N-CSR

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

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)

220 East Las Colinas Boulevard, Suite 1200

Irving, Texas 75039

(Address of principal executive offices)-(Zip code)

GENE L. NEEDLES, JR., PRESIDENT

220 East Las Colinas Boulevard, Suite 1200

Irving, Texas 75039

(Name and address of agent for service)

Registrant’s telephone number, including area code: (817) 391-6100

Date of fiscal year end: October 31, 2019

Date of reporting period: October 31, 2019

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

ITEM 1. REPORTS TO STOCKHOLDERS.

About American Beacon Advisors

Since 1986, American Beacon Advisors has offered a variety of products and investment advisory services to numerous institutional and retail clients, including a variety of mutual funds, corporate cash management, and separate account management.

Our clients include defined benefit plans, defined contribution plans, foundations, endowments, corporations, financial planners, and other institutional investors. With American Beacon Advisors, you can put the experience of a multi-billion dollar asset management firm to work for your company.

BALANCED FUND RISKS

The use of fixed-income securities entails interest rate and credit risks. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

MID-CAP VALUE FUND RISKS

Investing in medium-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

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

American Beacon Funds October 31, 2019

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	9
Report of Independent Registered Public Accounting Firm	11
Schedules of Investments:
American Beacon Balanced Fund	12
American Beacon Mid-Cap Value Fund	27
Financial Statements	33
Notes to Financial Statements	37
Financial Highlights:
American Beacon Balanced Fund	65
American Beacon Mid-Cap Value Fund	71
Federal Tax Information	78
Disclosure Regarding Approval of the Management and Investment Advisory Agreements	79
Trustees and Officers of the American Beacon Funds	85
Privacy Policy	92

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   In recent months, you’ve likely seen and heard news reports about disruptive headwinds in the global economy – including the U.S. trade war with China and its toll on the global economy, slowing global growth, the Federal Reserve’s series of rate cuts, Brexit, disruptions in the Middle East and protests in Hong Kong – and watched a flood of reaction in the world’s markets.   As Peter L. Bernstein said in his treatise on risk, Against the Gods: The Remarkable Story of Risk, published by John Wiley & Sons, Inc. in September 1998, “Volatility is a proxy for uncertainty and must be accommodated in measuring investment risk.”   During times of economic uncertainty and market volatility, fear of loss can be a powerful emotion – one that drives many investors to making short-term decisions subject to a variety of potential error-leading biases. Unfortunately, some short-term investment decisions may create more volatility rather than mitigate it.

Instead of dwelling on the markets’ short-term reaction to waves of negative global news, we encourage investors to focus on the horizon instead. Long-term investing isn’t about identifying and anticipating the next big market move, it is about identifying the right investment products for riding out those moves. As a long-term investor, you should keep in mind the three Ds: direction, discipline and diversification.

u Direction: Achieving your long-term financial goals requires an individualized plan of action. You may want your plan to provide some measure of protection against periods of geopolitical turmoil, economic uncertainty, market volatility and job insecurity. Your plan should be reviewed annually and be adjusted in the event your long-range needs change.

u Discipline: Long-term, systematic participation in an investment portfolio requires your resolution to stay the course. Spending time in the market – rather than trying to time the market – may place you in a better position to reach your long-term financial goals.

u Diversification: By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your investment portfolio. By allocating your investment portfolio according to your risk-tolerance level, you may be better positioned to weather storms and achieve your long-term financial goals.

Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term financial goals. As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings.

Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for long-term rewards.

Our management approach is more than a concept; it’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment solutions to help our shareholders seek long-term rewards while mitigating volatility and risk.

Thank you for your continued interest in American Beacon. For additional information about our investment products 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 Bond and Domestic Equity Market Overviews

October 31, 2019 (Unaudited)

Domestic Bond Market Overview

During the 12 months ended October 31, 2019, the Federal Reserve (the “Fed”) hiked the federal funds rate in December 2018, paused for the first half of 2019, and then cut the rate three times in as many meetings. The most recent meeting, held at the end of October, saw the Fed vote to cut its target rate to a range of 1.50% to 1.75%. However, the Fed also indicated its “midcycle adjustment” was complete. The official statement changed with regard to future actions by removing the phrase “will act as appropriate to sustain the expansion,” which was added in advance of the recent rate cuts, addressing economic “uncertainties” and “muted inflation pressures.” Fed Chairman Jerome Powell was more explicit about the completion of the midcycle adjustment at his October press conference when he said further easing would only be needed if developments forced a “material reassessment” of the outlook. He was likely encouraged by recent developments on global trade since U.S. officials indicated they were “close to finalizing” sections of the Phase One agreement with China and the European Union granted the U.K. a Brexit extension. Additionally, the first release of third quarter GDP was reported at 1.9%, which surprised to the upside on solid consumer spending.

Multiple rate cuts from the Fed and uncertainties around global trade caused interest rates to decline and the yield curve to steepen during the period. The 10-year Treasury yield fell 145 basis points (or 1.45%) to 1.69%. The two-year Treasury yield declined 132 basis points (or 1.32%) to 1.52%, and the 30-year Treasury yield declined 121 basis points (or 1.21%) to 2.17%. These moves caused the two- to 30-year Treasury yield spread to increase by 11 basis points (or 0.11%) to 65 basis points (or 0.65%).

With the decline in rates during the year, the bond market posted a positive return of 11.51%, according to the Bloomberg Barclays U.S. Aggregate Bond Index. Spread product was mostly in favor over the period as three of the four spread sectors posted positive excess returns. The leader was the corporate sector with an excess return of 232 basis points (or 2.32%). The agency and asset-backed sectors followed with excess returns of 107 basis points (or 1.07%) and 59 basis points (or 0.59%), respectively. The laggard was the mortgage-backed sector with a negative excess return of -11 basis points (or -0.11%). Overall, the Bloomberg Barclays U.S. Aggregate Bond Index had an excess return of 63 basis points (or 0.63%) for the period.

Domestic Equity Market Overview

For the 12-month period ended October 31, 2019, the U.S. equity markets rallied strongly after a depressed start to the period that saw market volatility spike to its highest level in seven years during the fourth quarter of 2018. The S&P 500 Index and the Dow Jones Industrial Average returned 14.33% and 10.32%, respectively, for the period. Growth broadly outperformed Value across all market caps; the Russell 1000 Growth Index and the Russell 1000 Value Index returned 17.10% and 11.21%, respectively, and the Russell Midcap Growth Index and the Russell Midcap Value Index returned 18.93% and 10.08%, respectively. Large and mid-cap stocks also did significantly better than small-cap stocks; the Russell 1000 Index returned 14.15% and the Russell Midcap Index returned 13.72%, compared to the Russell 2000 Index return of 4.90%.

All of this occurred in an environment that saw rising fears of economic recession as the current expansion entered its 11th year, intensified by the effects of an escalating trade war, as well as concerns over the ability of the Fed policy to forestall the effects of an economic downturn. Feeding these uncertainties, growth slowed during the period as the third quarter’s gross domestic product decelerated to 1.9% from its peak rate of 3.5% in the second quarter of 2018. Corporate earnings growth also slowed with profit growth.

The Fed did alter its policy course at year end 2018 and began lowering the federal funds rate in the third quarter of 2019. At the same time, the economic strength underlying the U.S. economy remained resilient with the September unemployment rate at 3.5%, a 40-year low. In addition, the consumer continued to show good strength with both income and expenditures growing at healthy rates. Also, ongoing tariff negotiations between the U.S. and China are providing hope to prospects of settlement. Collectively, all of these factors kept the markets positive going into the fiscal year end.

2

American Beacon Balanced Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

The Investor Class of the American Beacon Balanced Fund (the “Fund”) returned 10.50% for the twelve months ended October 31, 2019, underperforming the 60% Russell 1000^® Value Index/40% Bloomberg Barclays U.S. Aggregate Bond Index (“Balanced Composite Index”) return of 11.82% for the same period.

Comparison of Change in Value of a $10,000 Investment for the period from 10/31/2009 through 10/31/2019

Total Returns for the Period ended October 31, 2019
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of $10,000 10/31/2009- 10/31/2019
Institutional Class (1,7)	AADBX		10.89	%		9.00	%		5.98	%		8.98	%		$	23,623
Y Class (1,2,7)	ACBYX		10.75	%		9.04	%		5.95	%		8.90	%		$	23,456
Investor Class (1,7)	AABPX		10.50	%		8.70	%		5.65	%		8.62	%		$	22,867
Advisor Class (1,7)	ABLSX		10.34	%		8.54	%		5.48	%		8.45	%		$	22,509
A Class without sales charge (1,3,7)	ABFAX		10.54	%		8.70	%		5.62	%		8.55	%		$	22,712
A Class with sales charge (1,3,7)	ABFAX		4.16	%		6.57	%		4.38	%		7.91	%		$	21,404
C Class without sales charge (1,4,7)	ABCCX		9.63	%		7.89	%		4.84	%		7.79	%		$	21,176
C Class with sales charge (1,4,7)	ABCCX		8.63	%		7.89	%		4.84	%		7.79	%		$	21,176
Balanced Composite Index (5)			11.82	%		7.81	%		6.05	%		8.85	%		$	23,342
Russell 1000® Value Index (6)			11.21	%		10.51	%		7.61	%		11.96	%		$	30,959
Bloomberg Barclays US Aggregate Bond Index (6)			11.51	%		3.29	%		3.24	%		3.73	%		$	14,421

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights.

3

American Beacon Balanced Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

2. Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 10/31/09 up to 3/1/10, the inception date of the Y Class, and the returns of the Y Class since its inception. Expenses of the Y Class are higher than those of the Institutional Class. Therefore, total returns shown may be higher than they would have been had the Y Class been in existence since 10/31/09. A portion of the fees charged to the Y Class of the Fund was waived in 2011, partially recovered in 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown for 2011.

3. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the A Class been in existence since 10/31/09. A portion of the fees charged to the A Class of the Fund was waived in 2011 and 2012, partially recovered in 2013, fully recovered in 2014 and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown for 2011, 2012 and 2018. A Class has a maximum sales charge of 5.75%.

4. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. Therefore, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/09. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012, partially recovered in 2013, fully recovered in 2014 and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012 and for 2018. The maximum contingent deferred sales charge for C Class is 1% for shares redeemed within one year of the date of purchase.

5. To reflect the Fund’s allocation of its assets between investment-grade fixed-income securities and equity securities, the returns of the Russell 1000 Value Index and the Bloomberg Barclays U.S. Aggregate Bond Index have been combined in a 60% / 40% proportion.

6. The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. The Bloomberg Barclays U.S. Aggregate Bond Index is a market value weighted index of government, corporate, mortgage-backed and asset-backed fixed-rate debt securities of all maturities. One cannot directly invest in an index.

7. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, and C Class shares were 0.62%, 0.70%, 0.95%, 1.12%, 0.91% and 1.66%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

During the twelve-month period, the Fund’s assets on average were invested 63% in equities (including equitized cash) and 37% in fixed-income securities, ending the period with 61% in equities (including equitized cash) and 39% in fixed-income securities.

The equity portion of the Fund (excluding equitized cash) returned 10.0% for the period, underperforming the Russell 1000 Value Index (the “Index”) return of 11.2%. The Fund underperformed the Index as sector allocation outweighed the benefits gained from stock selection relative to the Index.

Stock selection in the Consumer Discretionary and Financials sectors contributed the majority of the positive relative performance during the twelve-month period. In the Consumer Discretionary sector, the Fund’s position in Dollar General Corp. (up 44.6%) and PulteGroup, Inc. (up 63.9%) were the biggest additives. In the Financials sector, American International Group, Inc. (up 33.8%) and The Blackstone Group LP (up 49.5%) performed well. Conversely, positions in Altria Group Inc. (down 26.2%) and Imperial Brands PLC, Sponsored ADR (down 29.0%) both detracted from performance with the Consumer Staples sector.

The Fund’s overweight to Energy (down 12.3%) and underweight to Real Estate (up 25.2%) hurt performance the most through sector allocation. On the other side, being overweight in Information Technology (up 20.0%) helped buoy some of the Fund’s relative underperformance.

The fixed-income portion of the Fund returned 13.0% for the twelve-month period, outperforming the Bloomberg Barclays U.S. Aggregate Bond Index (the “Barclays Index”) return of 11.5%. The Fund’s fixed-income excess performance relative to the Barclays Index was due to both sector allocation and security selection. The Fund’s selections in U.S. Treasuries (up 13.9%) and Consumer Corporates (up 25.7%) added relative value. Also, an

4

American Beacon Balanced Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

underweight to Mortgage-Backed Securities (“MBS”) (up 9.1%) and an overweight to Manufacturing (up 14.7%), within Corporates, also benefited the Fund. From a duration perspective, the portfolio was helped most by an overweight allocation in the 10 to 30 year maturity and an underweight allocation in the 1 to 3 year maturity range.

The sub-advisors continue to focus on the disciplined selection of attractive securities that should allow the Fund to benefit long-term.

Top Ten Holdings (% Net Assets)
U.S. Treasury Notes/Bonds, 1.766%, Due 4/30/2021, (3-mo. Treasury money market yield + 0.139%)		5.1
U.S. Treasury Notes/Bonds, 1.857%, Due 7/31/2021, (3-mo. Treasury money market yield + 0.220%)		3.9
Citigroup, Inc.		1.7
Microsoft Corp.		1.6
American International Group, Inc.		1.5
Bank of America Corp.		1.5
Wells Fargo & Co.		1.5
General Motors Co.		1.4
Medtronic PLC		1.4
Oracle Corp.		1.3
Total Fund Holdings	491
Sector Allocation (% Equities)
Financials		21.6
Energy		14.3
Health Care		12.1
Consumer Discretionary		11.3
Information Technology		10.8
Industrials		9.3
Communication Services		7.2
Materials		6.0
Consumer Staples		4.1
Utilities		3.1
Real Estate		0.2
Sector Allocation (% Fixed Income)
U.S. Treasury Obligations		44.0
U.S. Agency Mortgage-Backed Obligations		14.3
Financial		10.3
Technology		7.0
Consumer, Non-Cyclical		4.5
Communications		4.4
Energy		3.4
Industrial		2.8
Utilities		2.7
Consumer, Cyclical		2.3
Commercial Mortgage-Backed Obligations		1.7
Asset-Backed Obligations		1.4
Basic Materials		0.7
Foreign Sovereign Obligations		0.4
Collateralized Mortgage Obligations		0.1

5

American Beacon Mid-Cap Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

The Investor Class of the American Beacon Mid-Cap Value Fund (the “Fund”) returned 6.79% for the twelve months ended October 31, 2019, underperforming the Russell Midcap^® Value Index (the “Index”) return of 10.08% for the same period.

Comparison of Change in Value of a $10,000 Investment for the period from 10/31/2009 through 10/31/2019

Total Returns for the Period ended October 31, 2019
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of $10,000 10/31/2009- 10/31/2019
Institutional Class (1,3,10)	AACIX		7.08	%		7.53	%		5.51	%		11.57	%		$	29,899
Y Class (1,4,10)	ACMYX		7.04	%		7.46	%		5.46	%		11.51	%		$	29,716
Investor Class (1,2,10)	AMPAX		6.79	%		7.29	%		5.27	%		11.38	%		$	29,390
Advisor Class (1,5,10)	AMCSX		6.50	%		6.98	%		4.97	%		10.98	%		$	28,354
A Class without sales charge (1,6,10)	ABMAX		6.64	%		7.09	%		5.11	%		11.09	%		$	28,617
A Class with sales charge (1,6,10)	ABMAX		0.54	%		4.99	%		3.87	%		10.43	%		$	26,970
C Class without sales charge (1,7,10)	AMCCX		5.94	%		6.37	%		4.36	%		10.35	%		$	26,784
C Class with sales charge (1,7,10)	AMCCX		4.94	%		6.37	%		4.36	%		10.35	%		$	26,784
R6 Class (1,8,10)	AMDRX		7.15	%		7.55	%		5.53	%		11.58	%		$	29,919
Russell Midcap® Value Index (9)	AMDRX		10.08	%		8.90	%		6.95	%		12.90	%		$	33,652

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights.

2. A portion of the fees charged to the Investor Class of the Fund was waived from 2006 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than actual returns shown for 2006 to 2013.

6

American Beacon Mid-Cap Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

3. A portion of the fees charged to the Institutional Class of the Fund was waived from 2005 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than actual returns shown for 2005 to 2013.

4. Fund performance for the ten-year period represents the total returns achieved by the Institutional Class from 10/31/09 up to 3/1/10, the inception date of the Y Class and the returns of the Y Class since its inception. Expenses of the Institutional Class are lower than those of the Y Class. As a result, total returns shown may be higher than they would have been had the Y Class been in existence since 10/31/09. A portion of the fees charged to the Y Class of the Fund was waived from 2010 through 2013. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2013.

5. A portion of the fees charged to the Advisor Class of the Fund was waived from 2007 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown for 2007 to 2013.

6. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the Investor Class are lower than those of the A Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 10/31/09. A portion of the fees charged to the A Class of the Fund was waived for 2010 through 2012 and fully recovered in 2013. Performance prior to waiving fees was lower than the actual returns shown from 2010 through 2012. A Class shares have a maximum sales charge of 5.75%.

7. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the Investor Class are lower than those of the C Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/09. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2013. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

8. Fund performance for the three-year, five-year and ten-year periods represents the returns achieved by the Institutional Class from 10/31/09 through 2/28/18, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 10/31/09. A portion of fees charged to the R6 Class of the Fund has been waived since Class inception. Performance prior to waiving fees was lower than actual returns shown since inception.

9. The Russell Midcap Value Index is an unmanaged index of those stocks in the Russell Midcap Index with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index. Russell Midcap Value Index, Russell Midcap Index and Russell 1000 Index are registered trademarks of Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. One cannot directly invest in an index.

10. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C, and R6 Class shares were 0.86%, 0.94%, 1.13%, 1.40%, 1.26%, 1.88% and 3.10%, 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 trailed the Index due to sector allocation, while stock selection added value for the period.

In sector allocation, the Fund’s overweight position in Energy, the worst performing sector in the Index, was the primary driver of underperformance. Underweights to Real Estate and Utilities, two of the best performers for the Index, further detracted from relative returns. Offsetting some of this underperformance were underweight positions in the Health Care and Consumer Staples sectors, both of which were low performing sectors for the Index.

From a stock selection perspective, the Fund’s relative outperformance was driven by holdings in the Financials, Industrials, and Consumer Discretionary sectors. Within Financials, Fidelity National Financial, Inc. was up 40.8%, Apollo Global Management, Inc. was up 51.0%, and Willis Towers Watson PLC was up 32.0%. Companies in the Industrials sector adding to relative performance included Transdigm Group, Inc. (up 72.3%) and Carlisle Cos., Inc. (up 50.1%). In Consumer Discretionary, the Fund avoided Index-position Tapestry, Inc. (down 36.1%), while holdings in Aaron’s, Inc. and Dollar General Corp. were up 58.9% and 45.7%, respectively. Offsetting this performance were positions in the Utilities and Real Estate sectors. Within Utilities, PG&E Corp. was down 67.4% for the period. In the Real Estate sector, Realogy Holdings Corp. was down 55.7%, and the Fund did not hold Index-position Camden Property Trust, which was up 30.7% for the year.

The sub-advisors’ philosophy of investing in undervalued companies that exhibit improving profitability and earnings growth potential should allow the Fund to benefit longer term.

7

American Beacon Mid-Cap Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

Top Ten Holdings (% Net Assets)
Axis Capital Holdings Ltd.		2.3
Fidelity National Financial, Inc.		1.9
Stanley Black & Decker, Inc.		1.8
Fifth Third Bancorp		1.7
Marvell Technology Group Ltd.		1.6
MGM Growth Properties LLC, Class A		1.6
TransDigm Group, Inc.		1.5
Universal Health Services, Inc., Class B		1.4
Halliburton Co.		1.3
Wabtec Corp.		1.3
Total Fund Holdings	114
Sector Allocation (% Equities)
Financials		22.8
Industrials		18.7
Consumer Discretionary		17.3
Energy		8.2
Information Technology		7.8
Real Estate		7.5
Utilities		6.0
Health Care		4.9
Materials		4.5
Communication Services		1.8
Consumer Staples		0.5

8

American Beacon Funds^SM

Expense Examples

October 31, 2019 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2019 through October 31, 2019.

Actual Expenses

The “Actual” lines on the tables provide information about actual account values and actual expenses. You may use the information on this page, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = $8.60), then multiply the result by the “Expenses Paid During Period” for the applicable Fund to estimate the expenses you paid on your account during this period. Shareholders of the Investor and Institutional Classes that invest in 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” line of the tables 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 Funds 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 Funds 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 Funds, such as sales charges (loads) or redemption fees, as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.

9

American Beacon Funds^SM

Expense Examples

October 31, 2019 (Unaudited)

American Beacon Balanced Fund
	Beginning Account Value 5/1/2019		Ending Account Value 10/31/2019		Expenses Paid During Period 5/1/2019-10/31/2019*
Institutional Class
Actual		$1,000.00		$1,039.30		$3.44
Hypothetical**		$1,000.00		$1,021.83		$3.41
Y Class
Actual		$1,000.00		$1,038.00		$3.85
Hypothetical**		$1,000.00		$1,021.43		$3.82
Investor Class
Actual		$1,000.00		$1,037.30		$5.14
Hypothetical**		$1,000.00		$1,020.16		$5.09
Advisor Class
Actual		$1,000.00		$1,036.60		$5.95
Hypothetical**		$1,000.00		$1,019.36		$5.90
A Class
Actual		$1,000.00		$1,037.40		$5.19
Hypothetical**		$1,000.00		$1,020.11		$5.14
C Class
Actual		$1,000.00		$1,033.00		$9.02
Hypothetical**		$1,000.00		$1,016.33		$8.94

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.67%, 0.75%, 1.00%, 1.16%, 1.01%, and 1.76% for the Institutional, Y, Investor, Advisor, 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.

American Beacon Mid-Cap Value Fund
	Beginning Account Value 5/1/2019		Ending Account Value 10/31/2019		Expenses Paid During Period 5/1/2019-10/31/2019*
Institutional Class
Actual		$1,000.00		$995.50		$4.98
Hypothetical**		$1,000.00		$1,020.22		$5.04
Y Class
Actual		$1,000.00		$996.10		$5.18
Hypothetical**		$1,000.00		$1,020.01		$5.24
Investor Class
Actual		$1,000.00		$994.90		$6.24
Hypothetical**		$1,000.00		$1,018.96		$6.31
Advisor Class
Actual		$1,000.00		$993.40		$7.59
Hypothetical**		$1,000.00		$1,017.59		$7.68
A Class
Actual		$1,000.00		$993.40		$7.54
Hypothetical**		$1,000.00		$1,017.64		$7.63
C Class
Actual		$1,000.00		$990.40		$10.33
Hypothetical**		$1,000.00		$1,014.82		$10.46
R6 Class
Actual		$1,000.00		$996.10		$4.18
Hypothetical**		$1,000.00		$1,021.02		$4.23

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.99%, 1.03%, 1.24%, 1.51%, 1.50%, 2.06%, and 0.83% for the Institutional, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

10

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities of American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund (collectively referred to as the “Funds”), (two of the funds constituting American Beacon Funds (the “Trust”)), including the schedules of investments, as of October 31, 2019, 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, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds at October 31, 2019, 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 their financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2019, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more American Beacon investment companies since 1987.

Dallas, Texas

December 30, 2019

11

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 58.93%
Communication Services - 4.26%
Diversified Telecommunication Services - 0.82%
AT&T, Inc.		55,073		$	2,119,760
Interactive Media & Services - 0.74%
Alphabet, Inc., Class AA		690			868,572
Facebook, Inc., Class AA		5,500			1,054,075
					1,922,647
Media - 2.27%
CBS Corp., Class B, NVDR		11,852			427,146
Comcast Corp., Class A		67,029			3,004,240
Discovery, Inc., Class CA		44,799			1,130,727
Interpublic Group of Cos., Inc.		13,000			282,750
News Corp., Class A		55,500			760,905
Omnicom Group, Inc.		3,586			276,803
					5,882,571
Wireless Telecommunication Services - 0.43%
Vodafone Group PLC, Sponsored ADRB		54,132			1,105,375
Total Communication Services					11,030,353
Consumer Discretionary - 6.66%
Auto Components - 0.97%
Adient PLC		15,732			333,361
Goodyear Tire & Rubber Co.		30,759			488,145
Magna International, Inc.		31,427			1,689,830
					2,511,336
Automobiles - 1.58%
General Motors Co.		99,391			3,693,370
Harley-Davidson, Inc.		10,541			410,150
					4,103,520
Hotels, Restaurants & Leisure - 0.63%
Aramark		25,988			1,137,235
Norwegian Cruise Line Holdings Ltd.A		9,565			485,519
					1,622,754
Household Durables - 0.99%
DR Horton, Inc.		13,011			681,386
Mohawk Industries, Inc.A		6,800			974,984
PulteGroup, Inc.		23,100			906,444
					2,562,814
Internet & Direct Marketing Retail - 0.17%
eBay, Inc.		12,200			430,050
Multiline Retail - 1.11%
Dollar General Corp.		17,867			2,864,795
Specialty Retail - 1.21%
Advance Auto Parts, Inc.		6,195			1,006,564
Lowe’s Cos., Inc.		19,078			2,129,295
					3,135,859
Total Consumer Discretionary					17,231,128

See accompanying notes

12

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 58.93% (continued)
Consumer Staples - 2.42%
Beverages - 0.43%
Molson Coors Brewing Co., Class B		21,000		$	1,107,120
Food Products - 0.82%
Ingredion, Inc.		9,200			726,800
Mondelez International, Inc., Class A		7,800			409,110
Tyson Foods, Inc., Class A		12,100			1,001,759
					2,137,669
Personal Products - 0.30%
Unilever PLC, Sponsored ADR		12,900			775,419
Tobacco - 0.87%
Altria Group, Inc.		17,589			787,812
Imperial Brands PLC, Sponsored ADR		22,104			486,288
Philip Morris International, Inc.		12,039			980,456
					2,254,556
Total Consumer Staples					6,274,764
Energy - 8.40%
Energy Equipment & Services - 1.40%
Halliburton Co.		69,700			1,341,725
National Oilwell Varco, Inc.		46,100			1,042,782
Schlumberger Ltd.		38,000			1,242,220
					3,626,727
Oil, Gas & Consumable Fuels - 7.00%
Apache Corp.		38,814			840,711
BP PLC, Sponsored ADR		88,835			3,367,735
Canadian Natural Resources Ltd.		69,565			1,754,429
Chevron Corp.		20,060			2,329,768
ConocoPhillips		52,202			2,881,550
Hess Corp.		15,332			1,008,079
Kosmos Energy Ltd.		34,869			216,188
Marathon Oil Corp.		76,931			887,015
Marathon Petroleum Corp.		7,531			481,608
Murphy Oil Corp.B		29,575			610,132
Phillips 66		18,747			2,190,025
Royal Dutch Shell PLC, Class A, Sponsored ADR		13,835			802,015
Royal Dutch Shell PLC, Class B, Sponsored ADR		12,500			728,625
					18,097,880
Total Energy					21,724,607
Financials - 12.73%
Banks - 6.75%
Banco Santander S.A., Sponsored ADRB		156,400			619,344
Bank of America Corp.		123,578			3,864,284
CIT Group, Inc.		5,850			250,906
Citigroup, Inc.		59,266			4,258,855
Citizens Financial Group, Inc.		23,068			811,071
Fifth Third Bancorp		9,800			284,984
JPMorgan Chase & Co.		27,262			3,405,569
Wells Fargo & Co.		77,032			3,977,162
					17,472,175

See accompanying notes

13

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 58.93% (continued)
Financials - 12.73% (continued)
Capital Markets - 1.48%
Bank of New York Mellon Corp.		5,915		$	276,526
E*TRADE Financial Corp.		12,500			522,375
Goldman Sachs Group, Inc.		7,697			1,642,386
Morgan Stanley		12,037			554,304
State Street Corp.		12,706			839,485
					3,835,076
Consumer Finance - 1.11%
Capital One Financial Corp.		11,929			1,112,379
Discover Financial Services		6,200			497,612
Navient Corp.		32,214			443,587
SLM Corp.		96,249			812,342
					2,865,920
Diversified Financial Services - 1.04%
AXA Equitable Holdings, Inc.		37,100			801,360
Berkshire Hathaway, Inc., Class BA		8,849			1,881,121
					2,682,481
Insurance - 1.84%
American International Group, Inc.		74,608			3,951,240
Travelers Cos., Inc.		6,257			820,042
					4,771,282
Mortgage Real Estate Investment Trusts (REITs) - 0.51%
Annaly Capital Management, Inc.		91,900			825,262
Two Harbors Investment Corp.		35,200			488,224
					1,313,486
Total Financials					32,940,420
Health Care - 7.14%
Biotechnology - 0.52%
AbbVie, Inc.		7,100			564,805
Biogen, Inc.A		1,072			320,217
Gilead Sciences, Inc.		7,420			472,728
					1,357,750
Health Care Equipment & Supplies - 1.73%
Medtronic PLC		32,468			3,535,765
Zimmer Biomet Holdings, Inc.		6,732			930,565
					4,466,330
Health Care Providers & Services - 1.86%
Anthem, Inc.		6,673			1,795,571
Centene Corp.A		5,800			307,864
CVS Health Corp.		27,922			1,853,741
HCA Healthcare, Inc.		2,200			293,788
UnitedHealth Group, Inc.		2,200			555,940
					4,806,904
Pharmaceuticals - 3.03%
AstraZeneca PLC, Sponsored ADR		11,700			573,651
Bristol-Myers Squibb Co.		23,993			1,376,478
GlaxoSmithKline PLC, Sponsored ADR		18,743			858,429
Horizon Therapeutics PLCA		11,812			341,485

See accompanying notes

14

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 58.93% (continued)
Health Care - 7.14% (continued)
Pharmaceuticals - 3.03% (continued)
Jazz Pharmaceuticals PLCA		3,793		$	476,515
Johnson & Johnson		5,500			726,220
Merck & Co., Inc.		12,385			1,073,284
Mylan N.V.A		15,744			301,498
Pfizer, Inc.		23,600			905,532
Sanofi, ADR		26,011			1,198,587
					7,831,679
Total Health Care					18,462,663
Industrials - 5.48%
Aerospace & Defense - 0.88%
Embraer S.A., Sponsored ADR		9,024			156,747
General Dynamics Corp.		2,533			447,834
Raytheon Co.		4,957			1,051,925
United Technologies Corp.		4,338			622,850
					2,279,356
Air Freight & Logistics - 0.21%
FedEx Corp.		3,600			549,576
Airlines - 0.45%
American Airlines Group, Inc.		38,561			1,159,144
Building Products - 0.67%
Johnson Controls International PLC		40,114			1,738,140
Construction & Engineering - 0.09%
Fluor Corp.		13,600			219,096
Electrical Equipment - 0.17%
Eaton Corp. PLC		4,883			425,358
Industrial Conglomerates - 1.74%
General Electric Co.		331,840			3,311,763
Honeywell International, Inc.		6,949			1,200,301
					4,512,064
Machinery - 0.95%
CNH Industrial N.V.B		101,180			1,103,874
Cummins, Inc.		6,272			1,081,795
PACCAR, Inc.		3,639			276,782
					2,462,451
Trading Companies & Distributors - 0.32%
AerCap Holdings N.V.A		14,391			832,951
Total Industrials					14,178,136
Information Technology - 6.37%
Communications Equipment - 0.26%
Telefonaktiebolaget LM Ericsson, Sponsored ADR		77,020			671,615
Electronic Equipment, Instruments & Components - 0.86%
Corning, Inc.		39,495			1,170,237
IPG Photonics Corp.A		5,000			671,400

See accompanying notes

15

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 58.93% (continued)
Information Technology - 6.37% (continued)
Electronic Equipment, Instruments & Components - 0.86% (continued)
TE Connectivity Ltd.		4,358		$	390,041
					2,231,678
Semiconductors & Semiconductor Equipment - 1.61%
Marvell Technology Group Ltd.		42,600			1,039,014
NVIDIA Corp.		3,900			783,978
QUALCOMM, Inc.		24,214			1,947,774
Texas Instruments, Inc.		3,300			389,367
					4,160,133
Software - 3.01%
Microsoft Corp.		28,824			4,132,497
Oracle Corp.		63,899			3,481,856
Teradata Corp.A		5,718			171,140
					7,785,493
Technology Hardware, Storage & Peripherals - 0.63%
Hewlett Packard Enterprise Co.		98,808			1,621,439
Total Information Technology					16,470,358
Materials - 3.56%
Chemicals - 2.24%
Air Products & Chemicals, Inc.		10,485			2,236,031
Corteva, Inc.A		27,072			714,159
Dow, Inc.A		12,001			605,931
DuPont de Nemours, Inc.		16,972			1,118,625
Eastman Chemical Co.		8,785			668,011
Huntsman Corp.		19,900			440,387
					5,783,144
Containers & Packaging - 0.73%
Crown Holdings, Inc.A		16,235			1,182,557
International Paper Co.		16,225			708,708
					1,891,265
Metals & Mining - 0.59%
Freeport-McMoRan, Inc.		37,000			363,340
Newmont Goldcorp Corp.		29,500			1,172,035
					1,535,375
Total Materials					9,209,784
Real Estate - 0.10%
Equity Real Estate Investment Trusts (REITs) - 0.10%
Gaming and Leisure Properties, Inc.		6,200			250,232
Utilities - 1.81%
Electric Utilities - 1.40%
Entergy Corp.		15,454			1,877,352
PPL Corp.		35,447			1,187,120
Southern Co.		8,843			554,102
					3,618,574

See accompanying notes

16

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Shares			Fair Value
COMMON STOCKS - 58.93% (continued)
Utilities - 1.81% (continued)
Multi-Utilities - 0.41%
Dominion Energy, Inc.			13,060		$	1,078,103
Total Utilities						4,696,677
Total Common Stocks (Cost $122,984,159)						152,469,122
	Principal Amount
CORPORATE OBLIGATIONS - 11.45%
Basic Materials - 0.22%
Dow Chemical Co.,
4.125%, Due 11/15/2021		$	145,000			150,266
3.500%, Due 10/1/2024			264,000			277,089
Nucor Corp.,
4.125%, Due 9/15/2022			52,000			54,808
4.000%, Due 8/1/2023			80,000			84,956
						567,119
Communications - 0.95%
Amazon.com, Inc., 3.875%, Due 8/22/2037			40,000			45,482
AT&T, Inc.,
3.400%, Due 5/15/2025			169,000			177,079
6.000%, Due 8/15/2040			40,000			50,092
5.350%, Due 9/1/2040			30,000			35,536
CBS Corp., 3.375%, Due 3/1/2022			337,000			345,330
Charter Communications Operating LLC / Charter Communications Operating Capital, 3.750%, Due 2/15/2028			90,000			92,725
Comcast Corp.,
3.150%, Due 3/1/2026			54,000			56,983
4.600%, Due 10/15/2038			60,000			71,293
6.550%, Due 7/1/2039			217,000			318,208
Fox Corp., 5.476%, Due 1/25/2039C			55,000			67,636
NBCUniversal Enterprise, Inc., 2.499%, Due 4/1/2021, (3-mo. USD LIBOR + 0.400%)C D			835,000			837,806
Verizon Communications, Inc.,
2.625%, Due 8/15/2026			115,000			117,339
4.329%, Due 9/21/2028			180,000			204,974
Walt Disney Co., 6.400%, Due 12/15/2035C			35,000			50,370
						2,470,853
Consumer, Cyclical - 0.77%
American Airlines Pass Through Trust, 3.150%, Due 8/15/2033, Series AA			50,000			52,293
American Honda Finance Corp.,
3.875%, Due 9/21/2020C			250,000			254,383
3.375%, Due 12/10/2021			95,000			98,009
Aptiv Corp., 4.150%, Due 3/15/2024			85,000			90,206
Costco Wholesale Corp.,
2.150%, Due 5/18/2021			30,000			30,176
2.750%, Due 5/18/2024			65,000			67,476
Dollar General Corp., 4.125%, Due 5/1/2028			50,000			55,444
Dollar Tree, Inc., 3.700%, Due 5/15/2023			60,000			62,792
General Motors Financial Co., Inc., 3.150%, Due 6/30/2022			90,000			91,403
Home Depot, Inc., 2.700%, Due 4/1/2023			52,000			53,493
Lowe’s Cos., Inc., 2.500%, Due 4/15/2026			110,000			110,421
McDonald’s Corp., 3.700%, Due 1/30/2026			98,000			105,813
O’Reilly Automotive, Inc., 4.350%, Due 6/1/2028			70,000			78,443
Starbucks Corp., 4.000%, Due 11/15/2028			60,000			67,309
Toyota Motor Credit Corp., 3.450%, Due 9/20/2023			100,000			105,979
United Airlines Pass Through Trust, 2.700%, Due 11/1/2033, Series AA			35,000			35,213
Walgreens Boots Alliance, Inc., 3.800%, Due 11/18/2024			145,000			153,661
Walmart, Inc.,
3.400%, Due 6/26/2023			65,000			68,678
2.375%, Due 9/24/2029			150,000			151,168
7.550%, Due 2/15/2030			169,000			247,308
						1,979,668

See accompanying notes

17

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 11.45% (continued)
Consumer, Non-Cyclical - 0.88%
AbbVie, Inc.,
3.200%, Due 5/14/2026		$	60,000		$	61,446
4.450%, Due 5/14/2046			55,000			56,845
Altria Group, Inc., 4.750%, Due 5/5/2021			145,000			150,635
Amgen, Inc., 4.400%, Due 5/1/2045			60,000			67,500
Anthem, Inc., 2.500%, Due 11/21/2020			65,000			65,387
Bristol-Myers Squibb Co., 3.400%, Due 7/26/2029C			650,000			699,131
Cigna Corp., 4.125%, Due 11/15/2025			75,000			81,230
CVS Health Corp.,
3.700%, Due 3/9/2023			60,000			62,556
5.050%, Due 3/25/2048			35,000			40,342
Genzyme Corp., 5.000%, Due 6/15/2020			19,000			19,374
HCA, Inc., 4.125%, Due 6/15/2029			60,000			63,564
Humana, Inc., 3.150%, Due 12/1/2022			80,000			82,099
Kaiser Foundation Hospitals, 4.150%, Due 5/1/2047			25,000			29,380
Kraft Heinz Foods Co., 4.625%, Due 10/1/2039C			25,000			25,545
Medtronic, Inc., 3.500%, Due 3/15/2025			313,000			336,443
Molson Coors Brewing Co., 3.000%, Due 7/15/2026			90,000			90,845
Moody’s Corp., 4.875%, Due 12/17/2048			50,000			62,885
S&P Global, Inc., 4.400%, Due 2/15/2026			50,000			56,018
Shire Acquisitions Investments Ireland DAC, 2.875%, Due 9/23/2023			60,000			61,236
Zimmer Biomet Holdings, Inc., 3.550%, Due 4/1/2025			85,000			89,903
Zoetis, Inc., 3.000%, Due 9/12/2027			75,000			77,340
						2,279,704
Energy - 0.34%
BP Capital Markets America, Inc., 3.796%, Due 9/21/2025			50,000			54,060
Columbia Pipeline Group, Inc., 4.500%, Due 6/1/2025			61,000			66,529
Concho Resources, Inc., 4.300%, Due 8/15/2028			60,000			64,746
Enterprise Products Operating LLC, 6.125%, Due 10/15/2039			45,000			58,350
Marathon Petroleum Corp., 5.125%, Due 12/15/2026			45,000			51,427
MPLX LP,
4.125%, Due 3/1/2027			55,000			57,722
5.200%, Due 3/1/2047			26,000			27,896
Occidental Petroleum Corp., 2.900%, Due 8/15/2024			70,000			70,637
ONEOK, Inc., 4.550%, Due 7/15/2028			65,000			70,749
Phillips 66, 4.300%, Due 4/1/2022			87,000			91,920
Phillips 66 Partners LP,
3.550%, Due 10/1/2026			28,000			29,251
3.750%, Due 3/1/2028			50,000			52,507
Spectra Energy Partners LP, 3.375%, Due 10/15/2026			63,000			65,311
Sunoco Logistics Partners Operations LP, 4.250%, Due 4/1/2024			48,000			50,676
Valero Energy Corp., 4.350%, Due 6/1/2028			60,000			65,323
						877,104
Financial - 3.59%
American Campus Communities Operating Partnership LP, 3.625%, Due 11/15/2027			55,000			57,912
American Express Co.,
2.887%, Due 11/5/2021, (3-mo. USD LIBOR + 0.600%)D			420,000			422,222
3.400%, Due 2/27/2023			70,000			72,968
4.200%, Due 11/6/2025			115,000			127,122
4.050%, Due 12/3/2042			45,000			52,405
American International Group, Inc., 4.875%, Due 6/1/2022			289,000			309,877
Bank of America Corp.,
4.125%, Due 1/22/2024			193,000			207,499
2.456%, Due 10/22/2025, (3-mo. USD LIBOR + 0.870%)D			160,000			160,862
6.110%, Due 1/29/2037			176,000			233,689
5.000%, Due 1/21/2044			160,000			203,959
Bank of New York Mellon Corp., 3.250%, Due 5/16/2027			110,000			117,152
BB&T Corp., 2.750%, Due 4/1/2022			130,000			132,203
Boston Properties LP,
3.200%, Due 1/15/2025			50,000			51,991
2.900%, Due 3/15/2030			50,000			50,220
Camden Property Trust, 3.150%, Due 7/1/2029			70,000			73,653
Capital One Financial Corp., 3.200%, Due 1/30/2023			95,000			97,628

See accompanying notes

18

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 11.45% (continued)
Financial - 3.59% (continued)
CBOE Global Markets, Inc., 3.650%, Due 1/12/2027		$	65,000		$	69,864
Chubb INA Holdings, Inc., 3.350%, Due 5/3/2026			70,000			75,262
Citigroup, Inc.,
3.887%, Due 1/10/2028, (3-mo. USD LIBOR + 1.563%)D			220,000			236,606
5.875%, Due 1/30/2042			145,000			200,002
CNA Financial Corp., 3.900%, Due 5/1/2029			60,000			65,130
Crown Castle International Corp., 3.400%, Due 2/15/2021			59,000			59,977
Digital Realty Trust LP, 3.700%, Due 8/15/2027			95,000			100,284
ERP Operating LP, 3.000%, Due 4/15/2023			52,000			53,775
Goldman Sachs Group, Inc.,
5.750%, Due 1/24/2022			385,000			414,879
2.908%, Due 6/5/2023, (3-mo. USD LIBOR + 1.053%)D			140,000			142,321
3.500%, Due 1/23/2025			65,000			67,954
3.272%, Due 9/29/2025, (3-mo. USD LIBOR + 1.201%)D			65,000			67,206
HCP, Inc., 3.250%, Due 7/15/2026			60,000			62,665
Intercontinental Exchange, Inc., 2.750%, Due 12/1/2020			35,000			35,289
JPMorgan Chase & Co.,
3.625%, Due 5/13/2024			434,000			461,541
2.301%, Due 10/15/2025, (SOFRRATE + 1.160%)D			180,000			179,634
3.782%, Due 2/1/2028, (3-mo. USD LIBOR + 1.337%)D			100,000			107,561
3.882%, Due 7/24/2038, (3-mo. USD LIBOR + 1.360%)D			95,000			104,057
5.500%, Due 10/15/2040			313,000			413,551
KeyCorp, 5.100%, Due 3/24/2021			45,000			46,848
Liberty Mutual Group, Inc.,
4.250%, Due 6/15/2023C			25,000			26,534
4.569%, Due 2/1/2029C			88,000			99,444
MetLife, Inc.,
6.375%, Due 6/15/2034			169,000			241,597
4.721%, Due 12/15/2044			193,000			236,609
Morgan Stanley,
3.700%, Due 10/23/2024			145,000			154,268
3.591%, Due 7/22/2028, (3-mo. USD LIBOR + 1.340%)D			105,000			110,808
PNC Financial Services Group, Inc., 3.500%, Due 1/23/2024			105,000			111,070
Prudential Financial, Inc.,
4.600%, Due 5/15/2044			313,000			369,893
4.350%, Due 2/25/2050			70,000			80,909
Public Storage, 2.370%, Due 9/15/2022			80,000			81,060
Raymond James Financial, Inc., 3.625%, Due 9/15/2026			105,000			109,962
Simon Property Group LP, 3.375%, Due 10/1/2024			313,000			330,566
State Street Corp., 3.300%, Due 12/16/2024			95,000			100,431
SunTrust Bank, 2.450%, Due 8/1/2022			85,000			85,963
TD Ameritrade Holding Corp., 2.750%, Due 10/1/2029			65,000			65,276
Trinity Acquisition PLC, 4.400%, Due 3/15/2026			67,000			72,583
US Bancorp,
3.375%, Due 2/5/2024			70,000			73,898
2.400%, Due 7/30/2024			130,000			132,279
Ventas Realty LP, 5.700%, Due 9/30/2043			40,000			51,913
Visa, Inc., 3.150%, Due 12/14/2025			80,000			85,522
Wells Fargo & Co.,
2.961%, Due 7/26/2021, (3-mo. USD LIBOR + 1.025%)D			1,087,000			1,100,261
3.584%, Due 5/22/2028, (3-mo. USD LIBOR + 1.310%)D			160,000			169,593
4.750%, Due 12/7/2046			60,000			71,666
						9,297,873
Industrial - 1.05%
Allegion PLC, 3.500%, Due 10/1/2029			60,000			61,864
BAE Systems Holdings, Inc., 3.800%, Due 10/7/2024C			313,000			331,572
Burlington Northern Santa Fe LLC,
3.650%, Due 9/1/2025			65,000			70,816
5.750%, Due 5/1/2040			202,000			273,322
Caterpillar Financial Services Corp., 2.650%, Due 5/17/2021, Series I			125,000			126,520
CSX Corp., 5.500%, Due 4/15/2041			157,000			196,594
Eaton Corp., 2.750%, Due 11/2/2022			55,000			56,202

See accompanying notes

19

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 11.45% (continued)
Industrial - 1.05% (continued)
General Electric Co.,
5.500%, Due 1/8/2020		$	120,000		$	120,727
3.450%, Due 5/15/2024			70,000			72,192
Ingersoll-Rand Luxembourg Finance S.A., 2.625%, Due 5/1/2020			145,000			145,375
John Deere Capital Corp.,
1.950%, Due 6/22/2020			90,000			89,991
2.150%, Due 9/8/2022			65,000			65,508
Johnson Controls International PLC, 5.000%, Due 3/30/2020			145,000			146,665
Lockheed Martin Corp., 3.550%, Due 1/15/2026			65,000			70,207
Martin Marietta Materials, Inc., 4.250%, Due 12/15/2047			65,000			66,405
Northrop Grumman Corp., 3.850%, Due 4/15/2045			130,000			142,013
Precision Castparts Corp., 3.250%, Due 6/15/2025			65,000			68,804
Republic Services, Inc., 2.500%, Due 8/15/2024			65,000			66,084
Union Pacific Corp., 4.100%, Due 9/15/2067			90,000			93,398
United Technologies Corp.,
1.900%, Due 5/4/2020			70,000			70,025
4.125%, Due 11/16/2028			75,000			85,105
6.125%, Due 7/15/2038			217,000			300,717
						2,720,106
Technology - 2.64%
Analog Devices, Inc., 3.900%, Due 12/15/2025			75,000			80,925
Apple, Inc.,
2.850%, Due 5/11/2024			170,000			176,644
2.200%, Due 9/11/2029			300,000			295,062
Broadcom Corp. / Broadcom Cayman Finance Ltd., 3.125%, Due 1/15/2025			60,000			59,948
Broadridge Financial Solutions, Inc., 3.400%, Due 6/27/2026			65,000			68,202
Dell International LLC / EMC Corp.,
4.420%, Due 6/15/2021C			135,000			139,420
5.300%, Due 10/1/2029C			1,110,000			1,226,310
Fiserv, Inc., 3.200%, Due 7/1/2026			70,000			73,137
Hewlett Packard Enterprise Co., 6.350%, Due 10/15/2045			1,560,000			1,853,735
HP, Inc., 4.050%, Due 9/15/2022			145,000			153,147
Intel Corp., 3.300%, Due 10/1/2021			86,000			88,465
International Business Machines Corp., 4.250%, Due 5/15/2049			870,000			991,290
Micron Technology, Inc., 5.327%, Due 2/6/2029			1,135,000			1,256,531
Microsoft Corp., 4.450%, Due 11/3/2045			50,000			63,502
Oracle Corp.,
2.500%, Due 5/15/2022			115,000			116,785
4.300%, Due 7/8/2034			112,000			131,252
QUALCOMM, Inc., 2.900%, Due 5/20/2024			55,000			56,815
						6,831,170
Utilities - 1.01%
American Electric Power Co., Inc., 3.650%, Due 12/1/2021, Series I			80,000			82,635
Appalachian Power Co., 4.500%, Due 3/1/2049, Series Y			30,000			36,278
Berkshire Hathaway Energy Co., 6.125%, Due 4/1/2036			267,000			371,151
Consolidated Edison Co. of New York, Inc.,
5.500%, Due 12/1/2039, Series 09-C			169,000			221,507
4.625%, Due 12/1/2054			55,000			66,032
Delmarva Power & Light Co., 3.500%, Due 11/15/2023			61,000			64,376
Dominion Energy, Inc., 2.579%, Due 7/1/2020			60,000			60,179
DPL, Inc., 7.250%, Due 10/15/2021			144,000			154,080
Duke Energy Corp.,
3.550%, Due 9/15/2021			130,000			133,333
3.750%, Due 4/15/2024			65,000			69,067
Duke Energy Progress LLC, 4.150%, Due 12/1/2044			70,000			80,171
Entergy Louisiana LLC, 4.000%, Due 3/15/2033			47,000			53,940
Florida Power & Light Co., 3.950%, Due 3/1/2048			50,000			58,193
MidAmerican Energy Co., 3.100%, Due 5/1/2027			75,000			79,465
National Fuel Gas Co., 3.950%, Due 9/15/2027			80,000			81,762
National Rural Utilities Cooperative Finance Corp.,
2.950%, Due 2/7/2024			65,000			67,271
4.300%, Due 3/15/2049			50,000			60,050
Nevada Power Co., 2.750%, Due 4/15/2020, Series BB			50,000			50,200

See accompanying notes

20

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 11.45% (continued)
Utilities - 1.01% (continued)
NextEra Energy Capital Holdings, Inc., 2.403%, Due 9/1/2021		$	35,000		$	35,267
NiSource, Inc.,
3.490%, Due 5/15/2027			45,000			47,326
3.950%, Due 3/30/2048			65,000			69,587
Southern Co., 2.750%, Due 6/15/2020			241,000			241,948
Southern Power Co., 4.150%, Due 12/1/2025			64,000			70,006
Southwestern Electric Power Co., 3.550%, Due 2/15/2022			289,000			296,789
WEC Energy Group, Inc., 3.550%, Due 6/15/2025			59,000			63,029
						2,613,642
Total Corporate Obligations (Cost $27,005,915)						29,637,239
FOREIGN CORPORATE OBLIGATIONS - 3.01%
Basic Materials - 0.06%
ArcelorMittal, 3.600%, Due 7/16/2024			70,000			71,618
Nutrien Ltd., 4.000%, Due 12/15/2026			49,000			52,526
Teck Resources Ltd., 6.000%, Due 8/15/2040			30,000			32,441
						156,585
Communications - 0.72%
Alibaba Group Holding Ltd., 3.600%, Due 11/28/2024			313,000			328,771
America Movil S.A.B. de C.V., 6.375%, Due 3/1/2035			169,000			227,914
Bell Canada, Inc., 4.464%, Due 4/1/2048			45,000			52,125
Deutsche Telekom International Finance B.V., 4.875%, Due 3/6/2042C			150,000			174,914
Rogers Communications, Inc., 3.625%, Due 12/15/2025			85,000			90,597
TELUS Corp., 2.800%, Due 2/16/2027			49,000			49,468
Thomson Reuters Corp.,
4.300%, Due 11/23/2023			145,000			155,994
3.850%, Due 9/29/2024			193,000			204,662
Vodafone Group PLC,
3.750%, Due 1/16/2024			65,000			68,521
6.150%, Due 2/27/2037			393,000			501,655
						1,854,621
Consumer, Cyclical - 0.12%
Daimler Finance North America LLC, 2.450%, Due 5/18/2020C			313,000			313,869
Consumer, Non-Cyclical - 0.82%
Anheuser-Busch InBev Worldwide, Inc.,
4.375%, Due 4/15/2038			20,000			22,341
5.450%, Due 1/23/2039			1,465,000			1,844,663
5.550%, Due 1/23/2049			50,000			66,030
Coca-Cola Femsa S.A.B. de C.V., 3.875%, Due 11/26/2023			45,000			47,680
RELX Capital, Inc., 3.500%, Due 3/16/2023			55,000			57,060
Sanofi, 4.000%, Due 3/29/2021			75,000			77,360
						2,115,134
Energy - 0.95%
Canadian Natural Resources Ltd.,
3.900%, Due 2/1/2025			60,000			63,889
6.250%, Due 3/15/2038			176,000			222,538
Petroleos Mexicanos,
6.750%, Due 9/21/2047			110,000			109,450
7.690%, Due 1/23/2050C			605,000			657,417
Saudi Arabian Oil Co., 4.375%, Due 4/16/2049C			1,050,000			1,139,996
TransCanada PipeLines Ltd.,
3.750%, Due 10/16/2023			145,000			153,169
6.100%, Due 6/1/2040			82,000			105,907
						2,452,366

See accompanying notes

21

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Principal Amount			Fair Value
FOREIGN CORPORATE OBLIGATIONS - 3.01% (continued)
Financial - 0.33%
Bank of Montreal, 3.300%, Due 2/5/2024, Series E		$	140,000		$	146,099
HSBC Holdings PLC, 3.262%, Due 3/13/2023, (3-mo. USD LIBOR + 1.055%)D			123,000			125,711
Mitsubishi UFJ Financial Group, Inc., 2.623%, Due 7/18/2022			80,000			80,981
Nordea Bank Abp, 4.875%, Due 1/27/2020C			120,000			120,806
Royal Bank of Canada, 2.250%, Due 11/1/2024			125,000			125,285
Toronto-Dominion Bank, 3.250%, Due 3/11/2024			190,000			199,298
Westpac Banking Corp., 2.650%, Due 1/25/2021			65,000			65,617
						863,797
Industrial - 0.01%
CNH Industrial N.V., 3.850%, Due 11/15/2027			35,000			36,461
Total Foreign Corporate Obligations (Cost $6,906,709)						7,792,833
FOREIGN SOVEREIGN OBLIGATIONS - 0.16%
European Investment Bank, 2.375%, Due 6/15/2022			90,000			91,773
Kreditanstalt fuer Wiederaufbau, 2.125%, Due 6/15/2022			100,000			101,392
Province of Ontario Canada, 2.500%, Due 4/27/2026			120,000			124,726
Province of Quebec Canada, 2.375%, Due 1/31/2022			100,000			101,461
Total Foreign Sovereign Obligations (Cost $409,465)						419,352
ASSET-BACKED OBLIGATIONS - 0.54%
Ally Auto Receivables Trust, 1.750%, Due 12/15/2021, 2017 4 A3			158,962			158,803
AmeriCredit Automobile Receivables Trust, 1.900%, Due 3/18/2022, 2017 3 A3			114,441			114,319
BMW Vehicle Lease Trust, 2.840%, Due 11/22/2021, 2019 1 A3			105,000			106,191
Ford Credit Auto Lease Trust,
2.030%, Due 12/15/2020, 2017 B A3			60,884			60,882
2.220%, Due 10/15/2022, 2019 B A3			165,000			165,754
GM Financial Automobile Leasing Trust, 2.980%, Due 12/20/2021, 2019 1 A3			75,000			75,805
GM Financial Consumer Automobile Receivables Trust, 2.320%, Due 7/18/2022, 2018 1 A3			95,000			95,288
John Deere Owner Trust, 3.080%, Due 11/15/2022, 2018 B A3			190,000			192,376
Mercedes-Benz Auto Lease Trust, 3.100%, Due 11/15/2021, 2019 A A3			105,000			106,045
Nissan Auto Receivables Owner Trust, 2.120%, Due 4/18/2022, 2017 C A3			99,047			99,148
PSNH Funding LLC, 3.094%, Due 2/1/2026, 2018 1 A1			101,161			103,676
World Omni Auto Receivables Trust, 1.950%, Due 2/15/2023, 2017 B A3			123,207			123,218
Total Asset-Backed Obligations (Cost $1,392,585)						1,401,505
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.05% (Cost $139,511)
Freddie Mac REMIC Trust, 3.000%, Due 1/15/2047			139,476			141,263
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 0.63%
Bank, 3.183%, Due 8/15/2061, 2019-BN19 A3			185,000			196,000
Ginnie Mae REMIC Trust,
1.368%, Due 11/16/2041, 2013-125 AB			498,319			492,106
1.147%, Due 12/16/2038, 2013-139 A			196,716			195,480
1.624%, Due 7/16/2039, 2013-78 AB			333,569			330,334
GS Mortgage Securities Trust, 3.679%, Due 8/10/2043, 2010-C1 A1C			3,005			3,006
JPMBB Commercial Mortgage Securities Trust, 3.157%, Due 7/15/2045, 2013-C12 ASB			212,348			215,103
WFRBS Commercial Mortgage Trust, 3.660%, Due 3/15/2047, 2014-C19 A3			186,336			189,163
Total Commercial Mortgage-Backed Obligations (Cost $1,624,477)						1,621,192
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 5.43%
Federal Home Loan Mortgage Corp.,
5.000%, Due 10/1/2020			1,256			1,295
3.500%, Due 9/1/2028			42,547			44,560
3.000%, Due 11/1/2032			118,472			122,082
5.000%, Due 8/1/2033			38,456			42,499
5.500%, Due 2/1/2034			38,290			43,119
3.000%, Due 8/1/2034			24,020			24,602
4.000%, Due 1/1/2041			142,741			152,821

See accompanying notes

22

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Principal Amount			Fair Value
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 5.43% (continued)
Federal Home Loan Mortgage Corp. (continued)
4.500%, Due 2/1/2041		$	97,414		$	105,658
3.500%, Due 6/1/2042			473,494			497,199
3.500%, Due 7/1/2042			132,734			139,371
3.500%, Due 5/1/2046			218,276			230,009
3.000%, Due 11/1/2046			283,076			290,713
3.000%, Due 4/1/2047			285,161			293,356
3.500%, Due 1/1/2048			387,144			402,869
4.000%, Due 4/1/2048			255,631			267,496
3.000%, Due 8/1/2048			280,862			288,391
						2,946,040
Federal National Mortgage Association,
4.000%, Due 8/1/2020			3,270			3,407
3.500%, Due 1/1/2028E			41,731			43,306
3.000%, Due 7/1/2032			180,859			185,446
4.000%, Due 10/1/2033			199,090			207,933
5.000%, Due 3/1/2034E			41,358			45,659
4.500%, Due 4/1/2034			73,199			78,582
3.000%, Due 10/1/2034			14,934			15,345
3.500%, Due 6/1/2037			270,378			281,397
5.500%, Due 6/1/2038			8,255			9,262
4.500%, Due 1/1/2040			107,245			116,232
5.000%, Due 5/1/2040			159,100			173,972
5.000%, Due 6/1/2040			132,371			146,154
4.000%, Due 9/1/2040			95,006			101,639
4.000%, Due 1/1/2041			186,749			199,808
3.000%, Due 6/1/2043			756,786			780,631
3.500%, Due 7/1/2043			135,677			142,388
3.000%, Due 8/1/2043			663,937			684,709
4.000%, Due 11/1/2044E			107,782			115,402
4.000%, Due 7/1/2045			436,663			462,000
3.500%, Due 8/1/2045			117,928			122,941
3.500%, Due 11/1/2045			1,289,074			1,343,727
3.000%, Due 4/1/2046			153,605			157,965
3.500%, Due 5/1/2046			173,298			180,607
4.000%, Due 7/1/2046			192,115			202,998
3.000%, Due 10/1/2046			46,337			47,503
3.000%, Due 11/1/2046			308,270			316,466
3.000%, Due 12/1/2046E			188,704			193,759
3.000%, Due 2/1/2047			208,163			213,547
3.500%, Due 3/1/2047			96,490			100,710
4.500%, Due 7/1/2047			110,211			116,703
4.500%, Due 8/1/2047			116,091			123,209
3.500%, Due 9/1/2047			116,233			121,910
3.500%, Due 2/1/2048			249,334			257,573
4.000%, Due 3/1/2048			221,596			231,703
4.500%, Due 4/1/2048			98,728			104,532
4.500%, Due 7/1/2048E			144,196			152,414
4.500%, Due 7/1/2048			309,431			326,593
3.000%, Due 10/1/2048E			164,401			167,308
4.500%, Due 9/1/2049			209,050			220,804
						8,496,244

See accompanying notes

23

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Principal Amount			Fair Value
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 5.43% (continued)
Government National Mortgage Association,
6.500%, Due 8/15/2027		$	32,449		$	35,936
6.500%, Due 11/15/2027			37,731			41,785
7.500%, Due 12/15/2028			34,366			39,071
5.500%, Due 7/15/2033			40,335			45,277
6.000%, Due 12/15/2033			52,424			60,090
5.500%, Due 2/20/2034			55,775			62,819
5.000%, Due 10/15/2039			89,984			100,946
3.500%, Due 9/15/2041			235,140			248,122
3.000%, Due 1/20/2046			68,519			70,987
3.000%, Due 4/20/2046			173,427			179,457
3.000%, Due 6/20/2046			230,159			237,909
3.000%, Due 12/20/2046			156,044			161,425
3.500%, Due 8/20/2047			73,618			76,682
3.500%, Due 10/20/2047			71,545			74,511
4.000%, Due 1/20/2048			395,087			411,742
5.000%, Due 6/20/2049			200,930			213,299
4.500%, Due 7/20/2049			207,815			218,721
4.500%, Due 8/20/2049			203,501			214,342
5.000%, Due 8/20/2049			104,408			110,476
						2,603,597
Total U.S. Agency Mortgage-Backed Obligations (Cost $13,681,750)						14,045,881
U.S. TREASURY OBLIGATIONS - 16.65%
U.S. Treasury Notes/Bonds,
1.750%, Due 10/31/2020			319,000			319,436
1.766%, Due 4/30/2021, (3-mo. Treasury money market yield + 0.139%)D			13,175,000			13,158,079
2.000%, Due 5/31/2021			1,446,000			1,455,094
1.857%, Due 7/31/2021, (3-mo. Treasury money market yield + 0.220%)D			10,080,000			10,078,463
1.937%, Due 10/31/2021, (3-mo. Treasury money market yield + 0.300%)D			565,000			565,420
2.000%, Due 2/15/2022			2,326,000			2,350,714
1.750%, Due 9/30/2022			500,000			503,340
1.625%, Due 11/15/2022			964,000			967,163
1.750%, Due 1/31/2023			590,000			594,148
2.000%, Due 2/15/2023			500,000			507,578
2.750%, Due 7/31/2023			500,000			522,168
2.500%, Due 8/15/2023			964,000			998,342
2.375%, Due 8/15/2024			1,885,000			1,957,160
2.875%, Due 7/31/2025			500,000			535,527
6.875%, Due 8/15/2025			279,000			360,771
2.000%, Due 11/15/2026			500,000			513,184
2.875%, Due 5/15/2028			200,000			219,383
2.875%, Due 8/15/2028			100,000			109,852
5.250%, Due 11/15/2028			217,000			282,125
2.625%, Due 2/15/2029			1,155,000			1,248,754
2.375%, Due 5/15/2029			450,000			477,158
1.625%, Due 8/15/2029			250,000			248,506
4.750%, Due 2/15/2037			304,000			432,511
4.500%, Due 8/15/2039			241,000			339,481
2.750%, Due 8/15/2042			250,000			277,324
3.000%, Due 2/15/2049			2,154,000			2,539,364
2.875%, Due 5/15/2049			1,315,000			1,515,229
						43,076,274
Total U.S. Treasury Obligations (Cost $42,122,895)						43,076,274

See accompanying notes

24

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

	Shares			Fair Value
SHORT-TERM INVESTMENTS - 2.09%
Investment Companies - 1.90%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%F G			4,904,248		$	4,904,248
	Principal Amount
U.S. Treasury Obligations - 0.07%
U.S. Treasury Bill, 1.870%, Due 2/13/2020H		$	175,000			174,233
Foreign Corporate Obligations - 0.12%
Nordea Bank Abp, 2.092%, Due 1/27/2020			300,000			298,636
Total Short-Term Investments (Cost $5,376,837)						5,377,117
TOTAL INVESTMENTS - 98.94% (Cost $221,644,303)						255,981,778
OTHER ASSETS, NET OF LIABILITIES - 1.06%						2,749,415
TOTAL NET ASSETS - 100.00%					$	258,731,193
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2019 (Note 9).

^C 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 $6,168,159 or 2.38% of net assets. The Fund has no right to demand registration of these securities.

^D Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on October 31, 2019.

^E Coupon rate may change based on changes of the underlying collateral or prepayments of principal. The coupon rate shown represents the rate at period end.

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

^G 7-day yield.

^H This security or a piece thereof is held as segregated collateral.

ADR - American Depositary Receipt.

LIBOR - London Interbank Offered Rate.

LLC - Limited Liability Company.

LP - Limited Partnership.

NVDR - Non Voting Depositary Receipt.

PLC - Public Limited Company.

PRIME - A rate, charged by banks, based on the U.S. Federal Funds rate.

REMIC - Real Estate Mortgage Investment Conduit.

SOFRRATE – Secured Overnight Financing Rate.

Long Futures Contracts Open on October 31, 2019:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
S&P 500 E-Mini Index Futures	27	December 2019	$	4,074,447	$	4,098,330	$	23,883
			$	4,074,447	$	4,098,330	$	23,883

Index Abbreviations:
S&P 500	Standard & Poor’s U.S. Equity Large-Cap Index.

See accompanying notes

25

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2019

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2019, the investments were classified as described below:

Balanced Fund	Level 1		Level 2		Level 3		Total
Assets
Common Stocks	$	152,469,122	$	-	$	-	$	152,469,122
Corporate Obligations		-		29,637,239		-		29,637,239
Foreign Corporate Obligations		-		7,792,833		-		7,792,833
Foreign Sovereign Obligations		-		419,352		-		419,352
Asset-Backed Obligations		-		1,401,505		-		1,401,505
Collateralized Mortgage Obligations		-		141,263		-		141,263
Commercial Mortgage-Backed Obligations		-		1,621,192		-		1,621,192
U.S. Agency Mortgage-Backed Obligations		-		14,045,881		-		14,045,881
U.S. Treasury Obligations		-		43,076,274		-		43,076,274
Short-Term Investments		4,904,248		472,869		-		5,377,117
Total Investments in Securities - Assets	$	157,373,370	$	98,608,408	$	-	$	255,981,778
Financial Derivative Instruments - Assets
Futures Contracts	$	23,883	$	-	$	-	$	23,883
Total Financial Derivative Instruments - Assets	$	23,883	$	-	$	-	$	23,883

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2019, there were no transfers into or out of Level 3.

See accompanying notes

26

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.07%
Communication Services - 1.75%
Media - 1.75%
Altice USA, Inc., Class AA		128,539		$	3,978,282
Interpublic Group of Cos., Inc.		215,801			4,693,672
					8,671,954
Total Communication Services					8,671,954
Consumer Discretionary - 16.63%
Auto Components - 1.91%
Dana, Inc.		215,101			3,491,089
Lear Corp.		50,870			5,990,960
					9,482,049
Diversified Consumer Services - 0.68%
Adtalem Global Education, Inc.A		114,125			3,398,643
Hotels, Restaurants & Leisure - 6.26%
Aramark		109,094			4,773,953
Marriott Vacations Worldwide Corp.		26,573			2,921,170
MGM Resorts International		129,399			3,687,872
Norwegian Cruise Line Holdings Ltd.A		73,520			3,731,875
Royal Caribbean Cruises Ltd.		37,508			4,081,996
SeaWorld Entertainment, Inc.A B		150,513			3,976,553
Wyndham Destinations, Inc.		79,634			3,695,814
Wyndham Hotels & Resorts, Inc.		77,268			4,170,154
					31,039,387
Household Durables - 2.53%
Lennar Corp., Class A		72,444			4,317,662
Mohawk Industries, Inc.A		23,276			3,337,313
Newell Brands, Inc.		257,148			4,878,098
					12,533,073
Internet & Direct Marketing Retail - 0.66%
Qurate Retail, Inc.A		343,486			3,276,856
Multiline Retail - 1.18%
Dollar General Corp.		36,566			5,862,992
Specialty Retail - 2.08%
Aaron’s, Inc.		74,879			5,610,684
Advance Auto Parts, Inc.		29,015			4,714,357
					10,325,041
Textiles, Apparel & Luxury Goods - 1.33%
Gildan Activewear, Inc.		74,056			1,890,650
PVH Corp.		53,966			4,703,676
					6,594,326
Total Consumer Discretionary					82,512,367
Consumer Staples - 0.47%
Beverages - 0.47%
Coca-Cola European Partners PLC		43,401			2,322,388
Energy - 7.88%
Energy Equipment & Services - 3.61%
Baker Hughes Co.		121,347			2,596,826
Halliburton Co.		327,356			6,301,603

See accompanying notes

27

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.07% (continued)
Energy - 7.88% (continued)
Energy Equipment & Services - 3.61% (continued)
National Oilwell Varco, Inc.		273,706		$	6,191,230
TechnipFMC PLC		141,894			2,799,568
					17,889,227
Oil, Gas & Consumable Fuels - 4.27%
Cenovus Energy, Inc.B		275,126			2,335,820
EQT Corp.		271,600			2,916,984
Equitrans Midstream Corp.B		205,907			2,866,225
Hess Corp.		65,434			4,302,286
Kosmos Energy Ltd.		443,683			2,750,835
Murphy Oil Corp.B		216,981			4,476,318
Parsley Energy, Inc., Class A		98,587			1,558,660
					21,207,128
Total Energy					39,096,355
Financials - 21.86%
Banks - 5.78%
Fifth Third Bancorp		283,928			8,256,626
FNB Corp.		262,121			3,161,179
KeyCorp		279,115			5,015,697
Pinnacle Financial Partners, Inc.		28,784			1,693,075
Regions Financial Corp.		322,417			5,190,914
Signature Bank		30,170			3,569,714
Valley National Bancorp		155,166			1,796,822
					28,684,027
Capital Markets - 3.10%
Apollo Global Management, Inc.		83,986			3,456,864
Invesco Ltd.		176,845			2,974,533
KKR & Co., Inc., Class A		197,179			5,684,670
Northern Trust Corp.		32,543			3,243,886
					15,359,953
Consumer Finance - 2.34%
Ally Financial, Inc.		188,929			5,786,895
Navient Corp.		143,167			1,971,410
SLM Corp.		457,106			3,857,975
					11,616,280
Diversified Financial Services - 2.59%
AXA Equitable Holdings, Inc.		257,014			5,551,502
Jefferies Financial Group, Inc.		125,166			2,336,849
Voya Financial, Inc.		92,036			4,966,263
					12,854,614
Insurance - 6.82%
American Financial Group, Inc.		15,655			1,628,746
Assurant, Inc.		24,515			3,090,606
Axis Capital Holdings Ltd.		189,772			11,278,150
CNO Financial Group, Inc.		256,658			4,016,698
Fidelity National Financial, Inc.		205,125			9,402,930
Willis Towers Watson PLC		23,585			4,408,036
					33,825,166

See accompanying notes

28

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.07% (continued)
Financials - 21.86% (continued)
Mortgage Real Estate Investment Trusts (REITs) - 0.50%
MFA Financial, Inc.		325,806		$	2,472,868
Thrifts & Mortgage Finance - 0.73%
New York Community Bancorp, Inc.		312,660			3,642,489
Total Financials					108,455,397
Health Care - 4.66%
Health Care Equipment & Supplies - 1.20%
Zimmer Biomet Holdings, Inc.		43,080			5,954,948
Health Care Providers & Services - 2.93%
Cardinal Health, Inc.		74,948			3,706,179
McKesson Corp.		30,258			4,024,314
Universal Health Services, Inc., Class B		49,550			6,811,143
					14,541,636
Pharmaceuticals - 0.53%
Mylan N.V.A		137,321			2,629,697
Total Health Care					23,126,281
Industrials - 17.98%
Aerospace & Defense - 3.04%
BWX Technologies, Inc.		49,184			2,857,591
Spirit AeroSystems Holdings, Inc., Class A		58,605			4,795,061
TransDigm Group, Inc.		14,151			7,447,388
					15,100,040
Airlines - 0.64%
Alaska Air Group, Inc.		45,628			3,167,952
Building Products - 2.14%
JELD-WEN Holding, Inc.A		308,042			5,264,438
Johnson Controls International PLC		60,667			2,628,701
Owens Corning		44,118			2,703,551
					10,596,690
Commercial Services & Supplies - 1.03%
Republic Services, Inc.		58,180			5,091,332
Construction & Engineering - 1.88%
AECOMA		139,275			5,572,393
Jacobs Engineering Group, Inc.		40,151			3,757,330
					9,329,723
Industrial Conglomerates - 0.17%
Carlisle Cos., Inc.		5,581			849,819
Machinery - 5.29%
Dover Corp.		41,353			4,296,163
Snap-on, Inc.		21,397			3,480,650
Stanley Black & Decker, Inc.		59,689			9,032,736
Terex Corp.		109,820			3,025,541
Wabtec Corp.B		92,629			6,425,674
					26,260,764
Professional Services - 0.40%
Nielsen Holdings PLC		97,955			1,974,773

See accompanying notes

29

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.07% (continued)
Industrials - 17.98% (continued)
Road & Rail - 2.50%
Avis Budget Group, Inc.A		106,861		$	3,174,840
JB Hunt Transport Services, Inc.		38,614			4,539,462
Ryder System, Inc.		96,297			4,682,923
					12,397,225
Trading Companies & Distributors - 0.89%
AerCap Holdings N.V.A		76,290			4,415,665
Total Industrials					89,183,983
Information Technology - 7.48%
Electronic Equipment, Instruments & Components - 2.09%
Anixter International, Inc.A		68,038			5,630,145
Avnet, Inc.		119,577			4,730,466
					10,360,611
IT Services - 2.06%
Alliance Data Systems Corp.		18,804			1,880,400
Conduent, Inc.A		271,999			1,680,954
Genpact Ltd.		76,811			3,008,687
KBR, Inc.		130,627			3,678,456
					10,248,497
Semiconductors & Semiconductor Equipment - 2.37%
Marvell Technology Group Ltd.		322,572			7,867,531
Microchip Technology, Inc.B		41,424			3,905,869
					11,773,400
Technology Hardware, Storage & Peripherals - 0.96%
Hewlett Packard Enterprise Co.		289,022			4,742,851
Total Information Technology					37,125,359
Materials - 4.32%
Chemicals - 3.46%
Ashland Global Holdings, Inc.		76,830			5,944,337
Axalta Coating Systems Ltd.A		131,820			3,887,372
Eastman Chemical Co.		29,681			2,256,943
Element Solutions, Inc.A		470,411			5,108,663
					17,197,315
Containers & Packaging - 0.86%
Packaging Corp. of America		38,869			4,254,601
Total Materials					21,451,916
Real Estate - 7.25%
Equity Real Estate Investment Trusts (REITs) - 6.99%
AvalonBay Communities, Inc.		20,471			4,455,718
EPR Properties		64,957			5,053,005
GEO Group, Inc.		99,041			1,507,404
Healthpeak Properties, Inc.		153,471			5,773,579
Lamar Advertising Co., Class A		65,919			5,274,179
Liberty Property Trust		83,898			4,955,855
MGM Growth Properties LLC, Class A		246,266			7,685,962
					34,705,702

See accompanying notes

30

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares			Fair Value
COMMON STOCKS - 96.07% (continued)
Real Estate - 7.25% (continued)
Real Estate Management & Development - 0.26%
Realogy Holdings Corp.B			161,574		$	1,273,203
Total Real Estate						35,978,905
Utilities - 5.79%
Electric Utilities - 5.23%
Edison International			79,572			5,005,079
Entergy Corp.			36,718			4,460,503
Evergy, Inc.			41,008			2,620,821
FirstEnergy Corp.			112,307			5,426,674
Pinnacle West Capital Corp.			36,338			3,420,132
Xcel Energy, Inc.			78,864			5,008,653
						25,941,862
Gas Utilities - 0.56%
UGI Corp.			58,093			2,769,294
Total Utilities						28,711,156
Total Common Stocks (Cost $424,770,122)						476,636,061
SHORT-TERM INVESTMENTS - 3.80%
Investment Companies - 3.64%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%C D			18,059,056			18,059,056
	Principal Amount
U.S. Treasury Obligations - 0.16%
U.S. Treasury Bill, 1.870%, Due 2/13/2020E		$	800,000			796,492
Total Short-Term Investments (Cost $18,854,827)						18,855,548
	Shares
SECURITIES LENDING COLLATERAL - 0.25% (Cost $1,233,330)
Investment Companies - 0.25%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%C D			1,233,330			1,233,330
TOTAL INVESTMENTS - 100.12% (Cost $444,858,279)						496,724,939
LIABILITIES, NET OF OTHER ASSETS - (0.12%)						(604,009	)
TOTAL NET ASSETS - 100.00%					$	496,120,930
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2019 (Note 9).

