UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-4984

AMERICAN BEACON FUNDS

(Exact name of registrant as specified in charter)

220 East Las Colinas Boulevard, Suite 1200

Irving, Texas 75039

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

GENE L. NEEDLES, JR., PRESIDENT

220 East Las Colinas Boulevard, Suite 1200

Irving, Texas 75039

(Name and address of agent for service)

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

Date of fiscal year end: October 31, 2021

Date of reporting period: October 31, 2021

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.

BALANCED FUND RISKS

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

MID-CAP VALUE FUND RISKS

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

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

American Beacon Funds October 31, 2021

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	10
Report of Independent Registered Public Accounting Firm	12
Schedules of Investments:
American Beacon Balanced Fund	13
American Beacon Mid-Cap Value Fund	29
Financial Statements	35
Notes to Financial Statements	39
Financial Highlights:
American Beacon Balanced Fund	69
American Beacon Mid-Cap Value Fund	75
Federal Tax Information	82
Disclosure Regarding Approval of the Management and Investment Advisory Agreements	83
Trustees and Officers of the American Beacon Funds	89
Privacy Policy	96
Additional Fund Information	Back Cover

President’s Message

Dear Shareholders,   As Warren E. Buffett, the “Oracle of Omaha” and billionaire chairman and CEO of Berkshire Hathaway, once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”   That is to say, before we can enjoy the fruits of our labor, we must first devote our attention to the careful planning and cultivation of our estates. To achieve a strong yield requires time, diligence and patience – and there are no guarantees the seeds we plant today will thrive or result in a plentiful harvest. This can be said not only about the actions we undertake in our gardening or landscaping, but also those we initiate in our investment portfolios – especially as we take into account the potential for harm caused by natural disasters and other catastrophes, such as the COVID-19 pandemic.

Because none of us – not even the Oracle of Omaha – has a crystal ball, to help give your investment portfolio the greatest chance for success over the long term, we encourage you to work with financial professionals to develop your personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand short-term crises. With continuous nurturing, you will be better positioned to achieve enduring financial success.

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. 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 financial rewards.

Thank you for entrusting your financial success with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Domestic Bond and Domestic Equity Market Overviews

October 31, 2021 (Unaudited)

Domestic Bond Market Overview

In the U.S. fixed-income markets, the investment-grade Bloomberg U.S. Aggregate Bond Index (the “Index”) declined, returning -0.48% for the 12-month period ended October 31, 2021. Within the Index, the credit component returned 1.90%, agency-backed mortgages returned -0.58% and U.S. Treasuries returned -2.45%. Returns in the credit sectors outperformed during the period as spreads continued to narrow following the economic recovery. Treasury yields were higher by period end, causing negative total returns, as investors began to see through the pandemic to more normalized interest rate levels.

Lower quality outperformed with triple-B-rated corporate bonds returning 3.52%, single-A up 0.59% and double-A up 1.22%, according to the Index. The highest-returning sectors included: Energy, up 7.92%; Transportation, up 3.61%; and Capital Goods, up 3.26%. The lowest-returning sectors included: Technology, up 0.45%; Financials, up 1.38%; and Utilities, up 1.40%.

Economic news throughout the year was mostly positive, despite periodic disruptions due to the COVID-19 pandemic. In late 2020, the earlier-than-expected arrival of vaccines led to business reopenings and expectations for strong economic growth. By late 2021, consumer spending was solid, driven primarily by spending on housing and retail sales. The labor market steadily added new jobs, and generous unemployment benefits aided those temporarily out of work.

Following the rebounding economy, inflation also picked up during the period, reflecting supply chain disruptions and pent-up consumer demand. While inflation concerns mounted, the Federal Reserve viewed the price increases as transitory and argued that slack in the labor market, low manufacturing capacity utilization rates and an economy still running below potential would keep inflation muted. The 10-year U.S. Treasury yield ended the period at 1.60% (up from 0.9% at the beginning of the period), suggesting that investors were not particularly worried about long-term inflation either.

With regard to monetary policy, the Federal Reserve maintained the federal funds rate in a 0% to 0.25% range during the period and continued to purchase $80 billion in Treasuries and $40 billion in agency mortgage-backed securities each month. As Federal Open Market Committee members began to feel better about the economy, they discussed plans for tapering quantitative easing. At period end, markets were anticipating that the reduction in quantitative easing would likely begin in late 2021 and that the federal funds rate increases would arrive in late 2022 or early 2023.

Domestic Equity Market Overview

U.S. equities posted strong returns for the 12-month period ended October 31, 2021. The broader market, as measured by the Russell 3000 Index, posted a 43.89% gain. Smaller companies led the way with the Russell 2000 Index rising 50.80%. Mid- and large-cap companies also participated in the rally, with 45.40% and 43.51% returns for the Russell Midcap and Russell 1000 Indexes, respectively. The rally was consistent for most of the period, reflecting an improving economy, accommodative monetary policy and fiscal stimulus.

The prospect of full-scale COVID-19 vaccinations prompted a major shift in investor preference to under-owned Value stocks in the fourth quarter of 2020. Value’s outperformance continued into 2021 as the vaccine rollout accelerated, while massive fiscal and monetary stimulus set the stage for a powerful rebound in consumer spending. In June 2021 investor preference moved in favor of Growth-style stocks as the Federal Reserve spoke about potential tapering, while the spread of the COVID-19 delta variant in both Asia and the U.S. raised concerns about the economic impact. Stocks then rebounded strongly in October 2021 as macro concerns abated; both the Value and Growth cohorts benefited, with Growth outpacing Value. For the full 12-month period, Value stocks outpaced Growth as measured by the Russell 3000 Value Index return of 44.97% and the Russell 3000 Growth Index return of 42.81%.

Inflation picked up steam during 2021, reflecting supply chain disruptions and pent-up demand due to the pandemic. In its latest comments, the Federal Reserve acknowledged higher-than-expected inflation but continued

2

Domestic Bond and Domestic Equity Market Overviews

October 31, 2021 (Unaudited)

to point to overall deceleration in the rate with the expectation that core inflation (measured by the personal consumption expenditures deflator) could rise between 2% and 2.5% in 2022 and 2023 compared to a roughly 4% increase in 2021. Rising inflation has persisted longer than the Federal Reserve initially expected, but supply chain disruptions from the pandemic have contributed meaningfully to inflation in certain segments of the economy.

With regard to monetary policy, the Federal Reserve maintained the federal funds rate at 0% to 0.25% over the year and announced plans to begin tapering quantitative easing. The Federal Reserve will reduce asset purchases by $10 billion for U.S. Treasuries and $5 billion for agency mortgage-backed securities. The dot plots from Federal Open Market Committee members suggest rate increases could begin in late 2022.

3

American Beacon Balanced Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

The Investor Class of the American Beacon Balanced Fund (the “Fund”) returned 33.32% for the twelve months ended October 31, 2021, outperforming the 60% Russell 1000^® Value Index/40% Bloomberg U.S. Aggregate Bond Index return of 24.54% for the same period.

Comparison of Changes in Value of a $10,000 Investment for the period 10/31/2011 through 10/31/2021

Total Returns for the Period ended October 31, 2021
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of $10,000 10/31/2011- 10/31/2021
R5 Class (1,7)	AADBX		33.80	%		12.46	%		10.68	%		9.89	%		$	25,688
Y Class (1,2,7)	ACBYX		33.66	%		12.36	%		10.68	%		9.82	%		$	25,521
Investor Class (1,7)	AABPX		33.32	%		12.09	%		10.36	%		9.54	%		$	24,880
Advisor Class (1,7)	ABLSX		33.17	%		11.89	%		10.18	%		9.36	%		$	24,468
A Class without sales charge (1,3,7)	ABFAX		33.39	%		12.09	%		10.35	%		9.48	%		$	24,732
A Class with sales Charge (1,3,7)	ABFAX		25.68	%		9.89	%		9.05	%		8.83	%		$	23,302
C Class without sales charge (1,4,7)	ABCCX		32.32	%		11.25	%		9.54	%		8.67	%		$	22,956
C Class with sales charge (1,4,7)	ABCCX		31.32	%		11.25	%		9.54	%		8.67	%		$	22,956
40% Bloomberg U.S. Agg Bond/60% Russell 1000 Value (5)			24.54	%		11.10	%		8.97	%		9.08	%		$	23,844
Russell 1000® Value Index (6)			43.76	%		13.90	%		12.39	%		12.85	%		$	33,491
Bloomberg U.S. Aggregate Bond Index (6)			-0.48	%		5.63	%		3.10	%		3.00	%		$	13,437

* Not Annualized.

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

4

American Beacon Balanced Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

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. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future.

2. A portion of the fees charged to the Y Class of the Fund was waived in 2011, partially recovered in 2013 and fully recovered in 2014. Performance prior to waiving fees was lower than the actual returns shown for 2011.

3. A portion of the fees charged to the A Class of the Fund was waived in 2011 and 2012, partially recovered in 2013, fully recovered in 2014 and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown for 2011, 2012 and 2018. A Class has a maximum sales charge of 5.75%.

4. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012, partially recovered in 2013, fully recovered in 2014 and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012 and for 2018. The maximum contingent deferred sales charge for C Class is 1% for shares redeemed within one year of the date of purchase.

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

6. The Russell 1000^® Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. American Beacon Funds is not promoted, sponsored or endorsed by, nor in any way affiliated with the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. LSE Group is not responsible for and has not reviewed the American Beacon Balanced Fund nor any associated literature or publications and LSE Group makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. All rights in the Russell 1000 Value Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell 1000^® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by the Manager. The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. BLOOMBERG^® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”). Bloomberg or Bloomberg’s licensors, own all proprietary rights in the Bloomberg Indices. Bloomberg does not approve or endorse this material, or guarantee the accuracy or completeness of any information herein, or make any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, shall not have any liability or responsibility for injury or damages arising in connection therewith.

7. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, Advisor, A, and C Class shares were 0.69%, 0.77%, 1.01%, 1.17%, 1.02%, and 1.76%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

As of October 31, 2021, the Fund’s asset allocation was 60% in equities (including equitized cash) and 40% in fixed-income securities.

The equity portion of the Fund (excluding equitized cash) returned 64.11% for the period, outperforming the Russell 1000 Value Index (the “Index”) return of 43.76%. The Fund outperformed the Index as both sector allocation and stock selection contributed to outperformance relative to the Index.

Stock selection in the Financials and Health Care sectors contributed most of the relative outperformance during the twelve-month period. In the Financials sector, the Fund’s position in Wells Fargo & Co. (up 145.4%) and American International Group, Inc. (up 97.6%) were the biggest contributors. In the Health Care sector, Anthem, Inc. (up 61.8%) and CVS Health Corp. (up 64.0%) performed well. Conversely, positions in International Flavors & Fragrances, Inc. (up 6.8%) and Corteva, Inc. (up 33.2%) detracted from performance within the Materials sector.

The Fund’s overweight allocations to both Energy (up 112.4%) and Financials (up 74.2%) helped performance the most with respect to sector allocation. On the other hand, an underweight allocation to Real Estate (up 52.3%) detracted from the Fund’s relative outperformance.

5

American Beacon Balanced Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

The fixed-income portion of the Fund returned -0.48% for the twelve-month period, matching the Bloomberg U.S. Aggregate Bond Index (the “Index”) return of -0.48%. The Fund’s fixed-income performance relative to the Index was hampered by security selection but helped by contributions from sector allocation. The Fund’s selections in Service and Finance, both within Corporates, (down 0.2% and flat at 0.0%, respectively) detracted relative value. However, an underweight allocation to U.S. Treasuries (down 2.4%) and an overweight allocation to Manufacturing (up 1.9%), within Corporates, benefited the Fund. From a duration perspective, the portfolio’s return was hurt most by an underweight allocation to both the 1 to 3 year maturity and the 10 to 30 year maturity range (down 0.1% and up 0.1%, respectively), while security selection in the 10 to 30 year maturity range (up 1.8%) contributed to performance.

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

Top Ten Holdings (% Net Assets)
Wells Fargo & Co.		2.6
Anthem, Inc.		2.1
American International Group, Inc.		2.1
Citigroup, Inc.		1.8
Hess Corp.		1.6
General Electric Co.		1.4
U.S. Treasury Notes/Bonds, 1.500%, Due 2/15/2030		1.4
U.S. Treasury Notes/Bonds, 1.125%, Due 2/28/2025		1.2
Goldman Sachs Group, Inc.		1.2
U.S. Treasury Notes/Bonds, 1.500%, Due 1/31/2027		1.2
Total Fund Holdings	483
Sector Allocation (% Equities)
Financials		24.8
Health Care		13.7
Industrials		13.7
Energy		11.2
Consumer Discretionary		10.4
Information Technology		9.8
Communication Services		6.7
Materials		3.7
Consumer Staples		2.5
Utilities		2.0
Real Estate		1.5
Sector Allocation (% Fixed Income)
U.S. Treasury Obligations		32.6
U.S. Agency Mortgage-Backed Obligations		17.0
Financial		13.4
Consumer, Non-Cyclical		7.6
Communications		5.5
Technology		5.1
Industrial		4.6
Consumer, Cyclical		3.7
Energy		3.5
Utilities		3.2
Asset-Backed Obligations		2.6
Basic Materials		0.6
Commercial Mortgage-Backed Obligations		0.5
Foreign Sovereign Obligations		0.1

6

American Beacon Mid-Cap Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

The Investor Class of the American Beacon Mid-Cap Value Fund (the “Fund”) returned    57.34% for the twelve months ended October 31, 2021, outperforming the Russell Midcap^® Value Index (the “Index”) return of 48.60% for the same period.

Comparison of Changes in Value of a $10,000 Investment for the period 10/31/2011 through 10/31/2021

Total Returns for the Period ended October 31, 2021
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of $10,000 10/31/2011- 10/31/2021
R5 Class (1,3,10)	AACIX		57.68	%		13.66	%		11.26	%		12.11	%		$	31,376
Y Class (1,4,10)	ACMYX		57.60	%		13.58	%		11.18	%		12.04	%		$	31,157
Investor Class (1,2,10)	AMPAX		57.34	%		13.36	%		10.99	%		11.84	%		$	30,627
Advisor Class (1,5,10)	AMCSX		56.71	%		13.02	%		10.66	%		11.51	%		$	29,726
A Class without sales charge (1,6,10)	ABMAX		57.15	%		13.24	%		10.83	%		11.65	%		$	30,110
A Class with sales Charge (1,6,10)	ABMAX		48.09	%		11.03	%		9.52	%		10.99	%		$	28,368
C Class without sales charge (1,7,10)	AMCCX		55.99	%		12.43	%		10.06	%		10.84	%		$	27,996
C Class with sales charge (1,7,10)	AMCCX		54.99	%		12.43	%		10.06	%		10.84	%		$	27,996
R6 Class (1,8,10)	AMDRX		57.80	%		13.76	%		11.32	%		12.14	%		$	31,460
Russell Midcap® Value Index (9)			48.60	%		15.03	%		12.30	%		13.18	%		$	34,491

* Not Annualized.

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future.

7

American Beacon Mid-Cap Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

2. A portion of the fees charged to the Investor Class of the Fund was waived from 2006 through 2013, fully recovered in 2014 and waived in 2021. Performance prior to waiving fees was lower than actual returns shown for periods when waivers were in effect.

3. A portion of the fees charged to the R5 Class of the Fund was waived from 2005 through 2013, fully recovered in 2014 and waived in 2021. Performance prior to waiving fees was lower than actual returns shown for periods when waivers were in effect.

4. A portion of the fees charged to the Y Class of the Fund was waived from 2010 through 2013 and in 2021. Performance prior to waiving fees was lower than the actual returns shown for periods when waivers were in effect.

5. A portion of the fees charged to the Advisor Class of the Fund was waived from 2007 through 2013, fully recovered in 2014 and waived in 2021. Performance prior to waiving fees was lower than the actual returns shown for periods when waivers were in effect.

6. A portion of the fees charged to the A Class of the Fund was waived for 2010 through 2012, fully recovered in 2013 and waived in 2021. Performance prior to waiving fees was lower than the actual returns shown for periods when waivers were in effect. A Class shares have a maximum sales charge of 5.75%.

7. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2013, fully recovered in 2014 and waived in 2021. Performance prior to waiving fees was lower than the actual returns shown for periods when waivers were in effect. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

8. Fund performance for the five-year and ten-year periods represents the returns achieved by the R5 Class from 10/31/11 through 2/28/18, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 10/31/11. A portion of fees charged to the R6 Class of the Fund has been waived since Class inception. Performance prior to waiving fees was lower than actual returns shown since inception.

9. The Russell Midcap^® Value Index is an unmanaged index of those stocks in the Russell Midcap Index with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index. Russell Midcap Value Index, Russell Midcap Index and Russell 1000 Index are registered trademarks of Frank Russell Company. American Beacon Funds is not promoted, sponsored or endorsed by, nor in any way affiliated with the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. LSE Group is not responsible for and has not reviewed the American Beacon Mid-Cap Value Fund nor any associated literature or publications and LSE Group makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. All rights in the Russell Midcap Value Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell 1000^® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by the Manager. One cannot directly invest in an index.

10. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, Advisor, A, C, and R6 Class shares were 0.96%, 1.04%, 1.22%, 1.54%, 1.31%, 2.06% and 0.97%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund’s outperformance of the Index was due to both positive security selection and sector allocation.

From a security selection perspective, the Fund’s relative outperformance was driven by security selection in the Consumer Discretionary, Industrials, Information Technology and Materials sectors. In the Consumer Discretionary sector, contributors included SeaWorld Entertainment, Inc. (up 194.7%) and Gildan Activewear, Inc. (up 84.2%). Within the Industrials sector, AerCap Holdings NV (up 95.6%) and Avis Budget Group Inc. (up 104.9%) contributed to relative performance. Alliance Data Systems Corp. (up 115.4%) contributed within the Information Technology sector. Contributors in the Materials sector included Olin Corp. (up 279.1%) and Element Solutions, Inc. (up 106.1%). Partially offsetting this outperformance was security selection in the Communication Services sector; detractors included Altice USA, Inc., Class A (down 42.2%).

From a sector allocation perspective, a significant overweight allocation to the Financials sector and underweight allocations to the Utilities and Consumer Staples sectors contributed positively to relative performance. Partially offsetting this performance was an underweight allocation to the Real Estate sector.

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

8

American Beacon Mid-Cap Value Funds^SM

Performance Overview

October 31, 2021 (Unaudited)

Top Ten Holdings (% Net Assets)
Axis Capital Holdings Ltd.		2.5
American International Group, Inc.		1.6
PROG Holdings, Inc.		1.5
Element Solutions, Inc.		1.5
MGM Growth Properties LLC, Class A		1.5
AerCap Holdings NV		1.4
Equitable Holdings, Inc.		1.4
Ally Financial, Inc.		1.3
Pioneer Natural Resources Co.		1.3
Fidelity National Financial, Inc.		1.2
Total Fund Holdings	122
Sector Allocation (% Equities)
Financials		26.4
Industrials		17.2
Consumer Discretionary		16.1
Materials		8.2
Energy		7.5
Health Care		7.1
Utilities		5.9
Real Estate		4.6
Information Technology		3.6
Communication Services		1.7
Consumer Staples		1.7

9

American Beacon Funds^SM

Expense Examples

October 31, 2021 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees, if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2021 through October 31, 2021.

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 R5 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.

Hypothetical Example for Comparison Purposes

The “Hypothetical” lines of the tables provide information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio and an assumed 5% per year rate of return before expenses (not the Funds’ actual return). You may compare the ongoing costs of investing in the Funds with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Shareholders of the Investor and R5 Classes that invest in the Funds through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Funds, such as sales charges (loads) or redemption fees, as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.

10

American Beacon Funds^SM

Expense Examples

October 31, 2021 (Unaudited)

American Beacon Balanced Fund
	Beginning Account Value 5/1/2021		Ending Account Value 10/31/2021		Expenses Paid  During Period 5/1/2021-10/31/2021*
R5 Class
Actual		$1,000.00		$1,038.40		$3.70
Hypothetical**		$1,000.00		$1,021.58		$3.67
Y Class
Actual		$1,000.00		$1,037.70		$4.11
Hypothetical**		$1,000.00		$1,021.17		$4.08
Investor Class
Actual		$1,000.00		$1,036.50		$5.18
Hypothetical**		$1,000.00		$1,020.11		$5.14
Advisor Class
Actual		$1,000.00		$1,035.90		$6.06
Hypothetical**		$1,000.00		$1,019.26		$6.01
A Class
Actual		$1,000.00		$1,036.50		$5.39
Hypothetical**		$1,000.00		$1,019.91		$5.35
C Class
Actual		$1,000.00		$1,032.60		$9.07
Hypothetical**		$1,000.00		$1,016.28		$9.00

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.72%, 0.80%, 1.01%, 1.18%, 1.05%, and 1.77% for the R5, Y, Investor, Advisor, A, and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

American Beacon Mid-Cap Value Fund
	Beginning Account Value 5/1/2021		Ending Account Value 10/31/2021		Expenses Paid  During Period 5/1/2021-10/31/2021*
R5 Class
Actual		$1,000.00		$1,023.10		$4.64
Hypothetical**		$1,000.00		$1,020.62		$4.63
Y Class
Actual		$1,000.00		$1,022.80		$5.05
Hypothetical**		$1,000.00		$1,020.22		$5.04
Investor Class
Actual		$1,000.00		$1,021.70		$5.96
Hypothetical**		$1,000.00		$1,019.31		$5.96
Advisor Class
Actual		$1,000.00		$1,020.00		$7.59
Hypothetical**		$1,000.00		$1,017.69		$7.58
A Class
Actual		$1,000.00		$1,021.50		$6.42
Hypothetical**		$1,000.00		$1,018.85		$6.41
C Class
Actual		$1,000.00		$1,017.50		$10.22
Hypothetical**		$1,000.00		$1,015.07		$10.21
R6 Class
Actual		$1,000.00		$1,023.00		$4.59
Hypothetical**		$1,000.00		$1,020.67		$4.58

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.91%, 0.99%, 1.17%, 1.49%, 1.26%, 2.01%, and 0.90% for the R5, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

11

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders of American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund and the Board of Trustees of American Beacon Funds

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities of American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund (collectively referred to as the “Funds”), (two of the funds constituting American Beacon Funds (the “Trust”)), including the schedules of investments, as of October 31, 2021, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds (two of the funds constituting American Beacon Funds) at October 31, 2021, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and their financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

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

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

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

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

Dallas, Texas

December 30, 2021

12

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 60.44%
Communication Services - 4.05%
Interactive Media & Services - 0.90%
Alphabet, Inc., Class AA		570		$	1,687,724
Media - 2.38%
Altice USA, Inc., Class AA		41,828			681,796
Comcast Corp., Class A		34,606			1,779,787
Discovery, Inc., Class CA		43,599			983,593
News Corp., Class A		34,200			783,180
Omnicom Group, Inc.		3,886			264,559
					4,492,915
Wireless Telecommunication Services - 0.77%
T-Mobile US, Inc.A		6,238			717,557
Vodafone Group PLC, ADR		49,632			741,999
					1,459,556
Total Communication Services					7,640,195
Consumer Discretionary - 6.25%
Auto Components - 0.95%
Adient PLCA		5,232			217,756
Goodyear Tire & Rubber Co.A		17,659			337,640
Magna International, Inc.B		15,304			1,244,215
					1,799,611
Automobiles - 0.98%
General Motors Co.A		29,242			1,591,642
Harley-Davidson, Inc.		7,041			256,926
					1,848,568
Hotels, Restaurants & Leisure - 1.23%
Aramark		14,589			532,207
Booking Holdings, Inc.A		200			484,156
Las Vegas Sands Corp.A		33,429			1,297,379
					2,313,742
Household Durables - 0.31%
Lennar Corp., Class A		5,881			587,688
Multiline Retail - 0.85%
Dollar General Corp.		7,287			1,614,216
Specialty Retail - 1.31%
Advance Auto Parts, Inc.		6,109			1,377,702
Lowe’s Cos., Inc.		4,654			1,088,198
					2,465,900
Textiles, Apparel & Luxury Goods - 0.62%
Ralph Lauren Corp.		9,161			1,165,005
Total Consumer Discretionary					11,794,730
Consumer Staples - 1.51%
Beverages - 0.77%
Coca-Cola Europacific Partners PLC		27,397			1,442,452
Food Products - 0.26%
Mondelez International, Inc., Class A		8,200			498,068
Personal Products - 0.48%
Unilever PLC, ADR		17,000			910,860
Total Consumer Staples					2,851,380

See accompanying notes

13

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 60.44% (continued)
Energy - 6.77%
Energy Equipment & Services - 1.14%
Baker Hughes Co.		15,800		$	396,264
Halliburton Co.		27,000			674,730
NOV, Inc.A		48,900			685,578
Schlumberger NV		12,500			403,250
					2,159,822
Oil, Gas & Consumable Fuels - 5.63%
APA Corp.		44,614			1,169,333
Hess Corp.		36,311			2,998,199
Marathon Oil Corp.		112,331			1,833,242
Marathon Petroleum Corp.		7,631			503,112
Murphy Oil Corp.		7,000			194,810
Phillips 66		24,878			1,860,377
Pioneer Natural Resources Co.		5,798			1,084,110
Royal Dutch Shell PLC, Class A, ADR		21,135			970,519
					10,613,702
Total Energy					12,773,524
Financials - 14.99%
Banks - 6.64%
Bank of America Corp.		9,498			453,814
CIT Group, Inc.		8,750			433,387
Citigroup, Inc.		48,617			3,362,352
Citizens Financial Group, Inc.		14,868			704,446
JPMorgan Chase & Co.		6,836			1,161,368
US Bancorp		23,461			1,416,341
Wells Fargo & Co.		97,443			4,985,184
					12,516,892
Capital Markets - 3.01%
Bank of New York Mellon Corp.		17,615			1,042,808
Credit Suisse Group AG, ADRB		56,100			578,391
Goldman Sachs Group, Inc.		5,525			2,283,759
Northern Trust Corp.		8,963			1,102,808
State Street Corp.		6,806			670,731
					5,678,497
Consumer Finance - 0.91%
American Express Co.		5,976			1,038,509
SLM Corp.		36,863			676,436
					1,714,945
Diversified Financial Services - 0.63%
Berkshire Hathaway, Inc., Class BA		3,100			889,731
Equitable Holdings, Inc.		8,900			298,150
					1,187,881
Insurance - 3.80%
American International Group, Inc.		65,791			3,887,590
Chubb Ltd.		2,370			463,051
Hartford Financial Services Group, Inc.		10,200			743,886
Travelers Cos., Inc.		5,657			910,098
Willis Towers Watson PLC		4,799			1,162,702
					7,167,327
Total Financials					28,265,542
Health Care - 8.30%
Health Care Equipment & Supplies - 0.93%
Boston Scientific Corp.A		6,900			297,597

See accompanying notes

14

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 60.44% (continued)
Health Care - 8.30% (continued)
Health Care Equipment & Supplies - 0.93% (continued)
Medtronic PLC		9,580		$	1,148,259
Zimmer Biomet Holdings, Inc.		2,132			305,132
					1,750,988
Health Care Providers & Services - 4.90%
Anthem, Inc.		8,986			3,910,078
Centene Corp.A		10,200			726,648
CVS Health Corp.		17,772			1,586,684
HCA Healthcare, Inc.		1,400			350,644
Humana, Inc.		1,000			463,160
UnitedHealth Group, Inc.		4,784			2,202,889
					9,240,103
Pharmaceuticals - 2.47%
Bristol-Myers Squibb Co.		5,500			321,200
GlaxoSmithKline PLC, ADRB		18,743			793,391
Merck & Co., Inc.		18,687			1,645,391
Perrigo Co. PLC		31,849			1,437,982
Sanofi, ADR		9,203			464,107
					4,662,071
Total Health Care					15,653,162
Industrials - 8.27%
Aerospace & Defense - 1.65%
General Dynamics Corp.		6,313			1,279,961
Raytheon Technologies Corp.		20,584			1,829,094
					3,109,055
Air Freight & Logistics - 0.62%
FedEx Corp.		5,000			1,177,650
Construction & Engineering - 0.88%
AECOMA		21,364			1,460,657
Fluor Corp.A		9,800			190,512
					1,651,169
Electrical Equipment - 0.59%
Emerson Electric Co.		5,131			497,758
Vertiv Holdings Co.		24,099			618,863
					1,116,621
Industrial Conglomerates - 1.40%
General Electric Co.		25,262			2,649,226
Machinery - 2.54%
CNH Industrial NVB		58,580			1,002,304
Cummins, Inc.		3,472			832,724
Deere & Co.		2,915			997,834
PACCAR, Inc.		6,739			603,949
Stanley Black & Decker, Inc.		7,525			1,352,468
					4,789,279
Road & Rail - 0.59%
JB Hunt Transport Services, Inc.		5,622			1,108,602
Total Industrials					15,601,602

See accompanying notes

15

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 60.44% (continued)
Information Technology - 5.94%
Communications Equipment - 0.93%
F5 Networks, Inc.A		5,700		$	1,203,555
Telefonaktiebolaget LM Ericsson, ADRB		50,020			543,717
					1,747,272
Electronic Equipment, Instruments & Components - 0.74%
Corning, Inc.		19,495			693,437
TE Connectivity Ltd.		4,758			694,668
					1,388,105
IT Services - 0.83%
Cognizant Technology Solutions Corp., Class A		19,976			1,559,926
Semiconductors & Semiconductor Equipment - 1.30%
Broadcom, Inc.		2,784			1,480,169
QUALCOMM, Inc.		5,301			705,245
Texas Instruments, Inc.		1,431			268,284
					2,453,698
Software - 1.81%
Microsoft Corp.		4,545			1,507,213
Oracle Corp.		19,958			1,914,771
					3,421,984
Technology Hardware, Storage & Peripherals - 0.33%
Hewlett Packard Enterprise Co.		43,008			630,067
Total Information Technology					11,201,052
Materials - 2.24%
Chemicals - 2.11%
Air Products and Chemicals, Inc.		2,207			661,681
Axalta Coating Systems Ltd.A		18,256			569,404
Corteva, Inc.		23,128			997,973
International Flavors & Fragrances, Inc.		11,862			1,749,052
					3,978,110
Containers & Packaging - 0.13%
International Paper Co.		4,825			239,658
Total Materials					4,217,768
Real Estate - 0.88%
Equity Real Estate Investment Trusts (REITs) - 0.88%
MGM Growth Properties LLC, Class A		41,893			1,649,746
Utilities - 1.24%
Electric Utilities - 1.24%
Exelon Corp.		12,044			640,620
PPL Corp.		49,347			1,421,194
Southern Co.		4,343			270,656
					2,332,470
Total Utilities					2,332,470
Total Common Stocks (Cost $79,884,628)					113,981,171

See accompanying notes

16

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 15.04%
Basic Materials - 0.13%
Chemicals - 0.07%
EI du Pont de Nemours and Co., 1.700%, Due 7/15/2025		$	70,000		$	70,939
LYB International Finance LLC, 2.250%, Due 10/1/2030			60,000			59,772
						130,711
Forest Products & Paper - 0.03%
International Paper Co., 6.000%, Due 11/15/2041			40,000			56,543
Iron/Steel - 0.03%
Nucor Corp., 4.000%, Due 8/1/2023			55,000			57,795
Total Basic Materials						245,049
Communications - 1.45%
Internet - 0.39%
Amazon.com, Inc.,
0.800%, Due 6/3/2025			350,000			346,587
1.200%, Due 6/3/2027			250,000			245,878
3.875%, Due 8/22/2037			120,000			140,971
						733,436
Media - 0.42%
Charter Communications Operating LLC / Charter Communications Operating Capital,
2.800%, Due 4/1/2031			50,000			49,804
3.500%, Due 3/1/2042			70,000			68,387
3.700%, Due 4/1/2051			60,000			58,852
Comcast Corp.,
3.150%, Due 3/1/2026			59,000			63,173
3.400%, Due 4/1/2030			80,000			87,268
1.950%, Due 1/15/2031			75,000			73,211
6.550%, Due 7/1/2039			217,000			325,579
2.887%, Due 11/1/2051C			64,000			62,174
						788,448
Telecommunications - 0.64%
AT&T, Inc.,
0.900%, Due 3/25/2024			110,000			110,008
3.400%, Due 5/15/2025			169,000			180,585
2.250%, Due 2/1/2032			65,000			62,707
5.350%, Due 9/1/2040			65,000			82,578
T-Mobile USA, Inc., 3.875%, Due 4/15/2030			270,000			295,366
Verizon Communications, Inc.,
2.100%, Due 3/22/2028			90,000			90,287
4.329%, Due 9/21/2028			180,000			205,558
4.500%, Due 8/10/2033			50,000			59,067
2.850%, Due 9/3/2041			65,000			63,348
3.550%, Due 3/22/2051			55,000			59,209
						1,208,713
Total Communications						2,730,597
Consumer, Cyclical - 1.36%
Airlines - 0.04%
American Airlines Pass Through Trust, 3.150%, Due 8/15/2033, Series AA			78,091			80,124

