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: January 31, 2020

Date of reporting period: January 31, 2020

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, Inc. 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.

ACADIAN EMERGING MARKETS MANAGED VOLATILITY FUND

Investing in foreign and emerging market securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in lower volatility securities may produce more modest gains than other stock funds as a trade-off for the potentially lower downside 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 January 31, 2020

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	6
Report of Independent Registered Public Accounting Firm	8
Schedules of Investments:
American Beacon Acadian Emerging Markets Managed Volatility Fund	9
Financial Statements	17
Notes to Financial Statements	20
Financial Highlights:
American Beacon Acadian Emerging Markets Managed Volatility Fund	42
Federal Tax Information	47
Trustees and Officers of the American Beacon Funds	48
Privacy Policy	54

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   During the 12 months of this reporting period, news reports highlighted multiple disruptive headwinds in the global economy; among them the U.S. trade war with China and its toll on the global economy, Brexit, disruptions in the Middle East and protests in Hong Kong. And although the headlines seemed to be just starting during the period addressed in this report, it’s now undeniable that the global spread of the COVID-19 virus is having an overwhelming effect on the world’s markets, the full impact of which is unknown at this time.   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

Global Equity and Emerging Markets Overview

January 31, 2020 (Unaudited)

Global equity markets closed with a gain for the 12-month period ended January 31, 2020, as evidenced by the MSCI ACWI Index (up 16.0%). In the U.S., the unemployment rate moved slightly up to 3.6%, and gross domestic product growth for 2019 averaged 2.3%. The fiscal year began with global uncertainty stemming from Brexit-related turmoil in the eurozone, as well as the U.S.-China trade war and the effects reverberating from it.

However, as the year went on, markets were emboldened by progress toward a “phase one” trade deal between the U.S. and China, and the uncertainty regarding the eurozone was reduced with a strong electoral win by the Conservative Party and Boris Johnson in the U.K. Investors welcomed the Federal Reserve’s rate cuts and the monetary easing efforts enacted by other central banks. Although these positive trends were well-received, investors maintained a healthy dose of caution given the history of trade rhetoric between U.S. and China, the U.S. entering a presidential election year, and the emergence of a potential pandemic stemming from the newly identified COVID-19 virus.

Emerging Markets delivered positive returns, with the MSCI Emerging Markets Index up 3.8% for the period under review. Following are some country highlights:

• Chinese equities rose 5.8% for the period while awaiting the completion of the phase one trade deal with the U.S., which was officially signed in January 2020. Although Beijing’s stimulus measures took root, pro-democracy protests in Hong Kong remained a dark cloud.

• Brazilian equities closed down 0.8%, despite a positive 2020 forecast for economic and domestic demand recovery.

• Mexican equities ticked up 2.8% on the U.S. House of Representatives’ approval of the United States-Mexico-Canada Agreement, a new trade deal seeking to modernize the 26-year-old North American Free Trade Agreement, and the resulting diminished threat of new auto tariffs.

• Turkish equities posted a 4.5% loss despite the central bank cutting interest rates in an effort to revive the nation’s economy.

Ultimately, Emerging Markets lagged developed markets during the period as investors deliberated over the effect of back and forth U.S.-China trade negotiations, which had an outsized impact on performance.

2

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

The Investor Class of the American Beacon Acadian Emerging Markets Managed Volatility Fund (the “Fund”) returned 0.06% for the 12 months ended January 31, 2020. The Fund underperformed the MSCI Emerging Markets Index (the “Index”) return of 3.81% for the period.

Comparison of Changes in Value of a $10,000 Investment for the period 9/27/2013 through 1/31/2020

Total Returns for the Period ended January 31, 2020
	Ticker	1 Year			3 Years			5 Years			Since Inception (9/27/2013)			Value of $10,000 9/27/2013- 1/31/2020
Institutional Class (1,3)	ACDIX		0.42	%		7.46	%		2.82	%		2.80	%		$	11,914
Y Class (1,3)	ACDYX		0.23	%		7.35	%		2.73	%		2.69	%		$	11,835
Investor Class (1,3)	ACDPX		0.06	%		7.08	%		2.45	%		2.43	%		$	11,643
A without Sales Charge (1,3)	ACDAX		0.03	%		7.06	%		2.41	%		2.38	%		$	11,611
A with Sales Charge (1,3)	ACDAX		(5.73	)%		4.97	%		1.21	%		1.43	%		$	10,944
C without Sales Charge (1,3)	ACDCX		(0.71	)%		6.23	%		1.66	%		1.61	%		$	11,064
C with Sales Charge (1,3)	ACDCX		(1.71	)%		6.23	%		1.66	%		1.61	%		$	11,064
MSCI Emerging Markets Index (2)			3.81	%		7.88	%		4.48	%		3.35	%		$	12,323

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. A Class shares have a maximum sales charge of 5.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

3

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

2. The MSCI Emerging Markets Index is a market capitalization weighted index composed of companies that are representative of the market structure of developing countries in Latin America, Asia, Eastern Europe, the Middle East and Africa. The MSCI^® information contained herein: (1) is provided “as is,” (2) is proprietary to MSCI and/or its content providers, (3) may not be used to create any financial instruments or products or any indexes and (4) may not be copied or distributed without MSCI’s express written consent. MSCI disclaims all warranties with respect to the information. Neither MSCI nor its content providers are responsible for any damages or losses arising from any use of this information. One cannot directly invest in an index.

3. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A and C Class shares were 1.71%, 1.76%, 2.15%, 2.02% and 2.77%, 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 one-year period primarily due to stock selection. Country allocation was moderately positive.

Stock selections in China and Taiwan detracted from relative performance during the period. The primary detractors in China included China Telecom Corp. Ltd., Class H (down 25.5%) and China Unicom Hong Kong Ltd. (down 25.7%). Detractors in Taiwan included Sitronix Technology Corp. (down 12.3%). Stock selections in Brazil such as Grupo SBF S.A. (up 179.1%) provided positive contribution to relative returns.

Relative contribution from country allocation was positive for the 12-month period. Overweighting Egypt (up 31.7%) and Greece (up 28.0%) contributed positively to relative performance. On the other hand, overweighting Chile (down 31.7%) detracted from relative performance during the period.

The Fund’s basic philosophy remains focused on investing in a well-diversified portfolio of low volatility stocks that aims to maximize risk-adjusted returns.

Top Ten Holdings (% Net Assets)
Samsung Electronics Co., Ltd.		3.9
China Telecom Corp. Ltd., Class H		1.4
Foxconn Industrial Internet Co., Ltd., Class A		1.4
Gazprom Neft PJSC, Sponsored ADR		1.4
Hellenic Telecommunications Organization S.A.		1.4
Hindustan Unilever Ltd.		1.4
IRB Brasil Resseguros S/A		1.4
Magyar Telekom Telecommunications PLC		1.4
Oracle Financial Services Software Ltd.		1.4
Taiwan Shin Kong Security Co., Ltd.		1.4
Total Fund Holdings	182
Sector Allocation (% Equities)
Financials		24.0
Information Technology		18.0
Communication Services		17.7
Utilities		10.4
Consumer Staples		9.6
Industrials		6.4
Energy		4.7
Consumer Discretionary		4.6
Materials		2.6
Health Care		1.3
Real Estate		0.7

4

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

Country Allocation (% Equities)
China	28.6
Republic of Korea	12.8
Taiwan	8.6
India	8.3
Brazil	4.3
Russia	4.2
Malaysia	3.8
Thailand	3.8
Mexico	3.6
Philippines	3.5
Egypt	3.1
Chile	2.5
Czech Republic	2.3
South Africa	2.3
Greece	2.1
Hungary	2.0
Poland	1.6
Turkey	0.8
Peru	0.7
Indonesia	0.5
United States	0.5
Hong Kong	0.1

5

American Beacon Funds^SM

Expense Examples

January 31, 2020 (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 August 1, 2019 through January 31, 2020.

Actual Expenses

The “Actual” lines of 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” 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 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 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 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 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 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.

6

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Expense Examples

January 31, 2020 (Unaudited)

American Beacon Acadian Emerging Markets Managed Volatility Fund
	Beginning Account Value 8/1/2019		Ending Account Value 1/31/2020		Expenses Paid During Period 8/1/2019-1/31/2020*
Institutional Class
Actual		$1,000.00		$1,010.90		$6.84
Hypothetical**		$1,000.00		$1,018.40		$6.87
Y Class
Actual		$1,000.00		$1,009.90		$7.35
Hypothetical**		$1,000.00		$1,017.90		$7.38
Investor Class
Actual		$1,000.00		$1,009.30		$8.76
Hypothetical**		$1,000.00		$1,016.48		$8.79
A Class
Actual		$1,000.00		$1,009.00		$8.86
Hypothetical**		$1,000.00		$1,016.38		$8.89
C Class
Actual		$1,000.00		$1,004.50		$12.63
Hypothetical**		$1,000.00		$1,012.60		$12.68

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.35%, 1.45%, 1.73%, 1.75%, and 2.50% for the Institutional, Y, Investor, A, and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

7

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of American Beacon Funds and the Shareholders of American Beacon Acadian Emerging Markets Managed Volatility Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of American Beacon Acadian Emerging Markets Managed Volatility Fund (one of the series constituting American Beacon Funds, referred to hereafter as the “Fund”) as of January 31, 2020, the related statement of operations for the year ended January 31, 2020, the statement of changes in net assets for each of the two years in the period ended January 31, 2020, including the related notes, and the financial highlights for each of the five years in the period ended January 31, 2020 (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 as of January 31, 2020, 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 ended January 31, 2020 and the financial highlights for each of the five years in the period ended January 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Fund as of and for the year ended January 31, 2016 and the financial highlights for each of the periods ended on or prior to January 31, 2016 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated March 31, 2016 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’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 Fund 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 of these financial statements 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.

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 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. Our procedures included confirmation of securities owned as of January 31, 2020 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Dallas, TX

March 30, 2020

We have served as the auditor of one or more investment companies in the American Beacon family of funds since 2016.

8

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
Brazil - 3.76%
Common Stocks - 2.30%
Alupar Investimento S.A.A		3,700		$	25,556
CPFL Energia S.A.		1,000			8,936
Grupo SBF S.A.B		616			5,675
IRB Brasil Resseguros S/A		14,900			155,972
Neoenergia S.A.		5,000			30,040
Telefonica Brasil S.A., ADR		796			11,049
Transmissora Alianca de Energia Eletrica S.A.A		2,400			17,350
Total Common Stocks					254,578
Preferred Stocks - 1.46%
Centrais Eletricas Santa Catarina C		900			11,249
Cia de Transmissao de Energia Eletrica Paulista C		1,200			6,220
Telefonica Brasil S.A. C		10,400			144,225
Total Preferred Stocks					161,694
Total Brazil (Cost $296,034)					416,272
Chile - 2.22%
Common Stocks - 2.22%
Banco de Chile		4,737			466
Blumar S.A.		25,008			8,265
Cia Cervecerias Unidas S.A.		1,442			12,730
Embotelladora Andina S.A., Class B, ADR		2,810			43,583
Empresas COPEC S.A.		442			3,943
Enel Americas SA		60,566			11,934
Enel Chile S.A.		1,495,968			141,877
Inversiones Aguas Metropolitanas S.A.		6,607			6,192
Minera Valparaiso S.A.		54			905
Quinenco S.A.		1,735			2,991
Sigdo Koppers S.A.		10,378			12,838
Total Common Stocks					245,724
Total Chile (Cost $277,464)					245,724
China - 25.39%
Common Stocks - 25.39%
Agricultural Bank of China Ltd., Class HD		384,000			148,071
Bank of China Ltd., Class HD		385,000			148,860
Bank of Communications Co., Ltd., Class HD		216,000			137,680
Beijing Chunlizhengda Medical Instruments Co., Ltd., Class HD		11,636			83,566
Beijing Jingkelong Co., Ltd., Class H		69,000			11,549
Changshouhua Food Co., Ltd.D		19,000			6,549
China CITIC Bank Corp. Ltd., Class HD		33,000			17,180
China Construction Bank Corp., Class HD		189,000			143,372
China Everbright Bank Co., Ltd., Class HD		239,000			95,793
China Minsheng Banking Corp. Ltd., Class HD		209,000			145,797
China Mobile Ltd.D		17,500			143,274
China Petroleum & Chemical Corp., Class HD		216,000			113,972
China Telecom Corp. Ltd., Class HD		388,000			150,663
China Unicom Hong Kong Ltd.D		176,000			146,735
CITIC Ltd.D		126,000			141,465
CNOOC Ltd.D		12,000			18,179
COSCO SHIPPING International Hong Kong Co., Ltd.D		94,000			28,083
Foxconn Industrial Internet Co., Ltd., Class AD		52,900			150,739
Fuguiniao Co., Ltd., Class HB D E		28,000			-
GoerTek, Inc., Class AD		36,100			120,683
Huishang Bank Corp. Ltd., Class HD		99,100			36,491

See accompanying notes

9

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
China - 25.39% (continued)
Common Stocks - 25.39% (continued)
Industrial & Commercial Bank of China Ltd., Class HD		219,000		$	145,736
Lenovo Group Ltd.D		108,000			70,398
Lens Technology Co., Ltd., Class AD		15,500			45,541
Luxshare Precision Industry Co., Ltd., Class AD		3,300			21,216
NVC International Holdings Ltd.D		949,000			28,887
PetroChina Co., Ltd., Class HD		326,000			143,585
Ping An Insurance Group Co. of China Ltd., Class HD		13,000			147,071
Sunac China Holdings Ltd.D		11,000			53,030
Tencent Holdings Ltd.D		2,000			94,966
Universal Scientific Industrial Shanghai Co., Ltd., Class AD		23,745			64,972
Total Common Stocks					2,804,103
Total China (Cost $2,999,362)					2,804,103
Czech Republic - 2.01%
Common Stocks - 2.01%
CEZ A/SD		6,276			137,382
Kofola CeskoSlovensko A/SD		1,018			11,812
Komercni banka A/SD		836			28,723
Philip Morris CR A/SD		65			43,989
Total Common Stocks					221,906
Total Czech Republic (Cost $191,900)					221,906
Egypt - 2.79%
Common Stocks - 2.79%
Commercial International Bank Egypt SAED		17,672			95,183
Credit Agricole Egypt SAED		9,625			26,797
Faisal Islamic Bank of EgyptD		46,254			42,408
MM Group for Industry & International Trade SAEB D		90			54
Telecom Egypt Co.D		184,372			143,997
Total Common Stocks					308,439
Total Egypt (Cost $251,475)					308,439
Greece - 1.85%
Common Stocks - 1.85%
Aegean Airlines S.A.D		2,427			22,469
European Reliance General Insurance Co. S.A.D		3,556			19,530
Hellenic Telecommunications Organization S.A.D		10,293			153,848
Thessaloniki Water Supply & Sewage Co. S.A.D		1,610			8,267
Total Common Stocks					204,114
Total Greece (Cost $145,554)					204,114
Hong Kong - 0.12% (Cost $20,109)
Common Stocks - 0.12%
Goldlion Holdings Ltd.D		46,000			12,741
Hungary - 1.79%
Common Stocks - 1.79%
Magyar Telekom Telecommunications PLCD		105,940			158,033
MOL Hungarian Oil & Gas PLCD		2,320			19,616
OTP Bank NyrtD		282			13,075
Richter Gedeon NyrtD		231			4,956
Zwack Unicum RtD		33			1,914
Total Common Stocks					197,594
Total Hungary (Cost $189,304)					197,594

See accompanying notes

10

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
India - 7.40%
Common Stocks - 7.40%
Accelya Solutions India Ltd.B D		828		$	12,168
Dabur India Ltd.D		3,593			24,998
GlaxoSmithKline Pharmaceuticals Ltd.D		1,581			36,783
Gujarat Industries Power Co., Ltd.D		7,676			8,660
Hinduja Global Solutions Ltd.D		805			7,555
Hindustan Unilever Ltd.D		5,387			153,707
Infosys Ltd.D		6,332			69,045
Infosys Ltd., Sponsored ADR		7,875			86,310
ION Exchange India Ltd.D		2,845			37,682
Oracle Financial Services Software Ltd.B D		3,733			152,776
Procter & Gamble Hygiene & Health Care Ltd.D		426			65,972
SJVN Ltd.D		34,607			12,319
Wipro Ltd.D		44,149			146,335
Wipro Ltd., ADR		810			2,940
Total Common Stocks					817,250
Total India (Cost $701,331)					817,250
Indonesia - 0.42%
Common Stocks - 0.42%
Astra Graphia Tbk PTD		167,100			11,541
Multipolar Technology Tbk PTD		558,900			14,065
Telekomunikasi Indonesia Persero Tbk PTD		75,300			20,855
Total Common Stocks					46,461
Total Indonesia (Cost $95,880)					46,461
Malaysia - 3.38%
Common Stocks - 3.38%
Batu Kawan BhdD		1,500			5,958
Kuala Lumpur Kepong BhdD		350			1,946
Malayan Banking BhdD		10,000			20,514
MISC BhdD		25,600			47,609
Public Bank BhdD		32,400			146,572
Tenaga Nasional BhdD		49,528			150,218
Total Common Stocks					372,817
Total Malaysia (Cost $378,749)					372,817
Mexico - 3.17%
Common Stocks - 3.17%
Coca-Cola Femsa S.A.B. de C.V.A		23,821			145,544
Coca-Cola Femsa S.A.B. de C.V., Sponsored ADR		117			7,131
Grupo Industrial Saltillo S.A.B. de C.V.		1,900			2,313
Industrias Bachoco S.A.B. de C.V., Series B		17,308			69,450
Invex Controladora S.A.B. de C.V., Class A		1,177			4,411
Wal-Mart de Mexico S.A.B. de C.V.		41,394			121,123
Total Common Stocks					349,972
Total Mexico (Cost $359,278)					349,972
Peru - 0.63%
Common Stocks - 0.63%
Corp. Aceros Arequipa S.A.		90,277			24,262
Enel Generacion Peru S.A.A.		380			267
Engie Energia Peru S.A.		2,663			6,134
Intercorp Financial Services, Inc.		617			26,007

See accompanying notes

11

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
Peru - 0.63% (continued)
Common Stocks - 0.63% (continued)
Luz del Sur S.A.A.		1,768		$	12,532
Total Common Stocks					69,202
Total Peru (Cost $61,491)					69,202
Philippines - 3.07%
Common Stocks - 3.07%
Asia United Bank Corp.D		19,880			20,391
China Banking Corp.D		51,412			25,323
Cosco Capital, Inc.D		261,300			31,238
Eagle Cement Corp.D		101,800			25,311
Globe Telecom, Inc.D		345			12,791
Manila Electric Co.D		24,380			123,075
Philippine National BankB D		18,855			11,761
Pilipinas Shell Petroleum Corp.D		5,480			3,225
RFM Corp.D		132,000			12,990
San Miguel Corp.D		12,387			33,833
Top Frontier Investment Holdings, Inc.B D		3,950			14,603
Union Bank of the PhilippinesD		19,531			24,389
Total Common Stocks					338,930
Total Philippines (Cost $394,612)					338,930
Poland - 1.39%
Common Stocks - 1.39%
Dom Development S.A.D		576			14,128
Netia S.A.B D		10,180			11,971
Stalexport Autostrady S.A.D		32,382			24,732
TEN Square Games S.A.D		1,674			99,719
Zespol Elektrocieplowni Wroclawskich Kogeneracja S.A.B D		373			3,330
Total Common Stocks					153,880
Total Poland (Cost $139,101)					153,880
Republic of Korea - 11.31%
Common Stocks - 11.31%
Busan City Gas Co., Ltd.D		989			28,665
BYC Co., Ltd.D		44			8,238
Daesung Energy Co., Ltd.D		8,294			34,975
ESTec Corp.D		1,734			15,705
Fursys, Inc.D		862			20,686
Incheon City Gas Co., Ltd.D		1,386			32,159
Jinro Distillers Co., Ltd.D		966			24,573
JLS Co., Ltd.D		9,573			59,946
Kia Motors Corp.D		3,648			124,243
KT Corp.B D		7,015			148,899
RedcapTour Co., Ltd.D		176			2,187
Samsung Electronics Co., Ltd.D		9,093			425,545
Samwonsteel Co., Ltd.D		3,736			8,987
Samyang Tongsang Co., Ltd.D		602			30,911
SK Hynix, Inc.D		461			35,755
SK Telecom Co., Ltd.D		772			148,497
Yesco Holdings Co., Ltd.D		2,505			76,269
Youngone Holdings Co., Ltd.D		671			23,203
Total Common Stocks					1,249,443
Total Republic of Korea (Cost $1,252,264)					1,249,443

See accompanying notes

12

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
Russia - 3.77%
Common Stocks - 3.77%
Gazprom Neft PJSC, Sponsored ADRD		4,321		$	150,267
MMC Norilsk Nickel PJSC, ADRD		3,784			121,955
Rostelecom PJSC, Sponsored ADRD		17,496			140,469
Severstal PJSC, GDRD		244			3,429
Total Common Stocks					416,120
Total Russia (Cost $259,226)					416,120
South Africa - 2.07%
Common Stocks - 1.71%
Anglo American Platinum Ltd.D		587			46,973
Combined Motor Holdings Ltd.D		9,782			13,646
Motus Holdings Ltd.D		23,788			128,111
Total Common Stocks					188,730
Preferred Stocks - 0.36%
Absa Bank Ltd. C D		814			40,087
Total South Africa (Cost $266,073)					228,817
Taiwan - 7.64%
Common Stocks - 7.64%
104 Corp.D		3,000			14,991
Dafeng TV Ltd.D		3,000			4,017
E-LIFE MALL Corp.D		834			1,870
Great Taipei Gas Co., Ltd.D		49,000			50,985
Hey Song Corp.D		9,000			9,804
Hon Hai Precision Industry Co., Ltd.D		51,000			138,506
Hua Nan Financial Holdings Co., Ltd.D		209,440			149,438
Kedge Construction Co., Ltd.D		13,000			16,472
Lian HWA Food Corp.D		3,363			4,560
Nanya Technology Corp.D		5,000			12,641
Sinon Corp.D		12,000			7,556
Sitronix Technology Corp.D		21,000			106,039
Taichung Commercial Bank Co., Ltd.D		183,327			73,631
Taiwan Semiconductor Manufacturing Co., Ltd.D		5,000			53,489
Taiwan Shin Kong Security Co., Ltd.D		125,170			153,465
Ttet Union Corp.D		4,000			16,153
Ve Wong Corp.D		34,000			30,030
Total Common Stocks					843,647
Total Taiwan (Cost $759,558)					843,647
Thailand - 3.37%
Common Stocks - 3.37%
Advanced Information Technology PCL, Class F		46,100			25,734
Amata B.Grimm Power Plant Infrasture FundA		135,700			20,724
Bangkok Bank PCLD		15,400			70,928
Bangkok Insurance PCL, NVDRD		1,200			11,085
Kang Yong Electric PCL, NVDRD		100			836
Krung Thai Bank PCL, NVDRD		289,600			149,112
Prime Office Leasehold Property FundA D		52,200			21,564
PTT PCL, NVDRD		7,000			9,678
Siam Cement PCL, NVDRD		300			3,421
SPCG PCL, NVDRD		70,400			45,038
Thai Stanley Electric PCL, NVDRD		1,100			5,793
Thai Vegetable Oil PCL, NVDRD		1,000			938

See accompanying notes

13

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
Thailand - 3.37% (continued)
Common Stocks - 3.37% (continued)
TTW PCL, NVDRD		17,500		$	7,801
Total Common Stocks					372,652
Total Thailand (Cost $415,461)					372,652
Turkey - 0.68%
Common Stocks - 0.68%
Anadolu Anonim Turk Sigorta SirketiD		38,245			31,466
KOC Holding A/SD		12,206			39,449
Nuh Cimento Sanayi A/SD		2,088			4,072
Total Common Stocks					74,987
Total Turkey (Cost $70,320)					74,987
United States - 0.47% (Cost $54,363)
Common Stocks - 0.47%
JBS S.A.		8,119			52,286
SHORT-TERM INVESTMENTS - 2.63% (Cost $290,781)
Investment Companies - 2.63%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.47% F G		290,781			290,781
TOTAL INVESTMENTS - 91.33% (Cost $9,869,690)					10,088,138
OTHER ASSETS, NET OF LIABILITIES - 8.67%					957,088
TOTAL NET ASSETS - 100.00%				$	11,045,226
Percentages are stated as a percent of net assets.

^A Unit - Usually consists of one common stock and/or rights and warrants.

^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 $8,516,644 or 77.11% of net assets.

^E Value was determined using significant unobservable inputs.

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

^G 7-day yield.

ADR - American Depositary Receipt.

GDR - Global Depositary Receipt.

NVDR - Non-Voting Depositary Receipt.

PCL - Public Company Limited (Thailand).

PJSC - Private Joint Stock Company.

PLC - Public Limited Company.

Long Futures Contracts Open on January 31, 2020:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
Mini MSCI Emerging Markets Index Futures	5	March 2020	$	266,686	$	262,525	$	(4,161	)
			$	266,686	$	262,525	$	(4,161	)

See accompanying notes

14

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2020

Glossary:
Index Abbreviations:
MSCI	Morgan Stanley Capital International.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2020, the investments were classified as described below:

Acadian Emerging Markets Managed Volatility Fund	Level 1			Level 2		Level 3			Total
Assets
Foreign Common Stocks
Brazil	$	254,578		$	-	$	-		$	254,578
Chile		245,724			-		-			245,724
China		11,549			2,792,554		0	(1)		2,804,103
Czech Republic		-			221,906		-			221,906
Egypt		-			308,439		-			308,439
Greece		-			204,114		-			204,114
Hong Kong		-			12,741		-			12,741
Hungary		-			197,594		-			197,594
India		89,250			728,000		-			817,250
Indonesia		-			46,461		-			46,461
Malaysia		-			372,817		-			372,817
Mexico		349,972			-		-			349,972
Peru		69,202			-		-			69,202
Philippines		-			338,930		-			338,930
Poland		-			153,880		-			153,880
Republic of Korea		-			1,249,443		-			1,249,443
Russia		-			416,120		-			416,120
South Africa		-			188,730		-			188,730
Taiwan		-			843,647		-			843,647
Thailand		20,724			351,928		-			372,652
Turkey		-			74,987		-			74,987
Foreign Preferred Stocks
Brazil		161,694			-		-			161,694
South Africa		-			40,087		-			40,087
Common Stocks
United States		52,286			-		-			52,286
Short-Term Investments		290,781			-		-			290,781
Total Investments in Securities - Assets	$	1,545,760		$	8,542,378	$	-		$	10,088,138
Financial Derivative Instruments - Liabilities
Futures Contracts	$	(4,161	)	$	-	$	-		$	(4,161	)
Total Financial Derivative Instruments - Liabilities	$	(4,161	)	$	-	$	-		$	(4,161	)

⁽¹⁾ Includes investments 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 January 31, 2020, there were no transfers into or out of Level 3.

See accompanying notes

15

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Schedule of Investments

January 31, 2020

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 1/31/2019	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 1/31/2020			Unrealized Appreciation (Depreciation) at Period end**
Foreign Common Stocks	$        0(1)	$        -	$	-	$	-	$	-	$	-	$	-	$	-	$	0	(1)	$	(13,361	)

** 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⁾  Includes investments held in the Fund’s portfolio with $0 fair value.

The foreign common stock classified as Level 3 was fair valued at a nominal value of 0.00 Hong Kong Dollar (HKD) due to lack of unobservable inputs. The company is in bankruptcy proceedings, therefore the valuation of the common stock has remained priced at 0.00 HKD, written down from 0.10 HKD. There was no impact to the Fund’s NAV.

See accompanying notes

16

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Statement of Assets and Liabilities

January 31, 2020

Assets:
Investments in unaffiliated securities, at fair value†	$	9,797,357
Investments in affiliated securities, at fair value‡		290,781
Foreign currency, at fair value^		147,488
Dividends and interest receivable		23,443
Deposits with broker for futures contracts		1,516
Cash collateral at broker		10,000
Receivable for investments sold		100,536
Receivable for fund shares sold		780,652
Receivable for expense reimbursement (Note 2)		21,045
Prepaid expenses		30,101
Total assets		11,202,919
Liabilities:
Payable for fund shares redeemed		19,641
Payable for variation margin on open futures contacts (Note 5)		4,101
Management and sub-advisory fees payable (Note 2)		13,546
Service fees payable (Note 2)		961
Transfer agent fees payable (Note 2)		1,279
Custody and fund accounting fees payable		16,351
Professional fees payable		98,595
Trustee fees payable (Note 2)		62
Payable for prospectus and shareholder reports		2,725
Other liabilities		432
Total liabilities		157,693
Net assets	$	11,045,226
Analysis of net assets:
Paid-in-capital	$	10,026,553
Total distributable earnings (deficits)A		1,018,673
Net assets	$	11,045,226
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		424,625
Y Class		664,554
Investor Class		286,261
A Class		37,214
C Class		14,380
Net assets:
Institutional Class	$	3,318,116
Y Class	$	5,148,222
Investor Class	$	2,181,698
A Class	$	285,259
C Class	$	111,931
Net asset value, offering and redemption price per share:
Institutional Class	$	7.81
Y Class	$	7.75
Investor Class	$	7.62
A Class	$	7.67
A Class (offering price)	$	8.14
C Class	$	7.78
† Cost of investments in unaffiliated securities	$	9,578,909
‡ Cost of investments in affiliated securities	$	290,781
^ Cost of foreign currency	$	147,576
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

17

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Statement of Operations

For the year ended January 31, 2020

Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	914,098	A
Dividend income from affiliated securities (Note 8)		5,576
Interest income		291
Income derived from securities lending (Note 9)		92
Total investment income		920,057
Expenses:
Management and sub-advisory fees (Note 2)		226,923
Transfer agent fees:
Institutional Class (Note 2)		2,789
Y Class (Note 2)		16,625
Investor Class		1,689
A Class		76
C Class		60
Custody and fund accounting fees		103,253
Professional fees		96,183
Registration fees and expenses		68,262
Service fees (Note 2):
Investor Class		7,979
A Class		205
C Class		256
Distribution fees (Note 2):
A Class		917
C Class		1,652
Prospectus and shareholder report expenses		17,034
Trustee fees (Note 2)		1,709
Other expenses		10,256
Total expenses		555,868
Net fees waived and expenses (reimbursed) (Note 2)		(210,287	)
Net expenses		345,581
Net investment income		574,476
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesB‡		3,702,759
Commission recapture (Note 1)		175
Foreign currency transactions		(46,986	)
Futures contracts		(25,408	)
Change in net unrealized appreciation (depreciation) of:
Investments in unaffiliated securitiesC		(4,267,710	)
Foreign currency transactions		(3,811	)
Futures contracts		(40,840	)
Net (loss) from investments		(681,821	)
Net (decrease) in net assets resulting from operations	$	(107,345	)
† Foreign taxes	$	112,518
‡ Net of foreign withholding taxes on capital gains	$	64,171
A Includes signficant dividends of $109,126.
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

18

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Statement of Changes in Net Assets

	Year Ended January 31, 2020			Year Ended January 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	574,476		$	537,809
Net realized gain from investments in unaffiliated securities, commission recapture, foreign currency transactions, and futures contracts		3,630,540			588,740
Change in net unrealized (depreciation) of investments in unaffiliated securities, foreign currency transactions, and futures contracts		(4,312,361	)		(3,096,637	)
Net (decrease) in net assets resulting from operations		(107,345	)		(1,970,088	)
Distributions to shareholders:
Total retained earnings:
Institutional Class		(1,007,287	)		(243,835	)
Y Class		(1,682,496	)		(1,353,535	)
Investor Class		(619,971	)		(143,418	)
A Class		(99,285	)		(20,737	)
C Class		(32,910	)		(9,707	)
Net distributions to shareholders		(3,441,949	)		(1,771,232	)
Capital share transactions (Note 11):
Proceeds from sales of shares		3,626,292			9,804,850
Reinvestment of dividends and distributions		3,043,885			1,702,819
Cost of shares redeemed		(27,232,693	)		(10,520,132	)
Redemption fees		-			16,131
Net increase (decrease) in net assets from capital share transactions		(20,562,516	)		1,003,668
Net (decrease) in net assets		(24,111,810	)		(2,737,652	)
Net assets:
Beginning of period		35,157,036			37,894,688
End of period	$	11,045,226		$	35,157,036

See accompanying notes

19

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon Acadian Emerging Markets Managed Volatility 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.

Recently Adopted 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, and has been adopted accordingly with no material impact 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 January 31, 2020, 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
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

20

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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.

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 (loss) in the Fund’s Statement of Operations, if applicable.

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 Fund’s Statement of Operations.

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.

21

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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 $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 Acadian Asset Management LLC (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:

Acadian Asset Management LLC

First $500 million	0.65	%
Over $500 million	0.60	%

The Management and Sub-Advisory Fees paid by the Fund for the year ended January 31, 2020 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	82,230
Sub-Advisor Fees		0.65	%		144,693
Total		1.00	%	$	226,923

22

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020, the Manager received securities lending fees of $9 for the securities lending activities of the Fund.

Distribution Plans

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the A and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), receives an annual fee of 0.25% of the average daily net assets of the A Class and 1.00% of the average daily net assets of the C Class. 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 Distributor for distribution assistance.

For all other share classes, the Funds have utilized a “defensive” distribution plan (the “Plan”) pursuant to which no separate fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the use of management fees received by the Manager and/or the investment advisors hired by the Manager 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 from these fees.

Service Plans

The Investor, A and C Classes have each adopted a Service Plan (collectively, the “Plans”). The Plans authorize the payment to the Manager an annual fee up to 0.375% of the average daily net assets of the Investor Class, up to 0.25% of the average daily net assets of the A Class and up to 0.25% of the average daily net assets of the C Class. In addition, the Funds may reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries attributable to Y Class and Institutional Class. The Manager or other approved entities may spend such amounts on any activities or expenses primarily intended to result in or relate to the servicing of A Class, C Class, Y Class, Institutional Class and Investor Class including, but not limited to, payment of shareholder service fees and transfer agency or sub-transfer agency expenses. The fees will be payable monthly in arrears. The primary expenses expected to be incurred under the Plans are shareholder servicing, record keeping fees and servicing fees paid to financial intermediaries such as plan sponsors and broker-dealers.

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 January 31, 2020, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Acadian Emerging Markets Managed Volatility	$	17,680

23

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

As of January 31, 2020, 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
Acadian Emerging Markets Managed Volatility	$	688

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 January 31, 2020, 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
Acadian Emerging Markets Managed Volatility	$	263	$	7	$	270

Interfund Credit Facility

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“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 January 31, 2020, the Fund borrowed on average $586,693 for 36 days at an average interest rate of 2.59% with interest charges of $1,469. These amounts are recorded as “Other expenses” in 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 January 31, 2020, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap								Expiration of Reimbursed Expenses
Fund	Class	2/1/2019 - 1/31/2020			Reimbursed Expenses		(Recouped) Expenses
Acadian Emerging Markets Managed Volatility	Institutional		1.35	%	$	47,080	$	(2,081	)		2022-2023
Acadian Emerging Markets Managed Volatility	Y		1.45	%		139,856		-			2022-2023
Acadian Emerging Markets Managed Volatility	Investor		1.73	%		22,759		(1,676	)		2022-2023
Acadian Emerging Markets Managed Volatility	A		1.75	%		3,191		(325	)		2022-2023
Acadian Emerging Markets Managed Volatility	C		2.50	%		1,483		-			2022-2023

24

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

Of these amounts, $21,045 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at January 31, 2020.

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 2022 and 2023. The Fund did not record a liability for potential reimbursements due to the current assessment that reimbursements are 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
Acadian Emerging Markets Managed Volatility	$	2,547	$	-	$	102,522		2019-2020
Acadian Emerging Markets Managed Volatility		1,536		206,434		-		2020-2021
Acadian Emerging Markets Managed Volatility		-		120,396		-		2021-2022

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 which may be used to offset distribution related expenses. During the year ended January 31, 2020, there were no fees collected for 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 January 31, 2020, 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 January 31, 2020, CDSC fees of $938 were collected for Class C Shares of the Fund.

Trustee Fees and Expenses

Effective January 1, 2020, compensation for their service to the American Beacon Funds Complex, including the Trust (collectively, the “Trusts”), each Trustee is compensated from the Trusts as follows: (1) an annual retainer of $120,000; (2) meeting attendance fee (for attendance in person or via teleconference) of (a) $12,000 for in person attendance, or $5,000 for telephonic attendance, by Board members for each regularly scheduled or special Board meeting, (b) $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, (c) $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee; and (d) $2,500 for attendance by Board members for each special telephonic Board meeting; and (3) 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. For her service as Board Chair, Ms. Cline receives an additional annual retainer of $50,000. Although she attends several committee meetings at each quarterly Board meeting, she receives only a single $2,500 fee each quarter for her attendance at those meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chair of the Nominating and Governance Committee receives an additional annual retainer of $15,000.

25

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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 Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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. 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.

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.

27

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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, Global Depositary Receipts, and Non-Voting Depositary Receipts

ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Global Depositary Receipts (“GDRs”) are in bearer form and traded in both the U.S. and European 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 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

28

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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.

Foreign Securities

The Fund 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 Fund’s rights as an investor.

Illiquid and Restricted Securities

Generally, an illiquid asset is an asset that the Fund reasonably expects 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, as determined pursuant to Rule 22e-4 under the Investment Company Act or as otherwise permitted or required by SEC rules and interpretations. 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

29

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020 are disclosed in the Notes to the Schedule of Investments.

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.

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 (“BDCs”), 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.

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.

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.

30

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020, 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 January 31, 2020
Acadian Emerging Markets Managed Volatility	6

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 January 31, 2020:
	Derivatives not accounted for as hedging instruments
Liabilities:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts				Total
Payable for variation margin from open futures contracts(2)		$	-		$	-		$	-		$	-		$	(4,161	)		$	(4,161	)

31

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

The effect of financial derivative instruments on the Statement of Operations as of January 31, 2020:
	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		$	-		$	-		$	-		$	-		$	(25,408	)		$	(25,408	)
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		$	-		$	-		$	-		$	-		$	(40,840	)		$	(40,840	)

⁽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. 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, January 31, 2020.

Offsetting of Financial and Derivative Assets as of January 31, 2020:
	Assets		Liabilities
Futures Contracts(1)	$	-	$	4,161
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	-	$	4,161
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	-	$	(4,161	)
Total derivative assets and liabilities subject to an MNA	$	-	$	-

⁽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.

China Investment Risk

Investing in securities of Chinese issuers, including A-Shares, involves certain risks and considerations not typically associated with investing in securities of U.S. issuers, including, among others, more frequent trading suspensions and government interventions (including by nationalization of assets), currency exchange rate fluctuations or blockages, limits on the use of brokers and on foreign ownership, different financial reporting standards, higher dependence on exports and international trade, potential for increased trade tariffs, embargoes and other trade limitations, and custody risks associated with programs used to access Chinese securities. Significant portions of the Chinese securities markets may become rapidly illiquid, as Chinese issuers have the ability to suspend the trading of their equity securities, and have shown a willingness to exercise that option in response to market volatility and other events.

32

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

Counterparty Risk

The Fund is 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 Fund. As a result the Fund 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 Fund to greater losses in the event of a default by a counterparty.

Currency Risk

The Fund may have exposure to foreign currencies by making direct investments in non-U.S. currencies or in securities denominated in non-U.S. currencies, or by purchasing or selling forward currency exchange contracts in non-U.S. currencies. 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 the Fund’s 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 Fund’s investments in foreign currency denominated securities may reduce the returns of the Fund. Currency futures, forwards, options or swaps may not always work as intended, and in specific cases, the Fund 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 Fund may choose to not hedge its currency risks.

Derivatives Risk

Derivatives may involve significant risk. The use of derivative instruments may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities or other instruments underlying those derivatives, including the high degree of leverage often embedded in such instruments, and potential material and prolonged deviations between the theoretical value and realizable value of a derivative. Some derivatives have the potential for unlimited loss, regardless of the size of the Fund’s initial investment. Derivatives may be illiquid and may be more volatile than other types of investments. The Fund may buy or sell derivatives not traded on an exchange and which may be subject to heightened liquidity and valuation risk. Derivative investments can increase portfolio turnover and transaction costs. Derivatives also are subject to counterparty risk and credit risk. As a result, the Fund 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 Fund to greater losses in the event of a default by a counterparty.

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

33

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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 exchange rate fluctuations, political and financial instability in the home country of a particular depositary receipt, less liquidity and more volatility, less government regulation and supervision and delays in transaction settlement.

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) different 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 Disruption Risk

Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises and related geopolitical events have led, and in the future may continue to lead, to instability in world economies and markets generally. This instability has disrupted, and may continue to disrupt, U.S. and world economies and markets and adversely affect the value of your investment. Such market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Changes in value may be temporary or may last for extended periods. Although multiple asset classes have been and may continue to be affected by a market disruption, the duration and effects may not be the same for all types of assets. Events that have led to market disruptions include the recent pandemic spread of the novel coronavirus known as COVID-19, which has resulted in travel restrictions, closed international borders, quarantines, disruptions to supply chains and lower consumer demand. The duration and full effects of these market disruptions are still uncertain. The effect of recent efforts

34

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

undertaken by the Federal Reserve System to address the economic impact of the COVID-19 pandemic, such as the reduction of the federal funds target rate, and other monetary and fiscal actions that may be taken by the U.S. federal government to stimulate the U.S. economy, are not yet known. In addition, COVID-19 could cause the need for employees and vendors at various businesses, including the Manager, the sub-advisor(s) or other service providers, to work at external locations, and extensive medical absences. Because a large epidemic may create significant market and business uncertainties and disruptions, not all events that could affect the business of the Manager, the sub-advisor(s) or other service providers can be determined and addressed in advance.

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 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 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. 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

35

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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 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 a Fund’s investments in the United Kingdom and Europe.

Market Timing Risk

Because the Fund invests 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 Fund, including (i) the dilution of the Fund’s NAV, (ii) an increase in the Fund’s expenses, and (iii) interference with the portfolio manager’s ability to execute efficient investment strategies. Because of specific securities in which the Fund 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 Fund generally prices foreign securities using their closing prices from the foreign markets in which they trade, typically prior to the Fund’s calculation of its NAV. These prices may be affected by events that occur after the close of a foreign market but before the Fund price its shares. In such instances, the Fund may fair value high yield and foreign securities. However, some investors may engage in frequent short-term trading in the Fund to take advantage of any price differentials that may be reflected in the NAV of the Fund’s shares. While the Manager monitors trading in the Fund, there is no guarantee that it can detect all market timing activities.

Other Investment Companies Risk

The Fund may invest in shares of other registered investment companies, including money market funds, ETFs and BDCs. 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 direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Fund 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 investment may decline, adversely affecting the Fund 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 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. BDCs generally invest in small developing companies, private companies, and thinly traded securities of public companies, and many debt instruments in which a BDC may invest may not be rated by a credit rating agency and may be below investment grade quality. The Fund investments in BDCs may be subject to certain additional risks, including competition for limited investment opportunities, the liquidity of a BDC’s investments, uncertainty as to the value of a BDC’s investments, risks associated with access to capital and leverage, and reliance on the management of a BDC.

36

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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”.

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 January 31, 2020 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 Fund also utilize earnings and profits distributed to shareholders on redemptions of shares as part of the dividends paid deduction.

The tax character of distributions paid were as follows:

	Year Ended January 31, 2020		Year Ended January 31, 2019
Distributions paid from:
Ordinary income*
Institutional Class	$	246,581	$	130,377
Y Class		411,870		723,726
Investor Class		151,767		76,685
A Class		24,305		10,753
C Class		5,336		3,640
Long-term capital gains
Institutional Class		760,706		113,458
Y Class		1,270,626		629,809
Investor Class		468,204		66,733
A Class		74,980		9,984
C Class		27,574		6,067
Total distributions paid	$	3,441,949	$	1,771,232

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

37

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

As of January 31, 2020, the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Acadian Emerging Markets Managed Volatility	$	9,900,462	$	1,178,621	$	(991,574	)	$	187,047

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences		Distributable Earnings
Acadian Emerging Markets Managed Volatility	$	187,047	$	178,497	$	690,724	$	(37,595	)	$	-	$	1,018,673

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 tax deferral of specified late year ordinary losses, the realization for tax purposes of unrealized gains (losses) on investments in passive foreign investment companies and the realization for tax purposes of unrealized gains (losses) on certain derivative instruments.

Due to inherent differences in the recognition of income, expenses, and realized gains (losses) under U.S. 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 January 31, 2020.

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 January 31, 2020, the Fund did not have any capital loss carryforwards.

The Fund is permitted for tax purposes to defer into its next fiscal year qualified late year losses. Qualified late year capital losses are any capital losses incurred after October 31 through the Fund’s fiscal year end, January 31, 2020. Qualified late year ordinary losses are specified losses generally incurred after October 31 and ordinary losses incurred after December 31 through the end of the Fund’s fiscal year, January 31, 2020. For the period ended January 31, 2020, the Fund deferred $37,595 in late year ordinary losses to February 1, 2020.

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 January 31, 2020 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
Acadian Emerging Markets Managed Volatility	$	5,718,271	$	29,903,250

38

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

A summary of the Fund’s transactions in the USG Select Fund for the year ended January 31, 2020 were as follows:

Fund	Type of Transaction	January 31, 2019 Shares/Fair Value		Purchases		Sales		January 31, 2020 Shares/Fair Value		Dividend Income
Acadian Emerging Markets Managed Volatility	Direct	$	392,084	$	15,565,099	$	15,666,402	$	290,781	$	5,576
Acadian Emerging Markets Managed Volatility	Securities Lending		-		815,908		815,908		-		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 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.

