N-CSR/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR/A

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: August 31, 2014

Date of reporting period: August 31, 2014

ITEM 1. REPORT 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	42
Notes to the Financial Statements	46
Financial Highlights	72
Additional Information	Back Cover

Important Information: Indexes are unmanaged and one cannot invest directly in an index. Because the Fund has a flexible approach to investing, the risks of the Fund are likewise varied. The primary risks fall into one of several broad categories including high yield securities risk, credit risk, foreign investment risk, derivatives risk, interest rate risk and non-diversification risk. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk and their value may fluctuate in response to the market’s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee, there is no assurance that private guarantors will meet their obligations. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when more advantageous. Investing in derivatives could result in losing more than the amount invested. Diversification does not ensure against loss. 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. Bonds and bond funds with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise. 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 August 31, 2014

Dear Shareholders,   The global markets have continued the process of building on the early signs of the economic recovery over the past year. Both in the U.S. and abroad, government and political leaders have continued to be mindful of the fragile nature of the recovery and have proved willing and able to provide the necessary monetary stimulus to keep their economies on track. The Eurozone finally broke out of its recession during the reporting period and as seen in the U.S., the European Central Bank quickly reacted to the first signs of the recovery faltering by announcing their own form of quantitative easing in June 2014.

We believe it takes an experienced investor to navigate the complexities of an ever-changing global economy. That is just one reason that we at American Beacon Advisors believe in actively managed funds and work diligently to bring you the most respected asset managers as sub-advisors for our funds.

For the 12-month period ended August 31, 2014, the American Beacon Flexible Bond Fund (Investor Class) returned 3.23%.

Thank you for your continued interest in American Beacon Funds. We are pleased to have a broad range of products that cover the global equity and fixed income markets. For additional information about the Funds or to access your account information, please visit our website www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Global Bond Market Overview

August 31, 2014 (Unaudited)

The bond market drifted lower in price to begin the reporting period, with the U.S. Treasury 10-year yield ultimately topping out at 2.98% on September 5, 2013. From this point, bonds staged a two-month rally that was fueled in part by the Federal Reserve Bank’s (the “Fed”) surprising September 18, 2013 announcement that it would not taper the size of its quantitative easing (“QE”) program for the time being. The rally proved to be short-lived as yields again moved higher in November and December as better economic and employment data made a near-term tapering more likely. The Fed announced its first reduction of asset purchases in December, when it shrank the monthly size of QE by $10 billion. The combination of QE tapering and a stronger domestic economy pushed the yield on the 10-year note close to 3% by the end of 2013.

Bonds began to rally globally in early 2014. Severe winter weather and weak gross domestic product prints combined with unrest in the Middle East and the Russia-Ukraine conflict pulled investors to the relative safety of fixed income. Investment grade, high yield debt, and mortgages also rallied during this time. Despite the relatively low default rate, there were some notable issues during the year. Puerto Rico and Argentina both worked through high-profile debt restructurings and the city of Detroit filed for bankruptcy. Toward the end of summer, liquidity concerns caused investors to redeem their holdings of muni and high yield mutual funds, sending yields higher in these areas.

In Europe, sovereign debt staged an impressive rally due to deflationary concerns, with the German 10-year bund rallying to 0.89% on August 29, 2014 and the French 10-year closing at 1.25% versus the U.S. 10-year yielding 2.35%. In an attempt to spur lending and jumpstart Europe’s idling economy, European Central Bank (“ECB”) officials implemented several monetary easing measures including targeted long-term refinancing operations to provide banks with low-interest rate loans. Additionally, the ECB moved the deposit rate on excess reserves to below zero. Elsewhere, other countries attempted to devalue their currency in an attempt to increase exports, notably in Japan where the Bank of Japan has continued its massive QE program.

2

American Beacon Flexible Bond Fund ^SM

Performance Overview

August 31, 2014 (Unaudited)

The Investor Class of the Flexible Bond Fund (the “Fund”) returned 3.23% for the twelve months ended August 31, 2014. The Fund outperformed the BofA Merrill Lynch 3-Month LIBOR Index (the “Index”) return of 0.25%. The performance objective of the Fund is to generate positive total returns over a full market cycle and it successfully achieved positive absolute returns during the twelve-month period.

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

For the period from 7/5/11 through 8/31/14

Total Returns for the Period ended 8/31/14

	1 Year			3 Years			Since Inception (7/5/2011)			Value of $10,000 7/5/11- 8/31/14
Institutional Class (1,2,4)		3.50	%		3.50	%		3.55	%	$	11,164
Y Class (1,2,4)		3.41	%		3.40	%		3.46	%		11,133
Investor Class(1,2,4)		3.23	%		3.17	%		3.31	%		11,081
A Class with sales charge(1,2,4)		-1.81	%		1.35	%		1.53	%		10,490
A Class without sales charge(1,2,4)		3.12	%		3.00	%		3.11	%		11,014
C Class with sales charge (1,2,4)		1.26	%		2.30	%		2.54	%		10,825
C Class without sales charge (1,2,4)		2.26	%		2.30	%		2.54	%		10,825
BofA Merrill Lynch 3-Month LIBOR Index(3)		0.25	%		0.35	%		0.33	%		10,106
Barclays Capital U.S. Aggregate Index (3)		5.66	%		2.91	%		3.81	%		11,253

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the

performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. A Class shares have a maximum sales charge of 4.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

2. A portion of the fees charged to each Class of the Fund was waived since inception. Performance prior to waiving fees was lower than the actual returns shown since inception.

3. The BofA Merrill Lynch U.S. Dollar 3-Month LIBOR Index represents the London interbank offered rate (LIBOR) with a constant 3-month average maturity. LIBOR is a composite of the rates of interest at which banks borrow from one another in the London market, and it is a widely used benchmark for short-term interest rates. The Barclays Capital U.S. Aggregate Index is a market weighted index of government, corporate, mortgage-backed and asset-backed fixed-rate debt securities of all maturities.

4. 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 1.24%, 1.28%, 1.56%, 1.59%, and 2.35%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund’s focus on investing in higher-quality fixed income securities proved overall to be beneficial in achieving its return objective. Greater than 80% of the assets are invested in investment grade securities, which generally were positive during the period. However, the Fund’s AAA-rated holdings generated slight negative returns during the period, declining 1.2%. This underperformance was more than offset by the below investment grade holdings, as the BB-rated bucket returned 11.8% during the fiscal year.

The Fund’s sizeable investment in Foreign Sovereign debt was a positive during the year, returning 15.1%. The Fund also realized double-digit returns in the ABS and TIPS sectors (14.5% and 10.0%, respectively), which helped offset the low Cash return of 0.1%.

The Fund’s Corporate fixed income exposure provided a positive contribution to the return generated over the period. Among the Corporate holdings, positioning in the Finance sector had the most significant impact. At 21.6% of assets, the Finance sector is the second largest

3

American Beacon Flexible Bond Fund ^SM

Performance Overview

August 31, 2014 (Unaudited)

allocation of the Fund behind Foreign Sovereign debt and returned 5.6% during the year.

In anticipation of rising interest rates, the Fund maintained a bias toward securities with shorter durations and realized positive total returns on holdings with durations of less than three years. However, during the Fund’s fiscal year, the U.S. Treasury yield curve experienced a large rally in longer dated maturities, which resulted in a return of 18.9% on the Fund’s holdings in the 10-30 year duration bucket.

The Fund has the flexibility to utilize derivative instruments and will do so to enhance return, hedge risk, gain efficient exposure to an asset class, or to manage liquidity. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage. During the period, the Fund realized losses from investments made in futures and options.

Looking forward, the Fund’s investment managers will continue to allocate investments across a wide range of global investment opportunities, seeking to achieve the Fund’s goal of positive total returns regardless of market conditions over a full market cycle.

Top Ten Holdings (% Net Assets)

U.S. Treasury Note/Bond, 1.625%, Due 7/31/2019		7.9
U.S. Treasury Note/Bond, 2.500%, Due 5/15/2024		4.4
Brazil, Letra Tesouro Nacional, 0.010%, Due 1/1/2018		2.5
U.S. Treasury Inflation Protected Securities, 0.125%, Due 7/15/2024		2.4
Mexican Bonos Desarr, 7.750%, Due 11/13/2042		2.0
Spain, Bonos Y Obligaciones del Estado, 2.750%, Due 10/31/2024, 144A		1.9
U.S. Treasury Note/Bond, 0.875%, Due 7/15/2017		1.8
Ginnie Mae REMIC Trust, 0.974%, Due 7/20/2062		1.8
Brazil Government Bond, 10.000%, Due 1/1/2023		1.6
U.S. Treasury Floating Rate Note, 0.100%, Due 7/31/2016		1.5
Total Fund Holdings	467

Sector Allocation (% Investments)

Sovereign	28.0	%
Treasuries	22.8	%
Finance	18.3	%
Collateralized Mortgage Obligations	6.2	%
Short-Term Investments	5.5	%
Asset-Backed Obligations	4.8	%
Service	4.7	%
Manufacturing	3.1	%
Foreign Collateralized Mortgage Obligations	1.4	%
Energy	1.1	%
Consumer	0.9	%
Telecommunications	0.7	%
Agency Collateralized Mortgage Obligations	0.7	%
Commercial Mortgage-Backed Obligations	0.6	%
Banks	0.5	%
Utilities	0.4	%
Transportation	0.2	%
U.S. Agency Obligations	0.1	%

Country Allocation (% Investments)

United States	49.5
United Kingdom	7.4
Brazil	6.4
Mexico	5.4
Spain	5.1
Italy	2.7
Netherlands	2.5
South Korea	2.4
South Africa	1.9
Portugal	1.5
Poland	1.5
Hungary	1.4
Indonesia	1.4
Slovenia	1.3
New Zealand	1.0
Cayman Islands	0.8
Malaysia	0.8
France	0.5
Singapore	0.5
Chile	0.4
Ireland	0.4
Switzerland	0.4
Norway	0.3
Denmark	0.3
Canada	0.3
Luxembourg	0.2
Virgin Islands British	0.2
Japan	0.1
China	0.1
Hong Kong	0.1
European Union	0.1
Bulgaria	0.1
Finland	0.1
Egypt	0.1
Austria	0.1
Turkey	0.1
Namibia	0.1
Marshall Islands	0.1
Thailand	0.1
United Arab Emirates	0.1
Kazakhstan	0.1
Jersey	0.1

4

American Beacon Flexible Bond Fund ^SM

Fund Expenses

August 31, 2014 (Unaudited)

Fund Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on shares purchased 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 March 1, 2014 through August 31, 2014.

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 sales charges (loads). 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 3/1/14		Ending Account Value 8/31/14		Expenses Paid During Period* 3/1/14 - 8/31/14
Institutional Class
Actual	$	1,000.00	$	1,021.67	$	4.59
Hypothetical **	$	1,000.00	$	1,020.67	$	4.58
Y Class
Actual	$	1,000.00	$	1,021.18	$	5.04
Hypothetical **	$	1,000.00	$	1,020.21	$	5.04
Investor Class
Actual	$	1,000.00	$	1,020.95	$	6.47
Hypothetical **	$	1,000.00	$	1,018.80	$	6.46
A Class
Actual	$	1,000.00	$	1,020.36	$	6.93
Hypothetical **	$	1,000.00	$	1,018.35	$	6.92
C Class
Actual	$	1,000.00	$	1,016.65	$	10.73
Hypothetical **	$	1,000.00	$	1,014.57	$	10.71

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.90%, 0.99%, 1.27%, 1.36%, and 2.11% 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.

5

American Beacon Flexible Bond Fund ^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon Flexible Bond Fund:

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of the American Beacon Flexible Bond Fund (one of the funds constituting the American Beacon Funds) (the “Fund”), as of August 31, 2014, 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 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 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 August 31, 2014, 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 Flexible Bond Fund at August 31, 2014, 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

October 30, 2014

6

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
PREFERRED STOCK - 0.60%
FINANCE- 0.60%
Banks - 0.60%
HSBC USA, Inc., 1.00%, Due 12/31/49 B		7,850	$	181
Lloyds Banking Group PLC,
6.413%, Due 1/29/2049B C D E		470,000		510
6.657%, Due 12/31/2049B C D E		540,000		590
RBS Capital Funding Trust VII, 6.08%, Due 12/31/2049		3,900		95
UBS Preferred Funding Trust IV, 1.00%, Due 12/31/2049A B		4,000		81
US Bancorp, 1.00%, Due 12/31/49 B		10,000		221
Total Finance				1,678
Total Preferred Stock (Cost $1,570)				1,678
	Par AmountA
	(000’s)
DOMESTIC BANK LOAN OBLIGATIONS - 0.59%
Consumer - 0.07%
H.J. Heinz Co., 3.50%, Due 6/5/2020 F	$	198		198
Service - 0.52%
Grifols Worldwide Operations USA, Inc., 1.00%, Due 2/27/2021B F		399		397
Hilton Worldwide Finance LLC, 1.00%, Due 10/26/2020B F G		1,042		1,036
				1,433
Total Domestic Bank Loan Obligations (Cost $1,635)				1,631
DOMESTIC CONVERTIBLE OBLIGATIONS - 0.94%
Finance - 0.11%
DDR Corp., 1.75%, Due 11/15/2040		135		166
WellPoint, Inc., 2.75%, Due 10/15/2042		90		146
				312
Manufacturing - 0.53%
Electronic Arts, Inc., 0.75%, Due 7/15/2016		79		102
Ford Motor Co., 4.25%, Due 11/15/2016		40		81
Intel Corp.,
2.95%, Due 12/15/2035		95		123
3.25%, Due 8/1/2039		110		186
Novellus Systems, Inc., 2.625%, Due 5/15/2041		16		34
SanDisk Corp., 0.50%, Due 10/15/2020E		189		229
Siemens AG, 1.05%, Due 8/16/2017		500		555
Workday, Inc., 0.75%, Due 7/15/2018		113		145
				1,455
Service - 0.30%
CP Foods Holdings Ltd., 0.50%, Due 1/15/2019		200		211
Hologic, Inc., 2.00%, Due 12/15/2037B		46		56
Illumina, Inc.,
0.01%, Due 6/15/2019E		104		112
0.50%, Due 6/15/2021E		47		52
Liberty Interactive LLC, 1.00%, Due 9/30/2043E G		108		112
Priceline Group, Inc.,
1.00%, Due 3/15/2018		114		163
0.90%, Due 9/15/2021E		124		121
				827
Transportation - 0.00%
Ship Finance International Ltd., 3.25%, Due 2/1/2018		8		9
Total Domestic Convertible Obligations (Cost $2,349)				2,603

See accompanying notes

7

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

	Par AmountA		Fair Value
	(000’s)		(000’s)
DOMESTIC OBLIGATIONS - 29.70%
Consumer - 0.44%
BAT International Finance PLC, 1.125%, Due 3/29/2016C	$	300	$	301
BRF - Brasil Foods S.A., 5.875%, Due 6/6/2022E		200		221
Constellation Brands, Inc., 3.75%, Due 5/1/2021		240		240
Grupo Famsa SAB de CV, 7.25%, Due 6/1/2020E		140		142
Land O’Lakes Capital Trust I, 7.45%, Due 3/15/2028E		100		104
Reynolds Group Issuer Inc.,
7.125%, Due 4/15/2019		100		104
7.875%, Due 8/15/2019		100		108
				1,220
Energy - 1.03%
Basic Energy Services, Inc., 7.75%, Due 2/15/2019		100		106
Chesapeake Energy Corp., 3.484%, Due 4/15/2019B		100		101
Denbury Resources, Inc., 5.50%, Due 5/1/2022		100		103
Kinder Morgan Energy Partners LP, 3.50%, Due 9/1/2023H		100		97
Millennium Offshore Services Superholdings LLC, 9.50%, Due 2/15/2018G		200		214
Petrobras International Finance Co., 5.375%, Due 1/27/2021		254		268
Plains Exploration & Production Co., 6.875%, Due 2/15/2023		88		102
Regency Energy Partners LP / Regency Energy Finance Corp., 5.75%, Due 9/1/2020H		150		161
Reliance Holding USA, Inc., 4.50%, Due 10/19/2020		250		263
Sabine Pass Liquefaction LLC, 5.75%, Due 5/15/2024E G		800		833
Sabine Pass LNG LP, 7.50%, Due 11/30/2016H		100		109
Sinopec Group Overseas Development 2012 Ltd.,
2.75%, Due 5/17/2017		200		205
3.90%, Due 5/17/2022		200		204
Trinidad Drilling Ltd., 7.875%, Due 1/15/2019E		100		105
				2,871
Finance - 18.49%
2013-2 Aviation Loan Trust, 2.341%, Due 12/15/2022B E I		89		83
ABN AMRO Bank N.V., 1.035%, Due 10/28/2016B E		1,400		1,413
AGFC Capital Trust I Limited, 6.00%, Due 1/15/2067B E		300		254
Agile Property Holdings Ltd., 8.875%, Due 4/28/2017		300		312
Albaraka Turk Katilim Bankasi AS, 6.25%, Due 6/30/2019		200		200
Ally Financial, Inc.,
6.75%, Due 12/1/2014		100		101
4.625%, Due 6/26/2015		1,100		1,129
3.50%, Due 7/18/2016		200		205
Ambank M BHD, 3.125%, Due 7/3/2019		200		202
American International Group, Inc.,
8.25%, Due 8/15/2018B		35		43
8.175%, Due 5/15/2068B		100		138
ANZ New Zealand Int’l Ltd., 0.755%, Due 4/27/2017B E		430		431
ARC Properties Operating Partnership LP/Clark Acquisition LLC, 3.00%, Due 2/6/2019E G H		325		326
Banco Bilbao Vizcaya Argentaria S.A., 9.00%, Due 5/29/2049B		600		666
Banco do Brasil S.A., Cayman, 4.50%, Due 1/22/2015E		250		253
Banco Santander Brasil S.A., 4.25%, Due 1/14/2016E		400		415
Banco Santander Chile S.A., 1.134%, Due 4/11/2017B E		880		883
Bank of America Corp.,
5.75%, Due 12/1/2017		60		67
5.65%, Due 5/1/2018		700		787
1.105%, Due 4/1/2019B		1,115		1,123
7.625%, Due 6/1/2019		100		122
Bank of America NA, 5.30%, Due 3/15/2017		250		273
Banque Federative du Credit Mutuel S.A.,
1.70%, Due 1/20/2017E		700		704
2.50%, Due 10/29/2018E		350		355
Barclays Bank PLC,
0.771%, Due 12/9/2016B C		1,900		1,902
3.75%, Due 5/15/2024C		500		511
Bear Stearns Cos. LLC, 0.624%, Due 11/21/2016B G		800		801
Carrington Holding Co. LLC, 1.00%, Due 1/15/2026G		168		65
CB Richard Ellis Services, Inc., 6.625%, Due 10/15/2020		100		105

See accompanying notes

8

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

	Par AmountA		Fair Value
	(000’s)		(000’s)
China Overseas Land & Investment Ltd., 6.375%, Due 10/29/2043	$	200	$	201
CIT Group, Inc.,
4.75%, Due 2/15/2015E		100		101
5.00%, Due 5/15/2017		100		106
Citigroup, Inc.,
1.25%, Due 1/15/2016		100		101
0.770%, Due 3/10/2017B		1,845		1,848
6.125%, Due 5/15/2018		760		872
Commonwealth Bank of Australia, 0.731%, Due 9/20/2016B E		590		593
Country Garden Holdings Co. Ltd, 10.50%, Due 8/11/2015		100		106
DBS Bank Ltd., 0.844%, Due 7/15/2021B E		945		926
Deutsche Bank AG, 0.705%, Due 5/30/2017B		200		200
Development Bank of Kaza, 5.50%, Due 12/20/2015		200		207
Digital Realty Trust LP,
5.875%, Due 2/1/2020H		140		157
3.625%, Due 10/1/2022H		235		229
Dresdner Bank AG, 7.25%, Due 9/15/2015		180		189
Dresdner Funding Trust I, 8.151%, Due 6/30/2031E		430		511
EPR Properties, 5.75%, Due 8/15/2022		225		248
Evergrande Real Estate Group Ltd., 13.00%, Due 1/27/2015		100		102
Fifth Third Bancorp, 0.651%, Due 12/20/2016B		435		434
Goldman Sachs Capital II, 4.00%, Due 12/31/2049B		625		494
Goldman Sachs Group, Inc.,
1.334%, Due 11/15/2018B		1,645		1,676
7.50%, Due 2/15/2019		332		401
HBOS PLC, 0.930%, Due 9/6/2017B C		995		988
ING Bank N.V.,
1.375%, Due 3/7/2016E		1,000		1,008
0.934%, Due 11/21/2016B		600		593
International Lease Finance Corp.,
6.50%, Due 9/1/2014E		200		200
4.875%, Due 4/1/2015		300		306
6.75%, Due 9/1/2016E		600		655
7.125%, Due 9/1/2018E		130		149
Jones Lang LaSalle, Inc., 4.40%, Due 11/15/2022		30		31
JPMorgan Chase & Co.,
0.947%, Due 3/31/2016B		2,000		1,995
4.40%, Due 7/22/2020		10		11
JPMorgan Chase Bank NA,
0.647%, Due 6/2/2017B		900		901
6.00%, Due 10/1/2017		300		339
JPMorgan Chase Capital XXI, 1.189%, Due 1/15/2087B		400		346
Lloyds Bank PLC,
6.375%, Due 1/21/2021C		500		607
0.563%, Due 6/29/2049B C		110		74
0.438%, Due 11/29/2049B C		350		237
Macquarie Bank Ltd.,
5.00%, Due 2/22/2017		500		542
1.021%, Due 3/24/2017B E		500		505
Macquarie Group Ltd., 1.237%, Due 1/31/2017B E		1,070		1,078
Morgan Stanley,
1.75%, Due 2/25/2016B		250		253
0.684%, Due 10/18/2016B		600		601
1.514%, Due 4/25/2018B		2,695		2,768
7.30%, Due 5/13/2019		300		363
3.875%, Due 4/29/2024		500		513
MPT Operating Partnership LP / MPT Finance Corp., 6.875%, Due 5/1/2021H		200		215
NASDAQ OMX Group, Inc.,
5.55%, Due 1/15/2020		140		156
4.25%, Due 6/1/2024		100		102
Nationwide Building Society, 4.65%, Due 2/25/2015E		500		510
Navient LLC,
5.00%, Due 4/15/2015G		600		613
3.875%, Due 9/10/2015G		100		102

See accompanying notes

9

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

	Par AmountA		Fair Value
	(000’s)		(000’s)
6.25%, Due 1/25/2016G	$	500	$	530
6.00%, Due 1/25/2017G		200		215
Nomura Holdings, Inc., 2.00%, Due 9/13/2016		300		304
Royal Bank of Canada, 1.20%, Due 9/19/2018		160		159
Royal Bank of Scotland Group PLC,
2.55%, Due 9/18/2015C		850		865
1.174%, Due 3/31/2017B C		910		915
7.648%, Due 12/31/2049B C		560		661
Royal Bank of Scotland PLC, 9.50%, Due 3/16/2022A C		300		347
Santander US Debt S.A. Unipersonal, 3.724%, Due 1/20/2015E		700		707
Shinhan Bank, 0.883%, Due 4/8/2017B E		1,430		1,434
Springleaf Finance Corp., 5.75%, Due 9/15/2016		100		106
Standard Bank PLC, 8.125%, Due 12/2/2019C		200		229
Standard Chartered PLC,
5.50%, Due 11/18/2014C E		300		303
3.85%, Due 4/27/2015C E		576		588
State Street Capital Trust IV, 1.231%, Due 6/1/2077B		60		53
Swire Properties MTN Financing Ltd., 4.375%, Due 6/18/2022		200		213
Temasek Financial I Ltd., 3.375%, Due 7/23/2042		250		226
U.S. Dept of Transportation Asset Backed, 6.001%, Due 12/7/2021B E I		300		339
UBS AG,
5.875%, Due 12/20/2017		175		199
5.125%, Due 5/15/2024		900		898
UBS AG/Stamford CT, 0.873%, Due 8/14/2019B		1,000		1,007
USB Realty Corp., 1.381%, Due 12/29/2049B E		300		276
Wachovia Capital Trust III, 5.570%, Due 3/29/2049B		500		490
				51,396
Manufacturing - 2.49%
Ainsworth Lumber Co. Ltd, 7.50%, Due 12/15/2017E		100		105
ArcelorMittal,
9.50%, Due 2/15/2015		190		197
4.25%, Due 8/5/2015		210		214
Ardagh Packaging Finance PLC / Ardagh Holdings USA, Inc., 3.232%, Due 12/15/2019B C E		200		199
Ball Corp., 5.00%, Due 3/15/2022		100		104
Barminco Finance Property Ltd., 9.00%, Due 6/1/2018E		100		90
D.R. Horton, Inc., 3.75%, Due 3/1/2019		120		120
Fidelity National Information Services, Inc.,
5.00%, Due 3/15/2022		150		159
3.50%, Due 4/15/2023		125		125
First Data Corp., 7.375%, Due 6/15/2019E		100		107
Ford Motor Credit Co. LLC,
2.75%, Due 5/15/2015G		200		203
1.013%, Due 1/17/2017B G		1,860		1,871
General Motors Co., 3.50%, Due 10/2/2018		130		133
General Motors Financial Co. Inc., 2.75%, Due 5/15/2016		400		404
Glencore Funding, LLC, 1.398%, Due 5/27/2016B G		500		505
Goodyear Tire & Rubber Co., 8.25%, Due 8/15/2020		100		109
Heathrow Funding Ltd., 2.50%, Due 6/25/2017E		200		202
Levi Strauss & Co., 7.625%, Due 5/15/2020		100		107
Montell Finance Co., 8.10%, Due 3/15/2027E		150		204
Nitrogenmuvek Vegyipari Zrt, 7.875%, Due 5/21/2020E		200		205
Oracle Corp., 3.625%, Due 7/15/2023		200		208
Schaeffler Holding Finance BV, 6.875%, Due 8/15/2018E O		800		843
Seagate HDD Cayman, 3.75%, Due 11/15/2018E		125		128
Tech Data Corp., 3.75%, Due 9/21/2017		100		105
Toll Brothers Finance Corp., 4.00%, Due 12/31/2018		150		153
Vale S.A., 5.625%, Due 9/11/2042		100		103
				6,903
Service - 2.89%
ADT Corp., 6.25%, Due 10/15/2021		320		338
AutoNation, Inc., 6.75%, Due 4/15/2018		160		184
Bed Bath & Beyond, Inc., 3.749%, Due 8/1/2024		200		204
Best Buy Co. Inc, 5.00%, Due 8/1/2018		120		124

See accompanying notes

10

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

	Par AmountA		Fair Value
	(000’s)		(000’s)
Biomet, Inc., 6.50%, Due 8/1/2020	$	100	$	108
DISH DBS Corp.,
7.75%, Due 5/31/2015		1,200		1,256
7.125%, Due 2/1/2016		100		107
Forest Laboratories, Inc., 4.375%, Due 2/1/2019E		240		259
FTI Consulting, Inc., 6.75%, Due 10/1/2020		190		200
HCA, Inc.,
6.50%, Due 2/15/2016		100		106
3.75%, Due 3/15/2019		115		116
6.50%, Due 2/15/2020		800		895
HealthSouth Corp., 7.25%, Due 10/1/2018		1,193		1,240
Host Hotels & Resorts LP, 3.75%, Due 10/15/2023H		200		201
IAC/InterActiveCorp, 4.875%, Due 11/30/2018		365		379
International Game Technology, Inc., 5.35%, Due 10/15/2023		105		110
MGM Resorts International,
6.625%, Due 7/15/2015		1,200		1,248
7.50%, Due 6/1/2016		100		109
Sirius XM Radio, Inc., 5.25%, Due 8/15/2022E		100		107
Stonemor Partners LP, 7.875%, Due 6/1/2021E H		50		53
Suburban Propane Partners LP/Suburban Energy Finance Corp., 7.375%, Due 3/15/2020H		100		105
Total System Services, Inc., 3.75%, Due 6/1/2023		100		99
United Rentals North America, Inc., 8.25%, Due 2/1/2021		100		110
Valeant Pharmaceuticals International, 6.875%, Due 12/1/2018E		100		104
Wyndham Worldwide Corp., 4.25%, Due 3/1/2022		170		175
Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp., 7.75%, Due 8/15/2020G		100		108
				8,045
Sovereign - 2.91%
Cayman Island, RAK Capital, 3.297%, Due 10/21/2018		200		209
France, Dexia Credit Local S.A.,
1.25%, Due 10/18/2016E		350		353
2.25%, Due 1/30/2019E		600		609
Hungary, Magyar Export Import Bank, 5.50%, Due 2/12/2018		240		257
Namibia, Republic of Namibia, 5.50%, Due 11/3/2021		200		217
Norway, Eksportfinans ASA,
3.00%, Due 11/17/2014		50		50
2.375%, Due 5/25/2016		100		100
5.50%, Due 5/25/2016		100		105
5.50%, Due 6/26/2017		600		645
Norway, KommunalBanken AS, 1.375%, Due 6/8/2017		200		202
Petrobras Global Finance BV, 2.592%, Due 3/17/2017B		1,695		1,716
Slovenia Government Bond,
4.75%, Due 5/10/2018		1,100		1,184
4.125%, Due 2/18/2019		200		212
5.50%, Due 10/26/2022		200		221
5.85%, Due 5/10/2023		600		679
South Africa, Eskom Holdings SOC Ltd., 6.75%, Due 8/6/2023		356		382
South Korea, Export-Import Bank of Korea, 5.00%, Due 4/11/2022		200		226
South Korea, Korea Housing Finance Corp., 1.625%, Due 9/15/2018		350		343
Supranational, African Export Import Bank, 5.75%, Due 7/27/2016		347		362
				8,072
Telecommunications - 0.82%
British Telecommunications PLC, 1.25%, Due 2/14/2017C		500		501
Sprint Nextel Corp., 7.00%, Due 8/15/2020		100		107
Verizon Communications, Inc.,
1.761%, Due 9/15/2016B		300		308
2.50%, Due 9/15/2016		200		206
1.981%, Due 9/14/2018B		200		210
3.65%, Due 9/14/2018		300		320
1.002%, Due 6/17/2019B		340		344
5.15%, Due 9/15/2023		103		117
West Corp., 5.375%, Due 7/15/2022E		170		165
				2,278

See accompanying notes

11

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

		Par AmountA		Fair Value
		(000’s)		(000’s)
Transportation - 0.16%
Kansas City Southern de Mexico SA de CV, 2.35%, Due 5/15/2020		$	240	$	231
Transnet Soc Ltd., 4.50%, Due 2/10/2016			210		219
					450
Utilities - 0.47%
Electricite de France S.A., 1.15%, Due 1/20/2017E			500		501
Meiya Power Co. Ltd., 4.00%, Due 8/19/2018			200		206
SP PowerAssets Ltd., 2.70%, Due 9/14/2022			200		195
Star Energy Geothermal Wayang Windu Ltd., 6.125%, Due 3/27/2020			200		207
State Grid Overseas Investment 2014 Ltd., 4.125%, Due 5/7/2024			200		208
					1,317
Total Domestic Obligations (Cost $81,697)					82,552
FOREIGN CONVERTIBLE OBLIGATIONS - 0.97%
Energy - 0.15%
Eni S.p.A., 0.25%, Due 11/30/2015	EUR		300		405
Finance - 0.10%
Great Portland Estates Capital Jersey Ltd., 1.00%, Due 9/10/2018C	GBP		100		178
Immofinanz AG, 4.25%, Due 3/8/2018	EUR		1,711		102
					280
Manufacturing - 0.55%
Aabar Investments PJSC, 4.00%, Due 5/27/2016	EUR		300		455
Balfour Beatty PLC, 1.875%, Due 12/3/2018C	GBP		100		163
Camfin 2012 SPA, 5.625%, Due 10/26/2017	EUR		100		159
Faurecia, 3.25%, Due 1/1/2018J	EUR		605		228
Indra Sistemas S.A., 1.75%, Due 10/17/2018	EUR		100		140
Ingenico, 2.75%, Due 1/1/2017	EUR		66		64
Volkswagen International Finance N.V., 5.50%, Due 11/9/2015	EUR		200		279
Yaskawa Electric Corp., 0.01%, Due 3/16/2017	JPY		5,000		61
					1,549
Service - 0.11%
China Water Affairs Group Ltd., 2.50%, Due 4/15/2015	HKD		100		14
OHL Investments S.A., 4.00%, Due 4/25/2018	EUR		200		287
					301
Transportation - 0.06%
International Consolidated Airlines Group S.A., 1.75%, Due 5/31/2018	EUR		100		169
Total Foreign Convertible Obligations (Cost $2,729)					2,704
FOREIGN OBLIGATIONS - 33.72%
Consumer - 0.55%
Carlsberg Breweries A/S, 7.25%, Due 11/28/2016	GBP		400		741
Heineken N.V., 7.25%, Due 3/10/2015	GBP		250		428
Imperial Tobacco Group PLC, 8.375%, Due 2/17/2016C	EUR		250		365
					1,534
Energy - 0.05%
Gazprom OAO Via Gaz Capital S.A., 3.755%, Due 3/15/2017	EUR		100		130
Finance - 2.31%
AIB Mortgage Bank, 2.625%, Due 7/28/2017	EUR		100		136
ARLO XIV Ltd., 0.01%, Due 12/24/2019I	JPY		10,000		5
Banco Bilbao Vizcaya Argentaria S.A., 7.00%, Due 12/29/2049B	EUR		200		276
Banco Espirito Santo LDN,
5.00%, Due 4/23/2019	EUR		200		258
5.00%, Due 5/23/2019	EUR		100		130
Banco Popolare SC, 3.50%, Due 3/14/2019	EUR		100		136
Banco Popular Español S.A., 11.50%, Due 10/29/2049B	EUR		500		775
Bank of America Corp., 3.929%, Due 10/21/2025B K I	MXN		3,000		254
Bankia S.A., 3.50%, Due 1/17/2019	EUR		100		141
Barclays Bank PLC, 4.875%, Due 12/31/2049B C	EUR		380		489
BPE Financiaciones S.A., 2.50%, Due 2/1/2017	EUR		100		134
Credit Logement S.A., 1.392%, Due 3/29/2049B	EUR		100		114
Henderson UK Finance PLC, 7.25%, Due 3/24/2016C	GBP		100		174

See accompanying notes

12

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

		Par AmountA		Fair Value
		(000’s)		(000’s)
JP Morgan Chase Bank NA, 0.829%, Due 5/31/2017B	EUR	$	1,150	$	1,509
LCR Finance PLC, 4.50%, Due 12/7/2028C	GBP		200		392
Lloyds Bank PLC, 10.375%, Due 2/12/2024B C	EUR		150		256
Lloyds Banking Group PLC, 4.875%, Due 10/1/2014A C	AUS		100		94
Morgan Stanley, 7.60%, Due 8/8/2017	NZD		430		381
RBS Capital Trust D, 5.646%, Due 6/29/2049B	GBP		60		97
Realkredit Danmark, 2.00%, Due 4/1/2016	DKK		500		91
Royal Bank of Scotland PLC,
6.934%, Due 4/9/2018B C	EUR		100		152
1.595%, Due 6/14/2022B C	EUR		100		116
Santander International, 3.16%, Due 12/1/2015	GBP		200		338
					6,448
Service - 1.56%
Next PLC, 5.875%, Due 10/12/2016C	GBP		450		811
Reed Elsevier N.V., 5.625%, Due 10/20/2016	GBP		550		986
Tesco Property Finance 2 PLC, 6.052%, Due 10/13/2039C	GBP		47		90
Tesco Property Finance 3 PLC, 5.744%, Due 4/13/2040C	GBP		173		321
Tesco Property Finance 4 PLC, 5.801%, Due 10/13/2040C	GBP		297		559
Tesco Property Finance 5 PLC, 5.661%, Due 10/13/2041C	GBP		199		366
Tesco Property Finance 6 PLC, 5.411%, Due 7/13/2044C	GBP		100		179
WPP PLC, 6.00%, Due 4/4/2017C	GBP		250		458
Ziggo Bond Co. BV, 8.00%, Due 5/15/2018	EUR		400		547
					4,317
Sovereign - 29.25%
Australia, Queensland Treasury Corp., 5.75%, Due 7/22/2024	AUS		2,685		2,911
Austria, Hypo Alpe Adria International AG,
2.75%, Due 8/12/2015	CHF		100		105
2.375%, Due 12/13/2022	EUR		100		138
Brazil, Letra Tesouro Nacional, 0.01%, Due 1/1/2018	BRL		22,400		6,987
Brazil, Nota Do Tesouro Nacional,
10.00%, Due 1/1/2017J	BRL		2,500		1,106
10.00%, Due 1/1/2021J	BRL		3,790		1,632
6.00%, Due 8/15/2022J	BRL		1,800		2,050
10.00%, Due 1/1/2023J	BRL		10,485		4,474
Bulgaria Government Bond, 2.95%, Due 9/3/2024	EUR		313		413
Chile, Republic of Chile,
3.00%, Due 1/1/2017	CLP		228,982		411
3.00%, Due 7/1/2017	CLP		192,827		349
Finland Government Bond, 1.50%, Due 4/15/2023E	EUR		250		345
Hungary Government Bond,
7.00%, Due 6/24/2022	HUF		290,000		1,436
6.00%, Due 11/24/2023	HUF		440,000		2,066
Indonesia Government Bond,
8.375%, Due 3/15/2024	IDR		9,800,000		852
9.00%, Due 3/15/2029	IDR		16,800,000		1,481
8.75%, Due 2/15/2044	IDR		14,500,000		1,218
Irish Treasury Bond,
3.40%, Due 3/18/2024	EUR		160		240
5.40%, Due 3/13/2025	EUR		300		522
Italy, Buoni Poliennali Del Tesoro,
2.55%, Due 10/22/2016	EUR		701		959
2.25%, Due 4/22/2017	EUR		100		137
4.75%, Due 5/1/2017	EUR		1,040		1,515
2.15%, Due 11/12/2017	EUR		501		686
5.00%, Due 8/1/2039	EUR		2,395		3,930
Malaysia Government Bond,
4.048%, Due 9/30/2021	MYR		2,195		706
3.48%, Due 3/15/2023	MYR		4,080		1,256
Mexican Bonos Desarr,
8.50%, Due 5/31/2029J, Series M 20	MXN		43,540		4,051
8.50%, Due 11/18/2038J, Series M 30	MXN		44,360		4,165
7.75%, Due 11/13/2042J, Series M	MXN		62,820		5,485
Mexico, United Mexican States, 2.375%, Due 4/9/2021	EUR		100		136

See accompanying notes

13

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

		Par AmountA		Fair Value
		(000’s)		(000’s)
New Zealand Government Bond, 6.00%, Due 5/15/2021	NZD	$	3,170	$	2,956
Poland Government Bond,
5.25%, Due 10/25/2020	PLN		5,785		2,063
4.00%, Due 10/25/2023	PLN		5,825		1,944
Portugal, Obrigacoes do Tesouro,
4.75%, Due 6/14/2019E	EUR		500		744
3.85%, Due 4/15/2021E	EUR		105		150
4.95%, Due 10/25/2023E	EUR		1,885		2,835
Slovenia Government Bond, 4.70%, Due 11/1/2016E	EUR		800		1,133
South Africa Government Bond,
8.00%, Due 12/21/2018	ZAR		10,000		969
6.75%, Due 3/31/2021	ZAR		9,745		878
6.50%, Due 2/28/2041	ZAR		35,310		2,576
South Korea Treasury Bond,
5.75%, Due 9/10/2018	KRW		3,105,000		3,417
3.375%, Due 9/10/2023	KRW		1,084,700		1,100
Spain, Bonos Y Obligaciones del Estado,
2.10%, Due 4/30/2017	EUR		687		941
2.75%, Due 10/31/2024E	EUR		3,900		5,363
Supranational, Asian Development Bank, 2.00%, Due 8/29/2017	NOR		400		65
Supranational, European Investment Bank, 6.00%, Due 12/7/2028	GBP		37		83
Supranational, Nordic Investment Bank, 2.125%, Due 8/9/2017	NOR		400		65
UK Treasury Bond,
2.25%, Due 9/7/2023	GBP		370		613
3.25%, Due 1/22/2044	GBP		933		1,637
					81,294
Total Foreign Obligations (Cost $90,800)					93,723
ASSET-BACKED OBLIGATIONS - 5.48%
ACE Securities Corp Home Equity Loan Trust, 0.31%, Due 8/25/2036, 2006 OP2 A1B			1,012		876
Argent Securities Trust, 0.425%, Due 5/25/2036, 2006 W4 A2D			2,161		909
Carrington Mortgage Loan Trust, 0.415%, Due 2/25/2037, 2007 FRE1 AC3B			500		356
Chase Funding Trust, 5.323%, Due 2/26/2035, 2004-2 1A4			221		223
Citibank Omni Master Trust, 4.90%, Due 11/15/2018, 2009 A17E			900		908
Citigroup Mortgage Loan Trust, Inc.,
0.525%, Due 1/25/2036, 2006 WFH1 M2			100		89
0.235%, Due 1/25/2037, 2007 AMC2 A3A			198		125
Countrywide Asset-Backed Certificates Trust,
0.335%, Due 6/25/2036, 2006 3 2A2			38		36
0.305%, Due 1/25/2037, 2006 13 3AV2B			258		243
0.315%, Due 3/25/2037, 2006 18 2A2			412		360
0.295%, Due 7/25/2037, 2007 1 2A3B			2,800		2,185
Fremont Home Loan Trust, 0.325%, Due 2/25/2036, 2006 2 2A3B			370		319
GSAMP Trust, 0.275%, Due 12/25/2036, 2007 FM1 A2B			1,702		941
Kingsland I Ltd., CDO, 0.630%, Due 6/13/2019, 2005 1A A2B E			165		165
Madison Park Funding Ltd., CLO, 0.450%, Due 3/22/2021, 2007 4A A1AB E			1,490		1,478
Master Specialized Loan Trust, 0.415%, Due 2/25/2036, 2006 2 AB E			1,027		939
Morgan Stanley ABS Capital I Inc. Trust,
0.205%, Due 7/25/2036, 2006 A2FPB			83		40
0.305%, Due 11/25/2036, 2007 HE1 A2CB			558		373
Nomura Home Equity Loan Inc Home Equity Loan Trust, 0.485%, Due 10/25/2036, 2006 AF1 A4			1,170		489
Oakwood Mortgage Investors, Inc., 6.61%, Due 6/15/2031, 2001 C A3			325		186
RAAC Series Trust, 0.555%, Due 9/25/2045, 2006 SP1 M1B			800		646
Residential Asset Securities Corp.Trust,
0.735%, Due 7/25/2033, 2003 KS5 AIIBB			8		7
0.555%, Due 12/25/2035, 2005 KS11 M1B			900		813
0.595%, Due 1/25/2036, 2005 KS12 M1B			175		162
Structured Asset Investment Loan Trust,
0.315%, Due 5/25/2036, 2006 BNC2 A5			1,005		741
0.305%, Due 9/25/2036, 2006 BNC3 A3			621		496
Structured Asset Securities Corp. Mortgage Pass-Through Certificates, 0.325%, Due 12/25/2036, 2006 BC5 A4B			1,348		1,115
Total Asset-Backed Obligations (Cost $14,512)					15,220

See accompanying notes

14

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

	Par AmountA		Fair Value
	(000’s)		(000’s)
COLLATERALIZED MORTGAGE OBLIGATIONS - 7.16%
Adjustable Rate Mortgage Trust, 2.735%, Due 9/25/2035, 2005 5 2A1	$	87	$	78
American Home Mortgage Investment Trust,
2.069%, Due 10/25/2034, 2004 3 5AB		62		63
1.833%, Due 9/25/2045, 2005 2 4A1B		8		8
Banc of America Alternative Loan Trust, 0.555%, Due 5/25/2035, 2005 4 CB6B		64		49
Banc of America Funding Corporation,
5.774%, Due 5/25/2037, 2007 4 TA1B		1,311		1,105
0.366%, Due 4/20/2047, 2007 B A1		716		533
0.456%, Due 5/20/2047, 2007 C 7A5B		338		279
Banc of America Mortgage Securities, Inc., 3.321%, Due 7/20/2032, 2002 G1A3B		22		22
Bear Stearns Adjustable Rate Mortgage Trust,
2.745%, Due 11/25/2030, 2000 2 A1		38		39
2.437%, Due 8/25/2033, 2003 5 2A1B		97		99
2.712%, Due 8/25/2033, 2003 5 1A1B		55		54
2.625%, Due 4/25/2034, 2004 1 22A1B		52		52
3.121%, Due 11/25/2034, 2004 9 22A1B		25		26
2.43%, Due 10/25/2035, 2005 9 A1B		58		58
Bear Stearns Alt-A Trust,
2.466%, Due 9/25/2034, 2004 9 2A1B		184		167
2.627%, Due 11/25/2036, 2006 6 32A1		130		90
5.360%, Due 12/25/2046, 2006 7 23A1		1,234		934
Chase Mortgage Finance Corp.,
5.50%, Due 11/25/2035, 2005 S3 A10		200		199
2.445%, Due 2/25/2037, 2007 A1 7A1		311		313
2.570%, Due 2/25/2037, 2007 A1 1A5		46		45
2.642%, Due 3/25/2037, 2007 A1 12M3B		296		248
Citigroup Mortgage Loan Trust, Inc.,
2.564%, Due 8/25/2035, 2005 3 2A2A		51		50
1.93%, Due 9/25/2035, 2005 6 A3B		43		43
Countrywide Alternative Loan Trust,
0.605%, Due 8/25/2033, 2003 15T2 A2B		2		2
5.50%, Due 10/25/2033, 2003 20CB 1A4		181		190
6.00%, Due 10/25/2033, 2003 J2 A1		24		25
0.655%, Due 5/25/2035, 2005 10CB 1A1B		1,180		1,012
0.435%, Due 2/25/2037, 2005 81 A1B		19		15
0.366%, Due 7/20/2046, 2006 OA9 2A1AB		13		9
0.345%, Due 9/25/2046, 2006 OA11 A1BB		18		15
Countrywide Home Loan Mortgage Pass Through Trust,
2.519%, Due 6/25/2033, 2003 27 A1B		44		44
0.915%, Due 9/25/2034, 2004 16 1A4AB		49		48
0.445%, Due 4/25/2035, 2005 3 2A1B		226		185
0.385%, Due 5/25/2035, 2005 9 1A3B		150		128
5.75%, Due 5/25/2037, 2007 5 A51		88		86
Credit Suisse First Boston Mortgage Securities Corp., 2.452%, Due 9/25/2034, 2004 AR8 2A1		36		36
Credit Suisse Mortgage-Backed Trust, 6.00%, Due 7/25/2036, 2006 6 1A4		602		466
Deutsche Alt-A Securities Mortgage Loan Trust, 0.305%, Due 3/25/2037, 2007 AR2 A1		823		567
Fannie Mae Grantor Trust, 6.00%, Due 2/25/2044, 2004 T3 CL 1A1		14		16
Fannie Mae REMIC, 0.355%, Due 10/27/2037, 2007-114 A6		600		599
First Horizon Asset Securities, Inc., 2.534%, Due 2/25/2034, 2004 AR1 2A1B		58		58
Ginnie Mae REMIC Trust,
0.81%, Due 10/20/2061, 2011 H21 FTB		1,805		1,813
0.856%, Due 10/20/2061, 2011 H23 FAB		810		816
0.974%, Due 7/20/2062, 2012 H20 PT		4,867		4,927
GSR Mortgage Loan Trust,
6.00%, Due 3/25/2032, 2003 2F 3A1		3		3
2.085%, Due 6/25/2034, 2004 7 3A1		42		42
5.005%, Due 11/25/2035, 2005 AR7 6A1B		38		38
JP Morgan Alternative Loan Trust, 5.694%, Due 5/26/2037, 2008 R3 3A1E		299		247
Morgan Stanley Mortgage Loan Trust,
1.055%, Due 2/25/2036, 2006 2 2A1		547		471
2.178%, Due 6/25/2036, 2006 8AR 5A4B		28		27
New Century Alternative Mortgage Loan Trust, 5.909%, Due 7/25/2036, 2006 ALT1 AF2		11		8

See accompanying notes

15

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

		Par AmountA		Fair Value
		(000’s)		(000’s)
Nomura Asset Acceptance Corp., 7.50%, Due 3/25/2034, 2004 R1 A2E		$	118	$	126
Prime Mortgage Trust, 0.655%, Due 2/25/2035, 2006 CL1 A1B			97		91
Residential Accredit Loans, Inc., 0.255%, Due 5/25/2037, 2007 QA3 A1B			353		256
Residential Asset Securitization Trust, 2.462%, Due 12/25/2034, 2004 IP2 4A			91		91
Structured Adjustable Rate Mortgage Loan Trust,
2.417%, Due 5/25/2034, 2004 5 3A2			66		66
2.436%, Due 7/25/2034, 2004 8 3AB			67		68
Structured Asset Mortgage Investments II Trust,
1.614%, Due 2/25/2036, 2005 ARB A2B			973		878
0.385%, Due 5/25/2045, 2005 AR2 2A1B			105		95
Structured Asset Securities Corp. Mortgage Pass-Through Certificates, 5.50%, Due 5/25/2035, 2005 6 2A14			131		135
WaMu Mortgage Pass Through Certificates,
2.027%, Due 2/25/2033, 2003 AR1 2AB			4		4
2.408%, Due 3/25/2035, 2005 AR3 A1			46		46
5.50%, Due 11/25/2035, 2005 9 2A2			299		280
0.315%, Due 2/25/2037, 2007 HY1 A2AB			336		234
2.359%, Due 3/25/2037, 2007 HY3 4A1B			196		187
1.868%, Due 12/19/2039, 2001 AR5 1A			94		93
0.385%, Due 4/25/2045, 2005 AR6 2A1AB			150		143
0.475%, Due 7/25/2045, 2005 AR9 A1AB			87		83
0.445%, Due 10/25/2045, 2005 AR13 A1A1			352		335
0.425%, Due 12/25/2045, 2005 AR17 A1A1B			152		143
Wells Fargo Mortgage Backed Securities Trust, 2.603%, Due 3/25/2035, 2005 AR3 2A1B			88		89
Total Collateralized Mortgage Obligations (Cost $19,167)					19,890
FOREIGN COLLATERALIZED MORTGAGE OBLIGATION- 1.62%
Fondo de Titulizacion de Activos, 0.392%, Due 6/16/2049, 16 A2	EUR		1,109		1,297
IM Pastor 4 Fondo de Titulizacion de Activos, 0.356%, Due 3/22/2044, 4 A	EUR		1,265		1,488
Rural Hipotecario IX Fondo de Titulizacion de Activos, 0.339%, Due 2/17/2050, 9 A2	EUR		509		643
TDA CAM Fondo de Titulizacion de Activos, 0.313%, Due 2/26/2049, 8 A	EUR		887		1,076
Total Foreign Collateralized Mortgage Obligation (Cost $4,606)					4,504
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 0.67%
Cobalt CMBS Commercial Mortgage Trust, 5.969%, Due 5/15/2046, 2007 C3 A1A			862		942
DBRR Trust, 0.853%, Due 2/25/2045, 2013 EZ2 AE I			893		893
LB-UBS Commercial Mortgage Trust, 0.403%, Due 9/15/2045, 2007 C7 XW			1,254		11
Total Commercial Mortgage-Backed Obligations (Cost $1,862)					1,846
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 0.78% (Cost $2,160)
Fannie Mae TBA, 4.50%, Due 9/1/2041 L			2,000		2,160
U.S. AGENCY OBLIGATIONS - 0.10% (Cost $272)
Fannie Mae Notes, 3.15%, Due 12/27/2027 B M			300		290
U.S. TREASURY OBLIGATIONS - 26.09%
U.S. Treasury Inflation Protected Securities - 4.33%
1.625%, Due 1/15/2015 K			125		125
0.125%, Due 7/15/2022 K N			1,555		1,558
0.125%, Due 7/15/2024 K			6,724		6,661
2.375%, Due 1/15/2025 K N			1,176		1,425
2.00%, Due 1/15/2026 K			60		71
2.375%, Due 1/15/2027 K			449		554
3.875%, Due 4/15/2029 K N			490		723
0.625%, Due 2/15/2043 K			972		918
					12,035
U.S. Treasury Floating Rate Note - 2.43%
0.075%, Due 1/31/2016, B			2,525		2,525
0.100%, Due 7/31/2016, B			4,220		4,221
					6,746
U.S. Treasury Notes/Bonds - 19.33%
2.00%, Due 4/30/2016			400		411

See accompanying notes

16

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

	Par AmountA		Fair Value
	(000’s)		(000’s)
0.875%, Due 7/15/2017	$	5,000	$	4,995
1.625%, Due 7/31/2019		21,900		21,902
1.25%, Due 10/31/2019		2,500		2,446
1.875%, Due 6/30/2020		3,000		3,008
3.625%, Due 2/15/2021N		3,000		3,308
2.00%, Due 11/15/2021		700		697
2.50%, Due 5/15/2024		12,100		12,273
5.50%, Due 8/15/2028		2,000		2,672
3.125%, Due 8/15/2044		2,000		2,016
				53,728
Total U.S. Treasury Obligations (Cost $72,028)				72,509
	Shares
SHORT-TERM INVESTMENTS - 6.29%
Short-Term Investments - 4.13%
JPMorgan U.S. Government Money Market Fund, Capital Class		11,463,456		11,463
	Par AmountA
	(000’s)
Banks - 0.32%
Itau Unibanco S.A./ New York , 0.01%, Due 5/31/2016	$	900		900
U.S. Treasury Bills - 0.04%
0.102%, Due 10/16/2014N		86		86
0.138%, Due 11/6/2014N		37		37
				123
U.S. Treasury Notes - 1.80%
0.25%, Due 10/31/2014		2,000		2,001
2.375%, Due 10/31/2014		1,000		1,004
0.25%, Due 11/30/2014		2,000		2,001
				5,006
Total Short-Term Investments (Cost $17,492)				17,492
TOTAL INVESTMENTS - 114.71% (Cost $312,879)				318,802
PURCHASED OPTIONS - 1.36% (Cost $5,165)				3,776
WRITTEN OPTIONS - (0.89%)(Premiums $3,775)				(2,462	)
LIABILITIES, NET OF OTHER ASSETS - (15.18%)				(42,197	)
TOTAL NET ASSETS - 100.00%			$	277,919

Percentages are stated as a percent of net assets.

^A In U.S. Dollars unless otherwise noted.

^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 PLC - Public Limited Company.

^D  Non-income producing security.

^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 $37,691 or 13.57% of net assets. The Fund has no right to demand registration of these securities.

^F Term Loan.

^G LLC - Limited Liability Company.

^H LP - Limited Partnership.

^I Fair valued pursuant to procedures approved by the Board of Trustees. At the period end, the amount of fair valued securities was $1,574 or 0.57% of net assets.

^J Par value represents units rather than shares.

^K Inflation-Indexed Note.

^L TBA - To Be Announced.

^M 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.

^N This security or a piece thereof is held as segregated collateral for interest rate and credit default swaps.

^O Pay-In-Kind Security.

