyundai Development Co-Engineering & Construction		11,540		257
Hyundai Engineering & Construction Co., Ltd.		5,849		336
Hyundai Glovis Co., Ltd		1,107		246
Hyundai Mobis		4,176		1,179
Hyundai Motor Co.		5,173		1,234
Hyundai Rotem CompanyB		120		4
KB Financial Group, Inc.		55,244		2,188
Kia Motors Corp.		7,970		464
Korea Electric Power Corp.B		26,735		715
Korea Electric Power Corp., ADRA		11,050		146
KT Corp., ADRA		14,860		247
KT Corp.		2,250		74
KT Skylife Co., Ltd.B		2,070		55
LG Electronics, Inc.		6,708		430
LG Household & Health Care Ltd.		337		175
LG UPlus Corp.		15,200		174
Lotte Chilsung Beverage Co., Ltd.		259		384
Lotte Confectionery Co., Ltd.		428		734
Mirae Asset Securities Co., Ltd.		6,870		232
Naver Corp.		166		93
NCSoft Corp.		1,208		234
NongShim Co., Ltd.		768		186
Orion Corp.		118		115
Paradise Co. Ltd.B		4,880		125
POSCO		6,253		1,866
Samsung Electronics Co., Ltd.		3,479		4,806
Samsung Fire & Marine Insurance Co., Ltd.		1,172		274
Shinhan Financial Group Co., Ltd.		43,412		1,897

See accompanying notes

13

American Beacon Emerging Markets Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Shinsegae Co., Ltd.		2,129	$	537
SK Hynix, Inc.B		5,980		180
SK Telecom Co., Ltd.		1,146		245
SK Telecom Co., Ltd., ADRA		7,640		187
Tong Yang Life Insurance		14,260		151
Total Common Stocks				21,682
Preferred Stocks - (Cost $563)
Hyundai Motor Co., Ltd.		7,542		821
Samsung Electronics Co., Ltd.		213		206
Total Preferred Stocks				1,027
Total South Korea				22,709
Spain - 0.15%
Common Stocks - (Cost $200)
Cemex Latam Holdings S.A. B		25,491		195
Switzerland - 0.32%
Common Stocks - (Cost $360)
Coca-Cola HBC AG B		14,332		414
Taiwan - 5.64%
Common Stocks - (Cost $6,725)
Advanced Semiconductor Engineering, Inc.		150,000		147
Chailease Holding Co., Ltd.		96,250		234
China Life Insurance Co., Ltd.B		115,617		113
Cleanaway Co., Ltd.		16,000		100
Compal Electronics, Inc.		1,255,000		983
CTBC Financial Holding Co., Ltd.		225,785		153
Delta Electronics, Inc.		9,000		47
Eclat Textile Co., Ltd.		14,280		157
First Financial Holding Co., Ltd.		882,085		546
Fubon Financial Holding Co., Ltd.		142,000		208
Ginko International Co., Ltd.		12,000		229
HON HAI Precision Industry Co., Ltd.		237,964		603
MediaTek, Inc.		22,000		301
Mega Financial Holding Co., Ltd.		15,000		13
Nan Ya Printed Circuit Board Corp.		243,099		328
Powertech Technology, Inc.		28,400		51
Siliconware Precision Industries Co.		196,000		238
Siliconware Precision Industries Co., ADRA		15,000		90
Simplo Technology Co., Ltd.B		46,000		226
Taiwan Cement Corp.		83,000		121
Taiwan Semiconductor Manufacturing Co., Ltd.		390,385		1,456
TPK Holding Co., Ltd.		8,000		56
Transcend Information, Inc.		50,520		160
Uni-President Enterprises Corp.		160,669		306
United Microelectronics Corp.		649,226		275
Young Fast Optoelectronics Co., Ltd.		56,541		62
Total Taiwan				7,203
Thailand - 2.24%
Common Stocks - (Cost $2,666)
Advanced Info Service PCL		44,700		338
Bangkok Bank PCL, NVDRD		66,400		440
Bangkok Bank PCL		55,490		367
Bank of AyudhyaB		106,200		131

	Shares		Fair Value
			(000’s)
Kasikornbank PCL, NVDRD		22,500	$	137
Kasikornbank PCL		43,700		272
Land and Houses PCL, NVDRD		919,100		325
Minor International PCLB		220,300		173
Robinson Dept Store PLCB		112,600		191
Supalai PCL, NVDRD		23,500		13
Supalai Public Co., Ltd.B		367,600		209
Total Access Communication PCL		40,400		146
Total Access Communication PCL, NVDRD		32,100		116
Total Thailand				2,858
Turkey - 2.27%
Common Stocks - (Cost $2,765)
Anadolu Efes Biracilik Ve Malt Sanayii A.S.		21,452		274
Asya Katilim Bankasi A.S.		124,810		127
Aygaz A.S.		94,590		433
Turkcell Iletisim Hizmetleri A.S.B		32,236		200
Turkiye Garanti Bankasi A.S.		200,910		809
Turkiye Sise ve Cam Fabrikalari A.S.		162,304		239
Turkiye Vakiflar Bankasi Tao		280,147		674
Ulker Biskuvi Sanayi A.S.		18,895		145
Total Turkey				2,901
United Arab Emirates - 0.10%
Common Stocks - (Cost $128)
Emaar Properties PJSC B		75,580		125
United Kingdom - 0.60%
Common Stocks - (Cost $688)
Eurasia Drilling Co., Ltd., GDRC		428		18
JKX Oil & Gas PLCB E		76,470		91
Mondi PLC E		20,750		368
SABMiller PLC E		5,676		295
Total United Kingdom				772
United States - 0.11%
Common Stocks - (Cost $98)
Eurasia Drilling Co., Ltd., GDR C		3,279		139
SHORT-TERM INVESTMENTS - 5.25% (Cost $6,702)
JPMorgan U.S. Government Money Market Fund, Capital Class		6,701,910		6,702
TOTAL INVESTMENTS - 99.39% (Cost $125,903)				126,862
OTHER ASSETS, NET OF LIABILITIES - 0.61%				783
TOTAL NET ASSETS - 100.00%			$	127,645

Percentages are stated as a percent of net assets.

^A  ADR - American Depositary Receipt.

^B  Non-income producing security.

^C  GDR - Global Depositary Receipt.

^D  NVDR - Non Voting Depositary Receipt

^E  PLC – Public Limited Company.

^F  Valued at fair value pursuant to procedures approved by the Board of Trustees.

See accompanying notes

14

American Beacon Emerging Markets Fund^SM

Schedule of Investments

October 31, 2013

Futures Contracts Open on October 31, 2013 (000’s):

Description	Type	Number of Contracts	Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
Mini MSCI Emg Mkt Dec Futures	Long	130	December, 2013	$	6,655	$	56
				$	6,655	$	56

Foreign Currency Contracts Open on October 31, 2013:

Type	Currency		Principal Amount Covered by Contract		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)		Net Unrealized Appreciation/ (Depreciation)
Sell		JPY		121,344		11/27/2013	BOA	$	1,060	$	—	$	1,060
Sell		JPY		121,344		11/27/2013	SSB		1,045		—		1,045
								$	2,105	$	—	$	2,105

Glossary:

Counterparty Abbreviations:
BOA	Bank of America, N.A.
SSB	State Street Bank
Currency Abbreviations:
JPY	Japanese Yen

See accompanying notes

15

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Australia - 0.86%
Common Stocks - (Cost $14,521)
Ansell Ltd.A		373,033	$	6,872
James Hardie Industries PLC, CDI I		1,100,370		11,367
Total Australia				18,239
Austria - 0.31%
Common Stocks - (Cost $5,930)
Uniqa Insurance Group AG A		542,807		6,648
Belgium - 1.18%
Common Stocks - (Cost $14,490)
Anheuser-Busch InBev N.V.		187,012		19,450
KBC Groep N.V.A		102,483		5,587
Total Belgium				25,037
Canada - 2.17%
Common Stocks - (Cost $42,642)
Imperial Oil Ltd.AB		317,800		13,878
MDA Corp.A B C		116,600		8,896
Rogers Communications, Inc., Class B		218,100		9,898
Suncor Energy, Inc.		170,600		6,200
Talisman Energy, Inc.		578,700		7,215
Total Canada				46,087
Denmark - 0.34%
Common Stocks - (Cost $7,635)
Carlsberg A.S. Class BA		71,799		7,169
Finland - 0.69%
Common Stocks - (Cost $8,935)
Sampo OYJ, Class A		312,053		14,783
France - 11.78%
Common Stocks - (Cost $184,338)
Alstom S.A.		231,990		8,631
AXA S.A.		698,972		17,462
BNP Paribas		671,414		49,719
Cap Gemini S.A.		143,105		9,414
Cie de St-Gobain		157,400		8,280
Cie Generale des Etablissements Michelin		90,840		9,499
France Telecom S.A.		438,720		6,022
GDF Suez		266,014		6,624
Legrand S.A.		251,286		14,272
Peugeot S.A.		144,287		1,901
Sanofi		499,636		53,280
Technip S.A.		155,215		16,259
Total S.A.		353,909		21,751
Valeo S.A.C		165,540		16,442
Vivendi S.A.		442,753		11,238
Total France				250,794
Germany - 10.30%
Common Stocks - (Cost $146,997)
Bayer AG Reg		344,011		42,757
Bayerische Motoren Werke AG		125,228		14,204
Commerzbank AGA		401,960		5,168

	Shares		Fair Value
			(000’s)
Daimler AG		249,594	$	20,482
Deutsche Boerse AGA		98,550		7,420
Deutsche Post AG Reg		230,310		7,794
E.ON AG		159,760		2,919
HeidelbergCement AG		133,810		10,548
Infineon Technologies AG		1,022,540		9,898
Linde AG		39,207		7,450
Merck KGaA		155,275		25,847
METRO AG		219,610		10,297
Muenchener Rueckversicherungs AG Reg		68,556		14,325
SAP AG		105,552		8,292
Siemens AG Reg		249,557		31,912
Total Germany				219,313
Greece - 0.16%
Common Stocks - (Cost $3,831)
Piraeus Bank S.A. A		1,655,581		3,439
Hong Kong/China - 1.58%
Common Stocks - (Cost $26,848)
AIA Group Ltd.		1,662,800		8,439
Cheung Kong Holdings Ltd.		7,826		123
China Merchants Holdings Intl.		1,320,000		4,673
CNOOC Ltd.		7,028,000		14,396
Hutchison Whampoa Ltd.		238,000		2,964
The Link REITC		10,512		53
Yue Yuen Industrial Holdings Ltd.		1,061,167		2,915
Total Hong Kong/China				33,563
Ireland - 0.95%
Common Stocks - (Cost $15,891)
CRH PLC I		608,660		14,863
Smurfit Kappa Group PLC I		217,948		5,312
Total Ireland				20,175
Italy - 2.25%
Common Stocks - (Cost $38,756)
Atlantia SpA		481,177		10,551
ENI SpA		877,966		22,231
Intesa Sanpaolo SpA		2,847,656		7,080
Snam Rete Gas SpA		753,324		3,883
UniCredit SpA		563,187		4,236
Total Italy				47,981
Japan - 11.59%
Common Stocks - (Cost $187,967)
AEON Financial Service Co., Ltd.B		210,700		6,439
Asics Corp.		615,280		10,806
Daikin Industries Ltd.		152,900		8,754
Daiwa House Industry Co. Ltd.		549,000		10,949
Don Quijote Co., Ltd.		263,100		17,445
Hitachi Ltd.		1,027,000		7,154
ITOCHU Corp.		523,400		6,270
Japan Tobacco, Inc.		309,100		11,159
JGC Corp.		338,000		12,873
KDDI Corp.		336,600		18,177
Konica Minolta, Inc.		1,253,500		10,351
LIXIL Group Corp.		468,700		10,954
Nissan Motor Co., Ltd.		1,060,100		10,587
Seven & I Holdings Co., Ltd.		306,700		11,291
Shin-Etsu Chemical Co., Ltd.		203,200		11,428

See accompanying notes

16

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Sumitomo Mitsui Financial Group, Inc.		552,900	$	26,513
Tokyo Electron Ltd.		133,700		7,302
Toyota Motor Corp.		459,000		29,689
Trend Micro, Inc.A		284,900		10,546
Yahoo Japan Corp.		1,741,500		8,094
Total Japan				246,781
Luxembourg - 0.55%
Common Stocks - (Cost $8,147)
RTL Group S.A.		107,460		11,672
Netherlands - 6.50%
Common Stocks - (Cost $108,490)
Akzo Nobel		494,073		35,929
European Aeronautic Defence and Space Co., N.V.		175,106		12,033
ING Groep N.V. CVAA		1,120,680		14,277
Koninklijke Philips Electronics N.V.		240,627		8,521
PostNL N.V.		1,768,987		9,276
Randstad Holding N.V.		49,730		3,069
Reed Elsevier N.V.		1,232,569		24,826
SBM Offshore N.V.A D		692,530		14,509
TNT Express N.V.		1,003,090		9,261
Unilever N.V., GDRE		170,393		6,749
Total Netherlands				138,450
Norway - 1.18%
Common Stocks - (Cost $19,020)
Petroleum Geo-Services ASAA		468,387		5,681
Statoil ASA		340,020		8,054
Telenor ASA		472,140		11,341
Total Norway				25,076
Portugal - 0.45%
Common Stocks - (Cost $11,695)
Galp Energia SGPS S.A.A		358,780		6,079
Portugal Telecom SGPS S.A. RegB		771,300		3,482
Total Portugal				9,561
Singapore - 2.29%
Common Stocks - (Cost $36,088)
DBS Group Holdings Ltd.		1,156,342		15,583
Flextronics International Ltd.A		1,277,170		10,077
Sembcorp Industries Ltd.		1,160,000		4,968
Sembcorp Marine Ltd.		2,058,000		7,455
Singapore Telecommunications Ltd.		3,526,000		10,730
Total Singapore				48,813
South Korea - 2.56%
Common Stocks - (Cost $49,087)
Hyundai Mobis		18,049		5,096
KB Financial Group, Inc., ADRF		182,978		7,101
KT&G Corp.		133,562		9,758
LG Electronics, Inc.		119,709		7,674
POSCO		34,148		10,190
Samsung Electronics Co., Ltd.		1,321		1,824
Samsung Electronics Co., Ltd., GDRE		9,122		6,335
SK Telecom Co., Ltd.		30,873		6,607
Total South Korea				54,585

	Shares		Fair Value
			(000’s)
Spain - 2.64%
Common Stocks - (Cost $40,372)
Banco Bilbao Vizcaya Argentaria S.A.		487,022	$	5,706
Mediaset Espana Comunicacion S.A.		776,703		9,491
Red Electrica Corporation S.A.A		227,574		14,186
Repsol S.A.		312,385		8,389
Tecnicas Reunidas S.A.		141,301		7,281
Telefonica S.A.		637,086		11,232
Total Spain				56,285
Sweden - 3.16%
Common Stocks - (Cost $48,501)
Assa Abloy AB, Class B		324,195		16,095
Autoliv, Inc.		93,749		8,413
Ericsson LM, Class B		788,560		9,413
Getinge AB, Class B		313,520		9,943
Skandinaviska Enskilda Banken AB, Class A		1,011,052		12,247
Swedbank AB, Class A		424,858		11,080
Total Sweden				67,191
Switzerland - 7.82%
Common Stocks - (Cost $121,978)
ABB Ltd.A		275,570		7,037
Credit Suisse Group AG Reg		251,836		7,835
GAM Holding AG		558,826		10,470
Givaudan S.A. Reg		7,622		10,820
Novartis AG Reg		690,352		53,602
Roche Holding AG Genusschein		90,825		25,145
Swatch Groug AGA		16,583		10,609
Swiss Re AG		104,450		9,175
UBS AG Reg		1,150,959		22,275
Zurich Insurance Group AG		33,975		9,394
Total Switzerland				166,362
Taiwan - 0.01%
Common Stocks - (Cost $221)
Noble Group Ltd.		283,000		235
United Kingdom - 22.38%
Common Stocks - (Cost $382,091)
Aviva PLC I		3,338,669		24,042
BAE Systems PLC I		1,564,304		11,405
Balfour Beatty PLC I		1,430,406		6,553
Barclays PLC I		2,745,730		11,605
BG Group PLC I		1,000,144		20,422
BP PLC I		1,197,900		9,271
British American Tobacco PLC I		572,302		31,530
Carnival PLCA I		196,777		7,017
Direct Line Insurance Group		2,733,421		9,861
GlaxoSmithKline PLC I		450,970		11,884
Glencore Xstrata PLCA I		2,156,531		11,756
HSBC Holdings PLC I		2,236,606		24,622
Informa PLC I		1,865,264		16,733
Kingfisher PLC I		1,692,500		10,244
Ladbrokes PLCA I		1,281,071		3,925
Lloyds Banking Group PLCA I		34,898,063		43,382
Marks & Spencer Group PLC I		1,472,810		11,890
Michael Page International PLC I		776,247		6,031
Prudential PLC I		918,984		18,846
Reed Elsevier PLC I		745,924		10,453
Rexam PLCA I		3,056,344		25,458

See accompanying notes

17

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Rio Tinto PLC I		156,808	$	7,940
Rolls-Royce Holdings PLC I		399,000		7,357
Royal Dutch Shell PLC, Class A I		956,362		31,842
Royal Dutch Shell PLC, Class B I		256,246		8,873
Standard Chartered PLC I		705,899		16,972
Taylor Wimpey PLC I		4,741,878		8,379
Tesco PLC I		4,505,929		26,313
Unilever PLC I		305,046		12,350
Vodafone Group PLC I		8,139,006		29,297
Total Common Stocks				476,253
Preferred Stocks - (Cost $55)
Rolls-Royce Holdings PLCAG I		34,314,000		55
Total United Kingdom				476,308
SHORT-TERM INVESTMENTS- 5.02%
American Beacon U.S. Government Money Market Select Fund, Select ClassH		10,000,000		10,000
JPMorgan U.S. Government Money Market Fund, Capital Class		96,787,806		96,788
Total Short-Term Investments (Cost $106,788)				106,788
SECURITIES LENDING COLLATERAL - 1.14%
American Beacon U.S. Government Money Market Select Fund, Select ClassH		19,596,044		19,596
DWS Government and Agency Securities Portfolio, Institutional Class		4,576,001		4,576
Total Securities Lending Collateral (Cost $24,172)				24,172
TOTAL INVESTMENTS - 99.86% (Cost $1,655,486)				2,125,507
OTHER ASSETS, NET OF LIABILITIES - 0.14%				3,067
TOTAL NET ASSETS - 100.00%			$	2,128,575

Percentages are stated as a percent of net assets.

^A  Non-income producing security.

^B  All or a portion of this security is on loan at October 31, 2013.

^C  REIT - Real Estate Investment Trust.

^D  Private Placement.

^E  GDR - Global Depositary Receipt.

^F  ADR - American Depositary Receipt.

^G  Valued at fair value pursuant to procedures approved by the Board of Trustees.

^H  The Fund is affiliated by having the same investment advisor.

^I  PLC - Public Limited Company.

See accompanying notes

18

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2013

Futures Contracts Open on October 31, 2013 (000’s):

Description	Type	Number of Contracts		Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
Amsterdam Index Future	Long		34	November, 2013	$	3,614	$	84
CAC 40 Index Futures	Long		227	December, 2013		13,219		364
DAX Index Futures	Long		39	December, 2013		11,973		444
FTSE 100 Index Futures	Long		269	December, 2013		28,993		534
FTSE MIB Index Futures	Long		23	December, 2013		3,024		191
Hang Seng Index Futures	Long		26	November, 2013		3,897		73
IBEX 35 Index Future	Long		34	November, 2013		4,557		76
OMX 30 Index Futures	Long		212	November, 2013		4,203		31
S&P TSX 60 Index Futures	Long		84	December, 2013		12,342		507
SPI 200 Futures	Long		85	December, 2013		10,898		277
TOPIX Index Futures	Long		226	December, 2013		27,631		179
					$	124,351	$	2,760

Foreign Currency Contracts Open on October 31, 2013:

Type	Currency	Principal Amount Covered by Contract		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation/ (Depreciation)
Buy	AUD		6,017,212		12/9/2013	RBS	$	275,908	$	—		$	275,908
Buy	AUD		1,069,349		12/9/2013	BOA		4,104		—			4,104
Buy	AUD		1,059,920		12/9/2013	CBK		—		(3,042	)		(3,042	)
Sell	AUD		383,796		12/9/2013	GLM		—		(12,531	)		(12,531	)
Buy	CAD		7,904,045		12/9/2013	GLM		93,675		—			93,675
Buy	CAD		1,298,337		12/9/2013	BOA		—		(7,258	)		(7,258	)
Buy	CAD		1,134,488		12/9/2013	CBK		4,241		—			4,241
Sell	CAD		491,547		12/9/2013	GLM		—		(3,631	)		(3,631	)
Buy	CHF		8,467,732		12/9/2013	CBK		264,690		—			264,690
Buy	CHF		1,204,951		12/9/2013	RBS		—		(4,923	)		(4,923	)
Buy	CHF		973,442		12/9/2013	BOA		—		(9,176	)		(9,176	)
Sell	CHF		487,272		12/9/2013	BOA		—		(14,532	)		(14,532	)
Buy	EUR		18,868,598		12/9/2013	CBK		573,819		—			573,819
Buy	EUR		3,300,918		12/9/2013	RBS		—		(282	)		(282	)
Buy	EUR		3,439,418		12/9/2013	SOG		—		(42,747	)		(42,747	)
Sell	EUR		1,098,496		12/9/2013	BOA		—		(29,170	)		(29,170	)
Buy	GBP		17,297,742		12/9/2013	BRC		532,607		—			532,607
Buy	GBP		2,886,964		12/9/2013	RBS		—		(8,773	)		(8,773	)
Buy	GBP		1,994,105		12/9/2013	SOG		—		(474	)		(474	)
Sell	GBP		974,611		12/9/2013	BOA		—		(24,927	)		(24,927	)
Buy	JPY		14,829,058		12/9/2013	UAG		165,317		—			165,317
Buy	JPY		2,663,145		12/9/2013	BOA		—		(38,669	)		(38,669	)
Buy	JPY		3,365,012		12/9/2013	BOA		—		(6,209	)		(6,209	)
Sell	JPY		828,963		12/9/2013	SOG		—		(11,479	)		(11,479	)
Buy	SEK		2,172,075		12/9/2013	CBK		48,139		—			48,139
Buy	SEK		414,309		12/9/2013	RBS		—		(2,908	)		(2,908	)
Buy	SEK		155,424		12/9/2013	BOA		—		(2,391	)		(2,391	)
Sell	SEK		96,523		12/9/2013	RBS		—		(1,793	)		(1,793	)
							$	1,962,500	$	(224,915	)	$	1,737,585

Glossary:

Counterparty Abbreviations:
BOA	Bank of America, N.A.	GLM	Goldman Sachs Bank	UAG	UBS AG
BRC	Barclays Bank PLC	RBS	Royal Bank of Scotland
CBK	Citibank, N.A.	SOG	Societe Generale
Currency Abbreviations:
AUD	Australian Dollar	EUR	Euro	SEK	Swedish Krona
CAD	Canadian Dollar	GBP	British Pound
CHF	Swiss Franc	JPY	Japanese Yen

See accompanying notes

19

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2013 (in thousands, except share and per share amounts)

	Emerging Markets Fund			International Equity Fund
Assets:
Investments in unaffiliated securities, at fair value A D	$	126,862		$	2,095,911
Investments in affiliated securities, at fair value B		—			29,596
Foreign currency, at fair value C		628			130
Foreign currency deposits with brokers, at fair value E		—			14,063
Cash		—			6,333
Deposit with brokers for futures contracts		434			—
Receivable for investments sold		789			4,420
Receivable for variation margin on open futures contracts		—			2,760
Dividends and interest receivable		215			3,369
Receivable for fund shares sold		284			3,961
Receivable for tax reclaims		6			797
Receivable for expense reimbursement (Note 2)		1			6
Unrealized appreciation from foreign currency contracts		2			1,963
Prepaid expenses		16			56
Other assets		1			—
Total assets		129,238			2,163,365
Liabilities:
Payable for investments purchased		1,050			3,490
Payable upon return of securities loaned		—			24,172
Payable for fund shares redeemed		51			4,159
Payable for variation margin from open futures contracts		74			—
Management and investment advisory fees payable		298			1,820
Administrative service and service fees payable		10			607
Transfer agent fees payable		2			106
Custody and fund accounting fees payable		24			71
Professional fees payable		50			34
Trustee fees payable		3			24
Payable for prospectus and shareholder reports		10			71
Unrealized depreciation from foreign currency contracts		—			225
Other liabilities		21			11
Total liabilities		1,593			34,790
Net Assets	$	127,645		$	2,128,575
Analysis of Net Assets:
Paid-in-capital		129,271			1,773,726
Undistributed net investment income		903			31,437
Accumulated net realized (loss)		(3,546	)		(151,298	)
Unrealized appreciation of investments		959			470,212
Unrealized appreciation of foreign currency contracts		2			1,738
Unrealized appreciation of futures contracts		56			2,760
Net assets	$	127,645		$	2,128,575
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		819,718			43,383,926
Y Class		160,514			21,239,570
Investor Class		559,459			16,994,193
Advisor Class		N/A			256,940
Retirement Class		N/A			35,426
A Class		41,249			206,529
C Class		5,198			62,643
AMR Class		8,858,855			23,217,272

See accompanying notes

20

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2013 (in thousands, except share and per share amounts)

	Emerging Markets Fund		International Equity Fund
Net assets (not in thousands):
Institutional Class	$	9,961,512	$	870,729,423
Y Class	$	1,962,093	$	441,945,876
Investor Class	$	6,674,975	$	337,424,064
Advisor Class	$	N/A	$	5,231,812
Retirement Class	$	N/A	$	754,850
A Class	$	491,293	$	4,113,299
C Class	$	61,507	$	1,219,537
AMR Class	$	108,493,177	$	467,156,090
Net asset value, offering and redemption price per share:
Institutional Class	$	12.15	$	20.07
Y Class	$	12.22	$	20.81
Investor Class	$	11.93	$	19.86
Advisor Class	$	N/A	$	20.36
Retirement Class	$	N/A	$	21.31
A Class (offering price $12.64 and $21.14, respectively)	$	11.91	$	19.92
C Class	$	11.83	$	19.47
AMR Class	$	12.25	$	20.12
A        Cost of investments in unaffiliated securities	$	125,903	$	1,625,890
B        Cost of investments in affiliated securities	$	—	$	29,596
C        Cost of foreign currency	$	630	$	128
D        Fair value of securities on loan	$	—	$	22,989
E         Cost of foreign currency deposits with brokers	$	—	$	13,910

See accompanying notes

21

American Beacon Funds^SM

Statements of Operations

For the year ended October 31, 2013 (in thousands)

	Emerging Markets Fund			International Equity Fund
Investment Income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	2,672		$	49,458
Dividend income from affiliated securities		—			4
Interest income		—			44
Income derived from securities lending		—			2,127
Total investment income		2,672			51,633
Expenses:
Management and investment advisory fees (Note 2)		951			5,433
Administrative service fees (Note 2):
Institutional Class		25			2,183
Y Class		6			736
Investor Class		22			1,118
Advisor Class		—			9
Retirement Class		—			2
A Class		3			11
C Class		—			3
AMR Class		49			206
Transfer agent fees:
Institutional Class		1			339
Y Class		—			156
Investor Class		5			96
Advisor Class		—			1
A Class		—			1
AMR Class		2			16
Custody and fund accounting fees		384			476
Professional fees		129			106
Registration fees and expenses		62			137
Service fees (Note 2):
Y Class		2			244
Investor Class		18			1,271
Advisor Class		—			7
Retirement Class		—			1
A Class		1			4
C Class		—			1
Distribution fees (Note 2):
Advisor Class		—			7
Retirement Class		—			2
A Class		2			7
C Class		—			7
Prospectus and shareholder report expenses		20			170
Trustee fees		8			120
Other expenses		17			259
Total expenses		1,707			13,129
Net fees waived and expenses (reimbursed) or recouped (Note 2)		(46	)		(88	)
Net expenses		1,661			13,041
Net investment income		1,011			38,592
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from: B
Investments		4,224			63,873
Commission recapture (Note 3)		1			51
Foreign currency transactions		(1,806	)		(6,336	)
Futures contracts		561			17,348
Change in net unrealized appreciation or (depreciation) of:
Investments		6,371			327,981
Foreign currency transactions		(1,130	)		(1,520	)
Futures contracts		86			3,047
Net gain from investments		8,307			404,444
Net increase in net assets resulting from operations	$	9,318		$	443,036
A        Foreign taxes	$	316		$	4,312
B        Net of foreign withholding taxes on capital gains	$	3		$	—

See accompanying notes

22

American Beacon Funds^SM

Statements of Changes of Net Assets (in thousands)

	Emerging Markets Fund						International Equity Fund
	Year Ended  October 31, 2013			Year Ended  October 31, 2012			Year Ended October 31, 2013			Year Ended October 31, 2012
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	1,011		$	1,410		$	38,592		$	37,716
Net realized gain (loss) from investments, futures contracts, and foreign currency transactions		2,980			(635	)		74,936			(69,509	)
Change in net unrealized appreciation or (depreciation) from investments, futures contracts, and foreign currency transactions		5,327			2,709			329,508			152,378
Net increase in net assets resulting from operations		9,318			3,484			443,036			120,585
Distributions to Shareholders:
Net investment income:
Institutional Class		(92	)		(105	)		(16,101	)		(18,420	)
Y Class		(21	)		(62	)		(55	)		(32	)
Investor Class		(55	)		(71	)		(10,473	)		(12,396	)
Advisor Class		—			—			(106	)		(28	)
A Class		(5	)		(4	)		(40	)		(13	)
C Class		—			—			(5	)		(3	)
AMR Class		(1,078	)		(1,312	)		(10,213	)		(14,493	)
Net realized gain from investments:
Institutional Class		—			(905	)		—			—
Y Class		—			(572	)		—			—
Investor Class		—			(1,012	)		—			—
A Class		—			(46	)		—			—
C Class		—			(1	)		—			—
AMR Class		—			(12,236	)		—			—
Net distributions to shareholders		(1,251	)		(16,326	)		(36,993	)		(45,385	)
Net increase (decrease) in net assets from capital share transactions		(2,995	)		(1,769	)		269,606			88,615
Net increase (decrease) in net assets		5,072			(14,611	)		675,649			163,815
Net Assets:
Beginning of period		122,573			137,184			1,452,926			1,289,111
End of Period *	$	127,645		$	122,573		$	2,128,575		$	1,452,926
*    Includes undistributed net investment income (loss) of	$	903		$	1,040		$	31,437		$	37,686

See accompanying notes

23

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), which is comprised of twenty-seven Funds, 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 Fund and the American Beacon International Equity 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

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
Retirement Class	Investors investing through an intermediary
A Class	General public and investors investing through an intermediary with applicable sales charges, which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”)
C Class	General public and investors investing through an intermediary with applicable sales charges, which may include a CDSC
AMR Class	Investors in the tax-exempt retirement and benefit plans of the Manager, AMR Corporation, and its affiliates

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include administrative service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.

New Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments in the ASU enhance disclosures about offsetting of financial assets and liabilities to enable investors to understand the effect of these arrangements on a fund’s financial position. In January 2013, FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. The amendments in ASU No. 2013-01 clarify the scope of disclosures required by ASU No. 2011-11. These ASUs are effective for annual periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Funds believe the adoption of these ASUs will not have a material impact on its financial statement disclosures.

24

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

2. Transactions with Affiliates

Management Agreement

The Trust and the Manager are parties to a Management Agreement that obligates the Manager to provide or oversee the provision of all investment advisory, fund management, and securities lending services. Investment assets of the Funds are managed by multiple 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 unaffiliated investment advisors hired by the Manager to direct investment activities of the Funds. Management fees paid during the year ended October 31, 2013 were as follows (dollars in thousands):

	Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Net Amounts Retained by Manager
Emerging Markets		0.81	%	$	951	$	893	$	58
International Equity		0.32	%		5,433		4,315		1,118

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, a fee up to 25% of such loan fees. This fee is netted against securities lending income in the Statements of Operations. During the year ended October 31, 2013, securities lending fees paid to the Manager on behalf of the International Equity Fund was $241,760.

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, 0.40% of the average daily net assets of the A and C Classes, and 0.05% of the average daily net assets of the AMR Class of the Funds.

Distribution Plans

The Funds, except for the Advisor, Retirement, A, and C Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no 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.

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, Retirement, A, and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes, 0.50% of the average daily net assets of the Retirement Class, and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, Advisor, Retirement, A, and C 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, 0.15% of the average daily net assets of the A and C Classes, 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.

25

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Brokerage Commissions

Affiliated entities of an investment advisor to the Emerging Markets Fund received net commissions on purchases and sales of the Fund’s portfolio securities totaling $1,753 for the year ended October 31, 2013.

Investment in Affiliated Funds

The Funds may invest in the American Beacon Money Market Select Fund (the “MM Select Fund”)and the U.S. Government Money Market 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 Select Funds and the 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 Management and Administrative Service fees totaling 0.10% of the average daily net assets of the Select Funds. During the year ended October 31, 2013, fees earned by the Manager from the Select Funds were as follows:

	Direct Investments in Select Funds		Securities Lending Collateral Invested in Select Funds		Total
International Equity	$	8,927	$	30,495	$	39,422

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 year ended October 31, 2013, the Funds did not utilize the credit facility.

Expense Reimbursement Plan

The Manager voluntary and contractually agreed to reimburse the following Funds to the extent that total operating expenses exceeded a Fund’s expense cap. For the year ended October 31, 2013, the Manager reimbursed expenses as follows:

		Expense Caps
Fund	Class	11/1/12 to 2/28/13			3/1/13 to 10/31/13			Reimbursed (Recouped) Expenses			Expiration of Reimbursements
Emerging Markets	Institutional		1.35	%		1.35	%	$	24,715			2016
Emerging Markets	Y		1.45	%		1.45	%		6,073			2016
Emerging Markets	Investor		1.79	%		1.79	%		12,067			2016
Emerging Markets	A		1.79	%		1.79	%		2,550			2016
Emerging Markets	C		2.54	%		2.54	%		288			2016
International Equity	Institutional*		0.72	%*		0.71	%*		88,916			2016
International Equity	Retirement		1.47	%		1.47	%		(38	)		2016
International Equity	A		1.25	%		1.25	%		(1,015	)		2016
International Equity	C		1.99	%		1.99	%		(266	)		2016

* Voluntary Reimbursement

Of these amounts, $1,192 and $6,195 were a receivable from the Manager to the Emerging Markets and International Equity Funds respectively, at October 31, 2013. The Funds have adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of fees waived or expenses reimbursed for a period of up to three years. However, reimbursement will occur only if the Class’ average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing its expense ratio to exceed the previously agreed upon contractual expense limit. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

26

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Fund	Recovered Expenses		Excess Expense Carryover		Expiration of Reimbursed Expenses
Emerging Markets	$	—		67,581		2014
Emerging Markets		—		28,833		2015
International Equity		1,312		2,051		2014
International Equity		7		19,484		2015

The Manager recouped excess carryover expenses of $31 from the Retirement Class expiring in 2014 and $7 expiring in 2015, $1,015 from the A Class expiring in 2014, and $266 from the C Class expiring in 2014 from the International Equity Fund for the period ended October 31, 2013. The Funds did not record a liability for potential reimbursements, due to the current assessment that a reimbursement is unlikely.

Sales Commissions

The Funds’ distributor, Foreside Fund Services, LLC (“Foreside”), may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. For the year ended October 31, 2013, Foreside collected $424 and $5,192 for Emerging Markets and International Equity Funds, respectively from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2013, there were no CDSC fees collected for Class A Shares.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2013, $440 in CDSC fees were collected for the Emerging Markets Fund. There were no CDSC fees for the International Equity Fund

3. Security Valuation and Fair Value Measurements

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, including exchange-traded funds (“ETFs”) 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.

Investments in open-end mutual funds are valued at the closing net asset value (“NAV”) 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 fair value.

Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Trust’s Board of Trustees (the “Board”).

Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker, an amount of cash or U.S. Government and Agency Obligations in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized, but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statements of Assets and Liabilities.

27

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

For valuation purposes, the last quoted prices of non-U.S. equity securities may be adjusted under the circumstances described below. If the Fund determines that developments between the close of a foreign market and the close of the Exchange will, in its judgment, materially affect the value of some or all of its portfolio securities, the Fund will adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of the close of the Exchange. In deciding whether it is necessary to adjust closing prices to reflect fair value, the Fund reviews a variety of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. A Fund may also fair value securities in other situations, such as when a particular foreign market is closed, but the Fund is open. The Fund uses outside pricing services to provide it with closing prices and information to evaluate and/or adjust those prices. The Fund cannot predict how often it will use closing prices and how often it will determine it necessary to adjust those prices to reflect fair value. As a means of evaluating its security valuation process, the Fund routinely compares closing prices, the next day’s opening prices in the same markets, and adjusted prices.

Valuation Inputs

Various inputs may be used to determine the fair value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others.

Level 3 – Prices determined using other significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Common stocks and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Valuation adjustments may be applied to certain securities that are solely traded on a foreign exchange to account for the market movement between the close of the foreign market and the close of the Exchange. These securities are valued using pricing service providers that consider the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments. Securities using these valuation adjustments are categorized as Level 2 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy. Short-term investments having a maturity of 60 days or less are generally valued at amortized cost which approximates fair value. These investments are categorized as Level 2 of the fair value hierarchy.

Over-the-counter (“OTC”) financial derivative instruments, such as foreign currency contracts, derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. These contracts are normally valued on the basis of broker dealer quotations or pricing service providers. Depending on the product and the terms of the transaction, the fair value of the financial derivative contracts can be estimated by a pricing service provider using a series of techniques, including simulation

28

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

pricing models. The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest rates, curves, dividends, and exchange rates. Financial derivatives that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

The Funds’ investments are summarized by level based on the inputs used to determine their values. U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) also requires all transfers between any levels to be disclosed. The end of the period timing recognition has been adopted for the transfers between levels of each Fund’s assets and liabilities. During the year ended October 31, 2013, there were no transfers between levels. As of October 31, 2013, the investments were classified as described below (in thousands):

Emerging Markets*	Level 1		Level 2		Level 3		Total
Foreign Preferred Stocks	$	3,912	$	—	$	—	$	3,912
Foreign Common Stocks		115,592		372		—		115,964
Foreign Convertible Preferred Bonds		—		145		—		145
U.S. Common Stocks		139		—		—		139
Short-Term Investments – Money Markets		6,702		—		—		6,702
Total Investments in Securities	$	126,345	$	517	$	—	$	126,862
Financial Derivative Instruments - Assets
Futures Contracts	$	56	$	—	$	—	$	56
Forward Currency Contracts		2		—		—		2
Total Financial Derivative Instruments - Assets	$	58	$	—	$	—	$	58
International Equity*	Level 1		Level 2		Level 3		Total
Foreign Preferred Stocks	$	—	$	55	$	—	$	55
Foreign Common Stocks		1,994,492		—		—		1,994,492
Short-Term Investments – Money Markets		106,788		—		—		106,788
Securities Lending Collateral invested in Money Market Funds		24,172		—		—		24,172
Total Investments in Securities	$	2,125,452	$	55	$	—	$	2,125,507
Financial Derivative Instruments - Assets
Futures Contracts	$	2,760	$	—	$	—	$	2,760
Foreign Currency Contracts		—		1,963		—		1,963
Total Financial Derivative Instruments - Assets	$	2,760	$	1,963	$	—	$	4,723
Financial Derivative Instruments - Liabilities
Futures Contracts	$	—	$	—	$	—	$	—
Foreign Currency Contracts		—		225		—		225
Total Financial Derivative Instruments - Liabilities	$	—	$	225	$	—	$	225

* Refer to the Schedules of Investments for country information.

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 NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Funds. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

29

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

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 fair values of securities held and is reported with all other foreign currency gains and losses in the Funds’ Statements of Operations.

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. 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. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Redemption Fees

The AMR Class of the International Equity Fund and all Classes of the Emerging Markets Fund 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 trustees 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.

30

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

4. Securities and Other Investments

Restricted Securities

Certain Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities may be sold privately, but are required to be registered or exempted from such registration before being sold to the public. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. Disposal of restricted securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted securities outstanding at the year ended October 31, 2013 are disclosed in the Notes to the Schedules of Investments.

Other Investment Company Securities and Other Exchange Traded Products

The Funds may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, exchange-traded notes (“ETNs”), unit investment trusts, and other investment companies of the Trust. The Funds may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, a Fund becomes a shareholder of that investment company. As a result, Fund shareholders indirectly will bear a Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses Fund shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

5. Financial Derivative Instruments

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 Fund’s 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.

For the six months ended October 31, 2013, the Funds entered into foreign currency exchange contracts primarily for return enhancement and hedging.

The Funds’ foreign currency contract notional dollar values outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following tables illustrate the quarterly volume of foreign currency contracts. For the purpose of this disclosure, volume is measured by the amounts bought and sold in USD (in thousands).

	Outstanding Contract Amounts Bought
For the Quarter Ended	April 30 2013		October 31, 2013
Emerging Markets	$	—	$	—
International Equity		200,873		100,516

	Outstanding Contract Amounts Sold
For the Quarter Ended	April 30 2013		October 31, 2013
Emerging Markets	$	280	$	243
International Equity		60,938		4,361

31

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Futures Contracts

Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Funds may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.

Upon entering into a futures contract, the Funds are required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. A Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as Cash deposited with broker on the 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.

For the six months ended October 31, 2013, the Funds entered into future contracts primarily for return enhancement, hedging and exposing cash to markets.

The Funds’ average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at period end.

	Average Futures Contracts Outstanding
For the Quarter Ended	April 30, 2013		October 31, 2013
Emerging Markets		10		9
International Equity		17		9

The following is a summary of the Funds’ derivative financial instruments categorized by risk exposure (in thousands) ^(1) (2):

Fair Values of financial instruments on the Statement of Assets and Liabilities as of October 31, 2013:

Assets	Derivative	Emerging Markets		International Equity
Unrealized appreciation of foreign currency contracts	Foreign Exchange Contract	$	2	$	1,963
Unrealized appreciation of futures contracts	Equity Contract		56		2,760
Liabilities	Derivative	Emerging Markets		International Equity
Unrealized depreciation of foreign currency contracts	Foreign Exchange Contract	$	—	$	225
Unrealized depreciation of futures contracts	Equity Contract		—		—

The effect of financial derivative instruments on the Statements of Operations for the year ended October 31, 2013:

Statements of Operations:	Derivative	Emerging Markets			International Equity
Net realized gain (loss) from foreign currency contracts	Foreign Exchange Contract	$	(1,806	)	$	(6,336	)
Net realized gain (loss) from futures contracts	Equity Contract		561			17,348

32

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Statements of Operations:	Derivative	Emerging Markets			International Equity
Change in net unrealized appreciation or (depreciation) of foreign currency contracts	Foreign Exchange Contract	$	(1,130	)	$	(1,520	)
Change in net unrealized appreciation or (depreciation) of futures contracts	Equity Contract		86			3,047

(1) See Note 3 in the Notes to Financial Statements for additional information.

(2) The volume of derivative activity described above is reflective of the derivative activity through the current period of operations.

6. Principal Risks

In the normal course of business the Fund trades financial instruments and enters into financial transactions where risk of potential loss exists. Security values fluctuate (market risk) and may decline due to factors affecting securities markets in general, particular industries represented in the securities markets or conditions specifically related to a particular company. Failure of the other party to a transaction to perform (credit and counterparty risk), for example by not making principal and interest payments when due, reduces the value of the issuer’s debt and could reduce the Fund’s income. Similar to credit risk, the Fund may be exposed to counterparty risk, or the risk that an institution or other entity with which the Funds have unsettled or open transactions will fail to make required payments or otherwise comply with the terms of the instrument, transaction or contract. The potential loss could exceed the value of the financial assets recorded in the financial statements. Some of the Fund’s investments may be illiquid and the Fund may not be able to vary the portfolio investments in response to changes in economic and other conditions. If a Fund is required to liquidate all or a portion of its investments quickly, the Fund may realize significantly less than the value at which it previously recorded those investments.

Market Risks

The Fund’s investments in financial derivatives and other financial instruments expose the Fund to various risks such as, but not limited to, interest rate, foreign currency and equity risks.

Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income’s market price to interest rate (i.e. yield) movements.

If the Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, they will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Fund’s investments in foreign currency denominated securities may reduce the returns of the Fund.

The fair values of equities, such as common stocks and preferred securities or equity related investments such as futures, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

33

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

7. Federal Income and Excise Taxes

It is the policy of each Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, each Fund is treaded as a single entity for the purpose of determining such qualification.

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, 2013 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. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

A Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation or depreciation, as applicable, as the income is earned or capital gains are recorded.

The tax character of distributions paid were as follows (in thousands):

	Emerging Markets				International Equity
	Year Ended October 31, 2013		Year Ended October 31, 2012		Year Ended October 31, 2013		Year Ended October 31, 2012
Distributions paid from: Ordinary income*
Institutional Class	$	92	$	105	$	16,101	$	18,420
Y Class		21		62		55		32
Investor Class		55		71		10,473		12,396
Advisor Class		—		—		106		28
A Class		5		4		40		13
C Class		—		—		5		3
AMR Class		1,078		1,312		10,213		14,493
Long-Term Capital gains
Institutional Class		—		905		—		—
Y Class		—		572		—		—
Investor Class		—		1,012		—		—
Advisor Class		—		—		—		—
A Class		—		46		—		—
C Class		—		1		—		—
AMR Class		—		12,236		—		—
Total distributions paid	$	1,251	$	16,326	$	36,993	$	45,385

* For tax purposes, short-term capital gains are considered ordinary income distributions.

As of October 31, 2013, the components of distributable earnings or (deficit) on a tax basis were as follows (in thousands):

34

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

	Emerging Markets			International Equity
Cost basis of investments for federal income tax purposes	$	129,724		$	1,671,051
Unrealized appreciation		13,083			481,976
Unrealized depreciation		(15,945	)		(27,520	)
Net unrealized appreciation or (depreciation)		(2,862	)		454,456
Undistributed ordinary income		1,259			34,912
Accumulated long-term gain or (loss)		(78	)		(137,319	)
Other temporary differences		55			2,800
Distributable earnings or (deficits)	$	(1,626	)	$	354,849

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 or 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. GAAP 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 October 31, 2013 (in thousands):

	Emerging Markets			International Equity
Paid-in-capital	$	—		$	883
Undistributed net investment income (loss)		103			(7,848	)
Accumulated net realized gain (loss)		(103	)		6,965
Unrealized appreciation or depreciation of investments, futures contracts, and foreign currency contracts		—			—

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the RIC MOD, each Fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

Finally, the RIC MOD contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions. Except for the simplification provisions related to RIC qualification, the RIC MOD is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.

35

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Losses incurred that will be carried forward under the provisions of the Act for the year ended October 31, 2013 are as follows (in thousands):

	Loss Carryforward Character
Fund	Short-Term		Long-Term		Total
Emerging Markets	$	—	$	22	$	22

As of October 31, 2013 the capital loss carryforward positions of the Fund prior to the provisions of RIC MOD that may be applied against realized net taxable gains in each succeeding year or until their expiration dates, whichever occurs first, are as follows (in thousands):

Fund	2017
International Equity	$	134,561

The Emerging Markets Fund utilized $1,606 of long-term losses under the provisions of the Act. The International Equity Fund utilized $33,010 of short-term losses and $43,716 of long-term losses under the provisions of the Act. The International Equity Fund utilized $8,584 of loss carryforwards position occurring prior to the provision of the Act (in thousands).

8. Investment Transactions

The aggregate cost of purchases and proceeds from sales of investments, other than short-term obligations, for the year ended October 31, 2013 were as follows (in thousands):

	Emerging Markets		International Equity
Purchases	$	60,840	$	704,605
Sales and Maturities		65,905		445,056

A summary of the International Equity Fund’s transactions in the USG Select Fund for the year ended October 31, 2013 is set forth below (in thousands):

	Affiliated Fund	October 31, 2012 Shares/Fair Value		Purchases		Sales		October 31, 2013 Shares/Fair Value		Dividend Income
Direct	USG Select Fund	$	10,000	$	25,000	$	25,000	$	10,000	$	4
Securities Lending	USG Select Fund		1,598		787,129		769,131		19,596		—

9. 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, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked to market daily. Daily mark to market amounts are required to be paid to the borrower or received from the borrower by the end of the following business day. This one day settlement for mark to market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.

To the extent that a loan is collateralized by cash, such cash collateral shall be invested by the securities lending agent (the “Agent”) in money market mutual funds, and other short-term investments, provided the investments meet certain quality and diversification requirements. Securities purchased with cash collateral proceeds are listed in the Fund’s Schedule of Investments and the collateral is shown on the Statements of Assets and Liabilities as a payable.

36

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Securities lending income is generated from the demand premium (if any) paid by the borrower to borrow a specific security and from the return on investment of cash collateral, reduced by negotiated rebate fees paid to the borrower and transaction costs. To the extent that a loan is secured by non-cash collateral, securities lending income is generated as a demand premium reduced by transaction costs. The Fund, the Agent, and the Manager retained 80%, 10% and 10%, respectively, of the income generated from securities lending.

While securities are on loan, the Fund continues to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Fund would be subject to on the dividend.

Securities lending transactions pose certain risks to the Fund, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Fund could also experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.

At October 31, 2013, the value of outstanding securities on loan and the value of collateral was as follows (in thousands):

Fair Value of Securities on Loan	Non-Cash Collateral	Cash Collateral Posted by Borrower
$22,989	$—	$24,172

Cash collateral is listed in the Fund’s 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 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 Schedules of Investments or Statements of Assets and Liabilities.

10. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund (shares and dollars in thousands):

For the Year ended October 31, 2013

	Institutional Class						Y Class						Investor Class						A Class
Emerging Markets Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		167		$	2,009			81		$	933			117		$	1,351			7		$	75
Redemption fees		—			1			—			—			—			1			—			—
Reinvestment of dividends		8			92			2			20			5			54			—			2
Shares redeemed		(84	)		(1,000	)		(83	)		(978	)		(320	)		(3,650	)		(27	)		(292	)
Net increase (decrease) in shares outstanding		91		$	1,102			—		$	(25	)		(198	)	$	(2,244	)		(20	)	$	(215	)

37

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

	C Class						AMR Class						Totals
Emerging Markets Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		9		$	100			3,016		$	35,188			3,397		$	39,656
Redemption fees		—			—			—			16			—			18
Reinvestment of dividends		—			—			90			1,078			105			1,246
Shares redeemed		(4	)		(43	)		(3,285	)		(37,952	)		(3,803	)		(43,915	)
Net increase (decrease) in shares outstanding		5		$	57			(179	)	$	(1,670	)		(301	)	$	(2,995	)

	Institutional Class						Y Class						Investor Class						Advisor Class
International Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		13,571		$	239,015			28,347		$	506,048			7,619		$	131,317			367		$	6,480
Redemption fees		—			71			—			17			—			40			—			—
Reinvestment of dividends		811			13,572			3			42			625			10,387			6			106
Shares redeemed		(8,904	)		(157,386	)		(7,201	)		(129,986	)		(19,776	)		(337,332	)		(201	)		(3,475	)
Net increase (decrease) in shares outstanding		5,478		$	95,272			21,149		$	376,121			(11,532	)	$	(195,588	)		172		$	3,111

	Retirement Class						A Class						C Class						AMR Class
International Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		35		$	650			159		$	2,784			61		$	1,045			6,551		$	116,120
Redemption fees		—			—			—			—			—			—			—			40
Reinvestment of dividends		—			—			2			33			—			5			610			10,213
Shares redeemed		(3	)		(59	)		(33	)		(574	)		(6	)		(108	)		(8,018	)		(139,459	)
Net increase (decrease) in shares outstanding		32		$	591			128		$	2,243			55		$	942			(857	)	$	(13,086	)

	Totals
International Equity Fund	Shares			Amount
Shares sold		56,710		$	1,003,459
Redemption fees		—			168
Reinvestment of dividends		2,057			34,358
Shares redeemed		(44,142	)		(768,043	)
Net increase (decrease) in shares outstanding		14,625		$	269,606

For the Year Ended October 31, 2012

	Institutional Class						Y Class						Investor Class						A Class
Emerging Markets Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		10		$	113			115		$	1,324			124		$	1,394			33		$	356
Redemption fees		—			1			—			—			—			1			—			—
Reinvestment of dividends		98			1,005			60			626			102			1,034			4			40
Shares redeemed		(52	)		(596	)		(429	)		(4,960	)		(195	)		(2,137	)		(10	)		(110	)
Net increase (decrease) in shares outstanding		56		$	523			(254	)	$	(3,010	)		31		$	292			27		$	286

	C Class						AMR Class						Totals
Emerging Markets Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		1		$	4			2,982		$	34,518			3,265		$	37,709
Redemption fees		—			—			—			12			—			14
Reinvestment of dividends		—			1			1,304			13,548			1,568			16,254
Shares redeemed		(1	)		(7	)		(4,187	)		(47,936	)		(4,874	)		(55,746	)
Net increase (decrease) in shares outstanding		—		$	(2	)		99		$	142			(41	)	$	(1,769	)

38

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

	Institutional Class						Y Class						Investor Class						Advisor Class
International Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		12,127		$	182,817			53		$	806			10,041		$	149,389			31		$	479
Redemption fees		—			8			—			—			—			11			—			—
Reinvestment of dividends		1,161			16,128			2			32			886			12,231			2			28
Shares redeemed		(8,916	)		(134,303	)		(10	)		(150	)		(7,985	)		(118,644	)		(13	)		(195	)
Net increase in shares outstanding		4,372		$	64,650			45		$	688			2,942		$	42,987			20		$	312

	Retirement Class					A Class						C Class					AMR Class
International Equity Fund	Shares		Amount			Shares			Amount			Shares		Amount			Shares			Amount
Shares sold		3	$	52			60		$	920			2	$	36			4,926		$	74,189
Redemption fees		—		—			—			—			—		—			—			4
Reinvestment of dividends		—		—			—			7			—		3			1,043			14,493
Shares redeemed		—		(2	)		(12	)		(182	)		—		(4	)		(7,254	)		(109,538	)
Net increase (decrease) in shares outstanding		3	$	50			48		$	745			2	$	35			(1,285	)	$	(20,852	)

	Totals
International Equity Fund	Shares			Amount
Shares sold		27,243		$	408,688
Redemption fees		—			23
Reinvestment of dividends		3,094			42,922
Shares redeemed		(24,190	)		(363,018	)
Net increase (decrease) in shares outstanding		6,147		$	88,615

39

American Beacon Emerging Markets Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended October 31,
	2013			2012			2011A			2010			2009
Net asset value, beginning of period	$	11.33		$	12.67		$	14.55		$	11.95		$	9.00
Income from investment operations:
Net investment income (loss)		0.09			0.12			0.16			0.13			0.05
Net gains (losses) from investments (both realized and unrealized)		0.86			0.11			(1.91	)		2.63			4.42
Total income (loss) from investment operations		0.95			0.23			(1.75	)		2.76			4.47
Less distributions:
Dividends from net investment income		(0.13	)		(0.16	)		(0.13	)		(0.16	)		(0.21	)
Distributions from net realized gains on securities		—			(1.41	)		—			—			(1.31	)
Total distributions		(0.13	)		(1.57	)		(0.13	)		(0.16	)		(1.52	)
Redemption fees added to beneficial interests		0.00	B		0.00	B		0.00	B		0.00	B		—
Net asset value, end of period	$	12.15		$	11.33		$	12.67		$	14.55		$	11.95
Total return C		8.39	%		3.05	%		(12.18	)%		23.36	%		60.56	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	9,962		$	8,256		$	8,523		$	9,023		$	9,494
Ratios to average net assets:
Expenses, before reimbursements		1.64	%		1.50	%		1.55	%		1.58	%		1.66	%
Expenses, net of reimbursements		1.35	%		1.33	%		1.24	%		1.39	%		1.66	%
Net investment income (loss), before reimbursements		0.58	%		0.87	%		0.99	%		0.58	%		0.95	%
Net investment income (loss), net of reimbursements		0.87	%		1.04	%		1.30	%		0.77	%		0.95	%
Portfolio turnover rate		55	%		44	%		101	%		64	%		70	%

^A  Brandes Investment Partners, LP was added as an investment manager to the Emerging Markets Fund on December 31, 2010.

^B  Amounts represent less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^D  Not annualized.

^E  Annualized.

^F  Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

40

American Beacon Emerging Markets Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Y Class												Investor Class															A Class
Year Ended October 31,									March 1 to Oct. 31,			Year Ended October 31,															Year Ended October 31,									May 17 to Oct. 31,
2013			2012			2011A			2010			2013			2012			2011A			2010			2009			2013			2012			2011A			2010
	$11.41		$	12.75		$	14.53		$	12.29		$	11.13		$	12.44		$	14.29		$	11.77		$	8.85		$	11.11		$	12.47		$	14.27		$	12.10
	0.11			0.06			0.13			0.04			0.04			0.08			0.13			0.04			0.04			0.06			0.10			0.06			0.02
	0.83			0.16			(1.91	)		2.20			0.84			0.12			(1.93	)		2.63			4.35			0.82			0.09			(1.85	)		2.15
	0.94			0.22			(1.78	)		2.24			0.88			0.20			(1.80	)		2.67			4.39			0.88			0.19			(1.79	)		2.17
	(0.13	)		(0.15	)		—			—			(0.08	)		(0.10	)		(0.05	)		(0.15	)		(0.16	)		(0.08	)		(0.14	)		(0.01	)		—
	—			(1.41	)		—			—			—			(1.41	)		—			—			(1.31	)		—			(1.41	)		—			—
	(0.13	)		(1.56	)		—			—			(0.08	)		(1.51	)		(0.05	)		(0.15	)		(1.47	)		(0.08	)		(1.55	)		(0.01	)		—
	0.00B			0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		—			0.00	B		0.00	B		0.00	B		0.00	B
	$12.22		$	11.41		$	12.75		$	14.53		$	11.93		$	11.13		$	12.44		$	14.29		$	11.77		$	11.91		$	11.11		$	12.47		$	14.27
	8.22	%		2.91	%		(12.25	)%		18.23	%D		7.89	%		2.72	%		(12.65	)%		22.85	%		60.24	%		7.94	%		2.64	%		(12.58	)%		17.93	%D
	$1,962		$	1,837		$	5,296		$	13		$	6,675		$	8,427		$	9,030		$	12,478		$	10,208		$	491		$	685		$	433		$	2
	1.75	%		1.72	%		1.68	%		1.82	%E		1.95	%		1.84	%		1.84	%		1.86	%		1.96	%		2.19	%		2.01	%		2.97	%		2.26	%E
	1.45	%		1.44	%		1.33	%		1.42	%E		1.79	%		1.75	%		1.70	%		1.77	%		1.96	%		1.79	%		1.78	%		1.46	%		1.78	%E
	0.56	%		(0.05	)%		0.99	%		0.40	%E		0.26	%		0.56	%		0.77	%		0.29	%		0.65	%		0.11	%		0.46	%		(0.10	)%		(0.10	)%E
	0.86	%		0.23	%		1.35	%		0.79	%E		0.42	%		0.65	%		0.91	%		0.37	%		0.65	%		0.51	%		0.69	%		1.41	%		0.39	%E
	55	%		44	%		101	%		64	%F		55	%		44	%		101	%		64	%		70	%		55	%		44	%		101	%		64	%F

41

American Beacon Emerging Markets Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class												AMR Class
	Year Ended October 31,									Sept. 1 to Oct. 31,			Year Ended October 31,
	2013			2012			2011A			2010			2013			2012			2011A			2010			2009
Net asset value, beginning of period	$	11.05		$	12.38		$	14.26		$	12.89		$	11.44		$	12.74		$	14.62		$	12.02		$	9.06
Income from investment operations:
Net investment income (loss)		(0.05	)		0.03			0.09			(0.02	)		0.12			0.14			0.18			0.11			0.09
Net gains (losses) from investments (both realized and unrealized)		0.83			0.07			(1.97	)		1.39			0.83			0.12			(1.97	)		2.68			4.43
Total income (loss) from investment operations		0.78			0.10			(1.88	)		1.37			0.95			0.26			(1.79	)		2.79			4.52
Less distributions:
Dividends from net investment income		—			(0.02	)		—			—			(0.14	)		(0.15	)		(0.09	)		(0.19	)		(0.25	)
Distributions from net realized gains on securities		—			(1.41	)		—			—			—			(1.41	)		—			—			(1.31	)
Total distributions		—			(1.43	)		—			—			(0.14	)		(1.56	)		(0.09	)		(0.19	)		(1.56	)
Redemption fees added to beneficial interests		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		—
Net asset value, end of period	$	11.83		$	11.05		$	12.38		$	14.26		$	12.25		$	11.44		$	12.74		$	14.62		$	12.02
Total return C		7.06	%		1.83	%		(13.18	)%		10.63	%D		8.34	%		3.26	%		(12.30	)%		23.47	%		61.01	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	62		$	5		$	8		$	1		$	108,493		$	103,363		$	113,894		$	128,841		$	109,985
Ratios to average net assets:
Expenses, before reimbursements		3.26	%		3.74	%		26.96	%		4.49	%E		1.39	%		1.24	%		1.31	%		1.34	%		1.42	%
Expenses, net of reimbursements		2.54	%		2.52	%		2.41	%		2.54	%E		1.39	%		1.24	%		1.31	%		1.34	%		1.42	%
Net investment income (loss), before reimbursements		(0.55	)%		(1.19	)%		(23.86	)%		(2.91	)%E		0.90	%		1.15	%		1.29	%		0.79	%		1.27	%
Net investment income (loss), net of reimbursements		0.18	%		0.03	%		0.69	%		(0.96	)%E		0.90	%		1.15	%		1.29	%		0.79	%		1.27	%
Portfolio turnover rate		55	%		44	%		101	%		64	%F		55	%		44	%		101	%		64	%		70	%

^A Brandes Investment Partners, LP was added as an investment manager to the Emerging Markets Fund on December 31, 2010.