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.

39

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

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.

The Fund did not have any securities on loan or hold any securities lending collateral as of the year ended January 31, 2020.

10.  Borrowing Arrangements

Effective November 14, 2019 (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 12, 2020, 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 12, 2020 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 January 31, 2020, 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 January 31,
	Year Ended January 31, 2020						Year Ended January 31, 2019
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		148,733		$	1,277,404			102,960		$	1,125,554
Reinvestment of dividends		124,974			1,007,287			24,555			243,835
Shares redeemed		(328,662	)		(3,060,190	)		(132,463	)		(1,430,096	)
Redemption fees		–			-			–			2,672
Net (decrease) in shares outstanding		(54,955	)	$	(775,499	)		(4,948	)	$	(58,035	)
	Y Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		189,456		$	1,970,943			740,434		$	7,994,911
Reinvestment of dividends		161,265			1,288,509			130,311			1,287,472
Shares redeemed		(2,217,735	)		(22,989,129	)		(710,915	)		(7,703,853	)
Redemption fees		–			-			–			11,668
Net increase (decrease) in shares outstanding		(1,867,014	)	$	(19,729,677	)		159,830		$	1,590,198

40

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Notes to Financial Statements

January 31, 2020

	Investor Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		26,916		$	278,513			55,053		$	582,905
Reinvestment of dividends		78,358			615,894			14,395			141,069
Shares redeemed		(86,621	)		(875,392	)		(60,515	)		(635,338	)
Redemption fees		–			-			–			1,281
Net increase in shares outstanding		18,653		$	19,015			8,933		$	89,917
	A Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		98		$	1,032			6,847		$	74,480
Reinvestment of dividends		12,552			99,285			2,107			20,736
Shares redeemed		(12,826	)		(108,820	)		(44,210	)		(477,632	)
Redemption fees		–			-			–			302
Net (decrease) in shares outstanding		(176	)	$	(8,503	)		(35,256	)	$	(382,114	)
	C Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Acadian Emerging Markets Managed Volatility Fund	Shares			Amount			Shares			Amount
Shares sold		9,459		$	98,400			2,651		$	27,000
Reinvestment of dividends		4,093			32,910			994			9,707
Shares redeemed		(19,959	)		(199,162	)		(26,413	)		(273,213	)
Redemption fees		–			-			–			208
Net (decrease) in shares outstanding		(6,407	)	$	(67,852	)		(22,768	)	$	(236,298	)

12.  Subsequent Events

On March 4, 2020, the Board of the Trust approved a plan to liquidate and terminate the Fund on or about April 30, 2020.

Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a virus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations and individual issuers, all of which may negatively impact the Funds performance. Management’s evaluation is ongoing and the financial landscape continues to change.

41

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	10.59		$	11.78		$	9.22		$	8.36		$	10.24
Income (loss) from investment operations:
Net investment income		0.34	A		0.20			0.12	B		0.13			0.04
Net gains (losses) on investments (both realized and unrealized)		(0.26	)		(0.84	)		2.65			0.90			(1.84	)
Total income (loss) from investment operations		0.08			(0.64	)		2.77			1.03			(1.80	)
Less distributions:
Dividends from net investment income		(0.70	)		(0.18	)		(0.21	)		(0.17	)		(0.08	)
Distributions from net realized gains		(2.16	)		(0.37	)		–			–			–
Tax return of capitalC		–			–			–			–			(0.00	)D
Total distributions		(2.86	)		(0.55	)		(0.21	)		(0.17	)		(0.08	)
Redemption fees added to beneficial interestsD		0.00			0.00			0.00			0.00			0.00
Net asset value, end of period	$	7.81		$	10.59		$	11.78		$	9.22		$	8.36
Total returnE		(0.09	)%		(5.13	)%		30.24	%		12.37	%		(17.58	)%
Ratios and supplemental data:
Net assets, end of period	$	3,318,116		$	5,080,038		$	5,706,260		$	52,787,468		$	40,335,580
Ratios to average net assets:
Expenses, before reimbursements		2.28	%		1.71	%		1.85	%		1.47	%		1.68	%
Expenses, net of reimbursements		1.35	%		1.35	%		1.35	%		1.35	%		1.35	%
Net investment income, before expense reimbursements		1.75	%		1.44	%		0.74	%		1.18	%		1.16	%
Net investment income, net of reimbursements		2.68	%		1.80	%		1.23	%		1.31	%		1.49	%
Portfolio turnover rate		25	%		28	%		34	%		32	%		35	%

^A  Net investment income includes significant dividend payment from NVC International Holdings Ltd. amounting to $0.2633.

^B  Per share amounts have been calculated using the average shares method.

^C  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^D  Amount represents less than $0.01 per share.

^E  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 Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	10.54		$	11.73		$	9.19		$	8.34		$	10.22
Income (loss) from investment operations:
Net investment income		0.20	A		0.17			0.13			0.11			0.14
Net gains (losses) on investments (both realized and unrealized)		(0.13	)		(0.81	)		2.62			0.91			(1.94	)
Total income (loss) from investment operations		0.07			(0.64	)		2.75			1.02			(1.80	)
Less distributions:
Dividends from net investment income		(0.70	)		(0.18	)		(0.21	)		(0.17	)		(0.08	)
Distributions from net realized gains		(2.16	)		(0.37	)		–			–			–
Tax return of capitalB		–			–			–			–			(0.00	)C
Total distributions		(2.86	)		(0.55	)		(0.21	)		(0.17	)		(0.08	)
Redemption fees added to beneficial interestsC		0.00			0.00			0.00			0.00			0.00
Net asset value, end of period	$	7.75		$	10.54		$	11.73		$	9.19		$	8.34
Total returnD		(0.16	)%		(5.15	)%		30.12	%		12.28	%		(17.64	)%
Ratios and supplemental data:
Net assets, end of period	$	5,148,222		$	26,674,824		$	27,820,209		$	32,606,568		$	25,098,823
Ratios to average net assets:
Expenses, before reimbursements		2.34	%		1.76	%		1.93	%		1.55	%		1.77	%
Expenses, net of reimbursements		1.45	%		1.45	%		1.45	%		1.45	%		1.45	%
Net investment income, before expense reimbursements		1.55	%		1.26	%		1.04	%		1.15	%		1.23	%
Net investment income, net of reimbursements		2.44	%		1.57	%		1.52	%		1.25	%		1.55	%
Portfolio turnover rate		25	%		28	%		34	%		32	%		35	%

^A  Net investment income includes significant dividend payment from NVC International Holdings Ltd. amounting to $0.1136.

^B  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^C  Amount represents less than $0.01 per share.

^D  Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. May include adjustments in accordance with 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 Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	10.44		$	11.66		$	9.16		$	8.32		$	10.19
Income (loss) from investment operations:
Net investment income		0.36	A		0.15			0.11			0.11			0.16
Net gains (losses) on investments (both realized and unrealized)		(0.32	)		(0.82	)		2.60			0.87			(1.98	)
Total income (loss) from investment operations		0.04			(0.67	)		2.71			0.98			(1.82	)
Less distributions:
Dividends from net investment income		(0.70	)		(0.18	)		(0.21	)		(0.14	)		(0.05	)
Distributions from net realized gains		(2.16	)		(0.37	)		-			-			-
Tax return of capitalB		-			-			-			-			(0.00	)C
Total distributions		(2.86	)		(0.55	)		(0.21	)		(0.14	)		(0.05	)
Redemption fees added to beneficial interestsC		0.00			0.00			0.00			0.00			0.00
Net asset value, end of period	$	7.62		$	10.44		$	11.66		$	9.16		$	8.32
Total returnD		(0.46	)%		(5.45	)%		29.78	%		11.89	%		(17.86	)%
Ratios and supplemental data:
Net assets, end of period	$	2,181,698		$	2,793,978		$	3,016,153		$	3,457,789		$	3,933,437
Ratios to average net assets:
Expenses, before reimbursements		2.59	%		2.15	%		2.12	%		1.77	%		1.98	%
Expenses, net of reimbursements		1.73	%		1.73	%		1.73	%		1.73	%		1.73	%
Net investment income, before expense reimbursements		1.29	%		0.93	%		0.82	%		0.94	%		1.30	%
Net investment income, net of reimbursements		2.15	%		1.35	%		1.21	%		0.98	%		1.55	%
Portfolio turnover rate		25	%		28	%		34	%		32	%		35	%

^A  Net investment income includes significant dividend payment from NVC International Holdings Ltd. amounting to $0.3046.

^B  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^C  Amount represents less than $0.01 per share.

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

44

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	10.48		$	11.69		$	9.18		$	8.34		$	10.18
Income (loss) from investment operations:
Net investment income		0.26	A		0.10			0.10			0.13			0.12
Net gains (losses) on investments (both realized and unrealized)		(0.21	)		(0.78	)		2.62			0.85			(1.94	)
Total income (loss) from investment operations		0.05			(0.68	)		2.72			0.98			(1.82	)
Less distributions:
Dividends from net investment income		(0.70	)		(0.16	)		(0.21	)		(0.14	)		(0.02	)
Distributions from net realized gains		(2.16	)		(0.37	)		–			–			–
Tax return of capitalB		–			–			–			–			(0.00	)C
Total distributions		(2.86	)		(0.53	)		(0.21	)		(0.14	)		(0.02	)
Redemption fees added to beneficial interestsC		0.00			0.00			0.00			0.00			0.00
Net asset value, end of period	$	7.67		$	10.48		$	11.69		$	9.18		$	8.34
Total returnD		(0.36	)%		(5.52	)%		29.83	%		11.84	%		(17.90	)%
Ratios and supplemental data:
Net assets, end of period	$	285,259		$	391,973		$	849,017		$	510,236		$	740,272
Ratios to average net assets:
Expenses, before reimbursements		2.53	%		2.02	%		2.24	%		1.90	%		2.10	%
Expenses, net of reimbursements		1.75	%		1.75	%		1.75	%		1.75	%		1.75	%
Net investment income, before expense reimbursements		1.36	%		1.06	%		0.61	%		0.86	%		1.08	%
Net investment income, net of reimbursements		2.14	%		1.33	%		1.10	%		1.01	%		1.43	%
Portfolio turnover rate		25	%		28	%		34	%		32	%		35	%

^A  Net investment income includes significant dividend payment from NVC International Holdings Ltd. amounting to $0.1887.

^A  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^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

45

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	10.40		$	11.55		$	9.08		$	8.23		$	10.10
Income (loss) from investment operations:
Net investment income		0.15	A		0.02			0.06			0.02			0.10
Net gains (losses) on investments (both realized and unrealized)		(0.19	)		(0.76	)		2.54			0.89			(1.97	)
Total income (loss) from investment operations		(0.04	)		(0.74	)		2.60			0.91			(1.87	)
Less distributions:
Dividends from net investment income		(0.42	)		(0.04	)		(0.13	)		(0.06	)		(0.00	)B
Distributions from net realized gains		(2.16	)		(0.37	)		–			–			–
Tax return of capitalC		–			–			–			–			(0.00	)B
Total distributions		(2.58	)		(0.41	)		(0.13	)		(0.06	)		(0.00	)B
Redemption fees added to beneficial interestsB		0.00			0.00			0.00			0.00			0.00
Net asset value, end of period	$	7.78		$	10.40		$	11.55		$	9.08		$	8.23
Total returnD		(1.21	)%		(6.19	)%		28.71	%		11.11	%		(18.50	)%
Ratios and supplemental data:
Net assets, end of period	$	111,931		$	216,223		$	503,049		$	450,626		$	644,705
Ratios to average net assets:
Expenses, before reimbursements		3.40	%		2.77	%		3.00	%		2.67	%		2.87	%
Expenses, net of reimbursements		2.50	%		2.50	%		2.50	%		2.50	%		2.50	%
Net investment income (loss), before expense reimbursements		0.49	%		0.54	%		(0.01	)%		0.11	%		0.40	%
Net investment income, net of reimbursements		1.39	%		0.81	%		0.49	%		0.28	%		0.77	%
Portfolio turnover rate		25	%		28	%		34	%		32	%		35	%

^A  Net investment income includes significant dividend payment from NVC International Holdings Ltd. amounting to $0.0871.

^B  Amount represents less than $0.01 per share.

^C  Tax return of capital is calculated based on shares outstanding at the time of distribution.

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

46

American Beacon Acadian Emerging Markets Managed Volatility Fund^SM

Federal Tax Information

January 31, 2020 (Unaudited)

Certain tax information regarding the Fund is required to be provided to shareholders based upon the Fund’s income and distributions for the taxable year ended January 31, 2020. 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 January 31, 2020. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends-Received Deduction:

Acadian Emerging Markets Managed Volatility 0.01 % 

Qualified Dividend Income:

Acadian Emerging Markets Managed Volatility 81.87 % 

Long-Term Capital Gain Distributions:

Acadian Emerging Markets Managed Volatility $ 2,602,090

Short-Term Capital Gain Distributions:

Acadian Emerging Markets Managed Volatility $ 624

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

47

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, and the American Beacon Apollo Total Return 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
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (50)	Trustee since 2015	President, SJVIIF, LLC, Impact Investment Fund (2018-Present); Director, Kura MD, Inc. (local telehealth organization) (2015-2017); Senior Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Senior 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, Valley Healthcare Staffing (2017-2018); 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).
Joseph B. Armes (57)	Trustee since 2015	Director, Switchback Energy Acquisition (2019-Present); 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) (2013-2018); 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).
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).
Brenda A. Cline (59)	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 (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).

48

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*
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); 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).
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).
Douglas A. Lindgren (58)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Consultant, Carne Financial Services (2017-2019); 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).
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.
R. Gerald Turner (74)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-2019); 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).

49

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	Term
	One Year
Gene L. Needles, Jr. (65)	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); Director, Green Harvest Asset Management (2019-Present); Director, National Investment Services of America, LLC (2019-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).
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, Green Harvest Asset Management (2019-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).

50

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
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).
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).
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).
Melinda G. Heika (58)	Principal Accounting Officer since 2017 and 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, Green Harvest Asset Management (2019-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).
Terri L. McKinney (56)	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).

51

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, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present); Director, National Investment Services of America, LLC (2019-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).
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).
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).

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
OFFICERS (CONT.)	Term
	One Year
Sonia L. Bates (63)	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).
Shelley D. Abrahams (45)	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);
Rebecca L. Harris (53)	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).
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); .
Peter A. Davidson (47)**	Assistant Secretary Since 2020	Assistant Secretary, American Beacon Select Funds (2020-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2020-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2020-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2020-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 75.

** Mr. Davidson was elected at the March 3, 2020 meeting of the Board.

53

American Beacon Funds^SM

Privacy Policy

January 31, 2020 (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.

54

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56

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 end of each 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 available at www.americanbeaconfunds.com approximately sixty days after the end of each quarter.	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 PricewaterhouseCoopers LLP Boston, Massachusetts 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 Acadian Emerging Markets Managed Volatility Fund are service marks of American Beacon Advisors, Inc.

AR 01/20

About American Beacon Advisors

Since 1986, American Beacon Advisors, Inc. 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.

CONTINUOUS CAPITAL EMERGING MARKETS FUND

Investing in foreign and emerging market securities may involve heightened risk due to currency fluctuations and economic and political risks. The Fund may have high portfolio turnover, which could increase the Fund’s transaction costs and possibly have a negative impact on performance. 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 January 31, 2020

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	5
Report of Independent Registered Public Accounting Firm	7
Schedule of Investments:
American Beacon Continuous Capital Emerging Markets Fund	8
Financial Statements	14
Notes to Financial Statements	17
Financial Highlights:
American Beacon Continuous Capital Emerging Markets Fund	35
Federal Tax Information	38
Trustees and Officers of the American Beacon Funds	39
Privacy Policy	45

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   During the 12 months of this reporting period, news reports highlighted multiple disruptive headwinds in the global economy; among them the U.S. trade war with China and its toll on the global economy, Brexit, disruptions in the Middle East and protests in Hong Kong. And although the headlines seemed to be just starting during the period addressed in this report, it’s now undeniable that the global spread of the COVID-19 virus is having an overwhelming effect on the world’s markets, the full impact of which is unknown at this time.   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

Global Equity and Emerging Markets Overview

January 31, 2020 (Unaudited)

Global equity markets closed with a gain for the 12-month period ended January 31, 2020, as evidenced by the MSCI ACWI Index (up 16.0%). In the U.S., the unemployment rate moved slightly up to 3.6%, and gross domestic product growth for 2019 averaged 2.3%. The fiscal year began with global uncertainty stemming from Brexit-related turmoil in the eurozone, as well as the U.S.-China trade war and the effects reverberating from it.

However, as the year went on, markets were emboldened by progress toward a “phase one” trade deal between the U.S. and China, and the uncertainty regarding the eurozone was reduced with a strong electoral win by the Conservative Party and Boris Johnson in the U.K. Investors welcomed the Federal Reserve’s rate cuts and the monetary easing efforts enacted by other central banks. Although these positive trends were well-received, investors maintained a healthy dose of caution given the history of trade rhetoric between U.S. and China, the U.S. entering a presidential election year, and the emergence of a potential pandemic stemming from the newly identified COVID-19 virus.

Emerging Markets delivered positive returns, with the MSCI Emerging Markets Index up 3.8% for the period under review. Following are some country highlights:

• Chinese equities rose 5.8% for the period while awaiting the completion of the phase one trade deal with the U.S., which was officially signed in January 2020. Although Beijing’s stimulus measures took root, pro-democracy protests in Hong Kong remained a dark cloud.

• Brazilian equities closed down 0.8%, despite a positive 2020 forecast for economic and domestic demand recovery.

• Mexican equities ticked up 2.8% on the U.S. House of Representatives’ approval of the United States-Mexico-Canada Agreement, a new trade deal seeking to modernize the 26-year-old North American Free Trade Agreement, and the resulting diminished threat of new auto tariffs.

• Turkish equities posted a 4.5% loss despite the central bank cutting interest rates in an effort to revive the nation’s economy.

Ultimately, Emerging Markets lagged developed markets during the period as investors deliberated over the effect of back and forth U.S.-China trade negotiations, which had an outsized impact on performance.

2

American Beacon Continuous Capital Emerging Markets Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

The Investor Class of the American Beacon Continuous Capital Emerging Markets Fund (the “Fund”) returned 8.04% for the 12 months ended January 31, 2020. The Fund outperformed the MSCI Emerging Markets Index (the “Index”) return of 3.81% for the same period.

Comparison of Changes in Value of a $10,000 Investment for the period 12/17/2018 Through 1/31/2020

Total Returns for the Period ended January 31, 2020
	Ticker	1 Year			Since Inception (12/17/2018)			Value of $10,000 12/17/2018- 1/31/2020
Institutional Class (1,3) . .	CCEIX		8.40	%		15.54	%		$	11,762
Y Class (1,3) . . . . . .	CCEYX		8.41	%		15.54	%		$	11,762
Investor Class (1,3)	CCEPX		8.04	%		15.10	%		$	11,712
MSCI Emerging Markets Index (2)			3.81	%		11.40	%		$	11,293

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 MSCI Emerging Markets Index is a market capitalization weighted index composed of companies that are representative of the market structure of developing countries in Latin America, Asia, Eastern Europe, the Middle East and Africa. The MSCI^® information contained herein: (1) is provided “as is,” (2) is proprietary to MSCI and/or its content providers, (3) may not be used to create any financial instruments or products or any indexes and (4) may not be copied or distributed without MSCI’s express written consent. MSCI disclaims all warranties with respect to the information. Neither MSCI nor its content providers are responsible for any damages or losses arising from any use of this information. One cannot directly invest in an index.

3. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y and Investor Class shares were 2.42%, 2.52% and 2.80%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

3

American Beacon Continuous Capital Emerging Markets Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

For the one-year period ending January 31, 2020, the Fund outperformed the Index primarily through stock selection. Sector allocation was effectively neutral.

Most of the Fund’s outperformance related to security selection was attributed to holdings in the Industrials and Financials sectors. In the Industrials sector, China Lesso Group Holdings Ltd. (up 125.6%) and A-Living Services Co., Ltd. (up 87.2%) added the most to performance. In the Financials sector, Bank Tabungan Pensiunan Nasional Syariah Tbk PT (up 103.1%) and Manappuram Finance Ltd. (up 55.7%) were strong performers. The aforementioned performance was somewhat offset by security selection in the Information Technology sector. Underweight positions relative to the Index in Taiwan Semiconductor Manufacturing Co., Ltd. (up 30.4%) and Samsung Electronics Co., Ltd. (up 12.4%) were the largest detractors from performance.

Looking forward, the Fund’s sub-advisor will continue to focus on its iterative investment process of constructing a portfolio of high-quality companies with consistent value and income characteristics.

Top Ten Holdings (% Net Assets)
Alibaba Group Holding Ltd., Sponsored ADR		0.8
Network International Holdings PLC		0.8
Taiwan Semiconductor Manufacturing Co., Ltd.		0.8
Tencent Holdings Ltd.		0.8
Tencent Holdings Ltd., ADR		0.8
Vinda International Holdings Ltd.		0.8
Gujarat Gas Ltd.		0.7
Samsung Electronics Co., Ltd., Common Stock		0.7
Samsung Electronics Co., Ltd., Preferred Stock		0.7
Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored ADR		0.7
Total Fund Holdings	148

Sector Allocation (% Equities)
Financials	21.1
Information Technology	16.4
Consumer Discretionary	13.6
Industrials	10.8
Consumer Staples	7.6
Communication Services	7.2
Health Care	6.7
Energy	6.2
Utilities	5.9
Real Estate	3.1
Materials	1.4
Country Allocation (% Equities)
China	28.9
India	14.8
Taiwan	13.1
Republic of Korea	8.8
Brazil	5.8
Thailand	4.7
Russia	4.0
South Africa	3.3
Hong Kong	2.7
Philippines	2.5
Mexico	2.3
Malaysia	2.2
Indonesia	2.1
Singapore	2.0
United Arab Emirates	1.6
Saudi Arabia	0.6
Turkey	0.6

4

American Beacon Funds^SM

Expense Examples

January 31, 2020 (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, 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 August 1, 2019 through January 31, 2020.

Actual Expenses

The “Actual” lines of 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” 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 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 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 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 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 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.

5

American Beacon Continuous Capital Emerging Markets Fund^SM

Expense Examples

January 31, 2020 (Unaudited)

American Beacon Continuous Capital Emerging Markets Fund
	Beginning Account Value 8/1/2019		Ending Account Value 1/31/2020		Expenses Paid During Period 8/1/2019-1/31/2020*
Institutional Class
Actual		$1,000.00		$1,052.00		$6.00
Hypothetical**		$1,000.00		$1,019.36		$5.90
Y Class
Actual		$1,000.00		$1,052.10		$6.52
Hypothetical**		$1,000.00		$1,018.85		$6.41
Investor Class
Actual		$1,000.00		$1,050.40		$7.91
Hypothetical**		$1,000.00		$1,017.49		$7.78

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.16%, 1.26%, and 1.53% 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.

6

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of American Beacon Funds and the Shareholders of American Beacon Continuous Capital Emerging Markets Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of American Beacon Continuous Capital Emerging Markets Fund (one of the series constituting American Beacon Funds, referred to hereafter as the “Fund”) as of January 31, 2020, the related statement of operations for the year ended January 31, 2020 and the statement of changes in net assets and the financial highlights for the year ended January 31, 2020 and for the period December 17, 2018 (commencement of operations) through January 31, 2019, including 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 as of January 31, 2020, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for the year ended January 31, 2020 and for the period December 17, 2018 (commencement of operations) through January 31, 2019 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’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 Fund 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 of these financial statements 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.

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 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. Our procedures included confirmation of securities owned as of January 31, 2020 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Dallas, TX

March 30, 2020

We have served as the auditor of one or more investment companies in the American Beacon family of funds since 2016.

7

American Beacon Continuous Capital Emerging Markets Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
Brazil - 5.51%
Common Stocks - 4.82%
B3 S.A. - Brasil Bolsa Balcao		4,406		$	49,589
Banco do Brasil S.A.		4,096			46,425
Cia de Locacao das Americas		7,700			42,450
CPFL Energia S.A.		5,500			49,149
Lojas Renner S.A.		3,500			46,952
Neoenergia S.A.		8,000			48,064
Vivara Participacoes S.A.		6,800			49,969
Total Common Stocks					332,598
Preferred Stocks - 0.69%
Petroleo Brasileiro S.A.A		7,100			47,166
Total Brazil (Cost $335,734)					379,764
China - 27.19%
Common Stocks - 27.19%
A-Living Services Co., Ltd., Class HB C		11,750			38,953
Alibaba Group Holding Ltd.C D		2,000			50,489
Alibaba Group Holding Ltd., Sponsored ADRD		267			55,160
Anhui Gujing Distillery Co., Ltd., Class AC		2,100			41,659
ANTA Sports Products Ltd.C		5,228			45,162
Baidu, Inc., Sponsored ADRD		393			48,559
Bank of China Ltd., Class HC		89,598			34,643
Bank of Communications Co., Ltd., Class HC		56,125			35,774
Biem.L.Fdlkk Garment Co., Ltd., Class AC		11,200			40,005
China Construction Bank Corp., Class HC		46,814			35,512
China Gas Holdings Ltd.C		11,400			44,825
China Isotope & Radiation Corp.C		16,000			46,136
China Lesso Group Holdings Ltd.C		33,000			42,469
China Medical System Holdings Ltd.C		31,000			41,317
China Merchants Bank Co., Ltd., Class HC		9,500			45,817
China Resources Gas Group Ltd.C		8,300			43,662
CITIC Telecom International Holdings Ltd.C		111,883			38,686
CNOOC Ltd., Sponsored ADR		294			44,394
ENN Energy Holdings Ltd.C		3,894			45,325
Gree Electric Appliances, Inc. of Zhuhai, Class AC		4,400			38,349
Huami Corp., ADRD		2,932			40,872
Industrial & Commercial Bank of China Ltd., Class HC		51,196			34,069
Jiangsu Expressway Co., Ltd., Class HC		30,754			38,056
Li Ning Co., Ltd.C		12,500			36,639
Livzon Pharmaceutical Group, Inc., Class HC		12,700			43,531
Longfor Group Holdings Ltd.B C		9,424			39,714
Midea Group Co., Ltd., Class AC		4,600			34,856
NetEase, Inc., ADR		154			49,397
PICC Property & Casualty Co., Ltd., Class HC		41,000			43,770
Ping An Insurance Group Co. of China Ltd., Class HC		3,600			40,727
Prosus N.V.C D		648			46,700
Shandong Weigao Group Medical Polymer Co., Ltd., Class HC		36,000			42,921
Shanghai Pharmaceuticals Holding Co., Ltd., Class HC		24,748			46,034
Shenzhen International Holdings Ltd.C		18,000			35,974
Shenzhou International Group Holdings Ltd.C		3,400			44,885
Sinopharm Group Co., Ltd., Class HC		14,089			45,778
SITC International Holdings Co., Ltd.C		39,680			46,601
Tencent Holdings Ltd.C		1,122			53,276
Tencent Holdings Ltd., ADR		1,105			52,941
Topsports International Holdings Ltd.B C		34,000			41,564

See accompanying notes

8

American Beacon Continuous Capital Emerging Markets Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
China - 27.19% (continued)
Common Stocks - 27.19% (continued)
Wuliangye Yibin Co., Ltd., Class AC		2,100		$	37,067
Yealink Network Technology Corp. Ltd., Class AC		3,700			42,847
YiChang HEC ChangJiang Pharmaceutical Co., Ltd., Class HB C		7,200			41,370
Yuexiu Transport Infrastructure Ltd.C		44,000			38,377
Total Common Stocks					1,874,862
Total China (Cost $1,799,698)					1,874,862
Hong Kong - 2.57%
Common Stocks - 2.57%
AIA Group Ltd., Sponsored ADRE		1,112			44,158
Techtronic Industries Co., Ltd.C		5,813			46,077
Union Medical Healthcare Ltd.C		51,000			33,578
Vinda International Holdings Ltd.C		22,000			53,179
Total Common Stocks					176,992
Total Hong Kong (Cost $160,040)					176,992
India - 13.90%
Common Stocks - 13.90%
Adani Ports & Special Economic Zone Ltd.C		9,097			47,117
Atul Ltd.C		700			48,193
Bajaj Finserv Ltd.C		352			46,696
Granules India Ltd.C		23,709			48,578
Gujarat Gas Ltd.C		12,598			51,022
Gujarat State Petronet Ltd.C		13,521			47,953
HCL Technologies Ltd.C		5,622			46,614
HDFC Bank Ltd.C		2,733			46,891
Hexaware Technologies Ltd.C		9,626			49,130
Infosys Ltd.C		4,562			49,745
KEI Industries Ltd.C		5,793			45,930
Larsen & Toubro Ltd.C		2,150			41,283
Mahanagar Gas Ltd.C		3,088			50,758
Manappuram Finance Ltd.C		18,479			48,630
Muthoot Finance Ltd.C		4,686			49,937
Petronet LNG Ltd.C		12,413			46,345
Reliance Industries Ltd.C		2,412			47,666
RITES Ltd.C		11,240			48,989
Sonata Software Ltd.C		10,123			47,665
WNS Holdings Ltd., ADRD		693			49,452
Total Common Stocks					958,594
Total India (Cost $870,375)					958,594
Indonesia - 1.93%
Common Stocks - 1.93%
Bank Tabungan Pensiunan Nasional Syariah Tbk PTC D		150,200			48,272
Indofood CBP Sukses Makmur Tbk PTC		55,800			46,304
Mitra Adiperkasa Tbk PTC		550,600			38,520
Total Common Stocks					133,096
Total Indonesia (Cost $113,051)					133,096
Malaysia - 2.10%
Common Stocks - 2.07%
RHB Bank BhdC		33,679			46,815
Serba Dinamik Holdings BhdC		86,065			46,677

See accompanying notes

9

American Beacon Continuous Capital Emerging Markets Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
Malaysia - 2.10% (continued)
Common Stocks - 2.07% (continued)
TIME dotCom BhdC		21,800		$	49,243
Total Common Stocks					142,735
Warrants - 0.03%
Serba Dinamik Holdings BhdD		21,504			1,758
Total Malaysia (Cost $135,164)					144,493
Mexico - 2.13%
Common Stocks - 2.13%
Grupo Aeroportuario del Centro Norte S.A.B. de C.V., ADR		816			49,564
Grupo Aeroportuario del Pacifico S.A.B. de C.V., Class B		4,000			49,529
Wal-Mart de Mexico S.A.B. de C.V.		16,400			47,988
Total Common Stocks					147,081
Total Mexico (Cost $118,404)					147,081
Philippines - 2.39%
Common Stocks - 2.39%
Ayala Land, Inc.C		45,575			37,033
BDO Unibank, Inc.C		15,730			45,595
Metropolitan Bank & Trust Co.C		37,400			42,201
SM Prime Holdings, Inc.C		52,700			40,256
Total Common Stocks					165,085
Total Philippines (Cost $177,029)					165,085
Republic of Korea - 8.31%
Common Stocks - 6.83%
DIO Corp.C D		985			31,127
DongKook Pharmaceutical Co., Ltd.C		645			47,414
Hansol Chemical Co., Ltd.C		500			45,369
Innocean Worldwide, Inc.C		688			40,419
JB Financial Group Co., Ltd.C		7,681			32,707
KT&G Corp.C		482			38,316
NCSoft Corp.C		84			44,690
NICE Information Service Co., Ltd.C		3,354			46,980
Samsung Electronics Co., Ltd.C		1,091			51,058
Samsung SDS Co., Ltd.C		289			46,642
Woongjin Coway Co., Ltd.C		634			46,489
Total Common Stocks					471,211
Preferred Stocks - 1.48%
LG Household & Health Care Ltd.A C		80			50,830
Samsung Electronics Co., Ltd.A C		1,305			51,479
Total Preferred Stocks					102,309
Total Republic of Korea (Cost $545,083)					573,520
Russia - 3.79%
Common Stocks - 3.79%
Detsky Mir PJSCB C		24,670			44,350
Gazprom Neft PJSC, Sponsored ADRC		1,087			37,802
LUKOIL PJSC, Sponsored ADR		457			46,673
Rosneft Oil Co. PJSC, GDRC		6,217			46,449
Sberbank of Russia PJSC, Sponsored ADRC		2,470			39,381
TCS Group Holding PLC, GDRC		1,956			46,527
Total Common Stocks					261,182
Total Russia (Cost $225,155)					261,182

See accompanying notes

10

American Beacon Continuous Capital Emerging Markets Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
Saudi Arabia - 0.58% (Cost $44,900)
Common Stocks - 0.58%
Saudi Arabian Oil Co.B D		4,408		$	40,121
Singapore - 1.88%
Common Stocks - 1.88%
CapitaLand Ltd.C		14,100			37,123
Keppel DC REITC		29,414			48,670
NetLink NBN TrustC F		59,600			44,119
Total Common Stocks					129,912
Total Singapore (Cost $111,325)					129,912
South Africa - 3.08%
Common Stocks - 3.08%
Capitec Bank Holdings Ltd.C		434			38,941
Clicks Group Ltd.C		2,740			44,649
FirstRand Ltd.C		8,954			34,311
Naspers Ltd., Class NC		297			48,753
Standard Bank Group Ltd., Sponsored ADRE		4,313			45,718
Total Common Stocks					212,372
Total South Africa (Cost $222,013)					212,372
Taiwan - 12.33%
Common Stocks - 12.33%
Accton Technology Corp.C		8,000			42,640
Advantech Co., Ltd.C		4,340			41,379
Chailease Holding Co., Ltd.C		10,152			42,163
E.Sun Financial Holding Co., Ltd.C		48,768			45,105
Feng TAY Enterprise Co., Ltd.C		7,500			44,931
Lotes Co., Ltd.C		4,391			45,267
Parade Technologies Ltd.C		2,131			44,466
Poya International Co., Ltd.C		3,400			48,764
Realtek Semiconductor Corp.C		4,873			39,395
Simplo Technology Co., Ltd.C		4,470			46,995
Sinbon Electronics Co., Ltd.C		9,690			41,068
Taiwan Semiconductor Manufacturing Co., Ltd.C		4,900			52,419
Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored ADR		950			51,243
Taiwan Union Technology Corp.C		11,000			45,273
Topco Scientific Co., Ltd.C		12,515			44,309
Tripod Technology Corp.C		11,225			40,997
Uni-President Enterprises Corp.C		18,910			44,942
Voltronic Power Technology Corp.C		1,750			42,317
Yuanta Financial Holding Co., Ltd.C		72,240			46,808
Total Common Stocks					850,481
Total Taiwan (Cost $708,597)					850,481
Thailand - 4.41%
Common Stocks - 4.41%
AEON Thana Sinsap Thailand PCL, NVDRC		7,059			36,761
Carabao Group PCLC		15,000			42,364
Carabao Group PCL		1,900			5,410
Com7 PCL, NVDRC		50,892			43,788
Plan B Media Pcl, NVDRC		243,500			46,122
Srisawad Corp. PCL, NVDRC		20,700			49,476
Thanachart Capital PCL, NVDRC		24,500			40,691
Tisco Financial Group PCL, NVDRC		12,116			39,740
Total Common Stocks					304,352
Total Thailand (Cost $288,999)					304,352

See accompanying notes

11

American Beacon Continuous Capital Emerging Markets Fund^SM

Schedule of Investments

January 31, 2020

	Shares		Fair Value
Turkey - 0.61% (Cost $35,512)
Common Stocks - 0.61%
Ulker Biskuvi Sanayi A/SC D		10,759		$	41,727
United Arab Emirates - 1.46%
Common Stocks - 1.46%
Emirates NBD Bank PJSCC		13,021			48,725
Network International Holdings PLCB C D		6,492			52,115
Total Common Stocks					100,840
Total United Arab Emirates (Cost $85,850)					100,840
SHORT-TERM INVESTMENTS - 6.81% (Cost $469,454)
Investment Companies - 6.81%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.47%G H		469,454			469,454
SECURITIES LENDING COLLATERAL - 0.56% (Cost $38,556)
Investment Companies - 0.56%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.47%G H		38,556			38,556
TOTAL INVESTMENTS - 101.54% (Cost $6,484,939)					7,002,484
LIABILITIES, NET OF OTHER ASSETS - (1.54%)					(106,143	)
TOTAL NET ASSETS - 100.00%				$	6,896,341
Percentages are stated as a percent of net assets.

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

^B Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $298,187 or 4.32% of net assets. The Fund has no right to demand registration of these securities.

^C Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $5,391,773 or 78.18% of net assets.

^D Non-income producing security.

^E All or a portion of this security is on loan, collateralized by either cash and/or U.S.Treasuries, at January 31, 2020 (Note 8).

^F Unit - Usually consists of one common stock and/or rights and warrants.

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

^H 7-day yield.

ADR - American Depositary Receipt.

GDR – Global Depositary Receipt.

NVDR – Non Voting Depositary Receipt.

PCL - Public Company Limited (Thailand).

PJSC - Private Joint Stock Company.

PLC - Public Limited Company.

REIT - Real Estate Investment Trust.

See accompanying notes

12

American Beacon Continuous Capital Emerging Markets Fund^SM

Schedule of Investments

January 31, 2020

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2020, the investments were classified as described below:

Continuous Capital Emerging Markets Fund	Level 1		Level 2		Level 3		Total
Assets
Foreign Common Stocks
Brazil	$	332,598	$	-	$	-	$	332,598
China		291,323		1,583,539		-		1,874,862
Hong Kong		44,158		132,834		-		176,992
India		49,452		909,142		-		958,594
Indonesia		-		133,096		-		133,096
Malaysia		-		142,735		-		142,735
Mexico		147,081		-		-		147,081
Philippines		-		165,085		-		165,085
Republic of Korea		-		471,211		-		471,211
Russia		46,673		214,509		-		261,182
Saudi Arabia		40,121		-		-		40,121
Singapore		-		129,912		-		129,912
South Africa		45,718		166,654		-		212,372
Taiwan		51,243		799,238		-		850,481
Thailand		5,410		298,942		-		304,352
Turkey		-		41,727		-		41,727
United Arab Emirates		-		100,840		-		100,840
Foreign Preferred Stocks
Brazil		47,166		-		-		47,166
Republic of Korea		-		102,309		-		102,309
Foreign Warrants
Malaysia		1,758		-		-		1,758
Short-Term Investments		469,454		-		-		469,454
Securities Lending Collateral		38,556		-		-		38,556
Total Investments in Securities - Assets	$	1,610,711	$	5,391,773	$	-	$	7,002,484

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended January 31, 2020, there were no transfers into or out of Level 3.

13

American Beacon Continuous Capital Emerging Markets Fund^SM

Statement of Assets and Liabilities

January 31, 2020

Assets:
Investments in unaffiliated securities, at fair value†§	$	6,494,474
Investments in affiliated securities, at fair value‡		508,010
Foreign currency, at fair value^		147,184
Cash due from broker		6,265
Dividends and interest receivable		5,817
Receivable for investments sold		67,468
Receivable for fund shares sold		59,468
Receivable for tax reclaims		91
Prepaid expenses		27,160
Total assets		7,315,937
Liabilities:
Payable for investments purchased		128,795
Payable for fund shares redeemed		16,262
Payable for expense reimbursement (Note 2)		137,354
Management and sub-advisory fees payable (Note 2)		4,499
Service fees payable (Note 2)		64
Transfer agent fees payable (Note 2)		458
Payable upon return of securities loaned (Note 8)§		38,556
Custody and fund accounting fees payable		31,635
Professional fees payable		58,324
Trustee fees payable (Note 2)		26
Payable for prospectus and shareholder reports		3,243
Other liabilities		380
Total liabilities		419,596
Net assets	$	6,896,341
Analysis of net assets:
Paid-in-capital	$	6,436,689
Total distributable earnings (deficits)A		459,652
Net assets	$	6,896,341
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		342,527
Y Class		241,939
Investor Class		17,070
Net assets:
Institutional Class	$	3,927,688
Y Class	$	2,773,744
Investor Class	$	194,909
Net asset value, offering and redemption price per share:
Institutional Class	$	11.47
Y Class	$	11.46
Investor Class	$	11.42
† Cost of investments in unaffiliated securities	$	5,976,929
‡ Cost of investments in affiliated securities	$	508,010
§ Fair value of securities on loan	$	36,825
^ Cost of foreign currency	$	147,260
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

14

American Beacon Continuous Capital Emerging Markets Fund^SM

Statement of Operations

For the year ended January 31, 2020

Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	173,179
Dividend income from affiliated securities (Note 7)		4,823
Income derived from securities lending (Note 8)		875
Total investment income		178,877
Expenses:
Management and sub-advisory fees (Note 2)		44,485
Transfer agent fees:
Institutional Class (Note 2)		227
Y Class (Note 2)		3,211
Investor Class		2,864
Custody and fund accounting fees		58,512
Professional fees		76,527
Registration fees and expenses		61,313
Service fees (Note 2):
Investor Class		205
Prospectus and shareholder report expenses		15,104
Trustee fees (Note 2)		209
Other expenses		5,086
Total expenses		267,743
Net fees waived and expenses (reimbursed) (Note 2)		(206,606	)
Net expenses		61,137
Net investment income		117,740
Realized and unrealized gain (loss) from investments:
Net realized (loss) from:
Investments in unaffiliated securitiesA		(57,001	)
Foreign currency transactions		(7,860	)
Change in net unrealized appreciation (depreciation) of:
Investments in unaffiliated securitiesB		295,670
Foreign currency transactions		(468	)
Net gain from investments		230,341
Net increase in net assets resulting from operations	$	348,081
† Foreign taxes	$	18,135
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

15

American Beacon Continuous Capital Emerging Markets Fund^SM

Statement of Changes in Net Assets

	Year Ended January 31, 2020			From December 17, 2018A to January 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	117,740		$	3,546
Net realized gain (loss) from investments in unaffiliated securities and foreign currency transactions		(64,861	)		6,102
Change in net unrealized appreciation of investments in unaffiliated securities and foreign currency transactions		295,202			234,436
Net increase in net assets resulting from operations		348,081			244,084
Distributions to shareholders:
Total retained earnings:
Institutional Class		(76,776	)		-
Y Class		(64,411	)		-
Investor Class		(3,856	)		-
Net distributions to shareholders		(145,043	)		-
Capital share transactions (Note 10):
Proceeds from sales of shares		3,523,891			208,462
Reinvestment of dividends and distributions		62,374			-
Cost of shares redeemed		(145,508	)		-
Net increase in net assets from capital share transactions		3,440,757			208,462
Net increase in net assets		3,643,795			452,546
Net assets:
Beginning of period		3,252,546			2,800,000	B
End of period	$	6,896,341		$	3,252,546
A Commencement of operations.
B Seed capital.

See accompanying notes

16

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon Continuous Capital Emerging Markets 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.

Recently Adopted 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, and has been adopted accordingly with no material impact 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 January 31, 2020, 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

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.

17

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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.

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 Fund’s Statement of Operations.

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.

18

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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 Continuous Capital LLC (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 $500 million	0.525	%
Next $500 million	0.50	%
Over $1 billion	0.475	%

The Management and Sub-Advisory Fees paid by the Fund for the year ended January 31, 2020 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.350	%	$	17,852
Sub-Advisor Fees		0.525	%		26,633
Total		0.875	%	$	44,485

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 January 31, 2020, the Manager received securities lending fees of $98 for the securities lending activities of the Fund.

Distribution Plans

The Fund has utilized a “defensive” Distribution Plan (the “Plan”) pursuant to which no separate fees may be charged to the Fund for distribution purposes. However, the Plan authorizes the use of management fees received by the Manager and/or the investment advisors hired by the Manager for distribution purposes. Under this

19

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

Plan, the Fund does not intend to compensate the Manager or any other party, either directly or indirectly, for the distribution of Fund shares from these fees.

Service Plans

The Investor Class has adopted a Service Plan (collectively, the “Plans”). The Plans authorize the payment to the Manager an annual fee up to 0.375% of the average daily net assets of the Investor Class. In addition, the Fund may reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries attributable to Y Class and Institutional Class. The Manager or other approved entities may spend such amounts on any activities or expenses primarily intended to result in or relate to the servicing of Y Class, Institutional Class and Investor Class including, but not limited to, payment of shareholder service fees and transfer agency or sub-transfer agency expenses. The fees will be payable monthly in arrears. The primary expenses expected to be incurred under the Plans are shareholder servicing, record keeping fees and servicing fees paid to financial intermediaries such as plan sponsors and broker-dealers.

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 January 31, 2020, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Continuous Capital Emerging Markets	$	1,623

As of January 31, 2020, 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
Continuous Capital Emerging Markets	$	187

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 January 31, 2020, 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
Continuous Capital Emerging Markets	$	247	$	37	$	284

20

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

Interfund Credit Facility

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“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 January 31, 2020, the 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 Fund to the extent that total operating expenses exceed the Fund’s expense cap. During the year ended January 31, 2020, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap
Fund	Class	2/1/2019 - 1/31/2020			Reimbursed Expenses		(Recouped) Expenses			Expiration of Reimbursed Expenses
Continuous Capital Emerging Markets	Institutional		1.15	%	$	199,142	$	(81,769	)		2022-2023
Continuous Capital Emerging Markets	Y		1.25	%		120,235		(39,330	)		2022-2023
Continuous Capital Emerging Markets	Investor		1.53	%		11,432		(3,104	)		2022-2023

Of these amounts, $137,354 was disclosed as a payable to the Manager on the Statement of Assets and Liabilities at January 31, 2020.