See accompanying notes

17

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Futures Contracts Open on August 31, 2014:

Description	Type	Number of Contracts	Expiration Date		Contract Value			Unrealized Appreciation (Depreciation)
10-Year Japanese Bond September Futures	Short	6		September, 2014	$	(8,432,697	)	$	(69,928	)
Canadian 10-Year Bond December Futures	Short	14		December, 2014		(1,768,252	)		(14,323	)
Euro 3-Month EURIBOR December Futures	Long	32		December, 2015		10,481,641			14,222
Euro 3-Month EURIBOR December Futures	Short	32		December, 2016		(10,453,260	)		(29,495	)
Euro BOBL September Futures	Short	3		September, 2014		(509,405	)		(7,269	)
Euro BTP September Futures	Short	13		September, 2014		(2,229,458	)		(111,440	)
Euro BUND September Futures	Short	19		September, 2014		(3,783,203	)		(63,548	)
Euro BUND September Futures	Short	84		September, 2014		16,725,742			(742,495	)
Euro OAT September Futures	Short	7		September, 2014		(1,338,626	)		(41,018	)
Euro OAT September Futures	Short	49		September, 2014		(9,370,381	)		(495,709	)
Euro SCHATZ December Futures	Short	80		December, 2014		(11,658,941	)		(1,580	)
Long GILT December Futures	Short	8		December, 2014		(1,507,948	)		(11,979	)
U.S. Long Bond December Futures	Short	1		December, 2014		(140,094	)		(814	)
U.S. Treasury 10-Year Note December Futures	Short	81		December, 2014		(10,188,281	)		(34,880	)
U.S. Treasury 2-Year Note December Futures	Short	49		December, 2014		(10,733,297	)		(9,333	)
U.S. Treasury 5-Year Note December Futures	Short	86		December, 2014		(10,219,891	)		(30,973	)
U.S. Ultra Bond December Futures	Short	26		December, 2014		(4,043,000	)		(36,949	)
U.S. Ultra Bond December Futures	Short	8		December, 2014		(1,244,000	)		(11,336	)
					$	(60,413,351	)	$	(1,698,847	)

Centrally cleared swap agreements outstanding on August 31, 2014:

Interest Rate Swaps

Pay/Receive Floating Rate	Floating Rate Index	Fixed Rate (%)		Expiration Date		Curr	Notional Amount(4) (000s)		Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value
Pay	3-Month USD-LIBOR		1.0000		7/3/2016	USD		2,599	$	—		$	(3,276	)	$	(3,276	)
Pay	3-Month USD-LIBOR		1.0000		7/7/2016	USD		2,595		—			(3,932	)		(3,932	)
Pay	3-Month USD-LIBOR		1.0000		7/11/2016	USD		3,553		—			(2,596	)		(2,596	)
Pay	3-Month USD-LIBOR		1.0000		7/22/2016	USD		2,679		—			20			20
Pay	3-Month USD-LIBOR		1.0000		7/22/2016	USD		2,679		—			(788	)		(788	)
Receive	6-Month JPY-LIBOR		0.3325		8/22/2016	JPY		166,139		—			4,865			4,865
Pay	3-Month USD-LIBOR		1.0000		12/17/2016	USD		3,000		267			(4,303	)		(4,036	)
Receive	3-Month AUD-BBSW		3.5000		3/16/2017	AUD		49,200		(8,295	)		245,077			236,782
Receive	6-Month EUR-LIBOR		0.5270		7/11/2017	EUR		5,184		—			8,739			8,739
Pay	3-Month USD-LIBOR		0.2336		7/15/2017	USD		12,100		2,451			12,239			14,690
Receive	3-Month SEK-LIBOR		2.9300		9/16/2017	SEK		15,949		—			95,682			95,682
Receive	3-Month AUD-BBSW		3.2500		9/21/2017	AUD		26,400		5,888			19,805			25,693
Pay	3-Month USD-LIBOR		1.0000		12/17/2017	USD		26,200		(56,011	)		(49,191	)		(105,202	)
Receive	3-Month USD-LIBOR		2.3200		3/24/2018	USD		746		—			4,246			4,246
Receive	3-Month USD-LIBOR		2.3330		3/29/2018	USD		738		—			4,268			4,268
Receive	3-Month USD-LIBOR		2.4000		3/29/2018	USD		723		—			5,120			5,120
Receive	6-Month EUR-LIBOR		1.3120		4/11/2018	EUR		9,025		—			90,190			90,190
Receive	3-Month USD-LIBOR		2.2100		6/9/2018	USD		707		—			383			383
Receive	3-Month USD-LIBOR		2.2775		6/13/2018	USD		734		—			1,269			1,269
Receive	3-Month AUD-BBSW		4.0000		6/18/2018	AUD		31,900		(52,905	)		496,331			443,426
Receive	6-Month GBP-LIBOR		2.8475		6/19/2018	GBP		1,797		—			12,745			12,745
Receive	6-Month GBP-LIBOR		2.8440		7/10/2018	GBP		1,861		—			12,681			12,681
Receive	6-Month GBP-LIBOR		2.8018		7/10/2018	GBP		3,676		—			22,612			22,612
Pay	6-Month GBP-LIBOR		1.0000		8/5/2018	GBP		1,818		—			(19,032	)		(19,032	)
Pay	6-Month GBP-LIBOR		1.0000		8/8/2018	GBP		1,834		—			(17,880	)		(17,880	)
Receive	3-Month USD-LIBOR		2.4020		8/8/2018	USD		1,797		—			3,931			3,931
Receive	3-Month USD-LIBOR		2.3813		8/8/2018	USD		2,709		—			4,844			4,844
Pay	6-Month GBP-LIBOR		1.0000		8/11/2018	GBP		1,786		—			(14,813	)		(14,813	)
Pay	6-Month GBP-LIBOR		1.0000		8/15/2018	GBP		1,749		—			(6,319	)		(6,319	)
Pay	6-Month GBP-LIBOR		1.0000		8/15/2018	GBP		1,805		—			(6,378	)		(6,378	)
Receive	3-Month USD-LIBOR		2.3420		8/15/2018	USD		2,656		—			2,146			2,146
Receive	3-Month USD-LIBOR		2.2550		8/18/2018	USD		2,644		—			(2,623	)		(2,623	)

See accompanying notes

18

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Pay/Receive Floating Rate	Floating Rate Index	Fixed Rate (%)		Expiration Date		Curr	Notional Amount(4) (000s)		Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value
Receive	3-Month USD-LIBOR		2.2625		8/19/2018	USD		2,677	$	—		$	(2,323	)	$	(2,323	)
Pay	6-Month GBP-LIBOR		1.0000		8/20/2018	GBP		881		—			(3,326	)		(3,326	)
Pay	6-Month JPY-LIBOR		1.0000		8/22/2018	JPY		335,681		—			(23,797	)		(23,797	)
Receive	3-Month USD-LIBOR		2.2950		8/22/2018	USD		1,311		—			(415	)		(415	)
Pay	6-Month GBP-LIBOR		1.0000		8/26/2018	GBP		1,809		—			(4,351	)		(4,351	)
Pay	6-Month GBP-LIBOR		1.0000		8/26/2018	GBP		1,809		—			(3,778	)		(3,778	)
Receive	3-Month USD-LIBOR		2.3563		8/30/2018	USD		2,707		—			1,651			1,651
Receive	3-Month USD-LIBOR		2.3630		8/30/2018	USD		2,714		—			2,007			2,007
Receive	3-Month USD-LIBOR		2.9300		12/19/2018	USD		2,721		—			23,026			23,026
Receive	3-Month USD-LIBOR		2.9700		12/20/2018	USD		1,752		—			16,120			16,120
Receive	3-Month USD-LIBOR		2.9800		12/20/2018	USD		1,720		—			16,149			16,149
Receive	3-Month USD-LIBOR		3.1250		12/23/2018	USD		1,745		—			21,070			21,070
Receive	3-Month USD-LIBOR		3.1250		12/23/2018	USD		1,745		—			21,070			21,070
Receive	3-Month USD-LIBOR		3.1050		12/23/2018	USD		1,757		—			20,545			20,545
Receive	3-Month USD-LIBOR		3.1063		12/28/2018	USD		1,873		—			21,712			21,712
Pay	3-Month USD-LIBOR		0.2349		2/26/2019	USD		972		—			97			97
Pay	3-Month USD-LIBOR		1.0000		3/9/2019	USD		975		—			(3,413	)		(3,413	)
Receive	6-Month EUR-LIBOR		1.6400		3/27/2019	EUR		1,817		—			46,374			46,374
Receive	6-Month EUR-LIBOR		1.5670		4/3/2019	EUR		885		—			20,789			20,789
Receive	6-Month AUD-BBSW		2.9675		6/16/2019	AUD		443		—			(4,431	)		(4,431	)
Receive	6-Month AUD-BBSW		4.0000		6/18/2019	AUD		10,600		55,344			314,664			370,008
Pay	6-Month GBP-LIBOR		1.0000		6/19/2019	GBP		1,832		—			(12,615	)		(12,615	)
Receive	3-Month USD-LIBOR		1.9910		6/28/2019	USD		821		—			10,217			10,217
Receive	3-Month USD-LIBOR		1.9900		7/3/2019	USD		1,504		—			18,450			18,450
Receive	3-Month USD-LIBOR		2.0215		7/7/2019	USD		1,501		—			20,475			20,475
Pay	6-Month GBP-LIBOR		1.0000		7/9/2019	GBP		2,105		—			(13,795	)		(13,795	)
Pay	6-Month GBP-LIBOR		1.0000		7/10/2019	GBP		4,149		—			(24,780	)		(24,780	)
Pay	6-Month EUR-LIBOR		1.0000		7/11/2019	EUR		1,728		—			(13,112	)		(13,112	)
Receive	3-Month USD-LIBOR		1.9465		7/11/2019	USD		2,061		—			20,703			20,703
Receive	3-Month USD-LIBOR		1.8950		7/22/2019	USD		1,542		—			11,313			11,313
Receive	3-Month USD-LIBOR		1.9257		7/22/2019	USD		1,542		—			13,554			13,554
Receive	3-Month USD-LIBOR		2.8430		8/14/2019	USD		1,820		—			3,652			3,652
Receive	3-Month USD-LIBOR		2.8403		8/14/2019	USD		3,615		—			7,067			7,067
Receive	3-Month USD-LIBOR		2.7500		8/21/2019	USD		1,818		—			271			271
Pay	3-Month USD-LIBOR		1.0000		12/17/2019	USD		5,500		(53,982	)		(30,327	)		(84,309	)
Receive	6-Month AUD-BBSW		3.7500		12/17/2019	AUD		7,900		134,211			32,216			166,427
Pay	6-Month EUR-LIBOR		1.0000		4/11/2020	EUR		5,076		—			(182,823	)		(182,823	)
Receive	6-Month GBP-LIBOR		3.0250		5/14/2020	GBP		887		—			19,280			19,280
Receive	6-Month GBP-LIBOR		3.0500		5/15/2020	GBP		1,773		—			40,601			40,601
Receive	6-Month GBP-LIBOR		3.1300		5/21/2020	GBP		947		—			13,823			13,823
Receive	6-Month GBP-LIBOR		3.1500		5/22/2020	GBP		1,871		—			28,424			28,424
Receive	6-Month GBP-LIBOR		3.0300		5/29/2020	GBP		893		—			10,227			10,227
Pay	6-Month EUR-LIBOR		1.0000		6/5/2020	EUR		1,421		—			(38,633	)		(38,633	)
Pay	6-Month EUR-LIBOR		1.0000		6/9/2020	EUR		704		—			(19,195	)		(19,195	)
Receive	3-Month CAN-CDOR		3.2000		6/14/2020	CAD		470		—			5,263			5,263
Receive	6-Month GBP-LIBOR		3.1730		6/18/2020	GBP		1,070		—			16,628			16,628
Receive	6-Month GBP-LIBOR		3.2150		6/20/2020	GBP		463		—			7,788			7,788
Receive	6-Month GBP-LIBOR		3.1490		6/25/2020	GBP		783		—			11,517			11,517
Receive	6-Month GBP-LIBOR		3.0750		6/27/2020	GBP		584		—			7,276			7,276
Receive	6-Month GBP-LIBOR		3.1030		7/9/2020	GBP		384		—			5,048			5,048
Receive	6-Month GBP-LIBOR		3.0450		7/10/2020	GBP		575		—			6,540			6,540
Receive	6-Month GBP-LIBOR		2.5762		8/5/2020	GBP		726		—			17,136			17,136
Receive	6-Month GBP-LIBOR		2.5760		8/5/2020	GBP		736		—			17,358			17,358
Receive	6-Month GBP-LIBOR		2.5700		8/6/2020	GBP		735		—			16,919			16,919
Receive	6-Month GBP-LIBOR		2.5348		8/6/2020	GBP		1,469		—			29,791			29,791
Receive	6-Month GBP-LIBOR		2.5225		8/7/2020	GBP		726		—			13,978			13,978
Receive	6-Month GBP-LIBOR		2.5310		8/7/2020	GBP		743		—			14,800			14,800
Receive	6-Month GBP-LIBOR		2.5280		8/7/2020	GBP		743		—			14,625			14,625
Receive	6-Month GBP-LIBOR		2.4500		8/10/2020	GBP		362		—			4,828			4,828
Receive	6-Month GBP-LIBOR		2.4626		8/10/2020	GBP		362		—			5,192			5,192
Receive	6-Month GBP-LIBOR		2.4555		8/10/2020	GBP		1,466		—			20,205			20,205
Receive	3-Month USD-LIBOR		2.3040		8/19/2020	USD		1,008		—			138			138
Receive	3-Month USD-LIBOR		2.2960		8/20/2020	USD		1,005		—			(317	)		(317	)

See accompanying notes

19

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Pay/Receive Floating Rate	Floating Rate Index	Fixed Rate (%)		Expiration Date		Curr	Notional Amount(4) (000s)		Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value
Receive	3-Month USD-LIBOR		2.2912		8/21/2020	USD		1,005	$	—		$	(604	)	$	(604	)
Receive	6-Month JPY-LIBOR		1.1200		8/22/2020	JPY		169,543		—			20,450			20,450
Pay	3-Month SEK-LIBOR		1.0000		9/16/2020	SEK		6,727		—			(92,978	)		(92,978	)
Receive	3-Month USD-LIBOR		4.0900		11/26/2020	USD		4,271		—			82,068			82,068
Receive	3-Month USD-LIBOR		4.0600		11/27/2020	USD		2,095		—			39,049			39,049
Receive	3-Month USD-LIBOR		4.0610		11/27/2020	USD		1,922		—			35,859			35,859
Receive	3-Month USD-LIBOR		4.1100		11/27/2020	USD		2,920		—			57,062			57,062
Receive	3-Month USD-LIBOR		4.0620		11/29/2020	USD		1,915		—			35,755			35,755
Receive	3-Month USD-LIBOR		4.1075		11/29/2020	USD		1,915		—			37,329			37,329
Receive	3-Month USD-LIBOR		4.0570		11/29/2020	USD		1,915		—			35,584			35,584
Receive	3-Month USD-LIBOR		4.1225		12/3/2020	USD		1,816		—			35,769			35,769
Pay	6-Month EUR-LIBOR		1.0000		3/25/2021	EUR		3,772		—			(115,844	)		(115,844	)
Pay	6-Month EUR-LIBOR		1.0000		4/3/2021	EUR		1,832		—			(52,363	)		(52,363	)
Receive	6-Month JPY-LIBOR		0.9200		5/13/2021	JPY		348,425		—			19,780			19,780
Receive	6-Month JPY-LIBOR		0.8800		5/20/2021	JPY		345,408		—			16,675			16,675
Pay	6-Month EUR-LIBOR		1.0000		6/9/2021	EUR		2,648		—			(58,913	)		(58,913	)
Receive	1-Month MXN-TIIE		5.6100		7/7/2021	MXN		19,200		(7,779	)		12,617			4,838
Receive	6-Month JPY-LIBOR		0.6925		8/19/2021	JPY		353,217		—			945			945
Pay	3-Month USD-LIBOR		1.0000		9/3/2021	USD		7,832		—			—			—
Pay	3-Month USD-LIBOR		1.0000		9/22/2021	USD		4,575		—			(102,767	)		(102,767	)
Pay	3-Month USD-LIBOR		1.0000		12/17/2021	USD		3,200		(41,120	)		(7,188	)		(48,308	)
Pay	6-Month EUR-LIBOR		1.0000		3/26/2022	EUR		2,535		—			(120,107	)		(120,107	)
Pay	6-Month EUR-LIBOR		1.0000		3/26/2022	EUR		2,495		—			(118,235	)		(118,235	)
Pay	6-Month GBP-LIBOR		1.0000		5/13/2022	GBP		4,081		—			(71,546	)		(71,546	)
Pay	6-Month GBP-LIBOR		1.0000		5/14/2022	GBP		2,034		—			(34,829	)		(34,829	)
Receive	6-Month GBP-LIBOR		3.8025		9/13/2022	GBP		294		—			23,254			23,254
Receive	6-Month GBP-LIBOR		3.5463		10/7/2022	GBP		741		—			43,912			43,912
Receive	3-Month USD-LIBOR		4.1650		12/11/2022	USD		769		—			37,029			37,029
Receive	3-Month USD-LIBOR		4.1410		12/12/2022	USD		1,153		—			54,244			54,244
Pay	6-Month EUR-LIBOR		0.3910		2/10/2023	EUR		232		—			(22,044	)		(22,044	)
Pay	6-Month EUR-LIBOR		0.3910		2/10/2023	EUR		1,375		—			(131,699	)		(131,699	)
Receive	6-Month EUR-LIBOR		2.9400		3/25/2023	EUR		1,976		—			57,768			57,768
Receive	6-Month EUR-LIBOR		2.8690		4/6/2023	EUR		961		—			26,119			26,119
Pay	6-Month JPY-LIBOR		1.0000		5/12/2023	JPY		709,679		—			(47,305	)		(47,305	)
Pay	6-Month JPY-LIBOR		1.0000		5/20/2023	JPY		700,224		—			(39,969	)		(39,969	)
Receive	6-Month GBP-LIBOR		3.3140		5/21/2023	GBP		538		—			19,213			19,213
Receive	6-Month EUR-LIBOR		2.7262		6/9/2023	EUR		5,538		—			124,725			124,725
Receive	6-Month NOK-NIBOR		4.0000		7/1/2023	NOK		8,368		—			62,921			62,921
Pay	6-Month JPY-LIBOR		1.0000		8/19/2023	JPY		713,949		—			(6,345	)		(6,345	)
Pay	6-Month GBP-LIBOR		0.6303		9/7/2023	GBP		343		—			(15,481	)		(15,481	)
Receive	6-Month GBP-LIBOR		3.9962		9/17/2023	GBP		317		—			26,090			26,090
Pay	6-Month NOK-NIBOR		1.0000		9/25/2023	NOK		3,182		—			(28,680	)		(28,680	)
Receive	3-Month SEK-LIBOR		3.6250		9/25/2023	SEK		3,357		—			8,125			8,125
Pay	6-Month GBP-LIBOR		1.0000		10/15/2023	GBP		554		—			(39,204	)		(39,204	)
Pay	3-Month USD-LIBOR		1.0000		11/26/2023	USD		5,080		—			(103,558	)		(103,558	)
Pay	3-Month USD-LIBOR		0.2306		12/18/2023	USD		2,000		(32,547	)		(65,532	)		(98,079	)
Pay	6-Month GBP-LIBOR		1.0000		1/10/2024	GBP		273		—			(19,164	)		(19,164	)
Pay	3-Month USD-LIBOR		1.0000		2/29/2024	USD		653		—			(24,868	)		(24,868	)
Pay	3-Month USD-LIBOR		1.0000		3/9/2024	USD		721		—			(36,602	)		(36,602	)
Pay	6-Month EUR-LIBOR		1.0000		3/28/2024	EUR		1,591		—			(109,512	)		(109,512	)
Receive	6-Month EUR-LIBOR		2.3340		4/11/2024	EUR		910		—			80,951			80,951
Receive	3-Month USD-LIBOR		3.9700		5/1/2024	USD		1,315		—			38,206			38,206
Pay	6-Month GBP-LIBOR		1.0000		5/22/2024	GBP		2,111		—			(36,516	)		(36,516	)
Pay	6-Month GBP-LIBOR		1.0000		5/22/2024	GBP		1,057		—			18,279			18,279
Pay	6-Month GBP-LIBOR		1.0000		5/23/2024	GBP		1,072		—			(18,281	)		(18,281	)
Pay	6-Month GBP-LIBOR		1.0000		5/23/2024	GBP		533		—			(9,050	)		(9,050	)
Pay	6-Month GBP-LIBOR		1.0000		5/31/2024	GBP		968		—			(14,008	)		(14,008	)
Pay	6-Month GBP-LIBOR		1.0000		5/31/2024	GBP		525		—			(7,339	)		(7,339	)
Pay	6-Month GBP-LIBOR		1.0000		5/31/2024	GBP		840		—			(11,855	)		(11,855	)
Pay	6-Month GBP-LIBOR		1.0000		6/3/2024	GBP		1,053		—			(17,663	)		(17,663	)
Receive	6-Month GBP-LIBOR		3.4600		6/3/2024	GBP		177		—			6,638			6,638
Receive	6-Month GBP-LIBOR		3.5500		6/5/2024	GBP		148		—			6,470			6,470
Receive	6-Month EUR-LIBOR		2.8250		6/6/2024	EUR		958		—			18,797			18,797

See accompanying notes

20

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Pay/Receive Floating Rate	Floating Rate Index	Fixed Rate (%)		Expiration Date		Curr	Notional Amount(4) (000s)		Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value
Receive	6-Month GBP-LIBOR		3.5400		6/12/2024	GBP		154	$	—		$	6,623		$	6,623
Pay	6-Month GBP-LIBOR		1.0000		6/13/2024	GBP		877		—			(14,533	)		(14,533	)
Pay	6-Month GBP-LIBOR		1.0000		6/13/2024	GBP		631		—			(9,945	)		(9,945	)
Pay	6-Month GBP-LIBOR		1.0000		6/16/2024	GBP		430		—			(6,827	)		(6,827	)
Receive	6-Month EUR-LIBOR		2.8925		6/17/2024	EUR		591		—			12,481			12,481
Pay	6-Month AUD-BBSW		0.0000		6/18/2024	AUD		12,200		(116,167	)		(934,769	)		(1,050,936	)
Pay	3-Month USD-LIBOR		0.2306		6/18/2024	USD		9,900		(125,218	)		(338,328	)		(463,546	)
Pay	6-Month GBP-LIBOR		1.0000		6/18/2024	GBP		1,817		—			(30,771	)		(30,771	)
Receive	6-Month GBP-LIBOR		3.5120		6/19/2024	GBP		211		—			8,601			8,601
Pay	6-Month GBP-LIBOR		1.0000		6/20/2024	GBP		1,086		—			(17,397	)		(17,397	)
Pay	6-Month GBP-LIBOR		1.0000		6/20/2024	GBP		588		—			(8,834	)		(8,834	)
Pay	6-Month GBP-LIBOR		1.0000		6/20/2024	GBP		788		—			(13,679	)		(13,679	)
Receive	6-Month EUR-LIBOR		2.8840		6/20/2024	EUR		972		—			20,301			20,301
Receive	6-Month GBP-LIBOR		3.5320		6/20/2024	GBP		211		—			8,896			8,896
Receive	6-Month EUR-LIBOR		2.8060		6/23/2024	EUR		581		—			11,020			11,020
Pay	6-Month GBP-LIBOR		1.0000		6/27/2024	GBP		885		—			(13,818	)		(13,818	)
Pay	6-Month GBP-LIBOR		1.0000		6/27/2024	GBP		443		—			(7,102	)		(7,102	)
Pay	6-Month GBP-LIBOR		1.0000		6/27/2024	GBP		317		—			(4,486	)		(4,486	)
Pay	6-Month GBP-LIBOR		1.0000		6/27/2024	GBP		660		—			(9,258	)		(9,258	)
Pay	3-Month USD-LIBOR		1.0000		7/3/2024	USD		581		—			(26,113	)		(26,113	)
Pay	3-Month USD-LIBOR		1.0000		7/7/2024	USD		580		—			(27,075	)		(27,075	)
Pay	3-Month USD-LIBOR		1.0000		7/11/2024	USD		796		—			(31,453	)		(31,453	)
Pay	6-Month GBP-LIBOR		1.0000		7/11/2024	GBP		650		—			(9,350	)		(9,350	)
Pay	6-Month GBP-LIBOR		1.0000		7/11/2024	GBP		968		—			(11,664	)		(11,664	)
Pay	3-Month USD-LIBOR		1.0000		7/22/2024	USD		597		—			(20,707	)		(20,707	)
Pay	3-Month USD-LIBOR		1.0000		7/22/2024	USD		597		—			(20,796	)		(20,796	)
Pay	6-Month GBP-LIBOR		1.0000		8/8/2024	GBP		637		—			(5,149	)		(5,149	)
Pay	6-Month GBP-LIBOR		1.0000		8/8/2024	GBP		636		—			(4,725	)		(4,725	)
Pay	6-Month GBP-LIBOR		1.0000		8/8/2024	GBP		637		—			(3,155	)		(3,155	)
Pay	6-Month EUR-LIBOR		1.0000		8/12/2024	EUR		362		—			(6,740	)		(6,740	)
Pay	3-Month USD-LIBOR		1.0000		8/13/2024	USD		934		—			(7,913	)		(7,913	)
Pay	3-Month USD-LIBOR		1.0000		8/13/2024	USD		1,849		—			(14,885	)		(14,885	)
Pay	3-Month USD-LIBOR		1.0000		8/20/2024	USD		929		—			(3,725	)		(3,725	)
Receive	3-Month USD-LIBOR		3.1300		9/5/2024	USD		2,274		—			—			—
Receive	6-Month EUR-LIBOR		2.2500		9/18/2024	EUR		9,800		47,823			291,192			339,015
Pay	3-Month USD-LIBOR		1.0000		12/17/2024	USD		4,000		(44,231	)		(101,502	)		(145,733	)
Pay	6-Month AUD-BBSW		1.0000		12/17/2024	AUD		2,900		(71,865	)		(49,172	)		(121,037	)
Pay	6-Month NOK-NIBOR		1.0000		7/1/2025	NOK		6,276		—			(57,813	)		(57,813	)
Pay	6-Month GBP-LIBOR		1.0000		8/5/2025	GBP		463		—			(22,133	)		(22,133	)
Pay	6-Month GBP-LIBOR		1.0000		8/5/2025	GBP		472		—			(22,563	)		(22,563	)
Pay	6-Month GBP-LIBOR		1.0000		8/6/2025	GBP		470		—			(21,988	)		(21,988	)
Pay	6-Month GBP-LIBOR		1.0000		8/6/2025	GBP		940		—			(37,611	)		(37,611	)
Pay	6-Month GBP-LIBOR		1.0000		8/7/2025	GBP		463		—			(17,579	)		(17,579	)
Pay	6-Month GBP-LIBOR		1.0000		8/7/2025	GBP		479		—			(18,495	)		(18,495	)
Pay	6-Month GBP-LIBOR		1.0000		8/7/2025	GBP		479		—			(18,143	)		(18,143	)
Pay	6-Month GBP-LIBOR		1.0000		8/10/2025	GBP		231		—			(6,087	)		(6,087	)
Pay	6-Month GBP-LIBOR		1.0000		8/10/2025	GBP		231		—			(6,406	)		(6,406	)
Pay	6-Month GBP-LIBOR		1.0000		8/10/2025	GBP		945		—			(25,093	)		(25,093	)
Pay	6-Month GBP-LIBOR		1.0000		8/17/2025	GBP		383		—			(10,554	)		(10,554	)
Pay	6-Month GBP-LIBOR		1.0000		8/18/2025	GBP		384		—			(8,941	)		(8,941	)
Pay	6-Month GBP-LIBOR		1.0000		8/19/2025	GBP		383		—			(7,688	)		(7,688	)
Receive	3-Month USD-LIBOR		4.5000		10/29/2025	USD		674		—			21,507			21,507
Receive	3-Month USD-LIBOR		4.5000		10/31/2025	USD		372		—			11,870			11,870
Receive	3-Month USD-LIBOR		4.5000		10/31/2025	USD		372		—			11,870			11,870
Receive	3-Month USD-LIBOR		4.4750		11/1/2025	USD		674		—			20,912			20,912
Receive	3-Month USD-LIBOR		4.8200		11/15/2025	USD		784		—			32,785			32,785
Receive	6-Month EUR-LIBOR		2.9180		3/26/2026	EUR		2,297		—			227,589			227,589
Receive	6-Month EUR-LIBOR		2.9200		3/26/2026	EUR		2,262		—			224,511			224,511
Receive	3-Month USD-LIBOR		3.5600		4/23/2026	USD		628		—			29,216			29,216
Receive	6-Month JPY-LIBOR		1.8640		5/12/2026	JPY		243,762		—			25,716			25,716
Receive	6-Month JPY-LIBOR		1.8190		5/22/2026	JPY		241,248		—			21,933			21,933
Pay	6-Month EUR-LIBOR		1.0000		6/9/2026	EUR		1,976		—			(63,451	)		(63,451	)
Receive	3-Month USD-LIBOR		3.4750		6/20/2026	USD		634		—			22,666			22,666

See accompanying notes

21

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Pay/Receive Floating Rate	Floating Rate Index	Fixed Rate (%)		Expiration Date		Curr	Notional Amount(4) (000s)		Upfront Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Fair Value
Receive	6-Month JPY-LIBOR		1.6210		8/21/2026	JPY		244,587	$	—	$	4,836		$	4,836
Pay	3-Month USD-LIBOR		1.0000		12/19/2026	USD		688		—		(61,807	)		(61,807	)
Pay	3-Month USD-LIBOR		1.0000		12/20/2026	USD		459		—		(40,941	)		(40,941	)
Pay	3-Month USD-LIBOR		1.0000		12/20/2026	USD		423		—		(38,884	)		(38,884	)
Pay	3-Month USD-LIBOR		1.0000		12/23/2026	USD		460		—		(43,325	)		(43,325	)
Pay	3-Month USD-LIBOR		1.0000		12/23/2026	USD		454		—		(43,524	)		(43,524	)
Pay	3-Month USD-LIBOR		1.0000		12/23/2026	USD		454		—		(43,524	)		(43,524	)
Pay	3-Month USD-LIBOR		1.0000		12/28/2026	USD		468		—		(43,428	)		(43,428	)
Pay	6-Month GBP-LIBOR		1.0000		8/5/2027	GBP		850		—		(19,840	)		(19,840	)
Pay	6-Month GBP-LIBOR		1.0000		8/26/2027	GBP		880		—		(7,377	)		(7,377	)
Receive	6-Month EUR-LIBOR		3.3300		7/3/2028	EUR		140		—		8,675			8,675
Receive	6-Month EUR-LIBOR		3.3600		7/3/2028	EUR		276		—		17,578			17,578
Receive	6-Month EUR-LIBOR		3.3600		7/3/2028	EUR		276		—		17,578			17,578
Receive	6-Month EUR-LIBOR		3.3350		7/3/2028	EUR		274		—		17,057			17,057
Receive	6-Month EUR-LIBOR		3.4650		7/11/2028	EUR		431		—		30,005			30,005
Pay	6-Month GBP-LIBOR		1.0000		9/13/2028	GBP		611		—		(40,066	)		(40,066	)
Pay	6-Month GBP-LIBOR		1.0000		10/9/2028	GBP		949		—		(50,476	)		(50,476	)
Pay	6-Month GBP-LIBOR		1.0000		10/9/2028	GBP		525		—		(27,659	)		(27,659	)
Pay	3-Month USD-LIBOR		1.0000		10/31/2028	USD		1,976		—		(38,913	)		(38,913	)
Pay	3-Month USD-LIBOR		1.0000		10/31/2028	USD		1,976		—		(38,913	)		(38,913	)
Pay	3-Month USD-LIBOR		1.0000		10/31/2028	USD		3,423		—		(66,805	)		(66,805	)
Pay	3-Month USD-LIBOR		1.0000		11/3/2028	USD		3,446		—		(66,004	)		(66,004	)
Pay	3-Month USD-LIBOR		1.0000		11/5/2028	USD		4,038		—		(81,582	)		(81,582	)
Pay	3-Month USD-LIBOR		1.0000		11/14/2028	USD		4,000		—		(100,779	)		(100,779	)
Pay	3-Month USD-LIBOR		1.0000		11/27/2028	USD		492		—		(44,758	)		(44,758	)
Pay	3-Month USD-LIBOR		1.0000		11/27/2028	USD		745		—		(70,035	)		(70,035	)
Pay	3-Month USD-LIBOR		1.0000		11/27/2028	USD		542		—		(48,971	)		(48,971	)
Pay	3-Month USD-LIBOR		1.0000		11/29/2028	USD		496		—		(44,911	)		(44,911	)
Pay	3-Month USD-LIBOR		1.0000		11/29/2028	USD		496		—		(46,264	)		(46,264	)
Pay	3-Month USD-LIBOR		1.0000		11/29/2028	USD		496		—		(44,745	)		(44,745	)
Pay	3-Month USD-LIBOR		1.0000		12/3/2028	USD		454		—		(42,923	)		(42,923	)
Receive	6-Month GBP-LIBOR		4.0000		3/23/2029	GBP		1,340		—		37,960			37,960
Pay	6-Month EUR-LIBOR		1.0000		3/26/2029	EUR		841		—		(119,745	)		(119,745	)
Pay	6-Month EUR-LIBOR		1.0000		3/26/2029	EUR		827		—		(111,007	)		(111,007	)
Pay	3-Month USD-LIBOR		1.0000		4/27/2029	USD		5,109		—		(62,549	)		(62,549	)
Pay	3-Month USD-LIBOR		1.0000		5/1/2029	USD		1,555		—		(35,634	)		(35,634	)
Pay	3-Month USD-LIBOR		1.0000		5/1/2029	USD		1,256		—		(28,769	)		(28,769	)
Pay	3-Month USD-LIBOR		1.0000		5/1/2029	USD		1,052		—		(23,647	)		(23,647	)
Pay	6-Month GBP-LIBOR		1.0000		5/20/2029	GBP		941		—		(34,190	)		(34,190	)
Pay	6-Month GBP-LIBOR		1.0000		6/3/2029	GBP		566		—		(21,861	)		(21,861	)
Pay	3-Month NZD-BBR		1.0000		6/5/2029	NZD		471		—		13,400			13,400
Pay	6-Month GBP-LIBOR		1.0000		6/12/2029	GBP		491		—		(20,065	)		(20,065	)
Pay	6-Month GBP-LIBOR		1.0000		6/19/2029	GBP		502		—		(19,336	)		(19,336	)
Pay	6-Month GBP-LIBOR		1.0000		6/20/2029	GBP		502		—		(19,352	)		(19,352	)
Pay	6-Month GBP-LIBOR		1.0000		8/12/2029	GBP		216		—		(7,123	)		(7,123	)
Pay	6-Month GBP-LIBOR		1.0000		8/12/2029	GBP		216		—		(7,479	)		(7,479	)
Receive	3-Month USD-LIBOR		3.6625		8/13/2029	USD		262		—		3,994			3,994
Receive	3-Month USD-LIBOR		3.6700		8/13/2029	USD		265		—		4,193			4,193
Pay	6-Month GBP-LIBOR		1.0000		3/23/2031	GBP		1,282		—		(55,143	)		(55,143	)
Receive	6-Month JPY-LIBOR		2.7200		6/14/2032	JPY		47,517		—		7,516			7,516
Receive	6-Month JPY-LIBOR		2.6800		6/14/2032	JPY		48,655		—		6,823			6,823
Receive	6-Month JPY-LIBOR		2.7050		6/19/2032	JPY		45,786		—		6,893			6,893
Pay	6-Month EUR-LIBOR		1.0000		7/3/2033	EUR		320		—		(9,949	)		(9,949	)
Pay	6-Month EUR-LIBOR		1.0000		7/3/2033	EUR		640		—		(20,912	)		(20,912	)
Pay	6-Month EUR-LIBOR		1.0000		7/3/2033	EUR		640		—		(20,912	)		(20,912	)
Pay	6-Month EUR-LIBOR		1.0000		7/3/2033	EUR		638		—		(20,329	)		(20,329	)
Pay	6-Month EUR-LIBOR		1.0000		7/11/2033	EUR		1,006		—		(36,957	)		(36,957	)
Receive	3-Month USD-LIBOR		4.4300		10/31/2033	USD		988		—		24,455			24,455
Receive	3-Month USD-LIBOR		4.4300		10/31/2033	USD		988		—		24,455			24,455
Receive	3-Month USD-LIBOR		4.4200		10/31/2033	USD		1,696		—		41,488			41,488
Receive	3-Month USD-LIBOR		4.4100		11/1/2033	USD		1,708		—		41,131			41,131
Receive	3-Month USD-LIBOR		4.4400		11/5/2033	USD		2,026		—		50,663			50,663
Receive	3-Month USD-LIBOR		4.6800		11/14/2033	USD		2,066		—		66,594			66,594

See accompanying notes

22

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Pay/Receive Floating Rate	Floating Rate Index	Fixed Rate (%)		Expiration Date		Curr	Notional Amount(4) (000s)		Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value
Pay	3-Month USD-LIBOR		1.0000		12/11/2033	USD		629	$	—		$	(45,894	)	$	(45,894	)
Pay	3-Month USD-LIBOR		1.0000		12/12/2033	USD		946		—			(67,863	)		(67,863	)
Receive	6-Month GBP-LIBOR		3.8590		3/23/2034	GBP		212		—			12,630			12,630
Receive	3-Month USD-LIBOR		4.1500		5/1/2034	USD		1,544		—			25,044			25,044
Receive	3-Month USD-LIBOR		4.1350		5/1/2034	USD		1,292		—			20,387			20,387
Pay	6-Month EUR-LIBOR		1.0000		5/27/2034	EUR		171		—			(13,163	)		(13,163	)
Pay	6-Month EUR-LIBOR		1.0000		5/30/2034	EUR		331		—			(24,361	)		(24,361	)
Pay	6-Month EUR-LIBOR		1.0000		5/30/2034	EUR		331		—			(24,538	)		(24,538	)
Pay	6-Month EUR-LIBOR		1.0000		5/30/2034	EUR		333		—			(24,099	)		(24,099	)
Receive	6-Month GBP-LIBOR		3.7900		6/4/2034	GBP		423		—			13,912			13,912
Receive	6-Month GBP-LIBOR		3.8000		6/5/2034	GBP		350		—			11,688			11,688
Receive	6-Month GBP-LIBOR		3.8100		6/12/2034	GBP		372		—			12,627			12,627
Receive	6-Month GBP-LIBOR		3.7910		6/19/2034	GBP		302		—			9,962			9,962
Receive	6-Month GBP-LIBOR		3.7800		6/20/2034	GBP		303		—			9,801			9,801
Pay	6-Month EUR-LIBOR		1.0000		7/3/2034	EUR		148		—			(9,960	)		(9,960	)
Receive	6-Month GBP-LIBOR		3.4425		8/5/2034	GBP		302		—			19,329			19,329
Receive	6-Month GBP-LIBOR		3.2175		8/27/2034	GBP		310		—			834			834
Pay	6-Month JPY-LIBOR		1.0000		6/14/2037	JPY		54,732		—			(3,094	)		(3,094	)
Pay	6-Month JPY-LIBOR		1.0000		6/14/2037	JPY		56,015		—			(1,920	)		(1,920	)
Pay	6-Month JPY-LIBOR		1.0000		6/19/2037	JPY		53,144		—			(1,719	)		(1,719	)
Receive	6-Month EUR-LIBOR		2.6000		7/3/2038	EUR		186		—			3,745			3,745
Receive	6-Month EUR-LIBOR		2.6300		7/3/2038	EUR		365		—			7,855			7,855
Receive	6-Month EUR-LIBOR		2.6300		7/3/2038	EUR		365		—			7,855			7,855
Receive	6-Month EUR-LIBOR		2.6150		7/3/2038	EUR		363		—			7,560			7,560
Receive	6-Month EUR-LIBOR		2.6800		7/11/2038	EUR		577		—			13,750			13,750
Receive	3-Month USD-LIBOR		4.0885		4/27/2039	USD		4,782		—			187,638			187,638
Pay	6-Month GBP-LIBOR		1.0000		7/28/2039	GBP		653		—			(13,745	)		(13,745	)
Receive	3-Month USD-LIBOR		3.6190		7/30/2039	USD		1,111		—			4,901			4,901
Pay	6-Month GBP-LIBOR		1.0000		8/23/2043	GBP		183		—			(10,810	)		(10,810	)
Pay	6-Month GBP-LIBOR		1.0000		1/22/2044	GBP		318		—			(60,623	)		(60,623	)
Pay	6-Month GBP-LIBOR		0.6009		1/22/2044	GBP		335		—			(62,984	)		(62,984	)
Pay	6-Month GBP-LIBOR		0.3441		1/22/2044	GBP		161		—			(32,404	)		(32,404	)
Pay	3-Month USD-LIBOR		1.0000		4/27/2044	USD		2,650		—			(128,588	)		(128,588	)
Pay	3-Month USD-LIBOR		0.2306		6/18/2044	USD		400		(5,958	)		(49,686	)		(55,644	)
Receive	6-Month GBP-LIBOR		3.2123		7/28/2044	GBP		736		—			13,258			13,258
Pay	3-Month USD-LIBOR		1.0000		7/30/2044	USD		1,313		—			(4,104	)		(4,104	)
Pay	6-Month EUR-LIBOR		1.0000		8/7/2044	EUR		132		—			(5,645	)		(5,645	)
Pay	6-Month EUR-LIBOR		1.0000		9/17/2044	EUR		4,900		(661,626	)		(923,740	)		(1,585,366	)
Pay	6-Month EUR-LIBOR		1.0000		3/18/2045	EUR		600		(21,483	)		(19,519	)		(41,002	)
Pay	3-Month USD-LIBOR		1.0000		4/23/2046	USD		324		—			(30,769	)		(30,769	)
Pay	3-Month USD-LIBOR		1.0000		6/20/2046	USD		322		—			(25,689	)		(25,689	)
									$	(1,053,203	)	$	(2,710,145	)	$	(3,763,349	)

OTC Swap Agreements Outstanding on August 31, 2014:

Credit Default Swaps on Corporate and Sovereign Securities - Buy Protection ⁽¹⁾ 

Reference Entity	Counter- Party	Fixed Rate(%)		Expiration Date		Implied Credit Spread at 8/31/2014 (3) (%)		Curr	Notional Amount (4) (000s)		Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value
J.C. Penny Corporation, Inc.	BNP		1.0000		12/20/2015		2.5687	USD		75	$	4,616		$	(7,333	)	$	(2,717	)
Radioshack Corporation	CBK		1.0000		6/20/2016		91.8377	USD		30		16,724			(1,138	)		15,586
Astaldi SPA	DUB		1.0000		9/20/2016		1.7689	EUR		340		4,226			2,090			6,316
Radioshack Corporation	DUB		1.0000		9/20/2016		95.3963	USD		60		34,363			(2,299	)		32,064
Radioshack Corporation	DUB		1.0000		9/20/2016		1.5708	USD		110		63,800			(5,015	)		58,785
Federal Republic of Brazil	BRC		1.0000		12/20/2016		0.6798	USD		800		10,344			(17,401	)		(7,057	)
Royal Bank of Scotland	DUB		1.0000		12/20/2016		0.6272	EUR		300		(18,534	)		(22,341	)		(40,875	)
Rallye S.A.	BNP		1.0000		3/20/2017		1.0163	EUR		15		(539	)		(1,418	)		(1,957	)

See accompanying notes

23

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Reference Entity	Counter- Party	Fixed Rate (%)		Expiration Date		Implied Credit Spread at 8/31/2014 (3) (%)		Curr	Notional Amount (4) (000s)		Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value
Rallye S.A.	BNP		1.0000		3/20/2017		0.6272	EUR		25	$	(946	)	$	(2,316	)	$	(3,262	)
Darden Restaurants, Inc.	BRC		1.0000		6/20/2017		0.7382	USD		105		(1,167	)		181			(986	)
Unisys Corporation	DUB		1.0000		9/20/2017		1.5982	USD		130		(12,784	)		(784	)		(13,568	)
Safeway, Inc.	BRC		1.0000		3/20/2018		3.1494	USD		375		3,046			11,469			14,515
Renault, S.A.	BRC		1.0000		3/20/2018		0.9343	EUR		320		(302	)		(1,708	)		(2,010	)
Sainsbury, PLC	DUB		1.0000		3/20/2018		0.8402	EUR		650		(1,568	)		(5,899	)		(7,467	)
Volvo Treasury	UAG		0.0000		3/20/2018		0.6607	EUR		50		1,599			(2,547	)		(948	)
Credit Agricole, S.A.	CBK		1.0000		6/20/2018		0.4612	EUR		800		(30,555	)		(70,294	)		(100,849	)
J.C. Penny Corporation, Inc.	BRC		1.0000		6/20/2018		5.4605	USD		25		2,939			(2,898	)		41
J.C Penny Corporation, Inc.	BNP		1.0000		6/20/2018		0.5996	USD		100		8,191			(8,025	)		166
Electricite de France	FBF		1.0000		9/20/2018		0.4659	EUR		200		(2,914	)		(3,398	)		(6,312	)
J.C. Penny Corporation, Inc.	BRC		1.0000		9/20/2018		5.6259	USD		100		8,194			(7,407	)		787
Nationwide Building Society	BNP		1.0000		9/20/2018		0.4260	EUR		200		1,940			(8,058	)		(6,118	)
Nationwide Building Society	BNP		1.0000		9/20/2018		0.4758	EUR		500		3,711			(19,006	)		(15,295	)
Turkey Government International Bond	DUB		1.0000		9/20/2018		1.5250	USD		500		14,872			(5,477	)		9,395
Turkey Government International Bond	JPM		1.0000		9/20/2018		1.5250	USD		500		14,689			(5,294	)		9,395
Staples, Inc.	DUB		1.0000		9/20/2018		2.3051	USD		270		6,162			184			6,346
Credit Agricole, S.A.	BOA		1.0000		12/20/2018		0.5147	EUR		500		(48,511	)		(21,114	)		(69,625	)
Daimler AG	BNP		1.0000		12/20/2018		0.3253	EUR		100		157			(4,117	)		(3,960	)
Intesa Sanpaolo SPA	BRC		1.0000		12/20/2018		0.6769	EUR		300		(12,763	)		(27,024	)		(39,787	)
Kingfisher, PLC	FBF		1.0000		12/20/2018		0.5754	EUR		150		(1,085	)		(2,949	)		(4,034	)
Kingfisher, PLC	BNP		1.0000		12/20/2018		0.5754	EUR		100		(807	)		(1,882	)		(2,689	)
Kingfisher, PLC	BNP		1.0000		12/20/2018		0.5754	EUR		150		(1,295	)		(2,739	)		(4,034	)
Nomura Holdings	JPM		1.0000		12/20/2018		0.7207	JPY		30,000		(2,172	)		(1,982	)		(4,154	)
Rite Aid Corportation	DUB		1.0000		12/20/2018		2.2762	USD		50		(4,467	)		(1,033	)		(5,500	)
Rite Aid Corportation	DUB		1.0000		12/20/2018		2.2762	USD		125		(10,958	)		(2,792	)		(13,750	)
Turkey EM BP	CBK		1.0000		12/20/2018		1.5719	USD		3,100		116,363			(44,896	)		71,467
General Motor	BRC		1.0000		3/20/2019		0.7158	USD		120		(19,793	)		(2,885	)		(22,678	)
Goldman Sachs Group	BNP		1.0000		3/20/2019		0.7394	USD		400		686			(5,864	)		(5,178	)
Intesa Sanpaolo SPA	BNP		1.0000		3/20/2019		0.6989	EUR		150		(12,140	)		(8,483	)		(20,623	)
J.C. Penny Corporation, Inc.	DUB		1.0000		3/20/2019		5.8951	USD		75		16,149			(14,331	)		1,818
Nomura Holdings	DUB		1.0000		3/20/2019		0.7629	JPY		30,000		(309	)		(3,512	)		(3,821	)
Reed Elsevier, PLC	DUB		1.0000		3/20/2019		0.4260	EUR		250		(7,419	)		(1,391	)		(8,810	)
Reed Elsevier, PLC	BRC		1.0000		3/20/2019		0.4260	EUR		250		(7,443	)		(1,367	)		(8,810	)
South Africa Government International Bond	BRC		1.0000		3/20/2019		1.5708	USD		1,000		58,002			(34,201	)		23,801
Korea Government International Bond	JPM		1.0000		3/20/2019		0.5200	USD		200		(2,692	)		(2,245	)		(4,937	)
Aegon NV	BNP		1.0000		6/20/2019		0.7053	EUR		150		(191	)		(2,868	)		(3,059	)
Ford Motor Credit	BRC		1.0000		6/20/2019		0.7158	USD		120		(22,703	)		(886	)		(23,589	)
HCA, Inc.	JPM		1.0000		6/20/2019		1.8666	USD		115		(15,525	)		(777	)		(16,302	)
HSBC Bank, PLC	BNP		1.0000		9/20/2019		0.4700	EUR		300		(9,248	)		(1,493	)		(10,741	)
Lloyds Bank	DUB		1.0000		9/20/2019		0.5996	EUR		400		(105,714	)		(3,833	)		(109,547	)
Indonesia Government International Bond	JPM		1.0000		9/20/2019		1.3901	USD		300		7,650			(3,050	)		4,600
Korea Government International Bond	BNP		1.0000		9/20/2019		0.5200	USD		250		(5,269	)		(782	)		(6,051	)
Korea Government International Bond	BRC		1.0000		9/20/2019		0.5200	USD		250		(5,208	)		(844	)		(6,052	)
Royal Bank of Scotland	DUB		1.0000		9/20/2019		1.0367	EUR		300		(73,982	)		(3,925	)		(77,907	)
United Mexican States Government International Bond	DUB		1.0000		9/20/2019		0.6984	USD		263		(4,217	)		287			(3,930	)

See accompanying notes

24

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Reference Entity	Counter- Party	Fixed Rate (%)		Expiration Date		Implied Credit Spread at 8/31/2014 (3) (%)		Curr	Notional Amount (4) (000s)		Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Fair Value
Illinois State Municipal Bank	CBK		1.0000		3/20/2023		2.0311	USD		300	$	17,699	$	331		$	8,030
Illinois State Municipal Bank	CBK		1.0000		6/20/2023		2.0583	USD		200		10,492		2,017			12,509
Republic of South Africa	JPM		1.0000		9/20/2023		2.2349	USD		200		25,021		(7,317	)		17,704
Illinois State Municipal Bank	CBK		1.0000		12/20/2023		2.1115	USD		1,600		118,565		(11,011	)		107,554
											$	126,980	$	(405,090	)	$	(278,110	)

Credit Default Swaps on Corporate and Sovereign Securities - Sell Protection ⁽²⁾ 

Reference Entity	Counter- Party	Fixed Rate (%)		Expiration Date		Implied Credit Spread at 8/31/2014 (3) (%)		Curr	Notional Amount (4) (000s)		Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value
Citigroup, Inc.	FBF		1.0000		9/20/2014		0.1815	USD		100	$	(31	)	$	82		$	51
Radioshack Corporation	CBK		5.0000		6/20/2015		117.9982	USD		30		(13,992	)		1,205			(12,787	)
Radioshack Corporation	DUB		5.0000		6/20/2015		1.5250	USD		60		(29,546	)		3,971			(25,575	)
Radioshack Corporation	DUB		5.0000		6/20/2015		2.2762	USD		110		(55,000	)		8,113			(46,887	)
Community Health Systems	GST		5.0000		12/20/2016		0.8330	USD		700		60,313			6,587			66,900
Italy Government International Bond	FBF		1.0000		6/20/2017		0.6359	USD		200		(15,161	)		17,183			2,022
Rallye S.A.	BNP		1.0000		3/20/2018		4.0440	EUR		25		(3,251	)		2,642			(609	)
Rallye S.A.	BNP		1.0000		3/20/2018		1.4631	EUR		15		(1,956	)		1,591			(365	)
Safeway, Inc.	BRC		1.0000		3/20/2019		3.1494	USD		375		(11,230	)		(20,571	)		(31,801	)
Indonesia AS	BOA		1.0000		3/20/2019		1.1815	USD		100		(4,686	)		3,831			(855	)
Indonesia AS	BCC		1.0000		3/20/2019		1.1815	USD		200		(9,450	)		7,741			(1,709	)
Indonesia AS	GST		1.0000		3/20/2019		1.1815	USD		700		(36,926	)		31,443			(5,483	)
Lafarge SA	CBK		1.0000		3/20/2019		0.8445	EUR		300		(18,007	)		20,558			2,551
Sainsbury, PLC	DUB		1.0000		3/20/2019		1.0605	EUR		700		(6,764	)		7,156			392
UBS AG London	JPM		1.0000		3/20/2019		0.4111	EUR		300		4,589			6,268			10,857
Darden Restaurants, Inc.	BRC		1.0000		6/20/2019		0.7382	USD		105		(1,783	)		(382	)		(2,165	)
General Motors Co.	BRC		5.0000		6/20/2019		1.3918	USD		120		18,627			1,074			19,701
Italy Government International Bond	CBK		1.0000		6/20/2019		0.9561	USD		1,800		(18,903	)		22,872			3,969
Italy Government International Bond	MSC		1.0000		6/20/2019		0.9561	USD		600		(6,434	)		7,757			1,323
Munich Re	BNP		1.0000		6/20/2019		0.7616	EUR		150		482			2,337			2,819
Astaldi SPA	DUB		1.0000		9/20/2019		4.0440	EUR		340		(42,696	)		(17,871	)		(60,567	)
Credit Suisse	BRC		1.0000		9/20/2019		0.5400	EUR		150		3,179			1,490			4,669
Darden Restaurants, Inc.	JPM		1.0000		9/20/2019		1.6101	USD		50		(1,973	)		677			(1,296	)
Darden Restaurants, Inc.	BRC		1.0000		9/20/2019		1.6101	USD		25		(942	)		294			(648	)
Staples, Inc.	DUB		1.0000		9/20/2019		2.3051	USD		270		(14,848	)		(552	)		(15,400	)
Unisys Corporation	DUB		5.0000		9/20/2019		3.1221	USD		130		12,300			(990	)		11,310
Renault, S.A.	BRC		1.0000		12/20/2020		1.4749	EUR		320		(15,350	)		3,672			(11,678	)
											$	(209,439	)	$	118,178		$	(91,261	)

See accompanying notes

25

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Credit Default Swaps on Credit Indices - Buy Protection ⁽¹⁾ 

Index/Tranches	Counter- Party	Fixed Pay Rate (%)		Expiration Date		Curr	Notional Amount (4) (000s)		Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value (5)
Markit ITRX EUR	BNP		5.00		12/20/2018	EUR		1,400	$	(264,490	)	$	(70,403	)	$	(334,893	)
Markit ITRX EUR	DUB		5.00		12/20/2018	EUR		729		(55,995	)		(59,484	)		(115,479	)
Markit ITRX EUR	DUB		5.00		12/20/2018	EUR		1,095		(101,860	)		(71,399	)		(173,259	)
MARKIT ABX	GST		0.11		5/25/2046	USD		1,272		316,213			(53,283	)		262,930
MARKIT ABX	FBF		0.11		5/25/2046	USD		636		186,859			(55,395	)		131,464
Markit CMBX	BRC		1.47		12/13/2049	USD		400		119,574			(46,138	)		73,436
Markit CMBX	DUB		3.00		5/11/2063	USD		375		34,077			(37,253	)		(3,176	)
									$	234,378		$	(393,355	)	$	(158,977	)
Credit Default Swaps on Credit Indices - Sell Protection (2)
Index/Tranches	Counter- Party	Fixed Pay Rate (%)		Expiration Date		Curr	Notional Amount (4) (000s)		Premiums Paid (Received)			Unrealized Appreciation (Depreciation)			Fair Value (5)
Markit CDX IG	FOB		1.00		6/20/2019	USD		3,050	$	46,298		$	14,626		$	60,924
									$	46,298		$	14,626		$	60,924

⁽¹⁾ If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

⁽²⁾ If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

⁽³⁾ Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swaps agreements on corporate issues and sovereign issues of an emerging country as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

⁽⁴⁾ The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

⁽⁵⁾ The quoted market prices and resulting values for credit default swaps on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/ sold as of the period end. Increasing fair values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

Interest Rate Swaps

Pay/ Receive Floating Rate	Floating Rate Index	Counter- Party	Fixed Rate (%)		Expiration Date		Curr	Notional Amount (4) (000s)		Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Fair Value
Receive	3- Month NZD - BBR	DUB		4.5450		3/19/2016	NZD		3,017	$	—	$	10,219		$	10,219
Receive	3-Month NZD-BBR	DUB		4.5450		3/19/2016	NZD		3,017		—		10,219			10,219
Receive	3-Month AUD-BBSW	UAG		3.0000		6/17/2016	AUD		3,894		—		7,505			7,505
Receive	3-Month NZD-BBR	DUB		4.5375		6/22/2016	NZD		2,217		—		5,430			5,430
Receive	3-Month NZD-BBR	DUB		4.4250		6/22/2016	NZD		5,169		—		8,016			8,016
Receive	3-Month NZD-BBR	DUB		4.2400		9/1/2016	NZD		3,748		—		(1,491	)		(1,491	)
Receive	3-Month ZAR-JIBAR	DUB		7.5200		11/12/2016	ZAR		4,196		—		5,624			5,624
Receive	3-Month SEK-LIBOR	FBF		1.9100		1/24/2017	SEK		2,390		—		8,744			8,744
Receive	3-Month SEK-LIBOR	FBF		1.9100		1/26/2017	SEK		2,380		—		8,708			8,708
Pay	6-Month EUR-LIBOR	UAG		1.0000		3/21/2017	EUR		475		—		(6,581	)		(6,581	)