^B Amounts represent less than $0.01 per share.

^C Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^D Not annualized.

^E Annualized.

^F Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

42

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43

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended October 31,
	2013			2012A			2011			2010			2009
Net asset value, beginning of period	$	16.05		$	15.27		$	16.67		$	15.51		$	13.13
Income from investment operations:
Net investment income		0.36			0.41			0.46			0.35			0.54
Net gains (losses) from investments (both realized and unrealized)		4.07			0.92			(1.41	)		1.30			2.78
Total income (loss) from investment operations		4.43			1.33			(0.95	)		1.65			3.32
Less distributions:
Dividends from net investment income		(0.41	)		(0.55	)		(0.45	)		(0.49	)		(0.61	)
Distributions from net realized gains on securities		—									—			(0.33	)
Total distributions		(0.41	)		(0.55	)		(0.45	)		(0.49	)		(0.94	)
Redemption fees added to beneficial interest		—			—			—			—			0.00	B
Net asset value, end of period	$	20.07		$	16.05		$	15.27		$	16.67		$	15.51
Total return C		28.14	%		9.25	%		(5.89	)%		10.81	%		27.44	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	870,729		$	608,256		$	512,093		$	527,718		$	489,837
Ratios to average net assets:
Expenses, before reimbursements		0.72	%		0.72	%		0.70	%		0.71	%		0.73	%
Expenses, net of reimbursements		0.71	%		0.72	%		0.70	%		0.71	%		0.73	%
Net investment income (loss), before reimbursements		2.16	%		2.85	%		2.90	%		2.21	%		2.76	%
Net investment income, net of reimbursements		2.17	%		2.85	%		2.90	%		2.21	%		2.76	%
Portfolio turnover rate		27	%		60	%		33	%		38	%		41	%

^A The Boston Company Asset Management, LLC was added as an investment advisor to the International Equity Fund on December 31, 2011.

^B Amount represents less than $0.01 per share.

^C Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^D Not annualized.

^E Annualized.

^F Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.

44

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Y Class															Investor Class
Year Ended October 31,												Aug. 3 to Oct. 31,			Year Ended October 31,
2013			2012A			2011			2010			2009			2013			2012A			2011			2010			2009
$	16.65		$	15.82		$	17.17		$	15.52		$	14.89		$	15.88		$	15.11		$	16.42		$	15.30		$	12.95
	0.62			0.41			0.49			0.04			0.04			0.25			0.38			0.44			0.29			0.37
	3.97			0.95			(1.50	)		1.61			0.59			4.09			0.87			(1.44	)		1.27			2.87
	4.59			1.36			(1.01	)		1.65			0.63			4.34			1.25			(1.00	)		1.56			3.24
	(0.43	)		(0.53	)		(0.34	)		—			—			(0.36	)		(0.48	)		(0.31	)		(0.44	)		(0.56	)
	—									—			—			—									—			(0.33	)
	(0.43	)		(0.53	)		(0.34	)		—			—			(0.36	)		(0.48	)		(0.31	)		(0.44	)		(0.89	)
	—			—			—			—			0.00	B		—			—			—			—			0.00	B
$	20.81		$	16.65		$	15.82		$	17.17		$	15.52		$	19.86		$	15.88		$	15.11		$	16.42		$	15.30
	28.04	%		9.15	%		(6.00	)%		10.63	%		4.23	%D		27.81	%		8.77	%		(6.21	)%		10.36	%		27.08	%
$	441,946		$	1,512		$	720		$	245		$	1		$	337,424		$	453,142		$	386,560		$	463,704		$	445,596
	0.85	%		0.80	%		0.81	%		0.81	%		0.69	%E		1.04	%		1.09	%		1.07	%		1.07	%		1.05	%
	0.85	%		0.80	%		0.81	%		0.81	%		0.69	%E		1.04	%		1.09	%		1.07	%		1.07	%		1.05	%
	2.55	%		2.74	%		3.00	%		1.44	%		1.00	%E		1.67	%		2.50	%		2.55	%		1.83	%		2.45	%
	2.55	%		2.74	%		3.00	%		1.44	%		1.00	%E		1.67	%		2.50	%		2.55	%		1.83	%		2.45	%
	27	%		60	%		33	%		38	%		41	%F		27	%		60	%		33	%		38	%		41	%

45

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor Class
	Year Ended October 31,
	2013			2012A			2011			2010			2009
Net asset value, beginning of period	$	16.36		$	15.52		$	16.74		$	15.20		$	12.86
Income from investment operations:
Net investment income (loss)		(0.41	)		0.09			0.07			0.89			0.31
Net gains (losses) from investments (both realized and unrealized)		4.83			1.18			(1.12	)		0.65			2.86
Total income (loss) from investment operations		4.42			1.27			(1.05	)		1.54			3.17
Less distributions:
Dividends from net investment income		(0.42	)		(0.43	)		(0.17	)		—			(0.50	)
Distributions from net realized gains on securities		—									—			(0.33	)
Total distributions		(0.42	)		(0.43	)		(0.17	)		—			(0.83	)
Redemption fees added to beneficial interest		—			—			—			—			0.00	B
Net asset value, end of period	$	20.36		$	16.36		$	15.52		$	16.74		$	15.20
Total return C		27.51	%		8.59	%		(6.35	)%		10.13	%		26.58	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	5,232		$	1,397		$	1,015		$	746		$	1,722
Ratios to average net assets:
Expenses, before (reimbursements) or recoupments		1.20	%		1.31	%		1.24	%		1.26	%		1.45	%
Expenses, net of (reimbursements) or recoupments		1.20	%		1.31	%		1.24	%		1.26	%		1.44	%
Net investment income (loss), before (reimbursements) or recoupments		1.39	%		2.18	%		2.52	%		1.64	%		2.25	%
Net investment income, net of (reimbursements) or recoupments		1.39	%		2.18	%		2.52	%		1.64	%		2.26	%
Portfolio turnover rate		27	%		60	%		33	%		38	%		41	%

^A The Boston Company Asset Management, LLC was added as an investment advisor to the International Equity Fund on December 31, 2011.

^B Amount represents less than $0.01 per share.

^C Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^D Not annualized.

^E Annualized.

^F Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.

^G Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

46

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Retirement Class															A Class												C Class
Year Ended October 31,												May 1 to Oct. 31,			Year Ended October 31,									May 17 to Oct. 31,			Year Ended October 31,									Sept. 1 to Oct. 31,
2013			2012A			2011			2010			2009			2013			2012A			2011			2010			2013			2012A			2011			2010
$	16.75		$	15.44		$	16.71		$	15.20		$	11.78		$	16.02		$	15.33		$	16.40		$	14.14		$	15.70		$	15.21		$	16.39		$	14.82
	0.19			(0.45	)		0.39			0.22			0.12			0.43			0.48			0.12			0.03			0.52			0.40			0.07			(0.01	)
	4.37			1.76			(1.44	)		1.29			3.30			3.89			0.76			(1.14	)		2.23			3.59			0.71			(1.25	)		1.58
	4.56			1.31			(1.05	)		1.51			3.42			4.32			1.24			(1.02	)		2.26			4.11			1.11			(1.18	)		1.57
	—						(0.22	)		—			—			(0.42	)		(0.55	)		(0.05	)		—			(0.34	)		(0.62	)					—
	—									—			—			—									—			—									—
	—			—			(0.22	)		—			—			(0.42	)		(0.55	)		(0.05	)		—			(0.34	)		(0.62	)		—			—
	—			—			—			—			0.00	B		—			—			—			—			—			—			—			—
$	21.31		$	16.75		$	15.44		$	16.71		$	15.20		$	19.92		$	16.02		$	15.33		$	16.40		$	19.47		$	15.70		$	15.21		$	16.39
	27.22	%		8.48	%		(6.37	)%		9.93	%		29.03	%D		27.51	%		8.62	%		(6.26	)%		15.98	%D		26.56	%		7.89	%		(7.20	)%		10.59	%D
$	755		$	52		$	1		$	1		$	1		$	4,113		$	1,255		$	461		$	4		$	1,220		$	115		$	76		$	1
	1.46	%		6.40	%		3.43	%		1.66	%		1.48	%E		1.21	%		1.29	%		2.24	%		1.26	%E		1.95	%		2.12	%		7.39	%		2.60	%E
	1.47	%		1.24	%		1.30	%		1.47	%		1.48	%E		1.25	%		1.26	%		1.22	%		1.25	%E		1.99	%		1.98	%		1.95	%		1.99	%E
	1.78	%		(3.06	)%		0.17	%		1.25	%		1.72	%E		1.73	%		2.03	%		1.03	%		0.96	%E		1.13	%		1.56	%		(4.32	)%		(0.81	)%E
	1.78	%		2.10	%		2.30	%		1.44	%		1.72	%E		1.69	%		2.07	%		2.05	%		0.98	%E		1.09	%		1.70	%		1.11	%		(0.20	)%E
	27	%		60	%		33	%		38	%		41	%F		27	%		60	%		33	%		38	%G		27	%		60	%		33	%		38	%G

47

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	AMR Class
	Year Ended October 31,
	2013			2012A			2011			2010			2009
Net asset value, beginning of period	$	16.08		$	15.31		$	16.78		$	15.61		$	13.25
Income from investment operations:
Net investment income		0.46			0.49			0.53			0.39			0.37
Net gains (losses) from investments (both realized and unrealized)		4.04			0.87			(1.44	)		1.30			2.99
Total income (loss) from investment operations		4.50			1.36			(0.91	)		1.69			3.36
Less distributions:
Dividends from net investment income		(0.46	)		(0.59	)		(0.56	)		(0.52	)		(0.67	)
Distributions from net realized gains on securities		—									—			(0.33	)
Total distributions		(0.46	)		(0.59	)		(0.56	)		(0.52	)		(1.00	)
Redemption fees added to beneficial interest		—			—			—			—			0.00	B
Net asset value, end of period	$	20.12		$	16.08		$	15.31		$	16.78		$	15.61
Total return C		28.56	%		9.47	%		(5.62	)%		11.05	%		27.70	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	467,156		$	387,197		$	388,185		$	469,414		$	431,499
Ratios to average net assets:
Expenses, before reimbursements		0.43	%		0.45	%		0.45	%		0.46	%		0.48	%
Expenses, net of reimbursements		0.43	%		0.45	%		0.45	%		0.46	%		0.48	%
Net investment income (loss), before reimbursements		2.47	%		3.16	%		3.15	%		2.45	%		3.00	%
Net investment income, net of reimbursements		2.47	%		3.16	%		3.15	%		2.45	%		3.00	%
Portfolio turnover rate		27	%		60	%		33	%		38	%		41	%

^A The Boston Company Asset Management, LLC was added as an investment advisor to the International Equity Fund on December 31, 2011.

^B Amount represents less than $0.01 per share.

^C Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

48

American Beacon Funds^SM

Privacy Policy and Federal Tax Information

October 31, 2013 (Unaudited)

Privacy Policy

The American Beacon Funds recognize and respect the privacy of our shareholders. We are providing this notice to you so you will understand how shareholder information may be collected and used.

We may collect nonpublic personal information about you from one or more of the following sources:

• information we receive from you on applications or other forms;

• information about your transactions with us or our service providers; and

• information we receive from third parties.

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

We restrict access to your nonpublic personal information to those employees or service providers who need to know that information to provide products or services to you. To ensure the confidentiality of your nonpublic personal information, we maintain safeguards that comply with federal standards.

Federal Tax Information

Certain tax information regarding the Funds is required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2013. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2013.

The Funds designated the following items with regard to distributions paid during the fiscal year ended October 31, 2012. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

	Emerging Markets			International Equity
Corporate Dividends Received Deduction		0.00	%		0.00	%
Qualified Dividend Income		100.00	%		100.00	%

The International Equity Fund designated a foreign tax credit of $4,230,285.

Shareholders will receive notification in January 2014 of the applicable tax information necessary to prepare their 2013 income tax returns.

49

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisor Agreements of the Funds (Unaudited)

At its May 29, 2013 meeting, the Board of Trustees (“Board”) considered the renewal of the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Beacon Trust”) on behalf of each of their series (collectively, the “Funds”) and the renewal of each investment advisory agreement between the Manager and a subadvisor (each an “Investment Advisory Agreement”). The Management Agreement and the Investment Advisory Agreements are collectively referred to herein as the “Agreements.” In preparation for the Board’s consideration to renew and approve these Agreements, the Board and its Investment Committee undertook steps to gather and consider information furnished by the Manager, the subadvisors, Lipper, Inc. (“Lipper”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and each subadvisor.

In addition, the Board’s Investment Committee worked with Lipper to obtain relevant comparative information regarding the performance, fees and expenses of the Funds. The Investment Committee, for the benefit of all Trustees, sponsored a separate meeting on May 10, 2013 to consider the information provided by Lipper. Further, the Board took into consideration information furnished for the Board’s review and consideration throughout the year at regular Board and Investment Committee meetings, as well as information specifically prepared in connection with the renewal process.

In connection with the Board’s consideration of the Management Agreement and each Investment Advisory Agreement, the Trustees received and evaluated such information as they deemed necessary. The information requested by the Board included, among other information, the following materials. For various reasons, a subadvisor may not have provided responses to each requested item. In these instances, the Board considered the materials that were received from such subadvisor. References herein to the “firm” refer to the Manager and/or each applicable subadvisor.

• a description of any significant changes (actual or anticipated) to principal activities, personnel, services provided to the Funds, or any other area, including how these changes might affect the Funds;

• a copy of the firm’s most recent audited or unaudited financial statements, as well as Parts 1 and 2 of its Form ADV registration statement with the SEC;

• a summary of any material pending or anticipated litigation or regulatory proceedings involving the firm or its personnel, including the results of any recent regulatory examination or independent audit;

• a comparison of the performance of that portion of Fund assets managed or to be managed by each firm with the performance of other similar accounts managed by the firm, including a discussion of relative performance versus a peer group average and any actual or potential remedial measures if the firm’s longer-term performance was materially below that of the peer group;

• any actual or anticipated economies of scale in relation to the services the firm provides or will provide to each Fund and whether the current fee rates charged or to be charged to each Fund reflect these economies of scale for the benefit of the Fund’s investors;

• an analysis of compensation, including a comparison with fee rates charged to other clients for which similar services are provided, any proposed changes to the fee rate schedule, if applicable, and the effect of any fee waivers;

• a description of any payments made or to be made by the subadvisors to the Manager to support a Fund’s marketing efforts;

• a copy of the firm’s proxy voting policies and procedures and, if applicable, the name of the third-party voting service used by the firm;

• an evaluation of any other benefits to the firm or Funds as a result of their relationship, if any;

• confirmation that the firm’s financial condition would not impair its ability to provide high-quality advisory services to the Funds;

• a description of the scope of portfolio management services provided or to be provided to the Funds, including whether such services differ from the services provided to other clients, including other registered investment companies, and any advantages or disadvantages that might accrue to the Funds due to the firm’s involvement in other activities;

• a description of the personnel who are or will be assigned primary responsibility for managing the Funds, including any changes during the past year, and a discussion of the adequacy of current and projected staffing levels to service the Funds;

• a description of the basis upon which portfolio managers are compensated, including any “incentive” arrangements, and a description of the oversight mechanisms used to prevent a portfolio manager whose compensation is tied to performance of a Fund from taking undue risks;

• a description of the firm’s practices in monitoring the quality of portfolio holdings and in reviewing portfolio valuation, including any fair value determinations;

• a description of the firm’s use of derivatives, short positions, leveraged trading strategies or other similar trading strategies for the Funds;

• a discussion regarding the firm’s participation in third-party and/or proprietary “soft dollar” arrangements, if any, or other brokerage allocation policies with respect to Fund transactions;

• a discussion of the firm’s methodology for obtaining best execution, including any plans to improve the quality of execution in the upcoming year, and the use of any affiliated broker-dealers;

• a description of any actual or potential conflicts of interest anticipated in managing Fund assets;

• a discussion of whether the firm has identified any investment or operational matters that likely present a high risk in managing Fund assets;

• a description of the firm’s criteria for assessing counterparties and counterparty risk to the extent the firm enters into transactions with counterparties on a Fund’s behalf;

50

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

• a description of trade allocation procedures among accounts managed by the firm;

• a discussion of whether the firm utilizes “commission recapture” or “directed brokerage” arrangements for the benefit of the Funds or “step-out” transactions;

• a discussion of whether the firm receives, or anticipates receiving, other compensation, including any payment for electronic communication network liquidity rebates with respect to the Funds;

• a certification by the firm regarding the reasonable design of its compliance program;

• a summary of the results of the firm’s most recent annual review of its compliance program and a discussion of any material compliance problems encountered by a subadvisor since the most recent annual review;

• confirmation that the firm is prepared to provide to the Manager, directly or in summary form, any regulatory review comments that could have a material impact on services provided to the Funds;

• a discussion of whether, due to the firm’s trading activities on behalf of the Funds, the firm would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendments to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt;

• information regarding the firm’s code of ethics, insider trading policy and disaster recovery plan, including a description of any material changes thereto and a related certification of compliance by the firm;

• a description of the firm’s affiliation with any broker-dealer;

• a discussion of any anticipated change in the firm’s controlling persons; and

• verification of the firm’s insurance coverage with regards to the services provided to the Funds.

In addition, the Manager provided the following information specific to the renewal of the Management Agreement:

• a comparison of the performance of a share class of each Fund to comparable investment companies and appropriate indices, including comments on the relative performance of, as applicable, each subadvisor and each Fund versus the respective peer group average;

• a discussion, if applicable, of any underperformance by a subadvisor relative to its peer group and what, if any, remedial measures the Manager has or intends to take;

• a comparison of advisory fee rates and expense ratios for comparable mutual funds;

• a profit/loss analysis of the Manager;

• an analysis of any material complaints received from Fund shareholders;

• a description of the extent to which the Manager monitors the investment activities and financial conditions of each subadvisor to the Funds;

• a discussion of whether the Manager provides different types or levels of administrative and accounting related services to certain Funds;

• a description of the Manager’s distribution activities with respect to promoting sales of Fund shares, including any revenue sharing practices;

• a description of arrangements pursuant to which certain firms may make any direct or indirect payments to partially reimburse the Manager for its marketing or other expenses on behalf of the Funds;

• a description of the Manager’s securities lending practices and the fees received from such practices;

• a discussion of any rebate arrangements between the Manager and a service provider to the Funds pursuant to which the Manager receives direct or indirect benefits from the service provider;

• a description of the portfolio turnover rate for each Fund and, as applicable, each subadvisor to a Fund;

• a description of how expenses that are not readily identifiable to a particular Fund are allocated; and

• confirmation that the Manager complies with applicable CFTC and National Futures Association rules and requirements for applicable Funds and a discussion regarding whether, due to the Manager’s trading activities on behalf of other Funds, the Manager would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendment to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt.

In connection with the Management Agreement and each Investment Advisory Agreement, the Board also obtained an analysis provided by Lipper that compared: (i) investment performance of each Fund versus comparable investment companies and appropriate indices; (ii) total Fund expenses of each Fund versus comparable mutual funds; and (iii) each Fund’s investment advisory fee rate versus comparable mutual funds. For certain Funds, the Board also considered information regarding the performance of the Manager and individual subadvisors with respect to their allocated portions of a Fund’s portfolio, net of management or subadvisory fees, as applicable, but not other Fund expenses. For each Fund with more than one class of shares, the class of shares used for comparative purposes was the class with the longest performance history, which in most cases was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

51

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Provided below is an overview of the primary factors the Trustees considered at the Investment Committee meeting on May 10, 2013 at which the Trustees reviewed the investment performance of the Manager and each subadvisor and the primary factors considered by the Board at its May 29, 2013 meeting at which the Board considered the renewal of the Management Agreement and Investment Advisory Agreements

The Board did not identify any particular information that was most relevant to its consideration to renew or approve each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal and approval of each Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of the contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Funds and their shareholders.

Considerations With Respect to the Renewal of the Management Agreement and Each Investment Advisory Agreement

In determining whether to renew the Management Agreement and each Investment Advisory Agreement on behalf of the Funds, the Trustees considered the best interests of each Fund separately. While the Management Agreement and the Investment Advisory Agreements for all of the Funds were considered at the May 29, 2013 meeting, the Board considered each Fund’s investment management and subadvisory relationships separately.

In each instance, the Board considered, among other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of a Fund and, as applicable, each subadvisor for a Fund; (3) the costs incurred by the Manager in rendering services to the Funds and its resulting profits or losses; (4) the extent to which economies of scale have been taken into account in setting each fee rate schedule; (5) whether fee rate levels reflect these economies of scale for the benefit of Fund investors; (6) comparisons of services and fee rates with contracts entered into by the Manager or a subadvisor or their affiliates with other clients (such as pension funds and other institutional funds); and (7) any other benefits derived or anticipated to be derived by the Manager or a subadvisor from their relationship with a Fund. The Trustees posed questions to various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the renewal.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: each Fund’s long-term performance and the background and experience of key investment personnel at the Manager; the cost structure of the Funds; the Manager’s culture of compliance and support for compliance operations that reduce risks to the Funds; the Manager’s commitment to enhance the Funds’ product line and increase assets in the Funds; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; the Manager’s commitment to training employees; and the Manager’s efforts to retain key employees and maintain staff levels.

With respect to the renewal of each Investment Advisory Agreement, the Trustees considered the level of staffing, quality, background and experience of each subadvisor’s investment personnel responsible for managing the Funds, the size of the subadvisor and the subadvisor’s ability to continue to attract and retain qualified investment personnel. The Board also considered the adequacy of the resources committed to the Funds by each subadvisor, and whether those resources were commensurate with the needs of the Funds and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of each subadvisor. The Board also considered the subadvisors’ representations regarding their compliance programs and codes of ethics. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and each subadvisor were appropriate for each Fund and, thus, determined to renew the Management Agreement and the Investment Advisory Agreement for each Fund.

Investment Performance. The Board evaluated the comparative information provided by Lipper and the Manager regarding each Fund’s investment performance relative to its Lipper performance universe, Lipper performance group, and/or benchmark index(es). The Board considered the information provided by Lipper regarding its independent peer selection methodology to select all performance groups and universes. The Board also considered that the performance groups and universes selected by Lipper may not provide appropriate comparisons for each Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also considered in each instance the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to each Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Costs of the Services Provided to the Funds and the Profits Realized by the Manager from its Relationship with the Funds. In analyzing the cost of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager. The profits or losses were noted at both an aggregate level for all Funds and at an individual Fund level, with some Funds being profitable for the Manager and with the Manager sustaining losses with respect to other Funds. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Funds, the difference reflects the greater level of responsibility and regulatory requirements associated with managing the Funds.

The Board also noted that the Manager proposed to continue the expense waivers and reimbursements for certain Funds and classes that were in place during the last fiscal year. The Board further considered that with respect to each Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager plus the amount payable by the Manager to a subadvisor. The Board also considered that the Manager receives service and administrative fees to compensate the Manager for providing administrative services to the Funds and to compensate third-party administrators and broker-dealers for services to Fund shareholders. In addition, the Board considered that the Manager receives management fees for overseeing the securities lending program on behalf of various Funds. The Board also noted that certain classes of the Funds maintain higher expense ratios in order to compensate third-party distributors.

52

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

In analyzing the cost of services for each subadvisor in connection with its investment advisory services to the Fund, the Board considered that, in many cases, the Manager has negotiated the lowest subadvisory fee rate a subadvisor charges for any comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board noted that subadvisors may not account for their profits on an account-by-account basis and, those that do, likely employ different methodologies in connection with these calculations.

Based on the foregoing information, the Board concluded that the profitability levels of the Manager were reasonable in light of the services performed by the Manager. A discussion regarding the Board’s considerations with respect to each Fund’s fee rates is set forth below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as the Funds grow and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that the Manager has negotiated breakpoints in many subadvisory fee rates. The Board also noted that, for purposes of determining the fee rates chargeable to the Funds, many subadvisors have agreed to take into account assets of AMR Corporation and its pension plans that are managed by the subadvisors. Thus, the Funds are able to receive lower effective fee rates.

In addition, the Board noted the Manager’s representation that many of the Funds benefit from economies of scale because comparably low fee rate levels are reflected in the current management and administration fee rates the Manager charges. The Board further noted the Manager’s representation that many of the Funds benefit from these comparably low fee rate levels despite not having yet reached an asset size at which economies of scale would traditionally be considered to exist, and the Manager’s belief that breakpoints are not appropriate at this time. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for each Fund provide for a reasonable sharing of benefits from any economies of scale with the Funds.

Benefits Derived from the Relationship with the Funds. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisors as a result of the advisory relationships with the Funds, including greater exposure in the marketplace with respect to the Manager’s or subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors.

In addition, the Manager noted that the Funds also derive benefits from their association with the Manager. Specifically, the Board noted the Manager’s representation that it provides services to most Funds at a lower than industry average cost. The Board considered that certain of the subadvisors reimburse the Manager for certain of its costs relating to distribution activities for the Funds. The Board also considered that the Funds did not pay commissions to any affiliated broker-dealer of the Manager or the relevant subadvisor during the most recent fiscal year ended December 31, 2012.

Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisors by virtue of their relationships with the Funds appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to Each Fund

The performance comparisons below were made versus each Fund’s Lipper performance universe median, Lipper performance group median and/or benchmark index. References below to each Fund’s Lipper performance group and Lipper performance universe are to the respective group or universe of comparable mutual funds included in the analysis provided by Lipper. A Lipper performance group consists of the Fund and a representative sample of funds with similar investment classifications and objectives as the Fund, as selected by Lipper. A Lipper performance universe is an expansion of the performance group, providing a broader view of performance across the Fund’s investment classification/objective and allowing for a more extensive comparison. In reviewing the performance, the Trustees viewed longer-term performance over a full market cycle, typically five years or longer, as the most important consideration, because relative performance over shorter periods may be significantly impacted by market or economic events that do not reflect manager skill.

The expense comparisons below were made versus each Fund’s Lipper expense universe median and Lipper expense group median. References below to each Fund’s expense group and expense universe are to the respective group or universe of comparable mutual funds included in the analysis by Lipper. A Lipper expense group consists of the Fund and a representative sample of funds with similar operating structures, as selected by Lipper. A Lipper expense universe includes all funds in the investment classification/objective with a similar load type to the share class of the Fund included in the Lipper comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Trustees also considered a Fund’s Morningstar fee level category. In reviewing expenses, the Trustees considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the use of soft dollars was requested from the Manager and all subadvisors and was considered by the Trustees.

Additional Considerations and Conclusions with Respect to the American Beacon Emerging Markets Fund

In considering the renewal of the Management Agreement for the American Beacon Emerging Markets Fund, the Trustees considered the following additional factors: (1) the American Beacon Emerging Markets Fund outperformed the Lipper performance universe median for the five-year period ended March 31, 2013, but underperformed for the one-, three-, and ten-year periods; (2) the

53

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Fund’s performance was equal to the Lipper performance group median for the one-year period ended March 31, 2013, but underperformed for the three- and five-year periods; (3) the expense ratio of the Institutional Class of the Fund was lower than the median of its Lipper expense universe and Lipper expense group; and (4) the Institutional Class of the Fund was categorized by Morningstar as having an average expense ratio.

In considering the renewal of the Investment Advisory Agreements with The Boston Company Asset Management, LLC (“TBC”), Morgan Stanley Investment Management Inc., including the MSIM subadvisors Morgan Stanley Investment Management Limited and Morgan Stanley Investment Management Company (collectively, “MSIM”), and Brandes Investment Partners, L.P. (“Brandes”), the Trustees considered the following additional factors: (1) MSIM outperformed the Lipper performance universe median for the one-, three- and ten-year periods ended March 31, 2013, but underperformed for the five-year period; (2) TBC outperformed the Lipper performance universe median for the five-year period ended March 31, 2013 but underperformed for the one-, three- and ten-year periods; (3) Brandes was added as a subadvisor in December 2010 and outperformed the Lipper performance universe median for the one-year period ended March 31, 2013; (4) the Manager’s explanation that MSIM’s underperformance was due in part to over- and under-weightings of certain sectors and countries in 2008 and 2009; (5) the Manager’s explanation that TBC’s underperformance was due to the underperformance of its portfolio during 2011 and 2012 when TBC’s low valuation investment approach was not favored by the market, though this approach historically has provided long-term outperformance and downside protection and the Manager’s belief that the portfolio is currently well positioned to outperform when its strategy returns to favor; (6) representations by each subadvisor regarding fee rates charged by the subadvisor to other comparable clients; and (7) the Manager’s recommendation to continue to retain each subadvisor.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisors under the Agreements are fair and reasonable; (2) determined that the American Beacon Emerging Markets Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon Emerging Markets Fund.

Additional Considerations and Conclusions with Respect to the American Beacon International Equity Fund

In considering the renewal of the Management Agreement for the American Beacon International Equity Fund, the Trustees considered the following additional factors: (1) the American Beacon International Equity Fund outperformed the Lipper performance universe median for the one-, three-, five- and ten-year periods ended March 31, 2013; (2) the Fund outperformed the Lipper performance group median for the one- and five-year periods ended March 31, 2013, but underperformed for the three-year period; (3) the expense ratio of the Institutional Class of the Fund was lower than the median of its Lipper expense universe and Lipper expense group; and (4) the Institutional Class of the Fund was categorized by Morningstar as having a low expense ratio.

In considering the renewal of the Investment Advisory Agreements with Causeway Capital Management LLC (“Causeway”), Lazard Asset Management LLC (“Lazard”), and Templeton Investment Counsel, LLC (“Templeton”), the Trustees considered the following additional factors: (1) Templeton and Causeway each outperformed the Lipper performance universe median for the one-, three-, five- and ten-year periods ended March 31, 2013; (2) Lazard outperformed the Lipper performance universe median for the one-, three- and five-year periods ended March 31, 2013, but underperformed for the ten-year period; (3) representations by each subadvisor regarding fee rates charged by the subadvisor to other comparable clients; and (4) the Manager’s recommendation to continue to retain each subadvisor.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisors under the Agreements are fair and reasonable; (2) determined that the American Beacon International Equity Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon International Equity Fund.

54

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. Unless otherwise indicated, the address of each person listed below is 4151 Amon Carter Boulevard, MD 2450, Fort Worth, Texas 76155. Each Trustee oversees twenty-six funds in the fund complex that includes the Trust and the American Beacon Select Funds. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES
	Term
	Lifetime of Trust until removal, resignation or retirement*
Gerard J. Arpey** (55)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Chairman and Chief Executive Officer, AMR Corp. and American Airlines; Inc. (2003-2011); Director, S. C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present).
Alan D. Feld*** (76)	Trustee since 1996	Sole Shareholder of a professional corporation which is a Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Mileage Funds (1996-2012); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Master Trust (1996-2012).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
W. Humphrey Bogart (69)	Trustee since 2004	Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Brenda A. Cline (52)	Trustee since 2004	Executive Vice President, Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Eugene J. Duffy (59)	Trustee since 2008	Principal and Executive Vice President, Paradigm Asset Management (1994-Present); Director, Sunrise Bank of Atlanta (2008-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Thomas M. Dunning (71)	Trustee since 2008	Chairman Emeritus (2008-Present) and Chairman (1998-2008)), Lockton Dunning Benefits (consulting firm in employee benefits); Lead Director, Oncor Electric Delivery Company LLC (2007-Present); Board Member, BancTec (2010-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Richard A. Massman (70)	Trustee since 2004 Chairman since 2008	Consultant and General Counsel Emeritus (2009-Present) and Senior Vice President and General Counsel (1994-2009), Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).

55

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
Barbara J. McKenna, CFA (50)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present).
R. Gerald Turner (67)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-Present); Director, Kronus Worldwide Inc. (chemical manufacturing) (2003-Present); Trustee, American Beacon Mileage Funds (2001-2012); Trustee, American Beacon Select Funds (2001-Present); Trustee, American Beacon Master Trust (2001-2012).
Paul J. Zucconi,CPA (73)	Trustee since 2008	Director, Affirmative Insurance Holdings, Inc. (producer of nonstandard automobile insurance) (2004-Present); Director, Titanium Metals Corporation (producer of titanium melted and mill products) (2002-2012); Director, Torchmark Corporation (life and health insurance products) (2002-Present); Director, Charter Bank (community bank services and products) (2010-2011); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
OFFICERS
	Term
	One Year
Gene L. Needles, Jr. (58)	President since 2009 Executive Vice President since 2009	President, CEO and Director (2009-Present), American Beacon Advisors, Inc.; President (2009-Present), President, CEO and Director (2009-Present), Lighthouse Holdings, Inc.; President and CEO (2009-Present), Lighthouse Holdings Parent, Inc.; President (2009-Present), American Beacon Select Funds; President (2009-Present), American Beacon Mileage Funds; President (2008-2009), Touchstone Investments; President (2003-2007), CEO (2004-2007), AIM Distributors.
Rosemary K. Behan (54)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Legal and Compliance, American Beacon Advisors, Inc. (2006-Present); Secretary, American Beacon Advisors, Inc. (2008 – present); Secretary, Lighthouse Holdings, Inc. (2008-Present); Secretary Lighthouse Holdings Parent, Inc. (2008-Present).
Brian E. Brett (53)	VP since 2004	Vice President, Director of Sales, American Beacon Advisors, Inc. (2004-Present).
Wyatt L. Crumpler (47)	VP since 2007	Chief Investment Officer (2012-Present), Vice President, Asset Management (2009-2012), and Vice President, Trust Investments (2007-2009), American Beacon Advisors, Inc.
Erica Duncan (43)	VP Since 2011	Vice President, Marketing and Client Services (2011-Present), American Beacon Advisors, Inc.; Supervisor, Brand Marketing (2010-2011), Invesco; Supervisor, Marketing Communications (2009-2010) and Senior Financial Writer (2004-2009), Invesco AIM.
Michael W. Fields (59)	VP since 1989	Chief Fixed Income Officer (2011-Present) and Vice President, Fixed Income Investments, American Beacon Advisors, Inc. (1988-2011); Director, American Beacon Global Funds SPC (2002-2011); Director, American Beacon Global Funds plc (2007-2009).
Melinda G. Heika (52)	Treasurer since 2010	Treasurer (2010-Present), and Controller (2005-2009), American Beacon Advisors, Inc.; Treasurer, Lighthouse Holdings, Inc. (2010 – Present); Treasurer, Lighthouse Holdings Parent, Inc. (2010-Present).
Terri L. McKinney (49)	VP since 2010	Vice President, Enterprise Services (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.
Jeffrey K. Ringdahl (38)	VP since 2010	Chief Operating Officer, American Beacon Advisors, Inc. (2010-Present); Vice President, Product Management, Touchstone Advisors, Inc. (2007-2010); Senior Director, Business Integration, Fidelity Investments (2005-2007).

56

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
Samuel J. Silver (50)	VP Since 2011	Vice President, Fixed Income Investments (2011-Present) and Senior Portfolio Manager, Fixed Income Investments (1999-2011), American Beacon Advisors, Inc.
Christina E. Sears (42)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Chief Compliance Officer (2004-Present), American Beacon Advisors, Inc.
John J. Okray (39)	Asst. Secretary since 2010	Deputy General Counsel (2012-Present) and Assistant General Counsel (2010-2012), American Beacon Advisors, Inc.; Asst. Secretary (2010-Present), Lighthouse Holdings, Inc.; Asst. Secretary (2010-Present), Lighthouse Holdings Parent, Inc.; Vice President, OppenheimerFunds, Inc. (2004-2010).
Sonia L. Bates (56)	Asst. Treasurer since 2011	Director, Tax and Financial Reporting (2011 - Present) and Manager, Tax and Financial Reporting (2005-2010), American Beacon Advisors, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings Parent, Inc.

* The Board has adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 72, provided, however, that the board may determine to grant one or more annual exemptions to this requirement.

** Mr. Arpey is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Arpey previously served as CEO of AMR Corp., which has a material relationship with the Manager.

*** Mr. Feld is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Feld’s law firm of Akin, Gump, Strauss, Hauer & Feld LLP has provided legal services within the past two years to the Manager and one or more of the Trust’s sub-advisors.

57

Delivery of Documents

eDelivery is NOW AVAILABLE – Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Summary 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: american_beacon.funds@ambeacon.com	On the Internet: Visit our website at www.americanbeaconfunds.com
By Telephone: Institutional, Y, Investor, Advisor, And Retirement Classes Call (800) 658-5811 AMR ClassSM Call (800) 345-2345	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 202-551-8090. A complete schedule of each Fund’s portfolio holdings is also made available on the Funds’ website at www.americanbeaconfunds.com approximately twenty days after the end of each month.	Availability of Proxy Voting Policy and Records A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN 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 or summary prospectus.

American Beacon Funds, American Beacon Emerging Markets Fund, and American Beacon International Equity Fund are service marks of American Beacon Advisors, Inc.

AR 10/13

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

President’s Message	1
Market and Performance Overviews	2-8
Schedules of Investments:
Balanced Fund	12
Mid-Cap Value Fund	20
Small Cap Value II Fund	23
Financial Statements	26
Notes to the Financial Statements	30
Financial Highlights	44
Additional Information	Back Cover

The Fund may invest in futures contracts, which are a type of derivative investment. Investing in derivatives could result in losing more than the amount invested. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The intrinsic value of stocks selected for the Fund may never be realized by the market, and the prices of value stocks may go down. While investing in value stocks may limit downside risk over time, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

Duration is a measure of price sensitivity relative to changes in interest rates.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and each Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions and, therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds October 31, 2013

Dear Shareholders,   The past 12 months has been a remarkable period for the stock market. It’s not just that the S&P 500 Index increased by 27.18%, although that is pretty remarkable in itself. The S&P 500 has not increased by that much in a single calendar year in a decade, not since 2003.   Maybe even more notable was how broad-based the rally was. In addition to the strong returns for the S&P 500 Index during the period under review, the Russell Midcap Index returned 33.79% and the Russell 2000 Index (which represents small-cap companies) returned 36.28%.

The consistency goes beyond asset classes. Among the 11 sectors identified by Morningstar, 10 increased by more than 10% over the 12-month period.

Everywhere you turn, there are opportunities to be had. Here at American Beacon, we’re pleased to have a wide range of funds that delve into nearly every area of the equity markets, giving open-minded investors a multitude of carefully managed choices.

For the 12-month period ended October 31, 2013:

• The American Beacon Balanced Fund (Investor Class) returned 18.65%.

• The American Beacon Mid-Cap Value Fund (Investor Class) returned 38.69%.

• The American Beacon Small Cap Value II Fund (Investor Class) returned 33.55%.

We’re proud to offer all these funds to our shareholders, as part of a broad menu of choices for investors.

Thank you for your continued investment in American Beacon Funds. For additional information about the Funds or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Domestic Equity Market Overview

October 31, 2013 (Unaudited)

U.S. stocks posted strong results for the year ended October 31, 2013, with the S&P 500 Index rising 27.18% over those 12 months. An improving economy, low interest rates and recovering investor sentiment helped drive the market higher, as well as the Federal Reserve’s continued quantitative easing program. Equity markets shrugged off incessant political stalemates and climbed even when the government shut down for 16 days in October. Meanwhile, robust corporate earnings growth has kept valuations in check despite the appreciation in stock prices. At current prices, the S&P 500 Index’s price-to-earnings ratio based on consensus earnings is in line with its 15-year median, yet the 10-year Treasury yield is 2.6%, well below its 15-year median.

The 12-month period began with a rough patch. During the first two weeks of November 2012, the S&P 500 Index slipped by more than 5%, as the markets reacted nervously to negotiations over the fiscal cliff. But the index quickly rebounded and gained more than 8% between that point and the end of the year, setting the stage for its gains throughout 2013.

The early part of 2013 proved to be very strong. At the end of the first quarter, the S&P 500 Index finally surpassed its pre-crash high, closing at its highest mark since October 2007. The index gained 14.1% between the first of the year and May 21. On that day, though, Federal Reserve chairman Ben Bernanke indicated that the Fed’s asset-purchasing program would be coming to an end at some point. This first mention of the so-called taper sent shock waves through the market. The S&P 500 Index dropped more than 5% in the space of a month.

Subsequently, June broke a seven-month winning streak for both the S&P 500 and the Nasdaq indexes, but the market quickly found its footing and began to rally at that point. Even with the taper-induced drop-off, by the end of June, the S&P 500 Index had posted its best first half of any year since 1998.

This performance was bolstered by a U.S. economy that appears to have formed a sound foundation with no obvious signs of a contraction in the near term. For perspective, each recession in the past 50 years has been preceded by three conditions: 1) an inverted yield curve, 2) a tight labor market and 3) a positive output gap (actual gross domestic product [GDP] expressed as a percentage of potential GDP). None of these conditions are evident today. In fact, the yield curve is steep, there is considerable slack in the labor market, and the output gap is decidedly negative.

Coming off a disappointing fourth quarter of 2012, in which GDP grew at just 0.4%, GDP bounced back to 1.1% growth in the first quarter of 2013, 2.5% in the second quarter and 2.8% in the third quarter. Unemployment continued to drop in a slow but mostly steady fashion, from 7.8% in November 2012 to 7.3% in October 2013. Although this was good news for the larger economy, the falling unemployment rate made some investors nervous, because Chairman Bernanke has indicated that the economy would be healthy enough for him to end quantitative easing once the unemployment rate reached 7.0%.

For the 12 months that ended October 31, 2013, in addition to the robust performance of the S&P 500 Index, the rally was strong in all areas of market capitalization. The Russell Midcap^® Index was up 33.79% and the Russell 2000^® Index (which represents small-cap stocks) was up 36.28%.

2

American Beacon Balanced Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the Balanced Fund (the “Fund”) returned 18.65% for the twelve months ended October 31, 2013. The Fund outperformed the 60% Russell 1000^® Value/40% Barclays Capital Aggregate Index benchmark return of 15.81% but trailed the Lipper Mixed-Asset Target Allocation Growth Funds Index return of 19.00%.

Comparison of Change in Value of a $10,000 Investment

For The Period from 10/31/03 through 10/31/13

Total Returns for the Period ended 10/31/13

	1 Year			5 Years			10 Years			Value of $10,000 10/31/03- 10/31/13
Institutional Class (1,8)		19.04	%		13.15	%		7.50	%	$	20,619
Y Class (1,3,8)		18.97	%		13.05	%		7.46	%		20,530
Investor Class (1,8)		18.65	%		12.77	%		7.17	%		19,984
Advisor Class (1,2,8)		18.52	%		12.59	%		6.97	%		19,612
A Class with sales charge (1,4,8)		11.66	%		11.35	%		6.48	%		18,742
A Class without sales charge (1,4,8)		18.45	%		12.67	%		7.12	%		19,891
C Class with sales charge (1,5,8)		16.50	%		12.10	%		6.85	%		19,400
C Class without sales charge (1,5,8)		17.50	%		12.10	%		6.85	%		19,400
AMR Class (1,8)		19.32	%		13.45	%		7.77	%		21,130
Balanced Composite Index (6)		15.81	%		11.25	%		6.91	%		19,508
Russell 1000 Value Index (7)		28.29	%		14.06	%		7.81	%		21,208
Barclays Capital Aggregate Index (7)		-1.08	%		6.09	%		4.78	%		15,945
Lipper Mixed-Asset Target Allocation Growth Funds Index (7)		19.00	%		12.88	%		6.96	%		19,595

1. Please note that the recent growth 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 is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is 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 our website at www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/03 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 10/31/03. A portion of the fees charged to the Advisor Class of the Fund was waived in 2005. Performance prior to waiving fees was lower than actual returns shown for 2005.

3. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Institutional Class from 10/31/03 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 higher than those of the Institutional Class. Therefore, total returns shown may be higher than they would have been had the Y Class been in existence since 10/31/03.

4. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the A Class been in existence since 10/31/03. A Class has a maximum sales charge of 5.75%.

5. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/03. The maximum contingent deferred sales charge for C Class is 1% for shares redeemed within one year of the date of purchase.

6. 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.

7. 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 values. Russell 1000 Value Index and Russell 1000 Index are a 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.

8. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and AMR Class shares was 0.60%, 0.71%, 0.93%, 1.10%, 1.14%, 1.86%, and 0.33%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

3

American Beacon Balanced Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

During the twelve-month period, the Fund’s assets on average were invested 66% in equities (including equitized cash) and 34% in fixed-income securities, ending the period with approximately 65% in equities and 35% in fixed-income securities.

The equity portion of the Fund (excluding equitized cash) returned 32.3%, outperforming the Russell 1000^® Value Index (the “Index”) return of 28.3%. The Fund’s equities outperformed the Index as both security selection and sector allocation added value relative to the Index. The Fund’s Financials companies added over 185 basis points (1.85%) to performance. In the Financials sector, Bank of America (up 51.7%), Lincoln National (up 85.4%) and Unum Group (up 59.9%) were the largest contributors. The Fund’s Energy companies also contributed to the Fund’s excess performance. Not owning Exxon Mobil positively impacted performance in the Energy sector. Chevron (up 12.2%) and Halliburton (up 65.9%) also contributed to the Fund’s returns. Poor stock selection in the Consumer Staples sector detracted relative value. Philip Morris International (up 4.7%) and Wal-Mart Stores (up 3.4%) detracted from performance in the Consumer Staples sector.

A significant overweight position in Information Technology, the best performing sector in the Index, added relative value through sector allocation. Underweight positions in Utilities and Materials, two of the poorer performing sectors in the Index, also contributed to the Fund’s returns.

The fixed-income portion of the Fund returned
-0.5% for the twelve-month period, outperforming the Barclays Capital Aggregate Index (the “Barclays Index”) return of -1.1%. During the period, the Fund’s Corporate securities holdings outperformed the Barclays Index. Within Corporates, holdings in the manufacturing and finance sectors added the most relative value, as did a higher allocation in the finance sector. The Fund’s exposure to U.S. Treasuries also contributed to returns. The Fund’s shorter duration mostly had a positive impact on relative performance as rates generally rose over the course of the year.

The sub-advisors continue to focus on the disciplined selection of attractive securities that should allow the Fund to benefit long term.

Top Ten Holdings (% Net Assets)
JPMorgan Chase & Co.		2.3
Bank of America Corp.		1.5
Citigroup, Inc.		1.3
Wells Fargo & Co.		1.5
Microsoft Corp.		1.4
WellPoint, Inc.		1.3
Pfizer, Inc.		1.2
Merck & Co., Inc.		1.0
Johnson & Johnson		1.0
BP plc		1.4
Total Fund Holdings	501
Sector Allocation (% Equities)
Financials		25.7
Health Care		14.7
Energy		13.5
Information Technology		10.3
Consumer Discretionary		9.8
Industrials		9.8
Consumer Staples		6.8
Utilities		4.0
Telecommunication Services		3.8
Materials		1.1
Manufacturing		0.4
Service		0.2
Sector Allocation (% Fixed Income)
U.S. Treasury		35.0
Mortgage-Backed Obligations		20.2
Finance		17.2
Manufacturing		5.9
Agency		5.3
Service		3.8
Energy		3.6
Asset-Backed Obligations		2.8
Telecommunications		1.9
Utilities		1.6
Municipal Obligations		0.9
Consumer		0.9
Transportation		0.9

Investing in debt securities entails interest rate risk, which is the risk that debt securities will decrease in value with increases in market interest rates. The Fund may invest in futures contracts, which are a type of derivative investment. Investing in derivatives could result in losing more than the amount invested. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The Fund invests in small and/or mid-sized companies, which involves additional risks such as limited liquidity and greater volatility than larger companies. The intrinsic value of stocks selected for the Fund may never be realized by the market, and the prices of value stocks may go down. While investing in value stocks may limit downside risk over time, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

4

American Beacon Mid-Cap Value Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the Mid-Cap Value Fund (the “Fund”) returned 38.69% for the twelve months ended October 31, 2013. The Fund outperformed the Russell Midcap^® Value Index (the “Index”) return of 33.45% and the Lipper Mid-Cap Value Funds Index return of 34.94% for the same period.

Comparison of Change in Value of a $10,000 Investment

For the Period from 6/30/04* through 10/31/13

* Inception of Fund

Total Returns for the Period ended 10/31/13
	1 Year			5 Years			Since Incep. (6/30/04)			Value of $10,000 6/30/04- 10/31/13
Institutional Class (1,3,9)		39.18	%		22.03	%		9.57	%	$	23,465
Y Class (1,4,9)		38.99	%		21.96	%		9.53	%		23,394
Investor Class (1,2,9)		38.69	%		21.85	%		9.40	%		23,135
Advisor Class (1,5,9)		38.43	%		21.53	%		9.21	%		22,773
A Class with sales charge (1,6,9)		30.44	%		20.03	%		8.52	%		21,455
A Class without sales charge (1,6,9)		38.39	%		21.46	%		9.21	%		22,764
C Class with sales charge (1,7,9)		36.32	%		20.90	%		8.94	%		22,245
C Class without sales charge (1,7,9)		37.32	%		20.90	%		8.94	%		22,245
AMR Class (1,9)		39.43	%		22.20	%		9.72	%		23,775
Russell Midcap Value Index(8)		33.45	%		18.85	%		9.76	%		23,857
Lipper Mid-Cap Value Funds Index(8)		34.94	%		18.64	%		8.62	%		21,647

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 is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is 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. 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 five-year and since inception periods represent 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 total returns of the Institutional Class from 11/30/05 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 AMR and Institutional 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.

5. Fund performance for the since inception period represents the total returns achieved by 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, the inception date of the Advisor Class, and the returns of the Advisor Class since its inception. Expenses of the AMR, Institutional, and Investor Classes are lower than those of the Advisor Class. As a result, total returns shown may be higher than they would have been had the Advisor Class been in existence since 6/30/04. 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. Fund performance for the five-year and since inception periods represent the total returns achieved by 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 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the AMR, Institutional, and Investor Classes are lower than those of the A Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 6/30/04. A Class shares has a maximum sales charge of 5.75%.

7. Fund performance for the five-year and since inception periods represent the total returns achieved by 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 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the AMR, Institutional, and Investor Classes

5

American Beacon Mid-Cap Value Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

are lower than those of the C Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 6/30/04. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

8. 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 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.

9. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and AMR Class shares was 1.07%, 1.29%, 1.45%, 2.00%, 1.62%, 2.47%, and 0.79%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund outperformed the Index as both stock selection and sector allocation added value relative to the Index.

Most of the Fund’s excess performance was attributed to holdings in the Financials sector which contributed over 270 basis points (2.70%) to performance. In the Financials sector, not owning American Capital Agency and HCP, which were down 22.8% and 0.9%, respectively, in the Index, added relative value. The Fund’s Consumer Discretionary sector companies also contributed to performance. In the Consumer Discretionary sector, Delphi Automotive (up 88.3%) and Hanesbrands (up 105.8%) were the largest contributors. The aforementioned good performance was slightly offset by poor stock selection in the Health Care and Utilities sectors. Not owning Boston Scientific and HCA, which were up 127.4% and 76.7%, respectively, in the Index, negatively impacted performance in the Health Care sector. Laboratory Corporation of America (up 18.2%) also detracted relative value. In the Utilities sector, Entergy (down 7.5%) and Great Plains Energy (up 8.9%) detracted from the Fund’s returns.

Significant overweight positions in the Industrials and Consumer Discretionary sectors added relative value through sector allocation. An underweight in Utilities, the worst performing sector in the Index, also contributed to the Fund’s performance.

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 (% Net Assets)
Parker Hannifin Corp.		1.5
Cigna Corp.		1.5
Avnet, Inc.		1.5
Interpublic Group of Cos., Inc.		1.4
Fifth Third Bancorp		1.4
Stanley Black & Decker, Inc.		1.3
Assurant, Inc.		1.3
Microchip Technology, Inc.		1.2
Willis Group Holdings plc		1.9
Delphi Automotive plc		1.2
Total Fund Holdings	150
Sector Allocation (% Equities)
Financials		28.5
Consumer Discretionary		16.1
Industrials		14.8
Information Technology		10.5
Health Care		9.8
Energy		7.0
Utilities		4.7
Materials		4.5
Consumer Staples		4.2

The Fund may invest in futures contracts, which are a type of derivative investment. Investing in derivatives could result in losing more than the amount invested. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The intrinsic value of stocks selected for the Fund may never be realized by the market, and the prices of value stocks may go down. While investing in value stocks may limit downside risk over time, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The Fund invests in small and/or mid-sized companies, which involves additional risks such as limited liquidity and greater volatility than larger companies. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

6

American Beacon Small Cap Value II Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the Small Cap Value II Fund (the “Fund”) returned 33.55% for the twelve months ended October 31, 2013, outperforming the Russell 2000^® Value Index (the “Index”) return of 32.83%, but slightly trailing the Lipper Small-Cap Value Funds Index return of 33.56% for the same period.

Comparison of Change in Value of a $10,000 Investment

For the Period from 11/15/11* through 10/31/13

* Inception of Fund

Total Returns for the Period ended 10/31/13

	1 Year			Since Incep. (11/15/11)†			Value of $10,000 11/15/11- 10/31/13
Y Class (1,3)		33.55	%		19.86	%	$	14,343
Investor Class (1,3)		33.55	%		19.86	%		14,266
Russell 2000 Value Index (2)		32.83	%		23.77	%		15,194
Lipper Small-Cap Value Funds Index (2)		33.56	%		21.97	%		14,765

^†  Not annualized.

1. Please note 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 is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is 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. The Russell 2000 Value Index is an unmanaged index of those stocks in the Russell 2000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 2000 Value Index and Russell 2000 Index are registered trademarks of Frank Russell Company. The Lipper Small-Cap Value Funds Index tracks the results of the 30 largest mutual funds in the Lipper Small-Cap Value Funds category. Lipper is an independent mutual fund research and ranking service. One cannot directly invest in an index.

3. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Y and Investor Class shares was 4.52% and 4.88%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund outperformed the Index entirely through sector allocation, as stock selection detracted minimal value relative to the Index.

The Fund’s underweight position in the Utilities and Financials sectors added relative value to performance through sector allocation. A significant overweight in Industrials, the second best performing sector in the Index, also contributed to the Fund’s returns.

From a stock selection standpoint, holdings in the Information Technology, Industrials, Health Care and Consumer Discretionary sectors detracted relative value. In the Information Technology sector, Netgear (down 11.6%) and Polycom (up 2.2%) hurt performance. Titan International (down 33.7%) and Graftech International (down 19.8%) negatively impacted the Fund’s performance in the Industrials sector. In the Health Care sector, RTI Surgical (down 32.6%) was the largest detractor, while Ruby Tuesday (down 17.3%) hurt performance in the Consumer Discretionary sector. Not owning Fifth & Pacific, which was up 141.3% in the Index, also negatively impacted the Fund’s returns. The Fund benefited from good stock selection in the Financials sector, but not enough to offset the impact of the aforementioned sectors. In the Financials sector, Gain Capital Holdings (up 114.3%), Protective Life (up 71.8%) and American Equity Investment Life (up 83.7%) contributed most to performance relative to the Index.

The sub-advisors continue to focus on uncovering investment opportunities through stock selection that should benefit the Fund’s performance over the longer-term.

Top Ten Holdings (% Net Assets)

Photronics, Inc.		2.1
Protective Life Corp.		1.5
Bancorp, Inc.		1.5
Unit Corp.		1.3
Crane Co.		1.3
Barnes Group, Inc.		1.2
Stone Energy Corp.		1.2
Cabot Corp.		1.1
OM Group, Inc.		1.1
Kulicke & Soffa Industries, Inc.		1.1
Total Fund Holdings	155

7

American Beacon Small Cap Value II Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

Sector Allocation (% Equities)

Financials	27.4
Industrials	20.4
Information Technology	13.5
Consumer Discretionary	11.0
Energy	9.5
Materials	7.2
Consumer Staples	6.1
Health Care	4.0
Utilities	0.8

The Fund may invest in futures contracts, which are a type of derivative investment. Investing in derivatives could result in losing more than the amount invested. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The intrinsic value of stocks selected for the Fund may never be realized by the market, and the prices of value stocks may go down. While investing in value stocks may limit downside risk over time, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The Fund invests in small and/or mid-sized companies, which involves additional risks such as limited liquidity and greater volatility than larger companies. The Fund may participate in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

8

American Beacon Funds^SM

Fund Expenses

October 31, 2013 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees if applicable, and (2) ongoing costs, including management fees, 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 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 May 1, 2013 through October 31, 2013.

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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The 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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by a Fund, such as sales charges (loads) or redemption fees as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the 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.