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 2022 and 2023. 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
Continuous Capital Emerging Markets	$	91,236	$	43,101	$	–		2021-2022

Concentration of Ownership

From time to time, the Fund 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

21

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

ownership of more than 5% of the Fund’s outstanding shares could have a material impact on the Fund. As of January 31, 2020, based on management’s evaluation of the shareholder account base, one account in the Fund have been identified as representing an affiliated significant ownership of approximately 43% of the Fund’s outstanding Institutional Class shares.

Trustee Fees and Expenses

Effective January 1, 2020, as compensation for their service to the American Beacon Funds Complex, including the Trust (collectively, the “Trusts”), each Trustee is compensated from the Trusts as follows: (1) an annual retainer of $120,000; (2) meeting attendance fee (for attendance in person or via teleconference) of (a) $12,000 for in person attendance, or $5,000 for telephonic attendance, by Board members for each regularly scheduled or special Board meeting, (b) $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, (c) $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee; and (d) $2,500 for attendance by Board members for each special telephonic Board meeting; and (3) 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. For her service as Board Chair, Ms. Cline receives an additional annual retainer of $50,000. Although she attends several committee meetings at each quarterly Board meeting, she receives only a single $2,500 fee each quarter for her attendance at those meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chair of the Nominating and Governance Committee receives an additional annual retainer of $15,000.

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.

22

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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.

23

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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

Common stocks, ETFs, and financial derivative instruments, such as futures contracts or options 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, Global Depositary Receipts, and Non-Voting Depositary Receipts

ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Global Depositary Receipts (“GDRs”) are in bearer form and traded in both the U.S. and European 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 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.

Foreign Securities

The Fund 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

24

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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 Fund’s rights as an investor.

Illiquid and Restricted Securities

Generally, an illiquid asset is an asset that the Fund reasonably expects 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, as determined pursuant to Rule 22e-4 under the Investment Company Act or as otherwise permitted or required by SEC rules and interpretations. 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.

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

25

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

that make a market in the Section 4(a)(2) securities, thus providing liquidity. Restricted securities outstanding during the year ended January 31, 2020 are disclosed in the Notes to the Schedule of Investments.

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.

Other Investment Company Securities and Other Exchange-Traded Products

The Fund at times may invest in shares of other investment companies, including money market funds and ETFs. 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.

5.  Principal Risks

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

China Investment Risk

Investing in securities of Chinese issuers, including A-Shares, involves certain risks and considerations not typically associated with investing in securities of U.S. issuers, including, among others, more frequent trading suspensions and government interventions (including by nationalization of assets), currency exchange rate fluctuations or blockages, limits on the use of brokers and on foreign ownership, different financial reporting standards, higher dependence on exports and international trade, potential for increased trade tariffs, embargoes and other trade limitations, and custody risks associated with programs used to access Chinese securities. Significant portions of the Chinese securities markets may become rapidly illiquid, as Chinese issuers have the ability to suspend the trading of their equity securities, and have shown a willingness to exercise that option in response to market volatility and other events.

Currency Risk

The Fund may have exposure to foreign currencies by making direct investments in non-U.S. currencies or in securities denominated in non-U.S. currencies, or by purchasing or selling forward currency exchange contracts in non-U.S. currencies. 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 the Fund’s 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 Fund’s investments in foreign currency denominated securities may reduce the returns of the Fund. Currency futures, forwards, options or swaps may not always work as intended, and in specific cases, the Fund 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 Fund may choose to not hedge its currency risks.

26

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

Equity Investments Risk

Equity securities are subject to market risk. The Fund’s investments in equity securities may include 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. 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) different 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.

High Portfolio Turnover Risk

Portfolio turnover is a measure of the Fund’s trading activity over a one-year period. A portfolio turnover rate of 100% would indicate that the Fund sold and replaced the entire value of its securities holdings during the period. High portfolio turnover could increase the Fund’s transaction costs because of increased broker commissions resulting from such transactions. These costs are not reflected in the Fund’s annual operating expenses or in the expense example, but they can have a negative impact on performance. Frequent trading by the Fund could also result in increased realized net capital gains, distributions of which are taxable to the Fund’s shareholders (including net short-term capital gain distributions, which are taxable to them as ordinary income).

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.

27

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

Market Disruption Risk

Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises and related geopolitical events have led, and in the future may continue to lead, to instability in world economies and markets generally. This instability has disrupted, and may continue to disrupt, U.S. and world economies and markets and adversely affect the value of your investment. Such market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Changes in value may be temporary or may last for extended periods. Although multiple asset classes have been and may continue to be affected by a market disruption, the duration and effects may not be the same for all types of assets. Events that have led to market disruptions include the recent pandemic spread of the novel coronavirus known as COVID-19, which has resulted in travel restrictions, closed international borders, quarantines, disruptions to supply chains and lower consumer demand. The duration and full effects of these market disruptions are still uncertain. The effect of recent efforts undertaken by the Federal Reserve System to address the economic impact of the COVID-19 pandemic, such as the reduction of the federal funds target rate, and other monetary and fiscal actions that may be taken by the U.S. federal government to stimulate the U.S. economy, are not yet known. In addition, COVID-19 could cause the need for employees and vendors at various businesses, including the Manager, the sub-advisor(s) or other service providers, to work at external locations, and extensive medical absences. Because a large epidemic may create significant market and business uncertainties and disruptions, not all events that could affect the business of the Manager, the sub-advisor(s) or other service providers can be determined and addressed in advance.

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 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 reduced the federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent

28

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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 timing and the resulting impact of the United Kingdom’s departure from 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

Frequent trading by Fund shareholders poses risks to other shareholders in that Fund, including (i) the dilution of the Fund’s NAV, (ii) an increase in the Fund’s expenses, and (iii) interference with the portfolio manager’s ability to execute efficient investment strategies. Because of specific types of securities in which the Fund may invest, it could be subject to the risk of market timing activities by shareholders.

Other Investment Companies Risk

The Fund may invest in shares of other registered investment companies, including money market funds and 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 direct fees and expenses and will be subject to the risks associated with investments in those companies. For example, the Fund 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 investment may decline, adversely affecting the Fund 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 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.

29

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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”.

Valuation Risk

This is the risk that the 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, the Fund may value these investments using more subjective methods, such as fair-value methodologies. Investors who purchase or redeem Fund shares on days when the 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 the Fund determines its NAV. A 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.

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, January 31, 2020.

	Remaining Contractual Maturity of the Agreements As of January 31, 2020
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	38,556	$	-	$	-	$	-	$	38,556
Total Borrowings	$	38,556	$	-	$	-	$	-	$	38,556
Gross amount of recognized liabilities for securities lending transactions									$	38,556

30

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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 two year period ended January 31, 2020 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 Fund also utilizes earnings and profits distributed to shareholders on redemptions of shares as part of the dividends paid deduction.

The tax character of distributions paid were as follows:

	Year Ended January 31, 2020		Year Ended January 31, 2019
Distributions paid from:
Ordinary income*
Institutional Class	$	76,776	$
Y Class		64,411		-
Investor Class		3,856		-
Long-term capital gains
Institutional Class		-		-
Y Class		-		-
Investor Class		-		-
Total distributions paid	$	145,043	$	-

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

As of January 31, 2020, the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Continuous Capital Emerging Markets	$	6,513,406	$	697,704	$	(208,860	)	$	488,844

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences		Distributable Earnings
Continuous Capital Emerging Markets	$	488,844	$	27,389	$	-	$	(69,111	)	$	12,530	$	459,652

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

31

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

instruments, unused capital losses, and the realization for tax purposes of unrealized gains (losses) on investments in 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 Statement of Assets and Liabilities.

Accordingly, the following amounts represent current year permanent differences derived from unrealized foreign capital gains tax as of January 31, 2020:

Fund	Paid-In-Capital			Distributable Earnings/(Deficits)
Continuous Capital Emerging Markets	$	(12,530	)	$	12,530

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 January 31, 2020, the Fund had the following post RIC MOD capital loss carryforwards:

Fund	Short-Term Capital Loss Carryforwards		Long-Term Capital Loss Carryforwards
Continuous Capital Emerging Markets	$	69,111	$	-

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 January 31, 2020 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
Continuous Capital Emerging Markets	$	8,913,196	$	5,825,798

A summary of the Fund’s transactions in the USG Select Fund for the year ended January 31, 2020 were as follows:

Fund	Type of Transaction	January 31, 2019 Shares/Fair Value		Purchases		Sales		January 31, 2020 Shares/Fair Value		Dividend Income
Continuous Capital Emerging Markets	Direct	$	118,300	$	6,014,844	$	5,663,690	$	469,454	$	4,823
Continuous Capital Emerging Markets	Securities Lending		-		1,439,554		1,400,998		38,556		N/A

8.  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.

32

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020, 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
Continuous Capital Emerging Markets	$	36,825	$	38,556	$	403	$	38,959

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.

9.  Borrowing Arrangements

Effective November 14, 2019 (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 12, 2020, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement.

33

American Beacon Continuous Capital Emerging Markets Fund^SM

Notes to Financial Statements

January 31, 2020

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 12, 2020 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 January 31, 2020, the Fund did not utilize this facility.

10.  Capital Share Transactions

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

	Institutional Class
	Year Ended January 31, 2020						December 17, 2018A to January 31, 2019
Continuous Capital Emerging Markets Fund	Shares			Amount			Shares			Amount
Shares sold		85,070		$	1,004,856			140	B	$	-	B
Reinvestment of dividends		1			9			-			-
Shares redeemed		(2,684	)		(31,263	)		-			-
Net increase in shares outstanding		82,387		$	973,602			140		$	-
	Y Class
	Year Ended January 31, 2020						December 17, 2018A to January 31, 2019
Continuous Capital Emerging Markets Fund	Shares			Amount			Shares			Amount
Shares sold		209,149		$	2,350,101			18,956	B	$	199,985	B
Reinvestment of dividends		5,303			61,460			-			-
Shares redeemed		(1,469	)		(17,023	)		-			-
Net increase in shares outstanding		212,983		$	2,394,538			18,956		$	199,985
	Investor Class
	Year Ended January 31, 2020						December 17, 2018A to January 31, 2019
Continuous Capital Emerging Markets Fund	Shares			Amount			Shares			Amount
Shares sold		14,775		$	168,934			798	B	$	8,477	B
Reinvestment of dividends		78			905			-			-
Shares redeemed		(8,581	)		(97,222	)		-			-
Net increase in shares outstanding		6,272		$	72,617			798		$	8,477

^A Commencement of operations.

^B Total seed capital was received in the amounts of $2,600,000, $100,000, and $100,000 for the Institutional, Y, and Investor Classes, respectively. As a result, shares were issued in the total amounts of 260,000, 10,000, and 10,000 for Institutional, Y, and Investor Classes, respectively.

11.  Subsequent Events

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a virus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations and individual issuers, all of which may negatively impact the Funds performance. Management’s evaluation is ongoing and the financial landscape continues to change.

34

American Beacon Continuous Capital Emerging Markets Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31, 2020			December 17, 2018A to January 31, 2019
Net asset value, beginning of period	$	10.85		$	10.00
Income from investment operations:
Net investment income		0.27			0.01	B
Net gains on investments (both realized and unrealized)		0.65			0.84
Total income from investment operations		0.92			0.85
Less distributions:
Dividends from net investment income		(0.27	)		-
Distributions from net realized gains		(0.03	)		-
Total distributions		(0.30	)		-
Net asset value, end of period	$	11.47		$	10.85
Total returnC		8.40	%		8.50	%D
Ratios and supplemental data:
Net assets, end of period	$	3,927,688		$	2,821,409
Ratios to average net assets:
Expenses, before reimbursements		5.15	%		39.68	%E
Expenses, net of reimbursements		1.15	%		1.15	%E
Net investment (loss), before expense reimbursements		(1.61	)%		(37.54	)%E
Net investment income, net of reimbursements		2.39	%		0.99	%E
Portfolio turnover rate		116	%		24	%F

^A  Commencement of operations.

^B  Net investment income includes a significant dividend payment from Gazprom Neft PJSC, ADR and iShares Core MSCI Emerging Markets ETF amounting to $0.0057.

^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 December 17, 2018 through January 31, 2019 and is not annualized.

See accompanying notes

35

American Beacon Continuous Capital Emerging Markets Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended January 31, 2020			December 17, 2018A to January 31, 2019
Net asset value, beginning of period	$	10.85		$	10.00
Income from investment operations:
Net investment income		0.20			0.01	B
Net gains on investments (both realized and unrealized)		0.71			0.84
Total income from investment operations		0.91			0.85
Less distributions:
Dividends from net investment income		(0.27	)		-
Distributions from net realized gains		(0.03	)		-
Total distributions		(0.30	)		-
Net asset value, end of period	$	11.46		$	10.85
Total returnC		8.31	%		8.50	%D
Ratios and supplemental data:
Net assets, end of period	$	2,773,744		$	314,086
Ratios to average net assets:
Expenses, before reimbursements		5.31	%		44.25	%E
Expenses, net of reimbursementsF		1.26	%		1.25	%E
Net investment (loss), before expense reimbursements		(1.79	)%		(41.28	)%E
Net investment income, net of reimbursements		2.26	%		1.72	%E
Portfolio turnover rate		116	%		24	%G

^A  Commencement of operations.

^B  Net investment income includes a significant dividend payment from Gazprom Neft PJSC, ADR and iShares Core MSCI Emerging Markets ETF amounting to $0.0031.

^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  Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses, which are not reimbursable under the agreement with the Manager.

^G  Portfolio turnover rate is for the period from December 17, 2018 through January 31, 2019 and is not annualized.

See accompanying notes

36

American Beacon Continuous Capital Emerging Markets Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31, 2020			December 17, 2018A to January 31, 2019
Net asset value, beginning of period	$	10.84		$	10.00
Income from investment operations:
Net investment income		0.21			0.01	B
Net gains on investments (both realized and unrealized)		0.67			0.83
Total income from investment operations		0.88			0.84
Less distributions:
Dividends from net investment income		(0.27	)		-
Distributions from net realized gains		(0.03	)		-
Total distributions		(0.30	)		-
Net asset value, end of period	$	11.42		$	10.84
Total returnC		8.04	%		8.40	%D
Ratios and supplemental data:
Net assets, end of period	$	194,909		$	117,051
Ratios to average net assets:
Expenses, before reimbursements		7.25	%		39.63	%E
Expenses, net of reimbursements		1.53	%		1.53	%E
Net investment (loss), before expense reimbursements		(3.99	)%		(37.17	)%E
Net investment income, net of reimbursements		1.73	%		0.93	%E
Portfolio turnover rate		116	%		24	%F

^A  Commencement of operations.

^B  Net investment income includes a significant dividend payment from Gazprom Neft PJSC, ADR and iShares Core MSCI Emerging Markets ETF amounting to $0.0010.

^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 December 17, 2018 through January 31, 2019 and is not annualized.

See accompanying notes

37

American Beacon Continuous Capital Emerging Markets Fund^SM

Federal Tax Information

January 31, 2020 (Unaudited)

Certain tax information regarding the Fund is required to be provided to shareholders based upon the Fund’s income and distributions for the taxable year ended January 31, 2020. 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 January 31, 2020. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends-Received Deduction:

Continuous Capital Emerging Markets 0.13 % 

Qualified Dividend Income:

Continuous Capital Emerging Markets 74.30 % 

Long-Term Capital Gain Distributions:

Continuous Capital Emerging Markets $ -

Short-Term Capital Gain Distributions:

Continuous Capital Emerging Markets $ 13,092

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

38

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, and the American Beacon Apollo Total Return 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
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (50)	Trustee since 2015	President, SJVIIF, LLC, Impact Investment Fund (2018-Present); Director, Kura MD, Inc. (local telehealth organization) (2015-2017); Senior Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Senior 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, Valley Healthcare Staffing (2017-2018); 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).
Joseph B. Armes (57)	Trustee since 2015	Director, Switchback Energy Acquisition (2019-Present); 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) (2013-2018); 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).
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).
Brenda A. Cline (59)	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 (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).

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*
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); 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).
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).
Douglas A. Lindgren (58)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Consultant, Carne Financial Services (2017-2019); 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).
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.
R. Gerald Turner (74)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-2019); 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).

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	Term
	One Year
Gene L. Needles, Jr. (65)	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); Director, Green Harvest Asset Management (2019-Present); Director, National Investment Services of America, LLC (2019-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).
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, Green Harvest Asset Management (2019-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).

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
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).
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).
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).
Melinda G. Heika (58)	Principal Accounting Officer since 2017 and 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, Green Harvest Asset Management (2019-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).
Terri L. McKinney (56)	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).

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, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present); Director, National Investment Services of America, LLC (2019-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).
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).
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).

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 (63)	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).
Shelley D. Abrahams (45)	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);
Rebecca L. Harris (53)	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).
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); .
Peter A. Davidson (47)**	Assistant Secretary Since 2020	Assistant Secretary, American Beacon Select Funds (2020-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2020-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2020-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2020-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 75.

** Mr. Davidson was elected at the March 3, 2020 meeting of the Board.

44

American Beacon Funds^SM

Privacy Policy

January 31, 2020 (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.

45

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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 end of each 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 American Beacon Continuous Capital Emerging Markets Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately sixty days after the end of each quarter.	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 PricewaterhouseCoopers LLP Boston, Massachusetts 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 Continuous Capital Emerging Markets Fund are service marks of American Beacon Advisors, Inc.

AR 01/20

About American Beacon Advisors

Since 1986, American Beacon Advisors, Inc. 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.

CRESCENT SHORT DURATION HIGH INCOME FUND

The Fund’s investments in high-yield securities, including loans, restricted securities and floating rate securities are subject to greater levels of credit, interest rate, market and liquidity risks than investment-grade securities. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. 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 January 31, 2020

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	5
Report of Independent Registered Public Accounting Firm	7
Schedule of Investments:
American Beacon Crescent Short Duration High Income Fund	8
Financial Statements	26
Notes to Financial Statements	29
Financial Highlights:
American Beacon Crescent Short Duration High Income Fund	50
Federal Tax Information	53
Trustees and Officers of the American Beacon Funds	54
Privacy Policy	60

Additional Fund Information Back Cover

President’s Message

Dear Shareholders, During the 12 months of this reporting period, news reports highlighted multiple disruptive headwinds in the global economy; among them the U.S. trade war with China and its toll on the global economy, Brexit, disruptions in the Middle East and protests in Hong Kong. And although the headlines seemed to be just starting during the period addressed in this report, it’s now undeniable that the global spread of the COVID-19 virus is having an overwhelming effect on the world’s markets, the full impact of which is unknown at this time. 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

High Yield Bond Market Overview

January 31, 2020 (Unaudited)

The High Yield and Bank Loan segments of the bond market produced strong results during the 12-month period ended January 31, 2020. High-yield bonds (as represented by the ICE BofA U.S. High Yield Index) returned 9.4% and bank loans (as represented by the S&P LSTA Leveraged Loan Total Return Index) returned 6.5%.

The period began on the heels of a steep market selloff in late 2018, sending investors to the sidelines. The Federal Reserve Bank quickly signaled an end to interest rate hikes and eventually cut interest rates in July 2019. The market recovery, beginning in the final days of 2018, continued through mid-2019 and recouped almost all of the losses.

As markets calmed, U.S. President Donald Trump turned his attention to trade relations with China, among other countries, and put markets on a roller coaster through the fall of 2019. Trade negotiations oscillated between hot and cold, and markets ebbed and flowed in unison. Additionally, chronic uncertainty surrounding Brexit led to volatility as prospects of a disruptive exit concerned global trading partners. With the president’s re-election campaign in sight, the U.S. and China negotiated “phase one” of a larger trade deal in late 2019, giving investors confidence to push U.S. equity markets to all-time highs and bond yields to historic lows.

While the market for risk assets was strong overall, the Bank Loan segment experienced pockets of weakness due to technicalities within collateralized loan obligations. The lowest-rated bank loans underperformed as investors sold and moved into higher-rated issues. The High Yield segment enjoyed spread tightening and declining yields, while floating-rate bank loans were hurt by wider spreads and lower coupons. Thus, the High Yield segment outperformed the Bank Loan segment by more than 3% for the 12-month period.

By the end of the period, the Bank Loan segment began to improve and the outlook was generally positive. However, news headlines about China’s COVID-19 virus epidemic quickly seized investor attention. To help contain its spread, the Chinese New Year holiday was extended, markets were closed and travel within China was severely restricted. International equity markets began to weaken and, just as the period ended on January 31, 2020, the three-month and 10-year U.S. Treasury yields inverted amid renewed investor concern.

2

American Beacon Crescent Short Duration High Income Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

The Investor Class of the American Beacon Crescent Short Duration High Income Fund (the “Fund”) returned 6.64% for the one-year period ended January 31, 2020, underperforming the ICE BofA U.S. High Yield Cash Pay BB-B 1-5 Year Index (the “Index”) return of 7.42%. For additional comparison, the ICE BofA U.S. High Yield Index returned 9.39% and the S&P LSTA Leveraged Loan Total Return Index returned 6.54%.

Comparison of Change in Value of a $10,000 Investment for the period from 10/1/2014 through 1/31/2020

Total Returns for the Period ended January 31, 2020
	Ticker	1 Year			3 Years			5 Years			Since Inception (10/01/2014)			Value of $10,000 10/01/2014- 1/31/2019
Institutional Class (1,3)	ACHIX		7.15	%		4.03	%		4.35	%		3.75	%		$	12,167
Y Class (1,3)	ACHYX		7.04	%		3.93	%		4.23	%		3.63	%		$	12,094
Investor Class (1,3)	ACHPX		6.64	%		3.62	%		3.95	%		3.35	%		$	11,922
A without Sales Charge (1,3)	ACHAX		6.71	%		3.55	%		3.87	%		3.28	%		$	11,878
A with Sales Charge (1,3)	ACHAX		4.10	%		2.67	%		3.35	%		2.78	%		$	11,577
C without Sales Charge (1,3)	ACHCX		5.91	%		2.86	%		3.15	%		2.56	%		$	11,441
C with Sales Charge (1,3)	ACHCX		4.91	%		2.86	%		3.15	%		2.56	%		$	11,441
ICE BofA U.S. High Yield Cash Pay BB-B 1-5 Year Index			7.42	%		5.34	%		5.08	%		4.70	%		$	12,780

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. A Class shares have a maximum sales charge of 2.50%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

2. The ICE BofA U.S. High Yield Cash Pay BB-B 1-5 Year Index is an unmanaged index that generally tracks the performance of BB-B rated U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market with maturities of 1 to 5 years. One cannot directly invest in an index.

3. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A and C Class shares were 1.09%, 1.15%, 2.32%, 1.40% and 2.18%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

3

American Beacon Crescent Short Duration High Income Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

Fixed-rate securities outperformed floating rate as the Federal Reserve Bank (the “Fed”) cut interest rates for the first time in over 10 years and bond market yields declined. The Fund benefited from its exposure to fixed-rate high-yield; however, its allocation to floating-rate bank loans lagged given their shorter duration. Note that the Fund’s Index includes only fixed-rate securities. On average, the Fund’s duration was approximately 1.9 years during the period, as compared to 2.1 years for the Index.

The Fund’s sub-advisor actively allocates among traditional fixed-rate high-yield, floating-rate bank loan and private debt sectors of the bond market seeking attractive risk-adjusted returns with lower volatility than the market. This flexibility also allows for opportunity to invest in securities outside of the traditional indexes. On average during the period, the Fund held approximately 70% of assets in traditional high-yield bonds, 18% in floating-rate bank loans and 9% in private debt, with the remainder in cash. Overall, the Fund’s holdings were highly diversified with over 400 positions in total.

Given the Fed’s abrupt change in outlook for interest rates in early 2019, the Fund began to modify its approach toward the credit markets by screening for higher quality securities and by monitoring the relative yield between fixed and floating-rate instruments given the potential for even lower rates going forward.

Top Ten Holdings (% Net Assets)
CCO Holdings LLC / CCO Holdings Capital Corp., 5.375%, Due 5/1/2025		1.6
Navient Corp., 6.125%, Due 3/25/2024		1.5
Tenet Healthcare Corp., 6.250%, Due 2/1/2027		1.5
Dell International LLC / EMC Corp., 7.125%, Due 6/15/2024		1.0
DISH DBS Corp., 5.875%, Due 11/15/2024		1.0
Freeport-McMoRan, Inc., 5.000%, Due 9/1/2027		1.0
Sprint Corp., 7.250%, Due 9/15/2021		1.0
Icahn Enterprises LP / Icahn Enterprises Finance Corp., 6.375%, Due 12/15/2025		0.9
Mauser Packaging Solutions Holding Co., 7.250%, Due 4/15/2025		0.9
Springleaf Finance Corp., 7.125%, Due 3/15/2026		0.9
Total Fund Holdings	440
Sector Allocation (% Investments)
Communications		22.3
Consumer, Non-Cyclical		17.4
Consumer, Cyclical		15.4
Financial		15.2
Industrial		11.4
Energy		9.8
Technology		3.8
Basic Materials		3.2
Utilities		1.3
Diversified		0.2

4

American Beacon Crescent Short Duration High Income Fund^SM

Expense Examples

January 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 August 1, 2019 through January 31, 2020.

Actual Expenses

The “Actual” lines of 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” 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 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 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 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 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 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.

5

American Beacon Crescent Short Duration High Income Fund^SM

Expense Examples

January 31, 2020 (Unaudited)

American Beacon Crescent Short Duration High Income Fund
	Beginning Account Value 8/1/2019		Ending Account Value 1/31/2020		Expenses Paid During Period 8/1/2019-1/31/2020*
Institutional Class
Actual		$1,000.00		$1,028.80		$4.35
Hypothetical**		$1,000.00		$1,020.92		$4.33
Y Class
Actual		$1,000.00		$1,027.20		$4.85
Hypothetical**		$1,000.00		$1,020.42		$4.84
Investor Class
Actual		$1,000.00		$1,025.70		$6.28
Hypothetical**		$1,000.00		$1,019.01		$6.26
A Class
Actual		$1,000.00		$1,025.60		$6.38
Hypothetical**		$1,000.00		$1,018.90		$6.36
C Class
Actual		$1,000.00		$1,022.70		$10.20
Hypothetical**		$1,000.00		$1,015.12		$10.16

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.85%, 0.95%, 1.23%, 1.25%, and 2.00% for the Institutional, Y, Investor, A, and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

6

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of American Beacon Funds and the Shareholders of American Beacon Crescent Short Duration High Income Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of American Beacon Crescent Short Duration High Income Fund (one of the series constituting American Beacon Funds, referred to hereafter as the “Fund”) as of January 31, 2020, the related statement of operations for the year ended January 31, 2020, the statement of changes in net assets for each of the two years in the period ended January 31, 2020, including the related notes, and the financial highlights for each of the five years in the period ended January 31, 2020 (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 as of January 31, 2020, 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 ended January 31, 2020 and the financial highlights for each of the five years in the period ended January 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Fund as of and for the year ended January 31, 2016 and the financial highlights for each of the periods ended on or prior to January 31, 2016 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated March 31, 2016 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund’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 Fund 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 of these financial statements 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.

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 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. Our procedures included confirmation of securities owned as of January 31, 2020 by correspondence with the custodian, transfer agent, agent banks and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Dallas, TX

March 30, 2020

We have served as the auditor of one or more investment companies in the American Beacon family of funds since 2016.

7

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Shares			Fair Value
COMMON STOCKS - 0.01% (Cost $4,615)
Energy - 0.01%
Oil, Gas & Consumable Fuels - 0.01%
Jones Energy, Inc.A			355		$	4,615
WARRANTS - 0.00% (Cost $—)
Energy - 0.00%
Jones Energy, Inc., 5/17/2024, Strike Price $31.67A			1,570			212
	Principal Amount
BANK LOAN OBLIGATIONSB - 25.04%
Basic Materials - 0.82%
Chemicals - 0.80%
GrafTech Finance, Inc., 5.145%, Due 2/12/2025, 2018 Term Loan B, (1-mo. LIBOR + 3.500%)		$	56,886			56,531
H.B. Fuller Co., 3.658%, Due 10/20/2024, 2017 Term Loan B, (1-mo. LIBOR + 2.000%)			88,826			88,856
Ineos US Finance LLC, 3.645%, Due 4/1/2024, 2017 USD Term Loan B, (1-mo. LIBOR + 2.000%)			62,312			62,208
Messer Industries GmbH, 4.445%, Due 3/1/2026, 2018 USD Term Loan, (3-mo. LIBOR + 2.500%)			99,499			99,499
Polar US Borrower LLC,
6.624%, Due 10/15/2025, 2018 1st Lien Term Loan, (3-mo. LIBOR + 4.750%)			24,201			24,049
6.695%, Due 10/15/2025, 2018 1st Lien Term Loan, (3-mo. LIBOR + 4.750%)			489			486
PQ Corp., 4.027%, Due 2/8/2025, 2018 Term Loan B, (3-mo. LIBOR + 2.250%)			78,207			78,221
Solenis Holdings LLC, 5.909%, Due 6/26/2025, 2018 1st Lien Term Loan, (3-mo. LIBOR + 4.000%)			52,364			51,955
Starfruit Finco B.V., 4.699%, Due 10/1/2025, 2018 USD Term Loan B, (1-mo. LIBOR + 3.000%)			101,769			101,642
						563,447
Mining - 0.02%
U.S. Silica Co., 5.688%, Due 5/1/2025, 2018 Term Loan B, (1-mo. LIBOR + 4.000%)			13,000			11,440
Total Basic Materials						574,887
Communications - 3.92%
Advertising - 0.36%
Red Ventures LLC, 4.161%, Due 11/8/2024, 2018 Term Loan B, (1-mo. LIBOR + 2.500%)			121,301			121,215
Terrier Media Buyer, Inc., 6.148%, Due 12/17/2026, Term Loan B, (3-mo. LIBOR + 4.250%)			100,000			100,725
Vestcom Parent Holdings, Inc., 5.646%, Due 12/19/2023, 2016 1st Lien Term Loan, (1-mo. LIBOR + 4.000%)			32,417			30,796
						252,736
Internet - 1.14%
Buzz Merger Sub Ltd, Due 1/22/2027, Term Loan BC			100,000			100,188
CareerBuilder LLC, 8.395%, Due 7/31/2023, Term Loan, (3-mo. LIBOR + 6.750%)			137,753			136,720
Go Daddy Operating Co. LLC, 3.395%, Due 2/15/2024, 2017 Repriced Term Loan, (1-mo. LIBOR + 1.750%)			92,684			92,800
MH Sub I LLC, 5.395%, Due 9/13/2024, 2017 1st Lien Term Loan, (1-mo. LIBOR + 3.750%)			130,127			129,964
PUG LLC, Due 1/29/2027, USD Term LoanC			100,000			99,500
Rentpath, Inc., 6.660%, Due 12/17/2021, 2017 Term Loan, (3-mo. LIBOR + 4.750%)			56,382			27,158
Titan AcquisitionCo New Zealand Ltd., 6.195%, Due 5/1/2026, Term Loan, (3-mo. LIBOR + 4.250%)			62,753			62,888
Web.com Group, Inc., Due 10/10/2025, 2018 Term Loan BC			60,000			59,903
WeddingWire, Inc., 6.145%, Due 12/19/2025, 1st Lien Term Loan, (1-mo. LIBOR + 4.500%)			99,000			99,000
						808,121
Media - 1.46%
Charter Communications Operating LLC, 3.400%, Due 4/30/2025, 2019 Term Loan B1, (1-mo. LIBOR + 1.750%)			99,492			99,943
CSC Holdings LLC, 4.176%, Due 4/15/2027, 2019 Term Loan B5, (3-mo. LIBOR + 2.500%)			187,248			187,658
Diamond Sports Group LLC, 4.910%, Due 8/24/2026, Term Loan, (1-mo. LIBOR + 3.250%)			136,658			136,444

See accompanying notes

8

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 25.04% (continued)
Communications - 3.92% (continued)
Media - 1.46% (continued)
E.W. Scripps Co., 4.145%, Due 5/1/2026, 2019 Term Loan B2, (1-mo. LIBOR + 2.500%)		$	62,843		$	63,141
Gray Television, Inc., 4.162%, Due 1/2/2026, 2018 Term Loan C, (1-mo. LIBOR + 2.500%)			84,964			85,283
iHeartCommunications, Inc., Due 5/1/2026, 2020 Term LoanC			28,000			28,021
ION Media Networks, Inc., 4.688%, Due 12/18/2024, 2019 Term Loan B, (1-mo. LIBOR + 3.000%)			96,496			96,576
Mission Broadcasting, Inc., 3.905%, Due 1/17/2024, 2018 Term Loan B3, (1-mo. LIBOR + 2.250%)			13,618			13,629
Nexstar Broadcasting, Inc., 3.900%, Due 1/17/2024, 2018 Term Loan B3, (1-mo. LIBOR + 2.250%)			66,899			66,950
Nielsen Finance LLC, 3.699%, Due 10/4/2023, USD Term Loan B4, (1-mo. LIBOR + 2.000%)			38,035			38,053
Sinclair Television Group, Inc.,
3.900%, Due 1/3/2024, Term Loan B2, (1-mo. LIBOR + 2.250%)			15,959			15,975
4.180%, Due 9/30/2026, Term Loan B2B, (3-mo. LIBOR + 2.500%)			70,823			71,044
Univision Communications, Inc., 4.395%, Due 3/15/2024, Term Loan C5, (1-mo. LIBOR + 2.750%)			48,973			48,355
Virgin Media Bristol LLC, 4.176%, Due 1/31/2028, USD Term Loan N, (3-mo. LIBOR + 2.500%)			81,000			80,980
						1,032,052
Telecommunications - 0.96%
Altice France S.A., 5.676%, Due 8/14/2026, 2018 Term Loan B13, (1-mo. LIBOR + 4.000%)			48,876			48,785
Avaya, Inc., 5.926%, Due 12/15/2024, 2018 Term Loan B, (1-mo. LIBOR + 4.250%)			71,129			69,544
CenturyLink, Inc., Due 3/15/2027, 2020 Term Loan BC			86,495			86,361
CommScope, Inc., 4.895%, Due 4/6/2026, 2019 Term Loan B, (1-mo. LIBOR + 3.250%)			99,750			99,583
GTT Communications, Inc., 4.400%, Due 5/31/2025, 2018 USD Term Loan B, (1-mo. LIBOR + 2.750%)			19,000			15,955
Intelsat Jackson Holdings S.A., 5.682%, Due 11/27/2023, 2017 Term Loan B3, (6-mo. LIBOR + 3.750%)			82,000			81,642
Plantronics, Inc., 4.145%, Due 7/2/2025, 2018 Term Loan B, (1-mo. LIBOR + 2.500%)			75,185			72,121
SBA Senior Finance LLC, 3.400%, Due 4/11/2025, 2018 Term Loan B, (1-mo. LIBOR + 1.750%)			99,235			99,298
Sprint Communications, Inc., 4.688%, Due 2/2/2024, 2018 Term Loan B, (1-mo. LIBOR + 3.000%)			91,080			89,771
Syniverse Holdings, Inc., 6.873%, Due 3/9/2023, 2018 1st Lien Term Loan, (6-mo. LIBOR + 5.000%)			17,000			15,512
						678,572
Total Communications						2,771,481
Consumer, Cyclical - 4.76%
Apparel - 0.51%
Next Level Apparel, Inc., 7.589%, Due 7/17/2024, 2018 Term Loan, (1 Week LIBOR + 6.000%)			186,822			184,019
SHO Holding Corp., 6.777%, Due 10/27/2022, Term Loan, (3-mo. LIBOR + 5.000%)			190,643			173,485
						357,504
Auto Parts & Equipment - 0.37%
Panther BF Aggregator LP, 5.160%, Due 4/30/2026, USD Term Loan B, (1-mo. LIBOR + 3.500%)			99,750			100,324
Wheel Pros LLC, 6.395%, Due 4/4/2025, 1st Lien Term Loan, (1-mo. LIBOR + 4.750%)			165,486			163,003
						263,327
Distribution/Wholesale - 0.27%
AMCP Clean Acquisition Co. LLC,
6.195%, Due 6/16/2025, 2018 Term Loan, (3-mo. LIBOR + 4.250%)			21,673			21,253
6.195%, Due 6/16/2025, 2018 Term Loan, (3-mo. LIBOR + 4.250%)			89,573			87,838
Univar, Inc., 3.895%, Due 7/1/2024, 2017 USD Term Loan B, (1-mo. LIBOR + 2.250%)			80,807			80,933
						190,024
Entertainment - 1.39%
Crown Finance US, Inc., 3.895%, Due 2/28/2025, 2018 USD Term Loan, (1-mo. LIBOR + 2.250%)			99,392			98,398

See accompanying notes

9

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 25.04% (continued)
Consumer, Cyclical - 4.76% (continued)
Entertainment - 1.39% (continued)
Motion Finco S.a.r.l.,
Due 11/4/2026, Delayed Draw Term Loan B2C		$	11,616		$	11,721
Due 11/13/2026, USD Term Loan B1C			88,384			89,179
NASCAR Holdings, Inc., 4.408%, Due 10/19/2026, Term Loan B, (1-mo. LIBOR + 2.750%)			113,234			113,942
PCI Gaming Authority, 4.145%, Due 5/29/2026, Term Loan, (1-mo. LIBOR + 2.500%)			92,923			93,306
Playtika Holding Corp., 7.645%, Due 12/10/2024, Term Loan B, (1-mo. LIBOR + 6.000%)			100,000			100,946
Scientific Games International, Inc., 4.395%, Due 8/14/2024, 2018 Term Loan B5, (1-mo. LIBOR + 2.750%)			65,208			64,980
Six Flags Theme Parks, Inc., 3.400%, Due 4/17/2026, 2019 Term Loan B, (1-mo. LIBOR + 1.750%)			99,500			99,583
UFC Holdings LLC, 4.900%, Due 4/29/2026, 2019 Term Loan, (1-mo. LIBOR + 3.250%)			61,190			61,333
World Triathlon Corp., 5.895%, Due 8/15/2026, 2019 Term Loan B, (1-mo. LIBOR + 4.250%)			249,375			249,998
						983,386
Home Furnishings - 0.32%
TGP Holdings LLC,
6.027%, Due 9/25/2024, 2018 1st Lien Term Loan, (3-mo. LIBOR + 4.250%)			191,275			180,755
10.277%, Due 9/25/2025, 2nd Lien Term Loan, (3-mo. LIBOR + 8.500%)			50,000			46,000
						226,755
Leisure Time - 0.42%
Playpower, Inc., 7.461%, Due 5/8/2026, 2019 Term Loan, (3-mo. LIBOR + 5.500%)			240,625			239,422
Varsity Brands, Inc., 5.145%, Due 12/15/2024, 2017 Term Loan B, (1-mo. LIBOR + 3.500%)			61,128			59,905
						299,327
Lodging - 0.31%
Boyd Gaming Corp., 3.835%, Due 9/15/2023, Term Loan B3, (1 Week LIBOR + 2.250%)			71,923			72,080
Caesars Resort Collection LLC, 4.395%, Due 12/23/2024, 2017 1st Lien Term Loan B, (1-mo. LIBOR + 2.750%)			63,388			63,323
Golden Nugget, Inc.,
Due 10/4/2023, 2020 Term LoanC			42,000			42,000
4.145%, Due 10/4/2023, 2017 Incremental Term Loan B, (1-mo. LIBOR + 2.500%)			20,756			20,784
4.158%, Due 10/4/2023, 2017 Incremental Term Loan B, (1-mo. LIBOR + 2.500%)			17,625			17,649
						215,836
Retail - 1.17%
Academy Ltd., 5.655%, Due 7/1/2022, 2015 Term Loan B, (1-mo. LIBOR + 4.000%)			26,450			21,141
B.C. Unlimited Liablity Co., 3.395%, Due 11/19/2026, Term Loan B4, (1-mo. LIBOR + 1.750%)			91,459			91,299
Bass Pro Group LLC, 6.645%, Due 9/25/2024, Term Loan B, (1-mo. LIBOR + 5.000%)			51,767			51,530
BJ’s Wholesale Club, Inc., 3.899%, Due 2/3/2024, 2017 1st Lien Term Loan, (1-mo. LIBOR + 2.250%)			67,763			68,009
California Pizza Kitchen, Inc.
7.910%, Due 8/23/2022, 2016 Term Loan, (3-mo. LIBOR + 6.000%)			241,875			206,370
11.910%, Due 8/23/2023, 2016 2nd Lien Term Loan, (3-mo. LIBOR + 10.000%)			42,000			33,810
GYP Holdings Corp., 4.395%, Due 6/1/2025, 2018 Term Loan B, (1-mo. LIBOR + 2.750%)			46,591			46,460
IRB Holding Corp., 4.384%, Due 2/5/2025, 1st Lien Term Loan, (1-mo. LIBOR + 2.750%)			122,813			122,982
Michaels Stores, Inc.,
4.150%, Due 1/30/2023, 2018 Term Loan B, (1-mo. LIBOR + 2.500%)			24,162			23,292
4.161%, Due 1/30/2023, 2018 Term Loan B, (1-mo. LIBOR + 2.500%)			8,745			8,430
Petco Animal Supplies, Inc., 5.027%, Due 1/26/2023, 2017 Term Loan B, (3-mo. LIBOR + 3.250%)			20,945			17,669
SRS Distribution, Inc., 4.895%, Due 5/23/2025, 2018 1st Lien Term Loan, (1-mo. LIBOR + 3.250%)			35,750			35,504
Staples, Inc., 6.655%, Due 4/16/2026, 7 Year Term Loan, (1-mo. LIBOR + 5.000%)			78,255			76,768
Whatabrands LLC, Due 8/2/2026, 2020 Term Loan BC			23,000			23,042
						826,306
Total Consumer, Cyclical						3,362,465

See accompanying notes

10

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 25.04% (continued)
Consumer, Non-Cyclical - 4.90%
Biotechnology - 0.02%
Alphabet Holding Co., Inc., 5.145%, Due 9/26/2024, 2017 1st Lien Term Loan, (1-mo. LIBOR + 3.500%)		$	15,000		$	14,282
Commercial Services - 1.94%
Boing US Holdco, Inc., 4.934%, Due 10/3/2024, 2017 1st Lien Term Loan, (1-mo. LIBOR + 3.250%)			33,956			33,334
CRCI Longhorn Holdings, Inc., 5.145%, Due 8/8/2025, 2018 1st Lien Term Loan, (1-mo. LIBOR + 3.500%)			27,668			27,392
Creative Artists Agency LLC, 5.395%, Due 11/27/2026, 2019 Term Loan B, (1-mo. LIBOR + 3.750%)			100,000			100,458
Digital Room Holdings, Inc., 6.645%, Due 5/21/2026, Term Loan, (1-mo. LIBOR + 5.000%)			74,625			70,272
Garda World Security Corp., 6.660%, Due 10/30/2026, 2019 1st Lien Term Loan B, (3-mo. LIBOR + 4.750%)			70,081			70,475
Maverick Purchaser Sub LLC, Due 1/22/2027, Term Loan BC			100,000			100,125
NorthRiver Midstream Finance LP, 5.159%, Due 10/1/2025, 2018 Term Loan B, (3-mo. LIBOR + 3.250%)			98,750			98,133
Parexel International Corp., 4.395%, Due 9/27/2024, Term Loan B, (1-mo. LIBOR + 2.750%)			67,266			66,215
Prime Security Services Borrower LLC, 4.912%, Due 9/23/2026, 2019 Term Loan B1, (1-mo. LIBOR + 3.250%)			103,800			103,800
R.R. Donnelley & Sons Co., 6.645%, Due 1/15/2024, 2018 Term Loan B, (1-mo. LIBOR + 5.000%)			49,376			49,761
Rent-A-Center, Inc., 6.250%, Due 7/31/2026, 2019 Term Loan, (1-mo. LIBOR + 4.500%)			99,750			99,501
Sabert Corp., 6.188%, Due 12/10/2026, Term Loan B, (1-mo. LIBOR + 4.500%)			100,000			100,625
Spin Holdco, Inc., 5.093%, Due 11/14/2022, 2017 Term Loan B, (3-mo. LIBOR + 3.250%)			33,396			33,294
TruGreen Ltd. Partnership, 5.395%, Due 3/19/2026, 2019 Term Loan, (1-mo. LIBOR + 3.750%)			28,570			28,642
United Rentals, Inc., 3.395%, Due 10/31/2025, Term Loan B, (1-mo. LIBOR + 1.750%)			98,750			99,138
Verscend Holding Corp., 6.145%, Due 8/27/2025, 2018 Term Loan B, (1-mo. LIBOR + 4.500%)			100,526			100,877
Wand NewCo 3, Inc., 4.645%, Due 2/5/2026, 2019 1st Lien Term Loan, (1-mo. LIBOR + 3.000%)			99,500			99,728
WEX, Inc., 3.895%, Due 5/15/2026, Term Loan B3, (1-mo. LIBOR + 2.250%)			90,803			91,087
						1,372,857
Food - 0.53%
Dhanani Group, Inc., 5.395%, Due 7/20/2025, 2018 Term Loan B, (1-mo. LIBOR + 3.750%)			44,743			44,109
Edward Don & Co. LLC, 5.895%, Due 7/2/2025, 2018 Term Loan, (1-mo. LIBOR + 4.250%)			146,892			144,689
Froneri International PLC, Due 1/29/2027, 2020 USD Term LoanC			100,000			100,250
United Natural Foods, Inc., 5.895%, Due 10/22/2025, Term Loan B, (1-mo. LIBOR + 4.250%)			99,000			88,481
						377,529
Health Care - Products - 0.57%
Agiliti Health, Inc., 4.688%, Due 1/4/2026, Term Loan, (1-mo. LIBOR + 3.000%)			39,451			39,401
Avalign Technologies, Inc., 6.262%, Due 12/22/2025, 2018 Term Loan B, (2-mo. LIBOR + 4.500%)			181,396			176,861
Avantor, Inc., 3.895%, Due 11/21/2024, 2017 1st Lien Term Loan, (1-mo. LIBOR + 2.250%)			27,262			27,410
Sotera Health Holdings LLC, 6.145%, Due 12/11/2026, 2019 Term Loan, (1-mo. LIBOR + 4.500%)			102,000			102,319
Viant Medical Holdings, Inc., 5.695%, Due 7/2/2025, 2018 1st Lien Term Loan, (3-mo. LIBOR + 3.750%)			57,333			56,229
						402,220
Health Care - Services - 1.45%
ADMI Corp., 4.395%, Due 4/30/2025, 2018 Term Loan B, (1-mo. LIBOR + 2.750%)			71,438			71,348
Air Methods Corp., Due 4/22/2024, 2017 Term Loan BC			14,000			12,005
ATI Holdings Acquisition, Inc., 5.145%, Due 5/10/2023, 2016 Term Loan, (1-mo. LIBOR + 3.500%)			62,548			61,981
Da Vinci Purchaser Corp., 5.872%, Due 1/8/2027, 2019 Term Loan, (3-mo. LIBOR + 4.000%)			100,000			100,563
Envision Healthcare Corp.,
5.395%, Due 10/10/2025, 2018 1st Lien Term Loan, (1-mo. LIBOR + 3.750%)			84,515			70,881
4.938%, Due 7/2/2025, 2020 Term Loan, (1-mo. LIBOR + 3.250%)			99,496			99,745