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

^D 7-day yield.

^E This security or a piece thereof is held as segregated collateral.

LLC - Limited Liability Company.

PLC - Public Limited Company.

See accompanying notes

31

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2019

Long Futures Contracts Open on October 31, 2019:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount	Contract Value		Unrealized Appreciation (Depreciation)
S&P MidCap 400 E-Mini Index Futures	87	December 2019	$16,924,711	$	17,008,500	$	83,789
			$16,924,711	$	17,008,500	$	83,789

Index Abbreviations:
S&P 400	Standard & Poor’s Midcap Index.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2019, the investments were classified as described below:

Mid-Cap Value Fund	Level 1		Level 2		Level 3		Total
Assets
Common Stocks	$	476,636,061	$	-	$	-	$	476,636,061
Short-Term Investments		18,059,056		796,492		-		18,855,548
Securities Lending Collateral		1,233,330		-		-		1,233,330
Total Investments in Securities - Assets	$	495,928,447	$	796,492	$	-	$	496,724,939
Financial Derivative Instruments - Assets
Futures Contracts	$	83,789	$	-	$	-	$	83,789
Total Financial Derivative Instruments - Assets	$	83,789	$	-	$	-	$	83,789

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2019, there were no transfers into or out of Level 3.

See accompanying notes

32

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2019

	Balanced Fund		Mid-Cap Value Fund
Assets:
Investments in unaffiliated securities, at fair value† §	$	251,077,530	$	477,432,553
Investments in affiliated securities, at fair value‡		4,904,248		19,292,386
Cash		122,492		-
Dividends and interest receivable		674,624		172,103
Deposits with broker for futures contracts		7,948		-
Receivable for investments sold		2,015,827		3,193,418
Receivable for fund shares sold		154,326		99,530
Receivable for tax reclaims		8,472		-
Receivable for expense reimbursement (Note 2)		-		236
Receivable for variation margin on open futures contracts (Note 5)		23,971		83,947
Prepaid expenses		219,970		26,296
Total assets		259,209,408		500,300,469
Liabilities:
Payable for investments purchased		146,490		1,565,571
Payable for fund shares redeemed		117,637		648,092
Payable for expense reimbursement (Note 2)		-		162
Cash due to broker for futures contracts		-		211,870
Management and sub-advisory fees payable (Note 2)		76,861		343,705
Service fees payable (Note 2)		47,151		66,140
Transfer agent fees payable (Note 2)		11,522		17,839
Payable upon return of securities loaned (Note 9)§		-		1,233,330
Custody and fund accounting fees payable		18,921		11,460
Professional fees payable		47,495		43,780
Trustee fees payable (Note 2)		1,820		3,617
Payable for prospectus and shareholder reports		6,326		24,866
Other liabilities		3,992		9,107
Total liabilities		478,215		4,179,539
Net assets	$	258,731,193	$	496,120,930
Analysis of net assets:
Paid-in-capital	$	204,483,704	$	466,604,351
Total distributable earnings (deficits)A		54,247,489		29,516,579
Net assets	$	258,731,193	$	496,120,930

See accompanying notes

33

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2019

	Balanced Fund		Mid-Cap Value Fund
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		2,848,665		10,916,705
Y Class		3,821,922		5,549,578
Investor Class		6,689,539		14,761,990
Advisor Class		393,805		210,108
A Class		1,132,815		249,336
C Class		2,130,106		300,234
R6 Class		N/A		146,139
Net assets:
Institutional Class	$	46,593,155	$	168,201,120
Y Class	$	62,956,422	$	84,763,978
Investor Class	$	96,065,263	$	229,639,964
Advisor Class	$	6,039,168	$	3,163,999
A Class	$	16,228,685	$	3,748,595
C Class	$	30,848,500	$	4,349,946
R6 Class		N/A	$	2,253,328
Net asset value, offering and redemption price per share:
Institutional Class	$	16.36	$	15.41
Y Class	$	16.47	$	15.27
Investor Class	$	14.36	$	15.56
Advisor Class	$	15.34	$	15.06
A Class	$	14.33	$	15.03
A Class (offering price)	$	15.20	$	15.95
C Class	$	14.48	$	14.49
R6 Class		N/A	$	15.42
† Cost of investments in unaffiliated securities	$	216,740,055	$	425,565,893
‡ Cost of investments in affiliated securities	$	4,904,248	$	19,292,386
§ Fair value of securities on loan	$	2,452,229	$	20,651,471
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

34

American Beacon Funds^SM

Statements of Operations

For the year ended October 31, 2019

	Balanced Fund			Mid-Cap Value Fund
Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	4,653,221		$	13,122,881
Dividend income from affiliated securities (Note 8)		119,895			448,948
Interest income (net of foreign taxes)†		3,157,544			11,159
Income derived from securities lending (Note 9)		7,171			16,218
Total investment income		7,937,831			13,599,206
Expenses:
Management and sub-advisory fees (Note 2)		1,444,808			4,642,017
Transfer agent fees:
Institutional Class (Note 2)		7,482			89,620
Y Class (Note 2)		57,527			95,225
Investor Class		9,279			11,980
Advisor Class		471			2,530
A Class		1,177			1,117
C Class		3,378			1,508
R6 Class		-			285
Custody and fund accounting fees		79,597			89,651
Professional fees		61,000			72,238
Registration fees and expenses		85,945			123,187
Service fees (Note 2):
Investor Class		323,952			839,240
Advisor Class		14,548			7,805
A Class		18,015			15,643
C Class		33,747			5,442
Distribution fees (Note 2):
Advisor Class		15,622			7,873
A Class		41,419			18,854
C Class		326,377			48,369
Prospectus and shareholder report expenses		27,838			88,291
Trustee fees (Note 2)		20,635			44,991
Other expenses		51,210			68,776
Total expenses		2,624,027			6,274,642
Net fees waived and expenses (reimbursed) / recouped (Note 2)		-			(621	)
Net expenses		2,624,027			6,274,021
Net investment income		5,313,804			7,325,185
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesA		18,444,561			(24,328,094	)
Commission recapture (Note 1)		4,136			52,175
Foreign currency transactions		(188	)		14
Futures contracts		(282,052	)		903,027
Change in net unrealized appreciation of:
Investments in unaffiliated securitiesB		2,410,846			52,835,570
Foreign currency transactions		-			81
Futures contracts		264,711			1,531,334
Net gain from investments		20,842,014			30,994,107
Net increase in net assets resulting from operations	$	26,155,818		$	38,319,292
† Foreign taxes	$	36,203		$	59,238
A The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
B The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.

See accompanying notes

35

American Beacon Funds^SM

Statements of Changes in Net Assets

	Balanced Fund						Mid-Cap Value Fund
	Year Ended October 31, 2019			Year Ended October 31, 2018			Year Ended October 31, 2019			Year Ended October 31, 2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	5,313,804		$	5,594,543		$	7,325,185		$	8,243,269
Net realized gain (loss) from investments in unaffiliated securities, commission recapture, foreign currency transactions, and futures contracts		18,166,457			22,789,700			(23,372,878	)		39,046,228
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions, and futures contracts		2,675,557			(24,223,813	)		54,366,985			(114,181,076	)
Net increase (decrease) in net assets resulting from operations		26,155,818			4,160,430			38,319,292			(66,891,579	)
Distributions to shareholders:
Total retained earnings:
Institutional Class		(5,001,897	)		(6,261,952	)		(16,149,794	)		(9,434,653	)
Y Class		(5,879,168	)		(4,822,027	)		(6,006,150	)		(3,447,030	)
Investor Class		(9,902,997	)		(9,640,824	)		(22,741,996	)		(9,262,634	)
Advisor Class		(537,080	)		(761,574	)		(198,759	)		(94,728	)
A Class		(1,636,327	)		(1,718,656	)		(712,238	)		(434,137	)
C Class		(3,065,750	)		(2,976,692	)		(313,969	)		(184,144	)
R6 Class		-			-			(12,536	)		-
Net distributions to shareholders		(26,023,219	)		(26,181,725	)		(46,135,442	)		(22,857,326	)
Capital share transactions (Note 11):
Proceeds from sales of shares		35,227,904			53,469,502			101,076,057			405,914,174
Reinvestment of dividends and distributions		25,209,375			25,384,629			45,842,063			22,545,457
Cost of shares redeemed		(101,347,208	)		(109,865,841	)		(389,366,433	)		(261,376,072	)
Net increase (decrease) in net assets from capital share transactions		(40,909,929	)		(31,011,710	)		(242,448,313	)		167,083,559
Net increase (decrease) in net assets		(40,777,330	)		(53,033,005	)		(250,264,463	)		77,334,654
Net assets:
Beginning of period		299,508,523			352,541,528			746,385,393			669,050,739
End of period	$	258,731,193		$	299,508,523		$	496,120,930		$	746,385,393

See accompanying notes

36

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Funds, each a series within the Trust, are registered under the Investment Company Act of 1940, as amended (the “Act”), as diversified, open-end management investment companies. As of October 31, 2019, the Trust consists of thirty-two active series, two of which are presented in this filing: American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund (collectively, the “Funds” and each individually a “Fund”). The remaining thirty active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a Delaware corporation and a wholly-owned subsidiary of Resolute Investment Managers, Inc. (“RIM”) organized in 1986 to provide business management, advisory, administrative, and asset management consulting services to the Trust and other investors. The Manager is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). RIM is, in turn, a wholly-owned subsidiary of Resolute Acquisition, Inc., which is a wholly-owned subsidiary of Resolute Topco, Inc., a wholly-owned subsidiary of Resolute Investment Holdings, LLC (“RIH”). RIH is owned primarily by Kelso Investment Associates VIII, L.P., KEP VI, LLC and Estancia Capital Partners L.P., investment funds affiliated with Kelso & Company, L.P. (“Kelso”) or Estancia Capital Management, LLC (“Estancia”), which are private equity firms.

Recent Accounting Pronouncements

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-08, Premium Amortization of Purchased Callable Debt Securities. The amendments in the ASU shorten the premium amortization period on a purchased callable debt security from the security’s contractual life to the earliest call date. It is anticipated that this change will enhance disclosures by reducing losses recognized when a security is called on an earlier date. This ASU is effective for fiscal years beginning after December 15, 2018. The Manager continues to evaluate the impact this ASU will have on the financial statements and other disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”). The amendments in the ASU impact disclosure requirements for fair value measurement. It is anticipated that this change will enhance the effectiveness of disclosures in the notes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and can include the entire standard or certain provisions that exclude or amend disclosures. For the year ended October 31, 2019, the Funds have chosen to adopt the standard. The adoption of this ASU guidance did not have a material impact on the financial statements and other disclosures.

Class Disclosure

Each Fund has multiple classes of shares designed to meet the needs of different groups of investors; however, not all of the Funds offer all classes. The following table sets forth the differences amongst the classes:

Class	Eligible Investors	Minimum Initial Investments
Institutional	Large institutional investors - sold directly or through intermediary channels.	$	250,000
Y Class	Large institutional retirement plan investors - sold directly or through intermediary channels.	$	100,000
Investor	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500
Advisor Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrators.	$	2,500

37

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

Class	Eligible Investors	Minimum Initial Investments
A Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”).	$	2,500
C Class	Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC.	$	1,000
R6 Class	Large institutional retirement plan investors - sold through retirement plan sponsors.		None

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 based on 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 service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.

Significant Accounting Policies

The following is a summary of significant accounting policies, consistently followed by the Funds in preparation of the financial statements. The Funds are considered investment companies and accordingly, follow the investment company accounting and reporting guidance of the FASB Accounting Standards Codification Topic 946, Financial Services – Investment Companies, a part of Generally Accepted Accounting Principles (“U.S. GAAP”).

Security Transactions and Investment Income

Security transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.

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, net of foreign taxes, is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For convertible securities, premiums attributable to the conversion feature are not amortized. Realized gains (losses) from securities sold are determined on the basis of specific lot identification. Estimated tax liabilities on certain foreign securities are recorded on an accrual basis and are reflected as components of interest income or net change in unrealized appreciation (depreciation) on investments on the Statements of Operations, as appropriate. Tax liabilities realized as a result of such security sales are reflected as a component of net realized gain (loss) on investments on the Statements of Operations. Paydown gains (losses) on mortgage-related and other asset-backed securities, if any, are recorded as components of interest income on the Statements of Operations. Income or short-term capital gain distributions received from registered investment companies, if any, are recorded as dividend income. Long-term gain distributions received from registered investment companies, if any, are recorded as realized gains.

Debt obligations may be placed on a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed for non-accrual when the issuer resumes interest payments or when collectability of interest is probable. Realized gains (losses) from securities sold are determined on the basis of specific lot identification.

38

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

Distributions to Shareholders

The Balanced Fund distributes most or all of its net earning and realized gains, if any, each taxable year in the form of dividends from net investment income on a quarterly basis and distributions of realized net capital gains and net gains or losses from foreign currency transactions on an annual basis. The Mid-Cap Value Fund distributes most or all of its net earning and realized gains, if any, each taxable year in the form of dividends from net investment income and distributions of realized net capital gains and net gains or losses from foreign currency transactions on an annual basis. The Funds do not have a fixed dividend rate and do not guarantee that they will pay any distributions in any particular year. Dividends to shareholders are determined in accordance with federal income tax regulation, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Funds may designate earning and profits distributed to shareholders on the redemption of shares.

Commission Recapture

The Funds have established brokerage commission recapture arrangements with certain brokers or dealers. If the Funds’ investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Funds. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Funds. This amount is reported with the net realized gain in the Funds’ Statements of Operations, if applicable.

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Funds are allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Funds. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Funds on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Funds or nature of the services performed and relative applicability to the Funds.

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 liabilities 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.

Concentration of Ownership

From time to time, the Funds may have a concentration of one or more accounts constituting a significant percentage of shares outstanding. Investment activities by holders of accounts that represent a significant ownership of more than 5% of the Funds’ outstanding shares could have a material impact on the Funds. As of October 31, 2019, based on management’s evaluation of the shareholder account base, exclusive of omnibus accounts, one account has been identified as representing a non-affiliated significant ownership of approximately 7% of the Balanced Fund’s outstanding shares.

39

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

2.   Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

The Funds and the Manager are parties to a Management Agreement that obligates the Manager to provide the Funds with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of each Funds’ average daily net assets that is calculated and accrued daily according to the following schedule:

First $15 billion	0.35	%
Next $15 billion	0.325	%
Over $30 billion	0.30	%

The Trust, on behalf of the Funds, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Brandywine Global Investment Management, LLC; and Hotchkis and Wiley Capital Management, LLC for the Balanced Fund. In addition, the Manager manages a portion of the Balanced Fund pursuant to the Management Agreement. The Trust, on behalf of the Funds, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Pzena Investment Management, LLC; and WEDGE Capital Management, L.L.P. for the Mid-Cap Value Fund. Pursuant to the Investment Advisory Agreements, the Funds have agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Funds’ average daily net assets.

The Management and Sub-Advisory Fees paid by the Funds for the year ended October 31, 2019 were as follows:

Balanced Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	961,308
Sub-Advisor Fees		0.18	%		483,500
Total		0.53	%	$	1,444,808

Mid-Cap Value Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	2,057,593
Sub-Advisor Fees		0.41	%		2,584,424
Total		0.76	%	$	4,642,017

As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statements of Operations. During the year ended October 31, 2019, the Manager received securities lending fees of $661 and $1,746 for the securities lending activities of the Balanced Fund and Mid-Cap Value Fund, respectively.

Distribution Plans

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

40

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

to the Funds for distribution purposes. However, the Plan authorizes the management fee received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Funds do not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

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

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor, Advisor, A, and C Classes of the Funds. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Funds.

Sub-Transfer Agent Fees

The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional and Y Classes of the Funds and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Funds primarily through the use of omnibus accounts on behalf of their customers who hold positions in the Funds. Certain services would have been provided by the Funds’ transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Funds’ transfer agent. Accordingly, the Funds, pursuant to Board approval, have agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the year ended October 31, 2019, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Balanced	$	61,454
Mid-Cap Value		162,226

As of October 31, 2019, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent  Fees
Balanced	$	6,812
Mid-Cap Value		8,134

Investments in Affiliated Funds

The Funds may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Funds in connection with securities lending may also be invested in the USG Select Fund. The Funds and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees

41

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended October 31, 2019, the Manager earned fees on the Funds’ direct investments and securities lending collateral investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral Investments in USG Select Fund		Total
Balanced	$	5,400	$	1,164	$	6,564
Mid-Cap Value		20,299		4,003		24,302

Interfund Credit Facility

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“SEC”), the Funds, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2019, the Balanced Fund borrowed on average $685,888 for 2 days at an average interest rate of 3.11% with interest charges of $114. These amounts are recorded as “Other expenses” in the Statements of Operations. During the year ended October 31, 2019, the Mid-Cap Value Fund did not utilize the credit facility.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Funds to the extent that total operating expenses exceed the Funds’ expense cap. During the year ended October 31, 2019, the Manager waived and/or reimbursed expenses as follows:

			Expense Cap											Expiration of Reimbursed Expenses
Fund	Class		11/1/2018 – 2/28/2019			3/1/2019 – 10/31/2019			Reimbursed Expenses		(Recouped) Expenses
Mid-Cap Value		R6		0.88	%(1)		0.83	%	$	648	$	(27	)		2021 - 2022

⁽¹⁾ Voluntary expense cap.

Of these amounts, $162 was disclosed as a payable to the Manager on the Statements of Assets and Liabilities at October 31, 2019 for the Mid-Cap Value Fund.

The Funds have adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Funds for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years after the date of the Manager’s waiver/reimbursement and (b) does not cause the Funds’ annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. The reimbursed expenses listed above will expire in 2021 and

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2022. The Fund did not record a liability for potential reimbursement due to the current assessment that a reimbursement is uncertain. The carryover of excess expenses potentially reimbursable to the Manager, but not recorded as a liability are as follows:

Fund	Recouped Expenses			Excess Expense Carryover		Expired Expense Carryover		Expiration of Reimbursed Expenses
Mid-Cap Value	$	27	*	$	2,051	$	–		2020 - 2021

* Amount related to R6 Class

Sales Commissions

The Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers and it may be used to offset distribution related expenses. During the year ended October 31, 2019, RID collected $6,499 and $325 for Balanced Fund and Mid-Cap Value Fund, respectively, from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Funds’ Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2019, there were no CDSC fees collected for Class A Shares of the Funds.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Funds’ Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2019, CDSC fees of $3,005 and $797 were collected for the Class C Shares of Balanced Fund and Mid-Cap Value Fund, respectively.

Trustee Fees and Expenses

As compensation for their service to the Trusts, each Trustee receives an annual retainer of $120,000, plus $10,000 for each Board meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board Chair receives an additional annual retainer of $50,000 as well as a $2,500 fee each quarter for attendance at the committee meetings. The Chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each fund of the Trusts according to its respective net assets.

3.  Security Valuation and Fair Value Measurements

The price of the Fund’s shares is based on its net asset value (“NAV”) per share. The Fund’s NAV is computed by adding total assets, subtracting all the Fund’s liabilities, and dividing the result by the total number of shares outstanding.

The NAV of each class of the Fund’s shares is determined based on a pro rata allocation of the Fund’s investment income, expenses and total capital gains and losses. The Fund’s NAV per share is determined each business day as of the regular close of trading on the New York Stock Exchange (“NYSE” or “Exchange”), which is typically 4:00 p.m. Eastern Time (“ET”). However, if trading on the NYSE closes at a time other than 4:00 p.m. ET, the Fund’s NAV per share typically would still be determined as of the regular close of trading on the NYSE. The

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Fund does not price its shares on days that the NYSE is closed. Foreign exchanges may permit trading in foreign securities on days when the Fund is not open for business, which may result in the value of the Fund’s portfolio investments being affected at a time when you are unable to buy or sell shares.

Equity securities, including shares of closed-end funds and exchange-traded funds (“ETFs”), are valued at the last sale price or official closing price taken from the primary exchange in which each security trades. Investments in other mutual funds are valued at the closing NAV per share on the day of valuation. Debt securities are valued at bid quotes from broker/dealers or evaluated bid prices from pricing services, who may consider a number of inputs and factors, such as prices of comparable securities, yield curves, spreads, credit ratings, coupon rates, maturity, default rates, and underlying collateral. Futures are valued based on their daily settlement prices. Exchange-traded and over-the-counter (“OTC”) options are valued at the last sale price. Options with no last sale for the day are priced at mid quote. Swaps are valued at evaluated mid prices from pricing services.

The valuation of securities traded on foreign markets and certain fixed-income securities will generally be based on prices determined as of the earlier closing time of the markets on which they primarily trade unless a significant event has occurred. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. ET.

Securities may be valued at fair value, as determined in good faith and pursuant to procedures approved by the Board, under certain limited circumstances. For example, fair value pricing will be used when market quotations are not readily available or reliable, as determined by the Manager, such as when (i) trading for a security is restricted or stopped; (ii) a security’s trading market is closed (other than customary closings); or (iii) a security has been de-listed from a national exchange. A security with limited market liquidity may require fair value pricing if the Manager determines that the available price does not reflect the security’s true market value. In addition, if a significant event that the Manager determines to affect the value of one or more securities held by the Fund occurs after the close of a related exchange but before the determination of the Fund’s NAV, fair value pricing may be used on the affected security or securities. Securities of small-capitalization companies are also more likely to require a fair value determination using these procedures because they are more thinly traded and less liquid than the securities of larger-capitalization companies. The Fund may fair value securities as a result of significant events occurring after the close of the foreign markets in which the Fund invests as described below. In addition, the Fund may invest in illiquid securities requiring these procedures.

The Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund’s 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. If the Manager determines that the last quoted prices of non-U.S. securities will, in its judgment, materially affect the value of some or all its portfolio securities, the Manager can 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. These securities are fair valued using a pricing service, using methods approved by the Board, that considers the 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 American Depositary Receipts (“ADRs”) and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. The Fund uses outside pricing services to provide 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.

Attempts to determine the fair value of securities introduce an element of subjectivity to the pricing of securities. As a result, the price of a security determined through fair valuation techniques may differ from the price quoted or published by other sources and may not accurately reflect the market value of the security when

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trading resumes. If a reliable market quotation becomes available for a security formerly valued through fair valuation techniques, the Manager compares the new market quotation to the fair value price to evaluate the effectiveness of the Fund’s fair valuation procedures. If any significant discrepancies are found, the Manager may adjust the Fund’s fair valuation procedures.

Valuation Inputs

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

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

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

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

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 (“ABS”) are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by pricing service providers that use broker-dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, current market data, estimated cash flows, and market-based yield spreads for each tranche, and incorporates deal collateral performance, as available. Mortgage-related and ABS that use similar valuation techniques and inputs as described above are 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.

4.  Securities and Other Investments

Agency Mortgage-Backed Securities

Certain mortgage-backed securities (“MBS”) may be issued or guaranteed by the U.S. government or a government sponsored entity, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal

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Home Loan Mortgage Corporation (“Freddie Mac”). 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.

American Depositary Receipts and Non-Voting Depositary Receipts

ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Non-Voting Depositary Receipts (“NVDRs”) represent financial interests in an issuer but the holder is not entitled to any voting rights. 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 Funds 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 Funds to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.

Asset-Backed Securities

ABS are securities issued by trusts and special purpose entities that are backed by pools of assets, such as automobile and credit-card receivables and home equity loans, which pass through the payments on the underlying obligations to the security holders (less servicing fees paid to the originator or fees for any credit enhancement). Typically, loans or accounts receivable paper are transferred from the originator to a specially created trust, which repackages the trust’s interests as securities with a minimum denomination and a specific term. The securities are then privately placed or publicly offered. Examples include certificates for automobile receivables and so-called plastic bonds, backed by credit card receivables. The Balanced Fund is permitted to invest in ABS, subject to the Funds’ rating and quality requirements.

The value of an ABS is affected by, among other things, changes in the market’s perception of the asset backing the security, the creditworthiness of the servicing agent for the loan pool, the originator of the loans and the financial institution providing any credit enhancement. Payments of principal and interest passed through to holders of ABS are frequently supported by some form of credit enhancement, such as a letter of credit, surety bond, limited guarantee by another entity or by having a priority to certain of the borrower’s other assets. The degree of credit enhancement varies, and generally applies to only a portion of the ABS’s par value. Value is also affected if any credit enhancement has been exhausted.

Common Stock

Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or OTC. OTC stock may be less liquid than exchange-traded stock.

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Fixed-Income Investments

The Funds may hold debt, including government and corporate debt, and other fixed-income securities. Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause the Funds’ NAV to likewise decrease, and vice versa. How specific fixed-income securities may react to changes in interest rates will depend on the specific characteristics of each security. For example, while securities with longer maturities tend to produce higher yields, they also tend to be more sensitive to changes in prevailing interest rates and are, therefore, more volatile than shorter-term securities and are subject to greater market fluctuations as a result of changes in interest rates. Fixed-income securities are also subject to credit risk, which is the risk that the credit strength of an issuer of a fixed-income security will weaken and/or that the issuer will be unable to make timely principal and interest payments and that the security may go into default. In addition, there is prepayment risk, which is the risk that during periods of falling interest rates, certain fixed-income securities with higher interest rates, such as mortgage-backed securities (“MBS”) and ABS, may be prepaid by their issuers thereby reducing the amount of interest payments. This may result in a Fund having to reinvest its proceeds in lower yielding securities. Securities underlying MBS and ABS, which may include subprime mortgages, also may be subject to a higher degree of credit risk, valuation risk, and liquidity risk.

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.

Illiquid and Restricted Securities

Generally, an illiquid asset is an asset that the Funds reasonably expect cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Historically, illiquid securities have included securities that have not been registered under the Securities Act, securities that are otherwise not readily marketable, and repurchase agreements having a remaining maturity of longer than seven calendar days. Securities that have not been registered under the Securities Act are referred to as private placements or restricted securities and are purchased directly from the issuer or in the secondary market. These securities may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. A large institutional market exists for certain securities that are not registered under the Securities Act, including repurchase agreements, commercial paper, foreign securities, municipal securities and corporate bonds and notes. Institutional investors depend on an efficient institutional market in which the unregistered security can be readily resold or on an issuer’s ability to honor a demand for repayment. However, the fact that there are contractual or legal restrictions on resale of such investments to the general public or to certain institutions may not be indicative of their liquidity.

Limitations on resale may have an adverse effect on the marketability of portfolio securities, and the Fund might be unable to dispose of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions within seven calendar days. In addition, the Fund may get only limited information about an issuer, so it may be less able to predict a loss. The Fund also might have to register such restricted securities in order to dispose of them resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities. In recognition of the increased size and liquidity of the institutional

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October 31, 2019

market for unregistered securities and the importance of institutional investors in the formation of capital, the SEC adopted Rule 144A under the Securities Act. Rule 144A is designed to facilitate efficient trading among institutional investors by permitting the sale of certain unregistered securities to qualified institutional buyers. To the extent privately placed securities held by the Fund qualify under Rule 144A and an institutional market develops for those securities, the Fund likely will be able to dispose of the securities without registering them under the Securities Act. To the extent that institutional buyers become, for a time, uninterested in purchasing these securities, investing in Rule 144A securities could increase the level of the Fund’s illiquidity. The Manager or the sub-advisor, as applicable, may determine that certain securities qualified for trading under Rule 144A are liquid. Regulation S under the Securities Act permits the sale abroad of securities that are not registered for sale in the United States and includes a provision for U.S. investors, such as the Fund, to purchase such unregistered securities if certain conditions are met.

Securities sold in private placement offerings made in reliance on the “private placement” exemption from registration afforded by Section 4(a)(2) of the Securities Act and resold to qualified institutional buyers under Rule 144A under the Securities Act (“Section 4(a)(2) securities”) are restricted as to disposition under the federal securities laws, and generally are sold to institutional investors, such as the Fund, that agree they are purchasing the securities for investment and not with an intention to distribute to the public. Any resale by the purchaser must be pursuant to an exempt transaction and may be accomplished in accordance with Rule 144A. Section 4(a)(2) securities normally are resold to other institutional investors through or with the assistance of the issuer or dealers that make a market in the Section 4(a)(2) securities, thus providing liquidity. Restricted securities outstanding during the year ended October 31, 2019 are disclosed in the Notes to the Schedules of Investments.

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 Funds’ 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.

Mortgage-Related and Other Asset-Backed Securities

The Balanced Fund may invest in mortgage or other 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 Funds’ 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

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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.

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, unit investment trusts, and other investment companies of the Trust. The Funds may invest in securities of an investment company 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, the Funds become a shareholder of that investment company. As a result, the Funds’ shareholders indirectly will bear the Funds’ proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Funds’ shareholders directly bear in connection with the Funds’ 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 Funds in their Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

Privately Issued Mortgage-Backed Securities

Pools created by non-governmental issuers generally offer a higher rate of interest than government and government-related pools because there are no direct or indirect government guarantees of payments in such pools. However, timely payment of interest and principal of these pools is often partially supported by various enhancements such as over-collateralization and senior/subordination structures and by various forms of insurance or guarantees, including individual loan, title, pool and hazard insurance. The insurance and guarantees are issued by government entities, private insurers or the mortgage poolers. Although the market for such securities is becoming increasingly liquid, securities issued by certain private organizations may not be readily marketable.

Publicly Traded Partnerships; Master Limited Partnerships

The Funds may invest in publicly traded partnerships such as master limited partnerships (“MLPs”). MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the OTC market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. An MLP also may be an entity similar to a limited partnership, such as a limited liability company, which has a manager or managing member and non-managing members (who are like limited partners). The general partner or partners are jointly and severally responsible for the liabilities of the MLP. A Fund invests as a limited partner and normally would not be liable for the debts of an MLP beyond the amount the Fund has invested therein but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to a limited partner. The right of an MLP’s creditors would continue even after a Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.

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.

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U.S. Government Agency Securities

U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government currently provides financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law. U.S. Government securities include U.S. Treasury bills, notes and bonds, Federal Home Loan Bank (“FHLB”) obligations, Federal Farm Credit Bank (“FFCB”) obligations, U.S. Government agency obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.

U.S. Treasury Obligations

U.S. Treasury obligations include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations (known as “STRIPS”) and inflation-indexed securities. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates. U.S. Treasury obligations are subject to credit risk and interest rate risk.

Variable or Floating Rate Obligations

The interest rates payable on certain fixed-income securities in which the Balanced Fund may invest are not fixed and may fluctuate based upon changes in market rates. A variable rate obligation has an interest rate which is adjusted at predesignated periods in response to changes in the market rate of interest on which the interest rate is based. Variable and floating rate obligations are less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons.

5. Financial Derivative Instruments

The Funds may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. When considering the Funds’ use of derivatives, it is important to note that the Funds do not use derivatives for the purpose of creating financial leverage.

Futures Contracts

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

Upon entering into a futures contract, the Funds are required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Funds usually reflects this amount on the Schedules 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

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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.

During the year ended October 31, 2019, the Funds entered into futures contracts primarily for exposing cash to markets.

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

Average Futures Contracts Outstanding
Fund	Year Ended October 31, 2019
Balanced		25
Mid-Cap Value		79

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

Balanced Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of October 31, 2019:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts				Total
Receivable for variation margin from open futures contracts(2)		$	-		$	-		$	-		$	-		$	23,883			$	23,883
The effect of financial derivative instruments on the Statements of Operations as of October 31, 2019:
	Derivatives not accounted for as hedging instruments
Realized gain (loss) from derivatives recognized as a result of operations	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts				Total
Futures contracts		$	-		$	-		$	-		$	-		$	(282,052	)		$	(282,052	)
Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts				Total
Futures contracts		$	-		$	-		$	-		$	-		$	264,711			$	264,711

Mid-Cap Value Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of October 31, 2019:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Receivable for variation margin from open futures contracts(2)		$	-		$	-		$	-		$	-		$	83,789		$	83,789

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Notes to Financial Statements

October 31, 2019

The effect of financial derivative instruments on the Statements of Operations as of October 31, 2019:
	Derivatives not accounted for as hedging instruments
Realized gain (loss) from derivatives recognized as a result of operations	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Futures contracts		$	-		$	-		$	-		$	-		$	903,027		$	903,027
Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Futures contracts		$	-		$	-		$	-		$	-		$	1,531,334		$	1,531,334

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

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

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 the report date, October 31, 2019.

Balanced Fund

Offsetting of Financial and Derivative Assets as of October 31, 2019:
	Assets			Liabilities
Futures Contracts(1)	$	23,883		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	23,883		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(23,883	)	$	-

⁽¹⁾ Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

Mid-Cap Value Fund

Offsetting of Financial and Derivative Assets as of October 31, 2019:
	Assets			Liabilities
Futures Contracts(1)	$	83,789		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	83,789		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(83,789	)	$	-

	Remaining Contractual Maturity of the Agreements As of October 31, 2019
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	1,233,330	$	-	$	-	$	-	$	1,233,330
Total Borrowings	$	1,233,330	$	-	$	-	$	-	$	1,233,330
Gross amount of recognized liabilities for securities lending transactions									$	1,233,330

⁽¹⁾ Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

52

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

6.  Principal Risks

Investing in the Funds may involve certain risks including, but not limited to, those described below.

Asset-Backed and Mortgage Related Securities Risk

Investments in asset-backed and mortgage related securities are subject to market risks for fixed-income securities which include, but are not limited to, interest rate risk, prepayment risk and extension risk. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain MBS and ABS securities. If interest rates fall, the rate of prepayments tends to increase as borrowers are motivated to pay off debt and refinance at new lower rates. When mortgages and other obligations are prepaid and when securities are called, a Fund may have to reinvest in securities with a lower yield or fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss and/or a decrease in the amount of dividends and yield. Because prepayments increase when interest rates fall, the prices of MBS and ABS do not increase as much as other fixed income securities when interest rates fall. When interest rates rise, borrowers are less likely to prepay their mortgage and other loans. A decreased rate of prepayments lengthens the expected maturity of MBS and ABS. Therefore, the prices of MBS and ABS may decrease more than prices of other fixed-income securities when interest rates rise. Rising interest rates tend to extend the duration of these securities, making them more sensitive to changes in interest rates. Rising interest rates also may increase the risk of default by borrowers. As a result, in a period of rising interest rates, a Fund that holds these types of securities, may experience additional volatility and losses. A decline in the credit quality of and defaults by the issuers of asset-backed and mortgage related securities or instability in the markets for such securities may affect the value and liquidity of such securities, which could result in losses to a Fund. In addition, certain asset-backed and mortgage related securities may include securities backed by pools of loans made to “subprime” borrowers or borrowers with blemished credit histories; the risk of defaults is generally higher in the case of mortgage pools that include such subprime mortgages.

Credit Risk

The Funds are subject to the risk that the issuer or guarantor of a debt security, or the counterparty to a derivatives contract or a loan, will fail to make timely payment of interest or principal or otherwise honor its obligations or default completely. A decline in the credit rating of an individual security held by the Funds may have an adverse impact on its price and make it difficult for the Funds to sell it. Ratings represent a rating agency’s opinion regarding the quality of the security and are not a guarantee of quality. Rating agencies might not always change their credit rating on an issuer or security in a timely manner to reflect events that could affect the issuer’s ability to make timely payments on its obligations. Credit risk is typically greater for securities with ratings that are below investment grade.

Equity Investments Risk

Equity securities are subject to market risk. The Funds’ investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Funds to additional risk. The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company. Preferred stocks and convertible securities are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property

53

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

values. Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency fluctuations and political and financial instability in the home country of a particular depositary receipt or foreign stock.

Foreign Investing and Emerging Markets Risk

Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. To the extent the Funds invest a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region. In addition, the economies and political environments of emerging market countries tend to be more unstable than those of developed countries, resulting in more volatile rates of return than the developed markets and substantially greater risk to investors. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currency and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depository or their agents goes bankrupt. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than, or in addition to, investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities, resulting in increased volatility and limited liquidity for emerging market securities; trading suspensions; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return.

Futures Contracts Risk

Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Funds and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).

Illiquid and Restricted Securities Risk

Securities not registered in the U.S. under the Securities Act, including Rule 144A securities, are restricted as to their resale. Such securities may not be listed on an exchange and may have no active trading market. They may be more difficult to purchase or sell at an advantageous time or price because such securities may not be readily marketable in broad public markets. The Funds may not be able to sell a restricted security when the sub-advisor considers it desirable to do so and/or may have to sell the security at a lower price than the Funds believe is its fair market value. In addition, transaction costs may be higher for restricted securities and the Funds may receive only limited information regarding the issuer of a restricted security. The Funds may have to bear the expense of registering restricted securities for resale and the risk of substantial delays in effecting the registration.

Interest Rate Risk

Investments in fixed-income securities or derivatives that are influenced by interest rates are subject to interest rate risk. The value of the Funds’ fixed-income investments typically will fall when interest rates rise. The Funds may be particularly sensitive to changes in interest rates if it invests in debt securities with intermediate and

54

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

long terms to maturity. Debt securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than debt securities with shorter durations. For example, if a bond has a duration of seven years, a 1% increase in interest rates could be expected to result in a 7% decrease in the value of the bond. Yields of debt securities will fluctuate over time. Following the financial crisis that started in 2008, the Federal Reserve has attempted to stabilize the economy and support the economic recovery by keeping the federal funds rate (the interest rate at which depository institutions lend reserve balances to each other overnight) at or near zero percent. The Federal Reserve has raised the federal funds rate several times since December 2015 and may continue to increase or decrease rates in the future. Interest rates may rise significantly and/or rapidly, potentially resulting in substantial losses to the Funds. During periods of very low or negative interest rates, the Funds may be unable to maintain positive returns. Certain European countries and Japan have recently experienced negative interest rates on deposits and debt securities have traded at negative yields. Negative interest rates may become more prevalent among non-U.S. issuers, and potentially within the United States. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund performance to the extent the Funds are exposed to such interest rates.

Liquidity Risk

When there is little or no active trading market for a specific type of security, it can become more difficult to purchase or sell the securities at or near their perceived value. During such periods, certain investments held by the Funds may be difficult to sell or other investments may be difficult to purchase at favorable times or prices. As a result, the Fund may have to lower the price on certain securities that it is trying to sell, sell other securities instead or forgo an investment opportunity, any of which could have a negative effect on Fund management or performance. Additionally, the market for certain investments may become illiquid under adverse market or economic conditions independent of any specific adverse changes in the conditions of a particular issuer.

Market Risk

Conditions in the U.S. and many foreign economies have resulted, and may continue to result, in certain instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In some cases, traditional market participants have been less willing to make a market in some types of debt instruments, which has affected the liquidity of those instruments. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Treasury, causing the prices of these securities to rise and the yields to decline. Reduced liquidity in fixed income and credit markets may negatively affect many issuers worldwide. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.

In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. In some countries where economic conditions are recovering, they are nevertheless perceived as still fragile. Withdrawal of government support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding, could adversely impact the value and liquidity of certain securities. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations, including changes in tax laws. The impact of new financial regulation legislation on the markets and the practical implications for market participants may not be fully known for some time. Regulatory changes are causing some financial services companies to exit long-standing lines of business, resulting in dislocations for other market participants. In addition, political and governmental events within the U.S. and abroad, such as the United States government’s

55

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

inability at times to agree on a long-term budget and deficit reduction plan, the threat of a federal government shutdown and threats not to increase the federal government’s debt limit, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The U.S. government has reduced the federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets’ expectations for changes in government policies are not borne out.

Changes in market conditions will not have the same impact on all types of securities. Interest rates have been unusually low in recent years in the United States and abroad. Because there is little precedent for this situation, it is difficult to predict the impact of a significant rate increase on various markets. For example, because investors may buy securities or other investments with borrowed money, a significant increase in interest rates may cause a decline in the markets for those investments. Because of the sharp decline in the worldwide price of oil, there is a concern that oil producing nations may withdraw significant assets now held in U.S. Treasuries, which could force a substantial increase in interest rates. Regulators have expressed concern that rate increases may cause investors to sell fixed income securities faster than the market can absorb them, contributing to price volatility. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse.

The precise timing and the resulting impact of the United Kingdom’s departure from the European Union (the “EU”), commonly referred to as “Brexit,” are not yet known. The effect on the United Kingdom’s economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are matters to be negotiated. The outcomes may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time, which could significantly adversely affect the value of the Fund’s investments in the United Kingdom and Europe.

Mortgage-Backed and Mortgage Related Securities Risk

Investments in mortgage-backed and mortgage-related securities are subject to market risks for fixed-income securities which include, but are not limited to, interest rate risk, credit risk, extension risk and prepayment risk. When mortgages and other obligations are prepaid and when securities are called, a Fund may have to reinvest in securities with a lower yield or fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss and/or a decrease in the amount of dividends and yield.

Multiple Sub-Advisor Risk

The Manager may allocate the Funds’ assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Funds’ assets. To a significant extent, the Funds’ performance will depend on the success of the Manager in allocating the Funds’ assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-advisor manages its allocated portion of the Funds independently from another sub-advisor, the same security may be held in different portions of the Funds, or may be acquired for one portion of the Funds at a time when a sub-advisor to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Funds’ holdings. Similarly, under some market conditions, one sub-advisor may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-advisor believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Funds. Because each sub-advisor directs the trading for its own portion of the Funds, and does not aggregate its transactions with those of the other sub-advisors, the Funds may incur higher brokerage costs than would be the case if a single sub-adviser were

56

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

managing the entire Fund. In addition, while the Manager seeks to allocate the Funds’ assets among the Funds’ sub-advisors in a manner that it believes is consistent with achieving the Funds’ investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Funds’ assets among sub-advisors, due to factors that could impact the Manager’s revenues and profits.

Other Investment Companies Risk

The Funds may invest in shares of other registered investment companies, including money market funds. To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses, including for example advisory and administrative fees charged by those investment companies in addition to the Funds’ direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Funds’ investments in money market funds are subject to interest rate risk, credit risk, and market risk. The Funds must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Funds’ investment will decline, adversely affecting the Funds’ performance. To the extent the Funds invest in other investment companies that invest in equity securities, fixed income securities and/or foreign securities, or track an index, the Funds are subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject.

Prepayment and Extension Risk

When interest rates fall, borrowers will generally repay the loans that underlie certain debt securities, especially mortgage-related and other types of asset-backed securities, more quickly than expected, causing the issuer of the security to repay the principal prior to the security’s expected maturity date. The Fund may need to reinvest the proceeds at a lower interest rate, reducing its income. Securities subject to prepayment risk generally offer less potential for gains when prevailing interest rates fall. If the Fund buys those securities at a premium, accelerated prepayments on those securities could cause the Fund to lose a portion of its principal investment. The impact of prepayments on the price of a security may be difficult to predict and may increase the security’s price volatility.

Redemption Risk

The Funds may experience periods of heavy redemptions that could cause the Funds to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in the Funds, have short investment horizons, or have unpredictable cash flow needs. A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from mutual funds that hold large amounts of fixed-income securities. This, coupled with a reduction in the ability or willingness of dealers and other institutional investors to buy or hold fixed-income securities, may result in decreased liquidity and increased volatility in the fixed-income markets, and heightened redemption risk. Heavy redemptions, whether by a few large investors or many smaller investors, could hurt the Funds’ performance. This risk is heightened if the Fund invests in emerging market securities, which are generally less liquid than the securities of U.S. and other developed markets. The sale of assets to meet redemption requests may create net capital gains or losses, which could cause the Funds to have to distribute substantial capital gains.

Sector Risk

Sector risk is the risk associated with a Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase.

57

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

To the extent a Fund invests significantly in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than investment companies investing more broadly.

Securities Lending Risk

A Fund may lend its portfolio securities to brokers, dealers and financial institutions to seek income. There is a risk that a borrower may default on its obligations to return loaned securities; however, a Fund’s securities lending agent indemnifies the Fund against that risk. There is a risk that the assets of a Fund’s securities lending agent may be insufficient to satisfy any contractual indemnification requirements to the Fund. Borrowers of a Fund’s securities typically provide collateral in the form of cash that is reinvested in securities. A Fund will be responsible for the risks associated with the investment of cash collateral, including any collateral invested in an affiliated money market fund. A Fund may lose money on its investment of cash collateral or may fail to earn sufficient income on its investment to meet obligations to the borrower. In addition, delays may occur in the recovery of securities from borrowers, which could interfere with a Fund’s ability to vote proxies or to settle transactions and there is the risk of possible loss of rights in the collateral should the borrower fail financially. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.

U.S. Government Securities and Government-Sponsored Enterprises Risk

A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Additionally, circumstances could arise that would prevent the payment of interest or principal. This could result in losses to the Fund. Investments in government-sponsored enterprises are debt obligations issued by agencies and instrumentalities of the U.S. Government. These obligations vary in the level of support they receive from the U.S. Government. They may be: (i) supported by the full faith and credit of the U.S. Treasury, such as those of the Government National Mortgage Association (‘‘Ginnie Mae’’); (ii) supported by the right of the issuer to borrow from the U.S. Treasury, such as those of the Federal Home Loan Bank and the Federal Farm Credit Banks; (iii) supported by the discretionary authority of the U.S. Government to purchase the agency obligations, such as those of Fannie Mae and Freddie Mac or (iv) supported only by the credit of the issuer, such as those of the Federal Farm Credit Bureau. The U.S. Government may choose not to provide financial support to U.S. Government-sponsored agencies or instrumentalities if it is not legally obligated to do so, in which case, if the issuer defaulted, to the extent the Funds holds securities of such issuers, it might not be able to recover its investment from the U.S. Government.

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 distributions 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 unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2019 remain subject to examination by the Internal Revenue Service. If applicable, the Funds recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statements of Operations.

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American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

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 (depreciation), as applicable, as the income is earned or capital gains are recorded.

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 tax character of distributions paid were as follows:

	Balanced Fund				Mid-Cap Value Fund
	Year Ended October 31, 2019		Year Ended October 31, 2018		Year Ended October 31, 2019		Year Ended October 31, 2018
Distributions paid from:
Ordinary income*
Institutional Class	$	1,032,845	$	3,590,211	$	3,461,026	$	2,517,255
Y Class		1,191,905		2,835,075		1,228,142		867,845
Investor Class		2,000,977		5,484,303		4,048,812		2,066,989
Advisor Class		106,216		404,894		27,459		5,325
A Class		329,762		990,798		108,815		59,166
C Class		447,883		1,588,575		11,735		-
R6 Class		-		-		2,691		-
Long-term capital gains
Institutional Class		3,969,052		2,671,741		12,688,768		6,917,398
Y Class		4,687,263		1,986,952		4,778,008		2,579,185
Investor Class		7,902,020		4,156,521		18,693,184		7,195,645
Advisor Class		430,864		356,680		171,300		89,403
A Class		1,306,565		727,858		603,423		374,971
C Class		2,617,867		1,388,117		302,234		184,144
R6 Class		-		-		9,845		-
Total distributions paid	$	26,023,219	$	26,181,725	$	46,135,442	$	22,857,326

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

As of October 31, 2019 the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Balanced	$	223,663,111	$	40,402,798	$	(8,060,248	)	$	32,342,550
Mid-Cap Value		453,297,404		89,194,286		(45,766,752	)		43,427,534

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences		Distributable Earnings
Balanced	$	32,342,550	$	6,450,866	$	15,454,073	$	-		$	-	$	54,247,489
Mid-Cap Value		43,427,534		4,826,801		-		(18,737,756	)		-		29,516,579

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains (losses) on certain derivative instruments, reclassifications of income from investments in real estate investment securities and publicly traded partnerships, and book amortization of premiums.

59

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

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

Accordingly, the following amounts represent current year permanent differences derived from tax-exempt interest and nondeductible expenses from investments in publicly traded partnerships as of October 31, 2019:

Fund	Paid-In-Capital			Distributable Earnings/(Deficits)
Balanced	$	(65,537	)	$	65,537
Mid-Cap Value		(8,452	)		8,452

Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the 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.

As of October 31, 2019, the Funds had the following capital loss carryforwards:

Fund	Short-Term Capital Loss Carryforwards		Long-Term Capital Loss Carryforwards
Balanced	$	-	$	-
Mid-Cap Value		18,737,756		-

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2019 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Purchases of U.S. Government Securities		Sales (non-U.S. Government Securities)		Sales of U.S. Government Securities
Balanced	$	54,965,973	$	128,462,907	$	104,053,998	$	131,544,136
Mid-Cap Value		172,646,736		-		444,404,458		-

A summary of the Funds’ transactions in the USG Select Fund for the year ended October 31, 2019 were as follows:

Fund	Type of Transaction	October 31, 2018 Shares/Fair Value		Purchases		Sales		October 31, 2019 Shares/Fair Value		Dividend Income
Balanced	Direct	$	7,833,723	$	144,063,630	$	146,993,105	$	4,904,248	$	119,895
Balanced	Securities Lending		2,690,067		22,183,710		24,873,777		-		N/A
Mid-Cap Value	Direct		22,792,845		390,037,841		394,771,630		18,059,056	$	448,948
Mid-Cap Value	Securities Lending		12,169,943		80,534,797		91,471,410		1,233,330		N/A

9.  Securities Lending

The Funds may lend their securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value of domestic securities loaned and 105% of the fair value of international securities loaned. Collateral is monitored and marked-to-market daily. Daily mark-to-market amounts are required to be paid to the borrower or received

60

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

from the borrower by the end of the following business day. This one day settlement for mark-to-market amounts may result in the collateral being temporarily less than the value of the securities on loan or temporarily more than the required minimum collateral.

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

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

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

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

As of October 31, 2019, the value of outstanding securities on loan and the value of collateral were as follows:

Fund	Market Value of Securities on Loan		Cash Collateral Received		Non-Cash Collateral Received		Total Collateral Received
Balanced	$	2,452,229	$	–	$	2,506,662	$	2,506,662
Mid-Cap Value		20,651,471		1,233,330		19,856,407		21,089,737

Cash collateral is listed on the Funds’ Schedules of Investments and is shown on the Statements of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statements of Operations.

Non-cash collateral received by the Funds may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Funds’ Schedules of Investments or Statements of Assets and Liabilities.

10.  Borrowing Arrangements

Effective November 15, 2018 (the “Effective Date”), the Funds, along with certain other funds managed by the Manager (“Participating Funds”), entered into a committed revolving line of credit (the “Committed Line”) agreement with State Street Bank and Trust Company (the “Bank”) to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Committed Line is $250 million with interest at a rate equal to the higher of

61

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

(a) one-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on amounts borrowed. Each of the Participating Funds paid a closing fee of $100,000 on the Effective Date and a quarterly commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 14, 2019, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

On the Effective Date, the Funds, along with certain other Participating Funds managed by the Manager, also entered into an uncommitted discretionary demand revolving line of credit (the “Uncommitted Line”) agreement with the Bank to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Uncommitted Line is $50 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on each outstanding loan. Each of the Participating Funds paid a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 14, 2019 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

The Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Other expenses” on the Statements of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.

During the year ended October 31, 2019, the Funds did not utilize this facility.

11.  Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Funds:

	Institutional Class
	Year Ended October 31,
	2019						2018
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		456,844		$	7,138,774			531,898		$	8,911,974
Reinvestment of dividends		350,166			4,997,137			371,350			6,232,774
Shares redeemed		(1,674,089	)		(25,817,337	)		(2,279,037	)		(38,703,020	)
Net (decrease) in shares outstanding		(867,079	)	$	(13,681,426	)		(1,375,789	)	$	(23,558,272	)
	Y Class
	Year Ended October 31,
	2019						2018
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		987,434		$	15,397,785			1,548,487		$	26,278,299
Reinvestment of dividends		378,979			5,443,121			262,445			4,429,699
Shares redeemed		(1,916,647	)		(29,418,048	)		(1,172,305	)		(19,896,265	)
Net increase (decrease) in shares outstanding		(550,234	)	$	(8,577,142	)		638,627		$	10,811,733
	Investor Class
	Year Ended October 31,
	2019						2018
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		527,105		$	7,203,146			693,194		$	10,443,570
Reinvestment of dividends		773,787			9,716,524			632,578			9,450,425
Shares redeemed		(2,084,851	)		(28,573,330	)		(1,856,761	)		(27,850,950	)
Net (decrease) in shares outstanding		(783,959	)	$	(11,653,660	)		(530,989	)	$	(7,956,955	)
	Advisor Class
	Year Ended October 31,
	2019						2018
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		34,642		$	505,559			60,001		$	958,063
Reinvestment of dividends		40,103			536,879			48,037			761,574
Shares redeemed		(84,630	)		(1,245,331	)		(372,487	)		(5,908,441	)
Net (decrease) in shares outstanding		(9,885	)	$	(202,893	)		(264,449	)	$	(4,188,804	)

62

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

	A Class
	Year Ended October 31,
	2019						2018
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		146,435		$	2,007,483			160,555		$	2,416,192
Reinvestment of dividends		125,852			1,576,366			111,181			1,658,485
Shares redeemed		(399,350	)		(5,397,912	)		(428,548	)		(6,460,378	)
Net (decrease) in shares outstanding		(127,063	)	$	(1,814,063	)		(156,812	)	$	(2,385,701	)
	C Class
	Year Ended October 31,
	2019						2018
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		213,762		$	2,975,157			293,469		$	4,461,404
Reinvestment of dividends		233,638			2,939,348			188,746			2,851,672
Shares redeemed		(794,915	)		(10,895,250	)		(726,271	)		(11,046,787	)
Net (decrease) in shares outstanding		(347,515	)	$	(4,980,745	)		(244,056	)	$	(3,733,711	)
	Institutional Class
	Year Ended October 31,
	2019						2018
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		2,933,380		$	43,338,685			6,269,618		$	106,947,861
Reinvestment of dividends		1,242,979			15,910,136			526,390			9,164,443
Shares redeemed		(9,286,798	)		(138,322,894	)		(6,183,734	)		(105,856,767	)
Net increase (decrease) in shares outstanding		(5,110,439	)	$	(79,074,073	)		612,274		$	10,255,537
	Y Class
	Year Ended October 31,
	2019						2018
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		1,021,924		$	14,832,152			1,857,922		$	31,620,714
Reinvestment of dividends		470,384			5,973,877			197,830			3,416,518
Shares redeemed		(2,233,351	)		(32,603,104	)		(1,620,549	)		(27,617,833	)
Net increase (decrease) in shares outstanding		(741,043	)	$	(11,797,075	)		435,203		$	7,419,399
	Investor Class
	Year Ended October 31,
	2019						2018
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		2,591,144		$	38,213,302			14,508,017		$	258,034,860
Reinvestment of dividends		1,753,702			22,727,979			526,115			9,254,355
Shares redeemed		(13,815,110	)		(204,345,745	)		(6,582,101	)		(113,606,798	)
Net increase (decrease) in shares outstanding		(9,470,264	)	$	(143,404,464	)		8,452,031		$	153,682,417
	Advisor Class
	Year Ended October 31,
	2019						2018
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		83,313		$	1,198,170			113,873		$	1,888,435
Reinvestment of dividends		15,813			198,759			5,543			94,728
Shares redeemed		(126,192	)		(1,844,844	)		(101,012	)		(1,693,636	)
Net increase (decrease) in shares outstanding		(27,066	)	$	(447,915	)		18,404		$	289,527
	A Class
	Year Ended October 31,
	2019						2018
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		74,755		$	1,099,220			343,780		$	5,748,823
Reinvestment of dividends		56,526			708,842			25,397			433,278
Shares redeemed		(679,129	)		(10,091,248	)		(651,244	)		(10,958,448	)
Net (decrease) in shares outstanding		(547,848	)	$	(8,283,186	)		(282,067	)	$	(4,776,347	)

63

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

	C Class
	Year Ended October 31,
	2019						2018
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		14,869		$	203,842			83,507		$	1,358,250
Reinvestment of dividends		25,509			309,934			11,018			182,135
Shares redeemed		(140,085	)		(1,926,995	)		(95,319	)		(1,541,599	)
Net (decrease) in shares outstanding		(99,707	)	$	(1,413,219	)		(794	)	$	(1,214	)
	R6 Class
	Year Ended October 31, 2019						February 28, 2018A to October 31, 2018
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		149,021		$	2,190,686			18,266		$	315,231
Reinvestment of dividends		979			12,536			–			–
Shares redeemed		(16,218	)		(231,603	)		(5,909	)		(100,991	)
Net increase in shares outstanding		133,782		$	1,971,619			12,357		$	214,240

^A  Commencement of operations.

12.  Subsequent Events

At meetings held on November 11-12, 2019, the Board of the Trust approved the termination of Brandywine Global Investment Management, LLC on behalf of the American Beacon Balanced Fund, effective on or about January 15, 2020.

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no additional material events that would require disclosure in the Funds’ financial statements through this date.

64

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional ClassA
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	16.20		$	17.30		$	15.26		$	15.79		$	16.79
Income (loss) from investment operations:
Net investment income		0.31			0.28			0.36			0.27			0.32
Net gains (losses) on investments (both realized and unrealized)		1.23			(0.10	)		2.04			0.20			(0.32	)
Total income (loss) from investment operations		1.54			0.18			2.40			0.47			-
Less distributions:
Dividends from net investment income		(0.26	)		(0.48	)		(0.36	)		(0.25	)		(0.22	)
Distributions from net realized gains		(1.12	)		(0.80	)		-			(0.75	)		(0.78	)
Total distributions		(1.38	)		(1.28	)		(0.36	)		(1.00	)		(1.00	)
Net asset value, end of period	$	16.36		$	16.20		$	17.30		$	15.26		$	15.79
Total returnB		10.89	%		0.84	%		15.82	%		3.30	%		(0.07	)%
Ratios and supplemental data:
Net assets, end of period	$	46,593,155		$	60,191,704		$	88,015,702		$	485,231,068		$	99,173,943
Ratios to average net assets:
Expenses, before reimbursements		0.66	%		0.62	%		0.59	%		0.62	%		0.58	%
Expenses, net of reimbursements		0.66	%		0.62	%		0.59	%		0.62	%		0.58	%
Net investment income, before expense reimbursements		2.24	%		1.95	%		1.80	%		1.90	%		1.83	%
Net investment income, net of reimbursements		2.24	%		1.95	%		1.80	%		1.90	%		1.83	%
Portfolio turnover rate		68	%		28	%		32	%		16	%		62	%

^A  On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class.

^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 U.S. GAAP 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.

See accompanying notes

65

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	16.31		$	17.39		$	15.30		$	15.84		$	16.83
Income (loss) from investment operations:
Net investment income		0.33			0.35			0.24			0.30			0.30
Net gains (losses) on investments (both realized and unrealized)		1.20			(0.16	)		2.20			0.13			(0.30	)
Total income (loss) from investment operations		1.53			0.19			2.44			0.43			-
Less distributions:
Dividends from net investment income		(0.25	)		(0.47	)		(0.35	)		(0.22	)		(0.21	)
Distributions from net realized gains		(1.12	)		(0.80	)		-			(0.75	)		(0.78	)
Total distributions		(1.37	)		(1.27	)		(0.35	)		(0.97	)		(0.99	)
Net asset value, end of period	$	16.47		$	16.31		$	17.39		$	15.30		$	15.84
Total returnA		10.75	%		0.88	%		16.05	%		3.06	%		(0.07	)%
Ratios and supplemental data:
Net assets, end of period	$	62,956,422		$	71,296,735		$	64,926,394		$	28,843,268		$	39,151,318
Ratios to average net assets:
Expenses, before reimbursements		0.74	%		0.70	%		0.68	%		0.72	%		0.66	%
Expenses, net of reimbursements		0.74	%		0.70	%		0.68	%		0.72	%		0.66	%
Net investment income, before expense reimbursements		2.15	%		1.86	%		1.67	%		1.95	%		1.75	%
Net investment income, net of reimbursements		2.15	%		1.86	%		1.67	%		1.95	%		1.75	%
Portfolio turnover rate		68	%		28	%		32	%		16	%		62	%

^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 U.S. GAAP 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.

See accompanying notes

66

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	14.41		$	15.51		$	13.71		$	14.30		$	15.31
Income (loss) from investment operations:
Net investment income		0.18			0.20			0.15			0.18			0.22
Net gains (losses) on investments (both realized and unrealized)		1.11			(0.07	)		1.96			0.18			(0.26	)
Total income (loss) from investment operations		1.29			0.13			2.11			0.36			(0.04	)
Less distributions:
Dividends from net investment income		(0.22	)		(0.43	)		(0.31	)		(0.20	)		(0.19	)
Distributions from net realized gains		(1.12	)		(0.80	)		-			(0.75	)		(0.78	)
Total distributions		(1.34	)		(1.23	)		(0.31	)		(0.95	)		(0.97	)
Net asset value, end of period	$	14.36		$	14.41		$	15.51		$	13.71		$	14.30
Total returnA		10.50	%		0.62	%		15.52	%		2.85	%		(0.35	)%
Ratios and supplemental data:
Net assets, end of period	$	96,065,263		$	107,677,984		$	124,143,894		$	127,235,433		$	155,757,561
Ratios to average net assets:
Expenses, before reimbursements		0.97	%		0.95	%		0.89	%		0.95	%		0.91	%
Expenses, net of reimbursements		0.97	%		0.95	%		0.89	%		0.95	%		0.91	%
Net investment income, before expense reimbursements		1.92	%		1.62	%		1.48	%		1.72	%		1.51	%
Net investment income, net of reimbursements		1.92	%		1.62	%		1.48	%		1.72	%		1.51	%
Portfolio turnover rate		68	%		28	%		32	%		16	%		62	%

^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 U.S. GAAP 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.

See accompanying notes

67

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	15.29		$	16.38		$	14.46		$	15.02		$	16.04
Income (loss) from investment operations:
Net investment income		0.26			0.16			0.21			0.24			0.22
Net gains (losses) on investments (both realized and unrealized)		1.11			(0.06	)		1.99			0.12			(0.29	)
Total income (loss) from investment operations		1.37			0.10			2.20			0.36			(0.07	)
Less distributions:
Dividends from net investment income		(0.20	)		(0.39	)		(0.28	)		(0.17	)		(0.17	)
Distributions from net realized gains		(1.12	)		(0.80	)		-			(0.75	)		(0.78	)
Total distributions		(1.32	)		(1.19	)		(0.28	)		(0.92	)		(0.95	)
Net asset value, end of period	$	15.34		$	15.29		$	16.38		$	14.46		$	15.02
Total returnA		10.41	%		0.42	%		15.31	%		2.71	%		(0.58	)%
Ratios and supplemental data:
Net assets, end of period	$	6,039,168		$	6,174,284		$	10,944,675		$	10,603,004		$	13,510,138
Ratios to average net assets:
Expenses, before reimbursements		1.14	%		1.12	%		1.08	%		1.12	%		1.06	%
Expenses, net of reimbursements		1.14	%		1.12	%		1.08	%		1.12	%		1.06	%
Net investment income, before expense reimbursements		1.76	%		1.45	%		1.29	%		1.55	%		1.35	%
Net investment income, net of reimbursements		1.76	%		1.45	%		1.29	%		1.55	%		1.35	%
Portfolio turnover rate		68	%		28	%		32	%		16	%		62	%

^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 U.S. GAAP 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.

See accompanying notes

68

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	14.38		$	15.48		$	13.69		$	14.27		$	15.29
Income (loss) from investment operations:
Net investment income		0.22			0.22			0.16			0.21			0.23
Net gains (losses) on investments (both realized and unrealized)		1.07			(0.07	)		1.93			0.15			(0.29	)
Total income (loss) from investment operations		1.29			0.15			2.09			0.36			(0.06	)
Less distributions:
Dividends from net investment income		(0.22	)		(0.45	)		(0.30	)		(0.19	)		(0.18	)
Distributions from net realized gains		(1.12	)		(0.80	)		-			(0.75	)		(0.78	)
Total distributions		(1.34	)		(1.25	)		(0.30	)		(0.94	)		(0.96	)
Net asset value, end of period	$	14.33		$	14.38		$	15.48		$	13.69		$	14.27
Total returnA		10.54	%		0.73	%		15.36	%		2.84	%		(0.48	)%
Ratios and supplemental data:
Net assets, end of period	$	16,228,685		$	18,121,273		$	21,934,880		$	24,892,096		$	29,074,120
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.01	%		0.91	%		0.99	%		1.02	%		0.97	%
Expenses, net of reimbursements or recoupments		1.01	%B		0.83	%		0.99	%		1.02	%		0.97	%
Net investment income, before expense reimbursements or recoupments		1.88	%		1.66	%		1.39	%		1.64	%		1.44	%
Net investment income, net of reimbursements or recoupments		1.88	%		1.74	%		1.39	%		1.64	%		1.44	%
Portfolio turnover rate		68	%		28	%		32	%		16	%		62	%

^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 U.S. GAAP 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  This ratio does not include a voluntary reimbursement of service fees as included in the prior year.

See accompanying notes

69

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	14.55		$	15.64		$	13.83		$	14.43		$	15.47
Income (loss) from investment operations:
Net investment income		0.10			0.13			0.08			0.12			0.14
Net gains (losses) on investments (both realized and unrealized)		1.09			(0.09	)		1.92			0.13			(0.29	)
Total income (loss) from investment operations		1.19			0.04			2.00			0.25			(0.15	)
Less distributions:
Dividends from net investment income		(0.14	)		(0.33	)		(0.19	)		(0.10	)		(0.11	)
Distributions from net realized gains		(1.12	)		(0.80	)		-			(0.75	)		(0.78	)
Total distributions		(1.26	)		(1.13	)		(0.19	)		(0.85	)		(0.89	)
Net asset value, end of period	$	14.48		$	14.55		$	15.64		$	13.83		$	14.43
Total returnA		9.63	%		0.04	%		14.50	%		2.03	%		(1.14	)%
Ratios and supplemental data:
Net assets, end of period	$	30,848,500		$	36,046,543		$	42,575,983		$	40,827,570		$	45,641,648
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.76	%		1.66	%		1.73	%		1.77	%		1.72	%
Expenses, net of reimbursements or recoupments		1.76	%B		1.54	%		1.73	%		1.77	%		1.72	%
Net investment income, before expense reimbursements or recoupments		1.13	%		0.91	%		0.63	%		0.89	%		0.69	%
Net investment income, net of reimbursements or recoupments		1.13	%		1.02	%		0.63	%		0.89	%		0.69	%
Portfolio turnover rate		68	%		28	%		32	%		16	%		62	%

^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 U.S. GAAP 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  This ratio does not include a voluntary reimbursement of service fees as included in the prior year.

See accompanying notes

70

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended October 31,
	2019			2018			2017			2016			2015A
Net asset value, beginning of period	$	15.52		$	17.25		$	14.03		$	14.62		$	14.76
Income (loss) from investment operations:
Net investment income		0.25			0.21			0.16			0.26			0.16
Net gains (losses) on investments (both realized and unrealized)		0.65			(1.34	)		3.28			0.03			0.25
Total income (loss) from investment operations		0.90			(1.13	)		3.44			0.29			0.41
Less distributions:
Dividends from net investment income		(0.22	)		(0.16	)		(0.22	)		(0.17	)		(0.10	)
Distributions from net realized gains		(0.79	)		(0.44	)		-			(0.71	)		(0.45	)
Total distributions		(1.01	)		(0.60	)		(0.22	)		(0.88	)		(0.55	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	B
Net asset value, end of period	$	15.41		$	15.52		$	17.25		$	14.03		$	14.62
Total returnC		7.08	%		(6.89	)%		24.71	%		2.39	%		2.73	%
Ratios and supplemental data:
Net assets, end of period	$	168,201,120		$	248,752,034		$	265,934,589		$	195,472,135		$	258,503,278
Ratios to average net assets:
Expenses, before reimbursements		0.93	%		0.85	%		0.89	%		0.89	%		0.85	%
Expenses, net of reimbursements		0.93	%		0.85	%		0.89	%		0.89	%		0.85	%
Net investment income, before expense reimbursements		1.40	%		1.19	%		1.06	%		1.65	%		1.10	%
Net investment income, net of reimbursements		1.40	%		1.19	%		1.06	%		1.65	%		1.10	%
Portfolio turnover rate		30	%		34	%		28	%		27	%		79	%

^A  WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015.

^B  Amount represents less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

71

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2019			2018			2017			2016			2015A
Net asset value, beginning of period	$	15.39		$	17.11		$	13.92		$	14.52		$	14.66
Income (loss) from investment operations:
Net investment income		0.22			0.19			0.15			0.23			0.15
Net gains (losses) on investments (both realized and unrealized)		0.65			(1.32	)		3.25			0.05			0.26
Total income (loss) from investment operations		0.87			(1.13	)		3.40			0.28			0.41
Less distributions:
Dividends from net investment income		(0.20	)		(0.15	)		(0.21	)		(0.17	)		(0.10	)
Distributions from net realized gains		(0.79	)		(0.44	)		-			(0.71	)		(0.45	)
Total distributions		(0.99	)		(0.59	)		(0.21	)		(0.88	)		(0.55	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	B
Net asset value, end of period	$	15.27		$	15.39		$	17.11		$	13.92		$	14.52
Total returnC		6.97	%		(6.96	)%		24.60	%		2.29	%		2.76	%
Ratios and supplemental data:
Net assets, end of period	$	84,763,978		$	96,799,413		$	100,190,167		$	68,994,531		$	70,009,288
Ratios to average net assets:
Expenses, before reimbursements		0.98	%		0.93	%		0.97	%		0.96	%		0.94	%
Expenses, net of reimbursements		0.98	%		0.93	%		0.97	%		0.96	%		0.94	%
Net investment income, before expense reimbursements		1.36	%		1.11	%		0.98	%		1.59	%		1.02	%
Net investment income, net of reimbursements		1.36	%		1.11	%		0.98	%		1.59	%		1.02	%
Portfolio turnover rate		30	%		34	%		28	%		27	%		79	%

^A  WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015.

^B  Amount represents less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

72

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2019			2018			2017			2016			2015A
Net asset value, beginning of period	$	15.65		$	17.40		$	14.14		$	14.73		$	14.89
Income (loss) from investment operations:
Net investment income		0.18			0.16			0.14			0.21			0.13
Net gains (losses) on investments (both realized and unrealized)		0.69			(1.34	)		3.31			0.05			0.25
Total income (loss) from investment operations		0.87			(1.18	)		3.45			0.26			0.38
Less distributions:
Dividends from net investment income		(0.17	)		(0.13	)		(0.19	)		(0.14	)		(0.09	)
Distributions from net realized gains		(0.79	)		(0.44	)		-			(0.71	)		(0.45	)
Total distributions		(0.96	)		(0.57	)		(0.19	)		(0.85	)		(0.54	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	B
Net asset value, end of period	$	15.56		$	15.65		$	17.40		$	14.14		$	14.73
Total returnC		6.79	%		(7.13	)%		24.52	%		2.12	%		2.52	%
Ratios and supplemental data:
Net assets, end of period	$	229,639,964		$	379,123,913		$	274,552,551		$	243,421,035		$	304,799,582
Ratios to average net assets:
Expenses, before reimbursements		1.18	%		1.12	%		1.09	%		1.12	%		1.09	%
Expenses, net of reimbursements		1.18	%		1.12	%		1.09	%		1.12	%		1.09	%
Net investment income, before expense reimbursements		1.12	%		0.92	%		0.86	%		1.44	%		0.87	%
Net investment income, net of reimbursements		1.12	%		0.92	%		0.86	%		1.44	%		0.87	%
Portfolio turnover rate		30	%		34	%		28	%		27	%		79	%

^A  WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015.