See accompanying notes

26

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Pay/ Receive Floating Rate	Floating Rate Index	Counter- Party	Fixed Rate (%)		Expiration Date		Curr	Notional Amount (4) (000s)		Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Fair Value
Pay	6-Month EUR-LIBOR	BNP		1.0000		3/21/2017	EUR		2,351	$	—	$	(32,606	)	$	(32,606	)
Pay	6-Month EUR-LIBOR	DUB		1.0000		3/25/2017	EUR		764		—		(10,902	)		(10,902	)
Receive	3-Month NZD-BBR	DUB		4.7000		4/13/2017	NZD		2,060		—		14,249			14,249
Receive	3-Month SEK-LIBOR	BRC		2.9300		9/16/2017	SEK		15,949		—		96,119			96,119
Pay	3-Month KRW-CD	BRC		1.0000		10/17/2017	KRW		1,095,269		—		(13,075	)		(13,075	)
Pay	3-Month KRW-CD	UAG		1.0000		10/19/2017	KRW		1,042,394		—		(11,496	)		(11,496	)
Receive	1-Month MXN-TIIE	BRC		5.8300		11/1/2017	MXN		7,632		—		9,260			9,260
Receive	1-Month MXN-TIIE	HUB		5.9400		11/1/2017	MXN		5,441		—		7,434			7,434
Receive	3-Month ZAR-JIBAR	DUB		7.7623		11/2/2017	ZAR		10,944		—		9,030			9,030
Receive	1-Month MXN-TIIE	BRC		5.9000		11/6/2017	MXN		7,661		—		9,917			9,917
Receive	3-Month ZAR-JIBAR	HUB		8.0550		11/9/2017	ZAR		4,685		—		5,987			5,987
Pay	6-Month AUD-BBSW	DUB		1.0000		12/16/2017	AUD		786		—		(16,732	)		(16,732	)
Pay	6-Month AUD-BBSW	CBK		1.0000		12/16/2017	AUD		796		—		(17,167	)		(17,167	)
Receive	3-Month NZD-BBR	DUB		4.8100		12/17/2017	NZD		778		—		9,499			9,499
Receive	3-Month NZD-BBR	CBK		4.8050		12/17/2017	NZD		900		—		10,886			10,886
Receive	3-Month ZAR-JIBAR	BRC		8.1867		1/22/2018	ZAR		7,300		—		9,712			9,712
Receive	3-Month ZAR-JIBAR	BRC		8.5950		1/29/2018	ZAR		5,241		—		10,296			10,296
Receive	3-Month ZAR-JIBAR	JPM		8.5650		2/19/2018	ZAR		10,079		—		18,885			18,885
Receive	3-Month ZAR-JIBAR	JPM		8.7200		2/20/2018	ZAR		10,338		—		21,794			21,794
Pay	3-Month NZD-BBR	DUB		1.0000		3/19/2018	NZD		1,067		—		(10,455	)		(10,455	)
Pay	3-Month NZD-BBR	DUB		1.0000		3/19/2018	NZD		1,067		—		(78,554	)		(78,554	)
Pay	6-Month EUR-LIBOR	UAG		1.0000		3/21/2018	EUR		712		—		(12,951	)		(12,951	)
Pay	3-Month NZD-BBR	DUB		1.0000		3/24/2018	NZD		1,193		—		(8,743	)		(8,743	)
Pay	3-Month NZD-BBR	DUB		1.0000		3/29/2018	NZD		1,206		—		9,594			9,594
Pay	3-Month NZD-BBR	BNP		1.0000		3/29/2018	NZD		1,206		—		9,505			9,505
Pay	3-Month NZD-BBR	DUB		1.0000		6/9/2018	NZD		1,160		—		(2,808	)		(2,808	)
Pay	3-Month NZD-BBR	BNP		1.0000		6/13/2018	NZD		1,195		—		3,571			3,571
Receive	3-Month CAD-LIBOR	GLM		2.2050		6/13/2018	CAD		1,976		—		7,404			7,404
Receive	3-Month CAD-LIBOR	FBF		2.1913		6/13/2018	CAD		1,991		—		6,976			6,976
Receive	3-Month CAD-LIBOR	DUB		2.2075		6/13/2018	CAD		1,837		—		6,963			6,963
Pay	3-Month SEK-LIBOR	BRC		1.0000		6/16/2018	SEK		40,658		—		(61,993	)		(61,993	)
Pay	3-Month AUD-BBSW	UAG		1.0000		6/17/2018	AUD		3,965		—		9,706			9,706
Pay	3-Month NZD-BBR	DUB		1.0000		6/22/2018	NZD		890		—		(6,626	)		(6,626	)
Pay	3-Month NZD-BBR	DUB		1.0000		6/22/2018	NZD		2,070		—		(10,757	)		(10,757	)
Receive	USA-CPI-U	BRC		2.3200		8/7/2018	USD		677		—		1,371			1,371
Receive	USA-CPI-U	BRC		2.3200		8/7/2018	USD		677		—		1,371			1,371
Receive	USA-CPI-U	JPM		2.3150		8/21/2018	USD		666		—		5,653			5,653
Pay	3-Month NZD-BBR	DUB		1.0000		9/1/2018	NZD		1,501		—		376			376
Receive	USA-CPI-U	BRC		2.7150		3/21/2019	USD		287		—		7,406			7,406
Pay	6-Month EUR-LIBOR	GST		1.0000		5/26/2019	EUR		762		—		(12,684	)		(12,684	)
Pay	6-Month EUR-LIBOR	GST		1.0000		5/26/2019	EUR		381		—		(6,346	)		(6,346	)
Pay	3-Month SEK-LIBOR	BRC		1.0000		9/16/2020	SEK		6,727		—		(93,678	)		(93,678	)
Receive	6-Month AUD-BBSW	DUB		5.2900		12/16/2020	AUD		917		—		32,483			32,483
Receive	6-Month AUD-BBSW	CBK		5.2825		12/16/2020	AUD		919		—		32,389			32,389
Pay	3-Month NZD-BBR	CBK		1.0000		12/17/2020	NZD		1,047		—		(25,026	)		(25,026	)
Pay	3-Month NZD-BBR	DUB		1.0000		12/17/2020	NZD		924		—		(22,086	)		(22,086	)
Receive	3-Month ZAR-JIBAR	BRC		7.3650		3/31/2021	ZAR		474		—		(1,193	)		(1,193	)
Pay	USA-CPI-U	BRC		1.0000		8/7/2021	USD		741		—		(2,831	)		(2,831	)
Pay	USA-CPI-U	BRC		1.0000		8/7/2021	USD		741		—		(2,559	)		(2,559	)
Pay	USA-CPI-U	JPM		1.0000		8/21/2021	USD		722		—		(17,949	)		(17,949	)
Receive	3-Month ZAR-JIBAR	BRC		9.3100		2/4/2022	ZAR		638		—		2,314			2,314
Receive	3-Month ZAR-JIBAR	BRC		9.2550		2/4/2022	ZAR		638		—		2,200			2,200
Receive	1-Month MXN-TIIE	DUB		7.5850		2/17/2022	MXN		3,759		—		11,220			11,220
Receive	1-Month MXN-TIIE	DUB		7.5500		2/18/2022	MXN		765		—		2,195			2,195
Receive	1-Month MXN-TIIE	DUB		7.5675		2/21/2022	MXN		1,581		—		4,615			4,615
Receive	1-Month MXN-TIIE	MYC		7.4650		2/24/2022	MXN		1,379		—		3,556			3,556
Pay	6-Month EUR-LIBOR	DUB		1.0000		2/11/2023	EUR		232		—		(21,476	)		(21,476	)
Receive	1-Month MXN-TIIE	BRC		6.9000		5/18/2023	MXN		2,953		—		(1,330	)		(1,330	)
Receive	1-Month MXN-TIIE	GLM		7.0700		5/19/2023	MXN		3,488		—		170			170
Receive	1-Month MXN-TIIE	BRC		7.0400		5/19/2023	MXN		3,188		—		(127	)		(127	)
Receive	3-Month ZAR-JIBAR	BRC		8.5600		5/29/2023	ZAR		2,847		—		(101	)		(101	)
Receive	3-Month ZAR-JIBAR	BRC		8.5900		5/30/2023	ZAR		3,324		—		167			167
Receive	3-Month ZAR-JIBAR	BRC		9.1100		6/7/2023	ZAR		3,422		—		5,300			5,300

See accompanying notes

27

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Pay/ Receive Floating Rate	Floating Rate Index	Counter- Party	Fixed Rate (%)		Expiration Date		Curr	Notional Amount(4) (000s)		Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Fair Value
Receive	1-Month MXN-TIIE	JPM		6.1050		8/14/2023	MXN		1,461	$	—	$	1,994		$	1,994
Receive	1-Month MXN-TIIE	BRC		6.1300		8/15/2023	MXN		1,518		—		2,253			2,253
Pay	6-Month NOK-NIBOR	BRC		1.0000		9/19/2023	NOK		3,190		—		(27,853	)		(27,853	)
Pay	6-Month NOK-NIBOR	GLM		1.0000		9/20/2023	NOK		2,744		—		(23,568	)		(23,568	)
Receive	3-Month SEK-LIBOR	JPM		3.1100		9/20/2023	SEK		3,310		—		20,740			20,740
Receive	3-Month CAD-LIBOR	DUB		3.8250		10/23/2023	CAD		921		—		34,344			34,344
Pay	3-Month NZD-BBR	DUB		1.0000		10/25/2023	NZD		1,195		2,067		27,068			29,135
Pay	6-Month NOK-NIBOR	BRC		1.0000		11/11/2023	NOK		2,743		—		(22,108	)		(22,108	)
Pay	6-Month NOK-NIBOR	BRC		1.0000		11/13/2023	NOK		8,427		—		(76,142	)		(76,142	)
Pay	6-Month NOK-NIBOR	BRC		1.0000		11/19/2023	NOK		5,822		—		(43,873	)		(43,873	)
Receive	3-Month ZAR-JIBAR	BRC		9.4000		11/19/2023	ZAR		9,805		—		19,685			19,685
Receive	3-Month SEK-LIBOR	FBF		3.1015		11/19/2023	SEK		2,835		—		16,945			16,945
Receive	3-Month SEK-LIBOR	BNP		3.1150		11/19/2023	SEK		2,873		—		17,428			17,428
Receive	3-Month ZAR-JIBAR	BRC		9.4300		11/20/2023	ZAR		3,421		—		7,146			7,146
Receive	1-Month MXN-TIIE	DUB		8.7470		11/22/2023	MXN		5,103		—		23,162			23,162
Receive	1-Month MXN-TIIE	DUB		8.7531		11/23/2023	MXN		7,355		—		33,499			33,499
Receive	1-Month MXN-TIIE	DUB		8.4600		11/28/2023	MXN		4,707		—		17,437			17,437
Receive	1-Month MXN-TIIE	DUB		8.5980		11/29/2023	MXN		596		—		2,442			2,442
Receive	1-Month MXN-TIIE	DUB		8.6000		12/1/2023	MXN		421		—		1,725			1,725
Receive	3-Month CAD-LIBOR	GLM		4.0695		1/10/2024	CAD		477		—		21,461			21,461
Receive	3-Month CAD-LIBOR	GST		3.8450		4/2/2024	CAD		768		—		26,057			26,057
Receive	3-Month CAD-LIBOR	DEU		3.8300		4/3/2024	CAD		430		—		14,307			14,307
Receive	3-Month CAD-LIBOR	DEU		3.8300		4/3/2024	CAD		430		—		14,307			14,307
Pay	3-Month NZD-BBR	BNP		1.0000		4/4/2024	NZD		971		—		(23,716	)		(23,716	)
Pay	3-Month NZD-BBR	DEU		1.0000		4/8/2024	NZD		623		—		(14,707	)		(14,707	)
Pay	3-Month NZD-BBR	DEU		1.0000		4/8/2024	NZD		623		—		(14,707	)		(14,707	)
Receive	3-Month CAD-LIBOR	DEU		3.7050		4/29/2024	CAD		936		—		(24,896	)		(24,896	)
Receive	3-Month CAD-LIBOR	GST		3.7100		4/29/2024	CAD		459		—		12,118			12,118
Receive	3-Month CAD-LIBOR	HUB		3.6775		4/30/2024	CAD		391		—		10,430			10,430
Pay	3-Month NZD-BBR	DUB		1.0000		5/1/2024	NZD		1,155		—		21,485			21,485
Pay	3-Month NZD-BBR	GST		1.0000		5/1/2024	NZD		580		—		11,007			11,007
Pay	3-Month NZD-BBR	BNP		1.0000		5/2/2024	NZD		575		—		(10,872	)		(10,872	)
Receive	3-Month CAD-LIBOR	GST		3.4840		5/16/2024	CAD		448		—		7,716			7,716
Pay	3-Month NZD-BBR	JPM		1.0000		5/20/2024	NZD		572		—		(5,851	)		(5,851	)
Pay	6-Month NOK-NIBOR	BRC		1.0000		6/10/2024	NOK		4,802		—		(18,744	)		(18,744	)
Pay	6-Month NOK-NIBOR	JPM		1.0000		6/10/2024	NOK		5,008		—		(50,445	)		(50,445	)
Receive	3-Month SEK-LIBOR	GLM		3.0225		6/10/2024	SEK		5,376		—		25,576			25,576
Receive	3-Month SEK-LIBOR	FBF		3.0362		6/10/2024	SEK		5,276		—		25,569			25,569
Pay	3-Month NZD-BBR	DUB		1.0000		4/13/2025	NZD		562		—		(22,612	)		(22,612	)
Receive	3-Month USD-LIBOR	GLM		4.5700		11/5/2025	USD		777		—		27,312			27,312
Pay	3-Month ZAR-JIBAR	JPM		1.0000		2/19/2026	ZAR		3,138		—		(15,826	)		(15,826	)
Pay	3-Month ZAR-JIBAR	JPM		1.0000		2/20/2026	ZAR		3,175		—		(18,456	)		(18,456	)
Receive	1-Month MXN-TIIE	DUB		9.8100		9/20/2028	MXN		1,095		—		4,785			4,785
Receive	3-Month ZAR-JIBAR	BRC		10.6500		11/25/2028	ZAR		9,624		—		20,255			20,255
Receive	3-Month ZAR-JIBAR	BRC		10.8500		1/23/2029	ZAR		7,799		—		18,563			18,563
Receive	3-Month ZAR-JIBAR	DUB		10.9100		1/24/2029	ZAR		2,652		—		(39,472	)		(39,472	)
Receive	3-Month ZAR-JIBAR	HUB		9.9000		3/11/2029	ZAR		8,386		—		5,464			5,464
Receive	3-Month NZD-BBR	FBF		2.6060		11/1/2032	JPY		160,835		—		13,786			13,786
Pay	3-Month ZAR-JIBAR	BRC		1.0000		11/14/2033	ZAR		2,663		—		(7,373	)		(7,373	)
Pay	3-Month ZAR-JIBAR	DUB		1.0000		11/15/2033	ZAR		1,277		—		(3,535	)		(3,535	)
Receive	6-Month CHF-LIBOR	FBF		2.3600		5/27/2034	CHF		188		—		8,166			8,166
Receive	6-Month CHF-LIBOR	BRC		2.3300		6/2/2034	CHF		375		—		15,193			15,193
Receive	6-Month CHF-LIBOR	UAG		2.3275		6/3/2034	CHF		375		—		15,115			15,115
Receive	6-Month CHF-LIBOR	UAG		2.3400		6/3/2034	CHF		377		—		15,639			15,639
Receive	6-Month CHF-LIBOR	FBF		2.3525		7/3/2034	CHF		191		—		8,140			8,140
Pay	3-Month NZD-BBR	FBF		1.0000		11/1/2037	JPY		179,314		—		(934	)		(934	)

See accompanying notes

28

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Pay/ Receive Floating Rate	Floating Rate Index	Counter- Party	Fixed Rate (%)		Expiration Date		Curr	Notional Amount(4) (000s)		Premiums Paid (Received)		Unrealized Appreciation (Depreciation)			Fair Value
Pay	6-Month JPY-LIBOR	BRC		0.1786		7/4/2043	JPY		8,910	$	—	$	(1,002	)	$	(1,002	)
Pay	6-Month EUR-LIBOR	BRC		1.0000		1/22/2044	GBP		161		—		(32,793	)		(32,793	)
Receive	6-Month CHF-LIBOR	FBF		2.0400		8/7/2044	CHF		163		—		5,799			5,799
										$	2,067	$	28,348		$	30,415

Total Return Swap

Pay/ Receive Total Returns	Index	Number of Shares of Units			Rate Paid/ Received by the Fund (%)		Maturity Date		Counterparty	Payments Received (000s)			Unrealized Appreciation (Depreciation)
Receive	3-Month Euribor		250,000			1.0000		9/22/2014	JPM	$	336,688		$	(8,200	)
Pay	iBoxx EUR Liquid HY		(1,475	)		1.0000		9/22/2014	JPM		(336,688	)		8,200
										$	0		$	0

Purchased options outstanding on August 31, 2014:

Interest Rate Swaptions

Description	Counter- party	Floating Rate Index	Pay / Receive Floating Rate		Exercise Rate (%)		Expiration Date		Notional Amount (000s)		Fair Value		Premiums Paid		Unrealized Appreciation (Depreciation)
Put - OTC 30-Year IRS	BOA	3-Month USD-LIBOR		Receive		4.2100		4/25/2016		1,800	$	33,934	$	72,000	$	(38,066	)
Put - OTC 30-Year IRS	CBK	3-Month USD-LIBOR		Receive		5.2000		7/29/2016		1,200		6,422		51,868		(45,446	)
											$	40,356	$	123,868	$	(83,512	)

European Interest Rate Swaptions

Description	Counter- party	Floating Rate Index	Pay / Receive Floating Rate	Exercise Rate (%)		Expiration Date		Notional Amount (000s)		Fair Value		Premiums Paid		Unrealized Appreciation (Depreciation)
Call- IRS ZAR	GLM	3M ZAR-JIBAR	Receive		5.6000		9/12/2014		18,518	$	—	$	4,337	$	(4,337	)
Put- IRS USD	MSC	3M USD-LIBOR	Receive		1.7800		9/23/2014		2,826		7,367		9,183		(1,816	)
Call- IRS ZAR	GLM	3M ZAR-JIBAR	Receive		5.6000		9/25/2014		18,518		—		4,337		(4,337	)
Call- IRS USD	DEU	3M USD-LIBOR	Pay		3.3900		9/29/2014		1,386		3,291		3,222		69
Call- IRS EUR	DUB	6M EUR-EURIBOR	Pay		1.9200		9/30/2014		1,037		1		23,154		(23,153	)
Put- IRS KRW	DEU	3M KRW-KSDA	Pay		3.0500		10/13/2014		1,838,154		—		5,018		(5,018	)
Call- IRS EUR	DUB	6M EUR-EURIBOR	Pay		2.0500		10/24/2014		3,567		43		44,365		(44,322	)
Call- IRS EUR	BRC	6M EUR-EURIBOR	Pay		2.0500		10/24/2014		3,567		42		46,829		(46,787	)
Call- IRS EUR	JPM	6M EUR-EURIBOR	Pay		1.8400		10/28/2014		685		51		15,487		(15,436	)
Call- IRS JPY	FBF	6M JPY-LIBOR	Pay		0.8600		11/7/2014		65,936		305		5,964		(5,659	)
Put- IRS GBP	JPM	3M USD-LIBOR	Receive		2.1000		11/12/2014		1,363		19,509		8,475		11,034
Put- IRS USD	MSC	3M USD-LIBOR	Receive		1.7500		11/20/2014		2,733		7,941		8,199		(258	)
Call- IRS EUR	MSC	6M EUR-EURIBOR	Pay		0.8800		12/3/2014		1,712		587		10,464		(9,877	)
Call- IRS EUR	CBK	6M EUR-EURIBOR	Pay		0.8800		12/3/2014		1,838		630		11,234		(10,604	)
Call- IRS EUR	CBK	6M EUR-EURIBOR	Pay		0.8800		12/3/2014		1,864		639		6,202		(5,563	)
Call- IRS EUR	MSC	6M EUR-EURIBOR	Pay		0.8800		12/3/2014		1,737		595		5,743		(5,148	)
Put- IRS JPY	FBF	6M JPY-LIBOR	Pay		0.8200		12/10/2014		109,500		230		9,541		(9,311	)
Call- IRS EUR	GLM	6M EUR-EURIBOR	Pay		1.7000		12/10/2014		1,037		1,066		16,680		(15,614	)
Call- IRS EUR	BNP	6M EUR-EURIBOR	Pay		2.5800		12/10/2014		691		376		7,114		(6,738	)
Call- IRS USD	DEU	3M USD-LIBOR	Pay		2.2800		12/19/2014		4,167		9,788		23,598		(13,810	)
Call- IRS EUR	FBF	6M EUR-EURIBOR	Pay		2.5500		12/29/2014		707		650		7,031		(6,381	)
Call- IRS EUR	GLM	6M EUR-EURIBOR	Receive		2.5000		1/12/2015		348		475		3,261		(2,786	)
Call- IRS EUR	BRC	6M EUR-EURIBOR	Receive		2.5000		1/12/2015		695		951		5,761		(4,810	)
Call- IRS GBP	BRC	3M USD-LIBOR	Pay		3.5000		2/9/2015		692		3,859		6,027		(2,168	)
Put- IRS USD	GST	3M USD-LIBOR	Receive		2.3000		3/30/2015		882		14,894		11,003		3,891

See accompanying notes

29

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Description	Counter- party	Floating Rate Index	Pay / Receive Floating Rate	Exercise Rate (%)		Expiration Date		Notional Amount (000s)		Fair Value		Premiums Paid		Unrealized Appreciation (Depreciation)
Call- IRS EUR	DUB	6M EUR-EURIBOR	Pay		2.0800		4/1/2015		691	$	1,052	$	21,924	$	(20,872	)
Call- IRS EUR	JPM	6M EUR-EURIBOR	Pay		2.0800		4/2/2015		696		1,077		22,982		(21,905	)
Call- IRS USD	JPM	3M USD-LIBOR	Pay		1.4000		5/18/2015		6,752		25,029		29,034		(4,005	)
Call- IRS USD	JPM	3M USD-LIBOR	Pay		1.4500		6/3/2015		5,112		19,734		22,356		(2,622	)
Call- IRS GBP	DUB	3M USD-LIBOR	Pay		2.1000		6/15/2015		1,752		6,612		19,017		(12,405	)
Call- IRS GBP	DUB	6M GBP-LIBOR	Receive		1.4800		7/6/2015		2,187		8,649		21,644		(12,995	)
Put- IRS USD	JPM	3M USD-LIBOR	Receive		1.2500		8/14/2015		6,048		17,901		21,504		(3,603	)
Put- IRS USD	FBF	3M USD-LIBOR	Receive		1.2500		8/17/2015		3,075		9,154		10,453		(1,299	)
Call- IRS EUR	BRC	6M EUR-EURIBOR	Pay		2.2500		8/20/2015		684		7,332		9,990		(2,658	)
Call- IRS USD	MSC	3M USD-LIBOR	Pay		2.4500		12/21/2015		3,190		11,766		14,532		(2,766	)
Put- IRS USD	MSC	3M USD-LIBOR	Receive		1.6000		12/21/2015		10,634		52,588		50,157		2,431
Put- IRS USD	FBF	3M USD-LIBOR	Pay		4.2600		1/19/2016		423		5,468		28,210		(22,742	)
Put- IRS GBP	FBF	6M GBP-LIBOR	Pay		2.4300		2/18/2016		3,662		30,245		66,642		(36,397	)
Put- IRS GBP	FBF	6M GBP-LIBOR	Pay		2.3700		2/19/2016		3,662		32,633		65,480		(32,847	)
Call- IRS EUR	HUB	6M EUR-EURIBOR	Pay		2.3000		4/15/2016		1,917		19,339		88,114		(68,775	)
Call- IRS GBP	BRC	6M GBP-LIBOR	Receive		1.3500		4/18/2016		1,094		3,577		5,313		(1,736	)
Call- IRS GBP	GLM	6M GBP-LIBOR	Receive		1.5600		5/16/2016		950		4,863		12,982		(8,119	)
Put- IRS GBP	JPM	6M GBP-LIBOR	Receive		2.0000		5/31/2016		3,408		35,670		30,864		4,806
Put- IRS GBP	MSC	6M JPY-LIBOR	Receive		2.0000		6/2/2016		3,408		35,667		30,837		4,830
Call- IRS USD	MSC	3M USD-LIBOR	Pay		2.0000		6/20/2016		10,368		42,761		51,840		(9,079	)
Put- IRS GBP	DUB	3M USD-LIBOR	Receive		2.1100		6/20/2016		3,473		41,944		21,274		20,670
Call- IRS GBP	MSC	3M ZAR-JIBAR	Pay		3.5500		6/24/2016		707		15,525		31,774		(16,249	)
Put- IRS GBP	GLM	3M ZAR-JIBAR	Receive		2.5000		6/27/2016		3,532		68,351		46,184		22,167
Put- IRS GBP	JPM	3M ZAR-JIBAR	Receive		2.5000		7/11/2016		3,600		69,304		48,049		21,255
Put- IRS GBP	GLM	6M GBP-LIBOR	Pay		3.6300		11/21/2016		2,639		68,789		199,943		(131,154	)
Put- IRS GBP	DUB	6M GBP-LIBOR	Pay		4.2500		1/23/2017		1,503		20,990		65,717		(44,727	)
Put- IRS USD	DEU	3M USD-LIBOR	Pay		4.3000		3/27/2017		691		21,758		45,606		(23,848	)
Call- IRS USD	DEU	3M USD-LIBOR	Pay		4.3000		3/27/2017		346		10,879		21,767		(10,888	)
Call- IRS GBP	MSC	3M USD-LIBOR	Pay		3.6500		6/16/2017		701		23,193		41,198		(18,005	)
Call- IRS GBP	JPM	3M USD-LIBOR	Pay		3.6500		6/16/2017		1,051		34,773		62,303		(27,530	)
Call- IRS JPY	FBF	6M JPY-LIBOR	Receive		0.8000		4/10/2018		490,429		44,555		35,881		8,674
Call- IRS JPY	FBF	6M JPY-LIBOR	Receive		0.8000		4/11/2018		247,525		22,486		18,400		4,086
Call- IRS USD	JPM	3M USD-LIBOR	Pay		4.4500		5/1/2018		1,370		32,809		52,897		(20,088	)
Call- IRS USD	BNP	3M USD-LIBOR	Pay		4.4000		5/8/2018		675		16,886		25,542		(8,656	)
Call- IRS JPY	FBF	6M JPY-LIBOR	Receive		0.7500		5/29/2018		190,000		15,299		5,940		9,359
Put- IRS USD	DUB	3M USD-LIBOR	Pay		4.6000		2/12/2019		1,098		46,145		98,820		(52,675	)
Put- IRS JPY	BRC	6M JPY-LIBOR	Pay		1.7000		2/13/2019		122,211		7,676		33,390		(25,714	)
Put- IRS JPY	BRC	6M JPY-LIBOR	Receive		1.7000		2/13/2019		124,690		18,201		34,274		(16,073	)
Put- IRS USD	DEU	3M USD-LIBOR	Pay		4.6000		3/5/2019		1,440		61,354		118,080		(56,726	)
Call- IRS USD	JPM	3M USD-LIBOR	Pay		4.1000		5/9/2019		1,351		52,862		74,953		(22,091	)
Call- IRS USD	GLM	3M USD-LIBOR	Pay		4.1000		5/13/2019		1,013		39,724		56,728		(17,004	)
Call- IRS GBP	DUB	3M USD-LIBOR	Pay		3.6000		8/7/2019		519		29,986		36,941		(6,955	)
Call-INT USD*	GLM	3M USD-LIBOR	Receive		1.6300		8/15/2019		21,500		135,049		137,600		(2,551	)
Put- IRS EUR	DUB	6M EUR-EURIBOR	Pay		3.0000		12/16/2020		452		39,965		79,494		(39,529	)
Put- IRS USD	DUB	3M USD-LIBOR	Pay		5.5900		1/7/2021		742		20,425		38,558		(18,133	)
Put- IRS EUR	FBF	6M EUR-EURIBOR	Pay		3.1200		1/21/2021		752		61,621		121,259		(59,638	)
Put- IRS USD	FBF	3M USD-LIBOR	Pay		4.5000		6/6/2023		583		32,340		44,599		(12,259	)
Put- IRS USD	FBF	3M USD-LIBOR	Pay		4.5000		6/7/2023		399		22,135		30,524		(8,389	)
Put- IRS USD	FBF	3M USD-LIBOR	Pay		4.6000		7/3/2023		419		21,943		27,621		(5,678	)
Put- IRS USD	FBF	3M USD-LIBOR	Pay		4.5000		9/25/2023		701		39,042		59,613		(20,571	)
Put- IRS EUR	DUB	6M EUR-EURIBOR	Pay		3.0000		12/18/2023		452		49,150		76,436		(27,286	)
Put- IRS EUR	DUB	6M EUR-EURIBOR	Pay		3.0000		12/18/2023		452		49,151		75,492		(26,341	)
Call- IRS USD	GLM	3M USD-LIBOR	Pay		4.1900		5/7/2024		2,809		82,842		99,570		(16,728	)
Put- IRS GBP	DUB	6M GBP-LIBOR	Pay		3.8000		9/26/2028		2,103		171,456		208,614		(37,158	)
Put- IRS GBP	BRC	6M GBP-LIBOR	Pay		3.8200		9/26/2028		2,803		225,926		279,464		(53,538	)
Put- IRS GBP	DUB	6M GBP-LIBOR	Pay		3.8000		9/26/2028		701		57,165		66,902		(9,737	)
Put - IRS USD	DUB	6M EUR-EURIBOR	Pay		2.7500		5/30/2034		1,023		71,247		70,862		385
										$	2,287,353	$	3,518,373	$	(1,231,020	)

See accompanying notes

30

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Options on Exchange-Traded Futures Contracts

Description	Curr	Exercise Price		Expiration Date		Number of Contracts		Cost		Fair Value		Unrealized Appreciation (Depreciation)
Call 10-year - U.S. Treasury Future Option	USD	$	126.0000		9/26/2014		18	$	10,125	$	10,125	$	—
Call 10-year - U.S. Treasury Future Option	USD		128.0000		9/26/2014		34		3,188		3,188		—
Put - Euro Bund Future Option	EUR		148.5000		9/26/2014		48		30,457		20,182		(10,275	)
Put - Euro Bund Future Option	EUR		149.0000		11/21/2014		28		38,262		36,423		(1,839	)
Call - Eurodollar Future Option	USD		99.7500		12/15/2014		135		12,044		6,750		(5,294	)
Put - 3-Month Euribor Interest Rate Future Option	EUR		98.8750		6/15/2015		60		49,273		—		(49,273	)
Put - Eurodollar Future Option	USD		99.2500		9/14/2015		40		33,000		20,500		(12,500	)
Put - 3-Month Euribor Interest Rate Future Option	EUR		99.6250		3/14/2016		160		84,093		30,221		(53,872	)
								$	260,442	$	127,389	$	(133,053	)

OTC European Foreign Currency Options

Description	Counter- party	Exercise Price		Expiration Date		Notional Amount (000s)		Cost		Fair Value		Unrealized Appreciation (Depreciation)
Call - OTC USD versus JPY	BRC		101.7500		9/1/2014		1,020	$	12,209	$	23,071	$	10,862
Put - OTC USD versus JPY	BRC		101.7500		9/1/2014		1,020		13,107		—		(13,107	)
Call - OTC EUR versus NOK	UAG		8.6000		9/2/2014		1,718		2,313		—		(2,313	)
Put - OTC EUR versus NOK	BRC		8.2700		9/2/2014		1,718		39,745		34,095		(5,650	)
Put - OTC EUR versus NOK	UAG		8.0800		9/2/2014		1,718		21,667		413		(21,254	)
Put - OTC EUR versus USD***	DUB		1.3035		9/3/2014		20		3,635		5,410		1,775
Call - OTC EUR versus GBP	MSC		0.7970		9/4/2014		879		6,273		1,358		(4,915	)
Call - OTC GBP versus JPY	FBF		174.6000		9/4/2014		703		11,749		128		(11,621	)
Call - OTC NZD versus USD	BRC		0.8425		9/4/2014		864		5,011		540		(4,471	)
Put - OTC EUR versus GBP	MSC		0.7970		9/4/2014		879		6,273		7,260		987
Put - OTC GBP versus JPY	FBF		174.6000		9/4/2014		703		11,601		14,729		3,128
Put - OTC NZD versus USD	BRC		0.8425		9/4/2014		864		6,180		6,754		574
Put - OTC EUR versus CZK	JPM		27.4500		9/5/2014		767		16,853		126		(16,727	)
Put - OTC EUR versus CZK	UAG		27.4500		9/5/2014		767		16,932		126		(16,806	)
Call - OTC NZD versus USD	DUB		0.8900		9/12/2014		463		671		—		(671	)
Call - OTC NZD versus USD	UAG		0.8593		9/12/2014		1,051		13,262		85		(13,177	)
Call - OTC NZD versus USD	UAG		0.8900		9/12/2014		920		620		—		(620	)
Put - OTC NZD versus USD	DUB		0.8100		9/12/2014		346		1,673		77		(1,596	)
Put - OTC NZD versus USD	BRC		0.8500		9/12/2014		1,037		21,818		16,412		(5,406	)
Put - OTC NZD versus USD	UAG		0.8593		9/12/2014		1,051		12,628		25,987		13,359
Put - OTC NZD versus USD	UAG		0.8100		9/12/2014		692		3,932		154		(3,778	)
Put - OTC AUD versus CAD***	HUB		0.9801		9/23/2014		39		5,407		906		(4,501	)
Call - OTC EUR versus GBP	JPM		0.8550		9/25/2014		2,880		6,070		4		(6,066	)
Call - OTC EUR versus USD	DUB		1.4300		9/25/2014		1,440		12,777		—		(12,777	)
Call - OTC EUR versus USD	BRC		1.4700		9/25/2014		2,160		7,291		—		(7,291	)
Put - OTC EUR versus GBP	JPM		0.8050		9/25/2014		2,880		38,378		61,258		22,880
Put - OTC EUR versus GBP	BRC		0.8300		9/25/2014		2,880		56,940		175,832		118,892
Put - OTC NZD versus JPY**	GLM		86.0000		10/9/2014		48		6,038		12,037		5,999
Call - OTC GBP versus USD	BRC		1.6730		10/16/2014		672		9,362		3,599		(5,763	)
Call - OTC GBP versus USD	DUB		1.6720		10/16/2014		672		9,362		3,793		(5,569	)
Put - OTC GBP versus USD	BRC		1.6730		10/16/2014		672		10,103		15,117		5,014
Put - OTC GBP versus USD	DUB		1.6720		10/16/2014		672		9,924		14,638		4,714
Call - EUR versus USD / USD versus JPY***	GLM		0.0000		10/21/2014		40		6,638		20,283		13,645
Put - OTC EUR versus GBP**	HUB		0.8150		10/23/2014		60		7,761		1,444		(6,317	)
Call - OTC EUR versus USD	BRC		1.3875		10/27/2014		1,027		22,454		136		(22,318	)
Put - OTC EUR versus MXN	DUB		17.4000		10/27/2014		25		4,827		22,230		17,403
Put - OTC EUR versus USD**	BRC		1.3875		10/27/2014		1,027		27,172		75,728		48,556
Call - OTC AUD versus NZD***	DUB		1.1190		10/29/2014		38		3,726		16,911		13,185

See accompanying notes

31

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Description	Counter- party	Exercise Price		Expiration Date		Notional Amount (000s)		Cost		Fair Value		Unrealized Appreciation (Depreciation)
Call - USD versus JPY / AUD versus USD***	FBF		0.0100		10/30/2014		77	$	6,289	$	6,289	$	—
Put - OTC EUR versus GBP***	BRC		0.7902		10/30/2014		38		7,666		20,495		12,829
Put - OTC USD versus MXN***	DUB		12.9500		10/31/2014		25		2,413		8,317		5,904
Call - OTC ECAL USD**	BRC		115.5000		11/6/2014		8,000		313		—		(313	)
Call - OTC ECAL USD	BRC		116.0000		11/6/2014		8,000		313		—		(313	)
Put - OTC EUR versus PLN	UAG		4.1400		11/6/2014		38		9,483		7,589		(1,894	)
Call - OTC USD versus JPY**	DUB		109.7000		11/10/2014		41		3,929		40,431		36,502
Call - OTC EUR versus PLN****	JPM		4.2325		11/13/2014		32		5,204		158		(5,046	)
Call - OTC EUR versus PLN****	GLM		4.2344		11/13/2014		32		5,356		127		(5,229	)
Call - OTC NZD versus USD****	GLM		0.0100		11/20/2014		58		6,322		8,149		1,827
Call - OTC USD versus MXN***	UAG		13.2500		11/20/2014		582		4,710		705		(4,005	)
Call - OTC NZD versus USD versus CAD***	DUB		0.0100		11/21/2014		60		10,204		17,985		7,781
Put - OTC USD versus JPY	BRC		98.0000		11/24/2014		2,826		14,071		2,879		(11,192	)
Call - OTC NZD versus MXN	JPM		0.0100		11/26/2014		40		5,431		7,362		1,931
Call - OTC USD versus JPY	JPM		105.4000		11/26/2014		2,812		12,795		20,252		7,457
Call - OTC USD versus NZD versus USD	HUB		0.0100		11/26/2014		16		2,573		5,072		2,499
Put - OTC USD versus JPY***	DUB		97.9000		11/26/2014		2,109		12,633		2,179		(10,454	)
Put - OTC USD versus MXN***	JPM		12.8500		11/26/2014		1,055		8,937		4,255		(4,682	)
Put - OTC EUR versus GBP****	HUB		0.7790		11/28/2014		39		6,361		12,070		5,709
Put - OTC BRL versus JPY***	GLM		1.0000		12/2/2014		20		2,080		415		(1,665	)
Call - OTC USD versus JPY****	BNP		105.4000		12/11/2014		31		4,619		865		(3,754	)
Put - OTC EUR versus GBP****	UAG		0.7900		12/11/2014		39		8,049		2,078		(5,971	)
Put - OTC EUR versus CZK	UAG		27.4500		12/12/2014		767		19,450		3,251		(16,199	)
Put - OTC EUR versus GBP****	MSC		0.7890		12/12/2014		40		8,510		2,466		(6,044	)
Put - OTC EUR versus CZK	UAG		27.4500		12/15/2014		686		16,465		2,988		(13,477	)
Call - OTC EUR versus NOK***	DUB		8.4853		12/19/2014		2,894		74,847		13,607		(61,240	)
Put - OTC AUD versus USD	HUB		0.9235		12/19/2014		79		8,672		28,641		19,969
Put - OTC EUR versus NOK	DUB		7.9300		12/19/2014		2,894		3,919		12,923		9,004
Put - OTC EUR versus TRY***	UAG		2.7550		12/19/2014		39		6,645		7,129		484
Put - OTC EUR versus NOK	GLM		8.1800		12/23/2014		2,894		41,614		51,425		9,811
Put - OTC EUR versus NOK**	GLM		8.3000		1/5/2015		83		16,759		21,320		4,561
Put - OTC USD versus MXN**	BRC		12.5010		1/9/2015		62		9,133		4,679		(4,454	)
Put - OTC EUR versus GBP**	UAG		0.7870		1/12/2015		39		7,507		430		(7,077	)
Put - OTC EUR versus NOK	DUB		8.3180		1/12/2015		93		16,798		21,838		5,040
Call - USD versus MXN / USD versus KRW***	UAG		0.0100		1/14/2015		43		6,248		337		(5,911	)
Put - OTC USD versus MXN	BRC		12.4750		1/19/2015		60		8,925		96		(8,829	)
Put - OTC USD versus MXN**	FBF		12.9010		2/5/2015		25		3,434		7,402		3,968
Put - OTC EUR versus GBP***	HUB		0.7890		2/9/2015		40		7,977		310		(7,667	)
Call - OTC NOK versus SEK	UAG		1.0700		3/20/2015		7,238		20,442		56,343		35,901
Call - OTC NOK versus SEK	UAG		1.0800		3/23/2015		7,279		16,577		48,128		31,551
Put - OTC EUR versus SEK**	DUB		9.2385		4/1/2015		47		9,115		4,541		(4,574	)
Call - OTC NZD versus CAD	GLM		0.9210		4/9/2015		1,488		45,818		12,553		(33,265	)
Call - OTC NZD versus CAD	GLM		0.9210		4/9/2015		1,488		41,096		48,934		7,838
Call - OTC EUR versus USD	BRC		1.4945		4/22/2015		3,228		22,044		1,289		(20,755	)
Call - OTC EUR versus TRY***	UAG		2.7600		5/25/2015		39		5,476		8,130		2,654
Put - OTC AUD versus USD	BRC		0.9000		6/29/2015		1,435		31,433		30,355		(1,078	)
Put - OTC AUD versus USD	GLM		0.9000		6/29/2015		1,435		30,920		30,355		(565	)
Put - OTC EUR versus USD	DUB		1.4250		3/19/2019		900		98,945		96,443		(2,502	)
Put - OTC EUR versus USD	GLM		1.4250		4/17/2019		714		71,887		76,452		4,565
								$	1,262,789	$	1,320,678	$	57,889

See accompanying notes

32

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Written options outstanding on August 31, 2014:

Interest Rate Swaptions

Description	Counter- party	Floating Rate Index	Pay / Receive Floating Rate	Exercise Rate (%)		Expiration Date		Notional Amount (000s)			Fair Value			Premiums			Unrealized Appreciation (Depreciation)
Put - OTC 10-Year IRS	GLM	3M USD-LIBOR	Pay		2.920		11/20/2014		(4,500	)	$	(10,557	)	$	(20,250	)	$	9,693
Call - OTC 10-Year IRS	GLM	3M USD-LIBOR	Receive		2.420		11/20/2014		(4,500	)		(23,823	)		(17,325	)		(6,498	)
Put - OTC 5-Year IRS	BOA	3M USD-LIBOR	Pay		4.000		4/25/2016		(7,200	)		(29,729	)		(72,402	)		42,673
Put - OTC 5-Year IRS	CBK	3M USD-LIBOR	Pay		5.200		7/29/2016		4,600,000			(7,130	)		(57,480	)		50,350
											$	(71,239	)	$	(167,457	)	$	96,218

European Style Interest Rate Swaptions

Description	Counter- party	Floating Rate Index	Pay / Receive Floating Rate	Exercise Rate (%)		Expiration Date		Notional Amount (000s)			Fair Value			Premiums			Unrealized Appreciation (Depreciation)
Call- IRS MXN	BRC	1M MXN-TIIE	Receive		6.100		9/12/2014		(1,912	)	$	(1,117	)	$	(1,850	)	$	733
Call- IRS ZAR	GLM	3M ZAR-JIBAR	Receive		5.100		9/12/2014		(37,036	)		—			(3,731	)		3,731
Put- IRS EUR	FBF	6M EUR-EURIBOR	Receive		0.700		9/17/2014		(5,000	)		(2,147	)		(1,980	)		(167	)
Put- IRS USD	MSC	3M USD-LIBOR	Receive		3.300		9/23/2014		(707	)		(33,126	)		(9,185	)		(23,941	)
Call- IRS ZAR	GLM	3M ZAR-JIBAR	Receive		5.100		9/25/2014		(37,036	)		—			(3,731	)		3,731
Call- IRS EUR	DUB	6M EUR-EURIBOR	Pay		0.600		9/30/2014		(9,331	)		(17	)		(23,149	)		23,132
Call- IRS EUR	DUB	6M EUR-EURIBOR	Pay		2.350		10/24/2014		(3,567	)		(5	)		(14,788	)		14,783
Call- IRS EUR	BRC	6M EUR-EURIBOR	Pay		2.350		10/24/2014		(3,567	)		(6	)		(17,130	)		17,124
Call- IRS EUR	JPM	6M EUR-EURIBOR	Pay		0.600		10/28/2014		(6,164	)		(140	)		(15,483	)		15,343
Put- IRS GBP	JPM	6M GBP-LIBOR	Receive		2.970		11/12/2014		(341	)		(27,099	)		(8,481	)		(18,618	)
Put- IRS GBP	GLM	6M GBP-LIBOR	Pay		3.030		11/19/2014		(2,639	)		(3,690	)		(116,013	)		112,323
Put- IRS USD	MSC	3M USD-LIBOR	Receive		3.070		11/20/2014		(684	)		(14,992	)		(8,202	)		(6,790	)
Call- IRS EUR	BNP	6M EUR-EURIBOR	Pay		3.080		12/10/2014		(691	)		(53	)		(1,217	)		1,164
Call- IRS USD	DEU	3M USD-LIBOR	Pay		2.060		12/19/2014		(2,084	)		(10,382	)		(20,002	)		9,620
Call- IRS GBP	MSC	6M GBP-LIBOR	Pay		3.200		12/24/2014		(707	)		(1,036	)		(9,832	)		8,796
Call- IRS EUR	FBF	6M EUR-EURIBOR	Pay		3.050		12/29/2014		(707	)		(121	)		(1,686	)		1,565
Call- IRS EUR	GLM	6M EUR-EURIBOR	Receive		3.000		1/12/2015		(348	)		(102	)		(851	)		749
Call- IRS EUR	BRC	6M EUR-EURIBOR	Receive		3.000		1/12/2015		(695	)		(204	)		(1,298	)		1,094
Put- IRS GBP	BRC	6M GBP-LIBOR	Pay		3.500		1/23/2015		(751	)		(583	)		(20,864	)		20,281
Put- IRS GBP	DUB	6M GBP-LIBOR	Pay		3.500		1/30/2015		(751	)		(680	)		(15,433	)		14,753
Put- IRS GBP	FBF	6M GBP-LIBOR	Pay		2.370		2/19/2015		(3,662	)		(32,633	)		(46,815	)		14,182
Put- IRS EUR	DUB	6M EUR-EURIBOR	Receive		2.300		3/30/2015		(1,667	)		(1,033	)		(10,145	)		9,112
Call- IRS EUR	DUB	6M EUR-EURIBOR	Pay		0.750		4/1/2015		(4,666	)		(770	)		(21,929	)		21,159
Call- IRS EUR	JPM	6M EUR-EURIBOR	Pay		0.750		4/2/2015		(4,696	)		(786	)		(22,988	)		22,202
Call- IRS USD	JPM	3M USD-LIBOR	Pay		3.200		5/11/2015		(1,351	)		(11,389	)		(30,791	)		19,402
Call- IRS USD	GLM	3M USD-LIBOR	Pay		3.200		5/12/2015		(1,013	)		(8,600	)		(23,603	)		15,003
Call- IRS USD	JPM	3M USD-LIBOR	Pay		1.900		5/18/2015		(13,504	)		(20,075	)		(26,703	)		6,628
Call- IRS USD	JPM	3M USD-LIBOR	Pay		1.950		6/3/2015		(10,224	)		(16,501	)		(20,857	)		4,356
Put- IRS USD	FBF	3M USD-LIBOR	Pay		4.500		6/8/2015		(583	)		(2,175	)		(18,364	)		16,189
Put- IRS USD	FBF	3M USD-LIBOR	Pay		4.500		6/8/2015		(399	)		(1,489	)		(12,768	)		11,279
Call- IRS GBP	DUB	6M GBP-LIBOR	Pay		2.580		6/15/2015		(3,504	)		(4,690	)		(19,018	)		14,328
Call- IRS GBP	JPM	6M GBP-LIBOR	Pay		3.250		6/16/2015		(701	)		(6,798	)		(21,611	)		14,813
Call- IRS GBP	JPM	6M GBP-LIBOR	Pay		3.250		6/16/2015		(1,051	)		(10,191	)		(33,561	)		23,370
Put- IRS USD	FBF	3M USD-LIBOR	Pay		4.600		7/1/2015		(419	)		(1,400	)		(11,927	)		10,527

See accompanying notes

33

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Description	Counter- party	Floating Rate Index	Pay / Receive Floating Rate	Exercise Rate (%)		Expiration Date		Notional Amount (000s)			Fair Value			Premiums			Unrealized Appreciation (Depreciation)
Call-IRS GBP	DUB	6M GBP-LIBOR	Pay		3.100		8/7/2015		(519	)	$	(9,137	)	$	(14,410	)	$	5,273
Put-IRS USD	JPM	3M USD-LIBOR	Receive		2.630		8/14/2015		(1,344	)		(25,075	)		(21,504	)		(3,571	)
Put-IRS USD	FBF	3M USD-LIBOR	Receive		2.590		8/17/2015		(683	)		(11,718	)		(10,450	)		(1,268	)
Call-IRS EUR	BRC	6M EUR-EURIBOR	Pay		2.750		8/20/2015		(684	)		(3,163	)		(4,291	)		1,128
Put- IRS USD	FBF	3M USD-LIBOR	Pay		5.050		8/24/2015		(2,020	)		(455	)		(16,659	)		16,204
Call- IRS GBP	DUB	6M GBP-LIBOR	Pay		3.200		8/28/2015		(1,503	)		(23,697	)		(23,705	)		8
Put- IRS USD	FBF	3M USD-LIBOR	Pay		4.500		9/25/2015		(701	)		(4,534	)		(31,943	)		27,409
Put- IRS USD	MSC	3M USD-LIBOR	Receive		1.100		12/21/2015		(10,634	)		(16,687	)		(15,242	)		(1,445	)
Put- IRS USD	DUB	3M USD-LIBOR	Pay		5.270		1/7/2016		(742	)		(1,397	)		(16,313	)		14,916
Put- IRS USD	FBF	3M USD-LIBOR	Pay		2.750		1/19/2016		(3,806	)		(10,958	)		(28,199	)		17,241
Put- IRS GBP	FBF	6M GBP-LIBOR	Pay		2.430		2/18/2016		(3,662	)		(10,698	)		(47,995	)		37,297
Call- IRS GBP	DUB	6M GBP-LIBOR	Pay		2.400		4/15/2016		(4,355	)		(44,203	)		(73,035	)		28,832
Call- IRS GBP	BRC	6M GBP-LIBOR	Receive		1.000		4/18/2016		(1,094	)		(1,569	)		(2,373	)		804
Put- IRS GBP	JPM	6M GBP-LIBOR	Receive		2.930		5/31/2016		(757	)		(52,662	)		(30,866	)		(21,796	)
Put- IRS GBP	MSC	6M GBP-LIBOR	Receive		2.930		6/2/2016		(757	)		(52,351	)		(30,834	)		(21,517	)
Call- IRS USD	MSC	3M USD-LIBOR	Pay		2.790		6/20/2016		(20,736	)		(41,615	)		(51,840	)		10,225
Put- IRS GBP	DUB	6M GBP-LIBOR	Receive		2.850		6/20/2016		(771	)		(48,587	)		(21,277	)		(27,310	)
Call- IRS USD	DEU	3M USD-LIBOR	Pay		4.390		3/27/2017		(2,696	)		(21,188	)		(45,616	)		24,428
Call- IRS USD	DEU	3M USD-LIBOR	Pay		4.420		3/27/2017		(1,348	)		(10,397	)		(21,775	)		11,378
Put- IRS GBP	GLM	6M GBP-LIBOR	Receive		2.500		6/26/2017		(3,532	)		(63,728	)		(42,735	)		(20,993	)
Put- IRS GBP	JPM	6M GBP-LIBOR	Receive		2.500		7/10/2017		(3,600	)		(64,839	)		(43,737	)		(21,102	)
Put- IRS GBP	DUB	6M GBP-LIBOR	Pay		4.000		9/26/2017		(2,803	)		(42,282	)		(103,173	)		60,891
Put- IRS GBP	DUB	6M GBP-LIBOR	Pay		4.000		9/26/2017		(701	)		(10,574	)		(26,125	)		15,551
Call- IRS JPY	FBF	6M JPY-LIBOR	Receive		0.400		4/10/2018		(980,858	)		(29,063	)		(23,066	)		(5,997	)
Call- IRS JPY	FBF	6M JPY-LIBOR	Receive		0.400		4/11/2018		(495,050	)		(14,672	)		(11,985	)		(2,687	)
Call- IRS USD	JPM	3M USD-LIBOR	Pay		4.310		5/1/2018		(5,890	)		(34,033	)		(52,903	)		18,870
Call- IRS USD	BNP	3M USD-LIBOR	Pay		4.290		5/8/2018		(2,904	)		(17,140	)		(25,551	)		8,411
Call- IRS JPY	FBF	6M JPY-LIBOR	Receive		0.350		5/29/2018		(380,000	)		(8,787	)		(3,342	)		(5,445	)
Put- IRS USD	DUB	3M USD-LIBOR	Pay		5.050		2/12/2019		(4,152	)		(47,166	)		(98,857	)		51,691
Put- IRS JPY	BRC	6M JPY-LIBOR	Pay		5.000		2/13/2019		(244,422	)		(12,130	)		(33,300	)		21,170
Put- IRS JPY	BRC	6M JPY-LIBOR	Pay		5.000		2/13/2019		(249,379	)		(834	)		(34,029	)		33,195
Put- IRS USD	DEU	3M USD-LIBOR	Pay		5.140		3/5/2019		(5,515	)		(60,475	)		(118,065	)		57,590
Call- IRS USD	GLM	3M USD-LIBOR	Pay		4.020		5/7/2019		(1,013	)		(49,068	)		(74,287	)		25,219
Call- INT FLR USD*	GLM	3M USD-LIBOR	Receive		1.000		8/15/2019		(43,000	)		(131,856	)		(137,600	)		5,744
Put- IRS EUR	DUB	6M EUR-EURIBOR	Pay		3.760		12/16/2020		(1,905	)		(32,257	)		(79,522	)		47,265
Put- IRS EUR	FBF	6M EUR-EURIBOR	Pay		3.820		1/21/2021		(3,141	)		(52,809	)		(121,229	)		68,420
Put- IRS EUR	DUB	6M EUR-EURIBOR	Pay		4.180		12/18/2023		(1,957	)		(43,050	)		(76,467	)		33,417
Put- IRS EUR	DUB	6M EUR-EURIBOR	Pay		4.190		12/18/2023		(1,957	)		(42,883	)		(75,523	)		32,640
											$	(1,361,767	)	$	(2,305,809	)	$	944,042

European Foreign Currency Options

Description	Counter- party	Exercise Price		Expiration Date		Notional Amount (000s)			Cost			Fair Value			Unrealized Appreciation (Depreciation)
Call - OTC EUR versus NOK	BRC		8.600		9/2/2014		(1,718	)	$	(21,806	)	$	—		$	21,806
Put - OTC EUR versus NOK	BRC		8.080		9/2/2014		(1,718	)		(19,196	)		(413	)		18,783
Put - OTC EUR versus NOK	UAG		8.270		9/2/2014		(1,718	)		(53,355	)		(34,095	)		19,260
Call - OTC EUR versus GBP	FBF		0.800		9/4/2014		(879	)		(9,773	)		(1,358	)		8,415
Put - OTC EUR versus GBP	FBF		0.800		9/4/2014		(879	)		(9,655	)		(7,260	)		2,395
Put - OTC EUR versus CZK	UAG		27.050		9/5/2014		(1,763	)		(15,710	)		(21	)		15,689
Put - OTC EUR versus CZK	JPM		27.050		9/5/2014		(1,717	)		(16,853	)		(20	)		16,833
Call - OTC AUD versus USD	GLM		0.930		9/10/2014		(4,065	)		(32,393	)		(22,973	)		9,420
Call - OTC NZD versus USD	BRC		0.890		9/12/2014		(1,383	)		(12,361	)		—			12,361
Put - OTC NZD versus USD	BRC		0.810		9/12/2014		(1,037	)		(9,101	)		(231	)		8,870
Put - OTC NZD versus USD	DUB		0.850		9/12/2014		(346	)		(6,206	)		(5,468	)		738
Put - OTC NZD versus USD	UAG		0.850		9/12/2014		(692	)		(15,820	)		(10,944	)		4,876

See accompanying notes

34

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Description	Counter- party	Exercise Price		Expiration Date		Notional Amount (000s)			Cost			Fair Value			Unrealized Appreciation (Depreciation)
Call - OTC EUR versus GBP	BRC		0.860		9/25/2014		(2,880	)	$	(36,981	)	$	(4	)	$	36,977
Put - OTC EUR versus GBP	JPM		0.830		9/25/2014		(2,880	)		(101,916	)		(175,832	)		(73,916	)
Put - OTC EUR versus GBP	BRC		0.810		9/25/2014		(2,880	)		(20,197	)		(61,258	)		(41,061	)
Call - OTC EUR versus NOK	BRC		8.470		10/1/2014		(1,143	)		(16,328	)		(580	)		15,748
Call - OTC EUR versus GBP	BRC		0.800		10/16/2014		(840	)		(9,250	)		(4,897	)		4,353
Call - OTC EUR versus GBP	DUB		0.800		10/16/2014		(840	)		(9,991	)		(5,446	)		4,545
Put - OTC EUR versus GBP	BRC		0.800		10/16/2014		(840	)		(9,755	)		(15,466	)		(5,711	)
Put - OTC EUR versus GBP	DUB		0.800		10/16/2014		(840	)		(9,093	)		(14,345	)		(5,252	)
Put - OTC EUR versus GBP**	BRC		0.820		10/23/2014		(24	)		(16,535	)		(22,582	)		(6,047	)
Put - OTC EUR versus MXN**	DUB		17.400		10/27/2014		(25	)		(13,552	)		(22,230	)		(8,678	)
Call - OTC AUD versus NZD***	JPM		1.120		10/29/2014		(38	)		(9,404	)		(17,317	)		(7,913	)
Put - OTC EUR versus PLN**	DUB		4.140		11/6/2014		(38	)		(18,342	)		(7,589	)		10,753
Call - OTC USD versus BRL	BOA		2.440		11/21/2014		(1,875	)		(17,925	)		(10,802	)		7,123
Call - OTC USD versus INR	BOA		63.500		11/21/2014		(908	)		(6,048	)		(4,188	)		1,860
Put - OTC USD versus JPY	BRC		100.000		11/24/2014		(1,413	)		(13,438	)		(3,302	)		10,136
Call - OTC USD versus JPY	JPM		103.500		11/26/2014		(1,406	)		(12,689	)		(21,808	)		(9,119	)
Put - OTC USD versus AUD	DUB		0.950		11/26/2014		(1,055	)		(7,746	)		(3,048	)		4,698
Put - OTC USD versus JPY	DUB		99.900		11/26/2014		(1,055	)		(11,631	)		(2,464	)		9,167
Put - OTC EUR versus CZK	UAG		27.120		12/12/2014		(1,916	)		(18,396	)		(2,541	)		15,855
Call- OTC CZK versus EUR	UAG		27.000		12/15/2014		(1,577	)		(15,642	)		(2,181	)		13,461
Call - OTC EUR versus NOK	GLM		8.490		12/19/2014		(2,894	)		(30,569	)		(13,607	)		16,962
Put - OTC EUR versus NOK	GLM		7.930		12/19/2014		(2,894	)		(11,045	)		(12,923	)		(1,878	)
Put - OTC EUR versus NOK	DUB		8.180		12/19/2014		(2,894	)		(14,764	)		(51,425	)		(36,661	)
Call - OTC NOK versus SEK	UAG		1.120		3/20/2015		(7,238	)		(8,535	)		(23,466	)		(14,931	)
Put - OTC NOK versus SEK	UAG		1.010		3/20/2015		(7,238	)		(11,907	)		(745	)		11,162
Call - OTC NOK versus SEK	UAG		1.120		3/23/2015		(7,279	)		(7,484	)		(48,128	)		(40,644	)
Put - OTC NOK versus SEK	UAG		0.990		3/23/2015		(7,279	)		(9,093	)		(553	)		8,540
Call - OTC EUR versus USD	BRC		1.450		4/22/2015		(1,614	)		(22,045	)		(1,733	)		20,312
Call - OTC USD versus BRL	GLM		2.650		5/29/2015		(2,464	)		(75,152	)		(41,479	)		33,673
Put - OTC AUD versus NZD	UAG		1.050		6/29/2015		(1,435	)		(12,162	)		(4,224	)		7,938
Put - OTC AUD versus NZD	HUB		1.050		6/29/2015		(1,435	)		(12,298	)		(4,224	)		8,074
Put - OTC AUD versus USD	BRC		0.860		6/29/2015		(1,435	)		(17,176	)		(15,552	)		1,624
Put - OTC AUD versus USD	GLM		0.860		6/29/2015		(1,435	)		(16,730	)		(15,552	)		1,178
Call - OTC EUR versus USD	DUB		1.530		3/19/2019		(900	)		(65,799	)		(42,487	)		23,312
Put - OTC EUR versus USD	DUB		1.200		3/19/2019		(900	)		(33,147	)		(28,501	)		4,646
Put - OTC EUR versus USD	GLM		1.200		4/17/2019		(714	)		(24,053	)		(23,048	)		1,005
Call - OTC EUR versus USD	GLM		1.560		4/19/2019		(714	)		(47,835	)		(30,743	)		17,092
									$	(1,016,882	)	$	(839,053	)	$	177,829

Options on Exchange-Traded Futures Contracts

Description	Curr	Exercise Price		Expiration Date		Number Of Contracts		Cost			Fair Value			Unrealized Appreciation (Depreciation)
Put - 3-Mo Euribor Interest Rate Future Option	EUR		150.000		9/26/2014		34	$	(16,976	)	$	(24,124	)	$	(7,148	)
Put - 3-Mo Euribor Interest Rate Future Option	EUR		147.000		9/26/2014		34		(7,595	)		(4,021	)		3,574
Call - 3-Mo Euribor Interest Rate Future Option	EUR		147.500		9/26/2014		14		(2,391	)		(2,575	)		(184	)
Call - Euro Bund December Future Option	EUR		127.000		9/26/2014		52		(12,187	)		(12,187	)		—
Put - Euro Bund December Future Option	EUR		151.000		11/21/2014		28		(22,626	)		(24,650	)		(2,024	)
Call - Euro Bund October Future Option	EUR		147.000		11/21/2014		28		(16,188	)		(15,084	)		1,104
Put - Euro Bund October Future Option	EUR		99.000		12/15/2014		135		(14,583	)		(844	)		13,739
Put - Euro Bund October Future Option	EUR		99.630		3/16/2015		18		(5,716	)		(15,817	)		(10,101	)
Call - 10-year US Treasury Future Option	USD		99.630		6/15/2015		60		(38,433	)		—			38,433
Put - 1-month Eurodollar Future Option	USD		99.630		9/14/2015		52		(9,650	)		(5,200	)		4,450
Call - 1-month Eurodollar Future Option	USD		99.000		9/14/2015		40		(25,000	)		(12,000	)		13,000
Put - Eurodollar Future Option	USD		99.380		3/14/2016		160		(55,186	)		(18,395	)		36,791
								$	(226,531	)	$	(134,897	)	$	91,634

See accompanying notes

35

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Options on Equity Indices

Description	Counter- party	Exercise Rate		Maturity Date		Shares/Par Value (000’s)	Base Market Value			Base Total Cost			Prior Accumulated Base Unrealized Gain/Loss
CALL- OTC SPX	BOA	$	2,000.000		11/21/2014	BOA	$	(38,100	)	$	(17,376	)	$	(20,724	)
PUT- OTC SPX	BOA		1,890.000		11/21/2014	BOA		(16,513	)		(40,996	)		24,483
							$	(54,613	)	$	(58,372	)	$	3,759

* Floor Transaction - A transaction in which one party pays a single or periodic amount and the other party pays periodic amounts of the same currency based on the excess, if any, of a specific per annum rate (in the case of an interest rate floor) or a specific price (in the case of a commodity floor) over a specific floating rate (in the case of an interest rate floor) or commodity price (in the case of a commodity floor).