See accompanying notes

11

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 25.04% (continued)
Consumer, Non-Cyclical - 4.90% (continued)
Health Care - Services - 1.45% (continued)
National Mentor Holdings, Inc.,
5.650%, Due 3/9/2026, 2019 Term Loan B, (1-mo. LIBOR + 4.000%)		$	93,446		$	93,746
5.650%, Due 3/9/2026, 2019 Term Loan C, (1-mo. LIBOR + 4.000%)			5,848			5,867
NMSC Holdings, Inc., 6.645%, Due 4/19/2023, 1st Lien Term Loan, (1-mo. LIBOR + 5.000%)			249,354			247,484
RegionalCare Hospital Partners Holdings, Inc., 5.395%, Due 11/17/2025, 2018 Term Loan B, (1-mo. LIBOR + 3.750%)			88,504			88,826
Team Health Holdings, Inc., 4.395%, Due 2/6/2024, 1st Lien Term Loan, (1-mo. LIBOR + 2.750%)			30,000			23,925
Universal Health Services, Inc., 3.395%, Due 10/31/2025, Term Loan B, (1-mo. LIBOR + 1.750%)			49,376			49,705
Upstream Rehabilition, Inc., 6.145%, Due 11/20/2026, 2019 Term Loan, (1-mo. LIBOR + 4.500%)			100,000			100,250
						1,026,326
Leisure Time - 0.02%
ClubCorp Holdings, Inc., 4.695%, Due 9/18/2024, 2017 Term Loan B, (3-mo. LIBOR + 2.750%)			13,000			12,318
Pharmaceuticals - 0.37%
Amneal Pharmaceuticals LLC, 5.188%, Due 5/4/2025, 2018 Term Loan B, (1-mo. LIBOR + 3.500%)			66,495			60,622
Bausch Health Cos., Inc., 4.670%, Due 6/2/2025, 2018 Term Loan B, (1-mo. LIBOR + 3.000%)			83,387			83,679
Endo Luxembourg Finance Co. S.a r.l., 5.938%, Due 4/29/2024, 2017 Term Loan B, (1-mo. LIBOR + 4.250%)			72,130			69,425
Grifols Worldwide Operations USA, Inc., 3.561%, Due 11/15/2027, USD 2019 Term Loan B, (1 Week LIBOR + 2.000%)			9,461			9,505
Mallinckrodt International Finance S.A., 4.695%, Due 9/24/2024, USD Term Loan B, (3-mo. LIBOR + 2.750%)			34,381			28,717
NVA Holdings, Inc., 7.250%, Due 2/2/2025, Term Loan B4, (3-mo. PRIME + 2.500%)			6,050			6,046
						257,994
Total Consumer, Non-Cyclical						3,463,526
Diversified - 0.25%
Holding Companies - Diversified - 0.25%
Quidditch Acquisition, Inc., 8.645%, Due 3/21/2025, 2018 Term Loan B, (1-mo. LIBOR + 7.000%)			157,822			159,400
Travelport Finance S.a.r.l., Due 5/29/2026, 2019 Term LoanC			19,000			17,081
						176,481
Total Diversified						176,481
Energy - 0.39%
Oil & Gas - 0.00%
Energy & Exploration Partners, Inc., 5.000%, Due 5/13/2022, 2016 2nd Lien PIK, (in-kind rate 5.000%) Term Loan, (12-mo. LIBOR + 5.000%)D			7,171			-
						-
Pipelines - 0.39%
BCP Raptor LLC, 5.895%, Due 6/24/2024, Term Loan B, (1-mo. LIBOR + 4.250%)			13,000			11,856
Blackstone CQP Holdco LP, 5.408%, Due 9/30/2024, Term Loan B, (3-mo. LIBOR + 3.500%)			109,872			109,781
Lucid Energy Group Borrower LLC, 4.645%, Due 2/17/2025, 2018 1st Lien Term Loan, (1-mo. LIBOR + 3.000%)			64,111			59,744
Prairie ECI Acquiror LP, 6.695%, Due 3/11/2026, Term Loan B, (3-mo. LIBOR + 4.750%)			97,744			96,603
						277,984
Total Energy						277,984

See accompanying notes

12

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 25.04% (continued)
Financial - 4.36%
Diversified Financial Services - 1.81%
Avolon TLB Borrower LLC, 3.408%, Due 1/15/2025, Term Loan B3, (1-mo. LIBOR + 1.750%)		$	92,340		$	92,661
Citadel Securities LP, 5.145%, Due 2/27/2026, Term Loan B, (1-mo. LIBOR + 3.500%)			99,499			99,686
Franklin Square Holdings LP, 3.938%, Due 8/1/2025, 2018 Term Loan B, (1-mo. LIBOR + 2.250%)			98,750			99,059
GGC Aperio Holdings LP, 6.945%, Due 10/25/2024, Term Loan, (3-mo. LIBOR + 5.000%)D			163,431			163,153
Jane Street Group LLC, 4.645%, Due 8/25/2022, 2018 Term Loan B, (1-mo. LIBOR + 3.000%)			99,496			99,435
Jefferies Finance LLC, 4.938%, Due 6/3/2026, 2019 Term Loan, (1-mo. LIBOR + 3.250%)			99,500			99,282
Kestra Advisor Services Holdings, Inc., 6.200%, Due 6/3/2026, 2019 Term Loan, (1-mo. LIBOR + 4.250%)			149,508			148,884
LPL Holdings, Inc., 3.411%, Due 11/12/2026, 2019 Term Loan B1, (1-mo. LIBOR + 1.750%)			59,234			59,345
Nuvei Technologies Corp., 6.645%, Due 9/29/2025, USD Term Loan, (1-mo. LIBOR + 5.000%)			117,011			117,304
StepStone Group LP, 5.762%, Due 3/27/2025, Term Loan B, (2-mo. LIBOR + 4.000%)			202,511			202,511
VFH Parent LLC, 5.263%, Due 3/1/2026, 2019 Term Loan B, (1-mo. LIBOR + 3.500%)			94,219			94,514
						1,275,834
Insurance - 0.54%
Acrisure LLC, 6.195%, Due 11/22/2023, 2017 Term Loan B, (3-mo. LIBOR + 4.250%)			68,524			68,524
AssuredPartners, Inc., 5.145%, Due 10/22/2024, 2017 1st Lien Add-On Term Loan, (1-mo. LIBOR + 3.500%)			65,864			65,814
Asurion LLC,
4.645%, Due 11/3/2023, 2018 Term Loan B6, (1-mo. LIBOR + 3.000%)			7,937			7,943
4.645%, Due 11/3/2024, 2018 Term Loan B7, (1-mo. LIBOR + 3.000%)			98,769			98,810
8.145%, Due 8/4/2025, 2017 2nd Lien Term Loan, (1-mo. LIBOR + 6.500%)			57,436			58,289
Sedgwick Claims Management Services, Inc., 4.895%, Due 12/31/2025, 2018 Term Loan B, (1-mo. LIBOR + 3.250%)			86,257			86,225
						385,605
Investment Companies - 0.44%
EIG Management Co. LLC, 5.395%, Due 2/22/2025, 2018 Term Loan B, (1-mo. LIBOR + 3.750%)			102,180			102,095
NEXUS Buyer LLC, 5.449%, Due 11/9/2026, Term Loan B, (1-mo. LIBOR + 3.750%)			63,000			63,650
Zest Acquisition Corp., 5.180%, Due 3/7/2025, 2018 1st Lien Term Loan, (1-mo. LIBOR + 3.500%)			149,711			143,443
						309,188
Private Equity - 0.12%
Victory Capital Holdings, Inc., 4.155%, Due 7/1/2026, 2020 Term Loan B, (3-mo. LIBOR + 2.500%)			85,182			85,693
Real Estate - 0.67%
Brookfield Property REIT, Inc., 4.145%, Due 8/27/2025, 1st Lien Term Loan B, (1-mo. LIBOR + 2.500%)			31,919			31,744
Cushman & Wakefield U.S. Borrower LLC, 4.400%, Due 8/21/2025, 2018 Term Loan B, (1-mo. LIBOR + 2.750%)			129,392			129,942
Lightstone Holdco LLC,
5.395%, Due 1/30/2024, 2018 Term Loan B, (1-mo. LIBOR + 3.750%)			17,039			15,953
5.395%, Due 1/30/2024, 2018 Term Loan C, (1-mo. LIBOR + 3.750%)			961			900
Realogy Group LLC, 3.895%, Due 2/8/2025, 2018 Term Loan B, (1-mo. LIBOR + 2.250%)			99,767			98,569
Valet Waste Holdings, Inc., 5.395%, Due 9/28/2025, 2018 1st Lien Term Loan, (1-mo. LIBOR + 3.750%)			199,847			196,350
						473,458
REITS - 0.78%
Apollo Commercial Real Estate Finance, Inc., 4.426%, Due 5/15/2026, Term Loan B, (1-mo. LIBOR + 2.750%)			99,500			99,500
Claros Mortgage Trust, Inc., 4.949%, Due 8/9/2026, Term Loan B, (1-mo. LIBOR + 3.250%)			99,750			99,999
Forest City Enterprises LP, 5.145%, Due 12/8/2025, 2019 Term Loan B, (1-mo. LIBOR + 3.500%)			99,000			99,413

See accompanying notes

13

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 25.04% (continued)
Financial - 4.36% (continued)
REITS - 0.78% (continued)
iStar, Inc.,
4.408%, Due 6/28/2023, 2016 Term Loan B, (1-mo. LIBOR + 2.750%)		$	22,318		$	22,346
4.416%, Due 6/28/2023, 2016 Term Loan B, (1-mo. LIBOR + 2.750%)			40,411			40,461
MGM Growth Properties Operating Partnership LP, 3.581%, Due 3/21/2025, 2016 Term Loan B, (1 Week LIBOR + 2.000%)			72,160			72,251
VICI Properties LLC, 3.409%, Due 12/20/2024, Replacement Term Loan B, (1-mo. LIBOR + 1.750%)			115,000			115,015
						548,985
Total Financial						3,078,763
Industrial - 3.13%
Aerospace/Defense - 0.91%
AI Convoy S.a.r.l., Due 1/29/2027, USD Term Loan BC			100,000			99,500
API Technologies Corp., 5.895%, Due 5/9/2026, 2019 Term Loan B, (1-mo. LIBOR + 4.250%)			149,250			142,534
Forming Machining Industries Holdings LLC, 5.945%, Due 10/9/2025, Term Loan, (3-mo. LIBOR + 4.000%)			125,750			115,061
Nordam Group, Inc., 7.188%, Due 4/9/2026, Term Loan B, (1-mo. LIBOR + 5.500%)			126,115			125,484
TransDigm, Inc.,
4.145%, Due 6/9/2023, 2018 Term Loan F, (1-mo. LIBOR + 2.500%)			133,246			133,080
4.145%, Due 5/30/2025, 2018 Term Loan E, (1-mo. LIBOR + 2.500%)			27,291			27,264
						642,923
Building Materials - 0.71%
American Bath Group LLC, 5.895%, Due 9/30/2023, 2018 Term Loan B, (1-mo. LIBOR + 4.250%)			292,168			293,629
MI Windows and Doors LLC, 7.224%, Due 11/6/2026, Term Loan B, (1-mo. LIBOR + 5.500%)			75,000			75,563
NCI Building Systems, Inc., 5.434%, Due 4/12/2025, 2018 Term Loan, (1-mo. LIBOR + 3.750%)			69,378			69,074
Quikrete Holdings, Inc., 4.145%, Due 2/1/2027, 2016 1st Lien Term Loan, (1-mo. LIBOR + 2.500%)			64,566			64,566
						502,832
Electrical Components & Equipment - 0.10%
Coolsys, Inc.,
Due 11/20/2026, Delayed Draw Term LoanC E			10,909			10,814
7.645%, Due 11/20/2026, Term Loan, (1-mo. LIBOR + 6.000%)			64,091			63,530
						74,344
Engineering & Construction - 0.24%
DG Investment Intermediate Holdings, Inc., 4.645%, Due 2/3/2025, 2018 1st Lien Term Loan, (1-mo. LIBOR + 3.000%)			34,505			34,246
USIC Holdings, Inc., 4.895%, Due 12/8/2023, 2017 Term Loan B, (1-mo. LIBOR + 3.250%)			10,536			10,493
Wrench Group LLC,
Due 4/30/2026, 2019 Delayed Draw Term LoanC E			30,850			30,850
5.945%, Due 4/30/2026, 2019 Term Loan B, (3-mo. LIBOR + 4.000%)			92,087			92,087
						167,676
Machinery - Construction & Mining - 0.14%
Brookfield WEC Holdings Inc., 4.645%, Due 8/1/2025, 2020 Term Loan, (1-mo. LIBOR + 3.000%)			95,570			95,719
Machinery - Diversified - 0.06%
Titan Acquisition Ltd., 4.645%, Due 3/28/2025, 2018 Term Loan B, (1-mo. LIBOR + 3.000%)			42,891			41,961
Metal Fabricate/Hardware - 0.06%
Sabre Industries, Inc., 5.910%, Due 4/15/2026, 2019 Term Loan B, (1-mo. LIBOR + 4.250%)			42,678			42,865

See accompanying notes

14

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 25.04% (continued)
Industrial - 3.13% (continued)
Miscellaneous Manufacturing - 0.02%
LTI Holdings, Inc., 5.145%, Due 9/6/2025, 2018 Add On 1st Lien Term Loan, (1-mo. LIBOR + 3.500%)		$	13,000		$	11,920
Packaging & Containers - 0.59%
Berry Global, Inc., 3.781%, Due 7/1/2026, 2019 Term Loan Y, (1-mo. LIBOR + 2.000%)			129,682			130,155
BWAY Holding Co., 5.084%, Due 4/3/2024, 2017 Term Loan B, (3-mo. LIBOR + 3.250%)			47,775			47,377
Flex Acquisition Co., Inc.,
4.655%, Due 12/29/2023, 1st Lien Term Loan, (1-mo. LIBOR + 3.000%)			3,991			3,938
4.909%, Due 12/29/2023, 1st Lien Term Loan, (3-mo. LIBOR + 3.000%)			106,333			104,916
Fort Dearborn Co.,
5.655%, Due 10/19/2023, 2016 1st Lien Term Loan, (1-mo. LIBOR + 4.000%)			724			709
5.908%, Due 10/19/2023, 2016 1st Lien Term Loan, (3-mo. LIBOR + 4.000%)			30,196			29,573
Reynolds Consumer Products, Inc., Due 1/29/2027, Term LoanC			100,000			100,417
						417,085
Shipbuilding - 0.16%
MHI Holdings LLC, 6.645%, Due 9/21/2026, Term Loan B, (1-mo. LIBOR + 5.000%)			114,000			114,285
Transportation - 0.14%
Genesee & Wyoming, Inc., 3.906%, Due 12/30/2026, Term Loan, (3-mo. LIBOR + 2.000%)			100,000			100,458
						100,458
Total Industrial						2,212,068
Technology - 2.04%
Computers - 0.39%
Dell International LLC, 3.650%, Due 9/19/2025, 2019 Term Loan B, (1-mo. LIBOR + 2.000%)			96,117			96,451
Flexential Intermediate Corp., 5.445%, Due 8/1/2024, 2017 1st Lien Term Loan, (3-mo. LIBOR + 3.500%)			14,000			11,190
Harland Clarke Holdings Corp., 6.695%, Due 11/3/2023, Term Loan B7, (3-mo. LIBOR + 4.750%)			16,000			12,717
NeuStar, Inc., 5.145%, Due 8/8/2024, 2018 Term Loan B4, (1-mo. LIBOR + 3.500%)			31,847			29,747
Verifone Systems, Inc., 5.899%, Due 8/20/2025, 2018 1st Lien Term Loan, (3-mo. LIBOR + 4.000%)			63,926			63,048
Western Digital Corp., 3.395%, Due 4/29/2023, 2018 Term Loan B4, (1-mo. LIBOR + 1.750%)			60,999			60,974
						274,127
Office/Business Equipment - 0.10%
Pitney Bowes, Inc., Due 1/17/2025, Term Loan BC			74,000			73,537
Semiconductors - 0.13%
Microchip Technology, Inc., 3.650%, Due 5/29/2025, 2018 Term Loan B, (1-mo. LIBOR + 2.000%)			91,370			91,579
Software - 1.42%
Castle US Holding Corp., Due 1/27/2027, USD Term Loan BC			100,000			99,125
Compuware Corp., 5.645%, Due 8/22/2025, 2018 Term Loan B, (1-mo. LIBOR + 4.000%)			69,226			69,514
Corel Corp., 6.909%, Due 7/2/2026, 2019 Term Loan, (2-mo. LIBOR + 5.000%)			125,000			123,594
DiscoverOrg LLC, 6.145%, Due 2/2/2026, 2019 1st Lien Term Loan, (1-mo. LIBOR + 4.500%)			49,749			49,791
Dynatrace LLC, 3.895%, Due 8/22/2025, 2018 1st Lien Term Loan, (1-mo. LIBOR + 2.250%)			48,289			48,425
IQVIA, Inc., 3.695%, Due 6/11/2025, 2018 USD Term Loan B3, (3-mo. LIBOR + 1.750%)			92,530			92,906
MA FinanceCo. LLC, 4.145%, Due 6/21/2024, USD Term Loan B3, (1-mo. LIBOR + 2.500%)			10,464			10,388
Omnitracs, Inc., 4.678%, Due 3/21/2025, 2018 Term Loan B, (3-mo. LIBOR + 2.750%)			61,792			61,431
Riverbed Technology, Inc., 4.900%, Due 4/24/2022, 2016 Term Loan, (1-mo. LIBOR + 3.250%)			17,000			14,608
Seattle Spinco, Inc., 4.145%, Due 6/21/2024, USD Term Loan B3, (1-mo. LIBOR + 2.500%)			70,663			70,151
Sophia LP, 5.195%, Due 9/30/2022, 2017 Term Loan B, (3-mo. LIBOR + 3.250%)			83,408			83,542
Sophos Group PLC, Due 1/15/2027, USD Term LoanC			100,000			100,063

See accompanying notes

15

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
BANK LOAN OBLIGATIONS - 25.04% (continued)
Technology - 2.04% (continued)
Software - 1.42% (continued)
SS&C Technologies Holdings Europe S.a.r.l., 3.395%, Due 4/16/2025, 2018 Term Loan B4, (1-mo. LIBOR + 1.750%)		$	24,980		$	24,975
SS&C Technologies, Inc.,
3.395%, Due 4/16/2025, 2018 Term Loan B3, (1-mo. LIBOR + 1.750%)			35,007			35,000
3.395%, Due 4/16/2025, 2018 Term Loan B5, (1-mo. LIBOR + 1.750%)			19,912			19,891
Weld North Education LLC, 6.200%, Due 2/15/2025, Term Loan B, (3-mo. LIBOR + 4.250%)			98,992			99,240
						1,002,644
Total Technology						1,441,887
Utilities - 0.47%
Electric - 0.47%
Calpine Corp.,
4.200%, Due 1/15/2024, Term Loan B5, (3-mo. LIBOR + 2.250%)			99,479			99,749
4.200%, Due 4/5/2026, Term Loan B9, (3-mo. LIBOR + 2.250%)			14,925			14,967
Eastern Power LLC, 5.395%, Due 10/2/2025, Term Loan B, (1-mo. LIBOR + 3.750%)			66,887			66,569
Granite Generation LLC,
5.395%, Due 11/9/2026, Term Loan B, (1-mo. LIBOR + 3.750%)			85,000			84,964
5.695%, Due 11/9/2026, Term Loan B, (3-mo. LIBOR + 3.750%)			15,000			14,994
Vistra Operations Co. LLC,
3.395%, Due 12/31/2025, 1st Lien Term Loan B3, (1-mo. LIBOR + 1.750%)			42,274			42,403
3.419%, Due 12/31/2025, 1st Lien Term Loan B3, (1-mo. LIBOR + 1.750%)			10,084			10,115
						333,761
Total Utilities						333,761
Total Bank Loan Obligations (Cost $17,822,983)						17,693,303
CORPORATE OBLIGATIONS - 62.26%
Basic Materials - 1.97%
Chemicals - 0.35%
Chemours Co., 6.625%, Due 5/15/2023			250,000			246,108
Forest Products & Paper - 0.30%
Clearwater Paper Corp., 5.375%, Due 2/1/2025F			200,000			208,000
Mining - 1.32%
Alcoa Nederland Holding B.V., 6.750%, Due 9/30/2024F			250,000			262,525
Freeport-McMoRan, Inc., 5.000%, Due 9/1/2027			650,000			672,782
						935,307
Total Basic Materials						1,389,415
Communications - 14.60%
Internet - 0.97%
EIG Investors Corp., 10.875%, Due 2/1/2024			150,000			154,875
Netflix, Inc., 5.750%, Due 3/1/2024			250,000			276,875
Zayo Group LLC / Zayo Capital, Inc., 6.375%, Due 5/15/2025			250,000			255,500
						687,250
Media - 8.62%
AMC Networks, Inc., 5.000%, Due 4/1/2024			250,000			255,000
Block Communications, Inc., 6.875%, Due 2/15/2025F			300,000			310,875
Cablevision Systems Corp., 5.875%, Due 9/15/2022			250,000			267,500
CCO Holdings LLC / CCO Holdings Capital Corp., 5.375%, Due 5/1/2025F			1,100,000			1,135,750
Clear Channel Worldwide Holdings, Inc., 9.250%, Due 2/15/2024F			106,000			115,408

See accompanying notes

16

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 62.26% (continued)
Communications - 14.60% (continued)
Media - 8.62% (continued)
CSC Holdings LLC,
5.500%, Due 5/15/2026F		$	500,000		$	523,852
5.375%, Due 2/1/2028F			50,000			53,000
Diamond Sports Group LLC / Diamond Sports Finance Co., 6.625%, Due 8/15/2027F			250,000			233,750
DISH DBS Corp.,
5.875%, Due 11/15/2024			725,000			733,649
7.750%, Due 7/1/2026			300,000			315,000
iHeartCommunications, Inc., 8.375%, Due 5/1/2027			100,000			108,749
Salem Media Group, Inc., 6.750%, Due 6/1/2024F			175,000			168,875
Sinclair Television Group, Inc., 5.625%, Due 8/1/2024F			400,000			411,500
Sirius XM Radio, Inc., 5.375%, Due 4/15/2025F			550,000			567,242
TEGNA, Inc., 5.500%, Due 9/15/2024F			300,000			309,000
Townsquare Media, Inc., 6.500%, Due 4/1/2023F			225,000			227,813
Univision Communications, Inc.,
5.125%, Due 5/15/2023F			200,000			200,000
5.125%, Due 2/15/2025F			150,000			149,625
						6,086,588
Telecommunications - 5.01%
CenturyLink, Inc.,
6.750%, Due 12/1/2023, Series W			250,000			277,188
7.500%, Due 4/1/2024, Series Y			450,000			507,748
CommScope Technologies LLC, 5.000%, Due 3/15/2027F			100,000			90,750
CommScope, Inc., 6.000%, Due 3/1/2026F			225,000			235,969
Frontier Communications Corp., 8.500%, Due 4/1/2026F			50,000			51,250
Plantronics, Inc., 5.500%, Due 5/31/2023F			250,000			241,250
Sprint Communications, Inc., 6.000%, Due 11/15/2022			575,000			593,687
Sprint Corp.,
7.250%, Due 9/15/2021			700,000			734,125
7.875%, Due 9/15/2023			250,000			265,598
T-Mobile USA, Inc.,
6.500%, Due 1/15/2024			175,000			179,594
6.000%, Due 4/15/2024			200,000			205,875
5.125%, Due 4/15/2025			150,000			154,472
						3,537,506
Total Communications						10,311,344
Consumer, Cyclical - 9.07%
Airlines - 0.75%
United Airlines Holdings, Inc., 4.875%, Due 1/15/2025			500,000			527,500
Apparel - 0.37%
Hanesbrands, Inc., 4.625%, Due 5/15/2024F			250,000			261,875
Auto Parts & Equipment - 0.34%
Panther BF Aggregator 2 LP / Panther Finance Co., Inc.,
6.250%, Due 5/15/2026F			50,000			53,630
8.500%, Due 5/15/2027F			175,000			188,125
						241,755
Commercial Services - 0.23%
Allied Universal Holdco LLC / Allied Universal Finance Corp., 6.625%, Due 7/15/2026F			150,000			159,469
Entertainment - 1.82%
AMC Entertainment Holdings, Inc., 5.750%, Due 6/15/2025			250,000			222,500
Caesars Resort Collection LLC / CRC Finco, Inc., 5.250%, Due 10/15/2025F			125,000			126,863

See accompanying notes

17

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 62.26% (continued)
Consumer, Cyclical - 9.07% (continued)
Entertainment - 1.82% (continued)
Churchill Downs, Inc., 5.500%, Due 4/1/2027F		$	225,000		$	237,375
Cinemark USA, Inc., 4.875%, Due 6/1/2023			200,000			202,500
Eldorado Resorts, Inc., 6.000%, Due 4/1/2025			150,000			156,964
International Game Technology PLC, 6.500%, Due 2/15/2025F			300,000			338,250
						1,284,452
Home Builders - 0.53%
Williams Scotsman International, Inc., 7.875%, Due 12/15/2022F			360,000			375,300
Home Furnishings - 0.58%
Tempur Sealy International, Inc., 5.625%, Due 10/15/2023			400,000			411,500
Household Products/Wares - 0.37%
Newell Brands, Inc., 4.200%, Due 4/1/2026			250,000			261,075
Lodging - 1.41%
MGM Resorts International, 5.750%, Due 6/15/2025			350,000			390,187
Wyndham Destinations, Inc., 5.400%, Due 4/1/2024			450,000			480,375
Wynn Las Vegas LLC / Wynn Las Vegas Capital Corp., 4.250%, Due 5/30/2023F			125,000			128,909
						999,471
Retail - 2.21%
Golden Nugget, Inc., 8.750%, Due 10/1/2025F			125,000			131,346
KGA Escrow LLC, 7.500%, Due 8/15/2023F			300,000			316,500
L Brands, Inc., 5.625%, Due 10/15/2023			325,000			352,895
PetSmart, Inc.,
7.125%, Due 3/15/2023F			100,000			99,625
5.875%, Due 6/1/2025F			250,000			256,525
QVC, Inc., 4.750%, Due 2/15/2027			200,000			201,846
Staples, Inc., 7.500%, Due 4/15/2026F			200,000			204,880
						1,563,617
Toys/Games/Hobbies - 0.46%
Mattel, Inc., 6.750%, Due 12/31/2025F			300,000			321,750
Total Consumer, Cyclical						6,407,764
Consumer, Non-Cyclical - 11.06%
Commercial Services - 1.98%
ADT Security Corp., 4.125%, Due 6/15/2023			200,000			203,250
Cardtronics, Inc. / Cardtronics USA, Inc., 5.500%, Due 5/1/2025F			300,000			310,500
Hertz Corp., 5.500%, Due 10/15/2024F			325,000			329,739
MPH Acquisition Holdings LLC, 7.125%, Due 6/1/2024F			50,000			48,431
Nielsen Finance LLC / Nielsen Finance Co., 5.000%, Due 4/15/2022F			350,000			350,437
Prime Security Services Borrower LLC / Prime Finance, Inc., 5.750%, Due 4/15/2026F			150,000			158,250
						1,400,607
Food - 0.22%
Albertsons Cos. LLC / Safeway, Inc. / New Albertsons LP / Albertson’s LLC, 6.625%, Due 6/15/2024			150,000			156,000
Health Care - Products - 0.16%
Avantor, Inc., 9.000%, Due 10/1/2025F			100,000			110,520
Health Care - Services - 6.18%
Acadia Healthcare Co., Inc., 6.500%, Due 3/1/2024			225,000			231,680

See accompanying notes

18

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 62.26% (continued)
Consumer, Non-Cyclical - 11.06% (continued)
Health Care - Services - 6.18% (continued)
Centene Corp.,
4.750%, Due 1/15/2025		$	500,000		$	516,040
5.250%, Due 4/1/2025F			175,000			181,344
CHS/Community Health Systems, Inc.,
6.250%, Due 3/31/2023			350,000			357,000
8.625%, Due 1/15/2024F			250,000			265,625
6.625%, Due 2/15/2025F			275,000			277,799
DaVita, Inc., 5.125%, Due 7/15/2024			175,000			178,938
HCA, Inc.,
5.875%, Due 5/1/2023			200,000			219,860
5.375%, Due 2/1/2025			50,000			55,880
MEDNAX, Inc., 5.250%, Due 12/1/2023F			325,000			331,500
Polaris Intermediate Corp., 8.500%, Due 12/1/2022, PIK (in-kind rate 8.500%)F			150,000			139,502
RegionalCare Hospital Partners Holdings, Inc., 8.250%, Due 5/1/2023F			225,000			236,317
Tenet Healthcare Corp.,
8.125%, Due 4/1/2022			100,000			109,254
7.000%, Due 8/1/2025			200,000			207,166
6.250%, Due 2/1/2027F			1,000,000			1,057,600
						4,365,505
Household Products/Wares - 0.04%
Prestige Brands, Inc., 5.125%, Due 1/15/2028F			25,000			26,125
Pharmaceuticals - 2.48%
Bausch Health Cos., Inc.,
7.000%, Due 3/15/2024F			575,000			596,102
6.125%, Due 4/15/2025F			350,000			360,017
Endo Dac / Endo Finance LLC / Endo Finco, Inc., 5.875%, Due 10/15/2024F			500,000			496,250
HLF Financing Sarl LLC / Herbalife International, Inc., 7.250%, Due 8/15/2026F			250,000			260,625
Mallinckrodt International Finance S.A. / Mallinckrodt CB LLC, 5.625%, Due 10/15/2023F			100,000			39,500
						1,752,494
Total Consumer, Non-Cyclical						7,811,251
Energy - 8.56%
Oil & Gas - 4.15%
Antero Resources Corp., 5.125%, Due 12/1/2022			225,000			194,062
Ascent Resources Utica Holdings LLC / ARU Finance Corp., 10.000%, Due 4/1/2022F			350,000			343,000
Berry Petroleum Co. LLC, 7.000%, Due 2/15/2026F			125,000			115,938
Callon Petroleum Co., 6.375%, Due 7/1/2026			125,000			118,125
Endeavor Energy Resources LP / EER Finance, Inc., 5.750%, Due 1/30/2028F			100,000			104,000
Hilcorp Energy I LP / Hilcorp Finance Co., 5.000%, Due 12/1/2024F			200,000			182,000
Murphy Oil Corp., 5.750%, Due 8/15/2025			250,000			257,345
Nabors Industries Ltd., 7.500%, Due 1/15/2028F			75,000			74,250
Oasis Petroleum, Inc., 6.875%, Due 1/15/2023			125,000			118,242
QEP Resources, Inc., 5.375%, Due 10/1/2022			225,000			225,562
Range Resources Corp.,
5.875%, Due 7/1/2022			76,000			72,200
5.000%, Due 8/15/2022			75,000			70,890
SM Energy Co., 5.000%, Due 1/15/2024			150,000			136,875
Southwestern Energy Co., 6.200%, Due 1/23/2025			125,000			104,063
Sunoco LP / Sunoco Finance Corp., 4.875%, Due 1/15/2023, Series WI			250,000			256,562
Transocean Pontus Ltd., 6.125%, Due 8/1/2025F			111,250			114,588
Transocean, Inc., 9.000%, Due 7/15/2023F			150,000			161,160
W&T Offshore, Inc., 9.750%, Due 11/1/2023, 2018 Term LoanF			150,000			142,020
Whiting Petroleum Corp., 6.250%, Due 4/1/2023			200,000			140,000
						2,930,882

See accompanying notes

19

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 62.26% (continued)
Energy - 8.56% (continued)
Oil & Gas Services - 0.56%
Archrock Partners LP / Archrock Partners Finance Corp., 6.000%, Due 10/1/2022		$	250,000		$	250,313
Oceaneering International, Inc., 4.650%, Due 11/15/2024			150,000			144,750
						395,063
Pipelines - 3.85%
Blue Racer Midstream LLC / Blue Racer Finance Corp., 6.125%, Due 11/15/2022F			100,000			97,710
Buckeye Partners LP,
4.350%, Due 10/15/2024			150,000			151,347
3.950%, Due 12/1/2026			100,000			98,629
Cheniere Energy Partners LP, 5.625%, Due 10/1/2026			250,000			261,875
Crestwood Midstream Partners LP / Crestwood Midstream Finance Corp., 5.625%, Due 5/1/2027F			200,000			201,260
DCP Midstream Operating LP, 5.375%, Due 7/15/2025			400,000			436,548
Energy Transfer Operating LP, 5.250%, Due 4/15/2029			300,000			339,804
Genesis Energy LP / Genesis Energy Finance Corp.,
5.625%, Due 6/15/2024			100,000			97,250
6.500%, Due 10/1/2025			50,000			48,750
Hess Midstream Operations LP, 5.625%, Due 2/15/2026F			300,000			314,011
NGL Energy Partners LP / NGL Energy Finance Corp.,
7.500%, Due 11/1/2023			100,000			99,720
7.500%, Due 4/15/2026F			150,000			145,500
Tallgrass Energy Partners LP / Tallgrass Energy Finance Corp., 5.500%, Due 9/15/2024F			175,000			176,754
Targa Resources Partners LP / Targa Resources Partners Finance Corp.,
5.250%, Due 5/1/2023			150,000			151,313
5.125%, Due 2/1/2025			100,000			103,000
						2,723,471
Total Energy						6,049,416
Financial - 9.03%
Banks - 0.45%
CIT Group, Inc., 4.750%, Due 2/16/2024			300,000			319,500
Diversified Financial Services - 3.82%
Allied Universal Holdco LLC / Allied Universal Finance Corp., 9.750%, Due 7/15/2027F			125,000			133,438
Credit Acceptance Corp., 7.375%, Due 3/15/2023			150,000			153,000
Nationstar Mortgage Holdings, Inc., 8.125%, Due 7/15/2023F			250,000			264,375
Navient Corp.,
6.125%, Due 3/25/2024			975,000			1,038,687
6.750%, Due 6/15/2026			75,000			81,375
Oxford Finance LLC / Oxford Finance Co-Issuer II, Inc., 6.375%, Due 12/15/2022F			175,000			179,812
Springleaf Finance Corp.,
5.625%, Due 3/15/2023			100,000			107,000
6.125%, Due 3/15/2024			100,000			108,500
7.125%, Due 3/15/2026			550,000			631,042
						2,697,229
Insurance - 0.85%
Acrisure LLC / Acrisure Finance, Inc., 8.125%, Due 2/15/2024F			200,000			213,750
Genworth Holdings, Inc., 4.900%, Due 8/15/2023			225,000			227,250
HUB International Ltd., 7.000%, Due 5/1/2026F			150,000			155,625
						596,625
Investment Companies - 0.92%
Icahn Enterprises LP / Icahn Enterprises Finance Corp., 6.375%, Due 12/15/2025			625,000			652,344

See accompanying notes

20

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 62.26% (continued)
Financial - 9.03% (continued)
Real Estate - 0.78%
Kennedy-Wilson, Inc., 5.875%, Due 4/1/2024		$	300,000		$	306,000
Newmark Group, Inc., 6.125%, Due 11/15/2023			225,000			246,757
						552,757
REITS - 2.21%
Iron Mountain US Holdings, Inc., 5.375%, Due 6/1/2026F			300,000			313,875
iStar, Inc.,
4.750%, Due 10/1/2024			300,000			312,000
4.250%, Due 8/1/2025			200,000			201,000
Ladder Capital Finance Holdings LLLP / Ladder Capital Finance Corp., 5.250%, Due 10/1/2025F			100,000			102,750
MGM Growth Properties Operating Partnership LP / MGP Finance Co-Issuer, Inc., 5.625%, Due 5/1/2024			250,000			272,698
Starwood Property Trust, Inc., 5.000%, Due 12/15/2021			350,000			358,750
						1,561,073
Total Financial						6,379,528
Industrial - 5.81%
Aerospace/Defense - 1.09%
Arconic, Inc., 5.125%, Due 10/1/2024			400,000			431,908
Signature Aviation US Holdings, Inc., 5.375%, Due 5/1/2026F			250,000			259,700
Spirit AeroSystems, Inc., 4.600%, Due 6/15/2028			75,000			77,072
						768,680
Building Materials - 0.36%
Standard Industries, Inc., 5.375%, Due 11/15/2024F			250,000			256,875
Electrical Components & Equipment - 0.45%
Energizer Holdings, Inc.,
5.500%, Due 6/15/2025F			150,000			154,875
7.750%, Due 1/15/2027F			150,000			165,382
						320,257
Electronics - 0.26%
Ingram Micro, Inc., 5.450%, Due 12/15/2024			175,000			186,892
Engineering & Construction - 0.20%
AECOM, 5.875%, Due 10/15/2024			125,000			138,563
Environmental Control - 0.26%
Stericycle, Inc., 5.375%, Due 7/15/2024F			175,000			183,185
Packaging & Containers - 2.29%
Berry Global, Inc.,
5.500%, Due 5/15/2022			200,000			201,500
5.625%, Due 7/15/2027F			150,000			159,375
Flex Acquisition Co., Inc., 6.875%, Due 1/15/2025F			250,000			250,938
LABL Escrow Issuer LLC, 6.750%, Due 7/15/2026F			25,000			26,851
Mauser Packaging Solutions Holding Co., 7.250%, Due 4/15/2025F			625,000			621,875
Reynolds Group Issuer, Inc. / Reynolds Group Issuer LLC / Reynolds Group Issuer, 5.125%, Due 7/15/2023F			350,000			357,178
						1,617,717
Transportation - 0.23%
XPO Logistics, Inc., 6.750%, Due 8/15/2024F			150,000			161,829

See accompanying notes

21

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 62.26% (continued)
Industrial - 5.81% (continued)
Trucking & Leasing - 0.67%
Fortress Transportation & Infrastructure Investors LLC,
6.750%, Due 3/15/2022F		$	250,000		$	257,500
6.500%, Due 10/1/2025F			200,000			212,334
						469,834
Total Industrial						4,103,832
Technology - 1.33%
Computers - 0.97%
Dell International LLC / EMC Corp., 7.125%, Due 6/15/2024F			650,000			683,312
Office/Business Equipment - 0.36%
Xerox Corp., 4.125%, Due 3/15/2023			250,000			258,750
Total Technology						942,062
Utilities - 0.83%
Electric - 0.68%
AES Corp.,
4.500%, Due 3/15/2023			200,000			203,904
5.500%, Due 4/15/2025			150,000			154,687
Calpine Corp., 5.125%, Due 3/15/2028F			125,000			124,141
						482,732
Gas - 0.15%
AmeriGas Partners LP / AmeriGas Finance Corp., 5.625%, Due 5/20/2024			100,000			106,270
Total Utilities						589,002
Total Corporate Obligations (Cost $43,237,904)						43,983,614
FOREIGN CORPORATE OBLIGATIONS - 9.91%
Basic Materials - 0.33%
Chemicals - 0.11%
NOVA Chemicals Corp., 4.875%, Due 6/1/2024F			75,000			76,125
Mining - 0.22%
FMG Resources Pty Ltd., 5.125%, Due 5/15/2024F			150,000			158,813
Total Basic Materials						234,938
Communications - 3.15%
Media - 1.00%
Altice Luxembourg S.A., 10.500%, Due 5/15/2027F			225,000			260,168
VTR Finance B.V., 6.875%, Due 1/15/2024F			435,000			444,787
						704,955
Telecommunications - 2.15%
Altice France S.A., 7.375%, Due 5/1/2026F			400,000			426,032
Connect Finco SARL / Connect US Finco LLC, 6.750%, Due 10/1/2026F			200,000			211,750
Intelsat Jackson Holdings S.A., 9.500%, Due 9/30/2022F			250,000			283,750
Telecom Italia SpA, 5.303%, Due 5/30/2024F			225,000			245,250
Ypso Finance Bis Co., 6.000%, Due 2/15/2028			350,000			350,000
						1,516,782
Total Communications						2,221,737

See accompanying notes

22

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
FOREIGN CORPORATE OBLIGATIONS - 9.91% (continued)
Consumer, Cyclical - 1.16%
Auto Manufacturers - 0.58%
Fiat Chrysler Automobiles N.V., 5.250%, Due 4/15/2023		$	200,000		$	214,000
Mclaren Finance PLC, 5.750%, Due 8/1/2022F			200,000			192,500
						406,500
Retail - 0.58%
BC ULC / New Red Finance, Inc., 5.000%, Due 10/15/2025F			400,000			412,680
Total Consumer, Cyclical						819,180
Consumer, Non-Cyclical - 0.95%
Agriculture - 0.07%
Cooke Omega Investments, Inc. / Alpha VesselCo Holdings, Inc., 8.500%, Due 12/15/2022F			50,000			50,875
Commercial Services - 0.31%
Cimpress PLC, 7.000%, Due 6/15/2026F			150,000			158,521
GW B-CR Security Corp., 9.500%, Due 11/1/2027F			58,000			61,915
						220,436
Food - 0.30%
Clearwater Seafoods, Inc., 6.875%, Due 5/1/2025F			200,000			208,334
Household Products/Wares - 0.27%
Kronos Acquisition Holdings, Inc., 9.000%, Due 8/15/2023F			200,000			192,076
Total Consumer, Non-Cyclical						671,721
Energy - 0.54%
Oil & Gas - 0.54%
Aker BP ASA, 4.750%, Due 6/15/2024F			100,000			103,983
MEG Energy Corp., 7.000%, Due 3/31/2024F			150,000			151,125
Seven Generations Energy Ltd., 5.375%, Due 9/30/2025F			125,000			125,312
						380,420
Total Energy						380,420
Financial - 1.38%
Banks - 0.55%
Intesa Sanpaolo SpA, 5.710%, Due 1/15/2026F			350,000			387,890
Diversified Financial Services - 0.83%
Global Aircraft Leasing Co., Ltd., 6.500%, Due 9/15/2024, PIK (in-kind rate 6.500%)F			350,000			358,067
goeasy Ltd., 5.375%, Due 12/1/2024F			225,000			230,344
						588,411
Total Financial						976,301
Industrial - 2.10%
Aerospace/Defense - 0.93%
Bombardier, Inc.,
6.000%, Due 10/15/2022F			175,000			171,500
7.500%, Due 12/1/2024F			250,000			242,812
7.500%, Due 3/15/2025F			250,000			240,313
						654,625

See accompanying notes

23

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount			Fair Value
FOREIGN CORPORATE OBLIGATIONS - 9.91% (continued)
Industrial - 2.10% (continued)
Packaging & Containers - 1.17%
ARD Finance S.A., 6.500%, Due 6/30/2027, PIK (in-kind rate 6.500%)F		$	300,000		$	309,720
Ardagh Packaging Finance PLC / Ardagh Holdings USA, Inc., 5.250%, Due 8/15/2027F			150,000			157,313
Cascades Inc/Cascades USA, Inc., 5.125%, Due 1/15/2026F			275,000			283,937
Trivium Packaging Finance B.V., 5.500%, Due 8/15/2026F			75,000			79,031
						830,001
Total Industrial						1,484,626
Technology - 0.30%
Software - 0.30%
Open Text Corp., 5.875%, Due 6/1/2026F			200,000			211,250
Total Foreign Corporate Obligations (Cost $6,861,758)						7,000,173
	Shares
SHORT-TERM INVESTMENTS - 3.65% (Cost $2,580,211)
Investment Companies - 3.65%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.47%G H			2,580,211			2,580,211
TOTAL INVESTMENTS - 100.87% (Cost $70,507,471)						71,262,128
LIABILITIES, NET OF OTHER ASSETS - (0.87%)						(615,043	)
TOTAL NET ASSETS - 100.00%					$	70,647,085
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B Bank loan obligations, unless otherwise stated, carry a floating rate of interest. The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

^C Coupon rates may not be available for bank loans that are unsettled and/or unfunded as of January 31, 2020.

^D Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $163,153 or 0.23% of net assets. Value was determined using significant unobservable inputs.

^E Unfunded Loan Commitment. At period end, the amount of unfunded loan commitments was $41,759 or 0.06% of net assets. Of this amount, $10,909 relate to Coolsys, Inc. and $30,850 relates to Wrench Group LLC.