^B  Amount represents less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

73

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor Class
	Year Ended October 31,
	2019			2018			2017			2016			2015A
Net asset value, beginning of period	$	15.17		$	16.83		$	13.69		$	14.27		$	14.46
Income (loss) from investment operations:
Net investment income		0.15			0.10			0.10			0.16			0.08
Net gains (losses) on investments (both realized and unrealized)		0.66			(1.29	)		3.18			0.05			0.25
Total income (loss) from investment operations		0.81			(1.19	)		3.28			0.21			0.33
Less distributions:
Dividends from net investment income		(0.13	)		(0.03	)		(0.14	)		(0.08	)		(0.07	)
Distributions from net realized gains		(0.79	)		(0.44	)		-			(0.71	)		(0.45	)
Total distributions		(0.92	)		(0.47	)		(0.14	)		(0.79	)		(0.52	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	B
Net asset value, end of period	$	15.06		$	15.17		$	16.83		$	13.69		$	14.27
Total returnC		6.50	%		(7.38	)%		24.10	%		1.82	%		2.25	%
Ratios and supplemental data:
Net assets, end of period	$	3,163,999		$	3,597,339		$	3,682,231		$	6,622,356		$	6,684,131
Ratios to average net assets:
Expenses, before reimbursements		1.45	%		1.39	%		1.40	%		1.40	%		1.37	%
Expenses, net of reimbursements		1.45	%		1.39	%		1.40	%		1.40	%		1.37	%
Net investment income, before expense reimbursements		0.90	%		0.64	%		0.55	%		1.16	%		0.58	%
Net investment income, net of reimbursements		0.90	%		0.64	%		0.55	%		1.16	%		0.58	%
Portfolio turnover rate		30	%		34	%		28	%		27	%		79	%

^A  WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015.

^B  Amount represents less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

74

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2019			2018			2017			2016			2015A
Net asset value, beginning of period	$	15.15		$	16.84		$	13.70		$	14.28		$	14.43
Income (loss) from investment operations:
Net investment income		0.49			0.18			0.13			0.18			0.11
Net gains (losses) on investments (both realized and unrealized)		0.32			(1.36	)		3.18			0.05			0.25
Total income (loss) from investment operations		0.81			(1.18	)		3.31			0.23			0.36
Less distributions:
Dividends from net investment income		(0.14	)		(0.07	)		(0.17	)		(0.10	)		(0.06	)
Distributions from net realized gains		(0.79	)		(0.44	)		-			(0.71	)		(0.45	)
Total distributions		(0.93	)		(0.51	)		(0.17	)		(0.81	)		(0.51	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	B
Net asset value, end of period	$	15.03		$	15.15		$	16.84		$	13.70		$	14.28
Total returnC		6.57	%		(7.32	)%		24.26	%		1.98	%		2.35	%
Ratios and supplemental data:
Net assets, end of period	$	3,748,595		$	12,080,510		$	18,170,218		$	19,486,655		$	16,422,504
Ratios to average net assets:
Expenses, before reimbursements		1.35	%		1.25	%		1.27	%		1.26	%		1.25	%
Expenses, net of reimbursements		1.35	%		1.25	%		1.27	%		1.26	%		1.25	%
Net investment income, before expense reimbursements		0.94	%		0.78	%		0.69	%		1.30	%		0.71	%
Net investment income, net of reimbursements		0.94	%		0.78	%		0.69	%		1.30	%		0.71	%
Portfolio turnover rate		30	%		34	%		28	%		27	%		79	%

^A  WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015.

^B  Amount represents less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

75

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2019			2018			2017			2016			2015A
Net asset value, beginning of period	$	14.60		$	16.27		$	13.26		$	13.87		$	14.08
Income (loss) from investment operations:
Net investment income (loss)		0.02			0.03			(0.03	)		0.07			0.01
Net gains (losses) on investments (both realized and unrealized)		0.69			(1.26	)		3.11			0.06			0.23
Total income (loss) from investment operations		0.71			(1.23	)		3.08			0.13			0.24
Less distributions:
Dividends from net investment income		(0.03	)		-			(0.07	)		(0.03	)		-
Distributions from net realized gains		(0.79	)		(0.44	)		-			(0.71	)		(0.45	)
Total distributions		(0.82	)		(0.44	)		(0.07	)		(0.74	)		(0.45	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	B
Net asset value, end of period	$	14.49		$	14.60		$	16.27		$	13.26		$	13.87
Total returnC		5.94	%		(7.85	)%		23.27	%		1.19	%		1.57	%
Ratios and supplemental data:
Net assets, end of period	$	4,349,946		$	5,840,412		$	6,520,983		$	6,030,130		$	6,238,827
Ratios to average net assets:
Expenses, before reimbursements		2.02	%		1.87	%		2.04	%		2.04	%		2.01	%
Expenses, net of reimbursements		2.02	%		1.87	%		2.04	%		2.04	%		2.01	%
Net investment income (loss), before expense reimbursements		0.32	%		0.17	%		(0.09	)%		0.53	%		(0.05	)%
Net investment income (loss), net of reimbursements		0.32	%		0.17	%		(0.09	)%		0.53	%		(0.05	)%
Portfolio turnover rate		30	%		34	%		28	%		27	%		79	%

^A  WEDGE Capital Management was added as an investment manager to the Mid-Cap Value Fund on May 11, 2015.

^B  Amount represents less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

76

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R6 Class
	Year Ended October 31, 2019			February 28, 2018A to October 31, 2018
Net asset value, beginning of period	$	15.52		$	16.94
Income (loss) from investment operations:
Net investment income		0.20			0.10
Net gains (losses) on investments (both realized and unrealized)		0.71			(1.52	)
Total income (loss) from investment operations		0.91			(1.42	)
Less distributions:
Dividends from net investment income		(0.22	)		-
Distributions from net realized gains		(0.79	)		-
Total distributions		(1.01	)		-
Net asset value, end of period	$	15.42		$	15.52
Total returnB		7.15	%		(8.38	)%C
Ratios and supplemental data:
Net assets, end of period	$	2,253,328		$	191,772
Ratios to average net assets:
Expenses, before reimbursements		0.90	%		3.09	%D
Expenses, net of reimbursements		0.83	%		0.88	%D
Net investment income (loss), before expense reimbursements		1.51	%		(0.88	)%D
Net investment income, net of reimbursements		1.58	%		1.32	%D
Portfolio turnover rate		30	%		34	%C

^A  Commencement of operations.

^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 U.S. GAAP 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.

See accompanying notes

77

American Beacon Funds^SM

Federal Tax Information

October 31, 2019 (Unaudited)

Certain tax information regarding the Funds is required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2019. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2019.

The Funds designated the following items with regard to distributions paid during the fiscal year ended October 31, 2019. 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:
Balanced		71.39	%
Mid-Cap Value		100.00	%
Qualified Dividend Income:
Balanced		97.00	%
Mid-Cap Value		100.00	%
Long-Term Capital Gain Distributions:
Balanced	$	20,913,631
Mid-Cap Value		37,246,762
Short-Term Capital Gain Distributions:
Balanced	$	991,251
Mid-Cap Value		-

Shareholders will receive notification in January 2020 of the applicable tax information necessary to prepare their 2019 income tax returns.

78

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Renewal and Approval of Management Agreement and Investment Advisory Agreements

At in-person meetings held on May 9, 2019 and June 4-5, 2019 (collectively, the “Meetings”), the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 5, 2019 meeting, approved the renewal of:

(1) the Management Agreement between American Beacon Advisors, Inc. (“Manager” or “AmBeacon”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon Balanced Fund (“Balanced Fund”) and the American Beacon Mid-Cap Value Fund (“Mid-Cap Fund”) (each, a “Fund” and collectively, the “Funds”);

(2) the Investment Advisory Agreements among the Manager, the Trust, on behalf of the Balanced Fund, and each of Barrow, Hanley, Mewhinney & Strauss, LLC (“Barrow”), Brandywine Global Investment Management, LLC (“Brandywine”) and Hotchkis and Wiley Capital Management, LLC (“Hotchkis”); and

(3) the Investment Advisory Agreements among the Manager, the Trust, on behalf of the Mid-Cap Fund, and each of Barrow, Pzena Investment Management, LLC (“Pzena”) and WEDGE Capital Management, LLP (“WEDGE”).

Barrow, Brandywine, Hotchkis, Pzena and WEDGE are hereinafter each referred to as a “subadvisor” and collectively as the “subadvisors.” The Management Agreement and the Investment Advisory Agreements are referred to herein individually as an “Agreement” and collectively as the “Agreements.” In preparation for its consideration of the renewal of the Agreements, the Board undertook steps to gather and consider information furnished by the Manager, the subadvisors, Broadridge, Inc. (“Broadridge”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and the subadvisors.

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge 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 in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Board received and evaluated such information as they deemed necessary. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to each Fund.

The Board noted that the Manager provides management and administrative services to the Funds pursuant to the Management Agreement. The Board considered that many mutual funds have separate contracts governing each type of service and observed that, with respect to such mutual funds, the actual management fee rates provided by Broadridge for peer group funds reflect the combined advisory and administrative expenses, reduced by any fee waivers and/or reimbursements.

A firm 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 the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations. For each Fund, 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 was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

Provided below is an overview of certain factors the Board considered in connection with its renewal and approval of the 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 investment advisory contracts, such as the Agreements.

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The memorandum explained the regulatory requirements surrounding the Board’s process for evaluating investment advisors and the terms of investment advisory contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Funds and their shareholders.

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

In determining whether to renew the Agreements, 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 the Funds; (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 the subadvisors or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisors from their relationships with the Funds.

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; the length of service of key investment personnel at the Manager; the cost structure of the Funds; the Manager’s culture of compliance and support that reduce risks to the Funds; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; and the Manager’s efforts to retain key employees and maintain staffing levels.

With respect to the renewal of the Investment Advisory Agreements, the Board considered the level of staffing and the size of the subadvisors. The Board also considered the adequacy of the resources committed to the Funds by the subadvisors, 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 the subadvisors. The Board also considered each subadvisor’s representations regarding its compliance program and code 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 the subadvisors were appropriate for each Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of each Fund relative to its Broadridge performance universe, Morningstar Category, and benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding Broadridge’s independent methodology for selecting each Fund’s Broadridge performance universe. The Board also considered that the performance universes selected by Broadridge may not provide appropriate comparisons for a Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by each subadvisor regarding the performance of its portion of the relevant Fund relative to the performance of a composite of similar accounts managed by the subadvisor and the relevant Fund’s benchmark index. In addition, the Board considered 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, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager earning a profit with respect to each Fund before and after the payment of distribution-related expenses by the

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Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Manager. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. 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, among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility and regulatory requirements associated with managing the Funds.

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. In addition, the Board considered that the Manager receives fees for making direct investment decisions for the portion of the Balanced Fund with respect to which the Manager has not delegated day-to-day management to a subadviser and for overseeing the securities lending program on behalf of each Fund. The Board also considered that the Manager receives fees for overseeing the securities lending program on behalf of each Fund. The Board also noted that certain share classes of the Funds maintain higher expense ratios in order to compensate third-party financial intermediaries.

In analyzing the fee rates charged by each subadvisor in connection with its investment advisory services to a Fund, the Board considered representations made by each subadvisor that the fee rate negotiated by the Manager is favorable relative to the fee rates that the subadvisor charges for any comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board considered that it was advised that the subadvisors may not account for their profits on an account-by-account basis and that different firms 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 each Fund grows and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that, with respect to each subadvisor, the Manager has negotiated breakpoints with respect to each Fund’s subadvisory fee rate. In addition, the Board noted the Manager’s representation that the Management Agreements contain fee schedule breakpoints at higher asset levels with respect to each Fund, except for the portion of the Balanced Fund with respect to which the Manager has not delegated day-to-day management to a subadvisor. 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 each Fund.

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 a subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors. The Board also considered that the Manager may invest the Funds’ cash balances and cash collateral provided by the borrowers of the Funds’ securities in the American Beacon U.S. Government Money Market Select Fund, which the Manager manages directly. In addition, the Board noted that each subadvisor benefits from soft dollar arrangements for proprietary and/or third-party research. 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.

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Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Additional Considerations and Conclusions with Respect to Each Fund

The performance comparisons below were made in comparison to each Fund’s Broadridge performance universe and Morningstar Category. With respect to the Broadridge performance universe, the 1^st Quintile represents the top 20 percent of the universe based on performance and the 5^th Quintile representing the bottom 20 percent of the universe based on performance. References below to each Fund’s Broadridge performance universe are to the universe of mutual funds with a comparable investment classification/objective included in the analysis provided by Broadridge. In reviewing the performance, the Trustees viewed longer-term performance over a full market cycle as the most important consideration, because relative performance over shorter periods may be significantly impacted by market or economic events and not necessarily reflective of manager skill.

The expense comparisons below were made in comparison to each Fund’s Broadridge expense universe and Broadridge expense group, with the 1^st Quintile representing the lowest 20 percent of the universe or group based on lowest total expense and the 5^th Quintile representing the highest 20 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 Broadridge. A Broadridge expense group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge expense universe includes all funds in the investment classification/objective with a similar operating structure as the share class of the Fund included in the Broadridge comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Board also considered each Fund’s Morningstar fee level category. In reviewing expenses, the Board considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the subadvisors’ use of soft dollars was requested from the Manager and was considered by the Board.

Additional Considerations and Conclusions with Respect to the American Beacon Balanced Fund

In considering the renewal of the Management Agreement for the Balanced Fund, the Board considered the following additional factors:

Broadridge Total Expenses Excluding 12b-1 Fees and Morningstar Fee Level Ranking

Compared to Broadridge Expense Group	1st Quintile
Compared to Broadridge Expense Universe	2nd Quintile
Morningstar Fee Level Ranking – Institutional Class	Low Expense Ratio

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2018)

Compared to Broadridge Performance Universe	3rd Quintile
Compared to Morningstar Category	3rd Quintile

The Board noted that AmBeacon receives an additional fee under the Management Agreement for making direct investment decisions with respect to an allocation of the Balanced Fund. In considering the renewal of the Management Agreement with AmBeacon and the Investment Advisory Agreements with Barrow, Brandywine, Hotchkis and AmBeacon, the Board considered that the diversification of investment strategies facilitated by the Balanced Fund’s multi-manager structure permits the Balanced Fund to mitigate the risks associated with a single subadvisor. The Board also considered the following additional factors:

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Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2018)

Barrow	5 Years	2	nd Quintile
Brandywine	5 Years	4	th Quintile
Hotchkis*	5 Years	3	rd Quintile
AmBeacon**	5 Years	2	nd Quintile
*  Hotchkis equity value-only return compared to the Broadridge large cap value performance universe
** AmBeacon bond-only return compared to Broadridge core bond performance universe

The Board also considered: (1) that the funds included in the Broadridge performance universe are managed pursuant to a variety of investment styles, and the Balanced Fund may underperform when a value investment style is out of favor; (2) the Manager invests the Balanced Fund’s fixed income portfolio exclusively in investment grade debt securities while the funds in the Broadridge performance universe may invest in high yield debt securities; (3) information provided by each subadvisor regarding fee rates charged for managing assets in the same or a similar strategy as the subadvisor manages its allocation of the Balanced Fund; (4) the Manager’s recommendation to continue to retain each subadvisor; and (5) the Manager’s representation that, while the Manager was recommending that the Board continue to retain Brandywine, the Manager continues to evaluate the performance of Brandywine’s portion of the Fund and whether to make any further recommendations with respect to that subadvisor.

Based on these and other considerations, the Board: (1) concluded that the fees paid to the Manager and the subadvisors under the Management and Investment Advisory Agreements are fair and reasonable; and (2) determined that the Balanced Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Balanced Fund.

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

In considering the renewal of the Management Agreement for the Mid-Cap Fund, the Board considered the following additional factors:

Broadridge Total Expense Analysis Excluding 12b-1 Fees and Morningstar Fee Level Ranking

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

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2018)

Compared to Broadridge Performance Universe	3rd Quintile
Compared to Morningstar Category	4th Quintile

In considering the renewal of the Investment Advisory Agreements with Barrow, Pzena and WEDGE, the Board considered that the diversification of investment strategies facilitated by the Mid-Cap Fund’s multi-manager structure permits the Mid-Cap Fund to mitigate the risks associated with a single subadvisor. The Board also considered the following additional factors:

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2018)

Barrow	5 Years	5th Quintile
Pzena	5 Years	2nd Quintile
WEDGE*	3 Years	3rd Quintile
* Does not yet have a 5-year performance record.

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Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

The Board also considered: (1) that the Mid-Cap Fund’s Broadridge expense group and expense universe are comprised principally of single-manager funds, which typically reach breakpoints in their subadvisory fee schedules sooner than multi-manager funds; (2) the Manager’s representation that Barrow’s disciplined value investment style (in companies with low price-to-earnings, low price-to-book, and modest dividend yield) was out of favor during early 2016 and the latter part of 2018 but has rebounded in 2019; (3) information provided by each subadvisor regarding fee rates charged for managing assets in the same or a similar strategy as the subadvisor manages its allocation of the Mid-Cap Fund; and (4) the Manager’s recommendation to continue to retain each subadvisor at the present time.

Based on these and other considerations, the Board: (1) concluded that the fees paid to the Manager and the subadvisors under the Management and Investment Advisory Agreements are fair and reasonable; and (2) determined that the Mid-Cap Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Mid-Cap Fund.

84

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. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty-six funds in the fund complex that includes the Trust, the American Beacon Select Funds, the American Beacon Institutional Funds Trust, the American Beacon Sound Point Enhanced Income Fund, American Beacon Apollo Total Return Fund and the American Beacon Sound Point Alternative Lending Fund. 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	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*
Alan D. Feld** (82)	Trustee since 1996	Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (49)	Trustee since 2015	Director, Kura MD, Inc. (local telehealth organization) (2015-present); Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Vice President & CFO, Sierra Health Foundation: Center for Health Program Management (California public benefit corporation) (2012-Present); Director, Innovative North State (2012-2015); Director, Sacramento Regional Technology Alliance (2011-2016); Director, Women’s Empowerment (2009-2014); Director, Valley Healthcare Staffing (2017-present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Joseph B. Armes (57)	Trustee since 2015	Chairman & CEO, CSW Industrials f/k/a Capital Southwest Corporation (investment company) (2015-Present); Chairman of the Board of Capital Southwest Corporation, predecessor to CSW Industrials, Inc. (2014-2017) (investment company); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-Present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Gerard J. Arpey (61)	Trustee since 2012	Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

85

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (58)	Trustee since 2004 Chair since 2019 Vice Chair 2018	Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Director, Tyler Technologies, Inc. (public sector software solutions company) (2014-Present); Director, Range Resources Corporation (oil and natural gas company) (2015-Present); Trustee, Cushing Closed-End and Open-End Funds and ETFs (2017-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Eugene J. Duffy (65)	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-Present); Principal and Executive Vice President, Paradigm Asset Management (1994-2014); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Claudia A. Holz (62)	Trustee since 2018	Partner, KPMG LLP (1990-2017); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Douglas A. Lindgren (57)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Managing Director, IPS Investment Management and Global Head, Content Management, UBS Wealth Management (2010-2016); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Richard A. Massman (76)	Trustee since 2004 Chair 2008-2018 Chair Emeritus since 2019	Consultant and General Counsel Emeritus, Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities) (2009-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Barbara J. McKenna, CFA (56)	Trustee since 2012	President/Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

86

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
R. Gerald Turner (73)	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 Select Funds (2001-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (64)	President since 2009	President (2009-2018), CEO and Director (2009-Present), and Chairman (2018-Present), American Beacon Advisors, Inc., President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present), Resolute Investment Holdings, LLC; President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present), Resolute Topco, Inc.; President (2015-2018); Director, and CEO (2015-Present), and Chairman (2018-Present), Resolute Acquisition, Inc.; President (2015-2018), Director and CEO (2015-Present), Chairman (2018-Present), Resolute Investment Managers, Inc.; Director, Chairman, President and CEO, Resolute Investment Distributors (2017-Present); Director, Chairman, President and CEO; Resolute Investment Services, Inc. (2017-Present); President and CEO, Lighthouse Holdings Parent, Inc. (2009-2015); President, CEO and Director, Lighthouse Holdings, Inc. (2009-2015); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-Present); Director, ARK Investment Management LLC (2016-Present); Director, Shapiro Capital Management LLC (2017-Present); Director, Chairman and CEO, Continuous Capital, LLC (2018-Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director and President, American Beacon Cayman Transformational Innovation Company, LTD., (2017-2018); President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); President American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-Present); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-Present); President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present); President, American Beacon Sound Point Alternative Lending Fund (2019-Present); Director, Green Harvest Asset Management (2019-Present).

87

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rosemary K. Behan (60)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Secretary and General Counsel, American Beacon Advisors, Inc. (2006-Present); Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015-Present); Vice President, Secretary and General Counsel, Resolute Investment Managers, Inc. (2015-Present); Secretary, Resolute Investment Distributors, Inc. (2017-Present); Vice President, Secretary and General Counsel, Resolute Investment Services, Inc. (2017-Present); Vice President and Secretary, Lighthouse Holdings Parent, Inc. (2008-2015); Vice President and Secretary, Lighthouse Holdings, Inc. (2008-2015); Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-Present); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Secretary, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-2018); Secretary, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Secretary, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Select Funds (2006-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Secretary, Green Harvest Asset Management (2019-Present).
Brian E. Brett (59)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), Vice President, Director of Sales (2004-2012), American Beacon Advisors, Inc.; Senior Vice President, Resolute Investment Managers, Inc. (2017-Present); Senior Vice President, Resolute Investment Distributors, Inc. (2018-Present), Senior Vice President, Resolute Investment Services, Inc. (2018-Present); Senior Vice President, Lighthouse Holdings Parent, Inc. (2008-2015); Senior Vice President, Lighthouse Holdings, Inc. (2008-2015); Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Paul B. Cavazos (50)	VP since 2016	Chief Investment Officer and Senior Vice President, American Beacon Advisors, Inc. (2016-Present); Chief Investment Officer, DTE Energy (2007-2016); Vice President, American Private Equity Management, L.L.C. (2017-Present); Vice President, American Beacon Select Funds (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

88

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Erica Duncan (49)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers (2018-Present); Vice President, Resolute Investment Services, Inc. (2018-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Melinda G. Heika (58)	Treasurer since 2010	Treasurer and CFO (2010-Present), American Beacon Advisors, Inc.; Treasurer, Resolute Topco, Inc. (2015-Present); Treasurer, Resolute Investment Holdings, LLC. (2015-Present); Treasurer, Resolute Acquisition, Inc. (2015-Present); Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017-2017); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, Lighthouse Holdings Parent Inc., (2010-2015); Treasurer, Lighthouse Holdings, Inc. (2010-2015); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-Present); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Treasurer, American Beacon Select Funds (2010-Present); Treasurer, American Beacon Institutional Funds Trust (2017-Present); Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present); Treasurer, Green Harvest Asset Management (2019-Present).
Terri L. McKinney (55)	VP since 2010	Vice President (2009-Present), Managing Director (2003-2009), American Beacon Advisors, Inc.; Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services, Inc (2018-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

89

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Jeffrey K. Ringdahl (44)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), Vice President (2010-2013), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice Present (2015-2018), Resolute Investment Holdings, LLC; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Topco, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Acquisition, Inc.; Director (2015-Present), President & COO (2018-Present), Senior Vice President (2015-2018), Resolute Investment Managers, Inc.; Director and Executive Vice President (2017-Present), Resolute Investment Distributors, Inc.; Director (2017-Present), President & COO (2018-Present), Executive Vice President (2017-2018), Resolute Investment Services, Inc.; Senior Vice President (2017-Present), Vice President (2012-2017), Manager (2015-Present), American Private Equity Management, LLC; Senior Vice President, Lighthouse Holdings Parent, Inc. (2013-2015); Senior Vice President, Lighthouse Holdings, Inc. (2013-2015); Trustee, American Beacon NextShares Trust (2015-Present); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-Present); Director, Shapiro Capital Management, LLC (2017-Present); Director, Executive Vice President & COO, Continuous Capital, LLC (2018-Present); Director and Vice President, American Beacon Cayman Transformational Innovation Company, Ltd., (2017-Present); Vice President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Vice President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Vice President, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Vice President, American Beacon Select Funds (2010-2018); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present), Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Samuel J. Silver (56)	VP Since 2011	Vice President (2011-Present), Chief Fixed Income Officer (2016-Present), American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Christina E. Sears (48)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Vice President, American Beacon Advisors, Inc. (2019-Present); Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Distributors (2017-Present); Vice President, Resolute Investment Services, Inc. (2019-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Chief Compliance Officer (2004-Present) and Assistant Secretary (1999-Present), American Beacon Select Funds; Chief Compliance Officer and Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).

90

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Sonia L. Bates (62)	Asst. Treasurer since 2011	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); Assistant Treasurer, Lighthouse Holdings Parent Inc. (2011-2015); Assistant Treasurer, Lighthouse Holdings, Inc. (2011-2015); Assistant Treasurer, American Private Equity Management, LLC (2012-Present); Assistant Treasurer, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-Present); Assistant Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Assistant Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Shelley D. Abrahams (44)	Assistant Secretary since 2008	Assistant Secretary, American Beacon Select Funds (2008-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).
Rebecca L. Harris (52)	Assistant Secretary since 2010	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services (2015-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Assistant Secretary, American Beacon Select Funds (2010-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Teresa A. Oxford (61)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2015-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees, other than Messrs. Feld and Massman to retire no later than the last day of the calendar year in which they reach the age of 75. As of 11/7/17, the Board approved a waiver of the mandatory retirement policy with respect to Mr. Massman, who turned 75 in November 2018, to permit him to continue to serve on the Board as Chair Emeritus through 12/31/19.

** Mr. Feld is deemed to be an “interested person” of the Trusts, 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 fiscal years to one or more of the Trust’s sub-advisors.

91

American Beacon Funds^SM

Privacy Policy

October 31, 2019 (Unaudited)

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.

92

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:	On the Internet:
american_beacon.funds@ambeacon.com	Visit our website at www.americanbeaconfunds.com
By Telephone: Call (800) 658-5811	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules	Availability of Proxy Voting Policy and Records
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the first and third fiscal quarters. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Company Boston, Massachusetts TRANSFER AGENT DST Asset Manager Solutions, Inc. Quincy, Massachusetts INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, Texas

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

American Beacon Funds, American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund are service marks of American Beacon Advisors, Inc.

AR 10/19

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.

GARCIA HAMILTON QUALITY BOND FUND RISKS

The use of fixed-income securities entails interest rate and credit risks. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

This may contain information obtained from third parties, including ratings from credit rating agencies such as Standard & Poor’s. Reproduction and distribution of third-party content in any form is prohibited except with the prior written permission of the related third party. Third-party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD-PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD-PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS.

Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes and should not be relied on as investment advice.

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

American Beacon Funds October 31, 2019

Contents

President’s Message	1
Market and Performance Overview	2
Expense Examples	5
Report of Independent Registered Public Accounting Firm	7
Schedule of Investments:
American Beacon Garcia Hamilton Quality Bond Fund	8
Financial Statements	10
Notes to Financial Statements	13
Financial Highlights:
American Beacon Garcia Hamilton Quality Bond Fund	29
Federal Tax Information	33
Disclosure Regarding Approval of the Management and Investment Advisory Agreements	34
Trustees and Officers of the American Beacon Funds	38
Privacy Policy	45

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   In recent months, you’ve likely seen and heard news reports about disruptive headwinds in the global economy – including the U.S. trade war with China and its toll on the global economy, slowing global growth, the Federal Reserve’s series of rate cuts, Brexit, disruptions in the Middle East and protests in Hong Kong – and watched a flood of reaction in the world’s markets.   As Peter L. Bernstein said in his treatise on risk, Against the Gods: The Remarkable Story of Risk, published by John Wiley & Sons, Inc. in September 1998, “Volatility is a proxy for uncertainty and must be accommodated in measuring investment risk.”   During times of economic uncertainty and market volatility, fear of loss can be a powerful emotion – one that drives many investors to making short-term decisions subject to a variety of potential error-leading biases. Unfortunately, some short-term investment decisions may create more volatility rather than mitigate it.

Instead of dwelling on the markets’ short-term reaction to waves of negative global news, we encourage investors to focus on the horizon instead. Long-term investing isn’t about identifying and anticipating the next big market move, it is about identifying the right investment products for riding out those moves. As a long-term investor, you should keep in mind the three Ds: direction, discipline and diversification.

u Direction: Achieving your long-term financial goals requires an individualized plan of action. You may want your plan to provide some measure of protection against periods of geopolitical turmoil, economic uncertainty, market volatility and job insecurity. Your plan should be reviewed annually and be adjusted in the event your long-range needs change.

u Discipline: Long-term, systematic participation in an investment portfolio requires your resolution to stay the course. Spending time in the market – rather than trying to time the market – may place you in a better position to reach your long-term financial goals.

u Diversification: By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your investment portfolio. By allocating your investment portfolio according to your risk-tolerance level, you may be better positioned to weather storms and achieve your long-term financial goals.

Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term financial goals. As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings.

Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for long-term rewards.

Our management approach is more than a concept; it’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment solutions to help our shareholders seek long-term rewards while mitigating volatility and risk.

Thank you for your continued interest in American Beacon. For additional information about our investment products 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 Bond Market Overview

October 31, 2019 (Unaudited)

During the 12 months ended October 31, 2019, the Federal Reserve (the “Fed”) hiked the federal funds rate in December 2018, paused for the first half of 2019, and then cut the rate three times in as many meetings. The most recent meeting, held at the end of October, saw the Fed vote to cut its target rate to a range of 1.50% to 1.75%. However, the Fed also indicated its “midcycle adjustment” was complete. The official statement changed with regard to future actions by removing the phrase “will act as appropriate to sustain the expansion,” which was added in advance of the recent rate cuts, addressing economic “uncertainties” and “muted inflation pressures.” Fed Chairman Jerome Powell was more explicit about the completion of the midcycle adjustment at his October press conference when he said further easing would only be needed if developments forced a “material reassessment” of the outlook. He was likely encouraged by recent developments on global trade since U.S. officials indicated they were “close to finalizing” sections of the Phase One agreement with China and the European Union granted the U.K. a Brexit extension. Additionally, the first release of third quarter GDP was reported at 1.9%, which surprised to the upside on solid consumer spending.

Multiple rate cuts from the Fed and uncertainties around global trade caused interest rates to decline and the yield curve to steepen during the period. The 10-year Treasury yield fell 145 basis points (or 1.45%) to 1.69%. The two-year Treasury yield declined 132 basis points (or 1.32%) to 1.52%, and the 30-year Treasury yield declined 121 basis points (or 1.21%) to 2.17%. These moves caused the two- to 30-year Treasury yield spread to increase by 11 basis points (or 0.11%) to 65 basis points (or 0.65%).

With the decline in rates during the year, the bond market posted a positive return of 11.51%, according to the Bloomberg Barclays U.S. Aggregate Bond Index. Spread product was mostly in favor over the period as three of the four spread sectors posted positive excess returns. The leader was the corporate sector with an excess return of 232 basis points (or 2.32%). The agency and asset-backed sectors followed with excess returns of 107 basis points (or 1.07%) and 59 basis points (or 0.59%), respectively. The laggard was the mortgage-backed sector with a negative excess return of -11 basis points (or -0.11%). Overall, the Bloomberg Barclays U.S. Aggregate Bond Index had an excess return of 63 basis points (or 0.63%) for the period.

2

American Beacon Garcia Hamilton Quality Bond Fund^SM Performance Overview

October 31, 2019 (Unaudited)

The Investor Class of the American Beacon Garcia Hamilton Quality Bond Fund (the “Fund”) returned 4.80% for the twelve months ended October 31, 2019. The Bloomberg Barclays U.S. Aggregate Bond Index (the “Index”) returned 11.51% for the same period.

Comparison of Change in Value of a $10,000 Investment for the period from 4/4/16 through 10/31/19

Total Returns for the Period ended October 31, 2019
	Ticker	1 Year			3 Year			Since Inception 04/04/2016			Value of $10,000 04/04/2016- 10/31/2019
Institutional Class (1,4)	GHQIX		5.20	%		2.26	%		1.99	%		$	10,731
Y Class (1,4)	GHQYX		5.09	%		2.16	%		1.89	%		$	10,693
Investor Class (1,4)	GHQPX		4.80	%		1.84	%		1.61	%		$	10,587
R6 Class (1,3,4)	GHQRX		5.13	%		2.24	%		1.97	%		$	10,724
Bloomberg Barclays U.S. Aggregate Bond Index (2)			11.51	%		3.29	%		3.28	%		$	11,224

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 the date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to each Class of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than the actual returns shown since inception.

2. The Bloomberg Barclays U.S. Aggregate Bond Index is a market value weighted performance benchmark for government, corporate, mortgage-backed and asset-backed fixed-rate debt securities of all maturities. One cannot directly invest in an index.

3. Fund performance for the periods represent the returns achieved by the Institutional Class from 4/4/16 through 2/28/19, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/4/16.

3

American Beacon Garcia Hamilton Quality Bond Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

4. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor and R6 Class shares were 0.69%, 0.75%, 0.92% and 0.66%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

Duration management was the primary detractor from the Fund’s performance during the year relative to the Index. The Fund maintained a shorter duration than the Index as the manager believed the economy would continue to perform well. However, market reaction to the temporary government shutdown, ongoing concerns regarding Brexit, global trade discussions, and the Fed’s mid-cycle adjustment were drags on performance. The Fund remains positioned for a market environment in which money supply is expanding rapidly, consumer confidence is high, and the labor market is very healthy. Historically, rates have the bias to move higher as the economy continues to grow and exceed market expectations.

In addition to active duration management, the Fund maintained a barbell yield-curve position. The Fund was overweight the shortest and longest durations along the curve and was underweight in the middle. The sub-advisor believes the “belly” of the curve, which is the middle of the curve, is most overvalued and is maintaining the largest underweight there.

Sector positioning contributed to performance as the Fund was overweight the corporate sector and underweight the Treasury sector and the mortgage-backed securities sector. An underweight to the Treasury sector was a positive contributor as credit spreads tightened and the Fund’s underweight to mortgage-backed securities benefited performance as the sector underperformed.

Overall, the Fund continues to emphasize high-quality, active fixed-income investing that seeks to perform well in volatile markets and serves an important role in asset allocation.

Top Ten Holdings (% Net Assets)
U.S. Treasury Notes/Bonds, 2.500%, Due 5/15/2046		8.4
Federal Home Loan Banks, 2.032%, Due 9/13/2021, (3-mo. USD LIBOR - 0.095%)		7.3
Federal National Mortgage Association, 4.500%, Due 6/1/2039		7.0
Federal Home Loan Banks, 2.010%, Due 12/18/2020, (3-mo. USD LIBOR - 0.135%)		5.4
Citigroup, Inc., 3.224%, Due 5/17/2024, (3-mo. USD LIBOR + 1.100%)		4.6
United Parcel Service, Inc., 2.549%, Due 4/1/2023, (3-mo. USD LIBOR + 0.450%)		4.2
U.S. Treasury Notes/Bonds, 1.752%, Due 1/31/2021, (3-mo. Treasury money market yield + 0.115%)		4.2
Morgan Stanley, 3.336%, Due 10/24/2023, (3-mo. USD LIBOR + 1.400%)		3.9
IBM Credit LLC, 2.226%, Due 1/20/2021, (3-mo. USD LIBOR + 0.260%)		3.3
Intel Corp., 2.531%, Due 5/11/2022, (3-mo. USD LIBOR + 0.350%)		3.2
Total Fund Holdings	39
Sector Allocation (% Investments)
Financial		28.1
U.S. Government Agency Obligations		16.2
Technology		13.3
U.S. Treasury Obligations		12.7
Industrial		8.4
U.S. Agency Mortgage-Backed Obligations		8.0
Communications		7.0
Consumer, Non-Cyclical		4.3
Utilities		1.1
Energy		0.9

4

American Beacon Garcia Hamilton Quality Bond Fund^SM

Expense Examples

October 31, 2019 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2019 through October 31, 2019.

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 = $8.60), then multiply the result by “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.

5

American Beacon Garcia Hamilton Quality Bond Fund^SM

Expense Examples

October 31, 2019 (Unaudited)

American Beacon Garcia Hamilton Quality Bond Fund
	Beginning Account Value 5/1/2019		Ending Account Value 10/31/2019		Expenses Paid During Period 5/1/2019-10/31/2019*
Institutional Class
Actual		$1,000.00		$1,026.30		$2.30
Hypothetical**		$1,000.00		$1,022.94		$2.29
Y Class
Actual		$1,000.00		$1,025.80		$2.81
Hypothetical**		$1,000.00		$1,022.43		$2.80
Investor Class
Actual		$1,000.00		$1,024.40		$4.24
Hypothetical**		$1,000.00		$1,021.02		$4.23
R6 Class
Actual		$1,000.00		$1,025.60		$2.09
Hypothetical**		$1,000.00		$1,023.14		$2.09

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.45%, 0.55%, 0.83%, and 0.41% for the Institutional, Y, Investor, and R6 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.

6

American Beacon Garcia Hamilton Quality Bond Fund^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon Garcia Hamilton Quality Bond Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of American Beacon Garcia Hamilton Quality Bond Fund (the “Fund”) (one of the funds constituting American Beacon Funds (the “Trust”)), including the schedule of investments, as of October 31, 2019, 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, the financial highlights for each of the three years in the period ended October 31, 2019 and the period from April 4, 2016 (commencement of operations) to October 31, 2016 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund at October 31, 2019, 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 its financial highlights for each of the three years in the period ended October 31, 2019 and the period from April 4, 2016 (commencement of operations) to October 31, 2016, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2019, by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more American Beacon investment companies since 1987.

Dallas, Texas

December 30, 2019

7

American Beacon Garcia Hamilton Quality Bond Fund^SM

Schedule of Investments

October 31, 2019

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 62.30%
Communications - 6.89%
Comcast Corp.,
2.429%, Due 10/1/2020, (3-mo. USD LIBOR + 0.330%)A		$	5,730,000		$	5,744,382
2.631%, Due 4/15/2024, (3-mo. USD LIBOR + 0.630%)A			13,341,000			13,457,430
TWDC Enterprises 18 Corp., 2.523%, Due 3/4/2022, (3-mo. USD LIBOR + 0.390%)A			13,772,000			13,839,564
						33,041,376
Consumer, Non-Cyclical - 4.28%
PepsiCo, Inc.,
2.573%, Due 10/6/2021, (3-mo. USD LIBOR + 0.530%)A			6,460,000			6,504,730
2.631%, Due 5/2/2022, (3-mo. USD LIBOR + 0.365%)A			10,285,000			10,328,372
UnitedHealth Group, Inc., 2.071%, Due 10/15/2020, (3-mo. USD LIBOR + 0.070%)A			3,720,000			3,715,088
						20,548,190
Energy - 0.87%
Chevron Corp., 2.688%, Due 11/15/2021, (3-mo. USD LIBOR + 0.530%)A			4,140,000			4,173,198
Financial - 27.78%
American Express Co., 2.519%, Due 8/1/2022, (3-mo. USD LIBOR + 0.610%)A			6,600,000			6,630,787
American Express Credit Corp., 2.838%, Due 3/3/2022, (3-mo. USD LIBOR + 0.700%)A			7,068,000			7,113,571
Bank of America Corp.,
3.126%, Due 1/20/2023, (3-mo. USD LIBOR + 1.160%)A			9,166,000			9,293,223
2.917%, Due 3/5/2024, (3-mo. USD LIBOR + 0.790%)A			7,830,000			7,880,443
Citigroup, Inc., 3.224%, Due 5/17/2024, (3-mo. USD LIBOR + 1.100%)A			21,774,000			22,042,808
Fifth Third Bank, 2.549%, Due 2/1/2022, (3-mo. USD LIBOR + 0.640%)A			5,580,000			5,610,417
Goldman Sachs Group, Inc.,
3.717%, Due 11/29/2023, (3-mo. USD LIBOR + 1.600%)A			6,638,000			6,855,091
3.448%, Due 11/23/2024, (3-mo. USD LIBOR + 1.300%)A			8,145,000			8,180,617
JPMorgan Chase & Co.,
2.840%, Due 4/25/2023, (3-mo. USD LIBOR + 0.900%)A			12,824,000			12,909,590
3.166%, Due 10/24/2023, (3-mo. USD LIBOR + 1.230%)A			8,400,000			8,546,709
Manufacturers & Traders Trust Co., 2.734%, Due 5/18/2022, (3-mo. USD LIBOR + 0.610%)A			5,490,000			5,507,810
Morgan Stanley, 3.336%, Due 10/24/2023, (3-mo. USD LIBOR + 1.400%)A			18,225,000			18,592,849
Wells Fargo & Co., 3.046%, Due 1/24/2023, (3-mo. USD LIBOR + 1.110%)A			13,890,000			14,064,247
						133,228,162
Industrial - 8.26%
John Deere Capital Corp.,
2.582%, Due 9/8/2022, (3-mo. USD LIBOR + 0.480%)A			9,370,000			9,392,404
2.652%, Due 6/7/2023, (3-mo. USD LIBOR + 0.550%)A			10,095,000			10,115,634
United Parcel Service, Inc., 2.549%, Due 4/1/2023, (3-mo. USD LIBOR + 0.450%)A			20,017,000			20,124,400
						39,632,438
Technology - 13.14%
Apple, Inc., 2.685%, Due 2/9/2022, (3-mo. USD LIBOR + 0.500%)A			14,585,000			14,695,547
IBM Credit LLC, 2.226%, Due 1/20/2021, (3-mo. USD LIBOR + 0.260%)A			16,015,000			16,054,958
Intel Corp., 2.531%, Due 5/11/2022, (3-mo. USD LIBOR + 0.350%)A			15,104,000			15,162,427
International Business Machines Corp., 2.576%, Due 5/13/2021, (3-mo. USD LIBOR + 0.400%)A			4,890,000			4,912,460
QUALCOMM, Inc., 2.666%, Due 1/30/2023, (3-mo. USD LIBOR + 0.730%)A			12,070,000			12,169,662
						62,995,054
Utilities - 1.08%
Consolidated Edison Co. of New York, Inc., 2.506%, Due 6/25/2021, Series C, (3-mo. USD LIBOR + 0.400%)A			5,180,000			5,199,441
Total Corporate Obligations (Cost $297,553,136)						298,817,859

See accompanying notes

8

American Beacon Garcia Hamilton Quality Bond Fund^SM

Schedule of Investments

October 31, 2019

	Principal Amount			Fair Value
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 7.89%
Federal Home Loan Mortgage Corp., 4.500%, Due 12/1/2034		$	2,293,372		$	2,487,334
Federal National Mortgage Association,
5.500%, Due 1/1/2024			1,208,330			1,261,390
5.000%, Due 7/1/2026			493,483			508,273
4.500%, Due 6/1/2039			31,692,781			33,574,552
Total U.S. Agency Mortgage-Backed Obligations (Cost $37,870,378)						37,831,549
U.S. GOVERNMENT AGENCY OBLIGATIONS - 16.01%
Federal Farm Credit Banks Funding Corp., 1.904%, Due 3/17/2021, (1-mo. USD LIBOR + 0.015%)A			7,115,000			7,106,779
Federal Home Loan Banks,
2.010%, Due 12/18/2020, (3-mo. USD LIBOR - 0.135%)A			25,750,000			25,726,880
1.921%, Due 1/4/2021, (3-mo. USD LIBOR - 0.135%)A			9,165,000			9,155,148
2.032%, Due 9/13/2021, (3-mo. USD LIBOR - 0.095%)A			34,815,000			34,786,632
Total U.S. Government Agency Obligations (Cost $76,842,823)						76,775,439
U.S. TREASURY OBLIGATIONS - 12.53%
U.S. Treasury Notes/Bonds,
1.752%, Due 1/31/2021, (3-mo. Treasury money market yield + 0.115%)A			20,000,000			19,978,071
2.500%, Due 5/15/2046			37,690,000			40,131,017
Total U.S. Treasury Obligations (Cost $55,076,356)						60,109,088
	Shares
SHORT-TERM INVESTMENTS - 0.76% (Cost $3,627,253)
Investment Companies - 0.76%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%B C			3,627,253			3,627,253
TOTAL INVESTMENTS - 99.49% (Cost $470,969,946)						477,161,188
OTHER ASSETS, NET OF LIABILITIES - 0.51%						2,461,739
TOTAL NET ASSETS - 100.00%					$	479,622,927
Percentages are stated as a percent of net assets.

^A Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on October 31, 2019.

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

^C 7-day yield.

LIBOR - London Interbank Offered Rate.

LLC - Limited Liability Company.

PRIME – A rate, charged by banks, based on the U.S. Federal Funds rate.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2019, the investments were classified as described below:

Garcia Hamilton Quality Bond Fund	Level 1		Level 2		Level 3		Total
Assets
Corporate Obligations	$	-	$	298,817,859	$	-	$	298,817,859
U.S. Agency Mortgage-Backed Obligations		-		37,831,549		-		37,831,549
U.S. Government Agency Obligations		-		76,775,439		-		76,775,439
U.S. Treasury Obligations		-		60,109,088		-		60,109,088
Short-Term Investments		3,627,253		-		-		3,627,253
Total Investments in Securities - Assets	$	3,627,253	$	473,533,935	$	-	$	477,161,188

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2019, there were no transfers into or out of Level 3.

See accompanying notes

9

American Beacon Garcia Hamilton Quality Bond Fund^SM

Statement of Assets and Liabilities

October 31, 2019

Assets:
Investments in unaffiliated securities, at fair value†	$	473,533,935
Investments in affiliated securities, at fair value‡		3,627,253
Interest receivable		1,780,914
Receivable for investments sold		1,917,695
Receivable for fund shares sold		216,068
Receivable for expense reimbursement (Note 2)		115,945
Prepaid expenses		27,316
Total assets		481,219,126
Liabilities:
Payable for fund shares redeemed		1,152,745
Dividends payable		130,681
Management and sub-advisory fees payable (Note 2)		227,060
Service fees payable (Note 2)		3,137
Transfer agent fees payable (Note 2)		14,574
Custody and fund accounting fees payable		11,020
Professional fees payable		44,973
Trustee fees payable (Note 2)		2,313
Payable for prospectus and shareholder reports		5,924
Other liabilities		3,772
Total liabilities		1,596,199
Net assets	$	479,622,927
Analysis of net assets:
Paid-in-capital	$	476,585,099
Total distributable earnings (deficits)A		3,037,828
Net assets	$	479,622,927
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		31,509,871
Y Class		1,784,629
Investor Class		1,483,357
R6 ClassB		12,966,751
Net assets:
Institutional Class	$	316,582,604
Y Class	$	17,927,537
Investor Class	$	14,904,591
R6 ClassB	$	130,208,195
Net asset value, offering and redemption price per share:
Institutional Class	$	10.05
Y Class	$	10.05
Investor Class	$	10.05
R6 ClassB	$	10.04
† Cost of investments in unaffiliated securities	$	467,342,693
‡ Cost of investments in affiliated securities	$	3,627,253
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.
B Class commenced operations February 28, 2019 (Note 1).

See accompanying notes

10

American Beacon Garcia Hamilton Quality Bond Fund^SM

Statement of Operations

For the year ended October 31, 2019

Investment income:
Dividend income from affiliated securities (Note 7)	$	262,616
Interest income		9,641,814
Total investment income		9,904,430
Expenses:
Management and sub-advisory fees (Note 2)		1,927,599
Transfer agent fees:
Institutional Class (Note 2)		108,011
Y Class (Note 2)		19,161
Investor Class		1,732
R6 ClassA		2,082
Custody and fund accounting fees		62,247
Professional fees		52,133
Registration fees and expenses		62,461
Service fees (Note 2):
Investor Class		54,616
Prospectus and shareholder report expenses		28,358
Trustee fees (Note 2)		24,775
Other expenses		40,426
Total expenses		2,383,601
Net fees waived and expenses (reimbursed) (Note 2)		(745,393	)
Net expenses		1,638,208
Net investment income		8,266,222
Realized and unrealized gain from investments:
Net realized gain from:
Investments in unaffiliated securitiesB		429,672
Change in net unrealized appreciation of:
Investments in unaffiliated securitiesC		7,820,345
Net gain from investments		8,250,017
Net increase in net assets resulting from operations	$	16,516,239
A Class commenced operations February 28, 2019.
B The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
C The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.

See accompanying notes

11

American Beacon Garcia Hamilton Quality Bond Fund^SM

Statement of Changes in Net Assets

	Garcia Hamilton Quality Bond Fund
	Year Ended October 31, 2019			Year Ended October 31, 2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	8,266,222		$	3,376,947
Net realized gain (loss) from investments in unaffiliated securities		429,672			(780,123	)
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities		7,820,345			(1,810,001	)
Net increase in net assets resulting from operations		16,516,239			786,823
Distributions to shareholders:
Total retained earnings:
Institutional Class		(7,259,770	)		(3,305,504	)
Y Class		(437,870	)		(59,124	)
Investor Class		(280,134	)		(165,821	)
R6 ClassA		(480,168	)		–
Net distributions to shareholders		(8,457,942	)		(3,530,449	)
Capital share transactions (Note 9):
Proceeds from sales of shares		295,256,390			128,042,724
Reinvestment of dividends and distributions		6,819,084			3,065,757
Cost of shares redeemed		(80,111,918	)		(24,196,699	)
Net increase in net assets from capital share transactions		221,963,556			106,911,782
Net increase in net assets		230,021,853			104,168,156
Net assets:
Beginning of period		249,601,074			145,432,918
End of period	$	479,622,927		$	249,601,074
A Class commenced operations February 28, 2019.

See accompanying notes

12

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of October 31, 2019, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon Garcia Hamilton Quality Bond Fund (the “Fund”). The remaining thirty-one active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a Delaware corporation and a wholly-owned subsidiary of Resolute Investment Managers, Inc. (“RIM”) organized in 1986 to provide business management, advisory, administrative, and asset management consulting services to the Trust and other investors. The Manager is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). RIM is, in turn, a wholly-owned subsidiary of Resolute Acquisition, Inc., which is a wholly-owned subsidiary of Resolute Topco, Inc., a wholly-owned subsidiary of Resolute Investment Holdings, LLC (“RIH”). RIH is owned primarily by Kelso Investment Associates VIII, L.P., KEP VI, LLC and Estancia Capital Partners L.P., investment funds affiliated with Kelso & Company, L.P. (“Kelso”) or Estancia Capital Management, LLC (“Estancia”), which are private equity firms.

Recent Accounting Pronouncements

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-08, Premium Amortization of Purchased Callable Debt Securities. The amendments in the ASU shorten the premium amortization period on a purchased callable debt security from the security’s contractual life to the earliest call date. It is anticipated that this change will enhance disclosures by reducing losses recognized when a security is called on an earlier date. This ASU is effective for fiscal years beginning after December 15, 2018. The Manager continues to evaluate the impact this ASU will have on the financial statements and other disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”). The amendments in the ASU impact disclosure requirements for fair value measurement. It is anticipated that this change will enhance the effectiveness of disclosures in the notes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and can include the entire standard or certain provisions that exclude or amend disclosures. For the year ended October 31, 2019, the Fund has chosen to adopt the standard. The adoption of this ASU guidance did not have a material impact on the financial statements and other disclosures.

Class Disclosure

On February 28, 2019, the Fund created the R6 Class, a new class made available for sale to retirement plans pursuant to an amendment to the Fund’s registrations statement filed with the U.S. Securities and Exchange Commission (“SEC”). Refer to the Fund’s prospectus for more details.

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	Eligible Investors	Minimum Initial Investments
Institutional	Large institutional investors - sold directly through intermediary channels.	$	250,000
Y Class	Large institutional retirement plan investors - sold directly or through intermediary channels.	$	100,000
Investor	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500
R6 Class	Large institutional retirement plan investors - sold through retirement plan sponsors.		None

13

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

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 based on 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 service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.

Significant Accounting Policies

The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the FASB Accounting Standards Codification Topic 946, Financial Services – Investment Companies, a part of Generally Accepted Accounting Principles (“U.S. GAAP”).

Security Transactions and Investment Income

Security transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.

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, net of foreign taxes, is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. Realized gains (losses) from securities sold are determined based on specific lot identification.

Distributions to Shareholders

The Fund distributes most or all of its net earning and realized gains, if any, each taxable year in the form of dividends from net investment income on a monthly basis and distributions of realized net capital gains and net gains or losses from foreign currency transactions on an annual basis. The Fund does not have a fixed dividend rate and does not guarantee that they will pay any distributions in any particular year. Dividends to shareholders are determined in accordance with federal income tax regulation, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund may designate earning and profits distributed to shareholders on the redemption of shares.

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Fund is allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Fund. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Fund on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Fund or nature of the services performed and relative applicability to the Fund.

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.

14

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

Other

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.

2.  Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide the Fund with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of the Fund’s average daily net assets that is calculated and accrued daily according to the following schedule:

First $5 billion	0.35	%
Next $5 billion	0.325	%
Next $10 billion	0.30	%
Over $20 billion	0.275	%

The Trust, on behalf of the Fund, and the Manager have entered into an Investment Advisory Agreement with Garcia Hamilton & Associates, L.P. (the “Sub-Advisor”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets according to the following schedule:

First $1 billion	0.20	%
Over $1 billion	0.15	%

The Management and Sub-Advisory Fees paid by the Fund for the year ended October 31, 2019 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	1,226,446
Sub-Advisor Fees		0.20	%		701,153
Total		0.55	%	$	1,927,599

Distribution Plans

The Fund has 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 Fund for distribution purposes. However, the Plan authorizes the management fee received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

Service Plans

The Manager and the Trust entered into a Service Plan that obligates the Manager to oversee additional shareholder servicing of the Investor Class of the Fund. As compensation for performing the duties required under the Service Plan, the Manager receives an annualized fee up to 0.375% of the average daily net assets of the Investor Class of the Fund.

15

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

Sub-Transfer Agent Fees

The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to Board approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the year ended October 31, 2019, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Garcia Hamilton Quality Bond	$	117,285

As of October 31, 2019, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent  Fees
Garcia Hamilton Quality Bond	$	11,106

Investments in Affiliated Funds

The Fund may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). The Fund and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended October 31, 2019, the Manager earned fees on the Fund’s direct investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund
Garcia Hamilton Quality Bond	$	12,107

Interfund Credit Facility

Pursuant to an exemptive order issued by the SEC, the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the fund because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2019, the Fund did not utilize the credit facility.

16

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Fund to the extent that total operating expenses exceed the Fund’s expense cap. During the year ended October 31, 2019, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap										Expiration of Reimbursed Expenses
Fund	Class	11/1/2018 - 8/25/2019			8/26/2019 - 10/31/2019			Reimbursed Expenses		(Recouped) Expenses
Garcia Hamilton Quality Bond	Institutional		0.45	%		0.45	%	$	630,224	$	-		2021-2022
Garcia Hamilton Quality Bond	Y		0.55	%		0.55	%		32,884		-		2021-2022
Garcia Hamilton Quality Bond	Investor		0.83	%		0.83	%		28,699		-		2021-2022
Garcia Hamilton Quality Bond	R6(1)		0.42	%		0.41	%		53,586		-		2021-2022
(1) Effective February 28, 2019.

Of these amounts, $115,945 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at October 31, 2019.

The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years after the date of the Manager’s waiver/reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. The reimbursed expenses listed above will expire in 2021 and 2022. The Fund did not record a liability for potential reimbursement due to the current assessment that a reimbursement is uncertain. The carryover of excess expenses potentially reimbursable to the Manager, but not recorded as a liability are as follows:

Fund	Recouped Expenses		Excess Expense Carryover		Expired Expense Carryover		Expiration of Reimbursed Expenses
Garcia Hamilton Quality Bond	$	-	$	334,782	$	-		2019-2020
Garcia Hamilton Quality Bond		-		410,947		-		2020-2021

Trustee Fees and Expenses

As compensation for their service to the Trusts, each Trustee receives an annual retainer of $120,000, plus $10,000 for each Board meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board Chair receives an additional annual retainer of $50,000 as well as a $2,500 fee each quarter for attendance at the committee meetings. The Chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each fund of the Trusts according to its respective net assets.

17

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

3.  Security Valuation and Fair Value Measurements

The price of the Fund’s shares is based on the Fund’s Net Asset Value (“NAV”). The NAV of the Fund, or each of its share classes, as applicable, is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to the Fund or class, by the total number of shares outstanding of the Fund or class.

Investments are valued at the close of the New York Stock Exchange (the “Exchange”), normally at 4:00 p.m. Eastern Time, each day that the Exchange is open for business.

Debt securities normally are valued on the basis of prices provided by an independent pricing service and may take into account appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. Prices of debt securities may be determined using quotes obtained from brokers.

Investments in open-end mutual funds are valued at the closing NAV per share of the mutual fund on the day of valuation.

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 Board.

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

Valuation Inputs

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

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

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.

Mortgage-related and asset-backed securities (“ABS”) are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by pricing service providers that use broker-dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, current market data, estimated cash flows, and market-based yield spreads for each tranche, and incorporates deal collateral performance, as available. Mortgage-related and ABS that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

18

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

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.

4.  Securities and Other Investments

Agency Mortgage-Backed Securities

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

Fixed-Income Investments

The Fund may hold debt, including government and corporate debt, and other fixed-income securities. Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause the Fund’s NAV to likewise decrease, and vice versa. How specific fixed-income securities may react to changes in interest rates will depend on the specific characteristics of each security. For example, while securities with longer maturities tend to produce higher yields, they also tend to be more sensitive to changes in prevailing interest rates and are, therefore, more volatile than shorter-term securities and are subject to greater market fluctuations as a result of changes in interest rates. Fixed-income securities are also subject to credit risk, which is the risk that the credit strength of an issuer of a fixed-income security will weaken and/or that the issuer will be unable to make timely principal and interest payments and that the security may go into default. In addition, there is prepayment risk, which is the risk that during periods of falling interest rates, certain fixed-income securities with higher interest rates, such as MBS and ABS, may be prepaid by their issuers thereby reducing the amount of interest payments. This may result in a Fund having to reinvest its proceeds in lower yielding securities. Securities underlying MBS and ABS, which may include subprime mortgages, also may be subject to a higher degree of credit risk, valuation risk, and liquidity risk.

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.

19

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

Mortgage-Related and Other Asset-Backed Securities

The Fund may invest in mortgage or other 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 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.

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, unit investment trusts, and other investment companies of the Trust. The Fund may invest in securities of an investment company 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, the Fund becomes a shareholder of that investment company. As a result, the Fund’s shareholders indirectly will bear the Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s 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.

U.S. Government Agency Securities

U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government currently provides financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law. U.S. Government securities include U.S. Treasury bills, notes and bonds, Federal Home Loan Bank (“FHLB”) obligations, Federal Farm Credit Bank (“FFCB”) obligations, U.S. Government agency obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.

U.S. Treasury Obligations

U.S. Treasury obligations include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations (known as “STRIPS”) and inflation-indexed securities. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates. U.S. Treasury obligations are subject to credit risk and interest rate risk.

20

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

5.  Principal Risks

Investing in the Fund may involve certain risks including, but not limited to, those described below.

Credit Risk

The Fund is subject to the risk that the issuer or guarantor of a debt security, or the counterparty to a derivatives contract or a loan, will fail to make timely payment of interest or principal or otherwise honor its obligations or default completely. A decline in the credit rating of an individual security held by the Fund may have an adverse impact on its price and make it difficult for the Fund to sell it. Ratings represent a rating agency’s opinion regarding the quality of the security and are not a guarantee of quality. Rating agencies might not always change their credit rating on an issuer or security in a timely manner to reflect events that could affect the issuer’s ability to make timely payments on its obligations. Credit risk is typically greater for securities with ratings that are below investment grade.

Floating Rate Securities Risk

The coupons on certain fixed income securities in which the Fund may invest are not fixed and may fluctuate based upon changes in market rates. The coupon on a floating rate security is generally based on an interest rate such as a money-market index, London Interbank Offered Rate (“LIBOR”) or a Treasury bill rate. Such securities are subject to interest rate risk and may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons. As short-term interest rates decline, the coupons on floating rate securities typically decrease. Alternatively, during periods of rising interest rates, changes in the coupons of floating rate securities may lag behind changes in market rates or may have limits on the maximum increases in the coupon rates. The value of floating rate securities may decline if their coupons do not rise as much, or as quickly, as interest rates in general. Conversely, floating rate securities will not generally increase in value if interest rates decline. Floating rate obligations are less effective than fixed rate obligations at locking in a particular yield and are subject to credit risk.

Interest Rate Risk

Investments in investment-grade and non-investment grade fixed-income securities are subject to interest rate risk. The value of the Fund’s fixed-income investments typically will fall when interest rates rise. The Fund may be particularly sensitive to changes in interest rates if it invests in debt securities with intermediate and long terms to maturity. Debt securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than debt securities with shorter durations. For example, if a bond has a duration of seven years, a 1% increase in interest rates could be expected to result in a 7% decrease in the value of the bond. Yields of debt securities will fluctuate over time. Following the financial crisis that started in 2008, the Federal Reserve attempted to stabilize the economy and support the economic recovery by keeping the federal funds rate (the interest rate at which depository institutions lend reserve balances to each other overnight) at or near zero percent. The Federal Reserve has raised the federal funds rate several times since December 2015 and may continue to increase or decrease rates in the future. Interest rates may rise significantly and/or rapidly, potentially resulting insubstantial losses to the Fund. During periods of very low or negative interest rates, the Fund may be unable to maintain positive returns. Certain European countries and Japan have recently experienced negative interest rates on deposits and debt securities have traded at negative yields. Negative interest rates may become more prevalent among non-U.S. issuers, and potentially within the United States. Changing interest rates, including rates that fall below zero, may have unpredictable effects on markets, may result in heightened market volatility and may detract from Fund’s performance to the extent the Fund is exposed to such interest rates.

21

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

Investment Risk

An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.

LIBOR Risk

The Fund’s investments, payment obligations and financing terms may be based on floating rates, such as LIBOR, Euro Interbank Offered Rate and other similar types of reference rates (each, a “Reference Rate”). On July 27, 2017, the Chief Executive of the UK Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that the FCA will no longer persuade nor require banks to submit rates for the calculation of LIBOR and certain other Reference Rates after 2021. Such announcement indicates that the continuation of LIBOR and other Reference Rates on the current basis cannot and will not be guaranteed after 2021. This announcement and any additional regulatory or market changes may have an adverse impact on the Fund or its investments, including increased volatility or illiquidity in markets for instruments that rely on LIBOR.

Liquidity Risk

When there is little or no active trading market for a specific security it can become more difficult to purchase or sell the securities at or near their perceived value. During such periods, certain investments held by the Fund may be difficult to sell or other investments may be difficult to purchase at favorable times or prices. As a result, the Fund may have to lower the price on certain securities that it is trying to sell, sell other securities instead or forgo an investment opportunity, any of which could have a negative effect on Fund management or performance. Redemptions by a few large investors in the Fund at such times may have a significant adverse effect on the Fund’s NAV and remaining Fund shareholders. In addition, the market-making capacity of dealers in certain types of securities has been reduced in recent years, in part as a result of structural and regulatory changes, such as fewer proprietary trading desks and increased regulatory capital requirements for broker-dealers. Further, many broker-dealers have reduced their inventory of certain debt securities. This could negatively affect the Fund’s ability to buy or sell debt securities and increase the related volatility and trading costs. The Fund may lose money if it is forced to sell certain investments at unfavorable prices to meet redemption requests or other cash needs.

Market Risk

Conditions in the U.S. and many foreign economies have resulted, and may continue to result, in certain instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In some cases, traditional market participants have been less willing to make a market in some types of debt instruments, which has affected the liquidity of those instruments. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Treasury, causing the prices of these securities to rise and the yields to decline. Reduced liquidity in fixed income and credit markets may negatively affect many issuers worldwide. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.

In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. In some countries where economic conditions are recovering, they are nevertheless perceived as still fragile. Withdrawal of government support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding, could adversely impact

22

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

the value and liquidity of certain securities. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations, including changes in tax laws. The impact of new financial regulation legislation on the markets and the practical implications for market participants may not be fully known for some time. Regulatory changes are causing some financial services companies to exit long-standing lines of business, resulting in dislocations for other market participants. In addition, political and governmental events within the U.S. and abroad, such as the United States government’s inability at times to agree on a long-term budget and deficit reduction plan, the threat of a federal government shutdown and threats not to increase the federal government’s debt limit, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The U.S. government has reduced the federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets’ expectations for changes in government policies are not borne out.

Changes in market conditions will not have the same impact on all types of securities. Interest rates have been unusually low in recent years in the United States and abroad. Because there is little precedent for this situation, it is difficult to predict the impact of a significant rate increase on various markets. For example, because investors may buy securities or other investments with borrowed money, a significant increase in interest rates may cause a decline in the markets for those investments. Because of the sharp decline in the worldwide price of oil, there is a concern that oil producing nations may withdraw significant assets now held in U.S. Treasuries, which could force a substantial increase in interest rates. Regulators have expressed concern that rate increases may cause investors to sell fixed income securities faster than the market can absorb them, contributing to price volatility. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse.

The precise timing and the resulting impact of the United Kingdom’s departure from the European Union (the “EU”), commonly referred to as “Brexit,” are not yet known. The effect on the United Kingdom’s economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are matters to be negotiated. The outcomes may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time, which could significantly adversely affect the value of the Fund’s investments in the United Kingdom and Europe.

Mortgage-Backed and Mortgage Related Securities Risk

Investments in mortgage-backed and mortgage-related securities are subject to market risks for fixed-income securities which include, but are not limited to, interest rate risk, credit risk, extension risk and prepayment risk. When mortgages and other obligations are prepaid and when securities are called, a Fund may have to reinvest in securities with a lower yield or fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss and/or a decrease in the amount of dividends and yield.

Other Investment Companies Risk

The Fund may invest in shares of other registered investment companies, including money market funds. To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses, including for example advisory and administrative fees charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Fund’s investments in money market funds are subject to

23

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

interest rate risk, credit risk, and market risk. The Fund must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Fund’s investment will decline, adversely affecting the Fund’s performance. To the extent the Fund invests in other investment companies that invest in equity securities, fixed income securities and/or foreign securities, or track an index, the Fund is subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject.

Prepayment Risk

When interest rates fall, borrowers will generally repay the loans that underlie certain debt securities, especially mortgage-related and other types of asset-backed securities, more quickly than expected, causing the issuer of the security to repay the principal prior to the security’s expected maturity date. The Fund may need to reinvest the proceeds at a lower interest rate, reducing its income. Securities subject to prepayment risk generally offer less potential for gains when prevailing interest rates fall. If the Fund buys those securities at a premium, accelerated prepayments on those securities could cause the Fund to lose a portion of its principal investment. The impact of prepayments on the price of a security may be difficult to predict and may increase the security’s price volatility.

Redemption Risk

The Fund may experience periods of heavy redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in the Fund, have short investment horizons, or have unpredictable cash flow needs. A general rise in interest rates has the potential to cause investors to move out of fixed-income securities on a large scale, which may increase redemptions from mutual funds that hold large amounts of fixed-income securities. This, coupled with a reduction in the ability or willingness of dealers and other institutional investors to buy or hold fixed-income securities, may result in decreased liquidity and increased volatility in the fixed-income markets, and heightened redemption risk. Heavy redemptions, whether by a few large investors or many smaller investors, could hurt the Fund’s performance. This risk is heightened if the Fund invests in emerging market securities, which are generally less liquid than the securities of U.S. and other developed markets. The sale of assets to meet redemption requests may create net capital gains or losses, which could cause the Fund to have to distribute substantial capital gains.

Sector Risk

Sector risk is the risk associated with the Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent the Fund has substantial holdings within a particular sector, the risks to the Fund associated with that sector increase. To the extent a Fund invests in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than investment companies investing more broadly.

U.S. Government Securities and Government-Sponsored Enterprises Risk

A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only as to the timely payment of interest and principal when held to maturity. The market prices for such securities are not guaranteed and will fluctuate. Additionally, circumstances could arise that would prevent the payment of interest or principal. This could result in losses to the Fund. Investments in government-sponsored enterprises are debt obligations issued by agencies and instrumentalities of the U.S. Government. These obligations vary in the level of support they receive from the U.S. Government. They may be: (i) supported by the full faith and credit of

24

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

the U.S. Treasury, such as those of the Government National Mortgage Association (‘‘Ginnie Mae’’); (ii) supported by the right of the issuer to borrow from the U.S. Treasury, such as those of the Federal Home Loan Bank and the Federal Farm Credit Banks; (iii) supported by the discretionary authority of the U.S. Government to purchase the agency obligations, such as those of Fannie Mae and Freddie Mac or (iv) supported only by the credit of the issuer, such as those of the Federal Farm Credit Bureau. The U.S. Government may choose not to provide financial support to U.S. Government-sponsored agencies or instrumentalities if it is not legally obligated to do so, in which case, if the issuer defaulted, to the extent the Fund holds securities of such issuers, it might not be able to recover its investment from the U.S. Government.

6.  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 distributions 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 unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2019 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 expenses” on the Statement of Operations.

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 (depreciation), as applicable, as the income is earned or capital gains are recorded.

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 tax character of distributions paid were as follows:

	Year Ended October 31, 2019		Year Ended October 31, 2018
Distributions paid from:
Ordinary income*
Institutional Class	$	7,259,770	$	3,305,504
Y Class		437,870		59,124
Investor Class		280,134		165,821
R6 Class		480,168		-
Total distributions paid	$	8,457,942	$	3,530,449

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

As of October 31, 2019 the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Garcia Hamilton Quality Bond	$471,269,271	$	6,038,508	$	(146,591	)	$	5,891,917

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences			Distributable Earnings
Garcia Hamilton Quality Bond	$	5,891,917	$	130,679	$	-	$	(2,854,087	)	$	(130,681	)	$	3,037,828

25

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation (depreciation) are attributable primarily to the tax deferral of losses from wash sales, unused capital loss carryforwards, and dividends payable.

Due to inherent differences in the recognition of income, expenses, and realized gains (losses) under U.S. GAAP and federal income tax regulations, permanent differences between book and tax reporting have been identified and appropriately reclassified on the Statement of Assets and Liabilities. The Fund had no permanent differences as of October 31, 2019.

Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the Fund in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.

As of October 31, 2019, the Fund had the following capital loss carryforwards:

Fund	Short-Term Capital Loss Carryforwards		Long-Term Capital Loss Carryforwards
Garcia Hamilton Quality Bond	$	1,724,644	$	1,129,443

The Fund utilized $237,962 of capital loss carryforwards during the year ended October 31, 2019.

7.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2019 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Purchases of U.S. Government Securities		Sales (non-U.S. Government Securities)		Sales of U.S. Government Securities
Garcia Hamilton Quality Bond	$	271,233,574	$	174,232,844	$	75,903,944	$	113,372,042

A summary of the Fund’s transactions in the USG Select Fund for the year ended October 31, 2019 were as follows:

Fund	Type of Transaction	October 31, 2018 Shares/Fair Value		Purchases		Sales		October 31, 2019 Shares/Fair Value		Dividend Income
Garcia Hamilton Quality Bond	Direct	$	27,218,440	$	394,521,845	$	418,113,032	$	3,627,253	$	262,616

8.  Borrowing Arrangements

Effective November 15, 2018 (the “Effective Date”), the Fund, along with certain other funds managed by the Manager (“Participating Funds”), entered into a committed revolving line of credit (the “Committed Line”) agreement with State Street Bank and Trust Company (the “Bank”) to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Committed Line is $250 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on amounts borrowed. Each of the Participating Funds paid a closing fee of $100,000 on the Effective Date and a quarterly commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 14, 2019, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

On the Effective Date, the Fund, along with certain other Participating Funds managed by the Manager, also entered into an uncommitted discretionary demand revolving line of credit (the “Uncommitted Line”) agreement

26

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

with the Bank to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Uncommitted Line is $50 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on each outstanding loan. Each of the Participating Funds paid a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 14, 2019 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

The Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Other expenses” on the Statement of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.

During the year ended October 31, 2019, the Fund did not utilize this facility.

9.  Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund:

	Institutional Class
	Year Ended October 31,
	2019						2018
Garcia Hamilton Quality Bond Fund	Shares			Amount			Shares			Amount
Shares sold		13,533,670		$	134,010,760			12,598,631		$	124,573,816
Reinvestment of dividends		565,317			5,624,443			287,808			2,842,265
Shares redeemed		(6,579,506	)		(65,522,190	)		(2,278,673	)		(22,493,423	)
Net increase in shares outstanding		7,519,481		$	74,113,013			10,607,766		$	104,922,658
	Y Class
	Year Ended October 31,
	2019						2018
Garcia Hamilton Quality Bond Fund	Shares			Amount			Shares			Amount
Shares sold		2,565,196		$	25,317,668			77,645		$	766,204
Reinvestment of dividends		43,701			435,013			5,845			57,695
Shares redeemed		(1,200,900	)		(12,027,942	)		(23,305	)		(230,768	)
Net increase in shares outstanding		1,407,997		$	13,724,739			60,185		$	593,131
	Investor Class
	Year Ended October 31,
	2019						2018
Garcia Hamilton Quality Bond Fund	Shares			Amount			Shares			Amount
Shares sold		573,641		$	5,677,383			273,789		$	2,702,704
Reinvestment of dividends		28,161			280,122			16,784			165,797
Shares redeemed		(241,219	)		(2,393,292	)		(149,158	)		(1,472,508	)
Net increase in shares outstanding		360,583		$	3,564,213			141,415		$	1,395,993
	R6 Class
	February 28, 2019A to October 31, 2019
Garcia Hamilton Quality Bond Fund	Shares			Amount
Shares sold		12,935,747	B	$	130,250,579	B
Reinvestment of dividends		47,760			479,506
Shares redeemed		(16,756	)		(168,494	)
Net increase in shares outstanding		12,966,751		$	130,561,591

^A  Class commenced operations.