** Knockout FX Options - An option with a built in mechanism to expire worthless, should a specified price level be exceeded. A knock-out option sets a cap to the level an option can reach, in favor of the holder. As knock-out options limit the profit potential for the option buyer, they can be purchased for a smaller premium than an equivalent option without a knock-out stipulation.

*** Digital Option - An option whose payout is fixed after the underlying stock exceeds the predetermined threshold or strike price.

**** Knock-In Option - A latent option contract that begins to function as a normal option (“knocks in”) only once a certain price level is reached before expiration

Forward Currency Contracts Open at August 31, 2014

Type	Currency	Principal Amount Covered by Contract		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Buy	GBP		2,682,635		9/11/2014	BOA	$	—	$	(70,088	)	$	(70,088	)
Buy	BRL		1,849,836		9/3/2014	BOA		31,836		—			31,836
Buy	TRY		1,779,688		10/15/2014	BOA		5,688		—			5,688
Buy	BRL		917,434		9/3/2014	BOA		9,130		—			9,130
Buy	AUD		1,344,888		9/3/2014	BOA		9,347		—			9,347
Buy	BRL		2,594,378		9/3/2014	BOA		52,796		—			52,796
Sell	BRL		3,010,851		9/3/2014	BOA		—		(63,850	)		(63,850	)
Sell	EUR		2,111,518		9/3/2014	BOA		34,427		—			34,427
Sell	GBP		903,065		9/11/2014	BOA		4,022		—			4,022
Sell	BRL		1,908,063		9/3/2014	BOA		—		(26,063	)		(26,063	)
Sell	BRL		909,714		10/2/2014	BOA		—		(8,762	)		(8,762	)
Sell	BRL		2,572,548		10/2/2014	BOA		—		(51,269	)		(51,269	)
Sell	BRL		442,734		9/3/2014	BOA		—		(217	)		(217	)
Buy	NOK		867,666		10/3/2014	BRC		—		(3,273	)		(3,273	)
Buy	NOK		867,666		10/3/2014	BRC		—		(3,273	)		(3,273	)
Buy	EUR		180,096		11/14/2014	BRC		—		(784	)		(784	)
Buy	GBP		292,175		9/8/2014	BRC		—		(4,755	)		(4,755	)
Buy	CZK		935,571		11/14/2014	BRC		—		(12,500	)		(12,500	)
Buy	GBP		292,175		9/8/2014	BRC		—		(4,262	)		(4,262	)
Buy	EUR		448,270		11/14/2014	BRC		—		(7,016	)		(7,016	)
Buy	GBP		290,515		9/8/2014	BRC		—		(3,564	)		(3,564	)
Buy	EUR		228,748		11/21/2014	BRC		—		(3,777	)		(3,777	)
Buy	BRL		156,316		9/2/2014	BRC		792		—			792
Buy	BRL		180,126		9/2/2014	BRC		913		—			913
Buy	BRL		180,126		9/2/2014	BRC		913		—			913
Buy	BRL		156,316		9/2/2014	BRC		792		—			792
Buy	BRL		188,126		9/3/2014	BRC		93		—			93
Buy	EUR		3,080,047		9/4/2014	BRC		—		(49,057	)		(49,057	)
Buy	EUR		131,396		9/4/2014	BRC		—		(2,093	)		(2,093	)
Buy	EUR		225,422		10/29/2014	BRC		—		(12,167	)		(12,167	)
Buy	PLN		214,945		9/4/2014	BRC		—		(12,635	)		(12,635	)
Buy	EUR		231,126		9/4/2014	BRC		—		(8,467	)		(8,467	)
Buy	EUR		216,803		9/4/2014	BRC		—		(8,112	)		(8,112	)
Buy	EUR		443,570		10/15/2014	BRC		—		(16,828	)		(16,828	)
Buy	BRL		114,729		10/2/2014	BRC		883		—			883
Buy	BRL		183,528		9/2/2014	BRC		6,828		—			6,828
Buy	EUR		180,075		10/29/2014	BRC		—		(6,789	)		(6,789	)
Buy	EUR		266,076		9/4/2014	BRC		—		(8,459	)		(8,459	)
Buy	NZD		146,195		9/16/2014	BRC		—		(826	)		(826	)
Buy	BRL		153,633		9/2/2014	BRC		3,133		—			3,133
Buy	NZD		477,180		11/14/2014	BRC		—		(4,918	)		(4,918	)
Buy	JPY		337,794		9/3/2014	BRC		—		(2,206	)		(2,206	)
Buy	JPY		170,079		9/3/2014	BRC		80		—			80
Buy	NZD		144,636		9/8/2014	BRC		677		—			677

See accompanying notes

36

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Type	Currency	Principal Amount Covered by Contract		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Buy	NZD		292,808		9/16/2014	BRC		1,477	$	—		$	1,477
Buy	NZD		146,195		9/16/2014	BRC		808		—			808
Sell	GBP		2,695,916		9/11/2014	BRC		29,983		—			29,983
Sell	EUR		866,695		10/3/2014	BRC		4,245		—			4,245
Sell	EUR		866,695		10/3/2014	BRC		4,245		—			4,245
Sell	CZK		179,803		11/14/2014	BRC		1,078		—			1,078
Sell	JPY		291,551		9/8/2014	BRC		5,379		—			5,379
Sell	EUR		932,033		11/14/2014	BRC		16,039		—			16,039
Sell	JPY		289,080		9/8/2014	BRC		7,357		—			7,357
Sell	CAD		460,554		11/14/2014	BRC		—		(5,268	)		(5,268	)
Sell	JPY		287,968		9/8/2014	BRC		6,111		—			6,111
Sell	HUF		228,148		11/21/2014	BRC		4,377		—			4,377
Sell	BRL		183,528		9/2/2014	BRC		—		(930	)		(930	)
Sell	BRL		153,633		9/2/2014	BRC		—		(778	)		(778	)
Sell	BRL		153,633		9/2/2014	BRC		—		(778	)		(778	)
Sell	BRL		183,528		9/2/2014	BRC		—		(930	)		(930	)
Sell	BRL		3,507,206		10/2/2014	BRC		—		(4,972	)		(4,972	)
Sell	EUR		245,710		9/4/2014	BRC		8,750		—			8,750
Sell	NZD		1,221,398		11/14/2014	BRC		58,626		—			58,626
Sell	EUR		511,842		2/20/2019	BRC		11,313		—			11,313
Sell	EUR		458,571		9/4/2014	BRC		20,213		—			20,213
Sell	EUR		691,142		9/4/2014	BRC		30,066		—			30,066
Sell	EUR		406,767		10/14/2014	BRC		16,822		—			16,822
Sell	CLP		740,216		10/14/2014	BRC		43,055		—			43,055
Sell	ZAR		964,561		10/14/2014	BRC		—		(18,498	)		(18,498	)
Sell	BRL		156,316		9/2/2014	BRC		—		(5,816	)		(5,816	)
Sell	BRL		188,126		9/3/2014	BRC		—		(3,627	)		(3,627	)
Sell	BRL		180,126		9/2/2014	BRC		—		(3,426	)		(3,426	)
Sell	AUD		869,132		11/14/2014	BRC		—		(7,132	)		(7,132	)
Sell	AUD		515,228		11/14/2014	BRC		—		(4,228	)		(4,228	)
Sell	EUR		3,173,147		12/1/2014	BRC		50,207		—			50,207
Sell	EUR		131,475		12/1/2014	BRC		2,080		—			2,080
Sell	PLN		428,125		11/14/2014	BRC		7,875		—			7,875
Sell	EUR		2,631,199		9/4/2014	BRC		99,235		—			99,235
Sell	GBP		1,470,721		9/18/2014	BRC		14,132		—			14,132
Sell	JPY		206,298		9/3/2014	BRC		4,702		—			4,702
Sell	NZD		146,195		9/16/2014	BRC		5,449		—			5,449
Buy	BRL		442,734		9/3/2014	BCC		218		—			218
Sell	CNY		133,913		4/7/2016	BCC		—		(2,793	)		(2,793	)
Sell	BRL		442,734		9/3/2014	BCC		—		(3,064	)		(3,064	)
Sell	KRW		144,777		10/15/2014	BCC		—		(2,394	)		(2,394	)
Buy	CLP		168,427		9/12/2014	BNP		—		(7,573	)		(7,573	)
Sell	BRL		438,658		3/12/2015	BNP		—		(14,950	)		(14,950	)
Buy	BRL		401,837		9/3/2014	CBK		49,087		—			49,087
Buy	CNY		133,913		4/7/2016	CBK		—		(6,086	)		(6,086	)
Buy	BRL		2,610,995		1/5/2015	CBK		45,088		—			45,088
Sell	EUR		19,283,734		11/7/2014	CBK		409,216		—			409,216
Sell	PLN		3,615,879		10/27/2014	CBK		142,632		—			142,632
Sell	CHF		13,066,742		10/24/2014	CBK		300,036		—			300,036
Sell	NZD		12,243,407		9/19/2014	CBK		378,853		—			378,853
Sell	JPY		25,182,581		9/9/2014	CBK		378,395		—			378,395
Sell	KRW		1,147,725		10/15/2014	CBK		—		(7,725	)		(7,725	)
Sell	CAD		1,816,677		9/18/2014	CBK		—		(1,809	)		(1,809	)
Sell	BRL		6,531,296		1/5/2015	CBK		—		(112,787	)		(112,787	)
Sell	EUR		14,073,718		9/3/2014	CBK		322,669		—			322,669
Sell	MXN		22,484		12/18/2014	CBK		—		(406	)		(406	)
Sell	AUD		366,108		9/3/2014	CBK		—		(3,188	)		(3,188	)
Sell	EUR		375,790		9/3/2014	CBK		7,213		—			7,213
Sell	BRL		401,837		9/3/2014	CBK		—		(197	)		(197	)
Buy	EUR		2,438,691		9/3/2014	FBF		—		(52,985	)		(52,985	)
Buy	JPY		1,794,416		9/3/2014	FBF		—		(595	)		(595	)
Buy	CAD		190,606		4/13/2015	FBF		546		—			546
Buy	CAD		31,856		10/20/2014	FBF		—		(381	)		(381	)
Buy	NZD		182,917		4/13/2015	FBF		—		(10,265	)		(10,265	)

See accompanying notes

37

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Type	Currency	Principal Amount Covered by Contract		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Buy	ZAR		230,939		11/14/2014	FBF	$	—	$	(1,433	)	$	(1,433	)
Buy	CZK		182,631		11/14/2014	FBF		—		(2,440	)		(2,440	)
Buy	EUR		304,603		11/21/2014	FBF		—		(5,029	)		(5,029	)
Buy	DKK		91,464		9/4/2014	FBF		—		(1,369	)		(1,369	)
Buy	NZD		409,346		9/16/2014	FBF		—		(9,303	)		(9,303	)
Buy	NZD		349,267		11/14/2014	FBF		—		(8,071	)		(8,071	)
Buy	EUR		180,075		10/29/2014	FBF		—		(9,056	)		(9,056	)
Buy	NZD		394,950		11/14/2014	FBF		—		(6,376	)		(6,376	)
Buy	MXN		518,789		11/14/2014	FBF		7,789		—			7,789
Buy	EUR		117,608		9/18/2014	FBF		—		(2,279	)		(2,279	)
Buy	EUR		162,997		11/6/2014	FBF		—		(1,769	)		(1,769	)
Buy	GBP		211,558		11/6/2014	FBF		—		(580	)		(580	)
Buy	EUR		130,749		9/18/2014	FBF		—		(1,985	)		(1,985	)
Buy	EUR		38,765		9/18/2014	FBF		—		(731	)		(731	)
Buy	NZD		144,636		9/8/2014	FBF		659		—			659
Buy	BRL		185,123		9/3/2014	FBF		91		—			91
Sell	KRW		10,068		10/15/2014	FBF		—		(68	)		(68	)
Sell	NZD		182,917		4/13/2015	FBF		7,143		—			7,143
Sell	NZD		30,807		10/20/2014	FBF		1,430		—			1,430
Sell	CAD		186,973		4/13/2015	FBF		6,209		—			6,209
Sell	NZD		226,339		11/14/2014	FBF		6,034		—			6,034
Sell	EUR		182,068		11/14/2014	FBF		3,002		—			3,002
Sell	PLN		303,326		11/21/2014	FBF		6,306		—			6,306
Sell	EUR		180,075		10/29/2014	FBF		10,097		—			10,097
Sell	GBP		3,893,829		10/2/2014	FBF		96,626		—			96,626
Sell	EUR		2,413,460		10/2/2014	FBF		87,293		—			87,293
Sell	EUR		788,564		10/14/2014	FBF		33,038		—			33,038
Sell	EUR		862,163		10/14/2014	FBF		31,485		—			31,485
Sell	GBP		459,710		10/14/2014	FBF		14,217		—			14,217
Sell	NOK		64,444		10/14/2014	FBF		—		(424	)		(424	)
Sell	GBP		176,748		10/14/2014	FBF		5,466		—			5,466
Sell	DKK		91,465		9/4/2014	FBF		3,275		—			3,275
Sell	EUR		149,195		11/6/2014	FBF		2,868		—			2,868
Sell	GBP		2,185,937		11/14/2014	FBF		26,074		—			26,074
Sell	NZD		118,785		11/21/2014	FBF		915		—			915
Sell	AUD		135,299		11/21/2014	FBF		—		(299	)		(299	)
Sell	ZAR		165,462		11/21/2014	FBF		138		—			138
Sell	DKK		91,520		12/1/2014	FBF		1,367		—			1,367
Sell	MXN		298,042		11/21/2014	FBF		458		—			458
Sell	EUR		533,352		11/21/2014	FBF		8,536		—			8,536
Sell	TRY		179,893		11/21/2014	FBF		—		(1,093	)		(1,093	)
Sell	EUR		114,326		9/22/2014	FBF		1,249		—			1,249
Sell	BRL		185,123		9/3/2014	FBF		—		(2,823	)		(2,823	)
Buy	KRW		2,744,347		10/15/2014	DUB		1,846		—			1,846
Buy	AUD		381,052		9/3/2014	DUB		1,903		—			1,903
Buy	EUR		228,146		12/23/2014	DUB		—		(3,607	)		(3,607	)
Buy	CAD		558,131		2/25/2019	DUB		9,514		—			9,514
Buy	CAD		322,559		11/14/2014	DUB		1,857		—			1,857
Buy	CZK		182,612		11/14/2014	DUB		—		(2,606	)		(2,606	)
Buy	AUD		321,052		11/14/2014	DUB		549		—			549
Buy	GBP		452,145		11/14/2014	DUB		—		(5,640	)		(5,640	)
Buy	EUR		460,758		11/14/2014	DUB		—		(7,212	)		(7,212	)
Buy	GBP		515,323		3/12/2019	DUB		—		(1,574	)		(1,574	)
Buy	CAD		265,309		3/12/2019	DUB		4,034		—			4,034
Buy	GBP		503,446		3/14/2019	DUB		—		(710	)		(710	)
Buy	EUR		466,587		10/20/2014	DUB		—		(8,421	)		(8,421	)
Buy	EUR		448,270		11/14/2014	DUB		—		(7,221	)		(7,221	)
Buy	EUR		214,210		10/3/2014	DUB		—		(926	)		(926	)
Buy	NOK		228,434		12/23/2014	DUB		—		(1,551	)		(1,551	)
Buy	EUR		228,008		10/3/2014	DUB		—		(587	)		(587	)
Buy	CLP		171,526		11/14/2014	DUB		—		(2,474	)		(2,474	)
Buy	EUR		448,270		11/14/2014	DUB		—		(8,425	)		(8,425	)
Buy	CLP		164,068		9/12/2014	DUB		—		(8,932	)		(8,932	)
Buy	JPY		190,385		12/15/2014	DUB		—		(3,615	)		(3,615	)

See accompanying notes

38

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Type	Currency	Principal Amount Covered by Contract		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Buy	EUR		450,187		10/29/2014	DUB	$	—	$	(15,836	)	$	(15,836	)
Buy	JPY		167,591		9/3/2014	DUB		—		(2,409	)		(2,409	)
Buy	EUR		450,187		10/29/2014	DUB		—		(9,726	)		(9,726	)
Buy	NZD		592,824		10/20/2014	DUB		—		(1,959	)		(1,959	)
Buy	JPY		107,114		9/3/2014	DUB		—		(1,886	)		(1,886	)
Buy	EUR		224,765		10/29/2014	DUB		—		(7,130	)		(7,130	)
Buy	EUR		180,075		10/29/2014	DUB		—		(5,106	)		(5,106	)
Buy	JPY		100,587		9/3/2014	DUB		—		(1,413	)		(1,413	)
Buy	EUR		941,892		11/14/2014	DUB		—		(17,676	)		(17,676	)
Buy	EUR		479,819		11/14/2014	DUB		—		(9,005	)		(9,005	)
Buy	CLP		611,945		11/14/2014	DUB		—		(9,894	)		(9,894	)
Buy	CLP		848,285		11/14/2014	DUB		—		(13,715	)		(13,715	)
Buy	EUR		448,270		11/14/2014	DUB		—		(6,986	)		(6,986	)
Buy	JPY		334,923		9/3/2014	DUB		—		(5,077	)		(5,077	)
Buy	JPY		167,541		9/3/2014	DUB		—		(2,459	)		(2,459	)
Buy	CLP		330,632		11/14/2014	DUB		—		(4,768	)		(4,768	)
Buy	NZD		144,636		9/8/2014	DUB		634		—			634
Sell	KRW		1,419,415		10/15/2014	DUB		—		(9,415	)		(9,415	)
Sell	EUR		508,499		9/3/2014	DUB		11,592		—			11,592
Sell	TRY		1,793,640		10/15/2014	DUB		5,199		—			5,199
Sell	CHF		109,006		11/13/2014	DUB		1,502		—			1,502
Sell	AUD		677,114		9/3/2014	DUB		—		(4,384	)		(4,384	)
Sell	JPY		893,844		9/3/2014	DUB		13,979		—			13,979
Sell	EUR		1,710,763		9/3/2014	DUB		23,953		—			23,953
Sell	JPY		1,799,221		9/3/2014	DUB		3,875		—			3,875
Sell	NOK		231,372		12/23/2014	DUB		381		—			381
Sell	EUR		535,836		2/25/2019	DUB		12,781		—			12,781
Sell	AUD		321,052		11/14/2014	DUB		—		(350	)		(350	)
Sell	EUR		182,068		11/14/2014	DUB		3,149		—			3,149
Sell	CAD		319,883		11/14/2014	DUB		620		—			620
Sell	EUR		448,270		11/14/2014	DUB		9,515		—			9,515
Sell	GBP		463,991		11/14/2014	DUB		3,978		—			3,978
Sell	EUR		498,397		3/12/2019	DUB		18,500		—			18,500
Sell	EUR		249,199		3/12/2019	DUB		12,077		—			12,077
Sell	EUR		485,116		3/14/2019	DUB		19,040		—			19,040
Sell	NOK		472,734		10/20/2014	DUB		2,274		—			2,274
Sell	GBP		451,611		11/14/2014	DUB		3,880		—			3,880
Sell	NOK		214,166		10/3/2014	DUB		970		—			970
Sell	EUR		228,146		12/23/2014	DUB		1,839		—			1,839
Sell	NOK		228,316		10/3/2014	DUB		279		—			279
Sell	AUD		170,384		9/12/2014	DUB		116		—			116
Sell	AUD		174,901		9/12/2014	DUB		99		—			99
Sell	EUR		180,075		10/29/2014	DUB		5,841		—			5,841
Sell	NZD		116,956		9/16/2014	DUB		4,824		—			4,824
Sell	AUD		156,112		11/14/2014	DUB		—		(665	)		(665	)
Sell	JPY		188,792		12/15/2014	DUB		5,208		—			5,208
Sell	JPY		165,511		9/3/2014	DUB		4,489		—			4,489
Sell	BRL		381,018		3/13/2015	DUB		—		(32,880	)		(32,880	)
Sell	NZD		146,195		9/16/2014	DUB		7,140		—			7,140
Sell	EUR		448,270		11/14/2014	DUB		2,181		—			2,181
Sell	CAD		340,784		11/14/2014	DUB		216		—			216
Sell	EUR		448,270		11/14/2014	DUB		7,223		—			7,223
Sell	CLP		251,180		11/21/2014	DUB		3,520		—			3,520
Sell	JPY		673,752		10/14/2014	DUB		1,248		—			1,248
Sell	NZD		296,412		10/20/2014	DUB		574		—			574
Sell	NZD		296,412		10/20/2014	DUB		211		—			211
Sell	NZD		144,636		9/8/2014	DUB		2,028		—			2,028
Sell	EUR		131,396		9/4/2014	DUB		4,917		—			4,917
Sell	PLN		214,945		9/4/2014	DUB		9,219		—			9,219
Sell	AUD		173,419		9/12/2014	DUB		—		(419	)		(419	)
Buy	EUR		16,341,595		9/3/2014	GSC		—		(72,757	)		(72,757	)
Buy	JPY		898,650		9/3/2014	GSC		647		—			647
Buy	BRL		867,635		9/3/2014	GSC		37,635		—			37,635
Sell	MXN		64,640		10/22/2014	GSC		—		(100	)		(100	)

See accompanying notes

39

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Type	Currency	Principal Amount Covered by Contract		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Sell	MXN		230,933		9/23/2014	GSC	$	936	$	—		$	936
Sell	BRL		401,837		9/3/2014	GSC		—		(49,087	)		(49,087	)
Sell	JPY		898,851		10/2/2014	GSC		—		(664	)		(664	)
Sell	EUR		16,344,240		10/2/2014	GSC		72,500		—			72,500
Sell	BRL		465,797		9/3/2014	GSC		—		(229	)		(229	)
Sell	BRL		26,334		12/4/2014	GST		—		(334	)		(334	)
Sell	AUD		175,875		9/12/2014	GST		125		—			125
Sell	EUR		225,422		10/29/2014	GST		13,338		—			13,338
Buy	EUR		515,487		11/28/2014	HUB		—		(14,794	)		(14,794	)
Buy	BRL		381,018		3/13/2015	HUB		156		—			156
Buy	BRL		438,658		3/12/2015	HUB		110		—			110
Buy	BRL		12,494		11/10/2014	HUB		—		—			—
Buy	BRL		393,455		11/10/2014	HUB		—		(549	)		(549	)
Buy	AUD		233,629		9/23/2014	HUB		—		(271	)		(271	)
Sell	BGN		517,413		11/28/2014	HUB		12,868		—			12,868
Sell	BRL		405,949		11/10/2014	HUB		—		(32,185	)		(32,185	)
Sell	AUD		328,759		9/23/2014	HUB		—		(190	)		(190	)
Buy	CLP		4,859,916		10/24/2014	HUS		—		(179,738	)		(179,738	)
Buy	CLP		1,161,440		9/26/2014	HUS		—		(63,014	)		(63,014	)
Buy	CLP		995,266		10/10/2014	HUS		—		(54,443	)		(54,443	)
Buy	CLP		1,754,217		9/10/2014	HUS		—		(96,138	)		(96,138	)
Buy	AUD		6,288,086		11/12/2014	HUS		52,811		—			52,811
Buy	INR		4,762,162		11/17/2014	HUS		29,006		—			29,006
Sell	CZK		4,038,783		11/6/2014	HUS		97,160		—			97,160
Sell	PLN		233,383		10/27/2014	HUS		5,068		—			5,068
Sell	EUR		368,060		11/7/2014	HUS		6,585		—			6,585
Buy	GBP		292,175		9/8/2014	JPM		—		(4,262	)		(4,262	)
Buy	EUR		214,210		10/3/2014	JPM		—		(1,007	)		(1,007	)
Buy	EUR		210,267		10/3/2014	JPM		—		(541	)		(541	)
Buy	EUR		250,985		9/18/2014	JPM		—		(9,145	)		(9,145	)
Buy	GBP		69,718		9/18/2014	JPM		—		(2,209	)		(2,209	)
Buy	EUR		98,555		9/18/2014	JPM		—		(3,038	)		(3,038	)
Buy	GBP		283,852		9/18/2014	JPM		—		(9,102	)		(9,102	)
Buy	EUR		232,570		9/4/2014	JPM		—		(5,738	)		(5,738	)
Buy	BRL		26,334		12/4/2014	JPM		334		—			334
Buy	EUR		52,562		9/18/2014	JPM		—		(1,618	)		(1,618	)
Buy	EUR		52,562		9/18/2014	JPM		—		(1,750	)		(1,750	)
Buy	NZD		146,195		9/16/2014	JPM		—		(893	)		(893	)
Buy	CLP		167,619		9/12/2014	JPM		—		(7,381	)		(7,381	)
Buy	CLP		162,147		9/12/2014	JPM		—		(8,353	)		(8,353	)
Sell	JPY		289,247		9/8/2014	JPM		7,190		—			7,190
Sell	NOK		214,061		10/3/2014	JPM		1,156		—			1,156
Sell	NOK		210,418		10/3/2014	JPM		390		—			390
Sell	EUR		2,312,847		11/6/2014	JPM		50,700		—			50,700
Sell	GBP		564,154		11/6/2014	JPM		7,686		—			7,686
Sell	JPY		68,868		11/6/2014	JPM		1,076		—			1,076
Sell	EUR		1,250,985		9/18/2014	JPM		39,043		—			39,043
Sell	GBP		449,848		9/18/2014	JPM		4,358		—			4,358
Buy	BRL		183,318		9/3/2014	MSC		1,018		—			1,018
Buy	BRL		383,588		9/3/2014	MSC		7,888		—			7,888
Buy	BRL		394,080		9/3/2014	MSC		194		—			194
Buy	BRL		185,517		9/3/2014	MSC		91		—			91
Sell	BRL		383,588		9/3/2014	MSC		—		(188	)		(188	)
Sell	MXN		335,885		11/14/2014	MSC		115		—			115
Sell	BRL		394,080		9/3/2014	MSC		—		(11,680	)		(11,680	)
Sell	BRL		183,308		12/2/2014	MSC		—		(1,008	)		(1,008	)
Sell	KRW		377,868		11/21/2014	MSC		—		(1,468	)		(1,468	)
Sell	JPY		723,608		10/14/2014	MSC		1,392		—			1,392
Sell	BRL		185,517		9/3/2014	MSC		—		(3,217	)		(3,217	)
Buy	CAD		322,747		11/14/2014	UAG		1,858		—			1,858
Buy	AUD		321,052		11/14/2014	UAG		—		(1,144	)		(1,144	)
Buy	EUR		131,428		10/15/2014	UAG		—		(4,028	)		(4,028	)
Buy	INR		175,618		11/14/2014	UAG		2,118		—			2,118
Buy	BRL		381,676		9/3/2014	UAG		8,176		—			8,176

See accompanying notes

40

American Beacon Flexible Bond Fund^SM

Schedule of Investments

August 31, 2014

Type	Currency	Principal Amount Covered by Contract		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Sell	AUD		321,052		11/14/2014	UAG	$	—	$	(163	)	$	(163	)
Sell	CAD		319,854		11/14/2014	UAG		2,341		—			2,341
Sell	BRL		381,676		9/3/2014	UAG		—		(187	)		(187	)
Sell	CAD		340,761		11/14/2014	UAG		239		—			239
Sell	INR		253,425		11/21/2014	UAG		576		—			576
Sell	INR		172,891		11/14/2014	UAG		609		—			609
							$	3,707,959	$	(1,603,991	)	$	2,103,968

Borrowing and Other Financing Transactions

Reverse Repurchase Agreements

Counterparty	Borrowing Rate			Borrowing Date		Maturity Date		Amount Borrowed (1)		Payable for Reverse Repurchase Agreements
Deutsche Bank Securities, Inc. (2)		0.0600	%		8/21/2014		9/3/2014	$	12,281,500	$	12,281,500
								$	12,281,500	$	12,281,500

Short Sales

Type of Investment	Description	Coupon (%)		Maturity Date		Principal Amount (000s)			Proceeds			Fair Value
U.S. Agency CMO	Fannie Mae TBA		4.000		10/1/2041	$	(13,000	)	$	(13,654,063	)	$	(13,731,758	)
U.S. Agency CMO	Fannie Mae TBA		4.500		10/1/2041		(5,000	)		(5,385,156	)		(5,386,816	)
U.S. Agency CMO	Fannie Mae TBA		4.500		9/1/2041		(5,000	)		(5,387,656	)		(5,400,000	)
U.S. Agency CMO	Fannie Mae TBA		5.500		9/1/2014		(6,000	)		(6,653,438	)		(6,671,437	)
U.S. Agency CMO	Fannie Mae TBA		6.000		9/1/2041		(1,000	)		(1,125,000	)		(1,127,812	)
									$	(32,205,313	)	$	(32,317,823	)

1) The average amount of borrowing during the Period ended August 31, 2014 was $369,149 at a weighted average interest rate of 0.0069%.

2) Collateralized by a U.S. Government Agency Obligation valued at $12,281,500, 2.50%, 5/15/2024.

Glossary

Counterparty Abbreviations:

BCC	Barclays Capital	DUB	Deutsche Bank AG	JPM	JPMorgan Chase Bank, N.A.
BNP	BNP Paribas, N.A.	FBF	Credit Suisse International	MSC	Morgan Stanley & Co. Inc.
BOA	Bank of America, N.A.	FOB	Credit Suisse Securities USA, LLC	MYC	Morgan Stanley Capital Services
BRC	Barclays Bank PLC	GLM	Goldman Sachs Bank USA	RBS	Royal Bank of Scotland PLC
CBK	Citibank, N.A.	GST	Goldman Sachs International	UAG	UBS AG
DEU	Deutsche Bank AG, New York	HUB	HSBC BANK PLC
Currency Abbreviations:
AUD	Australian Dollar	GBP	Sterling	NZD	New Zealand Dollar
BRL	Brazilian Real	INR	Indian Rupee	PLN	Polish Zolty
CAD	Canadian Dollar	JPY	Japanese Yen	SEK	Swedish Krona
CHF	Swiss Franc	KRW	South Korean Won	TRY	Turkish New Lira
CZK	Czech Republic Koruna	MXN	Mexican Peso	USD	United States Dollar
EUR	Euro	NOK	Norwegian Krone	ZAR	South African Rand
Index Abbreviations:
ABX	Asset Backed Securities Index	CMBX	Commercial Mortgage Backed Securities Index	USA-CPI-U	Consumer Price All Urban Non-Seasonally Adjusted Index
CDX.IG	Credit Derivatives Index - Investment Grade	iTrax	Markit iTraxx Europe
Exchange Abbreviations:
CME	Chicago Mercantile Exchange	OTC	Over-the-Counter
Other Abbreviations:
BBR	Bank Bill Rate	ECAL	European-style Call	LIBOR	London Interbank Offer Rate
BBSW	Bank Bill Swap Reference Rate	EPUT	European-style Put	NIBOR	Norwegian Interbank Offer Rate
CD	Certificate of Deposit	EURIBOR	Euro Interbank Offer Rate	TELBOR	TelAviv Interbank Offer Rate
CDOR	Canadian Dealer Offered Rate	IRS	Interest Rate Swap	TIIE	Tasa de Intere’s Interbancaria de Equilibrio
CDS	Credit Default Swap	JIBAR	Johannesburg Interbank Agreed Rate

See accompanying notes

41

American Beacon Flexible Bond Fund^SM

Statement of Assets and Liabilities

August 31, 2014 (in thousands, except share and per share amounts)

Assets:
Investments in unaffiliated securities, at fair valueA	$	318,802
Purchased options and swaptions outstandingC		3,776
Foreign currency, at fair valueB		717
Swap premium paid		1,957
Swap Income receivable		133
Deposit with brokers for futures contracts		7,923
Receivable for investments sold		39,252
Receivable for fund shares sold		289
Dividends and interest receivable		2,318
Receivable for tax reclaims		44
Receivable for expense reimbursement (Note 2)		124
Unrealized appreciation of swap agreements		6,165
Unrealized appreciation from foreign currency contracts		3,708
Prepaid expenses		39
Other assets		3
Total assets		385,250
Liabilities:
Payable for investments purchased		43,530
Payable for fund shares redeemed		62
Payable for reverse repurchase agreements		12,282
Payable for securities sold short, at fair value (proceeds $32,205)		32,318
Swap premium received		2,810
Swap income payable		419
Written options , at fair value (premiums received $3,775)		2,462
Management and investment advisory fees payable		137
Administrative service and service fees payable		97
Transfer agent fees payable		11
Custody and fund accounting fees payable		26
Professional fees payable		189
Prospectus and shareholder reports fees payable		6
Trustee fees payable		4
Due to Brokers		115
Payable for variation margin from open futures contracts		1,736
Unrealized depreciation of swap agreements		9,512
Unrealized depreciation from foreign currency contracts		1,604
Other liabilities		11
Total liabilities		107,331
Net assets	$	277,919
Analysis of Net Assets:
Paid-in-capital		280,752
Over distribution of net investment income		(832	)
Accumulated net realized (loss)		(4,748	)
Unrealized appreciation of investments		6,777
Unrealized appreciation of foreign currency contracts		1,205
Unrealized depreciation of futures contracts		(1,699	)
Unrealized depreciation of swap agreements		(3,347	)
Unrealized depreciation of options and swaptions contracts		(76	)
Unrealized depreciation of short sales		(113	)
Net assets	$	277,919

See accompanying notes

42

American Beacon Flexible Bond Fund^SM

Statement of Assets and Liabilities

August 31, 2014 (in thousands, except share and per share amounts)

Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		17,160,344
Y Class		3,683,453
Investor Class		2,367,024
A Class		2,643,258
C Class		1,088,687
Net assets (not in thousands):
Institutional Class	$	177,201,454
Y Class	$	38,033,706
Investor Class	$	24,410,567
A Class	$	27,146,489
C Class	$	11,126,819
Net asset value, offering and redemption price per share:
Institutional Class	$	10.33
Y Class	$	10.33
Investor Class	$	10.31
A Class	$	10.27
A Class (offering price)	$	10.78
C Class	$	10.22
A Cost of investments in unaffiliated securities	$	312,879
B Cost of foreign currency	$	718
C Cost of purchased options outstanding	$	5,165

See accompanying notes

43

American Beacon Flexible Bond Fund^SM

Statement of Operations

For the year ended August 31, 2014 (in thousands)

Investment Income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	13
Interest income		8,108
Total investment income		8,121
Expenses:
Management and investment advisory fees (Note 2)		1,705
Administrative service fees (Note 2):
Institutional Class		477
Y Class		109
Investor Class		135
A Class		136
C Class		49
Transfer agent fees:
Institutional Class		59
Y Class		3
Investor Class		8
A Class		9
C Class		2
Custody and fund accounting fees		302
Professional fees		360
Registration fees and expenses		103
Service fees (Note 2):
Y Class		36
Investor Class		112
A Class		53
C Class		19
Distribution fees (Note 2):
A Class		88
C Class		127
Prospectus and shareholder report expenses		42
Trustee fees		17
Other expenses		27
Total expenses		3,978
Net fees waived and expenses reimbursed (Note 2)		(855	)
Net expenses		3,123
Net investment income		4,998
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments		785
Foreign currency transactions		(1,574	)
Futures contracts		(4,262	)
Swap agreements		326
Options and swaptions contracts		(728	)
Change in net unrealized appreciation or (depreciation) of:
Investments		11,035
Foreign currency transactions		4,307
Futures contracts		(2,017	)
Swap agreements		(3,087	)
Options and swaption contracts		(123	)
Short sales		(113	)
Net gain from investments		4,549
Net increase in net assets resulting from operations	$	9,547
A Foreign taxes	$	60

See accompanying notes

44

American Beacon Flexible Bond Fund^SM

Statement of Changes of Net Assets (in thousands)

	Year Ended August 31, 2014			Year Ended August 31, 2013
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	4,998		$	1,221
Net realized gain (loss) from investments, foreign currency, futures contracts, swap agreements, option and swaptions contracts, and short sales		(5,453	)		2,507
Change in net unrealized appreciation or (depreciation) from investments, foreign currency, futures contracts, swap agreements, option and swaptions contracts, and short sales		10,002			(8,566	)
Net increase (decrease) in net assets resulting from operations		9,547			(4,838	)
Distributions to Shareholders:
Net investment income:
Institutional Class		(2,789	)		(699	)
Y Class		(621	)		(454	)
Investor Class		(652	)		(826	)
A Class		(457	)		(463	)
C Class		(72	)		(156	)
Net realized gain from investments:
Institutional Class		(1,025	)		(91	)
Y Class		(253	)		(196	)
Investor Class		(349	)		(411	)
A Class		(275	)		(210	)
C Class		(92	)		(93	)
Net distributions to shareholders		(6,585	)		(3,599	)
Capital Share Transactions:
Proceeds from sales of shares		114,770			280,548
Reinvestment of dividends and distributions		6,267			(58,848	)
Cost of shares redeemed		(125,983	)		3,140
Net increase (decrease) in net assets from capital share transactions		(4,946	)		224,840
Net increase (decrease) in net assets		(1,984	)		216,403
Net Assets:
Beginning of period		279,903			63,500
End of Period *	$	277,919		$	279,903
*Includes undistributed (or distribution in excess of) net investment income	$	(832	)	$	1,008

See accompanying notes

45

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), which is comprised of thirty-one 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 Flexible Bond 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.

The Flexible Bond Fund is a commodity pool, as defined in the regulations of the Commodity Futures Trading Commission (the “CFTC”) and operated by the Manager, a commodity pool operator registered with the CFTC.

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 directly or 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

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 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.

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 services. Investment assets of the Fund are managed by multiple investment advisors which have entered into separate investment advisory agreements with the Manager and the Trust. As compensation for performing the duties required under the Management Agreement, the Manager receives from the Fund 0.05% of the average daily net assets. The Fund pays the unaffiliated investment advisors hired to direct investment activities of the Fund. Management fees paid by the Fund during the year ended August 31, 2014 were as follows (dollars in thousands):

Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Amounts Paid to Manager
	0.59	%	$	1,705	$	1,561	$	144

46

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

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, and Investor Classes of the Fund. Prior to June 30, 2014, the Manager received an annualized fee of 0.40% of the average daily net assets of the A and C Classes of the Fund. Beginning July 1, 2014, the Manager received an annualized fee of 0.30% of the average daily net assets of the A and C Classes of the Fund.

Distribution Plans

The Fund, except for the 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 advisor 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 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 A Class and 1.00% of the average daily net assets of the C Class of the Fund. 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 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 the Fund.

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 August 31, 2014, the Fund did not utilize the credit facility.

Expense Reimbursement Plan

The Manager contractually agreed to reimburse the classes of the Fund to the extent that total annual fund operating expenses exceeded the Fund’s expense cap. During the year ended August 31, 2014, the Manager reimbursed expenses as follows:

	Expense Cap
Class	9/1/13 - 6/30/14	7/1/14 - 8/31/14	Reimbursed Expenses	Expiration of Reimbursements
Institutional	0.90%	0.90%	$530,451	2017
Y	0.99%	0.99%	107,654	2017
Investor	1.27%	1.27%	71,668	2017
A	1.39%	1.29%	106,230	2017
C	2.14%	2.04%	38,830	2017

47

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

Of these amounts, $124,270 is receivable from the Manager, as of August 31, 2014. The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of expenses reimbursed for a period of up to three years. However, reimbursement will occur only if the Class’s 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 reimbursed expenses listed above will expire in 2017. The carryover of excess expenses potentially reimbursable to the Manager but not recorded as a liability is $274,377 and $378,404 expiring in 2015 and 2016, respectively. 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 August 31, 2014 Foreside collected $4,707 from the sale of A Class Shares.

A contingent deferred sales charge (“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 12 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 August 31, 2014, there were no CDSC fees collected for the Fund.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the 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 August 31, 2014 CDSC charges of $8,413 were collected.

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 market 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, the 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

48

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

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.

For valuation purposes, the last quoted prices of non-U.S. equity securities may be adjusted under the circumstances described below. If a Manager 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 a fund’s portfolio securities, the Manager 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 Manager reviews a variety of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. The Valuation Committee may also fair value securities in other situations, such as when a particular foreign market is closed but a Fund is open. The Fund uses outside pricing services to provide closing prices and information to evaluate and/or adjust those prices. As a means of evaluating its security valuation process, the Valuation Committee routinely compares closing prices, the next day’s opening prices in the same markets, and adjusted prices.

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 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 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 and 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.

49

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

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, ETFs and financial derivative instruments, such as futures contracts or options 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. Investments in privately held investment funds which are redeemable within 90 days of the measurement date, will be valued based upon the NAVs of such investments and are categorized as Level 2 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, options contracts, or swaps agreements, 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 value of the financial derivative contracts can be estimated by a pricing service provider using a series of techniques, including simulation pricing models. The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest rates, curves, dividends and exchange rates. Financial derivatives that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

The Fund’s 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 transfers between levels of the Fund’s assets and liabilities. As of August 31, 2014, the investments were classified as described below (in thousands):

Flexible Bond Fund (1)	Level 1		Level 2		Level 3		Total
Preferred Stock	$	578	$	1,100	$	—	$	1,678
Domestic Bank Loan		—		1,631		—		1,631
Domestic Convertible Obligations		—		2,603		—		2,603
Domestic Obligations		—		82,213		339		82,552
Foreign Convertible Obligations		—		2,704		—		2,704
Foreign Obligations		—		93,718		5		93,723
Asset-Backed Obligations		—		15,220		—		15,220
Collateralized Mortgage Obligations				19,890		—		19,890
Foreign Collateralized Mortgage-Backed Obligations		—		4,504		—		4,504
Commercial Mortgage-Backed Obligations		—		1,846		—		1,846
U.S. Agency Mortgage-Backed Obligations		—		2,160		—		2,160
U.S. Agency Obligations		—		290		—		290
U.S. Treasury Obligations		—		72,509		—		72,509
Short-Term Investments
Other Investment Companies		11,463		—		—		11,463
Certificate of Deposits		—		900		—		900
U.S. Treasury Bills & Notes		—		5,129		—		5,129
Total Investments in Securities	$	12,041	$	306,417	$	344	$	318,802

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August 31, 2014

	Level 1			Level 2			Level 3		Total
Other Financial Instruments - Assets
Purchased options outstanding	$	—		$	3,776		$	—	$	3,776
Futures contracts		14			—			—		14
Interest Rate Swap agreements		—			6,154			—		6,154
Credit Default Swap agreements		—			1,066			—		1,066
Total Return Swap agreements		—			8			—		8
Forward currency contracts		—			3,708			—		3,708
	$	14		$	14,712		$	—	$	14,726
	Level 1			Level 2			Level 3		Total
Other Financial Instruments - Liabilities
Short Sales	$	—		$	(32,318	)	$	—	$	(32,318	)
Reverse repurchase agreement		—			(12,282	)		—		(12,282	)
Written options outstanding		—			(2,462	)		—		(2,462	)
Futures contracts		(1,713	)		—			—		(1,713	)
Interest Rate Swap agreements		—			(9,887	)		—		(9,887	)
Credit Default Swap agreements		—			(1,533	)		—		(1,533	)
Total Return Swap agreements		—			(8	)		—		(8	)
Forward currency contracts		—			(1,604	)		—		(1,604	)
	$	(1,713	)	$	(60,094	)	$	—	$	(61,807	)

⁽¹⁾  Refer to the Schedule of Investments for Industry Information

The following is a reconciliation of Level 3 assets of the 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.

	Asset-Backed Obligations			Domestic Obligations			Foreign Obligations		Totals
Beginning Balance as of 8/31/2013	$	221		$	—		$	—	$	221
Net Purchases		—			336			—		336
Net Sales		(170	)		—			—		(170	)
Accrued Discounts/(Premiums)		(4	)		(3	)		—		(7	)
Realized Gain/(Loss)		(17	)		—			—		(17	)
Net Change in Unrealized Appreciation/(Depreciation)		(30	)		6			5		(19	)
Transfers into Level 3		—			—			—		—
Transfers out of Level 3		—			—			—		—
Ending Balance 8/31/2014	$	—		$	339		$	5	$	344
Net Change in Unrealized Appreciation/(Depreciation) on Investments Held at 8/31/2014(2)	$	—			6			5	$	11

²  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 Statement of Operations.

The domestic obligation and foreign convertible obligation classified as Level 3 were valued using single broker quotes of $112.86 and $0.05, respectively. However, these securities are included in the Level 3 category due to limited market transparency and or a lack of corroboration to support the quoted prices.

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.

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August 31, 2014

Currency Translation

All assets and liabilities initially expressed in foreign currency values are converted into U.S. dollar values at the mean of the bid and ask prices of such currencies against U.S. dollars as last quoted by a recognized dealer. Income, expenses and purchases and sales of investments are translated into U.S. dollars at the rate of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and is reported with all other foreign currency gains and losses in the Fund’s Statement of Operations.

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 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, if applicable. For the year ended August 31, 2014, the Fund did not have any commission recapture.

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.

4. Securities and other Investments

Emerging Markets Debt

The Fund may invest in emerging markets debt The Fund’s emerging markets debt securities may include obligations of government and corporations. As with any fixed income securities, emerging markets debt securities are subject to the risk of being downgraded in credit rating and to the risk of default. In the

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August 31, 2014

event of a default on any investments in foreign debt obligations, it may be more difficult for the Fund to obtain or to enforce a judgment against the issuers of such securities. With respect to debt issued by emerging markets governments, such issues may be unwilling to pay interest and repay principal when due, either due to inability to pay or submission to political pressure not to pay, and as a result my default, declare temporary suspensions of interest payments or require that the conditions of payments be renegotiated.

Repurchase Agreements

A repurchase agreement is a fixed income security in the form of an agreement between a Fund as purchaser and an approved counterparty as seller. The agreement is backed by collateral in the form of securities and/or cash transferred by the seller to the buyer to be held by an eligible third-party custodian. Under the agreement a Fund acquires securities from the seller and the seller simultaneously commits to repurchase the securities at an agreed upon price and date, normally within a week. The price for the seller to repurchase the securities is greater than a Fund’s purchase price, reflecting an agreed upon “interest rate” that is effective for the period of time the purchaser’s money is invested in the security. During the term of the repurchase agreement, a Fund monitors on a daily basis the market value of the collateral subject to the agreement and, if the market value of the securities falls below the seller’s repurchase amount provided under the repurchase agreement, the seller is required to transfer additional securities or cash collateral equal to the amount by which the market value of the securities falls below the repurchase amount. Repurchase agreements may exhibit the economic characteristics of loans by a Fund.

The obligation of the seller under the repurchase agreement is not guaranteed, and there is a risk that the seller may fail to repurchase the underlying securities, whether because of the seller’s bankruptcy or otherwise. In such event, a Fund would attempt to exercise its rights with respect to the underlying collateral, including possible sale of the securities. A Fund may incur various expenses in connection with the exercise of its rights and may be subject to various delays and risks of loss, including (a) possible declines in the value of the underlying collateral, (b) possible reduction in levels of income and (c) lack of access to the collateral held through a third-party custodian and possible inability to enforce the Fund’s rights. The Board has established procedures pursuant to which the Manager monitors the creditworthiness of the counterparties with which the Fund enters into repurchase agreement transactions.

The Funds may enter into repurchase agreements with member banks of the Federal Reserve System or registered broker-dealers who, in the opinion of the Manager, present a minimal risk of default during the term of the agreement. The underlying securities which serve as collateral for repurchase agreements may include fixed income and equity securities such as U.S. government and agency securities, municipal obligations, corporate obligations, asset-backed securities, mortgage-backed securities, common and preferred stock, American Depositary Receipts, exchange-traded funds and convertible securities. There is no percentage restriction on each Fund’s ability to enter into repurchase agreements with terms of seven days or less.

Reverse Repurchase Agreements

Under a reverse repurchase agreement, the Fund sells securities and agrees to repurchase them at a mutually agreed upon date and price. At the time the Fund enters into a reverse repurchase agreement, it will establish a segregated account with the custodian containing liquid assets having at least equal value to the repurchase price.

Certificate of Deposit

A savings certificate entitling the bearer to receive interest. A Certificate of Deposit (“CD”) bears a fixed maturity date, has a specified fixed interest rate, and can be issued in any denomination. CDs are generally issued by commercial banks and are currently insured by the Federal Deposit Insurance Corporation (FDIC) up to a maximum of $250,000. CDs are generally offered at terms ranging from one month to five years.