^F 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 $28,120,378 or 39.80% of net assets. The Fund has no right to demand registration of these securities.

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

^H 7-day yield.

LIBOR - London Interbank Offered Rate.

LLC - Limited Liability Company.

LLLP - Limited Liability Limited Partnership.

LP - Limited Partnership.

PIK - Payment in Kind.

PLC - Public Limited Company.

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

REIT - Real Estate Investment Trust.

See accompanying notes

24

American Beacon Crescent Short Duration High Income Fund^SM

Schedule of Investments

January 31, 2020

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2020, the investments were classified as described below:

Crescent Short Duration High Income Fund	Level 1		Level 2		Level 3			Total
Assets
Common Stocks	$	4,615	$	-	$	-		$	4,615
Warrants		212		-		-			212
Bank Loan Obligations(1)		-		17,530,150		163,153	(2)		17,693,303
Corporate Obligations		-		43,983,614		-			43,983,614
Foreign Corporate Obligations		-		7,000,173		-			7,000,173
Short-Term Investments		2,580,211		-		-			2,580,211
Total Investments in Securities - Assets	$	2,585,038	$	68,513,937	$	163,153		$	71,262,128

⁽¹⁾  Unfunded loan commitments represent $41,759 at year end.

⁽²⁾  Includes 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 January 31, 2020, 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 1/31/2019	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 1/31/2020			Unrealized Appreciation (Depreciation) at Period end**
Bank Loan Obligations	$170,888	$-	$11,569	$	99	$	56	$	3,679	$	-	$	-	$	163,153	(1)	$	(6,729	)

** 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⁾  Includes investment held in the Fund’s Portfolio with $0 fair value.

The bank loan obligation was fair valued using a private valuation report from a third party valuation service provider where the market value of the bank loan obligation was $163,153. It has been classified as a Level 3 security due to the use of unobservable inputs that were significant to the valuation.

See accompanying notes

25

American Beacon Crescent Short Duration High Income Fund^SM

Statement of Assets and Liabilities

January 31, 2020

Assets:
Investments in unaffiliated securities, at fair value†	$	68,681,917
Investments in affiliated securities, at fair value‡		2,580,211
Cash		34,229
Dividends and interest receivable		879,405
Receivable for investments sold		1,751,703
Receivable for fund shares sold		275
Receivable for expense reimbursement (Note 2)		52,112
Prepaid expenses		33,692
Total assets		74,013,544
Liabilities:
Payable for investments purchased		3,162,645
Payable for fund shares redeemed		5,019
Dividends payable		896
Unfunded loan commitments		41,759
Management and sub-advisory fees payable (Note 2)		45,553
Service fees payable (Note 2)		1,033
Transfer agent fees payable (Note 2)		1,389
Custody and fund accounting fees payable		15,288
Professional fees payable		86,491
Trustee fees payable (Note 2)		331
Payable for prospectus and shareholder reports		4,626
Other liabilities		1,429
Total liabilities		3,366,459
Net assets	$	70,647,085
Analysis of net assets:
Paid-in-capital	$	75,026,129
Total distributable earnings (deficits)A		(4,379,044	)
Net assets	$	70,647,085
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		6,877,790
Y Class		406,700
Investor Class		65,271
A Class		147,739
C Class		54,297
Net assets:
Institutional Class	$	64,345,935
Y Class	$	3,802,336
Investor Class	$	611,120
A Class	$	1,379,649
C Class	$	508,045
Net asset value, offering and redemption price per share:
Institutional Class	$	9.36
Y Class	$	9.35
Investor Class	$	9.36
A Class	$	9.34
A Class (offering price)	$	9.58
C Class	$	9.36
† Cost of investments in unaffiliated securities	$	67,927,260
‡ Cost of investments in affiliated securities	$	2,580,211
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

26

American Beacon Crescent Short Duration High Income Fund^SM

Statement of Operations

For the year ended January 31, 2020

	Crescent Short Duration High Income Fund
Investment income:
Dividend income from affiliated securities (Note 7)	$	74,253
Interest income		4,435,000
Total investment income		4,509,253
Expenses:
Management and sub-advisory fees (Note 2)		618,652
Transfer agent fees:
Institutional Class (Note 2)		11,003
Y Class (Note 2)		3,691
Investor Class		1,430
A Class		87
C Class		44
Custody and fund accounting fees		87,262
Professional fees		134,278
Registration fees and expenses		61,734
Service fees (Note 2):
A Class		425
C Class		303
Distribution fees (Note 2):
A Class		3,365
C Class		4,349
Prospectus and shareholder report expenses		16,378
Trustee fees (Note 2)		5,769
Other expenses		15,317
Total expenses		964,087
Net fees waived and expenses (reimbursed) (Note 2)C		(246,526	)
Net expenses		717,561
Net investment income		3,791,692
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesA		(741,042	)
Change in net unrealized appreciation of:
Investments in unaffiliated securitiesB		2,595,365
Net gain from investments		1,854,323
Net increase in net assets resulting from operations	$	5,646,015
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.
C The Manager voluntarily reimbursed service fees in the amount of $662.

See accompanying notes

27

American Beacon Crescent Short Duration High Income Fund^SM

Statement of Changes in Net Assets

	Year Ended January 31, 2020			Year Ended January 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	3,791,692		$	4,598,725
Net realized (loss) from investments in unaffiliated securities, and commission recapture		(741,042	)		(1,795,322	)
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities		2,595,365			(2,269,671	)
Net increase in net assets resulting from operations		5,646,015			533,732
Distributions to shareholders:
Total retained earnings:
Institutional Class		(3,635,223	)		(4,264,570	)
Y Class		(180,199	)		(248,726	)
Investor Class		(25,037	)		(34,886	)
A Class		(58,509	)		(65,085	)
C Class		(15,592	)		(21,512	)
Net distributions to shareholders		(3,914,560	)		(4,634,779	)
Capital share transactions (Note 9):
Proceeds from sales of shares		4,786,648			16,393,954
Reinvestment of dividends and distributions		3,893,332			4,610,610
Cost of shares redeemed		(30,332,420	)		(14,291,239	)
Net increase (decrease) in net assets from capital share transactions		(21,652,440	)		6,713,325
Net increase (decrease) in net assets		(19,920,985	)		2,612,278
Net assets:
Beginning of period		90,568,070			87,955,792
End of period	$	70,647,085		$	90,568,070

See accompanying notes

28

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020, the Trust consists of thirty-two active series, one of which is presented in this filing: American Beacon Crescent Short Duration High Income 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.

Recently Adopted 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, and has been adopted accordingly with no material impact 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 January 31, 2020, 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
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

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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 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 on a daily basis 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.

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.

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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 Fund 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 Fund’s outstanding shares could have a material impact on the Fund. As of January 31, 2020, based on management’s evaluation of the shareholder account base, two accounts have been identified as representing an unaffiliated significant ownership of approximately 55% of the Fund’s outstanding shares.

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 Crescent Capital Group LP (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 schedules:

First $250 million	0.40	%
Next $750 million	0.35	%
Over $1 billion	0.30	%

The Management and Sub-Advisory Fees paid by the Fund during the year ended January 31, 2020 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	288,704
Sub-Advisor Fees		0.40	%		329,948
Total		0.75	%	$	618,652

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

Distribution Plans

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the A and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), receives an annual fee of 0.25% of the average daily net assets of the A Class and 1.00% of the average daily net assets of the C Class. 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 Distributor for distribution assistance.

For all other share classes, the Funds have utilized a “defensive” distribution plan (the “Plan”) pursuant to which no separate fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the use of management fees received by the Manager and/or the investment advisors hired by the Manager 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 from these fees.

Service Plans

The Investor, A and C Classes have each adopted a Service Plan (collectively, the “Plans”). The Plans authorize the payment to the Manager an annual fee up to 0.375% of the average daily net assets of the Investor Class, up to 0.25% of the average daily net assets of the A Class and up to 0.25% of the average daily net assets of the C Class. In addition, the Funds may reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries attributable to Y Class and Institutional Class. The Manager or other approved entities may spend such amounts on any activities or expenses primarily intended to result in or relate to the servicing of A Class, C Class, Y Class, Institutional Class and Investor Class including, but not limited to, payment of shareholder service fees and transfer agency or sub-transfer agency expenses. The fees will be payable monthly in arrears. The primary expenses expected to be incurred under the Plans are shareholder servicing, record keeping fees and servicing fees paid to financial intermediaries such as plan sponsors and broker-dealers.

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 January 31, 2020, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Crescent Short Duration High Income	$	11,666

As of January 31, 2020, 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
Crescent Short Duration High Income	$	656

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020, 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
Crescent Short Duration High Income	$	3,564

Interfund Credit Facility

Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission (“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 January 31, 2020, the 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 Fund to the extent that total operating expenses exceed the Fund’s expense cap. During the year ended January 31, 2020, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap			Reimbursed Expenses					Expiration of Reimbursed Expenses
Fund	Class	2/1/2019 - 1/31/2020					(Recouped) Expenses
Crescent Short Duration High Income	Institutional		0.85	%	$	231,047	$	-			2022 - 2023
Crescent Short Duration High Income	Y		0.95	%		11,115		-			2022 - 2023
Crescent Short Duration High Income	Investor		1.23	%		5,309		(5,032	)		2022 - 2023
Crescent Short Duration High Income	A		1.25	%		2,439		-			2022 - 2023
Crescent Short Duration High Income	C		2.00	%		986		-			2022 - 2023

Of these amounts, $52,112 was disclosed as a receivable from the Manager on the Statement of Assets and Liabilities at January 31, 2020.

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 2022 and

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

2023. The Fund did not record a liability for potential reimbursements due to the current assessment that reimbursements are 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
Crescent Short Duration High Income	$	3,830	$	-	$	198,098		2019 - 2020
Crescent Short Duration High Income		1,498		174,203		-		2020 - 2021
Crescent Short Duration High Income		-		208,703		-		2021 - 2022

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 which may be used to offset distribution related expenses. During the year ended January 31, 2020 there were fees of $488 collected by RID for 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 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 January 31, 2020, 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 January 31, 2020, there were no CDSC fees collected by RID for Class C Shares of the Fund.

Trustee Fees and Expenses

Effective January 1, 2020, as compensation for their service to the American Beacon Funds Complex, including the Trust (collectively, the “Trusts”), each Trustee is compensated from the Trusts as follows: (1) an annual retainer of $120,000; (2) meeting attendance fee (for attendance in person or via teleconference) of (a) $12,000 for in person attendance, or $5,000 for telephonic attendance, by Board members for each regularly scheduled or special Board meeting, (b) $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, (c) $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee; and (d) $2,500 for attendance by Board members for each special telephonic Board meeting; and (3) 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. For her service as Board Chair, Ms. Cline receives an additional annual retainer of $50,000. Although she attends several committee meetings at each quarterly Board meeting, she receives only a single $2,500 fee each quarter for her attendance at those meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chair of the Nominating and Governance Committee receives an additional annual retainer of $15,000.

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

34

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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 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.

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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

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.

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

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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

Bank Loans and Senior Loans

Loans are typically administered by a bank, insurance company, finance company or other financial institution (the “agent”) for a lending syndicate of financial institutions. In a typical loan, the agent administers the terms of the loan agreement and is responsible for the collection of principal and interest and fee payments from the borrower and the apportionment of these payments to all lenders that are parties to the loan agreement. In addition, an institution (which may be the agent) may hold collateral on behalf of the lenders. Typically, under loan agreements, the agent is given broad authority in monitoring the borrower’s performance and is obligated to use the same care it would use in the management of its own property. In asserting rights against a borrower, the Fund normally will be dependent on the willingness of the lead bank to assert these rights, or upon a vote of all the lenders to authorize the action. If an agent becomes insolvent, or has a receiver, conservator, or similar official appointed for it by the appropriate regulatory authority, or becomes a debtor in a bankruptcy proceeding, the agent’s appointment may be terminated and a successor agent would be appointed. If an appropriate regulator or court determines that assets held by the agent for the benefit of purchasers of loans are subject to the claims of the agent’s general or secured creditors, the Fund might incur certain costs and delays in realizing payment on a loan or suffer a loss of principal and/or interest. The Fund may be subject to similar risks when it buys a participation interest or an assignment from an intermediary.

Bank loans are fixed and floating rate loans arranged through private negotiations between a company or a non-U.S. government and one or more financial institutions (lenders). The Fund may invest in senior loans, which are floating rate loans that hold a senior position in the capital structure of U.S. and foreign corporations, partnerships or other business entities. Under normal circumstances, senior loans have priority of claim ahead of other obligations of a borrower in the event of liquidation. Bank loans and senior loans may be collateralized or uncollateralized. They pay interest at rates that float above, or are adjusted periodically based on, a benchmark that reflects current interest rates.

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American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

The Fund may invest in such loans in the form of participations in loans and assignments of all or a portion of loans from third parties. In connection with purchasing participations in such instruments, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loan, nor any rights of set-off against the borrower, and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the participation. When the Fund purchases assignments from lenders, the Fund will acquire direct rights against the borrower on the loan. A Fund may acquire bank and senior loan assignments or participations. The purchaser of an assignment typically succeeds to all the rights and obligations of the assigning institution and becomes a lender under the credit agreement with respect to the debt obligation; however, the purchaser’s rights can be more restricted than those of the assigning institution, and, in any event, the Fund may not be able to unilaterally enforce all rights and remedies under the loan and with regard to any associated collateral. A participation typically results in a contractual relationship only with the institution participating out the interest, not with the borrower. In purchasing participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement against the borrower, and the Fund may not directly benefit from the collateral supporting the debt obligation in which it has purchased the participation. As a result, a Fund will be exposed to the credit risk of both the borrower and the institution selling the participation.

The Fund earns a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is included in “Interest income” on the Statement of Operations, is recognized ratably over the commitment period. Unfunded floating rate loan interests are marked-to-market daily, and any unrealized appreciation (depreciation) is included on the Statement of Assets and Liabilities and Statement of Operations.

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.

Corporate Debt and Other Fixed-Income Securities

The Fund may hold debt, including government and corporate debt, and other fixed-income securities. The investment return of corporate debt securities reflects interest earning and changes in the market value of the security. 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 a Fund’s NAV to likewise decrease, and vice versa. How specific fixed-income securities may react to changes in interest rates will depend on specific characteristics of each security. 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.

Delayed Funding Loans and Revolving Credit Facilities

The Fund may enter into delayed funding loans and revolving credit facilities. Delayed funding loans and revolving credit facilities are borrowing arrangements in which the lender agrees to make loans up to a maximum amount upon demand by the borrower during a specific term. A revolving credit facility differs from a delayed

38

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

funding loan in that as the borrower repays the loan, an amount equal to the repayment may be borrowed again during the term of the revolving credit facility. Delayed funding loans and revolving credit facilities usually provide for floating or variable rates of interest. These commitments may have the effect of requiring a Fund to increase its investment in a company at a time when it might not otherwise decide to do so (including at a time when the company’s financial condition makes it uncertain that such amounts will be repaid). To the extent that a Fund is committed to advance additional funds, it will at all times segregate or “earmark” assets, determined to be liquid in accordance with procedures established by the Board, in an amount sufficient to meet such commitments.

The Fund may invest in delayed funding loans and revolving credit facilities with credit quality comparable to that of issuers of its securities investments. Delayed funding loans and revolving credit facilities may be subject to restrictions on transfer, and only limited opportunities may exist to resell such instruments. As a result, a Fund may be unable to sell such investments at an opportune time or may have to resell them at less than fair market value.

Floating Rate Loan Interest

The Fund may invest in floating rate loan interests. The floating rate loan interests held by the Fund are typically issued to companies (the “borrower”) by banks, other financial institutions, and privately and publicly offered corporations (the “lender”). Floating rate loan interests are generally non-investment grade, often involve borrowers whose financial condition is troubled or uncertain and companies that are highly leveraged. The Fund may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loan interests may include fully funded term loans or revolving lines of credit. Floating rate loan interests are typically senior in the corporate capital structure of the borrower. Floating rate loan interests generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally the lending rate offered by one or more European banks, such as the London Interbank Offered Rate (“LIBOR”), the prime rate offered by one or more U.S. banks or the certificate of deposit rate. Floating rate loan interests may involve foreign borrowers, and investments may be denominated in foreign currencies. The Fund considers these investments to be investments in debt securities for purposes of its investment policies.

When the Fund purchases a floating rate loan interest it may receive a facility fee and when it sells a floating rate loan interest, it may pay a facility fee. On an ongoing basis, the Fund may receive a commitment fee based on the undrawn portion of the underlying line of credit amount of a floating rate loan interest. Facility and commitment fees are typically amortized to income over the term of the loan or term of the commitment, respectively. Consent and amendment fees are recorded to income as earned. Prepayment penalty fees, which may be received by the Fund upon the prepayment of a floating rate loan interest by a borrower, are recorded as realized gains. The Fund may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.

Floating rate loan interests are usually freely callable at the borrower’s option. The Fund may invest in such loans in the form of participations in loans (“Participations”) or assignments (“Assignments”) of all or a portion of loans from third parties. Participations typically will result in the Fund having a contractual relationship only with the lender, not with the borrower. The Fund will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of offset against the borrower, and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, the Fund will assume the credit risk of both the borrower and the lender that is selling the Participation. The Fund’s investment in Participations involves the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, the Fund may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower. Assignments typically result in the Fund having a direct contractual relationship with the borrower, and the Fund may enforce compliance by the borrower with the terms of the loan agreement.

39

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

In connection with floating rate loan interests, the Fund may also enter into unfunded floating rate loan interests (“commitments”). In connection with these commitments, the Fund earns a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is included in “Interest income” on the Statement of Operations, is recognized ratably over the commitment period. Unfunded floating rate loan interests are marked-to-market daily, and any unrealized appreciation (depreciation) is included on the Statement of Assets and Liabilities and Statement of Operations.

Foreign Debt Securities

The Fund may invest in foreign fixed and floating rate income securities (including emerging market securities) all or a portion of which may be non-U.S. dollar denominated and which include: (a) debt obligations issued or guaranteed by foreign national, provincial, state, municipal or other governments with taxing authority or by their agencies or instrumentalities, including Brady Bonds; (b) debt obligations of supranational entities; (c) debt obligations of the U.S. Government issued in non-dollar securities; (d) debt obligations and other fixed income securities of foreign corporate issuers (both dollar and non-dollar denominated); and (e) U.S. corporate issuers (both Eurodollar and non-dollar denominated). There is no minimum rating criteria for the Fund’s investments in such securities. Investing in the securities of foreign issuers involves special considerations that are not typically associated with investing in the securities of U.S. issuers. In addition, emerging markets are markets that have risks that are different and higher than those in more developed markets.

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 Fund reasonably expects 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

40

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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.

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 January 31, 2020 are disclosed in the Notes to the Schedule of Investments.

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 (“BDCs”), 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.

Payment-In-Kind Securities

The Fund may invest in payment-in-kind securities (“PIKs”). PIKs give the issuer the option at each interest payment date of making interest payments in either cash or additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a dirty price) and require a pro-rata adjustment from the “Unrealized appreciation (depreciation) of investments” to “Dividend and interest receivable” in the Statement of Assets and Liabilities.

41

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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 an obligation, or the counterparty to a transaction, including a derivatives contract or a loan, will fail to make timely payment of interest or principal or otherwise honor its obligations or default completely. The strategies utilized by the sub-advisors require accurate and detailed credit analysis of issuers and there can be no assurance that its analysis will be accurate or complete. The Fund may be subject to substantial losses in the event of credit deterioration or bankruptcy of one or more issuers in its portfolio.

Financial strength and solvency of an issuer are the primary factors influencing credit risk. In addition, inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk. Credit risk may change over the life of an instrument and debt obligations which are rated by rating agencies may be subject to downgrade. The credit ratings of debt instruments and investments represent the rating agencies’ opinions regarding their credit quality and are not a guarantee of future credit performance of such securities. Rating agencies attempt to evaluate the safety of the timely payment of principal and interest (or dividends) and do not evaluate the risks of fluctuations in market value. The ratings assigned to securities by rating agencies do not purport to fully reflect the true risks of an investment. Further, in recent years many highly-rated structured securities have been subject to substantial losses as the economic assumptions on which their ratings were based proved to be materially inaccurate. 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 (commonly referred to as “junk bonds”). Since the Fund can invest significantly in lower quality debt securities considered speculative in nature, this risk will be substantial. A downgrade or default affecting any of the Fund’s securities could affect the Fund’s performance.

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.

High-Yield Securities Risk

Investing in high-yield, below investment-grade securities (commonly referred to as “junk bonds”) generally involves significantly greater risks of loss of your money than an investment in investment grade securities. High-yield debt securities may fluctuate more widely in price and yield and may fall in price when the economy is weak or expected to become weak. High-yield securities are considered to be speculative with respect to an issuer’s

42

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

ability to pay interest and principal and carry a greater risk that the issuers of lower-rated securities will default on the timely payment of principal and interest. Below investment grade securities may experience greater price volatility and less liquidity than investment grade securities.

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 Fund 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 Fund believes is its fair market value. In addition, transaction costs may be higher for restricted securities and the Fund may receive only limited information regarding the issuer of a restricted security. The Fund 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 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 maturities 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 four years, a 1% increase in interest rates could be expected to result in a 4% 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 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 performance to the extent the Fund is 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 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. 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.

Loan Interests Risk

Unlike publicly traded common stocks which trade on national exchanges, there is no central place or exchange for loans, including bank loans and senior loans, to trade. Loans trade in an over-the-counter market, and confirmation and settlement, which are effected through standardized procedures and documentation, may take significantly longer than seven days to complete. Extended trade settlement periods may, in unusual market conditions with a high volume of shareholder redemptions, present risk to shareholders regarding a Fund’s ability

43

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

to pay redemption proceeds within the allowable time periods stated in its prospectus. The secondary market for floating rate loans also may be subject to irregular trading activity and wide bid/ask spreads. The lack of an active trading market for certain loans may impair the ability of a Fund to sell its loan interests at a time when it may otherwise be desirable to do so or may require a Fund to sell them at prices that are less than what a Fund regards as their fair market value and may make it difficult to value such loans. Interest in loans made to finance highly leveraged companies or transactions, such as corporate acquisitions, may be especially vulnerable to adverse changes in economic or market conditions. When a Fund’s loan interest is a participation, the Fund is subject to the risk that the party selling the participation interest will not remit a Fund’s pro rata share of loan payments to the Fund, and the Fund may have less control over the exercise of remedies than the party selling the participation interest.

Market Disruption Risk

Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises and related geopolitical events have led, and in the future may continue to lead, to instability in world economies and markets generally. This instability has disrupted, and may continue to disrupt, U.S. and world economies and markets and adversely affect the value of your investment. Such market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Changes in value may be temporary or may last for extended periods. Although multiple asset classes have been and may continue to be affected by a market disruption, the duration and effects may not be the same for all types of assets. Events that have led to market disruptions include the recent pandemic spread of the novel coronavirus known as COVID-19, which has resulted in travel restrictions, closed international borders, quarantines, disruptions to supply chains and lower consumer demand. The duration and full effects of these market disruptions are still uncertain. The effect of recent efforts undertaken by the Federal Reserve System to address the economic impact of the COVID-19 pandemic, such as the reduction of the federal funds target rate, and other monetary and fiscal actions that may be taken by the U.S. federal government to stimulate the U.S. economy, are not yet known. In addition, COVID-19 could cause the need for employees and vendors at various businesses, including the Manager, the sub-advisor(s) or other service providers, to work at external locations, and extensive medical absences. Because a large epidemic may create significant market and business uncertainties and disruptions, not all events that could affect the business of the Manager, the sub-advisor(s) or other service providers can be determined and addressed in advance.

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

44

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

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 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. 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 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 a Fund’s investments in the United Kingdom and Europe.

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 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 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 and Extension Risk

Prepayment risk is the risk that the principal amount of a bond may be repaid prior to the bond’s maturity date. Due to a decline in interest rates or excess cash flow, a debt security may be called or otherwise prepaid

45

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

before maturity. If this occurs, no additional interest will be paid on the investment and the Fund may have to invest at a lower rate, may not benefit from an increase in value that may result from declining interest rates, and may lose any premium it paid to acquire the security. Variable and floating rate securities may be less sensitive to prepayment risk. Extension risk is the risk that a decrease in prepayments may, as a result of higher interest rates or other factors, result in the extension of a security’s effective maturity, heighten interest rate risk and increase the potential for a decline in its price.

Unrated Securities Risk

Because the Fund may purchase securities that are not rated by any rating organization, the Sub-Advisor, after assessing their credit quality, may internally assign ratings to certain of those securities in categories of those similar to those of rating organizations. Investing in unrated securities involves the risk that the Sub-Advisor may not accurately evaluate the security’s comparative credit rating. Analysis of the creditworthiness of issuers of unrated securities may be more complex than for issuers of higher-quality debt obligations. To the extent that the Fund invests in unrated securities, the Fund’s success in achieving its investment objectives may depend more heavily on the Sub-Advisor’s credit analysis than if the Fund invested exclusively in rated securities. Some unrated securities may not have an active trading market or may be difficult to value, which means the Fund might have difficulty selling them promptly at an acceptable price.

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 January 31, 2020 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 January 31, 2020		Year Ended January 31, 2019
Distributions paid from:
Ordinary income*
Institutional Class	$	3,635,223	$	4,264,570
Y Class		180,199		248,726
Investor Class		25,037		34,886
A Class		58,509		65,085
C Class		15,592		21,512
Total distributions paid	$	3,914,560	$	4,634,779

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

46

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

As of January 31, 2020, the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Crescent Short Duration High Income	$	70,544,194	$	1,323,079	$	(605,145	)	$	717,934

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences			Distributable Earnings
Crescent Short Duration High Income	$	717,934	$	24,693	$	–	$	(5,120,775	)	$	(896	)	$	(4,379,044	)

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, premium amortization accruals, unused capital losses 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 January 31, 2020.

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.

During the year ended January 31, 2020, the Fund had the following post RIC MOD capital loss carryforwards:

Fund	Short-Term Capital Loss Carryforwards		Long-Term Capital Loss Carryforwards
Crescent Short Duration High Income	$	1,945,383	$	3,175,392

The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

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 January 31, 2020 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
Crescent Short Duration High Income	$	70,519,371	$	83,568,329

A summary of the Fund’s transactions in the USG Select Fund for the year ended January 31, 2020 were as follows:

Fund	Type of Transaction	January  31, 2019 Shares/Fair Value		Purchases		Sales		January  31, 2020 Shares/Fair Value		Dividend Income
Crescent Short Duration High Income	Direct	$	3,744,678	$	54,889,827	$	56,054,294	$	2,580,211	$	74,253

47

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

8.  Borrowing Arrangements

Effective November 14, 2019 (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 12, 2020, 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 12, 2020 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 January 31, 2020, 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 January 31, 2020						Year Ended January 31, 2019
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		227,427		$	2,113,900			872,633		$	8,204,743
Reinvestment of dividends		390,561			3,628,749			458,266			4,263,813
Shares redeemed		(2,833,312	)		(26,298,543	)		(468,729	)		(4,349,929	)
Net increase (decrease) in shares outstanding		(2,215,324	)	$	(20,555,894	)		862,170		$	8,118,627
	Y Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		153,270		$	1,423,690			106,191		$	993,231
Reinvestment of dividends		18,580			172,530			25,164			234,241
Shares redeemed		(242,411	)		(2,246,371	)		(268,217	)		(2,513,830	)
Net decrease in shares outstanding		(70,561	)	$	(650,151	)		(136,862	)	$	(1,286,358	)
	Investor Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		83,906		$	777,417			49		$	451
Reinvestment of dividends		2,692			25,031			3,738			34,885
Shares redeemed		(84,883	)		(785,446	)		(42,354	)		(397,712	)
Net increase (decrease) in shares outstanding		1,715		$	17,002			(38,567	)	$	(362,376	)

48

American Beacon Crescent Short Duration High Income Fund^SM

Notes to Financial Statements

January 31, 2020

	A Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		10,651		$	98,737			706,492		$	6,385,353
Reinvestment of dividends		5,636			52,273			6,212			57,728
Shares redeemed		(55,614	)		(511,584	)		(697,093	)		(6,279,757	)
Net increase (decrease) in shares outstanding		(39,327	)	$	(360,574	)		15,611		$	163,324
	C Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Crescent Short Duration High Income Fund	Shares			Amount			Shares			Amount
Shares sold		40,113		$	372,904			89,689		$	810,176
Reinvestment of dividends		1,587			14,749			2,148			19,943
Shares redeemed		(53,147	)		(490,476	)		(82,017	)		(750,011	)
Net increase (decrease) in shares outstanding		(11,447	)	$	(102,823	)		9,820		$	80,108

10.  Subsequent Events

On March 4, 2020, the Board of the Trust approved a plan to liquidate and terminate the Fund on or about June 30, 2020.

Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a virus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations and individual issuers, all of which may negatively impact the Funds performance. Management’s evaluation is ongoing and the financial landscape continues to change.

49

American Beacon Crescent Short Duration High Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	9.16		$	9.59		$	9.64		$	9.01		$	9.68
Income (loss) from investment operations:
Net investment income		0.42			0.48			0.47			0.46			0.47
Net gains (losses) on investments (both realized and unrealized)		0.22			(0.43	)		(0.05	)		0.63			(0.67	)
Total income (loss) from investment operations		0.64			0.05			0.42			1.09			(0.20	)
Less distributions:
Dividends from net investment income		(0.44	)		(0.48	)		(0.47	)		(0.46	)		(0.47	)
Distributions from net realized gains		-			-			-			-			-
Total distributions		(0.44	)		(0.48	)		(0.47	)		(0.46	)		(0.47	)
Net asset value, end of period	$	9.36		$	9.16		$	9.59		$	9.64		$	9.01
Total returnA		7.15	%		0.60	%		4.45	%		12.38	%		(2.23	)%
Ratios and supplemental data:
Net assets, end of period	$	64,345,935		$	83,303,910		$	78,914,147		$	51,834,666		$	36,971,459
Ratios to average net assets:
Expenses, before reimbursements		1.15	%		1.08	%		1.07	%		1.26	%		1.27	%
Expenses, net of reimbursements		0.85	%		0.85	%		0.85	%		0.85	%		0.85	%
Net investment income, before expense reimbursements		4.32	%		4.92	%		4.66	%		4.51	%		4.41	%
Net investment income, net of reimbursements		4.62	%		5.15	%		4.89	%		4.93	%		4.83	%
Portfolio turnover rate		91	%		84	%		75	%		95	%		72	%
	Y Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	9.15		$	9.58		$	9.63		$	9.00		$	9.68
Income (loss) from investment operations:
Net investment income		0.42			0.49			0.46			0.45			0.46
Net gains (losses) on investments (both realized and unrealized)		0.21			(0.45	)		(0.05	)		0.63			(0.68	)
Total income (loss) from investment operations		0.63			0.04			0.41			1.08			(0.22	)
Less distributions:
Dividends from net investment income		(0.43	)		(0.47	)		(0.46	)		(0.45	)		(0.46	)
Distributions from net realized gains		-			-			-			-			-
Total distributions		(0.43	)		(0.47	)		(0.46	)		(0.45	)		(0.46	)
Net asset value, end of period	$	9.35		$	9.15		$	9.58		$	9.63		$	9.00
Total returnA		7.04	%		0.49	%		4.33	%		12.27	%		(2.39	)%
Ratios and supplemental data:
Net assets, end of period	$	3,802,336		$	4,369,096		$	5,883,759		$	6,277,416		$	8,481,991
Ratios to average net assets:
Expenses, before reimbursements		1.24	%		1.14	%		1.14	%		1.36	%		1.29	%
Expenses, net of reimbursements		0.95	%		0.95	%		0.95	%		0.95	%		0.95	%
Net investment income, before expense reimbursements		4.23	%		4.84	%		4.59	%		4.42	%		4.80	%
Net investment income, net of reimbursements		4.52	%		5.03	%		4.78	%		4.83	%		5.14	%
Portfolio turnover rate		91	%		84	%		75	%		95	%		72	%

^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

50

American Beacon Crescent Short Duration High Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	9.17		$	9.59		$	9.64		$	9.01		$	9.69
Income (loss) from investment operations:
Net investment income		0.40			0.45			0.44			0.43			0.44
Net gains (losses) on investments (both realized and unrealized)		0.20			(0.43	)		(0.06	)		0.63			(0.68	)
Total income (loss) from investment operations		0.60			0.02			0.38			1.06			(0.24	)
Less distributions:
Dividends from net investment income		(0.41	)		(0.44	)		(0.43	)		(0.43	)		(0.44	)
Distributions from net realized gains		-			-			-			-			-
Total distributions		(0.41	)		(0.44	)		(0.43	)		(0.43	)		(0.44	)
Net asset value, end of period	$	9.36		$	9.17		$	9.59		$	9.64		$	9.01
Total returnA		6.64	%		0.28	%		4.04	%		11.96	%		(2.67	)%
Ratios and supplemental data:
Net assets, end of period	$	611,120		$	582,797		$	979,646		$	2,679,338		$	3,560,159
Ratios to average net assets:
Expenses, before reimbursements		1.39	%		2.31	%		1.39	%		1.56	%		1.46	%
Expenses, net of reimbursements		1.23	%		1.23	%		1.23	%		1.23	%		1.23	%
Net investment income, before expense reimbursements		4.08	%		3.66	%		4.33	%		4.22	%		4.44	%
Net investment income, net of reimbursements		4.24	%		4.74	%		4.49	%		4.55	%		4.68	%
Portfolio turnover rate		91	%		84	%		75	%		95	%		72	%
	A Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	9.14		$	9.58		$	9.63		$	9.00		$	9.68
Income (loss) from investment operations:
Net investment income		0.39			0.43			0.43			0.43			0.43
Net gains (losses) on investments (both realized and unrealized)		0.21			(0.43	)		(0.05	)		0.63			(0.68	)
Total income (loss) from investment operations		0.60			-			0.38			1.06			(0.25	)
Less distributions:
Dividends from net investment income		(0.40	)		(0.44	)		(0.43	)		(0.43	)		(0.43	)
Distributions from net realized gains		-			-			-			-			-
Total distributions		(0.40	)		(0.44	)		(0.43	)		(0.43	)		(0.43	)
Net asset value, end of period	$	9.34		$	9.14		$	9.58		$	9.63		$	9.00
Total returnA		6.71	%		0.02	%		4.02	%		11.94	%		(2.71	)%
Ratios and supplemental data:
Net assets, end of period	$	1,379,649		$	1,710,171		$	1,642,414		$	1,183,362		$	1,033,329
Ratios to average net assets:
Expenses, before reimbursements		1.43	%		1.39	%		1.46	%		1.66	%		1.55	%
Expenses, net of reimbursements		1.25	%		1.25	%		1.25	%		1.25	%		1.25	%
Net investment income, before expense reimbursements		4.03	%		4.48	%		4.26	%		4.13	%		4.28	%
Net investment income, net of reimbursements		4.21	%		4.62	%		4.47	%		4.54	%		4.59	%
Portfolio turnover rate		91	%		84	%		75	%		95	%		72	%

^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

51

American Beacon Crescent Short Duration High Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31,
	2020			2019			2018			2017			2016
Net asset value, beginning of period	$	9.16		$	9.58		$	9.63		$	9.00		$	9.68
Income (loss) from investment operations:
Net investment income		0.32			0.37			0.36			0.35			0.36
Net gains (losses) on investments (both realized and unrealized)		0.21			(0.42	)		(0.05	)		0.63			(0.68	)
Total income (loss) from investment operations		0.53			(0.05	)		0.31			0.98			(0.32	)
Less distributions:
Dividends from net investment income		(0.33	)		(0.37	)		(0.36	)		(0.35	)		(0.36	)
Distributions from net realized gains		-			-			-			-			-
Total distributions		(0.33	)		(0.37	)		(0.36	)		(0.35	)		(0.36	)
Net asset value, end of period	$	9.36		$	9.16		$	9.58		$	9.63		$	9.00
Total returnA		5.91	%		(0.49	)%		3.24	%		11.10	%		(3.40	)%
Ratios and supplemental data:
Net assets, end of period	$	508,045		$	602,096		$	535,826		$	427,829		$	456,828
Ratios to average net assets:
Expenses, before reimbursements		2.23	%		2.17	%		2.21	%		2.41	%		2.36	%
Expenses, net of reimbursements		2.00	%		2.00	%		2.00	%		2.00	%		2.00	%
Net investment income, before expense reimbursements		3.22	%		3.86	%		3.51	%		3.37	%		3.76	%
Net investment income, net of reimbursements		3.45	%		4.03	%		3.71	%		3.78	%		4.12	%
Portfolio turnover rate		91	%		84	%		75	%		95	%		72	%

^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

52

American Beacon Crescent Short Duration High Income Fund^SM

Federal Tax Information

December 31, 2020 (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 January 31, 2020. 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 January 31, 2020. 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:

Crescent Short Duration High Income 0.00 % 

Qualified Dividend Income:

Crescent Short Duration High Income 0.00 % 

Long-Term Capital Gain Distributions:

Crescent Short Duration High Income $ -

Short-Term Capital Gain Distributions:

Crescent Short Duration High Income $ -

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

53

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, and the American Beacon Apollo Total Return 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
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (50)	Trustee since 2015	President, SJVIIF, LLC, Impact Investment Fund (2018-Present); Director, Kura MD, Inc. (local telehealth organization) (2015-2017); Senior Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Senior 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, Valley Healthcare Staffing (2017–2018); 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).
Joseph B. Armes (57)	Trustee since 2015	Director, Switchback Energy Acquisition (2019-Present); 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) (2013-2018); 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).
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).
Brenda A. Cline (59)	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 (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).

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
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
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); 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).
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).
Douglas A. Lindgren (58)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Consultant, Carne Financial Services (2017-2019); 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).
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.
R. Gerald Turner (74)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-2019); 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).

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	Term
	One Year
Gene L. Needles, Jr. (65)	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); Director, Green Harvest Asset Management (2019-Present); Director, National Investment Services of America, LLC (2019 – 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).
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, Green Harvest Asset Management (2019-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).

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
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).
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).
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).
Melinda G. Heika (58)	Principal Accounting Officer since 2017 and 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, Green Harvest Asset Management (2019-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).
Terri L. McKinney (56)	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).

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
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, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present); Director, National Investment Services of America, LLC (2019-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).
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).
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).

58

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 (63)	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).
Shelley D. Abrahams (45)	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);
Rebecca L. Harris (53)	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).
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); .
Peter A. Davidson (47)**	Assistant Secretary Since 2020	Assistant Secretary, American Beacon Select Funds (2020-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2020-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2020-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2020-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 75.

** Mr. Davidson was elected at the March 3, 2020 meeting of the Board.

59

American Beacon Funds^SM

Privacy Policy

January 31, 2020 (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.

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 end of each 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 sixty days after the end of each quarter.	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 PricewaterhouseCoopers LLP Boston, Massachusetts 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 Crescent Short Duration High Income Fund are service marks of American Beacon Advisors, Inc.

AR 01/20

About American Beacon Advisors

Since 1986, American Beacon Advisors, Inc. 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.

FRONTIER MARKETS INCOME FUND

Investing in foreign, emerging and frontier market securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in derivative instruments involves liquidity, credit, interest rate and market risks. The use of fixed-income securities entails interest rate and credit risks. 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.

GLG TOTAL RETURN FUND

Investing in foreign and emerging market securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in derivative instruments involves liquidity, credit, interest rate and market risks. The use of fixed-income securities entails interest rate and credit risks. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. 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 January 31, 2020

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 Frontier Markets Income Fund	12
American Beacon GLG Total Return Fund	26
Financial Statements	29
Notes to Financial Statements	33
Financial Highlights:
American Beacon Frontier Markets Income Fund	65
American Beacon GLG Total Return Fund	70
Federal Tax Information	76
Trustees and Officers of the American Beacon Funds	77
Privacy Policy	84

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   During the 12 months of this reporting period, news reports highlighted multiple disruptive headwinds in the global economy; among them the U.S. trade war with China and its toll on the global economy, Brexit, disruptions in the Middle East and protests in Hong Kong. And although the headlines seemed to be just starting during the period addressed in this report, it’s now undeniable that the global spread of the COVID-19 virus is having an overwhelming effect on the world’s markets, the full impact of which is unknown at this time.   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

Global Fixed-Income Market Overview

January 31, 2020 (Unaudited)

During the 12-month period ended January 31, 2020, hard currency sovereign bonds (as represented by JPMorgan Emerging Market Bond Index-Global Diversified) returned 11.9% and local currency bonds (as represented by JPMorgan Government Bond Index-Emerging Markets Global Diversified) returned 6.2%.

The key driver of strong performance during the period was the decline in yields in developed-market countries, particularly U.S. Treasuries. Lower yields, accompanied by a dovish shift among the primary central banks, reflected lingering concerns for the global economy as trade disputes, Brexit concerns and protests in Hong Kong and other countries weighed on sentiment.

While a defensive economic outlook may lead to caution among investors, the breadth of accommodation among central banks, including a notable expansion in the U.S. money supply, spurred confidence and encouraged investors to search for higher yields in emerging and frontier market countries. However, given the volatility throughout the period, investors preferred hard currency over local currency issues. The dovish tilt by central banks was mirrored by their emerging-market counterparts. Turkey, Egypt, Ukraine, Brazil and Russia cut interest rates reflecting declining inflation rates and stable currencies. In countries such as China, Indonesia and the Philippines, there were sizeable reductions in required reserve ratios.

Interest rates declined globally with little regard for country fundamentals, such as debt balances, fiscal policy, political stability or other comparable metrics. At the extreme, however, were countries such as Argentina, Lebanon, Ecuador, Zambia and Suriname, which were avoided by investors as they dealt with severe internal conflict.

Returns for the period were strong but ended on a weak note in January 2020 as headlines around the COVID-19 virus outbreak caused investors to reconsider their risk appetite. Lofty valuations in many countries were challenged by the uncertainty, which led to increased volatility as the year began.

2

American Beacon Frontier Markets Income Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

The Investor Class of the American Beacon Frontier Markets Income Fund (the “Fund”) returned 10.71% for the 12-month period ending January 31, 2020. The Fund underperformed the JPMorgan EMBI Global Diversified Index (hard currency) (the “Index”) return of 11.85% for the period. For additional comparison, the JPMorgan GBI-EM Global Diversified Index (local currency) returned 6.22%.

Comparison of Change in Value of a $10,000 Investment for the period from 2/25/2014 through 1/31/2020

Total Returns for the Period ended January 31, 2020
	Ticker	1 Year			3 Years			5 Years			Since Inception (02/25/2014)			Value of $10,000 02/25/2014- 1/31/2020
Institutional Class (1,3)	AGEIX		11.00	%		8.19	%		6.48	%		5.92	%		$	14,066
Y Class (1,3)	AGEYX		10.95	%		8.12	%		6.35	%		5.83	%		$	13,996
Investor Class (1,3)	AGEPX		10.71	%		7.86	%		6.11	%		5.56	%		$	13,787
A without Sales Charge (1,3)	AGUAX		10.77	%		7.76	%		6.06	%		5.51	%		$	13,747
A with Sales Charge (1,3)	AGUAX		5.53	%		6.02	%		5.04	%		4.65	%		$	13,092
C without Sales Charge (1,3)	AGECX		9.94	%		7.03	%		5.31	%		4.74	%		$	13,160
C with Sales Charge (1,3)	AGECX		8.94	%		7.03	%		5.31	%		4.74	%		$	13,160
JPMorgan EMBI Global Diversified Index (2)			11.85	%		6.71	%		6.36	%		6.51	%		$	14,535

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 call 1-800-967-9009 or visit www.americanbeaconfunds.com. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. 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. Performance prior to waiving fees was lower than actual returns shown for periods when fee waivers were in place for each Class. A portion of fees charged to the Institutional Class of the Fund was waived from Fund inception through 2015, partially recovered in 2016, waived in 2017 and 2018, and partially recovered in 2019. A portion of fees charged to the Investor Class of the Fund was waived from Fund inception through 2015, partially recovered in 2016, waived in 2017, and partially recovered in 2018. A portion of fees charged to the Y Class of the Fund was waived from Fund inception through 2015, partially recovered in 2016, waived in 2017, and partially recovered in 2019. A portion of fees charged to

3

American Beacon Frontier Markets Income Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

the A Class of the Fund was waived from Fund inception through 2015, partially recovered in 2016, waived in 2017, and partially recovered in 2018 and 2019. A portion of fees charged to the C Class of the Fund was waived from Fund inception through 2017 and was partially recovered in 2018 and 2019. A Class shares have a maximum sales charge of 4.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

2. The JPMorgan EMBI Global Diversified Index is an emerging market debt benchmark that tracks dollar-denominated bonds issued by frontier and emerging market governments. One cannot directly invest in an index.

3. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A and C Class shares were 1.19%, 1.28%, 1.51%, 1.52% and 2.27%, 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 ended the period with approximately 48% of its investments denominated in local currency bonds, which was the primary source of underperformance relative to the Index. Given the periodic volatility throughout the year, investors preferred the security of hard currency bonds while seeking higher yields available in frontier countries. The Fund actively allocates between hard and local currency as opportunities arise, whereas the Index includes only hard-currency issues. Returns within the frontier market countries were broadly consistent with those of the emerging market countries in the Index.