See accompanying notes

17

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 15.04% (continued)
Consumer, Cyclical - 1.36% (continued)
Auto Manufacturers - 0.39%
American Honda Finance Corp., 2.000%, Due 3/24/2028		$	55,000		$	55,564
Cummins, Inc., 0.750%, Due 9/1/2025			65,000			64,108
General Motors Financial Co., Inc.,
1.250%, Due 1/8/2026			45,000			44,125
1.500%, Due 6/10/2026			60,000			59,117
Toyota Motor Credit Corp., 1.800%, Due 2/13/2025			500,000			510,444
						733,358
Home Furnishings - 0.03%
Whirlpool Corp., 4.600%, Due 5/15/2050			50,000			62,466
Leisure Time - 0.06%
Brunswick Corp., 0.850%, Due 8/18/2024			110,000			108,961
Lodging - 0.03%
Marriott International, Inc., 2.850%, Due 4/15/2031, Series HH			55,000			55,422
Retail - 0.81%
Dollar General Corp., 4.125%, Due 5/1/2028			40,000			45,258
Home Depot, Inc.,
2.950%, Due 6/15/2029			500,000			537,177
1.375%, Due 3/15/2031			350,000			329,013
O’Reilly Automotive, Inc., 4.350%, Due 6/1/2028			80,000			91,432
Starbucks Corp., 2.550%, Due 11/15/2030			60,000			61,403
Tractor Supply Co., 1.750%, Due 11/1/2030			60,000			57,182
Walmart, Inc.,
2.375%, Due 9/24/2029			150,000			156,736
7.550%, Due 2/15/2030			169,000			243,122
						1,521,323
Total Consumer, Cyclical						2,561,654
Consumer, Non-Cyclical - 2.29%
Agriculture - 0.03%
Cargill, Inc., 1.375%, Due 7/23/2023C			50,000			50,640
Beverages - 0.04%
Keurig Dr Pepper, Inc., 0.750%, Due 3/15/2024			85,000			84,681
Biotechnology - 0.32%
Amgen, Inc.,
3.200%, Due 11/2/2027			500,000			536,500
4.400%, Due 5/1/2045			55,000			66,168
						602,668
Commercial Services - 0.11%
Moody’s Corp., 2.550%, Due 8/18/2060			50,000			45,016
Quanta Services, Inc.,
2.900%, Due 10/1/2030			100,000			103,348
3.050%, Due 10/1/2041			70,000			68,792
						217,156

See accompanying notes

18

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 15.04% (continued)
Consumer, Non-Cyclical - 2.29% (continued)
Food - 0.29%
Mondelez International, Inc., 1.500%, Due 2/4/2031		$	65,000		$	60,961
Nestle Holdings, Inc., 1.150%, Due 1/14/2027C			500,000			491,023
						551,984
Health Care - Products - 0.16%
Medtronic, Inc., 3.500%, Due 3/15/2025			219,000			236,063
Zimmer Biomet Holdings, Inc., 3.550%, Due 4/1/2025			60,000			63,862
						299,925
Health Care - Services - 0.52%
Baylor Scott & White Holdings, 2.839%, Due 11/15/2050, Series 2021			60,000			61,150
Children’s Health System of Texas, 2.511%, Due 8/15/2050			65,000			61,761
Community Health Network, Inc., 3.099%, Due 5/1/2050, Series 20-A			80,000			81,899
Health Care Service Corp., 3.200%, Due 6/1/2050C			40,000			42,112
Kaiser Foundation Hospitals, 3.002%, Due 6/1/2051, Series 2021			100,000			103,808
Sutter Health, 2.294%, Due 8/15/2030, Series 20A			95,000			95,468
UnitedHealth Group, Inc.,
0.550%, Due 5/15/2024			350,000			347,484
3.875%, Due 12/15/2028			160,000			181,134
						974,816
Pharmaceuticals - 0.82%
AbbVie, Inc.,
4.450%, Due 5/14/2046			60,000			73,156
4.250%, Due 11/21/2049			85,000			102,113
Bristol-Myers Squibb Co.,
0.750%, Due 11/13/2025			350,000			343,545
3.400%, Due 7/26/2029			650,000			715,170
2.350%, Due 11/13/2040			60,000			57,288
Cigna Corp., 4.125%, Due 11/15/2025			50,000			55,002
CVS Health Corp.,
4.300%, Due 3/25/2028			39,000			44,171
5.050%, Due 3/25/2048			30,000			39,421
Viatris, Inc., 3.850%, Due 6/22/2040			45,000			44,911
Zoetis, Inc., 3.000%, Due 9/12/2027			60,000			64,077
						1,538,854
Total Consumer, Non-Cyclical						4,320,724
Energy - 0.77%
Oil & Gas - 0.26%
Chevron USA, Inc., 2.343%, Due 8/12/2050			65,000			60,925
ConocoPhillips, 4.300%, Due 8/15/2028C			60,000			68,848
Diamondback Energy, Inc.
2.875%, Due 12/1/2024			70,000			72,840
3.125%, Due 3/24/2031			35,000			36,163
EOG Resources, Inc., 4.375%, Due 4/15/2030			40,000			46,552
Marathon Petroleum Corp.,
4.500%, Due 5/1/2023			65,000			68,283
5.125%, Due 12/15/2026			60,000			69,042
Pioneer Natural Resources Co.,
1.900%, Due 8/15/2030			45,000			42,745
2.150%, Due 1/15/2031			25,000			24,118
						489,516
Pipelines - 0.51%
Cheniere Corpus Christi Holdings LLC, 2.742%, Due 12/31/2039C			65,000			63,448
Columbia Pipeline Group, Inc., 4.500%, Due 6/1/2025			61,000			67,153
Energy Transfer LP, 4.250%, Due 4/1/2024			38,000			40,345
Enterprise Products Operating LLC, 6.125%, Due 10/15/2039			35,000			47,991

See accompanying notes

19

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 15.04% (continued)
Energy - 0.77% (continued)
Pipelines - 0.51% (continued)
MPLX LP,
1.750%, Due 3/1/2026		$	85,000		$	84,680
4.125%, Due 3/1/2027			45,000			49,630
5.200%, Due 3/1/2047			31,000			38,227
ONEOK, Inc., 4.550%, Due 7/15/2028			65,000			73,224
Phillips 66 Partners LP,
3.550%, Due 10/1/2026			33,000			35,349
3.750%, Due 3/1/2028			40,000			43,712
Sabine Pass Liquefaction LLC,
5.875%, Due 6/30/2026			150,000			174,116
4.200%, Due 3/15/2028			50,000			55,461
Williams Cos., Inc.,
2.600%, Due 3/15/2031			120,000			120,307
5.400%, Due 3/4/2044			60,000			75,566
						969,209
Total Energy						1,458,725
Financial - 4.39%
Banks - 3.13%
Bank of America Corp.,
4.125%, Due 1/22/2024			193,000			206,796
1.734%, Due 7/22/2027, (SOFR + 0.960%)D			350,000			347,799
2.087%, Due 6/14/2029, (SOFR + 1.060%)D			50,000			49,463
2.299%, Due 7/21/2032, (SOFR + 1.220%)D			160,000			156,624
6.110%, Due 1/29/2037			176,000			237,798
5.000%, Due 1/21/2044			145,000			190,156
Citigroup, Inc.,
1.281%, Due 11/3/2025, (SOFR + 0.528%)D			40,000			40,041
3.400%, Due 5/1/2026			350,000			376,708
4.412%, Due 3/31/2031, (SOFR + 3.914%)D			245,000			280,900
5.875%, Due 1/30/2042			145,000			206,818
Fifth Third Bank NA, 2.250%, Due 2/1/2027			500,000			514,401
Goldman Sachs Group, Inc.,
5.750%, Due 1/24/2022			385,000			389,752
1.431%, Due 3/9/2027, (SOFR + 0.798%)D			125,000			123,095
1.542%, Due 9/10/2027, (SOFR + 0.818%)D			100,000			98,342
2.615%, Due 4/22/2032, (SOFR + 1.281%)D			55,000			55,258
JPMorgan Chase & Co.,
3.625%, Due 5/13/2024			434,000			463,683
2.301%, Due 10/15/2025, (SOFR + 1.160%)D			180,000			185,270
3.782%, Due 2/1/2028, (3-mo. USD LIBOR + 1.337%)D			105,000			114,462
3.882%, Due 7/24/2038, (3-mo. USD LIBOR + 1.360%)D			90,000			102,790
5.500%, Due 10/15/2040			313,000			425,088
Morgan Stanley,
3.591%, Due 7/22/2028, (3-mo. USD LIBOR + 1.340%)D			90,000			97,325
1.794%, Due 2/13/2032, (SOFR + 1.034%)D			115,000			108,396
0.864%, Due 10/21/2025, Series I, (SOFR + 0.745%)D			35,000			34,634
PNC Financial Services Group, Inc.,
3.500%, Due 1/23/2024			80,000			84,451
2.550%, Due 1/22/2030			500,000			516,614
3.400%, Due 9/15/2026, Series T, (5-Yr. CMT + 2.595%)D			80,000			78,900
State Street Corp.,
2.354%, Due 11/1/2025, (SOFR + 0.940%)D			65,000			67,468
2.200%, Due 3/3/2031			55,000			54,647
Truist Financial Corp., 1.267%, Due 3/2/2027, (SOFR + 0.609%)D			55,000			54,211
Wells Fargo & Co.,
2.572%, Due 2/11/2031, (SOFR + 1.262%)D			160,000			161,915
4.750%, Due 12/7/2046			60,000			75,968
						5,899,773
Diversified Financial Services - 0.17%
American Express Co., 4.200%, Due 11/6/2025			60,000			66,685
CBOE Global Markets, Inc., 3.650%, Due 1/12/2027			60,000			65,753
Charles Schwab Corp.,
0.750%, Due 3/18/2024			45,000			44,930
3.250%, Due 5/22/2029			65,000			70,673
Visa, Inc., 3.150%, Due 12/14/2025			60,000			64,477
						312,518

See accompanying notes

20

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 15.04% (continued)
Financial - 4.39% (continued)
Insurance - 0.56%
Chubb INA Holdings, Inc., 3.350%, Due 5/3/2026		$	65,000		$	70,289
CNA Financial Corp., 2.050%, Due 8/15/2030			55,000			53,699
Fidelity National Financial, Inc., 3.200%, Due 9/17/2051			65,000			63,214
MetLife, Inc.,
6.375%, Due 6/15/2034			169,000			238,062
4.721%, Due 12/15/2044			193,000			247,180
Prudential Financial, Inc., 4.600%, Due 5/15/2044			313,000			394,303
						1,066,747
REITS - 0.53%
Alexandria Real Estate Equities, Inc., 1.875%, Due 2/1/2033			65,000			61,011
American Tower Corp., 2.300%, Due 9/15/2031			90,000			88,011
Camden Property Trust, 3.150%, Due 7/1/2029			60,000			64,532
Crown Castle International Corp.,
3.800%, Due 2/15/2028			60,000			65,817
2.900%, Due 4/1/2041			55,000			53,029
Digital Realty Trust LP, 3.700%, Due 8/15/2027			55,000			60,252
ERP Operating LP, 1.850%, Due 8/1/2031			75,000			72,479
Healthpeak Properties, Inc., 3.250%, Due 7/15/2026			35,000			37,449
National Retail Properties, Inc., 3.500%, Due 4/15/2051			45,000			47,905
Omega Healthcare Investors, Inc., 3.250%, Due 4/15/2033			80,000			78,933
Prologis LP, 1.250%, Due 10/15/2030			50,000			46,624
Simon Property Group LP, 3.375%, Due 10/1/2024			313,000			332,545
						1,008,587
Total Financial						8,287,625
Industrial - 1.54%
Aerospace/Defense - 0.33%
Boeing Co., 2.750%, Due 2/1/2026			75,000			77,594
General Dynamics Corp., 3.500%, Due 5/15/2025			75,000			80,662
Northrop Grumman Corp., 3.850%, Due 4/15/2045			55,000			63,834
Raytheon Technologies Corp., 6.125%, Due 7/15/2038			282,000			398,732
						620,822
Building Materials - 0.11%
Carrier Global Corp., 2.242%, Due 2/15/2025			50,000			51,336
Martin Marietta Materials, Inc., 0.650%, Due 7/15/2023			55,000			54,992
Vulcan Materials Co., 3.500%, Due 6/1/2030			95,000			103,686
						210,014
Environmental Control - 0.03%
Waste Connections, Inc., 2.200%, Due 1/15/2032			65,000			63,847
Machinery - Construction & Mining - 0.23%
Caterpillar Financial Services Corp., 1.150%, Due 9/14/2026			440,000			434,293
Machinery - Diversified - 0.28%
John Deere Capital Corp., 2.450%, Due 1/9/2030			500,000			518,753
Metal Fabricate/Hardware - 0.03%
Precision Castparts Corp., 3.250%, Due 6/15/2025			60,000			64,247
Miscellaneous Manufacturing - 0.11%
Carlisle Cos., Inc., 2.200%, Due 3/1/2032			65,000			62,783
General Electric Co.,
3.450%, Due 5/15/2024			65,000			68,631
3.450%, Due 5/1/2027			65,000			70,892
						202,306
Packaging & Containers - 0.09%
Amcor Flexibles North America, Inc., 2.690%, Due 5/25/2031			55,000			55,874
Berry Global, Inc., 1.650%, Due 1/15/2027			110,000			107,600
						163,474

See accompanying notes

21

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 15.04% (continued)
Industrial - 1.54% (continued)
Transportation - 0.33%
Burlington Northern Santa Fe LLC, 5.750%, Due 5/1/2040		$	202,000		$	283,065
CSX Corp., 5.500%, Due 4/15/2041			157,000			212,172
FedEx Corp., 3.250%, Due 5/15/2041			55,000			55,877
Union Pacific Corp., 4.100%, Due 9/15/2067			55,000			67,571
						618,685
Total Industrial						2,896,441
Technology - 1.91%
Computers - 1.14%
Apple, Inc.,
1.400%, Due 8/5/2028			200,000			195,071
2.200%, Due 9/11/2029			300,000			306,937
Dell International LLC / EMC Corp., 5.300%, Due 10/1/2029			160,000			192,543
Hewlett Packard Enterprise Co., 6.350%, Due 10/15/2045			500,000			685,286
HP, Inc., 4.050%, Due 9/15/2022			145,000			149,034
International Business Machines Corp., 4.250%, Due 5/15/2049			500,000			613,634
						2,142,505
Semiconductors - 0.63%
Intel Corp., 1.600%, Due 8/12/2028			500,000			492,670
Lam Research Corp.,
3.750%, Due 3/15/2026			35,000			38,435
1.900%, Due 6/15/2030			75,000			74,273
Microchip Technology, Inc., 0.983%, Due 9/1/2024C			40,000			39,585
NVIDIA Corp., 1.550%, Due 6/15/2028			500,000			493,922
QUALCOMM, Inc., 1.650%, Due 5/20/2032			59,000			55,834
						1,194,719
Software - 0.14%
Fiserv, Inc., 3.500%, Due 7/1/2029			75,000			80,989
Oracle Corp., 4.300%, Due 7/8/2034			92,000			104,143
VMware, Inc., 2.200%, Due 8/15/2031			80,000			77,899
						263,031
Total Technology						3,600,255
Utilities - 1.20%
Electric - 1.07%
Appalachian Power Co., 4.500%, Due 3/1/2049, Series Y			25,000			31,013
Berkshire Hathaway Energy Co., 6.125%, Due 4/1/2036			277,000			381,071
Consolidated Edison Co. of New York, Inc., 5.500%, Due 12/1/2039, Series 09-C			169,000			222,817
Consumers Energy Co., 2.500%, Due 5/1/2060			80,000			73,238
Dominion Energy, Inc., 3.375%, Due 4/1/2030, Series C			55,000			59,184
DTE Energy Co., 1.050%, Due 6/1/2025, Series F			115,000			113,576
Duke Energy Corp., 3.750%, Due 4/15/2024			45,000			47,681
Duke Energy Progress LLC, 4.150%, Due 12/1/2044			100,000			118,671
Entergy Arkansas LLC, 3.350%, Due 6/15/2052			55,000			59,443
Entergy Corp., 2.800%, Due 6/15/2030			45,000			46,101
Entergy Louisiana LLC, 4.000%, Due 3/15/2033			47,000			53,955
Exelon Corp., 4.050%, Due 4/15/2030			60,000			67,576
Florida Power & Light Co., 3.950%, Due 3/1/2048			50,000			61,249
Kentucky Utilities Co., 3.300%, Due 6/1/2050			60,000			64,685
National Rural Utilities Cooperative Finance Corp.,
4.300%, Due 3/15/2049			40,000			50,223
1.000%, Due 10/18/2024, Series D			65,000			64,851
Northern States Power Co., 2.600%, Due 6/1/2051			70,000			68,140
Ohio Power Co., 2.600%, Due 4/1/2030, Series P			60,000			61,987

See accompanying notes

22

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 15.04% (continued)
Utilities - 1.20% (continued)
Electric - 1.07% (continued)
Oklahoma Gas and Electric Co., 0.553%, Due 5/26/2023		$	85,000		$	84,744
Southwestern Electric Power Co., 3.550%, Due 2/15/2022			289,000			289,669
						2,019,874
Gas - 0.13%
National Fuel Gas Co., 3.950%, Due 9/15/2027			80,000			85,466
NiSource, Inc.,
3.490%, Due 5/15/2027			45,000			48,674
3.950%, Due 3/30/2048			55,000			63,247
Southern California Gas Co., 2.550%, Due 2/1/2030			40,000			41,065
						238,452
Total Utilities						2,258,326
Total Corporate Obligations (Cost $26,602,074)						28,359,396
FOREIGN CORPORATE OBLIGATIONS - 2.55%
Basic Materials - 0.10%
Chemicals - 0.03%
Nutrien Ltd., 4.000%, Due 12/15/2026			44,000			48,712
Mining - 0.07%
Glencore Funding LLC, 2.625%, Due 9/23/2031C			60,000			58,481
Teck Resources Ltd., 6.000%, Due 8/15/2040			65,000			84,073
						142,554
Total Basic Materials						191,266
Communications - 0.61%
Internet - 0.18%
Alibaba Group Holding Ltd., 3.600%, Due 11/28/2024			313,000			332,912
Media - 0.19%
Thomson Reuters Corp.,
4.300%, Due 11/23/2023			145,000			154,248
3.850%, Due 9/29/2024			193,000			206,450
						360,698
Telecommunications - 0.24%
America Movil SAB de CV, 6.375%, Due 3/1/2035			169,000			234,241
Bell Canada, Inc., 4.464%, Due 4/1/2048			25,000			31,121
Deutsche Telekom International Finance BV, 4.875%, Due 3/6/2042C			150,000			186,640
						452,002
Total Communications						1,145,612
Consumer, Non-Cyclical - 0.53%
Agriculture - 0.09%
BAT Capital Corp., 2.259%, Due 3/25/2028			105,000			103,128
Reynolds American, Inc., 5.700%, Due 8/15/2035			65,000			77,126
						180,254
Beverages - 0.44%
Anheuser-Busch Cos. LLC / Anheuser-Busch InBev Worldwide, Inc., 4.900%, Due 2/1/2046			35,000			44,486
Anheuser-Busch InBev Worldwide, Inc.,
5.450%, Due 1/23/2039			500,000			656,061
5.550%, Due 1/23/2049			35,000			49,042

See accompanying notes

23

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
FOREIGN CORPORATE OBLIGATIONS - 2.55% (continued)
Consumer, Non-Cyclical - 0.53% (continued)
Beverages - 0.44% (continued)
Coca-Cola Femsa SAB de CV, 2.750%, Due 1/22/2030		$	70,000		$	72,450
						822,039
Total Consumer, Non-Cyclical						1,002,293
Energy - 0.53%
Oil & Gas - 0.35%
Saudi Arabian Oil Co., 4.375%, Due 4/16/2049C			500,000			573,950
TotalEnergies Capital International SA, 3.127%, Due 5/29/2050			70,000			73,369
						647,319
Pipelines - 0.18%
TransCanada PipeLines Ltd.,
3.750%, Due 10/16/2023			145,000			152,226
1.000%, Due 10/12/2024			80,000			79,671
6.100%, Due 6/1/2040			82,000			112,135
						344,032
Total Energy						991,351
Financial - 0.60%
Banks - 0.52%
Bank of Montreal, 3.300%, Due 2/5/2024, Series E			75,000			79,099
Mitsubishi UFJ Financial Group, Inc., 2.193%, Due 2/25/2025			75,000			77,020
Royal Bank of Canada,
2.250%, Due 11/1/2024			115,000			119,213
1.200%, Due 4/27/2026			500,000			492,866
Toronto-Dominion Bank, 3.250%, Due 3/11/2024			160,000			168,744
Westpac Banking Corp., 1.150%, Due 6/3/2026			50,000			49,395
						986,337
Financial Services - 0.08%
AerCap Ireland Capital DAC / AerCap Global Aviation Trust, 3.000%, Due 10/29/2028			150,000			152,264
Total Financial						1,138,601
Industrial - 0.18%
Aerospace/Defense - 0.18%
BAE Systems Holdings, Inc., 3.800%, Due 10/7/2024C			313,000			335,396
Total Foreign Corporate Obligations (Cost $4,321,850)						4,804,519
FOREIGN SOVEREIGN OBLIGATIONS - 0.04% (Cost $70,062)
Mexico Government International Bond, 4.600%, Due 1/23/2046			65,000			69,375
ASSET-BACKED OBLIGATIONS - 0.96%
AmeriCredit Automobile Receivables Trust,
0.370%, Due 8/18/2025, 2021-1 A3			85,000			84,823
0.340%, Due 12/18/2026, 2021-2 A3			70,000			69,594
Capital One Multi-Asset Execution Trust, 0.550%, Due 7/15/2026, 2021-A1 A1			115,000			113,911
CNH Equipment Trust,
1.160%, Due 6/16/2025, 2020-A A3			105,000			105,656
0.400%, Due 12/15/2025, 2021-A A3			95,000			94,321
GM Financial Consumer Automobile Receivables Trust,
1.840%, Due 9/16/2024, 2020-1 A3			97,455			98,348
1.490%, Due 12/16/2024, 2020-2 A3			42,880			43,200
GM Financial Revolving Receivables Trust, 1.170%, Due 6/12/2034, 2021-1 AC			90,000			88,930
Mercedes-Benz Auto Lease Trust, 0.400%, Due 11/15/2024, 2021-B A3			150,000			149,180
New Economy Assets Phase 1 Sponsor LLC, 1.910%, Due 10/20/2061, 2021 1 A1C			125,000			124,419

See accompanying notes

24

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
ASSET-BACKED OBLIGATIONS - 0.96% (continued)
PSNH Funding LLC, 3.094%, Due 2/1/2026, 2018-1 A1		$	53,537		$	55,138
Taco Bell Funding LLC, 2.294%, Due 8/25/2051, 2021-1A A2IIC			100,000			99,751
Toyota Auto Loan Extended Note Trust, 1.350%, Due 5/25/2033, 2020-1A AC			135,000			135,462
Toyota Auto Receivables Owner Trust, 1.360%, Due 8/15/2024, 2020-B A3			145,000			146,061
Verizon Master Trust, 0.500%, Due 5/20/2027, 2021-1 A			200,000			197,942
Verizon Owner Trust, 1.850%, Due 7/22/2024, 2020-A A1A			210,000			212,271
Total Asset-Backed Obligations (Cost $1,817,020)						1,819,007
COMMERCIAL MORTGAGE-BACKED OBLIGATIONS - 0.17%
BX Commercial Mortgage Trust, 0.790%, Due 9/15/2036, 2021-VOLT A, (1-mo. USD LIBOR + 0.700%)C D			140,000			140,043
Cold Storage Trust, 0.990%, Due 11/15/2037, 2020-ICE5 A, (1-mo. USD LIBOR + 0.900%)C D			113,044			113,010
JPMBB Commercial Mortgage Securities Trust, 3.157%, Due 7/15/2045, 2013-C12 ASB			58,861			59,324
Total Commercial Mortgage-Backed Obligations (Cost $312,803)						312,377
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 6.30%
Federal Home Loan Mortgage Corp.,
3.500%, Due 9/1/2028			21,057			22,574
3.000%, Due 11/1/2032			71,218			75,742
5.000%, Due 8/1/2033			23,714			27,036
5.500%, Due 2/1/2034			23,139			26,770
2.500%, Due 6/1/2035			94,819			98,640
1.500%, Due 3/1/2036			149,128			150,093
2.000%, Due 3/1/2036			263,621			270,682
2.000%, Due 10/1/2040			95,408			95,445
2.000%, Due 1/1/2041			220,663			224,845
4.000%, Due 1/1/2041			66,020			72,738
4.500%, Due 2/1/2041			45,541			50,744
2.500%, Due 9/1/2041			341,022			352,445
2.500%, Due 11/1/2041			345,000			357,706
3.500%, Due 6/1/2042			200,057			216,329
3.000%, Due 4/1/2047			204,821			218,380
3.500%, Due 1/1/2048			212,930			228,122
4.000%, Due 4/1/2048			101,738			109,783
3.000%, Due 8/1/2048			148,504			157,112
3.000%, Due 11/1/2049			310,232			325,378
						3,080,564
Federal National Mortgage Association,
3.500%, Due 1/1/2028			18,228			19,429
5.000%, Due 3/1/2034			25,983			29,054
4.500%, Due 4/1/2034			47,299			51,900
3.000%, Due 10/1/2034			6,545			6,917
2.000%, Due 11/1/2035			204,035			210,488
2.000%, Due 12/1/2035			79,929			82,416
2.000%, Due 1/1/2036			144,700			148,576
2.000%, Due 5/1/2036			70,583			72,474
2.000%, Due 6/1/2036			100,580			103,274
3.500%, Due 6/1/2037			121,530			130,952
5.500%, Due 6/1/2038			5,246			6,129
4.500%, Due 1/1/2040			47,487			52,877
5.000%, Due 5/1/2040			81,422			93,010
5.000%, Due 6/1/2040			61,041			69,627
4.000%, Due 9/1/2040			39,774			43,749
4.000%, Due 1/1/2041			89,164			98,231
2.500%, Due 11/1/2041			140,000			144,434
3.000%, Due 6/1/2043			376,360			402,176
3.500%, Due 7/1/2043			78,635			84,919
3.000%, Due 8/1/2043			343,759			365,755
4.000%, Due 11/1/2044			54,554			60,140
4.000%, Due 7/1/2045			240,190			264,808
3.500%, Due 8/1/2045			44,890			48,154
3.500%, Due 11/1/2045			399,920			428,865
3.500%, Due 5/1/2046			52,605			56,247
4.000%, Due 7/1/2046			85,091			93,553

See accompanying notes

25

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 6.30% (continued)
Federal National Mortgage Association, (continued)
3.000%, Due 10/1/2046		$	30,357		$	32,084
3.000%, Due 11/1/2046			177,523			188,231
3.000%, Due 12/1/2046			112,724			119,417
3.500%, Due 3/1/2047			43,016			46,153
4.500%, Due 7/1/2047			30,541			33,240
4.500%, Due 8/1/2047			44,195			48,168
3.500%, Due 9/1/2047			51,289			54,653
4.000%, Due 3/1/2048			70,438			75,598
4.500%, Due 4/1/2048			23,410			25,231
4.500%, Due 7/1/2048			128,365			139,378
4.000%, Due 10/1/2049			100,475			107,539
4.500%, Due 10/1/2049			170,723			184,717
4.000%, Due 11/1/2049			236,412			255,601
2.500%, Due 8/1/2050			430,999			443,619
3.000%, Due 8/1/2050			123,210			129,680
2.500%, Due 9/1/2050			141,584			145,913
2.500%, Due 10/1/2050			73,571			75,658
3.000%, Due 10/1/2050			301,359			318,009
2.000%, Due 3/1/2051			505,769			508,839
2.000%, Due 4/1/2051			290,065			292,414
3.000%, Due 5/1/2051			146,425			155,186
3.000%, Due 6/1/2051			168,492			178,001
3.500%, Due 6/1/2051			363,077			387,517
						7,113,000
Government National Mortgage Association,
6.500%, Due 8/15/2027			16,821			18,800
6.500%, Due 11/15/2027			20,432			22,836
7.500%, Due 12/15/2028			18,524			20,865
5.500%, Due 7/15/2033			24,384			28,418
6.000%, Due 12/15/2033			34,256			40,494
5.500%, Due 2/20/2034			33,673			39,545
5.000%, Due 10/15/2039			58,472			68,278
3.500%, Due 9/15/2041			117,848			126,516
3.500%, Due 8/20/2047			24,630			25,987
3.500%, Due 10/20/2047			23,030			24,413
4.000%, Due 1/20/2048			119,991			128,700
5.000%, Due 1/20/2050			64,474			69,618
4.500%, Due 2/20/2050			59,776			63,875
5.000%, Due 2/20/2050			32,327			35,177
4.000%, Due 5/20/2051			195,361			207,967
2.500%, Due 6/20/2051			191,104			196,544
3.000%, Due 6/20/2051			92,138			95,882
2.500%, Due 7/20/2051			291,118			299,424
3.000%, Due 8/20/2051			169,436			177,930
						1,691,269
Total U.S. Agency Mortgage-Backed Obligations (Cost $11,625,755)						11,884,833
U.S. TREASURY OBLIGATIONS - 12.11%
U.S. Treasury Notes/Bonds,
2.000%, Due 2/15/2022			664,000			667,678
1.750%, Due 9/30/2022			500,000			507,344
1.625%, Due 11/15/2022			964,000			978,611
2.000%, Due 2/15/2023			500,000			511,074
2.750%, Due 7/31/2023			500,000			520,098
2.500%, Due 8/15/2023			964,000			999,171
2.125%, Due 7/31/2024			250,000			259,668
1.250%, Due 8/31/2024			560,000			568,159
1.750%, Due 12/31/2024			700,000			720,590

See accompanying notes

26

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
U.S. TREASURY OBLIGATIONS - 12.11% (continued)
U.S. Treasury Notes/Bonds, (continued)
1.125%, Due 2/28/2025		$	2,295,000		$	2,314,274
2.875%, Due 7/31/2025			500,000			535,117
6.875%, Due 8/15/2025			279,000			340,620
0.625%, Due 7/31/2026			500,000			487,461
1.625%, Due 10/31/2026			500,000			510,801
2.000%, Due 11/15/2026			500,000			519,668
1.750%, Due 12/31/2026			650,000			667,723
1.500%, Due 1/31/2027			2,205,000			2,236,438
2.875%, Due 5/15/2028			200,000			218,398
2.875%, Due 8/15/2028			100,000			109,402
5.250%, Due 11/15/2028			217,000			272,581
2.625%, Due 2/15/2029			450,000			486,352
2.375%, Due 5/15/2029			450,000			479,057
1.625%, Due 8/15/2029			350,000			354,197
1.750%, Due 11/15/2029			1,700,000			1,737,520
1.500%, Due 2/15/2030			2,565,000			2,568,908
4.750%, Due 2/15/2037			304,000			431,419
4.500%, Due 8/15/2039			241,000			338,812
2.250%, Due 5/15/2041			465,000			484,472
2.750%, Due 8/15/2042			250,000			282,187
2.875%, Due 5/15/2049			500,000			599,648
1.375%, Due 8/15/2050			1,295,000			1,127,561
						22,835,009
Total U.S. Treasury Obligations (Cost $22,452,168)						22,835,009
	Shares
SHORT-TERM INVESTMENTS - 2.15% (Cost $4,053,731)
Investment Companies - 2.15%
American Beacon U.S. Government Money Market Select Fund, 0.01%E F			4,053,731			4,053,731
SECURITIES LENDING COLLATERAL - 0.30% (Cost $572,921)
Investment Companies - 0.30%
American Beacon U.S. Government Money Market Select Fund, 0.01%E F			572,921			572,921
TOTAL INVESTMENTS - 100.06% (Cost $151,713,012)						188,692,339
LIABILITIES, NET OF OTHER ASSETS - (0.06%)						(113,900	)
TOTAL NET ASSETS - 100.00%					$	188,578,439
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2021 (Note 9).