9

American Beacon Funds^SM

Fund Expenses

October 31, 2013 (Unaudited)

Balanced Fund

	Beginning Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Institutional Class
Actual	$	1,000.00	$	1,069.02	$	3.02
Hypothetical **	$	1,000.00	$	1,022.28	$	2.96
Y Class
Actual	$	1,000.00	$	1,069.14	$	3.65
Hypothetical **	$	1,000.00	$	1,021.68	$	3.57
Investor Class
Actual	$	1,000.00	$	1,067.80	$	4.69
Hypothetical **	$	1,000.00	$	1,020.67	$	4.58
Advisor Class
Actual	$	1,000.00	$	1,066.77	$	5.52
Hypothetical **	$	1,000.00	$	1,019.86	$	5.40
A Class
Actual	$	1,000.00	$	1,066.49	$	5.73
Hypothetical **	$	1,000.00	$	1,019.66	$	5.60
AMR Class
Actual	$	1,000.00	$	1,070.95	$	1.67
Hypothetical **	$	1,000.00	$	1,023.59	$	1.63
C Class
Actual	$	1,000.00	$	1,062.55	$	9.67
Hypothetical **	$	1,000.00	$	1,015.83	$	9.45

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.58%, 0.70%, 0.90%, 1.06%, 1.10%, 1.86%, and 0.32% for the Institutional, Y, Investor, Advisor, A, C, 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

Mid-Cap Value Fund

	Beginning Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Institutional Class
Actual	$	1,000.00	$	1,161.26	$	5.34
Hypothetical **	$	1,000.00	$	1,020.27	$	4.99
Y Class
Actual	$	1,000.00	$	1,159.48	$	5.88
Hypothetical **	$	1,000.00	$	1,019.76	$	5.50
Investor Class
Actual	$	1,000.00	$	1,159.45	$	6.69
Hypothetical **	$	1,000.00	$	1,019.00	$	6.26
Advisor Class
Actual	$	1,000.00	$	1,158.02	$	8.10
Hypothetical **	$	1,000.00	$	1,017.69	$	7.58
A Class
Actual	$	1,000.00	$	1,157.76	$	8.10
Hypothetical **	$	1,000.00	$	1,017.69	$	7.58
AMR Class
Actual	$	1,000.00	$	1,161.94	$	3.92
Hypothetical **	$	1,000.00	$	1,021.58	$	3.67
C Class
Actual	$	1,000.00	$	1,152.75	$	12.15
Hypothetical **	$	1,000.00	$	1,013.91	$	11.37

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.98%, 1.08%, 1.23%, 1.49%, 1.49%, 2.24%, and 0.72% for the Institutional, Y, Investor, Advisor, A, C, 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

Small Cap Value Fund II

	Beginning Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Y Class
Actual	$	1,000.00	$	1,151.27	$	5.91
Hypothetical **	$	1,000.00	$	1,019.71	$	5.55
Investor Class
Actual	$	1,000.00	$	1,149.43	$	7.42
Hypothetical **	$	1,000.00	$	1,018.30	$	6.97

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.09% and 1.37% for the Y and Investor Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

10

American Beacon Funds

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon Balanced Fund, American Beacon Mid-Cap Value Fund, and American Beacon Small Cap Value II Fund:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the American Beacon Balanced Fund, American Beacon Mid-Cap Value Fund, and American Beacon Small Cap Value II Fund (three of the funds constituting the American Beacon Funds) (collectively, the “Funds”), as of October 31, 2013, the related statements of operations for the year then ended, and the statements of changes in net assets and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of each Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the, American Beacon Balanced Fund, American Beacon Mid-Cap Value Fund, and American Beacon Small Cap Value II Fund at October 31, 2013, the results of their operations for the year then ended, and the changes in their net assets and the financial highlights for the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Dallas, Texas

December 30, 2013

11

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
COMMON STOCK - 58.16%
CONSUMER DISCRETIONARY - 5.75%
Auto Components - 1.01%
Delphi Automotive PLC		14,000	$	801
Johnson Controls, Inc.		149,400		6,895
Magna International, Inc., Class A		9,600		813
				8,509
Automobiles - 1.97%
General Motors Co.A		157,600		5,823
Hertz Global Holdings, Inc.A		204,420		4,693
Toyota Motor Corp., ADRB		47,500		6,148
				16,664
Hotels, Restaurants & Leisure - 0.37%
Carnival Corp.		89,700		3,108
Household Durables - 0.20%
Stanley Black & Decker, Inc.		21,300		1,685
Media - 0.85%
Comcast Corp., Class A		41,600		1,979
Comcast Corp., Special Class A		18,200		843
Interpublic Group of Cos., Inc.		119,000		1,999
Time Warner Cable, Inc.		19,400		2,331
				7,152
Multiline Retail - 1.20%
Dillard’s, Inc., Class A		24,600		2,017
Target Corp.		124,500		8,066
				10,083
Specialty Retail - 0.15%
Lowe’s Cos., Inc.		25,400		1,264
Total Consumer Discretionary				48,465
CONSUMER STAPLES - 4.03%
Beverages - 0.67%
Diageo PLC, ADRB		30,600		3,904
Molson Coors Brewing Co., Class B		15,900		859
PepsiCo, Inc.		10,000		841
				5,604
Food & Drug Retailing - 1.58%
Kroger Co.		77,800		3,333
Sysco Corp.		84,500		2,733
Wal-Mart Stores, Inc.		93,700		7,192
				13,258
Food Products - 0.35%
Kellogg Co.		19,800		1,252
Mondelez International, Inc., Class A		51,100		1,719
				2,971
Tobacco - 1.43%
Altria Group, Inc.		66,100		2,461
Imperial Tobacco Group PLC, ADRB		47,000		3,525
Philip Morris International, Inc.		68,300		6,086
				12,072
Total Consumer Staples				33,905
ENERGY - 7.95%
Energy Equipment & Services - 1.00%
Cobalt International Energy, Inc.A		152,400		3,537
Halliburton Co.		92,400		4,900
				8,437

	Shares		Fair Value
Oil & Gas - 6.95%
Apache Corp.		47,500	$	4,218
BP PLC, ADRB		255,478		11,880
Chevron Corp.		26,828		3,218
ConocoPhillips		64,090		4,698
Hess Corp.		52,200		4,239
Kosmos Energy Ltd.A		45,700		487
Marathon Oil Corp.		41,500		1,463
Marathon Petroleum Corp.		24,850		1,781
Murphy Oil Corp.		16,800		1,013
Occidental Petroleum Corp.		81,600		7,840
Phillips 66		68,295		4,400
Royal Dutch Shell PLC, Class B, ADRB		70,700		4,915
Seadrill Ltd.		63,700		2,970
Total S.A., ADRB		89,000		5,445
				58,567
Total Energy				67,004
FINANCIALS - 14.76%
Banks - 2.83%
Bank of America Corp.		903,580		12,615
Bank of New York Mellon Corp.		53,000		1,685
PNC Financial Services Group, Inc.		63,825		4,693
SunTrust Banks, Inc.		144,600		4,864
				23,857
Diversified Financials - 7.81%
American Express Co.		62,700		5,129
Blackstone Group LPC		89,800		2,360
Capital One Financial Corp.		101,100		6,943
Charles Schwab Corp.		96,700		2,190
Citigroup, Inc.		230,170		11,228
JPMorgan Chase & Co.		373,434		19,246
KKR & Co., LPC		110,600		2,428
Morgan Stanley		44,400		1,276
SLM Corp.		96,400		2,446
Wells Fargo & Co.		290,898		12,418
				65,664
Insurance - 4.01%
ACE Ltd.		18,000		1,718
Allstate Corp.		62,000		3,290
American International Group, Inc.		123,500		6,379
Berkshire Hathaway, Inc., Class BA		34,081		3,922
Hartford Financial Services Group, Inc.		73,200		2,467
Lincoln National Corp.		75,100		3,410
MetLife, Inc.		159,400		7,540
Unum Group		92,300		2,930
XL Group PLC		70,100		2,143
				33,799
Real Estate - 0.11%
Two Harbors Investment Corp.D		102,500		956
Total Financials				124,276
HEALTH CARE - 8.64%
Health Care Equipment & Supplies - 1.14%
Covidien PLC		26,300		1,686
Medtronic, Inc.		122,900		7,055
Zimmer Holdings, Inc.		9,400		822
				9,563
Health Care Providers & Services - 2.43%
Aetna, Inc.		12,200		765
Humana, Inc.		45,500		4,193

See accompanying notes

12

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
Quest Diagnostics, Inc.		16,500	$	989
UnitedHealth Group, Inc.		52,700		3,597
WellPoint, Inc.		129,200		10,956
				20,500
Pharmaceuticals - 5.07%
AstraZeneca PLC, ADRB		46,800		2,474
GlaxoSmithKline PLC, ADRB		50,100		2,637
Johnson & Johnson		87,400		8,094
Merck & Co., Inc.		193,200		8,711
Novartis AG, ADRB		47,000		3,645
Pfizer, Inc.		331,654		10,174
Sanofi, ADRB		130,100		6,958
				42,693
Total Health Care				72,756
INDUSTRIALS - 5.75%
Aerospace & Defense - 1.72%
Boeing Co.		16,800		2,192
General Dynamics Corp.		41,400		3,586
Lockheed Martin Corp.		16,000		2,133
Northrop Grumman Corp.		8,400		903
Raytheon Co.		68,700		5,660
				14,474
Air Freight & Couriers - 0.33%
FedEx Corp.		21,100		2,764
Electrical Equipment - 0.55%
Emerson Electric Co.		68,600		4,594
Industrial Conglomerates - 1.09%
General Electric Co.		170,400		4,454
Honeywell International, Inc.		54,600		4,736
				9,190
Machinery - 2.06%
Caterpillar, Inc.		33,800		2,818
Cummins, Inc.		29,300		3,721
Illinois Tool Works, Inc.		21,400		1,686
Joy Global, Inc.		53,600		3,042
PACCAR, Inc.		36,400		2,024
Reliance Steel & Aluminum Co.		31,100		2,279
Xylem, Inc.		53,700		1,853
				17,423
Total Industrials				48,445
INFORMATION TECHNOLOGY - 6.07%
Communications Equipment - 0.68%
Cisco Systems, Inc.		37,700		848
Corning, Inc.		285,500		4,879
				5,727
Computers & Peripherals - 2.10%
Apple, Inc.		7,710		4,027
Hewlett-Packard Co.		214,500		5,227
International Business Machines Corp.		11,800		2,115
Seagate Technology PLC		84,325		4,105
Western Digital Corp.		32,300		2,249
				17,723
Electronic Equipment & Instruments - 0.14%
TE Connectivity Ltd.		23,225		1,196
Semiconductor Equipment & Products - 0.56%
Applied Materials, Inc.		116,400		2,078
Intel Corp.		55,400		1,353

	Shares		Fair Value
Texas Instruments, Inc.		30,100	$	1,267
				4,698
Software - 2.59%
Activision Blizzard, Inc.		235,900		3,925
Check Point Software Technologies Ltd.A		32,900		1,909
Microsoft Corp.		332,200		11,744
Oracle Corp.		126,300		4,231
				21,809
Total Information Technology				51,153
MATERIALS - 0.64%
Dow Chemical Co.		76,700		3,027
EI du Pont de Nemours & Co.		38,200		2,338
Total Materials				5,365
TELECOMMUNICATION SERVICES - 2.21%
Diversified Telecommunication Services - 1.45%
AT&T, Inc.		220,877		7,996
Verizon Communications, Inc.		84,408		4,263
				12,259
Wireless Telecommunication Services - 0.76%
China Mobile Ltd., ADRB		34,600		1,800
Vodafone Group PLC, ADRB		124,200		4,573
				6,373
Total Telecommunication Services				18,632
UTILITIES - 2.36%
CenterPoint Energy, Inc.		138,400		3,405
Edison International		22,000		1,079
Entergy Corp.		49,400		3,197
Exelon Corp.		133,800		3,819
NRG Energy, Inc.		83,700		2,388
Public Service Enterprise Group, Inc.		178,600		5,982
Total Utilities				19,870
Total Common Stock (Cost $358,178)				489,871
PREFERRED STOCK - 0.77%
FINANCIALS - 0.38%
Insurance - 0.20%
Allstate Corp., 1.00%, Due 1/15/2053		68,300		1,650
Real Estate - 0.18%
Public Storage, Inc., 5.75%, Due 12/31/2049 D		68,900		1,506
Total Financials				3,156
MANUFACTURING - 0.25%
General Motors Co., 4.75%, Due 12/1/2013		41,700		2,140
SERVICE - 0.14%
Comcast Corp., 5.00%, Due 12/15/2061		52,500		1,182
Total Preferred Stock (Cost $6,668)				6,478
	Par Amount
	(000’s)
CORPORATE OBLIGATIONS 12.58%
MANUFACTURING- 2.09%
ABB Finance USA, Inc.,
2.875%, Due 5/8/2022	$	175		170

See accompanying notes

13

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Altera Corp.,
1.75%, Due 5/15/2017	$	165	$	164
2.50%, Due 11/15/2018		165		164
American Honda Finance Corp.,
3.875%, Due 9/21/2020E		250		264
Analog Devices, Inc.,
3.00%, Due 4/15/2016		225		235
Apple, Inc.,
2.40%, Due 5/3/2023		740		676
Applied Materials, Inc.,
2.65%, Due 6/15/2016		310		323
BHP Billiton Finance USA Ltd.,
1.625%, Due 2/24/2017		285		288
CA, Inc.,
4.50%, Due 8/15/2023		425		427
Caterpillar Financial Services Corp.,
1.10%, Due 5/29/2015		270		272
1.625%, Due 6/1/2017		480		485
Cooper US, Inc.,
3.875%, Due 12/15/2020		355		370
Cummins, Inc.,
3.65%, Due 10/1/2023		425		433
Daimler Finance North America LLC,
3.00%, Due 3/28/2016E F		160		167
2.95%, Due 1/11/2017E F		300		312
2.40%, Due 4/10/2017E F		550		560
Dow Chemical Co.,
4.25%, Due 11/15/2020		370		395
4.125%, Due 11/15/2021		300		310
Eaton Corp., PLC,
5.60%, Due 5/15/2018		205		234
2.75%, Due 11/2/2022E		200		188
EMC Corp.,
1.875%, Due 6/1/2018		560		562
Ford Motor Credit Co. LLC,
4.25%, Due 2/3/2017F		300		324
5.875%, Due 8/2/2021F		400		458
Hewlett-Packard Co.,
2.20%, Due 12/1/2015		325		331
4.65%, Due 12/9/2021		235		238
4.05%, Due 9/15/2022		300		292
6.00%, Due 9/15/2041		1,885		1,839
Intel Corp.,
1.35%, Due 12/15/2017		540		536
3.30%, Due 10/1/2021		315		318
John Deere Capital Corp.,
1.05%, Due 10/11/2016		315		316
1.30%, Due 3/12/2018		465		461
Johnson Controls, Inc.,
5.00%, Due 3/30/2020		320		353
Koninklijke Philips Electronics N.V.,
5.75%, Due 3/11/2018		270		314
LYB International Finance BV,
4.00%, Due 7/15/2023		220		222
Northrop Grumman Corp.,
5.05%, Due 8/1/2019		150		169
Oracle Corp.,
1.20%, Due 10/15/2017		445		439
PACCAR Financial Corp.,
1.15%, Due 8/16/2016		290		291
Precision Castparts Corp.,
0.70%, Due 12/20/2015		240		239

	Par Amount		Fair Value
	(000’s)		(000’s)
Rio Tinto Finance USA Ltd.,
2.50%, Due 5/20/2016	$	405	$	418
Teck Resources Ltd.,
6.00%, Due 8/15/2040		70		67
Toyota Motor Credit Corp.,
2.05%, Due 1/12/2017		265		272
Tyco Electronics Group S.A.,
1.60%, Due 2/3/2015		150		151
6.55%, Due 10/1/2017		175		203
United Technologies Corp.,
1.80%, Due 6/1/2017		980		1,000
6.125%, Due 7/15/2038		450		549
Volkswagen International Finance N.V.,
1.625%, Due 3/22/2015E		500		506
Xerox Corp.,
8.25%, Due 5/15/2014		160		166
2.95%, Due 3/15/2017		150		155
				17,626
FINANCE- 6.10%
AEGON Funding Co. LLC,
5.75%, Due 12/15/2020F		350		399
American Express Co.,
4.05%, Due 12/3/2042		390		349
American Express Credit Corp.,
1.75%, Due 6/12/2015		370		377
1.30%, Due 7/29/2016		280		282
American International Group, Inc.,
6.40%, Due 12/15/2020		625		750
4.875%, Due 6/1/2022		600		657
Bank of America Corp.,
6.50%, Due 8/1/2016		1,340		1,522
7.80%, Due 9/15/2016		700		811
2.60%, Due 1/15/2019		395		398
7.625%, Due 6/1/2019		1,295		1,614
Bank of New York Mellon Corp.,
2.30%, Due 7/28/2016		505		524
Bank of Nova Scotia,
0.75%, Due 10/9/2015		335		335
Bank One Corp.,
4.90%, Due 4/30/2015		250		264
Barclays Bank PLC,
3.90%, Due 4/7/2015		330		345
6.75%, Due 5/22/2019		350		423
Bear Stearns Cos. LLC,
7.25%, Due 2/1/2018F		2,300		2,774
Berkshire Hathaway Finance Corp.,
0.95%, Due 8/15/2016		315		316
BNP Paribas S.A.,
3.60%, Due 2/23/2016		320		338
Boston Properties LP,
3.125%, Due 9/1/2023C		255		239
Branch Banking & Trust Co.,
1.45%, Due 10/3/2016		525		531
Canadian Imperial Bank of Commerce,
2.35%, Due 12/11/2015		465		480
Capital One Financial Corp.,
2.15%, Due 3/23/2015		345		351
Citigroup, Inc.,
1.178%, Due 4/1/2014G		6		6
6.375%, Due 8/12/2014		874		912
0.546%, Due 11/5/2014G		320		320
1.70%, Due 7/25/2016		380		384
8.50%, Due 5/22/2019		1,970		2,549

See accompanying notes

14

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
CNA Financial Corp.,
7.35%, Due 11/15/2019	$	385	$	475
ERP Operating LP,
3.00%, Due 4/15/2023C		205		195
Fifth Third Bancorp,
3.625%, Due 1/25/2016		325		343
0.672%, Due 12/20/2016G		1,000		988
8.25%, Due 3/1/2038		455		614
General Electric Capital Corp.,
5.625%, Due 5/1/2018		375		435
6.00%, Due 8/7/2019		350		414
5.50%, Due 1/8/2020		250		289
5.30%, Due 2/11/2021		205		228
3.15%, Due 9/7/2022		635		622
5.875%, Due 1/14/2038		280		316
Goldman Sachs Group, Inc.,
5.35%, Due 1/15/2016		725		792
6.25%, Due 9/1/2017		650		752
5.95%, Due 1/18/2018		590		677
6.00%, Due 6/15/2020		175		203
5.75%, Due 1/24/2022		400		454
HCP, Inc.,
5.375%, Due 2/1/2021		425		470
Health Care REIT, Inc.,
4.125%, Due 4/1/2019D		240		255
5.25%, Due 1/15/2022D		275		298
Humana, Inc.,
3.15%, Due 12/1/2022		480		453
ING Bank N.V.,
5.125%, Due 5/1/2015E		450		466
0.937%, Due 5/23/2016G		990		964
3.75%, Due 3/7/2017E		400		423
JPMorgan Chase & Co.,
0.584%, Due 6/13/2016G		1,000		991
5.50%, Due 10/15/2040		325		354
KeyCorp,
5.10%, Due 3/24/2021		255		283
Liberty Mutual Group, Inc.,
5.00%, Due 6/1/2021E		280		302
Liberty Mutual Insurance Co.,
7.875%, Due 10/15/2026E		1,500		1,844
Lincoln National Corp.,
4.75%, Due 2/15/2014		245		248
Lloyds TSB Bank PLC,
4.375%, Due 1/12/2015E		325		338
Loews Corp.,
5.25%, Due 3/15/2016		650		716
Merrill Lynch & Co. Inc.,
6.40%, Due 8/28/2017		705		819
6.11%, Due 1/29/2037		365		391
MetLife, Inc.,
6.375%, Due 6/15/2034		350		429
Morgan Stanley,
0.724%, Due 10/15/2015G		920		916
5.375%, Due 10/15/2015		1,400		1,511
1.75%, Due 2/25/2016		385		389
7.30%, Due 5/13/2019		350		427
5.625%, Due 9/23/2019		350		399
3.75%, Due 2/25/2023		385		380
National Australia Bank Ltd.,
4.375%, Due 12/10/2020E		325		352
Nordea Bank AB,
4.875%, Due 1/27/2020E		300		333
PNC Funding Corp.,
4.25%, Due 9/21/2015		335		357

	Par Amount		Fair Value
	(000’s)		(000’s)
4.375%, Due 8/11/2020	$	330	$	359
3.30%, Due 3/8/2022		425		420
Prudential Financial, Inc.,
7.375%, Due 6/15/2019		300		373
Rabobank Nederland,
2.125%, Due 10/13/2015		340		349
Royal Bank of Canada,
1.15%, Due 3/13/2015		285		288
0.625%, Due 12/5/2016		575		575
Simon Property Group LP,
6.125%, Due 5/30/2018C		550		649
10.35%, Due 4/1/2019C		325		446
State Street Corp.,
2.875%, Due 3/7/2016		510		535
SunTrust Banks, Inc.,
3.50%, Due 1/20/2017		345		366
Toronto Dominion Bank,
2.625%, Due 9/10/2018		160		165
Trinity Acquisition PLC,
4.625%, Due 8/15/2023		295		298
UBS AG,
5.875%, Due 12/20/2017		611		708
UnitedHealth Group, Inc.,
1.625%, Due 3/15/2019		330		321
3.875%, Due 10/15/2020		325		345
3.95%, Due 10/15/2042		215		188
US Bancorp,
1.65%, Due 5/15/2017		280		282
Ventas Realty LP,
5.70%, Due 9/30/2043C		175		184
Wachovia Corp.,
0.576%, Due 10/28/2015G		865		862
0.614%, Due 10/15/2016G		910		899
5.75%, Due 2/1/2018		695		811
WellPoint, Inc.,
4.35%, Due 8/15/2020		520		558
Wells Fargo & Co.,
2.15%, Due 1/15/2019		215		216
				51,352
CONSUMER- 0.32%
Altria Group, Inc.,
4.75%, Due 5/5/2021		310		334
Anheuser-Busch InBev Worldwide, Inc.,
5.00%, Due 4/15/2020		330		375
8.00%, Due 11/15/2039		125		184
ConAgra Foods, Inc.,
3.20%, Due 1/25/2023		275		261
Diageo Capital PLC,
1.50%, Due 5/11/2017		880		885
Kellogg Co.,
1.875%, Due 11/17/2016		150		154
Kraft Foods Group, Inc.,
1.625%, Due 6/4/2015		170		173
SABMiller Holdings, Inc.,
4.95%, Due 1/15/2042E		300		307
				2,673
SERVICE- 1.36%
AbbVie, Inc.,
1.20%, Due 11/6/2015		280		282
2.90%, Due 11/6/2022		420		401
Baxter International, Inc.,
1.85%, Due 1/15/2017		155		159
Becton Dickinson and Co.,
3.25%, Due 11/12/2020		290		297

See accompanying notes

15

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Cardinal Health, Inc.,
3.20%, Due 3/15/2023	$	445	$	423
CBS Corp.,
3.375%, Due 3/1/2022		500		489
Celgene Corp.,
5.25%, Due 8/15/2043		185		186
Comcast Corp.,
5.875%, Due 2/15/2018		535		625
6.55%, Due 7/1/2039		450		555
Covidien International Finance S.A.,
2.80%, Due 6/15/2015		220		227
CVS Caremark Corp.,
3.25%, Due 5/18/2015		170		177
DIRECTV Holdings LLC,
6.35%, Due 3/15/2040F		155		160
eBay, Inc.,
1.35%, Due 7/15/2017		240		240
Genzyme Corp.,
5.00%, Due 6/15/2020		275		308
Gilead Sciences, Inc.,
2.40%, Due 12/1/2014		245		250
GlaxoSmithKline Capital PLC,
1.50%, Due 5/8/2017		725		731
Home Depot, Inc.,
2.70%, Due 4/1/2023		180		171
Lowe’s Companies, Inc.,
3.875%, Due 9/15/2023		770		792
McKesson Corp.,
3.25%, Due 3/1/2016		160		168
Novartis Capital Corp.,
2.90%, Due 4/24/2015		210		218
Quest Diagnostics, Inc.,
4.75%, Due 1/30/2020		150		160
Sanofi,
1.25%, Due 4/10/2018		560		551
4.00%, Due 3/29/2021		355		381
St Jude Medical, Inc.,
2.50%, Due 1/15/2016		395		406
Teva Pharmaceutical Finance II,
3.00%, Due 6/15/2015		220		228
Thomson Reuters Corp.,
4.70%, Due 10/15/2019		150		165
Time Warner Cable, Inc.,
5.85%, Due 5/1/2017		650		715
6.75%, Due 7/1/2018		95		107
Time Warner, Inc.,
4.875%, Due 3/15/2020		460		509
4.75%, Due 3/29/2021		325		353
Viacom, Inc.,
4.50%, Due 2/27/2042		450		394
Walgreen Co.,
3.10%, Due 9/15/2022		180		172
Wal-Mart Stores, Inc.,
7.55%, Due 2/15/2030		350		475
				11,475
UTILITIES- 0.55%
Commonwealth Edison Co.,
4.00%, Due 8/1/2020		175		188
Consolidated Edison Co. of New York, Inc.,
5.50%, Due 12/1/2039		350		395
Duke Energy Indiana, Inc.,
6.05%, Due 6/15/2016		330		371

	Par Amount		Fair Value
	(000’s)		(000’s)
EDF S.A.,
4.60%, Due 1/27/2020E	$	320	$	353
MidAmerican Energy Holdings Co.,
6.125%, Due 4/1/2036		500		567
National Rural Utilities Cooperative Finance Corp.,
5.45%, Due 4/10/2017		315		357
Pacific Gas & Electric Co.,
6.25%, Due 12/1/2013		175		176
Progress Energy, Inc.,
4.875%, Due 12/1/2019		350		389
Sempra Energy,
6.50%, Due 6/1/2016		210		238
Sierra Pacific Power Co.,
3.375%, Due 8/15/2023		205		205
Southwestern Electric Power Co.,
3.55%, Due 2/15/2022		600		589
Union Electric Co.,
6.70%, Due 2/1/2019		260		314
Xcel Energy, Inc.,
5.613%, Due 4/1/2017		434		485
				4,627
ENERGY- 1.17%
Apache Corp.,
5.10%, Due 9/1/2040		170		173
BP Capital Markets PLC,
4.50%, Due 10/1/2020		430		472
2.50%, Due 11/6/2022		540		499
Cameron International Corp.,
6.375%, Due 7/15/2018		330		389
Canadian Natural Resources Ltd.,
3.45%, Due 11/15/2021		430		432
6.25%, Due 3/15/2038		365		419
ConocoPhillips,
6.65%, Due 7/15/2018		460		556
Devon Energy Corp.,
4.75%, Due 5/15/2042		300		284
Energy Transfer Partners LP,
8.50%, Due 4/15/2014C		329		340
9.00%, Due 4/15/2019C		265		339
Enterprise Products Operating LLC,
6.125%, Due 10/15/2039F		450		504
EOG Resources, Inc.,
2.50%, Due 2/1/2016		325		337
Halliburton Co.,
3.25%, Due 11/15/2021		525		529
Husky Energy, Inc.,
3.95%, Due 4/15/2022		480		489
Marathon Oil Corp.,
6.00%, Due 10/1/2017		290		334
Phillips 66,
1.95%, Due 3/5/2015		200		203
4.30%, Due 4/1/2022		385		400
Pride International, Inc.,
6.875%, Due 8/15/2020		220		264
Shell International Finance BV,
0.625%, Due 12/4/2015		525		526
Spectra Energy Capital LLC,
5.668%, Due 8/15/2014F		315		327
5.65%, Due 3/1/2020F		455		499
Spectra Energy Partners LP,
4.60%, Due 6/15/2021C		175		185
The Williams Cos., Inc.,

See accompanying notes

16

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
3.70%, Due 1/15/2023	$	180	$	165
TransCanada PipeLines Ltd.,
3.75%, Due 10/16/2023		300		302
7.625%, Due 1/15/2039		335		454
6.10%, Due 6/1/2040		170		197
Valero Energy Corp.,
9.375%, Due 3/15/2019		190		248
				9,866
TRANSPORTATION- 0.30%
Burlington Northern Santa Fe LLC,
7.95%, Due 8/15/2030F		235		312
5.75%, Due 5/1/2040F		170		188
5.15%, Due 9/1/2043F		200		206
Canadian National Railway Co.,
5.55%, Due 5/15/2018		350		405
CSX Corp.,
3.70%, Due 11/1/2023		485		484
5.50%, Due 4/15/2041		325		348
Norfolk Southern Corp.,
5.75%, Due 4/1/2018		425		491
United Parcel Service, Inc.,
1.125%, Due 10/1/2017		125		124
				2,558
TELECOMMUNICATIONS- 0.69%
America Movil SAB de CV,
6.375%, Due 3/1/2035		350		383
AT&T, Inc.,
0.80%, Due 12/1/2015		370		370
5.35%, Due 9/1/2040		248		242
4.35%, Due 6/15/2045		341		282
Cellco Partnership,
8.50%, Due 11/15/2018		425		546
Deutsche Telekom International Finance BV,
4.875%, Due 3/6/2042E		300		290
Oi S.A.,
5.75%, Due 2/10/2022E		385		361
Orange S.A.,
4.375%, Due 7/8/2014		165		169
2.125%, Due 9/16/2015		150		153
Verizon Communications, Inc.,
4.60%, Due 4/1/2021		380		408
3.50%, Due 11/1/2021		200		200
5.15%, Due 9/15/2023		170		184
6.40%, Due 9/15/2033		350		396
6.90%, Due 4/15/2038		275		326
6.55%, Due 9/15/2043		600		695
Vodafone Group PLC,
1.625%, Due 3/20/2017		390		390
6.15%, Due 2/27/2037		365		409
				5,804
Total Corporate Obligations (Cost $100,596)				105,981
FOREIGN GOVERNMENT OBLIGATIONS 0.10%
Oil & Gas - 0.10%
Petrobras International Finance Co.,
3.875%, Due 1/27/2016		200		207
3.50%, Due 2/6/2017		140		142
6.875%, Due 1/20/2040		150		150
Petroleos Mexicanos,
6.00%, Due 3/5/2020		325		365

	Par Amount		Fair Value
	(000’s)		(000’s)
Total Foreign Government Obligations (Cost $809)			$	864
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 2.08%
Banc of America Commercial Mortgage Trust,
5.317%, Due 9/10/2047, 2006-5 A2	$	227		228
5.633%, Due 4/10/2049, 2007-2 A2		58		59
Bear Stearns Commercial Mortgage Securities,
5.201%, Due 12/11/2038, 2006-PW14 A4		665		733
5.54%, Due 9/11/2041, 2006-PW13 A4		420		460
GNR Project Loans,
1.692%, Due 11/16/2035, 2010-148 A		150		151
2.174%, Due 7/16/2038, 2011-147 A		1,913		1,936
1.147%, Due 12/16/2038, 2013-139 A		1,996		1,971
2.989%, Due 3/16/2039, 2010-71 AC		228		230
1.624%, Due 7/16/2039, 2013-78 AB		1,978		1,956
1.367%, Due 11/16/2041, 2013 125 AB		1,992		1,962
2.543%, Due 9/16/2044, 2011-96 AC		699		712
3.20%, Due 11/16/2044, 2011-92 B		2,400		2,496
GS Mortgage Securities Corp II,
3.679%, Due 8/10/2043, 2010-C1 A1E		327		347
3.849%, Due 12/10/2043, 2010-C2 A1E		510		540
3.645%, Due 3/10/2044, 2011-GC3 A2E		500		526
JP Morgan Chase Commercial Mortgage Securities Corp.,
4.678%, Due 7/15/2042, 2005-LDP2 A3A		101		101
3.853%, Due 6/15/2043, 2010-C1 A1E		650		674
4.388%, Due 2/15/2046, 2011-C3 A3E		550		600
4.625%, Due 3/15/2046, 2005-LDP1 A2		52		52
5.706%, Due 2/12/2049, 2007-CB19 A4		550		616
5.629%, Due 2/12/2051, 2007-CB20 A2		46		46
JPMBB Commercial Mortgage Securities Trust 2013-C12,
3.157%, Due 7/15/2045, 2013 C12 ASB		450		457
LB-UBS Commercial Mortgage Trust,
5.424%, Due 2/15/2040, 2007-C1 A4		500		555
Wachovia Bank Commercial Mortgage Trust,
5.728%, Due 6/15/2049, 2007-C32 A2		87		89
Total Non-Agency Mortgage-Backed Obligations (Cost $17,055)				17,497
ASSET-BACKED OBLIGATIONS - 0.98%
Capital Auto Receivables Asset Trust 2013-2,
0.92%, Due 9/20/2016, 2013-2 A2		1,500		1,502
Citibank Credit Card Issuance Trust,
1.11%, Due 7/23/2018, 2013 A3 A3		880		885

See accompanying notes

17

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
CNH Equipment Trust,
2.04%, Due 10/17/2016, 2011-A A4	$	380	$	386
0.94%, Due 5/15/2017, 2012 A A3		381		382
Ford Credit Auto Lease Trust,
0.60%, Due 3/15/2016, 2013-A A3		240		240
Ford Credit Floorplan Master Owner Trust,
1.50%, Due 9/15/2018, 2013-5 A1		1,100		1,112
National Credit Union Administration,
0.574%, Due 3/11/2020, 2011 R3 1AG		1,797		1,798
Nissan Auto Lease Trust,
0.58%, Due 11/16/2015, 2012 B A3		415		415
Nissan Master Owner Trust Receivables,
0.474%, Due 2/15/2018, 2013-A AG		1,500		1,498
Total Asset-Backed Obligations (Cost $8,200)				8,218
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 5.08%
Federal Home Loan Mortgage Corporation
4.50%, Due 3/1/2019		147		155
5.00%, Due 10/1/2020		61		64
3.50%, Due 9/1/2028		2,285		2,414
5.00%, Due 8/1/2033		318		345
5.50%, Due 2/1/2034		296		323
5.00%, Due 3/1/2034		225		243
6.00%, Due 6/1/2034		223		247
6.00%, Due 8/1/2034		178		196
5.00%, Due 8/1/2035		192		207
5.00%, Due 9/1/2035		138		149
5.50%, Due 4/1/2037		215		233
5.50%, Due 5/1/2038		115		124
0.57%, Due 12/15/2040G		579		580
4.00%, Due 1/1/2041		839		880
4.50%, Due 2/1/2041		702		750
3.50%, Due 3/1/2042		448		458
3.50%, Due 6/1/2042		2,267		2,319
3.50%, Due 7/1/2042		580		594
3.00%, Due 8/1/2042		928		913
				11,194
Federal National Mortgage Association
5.50%, Due 2/1/2014		6		6
6.00%, Due 4/1/2016		37		39
5.00%, Due 12/1/2017		126		134
4.50%, Due 9/1/2018		93		99
4.00%, Due 8/1/2020		139		148
3.50%, Due 1/1/2026		187		197
4.00%, Due 5/1/2026		976		1,039
4.00%, Due 6/1/2026		1,234		1,321
3.50%, Due 1/1/2028		275		291
5.00%, Due 3/1/2034		351		382
4.50%, Due 9/1/2034		148		158
5.50%, Due 12/1/2035		94		103
5.00%, Due 2/1/2036		141		153
5.50%, Due 4/1/2036		182		198
6.00%, Due 9/1/2036		139		152
5.50%, Due 2/1/2037		210		229
5.50%, Due 6/1/2038		60		65
4.50%, Due 1/1/2040		779		833
5.00%, Due 5/1/2040		2,371		2,586
4.00%, Due 9/1/2040		603		636
4.00%, Due 1/1/2041		1,099		1,159

	Par Amount		Fair Value
	(000’s)		(000’s)
4.00%, Due 2/1/2041	$	2,827	$	2,986
5.00%, Due 3/1/2041		949		1,036
4.00%, Due 4/1/2041		846		895
4.50%, Due 4/1/2041		1,845		1,979
4.50%, Due 5/1/2041		485		522
4.50%, Due 8/1/2041		1,163		1,248
4.50%, Due 10/1/2041		703		755
3.50%, Due 9/1/2042		795		817
4.50%, Due 1/1/2043		2,098		2,249
4.00%, Due 7/1/2043		1,274		1,331
				23,746
Government National Mortgage Association
7.00%, Due 12/15/2025		122		142
6.50%, Due 8/15/2027		122		140
6.50%, Due 11/15/2027		130		149
7.50%, Due 12/15/2028		113		134
5.50%, Due 7/15/2033		276		309
6.00%, Due 12/15/2033		309		350
6.00%, Due 10/15/2038		557		615
5.00%, Due 10/15/2039		1,902		2,120
5.50%, Due 2/15/2040		582		637
4.00%, Due 5/15/2040		632		675
3.50%, Due 3/15/2043		729		757
5.50%, Due 2/20/2034		396		442
4.50%, Due 10/20/2040		878		962
6.00%, Due 5/20/2042		352		394
				7,826
Total U.S. Agency Mortgage-Backed Obligations (Cost $41,939)				42,766
U.S. TREASURY OBLIGATIONS - 12.40%
0.25%, Due 12/15/2015		3,650		3,643
1.50%, Due 6/30/2016		3,000		3,081
3.125%, Due 10/31/2016		3,000		3,224
0.875%, Due 1/31/2017		8,685		8,734
0.75%, Due 12/31/2017		800		790
1.50%, Due 8/31/2018		3,800		3,843
1.375%, Due 9/30/2018		1,000		1,004
1.125%, Due 5/31/2019		4,000		3,915
1.25%, Due 2/29/2020		2,600		2,519
2.00%, Due 11/15/2021		4,090		4,026
2.00%, Due 2/15/2022		4,985		4,883
6.25%, Due 8/15/2023		800		1,064
6.875%, Due 8/15/2025		580		822
5.25%, Due 11/15/2028		450		567
4.75%, Due 2/15/2037		130		157
4.50%, Due 8/15/2039		730		852
3.125%, Due 11/15/2041		3,230		2,946
2.875%, Due 5/15/2043		68,015		58,354
Total U.S. Treasury Obligations (Cost $103,675)				104,424
U.S. AGENCY OBLIGATIONS - 1.89% (Cost- $15,026)
Federal Home Loan Mortgage Corp.,
4.50%, Due 1/15/2015		15,140		15,919
MUNICIPAL OBLIGATIONS - 0.33%
Municipal Electric Authority of Georgia,
6.64%, Due 4/1/2057		70		74

See accompanying notes

18

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
6.66%, Due 4/1/2057	$	2,630	$	2,738
Total Municipal Obligations (Cost $2,796)				2,812
	Shares
SHORT-TERM INVESTMENTS - 5.30% (Cost $44,675)
JPMorgan U.S. Government Money Market Fund, Capital Class		44,674,762		44,675
TOTAL INVESTMENTS -99.67% (Cost $699,617)				839,505
OTHER ASSETS, NET OF LIABILITIES - 0.33%				2,801
TOTAL NET ASSETS - 100.00%			$	842,306

^A  Non-income producing security.

^B  ADR - American Depositary Receipt.

^C  Limited Partnership.

^D  REIT - Real Estate Investment Trust.

^E  Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $10,053 or 1.19% of net assets. The Fund has no right to demand registration of these securities.

^F  Limited Liability Company.

^G  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.

Futures Contracts Open on October 31, 2013 (000’s):

Description	Type	Number of Contracts		Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
S&P 500 Mini E Index Futures	Long		409	December, 2013	$	35,808	$	1,295
					$	35,808	$	1,295

See accompanying notes

19

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
COMMON STOCK - 92.70%
CONSUMER DISCRETIONARY - 14.88%
Auto Components - 2.35%
Dana Holding Corp.		61,275	$	1,201
Delphi Automotive PLC		46,825		2,679
TRW Automotive Holdings Corp.A		17,925		1,346
				5,226
Automobiles - 0.37%
Harley-Davidson, Inc.		12,696		813
Hotels, Restaurants & Leisure - 2.08%
Darden Restaurants, Inc.		18,955		977
International Game Technology		91,600		1,722
Royal Caribbean Cruises Ltd.		45,500		1,913
				4,612
Household Durables - 1.72%
Newell Rubbermaid, Inc.		30,719		910
Stanley Black & Decker, Inc.		36,744		2,906
				3,816
Leisure Equipment & Products - 0.34%
Hasbro, Inc.		14,591		754
Media - 3.14%
Interpublic Group of Cos., Inc.		188,461		3,166
News Corp, Class AA		21,875		385
News Corp., Class BA		53,200		954
Omnicom Group, Inc.		36,275		2,471
				6,976
Multiline Retail - 0.42%
Dollar General Corp.A		16,198		936
Specialty Retail - 4.46%
American Eagle Outfitters, Inc.		61,651		955
Hanesbrands, Inc.		29,800		2,029
L Brands, Inc.		28,700		1,797
Murphy USA, Inc.A		26,100		1,059
PetSmart, Inc.		10,859		790
Rent-A-Center, Inc.		11,000		377
Sally Beauty Holdings, Inc.A		30,020		790
Staples, Inc.		130,125		2,097
				9,894
Total Consumer Discretionary				33,027
CONSUMER STAPLES - 3.90%
Beverages - 0.80%
Coca-Cola Enterprises, Inc.		16,556		691
Molson Coors Brewing Co., Class B		20,246		1,093
				1,784
Food & Drug Retailing - 0.84%
Kroger Co.		24,980		1,070
Sysco Corp.		24,431		790
				1,860
Food Products - 1.19%
Darling International, Inc.A		43,950		1,023
Ingredion, Inc.		14,355		944
JM Smucker Co.		5,998		667
				2,634
Tobacco - 1.07%
Lorillard, Inc.		24,300		1,240

	Shares		Fair Value
			(000’s)
Reynolds American, Inc.		22,000	$	1,130
				2,370
Total Consumer Staples				8,648
ENERGY - 6.53%
Energy Equipment & Services - 3.07%
Baker Hughes, Inc.		39,500		2,295
Helmerich & Payne, Inc.		18,200		1,411
McDermott International, Inc.A		62,224		440
Nabors Industries Ltd.		28,777		503
Superior Energy Services, Inc.A		81,025		2,174
				6,823
Gas - Pipelines - 0.50%
Spectra Energy Corp.		31,028		1,104
Oil & Gas - 2.96%
EQT Corp.		10,386		889
Murphy Oil Corp.		35,200		2,123
Newfield Exploration Co.A		30,369		925
Pioneer Natural Resources Co.		4,577		937
Range Resources Corp.		6,536		495
Seadrill Ltd.		25,700		1,198
				6,567
Total Energy				14,494
FINANCIALS - 26.39%
Banks - 8.07%
CIT Group, Inc.		41,300		1,989
Comerica, Inc.		37,050		1,604
Fifth Third Bancorp		157,822		3,004
First Niagara Financial Group, Inc.		134,000		1,478
Hancock Holding Co.		23,247		762
KeyCorp		140,250		1,757
New York Community Bancorp, Inc.		112,300		1,820
People’s United Financial, Inc.		114,500		1,652
Regions Financial Corp.		103,600		998
SunTrust Banks, Inc.		32,044		1,078
TCF Financial Corp.		45,972		698
Zions Bancorporation		37,853		1,074
				17,914
Diversified Financials - 5.22%
Ameriprise Financial, Inc.		25,711		2,586
Capital One Financial Corp.		23,500		1,614
Discover Financial Services		35,900		1,862
Invesco Ltd.		42,550		1,436
Legg Mason, Inc.		38,275		1,472
SLM Corp.		69,800		1,771
Towers Watson & Co., Class A		7,396		849
				11,590
Insurance - 10.66%
Allstate Corp.		14,424		765
Assurant, Inc.		48,425		2,832
Axis Capital Holdings Ltd.		29,250		1,387
Endurance Specialty Holdings Ltd.		16,237		898
Genworth Financial, Inc., Class AA		77,100		1,120
Hartford Financial Services Group, Inc.		32,869		1,108
ING US, Inc.		56,725		1,760
PartnerRe Ltd.		9,452		947
Primerica, Inc.		26,450		1,136
Reinsurance Group of America, Inc.		14,694		1,046
Renaissancere Holdings Ltd.		21,050		1,973

See accompanying notes

20

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Torchmark Corp.		16,287	$	1,187
Unum Group		18,163		576
Validus Holdings Ltd.		34,493		1,362
Willis Group Holdings PLC		91,838		4,138
XL Group PLC		47,100		1,440
				23,675
Real Estate - 2.06%
Alexandria Real Estate Equities, Inc.C		14,138		930
Cole Real Estate Investment, Inc.C		73,563		1,045
Hospitality Properties TrustC		55,350		1,626
Host Hotels & Resorts, Inc. B		51,757		960
				4,561
Residential - 0.38%
American Campus Communities, Inc.C		24,423		844
Total Financials				58,584
HEALTH CARE - 9.05%
Biotechnology - 0.36%
Charles River Laboratories International, Inc.A		16,261		800
Health Care Equipment & Supplies - 3.27%
Becton Dickinson and Co.		17,350		1,824
CareFusion Corp.A		25,607		993
Dentsply International, Inc.		20,546		968
Patterson Cos., Inc.		27,689		1,177
St. Jude Medical, Inc.		40,000		2,295
				7,257
Health Care Providers & Services - 5.42%
AmerisourceBergen Corp.		11,348		741
Cardinal Health, Inc.		38,000		2,229
Cigna Corp.		42,550		3,276
Laboratory Corp. of America HoldingsA		16,975		1,713
Mednax, Inc.A		9,383		1,023
Omnicare, Inc.		38,700		2,134
Quest Diagnostics, Inc.		15,299		917
				12,033
Total Health Care				20,090
INDUSTRIALS - 13.75%
Aerospace & Defense - 1.44%
Curtiss-Wright Corp.		13,525		673
L-3 Communications Holdings, Inc.		25,025		2,514
				3,187
Building Products - 1.38%
Masco Corp.		86,100		1,819
Owens CorningA		34,500		1,240
				3,059
Commercial Services & Supplies - 1.59%
Cintas Corp.		17,386		935
Clean Harbors, Inc.A		16,996		1,050
Con-way, Inc.		37,325		1,537
				3,522
Construction & Engineering - 2.22%
AECOM Technology Corp.A		65,325		2,076
Fluor Corp.		12,264		910
URS Corp.		35,650		1,933
				4,919

	Shares		Fair Value
			(000’s)
Electrical Equipment - 1.10%
Brady Corp., Class A		49,175	$	1,435
Regal-Beloit Corp.		13,699		1,005
				2,440
Industrial Conglomerates - 0.61%
KBR, Inc.		39,000		1,347
Machinery - 4.98%
Dover Corp.		11,285		1,036
Joy Global, Inc.		19,500		1,107
Parker Hannifin Corp.		28,567		3,334
Pentair Ltd.		28,500		1,912
SPX Corp.		24,800		2,250
Xylem, Inc.		41,864		1,444
				11,083
Marine - 0.43%
Golar LNG Ltd.		25,700		954
Total Industrials				30,511
INFORMATION TECHNOLOGY - 9.70%
Communications Equipment - 1.11%
Anixter International, Inc.		20,350		1,740
Juniper Networks, Inc.A		38,641		720
				2,460
Electronic Equipment & Instruments - 3.88%
Avnet, Inc.		81,175		3,222
Diebold, Inc.		15,294		458
Eaton Corp PLC		20,600		1,454
Ingram Micro, Inc., Class AA		99,775		2,312
TE Connectivity Ltd.		22,775		1,173
				8,619
IT Consulting & Services - 1.33%
Fidelity National Information Services, Inc.		24,072		1,174
Total System Services, Inc.		59,800		1,783
				2,957
Semiconductor Equipment & Products - 1.23%
Microchip Technology, Inc.		63,562		2,731
Software - 2.15%
CA, Inc.		66,000		2,096
Cadence Design Systems, Inc.A		53,762		697
Symantec Corp.		40,973		932
Synopsys, Inc.A		28,442		1,037
				4,762
Total Information Technology				21,529
MATERIALS - 4.17%
Chemicals - 2.32%
Air Products & Chemicals, Inc.		6,912		753
Albemarle Corp.		15,891		1,052
Rockwood Holdings, Inc.		39,829		2,520
Scotts Miracle-Gro Co., Class A		13,927		818
				5,143
Containers & Packaging - 1.06%
Greif, Inc., Class A		17,085		914
Owens-Illinois, Inc.A		23,565		749
Silgan Holdings, Inc.		15,229		686
				2,349

See accompanying notes

21

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Metals & Mining - 0.79%
Allegheny Technologies, Inc.		31,446	$	1,040
Nucor Corp.		13,745		712
				1,752
Total Materials				9,244
UTILITIES - 4.33%
Electric - 2.60%
CenterPoint Energy, Inc.		32,500		800
Edison International		11,966		587
Entergy Corp.		23,625		1,528
Great Plains Energy, Inc.		48,153		1,128
Pinnacle West Capital Corp.		12,800		717
Portland General Electric Co.		35,320		1,014
				5,774
Gas - 0.70%
AGL Resources, Inc.		22,518		1,078
ONEOK, Inc.		8,300		469
				1,547
Multi-Utilities - 1.03%
SCANA Corp.		12,393		578
Xcel Energy, Inc.		59,349		1,713
				2,291
Total Utilities				9,612
Total Common Stock (Cost $169,578)				205,739
SHORT-TERM INVESTMENTS - 6.27% (Cost $13,908)
JPMorgan U.S. Government Money Market Fund, Capital Class		13,908,035		13,908
TOTAL INVESTMENTS - 98.97% (Cost $183,486)				219,647
OTHER ASSETS, NET OF LIABILITIES - 1.03%				2,289
TOTAL NET ASSETS - 100.00%			$	221,936

Percentages are stated as a percent of net assets.

^A  Non-income producing security.

^B  Limited Partnership.

^C  REIT - Real Estate Investment Trust.

Futures Contracts Open on October 31, 2013 (000’s):

Description	Type	Number of Contracts		Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
S&P 400 Midcap E Index Future	Long		100	December, 2013	$	12,864	$	266
					$	12,864	$	266

See accompanying notes

22

American Beacon Small Cap Value II Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
COMMON STOCK - 95.33%
CONSUMER DISCRETIONARY - 10.45%
Auto Components - 1.71%
Dana Holding Corp.		1,775	$	35
Fuel Systems Solutions, Inc.A		2,456		44
				79
Distributors - 0.76%
Core-Mark Holding Co., Inc.		488		35
Hotels, Restaurants & Leisure - 0.86%
CEC Entertainment, Inc.		355		16
Ruby Tuesday, Inc.A		3,941		24
				40
Household Durables - 1.17%
ACCO Brands Corp.A		3,500		20
Helen of Troy Ltd.A		720		34
				54
Media - 0.43%
John Wiley & Sons, Inc., Class A		400		20
Specialty Retail - 4.72%
Buckle, Inc.		778		38
Children’s Place Retail Stores, Inc.A		717		39
Citi Trends, Inc.A		2,997		44
Genesco, Inc.A		405		28
Men’s Wearhouse, Inc.		1,098		46
West Marine, Inc.A		1,951		24
				219
Textiles & Apparel - 0.80%
R.G. Barry Corp.		1,155		22
Rocky Brands, Inc.		1,012		15
				37
Total Consumer Discretionary				484
CONSUMER STAPLES - 5.81%
Beverages - 0.54%
National Beverage Corp.		1,390		25
Food & Drug Retailing - 2.40%
Andersons, Inc.		676		51
Casey’s General Stores, Inc.		265		19
CST Brands, Inc.		1,270		41
				111
Food Products - 2.20%
Cal-Maine Foods, Inc.		375		19
Darling International, Inc.A		1,931		45
Inventure Foods, Inc.A		3,360		38
				102
Personal Products - 0.67%
Elizabeth Arden, Inc.A		863		31
Total Consumer Staples				269
ENERGY - 9.09%
Energy Equipment & Services - 6.28%
Atwood Oceanics, Inc.A		575		31
C&J Energy Services, Inc.A		1,080		25
Cal Dive International, Inc.A		11,493		23
Hornbeck Offshore Services, Inc.A		764		42
Key Energy Services, Inc.A		2,181		17

	Shares		Fair Value
			(000’s)
Patterson-UTI Energy, Inc.		1,922	$	47
Superior Energy Services, Inc.A		1,456		39
Tetra Technologies, Inc.A		605		8
Unit Corp.A		1,176		59
				291
Oil & Gas - 2.81%
Natural Gas Services Group, Inc.A		534		15
Stone Energy Corp.A		1,550		54
Triangle Petroleum Corp.A		3,774		40
Vaalco Energy, Inc.		3,926		21
				130
Total Energy				421
FINANCIALS - 26.12%
Banks - 9.71%
1st Source Corp.		530		17
Bancorp, Inc.A		4,233		67
BBCN Bancorp, Inc.		830		12
Boston Private Financial Holdings, Inc.		1,715		20
Bryn Mawr Bank Corp.		825		23
C&F Financial Statutory Trust I		615		33
Cardinal Financial Corp.		1,850		31
Center Bancorp, Inc.		743		11
Dime Community Bancshares, Inc.		910		15
Eagle Bancorp, Inc.A		833		22
First Financial Holdings, Inc.		254		15
FirstMerit Corp.		755		17
German American Bancorp, Inc.		413		11
Hanmi Financial Corp.		798		14
Horizon Bancorp		1,433		31
Investors Bancorp, Inc.		1,005		24
Prosperity Bancshares, Inc.		589		36
United Financial Bancorp, Inc.		900		14
ViewPoint Financial Group, Inc.		719		16
Washington Federal, Inc.		901		21
				450
Diversified Financials - 3.97%
Cash America International, Inc.		480		19
CBIZ, Inc.A		2,675		22
ConnectOne Bancorp, Inc.A		657		25
Gain Capital Holdings, Inc.		1,407		15
GFI Group, Inc.		4,291		15
Nicholas Financial, Inc.		1,200		19
Pacific Continental Corp.		1,536		21
Piper Jaffray Cos.A		823		30
Texas Capital Bancshares, Inc.A		351		18
				184
Insurance - 4.69%
American Equity Investment Life Holding Co.		1,710		36
Enstar Group Ltd.A		105		14
Horace Mann Educators Corp.		1,087		30
Investors Title Co.		175		14
Primerica, Inc.		720		31
ProAssurance Corp.		454		21
Protective Life Corp.		1,555		71
				217
Real Estate - 7.75%
Alexander & Baldwin, Inc.		690		26
BioMed Realty Trust, Inc.B		1,624		32
Chatham Lodging TrustB		1,250		24

See accompanying notes

23

American Beacon Small Cap Value II Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Colony Financial, Inc.B		1,279	$	26
DiamondRock Hospitality Co.B		2,938		33
Forestar Group, Inc.A		806		18
Franklin Street Properties Corp.B		1,777		23
KKR Financial Holdings LLCC		3,255		32
LaSalle Hotel PropertiesB		858		27
Newcastle Investment Corp.		2,505		14
Pebblebrook Hotel TrustB		1,018		31
PS Business Parks, Inc.B		380		31
Ryman Hospitality Properties, Inc.B		450		17
Summit Hotel Properties, Inc.B		2,720		25
				359
Total Financials				1,210
HEALTH CARE - 3.87%
Biotechnology - 0.43%
RTI Biologics, Inc.A		7,004		20
Health Care Equipment & Supplies - 0.99%
CONMED Corp.		858		31
Hillenbrand, Inc.		545		15
				46
Health Care Providers & Services - 2.45%
Ensign Group, Inc.		735		31
Health Net, Inc.A		650		20
Magellan Health Services, Inc.A		525		31
Select Medical Holdings Corp.		1,645		14
US Physical Therapy, Inc.		530		17
				113
Total Health Care				179
INDUSTRIALS - 19.41%
Aerospace & Defense - 1.23%
Sparton Corp.		1,450		38
Triumph Group, Inc.		265		19
				57
Building Products - 1.66%
Crane Co.		933		60
Universal Forest Products, Inc.		327		17
				77
Commercial Services & Supplies - 3.43%
Brink’s Co.		688		22
Iconix Brand Group, Inc.A		1,258		45
Koppers Holdings, Inc.		780		35
Layne Christensen Co.A		1,248		24
United Stationers Supply Co.		740		33
				159
Construction & Engineering - 3.56%
EMCOR Group, Inc.		1,210		45
Granite Construction, Inc.		1,016		33
MasTec, Inc.A		1,583		50
MYR Group, Inc.A		275		7
URS Corp.		560		30
				165
Diversified Manufacturing - 1.19%
Barnes Group, Inc.		1,550		55
Electrical Equipment - 2.38%
AZZ, Inc.		820		37
GrafTech International Ltd.A		3,544		32
Houston Wire & Cable Co.		1,110		15

	Shares		Fair Value
			(000’s)
Powell Industries, Inc.		411	$	26
				110
Industrial Conglomerates - 1.23%
Teleflex, Inc.		384		35
US Ecology, Inc.		610		22
				57
Machinery - 2.09%
Astec Industries, Inc.		610		21
CIRCOR International, Inc.		368		27
EnPro Industries, Inc.A		523		31
John Bean Technologies Corp.		670		18
				97
Marine - 0.50%
CAI International, Inc.A		1,040		23
Road & Rail - 2.14%
Marten Transport Ltd.		1,471		26
Old Dominion Freight Line, Inc.A		1,050		50
Ryder System, Inc.		220		14
TravelCenters of America LLCA		1,100		9
				99
Total Industrials				899
INFORMATION TECHNOLOGY - 12.89%
Communications Equipment - 3.37%
Anixter International, Inc.		260		22
ARRIS Group, Inc.A		1,730		31
NICE Systems Ltd., ADRD		963		38
Oplink Communications, Inc.A		1,423		26
Polycom, Inc.A		3,749		39
				156
Computers & Peripherals - 0.45%
Mercury Systems, Inc.A		2,281		21
Electronic Equipment & Instruments - 4.30%
Electro Scientific Industries, Inc.		3,774		44
Itron, Inc.A		655		28
MTS Systems Corp.		470		31
Tech Data Corp.A		530		28
Tronox Ltd., Class A		975		23
Vishay Intertechnology, Inc.A		3,663		45
				199
Semiconductor Equipment & Products - 4.77%
Entegris, Inc.A		3,165		33
Kulicke & Soffa Industries, Inc.A		3,957		51
LTX-Credence Corp.A		2,678		16
Omnivision Technologies, Inc.A		1,645		23
Photronics, Inc.A		11,716		98
				221
Total Information Technology				597
MATERIALS - 6.89%
Chemicals - 4.96%
American Vanguard Corp.		530		14
Cabot Corp.		1,141		54
Innophos Holdings, Inc.		775		39
KMG Chemicals, Inc.		735		15
Olin Corp.		510		11
OM Group, Inc.A		1,543		52
Sensient Technologies Corp.		405		21

See accompanying notes

24

American Beacon Small Cap Value II Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Stepan Co.		410	$	24
				230
Metals & Mining - 1.04%
RTI International Metals, Inc.A		868		29
Stillwater Mining Co.A		1,702		19
				48
Paper & Forest Products - 0.89%
Schweitzer-Mauduit International, Inc.		670		41
Total Materials				319
UTILITIES - 0.80%
Electric - 0.32%
Portland General Electric Co.		540		15
Gas - 0.48%
Laclede Group, Inc.		455		22
Total Utilities				37
Total Common Stock (Cost $3,556)				4,415
SHORT-TERM INVESTMENTS - 5.12% (Cost $237)
JPMorgan U.S. Government Money Market Fund, Capital Class		237,140		237
TOTAL INVESTMENTS - 100.45% (Cost $3,793)				4,652
LIABILITIES, NET OF OTHER ASSETS - (0.45%)				(20	)
TOTAL NET ASSETS - 100.00%			$	4,632

Percentages are stated as a percent of net assets.

^A  Non-income producing security.

^B  REIT - Real Estate Investment Trust.

^C  Limited Liability Company.

^D  ADR - American Depositary Receipt.