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American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

Inflation-Indexed Bonds

The Fund may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted based on the rate of inflation. The interest rate on these bonds is generally fixed at issuance at a rate lower than typical bonds. Over the life of an inflation-indexed bond, however, interest will be paid based on a principal value, which is adjusted for inflation. Any increase or decrease in the principal amount of an inflation-indexed bond will be included as interest income on the Statement of Operations, even though investors do not receive their principal until maturity.

Pay-In-Kind Securities

The Fund may invest in payment in-kind securities. Payment in-kind securities (“PIKs”) 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 Statement of Assets and Liabilities.

Restricted Securities

The Fund 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 as of August 31, 2014 are disclosed in the Notes to the Schedule of Investments.

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.

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.

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American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

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 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.

Mortgage-Related and Other Asset-Backed Securities

The Fund may invest in mortgage or other asset-backed securities (“ABS”). These securities may include mortgage instruments issued by U.S. government agencies (“agency mortgages”) or those issued by private entities (“non-agency mortgages”). Specific types of instruments may include mortgage pass-through securities, collateralized mortgage obligations (“CMOs”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage-backed securities and other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real property. The value of the Fund’s mortgage-backed securities (“MBS”) may be affected by, among other things, changes or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgage, or the quality of the underlying assets. The mortgages underlying the securities may default or decline in quality or value. Through its investments in MBS, a Fund has exposure to subprime loans, Alt-A loans and non-conforming loans as well as to the mortgage and credit markets generally. Underlying collateral related to subprime, Alt-A and non-conforming mortgage loans has become increasingly susceptible to defaults and declines in quality or value, especially in a declining residential real estate market. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole.

Mortgage-Backed Securities

MBS often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities’ effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of the Fund’s portfolio at the time resulting in reinvestment risk.

Rising or high interest rates may result in slower than expected principal payments which may tend to extend the duration of MBS, making them more volatile and more sensitive to changes in interest rates. This is known as extension risk.

MBS may have less potential for capital appreciation than comparable fixed income securities due to the likelihood of increased prepayments of mortgages resulting from foreclosures or declining interest rates. These foreclosed or refinanced mortgages are paid off at face value (par) or less, causing a loss, particularly for any investor who may have purchased the security at a premium or a price above par. In such an environment, this risk limits the potential price appreciation of these securities.

Agency Mortgage-Backed Securities

Certain MBS may be issued or guaranteed by the U.S. government or a government sponsored entity, such as Fannie Mae (the Federal National Mortgage Association) or Freddie Mac (the Federal Home Loan

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American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

Mortgage Corporation). Although these instruments may be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit of the United States and are still exposed to the risk of non-payment.

Privately Issued Mortgage-Backed Securities

MBS held by a Fund may be issued by private issuers including commercial banks, savings associations, mortgage companies, investment banking firms, finance companies and special purpose finance entities (called special purpose vehicles or SPVs) and other entities that acquire and package mortgage loans for resale as MBS. These privately issued non-agency MBS may offer higher yields than those issued by government agencies, but also may be subject to greater price changes than governmental issues. Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments on their loans. Alt-A loans refer to loans extended to borrowers who have incomplete documentation of income, assets, or other variables that are important to the credit underwriting processes. Non-conforming mortgages are loans that do not meet the standards that allow purchase by government-sponsored enterprises. MBS with exposure to subprime loans, Alt-A loans or non-conforming loans have had in many cases higher default rates than those loans that meet government underwriting requirements. The risk of non-payment is greater for MBS that are backed by mortgage pools that contain subprime, Alt-A and non-conforming loans, but a level of risk exists for all loans.

Unlike agency MBS issued or guaranteed by the U.S. government or a government-sponsored entity (e.g., Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation), MBS issued by private issuers do not have a government or government-sponsored entity guarantee, but may have credit enhancements provided by external entities such as banks or financial institutions or achieved through the structuring of the transaction itself. Examples of such credit support arising out of the structure of the transaction include the issue of senior and subordinated securities (e.g., the issuance of securities by an SPV in multiple classes or “tranches,” with one or more classes being senior to other subordinated classes as to the payment of principal and interest, with the result that defaults on the underlying mortgage loans are borne first by the holders of the subordinated class); creation of “reserve funds” (in which case cash or investments, sometimes funded from a portion of the payments on the underlying mortgage loans, are held in reserve against future losses); and “overcollateralization” (in which case the scheduled payments on, or the principal amount of, the underlying mortgage loans exceeds that required to make payment on the securities and pay any servicing or other fees). However, there can be no guarantee that credit enhancements, if any, will be sufficient to prevent losses in the event of defaults on the underlying mortgage loans. In addition, MBS that are issued by private issuers are not subject to the underwriting requirements for the underlying mortgages that are applicable to those MBS that have a government or government-sponsored entity guarantee. As a result, the mortgage loans underlying private MBS may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics than government or government-sponsored MBS and have wider variances in a number of terms including interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently include second mortgages, high loan-to-value mortgages and manufactured housing loans. The coupon rates and maturities of the underlying mortgage loans in a private-label MBS pool may vary to a greater extent than those included in a government guaranteed pool, and the pool may include subprime mortgage loans.

Privately issued MBS are not traded on an exchange and there may be a limited market for the securities, especially when there is a perceived weakness in the mortgage and real estate market sectors. Without an active trading market, MBS held in the Fund’s portfolio may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans.

Asset-Backed Securities

ABS may include MBS, loans, receivables or other assets. The value of the Fund’s ABS may be affected by, among other things, actual or perceived changes in interest rates, factors concerning the interests in and

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American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

structure of the issuer or the originator of the receivables, the market’s assessment of the quality of underlying assets or actual or perceived changes in the credit worthiness of the individual borrowers, the originator, the servicing agent or the financial institution providing the credit support.

Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities.

Rising or high interest rates tend to extend the duration of ABS, making them more volatile and more sensitive to changes in interest rates. The underlying assets are sometimes subject to prepayments which can shorten the security’s weighted average life and may lower its return. Defaults on loans underlying ABS have become an increasing risk for ABS that are secured by home equity loans related to sub-prime, Alt-A or non-conforming mortgage loans, especially in a declining residential real estate market.

ABS (other than MBS) present certain risks that are not presented by MBS. Primarily, these securities may not have the benefit of any security interest in the related assets. Credit card receivables are generally unsecured and the debtors are entitled to the protection of a number of state and federal consumer credit laws, many of which give such debtors the right to set off certain amounts owed on the credit cards, thereby reducing the balance due. There is the possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on these securities. ABS are often backed by a pool of assets representing the obligations of a number of different parties. To lessen the effect of failures by obligors on underlying assets to make payments, the securities may contain elements of credit support which fall into two categories: (i) liquidity protection, and (ii) protection against losses resulting from ultimate default by an obligor on the underlying assets. Liquidity protection refers to the provision of advances, generally by the entity administering the pool of assets, to ensure that the receipt of payments on the underlying pool occurs in a timely fashion. Protection against losses results from payment of the insurance obligations on at least a portion of the assets in the pool. This protection may be provided through guarantees, policies or letters of credit obtained by the issuer or sponsor from third parties, through various means of structuring the transaction or through a combination of such approaches. The Fund will not pay any additional or separate fees for credit support. The degree of credit support provided for each issue is generally based on historical information respecting the level of credit risk associated with the underlying assets.

Delinquency or loss in excess of that anticipated or failure of the credit support could adversely affect the return on an investment in such a security. The availability of ABS may be affected by legislative or regulatory developments. It is possible that such developments may require the Fund to dispose of any then existing holdings of such securities.

Short Sales

The Fund may enter into short sale transactions. A short sale is a transaction in which a Fund sells a security it does not own in anticipation of a decline in the market price of the security. Securities sold in short sale transactions and the interest payable on such securities, if any, are reflected as a liability on the Statements of Assets and Liabilities. A Fund is obligated to deliver the security at the market price at the time the short position is closed. The risk of loss on a short sale transaction is theoretically unlimited, because there is no limit to the cost of replacing the security sold short, whereas losses from purchase transactions cannot exceed the total amount invested. As of August 31, 2014, short positions were held by the Fund.

Master Agreements

The Fund is a party to International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) with counterparties that govern transactions in over-the-counter derivative and foreign exchange contracts entered into by the Fund and those counterparties. The ISDA Master Agreements contain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any

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American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

election to terminate early could be material to the financial statements. Since different types of forward and OTC financial derivative transactions have different mechanics and are sometimes traded out of different legal entities of particular counterparty organization, each type of transaction may be covered by a different Master Agreement, resulting in the need for multiple agreements with a single counterparty. As the Master Agreements are specific to unique operations of different asset types, they allow a Fund to net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty.

Master Repurchase Agreements (“Master Repo Agreements”) govern transactions between a Fund and select counterparties. The Master Repo Agreements maintain provisions for, among other things, initiation, income payments, events of default, and maintenance of collateral for Repurchase and Reverse Repurchase Agreements.

Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors surrounding the settlement of certain forward settling transactions, such as delayed delivery or sale-buyback financing transactions by and between a Fund and select counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral.

5. Financial Derivative Instruments

The Fund may utilize derivative instruments to enhance return, hedge risk, gain efficient exposure to an asset class or to manage liquidity. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.

Options Contracts

The Fund may write (1) call and put options on futures, swaps (“swaptions”), securities, commodities or currencies it owns or in which it may invest and (2) inflation-capped options. Writing put options tends to increase the Fund’s exposure to unfavorable movements of the underlying instrument in exchange for an upfront premium. Writing call options tends to decrease the Fund’s exposure to favorable movements of the underlying instrument in exchange for an upfront premium. When the Fund writes a call, put, or inflation-capped option, an amount equal to the premium received is recorded as a liability and subsequently marked to market to reflect the current value of the option written. The purpose of inflation-capped options is to protect the buyer from inflation erosion above a certain rate on a given notional exposure. A floor can be used to give downside protection to investments in inflation-linked products. These liabilities are reflected as written options outstanding on the Statement of Assets and Liabilities. Certain options may be written with premiums to be determined on a future date. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against amounts paid on the underlying futures, swap, security or currency transaction to determine the realized gain or loss when the underlying transaction is sold. The Fund as a writer of an option has no control over whether the underlying instrument may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the instrument underlying the written option. There is the risk the Fund may not be able to enter into a closing transaction because of an illiquid market.

The Fund may also purchase put and call options. Purchasing call options tends to increase the Fund’s exposure to favorable movements of the underlying instrument in exchange for paying an upfront premium. Purchasing put options tends to decrease the Fund’s exposure to unfavorable movements of the underlying instrument. The Fund pays a premium which is included on the Fund’s Statement of Assets and Liabilities as an investment and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options which expire are treated as realized losses. Certain options may be purchased with premiums to be determined on a future date. The premiums for these options are based upon implied volatility parameters at specified terms. The risk associated with purchasing put and call options is limited to the

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American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

premium paid. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying investment transaction to determine the realized gain or loss when the underlying transaction is sold.

Options

For the year ended August 31, 2014, the Fund purchased/sold options primarily for return enhancement, hedging and exposing cash to markets.

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

Average Purchased Option and Swaption Notional Amounts Outstanding
Fund	Year ended August 31, 2014
Flexible Bond	$	4,130,289
Average Written Option and Swaption Notional Amounts Outstanding
Fund	Year ended August 31, 2014
Flexible Bond	$	3,167,699

Straddle Options

The Fund may enter into differing forms of straddle options. A straddle is an investment strategy that uses combinations of options that allow a Fund to profit based on the future price movements of the underlying security, regardless of the direction of those movements. A written straddle involves simultaneously writing a call option and a put option on the same security with the same strike price and expiration date. The written straddle increases in value when the underlying security price has little volatility before the expiration date. A purchased straddle involves simultaneously purchasing a call option and a put option on the same security with the same strike price and expiration date. The purchased straddle increases in value when the underlying security price has high volatility, regardless of direction, before the expiration date.

Swap Agreements

The Fund may invest in swap agreements. Swap agreements are privately negotiated agreements between the Fund and a counterparty to exchange at specified, future intervals. The Fund may enter into credit default, cross-currency, interest rate and other forms of swap agreements to manage its exposure to credit, currency, interest rate, and inflation risk. In connection with these agreements, securities or cash may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency.

Swaps are marked to market daily based upon values from third party vendors or quotations from market makers to the extent available and the change in value, if any, is recorded as an unrealized gain or loss on the Statement of Assets and Liabilities. In the event that market quotes are not readily available and the swap cannot be valued pursuant to one of the valuation methods, the value of the swap will be determined in good faith by the Valuation Committee pursuant to procedures approved by the Board.

Payments received or made at the beginning of the measurement period are reflected as such on the Statement of Assets and Liabilities and represent payments made or received upon entering into the swap agreement to compensate for differences between the stated terms of the swap agreement and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). These upfront payments are recorded as realized gains or losses on the Statement of Operations upon termination or maturity of the swap. A liquidation payment received or made at the termination of the swap is recorded as realized gain or loss on the Statement of Operations. Net periodic payments received or paid by the Fund are included as part of realized gains or losses on the Statement of Operations.

59

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

Entering into these agreements involves, to varying degrees, elements of credit, market and documentation risk in excess of the amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of contractual terms in the agreements and that there may be unfavorable changes in interest rates.

The Fund’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from the counterparty over the contract’s remaining life, to the extent that amount is positive. The risk is mitigated by having a master netting arrangement between the Fund and the counterparty and by the posting of collateral to the Fund to cover the Fund’s exposure to the counterparty.

Credit Default Swap Agreements

Credit default swap agreements involve one party making a stream of payments (referred to as the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event of a default or other credit event for the referenced entity, obligation or index. As a seller of protection on credit default swap agreements, the Fund will generally receive from the buyer of protection a fixed rate of periodic premium throughout the term of the swap provided that there is no credit event. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure up to the notional amount of the swap.

If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. Recovery values are estimated by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specified valuation method, are used to calculate the settlement value.

Credit default swap agreements on corporate issues, sovereign issues of an emerging country or U.S. municipal issues involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer of protection’s right to choose the deliverable obligation with the lowest value following a credit event). The Fund may use credit default swaps on corporate issues, sovereign issues of an emerging country or U.S. municipal issues to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where the Fund owns or has exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood of a particular issuer’s default.

Credit default swap agreements on asset-backed securities involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. Unlike credit default swaps on corporate issues, sovereign issues of an emerging country or U.S. municipal issues, deliverable obligations in most instances would be limited to the specific referenced

60

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

obligation as performance for asset-backed securities can vary across deals. Prepayments, principal paydowns, and other writedown or loss events on the underlying mortgage loans will reduce the outstanding principal balance of the referenced obligation. These reductions may be temporary or permanent as defined under the terms of the swap agreement and the notional amount for the swap agreement will be adjusted by corresponding amounts. The Fund may use credit default swaps on asset-backed securities to provide a measure of protection against defaults of the referenced obligation that the Fund owns or to take an active long or short position with respect to the likelihood of a particular referenced obligation’s default that the Fund does not own.

Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a basket of credit instruments or exposures designed to be representative of some part of the credit market as a whole. These indices are made up of reference credits that are judged by a poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the indices may include, but are not limited to, investment grade securities, high yield securities, asset-backed securities, emerging markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and if there is a default, the credit event is settled based on that name’s weight in the index. The composition of the indices changes periodically, usually every six months, and for most indices, each name has an equal weight in the index. The Fund may use credit default swaps on credit indices to hedge a portfolio of credit default swaps or bonds, which is less expensive than it would be to buy many credit default swaps to achieve a similar effect. Credit default swaps on indices are benchmarks for protecting investors owning bonds against default, and traders use them to speculate on changes in credit quality.

Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues, sovereign issues of an emerging country or U.S. municipal issues as of period end are disclosed in the Notes to the Schedule of Investments and serve as an indicator of the current status of the payment/performance risk and represent a market participant view of the likelihood or risk of default for the underlying referent security to credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment/performance risk. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

The maximum potential amount of future payments (undiscounted) that the Fund as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of each individual credit default swap agreements outstanding as of August 31, 2014 for which the Fund is the seller of protection is disclosed in the Notes to the Schedule of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by the Fund for the same referenced entity or entities.

For the year ended August 31, 2014, the Fund entered into credit default swaps primarily for return enhancement hedging and exposing cash to markets.

The Fund’s credit default swap contract notional amounts outstanding fluctuate throughout the operating year as required to meet the strategic requirements. The following table illustrates the average quarterly volume of credit default swap contracts. For the purpose of this disclosure, the volume is measured by the notional amounts outstanding at each quarter end (in thousands).

61

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

Average Credit Default Swap Notional Amounts Outstanding
Fund	Year ended August 31, 2014
Flexible Bond	$	106,443

Interest Rate Swap Agreements

The Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. Because the Fund holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To help hedge against this risk and to maintain its ability to generate income at prevailing market rates, the Fund may enter into interest rate swap agreements. Interest rate swap agreements involve the exchange by the Fund with another party of their respective commitments to pay or receive interest with respect to the notional amount of principal.

For the year ended August 31, 2014, the Fund entered into interest rate swaps primarily for return enhancement, hedging and exposing cash to markets.

The Fund’s interest rate swap contract notional amounts outstanding fluctuate throughout the operating year as required to meet the strategic requirements. The following table illustrates the average quarterly volume of interest rate swap contracts. For the purpose of this disclosure, the volume is measured by the notional amounts outstanding at each quarter end (in thousands).

Average Interest Rate Swap Notional Amounts Outstanding
Fund	Year ended August 31, 2014
Flexible Bond	$	10,068,739

Over-the-Counter Swap Agreements

OTC financial derivative instruments such as forward currency contracts, options contracts, interest rate, and credit default swap agreements derive their value from underlying asset prices, indices, reference rates and other inputs or a combination of these factors. These instruments are valued using evaluated prices furnished by a pricing service selected by the Board. In certain cases, when a valuation is not readily available from a pricing service, the Fund’s Manager may provide a valuation. Depending on the instrument and the terms of the transaction, the value of the derivative instrument can be determined by a pricing service or Manager using a series of techniques, including simulation pricing models. The pricing models use inputs, such as issuer details, indices, spreads, interest rates, yield curves, dividends, and exchange rates, that are observed from actively quoted markets. Derivative instruments that use valuation techniques and inputs similar to those described above are normally categorized as Level 2 in the fair value hierarchy.

Total Return Swap Agreements

The Fund may enter into total return swaps in order to take a “long” or “short” position with respect to an underlying referenced asset. The Fund is subject to market price volatility of the underlying referenced asset. A total return swap involves commitments to pay interest in exchange for a market linked return based on a notional amount. To the extent that the total return of the security, group of securities or index underlying the transaction exceeds or falls short of the offsetting interest obligation, the Fund will receive a payment from or make a payment to the counterparty. During the period ended August 31, 2014, the Fund held total return swaps for hedging and non-hedging purposes.

For the year ended August 31, 2014, the Fund entered into total return swaps primarily for return enhancement, hedging and exposing cash to markets.

The Fund’s total return swap contract notional amounts outstanding fluctuate throughout the operating year as required to meet the strategic requirements. The following table illustrates the average quarterly

62

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

volume of total return swap contracts. For the purpose of this disclosure, the volume is measured by the notional amounts outstanding at each quarter end (in thousands).

Average Total Return Swap Notional Amounts Outstanding
Fund	Year ended August 31, 2014
Flexible Bond	$	2,214

Inflation Swap Agreements

An inflation swap involves the use of inflation derivatives (or inflation-indexed derivatives) to transfer inflation risk from one party to another. The derivatives used may be over-the-counter or exchange-traded derivatives. Inflation swaps frequently include real rate swaps, such as asset swaps of inflation-indexed bonds. Inflation swaps are simply a linear form of such derivatives. Real rate swaps consist of the nominal interest swap rate minus the corresponding inflation swap.

In an inflation swap, one party pays a fixed rate on a notional principal amount, while the other party pays a floating rate linked to an inflation index, such as the Consumer Price Index (CPI). The party paying the floating rate pays the inflation adjusted rate multiplied by the notional principal amount.

There are three main types of inflation swap. In a standard interbank inflation-linked swap, or zero-coupon inflation-linked swap, cash flow is exchanged on the maturity date. This swap pays out the exact value of the cumulative inflation for a fixed capital sum over a determined period.

In a year-on-year inflation-linked swap, inflation is used on an annual basis rather than a cumulative one. Typically, an inflation swap is priced on a zero-coupon basis, with payment exchanged upon maturity. One party pays the compound fixed rate, while the other pays the actual inflation rate for the term of the swap. In Europe, inflation swaps are typically paid on a year-on-year basis where the year-on-year rate of change of the price index is paid. In the United States, payment is more typically on a month-on-month basis, although the inflation rate used is still the year-on-year rate.

In an inflation-linked income swap two cash flows are exchanged, each of which follows the inflation index. One party pays a fixed inflation increase annually over the period of the contract. The other party pays the actual inflation over the period of the contract. The swap itself consists of a series of zero-coupon swaps. Other traded inflation derivatives include caps, floors, and straddles, which are usually priced against year-on-year swaps.

Forward Foreign Currency Contracts

The Fund may enter into forward foreign currency contracts to hedge the exchange rate risk on investment transactions or to hedge the value of 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 Fund bears the market risk that arises from changes in foreign exchange rates, and accordingly, the unrealized gain (loss) on these contracts is reflected in the accompanying financial statements. The Fund also bears the credit risk if the counterparty fails to perform under the contract.

For the year ended August 31, 2014, the Fund entered into foreign currency exchange contracts primarily for return enhancement and hedging.

The Fund’s foreign currency contract notional dollar values outstanding fluctuate throughout the operating year as required to meet strategic requirements. The following tables illustrate the average 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).

63

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

Average Forward Foreign Currency Notional Amount Outstanding - Purchased Contracts
Fund	Year ended August 31, 2014
Flexible Bond	$	79,791
Average Forward Foreign Currency Notional Amount Outstanding - Sold Contracts
Fund	Year ended August 31, 2014
Flexible Bond	$	178,825

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 year ended August 31, 2014, the Fund entered into future contracts primarily for return enhancement, hedging and exposing cash to markets.

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

Average Futures Contracts Outstanding
Fund	Year ended August 31, 2014
Flexible Bond		1,287

The following is a summary of the fair valuations of the Fund’s derivative instruments categorized by risk exposure⁽¹⁾⁽³⁾:

Fair values of financial instruments on the Statement of Assets and Liabilities as of August 31, 2014 (in thousands):

	Derivatives not accounted for as hedging instruments
	Credit contracts			Foreign exchange contracts			Interest rate contracts			Equity contracts			Total
Assets:
Unrealized appreciation of foreign currency contracts	$	—		$	3,708		$	—		$	—		$	3,708
Receivable for variation margin from open futures contracts(2)		—			—			—			—			—
Unrealized appreciation from swap agreements		190			—			5,975			—			6,165
Purchased options and swaptions outstanding		—			1,448			2,328			—			3,776
	$	190		$	5,156		$	8,303		$	—		$	13,649
Liabilities:
Unrealized depreciation of foreign currency contracts	$	—		$	(1,604	)	$	—		$	—		$	(1,604	)
Payable for variation margin from open futures contracts(2)		—			—			(1,736	)		—			(1,736	)
Unrealized depreciation from swap agreements		(855	)		—			(8,657	)		—			(9,512	)
Written options and swaptions outstanding		—			(974	)		(1,433	)		(55	)		(2,462	)
	$	(855	)	$	(2,578	)	$	(11,826	)	$	(55	)	$	(15,314	)

64

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

The effect of financial derivative instruments on the Statement of Operations for the year ended August 31, 2014 (in thousands):

	Derivatives not accounted for as hedging instruments
	Credit contracts			Foreign exchange contracts			Interest rate contracts			Equity contracts		Total
Realized gain (loss) of derivatives recognized as a result from operations:
Net realized gain (loss) from foreign currency transactions	$	—		$	(1,416	)	$	—		$	—	$	(1,416	)
Net realized gain (loss) from futures contracts		(3,842	)		(246	)		(174	)		—		(4,262	)
Net realized gain (loss) from swap agreements		(442	)		38			730			—		326
Net realized gain (loss) from option and swaption contracts		—			(210	)		(518	)		—		(728	)
	$	(4,284	)	$	(1,834	)	$	38		$	—	$	(6,080	)
Net change in unrealized appreciation or (depreciation) of derivatives recognized as a result from operations:
Change in net unrealized appreciation or (depreciation) from foreign currency contracts	$	—		$	3,121		$	—		$	—	$	3,121
Change in net unrealized appreciation or (depreciation) from futures contracts		(2,002	)		—			(15	)		—		(2,017	)
Change in net unrealized appreciation or (depreciation) from swap agreements		(574	)		—			(2,513	)		—		(3,087	)
Change in net unrealized appreciation or (depreciation) from option and swaption contracts		27			237			(391	)		4		(123	)
Change in net unrealized appreciation or (depreciation) from short sale		(113	)		—			—			—		(113	)
	$	(2,662	)	$	3,358		$	(2,919	)	$	4	$	(2,219	)

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

⁽²⁾ Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedule of Investment footnotes. Only current day’s variation margin in reported within the Statement of Assets and Liabilities.

⁽³⁾ 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 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 the 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.

65

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

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, it 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 and options, 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.

Credit and Counterparty Risks

The Fund will be exposed to credit risk on parties with whom it trades and will also bear the risk of settlement default. The Fund minimizes concentrations of credit risk by undertaking transactions with a large number of customers and counterparties on recognized and reputable exchanges. The Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty to a financial derivatives contract, repurchase agreement or a loan of portfolio securities, is unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings.

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 default. Financial assets, which potentially expose the Fund to counterparty risk, consist principally of cash due from counterparties and investments. Furthermore, to the extent that unpaid amounts owed to the Fund exceed a predetermined threshold agreed to with the counterparty, such counterparty shall advance collateral to the Fund in the form of cash or cash equivalents equal in value to the unpaid amount owed to the Fund. The Fund may invest such collateral in securities or other instruments and will typically pay interest to the counterparty on the collateral received. If the unpaid amount owed to the Fund subsequently falls, the Fund would be required to return to the counterparty all or a portion of the collateral previously advanced to the Fund.

All transactions in listed securities are settled/paid for upon delivery using approved counterparties. The risk of default is considered minimal, as delivery of securities sold is only made once the Fund has received payment. Payment is made on a purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.

The Fund is subject to various Master Agreements, which govern the terms of certain transactions with select counterparties. These Master Agreements reduce the counterparty risk associated with relevant transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Since different types of forward and OTC derivative transactions have different mechanics and are sometimes traded out of different legal entities of a particular counterparty organization, each type of transaction may be covered by a different Master Agreement and result in the need for multiple agreements with a single counterparty. Therefore, exposure cannot be netted and collateralized across all types of transactions. Exposures can only be netted across transactions governed under the same Master Agreement with the same legal entity.

66

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

Master Agreements can also help limit counterparty risk by specifying collateral posting arrangements at pre-arranged exposure levels. Under the Master Agreements, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant master agreement with a counterparty in a given account exceeds a specified threshold, which typically rangesfrom zero to $250,000 depending on the counterparty and the type of Master Agreement. United States Treasury bills and US dollar cash are generally the preferred forms of collateral, although other forms of AAA rated paper may be used. The Fund’s overall exposure to counterparty risk can change substantially within a short period, as it is affected by each transaction subject to the relevant Master Agreement. Master Repurchase Agreements (“Master Repo Agreements”) govern transactions between the Fund and select counterparties. The Master Repo Agreements maintain provisions for, among other things, initiation, income payments, events of default, and maintenance of collateral for Repurchase Agreements.

Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors surrounding the settlement of certain purchases and sales made on a delayed-delivery basis by and between the Fund and select counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral.

International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) govern OTC financial derivative transactions entered into by the Fund and those counterparties. The ISDA Master Agreements maintain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to early terminate could be material to the financial statements. The fair value of OTC financial derivative transactions net of collateral received in or pledged by counterparty as of period end is disclosed in the Notes to the Schedule of Investments.

Offsetting Assets and Liabilities

The Fund is party to enforceable master netting agreements between brokers and counterparties, such as ISDA, Master Repo Agreements and Master Forward Agreements which provide for the right to offset under certain circumstances. The Fund employs multiple money managers and counterparties and has elected not to offset qualifying financial and derivative instruments on the Statements of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, August 31, 2014 (in thousands).

Flexible Bond Fund

Offsetting of Financial Assets and Derivative Assets as of August 31, 2014

Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Assets Presented in the Statement of Assets and Liabilities
Swap Agreements	$	2,434		—	$	2,434
Purchased Options and SwaptionsOutstanding		3,776		—		3,776
Foreign Currency Contracts		3,708		—		3,708
	$	9,918	$	—	$	9,918

67

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

Offsetting of Financial Liabilities and Derivative Liabilities as of August 31, 2014

Description	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statement of Assets and Liabilities
Reverse Repurchase Agreement	$	(12,282	)	$	—	$	(12,282	)
Swap Agreements		(2,871	)		—		(2,871	)
Written Options and Swaptions Outstanding		(2,462	)		—		(2,462	)
Foreign Currency Contracts		(1,604	)		—		(1,604	)
	$	(19,219	)	$	—	$	(19,219	)

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of August 31, 2014

	Net amount of Assets Presented in the Statement of Assets and Liabilities			Gross Amounts Not Offset in the Statement of Assets and Liabilities					Net Amount
Counterparty				Financial Instruments		Cash Collateral Received
Bank of America, N.A.	$	(209	)	$	—	$	—		$	(209	)
Barclays Bank PLC		581			—		—			581
Barclays Capital		(9	)							(9	)
BNP Paribas, N.A.		(477	)		—		330			(147	)
CitiBank, N.A		2,021			—		(120	)		1,901
Credit Suisse International		643			—		36			607
Credit Suisse Securities USA LLC		61			—		—			61
Deutsche Bank AG New York		(122	)		—		8			(114	)
Deutsche Bank AG		(12,380	)		12,282		—			(98	)
Goldman Sachs Bank USA		290			—		—			290
Goldman Sachs Capital Market LP		(11	)		—		—			(11	)
Goldman Sachs International		389			—		(350	)		39
HSBC Bank PLC		58			—		—			58
HSBC Bank USA		(203	)		—		—			(203	)
JPMorgan Chase Bank, N.A.		(49	)		—		10			(39	)
Morgan Stanley & Co. Inc.		43			—		6			37
Morgan Stanley Capital		10			—		(10	)		—
Royal Bank of Scotland		(1	)		—		—			(1	)
UBS AG		64			—		—			64
	$	(9,301	)	$	12,282	$	(90	)	$	2,807

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. The tax years for the periods ended August 31, 2012, 2013, and 2014, remain subject to examination by the Internal Revenue Service. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expense” 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.

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

68

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

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

	Year ended August 31, 2014		Year ended August 31, 2013
Distributions paid from:
Ordinary income*:
Institutional Class	$	3,409	$	790
Y Class		766		650
Investor Class		834		1,237
A Class		600		673
C Class		123		249
Long-Term Capital Gain:
Institutional Class		405		—
Y Class		108		—
Investor Class		167		—
A Class		132		—
C Class		41		—
Total distributions paid	$	6,585	$	3,599

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

As of August 31, 2014, the components of distributable earnings (deficit) on a tax basis were as follows (in thousands):

Cost basis of investments for federal income tax purposes	$	317,528
Unrealized appreciation		28,128
Unrealized depreciation		(27,279	)
Net unrealized appreciation (depreciation)		849
Undistributed ordinary income		1,044
Accumulated capital gain (loss)		(6,171	)
Other temporary differences		1,445
Distributable earnings (deficit)	$	(2,833	)

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 to the tax deferral of losses from wash sales and the realization for tax purposes of unrealized gain (losses) on certain derivative instruments.

Due to inherent differences in the recognition of income and expenses and realized gains(losses) under U.S. GAAP and federal tax regulations, permanent differences between book and tax reporting have been identified and appropriately reclassed on the Statement of Assets and Liabilities.

Accordingly, the following amounts represent current year permanent differences derived from foreign currency, paydowns, swap income, and distributions that have been reclassified as of August 31, 2014 (in thousands):

Paid-in-capital	$	—
Undistributed net investment income		(2,247	)
Accumulated net realized gain(loss)		2,247
Unrealized appreciation or (depreciation) of investments, futures contracts, option and swaption contracts and foreign currency translations		—

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

69

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

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 registered investment company (“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.

The Fund has $2,704 short-term and $3,467 long term post RIC MOD capital loss carryforwards as of August 31, 2014 (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 August 31, 2014 were (in thousands)

	Purchases		Sales
Securities	$	1,070,539	$	992,662
U.S. Treasury Obligations		608,533		550,823

9. Option Contracts Written

The premium amount and number of option contracts written during the year ended August 31, 2014 were as follows (shown in thousands):

	Number of Contracts			Notional Amount			Amount of Premiums
Outstanding at August 31, 2013		(3,833,566	)	$	(3,834,428	)	$	(888	)
Options written		(2,491,551	)		(2,578,517	)		(6,688	)
Options expired		393,958			400,393			1,964
Options exercised		12,700			12,700			62
Options closed		3,151,125			3,159,075			1,775
Outstanding at August 31, 2014		(2,768,750	)	$	(2,840,777	)	$	(3,775	)

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 August 31, 2014

	Institutional Class						Y Class						Investor Class
Flexible Bond Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		6,045		$	62,069			2,678		$	27,490			1,370		$	14,002
Reinvestment of dividends		368			3,757			81			827			96			979
Shares redeemed		(1,719	)		(17,671	)		(2,978	)		(30,607	)		(4,588	)		(46,957	)
Net increase (decrease) in shares outstanding		4,694		$	48,155			(219	)	$	(2,290	)		(3,122	)	$	(31,976	)

70

American Beacon Flexible Bond Fund^SM

Notes to Financial Statements

August 31, 2014

	A Class						C Class
Flexible Bond Fund	Shares			Amount			Shares			Amount
Shares sold		900		$	9,161			202		$	2,048
Reinvestment of dividends		56			565			14			139
Shares redeemed		(2,384	)		(24,266	)		(639	)		(6,482	)
Net (decrease) in shares outstanding		(1,428	)	$	(14,540	)		(423	)	$	(4,295	)

For the Year ended August 31, 2013

	Institutional Class						Y Class						Investor Class
	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		12,251		$	127,889			3,671		$	38,660			5,973		$	63,335
Reinvestment of dividends		73			763			58			607			105			1,102
Shares redeemed		(1,108	)		(11,726	)		(1,076	)		(11,315	)		(2,611	)		(27,311	)
Net increase in shares outstanding		11,216		$	116,926			2,653		$	27,952			3,467		$	37,126

	A Class						C Class
	Shares			Amount			Shares			Amount
Shares sold		3,693		$	38,967			1,113		$	11,697
Reinvestment of dividends		48			500			16			168
Shares redeemed		(660	)		(6,891	)		(155	)		(1,605	)
Net increase in shares outstanding		3,081		$	32,576			974		$	10,260

71

American Beacon Flexible Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class												Y Class
										July 5 to Aug. 31, 2011												July 5 to Aug. 31, 2011
	Year Ended August 31,												Year Ended August 31,
	2014			2013			2012						2014			2013			2012
Net asset value, beginning of period	$	10.21		$	10.48		$	10.05		$	10.00		$	10.22		$	10.51		$	10.05		$	10.00
Income from investment operations:
Net investment income		0.21			0.34			0.02			0.02			0.18			0.22			0.10			0.02
Net gains (losses) from investments (both realized and unrealized)		0.16			(0.24	)		0.59			0.05			0.17			(0.15	)		0.53			0.05
Total income (loss) from investment operations		0.37			0.10			0.61			0.07			0.35			0.07			0.63			0.07
Less distributions:
Dividends from net investment income		(0.18	)		(0.23	)		(0.18	)		(0.02	)		(0.17	)		(0.22	)		(0.17	)		(0.02	)
Distributions from net realized gains		(0.07	)		(0.14	)		—			—			(0.07	)		(0.14	)		—			—
Return of capital		—			—			—			0.00	A		—			—			—			—
Total distributions		(0.25	)		(0.37	)		(0.18	)		(0.02	)		(0.24	)		(0.36	)		(0.17	)		(0.02	)
Net asset value, end of period	$	10.33		$	10.21		$	10 .48		$	10.05		$	10.33		$	10.22		$	10.51		$	10.05
Total return B		3.70	%		0.83	%		6.34	%		0.70	%C		3.51	%		0.58	%		6.20	%		0.69	%C
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	177,201		$	127,322		$	13,095		$	28,105		$	38,034		$	39,898		$	13,132		$	144
Ratios to average net assets:
Expenses, before reimbursements		1.24	%		1.22	%		1.42	%		3.58	%D		1.29	%		1.26	%		1.49	%		18.27	%D
Expenses, net of reimbursements		0.90	%		0.90	%		0.90	%		—	%D		0.99	%		0.99	%		0.99	%		—	%D
Net investment income (loss), before reimbursements		1.61	%		0.84	%		0.44	%		(2.37	)%D		1.51	%		0.91	%		0.54	%		(17.04	)%D
Net investment income (loss), net of reimbursements		1.94	%		1.15	%		0.96	%		1.20	%D		1.81	%		1.19	%		1.04	%		1.23	%D
Portfolio turnover rate		387	%		112	%		88	%		44	%E		387	%		112	%		88	%		44	%E

^A Amount represents 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 Not annualized.

^D Annualized.

^E Portfolio turnover rate is for the period from July 5, 2011, the inception date, through August 31, 2011.

72

American Beacon Flexible Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class												A Class												C Class
									July 5 to												July 5 to												July 5 to
Year Ended August 31,									Aug. 31,			Year Ended August 31,									Aug. 31,			Year Ended August 31,									Aug. 31,
2014			2013			2012			2011			2014			2013			2012			2011			2014			2013			2012			2011
$	10.21		$	10.51		$	10.07		$	10.00		$	10.16		$	10 .49		$	10.06		$	10.00		$	10.11		$	10.49		$	10.09		$	10.00
	0.02			0.18			0.09			0.02			0.10			0.21			0.07			0.02			0.02			0.14			0.04			0.02
	0.30			(0.13	)		0.52			0.07			0.21			(0.18	)		0.51			0.06			0.22			(0.19	)		0.48			0.09
	0.32			0.05			0.61			0.09			0.31			0.03			0.58			0.08			0.24			(0.05	)		0.52			0.11
	(0.15	)		(0.21	)		(0.17	)		(0.02	)		(0.13	)		(0.22	)		(0.15	)		(0.02	)		(0.06	)		(0.19	)		(0.12	)		(0.02	)
	(0.07	)		(0.14	)		—			—			(0.07	)		(0.14	)		—			—			(0.07	)		(0.14	)		—			—
	—			—			—			—			—			—			—			—			—			—			—			—
	(0.22	)		(0.35	)		(0.17	)		(0.02	)		(0.20	)		(0.36	)		(0.15	)		(0.02	)		(0.13	)		(0.33	)		(0.12	)		(0.02)
$	10.31		$	10.21		$	10.51		$	10.07		$	10.27		$	10.16		$	10.49		$	10.06		$	10.22		$	10.11		$	10.49		$	10.09
	3.13	%		0.38	%		5.99	%		0.90	%C		3.12	%		0.16	%		5.70	%		0.80	%C		2.37	%		(0.54	)%		5.15	%		1.11	%C
$	24,411		$	56,015		$	21,245		$	277		$	27,146		$	41,376		$	10,387		$	2,064		$	11,127		$	15,292		$	5,641		$	380
	1.43	%		1.54	%		1.76	%		8.22	%D		1.68	%		1.67	%		1.93	%		4.49	%D		2.43	%		2.43	%		2.74	%		9.66	%D
	1.27	%		1.27	%		1.27	%		—	%D		1.38	%		1.39	%		1.39	%		—	%D		2.13	%		2.14	%		2.14	%		—	%D
	1.34	%		0.65	%		0.30	%		(6.93	)%D		1.10	%		0.50	%		0.05	%		(3.25	)%D		0.35	%		(0.24	)%		(0.73	)%		(8.48	)%D
	1.50	%		0.92	%		0.79	%		1.29	%D		1.40	%		0.79	%		0.59	%		1.24	%D		0.66	%		0.04	%		(0.13	)%		1.18	%D
	387	%		112	%		88	%		44	%E		387	%		112	%		88	%		44	%E		387	%		112	%		88	%		44	%E

73

American Beacon Funds

Privacy Policy

August 31, 2014 (Unaudited)

Privacy Policy

The American Beacon Funds recognizes and respects 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 August 31, 2014. The information and distributions reported herein may differ from information and distribution taxable to the shareholders for the calendar year ended December 31, 2014.

The Fund designated the following items with regard to distributions paid during the fiscal year ended August 31, 2014. 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		0	%
Qualified Dividend Income		0	%
Long Term Capital Gain Distributions	$	852,001
Short-Term Capital Gain Distributions	$	263,590

Shareholders will receive notification in January 2015 of the applicable tax information necessary to prepare their 2014 income tax returns.

74

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

At in-person meetings held on May 15, 2014 and June 5, 2014 (collectively, the “Meetings”), the Board of Trustees (“Board”) considered and then, at its June 5 meeting, approved: (1) the renewal of the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Beacon Trust”) and American Beacon Select Funds (“Select Trust”) on behalf of each of their series that had been operational for at least one year (collectively, the “Funds”); and (2) the renewal of the investment advisory agreements (each an “Investment Advisory Agreement”) among the Manager, each subadvisor and, as applicable, the Beacon Trust, other than the Investment Advisory Agreements with subadvisors with respect to which the Board approved a new Investment Advisory Agreement within the past year (each a “subadvisor”). The Management Agreement and the Investment Advisory Agreements are collectively referred to herein as the “Agreements.” In preparation for the Board to consider the renewal of these Agreements, the Board undertook steps to gather and consider information furnished by the Manager, the subadvisors, Lipper, Inc. (“Lipper”), Morningstar, Inc. (“Morningstar”), Bobroff Consulting, Inc. and Callan Associates, Inc. (“Callan”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and each subadvisor.

In advance of the Meetings, the Board’s Investment Committee coordinated the production of information from Lipper and Morningstar regarding the performance, fees and expenses of the Funds as well as information from the Manager and the subadvisors. At the Meetings, the Board considered the information provided. Further, the Board took into consideration information furnished for the Board’s review and consideration throughout the year at regular meetings of the Board and its committees, 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 on behalf of the Board included, among other information, the following materials. References herein to the “firm” refer to the Manager and/or each applicable subadvisor.

• comparisons of the performance of an appropriate share class of each Fund to comparable investment companies and appropriate benchmark indices, including peer group averages and performance analyses provided by Lipper and Morningstar, and to the performance of any similar accounts managed by the firm;

• for Funds having multiple firms managing assets, information regarding the performance of the individual firms with respect to their allocated portions of a Fund’s portfolio, and the performance of certain relevant benchmarks and other similar accounts managed by the firm;

• comparisons of each Fund’s management and subadvisory fee rates and expense ratio with those of comparable mutual funds, including peer group averages and fee and expense analyses provided by Lipper and Morningstar, and the advisory fee rates charged to other clients for which similar services are provided;

• a description of any applicable fee waivers and/or expense reimbursements in place for each Fund during the past year, and any proposed changes to the expense caps;

• the Manager’s profitability with respect to the services that it provided to each Fund;

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

• information regarding the securities lending, cash management, administrative and accounting-related services that the Manager provides to certain Funds and the fees that the Manager receives for such services, including Callan’s review of the Funds’ securities lending program; and

• information regarding a firm’s financial condition, the personnel who are or will be assigned primary responsibility for managing the Funds, staffing levels, portfolio managers’ compensation, disaster recovery plans, insurance coverage, material pending litigation, code of ethics, compliance matters, trading activities, and actual or potential conflicts of interest that the firm experiences, or anticipates that it will experience, in providing services to the Funds.

The Board considered that the Manager provides management and administrative services to the Funds pursuant to separate agreements. The Board noted, in this regard, that many mutual funds have a single contract governing both types of services, and observed that the actual management fee rates provided by Lipper for peer group funds reflect the combined advisory and administrative expenses, reduced by any fee waivers and/or reimbursements.

Certain firms may not have been able to, or opted not to, provide information in response to certain information requests, in which case the Board conducted its evaluation of those firms based on information that was provided. For each Fund with more than one class of shares, the class of shares used for comparative performance purposes was the share class with the lowest expenses available for purchase by the general public, which, in most cases, was the Institutional Class. For the American Beacon Holland Large Cap Growth Fund, the comparison was made using the Investor Class of shares due to the short period of time that its Institutional Class of shares has been in existence. 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 certain factors the Board considered in connection with its renewal and approval 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

75

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

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 Meetings, 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) 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 clients); (5) the extent to which economies of scale have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect these economies of scale for the benefit of Fund investors; 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 staffing 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) as well as the Fund’s Morningstar rating. 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 certain Funds. 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 Manager represented that 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 share 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 and, in some instances, 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 certain Funds. In considering the management fees for overseeing the securities lending program, the Board reviewed the analysis of the securities lending program prepared by Callan. The Board also noted that certain share classes of the Funds maintain higher expense ratios in order to compensate third-party distributors.

In analyzing the fee rates charged by 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 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

76

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

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, certain subadvisors have agreed to take into account assets of American Airlines Group 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 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 Board noted that certain subadvisors benefit from soft dollar arrangements for third party and proprietary research.

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 subadvisors reimburse the Manager for certain costs relating to distribution activities for the Funds, as well as representations by all such subadvisors that they would not reduce their fee rates in lieu of providing such reimbursements. 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 and Lipper performance group, with the 1^st Quintile representing the top twenty percent of the universe or group based on performance and the 5^th Quintile representing the bottom twenty percent of the universe or group based on performance. 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 and Lipper expense group, with the 1^st Quintile representing the top twenty percent of the universe or group based on lowest total expense and the 5th Quintile representing the bottom twenty percent of the universe or group based on highest total expense. 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. For all Funds, other than for the American Beacon Money Market Select Fund and American Beacon U.S. Government Money Market Select Fund for which information was not available, 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 Flexible Bond Fund

In considering the renewal of the Management Agreement for the American Beacon Flexible Bond Fund, the Trustees considered the following additional factors:

Lipper Total Expense Analysis and Morningstar Fee Level Ranking

77

Disclosure Regarding the Board of Trustees’ Approval of the Management

Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Compared to Lipper Expense Universe	3rd Quintile
Compared to Lipper Expense Group	4th Quintile
Morningstar Fee Level Ranking – Institutional Class	Average Expense Ratio

Lipper Fund Performance Analysis (one-year period ended March 31, 2014)

Compared to Lipper Performance Universe	5th Quintile
Compared to Lipper Performance Group	5th Quintile

In considering the renewal of the Investment Advisory Agreements with Brandywine Global Investment Management, LLC (“Brandywine”), GAM International Management LTD. (“GAM”) and Pacific Investment Management Company, LLC (“PIMCO”), the Trustees considered the following additional factors:

Subadvisor Performance (compared to Lipper Performance Universe for period indicated, ending March 31, 2014)

Brandywine	1 Year	4th Quintile
GAM	1 Year	2nd Quintile
PIMCO	1 Year	5th Quintile

(1) Information provided by each subadvisor regarding fee rates charged for managing accounts in the same strategy as the subadvisor manages its allocation of the Fund; and (2) explanations from AmBeacon and the subadvisors regarding the subadvisors’ underperformance relative to their benchmarks and comparable accounts, as applicable; and (3) 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 and its performance record since inception.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisors under the Management and Investment Advisory Agreements are fair and reasonable; (2) the Fund’s performance since inception has met the Manager’s performance objectives; (3) determined that the American Beacon Flexible Bond Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund; and (4) approved the renewal of the Management and Investment Advisory Agreements with respect to the American Beacon Flexible Bond Fund.

78

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 thirty-two 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** (56)	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** (77)	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 (70)	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 (53)	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 (60)	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 (71)	Trustee since 2004 Chairman 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).
Barbara J. McKenna, CFA (51)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present).
R. Gerald Turner (68) 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).

79

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
Gene L. Needles, Jr. (59)	President since 2009 Executive Vice President since 2009	President, CEO and Director (2009-Present), American Beacon Advisors, Inc.; 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 (2009-2012), American Beacon Mileage Funds; President (2008-2009), Touchstone Investments; President (2003-2007), CEO (2004-2007), AIM Distributors.
Rosemary K. Behan (55)	VP, Secretary and Chief Legal Officer since 2006	General Counsel, 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 (54)	VP since 2004	Vice President, Director of Sales, American Beacon Advisors, Inc. (2004-Present).
Wyatt Crumpler (48)	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 (44)	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 (60)	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 (53)	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 (50)	VP since 2010	Vice President, Enterprise Services (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.
Jeffrey K. Ringdahl (39)	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 (51)	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	Vice President, Fixed Income Investments (2011-Present) and Senior Portfolio Manager, Fixed Income Investments (1999-2011), American Beacon Advisors, Inc.
Sonia L. Bates (57)	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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81

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, and Investor Classes Call (800) 658-5811	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 made available on www.americanbeaconfunds.com, the Funds’ website approximately sixty days after the end of each quarter.	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, which 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 August 31 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 Flexible Bond Fund and American Beacon Funds are service marks of American Beacon Advisors, Inc.

AR 8/14

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	2-13
Schedules of Investments:
The London Company Income Equity Fund	17
Zebra Global Equity Fund	19
Zebra Small Cap Equity Fund	23
SiM High Yield Opportunities Fund	27
Financial Statements	32
Notes to the Financial Statements	37
Financial Highlights	61
Additional Information	Back Cover

Zebra Global Equity and Zebra Small Cap Equity Funds

The Funds 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. At times, certain securities may have limited marketability and may be difficult to sell. The Zebra Small Cap Equity Fund invests in small and/or mid-sized companies, which involves additional risks such as limited liquidity and greater volatility than larger companies. The Zebra Small Cap Equity Fund may participate in a securities lending program. The Zebra Global Equity Fund’s investments in equity securities may include large and mid-cap U.S. and non-U.S. common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, ADRs and MLPs.

The London Company Income Equity Fund

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. 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 fixed-income securities entails interest rate risk, which is the risk that fixed-income securities will decrease in value with increases in market interest rates. Because the Fund may invest in fewer issues than a more diversified portfolio, the fluctuating value of a single holding may have a greater impact on the value of the Fund. Investing in dividend-paying stocks entails dividend risk, which is the risk that a stock may not experience the same level of earnings growth or capital appreciation as non-dividend paying stocks.

SiM High Yield Opportunities Fund

This Fund typically invests in a variety of domestic and foreign high-yield, high risk securities. 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. These risks are enhanced through the use of derivative securities, foreign and emerging markets securities.

Please see the prospectus for a more complete discussion of the risks of investing in these Funds. There can be no assurances that the investment objectives of the Funds 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 August 31, 2014

Dear Shareholders,   The global markets have continued the process of building on the early signs of the economic recovery over the past year. Both in the U.S. and abroad, government and political leaders have continued to be mindful of the fragile nature of the recovery and have proved willing and able to provide the necessary monetary stimulus to keep their economies on track. The Eurozone finally broke out of its recession during the reporting period and as seen in the U.S., the European Central Bank quickly reacted to the first signs of the recovery faltering by announcing their own form of quantitative easing in June 2014.

We believe it takes an experienced investor to navigate the complexities of an ever-changing global economy. That is just one reason that we at American Beacon Advisors believe in actively managed funds and work diligently to bring you the most respected asset managers as sub-advisors.

For the 12-month period ended August 31, 2014:

The American Beacon The London Company Income Equity Fund (Investor Class) returned 22.83%.

The American Beacon Zebra Global Equity Fund (Investor Class) returned 18.71%.

The American Beacon Zebra Small Cap Equity Fund (Investor Class) returned 16.27%.

The American Beacon SiM High Yield Opportunities Fund (Investor Class) returned 11.08%.

Thank you for your continued interest in American Beacon Funds. We are pleased to have a broad range of products that cover the global equity and fixed income markets. 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

August 31, 2014 (Unaudited)

The U.S. equity markets posted strong results for the one-year period ending August 31, 2014 despite weakness during the early months of the period. The Federal Reserve Bank’s (the “Fed”) decision in September 2013 to not taper its quantitative easing program reflected lowered U.S. economic growth estimates for 2013 and 2014. That news, combined with the 16-day government shutdown in October 2013 and political rancor surrounding the raising of the debt ceiling provided a minor setback in the stock markets. In December, however, the Fed announced it would reduce the rate of its asset purchases beginning in January 2014 and the equity markets broadly rallied in response.

In the early months of 2014, unusually cold weather in the Midwest and East played a significant role in reducing revenues and increasing costs for many U.S. companies. This created a unique dynamic in the marketplace as certain sectors, such as Utilities, benefitted from cold weather while others, such as Auto and Retail, suffered as consumers stayed indoors. These trends proved to be short-lived as consumer spending picked up during late March and April.

Heading into the spring, investors received a variety of signals that the U.S. economy was picking up steam for the second half of 2014. Labor market data was especially strong with payroll statistics reaching their most favorable levels since the late 1990s. The Manufacturing sector remained robust, while a better job market and rising consumer spending appeared to drive healthy growth in the much larger Service sector. The Housing sector demonstrated signs of improvement as homebuyers reconciled themselves to somewhat higher home prices and mortgage rates than previous years.

Improving economic indicators, particularly falling unemployment and rising consumer prices, spurred continued debate among Fed officials as to the next phase of the quantitative easing program. In July, new Fed Chairwoman Janet Yellen indicated that an abundance of part-time workers and long-term unemployed suggested that the broader market still had room to grow before ending the program.

Overall for the one-year period ending August 31, 2014, the market rally was broad as the Russell 3000 Value Index gained 23.9% while the Russell 3000 Growth Index increased by 25.6%. Top sectors included Healthcare (up 31.8%) and Technology (up 33.4%) while Consumer Cyclical (up 19.4%) and Consumer Defensive (up 18.2%) lagged the overall market. For the period, the S&P 500 Index posted a 25.3% increase.

2

American Beacon The London Company Income Equity Fund^SM

Performance Overview

August 31, 2014 (Unaudited)

The Investor Class of the American Beacon The London Company Income Equity Fund (the “Fund”) returned 22.83% for the twelve-month period ended August 31, 2014, trailing the Russell 1000 Value Index (the “Index”) return of 24.43%.

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

For the Period from 5/29/12 through 8/31/14

Total Returns for the Period ended 8/31/14

	1 Year			2 Years			Since Incep. (5/29/12)			Value of $10,000 5/29/12- 8/31/14
Institutional Class (1,2,4)		23.13	%		19.28	%		19.62	%	$	14,983
Y Class (1,2,4)		23.05	%		19.19	%		19.53	%	$	14,960
Investor Class(1,2,4)		22.83	%		18.92	%		19.25	%	$	14,879
A Class with sales charge(1,2,4)		15.57	%		15.21	%		15.94	%	$	13,964
A Class without sales charge(1,2,4)		22.58	%		18.67	%		19.02	%	$	14,816
C Class with sales charge(1,2,4)		20.69	%		17.81	%		18.16	%	$	14,574
C Class without sales charge(1,2,4)		21.69	%		17.81	%		18.16	%	$	14,574
Russell 1000 Value Index (3)		24.43	%		24.02	%		24.32	%	$	16,347

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 calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of

the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. A Class shares have a maximum sales charge of 5.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

2. A portion of the fees charged to each Class of the Fund was waived since inception. Performance prior to waiving fees was lower than the actual returns shown since inception.

3. The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000^® Value Index and Russell 1000 Index are registered trademarks of the Frank Russell Company. One cannot directly invest in an index.

4. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, and C Class shares was 1.14%, 1.10%, 1.55%, 1.50%, and 2.17%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund’s underperformance relative to the benchmark was primarily driven by Fund expenses, as weak security selection was moderated by positive sector allocation. During the year, returns were positive across all sectors for both the Fund and the Index. Notably, all sectors generated double-digit returns as well.

Outside of fund expenses, weak stock selection within the Materials, Information Technology and Consumer Discretionary sectors was the largest detractor from relative returns. Within the Materials sector, the Fund’s position in Albemarle (up 3.0%) detracted from relative returns. Paychex (up 11.3%), International Business Machines (up 7.7%) and Cisco (up 9.7%) significantly underperformed the overall Information Technology sector, which gained 40.1% over the same period. This underperformance was partially offset by the Fund’s holdings of Intel (up 61.6%) and Corning (up 49.6%). Carnival Corporation detracted from performance for the Consumer Discretionary sector, returning only 6.5% for the year.