^C Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $2,673,912 or 1.42% of net assets. The Fund has no right to demand registration of these securities.

^D Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, SOFR, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on October 31, 2021.

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

^F 7-day yield.

ADR - American Depositary Receipt.

CMT - Constant Maturity Treasury.

DAC - Designated Activity Company.

LIBOR - London Interbank Offered Rate.

LLC - Limited Liability Company.

LP - Limited Partnership.

PLC - Public Limited Company.

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

SOFR - Secured Overnight Financing Rate.

See accompanying notes

27

American Beacon Balanced Fund^SM

Schedule of Investments

October 31, 2021

Long Futures Contracts Open on October 31, 2021:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
S&P 500 E-Mini Index	15	December 2021	$	3,275,126	$	3,447,750	$	172,624
			$	3,275,126	$	3,447,750	$	172,624

Index Abbreviations:
S&P 500	S&P 500 Index - U.S. Equity Large-Cap Index.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2021, the investments were classified as described below:

Balanced Fund	Level 1		Level 2		Level 3		Total
Assets
Common Stocks	$	113,981,171	$	-	$	-	$	113,981,171
Corporate Obligations		-		28,359,396		-		28,359,396
Foreign Corporate Obligations		-		4,804,519		-		4,804,519
Foreign Sovereign Obligations		-		69,375		-		69,375
Asset-Backed Obligations		-		1,819,007		-		1,819,007
Commercial Mortgage-Backed Obligations		-		312,377		-		312,377
U.S. Agency Mortgage-Backed Obligations		-		11,884,833		-		11,884,833
U.S. Treasury Obligations		-		22,835,009		-		22,835,009
Short-Term Investments		4,053,731		-		-		4,053,731
Securities Lending Collateral		572,921		-		-		572,921
Total Investments in Securities - Assets	$	118,607,823	$	70,084,516	$	-	$	188,692,339
Financial Derivative Instruments - Assets
Futures Contracts	$	172,624	$	-	$	-	$	172,624
Total Financial Derivative Instruments - Assets	$	172,624	$	-	$	-	$	172,624

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2021, there were no transfers into or out of Level 3.

See accompanying notes

28

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 98.01%
Communication Services - 1.68%
Entertainment - 0.58%
Cinemark Holdings, Inc.A B		62,664		$	1,178,083
Media - 1.10%
Altice USA, Inc., Class AB		62,705			1,022,092
Liberty Broadband Corp., Class CB		7,493			1,217,238
					2,239,330
Total Communication Services					3,417,413
Consumer Discretionary - 15.82%
Auto Components - 2.09%
Dana, Inc.		85,431			1,895,714
Lear Corp.		13,769			2,366,203
					4,261,917
Automobiles - 0.55%
Ford Motor Co.B		65,519			1,119,064
Diversified Consumer Services - 0.68%
Adtalem Global Education, Inc.B		37,222			1,374,608
Hotels, Restaurants & Leisure - 4.89%
Aramark		29,937			1,092,102
Marriott Vacations Worldwide Corp.		13,802			2,169,950
MGM Resorts International		24,888			1,173,718
SeaWorld Entertainment, Inc.B		34,781			2,208,594
Travel + Leisure Co.		33,436			1,816,912
Wyndham Hotels & Resorts, Inc.		17,855			1,508,212
					9,969,488
Household Durables - 1.96%
Lennar Corp., Class A		6,833			682,822
Mohawk Industries, Inc.B		6,828			1,209,990
Newell Brands, Inc.		92,077			2,107,642
					4,000,454
Internet & Direct Marketing Retail - 0.79%
Qurate Retail, Inc., Series A		154,120			1,609,013
Specialty Retail - 1.99%
Advance Auto Parts, Inc.		7,687			1,733,572
CarMax, Inc.B		10,010			1,370,569
Gap, Inc.		22,830			518,013
Lithia Motors, Inc.		1,345			429,351
					4,051,505
Textiles, Apparel & Luxury Goods - 2.87%
Gildan Activewear, Inc.		37,678			1,383,536
PVH Corp.B		15,196			1,661,379
Ralph Lauren Corp.		12,133			1,542,953
Skechers USA, Inc., Class AB		27,237			1,258,622
					5,846,490
Total Consumer Discretionary					32,232,539

See accompanying notes

29

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 98.01% (continued)
Consumer Staples - 1.68%
Beverages - 0.71%
Coca-Cola Europacific Partners PLC		27,283		$	1,436,450
Food & Staples Retailing - 0.97%
US Foods Holding Corp.B		56,978			1,975,427
Total Consumer Staples					3,411,877
Energy - 7.37%
Energy Equipment & Services - 3.04%
Baker Hughes Co.		81,387			2,041,186
Halliburton Co.		91,922			2,297,131
NOV, Inc.B		91,557			1,283,629
TechnipFMC PLCB		76,588			564,453
					6,186,399
Oil, Gas & Consumable Fuels - 4.33%
APA Corp.		58,198			1,525,370
Cenovus Energy, Inc.		58,667			702,831
Cheniere Energy, Inc.B		10,220			1,056,748
EQT Corp.B		31,347			624,119
Hess Corp.		28,208			2,329,134
Pioneer Natural Resources Co.		13,889			2,596,965
					8,835,167
Total Energy					15,021,566
Financials - 25.88%
Banks - 4.69%
Fifth Third Bancorp		52,657			2,292,159
KeyCorp		96,907			2,255,026
Pinnacle Financial Partners, Inc.		7,079			683,619
Regions Financial Corp.		99,159			2,348,085
Signature Bank		6,644			1,978,716
					9,557,605
Capital Markets - 3.22%
Evercore, Inc., Class A		4,693			712,585
Invesco Ltd.		54,411			1,382,584
Jefferies Financial Group, Inc.		56,961			2,449,323
Northern Trust Corp.		16,371			2,014,288
					6,558,780
Consumer Finance - 5.23%
Ally Financial, Inc.		55,696			2,658,927
Discover Financial Services		16,301			1,847,229
OneMain Holdings, Inc.		30,539			1,612,765
PROG Holdings, Inc.		75,984			3,073,553
SLM Corp.		80,040			1,468,734
					10,661,208
Diversified Financial Services - 2.40%
Equitable Holdings, Inc.		82,290			2,756,715
Voya Financial, Inc.		30,668			2,139,706
					4,896,421

See accompanying notes

30

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 98.01% (continued)
Financials - 25.88% (continued)
Insurance - 10.34%
American Financial Group, Inc.		6,771		$	921,127
American International Group, Inc.		53,650			3,170,178
Arch Capital Group Ltd.B		33,721			1,410,212
Assurant, Inc.		8,433			1,360,327
Axis Capital Holdings Ltd.		98,230			5,114,836
CNO Financial Group, Inc.		85,013			2,052,214
Fidelity National Financial, Inc.		52,471			2,513,886
Markel Corp.B		804			1,055,757
Reinsurance Group of America, Inc.		14,746			1,741,208
Willis Towers Watson PLC		7,098			1,719,703
					21,059,448
Total Financials					52,733,462
Health Care - 6.95%
Health Care Equipment & Supplies - 2.68%
Envista Holdings Corp.B		23,509			919,202
Hologic, Inc.B		18,856			1,382,333
LivaNova PLCB		17,952			1,377,277
Zimmer Biomet Holdings, Inc.		12,515			1,791,147
					5,469,959
Health Care Providers & Services - 3.44%
Cardinal Health, Inc.		16,729			799,814
Encompass Health Corp.		20,812			1,322,811
Fresenius Medical Care AG & Co. KGaA, ADR		36,600			1,216,218
McKesson Corp.		8,159			1,696,093
Universal Health Services, Inc., Class B		15,964			1,981,132
					7,016,068
Pharmaceuticals - 0.83%
Perrigo Co. PLC		37,286			1,683,463
Total Health Care					14,169,490
Industrials - 16.86%
Aerospace & Defense - 2.26%
BWX Technologies, Inc.		35,876			2,035,604
L3Harris Technologies, Inc.		7,280			1,678,331
TransDigm Group, Inc.B		1,447			902,668
					4,616,603
Airlines - 0.24%
Alaska Air Group, Inc.B		9,105			480,744
Building Products - 2.33%
Carlisle Cos., Inc.		8,372			1,866,286
JELD-WEN Holding, Inc.B		79,999			2,192,773
Owens Corning		7,455			696,371
					4,755,430
Commercial Services & Supplies - 0.98%
Republic Services, Inc.		14,824			1,995,310

See accompanying notes

31

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 98.01% (continued)
Industrials - 16.86% (continued)
Construction & Engineering - 1.45%
AECOMB		26,530		$	1,813,856
MasTec, Inc.A B		12,780			1,139,082
					2,952,938
Electrical Equipment - 1.83%
Mirion Technologies, Inc.A B		165,377			1,751,342
Vertiv Holdings Co.		76,717			1,970,093
					3,721,435
Machinery - 4.46%
Dover Corp.		12,109			2,047,390
Fortive Corp.		13,650			1,033,442
Stanley Black & Decker, Inc.		9,610			1,727,205
Terex Corp.		41,810			1,873,088
Westinghouse Air Brake Technologies Corp.		26,467			2,401,351
					9,082,476
Professional Services - 0.68%
Alight, Inc., Class AB		63,166			687,246
Jacobs Engineering Group, Inc.		5,034			706,874
					1,394,120
Road & Rail - 1.20%
JB Hunt Transport Services, Inc.		9,130			1,800,345
Ryder System, Inc.		7,548			641,202
					2,441,547
Trading Companies & Distributors - 1.43%
AerCap Holdings NVB		49,411			2,917,226
Total Industrials					34,357,829
Information Technology - 3.55%
Electronic Equipment, Instruments & Components - 1.12%
Avnet, Inc.		59,920			2,283,551
IT Services - 0.81%
Cognizant Technology Solutions Corp., Class A		21,092			1,647,074
Semiconductors & Semiconductor Equipment - 0.80%
Microchip Technology, Inc.		22,018			1,631,314
Software - 0.18%
SS&C Technologies Holdings, Inc.		4,526			359,681
Technology Hardware, Storage & Peripherals - 0.64%
Hewlett Packard Enterprise Co.		89,655			1,313,446
Total Information Technology					7,235,066
Materials - 8.03%
Chemicals - 6.51%
Axalta Coating Systems Ltd.B		68,889			2,148,648
Corteva, Inc.		23,995			1,035,384
Dow, Inc.		29,456			1,648,652

See accompanying notes

32

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 98.01% (continued)
Materials - 8.03% (continued)
Chemicals - 6.51% (continued)
Eastman Chemical Co.		10,194		$	1,060,482
Element Solutions, Inc.		135,261			3,071,777
International Flavors & Fragrances, Inc.		13,811			2,036,432
Olin Corp.		39,880			2,272,363
					13,273,738
Containers & Packaging - 0.92%
Sealed Air Corp.		31,461			1,866,267
Metals & Mining - 0.60%
Arconic Corp.B		41,667			1,225,843
Total Materials					16,365,848
Real Estate - 4.45%
Equity Real Estate Investment Trusts (REITs) - 4.05%
American Campus Communities, Inc.		19,724			1,059,573
AvalonBay Communities, Inc.		4,332			1,025,298
Lamar Advertising Co., Class A		10,141			1,147,961
MGM Growth Properties LLC, Class A		75,512			2,973,663
STAG Industrial, Inc.		23,899			1,040,324
VICI Properties, Inc.A		34,627			1,016,302
					8,263,121
Real Estate Management & Development - 0.40%
Howard Hughes Corp.B		9,290			809,437
Total Real Estate					9,072,558
Utilities - 5.74%
Electric Utilities - 4.25%
Edison International		39,645			2,494,860
Entergy Corp.		19,539			2,012,908
Evergy, Inc.		27,903			1,778,816
NRG Energy, Inc.		59,414			2,370,025
					8,656,609
Gas Utilities - 0.55%
UGI Corp.		25,932			1,125,708
Multi-Utilities - 0.94%
CenterPoint Energy, Inc.		73,608			1,916,752
Total Utilities					11,699,069
Total Common Stocks (Cost $137,941,340)					199,716,717
SHORT-TERM INVESTMENTS - 2.61% (Cost $5,317,283)
Investment Companies - 2.61%
American Beacon U.S. Government Money Market Select Fund, 0.01%C D		5,317,283			5,317,283
SECURITIES LENDING COLLATERAL - 0.33% (Cost $671,946)
Investment Companies - 0.33%
American Beacon U.S. Government Money Market Select Fund, 0.01%C D		671,946			671,946
TOTAL INVESTMENTS - 100.95% (Cost $143,930,569)					205,705,946
LIABILITIES, NET OF OTHER ASSETS - (0.95%)					(1,928,850	)
TOTAL NET ASSETS - 100.00%				$	203,777,096
Percentages are stated as a percent of net assets.

See accompanying notes

33

American Beacon Mid-Cap Value Fund^SM

Schedule of Investments

October 31, 2021

^A All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2021 (Note 9).

^B Non-income producing security.

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

^D 7-day yield.

ADR - American Depositary Receipt.

LLC - Limited Liability Company.

PLC - Public Limited Company.

Long Futures Contracts Open on October 31, 2021:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
S&P MidCap 400 E-Mini Index	18	December 2021	$	4,939,572	$	5,020,920	$	81,348
			$	4,939,572	$	5,020,920	$	81,348

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

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2021, the investments were classified as described below:

Mid-Cap Value Fund	Level 1		Level 2		Level 3		Total
Assets
Common Stocks	$	199,716,717	$	-	$	-	$	199,716,717
Short-Term Investments		5,317,283		-		-		5,317,283
Securities Lending Collateral		671,946		-		-		671,946
Total Investments in Securities - Assets	$	205,705,946	$	-	$	-	$	205,705,946
Financial Derivative Instruments - Assets
Futures Contracts	$	81,348	$	-	$	-	$	81,348
Total Financial Derivative Instruments - Assets	$	81,348	$	-	$	-	$	81,348

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2021, there were no transfers into or out of Level 3.

See accompanying notes

34

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2021

	Balanced Fund		Mid-Cap Value Fund
Assets:
Investments in unaffiliated securities, at fair value† §	$	184,065,687	$	199,716,717
Investments in affiliated securities, at fair value‡		4,626,652		5,989,229
Cash collateral held at broker for futures contracts		213,000		203,000
Dividends and interest receivable		481,884		71,240
Receivable for investments sold		1,102,103		1,418,946
Receivable for fund shares sold		16,301		152,601
Receivable for tax reclaims		1,969		–
Receivable for expense reimbursement (Note 2)		–		86,760
Receivable for variation margin on open futures contracts (Note 5)		172,622		81,359
Prepaid expenses		33,065		31,046
Total assets		190,713,283		207,750,898
Liabilities:
Payable for investments purchased		1,004,236		1,339,416
Payable for fund shares redeemed		105,344		1,592,415
Cash due to broker for futures contracts		165,532		80,718
Management and sub-advisory fees payable (Note 2)		143,677		143,073
Service fees payable (Note 2)		33,178		21,540
Transfer agent fees payable (Note 2)		7,267		8,086
Payable upon return of securities loaned (Note 9)§		572,921		671,946
Custody and fund accounting fees payable		29,820		28,019
Professional fees payable		55,942		58,797
Trustee fees payable (Note 2)		993		1,084
Payable for prospectus and shareholder reports		11,876		17,524
Other liabilities		4,058		11,184
Total liabilities		2,134,844		3,973,802
Net assets	$	188,578,439	$	203,777,096
Analysis of net assets:
Paid-in-capital	$	137,968,229	$	127,782,959
Total distributable earnings (deficits)A		50,610,210		75,994,137
Net assets	$	188,578,439	$	203,777,096

See accompanying notes

35

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2021

	Balanced Fund		Mid-Cap Value Fund
Shares outstanding at no par value (unlimited shares authorized):
R5 Class		1,340,278		3,652,514
Y Class		2,393,389		2,470,355
Investor Class		5,939,068		2,894,308
Advisor Class		135,987		32,960
A Class		973,076		182,431
C Class		1,638,042		126,185
R6 Class		N/A		613,140
Net assets:
R5 Class	$	22,687,613	$	74,512,300
Y Class	$	40,858,765	$	49,952,999
Investor Class	$	85,251,213	$	60,065,449
Advisor Class	$	2,120,450	$	656,892
A Class	$	13,922,687	$	3,639,123
C Class	$	23,737,711	$	2,417,639
R6 Class		N/A	$	12,532,694
Net asset value, offering and redemption price per share:
R5 Class	$	16.93	$	20.40
Y Class	$	17.07	$	20.22
Investor Class	$	14.35	$	20.75
Advisor Class	$	15.59	$	19.93
A Class	$	14.31	$	19.95
A Class (offering price)	$	15.18	$	21.17
C Class	$	14.49	$	19.16
R6 Class		N/A	$	20.44
† Cost of investments in unaffiliated securities	$	147,086,360	$	137,941,340
‡ Cost of investments in affiliated securities	$	4,626,652	$	5,989,229
§ Fair value of securities on loan	$	3,900,043	$	2,899,350
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

36

American Beacon Funds^SM

Statements of Operations

For the year ended October 31, 2021

	Balanced Fund		Mid-Cap Value Fund
Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	2,227,140	$	4,320,572	A
Dividend income from affiliated securities (Note 2)		467		746
Interest income (net of foreign taxes)		1,639,998		–
Income derived from securities lending (Note 9)		20,294		7,501
Total investment income		3,887,899		4,328,819
Expenses:
Management and sub-advisory fees (Note 2)		960,603		1,891,184
Transfer agent fees:
R5 Class (Note 2)		5,575		24,069
Y Class (Note 2)		39,369		52,338
Investor Class		7,091		4,602
Advisor Class		216		1,467
A Class		669		561
C Class		1,487		954
R6 Class		–		455
Custody and fund accounting fees		59,623		57,934
Professional fees		93,499		192,218
Registration fees and expenses		81,537		94,407
Service fees (Note 2):
Investor Class		255,866		233,730
Advisor Class		4,618		1,996
A Class		11,684		5,274
C Class		18,636		2,963
Distribution fees (Note 2):
Advisor Class		5,173		2,141
A Class		31,913		9,570
C Class		259,316		29,688
Prospectus and shareholder report expenses		29,984		37,275
Trustee fees (Note 2)		12,591		15,061
Loan expense (Note 10)		927		1,856
Other expenses		31,848		45,548
Total expenses		1,912,225		2,705,291
Net fees waived and expenses (reimbursed) / recouped (Note 2)		–		(342,190	)
Net expenses		1,912,225		2,363,101
Net investment income		1,975,674		1,965,718
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesB		13,253,473		47,545,654
Commission recapture (Note 1)		–		16,284
Foreign currency transactions		–		(8	)
Futures contracts		1,298,422		3,580,590
Change in net unrealized appreciation of:
Investments in unaffiliated securitiesC		36,225,712		64,223,874
Futures contracts		299,343		76,327
Net gain from investments		51,076,950		115,442,721
Net increase in net assets resulting from operations	$	53,052,624	$	117,408,439
† Foreign taxes	$	15,296	$	3,405
A Includes significant dividends from one issuer of $453,636.
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

37

American Beacon Funds^SM

Statements of Changes in Net Assets

	Balanced Fund						Mid-Cap Value Fund
	Year Ended October 31, 2021			Year Ended October 31, 2020			Year Ended October 31, 2021			Year Ended October 31, 2020
Increase (decrease) in net assets:
Operations:
Net investment income	$	1,975,674		$	3,018,158		$	1,965,718		$	4,721,907
Net realized gain (loss) from investments in unaffiliated securities, commission recapture, foreign currency transactions and futures contracts		14,551,895			20,492,813			51,142,520			(10,993,331	)
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities and futures contracts		36,525,055			(33,734,462	)		64,300,201			(54,393,925	)
Net increase (decrease) in net assets resulting from operations		53,052,624			(10,223,491	)		117,408,439			(60,665,349	)
Distributions to shareholders:
Total retained earnings:
R5 Class		(2,868,929	)		(3,590,716	)		(1,595,645	)		(2,382,518	)
Y Class		(5,530,045	)		(5,090,722	)		(883,163	)		(1,359,606	)
Investor Class		(10,889,450	)		(8,793,706	)		(515,548	)		(3,045,660	)
Advisor Class		(246,705	)		(184,147	)		(19,048	)		(37,713	)
A Class		(1,705,799	)		(1,532,023	)		(60,706	)		(36,488	)
C Class		(3,318,336	)		(2,715,840	)		(26,795	)		(26,609	)
R6 Class		–			–			(218,896	)		(57,137	)
Net distributions to shareholders		(24,559,264	)		(21,907,154	)		(3,319,801	)		(6,945,731	)
Capital share transactions (Note 11):
Proceeds from sales of shares		41,247,243			38,024,184			55,028,276			73,144,682
Reinvestment of dividends and distributions		23,515,594			21,072,153			3,286,217			6,914,103
Cost of shares redeemed		(77,566,519	)		(112,808,124	)		(257,462,469	)		(219,732,201	)
Net (decrease) in net assets from capital share transactions		(12,803,682	)		(53,711,787	)		(199,147,976	)		(139,673,416	)
Net increase (decrease) in net assets		15,689,678			(85,842,432	)		(85,059,338	)		(207,284,496	)
Net assets:
Beginning of year		172,888,761			258,731,193			288,836,434			496,120,930
End of year	$	188,578,439		$	172,888,761		$	203,777,096		$	288,836,434

See accompanying notes

38

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Funds, each a series within the Trust, are registered under the Investment Company Act of 1940, as amended (the “Act”), as diversified, open-end management investment companies. As of October 31, 2021, the Trust consists of twenty-eight active series, two of which are presented in this filing: American Beacon Balanced Fund and American Beacon Mid-Cap Value Fund (collectively, the “Funds” and each individually a “Fund”). The remaining twenty-six 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.

In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives a fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how a fund will use derivatives, may adversely affect a fund’s performance and may increase costs related to a fund’s use of derivatives.

39

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

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
R5 Class	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 Class	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500
Advisor Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrators.	$	2,500
A Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrator. Retail investors who invest directly through a financial intermediary such as a broker, bank, or registered investment advisor which may include a front-end sales charge and a contingent deferred sales charge (“CDSC”).	$	2,500
C Class	Retail investors who invest directly through a financial intermediary such as a broker or through employee directed benefit plans with applicable sales charges which may include CDSC.	$	1,000
R6 Class	Large institutional retirement plan investors - sold through retirement plan sponsors.		None

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

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. Tax reclaim accruals are automatically generated on accounting and custody systems at the time of the income event based on the tax databases maintained by the Funds’ custodian. Reconciliations are performed between custody and accounting systems to help ensure reclaim accruals are in line. Interest income, net of foreign taxes, is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. For convertible securities, premiums attributable to the conversion feature are not amortized. Realized gains (losses) from securities sold are determined on the basis of specific lot identification.

40

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

Estimated tax liabilities on certain foreign securities are recorded on an accrual basis and are reflected as components of interest income or net change in unrealized appreciation (depreciation) on investments on the Statements of Operations, as appropriate. Tax liabilities realized as a result of such security sales are reflected as a component of net realized gain (loss) on investments on the Statements of Operations. Paydown gains (losses) on mortgage-related and other asset-backed securities, if any, are recorded as components of interest income on the Statements of Operations. Income or short-term capital gain distributions received from registered investment companies, if any, are recorded as dividend income. Long-term gain distributions received from registered investment companies, if any, are recorded as realized gains.

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

Distributions to Shareholders

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

Commission Recapture

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

Allocation of Income, Trust Expenses, Gains, and Losses

Investment income, realized and unrealized gains and losses from investments of the Funds are allocated daily to each class of shares based upon the relative proportion of net assets of each class to the total net assets of the Funds. Expenses directly charged or attributable to a Fund will be paid from the assets of a 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.

41

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

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

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

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

The Management and Sub-Advisory Fees paid by the Funds for the year ended October 31, 2021 were as follows:

Balanced Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	659,962
Sub-Advisor Fees		0.17	%		300,641
Total		0.52	%	$	960,603

Mid-Cap Value Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	783,446
Sub-Advisor Fees		0.48	%		1,107,738
Total		0.83	%	$	1,891,184

As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee of 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee of 10% of such loan fees. Securities lending income is generated from the

42

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

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. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statements of Operations. During the year ended October 31, 2021, the Manager received securities lending fees of $2,237 and $930 for the securities lending activities of Balanced Fund and Mid-Cap Value Fund, respectively.

Distribution Plans

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

Service Plans

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

Sub-Transfer Agent Fees

The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the R5 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 R5 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 R5 and Y Classes on an annual basis. During the year ended October 31, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Balanced	$	42,229
Mid-Cap Value		66,929

As of October 31, 2021, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
Balanced	$	5,202
Mid-Cap Value		5,329

43

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

Investments in Affiliated Funds

The Funds may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Funds in connection with securities lending may also be invested in the USG Select Fund. The Funds listed below held the following shares with an October 31, 2021 fair value and dividend income earned from the investment in the USG Select Fund.

Affiliated Security	Type of Transaction	Fund	October 31, 2021 Shares/Principal		Change in Unrealized Gain (Loss)		Realized Gain (Loss)		Dividend Income		October 31, 2021 Fair Value
U.S. Government Money Market Select Fund	Direct	Balanced	$	4,053,731	$	-	$	-	$	467	$	4,053,731
U.S. Government Money Market Select Fund	Securities Lending	Balanced		572,921		-		-		N/A		572,921
U.S. Government Money Market Select Fund	Direct	Mid-Cap Value		5,317,283		-		-		746		5,317,283
U.S. Government Money Market Select Fund	Securities Lending	Mid-Cap Value		671,946		-		-		N/A		671,946

The Funds and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended October 31, 2021, the Manager earned fees on the Funds’ direct investments and securities lending collateral investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral Investments in USG Select Fund		Total
Balanced	$	6,053	$	230	$	6,283
Mid-Cap Value		9,139		223		9,362

Interfund Credit Facility

Pursuant to an exemptive order issued by the SEC, the Funds, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2021, the Balanced Fund did not utilize the credit facility and the Mid-Cap Value Fund borrowed $10,232,971 for 1 day at an interest rate of 0.83% with interest charges of $233. This amount is recorded as “Other expenses” in the Statements of Operations.

44

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Mid-Cap Value Fund, through February 28, 2022 to the extent that total operating expenses (excluding taxes, interest, brokerage commissions, acquired fund fees and expenses, securities lending fees, expenses associated with securities sold short, litigation, and other extraordinary expenses) exceed the Funds’ expense cap. During the year ended October 31, 2021, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap
Fund	Class	1/11/2020 - 2/28/2021			3/1/2021 - 10/31/2021			Reimbursed Expenses		(Recouped) Expenses		Expiration of Reimbursed Expenses
Mid-Cap Value	R5		N/A			0.91	%	$	107,368	$	-		2023-2024
Mid-Cap Value	Y		N/A			0.99	%		67,180		-		2023-2024
Mid-Cap Value	Investor		N/A			1.17	%		136,113		-		2023-2024
Mid-Cap Value	Advisor		N/A			1.49	%		1,209		-		2023-2024
Mid-Cap Value	A		N/A			1.26	%		5,704		-		2023-2024
Mid-Cap Value	C		N/A			2.01	%		3,846		-		2023-2024
Mid-Cap Value	R6		0.87	%		0.90	%		20,770		-		2023-2024

Of the above amounts, $86,760 was disclosed as a Receivable for expense reimbursement on the Statements of Assets and Liabilities at October 31, 2021 for the Mid-Cap Value Fund.

During the year ended October 31, 2021, there were no reimbursed or recouped expenses for the Balanced Fund.

The Funds have adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Funds for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years from 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 2023 and 2024. The Funds 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
Mid-Cap Value	$	-	$	6,931	*	$	-		2022-2023

* Amount related to R6 Class

Sales Commissions

The Funds’ Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers which may be used to offset distribution related expenses. During the year ended October 31, 2021, RID collected $2,699 and $74 for Balanced Fund and Mid-Cap Value Fund, respectively, from the sale of Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Funds’ Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2021, there were no CDSC fees collected for the 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

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October 31, 2021

purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2021, CDSC fees of $485 and $591 were collected for the Class C Shares of Balanced Fund and Mid-Cap Value Fund, respectively.

Trustee Fees and Expenses

Effective January 1, 2021, 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 and Compliance Committee and the Investment Committee, (c) $1,000 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. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. 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 and Compliance 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 $10,000.

3.  Security Valuation and Fair Value Measurements

The price of a Fund’s shares is based on its net asset value (“NAV”) per share. A 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 a Fund’s shares is determined based on a pro rata allocation of a Fund’s investment income, expenses and total capital gains and losses. A 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, a Fund’s NAV per share typically would still be determined as of the regular close of trading on the NYSE. The Funds do not price their shares on days that the NYSE is closed. Foreign exchanges may permit trading in foreign securities on days when a Fund is not open for business, which may result in the value of a 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 a Fund holds securities or other assets that are denominated in a foreign currency, a Fund will normally use the currency exchange rates as of 4:00 p.m. ET.

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October 31, 2021

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 a Fund occurs after the close of a related exchange but before the determination of a 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 Funds may fair value securities as a result of significant events occurring after the close of the foreign markets in which a Fund invests as described below. In addition, the Funds may invest in illiquid securities requiring these procedures.

A Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before a 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 a Fund is open. A 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 a Fund’s fair valuation procedures. If any significant discrepancies are found, the Manager may adjust a 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 a Fund’s own assumptions about the factors market participants would use in pricing an investment.

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October 31, 2021

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

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

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

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

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

4.  Securities and Other Investments

Agency Mortgage-Backed Securities

Certain mortgage-backed securities (“MBS”) may be issued or guaranteed by the U.S. government or a government sponsored entity, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Although these instruments may be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit of the United States and are still exposed to the risk of non-payment.

American Depositary Receipts and Non-Voting Depositary Receipts

ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. Non-Voting Depositary Receipts (“NVDRs”) represent financial interests in an issuer but the holder is not entitled to any voting rights. Depositary receipts may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers, and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Funds’ possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. In addition, the Funds may invest in unsponsored depositary receipts, the issuers of which are not

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October 31, 2021

obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle the Funds to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security.

Asset-Backed Securities (“ABS”)

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

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

Common Stock

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

Fixed-Income Investments

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

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October 31, 2021

result in a Fund having to reinvest its proceeds in lower yielding securities. Securities underlying MBS and ABS, which may include subprime mortgages, also may be subject to a higher degree of credit risk, valuation risk, and liquidity risk.