Futures Contracts Open on October 31, 2013 (000’s):

Description	Type	Number of Contracts		Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
Russell 2000 Mini Index Future	Long		2	December, 2013	$	220	$	7
					$	220	$	7

See accompanying notes

25

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2013 (in thousands, except share and per share amounts)

	Balanced Fund		Mid-Cap Value Fund		Small Cap Value II Fund
Assets:
Investments in unaffiliated securities, at fair value A	$	839,505	$	219,647	$	4,652
Cash		1		—		—
Deposit with brokers for futures contracts		1,755		446		9
Receivable for investments sold		—		479		9
Dividends and interest receivable		2,987		121		1
Receivable for fund shares sold		938		2,194		—
Receivable for tax reclaims		8		1		—
Receivable for expense reimbursement (Note 2)		—		—		3
Prepaid expenses		37		21		—
Total assets		845,231		222,909		4,674
Liabilities:
Payable for investments purchased		324		392		8
Payable for fund shares redeemed		1,613		119		—
Payable for variation margin from open futures contracts		194		52		2
Payable under excess expense reimbursement plan (Note 2)		2		6		—
Management and investment advisory fees payable		554		333		9
Administrative service and service fees payable		114		32		3
Transfer agent fees payable		10		2		—
Custody and fund accounting fees payable		15		3		—
Professional fees payable		34		24		19
Trustee fees payable		12		—		—
Payable for prospectus and shareholder reports		50		8		—
Other liabilities		3		2		1
Total liabilities		2,925		973		42
Net Assets	$	842,306	$	221,936	$	4,632
Analysis of Net Assets:
Paid-in-capital		676,009		170,903		3,345
Undistributed net investment income		121		1,330		6
Accumulated net realized gain		24,993		13,276		416
Unrealized appreciation of investments		139,888		36,161		858
Unrealized appreciation of futures contracts		1,295		266		7
Net assets	$	842,306	$	221,936	$	4,632
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		3,734,443		5,040,230		N/A
Y Class		443,709		197,419		161,054
Investor Class		7,299,748		1,235,116		168,858
Advisor Class		406,039		51,726		N/A
A Class		419,714		118,298		N/A
C Class		764,763		65,495		N/A
AMR Class		41,487,795		8,764,470		N/A
Net assets (not in thousands):
Institutional Class	$	60,916,035	$	72,206,907	$	N/A
Y Class	$	7,262,894	$	2,813,712	$	2,267,875
Investor Class	$	109,336,889	$	17,871,568	$	2,363,999
Advisor Class	$	6,352,890	$	727,587	$	N/A
A Class	$	6,284,539	$	1,666,696	$	N/A
C Class	$	11,573,900	$	904,692	$	N/A
AMR Class	$	640,578,862	$	125,744,473	$	N/A

See accompanying notes

26

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2013 (in thousands, except share and per share amounts)

	Balanced Fund		Mid-Cap Value Fund		Small Cap Value II Fund
Net asset value, offering and redemption price per share:
Institutional Class	$	16.31	$	14.33	$	N/A
Y Class	$	16.37	$	14.25	$	14.08
Investor Class	$	14.98	$	14.47	$	14.00
Advisor Class	$	15.65	$	14.07	$	N/A
A Class	$	14.97	$	14.09	$	N/A
A Class (offering price)	$	15.88	$	14.95	$	N/A
C Class	$	15.13	$	13.81	$	N/A
AMR Class	$	15.44	$	14.35	$	N/A
A    Cost of investments in unaffiliated securities	$	699,617	$	183,486	$	3,793

See accompanying notes

27

American Beacon Funds

Statements of Operations

For the year ended October 31, 2013 (in thousands)

	Balanced Fund		Mid-Cap Value Fund			Small Cap Value II Fund
Investment Income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	13,390	$	3,116		$	57
Dividend income from affiliated securities		1		—			—
Interest income		7,613		—			—
Total investment income		21,004		3,116			57
Expenses:
Management and investment advisory fees (Note 2)		1,774		862			25
Administrative service fees (Note 2):
Institutional Class		152		142			—
Y Class		11		3			6
Investor Class		304		23			6
Advisor Class		15		2			—
A Class		19		2			—
C Class		25		2			—
AMR Class		319		47			—
Transfer agent fees:
Institutional Class		12		5			—
Y Class		—		—			—
Investor Class		10		3			1
Advisor Class		—		1			—
A Class		1		—			—
C Class		2		—			—
AMR Class		17		4			—
Custody and fund accounting fees		111		26			6
Professional fees		63		35			24
Registration fees and expenses		86		72			36
Service fees (Note 2):
Y Class		4		1			2
Investor Class		339		20			7
Advisor Class		12		1			—
A Class		7		1			—
C Class		9		1			—
Distribution fees (Note 2):
Advisor Class		12		1			—
A Class		12		2			—
C Class		63		4			—
Prospectus and shareholder report expenses		66		10			1
Trustee fees		57		10			—
Other expenses		67		21			4
Total expenses		3,569		1,301			118
Net fees waived and expenses (reimbursed) or recouped by Manager (Note 2)		2		(6	)		(69	)
Net expenses		3,571		1,295			49
Net investment income		17,433		1,821			8
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments		51,173		11,976			367
Commission recapture (Note 3)		57		21			—
Futures contracts		6,940		1,993			58
Change in net unrealized appreciation or (depreciation) of:
Investments		58,261		32,902			701
Futures contracts		1,886		300			9
Net gain from investments		118,317		47,192			1,135
Net increase in net assets resulting from operations	$	135,750	$	49,013		$	1,143
A    Foreign taxes	$	98	$	—		$	—

See accompanying notes

28

American Beacon Funds^SM

Statements of Changes in Net Assets (in thousands)

	Balanced Fund						Mid-Cap Value Fund						Small Cap Value II Fund
	Year Ended October 31, 2013			Year Ended October 31, 2012			Year Ended October 31, 2013			Year Ended October 31, 2012			Year Ended Oct. 31, 2013			From Nov. 15 to Oct. 31, 2012
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	17,433		$	23,022		$	1,821		$	2,075		$	8		$	7
Net realized gain from investments and futures contracts		58,170			31,933			13,990			16,482			425			47
Change in net unrealized appreciation or (depreciation) from investments and futures contracts		60,147			56,120			33,202			(4,428	)		710			155
Net increase in net assets resulting from operations		135,750			111,075			49,013			14,129			1,143			209
Distributions to Shareholders:
Net investment income:
Institutional Class		(1,020	)		(887	)		(657	)		(451	)		—			—
Y Class		(72	)		(71	)		(13	)		(1	)		(7	)		(1	)
Investor Class		(1,894	)		(2,133	)		(35	)		(14	)		(7	)		(2	)
Advisor Class		(93	)		(50	)		(8	)		—			—			—
A Class		(84	)		(52	)		(4	)		(1	)		—			—
C Class		(77	)		(41	)		(5	)		—			—			—
AMR Class		(14,207	)		(22,506	)		(1,435	)		(788	)		—			—
Net realized gain from investments:
Institutional Class		(909	)		—			(1,547	)		—			—			—
Y Class		(61	)		—			(29	)		—			(24	)		—
Investor Class		(2,087	)		—			(182	)		—			(24	)		—
Advisor Class		(56	)		—			(19	)		—			—			—
A Class		(85	)		—			(11	)		—			—			—
C Class		(94	)		—			(11	)		—			—			—
AMR Class		(12,494	)		—			(3,149	)		—			—			—
Net distributions to shareholders		(33,233	)		(25,740	)		(7,105	)		(1,255	)		(62	)		(3	)
Net increase (decrease) in net assets from capital share transactions		(112,932	)		(87,607	)		63,892			10,834			218			127
Net increase (decrease) in net assets		(10,415	)		(2,272	)		105,800			23,708			1,299			333
Net Assets:
Beginning of period		852,721			854,993			116,136			92,428			3,333			3,000
End of Period *	$	842,306		$	852,721		$	221,936		$	116,136		$	4,632		$	3,333
*  Includes undistributed net investment income (loss) of	$	121		$	(955	)	$	1,330		$	1,685		$	6		$	3

See accompanying notes

29

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), which is comprised of twenty-seven Funds, 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 Balanced Fund, the American Beacon Mid-Cap Value Fund, and the American Beacon Small Cap Value II 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

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
A Class	General public and investors investing through an intermediary with applicable sales charges, which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”)
C Class	General public and investors investing through an intermediary with applicable sales charges, which may include a CDSC
AMR Class	Investors in the tax-exempt retirement and benefit plans of the Manager, AMR Corporation, and its affiliates

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include administrative service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.

New Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments in the ASU enhance disclosures about offsetting of financial assets and liabilities to enable investors to understand the effect of these arrangements on a fund’s financial position. In January 2013, FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. The amendments in ASU No. 2013-01 clarify the scope of disclosures required by ASU No. 2011-11. These ASUs are effective for annual periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Funds believe the adoption of these ASUs will not have a material impact on its financial statement disclosures.

2. Transactions with Affiliates

Management Agreement

The Trust and the Manager are parties to a Management Agreement that obligates the Manager to provide or oversee the provision of all investment advisory, fund management, and securities lending services.

30

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Investment assets of the Funds are managed by multiple 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 unaffiliated investment advisors hired by the Manager to direct investment activities for the Funds. Management fees paid by the Funds during the year ended October 31, 2013 were as follows (dollars in thousands):

	Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Net Amounts Retained by Manager
Balanced		0.22	%	$	1,774	$	1,369	$	405
Mid-Cap Value		0.56	%		862		786		76
Small Cap Value II		0.61	%		25		23		2

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, 0.40% of the average daily net assets of the A and C Classes, and 0.05% of the average daily net assets of the AMR Class of each of the Funds.

Distribution Plans

The Funds, except for the Advisor, A, and C Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the management 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 Fund shares.

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the Advisor, A, and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes, and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, Advisor, A, and C 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, 0.15% of the average daily net assets of the A and C Classes, 0.25% of the average daily net assets of the Advisor Class and up to 0.375% of the average daily net assets of the Investor Class of the Funds.

Investment in Affiliated Funds

The Funds may invest in the American Beacon Money Market Select Fund (the “MM Select Fund”) or the U.S. Government Money Market Select Fund (the “USG Select Fund”) (collectively, the “Select Funds”). The Select Funds and the 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 Management and Administrative Service fees totaling 0.10% of the average daily net assets of the Select Fund. During the year ended October 31, 2013, the Manager earned $2,669 from the Balanced Fund’s investment in the Select Funds.

31

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

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. This program provides an alternative credit facility allowing the Funds to borrow from other participating Funds. During the year ended October 31, 2013, the Mid-Cap Value Fund borrowed on average $775,991 for one day at 0.73% with interest charges of $16. During the year ended October 31, 2013, the Balanced and Small Cap Value II Funds did not utilize the credit facility.

Expense Reimbursement Plan

The Manager agreed to reimburse the following Funds to the extent that total annual fund operating expenses exceeded a Fund’s expense cap. For the period ended October 31, 2013, the Manager waived or reimbursed expenses as follows:

		Expense Cap
Fund	Class	11/1/12 to 2/28/13			3/1/13 to 10/31/13			Reimbursed or (Recouped) Expenses			Expiration
Balanced	Y		0.70	%		N/A		$	(826	)		2016
Balanced	A*		1.10	%*		1.10	%		(170	)		2016
Balanced	C		1.85	%		N/A			(593	)		2016
Mid-Cap Value	Institutional		0.98	%		0.98	%		3,598			2016
Mid-Cap Value	Y		1.08	%		1.08	%		259			2016
Mid-Cap Value	Investor		1.23	%		1.23	%		1,575			2016
Mid-Cap Value	Advisor		1.49	%		1.49	%		726			2016
Mid-Cap Value	A		1.49	%		1.49	%		(42	)		2016
Mid-Cap Value	C		2.24	%		2.24	%		25			2016
Small Cap Value II	Y		1.09	%		1.09	%		34,513			2016
Small Cap Value II	Investor		1.37	%		1.37	%		34,837			2016

* Voluntary Reimbursement

Of these amounts, $2,712 was receivable from the Manager at October 31, 2013 Small Cap Value II Fund and $1,590 and $6,141 was payable to the Manager for the Balanced and Mid-Cap Value Funds, respectively. The Funds have adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of fees waived or expenses reimbursed for a period of up to three years. However, reimbursement will occur only if the Class’ average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing its expense ratio to exceed the previously agreed upon contractual expense limit. The Funds did not record a liability for potential reimbursements, due to the current assessment that a reimbursement is unlikely. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

Fund	Recovered Expenses		Excess Expense Carryover		Expiration of Reimbursed Expenses
Balanced	$	1,674	$	4,186		2014
Balanced		—		1,232		2015
Mid-Cap Value		49		56,975		2014
Mid-Cap Value		—		36,006		2015
Small Cap Value II		—		118,169		2015

The Manager recouped excess carryover expenses of $840 from the Y Class, $182 from the A Class, and $652 from the C Class of the Balanced Fund, expiring in 2014, and $49 from the A Class of the Mid-Cap Value Fund, expiring in 2014. During the year ended October 31, 2013, the Funds did not record a liability for potential reimbursement due to the current assessment that a reimbursement is unlikely.

Sales Commissions

The Funds’ distributor, Foreside Fund Services, LLC (“Foreside”), may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. For the year ended October 31, 2013, Foreside has collected $19,538 and $3,482 for the Balanced and Mid-Cap Value Funds, respectively from the sale of Class A Shares.

32

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2013, there were no CDSC fees collected for Class A Shares of the Funds.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2013, $2,052 in CDSC fees were collected for the Balanced Fund.

3. Security Valuation and Fair Value Measurements

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, including exchange-traded funds (“ETFs”) 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 open-end mutual funds are valued at the closing net asset value (“NAV”) 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 fair 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 Trust’s Board of Trustees (the “Board”).

Futures contracts are valued based upon their quoted daily settlement prices. Upon entering into a futures contract, a Fund is required to deposit with its futures broker, an amount of cash or U.S. Government and Agency Obligations in accordance with the initial margin requirements of the broker or exchange. Futures contracts are marked to market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Fund. Gains or losses are recognized but not considered realized until the contracts expire or are closed. Futures contracts involve, to varying degrees, risk of loss in excess of the variation margin disclosed on the Statements of Assets and Liabilities.

Other investments, including restricted securities, and those financial instruments for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by the Valuation Committee, established by the Fund’s Board.

Valuation Inputs

Various inputs may be used to determine the fair value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

33

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

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 2 securities are fixed-income securities that are valued using observable inputs as stated above.
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.

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Fixed income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. treasury obligations, sovereign issues, bank loans, convertible preferred securities, and non-U.S. bonds are normally valued by pricing service providers that use broker dealer quotations, reported trades or valuation estimates from their internal pricing models. The service providers’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates, and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Fixed income securities purchased on a delayed-delivery basis are marked to market daily until settlement at the forward settlement date are categorized as Level 2 of the fair value hierarchy.

Mortgage-related and asset-backed securities are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by pricing service providers that use broker dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, current market data, estimated cash flows, and market-based yield spreads for each tranche, and incorporates deal collateral performance, as available. Mortgage-related and asset-backed securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Common stocks and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Securities using these valuation adjustments are categorized as Level 2 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy. Short-term investments having a maturity of 60 days or less are generally valued at amortized cost which approximates fair value. These investments are categorized as Level 2 of the fair value hierarchy.

The Funds’ investments are summarized by level based on the inputs used to determine their values. U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) also requires all transfers between any levels to be disclosed. The end of the period timing recognition has been adopted for the transfers between levels of each Fund’s assets and liabilities. During the year ended October 31, 2013, there were no transfers between levels. As of October 31, 2013, the investments were classified as described below (in thousands):

34

American Beacon Funds^SM

Notes to Financial Statesments

October 31, 2013

Balanced Fund*	Level 1		Level 2		Level 3		Total
Common Stock	$	489,871	$	—	$	—	$	489,871
Preferred Stock		6,478		—		—		6,478
Corporate Obligations		—		105,981		—		105,981
Foreign Government Obligations		—		864		—		864
Commercial Mortgage-Backed Obligations		—		17,497		—		17,497
Asset-Backed Obligations		—		8,218		—		8,218
U.S. Agency Mortgage-Backed Obligations		—		42,766		—		42,766
U.S. Treasury Obligations		—		104,424		—		104,424
U.S. Agency Obligations		—		15,919		—		15,919
Municipal Obligations		—		2,812		—		2,812
Short-Term Investments - Money Markets		44,675		—		—		44,675
Total Investments in Securities	$	541,024	$	298,481	$	—	$	839,505
Financial Derivative Instruments
Futures Contracts	$	1,295	$	—	$	—	$	1,295
Mid-Cap Value Fund*	Level 1		Level 2		Level 3		Total
Common Stock	$	205,739	$	—	$	—	$	205,739
Short-Term Investments - Money Markets		13,908		—		—		13,908
Total Investments in Securities	$	219,647	$	—	$	—	$	219,647
Financial Derivative Instruments
Futures Contracts	$	266	$	—	$	—	$	266
Small Cap Value II Fund*	Level 1		Level 2		Level 3		Total
Common Stock	$	4,415	$	—	$	—	$	4,415
Short-Term Investments - Money Markets		237		—		—		237
Total Investments in Securities	$	4,652	$	—	$	—	$	4,652
Financial Derivative Instruments
Futures Contracts	$	7	$	—	$	—	$	7

* Refer to the Schedule of Investments for industry information.

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 NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Funds. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

Dividends to Shareholders

Dividends from net investment income of the Balanced Fund normally will be declared and paid quarterly. Dividends from net investment income of the Mid-Cap Value and Small Cap Value II 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.

35

American Beacon Funds^SM

Notes to Financial Statesments

October 31, 2013

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. This amount is reported with the net realized gains 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. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

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 trustees 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.

4. Securities and Other Investments

Real Estate Investment Trusts

The Funds may own shares of real estate investment trusts (“REITS”) which report information on the source of their distributions annually. The Funds re-characterize distributions received from REIT investments based on information provided by the REITs into the following categories: ordinary income, long-term capital gains, and return of capital. If information is not available on a timely basis from the REITs, the re-characterization will be estimated based on available information, which may include the previous year allocation. If new or additional information becomes available from the REITs at a later date, a re-characterization will be made the following year. These re-characterizations are not recorded for financial statement purposes, but as an adjustment to the calculation of taxable income.

36

American Beacon Funds^SM

Notes to Financial Statesments

October 31, 2013

Restricted Securities

Certain Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities may be sold privately, but are required to be registered or exempted from such registration before being sold to the public. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. Disposal of restricted securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted securities outstanding at the period ended October 31, 2013 are disclosed in the Notes to the Schedules of Investments.

Other Investment Company Securities and Other Exchange Traded Products

The Funds may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, exchange-traded notes (“ETNs”), unit investment trusts, and other investment companies of the Trust. The Funds may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, a Fund becomes a shareholder of that investment company. As a result, Fund shareholders indirectly will bear a Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses Fund shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

5. Financial Derivative Instruments

Futures Contracts

Futures contracts are contracts to buy or sell a standard quantity of securities at a specified price on a future date. The Funds may enter into financial futures contracts as a method for keeping assets readily convertible to cash if needed to meet shareholder redemptions or for other needs while maintaining exposure to the stock or bond market, as applicable. The primary risks associated with the use of futures contracts are the possibility of illiquid markets or imperfect correlation between the values of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations.

Upon entering into a futures contract, the Funds are required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. A Fund usually reflects this amount on the Schedule of Investments as a U.S. Treasury Bill held as collateral for futures contracts or as cash deposited with broker on the Statement of Assets and Liabilities. Payments to and from the broker, known as variation margin, are required to be made on a daily basis as the price of the futures contract fluctuates. Changes in initial settlement values are accounted for as unrealized appreciation (depreciation) until the contracts are terminated, at which time realized gains and losses are recognized. Futures contracts are valued at the most recent settlement price established each day by the exchange on which they are traded.

For the six months ended October 31, 2013, the Funds entered into future contracts primarily for return enhancement, hedging and exposing cash to markets.

The Funds’ average futures contracts outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the quarterly volume of futures contracts. For purpose of this disclosure, volume is measured by contracts outstanding at period end.

37

American Beacon Funds^SM

Notes to Financial Statesments

October 31, 2013

	Average Futures Contracts Outstanding
For the Quarter Ended	April 30, 2013		October 31, 2013
Balanced		40		31
Mid-Cap Value		8		9
Small Cap Value II		2		1

The following is a summary of the Funds’ derivative financial instruments categorized by risk exposure (in thousands) ^(1) (2):

Fair Values of derivative financial instruments as of October 31, 2013:

Statements of Assets and Liabilities	Derivative		Balanced		Mid-Cap Value		Small Cap Value II
Unrealized appreciation of futures contracts		Equity Contracts	$	1,295	$	266	$	7

The effect of derivative financial instruments during the year ended October 31, 2013:

Statements of Operations
Net realized gain (loss) from futures contracts	Equity Contracts	6,940	1,993	58
Change in net unrealized appreciation or (depreciation) of futures contracts	Equity Contracts	1,886	300	9

⁽¹⁾  See Note 3 in the Notes to Financial Statements for additional information.

⁽²⁾  The volume of derivative activity described above is reflective of the derivative activity through the current period of operations.

6. Principal Risks

In the normal course of business the Funds trade financial instruments and enter into financial transactions where risk of potential loss exists. Security values fluctuate (market risk) and may decline due to factors affecting securities markets in general, particular industries represented in the securities markets or conditions specifically related to a particular company. Failure of the other party to a transaction to perform (credit and counterparty risk), for example by not making principal and interest payments when due, reduces the value of the issuer’s debt and could reduce the Funds’ income. Similar to credit risk, the Funds may be exposed to counterparty risk, or the risk that an institution or other entity with which the Funds have unsettled or open transactions will fail to make required payments or otherwise comply with the terms of the instrument, transaction or contract. The potential loss could exceed the value of the financial assets recorded in the financial statements. Some of the Funds’ investments may be illiquid and the Funds may not be able to vary the portfolio investments in response to changes in economic and other conditions. If a Fund is required to liquidate all or a portion of its investments quickly, the Fund may realize significantly less than the value at which it previously recorded those investments.

Market Risks

The Funds’ investments in financial derivatives and other financial instruments expose the Funds to various risks such as, but not limited to, interest rate, foreign currency and equity risks.

Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. As nominal interest rates rise, the value of certain fixed income securities held by the Fund is likely to decrease. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a fixed income’s market price to interest rate (i.e. yield) movements.

If the Funds invest directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, they will be subject to the risk that those currencies will decline in value relative to the base currency of the Funds, or, in the case of hedging positions, that the Funds’ base currency will decline in value relative to the currency being hedged.

38

American Beacon Funds^SM

Notes to Financial Statesments

October 31, 2013

Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Funds’ investments in foreign currency denominated securities may reduce the returns of the Fund.

The fair values of equities, such as common stocks and preferred securities or equity related investments such as futures, may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities and equity related investments generally have greater market price volatility than fixed income securities.

7. Federal Income and Excise Taxes

It is the policy of each Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, each Fund is treated as a single entity for the purpose of determining such qualification.

The Funds do not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2013 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. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

A Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation or depreciation, as applicable, as the income is earned or capital gains are recorded.

39

American Beacon Funds^SM

Notes to Financial Statesments

October 31, 2013

The tax character of distributions paid were as follows (in thousands):

	Balanced				Mid-Cap Value				Small Cap Value II
	Year Ended October 31, 2013		Year Ended October 31, 2012		Year Ended October 31, 2013		Year Ended October 31, 2012		Year Ended October 31, 2013		Year Ended October 31, 2012
Distributions paid from:
Ordinary income*
Institutional Class	$	1,020	$	843	$	657	$	451	$	—	$	—
Y Class		72		67		13		1		28		1
Investor Class		1,894		2,026		35		14		28		2
Advisor Class		93		47		8		—		—		—
A Class		84		49		4		1		—		—
C Class		77		39		5		—		—		—
AMR Class		14,207		21,380		1,435		788		—		—
Long-Term Capital Gains
Institutional Class		909		44		1,547		—		—		—
Y Class		61		4		29		—		3		—
Investor Class		2,087		107		182		—		3		—
Advisor Class		56		3		19		—		—		—
A Class		85		3		11		—		—		—
C Class		94		2		11		—		—		—
AMR Class		12,494		1,126		3,149		—		—		—
Total distributions paid	$	33,233	$	25,740	$	7,105	$	1,255	$	62	$	3

* For tax purposes, short-term capital gains are considered ordinary income distributions.

As of October 31, 2013, the components of distributable earnings or (deficits) on a tax basis were as follows (in thousands):

	Balanced			Mid-Cap Value			Small Cap Value II
Cost basis of investments for federal income tax purposes	$	718,450		$	184,210		$	3,794
Unrealized appreciation		134,141			36,543			907
Unrealized depreciation		(13,086	)		(1,106	)		(49	)
Net unrealized appreciation or (depreciation)		121,055			35,437			858
Undistributed ordinary income		12,158			5,657			141
Accumulated long-term gain or (loss)		31,786			9,673			282
Other temporary differences		1,298			266			6
Distributable earnings or (deficits)	$	166,297		$	51,033		$	1,287

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 or depreciation are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains or losses on certain derivative instruments and book amortization of premiums.

Due to inherent differences in the recognition of income, expenses and realized gains (losses) under U.S. GAAP 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.

40

American Beacon Funds^SM

Notes to Financial Statesments

October 31, 2013

Accordingly, the following amounts represent current year permanent differences derived from book amortization of premium, pay down reclasses, Section 732 basis adjustments, non-deductible expenses, income from real estate investment securities, and dividend reclasses that have been reclassified as of October 31, 2013 (in thousands):

	Balanced			Mid-Cap Value			Small Cap Value II
Paid-in-capital	$	—		$	1		$	—
Undistributed net investment income		1,090			(19	)		8
Accumulated net realized gain (loss)		(1,090	)		18			(8	)
Unrealized appreciation or (depreciation) of investments and futures contracts		—			—			—

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the RIC MOD, each Fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

Finally, the RIC MOD contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions. Except for the simplification provisions related to RIC qualification, the RIC MOD is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.

For the year ended October 31, 2013, the Funds did not have capital loss carryforwards.

8. Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of long-term investments, other than short-term obligations, for the year ended October 31, 2013 were as follows (in thousands):

	Balanced		Mid-Cap Value		Small Cap Value II
Purchases (excluding U.S. government securities)	$	412,690	$	115,202	$	2,815
Sales and maturities (excluding U.S. government securities)		550,364		69,249		2,674
Purchases of U.S. government securities		121,061		—		—
Sales and maturities of U.S. government securities		45,448		—		—

A summary of the Balanced Fund’s transactions in USG Select Fund for the year ended October 31, 2013 is set forth below (in thousands):

	Affiliate		October 31, 2012 Shares/Fair Value		Purchases		Sales		October 31, 2013 Shares/Fair Value		Dividend Income
Direct		USG Select Fund	$	—	$	5,000	$	5,000	$	—	$	1

41

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

9. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Funds (shares and dollars in thousands):

For the Year Ended October 31, 2013

	Institutional Class						Y Class						Investor Class						Advisor Class
Balanced Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		1,578		$	24,033			379		$	5,977			5,452		$	76,643			340		$	4,925
Reinvestment of dividends		128			1,905			8			118			284			3,855			11			149
Shares redeemed		(840	)		(12,662	)		(117	)		(1,822	)		(5,220	)		(73,411	)		(127	)		(1,870	)
Net increase in shares outstanding		866		$	13,276			270		$	4,273			516		$	7,087			224		$	3,204
	A Class						C Class						AMR Class						Totals
Balanced Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		251		$	3,543			526		$	7,634			10,401		$	153,598			18,927		$	276,353
Reinvestment of dividends		11			147			11			158			1,897			26,701			2,350			33,033
Shares redeemed		(80	)		(1,133	)		(41	)		(596	)		(23,319	)		(330,824	)		(29,744	)		(422,318	)
Net increase in shares outstanding		182		$	2,557			496		$	7,196			(11,021	)	$	(150,525	)		(8,467	)	$	(112,932	)
	Institutional Class						Y Class						Investor Class						Advisor Class
Mid-Cap Value Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		2,446		$	31,998			182		$	2,464			1,154		$	15,280			27		$	331
Redemption Fees		—			20			—			—			—			3			—			—
Reinvestment of dividends		204			2,201			2			25			19			211			2			27
Shares redeemed		(733	)		(9,125	)		(34	)		(420	)		(317	)		(4,009	)		(20	)		(258	)
Net increase in shares outstanding		1,917		$	25,094			150		$	2,069			856		$	11,485			9		$	100
	A Class						C Class						AMR Class						Totals
Mid-Cap Value Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		115		$	1,525			41		$	529			5,497		$	69,734			9,462		$	121,861
Redemption Fees		—			—			—			—			—			41			—			64
Reinvestment of dividends		1			10			1			12			425			4,584			654			7,070
Shares redeemed		(22	)		(296	)		—			(1	)		(4,118	)		(50,994	)		(5,244	)		(65,103	)
Net increase in shares outstanding		94		$	1,239			42		$	540			1,804		$	23,365			4,872		$	63,892

	Y Class				Investor Class						Totals
Small Cap Value II Fund	Shares		Amount		Shares			Amount			Shares			Amount
Shares sold		—	$	—		13		$	161			13		$	161
Reinvestment of dividends		3		32		3			31			6			63
Shares redeemed		—		—		(1	)		(6	)		(1	)		(6	)
Net increase (decrease) in shares outstanding		3	$	32		15		$	186			18		$	218

For the Year Ended October 31, 2012

	Institutional Class						Y Class						Investor Class						Advisor Class
Balanced Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		997		$	13,684			404		$	5,674			3,822		$	48,716			58		$	762
Reinvestment of dividends		62			875			5			70			160			2,070			3			50
Shares redeemed		(592	)		(8,159	)		(267	)		(3,728	)		(4,209	)		(53,423	)		(165	)		(2,181	)
Net increase (decrease) in shares outstanding		467		$	6,400			142		$	2,016			(227	)	$	(2,637	)		(104	)	$	(1,369	)

42

American Beacon Funds

Notes to Financial Statements

October 31, 2013

	A Class						C Class						AMR Class						Totals
Balanced Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		274		$	3,506			213		$	2,760			20,665		$	267,520			26,433		$	342,622
Reinvestment of dividends		3			41			3			36			1,694			22,506			1,930			25,648
Shares redeemed		(88	)		(1,159	)		(23	)		(296	)		(29,737	)		(386,931	)		(35,081	)		(455,877	)
Net increase (decrease) in shares outstanding		189		$	2,388			193		$	2,500			(7,378	)	$	(96,905	)		(6,718	)	$	(87,607	)
	Institutional Class						Y Class						Investor Class						Advisor Class
Mid-Cap Value Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		419		$	4,378			43		$	466			347		$	3,608			40		$	405
Redemption Fees		—			62			—			—			—			7			—			1
Reinvestment of dividends		46			450			—			1			1			13			—			—
Shares redeemed		(779	)		(8,141	)		(1	)		(9	)		(156	)		(1,671	)		(1	)		(13	)
Net increase (decrease) in shares outstanding		(314	)	$	(3,251	)		42		$	458			192		$	1,957			39		$	393
	A Class						C Class						AMR Class						Totals
Mid-Cap Value Fund	Shares			Amount			Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		18		$	182			21		$	222			10,775		$	112,305			11,663		$	121,566
Redemption Fees		—			1			—			—			—			214			—			285
Reinvestment of dividends		—			—			—			—			80			788			127			1,252
Shares redeemed		(4	)		(38	)		—			—			(9,748	)		(102,397	)		(10,689	)		(112,269	)
Net increase (decrease) in shares outstanding		14		$	145			21		$	222			1,107		$	10,910			1,101		$	10,834

	Y Class				Investor Class				Totals
Small Cap Value II Fund	Shares		Amount		Shares		Amount		Shares		Amount
Shares sold		8	$	85		4	$	39		12	$	124
Reinvestment of dividends		—		1		—		2		—		3
Shares redeemed		—		—		—		—		—		—
Net increase (decrease) in shares outstanding		8	$	86		4	$	41		12	$	127

43

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class															Y Class
	Year Ended October 31,															Year Ended October 31,									March 1 to Oct. 31,
	2013			2012			2011			2010			2009			2013			2012			2011			2010
Net asset value, beginning of period	$	14.27		$	12.89		$	12.62		$	11.83		$	10.63		$	14.32		$	12.93		$	12.78		$	12.20
Income from investment operations:
Net investment income (loss)		0.30			0.32			0.32			0.35			0.43			0.39			0.17			0.36			0.16
Net gains (losses) from investments (both realized and unrealized)		2.35			1.38			0.29			1.10			1.25			2.26			1.51			0.24			0.57
Total income (loss) from investment operations		2.65			1.70			0.61			1.45			1.68			2.65			1.68			0.60			0.73
Less distributions:
Dividends from net investment income		(0.30	)		(0.32	)		(0.34	)		(0.66	)		(0.48	)		(0.29	)		(0.29	)		(0.45	)		(0.15	)
Distributions from net realized gains on securities		(0.31	)		—			—			—			—			(0.31	)		—			—			—
Total distributions		(0.61	)		(0.32	)		(0.34	)		(0.66	)		(0.48	)		(0.60	)		(0.29	)		(0.45	)		(0.15	)
Net asset value, end of period	$	16.31		$	14.27		$	12.89		$	12.62		$	11.83		$	16.37		$	14.32		$	12.93		$	12.78
Total return A		19.04	%		13.23	%		4.87	%		12.47	%		16.64	%		18.97	%		13.04	%		4.73	%		5.99	%B
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	60,916		$	40,938		$	30,962		$	33,405		$	29,808		$	7,263		$	2,482		$	401		$	46
Ratios to average net assets:
Expenses, before reimbursements		0.60	%		0.59	%		0.58	%		0.58	%		0.60	%		0.68	%		0.69	%		1.48	%		0.68	%C
Expenses, net of reimbursements		0.60	%		0.59	%		0.58	%		0.58	%		0.60	%		0.70	%		0.69	%		0.70	%		0.68	%C
Net investment income, before (reimbursements) or recoupments		1.86	%		2.27	%		2.49	%		2.67	%		3.60	%		1.71	%		2.08	%		1.55	%		2.54	%C
Net investment income, net of (reimbursements) or recoupments		1.86	%		2.27	%		2.49	%		2.67	%		3.60	%		1.69	%		2.08	%		2.34	%		2.54	%C
Portfolio turnover rate		56	%		58	%		47	%		40	%		57	%		56	%		58	%		47	%		40	%D

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

^D Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

44

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class													Advisor Class
Year Ended October 31,													Year Ended October 31,
2013	2012			2011			2010			2009			2013			2012			2011			2010			2009
$    13.16	$	11.93		$	11.66		$	10.96		$	9.91		$	13.73		$	12.36		$	12.11		$	11.35		$	9.77
0.26		0.23			0.25			0.25			0.30			(0.12	)		0.42			0.41			0.32			0.37
2.13		1.30			0.28			1.04			1.23			2.60			1.14			0.11			1.01			1.21
2.39		1.53			0.53			1.29			1.53			2.48			1.56			0.52			1.33			1.58
(0.26)		(0.30	)		(0.26	)		(0.59	)		(0.48	)		(0.25	)		(0.19	)		(0.27	)		(0.57	)		—
(0.31)		—			—			—			—			(0.31	)		—			—			—			—
(0.57)		(0.30	)		(0.26	)		(0.59	)		(0.48	)		(0.56	)		(0.19	)		(0.27	)		(0.57	)		—
$    14.98	$	13.16		$	11.93		$	11.66		$	10.96		$	15.65		$	13.73		$	12.36		$	12.11		$	11.35
18.65%		12.86	%		4.52	%		12.06	%		16.29	%		18.52	%		12.62	%		4.33	%		11.96	%		16.17	%
$109,337	$	89,272		$	83,657		$	84,500		$	94,915		$	6,353		$	2,507		$	3,536		$	6,127		$	6,812
0.92%		0.92	%		0.92	%		0.93	%		0.89	%		1.07	%		1.09	%		1.09	%		1.09	%		1.09	%
0.92%		0.92	%		0.92	%		0.93	%		0.89	%		1.07	%		1.09	%		1.09	%		1.09	%		1.09	%
1.62%		1.95	%		2.16	%		2.34	%		3.26	%		1.32	%		1.82	%		2.01	%		2.18	%		3.06	%
1.62%		1.95	%		2.16	%		2.34	%		3.26	%		1.32	%		1.82	%		2.01	%		2.18	%		3.06	%
56%		58	%		47	%		40	%		57	%		56	%		58	%		47	%		40	%		57	%

45

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class												C Class
	Year Ended October 31,									May 17 to Oct. 31,			Year Ended October 31,									Sept. 1 to Oct. 31,
	2013			2012			2011			2010			2013			2012			2011			2010
Net asset value, beginning of period	$	13.16		$	12.06		$	11.94		$	11.50		$	13.33		$	12.13		$	11.92		$	11.32
Income from investment operations:
Net investment income		0.22			0.33			0.38			0.02			0.17			0.15			0.20			0.01
Net gains (losses) from investments (both realized and unrealized)		2.14			1.17			0.14			0.43			2.11			1.29			0.22			0.59
Total income (loss) from investment operations		2.36			1.50			0.52			0.45			2.28			1.44			0.42			0.60
Less distributions:
Dividends from net investment income		(0.24	)		(0.40	)		(0.40	)		(0.01	)		(0.17	)		(0.24	)		(0.21	)		0.00
Distributions from net realized gains on securities		(0.31	)		—			—			—			(0.31	)		—			—			—
Total distributions		(0.55	)		(0.40	)		(0.40	)		(0.01	)		(0.48	)		(0.24	)		(0.21	)		0.00
Net asset value, end of period	$	14.97		$	13.16		$	12.06		$	11.94		$	15.13		$	13.33		$	12.13		$	11.92
Total return A		18.45	%		12.65	%		4.37	%		3.90	%B		17.50	%		11.86	%		3.56	%		5.33	%B
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	6,284		$	3,127		$	588		$	47		$	11,574		$	3,579		$	922		$	1
Ratios to average net assets:
Expenses, before (reimbursements) or recoupments		1.10	%		1.13	%		1.59	%		1.08	%C		1.84	%		1.85	%		2.34	%		2.14	%C
Expenses, net of (reimbursements) or recoupments		1.10	%		1.09	%		1.10	%		1.08	%C		1.85	%		1.83	%		1.82	%		1.86	%C
Net investment income, before (reimbursements) or recoupments		1.31	%		1.62	%		1.47	%		1.51	%C		0.51	%		0.88	%		0.66	%		0.20	%C
Net investment income, net of (reimbursements) or recoupments		1.30	%		1.66	%		1.95	%		1.51	%C		0.50	%		0.90	%		1.18	%		0.48	%C
Portfolio turnover rate		56	%		58	%		47	%		40	%D		56	%		58	%		47	%		40	%D

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

^D Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

46

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

AMR Class
Year Ended October 31,
2013			2012			2011			2010			2009
$	13.54		$	12.27		$	12.02		$	11.31		$	10.19
	0.27			0.31			0.34			0.35			0.39
	2.27			1.34			0.27			1.07			1.24
	2.54			1.65			0.61			1.42			1.63
	(0.33	)		(0.38	)		(0.36	)		(0.71	)		(0.51	)
	(0.31	)		—			—			—			—
	(0.64	)		(0.38	)		(0.36	)		(0.71	)		(0.51	)
$	15.44		$	13.54		$	12.27		$	12.02		$	11.31
	19.32	%		13.55	%		5.09	%		12.84	%		16.95	%
$	640,579		$	710,816		$	734,927		$	748,422		$	681,197
	0.33	%		0.32	%		0.33	%		0.33	%		0.35	%
	0.33	%		0.32	%		0.33	%		0.33	%		0.35	%
	2.29	%		2.57	%		2.75	%		2.92	%		3.75	%
	2.29	%		2.57	%		2.75	%		2.92	%		3.75	%
	56	%		58	%		47	%		40	%		57	%

47

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended October 31,
	2013			2012			2011A			2010			2009
Net asset value, beginning of period	$	10.95		$	9.73		$	9.27		$	7.57		$	5.94
Income from investment operations:
Net investment income (loss)		0.13			0.14			0.09			0.08			0.10
Net gains (losses) from investments (both realized and unrealized)		3.93			1.21			0.48			1.67			1.65
Total income (loss) from investment operations		4.06			1.35			0.57			1.75			1.75
Less distributions:
Dividends from net investment income		(0.20	)		(0.13	)		(0.11	)		(0.05	)		(0.12	)
Distributions from net realized gains on securities		(0.48	)		—			—			—			—
Total distributions		(0.68	)		(0.13	)		(0.11	)		(0.05	)		(0.12	)
Redemption fees added to beneficial interestsC		0.00			0.00			0.00			0.00			0.00
Net asset value, end of period	$	14.33		$	10.95		$	9.73		$	9.27		$	7.57
Total return D		39.18	%		14.07	%		6.08	%		23.19	%		30.24	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	72,207		$	34,208		$	33,441		$	2,778		$	2,197
Ratios to average net assets:
Expenses, before (reimbursements) or recoupments		0.99	%		1.06	%		1.10	%		1.06	%		1.13	%
Expenses, net of (reimbursements) or recoupments		0.98	%		0.98	%		0.97	%		0.98	%		0.98	%
Net investment income (loss), before (reimbursements) or recoupments		1.05	%		1.17	%		0.91	%		0.90	%		1.14	%
Net investment income, net of reimbursements (recoupments)		1.06	%		1.25	%		1.04	%		0.99	%		1.29	%
Portfolio turnover rate		48	%		87	%		107	%		40	%		42	%

^A Lee Munder Capital Group, LLC was added as an investment manager to the Mid-Cap Value Fund on July 1, 2011.

^B Based on average shares outstanding.

^C Amounts represent less than $0.01 per share.

^D Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^E Not annualized.

^F Annualized.

^G Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

48

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Y Class												Investor Class															Advisor Class
Year Ended October 31,									March 1 to Oct. 31,			Year Ended October 31,															Year Ended October 31,
2013			2012			2011A			2010			2013			2012			2011A			2010			2009			2013			2012			2011A			2010			2009
$	10.92		$	9.72		$	9.27		$	8.48		$	10.98		$	9.71		$	9.20		$	7.54		$	5.92		$	10.81		$	9.56		$	9.12		$	7.49		$	5.87
	0.17			0.13			0.08			0.06			0.23			0.34			(0.03	)B		0.06			0.07			0.11			0.05			0.07			0.07			0.15
	3.86			1.21			0.48			0.73			3.83			1.00			0.63			1.65			1.66			3.83			1.23			0.45			1.61			1.60
	4.03			1.34			0.56			0.79			4.06			1.34			0.60			1.71			1.73			3.94			1.28			0.52			1.68			1.75
	(0.22	)		(0.14	)		(0.11	)		—			(0.09	)		(0.07	)		(0.09	)		(0.05	)		(0.11	)		(0.20	)		(0.03	)		(0.08	)		(0.05	)		(0.13	)
	(0.48	)		—			—			—			(0.48	)		—			—			—			—			(0.48	)		—			—			—			—
	(0.70	)		(0.14	)		(0.11	)		—			(0.57	)		(0.07	)		(0.09	)		(0.05	)		(0.11	)		(0.68	)		(0.03	)		(0.08	)		(0.05	)		(0.13	)
	—			—			0.00			0.00			0.00			—			0.00			0.00			0.00			—			0.00			0.00			0.00			0.00
$	14.25		$	10.92		$	9.72		$	9.27		$	14.47		$	10.98		$	9.71		$	9.20		$	7.54		$	14.07		$	10.81		$	9.56		$	9.12		$	7.49
	38.99	%		13.97	%		5.98	%		9.32	%E		38.69	%		13.84	%		6.49	%		22.77	%		29.93	%		38.43	%		13.44	%		5.65	%		22.53	%		30.64	%
$	2,814		$	516		$	52		$	1		$	17,871		$	4,157		$	1,812		$	35,223		$	23,369		$	728		$	465		$	37		$	78		$	7
	1.11	%		1.28	%		11.62	%		1.05	%F		1.25	%		1.44	%		1.32	%		1.27	%		1.34	%		1.61	%		1.99	%		1.98	%		1.55	%		1.58	%
	1.08	%		1.06	%		1.06	%		1.01	%F		1.23	%		1.23	%		1.23	%		1.23	%		1.23	%		1.49	%		1.48	%		1.49	%		1.44	%		1.50	%
	0.79	%		0.82	%		(9.44	)%		0.93	%F		0.68	%		0.75	%		1.33	%		0.70	%		0.87	%		0.46	%		0.10	%		0.21	%		0.36	%		0.14	%
	0.82	%		1.03	%		1.12	%		0.97	%F		0.70	%		0.96	%		1.42	%		0.75	%		0.98	%		0.58	%		0.61	%		0.69	%		0.47	%		0.22	%
	48	%		87	%		107	%		40	%G		48	%		87	%		107	%		40	%		42	%		48	%		87	%		107	%		40	%		42	%

49

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,									May 17 to Oct. 31,
	2013			2012			2011A			2010
Net asset value, beginning of period	$	10.82		$	9.61		$	9.18		$	9.00
Income from investment operations:
Net investment income (loss)		0.14			0.09			0.11			0.01
Net gains (losses) from investments (both realized and unrealized)		3.80			1.20			0.40			0.17
Total income (loss) from investment operations		3.94			1.29			0.51			0.18
Less distributions:
Dividends from net investment income		(0.19	)		(0.08	)		(0.08	)		—
Distributions from net realized gains on securities		(0.48	)		—			—			—
Total distributions		(0.67	)		(0.08	)		(0.08	)		—
Redemption fees added to beneficial interestsC		—			0.00			0.00			0.00
Net asset value, end of period	$	14.09		$	10.82		$	9.61		$	9.18
Total return D		38.39	%		13.56	%		5.49	%		2.00	%E
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	1,667		$	264		$	101		$	18
Ratios to average net assets:
Expenses, before (reimbursements) or recoupments		1.48	%		1.61	%		3.44	%		1.51	%F
Expenses, net of (reimbursements) or recoupments		1.49	%		1.49	%		1.48	%		1.48	%F
Net investment income (loss), before (reimbursements) or recoupments		0.44	%		0.56	%		(1.36	)%		0.44	%F
Net investment income (loss), net of (reimbursements) or recoupments		0.43	%		0.68	%		0.60	%		0.47	%F
Portfolio turnover rate		48	%		87	%		107	%		40	%G

^A Lee Munder Capital Group, LLC was added as an investment manager to the Mid-Cap Value Fund on July 1, 2011.

^B Based on average shares outstanding.

^C Amounts represent less than $0.01 per share.

^D Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^E Not annualized.

^F Annualized.

^G Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

50

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

C Class												AMR Class
Year Ended October 31,									Sept. 1 to Oct. 31,			Year Ended October 31,
2013			2012			2011A			2010			2013			2012			2011A			2010			2009
$	10.70		$	9.56		$	9.18		$	8.30		$	10.96		$	9.73		$	9.27		$	7.59		$	5.97
	0.11			0.06			0.05			(0.01	)		0.15			0.24			0.15			0.10			0.07
	3.67			1.15			0.38			0.89			3.94			1.14			0.43			1.66			1.70
	3.78			1.21			0.43			0.88			4.09			1.38			0.58			1.76			1.77
	(0.19	)		(0.07	)		(0.05	)		—			(0.22	)		(0.15	)		(0.12	)		(0.08	)		(0.15	)
	(0.48	)		—			—			—			(0.48	)		—			—			—			—
	(0.67	)		(0.07	)		(0.05	)		—			(0.70	)		(0.15	)		(0.12	)		(0.08	)		(0.15	)
	—			—			0.00			0.00			0.00			—			0.00			0.00			0.00
$	13.81		$	10.70		$	9.56		$	9.18		$	14.35		$	10.96		$	9.73		$	9.27		$	7.59
	37.32	%		12.75	%		4.64	%		10.60	%E		39.43	%		14.34	%		6.20	%		23.28	%		30.56	%
$	905		$	254		$	22		$	1		$	125,744		$	76,273		$	56,963		$	64,012		$	53,604
	2.25	%		2.46	%		19.14	%		3.20	%F		0.73	%		0.78	%		0.83	%		0.77	%		0.82	%
	2.24	%		2.22	%		2.24	%		2.24	%F		0.73	%		0.78	%		0.83	%		0.77	%		0.83	%
	(0.27	)%		(0.40	)%		(16.96	)%		(1.32	)%F		1.32	%		1.46	%		1.34	%		1.19	%		1.38	%
	(0.26	)%		(0.15	)%		(0.06	)%		(0.36	)%F		1.32	%		1.46	%		1.34	%		1.19	%		1.38	%
	48	%		87	%		107	%		40	%G		48	%		87	%		107	%		40	%		42	%

51

American Beacon Small Cap Value II Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class						Investor Class
	Year Ended Oct. 31, 2013			Nov. 15 to Oct. 31, 2012			Year Ended Oct. 31, 2013			Nov. 15 to Oct. 31, 2012
Net asset value, beginning of period	$	10.70		$	10.00		$	10.67		$	10.00
Income from investment operations:
Net investment income		0.04			0.04			0.01			0.01
Net gains from investments (both realized and unrealized)		3.54			0.67			3.52			0.67
Total income from investment operations		3.58			0.71			3.53			0.68
Less distributions:
Dividends from net investment income		(0.05	)		(0.01	)		(0.05	)		(0.01	)
Distributions from net realized gains on securities		(0.15	)		–			(0.15	)		–
Total distributions		(0.20	)		(0.01	)		(0.20	)		(0.01	)
Redemption fees added to beneficial interestsA		—			—			—			—
Net asset value, end of period	$	14.08		$	10.70		$	14.00		$	10.67
Total return B		33.93	%		7.10	%		33.55	%		6.82	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	2,268		$	1,693		$	2,364		$	1,640
Ratios to average net assets:
Expenses, before reimbursements		2.82	%		4.44	%C		3.11	%		4.80	%C
Expenses, net of reimbursements		1.09	%		1.06	%C		1.37	%		1.33	%C
Net investment (loss), before reimbursements		(1.38	)%		(3.03	)%C		(1.68	)%		(3.39	)%C
Net investment income, net of reimbursements		0.35	%		0.35	%C		0.06	%		0.08	%C
Portfolio turnover rate		71	%		82	%		71	%		82	%

^A Amounts represent less than $0.01 per share.

^B  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^C  Annualized.

52

American Beacon Funds^SM

Privacy Policy and Federal Tax Information

October 31, 2013 (Unaudited)

Privacy Policy

The American Beacon Funds recognize and respect the privacy of our shareholders. We are providing this notice to you so you will understand how shareholder information may be collected and used.

We may collect nonpublic personal information about you from one or more of the following sources:

• information we receive from you on applications or other forms;

• information about your transactions with us or our service providers; and

• information we receive from third parties.

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

We restrict access to your nonpublic personal information to those employees or service providers who need to know that information to provide products or services to you. To ensure the confidentiality of your nonpublic personal information, we maintain safeguards that comply with federal standards.

Federal Tax Information

Certain tax information regarding the Fund is required to be provided to shareholders based upon the Fund’s income and distribution for the taxable year ended October 31, 2013. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2013.

The Funds designated the following items with regard to distributions paid during the year ended December 31, 2012. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

	Balanced			Mid-Cap Value			Small Cap Value II
Corporate Dividends Received Deduction		45.09	%		75.68	%		83.77	%
Qualified Dividend Income		63.65	%		100.00	%		100.00	%

The Balanced Fund designated $15,786,450 as long-term capital gains distributions for the year ended October 31, 2013.

The Mid-Cap Value Fund designated $4,948,487 as long-term capital gains distributions for the year ended October 31, 2013.

The Small Cap Value II Fund designated $5,274 as long-term capital gains and $52,198 as short term capital gains distributions for the year ended October 31, 2013.

Shareholders will receive notification in January 2014 of the applicable tax information necessary to prepare their 2013 income tax returns.

53

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

At its May 29, 2013 meeting, the Board of Trustees (“Board”) considered the renewal of the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Beacon Trust”) on behalf of each of their series (collectively, the “Funds”) and the renewal of each investment advisory agreement between the Manager and a subadvisor (each an “Investment Advisory Agreement”). The Management Agreement and the Investment Advisory Agreements are collectively referred to herein as the “Agreements.” In preparation for the Board’s consideration to renew and approve these Agreements, the Board and its Investment Committee undertook steps to gather and consider information furnished by the Manager, the subadvisors, Lipper, Inc. (“Lipper”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and each subadvisor.

In addition, the Board’s Investment Committee worked with Lipper to obtain relevant comparative information regarding the performance, fees and expenses of the Funds. The Investment Committee, for the benefit of all Trustees, sponsored a separate meeting on May 10, 2013 to consider the information provided by Lipper. Further, the Board took into consideration information furnished for the Board’s review and consideration throughout the year at regular Board and Investment Committee meetings, as well as information specifically prepared in connection with the renewal process.

In connection with the Board’s consideration of the Management Agreement and each Investment Advisory Agreement, the Trustees received and evaluated such information as they deemed necessary. The information requested by the Board included, among other information, the following materials. For various reasons, a subadvisor may not have provided responses to each requested item. In these instances, the Board considered the materials that were received from such subadvisor. References herein to the “firm” refer to the Manager and/or each applicable subadvisor.

• a description of any significant changes (actual or anticipated) to principal activities, personnel, services provided to the Funds, or any other area, including how these changes might affect the Funds;

• a copy of the firm’s most recent audited or unaudited financial statements, as well as Parts 1 and 2 of its Form ADV registration statement with the SEC;

• a summary of any material pending or anticipated litigation or regulatory proceedings involving the firm or its personnel, including the results of any recent regulatory examination or independent audit;

• a comparison of the performance of that portion of Fund assets managed or to be managed by each firm with the performance of other similar accounts managed by the firm, including a discussion of relative performance versus a peer group average and any actual or potential remedial measures if the firm’s longer-term performance was materially below that of the peer group;

• any actual or anticipated economies of scale in relation to the services the firm provides or will provide to each Fund and whether the current fee rates charged or to be charged to each Fund reflect these economies of scale for the benefit of the Fund’s investors;

• an analysis of compensation, including a comparison with fee rates charged to other clients for which similar services are provided, any proposed changes to the fee rate schedule, if applicable, and the effect of any fee waivers;

• a description of any payments made or to be made by the subadvisors to the Manager to support a Fund’s marketing efforts;

• a copy of the firm’s proxy voting policies and procedures and, if applicable, the name of the third-party voting service used by the firm;

• an evaluation of any other benefits to the firm or Funds as a result of their relationship, if any;

• confirmation that the firm’s financial condition would not impair its ability to provide high-quality advisory services to the Funds;

• a description of the scope of portfolio management services provided or to be provided to the Funds, including whether such services differ from the services provided to other clients, including other registered investment companies, and any advantages or disadvantages that might accrue to the Funds due to the firm’s involvement in other activities;

• a description of the personnel who are or will be assigned primary responsibility for managing the Funds, including any changes during the past year, and a discussion of the adequacy of current and projected staffing levels to service the Funds;

• a description of the basis upon which portfolio managers are compensated, including any “incentive” arrangements, and a description of the oversight mechanisms used to prevent a portfolio manager whose compensation is tied to performance of a Fund from taking undue risks;

• a description of the firm’s practices in monitoring the quality of portfolio holdings and in reviewing portfolio valuation, including any fair value determinations;

• a description of the firm’s use of derivatives, short positions, leveraged trading strategies or other similar trading strategies for the Funds;

• a discussion regarding the firm’s participation in third-party and/or proprietary “soft dollar” arrangements, if any, or other brokerage allocation policies with respect to Fund transactions;

• a discussion of the firm’s methodology for obtaining best execution, including any plans to improve the quality of execution in the upcoming year, and the use of any affiliated broker-dealers;

• a description of any actual or potential conflicts of interest anticipated in managing Fund assets;

• a discussion of whether the firm has identified any investment or operational matters that likely present a high risk in managing Fund assets;

54

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

• a description of the firm’s criteria for assessing counterparties and counterparty risk to the extent the firm enters into transactions with counterparties on a Fund’s behalf;

• a description of trade allocation procedures among accounts managed by the firm;

• a discussion of whether the firm utilizes “commission recapture” or “directed brokerage” arrangements for the benefit of the Funds or “step-out” transactions;

• a discussion of whether the firm receives, or anticipates receiving, other compensation, including any payment for electronic communication network liquidity rebates with respect to the Funds;

• a certification by the firm regarding the reasonable design of its compliance program;

• a summary of the results of the firm’s most recent annual review of its compliance program and a discussion of any material compliance problems encountered by a subadvisor since the most recent annual review;

• confirmation that the firm is prepared to provide to the Manager, directly or in summary form, any regulatory review comments that could have a material impact on services provided to the Funds;

• a discussion of whether, due to the firm’s trading activities on behalf of the Funds, the firm would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendments to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt;

• information regarding the firm’s code of ethics, insider trading policy and disaster recovery plan, including a description of any material changes thereto and a related certification of compliance by the firm;

• a description of the firm’s affiliation with any broker-dealer;

• a discussion of any anticipated change in the firm’s controlling persons; and

• verification of the firm’s insurance coverage with regards to the services provided to the Funds.

In addition to the foregoing, the Manager provided the following information specific to the renewal of the Management Agreement:

• a comparison of the performance of a share class of each Fund to comparable investment companies and appropriate indices, including comments on the relative performance of, as applicable, each subadvisor and each Fund versus the respective peer group average;

• a discussion, if applicable, of any underperformance by a subadvisor relative to its peer group and what, if any, remedial measures the Manager has or intends to take;

• a comparison of advisory fee rates and expense ratios for comparable mutual funds;

• a profit/loss analysis of the Manager;

• an analysis of any material complaints received from Fund shareholders;

• a description of the extent to which the Manager monitors the investment activities and financial conditions of each subadvisor to the Funds;

• a discussion of whether the Manager provides different types or levels of administrative and accounting related services to certain Funds;

• a description of the Manager’s distribution activities with respect to promoting sales of Fund shares, including any revenue sharing practices;

• a description of arrangements pursuant to which certain firms may make any direct or indirect payments to partially reimburse the Manager for its marketing or other expenses on behalf of the Funds;

• a description of the Manager’s securities lending practices and the fees received from such practices;

• a discussion of any rebate arrangements between the Manager and a service provider to the Funds pursuant to which the Manager receives direct or indirect benefits from the service provider;

• a description of the portfolio turnover rate for each Fund and, as applicable, each subadvisor to a Fund;

• a description of how expenses that are not readily identifiable to a particular Fund are allocated; and

• confirmation that the Manager complies with applicable CFTC and National Futures Association rules and requirements for applicable Funds and a discussion regarding whether, due to the Manager’s trading activities on behalf of other Funds, the Manager would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendment to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt.

In connection with the Management Agreement and each Investment Advisory Agreement, the Board also obtained an analysis provided by Lipper that compared: (i) investment performance of each Fund versus comparable investment companies and appropriate indices; (ii) total Fund expenses of each Fund versus comparable mutual funds; and (iii) each Fund’s investment advisory fee rate versus comparable mutual funds. For certain Funds, the Board also considered information regarding the performance of the Manager and individual subadvisors with respect to their allocated portions of a Fund’s portfolio, net of management or subadvisory fees, as applicable, but not other Fund expenses. For each Fund with more than one class of shares, the class of shares used for comparative purposes was the class with the longest performance history, which in most cases was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

55

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Provided below is an overview of the primary factors the Trustees considered at the Investment Committee meeting on May 10, 2013 at which the Trustees reviewed the investment performance of the Manager and each subadvisor and the primary factors considered by the Board at its May 29, 2013 meeting at which the Board considered the renewal of the Management Agreement and Investment Advisory Agreements.

The Board did not identify any particular information that was most relevant to its consideration to renew or approve each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal and approval of each Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of the contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Funds and their shareholders.

Considerations With Respect to the Renewal of the Management Agreement and each Investment Advisory Agreement

In determining whether to renew the Management Agreement and each Investment Advisory Agreement on behalf of the Funds, the Trustees considered the best interests of each Fund separately. While the Management Agreement and the Investment Advisory Agreements for all of the Funds were considered at the May 29, 2013 meeting, the Board considered each Fund’s investment management and subadvisory relationships separately.

In each instance, the Board considered, among other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of a Fund and, as applicable, each subadvisor for a Fund; (3) the costs incurred by the Manager in rendering services to the Funds and its resulting profits or losses; (4) the extent to which economies of scale have been taken into account in setting each fee rate schedule; (5) whether fee rate levels reflect these economies of scale for the benefit of Fund investors; (6) comparisons of services and fee rates with contracts entered into by the Manager or a subadvisor or their affiliates with other clients (such as pension funds and other institutional funds); and (7) any other benefits derived or anticipated to be derived by the Manager or a subadvisor from their relationship with a Fund. The Trustees posed questions to various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the renewal.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: each Fund’s long-term performance and the background and experience of key investment personnel at the Manager; the cost structure of the Funds; the Manager’s culture of compliance and support for compliance operations that reduce risks to the Funds; the Manager’s commitment to enhance the Funds’ product line and increase assets in the Funds; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; the Manager’s commitment to training employees; and the Manager’s efforts to retain key employees and maintain staff levels.

With respect to the renewal of each Investment Advisory Agreement, the Trustees considered the level of staffing, quality, background and experience of each subadvisor’s investment personnel responsible for managing the Funds, the size of the subadvisor and the subadvisor’s ability to continue to attract and retain qualified investment personnel. The Board also considered the adequacy of the resources committed to the Funds by each subadvisor, and whether those resources were commensurate with the needs of the Funds and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of each subadvisor. The Board also considered the subadvisors’ representations regarding their compliance programs and codes of ethics. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and each subadvisor were appropriate for each Fund and, thus, determined to renew the Management Agreement and the Investment Advisory Agreement for each Fund.

Investment Performance. The Board evaluated the comparative information provided by Lipper and the Manager regarding each Fund’s investment performance relative to its Lipper performance universe, Lipper performance group, and/or benchmark index(es). The Board considered the information provided by Lipper regarding its independent peer selection methodology to select all performance groups and universes. The Board also considered that the performance groups and universes selected by Lipper may not provide appropriate comparisons for each Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also considered in each instance the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to each Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Costs of the Services Provided to the Funds and the Profits Realized by the Manager from its Relationship with the Funds. In analyzing the cost of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager. The profits or losses were noted at both an aggregate level for all Funds and at an individual Fund level, with some Funds being profitable for the Manager and with the Manager sustaining losses with respect to other Funds. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Funds, the difference reflects the greater level of responsibility and regulatory requirements associated with managing the Funds.

The Board also noted that the Manager proposed to continue the expense waivers and reimbursements for certain Funds and classes that were in place during the last fiscal year. The Board further considered that with respect to each Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager plus the amount payable by the Manager to a subadvisor. The Board also considered that the Manager receives service and administrative fees to compensate the Manager for providing administrative services to the Funds and to compensate third-party administrators and broker-dealers for services to Fund shareholders. In addition, the Board considered that the Manager receives management fees for overseeing the securities lending program on behalf of various Funds. The Board also noted that certain classes of the Funds maintain higher expense ratios in order to compensate third-party distributors.

56

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

In analyzing the cost of services for each subadvisor in connection with its investment advisory services to the Fund, the Board considered that, in many cases, the Manager has negotiated the lowest subadvisory fee rate a subadvisor charges for any comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board noted that subadvisors may not account for their profits on an account-by-account basis and, those that do, likely employ different methodologies in connection with these calculations.