Given the Fund’s portfolio construction approach and high conviction weightings across securities, the Fund’s over- or underweight positioning relative to the economic sectors will

3

American Beacon The London Company Income Equity Fund^SM

Performance Overview

August 31, 2014 (Unaudited)

typically have less of an impact on relative returns. However, the Fund benefitted from its sector positioning during the year. The Fund maintained an overweight to the Information Technology and Materials sectors, the two best performing sectors in the Index. This benefit was partially offset by an overweight allocation in Consumer Staples, which trailed the overall Index return.

The sub-advisor’s investment process focuses on downside protection, current income and total return appreciation.

Top Ten Holdings (% Net Assets)

Kinder Morgan Management LLC		4.7
General Dynamics Corp.		4.1
Wells Fargo & Co.		4.0
Lorillard, Inc.		4.0
Hasbro, Inc.		3.7
Intel Corp.		3.7
Altria Group, Inc.		3.5
BlackRock, Inc.		3.5
Albemarle Corp.		3.4
Corning, Inc.		3.4
Total Fund Holdings	37

Sector Allocation (% Equities)

Financials	18.4
Information Technology	16.3
Consumer Staples	13.2
Consumer Discretionary	9.5
Utilities	9.5
Health Care	8.9
Materials	8.5
Energy	5.8
Telecommunication Services	5.6
Industrials	4.3

4

Global Equity Market Overview

August 31, 2014 (Unaudited)

Global equity markets continued their steady ascent in the reporting period as the global economy shifted toward recovery. The rally continued through the fourth quarter of 2013 with investor sentiment lifted by the improving and global economic outlook and the U.S. Federal Reserve’s announcement to reduce the rate of its asset purchases beginning in January 2014. The U.S. market rally paused in February and March of 2014 as the positive flow of economic data was reversed due to weather-affected January figures. A focus on the potential for deflation in Europe, questions about Japan’s ability to reignite their economy and the weather-plagued U.S. economy all contributed to mixed returns to start 2014. Toward the end of the reporting period however, many equity markets around the world reached fresh highs thanks to an improving global economic outlook and the still very accommodative monetary policy in the U.S. and abroad.

The MSCI World Index rose by over 21% during the 12 months ended August 31, 2014. Of the four largest geographic markets that make up MSCI World (U.S., Europe, Japan and U.K.), Japan has been the laggard over the past year. The U.S. outperformed as the U.S. economy’s strength became more apparent. For the full 12-month period there was not a sizeable performance difference between global large- and small-cap stocks. However, over the second half of the period (March - August) small underperformed large by approximately 4%.

After six quarters of negative growth, the Eurozone economy broke out of its longest ever recession in September 2013. The economic expansion continued in the fourth quarter despite geopolitical events such as the crisis in Ukraine. The low level of Eurozone inflation proved to be a growing concern during the first quarter of 2014. However, the European Central Bank (ECB) proved ready to do its part by announcing monetary easing measures including the announcement of targeted long-term refinancing operations as well as pushing the deposit rate below zero. Through the end of the reporting period, inflation continued to be fragile with prices only increasing by 0.5% in June despite the ECB’s policy changes. The MSCI EAFE Index increased by 16.4% during the 12-month reporting period.

Emerging markets reversed the losses of early 2013 as fears of a market crisis faded, and the Chinese economy showed signs of stabilization as manufacturing and trade figures improved. These early gains by China proved not to be longer term trends as falling exports and lower retail figures again raised concern in the early months of 2014. In response, the Chinese government introduced a mini-stimulus plan in the second quarter focused on reinvigorating the housing market and railway infrastructure. The plan set the stage for a modest turnaround, and the situation continues to evolve as the Chinese government stood ready to provide the necessary policy adjustments to support the world’s second largest economy. During the 12-month period ending August 31, 2014, the MSCI Emerging Markets Index rose by 20%.

In other global markets, the global trend of government monetary policy was also seen in Japan and India. Geopolitical events in the Middle East, particularly Iraq, proved to have a ripple effect as instability in the oil markets benefitted producers in both Russia and Brazil. The Japanese government continued its efforts to stimulate its struggling equity markets by unveiling in June a second set of economic reforms. The latest reforms focused on cutting corporate taxes and reversing existing regulations in areas such as employment rules, agriculture and health care.

5

American Beacon Zebra Global Equity Fund^SM

Performance Overview

August 31, 2014 (Unaudited)

The Investor Class of the American Beacon Zebra Global Equity Fund (the “Fund”) returned 18.71% for the twelve-month period ended August 31, 2014, underperforming the MSCI World Index (the “Index”) return of 21.10% for the same period.

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

for the Period from 6/1/10 through 8/31/14

Total Returns for the Period ended 8/31/14

	1 Year			3 Years			Since Incep. (6/1/10)			Value of $10,000 6/1/10- 8/31/14
Institutional Class (1,3,5)		19.17	%		15.54	%		14.98	%	$	18,099
Y Class (1,3,5)		18.90	%		15.37	%		14.87	%	$	18,020
Investor Class(1,3,5)		18.71	%		15.11	%		14.56	%	$	17,815
A Class with sales charge(1,3,5)		11.73	%		12.72	%		12.83	%	$	16,704
A Class without sales charge (1,3,5)		18.53	%		14.96	%		14.42	%	$	17,723
C Class with sales charge (1,2,3,5)		16.67	%		14.11	%		13.63	%	$	17,212
C Class without sales charge (1,2,3,5)		17.67	%		14.11	%		13.63	%	$	17,212
MSCI World Index (4)		21.10	%		15.48	%		14.65	%	$	17,887
Russell 1000/MSCI World Linked Index (4)		21.10	%		17.69	%		16.40	%	$	19,071
Russell 1000 Index (4)		25.36	%		20.80	%		18.05	%	$	20,248

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 calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please 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 Class shares have a maximum sales charge of 5.75%.

2. Fund performance represents the total returns achieved by the Investor Class from 6/1/10 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 6/1/10. The maximum contingent deferred sales charge is 1.00% for shares redeemed within one year of the date of purchase.

3. A portion of the fees charged to each Class of the Fund was waived since inception. Performance prior to waiving fees was lower than the actual returns shown since inception.

4. Prior to December 31, 2012, the Fund’s primary benchmark was the Russell 1000 Index, an index that measures the performance of the large-cap segment of the U.S. equity universe. The Fund changed its primary benchmark to the MSCI World Index, because the Fund changed its name and investment strategy. The Russell 1000/MSCI World Linked Index represents returns of the Russell 1000 Index up to December 31, 2012, and the MSCI World Index thereafter. The Russell 1000 Index is a registered trademark of the Frank Russell Company. The MSCI World Index is designed to measure the equity market performance of large- and mid-capitalization companies across 24 developed markets countries. The MSCI^® information contained herein: (1) is provided “as is”, (2) is proprietary to MSCI and/or its content providers, (3) may not be used to create any financial instruments or products or any indexes and (4) may not be copied or distributed without MSCI’s express written consent. MSCI disclaims all warranties with respect to the information. Neither MSCI nor its content providers are responsible for any damages or losses arising from any use of this information. One cannot directly invest in an index.

5. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A and C Class shares was 2.57%, 2.59%, 2.91%, 2.84%, and 3.65% respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund underperformed the Index from a stock selection standpoint as holdings in the Consumer Discretionary, Information Technology and Consumer Staples sectors detracted from performance. In the Consumer Discretionary sector, LQK (down 3.4%), LVMH Moet Hennessy Louis Vuitton (up 1.2%) and Mattel (down 11.8%) detracted from the Fund’s relative returns. Not owning Apple, Facebook or Google, which were up 50.6%, 81.3% and 37.3%, respectively, in the Index, negatively impacted performance in the Information Technology sector. In the Consumer Staples sector, Wesfarmers (down 76.9%) and Japan Tobacco (down 12.0%) were the largest detractors. The aforementioned poor performance was somewhat offset by good stock selection in the Energy and

6

American Beacon Zebra Global Equity Fund^SM

Performance Overview

August 31, 2014 (Unaudited)

Financials sectors. Continental Resources (up 73.8%), Phillips 66 (up 57.1%) and Suncor (up 23.7%) added the most value relative to the Index in the Energy sector. In the Financials sector, Moody’s (up 48.9%), Natixis (up 62.0%) and Prudential (up 36.9%) were the largest contributors.

From a country allocation perspective, Italy and Japan were the largest contributors to performance. The Fund’s allocation to France, and its lack of exposure to Denmark, detracted relative value.

The sub-advisor continues to focus on uncovering opportunities by investing in a portfolio of securities that are generally less popular with investors but nevertheless have strong fundamental characteristics. At the same time, the portfolio will be underweight stocks that are heavily followed but have weak fundamentals. This contrarian style has tended to result in a portfolio with very good risk-adjusted returns over time. This emphasis on companies with good fundamentals can be observed through traditional measures of value. For example, the portfolio consistently exhibits lower price-earnings ratios (both forward and trailing) than the Index.

Although the predicted beta for the portfolio remains relatively low (0.92 as of August 29, 2014), the realized beta has been somewhat higher. Beta is a measure of the Fund’s systematic risk compared to the Index. For example, a beta of 0.90 would indicate that the Fund is expected to provide a 10% less return when the Index increases and a 10% better return when the Index decreases. Over the past 12 months, the daily realized beta has been 1.01. The portfolio continues to have exposure to factors that the sub-advisor actively seeks. For example, the portfolio has negative exposure to stocks that are traded more frequently and positive exposure to stocks with good value characteristics. The sub-advisor believes the Fund’s beta should be lower going forward and that the strategy, and its resulting characteristics, should benefit the Fund’s performance over the longer term.

Top Ten Holdings (% Net Assets)

Royal Dutch Shell PLC		1.8
Microsoft Corp.		1.7
Exxon Mobil Corp.		1.6
Johnson & Johnson		1.4
Suncor Energy, Inc.		1.4
Chevron Corp.		1.3
Wells Fargo & Co.		1.3
Nestle S.A.		1.2
Procter & Gamble Co.		1.1
Intel Corp.		1.1
Total Fund Holdings	240

Sector Allocation (% Equities)

Financials	16.1
Energy	13.3
Information Technology	12.7
Consumer Discretionary	12.3
Industrials	11.4
Health Care	9.6
Consumer Staples	8.9
Materials	8.2
Utilities	4.3
Telecommunication Services	3.2

Country Allocation (% Equities)

United States	54.7
United Kingdom	8.7
Japan	8.4
France	5.0
Switzerland	4.5
Canada	4.3
Germany	3.2
Australia	2.8
Netherlands	1.7
Sweden	1.2
Hong Kong/China	1.1
Spain	0.8
Italy	0.7
Denmark	0.6
Singapore	0.5
Ireland	0.5
Belgium	0.4
Finland	0.4
Luxembourg	0.3
Portugal	0.1
Austria	0.1

7

Domestic Equity Market Overview

August 31, 2014 (Unaudited)

The U.S. equity markets posted strong results for the one-year period ending August 31, 2014 despite weakness during the early months of the period. The Federal Reserve Bank’s (the “Fed”) decision in September 2013 to not taper its quantitative easing program reflected lowered U.S. economic growth estimates for 2013 and 2014. That news, combined with the 16-day government shutdown in October 2013 and political rancor surrounding the raising of the debt ceiling provided a minor setback in the stock markets. In December, however, the Fed announced it would reduce the rate of its asset purchases beginning in January 2014 and the equity markets broadly rallied in response.

In the early months of 2014, unusually cold weather in the Midwest and East played a significant role in reducing revenues and increasing costs for many U.S. companies. This created a unique dynamic in the marketplace as certain sectors, such as Utilities, benefitted from cold weather while others, such as Auto and Retail, suffered as consumers stayed indoors. These trends proved to be short-lived as consumer spending picked up during late March and April.

Heading into the spring, investors received a variety of signals that the U.S. economy was picking up steam for the second half of 2014. Labor market data was especially strong with payroll statistics reaching their most favorable levels since the late 1990s. The Manufacturing sector remained robust, while a better job market and rising consumer spending appeared to drive healthy growth in the much larger service sector. The Housing sector demonstrated signs of improvement as homebuyers reconciled themselves to somewhat higher home prices and mortgage rates than previous years.

Improving economic indicators, particularly falling unemployment and rising consumer prices, spurred continued debate among Fed officials as to the next phase of the quantitative easing program. In July, new Fed Chairwoman Janet Yellen indicated that an abundance of part-time workers and long-term unemployed suggested that the broader market still had room to grow before ending the program.

Overall for the one-year period ending August 31, 2014, the market rally was broad as the Russell 3000 Value Index gained 23.9% while the Russell 3000 Growth Index increased by 25.6%. Top sectors included Healthcare (up 31.8%) and Technology (up 33.4%) while Consumer Cyclical (up 19.4%) and Consumer Defensive (up 18.2%) lagged the overall market. For the period, the S&P 500 Index posted a 25.3% increase.

8

American Beacon Zebra Small Cap Equity Fund^SM

Performance Overview

August 31, 2014 (Unaudited)

The Investor Class of the American Beacon Zebra Small Cap Equity Fund (the “Fund”) returned 16.27% for the twelve-month period ended August 31, 2014, underperforming the Russell 2000^® Index (the “Index”) return of 17.68% for the same period.

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

For the Period from 6/1/10 through 8/31/14

Total Returns for the Period ended 8/31/14

	1 Year			3 Years			Since Incep. (6/1/10)			Value of $10,000 6/1/10- 8/31/14
Institutional Class (1,3,5)		16.67	%		19.54	%		17.11	%	$	19,562
Y Class (1,3,5)		16.59	%		19.46	%		17.00	%	$	19,484
Investor Class (1,3,5)		16.27	%		19.13	%		16.66	%	$	19,246
A Class with sales charge (1,3,5)		9.48	%		16.64	%		14.93	%	$	18,066
A Class without sales charge (1,3,5)		16.17	%		18.96	%		16.55	%	$	19,169
C Class with sales charge (1,2,3,5)		14.29	%		18.07	%		15.71	%	$	18,591
C Class without sales charge (1,2,3,5)		15.29	%		18.07	%		15.71	%	$	18,591
Russell 2000 Index (4)		17.68	%		19.00	%		16.00	%	$	18,797

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 calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. A Class shares have a maximum sales charge of 5.75%.

2. Fund performance represents the total returns achieved by the Investor Class from 6/1/10 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 6/1/10. The maximum contingent deferred sales charge is 1.00% for shares redeemed within one year of the date of purchase.

3. A portion of the fees charged to each Class of the Fund was waived since inception. Performance prior to waiving fees was lower than the actual returns shown since inception.

4. The Russell 2000 Index is an unmanaged index comprised of approximately 2,000 smaller-capitalization stocks from various industrial sectors. Russell 2000 Index is a registered trademark of the Frank Russell Company. One cannot directly invest in an index.

5. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A and C Class shares was 2.78%, 2.80%, 3.08%, 3.13%, and 3.86% 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 through good stock selection, as sector allocation detracted minimal value relative to the Index. From a stock selection standpoint, holdings in the Information Technology and Consumer Discretionary sectors contributed more than 80 basis points (0.80%) each to performance. Amkor Technology (up 68.3%), iGate (up 53.8%) and Mitel Networks Group (up 127.1%) were the largest contributors to performance in the Information Technology sector. In the Consumer Discretionary sector, Columbia Sportswear (up 33.2%), Helen of Troy (up 43.5%) and Lancaster Colony (up 21.6%) added the most value relative to the Index. The aforementioned good performance was somewhat offset by poor stock selection in the Utilities, Energy and Consumer Staples sectors. In the Utilities sector, Consolidated Water Company (down 13.1%) was the largest detractor. Not owning Targa Resources also hurt performance. In the Energy sector, Calumet Specialty Products (down 9.4%) and owning a much larger position in Renewable Energy Group (down 1.0%) detracted the most relative value. Not owning Kodiak Oil & Gas, which was up 62.9% in the Index, also negatively impacted performance. Steiner Leisure (down 25.3%) detracted from performance in the Consumer Staples sector.

9

American Beacon Zebra Small Cap Equity Fund^SM

Performance Overview

August 31, 2014 (Unaudited)

The Fund’s overweight position in the Consumer Discretionary and Industrials sectors, detracted approximately 25 (0.25%) and 20 (0.20%) basis points, respectively, from performance through sector allocation. This was mostly offset by underweights in the Information Technology and Utilities sectors, which contributed to the Fund’s returns.

The sub-advisor continues to focus on uncovering opportunities by investing in a portfolio of securities that are generally less popular with investors but nevertheless have strong fundamental characteristics. At the same time the portfolio will be underweight stocks that are heavily followed but have weak fundamentals. This contrarian style has tended to result in a portfolio with very good risk-adjusted returns over time. This emphasis on companies with good fundamentals can be observed through traditional measures of value. For example, the portfolio consistently exhibits lower price-earnings ratios (both forward and trailing) than the Index.

Both the predicted and realized beta for the portfolio remains relatively low. Beta is a measure of the Fund’s systematic risk compared to the Index. For example, a beta of 0.90 would indicate that the Fund is expected to provide a 10% less return when the Index increases and a 10% better return when the Index decreases. As of August 29, 2014, the predicted beta was 0.95. Over the past 12-months, the daily realized beta has been 0.89. The portfolio continues to have exposure to factors that the sub-advisor actively seeks. For example, the portfolio has negative exposure to stocks that are traded more frequently and positive exposure to stocks with good value characteristics. The sub-advisor’s strategy, and its resulting characteristics, should benefit the Fund’s performance over the longer term.

Top Ten Holdings (% Net Assets)

Syntel, Inc.		1.8
Enstar Group Ltd.		1.5
PDL BioPharma, Inc.		1.4
Deluxe Corp.		1.4
Amerco, Inc.		1.3
Ubiquiti Networks, Inc.		1.3
Delek US Holdings, Inc.		1.3
HSN, Inc.		1.3
Team Health Holdings, Inc.		1.2
Mentor Graphics Corp.		1.1
Total Fund Holdings	317

Sector Allocation (% Equities)

Financials	26.4
Industrials	17.8
Consumer Discretionary	15.1
Information Technology	14.9
Health Care	11.6
Energy	5.4
Consumer Staples	3.8
Materials	2.4
Utilities	1.7
Telecommunication Services	0.9

10

High Yield Bond Market Overview

August 31, 2014 (Unaudited)

High yield, equities, long Treasuries and most financial asset classes produced solid returns during the one-year period ending August 31, 2014. A gradually improving U.S. economy, benign inflation, lower long-term rates and an accommodative Federal Reserve combined to produce double-digit returns for a number of asset classes. The Merrill Lynch/Bank of America US High Yield Master II Index produced a 10.62% return for the period and spreads tightened 85 (0.85%) basis points (bps).

Five-year Treasuries ended the period unchanged in yield, trading within a range of 50 bps (0.50%). High-yield spreads contracted steadily for most of the period and in June hit a post-recession low of 350 bps (3.5%) while the absolute yield hit an all-time low of 4.85%. During the second quarter of 2014, the yield curve started to quicken its pace of flattening with shorter rates (two-year) moving up 30 bps (0.30%) and longer rates moving down 30 bps (0.30%). For the period, two-year rates were up 10 bps (0.10%) and 10-year rates were down 45 bps (0.45%). Due to concerns about valuation and the timing of potential Fed rate hikes, high yield spreads ended the period at 400 bps (4.0%) – 50 bps (0.50%) above the low.

The combination of rates falling and spreads tightening produced about equal results across the quality spectrum of high yield. Lower rates help higher quality bonds because they tend to have longer duration and spread tightening typically occurs more forcefully in lower rated bonds.

Sector performance was relatively even with a few exceptions worth mentioning. The Gaming sector underperformed by more than 5% while the Retail sector underperformed by 3% due to certain companies facing declining sales. The Retail sector faces structural headwinds from excess capacity, a fickle consumer and poor demographics trends. Banking and Utilities both outperformed mainly due to the longer duration of the sector.

High-yield funds had approximate inflows of $17 billion from August 2013 through May 2014. For the last three months of the period outflows totaled $14.5 billion with the majority ($11.5 billion) occurring in July. The sell off occurred in conjunction with the spread widening mentioned previously.

11

American Beacon SiM High Yield Opportunities Fund^SM

Performance Overview

August 31, 2014 (Unaudited)

The Investor Class of the American Beacon SiM High Yield Opportunities Fund (the “Fund”) returned 11.08% for the twelve months ended August 31, 2014. The Fund outperformed the BofA Merrill Lynch U.S. High Yield Master II Index (the “Index”) return of 10.62% for the same period.

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

For the Period from 2/14/11 through 8/31/14

Total Returns for the Period ended 8/31/14

	1 Year			3 Years			Since Incep. (2/14/11)			Value of $10,000 2/14/11- 8/31/14
Institutional Class (1,2,4)		11.45	%		11.93	%		9.32	%	$	13,709
Y Class (1,2,4)		11.33	%		11.82	%		9.16	%	$	13,641
Investor Class(1,2,4)		11.08	%		11.60	%		8.85	%	$	13,503
A Class with sales charge (1,2,4)		5.57	%		9.61	%		7.28	%	$	12,825
A Class without sales charge(1,2,4)		10.87	%		11.40	%		8.76	%	$	13,466
C Class with sales charge(1,2,4)		9.12	%		10.60	%		8.01	%	$	13,138
C Class without sales charge(1,2,4)		10.12	%		10.60	%		8.01	%	$	13,138
BofA Merrill Lynch US High Yield Master II Index(3)		10.62	%		10.38	%		8.41	%	$	13,318

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. A Class shares have a maximum sales charge of 4.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

2. A portion of the fees charged to each Class of the Fund was waived since inception. Performance prior to waiving

fees was lower than the actual returns shown since inception.

3. The BofA Merrill Lynch US High Yield Master II Index tracks the performance of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market. Qualifying securities must have a below investment grade rating and an investment grade rated country of risk. In addition, qualifying securities must have at least one year remaining term to final maturity, a fixed coupon schedule and a minimum amount outstanding of $100 million. Defaulted securities and securities eligible for the dividends-received deduction are excluded from the Index. One cannot directly invest in an index.

4. The total annual Fund operating expense ratio set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, and C Class shares was 0.93%, 0.99%, 1.15%, 1.31%, and 2.05%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund’s outperformance relative to the Index was largely driven by its strong issue selection within the various credit quality and sector categories. Conversely, the Fund’s relative weightings among credit quality and sector categories versus the Index negatively impacted the Fund’s returns.

From a credit quality perspective, issue selection in the B-rated credit category was a major contributor to the Fund’s outperformance.

From a credit quality allocation perspective, the Fund’s relative weightings within the high yield credit rating categories (BB, B and CCC) proved beneficial during the period. On the other hand, the Fund’s small allocation to investment grade securities and cash equivalents detracted from relative returns.

From a sector standpoint, strong performance from issues in the Consumer, Service and Manufacturing sectors was a significant driver of the Fund’s excess returns versus the Index. However, some of those gains were modestly offset through trailing returns generated by the Fund’s holdings in the Electric and Energy sectors.

From a sector allocation perspective, the Fund’s relative returns were hampered by underweighting the Finance sector (up 12.4%) and maintaining an overweight allocation to the Service sector (up 9.4%). An allocation to Cash (2.4%) and Agency securities (2.1%) also detracted from relative returns.

12

American Beacon SiM High Yield Opportunities Fund^SM

Performance Overview

August 31, 2014 (Unaudited)

The Fund has the flexibility to utilize derivative instruments and will do so to enhance return, hedge risk, manage liquidity or to gain efficient exposure to an asset class. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage. During the period, the Fund experienced modest benefits from the use of derivatives having a minimal impact on performance.

The sub-advisor’s investment process of identifying long-term secular themes and seeking out of favor sectors through bottom-up fundamental research remains in place.

Top Ten Holdings (% Net Assets)

Continental Airlines Finance Trust II, 6.00%, Due 11/15/2030		2.3
Virgin Media Finance PLC, 6.375%, Due 4/15/2023, 144A		2.0
Tenet Healthcare Corp., 4.500%, Due 4/1/2021		2.0
Alliant Techsystems, Inc., 5.250%, Due 10/1/2021, 144A		2.0
DigitalGlobe, Inc., 5.250%, Due 2/1/2021, 144A		2.0
Live Nation Entertainment, Inc., 7.000%, Due 9/1/2020, 144A		1.9
LSB Industries, Inc., 7.750%, Due 8/1/2019		1.9
Sensata Technologies BV, 4.875%, Due 10/15/2023, 144A		1.9
LifePoint Hospitals, Inc., 5.500%, Due 12/1/2021, 144A		1.9
Univision Communications, Inc., 6.75%, Due 9/15/2022, 144A		1.9
Total Fund Holdings	88

Sector Allocation (% Investments)

Service	36.3
Manufacturing	18.2
Consumer	9.8
Transportation	8.5
Finance	8.0
Telecommunications	7.8
Utilities	3.3
Short-Term Investments	1.9
Sovereign	1.9
Financials	1.7
Agency	1.6
Materials	0.8
U.S. Treasury Notes/Bonds	0.2

S&P credit ratings for long-term obligations (or issuers thereof) are AAA, AA, A, BBB, BB, B, CCC, CC, C, and D in decreasing order. For example, obligations rated AAA are judged to be of the highest quality, BBB to be of medium grade, CCC are judged to be speculative and obligations rated D are in default. Obligations rated in one of the four highest categories are considered to be investment grade while all other ratings are considered non-investment grade.

13

American Beacon Funds^SM

Fund Expenses

August 31, 2014 (Unaudited)

Fund Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs including sales charges (loads) on purchased shares 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 March 1, 2014 through August 31, 2014.

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.

14

American Beacon Funds^SM

Fund Expenses

August 31, 2014 (Unaudited)

The London Company Income Equity Fund

	Beginning Account Value 3/1/14		Ending Account Value 8/31/14		Expenses Paid During Period* 3/1/14 - 8/31/14
Institutional Class
Actual	$	1,000.00	$	1,106.71	$	4.19
Hypothetical **	$	1,000.00	$	1,021.22	$	4.02
Y Class
Actual	$	1,000.00	$	1,106.70	$	4.73
Hypothetical **	$	1,000.00	$	1,020.72	$	4.53
Investor Class
Actual	$	1,000.00	$	1,106.21	$	5.57
Hypothetical **	$	1,000.00	$	1,019.91	$	5.35
A Class
Actual	$	1,000.00	$	1,104.26	$	6.63
Hypothetical **	$	1,000.00	$	1,018.90	$	6.36
C Class
Actual	$	1,000.00	$	1,100.53	$	10.59
Hypothetical **	$	1,000.00	$	1,015.12	$	10.16

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.79%, 0.89%, 1.05%, 1.25%, and 2.00% 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.

Zebra Global Equity Fund

	Beginning Account Value 3/1/14		Ending Account Value 8/31/14		Expenses Paid During Period* 3/1/14 - 8/31/14
Institutional Class
Actual	$	1,000.00	$	1,061.82	$	4.11
Hypothetical **	$	1,000.00	$	1,021.22	$	4.02
Y Class
Actual	$	1,000.00	$	1,059.65	$	4.62
Hypothetical **	$	1,000.00	$	1,020.72	$	4.53
Investor Class
Actual	$	1,000.00	$	1,060.05	$	6.08
Hypothetical **	$	1,000.00	$	1,019.31	$	5.96
A Class
Actual	$	1,000.00	$	1,058.73	$	6.54
Hypothetical **	$	1,000.00	$	1,018.85	$	6.41
C Class
Actual	$	1,000.00	$	1,054.78	$	10.36
Hypothetical **	$	1,000.00	$	1,015.12	$	10.16

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.79%, 0.89%, 1.17%, 1.26%, and 2.00% 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.

Zebra Small Cap Equity Fund

	Beginning Account Value 3/1/14		Ending Account Value 8/31/14		Expenses Paid During Period* 3/1/14 - 8/31/14
Institutional Class
Actual	$	1,000.00	$	1,029.40	$	5.06
Hypothetical **	$	1,000.00	$	1,020.21	$	5.04
Y Class
Actual	$	1,000.00	$	1,029.09	$	5.57
Hypothetical **	$	1,000.00	$	1,019.71	$	5.55
Investor Class
Actual	$	1,000.00	$	1,027.86	$	7.00
Hypothetical **	$	1,000.00	$	1,018.30	$	6.97
A Class
Actual	$	1,000.00	$	1,027.84	$	7.41
Hypothetical **	$	1,000.00	$	1,017.90	$	7.38
C Class
Actual	$	1,000.00	$	1,024.00	$	11.22
Hypothetical **	$	1,000.00	$	1,014.12	$	11.17

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.99%, 1.09%, 1.37%, 1.45%, and 2.20% 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.

SiM High Yield Opportunities Fund

	Beginning Account Value 3/1/14		Ending Account Value 8/31/14		Expenses Paid During Period* 3/1/14 - 8/31/14
Institutional Class
Actual	$	1,000.00	$	1,031.53	$	4.30
Hypothetical **	$	1,000.00	$	1,020.97	$	4.28
Y Class
Actual	$	1,000.00	$	1,030.99	$	4.81
Hypothetical **	$	1,000.00	$	1,020.47	$	4.79
Investor Class
Actual	$	1,000.00	$	1,030.27	$	5.53
Hypothetical **	$	1,000.00	$	1,019.76	$	5.50
A Class
Actual	$	1,000.00	$	1,030.08	$	6.65
Hypothetical **	$	1,000.00	$	1,018.65	$	6.61
C Class
Actual	$	1,000.00	$	1,026.18	$	10.47
Hypothetical **	$	1,000.00	$	1,014.87	$	10.41

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.84%, 0.94%, 1.08%, 1.30%, and 2.05% 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.

15

American Beacon Funds

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon The London Company Income Equity Fund, American Beacon Zebra Global Equity Fund, American Beacon Zebra Small Cap Equity Fund, and American Beacon SiM High Yield Opportunities Fund:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the American Beacon The London Company Income Equity Fund, American Beacon Zebra Global Equity Fund, American Beacon Zebra Small Cap Equity Fund, and American Beacon SiM High Yield Opportunities Fund (four of the funds constituting the American Beacon Funds) (collectively, the “Funds”), as of August 31, 2014, 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 August 31, 2014, 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 The London Company Income Equity Fund, American Beacon Zebra Global Equity Fund, American Beacon Zebra Small Cap Equity Fund, and American Beacon SiM High Yield Opportunities Fund at August 31, 2014, 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

October 30, 2014

16

American Beacon The London Company Income Equity Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
PREFERRED STOCK - 1.91%
FINANCIALS - 1.91%
Diversified Financials - 0.49%
Aegon N.V., 8.00%, Due 2/15/2042		23,582	$	682
Morgan Stanley Capital Trust VIII, 6.45%, Due 4/15/2067		26,090		660
				1,342
Insurance - 0.26%
Montpelier Re Holdings Ltd., 8.875%, Due 5/10/2016		24,820		706
Real Estate - 1.16%
Vornado Realty Trust, 5.40%, Due 12/31/2049A		134,500		3,213
Total Financials				5,261
Total Preferred Stock (Cost $4,809)				5,261
COMMON STOCK - 94.97%
CONSUMER DISCRETIONARY - 9.21%
Hotels, Restaurants & Leisure - 2.64%
Carnival Corp.		191,970		7,272
Leisure Equipment & Products - 3.71%
Hasbro, Inc.		194,077		10,219
Specialty Retail - 2.86%
Lowe’s Cos., Inc.		150,443		7,900
Total Consumer Discretionary				25,391
CONSUMER STAPLES - 12.77%
Beverages - 1.86%
Coca-Cola Co.		123,210		5,140
Tobacco - 10.91%
Altria Group, Inc.		222,660		9,592
Lorillard, Inc.		184,271		11,002
Philip Morris International, Inc.		50,029		4,281
Reynolds American, Inc.		89,282		5,220
				30,095
Total Consumer Staples				35,235
ENERGY - 5.67%
Oil & Gas - 5.67%
Chevron Corp.		51,486		6,665
ConocoPhillips		110,289		8,958
Total Energy				15,623
FINANCIALS - 15.95%
Diversified Financials - 10.76%
BlackRock, Inc., Class A		28,942		9,566
Federated Investors, Inc., Class B		292,340		8,972
Wells Fargo & Co.		216,966		11,161
				29,699
Insurance - 2.63%
Cincinnati Financial Corp.		150,661		7,245
Real Estate - 2.56%
Corrections Corp. of AmericaA		197,910		7,054
Total Financials				43,998

	Shares		Fair Value
			(000’s)
HEALTH CARE - 8.63%
Pharmaceuticals - 8.63%
Bristol-Myers Squibb Co.		138,865	$	7,034
Eli Lilly & Co.		122,338		7,776
Pfizer, Inc.		305,383		8,975
Total Health Care				23,785
INDUSTRIALS - 4.12%
Aerospace & Defense - 4.12%
General Dynamics Corp.		92,135		11,356
INFORMATION TECHNOLOGY - 15.83%
Communications Equipment - 6.04%
Cisco Systems, Inc.		292,710		7,315
Corning, Inc.		448,900		9,365
				16,680
Computers & Peripherals - 1.48%
International Business Machines Corp.		21,157		4,068
IT Consulting & Services - 2.07%
Paychex, Inc.		136,911		5,702
Semiconductor Equipment & Products - 3.67%
Intel Corp.		290,271		10,136
Software - 2.57%
Microsoft Corp.		155,918		7,083
Total Information Technology				43,669
MATERIALS - 8.23%
Chemicals - 8.23%
Albemarle Corp.		147,405		9,372
NewMarket Corp.		18,251		7,426
The Mosaic Co.		123,490		5,898
Total Materials				22,696
TELECOMMUNICATION SERVICES - 5.38%
Diversified Telecommunication Services - 5.38%
Verizon Communications, Inc.		110,804		5,520
Windstream Holdings, Inc.		824,950		9,322
Total Telecommunication Services				14,842
UTILITIES - 9.18%
Electric - 4.44%
Dominion Resources, Inc.		97,838		6,870
Duke Energy Corp.		72,641		5,375
				12,245
Gas - 4.74%
Kinder Morgan Management LLCB C		133,772		13,072
Total Utilities				25,317
Total Common Stock (Cost $230,109)				261,912
SHORT-TERM INVESTMENTS - 3.53% (Cost $9,731)
JPMorgan U.S. Government Money Market Fund, Capital Class		9,731,214		9,731

See accompanying notes

17

American Beacon The London Company Income Equity Fund^SM

Schedule of Investments

August 31, 2014

	Fair Value
	(000’s)
TOTAL INVESTMENTS - 100.41% (Cost $244,649)	$	276,904
LIABILITIES, NET OF OTHER ASSETS - (0.41%)		(1,144	)
TOTAL NET ASSETS - 100.00%	$	275,760

Percentages are stated as a percent of net assets.

^A  REIT - Real Estate Investment Trust.

^B  LLC - Limited Liability Company.

^C  Non-income producing security.

Futures Contracts Open on August 31, 2014* (000’s):

Description	Type	Number of Contracts	Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
S&P 500 Mini E Index September Futures	Long	60	September, 2014	$	6,004	$	86
				$	6,004	$	86

* The security presented here within is not subject to Master Netting Agreements. As such, this table is for informational purposes only.

See accompanying notes

18

American Beacon Zebra Global Equity Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
Australia - 2.65%
Common Stocks - (Cost $193)
ALS Ltd.		1,673	$	12
Australia & New Zealand Banking Group Ltd., ADRA		832		26
BHP Billiton Ltd., ADRA		994		34
Commonwealth Bank of Australia		422		31
CSL Ltd.		215		15
Insurance Australia Group Ltd.		2,378		14
Orica Ltd.		523		10
Westpac Banking Corp.		854		28
Woolworths Holdings Ltd.		549		19
WorleyParsons Ltd.		622		10
Total Australia				199
Austria - 0.09%
Common Stocks - (Cost $8)
OMV AG		89		3
Voestalpine AG		93		4
Total Austria				7
Belgium - 0.36%
Common Stocks - (Cost $33)
Ageas		370		12
Colruyt S.A.B		304		15
Total Belgium				27
Canada - 4.07%
Common Stocks - (Cost $269)
Agrium, Inc.		353		33
BCE, Inc.		573		26
Imperial Oil Ltd.		680		36
Pacific Rubiales Energy Corp.		1,057		22
Potash Corp of Saskatchewan, Inc.		1,631		58
RioCan Real Estate Investment TrustC		597		15
Ritchie Bros Auctioneers, Inc.		508		12
Suncor Energy, Inc.		2,522		104
Total Canada				306
Denmark - 0.53%
Common Stocks - (Cost $39)
AP Moeller - Maersk A.S.		5		12
DSV A.S.		272		8
Novo Nordisk A.S., Class B		419		20
Total Denmark				40
Finland - 0.37%
Common Stocks - (Cost $24)
KoneOyj-BB		226		10
Orion Corp., Class BB		287		11
Wartsila OYJ Abp		144		7
Total Finland				28
France - 4.75%
Common Stocks - (Cost $337)
Air Liquide S.A.		262		33
Christian Dior		120		21
CieGenerale des Etablissements Michelin		204		23

	Shares		Fair Value
			(000’s)
CNP AssurancesB		987	$	20
Dassault Systems S.A.B		438		29
Imerys S.A.B		233		19
LVMH Moet Hennessy Louis VuittonB		343		60
Safran S.A.		317		20
Scor SE, ADRA		600		18
Societe BIC S.A., ADRA B		176		24
Total S.A.		1,051		69
Zodiac Aerospace		631		21
Total France				357
Germany - 3.03%
Common Stocks - (Cost $168)
BASF SEB		416		43
Bayer AG Reg		327		44
Brenntag AG		312		17
Hannover Rueckversicheru-RegB		172		14
Henkel AG & Co., KGaA		194		18
SAP AG		480		37
Total Common Stocks				173
Preferred Stocks - (Cost $57)
BayerischeMotorenWerke AG		247		23
Fuchs Petrolub SE		237		10
Porsche Automobil Holding SE		238		22
Total Preferred Stocks				55
Total Germany				228
Hong Kong/China - 1.09%
Common Stocks - (Cost $75)
Bank of East Asia Ltd.		1,600		7
Hang Seng Bank Ltd.		500		8
Hopewell Holdings Ltd.		2,500		9
NWS Holdings Ltd.		4,000		8
PCCW Ltd.		19,000		12
Power Assets Holdings Ltd.		1,000		9
Sino Land Co., Ltd.		4,000		7
Wharf Holdings Ltd.		2,000		16
Yue Yuen Industrial Holdings Ltd.		2,000		6
Total Hong Kong/China				82
Ireland - 0.44%
Common Stocks - (Cost $31)
Accenture, PLC, Class AD		406		33
Italy - 0.65%
Common Stocks - (Cost $40)
ExorSpAB		724		29
Telecom Italia SpA		21,879		20
Total Italy				49
Japan - 8.00%
Common Stocks - (Cost $563)
Air Water, Inc.		1,000		16
Asahi Kasei Corp.		2,000		16
Benesse Holdings, Inc.		400		14
Bridgestone Corp.		700		24
Brother Industries Ltd.		1,400		27
Canon, Inc.		900		30
Central Japan Railway Co.		200		28

See accompanying notes

19

American Beacon Zebra Global Equity Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
Chugoku Bank Ltd.		1,400	$	21
Gree Inc.		1,900		15
GungHo Online Entertainment Inc.		3,000		16
Hachijuni Bank Ltd.		4,000		24
Hiroshima Bank Ltd.		5,000		24
Hisamitsu Pharmaceutical Co.		400		16
Honda Motor Co., Ltd.		800		27
IYO Bank Ltd.		2,200		22
Kaneka Corp.		3,000		17
Nexon Co., Ltd.		1,700		15
Nishi-Nippon City Bank Ltd.		8,000		21
Omron Corp.		500		22
Osaka Gas Co., Ltd.		5,000		21
Otsuka Holdings Co., Ltd.		700		26
Ricoh Co., Ltd.		1,500		16
Shimamura Co., Ltd.B		200		18
Sumitomo Rubber Industries Ltd.		1,100		16
Toho Gas Co., Ltd.		4,000		23
Tokyo Gas Co., Ltd.		5,000		28
Toto Ltd.B		2,000		24
Tsumura & Co.		600		15
Yamaguchi FinancialB		2,000		20
Total Japan				602
Luxembourg - 0.25%
Common Stocks - (Cost $18)
Tenaris S.A.,		860		19
Netherlands - 1.64%
Common Stocks - (Cost $116)
Koninklijke Philips Electronics N.V.		549		17
Koninklijke Philips N.V.		979		17
LyondellBasell Industries N.V., Class A		383		43
Unilever N.V., CVA, GDRE F		760		32
Wolters Kluwer N.V.		511		14
Total Netherlands				123
Portugal - 0.08%
Common Stocks - (Cost $5)
Energias de Portugal, S.A.,		1,177		6
Singapore - 0.44%
Common Stocks - (Cost $28)
DBS Group Holdings Ltd.		1,000		14
United Overseas Bank Ltd.		1,000		19
Total Singapore				33
Spain - 0.72%
Common Stocks - (Cost $54)
Zardoya Otis S.A.B		3,739		54
Total Spain				54
Sweden - 1.14%
Common Stocks - (Cost $80)
Atlas Copco AB, Class BB		524		14
Ericsson LM, Class B		1,263		16
Hennes&Mauritz ABB		727		30
Investor AB, Class B		421		16
Securitas AB		885		10
Total Sweden				86

	Shares		Fair Value
			(000’s)
Switzerland - 4.27%
Common Stocks - (Cost $288)
ACE Ltd.		321	$	34
CieFinanciereRichemont S.A.		271		26
Garmin Ltd.		419		23
Kuehne + Nagel International AG, Reg SB G		100		13
Nestle S.A.		1,179		92
Roche Holding AG Genusschein		217		63
Schindler Holding AG		108		16
Sika AG BRB		5		19
Swatch Groug AG		138		14
Syngenta AG		59		21
Total Switzerland				321
United Kingdom - 8.33%
Common Stocks - (Cost $588)
3i Group PLCD		2,116		14
Aggreko PLCD		552		16
AstraZeneca PLC, ADRA B D		457		35
BHP Billiton PLCD		867		27
British American Tobacco PLCD		634		37
BT Group PLCD		3,620		23
Centrica PLCD		3,602		19
GKN PLCD		2,391		14
GlaxoSmithKline PLCD		1,460		35
HSBC Holdings PLCD		5,003		55
IMI PLCD		612		14
Kingfisher PLCD		2,502		13
Marks & Spencer Group PLCD		1,966		14
National Grid PLCD		1,694		25
Old Mutual PLCD		5,253		17
Reckitt Benckiser Group PLCD		440		38
Royal Dutch Shell PLC, Class AD		1,164		47
Royal Dutch Shell PLC, Class BD		2,127		91
Sage Group PLCB D		2,139		14
Smiths Group PLCD		689		15
Standard Chartered PLCD		1,142		23
Tate & Lyle PLCD		1,355		15
Unilever PLCD		599		26
Total United Kingdom				627
United States - 52.40%
Common Stocks - (Cost $3,386)
3M Co.		354		51
Activision Blizzard, Inc.		1,089		26
Alleghany Corp.		64		28
Alliant Energy Corp.		382		22
Amgen, Inc.		372		52
Arch Capital Group Ltd.B		416		23
AT&T, Inc.		2,118		74
Avnet, Inc.		450		20
Axis Capital Holdings Ltd.		491		24
Baxter International, Inc.		460		34
Bed Bath & Beyond, Inc.B		390		25
Berkshire Hathaway, Inc., Class BB		462		63
C.H. Robinson Worldwide, Inc.		537		37
CA, Inc.		754		21
Chevron Corp.		743		96
Chubb Corp.		283		26
Cincinnati Financial Corp.		420		20
Cintas Corp.		394		26

See accompanying notes

20

American Beacon Zebra Global Equity Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
Cisco Systems, Inc.		2,448	$	61
Coach, Inc.		449		17
Coca-Cola Co.		1,553		65
Columbia Sportswear Co.		232		17
ConocoPhillips		661		54
Continental Resources, Inc.B		397		64
Crown Holdings, Inc.B		433		21
Danaher Corp.		423		32
Dentsply International, Inc.		424		20
Dollar General Corp.B		401		26
Dollar Tree, Inc.B		464		25
DTE Energy Co.		580		46
Dun & Bradstreet Corp.		241		29
Edison International		425		25
Eli Lilly & Co.		604		38
Emerson Electric Co.		523		33
Everest Re Group Ltd.		144		24
Exxon Mobil Corp.		1,207		121
Fastenal Co.		531		24
Franklin Resources, Inc.		581		33
Genuine Parts Co.		289		25
Henry Schein, Inc.B		180		22
Home Depot, Inc.		640		60
Honeywell International, Inc.		412		39
Intel Corp.		2,337		81
International Business Machines Corp.		406		78
International Flavors & Fragrances, Inc.		402		40
Intuit, Inc.		286		24
Johnson & Johnson		1,043		109
Kellogg Co.		414		27
Leucadia National Corp.		979		24
LKQ Corp.B		847		24
Magnachip Semiconductor Corp.B		4		0
Marathon Oil Corp.		771		32
Marathon Petroleum Corp.		303		28
Marsh & McLennan Cos., Inc.		505		27
Mattel, Inc.		762		26
Maxim Integrated Products, Inc.		608		19
McDonald’s Corp.		491		46
McGraw-Hill Cos., Inc.		326		27
Medtronic, Inc.		667		43
Microsoft Corp.		2,825		129
Monsanto Co.		325		38
Moody’s Corp.		686		64
Navient Corp.		860		15
Northrop Grumman Corp.		197		25
Occidental Petroleum Corp.		456		47
Oracle Corp.		1,550		65
Patterson Cos., Inc.		565		23
PepsiCo, Inc.		686		63
PetSmart, Inc.		382		27
Philip Morris International, Inc.		738		64
Phillips 66		424		37
Praxair, Inc.		238		31
Procter & Gamble Co.		983		82
Public Service Enterprise Group, Inc.		747		28

	Shares		Fair Value
			(000’s)
Qualcomm, Inc.		735		56
Reynolds American, Inc.		469		27
Ross Stores, Inc.		372		28
SCANA Corp.		577		30
Schlumberger Ltd.		579		63
SEI Investments Co.		745		28
Sigma-Aldrich Corp.		266		28
SLM Corp.		862	$	8
Stryker Corp.		289		24
Symantec Corp.		1,163		28
Synopsys, Inc.B		544		22
T. Rowe Price Group, Inc.		372		30
Target Corp.		446		26
TJX Cos., Inc.		859		51
Travelers Cos., Inc.		337		32
U.S. Bancorp		952		40
United Technologies Corp.		400		43
UnitedHealth Group, Inc.		545		47
Verisk Analytics, Inc., Class AB		319		20
Verizon Communications, Inc.		1,477		74
Viacom, Inc., Class B		313		25
Wal-Mart Stores, Inc.		771		58
Wells Fargo & Co.		1,831		94
WR Berkley Corp.		578		28
WW Grainger, Inc.		96		24
Xcel Energy, Inc.		821		26
Total Common Stocks				3,942
Foreign Exchange Traded Funds - (Cost $1)
iShares MSCI ACWI Index Fund		12		1
Total United States				3,943
SHORT-TERM INVESTMENTS - 4.29% (Cost $323)
JPMorgan U.S. Government Money Market Fund, Capital Class		323,480		323
TOTAL INVESTMENTS - 99.59% (Cost $6,724)				7,493
OTHER ASSETS, NET OF LIABILITIES - 0.41%				30
TOTAL NET ASSETS - 100.00%			$	7,524

Percentages are stated as a percent of net assets.

^A  ADR - American Depositary Receipt.

^B  Non-income producing security.

^C  REIT - Real Estate Investment Trust.

^D  PLC - Public Limited Company.

^E  CVA - Dutch Certificate.

^F  GDR - Global Depositary Receipt.

^G  Reg S - Security purchased under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration.

See accompanying notes

21

American Beacon Zebra Global Equity Fund^SM

Schedule of Investments

August 31, 2014

Futures Contracts Open on August 31, 2014* (000’s):

Description	Type	Number of Contracts	Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
Mini MSCI EAFE Emerging Markets September Futures	Long	2	September, 2014	$	192	$	2
S&P 500 Mini E Index September Futures	Long	2	September, 2014		200		6
				$	392	$	8

* The securities presented here within are not subject to Master Netting Agreements. As such, this table is for informational purposes only.