High-Yield Securities

Non-investment-grade securities are rated below the four highest credit grades by at least one of the public rating agencies (or are unrated if not publicly rated). Participation in high-yielding securities transactions generally involves greater returns in the form of higher average yields. However, participation in such transactions involves greater risks, including sensitivity to economic changes, solvency, and relative liquidity in the secondary trading market. Lower ratings may reflect a greater possibility that the financial condition of the issuer, or adverse changes in general economic conditions, or both, may impair the ability of the issuer to make payments of interest and principal. The prices and yields of lower-rated securities generally fluctuate more than higher-quality securities, and such prices may decline significantly in periods of general economic difficulty or rising interest rates.

Illiquid and Restricted Securities

Generally, an illiquid asset is an asset that the Funds reasonably expect cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, 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 a 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, a Fund may get only limited information about an issuer, so it may be less able to predict a loss. A 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 a Fund qualify under Rule 144A and an institutional market develops for those securities, a 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 a 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 a Fund, to purchase such unregistered securities if certain conditions are met.

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October 31, 2021

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 a Fund, that agree they are purchasing the securities for investment and not with an intention to distribute to the public. Any resale by the purchaser must be pursuant to an exempt transaction and may be accomplished in accordance with Rule 144A. Section 4(a)(2) securities normally are resold to other institutional investors through or with the assistance of the issuer or dealers that make a market in the Section 4(a)(2) securities, thus providing liquidity.

Restricted securities outstanding during the year ended October 31, 2021 are disclosed in the Notes to the Schedules of Investments.

Mortgage-Backed Securities

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

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

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

Mortgage-Related and Other Asset-Backed Securities

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

Other Investment Company Securities and Other Exchange-Traded Products

The 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 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

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October 31, 2021

other expenses. By investing in another investment company, the Funds become a shareholder of that investment company. As a result, the Funds’ shareholders indirectly will bear the Funds’ proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Funds’ shareholders directly bear in connection with the Funds’ own operations. These other fees and expenses are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Funds in their Prospectus, if applicable. Investments in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

Privately Issued Mortgage-Backed Securities

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

Publicly Traded Partnerships/Master Limited Partnerships (“MLPs”)

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

Real Estate Investment Trusts (“REITs”)

REITs are pooled investment vehicles that own, and often operate, income producing real estate or invest in mortgages secured by loans on such real estate. REITs are susceptible to the risks associated with direct ownership of real estate, such as declines in property values, increase in property taxes, operating expenses, rising interest rates or overbuilding, zoning changes, and losses from casualty or condemnation. REITs typically are subject to management fees and other expenses that are separate from those of a fund.

U.S. Government Agency Securities

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

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obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.

U.S. Treasury Obligations

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

Variable or Floating Rate Obligations

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

5.  Financial Derivative Instruments

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

Futures Contracts

A futures contract is a contract to purchase or sell a particular security, or the cash value of an asset, such as securities, indices, or currencies, at a specified future date at a price agreed upon when the contract is made. Under many such contracts, no delivery of the actual underlying asset is required. Rather, upon the expiration of the contract, settlement is made by exchanging cash in an amount equal to the difference between the contract price and the closing price of the asset (e.g., a security or an index) at expiration, net of the initial and variation margin that was previously paid. A Treasury futures contract is a contract for the future delivery of a U.S. Treasury security. An equity index futures contract is based on the value of an underlying index. A Fund may, from time to time, use futures positions to equitize cash and expose its portfolio to changes in securities prices or index prices. This can magnify gains and losses in a Fund. A Fund also may have to sell assets at inopportune times to satisfy its settlement or collateral obligations. The risks associated with the use of futures contracts also include that there may be an imperfect correlation between the changes in market value of the prices of futures contracts and the assets underlying such contracts and that there may not be a liquid secondary market for a futures contract.

During the year ended October 31, 2021, the Funds entered into futures contracts primarily for exposing cash to markets.

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

Average Futures Contracts Outstanding
Fund	Year Ended October 31, 2021
Balanced		21
Mid-Cap Value		28

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

Balanced Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of October 31, 2021:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Receivable for variation margin from open futures contracts(2)		$	-		$	-		$	-		$	-		$	172,624		$	172,624

The effect of financial derivative instruments on the Statements of Operations as of October 31, 2021:
	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	$	-	$	-	$	-	$	-	$	1,298,422	$	1,298,422
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	$	-	$	-	$	-	$	-	$	299,343	$	299,343

Mid-Cap Value Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of October 31, 2021:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Receivable for variation margin from open futures contracts(2)		$	-		$	-		$	-		$	-		$	81,348		$	81,348

The effect of financial derivative instruments on the Statements of Operations as of October 31, 2021:
	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		$	-		$	-		$	-		$	-		$	3,580,590		$	3,580,590
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		$	-		$	-		$	-		$	-		$	76,327		$	76,327

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

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

Offsetting Assets and Liabilities

The Funds are parties to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Funds employ multiple money managers and counterparties and have elected not to offset qualifying financial and derivative instruments on the Statements of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts

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of netting arrangements that provide the right to offset are detailed below, if applicable. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, October 31, 2021.

Balanced Fund

Offsetting of Financial and Derivative Assets as of October 31, 2021:
	Assets			Liabilities
Futures Contracts(1)	$	172,624		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	172,624		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(172,624	)	$	-

	Remaining Contractual Maturity of the Agreements As of October 31, 2021
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	572,921	$	-		-	$	-	$	572,921
Total Borrowings	$	572,921	$	-	$	-	$	-	$	572,921
Gross amount of recognized liabilities for securities lending transactions									$	572,921

Mid-Cap Value Fund

Offsetting of Financial and Derivative Assets as of October 31, 2021:
	Assets			Liabilities
Futures Contracts(1)	$	81,348		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	81,348		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(81,348	)	$	-

	Remaining Contractual Maturity of the Agreements As of October 31, 2021
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	671,946	$	-		-	$	-	$	671,946
Total Borrowings	$	671,946	$	-	$	-	$	-	$	671,946
Gross amount of recognized liabilities for securities lending transactions									$	671,946

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

6. Principal Risks

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

Asset-Backed and Mortgage Related Securities Risk

Investments in asset-backed and mortgage related securities are subject to market risks for fixed-income securities which include, but are not limited to, interest rate risk, prepayment risk and extension risk. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain MBS and ABS securities. If interest rates fall, the rate of prepayments tends to increase as borrowers are

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October 31, 2021

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

Credit Risk

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

Equity Investments Risk

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

Foreign Investing and Emerging Markets Risk

Non-U.S. investments carry potential risks not associated with U.S. investments. Such risks include, but are not limited to: (1) currency exchange rate fluctuations, (2) political and financial instability, (3) less liquidity, (4) lack of uniform accounting, auditing and financial reporting standards, (5) increased price volatility, (6) less

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October 31, 2021

government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. To the extent the Funds invest a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region. In addition, the economies and political environments of emerging market countries tend to be more unstable than those of developed countries, resulting in more volatile rates of return than the developed markets and substantially greater risk to investors. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currency and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depository or their agents goes bankrupt. When investing in emerging markets, the risks of investing in foreign securities are heightened. Emerging markets have unique risks that are greater than, or in addition to, investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. There are also risks of: greater political uncertainties; an economy’s dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities, resulting in increased volatility and limited liquidity for emerging market securities; trading suspensions; and delays and disruptions in securities settlement procedures. In addition, there may be less information available to make investment decisions and more volatile rates of return.

Futures Contracts Risk

Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. There may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes. There can be no assurance that any strategy used will succeed. There also can be no assurance that, at all times, a liquid market will exist for offsetting a futures contract that a Fund has previously bought or sold and this may result in the inability to close a futures contract when desired. Futures contracts may experience potentially dramatic price changes, which will increase the volatility of a 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).

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

Generally, the value of investments with interest rate risk, such as fixed income securities or derivatives, will move in the opposite direction to movements in interest rates. The prices of fixed income securities or derivatives are also affected by their durations. Fixed income securities or derivatives with longer durations generally have greater sensitivity to changes in interest rates. For example, if a bond has a duration of eight years, a 1% increase in interest rates could be expected to result in an 8% decrease in the value of the bond. An increase in interest rates can impact markets broadly as well. Extremely low or negative interest rates may become more prevalent among U.S. and foreign issuers. To the extent a Fund holds an investment with a negative interest rate to maturity, a Fund may generate a negative return on that investment. Conversely, in the future, interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to a Fund.

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October 31, 2021

LIBOR Risk

These Reference Rates are generally intended to represent the rate at which contributing banks may obtain short-term borrowings from each other within certain financial markets. LIBOR is produced daily by averaging the rates reported by a number of banks and may be a significant factor in determining a Fund’s payment obligations under a derivative instrument, the cost of financing to a Fund, or an investment’s value or return to a Fund, and may be used in other ways that affect a Fund’s performance. Arrangements are underway to phrase out the use of LIBOR. These arrangements and any additional regulatory or market changes may have an adverse impact on a Fund or its investments, including increased volatility or illiquidity in markets for instruments that rely on LIBOR.

Liquidity Risk

A Fund is susceptible to the risk that certain investments held by a Fund may have limited marketability, be subject to restrictions on sale, be difficult or impossible to purchase or sell at favorable times or prices, or become less liquid in response to market developments or adverse credit events that may affect issuers or guarantors of a security. An inability to sell a portfolio position can adversely affect a Fund’s value or prevent a Fund from being able to take advantage of other investment opportunities. Market prices for such instruments may be volatile. A Fund could lose money if it is unable to dispose of an investment at a time that is most beneficial to the Fund. A Fund may be required to dispose of investments at unfavorable times or prices to satisfy obligations, which may result in losses or may be costly to a Fund. For example, liquidity risk may be magnified in rising interest rate environments due to higher than normal redemption rates. Unexpected redemptions may force a Fund to sell certain investments at unfavorable prices to meet redemption requests or other cash needs. Judgment plays a greater role in pricing illiquid investments than in investments with more active markets.

Market Risk

The Funds are subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Funds’ performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. 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. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future, particularly if markets enter a period of uncertainty or economic weakness. The value of a security may decline due to adverse issuer-specific conditions, general market conditions unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole.

Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Adverse market events may also lead to increased shareholder redemptions, which could cause a Fund to experience a loss or difficulty in selling investments to meet redemption requests by shareholders and may increase a Fund’s portfolio turnover, which will increase the costs that a Fund incurs and lower a Fund’s performance. Even when securities markets perform well, there is no assurance that the investments held by a Fund will increase in value along with the broader market.

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October 31, 2021

Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, including the U.S. presidential election, 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 severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers.

Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in a Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in securities prices could be a sustained trend or a drastic movement. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.

Mortgage-Backed and Mortgage Related Securities Risk

Investments in mortgage-backed and mortgage-related securities are influenced by the factors affecting the mortgages underlying the securities or the housing market. Investments in mortgage-backed and mortgage-related securities also are subject to market risks for fixed income securities, which include, but are not limited to, credit risk, interest rate risk, prepayment risk, extension risk, callable securities risk, and valuation risk. A decline in the credit quality of the issuers of mortgage-backed and mortgage-related securities or instability in the markets for such securities may affect the value and liquidity of such securities, which could result in losses to a Fund. These securities are also subject to the risk of default on the underlying mortgages, particularly during periods of market downturn, and an unexpectedly high rate of defaults on the underlying assets will adversely affect the security’s value.

Multiple Sub-Advisor Risk

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

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October 31, 2021

Other Investment Companies Risk

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

Prepayment and Extension Risk

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

Recent Market Events Risk

An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. Transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions, closed international, national and local borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event cancellations, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession.

The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets. Amid the Federal Reserve’s ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. 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. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on December 31, 2020, commonly referred to as “Brexit,” and a trade agreement between the

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October 31, 2021

United Kingdom and the European Union, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.

Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.

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 Funds invest in emerging market securities, which are generally less liquid than the securities of U.S. and other developed markets. The sale of assets to meet redemption requests may create net capital gains or losses, which could cause the Funds to have to distribute substantial capital gains.

Sector Risk

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

In addition, when a Fund focuses its investments in certain sectors of the economy, its performance may be driven largely by sector performance and could fluctuate more widely than if a Fund were invested more evenly across sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The businesses that constitute a sector may all react the same way to economic, political or regulatory events. A Fund’s performance could also be affected if the sectors do not perform as expected. The lack of exposure to one or more sectors may adversely affect performance. As a Fund’s portfolio changes over time, a Fund’s exposure to a particular sector may become higher or lower.

Securities Lending Risk

A Fund may lend its portfolio securities to brokers, dealers and financial institutions in order to obtain additional income. Borrowers of a Fund’s securities provide collateral either in the form of cash, which a Fund reinvests in securities or in the form of non-cash collateral consisting of securities issued or guaranteed by the U.S. government or one of its agencies or instrumentalities. 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 cover its payment to the borrower of a pre-negotiated fee or “rebate” for the use of that cash collateral in connection with the loan. A Fund could also lose money due to a decline in the value of non-cash collateral. In

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October 31, 2021

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 or could result in increased costs. Moreover, if the borrower becomes subject to insolvency or similar proceedings, a Fund could incur delays in its ability to enforce its rights in its collateral. There also is a risk that a borrower may default on its obligation to return loaned securities at a time when the value of a Fund’s collateral is inadequate. Although a Fund’s securities lending agent may indemnify a Fund against that risk, it is also possible that the securities lending agent will be unable to satisfy its indemnification obligations. In any case in which the loaned securities are not returned to a Fund before an ex-dividend date, whether or not due to a default by the borrower, the payment in lieu of the dividend that a Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.

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

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

7.  Federal Income and Excise Taxes

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

The Funds do not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2021 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.

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The tax character of distributions paid were as follows:

	Balanced Fund				Mid-Cap Value Fund
	Year Ended October 31, 2021		Year Ended October 31, 2020		Year Ended October 31, 2021		Year Ended October 31, 2020
Distributions paid from:
Ordinary income*
R5 Class	$	407,719	$	1,018,446	$	1,595,645	$	2,382,518
Y Class		708,204		1,571,770		883,163		1,359,606
Investor Class		1,539,331		2,602,441		515,548		3,045,660
Advisor Class		31,060		56,832		19,048		37,713
A Class		238,998		467,213		60,706		36,488
C Class		254,504		735,885		26,795		26,609
R6 Class		-		-		218,896		57,137
Long-term capital gains
R5 Class		2,461,210		2,572,270		-		-
Y Class		4,821,841		3,518,952		-		-
Investor Class		9,350,119		6,191,265		-		-
Advisor Class		215,645		127,315		-		-
A Class		1,466,801		1,064,810		-		-
C Class		3,063,832		1,979,955		-		-
R6 Class		-		-		-		-
Total distributions paid	$	24,559,264	$	21,907,154	$	3,319,801	$	6,945,731

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

As of October 31, 2021, the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Balanced	$	154,623,001	$	36,670,920	$	(2,601,582	)	$	34,069,338
Mid-Cap Value		148,262,939		61,246,892		(3,803,885	)		57,443,007

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)		Other Temporary Differences		Distributable Earnings
Balanced	$	34,069,338	$	5,186,196	$	11,354,676	$	-	$	-	$	50,610,210
Mid-Cap Value		57,443,007		771,097		17,780,033		-		-		75,994,137

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, reclassifications of income from investments in real estate investment securities, book amortization of premiums, 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. The Funds had no permanent differences as of October 31, 2021.

For federal income tax purposes, the Fund measures its capital loss carryforwards annually at October 31, its fiscal year end. Capital loss carryforwards retain their character as short-term and/or long-term and may be carried forward and applied against future realized capital gains with no expiration date.

The Mid-Cap Value Fund utilized $24,193,808 short-term and $4,636,872 long-term capital loss carryforwards and did not have any remaining capital loss carryforwards as of October 31, 2021.

63

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2021 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Purchases of U.S. Government Securities		Sales (non-U.S. Government Securities)		Sales of U.S. Government Securities
Balanced	$	48,674,843	$	17,448,393	$	84,395,462	$	10,347,703
Mid-Cap Value		64,844,364		-		253,788,909		-

A summary of the Funds’ transactions in the USG Select Fund for the year ended October 31, 2021 were as follows:

Fund	Type of Transaction	October  31, 2020 Shares/Fair Value		Purchases		Sales		October  31, 2021 Shares/Fair Value
Balanced	Direct	$	3,476,667	$	86,532,947	$	85,955,883	$	4,053,731
Balanced	Securities Lending		-		6,810,317		6,237,396		572,921
Mid-Cap Value	Direct		10,068,703		271,624,262		276,375,682		5,317,283
Mid-Cap Value	Securities Lending		-		13,001,334		12,329,388		671,946

9.  Securities Lending

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

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

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

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

Securities lending transactions pose certain risks to the Funds, including that the borrower may not provide additional collateral when required or return the securities when due, that the value of the short-term investments

64

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

will be less than the amount of cash collateral required to be returned to the borrower, that non-cash collateral may be subject to legal constraints in the event of a borrower bankruptcy, and that the cash collateral investments could become illiquid and unable to be used to return collateral to the borrower. The Funds could also experience delays and costs in gaining access to the collateral. The Funds bear the risk of any deficiency in the amount of the cash collateral available for return to the borrower and any action which impairs its ability to liquidate non-cash collateral to satisfy a borrower default.

As of October 31, 2021, the value of outstanding securities on loan and the value of collateral were as follows:

Fund	Market Value of Securities on Loan		Cash Collateral Received		Non-Cash Collateral Received		Total Collateral Received
Balanced	$	3,900,043	$	572,921	$	3,456,861	$	4,029,782
Mid-Cap Value		2,899,350		671,946		2,359,975		3,031,921

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

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

10.  Borrowing Arrangements

Effective November 12, 2020 (the “Effective Date”), the Funds, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Funds’ Committed Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

On the Effective Date, the Funds, along with certain other Participating Funds managed by the Manager, also renewed 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) Overnight Bank Funding Rate (”OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Funds’ Uncommitted Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

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

During the year ended October 31, 2021, the Funds did not utilize this facility.

65

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

11.  Capital Share Transactions

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

	R5 Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		120,721		$	1,931,788			720,836		$	10,869,956
Reinvestment of dividends		193,779			2,855,565			231,222			3,577,398
Shares redeemed		(540,429	)		(8,429,094	)		(2,234,516	)		(34,374,196	)
Net (decrease) in shares outstanding		(225,929	)	$	(3,641,741	)		(1,282,458	)	$	(19,926,842	)
	Y Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		941,367		$	15,550,576			694,721		$	10,316,369
Reinvestment of dividends		332,973			4,939,228			298,946			4,637,904
Shares redeemed		(1,893,140	)		(30,069,383	)		(1,803,400	)		(25,905,317	)
Net (decrease) in shares outstanding		(618,800	)	$	(9,579,579	)		(809,733	)	$	(10,951,044	)
	Investor Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		1,413,967		$	19,561,973			923,920		$	11,824,522
Reinvestment of dividends		851,015			10,672,318			641,609			8,601,456
Shares redeemed		(1,820,132	)		(24,764,742	)		(2,760,850	)		(35,445,519	)
Net increase (decrease) in shares outstanding		444,850		$	5,469,549			(1,195,321	)	$	(15,019,541	)
	Advisor Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		10,067		$	147,698			22,115		$	314,694
Reinvestment of dividends		18,158			246,705			12,577			180,473
Shares redeemed		(24,084	)		(357,831	)		(296,651	)		(4,511,571	)
Net increase (decrease) in shares outstanding		4,141		$	36,572			(261,959	)	$	(4,016,404	)
	A Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		237,914		$	3,301,777			164,986		$	2,093,500
Reinvestment of dividends		122,623			1,533,096			110,056			1,470,053
Shares redeemed		(425,388	)		(5,764,728	)		(369,930	)		(4,745,607	)
Net (decrease) in shares outstanding		(64,851	)	$	(929,855	)		(94,888	)	$	(1,182,054	)
	C Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Balanced Fund	Shares			Amount			Shares			Amount
Shares sold		53,546		$	753,431			207,575		$	2,605,143
Reinvestment of dividends		259,684			3,268,682			191,599			2,604,869
Shares redeemed		(587,209	)		(8,180,741	)		(617,259	)		(7,825,914	)
Net (decrease) in shares outstanding		(273,979	)	$	(4,158,628	)		(218,085	)	$	(2,615,902	)

66

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

	R5 Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		1,246,663		$	23,276,443			1,887,260		$	23,300,801
Reinvestment of dividends		98,960			1,574,461			146,744			2,365,592
Shares redeemed		(3,195,796	)		(57,118,702	)		(7,448,022	)		(100,146,293	)
Net (decrease) in shares outstanding		(1,850,173	)	$	(32,267,798	)		(5,414,018	)	$	(74,479,900	)
	Y Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		545,635		$	10,603,550			1,035,791		$	11,573,165
Reinvestment of dividends		55,418			874,492			84,354			1,348,865
Shares redeemed		(1,867,296	)		(32,744,203	)		(2,933,125	)		(36,543,666	)
Net (decrease) in shares outstanding		(1,266,243	)	$	(21,266,161	)		(1,812,980	)	$	(23,621,636	)
	Investor Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		606,863		$	11,174,025			1,905,185		$	23,857,782
Reinvestment of dividends		31,633			513,090			186,420			3,042,503
Shares redeemed		(9,173,222	)		(153,379,178	)		(5,424,561	)		(70,707,388	)
Net (decrease) in shares outstanding		(8,534,726	)	$	(141,692,063	)		(3,332,956	)	$	(43,807,103	)
	Advisor Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		6,162		$	106,606			48,344		$	648,990
Reinvestment of dividends		1,219			19,048			2,384			37,713
Shares redeemed		(71,189	)		(1,204,065	)		(164,068	)		(2,191,914	)
Net (decrease) in shares outstanding		(63,808	)	$	(1,078,411	)		(113,340	)	$	(1,505,211	)
	A Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		84,871		$	1,533,868			64,954		$	824,817
Reinvestment of dividends		3,860			60,258			2,289			36,239
Shares redeemed		(120,724	)		(2,259,422	)		(102,155	)		(1,300,626	)
Net (decrease) in shares outstanding		(31,993	)	$	(665,296	)		(34,912	)	$	(439,570	)
	C Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		14,141		$	263,317			13,300		$	166,142
Reinvestment of dividends		1,721			25,972			1,704			26,053
Shares redeemed		(126,341	)		(2,156,797	)		(78,574	)		(923,215	)
Net (decrease) in shares outstanding		(110,479	)	$	(1,867,508	)		(63,570	)	$	(731,020	)
	R6 Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Mid-Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		430,455		$	8,070,467			1,135,634		$	12,772,985
Reinvestment of dividends		13,733			218,896			3,542			57,138
Shares redeemed		(454,750	)		(8,600,102	)		(661,613	)		(7,919,099	)
Net increase (decrease) in shares outstanding		(10,562	)	$	(310,739	)		477,563		$	4,911,024

67

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

12.  Subsequent Events

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

68

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R5 ClassA
	Year Ended October 31,
	2021			2020B			2019			2018			2017
Net asset value, beginning of period	$	14.35		$	16.36		$	16.20		$	17.30		$	15.26
Income (loss) from investment operations:
Net investment income		0.19			0.20			0.31			0.28			0.36
Net gains (losses) on investments (both realized and unrealized)		4.34			(0.80	)		1.23			(0.10	)		2.04
Total income (loss) from investment operations		4.53			(0.60	)		1.54			0.18			2.40
Less distributions:
Dividends from net investment income		(0.30	)		(0.24	)		(0.26	)		(0.48	)		(0.36	)
Distributions from net realized gains		(1.65	)		(1.17	)		(1.12	)		(0.80	)		-
Total distributions		(1.95	)		(1.41	)		(1.38	)		(1.28	)		(0.36	)
Net asset value, end of period	$	16.93		$	14.35		$	16.36		$	16.20		$	17.30
Total returnC		33.80	%		(4.14	)%		10.89	%		0.84	%		15.82	%
Ratios and supplemental data:
Net assets, end of period	$	22,687,613		$	22,476,942		$	46,593,155		$	60,191,704		$	88,015,702
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.70	%		0.88	%		0.66	%		0.62	%		0.59	%
Expenses, net of reimbursements and/or recoupments		0.70	%		0.88	%		0.66	%		0.62	%		0.59	%
Net investment income, before expense reimbursements and/or recoupments		1.37	%		1.82	%		2.24	%		1.95	%		1.80	%
Net investment income, net of reimbursements and/or recoupments		1.37	%		1.82	%		2.24	%		1.95	%		1.80	%
Portfolio turnover rate		37	%		82	%		68	%		28	%		32	%

^A  Prior to February 28, 2020, the R5 Class was known as Institutional Class.

^B  On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

^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

69

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	14.46		$	16.47		$	16.31		$	17.39		$	15.30
Income (loss) from investment operations:
Net investment income		0.20			0.25			0.33			0.35			0.24
Net gains (losses) on investments (both realized and unrealized)		4.35			(0.86	)		1.20			(0.16	)		2.20
Total income (loss) from investment operations		4.55			(0.61	)		1.53			0.19			2.44
Less distributions:
Dividends from net investment income		(0.29	)		(0.23	)		(0.25	)		(0.47	)		(0.35	)
Distributions from net realized gains		(1.65	)		(1.17	)		(1.12	)		(0.80	)		-
Total distributions		(1.94	)		(1.40	)		(1.37	)		(1.27	)		(0.35	)
Net asset value, end of period	$	17.07		$	14.46		$	16.47		$	16.31		$	17.39
Total returnB		33.66	%		(4.17	)%		10.75	%		0.88	%		16.05	%
Ratios and supplemental data:
Net assets, end of period	$	40,858,765		$	43,550,846		$	62,956,422		$	71,296,735		$	64,926,394
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.77	%		0.96	%		0.74	%		0.70	%		0.68	%
Expenses, net of reimbursements and/or recoupments		0.77	%		0.96	%		0.74	%		0.70	%		0.68	%
Net investment income, before expense reimbursements and/or recoupments		1.31	%		1.71	%		2.15	%		1.86	%		1.67	%
Net investment income, net of reimbursements and/or recoupments		1.31	%		1.71	%		2.15	%		1.86	%		1.67	%
Portfolio turnover rate		37	%		82	%		68	%		28	%		32	%

^A  On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

70

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	12.43		$	14.36		$	14.41		$	15.51		$	13.71
Income (loss) from investment operations:
Net investment income		0.22			0.03			0.18			0.20			0.15
Net gains (losses) on investments (both realized and unrealized)		3.61			(0.58	)		1.11			(0.07	)		1.96
Total income (loss) from investment operations		3.83			(0.55	)		1.29			0.13			2.11
Less distributions:
Dividends from net investment income		(0.26	)		(0.21	)		(0.22	)		(0.43	)		(0.31	)
Distributions from net realized gains		(1.65	)		(1.17	)		(1.12	)		(0.80	)		-
Total distributions		(1.91	)		(1.38	)		(1.34	)		(1.23	)		(0.31	)
Net asset value, end of period	$	14.35		$	12.43		$	14.36		$	14.41		$	15.51
Total returnB		33.32	%		(4.41	)%		10.50	%		0.62	%		15.52	%
Ratios and supplemental data:
Net assets, end of period	$	85,251,213		$	68,284,615		$	96,065,263		$	107,677,984		$	124,143,894
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.99	%		1.20	%		0.97	%		0.95	%		0.89	%
Expenses, net of reimbursements and/or recoupments		0.99	%		1.20	%		0.97	%		0.95	%		0.89	%
Net investment income, before expense reimbursements and/or recoupments		1.07	%		1.47	%		1.92	%		1.62	%		1.48	%
Net investment income, net of reimbursements and/or recoupments		1.07	%		1.47	%		1.92	%		1.62	%		1.48	%
Portfolio turnover rate		37	%		82	%		68	%		28	%		32	%

^A  On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

See accompanying notes

71

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	13.35		$	15.34		$	15.29		$	16.38		$	14.46
Income (loss) from investment operations:
Net investment income		0.15			0.18	B		0.26			0.16			0.21
Net gains (losses) on investments (both realized and unrealized)		3.97			(0.81	)		1.11			(0.06	)		1.99
Total income (loss) from investment operations		4.12			(0.63	)		1.37			0.10			2.20
Less distributions:
Dividends from net investment income		(0.23	)		(0.19	)		(0.20	)		(0.39	)		(0.28	)
Distributions from net realized gains		(1.65	)		(1.17	)		(1.12	)		(0.80	)		-
Total distributions		(1.88	)		(1.36	)		(1.32	)		(1.19	)		(0.28	)
Net asset value, end of period	$	15.59		$	13.35		$	15.34		$	15.29		$	16.38
Total returnC		33.17	%		(4.65	)%		10.41	%		0.42	%		15.31	%
Ratios and supplemental data:
Net assets, end of period	$	2,120,450		$	1,760,622		$	6,039,168		$	6,174,284		$	10,944,675
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.16	%		1.36	%		1.14	%		1.12	%		1.08	%
Expenses, net of reimbursements and/or recoupments		1.16	%		1.36	%		1.14	%		1.12	%		1.08	%
Net investment income, before expense reimbursements and/or recoupments		0.91	%		1.29	%		1.76	%		1.45	%		1.29	%
Net investment income, net of reimbursements and/or recoupments		0.91	%		1.29	%		1.76	%		1.45	%		1.29	%
Portfolio turnover rate		37	%		82	%		68	%		28	%		32	%

^A  On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

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

See accompanying notes

72

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	12.39		$	14.33		$	14.38		$	15.48		$	13.69
Income (loss) from investment operations:
Net investment income		0.11			0.15			0.22			0.22			0.16
Net gains (losses) on investments (both realized and unrealized)		3.71			(0.71	)		1.07			(0.07	)		1.93
Total income (loss) from investment operations		3.82			(0.56	)		1.29			0.15			2.09
Less distributions:
Dividends from net investment income		(0.25	)		(0.21	)		(0.22	)		(0.45	)		(0.30	)
Distributions from net realized gains		(1.65	)		(1.17	)		(1.12	)		(0.80	)		-
Total distributions		(1.90	)		(1.38	)		(1.34	)		(1.25	)		(0.30	)
Net asset value, end of period	$	14.31		$	12.39		$	14.33		$	14.38		$	15.48
Total returnB		33.39	%		(4.49	)%		10.54	%		0.73	%		15.36	%
Ratios and supplemental data:
Net assets, end of period	$	13,922,687		$	12,863,938		$	16,228,685		$	18,121,273		$	21,934,880
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.02	%		1.21	%		1.01	%		0.91	%		0.99	%
Expenses, net of reimbursements and/or recoupments		1.02	%		1.21	%		1.01	%C		0.83	%		0.99	%
Net investment income, before expense reimbursements and/or recoupments		1.04	%		1.46	%		1.88	%		1.66	%		1.39	%
Net investment income, net of reimbursements and/or recoupments		1.04	%		1.46	%		1.88	%		1.74	%		1.39	%
Portfolio turnover rate		37	%		82	%		68	%		28	%		32	%

^A  On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

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

See accompanying notes

73

American Beacon Balanced Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	12.53		$	14.48		$	14.55		$	15.64		$	13.83
Income (loss) from investment operations:
Net investment income		0.04	B		0.05			0.10			0.13			0.08
Net gains (losses) on investments (both realized and unrealized)		3.72			(0.70	)		1.09			(0.09	)		1.92
Total income (loss) from investment operations		3.76			(0.65	)		1.19			0.04			2.00
Less distributions:
Dividends from net investment income		(0.15	)		(0.13	)		(0.14	)		(0.33	)		(0.19	)
Distributions from net realized gains		(1.65	)		(1.17	)		(1.12	)		(0.80	)		-
Total distributions		(1.80	)		(1.30	)		(1.26	)		(1.13	)		(0.19	)
Net asset value, end of period	$	14.49		$	12.53		$	14.48		$	14.55		$	15.64
Total returnC		32.32	%		(5.09	)%		9.63	%		0.04	%		14.50	%
Ratios and supplemental data:
Net assets, end of period	$	23,737,711		$	23,951,798		$	30,848,500		$	36,046,543		$	42,575,983
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.75	%		1.95	%		1.76	%		1.66	%		1.73	%
Expenses, net of reimbursements and/or recoupments		1.75	%		1.95	%		1.76	%D		1.54	%		1.73	%
Net investment income, before expense reimbursements and/or recoupments		0.32	%		0.72	%		1.13	%		0.91	%		0.63	%
Net investment income, net of reimbursements and/or recoupments		0.32	%		0.72	%		1.13	%		1.02	%		0.63	%
Portfolio turnover rate		37	%		82	%		68	%		28	%		32	%

^A  On January 23, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

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

See accompanying notes

74

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R5 ClassA
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	13.19		$	15.41		$	15.52		$	17.25		$	14.03
Income (loss) from investment operations:
Net investment income		0.23	B		0.33			0.25			0.21			0.16
Net gains (losses) on investments (both realized and unrealized)		7.29			(2.29	)		0.65			(1.34	)		3.28
Total income (loss) from investment operations		7.52			(1.96	)		0.90			(1.13	)		3.44
Less distributions:
Dividends from net investment income		(0.31	)		(0.26	)		(0.22	)		(0.16	)		(0.22	)
Distributions from net realized gains		-			-			(0.79	)		(0.44	)		-
Total distributions		(0.31	)		(0.26	)		(1.01	)		(0.60	)		(0.22	)
Net asset value, end of period	$	20.40		$	13.19		$	15.41		$	15.52		$	17.25
Total returnC		57.68	%		(13.03	)%		7.08	%		(6.89	)%		24.71	%
Ratios and supplemental data:
Net assets, end of period	$	74,512,300		$	72,565,048		$	168,201,120		$	248,752,034		$	265,934,589
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.08	%		0.95	%		0.93	%		0.85	%		0.89	%
Expenses, net of reimbursements and/or recoupments		0.94	%D		0.95	%		0.93	%		0.85	%		0.89	%
Net investment income, before expense reimbursements and/or recoupments		0.78	%B		1.45	%		1.40	%		1.19	%		1.06	%
Net investment income, net of reimbursements and/or recoupments		0.92	%B		1.45	%		1.40	%		1.19	%		1.06	%
Portfolio turnover rate		30	%		35	%		30	%		34	%		28	%

^A  Prior to February 28, 2020, the R5 Class was known as Institutional Class.