^B  Seed capital was received on in the amount of $100,000 for the R6 Class. As a result, shares were issued in the amount of 10,132 for R6 Class.

27

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2019

10.  Subsequent Events

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.

28

American Beacon Garcia Hamilton Quality Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended October 31,									April 4, 2016A to October 31,
	2019			2018			2017			2016
Net asset value, beginning of period	$	9.79		$	9.91		$	9.98		$	10.00
Income (loss) from investment operations:
Net investment income		0.24			0.20			0.14			0.05
Net gains (losses) on investments (both realized and unrealized)		0.26			(0.13	)		(0.05	)		(0.02	)
Total income (loss) from investment operations		0.50			0.07			0.09			0.03
Less distributions:
Dividends from net investment income		(0.24	)		(0.19	)		(0.15	)		(0.05	)
Distributions from net realized gains		-			-			(0.01	)		-
Total distributions		(0.24	)		(0.19	)		(0.16	)		(0.05	)
Net asset value, end of period	$	10.05		$	9.79		$	9.91		$	9.98
Total returnB		5.20	%		0.74	%		0.91	%		0.34	%C
Ratios and supplemental data:
Net assets, end of period	$	316,582,604		$	234,919,975		$	132,575,412		$	124,032,604
Ratios to average net assets:
Expenses, before reimbursements		0.66	%		0.69	%		0.70	%		1.06	%D
Expenses, net of reimbursements		0.45	%		0.45	%		0.45	%		0.45	%D
Net investment income, before expense reimbursements		2.18	%		1.68	%		1.12	%		0.29	%D
Net investment income, net of reimbursements		2.39	%		1.92	%		1.37	%		0.91	%D
Portfolio turnover rate		58	%		143	%		52	%		40	%E

^A  Commencement of operations.

^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 U.S. GAAP 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 April 4, 2016 through October 31, 2016 and is not annualized.

See accompanying notes

29

American Beacon Garcia Hamilton Quality Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,									April 4, 2016A to October 31,
	2019			2018			2017			2016
Net asset value, beginning of period	$	9.79		$	9.90		$	9.98		$	10.00
Income (loss) from investment operations:
Net investment income		0.24			0.18			0.13			0.05
Net gains (losses) on investments (both realized and unrealized)		0.25			(0.11	)		(0.06	)		(0.02	)
Total income (loss) from investment operations		0.49			0.07			0.07			0.03
Less distributions:
Dividends from net investment income		(0.23	)		(0.18	)		(0.14	)		(0.05	)
Distributions from net realized gains		-			-			(0.01	)		-
Total distributions		(0.23	)		(0.18	)		(0.15	)		(0.05	)
Net asset value, end of period	$	10.05		$	9.79		$	9.90		$	9.98
Total returnB		5.09	%		0.74	%		0.71	%		0.29	%C
Ratios and supplemental data:
Net assets, end of period	$	17,927,537		$	3,685,857		$	3,133,476		$	3,265,315
Ratios to average net assets:
Expenses, before reimbursements		0.73	%		0.75	%		0.77	%		1.29	%D
Expenses, net of reimbursements		0.55	%		0.55	%		0.55	%		0.55	%D
Net investment income, before expense reimbursements		2.14	%		1.58	%		1.05	%		0.11	%D
Net investment income, net of reimbursements		2.32	%		1.78	%		1.27	%		0.85	%D
Portfolio turnover rate		58	%		143	%		52	%		40	%E

^A  Commencement of operations.

^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 U.S. GAAP 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 April 4, 2016 through October 31, 2016 and is not annualized.

See accompanying notes

30

American Beacon Garcia Hamilton Quality Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,									April 4, 2016A to October 31,
	2019			2018			2017			2016
Net asset value, beginning of period	$	9.79		$	9.91		$	9.99		$	10.00
Income (loss) from investment operations:
Net investment income		0.21			0.15			0.10			0.03
Net gains (losses) on investments (both realized and unrealized)		0.26			(0.11	)		(0.06	)		(0.01	)
Total income (loss) from investment operations		0.47			0.04			0.04			0.02
Less distributions:
Dividends from net investment income		(0.21	)		(0.16	)		(0.11	)		(0.03	)
Distributions from net realized gains		-			-			(0.01	)		-
Total distributions		(0.21	)		(0.16	)		(0.12	)		(0.03	)
Net asset value, end of period	$	10.05		$	9.79		$	9.91		$	9.99
Total returnB		4.80	%		0.36	%		0.43	%		0.24	%C
Ratios and supplemental data:
Net assets, end of period	$	14,904,591		$	10,995,242		$	9,724,030		$	8,594,617
Ratios to average net assets:
Expenses, before reimbursements		1.04	%		0.92	%		0.94	%		1.19	%D
Expenses, net of reimbursements		0.83	%		0.83	%		0.83	%		0.83	%D
Net investment income, before expense reimbursements		1.81	%		1.41	%		0.89	%		0.21	%D
Net investment income, net of reimbursements		2.02	%		1.50	%		0.99	%		0.57	%D
Portfolio turnover rate		58	%		143	%		52	%		40	%E

^A  Commencement of operations.

^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 U.S. GAAP 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 April 4, 2016 through October 31, 2016 and is not annualized.

See accompanying notes

31

American Beacon Garcia Hamilton Quality Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R6 Class
	February 28, 2019A to October 31, 2019
Net asset value, beginning of period	$	9.87
Income from investment operations:
Net investment income		0.17
Net gains on investments (both realized and unrealized)		0.17
Total income from investment operations		0.34
Less distributions:
Dividends from net investment income		(0.17	)
Total distributions		(0.17	)
Net asset value, end of period	$	10.04
Total returnB		3.44	%C
Ratios and supplemental data:
Net assets, end of period	$	130,208,195
Ratios to average net assets:
Expenses, before reimbursements		0.66	%D
Expenses, net of reimbursements		0.41	%D
Net investment income, before expense reimbursements		1.90	%D
Net investment income, net of reimbursements		2.15	%D
Portfolio turnover rate		58	%E

^A  Commencement of operations.

^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 U.S. GAAP 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 is for the period ended herein.

See accompanying notes

32

American Beacon Funds^SM

Federal Tax Information

October 31, 2019 (Unaudited)

Certain tax information regarding the Funds are required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2019. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2019.

The Fund designated the following items with regard to distributions paid during the fiscal year ended October 31, 2019. 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:

Garcia Hamilton Quality Bond - % 

Qualified Dividend Income:

Garcia Hamilton Quality Bond - % 

Long-Term Capital Gain Distributions:

Garcia Hamilton Quality Bond $             -

Short-Term Capital Gain Distributions:

Garcia Hamilton Quality Bond $             -

Shareholders will receive notification in January 2020 of the applicable tax information necessary to prepare their 2019 income tax returns.

33

Disclosure Regarding Approval of the Management and Investment

Advisory Agreements (Unaudited)

Renewal and Approval of Management Agreement and Investment Advisory Agreement

At in-person meetings held on May 9, 2019 and June 4-5, 2019 (collectively, the “Meetings”), the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 5, 2019 meeting, approved the renewal of:

(1) the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon Garcia Hamilton Quality Bond Fund (“Fund”); and

(2) the Investment Advisory Agreement among the Manager, Garcia Hamilton & Associates, LP (“subadvisor”), and the Trust, on behalf of the Fund.

The Management Agreement and the Investment Advisory Agreement are referred to herein individually as an “Agreement” and collectively as the “Agreements.” In preparation for its consideration of the renewal of the Agreements, the Board undertook steps to gather and consider information furnished by the Manager, the subadvisor, Broadridge, Inc. (“Broadridge”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and the subadvisor.

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Fund as well as information from the Manager and the subadvisor. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Board received and evaluated such information as they deemed necessary. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to the Fund.

The Board noted that the Manager provides management and administrative services to the Fund pursuant to the Management Agreement. The Board considered that many mutual funds have separate contracts governing each type of service and observed that, with respect to such mutual funds, the actual management fee rates provided by Broadridge for peer group funds reflect the combined advisory and administrative expenses, reduced by any fee waivers and/or reimbursements.

A firm 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 the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations. 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 was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

Provided below is an overview of certain factors the Board considered in connection with its renewal and approval of the 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 investment advisory contracts, such as the Agreements. The memorandum explained the regulatory requirements surrounding the Board’s process for evaluating investment advisors and the terms of investment advisory contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Fund and its shareholders.

34

Disclosure Regarding Approval of the Management and Investment

Advisory Agreements (Unaudited)

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

In determining whether to renew the Agreements, the Board considered the 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 the Fund; (3) the costs incurred by the Manager in rendering services to the Fund and its resulting profits or losses; (4) comparisons of services and fee rates with contracts entered into by the Manager or the subadvisor or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisor from their relationships with the Fund.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: the Fund’s performance since its inception on April 4, 2016; the length of service of key investment personnel at the Manager; the cost structure of the Fund; the Manager’s culture of compliance and support that reduce risks to the Fund; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; and the Manager’s efforts to retain key employees and maintain staffing levels.

With respect to the renewal of the Investment Advisory Agreement, the Board considered the level of staffing and the size of the subadvisor. The Board also considered the adequacy of the resources committed to the Fund by the subadvisor, and whether those resources were commensurate with the needs of the Fund and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of the subadvisor. The Board also considered the subadvisor’s representations regarding its compliance program and code 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 the subadvisor were appropriate for the Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of the Fund relative to its Broadridge performance universe, Morningstar Category, and benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding Broadridge’s independent methodology for selecting the Fund’s Broadridge performance universe. The Board also considered that the performance universes selected by Broadridge may not provide appropriate comparisons for the Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by the subadvisor regarding the performance of its portion of the Fund relative to the performance of a composite of similar accounts managed by the subadvisor and the Fund’s benchmark index. In addition, the Board considered the Manager’s recommendation to continue to retain the subadvisor. A discussion regarding the Board’s considerations with respect to the Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to the Fund.”

Costs of the Services Provided to the Fund and the Profits Realized by the Manager from its Relationship with the Fund. In analyzing the cost of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager sustaining a loss before and after the payment of distribution-related expenses by the Manager for the Fund. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. 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 Fund, the Manager represented that,

35

Disclosure Regarding Approval of the Management and Investment

Advisory Agreements (Unaudited)

among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility and regulatory requirements associated with managing the Fund.

The Board also noted that the Manager proposed to continue the expense waivers and reimbursements for the Fund that were in place during the last fiscal year. The Board further considered that, with respect to the Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager. The Board also noted that certain share classes of the Fund maintain higher expense ratios in order to compensate third-party financial intermediaries.

In analyzing the fee rates charged by the subadvisor in connection with its investment advisory services to the Fund, the Board considered representations made by the subadvisor that the fee rate negotiated by the Manager is favorable relative to the fee rates that the subadvisor charges for any comparable client accounts. The Board did not request profitability data from the subadvisor 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 subadvisor with respect to the negotiation of subadvisory fee rates. In addition, the Board considered that it was advised that the subadvisor may not account for its profits on an account-by-account basis and that different firms 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 the Fund’s fee rates is set forth below under “Additional Considerations and Conclusions with Respect to the 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 Fund grows 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 the subadvisory fee rate for the Fund. In addition, the Board noted the Manager’s representation that the Management Agreement contains fee schedule breakpoints at higher asset levels with respect to the Fund. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for the Fund provide for a reasonable sharing of benefits from any economies of scale with the Fund.

Benefits Derived from the Relationship with the Fund. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisor as a result of the advisory relationships with the Fund, including greater exposure in the marketplace with respect to the Manager’s or the subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisor. Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisor by virtue of their relationships with the Fund appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to the Fund

The performance comparisons below were made in comparison to the Fund’s Broadridge performance universe and Morningstar Category. With respect to the Broadridge performance universe, the 1^st Quintile represents the top 20 percent of the universe based on performance and the 5^th Quintile representing the bottom 20 percent of the universe based on performance. References below to the Fund’s Broadridge performance universe are to the universe of mutual funds with a comparable investment classification/objective included in the analysis provided by Broadridge.

The expense comparisons below were made in comparison to the Fund’s Broadridge expense universe and Broadridge expense group, with the 1^st Quintile representing the lowest 20 percent of the universe or group based on lowest total expense and the 5^th Quintile representing the highest 20 percent of the universe or group based on

36

Disclosure Regarding Approval of the Management and Investment

Advisory Agreements (Unaudited)

highest total expense. References below to the Fund’s expense group and expense universe are to the respective group or universe of comparable mutual funds included in the analysis by Broadridge. A Broadridge expense group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge expense universe includes all funds in the investment classification/objective with a similar operating structure as the share class of the Fund included in the Broadridge comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Board also considered the Fund’s Morningstar fee level category. In reviewing expenses, the Board considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the subadvisor’s use of soft dollars was requested from the Manager and was considered by the Board.

In considering the renewal of the Management Agreement and the Investment Advisory Agreement with the subadvisor for the Fund, the Board considered the following additional factors:

Broadridge Total Expenses Excluding 12b-1 Fees and Morningstar Fee Level Ranking

Compared to Broadridge Expense Group	2nd Quintile
Compared to Broadridge Expense Universe	3rd Quintile
Morningstar Fee Level Ranking – Institutional Class	Below Average Expense Ratio

Broadridge and Morningstar Performance Analysis (one-year period ended December 31, 2018)

Compared to Broadridge Performance Universe	1st Quintile
Compared to Morningstar Category	1st Quintile

The Board also considered: (1) information provided by the subadvisor regarding fee rates charged for managing assets in the same or a similar 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 Board: (1) concluded that the fees paid to the Manager and subadvisor under the Management and Investment Advisory Agreements are fair and reasonable; and (2) determined that the Fund and its shareholders would benefit from the Manager’s and subadvisor’s continued management of the Fund.

37

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. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty-six funds in the fund complex that includes the Trust, the American Beacon Select Funds, the American Beacon Institutional Funds Trust, the American Beacon Sound Point Enhanced Income Fund, American Beacon Apollo Total Return Fund and the American Beacon Sound Point Alternative Lending Fund. 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	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*
Alan D. Feld** (82)	Trustee since 1996	Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (49)	Trustee since 2015	Director, Kura MD, Inc. (local telehealth organization) (2015-present); Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Vice President & CFO, Sierra Health Foundation: Center for Health Program Management (California public benefit corporation) (2012-Present); Director, Innovative North State (2012-2015); Director, Sacramento Regional Technology Alliance (2011-2016); Director, Women’s Empowerment (2009-2014); Director, Valley Healthcare Staffing (2017-present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Joseph B. Armes (57)	Trustee since 2015	Chairman & CEO, CSW Industrials f/k/a Capital Southwest Corporation (investment company) (2015-Present); Chairman of the Board of Capital Southwest Corporation, predecessor to CSW Industrials, Inc. (2014-2017) (investment company); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-Present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Gerard J. Arpey (61)	Trustee since 2012	Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

38

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (58)	Trustee since 2004 Chair since 2019 Vice Chair 2018	Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Director, Tyler Technologies, Inc. (public sector software solutions company) (2014-Present); Director, Range Resources Corporation (oil and natural gas company) (2015-Present); Trustee, Cushing Closed-End and Open-End Funds and ETFs (2017-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Eugene J. Duffy (65)	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-Present); Principal and Executive Vice President, Paradigm Asset Management (1994-2014); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Claudia A. Holz (62)	Trustee since 2018	Partner, KPMG LLP (1990-2017); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Douglas A. Lindgren(57)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Managing Director, IPS Investment Management and Global Head, Content Management, UBS Wealth Management (2010-2016); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Richard A. Massman (76)	Trustee since 2004 Chair 2008-2018 Chair Emeritus since 2019	Consultant and General Counsel Emeritus, Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities) (2009-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Barbara J. McKenna, CFA (56)	Trustee since 2012	President/Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

39

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
R. Gerald Turner (73)	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 Select Funds (2001-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (64)	President since 2009	President (2009-2018), CEO and Director (2009-Present), and Chairman (2018-Present), American Beacon Advisors, Inc., President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present), Resolute Investment Holdings, LLC; President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present),Resolute Topco, Inc.; President (2015-2018); Director, and CEO (2015-Present), and Chairman (2018-Present), Resolute Acquisition, Inc.; President (2015-2018), Director and CEO (2015-Present), Chairman (2018-Present), Resolute Investment Managers, Inc.; Director, Chairman, President and CEO, Resolute Investment Distributors (2017-Present); Director, Chairman, President and CEO; Resolute Investment Services, Inc. (2017-Present); President and CEO, Lighthouse Holdings Parent, Inc. (2009-2015); President, CEO and Director, Lighthouse Holdings, Inc. (2009-2015); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-Present); Director, ARK Investment Management LLC (2016-Present); Director, Shapiro Capital Management LLC (2017-Present); Director, Chairman and CEO, Continuous Capital, LLC (2018-Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director and President, American Beacon Cayman Transformational Innovation Company, LTD., (2017-2018); President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); President American Beacon Cayman TargetRisk Company, Ltd. (2018-Present);Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-Present); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-Present); President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present); President, American Beacon Sound Point Alternative Lending Fund (2019-Present); Director, Green Harvest Asset Management (2019-Present).

40

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rosemary K. Behan (60)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Secretary and General Counsel, American Beacon Advisors, Inc. (2006-Present); Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015-Present); Vice President, Secretary and General Counsel, Resolute Investment Managers, Inc. (2015-Present); Secretary, Resolute Investment Distributors, Inc. (2017-Present); Vice President, Secretary and General Counsel, Resolute Investment Services, Inc. (2017-Present); Vice President and Secretary, Lighthouse Holdings Parent, Inc. (2008-2015); Vice President and Secretary, Lighthouse Holdings, Inc. (2008-2015); Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-Present); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Secretary, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-2018); Secretary, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Secretary, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Select Funds (2006-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Secretary, Green Harvest Asset Management (2019-Present).
Brian E. Brett (59)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), Vice President, Director of Sales (2004-2012), American Beacon Advisors, Inc.; Senior Vice President, Resolute Investment Managers, Inc. (2017-Present); Senior Vice President, Resolute Investment Distributors, Inc. (2018-Present), Senior Vice President, Resolute Investment Services, Inc. (2018-Present); Senior Vice President, Lighthouse Holdings Parent, Inc. (2008-2015); Senior Vice President, Lighthouse Holdings, Inc. (2008-2015); Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Paul B. Cavazos (50)	VP since 2016	Chief Investment Officer and Senior Vice President, American Beacon Advisors, Inc. (2016-Present); Chief Investment Officer, DTE Energy (2007-2016); Vice President, American Private Equity Management, L.L.C. (2017-Present); Vice President, American Beacon Select Funds (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present);Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Erica Duncan (49)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers (2018-Present); Vice President, Resolute Investment Services, Inc. (2018-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

41

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Melinda G. Heika (58)	Treasurer since 2010	Treasurer and CFO (2010-Present), American Beacon Advisors, Inc.; Treasurer, Resolute Topco, Inc. (2015-Present); Treasurer, Resolute Investment Holdings, LLC. (2015-Present); Treasurer, Resolute Acquisition, Inc. (2015-Present); Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017-2017); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, Lighthouse Holdings Parent Inc., (2010-2015); Treasurer, Lighthouse Holdings, Inc. (2010-2015); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-Present); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Treasurer, American Beacon Select Funds (2010-Present); Treasurer, American Beacon Institutional Funds Trust (2017-Present); Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present); Treasurer, Green Harvest Asset Management (2019-Present).
Terri L. McKinney (55)	VP since 2010	Vice President (2009-Present), Managing Director (2003-2009), American Beacon Advisors, Inc.; Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services, Inc (2018-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

42

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Jeffrey K. Ringdahl (44)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), Vice President (2010-2013), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice Present (2015-2018), Resolute Investment Holdings, LLC; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Topco, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Acquisition, Inc.; Director (2015-Present), President & COO (2018-Present), Senior Vice President (2015-2018), Resolute Investment Managers, Inc.; Director and Executive Vice President (2017-Present), Resolute Investment Distributors, Inc.; Director (2017-Present), President & COO (2018-Present), Executive Vice President (2017-2018), Resolute Investment Services, Inc.; Senior Vice President (2017-Present), Vice President (2012-2017), Manager (2015-Present), American Private Equity Management, LLC; Senior Vice President, Lighthouse Holdings Parent, Inc. (2013-2015); Senior Vice President, Lighthouse Holdings, Inc. (2013-2015); Trustee, American Beacon NextShares Trust (2015-Present); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-Present); Director, Shapiro Capital Management, LLC (2017-Present); Director, Executive Vice President & COO, Continuous Capital, LLC (2018-Present); Director and Vice President, American Beacon Cayman Transformational Innovation Company, Ltd., (2017-Present); Vice President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Vice President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Vice President, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Vice President, American Beacon Select Funds (2010-2018); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present), Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Samuel J. Silver (56)	VP Since 2011	Vice President (2011-Present), Chief Fixed Income Officer (2016-Present), American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Christina E. Sears (48)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Vice President, American Beacon Advisors, Inc. (2019-Present); Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Distributors (2017-Present); Vice President, Resolute Investment Services, Inc. (2019-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Chief Compliance Officer (2004-Present) and Assistant Secretary (1999-Present), American Beacon Select Funds; Chief Compliance Officer and Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).

43

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Sonia L. Bates (62)	Asst. Treasurer since 2011	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); Assistant Treasurer, Lighthouse Holdings Parent Inc. (2011-2015); Assistant Treasurer, Lighthouse Holdings, Inc. (2011-2015); Assistant Treasurer, American Private Equity Management, LLC (2012-Present); Assistant Treasurer, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-Present); Assistant Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Assistant Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Shelley D. Abrahams (44)	Assistant Secretary since 2008	Assistant Secretary, American Beacon Select Funds (2008-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).
Rebecca L. Harris (52)	Assistant Secretary since 2010	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services (2015-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Assistant Secretary, American Beacon Select Funds (2010-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Teresa A. Oxford (61)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2015-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees, other than Messrs. Feld and Massman to retire no later than the last day of the calendar year in which they reach the age of 75. As of 11/7/17, the Board approved a waiver of the mandatory retirement policy with respect to Mr. Massman, who turned 75 in November 2018, to permit him to continue to serve on the Board as Chair Emeritus through 12/31/19.

** Mr. Feld is deemed to be an “interested person” of the Trusts, 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 fiscal years to one or more of the Trust’s sub-advisors.

44

American Beacon Garcia Hamilton Quality Bond Fund^SM

Privacy Policy

October 31, 2019 (Unaudited)

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.

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48

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:	On the Internet:
american_beacon.funds@ambeacon.com	Visit our website at www.americanbeaconfunds.com
By Telephone: Call (800) 658-5811	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules	Availability of Proxy Voting Policy and Records
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the first and third fiscal quarters. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Company Boston, Massachusetts TRANSFER AGENT DST Asset Manager Solutions, Inc. Quincy, Massachusetts INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, Texas

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

American Beacon Funds and American Beacon Garcia Hamilton Quality Bond Fund are service marks of American Beacon Advisors, Inc.

AR 10/19

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.

INTERNATIONAL EQUITY FUND RISKS

Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

TOCQUEVILLE INTERNATIONAL VALUE FUND RISKS

Investing in foreign securities including emerging markets may involve heightened risk due to currency fluctuations and economic and political risks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

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

American Beacon Funds October 31, 2019

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	8
Report of Independent Registered Public Accounting Firm	10
Schedules of Investments:
American Beacon International Equity Fund	12
American Beacon Tocqueville International Value Fund	19
Financial Statements	23
Notes to Financial Statements	28
Financial Highlights:
American Beacon International Equity Fund	54
American Beacon Tocqueville International Value Fund	61
Federal Tax Information	64
Disclosure Regarding Approval of the Management and Investment Advisory Agreements	65
Trustees and Officers of the American Beacon Funds	70
Privacy Policy	77

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   In recent months, you’ve likely seen and heard news reports about disruptive headwinds in the global economy – including the U.S. trade war with China and its toll on the global economy, slowing global growth, the Federal Reserve’s series of rate cuts, Brexit, disruptions in the Middle East and protests in Hong Kong – and watched a flood of reaction in the world’s markets.   As Peter L. Bernstein said in his treatise on risk, Against the Gods: The Remarkable Story of Risk, published by John Wiley & Sons, Inc. in September 1998, “Volatility is a proxy for uncertainty and must be accommodated in measuring investment risk.”   During times of economic uncertainty and market volatility, fear of loss can be a powerful emotion – one that drives many investors to making short-term decisions subject to a variety of potential error-leading biases. Unfortunately, some short-term investment decisions may create more volatility rather than mitigate it.

Instead of dwelling on the markets’ short-term reaction to waves of negative global news, we encourage investors to focus on the horizon instead. Long-term investing isn’t about identifying and anticipating the next big market move, it is about identifying the right investment products for riding out those moves. As a long-term investor, you should keep in mind the three Ds: direction, discipline and diversification.

u Direction: Achieving your long-term financial goals requires an individualized plan of action. You may want your plan to provide some measure of protection against periods of geopolitical turmoil, economic uncertainty, market volatility and job insecurity. Your plan should be reviewed annually and be adjusted in the event your long-range needs change.

u Discipline: Long-term, systematic participation in an investment portfolio requires your resolution to stay the course. Spending time in the market – rather than trying to time the market – may place you in a better position to reach your long-term financial goals.

u Diversification: By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your investment portfolio. By allocating your investment portfolio according to your risk-tolerance level, you may be better positioned to weather storms and achieve your long-term financial goals.

Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term financial goals. As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings.

Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for long-term rewards.

Our management approach is more than a concept; it’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment solutions to help our shareholders seek long-term rewards while mitigating volatility and risk.

Thank you for your continued interest in American Beacon. For additional information about our investment products 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

International Equity Market Overview

October 31, 2019 (Unaudited)

Over the 12-month period ended October 31, 2019, developed international equities rose more than 11% and emerging market equities rose almost 12%. While investor uncertainty about global growth and trade weighed on sentiment, central banks responded by loosening monetary policy and governments with budget surpluses were urged to implement fiscal stimulus, which has sustained strong equity returns.

Trade tensions have contributed to the slower economy. Global growth has declined 1.2 percentage points since President Donald Trump first ordered tariffs on steel and aluminum in the first quarter of 2018. Germany, an export powerhouse, reported slightly negative gross domestic product (“GDP”) growth in the second quarter while manufacturing indexes deteriorated. China – the world’s second-largest economy and source of almost 20% of global growth – reported GDP growth of 6.2%, a 27-year low. While global manufacturing is weak, the global consumer remains more resilient. The majority of consumer data is still relatively positive – and the consumer expansion, though at low rates, is driving modestly positive global growth.

In the international equity markets, Growth continued to outperform Value despite a dramatic rise in deep-value equities in early September. The valuation gap between Growth and Value continues to reach extremes. Historically, the performance of Growth versus Value appears to have a correlation with interest rates. When interest rates decline, Growth has historically outperformed Value. When interest rates rise, Value tends to be more in favor. This implies that the recent rally in deep-value equities will not likely close the performance gap with Growth unless long-term rates rise, which would presumably occur if expectations rise for stronger economic growth. Without that acceleration, deep-value equities could prove to be a classic Value trap.

2

American Beacon International Equity Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

The Investor Class of the American Beacon International Equity Fund (the “Fund”) returned 5.55% for the twelve months ended October 31, 2019. The Fund underperformed the MSCI EAFE Index (the “Index”) return of 11.04%.

Comparison of Change in Value of a $10,000 Investment for the period from 10/31/2009 through 10/31/2019

Total Returns for the Period ended October 31, 2019
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of $10,000 10/31/2009- 10/31/2019
Institutional Class (1,7)	AAIEX		5.94	%		6.39	%		2.50	%		5.02	%		$	16,326
Y Class (1,7)	ABEYX		5.83	%		6.31	%		2.43	%		4.93	%		$	16,185
Investor Class (1,7)	AAIPX		5.55	%		6.01	%		2.15	%		4.65	%		$	15,758
Advisor Class (1,2,7)	AAISX		5.38	%		5.87	%		2.03	%		4.50	%		$	15,530
A Class without sales charge (1,3,7)	AIEAX		5.51	%		5.97	%		2.11	%		4.57	%		$	15,628
A Class with sales Charge (1,3,7)	AIEAX		(0.56	)%		3.90	%		0.91	%		3.95	%		$	14,733
C Class without sales charge (1,4,7)	AILCX		4.69	%		5.18	%		1.35	%		3.84	%		$	14,573
C Class with sales charge (1,4,7)	AILCX		3.69	%		5.18	%		1.35	%		3.84	%		$	14,573
R6 Class (1,5,7)	AAERX		5.98	%		6.45	%		2.54	%		5.04	%		$	16,355
MSCI EAFE Index Net (6)			11.04	%		8.48	%		4.31	%		5.41	%		$	16,931

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to the Institutional Class of the Fund was waived from 2013 through 2015. Performance prior to waiving fees was lower than actual returns shown for 2013 through 2015.

3

American Beacon International Equity Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

2. A portion of the fees charged to the Advisor Class of the Fund was waived in 2007 and 2009. Performance prior to waiving fees was lower than the actual returns shown for these periods.

3. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 10/31/09. A portion of the fees charged to the A Class of the Fund was waived from 2010 through 2012 and fully recovered in 2013. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012. The maximum sales charge for A Class is 5.75%.

4. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/09. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012, partially recovered in 2013, and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

5. Fund performance for the three-year, five-year and ten-year periods represents the returns achieved by the Institutional Class from 10/31/09 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 10/31/09. A portion of the fees charged to the R6 Class of the Fund has been waived since Class inception. Performance prior to waiving fees was lower than the actual returns shown since inception.

6. The MSCI EAFE Index is a market capitalization weighted index of international stock performance composed of equities from developed markets excluding the U.S. and Canada. One cannot directly invest in an index.

7. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C and R6 Class shares were 0.74%, 0.81%, 1.07%, 1.21%, 1.09%, 1.82% and 0.71%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund underperformed the Index over the twelve-month period primarily due to stock selection while country allocation also slightly hampered performance.

Stock selections within Japan and Italy primarily contributed to the Fund’s relative underperformance, while stock selections in the United Kingdom added value. Detracting securities included Takeda Pharmaceutical Co. Ltd (down 6.27%) in Japan and Eni SpA (down 10.58%) within Italy. The Fund’s investments in the United Kingdom, including Cobham plc (up 52.18%) helped relative performance during the prior twelve months.

From a country allocation perspective, overweighting out-of-index Republic of Korea (up 5.22%) and underweighting Australia (up 17.10%) contributed to the Fund’s underperformance relative to the Index. However, underweighting both Japan (up 9.69%) and Spain (up 6.32%) added to relative value during the period.

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

Top Ten Holdings (% Net Assets)
Samsung Electronics Co., Ltd.		2.7
Volkswagen AG		2.4
Novartis AG		2.0
BNP Paribas S.A.		1.9
SAP SE		1.9
Takeda Pharmaceutical Co., Ltd.		1.8
BP PLC		1.7
Sanofi		1.7
Vodafone Group PLC		1.7
Prudential PLC		1.6
Total Fund Holdings	141

4

American Beacon International Equity Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

Sector Allocation (% Equities)
Financials	18.9
Industrials	17.3
Health Care	11.3
Communication Services	9.4
Energy	8.9
Materials	8.4
Consumer Staples	7.5
Information Technology	7.1
Consumer Discretionary	4.9
Utilities	3.5
Real Estate	2.8
Country Allocation (% Equities)
United Kingdom	19.7
Japan	16.3
Germany	13.4
France	12.2
Netherlands	6.5
Canada	5.0
Switzerland	5.0
Republic of Korea	4.7
Italy	2.1
United States	1.9
Singapore	1.8
Norway	1.7
Denmark	1.5
Ireland	1.5
Sweden	1.3
China	1.2
Finland	0.8
Hong Kong	0.7
Luxembourg	0.7
Spain	0.7
Belgium	0.5
Australia	0.4
Israel	0.4

5

American Beacon Tocqueville International Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

The Investor Class of the American Beacon Tocqueville International Value Fund (the “Fund”) returned 5.03% for the twelve month period ending October 31, 2019, which underperformed the MSCI EAFE Index (the “Index”) return of 11.04%.

Comparison of Change in Value of a $10,000 Investment for the period from 10/31/2009 through 10/31/2019

Total Returns for the Period ended October 31, 2019
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of  $10,000 10/31/2009- 10/31/2019
Institutional Class (1,3,5)	TOVIX		5.29	%		4.16	%		4.31	%		6.09	%		$	18,065
Y Class (1,2,5)	TOVYX		5.23	%		4.14	%		4.30	%		6.09	%		$	18,053
Investor Class (1,5)	TIVFX		5.03	%		4.07	%		4.26	%		6.06	%		$	18,018
MSCI EAFE Index Net (4)			11.04	%		8.48	%		4.31	%		5.41	%		$	16,931

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of fees charged to each Class of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than actual returns shown since inception.

2. Fund performance for the one-year, three-year, five-year and ten-year periods represents the total returns achieved by the Investor Class from 10/31/09 up to 1/18/19, the inception date of the Y Class. Expenses of the Y Class are lower than those of the Investor Class. As a result, total returns shown may be lower than they would have been had the Y Class been in existence since 10/31/09.

3. Fund performance for the one-year, three-year, five-year and ten-year periods represents the total returns achieved by the Investor Class from 10/31/09 up to 1/18/19, the inception date of the Institutional Class. Expenses of the Institutional Class are lower than those of the Investor Class. As a result, total returns shown may be lower than they would have been had the Institutional Class been in existence since 10/31/09.

6

American Beacon Tocqueville International Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

4. The MSCI EAFE Index is a market capitalization weighted index of international stock performance composed of equities from developed markets excluding the U.S. and Canada. One cannot directly invest in an index.

5. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y and Investor Class shares were 0.88%, 0.98% and 1.25%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund underperformed the Index over the twelve month period due to stock selection, while country allocation slightly offset relative performance.

Stock selections within Germany and Switzerland both contributed the most to the Fund’s relative underperformance. Stock selections in the United Kingdom partially helped performance.

From a country allocation perspective, the Fund’s underweight to Japan and Sweden added the most relative value. On the flip side, the Fund’s underweight to Australia detracted the most.

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

Top Ten Holdings (% Net Assets)
FANUC Corp.		3.5
Sanofi		3.5
Bureau Veritas S.A.		3.3
Siemens AG, Sponsored ADR		3.2
Amano Corp.		3.1
CRH PLC		3.1
Samsung Electronics Co., Ltd.		3.0
Smiths Group PLC		3.0
Danone S.A.		2.9
Makita Corp.		2.9
Total Fund Holdings	50
Sector Allocation (% Equities)
Industrials		30.5
Information Technology		19.4
Consumer Staples		15.7
Health Care		10.8
Financials		7.2
Materials		6.5
Energy		3.9
Communication Services		2.5
Consumer Discretionary		2.4
Utilities		1.1
Country Allocation (% Equities)
Japan		22.5
France		16.6
Germany		14.1
United Kingdom		11.8
Switzerland		5.0
United States		4.5
Ireland		3.3
Canada		3.2
Republic of Korea		3.1
Spain		3.0
Netherlands		2.9
Belgium		2.8
Denmark		1.8
Finland		1.6
Taiwan		1.3
China		1.1
Bermuda		0.9
Italy		0.5
Brazil		0.0	*

* Amount represents less than 0.05%

7

American Beacon Funds^SM

Expense Examples

October 31, 2019 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, Sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2019 through October 31, 2019.

Actual Expenses

The “Actual” lines of the table provide information about actual account values and actual expenses. You may use the information on this page, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = $8.60), then multiply the result by the “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) or redemption fees as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the table is 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.

8

American Beacon Funds^SM

Expense Examples

October 31, 2019 (Unaudited)

American Beacon International Equity Fund
	Beginning Account Value 5/1/2019		Ending Account Value 10/31/2019		Expenses Paid During Period 5/1/2019-10/31/2019*
Institutional Class
Actual		$1,000.00		$1,007.80		$3.74
Hypothetical**		$1,000.00		$1,021.48		$3.77
Y Class
Actual		$1,000.00		$1,007.50		$4.10
Hypothetical**		$1,000.00		$1,021.12		$4.13
Investor Class
Actual		$1,000.00		$1,006.20		$5.41
Hypothetical**		$1,000.00		$1,019.81		$5.45
Advisor Class
Actual		$1,000.00		$1,005.50		$6.12
Hypothetical**		$1,000.00		$1,019.11		$6.16
A Class
Actual		$1,000.00		$1,005.60		$5.86
Hypothetical**		$1,000.00		$1,019.36		$5.90
C Class
Actual		$1,000.00		$1,001.70		$9.49
Hypothetical**		$1,000.00		$1,015.73		$9.55
R6 Class
Actual		$1,000.00		$1,008.40		$3.34
Hypothetical**		$1,000.00		$1,021.88		$3.36

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.74%, 0.81%, 1.07%, 1.21%, 1.16%, 1.88%, and 0.66% for the Institutional, Y, Investor, Advisor, A, C, and R6 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.

American Beacon Tocqueville International Value Fund
	Beginning Account Value 5/1/2019		Ending Account Value 10/31/2019		Expenses Paid During Period 5/1/2019-10/31/2019*
Institutional Class
Actual		$1,000.00		$976.90		$4.43
Hypothetical**		$1,000.00		$1,020.72		$4.53
Y Class
Actual		$1,000.00		$976.90		$4.88
Hypothetical**		$1,000.00		$1,020.27		$4.99
Investor Class
Actual		$1,000.00		$975.60		$5.23
Hypothetical**		$1,000.00		$1,019.91		$5.35

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.89%, 0.98%, and 1.05% for the Institutional, Y, and Investor Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

9

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon International Equity Fund and American Beacon Tocqueville International Value Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of American Beacon International Equity Fund and American Beacon Tocqueville International Value Fund (collectively referred to as the “Funds”), (two of the funds constituting American Beacon Funds (the “Trust”)), including the schedules of investments, as of October 31, 2019, and the related statements of operations, changes in net assets, and the financial highlights for each of the periods indicated in the table below and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds (two of the funds constituting American Beacon Funds) at October 31, 2019, the results of their operations, changes in net assets and financial highlights for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.

Individual fund constituting the American Beacon Funds	Statement of operations	Statements of changes in net assets	Financial highlights
American Beacon International Equity Fund	For the year ended October 31, 2019	For each of the two years in the period ended October 31, 2019	For each of the five years in the period ended October 31, 2019
American Beacon Tocqueville International Value Fund	For the year ended October 31, 2019	For the year ended October 31, 2019	For the year ended October 31, 2019

The statement of changes in net assets for the period ended October 31, 2018 and the financial highlights for the four years in the period ended October 31, 2018 of American Beacon Tocqueville International Value Fund were audited by other auditors whose report dated December 21, 2018, expressed an unqualified opinion on those financial statements, financial highlights and statement of changes in net assets.

Basis for Opinion

These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2019, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received.

10

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more American Beacon investment companies since 1987.

Dallas, Texas

December 30, 2019

11

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
Australia - 0.40% (Cost $8,204,125)
Common Stocks - 0.40%
BHP Group PLC		547,291		$	11,589,645
Belgium - 0.51% (Cost $14,061,610)
Common Stocks - 0.51%
Anheuser-Busch InBev S.A.		181,115			14,551,900
Canada - 4.77%
Common Stocks - 4.77%
Barrick Gold Corp.		1,257,300			21,826,728
Canadian Imperial Bank of Commerce		87,619			7,471,331
Canadian National Railway Co.		161,900			14,480,161
Encana Corp.A		2,905,272			11,381,978
Gildan Activewear, Inc.		235,265			6,010,680
Husky Energy, Inc.		990,800			6,920,781
Manulife Financial Corp.		521,197			9,706,903
National Bank of Canada		293,802			15,173,041
Suncor Energy, Inc.		602,200			17,904,603
Wheaton Precious Metals Corp.		917,500			25,718,700
Total Common Stocks					136,594,906
Total Canada (Cost $144,432,314)					136,594,906
China - 1.13%
Common Stocks - 1.13%
China Merchants Port Holdings Co., Ltd.		2,777,068			4,352,044
China Mobile Ltd.		3,425,949			27,893,943
Total Common Stocks					32,245,987
Total China (Cost $41,692,344)					32,245,987
Denmark - 1.43%
Common Stocks - 1.43%
AP Moller - Maersk A/S, Class B		9,647			12,295,648
Carlsberg A/S, Class B		108,299			15,235,710
Vestas Wind Systems A/S		162,857			13,293,457
Total Common Stocks					40,824,815
Total Denmark (Cost $34,585,235)					40,824,815
Finland - 0.72%
Common Stocks - 0.72%
Nordea Bank Abp		1,324,472			9,688,314
Sampo OYJ, Class A		268,295			10,993,686
Total Common Stocks					20,682,000
Total Finland (Cost $27,494,371)					20,682,000
France - 11.62%
Common Stocks - 11.62%
Air France-KLMB		237,798			2,831,181
Air Liquide S.A.		115,734			15,373,201
Atos SE		43,322			3,354,167
BNP Paribas S.A.		1,049,153			54,773,317
Carrefour S.A.		612,284			10,417,337
Cie de Saint-Gobain		357,376			14,536,261
Cie Generale des Etablissements Michelin SCA		127,119			15,467,738
Credit Agricole S.A.		792,346			10,326,072

See accompanying notes

12

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
France - 11.62% (continued)
Common Stocks - 11.62% (continued)
Danone S.A.		51,667		$	4,284,935
Engie S.A.		1,289,953			21,573,069
Ingenico Group S.A.		39,485			4,216,160
Safran S.A.		149,512			23,653,585
Sanofi		543,467			50,078,343
TOTAL S.A.		846,636			44,507,359
Veolia Environnement S.A.		916,960			24,104,690
Vinci S.A.		107,572			12,069,487
Vivendi S.A.		762,804			21,234,846
Total Common Stocks					332,801,748
Total France (Cost $300,970,255)					332,801,748
Germany - 12.74%
Common Stocks - 10.37%
BASF SE		499,843			38,036,502
Bayer AG		407,568			31,628,317
Deutsche Post AG		534,094			18,912,677
Deutsche Telekom AG		2,117,029			37,230,168
E.ON SE		2,342,080			23,605,738
Fresenius Medical Care AG & Co. KGaA		299,946			21,704,286
Fresenius SE & Co. KGaA		126,634			6,655,693
Infineon Technologies AG		245,399			4,756,244
Merck KGaA		154,409			18,409,496
SAP SE		406,233			53,824,898
Siemens AG		366,808			42,292,845
Total Common Stocks					297,056,864
Preferred Stocks - 2.37%
Volkswagen AGC		356,605			67,891,050
Total Germany (Cost $338,153,693)					364,947,914
Hong Kong - 0.71%
Common Stocks - 0.71%
CK Asset Holdings Ltd.		2,368,582			16,534,235
ESR Cayman Ltd.		1,728,000			3,742,104
Total Common Stocks					20,276,339
Total Hong Kong (Cost $20,049,995)					20,276,339
Ireland - 1.40%
Common Stocks - 1.40%
Bank of Ireland Group PLC		2,397,731			11,531,101
Ryanair Holdings PLC, Sponsored ADRB		384,478			28,697,438
Total Common Stocks					40,228,539
Total Ireland (Cost $48,952,817)					40,228,539
Israel - 0.40% (Cost $10,173,508)
Common Stocks - 0.40%
Bank Leumi Le-Israel BM		1,564,809			11,392,699
Italy - 2.04%
Common Stocks - 2.04%
Eni SpA		1,443,275			21,843,414

See accompanying notes

13

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
Italy - 2.04% (continued)
Common Stocks - 2.04% (continued)
UniCredit SpA		2,880,787		$	36,524,711
Total Common Stocks					58,368,125
Total Italy (Cost $65,983,894)					58,368,125
Japan - 15.52%
Common Stocks - 15.52%
Asahi Group Holdings Ltd.		208,800			10,498,972
Astellas Pharma, Inc.		1,070,800			18,428,390
Coca-Cola Bottlers Japan Holdings, Inc.		125,000			2,855,589
Daiwa House Industry Co., Ltd.		805,554			27,861,322
Digital Garage, Inc.		140,100			4,644,486
East Japan Railway Co.		186,700			17,027,579
FANUC Corp.		146,100			29,222,706
Hitachi Ltd.		380,400			14,333,249
Kao Corp.		232,260			18,806,199
KDDI Corp.		866,600			24,066,427
Kirin Holdings Co., Ltd.		834,000			17,801,371
Matsumotokiyoshi Holdings Co., Ltd.		248,800			8,812,483
Mitsui Fudosan Co., Ltd.		1,083,500			27,902,709
Murata Manufacturing Co., Ltd.		94,200			5,114,312
Nexon Co., Ltd.B		890,500			10,348,898
Nintendo Co., Ltd.		600			222,379
Pan Pacific International Holdings Corp.		554,392			8,763,285
Seven & i Holdings Co., Ltd.		522,800			19,848,875
Shin-Etsu Chemical Co., Ltd.		125,500			14,131,679
Sompo Holdings, Inc.		361,200			14,295,479
Sumitomo Metal Mining Co., Ltd.		536,500			18,163,200
Sumitomo Mitsui Financial Group, Inc.		1,262,100			45,346,310
Suntory Beverage & Food Ltd.		215,300			9,210,908
Suzuki Motor Corp.		204,600			9,732,662
Takeda Pharmaceutical Co., Ltd.		1,448,222			52,677,248
Yamaha Corp.		301,900			14,173,840
Total Common Stocks					444,290,557
Total Japan (Cost $410,926,559)					444,290,557
Luxembourg - 0.71%
Common Stocks - 0.71%
SES S.A.		768,346			14,884,979
Tenaris S.A.		530,025			5,352,152
Total Common Stocks					20,237,131
Total Luxembourg (Cost $19,209,562)					20,237,131
Netherlands - 6.14%
Common Stocks - 6.14%
ABN AMRO Bank N.V.E		515,293			9,591,845
Akzo Nobel N.V.		157,633			14,512,953
ING Groep N.V.		3,492,414			39,449,454
NXP Semiconductors N.V.		162,300			18,450,264
Royal Dutch Shell PLC, Class A		942,310			27,256,477
Royal Dutch Shell PLC, Class B		1,537,902			44,185,259
Wolters Kluwer N.V.		302,373			22,264,354
Total Common Stocks					175,710,606
Total Netherlands (Cost $169,203,661)					175,710,606

See accompanying notes

14

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
Norway - 1.59%
Common Stocks - 1.59%
Equinor ASA		666,211		$	12,322,819
Mowi ASA		344,441			8,397,391
Telenor ASA		628,991			11,774,580
Yara International ASA		334,185			13,005,966
Total Common Stocks					45,500,756
Total Norway (Cost $44,959,469)					45,500,756
Republic of Korea - 4.51%
Common Stocks - 4.51%
Hana Financial Group, Inc.		495,880			14,363,450
KB Financial Group, Inc., ADRA		413,917			14,785,115
Samsung Electronics Co., Ltd.		1,783,231			77,248,565
SK Innovation Co., Ltd.		26,233			3,607,615
SK Telecom Co., Ltd.		94,174			19,183,668
Total Common Stocks					129,188,413
Total Republic of Korea (Cost $108,085,827)					129,188,413
Singapore - 1.66%
Common Stocks - 1.66%
DBS Group Holdings Ltd.		1,090,010			20,831,534
Singapore Telecommunications Ltd.		11,039,295			26,777,664
Total Common Stocks					47,609,198
Total Singapore (Cost $42,639,982)					47,609,198
Spain - 0.68%
Common Stocks - 0.68%
CaixaBank S.A.		3,761,646			10,761,105
Red Electrica Corp. S.A.		430,769			8,671,879
Total Common Stocks					19,432,984
Total Spain (Cost $20,543,313)					19,432,984
Sweden - 1.27%
Common Stocks - 1.27%
Assa Abloy AB, Class B		955,808			22,668,479
Epiroc AB, Class AA		1,217,191			13,690,042
Total Common Stocks					36,358,521
Total Sweden (Cost $28,022,551)					36,358,521
Switzerland - 4.70%
Common Stocks - 4.70%
ABB Ltd.		1,993,492			41,809,782
Aryzta AGA B		3,142,230			2,476,198
Cie Financiere Richemont S.A.		16,453			1,294,225
Novartis AG		667,618			58,261,768
Roche Holding AG		102,558			30,855,767
Total Common Stocks					134,697,740
Total Switzerland (Cost $124,552,794)					134,697,740
United Kingdom - 18.72%
Common Stocks - 18.71%
AstraZeneca PLC		193,510			18,802,248
Aviva PLC		2,766,291			14,877,926
BAE Systems PLC		3,389,682			25,299,935

See accompanying notes

15

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2019

	Shares			Fair Value
United Kingdom - 18.72% (continued)
Common Stocks - 18.71% (continued)
Balfour Beatty PLC			3,140,341		$	9,168,914
Barclays PLC			12,602,693			27,393,184
BP PLC			7,532,359			47,741,211
British American Tobacco PLC			725,099			25,378,728
CK Hutchison Holdings Ltd.			1,605,582			14,855,212
Cobham PLC			2,404,030			4,913,988
Compass Group PLC			357,879			9,531,177
Howden Joinery Group PLC			1,051,393			7,863,738
Informa PLC			1,521,370			15,272,979
Johnson Matthey PLC			575,392			22,881,758
Linde PLC			124,597			24,631,191
Lloyds Banking Group PLC			15,397,933			11,329,167
M&G PLCB			1,554,970			4,306,425
Micro Focus International PLC			519,319			7,130,620
Prudential PLC			2,631,511			45,966,702
RELX PLC			1,232,162			29,655,191
Rolls-Royce Holdings PLCB			2,596,270			23,844,229
RSA Insurance Group PLC			1,284,009			8,685,446
SSE PLC			950,417			15,801,462
Standard Chartered PLC			3,365,304			30,558,323
Tesco PLC			5,094,128			15,520,095
Unilever PLC			345,006			20,658,119
Vodafone Group PLC			23,535,054			47,985,180
Weir Group PLC			315,807			5,508,271
Total Common Stocks						535,561,419
Preferred Stocks - 0.01%
Rolls-Royce Holdings PLCC D H			114,347,904			148,121
Total United Kingdom (Cost $558,613,648)						535,709,540
United States - 1.76%
Common Stocks - 1.76%
Amcor PLC			999,729			9,600,042
Aon PLC			129,299			24,975,395
Ferguson PLC			186,990			15,952,447
Total Common Stocks						50,527,884
Total United States (Cost $35,126,337)						50,527,884
SHORT-TERM INVESTMENTS - 4.76%
Investment Companies - 4.55%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%F G			130,261,958			130,261,958
	Principal Amount
U.S. Treasury Obligations - 0.21%
U.S. Treasury Bill, 1.87%, Due 2/13/2020I		$	6,000,000			5,973,694
Total Short-Term Investments (Cost $136,230,238)						136,235,652
	Shares
SECURITIES LENDING COLLATERAL - 0.43% (Cost $12,296,539)
Investment Companies - 0.43%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%F G			12,296,539			12,296,539
TOTAL INVESTMENTS - 100.32% (Cost $2,765,164,641)						2,872,300,138
LIABILITIES, NET OF OTHER ASSETS - (0.32%)						(9,199,590	)
TOTAL NET ASSETS - 100.00%					$	2,863,100,548
Percentages are stated as a percent of net assets.

See accompanying notes

16

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2019

^A All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2019 (Note 9).

^B Non-income producing security.

^C A type of Preferred Stock that has no maturity date.

^D Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $148,121 or 0.01% of net assets.

^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 $9,591,845 or 0.34% of net assets. The Fund has no right to demand registration of these securities.

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

^G 7-day yield.

^H Value was determined using significant unobservable inputs.

^I This security or a piece thereof is held as segregated collateral.

ADR - American Depositary Receipt.

PLC - Public Limited Company.

Long Futures Contracts Open on October 31, 2019:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
Mini MSCI EAFE Index Futures	1,235	December 2019	$	118,003,999	$	120,857,100	$	2,853,101
			$	118,003,999	$	120,857,100	$	2,853,101

Index Abbreviations:
MSCI EAFE	MSCI Europe, Australasia, and Far East.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2019, the investments were classified as described below:

International Equity Fund	Level 1		Level 2		Level 3		Total
Assets
Foreign Common Stocks
Australia	$	11,589,645	$	-	$	-	$	11,589,645
Belgium		14,551,900		-		-		14,551,900
Canada		136,594,906		-		-		136,594,906
China		32,245,987		-		-		32,245,987
Denmark		40,824,815		-		-		40,824,815
Finland		20,682,000		-		-		20,682,000
France		332,801,748		-		-		332,801,748
Germany		297,056,864		-		-		297,056,864
Hong Kong		20,276,339		-		-		20,276,339
Ireland		40,228,539		-		-		40,228,539
Israel		11,392,699		-		-		11,392,699
Italy		58,368,125		-		-		58,368,125
Japan		444,290,557		-		-		444,290,557
Luxembourg		20,237,131		-		-		20,237,131
Netherlands		175,710,606		-		-		175,710,606
Norway		45,500,756		-		-		45,500,756
Republic of Korea		129,188,413		-		-		129,188,413
Singapore		47,609,198		-		-		47,609,198
Spain		19,432,984		-		-		19,432,984
Sweden		36,358,521		-		-		36,358,521
Switzerland		134,697,740		-		-		134,697,740
United Kingdom		535,561,419		-		-		535,561,419
Foreign Preferred Stocks
Germany		67,891,050		-		-		67,891,050
United Kingdom		-		-		148,121		148,121

See accompanying notes

17

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2019

International Equity Fund	Level 1		Level 2		Level 3		Total
Common Stocks
United States	$	50,527,884	$	-	$	-	$	50,527,884
Short-Term Investments		130,261,958		5,973,694		-		136,235,652
Securities Lending Collateral		12,296,539		-		-		12,296,539
Total Investments in Securities - Assets	$	2,866,178,323	$	5,973,694	$	148,121	$	2,872,300,138
Financial Derivative Instruments - Assets
Futures Contracts	$	2,853,101	$	-	$	-	$	2,853,101
Total Financial Derivative Instruments - Assets	$	2,853,101	$	-	$	-	$	2,853,101

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2019, there were no transfers into or out of Level 3.

The following table is a reconciliation of Level 3 assets within 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:

Security Type	Balance as of 10/31/2018		Purchases		Sales		Accrued Discounts (Premiums)		Realized Gain (Loss)			Change in Unrealized Appreciation (Depreciation)		Transfer into Level 3		Transfer out of Level 3		Balance as of 10/31/2019		Change in Unrealized Appreciation (Depreciation) at Period end**
Common Stocks	$	90,350	$	-	$	90,024	$	-	$	(1,244	)	$	918	$	-	$	-	$	-	$	-
Foreign Preferred Stocks		-		147,303		-		-		-			818		-		-		148,121		818
	$	90,350	$	147,303	$	90,024	$	-	$	(1,244	)	$	1,736	$	-	$	-	$	148,121	$	818

** Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at period end. This balance is included in the change in unrealized appreciation (depreciation) on the Statements of Operations.

The common stock and foreign preferred stock, classified as Level 3, were fair valued using the stated redemption value during the period, and the common stock was redeemed by the Fund on December 3, 2018. The securities were included in the Level 3 category due to the use of unobservable inputs that were significant to the valuation.

See accompanying notes

18

American Beacon Tocqueville International Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
Belgium - 2.69% (Cost $15,420,485)
Common Stocks - 2.69%
Groupe Bruxelles Lambert S.A.		166,712		$	16,730,327
Bermuda - 0.87% (Cost $11,865,127)
Common Stocks - 0.87%
Clear Media Ltd.		11,736,000			5,391,765
Brazil - 0.03% (Cost $8,944,958)
Common Stocks - 0.03%
Estre Ambiental, Inc.A		1,073,395			177,754
Canada - 3.06%
Common Stocks - 3.06%
MAG Silver Corp.A		50,000			493,000
Nutrien Ltd.		309,354			14,784,028
Wheaton Precious Metals Corp.B		134,300			3,769,801
Total Common Stocks					19,046,829
Total Canada (Cost $18,324,560)					19,046,829
China - 0.99% (Cost $6,176,962)
Common Stocks - 0.99%
Alibaba Group Holding Ltd., Sponsored ADRA		34,965			6,177,267
Denmark - 1.75% (Cost $15,558,289)
Common Stocks - 1.75%
ISS A/S		415,300			10,867,930
Finland - 1.55% (Cost $14,850,497)
Common Stocks - 1.55%
Nokia OYJ, Sponsored ADRB		2,647,200			9,662,280
France - 15.83%
Common Stocks - 15.83%
Bollore S.A.		3,875,304			16,769,846
Bureau Veritas S.A.		792,998			20,244,612
Danone S.A.		219,000			18,162,477
Engie S.A.		385,000			6,438,708
Sanofi		238,901			22,013,786
Sopra Steria Group		108,000			14,803,596
Total Common Stocks					98,433,025
Total France (Cost $94,301,186)					98,433,025
Germany - 13.43%
Common Stocks - 11.36%
Brenntag AG		112,300			5,636,167
Duerr AG		263,730			7,777,008
GEA Group AG		244,500			7,474,454
Infineon Technologies AG		810,169			15,702,435
Siemens AG, Sponsored ADR		344,465			19,885,964
Software AG		248,600			7,902,010
Wacker Neuson SE		366,800			6,267,288
Total Common Stocks					70,645,326
Preferred Stocks - 2.07%
Henkel AG & Co. KGaA		123,800			12,865,745
Total Germany (Cost $85,151,158)					83,511,071

See accompanying notes

19

American Beacon Tocqueville International Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
Ireland - 3.10% (Cost $18,702,566)
Common Stocks - 3.10%
CRH PLC		529,520		$	19,299,942
Italy - 0.51% (Cost $3,303,394)
Common Stocks - 0.51%
Salvatore Ferragamo SpA		168,900			3,155,266
Japan - 21.46%
Common Stocks - 21.46%
Amano Corp.		639,003			19,053,520
FANUC Corp.		107,370			21,475,989
Hitachi Ltd.		377,568			14,226,541
Hoya Corp.		144,500			12,849,648
Kao Corp.		171,200			13,862,143
Makita Corp.		522,200			17,819,307
Mitsubishi UFJ Financial Group, Inc.		2,331,800			12,303,543
Nikon Corp.		391,500			5,039,217
Nintendo Co., Ltd.		16,700			5,972,349
Rohm Co., Ltd.		90,100			7,225,354
Tokyo Broadcasting System Holdings, Inc.		226,000			3,647,727
Total Common Stocks					133,475,338
Total Japan (Cost $114,542,177)					133,475,338
Netherlands - 2.73% (Cost $17,453,092)
Common Stocks - 2.73%
Royal Dutch Shell PLC, Class B, Sponsored ADR		291,700			17,003,193
Republic of Korea - 2.98% (Cost $16,696,601)
Preferred Stocks - 2.98%
Samsung Electronics Co., Ltd.C		524,900			18,520,044
Spain - 2.83% (Cost $17,623,388)
Common Stocks - 2.83%
Applus Services S.A.		1,461,000			17,614,385
Switzerland - 4.73%
Common Stocks - 4.73%
Novartis AG, Sponsored ADR		146,150			12,779,356
Roche Holding AG		55,200			16,607,562
Total Common Stocks					29,386,918
Total Switzerland (Cost $25,509,360)					29,386,918
Taiwan - 1.25% (Cost $6,677,557)
Common Stocks - 1.25%
Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored ADR		150,000			7,744,500
United Kingdom - 11.23%
Common Stocks - 11.23%
Diageo PLC, Sponsored ADR		80,390			13,173,510
IMI PLC		740,800			9,624,742
Reckitt Benckiser Group PLC		173,100			13,372,786
Smiths Group PLC		906,545			18,947,222
Unilever N.V.		248,401			14,715,275
Total Common Stocks					69,833,535
Total United Kingdom (Cost $63,999,295)					69,833,535

See accompanying notes

20

American Beacon Tocqueville International Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
United States - 4.25%
Common Stocks - 4.25%
Aflac, Inc.		251,535		$	13,371,601
Bunge Ltd.		133,400			7,203,600
Schlumberger Ltd.		179,000			5,851,510
Total Common Stocks					26,426,711
Total United States (Cost $25,666,045)					26,426,711
SHORT-TERM INVESTMENTS - 3.99% (Cost $24,820,282)
Investment Companies - 3.99%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%D E		24,820,282			24,820,282
SECURITIES LENDING COLLATERAL - 1.48% (Cost $9,185,400)
Investment Companies - 1.48%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%D E		9,185,400			9,185,400
TOTAL INVESTMENTS - 100.74% (Cost $614,772,379)					626,463,762
LIABILITIES, NET OF OTHER ASSETS - (0.74%)					(4,627,130	)
TOTAL NET ASSETS - 100.00%				$	621,836,632
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2019 (Note 9).

^C A type of Preferred Stock that has no maturity date.

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

^E 7-day yield.

ADR - American Depositary Receipt.

PLC - Public Limited Company.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2019, the investments were classified as described below:

Tocqueville International Value Fund	Level 1		Level 2		Level 3		Total
Assets
Foreign Common Stocks
Belgium	$	16,730,327	$	-	$	-	$	16,730,327
Bermuda		5,391,765		-		-		5,391,765
Brazil		177,754		-		-		177,754
Canada		19,046,829		-		-		19,046,829
China		6,177,267		-		-		6,177,267
Denmark		10,867,930		-		-		10,867,930
Finland		9,662,280		-		-		9,662,280
France		98,433,025		-		-		98,433,025
Germany		70,645,326		-		-		70,645,326
Ireland		19,299,942		-		-		19,299,942
Italy		3,155,266		-		-		3,155,266
Japan		133,475,338		-		-		133,475,338
Netherlands		17,003,193		-		-		17,003,193
Spain		17,614,385		-		-		17,614,385
Switzerland		29,386,918		-		-		29,386,918
Taiwan		7,744,500		-		-		7,744,500
United Kingdom		69,833,535		-		-		69,833,535
Foreign Preferred Stocks
Germany		12,865,745		-		-		12,865,745
Republic of Korea		18,520,044		-		-		18,520,044

See accompanying notes

21

American Beacon Tocqueville International Value Fund^SM

Schedule of Investments

October 31, 2019

Tocqueville International Value Fund	Level 1		Level 2		Level 3		Total
Common Stocks
United States	$	26,426,711	$	-	$	-	$	26,426,711
Short-Term Investments		24,820,282		-		-		24,820,282
Securities Lending Collateral		9,185,400		-		-		9,185,400
Total Investments in Securities - Assets	$	626,463,762	$	-	$	-	$	626,463,762

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2019, there were no transfers into or out of Level 3.

See accompanying notes

22

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2019

	International Equity Fund		Tocqueville International  Value Fund
Assets:
Investments in unaffiliated securities, at fair value†§	$	2,729,741,641	$	592,458,080
Investments in affiliated securities, at fair value‡		142,558,497		34,005,682
Foreign currency, at fair value¤		28,924		–
Dividends and interest receivable		7,508,394		1,518,218
Receivable for investments sold		5,357,229		746,932
Receivable for fund shares sold		5,071,002		625,614
Receivable for tax reclaims		5,247,414		3,329,069
Receivable for expense reimbursement (Note 2)		10,693		–
Receivable for variation margin on open futures contracts (Note 5)		2,856,274		–
Prepaid expenses		67,623		18,422
Total assets		2,898,447,691		632,702,017
Liabilities:
Payable for investments purchased		13,754,374		31
Payable for fund shares redeemed		2,877,143		519,060
Payable for foreign currency, at fair value^		–		340,851
Payable for expense reimbursement (Note 2)		–		49,861
Cash due to broker for futures contracts		2,465,074		–
Management and sub-advisory fees payable (Note 2)		3,333,821		211,961
Service fees payable (Note 2)		92,216		941
Transfer agent fees payable (Note 2)		159,521		5,634
Payable upon return of securities loaned (Note 9)§		12,296,539		9,185,400
Custody and fund accounting fees payable		129,713		101,695
Professional fees payable		69,229		76,199
Trustee fees payable (Note 2)		18,994		5,318
Payable for prospectus and shareholder reports		100,028		124,067
Miscellaneous payable		-		197,103
Other liabilities		50,491		47,264
Total liabilities		35,347,143		10,865,385
Net assets	$	2,863,100,548	$	621,836,632
Analysis of net assets:
Paid-in-capital	$	2,758,322,519	$	605,515,464
Total distributable earnings (deficits)A		104,778,029		16,321,168
Net assets	$	2,863,100,548	$	621,836,632

See accompanying notes

23

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2019

	International Equity Fund		Tocqueville International  Value Fund
Shares outstanding at no par value (unlimited shares authorized):
Institutional ClassB		83,054,472		2,373,233
Y ClassB		47,661,864		14,663,491
Investor Class		12,367,210		22,766,862
Advisor Class		2,500,764		N/A
A Class		782,632		N/A
C Class		359,344		N/A
R6 Class		9,943,320		N/A
Net assets:
Institutional ClassB	$	1,499,867,401	$	37,138,368
Y ClassB	$	896,442,437	$	229,275,205
Investor Class	$	221,043,036	$	355,423,059
Advisor Class	$	45,797,068		N/A
A Class	$	13,973,709		N/A
C Class	$	6,174,460		N/A
R6 Class	$	179,802,437		N/A
Net asset value, offering and redemption price per share:
Institutional ClassB	$	18.06	$	15.65
Y ClassB	$	18.81	$	15.64
Investor Class	$	17.87	$	15.61
Advisor Class	$	18.31		N/A
A Class	$	17.85		N/A
A Class (offering price)	$	18.94		N/A
C Class	$	17.18		N/A
R6 Class	$	18.08		N/A
† Cost of investments in unaffiliated securities	$	2,622,606,144	$	580,766,697
‡ Cost of investments in affiliated securities	$	142,558,497	$	34,005,682
§ Fair value of securities on loan	$	25,633,327	$	10,772,475
¤ Cost of foreign currency	$	28,827	$	–
^ Cost of payable for foreign currency	$	–	$	(323,957	)
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.
B Class commenced operations January 22, 2019 in the Tocqueville International Value Fund (Note 1).

See accompanying notes

24

American Beacon Funds^SM

Statements of Operations

For the year ended October 31, 2019

	International Equity Fund			Tocqueville International Value Fund
Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	99,992,341		$	21,503,632
Dividend income from affiliated securities (Note 8)		2,015,977			676,573
Interest income		167,849			117,039
Income derived from securities lending (Note 9)		981,832			171,542
Total investment income		103,157,999			22,468,786
Expenses:
Management and sub-advisory fees (Note 2)		17,264,838			4,477,041
Investment advisor’s feesB		-			2,106,854
Transfer agent fees:
Institutional Class (Note 2)A		525,035			4,601
Y Class (Note 2)A		939,874			99,843
Investor Class		12,316			164,131
Advisor Class		2,647			-
A Class		4,100			-
C Class		3,793			-
R6 Class		5,934			-
Custody and fund accounting fees		799,432			283,978
Professional fees		181,753			146,004
Registration fees and expenses		149,404			72,462
Service fees (Note 2):
Investor Class		822,238			1,115,199
Advisor Class		110,520			-
A Class		23,354			-
C Class		6,893			-
Distribution fees (Note 2):
Investor ClassG		-			528,972
Advisor Class		110,578			-
A Class		33,509			-
C Class		60,744			-
Administration feesE		-			292,677
Prospectus and shareholder report expenses		415,465			220,528
Trustee fees (Note 2)		212,096			96,643
Other expenses		474,805			192,153
Total expenses		22,159,328			9,801,086
Net fees waived and expenses (reimbursed) (Note 2)		(43,265	)		(693,429	)F
Net expenses		22,116,063			9,107,657
Net investment income		81,041,936			13,361,129

See accompanying notes

25

American Beacon Funds^SM

Statements of Operations

For the year ended October 31, 2019

	International Equity Fund			Tocqueville International Value Fund
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesC	$	(71,915,300	)	$	2,997,047
Commission recapture (Note 1)		27,427			-
Foreign currency transactions		(821,458	)		(911,262	)
Forward foreign currency contracts		(4,704,460	)		-
Futures contracts		4,633,028			-
Change in net unrealized appreciation (depreciation) of:
Investments in unaffiliated securitiesD		141,491,860			11,001,044
Foreign currency transactions		87,203			(878	)
Forward foreign currency contracts		2,354,220			-
Futures contracts		5,582,029			-
Net gain from investments		76,734,549			13,085,951
Net increase in net assets resulting from operations	$	157,776,485		$	26,447,080
† Foreign taxes	$	9,602,158		$	2,131,591
A Class commenced operations January 22, 2019 in the Tocqueville International Value Fund (Note 1).
B This expense represents the Investment advisory fees paid to previous Advisor prior to the Reorganization. See Note 2.
C The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
D The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.
E This expense represents Administration fees paid to the previous Advisor prior to the Reorganization. See Note 2.
F This expense includes $684,461 of fees waived by the Tocqueville International Value Fund prior to the Reorganization. See Note 1.
G This expense represents Distribution fees paid to the previous Distributor prior to the Reorganization. See Note 2.

See accompanying notes

26

American Beacon Funds^SM

Statements of Changes in Net Assets

	International Equity Fund						Tocqueville International Value Fund
	Year Ended October 31, 2019			Year Ended October 31, 2018			Year Ended October 31, 2019			Year Ended October 31, 2018B
Increase (decrease) in net assets:
Operations:
Net investment income	$	81,041,936		$	66,429,991		$	13,361,129		$	16,561,256
Net realized gain (loss) from investments in unaffiliated securities, commission recapture, foreign currency transactions, forward foreign currency contracts, and futures contracts		(72,780,763	)		170,565,282			2,085,785			(9,208,831	)
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions, forward foreign currency contracts, and futures contracts		149,515,312			(482,846,814	)		11,000,166			(185,661,979	)
Net increase (decrease) in net assets resulting from operations		157,776,485			(245,851,541	)		26,447,080			(178,309,554	)
Distributions to shareholders:
Total retained earnings:
Institutional ClassA		(127,130,889	)		(51,858,343	)		-			-
Y ClassA		(70,121,553	)		(30,796,239	)		-			-
Investor Class		(20,019,511	)		(8,756,108	)		(12,373,617	)		(14,880,734	)
Advisor Class		(3,580,435	)		(1,516,721	)		-			-
A Class		(1,054,868	)		(482,751	)		-			-
C Class		(488,926	)		(155,808	)		-			-
R6 Class		(7,544,822	)		(351,275	)		-			-
Net distributions to shareholders		(229,941,004	)		(93,917,245	)		(12,373,617	)		(14,880,734	)
Capital share transactions (Note 11):
Proceeds from sales of shares		802,141,221			802,744,600			577,502,947			500,256,514
Reinvestment of dividends and distributions		217,857,545			86,428,547			11,224,453			13,265,360
Cost of shares redeemed		(971,911,716	)		(740,146,553	)		(1,040,964,339	)		(381,325,273	)
Net increase (decrease) in net assets from capital share transactions		48,087,050			149,026,594			(452,236,939	)		132,196,601
Net (decrease) in net assets		(24,077,469	)		(190,742,192	)		(438,163,476	)		(60,993,687	)
Net assets:
Beginning of period		2,887,178,017			3,077,920,209			1,060,000,108			1,120,993,795
End of period	$	2,863,100,548		$	2,887,178,017		$	621,836,632		$	1,060,000,108
A Class commenced operations January 22, 2019 in the Tocqueville International Value Fund (Note 1).
B This Fund was reorganized on January 18, 2019 and became a series within the American Beacon Funds Trust thereafter.

See accompanying notes

27

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Funds, each a series within the Trust, are registered under the Investment Company Act of 1940, as amended (the “Act”), as diversified, open-end management investment companies. As of October 31, 2019, the Trust consists of thirty-two active series, two of which are presented in this filing: American Beacon International Equity Fund and American Beacon Tocqueville International Value Fund (collectively, the “Funds” and each individually a “Fund”). The remaining thirty active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a Delaware corporation and a wholly-owned subsidiary of Resolute Investment Managers, Inc. (“RIM”) organized in 1986 to provide business management, advisory, administrative, and asset management consulting services to the Trust and other investors. The Manager is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). RIM is, in turn, a wholly-owned subsidiary of Resolute Acquisition, Inc., which is a wholly-owned subsidiary of Resolute Topco, Inc., a wholly-owned subsidiary of Resolute Investment Holdings, LLC (“RIH”). RIH is owned primarily by Kelso Investment Associates VIII, L.P., KEP VI, LLC and Estancia Capital Partners L.P., investment funds affiliated with Kelso & Company, L.P. (“Kelso”) or Estancia Capital Management, LLC (“Estancia”), which are private equity firms.

Fund Reorganization

On September 13, 2018, the Trust’s Board of Trustees approved a Plan of Reorganization and Termination (the “Plan”) to reorganize the Tocqueville International Value Fund (the “Target Fund” and “Predecessor Fund”) into the American Beacon Tocqueville International Value Fund (the “Acquiring Fund”), a newly-created series of the Trust (the “Reorganization”). Shareholders for the Target Fund approved the Plan at a special meeting on December 13, 2018. On January 18, 2019, pursuant to the Plan, the Target Fund transferred all its property and assets to the Acquiring Fund in exchange solely for voting shares of the Acquiring Fund and the assumption of all the Target Fund’s liabilities. The Target Fund’s shareholders received a pro rata portion of the Acquiring Fund’s shares in exchange for their shares therein and in liquidation and termination of the Target Fund. The accounting and performance history of the shares of the Target Fund was redesignated as that of the Investor Class of the Acquiring Fund. Institutional Class and Y Class commenced operations on January 22, 2019.

The Reorganization was structured to qualify as a tax-free reorganization under the Internal Revenue Code for federal income tax purposes. As such, the Target Fund’s shareholders recognized no gain or loss for federal income tax purposes. The shares, net assets, net investment income, and net unrealized appreciation (depreciation) of the investments of the Target Fund as of the close of business on January 18, 2019 were as follows:

Investor Class Shares		58,023,801
Net Assets	$	857,320,479
Net Investment Income	$	283,068
Unrealized Depreciation	$	(8,771,740	)

The Reorganization shifted the management oversight responsibility from Tocqueville Asset Management, L.P. (“Tocqueville”) to the Manager. The Manager engaged Tocqueville as the sub-advisor to the Acquiring Fund, thus maintaining the continuity of the portfolio management.