See accompanying notes

22

American Beacon Zebra Small Cap Equity Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
COMMON STOCK - 96.35%
CONSUMER DISCRETIONARY - 14.60%
Auto Components - 1.63%
Argan, Inc.		1,626	$	65
Dorman Products, Inc.		2,781		125
Remy International, Inc.		4,096		91
Shiloh Industries, Inc.		1,878		31
				312
Distributors - 0.89%
Core-Mark Holding Co., Inc.		1,786		86
DXP Enterprises, Inc.A		1,045		84
				170
Hotels, Restaurants & Leisure - 0.39%
Einstein Noah Restaurant Group, Inc.		2,010		29
Monarch Casino & Resort, Inc.A		1,806		23
Nathan’s Famous, Inc.A		396		22
				74
Household Durables - 2.80%
Bassett Furniture Industries, Inc.		1,643		25
CSS Industries, Inc.		952		24
Flexsteel Industries, Inc.		673		24
Haverty Furniture Companies, Inc.		1,822		42
Helen of Troy Ltd.A		2,865		167
Hooker Furniture Corp.		1,290		19
Kimball International, Inc., Class B		2,653		42
Lifetime Brands, Inc.		1,424		24
Matthews International Corp., Class A		2,190		101
Universal Electronics, Inc.A		1,279		70
				538
Internet & Catalog Retail - 2.47%
1-800-Flowers.com, Inc., Class AA		5,316		27
Global Sources Ltd.A		7,048		50
HSN, Inc.		3,972		241
Insight Enterprises, Inc.A		3,990		105
Overstock.com, Inc.A		2,856		50
				473
Leisure Equipment & Products - 0.42%
Johnson Outdoors, Inc., Class A		1,261		33
Nautilus, Inc.A		3,989		48
				81
Media - 2.02%
Courier Corp.		925		12
CTC Media, Inc.		17,896		162
Journal Communications, Inc., Class AA		5,121		51
Nexstar Broadcasting Group, Inc., Class A		3,520		161
				386
Multiline Retail - 0.25%
Stein Mart, Inc.		3,811		47
Specialty Retail - 2.48%
America’s Car-Mart, Inc.A		924		39
Big 5 Sporting Goods Corp.		2,222		23
Cato Corp., Class A		2,487		86
Destination Maternity Corp.		1,439		28
PC Connection, Inc.		2,802		64
Rent-A-Center, Inc.		4,358		120
Shoe Carnival, Inc.		1,797		39
Trans World Entertainment Corp.		6,499		22
West Marine, Inc.A		1,747		19
Winmark Corp.		480		35
				475

	Shares		Fair Value
			(000’s)
Textiles & Apparel - 1.25%
Cherokee, Inc.		1,337	$	24
Culp, Inc.		1,329		24
Unifirst Corp.		1,562		152
Weyco Group, Inc.		1,456		39
				239
Total Consumer Discretionary				2,795
CONSUMER STAPLES - 3.68%
Beverages - 0.40%
National Beverage Corp.		4,188		77
Food & Drug Retailing - 0.97%
Ingles Markets, Inc., Class A		1,960		49
Village Super Market, Inc., Class A		1,215		28
Weis Markets, Inc.		2,520		109
				186
Food Products - 0.21%
John B Sanfilippo & Son, Inc.		1,307		40
Household Products - 0.09%
Oil-Dri Corp of America		583		17
Personal Products - 2.01%
Female Health Co.		2,634		10
Inter Parfums, Inc.		3,367		103
National American University Holdings, Inc.		4,231		13
Nature’s Sunshine Products, Inc.		1,871		31
Revlon, Inc., Class AA		4,826		164
Steiner Leisure Ltd.A		1,486		63
				384
Total Consumer Staples				704
ENERGY - 5.17%
Energy Equipment & Services - 1.92%
Blueknight Energy Partners LPB		3,901		34
Bolt Technology Corp.		686		12
Forum Energy Technologies, Inc.A		6,122		207
RigNet, Inc.A		1,018		48
Tesco Corp.		3,108		66
				367
Oil & Gas - 3.25%
Adams Resources & Energy, Inc.		660		43
Apco Oil and Gas International, Inc.A		1,799		26
Delek US Holdings, Inc.		6,960		244
North European Oil Royalty TrustC		1,312		30
Panhandle Oil and Gas, Inc., Class A		621		38
Renewable Energy Group, Inc.A		6,950		85
Resource America, Inc., Class A		1,959		18
Sabine Royalty TrustC		1,621		92
Warren Resources, Inc.A		7,315		47
				623
Total Energy				990
FINANCIALS - 25.45%
Banks - 7.67%
1st Source Corp.		2,903		86
Access National Corp.		1,429		24
American National Bankshares, Inc.		1,067		24
Ames National Corp.		768		18
Bank of Kentucky Financial Corp.		659		24
Bank of Marin Bancorp		442		22

See accompanying notes

23

American Beacon Zebra Small Cap Equity Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
Bar Harbor Bankshares		718	$	20
Bryn Mawr Bank Corp.		1,482		44
C&F Financial Statutory Trust I		395		14
Camden National Corp.		831		30
Century Bancorp, Inc., Class A		815		29
Chemung Financial Corp.		491		14
Citizens & Northern Corp.		1,213		24
CNB Financial Corp.		1,643		28
Community Trust Bancorp, Inc.		1,895		67
CU BancorpA		912		17
Enterprise Bancorp, Inc.		756		15
Enterprise Financial Services Corp.		2,551		44
Farmers Capital Bank Corp.A		921		20
Fidelity Southern Corp.		2,743		38
First Bancorp, Inc.		755		13
First Community Bancshares, Inc.		2,464		40
First Defiance Financial Corp.		972		27
First Financial Corp.		1,438		46
First Financial Northwest, Inc.		2,581		28
German American Bancorp, Inc.		1,197		32
Great Southern Bancorp, Inc.		1,562		49
Hingham Institution for Savings		295		24
Home Bancorp, Inc.A		752		17
Horizon Bancorp		1,255		28
Intervest Bancshares Corp.		2,906		28
LCNB Corp.		923		14
Macatawa Bank Corp.		4,954		25
MainSource Financial Group, Inc.		2,497		43
Mercantile Bank Corp.		977		19
Merchants Bancshares, Inc.		475		14
MidSouth Bancorp, Inc.		1,241		24
NASB Financial, Inc.		1,544		38
National Bankshares, Inc.		810		24
NorthrimBanCorp, Inc.		767		19
Pacific Premier Bancorp, Inc.A		1,544		23
Penns Woods Bancorp, Inc.		353		16
Peoples Bancorp, Inc.		1,356		33
Republic Bancorp, Inc., Class A		2,196		50
Stock Yards Bancorp, Inc.		1,510		45
TowneBank		4,063		60
Trico Bancshares		1,688		38
Univest Corp of Pennsylvania		1,457		28
West Bancorporation, Inc.		1,438		22
				1,469
Diversified Financials - 6.62%
Advent Software, Inc.		3,060		99
Cascade BancorpA		8,578		44
Cash America International, Inc.		1,559		70
Consumer Portfolio Services, Inc.A		9,906		71
Credit Acceptance Corp.A		1,430		177
Diamond Hill Investment Group, Inc.		312		41
Encore Capital Group, Inc.A		2,636		117
ExlService Holdings, Inc.A		2,461		67
EZCORP, Inc., Class AA		5,563		59
FBR & Co.A		3,712		106
Heartland Financial USA, Inc.		2,334		56
Meta Financial Group, Inc.		640		24
MicroFinancial, Inc.		1,814		14
MidWestOne Financial Group, Inc.		1,108		26
Pzena Investment Management, Inc., Class A		915		9
Texas Pacific Land TrustC		638		129
Tree.com, Inc.		433		14

	Shares		Fair Value
			(000’s)
Walker & Dunlop, Inc.A		3,910	$	55
Waterstone Financial, Inc.		4,662		53
Westwood Holdings Group, Inc.		612		36
				1,267
Insurance - 4.15%
Baldwin & Lyons, Inc., Class B		1,721		45
Crawford & Co., Class B		5,796		52
EMC Insurance Group, Inc.		1,697		52
Enstar Group Ltd.A		1,972		279
Fortegra Financial Corp.A		2,919		29
Independence Holding Co.		2,480		35
Investors Title Co.		296		21
National Western Life Insurance Co., Class A		493		125
Safety Insurance Group, Inc.		1,617		89
Universal Insurance Holdings, Inc.		4,803		67
				794
Real Estate - 7.01%
Amerco, Inc.		909		254
American Assets Trust, Inc.D		4,631		162
Ashford Hospitality Trust, Inc.D		6,980		81
Excel Trust, Inc.D		3,103		40
Franklin Street Properties Corp.D		6,406		78
Geo Group, Inc.D		3,981		149
Getty Realty Corp.D		2,431		46
Gramercy Property Trust, Inc.D		29,889		185
Heritage Oaks Bancorp		3,221		23
Inland Real Estate Corp.D		7,012		73
National Health Investors, Inc.D		1,659		107
One Liberty Properties, Inc.D		1,032		22
Select Income REITD		3,211		90
Urstadt Biddle Properties, Inc., Class AD		1,505		32
				1,342
Total Financials				4,872
HEALTH CARE - 11.17%
Biotechnology - 1.72%
MiMedx Group, Inc.A		3,880		27
PDL BioPharma, Inc.		26,069		263
RepligenCorp.A		2,043		39
				329
Health Care Equipment & Supplies - 3.15%
Atrion Corp.		163		52
Computer Programs and Systems, Inc.		594		36
CONMED Corp.		1,806		72
CryoLife, Inc.		1,738		17
Exactech, Inc.A		1,173		28
ICU Medical, Inc.A		876		55
Integra LifeSciences Holdings Corp.A		1,409		70
Masimo Corp.		2,814		63
Meridian Bioscience, Inc.		2,635		52
Mesa Laboratories, Inc.		228		16
Nutraceutical International Corp.		935		23
Orthofix International N.V.A E		767		26
PhotoMedex, Inc.A		1,599		13
Staar Surgical Co.A		1,355		16
SurModics, Inc.A		929		19
Utah Medical Products, Inc.		354		18
Vascular Solutions, Inc.A		1,086		26
				602
Health Care Providers & Services - 4.75%
AddusHomeCareCorp.A		888		19

See accompanying notes

24

American Beacon Zebra Small Cap Equity Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
AMN Healthcare Services, Inc.A		3,365	$	51
Bio-Reference Labs, Inc.A		1,717		50
Cantel Medical Corp.		2,569		94
CorvelCorp.A		1,433		59
LHC Group, Inc.A		1,315		34
National Healthcare Corp.		1,709		98
Omnicell, Inc.A		2,067		58
Select Medical Holdings Corp.		13,292		186
Team Health Holdings, Inc.A		3,939		231
U.S. Physical Therapy, Inc.		892		32
				912
Pharmaceuticals - 1.55%
Insys Therapeutics, Inc.A		1,925		68
Lannett Co., Inc.A		2,331		92
MWI Veterinary Supply, Inc.A		791		112
Sucampo Pharmaceuticals, Inc., Class AA		3,485		24
				296
Total Health Care				2,139
INDUSTRIALS - 17.13%
Aerospace & Defense - 0.44%
Kaman Corp.		2,079		85
Air Freight & Couriers - 0.18%
Echo Global Logistics, Inc.A		1,359		35
Building Products - 1.34%
AAON, Inc.		4,135		77
American WoodmarkCorp.A		1,180		46
Builders FirstSource, Inc.A		6,056		42
Omega Flex, Inc.		617		11
Patrick Industries, Inc.A		976		41
PGT, Inc.A		3,802		40
				257
Commercial Services & Supplies - 7.87%
Aceto Corp.		2,407		46
American Public Education, Inc.A		1,143		35
CDI Corp.		1,080		16
Ceco Environmental Corp.		1,989		28
Collectors Universe, Inc.		715		14
CSG Systems International, Inc.		2,999		83
Deluxe Corp.		4,370		261
Electro Rent Corp.		2,342		35
Ennis, Inc.		2,186		32
Franklin Covey Co.A		1,188		23
G&K Services, Inc., Class A		1,565		87
Herman Miller, Inc.		3,212		95
Kelly Services, Inc., Class A		2,647		44
Kforce, Inc.		2,000		40
Marlin Business Services Corp.		1,295		26
MSA Safety, Inc.		2,662		147
Multi-Color Corp.		1,508		70
PHI, Inc.A E		1,547		66
TeleTech Holdings, Inc.A		4,683		126
TRC Co., Inc.A		3,907		23
United Stationers Supply Co.		4,161		169
VSE Corp.		653		39
				1,505
Diversified Manufacturing - 0.11%
Myers Industries, Inc.		1,137		22
Electrical Equipment - 0.92%
Chase Corp.		891		32

	Shares		Fair Value
			(000’s)
Geospace Technologies Corp.A		1,193	$	49
Houston Wire & Cable Co.		1,046		14
Powell Industries, Inc.		1,053		55
Preformed Line Products Co.		477		27
				177
Industrial Conglomerates - 2.67%
ICF International, Inc.A		1,520		51
Park-Ohio Industries, Inc.		1,372		80
Raven Industries, Inc.		2,492		66
RPX Corp.A		3,775		57
Standex International Corp.		1,160		87
Tredegar Corp.		8,057		168
				509
Machinery - 2.65%
Alamo Group, Inc.		1,043		51
American Railcar Industries, Inc.		2,053		163
Columbus McKinnon Corp.		2,831		71
Hardinge, Inc.		1,228		14
Hurco Co., Inc.		673		22
Kadant, Inc.		878		35
L.B. Foster Co., Class A		764		40
Lydall, Inc.A		1,295		36
Sun Hydraulics Corp.		1,840		74
				506
Marine - 0.16%
StealthGas, Inc.A		3,216		31
Road & Rail - 0.79%
Roadrunner Transportation Systems, Inc.A		3,044		77
Universal Truckload Services, Inc.		2,976		74
				151
Total Industrials				3,278
INFORMATION TECHNOLOGY - 14.36%
Communications Equipment - 3.60%
Alliance Fiber Optic Products, Inc.		1,570		23
Aware, Inc.		2,587		11
Black Box Corp.		1,667		39
CalAmpCorp.A		2,730		53
Extreme NetworksA		6,018		32
IxiaA		3,957		38
Mitel Networks Corp.A		4,899		49
Ubiquiti Networks, Inc.		5,438		247
Verint Systems, Inc.A		3,911		196
				688
Electronic Equipment & Instruments - 1.83%
Analogic Corp.		800		58
Daktronics, Inc.		3,215		42
ePlus, Inc.		937		55
MTS Systems Corp.		1,284		91
Scansource, Inc.A		2,225		86
Tessco Technologies, Inc.		587		19
				351
Internet Software & Services - 1.00%
AVG Technologies N.V.A		3,428		60
NIC, Inc.		3,591		68
Perficient, Inc.A		2,699		46
Reis, Inc.		779		18
				192
IT Consulting & Services - 4.41%
Computer Task Group, Inc.		1,487		19
EPAM Systems, Inc.A		2,728		103

See accompanying notes

25

American Beacon Zebra Small Cap Equity Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
Hackett Group, Inc.		3,181	$	20
iGATE Corp.A		4,894		183
LionbridgeTechnologiesA		5,017		23
Sykes Enterprises, Inc.A		3,469		73
Syntel, Inc.A		3,932		352
VirtusaCorp.A		2,054		70
				843
Semiconductor Equipment & Products - 1.18%
GSI Group, Inc.A		2,028		26
IXYS Corp.		1,969		24
MA COM Technology Solutions Holdings, Inc.A		4,132		98
Nova Measuring Instruments Ltd.A		1,466		16
PDF Solutions, Inc.A		3,111		62
				226
Software - 2.34%
Actuate Corp.A		2,467		11
American Software, Inc., Class A		1,135		10
EPIQ Systems, Inc.		2,384		35
Magic Software Enterprises Ltd.		2,984		21
Mentor Graphics Corp.		9,625		210
Pegasystems, Inc.		4,048		90
QAD, Inc.		731		15
Sapiens International Corp., N.V.		3,509		29
VASCO Data Security International, Inc.A		1,837		27
				448
Total Information Technology				2,748
MATERIALS - 2.30%
Chemicals - 1.54%
FutureFuel Corp.		2,715		38
Hawkins, Inc.		614		23
Innospec, Inc.		1,370		57
KMG Chemicals, Inc.		1,040		18
LandecCorp.A		2,504		33
Stepan Co.		1,122		54
TrecoraResourcesA		3,220		42
Zep, Inc.		1,914		30
				295
Construction Materials - 0.17%
United States Lime & Minerals, Inc.		506		32
Containers & Packaging - 0.11%
UFP Technologies, Inc.A		930		22
Metals & Mining - 0.48%
Hallador Energy Co.		4,716		63
Handy & Harman Ltd.A		1,115		29
				92
Total Materials				441

TELECOMMUNICATION SERVICES - 0.85%
Diversified Telecommunication Services - 0.73%
Hawaiian Telcom Holdco, Inc.A		2,331		65
magicJackVocalTecLtd.A		1,948		24
Premiere Global Services, Inc.A		3,890		51
				140
Wireless Telecommunication Services - 0.12%
Spok Holdings, Inc.		1,549		23
Total Telecommunication Services				163
	Shares		Fair Value
			(000’s)
UTILITIES - 1.64%
Electric - 1.07%
MGE Energy, Inc.		3,012	$	120
Otter Tail Corp.		2,936		84
				204
Gas - 0.10%
Delta Natural Gas Co., Inc.		922		19
Water - 0.47%
Artesian Resources Corp., Class A		679		14
Connecticut Water Co.		880		29
Middlesex Water Co.		1,351		28
York Water Co.		939		19
				90
Total Utilities				313
Total Common Stock (Cost $17,102)				18,443
SHORT-TERM INVESTMENTS - 3.55% (Cost $680)
JPMorgan U.S. Government Money Market Fund, Capital Class		680,110		680
TOTAL INVESTMENTS - 99.90% (Cost $17,782)				19,123
OTHER ASSETS, NET OF LIABILITIES - 0.10%				18
TOTAL NET ASSETS - 100.00%			$	19,141

Percentages are stated as a percent of net assets.

^A  Non-income producing security.

^B  Master Limited Partnership.

^C  Royalty Trust.

^D  REIT - Real Estate Investment Trust.

^E  Non-voting participating shares.

Futures Contracts Open on August 31, 2014* (000’s):

Description	Type	Number of Contracts	Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
Russell 2000 Mini Index September Futures	Long	5	September, 2014	$	587	$	10
				$	587	$	10

* The security presented here within is not subject to Master Netting Agreements. As such, this table is for informational purposes only.

See accompanying notes

26

American Beacon SiM High Yield Opportunities Fund^SM

Schedule of Investments

August 31, 2014

	Shares		Fair Value
			(000’s)
COMMON STOCK - 2.68%
FINANCIALS- 1.63%
Banks - 0.37%
Alpha Bank A.E.A		2,903,593	$	2,541
Diversfied Financials - 0.32%
Oslo Bors VPS Holdings ASA		188,850		2,224
Real Estate - 0.94%
Annaly Capital Management, Inc.B		359,000		4,272
Omega Healthcare Investors, Inc.B		60,000		2,260
				6,532
MANUFACTURING- 0.26%
Basic Materials - 0.26%
CVR Partners LP, %, Due C D		117,600		1,802
MATERIALS- 0.79%
Basic Materials - 0.16%
OCI Partners LPC D		55,070		1,137
Chemicals - 0.32%
Terra Nitrogen Co. LPC D		14,650		2,179
Metals & Mining - 0.31%
OCI Resources LPC D		91,000		2,118
Total Common Stock (Cost $17,431)				18,533
PREFERRED STOCKS - 2.29% (Cost $10,835)
TRANSPORTATION- 2.29%
Airlines - 2.29%
Continental Airlines Finance Trust II, 6.00%, Due 11/15/2030		314,250		15,830
	Par AmountK
	(000’s)
DOMESTIC BANK LOAN OBLIGATIONS - 1.30%
Consumer - 1.30%
North Atlantic Trading Co. Inc., 1st Lien Term Loan, 1.00%, Due 12/30/2019	$	3,284		3,311
North Atlantic Trading Co. Inc., 2nd Lien Term Loan, 1.00%, Due 6/30/2020		5,600		5,684
Total Domestic Bank Loan Obligations (Cost $8,753)				8,995
DOMESTIC CONVERTIBLE OBLIGATIONS - 1.71%
Finance - 0.76%
Annaly Capital Management, Inc., 5.00%, Due 5/15/2015 B		5,173		5,254
Telecommunications - 0.95%
JDS Uniphase Corp., 0.625%, Due 8/15/2033		6,650		6,600
Total Domestic Convertible Obligations (Cost $11,814)				11,854
DOMESTIC OBLIGATIONS - 71.45%
Consumer - 6.67%
Beverages & More, Inc., 10.00%, Due 11/15/2018E		4,000		3,820
Constellation Brands, Inc., 6.00%, Due 5/1/2022		9,000		10,136
HJ Heinz Co., 4.25%, Due 10/15/2020		8,250		8,363
Minerva Luxembourg S.A., 7.75%, Due 1/31/2023E		10,600		11,236
Simmons Foods, Inc., 10.50%, Due 11/1/2017E		11,810		12,549
				46,104

See accompanying notes

27

American Beacon SiM High Yield Opportunities Fund^SM

Schedule of Investments

August 31, 2014

	Par AmountK		Fair Value
	(000’s)		(000’s)
Finance - 4.16%
Carlson Travel Holdings, Inc., 7.50%, Due 8/15/2019E	$	5,800	$	5,960
DFC Finance Corp., 10.50%, Due 6/15/2020E		9,400		9,529
Fly Leasing Ltd., 6.75%, Due 12/15/2020		9,500		10,094
Omega Healthcare Investors, Inc., 5.875%, Due 3/15/2024		3,000		3,150
				28,733
Manufacturing - 17.68%
AAR Corp., 7.25%, Due 1/15/2022		4,850		5,287
Activision Blizzard, Inc., 5.625%, Due 9/15/2021E		7,950		8,596
ADS Tactical, Inc., 11.00%, Due 4/1/2018E		13,500		12,690
Alliant Techsystems, Inc., 5.25%, Due 10/1/2021E		13,413		13,681
Crown Americas LLC / Crown Americas Capital Corp IV, 4.50%, Due 1/15/2023F		6,850		6,722
Ducommun, Inc., 9.75%, Due 7/15/2018		7,450		8,139
Kissner Milling Co., Ltd., 7.25%, Due 6/1/2019E		4,800		4,950
LSB Industries, Inc., 7.75%, Due 8/1/2019		12,250		13,383
Sealed Air Corp., 6.50%, Due 12/1/2020E		11,756		12,932
Sensata Technologies BV, 4.875%, Due 10/15/2023E		13,500		13,365
ServiciosCorporativosJaver SAPI de CV, 9.875%, Due 4/6/2021E		8,925		9,884
Southern Graphics, Inc., 8.375%, Due 10/15/2020E		12,000		12,690
				122,319
Service - 29.10%
Ancestry.com, Inc.,
9.625%, Due 10/15/2018E		4,750		4,857
11.00%, Due 12/15/2020		7,000		8,067
Aviv Healthcare Properties LP / Aviv Healthcare Capital Corp., 6.00%, Due 10/15/2021C		7,450		7,860
Ceridian HCM Holding, Inc., 11.00%, Due 3/15/2021E		10,200		11,654
Churchill Downs, Inc., 5.375%, Due 12/15/2021E		9,900		10,049
DaVita, Inc., 5.75%, Due 8/15/2022		11,500		12,262
Getty Images, Inc., 7.00%, Due 10/15/2020E		7,000		5,880
HCA, Inc.,
3.75%, Due 3/15/2019		2,000		2,015
4.75%, Due 5/1/2023		10,000		10,088
Kindred Healthcare, Inc., 6.375%, Due 4/15/2022E		9,100		9,191
Lansing Trade Group LLC / Lansing Finance Co. Inc, 9.25%, Due 2/15/2019E F		7,600		7,524
LifePoint Hospitals, Inc., 5.50%, Due 12/1/2021E		12,450		13,009
Live Nation Entertainment, Inc., 7.00%, Due 9/1/2020E		12,050		12,984
MGM Resorts International, 7.75%, Due 3/15/2022		11,000		12,871
Numericable Group S.A., 4.875%, Due 5/15/2019E		11,900		12,049
Station Casinos LLC, 7.50%, Due 3/1/2021F		9,990		10,789
Tenet Healthcare Corp., 4.50%, Due 4/1/2021		13,875		13,909
Univision Communications, Inc., 6.75%, Due 9/15/2022E		11,800		12,950
Vantage Oncology LLC / Vantage Oncology Finance Co., 9.50%, Due 6/15/2017E F		3,800		3,639
Viking Cruises Ltd., 8.50%, Due 10/15/2022E		8,275		9,144
Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp., 5.375%, Due 3/15/2022F		10,000		10,500
				201,291
Telecommunications - 6.76%
DigitalGlobe, Inc., 5.25%, Due 2/1/2021E		13,750		13,613
NeuStar, Inc., 4.50%, Due 1/15/2023		7,400		6,457
Nokia Corp., 5.375%, Due 5/15/2019		12,000		12,840
Virgin Media Finance PLC, 6.375%, Due 4/15/2023E G		13,000		13,844
				46,754
Transportation - 3.87%
Gol Finance, 9.25%, Due 7/20/2020E		3,000		3,154
Titan Machinery, Inc., 3.75%, Due 5/1/2019		3,250		2,527
United Continental Holdings, Inc.,
6.375%, Due 6/1/2018		3,100		3,271
6.00%, Due 12/1/2020		1,300		1,344
US Airways Group, Inc., 6.125%, Due 6/1/2018		10,600		11,076
VRG LinhasAereas S.A., 10.75%, Due 2/12/2023E		5,000		5,344
				26,716

See accompanying notes

28

American Beacon SiM High Yield Opportunities Fund^SM

Schedule of Investments

August 31, 2014

		Par AmountK		Fair Value
		(000’s)		(000’s)
Utilities - 3.21%
Calpine Corp., 7.875%, Due 1/15/2023E		$	9,857	$	10,941
GenOn Americas Generation LLC, 9.125%, Due 5/1/2031F			11,600		11,281
					22,222
Total Domestic Obligations (Cost $487,229)					494,139
FOREIGN CONVERTIBLE OBLIGATIONS - 1.12%
Consumer - 0.72%
Marine Harvest ASA, 2.375%, Due 5/8/2018H	EUR		2,000		3,301
Pescanova S.A.,
5.125%, Due 4/20/2017I L	EUR		7,450		881
8.75%, Due 2/17/2019I L	EUR		6,600		780
					4,962
Service - 0.40%
Rexlot Holdings Ltd., 6.00%, Due 9/28/2016	HKD		13,800		2,732
Total Foreign Convertible Obligations (Cost $14,957)					7,694
FOREIGN OBLIGATIONS - 14.20%
Consumer - 0.93%
Marine Harvest ASA, 5.31%, Due 3/12/2018 H	NOK		39,000		6,450
Finance - 2.91%
Emma Delta Finance,
8.50%, Due 10/15/2017E	EUR		4,000		5,492
12.00%, Due 10/15/2017	EUR		4,000		6,517
MPT Operating Partnership LP/MPT Finance Corp., 5.75%, Due 10/1/2020C	EUR		5,850		8,186
					20,195
Service - 6.34%
Cirsa Funding Luxembourg S.A., 8.75%, Due 5/15/2018E	EUR		7,650		10,403
EuropcarGroupe S.A., 11.50%, Due 5/15/2017E	EUR		6,000		9,084
Gala Electric Casinos, 11.50%, Due 6/1/2019	GBP		4,550		8,241
Gamenet SPA, 7.25%, Due 8/1/2018E	EUR		5,650		7,647
Intralot Finance Luxemburg, 9.75%, Due 8/15/2018	EUR		5,650		8,407
					43,782
Sovereign - 1.83%
Greece, Hellenic Republic, 2.00%, Due 2/24/2023H J	EUR		3,025		3,355
Mexican BonosDesarr, 5.00%, Due 6/15/2017	MXN		117,500		9,258
					12,613
Transportation - 2.19%
CMA CGM S.A., 8.875%, Due 4/15/2019E	EUR		5,350		7,469
Moto Finance PLC, 10.25%, Due 3/15/2017E G	GBP		4,350		7,709
					15,178
Total Foreign Obligations (Cost $92,812)					98,218
U.S. AGENCY OBLIGATIONS - 1.56%
Federal National Mortgage Association,
1.375%, Due 11/15/2016			1,000		1,015
1.25%, Due 1/30/2017			7,750		7,832
0.875%, Due 12/20/2017			2,000		1,978
Total U.S. Agency Obligations (Cost $10,814)					10,825
U.S. Treasury Obligations - 0.21% (Cost $1,452)
0.875%, Due 2/28/2017			1,450		1,455
		Shares
SHORT-TERM INVESTMENTS - 1.89% (Cost $13,096)
JPMorgan U.S. Government Money Market Fund, Capital Class			13,095,663		13,096

See accompanying notes

29

American Beacon SiM High Yield Opportunities Fund^SM

Schedule of Investments

August 31, 2014

	Par AmountK	Fair Value
	(000’s)	(000’s)
TOTAL INVESTMENTS - 98.41% (Cost $669,193)		$	680,639
OTHER ASSETS, NET OF LIABILITIES - 1.60%			11,060
TOTAL NET ASSETS - 100.00%		$	691,699

Percentages are stated as a percent of net assets.

^A  Non-income producing security.

^B  REIT - Real Estate Investment Trust.

^C  LP - Limited Partnership.

^D  Master Limited Partnership.

^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 $339,512 or 49.09% of net assets. The Fund has no right to demand registration of these securities.

^F  LLC - Limited Liability Company.

^G  PLC - Public Limited Company.

^H  Variable rate.

^I  Fair valued pursuant to procedures approved by the Board of Trustees. At the period end, the value of these securities amounted to $1,661 or 0.24% of net assets.

^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 U.S. Dollars unless otherwise noted.

^L  Illiquid Security.

See accompanying notes

30

American Beacon SiM High Yield Opportunities Fund^SM

Schedule of Investments

August 31, 2014

Futures Contracts Open on August 31, 2014* (000’s):

Description	Type	Number of Contracts	Expiration Date	Contract Value		Unrealized Appreciation (Depreciation)
EURO Currency Unit Globex September Futures	Short	458	September, 2014	$	75,198	$	2,293
British Pound Globex September Futures	Short	159	September, 2014		16,457		243
				$	91,655	$	2,536

* The securities presented here within are not subject to Master Netting Agreements. As such, this table is for informational purposes only.

OTC swap agreements outstanding on August 31, 2014:

Credit Default Swaps on Corporate Issues- Sell Protection ⁽¹⁾(000’s)

Reference Entity	Counterparty	Fixed Rate			Maturity Date	Implied Credit Spread at 8/31/2014 (2)			Notional Amount (3)		Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)		Fair Value
Delta Airlines	GLM		5.000	%	12/20/2016		1.2540	%		1,000	$	(99	)	$	180	$	81
Delta Airlines	GLM		5.000	%	3/20/2017		1.3702	%		1,000		(60	)		147		87
Delta Airlines	GLM		5.000	%	3/20/2017		1.3702	%		1,000		(71	)		158		87
Delta Airlines	JPM		5.000	%	6/20/2017		1.4663	%		2,000		(132	)		317		185
Delta Airlines	FBF		5.000	%	6/20/2017		1.4663	%		2,000		(137	)		322		185
Delta Airlines	GLM		5.000	%	6/20/2017		1.4663	%		1,000		(76	)		169		93
Delta Airlines	JPM		5.000	%	9/20/2017		1.5457	%		2,000		(143	)		340		197
Delta Airlines	FBF		5.000	%	12/20/2017		1.6674	%		2,000		(100	)		304		204
											$	(818	)	$	1,937	$	1,119

⁽¹⁾  If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

⁽²⁾  Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swaps agreements on corporate issues and sovereign issues of an emerging country as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

⁽³⁾  The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

Glossary:

Counterparty Abbreviations:
FBF	Credit Suisse
GLM	Goldman Sachs Bank USA
JPM	JP Morgan Chase Bank, N.A.
Currency Abbreviations:
AUD	Australian Dollar
EUR	Euro
GBP	British Pound
HKD	Hong Kong Dollar
MXN	Mexican Peso
NOK	Norwegian Krone
Exchange Abbreviations:
Globex	Chicago Mercantile Exchange
OTC	Over-the-Counter

See accompanying notes

31

American Beacon Funds^SM

Statements of Assets and Liabilities

August 31, 2014 (in thousands, except share and per share amounts)

	The London Company Income Equity Fund		Zebra Global Equity Fund			Zebra Small Cap Equity Fund		SiM High Yield Opportunities Fund
Assets:
Investments in unaffiliated securities, at fair value A	$	276,904	$	7,493		$	19,123	$	680,639
Foreign currency, at fair valueB		—		8			—		—
Swap Income receivable		—		—			—		122
Deposit with brokers for futures contracts		386		17			25		—
Dividends and interest receivable		828		19			17		12,025
Receivable for investments sold		—		—			—		928
Receivable for fund shares sold		1,323		—			14		1,704
Receivable for tax reclaims		—		3			—		69
Receivable for expense reimbursement (Note 2)		5		—			7		—
Receivable for variation margin on open futures contracts		18		—			3		2,539
Unrealized appreciation from swap agreements		—		—			—		1,937
Prepaid expenses		40		34			36		35
Total assets		279,504		7,574			19,225		699,998
Liabilities:
Swap premium received		—		—			—		818
Payable for investments purchased		3,464		—			—		4,563
Payable for fund shares redeemed		15		—			27		1,031
Payable for variation margin from open futures contracts		—		—			—		786
Payable under excess expense reimbursement plan		—		—			—		14
Dividends payable		—		—			—		382
Management and investment advisory fees payable		88		2			9		261
Administrative service and service fees payable		130		4			9		323
Transfer agent fees payable		3		1			1		24
Custody and fund accounting fees payable		2		2			2		7
Professional fees payable		31		40			35		53
Trustee fees payable		3		—			—		7
Payable for prospectus and shareholder reports		7		1			1		26
Other liabilities		1		—			—		4
Total liabilities		3,744		50			84		8,299
Net Assets	$	275,760	$	7,524		$	19,141	$	691,699
Analysis of Net Assets:
Paid-in-capital		239,969		6,143			17,505		671,984
Undistributed (or over distribution of) net investment income		564		64			67		(1,578	)
Accumulated net realized gain		2,886		540			218		5,424
Unrealized appreciation of investments		32,255		825			1,341		12,342
Unrealized (depreciation) of currency transactions		—		(56	)		—		(946	)
Unrealized appreciation of futures contracts		86		8			10		2,536
Unrealized appreciation of swap agreements		—		—			—		1,937
Net assets	$	275,760	$	7,524		$	19,141	$	691,699
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		4,126,658		55,582			111,836		7,281,018
Y Class		8,729,133		44,952			563,427		23,900,141
Investor Class		1,175,804		64,346			208,791		19,335,446
A Class		2,255,291		344,362			339,876		8,984,086
C Class		3,348,989		79,813			104,341		7,361,609
Net assets (not in thousands):
Institutional Class	$	58,277,396	$	706,514		$	1,606,024	$	75,388,828
Y Class	$	122,714,756	$	575,292		$	8,168,361	$	247,179,395
Investor Class	$	16,549,654	$	817,752		$	3,003,670	$	199,533,521
A Class	$	31,579,315	$	4,410,016		$	4,894,024	$	93,060,715
C Class	$	46,638,516	$	1,014,615		$	1,468,876	$	76,536,190

See accompanying notes

32

American Beacon Funds^SM

Statements of Assets and Liabilities

August 31, 2014 (in thousands, except share and per share amounts)

	The London Company Income Equity Fund		Zebra Global Equity Fund		Zebra Small Cap Equity Fund		SiM High Yield Opportunities Fund
Net asset value, offering and redemption price per share:
Institutional Class	$	14.12	$	12.71	$	14.36	$	10.35
Y Class	$	14.06	$	12.80	$	14.50	$	10.34
Investor Class	$	14.08	$	12.71	$	14.39	$	10.32
A Class	$	14.00	$	12.81	$	14.40	$	10.36
A Class (Offering price)	$	14.85	$	13.59	$	15.28	$	10.88
C Class	$	13.93	$	12.71	$	14.08	$	10.40
A Cost of investments in unaffiliated securities	$	244,649	$	6,724	$	17,782	$	669,193
B Cost of foreign currency	$	—	$	8	$	—	$	—

See accompanying notes

33

American Beacon Funds^SM

Statements of Operations

For the year ended August 31, 2014 (in thousands)

	The London Company Income Equity Fund			Zebra Global Equity Fund			Zebra Small Cap Equity Fund			SiM High Yield Opportunities Fund
Investment Income:
Dividend income from unaffiliated securities (net of foreign taxes) A	$	5,877		$	172		$	329		$	1,575
Interest income		—			—			—			38,849
Total investment income		5,877			172			329			40,424
Expenses:
Management and investment advisory fees (Note 2)		738			27			99			2,749
Administrative service fees (Note 2):
Institutional Class		145			2			5			155
Y Class		222			1			15			383
Investor Class		45			3			15			792
A Class		84			17			15			328
C Class		103			3			5			261
Transfer agent fees:
Institutional Class		9			—			1			14
Y Class		3			—			—			11
Investor Class		3			1			2			20
A Class		2			1			1			14
C Class		2			—			—			9
Custody and fund accounting fees		18			23			8			87
Professional fees		46			45			41			86
Registration fees and expenses		74			53			55			127
Service fees (Note 2):
Y Class		74			—			5			127
Investor Class		37			2			13			695
A Class		33			7			6			129
C Class		42			1			2			103
Distribution fees (Note 2):
A Class		55			11			10			215
C Class		277			8			12			685
Prospectus and shareholder report expenses		22			4			6			78
Trustee fees		12			—			—			33
Other expenses		19			6			6			29
Total expenses		2,065			215			322			7,130
Net fees waived and expenses reimbursed (Note 2)		(17	)		(124	)		(95	)		(24	)
Net expenses		2,048			91			227			7,106
Net investment income		3,829			81			102			33,318
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments		2,076			569			1,457			10,435
Commission recapture (Note 3)		6			—			—			—
Foreign currency transactions		—			(11	)		—			(379	)
Futures contracts		1,128			60			36			(2,008	)
Change in net unrealized appreciation or (depreciation) of:
Investments		29,854			469			342			16,165
Foreign currency transactions		—			14			—			415
Futures contracts		179			18			18			1,668
Swap agreements		—			—			—			630
Net gain from investments		33,243			1,119			1,853			26,926
Net increase in net assets resulting from operations	$	37,072		$	1,200		$	1,955		$	60,244
A Foreign taxes		—			7			—			—

See accompanying notes

34

American Beacon Funds^SM

Statements of Changes in Net Assets (in thousands)

	The London Company Income Equity Fund						Zebra Global Equity Fund
	Year Ended August 31, 2014			Year Ended August 31, 2013			Year Ended August 31, 2014			Year Ended August 31, 2013
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	3,829		$	1,109		$	81		$	190
Net realized gain from investments, futures contracts, and foreign currency transactions		3,210			712			617			1,727
Change in net unrealized appreciation or (depreciation) from investments, futures contracts, and foreign currency transactions		30,033			2,122			502			(441	)
Net increase in net assets resulting from operations		37,072			3,943			1,200			1,476
Distributions to Shareholders:
Net investment income:
Institutional Class		(1,034	)		(555	)		(8	)		(21	)
Y Class		(1,468	)		(156	)		(2	)		(6	)
Investor Class		(278	)		(111	)		(13	)		(32	)
A Class		(366	)		(103	)		(40	)		(137	)
C Class		(299	)		(24	)		—			(3	)
Net realized gain from investments:
Institutional Class		(276	)		(10	)		(175	)		(52	)
Y Class		(389	)		(2	)		(40	)		(16	)
Investor Class		(93	)		(2	)		(159	)		(107	)
A Class		(137	)		(2	)		(805	)		(492	)
C Class		(144	)		—			(118	)		(24	)
Net distributions to shareholders		(4,484	)		(965	)		(1,360	)		(890	)
Capital Share Transactions:
Proceeds from sales of shares		191,341			95,667			3,248			665
Reinvestment of dividends and distributions		2,392			844			1,171			767
Cost of shares redeemed		(53,070	)		(10,856	)		(3,617	)		(8,872	)
Net increase (decrease) in net assets from capital share transactions		140,663			85,655			802			(7,440	)
Net increase (decrease) in net assets		173,251			88,633			642			(6,854	)
Net Assets:
Beginning of period		102,509			13,876			6,882			13,736
End of Period *	$	275,760		$	102,509		$	7,524		$	6,882
*Includes undistributed (or over distribution of) net investment income	$	564		$	171		$	64		$	55

See accompanying notes

35

American Beacon Funds^SM

Statements of Changes in Net Assets (in thousands)

	Zebra Small Cap Equity Fund						SiM High Yield Opportunities Fund
	Year Ended August 31, 2014			Year Ended August 31, 2013			Year Ended August 31, 2014			Year Ended August 31, 2013
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	102		$	84		$	33,318		$	29,689
Net realized gain from investments, futures contracts, and foreign currency transactions		1,493			792			8,048			11,776
Change in net unrealized appreciation or (depreciation) from investments, futures contracts, and foreign currency transactions		360			845			18,878			(7,882	)
Net increase in net assets resulting from operations		1,955			1,721			60,244			33,583
Distributions to Shareholders:
Net investment income:
Institutional Class		—			87			(3,357	)		(3,986	)
Y Class		—			(107	)		(8,079	)		(3,986	)
Investor Class		—			(144	)		(16,592	)		(14,641	)
A Class		—			(163	)		(5,141	)		(4,225	)
C Class		—			(39	)		(3,428	)		(2,850	)
Net realized gain from investments:
Institutional Class		(164	)		(62	)		(972	)		(164	)
Y Class		(294	)		80			(2,323	)		(127	)
Investor Class		(633	)		(107	)		(5,955	)		(667	)
A Class		(295	)		(124	)		(1,827	)		(178	)
C Class		(104	)		(33	)		(1,418	)		(131	)
Net distributions to shareholders		(1,490	)		(946	)		(49,092	)		(30,955	)
Capital Share Transactions:
Proceeds from sales of shares		17,920			3,473			375,899			378,915
Redemption fees		—			—			52			217
Reinvestment of dividends and distributions		1,393			853			43,082			25,146
Cost of shares redeemed		(9,930	)		(2,315	)		(256,624	)		(190,594	)
Net increase in net assets from capital share transactions		9,383			2,011			162,409			213,684
Net increase in net assets		9,848			2,786			173,561			216,312
Net Assets:
Beginning of period		9,293			6,507			518,138			301,826
End of Period *	$	19,141		$	9,293		$	691,699		$	518,138
*Includes undistributed (or over distribution of) net investment income	$	67		$	9		$	(1,578	)	$	1,034

See accompanying notes

36

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

1. Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”), which is comprised of thirty-one 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 The London Company Income Equity Fund, the American Beacon Zebra Global Equity Fund, the American Beacon Zebra Small Cap Equity Fund, and the American Beacon SiM High Yield Opportunities 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. 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	Individual investors investing directly or 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

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.

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. 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. The Funds pay the unaffiliated investment advisors hired to direct investment activities of the Funds. Management fees paid by the Funds during the year ended August 31, 2014 were as follows (in thousands):

Fund	Management Fee Rate			Management Fee		Amounts paid to Investment Advisors		Amounts Paid to Manager
The London Company Income Equity		0.39	%	$	738	$	644	$	94
Zebra Global Equity		0.38	%		27		24		3
Zebra Small Cap Equity		0.58	%		99		90		9
SiM High Yield Opportunities		0.46	%		2,749		2,450		299

37

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

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 each 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, and Investor Classes of the Funds. Prior to July 1, 2014, the Manager received an annualized fee of 0.40% of the average daily net assets of the A and C Classes of the Funds. Beginning July 1, 2014, the Manager received an annualized fee of 0.30% of the average daily net assets of the A and C Classes of the Funds.

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 advisor 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 the A Classes and 1.00% of the average daily net assets of the C Classes of each Fund. 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 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 the Funds.

Interfund Lending Program

Pursuant to an exemptive order issued 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 August 31, 2014, the Zebra Global Equity Fund borrowed on average $75,403 for 4 days at an average equity rate of 0.70% with interest charges of $6, and the SiM High Yield Opportunities Fund borrowed on average $2,213,105 for 3 days at an average rate of 0.70% with interest charges of $127.

Expense Reimbursement Plan

The Manager contractually agreed to reimburse the following Funds to the extent that total annual fund operating expenses exceeded the Funds’ expense cap. For the year ended August 31, 2014, the Manager waived or reimbursed expenses as follows:

38

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

Fund	Class	Expense Cap						Reimbursed or (Recouped) Expenses			Expiration of Reimbursed Expenses
		9/1/13 - 6/30/14			7/1/14 - 8/31/14
The London Company Income Equity	Institutional		0.79	%		0.79	%	$	13,005		2017
The London Company Income Equity	Y		0.89	%		0.89	%		4,686		2017
The London Company Income Equity	Investor		1.17	%		1.17	%		(4,986	)	2017
The London Company Income Equity	A		1.29	%		1.19	%		2,884		2017
The London Company Income Equity	C		2.04	%		1.94	%		2,237		2017
Zebra Global Equity	Institutional		0.79	%		0.79	%		13,883		2017
Zebra Global Equity	Y		0.89	%		0.89	%		5,915		2017
Zebra Global Equity	Investor		1.17	%		1.17	%		16,040		2017
Zebra Global Equity	A		1.29	%		1.19	%		75,112		2017
Zebra Global Equity	C		2.04	%		1.94	%		13,075		2017
Zebra Small Cap Equity	Institutional		0.99	%		0.99	%		10,188		2017
Zebra Small Cap Equity	Y		1.09	%		1.09	%		28,814		2017
Zebra Small Cap Equity	Investor		1.37	%		1.37	%		25,651		2017
Zebra Small Cap Equity	A		1.49	%		1.39	%		22,987		2017
Zebra Small Cap Equity	C		2.24	%		2.14	%		7,282		2017
SiM High Yield Opportunities	Institutional		0.84	%		0.84	%		9,305		2017
SiM High Yield Opportunities	Y		0.94	%		0.94	%		806		2017
SiM High Yield Opportunities	A		1.34	%		1.24	%		9,506		2017
SiM High Yield Opportunities	C		2.09	%		1.99	%		4,879		2017

Of these amounts, $4,670, $14, and $6,910 were disclosed as a receivable from the Manager to The London Company Income Equity, Zebra Global Equity, and Zebra Small Cap Equity Funds, respectively and $14,443 was payable from the SiM High Yield Opportunities Fund to the Manager at August 31, 2014. 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’s 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 reimbursed expenses listed above will expire in 2017. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

Fund	Recovered Expenses		Excess Expense Carryover		Expiration of Reimbursed Expenses
The London Company Income Equity	$	4,986	$	112,618	2015
The London Company Income Equity		—		138,942	2016
Zebra Global Equity		—		166,541	2015
Zebra Global Equity		—		162,423	2016
Zebra Small Cap Equity		—		155,632	2015
Zebra Small Cap Equity		—		122,920	2016
SiM High Yield Opportunities		—		131,807	2015
SiM High Yield Opportunities		—		153,626	2016

The Manager recovered $4,986 from the Investor Class of The London Company Income Equity Fund during the year ended August 31, 2014 from reimbursed expenses that were set to expire August 31, 2015. The Manager intends to recover expenses throughout the coming fiscal year if the expense ratios remain under the previously agreed upon contractual limits. The other Funds have not recorded 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 August 31, 2014, Foreside collected $74,626, $358, $7,715, and $42,638 in sales commissions from the sale of A Class shares for The London Company Income Equity, Zebra Global Equity, Zebra Small Cap Equity, and SiM High Yield Opportunities Funds, respectively.

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

39

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

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 August 31, 2014, 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 August 31, 2014, CDSC fees of $8,851, $331, and $13,597 were collected for The London Company Income Equity, Zebra Small Cap Equity, and SiM High Yield Opportunities 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 market 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.

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. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Funds’ pricing time of 4:00 p.m. ET. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. These securities are fair valued using a pricing service and are categorized as Level 2 in the fair value hierarchy. The pricing service, using methods approved by the Board, considers the

40

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant ADRs and futures contracts. The Valuation Committee may also fair value securities in other situations, such as when a particular foreign market is closed but a Fund is open. The Funds use outside pricing services to provide closing prices and information to evaluate and/or adjust those prices. As a means of evaluating its security valuation process, the Valuation Committee routinely compares closing prices, the next day’s opening prices in the same markets, and adjusted prices.

Other investments, including restricted securities, and those financial instruments for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by the Manager in accordance with procedures approved by the Board.

Valuation Inputs

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

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

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

Fixed income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. treasury obligations, sovereign issues, bank loans, convertible preferred securities and non-U.S. bonds are normally valued by pricing service providers that use broker dealer quotations, reported trades or valuation estimates from their internal pricing models. The service providers’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Fixed income securities purchased on a delayed-delivery basis are marked to market daily until settlement at the forward settlement date and are categorized as Level 2 of the fair value hierarchy.

Mortgage-related and asset-backed securities 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 incorporate 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, ETFs and financial derivative instruments, such as futures contracts or options 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

41

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

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. Investments in privately held investment funds which are redeemable within 90 days of the measurement date, will be valued based upon the NAVs of such investments and are categorized as Level 2 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, options contracts, or swaps agreements, 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 value of the financial derivative contracts can be estimated by a pricing service provider using a series of techniques, including simulation pricing models. The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest rates, curves, dividends and exchange rates. Financial derivatives that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Level 3 trading assets and trading liabilities, at fair value

The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of the fair value hierarchy are as follows:

Securities and other assets for which market quotes are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction and may be categorized as Level 3 of the fair value hierarchy.

Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or broker quotes), including where events occur after the close of the relevant market, but prior to the Exchange close, that materially affect the values of 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

42

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

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. Generally Accepted Accounting Principles (“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 below.

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 August 31, 2014, the investments were classified as described below (in thousands):

	Level 1		Level 2		Level 3		Total
The London Company Income Equity(1)
Preferred Stock	$	5,261	$	—	$	—	$	5,261
Common Stock		261,912		—		—		261,912
Short-Term Investments - Money Markets		9,731		—		—		9,731
Total Investments in Securities	$	276,904	$	—	$	—	$	276,904
Financial Derivative Instruments-Assets
Futures Contracts	$	86	$	—	$	—	$	86
Total Financial Derivative Instruments	$	86	$	—	$	—	$	86
	Level 1		Level 2		Level 3		Total
Zebra Global Equity(1)
Domestic Common Stock	$	3,942	$	—	$	—	$	3,942
Foreign Common Stock		3,172		—		—		3,172
Foreign Preferred Stock		55		—		—		55
Foreign Exchange-Traded Funds		1		—		—		1
Short-Term Investments - Money Markets		323		—		—		323
Total Investments in Securities	$	7,493	$	—	$	—	$	7,493
Financial Derivative Instruments-Assets
Futures Contracts	$	8	$	—	$	—	$	8
Total Financial Derivative Instruments	$	8	$	—	$	—	$	8
	Level 1		Level 2		Level 3		Total
Zebra Small Cap Equity(1)
Common Stock	$	18,443	$	—	$	—	$	18,443
Short-Term Investments - Money Markets		680		—		—		680
Total Investments in Securities	$	19,123	$	—	$	—	$	19,123
Financial Derivative Instruments-Assets
Futures Contracts	$	10	$	—	$	—	$	10
Total Financial Derivative Instruments	$	10	$	—	$	—	$	10
	Level 1		Level 2		Level 3		Total
SiM High Yield Opportunites(1)
Common Stock	$	18,533	$	—	$	—	$	18,533
Preferred Stock		15,830		—		—		15,830
Domestic Bank Loan Obligations		—		8,995		—		8,995
Domestic Convertible Obligations		—		11,854		—		11,854
Domestic Obligations		—		494,139		—		494,139
Foreign Convertible Obligations		—		6,033		1,661		7,694
Foreign Obligations		—		98,218		—		98,218
U.S. Agency Obligations		—		10,825		—		10,825
U.S. Treasury Obligations		—		1,455		—		1,455
Short-Term Investments - Money Markets		13,096		—		—		13,096
Total Investments in Securities	$	47,459	$	631,519	$	1,661	$	680,639

43

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

	Level 1		Level 2		Level 3		Total
Other Financial instruments - Assets
Credit Default Swap Agreements	$	—	$	1,119	$	—	$	1,119
Future Contracts		2,536		—		—		2,536
Total other Financial instruments - Assets	$	2,536	$	1,119	$	—	$	3,655

⁽¹⁾ Refer to the Schedule of Investments for Industry Information.

During the year ended August 31, 2014, the SiM High Yield Opportunities Fund transferred Foreign Convertible Obligations with a value of $639 from Level 2 to Level 3 as of the end of period in accordance with fair value procedures established by the Board (in thousands). These transfers were the result of determinations made by the Valuation Committee as significant unobservable inputs were used to determine the value of the securities because of a halt in trading as a result of news from the company of a plan of restructuring.

The following is a reconciliation of Level 3 assets of the SiM High Yield Opportunities 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.

	Foreign Convertible Obligations
Beginning Balance as of 8/31/2013	$	—
Net Purchases		—
Net Sales		—
Accrued Discounts/(Premiums)		—
Realized Gain/(Loss)		—
Net Change in Unrealized Appreciation/(Depreciation)		1,022
Transfers into Level 3		639
Transfers out of Level 3		—
Ending Balance 8/31/2014	$	1,661
Net Change in Unrealized Appreciation/(Depreciation) on Investments Held at 8/31/2014(2)	$	1,022

The following is a summary of significant unobservable inputs used in the fair valuation of the asset categorized within Level 3 of the fair value hierarchy:

Security Type	Fair Value At 8/31/2014		Valuation Technique	Unobservable Inputs	Input Assumptions(3)	Fair Value at 8/31/2014 per share
Foreign Convertible Obligations	$	1,661	Discounted Cash Flow Analysis	Cash Flows	125mm of a 20 year Super Senior Security with a 15% coupon		9.00 EUR/ $11.83
					400mm of a 10 year Senior Security with a 3% coupon
					300mm of a 15 year Junior Security with a 1% coupon
					300mm of a 20 year Subordinated Security zero coupon
				Discount Factor	Super Senior             8.00%
					Senior                       10.00%
					Junior                       12.00%
					Subordinated            15.00%
					Additional Timing Discount    25.00%

⁽²⁾ 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 Statement of Operations.

⁽³⁾  The key assumptions used in the discounted cash flow analysis are the future expected payments to be received, timing of the expected cash flows, and the discount rates used to present value the expected cash flows. The valuation estimate will change if one of the key assumptions either increase or decrease, keeping all other assumptions constant. For example, if the expected cash flows increase/decrease, the valuation estimate will increase/decrease. If the discount rates used decrease / increase, the valuation estimate will increase /decrease.

44

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

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.

Currency Translation

All assets and liabilities initially expressed in foreign currency values are converted into U.S. dollar values at the mean of the bid and ask prices of such currencies against U.S. dollars as last quoted by a recognized dealer. Income, expenses, and purchases and sales of investments are translated into U.S. dollars at the rate of the exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and is reported with all other foreign currency gains and losses 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, except for the SiM High Yield Opportunities Fund, 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 Funds. This amount is reported with the net realized gain in the Funds’ Statements of Operations, if applicable.

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.

Redemption Fees

The SiM High Yield Opportunities 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.

45

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimated.

Other

Under the Trust’s organizational documents, its officers and 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

Global Depositary Receipts (“GDRs”) and American Depositary Receipts (“ADRs”)

GDRs are in bearer form and traded in both the U.S. and European securities Markets. ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Fund’s possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Fund may invest in unsponsored depositary receipts, the issuers of which are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.

Inflation-Indexed Bonds

The SiM High Yield Opportunities Fund may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted based on the rate of inflation. The interest rate on these bonds is generally fixed at issuance at a rate lower than typical bonds. Over the life of an inflation-indexed bond, however, interest will be paid based on a principal value, which is adjusted for inflation. Any increase or decrease in the principal amount of an inflation-indexed bond will be included as interest income on the Statements of Operations, even though investors do not receive their principal until maturity.

Pay-In-Kind Securities

The SiM High Yield Opportunities Fund may invest in payment in-kind securities (“PIKs”). PIKs 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.

46

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

Restricted Securities

The 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. Reg S securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. 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 August 31, 2014 are disclosed in the Notes to the Schedules of Investments.

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.

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.

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.

47

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

Master Agreements

The SiM High Yield Opportunities Fund is a party to International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) with counterparties that govern transactions in over-the-counter derivative and foreign exchange contracts entered into by the Fund and those counterparties. The ISDA Master Agreements contain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to terminate early could be material to the financial statements. Since different types of forward and OTC financial derivative transactions have different mechanics and are sometimes traded out of different legal entities of a particular counterparty organization, each type of transaction may be covered by a different Master Agreement, resulting in the need for multiple agreements with a single counterparty. As the Master Agreements are specific to unique operations of different asset types, they allow a Fund to net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty.

Master Repurchase Agreements (“Master Repo Agreements”) govern transactions between a Fund and select counterparties. The Master Repo Agreements maintain provisions for, among other things, initiation, income payments, events of default, and maintenance of collateral for Repurchase and Reverse Repurchase Agreements.

Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors surrounding the settlement of certain forward settling transactions, such as delayed delivery or sale-buyback financing transactions by and between a Fund and select counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral.

5. Financial Derivative Instruments

The Funds may utilize derivative instruments to enhance return, hedge risk, gain efficient exposure to an asset class or to manage liquidity. When considering the Fund’s use of derivatives, it is important to note that the Fund does not use derivatives for the purpose of creating financial leverage.

Swap Agreements

The SiM High Yield Opportunities Fund may invest in swap agreements. Swap agreements are privately negotiated agreements between the Fund and a counterparty to exchange or swap investment cash flows, assets, foreign currencies or market-linked returns at specified, future intervals. The Fund may enter into credit default, cross-currency, interest rate and other forms of swap agreements to manage its exposure to credit, currency, interest rate, and inflation risk. In connection with these agreements, securities or cash may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency.

Swaps are marked to market daily based upon values from third party vendors or quotations from market makers to the extent available and the change in value, if any, is recorded as an unrealized gain or loss on the Statements of Assets and Liabilities. In the event that market quotes are not readily available and the swap cannot be valued pursuant to one of the valuation methods, the value of the swap will be determined in good faith by the Valuation Committee pursuant to procedures approved by the Board.

Payments received or made at the beginning of the measurement period are reflected as such on the Statements of Assets and Liabilities and represent payments made or received upon entering into the swap agreement to compensate for differences between the stated terms of the swap agreement and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). These

48

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

upfront payments are recorded as realized gains or losses on the Statements of Operations upon termination or maturity of the swap. A liquidation payment received or made at the termination of the swap is recorded as realized gain or loss on the Statements of Operations. Net periodic payments received or paid by a Fund are included as part of realized gains or losses on the Statements of Operations.

Entering into these agreements involves, to varying degrees, elements of credit, market and documentation risk in excess of the amounts recognized on the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of contractual terms in the agreements and that there may be unfavorable changes in interest rates.

A Fund’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from the counterparty over the contract’s remaining life, to the extent that amount is positive. The risk is mitigated by having a master netting arrangement between a Fund and the counterparty and by the posting of collateral to a Fund to cover a Fund’s exposure to the counterparty.

Credit Default Swap Agreements

Credit default swap agreements involve one party making a stream of payments (referred to as the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event of a default or other credit event for the referenced entity, obligation or index. As a seller of protection on credit default swap agreements, the Fund will generally receive from the buyer of protection a fixed rate of periodic premium throughout the term of the swap provided that there is no credit event. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure up to the notional amount of the swap.

If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. Recovery values are estimated by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specified valuation method, are used to calculate the settlement value.

Credit default swap agreements on corporate issues, sovereign issues of an emerging country or U.S. municipal issues involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer of protection’s right to choose the deliverable obligation with the lowest value following a credit event). The Fund may use credit default swaps on corporate issues, sovereign issues of an emerging country or U.S. municipal issues to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where the Fund owns or has exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood of a particular issuer’s default.

49

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate issues, sovereign issues of an emerging country or U.S. municipal issues as of period end are disclosed in the Notes to the Schedule of Investments and serve as an indicator of the current status of the payment/performance risk and represent a market participant view of the likelihood or risk of default for the underlying referent security to credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of the payment/performance risk. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

The maximum potential amount of future payments (undiscounted) that the Fund as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of each individual credit default swap agreements outstanding as of August 31, 2014 for which the Fund is the seller of protection are disclosed in the Notes to the Schedules of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by the Fund for the same referenced entity or entities.

For the year ended August 31, 2014, the SiM High Yield Opportunities Fund entered into credit default swaps primarily for return enhancement, hedging, and exposing cash to markets.

The Fund’s credit default swap contract notional amounts outstanding fluctuate throughout the operating year as required to meet the strategic requirements. The following table illustrates the average quarterly volume of credit default swap contracts. For the purpose of this disclosure, the volume is measured by the notional amounts outstanding at each quarter end (000’s).

Credit Default Swap Notional Amounts Outstanding
Fund	Year ended August 31, 2014
SiM High Yield Opportunities	$	12,000

Over-the-Counter Swap Agreements

OTC financial derivative instruments such as forward currency contracts, options contracts, interest rate, and credit default swap agreements derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. These instruments are valued using evaluated prices furnished by a pricing service selected by the Board. In certain cases, when a valuation is not readily available from a pricing service, the Fund’s Manager may provide a valuation pursuant to procedures approved by the Board. Depending on the instrument and the terms of the transaction, the value of the derivative instrument can be determined by a pricing service or the Manager using a series of techniques, including simulation pricing models. The pricing models are inputs, such as issuer details, indices, spreads, interest rates, yield curves, dividends, and exchange rates, that are observed from actively quoted markets. Derivative instruments that use valuation techniques and inputs similar to those described above are normally categorized as Level 2 in the fair valuation hierarchy.

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

50

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

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 Funds 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 year ended August 31, 2014, the Funds entered into future contracts primarily for return enhancement, hedging and exposing cash to markets.

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

Number of Futures Contracts Outstanding
Fund	Year ended August 31, 2014
The London Company Income Equity	68
Zebra Global Equity	5
Zebra Small Cap Equity	8
SiM High Yield Opportunities	614

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

Fair Values of financial derivative instruments not accounted for as hedging instruments as of August 31, 2014 (000’s):

Statements of Assets and Liabilities	Derivative	The London Company Income Equity		Zebra Global Equity		Zebra Small Cap Equity
Unrealized appreciation or (depreciation) of futures contracts	Equity Contracts	$	86	$	8	$	10
The effect of financial derivative instruments not accounted for as hedging instruments during the year ended August 31, 2014 (000’s):
Statements of Operations
Net realized gain or (loss) from futures contracts	Equity Contracts	$	1,128	$	60	$	36
Change in net unrealized appreciation or (depreciation) of futures contracts	Equity Contracts		179		18		18

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

SiM High Yield Opportunities

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

Fair values of financial derivative instruments on the Statements of Assets and Liabilities as of August 31, 2014 (000’s):

	Derivatives not accounted for as hedging instruments
	Credit contracts		Foreign exchange contracts		Interest rate contracts		Equity contracts		Total
Assets:
Unrealized appreciation of futures contracts	$	—	$	2,536	$	—	$	—	$	2,536
Unrealized appreciation of swap agreements		1,937		—		—		—		1,937
Total Assets	$	1,937	$	2,536	$	—	$	—	$	4,473

51

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

The effect of financial derivative instruments on the Statement of Operations for the year ended August 31, 2014 (000’s):

	Derivatives not accounted for as hedging instruments
	Credit contracts		Foreign exchange contracts			Equity contracts		Total
Realized gain or (loss) from derivatives recognized as a result from operations:
Net realized gain or (loss) from futures contracts	$	—	$	(2,008	)	$	—	$	(2,008	)
Net realized gain or (loss) from swap agreements		—		—			—		—
Total Realized losses on derivatives	$	—	$	(2,008	)	$	—	$	(2,008	)
Net change in unrealized appreciation or (depreciation) of derivatives recognized as a result from operations:
Change in net unrealized appreciation of futures contracts	$	—	$	1,668		$	—	$	1,668
Change in net unrealized appreciation of swap agreements		630		—			—		630
Total Net change in unrealized appreciation	$	630	$	1,668		$	—	$	2,298

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

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 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.