^B  Net investment income includes significant dividend payment from Qurate Retail Inc. amounting to $0.0381.

^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  Expense ratios may exceed stated expense caps in Note 2 due to the change in the contractual expense caps on February 28, 2021.

See accompanying notes

75

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	13.07		$	15.27		$	15.39		$	17.11		$	13.92
Income (loss) from investment operations:
Net investment income		0.17	A		0.19			0.22			0.19			0.15
Net gains (losses) on investments (both realized and unrealized)		7.27			(2.14	)		0.65			(1.32	)		3.25
Total income (loss) from investment operations		7.44			(1.95	)		0.87			(1.13	)		3.40
Less distributions:
Dividends from net investment income		(0.29	)		(0.25	)		(0.20	)		(0.15	)		(0.21	)
Distributions from net realized gains		-			-			(0.79	)		(0.44	)		-
Total distributions		(0.29	)		(0.25	)		(0.99	)		(0.59	)		(0.21	)
Net asset value, end of period	$	20.22		$	13.07		$	15.27		$	15.39		$	17.11
Total returnB		57.60	%		(13.08	)%		6.97	%		(6.96	)%		24.60	%
Ratios and supplemental data:
Net assets, end of period	$	49,952,999		$	48,840,223		$	84,763,978		$	96,799,413		$	100,190,167
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.15	%		1.03	%		0.98	%		0.93	%		0.97	%
Expenses, net of reimbursements and/or recoupments		1.02	%C		1.03	%		0.98	%		0.93	%		0.97	%
Net investment income, before expense reimbursements and/or recoupments		0.71	%A		1.37	%		1.36	%		1.11	%		0.98	%
Net investment income, net of reimbursements and/or recoupments		0.84	%A		1.37	%		1.36	%		1.11	%		0.98	%
Portfolio turnover rate		30	%		35	%		30	%		34	%		28	%

^A  Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0412.

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

^C  Expense ratios may exceed stated expense caps in Note 2 due to the change in the contractual expense caps on February 28, 2021.

See accompanying notes

76

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	13.32		$	15.56		$	15.65		$	17.40		$	14.14
Income (loss) from investment operations:
Net investment income		0.48	A		0.17			0.18			0.16			0.14
Net gains (losses) on investments (both realized and unrealized)		7.11			(2.20	)		0.69			(1.34	)		3.31
Total income (loss) from investment operations		7.59			(2.03	)		0.87			(1.18	)		3.45
Less distributions:
Dividends from net investment income		(0.16	)		(0.21	)		(0.17	)		(0.13	)		(0.19	)
Distributions from net realized gains		-			-			(0.79	)		(0.44	)		-
Total distributions		(0.16	)		(0.21	)		(0.96	)		(0.57	)		(0.19	)
Net asset value, end of period	$	20.75		$	13.32		$	15.56		$	15.65		$	17.40
Total returnB		57.34	%		(13.30	)%		6.79	%		(7.13	)%		24.52	%
Ratios and supplemental data:
Net assets, end of period	$	60,065,449		$	152,245,804		$	229,639,964		$	379,123,913		$	274,552,551
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.37	%		1.21	%		1.18	%		1.12	%		1.09	%
Expenses, net of reimbursements and/or recoupments		1.18	%C		1.21	%		1.18	%		1.12	%		1.09	%
Net investment income, before expense reimbursements and/or recoupments		0.74	%A		1.19	%		1.12	%		0.92	%		0.86	%
Net investment income, net of reimbursements and/or recoupments		0.93	%A		1.19	%		1.12	%		0.92	%		0.86	%
Portfolio turnover rate		30	%		35	%		30	%		34	%		28	%

^A  Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0322.

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

^C  Expense ratios may exceed stated expense caps in Note 2 due to the change in the contractual expense caps on February 28, 2021.

See accompanying notes

77

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	12.88		$	15.06		$	15.17		$	16.83		$	13.69
Income (loss) from investment operations:
Net investment income		0.06	A B		0.16			0.15			0.10			0.10
Net gains (losses) on investments (both realized and unrealized)		7.19			(2.16	)		0.66			(1.29	)		3.18
Total income (loss) from investment operations		7.25			(2.00	)		0.81			(1.19	)		3.28
Less distributions:
Dividends from net investment income		(0.20	)		(0.18	)		(0.13	)		(0.03	)		(0.14	)
Distributions from net realized gains		-			-			(0.79	)		(0.44	)		-
Total distributions		(0.20	)		(0.18	)		(0.92	)		(0.47	)		(0.14	)
Net asset value, end of period	$	19.93		$	12.88		$	15.06		$	15.17		$	16.83
Total returnC		56.71	%		(13.51	)%		6.50	%		(7.38	)%		24.10	%
Ratios and supplemental data:
Net assets, end of period	$	656,892		$	1,245,906		$	3,163,999		$	3,597,339		$	3,682,231
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.70	%		1.53	%		1.45	%		1.39	%		1.40	%
Expenses, net of reimbursements and/or recoupments		1.55	%D		1.53	%		1.45	%		1.39	%		1.40	%
Net investment income, before expense reimbursements and/or recoupments		0.21	%A		0.92	%		0.90	%		0.64	%		0.55	%
Net investment income, net of reimbursements and/or recoupments		0.36	%A		0.92	%		0.90	%		0.64	%		0.55	%
Portfolio turnover rate		30	%		35	%		30	%		34	%		28	%

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

^B  Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0260.

^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  Expense ratios may exceed stated expense caps in Note 2 due to the change in the contractual expense caps on February 28, 2021.

See accompanying notes

78

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	12.91		$	15.03		$	15.15		$	16.84		$	13.70
Income (loss) from investment operations:
Net investment income		0.16	A		0.23			0.49			0.18			0.13
Net gains (losses) on investments (both realized and unrealized)		7.14			(2.20	)		0.32			(1.36	)		3.18
Total income (loss) from investment operations		7.30			(1.97	)		0.81			(1.18	)		3.31
Less distributions:
Dividends from net investment income		(0.26	)		(0.15	)		(0.14	)		(0.07	)		(0.17	)
Distributions from net realized gains		-			-			(0.79	)		(0.44	)		-
Total distributions		(0.26	)		(0.15	)		(0.93	)		(0.51	)		(0.17	)
Net asset value, end of period	$	19.95		$	12.91		$	15.03		$	15.15		$	16.84
Total returnB		57.15	%		(13.31	)%		6.57	%		(7.32	)%		24.26	%
Ratios and supplemental data:
Net assets, end of period	$	3,639,123		$	2,767,845		$	3,748,595		$	12,080,510		$	18,170,218
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.45	%		1.30	%		1.35	%		1.25	%		1.27	%
Expenses, net of reimbursements and/or recoupments		1.30	%C		1.30	%		1.35	%		1.25	%		1.27	%
Net investment income, before expense reimbursements and/or recoupments		0.36	%A		1.09	%		0.94	%		0.78	%		0.69	%
Net investment income, net of reimbursements and/or recoupments		0.51	%A		1.09	%		0.94	%		0.78	%		0.69	%
Portfolio turnover rate		30	%		35	%		30	%		34	%		28	%

^A  Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0380.

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

^C  Expense ratios may exceed stated expense caps in Note 2 due to the change in the contractual expense caps on February 28, 2021.

See accompanying notes

79

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	12.39		$	14.49		$	14.60		$	16.27		$	13.26
Income (loss) from investment operations:
Net investment income (loss)		(0.27	)A		0.01			0.02			0.03			(0.03	)
Net gains (losses) on investments (both realized and unrealized)		7.17			(2.02	)		0.69			(1.26	)		3.11
Total income (loss) from investment operations		6.90			(2.01	)		0.71			(1.23	)		3.08
Less distributions:
Dividends from net investment income		(0.13	)		(0.09	)		(0.03	)		-			(0.07	)
Distributions from net realized gains		-			-			(0.79	)		(0.44	)		-
Total distributions		(0.13	)		(0.09	)		(0.82	)		(0.44	)		(0.07	)
Net asset value, end of period	$	19.16		$	12.39		$	14.49		$	14.60		$	16.27
Total returnB		55.99	%		(13.99	)%		5.94	%		(7.85	)%		23.27	%
Ratios and supplemental data:
Net assets, end of period	$	2,417,639		$	2,932,329		$	4,349,946		$	5,840,412		$	6,520,983
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		2.17	%		2.05	%		2.02	%		1.87	%		2.04	%
Expenses, net of reimbursements and/or recoupments		2.05	%C		2.05	%		2.02	%		1.87	%		2.04	%
Net investment income (loss), before expense reimbursements		(0.30	)%A		0.35	%		0.32	%		0.17	%		(0.09	)%
Net investment income (loss), net of reimbursements		(0.18	)%A		0.35	%		0.32	%		0.17	%		(0.09	)%
Portfolio turnover rate		30	%		35	%		30	%		34	%		28	%

^A  Net investment income includes significant dividend payment from Quarte Retail, Inc. amounting to $0.0368.

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

^C  Expense ratios may exceed stated expense caps in Note 2 due to the change in the contractual expense caps on February 28, 2021.

See accompanying notes

80

American Beacon Mid-Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R6 Class
	Year Ended October 31,									February 28, 2018A to October 31, 2018
	2021			2020			2019
Net asset value, beginning of period	$	13.21		$	15.42		$	15.52		$	16.94
Income from investment operations:
Net investment income		0.15	B		0.28			0.20			0.10
Net gains (losses) on investments (both realized and unrealized)		7.40			(2.23	)		0.71			(1.52	)
Total income (loss) from investment operations		7.55			(1.95	)		0.91			(1.42	)
Less distributions:
Dividends from net investment income		(0.32	)		(0.26	)		(0.22	)		-
Distributions from net realized gains		-			-			(0.79	)		-
Total distributions		(0.32	)		(0.26	)		(1.01	)		-
Net asset value, end of period	$	20.44		$	13.21		$	15.42		$	15.52
Total returnC		57.80	%		(12.93	)%		7.15	%		(8.38	)%D
Ratios and supplemental data:
Net assets, end of period	$	12,532,694		$	8,239,279		$	2,253,328		$	191,772
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.05	%		0.96	%		0.90	%		3.09	%E
Expenses, net of reimbursements and/or recoupments		0.89	%F		0.87	%		0.83	%		0.88	%E
Net investment income (loss), before expense reimbursements and/or recoupments		0.74	%		1.34	%		1.51	%		(0.88	)%E
Net investment income, net of reimbursements and/or recoupments		0.90	%		1.43	%		1.58	%		1.32	%E
Portfolio turnover rate		30	%		35	%		30	%		34	%D

^A  Commencement of operations.

^B  Net investment income includes significant dividend payment from Qurate Retail, Inc. amounting to $0.0467.

^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 the change in the contractual expense caps on February 28, 2021.

See accompanying notes

81

American Beacon Funds^SM

Federal Tax Information

October 31, 2021 (Unaudited)

Certain tax information regarding the Funds is required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2021. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2021.

The Funds designated the following items with regard to distributions paid during the fiscal year ended October 31, 2021. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends-Received Deduction:

Balanced	69.57	%
Mid-Cap Value	100.00	%

Qualified Dividend Income:

Balanced	79.62	%
Mid-Cap Value	100.00	%

Long-Term Capital Gain Distributions:

Balanced	$	21,379,448
Mid-Cap Value		-

Short-Term Capital Gain Distributions:

Balanced	$	0
Mid-Cap Value	$	0

Shareholders will receive notification in January 2022 of the applicable tax information necessary to prepare their 2021 income tax returns.

82

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

Renewal and Approval of Management Agreement and Investment Advisory Agreements

At meetings held on May 17, 2021 and June 8-9, 2021 (collectively, the “Meetings”) via videoconference, the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 9, 2021 meeting, approved the renewal of:

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

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

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

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

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Funds as well as information from the Manager and the subadvisors. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Trustees received and evaluated such information as they deemed necessary, including the impact of the COVID-19 pandemic on the operations of the Manager and the subadvisors. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to each Fund.

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

A firm may not have been able to, or opted not to, provide information in response to certain information requests, in which case the Board conducted its evaluation of the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations.

Provided below is an overview of certain factors the Board considered in connection with its decision to approve the renewal of the Agreements. The Board did not identify any particular information that was most relevant to its consideration of whether to approve the renewal of each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal of investment advisory contracts, such as the Agreements, and related regulatory guidelines. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the approval of the renewal of each Agreement was in the best interests of the Funds and their shareholders.

83

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

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

In determining whether to approve the renewal of the Agreements, the Board considered each Fund’s investment management and subadvisory relationships separately. In each instance, the Board considered, among other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of the Funds and the subadvisors for the Funds; (3) the costs incurred by the Manager in rendering services to the Funds and its resulting profits or losses; (4) comparisons of services and fee rates with contracts entered into by the Manager or the subadvisors or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisors from their relationship with the Funds.

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

With respect to the renewal of each Investment Advisory Agreement, the Board considered, among other factors: the level of staffing and the size of the subadvisor; the adequacy of the resources committed to the Funds by each subadvisor; the financial stability of each subadvisor; and representations made by each subadvisor regarding its compliance program. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and each subadvisor were appropriate for each Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of each Fund, relative to its Broadridge Performance Universe, Morningstar Category, and benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding its independent methodology for selecting each Fund’s Broadridge Performance Universe. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by each subadvisor regarding the performance of its portion of the relevant Fund relative to the performance of a composite of comparable investment accounts managed by the subadvisor and the relevant Fund’s benchmark index. In addition, the Board considered the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to each Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Costs of the Services Provided to the Funds and the Profits Realized by the Manager from its Relationship with the Funds. In analyzing the costs of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager earning a profit with respect to each Fund before and after the payment of distribution-related expenses by the Manager. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Funds, the Manager represented that, among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility

84

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

and regulatory requirements associated with managing the Funds. The Board also noted that, for all share classes of the Mid-Cap Fund, the Manager is waiving fees and/or reimbursing expenses

The Board further considered that, with respect to each Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager. In addition, the Board considered that the Manager receives fees for managing the portion of the Balanced Fund with respect to which the Manager has not delegated day-to day management to a subadvisor and for administering and overseeing the securities lending program on behalf of each Fund. The Board also noted that certain share classes of the Funds maintain higher expense ratios in order to compensate third-party financial intermediaries.

In analyzing the fee rates charged by each subadvisor in connection with its investment advisory services to a Fund, the Board considered representations made by the subadvisors that each Fund’s subadvisory fee rate schedule generally was favorable compared to other comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board noted that subadvisors may not account for their profits on an account-by-account basis and that different firms likely employ different methodologies in connection with these calculations.

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

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as each Fund grows and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that, with respect to each subadvisor, the Manager has negotiated breakpoints for the subadvisory fee rate schedule. The Board considered that the current assets of the Balanced Fund allocated to Barrow did not exceed the threshold necessary to reach the first subadvisory fee rate breakpoint and the current assets of the Mid-Cap Fund allocated to WEDGE and Barrow did not exceed the threshold necessary to reach the first subadvisory fee rate breakpoints.

In addition, the Board noted the Manager’s representation that the Management Agreement contains fee schedule breakpoints at higher asset levels with respect to each Fund, except for the portion of the Balanced Fund with respect to which the Manager has not delegated day-to-day management to a subadvisor. The Board considered that the Funds’ current assets did not exceed the threshold necessary to reach the first management fee breakpoint. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for each Fund provide for a reasonable sharing of benefits from any economies of scale with each Fund.

Benefits Derived from the Relationship with the Funds. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisors as a result of the advisory relationships with the Funds, including greater exposure in the marketplace with respect to the Manager’s or a subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisors. The Board also considered that the Manager may invest the Funds’ cash balances and cash collateral provided by the borrowers of the Funds’ securities in the American Beacon U.S. Government Money Market Select Fund, which the Manager manages directly, and for which the Manager receives a fee. In addition, the Board noted that each subadvisor benefits from soft dollar arrangements for proprietary and/or third-party research. Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisors by virtue of their relationships with the Funds appear to be fair and reasonable.

85

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

Additional Considerations and Conclusions with Respect to Each Fund

The performance comparisons below were made for each Fund’s R5 Class shares relative to the Fund’s Broadridge Performance Universe and Morningstar Category. With respect to the Broadridge Performance Universe, the 1^st Quintile represents the top 20 percent of the universe based on performance, and the 5^th Quintile represents the bottom 20 percent of the universe based on performance. References to each Fund’s Broadridge Performance Universe are to the respective universe of mutual funds with comparable investment classifications and objectives as determined by Broadridge. The performance of individual firms was calculated by the Manager based on information provided by the Funds’ custodian.

In reviewing the performance, the Board viewed longer-term performance over a full market cycle, typically five years or longer, as the most important consideration because relative performance over shorter periods may be significantly impacted by market or economic events and not necessarily reflective of subadvisor skill.

The expense comparisons below were made for each Fund’s R5 Class shares relative to the Fund’s Broadridge Expense Universe and Broadridge Expense Group, and Y Class shares relative to the Fund’s Morningstar Fee Level universe. The 1^st Quintile represents the lowest 20 percent of the universe or group based on lowest total expense, and the 5^th Quintile represents the highest 20 percent of the universe or group based on highest total expense. References to each Fund’s Expense Group and Expense Universe are to the respective group or universe of comparable mutual funds as determined by Broadridge. A Broadridge Expense Group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge Expense Universe includes all funds with comparable investment classifications/objectives and similar operating structures to that of the share class under review for each Fund, including funds in the Broadridge Expense Group. The Broadridge expense comparisons are based on the most recent audited financial information publicly available for a Fund as of December 31, 2020. References to each Fund’s Morningstar Fee Level ranking are to the institutional share class of comparable mutual funds as determined by Morningstar.

The Board considered each Fund’s Morningstar fee level category with the 1^st Quintile representing the lowest 20 percent of the category constituents and the 5^th Quintile representing the highest 20 percent of the category in terms of total expense.

In reviewing expenses, the Board considered the positive impact of fee waivers and the Manager’s agreement to continue the fee waivers. The Board also considered that, in connection with the change in the name of the Funds’ Institutional Class shares, the share class used for the Funds’ Morningstar Fee Level comparisons had changed from the R5 Class shares to the Y Class shares, which may have resulted in a less favorable Morningstar Fee Level Ranking for the Funds than in prior years.

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

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

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

Compared to Broadridge Expense Group	4th Quintile
Compared to Broadridge Expense Universe	5th Quintile
Morningstar Fee Level Ranking	3rd Quintile

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2020)

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

86

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

The Board noted that American Beacon Advisors, Inc. (“AmBeacon”) receives an additional fee under the Management Agreement for managing an allocation of the Balanced Fund. In considering the renewal of the Management Agreement with AmBeacon and the Investment Advisory Agreements with Barrow, Hotchkis and AmBeacon, the Board considered that the diversification of investment strategies facilitated by the Balanced Fund’s multi-manager structure permits the Balanced Fund to mitigate the risks associated with a single subadvisor. The Board also considered the following additional factors:

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2020)

Barrow	5 Years	4	th Quintile
Hotchkis*	5 Years	3	rd Quintile
AmBeacon**	5 Years	3	rd Quintile

* Hotchkis equity value-only return compared to the Broadridge large cap value Performance Universe

** AmBeacon bond-only return compared to Broadridge core bond Performance Universe

The Board also considered: (1) that the Funds included in the Broadridge Performance Universe are managed pursuant to a variety of investment styles, and the Balanced Fund may underperform when a value investment style is out of favor; (2) the Manager and Barrow invest the Balanced Fund’s fixed income portfolio exclusively in investment grade debt securities while the funds in the Broadridge Performance Universe may invest in high yield debt securities; (3) information provided by each subadvisor regarding fee rates charged for managing assets in the same or a similar strategy or strategies as the subadvisor manages its allocation of the Balanced Fund; (4) that the Balanced Fund’s management fee and gross expense ratio for all share classes for its prior fiscal year included expenses that were not expected to recur in future years; (5) the recent termination of a prior subadvisor, and the reallocation of assets among the Balanced Fund’s remaining subadvisors; and (6) the Manager’s recommendation to continue to retain each subadvisor.

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

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

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

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

Compared to Broadridge Expense Group	4th Quintile
Compared to Broadridge Expense Universe	5th Quintile
Morningstar Fee Level Ranking	4th Quintile

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2020)

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

In considering the renewal of the Investment Advisory Agreements with Barrow, Pzena and WEDGE, the Board considered that the diversification of investment strategies facilitated by the Mid-Cap Fund’s multi-manager

87

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

structure permits the Mid-Cap Fund to mitigate the risks associated with a single subadvisor. The Board also considered the following additional factors:

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2020)

Barrow	5 Years	3	rd Quintile
Pzena	5 Years	1	st Quintile
WEDGE	5 Years	4	th Quintile

The Board also considered: (1) the Manager’s representation that the Mid-Cap Fund’s Broadridge Expense Group and Expense Universe are comprised principally of single-manager funds, which typically reach breakpoints in their subadvisory fee schedules sooner than multi-manager funds that pay their subadvisors directly; (2) information provided by each subadvisor regarding fee rates charged for managing assets in the same or a similar strategy as the subadvisor manages its allocation of the Mid-Cap Fund; (3) discussions regarding potential future options for enhancing the Fund’s performance; and (4) the Manager’s recommendation to continue to retain each subadvisor.

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

88

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 funds in the fund complex that includes the Trust, the American Beacon Select Funds, and the American Beacon Institutional Funds Trust. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Eugene J. Duffy (67)**	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial Administrative Corporation (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-2016); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (51)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Joseph B. Armes (59)	Trustee since 2015	Director, Switchback Energy Acquisition (2019-2021); 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); 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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Gerard J. Arpey (63)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Director, The Home Depot, Inc. (2015-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

89

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (60)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Claudia A. Holz (64)	Trustee since 2018	Partner, KPMG LLP (1990–2017); Independent Director, Blue Owl Capital Inc. (2021-Present); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Douglas A. Lindgren (59)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Barbara J. McKenna, CFA (58)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

90

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (66)	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); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-2020); Director, ARK Investment Management LLC (2016-2020); 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); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, 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 (2015-2020); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-2021); President, American Beacon Apollo Total Return Fund (2018-2021).

91

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 (62)	VP, Secretary and Chief Legal Officer since 2006	Senior Vice President (2021-Present), Vice President (2006-2021), Secretary and General Counsel (2006-Present), American Beacon Advisors, Inc.; Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015–Present); Senior Vice President (2021-Present), Vice President (2015-2021), Secretary and General Counsel (2015-Present), Resolute Investment Managers, Inc.; Secretary, Resolute Investment Distributors, Inc. (2017-Present); Senior Vice President (2021-Present), Vice President (2017-2021), Secretary and General Counsel (2017-Present), Resolute Investment Services, Inc.; Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-2020); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, Green Harvest Asset Management (2019-2021); 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 (2018-2021); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-2021).
Brian E. Brett (61)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), 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); 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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Paul B. Cavazos (52)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Erica Duncan (51)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).

92

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 (60)	VP since 2021 Principal Accounting Officer and Treasurer (2010-2021)	Senior Vice President (2021-Present), 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); Senior Vice President (2021-Present), Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017); Senior Vice President (2021-Present); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-2020); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Vice President (2021-Present), Principal Accounting Officer (2017-2021) and Treasurer (2010-2021), American Beacon Select Funds; Vice President (2021–Present), Principal Accounting Officer and Treasurer (2017-2021), American Beacon Institutional Funds Trust; Vice President (2021), Principal Accounting Officer and Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Vice President (2021), Principal Accounting Officer and Treasurer, American Beacon Apollo Total Return Fund (2018-2021).
Terri L. McKinney (57)	VP since 2010	Senior Vice President (2021-Present), Vice President (2009-2021), American Beacon Advisors, Inc.; Senior Vice President (2021–Present); Vice President (2017-2021), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2018-Present), Resolute Investment Services, Inc; Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Jeffrey K. Ringdahl (46)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (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; Trustee, American Beacon NextShares Trust (2015-2020); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).

93

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
Samuel J. Silver (58)	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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Christina E. Sears (50)	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, Green Harvest Asset Management, LLC (2019-Present); Chief Compliance Officer, RSW Investments Holdings, LLC (2019-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Sonia L. Bates (64)	Principal Accounting Officer and Treasurer since 2021 Assistant Treasurer (2011-2021)	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); 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); Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2011-2021), American Beacon Select Funds; Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2017-2021), American Beacon Institutional Funds Trust; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Apollo Total Return Fund.
Shelley L. Dyson (51)	Assistant Treasurer since 2021	Assistant Treasurer, American Beacon Select Funds (2021-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2021-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Treasurer, American Beacon Apollo Total Return Fund (2021).
Shelley D. Abrahams (46)	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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Rebecca L. Harris (54)	Assistant Secretary since 2010	Senior Vice President (2021-Present), Vice President (2011-Present), American Beacon Advisors, Inc.; Senior Vice President (2021-Present), Vice President (2017-Present), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2015-Present), Resolute Investment Services; Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).

94

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
Teresa A. Oxford (63)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-2021); Assistant Secretary, Resolute Investment Managers, Inc. (2017-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-2020); Assistant Secretary, Continuous Capital, LLC (2020-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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Michael D. Jiang (36)	Assistant Secretary since 2021	Assistant Secretary (2021-Present), Resolute Investment Distributors, Inc.; Associate General Counsel (2021-Present), Resolute Investment Services, Inc.; Vice President (2018-2021), The Northern Trust Company; Second Vice President (2015-2018), The Northern Trust Company. Assistant Secretary, American Beacon Select Funds (2021-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2021-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2021).

* 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. Duffy is being deemed to be an “interested person” of the Trust, as defined by the Investment Company Act of 1940, as amended, by virtue of his position with Mesirow Financial, Inc., a broker-dealer.

95

American Beacon Funds^SM

Privacy Policy

October 31, 2021 (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.

96

Delivery of Documents

Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.

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 quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

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

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

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

AR 10/21

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.

GARCIA HAMILTON QUALITY BOND FUND RISKS

The use of fixed-income securities entails interest rate and credit risks. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal; and the decline in an issuer’s credit rating can cause the price of its bonds to go down. The Fund’s incorporation of environmental, social and/or governance (ESG) considerations in its investment strategy may cause it to underperform funds that do not incorporate these considerations. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

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

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

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

American Beacon Funds October 31, 2021

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	6
Report of Independent Registered Public Accounting Firm	8
Schedule of Investments:
American Beacon Garcia Hamilton Quality Bond Fund	9
Financial Statements	12
Notes to Financial Statements	15
Financial Highlights:
American Beacon Garcia Hamilton Quality Bond Fund	32
Federal Tax Information	36
Disclosure Regarding Approval of the Management and Investment Advisory Agreements	37
Trustees and Officers of the American Beacon Funds	41
Privacy Policy	48

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   As Warren E. Buffett, the “Oracle of Omaha” and billionaire chairman and CEO of Berkshire Hathaway, once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”   That is to say, before we can enjoy the fruits of our labor, we must first devote our attention to the careful planning and cultivation of our estates. To achieve a strong yield requires time, diligence and patience – and there are no guarantees the seeds we plant today will thrive or result in a plentiful harvest. This can be said not only about the actions we undertake in our gardening or landscaping, but also those we initiate in our investment portfolios – especially as we take into account the potential for harm caused by natural disasters and other catastrophes, such as the COVID-19 pandemic.

Because none of us – not even the Oracle of Omaha – has a crystal ball, to help give your investment portfolio the greatest chance for success over the long term, we encourage you to work with financial professionals to develop your personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand short-term crises. With continuous nurturing, you will be better positioned to achieve enduring financial success.

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. 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 financial rewards.

Thank you for entrusting your financial success with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Domestic Bond Market Overview

October 31, 2021 (Unaudited)

In the U.S. fixed-income markets, the investment-grade Bloomberg U.S. Aggregate Bond Index (the “Index”) declined, returning -0.48% for the 12-month period ended October 31, 2021. Within the Index, the credit component returned 1.90%, agency-backed mortgages returned -0.58% and U.S. Treasuries returned -2.45%. Returns in the credit sectors outperformed during the period as spreads continued to narrow following the economic recovery. Treasury yields were higher by period end, causing negative total returns, as investors began to see through the pandemic to more normalized interest rate levels.

Lower quality outperformed with triple-B-rated corporate bonds returning 3.52%, single-A up 0.59% and double-A up 1.22%, according to the Index. The highest-returning sectors included: Energy, up 7.92%; Transportation, up 3.61%; and Capital Goods, up 3.26%. The lowest-returning sectors included: Technology, up 0.45%; Financials, up 1.38%; and Utilities, up 1.40%.

Economic news throughout the year was mostly positive, despite periodic disruptions due to the COVID-19 pandemic. In late 2020, the earlier-than-expected arrival of vaccines led to business reopenings and expectations for strong economic growth. By late 2021, consumer spending was solid, driven primarily by spending on housing and retail sales. The labor market steadily added new jobs, and generous unemployment benefits aided those temporarily out of work.

Following the rebounding economy, inflation also picked up during the period, reflecting supply chain disruptions and pent-up consumer demand. While inflation concerns mounted, the Federal Reserve viewed the price increases as transitory and argued that slack in the labor market, low manufacturing capacity utilization rates and an economy still running below potential would keep inflation muted. The 10-year U.S. Treasury yield ended the period at 1.60% (up from 0.9% at the beginning of the period), suggesting that investors were not particularly worried about long-term inflation either.

With regard to monetary policy, the Federal Reserve maintained the federal funds rate in a 0% to 0.25% range during the period and continued to purchase $80 billion in Treasuries and $40 billion in agency mortgage-backed securities each month. As Federal Open Market Committee members began to feel better about the economy, they discussed plans for tapering quantitative easing. At period end, markets were anticipating that the reduction in quantitative easing would likely begin in late 2021 and that the federal funds rate increases would arrive in late 2022 or early 2023.

2

American Beacon Garcia Hamilton Quality Bond Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

The Investor Class of the American Beacon Garcia Hamilton Quality Bond Fund (the “Fund”) returned -1.11% for the twelve months ended October 31, 2021. The Bloomberg U.S. Aggregate Bond Index (the “Index”) returned -0.48% for the same period.