Based on the foregoing information, the Board concluded that the profitability levels of the Manager were reasonable in light of the services performed by the Manager. A discussion regarding the Board’s considerations with respect to each Fund’s fee rates is set forth below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as the Funds grow and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that the Manager has negotiated breakpoints in many subadvisory fee rates. The Board also noted that, for purposes of determining the fee rates chargeable to the Funds, many subadvisors have agreed to take into account assets of AMR Corporation and its pension plans that are managed by the subadvisors. Thus, the Funds are able to receive lower effective fee rates.

In addition, the Board noted the Manager’s representation that many of the Funds benefit from economies of scale because comparably low fee rate levels are reflected in the current management and administration fee rates the Manager charges. The Board further noted the Manager’s representation that many of the Funds benefit from these comparably low fee rate levels despite not having yet reached an asset size at which economies of scale would traditionally be considered to exist, and the Manager’s belief that breakpoints are not appropriate at this time. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for each Fund provide for a reasonable sharing of benefits from any economies of scale with the Funds.

Benefits Derived from the Relationship with the Funds. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisors as a result of the advisory relationships with the Funds, including greater exposure in the marketplace with respect to the Manager’s or subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors.

In addition, the Manager noted that the Funds also derive benefits from their association with the Manager. Specifically, the Board noted the Manager’s representation that it provides services to most Funds at a lower than industry average cost. The Board considered that certain of the subadvisors reimburse the Manager for certain of its costs relating to distribution activities for the Funds. The Board also considered that the Funds did not pay commissions to any affiliated broker-dealer of the Manager or the relevant subadvisor during the most recent fiscal year ended December 31, 2012.

Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisors by virtue of their relationships with the Funds appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to Each Fund

The performance comparisons below were made versus each Fund’s Lipper performance universe median, Lipper performance group median and/or benchmark index. References below to each Fund’s Lipper performance group and Lipper performance universe are to the respective group or universe of comparable mutual funds included in the analysis provided by Lipper. A Lipper performance group consists of the Fund and a representative sample of funds with similar investment classifications and objectives as the Fund, as selected by Lipper. A Lipper performance universe is an expansion of the performance group, providing a broader view of performance across the Fund’s investment classification/objective and allowing for a more extensive comparison. In reviewing the performance, the Trustees viewed longer-term performance over a full market cycle, typically five years or longer, as the most important consideration, because relative performance over shorter periods may be significantly impacted by market or economic events that do not reflect manager skill.

The expense comparisons below were made versus each Fund’s Lipper expense universe median and Lipper expense group median. References below to each Fund’s expense group and expense universe are to the respective group or universe of comparable mutual funds included in the analysis by Lipper. A Lipper expense group consists of the Fund and a representative sample of funds with similar operating structures, as selected by Lipper. A Lipper expense universe includes all funds in the investment classification/objective with a similar load type to the share class of the Fund included in the Lipper comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Trustees also considered a Fund’s Morningstar fee level category. In reviewing expenses, the Trustees considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the use of soft dollars was requested from the Manager and all subadvisors and was considered by the Trustees.

57

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Additional Considerations and Conclusions with Respect to the American Beacon Balanced Fund

In considering the renewal of the Management Agreement for the American Beacon Balanced Fund, the Trustees considered the following additional factors: (1) the American Beacon Balanced Fund outperformed the Lipper performance universe median for the one-, three-, five- and ten-year periods ended March 31, 2013; (2) the Fund outperformed the Lipper performance group median for the one- and five-year periods ended March 31, 2013, and was equal to the Lipper performance group median for the three-year period; (3) the Manager outperformed its applicable benchmark index with respect to its portion of the Fund’s fixed income assets for the one-, three-, five- and ten-year periods ended March 31, 2013; (4) the expense ratio of the Institutional Class of Fund shares was lower than the median of its Lipper expense universe and Lipper expense group; and (5) the Institutional Class of the Fund was categorized by Morningstar as having a low expense ratio.

In considering the renewal of the Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, Inc. (“Barrow”), Brandywine Global Investment Management, LLC (“Brandywine”) and Hotchkis and Wiley Capital Management, LLC (“Hotchkis”), the Trustees considered the following additional factors: (1) Barrow, Brandywine and Hotchkis each outperformed the Lipper performance universe median for the one-, three-, five- and ten-year periods ended March 31, 2013; (2) the Manager’s explanation that, although the equity portion of the Brandywine portfolio underperformed its equity benchmark index for the five-year period ended March 31, 2013, Brandywine outperformed for the one-, three-, five- and ten-year periods ended March 31, 2013, and that Brandywine’s underperformance of its equity portion for the five-year period was due in part to over-and under-weightings of certain sectors during that period; (3) representations by each subadvisor regarding fee rates charged by the subadvisor to other comparable clients; and (4) the Manager’s recommendation to continue to retain each subadvisor.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisors under the Agreements are fair and reasonable; (2) determined that the American Beacon Balanced Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon Balanced Fund.

Additional Considerations and Conclusions with Respect to the American Beacon Mid-Cap Value Fund

In considering the renewal of the Management Agreement for the American Beacon Mid-Cap Value Fund, the Trustees considered the following additional factors: (1) the American Beacon Mid-Cap Value Fund outperformed its Lipper performance universe median and Lipper performance group median for the one-, three- and five-year periods ended March 31, 2013; (2) the expense ratio of the Institutional Class of the Fund was lower than the median of its Lipper expense universe; (3) the expense ratio of the Institutional Class of the Fund was higher than the median of its Lipper expense group; (4) the Institutional Class of the Fund was categorized by Morningstar as having an average expense ratio; and (5) the expense ratio level is impacted by the smaller asset size of the Fund, and thus, is likely to decrease as the Fund grows.

In considering the renewal of the Investment Advisory Agreements with Barrow, Pzena Investment Management, LLC (“Pzena”) and Lee Munder Capital Group, LLC (“Lee Munder”), the Trustees considered the following additional factors: (1) Barrow outperformed the Lipper performance universe median for the three- and five-year periods ended March 31, 2013, but underperformed for the one-year period; (2) Pzena outperformed the Lipper performance universe median for the one-, three- and five-year periods ended March 31, 2013; (3) Lee Munder outperformed the Lipper performance universe median for the one-year period ended March 31, 2013; (4) representations by each subadvisor regarding fee rates charged by the subadvisor to other comparable clients; and (5) the Manager’s recommendation to continue to retain each subadvisor.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisors under the Agreements are fair and reasonable; (2) determined that the American Beacon Mid-Cap Value Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon Mid-Cap Value Fund.

Additional Considerations and Conclusions with Respect to the American Beacon Small Cap Value II Fund

In considering the renewal of the Management Agreement for the American Beacon Small Cap Value II Fund, the Trustees considered the following additional factors: (1) the American Beacon Small Cap Value II Fund underperformed the Lipper performance universe median and Lipper performance group median for the one-year period ended March 31, 2013; (2) the expense ratio of the Y Class of the Fund was lower than the median of its Lipper expense universe and Lipper expense group; and (3) the Y Class of the Fund was categorized by Morningstar as having an average expense ratio.

In considering the renewal of the Investment Advisory Agreements with Dean Capital Management, LLC (“Dean”), Fox Asset Management, LLC (“Fox”) and Signia Capital Management, LLC (“Signia”), the Trustees considered the following additional factors: (1) Dean outperformed the Lipper performance universe median for the one-year period ended March 31, 2013; (2) Fox and Signia each underperformed the Lipper performance universe median for the one-year period ended March 31, 2013; (3) representations by each subadvisor regarding fee rates charged by the subadvisor to other comparable clients; and (4) the Manager’s recommendation to continue to retain each subadvisor, based upon, among other factors, the relatively brief period that this Fund has been in operation.

58

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisors under the Agreements are fair and reasonable; (2) determined that the American Beacon Small Cap Value II Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon Small Cap Value II Fund.

59

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. Unless otherwise indicated, the address of each person listed below is 4151 Amon Carter Boulevard, MD 2450, Fort Worth, Texas 76155. Each Trustee oversees twenty-six funds in the fund complex that includes the Trust and the American Beacon Select Funds. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES
	Term
	Lifetime of Trust until removal, resignation or retirement*
Gerard J. Arpey** (55)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Chairman and Chief Executive Officer, AMR Corp. and American Airlines; Inc. (2003-2011); Director, S. C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present).
Alan D. Feld*** (76)	Trustee since 1996	Sole Shareholder of a professional corporation which is a Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Mileage Funds (1996-2012); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Master Trust (1996-2012).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
W. Humphrey Bogart (69)	Trustee since 2004	Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Brenda A. Cline (52)	Trustee since 2004	Executive Vice President, Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Eugene J. Duffy (59)	Trustee since 2008	Principal and Executive Vice President, Paradigm Asset Management (1994-Present); Director, Sunrise Bank of Atlanta (2008-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Thomas M. Dunning (71)	Trustee since 2008	Chairman Emeritus (2008-Present) and Chairman (1998-2008)), Lockton Dunning Benefits (consulting firm in employee benefits); Lead Director, Oncor Electric Delivery Company LLC (2007-Present); Board Member, BancTec (2010-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Richard A. Massman (70)	Trustee since 2004 Chairman since 2008	Consultant and General Counsel Emeritus (2009-Present) and Senior Vice President and General Counsel (1994-2009), Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).

60

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
Barbara J. McKenna, CFA (50)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present).
R. Gerald Turner (67)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-Present); Director, Kronus Worldwide Inc. (chemical manufacturing) (2003-Present); Trustee, American Beacon Mileage Funds (2001-2012); Trustee, American Beacon Select Funds (2001-Present); Trustee, American Beacon Master Trust (2001-2012).
Paul J. Zucconi, CPA (73)	Trustee since 2008	Director, Affirmative Insurance Holdings, Inc. (producer of nonstandard automobile insurance) (2004-Present); Director, Titanium Metals Corporation (producer of titanium melted and mill products) (2002-2012); Director, Torchmark Corporation (life and health insurance products) (2002-Present); Director, Charter Bank (community bank services and products) (2010-2011); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
OFFICERS
	Term
	One Year
Gene L. Needles, Jr. (58)	President since 2009 Executive Vice President since 2009	President, CEO and Director (2009-Present), American Beacon Advisors, Inc.; President (2009-Present), President, CEO and Director (2009-Present), Lighthouse Holdings, Inc.; President and CEO (2009-Present), Lighthouse Holdings Parent, Inc.; President (2009-Present), American Beacon Select Funds; President (2009-Present), American Beacon Mileage Funds; President (2008-2009), Touchstone Investments; President (2003-2007), CEO (2004-2007), AIM Distributors.
Rosemary K. Behan (54)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Legal and Compliance, American Beacon Advisors, Inc. (2006-Present); Secretary, American Beacon Advisors, Inc. (2008-present); Secretary, Lighthouse Holdings, Inc. (2008-Present); Secretary Lighthouse Holdings Parent, Inc. (2008-Present).
Brian E. Brett (53)	VP since 2004	Vice President, Director of Sales, American Beacon Advisors, Inc. (2004-Present).
Wyatt L. Crumpler (47)	VP since 2007	Chief Investment Officer (2012-Present), Vice President, Asset Management (2009-2012), and Vice President, Trust Investments (2007-2009), American Beacon Advisors, Inc.
Erica Duncan (43)	VP Since 2011	Vice President, Marketing and Client Services (2011-Present), American Beacon Advisors, Inc.; Supervisor, Brand Marketing (2010-2011), Invesco; Supervisor, Marketing Communications (2009-2010) and Senior Financial Writer (2004-2009), Invesco AIM.
Michael W. Fields (59)	VP since 1989	Chief Fixed Income Officer (2011-Present) and Vice President, Fixed Income Investments, American Beacon Advisors, Inc. (1988-2011); Director, American Beacon Global Funds SPC (2002-2011); Director, American Beacon Global Funds plc (2007-2009).
Melinda G. Heika (52)	Treasurer since 2010	Treasurer (2010-Present), and Controller (2005-2009), American Beacon Advisors, Inc.; Treasurer, Lighthouse Holdings, Inc. (2010 - Present); Treasurer, Lighthouse Holdings Parent, Inc. (2010-Present).
Terri L. McKinney (49)	VP since 2010	Vice President, Enterprise Services (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.
Jeffrey K. Ringdahl (38)	VP since 2010	Chief Operating Officer, American Beacon Advisors, Inc. (2010-Present); Vice President, Product Management, Touchstone Advisors, Inc. (2007-2010); Senior Director, Business Integration, Fidelity Investments (2005-2007).

61

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
Samuel J. Silver (50)	VP Since 2011	Vice President, Fixed Income Investments (2011-Present) and Senior Portfolio Manager, Fixed Income Investments (1999-2011), American Beacon Advisors, Inc.
Christina E. Sears (42)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Chief Compliance Officer (2004-Present), American Beacon Advisors, Inc.
John J. Okray (39)	Asst. Secretary since 2010	Deputy General Counsel (2012-Present) and Assistant General Counsel (2010-2012), American Beacon Advisors, Inc.; Asst. Secretary (2010-Present), Lighthouse Holdings, Inc.; Asst. Secretary (2010 - Present), Lighthouse Holdings Parent, Inc.; Vice President, OppenheimerFunds, Inc. (2004-2010).
Sonia L. Bates (56)	Asst. Treasurer since 2011	Director, Tax and Financial Reporting (2011 - Present) and Manager, Tax and Financial Reporting (2005-2010), American Beacon Advisors, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings Parent, Inc.

* The Board has adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 72, provided, however, that the board may determine to grant one or more annual exemptions to this requirement.

** Mr. Arpey is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Arpey previously served as CEO of AMR Corp., which has a material relationship with the Manager.

*** Mr. Feld is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Feld’s law firm of Akin, Gump, Strauss, Hauer & Feld LLP has provided legal services within the past two years to the Manager and one or more of the Trust’s sub-advisors.

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65

Delivery of Documents

eDelivery is NOW AVAILABLE - Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, 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: american_beacon.funds@ambeacon.com	On the Internet: Visit our website at www.americanbeaconfunds.com
By Telephone: Institutional, Y, Investor, and Advisor Classes Call (800) 658-5811 AMR ClassSM Call (800) 345-2345	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	Availability of Proxy Voting Policy and Records A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Boston, Massachusetts TRANSFER AGENT Boston Financial Data Services Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Foreside Fund Services, 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 of Summary Prospectus.

American Beacon Funds, American Beacon Balanced Fund, American Beacon Mid-Cap Value Fund and American Beacon Small Cap Value II Fund are service marks of American Beacon Advisors, Inc.

AR 10/13

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

President’s Message	1
Market and Performance Overviews	2-11
Schedules of Investments:
High Yield Bond Fund	15
Retirement Income and Appreciation Fund	26
Intermediate Bond Fund	33
Short-Term Bond Fund	41
Financial Statements	44
Notes to the Financial Statements	49
Financial Highlights	64
Additional Information	Back Cover

An obligation rated ‘AAA’ has the highest rating assigned by Standard & Poor’s. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. An obligation rated ‘AA’ by Standard & Poor’s differs from the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong. An obligation rated ‘A’ by Standard & Poor’s is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong. An obligation rated ‘BBB’ by Standard & Poor’s exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ by Standard & Poor’s are regarded as having significant speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

Duration is a measure of price sensitivity relative to changes in interest rates.

Any opinions herein, including forecasts, reflect our judgment as of the end of the reporting period and are subject to change. Each advisor’s strategies and each Fund’s portfolio composition will change depending on economic and market conditions. This report is not a complete analysis of market conditions, and, therefore, should not be relied upon as investment advice. Although economic and market information has been compiled from reliable sources, American Beacon Advisors, Inc. makes no representation as to the completeness or accuracy of the statements contained herein.

American Beacon Funds October 31, 2013

  Dear Shareholders,   Maybe the most prominent story in the bond markets over the past year has been the fact that the 10-year Treasury note has finally started recovering after bottoming out at all-time lows in July 2012. While that’s a good sign for the bond market as a whole, those yields are still near historic lows.   Despite the Treasury note’s recovery, there’s no doubt that it was a challenging year for fixed-income investors. For the period under review, the Barclays U.S. Aggregate Bond Index – the benchmark for the broader bond market – declined by 1.08%. That’s a troubling scenario for what is often considered a relatively safe investment.

Other areas of the fixed-income market managed to prosper, though. The JPMorgan Global High Yield Index returned 8.93% for the period under review.

That helps highlight the potential advantage of having a nimble, active manager handling fixed-income investments.

For the 12 months ended October 31, 2013:

• The American Beacon High Yield Bond Fund (Investor Class) returned 8.73%.

• The American Beacon Retirement Income and Appreciation Fund (Investor Class) returned 3.14%.

• The American Beacon Intermediate Bond Fund (Investor Class) returned -1.58%.

• The American Beacon Short-Term Bond Fund (Investor Class) returned 0.03%.

Thank you for your continued investment in the American Beacon Funds. For additional information about the Funds or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Bond Market Overview

October 31, 2013 (Unaudited)

The U.S. Federal Reserve Bank (the “Fed”) and its quantitative easing program (QE) were the primary forces behind the domestic fixed-income market’s performance during the year ended October 31, 2013. The QE phase of the Fed’s monetary stimulus program, which began in September 2012 with the purchase of $85 billion per month of treasuries and mortgages, sent the 10-year Treasury note yield down to a record-low 1.60% shortly after this period began on October 31, 2012.

Given the Fed’s support, longer-term Treasury yields held below 2.00% until May 2013 when Fed chairman Ben Bernanke referred to a possible “tapering,” or reduction, of the QE program. Because the U.S. economic improvement had been only modest up to that point, Mr. Bernanke’s comments shocked the bond market and caused a sharp increase in interest rates. The 10-year Treasury note yield rose to 3.00% by September 2013.

Despite the Fed’s optimism, the economic data and the dysfunction in Washington D.C. in late 2013 prevented the Fed from tapering QE after all. Interest rates remained volatile, in a downward trend, through October 31, 2013 and ended the period at 2.50%.

During late 2013, the Fed changed course when the economic data confirmed that the economy was still struggling and had not reached a self-sustaining growth trajectory. In particular, employment and inflation were still below the Fed’s targeted objectives. The Fed indicated that a 7.0% unemployment rate was necessary for the tapering of QE, but the rate was 7.3% in October 2013. Likewise, inflation readings were struggling to remain above 1.00%.

Due to the low interest rates, the housing market received a much-needed boost and provided room for optimism about the overall economy. The relief, however, was short lived as the rate increase following the Fed’s tapering discussions sent a chill back into the market. Home sales remained firm through the summer but were beginning to slow as winter approached. The interaction between the Fed and the housing market will be a vital aspect of the economy’s ability to recover.

Long-term interest rates may have been volatile during the year, but yield spreads for corporate and mortgage bonds were fairly stable. On October 31, 2012, the Barclays Investment Grade Corporate Bond Index had a yield spread of 137 basis points (1.37%). At period end, on October 31, 2013, the yield spread was 131 basis points (1.31%). Yield spread measures the difference in yield between a corporate or mortgage bond and a similar-maturity Treasury bond.

For the first six months of the period, the Barclays Aggregate Index return was slightly positive at 0.90%. However, when the Fed’s taper talk began in mid-2013, interest rates rose and pushed the index into negative territory. For the last six months of the period, the index returned -1.97%. Overall, the index returned -1.08% for the year ended October 31, 2013.

2

High Yield Bond Market Overview

October 31, 2013 (Unaudited)

The high-yield fixed-income market posted another year of strong returns in the period under review, as the JPMorgan Global High-Yield Index returned 8.9% for the 12 months ended October 31, 2013. Once again, high-yield bonds were the best performing fixed-income asset class for the period due to the move higher in interest rates. The 10-year Treasury lost 4.6% in the time period, and the market saw emerging-market debt diverge from high-yield returns by losing more than 2.5%.

The high-yield market, as well as many other financial markets, experienced a sharp correction from late May through late June, as comments from the Federal Reserve led the market to worry that tapering from the quantitative easing (QE) program could end sooner than expected and caused interest rates to spike. However, the Fed managed to calm the markets by reiterating that any eventual tapering from QE would be data-dependent. This clarification from the Fed was followed by the nomination of Janet Yellen to succeed Ben Bernanke as Federal Reserve chair and the expectation that she would continue his easy money policies. As a result, interest rates stabilized, albeit at levels significantly higher than they were prior to May.

Aside from outflows related to the interest rate volatility in the early summer, money generally flowed into the high-yield asset class during the year, as investors continued to seek income-producing investments in an environment of low interest rates around the globe. While Treasury yields rose, the potential negative effect was mitigated by high-yield spreads that narrowed from 5.9% over Treasuries to 4.9%, and the yield-to-worst of the high-yield index actually declined from 6.7% to 6.0% over the 12 months under review. Despite a slowdown over the summer, the capital markets were wide open for most of the year, enabling issuers to access the high-yield market to refinance debt at lower rates and to extend maturities.

In the 12 months under review, new issuance exceeded $450 billion, representing 924 issues. By the end of the period, just over 50% of the new issuance was used to refinance debt with the balance split between acquisitions and general corporate activity. The market has also seen an increase in dividends and other shareholder-friendly decisions by management teams in the high-yield credit market.

The combination of corporations being able to issue debt and strong credit fundamentals were key drivers in maintaining a low default rate during the year. On a par-weighted basis, the 12 months experienced just 1.1% in defaults, while the issuer default rate was just 2.4%.

While the high-yield market’s relative returns were strong when compared to fixed-income, high-yield could not keep up with the equity markets. The S&P 500 Index returned 27.2% and the Russell 2000 Index returned 36.3% for the period under review. With the move higher in interest rates, BB-rated bonds lagged the overall market by returning 5.9%, single-B issues showed less rate sensitivity by achieving a 10.3% return and CCC-rated bonds did their best to keep up with the equity market by gaining 16.0%.

3

American Beacon High Yield Bond Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the High Yield Bond Fund (the “Fund”) returned 8.73% for the twelve months ended October 31, 2013. The Fund slightly trailed the JPMorgan Global High-Yield Index (the “Index”) return of 8.93% and the Lipper High Current Yield Funds Index return of 9.07% for the period.

Comparison of Change in Value of a $10,000 Investment

For the Period from 10/31/2003 through 10/31/13

Total Returns for the Period ended 10/31/13

	1 Year			5 Years			10 Years			Value of $10,000 10/31/03- 10/31/13
Institutional Class (1,7)		8.94	%		15.82	%		7.21	%	$	20,067
Y Class (1,3,7)		8.74	%		15.64	%		7.13	%		19,911
Investor Class (1,7)		8.73	%		15.54	%		6.95	%		19,575
A Class with sales charge (1,4,7)		3.50	%		14.45	%		6.44	%		18,667
A Class without sales charge (1,4,7)		8.61	%		15.58	%		6.96	%		19,606
C Class with sales charge (1,5,7)		6.90	%		14.97	%		6.68	%		19,099
C Class without sales charge (1,5,7)		7.90	%		14.97	%		6.68	%		19,099
AMR Class (1,2,7)		9.25	%		16.13	%		7.39	%		20,405
JPMorgan Global High-Yield Index (6)		8.93	%		18.27	%		9.12	%		23,940
Lipper High Current Yield Funds Index (6)		9.07	%		15.51	%		7.44	%		20,491

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is 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 ten-year period represents the total return achieved by the Institutional Class from 10/31/03 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 10/31/03.

3. Fund performance for the five-year and ten-year periods represent the returns achieved by the Institutional Class from 10/31/03 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 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 10/31/03.

4. Fund performance for the five-year and ten-year periods represent the returns achieved by the Investor Class from 10/31/03 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A 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 A Class been in existence since 10/31/03. The maximum sales charge for A Class is 4.75%.

5. Fund performance for the five-year and ten-year periods represent the returns achieved by the Investor Class from 10/31/03 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/03. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

6. 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.

7. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, C, and AMR Class shares was 0.94%, 1.14%, 1.17%, 1.47%, 2.17%, and 0.63%, 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.

Prior to the deduction of expenses, the Fund outperformed the Index. On a gross of fee basis, the Fund’s added value relative to the Index was largely driven by strong issue selection across sectors and credit quality categories.

4

American Beacon High Yield Bond Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

From a sector standpoint, issue selections in the Service, Manufacturing and Energy sectors benefited returns. The Fund’s holdings in these sectors not only outperformed the sector returns in the Index, but also outperformed the Index as a whole.

From a sector allocation perspective, the Fund’s modest cash position detracted given the strong absolute returns generated by the high yield asset class. The Fund’s relative weights among the remaining sectors had a minimal impact on results.

From a credit quality perspective, issue selections in the BB and B-rated categories had a positive impact on the Fund’s relative returns. The Fund’s holdings in the CCC-rated category trailed those of the Index and detracted from relative performance.

From a credit quality allocation perspective, the combination of underweighting BB-rated securities and overweighting CCC-rated securities benefited relative returns.

The sub-advisors’ “bottom-up,” research intensive investment process, which focuses on companies with strong cash flow and fundamental credit strength, remains in place.

Top Ten Holdings (% Net Assets)

Clear Channel Communications, Inc., 9.00%, Due 3/1/21	0.9
E*Trade Financial Corp., 6.375%, Due 11/15/19	0.9
Clear Channel Worldwide Holdings, Inc., 7.625%, Due 3/15/20	0.6
Sprint Nextel Corp., 11.500%, Due 11/15/21	0.6
Ally Financial, Inc., 7.500%, Due 9/15/2020	0.6
EPL Oil & Gas, Inc., 8.250%, Due 2/15/2018	0.6
Sabine Pass LNG LP, 7.500%, Due 11/30/16	0.6
ArcelorMittal, 6.000%, Due 3/1/2021	0.5
Equinix, Inc., 5.375%, Due 4/1/2023	0.5
Cumulus Media Holdings, Inc., 7.750%, Due 5/1/2019	0.5
Total Fund Holdings	514

Sector Weightings (% Investments)

Service	27.9
Manufacturing	20.2
Energy	18.0
Telecommunications	11.4
Finance	10.8
Consumer	4.9
Utilities	3.2
Transportation	2.5
Convertible Obligations	0.6
Equity	0.5

Investing in debt securities entails interest rate risk, which is the risk that debt securities will decrease in value with increases in market interest rates. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The Fund invests in small and/or mid-sized companies, which involves additional risks such as limited liquidity and greater volatility than larger companies. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. 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. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

5

American Beacon Retirement Income and Appreciation Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the Retirement Income and Appreciation Fund (the “Fund”) returned 3.14% for the twelve months ended October 31, 2013. Its benchmark, a blend of 75% Barclays Capital Aggregate Index (the “Aggregate Index”) and 25% BofA Merrill Lynch All U.S. Convertibles Index (the “ML Index”) (combined the “Retirement Income and Appreciation Composite Index”), returned 4.74%. The Fund’s peer group, the Morningstar US OE Retirement Income Category, increased 7.29% for the same period.

Comparison of Change in Value of a $10,000 Investment

For the Period from 10/31/03 through 10/31/13

Total Returns for the Period ended 10/31/13

	1 Year			5 Years			10 Years			Value of $10,000 10/31/03 - 10/31/13
Y Class (1,2,7)		3.43	%		8.33	%		4.92	%	$	16,166
Investor Class (1,7)		3.14	%		8.13	%		4.82	%		16,020
A Class with sales Charge (1,3,7)		0.08	%		7.08	%		4.31	%		15,253
A Class without sales Charge (1,3,7)		3.18	%		8.13	%		4.82	%		16,019
C Class with sales Charge (1,4,7)		1.01	%		7.55	%		4.54	%		15,592
C Class without sales Charge (1,4,7)		2.01	%		7.55	%		4.54	%		15,592
Retirement Income and Appreciation Composite Index (6)		4.74	%		9.06	%		5.34	%		16,826
Barclays Capital Aggregate Index (5)		-1.08	%		6.09	%		4.78	%		15,549
BofA Merrill Lynch All U.S. Convertibles Index (5)		23.94	%		17.77	%		7.22	%		20,078
Morningstar US OE Retirement Income (5)		7.29	%		8.74	%		4.70	%		15,833

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is as of date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the five-year and ten-year periods represent the returns achieved by the Investor Class from 10/31/03 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 10/31/03.

3. Fund performance for the five-year and ten-year periods represent the returns achieved by the Investor Class from 10/31/03 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A 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 A Class been in existence since 10/31/03. The maximum sales charge for A Class is 2.50%.

4. Fund performance for the five-year and ten-year periods represent the returns achieved by the Investor Class from 10/31/03 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/03. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

5. 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 Morningstar US OE Retirement Income has replaced the Lipper Intermediate Investment Grade Index. The Morningstar US OE Retirement Income category includes funds that invest in a mix of stocks, bonds and cash for those investors already in or entering retirement. One cannot directly invest in an index

6. 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.

7. The total annual Fund operating expense ratios set forth in the most recent Fund prospectus for the Y, Investor, A, and C Class shares was 0.88%, 1.13%, 1.29%, and 2.05%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that is based on expenses incurred during the period covered by this report.

The Fund’s assets have been allocated approximately 75% to American Beacon Advisors, Inc. (the “Manager”) that invests primarily in income producing, short and intermediate-term investment grade bonds and 25% to a sub-advisor that 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.

6

American Beacon Retirement Income and Appreciation Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

During the twelve-month period, the investment grade bond portion of the Fund declined 0.5%, outperforming the 1.1% decline for the Aggregate Index. This segment of the Fund’s outperformance can be attributed to a combination of favorable allocation decisions and strong security selection among sectors and credit quality categories.

During the period, the overweight to the Financial sector was a positive as Financial securities were one of the best performing categories in the Aggregate Index (up 1.8%). In addition, maintaining an underweight allocation to Treasury securities also proved beneficial.

The performance from the Fund’s Treasury securities trailed those in the Aggregate Index and hampered relative returns offsetting some of the benefits from the underweight allocation. However, within the Financial sector, security selection was strong and complimented the benefit of the overweight allocation.

The Fund’s positioning and security selection among the various credit quality categories aided returns relative to the Aggregate Index. The combination of underweighting AA-rated securities and overweighting A-rated securities was a key driver. Strong security selection in the A category had a significant impact on the Fund’s relative returns. However, the Fund’s holdings in the BBB-rated category trailed those of the Aggregate Index and detracted from relative performance.

The remaining portion of the Fund, managed by the Fund’s sub-advisor, returned 18.7%. These results trailed the 23.9% return of the ML Index. Much of the underperformance for this segment of the Fund can be attributed to less favorable security selection in two particular economic sectors. The Fund’s holdings in the Information Technology and Healthcare sectors lagged those in the ML Index. While the Fund’s positions generated strong absolute returns and generated double-digit gains, these results did not keep pace with the holdings in the ML Index.

The Manager and the Fund’s sub-advisor remain focused on the Fund’s investment objectives of generating income and capital appreciation.

Top Ten Holdings (% Net Assets)

GNR Project Loans, 3.200%, Due 11/16/2044	2.3
GNR Project Loans, 2.170%, Due 4/16/2041	2.2
Freddie Mac Gold Pool, 3.50%, Due 6/1/42	1.7
GNR Project Loans, 2.700%, Due 4/16/2043	1.7
Ally Master Owner Trust, 1.21%, Due 6/15/17	1.4
GNR Project Loans, 2.543%, Due 9/16/2044	1.3
Fannie Mae Pool, 5.00%, Due 1/1/41	1.3
National Credit Union Administration, 0.674%, Due 10/7/20	1.3
GNR Project Loans, 2.210%, Due 12/16/2035	1.3
Citigroup, Inc., 8.50%, Due 5/22/2019	1.2
Total Fund Holdings	250

Sector Weightings (% Fixed Income)

Mortgage-Backed Obligations	23.0
Finance	21.2
U.S. Treasury	15.0
Manufacturing	11.8
Service	11.5
Asset-Backed Obligations	6.2
Telecommunications	3.6
Energy	2.9
Utilities	2.4
Consumer	1.2
Transportation	1.2

Sector Weightings (% Equity)

Finance	21.5
Information Technology	15.9
Manufacturing	13.9
Financials	13.8
Energy	12.6
Transportation	4.4
Utilities	4.1
Health Care	3.5
Consumer Discretionary	3.5
Industrials	3.4
Telecommunications	3.4

Investing in debt securities entails interest rate risk, which is the risk that debt securities will decrease in value with increases in market interest rates. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

7

American Beacon Intermediate Bond Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the Intermediate Bond Fund (the “Fund”) declined 1.58% for the twelve months ended October 31, 2013, trailing the Barclays Capital Aggregate Index (the “Index”) decline of 1.08% and the Lipper Core Bond Funds Index decline of 0.70% for the same period.

Comparison of Change in Value of a $10,000 Investment

For the Period from 10/31/03 through 10/31/13

Total Returns for the Period ended 10/31/13

	1 Year			5 Years			10 Years			Value of $10,000 10/31/03- 10/31/13
Institutional Class(1,7)		-1.04	%		6.33	%		4.86	%	$	16,068
Y Class(1,3,7)		-1.42	%		6.18	%		4.78	%		15,957
Investor Class (1,2,7)		-1.58	%		5.86	%		4.62	%		15,713
A Class with sales Charge(1,4,7)		-6.35	%		4.70	%		4.05	%		14,874
A Class without sales Charge(1,4,7)		-1.69	%		5.72	%		4.56	%		15,615
C Class with sales Charge(1,5,7)		-3.51	%		5.23	%		4.31	%		15,256
C Class without sales Charge(1,5,7)		-2.51	%		5.23	%		4.31	%		15,256
Barclays Capital Agg. Index (6)		-1.08	%		6.09	%		4.78	%		15,942
Lipper Core Bond Funds Index (6)		-0.70	%		7.46	%		4.69	%		15,823

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares.

2. Fund performance for the five-year and ten-year periods represent 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 10/31/03.

3. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Institutional Class from 10/31/03 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 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 10/31/03.

4. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Institutional Class from 10/31/03 through 3/2/09, the Investor Class from 3/2/09 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Institutional and Investor Classes. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 10/31/03. The maximum sales charge for A Class is 4.75%.

5. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Institutional Class from 10/31/03 through 3/2/09, the Investor Class from 3/2/09 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Institutional and Investor Classes. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/03. The maximum contingent deferred sales charge is 1.00% for shares redeemed within one year of the date of purchase.

6. 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 Core Bond Funds Index tracks the results of the 30 largest mutual funds in the Lipper Core Bond Funds category. Lipper is an independent research and ranking service. One cannot directly invest in an index.

7. The total annual Fund operating expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, and C Class shares was 0.34%, 1.00%, 0.85%, 1.13%, and 1.88%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that is based on expenses incurred during the period covered by this report.

Prior to the deduction of expenses, the Fund outperformed the Index. On a gross of fee basis, the Fund’s added value relative to the Index was largely driven by advantageous weightings across sectors and credit quality categories.

During the period, the overweight to the Financial sector was a positive as Financial securities were one of the best performing categories in the market (up 1.8%). In addition, maintaining an underweight allocation to Treasury securities also proved beneficial.

The performance from the Fund’s Treasury securities trailed those in the Index and hampered relative returns offsetting some of the benefits from the underweight allocation. However, within the Financial sector, security selection was strong and complimented the benefit of the overweight allocation.

8

American Beacon Intermediate Bond Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Fund’s positioning within the various credit quality categories helped returns relative to the Index. The combination of underweighting AA-rated securities and overweighting A-rated securities was a key driver. Offsetting some of the positioning benefits, the Fund’s holdings in the BBB-rated category trailed those of the Index and detracted from relative performance.

The Fund’s duration positioning during the period remained similar to the duration profile of the Index. As interest rates rose in the maturity range in which the Fund has significant investments (3 – 7 years), the Fund benefited from strong issue selection that helped navigate the difficult interest rate environment.

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 (% Net Assets)

GNR Project Loans, 2.170%, Due 4/16/2041	1.7
Fannie Mae Pool, 4.50%, Due 4/1/2041	1.5
Fannie Mae Pool, 4.00%, Due 12/1/2040	1.3
Freddie Mac Gold Pool, 3.50%, Due 6/1/2042	1.1
GNR Project Loans, 1.732%, Due 5/16/2042	1.0
Freddie Mac Gold Pool, 3.500%, Due 9/1/2028	1.0
Ally Master Owner Trust, 1.21%, Due 6/15/2017	1.0
Bear Stearns Cos. LLC, 7.250%, Due 2/1/2018	1.0
Citigroup, Inc., 8.50%, Due 5/22/2019	0.9
Fannie Mae Pool, 4.000%, Due 2/1/2041	0.9
Total Fund Holdings	379

Sector Weightings (% Investments)

Mortgage-Backed Obligations	29.3
U.S. Treasury	20.3
Finance	19.9
Manufacturing	7.6
Service	5.4
Asset-Backed Obligations	4.8
Energy	4.6
Telecommunications	3.2
Utilities	2.8
Consumer	1.1
Transportation	1.0

Investing in debt securities entails interest rate risk, which is the risk that debt securities will decrease in value with increases in market interest rates. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

9

American Beacon Short-Term Bond Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Investor Class of the Short-Term Bond Fund (the “Fund”) returned 0.47% for the twelve-month period ended October 31, 2013, which underperformed the BofA Merrill Lynch 1-3 Year Gov/Corp Index (the “Index”) return of 0.85% and the Lipper Short Investment Grade Bond Funds Index (the “Lipper”) return of 0.85%.

Comparison of Change in Value of a $10,000 Investment For the Period from 10/31/03 through 10/31/13

Total Returns for the Period ended 10/31/13

	1 Year			5 Years			10 Years			Value of $10,000 10/31/03- 10/31/13
Institutional Class(1,6)		0.47	%		2.71	%		2.93	%	$	13,342
Y Class(1,2,6)		0.22	%		2.64	%		2.89	%		13,295
Investor Class(1,6)		0.03	%		2.34	%		2.46	%		12,748
A Class with sales Charge(1,3,6)		-2.55	%		1.77	%		2.17	%		12,395
A Class without sales Charge(1,3,6)		0.00	%		2.29	%		2.43	%		12,713
C Class with sales Charge(1,4,6)		-1.73	%		1.83	%		2.20	%		12,434
C Class without sales Charge(1,4,6)		-0.73	%		1.83	%		2.20	%		12,434
Lipper Short Inv. Grade Bond Funds Index (5)		0.85	%		4.10	%		2.87	%		13,275
BofA Merrill Lynch 1-3Yr. Gov./Corp Index(5)		0.85	%		2.56	%		2.97	%		13,393

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is 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.

2. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Institutional Class from 10/31/03 through 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 10/31/03.

3. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A 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 A Class been in existence since 10/31/03. The maximum sales charge for A Class is 2.50%.

4. Fund performance for the five-year and ten-year periods represent the total returns achieved by the Investor Class from 10/31/03 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/03. The maximum contingent deferred sales charge is 1.00% for shares redeemed within one year of the date of purchase.

5. 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.

6. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, and C Class shares was 0.37%, 0.72%, 0.89%, 1.12%, and 1.90%, 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.

Prior to the deduction of expenses, the Fund’s return was essentially equal to that of the Index. The Fund had overweight positions in the major credit sectors, including investment-grade Corporates and Asset-Backeds, which performed well as the economy improved and as the budget impasse in Washington was resolved. The Fund was also overweight Agency Mortgage-Backed securities which underperformed as spreads widened in response to slower prepayment speeds.

The Fund’s duration position detracted slightly from performance as interest rates ended the period nearly where they began. The Fund’s average duration of 1.2 was shorter than the Index duration of 1.8. Given the slope of the yield curve, the Fund earned slightly less income that it would have earned if its duration were neutral.

Given the unusually low levels of interest rates, we maintained a short duration to protect the Fund from an ultimate rise in rates. Although a rate increase does not appear to be imminent, the absolute low level of yields warrants a more defensive approach toward duration overall.

10

American Beacon Short-Term Bond Fund^SM

Performance Overview

October 31, 2013 (Unaudited)

The Lipper peer group continued to benefit from the outperformance of high-yield bonds. During the period, the BofA Merrill Lynch 1-3 Year US Cash Pay High Yield Index returned 7.83% versus 1.85% for the investment-grade BofA Merrill Lynch 1-3 Year US Corporate Index. The Fund, which is investment-grade only, often lags the Lipper Index during periods of strong high yield outperformance.

Given the macroeconomic backdrop, we will continue to look for opportunity in this low interest rate environment and strive to protect the Fund from volatility across the globe. We will maintain our conservative approach toward credit risk and seek to outperform over the long term on a risk-adjusted basis.

Top Ten Holdings (% Net Assets)

National Credit Union Administration, 0.674%, Due 1/8/2020	3.1
National Credit Union Administration, 0.625%, Due 3/11/20	3.1
Nissan Master Owner Trust Receivables, 0.503%, Due 2/15/18	2.2
Capital Auto Receivables Asset Trust 2013-1, 0.920%, Due 9/20/16	2.2
ING Bank N.V., 1.808%, Due 6/9/14, 144A	1.9
Volkswagen International Finance N.V., 1.15%, Due 11/20/15, 144A	1.9
Danske Bank A/S, 1.355%, Due 4/14/14, 144A	1.9
Morgan Stanley, 3.450%, Due 11/2/15	1.9
General Electric Capital Corp., 1.500%, Due 7/12/2016	1.9
AbbVie, Inc., 1.200%, Due 11/6/2015	1.9
Total Fund Holdings	84

Sector Weightings (% Investments)

Asset-Backed Obligations	25.1
Finance	24.0
U.S. Treasury	17.0
Mortgage-Backed Obligations	12.1
Manufacturing	9.4
Service	4.4
Consumer	3.1
Telecommunications	2.5
Utilities	1.1
Transportation	0.7
Energy	0.6

Investing in debt securities entails interest rate risk, which is the risk that debt securities will decrease in value with increases in market interest rates. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

11

American Beacon Funds^SM

Fund Expenses

October 31, 2013 (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 sales charges (loads) on purchase payments 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 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 May 1, 2013 through October 31, 2013.

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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

Hypothetical Example for Comparison Purposes

The 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 or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by 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.

12

American Beacon Funds^SM

Fund Expenses

October 31, 2013 (Unaudited)

High Yield Bond Fund

	Beginning Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Institutional Class
Actual	$	1,000.00	$	1,015.55	$	4.52
Hypothetical **	$	1,000.00	$	1,020.72	$	4.53
Y Class
Actual	$	1,000.00	$	1,014.00	$	4.97
Hypothetical **	$	1,000.00	$	1,020.27	$	4.99
Investor Class
Actual	$	1,000.00	$	1,013.59	$	5.38
Hypothetical **	$	1,000.00	$	1,019.86	$	5.40
A Class
Actual	$	1,000.00	$	1,013.48	$	5.68
Hypothetical **	$	1,000.00	$	1,019.56	$	5.70
AMR Class
Actual	$	1,000.00	$	1,015.88	$	3.10
Hypothetical **	$	1,000.00	$	1,022.13	$	3.11
C Class
Actual	$	1,000.00	$	1,009.46	$	9.47
Hypothetical **	$	1,000.00	$	1,015.78	$	9.50

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.89%, 0.98%, 1.06%, 1.12%, 1.87% and 0.61% for the Institutional, Y, Investor, A, C 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 (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

Retirement Income and Appreciation Fund

	Beginning Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Y Class
Actual	$	1,000.00	$	1,007.38	$	4.05
Hypothetical **	$	1,000.00	$	1,021.17	$	4.08
Investor Class
Actual	$	1,000.00	$	1,005.76	$	5.66
Hypothetical **	$	1,000.00	$	1,019.56	$	5.70
A Class
Actual	$	1,000.00	$	1,005.57	$	5.91
Hypothetical **	$	1,000.00	$	1,019.31	$	5.96
C Class
Actual	$	1,000.00	$	1,000.63	$	9.88
Hypothetical **	$	1,000.00	$	1,015.32	$	9.96

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.80%, 1.12%, 1.17% and 1.96% for the Y, Investor, A and C Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

Intermediate Bond Fund

	Beginning Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Institutional Class
Actual	$	1,000.00	$	982.35	$	1.70
Hypothetical **	$	1,000.00	$	1,023.49	$	1.73
Y Class
Actual	$	1,000.00	$	980.05	$	3.24
Hypothetical **	$	1,000.00	$	1,021.93	$	3.31
Investor Class
Actual	$	1,000.00	$	980.09	$	3.94
Hypothetical **	$	1,000.00	$	1,021.22	$	4.02
A Class
Actual	$	1,000.00	$	979.12	$	4.94
Hypothetical **	$	1,000.00	$	1,020.21	$	5.04
C Class
Actual	$	1,000.00	$	975.40	$	8.66
Hypothetical **	$	1,000.00	$	1,016.43	$	8.84

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.34%, 0.65%, 0.79%, 0.99% and 1.74% for the Institutional, Y, Investor, A and C Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

Short-Term Bond Fund

	Beginning Account Value 5/1/13		Ending Account Value 10/31/13		Expenses Paid During Period* 5/1/13-10/31/13
Institutional Class
Actual	$	1,000.00	$	999.81	$	1.92
Hypothetical **	$	1,000.00	$	1,023.29	$	1.94
Y Class
Actual	$	1,000.00	$	998.54	$	3.22
Hypothetical **	$	1,000.00	$	1,021.98	$	3.26
Investor Class
Actual	$	1,000.00	$	997.75	$	3.98
Hypothetical **	$	1,000.00	$	1,021.22	$	4.02
A Class
Actual	$	1,000.00	$	998.61	$	4.28
Hypothetical **	$	1,000.00	$	1,020.92	$	4.33
C Class
Actual	$	1,000.00	$	994.90	$	8.10
Hypothetical **	$	1,000.00	$	1,017.09	$	8.19

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.38%, 0.64%, 0.79%, 0.85% and 1.61% for the Institutional, Y, Investor, A and C Classes respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

13

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon High Yield Bond Fund, American Beacon Intermediate Bond Fund, American Beacon Retirement Income and Appreciation Fund, and American Beacon Short-Term Bond Fund:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the American Beacon High Yield Bond Fund, American Beacon Intermediate Bond Fund, American Beacon Retirement Income and Appreciation Fund, and American Beacon Short-Term Bond Fund (four of the funds constituting the American Beacon Funds) (collectively, the “Funds”), as of October 31, 2013, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of each Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the American Beacon High Yield Bond Fund, American Beacon Intermediate Bond Fund, American Beacon Retirement Income and Appreciation Fund, and American Beacon Short-Term Bond Fund at October 31, 2013, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

                                         

Dallas, Texas

December 30, 2013

14

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
COMMON STOCKS - 0.19%
CONSUMER DISCRETIONARY- 0.12%
Automobiles - 0.12%
General Motors Co.C		6,381	$	235
MANUFACTURING- 0.05%
Paper & Forest Products - 0.05%
Catalyst Paper Corp.C		8,426		9
NewPage Holdings, Inc.A C		1,200		106
Total Manufacturing				115
SERVICE- 0.01%
Other Service - 0.01%
Dex Media, Inc.C		2,606		18
TRANSPORTATION- 0.01%
Other Transportation - 0.01%
CEVA Holdings LLCA B C		22		21
Total Common Stocks (Cost $1,853)				389
RIGHTS - 0.09% (Cost $541)
TRANSPORTATION- 0.09%
Other Transportation - 0.09%
Horizon Lines, Inc., Exercise price $0.051, Expires 9/27/2036A C D		3,581,642		182
PREFERRED STOCKS - 0.18%
AGENCY- 0.03%
Federal Home Loan Mortgage Corporation - 0.03%
Federal Home Loan Mortgage Corp., 1.00%, Due 12/31/2049C E K		10,000		71
FINANCE- 0.15%
Banks - 0.15%
GMAC Capital Trust I, 1.00%, Due 2/15/2040E		11,600		311
Total Preferred Stocks (Cost $540)				382
CONVERTIBLE PREFERRED STOCKS - 0.02% (Cost $68)
TRANSPORTATION- 0.02%
Other Transportation - 0.02%
CEVA Holding LLC, Series A-2 A B C		49		45
	Par Amount
	(000’s)
CONVERTIBLE OBLIGATIONS - 0.56%
Consumer - 0.03%
CEDC Finance Corp International, Inc., 10.00%, Due 4/30/2018	$	78		68
Finance - 0.19%
E*Trade Financial Corp., 0.01%, Due 8/31/2019		240		393
Manufacturing - 0.24%
Alpha Appalachia Holdings, Inc., 3.25%, Due 8/1/2015		525		499
Transportation - 0.10%
YRC Worldwide, Inc., 10.00%, Due 3/31/2015 F		256		205
Total Convertible Obligations (Cost $1,010)				1,165
CORPORATE OBLIGATIONS - 92.92%
Consumer - 4.60%
American Rock Salt Co. LLC, 8.25%, Due 5/1/2018B G		335		325

See accompanying notes

15

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
ARAMARK Corp., 5.75%, Due 3/15/2020G	$	280	$	293
CEDC Finance Corp International, Inc., 8.00%, Due 4/30/2018F J*		173		162
Del Monte Corp., 7.625%, Due 2/15/2019		945		983
Dole Food Co., Inc., 7.25%, Due 5/1/2019G		100		101
FAGE Dairy Industry S.A., 9.875%, Due 2/1/2020G		425		460
First Quality Finance Co. Inc., 4.625%, Due 5/15/2021G		350		331
Innovation Ventures LLC, 9.50%, Due 8/15/2019B G		300		278
JBS Investments GmbH, 7.75%, Due 10/28/2020G		50		52
JBS USA LLC,
8.25%, Due 2/1/2020B G		400		429
7.25%, Due 6/1/2021B G		500		512
Libbey Glass, Inc., 6.875%, Due 5/15/2020		455		489
Marfrig Holding Europe BV, 8.375%, Due 5/9/2018G		200		189
Motors Liquidation Co., 8.375%, Due 7/15/2049 A E		1,570		—
Pinnacle Operating Corp., 9.00%, Due 11/15/2020G		295		308
Post Holdings, Inc., 7.375%, Due 2/15/2022G		400		427
Prestige Brands, Inc.,
8.25%, Due 4/1/2018		300		319
8.125%, Due 2/1/2020		205		228
Revlon Consumer Products Corp., 5.75%, Due 2/15/2021G		200		198
Reynolds Group Issuer Inc.,
8.50%, Due 5/15/2018		400		424
9.00%, Due 4/15/2019		685		732
9.875%, Due 8/15/2019		100		111
5.75%, Due 10/15/2020		605		624
8.25%, Due 2/15/2021		300		312
Simmons Foods, Inc., 10.50%, Due 11/1/2017G		350		367
Smithfield Foods, Inc., 7.75%, Due 7/1/2017		155		180
Spectrum Brands Escrow Corp., 6.625%, Due 11/15/2022G		470		501
Sun Merger Sub, Inc., 5.875%, Due 8/1/2021G		100		105
Viskase Cos., Inc., 9.875%, Due 1/15/2018G		150		159
				9,599
Energy - 16.82%
Access Midstream Partners LP, 6.125%, Due 7/15/2022H		280		300
Antero Resources Finance Corp.,
6.00%, Due 12/1/2020		575		607
5.375%, Due 11/1/2021G		200		203
Basic Energy Services, Inc., 7.75%, Due 10/15/2022		290		293
Bonanza Creek Energy, Inc., 6.75%, Due 4/15/2021		180		191
Calumet Specialty Products Partners LP, 9.375%, Due 5/1/2019H		300		332
Carrizo Oil & Gas, Inc.,
8.625%, Due 10/15/2018		300		329
7.50%, Due 9/15/2020		100		109
CGG S.A., 6.50%, Due 6/1/2021		600		623
Chaparral Energy, Inc.,
9.875%, Due 10/1/2020		475		542
8.25%, Due 9/1/2021		100		110
7.625%, Due 11/15/2022		780		842
Chesapeake Energy Corp.,
6.625%, Due 8/15/2020		400		451
6.875%, Due 11/15/2020		485		548
5.75%, Due 3/15/2023		550		583
Clayton Williams Energy, Inc., 7.75%, Due 4/1/2019		500		511
Comstock Resources, Inc.,
7.75%, Due 4/1/2019		310		324
9.50%, Due 6/15/2020		155		172
Continental Resources, Inc., 5.00%, Due 9/15/2022		280		292
Drill Rigs Holdings, Inc., 6.50%, Due 10/1/2017G		840		883
Eagle Rock Energy Partners LP, 8.375%, Due 6/1/2019H		500		514
Energy Transfer Equity LP, 7.50%, Due 10/15/2020H		700		809
EPL Oil & Gas, Inc., 8.25%, Due 2/15/2018		1,225		1,313
EV Energy Partner LP, 8.00%, Due 4/15/2019H		430		430

See accompanying notes

16

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Expro Finance Luxembourg SCA, 8.50%, Due 12/15/2016G	$	500	$	524
Forbes Energy Services Ltd., 9.00%, Due 6/15/2019		365		369
Genesis Energy LP,
7.875%, Due 12/15/2018H		80		86
5.75%, Due 2/15/2021H		355		360
Goodrich Petroleum Corp., 8.875%, Due 3/15/2019		500		526
Halcon Resources Corp.,
9.75%, Due 7/15/2020		100		109
8.875%, Due 5/15/2021		400		417
9.25%, Due 2/15/2022G		100		106
Hercules Offshore, Inc.,
10.25%, Due 4/1/2019G		910		1,027
8.75%, Due 7/15/2021G		200		220
7.50%, Due 10/1/2021G		330		345
Hilcorp Energy I LP, 7.625%, Due 4/15/2021G H		295		320
Holly Energy Partners LP, 6.50%, Due 3/1/2020H		225		236
Key Energy Services, Inc., 6.75%, Due 3/1/2021		305		310
Kinder Morgan Finance Co. LLC, 6.00%, Due 1/15/2018B G		500		544
Kinder Morgan, Inc., 5.00%, Due 2/15/2021G		100		100
Linn Energy LLC,
6.50%, Due 5/15/2019B		155		155
7.00%, Due 11/1/2019B G		100		100
8.625%, Due 4/15/2020B		700		746
7.75%, Due 2/1/2021B I		820		847
Magnum Hunter Resources Corp., 9.75%, Due 5/15/2020G		700		742
MarkWest Energy Partners LP, 4.50%, Due 7/15/2023H		510		495
MEG Energy Corp., 7.00%, Due 3/31/2024G		105		107
Memorial Production Partners LP, 7.625%, Due 5/1/2021H		310		315
Midstates Petroleum, Inc., 9.25%, Due 6/1/2021		300		309
Oasis Petroleum, Inc., 6.875%, Due 3/15/2022G		585		632
Offshore Group Investment Ltd.,
7.50%, Due 11/1/2019		505		549
7.125%, Due 4/1/2023		400		407
Pacific Drilling S.A., 5.375%, Due 6/1/2020G		350		353
Pacific Drilling V Ltd., 7.25%, Due 12/1/2017G		300		326
PBF Holding Co. LLC, 8.25%, Due 2/15/2020B		500		523
Penn Virginia Corp., 8.50%, Due 5/1/2020		615		653
Penn Virginia Resource Partners LP,
8.375%, Due 6/1/2020H		200		222
6.50%, Due 5/15/2021G H		300		309
PetroQuest Energy, Inc., 10.00%, Due 9/1/2017B		415		427
Pioneer Energy Services Corp., 9.875%, Due 3/15/2018		220		237
QEP Resources, Inc.,
5.375%, Due 10/1/2022		300		293
5.25%, Due 5/1/2023		300		289
QR Energy LP, 9.25%, Due 8/1/2020H		670		702
Quicksilver Resources, Inc.,
7.00%, Due 6/21/2019G		100		97
9.125%, Due 8/15/2019		200		195
Range Resources Corp., 5.00%, Due 3/15/2023		270		269
Regency Energy Partners LP, 6.50%, Due 7/15/2021H		225		241
Resolute Energy Corp., 8.50%, Due 5/1/2020		750		788
Rex Energy Corp., 8.875%, Due 12/1/2020		305		329
Rockies Express Pipeline LLC,
6.85%, Due 7/15/2018B G		135		127
6.00%, Due 1/15/2019B G		170		151
Sabine Pass Liquefaction LLC,
5.625%, Due 2/1/2021B G		1,005		1,015
5.625%, Due 4/15/2023B G		430		421
Samson Investment Co., 10.25%, Due 2/15/2020G		815		880
Sanchez Energy Corp., 7.75%, Due 6/15/2021G		745		760
SandRidge Energy, Inc.,
7.50%, Due 3/15/2021		665		705

See accompanying notes

17

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
8.125%, Due 10/15/2022	$	280	$	298
Talos Production LLC, 9.75%, Due 2/15/2018B G		490		495
Targa Resources Partners LP, 5.25%, Due 5/1/2023H		460		460
W&T Offshore, Inc., 8.50%, Due 6/15/2019		595		641
WPX Energy, Inc., 6.00%, Due 1/15/2022		575		604
				35,124
Finance - 10.18%
Aircastle Ltd., 6.25%, Due 12/1/2019		545		580
Algeco Scotsman Global Finance PLC, 8.50%, Due 10/15/2018G		500		536
Ally Financial, Inc.,
5.50%, Due 2/15/2017		120		130
8.00%, Due 12/31/2018		200		233
7.50%, Due 9/15/2020		1,035		1,210
A-S Co-Issuer Subsidiary, Inc., 7.875%, Due 12/15/2020G		450		466
Aviv Healthcare Properties LP,
7.75%, Due 2/15/2019H		200		216
6.00%, Due 10/15/2021G H		100		103
Bank of America Corp., 8.125%, Due 12/31/2049E		900		1,006
Bank One Capital III, 8.75%, Due 9/1/2030		275		358
CIT Group, Inc.,
5.50%, Due 2/15/2019G		100		108
5.375%, Due 5/15/2020		200		214
5.00%, Due 8/15/2022		800		810
CNL Lifestyle Properties, Inc., 7.25%, Due 4/15/2019		250		260
Denali Borrower LLC, 5.625%, Due 10/15/2020B G		170		168
E*Trade Financial Corp.,
6.75%, Due 6/1/2016		105		113
6.00%, Due 11/15/2017		360		382
6.375%, Due 11/15/2019		1,770		1,894
Fidelity & Guaranty Life Holdings, Inc., 6.375%, Due 4/1/2021G		200		209
General Electric Capital Corp., 7.125%, Due 12/31/2049E		200		223
Genworth Financial, Inc., 6.15%, Due 11/15/2066E		325		294
Geo Group, Inc.,
6.625%, Due 2/15/2021		275		291
5.125%, Due 4/1/2023		225		211
Hockey Merger Sub 2, Inc., 7.875%, Due 10/1/2021G		480		495
Icahn Enterprises LP, 6.00%, Due 8/1/2020G H		225		231
iStar Financial, Inc., 9.00%, Due 6/1/2017		570		663
JPMorgan Chase & Co., 6.00%, Due 12/31/2049		800		774
MetLife, Inc., 10.75%, Due 8/1/2069		150		224
Nationwide Mutual Insurance Co., 9.375%, Due 8/15/2039G		225		314
Neuberger Berman Group LLC, 5.875%, Due 3/15/2022B G		400		409
Nielsen Co., LUX SARL, 5.50%, Due 10/1/2021G		200		206
Nuveen Investments, Inc.,
5.50%, Due 9/15/2015		380		369
9.125%, Due 10/15/2017G		590		572
9.50%, Due 10/15/2020G		730		695
Onex USI Acquisition Corp., 7.75%, Due 1/15/2021G		300		306
Oppenheimer Holdings, Inc., 8.75%, Due 4/15/2018		400		430
Provident Funding Associates LP,
10.125%, Due 2/15/2019G H		255		284
6.75%, Due 6/15/2021G H		700		716
Realogy Group LLC, 9.00%, Due 1/15/2020B G		270		313
ROC Finance LLC, 12.125%, Due 9/1/2018B G		750		810
Royal Bank of Scotland Group PLC, 6.125%, Due 12/15/2022		800		827
SLM Corp.,
8.45%, Due 6/15/2018		300		350
5.50%, Due 1/15/2019		500		519
Synovus Financial Corp.,
5.125%, Due 6/15/2017		575		587
7.875%, Due 2/15/2019		540		614
TMX Finance LLC, 8.50%, Due 9/15/2018B G		225		239
Western Alliance Bancorp, 10.00%, Due 9/1/2015		270		291
				21,253