Markets began on a positive footing until concerns over the economic picture in Argentina and elections in Turkey and South Africa caused uncertainty. However, sentiment was boosted by increasingly supportive central banks, particularly as the U.S. Federal Reserve cut rates three times during the period. Escalating trade tensions between the U.S. and China also shook markets for most of the period. Nevertheless, in December 2019, U.S. and China signed a ‘phase-one’ trade deal and announced a partial backtrack on certain tariffs, which fueled hopes of a potential resolution to the 18-month trade war. As a result, December was one of the best months of 2019 for emerging market debt. As markets entered 2020, the optimism garnered from the improving global trade environment quickly reversed as the sudden rise of coronavirus in China dominated headlines causing investors to reduce risk exposure.

Within frontier market debt, after struggling during the first half of the period, Mozambique recovered somewhat as it obtained consent from bondholders to restructure its Eurobonds to reduce its debt burden. In Ukraine, President Volodymyr Zelensky’s Servant of the People Party won legislative elections giving him a full mandate to implement his agenda including a potential new International Monetary Fund loan agreement and other reform efforts. Elsewhere, citing weaker global economic activity and a moderation in domestic inflationary pressures, the Central Bank of Egypt continued with its accommodative monetary policy, slashing both the overnight deposit rate and lending rates. The Egyptian government also successfully issued U.S. $2 billion across 4-year, 12-year and 40-year bond tranches – its third issuance in global markets in 2019.

The Fund’s sub-advisors continue to utilize both top-down and bottom-up inputs to identify the best relative opportunities across the evolving frontier market spectrum to benefit performance over the long term.

Top Ten Holdings (% Net Assets)
Kenya Infrastructure Bond, 12.500%, Due 1/10/2033, Series 15YR		1.9
Zambia Government International Bond, 8.970%, Due 7/30/2027		1.5
Dominican Republic International Bond, 8.900%, Due 2/15/2023		1.3
Angolan Government International Bond, 9.500%, Due 11/12/2025		1.2
Mozambique International Bond, 5.000%, Due 9/15/2031		1.2
Senegal Government International Bond, 4.750%, Due 3/13/2028		1.2
El Salvador Government International Bond, 6.375%, Due 1/18/2027		1.0
Iraq International Bond, 6.752%, Due 3/9/2023		1.0
Ivory Coast Government International Bond, 5.250%, Due 3/22/2030		1.0
Pakistan Treasury Bills, 21.190%, Due 1/14/2021		1.0
Total Fund Holdings	248

4

American Beacon Frontier Markets Income Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

Top Ten Country Weightings (% Investments)
Egypt	7.3
Nigeria	6.5
Ghana	4.9
Kenya	4.8
Pakistan	4.5
Ukraine	4.5
Ivory Coast	4.4
Dominican Republic	3.8
Angola	3.5
Costa Rica	3.5
Sector Allocation (% Investments)
Foreign Sovereign Obligations	83.2
Credit-Linked Notes	9.0
Financial	3.3
Industrial	1.6
Energy	1.0
Consumer, Non-Cyclical	0.8
Basic Materials	0.6
Communications	0.4
Utilities	0.1

5

American Beacon Frontier Markets Income Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

Country Allocation (% Investments)
Egypt	7.3
Nigeria	6.5
Ghana	4.9
Kenya	4.8
Pakistan	4.5
Ukraine	4.5
Ivory Coast	4.4
Dominican Republic	3.8
Angola	3.5
Costa Rica	3.5
Ecuador	3.4
Zambia	3.3
Senegal	2.9
Mozambique	2.8
Belarus	2.5
Supranational	2.4
Uganda	2.4
Argentina	2.3
Iraq	2.3
El Salvador	2.2
Sri Lanka	2.2
Gabon	1.8
Kazakhstan	1.6
Mongolia	1.4
Georgia	1.2
Netherlands	1.2
Armenia	0.9
Cameroon	0.9
Congo	0.9
Rwanda	0.9
Tajikistan	0.9
Tunisia	0.9
Belize	0.8
Benin	0.8
Nicaragua	0.8
Kyrgyzstan	0.7
United Kingdom	0.7
Uruguay	0.7
Ethiopia	0.6
Papua New Guinea	0.6
Azerbaijan	0.5
Bahrain	0.4
Barbados	0.4
Laos	0.4
Montenegro	0.4
Paraguay	0.4
Spain	0.4
South Africa	0.4
Lebanon	0.3
Malawi	0.3
Suriname	0.3
Uzbekistan	0.3
Gambia	0.2
Honduras	0.2
Luxembourg	0.2
Singapore	0.1
United Republic of Tanzania	0.1

6

American Beacon GLG Total Return Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

The Investor Class of the American Beacon GLG Total Return Fund (the “Fund”) returned -1.10% for the 12-month period ended January 31, 2020. The Fund underperformed the ICE BofA 3-Month U.S. Dollar LIBOR Constant Maturity Index (the “Index”) return of 2.54% for the same period. For additional comparison, the JPMorgan EMBI Global Index (hard currency) returned 11.48%, and the JPMorgan GBI-EM Global Diversified Index (local currency) returned 11.85%.

Comparison of Change in Value of a $10,000 Investment for the period from 5/20/2016 through 1/31/2020

Total Returns for the Period ended January 31, 2020
	Ticker	1 Year			3 Year			Since Inception (05/20/2016)			Value of $10,000 05/20/2016- 1/31/2020
Institutional Class (1,3)	GLGIX		(0.79	)%		(0.32	)%		1.82	%		$	10,692
Y Class (1,3)	GLGYX		(0.89	)%		(0.50	)%		1.65	%		$	10,624
Investor Class (1,3)	GLGPX		(1.10	)%		(0.73	)%		1.41	%		$	10,531
A without Sales Charge (1,3)	GLGAX		(1.10	)%		(0.76	)%		1.38	%		$	10,520
A Class with Sales Charge (1,3)	GLGAX		(5.79	)%		(2.36	)%		0.05	%		$	10,019
C without Sales Charge (1,3)	GLGCX		(1.92	)%		(1.49	)%		0.62	%		$	10,233
C Class with Sales Charge (1,3)	GLGCX		(2.92	)%		(1.49	)%		0.62	%		$	10,233
Ultra Class (1,3)	GLGUX		(0.69	)%		(0.26	)%		1.87	%		$	10,710
ICE BofA 3-Month U.S. Dollar LIBOR Constant Maturity Index (2)			2.54	%		1.97	%		1.73	%		$	10,656
JPMorgan EMBI Global Index (2)			11.48	%		6.17	%		6.30	%		$	12,538

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 fees charged to the Institutional, A and C Classes of the Fund was waived from Fund inception through 2017 and partially recovered in 2018 and 2019. Performance prior to waiving fees was lower than actual returns shown through 2017. A portion of fees charged to the Investor and Ultra Classes of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than actual

7

American Beacon GLG Total Return Fund^SM

Performance Overview

January 31, 2020 (Unaudited)

returns shown since inception. A portion of fees charged to the Y Class of the Fund was waived from Fund inception through 2018 and partially recovered in 2019. Performance prior to waiving fees was lower than actual returns shown through 2018. A Class shares have a maximum sales charge of 4.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

2. The ICE BofA U.S. Dollar 3-Month LIBOR Constant Maturity Index represents the London Interbank Offered Rate (LIBOR) with a constant 3-month average maturity. LIBOR is a composite of the rates of interest at which banks borrow from one another in the London market, and it is a widely used benchmark for short-term interest rates. The JPMorgan EMBI Global Index is an emerging market debt benchmark that tracks dollar-denominated bonds issued by emerging market governments. One cannot directly invest in an index.

3. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Institutional, Y, Investor, A, C and Ultra Class shares were 1.03%, 1.05%, 1.80%, 1.31%, 2.06% and 1.05%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

Emerging market debt rebounded during the period as the Fed and other central banks embraced accommodative monetary policy given global economic and political uncertainties. The support gave investors confidence to return to investments they fled during the volatile fourth quarter of 2018. Strong investor demand and slowing global economies led interest rates to decline in many countries generating attractive returns among the bond indexes. Hard currency bonds outperformed local currency issues for much of the period, reflecting a desire among investors to earn higher yield within the safety of hard currencies. Additionally, accommodation among central banks gave emerging market countries flexibility to lower their own interest rates, which put pressure on currencies.

The Fund, however, maintained its defensive posture toward the credit and currency markets based on deteriorating fundamentals, expensive valuations, crowded investor positioning and other macroeconomic inputs. While the recent central bank action has supported the markets, the Fund’s sub-advisor anticipates that the ultimate removal of excess liquidity will cause investors to pull assets from the risky investments they sought during the era of easy money. The conditions that favored emerging markets debt for so long are expected to gradually change.

During the period, the Fund was short a variety of local currencies including the Brazilian peso, Indonesian rupiah, Colombian peso and South African rand. The Fund was also short credit exposure to countries including Brazil, Colombia, Indonesia, South Africa, Lebanon and Russia, among others, as spreads became too narrow.

The Fund sought to invest selectively in opportunities to generate income while maintaining a highly defensive posture. The Fund’s weighted average duration continued to remain near zero during the period as well.

Top Ten Holdings (% Net Assets)*
U.S. Treasury Bills, 1.560%, Due 6/4/2020		47.7
U.S. Treasury Bills, 1.565%, Due 6/18/2020		44.8
U.S. Treasury Bills, 1.506%, Due 6/11/2020		2.3
U.S. Treasury Bills, 1.545%, Due 7/9/2020		0.3
Total Fund Holdings	4

* The table excludes investments in currencies, money market funds and derivatives.

Sector Exposures (% Net Assets)(1)
U.S. Treasury Obligations	95.1
Country Allocation (% Investments)(1)
United States	100.0

1. This table does not include derivative instruments.

8

American Beacon Funds^SM

Expense Examples

January 31, 2020 (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 August 1, 2019 through January 31, 2020.

Actual Expenses

The “Actual” lines of 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” 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 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 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 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 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 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

January 31, 2020 (Unaudited)

American Beacon Frontier Markets Income Fund
	Beginning Account Value 8/1/2019		Ending Account Value 1/31/2020		Expenses Paid During Period 8/1/2019-1/31/2020*
R5 Class
Actual		$1,000.00		$1,040.90		$5.97
Hypothetical**		$1,000.00		$1,019.36		$5.90
Y Class
Actual		$1,000.00		$1,039.60		$6.37
Hypothetical**		$1,000.00		$1,018.96		$6.31
Investor Class
Actual		$1,000.00		$1,039.60		$7.45
Hypothetical**		$1,000.00		$1,017.90		$7.38
A Class
Actual		$1,000.00		$1,038.90		$8.07
Hypothetical**		$1,000.00		$1,017.29		$7.98
C Class
Actual		$1,000.00		$1,035.80		$11.49
Hypothetical**		$1,000.00		$1,013.91		$11.37

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.16%, 1.24%, 1.45%, 1.57%, and 2.24% for the Institutional, Y, Investor, A, and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

American Beacon GLG Total Return Fund
	Beginning Account Value 8/1/2019		Ending Account Value 1/31/2020		Expenses Paid During Period 8/1/2019-1/31/2020*
Institutional Class
Actual		$1,000.00		$997.00		$5.69
Hypothetical**		$1,000.00		$1,019.51		$5.75
Y Class
Actual		$1,000.00		$995.00		$6.94
Hypothetical**		$1,000.00		$1,018.25		$7.02
Investor Class
Actual		$1,000.00		$996.00		$7.35
Hypothetical**		$1,000.00		$1,017.85		$7.43
A Class
Actual		$1,000.00		$996.00		$7.45
Hypothetical**		$1,000.00		$1,017.75		$7.53
C Class
Actual		$1,000.00		$991.80		$11.20
Hypothetical**		$1,000.00		$1,013.96		$11.32
Ultra Class
Actual		$1,000.00		$998.00		$4.99
Hypothetical**		$1,000.00		$1,020.22		$5.04

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 1.13%, 1.38%, 1.46%, 1.48%, 2.23%, and 0.99% for the Institutional, Y, Investor, A, C, and Ultra 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 Board of Trustees of American Beacon Funds and the Shareholders of American Beacon Frontier Markets Income Fund and American Beacon GLG Total Return Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of American Beacon Frontier Markets Income Fund and American Beacon GLG Total Return Fund (two of the series constituting American Beacon Funds, referred to hereafter as the “Funds”) as of January 31, 2020, the related statements of operations for the year ended January 31, 2020, the statements of changes in net assets for each of the two years in the period ended January 31, 2020, including the related notes, and the financial highlights for each of the periods indicated in the table below (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 as of January 31, 2020, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended January 31, 2020 and each of the financial highlights for each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.

Fund Name	Financial Highlights
American Beacon Frontier Markets Income Fund	For each of the five years in the period ended January 31, 2020
American Beacon GLG Total Return Fund	For the years ended January 31, 2020, 2019 and 2018, and the period from May 20, 2016 (commencement of operations) through January 31, 2017

The financial statements of American Beacon Frontier Markets Income Fund as of and for the year ended January 31, 2016 and the financial highlights for each of the periods ended on or prior to January 31, 2016 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated March 31, 2016 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinions

These financial statements are the responsibility of the Funds’ 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 Funds 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 of these financial statements 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.

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 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. Our procedures included confirmation of securities owned as of January 31, 2020 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Dallas, TX

March 30, 2020

We have served as the auditor of one or more investment companies in the American Beacon family of funds since 2016.

11

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
Angola - 3.21%
Credit-Linked Notes - 0.16%
Republic of Angola (Issuer Aurora Australis B.V.), 8.143%, Due 12/19/2023, (6-mo. USD LIBOR + 6.250%)A B		$	750,000		$	754,575
Foreign Sovereign Obligations - 3.05%
Angolan Government International Bond,
9.500%, Due 11/12/2025B			4,950,000			5,765,136
8.250%, Due 5/9/2028B			3,530,000			3,801,775
8.000%, Due 11/26/2029, Series 144AC			3,360,000			3,551,587
9.375%, Due 5/8/2048B			985,000			1,066,921
Total Foreign Sovereign Obligations						14,185,419
Total Angola (Cost $13,842,854)						14,939,994
Argentina - 2.06%
Foreign Sovereign Obligations - 2.06%
Argentina Bonar Bonds,
42.524%, Due 3/1/2020, (BADLARP Index + 3.250%)A		ARS	4,500,000			66,644
38.154%, Due 4/3/2022, (BADLARP Index + 2.000%)A		ARS	92,100,000			969,556
Argentine Republic Government International Bond,
5.000%, Due 1/15/2027B		EUR	3,070,000			1,421,497
5.875%, Due 1/11/2028			7,100,000			3,106,250
Argentinga Treasury Bills,
3.685%, Due 5/28/2020		ARS	186,685,000			2,604,618
0.459%, Due 10/29/2020		ARS	61,897,641			664,790
Provincia de Buenos Aires,
43.104%, Due 5/31/2022, (BADLARP Index + 3.830%)A			ARS35,000,000			330,472
39.294%, Due 4/12/2025, (BADLARP Index + 3.750%)A B C		ARS	51,500,000			444,456
Total Foreign Sovereign Obligations						9,608,283
Total Argentina (Cost $18,147,689)						9,608,283
Armenia - 0.78%
Foreign Sovereign Obligations - 0.78%
Republic of Armenia International Bond,
7.150%, Due 3/26/2025B			2,540,000			3,000,400
3.950%, Due 9/26/2029, Series 144AC			620,000			626,029
Total Foreign Sovereign Obligations						3,626,429
Total Armenia (Cost $3,427,487)						3,626,429
Azerbaijan - 0.43% (Cost $2,000,000)
Credit-Linked Notes - 0.43%
Republic of Azerbaijan (Issuer Frontera Capital B.V.), 14.000%, Due 3/30/2020, Series BC D			2,000,000			2,004,000
Bahrain - 0.37%
Foreign Corporate Obligations - 0.37%
Oil and Gas Holding Co. BSCC,
7.625%, Due 11/7/2024B			400,000			468,050
7.625%, Due 11/7/2024, Series 144AC			1,075,000			1,257,883
Total Foreign Corporate Obligations						1,725,933
Total Bahrain (Cost $1,580,198)						1,725,933
Barbados - 0.38%
Foreign Corporate Obligations - 0.06%
Sagicor Finance Ltd., 8.875%, Due 8/11/2022B			279,000			288,765
Foreign Sovereign Obligations - 0.32%
Barbados Government International Bond, 6.500%, Due 10/1/2029, Series 144AC			1,469,100			1,478,282
Total Barbados (Cost $1,741,185)						1,767,047

See accompanying notes

12

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
Belarus - 2.28%
Foreign Sovereign Obligations - 2.28%
Development Bank of the Republic of Belarus JSC,
12.000%, Due 5/15/2022B		BYN	3,100,000		$	1,456,917
12.000%, Due 5/15/2022, Series 144AC		BYN	2,432,000			1,142,975
6.750%, Due 5/2/2024B		$	1,400,000			1,488,452
6.750%, Due 5/2/2024, Series 144AC			2,030,000			2,158,255
Republic of Belarus International Bond,
6.875%, Due 2/28/2023B			1,710,000			1,842,012
7.625%, Due 6/29/2027B			997,000			1,150,608
6.200%, Due 2/28/2030B			1,250,000			1,361,025
Total Foreign Sovereign Obligations						10,600,244
Total Belarus (Cost $10,269,984)						10,600,244
Belize - 0.71% (Cost $3,362,391)
Foreign Sovereign Obligations - 0.71%
Belize Government International Bond, 4.938%, Due 2/20/2034B E			5,288,500			3,292,091
Benin - 0.73% (Cost $3,395,770)
Foreign Sovereign Obligations - 0.73%
Benin Government International Bond, 5.750%, Due 3/26/2026B		EUR	2,988,000			3,422,534
Bosnia & Herzegovina - 0.02% (Cost $122,990)
Foreign Sovereign Obligations - 0.02%
Bosnia & Herzegovina Government International Bond, 0.438%, Due 12/20/2021, Series B, (6-mo. EUR LIBOR + 0.813%)A B F		EUR	187,030			94,029
Cameroon, United Republic Of - 0.78% (Cost $3,409,817)
Foreign Sovereign Obligations - 0.78%
Republic of Cameroon International Bond, 9.500%, Due 11/19/2025B			3,200,000			3,642,189
Congo - 0.77% (Cost $3,592,996)
Foreign Corporate Obligations - 0.77%
HTA Group Ltd., 9.125%, Due 3/8/2022B			3,500,000			3,597,545
Costa Rica - 3.19%
Foreign Corporate Obligations - 0.36%
Autopistas del Sol S.A., 7.375%, Due 12/30/2030B			1,637,152			1,692,406
Foreign Sovereign Obligations - 2.83%
Costa Rica Government International Bond,
8.050%, Due 9/18/2024B		CRC	2,250,000,000			4,088,120
9.660%, Due 9/30/2026B		CRC	2,250,000,000			4,345,748
9.200%, Due 2/21/2029B			2,500,000			3,000,000
10.580%, Due 9/26/2029B		CRC	800,000,000			1,567,040
10.350%, Due 6/19/2030B		CRC	81,500,000			157,759
Total Foreign Sovereign Obligations						13,158,667
Total Costa Rica (Cost $13,221,734)						14,851,073
Dominican Republic - 3.44%
Foreign Sovereign Obligations - 3.44%
Dominican Republic Bond,
10.500%, Due 4/7/2023B		DOP	57,000,000			1,096,391
10.750%, Due 8/11/2028B		DOP	30,000,000			581,074
Dominican Republic International Bond,
8.900%, Due 2/15/2023B		DOP	315,700,000			5,900,136
11.500%, Due 5/10/2024B		DOP	200,000,000			3,991,629
9.750%, Due 6/5/2026B		DOP	76,450,000			1,456,224
9.750%, Due 6/5/2026, Series 144AC		DOP	157,000,000			2,990,546
Total Foreign Sovereign Obligations						16,016,000
Total Dominican Republic (Cost $17,385,888)						16,016,000

See accompanying notes

13

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
Ecuador - 3.08%
Foreign Sovereign Obligations - 3.08%
Ecuador Government International Bond,
10.500%, Due 3/24/2020B		$	517,000		$	517,000
10.750%, Due 3/28/2022B			770,000			762,300
8.750%, Due 6/2/2023B			1,200,000			1,119,000
7.950%, Due 6/20/2024B			1,000,000			880,000
7.875%, Due 3/27/2025, Series 144AC			1,500,000			1,282,500
9.650%, Due 12/13/2026B			3,170,000			2,813,375
9.625%, Due 6/2/2027B			500,000			440,000
8.875%, Due 10/23/2027B			2,850,000			2,411,812
7.875%, Due 1/23/2028B			2,345,000			1,905,336
10.750%, Due 1/31/2029B			450,000			408,375
9.500%, Due 3/27/2030B			600,000			514,500
9.500%, Due 3/27/2030, Series 144AC			1,500,000			1,286,250
Total Foreign Sovereign Obligations						14,340,448
Total Ecuador (Cost $15,961,726)						14,340,448
Egypt - 6.59%
Foreign Sovereign Obligations - 6.59%
Egypt Government Bond,
16.000%, Due 6/11/2022, Series 3YR		EGP	30,200,000			1,980,546
16.300%, Due 1/1/2023, Series 10YR		EGP	39,300,000			2,633,214
16.300%, Due 4/9/2024, Series 5YR		EGP	13,990,000			952,786
15.900%, Due 9/9/2024, Series 10YR		EGP	5,280,000			357,093
17.180%, Due 5/9/2027, Series 10YR		EGP	14,500,000			1,054,747
15.700%, Due 11/7/2027, Series 10YR		EGP	10,000,000			687,528
13.564%, Due 1/14/2030, Series 10Y		EGP	40,000,000			2,495,699
Egypt Government International Bond,
6.200%, Due 3/1/2024B			600,000			651,120
6.200%, Due 3/1/2024, Series 144AC			550,000			596,860
7.600%, Due 3/1/2029B			650,000			727,545
7.600%, Due 3/1/2029, Series 144AC			1,277,000			1,429,346
Egypt Treasury Bills,
15.292%, Due 4/14/2020, Series 364D		EGP	54,000,000			3,326,434
10.429%, Due 4/28/2020, Series 364D		EGP	44,100,000			2,701,838
17.140%, Due 7/7/2020, Series 364D		EGP	27,950,000			1,665,986
14.650%, Due 12/8/2020, Series 364D		EGP	50,000,000			2,814,380
13.684%, Due 1/5/2021, Series 364D		EGP	72,000,000			4,020,275
14.165%, Due 1/19/2021, Series 364D		EGP	46,200,000			2,572,051
Total Foreign Sovereign Obligations						30,667,448
Total Egypt (Cost $28,932,308)						30,667,448
El Salvador - 1.97%
Foreign Corporate Obligations - 0.09%
AES El Salvador Trust, 6.750%, Due 3/28/2023B			400,000			405,500
Foreign Sovereign Obligations - 1.88%
El Salvador Government International Bond,
5.875%, Due 1/30/2025B			2,100,000			2,256,450
6.375%, Due 1/18/2027B			4,400,000			4,818,000
7.625%, Due 2/1/2041B			1,450,000			1,685,625
Total Foreign Sovereign Obligations						8,760,075
Total El Salvador (Cost $8,440,440)						9,165,575
Ethiopia - 0.58% (Cost $2,483,316)
Foreign Sovereign Obligations - 0.58%
Ethiopia International Bond, 6.625%, Due 12/11/2024B			2,500,000			2,700,500

See accompanying notes

14

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
Gabon - 1.63%
Foreign Sovereign Obligations - 1.63%
Gabon Government International Bond,
6.375%, Due 12/12/2024B		$	4,250,000		$	4,563,233
6.950%, Due 6/16/2025B			900,000			971,024
6.625%, Due 2/6/2031C			2,050,000			2,062,724
Total Foreign Sovereign Obligations						7,596,981
Total Gabon (Cost $7,060,636)						7,596,981
Gambia - 0.14% (Cost $686,666)
Credit-Linked Notes - 0.14%
Republic of Gambia (Issuer Zambezi B.V.), 11.180%, Due 9/11/2020C D			686,701			652,260
Georgia - 1.10%
Credit-Linked Notes - 0.44%
Georgia Government (Issuer Frontera Capital B.V.), 10.000%, Due 8/4/2021B D			403,930			375,170
Georgia Government (Issuer Zambezi B.V.), 9.500%, Due 8/9/2022C			2,000,000			1,654,131
Total Credit-Linked Notes						2,029,301
Foreign Corporate Obligations - 0.66%
Bank of Georgia JSC, 11.000%, Due 6/1/2020B		GEL	8,950,000			3,095,902
Total Georgia (Cost $5,658,320)						5,125,203
Ghana - 4.41%
Credit-Linked Notes - 0.05%
Ghana Promissory Notes (Issuer Saderea DAC), 12.500%, Due 11/30/2026B			213,667			232,897
Foreign Sovereign Obligations - 4.36%
Ghana Government International Bond
10.750%, Due 10/14/2030B			890,000			1,143,276
8.125%, Due 3/26/2032B			3,900,000			3,997,110
8.950%, Due 3/26/2051B			220,000			224,716
Republic of Ghana Government Bonds,
16.500%, Due 3/22/2021, Series 3Y		GHS	15,950,000			2,869,752
24.750%, Due 7/19/2021, Series 5YR		GHS	16,180,000			3,169,189
18.750%, Due 1/24/2022, Series 5YR		GHS	2,000,000			357,443
19.700%, Due 5/23/2022, Series 3Y		GHS	1,400,000			253,106
18.250%, Due 7/25/2022, Series 5Y		GHS	11,225,000			1,973,435
20.750%, Due 1/16/2023		GHS	10,050,000			1,853,801
16.500%, Due 2/6/2023, Series 5Y		GHS	8,200,000			1,374,438
21.000%, Due 1/27/2025		GHS	1,680,000			312,754
19.000%, Due 11/2/2026, Series 10Y		GHS	15,875,000			2,754,304
Total Foreign Sovereign Obligations						20,283,324
Total Ghana (Cost $22,920,336)						20,516,221
Honduras - 0.19% (Cost $861,476)
Foreign Corporate Obligations - 0.19%
Inversiones Atlantida S.A., 8.250%, Due 7/28/2022B			840,000			871,500
Iraq - 2.10%
Foreign Sovereign Obligations - 2.10%
Iraq International Bond,
6.752%, Due 3/9/2023B			7,380,000			7,445,830
5.800%, Due 1/15/2028B			2,450,000			2,353,445
Total Foreign Sovereign Obligations						9,799,275
Total Iraq (Cost $9,438,865)						9,799,275

See accompanying notes

15

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
Ivory Coast - 3.98%
Foreign Sovereign Obligations - 3.98%
Ivory Coast Government International Bond,
5.250%, Due 3/22/2030B		EUR	4,140,000		$	4,763,645
5.875%, Due 10/17/2031, Series 144AC		EUR	2,250,000			2,641,290
5.750%, Due 12/31/2032B E		$	7,353,000			7,325,794
6.125%, Due 6/15/2033B			3,700,000			3,791,612
Total Foreign Sovereign Obligations						18,522,341
Total Ivory Coast (Cost $17,888,242)						18,522,341
Kazakhstan - 1.47%
Credit-Linked Notes - 0.40%
National Bank of Kazakhstan (Issuer Citigroup Global Markets Holdings, Inc.),
Due 2/10/2020B G		KZT	140,000,000			368,726
Due 3/17/2020B G		KZT	565,000,000			1,474,665
Total Credit-Linked Notes						1,843,391
Foreign Corporate Obligations - 1.07%
Development Bank of Kazakhstan JSC,
9.500%, Due 12/14/2020B		KZT	1,450,000,000			3,777,764
8.950%, Due 5/4/2023B		KZT	486,250,000			1,205,223
Total Foreign Corporate Obligations						4,982,987
Total Kazakhstan (Cost $6,839,583)						6,826,378
Kenya - 4.36%
Foreign Sovereign Obligations - 4.36%
Kenya Government International Bond, 8.250%, Due 2/28/2048B			3,300,000			3,551,757
Kenya Infrastructure Bond,
12.000%, Due 9/18/2023, Series 12YR		KES	23,900,000			245,686
11.000%, Due 12/2/2024, Series 9YR		KES	75,000,000			769,843
12.500%, Due 5/12/2025, Series 9YR		KES	36,000,000			380,065
11.000%, Due 10/12/2026, Series 12YR		KES	171,850,000			1,753,403
11.000%, Due 3/15/2027, Series 12YR		KES	187,000,000			1,892,424
12.000%, Due 10/6/2031, Series 15YR		KES	288,000,000			2,987,866
12.500%, Due 1/10/2033, Series 15YR		KES	811,000,000			8,708,309
Total Foreign Sovereign Obligations						20,289,353
Total Kenya (Cost $19,218,401)						20,289,353
Kyrgyzstan - 0.67%
Credit-Linked Notes - 0.67%
Kyrgyz Republic (Issuer Frontera Capital B.V.), 8.000%, Due 5/26/2025		KGS	70,000,000			888,504
Kyrgyz Republic (Issuer Zambezi B.V.), 10.000%, Due 4/13/2028C		KGS	180,000,000			2,245,555
Total Credit-Linked Notes						3,134,059
Total Kyrgyzstan (Cost $3,274,462)						3,134,059
Laos - 0.33% (Cost $1,542,763)
Foreign Sovereign Obligations - 0.33%
Lao People’s Democratic Republic International Bond, 6.875%, Due 6/30/2021, Series 144AC			1,576,000			1,548,420
Lebanon - 0.26%
Foreign Sovereign Obligations - 0.26%
Lebanon Government International Bond,
6.650%, Due 4/22/2024B			670,000			251,250
6.200%, Due 2/26/2025, Series GMTNB			1,000,000			373,250
6.750%, Due 11/29/2027B			335,000			123,280
6.850%, Due 5/25/2029			1,000,000			360,200
7.250%, Due 3/23/2037B			335,000			121,270
Total Foreign Sovereign Obligations						1,229,250
Total Lebanon (Cost $2,676,643)						1,229,250

See accompanying notes

16

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
Luxembourg - 0.20% (Cost $944,820)
Foreign Corporate Obligations - 0.20%
Kernel Holding S.A., 8.750%, Due 1/31/2022B		KGS	890,000		$	938,870
Malawi - 0.25% (Cost $1,099,203)
Credit-Linked Notes - 0.25%
Republic of Malawi (Issuer Zambezi B.V.), 12.000%, Due 10/8/2020C		$	1,100,000			1,175,957
Mongolia - 1.26%
Foreign Sovereign Obligations - 1.26%
Development Bank of Mongolia LLC, 7.250%, Due 10/23/2023B			725,000			768,500
Mongolia Government International Bond, 8.750%, Due 3/9/2024B			4,500,000			5,085,000
Total Foreign Sovereign Obligations						5,853,500
Total Mongolia (Cost $5,601,587)						5,853,500
Montenegro - 0.37% (Cost $1,672,099)
Foreign Sovereign Obligations - 0.37%
Montenegro Government International Bond, 2.550%, Due 10/3/2029, Series 144AC		EUR	1,550,000			1,732,091
Mozambique - 2.58%
Credit-Linked Notes - 0.85%
Mozambique Government Bonds (Issuer ICBC Standard Bank PLC), 27.000%, Due 2/26/2020		MZN	180,000,000			2,591,057
Republic of Mozambique (Issuer ICBC Standard Bank PLC), 19.000%, Due 3/28/2021B C D		MZN	90,500,000			1,391,001
Total Credit-Linked Notes						3,982,058
Foreign Sovereign Obligations - 1.73%
Mozambique International Bond,
5.000%, Due 9/15/2031B			6,075,000			5,802,840
5.000%, Due 9/15/2031, Series 144AC			2,353,000			2,247,586
Total Foreign Sovereign Obligations						8,050,426
Total Mozambique (Cost $11,482,388)						12,032,484
Netherlands - 1.12%
Foreign Sovereign Obligations - 1.12%
Nederlandse Financierings Maatschappij voor Ontwikkelingslanden N.V.,
7.350%, Due 9/11/2020, Series EMTNB			650,000			558,794
8.910%, Due 4/6/2021, Series EMTN, (GGRRC9MX - 0.200%)A			3,500,000			2,880,978
9.280%, Due 1/9/2022, Series EMT3			800,000			791,412
Republic of Angola Via Avenir II B.V., 6.388%, Due 12/7/2023 (6-mo. USD LIBOR + 4.500%)A B			1,000,000			975,000
Total Foreign Sovereign Obligations						5,206,184
Total Netherlands (Cost $5,912,662)						5,206,184
Nicaragua - 0.77%
Credit-Linked Notes - 0.77%
Empresa Administadora de Aeropuertos Internacionales (Issuer Zambezi B.V.), Due 4/8/2024C D			1,159,400			1,113,469
Republic of Nicaragua (Issuer Zambezi B.V.), 6.750%, Due 8/5/2022C			2,400,000			2,471,575
Total Credit-Linked Notes						3,585,044
Total Nicaragua (Cost $3,559,240)						3,585,044
Nigeria - 5.90%
Credit-Linked Notes - 0.45%
Republic of Nigeria (Issuer Citigroup Global Markets Holdings, Inc.),
Due 2/11/2020C G		NGN	184,912,323			508,352
Due 7/21/2020G		NGN	603,079,110			1,571,606
Total Credit-Linked Notes						2,079,958

See accompanying notes

17

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
Nigeria - 5.90% (continued)
Foreign Corporate Obligations - 0.83%
Access Bank PLC, 10.500%, Due 10/19/2021B		$	390,000		$	431,535
IHS Netherlands Holdco B.V., 8.000%, Due 9/18/2027C			715,000			772,200
SEPLAT Petroleum Development Co. PLC, 9.250%, Due 4/1/2023B			1,150,000			1,198,829
United Bank for Africa PLC, 7.750%, Due 6/8/2022B			1,360,000			1,448,150
Total Foreign Corporate Obligations						3,850,714
Foreign Sovereign Obligations - 4.62%
Nigeria Government Bond,
15.540%, Due 2/13/2020, Series 5YR		NGN	310,000,000			856,828
12.750%, Due 4/27/2023, Series 5YR		NGN	286,000,000			869,881
12.500%, Due 1/22/2026, Series 10YR		NGN	431,600,000			1,327,690
16.288%, Due 3/17/2027, Series 10YR		NGN	458,560,000			1,618,143
Nigeria OMO Bills,
12.374%, Due 2/6/2020		NGN	1,210,000,000			3,326,451
12.193%, Due 2/27/2020		NGN	636,200,000			1,735,996
12.908%, Due 6/18/2020		NGN	673,000,000			1,768,333
12.212%, Due 8/13/2020		NGN	414,000,000			1,063,564
13.726%, Due 9/3/2020		NGN	238,000,000			606,694
12.770%, Due 9/17/2020		NGN	233,000,000			591,121
26.683%, Due 10/8/2020		NGN	540,000,000			1,359,240
41.430%, Due 10/27/2020		NGN	270,000,000			679,620
14.896%, Due 12/1/2020		NGN	648,000,000			1,597,788
14.680%, Due 12/8/2020		NGN	217,000,000			533,074
5.432%, Due 12/29/2020		NGN	335,270,000			817,791
9.416%, Due 12/29/2020		NGN	578,200,000			1,410,347
14.699%, Due 1/5/2021		NGN	277,000,000			672,489
14.771%, Due 1/12/2021		NGN	277,000,000			671,971
Total Foreign Sovereign Obligations						21,507,021
Total Nigeria (Cost $26,814,067)						27,437,693
Pakistan - 4.07%
Credit-Linked Notes - 0.57%
Republic of Pakistan (Issuer Citigroup Global Markets Holdings, Inc.), Due 7/20/2020C G		PKR	431,813,403			2,636,547
Foreign Sovereign Obligations - 3.50%
Pakistan Government International Bond,
8.250%, Due 4/15/2024B			400,000			449,131
6.875%, Due 12/5/2027B			3,050,000			3,219,293
Pakistan Treasury Bills,
14.055%, Due 7/16/2020		PKR	280,000,000			1,708,161
14.150%, Due 8/27/2020		PKR	450,000,000			2,706,025
6.945%, Due 9/10/2020		PKR	225,000,000			1,346,638
13.110%, Due 12/31/2020F J		PKR	225,000,000			1,299,170
21.190%, Due 1/14/2021		PKR	845,000,000			4,844,773
13.210%, Due 1/28/2021		PKR	125,000,000			715,995
Total Foreign Sovereign Obligations						16,289,186
Total Pakistan (Cost $18,518,185)						18,925,733
Papua New Guinea - 0.56% (Cost $2,455,027)
Foreign Sovereign Obligations - 0.56%
Papua New Guinea Government International Bond, 8.375%, Due 10/4/2028B			2,401,000			2,599,083
Paraguay - 0.36% (Cost $2,000,407)
Credit-Linked Notes - 0.36%
Municipalidad De Asuncion (Issuer Zambezi B.V.), 11.000%, Due 3/23/2027C			2,000,000			1,668,953
Rwanda - 0.81% (Cost $3,655,915)
Foreign Sovereign Obligations - 0.81%
Rwanda International Government Bond, 6.625%, Due 5/2/2023B			3,500,000			3,768,583

See accompanying notes

18

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
Senegal - 2.62%
Foreign Sovereign Obligations - 2.62%
Senegal Government International Bond,
6.250%, Due 7/30/2024B		$	1,700,000		$	1,885,766
4.750%, Due 3/13/2028B		EUR	4,610,000			5,444,022
6.250%, Due 5/23/2033B			1,800,000			1,919,466
6.750%, Due 3/13/2048B			2,860,000			2,928,040
Total Foreign Sovereign Obligations						12,177,294
Total Senegal (Cost $11,695,371)						12,177,294
Singapore - 0.20% (Cost $908,965)
Foreign Corporate Obligations - 0.20%
Puma International Financing S.A.B			1,000,000			938,472
South Africa - 0.40%
Foreign Corporate Obligations - 0.40%
Liquid Telecommunications Financing PLC,
8.500%, Due 7/13/2022B			1,200,000			1,228,200
8.500%, Due 7/13/2022B			600,000			614,100
Total Foreign Corporate Obligations						1,842,300
Total South Africa (Cost $1,831,595)						1,842,300
Spain - 0.36%
Foreign Corporate Obligations - 0.36%
International Airport Finance S.A.,
12.000%, Due 3/15/2033B			240,000			263,400
12.000%, Due 3/15/2033, Series 144AC			1,274,000			1,398,215
Total Foreign Corporate Obligations						1,661,615
Total Spain (Cost $1,645,966)						1,661,615
Sri Lanka - 2.03%
Foreign Sovereign Obligations - 2.03%
Sri Lanka Government Bonds,
9.250%, Due 5/1/2020		LKR	30,000,000			165,916
10.750%, Due 3/1/2021, Series A		LKR	26,000,000			146,638
9.000%, Due 5/1/2021, Series A		LKR	465,000,000			2,573,704
11.000%, Due 8/1/2021, Series A		LKR	470,000,000			2,677,554
9.450%, Due 10/15/2021		LKR	116,000,000			646,652
11.500%, Due 5/15/2023, Series A		LKR	180,000,000			1,053,039
10.200%, Due 7/15/2023, Series A		LKR	60,000,000			335,709
11.000%, Due 8/1/2024, Series A		LKR	315,000,000			1,830,047
Total Foreign Sovereign Obligations						9,429,259
Total Sri Lanka (Cost $10,733,963)						9,429,259
Supranational - 2.13%
Foreign Sovereign Obligations - 2.13%
European Bank for Reconstruction & Development,
8.000%, Due 2/27/2020B			1,200,000			1,203,456
9.800%, Due 3/19/2020B			700,000			645,141
9.500%, Due 6/21/2021B			500,000			472,690
International Bank for Reconstruction & Development,
9.500%, Due 10/19/2020		KZT	750,000,000			1,972,882
9.250%, Due 1/20/2023		RWF	2,200,000,000			2,317,489
International Finance Corp., 9.500%, Due 5/31/2020		UZS	32,000,000,000			3,326,741
Total Foreign Sovereign Obligations						9,938,399
Total Supranational (Cost $10,802,291)						9,938,399
Suriname - 0.26% (Cost $1,408,871)
Foreign Sovereign Obligations - 0.26%
Suriname Government International Bond, 9.250%, Due 10/26/2026B			1,400,000			1,197,000

See accompanying notes

19

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
Tajikistan - 0.82%
Credit-Linked Notes - 0.22%
Republic of Tajikistan (Issuer Frontera Capital B.V.), 10.780%, Due 2/15/2023C		UZS	1,000,000		$	998,772
Foreign Sovereign Obligations - 0.60%
Republic of Tajikistan International Bond, 7.125%, Due 9/14/2027B		$	3,230,000			2,818,175
Total Tajikistan (Cost $4,203,912)						3,816,947
Tunisia - 0.78%
Foreign Sovereign Obligations - 0.78%
Banque Centrale de Tunisie International Bond,
5.750%, Due 1/30/2025B			2,000,000			1,850,544
6.375%, Due 7/15/2026, Series 144AC		EUR	1,650,000			1,800,982
Total Foreign Sovereign Obligations						3,651,526
Total Tunisia (Cost $3,767,591)						3,651,526
Uganda - 2.14%
Foreign Sovereign Obligations - 2.14%
Republic of Uganda Government Bonds,
11.000%, Due 1/21/2021, Series 10YR		UGX	2,800,000,000			747,802
18.375%, Due 2/18/2021, Series 5YR		UGX	1,000,000,000			284,140
16.500%, Due 5/13/2021, Series 5YR		UGX	4,355,000,000			1,221,893
16.750%, Due 10/28/2021		UGX	6,940,000,000			1,972,658
11.000%, Due 6/9/2022, Series 10YR		UGX	6,100,000,000			1,564,124
14.125%, Due 7/7/2022		UGX	8,300,000,000			2,246,068
19.500%, Due 12/18/2025, Series 10YR		UGX	4,000,000,000			1,250,225
16.000%, Due 5/6/2027		UGX	2,500,000,000			694,444
Total Foreign Sovereign Obligations						9,981,354
Total Uganda (Cost $10,282,187)						9,981,354
Ukraine - 4.06%
Credit-Linked Notes - 2.28%
Ukraine Government Bonds (Issuer Citigroup Global Markets Holdings, Inc.),
15.300%, Due 1/25/2021B		UAH	26,000,000			1,097,283
14.160%, Due 10/14/2022B		UAH	52,000,000			2,340,252
14.160%, Due 10/17/2022B		UAH	45,000,000			2,024,504
15.220%, Due 4/26/2023B		UAH	27,500,000			1,299,604
9.300%, Due 8/28/2023B		UAH	14,500,000			591,145
Ukraine Government Bonds (Issuer ICBC Standard Bank PLC), 14.910%, Due 10/14/2022		UAH	74,000,000			3,274,102
Total Credit-Linked Notes						10,626,890
Foreign Corporate Obligations - 0.52%
Metinvest B.V., 8.500%, Due 4/23/2026B			880,000			961,506
MHP Lux S.A., 6.950%, Due 4/3/2026B			860,000			897,496
Ukraine Railways Via Rail Capital Markets PLC, 8.250%, Due 7/9/2024B			500,000			548,000
Total Foreign Corporate Obligations						2,407,002
Foreign Sovereign Obligations - 1.26%
Ukraine Government Bond, 9.790%, Due 5/26/2027		UAH	91,100,000			3,532,534
Ukraine Government International Bond,
15.840%, Due 2/26/2025B		UAH	12,000,000			595,460
Due 5/31/2040, Series GDPB D G			1,750,000			1,734,688
Total Foreign Sovereign Obligations						5,862,682
Total Ukraine (Cost $16,954,799)						18,896,574
United Kingdom - 0.59% (Cost $2,758,922)
Foreign Corporate Obligations - 0.59%
Standard Chartered Bank, Due 2/1/2021C G		PKR	480,000,000			2,756,422

See accompanying notes

20

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

	Principal Amount*			Fair Value
United Republic of Tanzania - 0.16% (Cost $764,045)
Credit-Linked Notes - 0.16%
United Republic of Tanzania (Issuer Zambezi B.V.), 8.650%, Due 4/23/2021C		TZS	1,700,000,000		$	740,130
Uruguay - 0.61%
Foreign Sovereign Obligations - 0.61%
Uruguay Government International Bond,
9.875%, Due 6/20/2022B		UYU	48,203,000			1,275,225
8.500%, Due 3/15/2028B		UYU	65,802,000			1,547,097
Total Foreign Sovereign Obligations						2,822,322
Total Uruguay (Cost $3,996,459)						2,822,322
Uzbekistan - 0.29%
Foreign Sovereign Obligations - 0.29%
Republic of Uzbekistan Bond,
4.750%, Due 2/20/2024B		$	532,000			564,588
5.375%, Due 2/20/2029B			688,000			767,519
Total Foreign Sovereign Obligations						1,332,107
Total Uzbekistan (Cost $1,220,000)						1,332,107
Venezuela - 0.02% (Cost $269,875)
Foreign Corporate Obligations - 0.02%
Petroleos de Venezuela S.A., 6.000%, Due 5/16/2024B			1,250,000			100,000
Zambia - 2.99%
Foreign Corporate Obligations - 0.34%
First Quantum Minerals Ltd.,
7.250%, Due 4/1/2023B			815,000			809,397
6.875%, Due 3/1/2026B			800,000			772,000
Total Foreign Corporate Obligations						1,581,397
Foreign Sovereign Obligations - 2.65%
Zambia Government Bond,
11.000%, Due 2/16/2020, Series 5YR		ZMW	500,000			33,620
11.000%, Due 5/26/2020, Series 5YR		ZMW	23,100,000			1,482,573
11.000%, Due 8/29/2021, Series 5YR		ZMW	21,000,000			1,086,842
12.000%, Due 5/23/2023, Series 7YR		ZMW	6,100,000			251,282
12.000%, Due 11/21/2023, Series 7YR		ZMW	14,900,000			581,299
12.000%, Due 4/23/2025, Series 7YR		ZMW	16,500,000			540,951
13.000%, Due 8/29/2026, Series 10YR		ZMW	42,500,000			1,342,316
13.000%, Due 12/18/2027, Series 10YR		ZMW	7,000,000			208,521
Zambia Government International Bond, 8.970%, Due 7/30/2027B			9,980,000			6,822,588
Total Foreign Sovereign Obligations						12,349,992
Total Zambia (Cost $20,380,971)						13,931,389
	Shares
SHORT-TERM INVESTMENTS - 6.72%
Investment Companies - 6.72%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.47%H I			31,297,524			31,297,524
Total Short-Term Investments (Cost $31,297,524)						31,297,524
TOTAL INVESTMENTS - 97.43% (Cost $468,024,073)						453,607,412
OTHER ASSETS, NET OF LIABILITIES - 2.57%						11,983,472
TOTAL NET ASSETS - 100.00%					$	465,590,884
Percentages are stated as a percent of net assets. *In U.S. Dollars unless otherwise noted.