For financial reporting purposes, assets received, and shares issued by the Acquiring Fund were recorded at fair value; however, the cost basis of the investments received from the Target Fund was carried forward to align ongoing reporting of the Acquiring Fund’s realized and unrealized gains and losses with the amount distributable to shareholders for tax purposes.

28

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

Recent Accounting Pronouncements

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-08, Premium Amortization of Purchased Callable Debt Securities. The amendments in the ASU shorten the premium amortization period on a purchased callable debt security from the security’s contractual life to the earliest call date. It is anticipated that this change will enhance disclosures by reducing losses recognized when a security is called on an earlier date. This ASU is effective for fiscal years beginning after December 15, 2018. The Manager continues to evaluate the impact this ASU will have on the financial statements and other disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”). The amendments in the ASU impact disclosure requirements for fair value measurement. It is anticipated that this change will enhance the effectiveness of disclosures in the notes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and can include the entire standard or certain provisions that exclude or amend disclosures. For the year ended October 31, 2019, the Funds have chosen to adopt the standard. The adoption of this ASU guidance did not have a material impact on the financial statements and other disclosures.

Class Disclosure

On January 22, 2019, the Tocqueville International Value Fund created the Institutional and Y Classes, new classes made available for sale pursuant to the Fund’s registration statement filed with the U.S. Securities and Exchange Commission (“SEC”). Refer to the Fund’s prospectus for more details.

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	Eligible Investors	Minimum Initial Investments
Institutional	Large institutional investors - sold directly or through intermediary channels.	$	250,000
Y Class	Large institutional retirement plan investors - sold directly or through intermediary channels.	$	100,000
Investor	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500
Advisor Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrators.	$	2,500
A Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”).	$	2,500
C Class	Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC.	$	1,000
R6 Class	Large institutional retirement plan investors - sold through retirement plan sponsors.		None

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 based on 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 service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.

29

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

Significant Accounting Policies

The following is a summary of significant accounting policies, consistently followed by the Funds in preparation of the financial statements. The Funds are considered investment companies and accordingly, follow the investment company accounting and reporting guidance of the FASB Accounting Standards Codification Topic 946, Financial Services – Investment Companies, a part of Generally Accepted Accounting Principles (“U.S. GAAP”).

Security Transactions and Investment Income

Security transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.

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, net of foreign taxes, is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. Realized gains (losses) from securities sold are determined based on 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 on the Funds’ Statements of Operations.

Distributions to Shareholders

The Funds distribute most or all of its net earning and realized gains, if any, each taxable year in the form of dividends from net investment income and distributions of realized net capital gains and net gains from foreign currency translations on an annual basis. The Funds do not have a fixed dividend rate and do not guarantee that it will pay any distributions in any particular period. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Funds may designate earnings and profits distributed to shareholders on the redemption of shares.

Commission Recapture

The Funds have established brokerage commission recapture arrangements with certain brokers or dealers. If the Funds’ investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Funds. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Funds. This amount is reported with the net realized gain (loss) in the Funds’ Statements of Operations, if applicable.

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Funds are allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Funds. Expenses directly charged or attributable to the Funds will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Funds on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Funds or nature of the services performed and relative applicability to the Funds.

30

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

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 liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.

2.  Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

Prior to the Reorganization, the Advisor of the Predecessor fund received an investment advisory fee calculated daily and payable monthly, at an annual rate of 1.00% on the first $1 billion of the average daily assets and 0.75% of the average daily net assets in excess of $1 billion of the Predecessor Fund.

The Funds and the Manager are parties to a Management Agreement that obligates the Manager to provide the Funds with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of the Funds’ average daily net assets that is calculated and accrued daily according to the following schedules:

International Equity Fund

First $15 billion	0.35	%
Next $15 billion	0.325	%
Over $30 billion	0.30	%

Tocqueville International Value Fund

First $5 billion	0.35	%
Next $5 billion	0.325	%
Next $10 billion	0.30	%
Over $20 billion	0.275	%

The Trust, on behalf of the American Beacon International Equity Fund, and the Manager have entered into Investment Advisory Agreements with Causeway Capital Management LLC; Lazard Asset Management LLC; and Templeton Investment Counsel, LLC (“Sub-Advisors”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets.

The Trust, on behalf of the American Beacon Tocqueville International Value Fund, and the Manager have entered into an Investment Advisory Agreement with Tocqueville Asset Management L.P. (“Sub-Advisor”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily according to the following schedule:

First $1 billion	0.40	%
Next $1 billion	0.35	%
Over $2 billion	0.325	%

31

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

The Management and Sub-Advisory Fees paid by the Funds for the year ended October 31, 2019 were as follows:

International Equity Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	9,964,028
Sub-Advisor Fees		0.26	%		7,300,810
Total		0.61	%	$	17,264,838

Tocqueville International Value Fund

	Effective Fee Rate			Amount of Fees Paid*
Management Fees		0.35	%	$	2,099,452
Sub-Advisor Fees		0.40	%		2,377,589
Total		0.75	%	$	4,477,041

* This includes fees paid since the reorganization on January 18, 2019.

As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee of 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statements of Operations. During the year ended October 31, 2019, the Manager received securities lending fees of $100,599 and $19,356 for the securities lending activities of the International Equity Fund and Tocqueville International Value Fund, respectively.

Administration Services Agreement

Prior to the Reorganization, the Predecessor Fund paid the Advisor, pursuant to an Administrative Services Agreement, a fee computed and paid monthly at an annual rate of 0.15% on the first $400 million of the average daily net assets, 0.13% on the next $600 million of the average daily net assets; and 0.12% on all the average daily net assets over $1 billion.

Distribution Plans

Prior to the Reorganization, the Predecessor Shares incurred $528,972 of Distribution Fees. Since the Reorganization, the Shares were redesignated to the Investor Class and Distribution Fees are no longer applicable.

The Funds, except for the Advisor, A, and C Classes of the Funds, have adopted a “defensive” Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the Act, pursuant to which no separate fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the management fee received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Funds do not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

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

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American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor, Advisor, A, and C Classes of the Funds. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Funds.

Sub-Transfer Agent Fees

The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional and Y Classes of the Funds and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Funds primarily through the use of omnibus accounts on behalf of their customers who hold positions in the Funds. Certain services would have been provided by the Funds’ transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Funds’ transfer agent. Accordingly, the Funds, pursuant to Board approval, have agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the year ended October 31, 2019, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
International Equity	$	1,371,105
Tocqueville International Value		89,921

As of October 31, 2019, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
International Equity	$	128,636

As of October 31, 2019, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees*
Tocqueville International Value	$	14,584

^*  This balance is presented as a contra liability as of October 31, 2019.

Investments in Affiliated Funds

The Funds may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Funds in connection with securities lending may also be invested in the USG Select Fund. The Funds and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended October 31, 2019, the Manager earned fees on the Funds’ direct investments and securities lending collateral investments in the USG Select Fund as shown below:

33

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral Investments in USG Select Fund		Total
International Equity	$	91,589	$	37,256	$	128,845
Tocqueville International Value		30,671		6,239		36,910

Interfund Credit Facility

Pursuant to an exemptive order issued by the SEC, the Funds, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the Funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2019, the Funds did not utilize the credit facility.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the R6 Class of the International Equity Fund and the Institutional and Y Classes of the Tocqueville International Value Fund to the extent that total operating expenses exceed the Funds’ expense cap. During the year ended October 31, 2019, the Manager waived and/or reimbursed expenses as follows:

Fund	Class	Expense Cap			Reimbursed Expenses		Expenses Ineligible for Recoupment		(Recouped) Expenses		Expiration of Reimbursed Expenses
		11/1/2018 - 10/31/2019
International Equity	R6		0.66	%	$	43,265	$	–	$	–		2021 - 2022
Tocqueville International Value	Institutional(1)		0.89	%		8,968		–		–		2021 - 2022
Tocqueville International Value	Y(1)		0.99	%		–		–		–		2021 - 2022
Tocqueville International Value	Investor		1.25	%		684,461		684,461		–		2021 - 2022

⁽¹⁾  Class commenced operations January 22, 2019.

Of these amounts, $10,693 was disclosed as a receivable to the Manager for the International Equity Fund and $49,861 was disclosed as a payable to the Manager for the Tocqueville International Value Fund on the Statements of Assets and Liabilities at October 31, 2019.

The Funds have adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Funds for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years after the date of the Manager’s waiver/reimbursement and (b) does not cause the Funds’ annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. The reimbursed expenses listed above will expire in 2021-2022. The Funds

34

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

did not record a liability for potential reimbursements due to the current assessment that reimbursements are unlikely. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

Fund	Recouped Expenses		Excess Expense Carryover		Expired Expense Carryover		Expiration of Reimbursed Expenses
International Equity	$	–	$	3,001	$	–		2019 - 2020
International Equity		–		8,383		–		2020 - 2021

Sales Commissions

The Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers and it may be used to offset distribution related expenses. During the year ended October 31, 2019, RID collected $1,371 for International Equity Fund from the sale of Class A Shares. The Tocqueville International Value Fund does not offer Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Funds’ Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2019, there were no CDSC fees collected for Class A Shares of the International Equity Fund.

A CDSC of 1.00% will be deducted with respect to Class C shares of the International Equity Fund redeemed within 12 months of purchase, unless waived as discussed in the Funds’ Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2019, CDSC fees of $254 were collected for the Class C Shares of International Equity Fund. The Tocqueville International Value Fund does not offer Class C Shares.

Trustee Fees and Expenses

As compensation for their service to the Trusts, each Trustee receives an annual retainer of $120,000, plus $10,000 for each Board meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board Chair receives an additional annual retainer of $50,000 as well as a $2,500 fee each quarter for attendance at the committee meetings. The Chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each fund of the Trusts according to its respective net assets.

3.  Security Valuation and Fair Value Measurements

The price of the Fund’s shares is based on its net asset value (“NAV”) per share. The Fund’s NAV is computed by adding total assets, subtracting all the Fund’s liabilities, and dividing the result by the total number of shares outstanding.

The NAV of each class of the Fund’s shares is determined based on a pro rata allocation of the Fund’s investment income, expenses and total capital gains and losses. The Fund’s NAV per share is determined each business day as of the regular close of trading on the New York Stock Exchange (“NYSE” or “Exchange”), which is typically 4:00 p.m. Eastern Time (“ET”). However, if trading on the NYSE closes at a time other than 4:00 p.m. ET, the Fund’s NAV per share typically would still be determined as of the regular close of trading on the NYSE. The Fund does not price its shares on days that the NYSE is closed. Foreign exchanges may permit trading in foreign

35

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

securities on days when the Fund is not open for business, which may result in the value of the Fund’s portfolio investments being affected at a time when you are unable to buy or sell shares.

Equity securities, including shares of closed-end funds and exchange-traded funds (“ETFs”), are valued at the last sale price or official closing price taken from the primary exchange in which each security trades. Investments in other mutual funds are valued at the closing NAV per share on the day of valuation. Debt securities are valued at bid quotes from broker/dealers or evaluated bid prices from pricing services, who may consider a number of inputs and factors, such as prices of comparable securities, yield curves, spreads, credit ratings, coupon rates, maturity, default rates, and underlying collateral. Futures are valued based on their daily settlement prices. Exchange-traded and over-the-counter (“OTC”) options are valued at the last sale price. Options with no last sale for the day are priced at mid quote. Swaps are valued at evaluated mid prices from pricing services.

The valuation of securities traded on foreign markets and certain fixed-income securities will generally be based on prices determined as of the earlier closing time of the markets on which they primarily trade unless a significant event has occurred. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. ET.

Securities may be valued at fair value, as determined in good faith and pursuant to procedures approved by the Board, under certain limited circumstances. For example, fair value pricing will be used when market quotations are not readily available or reliable, as determined by the Manager, such as when (i) trading for a security is restricted or stopped; (ii) a security’s trading market is closed (other than customary closings); or (iii) a security has been de-listed from a national exchange. A security with limited market liquidity may require fair value pricing if the Manager determines that the available price does not reflect the security’s true market value. In addition, if a significant event that the Manager determines to affect the value of one or more securities held by the Fund occurs after the close of a related exchange but before the determination of the Fund’s NAV, fair value pricing may be used on the affected security or securities. Securities of small-capitalization companies are also more likely to require a fair value determination using these procedures because they are more thinly traded and less liquid than the securities of larger-capitalization companies. The Fund may fair value securities as a result of significant events occurring after the close of the foreign markets in which the Fund invests as described below. In addition, the Fund may invest in illiquid securities requiring these procedures.

The Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund’s 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. If the Manager determines that the last quoted prices of non-U.S. securities will, in its judgment, materially affect the value of some or all its portfolio securities, the Manager can 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. These securities are fair valued using a pricing service, using methods approved by the Board, that considers the 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 American Depositary Receipts (“ADRs”) and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. The Fund uses outside pricing services to provide 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.

Attempts to determine the fair value of securities introduce an element of subjectivity to the pricing of securities. As a result, the price of a security determined through fair valuation techniques may differ from the price quoted or published by other sources and may not accurately reflect the market value of the security when

36

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

trading resumes. If a reliable market quotation becomes available for a security formerly valued through fair valuation techniques, the Manager compares the new market quotation to the fair value price to evaluate the effectiveness of the Fund’s fair valuation procedures. If any significant discrepancies are found, the Manager may adjust the Fund’s fair valuation procedures.

Valuation Inputs

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

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

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

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

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.

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

37

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

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 the 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 the Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.

4.  Securities and Other Investments

American Depositary Receipts

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 Funds’ 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 Funds 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 Funds to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.

Common Stock

Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in

38

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or OTC. OTC stock may be less liquid than exchange-traded stock.

Foreign Securities

The Funds may invest in U.S. dollar-denominated and non-U.S. dollar denominated equity and debt securities of foreign issuers and foreign branches of U.S. banks, including negotiable certificates of deposit (“CDs”), bankers’ acceptances, and commercial paper. Foreign issuers are issuers organized and doing business principally outside the United States and include corporations, banks, non-U.S. governments, and quasi-governmental organizations. While investments in foreign securities may be intended to reduce risk by providing further diversification, such investments involve sovereign and other risks, in addition to the credit and market risks normally associated with domestic securities. These additional risks include the possibility of adverse political and economic developments (including political or social instability, nationalization, expropriation, or confiscatory taxation); the potentially adverse effects of unavailability of public information regarding issuers, different governmental supervision and regulation of financial markets, reduced liquidity of certain financial markets, and the lack of uniform accounting, auditing, and financial reporting standards or the application of standards that are different or less stringent than those applied in the United States; different laws and customs governing securities tracking; and possibly limited access to the courts to enforce the Funds’ rights as an investor.

Illiquid and Restricted Securities

Generally, an illiquid asset is an asset that the Funds reasonably expect cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Historically, illiquid securities have included securities that have not been registered under the Securities Act, securities that are otherwise not readily marketable, and repurchase agreements having a remaining maturity of longer than seven calendar days. Securities that have not been registered under the Securities Act are referred to as private placements or restricted securities and are purchased directly from the issuer or in the secondary market. These securities may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. A large institutional market exists for certain securities that are not registered under the Securities Act, including repurchase agreements, commercial paper, foreign securities, municipal securities and corporate bonds and notes. Institutional investors depend on an efficient institutional market in which the unregistered security can be readily resold or on an issuer’s ability to honor a demand for repayment. However, the fact that there are contractual or legal restrictions on resale of such investments to the general public or to certain institutions may not be indicative of their liquidity.

Limitations on resale may have an adverse effect on the marketability of portfolio securities, and the Fund might be unable to dispose of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions within seven calendar days. In addition, the Fund may get only limited information about an issuer, so it may be less able to predict a loss. The Fund also might have to register such restricted securities in order to dispose of them resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities. In recognition of the increased size and liquidity of the institutional market for unregistered securities and the importance of institutional investors in the formation of capital, the SEC adopted Rule 144A under the Securities Act. Rule 144A is designed to facilitate efficient trading among institutional investors by permitting the sale of certain unregistered securities to qualified institutional buyers. To the extent privately placed securities held by the Fund qualify under Rule 144A and an institutional market develops for those securities, the Fund likely will be able to dispose of the securities without registering them under the Securities Act. To the extent that institutional buyers become, for a time, uninterested in purchasing these securities, investing in Rule 144A securities could increase the level of the Fund’s illiquidity. The Manager or the sub-advisor, as applicable, may determine that certain securities qualified for trading under Rule 144A are liquid. Regulation S under the Securities Act permits the sale abroad of securities that are not registered for sale in the United States and includes a provision for U.S. investors, such as the Fund, to purchase such unregistered securities if certain conditions are met.

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American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

Securities sold in private placement offerings made in reliance on the “private placement” exemption from registration afforded by Section 4(a)(2) of the Securities Act and resold to qualified institutional buyers under Rule 144A under the Securities Act (“Section 4(a)(2) securities”) are restricted as to disposition under the federal securities laws, and generally are sold to institutional investors, such as the Fund, that agree they are purchasing the securities for investment and not with an intention to distribute to the public. Any resale by the purchaser must be pursuant to an exempt transaction and may be accomplished in accordance with Rule 144A. Section 4(a)(2) securities normally are resold to other institutional investors through or with the assistance of the issuer or dealers that make a market in the Section 4(a)(2) securities, thus providing liquidity.

Restricted securities outstanding during the year ended October 31, 2019 are disclosed in the Notes to the Schedules of Investments.

Other Investment Company Securities and Other Exchange-Traded Products

The Funds may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, ETFs, unit investment trusts, and other investment companies of the Trust. The Funds may invest in securities of an investment company 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, the Funds become a shareholder of that investment company. As a result, the Funds’ shareholders indirectly will bear the Funds’ proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Funds’ shareholders directly bear in connection with the Funds’ 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 Funds in their Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

Preferred Stock

A preferred stock blends the characteristics of a bond and common stock. It can offer the higher yield of a bond and has priority over common stock in equity ownership, but does not have the seniority of a bond and its participation in the issuer’s growth may be limited. Preferred stock generally has preference over common stock in the receipt of dividends and in any residual assets after payment to creditors should the issuer be dissolved. Although the dividend is set at a fixed or variable rate, in some circumstances it can be changed or omitted by the issuer. Preferred stocks are subject to the risks associated with other types of equity securities, as well as additional risks, such as credit risk, interest rate risk, potentially greater volatility and risks related to deferral, non-cumulative dividends, subordination, liquidity, limited voting rights, and special redemption rights.

5.  Financial Derivative Instruments

The Funds may utilize derivative instruments to gain market exposure on cash balances to hedge foreign currency exposure or reduce market exposure in anticipation of liquidity needs. When considering the Funds’ use of derivatives, it is important to note that the Funds do not use derivatives for the purpose of creating financial leverage.

Forward Foreign Currency Contracts

The Funds may enter into forward foreign currency contracts to hedge the exchange rate risk on investment transactions or to hedge the value of the Funds’ securities denominated in foreign currencies. Forward foreign currency contracts are valued at the forward exchange rate prevailing on the day of valuation. The Funds may also use currency contracts to increase exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another. The Funds bear the market risk that arises from changes in foreign exchange rates, and accordingly, the unrealized gain (loss) on these contracts is reflected in the accompanying financial statements. The Funds also bear the credit risk if the counterparty fails to perform under the contract.

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American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

During the year ended October 31, 2019, the International Equity Fund entered into forward foreign currency contracts primarily for hedging foreign currency fluctuations.

The Fund’s forward foreign currency contract notional dollar values fluctuate throughout the operating year as required to meet strategic requirements. The following table illustrates the average quarterly volume of forward foreign currency contracts. For the purpose of this disclosure, volume is measured by the amounts bought and sold in USD at each quarter end.

Average Forward Foreign Currency Notional Amounts Year Ended October 31, 2019
Fund	Purchased Contracts		Sold Contracts
International Equity	$	102,661,725	$	32,027,484

Futures Contracts

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

Upon entering into a futures contract, the Funds are required to set aside or deposit with a broker an amount, termed the initial margin, which typically represents a portion of the face value of the futures contract. The Funds usually reflects this amount on the Schedules 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.

During the year ended October 31, 2019, the International Equity Fund entered into futures contracts primarily for return enhancement, hedging and exposing cash to markets.

The Fund’s average 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 the purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.

Average Futures Contracts Outstanding
Fund	Year Ended October 31, 2019
International Equity		1,077

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American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

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

International Equity Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of October 31, 2019:

Derivatives not accounted for as hedging instruments

Assets:

Credit contracts

Foreign exchange contracts

Commodity contracts

Interest rate contracts

Equity contracts

Total

Receivable for variation margin from open futures contracts(2)

$

–

$

-

$

–

$

–

$

2,853,101

$

2,853,101

The effect of financial derivative instruments on the Statements of Operations as of October 31, 2019:

Derivatives not accounted for as hedging instruments

Realized gain (loss) from derivatives recognized as a result of operations

Credit contracts

Foreign exchange contracts

Commodity contracts

Interest rate contracts

Equity contracts

Total

Forward foreign currency contracts

$

–

$

(4,704,460

)

$

–

$

–

$

–

$

(4,704,460

)

Futures contracts

–

–

–

–

4,633,028

4,633,028

Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:

Credit contracts

Foreign exchange contracts

Commodity contracts

Interest rate contracts

Equity contracts

Total

Forward foreign currency contracts

$

–

$

2,354,220

$

–

$

–

$

–

$

2,354,220

Futures contracts

–

–

–

–

5,582,029

5,582,029

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

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

Master 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.

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 the report date, October 31, 2019.

International Equity Fund

Offsetting of Financial and Derivative Assets as of October 31, 2019:
	Assets			Liabilities
Futures Contracts(1)	$	2,853,101		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	2,853,101		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(2,853,101	)	$	-

42

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

	Remaining Contractual Maturity of the Agreements As of October 31, 2019
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	12,296,539	$	-	$	-	$	-	$	12,296,539
Total Borrowings	$	12,296,539	$	-	$	-	$	-	$	12,296,539
Gross amount of recognized liabilities for securities lending transactions									$	12,296,539

Tocqueville International Value Fund

	Remaining Contractual Maturity of the Agreements As of October 31, 2019
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	9,185,400	$	-	$	-	$	-	$	9,185,400
Total Borrowings	$	9,185,400	$	-	$	-	$	-	$	9,185,400
Gross amount of recognized liabilities for securities lending transactions									$	9,185,400

⁽¹⁾ Includes cumulative appreciation (depreciation) of futures contracts as reported in the Fund’s Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

6.  Principal Risks

Investing in the Funds may involve certain risks including, but not limited to, those described below.

Counterparty Risk

The Funds are subject to the risk that a party or participant to a transaction, such as a broker or derivative counterparty, will be unwilling or unable to satisfy its obligation to make timely principal, interest or settlement payments or to otherwise honor its obligations to the Funds. As a result the Funds may obtain no recovery of its investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose the Funds to greater losses in the event of a default by a counterparty.

Some of the markets in which the Funds may effect derivative transactions are OTC or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight to the same extent as are members of “exchange-based” markets. This exposes the Funds to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a credit or liquidity problem with the counterparty and the recent turbulence in the financial markets highlights the importance of being aware of counterparty risk resulting from OTC derivative transactions. The Funds are subject to the risk that a party or participant to a transaction, such as a broker or derivative counterparty, will be unwilling or unable to satisfy its obligation to make timely principal, interest or settlement payments or to otherwise honor its obligations to the Funds. As a result, the Funds may obtain no recovery of its investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose the Funds to greater losses in the event of a default by a counterparty.

Credit Risk

The Funds are subject to the risk that the issuer or guarantor of a debt security, or the counterparty to a derivatives contract or a loan, will fail to make timely payment of interest or principal or otherwise honor its obligations or default completely. A decline in the credit rating of an individual security held by the Funds may

43

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

have an adverse impact on its price and make it difficult for the Funds to sell it. Ratings represent a rating agency’s opinion regarding the quality of the security and are not a guarantee of quality. Rating agencies might not always change their credit rating on an issuer or security in a timely manner to reflect events that could affect the issuer’s ability to make timely payments on its obligations. Credit risk is typically greater for securities with ratings that are below investment grade. Since the Funds can invest significantly in high-yield investments considered speculative in nature, this risk may be substantial.

Currency Risk

The Funds may have exposure to foreign currencies by investing in securities denominated in non-U.S. currencies or in securities denominated in non-U.S. currencies, purchasing or selling forward currency exchange contracts in non-U.S. currencies, non-U.S. currency futures contracts, options on non-U.S. currencies and non-U.S. currency futures and swaps for cross-currency investments. Foreign currencies may decline in value relative to the U.S. dollar, or, in the case of hedging positions, the U.S. dollar may decline in value relative to the currency being hedged, and thereby affect a Funds’ investments in foreign (non-U.S.) currencies or in securities that trade in, and receive revenues in, or in derivatives that provide exposure to, foreign (non-U.S.) currencies. Currency exchange rates may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, the Funds’ investments in foreign currency denominated securities may reduce the returns of the Funds. Currency futures, forwards, options or swaps may not always work as intended, and in specific cases, the Funds may be worse off than if it had not used such instrument(s). There may not always be suitable hedging instruments available. Even where suitable hedging instruments are available, the Funds may choose to not hedge its currency risks.

Equity Investments Risk

Equity securities are subject to market risk. The Funds’ investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Funds to additional risk. The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company. Preferred stocks and convertible securities are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency fluctuations and political and financial instability in the home country of a particular depositary receipt or foreign stock.

Foreign Investing and Emerging Markets Risk

Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. To the extent the Funds invest a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region. In addition, the economies and political environments of emerging market countries tend to be more

44

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

unstable than those of developed countries, resulting in more volatile rates of return than the developed markets and substantially greater risk to investors. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currency and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depository or their agents goes bankrupt. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than, or in addition to, investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities, resulting in increased volatility and limited liquidity for emerging market securities; trading suspensions; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return.

Forward Foreign Currency Contracts Risk

Forward foreign currency contracts, including non-deliverable forwards, are derivative instruments pursuant to a contract with a counterparty to pay a fixed price for an agreed amount of securities or other underlying assets at an agreed date or to buy or sell a specific currency at a future date at a price set at the time of the contract. The use of forward foreign currency contracts may expose the Funds to additional risks that it would not be subject to if it invested directly in the securities or currencies underlying the forward foreign currency contract.

Futures Contracts Risk

Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Funds and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).

Market Risk

Conditions in the U.S. and many foreign economies have resulted, and may continue to result, in certain instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In some cases, traditional market participants have been less willing to make a market in some types of debt instruments, which has affected the liquidity of those instruments. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Treasury, causing the prices of these securities to rise and the yields to decline. Reduced liquidity in fixed income and credit markets may negatively affect many issuers worldwide. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations in ways that cannot necessarily be foreseen at the present time.

In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. In some countries where economic conditions are recovering, they are nevertheless perceived as still fragile. Withdrawal of government support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding, could adversely impact

45

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

the value and liquidity of certain securities. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations, including changes in tax laws. The impact of new financial regulation legislation on the markets and the practical implications for market participants may not be fully known for some time. Regulatory changes are causing some financial services companies to exit long-standing lines of business, resulting in dislocations for other market participants. In addition, political and governmental events within the U.S. and abroad, such as the U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, the threat of a federal government shutdown and threats not to increase the federal government’s debt limit, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The U.S. government has recently reduced the federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets’ expectations for changes in government policies are not borne out.

Changes in market conditions will not have the same impact on all types of securities. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact of a significant rate increase on various markets. For example, because investors may buy securities or other investments with borrowed money, a significant increase in interest rates may cause a decline in the markets for those investments. Regulators have expressed concern that rate increases may cause investors to sell fixed income securities faster than the market can absorb them, contributing to price volatility. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse.

The precise timing and the resulting impact of the United Kingdom’s departure from the European Union (the “EU”), commonly referred to as “Brexit,” are not yet known. The effect on the United Kingdom’s economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are matters to be negotiated. The outcomes may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time, which could significantly adversely affect the value of the Fund’s investments in the United Kingdom and Europe.

Market Timing Risk

Because the Funds invest in foreign securities, it is particularly subject to the risk of market timing activities. Frequent trading by Fund shareholders poses risks to other shareholders in the Funds, including (i) the dilution of the Funds’ NAV, (ii) an increase in the Funds’ expenses, and (iii) interference with the portfolio manager’s ability to execute efficient investment strategies. Because of specific securities in which the Funds may invest, it could be subject to the risk of market timing activities by shareholders. Some examples of these types of securities are high-yield and foreign securities. The limited trading activity of some high-yield securities may result in market prices that do not reflect the true market value of these securities. The Funds generally prices foreign securities using their closing prices from the foreign markets in which they trade, typically prior to the Funds’ calculation of its NAV. These prices may be affected by events that occur after the close of a foreign market but before the Funds price its shares. In such instances, the Funds may fair value high yield and foreign securities. However, some investors may engage in frequent short-term trading in the Funds to take advantage of any price differentials that may be reflected in the NAV of the Funds’ shares. While the Manager monitors trading in the Funds, there is no guarantee that it can detect all market timing activities.

46

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

Multiple Sub-Advisor Risk

The Manager may allocate the Funds’ assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Funds’ assets. To a significant extent, the Funds’ performance will depend on the success of the Manager in allocating the Funds’ assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-advisor manages its allocated portion of the Funds independently from another sub-advisor, the same security may be held in different portions of the Funds, or may be acquired for one portion of the Funds at a time when a sub-advisor to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Funds’ holdings. Similarly, under some market conditions, one sub-advisor may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-advisor believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Funds. Because each sub-advisor directs the trading for its own portion of the Funds, and does not aggregate its transactions with those of the other sub-advisors, the Funds may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Funds’ assets among the Funds’ sub-advisors in a manner that it believes is consistent with achieving the Funds’ investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Funds’ assets among sub-advisors due to factors that could impact the Manager’s revenues and profits.

Other Investment Companies Risk

The Funds may invest in shares of other registered investment companies, including money market funds, exchange-traded funds (“ETFs”). To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses, including for example, advisory and administrative fees, charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Fund’s investments in money market funds are subject to interest rate risk, credit risk, and market risk. The Funds must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Fund’s investment may decline, adversely affecting the Fund’s performance. ETFs are subject to the following risks that do not apply to conventional funds: (1) the market price of an ETF’s shares may trade at a discount or premium to its NAV; (2) an active trading market for an ETF’s shares may not develop or be maintained; or (3) trading of an ETF’s shares may be halted if the listing exchange’s officials deem such action appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally. An ETF that tracks an index may not precisely replicate the returns of its benchmark index. To the extent the Funds invest in other investment companies that invest in equity securities, fixed-income securities and/or foreign securities, or that track an index, the Funds are subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject. ETFs have expenses associated with their operation, typically including advisory fees. For example, the Funds’ investments in money market funds are subject to interest rate risk, credit risk, and market risk.

Securities Lending Risk

A Fund may lend its portfolio securities to brokers, dealers and financial institutions to seek income. There is a risk that a borrower may default on its obligations to return loaned securities; however, a Fund’s securities lending agent indemnifies the Fund against that risk. There is a risk that the assets of a Fund’s securities lending agent may be insufficient to satisfy any contractual indemnification requirements to the Fund. Borrowers of a Fund’s securities typically provide collateral in the form of cash that is reinvested in securities. A Fund will be responsible for the risks associated with the investment of cash collateral, including any collateral invested in an affiliated money market fund. A Fund may lose money on its investment of cash collateral or may fail to earn sufficient income on its investment to meet obligations to the borrower. In addition, delays may occur in the recovery of securities from borrowers, which could interfere with a Fund’s ability to vote proxies or to settle

47

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

transactions and there is the risk of possible loss of rights in the collateral should the borrower fail financially. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.

Valuation Risk

This is the risk that a Fund has valued a security at a price different from the price at which it can be sold. This risk may be especially pronounced for investments, such as derivatives, which may be illiquid or which may become illiquid and for securities that trade in relatively thin markets and/or markets that experience extreme volatility. If market conditions make it difficult to value certain investments, a Fund may value these investments using more subjective methods, such as fair-value methodologies. Investors who purchase or redeem Fund shares on days when a Fund is holding fair-valued securities may receive fewer or more shares, or lower or higher redemption proceeds, than they would have received if the Fund had not fair-valued the securities or had used a different valuation methodology. The value of foreign securities, certain fixed-income securities and currencies, as applicable, may be materially affected by events after the close of the markets on which they are traded, but before a Fund determines its NAV per share. The Fund’s ability to value its investments in an accurate and timely manner may be impacted by technological issues and/or errors by third-party service providers, such as pricing services or accounting agents.

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 distributions 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 unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2019 remain subject to examination by the Internal Revenue Service. If applicable, the Funds recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statements of Operations.

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 (depreciation), as applicable, as the income is earned or capital gains are recorded.

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 tax character of distributions paid were as follows:

	International Equity Fund				Tocqueville International Value Fund
	Year Ended October 31, 2019		Year Ended October 31, 2018		Year Ended October 31, 2019		Year Ended October 31, 2018
Distributions paid from:
Ordinary income*
Institutional Class	$	34,537,408	$	33,083,270	$	-	$	-
Y Class		18,518,557		19,410,963		-		-
Investor Class		4,755,772		5,187,972		12,373,617		11,212,289
Advisor Class		791,389		904,837		-		-
A Class		242,775		277,117		-		-
C Class		73,960		71,451		-		-
R6 Class		2,075,537		225,362		-		-

48

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

	International Equity Fund				Tocqueville International Value Fund
	Year Ended October 31, 2019		Year Ended October 31, 2018		Year Ended October 31, 2019		Year Ended October 31, 2018
Long-term capital gains
Institutional Class	$	92,593,481	$	18,775,073	$	-	$	-
Y Class		51,602,996		11,385,276		-		-
Investor Class		15,263,739		3,568,136		-		3,668,445
Advisor Class		2,789,046		611,884		-		-
A Class		812,093		205,634		-		-
C Class		414,966		84,357		-		-
R6 Class		5,469,285		125,913		-		-
Total distributions paid	$	229,941,004	$	93,917,245	$	12,373,617	$	14,880,734

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

As of October 31, 2019 the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
International Equity	$	2,784,288,995	$	281,532,547	$	(193,543,869	)	$	87,988,678
Tocqueville International Value		617,210,711		46,352,615		(37,194,512	)		9,158,103

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences		Distributable Earnings
International Equity	$	87,988,678	$	75,079,811	$	-	$	(58,290,462	)	$	2	$	104,778,029
Tocqueville International Value		9,158,103		11,863,415		-		(4,700,350	)		-		16,321,168

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains (losses) on certain derivative instruments, and the realization for tax purposes of unrealized gains from passive foreign investment companies.

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

Accordingly, the following amounts represent current year permanent differences derived from Section 732 basis adjustments as of October 31, 2019:

Fund	Paid-In-Capital		Distributable Earnings/(Deficits)
International Equity	$	152,597	$	(152,597	)
Tocqueville International Value		-		-

Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the 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.

49

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

As of October 31, 2019, the Funds had the following capital loss carryforwards:

Fund	Short-Term Capital Loss Carryforwards		Long-Term Capital Loss Carryforwards
International Equity	$	26,829,245	$	31,461,217
Tocqueville International Value		4,700,350		-

Tocqueville International Value Fund utilized $2,557,991 in short-term capital loss carryforwards during the year ending October 31, 2019.

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2019 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
International Equity	$	973,870,336	$	1,116,489,726
Tocqueville International Value		268,562,985		688,382,419

A summary of the Funds’ transactions in the USG Select Fund for the year ended October 31, 2019 were as follows:

Fund	Type of Transaction	October 31, 2018 Shares/Fair Value		Purchases		Sales		October 31, 2019 Shares/Fair Value		Dividend Income
International Equity	Direct	$	78,615,200	$	962,961,523	$	911,314,765	$	130,261,958	$	2,015,977
International Equity	Securities Lending		43,093,443		960,702,674		991,499,578		12,296,539		N/A
Tocqueville International Value	Direct		-		325,084,882		300,264,600		24,820,282		676,573
Tocqueville International Value	Securities Lending		-		167,528,949		158,343,549		9,185,400		N/A

9.  Securities Lending

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

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

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

While securities are on loan, the Funds continue to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities,

50

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Funds would be subject to on the dividend.

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

As of October 31, 2019, the value of outstanding securities on loan and the value of collateral were as follows:

Fund	Market Value of Securities on Loan		Cash Collateral Received		Non-Cash Collateral Received		Total Collateral Received
International Equity	$	25,633,327	$	12,296,539	$	15,226,887	$	27,523,426
Tocqueville International Value		10,772,475		9,185,400		1,834,586		11,019,986

Cash collateral is listed on the Funds’ Schedules of Investments and is shown on the Statements of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statements of Operations.

Non-cash collateral received by the Funds may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Funds’ Schedules of Investments or Statements of Assets and Liabilities.

10.  Borrowing Arrangements

Effective November 15, 2018 (the “Effective Date”), the Funds, along with certain other funds managed by the Manager (“Participating Funds”), entered into a committed revolving line of credit (the “Committed Line”) agreement with State Street Bank and Trust Company (the “Bank”) to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Committed Line is $250 million with interest at a rate equal to the higher of (a) one-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on amounts borrowed. Each of the Participating Funds paid a closing fee of $100,000 on the Effective Date and a quarterly commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 14, 2019, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

On the Effective Date, the Funds, along with certain other Participating Funds managed by the Manager, also entered into an uncommitted discretionary demand revolving line of credit (the “Uncommitted Line”) agreement with the Bank to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Uncommitted Line is $50 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on each outstanding loan. Each of the Participating Funds paid a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 14, 2019 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

The Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Other expenses” on the Statements of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.

During the year ended October 31, 2019, the Funds did not utilize this facility.

51

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

11.  Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Funds:

	Institutional Class
	Year Ended October 31,
	2019						2018
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		24,359,431		$	419,653,044			25,895,144		$	534,557,653
Reinvestment of dividends		7,634,480			120,930,168			2,331,173			48,325,212
Shares redeemed		(35,164,350	)		(612,015,555	)		(20,735,988	)		(420,683,891	)
Net increase (decrease) in shares outstanding		(3,170,439	)	$	(71,432,343	)		7,490,329		$	162,198,974
	Y Class
	Year Ended October 31,
	2019						2018
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		8,988,272		$	160,621,998			7,511,577		$	160,616,651
Reinvestment of dividends		3,927,273			64,839,285			1,249,691			26,893,341
Shares redeemed		(11,858,802	)		(213,196,249	)		(9,727,486	)		(207,013,204	)
Net increase (decrease) in shares outstanding		1,056,743		$	12,265,034			(966,218	)	$	(19,503,212	)
	Investor Class
	Year Ended October 31,
	2019						2018
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		1,642,389		$	28,386,833			1,848,441		$	37,668,754
Reinvestment of dividends		1,262,316			19,843,606			423,698			8,719,712
Shares redeemed		(4,080,763	)		(69,925,950	)		(4,046,440	)		(82,887,269	)
Net (decrease) in shares outstanding		(1,176,058	)	$	(21,695,511	)		(1,774,301	)	$	(36,498,803	)
	Advisor Class
	Year Ended October 31,
	2019						2018
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		562,306		$	9,859,157			522,085		$	10,866,488
Reinvestment of dividends		221,918			3,579,533			72,002			1,516,353
Shares redeemed		(849,750	)		(15,010,142	)		(662,602	)		(13,941,921	)
Net (decrease) in shares outstanding		(65,526	)	$	(1,571,452	)		(68,515	)	$	(1,559,080	)
	A Class
	Year Ended October 31,
	2019						2018
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		285,160		$	4,957,603			341,544		$	6,990,871
Reinvestment of dividends		65,896			1,035,879			22,967			472,205
Shares redeemed		(332,804	)		(5,767,829	)		(464,462	)		(9,545,785	)
Net increase (decrease) in shares outstanding		18,252		$	225,653			(99,951	)	$	(2,082,709	)
	C Class
	Year Ended October 31,
	2019						2018
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		87,222		$	1,451,278			98,798		$	1,957,866
Reinvestment of dividends		30,807			468,881			7,541			150,449
Shares redeemed		(130,112	)		(2,138,130	)		(117,307	)		(2,311,646	)
Net (decrease) in shares outstanding		(12,083	)	$	(217,971	)		(10,968	)	$	(203,331	)

52

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2019

	R6 Class
	Year Ended October 31,
	2019						2018
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		9,972,905		$	177,211,308			2,465,662		$	50,086,317
Reinvestment of dividends		451,747			7,160,193			16,937			351,275
Shares redeemed		(3,082,577	)		(53,857,861	)		(186,126	)		(3,762,837	)
Net increase in shares outstanding		7,342,075		$	130,513,640			2,296,473		$	46,674,755
	Institutional Class
	January 22, 2019A to October 31, 2019
Tocqueville International Value Fund	Shares			Amount
Shares sold		2,912,811		$	45,150,396
Shares redeemed		(539,578	)		(8,170,774	)
Net increase in shares outstanding		2,373,233		$	36,979,622
	Y Class
	January 22, 2019A to October 31, 2019
Tocqueville International Value Fund	Shares			Amount
Shares sold		24,079,914		$	375,416,084
Shares redeemed		(9,416,423	)		(141,613,817	)
Net increase in shares outstanding		14,663,491		$	233,802,267
	Investor Class
	Year Ended October 31,
	2019						2018
Tocqueville International Value Fund	Shares			Amount			Shares			Amount
Shares sold		10,601,835		$	156,936,467			28,716,655		$	500,256,514
Reinvestment of dividends		783,284			11,224,453			766,784			13,265,360
Shares redeemed		(59,020,135	)		(891,179,748	)		(22,853,917	)		(381,325,273	)
Net increase (decrease) in shares outstanding		(47,635,016	)	$	(723,018,828	)		6,629,522		$	132,196,601

^A Commencement of operations.

12.  Subsequent Events

At meetings held on November 11-12, 2019, the Board of the Trust approved the termination of Templeton Investment Counsel, LLC and appointment of American Century Investment Management, Inc. on behalf of the American Beacon International Equity Fund, effective on or about January 15, 2020.

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no additional material events that would require disclosure in the Funds’ financial statements through this date.

53

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional ClassA
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	18.71		$	20.88		$	17.41		$	18.79		$	19.51
Income (loss) from investment operations:
Net investment income		0.55			0.44			0.39			0.29			0.35
Net gains (losses) on investments (both realized and unrealized)		0.34			(1.95	)		3.51			(1.24	)		(0.55	)
Total income (loss) from investment operations		0.89			(1.51	)		3.90			(0.95	)		(0.20	)
Less distributions:
Dividends from net investment income		(0.40	)		(0.35	)		(0.43	)		(0.27	)		(0.52	)
Distributions from net realized gains		(1.14	)		(0.31	)		-			(0.16	)		-
Total distributions		(1.54	)		(0.66	)		(0.43	)		(0.43	)		(0.52	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	B
Net asset value, end of period	$	18.06		$	18.71		$	20.88		$	17.41		$	18.79
Total returnC		5.94	%		(7.55	)%		22.94	%		(5.07	)%		(0.99	)%
Ratios and supplemental data:
Net assets, end of period	$	1,499,867,401		$	1,613,462,237		$	1,644,165,106		$	1,450,052,040		$	1,037,148,821
Ratios to average net assets:
Expenses, before reimbursements		0.73	%		0.73	%		0.73	%		0.69	%		0.70	%
Expenses, net of reimbursements		0.73	%		0.73	%		0.73	%		0.69	%		0.69	%
Net investment income, before expense reimbursements		2.93	%		2.17	%		2.01	%		2.22	%		1.93	%
Net investment income, net of reimbursements		2.93	%		2.17	%		2.01	%		2.22	%		1.94	%
Portfolio turnover rate		36	%		29	%		32	%		25	%		33	%

^A  On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class.

^B  Amount represents less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

54

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	19.42		$	21.64		$	18.03		$	19.46		$	20.21
Income (loss) from investment operations:
Net investment income		0.54			0.46			0.38			0.41			0.35
Net gains (losses) on investments (both realized and unrealized)		0.37			(2.04	)		3.65			(1.40	)		(0.57	)
Total income (loss) from investment operations		0.91			(1.58	)		4.03			(0.99	)		(0.22	)
Less distributions:
Dividends from net investment income		(0.38	)		(0.33	)		(0.42	)		(0.28	)		(0.53	)
Distributions from net realized gains		(1.14	)		(0.31	)		-			(0.16	)		-
Total distributions		(1.52	)		(0.64	)		(0.42	)		(0.44	)		(0.53	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	A
Net asset value, end of period	$	18.81		$	19.42		$	21.64		$	18.03		$	19.46
Total returnB		5.83	%		(7.58	)%		22.84	%		(5.14	)%		(1.06	)%
Ratios and supplemental data:
Net assets, end of period	$	896,442,437		$	904,847,058		$	1,029,629,647		$	820,596,038		$	587,949,806
Ratios to average net assets:
Expenses, before reimbursements		0.80	%		0.80	%		0.80	%		0.77	%		0.77	%
Expenses, net of reimbursements		0.80	%		0.80	%		0.80	%		0.77	%		0.77	%
Net investment income, before expense reimbursements		2.87	%		2.10	%		1.95	%		2.43	%		1.87	%
Net investment income, net of reimbursements		2.87	%		2.10	%		1.95	%		2.43	%		1.87	%
Portfolio turnover rate		36	%		29	%		32	%		25	%		33	%

^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 U.S. GAAP 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.

See accompanying notes

55

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	18.52		$	20.67		$	17.24		$	18.60		$	19.32
Income (loss) from investment operations:
Net investment income		0.49			0.41			0.35			0.34			0.31
Net gains (losses) on investments (both realized and unrealized)		0.33			(1.97	)		3.45			(1.33	)		(0.57	)
Total income (loss) from investment operations		0.82			(1.56	)		3.80			(0.99	)		(0.26	)
Less distributions:
Dividends from net investment income		(0.33	)		(0.28	)		(0.37	)		(0.21	)		(0.46	)
Distributions from net realized gains		(1.14	)		(0.31	)		-			(0.16	)		-
Total distributions		(1.47	)		(0.59	)		(0.37	)		(0.37	)		(0.46	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	A
Net asset value, end of period	$	17.87		$	18.52		$	20.67		$	17.24		$	18.60
Total returnB		5.55	%		(7.86	)%		22.50	%		(5.38	)%		(1.35	)%
Ratios and supplemental data:
Net assets, end of period	$	221,043,036		$	250,804,403		$	316,589,769		$	334,895,337		$	342,720,411
Ratios to average net assets:
Expenses, before reimbursements		1.05	%		1.06	%		1.07	%		1.06	%		1.03	%
Expenses, net of reimbursements		1.05	%		1.06	%		1.07	%		1.06	%		1.03	%
Net investment income, before expense reimbursements		2.59	%		1.83	%		1.69	%		1.95	%		1.60	%
Net investment income, net of reimbursements		2.59	%		1.83	%		1.69	%		1.95	%		1.60	%
Portfolio turnover rate		36	%		29	%		32	%		25	%		33	%

^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 U.S. GAAP 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.

See accompanying notes

56

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor ClassA
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	18.93		$	21.15		$	17.62		$	19.01		$	19.76
Income (loss) from investment operations:
Net investment income		0.43			0.36			0.23			0.35			0.38
Net gains (losses) on investments (both realized and unrealized)		0.39			(1.99	)		3.64			(1.37	)		(0.68	)
Total income (loss) from investment operations		0.82			(1.63	)		3.87			(1.02	)		(0.30	)
Less distributions:
Dividends from net investment income		(0.30	)		(0.28	)		(0.34	)		(0.21	)		(0.45	)
Distributions from net realized gains		(1.14	)		(0.31	)		-			(0.16	)		-
Total distributions		(1.44	)		(0.59	)		(0.34	)		(0.37	)		(0.45	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	B
Net asset value, end of period	$	18.31		$	18.93		$	21.15		$	17.62		$	19.01
Total returnC		5.38	%		(7.99	)%		22.38	%		(5.40	)%		(1.51	)%
Ratios and supplemental data:
Net assets, end of period	$	45,797,068		$	48,571,916		$	55,715,606		$	23,692,313		$	22,912,069
Ratios to average net assets:
Expenses, before reimbursements		1.20	%		1.20	%		1.20	%		1.19	%		1.16	%
Expenses, net of reimbursements		1.20	%		1.20	%		1.20	%		1.19	%		1.16	%
Net investment income, before expense reimbursements		2.40	%		1.70	%		1.51	%		1.87	%		1.55	%
Net investment income, net of reimbursements		2.40	%		1.70	%		1.51	%		1.87	%		1.55	%
Portfolio turnover rate		36	%		29	%		32	%		25	%		33	%

^A  On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class.

^B  Amount represents less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

57

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	18.50		$	20.63		$	17.23		$	18.59		$	19.32
Income (loss) from investment operations:
Net investment income		0.45			0.38			0.30			0.32			0.31
Net gains (losses) on investments (both realized and unrealized)		0.36			(1.95	)		3.48			(1.30	)		(0.59	)
Total income (loss) from investment operations		0.81			(1.57	)		3.78			(0.98	)		(0.28	)
Less distributions:
Dividends from net investment income		(0.32	)		(0.25	)		(0.38	)		(0.22	)		(0.45	)
Distributions from net realized gains		(1.14	)		(0.31	)		-			(0.16	)		-
Total distributions		(1.46	)		(0.56	)		(0.38	)		(0.38	)		(0.45	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	A
Net asset value, end of period	$	17.85		$	18.50		$	20.63		$	17.23		$	18.59
Total returnB		5.46	%		(7.89	)%		22.43	%		(5.34	)%		(1.42	)%
Ratios and supplemental data:
Net assets, end of period	$	13,973,709		$	14,141,551		$	17,829,657		$	18,673,142		$	10,747,749
Ratios to average net assets:
Expenses, before reimbursements		1.15	%		1.08	%		1.12	%		1.07	%		1.08	%
Expenses, net of reimbursements		1.15	%		1.08	%		1.12	%		1.07	%		1.08	%
Net investment income, before expense reimbursements		2.50	%		1.80	%		1.65	%		1.94	%		1.55	%
Net investment income, net of reimbursements		2.50	%		1.80	%		1.65	%		1.94	%		1.55	%
Portfolio turnover rate		36	%		29	%		32	%		25	%		33	%

^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 U.S. GAAP 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.

See accompanying notes

58

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	17.84		$	19.93		$	16.73		$	18.09		$	18.83
Income (loss) from investment operations:
Net investment income		0.29			0.22			0.17			0.18			0.16
Net gains (losses) on investments (both realized and unrealized)		0.37			(1.87	)		3.36			(1.28	)		(0.56	)
Total income (loss) from investment operations		0.66			(1.65	)		3.53			(1.10	)		(0.40	)
Less distributions:
Dividends from net investment income		(0.18	)		(0.13	)		(0.33	)		(0.10	)		(0.34	)
Distributions from net realized gains		(1.14	)		(0.31	)		-			(0.16	)		-
Total distributions		(1.32	)		(0.44	)		(0.33	)		(0.26	)		(0.34	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	A
Net asset value, end of period	$	17.18		$	17.84		$	19.93		$	16.73		$	18.09
Total returnB		4.69	%		(8.52	)%		21.50	%		(6.12	)%		(2.12	)%
Ratios and supplemental data:
Net assets, end of period	$	6,174,460		$	6,625,329		$	7,622,425		$	2,945,246		$	3,899,081
Ratios to average net assets:
Expenses, before reimbursements		1.87	%		1.81	%		1.88	%		1.85	%		1.82	%
Expenses, net of reimbursements		1.87	%		1.81	%		1.88	%		1.85	%		1.83	%
Net investment income, before expense reimbursements		1.73	%		1.08	%		0.96	%		1.12	%		0.77	%
Net investment income, net of reimbursements		1.73	%		1.08	%		0.96	%		1.12	%		0.77	%
Portfolio turnover rate		36	%		29	%		32	%		25	%		33	%

^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 U.S. GAAP 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.

See accompanying notes

59

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R6 Class
	Year Ended October 31,						February 28, 2017A to October 31,
	2019			2018			2017
Net asset value, beginning of period	$	18.73		$	20.89		$	17.80
Income (loss) from investment operations:
Net investment income		0.51			0.39			0.08
Net gains (losses) on investments (both realized and unrealized)		0.39			(1.88	)		3.01
Total income (loss) from investment operations		0.90			(1.49	)		3.09
Less distributions:
Dividends from net investment income		(0.41	)		(0.36	)		-
Distributions from net realized gains		(1.14	)		(0.31	)		-
Total distributions		(1.55	)		(0.67	)		-
Net asset value, end of period	$	18.08		$	18.73		$	20.89
Total returnB		5.98	%		(7.47	)%		17.36	%C
Ratios and supplemental data:
Net assets, end of period	$	179,802,437		$	48,725,523		$	6,367,999
Ratios to average net assets:
Expenses, before reimbursements		0.70	%		0.70	%		0.89	%D
Expenses, net of reimbursements		0.66	%		0.66	%		0.66	%D
Net investment income, before expense reimbursements		3.09	%		2.11	%		1.63	%D
Net investment income, net of reimbursements		3.13	%		2.15	%		1.85	%D
Portfolio turnover rate		36	%		29	%		32	%E

^A  Commencement of operations.

^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 U.S. GAAP 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 28, 2017 through October 31, 2017 and is not annualized.

See accompanying notes

60

American Beacon Tocqueville International Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	January 22, 2019A to October 31, 2019
Net asset value, beginning of period	$	14.78
Income from investment operations:
Net investment income		0.21
Net gains on investments (both realized and unrealized)		0.66
Total income (loss) from investment operations		0.87
Net asset value, end of period	$	15.65
Total returnB		5.89	%C
Ratios and supplemental data:
Net assets, end of period	$	37,138,368
Ratios to average net assets:
Expenses, before reimbursements		0.93	%D
Expenses, net of reimbursements		0.89	%D
Net investment income, before expense reimbursements		2.18	%D
Net investment income, net of reimbursements		2.22	%D
Portfolio turnover rate		35	%E

^A  Commencement of operations.

^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 U.S. GAAP 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 is for the period ended herein.

See accompanying notes

61

American Beacon Tocqueville International Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	January 22, 2019A to October 31, 2019
Net asset value, beginning of period	$	14.78
Income from investment operations:
Net investment income		0.23
Net gains on investments (both realized and unrealized)		0.63
Total income (loss) from investment operations		0.86
Net asset value, end of period	$	15.64
Total returnB		5.82	%C
Ratios and supplemental data:
Net assets, end of period	$	229,275,205
Ratios to average net assets:
Expenses, before reimbursements		0.98	%D
Expenses, net of reimbursements		0.98	%D
Net investment income, before expense reimbursements		2.10	%D
Net investment income, net of reimbursements		2.10	%D
Portfolio turnover rate		35	%E

^A  Commencement of operations.

^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 U.S. GAAP 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 is for the period ended herein.

See accompanying notes

62

American Beacon Tocqueville International Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	15.06		$	17.58		$	14.44		$	14.59		$	14.48
Income (loss) from investment operations:
Net investment income		0.40			0.24	A		0.14	A		0.14	A		0.15	A
Net gains (losses) on investments (both realized and unrealized)		0.34			(2.53	)		3.23			0.14			0.80
Total income (loss) from investment operations		0.74			(2.29	)		3.37			0.28			0.95
Less distributions:
Dividends from net investment income		(0.19	)		(0.17	)		(0.15	)		(0.25	)		(0.32	)
Distributions from net realized gains		-			(0.06	)		(0.08	)		(0.18	)		(0.52	)
Total distributions		(0.19	)		(0.23	)		(0.23	)		(0.43	)		(0.84	)
Redemption fees added to beneficial interests		-			-			-			-			0.00	B
Net asset value, end of period	$	15.61		$	15.06		$	17.58		$	14.44		$	14.59
Total returnC		5.03	%		(13.20	)%		23.70	%		2.00	%		7.20	%
Ratios and supplemental data:
Net assets, end of period	$	355,423,059		$	1,060,000,108		$	1,120,993,795		$	525,808,058		$	333,761,762
Ratios to average net assets:
Expenses, before reimbursements		1.29	%		1.48	%		1.53	%		1.58	%		1.57	%
Expenses, net of reimbursements		1.18	%		1.25	%		1.25	%		1.25	%		1.25	%
Net investment income, before expense reimbursements		1.42	%		1.09	%		0.73	%		0.90	%		0.71	%
Net investment income, net of reimbursements		1.53	%		1.32	%		1.01	%		1.23	%		1.03	%
Portfolio turnover rate		35	%		25	%		22	%		26	%		42	%

^A  Net investment income per share is calculated using the ending balance prior to consideration or adjustment for permanent book-to-tax differences.

^B  Amount represents less than $0.01 per share.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

63

American Beacon Funds^SM

Federal Tax Information

October 31, 2019 (Unaudited)

Certain tax information regarding the Funds is required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2019. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2019.

The Funds designated the following items with regard to distributions paid during the fiscal year ended October 31, 2019. 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:
International Equity		N/A
Tocqueville International Value		N/A
Qualified Dividend Income:
International Equity		100	%
Tocqueville International Value		100	%
Long-Term Capital Gain Distributions:
International Equity	$	168,945,606
Tocqueville International Value		-
Short-Term Capital Gain Distributions:
International Equity	$	2,971,370
Tocqueville International Value		-
Foreign tax credit:
International Equity	$	9,599,774
Tocqueville International Value		1,847,761

The foreign tax credits for International Equity and Tocqueville International Value are based on foreign source income of $109,594,494 and $23,112,399, respectively for the year ended October 31, 2019.

Shareholders will receive notification in January 2020 of the applicable tax information necessary to prepare their 2019 income tax returns.

64

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Renewal and Approval of Management Agreement and Investment Advisory Agreements

At in-person meetings held on May 9, 2019 and June 4-5, 2019 (collectively, the “Meetings”), the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 5, 2019 meeting, approved the renewal of:

(1) the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon International Equity Fund (“Fund”); and

(2) the Investment Advisory Agreements among the Manager, the Trust, on behalf of the Fund, and each of Causeway Capital Management LLC (“Causeway”), Lazard Asset Management LLC (“Lazard”) and Templeton Investment Counsel, LLC (“Templeton”) (each, a “subadvisor” and collectively, the “subadvisors”).

The Management Agreement and the Investment Advisory Agreements are referred to herein individually as an “Agreement” and collectively as the “Agreements.” In preparation for its consideration of the renewal of the Agreements, the Board undertook steps to gather and consider information furnished by the Manager, the subadvisors, Broadridge, Inc. (“Broadridge”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and the subadvisors.

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Fund as well as information from the Manager and the subadvisors. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Board received and evaluated such information as they deemed necessary. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to the Fund.

The Board noted that the Manager provides management and administrative services to the Fund pursuant to the Management Agreement. The Board considered that many mutual funds have separate contracts governing each type of service and observed that, with respect to such mutual funds, the actual management fee rates provided by Broadridge for peer group funds reflect the combined advisory and administrative expenses, reduced by any fee waivers and/or reimbursements.

A firm 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 the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations. 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 was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

Provided below is an overview of certain factors the Board considered in connection with its renewal and approval of the 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 investment advisory contracts, such as the Agreements. The memorandum explained the regulatory requirements surrounding the Board’s process for evaluating investment advisors and the terms of investment advisory contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Fund and its shareholders.

65

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

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

In determining whether to renew the Agreements, the Board considered the 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 the Fund; (3) the costs incurred by the Manager in rendering services to the Fund and its resulting profits or losses; (4) comparisons of services and fee rates with contracts entered into by the Manager or the subadvisors or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisors from their relationships with the Fund.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: the Fund’s long-term performance; the length of service of key investment personnel at the Manager; the cost structure of the Fund; the Manager’s culture of compliance and support that reduce risks to the Fund; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; and the Manager’s efforts to retain key employees and maintain staffing levels.

With respect to the renewal of the Investment Advisory Agreements, the Board considered the level of staffing and the size of the subadvisors. The Board also considered the adequacy of the resources committed to the Fund by the subadvisors, and whether those resources were commensurate with the needs of the Fund and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of the subadvisors. The Board also considered each subadvisor’s representations regarding its compliance program and code 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 the subadvisors were appropriate for the Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of the Fund relative to its Broadridge performance universe, Morningstar Category, and benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding Broadridge’s independent methodology for selecting the Fund’s Broadridge performance universe. The Board also considered that the performance universes selected by Broadridge may not provide appropriate comparisons for the Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by each subadvisor regarding the performance of its portion of the Fund relative to the performance of the Fund’s benchmark index, and, with respect to Causeway and Lazard, a composite of similar accounts managed by the subadvisor. In addition, the Board considered the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to the Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to the Fund.”

Costs of the Services Provided to the Fund and the Profits Realized by the Manager from its Relationship with the Fund. In analyzing the cost of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager earning a profit before and after the payment of distribution-related expenses by the Manager for the Fund. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. 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 Fund, the Manager represented that,

66

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility and regulatory requirements associated with managing the Fund.

The Board also noted that the Manager proposed to continue the expense waivers and reimbursements for the Fund’s R6 Class shares that were in place during the last fiscal year. The Board further considered that, with respect to the Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager. In addition, the Board considered that the Manager receives fees for overseeing the securities lending program on behalf of the Fund. The Board also noted that certain share classes of the Fund maintain higher expense ratios in order to compensate third-party financial intermediaries.

In analyzing the fee rates charged by each subadvisor in connection with its investment advisory services to the Fund, the Board considered representations made by Causeway and Lazard that the fee rate negotiated by the Manager is favorable relative to the fee rates that the relevant subadvisor charges for any comparable client accounts, and representations made by Templeton that, for fee comparison purposes, it does not manage any comparable client accounts and therefore could not provide fee schedules for comparable investment accounts managed by Templeton. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board considered that it was advised that the subadvisors may not account for their profits on an account-by-account basis and that different firms 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 the Fund’s fee rates is set forth below under “Additional Considerations and Conclusions with Respect to the 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 Fund grows and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that, with respect to each subadvisor, the Manager has negotiated breakpoints in the subadvisory fee rate for the Fund. In addition, the Board noted the Manager’s representation that the Management Agreement contains fee schedule breakpoints at higher asset levels with respect to the Fund. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for the Fund provide for a reasonable sharing of benefits from any economies of scale with the Fund.

Benefits Derived from the Relationship with the Fund. 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 Fund, including greater exposure in the marketplace with respect to the Manager’s or a subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors. The Board also considered that the Manager may invest the Fund’s cash balances and cash collateral provided by the borrowers of the Fund’s securities in the American Beacon U.S. Government Money Market Select Fund, which the Manager manages directly. In addition, the Board noted that each subadvisor benefits from soft dollar arrangements for proprietary and/or third-party research. 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 Fund appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to the Fund

The performance comparisons below were made in comparison to the Fund’s Broadridge performance universe and Morningstar Category. With respect to the Broadridge performance universe, the 1^st Quintile represents the top 20 percent of the universe based on performance and the 5^th Quintile representing the bottom

67

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

20 percent of the universe based on performance. References below to the Fund’s Broadridge performance universe are to the universe of mutual funds with a comparable investment classification/objective included in the analysis provided by Broadridge. In reviewing the performance, the Trustees viewed longer-term performance over a full market cycle as the most important consideration, because relative performance over shorter periods may be significantly impacted by market or economic events and not necessarily reflective of manager skill.

The expense comparisons below were made in comparison to the Fund’s Broadridge expense universe and Broadridge expense group, with the 1^st Quintile representing the lowest 20 percent of the universe or group based on lowest total expense and the 5^th Quintile representing the highest 20 percent of the universe or group based on highest total expense. References below to the Fund’s expense group and expense universe are to the respective group or universe of comparable mutual funds included in the analysis by Broadridge. A Broadridge expense group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge expense universe includes all funds in the investment classification/objective with a similar operating structure as the share class of the Fund included in the Broadridge comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Board also considered the Fund’s Morningstar fee level category. In reviewing expenses, the Board considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the subadvisors’ use of soft dollars was requested from the Manager and was considered by the Board.

In considering the renewal of the Management Agreement for the Fund, the Board considered the following additional factors:

Broadridge Total Expenses Excluding 12b-1 Fees and Morningstar Fee Level Ranking

Compared to Broadridge Expense Group	1st Quintile
Compared to Broadridge Expense Universe	1st Quintile
Morningstar Fee Level Ranking – Institutional Class	Below Average Expense Ratio

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2018)

Compared to Broadridge Performance Universe	4th Quintile
Compared to Morningstar Category	2nd Quintile

In considering the renewal of the Investment Advisory Agreements with each subadvisor, the Board considered that the diversification of investment strategies facilitated by the Fund’s multi-manager structure permits the Fund to mitigate the risks associated with a single subadvisor. The Board also considered the following additional factors:

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2018)

Causeway	5 Years	2	nd Quintile
Lazard	5 Years	1	st Quintile
Templeton	5 Years	5	th Quintile

The Board also considered: (1) that, given the Fund’s value focus, the Morningstar Foreign Large Value category would provide a more appropriate peer group comparison than the Broadridge performance universe, which utilizes the Lipper Foreign Large Core category; (2) the Fund’s more limited exposure to emerging market countries than the funds in its Broadridge performance universe and, accordingly, the Manager expects the Fund to underperform its Broadridge and Morningstar peer groups when emerging markets outperform developed markets; (3) Templeton’s representations regarding the implementation of enhancements to its investment process and personnel changes; (4) information provided by each subadvisor, other than Templeton, regarding fee rates charged for managing assets in the same or a similar strategy as the subadvisor manages its allocation of the Fund;

68

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

(5) Templeton’s representation that it has no other comparable accounts in the same strategy as the subadvisor manages its allocation of the Fund; (6) the Manager’s recommendation to continue to retain each subadvisor; and (7) the Manager’s representation that, while the Manager was recommending that the Board continue to retain Templeton, the Manager continues to evaluate the performance of Templeton’s portion of the Fund and whether to make any further recommendations with respect to that subadvisor.

Based on these and other considerations, the Board: (1) concluded that the fees paid to the Manager and the subadvisors under the Management and Investment Advisory Agreements are fair and reasonable; and (2) determined that the Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund.

69

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. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty-six funds in the fund complex that includes the Trust, the American Beacon Select Funds, the American Beacon Institutional Funds Trust, the American Beacon Sound Point Enhanced Income Fund, American Beacon Apollo Total Return Fund and the American Beacon Sound Point Alternative Lending Fund. 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	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*
Alan D. Feld** (82)	Trustee since 1996	Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (49)	Trustee since 2015	Director, Kura MD, Inc. (local telehealth organization) (2015-present); Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Vice President & CFO, Sierra Health Foundation: Center for Health Program Management (California public benefit corporation) (2012-Present); Director, Innovative North State (2012-2015); Director, Sacramento Regional Technology Alliance (2011-2016); Director, Women’s Empowerment (2009-2014); Director, Valley Healthcare Staffing (2017-present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Joseph B. Armes (57)	Trustee since 2015	Chairman & CEO, CSW Industrials f/k/a Capital Southwest Corporation (investment company) (2015-Present); Chairman of the Board of Capital Southwest Corporation, predecessor to CSW Industrials, Inc. (2014-2017) (investment company); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-Present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Gerard J. Arpey (61)	Trustee since 2012	Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

70

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (58)	Trustee since 2004 Chair since 2019 Vice Chair 2018	Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Director, Tyler Technologies, Inc. (public sector software solutions company) (2014-Present); Director, Range Resources Corporation (oil and natural gas company) (2015-Present); Trustee, Cushing Closed-End and Open-End Funds and ETFs (2017-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Eugene J. Duffy (65)	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-Present); Principal and Executive Vice President, Paradigm Asset Management (1994-2014); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Claudia A. Holz (62)	Trustee since 2018	Partner, KPMG LLP (1990-2017); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Douglas A. Lindgren (57)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Managing Director, IPS Investment Management and Global Head, Content Management, UBS Wealth Management (2010-2016); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Richard A. Massman (76)	Trustee since 2004 Chair 2008-2018 Chair Emeritus since 2019	Consultant and General Counsel Emeritus, Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities) (2009-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Barbara J. McKenna, CFA (56)	Trustee since 2012	President/Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

71

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
R. Gerald Turner (73)	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 Select Funds (2001-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (64)	President since 2009	President (2009-2018), CEO and Director (2009-Present), and Chairman (2018-Present), American Beacon Advisors, Inc., President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present), Resolute Investment Holdings, LLC; President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present), Resolute Topco, Inc.; President (2015-2018); Director, and CEO (2015-Present), and Chairman (2018-Present), Resolute Acquisition, Inc.; President (2015-2018), Director and CEO (2015-Present), Chairman (2018-Present), Resolute Investment Managers, Inc.; Director, Chairman, President and CEO, Resolute Investment Distributors (2017-Present); Director, Chairman, President and CEO; Resolute Investment Services, Inc. (2017-Present); President and CEO, Lighthouse Holdings Parent, Inc. (2009-2015); President, CEO and Director, Lighthouse Holdings, Inc. (2009-2015); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-Present); Director, ARK Investment Management LLC (2016-Present); Director, Shapiro Capital Management LLC (2017-Present); Director, Chairman and CEO, Continuous Capital, LLC (2018-Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director and President, American Beacon Cayman Transformational Innovation Company, LTD., (2017-2018); President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); President American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-Present); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-Present); President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present); President, American Beacon Sound Point Alternative Lending Fund (2019-Present); Director, Green Harvest Asset Management (2019-Present).

72

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rosemary K. Behan (60)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Secretary and General Counsel, American Beacon Advisors, Inc. (2006-Present); Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015-Present); Vice President, Secretary and General Counsel, Resolute Investment Managers, Inc. (2015-Present); Secretary, Resolute Investment Distributors, Inc. (2017-Present); Vice President, Secretary and General Counsel, Resolute Investment Services, Inc. (2017-Present); Vice President and Secretary, Lighthouse Holdings Parent, Inc. (2008-2015); Vice President and Secretary, Lighthouse Holdings, Inc. (2008-2015); Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-Present); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Secretary, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-2018); Secretary, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Secretary, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Select Funds (2006-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Secretary, Green Harvest Asset Management (2019-Present).
Brian E. Brett (59)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), Vice President, Director of Sales (2004-2012), American Beacon Advisors, Inc.; Senior Vice President, Resolute Investment Managers, Inc. (2017-Present); Senior Vice President, Resolute Investment Distributors, Inc. (2018-Present), Senior Vice President, Resolute Investment Services, Inc. (2018-Present); Senior Vice President, Lighthouse Holdings Parent, Inc. (2008-2015); Senior Vice President, Lighthouse Holdings, Inc. (2008-2015); Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Paul B. Cavazos (50)	VP since 2016	Chief Investment Officer and Senior Vice President, American Beacon Advisors, Inc. (2016-Present); Chief Investment Officer, DTE Energy (2007-2016); Vice President, American Private Equity Management, L.L.C. (2017-Present); Vice President, American Beacon Select Funds (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

73

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Erica Duncan (49)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers (2018-Present); Vice President, Resolute Investment Services, Inc. (2018-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Melinda G. Heika (58)	Treasurer since 2010	Treasurer and CFO (2010-Present), American Beacon Advisors, Inc.; Treasurer, Resolute Topco, Inc. (2015-Present); Treasurer, Resolute Investment Holdings, LLC. (2015-Present); Treasurer, Resolute Acquisition, Inc. (2015-Present); Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017-2017); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, Lighthouse Holdings Parent Inc., (2010-2015); Treasurer, Lighthouse Holdings, Inc. (2010-2015); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-Present); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Treasurer, American Beacon Select Funds (2010-Present); Treasurer, American Beacon Institutional Funds Trust (2017-Present); Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present); Treasurer, Green Harvest Asset Management (2019-Present).
Terri L. McKinney (55)	VP since 2010	Vice President (2009-Present), Managing Director (2003-2009), American Beacon Advisors, Inc.; Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services, Inc (2018-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

74

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Jeffrey K. Ringdahl (44)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), Vice President (2010-2013), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice Present (2015-2018), Resolute Investment Holdings, LLC; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Topco, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Acquisition, Inc.; Director (2015-Present), President & COO (2018-Present), Senior Vice President (2015-2018), Resolute Investment Managers, Inc.; Director and Executive Vice President (2017-Present), Resolute Investment Distributors, Inc.; Director (2017-Present), President & COO (2018-Present), Executive Vice President (2017-2018), Resolute Investment Services, Inc.; Senior Vice President (2017-Present), Vice President (2012-2017), Manager (2015-Present), American Private Equity Management, LLC; Senior Vice President, Lighthouse Holdings Parent, Inc. (2013-2015); Senior Vice President, Lighthouse Holdings, Inc. (2013-2015); Trustee, American Beacon NextShares Trust (2015-Present); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-Present); Director, Shapiro Capital Management, LLC (2017-Present); Director, Executive Vice President & COO, Continuous Capital, LLC (2018-Present); Director and Vice President, American Beacon Cayman Transformational Innovation Company, Ltd., (2017-Present); Vice President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Vice President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Vice President, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Vice President, American Beacon Select Funds (2010-2018); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present), Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Samuel J. Silver (56)	VP Since 2011	Vice President (2011-Present), Chief Fixed Income Officer (2016-Present), American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Christina E. Sears (48)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Vice President, American Beacon Advisors, Inc. (2019-Present); Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Distributors (2017-Present); Vice President, Resolute Investment Services, Inc. (2019-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Chief Compliance Officer (2004-Present) and Assistant Secretary (1999-Present), American Beacon Select Funds; Chief Compliance Officer and Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).