See accompanying notes

18

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Manufacturing - 18.99%
Abengoa Finance SAU, 8.875%, Due 11/1/2017G	$	400	$	421
Accudyne Industries Borrower / Accudyne Industries LLC, 7.75%, Due 12/15/2020G		150		157
Activision Blizzard, Inc., 5.625%, Due 9/15/2021G		300		311
Advanced Micro Devices, Inc., 7.50%, Due 8/15/2022		650		630
Ainsworth Lumber Co. Ltd, 7.50%, Due 12/15/2017G		293		317
Aleris International, Inc., 7.875%, Due 11/1/2020		360		382
Allison Transmission, Inc., 7.125%, Due 5/15/2019G		600		647
ArcelorMittal,
4.25%, Due 8/5/2015		170		176
6.00%, Due 3/1/2021E		1,000		1,048
6.75%, Due 2/25/2022E		435		473
Arch Coal, Inc.,
8.75%, Due 8/1/2016		205		205
9.875%, Due 6/15/2019		160		136
ARD Finance S.A., 11.125%, Due 6/1/2018F G		518		570
Ardagh Packaging Finance PLC,
7.00%, Due 11/15/2020G		600		597
4.875%, Due 11/15/2022G		250		246
ArvinMeritor, Inc., 10.625%, Due 3/15/2018		200		216
Ashland, Inc., 4.75%, Due 8/15/2022		505		485
Barminco Finance Property Ltd., 9.00%, Due 6/1/2018G		300		284
Blackboard, Inc., 7.75%, Due 11/15/2019G		100		101
BMC Software Finance, Inc., 8.125%, Due 7/15/2021G		775		819
BMC Software, Inc., 7.25%, Due 6/1/2018		215		223
Boart Longyear Management Property Ltd.,
10.00%, Due 10/1/2018G		180		184
7.00%, Due 4/1/2021G		230		171
Catalyst Paper Corp., 11.00%, Due 10/30/2017F K		146		83
CDW LLC, 8.50%, Due 4/1/2019B		450		498
Cemex Finance LLC, 9.375%, Due 10/12/2022B G		200		225
Cemex SAB de CV,
9.00%, Due 1/11/2018G		500		544
5.875%, Due 3/25/2019G		200		196
Chrysler Group LLC, 8.00%, Due 6/15/2019B		270		299
Consol Energy, Inc.,
8.00%, Due 4/1/2017		100		106
8.25%, Due 4/1/2020		500		547
Consolidated Container Co. LLC, 10.125%, Due 7/15/2020B G		400		432
CPG Merger Sub LLC, 8.00%, Due 10/1/2021B G		295		305
Eagle Spinco, Inc., 4.625%, Due 2/15/2021G		535		517
Eldorado Gold Corp., 6.125%, Due 12/15/2020G		630		627
Euramax International, Inc., 9.50%, Due 4/1/2016		100		99
Exopack Holding Corp., 10.00%, Due 6/1/2018		300		324
FMG Resources August 2006 Property Ltd.,
7.00%, Due 11/1/2015G		210		218
6.00%, Due 4/1/2017G		575		601
6.875%, Due 2/1/2018G		500		530
8.25%, Due 11/1/2019G		780		865
6.875%, Due 4/1/2022G		35		37
FQM Akubra, Inc., 7.50%, Due 6/1/2021G		100		106
Freescale Semiconductor, Inc.,
9.25%, Due 4/15/2018G		64		69
8.05%, Due 2/1/2020		400		431
10.75%, Due 8/1/2020		200		228
6.00%, Due 1/15/2022G		100		101
General Motors Financial Co. Inc., 3.25%, Due 5/15/2018G		300		299
Gibraltar Industries, Inc., 6.25%, Due 2/1/2021		350		362
Goodyear Tire & Rubber Co., 6.50%, Due 3/1/2021		700		740
Horsehead Holding Corp.,
10.50%, Due 6/1/2017G		530		572

See accompanying notes

19

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
INEOS Finance PLC, 8.375%, Due 2/15/2019G	$	200	$	223
INEOS Group Holdings S.A., 6.125%, Due 8/15/2018G		400		404
Inmet Mining Corp., 8.75%, Due 6/1/2020G		500		553
K Hovnanian Enterprises, Inc., 7.25%, Due 10/15/2020G		230		245
KB Home,
7.00%, Due 12/15/2021		100		103
7.50%, Due 9/15/2022		500		524
Liberty Tire Recycling LLC, 11.00%, Due 10/1/2016B G		325		332
Louisiana-Pacific Corp., 7.50%, Due 6/1/2020		425		469
M/I Homes, Inc., 8.625%, Due 11/15/2018		200		217
Manitowoc Co., Inc., 8.50%, Due 11/1/2020		150		170
Mcron Finance Sub LLC, 8.375%, Due 5/15/2019B G		135		150
MedAssets, Inc., 8.00%, Due 11/15/2018		175		189
Meritor, Inc., 6.75%, Due 6/15/2021		200		202
Midwest Vanadium Property Ltd., 11.50%, Due 2/15/2018G		200		168
Milacron LLC, 7.75%, Due 2/15/2021B G		260		272
Mueller Water Products, Inc., 7.375%, Due 6/1/2017		290		298
Murray Energy Corp., 8.625%, Due 6/15/2021G		300		321
Navistar International Corp., 8.25%, Due 11/1/2021		200		204
Norske Skogindustrier ASA, 6.125%, Due 10/15/2015G		575		397
Novelis, Inc., 8.75%, Due 12/15/2020		500		556
Nufarm Australia Ltd., 6.375%, Due 10/15/2019G		290		299
Olin Corp., 5.50%, Due 8/15/2022		400		402
Orion Engineered Carbons Bondco GmbH, 9.625%, Due 6/15/2018G		200		222
Orion Engineered Carbons Finance & Co. SCA, 9.25%, Due 8/1/2019F G		200		209
Peabody Energy Corp.,
7.375%, Due 11/1/2016		600		675
6.00%, Due 11/15/2018		155		164
6.25%, Due 11/15/2021		510		527
Perstorp Holding AB, 8.75%, Due 5/15/2017G		500		522
Pittsburgh Glass Works LLC,
8.50%, Due 4/15/2016B G		300		314
8.00%, Due 11/15/2018B G		295		301
Plastipak Holdings, Inc., 6.50%, Due 10/1/2021G		230		239
Rain CII Carbon LLC, 8.25%, Due 1/15/2021B G		300		310
Reliance Intermediate Holdings LP, 9.50%, Due 12/15/2019G H		760		833
Renaissance Acquisition Corp., 6.875%, Due 8/15/2021G		505		514
Rentech Nitrogen Partners LP, 6.50%, Due 4/15/2021G H		950		921
Rockwood Specialties Group, Inc., 4.625%, Due 10/15/2020		310		319
Sanmina Corp., 7.00%, Due 5/15/2019G		435		462
Schaeffler Finance BV, 8.50%, Due 2/15/2019G		200		225
SIWF Merger Sub, Inc., 6.25%, Due 6/1/2021G		160		161
Smurfit Kappa Treasury Funding Ltd., 7.50%, Due 11/20/2025		550		605
Sophia LP, 9.75%, Due 1/15/2019G H		250		273
SRA International, Inc., 11.00%, Due 10/1/2019		100		104
Stackpole International Intermediate Co., 7.75%, Due 10/15/2021G		575		598
Standard Pacific Corp., 6.25%, Due 12/15/2021		300		309
SunGard Data Systems, Inc., 6.625%, Due 11/1/2019		295		308
Taylor Morrison Communities, Inc.,
7.75%, Due 4/15/2020G		754		833
5.25%, Due 4/15/2021G		210		205
Terex Corp., 6.00%, Due 5/15/2021		435		454
Texas Industries, Inc., 9.25%, Due 8/15/2020		340		376
TPC Group, Inc., 8.75%, Due 12/15/2020G		565		594
TransDigm, Inc.,
7.75%, Due 12/15/2018		145		156
7.50%, Due 7/15/2021		235		256
Tronox Finance LLC, 6.375%, Due 8/15/2020B		505		515
UCI International, Inc., 8.625%, Due 2/15/2019		235		242
US Coatings Acquisition, Inc., 7.375%, Due 5/1/2021G		300		319
Viasystems, Inc., 7.875%, Due 5/1/2019G		460		490
Wolverine World Wide, Inc., 6.125%, Due 10/15/2020		210		223
Xerium Technologies, Inc., 8.875%, Due 6/15/2018		95		99
Zachry Holdings, Inc., 7.50%, Due 2/1/2020G		310		322
				39,657

See accompanying notes

20

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Service - 26.22%
Acadia Healthcare Co., Inc., 12.875%, Due 11/1/2018	$	231	$	279
ACE Cash Express, Inc., 11.00%, Due 2/1/2019G		220		196
ADT Corp., 6.25%, Due 10/15/2021G		145		154
Ahern Rentals, Inc., 9.50%, Due 6/15/2018G		560		600
Alere, Inc.,
7.25%, Due 7/1/2018		400		439
6.50%, Due 6/15/2020		725		742
AMC Entertainment, Inc., 9.75%, Due 12/1/2020		410		468
Biomet, Inc.,
6.50%, Due 8/1/2020		200		213
6.50%, Due 10/1/2020		500		520
Boyd Gaming Corp., 9.125%, Due 12/1/2018		380		413
Burlington Coat Factory Warehouse Corp., 10.00%, Due 2/15/2019		625		701
Cablevision Systems Corp., 8.00%, Due 4/15/2020		600		681
Caesars Entertainment Operating Co., Inc.,
11.25%, Due 6/1/2017		910		908
12.75%, Due 4/15/2018		625		369
8.50%, Due 2/15/2020		100		92
9.00%, Due 2/15/2020		525		492
Caesars Entertainment Resort Properties LLC, 8.00%, Due 10/1/2020B G		100		100
Carmike Cinemas, Inc., 7.375%, Due 5/15/2019		200		217
Carrols Restaurant Group, Inc., 11.25%, Due 5/15/2018		300		344
CB OnCure Holdings, Inc., 11.75%, Due 5/15/2017		325		—
CCO Holdings LLC, 5.75%, Due 9/1/2023B G		575		547
Cengage Learning Acquisitions, Inc.,
12.00%, Due 6/30/2019G K		400		54
11.50%, Due 4/15/2020G K		75		56
Cenveo Corp., 8.875%, Due 2/1/2018		950		956
Chinos Intermediate Holdings A, Inc., 7.75%, Due 5/1/2019F G		120		121
CHS/Community Health Systems, Inc.,
5.125%, Due 8/15/2018		100		104
8.00%, Due 11/15/2019		200		217
7.125%, Due 7/15/2020		300		316
Clean Harbors, Inc., 5.125%, Due 6/1/2021		275		279
Clear Channel Communications, Inc., 9.00%, Due 3/1/2021		1,920		1,934
Clear Channel Worldwide Holdings, Inc.,
7.625%, Due 3/15/2020		1,240		1,319
6.50%, Due 11/15/2022		350		365
ClubCorp Club Operations, Inc., 10.00%, Due 12/1/2018		195		216
Columbus International, Inc., 11.50%, Due 11/20/2014G		330		356
Covanta Holding Corp., 6.375%, Due 10/1/2022		250		258
Crown Media Holdings, Inc., 10.50%, Due 7/15/2019		520		585
CSC Holdings LLC, 6.75%, Due 11/15/2021B		900		981
CST Brands, Inc., 5.00%, Due 5/1/2023G		325		314
Cumulus Media Holdings, Inc., 7.75%, Due 5/1/2019		975		1,029
CyrusOne LP, 6.375%, Due 11/15/2022H		235		237
Dave & Buster’s, Inc., 11.00%, Due 6/1/2018		500		551
DaVita, Inc., 5.75%, Due 8/15/2022		200		205
DISH DBS Corp.,
7.125%, Due 2/1/2016		500		553
4.25%, Due 4/1/2018		285		289
7.875%, Due 9/1/2019		230		267
5.125%, Due 5/1/2020		230		233
6.75%, Due 6/1/2021		710		769
5.875%, Due 7/15/2022		200		205
5.00%, Due 3/15/2023		200		191
DynCorp International, Inc., 10.375%, Due 7/1/2017		430		453
EnergySolutions Inc., 10.75%, Due 8/15/2018		475		512
Entercom Radio LLC, 10.50%, Due 12/1/2019B		370		421

See accompanying notes

21

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Envision Healthcare Corp., 8.125%, Due 6/1/2019	$	300	$	326
Equinix, Inc., 5.375%, Due 4/1/2023		1,050		1,042
Felcor Lodging LP, 5.625%, Due 3/1/2023H		235		231
First Data Corp.,
8.25%, Due 1/15/2021G		800		852
11.25%, Due 1/15/2021G		100		110
12.625%, Due 1/15/2021		575		663
Fontainebleau Las Vegas Holdings LLC, 10.25%, Due 6/15/2015B E G I K		800		1
Gannett Company, Inc.,
5.125%, Due 7/15/2020G		100		102
6.375%, Due 10/15/2023G		400		422
Gray Television, Inc., 7.50%, Due 10/1/2020		905		948
Hanger Orthopedic Group, Inc., 7.125%, Due 11/15/2018		170		181
Harron Communications LP, 9.125%, Due 4/1/2020G H		175		194
HCA Holdings, Inc.,
6.25%, Due 2/15/2021		100		105
7.75%, Due 5/15/2021		500		548
HCA, Inc.,
6.50%, Due 2/15/2020		155		172
7.50%, Due 2/15/2022		400		450
5.875%, Due 3/15/2022		200		211
4.75%, Due 5/1/2023		675		650
5.875%, Due 5/1/2023		500		504
Hertz Corp.,
6.75%, Due 4/15/2019		400		432
6.25%, Due 10/15/2022		300		314
Hilton Worldwide Finance LLC, 5.625%, Due 10/15/2021B G		320		329
Hologic, Inc., 6.25%, Due 8/1/2020		300		319
inVentiv Health, Inc., 9.00%, Due 1/15/2018G		100		104
iPayment Holdings, Inc., 7.50%, Due 11/15/2018F		210		126
iPayment, Inc., 10.25%, Due 5/15/2018		375		289
Isle of Capri Casinos, Inc.,
7.75%, Due 3/15/2019		150		161
8.875%, Due 6/15/2020		245		261
Jaguar Holding Co. I, 9.375%, Due 10/15/2017F G		300		318
Jaguar Holding Co. II, 9.50%, Due 12/1/2019G		100		112
JC Penney Corp, Inc., 6.875%, Due 10/15/2015		775		662
Jo-Ann Stores Holdings, Inc., 9.75%, Due 10/15/2019F G		275		285
L Brands, Inc., 5.625%, Due 10/15/2023		320		327
Landry’s, Inc., 9.375%, Due 5/1/2020G		400		433
LIN Television Corp.,
8.375%, Due 4/15/2018		170		181
6.375%, Due 1/15/2021		200		204
Marina District Finance Co., Inc., 9.50%, Due 10/15/2015		387		406
Mediacom LLC, 7.25%, Due 2/15/2022B		220		232
MGM Resorts International,
6.625%, Due 7/15/2015		200		216
11.375%, Due 3/1/2018		300		385
8.625%, Due 2/1/2019		105		123
6.75%, Due 10/1/2020		335		365
6.625%, Due 12/15/2021		615		657
Michaels Finco Holdings, Inc., 7.50%, Due 8/1/2018F G		225		232
Midcontinent Communications & Finance Corp., 6.25%, Due 8/1/2021G		295		298
Monitronics Escrow Corp., 9.125%, Due 4/1/2020G		135		143
Monitronics International, Inc., 9.125%, Due 4/1/2020		295		313
Nara Cable Funding Ltd., 8.875%, Due 12/1/2018G		600		641
National CineMedia LLC, 7.875%, Due 7/15/2021B		100		111
NBTY, Inc., 9.00%, Due 10/1/2018		360		395
NCL Corp Ltd., 5.00%, Due 2/15/2018G		195		197
Neiman Marcus Group, Inc., 8.75%, Due 10/15/2021F G		335		344
New Look Bondco I PLC, 8.375%, Due 5/14/2018G		400		416
Nexstar Broadcasting, Inc., 6.875%, Due 11/15/2020G		495		517

See accompanying notes

22

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Nord Anglia Education UK Holdings PLC, 10.25%, Due 4/1/2017G	$	200	$	222
Nord Anglia Education, Inc., 8.50%, Due 2/15/2018F G		200		202
NPC International, Inc., 10.50%, Due 1/15/2020		350		403
OnCure Holdings, Inc., 11.75%, Due 1/15/2017		116		126
Par Pharmaceutical Cos., Inc., 7.375%, Due 10/15/2020		300		312
Petco Holdings, Inc., 8.50%, Due 10/15/2017F G		220		224
PHH Corp., 6.375%, Due 8/15/2021		275		272
Pinnacle Entertainment, Inc., 7.75%, Due 4/1/2022		355		388
PNK Finance Corp., 6.375%, Due 8/1/2021G		475		499
Radio One, Inc., 6.00%, Due 5/24/2016F		835		845
Radio Systems Corp., 8.375%, Due 11/1/2019G		200		221
Regal Cinemas Corp., 8.625%, Due 7/15/2019		400		432
Rite Aid Corp., 8.00%, Due 8/15/2020		290		325
Safway Group Holding LLC, 7.00%, Due 5/15/2018B G		300		311
Serta Simmons Holdings LLC, 8.125%, Due 10/1/2020B G		260		277
Service Corp International, 7.50%, Due 4/1/2027		350		375
Sirius XM Radio, Inc., 5.25%, Due 8/15/2022G		425		431
Starz LLC, 5.00%, Due 9/15/2019B		465		470
Tenet Healthcare Corp.,
8.00%, Due 8/1/2020		460		501
8.125%, Due 4/1/2022G		570		624
6.875%, Due 11/15/2031		250		220
TransUnion LLC, 11.375%, Due 6/15/2018B		100		111
United Rentals North America, Inc.,
7.375%, Due 5/15/2020		125		139
7.625%, Due 4/15/2022		470		526
Universal Hospital Services, Inc., 7.625%, Due 8/15/2020		410		431
Univision Communications, Inc.,
7.875%, Due 11/1/2020G		750		833
6.75%, Due 9/15/2022G		115		125
5.125%, Due 5/15/2023G		200		198
Valeant Pharmaceuticals International,
7.50%, Due 7/15/2021G		200		222
6.75%, Due 8/15/2021G		450		479
Visant Corp., 10.00%, Due 10/1/2017		590		543
VPI Escrow Corp., 6.375%, Due 10/15/2020G		920		982
WideOpenWest Finance LLC, 10.25%, Due 7/15/2019B		225		249
WMG Acquisition Corp.,
11.50%, Due 10/1/2018		285		330
6.00%, Due 1/15/2021G		325		341
Wok Acquisition Corp., 10.25%, Due 6/30/2020G		145		158
				54,728
Telecommunications - 10.73%
Avanti Communications Group PLC, 10.00%, Due 10/1/2019G		300		314
Avaya, Inc.,
9.00%, Due 4/1/2019G		450		452
10.50%, Due 3/1/2021G		250		218
Brightstar Corp., 9.50%, Due 12/1/2016G		250		275
CenturyLink, Inc., 5.80%, Due 3/15/2022		300		297
Cincinnati Bell, Inc.,
8.75%, Due 3/15/2018		865		916
8.375%, Due 10/15/2020		300		320
Clearwire Communications LLC, 12.00%, Due 12/1/2017B G		208		244
CommScope Holding Co. Inc., 6.625%, Due 6/1/2020F G		200		205
CommScope, Inc., 8.25%, Due 1/15/2019G		294		323
Consolidated Communications Finance Co., 10.875%, Due 6/1/2020		195		226
Cricket Communications, Inc., 7.75%, Due 10/15/2020		400		457
Crown Castle International Corp., 5.25%, Due 1/15/2023		385		381
Digicel Group Ltd., 8.25%, Due 9/30/2020G		500		528
Digicel Ltd., 6.00%, Due 4/15/2021G		200		194
eAccess Ltd., 8.25%, Due 4/1/2018G		300		329
EarthLink, Inc.,
8.875%, Due 5/15/2019		510		504

See accompanying notes

23

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
7.375%, Due 6/1/2020	$	480	$	476
Frontier Communications Corp.,
8.50%, Due 4/15/2020		400		457
8.75%, Due 4/15/2022		200		229
7.875%, Due 1/15/2027		100		99
Hughes Satellite Systems Corp., 7.625%, Due 6/15/2021		375		411
Intelsat Jackson Holdings S.A.,
7.25%, Due 10/15/2020		550		597
7.50%, Due 4/1/2021		300		327
6.625%, Due 12/15/2022G		610		622
Intelsat Luxembourg S.A.,
6.75%, Due 6/1/2018G		65		68
7.75%, Due 6/1/2021G		410		433
8.125%, Due 6/1/2023G		615		650
Level 3 Financing, Inc.,
10.00%, Due 2/1/2018		70		75
8.125%, Due 7/1/2019		535		590
8.625%, Due 7/15/2020		630		712
Millicom International Cellular S.A., 6.625%, Due 10/15/2021G		200		206
NII Capital Corp., 7.625%, Due 4/1/2021		495		287
Nokia OYJ, 6.625%, Due 5/15/2039		665		655
Oi S.A., 5.75%, Due 2/10/2022G		425		398
Sprint Capital Corp., 8.75%, Due 3/15/2032		395		428
Sprint Corp., 7.875%, Due 9/15/2023G		580		629
Sprint Nextel Corp.,
8.375%, Due 8/15/2017		100		116
9.00%, Due 11/15/2018G		500		606
7.00%, Due 3/1/2020G		100		111
7.00%, Due 8/15/2020		515		552
11.50%, Due 11/15/2021		980		1,275
6.00%, Due 11/15/2022		500		493
Syniverse Holdings, Inc., 9.125%, Due 1/15/2019		290		314
T-Mobile USA, Inc., 6.542%, Due 4/28/2020		300		318
UPCB Finance VI Ltd., 6.875%, Due 1/15/2022G		650		700
VimpelCom Holdings BV, 7.504%, Due 3/1/2022G		200		215
Virgin Media Finance PLC,
4.875%, Due 2/15/2022		125		106
6.375%, Due 4/15/2023G		255		261
Virgin Media Secured Finance PLC, 5.25%, Due 1/15/2021		575		583
WaveDivision Escrow LLC, 8.125%, Due 9/1/2020B G		235		247
Wind Acquisition Finance S.A.,
11.75%, Due 7/15/2017G		650		691
7.25%, Due 2/15/2018G		325		342
Wind Acquisition Holdings Finance S.A., 12.25%, Due 7/15/2017F G		626		637
Windstream Corp.,
7.50%, Due 6/1/2022		225		236
6.375%, Due 8/1/2023		75		73
				22,408
Transportation - 2.39%
Bristow Group, Inc., 6.25%, Due 10/15/2022		300		315
CEVA Group PLC, 4.00%, Due 5/1/2018G		100		87
CHC Helicopter S.A.,
9.25%, Due 10/15/2020		500		541
9.375%, Due 6/1/2021		100		101
Florida East Coast Holdings Corp., 10.50%, Due 8/1/2017F		290		302
Florida East Coast Railway Corp., 8.125%, Due 2/1/2017		300		315
HD Supply, Inc.,
7.50%, Due 7/15/2020G		590		623
11.50%, Due 7/15/2020		185		223
Horizon Lines LLC,
11.00%, Due 10/15/2016B		183		183
13.00%, Due 10/15/2016B F		231		208

See accompanying notes

24

American Beacon High Yield Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Martin Midstream Partners LP,
8.875%, Due 4/1/2018H	$	437	$	464
7.25%, Due 2/15/2021H		335		342
Quality Distribution LLC, 9.875%, Due 11/1/2018B		225		248
Swift Services Holdings, Inc., 10.00%, Due 11/15/2018		325		364
Syncreon Group BV, 8.625%, Due 11/1/2021G		400		405
Watco Cos. LLC, 6.375%, Due 4/1/2023B G		270		267
				4,988
Utilities - 2.99%
AES Corp., 9.75%, Due 4/15/2016		210		248
Calpine Corp.,
7.875%, Due 7/31/2020G		90		98
7.50%, Due 2/15/2021G		650		702
6.00%, Due 1/15/2022G		100		104
5.875%, Due 1/15/2024G		100		100
Elwood Energy LLC, 8.159%, Due 7/5/2026B		257		272
Enel S.p.A., 8.75%, Due 9/24/2073G		230		249
Energy Future Intermediate Holding Co. LLC, 10.00%, Due 12/1/2020B		575		604
InterGen N.V., 7.00%, Due 6/30/2023G		400		413
NRG Energy, Inc.,
7.625%, Due 1/15/2018		450		511
7.875%, Due 5/15/2021		635		702
Sabine Pass LNG LP,
7.50%, Due 11/30/2016H		1,205		1,345
6.50%, Due 11/1/2020H		380		397
Texas Competitive Electric Holdings Co. LLC, 11.50%, Due 10/1/2020B G		700		499
				6,244
Total Corporate Obligations (Cost $189,575)				194,001
FOREIGN GOVERNMENT OBLIGATIONS - 0.07% (Cost $158)
Energy - 0.07%
Petrobras Global Finance BV, 4.375%, Due 5/20/2023		160		148
	Shares
SHORT-TERM INVESTMENTS - 4.28% (Cost $8,940)
JPMorgan U.S. Government Money Market Fund, Capital Class		8,940,111		8,940
TOTAL INVESTMENTS - 98.31% (Cost $202,685)				205,252
OTHER ASSETS, NET OF LIABILITIES - 1.69%				3,538
TOTAL NET ASSETS - 100.00%			$	208,790

Percentages are stated as a percent of net assets.

^A  Valued at fair value pursuant to procedures approved by the Board of Trustees.

^B  Limited Liability Company.

^C  Non-income producing security.

^D  Call.

^E  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.

^F  Payment in Kind. See Note 4 in the Notes to Financial Statements.

^G  Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $74,644 or 35.75% of net assets. The Fund has no right to demand registration of these securities.

^J  Step Up/Down.

^H  Limited Partnership.

^I  Non-voting participating shares.

^J  Step Up/Down - A scheduled increase in the exercise or conversion price at which a warrant, an option, or a convertible security may be used to acquire shares of common stock.

^K  In default.

See accompanying notes

25

American Beacon Retirement Income and Appreciation Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
COMMON STOCKS - 3.33% (Cost $3,829)
CONSUMER DISCRETIONARY- 0.27%
Household Durables - 0.27%
Lennar Corp., Class A		10,100	$	359
ENERGY- 0.28%
Oil & Gas - 0.28%
Continental Resources, Inc.A		3,240		369
FINANCIALS- 1.05%
Diversified Financials - 1.05%
Citigroup, Inc.		7,145		349
Franklin Resources, Inc.		6,855		369
JPMorgan Chase & Co.		6,545		337
T. Rowe Price Group, Inc.		4,525		350
Total Financials				1,405
HEALTH CARE- 0.26%
Pharmaceuticals - 0.26%
Mylan, Inc.A		9,310		353
INDUSTRIALS- 0.26%
Construction & Engineering - 0.26%
Chicago Bridge & Iron Co. NV		4,700		348
INFORMATION TECHNOLOGY- 1.21%
Electronic Equipment & Instruments - 0.25%
Eaton Corp PLC		4,770		337
Internet Software & Services - 0.26%
eBay, Inc.A		6,515		343
Semiconductor Equipment & Products - 0.52%
Lam Research Corp.A		6,140		333
QUALCOMM, Inc.		5,180		360
				693
Software - 0.18%
TIBCO Software, Inc.A		9,625		236
Total Common Stocks (Cost $3,829)				4,443
PREFERRED STOCKS - 4.29% (Cost $5,042)
ENERGY- 0.69%
Oil & Gas - 0.69%
Chesapeake Energy Corp., 5.75%, Due 12/31/2049B		410		480
Chesapeake Energy Corp., 5.75%, Due 12/31/2049B C		369		437
Total Energy				917
FINANCE- 1.62%
Banks - 0.26%
New York Community Capital Trust V, 6.00%, Due 11/01/2051		7,070		345
Insurance - 0.62%
Maiden Holdings Ltd., 7.25%, Due 9/15/2016		3,260		153
MetLife, Inc., 5.00%, Due 3/26/2014		23,730		681
				834
Other Finance - 0.74%
AMG Capital Trust I, 5.10%, Due 4/15/2036		14,880		1,000
Total Finance				1,834
MANUFACTURING- 1.06%
Aerospace/Defense - 0.64%
United Technologies Corp., 7.50%, Due 8/1/2015		13,620		863

See accompanying notes

26

American Beacon Retirement Income and Appreciation Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
Machinery - 0.29%
Stanley Black & Decker, Inc., 4.75%, Due 11/17/2015		3,010	$	384
Metals/Mining - 0.13%
Cliffs Natural Resources, Inc., 7.00%, Due 2/1/2016		7,500		170
Total Manufacturing				1,417
TELECOMMUNICATIONS- 0.26%
Telecom - 0.26%
Crown Castle International Corp., 4.50%, Due 11/01/2016		3,340		342
TRANSPORTATION- 0.34%
Other Transportation - 0.34%
Genesee & Wyoming, Inc., 5.00%, Due 10/01/2015		3,360		449
UTILITIES- 0.32%
Electric - 0.32%
NextEra Energy, Inc., 5.60%, Due 6/1/2015		7,280		420
Total Preferred Stocks (Cost $5,042)				5,724
	Par Amount
	(000’s)
CONVERTIBLE OBLIGATIONS - 16.56%
Consumer - 0.18%
Jarden Corp., 1.50%, Due 6/15/2019 B	$	205		234
Energy - 0.93%
Hornbeck Offshore Services, Inc., 1.625%, Due 11/15/2026		390		462
Newpark Resources, Inc., 4.00%, Due 10/1/2017		360		502
SEACOR Holdings, Inc., 2.50%, Due 12/15/2027B		220		283
				1,247
Finance - 1.81%
Ares Capital Corp., 4.75%, Due 1/15/2018B		400		411
Leucadia National Corp., 3.75%, Due 4/15/2014		250		336
Molina Healthcare, Inc., 1.125%, Due 1/15/2020B		435		443
Portfolio Recovery Associates, Inc., 3.00%, Due 8/1/2020B		90		105
Walter Investment Management Corp., 4.50%, Due 11/1/2019		350		364
WellPoint, Inc., 2.75%, Due 10/15/2042B		585		760
				2,419
Manufacturing - 6.05%
Cemex SAB de CV, 4.875%, Due 3/15/2015		300		347
Cornerstone OnDemand, Inc., 1.50%, Due 7/1/2018B		110		125
Danaher Corp., 0.01%, Due 1/22/2021		210		440
Electronic Arts, Inc., 0.75%, Due 7/15/2016		625		693
Iconix Brand Group, Inc., 1.50%, Due 3/15/2018B		530		680
KB Home, 1.375%, Due 2/1/2019		200		198
Lam Research Corp., 0.50%, Due 5/15/2016		290		338
Linear Technology Corp., 3.00%, Due 5/1/2027		400		428
Medidata Solutions, Inc., 1.00%, Due 8/1/2018B		170		206
Micron Technology, Inc., 1.875%, Due 6/1/2014		260		333
NetSuite, Inc., 0.25%, Due 6/1/2018B		210		231
Nuance Communications, Inc., 2.75%, Due 8/15/2027		220		231
RTI International Metals, Inc., 3.00%, Due 12/1/2015		300		347
Salesforce.com, Inc., 0.25%, Due 4/1/2018B		745		814
SanDisk Corp., 0.50%, Due 10/15/2020B		1,020		1,039
Standard Pacific Corp., 1.25%, Due 8/1/2032		300		373
Take-Two Interactive Software, Inc.,
1.75%, Due 12/1/2016		125		149
1.00%, Due 7/1/2018		160		177
Trinity Industries, Inc., 3.875%, Due 6/1/2036		525		681
Workday, Inc., 0.75%, Due 7/15/2018B		210		237
				8,067

See accompanying notes

27

American Beacon Retirement Income and Appreciation Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Service - 7.14%
BioMarin Pharmaceutical, Inc.,
0.75%, Due 10/15/2018	$	93	$	96
1.50%, Due 10/15/2020		77		79
Chemed Corp., 1.875%, Due 5/15/2014		420		428
Concur Technologies, Inc., 0.50%, Due 6/15/2018B		210		248
Ctrip.com International Ltd., 1.25%, Due 10/15/2018B		325		338
Cubist Pharmaceuticals, Inc.,
1.125%, Due 9/1/2018B		360		389
1.875%, Due 9/1/2020B		90		97
Dealertrack Technologies, Inc., 1.50%, Due 3/15/2017		325		386
Gilead Sciences, Inc., 1.625%, Due 5/1/2016		385		1,205
Healthways, Inc., 1.50%, Due 7/1/2018B		28		22
Hologic, Inc., 2.00%, Due 12/15/2037D		580		681
Illumina, Inc., 0.25%, Due 3/15/2016B		560		697
Integra LifeSciences Holdings Corp., 1.625%, Due 12/15/2016		340		359
International Game Technology, 3.25%, Due 5/1/2014		615		680
Liberty Interactive LLC, 0.75%, Due 3/30/2043B E		360		430
Merrimack Pharmaceuticals, Inc., 4.50%, Due 7/15/2020		75		57
MGM Resorts International, 4.25%, Due 4/15/2015		529		648
Omnicom Group, Inc., 0.01%, Due 7/31/2032		570		726
priceline.com, Inc., 1.00%, Due 3/15/2018		515		682
Salix Pharmaceuticals Ltd., 1.50%, Due 3/15/2019		525		687
Shutterfly, Inc., 0.25%, Due 5/15/2018B		320		340
TIBCO Software, Inc., 2.25%, Due 5/1/2032		235		238
				9,513
Telecommunications - 0.45%
Ixia, 3.00%, Due 12/15/2015		300		336
JDS Uniphase Corp., 0.625%, Due 8/15/2033B		257		270
				606
Total Convertible Obligations (Cost $19,504)				22,086
CORPORATE OBLIGATIONS - 33.59%
Consumer - 0.95%
Altria Group, Inc., 4.75%, Due 5/5/2021		300		323
Anheuser-Busch InBev Worldwide, Inc.,
5.00%, Due 4/15/2020		290		329
8.00%, Due 11/15/2039		100		148
Kellogg Co., 1.875%, Due 11/17/2016		150		154
SABMiller Holdings, Inc., 4.95%, Due 1/15/2042B		300		307
				1,261
Energy - 1.31%
Apache Corp., 5.10%, Due 9/1/2040		130		133
BP Capital Markets PLC, 3.20%, Due 3/11/2016		280		294
Canadian Natural Resources Ltd., 6.25%, Due 3/15/2038		275		316
Devon Energy Corp., 4.75%, Due 5/15/2042		300		284
EOG Resources, Inc., 2.50%, Due 2/1/2016		250		259
TransCanada PipeLines Ltd.,
3.75%, Due 10/16/2023		300		302
6.10%, Due 6/1/2040		140		162
				1,750
Finance - 17.45%
AEGON Funding Co. LLC, 5.75%, Due 12/15/2020E		250		285
American International Group, Inc.,
6.40%, Due 12/15/2020		775		930
4.875%, Due 6/1/2022		400		438
Bank of America Corp.,
7.80%, Due 9/15/2016		600		695
7.625%, Due 6/1/2019		1,250		1,559
Bank One Corp., 4.90%, Due 4/30/2015		250		264
Barclays Bank PLC,
3.90%, Due 4/7/2015		290		303
6.75%, Due 5/22/2019		650		786
Bear Stearns Cos. LLC, 7.25%, Due 2/1/2018E		925		1,116
BNP Paribas S.A., 3.60%, Due 2/23/2016		280		296

See accompanying notes

28

American Beacon Retirement Income and Appreciation Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Citigroup, Inc.,
1.178%, Due 4/1/2014D	$	6	$	6
0.546%, Due 11/5/2014D		300		300
8.50%, Due 5/22/2019		1,250		1,618
Deutsche Bank AG, 3.875%, Due 8/18/2014		275		282
Fifth Third Bancorp, 3.625%, Due 1/25/2016		275		290
General Electric Capital Corp.,
0.443%, Due 1/8/2016D		1,145		1,142
5.625%, Due 5/1/2018		250		290
6.00%, Due 8/7/2019		300		355
5.50%, Due 1/8/2020		650		752
Goldman Sachs Group, Inc.,
5.35%, Due 1/15/2016		475		519
6.25%, Due 9/1/2017		550		636
6.00%, Due 6/15/2020		835		967
ING Bank N.V.,
5.125%, Due 5/1/2015B		300		310
3.75%, Due 3/7/2017B		1,100		1,164
JPMorgan Chase & Co.,
0.584%, Due 6/13/2016D		375		371
5.50%, Due 10/15/2040		350		381
Lincoln National Corp., 4.75%, Due 2/15/2014		105		106
Lloyds TSB Bank PLC, 4.375%, Due 1/12/2015B		300		312
Merrill Lynch & Co. Inc., 6.11%, Due 1/29/2037		275		294
MetLife, Inc., 6.375%, Due 6/15/2034		400		490
Morgan Stanley,
0.724%, Due 10/15/2015D		900		896
7.30%, Due 5/13/2019		530		647
5.625%, Due 9/23/2019		450		513
National Australia Bank Ltd., 4.375%, Due 12/10/2020B		250		271
Nordea Bank AB, 4.875%, Due 1/27/2020B		250		277
PNC Funding Corp., 4.375%, Due 8/11/2020		260		283
Prudential Financial, Inc., 7.375%, Due 6/15/2019		250		311
Simon Property Group LP, 10.35%, Due 4/1/2019F G		300		412
Svenska Handelsbanken AB, 2.875%, Due 4/4/2017		650		679
UBS AG, 5.875%, Due 12/20/2017		552		640
UnitedHealth Group, Inc., 3.875%, Due 10/15/2020		250		265
Wachovia Corp., 0.614%, Due 10/15/2016D		850		840
				23,291
Manufacturing - 4.62%
American Honda Finance Corp.,
2.125%, Due 2/28/2017B		500		511
3.875%, Due 9/21/2020B		250		264
Caterpillar Financial Services Corp., 2.75%, Due 6/24/2015		280		290
Daimler Finance North America LLC,
3.00%, Due 3/28/2016B E		150		156
0.945%, Due 8/1/2016B E		500		501
2.95%, Due 1/11/2017B E		300		312
2.40%, Due 4/10/2017B E		450		458
Dow Chemical Co., 4.125%, Due 11/15/2021		300		310
Ford Motor Credit Co. LLC,
4.25%, Due 2/3/2017E		300		324
5.875%, Due 8/2/2021E		350		401
Hewlett-Packard Co.,
2.20%, Due 12/1/2015		250		254
4.05%, Due 9/15/2022		350		341
Johnson Controls, Inc., 5.00%, Due 3/30/2020		300		331
Northrop Grumman Corp., 5.05%, Due 8/1/2019		150		169
United Technologies Corp., 6.125%, Due 7/15/2038		450		550
Volkswagen International Finance N.V., 1.625%, Due 3/22/2015B		650		658
Xerox Corp.,
8.25%, Due 5/15/2014		150		156
2.95%, Due 3/15/2017		175		180
				6,166

See accompanying notes

29

American Beacon Retirement Income and Appreciation Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Service - 3.27%
AbbVie, Inc., 2.90%, Due 11/6/2022	$	300	$	286
CBS Corp., 3.375%, Due 3/1/2022		500		489
Comcast Corp., 6.55%, Due 7/1/2039		400		493
CVS Caremark Corp., 3.25%, Due 5/18/2015		140		146
McKesson Corp., 3.25%, Due 3/1/2016		140		147
Quest Diagnostics, Inc., 4.75%, Due 1/30/2020		125		134
Thomson Reuters Corp., 4.70%, Due 10/15/2019		125		138
Time Warner Cable, Inc., 5.85%, Due 5/1/2017		650		715
Time Warner, Inc.,
4.875%, Due 3/15/2020		450		498
4.75%, Due 3/29/2021		325		353
Viacom, Inc., 4.50%, Due 2/27/2042		550		481
Wal-Mart Stores, Inc., 7.55%, Due 2/15/2030		350		475
				4,355
Telecommunications - 2.80%
America Movil SAB de CV, 6.375%, Due 3/1/2035		275		301
AT&T, Inc., 4.35%, Due 6/15/2045		473		391
Deutsche Telekom International Finance BV, 4.875%, Due 3/6/2042B		850		820
Orange S.A., 2.125%, Due 9/16/2015		125		127
Verizon Communications, Inc.,
5.50%, Due 4/1/2017		250		282
4.60%, Due 4/1/2021		340		365
6.90%, Due 4/15/2038		325		385
6.55%, Due 9/15/2043		550		638
Vodafone Group PLC, 6.15%, Due 2/27/2037		375		420
				3,729
Transportation - 1.05%
Burlington Northern Santa Fe LLC,
5.75%, Due 5/1/2040E		140		155
5.15%, Due 9/1/2043E		300		309
Canadian National Railway Co., 5.55%, Due 5/15/2018		250		289
CSX Corp., 5.50%, Due 4/15/2041		250		268
Norfolk Southern Corp., 5.75%, Due 4/1/2018		325		376
				1,397
Utilities - 2.14%
Commonwealth Edison Co., 4.00%, Due 8/1/2020		135		145
Consolidated Edison Co. of New York, Inc., 5.50%, Due 12/1/2039		300		339
EDF S.A., 4.60%, Due 1/27/2020B		300		331
MidAmerican Energy Holdings Co., 6.125%, Due 4/1/2036		500		567
Pacific Gas & Electric Co., 6.25%, Due 12/1/2013		175		176
Progress Energy, Inc., 4.875%, Due 12/1/2019		350		389
Southern Co., 1.95%, Due 9/1/2016		310		316
Southwestern Electric Power Co., 3.55%, Due 2/15/2022		600		589
				2,852
Total Corporate Obligations (Cost $41,738)				44,801
FOREIGN GOVERNMENT OBLIGATIONS - 0.41%
Energy - 0.41%
Petrobras International Finance Co., 3.875%, Due 1/27/2016		200		207
Petroleos Mexicanos, 6.00%, Due 3/5/2020		300		337
Total Foreign Government Obligations (Cost $497)				544
ASSET-BACKED OBLIGATIONS - 5.58%
Ally Master Owner Trust, 1.21%, Due 6/15/2017, 2012 3 A2		1,800		1,811
Ford Credit Floorplan Master Owner Trust, 1.50%, Due 9/15/2018, 2013-5 A1		1,200		1,213
National Credit Union Administration,
0.574%, Due 3/11/2020, 2011 R3 1AD		1,611		1,612
0.624%, Due 10/7/2020, 2010 R1 1AD		1,701		1,709
Nissan Master Owner Trust Receivables, 0.644%, Due 5/15/2017, 2012 A AD		1,100		1,102
Total Asset-Backed Obligations (Cost $7,420)				7,447

See accompanying notes

30

American Beacon Retirement Income and Appreciation Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 12.02%
Banc of America Commercial Mortgage Trust,
5.317%, Due 9/10/2047, 2006-5 A2	$	175	$	176
5.633%, Due 4/10/2049, 2007-2 A2		54		55
GNR Project Loans,
1.692%, Due 11/16/2035, 2010-148 A		134		135
2.21%, Due 12/16/2035, 2011-31 A		1,738		1,752
2.989%, Due 3/16/2039, 2010-71 AC		174		176
2.17%, Due 4/16/2041, 2012 44 A		2,910		2,922
2.70%, Due 4/16/2043, 2011-109 AB		2,202		2,254
2.543%, Due 9/16/2044, 2011-96 AC		1,715		1,747
3.20%, Due 11/16/2044, 2011-92 B		2,900		3,014
GS Mortgage Securities Corp II,
3.849%, Due 12/10/2043, 2010-C2 A1B		603		638
3.645%, Due 3/10/2044, 2011-GC3 A2B		750		789
JP Morgan Chase Commercial Mortgage Securities Corp.,
4.678%, Due 7/15/2042, 2005-LDP2 A3A		78		78
3.853%, Due 6/15/2043, 2010-C1 A1B		510		530
4.388%, Due 2/15/2046, 2011-C3 A3B		650		709
5.706%, Due 2/12/2049, 2007-CB19 A4		400		448
5.629%, Due 2/12/2051, 2007-CB20 A2		36		36
LB-UBS Commercial Mortgage Trust, 5.424%, Due 2/15/2040, 2007-C1 A4		450		500
Wachovia Bank Commercial Mortgage Trust, 5.728%, Due 6/15/2049, 2007-C32 A2		68		70
Total Non-Agency Mortgage-Backed Obligations (Cost $15,753)				16,029
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 8.90%
Federal Home Loan Mortgage Corporation - 4.68%
5.00%, Due 2/1/2021		160		170
4.50%, Due 4/1/2021		164		173
5.00%, Due 9/1/2035		414		447
5.50%, Due 4/1/2037		108		116
5.00%, Due 3/1/2038		194		209
5.50%, Due 5/1/2038		164		177
0.574%, Due 12/15/2040 D		579		580
4.00%, Due 1/1/2041		1,006		1,056
4.50%, Due 2/1/2041		937		1,000
3.50%, Due 6/1/2042		2,267		2,320
				6,248
Federal National Mortgage Association - 3.46%
3.50%, Due 1/1/2026		233		247
6.50%, Due 7/1/2032		104		116
5.50%, Due 6/1/2033		164		180
4.50%, Due 9/1/2034		89		95
5.50%, Due 12/1/2035		175		191
5.00%, Due 2/1/2036		141		153
5.50%, Due 4/1/2036		243		265
5.50%, Due 2/1/2037		158		172
6.00%, Due 9/1/2037		97		106
6.00%, Due 1/1/2038		144		157
4.50%, Due 1/1/2040		637		682
4.00%, Due 9/1/2040		483		509
4.00%, Due 1/1/2041		1,649		1,737
				4,610
Government National Mortgage Association - 0.76%
6.00%, Due 2/15/2033		310		351
5.50%, Due 4/15/2033		357		394
5.00%, Due 5/15/2033		244		268
				1,013
Total U.S. Agency Mortgage-Backed Obligations (Cost $11,364)				11,871

See accompanying notes

31

American Beacon Retirement Income and Appreciation Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
U.S. TREASURY OBLIGATIONS—13.61%
2.50%, Due 3/31/2015	$	500	$	516
0.25%, Due 12/15/2015		1,000		998
1.50%, Due 6/30/2016		1,000		1,027
3.125%, Due 10/31/2016		1,000		1,075
0.875%, Due 1/31/2017		3,000		3,016
0.75%, Due 12/31/2017		1,000		988
1.50%, Due 8/31/2018		3,000		3,033
1.125%, Due 5/31/2019		3,000		2,936
1.25%, Due 2/29/2020		1,000		969
2.00%, Due 2/15/2022		1,000		980
6.25%, Due 8/15/2023		800		1,064
6.875%, Due 8/15/2025		250		354
5.25%, Due 11/15/2028		550		693
4.75%, Due 2/15/2037		420		506
Total U.S. Treasury Obligations (Cost $17,866)				18,155
	Shares
SHORT-TERM INVESTMENTS - 1.10% (Cost $1,471)
JPMorgan U.S. Government Money Market Fund, Capital Class		1,470,560		1,471
TOTAL INVESTMENTS - 99.39% (Cost $124,484)				132,571
OTHER ASSETS, NET OF LIABILITIES - 0.61%				819
TOTAL NET ASSETS - 100.00%			$	133,390

Percentages are stated as a percent of net assets.

^A  Non-income producing security.

^B  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 $18,634 or 13.97% of net assets. The Fund has no right to demand registration of these securities.

^C  Non-voting participating shares.

^D  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.

^E  Limited Liability Company.

^F  Limited Partnership.

^G  REIT – Real Estate Investment Trust.

See accompanying notes

32

American Beacon Intermediate Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
CORPORATE OBLIGATIONS - 42.96%
Consumer - 1.02%
Altria Group, Inc., 4.75%, Due 5/5/2021	$	390	$	420
Anheuser-Busch InBev Worldwide, Inc.,
5.00%, Due 4/15/2020		380		432
8.00%, Due 11/15/2039		175		258
ConAgra Foods, Inc., 3.20%, Due 1/25/2023		420		401
Diageo Capital PLC, 1.50%, Due 5/11/2017		1,075		1,080
Kellogg Co., 1.875%, Due 11/17/2016		200		205
Kraft Foods Group, Inc., 1.625%, Due 6/4/2015		275		279
SABMiller Holdings, Inc., 4.95%, Due 1/15/2042A		400		409
				3,484
Energy - 3.89%
Apache Corp., 5.10%, Due 9/1/2040		200		204
BP Capital Markets PLC,
3.20%, Due 3/11/2016		400		421
4.50%, Due 10/1/2020		480		526
2.50%, Due 11/6/2022		665		615
Cameron International Corp., 6.375%, Due 7/15/2018		480		566
Canadian Natural Resources Ltd.,
3.45%, Due 11/15/2021		550		553
6.25%, Due 3/15/2038		360		414
ConocoPhillips, 6.65%, Due 7/15/2018		825		996
Devon Energy Corp., 4.75%, Due 5/15/2042		400		378
Energy Transfer Partners LP,
8.50%, Due 4/15/2014B		485		501
9.00%, Due 4/15/2019B		410		525
Enterprise Products Operating LLC, 6.125%, Due 10/15/2039C		390		437
EOG Resources, Inc., 2.50%, Due 2/1/2016		425		441
Halliburton Co., 3.25%, Due 11/15/2021		670		675
Husky Energy, Inc., 3.95%, Due 4/15/2022		690		703
Marathon Oil Corp., 6.00%, Due 10/1/2017		475		547
Phillips 66,
1.95%, Due 3/5/2015		355		361
4.30%, Due 4/1/2022		435		452
Pride International, Inc., 6.875%, Due 8/15/2020		295		354
Shell International Finance BV, 0.625%, Due 12/4/2015		730		730
Spectra Energy Capital LLC,
5.668%, Due 8/15/2014C		320		332
5.65%, Due 3/1/2020C		595		652
Spectra Energy Partners LP, 4.60%, Due 6/15/2021B		235		248
The Williams Cos., Inc., 3.70%, Due 1/15/2023		225		207
TransCanada PipeLines Ltd.,
3.75%, Due 10/16/2023		400		403
7.625%, Due 1/15/2039		395		535
6.10%, Due 6/1/2040		290		336
Valero Energy Corp., 9.375%, Due 3/15/2019		170		222
				13,334
Finance - 18.96%
AEGON Funding Co. LLC, 5.75%, Due 12/15/2020C		400		456
American Express Co., 4.05%, Due 12/3/2042		438		392
American Express Credit Corp.,
1.75%, Due 6/12/2015		640		651
1.30%, Due 7/29/2016		455		459
American International Group, Inc.,
6.40%, Due 12/15/2020		800		960
4.875%, Due 6/1/2022		1,000		1,095
Bank of America Corp.,
7.80%, Due 9/15/2016		700		811
2.60%, Due 1/15/2019		520		524
7.625%, Due 6/1/2019		1,695		2,113
5.70%, Due 1/24/2022		2,000		2,296

See accompanying notes

33

American Beacon Intermediate Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Bank of New York Mellon Corp., 2.30%, Due 7/28/2016	$	800	$	830
Bank of Nova Scotia, 0.75%, Due 10/9/2015		540		541
Bank One Corp., 4.90%, Due 4/30/2015		500		528
Barclays Bank PLC,
3.90%, Due 4/7/2015		380		397
6.75%, Due 5/22/2019		650		786
Bear Stearns Cos. LLC, 7.25%, Due 2/1/2018C		2,845		3,430
Berkshire Hathaway Finance Corp., 0.95%, Due 8/15/2016		450		451
BNP Paribas S.A., 3.60%, Due 2/23/2016		400		423
Boston Properties LP, 3.125%, Due 9/1/2023B		410		384
Branch Banking & Trust Co., 1.45%, Due 10/3/2016		675		683
Canadian Imperial Bank of Commerce, 2.35%, Due 12/11/2015		850		878
Capital One Financial Corp., 2.15%, Due 3/23/2015		635		646
Citigroup, Inc.,
1.178%, Due 4/1/2014D		8		8
0.546%, Due 11/5/2014D		380		380
1.70%, Due 7/25/2016		465		470
4.45%, Due 1/10/2017		1,000		1,087
8.50%, Due 5/22/2019		2,475		3,202
5.875%, Due 1/30/2042		500		574
CNA Financial Corp., 7.35%, Due 11/15/2019		480		592
Deutsche Bank AG, 3.875%, Due 8/18/2014		400		411
ERP Operating LP, 3.00%, Due 4/15/2023B		290		275
Fifth Third Bancorp, 3.625%, Due 1/25/2016		400		422
General Electric Capital Corp.,
0.443%, Due 1/8/2016D		1,300		1,297
5.625%, Due 5/1/2018		375		435
6.00%, Due 8/7/2019		350		414
5.50%, Due 1/8/2020		800		926
5.30%, Due 2/11/2021		250		278
3.15%, Due 9/7/2022		755		739
5.875%, Due 1/14/2038		365		412
Goldman Sachs Group, Inc.,
5.35%, Due 1/15/2016		800		874
6.25%, Due 9/1/2017		800		925
5.95%, Due 1/18/2018		665		763
6.00%, Due 6/15/2020		990		1,146
5.75%, Due 1/24/2022		500		567
HCP, Inc., 5.375%, Due 2/1/2021		500		553
Health Care REIT, Inc.,
4.125%, Due 4/1/2019E		350		372
5.25%, Due 1/15/2022E		340		368
Humana, Inc., 3.15%, Due 12/1/2022		595		561
ING Bank N.V.,
5.125%, Due 5/1/2015A		250		259
3.75%, Due 3/7/2017A		1,500		1,586
JPMorgan Chase & Co.,
0.584%, Due 6/13/2016D		480		475
3.15%, Due 7/5/2016		1,000		1,050
5.50%, Due 10/15/2040		425		463
KeyCorp, 5.10%, Due 3/24/2021		385		427
Liberty Mutual Group, Inc., 5.00%, Due 6/1/2021A		390		421
Lincoln National Corp., 4.75%, Due 2/15/2014		50		51
Lloyds TSB Bank PLC, 4.375%, Due 1/12/2015A		375		390
Loews Corp., 5.25%, Due 3/15/2016		1,145		1,261
Merrill Lynch & Co. Inc.,
6.40%, Due 8/28/2017		870		1,011
6.11%, Due 1/29/2037		360		385
MetLife, Inc., 6.375%, Due 6/15/2034		500		612
Morgan Stanley,
0.724%, Due 10/15/2015D		1,180		1,175
1.75%, Due 2/25/2016		480		485
7.30%, Due 5/13/2019		1,120		1,368

See accompanying notes

34

American Beacon Intermediate Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
5.625%, Due 9/23/2019	$	600	$	685
3.75%, Due 2/25/2023		480		474
National Australia Bank Ltd., 4.375%, Due 12/10/2020A		425		460
Nordea Bank AB, 4.875%, Due 1/27/2020A		450		499
PNC Funding Corp.,
4.25%, Due 9/21/2015		525		559
4.375%, Due 8/11/2020		410		445
3.30%, Due 3/8/2022		515		509
Prudential Financial, Inc., 7.375%, Due 6/15/2019		450		560
Rabobank Nederland, 2.125%, Due 10/13/2015		225		231
Royal Bank of Canada,
1.15%, Due 3/13/2015		295		298
0.625%, Due 12/5/2016		515		515
Simon Property Group LP,
6.125%, Due 5/30/2018B		665		786
10.35%, Due 4/1/2019B		375		515
State Street Corp., 2.875%, Due 3/7/2016		770		808
SunTrust Banks, Inc., 3.50%, Due 1/20/2017		525		557
Svenska Handelsbanken AB, 2.875%, Due 4/4/2017		800		836
Toronto Dominion Bank, 2.625%, Due 9/10/2018		230		238
Trinity Acquisition PLC, 4.625%, Due 8/15/2023		345		349
UBS AG, 5.875%, Due 12/20/2017		1,163		1,349
UnitedHealth Group, Inc.,
1.625%, Due 3/15/2019		415		404
3.875%, Due 10/15/2020		425		451
3.95%, Due 10/15/2042		290		253
US Bancorp, 1.65%, Due 5/15/2017		595		600
Ventas Realty LP, 5.70%, Due 9/30/2043B		220		231
Wachovia Corp.,
0.614%, Due 10/15/2016D		1,300		1,284
5.75%, Due 2/1/2018		640		747
WellPoint, Inc., 4.35%, Due 8/15/2020		710		763
Wells Fargo & Co., 2.15%, Due 1/15/2019		305		306
				64,916
Manufacturing - 7.21%
ABB Finance USA, Inc., 2.875%, Due 5/8/2022		320		312
Altera Corp.,
1.75%, Due 5/15/2017		260		258
2.50%, Due 11/15/2018		230		229
American Honda Finance Corp.,
2.125%, Due 2/28/2017A		1,000		1,023
3.875%, Due 9/21/2020A		500		528
Analog Devices, Inc., 3.00%, Due 4/15/2016		425		445
Apple, Inc., 2.40%, Due 5/3/2023		915		837
Applied Materials, Inc., 2.65%, Due 6/15/2016		545		567
BHP Billiton Finance USA Ltd., 1.625%, Due 2/24/2017		435		440
CA, Inc., 4.50%, Due 8/15/2023		480		482
Caterpillar Financial Services Corp.,
1.10%, Due 5/29/2015		495		499
2.75%, Due 6/24/2015		380		393
1.625%, Due 6/1/2017		570		576
Cooper US, Inc., 3.875%, Due 12/15/2020		505		526
Cummins, Inc., 3.65%, Due 10/1/2023		540		550
Daimler Finance North America LLC,
3.00%, Due 3/28/2016A C		190		198
2.95%, Due 1/11/2017A C		2,400		2,494
Dow Chemical Co.,
4.25%, Due 11/15/2020		255		272
4.125%, Due 11/15/2021		400		413
Eaton Corp., PLC,
5.60%, Due 5/15/2018		380		434
2.75%, Due 11/2/2022A		255		239
EMC Corp., 1.875%, Due 6/1/2018		750		753

See accompanying notes

35

American Beacon Intermediate Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Ford Motor Credit Co. LLC,
4.25%, Due 2/3/2017C	$	700	$	756
5.875%, Due 8/2/2021C		600		687
Hewlett-Packard Co.,
2.20%, Due 12/1/2015		425		433
4.05%, Due 9/15/2022		350		340
Intel Corp.,
1.35%, Due 12/15/2017		745		741
3.30%, Due 10/1/2021		340		343
John Deere Capital Corp.,
1.05%, Due 10/11/2016		450		452
1.30%, Due 3/12/2018		550		545
Johnson Controls, Inc., 5.00%, Due 3/30/2020		480		530
Koninklijke Philips Electronics N.V., 5.75%, Due 3/11/2018		535		621
LYB International Finance BV, 4.00%, Due 7/15/2023		250		252
Northrop Grumman Corp., 5.05%, Due 8/1/2019		200		226
Oracle Corp., 1.20%, Due 10/15/2017		550		543
PACCAR Financial Corp., 1.15%, Due 8/16/2016		480		482
Precision Castparts Corp., 0.70%, Due 12/20/2015		340		339
Rio Tinto Finance USA Ltd., 2.50%, Due 5/20/2016		505		522
Teck Resources Ltd., 6.00%, Due 8/15/2040		160		153
Toyota Motor Credit Corp., 2.05%, Due 1/12/2017		480		492
Tyco Electronics Group S.A.,
1.60%, Due 2/3/2015		320		323
6.55%, Due 10/1/2017		365		423
United Technologies Corp.,
1.80%, Due 6/1/2017		1,030		1,049
6.125%, Due 7/15/2038		600		733
Volkswagen International Finance N.V., 1.625%, Due 3/22/2015A		850		860
Xerox Corp.,
8.25%, Due 5/15/2014		190		197
2.95%, Due 3/15/2017		175		180
				24,690
Service - 5.18%
AbbVie, Inc.,
1.20%, Due 11/6/2015		455		458
2.90%, Due 11/6/2022		815		777
Baxter International, Inc., 1.85%, Due 1/15/2017		375		385
Becton Dickinson and Co., 3.25%, Due 11/12/2020		480		491
Cardinal Health, Inc., 3.20%, Due 3/15/2023		590		560
CBS Corp., 3.375%, Due 3/1/2022		1,000		977
Celgene Corp., 5.25%, Due 8/15/2043		240		242
Comcast Corp.,
5.875%, Due 2/15/2018		740		865
6.55%, Due 7/1/2039		800		987
Covidien International Finance S.A., 2.80%, Due 6/15/2015		340		351
CVS Caremark Corp., 3.25%, Due 5/18/2015		190		197
DIRECTV Holdings LLC, 6.35%, Due 3/15/2040C		225		232
eBay, Inc., 1.35%, Due 7/15/2017		435		434
Genzyme Corp., 5.00%, Due 6/15/2020		235		263
Gilead Sciences, Inc., 2.40%, Due 12/1/2014		475		484
GlaxoSmithKline Capital PLC, 1.50%, Due 5/8/2017		710		717
Home Depot, Inc., 2.70%, Due 4/1/2023		225		213
Lowe’s Companies, Inc., 3.875%, Due 9/15/2023		990		1,020
McKesson Corp., 3.25%, Due 3/1/2016		200		210
Novartis Capital Corp., 2.90%, Due 4/24/2015		340		353
Quest Diagnostics, Inc., 4.75%, Due 1/30/2020		225		241
Sanofi,
1.25%, Due 4/10/2018		730		719
4.00%, Due 3/29/2021		320		343
St Jude Medical, Inc., 2.50%, Due 1/15/2016		595		611
Teva Pharmaceutical Finance II, 3.00%, Due 6/15/2015		550		569