Comparison of Changes in Value of a $10,000 Investment for the period 4/4/2016 through 10/31/2021

Total Returns for the Period ended October 31, 2021
	Ticker	1 Year			3 Year			5 Year			Since Inception 4/4/2016			Value of  $10,000 4/4/2016- 10/31/2021
R5 Class (1,4)	GHQIX		(0.84	)%		2.73	%		1.96	%		1.82	%		$	11,059
Y Class (1,4)	GHQYX		(0.81	)%		2.67	%		1.89	%		1.74	%		$	11,012
Investor Class (1,4)	GHQPX		(1.11	)%		2.38	%		1.58	%		1.46	%		$	10,841
R6 Class (1,3,4)	GHQRX		(0.70	)%		2.77	%		1.99	%		1.84	%		$	11,071
Bloomberg U.S. Aggregate Bond Index (2)			(0.48	)%		5.63	%		3.10	%		3.11	%		$	11,862

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

2. The Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. BLOOMBERG^® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”). Bloomberg or Bloomberg’s licensors, own all proprietary rights in the Bloomberg Indices. Bloomberg does not approve or endorse this material, or guarantee the accuracy or completeness of any information herein, or make any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, shall not have any liability or responsibility for injury or damages arising in connection therewith. One cannot directly invest in an index.

3

American Beacon Garcia Hamilton Quality Bond Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

3. Fund performance for the three-year, five-year and since inception periods represent the returns achieved by the R5 Class from 4/4/16 through 2/28/19, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 4/4/16.

4. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, and R6 Class shares were 0.68%, 0.74%, 1.20%, and 0.64%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund underperformed due primarily to its underweight exposure to the corporate bond market, which posted the highest returns in the Index during the period as credit spreads continued to narrow. Slightly offsetting this was outperformance from the Fund’s low duration of approximately 2.5 years, as compared to over 6 years for the Index, which helped as treasury yields rose during the period.

The Fund’s underweight exposure to corporate bonds reflects its high-quality and low-volatility approach to credit investing that avoids securities with maturities over ten years and avoids triple-B rated issuers. During the period, the longest maturity and lowest quality securities in the Index significantly outperformed reflecting strong investor demand for yield in the historic-low interest rate environment. While these securities tend to outperform in strong credit markets, they typically underperform and experience reduced liquidity in volatile markets when the Fund seeks to benefit from its quality advantage.

The Fund’s short duration, however, contributed to performance as markets began to prepare for the Federal Reserve Bank’s tapering of quantitative easing and, ultimately, a rise in the Federal Funds rate. Increased vaccination rates and consumer spending led to an economic recovery and higher inflation which drove treasury yields higher during the period. The Fund’s short duration had been a detractor from performance as interest rates declined following the initial Covid outbreak; however, investors finally began to see through the pandemic and anticipate a normalization of interest rates.

The Fund’s overweight position during the period was in agency mortgage-backed securities. As with corporates, the Fund also avoids the longest maturity mortgages as they are the most volatile within their sector. Rather, the Fund invests in high-coupon, low-duration mortgages with 20-years or less to maturity. During the period, these lower-duration mortgages outperformed as they were less exposed to rising yields further out the curve. While the Fund’s overweight position in mortgages outperformed treasuries, it underperformed corporates. However, near period end, the Fund’s mortgage holdings began to benefit from a slowdown in prepayment activity as interest rates rose.

The primary components of the Fund’s strategy are to actively manage duration, sector allocation and yield-curve exposures based on top-down views of the economy. The Fund invests in high-quality, low-volatility securities to provide the benefit of fixed-income investing when investors need it most. No derivatives, leverage, foreign currency or high-yield bonds are used in the Fund’s strategy.

Top Ten Holdings (% Net Assets)
Federal National Mortgage Association, 4.500%, Due 6/1/2039		3.5
U.S. Treasury Notes/Bonds, 2.250%, Due 4/15/2022		3.3
American Express Co., 0.742%, Due 8/1/2022, (3-mo. USD LIBOR + 0.610%)		3.2
Federal Home Loan Mortgage Corp., 3.000%, Due 2/1/2035		3.2
Morgan Stanley, 0.731%, Due 4/5/2024, (SOFR + 0.616%)		2.9
Federal National Mortgage Association, 4.000%, Due 2/1/2034		2.8
Federal National Mortgage Association, 3.000%, Due 7/1/2040		2.8
John Deere Capital Corp., 0.595%, Due 9/8/2022, (3-mo. USD LIBOR + 0.480%)		2.8
Wells Fargo & Co., 4.478%, Due 4/4/2031, (SOFR + 4.032%)		2.8
Federal Home Loan Mortgage Corp., 4.000%, Due 12/1/2034		2.6
Total Fund Holdings	44

4

American Beacon Garcia Hamilton Quality Bond Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

Sector Allocation (% Investments)
U.S. Agency Mortgage-Backed Obligations	57.3
Financial	20.4
U.S. Treasury Obligations	9.6
Industrial	5.2
Technology	3.7
Utilities	1.9
Communications	1.0
U.S. Government Agency Obligations	0.9

5

American Beacon Garcia Hamilton Quality Bond Fund^SM

Expense Examples

October 31, 2021 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees, if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2021 through October 31, 2021.

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 R5 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 R5 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 Garcia Hamilton Quality Bond Fund^SM

Expense Examples

October 31, 2021 (Unaudited)

American Beacon Garcia Hamilton Quality Bond Fund
	Beginning Account Value 5/1/2021		Ending Account Value 10/31/2021		Expenses Paid During Period 5/1/2021-10/31/2021*
R5 Class
Actual		$1,000.00		$995.30		$2.26
Hypothetical**		$1,000.00		$1,022.94		$2.29
Y Class
Actual		$1,000.00		$996.00		$2.57
Hypothetical**		$1,000.00		$1,022.64		$2.60
Investor Class
Actual		$1,000.00		$994.50		$4.17
Hypothetical**		$1,000.00		$1,021.02		$4.23
R6 Class
Actual		$1,000.00		$995.50		$2.06
Hypothetical**		$1,000.00		$1,023.14		$2.09

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.45%, 0.51%, 0.83%, and 0.41% for the R5, Y, Investor, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

7

American Beacon Garcia Hamilton Quality Bond Fund^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of American Beacon Garcia Hamilton Quality Bond Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of American Beacon Garcia Hamilton Quality Bond Fund (the “Fund”) (one of the funds constituting American Beacon Funds (the “Trust”)), including the schedule of investments, as of October 31, 2021, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting American Beacon Funds) at October 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

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

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

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

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

Dallas, Texas

December 30, 2021

8

American Beacon Garcia Hamilton Quality Bond Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
CORPORATE OBLIGATIONS - 31.66%
Communications - 1.02%
Media - 1.02%
Walt Disney Co., 7.430%, Due 10/1/2026		$	3,037,000		$	3,873,337
Financial - 20.06%
Banks - 15.81%
Bank of America Corp., 3.974%, Due 2/7/2030, (3-mo. USD LIBOR + 1.210%)A			6,113,000			6,796,410
Citigroup, Inc., 3.980%, Due 3/20/2030, (3-mo. USD LIBOR + 1.338%)A			6,030,000			6,726,895
Goldman Sachs Group, Inc.,
1.124%, Due 7/24/2023, (3-mo. USD LIBOR + 1.000%)A			7,840,000			7,878,470
4.223%, Due 5/1/2029, (3-mo. USD LIBOR + 1.301%)A			8,600,000			9,634,774
JPMorgan Chase & Co., 2.083%, Due 4/22/2026, (SOFR + 1.850%)A			7,450,000			7,599,304
Morgan Stanley, 0.731%, Due 4/5/2024, (SOFR + 0.616%)A			11,125,000			11,112,448
Wells Fargo & Co., 4.478%, Due 4/4/2031, (SOFR + 4.032%)A			9,125,000			10,554,144
						60,302,445
Diversified Financial Services - 4.25%
American Express Co., 0.742%, Due 8/1/2022, (3-mo. USD LIBOR + 0.610%)A			12,120,000			12,168,939
American Express Credit Corp., 0.819%, Due 3/3/2022, (3-mo. USD LIBOR + 0.700%)A			4,029,000			4,035,933
						16,204,872
Total Financial						76,507,317
Industrial - 5.08%
Machinery - Diversified - 2.76%
John Deere Capital Corp., 0.595%, Due 9/8/2022, (3-mo. USD LIBOR + 0.480%)A			10,478,000			10,516,142
Transportation - 2.32%
United Parcel Service, Inc., 0.581%, Due 4/1/2023, (3-mo. USD LIBOR + 0.450%)A			8,849,000			8,875,227
Total Industrial						19,391,369
Technology - 3.60%
Computers - 2.20%
International Business Machines Corp., 7.000%, Due 10/30/2025			6,860,000			8,380,014
Semiconductors - 1.40%
Intel Corp., 3.400%, Due 3/25/2025			5,000,000			5,358,560
Total Technology						13,738,574
Utilities - 1.90%
Electric - 1.90%
Duke Energy Progress LLC, 0.305%, Due 2/18/2022, Series A, (3-mo. USD LIBOR + 0.180%)A			7,270,000			7,267,353
Total Corporate Obligations (Cost $121,092,671)						120,777,950
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 56.44%
Federal Home Loan Mortgage Corp.,
4.000%, Due 12/1/2034			9,287,020			9,848,192
3.000%, Due 2/1/2035			11,746,120			12,339,121
4.000%, Due 2/1/2039			6,678,028			7,189,113
4.000%, Due 4/1/2039			8,928,325			9,653,893
3.500%, Due 8/1/2039			7,758,863			8,252,921
3.500%, Due 10/1/2039			5,882,277			6,243,543
3.000%, Due 1/1/2040			5,652,417			5,922,376
3.500%, Due 8/1/2040			7,303,254			7,747,090

See accompanying notes

9

American Beacon Garcia Hamilton Quality Bond Fund^SM

Schedule of Investments

October 31, 2021

	Principal Amount			Fair Value
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS - 56.44% (continued)
Federal National Mortgage Association,
3.500%, Due 9/1/2033		$	8,164,859		$	8,670,658
4.000%, Due 2/1/2034B			10,133,479			10,736,308
4.000%, Due 6/1/2034B			9,010,902			9,601,298
3.500%, Due 5/1/2035B			8,757,681			9,285,388
3.500%, Due 3/1/2037			5,954,598			6,369,876
3.500%, Due 4/1/2037			4,099,382			4,380,654
3.000%, Due 10/1/2037			7,830,765			8,265,718
3.500%, Due 5/1/2038B			4,265,122			4,554,024
4.000%, Due 5/1/2039			5,287,138			5,697,909
4.500%, Due 6/1/2039B			12,355,309			13,470,223
4.000%, Due 9/1/2039			8,713,687			9,423,467
3.500%, Due 10/1/2039			7,260,903			7,680,617
3.500%, Due 11/1/2039B			6,180,571			6,530,164
3.500%, Due 3/1/2040B			4,248,022			4,499,051
3.500%, Due 4/1/2040B			7,528,042			7,965,913
3.000%, Due 7/1/2040B			10,230,434			10,669,335
3.000%, Due 8/1/2040B			6,756,666			7,067,577
4.000%, Due 8/1/2040B			6,402,801			6,886,508
4.000%, Due 6/1/2049B			5,904,889			6,310,708
Total U.S. Agency Mortgage-Backed Obligations (Cost $214,860,712)						215,261,645
U.S. GOVERNMENT AGENCY OBLIGATIONS - 0.92% (Cost $3,505,000)
Federal Agricultural Mortgage Corp., 0.024%, Due 1/25/2022, (3-mo. USD LIBOR - 0.100%)A			3,505,000			3,505,287
SHORT-TERM INVESTMENTS - 9.51%
U.S. Treasury Obligations - 9.51%
U.S. Treasury Notes/Bonds,
2.500%, Due 2/15/2022			8,750,000			8,812,204
2.375%, Due 3/15/2022			5,525,000			5,572,692
2.250%, Due 4/15/2022			12,630,000			12,752,846
1.750%, Due 6/15/2022			9,035,000			9,127,468
Total U.S. Treasury Obligations						36,265,210
Total Short-Term Investments (Cost $36,273,468)						36,265,210
TOTAL INVESTMENTS - 98.53% (Cost $375,731,851)						375,810,092
OTHER ASSETS, NET OF LIABILITIES - 1.47%						5,601,222
TOTAL NET ASSETS - 100.00%					$	381,411,314
Percentages are stated as a percent of net assets.

^A Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, SOFR, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on October 31, 2021.

^B 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.

LIBOR - London Interbank Offered Rate.

LLC - Limited Liability Company.

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

SOFR - Secured Overnight Financing Rate.

USD - United States Dollar.

See accompanying notes

10

American Beacon Garcia Hamilton Quality Bond Fund^SM

Schedule of Investments

October 31, 2021

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2021, the investments were classified as described below:

Garcia Hamilton Quality Bond Fund	Level 1		Level 2		Level 3		Total
Assets
Corporate Obligations	$	-	$	120,777,950	$	-	$	120,777,950
U.S. Agency Mortgage-Backed Obligations		-		215,261,645		-		215,261,645
U.S. Government Agency Obligations		-		3,505,287		-		3,505,287
Short-Term Investments		-		36,265,210		-		36,265,210
Total Investments in Securities - Assets	$	-	$	375,810,092	$	-	$	375,810,092

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2021, there were no transfers into or out of Level 3.

See accompanying notes

11

American Beacon Garcia Hamilton Quality Bond Fund^SM

Statement of Assets and Liabilities

October 31, 2021

Assets:
Investments in unaffiliated securities, at fair value†	$	375,810,092
Cash		39,404,521
Interest receivable		1,385,127
Receivable for fund shares sold		1,528,418
Receivable for expense reimbursement (Note 2)		84,281
Prepaid expenses		17,448
Total assets		418,229,887
Liabilities:
Payable for investments purchased		36,411,147
Payable for fund shares redeemed		26,199
Dividends payable		90,863
Management and sub-advisory fees payable (Note 2)		177,273
Service fees payable (Note 2)		312
Transfer agent fees payable (Note 2)		9,488
Custody and fund accounting fees payable		36,407
Professional fees payable		53,033
Trustee fees payable (Note 2)		1,944
Payable for prospectus and shareholder reports		10,053
Other liabilities		1,854
Total liabilities		36,818,573
Net assets	$	381,411,314
Analysis of net assets:
Paid-in-capital	$	386,325,205
Total distributable earnings (deficits)A		(4,913,891	)
Net assets	$	381,411,314
Shares outstanding at no par value (unlimited shares authorized):
R5 Class		19,562,226
Y Class		2,165,066
Investor Class		100,734
R6 Class		16,886,809
Net assets:
R5 Class	$	192,774,622
Y Class	$	21,340,613
Investor Class	$	991,788
R6 Class	$	166,304,291
Net asset value, offering and redemption price per share:
R5 Class	$	9.85
Y Class	$	9.86
Investor Class	$	9.85
R6 Class	$	9.85
† Cost of investments in unaffiliated securities	$	375,731,851
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

12

American Beacon Garcia Hamilton Quality Bond Fund^SM

Statement of Operations

For the year ended October 31, 2021

Investment income:
Interest income	$	1,296,362
Total investment income		1,296,362
Expenses:
Management and sub-advisory fees (Note 2)		2,000,160
Transfer agent fees:
R5 Class (Note 2)		66,383
Y Class (Note 2)		20,951
Investor Class		1,237
R6 Class		4,639
Custody and fund accounting fees		63,163
Professional fees		91,972
Registration fees and expenses		61,186
Service fees (Note 2):
Investor Class		1,645
Prospectus and shareholder report expenses		21,530
Trustee fees (Note 2)		24,340
Loan expense (Note 8)		1,779
Other expenses		44,393
Total expenses		2,403,378
Net fees waived and expenses (reimbursed) (Note 2)		(814,374	)
Net expenses		1,589,004
Net investment (loss)		(292,642	)
Realized and unrealized gain (loss) from investments:
Net realized gain from:
Investments in unaffiliated securitiesA		1,160,239
Change in net unrealized (depreciation) of:
Investments in unaffiliated securitiesB		(3,726,085	)
Net (loss) from investments		(2,565,846	)
Net (decrease) in net assets resulting from operations	$	(2,858,488	)
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

13

American Beacon Garcia Hamilton Quality Bond Fund^SM

Statement of Changes in Net Assets

	Year Ended October 31, 2021			Year Ended October 31, 2020
Increase (decrease) in net assets:
Operations:
Net investment income (loss)	$	(292,642	)	$	5,114,914
Net realized gain from investments in unaffiliated securities		1,160,239			10,350,030
Change in net unrealized (depreciation) of investments in unaffiliated securities		(3,726,085	)		(2,386,916	)
Net increase (decrease) in net assets resulting from operations		(2,858,488	)		13,078,028
Distributions to shareholders:
Total retained earnings:
R5 Class		(5,803,467	)		(3,807,202	)
Y Class		(627,250	)		(287,618	)
Investor Class		(11,855	)		(72,178	)
R6 Class		(5,233,037	)		(2,328,652	)
Net distributions to shareholders		(11,675,609	)		(6,495,650	)
Capital share transactions (Note 9):
Proceeds from sales of shares		108,964,171			151,802,968
Reinvestment of dividends and distributions		10,629,729			5,321,824
Cost of shares redeemed		(57,610,072	)		(309,368,514	)
Net increase (decrease) in net assets from capital share transactions		61,983,828			(152,243,722	)
Net increase (decrease) in net assets		47,449,731			(145,661,344	)
Net assets:
Beginning of year		333,961,583			479,622,927
End of year	$	381,411,314		$	333,961,583

See accompanying notes

14

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2021

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of October 31, 2021, the Trust consists of twenty-eight active series, one of which is presented in this filing: American Beacon Garcia Hamilton Quality Bond Fund (the “Fund”). The remaining twenty-seven 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.

In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives the fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how the fund will use derivatives, may adversely affect the fund’s performance and may increase costs related to the fund’s use of derivatives.

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
R5 Class	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 Class	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500
R6 Class	Large institutional retirement plan investors - sold through retirement plan sponsors.		None

15

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2021

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

Significant Accounting Policies

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

Security Transactions and Investment Income

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

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

Distributions to Shareholders

The Fund distributes most or all of its net earnings and realized gains, if any, each taxable year in the form of dividends from net investment income on a monthly basis and distributions of realized net capital gains and net gains or losses from foreign currency transactions on an annual basis. The Fund does not have a fixed dividend rate and does not guarantee that 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.

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.

16

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2021

Other

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

2.  Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

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

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

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

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

The Management and Sub-Advisory Fees paid by the Fund for the year ended October 31, 2021 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	1,272,684
Sub-Advisor Fees		0.20	%		727,476
Total		0.55	%	$	2,000,160

Distribution Plans

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

Service Plans

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

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Notes to Financial Statements

October 31, 2021

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 R5 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 R5 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 R5 and Y Classes on an annual basis. During the year ended October 31, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Garcia Hamilton Quality Bond	$	81,137

As of October 31, 2021, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
Garcia Hamilton Quality Bond	$	7,339

Interfund Credit Facility

Pursuant to an exemptive order issued by the SEC, the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for the fund. When the fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2021, the Fund did not utilize the credit facility.

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Notes to Financial Statements

October 31, 2021

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Fund, through February 28, 2022, to the extent that total operating expenses (excluding taxes, interest, brokerage commissions, acquired fund fees and expenses, securities lending fees, expenses associated with securities sold short, litigation, and other extraordinary expenses) exceed the Fund’s expense cap. During the year ended October 31, 2021, the Manager waived and/or reimbursed expenses as follows:

Fund	Class	Expense Cap						Reimbursed Expenses		(Recouped) Expenses		Expiration of Reimbursed Expenses
		11/1/2020 – 2/28/2021			3/1/2021 – 10/31/2021
Garcia Hamilton Quality Bond	R5		0.45	%		0.45	%	$	406,052	$	-		2023-2024
Garcia Hamilton Quality Bond	Y		0.55	%		0.51	%		43,852		-		2023-2024
Garcia Hamilton Quality Bond	Investor		0.83	%		0.83	%		2,039		-		2023-2024
Garcia Hamilton Quality Bond	R6		0.41	%		0.41	%		362,431		-		2023-2024

Of the above amounts, $84,281 was disclosed as a Receivable for Expense Reimbursement on the Statement of Assets and Liabilities at October 31, 2021.

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 from 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 2023 and 2024. The Fund did not record a liability for potential reimbursement due to the current assessment that a reimbursement is uncertain. The carryover of excess expenses potentially reimbursable to the Manager, but not recorded as a liability are as follows:

Fund	Recouped Expenses		Excess Expense Carryover		Expired Expense Carryover		Expiration of Reimbursed Expenses
Garcia Hamilton Quality Bond	$	-	$	-	$	410,947		2020-2021
Garcia Hamilton Quality Bond		-		745,393		-		2021-2022
Garcia Hamilton Quality Bond		-		855,336		-		2022-2023

Trustee Fees and Expenses

Effective January 1, 2021, 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 and Compliance Committee and the Investment Committee, (c) $1,000 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. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. 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

19

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Notes to Financial Statements

October 31, 2021

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 and Compliance 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 $10,000.

3.  Security Valuation and Fair Value Measurements

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

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

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

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

Securities for which the market prices are not readily available or are not reflective of the fair value of the security, as determined by the Manager, will be priced at fair value following procedures approved by the Board.

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

Valuation Inputs

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

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

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

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

20

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October 31, 2021

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

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

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

4.  Securities and Other Investments

Agency Mortgage-Backed Securities

Certain mortgage-backed securities (“MBS”) may be issued or guaranteed by the U.S. government or a government sponsored entity, such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Although these instruments may be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit of the United States and are still exposed to the risk of non-payment.

Fixed-Income Investments

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

Mortgage-Backed Securities

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

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Notes to Financial Statements

October 31, 2021

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

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

Mortgage-Related and Other Asset-Backed Securities

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

Other Investment Company Securities and Other Exchange-Traded Products

The Fund at times 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 the 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, Fund 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 Fund shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses, if applicable, are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus. Investment in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

U.S. Government Agency Securities

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

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Notes to Financial Statements

October 31, 2021

obligations and repurchase agreements secured thereby. U.S. Government agency securities are subject to credit risk and interest rate risk.

U.S. Treasury Obligations

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

5.  Principal Risks

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

Credit Risk

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

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

Interest Rate Risk

Generally, the value of investments with interest rate risk, such as fixed income securities or derivatives, will move in the opposite direction to movements in interest rates. The prices of fixed income securities or derivatives are also affected by their durations. Fixed income securities or derivatives with longer durations generally have greater sensitivity to changes in interest rates. For example, if a bond has a duration of eight years, a 1% increase in interest rates could be expected to result in an 8% decrease in the value of the bond. An increase in interest rates can impact markets broadly as well. Extremely low or negative interest rates may become more prevalent among U.S. and foreign issuers. To the extent the Fund holds an investment with a negative interest rate

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Notes to Financial Statements

October 31, 2021

to maturity, the Fund may generate a negative return on that investment. Conversely, in the future, interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in substantial losses to the Fund.

Investment Risk

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

LIBOR Risk

Certain of the instruments identified in the Fund’s principal investment strategies have variable or floating coupon rates that are based on LIBOR, Euro Interbank Offered Rate and other similar types of reference rates (each, a “Reference Rate”). These Reference Rates are generally intended to represent the rate at which contributing banks may obtain short-term borrowings from each other within certain financial markets. LIBOR is produced daily by averaging the rates reported by a number of banks and may be a significant factor in determining the Fund’s payment obligations under a derivative instrument, the cost of financing to the Fund, or an investment’s value or return to the Fund, and may be used in other ways that affect the Fund’s performance. Arrangements are underway to phase out the use of LIBOR. These arrangements 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.

Regulators and market participants are working together to identify or develop successor Reference Rates. Additionally, it is expected that market participants will focus on the transition mechanisms by which the Reference Rates in existing contracts or instruments may be amended, whether through marketwide protocols, fallback contractual provisions, bespoke negotiations or amendments or otherwise. Nonetheless, there remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the Fund and the financial markets generally, and the termination of certain Reference Rates presents risks to the Fund. Financial industry groups have begun planning for a transition to the use of a different Reference Rate or benchmark rate, but there are obstacles to converting certain securities and transactions to a new Reference Rate or benchmark rate. The transition process, or the failure of an industry to transition, could lead to increased volatility and illiquidity in markets for instruments that currently rely on LIBOR to determine interest rates and a reduction in the values of some LIBOR-based investments, all of which would impact the Fund. While some LIBOR-based instruments may contemplate a scenario where LIBOR becomes unavailable by providing for an alternative rate-setting methodology, not all may have such provisions and there may be significant uncertainty regarding the effectiveness of any such methodologies. In addition, the alternative reference or benchmark rate may be an ineffective substitute, potentially resulting in prolonged adverse market conditions for the Fund. The elimination of a Reference Rate or any other changes or reforms to the determination or supervision of Reference Rates could have an adverse impact on the market for or value of any securities or payments linked to those Reference Rates and other financial obligations held by the Fund or on its overall financial condition or results of operations. Any substitute Reference Rate and any pricing adjustments imposed by a regulator or by counterparties or otherwise may adversely affect the Fund’s performance and/or NAV. At this time, it is not possible to completely identify or predict the effect of any such changes, any establishment of alternative Reference Rates or any other reforms to Reference Rates that may be enacted in the UK or elsewhere. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, any of the effects described above could occur prior to the official phasing out of 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 Fund may be difficult to sell or other investments may be difficult to purchase at favorable times or prices. As

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Notes to Financial Statements

October 31, 2021

a result, the Fund may have to lower the price on certain securities that it is trying to sell, sell other securities instead or forgo an investment opportunity, any of which could have a negative effect on Fund management or performance. Redemptions by a few large investors in the Fund at such times may have a significant adverse effect on the Fund’s NAV per share and remaining Fund shareholders. In addition, the market-making capacity of dealers in certain types of securities has been reduced in recent years, in part as a result of structural and regulatory changes, such as fewer proprietary trading desks and increased regulatory capital requirements for broker-dealers. Further, many broker-dealers have reduced their inventory of certain debt securities. This could negatively affect the Fund’s ability to buy or sell debt securities and increase the related volatility and trading costs. The Fund may lose money if it is forced to sell certain investments at unfavorable prices to meet redemption requests or other cash needs.

Market Risk

The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund’s performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. 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. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future, particularly if markets enter a period of uncertainty or economic weakness. The value of a security may decline due to adverse issuer-specific conditions, general market conditions unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole.

Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Adverse market events may also lead to increased shareholder redemptions, which could cause the Fund to experience a loss or difficulty in selling investments to meet redemption requests by shareholders and may increase the Fund’s portfolio turnover, which will increase the costs that the Fund incurs and lower the Fund’s performance. Even when securities markets perform well, there is no assurance that the investments held by the Fund will increase in value along with the broader market.

Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, including the U.S. presidential election, 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 severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers.

Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies,

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Notes to Financial Statements

October 31, 2021

unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in securities prices could be a sustained trend or a drastic movement. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.

Mortgage-Backed and Mortgage Related Securities Risk

Investments in mortgage-backed and mortgage-related securities are influenced by the factors affecting the mortgages underlying the securities or the housing market. Investments in mortgage-backed and mortgage-related securities also are subject to market risks for fixed income securities, which include, but are not limited to, credit risk, interest rate risk, prepayment risk, extension risk, callable securities risk, and valuation risk. A decline in the credit quality of the issuers of mortgage-backed and mortgage-related securities or instability in the markets for such securities may affect the value and liquidity of such securities, which could result in losses to the Fund. These securities are also subject to the risk of default on the underlying mortgages, particularly during periods of market downturn, and an unexpectedly high rate of defaults on the underlying assets will adversely affect the security’s value.

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 that track an index, the Fund is subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject.

Prepayment and Extension Risk

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

Recent Market Events Risk

An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. Transmission of COVID-19 and efforts to

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Notes to Financial Statements

October 31, 2021

contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions, closed international, national and local borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event cancellations, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession. The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time.

The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets. Amid the Federal Reserve’s ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. 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. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty.

A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on December 31, 2020, commonly referred to as “Brexit,” and a trade agreement between the United Kingdom and the European Union, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.

Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.

Redemption Risk

The Fund may experience periods of high levels of redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. The sale of assets to meet redemption requests may create net capital gains, which could cause the Fund to have to distribute substantial capital gains. Redemption risk is heightened during periods of declining or illiquid markets. During periods of heavy redemptions, the Fund may borrow funds through the interfund credit facility or from a bank line of credit, which may increase costs. A rise in interest rates or other market developments may cause investors to move out of fixed income securities on a large scale. Heavy redemptions could hurt the Fund’s performance.

Sector Risk

Sector risk is the risk associated with the Fund holding a significant amount of investments in similar businesses, which would be similarly affected by particular economic or market events, which may, in certain circumstances, cause the value of the equity and debt securities of companies in a particular sector of the market to change. To the extent the Fund has substantial holdings within a particular sector, the risks to the Fund associated with that sector increase. In addition, when the Fund focuses its investments in certain sectors of the economy, its performance may be driven largely by sector performance and could fluctuate more widely than if the Fund were invested more evenly across sectors. Individual sectors may be more volatile, and may perform differently, than the broader market. The businesses that constitute a sector may all react the same way to economic, political or regulatory events. The Fund’s performance could also be affected if the sectors do not perform as expected. The lack of exposure to one or more sectors may adversely affect performance. As the Fund’s portfolio changes over time, the Fund’s exposure to a particular sector may become higher or lower.

27

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2021

Socially Responsible Investing Risk

The Fund’s incorporation of environmental, social and/or governance considerations in its investment strategy may cause it to make different investments than funds that have a similar investment style but do not incorporate such considerations in their strategy. The Fund may under perform funds that do not incorporate these considerations. The Fund may not be able to take advantage of certain investment opportunities due to these considerations, which may adversely affect investment performance.

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

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

Variable and 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, LIBOR, SOFR, 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. Certain types of floating rate instruments may also be subject to greater liquidity risk than other debt securities.

6.  Federal Income and Excise Taxes

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

The Fund does not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2021 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.

28

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2021

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

Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

The tax character of distributions paid were as follows:

	Year Ended October 31, 2021		Year Ended October 31, 2020
Distributions paid from:
Ordinary income*
R5 Class	$	3,607,524	$	3,807,202
Y Class		385,179		287,618
Investor Class		6,916		72,178
R6 Class		3,234,538		2,328,652
Long-term capital gains
R5 Class		2,195,943		–
Y Class		242,071		–
Investor Class		4,939		–
R6 Class		1,998,499		–
Total distributions paid	$	11,675,609	$	6,495,650

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

As of October 31, 2021, the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Garcia Hamilton Quality Bond	$	376,302,907	$	1,272,996	$	(1,765,811	)	$	(492,815	)

Fund	Net Unrealized Appreciation (Depreciation)			Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences			Distributable Earnings
Garcia Hamilton Quality Bond	$	(492,815	)	$	87,691	$	-	$	(4,417,904	)	$	(90,863	)	$	(4,913,891	)

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

For federal income tax purposes, the Fund measures its capital loss carryforwards annually at October 31, its fiscal year end. Capital loss carryforwards retain their character as short-term and/or long-term and may be carried forward and applied against future realized capital gains with no expiration date.

29

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2021

As of October 31, 2021, the Fund had $3,865,914 short-term and $551,990 long-term capital loss carryforwards.

7.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2021 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Purchases of U.S. Government Securities		Sales (non-U.S. Government Securities)		Sales of U.S. Government Securities
Garcia Hamilton Quality Bond	$	69,766,469	$	295,111,824	$	122,300,121	$	119,067,409

8.  Borrowing Arrangements

Effective November 12, 2020 (the “Effective Date”), the Fund, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Fund’s Committed Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

On the Effective Date, the Fund, along with certain other Participating Funds managed by the Manager, also renewed 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) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Fund’s Uncommitted Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

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

During the year ended October 31, 2021, the Fund did not utilize this facility.