75

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Sonia L. Bates (62)	Asst. Treasurer since 2011	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); Assistant Treasurer, Lighthouse Holdings Parent Inc. (2011-2015); Assistant Treasurer, Lighthouse Holdings, Inc. (2011-2015); Assistant Treasurer, American Private Equity Management, LLC (2012-Present); Assistant Treasurer, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-Present); Assistant Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Assistant Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Shelley D. Abrahams (44)	Assistant Secretary since 2008	Assistant Secretary, American Beacon Select Funds (2008-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).
Rebecca L. Harris (52)	Assistant Secretary since 2010	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services (2015-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Assistant Secretary, American Beacon Select Funds (2010-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Teresa A. Oxford (61)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2015-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees, other than Messrs. Feld and Massman to retire no later than the last day of the calendar year in which they reach the age of 75. As of 11/7/17, the Board approved a waiver of the mandatory retirement policy with respect to Mr. Massman, who turned 75 in November 2018, to permit him to continue to serve on the Board as Chair Emeritus through 12/31/19.

** Mr. Feld is deemed to be an “interested person” of the Trusts, 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 fiscal years to one or more of the Trust’s sub-advisors.

76

American Beacon Funds^SM

Privacy Policy

October 31, 2019 (Unaudited)

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.

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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:	On the Internet:
american_beacon.funds@ambeacon.com	Visit our website at www.americanbeaconfunds.com
By Telephone: Call (800) 658-5811	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules	Availability of Proxy Voting Policy and Records
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the first and third fiscal quarters. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Company Boston, Massachusetts TRANSFER AGENT DST Asset Manager Solutions, Inc. Quincy, Massachusetts INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, Texas

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

American Beacon Funds, American Beacon International Equity Fund and American Beacon Tocqueville International Value Fund are service marks of American Beacon Advisors, Inc.

AR 10/19

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.

LARGE CAP VALUE FUND RISKS

Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

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

American Beacon Funds October 31, 2019

Contents

President’s Message	1
Market and Performance Overview	2
Expense Example	6
Report of Independent Registered Public Accounting Firm	8
Schedule of Investments:
American Beacon Large Cap Value Fund	9
Financial Statements	17
Notes to Financial Statements	20
Financial Highlights:
American Beacon Large Cap Value Fund	39
Federal Tax Information	46
Disclosure Regarding Approval of the Management  and Investment Advisory Agreements	47
Trustees and Officers of the American Beacon Funds	52
Privacy Policy	59

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   In recent months, you’ve likely seen and heard news reports about disruptive headwinds in the global economy – including the U.S. trade war with China and its toll on the global economy, slowing global growth, the Federal Reserve’s series of rate cuts, Brexit, disruptions in the Middle East and protests in Hong Kong – and watched a flood of reaction in the world’s markets.   As Peter L. Bernstein said in his treatise on risk, Against the Gods: The Remarkable Story of Risk, published by John Wiley & Sons, Inc. in September 1998, “Volatility is a proxy for uncertainty and must be accommodated in measuring investment risk.”   During times of economic uncertainty and market volatility, fear of loss can be a powerful emotion – one that drives many investors to making short-term decisions subject to a variety of potential error-leading biases. Unfortunately, some short-term investment decisions may create more volatility rather than mitigate it.

Instead of dwelling on the markets’ short-term reaction to waves of negative global news, we encourage investors to focus on the horizon instead. Long-term investing isn’t about identifying and anticipating the next big market move, it is about identifying the right investment products for riding out those moves. As a long-term investor, you should keep in mind the three Ds: direction, discipline and diversification.

u Direction: Achieving your long-term financial goals requires an individualized plan of action. You may want your plan to provide some measure of protection against periods of geopolitical turmoil, economic uncertainty, market volatility and job insecurity. Your plan should be reviewed annually and be adjusted in the event your long-range needs change.

u Discipline: Long-term, systematic participation in an investment portfolio requires your resolution to stay the course. Spending time in the market – rather than trying to time the market – may place you in a better position to reach your long-term financial goals.

u Diversification: By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your investment portfolio. By allocating your investment portfolio according to your risk-tolerance level, you may be better positioned to weather storms and achieve your long-term financial goals.

Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term financial goals. As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings.

Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for long-term rewards.

Our management approach is more than a concept; it’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment solutions to help our shareholders seek long-term rewards while mitigating volatility and risk.

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

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Domestic Equity Market Overview

October 31, 2019 (Unaudited)

For the 12-month period ended October 31, 2019, the U.S. equity markets rallied strongly after a depressed start to the period that saw market volatility spike to its highest level in seven years during the fourth quarter of 2018. The S&P 500 Index and the Dow Jones Industrial Average returned 14.33% and 10.32%, respectively, for the period. Growth broadly outperformed Value across all market caps; the Russell 1000 Growth Index and the Russell 1000 Value Index returned 17.10% and 11.21%, respectively, and the Russell Midcap Growth Index and the Russell Midcap Value Index returned 18.93% and 10.08%, respectively. Large and mid-cap stocks also did significantly better than small-cap stocks; the Russell 1000 Index returned 14.15% and the Russell Midcap Index returned 13.72%, compared to the Russell 2000 Index return of 4.90%.

All of this occurred in an environment that saw rising fears of economic recession as the current expansion entered its 11th year, intensified by the effects of an escalating trade war, as well as concerns over the ability of the Federal Reserve (the “Fed”) policy to forestall the effects of an economic downturn. Feeding these uncertainties, growth slowed during the period as the third quarter’s gross domestic product decelerated to 1.9% from its peak rate of 3.5% in the second quarter of 2018. Corporate earnings growth also slowed with profit growth.

The Fed did alter its policy course at year end 2018 and began lowering the federal funds rate in the third quarter of 2019. At the same time, the economic strength underlying the U.S. economy remained resilient with the September unemployment rate at 3.5%, a 40-year low. In addition, the consumer continued to show good strength with both income and expenditures growing at healthy rates. Also, ongoing tariff negotiations between the U.S. and China are providing hope to prospects of settlement. Collectively, all of these factors kept the markets positive going into the fiscal year end.

2

American Beacon Large Cap Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

The Investor Class of the American Beacon Large Cap Value Fund (the “Fund”) returned 9.81% for the twelve months ended October 31, 2019, underperforming the Russell 1000^® Value Index (the “Index”) return of 11.21% for the same period.

Comparison of Change in Value of a $10,000 Investment for the period from 10/31/2009 through 10/31/2019

Total Returns for the Period ended October 31, 2019
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of $10,000 10/31/2009- 10/31/2019
Institutional Class (1,6)	AADEX		10.18	%		11.40	%		6.89	%		11.34	%		$	29,271
Y Class (1,6)	ABLYX		10.05	%		11.30	%		6.80	%		11.24	%		$	29,011
Investor Class (1,6)	AAGPX		9.81	%		11.03	%		6.53	%		10.96	%		$	28,282
Advisor Class (1,6)	AVASX		9.56	%		10.84	%		6.36	%		10.79	%		$	27,870
A Class without sales charge (1,2,6)	ALVAX		9.68	%		10.97	%		6.48	%		10.86	%		$	28,046
A Class with sales charge (1,2,6)	ALVAX		3.36	%		8.80	%		5.23	%		10.21	%		$	26,427
C Class without sales charge (1,3,6)	ALVCX		8.94	%		10.23	%		5.74	%		10.11	%		$	26,202
C Class with sales charge (1,3,6)	ALVCX		7.94	%		10.23	%		5.74	%		10.11	%		$	26,202
R6 Class (1,4,6)	AALRX		10.15	%		11.40	%		6.89	%		11.34	%		$	29,273
Russell 1000® Value Index (5)			11.21	%		10.51	%		7.61	%		11.96	%		$	30,959

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights.

3

American Beacon Large Cap Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

2. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 through 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 10/31/09. A Class shares have a maximum sales charge of 5.75%.

3. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 through 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/09. A portion of the fees charged to the C Class was waived from 2010 through 2012, partially recovered in 2013 and 2014, and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012 and for 2018. C Class shares have a maximum contingent deferred sales charge of 1.00% for shares redeemed within one year of the date of purchase.

4. Fund performance for the three-year, five-year and ten-year periods represents the returns achieved by the Institutional Class from 10/31/09 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 10/31/09. A portion of the fees charged to the R6 Class of the Fund was waived in 2017 and 2018 and partially recovered in 2019. Performance prior to waiving fees was lower than the actual returns shown for 2017 and 2018.

5. The Russell 1000 Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. One cannot directly invest in an index.

6. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C and R6 Class shares were 0.62%, 0.68%, 0.95%, 1.09%, 0.93%, 1.64% and 0.59%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund underperformed the Index as sector allocation detracted more value than that gained by stock selection for the twelve month period.

The Fund’s investments in the Consumer Discretionary and Financials sectors helped the most with respect to stock selection. Positions in Dollar General Corp. (up 44.7%) and PulteGroup, Inc. (up 62.9%) added to the Fund’s returns in the Consumer Discretionary sector. Within Financials, positions in American International Group (up 33.1%) and The Blackstone Group LP (up 48.7%) contributed to the Fund’s relative performance. Meanwhile, in the Consumer Staples sector, the Fund’s positions in Altria Group, Inc. (down 26.2%) and Imperial Brands Plc. Sponsored ADR (down 29.3%) hurt the Fund’s performance the most for the period.

Sector allocation weighed on relative performance as an overweight to Energy (down 12.3%) and an underweight to Real Estate (up 25.2%) hurt relative performance compared to the Index. The Fund’s overweight position in the Industrials sector (up 16.8%) somewhat muted relative underperformance during the period.

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

4

American Beacon Large Cap Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

Top Ten Holdings (% Net Assets)
JPMorgan Chase & Co.		2.8
Citigroup, Inc.		2.7
Wells Fargo & Co.		2.4
Medtronic PLC		2.3
Comcast Corp., Class A		2.1
Microsoft Corp.		1.9
American International Group, Inc.		1.8
Bank of America Corp.		1.8
BP PLC, Sponsored ADR		1.7
General Motors Co.		1.7
Total Fund Holdings	190
Sector Allocation (% Equities)
Financials		23.8
Health Care		13.6
Energy		11.6
Industrials		11.0
Information Technology		10.1
Consumer Discretionary		8.5
Communication Services		6.2
Materials		5.7
Consumer Staples		5.3
Utilities		4.0
Real Estate		0.2

5

American Beacon Large Cap Value Fund^SM

Expense Example

October 31, 2019 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2019 through October 31, 2019.

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 = $8.60), then multiply the result by the “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) or redemption fees, as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “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.

6

American Beacon Large Cap Value Fund^SM

Expense Example

October 31, 2019 (Unaudited)

American Beacon Large Cap Value Fund
	Beginning Account Value 5/1/2019		Ending Account Value 10/31/2019		Expenses Paid During Period 5/1/2019-10/31/2019*
Institutional Class
Actual		$1,000.00		$1,025.30		$3.32
Hypothetical**		$1,000.00		$1,021.93		$3.31
Y Class
Actual		$1,000.00		$1,025.20		$3.62
Hypothetical**		$1,000.00		$1,021.63		$3.62
Investor Class
Actual		$1,000.00		$1,023.60		$5.00
Hypothetical**		$1,000.00		$1,020.27		$4.99
Advisor Class
Actual		$1,000.00		$1,023.10		$5.71
Hypothetical**		$1,000.00		$1,019.56		$5.70
A Class
Actual		$1,000.00		$1,023.50		$5.36
Hypothetical**		$1,000.00		$1,019.91		$5.35
C Class
Actual		$1,000.00		$1,019.60		$8.70
Hypothetical**		$1,000.00		$1,016.59		$8.69
R6 Class
Actual		$1,000.00		$1,025.40		$2.96
Hypothetical**		$1,000.00		$1,022.28		$2.96

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.65%, 0.71%, 0.98%, 1.12%, 1.05%, 1.71%, and 0.58% for the Institutional, Y, Investor, Advisor, A, C, and R6 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.

7

American Beacon Large Cap Value Fund^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon Large Cap Value Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of American Beacon Large Cap Value Fund (the “Fund”) (one of the funds constituting American Beacon Funds (the “Trust”)), including the schedule of investments, as of October 31, 2019, 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, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund at October 31, 2019, 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 its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2019, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more American Beacon investment companies since 1987.

Dallas, Texas

December 30, 2019

8

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.86%
Communication Services - 6.02%
Diversified Telecommunication Services - 1.20%
AT&T, Inc.		1,520,900		$	58,539,441
Verizon Communications, Inc.		104,195			6,300,672
					64,840,113
Interactive Media & Services - 0.92%
Alphabet, Inc., Class AA		15,700			19,763,160
Facebook, Inc., Class AA		157,200			30,127,380
					49,890,540
Media - 3.44%
CBS Corp., Class B, NVDR		293,103			10,563,432
Comcast Corp., Class A		2,555,843			114,552,883
Discovery, Inc., Class CA		1,045,000			26,375,800
Interpublic Group of Cos., Inc.		300,000			6,525,000
News Corp., Class A		1,294,300			17,744,853
Omnicom Group, Inc.		135,427			10,453,610
					186,215,578
Wireless Telecommunication Services - 0.46%
Vodafone Group PLC, Sponsored ADR		1,225,850			25,031,857
Total Communication Services					325,978,088
Consumer Discretionary - 8.22%
Auto Components - 1.37%
Adient PLC		406,398			8,611,574
Aptiv PLC		131,226			11,751,288
Goodyear Tire & Rubber Co.		639,100			10,142,517
Lear Corp.		18,118			2,133,757
Magna International, Inc.		776,541			41,754,609
					74,393,745
Automobiles - 1.97%
General Motors Co.		2,549,149			94,726,377
Harley-Davidson, Inc.B		304,968			11,866,305
					106,592,682
Hotels, Restaurants & Leisure - 1.06%
Aramark		998,367			43,688,540
Norwegian Cruise Line Holdings Ltd.A		265,600			13,481,856
					57,170,396
Household Durables - 1.29%
DR Horton, Inc.		336,900			17,643,453
Mohawk Industries, Inc.A		191,100			27,399,918
PulteGroup, Inc.		627,300			24,615,252
					69,658,623
Internet & Direct Marketing Retail - 0.18%
eBay, Inc.		278,700			9,824,175
Multiline Retail - 1.29%
Dollar General Corp.		437,343			70,123,577

See accompanying notes

9

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.86% (continued)
Consumer Discretionary - 8.22% (continued)
Specialty Retail - 1.02%
Advance Auto Parts, Inc.		119,974		$	19,493,375
Lowe’s Cos., Inc.		321,867			35,923,576
					55,416,951
Textiles, Apparel & Luxury Goods - 0.04%
Hanesbrands, Inc.		138,581			2,107,817
Total Consumer Discretionary					445,287,966
Consumer Staples - 5.16%
Beverages - 1.02%
Diageo PLC, Sponsored ADR		101,624			16,653,125
Molson Coors Brewing Co., Class B		585,750			30,880,740
PepsiCo, Inc.		54,566			7,484,818
					55,018,683
Food Products - 1.86%
Archer-Daniels-Midland Co.		166,190			6,986,628
Danone S.A., Sponsored ADR		367,124			6,057,546
Ingredion, Inc.		262,500			20,737,500
JM Smucker Co.		43,889			4,638,189
Mondelez International, Inc., Class A		178,400			9,357,080
Nestle S.A., Sponsored ADR		215,893			23,135,094
Tyson Foods, Inc., Class A		361,040			29,890,501
					100,802,538
Household Products - 0.29%
Colgate-Palmolive Co.		37,433			2,567,904
Kimberly-Clark Corp.		33,860			4,499,317
Procter & Gamble Co.		24,445			3,043,647
Reckitt Benckiser Group PLC, Sponsored ADRB		356,873			5,627,887
					15,738,755
Personal Products - 0.33%
Unilever PLC, Sponsored ADR		299,300			17,990,923
Tobacco - 1.66%
Altria Group, Inc.		614,525			27,524,575
Imperial Brands PLC, Sponsored ADR		628,767			13,832,874
Philip Morris International, Inc.		593,975			48,373,324
					89,730,773
Total Consumer Staples					279,281,672
Energy - 11.24%
Energy Equipment & Services - 1.81%
Halliburton Co.		1,889,200			36,367,100
National Oilwell Varco, Inc.		1,083,200			24,501,984
Schlumberger Ltd.		1,145,217			37,437,144
					98,306,228
Oil, Gas & Consumable Fuels - 9.43%
Apache Corp.		951,200			20,602,992
BP PLC, Sponsored ADR		2,481,676			94,080,337
Canadian Natural Resources Ltd.		2,115,703			53,358,030
Chevron Corp.		580,648			67,436,459
ConocoPhillips		1,291,845			71,309,844

See accompanying notes

10

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.86% (continued)
Energy - 11.24% (continued)
Oil, Gas & Consumable Fuels - 9.43% (continued)
EOG Resources, Inc.		120,008		$	8,317,754
Exxon Mobil Corp.		119,676			8,086,507
Hess Corp.		370,192			24,340,124
Kosmos Energy Ltd.		820,845			5,089,239
Marathon Oil Corp.		1,904,486			21,958,723
Marathon Petroleum Corp.		180,680			11,554,486
Murphy Oil Corp.B		765,760			15,797,629
Phillips 66		460,851			53,836,614
Pioneer Natural Resources Co.		36,196			4,452,832
Royal Dutch Shell PLC, Class A, Sponsored ADR		337,322			19,554,556
Royal Dutch Shell PLC, Class B, Sponsored ADR		349,100			20,349,039
Suncor Energy, Inc.		355,169			10,544,968
					510,670,133
Total Energy					608,976,361
Financials - 23.03%
Banks - 11.86%
Banco Santander S.A., Sponsored ADRB		4,603,800			18,231,048
Bank of America Corp.		3,077,244			96,225,420
BB&T Corp.		368,827			19,566,272
CIT Group, Inc.		133,200			5,712,948
Citigroup, Inc.		1,999,421			143,678,393
Citizens Financial Group, Inc.		552,553			19,427,763
Fifth Third Bancorp		237,200			6,897,776
JPMorgan Chase & Co.		1,228,185			153,424,870
PNC Financial Services Group, Inc.		128,064			18,786,989
US Bancorp		513,032			29,253,085
Wells Fargo & Co.		2,538,882			131,082,478
					642,287,042
Capital Markets - 3.36%
Bank of New York Mellon Corp.		371,627			17,373,562
BlackRock, Inc.		26,297			12,141,325
E*TRADE Financial Corp.		351,600			14,693,364
Goldman Sachs Group, Inc.		285,762			60,975,895
Moody’s Corp.		52,168			11,512,956
Morgan Stanley		299,578			13,795,567
Nasdaq, Inc.		152,269			15,191,878
State Street Corp.		447,751			29,582,909
T Rowe Price Group, Inc.		56,031			6,488,390
					181,755,846
Consumer Finance - 1.50%
American Express Co.		83,889			9,838,502
Capital One Financial Corp.		287,291			26,789,886
Discover Financial Services		147,600			11,846,376
Navient Corp.		833,622			11,478,975
SLM Corp.		2,547,596			21,501,710
					81,455,449
Diversified Financial Services - 1.66%
AXA Equitable Holdings, Inc.		899,200			19,422,720
Berkshire Hathaway, Inc., Class BA		331,337			70,435,619
					89,858,339

See accompanying notes

11

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.86% (continued)
Financials - 23.03% (continued)
Insurance - 3.97%
American International Group, Inc.		1,842,468		$	97,577,105
Aon PLC		157,591			30,440,278
Chubb Ltd.		172,858			26,347,016
Marsh & McLennan Cos., Inc.		169,133			17,525,562
Travelers Cos., Inc.		327,952			42,981,389
					214,871,350
Mortgage Real Estate Investment Trusts (REITs) - 0.68%
Annaly Capital Management, Inc.		2,567,300			23,054,354
Two Harbors Investment Corp.		990,300			13,735,461
					36,789,815
Total Financials					1,247,017,841
Health Care - 13.16%
Biotechnology - 0.71%
AbbVie, Inc.		202,000			16,069,100
Biogen, Inc.A		31,100			9,289,881
Gilead Sciences, Inc.		204,640			13,037,614
					38,396,595
Health Care Equipment & Supplies - 3.50%
Abbott Laboratories		202,263			16,911,209
Danaher Corp.		164,390			22,656,230
Medtronic PLC		1,151,442			125,392,034
Zimmer Biomet Holdings, Inc.		177,117			24,482,883
					189,442,356
Health Care Providers & Services - 3.06%
Anthem, Inc.		192,900			51,905,532
Centene Corp.A		146,600			7,781,528
Cigna Corp.		140,554			25,083,267
CVS Health Corp.		776,490			51,551,171
HCA Healthcare, Inc.		50,900			6,797,186
McKesson Corp.		67,037			8,915,921
UnitedHealth Group, Inc.		53,500			13,519,450
					165,554,055
Life Sciences Tools & Services - 0.34%
Thermo Fisher Scientific, Inc.		61,379			18,535,231
Pharmaceuticals - 5.55%
AstraZeneca PLC, Sponsored ADR		328,400			16,101,452
Bristol-Myers Squibb Co.		649,752			37,276,272
GlaxoSmithKline PLC, Sponsored ADR		457,934			20,973,377
Horizon Therapeutics PLCA		252,922			7,311,975
Jazz Pharmaceuticals PLCA		105,168			13,212,256
Johnson & Johnson		476,140			62,869,525
Merck & Co., Inc.		489,348			42,406,898
Mylan N.V.A		501,085			9,595,778
Novartis AG, Sponsored ADR		32,790			2,867,158
Pfizer, Inc.		1,357,548			52,089,117
Roche Holding AG, Sponsored ADR		156,197			5,876,131
Sanofi, ADR		651,882			30,038,722
					300,618,661
Total Health Care					712,546,898

See accompanying notes

12

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.86% (continued)
Industrials - 10.64%
Aerospace & Defense - 2.17%
Embraer S.A., Sponsored ADR		229,600		$	3,988,152
General Dynamics Corp.		64,796			11,455,933
Lockheed Martin Corp.		38,973			14,680,349
Northrop Grumman Corp.		79,585			28,052,121
Raytheon Co.		124,737			26,470,439
United Technologies Corp.		229,881			33,006,314
					117,653,308
Air Freight & Logistics - 0.24%
FedEx Corp.		86,900			13,266,154
Airlines - 0.64%
American Airlines Group, Inc.		1,147,940			34,507,076
Building Products - 1.16%
Johnson Controls International PLC		1,446,797			62,689,714
Construction & Engineering - 0.09%
Fluor Corp.		316,800			5,103,648
Electrical Equipment - 0.48%
Eaton Corp. PLC		295,485			25,739,698
Industrial Conglomerates - 2.71%
3M Co.		68,267			11,263,372
General Electric Co.		7,914,772			78,989,425
Honeywell International, Inc.		326,667			56,425,191
					146,677,988
Machinery - 2.06%
CNH Industrial N.V.		2,532,839			27,633,273
Cummins, Inc.		152,997			26,388,923
Illinois Tool Works, Inc.		132,393			22,318,812
Ingersoll-Rand PLC		109,064			13,839,131
PACCAR, Inc.		89,951			6,841,673
Stanley Black & Decker, Inc.		96,675			14,629,828
					111,651,640
Professional Services - 0.21%
Equifax, Inc.		84,012			11,485,281
Road & Rail - 0.45%
Canadian National Railway Co.		84,820			7,580,363
Union Pacific Corp.		100,100			16,562,546
					24,142,909
Trading Companies & Distributors - 0.43%
AerCap Holdings N.V.A		405,600			23,476,128
Total Industrials					576,393,544
Information Technology - 9.78%
Communications Equipment - 0.25%
Telefonaktiebolaget LM Ericsson, Sponsored ADRB		1,567,020			13,664,415

See accompanying notes

13

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.86% (continued)
Information Technology - 9.78% (continued)
Electronic Equipment, Instruments & Components - 1.04%
Corning, Inc.		998,440		$	29,583,777
IPG Photonics Corp.A		127,800			17,160,984
TE Connectivity Ltd.		105,000			9,397,500
					56,142,261
IT Services - 1.39%
Accenture PLC, Class A		181,763			33,702,495
Cognizant Technology Solutions Corp., Class A		86,270			5,257,294
Fidelity National Information Services, Inc.		130,595			17,207,197
Fiserv, Inc.A		181,154			19,227,686
					75,394,672
Semiconductors & Semiconductor Equipment - 2.83%
Analog Devices, Inc.		89,026			9,492,842
Marvell Technology Group Ltd.		1,189,300			29,007,027
NVIDIA Corp.		110,300			22,172,506
NXP Semiconductors N.V.		51,089			5,807,797
QUALCOMM, Inc.		629,499			50,636,900
Texas Instruments, Inc.		308,125			36,355,669
					153,472,741
Software - 3.57%
Microsoft Corp.		704,969			101,071,406
Oracle Corp.		1,617,414			88,132,889
Teradata Corp.A		134,394			4,022,412
					193,226,707
Technology Hardware, Storage & Peripherals - 0.70%
Hewlett Packard Enterprise Co.		2,300,844			37,756,850
Total Information Technology					529,657,646
Materials - 5.56%
Chemicals - 3.84%
Air Products & Chemicals, Inc.		256,947			54,796,517
Corteva, Inc.A		799,481			21,090,309
Dow, Inc.A		331,617			16,743,342
DuPont de Nemours, Inc.		633,089			41,726,896
Eastman Chemical Co.		255,026			19,392,177
Huntsman Corp.		597,400			13,220,462
PPG Industries, Inc.		205,067			25,657,983
Sherwin-Williams Co.		26,458			15,142,443
					207,770,129
Containers & Packaging - 0.93%
Crown Holdings, Inc.A		464,700			33,848,748
International Paper Co.		383,786			16,763,773
					50,612,521
Metals & Mining - 0.79%
Freeport-McMoRan, Inc.		1,047,100			10,282,522
Newmont Goldcorp Corp.		823,000			32,697,790
					42,980,312
Total Materials					301,362,962

See accompanying notes

14

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares			Fair Value
COMMON STOCKS - 96.86% (continued)
Real Estate - 0.22%
Equity Real Estate Investment Trusts (REITs) - 0.22%
Gaming and Leisure Properties, Inc.			172,600		$	6,966,136
Public Storage			21,773			4,852,331
						11,818,467
Total Real Estate						11,818,467
Utilities - 3.83%
Electric Utilities - 3.10%
Duke Energy Corp.			304,634			28,714,801
Entergy Corp.			396,426			48,157,830
FirstEnergy Corp.			375,368			18,137,782
PPL Corp.			855,254			28,642,456
Southern Co.			595,218			37,296,360
Xcel Energy, Inc.			105,186			6,680,363
						167,629,592
Multi-Utilities - 0.73%
Dominion Energy, Inc.			480,590			39,672,705
Total Utilities						207,302,297
Total Common Stocks (Cost $4,051,983,814)						5,245,623,742
SHORT-TERM INVESTMENTS - 3.18%
Investment Companies - 3.09%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%C D			167,279,955			167,279,955
	Principal Amount
U.S. Treasury Obligations - 0.09%
U.S. Treasury Bill, 1.87%, Due 2/13/2020E		$	5,000,000			4,978,078
Total Short-Term Investments (Cost $172,253,522)						172,258,033
	Shares
SECURITIES LENDING COLLATERAL - 0.38% (Cost $20,296,656)
Investment Companies - 0.38%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%C D			20,296,656			20,296,656
TOTAL INVESTMENTS - 100.42% (Cost $4,244,533,992)						5,438,178,431
LIABILITIES, NET OF OTHER ASSETS - (0.42%)						(22,742,940	)
TOTAL NET ASSETS - 100.00%					$	5,415,435,491
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2019 (Note 9).

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

^D 7-day yield.

^E This security or a piece thereof is held as segregated collateral.

ADR - American Depositary Receipt.

NVDR - Non Voting Depositary Receipt.

PLC - Public Limited Company.

See accompanying notes

15

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2019

Long Futures Contracts Open on October 31, 2019:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
S&P 500 E-Mini Index Futures	1,063	December 2019	$	158,748,860	$	161,352,770	$	2,603,910
			$	158,748,860	$	161,352,770	$	2,603,910

Index Abbreviations:
S&P 500	Standard & Poor’s U.S. Equity Large-Cap Index.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2019, the investments were classified as described below:

Large Cap Value Fund	Level 1		Level 2		Level 3		Total
Assets
Common Stocks	$	5,245,623,742	$	-	$	-	$	5,245,623,742
Short-Term Investments		167,279,955		4,978,078		-		172,258,033
Securities Lending Collateral		20,296,656		-		-		20,296,656
Total Investments in Securities - Assets	$	5,433,200,353	$	4,978,078	$	-	$	5,438,178,431
Financial Derivative Instruments - Assets
Futures Contracts	$	2,603,910	$	-	$	-	$	2,603,910
Total Financial Derivative Instruments - Assets	$	2,603,910	$	-	$	-	$	2,603,910

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2019, there were no transfers into or out of Level 3.

See accompanying notes

16

American Beacon Large Cap Value Fund^SM

Statement of Assets and Liabilities

October 31, 2019

Assets:
Investments in unaffiliated securities, at fair value† §	$	5,250,601,820
Investments in affiliated securities, at fair value‡		187,576,611
Dividends and interest receivable		5,580,380
Receivable for investments sold		631,038
Receivable for fund shares sold		2,179,647
Receivable for tax reclaims		578,349
Receivable for expense reimbursement (Note 2)		159,529
Receivable for variation margin on open futures contracts (Note 5)		2,606,286
Prepaid expenses		62,453
Total assets		5,449,976,113
Liabilities:
Payable for investments purchased		4,213,207
Payable for fund shares redeemed		3,551,384
Cash due to broker for futures contracts		635,735
Management and sub-advisory fees payable (Note 2)		5,178,226
Service fees payable (Note 2)		192,735
Transfer agent fees payable (Note 2)		88,793
Payable upon return of securities loaned (Note 9)§		20,296,656
Custody and fund accounting fees payable		87,866
Professional fees payable		61,108
Trustee fees payable (Note 2)		37,815
Payable for prospectus and shareholder reports		103,885
Other liabilities		93,212
Total liabilities		34,540,622
Net assets	$	5,415,435,491
Analysis of net assets:
Paid-in-capital	$	3,828,733,102
Total distributable earnings (deficits)A		1,586,702,389
Net assets	$	5,415,435,491
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		110,804,834
Y Class		10,727,471
Investor Class		43,161,993
Advisor Class		2,573,552
A Class		1,526,109
C Class		267,848
R6 Class		26,120,435
Net assets:
Institutional Class	$	3,137,789,485
Y Class	$	301,457,382
Investor Class	$	1,124,625,846
Advisor Class	$	66,077,449
A Class	$	39,157,098
C Class	$	6,811,169
R6 Class	$	739,517,062
Net asset value, offering and redemption price per share:
Institutional Class	$	28.32
Y Class	$	28.10
Investor Class	$	26.06
Advisor Class	$	25.68
A Class	$	25.66
A Class (offering price)	$	27.23
C Class	$	25.43
R6 Class	$	28.31
† Cost of investments in unaffiliated securities	$	4,056,957,381
‡ Cost of investments in affiliated securities	$	187,576,611
§ Fair value of securities on loan	$	48,563,589
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

17

American Beacon Large Cap Value Fund^SM

Statement of Operations

For the year ended October 31, 2019

Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	148,337,805
Dividend income from affiliated securities (Note 8)		3,661,511
Interest income		193,330
Income derived from securities lending (Note 9)		111,850
Total investment income		152,304,496
Expenses:
Management and sub-advisory fees (Note 2)		31,149,968
Transfer agent fees:
Institutional Class (Note 2)		1,094,270
Y Class (Note 2)		306,345
Investor Class		51,197
Advisor Class		3,261
A Class		2,298
R6 Class		19,962
Custody and fund accounting fees		636,870
Professional fees		273,021
Registration fees and expenses		136,955
Service fees (Note 2):
Investor Class		4,535,505
Advisor Class		164,549
A Class		72,845
C Class		6,803
Distribution fees (Note 2):
Advisor Class		164,038
A Class		117,558
C Class		66,992
Prospectus and shareholder report expenses		392,829
Trustee fees (Note 2)		428,587
Other expenses		637,734
Total expenses		40,261,587
Net fees waived and expenses (reimbursed) (Note 2)		(128,272	)
Net expenses		40,133,315
Net investment income		112,171,181
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesA		361,981,952
Commission recapture (Note 1)		47,799
Foreign currency transactions		(1,788	)
Futures contracts		4,328,396
Change in net unrealized appreciation of:
Investments in unaffiliated securitiesB		23,464,371
Futures contracts		14,221,296
Net gain from investments		404,042,026
Net increase in net assets resulting from operations	$	516,213,207
† Foreign taxes	$	1,092,237
A The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
B The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.

See accompanying notes

18

American Beacon Large Cap Value Fund^SM

Statement of Changes in Net Assets

	Year Ended October 31, 2019			Year Ended October 31, 2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	112,171,181		$	120,020,703
Net realized gain from investments in unaffiliated securities, commission recapture, foreign currency transactions, and futures contracts		366,356,359			496,658,492
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, and futures contracts		37,685,667			(479,861,151	)
Net increase in net assets resulting from operations		516,213,207			136,818,044
Distributions to shareholders:
Total retained earnings:
Institutional Class		(307,696,338	)		(459,420,239	)
Y Class		(24,499,396	)		(38,692,156	)
Investor Class		(128,259,878	)		(196,784,505	)
Advisor Class		(5,201,321	)		(8,664,880	)
A Class		(4,356,396	)		(4,240,901	)
C Class		(544,161	)		(808,195	)
R6 Class		(48,893,430	)		(17,634,896	)
Net distributions to shareholders		(519,450,920	)		(726,245,772	)
Capital share transactions (Note 11):
Proceeds from sales of shares		777,784,227			1,360,517,349
Reinvestment of dividends and distributions		486,264,603			686,933,740
Cost of shares redeemed		(2,033,070,711	)		(2,588,058,224	)
Net (decrease) in net assets from capital share transactions		(769,021,881	)		(540,607,135	)
Net (decrease) in net assets		(772,259,594	)		(1,130,034,863	)
Net assets:
Beginning of period		6,187,695,085			7,317,729,948
End of period	$	5,415,435,491		$	6,187,695,085

See accompanying notes

19

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of October 31, 2019, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon Large Cap Value Fund (the “Fund”). The remaining thirty-one active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a Delaware corporation and a wholly-owned subsidiary of Resolute Investment Managers, Inc. (“RIM”) organized in 1986 to provide business management, advisory, administrative, and asset management consulting services to the Trust and other investors. The Manager is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). RIM is, in turn, a wholly-owned subsidiary of Resolute Acquisition, Inc., which is a wholly-owned subsidiary of Resolute Topco, Inc., a wholly-owned subsidiary of Resolute Investment Holdings, LLC (“RIH”). RIH is owned primarily by Kelso Investment Associates VIII, L.P., KEP VI, LLC and Estancia Capital Partners L.P., investment funds affiliated with Kelso & Company, L.P. (“Kelso”) or Estancia Capital Management, LLC (“Estancia”), which are private equity firms.

Recent Accounting Pronouncements

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-08, Premium Amortization of Purchased Callable Debt Securities. The amendments in the ASU shorten the premium amortization period on a purchased callable debt security from the security’s contractual life to the earliest call date. It is anticipated that this change will enhance disclosures by reducing losses recognized when a security is called on an earlier date. This ASU is effective for fiscal years beginning after December 15, 2018. The Manager continues to evaluate the impact this ASU will have on the financial statements and other disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”). The amendments in the ASU impact disclosure requirements for fair value measurement. It is anticipated that this change will enhance the effectiveness of disclosures in the notes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and can include the entire standard or certain provisions that exclude or amend disclosures. For the year ended October 31, 2019, the Fund has chosen to adopt the standard. The adoption of this ASU guidance did not have a material impact on the financial statements and other disclosures.

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	Eligible Investors	Minimum Initial Investments
Institutional	Large institutional investors - sold directly or through intermediary channels.	$	250,000
Y Class	Large institutional retirement plan investors - sold directly or through intermediary channels.	$	100,000
Investor	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500
Advisor Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrators.	$	2,500
A Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”).	$	2,500

20

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Class	Eligible Investors	Minimum Initial Investments
C Class	Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC.	$	1,000
R6 Class	Large institutional retirement plan investors—sold through retirement plan sponsors.		None

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 based on 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 service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.

Significant Accounting Policies

The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the FASB Accounting Standards Codification Topic 946, Financial Services – Investment Companies, a part of Generally Accepted Accounting Principles (“U.S. GAAP”).

Security Transactions and Investment Income

Security transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.

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, net of foreign taxes, is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. Realized gains (losses) from securities sold are determined based on specific lot identification.

Distributions to Shareholders

The Fund distributes most or all of its net earnings and realized gains, if any, each taxable year in the form of dividends from net investment income and distributions of realized net capital gains and net gains from foreign currency transactions on an annual basis. The Fund does not have a fixed dividend rate and does not guarantee that it will pay any distributions in any particular period. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund may designate earnings and profits distributed to shareholders on the redemption of shares.

Commission Recapture

The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If the Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain in the Fund’s Statement of Operations, if applicable.

21

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Fund is allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Fund. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Fund on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Fund or nature of the services performed and relative applicability to the Fund.

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 liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.

2.  Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide the Fund with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of the Fund’s average daily net assets that is calculated and accrued daily according to the following schedule:

First $15 billion	0.35	%
Next $15 billion	0.325	%
Over $30 billion	0.30	%

The Trust, on behalf of the Fund, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Brandywine Global Investment Management, LLC; Hotchkis and Wiley Capital Management, LLC; and Massachusetts Financial Services Company (“Sub-Advisors”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets.

The Management and Sub-Advisory Fees paid by the Fund for the year ended October 31, 2019 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	19,827,185
Sub-Advisor Fees		0.20	%		11,322,783
Total		0.55	%	$	31,149,968

22

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the year ended October 31, 2019, the Manager received securities lending fees of $15,156 for the securities lending activities of the Fund.

Distribution Plans

The Fund, except for the Advisor, 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 separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the management fee received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

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

Service Plans

The Manager and the Trust entered into a Service Plan that obligates the Manager to oversee additional shareholder servicing of the Investor, Advisor, A, and C Classes of the Fund. As compensation for performing the duties required under the Service Plan, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Fund.

Sub-Transfer Agent Fees

The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to Board approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the year ended October 31, 2019, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Large Cap Value	$	1,289,142

23

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

As of October 31, 2019, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent  Fees
Large Cap Value	$	41,540

Investments in Affiliated Funds

The Fund may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Fund in connection with securities lending may also be invested in the USG Select Fund. The Fund and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended October 31, 2019, the Manager earned fees on the Fund’s direct investments and securities lending collateral investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral Investments  in USG Select Fund		Total
Large Cap Value	$	165,292	$	33,248	$	198,540

Interfund Credit Facility

Pursuant to an exemptive order issued by the SEC, the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2019, the Fund participated as a lender by loaning an average amount of $6,352,992 for 131 days at an average interest rate of 2.96% with interest charges earned of $67,332. This amount is included in “Interest income” on the Statement of Operations.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Fund to the extent that total operating expenses exceed the Fund’s expense cap. During the year ended October 31, 2019, the Manager waived and/or reimbursed expenses as follows:

			Expense Cap								Expiration of Reimbursed Expenses
Fund	Class		11/1/2018 - 10/31/2019			Reimbursed Expenses		(Recouped) Expenses
Large Cap Value		R6		0.58	%	$	169,110	$	(40,838	)		2021 - 2022

24

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Of these amounts, $159,529 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at October 31, 2019.

The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years after the date of the Manager’s waiver/reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. The reimbursed expenses listed above will expire in 2021 - 2022. The Fund did not record a liability for potential reimbursement due to the current assessment that a reimbursement is uncertain. The carryover of excess expenses potentially reimbursable to the Manager are as follows:

Fund	Recouped Expenses		Excess Expense Carryover		Expired Expense Carryover		Expiration of Reimbursed Expenses
Large Cap Value	$	29,307	$	-	$	-		2020 – 2021
Large Cap Value		1,950		-		-		2019 - 2020

Sales Commissions

The Fund’s Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers and it may be used to offset distribution related expenses. During the year ended October 31, 2019, RID collected $527 from the sale of Class A Shares of the Fund.

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 Fund’s Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2019, there were no CDSC fees collected for Class A Shares of 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 Fund’s Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2019, CDSC fees of $3,155 were collected for Class C Shares of the Fund.

Trustee Fees and Expenses

As compensation for their service to the Trusts, each Trustee receives an annual retainer of $120,000, plus $10,000 for each Board meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board Chair receives an additional annual retainer of $50,000 as well as a $2,500 fee each quarter for attendance at the committee meetings. The Chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each fund of the Trusts according to its respective net assets.

25

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

3.  Security Valuation and Fair Value Measurements

The price of the Fund’s shares is based on its net asset value (“NAV”) per share. The Fund’s NAV is computed by adding total assets, subtracting all the Fund’s liabilities, and dividing the result by the total number of shares outstanding.

The NAV of each class of the Fund’s shares is determined based on a pro rata allocation of the Fund’s investment income, expenses and total capital gains and losses. The Fund’s NAV per share is determined each business day as of the regular close of trading on the New York Stock Exchange (“NYSE” or “Exchange”), which is typically 4:00 p.m. Eastern Time (“ET”). However, if trading on the NYSE closes at a time other than 4:00 p.m. ET, the Fund’s NAV per share typically would still be determined as of the regular close of trading on the NYSE. The Fund does not price its shares on days that the NYSE is closed. Foreign exchanges may permit trading in foreign securities on days when the Fund is not open for business, which may result in the value of the Fund’s portfolio investments being affected at a time when you are unable to buy or sell shares.

Equity securities, including shares of closed-end funds and exchange-traded funds (“ETFs”), are valued at the last sale price or official closing price taken from the primary exchange in which each security trades. Investments in other mutual funds are valued at the closing NAV per share on the day of valuation. Debt securities are valued at bid quotes from broker/dealers or evaluated bid prices from pricing services, who may consider a number of inputs and factors, such as prices of comparable securities, yield curves, spreads, credit ratings, coupon rates, maturity, default rates, and underlying collateral. Futures are valued based on their daily settlement prices. Exchange-traded and over-the-counter (“OTC”) options are valued at the last sale price. Options with no last sale for the day are priced at mid quote. Swaps are valued at evaluated mid prices from pricing services.

The valuation of securities traded on foreign markets and certain fixed-income securities will generally be based on prices determined as of the earlier closing time of the markets on which they primarily trade unless a significant event has occurred. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. ET.

Securities may be valued at fair value, as determined in good faith and pursuant to procedures approved by the Board, under certain limited circumstances. For example, fair value pricing will be used when market quotations are not readily available or reliable, as determined by the Manager, such as when (i) trading for a security is restricted or stopped; (ii) a security’s trading market is closed (other than customary closings); or (iii) a security has been de-listed from a national exchange. A security with limited market liquidity may require fair value pricing if the Manager determines that the available price does not reflect the security’s true market value. In addition, if a significant event that the Manager determines to affect the value of one or more securities held by the Fund occurs after the close of a related exchange but before the determination of the Fund’s NAV, fair value pricing may be used on the affected security or securities. Securities of small-capitalization companies are also more likely to require a fair value determination using these procedures because they are more thinly traded and less liquid than the securities of larger-capitalization companies. The Fund may fair value securities as a result of significant events occurring after the close of the foreign markets in which the Fund invests as described below. In addition, the Fund may invest in illiquid securities requiring these procedures.

The Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund’s 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. If the Manager determines that the last quoted prices of non-U.S. securities will, in its judgment, materially affect the value of some or all its portfolio securities, the Manager can 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

26

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

and baskets of foreign securities. These securities are fair valued using a pricing service, using methods approved by the Board, that considers the 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 American Depositary Receipts (“ADRs”) and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. The Fund uses outside pricing services to provide 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.

Attempts to determine the fair value of securities introduce an element of subjectivity to the pricing of securities. As a result, the price of a security determined through fair valuation techniques may differ from the price quoted or published by other sources and may not accurately reflect the market value of the security when trading resumes. If a reliable market quotation becomes available for a security formerly valued through fair valuation techniques, the Manager compares the new market quotation to the fair value price to evaluate the effectiveness of the Fund’s fair valuation procedures. If any significant discrepancies are found, the Manager may adjust the Fund’s fair valuation procedures.

Valuation Inputs

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

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

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

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

4.  Securities and Other Investments

American Depositary Receipts and Non-Voting Depositary Receipts

ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Non-Voting Depositary Receipts (“NVDRs”) represent financial interests in an issuer but the holder is not entitled to any voting rights. 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

27

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

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 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.

Common Stock

Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or OTC. OTC stock may be less liquid than exchange-traded stock.

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, unit investment trusts, and other investment companies of the Trust. The Fund may invest in investment company securities advised by the Manager or a sub-advisor. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Fund becomes a shareholder of that investment company. As a result, the Fund’s shareholders indirectly will bear the Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s 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.

Publicly Traded Partnerships; Master Limited Partnerships

The Fund may invest in publicly traded partnerships such as master limited partnerships (“MLPs”). MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the OTC market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. An MLP also may be an entity similar to a limited partnership, such as a limited liability company, which has a manager or managing member and non-managing members (who are like limited partners). The general partner or partners are jointly and severally responsible for the liabilities of the MLP. A Fund invests as a limited partner and normally would not be liable for the debts of an MLP beyond the amount the Fund has invested therein but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to a limited partner. The right of an MLP’s creditors would continue even after a Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.

28

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

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.

5.  Financial Derivative Instruments

The Fund may utilize derivative instruments to gain market exposure on cash balances to hedge foreign currency exposure or reduce market exposure in anticipation of liquidity needs. 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.

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.

During the year ended October 31, 2019, the Fund entered into futures contracts primarily for exposing cash to markets.

The Fund’s average 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 the purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.

Average Futures Contracts Outstanding
Fund	Year Ended October 31, 2019
Large Cap Value		1,075

29

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

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

Fair values of financial instruments on the Statement of Assets and Liabilities as of October 31, 2019:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Receivable for variation margin from open futures contracts(2)		$	-		$	-		$	-		$	-		$	2,603,910		$	2,603,910
The effect of financial derivative instruments on the Statement of Operations as of October 31, 2019:
	Derivatives not accounted for as hedging instruments
Realized gain (loss) from derivatives recognized as a result of operations	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Futures contracts		$	-		$	-		$	-		$	-		$	4,328,396		$	4,328,396
Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Futures contracts		$	-		$	-		$	-		$	-		$	14,221,296		$	14,221,296

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

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

Offsetting Assets and Liabilities

The Fund is a party to enforceable master netting agreements between brokers and counterparties 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 Statement 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, if applicable. 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, October 31, 2019.

Offsetting of Financial and Derivative Assets as of October 31, 2019:
	Assets			Liabilities
Futures Contracts(1)	$	2,603,910		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	2,603,910		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(2,606,910	)	$	-

	Remaining Contractual Maturity of the Agreements As of October 31, 2019
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	20,296,656	$	-	$	-	$	-	$	20,296,656
Total Borrowings	$	20,296,656	$	-	$	-	$	-	$	20,296,656
Gross amount of recognized liabilities for securities lending transactions									$	20,296,656

⁽¹⁾ Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedule of Investments footnotes. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

30

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

6.  Principal Risks

Investing in the Fund may involve certain risks including, but not limited to, those described below.

Equity Investments Risk

Equity securities are subject to market risk. The Fund’s investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional risk. The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company. Preferred stocks and convertible securities are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency fluctuations and political and financial instability in the home country of a particular depositary receipt or foreign stock.

Foreign Investing and Emerging Markets Risk

Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. To the extent the Fund invests a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region. In addition, the economies and political environments of emerging market countries tend to be more unstable than those of developed countries, resulting in more volatile rates of return than the developed markets and substantially greater risk to investors. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currency and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depository or their agents goes bankrupt. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than, or in addition to, investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities, resulting in increased volatility and limited liquidity for emerging market securities; trading suspensions; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return.

Futures Contracts Risk

Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).

31

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Market Risk

Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects. Conditions in the U.S. and many foreign economies have resulted, and may continue to result, in certain instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In some cases, traditional market participants have been less willing to make a market in some types of debt instruments, which has affected the liquidity of those instruments. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Treasury, causing the prices of these securities to rise and the yields to decline. Reduced liquidity in fixed income and credit markets may negatively affect many issuers worldwide. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations in ways that cannot necessarily be foreseen at the present time.

In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. In some countries where economic conditions are recovering, they are nevertheless perceived as still fragile. Withdrawal of government support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding, could adversely impact the value and liquidity of certain securities. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations, including changes in tax laws. The impact of new financial regulation legislation on the markets and the practical implications for market participants may not be fully known for some time. Regulatory changes are causing some financial services companies to exit long-standing lines of business, resulting in dislocations for other market participants. In addition, political and diplomatic events within the U.S. and abroad, such as the U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan, the threat of a federal government shutdown and threats not to increase the federal government’s debt limit, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The U.S. government has recently reduced federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets’ expectations for changes in government policies are not borne out.

Changes in market conditions will not have the same impact on all types of securities. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact of a significant rate increase on various markets. For example, because investors may buy securities or other investments with borrowed money, a significant increase in interest rates may cause a decline in the markets for those investments. Because of the sharp decline in the worldwide price of oil, there is a concern that oil producing nations may withdraw significant assets now held in U.S. Treasuries, which could force a substantial increase in interest rates. Regulators have expressed concern that rate increases may cause investors to sell fixed income securities faster than the market can absorb them, contributing to price volatility. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse. The precise details and the resulting impact of the United Kingdom’s vote to leave the European Union (the “EU”), commonly referred to as “Brexit,” are not yet known. The effect on the United Kingdom’s economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are matters to be negotiated. The outcomes may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time, which could significantly adversely affect the value of the Fund’s investments in the United Kingdom and Europe.

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American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Multiple Sub-Advisor Risk

The Manager may allocate the Fund’s assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Fund’s assets. To a significant extent, the Fund’s performance will depend on the success of the Manager in allocating the Fund’s assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-advisor manages its allocated portion of the Fund independently from another sub-advisor, the same security may be held in different portions of the Fund, or may be acquired for one portion of the Fund at a time when a sub-advisor to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Fund’s holdings. Similarly, under some market conditions, one sub-advisor may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-advisor believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Fund. Because each sub-advisor directs the trading for its own portion of the Fund, and does not aggregate its transactions with those of the other sub-advisors, the Fund may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Fund’s assets among the Fund’s sub-advisors in a manner that it believes is consistent with achieving the Fund’s investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Fund’s assets among sub-advisors, due to factors that could impact the Manager’s revenues and profits.

Other Investment Companies Risk

The Fund may invest in shares of other registered investment companies, including money market funds that are advised by the Manager. To the extent that the Funds invests in shares of other registered investment companies, the Fund will indirectly bear fees and expenses, including for example, advisory and administrative fees, charged by those investment companies in addition to the Funds’ direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Funds’ investments in money market funds are subject to interest rate risk, credit risk, and market risk. The Fund must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Funds’ investment will decline, adversely affecting the Funds’ performance. To the extent the Funds invest in other investment companies that invest in equity securities, fixed-income securities and/or foreign securities, or track an index, the Fund is subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject.

Sector Risk

Sector risk is the risk associated with a Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase.

To the extent a Fund invests significantly in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than investment companies investing more broadly.

Securities Lending Risk

A Fund may lend its portfolio securities to brokers, dealers and financial institutions to seek income. There is a risk that a borrower may default on its obligations to return loaned securities; however, a Fund’s securities lending agent indemnifies the Fund against that risk. There is a risk that the assets of a Fund’s securities lending

33

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

agent may be insufficient to satisfy any contractual indemnification requirements to the Fund. Borrowers of a Fund’s securities typically provide collateral in the form of cash that is reinvested in securities. A Fund will be responsible for the risks associated with the investment of cash collateral, including any collateral invested in an affiliated money market fund. A Fund may lose money on its investment of cash collateral or may fail to earn sufficient income on its investment to meet obligations to the borrower. In addition, delays may occur in the recovery of securities from borrowers, which could interfere with a Fund’s ability to vote proxies or to settle transactions and there is the risk of possible loss of rights in the collateral should the borrower fail financially. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.    

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 distributions 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 unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2019 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 expenses” on the Statement of Operations.

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 (depreciation), as applicable, as the income is earned or capital gains are recorded.

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 tax character of distributions paid were as follows:

	Year Ended October 31, 2019		Year Ended October 31, 2018
Distributions paid from:
Ordinary income*
Institutional Class	$	82,267,452	$	165,506,978
Y Class		6,344,886		13,806,107
Investor Class		30,326,749		66,628,592
Advisor Class		1,133,733		2,835,000
A Class		1,059,821		1,445,057
C Class		88,990		235,964
R6 Class		13,223,221		6,390,376
Long-term capital gains
Institutional Class		225,428,886		293,913,261
Y Class		18,154,510		24,886,049
Investor Class		97,933,129		130,155,913
Advisor Class		4,067,588		5,829,879
A Class		3,296,575		2,795,844
C Class		455,171		572,231
R6 Class		35,670,209		11,244,521
Total distributions paid	$	519,450,920	$	726,245,772

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

34

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

As of October 31, 2019 the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Large Cap Value	$4,339,764,821	$	1,344,205,897	$	(245,792,287	)	$	1,098,413,610

Fund	Net Unrealized Appreciation (Depreciation)	Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)		Other Temporary Differences		Distributable Earnings
Large Cap Value	$1,098,413,610	$	102,769,462	$	385,519,316	$	-	$	1	$	1,586,702,389

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains (losses) on certain derivative instruments, and reclassifications of income from investments in real estate investment securities and publicly traded partnerships.

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

Accordingly, the following amounts represent current year permanent differences derived from tax-exempt interest and nondeductible expenses from investments in publicly traded partnerships as of October 31, 2019:

Fund	Paid-In-Capital		Distributable Earnings/(Deficits)
Large Cap Value	$	58,968	$	(58,968	)

Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the Fund in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.

As of October 31, 2019, the Fund did not have any capital loss carryforwards.

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2019 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
Large Cap Value	$	1,235,765,286	$	2,270,634,320

A summary of the Fund’s transactions in the USG Select Fund for the year ended October 31, 2019 were as follows:

Fund	Type of Transaction	October 31, 2018 Shares/Fair Value		Purchases		Sales		October 31, 2019 Shares/Fair Value		Dividend Income
Large Cap Value	Direct	$	266,324,811	$	2,525,364,188	$	2,624,409,044	$	167,279,955	$	3,661,511
Large Cap Value	Securities Lending		17,240,346		447,522,595		444,466,285		20,296,656		N/A

35

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

9.  Securities Lending

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

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

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

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

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

As of October 31, 2019, the value of outstanding securities on loan and the value of collateral were as follows:

Fund	Market Value of Securities on Loan		Cash Collateral Received		Non-Cash Collateral Received		Total Collateral Received
Large Cap Value	$	48,563,589	$	20,296,656	$	29,714,969	$	50,011,625

Cash collateral is listed on the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statement of Operations.

Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statement of Assets and Liabilities.

36

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

10.  Borrowing Arrangements

Effective November 15, 2018 (the “Effective Date”), the Fund, along with certain other funds managed by the Manager (“Participating Funds”), entered into a committed revolving line of credit (the “Committed Line”) agreement with State Street Bank and Trust Company (the “Bank”) to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Committed Line is $250 million with interest at a rate equal to the higher of (a) one-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on amounts borrowed. Each of the Participating Funds paid a closing fee of $100,000 on the Effective Date and a quarterly commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 14, 2019, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

On the Effective Date, the Fund, along with certain other Participating Funds managed by the Manager, also entered into an uncommitted discretionary demand revolving line of credit (the “Uncommitted Line”) agreement with the Bank to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Uncommitted Line is $50 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on each outstanding loan. Each of the Participating Funds paid a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 14, 2019 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

The Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Other expenses” on the Statement of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.

During the year ended October 31, 2019, the Fund did not utilize this facility.

11.  Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund:

	Institutional Class
	Year Ended October 31,
	2019						2018
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		12,472,307		$	327,028,863			15,590,380		$	461,010,040
Reinvestment of dividends		12,176,926			280,069,287			14,507,737			424,641,445
Shares redeemed		(44,099,255	)		(1,164,568,728	)		(53,655,757	)		(1,600,135,398	)
Net (decrease) in shares outstanding		(19,450,022	)	$	(557,470,578	)		(23,557,640	)	$	(714,483,913	)
	Y Class
	Year Ended October 31,
	2019						2018
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		2,802,221		$	72,004,319			3,099,705		$	91,175,749
Reinvestment of dividends		1,034,674			23,631,954			1,294,567			37,646,020
Shares redeemed		(3,676,176	)		(96,626,161	)		(6,308,043	)		(182,284,089	)
Net increase (decrease) in shares outstanding		160,719		$	(989,888	)		(1,913,771	)	$	(53,462,320	)
	Investor Class
	Year Ended October 31,
	2019						2018
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		4,427,172		$	107,951,684			6,511,604		$	180,144,427
Reinvestment of dividends		5,946,641			126,187,719			7,135,711			194,091,350
Shares redeemed		(24,387,033	)		(587,725,924	)		(25,281,746	)		(699,918,301	)
Net (decrease) in shares outstanding		(14,013,220	)	$	(353,586,521	)		(11,634,431	)	$	(325,682,524	)

37

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

	Advisor Class
	Year Ended October 31,
	2019						2018
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		607,878		$	13,597,178			327,661		$	8,945,251
Reinvestment of dividends		232,028			4,858,669			297,468			7,987,006
Shares redeemed		(686,434	)		(16,861,299	)		(1,295,285	)		(35,519,351	)
Net increase (decrease) in shares outstanding		153,472		$	1,594,548			(670,156	)	$	(18,587,094	)
	A Class
	Year Ended October 31,
	2019						2018
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		993,379		$	22,618,536			652,905		$	17,333,416
Reinvestment of dividends		206,632			4,320,676			156,140			4,195,476
Shares redeemed		(1,316,813	)		(31,831,074	)		(567,054	)		(15,500,596	)
Net increase (decrease) in shares outstanding		(116,802	)	$	(4,891,862	)		241,991		$	6,028,296
	C Class
	Year Ended October 31,
	2019						2018
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		63,051		$	1,486,421			28,678		$	766,750
Reinvestment of dividends		24,012			500,403			27,603			737,547
Shares redeemed		(85,733	)		(2,081,682	)		(85,211	)		(2,307,165	)
Net increase (decrease) in shares outstanding		1,330		$	(94,858	)		(28,930	)	$	(802,868	)
	R6 Class
	Year Ended October 31,
	2019						2018
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		8,939,449		$	233,097,226			19,947,926		$	601,141,716
Reinvestment of dividends		2,031,139			46,695,895			602,696			17,634,896
Shares redeemed		(4,956,502	)		(133,375,843	)		(1,767,061	)		(52,393,324	)
Net increase in shares outstanding		6,014,086		$	146,417,278			18,783,561		$	566,383,288

12.  Subsequent Events

At meetings held on November 11-12, 2019, the Board of the Trust approved the termination of Brandywine Global Investment Management, LLC on behalf of the Fund, effective on or about January 15, 2020.

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no additional material events that would require disclosure in the Fund’s financial statements through this date.

38

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional ClassA
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	28.41		$	30.98		$	25.80		$	28.38		$	31.21
Income (loss) from investment operations:
Net investment income		0.63			0.63			0.59			0.61			0.55
Net gains (losses) on investments (both realized and unrealized)		1.69			(0.07	)		5.41			(0.29	)		(0.70	)
Total income (loss) from investment operations		2.32			0.56			6.00			0.32			(0.15	)
Less distributions:
Dividends from net investment income		(0.55	)		(0.55	)		(0.60	)		(0.52	)		(0.67	)
Distributions from net realized gains		(1.86	)		(2.58	)		(0.22	)		(2.38	)		(2.01	)
Total distributions		(2.41	)		(3.13	)		(0.82	)		(2.90	)		(2.68	)
Net asset value, end of period	$	28.32		$	28.41		$	30.98		$	25.80		$	28.38
Total returnB		10.14	%		1.51	%		23.60	%		1.69	%		(0.76	)%
Ratios and supplemental data:
Net assets, end of period	$	3,137,789,485		$	3,700,700,522		$	4,765,771,483		$	5,137,688,375		$	6,198,883,300
Ratios to average net assets:
Expenses, before reimbursements		0.63	%		0.62	%		0.60	%		0.60	%		0.58	%
Expenses, net of reimbursements		0.63	%		0.62	%		0.60	%		0.60	%		0.58	%
Net investment income, before expense reimbursements		2.07	%		1.83	%		1.78	%		2.16	%		1.88	%
Net investment income, net of reimbursements		2.07	%		1.83	%		1.78	%		2.16	%		1.88	%
Portfolio turnover rate		23	%		23	%		25	%		25	%		32	%

^A  On May 31, 2016, the AMR Class closed and the assets were merged into the Institutional Class.

^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 U.S. GAAP 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.

See accompanying notes

39

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	28.20		$	30.78		$	25.64		$	28.21		$	31.04
Income (loss) from investment operations:
Net investment income		0.56			0.57			0.48			0.59			0.56
Net gains (losses) on investments (both realized and unrealized)		1.72			(0.04	)		5.46			(0.29	)		(0.72	)
Total income (loss) from investment operations		2.28			0.53			5.94			0.30			(0.16	)
Less distributions:
Dividends from net investment income		(0.52	)		(0.53	)		(0.58	)		(0.49	)		(0.66	)
Distributions from net realized gains		(1.86	)		(2.58	)		(0.22	)		(2.38	)		(2.01	)
Total distributions		(2.38	)		(3.11	)		(0.80	)		(2.87	)		(2.67	)
Net asset value, end of period	$	28.10		$	28.20		$	30.78		$	25.64		$	28.21
Total returnA		10.05	%		1.42	%		23.51	%		1.61	%		(0.80	)%
Ratios and supplemental data:
Net assets, end of period	$	301,457,382		$	298,017,629		$	384,155,569		$	349,542,346		$	419,096,844
Ratios to average net assets:
Expenses, before reimbursements		0.70	%		0.68	%		0.67	%		0.67	%		0.67	%
Expenses, net of reimbursements		0.70	%		0.68	%		0.67	%		0.67	%		0.67	%
Net investment income, before expense reimbursements		1.98	%		1.77	%		1.69	%		2.08	%		1.80	%
Net investment income, net of reimbursements		1.98	%		1.77	%		1.69	%		2.08	%		1.80	%
Portfolio turnover rate		23	%		23	%		25	%		25	%		32	%

^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 U.S. GAAP 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.

See accompanying notes

40

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	26.33		$	28.92		$	24.13		$	26.70		$	29.51
Income (loss) from investment operations:
Net investment income		0.41			0.41			0.40			0.46			0.45
Net gains (losses) on investments (both realized and unrealized)		1.63			0.02			5.12			(0.25	)		(0.68	)
Total income (loss) from investment operations		2.04			0.43			5.52			0.21			(0.23	)
Less distributions:
Dividends from net investment income		(0.45	)		(0.44	)		(0.51	)		(0.40	)		(0.57	)
Distributions from net realized gains		(1.86	)		(2.58	)		(0.22	)		(2.38	)		(2.01	)
Total distributions		(2.31	)		(3.02	)		(0.73	)		(2.78	)		(2.58	)
Net asset value, end of period	$	26.06		$	26.33		$	28.92		$	24.13		$	26.70
Total returnA		9.77	%		1.18	%		23.20	%		1.33	%		(1.07	)%
Ratios and supplemental data:
Net assets, end of period	$	1,124,625,846		$	1,505,354,807		$	1,990,199,621		$	2,245,534,741		$	3,167,585,961
Ratios to average net assets:
Expenses, before reimbursements		0.96	%		0.95	%		0.92	%		0.93	%		0.93	%
Expenses, net of reimbursements		0.96	%		0.95	%		0.92	%		0.93	%		0.93	%
Net investment income, before expense reimbursements		1.74	%		1.50	%		1.46	%		1.84	%		1.54	%
Net investment income, net of reimbursements		1.74	%		1.50	%		1.46	%		1.84	%		1.54	%
Portfolio turnover rate		23	%		23	%		25	%		25	%		32	%

^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 U.S. GAAP 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.

See accompanying notes

41

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor ClassA
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	25.95		$	28.54		$	23.82		$	26.40		$	29.24
Income (loss) from investment operations:
Net investment income		0.47			0.28			0.21			0.40			0.40
Net gains (losses) on investments (both realized and unrealized)		1.52			0.10			5.20			(0.22	)		(0.66	)
Total income (loss) from investment operations		1.99			0.38			5.41			0.18			(0.26	)
Less distributions:
Dividends from net investment income		(0.40	)		(0.39	)		(0.47	)		(0.38	)		(0.57	)
Distributions from net realized gains		(1.86	)		(2.58	)		(0.22	)		(2.38	)		(2.01	)
Total distributions		(2.26	)		(2.97	)		(0.69	)		(2.76	)		(2.58	)
Net asset value, end of period	$	25.68		$	25.95		$	28.54		$	23.82		$	26.40
Total returnB		9.64	%		1.00	%		23.00	%		1.21	%		(1.19	)%
Ratios and supplemental data:
Net assets, end of period	$	66,077,449		$	62,811,940		$	88,196,090		$	113,168,437		$	140,975,319
Ratios to average net assets:
Expenses, before reimbursements		1.10	%		1.09	%		1.07	%		1.08	%		1.07	%
Expenses, net of reimbursements		1.10	%		1.09	%		1.07	%		1.08	%		1.07	%
Net investment income, before expense reimbursements		1.58	%		1.36	%		1.31	%		1.69	%		1.40	%
Net investment income, net of reimbursements		1.58	%		1.36	%		1.31	%		1.69	%		1.40	%
Portfolio turnover rate		23	%		23	%		25	%		25	%		32	%

^A  On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class.

^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 U.S. GAAP 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.

See accompanying notes

42

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	26.00		$	28.61		$	23.90		$	26.51		$	29.38
Income (loss) from investment operations:
Net investment income		0.40			0.48			0.28			0.42			0.47
Net gains (losses) on investments (both realized and unrealized)		1.59			(0.06	)		5.17			(0.21	)		(0.71	)
Total income (loss) from investment operations		1.99			0.42			5.45			0.21			(0.24	)
Less distributions:
Dividends from net investment income		(0.47	)		(0.45	)		(0.52	)		(0.44	)		(0.62	)
Distributions from net realized gains		(1.86	)		(2.58	)		(0.22	)		(2.38	)		(2.01	)
Total distributions		(2.33	)		(3.03	)		(0.74	)		(2.82	)		(2.63	)
Net asset value, end of period	$	25.66		$	26.00		$	28.61		$	23.90		$	26.51
Total returnA		9.72	%		1.15	%		23.13	%		1.33	%		(1.14	)%
Ratios and supplemental data:
Net assets, end of period	$	39,157,098		$	42,722,617		$	40,073,435		$	35,071,001		$	39,401,153
Ratios to average net assets:
Expenses, before reimbursements		1.01	%		0.93	%		0.98	%		0.98	%		0.97	%
Expenses, net of reimbursements		1.01	%		0.93	%		0.98	%		0.98	%		0.97	%
Net investment income, before expense reimbursements		1.68	%		1.49	%		1.38	%		1.78	%		1.48	%
Net investment income, net of reimbursements		1.68	%		1.49	%		1.38	%		1.78	%		1.48	%
Portfolio turnover rate		23	%		23	%		25	%		25	%		32	%

^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 U.S. GAAP 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.

See accompanying notes

43

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2019			2018			2017			2016			2015
Net asset value, beginning of period	$	25.71		$	28.27		$	23.57		$	26.17		$	29.03
Income (loss) from investment operations:
Net investment income		0.26			0.21			0.09			0.20			0.27
Net gains (losses) on investments (both realized and unrealized)		1.57			0.05			5.11			(0.19	)		(0.70	)
Total income (loss) from investment operations		1.83			0.26			5.20			0.01			(0.43	)
Less distributions:
Dividends from net investment income		(0.25	)		(0.24	)		(0.28	)		(0.23	)		(0.42	)
Distributions from net realized gains		(1.86	)		(2.58	)		(0.22	)		(2.38	)		(2.01	)
Total distributions		(2.11	)		(2.82	)		(0.50	)		(2.61	)		(2.43	)
Net asset value, end of period	$	25.43		$	25.71		$	28.27		$	23.57		$	26.17
Total returnA		8.94	%		0.57	%		22.27	%		0.51	%		(1.83	)%
Ratios and supplemental data:
Net assets, end of period		$6,811,169		$	6,851,003		$	8,351,349		$	8,950,263		$	12,389,141
Ratios to average net assets:
Expenses, before reimbursements		1.70	%		1.64	%		1.72	%		1.74	%		1.73	%
Expenses, net of reimbursements		1.70	%B		1.54	%		1.72	%		1.74	%		1.73	%
Net investment income, before expense reimbursements		0.99	%		0.79	%		0.66	%		1.02	%		0.73	%
Net investment income, net of reimbursements		0.99	%		0.90	%		0.66	%		1.02	%		0.73	%
Portfolio turnover rate		23	%		23	%		25	%		25	%		32	%

^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 U.S. GAAP 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  This ratio does not include a voluntary reimbursement of service fees as included in the prior year.

See accompanying notes

44

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R6 Class
	Year Ended October 31,						February 28, 2017A to October 31,
	2019			2018			2017
Net asset value, beginning of period	$	28.41		$	30.98		$	28.64
Income from investment operations:
Net investment income		0.61			0.59			0.12
Net gains (losses) on investments (both realized and unrealized)		1.71			(0.02	)		2.22
Total income from investment operations		2.32			0.57			2.34
Less distributions:
Dividends from net investment income		(0.56	)		(0.56	)		-
Distributions from net realized gains		(1.86	)		(2.58	)		-
Total distributions		(2.42	)		(3.14	)		-
Net asset value, end of period	$	28.31		$	28.41		$	30.98
Total returnB		10.15	%		1.54	%		8.17	%C
Ratios and supplemental data:
Net assets, end of period	$	739,517,062		$	571,236,567		$	40,982,401
Ratios to average net assets:
Expenses, before reimbursements		0.60	%		0.59	%		0.60	%D
Expenses, net of reimbursements		0.58	%		0.58	%		0.58	%D
Net investment income, before expense reimbursements		2.07	%		1.75	%		1.38	%D
Net investment income, net of reimbursements		2.09	%		1.76	%		1.40	%D
Portfolio turnover rate		23	%		23	%		25	%E

^A  Commencement of operations.

^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 U.S. GAAP 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 28, 2017 through October 31, 2017 and is not annualized.

See accompanying notes

45

American Beacon Funds^SM

Federal Tax Information

October 31, 2019 (Unaudited)

Certain tax information regarding the Funds are required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2019. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2019.

The Fund designated the following items with regard to distributions paid during the fiscal year ended October 31, 2019. 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:
Large Cap Value		87.40	%
Qualified Dividend Income:
Large Cap Value		100.00	%
Long-Term Capital Gain Distributions:
Large Cap Value	$	385,006,068
Short-Term Capital Gain Distributions:
Large Cap Value	$	20,974,195

Shareholders will receive notification in January 2020 of the applicable tax information necessary to prepare their 2019 income tax returns.

46

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Renewal and Approval of Management Agreement and Investment Advisory Agreements

At in-person meetings held on May 9, 2019 and June 4-5, 2019 (collectively, the “Meetings”), the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 5, 2019 meeting, approved the renewal of:

(1) the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon Large Cap Value Fund (“Fund”); and

(2) the Investment Advisory Agreements among the Manager, the Trust, on behalf of the Fund, and each of Barrow, Hanley, Mewhinney & Strauss, LLC (“Barrow”), Brandywine Global Investment Management, LLC (“Brandywine”), Hotchkis and Wiley Capital Management, LLC (“Hotchkis”) and Massachusetts Financial Services Company (“MFS”) (each, a “subadvisor” and collectively, the “subadvisors”).

The Management Agreement and the Investment Advisory Agreements are referred to herein individually as an “Agreement” and collectively as the “Agreements.” In preparation for its consideration of the renewal of the Agreements, the Board undertook steps to gather and consider information furnished by the Manager, the subadvisors, Broadridge, Inc. (“Broadridge”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and the subadvisors.

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Fund as well as information from the Manager and the subadvisors. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Board received and evaluated such information as they deemed necessary. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to the Fund.

The Board noted that the Manager provides management and administrative services to the Fund pursuant to the Management Agreement. The Board considered that many mutual funds have separate contracts governing each type of service and observed that, with respect to such mutual funds, the actual management fee rates provided by Broadridge for peer group funds reflect the combined advisory and administrative expenses, reduced by any fee waivers and/or reimbursements.

A firm 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 the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations. 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 was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

Provided below is an overview of certain factors the Board considered in connection with its renewal and approval of the 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 investment advisory contracts, such as the Agreements. The memorandum explained the regulatory requirements surrounding the Board’s process for evaluating investment advisors and the terms of investment advisory contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Fund and its shareholders.

47

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

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

In determining whether to renew the Agreements, the Board considered the 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 the Fund; (3) the costs incurred by the Manager in rendering services to the Fund and its resulting profits or losses; (4) comparisons of services and fee rates with contracts entered into by the Manager or the subadvisors or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisors from their relationships with the Fund.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: the Fund’s long-term performance; the length of service of key investment personnel at the Manager; the cost structure of the Fund; the Manager’s culture of compliance and support that reduce risks to the Fund; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; and the Manager’s efforts to retain key employees and maintain staffing levels.

With respect to the renewal of the Investment Advisory Agreements, the Board considered the level of staffing and the size of the subadvisors. The Board also considered the adequacy of the resources committed to the Fund by the subadvisors, and whether those resources were commensurate with the needs of the Fund and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of the subadvisors. The Board also considered each subadvisor’s representations regarding its compliance program and code 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 the subadvisors were appropriate for the Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of the Fund relative to its Broadridge performance universe, Morningstar Category, and benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding Broadridge’s independent methodology for selecting the Fund’s Broadridge performance universe. The Board also considered that the performance universes selected by Broadridge may not provide appropriate comparisons for the Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by each subadvisor regarding the performance of its portion of the Fund relative to the performance of similar accounts or a composite of similar accounts managed by the subadvisor and the Fund’s benchmark index. In addition, the Board considered the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to the Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to the Fund.”