In the normal course of business the Funds trade financial instruments and enter into financial transactions where risk of potential loss exists due to changes in the market (market risk), or failure or inability of the other party to a transaction to perform (credit and counterparty risk). See below for a detailed description of select principal risks.

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. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of

52

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

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 and options, 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.

Credit and Counterparty Risks

The SiM High Yield Opportunities Fund will be exposed to credit risk with respect to issuers of portfolio securities. The Fund minimizes concentrations of credit risk by undertaking transactions with a large number of issuers. The Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty to a financial derivatives contract, repurchase agreement or a loan of portfolio securities, is unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings.

Similar to credit risk, the SiM High Yield Opportunities 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 default. Financial assets, which potentially expose the Fund to counterparty risk, consist principally of cash due from counterparties and investments. Furthermore, to the extent that unpaid amounts owed to the Fund exceed a predetermined threshold agreed to with the counterparty, such counterparty shall advance collateral to the Fund in the form of cash or cash equivalents equal in value to the unpaid amount owed to the Fund. The Fund may invest such collateral in securities or other instruments and will typically pay interest to the counterparty on the collateral received. If the unpaid amount owed to the Fund subsequently falls, the Fund would be required to return to the counterparty all or a portion of the collateral previously advanced to the Fund.

All transactions in listed securities are settled/paid for upon delivery using approved counterparties. The risk of default is considered minimal, as delivery of securities sold is only made once the Fund has received payment. Payment is made on a purchase once the securities have been delivered by the counterparty. The trade will fail if either party fails to meet its obligation.

The SiM High Yield Opportunities Fund is subject to various Master Agreements, which govern the terms of certain transactions with select counterparties. These Master Agreements reduce the counterparty risk associated with relevant transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty. Since different types of forward and OTC derivative transactions have different mechanics and are sometimes traded out of different legal entities of a particular counterparty organization, each type of transaction may be covered by a different Master Agreement and result in the need for multiple agreements with a single counterparty. Therefore, exposure cannot be netted and collateralized across all types of transactions. Exposures can only be netted across transactions governed under the same Master Agreement with the same legal entity.

Master Agreements can also help limit counterparty risk by specifying collateral posting arrangements at pre-arranged exposure levels. Under the Master Agreements, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant Master Agreement with a counterparty in a given account exceeds a specified threshold, which typically ranges from zero to $250,000 depending on the counterparty and the type of Master Agreement. United States Treasury bills and US dollar cash are generally the preferred forms of collateral, although other forms of AAA

53

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

rated paper may be used. The Fund’s overall exposure to counterparty risk can change substantially within a short period, as it is affected by each transaction subject to the relevant Master Agreement. Master Repurchase Agreements (“Master Repo Agreements”) govern transactions between the Fund and select counterparties. The Master Repo Agreements maintain provisions for, among other things, initiation, income payments, events of default, and maintenance of collateral for Repurchase Agreements.

Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors surrounding the settlement of certain purchases and sales made on a delayed-delivery basis by and between the Fund and select counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral.

International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) govern OTC financial derivative transactions entered into by the SiM High Yield Opportunities Fund and those counterparties. The ISDA Master Agreements maintain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to early terminate could be material to the financial statements. The fair value of OTC financial derivative transactions net of collateral received in or pledged by counterparty as of period end is disclosed in the Notes to the Schedule of Investments.

Offsetting Assets and Liabilities

The Funds are parties to enforceable master netting agreements between brokers and counterparties, which provide for the right to offset under certain circumstances. The Funds employ multiple money managers and counterparties and have elected not to offset qualifying financial and derivative instruments on the Statements of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of August 31, 2014 (in thousands).

The London Company Income Equity

Offsetting of Financial Assets and Derivative Assets as of August 31, 2014:

Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities
Futures Contracts (1)	$	18	$	—	$	18

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of August 31, 2014:

	Net amount of Assets Presented in the Statements of Assets and Liabilities		Gross Amounts Not Offset in the Statements of Assets and Liabilities
Counterparty			Financial Instruments		Cash Collateral Received		Net Amount
Goldman Sachs & Co.	$	18	$	—	$	—	$	18

⁽¹⁾  The securities presented here within are not subject to Master Netting Agreements. As such, this is disclosed for informational purposes only.

54

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

Zebra Global Equity

Offsetting of Financial Assets and Derivative Assets as of August 31, 2014:

Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities
Futures Contracts (1)	$	—	$	—	$	—

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of August 31, 2014:

	Net amount of Assets Presented in the Statements of Assets and Liabilities		Gross Amounts Not Offset in the Statements of Assets and Liabilities
Counterparty			Financial Instruments		Cash Collateral Received		Net Amount
Goldman Sachs & Co.	$	—	$	—	$	—	$	—

⁽¹⁾  The securities presented here within are not subject to Master Netting Agreements. As such, this is disclosed for informational purposes only.

Zebra Small Cap Equity

Offsetting of Financial Assets and Derivative Assets as of August 31, 2014:

Description	Gross Amounts of Recognized Assets			Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statement of Assets and Liabilities
Futures Contracts (1)	$	(3	)	$	—	$	(3	)

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of August 31, 2014

	Net amount of Assets Presented in the Statements of Assets and Liabilities			Gross Amounts Not Offset in the Statements of Assets and Liabilities
Counterparty				Financial Instruments		Cash Collateral Received		Net Amount
Goldman Sachs & Co.	$	(3	)	$	—	$	—	$	(3	)

⁽¹⁾  The securities presented here within are not subject to Master Netting Agreements. As such, this is disclosed for informational purposes only.

SiM High Yield Opportunities

Offsetting of Financial Assets and Derivative Assets as of August 31, 2014:

Description	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities
Credit Default Swaps	$	1,937	$	—	$	1,937
Futures Contracts (1)		2,536		—		2,536
	$	4,473	$	—	$	4,473

Offsetting of Financial Liabilities and Derivative Liabilities as of August 31, 2014:

Description	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amounts of Liabilities Presented in the Statement of Assets and Liabilities
Futures Contracts(1)	$	786	$	—	$	786
	$	786	$	—	$	786

55

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

Financial Assets, Derivative Assets, and Collateral Pledged by Counterparty as of August 31, 2014:

	Net amount of Assets Presented in the Statements of Assets and Liabilities		Gross Amounts Not Offset in the Statements of Assets and Liabilities
Counterparty			Financial Instruments		Cash Collateral Received1		Net Amount
Archer Financial Services, Inc.	$	1,937	$	—	$	1,937	$	—
	$	1,937	$	—	$	1,937	$	—

⁽¹⁾  The securities presented here within are not subject to Master Netting Agreements. As such, this is disclosed for informational purposes only.

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. The tax years for the periods ended August 31, 2012, 2013 and 2014 remain subject to examination by the Internal Revenue Service. If applicable, the Funds recognized 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.

The Funds may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on returns of income earned or gains realized or repatriated. Taxes are accrued and applied to net investment income, net realized capital gains and net unrealized appreciation 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):

	The London Company Income Equity				Zebra Global Equity
	Year Ended August 31, 2014		Year Ended August 31, 2013		Year Ended August 31, 2014		Year Ended August 31, 2013
Distributions paid from:
Ordinary income*
Institutional Class	$	1,201	$	558	$	91	$	22
Y Class		1,703		157		21		6
Investor Class		333		111		88		33
A Class		450		105		419		143
C Class		386		23		56		4
Long-term Capital Gains
Institutional Class 109		109		7		93		51
Y Class		154		1		21		15
Investor Class		37		2		84		106
A Class		54		1		425		486
C Class		57		—		62		24
Total distributions paid	$	4,484	$	965	$	1,360	$	890

56

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

	Zebra Small Cap Equity				SiM High Yield Opportunities
	Year Ended August 31, 2014		Year Ended August 31, 2013		Year Ended August 31, 2014		Year Ended August 31, 2013
Distributions paid from:
Ordinary income*
Institutional Class	$	97	$	123	$	3,754	$	3,987
Y Class		175		153		9,029		3,985
Investor Class		375		205		19,007		14,641
A Class		175		234		5,884		4,225
C Class		62		58		4,004		2,850
Long-term Capital Gains
Institutional Class		67		26		574		164
Y Class		120		34		1,373		127
Investor Class		257		46		3,540		667
A Class		120		53		1,085		178
C Class		42		14		842		131
Total distributions paid	$	1,490	$	946	$	49,092	$	30,955

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

As of August 31, 2014, the components of distributable earnings or (deficits) on a tax basis were as follows (in thousands):

	The London Company Income Equity			Zebra Global Equity			Zebra Small Cap Equity			SiM High Yield Opportunities
Cost basis of investments for federal income tax purposes	$	244,585		$	6,731		$	17,780		$	658,323
Unrealized appreciation		32,540			853			1,978			29,354
Unrealized depreciation		(221	)		(91	)		(636	)		(17,102	)
Net unrealized appreciation or (depreciation)		32,319			762			1,342			12,252
Undistributed ordinary income		1,224			328			86			2,969
Undistributed long-term gain or (loss)		2,248			291			208			6,478
Other temporary differences		—			—			—			(1,985	)
Distributable earnings or (deficits)	$	35,791		$	1,381		$	1,636		$	19,715

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 the reclassification of income from real estate investment securities, royalty trusts, and publicly traded partnerships.

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 Statements of Assets and Liabilities.

Accordingly, the following amounts represent current year permanent differences derived from foreign currency, paydown reclasses, reclassifications of income from real estate investment securities, publicly traded partnerships, and royalty trusts, and dividend reclasses that have been reclassified as of August 31, 2014 (in thousands):

	The London Company Income Equity			Zebra Global Equity			Zebra Small Cap Equity			SiM High Yield Opportunities
Paid-in-capital	$	—		$	(37	)	$	9		$	(35	)
Undistributed net investment income		9			(9	)		(44	)		667
Accumulated net realized gain (loss)		(9	)		46			35			(632	)
Unrealized appreciation or (depreciation) of investments, foreign currency contracts, futures contracts, and swap agreements		—			—			—			—

57

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

Under the Regulated Investment Company Modernization Act of 2010 (the “RIC MOD”), net capital losses recognized by Funds in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses. Prior to RIC MOD, net capital losses incurred by the Funds were carried forward for eight years and treated as short-term losses. RIC MOD requires that post-enactment net capital losses be used before pre-enactment net capital losses.

As of August 31, 2014, the Funds did not have capital loss carryforwards.

8. Investment Transactions

The aggregate cost of purchases and proceeds from sales of investments other than short-term obligations for the year ended August 31, 2014 were (in thousands):

	Purchases		Sales
The London Company Income Equity	$	157,792	$	17,372
Zebra Global Equity		4,214		4,657
Zebra Small Cap Equity		19,834		12,064
SiM High Yield Opportunities (non U.S. Government securities)		364,627		218,944
SiM High Yield Opportunities (U.S. Government securities)		100		—

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 August 31, 2014

	Institutional Class						Y Class						Investor Class
The London Company Income Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		1,861		$	23,942			7,625		$	98,479			968		$	12,613
Reinvestment of dividends		95			1,226			36			467			27			348
Shares redeemed		(1,621	)		(20,277	)		(1,384	)		(18,019	)		(571	)		(7,735	)
Net increase in shares outstanding		335		$	4,891			6,277		$	80,927			424		$	5,226

	A Class						C Class
The London Company Income Equity Fund	Shares			Amount			Shares			Amount
Shares sold		1,610		$	20,758			2,786		$	35,549
Reinvestment of dividends		18			233			9			118
Shares redeemed		(408	)		(5,305	)		(134	)		(1,734	)
Net increase in shares outstanding		1,220		$	15,686			2,661		$	33,933

	Institutional Class						Y Class						Investor Class
Zebra Global Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		22		$	308			64		$	802			44		$	552
Reinvestment of dividends		15			170			4			42			15			171
Shares redeemed		(31	)		(381	)		(39	)		(482	)		(96	)		(1,275	)
Net increase (decrease) in shares outstanding		6		$	97			29		$	362			(37	)	$	(552	)

	A Class						C Class
Zebra Global Equity Fund	Shares			Amount			Shares			Amount
Shares sold		71		$	905			53		$	681
Reinvestment of dividends		57			673			10			115
Shares redeemed		(110	)		(1,455	)		(2	)		(24	)
Net increase in shares outstanding		18		$	123			61		$	772

58

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

	Institutional Class						Y Class						Investor Class
Zebra Small Cap Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		65		$	911			548		$	7,861			283		$	4,077
Reinvestment of dividends		12			163			20			286			44			631
Shares redeemed		(76	)		(1,077	)		(127	)		(1,811	)		(359	)		(5,080	)
Net increase (decrease) in shares outstanding		1		$	(3	)		441		$	6,336			(32	)	$	(372	)

	A Class						C Class
Zebra Small Cap Equity Fund	Shares			Amount			Shares			Amount
Shares sold		280		$	4,011			75		$	1,060
Reinvestment of dividends		16			230			6			83
Shares redeemed		(108	)		(1,559	)		(28	)		(403	)
Net increase in shares outstanding		188		$	2,682			53		$	740

	Institutional Class						Y Class						Investor Class
SiM High Yield Opportunities Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		4,682		$	48,431			17,585		$	181,305			9,097		$	93,455
Redemption Fees		—			5			—			12			—			22
Reinvestment of dividends		389			3,989			801			8,201			2,181			22,257
Shares redeemed		(2,268	)		(23,347	)		(3,126	)		(32,139	)		(16,463	)		(169,250	)
Net increase (decrease) in shares outstanding		2,803		$	29,078			15,260		$	157,379			(5,185	)	$	(53,516	)

	A Class						C Class
SiM High Yield Opportunities Fund	Shares			Amount			Shares			Amount
Shares sold		3,017		$	31,114			2,087		$	21,594
Redemption Fees		—			7			—			6
Reinvestment of dividends		475			4,861			367			3,774
Shares redeemed		(2,012	)		(20,738	)		(1,079	)		(11,150	)
Net increase in shares outstanding		1,480		$	15,244			1,375		$	14,224

For the Year ended August 31, 2013

	Institutional Class						Y Class						Investor Class
The London Company Income Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		3,182		$	36,734			2,605		$	30,619			755		$	8,467
Reinvestment of dividends		44			502			11			130			9			100
Shares redeemed		(419	)		(4,972	)		(216	)		(2,589	)		(210	)		(2,311	)
Net increase in shares outstanding		2,807		$	32,264			2,400		$	28,160			554		$	6,256

	A Class						C Class
The London Company Income Equity Fund	Shares			Amount			Shares			Amount
Shares sold		1,045		$	12,022			663		$	7,825
Reinvestment of dividends		8			93			2			19
Shares redeemed		(80	)		(939	)		(4	)		(45	)
Net increase in shares outstanding		973		$	11,176			661		$	7,799

	Institutional Class						Y Class						Investor Class
Zebra Global Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		4		$	50			3		$	44			22		$	285
Reinvestment of dividends		6			73			2			21			12			137
Shares redeemed		(32	)		(416	)		(12	)		(153	)		(103	)		(1,308	)
Net (decrease) in shares outstanding		(22	)	$	(293	)		(7	)	$	(88	)		(69	)	$	(886	)

59

American Beacon Funds^SM

Notes to Financial Statements

August 31, 2014

	Retirement Class					A Class						C Class
Zebra Global Equity Fund	Shares		Amount			Shares			Amount			Shares			Amount
Shares sold		—	$	—			22		$	285			—		$	1
Reinvestment of dividends		—		—			42			511			2			25
Shares redeemed		—		(1	)		(525	)		(6,763	)		(18	)		(231	)
Net (decrease) in shares outstanding		—	$	(1	)		(461	)	$	(5,967	)		(16	)	$	(205	)

	Institutional Class						Y Class						Investor Class
Zebra Small Cap Equity Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		39		$	485			45		$	598			138		$	1,820
Reinvestment of dividends		13			149			17			186			21			239
Shares redeemed		(15	)		(189	)		(33	)		(409	)		(53	)		(649	)
Net increase in shares outstanding		37		$	445			29		$	375			106		$	1,410

	Retirement Class					A Class						C Class
Zebra Small Cap Equity Fund	Shares		Amount			Shares			Amount			Shares			Amount
Shares sold		—	$	—			32		$	422			11		$	148
Reinvestment of dividends		—		—			18			209			6			70
Shares redeemed		—		(1	)		(78	)		(978	)		(7	)		(89	)
Net increase (decrease) in shares outstanding		—	$	(1	)		(28	)	$	(347	)		10		$	129

	Institutional Class						Y Class						Investor Class
SiM High Yield Opportunities Fund	Shares			Amount			Shares			Amount			Shares			Amount
Shares sold		2,760		$	28,607			8,733		$	90,816			16,917		$	173,890
Redemption Fees		—			26			—			29			—			106
Reinvestment of dividends		375			3,879			313			3,236			1,318			13,575
Shares redeemed		(4,978	)		(51,725	)		(2,334	)		(24,189	)		(8,911	)		(91,841	)
Net increase (decrease) in shares outstanding		(1,843	)	$	(19,215	)		6,712		$	69,892			9,324		$	95,730

	A Class						C Class
SiM High Yield Opportunities Fund	Shares			Amount			Shares			Amount
Shares sold		4,523		$	46,825			3,741		$	38,777
Redemption Fees		—			32			—			24
Reinvestment of dividends		250			2,582			181			1,874
Shares redeemed		(1,585	)		(16,414	)		(620	)		(6,425	)
Net increase in shares outstanding		3,188		$	33,025			3,302		$	34,250

60

American Beacon The London Company Income Equity Fund ^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended						May 29 To
	August 31,						Aug. 31,
	2014			2013			2012
Net asset value, beginning of period	$	11.80		$	10.49		$	10.00
Income from investment operations:
Net investment income		0.30			0.31			0.06
Net gains (losses) on investments (both realized and unrealized)		2.39			1.30			0.47
Total income (loss) from investment operations		2.69			1.61			0.53
Less distributions:
Dividends from net investment income		(0.28	)		(0.29	)		(0.04	)
Distributions from net realized gains		(0.09	)		(0.01	)		—
Total distributions		(0.37	)		(0.30	)		(0.04	)
Net asset value, end of period	$	14.12		$	11.80		$	10.49
Total return A		23.13	%		15.55	%		5.31	%B
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	58,277		$	44,731		$	10,331
Ratios to average net assets:
Expenses, before reimbursements or recoupments		0.82	%		1.13	%		7.28	%C
Expenses, net of reimbursements or recoupments		0.79	%		0.79	%		0.79	%C
Net investment income (loss), before expense reimbursements or recoupments		2.31	%		2.32	%		(3.99	)%C
Net investment income, net of reimbursements or recoupments		2.33	%		2.66	%		2.50	%C
Portfolio turnover rate		10	%		15	%		6	%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 May 29 through August 31, 2012, and is not annualized.

61

American Beacon The London Company Income Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Y Class									Investor Class									A Class									C Class
						May 29									May 29									May 29									May 29
Year Ended						To			Year Ended						To			Year Ended						To			Year Ended						To
August 31,						Aug. 31,			August 31,						Aug. 31,			August 31,						Aug. 31,			August 31,						Aug. 31,
2014			2013			2012			2014			2013			2012			2014			2013			2012			2014			2013			2012
$	11.75		$	10.49		$	10.00		$	11.76		$	10.48		$	10.00		$	11.70		$	10.47		$	10.00		$	11.66		$	10.46		$	10.00
	0.28			0.33			0.05			0.26			0.27			0.05			0.24			0.31			0.05			0.15			0.24			0.04
	2.39			1.26			0.48			2.39			1.29			0.47			2.37			1.23			0.46			2.35			1.21			0.46
	2.67			1.59			0.53			2.65			1.56			0.52			2.61			1.54			0.51			2.50			1.45			0.50
	(0.27	)		(0.32	)		(0.04	)		(0.24	)		(0.27	)		(0.04	)		(0.22	)		(0.30	)		(0.04	)		(0.14	)		(0.24	)		(0.04	)
	(0.09	)		(0.01	)		—			(0.09	)		(0.01	)		—			(0.09	)		(0.01	)		—			(0.09	)		(0.01	)		—
	(0.36	)		(0.33	)		(0.04	)		(0.33	)		(0.28	)		(0.04	)		(0.31	)		(0.31	)		(0.04	)		(0.23	)		(0.25	)		(0.04	)
$	14.06		$	11.75		$	10.49		$	14.08		$	11.76		$	10.48		$	14.00		$	11.70		$	10.47		$	13.93		$	11.66		$	10.46
	23.05	%		15.45	%		5.31	%B		22.83	%		15.14	%		5.21	%B		22.58	%		14.99	%		5.11	%B		21.69	%		14.05	%		5.01	%B
$	122,715		$	28,814		$	551		$	16,550		$	8,840		$	2,073		$	31,579		$	12,109		$	647		$	46,639		$	8,015		$	274
	0.89	%		1.09	%		10.59	%C		1.06	%		1.54	%		10.14	%C		1.28	%		1.59	%		11.94	%C		2.02	%		2.26	%		13.83	%C
	0.89	%		0.89	%		0.89	%C		1.10	%		1.17	%		1.17	%C		1.27	%		1.29	%		1.29	%C		2.01	%		2.04	%		2.04	%C
	2.24	%		2.22	%		(7.30	)%C		2.06	%		1.86	%		(6.99	)%C		1.85	%		1.93	%		(8.87	)%C		1.11	%		1.09	%		(10.65	)%C
	2.25	%		2.42	%		2.40	%C		2.02	%		2.23	%		1.99	%C		1.86	%		2.23	%		1.78	%C		1.12	%		1.31	%		1.14	%C
	10	%		15	%		6	%D		10	%		15	%		6	%D		10	%		15	%		6	%D		10	%		15	%		6	%D

62

American Beacon Zebra Global Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
													June 1
													to
	Year Ended August 31,												Aug. 31,
	2014			2013			2012			2011			2010
Net asset value, beginning of period	$	13.33		$	12.57		$	11.46		$	10.10		$	10.00
Income from investment operations:
Net investment income (loss)		0.14			0.46			0.39			0.23			0.05
Net gains from investments (both realized and unrealized)		2.15			1.51			0.84			1.41			0.05
Total income from investment operations		2.29			1.97			1.23			1.64			0.10
Less distributions:
Dividends from net investment income		(0.13	)		(0.35	)		(0.12	)		(0.17	)		—
Distributions from net realized gains		(2.78	)		(0.86	)		—			(0.11	)		—
Return of capital		—			—			—			—			—
Total distributions		(2.91	)		(1.21	)		(0.12	)		(0.28	)		—
Net asset value, end of period	$	12.71		$	13.33		$	12.57		$	11.46		$	10.10
Total return A		19.17	%		16.75	%		10.85	%		16.19	%		1.00	%B
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	706		$	656		$	899		$	1,776		$	1,005
Ratios to average net assets:
Expenses, before reimbursements		2.55	%		2.56	%		1.84	%		2.38	%		6.33	%C
Expenses, net of reimbursements		0.79	%		0.79	%		0.79	%		0.77	%		0.79	%C
Net investment income (loss), before reimbursements		(0.25	)%		0.59	%		0.62	%		(0.16	)%		(3.63	)%C
Net investment income, net of reimbursements		1.51	%		2.37	%		1.67	%		1.45	%		1.91	%C
Portfolio turnover rate		63	%		164	%		66	%		24	%		0	%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 June 1 through August 31, 2010, and is not annualized.

^E Based on average shares outstanding.

63

American Beacon Zebra Global Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Y Class															Investor Class
												June 1 to															June 1 to
Year Ended August 31,												Aug. 31,			Year Ended August 31,												Aug. 31,
2014			2013			2012			2011			2010			2014			2013			2012			2011			2010
$	13.45		$	12.68		$	11.58		$	10.10		$	10.00		$	13.46		$	12.64		$	11.53		$	10.08		$	10.00
	(0.04	)		0.44			0.38			0.13			0.02	E		0.34			0.35			0.18			0.09			0.03	E
	2.34			1.54			0.84			1.51			0.08			1.92			1.59			1.02			1.51			0.05
	2.30			1.98			1.22			1.64			0.10			2.26			1.94			1.20			1.60			0.08
	(0.17	)		(0.35	)		(0.12	)		(0.05	)		—			(0.23	)		(0.26	)		(0.09	)		(0.04	)		—
	(2.78	)		(0.86	)		—			(0.11	)		—			(2.78	)		(0.86	)		—			(0.11	)		—
	—			—			—			—			—			—			—			—			—			—
	(2.95	)		(1.21	)		(0.12	)		(0.16	)		—			(3.01	)		(1.12	)		(0.09	)		(0.15	)		—
$	12.80		$	13.45		$	12.68		$	11.58		$	10.10		$	12.71		$	13.46		$	12.64		$	11.53		$	10.08
	19.08	%		16.60	%		10.68	%		16.18	%		1.00	%B		18.80	%		16.24	%		10.47	%		15.86	%		0.80	%B
$	575		$	210		$	285		$	768		$	84		$	818		$	1,365		$	2,159		$	4,160		$	114
	2.50	%		2.58	%		1.91	%		2.57	%		6.00	%C		2.87	%		2.90	%		2.25	%		2.45	%		6.12	%C
	0.89	%		0.89	%		0.89	%		0.86	%		0.89	%C		1.17	%		1.17	%		1.17	%		1.14	%		0.93	%C
	(0.05	)%		0.60	%		0.53	%		(0.42	)%		(3.24	)%C		(0.48	)%		0.28	%		0.17	%		(0.23	)%		(3.86	)%C
	1.55	%		2.29	%		1.54	%		1.29	%		1.87	%C		1.22	%		2.01	%		1.26	%		1.08	%		1.33	%C
	63%			164	%		66	%		24	%		0	%D		63	%		164	%		66	%		24	%		0	%D

64

American Beacon Zebra Global Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class															C Class
													June 1
													to
	Year Ended August 31,												Aug. 31,			Year Ended August 31,
	2014			2013			2012			2011			2010			2014			2013			2012			2011
Net asset value, beginning of period	$	13.47		$	12.65		$	11.54		$	10.08		$	10.00		$	13.36		$	12.52		$	11.46		$	10.32
Income from investment operations:
Net investment income (loss)		0.15			0.37			0.14			0.03			0.03			(0.03	)		0.18			0.06			0.02
Net gains from investments (both realized and unrealized)		2.11			1.55			1.04			1.56			0.05			2.17			1.63			1.03			1.25
Total income from investment operations		2.26			1.92			1.18			1.59			0.08			2.14			1.81			1.09			1.27
Less distributions:
Dividends from net investment income		(0.14	)		(0.24	)		(0.07	)		(0.02	)		—			(0.01	)		(0.11	)		(0.03	)		(0.02	)
Distributions from net realized gains		(2.78	)		(0.86	)		—			(0.11	)		—			(2.78	)		(0.86	)		—			(0.11	)
Return of capital		—			—			—			—			—			—			—			—			—
Total distributions		(2.92	)		(1.10	)		(0.07	)		(0.13	)		—			(2.79	)		(0.97	)		(0.03	)		(0.13	)
Net asset value, end of period	$	12.81		$	13.47		$	12.65		$	11.54		$	10.08		$	12.71		$	13.36		$	12.52		$	11.46
Total return B		18.71	%		16.08	%		10.33	%		15.74	%		0.80	%B		17.76	%		15.24	%		9.50	%		12.24	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	4,410		$	4,390		$	9,945		$	7,369		$	1		$	1,015		$	261		$	447		$	437
Ratios to average net assets:
Expenses, before reimbursements		3.02	%		2.93	%		2.40	%		2.26	%		7.17	%C		3.71	%		3.74	%		3.18	%		3.92	%
Expenses, net of reimbursements		1.27	%		1.29	%		1.29	%		1.25	%		1.32	%C		2.02	%		2.04	%		2.04	%		1.96	%
Net investment income (loss), before reimbursements		(0.63	)%		0.28	%		0.13	%		(0.11	)%		(4.53	)%C		(1.22	)%		(0.55	)%		(0.67	)%		(1.76	)%
Net investment income, net of reimbursements		1.12	%		1.93	%		1.24	%		0.90	%		1.33	%C		0.47	%		1.16	%		0.47	%		0.21	%
Portfolio turnover rate		63	%		164	%		66	%		24	%		0	%D		63	%		164	%		66	%		24	%

^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 June 1 through August 31, 2010, and is not annualized.

^E Based on average shares outstanding.

65

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66

American Beacon Zebra Small Cap Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
													June 1 to
	Year Ended August 31,												Aug. 31,
	2014			2013			2012			2011			2010
Net asset value, beginning of period	$	13.66		$	12.40		$	11.30		$	9.63		$	10.00
Income from investment operations:
Net investment income (loss)		0.14			0.46			0.27			0.17			0.03
Net gains (losses) from investments (both realized and unrealized)		2.12			2.79			1.15			1.66			(0.40	)
Total income (loss) from investment operations		2.26			3.25			1.42			1.83			(0.37	)
Less distributions:
Dividends from net investment income		—			(1.17	)		(0.10	)		(0.11	)		—
Distributions from net realized gains		(1.56	)		(0.82	)		(0.22	)		(0.05	)		—
Return of capital		—			—			—			—			—
Total distributions		(1.56	)		(1.99	)		(0.32	)		(0.16	)		—
Net asset value, end of period	$	14.36		$	13.66		$	12.40		$	11.30		$	9.63
Total return A		16.67	%		29.81	%		12.78	%		18.93	%		(3.70	)%B
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	1,606		$	1,522		$	923		$	1,325		$	959
Ratios to average net assets:
Expenses, before reimbursements		1.64	%		2.77	%		3.18	%		3.24	%		18.32	%C
Expenses, net of reimbursements		0.99	%		0.99	%		0.99	%		0.99	%		0.99	%C
Net investment income (loss), before reimbursements		0.33	%		(0.28	)%		(0.71	)%		(1.16	)%		(16.04	)%C
Net investment income (loss), net of reimbursements		0.99	%		1.50	%		1.48	%		1.09	%		1.28	%C
Portfolio turnover rate		76	%		89	%		103	%		66	%		1	%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 June 1 through August 31, 2010, and is not annualized.

^E  Based on average shares outstanding.

67

American Beacon Zebra Small Cap Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Y Class															Investor Class
												June 1 to															June 1 to
Year Ended August 31,												Aug. 31,			Year Ended August 31,												Aug. 31,
2014			2013			2012			2011			2010			2014			2013			2012			2011			2010
$	13.79		$	12.46		$	11.36		$	9.62		$	10.00		$	13.73		$	12.44		$	11.31		$	9.62		$	10.00
	0.56			0.37			0.06			0.15			0.03			0.10			0.53			0.17			0.06			0.01	E
	1.71			2.89			1.37			1.66			(0.41	)		2.12			2.68			1.22			1.71			(0.39	)
	2.27			3.26			1.43			1.81			(0.38	)		2.22			3.21			1.39			1.77			(0.38	)
	—			(1.11	)		(0.11	)		(0.02	)		—			—			(1.10	)		(0.04	)		(0.03	)		—
	(1.56	)		(0.82	)		(0.22	)		(0.05	)		—			(1.56	)		(0.82	)		(0.22	)		(0.05	)		—
	—			—			—			—			—			—			—			—			—			—
	(1.56	)		(1.93	)		(0.33	)		(0.07	)		—			(1.56	)		(1.92	)		(0.26	)		(0.08	)		—
$	14.50		$	13.79		$	12.46		$	11.36		$	9.62		$	14.39		$	13.73		$	12.44		$	11.31		$	9.62
	16.59	%		29.65	%		12.78	%		18.81	%		(3.80	)%B		16.27	%		29.30	%		12.45	%		18.34	%		(3.80	)%B
$	8,168		$	1,693		$	1,174		$	255		$	1		$	3,004		$	3,302		$	1,670		$	2,207		$	24
	1.65	%		2.79	%		3.39	%		3.08	%		183.72	%C		1.86	%		3.07	%		3.60	%		3.18	%		55.64	%C
	1.09	%		1.09	%		1.09	%		1.09	%		1.09	%C		1.37	%		1.37	%		1.37	%		1.36	%		1.36	%C
	0.19	%		(0.23	)%		(0.81	)%		(1.25	)%		(181.45	)%C		0.15	%		(0.60	)%		(1.14	)%		(1.21	)%		(53.84	)%C
	0.75	%		1.47	%		1.49	%		0.75	%		1.18	%C		0.64	%		1.11	%		1.08	%		0.61	%		0.43	%C
	76	%		89	%		103	%		66	%		1	%D		76	%		89	%		103	%		66	%		1	%D

68

American Beacon Zebra Small Cap Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class															C Class
													June 1
	Year Ended August 31,												to			Year Ended August 31,
													Aug. 31,
	2014			2013			2012			2011			2010			2014			2013			2012			2011
Net asset value, beginning of period	$	13.75		$	12.46		$	11.32		$	9.61		$	10.00		$	13.57		$	12.28		$	11.24		$	9.94
Income from investment operations:
Net investment income (loss)		0.48			0.18			0.13			0.02			0.02			0.33			0.24			0.03			(0.02	)
Net gains (losses) from investments (both realized and unrealized)		1.73			3.02			1.24			1.76			(0.41	)		1.74			2.84			1.23			1.38
Total income (loss) from investment operations		2.21			3.20			1.37			1.78			(0.39	)		2.07			3.08			1.26			1.36
Less distributions:
Dividends from net investment income		—			(1.09	)		(0.01	)		(0.02	)		—			—			(0.97	)		—			(0.01	)
Distributions from net realized gains		(1.56	)		(0.82	)		(0.22	)		(0.05	)		—			(1.56	)		(0.82	)		(0.22	)		(0.05	)
Return of capital		—			—			—			—			—			—			—			—			—
Total distributions		(1.56	)		(1.91	)		(0.23	)		(0.07	)		—			(1.56	)		(1.79	)		(0.22	)		(0.06	)
Net asset value, end of period	$	14.40		$	13.75		$	12.46		$	11.32		$	9.61		$	14.08		$	13.57		$	12.28		$	11.24
Total return B		16.17	%		29.07	%		12.28	%		18.48	%		(3.90	)%B		15.29	%		28.20	%		11.35	%		13.64	%
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	4,894		$	2,081		$	2,232		$	2,451		$	1		$	1,469		$	695		$	507		$	410
Ratios to average net assets:
Expenses, before reimbursements		2.05	%		3.22	%		3.71	%		3.20	%		186.19	%C		2.81	%		3.95	%		4.48	%		4.35	%
Expenses, net of reimbursements		1.47	%		1.49	%		1.49	%		1.47	%		1.49	%C		2.22	%		2.24	%		2.24	%		2.22	%
Net investment income (loss), before reimbursements		(0.14	)%		(0.62	)%		(1.26	)%		(1.29	)%		(183.90	)%C		(0.89	)%		(1.38	)%		(2.02	)%		(2.44	)%
Net investment income (loss), net of reimbursements		0.45	%		1.11	%		0.97	%		0.43	%		0.80	%C		(0.30	)%		0.33	%		0.23	%		(0.31	)%
Portfolio turnover rate		76	%		89	%		103	%		66	%		1	%D		76	%		89	%		103	%		66	%

^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 June 1 through August 31, 2010, and is not annualized.

^E Based on average shares outstanding.

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70

American Beacon SiM High Yield Opportunities Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class												Y Class
										Feb. 14												Feb. 14
	Year Ended August 31,									to			Year Ended August 31,									to
										Aug. 31,												Aug. 31,
	2014			2013			2012			2011			2014			2013			2012			2011
Net asset value, beginning of period	$	10.16		$	9.93		$	9.42		$	10.00		$	10.14		$	9.92		$	9.41		$	10.00
Income from investment operations:
Net investment income		0.64			0.75			0.77			0.37			0.64			0.73			0.76			0.36
Net gains (losses) from investments (both realized and unrealized)		0.47			0.26			0.51			(0.58	)		0.46			0.25			0.51			(0.59	)
Total income (loss) from investment operations		1.11			1.01			1.28			(0.21	)		1.10			0.98			1.27			(0.23	)
Less distributions:
Dividends from net investment income		(0.69	)		(0.75	)		(0.77	)		(0.37	)		(0.67	)		(0.73	)		(0.76	)		(0.36	)
Distributions from net realized gains		(0.23	)		(0.03	)		—			—			(0.23	)		(0.03	)		—			—
Total distributions		(0.92	)		(0.78	)		(0.77	)		(0.37	)		(0.90	)		(0.76	)		(0.76	)		(0.36	)
Redemption fees added to beneficial interests A		—			—			—			—			—			—			—			—
Net asset value, end of period	$	10.35		$	10.16		$	9.93		$	9.42		$	10.34		$	10.14		$	9.92		$	9.41
Total return B		11.34	%		10.29	%		14.19	%		(2.24	)%C		11.33	%		10.08	%		14.09	%		(2.44	)%C
Ratios and supplemental data:
Net assets, end of period (in thousands)	$	75,389		$	45,471		$	62,790		$	9,839		$	247,179		$	87,639		$	19,129		$	378
Ratios to average net assets:
Expenses, before reimbursements or recoupments		0.86	%		0.93	%		1.06	%		2.62	%D		0.94	%		0.99	%		1.09	%		5.04	%D
Expenses, net of reimbursements or recoupments		0.84	%		0.84	%		0.84	%		0.82	%D		0.94	%		0.93	%		0.94	%		0.92	%D
Net investment income, before reimbursements or recoupments		5.88	%		7.11	%		7.90	%		5.03	%D		5.77	%		6.77	%		7.92	%		2.87	%D
Net investment income, net of reimbursements or recoupments		5.90	%		7.20	%		8.12	%		6.83	%D		5.77	%		6.82	%		8.07	%		6.99	%D
Portfolio turnover rate		38	%		65	%		43	%		20	%E		38	%		65	%		43	%		20	%E

^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 Not annualized.

^D Annualized.

^E Portfolio turnover rate is for the period from February 14, 2011, the inception date, through August 31, 2011, and is not annualized.

71

American Beacon SiM High Yield Opportunities Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class												A Class												C Class
									Feb. 14												Feb. 14												Feb. 14
Year Ended August 31,									to			Year Ended August 31,									to			Year Ended August 31,									to
									Aug. 31,												Aug. 31,												Aug. 31,
2014			2013			2012			2011			2014			2013			2012			2011			2014			2013			2012			2011
$	10.12		$	9.90		$	9.38		$	10.00		$	10.15		$	9.92		$	9.41		$	10.00		$	10.16		$	9.94		$	9.42		$	10.00
	0.56			0.71			0.73			0.35			0.57			0.69			0.72			0.34			0.49			0.62			0.65			0.30
	0.52			0.25			0.52			(0.62	)		0.49			0.26			0.51			(0.59	)		0.50			0.25			0.52			(0.58	)
	1.08			0.96			1.25			(0.27	)		1.06			0.95			1.23			(0.25	)		0.99			0.87			1.17			(0.28	)
	(0.65	)		(0.71	)		(0.73	)		(0.35	)		(0.62	)		(0.69	)		(0.72	)		(0.34	)		(0.52	)		(0.62	)		(0.65	)		(0.30	)
	(0.23	)		(0.03	)		—			—			(0.23	)		(0.03	)		—			—			(0.23	)		(0.03	)		—			—
	(0.88	)		(0.74	)		(0.73	)		(0.35	)		(0.85	)		(0.72	)		(0.72	)		(0.34	)		(0.75	)		(0.65	)		(0.65	)		(0.30	)
	—			—			—			—			—			—			—			—			—			—			—			—
$	10.32		$	10.12		$	9.90		$	9.38		$	10.36		$	10.15		$	9.92		$	9.41		$	10.40		$	10.16		$	9.94		$	9.42
	11.08	%		9.84	%		13.92	%		(2.85	)%C		10.87	%		9.74	%		13.63	%		(2.61	)%C		10.12	%		8.81	%		12.90	%		(2.88	)%C
$	199,534		$	248,052		$	150,396		$	4,894		$	93,061		$	76,146		$	42,832		$	4,932		$	76,536		$	60,830		$	26,679		$	1,239
	1.11	%		1.15	%		1.23	%		2.78	%D		1.33	%		1.41	%		1.53	%		2.92	%D		2.08	%		2.15	%		2.26	%		4.03	%D
	1.11	%		1.17	%		1.19	%		1.19	%D		1.32	%		1.35	%		1.34	%		1.31	%D		2.07	%		2.09	%		2.09	%		2.07	%D
	5.68	%		6.81	%		7.74	%		5.14	%D		5.44	%		6.53	%		7.44	%		4.98	%D		4.68	%		5.76	%		6.70	%		3.98	%D
	5.68	%		6.79	%		7.78	%		6.73	%D		5.45	%		6.60	%		7.62	%		6.60	%D		4.69	%		5.82	%		6.87	%		5.94	%D
	38	%		65	%		43	%		20	%E		38	%		65	%		43	%		20	%E		38	%		65	%		43	%		20	%E

72

American Beacon Funds^SM

Privacy Policy and Federal Tax Information

August 31, 2014 (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 August 31, 2014. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2014.

The Funds designated the following items with regard to distributions paid during the fiscal year ended August 31, 2014. 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.

Corporate Dividends-Received Deduction:
The London Company Income Equity		83.94	%
Zebra Global Equity		51.23	%
Zebra Small Cap Equity		72.57	%
SiM High Yield Opportunities		3.99	%
Qualified Dividend Income:
The London Company Income Equity		100.00	%
Zebra Global Equity		100.00	%
Zebra Small Cap Equity		100.00	%
SiM High Yield Opportunities		2.78	%
Long-Term Capital Gain Distributions:
The London Company Income Equity	$	411,338
Zebra Global Equity		685,769
Zebra Small Cap Equity		606,276
SiM High Yield Opportunities		7,617,620
Short-Term Capital Gain Distributions:
The London Company Income Equity	$	628,140
Zebra Global Equity		611,243
Zebra Small Cap Equity		883,594
SiM High Yield Opportunities		5,872,346

Shareholders will receive notification in January 2015 of the applicable tax information necessary to prepare their 2014 income tax returns.

73

Disclosure Regarding the Board of Trustees’ Approval of the Management Agreement and Investment Advisory Agreements of the Funds (Unaudited)

At in-person meetings held on May 15, 2014 and June 5, 2014 (collectively, the “Meetings”), the Board of Trustees (“Board”) considered and then, at its June 5 meeting, approved: (1) the renewal of the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Beacon Trust”) and American Beacon Select Funds (“Select Trust”) on behalf of each of their series that had been operational for at least one year (collectively, the “Funds”); and (2) the renewal of the investment advisory agreements (each an “Investment Advisory Agreement”) among the Manager, each subadvisor and, as applicable, the Beacon Trust, other than the Investment Advisory Agreements with subadvisors with respect to which the Board approved a new Investment Advisory Agreement within the past year (each a “subadvisor”). The Management Agreement and the Investment Advisory Agreements are collectively referred to herein as the “Agreements.” In preparation for the Board to consider the renewal of these Agreements, the Board undertook steps to gather and consider information furnished by the Manager, the subadvisors, Lipper, Inc. (“Lipper”), Morningstar, Inc. (“Morningstar”), Bobroff Consulting, Inc. and Callan Associates, Inc. (“Callan”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and each subadvisor.

In advance of the Meetings, the Board’s Investment Committee coordinated the production of information from Lipper and Morningstar regarding the performance, fees and expenses of the Funds as well as information from the Manager and the subadvisors. At the Meetings, the Board considered the information provided. Further, the Board took into consideration information furnished for the Board’s review and consideration throughout the year at regular meetings of the Board and its committees, 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 on behalf of the Board included, among other information, the following materials. References herein to the “firm” refer to the Manager and/or each applicable subadvisor.

• comparisons of the performance of an appropriate share class of each Fund to comparable investment companies and appropriate benchmark indices, including peer group averages and performance analyses provided by Lipper and Morningstar, and to the performance of any similar accounts managed by the firm;

• for Funds having multiple firms managing assets, information regarding the performance of the individual firms with respect to their allocated portions of a Fund’s portfolio, and the performance of certain relevant benchmarks and other similar accounts managed by the firm;

• comparisons of each Fund’s management and subadvisory fee rates and expense ratio with those of comparable mutual funds, including peer group averages and fee and expense analyses provided by Lipper and Morningstar, and the advisory fee rates charged to other clients for which similar services are provided;

• a description of any applicable fee waivers and/or expense reimbursements in place for each Fund during the past year, and any proposed changes to the expense caps;

• the Manager’s profitability with respect to the services that it provided to each Fund;

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

• information regarding the securities lending, cash management, administrative and accounting-related services that the Manager provides to certain Funds and the fees that the Manager receives for such services, including Callan’s review of the Funds’ securities lending program; and

• information regarding a firm’s financial condition, the personnel who are or will be assigned primary responsibility for managing the Funds, staffing levels, portfolio managers’ compensation, disaster recovery plans, insurance coverage, material pending litigation, code of ethics, compliance matters, trading activities, and actual or potential conflicts of interest that the firm experiences, or anticipates that it will experience, in providing services to the Funds.

The Board considered that the Manager provides management and administrative services to the Funds pursuant to separate agreements. The Board noted, in this regard, that many mutual funds have a single contract governing both types of services, and observed that the actual management fee rates provided by Lipper for peer group funds reflect the combined advisory and administrative expenses, reduced by any fee waivers and/or reimbursements.

Certain firms may not have been able to, or opted not to, provide information in response to certain information requests, in which case the Board conducted its evaluation of those firms based on information that was provided. For each Fund with more than one class of shares, the class of shares used for comparative performance purposes was the share class with the lowest expenses available for purchase by the general public, which, in most cases, was the Institutional Class. For the American Beacon Holland Large Cap Growth Fund, the comparison was made using the Investor Class of shares due to the short period of time that its Institutional Class of shares has been in existence. 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 certain factors the Board considered in connection with its renewal and approval 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

74

Disclosure Regarding the Board of Trustees’ Approval of the Management Agreement and Investment Advisory Agreements of the Funds (Unaudited)

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 Meetings, 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) 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 clients); (5) the extent to which economies of scale have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect these economies of scale for the benefit of Fund investors; 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 staffing 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) as well as the Fund’s Morningstar rating. 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 certain Funds. 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 Manager represented that 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 share 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 and, in some instances, 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 certain Funds. In considering the management fees for overseeing the securities lending program, the Board reviewed the analysis of the securities lending program prepared by Callan. The Board also noted that certain share classes of the Funds maintain higher expense ratios in order to compensate third-party distributors.

In analyzing the fee rates charged by 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 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

75

Disclosure Regarding the Board of Trustees’ Approval of the Management Agreement and Investment Advisory Agreements of the Funds (Unaudited)

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, certain subadvisors have agreed to take into account assets of American Airlines Group 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 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 Board noted that certain subadvisors benefit from soft dollar arrangements for third party and proprietary research.

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 subadvisors reimburse the Manager for certain costs relating to distribution activities for the Funds, as well as representations by all such subadvisors that they would not reduce their fee rates in lieu of providing such reimbursements. 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 and Lipper performance group, with the 1^st Quintile representing the top twenty percent of the universe or group based on performance and the 5^th Quintile representing the bottom twenty percent of the universe or group based on performance. 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 and Lipper expense group, with the 1^st Quintile representing the top twenty percent of the universe or group based on lowest total expense and the 5th Quintile representing the bottom twenty percent of the universe or group based on highest total expense. 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. For all Funds, other than for the American Beacon Money Market Select Fund and American Beacon U.S. Government Money Market Select Fund for which information was not available, 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 The London Company Income Equity Fund

In considering the renewal of the Management Agreement and the Investment Advisory Agreement with The London Company of Virginia, LLC (“London Company”) for the American Beacon The London Company Income Equity Fund, the Trustees considered the following additional factors:

Lipper Total Expense Analysis and Morningstar Fee Level Ranking

76

Disclosure Regarding the Board of Trustees’ Approval of the Management Agreement and Investment Advisory Agreements of the Funds (Unaudited)

Compared to Lipper Expense Universe	2nd Quintile
Compared to Lipper Expense Group	2nd Quintile
Morningstar Fee Level Ranking - Institutional Class	Average Expense Ratio

Lipper Fund Performance Analysis (one-year period ended March 31, 2014)

Compared to Lipper Performance Universe	4th Quintile
Compared to Lipper Performance Group	5th Quintile

(1) Information provided by London Company that, for fee rate comparison purposes, it does not manage other accounts in the same strategy as the subadvisor manages the Fund; and (2) the Manager’s recommendation to continue to retain the subadvisor based upon, among other factors, the relatively brief period that this Fund has been in operation.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and subadvisor under the Management and Investment Advisory Agreements are fair and reasonable; (2) determined that the American Beacon The London Company Income Equity Fund and its shareholders would benefit from the Manager’s and 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 The London Company Income Equity Fund.

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

In considering the renewal of the Management Agreement and the Investment Advisory Agreement with Zebra Capital Management, LLC (“Zebra”) for the American Beacon Zebra Global Equity Fund, the Trustees considered the following additional factors:

Lipper Total Expense Analysis and Morningstar Fee Level Ranking

Compared to Lipper Expense Universe	1st Quintile
Compared to Lipper Expense Group	1st Quintile
Morningstar Fee Level Ranking - Institutional Class	Low Expense Ratio

Lipper Fund Performance Analysis (three-year period ended March 31, 2014)

Compared to Lipper Performance Universe	2nd Quintile
Compared to Lipper Performance Group	Not Available

(1) The Manager’s explanation that Zebra utilizes a unique, proprietary investment process only available in global equities through the Fund; (2) representations by Zebra that it does not manage accounts with comparable objectives and policies to the Fund; and (3) the Manager’s recommendation to continue to retain the subadvisor.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and the subadvisor under the Management and Investment Advisory Agreements are fair and reasonable; (2) determined that the American Beacon Zebra Global Equity Fund and its shareholders would benefit from the Manager’s and 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 Zebra Global Equity Fund.

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

In considering the renewal of the Management Agreement and the Investment Advisory Agreement with Zebra for the American Beacon Zebra Small Cap Equity Fund, the Trustees considered the following additional factors:

Lipper Total Expense Analysis and Morningstar Fee Level Ranking

Compared to Lipper Expense Universe	2nd Quintile
Compared to Lipper Expense Group	1st Quintile
Morningstar Fee Level Ranking - Institutional Class	Below Average Expense Ratio

Lipper Fund Performance Analysis (three-year period ended March 31, 2014)

Compared to Lipper Performance Universe	2nd Quintile
Compared to Lipper Performance Group	Not Available

(1) The Manager’s explanation that Zebra utilizes a unique, proprietary investment process only available in small cap equities through the Fund; (2) representations by Zebra that it does not manage accounts with comparable objectives and policies to the Fund; (3) the Manager’s recommendation to continue to retain the subadvisor.

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

77

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 SiM High Yield Opportunities Fund

In considering the renewal of the Management Agreement and the Investment Advisory Agreement with Strategic Income Management, LLC (“SiM”) for the American Beacon SiM High Yield Opportunities Fund, the Trustees considered the following additional factors:

Lipper Total Expense Analysis and Morningstar Fee Level Ranking

Compared to Lipper Expense Universe	3rd Quintile
Compared to Lipper Expense Group	4th Quintile
Morningstar Fee Level Ranking - Institutional Class	Above Average Expense Ratio

Lipper Fund Performance Analysis(three-year period ended March 31, 2014)

Compared to Lipper Performance Universe	1st Quintile
Compared to Lipper Performance Group	1st Quintile

(1) Information provided by SiM regarding fee rates charged for managing accounts in the same strategy as the subadvisor manages the Fund; and (2) the Manager’s recommendation to continue to retain the subadvisor.

Based on these and other considerations, the Trustees: (1) concluded that the fees paid to the Manager and subadvisor under the Management and Investment Advisory Agreements are fair and reasonable; (2) determined that the American Beacon SiM High Yield Opportunities Fund and its shareholders would benefit from the Manager’s and 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 SiM High Yield Opportunities Fund.

78

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 thirty-two 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** (56)	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** (77)	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).
	Term
NON-INTERESTED TRUSTEES	Lifetime of Trust until removal, resignation or retirement*
W. Humphrey Bogart (70)	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 (53)	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 (60)	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 (71)	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 (51)	Trustee since 2012	Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present).
R. Gerald Turner (68) 225 Perkins Admin. Bldg. Southern Methodist Univ. Dallas, Texas75275	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).

79

Trustees and Officers of the American Beacon Funds

(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
Gene L. Needles, Jr. (59)	President since 2009 Executive Vice President since 2009	President, CEO and Director (2009-Present), American Beacon Advisors, Inc.; 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 (2009-2012), American Beacon Mileage Funds; President (2008-2009), Touchstone Investments; President (2003-2007), CEO (2004-2007), AIM Distributors.
Rosemary K. Behan (55)	VP, Secretary and Chief Legal Officer since 2006	General Counsel, 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 (54)	VP since 2004	Vice President, Director of Sales, American Beacon Advisors, Inc. (2004-Present).
Wyatt Crumpler (48)	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 (60)	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 (53)	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 (50)	VP since 2010	Vice President, Enterprise Services (2009-Present) and Managing Director (2003-2009), American Beacon Advisors, Inc.
Jeffrey K. Ringdahl (39)	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 (51)	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) and Senior Compliance Analyst (1998-2004), American Beacon Advisors, Inc.
Sonia L. Bates (57)	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.

80

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 InvestorClasses Call (800) 658-5811	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO64121-9643
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.	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, which is available free of charge on the Fund’s website at 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 The London Company Income Equity Fund, American Beacon Zebra Global Equity Fund, American Beacon Zebra Small Cap Equity Fund, and American Beacon SiM High Yield Opportunities Fund are service marks of American Beacon Advisors, Inc.

AR 8/14

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 Ms. Brenda A Cline, a member of the Trust’s Audit and Compliance Committee, is an “audit committee financial expert” as defined in Form N-CSR. Ms. Cline is “independent” as defined in Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a)

Audit Fees		Fiscal Year Ended
$	209,783		8/31/2013
$	384,699		10/31/2013
$	168,847		12/31/2013
$	105,556		1/31/2014
$	403,681		8/31/2014
$	396,969		10/31/2014
$	236,768		12/31/2014
$	197,167		1/31/2015

(b)

Audit-Related Fees		Fiscal Year Ended
$	0		8/31/2013
$	0		10/31/2013
$	0		12/31/2013
$	0		1/31/2014
$	0		8/31/2014
$	0		10/31/2014
$	0		12/31/2014
$	0		1/31/2015

(c)

Tax Fees		Fiscal Year Ended
$	36,250		8/31/2013
$	70,713		10/31/2013
$	20,000		12/31/2013
$	10,500		1/31/2014
$	36,250		8/31/2014
$	63,017		10/31/2014
$	44,750		12/31/2014
$	42,330		1/31/2015

(d)

All Other Fees		Fiscal Year Ended
$	0		8/31/2013
$	0		10/31/2013
$	0		12/31/2013
$	0		1/31/2014
$	0		8/31/2014
$	0		10/31/2014
$	0		12/31/2014
$	0		1/31/2015

(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
$	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
$	36,250	$	0	N/A		8/31/2014
$	63,017	$	0	N/A		10/31/2014
$	44,750	$	0	N/A		12/31/2014
$	42,330	$	0	N/A		1/31/2015

(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 report 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: November 25, 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: November 25, 2014

By	/s/ Melinda G. Heika
	Melinda G. Heika Treasurer
	American Beacon Funds

Date: November 25, 2014

EX-99.CODE ETH

EXHIBIT 99.CODE ETH

For period ended 8/31/14

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;

2

• 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

3

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.

4

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

5

EX-99.CERT

EXHIBIT 99.CERT

For period ended 8/31/2014

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: November 25, 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: November 25, 2014	/s/ Gene L. Needles, Jr.
	Gene L. Needles, Jr.
	President
	American Beacon Funds

EX-99.906CERT

EXHIBIT 99.906CERT

For period ended 8/31/2014

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 August 31, 2014 (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: November 25, 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.