See accompanying notes

21

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

^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 January 31, 2020.

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

^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 $54,893,177 or 11.79% of net assets. The Fund has no right to demand registration of these securities.

^D 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.

^E Step Up/Down - A zero coupon bond that converts to a fixed rate or variable interest rate at a designated future date. The rate disclosed represents the coupon rate at January 31, 2020. The maturity date disclosed represents the final maturity date.

^F Value was determined using significant unobservable inputs.

^G Zero coupon bond.

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

^I 7-day yield.

^J Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $1,299,170 or 0.28% of net assets.

BADLARP - Benchmark rate provided by the Banco Central de la Republica Argentina.

GGRRC9MX – Georgia Certificates of Deposits 91 Days Maturity Maximum Rate.

LIBOR - London Interbank Offered Rate.

LLC - Limited Liability Company.

PLC - Public Limited Company.

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

Forward Foreign Currency Contracts Open on January 31, 2020:
Currency Purchased*		Currency Sold*		Settlement Date		Counterparty	Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
USD	16,568,067	EUR	16,374,275		4/8/2020	BOA	$	193,792	$	-		$	193,792
KZT	288,401	USD	280,874		2/17/2020	BRC		7,527		-			7,527
UAH	567,070	USD	581,124		2/18/2020	BRC		-		(14,054	)		(14,054	)
KZT	3,474,027	USD	3,325,348		2/18/2020	BRC		148,679		-			148,679
UAH	5,925,054	USD	5,859,223		2/18/2020	CBK		65,831		-			65,831
KZT	329,250	USD	311,526		2/7/2020	ICBC		17,724		-			17,724
GEL	353,565	USD	350,000		3/23/2020	ICBC		3,565		-			3,565
KZT	519,468	USD	499,999		4/13/2020	ICBC		19,469		-			19,469
GEL	697,308	USD	700,000		6/16/2020	ICBC		-		(2,692	)		(2,692	)
KZT	2,609,135	USD	2,500,000		7/30/2020	ICBC		109,135		-			109,135
KZT	2,052,544	USD	2,000,000		9/18/2020	ICBC		52,544		-			52,544
USD	6,701,610	EUR	6,675,562		3/27/2020	SSB		26,048		-			26,048
EUR	222,507	USD	222,878		4/8/2020	UAG		-		(371	)		(371	)
EUR	337,098	USD	340,048		4/8/2020	UAG		-		(2,950	)		(2,950	)
							$	644,314	$	(20,067	)	$	624,247

* All values denominated in USD

Glossary:
Counterparty Abbreviations:
BOA	Merrill Lynch International
BRC	Barclays Bank PLC
CBK	Citibank, N.A.
ICBC	ICBC Standard Bank PLC
SSB	State Street Bank & Trust Co.
UAG	UBS AG

See accompanying notes

22

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

Currency Abbreviations:
ARS	Argentine Peso
BYN	Belarusian Ruble
CRC	Costa Rican Colon
DOP	Dominican Peso
EGP	Egyptian Pound
EUR	Euro
GEL	Georgian Lari
GHS	Ghanaian Cedi
KES	Kenyan Shilling
KGS	Kyrgyzstani Som
KZT	Kazakhstani Tenge
LKR	Sri Lankan Rupee
MZN	Mozambique Metical
NGN	Nigerian Naira
PKR	Pakistani Rupee
RWF	Rwandan Franc
TZS	Tanzanian Shilling
UAH	Ukrainian Hryvnia
UGX	Ugandan Shilling
USD	United States Dollar
UYU	Uruguayan Peso
UZS	Uzbekistani Som
ZMW	Zambian Kwacha

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2020, the investments were classified as described below:

Frontier Markets Income Fund	Level 1		Level 2		Level 3		Total
Assets
Credit-Linked Notes
Angola	$	-	$	754,575	$	-	$	754,575
Azerbaijan		-		2,004,000		-		2,004,000
Gambia		-		652,260		-		652,260
Georgia		-		2,029,301		-		2,029,301
Ghana		-		232,897		-		232,897
Kazakhstan		-		1,843,391		-		1,843,391
Kyrgyzstan		-		3,134,059		-		3,134,059
Malawi		-		1,175,957		-		1,175,957
Mozambique		-		3,982,058		-		3,982,058
Nicaragua		-		3,585,044		-		3,585,044
Nigeria		-		2,079,958		-		2,079,958
Pakistan		-		2,636,547		-		2,636,547
Paraguay		-		1,668,953		-		1,668,953
Tajikistan		-		998,772		-		998,772
Ukraine		-		10,626,890		-		10,626,890
United Republic of Tanzania		-		740,130		-		740,130
Foreign Sovereign Obligations
Angola		-		14,185,419		-		14,185,419
Argentina		-		9,608,283		-		9,608,283
Armenia		-		3,626,429		-		3,626,429
Barbados		-		1,478,282		-		1,478,282
Belarus		-		10,600,244		-		10,600,244
Belize		-		3,292,091		-		3,292,091
Benin		-		3,422,534		-		3,422,534
Bosnia & Herzegovina		-		-		94,029		94,029
Cameroon		-		3,642,189		-		3,642,189
Costa Rica		-		13,158,667		-		13,158,667
Dominican Republic		-		16,016,000		-		16,016,000
Ecuador		-		14,340,448		-		14,340,448
Egypt		-		30,667,448		-		30,667,448
El Salvador		-		8,760,075		-		8,760,075

See accompanying notes

23

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

Frontier Markets Income Fund	Level 1		Level 2			Level 3		Total
Assets (continued)
Foreign Sovereign Obligations (continued)
Ethiopia	$	-	$	2,700,500		$	-	$	2,700,500
Gabon		-		7,596,981			-		7,596,981
Ghana		-		20,283,324			-		20,283,324
Iraq		-		9,799,275			-		9,799,275
Ivory Coast		-		18,522,341			-		18,522,341
Kenya		-		20,289,353			-		20,289,353
Laos		-		1,548,420			-		1,548,420
Lebanon		-		1,229,250			-		1,229,250
Mongolia		-		5,853,500			-		5,853,500
Montenegro		-		1,732,091			-		1,732,091
Mozambique		-		8,050,426			-		8,050,426
Netherlands		-		5,206,184			-		5,206,184
Nigeria		-		21,507,021			-		21,507,021
Pakistan		-		14,990,016			1,299,170		16,289,186
Papua New Guinea		-		2,599,083			-		2,599,083
Rwanda		-		3,768,583			-		3,768,583
Senegal		-		12,177,294			-		12,177,294
Sri Lanka		-		9,429,259			-		9,429,259
Supranational		-		9,938,399			-		9,938,399
Suriname		-		1,197,000			-		1,197,000
Tajikistan		-		2,818,175			-		2,818,175
Tunisia		-		3,651,526			-		3,651,526
Uganda		-		9,981,354			-		9,981,354
Ukraine		-		5,862,682			-		5,862,682
Uruguay		-		2,822,322			-		2,822,322
Uzbekistan		-		1,332,107			-		1,332,107
Zambia		-		12,349,992			-		12,349,992
Foreign Corporate Obligations
Bahrain		-		1,725,933			-		1,725,933
Barbados		-		288,765			-		288,765
Congo		-		3,597,545			-		3,597,545
Costa Rica		-		1,692,406			-		1,692,406
El Salvador		-		405,500			-		405,500
Georgia		-		3,095,902			-		3,095,902
Honduras		-		871,500			-		871,500
Kazakhstan		-		4,982,987			-		4,982,987
Luxembourg		-		938,870			-		938,870
Nigeria		-		3,850,714			-		3,850,714
Singapore		-		938,472			-		938,472
South Africa		-		1,842,300			-		1,842,300
Spain		-		1,661,615			-		1,661,615
Ukraine		-		2,407,002			-		2,407,002
United Kingdom		-		2,756,422			-		2,756,422
Venezuela		-		100,000			-		100,000
Zambia		-		1,581,397			-		1,581,397
Short-Term Investments		31,297,524		-			-		31,297,524
Total Investments in Securities - Assets	$	31,297,524	$	420,916,689		$	1,393,199	$	453,607,412
Financial Derivative Instruments - Assets
Forward Foreign Currency Contracts	$	-	$	644,314		$	-	$	644,314
Total Financial Derivative Instruments - Assets	$	-	$	644,314		$	-	$	644,314
Financial Derivative Instruments - Liabilities
Forward Foreign Currency Contracts	$	-	$	(20,067	)	$	-	$	(20,067	)
Total Financial Derivative Instruments - Liabilities	$	-	$	(20,067	)	$	-	$	(20,067	)

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended January 31, 2020, there were no transfers into or out of Level 3.

See accompanying notes

24

American Beacon Frontier Markets Income Fund^SM

Schedule of Investments

January 31, 2020

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 1/31/2019	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 1/31/2020		Unrealized Appreciation (Depreciation) at Period end**
Foreign Sovereign Obligations	$129,605	$1,290,135	$(47,566)	$	10,564	$	4,224	$	6,237	$	-	$	-	$	1,393,199	$	(27,607	)

** 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 foreign sovereign obligations, classified as Level 3 with a collective principal amount valued at $1,393,199, have been deemed as such due to limited market transparency.

See accompanying notes

25

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2020

	Shares			Fair Value
SHORT-TERM INVESTMENTS - 98.29%
Investment Companies - 3.21%
American Beacon U.S. Government Money Market Select Fund, Select Class, 1.47%A B			612,903		$	612,903
	Par Amount
U.S. Treasury Obligations - 95.08%
U.S. Treasury Bills,
1.565%, Due 6/18/2020		$	8,600,000			8,551,213
1.560%, Due 6/4/2020			9,150,000			9,103,017
1.506%, Due 6/11/2020			440,000			437,623
1.545%, Due 7/9/2020			55,000			54,640
Total U.S. Treasury Obligations						18,146,493
Total Short-Term Investments (Cost $18,756,596)						18,759,396
TOTAL INVESTMENTS - 98.29% (Cost $18,756,596)						18,759,396
OTHER ASSETS, NET OF LIABILITIES - 1.71%						326,115
TOTAL NET ASSETS - 100.00%					$	19,085,511
Percentages are stated as a percent of net assets.

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

^B 7-day yield.

Centrally Cleared Swap Agreements Outstanding on January 31, 2020:
Interest Rate Swaps
Pay/Receive Floating Rate	Floating Rate Index	Fixed Rate (%)	Payment Frequency	Expiration Date		Curr	Notional Amount(3) (000s)		Premiums Paid (Received)		Fair Value			Unrealized Appreciation (Depreciation)
Pay	1-Day BRL-CDI	9.84	Maturity		1/4/2021	BRL		41,000	$	-	$	(1,089,679	)	$	(1,089,679	)
									$	-	$	(1,089,679	)	$	(1,089,679	)

Credit Default Swaps on Corporate and Sovereign Securities - Buy Protection(1)
Reference Entity	Fixed Rate (%)	Payment Frequency	Expiration Date	Implied Credit Spread at 1/31/2020(2) (%)		Curr	Notional Amount(3) (000s)		Premiums Paid (Received)			Fair Value(4)			Unrealized Appreciation (Depreciation)
Federation of Malaysia	1.00	Quarterly	12/20/2024		0.4162	USD		1,300	$	(34,935	)	$	(37,350	)	$	(2,415	)
Republic of Korea	1.00	Quarterly	12/20/2024		0.2739	USD		400		(13,349	)		(14,247	)		(898	)
Republic of Brazil	1.00	Quarterly	12/20/2024		1.0414	USD		2,500		(2,300	)		2,041			4,341
Republic of Turkey	1.00	Quarterly	12/20/2024		2.4069	USD		1,700		129,955			105,935			(24,020	)
Republic of South Africa	1.00	Quarterly	12/20/2024		1.8545	USD		2,950		84,362			111,330			26,968
Republic of Colombia	1.00	Quarterly	12/20/2024		0.8208	USD		2,900		(42,433	)		(27,957	)		14,476
Republic of Indonesia	1.00	Quarterly	12/20/2024		0.6701	USD		2,000		(34,728	)		(33,214	)		1,514
									$	86,572		$	106,538		$	19,966

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

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

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

See accompanying notes

26

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2020

⁽⁴⁾ The quoted market prices and resulting values for credit default swaps on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/ sold as of the period end. Increasing fair values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

Forward Foreign Currency Contracts Open on January 31, 2020:
Currency Purchased*		Currency Sold*		Settlement Date		Counterparty		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
IDR	104,151	USD	100,000		2/13/2020		HUS	$	4,151	$	-		$	4,151
IDR	317,013	USD	310,000		2/13/2020		HUS		7,013		-			7,013
IDR	440,877	USD	420,000		2/13/2020		HUS		20,877		-			20,877
IDR	542,599	USD	531,923		2/13/2020		HUS		10,676		-			10,676
IDR	542,599	USD	531,656		2/13/2020		HUS		10,943		-			10,943
IDR	10,601,017	USD	10,200,000		2/13/2020		HUS		401,017		-			401,017
USD	5,963,314	IDR	6,274,128		2/13/2020		HUS		-		(310,814	)		(310,814	)
USD	5,964,558	IDR	6,274,128		2/13/2020		HUS		-		(309,570	)		(309,570	)
COP	142,435	USD	150,000		3/24/2020		HUS		-		(7,565	)		(7,565	)
USD	360,299	COP	363,214		3/24/2020		HUS		-		(2,915	)		(2,915	)
USD	360,241	COP	363,214		3/24/2020		HUS		-		(2,973	)		(2,973	)
ZAR	171,572	USD	180,000		3/26/2020		HUS		-		(8,428	)		(8,428	)
USD	728,606	ZAR	721,111		3/26/2020		HUS		7,495		-			7,495
BRL	313,079	USD	330,000		4/2/2020		HUS		-		(16,921	)		(16,921	)
USD	352,975	BRL	348,437		4/2/2020		HUS		4,538		-			4,538
USD	526,784	IDR	538,297		5/11/2020		HUS		-		(11,513	)		(11,513	)
USD	526,934	IDR	538,297		5/11/2020		HUS		-		(11,363	)		(11,363	)
								$	466,710	$	(682,062	)	$	(215,352	)

* All values denominated in USD

Glossary:
Counterparty Abbreviations:
HUS	HSBC Bank (USA)
Currency Abbreviations:
BRL	Brazilian Real
COP	Colombian Peso
IDR	Indonesian Rupiah
USD	United States Dollar
ZAR	South African Rand
Other Abbreviations:
CDI	Chess Depository Interest

See accompanying notes

27

American Beacon GLG Total Return Fund^SM

Schedule of Investments

January 31, 2020

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of January 31, 2020, the investments were classified as described below:

GLG Total Return Fund	Level 1		Level 2			Level 3		Total
Assets
Short-Term Investments	$	612,903	$	18,146,493		$	-	$	18,759,396
Total Investments in Securities - Assets	$	612,903	$	18,146,493		$	-	$	18,759,396
Financial Derivative Instruments - Assets
Swap Contract Agreements	$	-	$	47,299		$	-	$	47,299
Forward Foreign Currency Contracts		-		466,710			-		466,710
Total Financial Derivative Instruments - Assets	$	-	$	514,009		$	-	$	514,009
Financial Derivative Instruments - Liabilities
Swap Contract Agreements	$	-	$	(1,117,012	)	$	-	$	(1,117,012	)
Forward Foreign Currency Contracts		-		(682,062	)		-		(682,062	)
Total Financial Derivative Instruments - Liabilities	$	-	$	(1,799,074	)	$	-	$	(1,799,074	)

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended January 31, 2020, there were no transfers into or out of Level 3.

See accompanying notes

28

American Beacon Funds^SM

Statements of Assets and Liabilities

January 31, 2020

	Frontier Markets Income Fund			GLG Total Return Fund
Assets:
Investments in unaffiliated securities, at fair value†	$	422,309,888		$	18,146,493
Investments in affiliated securities, at fair value‡		31,297,524			612,903
Foreign currency, at fair value^		5,255,229			226
Cash		104,714			29,955
Cash collateral held at custodian for the benefit of the broker		-			250,000
Dividends and interest receivable		10,158,039			955
Deposits with broker for swap agreements		-			1,355,553
Receivable for investments sold		1,850,496			-
Receivable for fund shares sold		1,596,545			25,057
Receivable for tax reclaims		11,092			-
Receivable for expense reimbursement (Note 2)		10,173			10,138
Unrealized appreciation from forward foreign currency contracts		644,314			466,710
Receivable for variation margin on open centrally cleared swap agreements (Note 5)		-			219,222
Prepaid expenses		59,438			20,275
Total assets		473,297,452			21,137,487
Liabilities:
Payable for investments purchased		6,487,641			-
Payable for fund shares redeemed		385,113			27,468
Cash collateral held at custodian for the benefit of the broker		190,000			-
Management and sub-advisory fees payable (Note 2)		336,289			21,455
Service fees payable (Note 2)		35,291			151
Transfer agent fees payable (Note 2)		28,951			1,131
Custody and fund accounting fees payable		76,402			15,752
Professional fees payable		99,589			61,060
Trustee fees payable (Note 2)		1,968			494
Payable for prospectus and shareholder reports		5,000			28,539
Unrealized depreciation from forward foreign currency contracts		20,067			682,062
Payable for variation margin from open centrally cleared swap agreements		-			1,202,447
Other liabilities		40,257			11,417
Total liabilities		7,706,568			2,051,976
Net assets	$	465,590,884		$	19,085,511
Analysis of net assets:
Paid-in-capital	$	494,863,007		$	40,717,980
Total distributable earnings (deficits)A		(29,272,123	)		(21,632,469	)
Net assets	$	465,590,884		$	19,085,511

See accompanying notes

29

American Beacon Funds^SM

Statements of Assets and Liabilities

January 31, 2020

	Frontier Markets Income Fund		GLG Total Return Fund
Shares outstanding at no par value (unlimited shares authorized):
Institutional Class		8,076,212		31,821
Y Class		34,393,139		17,007
Investor Class		8,331,047		13,340
A Class		484,169		10,605
C Class		1,433,585		10,550
Ultra Class		N/A		1,809,293
Net assets:
Institutional Class	$	71,344,608	$	320,815
Y Class	$	303,866,061	$	170,055
Investor Class	$	73,505,036	$	132,414
A Class	$	4,275,426	$	105,189
C Class	$	12,599,753	$	102,317
Ultra Class		N/A	$	18,254,721
Net asset value, offering and redemption price per share:
Institutional Class	$	8.83	$	10.08
Y Class	$	8.84	$	10.00
Investor Class	$	8.82	$	9.93
A Class	$	8.83	$	9.92
A Class (offering price)	$	9.27	$	10.41
C Class	$	8.79	$	9.70
Ultra Class		N/A	$	10.09
† Cost of investments in unaffiliated securities	$	436,726,549	$	18,143,693
‡ Cost of investments in affiliated securities	$	31,297,524	$	612,903
^ Cost of foreign currency	$	5,266,301	$	240
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

30

American Beacon Funds^SM

Statements of Operations

For the year ended January 31, 2020

	Frontier Markets Income Fund				GLG Total Return Fund
Investment income:
Dividend income from affiliated securities (Note 8)	$	653,924			$	146,043
Interest income (net of foreign taxes)†		39,023,874				5,810,557
Total investment income		39,677,798				5,956,600
Expenses:
Management and sub-advisory fees (Note 2)		3,275,693				2,366,391
Transfer agent fees:
Institutional Class (Note 2)		17,081				27
Y Class (Note 2)		239,405				590
Investor Class		3,563				999
A Class		697				19
C Class		945				19
Ultra Class		-				8,940
Custody and fund accounting fees		527,127				102,807
Professional fees		130,162				95,594
Registration fees and expenses		102,137				89,252
Service fees (Note 2):
Investor Class		242,151				641
A Class		4,553				-
C Class		9,357				-
Distribution fees (Note 2):
A Class		8,595				265
C Class		114,521				1,034
Prospectus and shareholder report expenses		54,134				86,826
Trustee fees (Note 2)		28,862				15,346
Dividends and interest on securities sold short		-				91,413
Loan fees (Note 9)		38,292				-
Other expenses		62,790				30,989
Total expenses		4,860,065				2,891,152
Net fees waived and expenses (reimbursed) / recouped (Note 2)		84,395				(427,316	)
Net expenses		4,944,460				2,463,836
Net investment income		34,733,338				3,492,764
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesA		(1,931,795	)			(142,481	)
Foreign currency transactions		(718,182	)			715,383
Forward foreign currency contracts		1,135,645				191,764
Swap agreements		-				(21,016,917	)
Change in net unrealized appreciation (depreciation) of:
Investments in unaffiliated securitiesB		5,786,636				(41,084	)
Foreign currency transactions		22				(23	)
Forward foreign currency contracts		991,121				1,804,289
Swap agreements		-				12,821,425
Net gain (loss) from investments		5,263,447				(5,667,644	)
Net increase (decrease) in net assets resulting from operations	$	39,996,785			$	(2,174,880	)
† Foreign taxes	$	665,757		$		-
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

31

American Beacon Funds^SM

Statements of Changes in Net Assets

	Frontier Markets Income Fund						GLG Total Return Fund
	Year Ended January 31, 2020			Year Ended January 31, 2019			Year Ended January 31, 2020			Year Ended January 31, 2019
Increase (decrease) in net assets:
Operations:
Net investment income	$	34,733,338		$	22,618,702		$	3,492,764		$	6,936,612
Net realized (loss) from investments in unaffiliated securities, foreign currency transactions, forward foreign currency contracts, and swap agreements		(1,514,332	)		(3,471,194	)		(20,252,251	)		(1,319,440	)
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions, forward foreign currency contracts, and swap agreements		6,777,779			(23,891,914	)		14,584,607			2,075,945
Net increase (decrease) in net assets resulting from operations		39,996,785			(4,744,406	)		(2,174,880	)		7,693,117
Distributions to shareholders:
Total retained earnings:
Institutional Class		(5,751,687	)		(6,063,094	)		-			(51,527	)
Y Class		(19,454,443	)		(11,141,405	)		-			(21,812	)
Investor Class		(5,098,405	)		(3,746,033	)		-			(5,902	)
A Class		(266,177	)		(291,836	)		-			(3,999	)
C Class		(847,405	)		(743,483	)		-			(3,911	)
Ultra Class		-			-			-			(18,802,091	)
Return of capital:
Institutional Class		(185,581	)		-			-			-
Y Class		(790,312	)		-			-			-
Investor Class		(191,437	)		-			-			-
A Class		(11,126	)		-			-			-
C Class		(32,942	)		-			-			-
Ultra Class		-			-			-			-
Net distributions to shareholders		(32,629,515	)		(21,985,851	)		-			(18,889,242	)
Capital share transactions (Note 10):
Proceeds from sales of shares		274,530,398			175,310,369			53,050,602			179,029,117
Reinvestment of dividends and distributions		29,820,229			18,991,501			-			18,844,081
Cost of shares redeemed		(122,382,975	)		(91,797,512	)		(501,244,952	)		(462,806,614	)
Redemption fees		44,873			88,999			-			-
Net increase (decrease) in net assets from capital share transactions		182,012,525			102,593,357			(448,194,350	)		(264,933,416	)
Net increase (decrease) in net assets		189,379,795			75,863,100			(450,369,230	)		(276,129,541	)
Net assets:
Beginning of period		276,211,089			200,347,989			469,454,741			745,584,282
End of period	$	465,590,884		$	276,211,089		$	19,085,511		$	469,454,741

See accompanying notes

32

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

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 open-end management investment companies. As of January 31, 2020, the Trust consists of thirty-two active series, two of which are presented in this filing: American Beacon Frontier Markets Income Fund and American Beacon GLG Total Return Fund (collectively, the “Funds” and each individually a “Fund”). The remaining thirty active series are reported in separate filings. The American Beacon Frontier Markets Income Fund is registered as a diversified fund and American Beacon GLG Total Return Fund is registered as non-diversified.

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.

Recently Adopted 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, and has been adopted accordingly with no material impact 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 January 31, 2020, 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.

33

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

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 orthrough intermediary channels.	$	100,000
Investor	All investors using intermediary organizations such as broker-dealers or retirement plan sponsors.	$	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
Ultra	Large institutional investors - sold directly or through intermediary channels. The Manager may allow a reasonable period of time after opening an account for the Ultra Class for the investor to meet the initial investment requirement. In addition, for investors such as trust companies and financial advisors who make investments for a group of clients, the minimum initial investment can be met through aggregated purchase orders for more than one client.	$	500,000,000

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. Realized gains (losses) from securities sold are determined based on specific lot identification.

34

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

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 the 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 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.

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.

Redemption Fees

All Classes of the Frontier Markets Income Fund impose a 2% redemption fee on shares held for less than 90 days. The fee is deducted from the redemption proceeds and is intended to offset the trading costs, market impact, and other costs associated with short-term trading activity in the Fund. The “first-in, first-out” method is used to determine the holding period. The fee is allocated to all classes of this Fund pro-rata based on the net assets.

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.

35

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

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 the Funds’ 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 Funds, and the Manager have entered into an Investment Advisory Agreements with Aberdeen Asset Managers Limited and Global Evolution USA, LLC for the Frontier Markets Income Fund and GLG LLC for the GLG Total Return Fund (the “Sub-Advisors”) pursuant to which each Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the applicable Fund’s average daily net assets according to the following schedules:

Aberdeen Asset Managers Limited

All Assets 0.50 % 

Global Evolution USA, LLC

All Assets 0.50 % 

GLG LLC

First $500 million	0.60	%
Next $500 million	0.55	%
Over $1 billion	0.50	%

The Management and Sub-Advisory Fees paid by the Funds for the year ended January 31, 2020 were as follows:

Frontier Markets Income Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	1,357,050
Sub-Advisor Fees		0.50	%		1,918,643
Total		0.85	%	$	3,275,693

GLG Total Return Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	871,828
Sub-Advisor Fees		0.60	%		1,494,563
Total		0.95	%	$	2,366,391

36

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

Distribution Plans

Separate Distribution Plans (the “Distribution Plans”) have been adopted pursuant to Rule 12b-1 under the Act for the A and C Classes of the Funds. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), receives an annual fee of 0.25% of the average daily net assets of the A Class and 1.00% of the average daily net assets of the C Class. 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 Distributor for distribution assistance.

For all other share classes, the Funds have utilized a “defensive” distribution plan (the “Plan”) pursuant to which no separate fees may be charged to the Funds for distribution purposes. However, the Plan authorizes the use of management fees received by the Manager and/or the investment advisors hired by the Manager 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 from these fees.

Service Plans

The Investor, A and C Classes have each adopted a Service Plan (collectively, the “Plans”). The Plans authorize the payment to the Manager an annual fee up to 0.375% of the average daily net assets of the Investor Class, up to 0.25% of the average daily net assets of the A Class and up to 0.25% of the average daily net assets of the C Class. In addition, the Funds may reimburse the Manager for certain non-distribution shareholder services provided by financial intermediaries attributable to Y Class and Institutional Class. The Manager or other approved entities may spend such amounts on any activities or expenses primarily intended to result in or relate to the servicing of A Class, C Class, Y Class, Institutional Class and Investor Class including, but not limited to, payment of shareholder service fees and transfer agency or sub-transfer agency expenses. The fees will be payable monthly in arrears. The primary expenses expected to be incurred under the Plans are shareholder servicing, record keeping fees and servicing fees paid to financial intermediaries such as plan sponsors and broker-dealers.

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 January 31, 2020, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Frontier Markets Income	$	239,005
GLG Total Return		559

As of January 31, 2020, 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
Frontier Markets Income	$	24,631
GLG Total Return		14

37

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

Investments in Affiliated Funds

The Funds may invest in the American Beacon U.S. Government Money Market Select Fund (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 January 31, 2020, the Manager earned fees on the Funds’ direct investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund
Frontier Markets Income	$	31,598
GLG Total Return		6,461

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 January 31, 2020, the Frontier Markets Income Fund borrowed $18,195,346 for 1 day at an average interest rate of 2.45% with interest charges of $1,221. These amounts are recorded as “Other expenses” in the Statements of Operations. During the year ended January 31, 2020, the GLG Total Return 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 January 31, 2020, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap
Fund	Class	2/1/2019 - 5/31/2019			6/1/2019 - 1/31/2020			Reimbursed Expenses		(Recouped) Expenses			Expiration of Reimbursed Expenses
Frontier Markets Income	Institutional		1.15	%		1.15	%	$	12,591	$	(46,005	)		2022-2023
Frontier Markets Income	Y		1.25	%		1.25	%		27,040		(94,769	)		2022-2023
Frontier Markets Income	Investor*		-			-			15,101		-			2022-2023
Frontier Markets Income	A*		-			-			2,745		-			2022-2023
Frontier Markets Income	C*		-			-			-		(1,098	)		2022-2023
GLG Total Return	Y*		1.15	%		-			14		-			2022-2023
GLG Total Return	Investor		1.43	%		1.43	%		1,168		(39	)		2022-2023
GLG Total Return	A*		-			-			-		(122	)		2022-2023
GLG Total Return	C*		-			-			-		(119	)		2022-2023
GLG Total Return	Ultra		0.95	%		0.95	%		426,414		-			2022-2023

* Prior cap in place until fully recouped.

38

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

Of these amounts, $10,173 and $10,138 was disclosed as a receivable from the Manager on the Statements of Assets and Liabilities at January 31, 2020 for the Frontier Markets Income Fund and GLG Total Return Fund, respectively.

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 2022 and 2023. 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
Frontier Markets Income	$	69,711	$	-	$	-		2019-2020
Frontier Markets Income		22,877		355		-		2020-2021
Frontier Markets Income		87,429		7,314		-		2021-2022
GLG Total Return		102,541		-		255,971		2019-2020
GLG Total Return		-		675,074		-		2020-2021
GLG Total Return		-		624,775		-		2021-2022

Sales Commissions

The Funds’ Distributor may receive a portion of Class A sales charges from broker dealers which may be used to offset distribution related expenses. During the period ended January 31, 2020, RID collected $4,036 from the sale of Class A Shares of the Frontier Markets Income Fund. RID did not collect any Class A sales charges for GLG Total Return Fund during the year ended January 31, 2020.

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 January 31, 2020, 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 January 31, 2020, CDSC fees of $2,339 were collected for Class C Shares of the Frontier Markets Income Fund. RID did not collect any CDSC fees for Class C Shares for GLG Total Return Fund during the period ended January 31, 2020.

Trustee Fees and Expenses

Effective January 1, 2020, as compensation for their service to the American Beacon Funds Complex, including the Trust (collectively, the “Trusts”), each Trustee is compensated from the Trusts as follows: (1) an annual retainer of $120,000; (2) meeting attendance fee (for attendance in person or via teleconference) of (a) $12,000 for in person attendance, or $5,000 for telephonic attendance, by Board members for each regularly scheduled or special Board meeting, (b) $2,500 for attendance by Committee members at meetings of the Audit Committee and the Investment Committee, (c) $1,500 for attendance by Committee members at meetings of the Nominating and Governance Committee; and (d) $2,500 for attendance by Board members for each special telephonic Board meeting; and (3) 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. For her service as Board Chair, Ms. Cline receives an

39

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

additional annual retainer of $50,000. Although she attends several committee meetings at each quarterly Board meeting, she receives only a single $2,500 fee each quarter for her attendance at those meetings. The chairpersons of the Audit Committee and the Investment Committee each receive an additional annual retainer of $25,000 and the Chair of the Nominating and Governance Committee receives an additional annual retainer of $15,000.

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

40

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

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 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

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.

Common stocks, ETFs and financial derivative instruments, such as futures contracts or options 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.

41

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

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 foreign currency contracts and structured notes, 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.

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

Credit-Linked Notes

The Frontier Markets Income Fund may invest in credit-linked notes (“CLNs”). CLNs are derivative debt obligations that are issued by limited purpose entities, such as Special Purpose Vehicles (“SPVs”), or by financial

42

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

firms, such as banks, securities firms or their affiliates. They are structured so that their performance is linked to that of an underlying bond or other debt obligation (a “reference asset”), normally by means of an embedded or underlying credit default swap. The reference assets for the CLNs in which the Fund may invest will be limited to sovereign or quasi-sovereign debt instruments or other investments in which the Fund’s investment policies permit it to invest directly. The Fund may invest in CLNs when the Fund’s Sub-Advisor believes that doing so is more efficient than investing in the reference assets directly or when such direct investment by the Fund is not feasible due to legal or other restrictions.

The issuer or one of the affiliates of the issuer of the CLNs in which the Fund will invest, normally will purchase the reference asset underlying the CLN directly, but in some cases it may gain exposure to the reference asset through a credit default swap or other derivative. Under the terms of a CLN, the Fund will receive a fixed or variable rate of interest on the outstanding principal amount of the CLN, which in turn will be subject to reduction (potentially down to zero) if a “credit event” occurs with respect to the underlying reference asset or its issuer. Such credit events will include payment defaults on the reference asset, and normally will also include events that do not involve an actual default, such as actual or potential insolvencies, repudiations of indebtedness, moratoria on payments, reference asset restructurings, limits on the convertibility or repatriation of currencies, and the imposition of ownership restrictions. If a credit event occurs, payments on the CLN would terminate, and the Fund normally would receive delivery of the underlying reference asset (or, in some cases, a comparable “deliverable” asset) in lieu of the repayment of principal. In some cases, however, including but not limited to instances where there has been a market disruption or in which it is or has become illegal, impossible or impracticable for the Fund to purchase, hold or receive the reference assets, the Fund may receive a cash settlement based on the value of the reference asset or a comparable instrument, less fees charged and certain expenses incurred by the CLN issuer.

CLNs are debt obligations of the CLN issuers, and the Fund would have no ownership or other property interest in the reference assets (other than following a credit event that results in the reference assets being delivered to the Fund) or any direct recourse to the issuers of those reference assets. Thus, the Fund will be exposed to the credit risk of the issuers of the reference assets that underlie its CLNs, as well as to the credit risk of the issuers of the CLNs themselves. CLNs will also be subject to currency risk, liquidity risk, valuation risks, and the other risks of a credit default swap. Various determinations that may need to be made with respect to the CLNs, including the occurrence of a credit event, the selection of deliverable assets (where applicable) and the valuation of the reference asset for purposes of determining any cash settlement amount, normally will be made by the issuer or sponsor of the CLN. The interests of such issuer or sponsor may not be aligned with those of the Fund or other investors in the CLN. Accordingly, CLNs may also be subject to potential conflicts of interest. There may be no established trading market for the Fund’s CLNs, in which event they may constitute illiquid investments.

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 asset-backed securities (“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.

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American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

Foreign Debt Securities

The Funds may invest in foreign fixed and floating rate income securities (including emerging market securities) all or a portion of which may be non-U.S. dollar denominated and which include: (a) debt obligations issued or guaranteed by foreign national, provincial, state, municipal or other governments with taxing authority or by their agencies or instrumentalities, including Brady Bonds; (b) debt obligations of supranational entities; (c) debt obligations of the U.S. Government issued in non-dollar securities; (d) debt obligations and other fixed income securities of foreign corporate issuers (both dollar and non-dollar denominated); and (e) U.S. corporate issuers (both Eurodollar and non-dollar denominated). There is no minimum rating criteria for the Funds’ investments in such securities. Investing in the securities of foreign issuers involves special considerations that are not typically associated with investing in the securities of U.S. issuers. In addition, emerging markets are markets that have risks that are different and higher than those in more developed markets.

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.

Frontier and Emerging Market Investments

The Funds may invest in the securities and derivatives with exposure to various countries with emerging capital markets. Investments in the securities and derivatives with exposure to countries with emerging capital markets involve significantly higher risks not involved in investments in securities in more developed capital markets, such as (i) low or non-existent trading volume, resulting in a lack of liquidity and increased volatility in prices for such securities, as compared to securities from more developed capital markets, (ii) uncertain national policies and social, political and economic instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic developments, (iii) possible fluctuations in exchange rates, differing legal systems and the existence or possible imposition of exchange controls, custodial restrictions or other non-U.S. or U.S. governmental laws or restrictions applicable to such investments, (iv) national policies that may limit the Fund’s investment opportunities such as restrictions on investment in issuers or industries deemed sensitive to national interests, (v) the lack or relatively early development of legal structures governing private and foreign investments and private property, and (vi) less diverse or immature economic structures. In addition to withholding taxes on investment income, some countries with emerging capital markets may impose differential capital gain taxes on foreign investors.

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

44

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

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.

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.

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 Funds, to purchase such unregistered securities if certain conditions are met.

Inflation-Indexed Linked Securities

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

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 (“BDCs”), ETFs, unit investment trusts, and other investment companies of the

45

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Notes to Financial Statements

January 31, 2020

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.

The Funds can invest free cash balances in registered open-end investment companies regulated as money market funds under the Investment Company Act, to provide liquidity or for defensive purposes. The Funds could invest in money market funds rather than purchasing individual short-term investments. If the Funds invests in money market funds, shareholders will bear their proportionate share of the expenses, including for example, advisory and administrative fees, of the money market funds in which the Funds invest, including advisory fees charged by the Manager to any applicable money market funds advised by the Manager.

Sovereign and Quasi-Sovereign Government and Supranational Debt

The Funds can invest in debt securities issued or guaranteed by foreign governments and their political subdivisions or agencies which involve special risks. Sovereign debt differs from debt obligations issued by private entities in that, generally, remedies for defaults must be pursued in the courts of the defaulting party. Sovereign debt securities may include: debt securities issued or guaranteed by governments, governmental agencies or instrumentalities and political subdivisions located in emerging market countries; debt securities issued by government owned, controlled or sponsored entities located in emerging market countries; interests in entities organized and operated for the purpose of restructuring the investment characteristics of instruments issued by government owned, controlled or sponsored entities located in emerging market countries; interests in entities organized and operated for the purpose of restructuring the investment characteristics of instruments issued by any of the above issuers; participations in loans between emerging market governments and financial institutions; and Brady Bonds, which are debt securities issued under the framework of the Brady Plan as a means for debtor nations to restructure their outstanding external indebtedness.

Supranational entities may also issue debt securities. Supranational organizations are entities designated or supported by a government or governmental group to promote economic development. Included among these organizations are the Asian Development Bank, the European Investment Bank, the Inter-American Development Bank, the International Monetary Fund, the United Nations, the World Bank and the European Bank for Reconstruction and Development. Supranational organizations have no taxing authority and are dependent on their members for payments of interest and principal to the extent their assets are insufficient. Further, the lending activities of such entities are limited to a percentage of their total capital, reserves and net income.

Variable or Floating Rate Obligations

The coupon on certain fixed-income securities in which the Fund may invest is 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 Inter-Bank Offered Rate (“LIBOR”) or a Treasury bill rate. 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 obligations 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.

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American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

As short-term interest rates decline, the coupons on floating rate securities typically decrease. Alternatively, during periods of increasing 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. Floating rate securities will not generally increase in value if interest rates decline.

5.  Financial Derivative Instruments

The Funds may utilize derivative instruments to enhance return, hedge risk, gain efficient exposure to an asset class or to manage liquidity. When considering the 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.

During the year ended January 31, 2020, the Funds entered into forward foreign currency contracts primarily for return enhancement and hedging foreign currency fluctuations.

The Funds’ forward foreign currency contract notional dollar values outstanding 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 Outstanding Year Ended January 31, 2020
Fund	Purchased Contracts		Sold Contracts
Frontier Markets Income	$	14,462,143	$	18,446,456
GLG Total Return		70,743,086		89,793,304

Swap Agreements

The Funds may invest in swap agreements. Swap agreements are negotiated between the Fund and a counterparty to exchange or swap investment cash flows, assets, foreign currencies, or market-linked returns at specified, future intervals. Swap agreements are either privately negotiated in the OTC market (“OTC Swaps”) or cleared in a central clearing house (“Centrally Cleared Swaps”). The Fund may enter into credit default, cross-currency, interest rate and other forms of swap agreements to manage its exposure to credit, currency, interest rate, and inflation risk. In connection with these agreements, securities or cash may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency.

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

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American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

OTC payments received or made at the beginning of the measurement period are reflected as such on the Statement of Assets and Liabilities and represent payments made or received upon entering into the swap agreement to compensate for differences between the stated terms of the swap agreement and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). Centrally cleared swaps provide the same rights to the protection buyer and seller except the payments between parties, including upfront premiums, are settled through a central clearing agent through variation margin payments. Upfront and periodic payments for OTC and centrally cleared swaps are recorded as realized gains or losses on the Statement of Operations upon termination or maturity of the swap. A liquidation payment received or made at the termination of the swap is recorded as realized gain or loss on the Statement of Operations. Net periodic payments received or paid by the Fund are included as part of realized gains or losses on the Statement of Operations.

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

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

Credit Default Swap Agreements

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

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

Credit default swap agreements on corporate issues, sovereign issues of an emerging country or U.S. municipal issues involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer

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American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

of protection’s right to choose the deliverable obligation with the lowest value following a credit event). The Fund may use credit default swaps on corporate issues, sovereign issues of an emerging country or U.S. municipal issues to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where the Fund owns or has exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood of a particular issuer’s default.

Credit default swap agreements on asset-backed securities involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default or other credit event. Unlike credit default swaps on corporate issues, sovereign issues of an emerging country or U.S. municipal issues, deliverable obligations in most instances would be limited to the specific referenced obligation as performance for asset-backed securities can vary across deals. Prepayments, principal paydowns, and other writedown or loss events on the underlying mortgage loans will reduce the outstanding principal balance of the referenced obligation. These reductions may be temporary or permanent as defined under the terms of the swap agreement and the notional amount for the swap agreement will be adjusted by corresponding amounts. The Fund may use credit default swaps on asset-backed securities to provide a measure of protection against defaults of the referenced obligation that the Fund owns or to take an active long or short position with respect to the likelihood of a particular referenced obligation’s default that the Fund does not own.

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

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

The maximum potential amount of future payments (undiscounted) that the Fund as a seller of protection could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. Notional amounts of each individual credit default swap agreement outstanding as of January 31, 2020, for which the Fund is the seller of protection is disclosed in the Notes to the Schedule of Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by the Fund for the same referenced entity or entities.

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Notes to Financial Statements

January 31, 2020

During the year ended January 31, 2020, the GLG Total Return Fund entered into credit default swaps primarily for return enhancement, hedging, and exposing cash to markets.

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

Average Credit Default Swap Notional Amounts Outstanding
Fund	Year Ended January 31, 2020
GLG Total Return		202,776,520

Interest Rate Swap Agreements

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

During the year ended January 31, 2020, the GLG Total Return Fund entered into interest rate swaps primarily for return enhancement, hedging and exposing cash to markets.

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

Average Interest Rate Swaps Notional Amounts Outstanding
Fund	Year Ended January 31, 2020
GLG Total Return		376,725,000

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

Frontier Markets Income Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of January 31, 2020:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts				Commodity contracts			Interest rate contracts			Equity contracts			Total
Unrealized appreciation of forward foreign currency contracts		$	-		$	644,314			$	-		$	-		$	-		$	644,314
Liabilities:	Credit contracts			Foreign exchange contracts				Commodity contracts			Interest rate contracts			Equity contracts			Total
Unrealized depreciation of forward foreign currency contracts		$	-		$	(20,067	)		$	-		$	-		$	-		$	(20,067	)

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American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

The effect of financial derivative instruments on the Statements of Operations as of January 31, 2020:
	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		$	-		$	1,135,645		$	-		$	-		$	-		$	1,135,645
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		$	-		$	991,121		$	-		$	-		$	-		$	991,121

GLG Total Return Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of January 31, 2020:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts				Foreign exchange contracts				Commodity contracts			Interest rate contracts				Equity contracts			Total
Unrealized appreciation of forward foreign currency contracts		$	-			$	466,710			$	-		$	-			$	-		$	466,710
Unrealized appreciation from swap agreements			47,299				-				-			-				-			47,299
Liabilities:	Credit contracts				Foreign exchange contracts				Commodity contracts			Interest rate contracts				Equity contracts			Total
Unrealized depreciation of forward foreign currency contracts		$	-			$	(682,062	)		$	-		$	-			$	-		$	(682,062	)
Unrealized depreciation from swap agreements			(27,333	)			-				-			(1,089,679	)			-			(1,117,012	)

The effect of financial derivative instruments on the Statements of Operations as of January 31, 2020:
	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		$	-			$	191,764		$	-		$	-			$	-		$	191,764
Swap agreements			(6,075,503	)			-			-			(14,941,414	)			-			(21,016,917	)
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		$	-			$	1,804,289		$	-		$	-			$	-		$	1,804,289
Swap agreements			553,672				-			-			12,267,753				-			12,821,425

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

Master Agreements

International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) with counterparties govern transactions in OTC derivative and foreign exchange contracts entered into by the Fund and those counterparties. The ISDA Master Agreements contain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to terminate early could be material to the financial statements. Since different types of forward and OTC financial derivative transactions have different mechanics and are sometimes traded out of different legal entities of a particular counterparty organization, each type of transaction may be covered by a different Master Agreement, resulting in the need for multiple agreements with a single

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January 31, 2020

counterparty. As the ISDA Master Agreements are specific to unique operations of different asset types, they allow a Fund to net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty.