Costs of the Services Provided to the Fund and the Profits Realized by the Manager from its Relationship with the Fund. In analyzing the cost of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager earning a profit before and after the payment of distribution-related expenses by the Manager for the Fund. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. 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 Fund, the Manager represented that,

48

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility and regulatory requirements associated with managing the Fund.

The Board also noted that the Manager proposed to continue the expense waivers and reimbursements for the Fund’s R6 Class shares that were in place during the last fiscal year. The Board further considered that, with respect to the Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager. In addition, the Board considered that the Manager receives fees for overseeing the securities lending program on behalf of the Fund. The Board also noted that certain share classes of the Fund maintain higher expense ratios in order to compensate third-party financial intermediaries.

In analyzing the fee rates charged by each subadvisor in connection with its investment advisory services to the Fund, the Board considered representations made by each subadvisor that the fee rate negotiated by the Manager is favorable relative to the fee rates that the subadvisor charges for any comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board considered that it was advised that the subadvisors may not account for their profits on an account-by-account basis and that different firms 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 the Fund’s fee rates is set forth below under “Additional Considerations and Conclusions with Respect to the 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 Fund grows and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that, with respect to each subadvisor, the Manager has negotiated breakpoints in the subadvisory fee rate for the Fund. In addition, the Board noted the Manager’s representation that the Management Agreement contains fee schedule breakpoints at higher asset levels with respect to the Fund. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for the Fund provide for a reasonable sharing of benefits from any economies of scale with the Fund.

Benefits Derived from the Relationship with the Fund. 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 Fund, including greater exposure in the marketplace with respect to the Manager’s or a subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors. The Board also considered that the Manager may invest the Fund’s cash balances and cash collateral provided by the borrowers of the Fund’s securities in the American Beacon U.S. Government Money Market Select Fund, which the Manager manages directly. In addition, the Board noted that each subadvisor benefits from soft dollar arrangements for proprietary and/or third-party research. 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 Fund appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to the Fund

The performance comparisons below were made in comparison to the Fund’s Broadridge performance universe and Morningstar Category. With respect to the Broadridge performance universe, the 1^st Quintile represents the top 20 percent of the universe based on performance and the 5^th Quintile representing the bottom 20 percent of the universe based on performance. References below to the Fund’s Broadridge performance universe are to the universe of mutual funds with a comparable investment classification/objective included in the

49

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

analysis provided by Broadridge. In reviewing the performance, the Trustees viewed longer-term performance over a full market cycle as the most important consideration, because relative performance over shorter periods may be significantly impacted by market or economic events and not necessarily reflective of manager skill.

The expense comparisons below were made in comparison to the Fund’s Broadridge expense universe and Broadridge expense group, with the 1^st Quintile representing the lowest 20 percent of the universe or group based on lowest total expense and the 5^th Quintile representing the highest 20 percent of the universe or group based on highest total expense. References below to the Fund’s expense group and expense universe are to the respective group or universe of comparable mutual funds included in the analysis by Broadridge. A Broadridge expense group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge expense universe includes all funds in the investment classification/objective with a similar operating structure as the share class of the Fund included in the Broadridge comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Board also considered the Fund’s Morningstar fee level category. In reviewing expenses, the Board considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the subadvisors’ use of soft dollars was requested from the Manager and was considered by the Board.

In considering the renewal of the Management Agreement for the Fund, the Board considered the following additional factors:

Broadridge Total Expenses Excluding 12b-1 Fees and Morningstar Fee Level Ranking

Compared to Broadridge Expense Group	2nd Quintile
Compared to Broadridge Expense Universe	2nd Quintile
Morningstar Fee Level Ranking – Institutional Class	Below Average Expense Ratio

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2018)

Compared to Broadridge Performance Universe	4th Quintile
Compared to Morningstar Category	4th Quintile

In considering the renewal of the Investment Advisory Agreements with each subadvisor, the Board considered that the diversification of investment strategies facilitated by the Fund’s multi-manager structure permits the Fund to mitigate the risks associated with a single subadvisor. The Board also considered the following additional factors:

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2018)

Barrow	5 Years	2	nd Quintile
Brandywine	5 Years	5	th Quintile
Hotchkis	5 Years	3	rd Quintile
MFS	5 Years	1	st Quintile

The Board also considered: (1) Brandywine’s value-disciplined consistent process and consistent team; (2) the Manager’s explanation that Brandywine’s deep value investment style (in companies with more significant discounts to price-to-earnings and price-to book ratios relative to other investment managers) was out of favor for the latter part of 2018 but has rebounded in 2019; (3) information provided by each subadvisor regarding fee rates charged for managing assets in the same or a similar strategy as the subadvisor manages its allocation of the Fund; (4) Brandywine’s and Hotchkis’ improved recent short-term performance; (5) the Manager’s recommendation to continue to retain each subadvisor; and (6) the Manager’s representation that, while the Manager was recommending that the Board continue to retain Brandywine, the Manager continues to evaluate the performance of Brandywine’s portion of the Fund and whether to make any further recommendations with respect to that subadvisor.

50

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Based on these and other considerations, the Board: (1) concluded that the fees paid to the Manager and the subadvisors under the Management and Investment Advisory Agreements are fair and reasonable; and (2) determined that the Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund.

51

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. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty-six funds in the fund complex that includes the Trust, the American Beacon Select Funds, the American Beacon Institutional Funds Trust, the American Beacon Sound Point Enhanced Income Fund, American Beacon Apollo Total Return Fund and the American Beacon Sound Point Alternative Lending Fund. 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	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*
Alan D. Feld** (82)	Trustee since 1996	Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (49)	Trustee since 2015	Director, Kura MD, Inc. (local telehealth organization) (2015-present); Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Vice President & CFO, Sierra Health Foundation: Center for Health Program Management (California public benefit corporation) (2012-Present); Director, Innovative North State (2012-2015); Director, Sacramento Regional Technology Alliance (2011-2016); Director, Women’s Empowerment (2009-2014); Director, Valley Healthcare Staffing (2017-present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Joseph B. Armes (57)	Trustee since 2015	Chairman & CEO, CSW Industrials f/k/a Capital Southwest Corporation (investment company) (2015-Present); Chairman of the Board of Capital Southwest Corporation, predecessor to CSW Industrials, Inc. (2014-2017) (investment company); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-Present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Gerard J. Arpey (61)	Trustee since 2012	Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

52

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (58)	Trustee since 2004 Chair since 2019 Vice Chair 2018	Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Director, Tyler Technologies, Inc. (public sector software solutions company) (2014-Present); Director, Range Resources Corporation (oil and natural gas company) (2015-Present); Trustee, Cushing Closed-End and Open-End Funds and ETFs (2017-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Eugene J. Duffy (65)	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-Present); Principal and Executive Vice President, Paradigm Asset Management (1994-2014); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Claudia A. Holz (62)	Trustee since 2018	Partner, KPMG LLP (1990-2017); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Douglas A. Lindgren (57)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Managing Director, IPS Investment Management and Global Head, Content Management, UBS Wealth Management (2010-2016); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Richard A. Massman (76)	Trustee since 2004 Chair 2008-2018 Chair Emeritus since 2019	Consultant and General Counsel Emeritus, Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities) (2009-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Barbara J. McKenna, CFA (56)	Trustee since 2012	President/Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

53

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
R. Gerald Turner (73)	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 Select Funds (2001-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (64)	President since 2009	President (2009-2018), CEO and Director (2009-Present), and Chairman (2018-Present), American Beacon Advisors, Inc., President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present), Resolute Investment Holdings, LLC; President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present), Resolute Topco, Inc.; President (2015-2018); Director, and CEO (2015-Present), and Chairman (2018-Present), Resolute Acquisition, Inc.; President (2015-2018), Director and CEO (2015-Present), Chairman (2018-Present), Resolute Investment Managers, Inc.; Director, Chairman, President and CEO, Resolute Investment Distributors (2017-Present); Director, Chairman, President and CEO; Resolute Investment Services, Inc. (2017-Present); President and CEO, Lighthouse Holdings Parent, Inc. (2009-2015); President, CEO and Director, Lighthouse Holdings, Inc. (2009-2015); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-Present); Director, ARK Investment Management LLC (2016-Present); Director, Shapiro Capital Management LLC (2017-Present); Director, Chairman and CEO, Continuous Capital, LLC (2018-Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director and President, American Beacon Cayman Transformational Innovation Company, LTD., (2017-2018); President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); President American Beacon Cayman TargetRisk Company, Ltd. (2018-Present);Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-Present); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-Present); President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present); President, American Beacon Sound Point Alternative Lending Fund (2019-Present); Director, Green Harvest Asset Management (2019-Present).

54

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rosemary K. Behan (60)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Secretary and General Counsel, American Beacon Advisors, Inc. (2006-Present); Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015-Present); Vice President, Secretary and General Counsel, Resolute Investment Managers, Inc. (2015-Present); Secretary, Resolute Investment Distributors, Inc. (2017-Present); Vice President, Secretary and General Counsel, Resolute Investment Services, Inc. (2017-Present); Vice President and Secretary, Lighthouse Holdings Parent, Inc. (2008-2015); Vice President and Secretary, Lighthouse Holdings, Inc. (2008-2015); Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-Present); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Secretary, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-2018); Secretary, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Secretary, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Select Funds (2006-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Secretary, Green Harvest Asset Management (2019-Present).
Brian E. Brett (59)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), Vice President, Director of Sales (2004-2012), American Beacon Advisors, Inc.; Senior Vice President, Resolute Investment Managers, Inc. (2017-Present); Senior Vice President, Resolute Investment Distributors, Inc. (2018-Present), Senior Vice President, Resolute Investment Services, Inc. (2018-Present); Senior Vice President, Lighthouse Holdings Parent, Inc. (2008-2015); Senior Vice President, Lighthouse Holdings, Inc. (2008-2015); Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Paul B. Cavazos (50)	VP since 2016	Chief Investment Officer and Senior Vice President, American Beacon Advisors, Inc. (2016-Present); Chief Investment Officer, DTE Energy (2007-2016); Vice President, American Private Equity Management, L.L.C. (2017-Present); Vice President, American Beacon Select Funds (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Erica Duncan (49)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers (2018-Present); Vice President, Resolute Investment Services, Inc. (2018-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

55

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Melinda G. Heika (58)	Treasurer since 2010	Treasurer and CFO (2010-Present), American Beacon Advisors, Inc.; Treasurer, Resolute Topco, Inc. (2015-Present); Treasurer, Resolute Investment Holdings, LLC. (2015-Present); Treasurer, Resolute Acquisition, Inc. (2015-Present); Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017-2017); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, Lighthouse Holdings Parent Inc., (2010-2015); Treasurer, Lighthouse Holdings, Inc. (2010-2015); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-Present); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Treasurer, American Beacon Select Funds (2010-Present); Treasurer, American Beacon Institutional Funds Trust (2017-Present); Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present); Treasurer, Green Harvest Asset Management (2019-Present).
Terri L. McKinney (55)	VP since 2010	Vice President (2009-Present), Managing Director (2003-2009), American Beacon Advisors, Inc.; Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services, Inc (2018-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

56

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Jeffrey K. Ringdahl (44)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), Vice President (2010-2013), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice Present (2015-2018), Resolute Investment Holdings, LLC; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Topco, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Acquisition, Inc.; Director (2015-Present), President & COO (2018-Present), Senior Vice President (2015-2018), Resolute Investment Managers, Inc.; Director and Executive Vice President (2017-Present), Resolute Investment Distributors, Inc.; Director (2017-Present), President & COO (2018-Present), Executive Vice President (2017-2018), Resolute Investment Services, Inc.; Senior Vice President (2017-Present), Vice President (2012-2017), Manager (2015-Present), American Private Equity Management, LLC; Senior Vice President, Lighthouse Holdings Parent, Inc. (2013-2015); Senior Vice President, Lighthouse Holdings, Inc. (2013-2015); Trustee, American Beacon NextShares Trust (2015-Present); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-Present); Director, Shapiro Capital Management, LLC (2017-Present); Director, Executive Vice President & COO, Continuous Capital, LLC (2018-Present); Director and Vice President, American Beacon Cayman Transformational Innovation Company, Ltd., (2017-Present); Vice President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Vice President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Vice President, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Vice President, American Beacon Select Funds (2010-2018); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present), Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Samuel J. Silver (56)	VP Since 2011	Vice President (2011-Present), Chief Fixed Income Officer (2016-Present), American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Christina E. Sears (48)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Vice President, American Beacon Advisors, Inc. (2019-Present); Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Distributors (2017-Present); Vice President, Resolute Investment Services, Inc. (2019-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Chief Compliance Officer (2004-Present) and Assistant Secretary (1999-Present), American Beacon Select Funds; Chief Compliance Officer and Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).

57

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Sonia L. Bates (62)	Asst. Treasurer since 2011	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); Assistant Treasurer, Lighthouse Holdings Parent Inc. (2011-2015); Assistant Treasurer, Lighthouse Holdings, Inc. (2011-2015); Assistant Treasurer, American Private Equity Management, LLC (2012-Present); Assistant Treasurer, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-Present); Assistant Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Assistant Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Shelley D. Abrahams (44)	Assistant Secretary since 2008	Assistant Secretary, American Beacon Select Funds (2008-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).
Rebecca L. Harris (52)	Assistant Secretary since 2010	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services (2015-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Assistant Secretary, American Beacon Select Funds (2010-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Teresa A. Oxford (61)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2015-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees, other than Messrs. Feld and Massman to retire no later than the last day of the calendar year in which they reach the age of 75. As of 11/7/17, the Board approved a waiver of the mandatory retirement policy with respect to Mr. Massman, who turned 75 in November 2018, to permit him to continue to serve on the Board as Chair Emeritus through 12/31/19.

** Mr. Feld is deemed to be an “interested person” of the Trusts, 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 fiscal years to one or more of the Trust’s sub-advisors.

58

American Beacon Funds^SM

Privacy Policy

October 31, 2019 (Unaudited)

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.

59

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60

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:	On the Internet:
american_beacon.funds@ambeacon.com	Visit our website at www.americanbeaconfunds.com
By Telephone: Call (800) 658-5811	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules	Availability of Proxy Voting Policy and Records
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the first and third fiscal quarters. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Company Boston, Massachusetts TRANSFER AGENT DST Asset Manager Solutions, Inc. Quincy, Massachusetts INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, Texas

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

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

AR 10/19

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.

SMALL CAP VALUE FUND RISKS

Investing in small-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. Investing in value stocks may limit downside risk over time; however, the Fund may produce more modest gains than riskier stock funds as a trade-off for this potentially lower risk. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The use of futures contracts for cash management may subject the Fund to losing more money than invested. The Fund participates in a securities lending program. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

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

American Beacon Funds October 31, 2019

Contents

President’s Message	1
Market and Performance Overview	2
Expense Example	6
Report of Independent Registered Public Accounting Firm	8
Schedule of Investments:
American Beacon Small Cap Value Fund	9
Financial Statements	27
Notes to Financial Statements	30
Financial Highlights:
American Beacon Small Cap Value Fund	49
Federal Tax Information	56
Disclosure Regarding Approval of the Management and Investment Advisory Agreements	57
Trustees and Officers of the American Beacon Funds	62
Privacy Policy	69

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   In recent months, you’ve likely seen and heard news reports about disruptive headwinds in the global economy – including the U.S. trade war with China and its toll on the global economy, slowing global growth, the Federal Reserve’s series of rate cuts, Brexit, disruptions in the Middle East and protests in Hong Kong – and watched a flood of reaction in the world’s markets.   As Peter L. Bernstein said in his treatise on risk, Against the Gods: The Remarkable Story of Risk, published by John Wiley & Sons, Inc. in September 1998, “Volatility is a proxy for uncertainty and must be accommodated in measuring investment risk.”   During times of economic uncertainty and market volatility, fear of loss can be a powerful emotion – one that drives many investors to making short-term decisions subject to a variety of potential error-leading biases. Unfortunately, some short-term investment decisions may create more volatility rather than mitigate it.

Instead of dwelling on the markets’ short-term reaction to waves of negative global news, we encourage investors to focus on the horizon instead. Long-term investing isn’t about identifying and anticipating the next big market move, it is about identifying the right investment products for riding out those moves. As a long-term investor, you should keep in mind the three Ds: direction, discipline and diversification.

u Direction: Achieving your long-term financial goals requires an individualized plan of action. You may want your plan to provide some measure of protection against periods of geopolitical turmoil, economic uncertainty, market volatility and job insecurity. Your plan should be reviewed annually and be adjusted in the event your long-range needs change.

u Discipline: Long-term, systematic participation in an investment portfolio requires your resolution to stay the course. Spending time in the market – rather than trying to time the market – may place you in a better position to reach your long-term financial goals.

u Diversification: By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your investment portfolio. By allocating your investment portfolio according to your risk-tolerance level, you may be better positioned to weather storms and achieve your long-term financial goals.

Since 1986, American Beacon has endeavored to provide investors with a disciplined approach to realizing long-term financial goals. As a manager of managers, we strive to provide investment products that may enable investors to participate during market upswings while potentially insulating against market downswings.

Many of the sub-advisors to our mutual funds pursue upside capture and/or downside protection using proprietary strategies. The investment teams behind our mutual funds seek to produce consistent, long-term results rather than focus only on short-term movements in the markets. In managing our investment products, we emphasize identifying opportunities that offer the potential for long-term rewards.

Our management approach is more than a concept; it’s the cornerstone of our culture. And we strive to apply it at every turn as we seek to provide a well-diversified line of investment solutions to help our shareholders seek long-term rewards while mitigating volatility and risk.

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

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Domestic Equity Market Overview

October 31, 2019 (Unaudited)

For the 12-month period ended October 31, 2019, the U.S. equity markets rallied strongly after a depressed start to the period that saw market volatility spike to its highest level in seven years during the fourth quarter of 2018. The S&P 500 Index and the Dow Jones Industrial Average returned 14.33% and 10.32%, respectively, for the period. Growth broadly outperformed Value across all market caps; the Russell 1000 Growth Index and the Russell 1000 Value Index returned 17.10% and 11.21%, respectively, and the Russell Midcap Growth Index and the Russell Midcap Value Index returned 18.93% and 10.08%, respectively. Large and mid-cap stocks also did significantly better than small-cap stocks; the Russell 1000 Index returned 14.15% and the Russell Midcap Index returned 13.72%, compared to the Russell 2000 Index return of 4.90%.

All of this occurred in an environment that saw rising fears of economic recession as the current expansion entered its 11th year, intensified by the effects of an escalating trade war, as well as concerns over the ability of the Federal Reserve (the “Fed”) policy to forestall the effects of an economic downturn. Feeding these uncertainties, growth slowed during the period as the third quarter’s gross domestic product decelerated to 1.9% from its peak rate of 3.5% in the second quarter of 2018. Corporate earnings growth also slowed with profit growth.

The Fed did alter its policy course at year end 2018 and began lowering the federal funds rate in the third quarter of 2019. At the same time, the economic strength underlying the U.S. economy remained resilient with the September unemployment rate at 3.5%, a 40-year low. In addition, the consumer continued to show good strength with both income and expenditures growing at healthy rates. Also, ongoing tariff negotiations between the U.S. and China are providing hope to prospects of settlement. Collectively, all of these factors kept the markets positive going into the fiscal year end.

2

American Beacon Small Cap Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

The Investor Class of the American Beacon Small Cap Value Fund (the “Fund”) returned 1.67% for the twelve months ended October 31, 2019, underperforming the Russell 2000^® Value Index (the “Index”) return of 3.22% for the same period.

Comparison of Change in Value of a $10,000 Investment for the period from 10/31/2009 through 10/31/2019

Total Returns for the Period ended October 31, 2019
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of  $10,000 10/31/2009- 10/31/2019
Institutional Class (1,6)	AVFIX		2.01	%		7.31	%		5.44	%		11.29	%		$	29,154
Y Class (1,6)	ABSYX		1.93	%		7.22	%		5.36	%		11.18	%		$	28,864
Investor Class (1,6)	AVPAX		1.67	%		6.96	%		5.10	%		10.91	%		$	28,177
Advisor Class (1,6)	AASSX		1.48	%		6.78	%		4.92	%		10.74	%		$	27,740
A Class without sales charge (1,2,6)	ABSAX		1.56	%		6.87	%		5.01	%		10.79	%		$	27,854
A Class with sales charge (1,2,6)	ABSAX		(4.26	)%		4.78	%		3.78	%		10.13	%		$	26,246
C Class without sales charge (1,3,6)	ASVCX		0.85	%		6.16	%		4.28	%		10.04	%		$	26,035
C Class with sales charge (1,3,6)	ASVCX		(0.15	)%		6.16	%		4.28	%		10.04	%		$	26,035
R6 Class (1,4,6) . .	AASRX		2.01	%		7.33	%		5.45	%		11.30	%		$	29,164
Russell 2000® Value Index (5)			3.22	%		8.60	%		6.24	%		11.08	%		$	28,607

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. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights.

2. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 up to 5/17/10, the inception date of the A Class, and the returns of the A Class since its inception. Expenses of the A Class are higher than those of the Investor Class. As a result, total returns

3

American Beacon Small Cap Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

shown may be higher than they would have been had the A Class been in existence since 10/31/09. A portion of the fees charged to the A Class of the Fund was waived in 2010, 2012, 2013 and 2014 and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown for 2010, 2012, 2013 and 2014. The maximum sales charge for A Class is 5.75%.

3. Fund performance for the ten-year period represents the total returns achieved by the Investor Class from 10/31/09 up to 9/1/10, the inception date of the C Class, and the returns of the C Class since its inception. Expenses of the C Class are higher than those of the Investor Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 10/31/09. A portion of the fees charged to the C Class of the Fund was waived in 2010, 2012 and 2013, fully recovered in 2015, and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown in 2010, 2012, 2013 and 2018. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

4. Fund performance for the three-year, five-year and ten-year periods represents the returns achieved by the Institutional Class from 10/31/09 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the Institutional Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 10/31/09.

5. The Russell 2000 Value Index is an unmanaged index of those stocks in the Russell 2000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 2000 Value Index and Russell 2000 Index are registered trademarks of Frank Russell Company. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data, and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. One cannot directly invest in an index.

6. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, Advisor, A, C and R6 Class shares were 0.81%, 0.88%, 1.14%, 1.29%, 1.21%, 1.87% and 0.78%, 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 trailed the Index during the period due mainly to security selection, while sector allocation was slightly additive to relative performance.

Most of the Fund’s underperformance related to security selection was attributed to holdings in the Financials and Energy sectors. In the Financials sector, the Fund’s positions in Webster Financial Corp. (down 23.6%) and Texas Capital Bancshares, Inc. (down 16.7%) negatively impacted performance. In the Energy sector, detractors included Callon Petroleum Co. (down 62.9%) and Whiting Petroleum Corp. (down 82.8%). On the other hand, positive security selection in the Consumer Discretionary sector added relative value. In this sector, Sonic Automotive Inc. (up 75.9%) and an absence from Index-position Signet Jewelers Ltd. (down 68.9%) were the largest contributors.

From a sector allocation perspective, the Fund’s overweight positions in the Information Technology sector (up 26.3%) and the Industrials sector (up 9.2%) contributed to relative performance. This relative performance was partially offset by an underweight to the Real Estate sector (up 19.1%).

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

4

American Beacon Small Cap Value Fund^SM

Performance Overview

October 31, 2019 (Unaudited)

Top Ten Holdings (% Net Assets)
Diodes, Inc.		1.5
Brooks Automation, Inc.		1.0
Portland General Electric Co.		1.0
Enstar Group Ltd.		0.9
Federal Signal Corp.		0.9
Seritage Growth Properties, Class A		0.9
Vishay Intertechnology, Inc.		0.9
MGIC Investment Corp.		0.7
Simpson Manufacturing Co., Inc.		0.7
Stifel Financial Corp.		0.6
Total Fund Holdings	708
Sector Allocation (% Equities)
Financials		28.0
Industrials		21.1
Information Technology		14.0
Consumer Discretionary		13.0
Real Estate		5.4
Energy		4.4
Materials		4.2
Utilities		3.0
Health Care		2.8
Communication Services		2.1
Consumer Staples		1.8
Exchange-Traded Instruments		0.2

5

American Beacon Small Cap Value Fund^SM

Expense Example

October 31, 2019 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, Sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2019 through October 31, 2019.

Actual Expenses

The “Actual” lines of the table provide information about actual account values and actual expenses. You may use the information on this page, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = $8.60), then multiply the result by the “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) or redemption fees, as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “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.

6

American Beacon Small Cap Value Fund^SM

Expense Example

October 31, 2019 (Unaudited)

American Beacon Small Cap Value Fund
	Beginning Account Value 5/1/2019		Ending Account Value 10/31/2019		Expenses Paid  During Period 5/1/2019-10/31/2019*
Institutional Class
Actual		$1,000.00		$973.90		$4.13
Hypothetical**		$1,000.00		$1,021.02		$4.23
Y Class
Actual		$1,000.00		$973.50		$4.53
Hypothetical**		$1,000.00		$1,020.62		$4.63
Investor Class
Actual		$1,000.00		$972.30		$5.77
Hypothetical**		$1,000.00		$1,019.36		$5.90
Advisor Class
Actual		$1,000.00		$971.50		$6.61
Hypothetical**		$1,000.00		$1,018.50		$6.77
A Class
Actual		$1,000.00		$971.70		$6.36
Hypothetical**		$1,000.00		$1,018.75		$6.51
C Class
Actual		$1,000.00		$968.40		$9.77
Hypothetical**		$1,000.00		$1,015.28		$10.01
R6 Class
Actual		$1,000.00		$973.90		$3.98
Hypothetical**		$1,000.00		$1,021.17		$4.08

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.83%, 0.91%, 1.16%, 1.33%, 1.28%, 1.97%, and 0.80% for the Institutional, Y, Investor, Advisor, A, C, and R6 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.

7

American Beacon Small Cap Value Fund^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of

American Beacon Small Cap Value Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of American Beacon Small Cap Value Fund (the “Fund”) (one of the funds constituting American Beacon Funds (the “Trust”)), including the schedule of investments, as of October 31, 2019, 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, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund at October 31, 2019, 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 its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2019, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more American Beacon investment companies since 1987.

Dallas, Texas

December 30, 2019

8

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49%
Communication Services - 2.07%
Entertainment - 0.14%
IMAX Corp.A		410,584		$	8,765,968
Media - 1.93%
AMC Networks, Inc., Class AA		126,981			5,530,023
Emerald Expositions Events, Inc.		80,092			778,494
Entravision Communications Corp., Class A		272,576			774,116
EW Scripps Co., Class A		63,919			858,752
Gannett Co., Inc.		303,388			3,291,760
Gray Television, Inc.A		1,244,556			20,423,164
John Wiley & Sons, Inc., Class A		137,610			6,339,693
Liberty Latin America Ltd., Class CA		144,525			2,660,705
MDC Partners, Inc., Class AA		1,749,072			5,474,595
Meredith Corp.		210,959			7,953,154
MSG Networks, Inc., Class AA		538,119			8,722,909
New Media Investment Group, Inc.B		288,258			2,539,553
Nexstar Media Group, Inc., Class A		120,325			11,706,419
Scholastic Corp.		308,791			11,888,453
TEGNA, Inc.		1,996,092			30,001,263
WideOpenWest, Inc.A		115,069			730,688
					119,673,741
Total Communication Services					128,439,709
Consumer Discretionary - 12.57%
Auto Components - 1.89%
Adient PLC		1,454,292			30,816,447
American Axle & Manufacturing Holdings, Inc.A		3,289,883			27,503,422
Cooper Tire & Rubber Co.		378,145			10,678,815
Cooper-Standard Holdings, Inc.A		45,152			1,438,543
Dana, Inc.		383,253			6,220,196
Delphi Technologies PLC		137,299			1,676,421
Dorman Products, Inc.A		86,490			6,222,955
Gentherm, Inc.A		250,682			10,470,987
Goodyear Tire & Rubber Co.		122,300			1,940,901
Modine Manufacturing Co.A		156,297			1,786,475
Motorcar Parts of America, Inc.A		79,425			1,513,841
Stoneridge, Inc.A		278,155			8,589,426
Visteon Corp.A		89,727			8,346,406
					117,204,835
Automobiles - 0.36%
Thor Industries, Inc.B		30,694			1,941,702
Winnebago Industries, Inc.		430,910			20,713,844
					22,655,546
Diversified Consumer Services - 0.50%
Adtalem Global Education, Inc.A		326,864			9,734,010
American Public Education, Inc.A		38,661			839,717
Graham Holdings Co., Class B		11,623			7,318,538
H&R Block, Inc.B		495,992			12,394,840
WW International, Inc.		13,294			463,562
					30,750,667
Hotels, Restaurants & Leisure - 1.24%
BJ’s Restaurants, Inc.		172,445			6,827,098
Bloomin’ Brands, Inc.		666,066			13,194,767

See accompanying notes

9

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Consumer Discretionary - 12.57% (continued)
Hotels, Restaurants & Leisure - 1.24% (continued)
Brinker International, Inc.B		129,384		$	5,751,119
Cheesecake Factory, Inc.B		380,779			15,912,754
Dave & Buster’s Entertainment, Inc.B		177,322			7,053,869
Hilton Grand Vacations, Inc.A		270,212			9,384,463
Ruth’s Hospitality Group, Inc.		198,207			4,079,100
Twin River Worldwide Holdings, Inc.B		49,600			1,244,960
Wyndham Destinations, Inc.		286,894			13,314,751
					76,762,881
Household Durables - 2.99%
Beazer Homes USA, Inc.A		42,262			634,353
Cavco Industries, Inc.A		64,858			12,430,036
Century Communities, Inc.A		122,533			3,696,821
Ethan Allen Interiors, Inc.		211,476			4,168,192
Flexsteel Industries, Inc.		26,762			443,446
GoPro, Inc., Class AA B		149,996			623,983
Green Brick Partners, Inc.A		40,301			405,831
Helen of Troy Ltd.A		74,543			11,163,560
Hooker Furniture Corp.		59,847			1,416,578
KB Home		535,815			19,123,237
LGI Homes, Inc.A B		60,564			4,753,063
Lifetime Brands, Inc.		21,174			169,180
M/I Homes, Inc.A		256,970			11,352,935
MDC Holdings, Inc.		357,674			13,845,561
Meritage Homes Corp.A		124,772			8,994,813
Taylor Morrison Home Corp.A		692,631			17,350,407
Toll Brothers, Inc.		364,554			14,498,313
TRI Pointe Group, Inc.A		918,148			14,451,649
Tupperware Brands Corp.		245,469			2,363,866
Whirlpool Corp.		251,886			38,316,898
William Lyon Homes, Class AA		148,132			2,866,354
ZAGG, Inc.A B		275,962			2,033,840
					185,102,916
Internet & Direct Marketing Retail - 0.03%
Groupon, Inc.A		205,596			571,557
Lands’ End, Inc.A B		45,043			543,669
PetMed Express, Inc.B		45,762			1,071,517
					2,186,743
Leisure Products - 0.41%
American Outdoor Brands Corp.A		307,482			2,176,973
Brunswick Corp.		228,986			13,336,145
Johnson Outdoors, Inc., Class A		14,459			846,574
Malibu Boats, Inc., Class AA		248,323			8,100,296
Nautilus, Inc.A		442,744			730,528
					25,190,516
Multiline Retail - 0.28%
Big Lots, Inc.B		111,361			2,413,193
Dillard’s, Inc., Class AB		215,135			14,840,012
					17,253,205
Specialty Retail - 3.94%
Aaron’s, Inc.		248,106			18,590,583
Abercrombie & Fitch Co., Class A		537,204			8,697,333
Asbury Automotive Group, Inc.A		65,379			6,742,536

See accompanying notes

10

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Consumer Discretionary - 12.57% (continued)
Specialty Retail - 3.94% (continued)
AutoNation, Inc.A		273,564		$	13,910,729
Barnes & Noble Education, Inc.A		293,209			1,205,089
Bed Bath & Beyond, Inc.B		478,961			6,561,766
Buckle, Inc.B		155,778			3,258,876
Caleres, Inc.		26,827			577,317
Camping World Holdings, Inc., Class AB		100,637			951,020
Children’s Place, Inc.B		113,441			9,291,952
Citi Trends, Inc.		35,118			626,856
Designer Brands, Inc., Class A		92,387			1,524,386
Dick’s Sporting Goods, Inc.B		502,803			19,574,121
Foot Locker, Inc.		236,400			10,285,764
Genesco, Inc.A		123,452			4,796,110
Group 1 Automotive, Inc.		310,825			30,908,438
Guess?, Inc.B		425,058			7,119,722
Haverty Furniture Cos, Inc.		44,191			801,625
Hibbett Sports, Inc.A		56,492			1,347,899
Lithia Motors, Inc., Class A		57,882			9,115,257
Lumber Liquidators Holdings, Inc.A B		56,719			523,516
MarineMax, Inc.A		32,160			496,872
Office Depot, Inc.		11,447,654			23,582,167
Party City Holdco, Inc.A B		66,255			372,353
Penske Automotive Group, Inc.		255,999			12,472,271
Sally Beauty Holdings, Inc.A B		209,513			3,247,452
Sonic Automotive, Inc., Class A		702,108			22,628,941
Sportsman’s Warehouse Holdings, Inc.A		79,620			542,212
Urban Outfitters, Inc.A B		450,972			12,942,896
Williams-Sonoma, Inc.B		163,128			10,895,319
Zumiez, Inc.A		13,541			432,093
					244,023,471
Textiles, Apparel & Luxury Goods - 0.93%
G-III Apparel Group Ltd.A		591,611			14,855,352
Hanesbrands, Inc.		962,900			14,645,709
Movado Group, Inc.		243,906			6,353,751
Oxford Industries, Inc.		127,933			8,809,466
Unifi, Inc.A		20,918			571,062
Vera Bradley, Inc.A		180,930			1,946,807
Wolverine World Wide, Inc.		355,737			10,558,274
					57,740,421
Total Consumer Discretionary					778,871,201
Consumer Staples - 1.74%
Food & Staples Retailing - 0.37%
Andersons, Inc.		100,932			1,859,167
Ingles Markets, Inc., Class A		37,700			1,486,511
Performance Food Group Co.A		318,534			13,572,734
SpartanNash Co.		189,556			2,482,236
Village Super Market, Inc., Class A		33,132			877,998
Weis Markets, Inc.		70,878			2,728,094
					23,006,740
Food Products - 1.07%
Darling Ingredients, Inc.A		1,500,686			28,963,240
Flowers Foods, Inc.		368,002			7,993,003
Fresh Del Monte Produce, Inc.		418,645			13,354,776

See accompanying notes

11

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Consumer Staples - 1.74% (continued)
Food Products - 1.07% (continued)
Hain Celestial Group, Inc.A B		434,219		$	10,264,937
SunOpta, Inc.A B		2,995,678			5,721,745
					66,297,701
Household Products - 0.10%
Energizer Holdings, Inc.B		144,531			6,141,122
Metals & Mining - 0.00%
Ferroglobe Representation & Warranty InsuranceC D		2,123,070			-
Personal Products - 0.11%
Edgewell Personal Care Co.A		96,958			3,393,530
Nu Skin Enterprises, Inc., Class A		40,600			1,809,948
USANA Health Sciences, Inc.A		24,700			1,830,517
					7,033,995
Tobacco - 0.09%
Universal Corp.		97,084			5,320,203
Total Consumer Staples					107,799,761
Energy - 4.22%
Energy Equipment & Services - 1.66%
Apergy Corp.A		322,443			8,115,890
Archrock, Inc.		577,990			5,571,824
Cactus, Inc., Class AA		290,564			8,635,562
Dril-Quip, Inc.A		152,217			6,243,941
Frank’s International N.V.A		5,023,124			24,613,308
FTS International, Inc.A		153,534			233,372
Helix Energy Solutions Group, Inc.A		397,404			3,413,700
Key Energy Services, Inc.A B		301,510			359,792
Liberty Oilfield Services, Inc., Class AB		113,879			1,048,826
Mammoth Energy Services, Inc.		254,646			407,434
Matrix Service Co.A		51,116			958,936
McDermott International, Inc.A B		362,934			591,582
National Energy Services Reunited Corp.A		67,291			464,981
Newpark Resources, Inc.A		1,973,219			11,839,314
NexTier Oilfield Solutions, Inc.A		1,967,711			8,500,514
Nine Energy Service, Inc.A B		367,425			2,075,951
Oceaneering International, Inc.A		263,500			3,731,160
Patterson-UTI Energy, Inc.		954,287			7,939,668
ProPetro Holding Corp.A		145,426			1,127,051
Quintana Energy Services, Inc.A		290,256			484,728
RPC, Inc.B		103,250			427,455
SEACOR Holdings, Inc.A		53,432			2,292,767
Select Energy Services, Inc., Class AA		213,500			1,622,600
Solaris Oilfield Infrastructure, Inc., Class A		173,207			1,842,922
					102,543,278
Oil, Gas & Consumable Fuels - 2.56%
Altus Midstream Co., Class AA B		1,425,176			3,135,387
Amplify Energy Corp.		66,805			484,336
Antero Resources Corp.A B		291,200			728,000
Arch Coal, Inc., Class AB		102,294			8,069,974
Berry Petroleum Corp.		552,813			5,190,914
Bonanza Creek Energy, Inc.A		343,432			6,119,958
Callon Petroleum Co.A B		3,925,972			14,918,694
Carrizo Oil & Gas, Inc.A B		1,121,060			8,251,002
CNX Midstream Partners LP, MLP		61,800			947,394
CONSOL Energy, Inc.A		17,937			237,306

See accompanying notes

12

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Energy - 4.22% (continued)
Oil, Gas & Consumable Fuels - 2.56% (continued)
Contura Energy, Inc.A		60,561		$	1,389,269
Delek US Holdings, Inc.		222,912			8,905,334
Diamond S Shipping Inc.A		35,284			515,146
Earthstone Energy, Inc., Class AA		369,337			1,433,028
Enerplus Corp.		474,054			2,858,546
Falcon Minerals Corp.B		97,032			597,717
Gran Tierra Energy, Inc.A B		2,072,611			2,238,420
Hess Midstream Partners LP		130,437			2,779,612
Hoegh LNG Partners LP		25,391			378,326
Kosmos Energy Ltd.		2,583,108			16,015,270
Murphy Oil Corp.		97,031			2,001,749
Noble Midstream Partners LP, MLP		33,921			818,174
Oasis Midstream Partners LP, MLP		44,978			775,421
Oasis Petroleum, Inc.A		641,244			1,673,647
Par Pacific Holdings, Inc.A		36,839			834,403
PBF Energy, Inc., Class A		86,076			2,778,533
PDC Energy, Inc.A		289,636			5,778,238
Peabody Energy Corp.		125,883			1,325,548
Penn Virginia Corp.A		145,812			3,470,326
QEP Resources, Inc.		478,769			1,594,301
Range Resources Corp.B		1,298,800			5,234,164
Renewable Energy Group, Inc.A B		54,412			889,092
REX American Resources Corp.A		16,401			1,327,169
SRC Energy, Inc.A		1,648,438			5,143,127
Talos Energy, Inc.A		225,257			4,849,783
W&T Offshore, Inc.A		1,163,186			4,687,640
Whiting Petroleum Corp.A B		700,854			4,443,414
World Fuel Services Corp.		355,419			14,845,852
WPX Energy, Inc.A		1,124,900			11,226,502
					158,890,716
Total Energy					261,433,994
Financials - 27.09%
Banks - 15.25%
1st Source Corp.		19,656			1,005,994
Amalgamated Bank, Class A		58,334			1,062,262
Ameris Bancorp		71,720			3,073,202
Associated Banc-Corp		1,471,395			29,589,753
Atlantic Union Bankshares Corp.		365,486			13,471,814
Banc of California, Inc.		112,278			1,546,068
Bancorp, Inc.A		159,350			1,736,915
BancorpSouth Bank		162,769			4,992,125
Bank of NT Butterfield & Son Ltd.		973,033			32,061,437
BankUnited, Inc.		290,078			9,949,675
Banner Corp.		293,658			15,851,659
Bar Harbor Bankshares		37,094			929,205
Berkshire Hills Bancorp, Inc.		592,769			18,393,622
Boston Private Financial Holdings, Inc.		1,209,896			13,611,330
Bridge Bancorp, Inc.		31,190			1,010,556
Brookline Bancorp, Inc.		213,631			3,354,007
Bryn Mawr Bank Corp.		141,653			5,398,396
Cadence BanCorpB		350,340			5,388,229
Camden National Corp.		19,774			876,186
Carolina Financial Corp.		166,497			6,318,561
Cathay General Bancorp		496,830			17,672,243

See accompanying notes

13

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Financials - 27.09% (continued)
Banks - 15.25% (continued)
CenterState Bank Corp.		350,933		$	8,899,661
Central Pacific Financial Corp.		261,098			7,550,954
CIT Group, Inc.		139,312			5,975,092
City Holding Co.		12,548			995,558
Columbia Banking System, Inc.		101,111			3,973,662
Community Trust Bancorp, Inc.		32,573			1,427,023
ConnectOne Bancorp, Inc.		59,892			1,454,178
Customers Bancorp, Inc.A		83,881			1,977,914
CVB Financial Corp.		173,800			3,611,564
Eagle Bancorp, Inc.		22,498			1,015,560
Enterprise Financial Services Corp.		51,694			2,264,197
Equity Bancshares, Inc., Class AA		49,400			1,371,344
Financial Institutions, Inc.		39,388			1,237,965
First BanCorp/Puerto Rico		175,651			1,847,849
First Bancorp/NC		24,800			936,200
First Business Financial Services, Inc.		21,559			524,315
First Citizens BancShares, Inc., Class A		11,841			5,824,825
First Commonwealth Financial Corp.		195,897			2,760,189
First Financial Bancorp		55,689			1,305,350
First Financial Corp.		85,021			3,729,871
First Hawaiian, Inc.		1,389,147			37,965,388
First Horizon National Corp.		1,380,806			22,051,472
First Internet Bancorp		38,952			885,768
First Interstate BancSystem, Inc., Class A		236,515			9,924,169
First Merchants Corp.		63,801			2,523,330
First Mid Bancshares, Inc.		12,252			427,595
First Midwest Bancorp, Inc.		1,081,430			22,212,572
First of Long Island Corp.		61,000			1,429,840
Flushing Financial Corp.		95,082			2,057,574
FNB Corp.		1,347,843			16,254,987
Franklin Financial Network, Inc.		58,947			1,961,167
Fulton Financial Corp.		1,778,190			30,335,921
Great Southern Bancorp, Inc.		29,538			1,784,686
Great Western Bancorp, Inc.		191,400			6,674,118
Hancock Whitney Corp.		965,862			37,668,618
Hanmi Financial Corp.		91,853			1,768,170
Heartland Financial USA, Inc.		42,433			1,985,016
Heritage Commerce Corp.		149,907			1,801,882
Heritage Financial Corp.		36,208			996,806
Hilltop Holdings, Inc.		147,125			3,436,840
Home BancShares, Inc.		187,635			3,467,495
HomeTrust Bancshares, Inc.		16,893			451,043
Hope Bancorp, Inc.		621,145			8,863,739
Horizon Bancorp, Inc.		124,862			2,279,356
IBERIABANK Corp.		253,866			18,631,226
International Bancshares Corp.		498,573			20,421,550
Investors Bancorp, Inc.		986,343			11,885,433
Lakeland Bancorp, Inc.		113,586			1,879,848
Live Oak Bancshares, Inc.		89,877			1,631,268
Metropolitan Bank Holding Corp.A		10,200			437,988
Midland States Bancorp, Inc.		61,970			1,660,796
MidWestOne Financial Group, Inc.		15,616			509,004
National Bank Holdings Corp., Class A		488,498			16,804,331
Northrim BanCorp, Inc.		12,286			478,540
OFG Bancorp		237,570			4,825,047
Old National Bancorp		1,941,390			34,935,313

See accompanying notes

14

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Financials - 27.09% (continued)
Banks - 15.25% (continued)
Opus Bank		40,460		$	1,003,003
Orrstown Financial Services, Inc.		19,116			414,626
Pacific Premier Bancorp, Inc.		27,420			925,562
Park National Corp.		4,714			477,293
Peapack Gladstone Financial Corp.		63,422			1,851,922
Pinnacle Financial Partners, Inc.		64,495			3,793,596
Popular, Inc.		729,355			39,720,673
Preferred Bank		18,411			981,490
Prosperity Bancshares, Inc.B		570,914			39,404,484
RBB Bancorp		23,627			475,848
Renasant Corp.		117,355			4,072,218
Republic Bancorp, Inc., Class A		48,475			2,155,683
S&T Bancorp, Inc.		61,389			2,311,603
Sandy Spring Bancorp, Inc.		52,285			1,803,832
Seacoast Banking Corp. of FloridaA		733,393			20,535,004
Simmons First National Corp., Class A		235,001			5,621,224
South State Corp.		213,822			16,862,003
Southern National Bancorp of Virginia, Inc.		59,545			943,193
Sterling Bancorp		267,760			5,261,484
TCF Financial Corp.		523,203			20,713,607
Texas Capital Bancshares, Inc.A		589,657			31,876,857
Towne Bank		102,664			2,883,832
TriCo Bancshares		23,420			881,295
Triumph Bancorp, Inc.A		165,439			5,368,496
Trustmark Corp.		198,644			6,817,462
UMB Financial Corp.		405,072			26,434,999
Umpqua Holdings Corp.		1,690,268			26,740,040
United Bankshares, Inc.		184,733			7,304,343
United Community Banks, Inc.		431,470			13,034,709
Univest Financial Corp.		19,052			490,589
Valley National Bancorp		1,523,178			17,638,401
Veritex Holdings, Inc.		368,048			9,061,342
Webster Financial Corp.		499,472			22,026,715
WesBanco, Inc.		297,752			11,192,498
West Bancorp, Inc.		20,220			474,766
Westamerica Bancorp		19,168			1,265,471
Wintrust Financial Corp.		205,343			13,104,990
					945,209,559
Capital Markets - 2.96%
AllianceBernstein Holding LP, MLP		512,246			15,039,543
Artisan Partners Asset Management, Inc., Class A		290,276			7,939,049
Blucora, Inc.A		533,037			11,529,590
BrightSphere Investment Group, Inc.A		438,692			4,307,955
Cowen, Inc., Class AA		116,156			1,738,855
Donnelley Financial Solutions, Inc.A		300,846			3,399,560
Evercore, Inc., Class A		486,377			35,816,802
Federated Investors, Inc., Class B		359,615			11,486,103
GAIN Capital Holdings, Inc.B		97,286			410,547
GAMCO Investors, Inc., Class A		24,607			387,806
Greenhill & Co., Inc.B		98,252			1,591,682
INTL. FCStone, Inc.A		73,481			2,939,240
Janus Henderson Group PLC		96,000			2,220,480
Lazard Ltd., Class A		115,000			4,292,950
Legg Mason, Inc.		47,946			1,786,468
Moelis & Co., Class A		106,451			3,798,172

See accompanying notes

15

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Financials - 27.09% (continued)
Capital Markets - 2.96% (continued)
Oppenheimer Holdings, Inc., Class A		47,588		$	1,294,394
Piper Jaffray Cos.		82,301			6,463,920
Sculptor Capital Management, Inc.B		49,582			890,989
Stifel Financial Corp.		715,423			40,049,379
Victory Capital Holdings, Inc., Class A		87,066			1,354,747
Virtus Investment Partners, Inc.		17,194			1,865,205
Waddell & Reed Financial, Inc., Class AB		984,112			16,296,895
Westwood Holdings Group, Inc.		70,760			2,139,075
WisdomTree Investments, Inc.		856,845			4,378,478
					183,417,884
Consumer Finance - 1.55%
Encore Capital Group, Inc.A B		51,449			1,707,592
Enova International, Inc.A		115,579			2,714,951
EZCORP, Inc., Class AA B		250,857			1,319,508
Green Dot Corp., Class AA		89,789			2,589,515
Navient Corp.		804,159			11,073,269
Nelnet, Inc., Class A		123,671			7,577,322
OneMain Holdings, Inc.		358,613			14,344,520
PRA Group, Inc.A		910,086			30,879,218
SLM Corp.		2,832,513			23,906,410
					96,112,305
Diversified Financial Services - 0.06%
FGL Holdings		270,451			2,442,173
Jefferies Financial Group, Inc.		70,533			1,316,851
					3,759,024
Insurance - 4.06%
Ambac Financial Group, Inc.A		189,038			3,875,279
American Equity Investment Life Holding Co.		658,233			16,245,190
Argo Group International Holdings Ltd.		311,488			19,271,763
Assured Guaranty Ltd.		279,021			13,091,665
Axis Capital Holdings Ltd.		220,671			13,114,477
Brighthouse Financial, Inc.A		97,000			3,662,720
CNO Financial Group, Inc.		2,366,308			37,032,720
Employers Holdings, Inc.		117,849			4,989,727
Enstar Group Ltd.A		271,002			54,444,302
FBL Financial Group, Inc., Class A		31,102			1,784,633
Global Indemnity Ltd.		392,528			9,718,993
Greenlight Capital Re Ltd., Class AA		117,597			1,270,048
Horace Mann Educators Corp.		306,911			13,369,043
Kemper Corp.		91,612			6,585,071
MBIA, Inc.A		360,095			3,345,283
National General Holdings Corp.		466,113			9,937,529
National Western Life Group, Inc., Class A		13,706			3,736,256
ProAssurance Corp.		42,767			1,677,322
Safety Insurance Group, Inc.		68,052			6,614,654
Selective Insurance Group, Inc.		139,108			9,615,145
Stewart Information Services Corp.		31,570			1,291,844
Third Point Reinsurance Ltd.A		131,897			1,251,702
United Fire Group, Inc.		62,552			2,847,367
White Mountains Insurance Group Ltd.		11,870			12,712,770
					251,485,503

See accompanying notes

16

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Financials - 27.09% (continued)
Mortgage Real Estate Investment Trusts (REITs) - 0.34%
Apollo Commercial Real Estate Finance, Inc.		528,347		$	9,668,750
Colony Credit Real Estate, Inc.		128,856			1,846,507
Ellington Financial, Inc.		100,351			1,848,465
Exantas Capital Corp.		156,891			1,845,038
Great Ajax Corp.		55,013			860,954
MFA Financial, Inc.		503,003			3,817,793
Ready Capital Corp.		80,722			1,277,829
					21,165,336
Thrifts & Mortgage Finance - 2.87%
Axos Financial, Inc.A		51,642			1,500,200
Capitol Federal Financial, Inc.		349,997			4,994,457
Dime Community Bancshares, Inc.		140,215			2,704,747
Essent Group Ltd.		502,034			26,150,951
First Defiance Financial Corp.		15,700			485,444
Flagstar Bancorp, Inc.		152,230			5,532,038
FS Bancorp, Inc.		9,133			522,864
Hingham Institution for Savings		4,500			854,955
HomeStreet, Inc.A		62,643			1,879,916
Kearny Financial Corp.		240,327			3,371,788
Luther Burbank Corp.		325,813			3,769,656
Merchants Bancorp		54,330			887,209
Meridian Bancorp, Inc.		123,820			2,421,919
MGIC Investment Corp.		3,344,202			45,849,009
New York Community Bancorp, Inc.		53,914			628,098
Northfield Bancorp, Inc.		198,240			3,372,062
Northwest Bancshares, Inc.		250,011			4,217,686
OceanFirst Financial Corp.		165,572			3,962,138
Oritani Financial Corp.		93,948			1,753,070
PennyMac Financial Services, Inc.A		64,481			2,007,294
Provident Financial Services, Inc.		124,031			3,094,574
Radian Group, Inc.		706,940			17,744,194
Southern Missouri Bancorp, Inc.		12,578			457,965
Sterling Bancorp, Inc.		89,077			863,156
Territorial Bancorp, Inc.		15,826			467,817
TFS Financial Corp.		64,980			1,251,515
TrustCo Bank Corp.		210,387			1,817,744
United Financial Bancorp, Inc.		219,307			3,096,615
Walker & Dunlop, Inc.		82,480			5,195,415
Washington Federal, Inc.		711,149			25,928,493
Waterstone Financial, Inc.		52,215			972,765
					177,755,754
Total Financials					1,678,905,365
Health Care - 2.71%
Biotechnology - 0.15%
Emergent BioSolutions, Inc.A		162,426			9,284,270
Health Care Equipment & Supplies - 0.36%
Invacare Corp.B		1,055,934			8,151,811
Natus Medical, Inc.A		109,838			3,699,344
NuVasive, Inc.A		152,119			10,730,474
					22,581,629
Health Care Providers & Services - 1.79%
Amedisys, Inc.A		56,508			7,262,408
AMN Healthcare Services, Inc.A		431,812			25,373,273

See accompanying notes

17

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Health Care - 2.71% (continued)
Health Care Providers & Services - 1.79% (continued)
Encompass Health Corp.		360,929		$	23,106,675
Hanger, Inc.A		768,105			17,366,854
LHC Group, Inc.A		87,305			9,688,236
Magellan Health, Inc.A		27,934			1,812,917
MEDNAX, Inc.A		74,200			1,629,432
Patterson Cos., Inc.B		300,103			5,140,764
R1 RCM, Inc.A		897,426			9,539,638
Select Medical Holdings Corp.A		433,117			7,891,392
Tivity Health, Inc.A B		128,311			2,079,921
					110,891,510
Health Care Technology - 0.09%
Computer Programs & Systems, Inc.		65,458			1,510,116
NextGen Healthcare, Inc.A		233,802			3,952,423
					5,462,539
Life Sciences Tools & Services - 0.20%
Medpace Holdings, Inc.A		165,540			12,188,710
Pharmaceuticals - 0.12%
Prestige Consumer Healthcare, Inc.A		52,682			1,868,104
Supernus Pharmaceuticals, Inc.A		143,550			3,989,255
Taro Pharmaceutical Industries Ltd.		22,598			1,826,822
					7,684,181
Total Health Care					168,092,839
Industrials - 20.41%
Aerospace & Defense - 1.01%
AAR Corp.		149,167			6,227,722
Aerojet Rocketdyne Holdings, Inc.A		329,128			14,228,203
AeroVironment, Inc.A		124,465			7,216,481
Astronics Corp.A		295,491			8,551,509
Embraer S.A., Sponsored ADR		1,047,308			18,191,740
Moog, Inc., Class A		46,084			3,857,692
National Presto Industries, Inc.B		19,188			1,651,895
Triumph Group, Inc.B		26,079			541,661
Vectrus, Inc.A		40,163			1,835,851
					62,302,754
Air Freight & Logistics - 0.46%
Air Transport Services Group, Inc.A		1,252,796			26,195,964
Hub Group, Inc., Class AA		55,210			2,528,618
					28,724,582
Airlines - 0.60%
Hawaiian Holdings, Inc.		161,544			4,621,774
JetBlue Airways Corp.A		789,050			15,228,665
SkyWest, Inc.		137,004			8,158,588
Spirit Airlines, Inc.A		249,387			9,366,976
					37,376,003
Building Products - 3.14%
Advanced Drainage Systems, Inc.		137,046			5,073,443
Apogee Enterprises, Inc.		33,612			1,261,794
Armstrong Flooring, Inc.A		591,570			3,632,240

See accompanying notes

18

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Industrials - 20.41% (continued)
Building Products - 3.14% (continued)
Builders FirstSource, Inc.A		789,307		$	17,846,231
Caesarstone Ltd.B		102,448			1,730,347
Continental Building Products, Inc.A		35,400			1,058,814
Gibraltar Industries, Inc.A		692,401			36,856,505
Insteel Industries, Inc.		107,243			2,045,124
JELD-WEN Holding, Inc.A		79,572			1,359,885
Masonite International Corp.A		378,233			23,227,289
Patrick Industries, Inc.A		63,600			3,142,476
Resideo Technologies, Inc.A		1,903,984			18,144,968
Simpson Manufacturing Co., Inc.		517,759			42,787,604
Universal Forest Products, Inc.		721,053			36,312,229
					194,478,949
Commercial Services & Supplies - 1.98%
ACCO Brands Corp.		656,083			6,003,159
Deluxe Corp.		404,461			20,963,214
Ennis, Inc.		64,295			1,259,539
Herman Miller, Inc.		256,716			11,937,294
HNI Corp.		86,345			3,281,110
Interface, Inc.		61,680			1,025,738
KAR Auction Services, Inc.B		338,200			8,407,652
Knoll, Inc.		973,955			26,043,557
Matthews International Corp., Class A		206,621			7,640,845
Mobile Mini, Inc.		739,725			27,828,455
Quad/Graphics, Inc.		694,831			3,147,584
Steelcase, Inc., Class A		254,348			4,443,460
Team, Inc.A		34,833			632,567
					122,614,174
Construction & Engineering - 1.80%
Aegion Corp.A		222,980			4,831,977
Arcosa, Inc.		11,700			449,397
Construction Partners, Inc., Class AA		380,504			6,514,228
EMCOR Group, Inc.		307,901			27,005,997
Fluor Corp.		620,300			9,993,033
Granite Construction, Inc.		253,841			5,975,417
MasTec, Inc.A		6,678			420,313
MYR Group, Inc.A		26,150			899,822
Primoris Services Corp.		1,464,489			29,934,155
Quanta Services, Inc.		247,973			10,427,265
Tutor Perini Corp.A B		885,524			13,699,056
Valmont Industries, Inc.		9,034			1,239,374
					111,390,034
Electrical Equipment - 1.46%
Atkore International Group, Inc.A		154,173			5,349,803
AZZ, Inc.		103,017			3,996,029
Encore Wire Corp.		395,969			22,253,458
EnerSys		309,744			20,709,484
Generac Holdings, Inc.A		39,125			3,778,693
GrafTech International Ltd.B		136,100			1,644,088
Preformed Line Products Co.		14,297			780,616
Regal Beloit Corp.		302,909			22,430,411
Thermon Group Holdings, Inc.A		66,478			1,584,171
TPI Composites, Inc.A B		373,684			7,671,733
					90,198,486

See accompanying notes

19

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Industrials - 20.41% (continued)
Machinery - 6.26%
Actuant Corp., Class A		1,106,239		$	27,401,540
Allison Transmission Holdings, Inc.		305,300			13,314,133
Astec Industries, Inc.		263,921			9,260,988
Barnes Group, Inc.		412,292			24,098,467
Blue Bird Corp.A		205,636			4,018,127
Colfax Corp.A B		855,830			28,755,888
Columbus McKinnon Corp.		57,935			2,173,721
Commercial Vehicle Group, Inc.A		237,565			1,731,849
Energy Recovery, Inc.A B		438,982			4,086,922
EnPro Industries, Inc.		69,230			4,814,947
Federal Signal Corp.		1,663,086			53,950,510
Gorman-Rupp Co.		35,773			1,321,455
Graham Corp.		38,692			876,761
Greenbrier Cos., Inc.		413,374			12,107,724
Harsco Corp.A		506,957			10,276,018
Hillenbrand, Inc.		292,399			9,002,965
Hyster-Yale Materials Handling, Inc.		53,363			2,706,571
Kennametal, Inc.		765,620			23,695,939
Lindsay Corp.B		97,546			9,209,318
Manitowoc Co., Inc.A		155,651			1,986,107
Meritor, Inc.A		315,851			6,958,198
Miller Industries, Inc.		250,683			9,012,054
Mueller Industries, Inc.		21,684			667,217
Mueller Water Products, Inc., Class A		86,020			1,006,434
Navistar International Corp.A		499,630			15,628,426
Oshkosh Corp.		192,767			16,458,447
Park-Ohio Holdings Corp.		106,477			3,275,233
REV Group, Inc.B		111,707			1,389,635
Rexnord Corp.A		398,928			11,285,673
Spartan Motors, Inc.		30,400			531,088
Standex International Corp.		31,357			2,376,233
Terex Corp.		1,121,133			30,887,214
Timken Co.		415,152			20,342,448
TriMas Corp.A		277,168			8,958,070
Trinity Industries, Inc.B		331,032			6,547,813
Wabash National Corp.		561,739			8,010,398
					388,124,531
Marine - 0.38%
Matson, Inc.		615,743			23,509,068
Professional Services - 0.88%
BG Staffing, Inc.		40,100			767,113
GP Strategies Corp.A		74,099			822,499
Hudson Global, Inc.A		61,058			683,850
Huron Consulting Group, Inc.A		102,960			6,809,774
InnerWorkings, Inc.A		400,516			1,942,503
Kelly Services, Inc., Class A		250,567			6,016,114
Korn Ferry		376,469			13,812,648
ManpowerGroup, Inc.		159,352			14,488,284
Mistras Group, Inc.A		44,303			686,696
Resources Connection, Inc.		89,687			1,313,914
TrueBlue, Inc.A		309,317			7,083,359
					54,426,754

See accompanying notes

20

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Industrials - 20.41% (continued)
Road & Rail - 0.69%
ArcBest Corp.		408,386		$	11,798,272
Avis Budget Group, Inc.A		202,292			6,010,095
Covenant Transportation Group, Inc., Class AA		92,170			1,416,653
Knight-Swift Transportation Holdings, Inc.		29,690			1,082,497
Landstar System, Inc.		41,774			4,726,728
Marten Transport Ltd.		360,570			7,809,946
Ryder System, Inc.		142,027			6,906,773
Schneider National, Inc., Class B		24,412			558,302
Universal Logistics Holdings, Inc.		97,438			1,837,194
Werner Enterprises, Inc.		24,900			908,850
					43,055,310
Trading Companies & Distributors - 1.75%
Air Lease Corp.		297,483			13,083,302
Aircastle Ltd.		522,686			14,227,513
Applied Industrial Technologies, Inc.		54,327			3,250,928
BMC Stock Holdings, Inc.A		144,015			3,886,965
CAI International, Inc.A		54,483			1,295,061
DXP Enterprises, Inc.A		26,600			918,232
GATX Corp.		92,895			7,389,797
H&E Equipment Services, Inc.		90,700			3,078,358
Kaman Corp.		94,452			5,541,499
NOW, Inc.A		262,770			2,769,596
Rush Enterprises, Inc., Class A		589,613			25,760,192
Textainer Group Holdings Ltd.A		30,221			312,787
Titan Machinery, Inc.A		40,271			668,499
Triton International Ltd.		328,858			12,069,088
WESCO International, Inc.A		288,294			14,457,944
					108,709,761
Total Industrials					1,264,910,406
Information Technology - 13.50%
Communications Equipment - 0.98%
Casa Systems, Inc.A		357,387			2,401,641
Ciena Corp.A		612,242			22,726,423
CommScope Holding Co., Inc.A B		579,043			6,485,281
EchoStar Corp., Class AA		104,000			4,056,000
Lumentum Holdings, Inc.A B		215,336			13,492,954
NETGEAR, Inc.A		345,329			9,382,589
Plantronics, Inc.		34,279			1,351,278
Ribbon Communications, Inc.A		207,611			890,651
					60,786,817
Electronic Equipment, Instruments & Components - 6.31%
Anixter International, Inc.A		74,325			6,150,394
Avnet, Inc.		914,938			36,194,947
AVX Corp.		929,705			14,243,081
Belden, Inc.		139,398			7,148,329
Benchmark Electronics, Inc.		147,421			4,997,572
Celestica, Inc.A		842,355			6,081,803
Coherent, Inc.A		106,837			15,910,166
ePlus, Inc.A		9,800			765,674
FabrinetA		398,533			22,409,511
FARO Technologies, Inc.A		451,419			21,523,658
II-VI, Inc.A		995,440			32,998,836

See accompanying notes

21

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Information Technology - 13.50% (continued)
Electronic Equipment, Instruments & Components - 6.31% (continued)
Insight Enterprises, Inc.A		179,807		$	11,036,554
Itron, Inc.A		156,087			11,903,195
Jabil, Inc.		427,348			15,734,953
KEMET Corp.		848,271			18,441,412
Kimball Electronics, Inc.A		82,359			1,223,855
Methode Electronics, Inc.		240,231			8,263,946
MTS Systems Corp.		374,293			21,140,069
PC Connection, Inc.		41,104			2,007,519
Plexus Corp.A		36,165			2,674,040
Sanmina Corp.A		677,147			20,808,727
ScanSource, Inc.A		307,850			9,943,555
SYNNEX Corp.		136,006			16,013,346
Tech Data Corp.A		220,728			26,818,452
Vishay Intertechnology, Inc.		2,809,436			56,610,135
					391,043,729
IT Services - 1.38%
Cass Information Systems, Inc.		15,700			899,767
CSG Systems International, Inc.		401,790			23,159,176
KBR, Inc.		1,170,917			32,973,023
NIC, Inc.		432,503			10,172,470
Sykes Enterprises, Inc.A		247,097			7,634,062
Virtusa Corp.A		294,133			10,965,278
					85,803,776
Semiconductors & Semiconductor Equipment - 4.06%
Amkor Technology, Inc.A		518,840			6,449,181
Brooks Automation, Inc.		1,399,333			59,429,672
Cabot Microelectronics Corp.		76,326			11,534,385
ChipMOS Technologies, Inc., ADRB		173,401			3,405,596
Cohu, Inc.		1,048,360			17,423,743
Diodes, Inc.A		1,954,164			91,161,751
First Solar, Inc.A		167,488			8,674,204
MKS Instruments, Inc.		156,208			16,904,830
Photronics, Inc.A		1,858,166			21,926,359
Rambus, Inc.A		152,600			2,112,747
Semtech Corp.A		249,824			12,606,119
					251,628,587
Software - 0.62%
Cision Ltd.A		70,898			713,943
CommVault Systems, Inc.A		42,238			2,097,961
Ebix, Inc.B		41,846			1,783,895
LogMeIn, Inc.		162,989			10,705,118
Verint Systems, Inc.A		505,973			22,966,114
					38,267,031
Technology Hardware, Storage & Peripherals - 0.15%
3D Systems Corp.A B		70,011			664,404
NCR Corp.A		237,217			6,929,109
Super Micro Computer, Inc.A		91,700			1,896,356
					9,489,869
Total Information Technology					837,019,809

See accompanying notes

22

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Materials - 4.04%
Chemicals - 1.63%
American Vanguard Corp.		62,496		$	873,694
Cabot Corp.		723,541			31,539,152
FutureFuel Corp.		119,200			1,469,736
Huntsman Corp.		611,100			13,523,643
Innophos Holdings, Inc.		73,260			2,389,741
Koppers Holdings, Inc.A		15,594			500,568
Kraton Corp.A		340,849			7,641,835
Kronos Worldwide, Inc.		74,434			943,823
Livent Corp.A B		258,200			1,771,252
LSB Industries, Inc.A		67,493			285,495
Minerals Technologies, Inc.		128,036			6,331,380
PolyOne Corp.		732,090			23,463,485
Quaker Chemical Corp.		19,991			3,056,224
Stepan Co.		50,463			4,931,244
Trinseo S.A.		33,000			1,402,500
Valvoline, Inc.		38,041			811,795
					100,935,567
Containers & Packaging - 0.05%
Greif, Inc., Class A		62,490			2,447,733
Silgan Holdings, Inc.		29,600			910,792
					3,358,525
Metals & Mining - 1.88%
Allegheny Technologies, Inc.A		1,173,987			24,665,467
Carpenter Technology Corp.		424,782			20,822,814
Century Aluminum Co.A		126,600			738,078
Cleveland-Cliffs, Inc.B		1,610,480			11,643,770
Coeur Mining, Inc.A		2,316,442			12,786,760
Commercial Metals Co.		255,400			4,936,882
Elah Holdings, Inc.A		3,535			194,425
Ferroglobe PLC		2,803,168			1,732,919
Haynes International, Inc.		25,001			861,534
Kaiser Aluminum Corp.		13,047			1,397,073
Pan American Silver Corp.B		528,604			9,012,698
Schnitzer Steel Industries, Inc., Class A		807,271			17,227,163
Warrior Met Coal, Inc.		174,413			3,397,565
Worthington Industries, Inc.		194,562			7,161,827
					116,578,975
Paper & Forest Products - 0.48%
Domtar Corp.		378,476			13,772,742
Louisiana-Pacific Corp.		277,873			8,122,228
Mercer International, Inc.		70,238			856,904
PH Glatfelter Co.		38,131			686,358
Schweitzer-Mauduit International, Inc.		156,007			6,316,723
					29,754,955
Total Materials					250,628,022
Real Estate - 5.27%
Equity Real Estate Investment Trusts (REITs) - 5.01%
Agree Realty Corp.		190,278			14,988,198
Brandywine Realty Trust		1,297,697			19,828,810
CareTrust REIT, Inc.		190,812			4,625,283
Colony Capital, Inc.		1,778,255			9,958,228
CoreCivic, Inc.		406,668			6,205,754

See accompanying notes

23

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares		Fair Value
COMMON STOCKS - 96.49% (continued)
Real Estate - 5.27% (continued)
Equity Real Estate Investment Trusts (REITs) - 5.01% (continued)
Cousins Properties, Inc.		185,543		$	7,445,841
DiamondRock Hospitality Co.		728,830			7,273,723
Empire State Realty Trust, Inc., Class A		877,957			12,704,038
GEO Group, Inc.		1,077,373			16,397,617
Hersha Hospitality TrustB		493,144			6,805,387
Industrial Logistics Properties Trust		155,991			3,313,249
Kite Realty Group Trust		262,452			4,676,895
Lexington Realty Trust		2,837,900			30,876,352
Outfront Media, Inc.		413,953			10,891,103
Physicians Realty Trust		799,644			14,929,353
Piedmont Office Realty Trust, Inc., Class A		288,552			6,475,107
PotlatchDeltic Corp.		352,240			14,959,633
Preferred Apartment Communities, Inc., Class AB		717,541			10,275,187
Retail Opportunity Investments Corp.		202,994			3,788,883
Retail Properties of America, Inc., Class A		586,206			8,066,195
Ryman Hospitality Properties, Inc.		173,407			14,595,667
Seritage Growth Properties, Class AB		1,242,333			54,029,062
Sunstone Hotel Investors, Inc.		1,005,675			13,586,669
Urban Edge Properties		658,209			13,894,792
					310,591,026
Real Estate Management & Development - 0.26%
Consolidated-Tomoka Land Co.		19,000			1,215,430
Five Point Holdings LLC, Class AA B		112,542			743,903
Marcus & Millichap, Inc.A		22,700			810,844
Newmark Group, Inc., Class A		1,255,407			13,332,422
					16,102,599
Total Real Estate					326,693,625
Utilities - 2.87%
Electric Utilities - 1.29%
ALLETE, Inc.		167,085			14,379,335
El Paso Electric Co.		26,805			1,788,161
Otter Tail Corp.		25,682			1,455,656
PNM Resources, Inc.		25,601			1,335,092
Portland General Electric Co.		1,049,160			59,676,221
Spark Energy, Inc., Class AB		117,261			1,122,188
					79,756,653
Gas Utilities - 0.53%
Chesapeake Utilities Corp.		117,186			11,109,233
Northwest Natural Holding Co.		25,369			1,759,594
South Jersey Industries, Inc.		51,994			1,672,127
Southwest Gas Holdings, Inc.		165,396			14,439,071
Spire, Inc.		19,299			1,622,274
Star Group LP		89,719			833,489
Suburban Propane Partners LP, MLP		72,371			1,751,378
					33,187,166
Independent Power & Renewable Electricity Producers - 0.21%
Clearway Energy, Inc., Class A		83,226			1,428,990
Clearway Energy, Inc., Class C		643,592			11,668,323
					13,097,313

See accompanying notes

24

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

	Shares			Fair Value
COMMON STOCKS - 96.49% (continued)
Utilities - 2.87% (continued)
Multi-Utilities - 0.81%
Avista Corp.			680,865		$	32,701,946
NorthWestern Corp.			216,723			15,716,752
Unitil Corp.			26,288			1,636,954
						50,055,652
Water Utilities - 0.03%
California Water Service Group			32,087			1,795,910
Total Utilities						177,892,694
Total Common Stocks (Cost $5,433,853,703)						5,980,687,425
EXCHANGE-TRADED INSTRUMENTS - 0.16% (Cost $9,961,777)
Exchange-Traded Funds - 0.16%
iShares Russell 2000 Value ETF			81,000			9,913,590
SHORT-TERM INVESTMENTS - 3.44%
Investment Companies - 3.27%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%E F			202,748,699			202,748,699
	Principal Amount
U.S. Treasury Obligations - 0.17%
U.S. Treasury Bill, 1.87%, Due 2/13/2020G		$	10,500,000			10,453,964
Total Short-Term Investments (Cost $213,193,189)						213,202,663
	Shares
SECURITIES LENDING COLLATERAL - 1.38% (Cost $85,718,589)
Investment Companies - 1.38%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.75%E F			85,718,589			85,718,589
TOTAL INVESTMENTS - 101.47% (Cost $5,742,727,258)						6,289,522,267
LIABILITIES, NET OF OTHER ASSETS - (1.47%)						(91,252,111	)
TOTAL NET ASSETS - 100.00%					$	6,198,270,156
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2019 (Note 9).

^C Value was determined using significant unobservable inputs.

^D Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $0 or 0.00% of net assets.

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

^F 7-day yield.

^G This security or a piece thereof is held as segregated collateral.

ADR - American Depositary Receipt.

ETF - Exchange-Traded Fund.

LLC - Limited Liability Company.

LP - Limited Partnership.

MLP – Master Limited Partnership.

PLC - Public Limited Company.

See accompanying notes

25

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2019

Long Futures Contracts Open on October 31, 2019:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
Russell 2000 E-Mini Index Futures	2,454	December 2019	$	190,666,103	$	191,829,180	$	1,163,077
			$	190,666,103	$	191,829,180	$	1,163,077

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2019, the investments were classified as described below:

Small Cap Value Fund	Level 1		Level 2		Level 3			Total
Assets
Common Stocks	$	5,980,687,425	$	-	$	0	(1)	$	5,980,687,425
Exchange-Traded Instruments		9,913,590		-		-			9,913,590
Short-Term Investments		202,748,699		10,453,964		-			213,202,663
Securities Lending Collateral		85,718,589		-		-			85,718,589
Total Investments in Securities - Assets	$	6,279,068,303	$	10,453,964	$	-		$	6,289,522,267
Financial Derivative Instruments - Assets
Futures Contracts	$	1,163,077	$	-	$	-		$	1,163,077
Total Financial Derivative Instruments - Assets	$	1,163,077	$	-	$	-		$	1,163,077

⁽¹⁾ Investment held in the Fund’s Portfolio with $0 fair value.