See accompanying notes

36

American Beacon Intermediate Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Thomson Reuters Corp., 4.70%, Due 10/15/2019	$	225	$	248
Time Warner Cable, Inc.,
5.85%, Due 5/1/2017		1,300		1,432
6.75%, Due 7/1/2018		125		141
4.50%, Due 9/15/2042		500		375
Time Warner, Inc.,
4.875%, Due 3/15/2020		1,090		1,206
4.75%, Due 3/29/2021		350		380
Viacom, Inc., 4.50%, Due 2/27/2042		500		437
Walgreen Co., 3.10%, Due 9/15/2022		300		286
Wal-Mart Stores, Inc., 7.55%, Due 2/15/2030		400		544
				17,748
Telecommunications - 3.07%
America Movil SAB de CV, 6.375%, Due 3/1/2035		375		410
AT&T, Inc.,
0.80%, Due 12/1/2015		640		639
5.35%, Due 9/1/2040		338		329
5.55%, Due 8/15/2041		1,000		1,000
4.35%, Due 6/15/2045		448		370
Cellco Partnership, 8.50%, Due 11/15/2018		580		746
Deutsche Telekom International Finance BV, 4.875%, Due 3/6/2042A		850		821
Orange S.A.,
4.375%, Due 7/8/2014		385		394
2.125%, Due 9/16/2015		225		229
Verizon Communications, Inc.,
5.50%, Due 4/1/2017		500		564
4.60%, Due 4/1/2021		780		838
3.50%, Due 11/1/2021		350		349
5.15%, Due 9/15/2023		240		260
6.40%, Due 9/15/2033		450		509
6.90%, Due 4/15/2038		500		592
6.55%, Due 9/15/2043		850		986
Vodafone Group PLC,
1.625%, Due 3/20/2017		640		641
6.15%, Due 2/27/2037		760		851
				10,528
Transportation - 0.98%
Burlington Northern Santa Fe LLC,
7.95%, Due 8/15/2030C		320		424
5.75%, Due 5/1/2040C		190		210
5.15%, Due 9/1/2043C		500		515
Canadian National Railway Co., 5.55%, Due 5/15/2018		400		463
CSX Corp.,
3.70%, Due 11/1/2023		685		684
5.50%, Due 4/15/2041		425		455
Norfolk Southern Corp., 5.75%, Due 4/1/2018		300		347
United Parcel Service, Inc., 1.125%, Due 10/1/2017		265		263
				3,361
Utilities - 2.65%
Commonwealth Edison Co., 4.00%, Due 8/1/2020		190		205
Consolidated Edison Co. of New York, Inc., 5.50%, Due 12/1/2039		350		395
Duke Energy Indiana, Inc., 6.05%, Due 6/15/2016		450		506
EDF S.A., 4.60%, Due 1/27/2020A		580		640
MidAmerican Energy Holdings Co., 6.125%, Due 4/1/2036		1,000		1,133
National Rural Utilities Cooperative Finance Corp., 5.45%, Due 4/10/2017		505		573
Pacific Gas & Electric Co., 6.25%, Due 12/1/2013		150		151
Progress Energy, Inc.,
4.875%, Due 12/1/2019		450		501
4.40%, Due 1/15/2021		1,000		1,072
Sempra Energy, 6.50%, Due 6/1/2016		340		385
Sierra Pacific Power Co., 3.375%, Due 8/15/2023		240		240
Southern Co., 1.95%, Due 9/1/2016		380		388
Southwestern Electric Power Co., 3.55%, Due 2/15/2022		800		785

See accompanying notes

37

American Beacon Intermediate Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Union Electric Co., 6.70%, Due 2/1/2019	$	510	$	616
Xcel Energy, Inc., 5.613%, Due 4/1/2017		1,321		1,474
				9,064
Total Corporate Obligations (Cost $141,472)				147,125
FOREIGN GOVERNMENT OBLIGATIONS - 0.53%
Energy - 0.53%
Petrobras International Finance Co.,
3.875%, Due 1/27/2016		300		310
3.50%, Due 2/6/2017		340		345
5.375%, Due 1/27/2021		500		509
6.875%, Due 1/20/2040		245		245
Petroleos Mexicanos, 6.00%, Due 3/5/2020		375		421
Total Foreign Government Obligations (Cost $1,807)				1,830
ASSET-BACKED OBLIGATIONS - 4.63%
Ally Master Owner Trust, 1.21%, Due 6/15/2017, 2012 3 A2		3,500		3,523
Citibank Credit Card Issuance Trust, 1.11%, Due 7/23/2018, 2013 A3 A3		1,650		1,659
CNH Equipment Trust,
2.04%, Due 10/17/2016, 2011-A A4		470		477
0.94%, Due 5/15/2017, 2012 A A3		719		721
Ford Credit Auto Lease Trust, 0.60%, Due 3/15/2016, 2013-A A3		550		550
Ford Credit Floorplan Master Owner Trust, 1.50%, Due 9/15/2018, 2013-5 A1		1,700		1,718
National Credit Union Administration,
0.574%, Due 3/11/2020, 2011 R3 1AD		2,519		2,520
0.624%, Due 10/7/2020, 2010 R1 1AD		1,815		1,823
Nissan Auto Lease Trust, 0.58%, Due 11/16/2015, 2012 B A3		1,155		1,154
Nissan Master Owner Trust Receivables, 0.644%, Due 5/15/2017, 2012 A AD		1,700		1,703
Total Asset-Backed Obligations (Cost $15,794)				15,848
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 8.58%
Banc of America Commercial Mortgage Trust,
5.317%, Due 9/10/2047, 2006-5 A2		247		248
5.633%, Due 4/10/2049, 2007-2 A2		70		71
Bear Stearns Commercial Mortgage Securities,
5.201%, Due 12/11/2038, 2006-PW14 A4		790		870
5.54%, Due 9/11/2041, 2006-PW13 A4		1,285		1,407
GNR Project Loans,
2.012%, Due 7/16/2035, 2011-144 AB		1,566		1,576
1.692%, Due 11/16/2035, 2010-148 A		193		194
2.174%, Due 7/16/2038, 2011-147 A		2,870		2,904
2.989%, Due 3/16/2039, 2010-71 AC		250		252
2.17%, Due 4/16/2041, 2012 44 A		5,819		5,844
1.732%, Due 5/16/2042, 2012 70 A		3,396		3,369
2.70%, Due 4/16/2043, 2011-109 AB		2,202		2,254
2.543%, Due 9/16/2044, 2011-96 AC		1,397		1,423
3.20%, Due 11/16/2044, 2011-92 B		2,700		2,807
GS Mortgage Securities Corp II,
3.679%, Due 8/10/2043, 2010-C1 A1A		490		520
3.849%, Due 12/10/2043, 2010-C2 A1A		742		785
3.645%, Due 3/10/2044, 2011-GC3 A2A		750		788
JP Morgan Chase Commercial Mortgage Securities Corp.,
4.678%, Due 7/15/2042, 2005-LDP2 A3A		110		110
3.853%, Due 6/15/2043, 2010-C1 A1A		696		722
4.388%, Due 2/15/2046, 2011-C3 A3A		800		873
4.625%, Due 3/15/2046, 2005-LDP1 A2		40		40
5.706%, Due 2/12/2049, 2007-CB19 A4		550		616
5.629%, Due 2/12/2051, 2007-CB20 A2		50		50

See accompanying notes

38

American Beacon Intermediate Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
JPMBB Commercial Mortgage Securities Trust 2013-C12, 3.157%, Due 7/15/2045, 2013 C12 ASB	$	935	$	949
LB-UBS Commercial Mortgage Trust, 5.424%, Due 2/15/2040, 2007-C1 A4		550		611
Wachovia Bank Commercial Mortgage Trust, 5.728%, Due 6/15/2049, 2007-C32 A2		108		111
Total Non-Agency Mortgage-Backed Obligations (Cost $28,838)				29,394
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 19.29%
Federal Home Loan Mortgage Corporation - 4.26%
4.50%, Due 3/1/2019		98		103
5.00%, Due 10/1/2020		243		258
3.50%, Due 9/1/2028		3,156		3,334
5.00%, Due 8/1/2033		145		157
5.50%, Due 2/1/2034		197		215
6.00%, Due 8/1/2034		104		116
5.00%, Due 8/1/2035		82		89
5.00%, Due 9/1/2035		207		224
5.50%, Due 4/1/2037		108		116
5.00%, Due 3/1/2038		143		154
5.50%, Due 5/1/2038		205		222
5.50%, Due 6/1/2038		132		143
5.00%, Due 4/1/2040		2,069		2,239
0.574%, Due 12/15/2040 D		772		773
4.00%, Due 1/1/2041		950		998
4.50%, Due 2/1/2041		702		750
3.50%, Due 3/1/2042		820		839
3.50%, Due 6/1/2042		3,778		3,863
				14,593
Federal National Mortgage Association - 13.63%
6.50%, Due 2/1/2017		38		40
5.00%, Due 12/1/2017		126		134
4.50%, Due 9/1/2018		278		296
4.00%, Due 8/1/2020		60		63
3.50%, Due 1/1/2026		280		296
4.00%, Due 5/1/2026		199		211
4.00%, Due 6/1/2026		2,271		2,431
3.00%, Due 8/1/2027		716		744
3.00%, Due 11/1/2027		1,397		1,453
3.50%, Due 1/1/2028		2,947		3,114
5.00%, Due 3/1/2034		193		211
5.50%, Due 6/1/2034		122		133
4.50%, Due 9/1/2034		59		63
5.50%, Due 2/1/2035		220		240
5.00%, Due 5/1/2035		2,750		2,988
5.00%, Due 11/1/2035		178		194
5.50%, Due 12/1/2035		134		147
5.00%, Due 2/1/2036		141		153
5.50%, Due 4/1/2036		303		331
6.00%, Due 9/1/2036		59		65
6.50%, Due 12/1/2036		144		161
5.50%, Due 2/1/2037		158		172
6.00%, Due 9/1/2037		146		160
6.00%, Due 1/1/2038		230		251
5.50%, Due 3/1/2038		332		362
5.00%, Due 4/1/2038		140		152
5.50%, Due 6/1/2038		103		112
4.50%, Due 1/1/2040		1,416		1,515
5.00%, Due 5/1/2040		1,948		2,125
4.00%, Due 9/1/2040		925		975
4.00%, Due 12/1/2040		4,139		4,364
4.00%, Due 1/1/2041		1,099		1,159
4.00%, Due 2/1/2041		3,063		3,234
5.00%, Due 3/1/2041		1,214		1,326
4.50%, Due 4/1/2041		4,659		4,998
4.50%, Due 5/1/2041		1,298		1,396

See accompanying notes

39

American Beacon Intermediate Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
4.50%, Due 8/1/2041	$	1,444	$	1,550
4.00%, Due 9/1/2041		2,442		2,574
4.00%, Due 10/1/2041		2,589		2,729
4.50%, Due 10/1/2041		1,047		1,124
4.00%, Due 11/1/2041		806		850
3.50%, Due 9/1/2042		972		999
4.00%, Due 11/1/2042		350		369
4.50%, Due 1/1/2043		681		729
				46,693
Government National Mortgage Association - 1.40%
6.50%, Due 3/15/2028		137		154
6.00%, Due 4/15/2031		159		177
6.00%, Due 10/15/2038		693		764
5.50%, Due 2/15/2040		531		581
3.50%, Due 3/15/2043		1,681		1,745
5.50%, Due 2/20/2034		170		190
4.50%, Due 10/20/2040		1,082		1,186
				4,797
Total U.S. Agency Mortgage-Backed Obligations (Cost $65,443)				66,083
U.S. TREASURY OBLIGATIONS - 19.41%
0.25%, Due 12/15/2015		2,000		1,996
2.00%, Due 4/30/2016		3,945		4,098
1.50%, Due 6/30/2016		3,500		3,594
3.125%, Due 10/31/2016		4,400		4,729
0.875%, Due 1/31/2017		9,355		9,408
0.75%, Due 12/31/2017		5,600		5,532
1.50%, Due 8/31/2018		1,000		1,011
1.375%, Due 9/30/2018		4,000		4,016
1.125%, Due 5/31/2019		3,000		2,936
1.25%, Due 2/29/2020		600		581
2.00%, Due 11/15/2021		9,550		9,401
2.00%, Due 2/15/2022		10,465		10,250
6.25%, Due 8/15/2023		900		1,197
6.875%, Due 8/15/2025		770		1,091
5.25%, Due 11/15/2028		750		944
4.75%, Due 2/15/2037		800		966
3.125%, Due 11/15/2041		5,195		4,738
Total U.S. Treasury Obligations (Cost $66,507)				66,488
	Shares
SHORT-TERM INVESTMENTS - 4.30% (Cost $14,727)
JPMorgan U.S. Government Money Market Fund, Capital Class		14,726,742		14,727
TOTAL INVESTMENTS - 99.70% (Cost $334,588)				341,495
OTHER ASSETS, NET OF LIABILITIES - 0.30%				1,007
TOTAL NET ASSETS - 100.00%			$	342,502

Percentages are stated as a percent of net assets.

^A  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 $14,515 or 4.24% of net assets. The Fund has no right to demand registration of these securities.

^B  Limited Partnership.

^C  Limited Liability Company.

^D  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.

^E  REIT - Real Estate Investment Trust.

See accompanying notes

40

American Beacon Short-Term Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
CORPORATE OBLIGATIONS - 45.37%
Consumer - 3.07%
Kellogg Co., 1.125%, Due 5/15/2015	$	2,000	$	2,016
SABMiller Holdings, Inc., 1.85%, Due 1/15/2015A		1,000		1,013
SABMiller PLC, 6.50%, Due 7/1/2016A		1,725		1,959
				4,988
Energy - 0.63%
EOG Resources Canada, Inc., 4.75%, Due 3/15/2014 A		1,000		1,016
Finance - 23.77%
ABN AMRO Bank N.V.,
2.035%, Due 1/30/2014A B		2,000		2,007
1.375%, Due 1/22/2016A		1,000		1,007
American Express Co., 7.25%, Due 5/20/2014		1,000		1,037
American International Group, Inc., 4.25%, Due 9/15/2014		600		618
Bank of America Corp., 1.070%, Due 3/22/2016		2,000		2,010
Bear Stearns Cos. LLC, 0.653%, Due 11/21/2016C		3,000		2,978
Citigroup, Inc.,
1.178%, Due 4/1/2014B		19		19
0.546%, Due 11/5/2014B		2,573		2,570
1.198%, Due 7/25/2016		1,000		1,009
Danske Bank A/S, 1.294%, Due 4/14/2014A B		3,000		3,009
General Electric Capital Corp., 1.50%, Due 7/12/2016		3,000		3,036
Goldman Sachs Group, Inc.,
5.125%, Due 1/15/2015		1,000		1,051
5.35%, Due 1/15/2016		1,000		1,093
ING Bank N.V., 1.658%, Due 6/9/2014A D		3,000		3,020
Lloyds TSB Bank PLC, 2.588%, Due 1/24/2014B		2,000		2,010
Monumental Global Funding III, 0.444%, Due 1/15/2014A B		1,000		1,001
Morgan Stanley, 3.45%, Due 11/2/2015		3,000		3,120
Societe Generale S.A., 1.296%, Due 4/11/2014A B		2,000		2,008
Svenska Handelsbanken AB, 0.721%, Due 9/23/2016B		3,000		3,006
Wachovia Corp., 0.614%, Due 10/15/2016B		3,000		2,963
				38,572
Manufacturing - 9.33%
American Honda Finance Corp.,
1.00%, Due 8/11/2015A		2,000		2,011
0.744%, Due 10/7/2016		1,000		1,004
Daimler Finance North America LLC,
2.30%, Due 1/9/2015A C		1,000		1,017
0.945%, Due 8/1/2016A C		2,500		2,505
Ford Motor Credit Co. LLC, 4.25%, Due 2/3/2017C		1,000		1,080
Hewlett-Packard Co., 0.661%, Due 5/30/2014B		1,000		1,000
Johnson Controls, Inc., 1.75%, Due 3/1/2014		500		502
Nissan Motor Acceptance Corp., 0.950%, Due 9/26/2016A B		3,000		3,005
Volkswagen International Finance N.V., 1.15%, Due 11/20/2015A		3,000		3,018
				15,142
Service - 4.33%
AbbVie, Inc., 1.20%, Due 11/6/2015		3,000		3,021
McKesson Corp., 0.95%, Due 12/4/2015		1,000		1,000
Quest Diagnostics, Inc., 1.100%, Due 3/24/2014B		1,000		1,003
Viacom, Inc., 1.25%, Due 2/27/2015		2,000		2,012
				7,036
Telecommunications - 2.52%
British Telecommunications PLC, 1.625%, Due 6/28/2016		1,000		1,013
Orange S.A., 4.375%, Due 7/8/2014		1,000		1,024
Verizon Communications, Inc., 1.782%, Due 9/15/2016		2,000		2,051
				4,088
Transportation - 0.65%
Burlington Northern Santa Fe Corp., 4.875%, Due 1/15/2015		1,000		1,051

See accompanying notes

41

American Beacon Short-Term Bond Fund^SM

Schedule of Investments

October 31, 2013

	Par Amount		Fair Value
	(000’s)		(000’s)
Utilities—1.07%
EDF S.A., 5.50%, Due 1/26/2014A	$	1,000	$	1,011
Pacific Gas & Electric Co., 6.25%, Due 12/1/2013		730		733
				1,744
Total Corporate Obligations (Cost $73,037)				73,637
ASSET-BACKED OBLIGATIONS - 24.75%
Ally Master Owner Trust, 0.804%, Due 5/15/2016, 2011-3 A1B		2,000		2,003
BMW Vehicle Lease Trust, 0.75%, Due 2/20/2015, 2012-1 A3		2,124		2,126
Capital Auto Receivables Asset Trust 2013-2, 0.92%, Due 9/20/2016, 2013-2 A2		3,500		3,506
Chrysler Capital Auto ReceivablesTrust, 0.91%, Due 4/16/2018, 2013-AA A3A		2,000		2,002
Ford Credit Auto Owner Trust, 0.84%, Due 8/15/2016, 2012-1A A3		1,486		1,489
Ford Credit Floorplan Master Owner Trust, 0.85%, Due 1/15/2018, 2013-1 A1		3,000		2,998
GE Dealer Floorplan Master Note Trust, 0.773%, Due 7/20/2016, 2011-1 AB		2,500		2,505
GE Equipment Small Ticket LLC, 1.45%, Due 1/21/2018, 2011-1A A3A C		148		149
GE Equipment Transportation LLC, 0.62%, Due 7/25/2016, 2012-2 A3C		2,500		2,499
Golden Credit Card Trust, 0.636%, Due 9/15/2018, 2013-2A AA B		3,000		3,000
National Credit Union Administration,
0.624%, Due 1/8/2020, 2011 R1 1AB		4,967		4,951
0.574%, Due 2/6/2020, 2011 R2 1AB		1,326		1,332
0.574%, Due 3/11/2020, 2011 R3 1AB		4,994		4,997
1.84%, Due 10/7/2020, 2010-R1 2A		284		287
Nissan Master Owner Trust Receivables, 0.474%, Due 2/15/2018, 2013-A AB		3,500		3,496
Volkswagen Auto Loan Enhanced Trust,
0.87%, Due 7/20/2015, 2012 A A3		1,000		1,003
0.85%, Due 8/22/2016, 2012-1 A3		1,826		1,832
Total Asset-Backed Obligations (Cost $40,187)				40,175
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 11.92%
Banc of America Commercial Mortgage Trust, 5.633%, Due 4/10/2049, 2007-2 A2		66		67
GNR Project Loans,
1.864%, Due 8/16/2031, 2010-141 A		1,054		1,058
2.239%, Due 12/16/2031, 2011-1 A		757		760
2.45%, Due 7/16/2032, 2011-109 A		2,008		2,022
2.25%, Due 5/16/2033, 2011-92 A		2,204		2,217
2.25%, Due 8/16/2034, 2011-78 A		1,684		1,698
2.21%, Due 11/16/2034, 2011-16 A		1,416		1,423
1.692%, Due 11/16/2035, 2010-148 A		1,288		1,294
2.21%, Due 12/16/2035, 2011-31 A		1,862		1,877
2.782%, Due 6/16/2036, 2010-13 AD		974		995
3.069%, Due 6/16/2036, 2010-52 A		611		620
2.161%, Due 11/16/2036, 2011-96 AB		1,329		1,338
2.45%, Due 7/16/2038, 2011-49 A		2,186		2,219
2.989%, Due 3/16/2039, 2010-71 AC		434		439
3.210%, Due 10/16/2039, 2010-22 AB		345		350
JP Morgan Chase Commercial Mortgage Securities Corp., 3.853%, Due 6/15/2043, 2010-C1 A1A		928		963
Total Non-Agency Mortgage-Backed Obligations (Cost $19,343)				19,340
U.S. TREASURY OBLIGATIONS - 16.85%
2.125%, Due 11/30/2014		1,000		1,021
4.00%, Due 2/15/2015		2,000		2,097
0.25%, Due 3/31/2015		4,000		4,002
0.125%, Due 4/30/2015		4,000		3,994
0.25%, Due 7/15/2015		6,000		6,000
2.00%, Due 1/31/2016		2,000		2,073
1.75%, Due 5/31/2016		3,000		3,099
1.00%, Due 10/31/2016		5,000		5,058
Total U.S. Treasury Obligations (Cost $27,308)				27,344

See accompanying notes

42

American Beacon Short-Term Bond Fund^SM

Schedule of Investments

October 31, 2013

	Shares		Fair Value
			(000’s)
SHORT-TERM INVESTMENTS - 0.88% (Cost $1,430)
JPMorgan U.S. Government Money Market Fund, Capital Class		1,429,636	$	1,430
TOTAL INVESTMENTS - 99.77% (Cost $161,305)				161,926
OTHER ASSETS, NET OF LIABILITIES - 0.23%				387
TOTAL NET ASSETS - 100.00%			$	162,313

Percentages are stated as a percent of net assets.

^A  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 $34,721 or 21.39% of net assets. The Fund has no right to demand registration of these securities.

^B  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.

^C  Limited Liability Company.

^D  Variable rate.

See accompanying notes

43

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2013 (in thousands except share and per share amounts)

	High Yield Bond Fund		Retirement Income and Appreciation Fund		Intermediate Bond Fund		Short-Term Bond Fund
Assets:
Investments in unaffiliated securities, at fair value A	$	205,252	$	132,571	$	341,495	$	161,926
Cash		3		—		—		—
Receivable for investments sold		1,966		589		—		—
Dividends and interest receivable		3,752		815		2,155		483
Receivable for fund shares sold		967		143		4,553		116
Receivable for tax reclaims		16		4		8		1
Receivable for expense reimbursement (Note 2)		4		—		1		2
Prepaid expenses		17		17		23		21
Total assets		211,977		134,139		348,235		162,549
Liabilities:
Payable for investments purchased		2,606		416		5,591		—
Payable for fund shares redeemed		239		107		7		142
Dividends payable		27		1		—		1
Payable under excess expense reimbursement plan (Note 2)		—		9		—		—
Management and investment advisory fees payable		240		125		51		27
Administrative service and service fees payable		27		49		14		13
Transfer agent fees payable		3		1		4		12
Custody and fund accounting fees payable		9		4		7		3
Professional fees payable		32		29		26		30
Trustee fees payable		2		1		9		4
Payable for prospectus and shareholder reports		1		6		23		4
Other liabilities		1		1		1		—
Total liabilities		3,187		749		5,733		236
Net Assets	$	208,790	$	133,390	$	342,502	$	162,313
Analysis of Net Assets:
Paid-in-capital		205,518		120,917		333,520		170,270
Undistributed net investment income (loss)		154		110		2,002		(426	)
Accumulated net realized gain (loss)		550		4,276		73		(8,152	)
Unrealized appreciation of investments		2,568		8,087		6,907		621
Net assets	$	208,790	$	133,390	$	342,502	$	162,313
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		6,750,666		N/A		31,629,003		17,296,377
Y Class		215,158		54,315		16,949		134,549
Investor Class		816,976		11,616,544		163,307		861,316
A Class		104,188		75,805		39,181		260,992
C Class		199,781		170,572		68,547		99,115
AMR Class		14,339,544		N/A		N/A		N/A
Net assets (not in thousands):
Institutional Class	$	62,836,353	$	N/A	$	339,416,266	$	150,508,693
Y Class	$	2,005,216	$	607,796	$	182,514	$	1,172,887
Investor Class	$	7,608,753	$	130,012,890	$	1,749,389	$	7,497,575
A Class	$	971,277	$	851,036	$	419,576	$	2,270,653
C Class	$	1,858,323	$	1,917,889	$	734,309	$	862,736
AMR Class	$	133,510,143	$	N/A	$	N/A	$	N/A

See accompanying notes

44

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2013 (in thousands except share and per share amounts)

	High Yield Bond Fund		Retirement Income and Appreciation Fund		Intermediate Bond Fund		Short-Term Bond Fund
Net asset value, offering and redemption price per share:
Institutional Class	$	9 .31		N/A	$	10 .73	$	8 .70
Y Class	$	9 .32	$	11 .19	$	10 .77	$	8 .72
Investor Class	$	9 .31	$	11 .19	$	10 .71	$	8 .70
A Class	$	9 .32	$	11 .23	$	10 .71	$	8 .70
A Class (offering price)	$	9 .78	$	11 .52	$	11 .24	$	8 .92
C Class	$	9 .30	$	11 .24	$	10 .71	$	8 .70
AMR Class	$	9 .31	$	N/A	$	N/A	$	N/A
A Cost of investments in unaffiliated securities	$	202,685	$	124,484	$	334,588	$	161,305

See accompanying notes

45

American Beacon Funds^SM

Statements of Operations

For the year ended October 31, 2013 (in thousands)

	High Yield Bond Fund			Retirement Income and Appreciation Fund			Intermediate Bond Fund			Short-Term Bond Fund
Investment Income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	138		$	451		$	1		$	1
Interest income		12,154			3,627			9,556			2,205
Miscellaneous Income		66			—			—			1
Total investment income		12,358			4,078			9,557			2,207
Expenses:
Management and investment advisory fees (Note 2)		735			478			727			347
Administrative service fees (Note 2):
Institutional Class		160			—			178			79
Y Class		4			4			5			4
Investor Class		24			435			12			32
A Class		4			8			2			9
C Class		9			8			4			2
AMR Class		53			—			—			—
Transfer agent fees:
Institutional Class		28			—			17			26
Y Class		1			—			—			—
Investor Class		3			8			2			4
C Class		—			1			1			—
AMR Class		4			—			—			—
Custody and fund accounting fees		48			26			49			25
Professional fees		54			48			49			52
Registration fees and expenses		62			61			66			71
Service fees (Note 2):
Y Class		1			1			2			1
Investor Class		20			543			10			27
A Class		1			3			1			4
C Class		3			3			2			1
Distribution fees (Note 2):
A Class		2			5			1			6
C Class		21			20			10			5
Prospectus and shareholder report expenses		35			9			49			26
Trustee fees		13			8			30			9
Other expenses		10			11			33			7
Total expenses		1,295			1,680			1,250			737
Net fees waived and expenses (reimbursed)/recouped by Manager (Note 2)		(21	)		6			(6	)		(21	)
Net expenses		1,274			1,686			1,244			716
Net investment income		11,084			2,392			8,313			1,491
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments		3,233			5,348			1,150			727
Change in net unrealized appreciation or (depreciation) of:
Investments		(16	)		(3,139	)		(14,948	)		(1,288	)
Net gain (loss) from investments		3,217			2,209			(13,798	)		(561	)
Net increase (decrease) in net assets resulting from operations	$	14,301		$	4,601		$	(5,485	)	$	930
A     Foreign taxes	$	—		$	1		$	—		$	—

See accompanying notes

46

American Beacon Funds^SM

Statements of Changes in Net Assets (in thousands)

	High Yield Bond Fund						Retirement Income and Appreciation Fund
	Year Ended October 31, 2013			Year Ended October 31, 2012			Year Ended October 31, 2013			Year Ended October 31, 2012
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	11,084		$	10,389		$	2,392		$	3,095
Net realized gain (loss) from investments		3,233			(160	)		5,348			1,443
Change in net unrealized appreciation or (depreciation) from investments		(16	)		5,699			(3,139	)		4,158
Net increase in net assets resulting from operations		14,301			15,928			4,601			8,696
Distributions to Shareholders:
Net investment income:
Institutional Class		(3,331	)		(3,258	)		—			—
Y Class		(72	)		(5	)		(34	)		(35	)
Investor Class		(489	)		(611	)		(3,039	)		(3,447	)
A Class		(57	)		(26	)		(40	)		(24	)
C Class		(114	)		(91	)		(21	)		(22	)
AMR Class		(7,002	)		(6,414	)		—			—
Net realized gain from investments:
Y Class		—			—			(14	)		(4	)
Investor Class		—			—			(969	)		(745	)
A Class		—			—			(8	)		(5	)
C Class		—			—			(12	)		(9	)
Net distributions to shareholders		(11,065	)		(10,405	)		(4,137	)		(4,291	)
Net increase (decrease) in net assets from capital share transactions		65,191			12,358			(36,304	)		14,514
Net increase (decrease) in net assets		68,427			17,881			(35,840	)		18,919
Net Assets:
Beginning of period		140,363			122,482			169,230			150,311
End of Period *	$	208,790		$	140,363		$	133,390		$	169,230
*  Includes undistributed net investment income (loss) of	$	154		$	135		$	110		$	(248	)

See accompanying notes

47

American Beacon Funds^SM

Statements of Changes in Net Assets (in thousands)

	Intermediate Bond Fund						Short-Term Bond Fund
	Year Ended October 31, 2013			Year Ended October 31, 2012			Year Ended October 31, 2013			Year Ended October 31, 2012
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	8,313		$	9,894		$	1,491		$	2,585
Net realized gain from investments		1,150			7,693			727			281
Change in net unrealized appreciation or (depreciation) from investments		(14,948	)		8,819			(1,288	)		1,785
Net increase (decrease) in net assets resulting from operations		(5,485	)		26,406			930			4,651
Distributions to Shareholders:
Net investment income:
Institutional Class		(9,213	)		(10,971	)		(2,250	)		(2,943	)
Y Class		(40	)		(2	)		(14	)		(5	)
Investor Class		(83	)		(218	)		(116	)		(273	)
A Class		(11	)		(17	)		(21	)		(49	)
C Class		(11	)		(8	)		(1	)		(3	)
Net realized gain from investments:
Institutional Class		(4,740	)		(2,259	)		—			—
Y Class		(55	)		—			—			—
Investor Class		(75	)		(16	)		—			—
A Class		(7	)		(3	)		—			—
C Class		(14	)		(2	)		—			—
Net distributions to shareholders		(14,249	)		(13,496	)		(2,402	)		(3,273	)
Net increase (decrease) in net assets from capital share transactions		(39,485	)		108,918			(71,563	)		48,333
Net increase (decrease) in net assets		(59,219	)		121,828			(73,035	)		49,711
Net Assets:
Beginning of period		401,721			279,893			235,348			185,637
End of Period *	$	342,502		$	401,721		$	162,313		$	235,348
*  Includes undistributed net investment income (loss) of	$	2,002		$	478		$	(426	)	$	(510	)

See accompanying notes

48

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), which is comprised of twenty-seven Funds, 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.

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

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
A Class	General public and investors investing through an intermediary with applicable sales charges, which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”)
C Class	General public and investors investing through an intermediary with applicable sales charges, which may include a CDSC
AMR Class	Investors in the tax-exempt retirement and benefit plans of the Manager, AMR Corporation, and its affiliates

Each class offered by the Trust has equal rights as to assets and voting privileges. Income and non-class specific expenses are allocated daily to each class on the basis of the relative net assets. Realized and unrealized capital gains and losses of each class are allocated daily based on the relative net assets of each class of the respective Fund. Class specific expenses, where applicable, currently include administrative service fees, service fees, and distribution fees and vary amongst the classes as described more fully in Note 2.

New Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. The amendments in the ASU enhance disclosures about offsetting of financial assets and liabilities to enable investors to understand the effect of these arrangements on a fund’s financial position. In January 2013, FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. The amendments in ASU No. 2013-01 clarify the scope of disclosures required by ASU No. 2011-11. These ASUs are effective for annual periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Funds believe the adoption of these ASUs will not have a material impact on its financial statement disclosures.

49

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

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 fund management. 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 and Retirement Income and Appreciation Funds an annualized fee equal to 0.05% of the average daily net assets plus amounts paid by the Manager to the investment advisors hired by the Manager to direct investment activities of the Funds. The Manager receives an annualized fee of 0.20% of the average daily net assets of the Intermediate Bond Fund and pays a portion of its fee to an investment advisor hired by the Manager to direct investment activities of a portion of the Fund. The Manager is one of the investment advisors of the 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. Management fees paid during the year ended October 31, 2013 were as follows (dollars in thousands):

	Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Net Amounts Retained by Manager
High Yield Bond		0.43	%		735		649		86
Retirement Income and Appreciation		0.32	%		478		402		76
Intermediate Bond		0.20	%		727		294		433
Short-Term Bond		0.20	%		347		—		347

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, and Investor Classes of each Fund, 0.40% of the average daily net assets of the A and C Classes of each Fund, and 0.05% of the average daily net assets of the AMR Class, except for the Institutional Class of the Intermediate and Short-Term Bond Funds from which the Manager receives a fee of 0.05% of average daily net assets.

Distribution Plans

The Funds, except for the A and C Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the management 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 Fund shares.

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the A and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of each A Class and 1.00% of the average daily net assets of each C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Y, Investor, A, and C 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, 0.15% of the average daily net assets of the A and C Classes, and up to 0.375% of the average daily net assets of the Investor Class of each Fund.

50

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

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. This program provides an alternative credit facility allowing the Funds to borrow from or lend to other participating Funds. During the year ended October 31, 2013, the High Yield Bond Fund borrowed $2,173,597 for one day at 0.73% with interest charges of $43, the Retirement Income and Appreciation Fund borrowed on average $1,213,623 for nine days at an average rate of 0.80% with total interest charges of $238 and the Short-Term Bond Fund loaned on average $776,094 for 33 days at an average rate of 0.77% with interest charges of $530. These amounts are included as interest income on the Statements of Operations.

Expense Reimbursement Plan

The Manager voluntarily and contractually agreed to reimburse the following Funds to the extent that total operating expenses exceeded the Fund’s expense cap. For the period ended October 31, 2013, the Manager reimbursed expenses as follows:

		Expense Caps						Reimbursed
Fund	Class	11/1/12 to 2/28/13			3/1/13 to 10/31/13			(Recouped) Expenses			Expiration of Reimbursements
High Yield Bond	Institutional1		0.93	%		0.93	%	$	8,827		2016
High Yield Bond	Y		0.98	%		0.98	%		474		2016
High Yield Bond	Investor		N/A			1.09	%		3,592		2016
High Yield Bond	A		1.12	%		1.12	%		2,477		2016
High Yield Bond	C		1.87	%		1.87	%		5,380		2016
Retirement Income and Appreciation	Y		0.80	%		0.80	%		401		2016
Retirement Income and Appreciation	Investor2		1.12	%		N/A			(8,500	)	2016
Retirement Income and Appreciation	A		1.14	%		1.14	%		1,903		2016
Retirement Income and Appreciation	C		1.96	%		1.96	%		695		2016
Intermediate Bond	Y		0.65	%		0.65	%		367		2016
Intermediate Bond	Investor		0.79	%		0.79	%		3,110		2016
Intermediate Bond	A		0.99	%		0.99	%		639		2016
Intermediate Bond	C		1.74	%		1.74	%		2,032		2016
Short-Term Bond	Y		0.64	%		0.64	%		1,109		2016
Short-Term Bond	Investor		0.79	%		0.79	%		11,472		2016
Short-Term Bond	A		0.85	%		0.85	%		6,530		2016
Short Term Bond	C		1.60	%		1.60	%		1,576		2016

¹  Voluntary reimbursement.

²  Expense recoupment.

Of these amounts, $3,546, $585, and $1,736 were a receivable from the Manager at October 31, 2013 for the High Yield Bond, Intermediate Bond, and Short-Term Bond Funds, respectively and $8,807 was payable to the Manager from the Retirement Income and Appreciation Fund. The Funds have adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of fees waived or expenses reimbursed for a period of up to three years. However, reimbursement will occur only if the Class’ average net assets have grown or expenses have declined sufficiently to allow reimbursement without causing its expense ratio to exceed the previously agreed upon contractual expense limit. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

Fund	Recovered Expenses		Excess Expense Carryover		Expiration of Reimbursed Expenses
High Yield Bond	$	—	$	5,574		2014
High Yield Bond		—		7,197		2015
Retirement Income and Appreciation		—		9,426		2014
Retirement Income and Appreciation		8,500		3,661		2015
Intermediate Bond		—		3,532		2014
Intermediate Bond		—		7,592		2015
Short-Term Bond		—		47,110		2014
Short-Term Bond		—		29,140		2015

51

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

The Manager recouped $8,500 of excess carryover expenses expiring in 2015 from the Investor Class of the Retirement Income and Appreciation Fund during the year ended October 31, 2013. The Funds did not record a liability for potential reimbursement due to the current assessment that a reimbursement is unlikely.

Sales Commissions

The Funds’ distributor, Foreside Fund Services, LLC (“Foreside”), may receive a portion of A Class sales charges from broker dealers and it may be used to offset distribution related expenses. For the year ended October 31, 2013, Foreside has collected $1,811, $77, $1, and $181 for the High Yield Bond, Retirement Income and Appreciation, Intermediate Bond, and Short-Term Bond Funds, respectively from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares of the Retirement Income and Appreciation and Short-Term Bond Funds on certain purchases of $250,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. A CDSC of 0.50% will be deducted with respect to Class A Shares of the High Yield Bond and Intermediate Bond Funds on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2013 there were no CDSC fees collected on Class A Shares.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2013, $188, $0, $295, and $813 in CDSC fees were collected for the High Yield Bond, Retirement Income and Appreciation, Intermediate Bond, and Short-Term Bond Funds, respectively.

3. Security Valuation and Fair Value Measurements

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, including exchange-traded funds (“ETFs”) 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 open-end mutual funds are valued at the closing net asset value (“NAV”) 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 fair 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 Trust’s Board of Trustees (the “Board”).

Other investments, including restricted securities, and those financial instruments for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by the Valuation Committee, established by the Fund’s Board.

52

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Valuation Inputs

Various inputs may be used to determine the fair value of the Funds’ investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Prices determined using other significant observable inputs. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and others. Level 2 securities include fixed-income securities that are valued using observable inputs as stated above.

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.

Level 1 and Level 2 trading assets and trading liabilities, at fair value

Fixed income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. treasury obligations, sovereign issues, bank loans, convertible preferred securities, and non-U.S. bonds are normally valued by pricing service providers that use broker dealer quotations, reported trades or valuation estimates from their internal pricing models. The service providers’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates, and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Fixed income securities purchased on a delayed-delivery basis are marked to market daily until settlement at the forward settlement date are categorized as Level 2 of the fair value hierarchy.

Mortgage-related and asset-backed securities are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by pricing service providers that use broker dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, current market data, estimated cash flows, and market-based yield spreads for each tranche, and incorporates deal collateral performance, as available. Mortgage-related and asset-backed securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Common stocks, exchange-traded funds and financial derivative instruments, such as futures contracts that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Valuation adjustments may be applied to certain securities that are solely traded on a foreign exchange to account for the market movement between the close of the foreign market and the close of the Exchange. These securities are valued using pricing service providers that consider the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments. Securities using these valuation adjustments are categorized as Level 2 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are also categorized as Level 2 of the fair value hierarchy.

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy. Short-term investments having a maturity of 60 days or less are generally valued at amortized cost which approximates fair value. These investments are categorized as Level 2 of the fair value hierarchy.

53

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Level 3 trading assets and trading liabilities, at fair value

The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of the fair value hierarchy are as follows:

Securities and other assets for which market quotes are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction and are categorized as Level 3 of the fair value hierarchy.

Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the Exchange close, that materially affect the values of a Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade, do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Manager the responsibility for monitoring significant events that may materially affect the fair values of a Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be re-evaluated in light of such significant events.

The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated the responsibility for applying the valuation methods to the Manager. For instances in which daily market quotes are not readily available, investments may be valued, pursuant to guidelines established by the Board. In the event that the security or asset cannot be valued pursuant to one of the valuation methods established by the Board, the fair value of the security or asset will be determined in good faith by the Valuation Committee, generally based upon recommendations provided by the Manager.

When a Fund uses fair valuation methods applied by the Manager that use significant unobservable inputs to determine its NAV, the securities priced using this methodology are categorized as Level 3 of the fair value hierarchy. These methods may require subjective determinations about the value of a security. While the Trust’s policy is intended to result in a calculation of a Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.

For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to total realized and unrealized gains or losses, purchases and sales, and transfers in and out of the Level 3 category during the period. In accordance with the requirements of U.S. GAAP, a fair value hierarchy and Level 3 reconciliation, if any, have been included in the Notes to the Schedule of Investments for each respective Fund.

54

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

The Funds’ investments are summarized by level based on the inputs used to determine their values. U.S. GAAP also requires all transfers between any levels to be disclosed. The end of the period timing recognition has been adopted for the transfers between levels of each Fund’s assets and liabilities. As of October 31, 2013, the investments were classified as described below (in thousands):

High Yield Bond Fund*	Level 1		Level 2		Level 3		Total
Common Stocks	$	262	$	—	$	127	$	389
Rights		—		182		—		182
Convertible Preferred Stock		—		—		45		45
Preferred Stocks		382		—		—		382
Convertible Obligations		—		1,165		—		1,165
Corporate Obligations		—		194,001		—		194,001
Foreign Government Obligations		—		148		—		148
Short-Term Investments – Money Markets		8,940		—		—		8,940
Total Investments in Securities	$	9,584	$	195,496	$	172	$	205,252

Retirement Income and Appreciation Fund*	Level 1		Level 2		Level 3		Total
Common Stock	$	4,443	$	—	$	—	$	4,443
Preferred Stock		4,807		917		—		5,724
Convertible Obligations		—		22,086		—		22,086
Corporate Obligations		—		44,801		—		44,801
Foreign Government Obligations		—		544		—		544
Asset-Backed Obligations		—		7,447		—		7,447
Non-Agency Mortgage-Backed Obligations		—		16,029		—		16,029
U.S. Agency Mortgage-Backed Obligations		—		11,871		—		11,871
U.S. Treasury Obligations		—		18,155		—		18,155
Short-Term Investments – Money Markets		1,471		—		—		1,471
Total Investments in Securities	$	10,721	$	121,850	$	—	$	132,571

Intermediate Bond Fund*	Level 1		Level 2		Level 3		Total
Corporate Obligations	$	—	$	147,125	$	—	$	147,125
Foreign Government Obligations		—		1,830		—		1,830
Asset-Backed Obligations		—		15,848		—		15,848
Non-Agency Mortgage-Backed Obligations		—		29,394		—		29,394
U.S. Agency Mortgage-Backed Obligations		—		66,083		—		66,083
U.S. Treasury Obligations		—		66,488		—		66,488
Short-Term Investments – Money Markets		14,727		—		—		14,727
Total Investments in Securities	$	14,727	$	326,768	$	—	$	341,495

Short-Term Bond Fund*	Level 1		Level 2		Level 3		Total
Corporate Obligations	$	—	$	73,637	$	—	$	73,637
Asset-Backed Obligations		—		40,175		—		40,175
Non-Agency Mortgage-Backed Obligations		—		19,340		—		19,340
U.S. Treasury Obligations		—		27,344		—		27,344
Short-Term Investments – Money Markets		1,430		—		—		1,430
Total Investments in Securities	$	1,430	$	160,496	$	—	$	161,926

* Refer to the Schedules of Investments for Sector and Industry information.

As of October 31, 2013, there were no transfers between levels for the Retirement Income and Appreciation, Intermediate Bond, and Short-Term Bond Funds. The High Yield Bond Fund transferred $8 from Level 2 to Level 1 (in thousands).

55

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

The following is a reconciliation of Level 3 assets of the High Yield Bond Fund for which significant unobservable inputs were used to determine fair value. Transfers in or out of Level 3 represent the ending value of any security or instrument where a change in the level has occurred from the beginning to the end of the period (in thousands):

	Common Stocks			Rights		Preferred Stocks			Convertible Preferred Stocks		Convertible Obligations		Corporate Obligations		Foreign Government Obligations		Short Term Investments		Totals
Balance as of October 31, 2012	$	—		$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	—
Realized gain (loss)		—			—		—			—		—		—		—		—		—
Change in unrealized appreciation or (depreciation)		(160	)		—		(23	)		—		—		—		—		—		(183	)
Purchases		287			—		68			—		—		—		—		—		355
Sales		—			—		—			—		—		—		—		—		—
Transfer into Level 3		—			—		—			—		—		—		—		—		—
Transfer out of Level 3		—			—		—			—		—		—		—		—		—
Balance as of October 31, 2013		127			—		45			—		—		—		—		—		172
Change in unrealized at period end*	$	(160	)	$	—	$	(23	)	$	—	$	—	$	—	$	—	$	—	$	(183	)

	Common Stocks	Common Stocks	Convertible Preferred Stock
Ending Balance as of 10/31/2013	$   106	$  21	$  45
Valuation Technique	Mean of bid/ask quote	Indicative bid quote	Indicative bid quote
Unobservable Inputs	Broker Quote	Broker Quote	Broker Quote
Input Value(s)	$88.50	$925	$925

* Change in unrealized appreciation or (depreciation) attributable to Level 3 securities held at period end. This balance is included in the change in unrealized appreciation or (depreciation) on the Statements of Operations.

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 NAV. The value of the security may vary with market fluctuations.

Dividend income, net of foreign taxes, is recorded on the ex-dividend date, except certain dividends from foreign securities which are recorded as soon as the information is available to the Funds. Interest income is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For financial and tax reporting purposes, realized gains and losses are determined on the basis of specific lot identification.

Dividends to Shareholders

Dividends from net investment income of the Funds generally will be declared daily and paid 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 Fund’s Statement of Operations.

56

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

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. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Redemption Fees

The High Yield Bond Fund imposes a 2% redemption fee on shares held for less than 90 days. The fee is deducted from the redemption proceeds and is intended to offset the trading costs, market impact, and other costs associated with short-term trading activity in the Fund. The “first-in, first-out” method is used to determine the holding period. The fee is allocated to all classes of the Fund pro-rata based on their respective net assets.

Other

Under the Trust’s organizational documents, its officers and trustees 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.

4. Securities and Other Investments

Payment In-Kind Securities

Certain Funds may invest in payment in-kind securities. Payment in-kind securities give the issuer the option at each interest payment date of making interest payments in either cash or additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a dirty price) and require a pro-rata adjustment from the unrealized appreciation or depreciation on investment to interest receivable in the Statements of Assets and Liabilities.

Restricted Securities

Certain Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities may be sold privately, but are required to be registered or exempted from such registration before being sold to the public. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. Disposal of restricted securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted securities outstanding at the period ended October 31, 2013 are disclosed in the Notes to the Schedules of Investments.

57

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

High-Yield Securities

Non-investment-grade securities are rated below the four highest credit grades by at least one of the public rating agencies (or are unrated if not publicly rated). Participation in high-yielding securities transactions generally involves greater returns in the form of higher average yields. However, participation in such transactions involves greater risks, including sensitivity to economic changes, solvency, and relative liquidity in the secondary trading market. Lower ratings may reflect a greater possibility that the financial condition of the issuer, or adverse changes in general economic conditions, or both, may impair the ability of the issuer to make payments of interest and principal. The prices and yields of lower-rated securities generally fluctuate more than higher-quality securities, and such prices may decline significantly in periods of general economic difficulty or rising interest rates.

Other Investment Company Securities and Other Exchange Traded Products

The Funds may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, exchange-traded notes (“ETNs”), unit investment trusts, and other investment companies of the Trust. The Funds may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, a Fund becomes a shareholder of that investment company. As a result, Fund shareholders indirectly will bear a Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses Fund shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

5. Federal Income and Excise Taxes

It is the policy of each Fund to qualify as a regulated investment company (“RIC”), by complying with all applicable provisions of Subchapter M of the Internal Revenue Code, as amended, and to make distribution of taxable income sufficient to relieve it from substantially all federal income and excise taxes. For federal income tax purposes, each Fund is treated as a single entity for the purpose of determining such qualification.

The Funds do not have any unrecognized tax benefits in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2013 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. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

A Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation or depreciation, as applicable, as the income is earned or capital gains are recorded.

58

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

The tax character of distributions paid were as follows (in thousands):

	High Yield Bond				Retirement Income and Appreciation
	Year Ended October 31, 2013		Year Ended October 31, 2012		Year Ended October 31, 2013		Year Ended October 31, 2012
Distributions paid from:
Ordinary income*
Institutional Class	$	3,331	$	3,258	$	—	$	—
Y Class		72		5		34		35
Investor Class		489		611		3,039		3,447
A Class		57		26		40		24
C Class		114		91		21		22
AMR Class		7,002		6,414		—		—
Long-Term Capital Gains
Institutional Class		—		—		—		—
Y Class		—		—		14		4
Investor Class		—		—		969		745
A Class		—		—		8		5
C Class		—		—		12		9
AMR Class		—		—		—		—
Total distributions paid	$	11,065	$	10,405	$	4,137	$	4,291

* For tax purposes, short-term capital gains are considered ordinary income distributions.

	Intermediate Bond				Short-Term Bond
	Year Ended October 31, 2013		Year Ended October 31, 2012		Year Ended October 31, 2013		Year Ended October 31, 2012
Distributions paid from:
Ordinary income*
Institutional Class	$	11,487	$	10,971	$	2,250	$	2,943
Y Class		66		2		14		5
Investor Class		119		218		116		273
A Class		14		17		21		49
C Class		18		8		1		3
Long-Term Capital Gains
Institutional Class		2,466		2,259		—		—
Y Class		29		—		—		—
Investor Class		39		16		—		—
A Class		4		3		—		—
C Class		7		2		—		—
Total distributions paid	$	14,249	$	13,496	$	2,402	$	3,273

* For tax purposes, short-term capital gains are considered ordinary income distributions.

As of October 31, 2013, the components of distributable earnings or (deficits) on a tax basis were as follows (in thousands):

	High Yield Bond			Retirement Income and Appreciation			Intermediate Bond			Short-Term Bond
Cost basis of investments for federal income tax purposes	$	203,384		$	125,832		$	336,564		$	162,177
Unrealized appreciation		7,158			8,188			9,388			602
Unrealized depreciation		(5,290	)		(1,449	)		(4,457	)		(853	)
Net unrealized appreciation		1,868			6,739			4,931			(251	)
Undistributed ordinary income		702			2,702			3,599			447
Accumulated long-term gain or (loss)		728			3,033			451			(8,152	)
Other temporary differences		(26	)		(1	)		1			(1	)
Distributable earnings or(deficits)	$	3,272		$	12,473		$	8,982		$	(7,957	)

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 or depreciation are attributable primarily to the tax deferral of losses from wash sales, book amortization for premiums and income adjustments associated with contingent payment debt instruments.

59

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

Due to inherent differences in the recognition of income, expenses, and realized gains (losses) under U.S. GAAP 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 book amortization of premium, pay down reclasses, income adjustments associated with contingent payment debt instruments, and dividend reclasses as of October 31, 2013 (in thousands):

	High Yield Bond			Retirement Income and Appreciation			Intermediate Bond			Short-Term Bond
Paid-in-capital	$	(1	)	$	(31	)	$	—		$	—
Undistributed net investment income		—			1,100			2,569			995
Accumulated net realized gain (loss)		—			(1,068	)		(2,568	)		(995	)
Unrealized appreciation or (depreciation) of investments		1			(1	)		(1	)		—

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”) was enacted, which changed various technical rules governing the tax treatment of RICs. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the RIC MOD, each Fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

Finally, the RIC MOD contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions. Except for the simplification provisions related to RIC qualification, the RIC MOD is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.

Capital losses incurred that will be carried forward under the provisions of the Act for the year October 31, 2013 were as follows (in thousands):

	Loss Carryforward Character
Fund	Short-Term		Long Term		Total
Short-Term Bond	$	81	$	392	$	473

As of October 31, 2013 the capital loss carryforward positions prior to the provisions of the Act that may be applied against any realized net taxable gains in each succeeding year or until their expiration dates, whichever occurs first, were as follows (in thousands):

Fund	2014		2015		2016		2017		Total
Short-Term Bond	$	2,015	$	467	$	5,198	$	—	$	7,680

The High Yield Bond Fund utilized $205 of long-term losses and the Short-Term Bond Fund utilized $19 of short term losses under the provisions of the Act. The High Yield Bond Fund utilized $1,970 of loss carryforward positions occurring prior to the provisions of the Act.

60

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

6. Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of long-term investments, other than short-term obligations, for the year ended October 31, 2013 were as follows (in thousands):

	High Yield Bond		Retirement Income and Appreciation		Intermediate Bond		Short-Term Bond
Purchases (excluding U.S. government securities)	$	197,501	$	78,092	$	177,718	$	174,886
Sales and maturities (excluding U.S. government securities)		133,737		113,751		220,926		178,851
Purchases of U.S. government securities		—		31,651		99,577		107,517
Sales and maturities of U.S. government securities		—		35,774		86,961		87,975

7. Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Funds (shares and dollars in thousands):

For the Year Ended October 31, 2013

	Institutional Class						Y Class						Investor Class
High Yield Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		2,942		$	27,146			259		$	2,378			290		$	2,667
Redemption Fees		—			16			—			1			—			2
Reinvestment of dividends		338			3,118			3			30			44			409
Shares redeemed		(1,149	)		(10,615	)		(95	)		(882	)		(498	)		(4,593	)
Net increase (decrease) in shares outstanding		2,131		$	19,665			167		$	1,527			(164	)	$	(1,515	)
	A Class						C Class						AMR Class
High Yield Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		75		$	692			78		$	719			10,040		$	92,791
Redemption Fees		—			—			—			1			—			32
Reinvestment of dividends		5			46			7			68			758			7,002
Shares redeemed		(50	)		(463	)		(134	)		(1,237	)		(5,914	)		(54,137	)
Net increase (decrease) in shares outstanding		30		$	275			(49	)	$	(449	)		4,884		$	45,688

	Total
High Yield Bond Fund	Shares			Amount
Shares sold		13,684		$	126,393
Redemption Fees		—			52
Reinvestment of dividends		1,155			10,673
Shares redeemed		(7,840	)		(71,927	)
Net increase (decrease) in shares outstanding		6,999		$	65,191

	Y Class						Investor Class						A Class
Retirement Income and Appreciation Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		43		$	476			1,930		$	21,371			590		$	6,551
Reinvestment of dividends		4			47			361			3,992			4			45
Shares redeemed		(198	)		(2,196	)		(5,373	)		(59,482	)		(630	)		(7,038	)
Net (decrease) in shares outstanding		(151	)	$	(1,673	)		(3,082	)	$	(34,119	)		(36	)	$	(442	)

	C Class						Total
Retirement Income and Appreciation Fund	Shares			Amount			Shares			Amount
Shares sold		20		$	223			2,583		$	28,621
Reinvestment of dividends		3			27			372			4,111
Shares redeemed		(29	)		(320	)		(6,230	)		(69,036	)
Net (decrease) in shares outstanding		(6	)	$	(70	)		(3,275	)	$	(36,304	)

61

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

	Institutional Class						Y Class						Investor Class
Intermediate Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		11,814		$	128,547			440		$	4,951			100		$	1,109
Reinvestment of dividends		1,274			13,948			—			3			13			140
Shares redeemed		(15,949	)		(172,224	)		(433	)		(4,809	)		(929	)		(10,282	)
Net increase (decrease) in shares outstanding		(2,861	)	$	(29,729	)		7		$	145			(816	)	$	(9,033	)
	A Class						C Class						Total
Intermediate Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		4		$	40			4		$	39			12,362		$	134,686
Reinvestment of dividends		1			9			2			19			1,290			14,119
Shares redeemed		(31	)		(336	)		(59	)		(639	)		(17,401	)		(188,290	)
Net (decrease) in shares outstanding		(26	)	$	(287	)		(53	)	$	(581	)		(3,749	)	$	(39,485	)
	Institutional Class						Y Class						Investor Class
Short-Term Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		10,396		$	90,945			302		$	2,652			264		$	2,313
Reinvestment of dividends		257			2,247			1			7			12			106
Shares redeemed		(18,129	)		(158,900	)		(199	)		(1,746	)		(1,030	)		(9,019	)
Net increase (decrease) in shares outstanding		(7,476	)	$	(65,708	)		104		$	913			(754	)	$	(6,600	)
	A Class						C Class						Total
Short-Term Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		133		$	1,161			88		$	770			11,183		$	97,841
Reinvestment of dividends		1			8			—			1			271			2,369
Shares redeemed		(209	)		(1,827	)		(32	)		(281	)		(19,599	)		(171,773	)
Net increase (decrease) in shares outstanding		(75	)	$	(658	)		56		$	490			(8,145	)	$	(71,563	)
For the Year Ended October 31, 2012
	Institutional Class						Y Class						Investor Class
High Yield Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		1,461		$	12,916			50		$	459			572		$	5,059
Redemption Fees		—			16			—			—			—			3
Reinvestment of dividends		322			2,850			1			4			51			448
Shares redeemed		(1,898	)		(16,860	)		(4	)		(37	)		(512	)		(4,470	)
Net increase (decrease) in shares outstanding		(115	)	$	(1,078	)		47		$	426			111		$	1,040
	A Class						C Class						AMR Class
High Yield Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		63		$	562			222		$	1,945			4,952		$	43,887
Redemption Fees		—			—			—			—			—			28
Reinvestment of dividends		2			18			4			37			725			6,414
Shares redeemed		(4	)		(37	)		(24	)		(205	)		(4,666	)		(40,679	)
Net increase in shares outstanding		61		$	543			202		$	1,777			1,011		$	9,650

	Total
High Yield Bond Fund	Shares			Amount
Shares sold		7,320		$	64,828
Redemption Fees		—			47
Reinvestment of dividends		1,105			9,771
Shares redeemed		(7,108	)		(62,288	)
Net increase in shares outstanding		1,317		$	12,358

62

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2013

	Y Class						Investor Class						A Class
Retirement Income and Appreciation Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		204		$	2,217			3,449		$	37,658			60		$	648
Reinvestment of dividends		4			38			385			4,169			2			26
Shares redeemed		(52	)		(571	)		(2,740	)		(29,774	)		(21	)		(232	)
Net increase in shares outstanding		156		$	1,684			1,094		$	12,053			41		$	442

	C Class						Total
Retirement Income and Appreciation Fund	Shares			Amount			Shares			Amount
Shares sold		40		$	434			3,753		$	40,957
Reinvestment of dividends		3			27			394			4,260
Shares redeemed		(12	)		(126	)		(2,825	)		(30,703	)
Net increase in shares outstanding		31		$	335			1,322		$	14,514

	Institutional Class						Y Class						Investor Class
Intermediate Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		42,148		$	463,192			7		$	77			1,267		$	13,949
Reinvestment of dividends		1,196			13,226			—			2			15			165
Shares redeemed		(33,908	)		(375,696	)		(2	)		(27	)		(643	)		(7,161	)
Net increase in shares outstanding		9,436		$	100,722			5		$	52			639		$	6,953
	A Class						C Class						Total
Intermediate Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		95		$	1,037			97		$	1,080			43,614		$	479,335
Reinvestment of dividends		1			8			1			6			1,213			13,407
Shares redeemed		(84	)		(917	)		(2	)		(23	)		(34,639	)		(383,824	)
Net increase in shares outstanding		12		$	128			96		$	1,063			10,188		$	108,918
	Institutional Class						Y Class						Investor Class
Short-Term Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		11,980		$	104,985			7		$	59			740		$	6,452
Reinvestment of dividends		336			2,936			1			5			29			250
Shares redeemed		(5,553	)		(48,539	)		(16	)		(137	)		(1,969	)		(17,178	)
Net increase (decrease) in shares outstanding		6,763		$	59,382			(8	)	$	(73	)		(1,200	)	$	(10,476	)
	A Class						C Class						Total
Short-Term Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		102		$	890			8		$	72			12,837		$	112,458
Reinvestment of dividends		2			19			—			2			368			3,212
Shares redeemed		(161	)		(1,411	)		(8	)		(72	)		(7,707	)		(67,337	)
Net increase (decrease) in shares outstanding		(57	)	$	(502	)		—		$	2			5,498		$	48,333	)

63

American Beacon High Yield Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class															Y Class
	Year Ended October 31,															Year Ended October 31,									March 1 to Oct. 31, 2010
	2013			2012			2011A			2010			2009			2013			2012			2011A
Net asset value, beginning of period	$	9.10		$	8.68		$	9.05		$	8.42		$	6.77		$	9.12		$	8.69		$	9.06		$	8.63
Income from investment operations:
Net investment income		0.58			0.67			0.71			0.75			0.79			0.58			0.64			0.68			0.50
Net gains (losses) from investments (both realized and unrealized)		0.21			0.42			(0.37	)		0.63			1.66			0.20			0.43			(0.37	)		0.43
Total income from investment operations		0.79			1.09			0.34			1.38			2.45			0.78			1.07			0.31			0.93
Less distributions:
Dividends from net investment income		(0.58	)		(0.67	)		(0.71	)		(0.75	)		(0.80	)		(0.58	)		(0.64	)		(0.68	)		(0.50	)
Distributions from net realized gains on securities		—						—			—			—			—						—			—
Total distributions		(0.58	)		(0.67	)		(0.71	)		(0.75	)		(0.80	)		(0.58	)		(0.64	)		(0.68	)		(0.50	)
Redemption fees added to beneficial interests		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B
Net asset value, end of period	$	9.31		$	9.10		$	8.68		$	9.05		$	8.42		$	9.32		$	9.12		$	8.69		$	9.06
Total return C		8.94	%		13.12	%		3.79	%		17.17	%		39.06	%		8.74	%		12.74	%		3.36	%		11.17	%D
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	62,836		$	42,026		$	41,093		$	41,459		$	47,254		$	2,005		$	437		$	11		$	1
Ratios to average net assets:
Expenses, before reimbursements		0.91	%		0.93	%		0.88	%		0.79	%		0.79	%		1.02	%		1.13	%		27.02	%		0.82	%E
Expenses, net of reimbursements		0.89	%		0.93	%		0.88	%		0.79	%		0.79	%		0.98	%		1.01	%		1.61	%		0.82	%E
Net investment income (loss), before reimbursements		6.25	%		7.61	%		7.90	%		8.69	%		11.46	%		6.06	%		7.08	%		(18.29	)%		8.53	%E
Net investment income, net of reimbursements		6.26	%		7.62	%		7.90	%		8.69	%		11.46	%		6.10	%		7.20	%		7.11	%		8.53	%E
Portfolio turnover rate		82	%		100	%		149	%		176	%		212	%		82	%		100	%		149	%		176	%F

^A PENN Capital Management Company, Inc. was added as an investment manager to the High Yield Bond Fund on September 15, 2011.