30

American Beacon Garcia Hamilton Quality Bond Fund^SM

Notes to Financial Statements

October 31, 2021

9.  Capital Share Transactions

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

	R5 Class
	Year Ended October 31,
	2021						2020
Garcia Hamilton Quality Bond Fund	Shares			Amount			Shares			Amount
Shares sold		6,823,749		$	68,605,815			10,920,910		$	110,830,535
Reinvestment of dividends		472,898			4,759,799			260,888			2,639,245
Shares redeemed		(4,558,386	)		(46,119,650	)		(25,867,704	)		(260,818,722	)
Net increase (decrease) in shares outstanding		2,738,261		$	27,245,964			(14,685,906	)	$	(147,348,942	)
	Y Class
	Year Ended October 31,
	2021						2020
Garcia Hamilton Quality Bond Fund	Shares			Amount			Shares			Amount
Shares sold		1,072,363		$	10,776,226			1,687,321		$	16,967,230
Reinvestment of dividends		62,184			625,100			27,949			283,161
Shares redeemed		(812,784	)		(8,188,628	)		(1,656,596	)		(16,761,196	)
Net increase in shares outstanding		321,763		$	3,212,698			58,674		$	489,195
	Investor Class
	Year Ended October 31,
	2021						2020
Garcia Hamilton Quality Bond Fund	Shares			Amount			Shares			Amount
Shares sold		70,673		$	700,509			83,368		$	837,398
Reinvestment of dividends		1,178			11,819			7,035			70,766
Shares redeemed		(6,723	)		(67,047	)		(1,538,154	)		(15,461,294	)
Net increase (decrease) in shares outstanding		65,128		$	645,281			(1,447,751	)	$	(14,553,130	)
	R6 Class
	Year Ended October 31,
	2021						2020
Garcia Hamilton Quality Bond Fund	Shares			Amount			Shares			Amount
Shares sold		2,863,007		$	28,881,621			2,293,937		$	23,167,805
Reinvestment of dividends		520,965			5,233,011			229,895			2,328,652
Shares redeemed		(324,677	)		(3,234,747	)		(1,663,069	)		(16,327,302	)
Net increase in shares outstanding		3,059,295		$	30,879,885			860,763		$	9,169,155

10.  Subsequent Events

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

31

American Beacon Garcia Hamilton Quality Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R5 ClassA
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	10.27		$	10.05		$	9.79		$	9.91		$	9.98
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)B		0.11			0.24			0.20			0.14
Net gains (losses) on investments (both realized and unrealized)		(0.08	)		0.28			0.26			(0.13	)		(0.05	)
Total income (loss) from investment operations		(0.09	)		0.39			0.50			0.07			0.09
Less distributions:
Dividends from net investment income		(0.14	)		(0.17	)		(0.24	)		(0.19	)		(0.15	)
Distributions from net realized gains		(0.19	)		–			–			–			(0.01	)
Total distributions		(0.33	)		(0.17	)		(0.24	)		(0.19	)		(0.16	)
Net asset value, end of period	$	9.85		$	10.27		$	10.05		$	9.79		$	9.91
Total returnC		(0.84	)%		3.93	%		5.20	%		0.74	%		0.91	%
Ratios and supplemental data:
Net assets, end of period	$	192,774,622		$	172,774,140		$	316,582,604		$	234,919,975		$	132,575,412
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.67	%		0.68	%		0.66	%		0.69	%		0.70	%
Expenses, net of reimbursements and/or recoupments		0.45	%		0.45	%		0.45	%		0.45	%		0.45	%
Net investment income (loss), before expense reimbursements and/or recoupments		(0.32	)%		1.15	%		2.18	%		1.68	%		1.12	%
Net investment income (loss), net of reimbursements and/or recoupments		(0.10	)%		1.38	%		2.39	%		1.92	%		1.37	%
Portfolio turnover rate		71	%		122	%		58	%		143	%		52	%

^A  Prior to February 28, 2020, the R5 Class was known as Institutional Class.

^B  Based on average shares outstanding for the period.

^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

32

American Beacon Garcia Hamilton Quality Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	10.27		$	10.05		$	9.79		$	9.90		$	9.98
Income (loss) from investment operations:
Net investment income		(0.00	)A		0.13			0.24			0.18			0.13
Net gains (losses) on investments (both realized and unrealized)		(0.08	)		0.25			0.25			(0.11	)		(0.06	)
Total income (loss) from investment operations		(0.08	)		0.38			0.49			0.07			0.07
Less distributions:
Dividends from net investment income		(0.14	)		(0.16	)		(0.23	)		(0.18	)		(0.14	)
Distributions from net realized gains		(0.19	)		–			–			–			(0.01	)
Total distributions		(0.33	)		(0.16	)		(0.23	)		(0.18	)		(0.15	)
Net asset value, end of period	$	9.86		$	10.27		$	10.05		$	9.79		$	9.90
Total returnB		(0.81	)%		3.83	%		5.09	%		0.74	%		0.71	%
Ratios and supplemental data:
Net assets, end of period	$	21,340,613		$	18,928,869		$	17,927,537		$	3,685,857		$	3,133,476
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.74	%		0.74	%		0.73	%		0.75	%		0.77	%
Expenses, net of reimbursements and/or recoupments		0.52	%C		0.55	%		0.55	%		0.55	%		0.55	%
Net investment income (loss), before expense reimbursements and/or recoupments		(0.38	)%		1.03	%		2.14	%		1.58	%		1.05	%
Net investment income (loss), net of reimbursements and/or recoupments		(0.16	)%		1.22	%		2.32	%		1.78	%		1.27	%
Portfolio turnover rate		71	%		122	%		58	%		143	%		52	%

^A  Amount represents less than $0.01 per share.

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

^C  Expense ratios may exceed stated expense caps in Note 2 due to the change in the contractual expense cap on February 28, 2021.

See accompanying notes

33

American Beacon Garcia Hamilton Quality Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

		Investor Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	10.26		$	10.05		$	9.79		$	9.91		$	9.99
Income (loss) from investment operations:
Net investment income (loss)		(0.04	)A		0.13	A		0.21			0.15			0.10
Net gains (losses) on investments (both realized and unrealized)		(0.07	)		0.22			0.26			(0.11	)		(0.06	)
Total income (loss) from investment operations		(0.11	)		0.35			0.47			0.04			0.04
Less distributions:
Dividends from net investment income		(0.11	)		(0.14	)		(0.21	)		(0.16	)		(0.11	)
Distributions from net realized gains		(0.19	)		–			–			–			(0.01	)
Total distributions		(0.30	)		(0.14	)		(0.21	)		(0.16	)		(0.12	)
Net asset value, end of period	$	9.85		$	10.26		$	10.05		$	9.79		$	9.91
Total returnB		(1.11	)%		3.54	%		4.80	%		0.36	%		0.43	%
Ratios and supplemental data:
Net assets, end of period	$	991,788		$	365,190		$	14,904,591		$	10,995,242		$	9,724,030
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.29	%		1.20	%		1.04	%		0.92	%		0.94	%
Expenses, net of reimbursements and/or recoupments		0.83	%		0.83	%		0.83	%		0.83	%		0.83	%
Net investment income (loss), before expense reimbursements and/or recoupments		(0.91	)%		0.90	%		1.81	%		1.41	%		0.89	%
Net investment income (loss), net of reimbursements and/or recoupments		(0.45	)%		1.27	%		2.02	%		1.50	%		0.99	%
Portfolio turnover rate		71	%		122	%		58	%		143	%		52	%

^A  Based on average shares outstanding for the period.

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

34

American Beacon Garcia Hamilton Quality Bond Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R6 Class
	Year Ended October 31,						February 28, 2019A to October 31,
	2021			2020			2019
Net asset value, beginning of period	$	10.26		$	10.04		$	9.87
Income (loss) from investment operations:
Net investment income (loss)		(0.01	)B		0.14			0.17
Net gains (losses) on investments (both realized and unrealized)		(0.06	)		0.25			0.17
Total income (loss) from investment operations		(0.07	)		0.39			0.34
Less distributions:
Dividends from net investment income		(0.15	)		(0.17	)		(0.17	)
Distributions from net realized gains		(0.19	)		–			–
Total distributions		(0.34	)		(0.17	)		(0.17	)
Net asset value, end of period	$	9.85		$	10.26		$	10.04
Total returnC		(0.70	)%		3.97	%		3.44	%D
Ratios and supplemental data:
Net assets, end of period	$	166,304,291		$	141,893,384		$	130,208,195
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.64	%		0.64	%		0.66	%E
Expenses, net of reimbursements and/or recoupments		0.41	%		0.41	%		0.41	%E
Net investment income (loss), before expense reimbursements and/or recoupments		(0.28	)%		1.13	%		1.90	%E
Net investment income (loss), net of reimbursements and/or recoupments		(0.05	)%		1.36	%		2.15	%E
Portfolio turnover rate		71	%		122	%		58	%F

^A  Commencement of operations.

^B  Based on average shares outstanding for the period.

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

^D  Not annualized.

^E  Annualized.

^F  Portfolio turnover rate is for the period from February 28, 2019 through October 31, 2019 and is not annualized.

See accompanying notes

35

American Beacon Funds^SM

Federal Tax Information

October 31, 2021 (Unaudited)

Certain tax information regarding the Funds are required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2021. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2021.

The Fund designated the following items with regard to distributions paid during the fiscal year ended October 31, 2021. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends-Received Deduction:

Garcia Hamilton Quality Bond 0.00 % 

Qualified Dividend Income:

Garcia Hamilton Quality Bond 0.00 % 

Long-Term Capital Gain Distributions:

Garcia Hamilton Quality Bond $4,441,452

Short-Term Capital Gain Distributions:

Garcia Hamilton Quality Bond $1,920,998

Shareholders will receive notification in January 2022 of the applicable tax information necessary to prepare their 2021 income tax returns.

36

Disclosure Regarding Approval of the Management and Investment

Advisory Agreements (Unaudited)

Renewal and Approval of Management Agreement and Investment Advisory Agreement

At meetings held on May 17, 2021 and June 8-9, 2021 (collectively, the “Meetings”) via videoconference, the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 9, 2021 meeting, approved the renewal of: (1) the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon Garcia Hamilton Quality Bond Fund (“Fund”); and (2) the Investment Advisory Agreement among the Manager, the Trust, on behalf of the Fund, and Garcia Hamilton & Associates, LP (“subadvisor”). The Management Agreement and the Investment Advisory Agreement are referred to herein individually as an “Agreement” and collectively as the “Agreements.”

In preparation for its consideration of the renewal of the Agreements, the Board undertook steps to gather and consider information furnished by the Manager, the subadvisor, Broadridge, Inc. (“Broadridge”) and Morningstar, Inc. (“Morningstar”). The Board, with the assistance of independent legal counsel, requested and received certain relevant information from the Manager and the subadvisor.

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Fund as well as information from the Manager and the subadvisor. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Trustees received and evaluated such information as they deemed necessary, including the impact of the COVID-19 pandemic on the operations of the Manager and the subadvisor. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to the Fund.

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

A firm may not have been able to, or opted not to, provide information in response to certain information requests, in which case the Board conducted its evaluation of the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations.

Provided below is an overview of certain factors the Board considered in connection with its decision to approve the renewal of the Agreements. The Board did not identify any particular information that was most relevant to its consideration of whether to approve the renewal of each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal of investment advisory contracts, such as the Agreements, and related regulatory guidelines. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the approval of the renewal of each Agreement was in the best interests of the Fund and its shareholders.

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

In determining whether to approve the renewal of the Agreements, the Board considered the Fund’s investment management and subadvisory relationships separately. In each instance, the Board considered, among other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of the Fund and the subadvisor for the Fund; (3) the costs incurred by the Manager in rendering

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Disclosure Regarding Approval of the Management and Investment

Advisory Agreements (Unaudited)

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

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

With respect to the renewal of the Investment Advisory Agreement, the Board considered, among other factors: the level of staffing and the size of the subadvisor; the adequacy of the resources committed to the Fund by the subadvisor; the financial stability of the subadvisor; and representations made by the subadvisor regarding its compliance program. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and the subadvisor were appropriate for the Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of the Fund relative to its Broadridge Performance Universe, Morningstar Category, and/or benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding its independent methodology for selecting the Fund’s Broadridge Performance Universe. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by the subadvisor regarding the performance of the Fund relative to the performance of a composite of comparable investment accounts managed by the subadvisor and the Fund’s benchmark index. In addition, the Board considered the Manager’s recommendation to continue to retain the subadvisor. A discussion regarding the Board’s considerations with respect to the Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to the Fund.”

Costs of the Services Provided to the Fund and the Profits Realized by the Manager from its Relationship with the Fund. In analyzing the costs of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager earning a profit before the payment of distribution-related expenses and sustaining a loss after the payment of distribution-related expenses by the Manager for the Fund. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Fund, the Manager represented that, among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility and regulatory requirements associated with managing the Fund. The Board also noted that, for the Fund and its share classes, the Manager is waiving fees and/or reimbursing expenses.

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

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Disclosure Regarding Approval of the Management and Investment

Advisory Agreements (Unaudited)

In analyzing the fee rates charged by the subadvisor in connection with its investment advisory services to the Fund, the Board considered representations made by the subadvisor that the Fund’s subadvisory fee rate schedule generally was favorable compared to other comparable client accounts. The Board did not request profitability data from the subadvisor because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisor with respect to the negotiation of subadvisory fee rates. In addition, the Board noted that the subadvisor may not account for its profits on an account-by-account basis and that different firms likely employ different methodologies in connection with these calculations.

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

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as the Fund grows and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that the Manager has negotiated breakpoints for the subadvisory fee rate. In this regard, the Board considered that the Fund’s current assets did not exceed the threshold necessary to reach the first subadvisory fee rate breakpoint.

In addition, the Board noted the Manager’s representation that the Management Agreement contains fee schedule breakpoints at higher asset levels with respect to the Fund. In this regard, the Board considered that the Fund’s current assets did not exceed the threshold necessary to reach the first management fee breakpoint. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for the Fund provide for a reasonable sharing of benefits from any economies of scale with the Fund.

Benefits Derived from the Relationship with the Fund. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisor as a result of the advisory relationships with the Fund, including greater exposure in the marketplace with respect to the Manager’s or the subadvisor’s investment process and expanding the level of assets under management by the Manager and the subadvisor. The Board also considered that the Manager may invest the Fund’s cash balances and cash collateral provided by the borrowers of the Fund’s securities in the American Beacon U.S. Government Money Market Select Fund, which the Manager manages directly, and for which the Manager receives a fee. Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisor by virtue of their relationships with the Fund appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to the Fund

The performance comparisons below were made for the Fund’s R5 Class shares relative to the Fund’s Broadridge Performance Universe and Morningstar Category. With respect to the Broadridge Performance Universe, the 1^st Quintile represents the top 20 percent of the universe based on performance and the 5^th Quintile represents the bottom 20 percent of the universe based on performance. References to the Fund’s Broadridge Performance Universe are to the respective universe of mutual funds with comparable investment classifications and objectives as determined by Broadridge.

In reviewing the performance, the Board viewed longer-term performance over a full market cycle, typically five years or longer, if available, as the most important consideration because relative performance over shorter periods may be significantly impacted by market or economic events and not necessarily reflective of subadvisor skill.

The expense comparisons below were made for the Fund’s R5 Class shares relative to the Fund’s Broadridge Expense Universe and Broadridge Expense Group and Y Class shares relative to the Fund’s Morningstar Fee Level

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Disclosure Regarding Approval of the Management and Investment

Advisory Agreements (Unaudited)

Universe. The 1^st Quintile represents the lowest 20 percent of the universe or group based on lowest total expense, and the 5^th Quintile represents the highest 20 percent of the universe or group based on highest total expense. References to the Fund’s Expense Group and Expense Universe are to the respective group or universe of comparable mutual funds as determined by Broadridge. A Broadridge Expense Group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge Expense Universe includes all funds with a comparable investment classifications/objectives and similar operating structures to that of the share class under review for the Fund, including funds in the Broadridge Expense Group. The Broadridge expense comparisons are based on the most recent audited financial information publicly available for a Fund as of December 31, 2020. References to the Fund’s Morningstar Fee Level ranking are to the institutional share class of comparable mutual funds as determined by Morningstar.

The Board considered the Fund’s Morningstar fee level category with the 1^st Quintile representing the lowest 20 percent of the category constituents and the 5^th Quintile representing the highest 20 percent of the category in terms of total expense.

In reviewing expenses, the Board considered the positive impact of the fee waiver and/or expense reimbursement and the Manager’s agreement to continue the fee waiver and/or expense reimbursement. The Board also considered that, in connection with the change in the name of the Fund’s Institutional Class shares, the share class used for the Fund’s Morningstar Fee Level comparisons had changed from the R5 Class shares to the Y Class shares, which may have resulted in a less favorable Morningstar Fee Level Ranking for the Fund than in prior years.

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

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

Compared to Broadridge Expense Group	2nd Quintile
Compared to Broadridge Expense Universe	3rd Quintile
Morningstar Fee Level Ranking	4th Quintile

Broadridge and Morningstar Performance Analysis (three-year period ended December 31, 2020)

Compared to Broadridge Performance Universe	5th Quintile
Compared to Morningstar Category	5th Quintile

The Board also considered: (1) information provided by the subadvisor regarding fee rates charged for managing assets in the same or a similar strategy as the subadvisor manages the Fund; (2) that the one-year and three-year periods of underperformance were due to the subadvisor’s duration-management strategy; (3) the potential for improved future relative performance in a rising interest rate environment; and (4) the Manager’s recommendation to continue to retain the subadvisor.

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

40

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 funds in the fund complex that includes the Trust, the American Beacon Select Funds, and the American Beacon Institutional Funds Trust. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Eugene J. Duffy (67)**	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial Administrative Corporation (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-2016); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (51)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Joseph B. Armes (59)	Trustee since 2015	Director, Switchback Energy Acquisition (2019-2021); 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); 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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Gerard J. Arpey (63)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Director, The Home Depot, Inc. (2015-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

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
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (60)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Claudia A. Holz (64)	Trustee since 2018	Partner, KPMG LLP (1990-2017); Independent Director, Blue Owl Capital Inc. (2021-Present); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Douglas A. Lindgren (59)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Barbara J. McKenna, CFA (58)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

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	Term
	One Year
Gene L. Needles, Jr. (66)	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); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-2020); Director, ARK Investment Management LLC (2016-2020); 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); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, 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 (2015-2020); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-2021); President, American Beacon Apollo Total Return Fund (2018-2021).
Rosemary K. Behan (62)	VP, Secretary and Chief Legal Officer since 2006	Senior Vice President (2021-Present), Vice President(2006-2021), Secretary and General Counsel (2006-Present), American Beacon Advisors, Inc.; Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015–Present); Senior Vice President (2021-Present), Vice President(2015-2021), Secretary and General Counsel (2015-Present), Resolute Investment Managers, Inc.; Secretary, Resolute Investment Distributors, Inc. (2017-Present); Senior Vice President (2021-Present), Vice President(2017-2021), Secretary and General Counsel (2017-Present), Resolute Investment Services, Inc.; Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-2020); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, Green Harvest Asset Management (2019-2021); 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 (2018-2021); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-2021).

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
Brian E. Brett (61)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), 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); 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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Paul B. Cavazos (52)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Erica Duncan (51)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Melinda G. Heika (60)	VP since 2021 Principal Accounting Officer and Treasurer (2010-2021)	Senior Vice President (2021-Present), 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); Senior Vice President (2021-Present), Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017); Senior Vice President (2021-Present); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-2020); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Vice President (2021-Present), Principal Accounting Officer (2017-2021) and Treasurer (2010-2021), American Beacon Select Funds; Vice President (2021–Present), Principal Accounting Officer and Treasurer (2017-2021), American Beacon Institutional Funds Trust; Vice President (2021), Principal Accounting Officer and Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Vice President (2021), Principal Accounting Officer and Treasurer, American Beacon Apollo Total Return Fund (2018-2021).

44

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
Terri L. McKinney (57)	VP since 2010	Senior Vice President (2021-Present), Vice President (2009-2021), American Beacon Advisors, Inc.; Senior Vice President (2021–Present); Vice President (2017-2021), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2018-Present), Resolute Investment Services, Inc; Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Jeffrey K. Ringdahl (46)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (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; Trustee, American Beacon NextShares Trust (2015-2020); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Samuel J. Silver (58)	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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).

45

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
Christina E. Sears (50)	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, Green Harvest Asset Management, LLC (2019-Present); Chief Compliance Officer, RSW Investments Holdings, LLC (2019-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Sonia L. Bates (64)	Principal Accounting Officer and Treasurer since 2021 Assistant Treasurer (2011-2021)	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); 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); Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2011-2021), American Beacon Select Funds; Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2017-2021), American Beacon Institutional Funds Trust; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Apollo Total Return Fund.
Shelley L. Dyson (51)	Assistant Treasurer since 2021	Assistant Treasurer, American Beacon Select Funds (2021-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2021-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Treasurer, American Beacon Apollo Total Return Fund (2021).
Shelley D. Abrahams (46)	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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Rebecca L. Harris (54)	Assistant Secretary since 2010	Senior Vice President (2021-Present), Vice President (2011-Present), American Beacon Advisors, Inc.; Senior Vice President (2021-Present), Vice President (2017-Present), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2015-Present), Resolute Investment Services; Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).

46

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
Teresa A. Oxford (63)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-2021); Assistant Secretary, Resolute Investment Managers, Inc. (2017-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-2020); Assistant Secretary, Continuous Capital, LLC (2020-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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Michael D. Jiang (36)	Assistant Secretary since 2021	Assistant Secretary (2021-Present), Resolute Investment Distributors, Inc.; Associate General Counsel (2021-Present), Resolute Investment Services, Inc.; Vice President (2018-2021), The Northern Trust Company; Second Vice President (2015-2018), The Northern Trust Company. Assistant Secretary, American Beacon Select Funds (2021-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2021-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2021).

* 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. Duffy is being deemed to be an “interested person” of the Trust, as defined by the Investment Company Act of 1940, as amended, by virtue of his position with Mesirow Financial, Inc., a broker-dealer.

47

American Beacon Garcia Hamilton Quality Bond Fund^SM

Privacy Policy

October 31, 2021 (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.

48

Delivery of Documents

Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.

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 quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

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

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

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

AR 10/21

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.

INTERNATIONAL EQUITY FUND RISKS

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

TOCQUEVILLE INTERNATIONAL VALUE FUND RISKS

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

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

American Beacon Funds October 31, 2021

Contents

President’s Message	1
Market and Performance Overviews	3
Expense Examples	9
Report of Independent Registered Public Accounting Firm	11
Schedules of Investments:
American Beacon International Equity Fund	12
American Beacon Tocqueville International Value Fund	18
Financial Statements	22
Notes to Financial Statements	26
Financial Highlights:
American Beacon International Equity Fund	52
American Beacon Tocqueville International Value Fund	59
Federal Tax Information	62
Disclosure Regarding Approval of the Management and Investment Advisory Agreements	63
Trustees and Officers of the American Beacon Funds	68
Privacy Policy	75

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   As Warren E. Buffett, the “Oracle of Omaha” and billionaire chairman and CEO of Berkshire Hathaway, once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”   That is to say, before we can enjoy the fruits of our labor, we must first devote our attention to the careful planning and cultivation of our estates. To achieve a strong yield requires time, diligence and patience – and there are no guarantees the seeds we plant today will thrive or result in a plentiful harvest. This can be said not only about the actions we undertake in our gardening or landscaping, but also those we initiate in our investment portfolios – especially as we take into account the potential for harm caused by natural disasters and other catastrophes, such as the COVID-19 pandemic.

Because none of us – not even the Oracle of Omaha – has a crystal ball, to help give your investment portfolio the greatest chance for success over the long term, we encourage you to work with financial professionals to develop your personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand short-term crises. With continuous nurturing, you will be better positioned to achieve enduring financial success.

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. 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 financial rewards.

Thank you for entrusting your financial success with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

International Equity Market Overview

October 31, 2021 (Unaudited)

Over the 12 months ended October 31, 2021, international stocks made gains as evidenced by the MSCI ACWI ex-USA Index (up 29.66%), the MSCI EAFE Index (up 34.18%) and the MSCI Emerging Markets Index (up 16.96%).

During the summer of 2020, security prices slowly increased. In early November 2020, Pfizer and its German partner, BioNTech, announced their viable COVID-19 vaccine, which helped jump-start the markets and enabled Value factors to outperform Growth factors. By early spring of 2021, consumer demand moved from negative territory into positive.

The summer of 2021 started with optimism due to rising vaccination rates and reopening economies. However, by the end of summer, it became clear that problems were occurring as a result of the strong snap-back in consumer demand. Supply chains across many industries were having trouble keeping up – and the prices of many goods, including manufacturing inputs, were increasing and impacting profitability. The outperformance of Value versus Growth stocks that occurred in late 2020 also reversed, as Growth factors again led Value factors. Additionally, the COVID-19 delta variant spread beyond India to the developed world and Asia, which caused breakthrough infections in vaccinated people and renewed lockdowns. These developments, along with major central banks discussing how to normalize policy by tapering and potentially raising rates, made it clear that both companies and investors faced a more challenging environment going forward.

2

American Beacon International Equity Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

The Investor Class of the American Beacon International Equity Fund (the “Fund”) returned 39.72% for the twelve months ended October 31, 2021. The Fund outperformed the MSCI EAFE Index (Net) (the “Index”) return of 34.18%.

Comparison of Changes in Value of a $10,000 Investment for the period 10/31/2011 through 10/31/2021

Total Returns for the Period ended October 31, 2021
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of  $10,000 10/31/2011- 10/31/2021
R5 Class (1,6)	AAIEX		40.18	%		7.63	%		7.22	%		6.30	%		$	18,427
Y Class (1,6)	ABEYX		39.99	%		7.52	%		7.13	%		6.21	%		$	18,270
Investor Class (1,6)	AAIPX		39.72	%		7.26	%		6.85	%		5.93	%		$	17,797
Advisor Class (1,6)	AAISX		39.53	%		7.11	%		6.71	%		5.79	%		$	17,559
A Class without sales charge (1,2,6)	AIEAX		39.65	%		7.19	%		6.79	%		5.85	%		$	17,654
A Class with sales Charge (1,2,6)	AIEAX		31.60	%		5.09	%		5.53	%		5.22	%		$	16,634
C Class without sales charge (1,3,6)	AILCX		38.56	%		6.39	%		6.00	%		5.07	%		$	16,397
C Class with sales charge (1,3,6)	AILCX		37.56	%		6.39	%		6.00	%		5.07	%		$	16,397
R6 Class (1,4,6)	AAERX		40.20	%		7.70	%		7.29	%		6.34	%		$	18,485
MSCI EAFE Index (Net) (5)			34.18	%		11.54	%		9.79	%		7.37	%		$	20,358

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of the fees charged to the R5 Class of the Fund was waived from 2013 through 2015. Performance prior to waiving fees was lower than actual returns shown for 2013 through 2015. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future.

3

American Beacon International Equity Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

2. A portion of the fees charged to the A Class of the Fund was waived from 2010 through 2012 and fully recovered in 2013. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012. The maximum sales charge for A Class is 5.75%.

3. A portion of the fees charged to the C Class of the Fund was waived from 2010 through 2012, partially recovered in 2013, and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

4. Fund performance for the five-year and ten-year periods represents the returns achieved by the R5 Class from 10/31/11 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 10/31/11. A portion of the fees charged to the R6 Class of the Fund has been waived since Class inception. Performance prior to waiving fees was lower than the actual returns shown since inception.

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

6. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, Advisor, A, C, and R6 Class shares were 0.72%, 0.80%, 1.07%, 1.20%, 1.13%, 1.86%, and 0.80%, 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.

The Fund outperformed the Index during the period primarily due to security selection while country allocation also boosted performance.

Security selections within United Kingdom and Germany were the primary contributors to the Fund’s relative outperformance, while security selections in Japan detracted from value. Contributing securities included Barclays PLC (up 106.5%) in the United Kingdom and Volkswagen AG Preferred (up 66.7%) within Germany. The Fund’s investments in Japan, including Takeda Pharmaceutical Co. Ltd. (down 5.5%) hurt relative performance during the prior twelve months.

From a country allocation perspective, an underweight allocation to Japan (up 20.2%) and an overweight allocation to France (up 48.1%) contributed to the Fund’s outperformance relative to the Index. However, an underweight allocation to Sweden (up 45.5%) detracted from relative value during the period.

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

Top Ten Holdings (% Net Assets)
Sanofi		3.7
Barclays PLC		2.3
Novartis AG		2.2
GlaxoSmithKline PLC		1.9
Takeda Pharmaceutical Co. Ltd.		1.7
Credit Suisse Group AG		1.7
AstraZeneca PLC, ADR		1.6
UniCredit SpA		1.6
Bayerische Motoren Werke AG		1.5
Rolls-Royce Holdings PLC		1.5
Total Fund Holdings	138

4

American Beacon International Equity Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

Sector Allocation (% Equities)
Financials	21.9
Health Care	15.6
Industrials	15.6
Consumer Discretionary	14.0
Information Technology	7.4
Communication Services	6.2
Consumer Staples	5.6
Energy	4.8
Materials	4.6
Utilities	3.0
Real Estate	1.3
Country Allocation (% Equities)
United Kingdom	20.0
Japan	17.2
France	15.0
Germany	10.9
Switzerland	6.7
Spain	4.5
Netherlands	4.2
China/Hong Kong	3.9
Italy	3.6
Canada	3.1
Republic of Korea	2.0
United States	1.7
Denmark	1.3
Ireland	1.2
Sweden	1.0
Norway	0.8
Finland	0.8
Singapore	0.6
Israel	0.6
South Africa	0.5
Portugal	0.4

5

American Beacon Tocqueville International Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

The Investor Class of the American Beacon Tocqueville International Value Fund (the “Fund”) returned 26.01% for the twelve-month period ending October 31, 2021, which underperformed the MSCI EAFE Index (Net) (the “Index”) return of 34.18%.

Comparison of Changes in Value of a $10,000 Investment for the period 10/31/2011 through 10/31/2021

Total Returns for the Period ended October 31, 2021
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of  $10,000 10/31/2011- 10/31/2021
R5 Class (1,3,5)	TOVIX		26.38	%		10.70	%		7.80	%		7.17	%		$	19,993
Y Class (1,2,5)	TOVYX		26.25	%		10.60	%		7.74	%		7.15	%		$	19,941
Investor Class (1,5)	TIVFX		26.01	%		10.38	%		7.62	%		7.08	%		$	19,824
MSCI EAFE Index (Net) (4)			34.18	%		11.54	%		9.79	%		7.37	%		$	20,358

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of fees charged to the Investor Class of the Fund was waived from Fund inception through 2019. Performance prior to waiving fees was lower than the actual returns shown for that period. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future.

2. Fund performance for the three-year, five-year and ten-year periods represents the total returns achieved by the Investor Class from 10/31/11 up to 1/18/19, the inception date of the Y Class. Expenses of the Y Class are lower than those of the Investor Class. As a result, total returns shown may be lower than they would have been had the Y Class been in existence since 10/31/11.

6

American Beacon Tocqueville International Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

3. Fund performance for the three-year, five-year and ten-year periods represents the total returns achieved by the Investor Class from 10/31/11 up to 1/18/19, the inception date of the R5 Class. Expenses of the R5 Class are lower than those of the Investor Class. As a result, total returns shown may be lower than they would have been had the R5 Class been in existence since 10/31/11. A portion of fees charged to the R5 Class has been waived since Class inception. Performance prior to waiving fees was lower than the actual returns shown since 2019.

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

5. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y and Investor Class shares were 0.91%, 0.99% and 1.18%, 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.

The Fund underperformed the Index over the twelve-month period ending October 31, 2021 due to both stock selection and country allocation.