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2019, there were no transfers into or out of Level 3.

The following table is a reconciliation of Level 3 assets within 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:

Security Type	Balance as of 10/31/2018	Purchases	Sales	Accrued Discounts (Premiums)		Realized Gain (Loss)		Change in Unrealized Appreciation (Depreciation)		Transfer into Level 3		Transfer out of Level 3		Balance as of 10/31/2019			Unrealized Appreciation (Depreciation) at Period end**
Common Stocks	$           0(1)	$            -	$      -	$	-	$	-	$	-	$	-	$	-	$	0	(1)	$	-

** Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at period end. This balance is included in the change in unrealized appreciation (depreciation) on the Statement of Operations.

⁽¹⁾  Investment held in the Fund’s Portfolio with $0 fair value.

The common stock, classified as Level 3, is beneficial interest units in a representation and warranty insurance trust. The shares have been fair valued at $0 due to limited market transparency.

See accompanying notes

26

American Beacon Small Cap Value Fund^SM

Statement of Assets and Liabilities

October 31, 2019

Assets:
Investments in unaffiliated securities, at fair value†§	$	6,001,054,979
Investments in affiliated securities, at fair value‡		288,467,288
Cash		44,261
Dividends and interest receivable		2,336,273
Receivable for investments sold		29,788,890
Receivable for fund shares sold		3,573,905
Receivable for variation margin on open futures contracts (Note 5)		1,167,762
Prepaid expenses		63,159
Total assets		6,326,496,517
Liabilities:
Payable for investments purchased		30,210,282
Payable for fund shares redeemed		4,631,039
Cash due to broker for futures contracts		2,575,030
Management and sub-advisory fees payable (Note 2)		4,389,138
Service fees payable (Note 2)		173,987
Transfer agent fees payable (Note 2)		127,864
Payable upon return of securities loaned (Note 9)§		85,718,589
Custody and fund accounting fees payable		111,596
Professional fees payable		57,249
Trustee fees payable (Note 2)		42,010
Payable for prospectus and shareholder reports		108,863
Other liabilities		80,714
Total liabilities		128,226,361
Net assets	$	6,198,270,156
Analysis of net assets:
Paid-in-capital	$	5,650,193,108
Total distributable earnings (deficits)A		548,077,048
Net assets	$	6,198,270,156
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		176,127,129
Y Class		11,186,081
Investor Class		19,195,024
Advisor Class		2,827,909
A Class		2,922,564
C Class		615,311
R6 Class		56,579,514
Net assets:
Institutional Class	$	4,073,332,655
Y Class	$	254,599,477
Investor Class	$	424,569,237
Advisor Class	$	61,618,406
A Class	$	63,246,155
C Class	$	12,619,613
R6 Class	$	1,308,284,613
Net asset value, offering and redemption price per share:
Institutional Class	$	23.13
Y Class	$	22.76
Investor Class	$	22.12
Advisor Class	$	21.79
A Class	$	21.64
A Class (offering price)	$	22.96
C Class	$	20.51
R6 Class	$	23.12
† Cost of investments in unaffiliated securities	$	5,454,259,970
‡ Cost of investments in affiliated securities	$	288,467,288
§ Fair value of securities on loan	$	333,549,228
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

27

American Beacon Small Cap Value Fund^SM

Statement of Operations

For the year ended October 31, 2019

Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	110,808,896
Dividend income from affiliated securities (Note 8)		4,990,046
Interest income		754,684
Income derived from securities lending (Note 9)		1,742,480
Total investment income		118,296,106
Expenses:
Management and sub-advisory fees (Note 2)		46,959,994
Transfer agent fees:
Institutional Class (Note 2)		1,321,729
Y Class (Note 2)		304,122
Investor Class		26,324
Advisor Class		6,632
A Class		14,641
C Class		4,212
R6 Class		36,790
Custody and fund accounting fees		619,663
Professional fees		287,927
Registration fees and expenses		151,214
Service fees (Note 2):
Investor Class		1,604,605
Advisor Class		194,862
A Class		125,754
C Class		16,284
Distribution fees (Note 2):
Advisor Class		172,147
A Class		163,376
C Class		127,208
Prospectus and shareholder report expenses		466,690
Trustee fees (Note 2)		474,848
Other expenses		629,605
Total expenses		53,708,627
Net investment income		64,587,479
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesA		(4,029,021	)
Redemption in kind (Note 7)		1,590,938
Commission recapture (Note 1)		30,147
Foreign currency transactions		274
Futures contracts		(4,931,502	)
Change in net unrealized appreciation of:
Investments in unaffiliated securitiesB		37,418,329
Foreign currency transactions		2,413
Futures contracts		23,713,219
Net gain from investments		53,794,797
Net increase in net assets resulting from operations	$	118,382,276
† Foreign taxes	$	198,431
A The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
B The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.

See accompanying notes

28

American Beacon Small Cap Value Fund^SM

Statement of Changes in Net Assets

	Year Ended October 31, 2019			Year Ended October 31, 2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	64,587,479		$	44,003,539
Net realized gain (loss) from investments in unaffiliated securities, redemption in kind, commission recapture, foreign currency transactions, and futures contracts		(7,339,164	)		706,938,150
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions, and futures contracts		61,133,961			(944,177,325	)
Net increase (decrease) in net assets resulting from operations		118,382,276			(193,235,636	)
Distributions to shareholders:
Total retained earnings:
Institutional Class		(510,792,954	)		(483,990,858	)
Y Class		(37,948,891	)		(34,475,891	)
Investor Class		(60,820,852	)		(58,686,508	)
Advisor Class		(8,576,120	)		(8,714,846	)
A Class		(8,031,568	)		(6,415,873	)
C Class		(1,576,223	)		(1,398,033	)
R6 Class		(107,632,048	)		(35,513,779	)
Net distributions to shareholders		(735,378,656	)		(629,195,788	)
Capital share transactions (Note 11):
Proceeds from sales of shares		1,663,527,301			1,841,822,459
Reinvestment of dividends and distributions		708,177,544			608,543,857
Cost of shares redeemed		(2,101,711,543	)		(2,123,030,353	)
Net increase in net assets from capital share transactions		269,993,302			327,335,963
Net (decrease) in net assets		(347,003,078	)		(495,095,461	)
Net assets:
Beginning of period		6,545,273,234			7,040,368,695
End of period	$	6,198,270,156		$	6,545,273,234

See accompanying notes

29

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of October 31, 2019, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon Small Cap Value Fund (the “Fund”). The remaining thirty-one active series are reported in separate filings.

American Beacon Advisors, Inc. (the “Manager”) is a Delaware corporation and a wholly-owned subsidiary of Resolute Investment Managers, Inc. (“RIM”) organized in 1986 to provide business management, advisory, administrative, and asset management consulting services to the Trust and other investors. The Manager is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). RIM is, in turn, a wholly-owned subsidiary of Resolute Acquisition, Inc., which is a wholly-owned subsidiary of Resolute Topco, Inc., a wholly-owned subsidiary of Resolute Investment Holdings, LLC (“RIH”). RIH is owned primarily by Kelso Investment Associates VIII, L.P., KEP VI, LLC and Estancia Capital Partners L.P., investment funds affiliated with Kelso & Company, L.P. (“Kelso”) or Estancia Capital Management, LLC (“Estancia”), which are private equity firms.

Recent Accounting Pronouncements

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-08, Premium Amortization of Purchased Callable Debt Securities. The amendments in the ASU shorten the premium amortization period on a purchased callable debt security from the security’s contractual life to the earliest call date. It is anticipated that this change will enhance disclosures by reducing losses recognized when a security is called on an earlier date. This ASU is effective for fiscal years beginning after December 15, 2018. The Manager continues to evaluate the impact this ASU will have on the financial statements and other disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”). The amendments in the ASU impact disclosure requirements for fair value measurement. It is anticipated that this change will enhance the effectiveness of disclosures in the notes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted and can include the entire standard or certain provisions that exclude or amend disclosures. For the year ended October 31, 2019, the Fund has chosen to adopt the standard. The adoption of this ASU guidance did not have a material impact on the financial statements and other disclosures.

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	Eligible Investors	Minimum Initial Investments
Institutional	Large institutional investors - sold directly or through intermediary channels.	$	250,000
Y Class	Large institutional retirement plan investors - sold directly or through intermediary channels.	$	100,000
Investor	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500
Advisor Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrators.	$	2,500
A Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”).	$	2,500

30

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Class	Eligible Investors	Minimum Initial Investments
C Class	Retail investors who invest directly through a financial intermediary, such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC.	$	1,000
R6 Class	Large institutional retirement plan investors - sold through retirement plan sponsors.		None

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 based on 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 service, distribution, transfer agent fees, and sub-transfer agent fees that vary amongst the classes as described more fully in Note 2.

Significant Accounting Policies

The following is a summary of significant accounting policies, consistently followed by the Fund in preparation of the financial statements. The Fund is considered an investment company and accordingly, follows the investment company accounting and reporting guidance of the FASB Accounting Standards Codification Topic 946, Financial Services - Investment Companies, a part of Generally Accepted Accounting Principles (“U.S. GAAP”).

Security Transactions and Investment Income

Security transactions are recorded as of the trade date for financial reporting purposes. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled beyond a standard settlement period for the security after the trade date.

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, net of foreign taxes, is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. Realized gains (losses) from securities sold are determined based on specific lot identification.

Distributions to Shareholders

The Fund distributes most or all of its net earning and realized gains, if any, each taxable year in the form of dividends from net investment income and distributions of realized net capital gains and net gains from foreign currency translations on an annual basis. The Fund does not have a fixed dividend rate and does not guarantee that it will pay any distributions in any particular period. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Fund may designate earnings and profits distributed to shareholders on the redemption of shares.

Commission Recapture

The Fund has established brokerage commission recapture arrangements with certain brokers or dealers. If the Fund’s investment advisor chooses to execute a transaction through a participating broker, the broker rebates a portion of the commission back to the Fund. Any collateral benefit received through participation in the commission recapture program is directed exclusively to the Fund. This amount is reported with the net realized gain in the Fund’s Statement of Operations, if applicable.

31

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Fund is allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Fund. Expenses directly charged or attributable to the Fund will be paid from the assets of the Fund. Generally, expenses of the Trust will be allocated among and charged to the assets of the Fund on a basis that the Trust’s Board of Trustees (the “Board”) deems fair and equitable, which may be based on the relative net assets of the Fund or nature of the services performed and relative applicability to the Fund.

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 liabilities arising out of the performance of their duties to the Trust. In the normal course of business, the Trust enters into contracts that provide indemnification to the other party or parties against potential costs or liabilities. The Trust’s maximum exposure under these arrangements is dependent on claims that may be made in the future and, therefore, cannot be estimated. The Trust has had no prior claims or losses pursuant to any such agreement.

2.  Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

The Fund and the Manager are parties to a Management Agreement that obligates the Manager to provide the Fund with investment advisory and administrative services. As compensation for performing the duties under the Management Agreement, the Manager will receive an annualized management fee based on a percentage of the Fund’s average daily net assets that is calculated and accrued daily according to the following schedule:

First $15 billion	0.35	%
Next $15 billion	0.325	%
Over $30 billion	0.30	%

The Trust, on behalf of the Fund, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Brandywine Global Investment Management, LLC; Foundry Partners, LLC; Hillcrest Asset Management, LLC; Hotchkis and Wiley Capital Management, LLC; and Mellon Investments Corporation (“Sub-Advisors”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets.

The Management and Sub-Advisory Fees paid by the Fund for the year ended October 31, 2019 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	22,057,579
Sub-Advisor Fees		0.38	%		24,902,415
Total		0.73	%	$	46,959,994

As compensation for services provided by the Manager in connection with securities lending activities conducted by the Fund, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee up to 10% of the net monthly interest income (the gross interest income earned by the investment of cash

32

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee up to 10% of such loan fees. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statement of Operations. During the year ended October 31, 2019, the Manager received securities lending fees of $212,913 for the securities lending activities of the Fund.

Distribution Plans

The Fund, except for the Advisor, 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 separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the management fee received by the Manager and the investment advisors hired by the Manager to be used for distribution purposes. Under this Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares.

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

Service Plans

The Manager and the Trust entered into a Service Plan that obligates the Manager to oversee additional shareholder servicing of the Investor, Advisor, A, and C Classes of the Fund. As compensation for performing the duties required under the Service Plan, the Manager receives an annualized fee up to 0.25% of the average daily net assets of the A and C Classes, up to 0.25% of the average daily net assets of the Advisor Class, and up to 0.375% of the average daily net assets of the Investor Class of the Fund.

Sub-Transfer Agent Fees

The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the Institutional and Y Classes of the Fund and has agreed to compensate the intermediaries for providing these services. Intermediaries transact with the Fund primarily through the use of omnibus accounts on behalf of its customers who hold positions in the Fund. Certain services would have been provided by the Fund’s transfer agent and other service providers if the shareholders’ accounts were maintained directly by the Fund’s transfer agent. Accordingly, the Fund, pursuant to Board approval, has agreed to reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries for the Institutional and Y Classes. The reimbursement amounts (sub-transfer agent fees) paid to the Manager are subject to a fee limit of up to 0.10% of an intermediary’s average net assets in the Institutional and Y Classes on an annual basis. During the year ended October 31, 2019, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Small Cap Value	$	1,463,002

As of October 31, 2019, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
Small Cap Value	$	67,435

33

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Brokerage Commissions

Affiliated entities of a sub-advisor to the Fund received commissions on purchases and sales of the Fund’s portfolio securities totaling $155,758 for the year ended October 31, 2019.

Investments in Affiliated Funds

The Fund may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Fund in connection with securities lending may also be invested in the USG Select Fund. The Fund and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended October 31, 2019, the Manager earned fees on the Fund’s direct investments and securities lending collateral investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral Investments in USG Select Fund		Total
Small Cap Value	$	224,988	$	100,044	$	325,032

Interfund Credit Facility

Pursuant to an exemptive order issued by the SEC, the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the Fund because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2019, the Fund participated as a lender by loaning an average amount of $24,169,396 for 2 days at an average interest rate of 3.05% with interest charges earned of $4,035. This amount is included in “Interest income” on the Statement of Operations.

Expense Reimbursement Plan

The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years after the date of the Manager’s waiver/reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. During the year ended October 31, 2019 there were no waived fees, expenses reimbursed, or recouped expenses.

Sales Commissions

The Fund’s Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers and it may be used to offset distribution related expenses. During the year ended October 31, 2019, RID collected $2,700 from the sale of Class A Shares.

34

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

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 Fund’s Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2019, CDSC fees of $50 were collected for Class A Shares of 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 Fund’s Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2019, CDSC fees of $254 were collected for Class C Shares of the Fund.

Trustee Fees and Expenses

As compensation for their service to the Trusts, each Trustee receives an annual retainer of $120,000, plus $10,000 for each Board meeting attended in person or via teleconference, $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, and $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee, plus reimbursement of reasonable expenses incurred in attending Board meetings, Committee meetings, and relevant educational seminars. The Trustees also may be compensated for attendance at special Board and/or Committee meetings from time to time. The Board Chair receives an additional annual retainer of $50,000 as well as a $2,500 fee each quarter for attendance at the committee meetings. The Chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chairman of the Nominating and Governance Committee receives an additional annual retainer of $10,000. These expenses are allocated on a prorated basis to each fund of the Trusts according to its respective net assets.

3.  Security Valuation and Fair Value Measurements

The price of the Fund’s shares is based on its net asset value (“NAV”) per share. The Fund’s NAV is computed by adding total assets, subtracting all the Fund’s liabilities, and dividing the result by the total number of shares outstanding.

The NAV of each class of the Fund’s shares is determined based on a pro rata allocation of the Fund’s investment income, expenses and total capital gains and losses. The Fund’s NAV per share is determined each business day as of the regular close of trading on the New York Stock Exchange (“NYSE” or “Exchange”), which is typically 4:00 p.m. Eastern Time (“ET”). However, if trading on the NYSE closes at a time other than 4:00 p.m. ET, the Fund’s NAV per share typically would still be determined as of the regular close of trading on the NYSE. The Fund does not price its shares on days that the NYSE is closed. Foreign exchanges may permit trading in foreign securities on days when the Fund is not open for business, which may result in the value of the Fund’s portfolio investments being affected at a time when you are unable to buy or sell shares.

Equity securities, including shares of closed-end funds and exchange-traded funds (“ETFs”), are valued at the last sale price or official closing price taken from the primary exchange in which each security trades. Investments in other mutual funds are valued at the closing NAV per share on the day of valuation. Debt securities are valued at bid quotes from broker/dealers or evaluated bid prices from pricing services, who may consider a number of inputs and factors, such as prices of comparable securities, yield curves, spreads, credit ratings, coupon rates, maturity, default rates, and underlying collateral. Futures are valued based on their daily settlement prices. Exchange-traded and over-the-counter (“OTC”) options are valued at the last sale price. Options with no last sale for the day are priced at mid quote. Swaps are valued at evaluated mid prices from pricing services.

The valuation of securities traded on foreign markets and certain fixed-income securities will generally be based on prices determined as of the earlier closing time of the markets on which they primarily trade unless a significant event has occurred. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. ET.

35

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Securities may be valued at fair value, as determined in good faith and pursuant to procedures approved by the Board, under certain limited circumstances. For example, fair value pricing will be used when market quotations are not readily available or reliable, as determined by the Manager, such as when (i) trading for a security is restricted or stopped; (ii) a security’s trading market is closed (other than customary closings); or (iii) a security has been de-listed from a national exchange. A security with limited market liquidity may require fair value pricing if the Manager determines that the available price does not reflect the security’s true market value. In addition, if a significant event that the Manager determines to affect the value of one or more securities held by the Fund occurs after the close of a related exchange but before the determination of the Fund’s NAV, fair value pricing may be used on the affected security or securities. Securities of small-capitalization companies are also more likely to require a fair value determination using these procedures because they are more thinly traded and less liquid than the securities of larger-capitalization companies. The Fund may fair value securities as a result of significant events occurring after the close of the foreign markets in which the Fund invests as described below. In addition, the Fund may invest in illiquid securities requiring these procedures.

The Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund’s 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. If the Manager determines that the last quoted prices of non-U.S. securities will, in its judgment, materially affect the value of some or all its portfolio securities, the Manager can 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. These securities are fair valued using a pricing service, using methods approved by the Board, that considers the 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 American Depositary Receipts (“ADRs”) and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. The Fund uses outside pricing services to provide 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.

Attempts to determine the fair value of securities introduce an element of subjectivity to the pricing of securities. As a result, the price of a security determined through fair valuation techniques may differ from the price quoted or published by other sources and may not accurately reflect the market value of the security when trading resumes. If a reliable market quotation becomes available for a security formerly valued through fair valuation techniques, the Manager compares the new market quotation to the fair value price to evaluate the effectiveness of the Fund’s fair valuation procedures. If any significant discrepancies are found, the Manager may adjust the Fund’s fair valuation procedures.

Valuation Inputs

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

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

36

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

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

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

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 the 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 the Fund’s NAV that fairly reflects security values as of the time of pricing, the Trust cannot guarantee that values determined by the Board or persons acting at their direction would accurately reflect the price that a Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ from the value that would be realized if the securities were sold.

4.  Securities and Other Investments

American Depositary Receipts

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

37

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

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.

Common Stock

Common stock generally takes the form of shares in a corporation which represent an ownership interest. It ranks below preferred stock and debt securities in claims for dividends and for assets of the company in a liquidation or bankruptcy. The value of a company’s common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company’s products or services. A stock’s value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company’s stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company’s common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or OTC. OTC stock may be less liquid than exchange-traded stock.

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, unit investment trusts, and other investment companies of the Trust. The Fund may invest in securities of an investment company 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, the Fund becomes a shareholder of that investment company. As a result, the Fund’s shareholders indirectly will bear the Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s shareholders directly bear in connection with the Fund’s own operations. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

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.

5.  Financial Derivative Instruments

The Fund may utilize derivative instruments to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs. 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.

38

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

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.

During the year ended October 31, 2019, the Fund entered into futures contracts primarily for exposing cash to markets.

The Fund’s average 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 the purpose of this disclosure, volume is measured by contracts outstanding at each quarter end.

Average Futures Contracts Outstanding
Fund	Year Ended October 31, 2019
Small Cap Value		2,749

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

Fair values of financial instruments on the Statement of Assets and Liabilities as of October 31, 2019:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Receivable for variation margin from open futures contracts(2)		$	-		$	-		$	-		$	-		$	1,163,077		$	1,163,077

The effect of financial derivative instruments on the Statement of Operations as of October 31, 2019:
	Derivatives not accounted for as hedging instruments
Realized gain (loss) from derivatives recognized as a result of operations	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts				Total
Futures contracts		$	-		$	-		$	-		$	-		$	(4,931,502	)		$	(4,931,502	)
Net change in unrealized appreciation (depreciation) of derivatives recognized as a result from operations:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts				Total
Futures contracts		$	-		$	-		$	-		$	-		$	23,713,219			$	23,713,219

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

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

39

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Offsetting Assets and Liabilities

The Fund is a party to enforceable master netting agreements between brokers and counterparties 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 Statement 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, October 31, 2019.

Offsetting of Financial and Derivative Assets as of October 31, 2019:
	Assets			Liabilities
Futures Contracts(1)	$	1,163,077		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	1,163,077		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(1,163,077	)	$	-

	Remaining Contractual Maturity of the Agreements As of October 31, 2019
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	85,718,589	$	-	$	-	$	-	$	85,718,589
Total Borrowings	$	85,718,589	$	-	$	-	$	-	$	85,718,589
Gross amount of recognized liabilities for securities lending transactions									$	85,718,589

⁽¹⁾  Includes cumulative appreciation or (depreciation) of futures contracts as reported in the Schedule of Investments footnotes. Only current

day’s variation margin is reported within the Statement of Assets and Liabilities.

6.  Principal Risks

Investing in the Fund may involve certain risks including, but not limited to, those described below.

Equity Investments Risk

Equity securities are subject to market risk. The Fund’s investments in equity securities may include common stocks, preferred stocks, securities convertible into or exchangeable for common stocks, REITs, depositary receipts, and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. Such investments may expose the Fund to additional risk. The value of a company’s common stock may fall as a result of factors affecting the company, companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company. Preferred stocks and convertible securities are sensitive to movements in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. Convertible securities are subject to the risk that the credit standing of the issuer may have an effect on the convertible securities’ investment value. Investments in REITs are subject to the risks associated with investing in the real estate industry such as adverse developments affecting the real estate industry and real property values. Depositary receipts and U.S. dollar-denominated foreign stocks traded on U.S. exchanges are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency fluctuations and political and financial instability in the home country of a particular depositary receipt or foreign stock.

Foreign Investing and Emerging Markets Risk

Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity,

40

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

(4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, (6) less government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. To the extent the Fund invests a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region. In addition, the economies and political environments of emerging market countries tend to be more unstable than those of developed countries, resulting in more volatile rates of return than the developed markets and substantially greater risk to investors. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currency and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depository or their agents goes bankrupt. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than, or in addition to, investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities, resulting in increased volatility and limited liquidity for emerging market securities; trading suspensions; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return.

Futures Contracts Risk

Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Futures contracts may experience potentially dramatic price changes (losses) and imperfect correlation between the price of the contract and the underlying security or index, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).

Market Risk

Conditions in the U.S. and many foreign economies have resulted, and may continue to result, in certain instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In some cases, traditional market participants have been less willing to make a market in some types of debt instruments, which has affected the liquidity of those instruments. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Treasury, causing the prices of these securities to rise and the yields to decline. Reduced liquidity in fixed income and credit markets may negatively affect many issuers worldwide. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.

In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. In some countries where economic conditions are recovering, they are nevertheless perceived as still fragile. Withdrawal of government support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding, could adversely impact the value and liquidity of certain securities. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations, including changes in tax laws. The impact of new financial regulation legislation on the markets and the practical implications for market participants may not be fully known for some time. Regulatory changes are causing some financial services

41

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

companies to exit long-standing lines of business, resulting in dislocations for other market participants. In addition, political and governmental events within the U.S. and abroad, such as the United States government’s inability at times to agree on a long-term budget and deficit reduction plan, the threat of a federal government shutdown and threats not to increase the federal government’s debt limit, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The U.S. government has reduced the federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets’ expectations for changes in government policies are not borne out.

Changes in market conditions will not have the same impact on all types of securities. Interest rates have been unusually low in recent years in the United States and abroad. Because there is little precedent for this situation, it is difficult to predict the impact of a significant rate increase on various markets. For example, because investors may buy securities or other investments with borrowed money, a significant increase in interest rates may cause a decline in the markets for those investments. Because of the sharp decline in the worldwide price of oil, there is a concern that oil producing nations may withdraw significant assets now held in U.S. Treasuries, which could force a substantial increase in interest rates. Regulators have expressed concern that rate increases may cause investors to sell fixed income securities faster than the market can absorb them, contributing to price volatility. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse.

The precise timing and the resulting impact of the United Kingdom’s departure from the European Union (the “EU”), commonly referred to as “Brexit,” are not yet known. The effect on the United Kingdom’s economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are matters to be negotiated. The outcomes may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time, which could significantly adversely affect the value of the Fund’s investments in the United Kingdom and Europe.

Multiple Sub-Advisor Risk

The Manager may allocate the Fund’s assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Fund’s assets. To a significant extent, the Fund’s performance will depend on the success of the Manager in allocating the Fund’s assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-advisor manages its allocated portion of the Fund independently from another sub-advisor, the same security may be held in different portions of the Fund, or may be acquired for one portion of the Fund at a time when a sub-advisor to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Fund’s holdings. Similarly, under some market conditions, one sub-advisor may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-advisor believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Fund. Because each sub-advisor directs the trading for its own portion of the Fund, and does not aggregate its transactions with those of the other sub-advisors, the Fund may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Fund’s assets among the Fund’s sub-advisors in a manner that it believes is consistent with achieving the Fund’s investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Fund’s assets among sub-advisors, due to factors that could impact the Manager’s revenues and profits.

42

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Other Investment Companies Risk

The Fund may invest in shares of other registered investment companies, including money market funds, exchange-traded funds (“ETFs”). To the extent that the Fund invests in shares of other registered investment companies, the Fund will indirectly bear the fees and expenses, including for example, advisory and administrative fees, charged by those investment companies in addition to the Fund’s direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Fund’s investments in money market funds are subject to interest rate risk, credit risk, and market risk. The Fund must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Fund’s investment may decline, adversely affecting the Fund’s performance. ETFs are subject to the following risks that do not apply to conventional funds: (1) the market price of an ETF’s shares may trade at a discount or premium to its NAV; (2) an active trading market for an ETF’s shares may not develop or be maintained; or (3) trading of an ETF’s shares may be halted if the listing exchange’s officials deem such action appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally. An ETF that tracks an index may not precisely replicate the returns of its benchmark index. To the extent the Fund invests in other investment companies that invest in equity securities, fixed-income securities and/or foreign securities, or that track an index, the Fund is subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject. ETFs have expenses associated with their operation, typically including advisory fees. For example, the Funds’ investments in money market funds are subject to interest rate risk, credit risk, and market risk.

Sector Risk

Sector risk is the risk associated with a Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent a Fund has substantial holdings within a particular sector, the risks to a Fund associated with that sector increase.

To the extent a Fund invests significantly in the financial services sector, the value of the Fund’s shares may be particularly vulnerable to factors affecting that sector, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition. The value of a Fund’s shares could experience significantly greater volatility than investment companies investing more broadly.

Securities Lending Risk

A Fund may lend its portfolio securities to brokers, dealers and financial institutions to seek income. There is a risk that a borrower may default on its obligations to return loaned securities; however, a Fund’s securities lending agent indemnifies the Fund against that risk. There is a risk that the assets of a Fund’s securities lending agent may be insufficient to satisfy any contractual indemnification requirements to the Fund. Borrowers of a Fund’s securities typically provide collateral in the form of cash that is reinvested in securities. A Fund will be responsible for the risks associated with the investment of cash collateral, including any collateral invested in an affiliated money market fund. A Fund may lose money on its investment of cash collateral or may fail to earn sufficient income on its investment to meet obligations to the borrower. In addition, delays may occur in the recovery of securities from borrowers, which could interfere with a Fund’s ability to vote proxies or to settle transactions and there is the risk of possible loss of rights in the collateral should the borrower fail financially. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.    

43

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

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 distributions 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 unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2019 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 expenses” on the Statement of Operations.

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 (depreciation), as applicable, as the income is earned or capital gains are recorded.

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 tax character of distributions paid were as follows:

	Year Ended October 31, 2019		Year Ended October 31, 2018
Distributions paid from:
Ordinary income*
Institutional Class	$	91,820,913	$	108,083,614
Y Class		6,588,024		7,511,690
Investor Class		9,370,479		11,549,809
Advisor Class		1,173,357		1,566,030
A Class		1,198,755		1,244,711
C Class		200,548		245,106
R6 Class		19,595,965		8,023,251
Long-term capital gains
Institutional Class		418,972,041		375,907,244
Y Class		31,360,867		26,964,201
Investor Class		51,450,373		47,136,699
Advisor Class		7,402,763		7,148,816
A Class		6,832,813		5,171,162
C Class		1,375,675		1,152,927
R6 Class		88,036,083		27,490,528
Total distributions paid	$	735,378,656	$	629,195,788

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

As of October 31, 2019, the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Small Cap Value	$	5,842,323,929	$	923,554,132	$	(476,353,508	)	$	447,200,624

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)		Other Temporary Differences		Distributable Earnings
Small Cap Value	$	447,200,624	$	58,096,707	$	42,779,716	$	–	$	1	$	548,077,048

44

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains (losses) on certain derivative instruments, reclassifications of income from investments in real estate investment securities and publicly traded partnerships, and the realization for tax purposes of unrealized gains from passive foreign investment companies.

A shareholder of the Fund elected to receive securities rather than cash for their redemption proceeds. The Fund realized gains of $1,590,938 as a result of the in-kind distribution, as disclosed in the Statement of Operations for the year ended October 31, 2019. Those gains were not recognized for federal income tax purposes.

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

Accordingly, the following amounts represent current year permanent differences derived from net realized gains from redemption of shares and tax-exempt interest and nondeductible expenses from investments in publicly traded partnerships as of October 31, 2019:

Fund	Paid-In-Capital		Distributable Earnings/(Deficits)
Small Cap Value	$	953,988	$	(953,988	)

Under the Regulated Investment Company Modernization Act of 2010 (“RIC MOD”), net capital losses recognized by the Fund in taxable years beginning after December 22, 2010 are carried forward indefinitely and retain their character as short-term and/or long-term losses.

As of October 31, 2019, the Fund did not have any capital loss carryforwards.

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2019 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
Small Cap Value	$	2,915,408,387	$	3,143,849,969

A summary of the Fund’s transactions in the USG Select Fund for the year ended October 31, 2019 were as follows:

Fund	Type of Transaction	October 31, 2018 Shares/Fair Value		Purchases		Sales		October 31, 2019 Shares/Fair Value		Dividend Income
Small Cap Value	Direct	$	231,346,704	$	2,201,302,929	$	2,229,900,934	$	202,748,699	$	4,990,046
Small Cap Value	Securities Lending		131,390,683		788,290,622		833,962,716		85,718,589		N/A

9.  Securities Lending

The Fund may lend its securities to qualified financial institutions, such as certain broker-dealers, to earn additional income. The borrowers are required to secure their loans continuously with collateral in an amount at least equal to the fair value of the securities loaned, initially in an amount at least equal to 102% of the fair value

45

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

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

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

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

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

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

As of October 31, 2019, the value of outstanding securities on loan and the value of collateral were as follows:

Fund	Market Value of Securities on Loan		Cash Collateral Received		Non-Cash Collateral Received		Total Collateral Received
Small Cap Value	$	333,549,228	$	85,718,589	$	261,578,219	$	347,296,808

Cash collateral is listed on the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statement of Operations.

Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund’s Schedule of Investments or Statement of Assets and Liabilities.

10.  Borrowing Arrangements

Effective November 15, 2018 (the “Effective Date”), the Fund, along with certain other funds managed by the Manager (“Participating Funds”), entered into a committed revolving line of credit (the “Committed Line”) agreement with State Street Bank and Trust Company (the “Bank”) to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Committed Line is $250 million with interest at a rate equal to the higher of

46

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

(a) one-month London Inter-Bank Offered Rate (“LIBOR”) plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on amounts borrowed. Each of the Participating Funds paid a closing fee of $100,000 on the Effective Date and a quarterly commitment fee at a rate of 0.25% per annum on the unused portion of the Committed Line amount. The Committed Line expires November 14, 2019, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

On the Effective Date, the Fund, along with certain other Participating Funds managed by the Manager, also entered into an uncommitted discretionary demand revolving line of credit (the “Uncommitted Line”) agreement with the Bank to be used to facilitate portfolio liquidity. The maximum borrowing amount under the Uncommitted Line is $50 million with interest at a rate equal to the higher of (a) one-month LIBOR plus 1.25% per annum or (b) the Federal Funds rate plus 1.25% per annum on each outstanding loan. Each of the Participating Funds paid a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 14, 2019 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

The Participating Funds paid administration, legal and arrangement fees, which are recognized as a component of “Other expenses” on the Statement of Operations, along with commitment fees, that have been allocated among the Participating Funds based on average daily net assets.

During the year ended October 31, 2019, the Fund did not utilize this facility.

11.  Capital Share Transactions

The tables below summarize the activity in capital shares for each Class of the Fund:

	Institutional Class
	Year Ended October 31,
	2019						2018
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		40,786,232		$	905,837,102			28,795,136		$	813,629,911
Reinvestment of dividends		25,003,927			493,827,557			16,834,084			466,809,134
Shares redeemed		(65,827,022	)		(1,494,733,270	)		(56,760,794	)		(1,614,754,138	)
Net (decrease) in shares outstanding		(36,863	)	$	(95,068,611	)		(11,131,574	)	$	(334,315,093	)
	Y Class
	Year Ended October 31,
	2019						2018
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		4,930,647		$	109,885,695			4,344,937		$	121,072,021
Reinvestment of dividends		1,746,520			33,969,817			1,202,236			32,893,173
Shares redeemed		(8,766,203	)		(193,165,982	)		(5,295,216	)		(145,505,953	)
Net increase (decrease) in shares outstanding		(2,089,036	)	$	(49,310,470	)		251,957		$	8,459,241
	Investor Class
	Year Ended October 31,
	2019						2018
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		3,715,943		$	80,851,925			3,480,761		$	95,354,068
Reinvestment of dividends		3,117,232			59,040,372			2,130,538			56,927,968
Shares redeemed		(9,082,162	)		(197,139,665	)		(7,367,883	)		(200,093,625	)
Net (decrease) in shares outstanding		(2,248,987	)	$	(57,247,368	)		(1,756,584	)	$	(47,811,589	)
	Advisor Class
	Year Ended October 31,
	2019						2018
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		670,232		$	14,157,059			690,534		$	18,573,884
Reinvestment of dividends		459,107			8,576,120			330,358			8,714,846
Shares redeemed		(1,433,579	)		(31,013,154	)		(1,403,591	)		(37,945,197	)
Net (decrease) in shares outstanding		(304,240	)	$	(8,279,975	)		(382,699	)	$	(10,656,467	)

47

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2019

	A Class
	Year Ended October 31,
	2019						2018
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		951,880		$	20,693,725			1,187,223		$	32,064,750
Reinvestment of dividends		428,578			7,950,119			241,813			6,345,165
Shares redeemed		(1,150,666	)		(24,626,471	)		(1,004,403	)		(26,949,383	)
Net increase in shares outstanding		229,792		$	4,017,373			424,633		$	11,460,532
	C Class
	Year Ended October 31,
	2019						2018
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		130,548		$	2,643,117			94,040		$	2,432,559
Reinvestment of dividends		85,773			1,516,472			53,040			1,339,793
Shares redeemed		(172,252	)		(3,441,752	)		(144,241	)		(3,717,938	)
Net increase in shares outstanding		44,069		$	717,837			2,839		$	54,414
	R6 Class
	Year Ended October 31,
	2019						2018
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		23,696,726		$	529,458,678			26,568,807		$	758,695,266
Reinvestment of dividends		5,232,882			103,297,087			1,281,161			35,513,778
Shares redeemed		(6,869,399	)		(157,591,249	)		(3,354,657	)		(94,064,119	)
Net increase in shares outstanding		22,060,209		$	475,164,516			24,495,311		$	700,144,925

12.  Subsequent Events

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.

48

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended October 31,
	2019			2018			2017			2016A			2015
Net asset value, beginning of period	$	26.14		$	29.51		$	24.36		$	24.69		$	27.80
Income (loss) from investment operations:
Net investment income		0.26			0.21			0.17			0.23			0.24
Net gains (losses) on investments (both realized and unrealized)		(0.25	)		(0.94	)		5.83			0.79			0.02
Total income (loss) from investment operations		0.01			(0.73	)		6.00			1.02			0.26
Less distributions:
Dividends from net investment income		(0.18	)		(0.15	)		(0.23	)		(0.20	)		(0.19	)
Distributions from net realized gains		(2.84	)		(2.49	)		(0.62	)		(1.15	)		(3.18	)
Total distributions		(3.02	)		(2.64	)		(0.85	)		(1.35	)		(3.37	)
Net asset value, end of period	$	23.13		$	26.14		$	29.51		$	24.36		$	24.69
Total returnB		2.01	%		(2.96	)%		24.80	%		4.58	%		0.87	%
Ratios and supplemental data:
Net assets, end of period	$	4,073,332,655		$	4,604,864,422		$	5,527,380,111		$	4,717,291,753		$	4,313,522,956
Ratios to average net assets:
Expenses, before reimbursements		0.83	%		0.80	%		0.82	%		0.83	%		0.81	%
Expenses, net of reimbursements		0.83	%		0.80	%		0.82	%		0.83	%		0.81	%
Net investment income, before expense reimbursements		1.07	%		0.66	%		0.58	%		1.01	%		0.99	%
Net investment income, net of reimbursements		1.07	%		0.66	%		0.58	%		1.01	%		0.99	%
Portfolio turnover rate		48	%		69	%		48	%		53	%		47	%

^A  On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC.

^B  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

49

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2019			2018			2017			2016A			2015
Net asset value, beginning of period	$	25.77		$	29.13		$	24.06		$	24.41		$	27.52
Income (loss) from investment operations:
Net investment income		0.26			0.17			0.12			0.23			0.23
Net gains (losses) on investments (both realized and unrealized)		(0.27	)		(0.90	)		5.78			0.76			0.01
Total income (loss) from investment operations		(0.01	)		(0.73	)		5.90			0.99			0.24
Less distributions:
Dividends from net investment income		(0.16	)		(0.14	)		(0.21	)		(0.19	)		(0.17	)
Distributions from net realized gains		(2.84	)		(2.49	)		(0.62	)		(1.15	)		(3.18	)
Total distributions		(3.00	)		(2.63	)		(0.83	)		(1.34	)		(3.35	)
Net asset value, end of period	$	22.76		$	25.77		$	29.13		$	24.06		$	24.41
Total returnB		1.93	%		(3.03	)%		24.70	%		4.49	%		0.79	%
Ratios and supplemental data:
Net assets, end of period	$	254,599,477		$	342,125,601		$	379,409,116		$	296,082,333		$	251,360,287
Ratios to average net assets:
Expenses, before reimbursements		0.90	%		0.87	%		0.90	%		0.90	%		0.90	%
Expenses, net of reimbursements		0.90	%		0.87	%		0.90	%		0.90	%		0.90	%
Net investment income, before expense reimbursements		1.00	%		0.59	%		0.50	%		0.94	%		0.90	%
Net investment income, net of reimbursements		1.00	%		0.59	%		0.50	%		0.94	%		0.90	%
Portfolio turnover rate		48	%		69	%		48	%		53	%		47	%

^A  On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC.

^B  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

50

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2019			2018			2017			2016A			2015
Net asset value, beginning of period	$	25.12		$	28.46		$	23.52		$	23.86		$	26.96
Income (loss) from investment operations:
Net investment income		0.22			0.11			0.11			0.19			0.18
Net gains (losses) on investments (both realized and unrealized)		(0.29	)		(0.89	)		5.60			0.73			(0.02	)
Total income (loss) from investment operations		(0.07	)		(0.78	)		5.71			0.92			0.16
Less distributions:
Dividends from net investment income		(0.09	)		(0.07	)		(0.15	)		(0.11	)		(0.08	)
Distributions from net realized gains		(2.84	)		(2.49	)		(0.62	)		(1.15	)		(3.18	)
Total distributions		(2.93	)		(2.56	)		(0.77	)		(1.26	)		(3.26	)
Net asset value, end of period	$	22.12		$	25.12		$	28.46		$	23.52		$	23.86
Total returnB		1.67	%		(3.28	)%		24.43	%		4.27	%		0.50	%
Ratios and supplemental data:
Net assets, end of period	$	424,569,237		$	538,602,473		$	660,241,571		$	617,552,712		$	723,044,801
Ratios to average net assets:
Expenses, before reimbursements		1.14	%		1.13	%		1.12	%		1.14	%		1.15	%
Expenses, net of reimbursements		1.14	%		1.13	%		1.12	%		1.14	%		1.15	%
Net investment income, before expense reimbursements		0.76	%		0.33	%		0.27	%		0.70	%		0.67	%
Net investment income, net of reimbursements		0.76	%		0.33	%		0.27	%		0.70	%		0.67	%
Portfolio turnover rate		48	%		69	%		48	%		53	%		47	%

^A  On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC.

^B  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

51

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor ClassA
	Year Ended October 31,
	2019			2018			2017			2016B			2015
Net asset value, beginning of period	$	24.77		$	28.09		$	23.22		$	23.60		$	26.69
Income (loss) from investment operations:
Net investment income		0.14			0.06			0.03			0.12			0.13
Net gains (losses) on investments (both realized and unrealized)		(0.25	)		(0.88	)		5.57			0.73			0.01
Total income (loss) from investment operations		(0.11	)		(0.82	)		5.60			0.85			0.14
Less distributions:
Dividends from net investment income		(0.03	)		(0.01	)		(0.11	)		(0.08	)		(0.05	)
Distributions from net realized gains		(2.84	)		(2.49	)		(0.62	)		(1.15	)		(3.18	)
Total distributions		(2.87	)		(2.50	)		(0.73	)		(1.23	)		(3.23	)
Net asset value, end of period	$	21.79		$	24.77		$	28.09		$	23.22		$	23.60
Total returnC		1.48	%		(3.44	)%		24.26	%		4.01	%		0.41	%
Ratios and supplemental data:
Net assets, end of period	$	61,618,406		$	77,578,775		$	98,718,359		$	110,205,158		$	98,224,328
Ratios to average net assets:
Expenses, before reimbursements		1.34	%		1.28	%		1.30	%		1.31	%		1.31	%
Expenses, net of reimbursements		1.34	%		1.28	%		1.30	%		1.31	%		1.31	%
Net investment income, before expense reimbursements		0.56	%		0.18	%		0.11	%		0.53	%		0.51	%
Net investment income, net of reimbursements		0.56	%		0.18	%		0.11	%		0.53	%		0.51	%
Portfolio turnover rate		48	%		69	%		48	%		53	%		47	%

^A  On January 15, 2016, the Retirement Class closed and the assets were merged into the Advisor Class.

^B  On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC.

^C  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

52

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2019			2018			2017			2016A			2015
Net asset value, beginning of period	$	24.65		$	27.99		$	23.14		$	23.54		$	26.63
Income (loss) from investment operations:
Net investment income		0.14			0.07			0.07			0.15			0.13
Net gains (losses) on investments (both realized and unrealized)		(0.24	)		(0.86	)		5.53			0.73			0.02
Total income (loss) from investment operations		(0.10	)		(0.79	)		5.60			0.88			0.15
Less distributions:
Dividends from net investment income		(0.07	)		(0.06	)		(0.13	)		(0.13	)		(0.06	)
Distributions from net realized gains		(2.84	)		(2.49	)		(0.62	)		(1.15	)		(3.18	)
Total distributions		(2.91	)		(2.55	)		(0.75	)		(1.28	)		(3.24	)
Net asset value, end of period	$	21.64		$	24.65		$	27.99		$	23.14		$	23.54
Total returnB		1.56	%		(3.37	)%		24.36	%		4.17	%		0.45	%
Ratios and supplemental data:
Net assets, end of period	$	63,246,155		$	66,380,615		$	63,481,305		$	63,277,387		$	54,815,183
Ratios to average net assets:
Expenses, before reimbursements		1.26	%		1.20	%		1.20	%		1.21	%		1.21	%
Expenses, net of reimbursements		1.26	%		1.20	%		1.20	%		1.21	%		1.22	%
Net investment income, before expense reimbursements		0.64	%		0.25	%		0.20	%		0.64	%		0.56	%
Net investment income, net of reimbursements		0.64	%		0.25	%		0.20	%		0.64	%		0.54	%
Portfolio turnover rate		48	%		69	%		48	%		53	%		47	%

^A  On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC.

^B  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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.

See accompanying notes

53

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2019			2018			2017			2016A			2015
Net asset value, beginning of period	$	23.60		$	26.98		$	22.39		$	22.84		$	26.05
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)D		(0.08	)		(0.14	)		(0.02	)		0.03
Net gains (losses) on investments (both realized and unrealized)		(0.24	)		(0.81	)		5.35			0.72			(0.06	)
Total income (loss) from investment operations		(0.25	)		(0.89	)		5.21			0.70			(0.03	)
Less distributions:
Dividends from net investment income		-			-			-			-			-
Distributions from net realized gains		(2.84	)		(2.49	)		(0.62	)		(1.15	)		(3.18	)
Total distributions		(2.84	)		(2.49	)		(0.62	)		(1.15	)		(3.18	)
Net asset value, end of period	$	20.51		$	23.60		$	26.98		$	22.39		$	22.84
Total returnB		0.85	%		(3.89	)%		23.39	%		3.42	%		(0.31	)%
Ratios and supplemental data:
Net assets, end of period	$	12,619,613		$	13,480,297		$	15,335,554		$	11,938,196		$	11,718,580
Ratios to average net assets:
Expenses, before reimbursements		1.95	%		1.86	%		1.96	%		1.96	%		1.97	%
Expenses, net of reimbursements		1.95	%C		1.76	%		1.96	%		1.96	%		1.98	%
Net investment income (loss), before expense reimbursements		(0.06	)%		(0.41	)%		(0.58	)%		(0.12	)%		(0.17	)%
Net investment income (loss), net of reimbursements		(0.06	)%		(0.31	)%		(0.58	)%		(0.12	)%		(0.17	)%
Portfolio turnover rate		48	%		69	%		48	%		53	%		47	%

^A  On June 20, 2016, Dreman Value Management, LLC was terminated and ceased managing assets of the Small Cap Value Fund, and was replaced by Foundry Partners, LLC.

^B  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with U.S. GAAP 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  This ratio does not include a voluntary reimbursement of service fees as included in the prior year.

^D  Per share amounts have been calculated using the average shares method.

See accompanying notes

54

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R6 Class
	Year Ended October 31,						February 28, 2017A to October 31,
	2019			2018			2017
Net asset value, beginning of period	$	26.14		$	29.51		$	28.03
Income from investment operations:
Net investment income (loss)		0.26			0.22			(0.00	)B
Net gains (losses) on investments (both realized and unrealized)		(0.25	)		(0.94	)		1.48
Total income (loss) from investment operations		0.01			(0.72	)		1.48
Less distributions:
Dividends from net investment income		(0.19	)		(0.16	)		-
Distributions from net realized gains		(2.84	)		(2.49	)		-
Total distributions		(3.03	)		(2.65	)		-
Net asset value, end of period	$	23.12		$	26.14		$	29.51
Total returnC		2.01	%		(2.93	)%		5.28	%D
Ratios and supplemental data:
Net assets, end of period	$	1,308,284,613		$	902,241,051		$	295,802,679
Ratios to average net assets:
Expenses, before reimbursements		0.80	%		0.77	%		0.80	%E
Expenses, net of reimbursements		0.80	%		0.77	%		0.80	%E
Net investment income (loss), before expense reimbursements		1.08	%		0.66	%		(0.04	)%E
Net investment income (loss), net of reimbursements		1.08	%		0.66	%		(0.04	)%E
Portfolio turnover rate		48	%		69	%		48	%F

^A  Commencement of operations.

^B  Amount represents less than $0.01 per share.

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

^D  Not annualized.

^E  Annualized.

^F  Portfolio turnover rate is for the period from February 28, 2017 through October 31, 2017 and is not annualized.

See accompanying notes

55

American Beacon Funds^SM

Federal Tax Information

October 31, 2019 (Unaudited)

Certain tax information regarding the Funds are required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2019. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2019.

The Fund designated the following items with regard to distributions paid during the fiscal year ended October 31, 2019. 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:
Small Cap Value		59.18	%
Qualified Dividend Income:
Small Cap Value		63.16	%
Long-Term Capital Gain Distributions:
Small Cap Value	$	605,430,615
Short-Term Capital Gain Distributions:
Small Cap Value	$	88,241,641

Shareholders will receive notification in January 2020 of the applicable tax information necessary to prepare their 2019 income tax returns.

56

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

Renewal and Approval of Management Agreement and Investment Advisory Agreements

At in-person meetings held on May 9, 2019 and June 4-5, 2019 (collectively, the “Meetings”), the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 5, 2019 meeting, approved the renewal of:

(1) the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon Small Cap Value Fund (“Fund”); and

(2) the Investment Advisory Agreements among the Manager, the Trust, on behalf of the Fund, and each of Barrow, Hanley, Mewhinney & Strauss, LLC (“Barrow”), Brandywine Global Investment Management, LLC (“Brandywine”), Foundry Partners, LLC (“Foundry”), Hillcrest Asset Management LLC (“Hillcrest”), Hotchkis and Wiley Capital Management, LLC (“Hotchkis”), and Mellon Investments Corp. (“Mellon”) (each, a “subadvisor” and collectively, the “subadvisors”).

The Management Agreement and the Investment Advisory Agreements are referred to herein individually as an “Agreement” and collectively as the “Agreements.” In preparation for its consideration of the renewal of the Agreements, the Board undertook steps to gather and consider information furnished by the Manager, the subadvisors, Broadridge, Inc. (“Broadridge”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and the subadvisors.

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Fund as well as information from the Manager and the subadvisors. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Board received and evaluated such information as they deemed necessary. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to the Fund.

The Board noted that the Manager provides management and administrative services to the Fund pursuant to the Management Agreement. The Board considered that many mutual funds have separate contracts governing each type of service and observed that, with respect to such mutual funds, the actual management fee rates provided by Broadridge for peer group funds reflect the combined advisory and administrative expenses, reduced by any fee waivers and/or reimbursements.

A firm 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 the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations. 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 was the Institutional Class. The Board also considered that the use of Institutional Class performance generally facilitates a meaningful comparison for expense and performance purposes.

Provided below is an overview of certain factors the Board considered in connection with its renewal and approval of the 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 investment advisory contracts, such as the Agreements. The memorandum explained the regulatory requirements surrounding the Board’s process for evaluating investment advisors and the terms of investment advisory contracts. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the renewal and approval of each Agreement was in the best interests of the Fund and its shareholders.

57

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

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

In determining whether to renew the Agreements, the Board considered the 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 the Fund; (3) the costs incurred by the Manager in rendering services to the Fund and its resulting profits or losses; (4) comparisons of services and fee rates with contracts entered into by the Manager or the subadvisors or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisors from their relationships with the Fund.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: the Fund’s long-term performance; the length of service of key investment personnel at the Manager; the cost structure of the Fund; the Manager’s culture of compliance and support that reduce risks to the Fund; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; and the Manager’s efforts to retain key employees and maintain staffing levels.

With respect to the renewal of the Investment Advisory Agreements, the Board considered the level of staffing and the size of the subadvisors. The Board also considered the adequacy of the resources committed to the Fund by the subadvisors, and whether those resources were commensurate with the needs of the Fund and are sufficient to sustain appropriate levels of performance and compliance needs. In this regard, the Board considered the financial stability of the subadvisors. The Board also considered each subadvisor’s representations regarding its compliance program and code 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 the subadvisors were appropriate for the Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of the Fund relative to its Broadridge performance universe, Morningstar Category, and benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding Broadridge’s independent methodology for selecting the Fund’s Broadridge performance universe. The Board also considered that the performance universes selected by Broadridge may not provide appropriate comparisons for the Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by each subadvisor regarding the performance of its portion of the Fund relative to the performance of similar accounts or a composite of similar accounts managed by the subadvisor and the Fund’s benchmark index. In addition, the Board considered the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to the Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to the Fund.”

Costs of the Services Provided to the Fund and the Profits Realized by the Manager from its Relationship with the Fund. In analyzing the cost of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager earning a profit before and after the payment of distribution-related expenses by the Manager for the Fund. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. 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 Fund, the Manager represented that,

58

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility and regulatory requirements associated with managing the Fund.

The Board further considered that, with respect to the Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager. In addition, the Board considered that the Manager receives fees for overseeing the securities lending program on behalf of the Fund. The Board also noted that certain share classes of the Fund maintain higher expense ratios in order to compensate third-party financial intermediaries.

In analyzing the fee rates charged by each subadvisor in connection with its investment advisory services to the Fund, the Board considered representations made by each subadvisor that the fee rate negotiated by the Manager is favorable relative to the fee rates that the subadvisor charges for any comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board considered that it was advised that the subadvisors may not account for their profits on an account-by-account basis and that different firms 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 the Fund’s fee rates is set forth below under “Additional Considerations and Conclusions with Respect to the 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 Fund grows and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that, with respect to each subadvisor, the Manager has negotiated breakpoints in the subadvisory fee rate for the Fund. In addition, the Board noted the Manager’s representation that the Management Agreement contains fee schedule breakpoints at higher asset levels with respect to the Fund. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for the Fund provide for a reasonable sharing of benefits from any economies of scale with the Fund.

Benefits Derived from the Relationship with the Fund. 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 Fund, including greater exposure in the marketplace with respect to the Manager’s or a subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors. The Board also considered that the Manager may invest the Fund’s cash balances and cash collateral provided by the borrowers of the Fund’s securities in the American Beacon U.S. Government Money Market Select Fund, which the Manager manages directly. In addition, the Board noted that Barrow, Brandywine, Foundry, Hotchkis and Mellon benefit from soft dollar arrangements for proprietary and/or third-party research. 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 Fund appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to the Fund

The performance comparisons below were made in comparison to the Fund’s Broadridge performance universe and Morningstar Category. With respect to the Broadridge performance universe, the 1^st Quintile represents the top 20 percent of the universe based on performance and the 5^th Quintile representing the bottom 20 percent of the universe based on performance. References below to the Fund’s Broadridge performance universe are to the universe of mutual funds with a comparable investment classification/objective included in the analysis provided by Broadridge. In reviewing the performance, the Trustees viewed longer-term performance over

59

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

a full market cycle as the most important consideration, because relative performance over shorter periods may be significantly impacted by market or economic events and not necessarily reflective of manager skill.

The expense comparisons below were made in comparison to the Fund’s Broadridge expense universe and Broadridge expense group, with the 1^st Quintile representing the lowest 20 percent of the universe or group based on lowest total expense and the 5^th Quintile representing the highest 20 percent of the universe or group based on highest total expense. References below to the Fund’s expense group and expense universe are to the respective group or universe of comparable mutual funds included in the analysis by Broadridge. A Broadridge expense group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge expense universe includes all funds in the investment classification/objective with a similar operating structure as the share class of the Fund included in the Broadridge comparative information and provides a broader view of expenses across the Fund’s investment classification/objective. The Board also considered the Fund’s Morningstar fee level category. In reviewing expenses, the Board considered the positive impact of fee waivers where applicable and the Manager’s agreement to continue the fee waivers. In addition, information regarding the subadvisors’ use of soft dollars was requested from the Manager and was considered by the Board.

In considering the renewal of the Management Agreement for the Fund, the Board considered the following additional factors:

Broadridge Total Expense Analysis Excluding 12b-1 Fees and Morningstar Fee Level Ranking

Compared to Broadridge Expense Group	2nd Quintile
Compared to Broadridge Expense Universe	1st Quintile
Morningstar Fee Level Ranking – Institutional Class	Low Expense Ratio

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2018)

Compared to Broadridge Performance Universe	2nd Quintile
Compared to Morningstar Category	2nd Quintile

In considering the renewal of the Investment Advisory Agreements with each subadvisor, the Board considered that the diversification of investment strategies facilitated by the Fund’s multi-manager structure permits the Fund to mitigate the risks associated with a single subadvisor. The Board also considered the following additional factors:

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2018)

Barrow (Fundamental Strategy)	5 Years	2	nd Quintile
Barrow (Diversified Strategy)*	3 Years	2	nd Quintile
Brandywine	5 Years	3	rd Quintile
Foundry	5 Years	1	st Quintile
Hillcrest*	3 Years	5	th Quintile
Hotchkis (Fundamental Strategy)	5 Years	1	st Quintile
Hotchkis (Diversified Strategy)*	1 Year	2	nd Quintile
Mellon	5 Years	1	st Quintile
*  Does not yet have a 5-year performance record.

The Board also considered: (1) that the three-year period was not long enough to fully evaluate the performance of Hillcrest, and the Manager was closely monitoring this performance; (2) that Hillcrest’s investment style, which favors low valuation companies (as measured by price-to-earnings and price-to-book) and sound financial health (as measured by expected earnings-per-share growth and return on equity), has not been rewarded in recent market conditions; (3) information provided by each subadvisor regarding fee rates charged for managing

60

Disclosure Regarding Approval of the Management and Investment Advisory Agreements (Unaudited)

assets in the same or a similar strategy as the subadvisor manages its allocation of the Fund; and (4) the Manager’s recommendation to continue to retain each subadvisor at the present time.

Based on these and other considerations, the Board: (1) concluded that the fees paid to the Manager and the subadvisors under the Management and Investment Advisory Agreements are fair and reasonable; and (2) determined that the Fund and its shareholders would benefit from the Manager’s and subadvisors’ continued management of the Fund.

61

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. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty-six funds in the fund complex that includes the Trust, the American Beacon Select Funds, the American Beacon Institutional Funds Trust, the American Beacon Sound Point Enhanced Income Fund, American Beacon Apollo Total Return Fund and the American Beacon Sound Point Alternative Lending Fund. 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	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*
Alan D. Feld** (82)	Trustee since 1996	Partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP (law firm) (1960-Present); Trustee, American Beacon Select Funds (1999-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (49)	Trustee since 2015	Director, Kura MD, Inc. (local telehealth organization) (2015-present); Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Vice President & CFO, Sierra Health Foundation: Center for Health Program Management (California public benefit corporation) (2012-Present); Director, Innovative North State (2012-2015); Director, Sacramento Regional Technology Alliance (2011-2016); Director, Women’s Empowerment (2009-2014); Director, Valley Healthcare Staffing (2017-present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Joseph B. Armes (57)	Trustee since 2015	Chairman & CEO, CSW Industrials f/k/a Capital Southwest Corporation (investment company) (2015-Present); Chairman of the Board of Capital Southwest Corporation, predecessor to CSW Industrials, Inc. (2014-2017) (investment company); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-Present); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Gerard J. Arpey (61)	Trustee since 2012	Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

62

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (58)	Trustee since 2004 Chair since 2019 Vice Chair 2018	Chief Financial Officer, Treasurer and Secretary, Kimbell Art Foundation (1993-Present); Director, Tyler Technologies, Inc. (public sector software solutions company) (2014-Present); Director, Range Resources Corporation (oil and natural gas company) (2015-Present); Trustee, Cushing Closed-End and Open-End Funds and ETFs (2017-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Eugene J. Duffy (65)	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-Present); Principal and Executive Vice President, Paradigm Asset Management (1994-2014); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Claudia A. Holz (62)	Trustee since 2018	Partner, KPMG LLP (1990-2017); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Douglas A. Lindgren (57)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Managing Director, IPS Investment Management and Global Head, Content Management, UBS Wealth Management (2010-2016); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Richard A. Massman (76)	Trustee since 2004 Chair 2008-2018 Chair Emeritus since 2019	Consultant and General Counsel Emeritus, Hunt Consolidated, Inc. (holding company engaged in oil and gas exploration and production, refining, real estate, farming, ranching and venture capital activities) (2009-Present); Trustee, American Beacon Select Funds (2004-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Barbara J. McKenna, CFA (56)	Trustee since 2012	President/Managing Principal, Longfellow Investment Management Company (2005-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).

63

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
R. Gerald Turner (73)	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 Select Funds (2001-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-Present); Trustee, American Beacon Sound Point Alternative Lending Fund (2019-Present).
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (64)	President since 2009	President (2009-2018), CEO and Director (2009-Present), and Chairman (2018-Present), American Beacon Advisors, Inc., President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present), Resolute Investment Holdings, LLC; President (2015-2018), Director and CEO (2015-Present), and Chairman (2018-Present), Resolute Topco, Inc.; President (2015-2018); Director, and CEO (2015-Present), and Chairman (2018-Present), Resolute Acquisition, Inc.; President (2015-2018), Director and CEO (2015-Present), Chairman (2018-Present), Resolute Investment Managers, Inc.; Director, Chairman, President and CEO, Resolute Investment Distributors (2017-Present); Director, Chairman, President and CEO; Resolute Investment Services, Inc. (2017-Present); President and CEO, Lighthouse Holdings Parent, Inc. (2009-2015); President, CEO and Director, Lighthouse Holdings, Inc. (2009-2015); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-Present); Director, ARK Investment Management LLC (2016-Present); Director, Shapiro Capital Management LLC (2017-Present); Director, Chairman and CEO, Continuous Capital, LLC (2018-Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director and President, American Beacon Cayman Transformational Innovation Company, LTD., (2017-2018); President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); President American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-Present); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-Present); President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present); President, American Beacon Sound Point Alternative Lending Fund (2019-Present); Director, Green Harvest Asset Management (2019-Present).

64

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Rosemary K. Behan (60)	VP, Secretary and Chief Legal Officer since 2006	Vice President, Secretary and General Counsel, American Beacon Advisors, Inc. (2006-Present); Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015-Present); Vice President, Secretary and General Counsel, Resolute Investment Managers, Inc. (2015-Present); Secretary, Resolute Investment Distributors, Inc. (2017-Present); Vice President, Secretary and General Counsel, Resolute Investment Services, Inc. (2017-Present); Vice President and Secretary, Lighthouse Holdings Parent, Inc. (2008-2015); Vice President and Secretary, Lighthouse Holdings, Inc. (2008-2015); Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-Present); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Secretary, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-2018); Secretary, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Secretary, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Select Funds (2006-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-Present); Chief Legal Officer, Vice President and Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Secretary, Green Harvest Asset Management (2019-Present).
Brian E. Brett (59)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), Vice President, Director of Sales (2004-2012), American Beacon Advisors, Inc.; Senior Vice President, Resolute Investment Managers, Inc. (2017-Present); Senior Vice President, Resolute Investment Distributors, Inc. (2018-Present), Senior Vice President, Resolute Investment Services, Inc. (2018-Present); Senior Vice President, Lighthouse Holdings Parent, Inc. (2008-2015); Senior Vice President, Lighthouse Holdings, Inc. (2008-2015); Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Paul B. Cavazos (50)	VP since 2016	Chief Investment Officer and Senior Vice President, American Beacon Advisors, Inc. (2016-Present); Chief Investment Officer, DTE Energy (2007-2016); Vice President, American Private Equity Management, L.L.C. (2017-Present); Vice President, American Beacon Select Funds (2016-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Erica Duncan (49)	VP Since 2011	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers (2018-Present); Vice President, Resolute Investment Services, Inc. (2018-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

65

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Melinda G. Heika (58)	Treasurer since 2010	Treasurer and CFO (2010-Present), American Beacon Advisors, Inc.; Treasurer, Resolute Topco, Inc. (2015-Present); Treasurer, Resolute Investment Holdings, LLC. (2015-Present); Treasurer, Resolute Acquisition, Inc. (2015-Present); Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017-2017); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, Lighthouse Holdings Parent Inc., (2010-2015); Treasurer, Lighthouse Holdings, Inc. (2010-2015); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-Present); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Treasurer, American Beacon Select Funds (2010-Present); Treasurer, American Beacon Institutional Funds Trust (2017-Present); Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present); Treasurer, Green Harvest Asset Management (2019-Present).
Terri L. McKinney (55)	VP since 2010	Vice President (2009-Present), Managing Director (2003-2009), American Beacon Advisors, Inc.; Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services, Inc (2018-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Vice President, American Beacon Select Funds (2010-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).

66

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Jeffrey K. Ringdahl (44)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), Vice President (2010-2013), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice Present (2015-2018), Resolute Investment Holdings, LLC; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Topco, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Acquisition, Inc.; Director (2015-Present), President & COO (2018-Present), Senior Vice President (2015-2018), Resolute Investment Managers, Inc.; Director and Executive Vice President (2017-Present), Resolute Investment Distributors, Inc.; Director (2017-Present), President & COO (2018-Present), Executive Vice President (2017-2018), Resolute Investment Services, Inc.; Senior Vice President (2017-Present), Vice President (2012-2017), Manager (2015-Present), American Private Equity Management, LLC; Senior Vice President, Lighthouse Holdings Parent, Inc. (2013-2015); Senior Vice President, Lighthouse Holdings, Inc. (2013-2015); Trustee, American Beacon NextShares Trust (2015-Present); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-Present); Director, Shapiro Capital Management, LLC (2017-Present); Director, Executive Vice President & COO, Continuous Capital, LLC (2018-Present); Director and Vice President, American Beacon Cayman Transformational Innovation Company, Ltd., (2017-Present); Vice President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Vice President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Vice President, American Beacon Cayman TargetRisk Company, Ltd (2018-Present); Vice President, American Beacon Select Funds (2010-2018); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present), Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Samuel J. Silver (56)	VP Since 2011	Vice President (2011-Present), Chief Fixed Income Officer (2016-Present), American Beacon Advisors, Inc. (2011-Present); Vice President, American Beacon Select Funds (2011-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President, American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President, American Beacon Apollo Total Return Fund (2018-Present); Vice President, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Christina E. Sears (48)	Chief Compliance Officer since 2004 and Asst. Secretary since 1999	Vice President, American Beacon Advisors, Inc. (2019-Present); Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Distributors (2017-Present); Vice President, Resolute Investment Services, Inc. (2019-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Chief Compliance Officer (2004-Present) and Assistant Secretary (1999-Present), American Beacon Select Funds; Chief Compliance Officer and Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Chief Compliance Officer and Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).

67

Trustees and Officers of the American Beacon Funds^SM (Unaudited)

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Sonia L. Bates (62)	Asst. Treasurer since 2011	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); Assistant Treasurer, Lighthouse Holdings Parent Inc. (2011-2015); Assistant Treasurer, Lighthouse Holdings, Inc. (2011-2015); Assistant Treasurer, American Private Equity Management, LLC (2012-Present); Assistant Treasurer, American Beacon Cayman Transformational Innovation Company, Ltd. (2017-Present); Assistant Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Treasurer, American Beacon Apollo Total Return Fund (2018-Present); Assistant Treasurer, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Shelley D. Abrahams (44)	Assistant Secretary since 2008	Assistant Secretary, American Beacon Select Funds (2008-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).
Rebecca L. Harris (52)	Assistant Secretary since 2010	Vice President, American Beacon Advisors, Inc. (2011-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Services (2015-Present); Vice President, Alpha Quant Advisors, LLC (2016-Present); Vice President, Continuous Capital, LLC (2018-Present); Assistant Secretary, American Beacon Select Funds (2010-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present).
Teresa A. Oxford (61)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-Present); Assistant Secretary, American Beacon Select Funds (2015-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2017-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-Present); Assistant Secretary, American Beacon Sound Point Alternative Lending Fund (2019-Present); Assistant Secretary, Green Harvest Asset Management (2019-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees, other than Messrs. Feld and Massman to retire no later than the last day of the calendar year in which they reach the age of 75. As of 11/7/17, the Board approved a waiver of the mandatory retirement policy with respect to Mr. Massman, who turned 75 in November 2018, to permit him to continue to serve on the Board as Chair Emeritus through 12/31/19.

** Mr. Feld is deemed to be an “interested person” of the Trusts, 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 fiscal years to one or more of the Trust’s sub-advisors.

68

American Beacon Funds^SM

Privacy Policy

October 31, 2019 (Unaudited)

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.

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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:	On the Internet:
american_beacon.funds@ambeacon.com	Visit our website at www.americanbeaconfunds.com
By Telephone: Call (800) 658-5811	By Mail: American Beacon Funds P.O. Box 219643 Kansas City, MO 64121-9643
Availability of Quarterly Portfolio Schedules	Availability of Proxy Voting Policy and Records
In addition to the Schedule of Investments provided in each semi-annual and annual report, the Fund files a complete schedule of its portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-PORT as of the first and third fiscal quarters. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN State Street Bank and Trust Company Boston, Massachusetts TRANSFER AGENT DST Asset Manager Solutions, Inc. Quincy, Massachusetts INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Dallas, Texas DISTRIBUTOR Resolute Investment Distributors, Inc. Irving, Texas

This report is prepared for shareholders of the American Beacon Funds and may be distributed to others only if preceded or accompanied by a current Prospectus or Summary Prospectus.

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

AR 10/19

ITEM 2. CODE OF ETHICS.

The Trust adopted a code of ethics that applies to its principal executive and financial officers (the “Code”). The Trust amended its code August 19, 2019 to disclose the addition of the American Beacon Sound Point Enhanced Income Fund, American Beacon Apollo Total Return Fund and American Beacon Sound Point Alternative Lending Fund and to disclose a change to limit the value of gifts received by the principal officer or financial officer to $100. The Trust did not grant any waivers to the provisions of the Code during the period covered by the shareholder reports presented in Item 1. 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 Gilbert G. Alvarado and Claudia Holz, members of the Trust’s Audit and Compliance Committee, are “audit committee financial experts” as defined in Form N-CSR. Mr. Gilbert Alvarado and Ms. Claudia Holz are “independent” as defined in Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) Audit Fees	Fiscal Year Ended
$239,905		10/31/2018
$291,427		10/31/2019
(b) Audit-Related Fees	Fiscal Year Ended
$10,000		10/31/2018
$0		10/31/2019
(c) Tax Fees	Fiscal Year Ended
$25,859		10/31/2018
$43,525		10/31/2019
(d) All Other Fees	Fiscal Year Ended
$0		10/31/2018
$0		10/31/2019

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
$35,859	$	391,405	N/A		10/31/2018
$43,525	$	625,313	N/A		10/31/2019

(h) Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

The schedules of investments for each series of the Trust are included in the shareholder reports presented in Item 1.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The Trust has made no material changes to the procedures by which shareholders may recommend nominees to the Trust’s Board of Trustees since the Trust last disclosed such procedures in Schedule 14A.

ITEM 11. CONTROLS AND PROCEDURES.

(a) Based upon an evaluation within 90 days of the filing date of this report, the principal executive and financial officers concluded that the disclosure controls and procedures of the Trust are effective.

(b) There were no changes in the Trust’s internal control over financial reporting during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Filed herewith as EX-99.CODE ETH.

(a)(2) A separate certification for each principal executive officer and principal financial officer of the Trust as required by Rule 30a-2(a) under the Investment Company Act of 1940 is attached hereto as EX-99.CERT.

(a)(3) Not applicable.

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940 are attached hereto as EX-99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant): American Beacon Funds

By	/s/ Gene L. Needles, Jr.
Gene L. Needles, Jr.
President
American Beacon Funds

Date: January 9, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	/s/ Gene L. Needles, Jr.
Gene L. Needles, Jr.
President
American Beacon Funds

Date: January 9, 2020

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

Date: January 9, 2020

EX-99.CODE ETH

AMERICAN BEACON FUNDS

AMERICAN BEACON SELECT FUNDS

AMERICAN BEACON INSTITUTIONAL FUNDS TRUST

AMERICAN BEACON SOUND POINT ENHANCED INCOME FUND

AMERICAN BEACON APOLLO TOTAL RETURN FUND

AMERICAN BEACON SOUND POINT ALTERNATIVE LENDING FUND

(collectively, the “Trusts”)

Code of Ethics for Principal Executive and Financial Officers

Dated: August 19, 2019

Purpose

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. The Covered Officers may also hold positions or be employed by AmBeacon’s affiliated

companies, some of which may be sub-advisors to the Trusts. 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, its affiliates 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 $100;

• 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 or its affiliates, 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, except for directorships or other positions with AmBeacon and its affiliates, which are already known by the CLO;

• 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 CLO 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

3

personnel of AmBeacon or its board; or a recommendation to dismiss the Covered Officer;

• the Independent Trustees will be responsible for granting waivers, as appropriate; and

• any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

Other Policies and Procedures

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

Amendments

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

Confidentiality

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

Internal Use

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

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/Principal Accounting Officer	Melinda G. Heika

EX-99.CERT

For period ended 10/31/2019

Registrant Name: American Beacon Funds

File Number: 811-4984

EXHIBIT 99.CERT

I, Melinda G. Heika, certify that:

1. I have reviewed this report on Form N-CSR of American Beacon Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 9, 2020	/s/ Melinda G. Heika
	Melinda G. Heika
	Treasurer
	American Beacon Funds

I, Gene L. Needles, Jr., certify that:

1. I have reviewed this report on Form N-CSR of American Beacon Funds;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 9, 2020	/s/ Gene L. Needles, Jr.
	Gene L. Needles, Jr.
	President
	American Beacon Funds

EX-99.906CERT

For period ended 10/31/2019

Registrant Name: American Beacon Funds

File Number: 811-4984

EXHIBIT 99.906CERT

Gene L. Needles, Jr. and Melinda G. Heika, respectively, the President and Treasurer of the American Beacon Funds (the “Registrant”), each certify to the best of his or her knowledge and belief that:

1. the Registrant’s report on Form N-CSR for the period ended October 31, 2019 (the “Form N-CSR”) fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Gene L. Needles, Jr.	/s/ Melinda G. Heika
Gene L. Needles, Jr.	Melinda G. Heika
President	Treasurer
American Beacon Funds	American Beacon Funds

Date: January 9, 2020

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.