^B Amounts represent less than $0.01 per share.

^C Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^D Not annualized.

^E Annualized.

^F Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

64

American Beacon High Yield Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class															A Class												C Class
Year Ended October 31,															Year Ended October 31,									May 17 to Oct. 31,			Year Ended October 31,									Sept. 1 to Oct. 31,
2013			2012			2011A			2010			2009			2013			2012			2011A			2010			2013			2012			2011A			2010
$	9.10		$	8.68		$	9.06		$	8.42		$	6.77		$	9.11		$	8.69		$	9.08		$	8.67		$	9.09		$	8.67		$	9.05		$	8.68
	0.56			0.65			0.69			0.73			0.78			0.56			0.66			0.69			0.32			0.49			0.59			0.63			0.09
	0.21			0.42			(0.38	)		0.64			1.65			0.21			0.42			(0.39	)		0.41			0.21			0.42			(0.39	)		0.37
	0.77			1.07			0.31			1.37			2.43			0.77			1.08			0.30			0.73			0.70			1.01			0.24			0.46
	(0.56	)		(0.65	)		(0.69	)		(0.73	)		(0.78	)		(0.56	)		(0.66	)		(0.69	)		(0.32	)		(0.49	)		(0.59	)		(0.62	)		(0.09	)
	—						—			—			—			—						—			—			—						—			—
	(0.56	)		(0.65	)		(0.69	)		(0.73	)		(0.78	)		(0.56	)		(0.66	)		(0.69	)		(0.32	)		(0.49	)		(0.59	)		(0.62	)		(0.09	)
	0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B
$	9.31		$	9.10		$	8.68		$	9.06		$	8.42		$	9.32		$	9.11		$	8.69		$	9.08		$	9.30		$	9.09		$	8.67		$	9.05
	8.73	%		12.86	%		3.41	%		17.00	%		38.70	%		8.72	%		12.88	%		3.31	%		8.66	%D		7.90	%		12.06	%		2.67	%		5.31	%D
$	7,609		$	8,930		$	7,560		$	54,142		$	90,736		$	972		$	678		$	117		$	40		$	1,858		$	2,262		$	403		$	37
	1.13	%		1.16	%		1.09	%		1.04	%		1.01	%		1.38	%		1.46	%		3.93	%		1.30	%E		2.12	%		2.16	%		3.15	%		2.29	%E
	1.09	%		1.16	%		1.09	%		1.04	%		1.01	%		1.12	%		1.11	%		1.11	%		1.12	%E		1.87	%		1.86	%		1.85	%		1.87	%E
	6.08	%		7.37	%		7.75	%		8.48	%		9.36	%		5.78	%		6.97	%		4.74	%		6.93	%E		5.11	%		6.29	%		5.53	%		4.97	%E
	6.12	%		7.37	%		7.75	%		8.48	%		9.36	%		6.04	%		7.32	%		7.56	%		7.11	%E		5.36	%		6.60	%		6.82	%		5.40	%E
	82	%		100	%		149	%		176	%		212	%		82	%		100	%		149	%		176	%F		82	%		100	%		149	%		176	%F

65

American Beacon High Yield Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	AMR Class
	Year Ended October 31,
	2013			2012			2011A			2010			2009
Net asset value, beginning of period	$	9.10		$	8.68		$	9.06		$	8.42		$	6.77
Income from investment operations:
Net investment income		0.61			0.70			0.74			0.78			0.81
Net gains (losses) from investments (both realized and unrealized)		0.21			0.42			(0.38	)		0.63			1.65
Total income from investment operations		0.82			1.12			0.36			1.41			2.46
Less distributions:
Dividends from net investment income		(0.61	)		(0.70	)		(0.74	)		(0.77	)		(0.81	)
Distributions from net realized gains on securities		—						—			—			—
Total distributions		(0.61	)		(0.70	)		(0.74	)		(0.77	)		(0.81	)
Redemption fees added to beneficial interests		0.00	B		0.00	B		0.00	B		0.00	B		0.00	B
Net asset value, end of period	$	9.31		$	9.10		$	8.68		$	9.06		$	8.42
Total return C		9.25	%		13.46	%		3.96	%		17.59	%		39.41	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	133,510		$	86,030		$	73,298		$	89,992		$	92,659
Ratios to average net assets:
Expenses, before reimbursements		0.61	%		0.62	%		0.60	%		0.54	%		0.53	%
Expenses, net of reimbursements		0.61	%		0.62	%		0.60	%		0.54	%		0.53	%
Net investment income (loss), before reimbursements		6.55	%		7.91	%		8.18	%		8.91	%		10.34	%
Net investment income, net of reimbursements		6.55	%		7.91	%		8.18	%		8.91	%		10.34	%
Portfolio turnover rate		82	%		100	%		149	%		176	%		212	%

^A PENN Capital Management Company, Inc. was added as an investment manager to the High Yield Bond Fund on September 15, 2011.

^B Amounts represent less than $0.01 per share.

^C Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^D Not annualized.

^E Annualized.

^F Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

66

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67

American Beacon Retirement Income and Appreciation Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,									March 1 to Oct. 31, 2010
	2013			2012			2011
Net asset value, beginning of period	$	11.14		$	10.83		$	10.80		$	10.31
Income from investment operations:
Net investment income		0.06			0.28			0.26			0.20
Net gains from investments (both realized and unrealized)		0.32			0.37			0.05			0.49
Total income from investment operations		0.38			0.65			0.31			0.69
Less distributions:
Dividends from net investment income		(0.26	)		(0.28	)		(0.28	)		(0.20	)
Distributions from net realized gains on securities		(0.07	)		(0.06	)		—			—
Return of capital		—			—			—			—
Total distributions		(0.33	)		(0.34	)		(0.28	)		(0.20	)
Net asset value, end of period	$	11.19		$	11.14		$	10.83		$	10.80
Total return A		3.43	%		6.10	%		2.96	%		6.78	%B
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	608		$	2,287		$	539		$	367
Ratios to average net assets:
Expenses, before reimbursements		0.83	%		0.87	%		1.80	%		0.80	%C
Expenses, net of reimbursements		0.80	%		0.81	%		0.84	%		0.80	%C
Net investment income, before reimbursements		1.95	%		2.20	%		1.45	%		2.74	%C
Net investment income, net of reimbursements		1.99	%		2.26	%		2.41	%		2.74	%C
Portfolio turnover rate		53	%		42	%		54	%		51	%D

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

^D Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

^E The tax return of capital is based upon shares at the time of this distribution. Amounts are less than $0.01 per share.

68

American Beacon Retirement Income and Appreciation Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class															A Class												C Class
Year Ended October 31,															Year Ended October 31,									May 17 to Oct. 31,			Year Ended October 31,									Sept. 1 to Oct. 31,
2013			2012			2011			2010			2009			2013			2012			2011			2010			2013			2012			2011			2010
$	11.14		$	10.84		$	10.81		$	10.25		$	8.80		$	11.17		$	10.85		$	10.81		$	10.37		$	11.17		$	10.85		$	10.82		$	10.61
	0.10			0.24			0.27			0.36			0.32			0.12			0.22			0.23			0.13			0.08			0.13			0.15			0.03
	0.25			0.37			0.02			0.51			1.53			0.23			0.39			0.05			0.44			0.18			0.39			0.04			0.20
	0.35			0.61			0.29			0.87			1.85			0.35			0.61			0.28			0.57			0.26			0.52			0.19			0.23
	(0.23	)		(0.25	)		(0.26	)		(0.31	)		(0.40	)		(0.22	)		(0.23	)		(0.24	)		(0.13	)		(0.12	)		(0.14	)		(0.16	)		(0.02	)
	(0.07	)		(0.06	)		—			—			—			(0.07	)		(0.06	)		—			—			(0.07	)		(0.06	)		—			—
	—			—			—			—			—	E		—			—			—			—			—			—			—			—
	(0.30	)		(0.31	)		(0.26	)		(0.31	)		(0.40	)		(0.29	)		(0.29	)		(0.24	)		(0.13	)		(0.19	)		(0.20	)		(0.16	)		(0.02	)
$	11.19		$	11.14		$	10.84		$	10.81		$	10.25		$	11.23		$	11.17		$	10.85		$	10.81		$	11.24		$	11.17		$	10.85		$	10.82
	3.14	%		5.75	%		2.71	%		8.60	%		21.50	%		3.18	%		5.78	%		2.61	%		5.52	%B		2.28	%		4.87	%		1.75	%		2.19	%B
$	130,013		$	163,713		$	147,415		$	126,022		$	93,727		$	851		$	1,253		$	770		$	166		$	1,918		$	1,977		$	1,587		$	1,035
	1.11	%		1.12	%		1.10	%		1.08	%		1.01	%		1.23	%		1.28	%		2.00	%		1.20	%C		1.99	%		2.04	%		1.99	%		2.33	%C
	1.11	%		1.12	%		1.10	%		1.08	%		1.01	%		1.14	%		1.14	%		1.15	%		1.14	%C		1.96	%		1.97	%		1.94	%		1.96	%C
	1.61	%		1.98	%		2.15	%		2.79	%		3.86	%		1.48	%		1.82	%		1.21	%		2.03	%C		0.71	%		1.06	%		1.25	%		1.40	%C
	1.60	%		1.98	%		2.15	%		2.79	%		3.86	%		1.57	%		1.95	%		2.06	%		2.10	%C		0.75	%		1.13	%		1.30	%		1.77	%C
	53	%		42	%		54	%		51	%		53	%		53	%		42	%		54	%		51	%D		53	%		42	%		54	%		51	%D

69

American Beacon Intermediate Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class															Y Class
	Year Ended October 31,															Year Ended October 31,									March 1 to Oct. 31,
	2013			2012			2011			2010			2009			2013			2012			2011			2010
Net asset value, beginning of period	$	11.26		$	10.99		$	11.10		$	10.69		$	9.61		$	11.31		$	11.03		$	11.10		$	10.69
Income from investment operations:
Net investment income (loss)		0.24			0.27			0.33			0.39			0.46			(0.04	)		0.26			0.27			0.23
Net gains (losses) from investments (both realized and unrealized)		(0.36	)		0.34			0.10			0.40			1.07			(0.12	)		0.32			0.17			0.41
Total income (loss) from investment operations		(0.12	)		0.61			0.43			0.79			1.53			(0.16	)		0.58			0.44			0.64
Less distributions:
Dividends from net investment income		(0.28	)		(0.29	)		(0.35	)		(0.38	)		(0.45	)		(0.25	)		(0.25	)		(0.32	)		(0.23	)
Distributions from net realized gains on securities		(0.13	)		(0.05	)		(0.19	)		—			—			(0.13	)		(0.05	)		(0.19	)		—
Total distributions		(0.41	)		(0.34	)		(0.54	)		(0.38	)		(0.45	)		(0.38	)		(0.30	)		(0.51	)		(0.23	)
Net asset value, end of period	$	10.73		$	11.26		$	10.99		$	11.10		$	10.69		$	10.77		$	11.31		$	11.03		$	11.10
Total return A		(1.04	)%		5.59	%		4.11	%		7.56	%		16.17	%		(1.42	)%		5.34	%		4.19	%		6.03	%B
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	339,416		$	388,491		$	275,234		$	290,734		$	210,983		$	183		$	113		$	60		$	382
Ratios to average net assets:
Expenses, before reimbursements		0.33	%		0.33	%		0.35	%		0.33	%		0.32	%		0.67	%		0.99	%		0.73	%		0.67	%C
Expenses, net of reimbursements		0.33	%		0.33	%		0.35	%		0.33	%		0.32	%		0.65	%		0.64	%		0.65	%		0.64	%C
Net investment income, before reimbursements		2.30	%		2.25	%		3.12	%		3.39	%		4.31	%		1.91	%		1.65	%		2.74	%		2.58	%C
Net investment income, net of reimbursements		2.30	%		2.25	%		3.12	%		3.39	%		4.32	%		1.93	%		2.00	%		2.82	%		2.60	%C
Portfolio turnover rate		50	%		144	%		75	%		96	%		157	%		50	%		144	%		75	%		96	%D

^A Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^B Not annualized.

^C Annualized.

^D Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

^E Portfolio turnover rate is for the period from November 1, 2008 through October 31, 2009.

70

American Beacon Intermediate Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class															A Class												C Class
Year Ended October 31,												March 2 to Oct. 31,			Year Ended October 31,									May 17 to Oct. 31,			Year Ended October 31,									Sept. 1 to Oct. 31,
2013			2012			2011			2010			2009			2013			2012			2011			2010			2013			2012			2011			2010
$	11.25		$	10.97		$	11.08		$	10.68		$	10.14		$	11.24		$	10.96		$	11.07		$	10.74		$	11.25		$	10.97		$	11.08		$	11.05
	(0.04	)		0.22			0.29			0.33			0.27			0.14			0.18			0.28			0.13			0.07			0.13			0.19			0.03
	(0.14	)		0.35			0.10			0.41			0.54			(0.33	)		0.36			0.09			0.33			(0.35	)		0.33			0.10			0.03
	(0.18	)		0.57			0.39			0.74			0.81			(0.19	)		0.54			0.37			0.46			(0.28	)		0.46			0.29			0.06
	(0.23	)		(0.24	)		(0.31	)		(0.34	)		(0.27	)		(0.21	)		(0.21	)		(0.29	)		(0.13	)		(0.13	)		(0.13	)		(0.21	)		(0.03	)
	(0.13	)		(0.05	)		(0.19	)		—			—			(0.13	)		(0.05	)		(0.19	)		—			(0.13	)		(0.05	)		(0.19	)		—
	(0.36	)		(0.29	)		(0.50	)		(0.34	)		(0.27	)		(0.34	)		(0.26	)		(0.48	)		(0.13	)		(0.26	)		(0.18	)		(0.40	)		(0.03	)
$	10.71		$	11.25		$	10.97		$	11.08		$	10.68		$	10.71		$	11.24		$	10.96		$	11.07		$	10.71		$	11.25		$	10.97		$	11.08
	(1.58	)%		5.20	%		3.65	%		7.01	%		8.05	%B		(1.69	)%		4.99	%		3.45	%		4.31	%B		(2.51	)%		4.21	%		2.70	%		0.56	%B
$	1,749		$	11,011		$	3,729		$	3,829		$	2,213		$	420		$	734		$	584		$	46		$	734		$	1,372		$	286		$	325
	0.87	%		0.84	%		0.86	%		0.83	%		1.22	%C		1.11	%		1.12	%		1.13	%		1.05	%C		1.94	%		1.87	%		1.86	%		2.09	%C
	0.79	%		0.79	%		0.79	%		0.76	%		0.81	%C		0.99	%		0.99	%		0.99	%		0.95	%C		1.74	%		1.73	%		1.72	%		1.74	%C
	1.74	%		1.80	%		2.59	%		2.88	%		3.33	%C		1.52	%		1.48	%		2.31	%		2.15	%C		0.69	%		0.75	%		1.61	%		0.88	%C
	1.82	%		1.86	%		2.66	%		2.95	%		3.74	%C		1.64	%		1.61	%		2.46	%		2.25	%C		0.89	%		0.89	%		1.75	%		1.23	%C
	50	%		144	%		75	%		96	%		157	%E		50	%		144	%		75	%		96	%D		50	%		144	%		75	%		96	%D

71

American Beacon Short-Term Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class															Y Class
	Year Ended October 31,															Year Ended October 31,									March 1 to Oct. 31,
	2013			2012			2011			2010			2009			2013			2012			2011			2010
Net asset value, beginning of period	$	8.78		$	8.71		$	8.89		$	8.83		$	8.58		$	8.77		$	8.73		$	8.90		$	8.84
Income from investment operations:
Net investment income (loss)		(0.09	)		0.28			0.26			0.23			0.22	A		0.13			0.10			0.15			0.15
Net gains (losses) from investments (both realized and unrealized)		0.13			(0.05	)		(0.25	)		0.10			0.33			(0.08	)		0.11			(0.15	)		0.08
Total income (loss) from investment operations		0.04			0.23			0.01			0.33			0.55			0.05			0.21			0.00			0.23
Less distributions:
Dividends from net investment income		(0.12	)		(0.16	)		(0.19	)		(0.27	)		(0.30	)		(0.10	)		(0.17	)		(0.17	)		(0.17	)
Distributions from net realized gains on securities		—			—			—			—			—			—			—			—			—
Total distributions		(0.12	)		(0.16	)		(0.19	)		(0.27	)		(0.30	)		(0.10	)		(0.17	)		(0.17	)		(0.17	)
Net asset value, end of period	$	8.70		$	8.78		$	8.71		$	8.89		$	8.83		$	8.72		$	8.77		$	8.73		$	8.90
Total return B		0.47	%		2.72	%		0.17	%		3.78	%		6.56	%		0.56	%		2.77	%		0.04	%		2.55	%C
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	150,509		$	217,545		$	156,937		$	131,314		$	124,791		$	1,173		$	272		$	344		$	51
Ratios to average net assets:
Expenses, before reimbursements		0.38	%		0.37	%		0.37	%		0.35	%		0.33	%		0.72	%		0.72	%		1.43	%		0.65	%D
Expenses, net of reimbursements		0.38	%		0.37	%		0.37	%		0.35	%		0.33	%		0.64	%		0.64	%		0.60	%		0.64	%D
Net investment income (loss), before reimbursements		0.90	%		1.50	%		1.73	%		2.27	%		2.61	%		0.58	%		1.16	%		0.57	%		1.45	%D
Net investment income (loss), net of reimbursements		0.90	%		1.50	%		1.73	%		2.27	%		2.62	%		0.66	%		1.24	%		1.40	%		1.47	%D
Portfolio turnover rate		105	%		18	%		65	%		60	%		140	%		105	%		18	%		65	%		60	%E

^A 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.

^B Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions.

^C Not annualized.

^D Annualized.

^E Portfolio turnover rate is for the period from November 1, 2009 through October 31, 2010.

72

American Beacon Short-Term Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class															A Class												C Class
Year Ended October 31,															Year Ended October 31,									May 17 to Oct. 31,			Year Ended October 31,									Sept. 1 to Oct. 31,
2013			2012			2011			2010			2009			2013			2012			2011			2010			2013			2012			2011			2010
$	8.79		$	8.72		$	8.89		$	8.84		$	8.59		$	8.78		$	8.71		$	8.89		$	8.84		$	8.79		$	8.72		$	8.90		$	8.88
	(0.58	)		(0.19	)		0.14			0.08			0.20	A		0.02			0.08			0.15			0.09			0.03			0.02			0.12			(0.04	)
	0.58			0.39			(0.15	)		0.21			0.34			(0.02	)		0.11			(0.18	)		0.07			(0.10	)		0.11			(0.21	)		0.08
	0.00			0.20			(0.01	)		0.29			0.54			0.00			0.19			(0.03	)		0.16			(0.07	)		0.13			(0.09	)		0.04
	(0.09	)		(0.13	)		(0.16	)		(0.24	)		(0.29	)		(0.08	)		(0.12	)		(0.15	)		(0.11	)		(0.02	)		(0.06	)		(0.09	)		(0.02	)
	—			—			—			—			—			—			—			—			—			—			—			—			—
	(0.09	)		(0.13	)		(0.16	)		(0.24	)		(0.29	)		(0.08	)		(0.12	)		(0.15	)		(0.11	)		(0.02	)		(0.06	)		(0.09	)		(0.02	)
$	8.70		$	8.79		$	8.72		$	8.89		$	8.84		$	8.70		$	8.78		$	8.71		$	8.89		$	8.70		$	8.79		$	8.72		$	8.90
	0.03	%		2.28	%		(0.12	)%		3.33	%		6.34	%		0.00	%		2.22	%		(0.33	)%		1.78	%C		(0.85	)%		1.46	%		(1.00	)%		0.48	%C
$	7,497		$	14,203		$	24,557		$	23,175		$	30,402		$	2,271		$	2,951		$	3,428		$	44		$	863		$	377		$	371		$	1
	0.90	%		0.89	%		0.90	%		0.86	%		0.85	%		1.13	%		1.12	%		1.38	%		1.02	%D		1.89	%		1.90	%		2.47	%		2.28	%D
	0.79	%		0.79	%		0.78	%		0.67	%		0.54	%		0.85	%		0.85	%		0.84	%		0.81	%D		1.60	%		1.59	%		1.55	%		1.60	%D
	0.39	%		0.99	%		1.18	%		1.75	%		1.89	%		0.15	%		0.75	%		0.49	%		0.49	%D		(0.65	)%		(0.03	)%		(0.43	)%		(3.57	)%D
	0.50	%		1.09	%		1.30	%		1.94	%		2.20	%		0.43	%		1.03	%		1.03	%		0.69	%D		(0.36	)%		0.28	%		0.49	%		(2.88	)%D
	105	%		18	%		65	%		60	%		140	%		105	%		18	%		65	%		60	%E		105	%		18	%		65	%		60	%E

73

American Beacon Funds^SM

Privacy Policy and Federal Tax Information

October 31, 2013 (Unaudited)

Privacy Policy

The American Beacon Funds recognize and respect the privacy of our shareholders. We are providing this notice to you so you will understand how shareholder information may be collected and used.

We may collect nonpublic personal information about you from one or more of the following sources:

• information we receive from you on applications or other forms;

• information about your transactions with us or our service providers; and

• information we receive from third parties.

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

We restrict access to your nonpublic personal information to those employees or service providers who need to know that information to provide products or services to you. To ensure the confidentiality of your nonpublic personal information, we maintain safeguards that comply with federal standards.

Federal Tax Information

Certain tax information regarding the Fund is required to be provided to shareholders based upon the Fund’s income and distribution for the taxable year ended October 31, 2013. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2013.

The Funds designated the following items with regard to distributions paid during the year ended December 31, 2012. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

	High Yield Bond			Retirement Income and Appreciation
Corporate Dividends Received Deduction		1.26	%		4.93	%
Qualified Dividend Income		1.36	%		8.41	%

Long-term capital gain distributions for the year ended October 31, 2013 were designated for the following Funds:

Retirement Income and Appreciation	$	1,003,533
Intermediate Bond		2,543,250

The Intermediate Bond Fund made $3,847,081 in short-term capital gain distributions.

Shareholders will receive notification in January 2014 of the applicable tax information necessary to prepare their 2013 income tax returns.

74

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

At its May 29, 2013 meeting, the Board of Trustees (“Board”) considered the renewal of the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Beacon Trust”) on behalf of each of their series (collectively, the “Funds”) and the renewal of each investment advisory agreement between the Manager and a subadvisor (each an “Investment Advisory Agreement”). The Management Agreement and the Investment Advisory Agreements are collectively referred to herein as the “Agreements.” In preparation for the Board’s consideration to renew and approve these Agreements, the Board and its Investment Committee undertook steps to gather and consider information furnished by the Manager, the subadvisors, Lipper, Inc. (“Lipper”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and each subadvisor.

In addition, the Board’s Investment Committee worked with Lipper to obtain relevant comparative information regarding the performance, fees and expenses of the Funds. The Investment Committee, for the benefit of all Trustees, sponsored a separate meeting on May 10, 2013 to consider the information provided by Lipper. Further, the Board took into consideration information furnished for the Board’s review and consideration throughout the year at regular Board and Investment Committee meetings, as well as information specifically prepared in connection with the renewal process.

In connection with the Board’s consideration of the Management Agreement and each Investment Advisory Agreement, the Trustees received and evaluated such information as they deemed necessary. The information requested by the Board included, among other information, the following materials. For various reasons, a subadvisor may not have provided responses to each requested item. In these instances, the Board considered the materials that were received from such subadvisor. References herein to the “firm” refer to the Manager and/or each applicable subadvisor.

• a description of any significant changes (actual or anticipated) to principal activities, personnel, services provided to the Funds, or any other area, including how these changes might affect the Funds;

• a copy of the firm’s most recent audited or unaudited financial statements, as well as Parts 1 and 2 of its Form ADV registration statement with the SEC;

• a summary of any material pending or anticipated litigation or regulatory proceedings involving the firm or its personnel, including the results of any recent regulatory examination or independent audit;

• a comparison of the performance of that portion of Fund assets managed or to be managed by each firm with the performance of other similar accounts managed by the firm, including a discussion of relative performance versus a peer group average and any actual or potential remedial measures if the firm’s longer-term performance was materially below that of the peer group;

• any actual or anticipated economies of scale in relation to the services the firm provides or will provide to each Fund and whether the current fee rates charged or to be charged to each Fund reflect these economies of scale for the benefit of the Fund’s investors;

• an analysis of compensation, including a comparison with fee rates charged to other clients for which similar services are provided, any proposed changes to the fee rate schedule, if applicable, and the effect of any fee waivers;

• a description of any payments made or to be made by the subadvisors to the Manager to support a Fund’s marketing efforts;

• a copy of the firm’s proxy voting policies and procedures and, if applicable, the name of the third-party voting service used by the firm;

• an evaluation of any other benefits to the firm or Funds as a result of their relationship, if any;

• confirmation that the firm’s financial condition would not impair its ability to provide high-quality advisory services to the Funds;

• a description of the scope of portfolio management services provided or to be provided to the Funds, including whether such services differ from the services provided to other clients, including other registered investment companies, and any advantages or disadvantages that might accrue to the Funds due to the firm’s involvement in other activities;

• a description of the personnel who are or will be assigned primary responsibility for managing the Funds, including any changes during the past year, and a discussion of the adequacy of current and projected staffing levels to service the Funds;

• a description of the basis upon which portfolio managers are compensated, including any “incentive” arrangements, and a description of the oversight mechanisms used to prevent a portfolio manager whose compensation is tied to performance of a Fund from taking undue risks;

• a description of the firm’s practices in monitoring the quality of portfolio holdings and in reviewing portfolio valuation, including any fair value determinations;

• a description of the firm’s use of derivatives, short positions, leveraged trading strategies or other similar trading strategies for the Funds;

• a discussion regarding the firm’s participation in third-party and/or proprietary “soft dollar” arrangements, if any, or other brokerage allocation policies with respect to Fund transactions;

• a discussion of the firm’s methodology for obtaining best execution, including any plans to improve the quality of execution in the upcoming year, and the use of any affiliated broker-dealers;

• a description of any actual or potential conflicts of interest anticipated in managing Fund assets;

• a discussion of whether the firm has identified any investment or operational matters that likely present a high risk in managing Fund assets;

75

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

• a description of the firm’s criteria for assessing counterparties and counterparty risk to the extent the firm enters into transactions with counterparties on a Fund’s behalf;

• a description of trade allocation procedures among accounts managed by the firm;

• a discussion of whether the firm utilizes “commission recapture” or “directed brokerage” arrangements for the benefit of the Funds or “step-out” transactions;

• a discussion of whether the firm receives, or anticipates receiving, other compensation, including any payment for electronic communication network liquidity rebates with respect to the Funds;

• a certification by the firm regarding the reasonable design of its compliance program;

• a summary of the results of the firm’s most recent annual review of its compliance program and a discussion of any material compliance problems encountered by a subadvisor since the most recent annual review;

• confirmation that the firm is prepared to provide to the Manager, directly or in summary form, any regulatory review comments that could have a material impact on services provided to the Funds;

• a discussion of whether, due to the firm’s trading activities on behalf of the Funds, the firm would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendments to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt;

• information regarding the firm’s code of ethics, insider trading policy and disaster recovery plan, including a description of any material changes thereto and a related certification of compliance by the firm;

• a description of the firm’s affiliation with any broker-dealer;

• a discussion of any anticipated change in the firm’s controlling persons; and

• verification of the firm’s insurance coverage with regards to the services provided to the Funds.

In addition to the foregoing, the Manager provided the following information specific to the renewal of the Management Agreement:

• a comparison of the performance of a share class of each Fund to comparable investment companies and appropriate indices, including comments on the relative performance of, as applicable, each subadvisor and each Fund versus the respective peer group average;

• a discussion, if applicable, of any underperformance by a subadvisor relative to its peer group and what, if any, remedial measures the Manager has or intends to take;

• a comparison of advisory fee rates and expense ratios for comparable mutual funds;

• a profit/loss analysis of the Manager;

• an analysis of any material complaints received from Fund shareholders;

• a description of the extent to which the Manager monitors the investment activities and financial conditions of each subadvisor to the Funds;

• a discussion of whether the Manager provides different types or levels of administrative and accounting related services to certain Funds;

• a description of the Manager’s distribution activities with respect to promoting sales of Fund shares, including any revenue sharing practices;

• a description of arrangements pursuant to which certain firms may make any direct or indirect payments to partially reimburse the Manager for its marketing or other expenses on behalf of the Funds;

• a description of the Manager’s securities lending practices and the fees received from such practices;

• a discussion of any rebate arrangements between the Manager and a service provider to the Funds pursuant to which the Manager receives direct or indirect benefits from the service provider;

• a description of the portfolio turnover rate for each Fund and, as applicable, each subadvisor to a Fund;

• a description of how expenses that are not readily identifiable to a particular Fund are allocated; and

• confirmation that the Manager complies with applicable CFTC and National Futures Association rules and requirements for applicable Funds and a discussion regarding whether, due to the Manager’s trading activities on behalf of other Funds, the Manager would need to register, or qualify for exclusion from registration, as a commodity pool operator or commodity trading advisor pursuant to the recent amendment to Rule 4.5 under the Commodity Exchange Act with respect to the Funds and, if so, whether the firm would so register or be exempt.

In connection with the Management Agreement and each Investment Advisory Agreement, the Board also obtained an analysis provided by Lipper that compared: (i) investment performance of each Fund versus comparable investment companies and appropriate indices; (ii) total Fund expenses of each Fund versus comparable mutual funds; and (iii) each Fund’s investment advisory fee rate versus comparable mutual funds. For certain Funds, the Board also considered information regarding the performance of the Manager and individual subadvisors with respect to their allocated portions of a Fund’s portfolio, net of management or subadvisory fees, as applicable, but not other Fund expenses. For each Fund with more than one class of shares, the class of shares used for comparative purposes was the class with the longest performance history, which in most cases was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

76

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Provided below is an overview of the primary factors the Trustees considered at the Investment Committee meeting on May 10, 2013 at which the Trustees reviewed the investment performance of the Manager and each subadvisor and the primary factors considered by the Board at its May 29, 2013 meeting at which the Board considered the renewal of the Management Agreement and Investment Advisory Agreements.

The Board did not identify any particular information that was most relevant to its consideration to renew or approve each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal and approval of each Agreement. The memorandum explained the regulatory requirements surrounding the Trustees’ process for evaluating investment advisors and the terms of the contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Funds and their shareholders.

Considerations With Respect to the Renewal of the Management Agreement and each Investment Advisory Agreement

In determining whether to renew the Management Agreement and each Investment Advisory Agreement on behalf of the Funds, the Trustees considered the best interests of each Fund separately. While the Management Agreement and the Investment Advisory Agreements for all of the Funds were considered at the May 29, 2013 meeting, the Board considered each Fund’s investment management and subadvisory relationships separately.

In each instance, the Board considered, among other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of a Fund and, as applicable, each subadvisor for a Fund; (3) the costs incurred by the Manager in rendering services to the Funds and its resulting profits or losses; (4) the extent to which economies of scale have been taken into account in setting each fee rate schedule; (5) whether fee rate levels reflect these economies of scale for the benefit of Fund investors; (6) comparisons of services and fee rates with contracts entered into by the Manager or a subadvisor or their affiliates with other clients (such as pension funds and other institutional funds); and (7) any other benefits derived or anticipated to be derived by the Manager or a subadvisor from their relationship with a Fund. The Trustees posed questions to various management personnel of the Manager regarding certain key aspects of the materials submitted in support of the renewal.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: each Fund’s long-term performance and the background and experience of key investment personnel at the Manager; the cost structure of the Funds; the Manager’s culture of compliance and support for compliance operations that reduce risks to the Funds; the Manager’s commitment to enhance the Funds’ product line and increase assets in the Funds; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; the Manager’s commitment to training employees; and the Manager’s efforts to retain key employees and maintain staff levels.

With respect to the renewal of each Investment Advisory Agreement, the Trustees considered the level of staffing, quality, background and experience of each subadvisor’s investment personnel responsible for managing the Funds, the size of the subadvisor and the subadvisor’s ability to continue to attract and retain qualified investment personnel. The Board also considered the adequacy of the resources committed to the Funds by each subadvisor, and whether those resources were commensurate with the needs of the Funds and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of each subadvisor. The Board also considered the subadvisors’ representations regarding their compliance programs and codes of ethics. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and each subadvisor were appropriate for each Fund and, thus, determined to renew the Management Agreement and the Investment Advisory Agreement for each Fund.

Investment Performance. The Board evaluated the comparative information provided by Lipper and the Manager regarding each Fund’s investment performance relative to its Lipper performance universe, Lipper performance group, and/or benchmark index(es). The Board considered the information provided by Lipper regarding its independent peer selection methodology to select all performance groups and universes. The Board also considered that the performance groups and universes selected by Lipper may not provide appropriate comparisons for each Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also considered in each instance the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to each Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Costs of the Services Provided to the Funds and the Profits Realized by the Manager from its Relationship with the Funds. In analyzing the cost of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager. The profits or losses were noted at both an aggregate level for all Funds and at an individual Fund level, with some Funds being profitable for the Manager and with the Manager sustaining losses with respect to other Funds. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Funds, the difference reflects the greater level of responsibility and regulatory requirements associated with managing the Funds.

The Board also noted that the Manager proposed to continue the expense waivers and reimbursements for certain Funds and classes that were in place during the last fiscal year. The Board further considered that with respect to each Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager plus the amount payable by the Manager to a subadvisor. The Board also considered that the Manager receives service and administrative fees to

77

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

compensate the Manager for providing administrative services to the Funds and to compensate third-party administrators and broker-dealers for services to Fund shareholders. In addition, the Board considered that the Manager receives management fees for overseeing the securities lending program on behalf of various Funds. The Board also noted that certain classes of the Funds maintain higher expense ratios in order to compensate third-party distributors.

In analyzing the cost of services for each subadvisor in connection with its investment advisory services to the Fund, the Board considered that, in many cases, the Manager has negotiated the lowest subadvisory fee rate a subadvisor charges for any comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board noted that subadvisors may not account for their profits on an account-by-account basis and, those that do, likely employ different methodologies in connection with these calculations.

Based on the foregoing information, the Board concluded that the profitability levels of the Manager were reasonable in light of the services performed by the Manager. A discussion regarding the Board’s considerations with respect to each Fund’s fee rates is set forth below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as the Funds grow and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that the Manager has negotiated breakpoints in many subadvisory fee rates. The Board also noted that, for purposes of determining the fee rates chargeable to the Funds, many subadvisors have agreed to take into account assets of AMR Corporation and its pension plans that are managed by the subadvisors. Thus, the Funds are able to receive lower effective fee rates.

In addition, the Board noted the Manager’s representation that many of the Funds benefit from economies of scale because comparably low fee rate levels are reflected in the current management and administration fee rates the Manager charges. The Board further noted the Manager’s representation that many of the Funds benefit from these comparably low fee rate levels despite not having yet reached an asset size at which economies of scale would traditionally be considered to exist, and the Manager’s belief that breakpoints are not appropriate at this time. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for each Fund provide for a reasonable sharing of benefits from any economies of scale with the Funds.

Benefits Derived from the Relationship with the Funds. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisors as a result of the advisory relationships with the Funds, including greater exposure in the marketplace with respect to the Manager’s or subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors.

In addition, the Manager noted that the Funds also derive benefits from their association with the Manager. Specifically, the Board noted the Manager’s representation that it provides services to most Funds at a lower than industry average cost. The Board considered that certain of the subadvisors reimburse the Manager for certain of its costs relating to distribution activities for the Funds. The Board also considered that the Funds did not pay commissions to any affiliated broker-dealer of the Manager or the relevant subadvisor during the most recent fiscal year ended December 31, 2012.

Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisors by virtue of their relationships with the Funds appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to Each Fund

The performance comparisons below were made versus each Fund’s Lipper performance universe median, Lipper performance group median and/or benchmark index. References below to each Fund’s Lipper performance group and Lipper performance universe are to the respective group or universe of comparable mutual funds included in the analysis provided by Lipper. A Lipper performance group consists of the Fund and a representative sample of funds with similar investment classifications and objectives as the Fund, as selected by Lipper. A Lipper performance universe is an expansion of the performance group, providing a broader view of performance across the Fund’s investment classification/objective and allowing for a more extensive comparison. In reviewing the performance, the Trustees viewed longer-term performance over a full market cycle, typically five years or longer, as the most important consideration, because relative performance over shorter periods may be significantly impacted by market or economic events that do not reflect manager skill.

The expense comparisons below were made versus each Fund’s Lipper expense universe median and Lipper expense group median. References below to each Fund’s expense group and expense universe are to the respective group or universe of comparable mutual funds included in the analysis by Lipper. A Lipper expense group consists of the Fund and a representative sample of funds with similar operating structures, as selected by Lipper. A Lipper expense universe includes all funds in the investment classification/objective with a similar load type to the share class of the Fund included in the Lipper comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Trustees also considered a Fund’s Morningstar fee level category. In reviewing expenses, the Trustees considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the use of soft dollars was requested from the Manager and all subadvisors and was considered by the Trustees.

78

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Additional Considerations and Conclusions with Respect to the American Beacon High Yield Bond Fund

In considering the renewal of the Management Agreement for the American Beacon High Yield Bond Fund, the Trustees considered the following additional factors: (1) the American Beacon High Yield Bond Fund outperformed the Lipper performance universe median for the one- and three-year periods ended March 31, 2013, but underperformed for the five- and ten-year periods; (2) the Fund’s performance was equal to the Lipper performance group median for the five-year period ended March 31, 2013, but underperformed for the one- and three-year periods; (3) the Manager’s explanation that the Fund’s longer-term performance, relative to the performance universe, was adversely impacted by overweighting in certain sectors; (4) the expense ratio of the Institutional Class of the Fund was higher than the median of its Lipper expense universe and Lipper expense group; (5) the Institutional Class of the Fund was categorized by Morningstar as having a high expense ratio; (6) PENN Capital Management Company, Inc. (“PENN”) is relatively new to the Fund; and (7) the level of the Fund’s expense ratio is likely to decrease as the Fund grows.

In considering the renewal of the Investment Advisory Agreement with Franklin Advisors, Inc. (“Franklin”), Logan Circle Partners, L.P. (“Logan Circle”) and PENN, the Trustees considered the following additional factors: (1) Franklin outperformed the Lipper performance universe median for the one-, three- and five-year periods ended March 31, 2013; (2) Logan Circle outperformed the Lipper performance universe median for the one- and three-year periods ended March 31, 2013; (3) PENN outperformed the Lipper performance universe median for the one-year period ended March 31, 2013; (4) representations by each subadvisor regarding fee rates charged by the subadvisor to other comparable clients; and (5) the Manager’s recommendation to continue to retain each subadvisor.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisors under the Agreements are fair and reasonable; (2) determined that the American Beacon High Yield Bond Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon High Yield Bond Fund.

Additional Considerations and Conclusions with Respect to the American Beacon Retirement Income and Appreciation Fund

In considering the renewal of the Management Agreement for the American Beacon Retirement Income and Appreciation Fund, the Trustees considered the following additional factors: (1) the American Beacon Retirement Income and Appreciation Fund outperformed the Lipper performance universe median for the five-year period ended March 31, 2013, but underperformed for the one- and three-year periods; (2) the Fund outperformed the Lipper performance group median for the one- and five-year periods ended March 31, 2013, but underperformed for the three-year period; (3) the Manager’s representation that, due to the diverse nature of the Lipper performance universe and group, the Fund’s performance relative to its benchmark index may be more appropriate than a comparison to the Fund’s performance universe or group; (4) the Fund outperformed its benchmark index for the one-year period ended March 31, 2013, but underperformed for the three- and five-year periods; (5) the Fund’s investment strategy includes a fixed allocation between investment grade bonds and a convertibles strategy and is appropriate for investors desiring this type of investment exposure; (6) the Manager outperformed the Lipper performance universe median with respect to its allocated portion of the Fund’s assets for the five-year period ended March 31, 2013, but underperformed for the one- and three-year periods; (7) the Manager outperformed its applicable benchmark index for the one-, three- and five-year periods ended March 31, 2013; (8) the expense ratio of the Fund was lower than the median of its Lipper expense universe and Lipper expense group; and (9) the Investor Class of the Fund was categorized by Morningstar as having a high expense ratio.

In considering the renewal of the Investment Advisory Agreement with Calamos Advisors LLC (“Calamos”), the Trustees considered the following additional factors: (1) Calamos outperformed the Lipper performance universe median for the one-, three- and five-year periods ended March 31, 2013; (2) Calamos underperformed its applicable benchmark index for the one-, three- and five-year periods ended March 31, 2013; (3) representations by Calamos that, for fee rate comparison purposes, it does not manage other accounts comparable to the Fund; and (4) the Manager’s recommendation to continue to retain Calamos.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and Calamos under the Agreements are fair and reasonable; (2) determined that the American Beacon Retirement Income and Appreciation Fund and its shareholders would benefit from the Manager’s and Calamos’ continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon Retirement Income and Appreciation Fund.

Additional Considerations and Conclusions with Respect to the American Beacon Intermediate Bond Fund

In considering the renewal of the Management Agreement for the American Beacon Intermediate Bond Fund, the Trustees considered the following additional factors: (1) the American Beacon Intermediate Bond Fund outperformed the Lipper performance universe median for the ten-year period ended March 31, 2013, but underperformed for the one-, three- and five-year periods; (2) the Fund underperformed the Lipper performance group median for the one-, three- and five-year periods ended March 31, 2013; (3) the Manager’s representation that the Fund’s performance relative to its benchmark index may be more appropriate as compared to the Lipper performance universe or group because the Lipper performance universe and group include certain funds that invest a portion of their assets in high yield securities, whereas the American Beacon Intermediate Bond Fund invests only in investment-grade securities; (4) the Fund outperformed its benchmark index for the one- and ten-year periods ended March 31, 2013, but underperformed its benchmark index for the three- and five-year periods; (5) the Manager outperformed the Lipper performance universe median with respect to its allocated portion of the Fund’s assets for the ten-year period ended March 31, 2013, but underperformed for the one-, three- and five-year periods; (6) the expense ratio of the Institutional Class of the Fund was lower than the median of its Lipper expense universe and Lipper expense group; and (7) the Institutional Class of the Fund was categorized by Morningstar as having a low expense ratio.

79

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

In considering the renewal of the Investment Advisory Agreement with Barrow, Hanley, MeWhinney & Strauss, LLC (“Barrow”), the Trustees considered the following additional factors: (1) Barrow outperformed the Lipper performance universe median with respect to its allocated portion of the Fund’s assets for the five- and ten-year periods ended March 31, 2013, but underperformed for the one- and three-year periods; (2) representations by Barrow regarding the fee rates it charges other comparable clients; (3) the Manager’s recommendation to continue to retain Barrow.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and Barrow under the Agreements are fair and reasonable; (2) determined that the American Beacon Intermediate Bond Fund and its shareholders would benefit from the Manager’s and the subadvisor’s continued management of the Fund; and (3) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon Intermediate Bond Fund.

Additional Considerations and Conclusions with Respect to the American Beacon Short-Term Bond Fund

In considering the renewal of the Management Agreement for the American Beacon Short-Term Bond Fund, the Trustees considered the following additional factors: (1) the American Beacon Short-Term Bond Fund underperformed the Lipper performance universe median for the one-, three-, and five-year periods ended March 31, 2013, but outperformed for the ten-year period; (2) the Fund outperformed the Lipper performance group median for the five-year period ended March 31, 2013, but underperformed for the one- and three-year periods; (3) the Manager’s representation that the Fund’s performance relative to its benchmark index may be more appropriate as compared to the Lipper performance universe or group because the Lipper performance universe and group include certain funds that invest a portion of their assets in high yield securities, whereas the American Beacon Short-Term Bond Fund may invest only in investment-grade securities; (4) the Fund outperformed its benchmark index for the one-, three-, five- and ten-year periods ended March 31, 2013; (5) the expense ratio of the Institutional Class of the Fund was lower than the median of its Lipper expense universe and Lipper expense group; and (6) the Institutional Class of the Fund was categorized by Morningstar as having a below average expense ratio.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager under the Management Agreement are fair and reasonable; (2) determined that the American Beacon Short-Term Bond Fund and its shareholders would benefit from the Manager’s continued management of the Fund; and (3) approved the renewal of the Management Agreement with respect to the American Beacon Short-Term Bond Fund.

80

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. Unless otherwise indicated, the address of each person listed below is 4151 Amon Carter Boulevard, MD 2450, Fort Worth, Texas 76155. Each Trustee oversees twenty-six funds in the fund complex that includes the Trust and the American Beacon Select Funds. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES
	Term
	Lifetime of Trust until removal, resignation or retirement*
Gerard Arpey (55)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Chairman and Chief Executive Officer, AMR Corp. and American Airlines; Inc. (2003-2011); Director, S. C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present).
Alan D. Feld** (76)	Trustee since 1996	Sole Shareholder of a professional corporation which is a Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Mileage Funds (1996-2012); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Master Trust (1996-2012).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
W. Humphrey Bogart (69)	Trustee since 2004	Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Brenda A. Cline (52)	Trustee since 2004	Executive Vice President, Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Eugene J. Duffy (59)	Trustee since 2008	Principal and Executive Vice President, Paradigm Asset Management (1994-Present); Director, Sunrise Bank of Atlanta (2008-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Thomas M. Dunning (71)	Trustee since 2008	Chairman Emeritus (2008-Present) and Chairman (1998-2008)), Lockton Dunning Benefits (consulting firm in employee benefits); Lead Director, Oncor Electric Delivery Company LLC (2007-Present); Board Member, BancTec (2010-Present); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Richard A. Massman (70)	Trustee since 2004 Chairman since 2008	Consultant and General Counsel Emeritus (2009-Present) and Senior Vice President and General Counsel (1994-2009), Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities); Trustee, American Beacon Mileage Funds (2004-2012); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Master Trust (2004-2012).
Barbara J. McKenna, CFA (50)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present).

81

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
R. Gerald Turner (67) 225 Perkins Admin. Bldg. Southern Methodist Univ. Dallas, Texas 75275	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-Present); Director, Kronus Worldwide Inc. (chemical manufacturing) (2003-Present); Trustee, American Beacon Mileage Funds (2001-2012); Trustee, American Beacon Select Funds (2001-Present); Trustee, American Beacon Master Trust (2001-2012).
Paul J. Zucconi,CPA (73)	Trustee since 2008	Director, Affirmative Insurance Holdings, Inc. (producer of nonstandard automobile insurance) (2004-Present); Director, Titanium Metals Corporation (producer of titanium melted and mill products) (2002-2012); Director, Torchmark Corporation (life and health insurance products) (2002-Present); Director, Charter Bank (community bank services and products) (2010-2011); Trustee, American Beacon Mileage Funds (2008-2012); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Master Trust (2008-2012).
Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (58)	President since 2009 Executive Vice President since 2009	President, CEO and Director (2009-Present), American Beacon Advisors, Inc.; President (2009-Present), President, CEO and Director (2009-Present), Lighthouse Holdings, Inc.; President and CEO (2009-Present), Lighthouse Holdings Parent, Inc.; President (2009-Present), American Beacon Select Funds; President (2009-Present), American Beacon Mileage Funds; President (2008-2012), Touchstone Investments; President (2003-2007), CEO (2004-2007), AIM Distributors.
Rosemary K. Behan (54)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Legal and Compliance, American Beacon Advisors, Inc. (2006-Present); Secretary (2008-Present), Lighthouse Holdings, Inc.; Secretary (2008-Present), Lighthouse Holdings Parent, Inc.
Brian E. Brett (53)	VP since 2004	Vice President, Director of Sales, American Beacon Advisors, Inc. (2004-Present).
Wyatt Crumpler (47)	VP since 2007	Chief Investment Officer (2012-Present), Vice President, Asset Management (2009-2012), and Vice President, Trust Investments (2007-2009), American Beacon Advisors, Inc.
Erica Duncan (43)	VP Since 2011	Vice President, Marketing and Client Services (2011-Present), American Beacon Advisors, Inc.; Supervisor, Brand Marketing (2010-2011), Invesco; Supervisor, Marketing Communications (2009-2010) and Senior Financial Writer (2004-2009), Invesco AIM.
Michael W. Fields (59)	VP since 1989	Chief Fixed Income Officer (2011-Present) and Vice President, Fixed Income Investments, American Beacon Advisors, Inc. (1988-2011); Director, American Beacon Global Funds SPC (2002-2011); Director, American Beacon Global Funds plc (2007-2009).
Melinda G. Heika (52)	Treasurer since 2010	Treasurer (2010-Present), and Controller (2005-2009), American Beacon Advisors, Inc.; Treasurer (2010-Present), Lighthouse Holdings, Inc.; Treasurer (2010-Present), Lighthouse Holdings Parent, Inc.
Terri L. McKinney (49)	VP since 2010	Vice President, Enterprise Services (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.

82

Trustees and Officers of the American Beacon Funds^SM

(Unaudited)

Name, Age and Address	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS	Term
	One Year
Jeffrey K. Ringdahl (38)	VP since 2010	Chief Operating Officer, American Beacon Advisors, Inc. (2010-Present); Vice President, Product Management, Touchstone Advisors, Inc. (2007-2010); Senior Director, Business Integration, Fidelity Investments (2005-2007).
Samuel J. Silver (50)	VP Since 2011	Vice President, Fixed Income Investments (2011-Present) and Senior Portfolio Manager, Fixed Income Investments (1999-2011), American Beacon Advisors, Inc.
Christina E. Sears (42)	Chief Compliance Officer since 2004 and Asst. Secretary since1999	Chief Compliance Officer (2004-Present) and Senior Compliance Analyst (1998-2004), American Beacon Advisors, Inc.
John J. Okray (39)	Asst. Secretary since 2010	Deputy General Counsel (2012-Present) and Assistant General Counsel (2010-2012), American Beacon Advisors, Inc.; Asst. Secretary (2010-Present), Lighthouse Holdings, Inc.; Asst. Secretary (2010-Present), Lighthouse Holdings Parent, Inc.; Vice President, OppenheimerFunds, Inc. (2004-2010).
Sonia L. Bates (56)	Asst. Treasurer since 2011	Director, Tax and Financial Reporting (2011—Present) and Manager, Tax and Financial Reporting (2005-2010), American Beacon Advisors, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings, Inc.; Asst. Treasurer (2011-Present), Lighthouse Holdings Parent, Inc.

* The Board has adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 72, provided, however, that the board may determine to grant one or more annual exemptions to this requirement.

** Mr. Arpey is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Arpey previously served as CEO of AMR Corp., which has a material relationship with the Manager.

*** Mr. Feld is deemed to be an “interested person” of the Trust, as defined by the 1940 Act. Mr. Feld’s law firm of Akin, Gump, Strauss, Hauer & Feld LLP has provided legal services within the past two years to the Manager and one or more of the Trust’s sub-advisors.

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85

Delivery of Documents

eDelivery is NOW AVAILABLE – Stop traditional mail delivery and receive your

shareholder reports and summary prospectus on-line. Sign up at

www.americanbeaconfunds.com

If you invest in the Fund through a financial institution, you may be able to receive the Fund’s regulatory mailings, such as the Prospectus, Annual Report and Semi-Annual Report, 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: american_beacon.funds@ambeacon.com	On the Internet: Visit our website at www.americanbeaconfunds.com
By Telephone: Institutional, Y, and Investor Classes Call (800) 658-5811 AMR ClassSM Call (800) 345-2345	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-Q as of the first and third fiscal quarters. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov The Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. A complete schedule of each Fund’s portfolio holdings is also made available on the Funds’ website at www.americanbeaconfunds.com approximately twenty days after the end of each month.	Availability of Proxy Voting Policy and Records A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN 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 or Summary Prospectus.

American Beacon Funds, American Beacon High Yield Bond Fund, American Beacon Enhanced Income Fund, American Beacon Intermediate Bond Fund and American Beacon Short-Term Bond Fund are service marks of American Beacon Advisors, Inc.

AR 10/13

ITEM 2. CODE OF ETHICS.

The Trust has adopted a code of ethics that applies to its principal executive and financial officers (the “Code”). The Trust amended its code November 12, 2013 to disclose the removal of terminated Investment Companies. The Trust did not grant any waivers to the provisions of the Code during the period covered by the shareholder report presented in Item 1. The Code is filed herewith as Exhibit 99.CODE.ETH.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Trust’s Board of Trustees has determined that Mr. Paul Zucconi, a member of the Trust’s Audit and Compliance Committee, is an “audit committee financial expert” as defined in Form N-CSR. Mr. Paul Zucconi is “independent” as defined in Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a)

Audit Fees	Fiscal Year Ended
$27,203		6/30/2012	*
$203,016		8/31/2012	*
$372,284		10/31/2012	*
$54,406		11/30/2012	*
$163,393		12/31/2012	*
$209,783		8/31/2013
$384,699		10/31/2013
$168,847		12/31/2013
$105,556		1/31/2014

(b)

Audit-Related Fees	Fiscal Year Ended
$0		6/30/2012
$0		8/31/2012
$0		10/31/2012
$0		11/30/2012
$0		12/31/2012
$0		8/31/2013
$0		10/31/2013
$0		12/31/2013

* Change from previous reporting.

(c)

Tax Fees	Fiscal Year Ended
$8,250		6/30/2012	*
$34,250		8/31/2012	*
$69,963		10/31/2012	*
$15,000		11/30/2012	*
$22,250		12/31/2012	*
$36,250		8/31/2013
$70,713		10/31/2013
$20,000		12/31/2013
$10,500		1/31/2014

* Change from previous reporting.

(d)

All Other Fees	Fiscal Year Ended
$0		6/30/2012
$0		8/31/2012
$0		10/31/2012
$0		11/30/2012
$0		12/31/2012
$0		8/31/2013
$0		10/31/2013
$0		12/31/2013

(e) (1) Pursuant to its charter, the Trust’s Audit and Compliance Committee shall have the following duties and powers pertaining to pre-approval of audit and non-audit services provided by the Trust’s principal accountant:

• to approve, prior to appointment, the engagement of auditors to annually audit and provide their opinion on the Trusts’ financial statements, and, in connection therewith, reviewing and evaluating matters potentially affecting the independence and capabilities of the auditors;

• to approve, prior to appointment, the engagement of the auditors to provide non-audit services to the Trusts, an investment adviser to any series of the Trusts or any entity controlling, controlled by, or under common control with an investment adviser (“adviser affiliate”) that provides ongoing services to the Trusts, if the engagement relates directly to the operations and financial reporting of the Trusts;

• to consider whether the non-audit services provided by a Trust’s auditor to an investment adviser or any adviser affiliate that provides ongoing services to a series of the Trusts, which services were not pre-approved by the Committee, are compatible with maintaining the auditor’s independence;

• to review the arrangements for and scope of the annual audit and any special audits; and

• to review and approving the fees proposed to be charged to the Trusts by the auditors for each audit and non-audit service.

The Audit and Compliance Committee may delegate any portion of its authority, including the authority to grant pre-approvals of audit and permitted non-audit services, to a subcommittee of one or more members. Any decisions of the subcommittee to grant pre-approvals shall be presented to the full audit committee at its next regularly scheduled meeting.

(e) (2) None of the fees disclosed in paragraphs (b) through (d) above were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g)

Aggregate Non-Audit Fees for Services Rendered to the:

Registrant	Adviser	Adviser’s Affiliates Providing Ongoing Services to Registrant	Fiscal Year Ended
$8,250	$0	N/A		6/30/2012	*
$34,250	$0	N/A		8/31/2012	*
$69,963	$0	N/A		10/31/2012	*
$15,000	$0	N/A		11/30/2012	*
$22,500	$0	N/A		12/31/2012	*
$36,250	$0	N/A		8/31/2013
$70,713	$0	N/A		10/31/2013
$20,000	$0	N/A		12/31/2013
$10,500	$0	N/A		1/31/2014

* Change from previous reporting.

(h) 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

By	/s/ Gene L. Needles, Jr.
Gene L. Needles, Jr.
President
American Beacon Funds

Date: January 9, 2014

By	/s/ Melinda G. Heika
Melinda G. Heika
Treasurer
American Beacon Funds

Date: January 9, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	/s/ Gene L. Needles, Jr.
Gene L. Needles, Jr.
President
American Beacon Funds

Date: January 9, 2014

By	/s/ Melinda G. Heika
Melinda G. Heika
Treasurer
American Beacon Funds

Date: January 9, 2014

EX-99.CODE ETH

EXHIBIT 99.CODE ETH

For period ended 10/31/13

Registrant Name: American Beacon Funds

File Number: 811-4984

AMERICAN BEACON FUNDS

AMERICAN BEACON SELECT FUNDS

Code of Ethics for Principal Executive and Financial Officers

Dated: November 12, 2013

Purpose

The American Beacon Funds and the American Beacon Select Funds (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 Information 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

EXHIBIT 99.CERT

For period ended 10/31/2013

Registrant Name: American Beacon Funds

File Number: 811-4984

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.

Date: January 9, 2014	/s/ Melinda G. Heika
	Melinda G. Heika
	Treasurer
	American Beacon Funds

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.

Date: January 9, 2014	/s/ Gene L. Needles, Jr.
	Gene L. Needles, Jr.
	President
	American Beacon Funds

EX-99.906CERT

EXHIBIT 99.906CERT

For period ended 10/31/2013

Registrant Name: American Beacon Funds

File Number: 811-4984

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 October 31, 2013 (the “Form N-CSR”) fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Gene L. Needles, Jr.	/s/ Melinda G. Heika
Gene L. Needles, Jr.	Melinda G. Heika
President	Treasurer
American Beacon Funds	American Beacon Funds

Date: January 9, 2014

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.