Master 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, January 31, 2020.

Frontier Markets Income Fund

Offsetting of Financial and Derivative Assets as of January 31, 2020:
	Assets		Liabilities
Forward Foreign Currency Contracts	$	644,314	$	20,067
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	644,314	$	20,067
Total derivative assets and liabilities subject to an MNA	$	644,314	$	20,067

Financial Assets, Derivatives, and Collateral Received/(Pledged) by Counterparty as of January 31, 2020:
						Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Amounts of Assets Presented in the Statement of Assets and  Liabilities		Derivatives Available for Offset			Non-Cash  Collateral Received(2)		Cash Collateral Received(2)			Net Amount
Barclays Bank PLC	$	156,206	$	(14,054	)	$	-	$	(110,000	)	$	32,152
Citibank, N.A.		65,831		-			-		(65,831	)		-
ICBC Standard Bank PLC		202,437		(2,692	)		-		-			199,745
Merrill Lynch International		193,792		-			-		-			193,792
State Street Bank & Trust Co.		26,048		-			-		-			26,048
Total	$	644,314	$	(16,746	)	$	-	$	(175,831	)	$	45,737
						Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Amounts of Liabilities Presented in the Statement of Assets and Liabilities		Derivatives Available for Offset			Non-Cash  Collateral Pledged(2)		Cash Collateral Pledged(2)			Net Amount
Barclays Bank PLC	$	14,054	$	(14,054	)	$	-	$	-		$	-
ICBC Standard Bank PLC		2,692		(2,692	)		-		-			-
UBS AG		3,321		-			-		-			3,321
Total	$	20,067	$	(16,746	)	$	-	$	-		$	3,321

52

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

GLG Total Return Fund

Offsetting of Financial and Derivative Assets as of January 31, 2020:
	Assets			Liabilities
Swap Agreement - Centrally Cleared(1)	$	47,299		$	1,117,012
Forward Foreign Currency Contracts		466,710			682,062
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	514,009		$	1,799,074
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(47,299	)	$	(1,117,012	)
Total derivative assets and liabilities subject to an MNA	$	466,710		$	682,062

Financial Assets, Derivatives, and Collateral Received/(Pledged) by Counterparty as of January 31, 2020:
						Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Amounts of Assets Presented in the Statement of Assets and Liabilities		Derivatives Available for Offset			Non-Cash  Collateral Received(2)		Cash Collateral Received(2)			Net Amount
HSBC Bank (USA)	$	466,710	$	(466,710	)	$	-	$	-		$	-
						Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Amounts of Liabilities Presented in the Statement of Assets and Liabilities		Derivatives Available for Offset			Non-Cash  Collateral Pledged(2)		Cash Collateral Pledged(2)			Net Amount
HSBC Bank (USA)	$	682,062	$	(466,710	)	$	-	$	(215,352	)	$	-

⁽¹⁾ The securities presented here within are not subject to master netting agreements. As such, this is disclosed for informational purposes only.

⁽²⁾ The actual collateral received/pledged may be more than the amount reported due to overcollateralization.

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 Fund 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 Fund 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 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.

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Notes to Financial Statements

January 31, 2020

Currency Risk

The Funds may have exposure to foreign currencies by making direct investments in non-U.S. currencies or in securities denominated in non-U.S. currencies, or by purchasing or selling forward currency exchange contracts in non-U.S. currencies. 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 Fund’s 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.

Custody Risk

The Funds may invest in markets that are less developed than those in the U.S., which may expose the Funds to risks in the process of clearing and settling trades and the holding of securities by foreign banks, agents and depositories. Investments in frontier and emerging markets may be subject to greater custody risks than investments in more developed markets.

Derivatives Risk

Derivatives may involve significant risk. The use of derivative instruments may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities or other instruments underlying those derivatives, including the high degree of leverage often embedded in such instruments, and potential material and prolonged deviations between the theoretical value and realizable value of a derivative. Some derivatives have the potential for unlimited loss, regardless of the size of the Funds’ initial investment. Derivatives may be illiquid and may be more volatile than other types of investments. The Funds may buy or sell derivatives not traded on an exchange and which may be subject to heightened liquidity and valuation risk. Derivative investments can increase portfolio turnover and transaction costs. Derivatives also are subject to counterparty risk and credit risk. As a result, the Funds may obtain no recovery of their 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.

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 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

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January 31, 2020

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.

Frontier Markets Risk

Frontier market countries generally have smaller economies and less developed capital markets or legal, regulatory and political systems than traditional emerging market countries. As a result, the risks of investing in emerging market countries are magnified in frontier market countries. The magnification of risks are the result of (1) the potential for extreme price volatility and illiquidity in frontier markets; (2) government ownership or control of parts of the private sector or other protectionist measures; (3) large currency fluctuations; (4) fewer companies and investment opportunities; or (5) inadequate investor protections and regulatory enforcement. In certain frontier and emerging markets, fraud and corruption may be more prevalent than in developed market countries. Investments that the Fund holds may be exposed to these risks, which could have a negative impact on their value. Additional risks of frontier market securities may include: greater political instability (including the risk of war or natural disaster); increased risk of nationalization, expropriation, or other confiscation of assets of issuers to which the Fund is exposed; increased risk of embargoes or economic sanctions on a country, sector or issuer; greater risk of default (by both government and private issuers); more substantial governmental involvement in the economy; less governmental supervision and regulation; differences in, or lack of, auditing and financial reporting standards, which may result in unavailability of material information about issuers; less developed legal systems; inability to purchase and sell investments or otherwise settle security or derivative transactions (i.e., a market freeze); unavailability of currency hedging techniques; slower clearance and settlement; difficulties in obtaining and/or enforcing legal judgments; and significantly smaller market capitalizations of issuers.

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 investment-grade and non-investment grade fixed-income securities 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 long

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January 31, 2020

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 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 Funds’ performance to the extent the Funds are exposed to such interest rates.

Leverage Risk

The Funds’ use of futures, forward foreign currency contracts, swaps, other derivative instruments and selling securities short will have the economic effect of financial leverage. Financial leverage magnifies the exposure to the swings in prices of an asset or class of assets underlying a derivative instrument and results in increased volatility, which means that the Funds will have the potential for greater losses than if the Funds do not use the derivative instruments that have a leveraging effect. Leverage may result in losses that exceed the amount originally invested and may accelerate the rate of losses. Leverage tends to magnify, sometimes significantly, the effect of an increase or decrease in the Funds’ exposure to an asset or class of assets and may cause the Funds’ NAV to be volatile.

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 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 Disruption Risk

Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises and related geopolitical events have led, and in the future may continue to lead, to instability in world economies and markets generally. This instability has disrupted, and may continue to disrupt, U.S. and

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American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

world economies and markets and adversely affect the value of your investment. Such market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Changes in value may be temporary or may last for extended periods. Although multiple asset classes have been and may continue to be affected by a market disruption, the duration and effects may not be the same for all types of assets. Events that have led to market disruptions include the recent pandemic spread of the novel coronavirus known as COVID-19, which has resulted in travel restrictions, closed international borders, quarantines, disruptions to supply chains and lower consumer demand. The duration and full effects of these market disruptions are still uncertain. The effect of recent efforts undertaken by the Federal Reserve System to address the economic impact of the COVID-19 pandemic, such as the reduction of the federal funds target rate, and other monetary and fiscal actions that may be taken by the U.S. federal government to stimulate the U.S. economy, are not yet known. In addition, COVID-19 could cause the need for employees and vendors at various businesses, including the Manager, the sub-advisor(s) or other service providers, to work at external locations, and extensive medical absences. Because a large epidemic may create significant market and business uncertainties and disruptions, not all events that could affect the business of the Manager, the sub-advisor(s) or other service providers can be determined and addressed in advance.

Market Risk

In recent periods, fixed-income instruments have experienced 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 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, risks associated with the United Kingdom’s vote to leave the European Union, the risk of a ªtrade warº between the United States and China, 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. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations.

In addition, political and governmental events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. Because the impact on the markets has been widespread, it may be difficult to identify both risks and opportunities using past models of the interplay of market forces, or to predict the duration of these market conditions. 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 on various markets of a significant rate increase, whether brought about by U.S. policy makers or by dislocations in world markets. 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.

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’

57

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Notes to Financial Statements

January 31, 2020

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.

Non-Diversification Risk

The GLG Total Return Fund is non-diversified, which means it may focus its investments in the securities of a comparatively small number of issuers. Investments in securities of a limited number of issuers exposes the Funds to greater market risk and potential losses than if assets were diversified among the securities of a greater number of issuers.

Other Investment Companies Risk

The Funds may invest in shares of other registered investment companies, including exchange-traded funds (“ETFs”) and 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 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, ETF shares may trade at a premium or discount to their net asset value. An ETF that tracks an index may not precisely replicate the returns of its benchmark index.

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.

58

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

Sovereign and Quasi Sovereign Debt Risk

An investment in sovereign and quasi-sovereign debt obligations involves special risks not present in corporate debt obligations. Sovereign and quasi-sovereign debt securities are issued or guaranteed by a sovereign government or entity affiliated with or backed by a sovereign government. The issuer of the sovereign or quasisovereign debt that controls the repayment of the debt may be unable or unwilling to repay principal or interest when due, and the Fund may have limited recourse in the event of a default. In addition, these investments are subject to risk of payment delays or defaults due to (1) country cash flow problems, (2) insufficient foreign currency reserves, (3) political considerations, (4) large debt positions relative to the country’s economy, (5) policies toward foreign lenders or investors, (6) the failure to implement economic reforms required by the International Monetary Fund or other multilateral agencies, or (7) an inability or unwillingness to repay debts. It may be particularly difficult to enforce the rights of debt holders in frontier and emerging markets. A governmental entity that defaults on an obligation may request additional time in which to pay or receive further loans or may seek to restructure its obligations to reduce interest rates or outstanding principal. There is no legal process for collecting sovereign and quasi-sovereign debt that a government does not pay nor are there bankruptcy proceedings through which all or part of the sovereign debt that a governmental entity has not repaid may be collected. Sovereign and quasi-sovereign debt risk is increased for emerging and frontier markets issuers, which are among the largest debtors to commercial banks and foreign governments. At times, certain emerging market countries have declared moratoria on the payment of principal and interest on external debt. Certain emerging market countries have experienced difficulty in servicing their sovereign debt on a timely basis, which has led to defaults and the restructuring of certain indebtedness.

Swap Agreement Risk

The GLG Total Return Fund may invest in swap agreements. Swaps can involve greater risks than a direct investment in an underlying asset, because swaps typically include a certain amount of embedded leverage and as such are subject to leveraging risk. If swaps are used as a hedging strategy, a Fund is subject to the risk that the hedging strategy may not eliminate the risk that is intended to offset, due to, among other reasons, the occurrence of unexpected price movements or the non-occurrence of expected price movements. Swaps also may be difficult to value. Interest rate swaps, total return swaps, currency swaps, credit default swaps and commodities swaps are subject to counterparty risk, credit risk and liquidity risk. In addition, interest rate swaps are subject to interest rate risk, total return swaps are subject to market risk, and interest rate risk if the underlying securities are bonds or other debt obligations, currency swaps are subject to currency risk, and commodities swaps are subject to commodities risk.

Variable and Floating Rate Securities Risk

The coupons on certain fixed income securities in which a 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, 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 variable and floating rate securities typically decrease. Alternatively, during periods of rising interest rates, changes in the coupons of variable and 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 variable and floating rate securities may decline if their coupons do not rise as much, or as quickly, as interest rates in general. Conversely, variable and floating rate securities will not generally increase in value if interest rates decline. Variable and floating rate securities are less effective at locking in a particular yield and are subject to credit risk.

59

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020 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 Funds also utilize earnings and profits distributed to shareholders on redemptions of shares as part of the dividends paid deduction.

The tax character of distributions paid were as follows:

	Frontier Markets Income Fund				GLG Total Return Fund
	Year Ended January 31, 2020		Year Ended January 31, 2019		Year Ended January 31, 2020		Year Ended January 31, 2019
Distributions paid from:
Ordinary income*
Institutional Class	$	5,751,687	$	6,063,094	$		$	51,365
Y Class		19,454,443		11,141,405		-		21,744
Investor Class		5,098,405		3,746,033		-		5,883
A Class		266,177		291,836		-		3,987
C Class		847,405		743,483		-		3,899
Ultra Class		-		-		-		18,743,203
Long-term capital gains
Institutional Class		-		-		-		162
Y Class		-		-		-		68
Investor Class		-		-		-		19
A Class		-		-		-		12
C Class		-		-		-		12
Ultra Class		-		-		-		58,888
Return of capital
Institutional Class		185,581		-		-		-
Y Class		790,312		-		-		-
Investor Class		191,437		-		-		-
A Class		11,126		-		-		-
C Class		32,942		-		-		-
Ultra Class		-		-		-		-
Total distributions paid	$	32,629,515	$	21,985,851	$	-	$	18,889,242

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

60

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

As of January 31, 2020, the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Frontier Markets Income	$	468,677,234	$	17,000,303	$	(31,685,400	)	$	(14,685,097	)
GLG Total Return		18,793,449		2,303,690		(3,579,169	)		(1,275,479	)

Fund	Net Unrealized Appreciation (Depreciation)			Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences			Distributable Earnings
Frontier Markets Income	$	(14,685,097	)	$	-	$	-	$	(14,587,025	)	$	(1	)	$	(29,272,123	)
GLG Total Return		(1,275,479	)		-		-		(20,356,406	)		(584	)		(21,632,469	)

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 losses, premium amortization accruals, the tax deferral of losses from straddles, and the realization for tax purposes of unrealized gains (losses) on certain derivative instruments.

Due to inherent differences in the recognition of income, expenses, and realized gains (losses) under U.S. 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 net operating losses as of January 31, 2020:

Fund	Paid-In-Capital			Distributable Earnings/(Deficits)
Frontier Markets Income	$	-		$	-
GLG Total Return		(8,593,898	)		8,593,898

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.

During the year ended January 31, 2020, the Funds had the following post RIC MOD capital loss carryforwards:

Fund	Short-Term Capital Loss Carryforwards		Long-Term Capital Loss Carryforwards
Frontier Markets Income	$	3,079,874	$	11,507,151
GLG Total Return		20,005,212		-

The Fund is permitted for tax purposes to defer into its next fiscal year qualified late year losses. Qualified late year capital losses are any capital losses incurred after October 31 through the Fund’s fiscal year end, January 31, 2020. Qualified late year ordinary losses are specified losses generally incurred after October 31 and ordinary losses incurred after December 31 through the end of the Fund’s fiscal year, January 31, 2020. For the period ended January 31, 2020, GLG Total Return Fund $351,194 in late year ordinary losses to February 1, 2020.

61

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

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 January 31, 2020 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
Frontier Markets Income	$	261,529,974	$	125,963,172
GLG Total Return		4,256,970		55,665,191

A summary of the Funds’ transactions in the USG Select Fund for the year ended January 31, 2020 were as follows:

Fund	Type of Transaction		January  31, 2019 Shares/Fair Value		Purchases		Sales		January  31, 2020 Shares/Fair Value		Dividend Income
Frontier Markets Income		Direct	$	21,053,587	$	356,260,063	$	346,016,126	$	31,297,524	$	653,924
GLG Total Return		Direct		4,402,966		278,357,136		282,147,199		612,903		146,043

9.  Borrowing Arrangements

Effective November 14, 2019 (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 12, 2020, 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 12, 2020 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 January 31, 2020, the Frontier Markets Income Fund borrowed $16,000,000 from the Committed Line for 57 day with interest charges of $38,292 in order to facilitate portfolio liquidity. The amount is recorded as “Loan fees” in the Statements of Operations. At January 31, 2020, neither Fund had an outstanding balance with either facility.

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American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

10.  Capital Share Transactions

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

	Institutional Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		3,338,617		$	29,122,162			3,070,392		$	28,213,463
Reinvestment of dividends		399,825			3,453,629			355,822			3,176,717
Shares redeemed		(2,868,171	)		(24,787,306	)		(3,251,151	)		(28,839,715	)
Redemption fees		-			8,602			-			29,120
Net increase in shares outstanding		870,271		$	7,797,087			175,063		$	2,579,585
	Y Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		23,563,975		$	204,831,707			12,531,283		$	114,296,669
Reinvestment of dividends		2,321,564			20,058,116			1,247,796			11,082,499
Shares redeemed		(8,975,647	)		(77,509,708	)		(4,502,098	)		(39,757,884	)
Redemption fees		-			26,883			-			48,302
Net increase in shares outstanding		16,909,892		$	147,406,998			9,276,981		$	85,669,586
	Investor Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		4,047,163		$	35,054,234			2,973,069		$	26,636,928
Reinvestment of dividends		606,567			5,233,427			418,581			3,726,381
Shares redeemed		(1,915,567	)		(16,587,248	)		(2,122,257	)		(18,832,117	)
Redemption fees		-			7,572			-			7,815
Net increase in shares outstanding		2,738,163		$	23,707,985			1,269,393		$	11,539,007
	A Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		216,868		$	1,888,083			206,492		$	1,906,208
Reinvestment of dividends		28,278			244,111			29,710			266,124
Shares redeemed		(130,733	)		(1,137,187	)		(253,821	)		(2,289,629	)
Redemption fees		-			423			-			1,491
Net increase (decrease) in shares outstanding		114,413		$	995,430			(17,619	)	$	(115,806	)
	C Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
Frontier Markets Income Fund	Shares			Amount			Shares			Amount
Shares sold		420,289		$	3,634,212			463,799		$	4,257,101
Reinvestment of dividends		96,607			830,946			83,406			739,780
Shares redeemed		(273,906	)		(2,361,526	)		(233,451	)		(2,078,167	)
Redemption fees		-			1,393			-			2,271
Net increase in shares outstanding		242,990		$	2,105,025			313,754		$	2,920,985
	Institutional Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		-		$	-			100,000		$	1,090,000
Reinvestment of dividends		-			-			1,175			12,087
Shares redeemed		-			-			(100,000	)		(1,029,000	)
Net increase in shares outstanding		-		$	-			1,175		$	73,087

63

American Beacon Funds^SM

Notes to Financial Statements

January 31, 2020

	Y Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		2,764		$	27,850			24,399		$	255,017
Reinvestment of dividends		-			-			2,128			21,812
Shares redeemed		(53,446	)		(534,513	)		(58,066	)		(610,285	)
Net decrease in shares outstanding		(50,682	)	$	(506,663	)		(31,539	)	$	(333,456	)
	Investor Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		99		$	1,000			858		$	9,000
Reinvestment of dividends		-			-			579			5,902
Shares redeemed		(590	)		(5,811	)		(2,078	)		(21,008	)
Net decrease in shares outstanding		(491	)	$	(4,811	)		(641	)	$	(6,106	)
	A Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
GLG Total Return Fund	Shares			Amount			Shares			Amount
Reinvestment of dividends		-		$	-			393		$	3,999
Net increase in shares outstanding		-		$	-			393		$	3,999
	C Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
GLG Total Return Fund	Shares			Amount			Shares			Amount
Reinvestment of dividends		-		$	-			390		$	3,911
Net increase in shares outstanding		-		$	-			390		$	3,911
	Ultra Class
	Year Ended January 31, 2020						Year Ended January 31, 2019
GLG Total Return Fund	Shares			Amount			Shares			Amount
Shares sold		5,219,045		$	53,021,752			16,668,784		$	177,675,100
Reinvestment of dividends		-			-			1,824,890			18,796,370
Shares redeemed		(49,503,239	)		(500,704,628	)		(43,275,069	)		(461,146,321	)
Net decrease in shares outstanding		(44,284,194	)	$	(447,682,876	)		(24,781,395	)	$	(264,674,851	)

11.  Subsequent Events

On March 4, 2020, the Board of the Trust approved a plan to liquidate and terminate the American Beacon GLG Total Return Fund, on or about June 30, 2020.

Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a virus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations and individual issuers, all of which may negatively impact the Funds performance. Management’s evaluation is ongoing and the financial landscape continues to change.

64

American Beacon Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,
	2020			2019A			2018			2017			2016
Net asset value, beginning of period	$	8.68		$	9.62		$	8.96		$	8.35		$	9.68
Income (loss) from investment operations:
Net investment income		0.76			0.80			0.77			0.88			0.67
Net gains (losses) on investments (both realized and unrealized)		0.15			(0.96	)		0.61			0.44			(1.30	)
Total income (loss) from investment operations		0.91			(0.16	)		1.38			1.32			(0.63	)
Less distributions:
Dividends from net investment income		(0.74	)		(0.78	)		(0.72	)		(0.08	)		(0.50	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		(0.02	)B		-			-			(0.63	)B		(0.20	)B
Total distributions		(0.76	)		(0.78	)		(0.72	)		(0.71	)		(0.70	)
Redemption fees added to beneficial interestsC		-			-			-			-			-
Net asset value, end of period	$	8.83		$	8.68		$	9.62		$	8.96		$	8.35
Total returnD		11.00	%		(1.58	)%		15.92	%		16.20	%		(6.98	)%
Ratios and supplemental data:
Net assets, end of period	$	71,344,608		$	62,523,243		$	67,653,731		$	13,047,515		$	10,531,288
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.11	%		1.20	%		1.17	%		1.40	%		1.14	%
Expenses, net of reimbursements or recoupments		1.16	%F		1.17	%F		1.15	%		1.27	%E		1.15	%
Net investment income, before expense reimbursements or recoupments		8.92	%		8.87	%		9.04	%		9.98	%		7.14	%
Net investment income, net of reimbursements or recoupments		8.87	%		8.90	%		9.06	%		10.11	%		7.13	%
Portfolio turnover rate		39	%		21	%		22	%		69	%		68	%

^A  On October 1, 2018, Aberdeen Asset Managers Limited began managing a portion of the assets of the American Beacon Frontier Markets Income Fund.

^B  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^C  Amount represents less than $0.01 per share.

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

^E  Voluntary expense cap. See Note 2 of the Notes to the Financial Statements.

^F  Includes non-operating expenses consisting of loan interest expenses. The expenses, net of reimbursements or recoupments ratio excluding non-operating expenses is 1.15% for the year ended 2020 and 2019, respectively.

See accompanying notes

65

American Beacon Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended January 31,
	2020			2019A			2018			2017			2016
Net asset value, beginning of period	$	8.68		$	9.63		$	8.97		$	8.34		$	9.69
Income (loss) from investment operations:
Net investment income		0.77			0.74			0.79			0.90			0.61
Net gains (losses) on investments (both realized and unrealized)		0.14			(0.92	)		0.58			0.44			(1.28	)
Total income (loss) from investment operations		0.91			(0.18	)		1.37			1.34			(0.67	)
Less distributions:
Dividends from net investment income		(0.73	)		(0.77	)		(0.71	)		(0.08	)		(0.50	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		(0.02	)B		-			-			(0.63	)B		(0.18	)B
Total distributions		(0.75	)		(0.77	)		(0.71	)		(0.71	)		(0.68	)
Redemption fees added to beneficial interestsC		-			-			-			-			-
Net asset value, end of period	$	8.84		$	8.68		$	9.63		$	8.97		$	8.34
Total returnD		11.08	%		(1.76	)%		15.83	%		16.37	%		(7.40	)%
Ratios and supplemental data:
Net assets, end of period	$	303,866,061		$	151,728,470		$	79,007,953		$	23,715,300		$	29,434,613
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.19	%		1.29	%		1.25	%		1.48	%		1.18	%
Expenses, net of reimbursements or recoupments		1.22	%F		1.27	%F		1.25	%		1.37	%E		1.25	%
Net investment income, before expense reimbursements or recoupments		9.11	%		8.79	%		8.94	%		10.49	%		7.35	%
Net investment income, net of reimbursements or recoupments		9.08	%		8.80	%		8.94	%		10.61	%		7.28	%
Portfolio turnover rate		39	%		21	%		22	%		69	%		68	%

^A  On October 1, 2018, Aberdeen Asset Managers Limited began managing a portion of the assets of the American Beacon Frontier Markets Income Fund.

^B  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^C  Amount represents less than $0.01 per share.

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

^E  Voluntary expense cap. See Note 2 of the Notes to the Financial Statements.

^F  Includes non-operating expenses consisting of loan interest expenses. The expenses, net of reimbursements or recoupments ratio excluding non-operating expenses is 1.21 and 1.25% for the year ended 2020 and 2019, respectively.

See accompanying notes

66

American Beacon Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,
	2020			2019A			2018			2017			2016
Net asset value, beginning of period	$	8.67		$	9.61		$	8.95		$	8.35		$	9.68
Income (loss) from investment operations:
Net investment income		0.73			0.74			0.78			0.85			0.63
Net gains (losses) on investments (both realized and unrealized)		0.15			(0.93	)		0.57			0.43			(1.30	)
Total income (loss) from investment operations		0.88			(0.19	)		1.35			1.28			(0.67	)
Less distributions:
Dividends from net investment income		(0.71	)		(0.75	)		(0.69	)		(0.07	)		(0.47	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		(0.02	)B		-			-			(0.61	)B		(0.19	)B
Total distributions		(0.73	)		(0.75	)		(0.69	)		(0.68	)		(0.66	)
Redemption fees added to beneficial interestsC		-			-			-			-			-
Net asset value, end of period	$	8.82		$	8.67		$	9.61		$	8.95		$	8.35
Total returnD		10.71	%		(1.94	)%		15.59	%		15.69	%		(7.33	)%
Ratios and supplemental data:
Net assets, end of period	$	73,505,036		$	48,475,727		$	41,560,845		$	20,120,332		$	15,934,048
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.47	%		1.52	%		1.41	%		1.72	%		1.44	%
Expenses, net of reimbursements or recoupments		1.45	%F		1.52	%F		1.51	%		1.63	%E		1.53	%
Net investment income, before expense reimbursements or recoupments		8.77	%		8.57	%		8.73	%		9.62	%		6.84	%
Net investment income, net of reimbursements or recoupments		8.79	%		8.57	%		8.64	%		9.71	%		6.76	%
Portfolio turnover rate		39	%		21	%		22	%		69	%		68	%

^A  On October 1, 2018, Aberdeen Asset Managers Limited began managing a portion of the assets of the American Beacon Frontier Markets Income Fund.

^B  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^C  Amount represents less than $0.01 per share.

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

^E  Voluntary expense cap. See Note 2 of the Notes to the Financial Statements.

^F  Includes non-operating expenses consisting of loan interest expenses. The expenses, net of reimbursements or recoupments ratio excluding non-operating expenses is 1.44% and 1.50% for the year ended 2020 and 2019, respectively.

See accompanying notes

67

American Beacon Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended January 31,
	2020			2019A			2018			2017			2016
Net asset value, beginning of period	$	8.65		$	9.62		$	8.96		$	8.35		$	9.68
Income (loss) from investment operations:
Net investment income		0.72			0.75			0.81			0.90			0.62
Net gains (losses) on investments (both realized and unrealized)		0.18			(0.98	)		0.53			0.39			(1.29	)
Total income (loss) from investment operations		0.90			(0.23	)		1.34			1.29			(0.67	)
Less distributions:
Dividends from net investment income		(0.70	)		(0.74	)		(0.68	)		(0.07	)		(0.47	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		(0.02	)B		-			-			(0.61	)B		(0.19	)B
Total distributions		(0.72	)		(0.74	)		(0.68	)		(0.68	)		(0.66	)
Redemption fees added to beneficial interestsC		-			-			-			-			-
Net asset value, end of period	$	8.83		$	8.65		$	9.62		$	8.96		$	8.35
Total returnD		10.89	%		(2.31	)%		15.51	%		15.77	%		(7.36	)%
Ratios and supplemental data:
Net assets, end of period	$	4,275,426		$	3,200,206		$	3,726,687		$	4,648,954		$	7,513,980
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.49	%		1.53	%		1.48	%		1.78	%		1.52	%
Expenses, net of reimbursements or recoupments		1.41	%F		1.71	%F		1.55	%		1.67	%E		1.55	%
Net investment income, before expense reimbursements or recoupments		8.53	%		8.49	%		8.65	%		9.85	%		6.89	%
Net investment income, net of reimbursements or recoupments		8.61	%		8.30	%		8.58	%		9.96	%		6.86	%
Portfolio turnover rate		39	%		21	%		22	%		69	%		68	%

^A  On October 1, 2018, Aberdeen Asset Managers Limited began managing a portion of the assets of the American Beacon Frontier Markets Income Fund.

^B  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^C  Amount represents less than $0.01 per share.

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

^E  Voluntary expense cap. See Note 2 of the Notes to the Financial Statements.

^F  Includes non-operating expenses consisting of loan interest expenses. The expenses, net of reimbursements or recoupments ratio excluding non-operating expenses is 1.40% and 1.69% for the year ended 2020 and 2019, respectively.

See accompanying notes

68

American Beacon Frontier Markets Income Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31,
	2020			2019A			2018			2017			2016
Net asset value, beginning of period	$	8.64		$	9.58		$	8.93		$	8.34		$	9.67
Income (loss) from investment operations:
Net investment income		0.68			0.68			0.65			0.83			0.56
Net gains (losses) on investments (both realized and unrealized)		0.14			(0.95	)		0.62			0.39			(1.30	)
Total income (loss) from investment operations		0.82			(0.27	)		1.27			1.22			(0.74	)
Less distributions:
Dividends from net investment income		(0.65	)		(0.67	)		(0.62	)		(0.07	)		(0.42	)
Distributions from net realized gains		-			-			-			-			-
Tax return of capital		(0.02	)B		-			-			(0.56	)B		(0.17	)B
Total distributions		(0.67	)		(0.67	)		(0.62	)		(0.63	)		(0.59	)
Redemption fees added to beneficial interestsC		-			-			-			-			-
Net asset value, end of period	$	8.79		$	8.64		$	9.58		$	8.93		$	8.34
Total returnD		9.94	%		(2.74	)%		14.66	%		14.90	%		(8.06	)%
Ratios and supplemental data:
Net assets, end of period	$	12,599,753		$	10,283,443		$	8,398,773		$	1,724,982		$	2,049,234
Ratios to average net assets:
Expenses, before reimbursements or recoupments		2.18	%		2.28	%		2.29	%		2.55	%		2.31	%
Expenses, net of reimbursements or recoupments		2.19	%E		2.33	%E		2.30	%		2.30	%		2.30	%
Net investment income, before expense reimbursements or recoupments		7.96	%		7.79	%		7.81	%		8.90	%		5.89	%
Net investment income, net of reimbursements or recoupments		7.95	%		7.75	%		7.81	%		9.14	%		5.90	%
Portfolio turnover rate		39	%		21	%		22	%		69	%		68	%

^A  On October 1, 2018, Aberdeen Asset Managers Limited began managing a portion of the assets of the American Beacon Frontier Markets Income Fund.

^B  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^C  Amount represents less than $0.01 per share.

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

^E  Includes non-operating expenses consisting of loan interest expenses. The expenses, net of reimbursements or recoupments ratio excluding non-operating expenses is 2.17% and 2.30% for the year 2020 and 2019, respectively.

See accompanying notes

69

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Institutional Class
	Year Ended January 31,									May 20, 2016A to January 31,
	2020			2019			2018			2017
Net asset value, beginning of period	$	10.16		$	10.50		$	10.69		$	10.00
Income (loss) from investment operations:
Net investment income		0.11			0.11	B		0.06	B		0.07
Net gains (losses) on investments (both realized and unrealized)		(0.19	)		(0.06	)		(0.12	)		0.73
Total income (loss) from investment operations		(0.08	)		0.05			(0.06	)		0.80
Less distributions:
Dividends from net investment income		-			(0.15	)		(0.11	)		(0.10	)
Distributions from net realized gains		-			(0.24	)		(0.02	)		(0.01	)
Tax return of capital		-			-			(0.00	)CD		-
Total distributions		-			(0.39	)		(0.13	)		(0.11	)
Net asset value, end of period	$	10.08		$	10.16		$	10.50		$	10.69
Total returnE		(0.79	)%		0.47	%		(0.64	)%		7.95	%F
Ratios and supplemental data:
Net assets, end of period	$	320,815		$	323,306		$	321,683		$	7,560,278
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.11	%		1.03	%		1.03	%		2.09	%G
Expenses, net of reimbursements or recoupments		1.11	%		1.06	%		1.05	%		1.05	%G
Net investment income, before expense reimbursements or recoupments		1.04	%		1.06	%		0.49	%		0.01	%G
Net investment income, net of reimbursements or recoupments		1.04	%		1.04	%		0.46	%		1.05	%G
Portfolio turnover rate		19	%		326	%		248	%		311	%H

^A  Commencement of operations.

^B  Per share amounts have been calculated using the average shares method.

^C  Tax return of capital is calculated based on outstanding shares at the time of distribution.

^D  Amount represents less than $0.01 per share.

^E  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.

^F  Not annualized.

^G  Annualized.

^H  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

See accompanying notes

70

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended January 31,									May 20, 2016A to January 31,
	2020			2019			2018			2017
Net asset value, beginning of period	$	10.10		$	10.47		$	10.68		$	10.00
Income (loss) from investment operations:
Net investment income		0.11	G		0.08			0.09			0.07
Net gains (losses) on investments (both realized and unrealized)		(0.21	)		(0.06	)		(0.17	)		0.72
Total income (loss) from investment operations		(0.10	)		0.02			(0.08	)		0.79
Less distributions:
Dividends from net investment income		-			(0.15	)		(0.10	)		(0.10	)
Distributions from net realized gains		-			(0.24	)		(0.02	)		(0.01	)
Tax return of capital		-			-			(0.01	)B		-
Total distributions		-			(0.39	)		(0.13	)		(0.11	)
Redemption fees added to beneficial interests		-			-			-			-
Net asset value, end of period	$	10.00		$	10.10		$	10.47		$	10.68
Total returnC		(0.99	)%		0.17	%		(0.78	)%		7.85	%D
Ratios and supplemental data:
Net assets, end of period	$	170,055		$	683,994		$	1,038,736		$	107,884
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.26	%		1.05	%		1.18	%		5.31	%E
Expenses, net of reimbursements or recoupments		1.26	%		1.15	%		1.15	%		1.15	%E
Net investment income (loss), before expense reimbursements or recoupments		1.05	%		0.88	%		0.18	%		(3.21	)%E
Net investment income, net of reimbursements or recoupments		1.05	%		0.78	%		0.21	%		0.95	%E
Portfolio turnover rate		19	%		326	%		248	%		311	%F

^A  Commencement of operations.

^B  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^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 May 20, 2016 through January 31, 2016 and is not annualized.

^G  Per share amounts have been calculated using the average shares method.

See accompanying notes

71

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended January 31,									May 20, 2016A to January 31,
	2020			2019			2018			2017
Net asset value, beginning of period	$	10.04		$	10.43		$	10.66		$	10.00
Income (loss) from investment operations:
Net investment income		0.06			0.05			0.02			0.05
Net gains (losses) on investments (both realized and unrealized)		(0.17	)		(0.05	)		(0.13	)		0.72
Total income (loss) from investment operations		(0.11	)		-			(0.11	)		0.77
Less distributions:
Dividends from net investment income		-			(0.15	)		(0.09	)		(0.10	)
Distributions from net realized gains		-			(0.24	)		(0.02	)		(0.01	)
Tax return of capital		-			-			(0.01	)B		-
Total distributions		-			(0.39	)		(0.12	)		(0.11	)
Net asset value, end of period	$	9.93		$	10.04		$	10.43		$	10.66
Total returnC		(1.10	)%		(0.04	)%		(1.05	)%		7.65	%D
Ratios and supplemental data:
Net assets, end of period	$	132,414		$	138,852		$	150,889		$	128,790
Ratios to average net assets:
Expenses, before reimbursements or recoupments		2.29	%		1.80	%		2.09	%		5.14	%E
Expenses, net of reimbursements or recoupments		1.46	%F		1.43	%		1.43	%		1.43	%E
Net investment income (loss), before expense reimbursements or recoupments		(0.13	)%		0.21	%		(0.62	)%		(3.04	)%E
Net investment income, net of reimbursements or recoupments		0.70	%		0.57	%		0.03	%		0.67	%E
Portfolio turnover rate		19	%		326	%		248	%		311	%G

^A  Commencement of operations.

^B  Tax return of capital is calculated based on shares outstanding at the time of distribution.

^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  Includes non-operating expenses consisting of prime broker fees and dividends from securities sold short. The Expenses, net of reimbursements, excluding non-operating expenses is 1.43% for the year ended January 31, 2020.

^G  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

See accompanying notes

72

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended January 31,									May 20, 2016A to January 31,
	2020			2019			2018			2017
Net asset value, beginning of period	$	10.03		$	10.42		$	10.66		$	10.00
Income (loss) from investment operations:
Net investment income		0.07			0.07			0.00	B		0.05
Net gains (losses) on investments (both realized and unrealized)		(0.18	)		(0.07	)		(0.12	)		0.72
Total income (loss) from investment operations		(0.11	)		-			(0.12	)		0.77
Less distributions:
Dividends from net investment income		-			(0.15	)		(0.10	)		(0.10	)
Distributions from net realized gains		-			(0.24	)		(0.02	)		(0.01	)
Tax return of capital		-			-			(0.00	)BC		-
Total distributions		-			(0.39	)		(0.12	)		(0.11	)
Net asset value, end of period	$	9.92		$	10.03		$	10.42		$	10.66
Total returnD		(1.10	)%		(0.04	)%		(1.15	)%		7.65	%E
Ratios and supplemental data:
Net assets, end of period	$	105,189		$	106,404		$	106,439		$	107,660
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.37	%		1.31	%		1.42	%		5.62	%F
Expenses, net of reimbursements or recoupments		1.48	%		1.46	%		1.45	%		1.45	%F
Net investment income (loss), before expense reimbursements or recoupments		0.78	%		0.69	%		0.05	%		(3.51	)%F
Net investment income, net of reimbursements or recoupments		0.67	%		0.55	%		0.02	%		0.65	%F
Portfolio turnover rate		19	%		326	%		248	%		311	%G

^A  Commencement of operations.

^B  Amount represents less than $0.01 per share.

^C  Tax return of capital is calculated based on shares outstanding at the time of distribution.

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

^E  Not annualized.

^F  Annualized.

^G  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

See accompanying notes

73

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended January 31,									May 20, 2016A to January 31,
	2020			2019			2018			2017
Net asset value, beginning of period	$	9.88		$	10.34		$	10.61		$	10.00
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)		(0.01	)		(0.08	)		(0.01	)
Net gains (losses) on investments (both realized and unrealized)		(0.17	)		(0.07	)		(0.12	)		0.73
Total income (loss) from investment operations		(0.18	)		(0.08	)		(0.20	)		0.72
Less distributions:
Dividends from net investment income		-			(0.14	)		(0.04	)		(0.10	)
Distributions from net realized gains		-			(0.24	)		(0.02	)		(0.01	)
Tax return of capital		-			-			(0.01	)B		-
Total distributions		-			(0.38	)		(0.07	)		(0.11	)
Net asset value, end of period	$	9.70		$	9.88		$	10.34		$	10.61
Total returnC		(1.82	)%		(0.79	)%		(1.95	)%		7.15	%D
Ratios and supplemental data:
Net assets, end of period	$	102,317		$	104,277		$	105,096		$	107,101
Ratios to average net assets:
Expenses, before reimbursements or recoupments		2.12	%		2.06	%		2.17	%		6.37	%E
Expenses, net of reimbursements or recoupments		2.23	%		2.21	%		2.20	%		2.20	%E
Net investment income (loss), before expense reimbursements or recoupments		0.03	%		(0.06	)%		(0.70	)%		(4.27	)%E
Net investment income (loss), net of reimbursements or recoupments		(0.08	)%		(0.20	)%		(0.73	)%		(0.10	)%E
Portfolio turnover rate		19	%		326	%		248	%		311	%F

^A  Commencement of operations.

^B  Tax return of capital is calculated based on outstanding shares at the time of distribution.

^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 May 20, 2016 through January 31, 2017 and is not annualized.

See accompanying notes

74

American Beacon GLG Total Return Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Ultra
	Year Ended January 31,									May 20, 2016A to January 31,
	2020			2019			2018			2017
Net asset value, beginning of period	$	10.16		$	10.50		$	10.69		$	10.00
Income from investment operations:
Net investment income		0.58			0.13			0.11			0.07
Net gains (losses) on investments (both realized and unrealized)		(0.65	)		(0.08	)		(0.17	)		0.73
Total income (loss) from investment operations		(0.07	)		0.05			(0.06	)		0.80
Less distributions:
Dividends from net investment income		-			(0.15	)		(0.10	)		(0.10	)
Distributions from net realized gains		-			(0.24	)		(0.02	)		(0.01	)
Tax return of capital		-			-			(0.01	)B		-
Total distributions		-			(0.39	)		(0.13	)		(0.11	)
Net asset value, end of period	$	10.09		$	10.16		$	10.50		$	10.69
Total returnC		(0.69	)%		0.47	%		(0.57	)%		7.95	%D
Ratios and supplemental data:
Net assets, end of period	$	18,254,721		$	468,097,908		$	743,861,439		$	67,330,248
Ratios to average net assets:
Expenses, before reimbursements or recoupments		1.16	%		1.05	%		1.07	%		2.09	%E
Expenses, net of reimbursements or recoupments		0.99	%F		0.95	%		0.95	%		0.95	%E
Net investment income, before expense reimbursements or recoupments		1.23	%		0.92	%		0.34	%		0.76	%E
Net investment income, net of reimbursements or recoupments		1.40	%		1.02	%		0.46	%		1.91	%E
Portfolio turnover rate		19	%		326	%		248	%		311	%G

^A  Commencement of operations.

^B  Tax return of capital is calculated based on outstanding shares at the time of distribution.

^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  Includes non-operating expenses consisting of prime broker fees and dividends from securities sold short. The Expenses, net of reimbursements, excluding non-operating expenses is 0.95% for the year ended January 31, 2020.

^G  Portfolio turnover rate is for the period from May 20, 2016 through January 31, 2017 and is not annualized.

See accompanying notes

75

American Beacon Funds^SM

Federal Tax Information

December 31, 2020 (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 January 31, 2020. 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 January 31, 2020. 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:

Frontier Markets Income	0	%
GLG Total Return	0	%

Qualified Dividend Income:

Frontier Markets Income	0	%
GLG Total Return	0	%

Long-Term Capital Gain Distributions:

Frontier Markets Income	$	-
GLG Total Return		-

Short-Term Capital Gain Distributions:

Frontier Markets Income	$	-
GLG Total Return		-

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

76

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, and the American Beacon Apollo Total Return 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
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (50)	Trustee since 2015	President, SJVIIF, LLC, Impact Investment Fund (2018-Present); Director, Kura MD, Inc. (local telehealth organization) (2015-2017); Senior Vice President & CFO, Sierra Health Foundation (health conversion private foundation) (2006-Present); Senior 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, Valley Healthcare Staffing (2017-2018); 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).
Joseph B. Armes (57)	Trustee since 2015	Director, Switchback Energy Acquisition (2019-Present); 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) (2013-2018); 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).
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).
Brenda A. Cline (59)	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 (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).

77

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*
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); 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).
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).
Douglas A. Lindgren (58)	Trustee since 2018	CEO North America, Carne Global Financial Services (2016-2017); Consultant, Carne Financial Services (2017-2019); 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).
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.
R. Gerald Turner (74)	Trustee since 2001	President, Southern Methodist University (1995-Present); Director, J.C. Penney Company, Inc. (1996-2019); 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).

78

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	Term
	One Year
Gene L. Needles, Jr. (65)	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); Director, Green Harvest Asset Management (2019-Present); Director, National Investment Services of America, LLC (2019-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).

79

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, Green Harvest Asset Management (2019-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).
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).
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).
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).

80

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)	Principal Accounting Officer since 2017 and 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, Green Harvest Asset Management (2019-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).
Terri L. McKinney (56)	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).

81

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, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present); Director, National Investment Services of America, LLC (2019-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).
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).
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).

82

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 (63)	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).
Shelley D. Abrahams (45)	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);
Rebecca L. Harris (53)	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).
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); .
Peter A. Davidson (47)**	Assistant Secretary Since 2020	Assistant Secretary, American Beacon Select Funds (2020-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2020-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2020-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2020-Present).

* As of 11/12/2014, the Board adopted a retirement plan that requires Trustees to retire no later than the last day of the calendar year in which they reach the age of 75.

** Mr. Davidson was elected at the March 3, 2020 meeting of the Board.

83

American Beacon Funds^SM

Privacy Policy

January 31, 2020 (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.

84

Delivery of Documents

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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 end of each 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 each 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. Kansas City, Missouri INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Boston, Massachusetts 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 Frontier Markets Income Fund and American Beacon GLG Total Return Fund are service marks of American Beacon Advisors, Inc.

AR 1/20

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
$288,530		1/31/2019
$280,711		1/31/2020

(b)

Audit-Related Fees	Fiscal Year Ended
$0		1/31/2019
$0		1/31/2020

(c)

Tax Fees	Fiscal Year Ended
$71,090		1/31/2019
$84,526		1/31/2020

(d)

All Other Fees	Fiscal Year Ended
$0		1/31/2019
$0		1/31/2020

(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
$71,090	$	0	N/A		1/31/2019
$84,526	$	0	N/A		1/31/2020

(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: April 7, 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: April 7, 2020

By /s/ Melinda G. Heika

Melinda G. Heika

Treasurer

American Beacon Funds

Date: April 7, 2020