Stock selections within the Netherlands, France and Hong Kong detracted from performance during the year. Detracting securities include Unilever PLC (down 90.7%) within the Netherlands, Accor SA (down 44.9%) within France, and Tencent Holdings Ltd. (down 7.7%) in Hong Kong. Meanwhile, stock selections within the United Kingdom and Ireland added to the Fund’s relative performance, while stock selections in Netherlands, France and Hong Kong detracted value. Contributing securities within the United Kingdom include IMI PLC (up 69.3%) and BP PLC, Sponsored ADR (up 47.9%), as well as CRH PLC (up 44.5%) within Ireland all helped performance.

The Fund’s underweight allocation to the Netherlands (up 63.2%) and overweight allocation to China (down 9.2%) which is out of index detracted the most. On the flip side, the Fund’s overweight allocation to France (up 48.1%) and allocation to Canada (up 49.1%) which is out of index added the most relative value.

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

Top Ten Holdings (% Net Assets)
EssilorLuxottica SA		3.3
Infineon Technologies AG		3.0
Siemens AG, ADR		2.9
CRH PLC		2.9
Hitachi Ltd.		2.9
Bollore SA		2.8
Bureau Veritas SA		2.8
Sony Group Corp., ADR		2.8
Diageo PLC, ADR		2.7
Samsung Electronics Co. Ltd.		2.7
Total Fund Holdings	53

7

American Beacon Tocqueville International Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

Sector Allocation (% Equities)
Industrials	23.9
Consumer Discretionary	13.1
Information Technology	12.7
Health Care	12.4
Communication Services	11.4
Consumer Staples	9.4
Materials	8.4
Financials	5.2
Energy	2.5
Real Estate	1.0
Country Allocation (% Equities)
Japan	21.9
Germany	17.6
France	17.0
United Kingdom	11.9
Switzerland	7.1
Canada	3.8
Mexico	3.0
Ireland	2.9
Republic of Korea	2.7
Belgium	2.5
Netherlands	2.1
China/Hong Kong	1.8
Australia	1.7
Spain	1.2
South Africa	0.9
Taiwan	0.8
United States	0.6
Austria	0.5

8

American Beacon Funds^SM

Expense Examples

October 31, 2021 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees, if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2021 through October 31, 2021.

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 R5 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 R5 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

October 31, 2021 (Unaudited)

American Beacon International Equity Fund
	Beginning Account Value 5/1/2021		Ending Account Value 10/31/2021		Expenses Paid During Period 5/1/2021-10/31/2021*
R5 Class
Actual		$1,000.00		$1,022.70		$3.77
Hypothetical**		$1,000.00		$1,021.48		$3.77
Y Class
Actual		$1,000.00		$1,021.70		$4.08
Hypothetical**		$1,000.00		$1,021.17		$4.08
Investor Class
Actual		$1,000.00		$1,020.80		$5.45
Hypothetical**		$1,000.00		$1,019.81		$5.45
Advisor Class
Actual		$1,000.00		$1,019.70		$6.16
Hypothetical**		$1,000.00		$1,019.11		$6.16
A Class
Actual		$1,000.00		$1,020.90		$5.86
Hypothetical**		$1,000.00		$1,019.41		$5.85
C Class
Actual		$1,000.00		$1,016.30		$9.55
Hypothetical**		$1,000.00		$1,015.73		$9.55
R6 Class
Actual		$1,000.00		$1,023.10		$3.57
Hypothetical**		$1,000.00		$1,021.68		$3.57

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.74%, 0.80%, 1.07%, 1.21%, 1.15%, 1.88%, and 0.70% for the R5, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

American Beacon Tocqueville International Value Fund
	Beginning Account Value 5/1/2021		Ending Account Value 10/31/2021		Expenses Paid  During Period 5/1/2021-10/31/2021*
R5 Class
Actual		$1,000.00		$995.90		$4.68
Hypothetical**		$1,000.00		$1,020.52		$4.74
Y Class
Actual		$1,000.00		$995.40		$5.03
Hypothetical**		$1,000.00		$1,020.16		$5.09
Investor Class
Actual		$1,000.00		$994.40		$6.13
Hypothetical**		$1,000.00		$1,019.06		$6.21

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.93%, 1.00%, and 1.22% for the R5, Y, and Investor Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

10

American Beacon Funds^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders of American Beacon International Equity Fund and American Beacon Tocqueville International Value Fund and the Board of Trustees of American Beacon Funds

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities of American Beacon International Equity Fund and American Beacon Tocqueville International Value Fund (the “Funds”), (two of the funds constituting American Beacon Funds (the “Trust”)), including the schedules of investments, as of October 31, 2021, and the related statements of operations, changes in net assets, and the financial highlights for each of the periods indicated in the table below and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds (two of the funds constituting American Beacon Funds) at October 31, 2021, and the results of their operations, changes in net assets and financial highlights for each of the periods indicated in the table below, in conformity with U.S. generally accepted accounting principles.

Individual fund constituting the American Beacon Funds	Statement of operations	Statements of changes in net assets	Financial highlights
American Beacon International Equity Fund	For the year ended October 31, 2021	For each of the two years in the period ended October 31, 2021	For each of the five years in the period ended October 31, 2021
American Beacon Tocqueville International Value Fund	For the year ended October 31, 2021	For each of the two years in the period ended October 31, 2021	For each of the three years in the period ended October 31, 2021

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

Basis for Opinion

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

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

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

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

Dallas, Texas

December 30, 2021

11

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
Canada - 3.01%
Common Stocks - 3.01%
Air CanadaA B		653,500		$	11,717,166
CAE, Inc.B		241,461			7,322,262
Cogeco Communications, Inc.		61,739			5,302,390
Linamar Corp.		142,695			7,848,456
Suncor Energy, Inc.		497,391			13,081,834
Teck Resources Ltd., Class B		667,456			18,622,022
Total Common Stocks					63,894,130
Total Canada (Cost $57,276,970)					63,894,130
China/Hong Kong - 3.76%
Common Stocks - 3.76%
Alibaba Group Holding Ltd.B		672,300			14,084,557
ArcelorMittal SA		177,698			6,023,908
Baidu, Inc., Class AB		824,800			17,173,395
ESR Cayman Ltd.B C		3,641,400			11,817,409
Sands China Ltd.B		4,049,200			9,253,233
Tencent Holdings Ltd.		347,300			21,470,510
Total Common Stocks					79,823,012
Total China/Hong Kong (Cost $93,201,112)					79,823,012
Denmark - 1.20%
Common Stocks - 1.20%
Carlsberg A/S, Class B		69,789			11,512,202
Vestas Wind Systems A/S		320,632			13,866,649
Total Common Stocks					25,378,851
Total Denmark (Cost $15,879,820)					25,378,851
Finland - 0.76%
Common Stocks - 0.76%
Nordea Bank Abp		853,507			10,441,249
Sampo OYJ, Class A		106,651			5,671,273
Total Common Stocks					16,112,522
Total Finland (Cost $13,050,394)					16,112,522
France - 14.35%
Common Stocks - 14.35%
Air Liquide SA		87,049			14,514,674
Airbus SEB		60,168			7,692,694
Alstom SA		370,118			13,169,419
Atos SE		178,961			9,305,413
AXA SA		644,881			18,756,336
BNP Paribas SA		432,951			28,978,446
Capgemini SE		57,311			13,336,429
Danone SA		177,379			11,554,573
Engie SA		1,220,658			17,350,646
Pernod Ricard SA		32,041			7,359,727
Publicis Groupe SA		351,205			23,523,231
Sanofi		793,979			79,328,878
Societe Generale SA		400,415			13,347,136
TotalEnergies SE		614,085			30,787,590
Valeo		222,404			6,512,318
Vinci SA		83,165			8,880,334
Total Common Stocks					304,397,844
Total France (Cost $264,204,299)					304,397,844

See accompanying notes

12

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
Germany - 10.39%
Common Stocks - 9.27%
adidas AG		19,350		$	6,337,024
BASF SE		232,393			16,731,290
Bayer AG		143,275			8,061,012
Bayerische Motoren Werke AG		311,665			31,431,237
Continental AGB		72,492			8,507,451
Daimler AG		277,216			27,476,383
Infineon Technologies AG		269,580			12,588,473
Merck KGaA		67,959			16,042,073
MTU Aero Engines AG		55,506			12,342,124
ProSiebenSat.1 Media SE		474,000			7,936,968
RWE AG		377,251			14,509,117
SAP SE		152,204			22,049,779
Siemens AG		77,378			12,547,900
Total Common Stocks					196,560,831
Preferred Stocks - 1.12%
Volkswagen AGD		106,061			23,763,592
Total Germany (Cost $169,280,419)					220,324,423
Ireland - 1.17% (Cost $16,534,246)
Common Stocks - 1.17%
Ryanair Holdings PLC, ADRB		218,727			24,827,702
Israel - 0.54% (Cost $7,262,049)
Common Stocks - 0.54%
Bank Leumi Le-Israel BM		1,193,580			11,380,002
Italy - 3.42%
Common Stocks - 3.42%
Enel SpA		3,596,260			30,082,050
Eni SpA		634,403			9,096,719
UniCredit SpA		2,527,156			33,373,982
Total Common Stocks					72,552,751
Total Italy (Cost $68,921,477)					72,552,751
Japan - 16.48%
Common Stocks - 16.48%
Alfresa Holdings Corp.		686,000			9,630,182
Asics Corp.		229,000			5,690,090
Bandai Namco Holdings, Inc.		92,700			7,065,452
Daiwa House Industry Co. Ltd.		425,855			14,015,197
Digital Garage, Inc.		141,600			6,584,602
Dowa Holdings Co. Ltd.		124,500			5,183,176
FANUC Corp.		109,000			21,336,170
Fujitsu Ltd.		58,384			10,052,959
Haseko Corp.		1,013,000			13,163,001
Hazama Ando Corp.		501,200			3,386,041
Hitachi Ltd.		286,300			16,463,349
Makita Corp.		248,900			11,493,404
Matsumotokiyoshi Holdings Co. Ltd.A		196,100			8,654,380
Mitsubishi UFJ Financial Group, Inc.		5,255,100			28,701,906
Mizuho Financial Group, Inc.		1,215,680			16,052,629
Murata Manufacturing Co. Ltd.		167,500			12,716,627
Nexon Co. Ltd.		331,259			5,612,293
Nippon Television Holdings, Inc.		118,900			1,283,150

See accompanying notes

13

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
Japan - 16.48% (continued)
Common Stocks - 16.48% (continued)
Nissan Motor Co. Ltd.A B		4,230,600		$	21,432,318
Ryohin Keikaku Co. Ltd.		349,400			6,860,778
Sompo Holdings, Inc.		113,600			4,931,720
Sumitomo Mitsui Financial Group, Inc.		838,400			27,371,673
Sumitomo Rubber Industries Ltd.		730,700			8,981,888
Suzuken Co. Ltd.		273,700			7,588,436
Suzuki Motor Corp.		195,200			8,691,731
Taisei Corp.		385,300			12,068,620
Takeda Pharmaceutical Co. Ltd.		1,283,000			36,055,705
Toho Holdings Co. Ltd.		233,500			3,763,453
Yamaha Corp.		231,400			14,577,337
Total Common Stocks					349,408,267
Total Japan (Cost $357,187,571)					349,408,267
Netherlands - 4.04%
Common Stocks - 4.04%
Aegon NV		4,260,257			21,595,496
Akzo Nobel NV		194,108			22,308,737
ING Groep NV		382,881			5,807,048
JDE Peet’s NV		151,469			4,410,722
Royal Dutch Shell PLC, Class A		383,434			8,850,809
Universal Music Group NV		288,731			8,382,709
Wolters Kluwer NV		136,722			14,325,708
Total Common Stocks					85,681,229
Total Netherlands (Cost $68,719,398)					85,681,229
Norway - 0.77%
Common Stocks - 0.77%
Equinor ASA		250,045			6,326,675
Telenor ASA		638,123			10,072,764
Total Common Stocks					16,399,439
Total Norway (Cost $14,617,884)					16,399,439
Portugal - 0.35% (Cost $7,690,515)
Common Stocks - 0.35%
Galp Energia SGPS SA		702,840			7,305,847
Republic of Korea - 1.95%
Common Stocks - 1.95%
Hana Financial Group, Inc.		85,396			3,288,537
Osstem Implant Co. Ltd.		43,066			4,551,496
Samsung Electronics Co. Ltd.		327,258			19,547,823
SK Hynix, Inc.		159,418			14,051,649
Total Common Stocks					41,439,505
Total Republic of Korea (Cost $34,882,522)					41,439,505
Singapore - 0.55% (Cost $7,119,417)
Common Stocks - 0.55%
DBS Group Holdings Ltd.		502,510			11,749,455
South Africa - 0.45% (Cost $10,253,811)
Common Stocks - 0.45%
Anglo American PLC		252,956			9,632,545

See accompanying notes

14

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
Spain - 4.34%
Common Stocks - 4.34%
Aena SME SAB C		73,647		$	12,059,503
Amadeus IT Group SAB		324,716			21,711,497
Banco Bilbao Vizcaya Argentaria SA		1,892,446			13,261,639
Banco Santander SA		2,853,058			10,806,338
CaixaBank SA		4,119,333			11,833,442
Indra Sistemas SAB		455,059			5,497,203
Industria de Diseno Textil SA		316,318			11,423,330
Telefonica SA		1,260,507			5,485,426
Total Common Stocks					92,078,378
Total Spain (Cost $75,527,079)					92,078,378
Sweden - 0.98%
Common Stocks - 0.98%
Sandvik AB		540,718			13,694,244
Swedbank AB, Class AA		323,314			7,011,411
Total Common Stocks					20,705,655
Total Sweden (Cost $17,994,204)					20,705,655
Switzerland - 6.45%
Common Stocks - 6.45%
ABB Ltd.		419,274			13,870,478
Cie Financiere Richemont SA, Class A		81,197			10,029,905
Credit Suisse Group AG		3,426,755			35,674,780
Novartis AG		558,197			46,114,046
Roche Holding AG		40,843			15,793,430
Zurich Insurance Group AG		34,415			15,256,715
Total Common Stocks					136,739,354
Total Switzerland (Cost $127,816,871)					136,739,354
United Kingdom - 19.16%
Common Stocks - 19.16%
3i Group PLC		501,341			9,358,548
AstraZeneca PLC		126,739			15,773,429
AstraZeneca PLC, ADR		555,962			34,680,910
BAE Systems PLC		1,647,827			12,443,834
Balfour Beatty PLC		475,883			1,654,226
Barclays PLC		17,559,243			48,602,120
BP PLC		4,672,921			22,395,743
British American Tobacco PLC		338,438			11,794,613
BT Group PLCB		1,139,675			2,166,427
Capita PLCB		3,019,838			1,956,468
Compass Group PLCB		503,875			10,688,467
GlaxoSmithKline PLC		1,960,812			40,482,838
Imperial Brands PLC		825,502			17,420,611
Prudential PLC		1,154,239			23,607,639
RELX PLC		1,002,467			31,062,296
Rolls-Royce Holdings PLCB		17,387,162			31,371,609
Standard Chartered PLC		1,085,814			7,354,172
Taylor Wimpey PLC		8,604,690			18,199,738
Tesco PLCA		3,694,321			13,645,781
Unilever PLC		510,250			27,317,613
WH Smith PLCB		360,789			7,712,501
WPP PLC		1,158,424			16,741,423
Total Common Stocks					406,431,006
Total United Kingdom (Cost $366,576,559)					406,431,006
United States - 1.65%
Common Stocks - 1.65%
Aon PLC, Class A		62,474			19,986,682
BRP, Inc.A		64,896			5,706,192
Ferguson PLCA		62,112			9,346,126
Total Common Stocks					35,039,000
Total United States (Cost $16,063,401)					35,039,000

See accompanying notes

15

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
SHORT-TERM INVESTMENTS - 2.79% (Cost $59,062,485)
Investment Companies - 2.79%
American Beacon U.S. Government Money Market Select Fund, 0.01%E F		59,062,485		$	59,062,485
SECURITIES LENDING COLLATERAL - 0.36% (Cost $7,655,136)
Investment Companies - 0.36%
American Beacon U.S. Government Money Market Select Fund, 0.01%E F		7,655,136			7,655,136
TOTAL INVESTMENTS - 98.92% (Cost $1,876,777,639)					2,098,018,538
OTHER ASSETS, NET OF LIABILITIES - 1.08%					22,806,112
TOTAL NET ASSETS - 100.00%				$	2,120,824,650
Percentages are stated as a percent of net assets.

^A All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2021 (Note 9).

^B Non-income producing security.

^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 $23,876,912 or 1.13% of net assets. The Fund has no right to demand registration of these securities.

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

^E 7-day yield.

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

ADR - American Depositary Receipt.

PLC - Public Limited Company.

Long Futures Contracts Open on October 31, 2021:

Equity Futures Contracts

Description	Number of Contracts	Expiration Date	Notional Amount	Contract Value		Unrealized Appreciation (Depreciation)
MSCI EAFE Index	534	December 2021	$       61,255,842	$	62,467,320	$	1,211,478
			$       61,255,842	$	62,467,320	$	1,211,478

Index Abbreviations:
MSCI EAFE	Morgan Stanley Capital International – Europe, Australasia, and Far East.

See accompanying notes

16

American Beacon International Equity Fund^SM

Schedule of Investments

October 31, 2021

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2021, the investments were classified as described below:

International Equity Fund	Level 1		Level 2		Level 3		Total
Assets
Foreign Common Stocks
Canada	$	63,894,130	$	-	$	-	$	63,894,130
China/Hong Kong		79,823,012		-		-		79,823,012
Denmark		25,378,851		-		-		25,378,851
Finland		16,112,522		-		-		16,112,522
France		304,397,844		-		-		304,397,844
Germany		196,560,831		-		-		196,560,831
Ireland		24,827,702		-		-		24,827,702
Israel		11,380,002		-		-		11,380,002
Italy		72,552,751		-		-		72,552,751
Japan		349,408,267		-		-		349,408,267
Netherlands		85,681,229		-		-		85,681,229
Norway		16,399,439		-		-		16,399,439
Portugal		7,305,847		-		-		7,305,847
Republic of Korea		41,439,505		-		-		41,439,505
Singapore		11,749,455		-		-		11,749,455
South Africa		9,632,545		-		-		9,632,545
Spain		92,078,378		-		-		92,078,378
Sweden		20,705,655		-		-		20,705,655
Switzerland		136,739,354		-		-		136,739,354
United Kingdom		406,431,006		-		-		406,431,006
Foreign Preferred Stocks
Germany		23,763,592		-		-		23,763,592
Common Stocks
United States		35,039,000		-		-		35,039,000
Short-Term Investments		59,062,485		-		-		59,062,485
Securities Lending Collateral		7,655,136		-		-		7,655,136
Total Investments in Securities - Assets	$	2,098,018,538	$	-	$	-	$	2,098,018,538
Financial Derivative Instruments - Assets
Futures Contracts	$	1,211,478	$	-	$	-	$	1,211,478
Total Financial Derivative Instruments - Assets	$	1,211,478	$	-	$	-	$	1,211,478

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2021, there were no transfers into or out of Level 3.

See accompanying notes

17

American Beacon Tocqueville International Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
Australia - 1.68% (Cost $4,665,269)
Common Stocks - 1.68%
BHP Group Ltd., ADRA		110,800		$	6,076,272
Austria - 0.52% (Cost $1,947,212)
Common Stocks - 0.52%
ams AGB		95,100			1,878,942
Belgium - 2.47% (Cost $6,495,378)
Common Stocks - 2.47%
Groupe Bruxelles Lambert SA		77,312			8,959,609
Canada - 3.79%
Common Stocks - 3.79%
Nutrien Ltd.		100,000			6,991,000
Restaurant Brands International, Inc.		119,000			6,740,160
Total Common Stocks					13,731,160
Total Canada (Cost $11,275,813)					13,731,160
China/Hong Kong - 1.81%
Common Stocks - 1.81%
Shangri-La Asia Ltd.B		3,709,000			3,022,307
Swire Pacific Ltd., Class A		560,000			3,523,167
Total Common Stocks					6,545,474
Total China/Hong Kong (Cost $7,809,486)					6,545,474
France - 16.86%
Common Stocks - 16.86%
Accor SAB		171,300			6,120,884
Bollore SA		1,772,000			10,262,643
Bureau Veritas SA		317,798			10,088,102
EssilorLuxottica SA		58,101			12,015,774
JCDecaux SAB		105,741			2,757,657
Orpea SA		60,000			6,256,271
Sanofi		78,000			7,793,220
Vivendi SE		445,400			5,733,215
Total Common Stocks					61,027,766
Total France (Cost $52,521,072)					61,027,766
Germany - 17.43%
Common Stocks - 15.37%
adidas AG		27,750			9,087,980
Duerr AG		129,500			5,853,348
GEA Group AG		87,064			4,286,512
Infineon Technologies AG		236,000			11,020,401
KION Group AG		43,200			4,714,260
Siemens AG, ADR		130,000			10,619,700
Software AG		154,600			6,355,197
Stroeer SE & Co. KGaA		43,707			3,703,503
Total Common Stocks					55,640,901
Preferred Stocks - 2.06%
Henkel AG & Co. KGaAC		83,200			7,442,346
Total Germany (Cost $43,785,202)					63,083,247

See accompanying notes

18

American Beacon Tocqueville International Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
Ireland - 2.87% (Cost $7,042,790)
Common Stocks - 2.87%
CRH PLC		216,400		$	10,376,569
Japan - 21.64%
Common Stocks - 21.64%
Amano Corp.		314,103			7,741,306
Asahi Group Holdings Ltd.		198,300			8,972,433
FANUC Corp.		39,700			7,771,064
Hitachi Ltd.		179,768			10,337,350
Hoya Corp.		55,600			8,158,895
Makita Corp.		156,500			7,226,668
Rohm Co. Ltd.		64,700			5,892,397
Sony Group Corp., ADRA		86,800			10,050,572
TBS Holdings, Inc.		373,700			5,901,821
Toyota Industries Corp.		74,200			6,288,853
Total Common Stocks					78,341,359
Total Japan (Cost $54,164,394)					78,341,359
Mexico - 2.91%
Common Stocks - 2.91%
Fomento Economico Mexicano SAB de CV, ADR		69,500			5,712,205
Grupo Televisa SAB, ADR		477,000			4,827,240
Total Common Stocks					10,539,445
Total Mexico (Cost $8,771,870)					10,539,445
Netherlands - 2.09% (Cost $7,726,737)
Common Stocks - 2.09%
Universal Music Group NV		261,000			7,577,597
Republic of Korea - 2.70% (Cost $5,361,805)
Preferred Stocks - 2.70%
Samsung Electronics Co. Ltd.C		178,800			9,792,649
South Africa - 0.86% (Cost $3,549,353)
Common Stocks - 0.86%
Impala Platinum Holdings Ltd.		240,900			3,122,474
Spain - 1.20% (Cost $4,739,979)
Common Stocks - 1.20%
Applus Services SA		478,300			4,329,322
Switzerland - 6.98%
Common Stocks - 6.98%
Alcon, Inc.A		105,000			8,752,800
Novartis AG, ADR		83,000			6,869,080
UBS Group AGA B		531,860			9,653,259
Total Common Stocks					25,275,139
Total Switzerland (Cost $18,798,905)					25,275,139
Taiwan - 0.82% (Cost $1,158,352)
Common Stocks - 0.82%
Taiwan Semiconductor Manufacturing Co. Ltd., ADR		26,100			2,967,570

See accompanying notes

19

American Beacon Tocqueville International Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
United Kingdom - 11.80%
Common Stocks - 11.80%
BP PLC, ADR		309,000		$	8,896,110
Diageo PLC, ADR		49,600			9,903,632
IMI PLC		222,800			4,982,280
Johnson Matthey PLC		97,800			3,657,963
Smith & Nephew PLC		378,200			6,495,703
Smiths Group PLC		380,400			7,056,688
Unilever PLC, ADR		32,000			1,714,560
Total Common Stocks					42,706,936
Total United Kingdom (Cost $35,341,149)					42,706,936
United States - 0.53% (Cost $1,838,391)
Common Stocks - 0.53%
Clarivate PLCB		82,000			1,922,900
SHORT-TERM INVESTMENTS - 0.72% (Cost $2,625,986)
Investment Companies - 0.72%
American Beacon U.S. Government Money Market Select Fund, 0.01%D E		2,625,986			2,625,986
SECURITIES LENDING COLLATERAL - 1.67% (Cost $6,038,135)
Investment Companies - 1.67%
American Beacon U.S. Government Money Market Select Fund, 0.01%D E		6,038,135			6,038,135
TOTAL INVESTMENTS - 101.35% (Cost $285,657,278)					366,918,551
LIABILITIES, NET OF OTHER ASSETS - (1.35%)					(4,893,967	)
TOTAL NET ASSETS - 100.00%				$	362,024,584
Percentages are stated as a percent of net assets.

^A All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2021 (Note 9).

^B Non-income producing security.

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

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

^E 7-day yield.

ADR - American Depositary Receipt.

PLC - Public Limited Company.

See accompanying notes

20

American Beacon Tocqueville International Value Fund^SM

Schedule of Investments

October 31, 2021

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2021, the investments were classified as described below:

Tocqueville International Value Fund	Level 1		Level 2		Level 3		Total
Assets
Foreign Common Stocks
Australia	$	6,076,272	$	-	$	-	$	6,076,272
Austria		1,878,942		-		-		1,878,942
Belgium		8,959,609		-		-		8,959,609
Canada		13,731,160		-		-		13,731,160
China/Hong Kong		6,545,474		-		-		6,545,474
France		61,027,766		-		-		61,027,766
Germany		55,640,901		-		-		55,640,901
Ireland		10,376,569		-		-		10,376,569
Japan		78,341,359		-		-		78,341,359
Mexico		10,539,445		-		-		10,539,445
Netherlands		7,577,597		-		-		7,577,597
South Africa		3,122,474		-		-		3,122,474
Spain		4,329,322		-		-		4,329,322
Switzerland		25,275,139		-		-		25,275,139
Taiwan		2,967,570		-		-		2,967,570
United Kingdom		42,706,936		-		-		42,706,936
Foreign Preferred Stocks
Germany		7,442,346		-		-		7,442,346
Republic of Korea		9,792,649		-		-		9,792,649
Common Stocks
United States		1,922,900		-		-		1,922,900
Short-Term Investments		2,625,986		-		-		2,625,986
Securities Lending Collateral		6,038,135		-		-		6,038,135
Total Investments in Securities - Assets	$	366,918,551	$	-	$	-	$	366,918,551

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2021, there were no transfers into or out of Level 3.

See accompanying notes

21

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2021

	International Equity Fund		Tocqueville International Value Fund
Assets:
Investments in unaffiliated securities, at fair value†§	$	2,031,300,917	$	358,254,430
Investments in affiliated securities, at fair value‡		66,717,621		8,664,121
Foreign currency, at fair value¤		46,529		–
Cash		2,859		–
Cash collateral held at broker for futures contracts		5,130,000		–
Dividends and interest receivable		6,349,454		570,023
Receivable for investments sold		5,852,452		848,644
Receivable for fund shares sold		23,753,630		145,819
Receivable for tax reclaims		5,372,386		1,924,136
Receivable for expense reimbursement (Note 2)		44,240		–
Receivable for variation margin on open futures contracts (Note 5)		1,212,658		–
Prepaid expenses		59,836		16,737
Total assets		2,145,842,582		370,423,910
Liabilities:
Payable for investments purchased		3,270,316		606,221
Payable for foreign currency, at fair value^		-		1,080,733
Payable for fund shares redeemed		9,282,015		135,728
Payable for expense recoupment (Note 2)		-		54,732
Cash due to broker for futures contracts		1,727,954		–
Management and sub-advisory fees payable (Note 2)		2,196,251		206,328
Service fees payable (Note 2)		50,340		32,831
Transfer agent fees payable (Note 2)		83,239		17,354
Payable upon return of securities loaned (Note 9)§		7,655,136		6,038,135
Custody and fund accounting fees payable		461,887		91,694
Professional fees payable		81,603		69,442
Trustee fees payable (Note 2)		12,789		1,907
Payable for prospectus and shareholder reports		151,584		36,498
Other liabilities		44,818		27,723
Total liabilities		25,017,932		8,399,326
Net assets	$	2,120,824,650	$	362,024,584
Analysis of net assets:
Paid-in-capital	$	1,732,646,841	$	283,374,642
Total distributable earnings (deficits)A		388,177,809		78,649,942
Net assets	$	2,120,824,650	$	362,024,584

See accompanying notes

22

American Beacon Funds^SM

Statements of Assets and Liabilities

October 31, 2021

	International Equity Fund		Tocqueville International Value Fund
Shares outstanding at no par value (unlimited shares authorized):
R5 Class		65,481,650		1,069,136
Y Class		11,031,379		8,229,178
Investor Class		6,300,708		9,204,649
Advisor Class		906,329		N/A
A Class		499,498		N/A
C Class		223,996		N/A
R6 Class		19,548,253		N/A
Net assets:
R5 Class	$	1,329,626,349	$	20,907,091
Y Class	$	233,692,916	$	160,793,226
Investor Class	$	126,691,864	$	180,324,267
Advisor Class	$	18,745,607	$	N/A
A Class	$	10,017,801	$	N/A
C Class	$	4,317,179	$	N/A
R6 Class	$	397,732,934	$	N/A
Net asset value, offering and redemption price per share:
R5 Class	$	20.31	$	19.56
Y Class	$	21.18	$	19.54
Investor Class	$	20.11	$	19.59
Advisor Class	$	20.68	$	N/A
A Class	$	20.06	$	N/A
A Class (offering price)	$	21.28	$	N/A
C Class	$	19.27	$	N/A
R6 Class	$	20.35	$	N/A
† Cost of investments in unaffiliated securities	$	1,810,060,018	$	276,993,157
‡ Cost of investments in affiliated securities	$	66,717,621	$	8,664,121
§ Fair value of securities on loan	$	33,717,931	$	16,345,020
¤ Cost of foreign currency	$	46,660	$	–
^ Cost of payable for foreign currency	$	-	$	(1,085,146	)
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

23

American Beacon Funds^SM

Statements of Operations

For the year ended October 31, 2021

	International Equity Fund			Tocqueville International Value Fund
Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	73,804,049	A	$	14,877,639	B
Dividend income from affiliated securities (Note 2)		6,626			406
Income derived from securities lending (Note 9)		1,065,439			661,760
Total investment income		74,876,114			15,539,805
Expenses:
Management and sub-advisory fees (Note 2)		15,494,962			2,879,172
Transfer agent fees:
R5 Class (Note 2)		382,282			11,032
Y Class (Note 2)		748,510			148,391
Investor Class		7,165			10,521
Advisor Class		1,345			-
A Class		3,558			-
C Class		2,797			-
R6 Class		24,468			-
Custody and fund accounting fees		790,217			98,718
Professional fees		252,945			118,315
Registration fees and expenses		146,080			55,451
Service fees (Note 2):
Investor Class		404,950			699,268
Advisor Class		46,182			-
A Class		16,348			-
C Class		4,715			-
Distribution fees (Note 2):
Advisor Class		47,633			-
A Class		27,232			-
C Class		44,431			-
Prospectus and shareholder report expenses		336,576			-
Trustee fees (Note 2)		169,786			25,186
Loan expense (Note 10)		12,522			3,081
Other expenses		343,999			61,521
Total expenses		19,308,703			4,110,656
Net fees waived and expenses (reimbursed) (Note 2)		(54,858	)		(2,785	)
Net expenses		19,253,845			4,107,871
Net investment income		55,622,269			11,431,934
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesC		280,867,172			33,490,298
Commission recapture (Note 1)		16,186			-
Foreign currency transactions		44,158			(256,002	)
Futures contracts		20,510,579			-
Change in net unrealized appreciation (depreciation) of:
Investments in unaffiliated securitiesD		443,808,489			41,854,115
Foreign currency transactions		(416,214	)		(45,853	)
Futures contracts		3,210,757			-
Net gain from investments		748,041,127			75,042,558
Net increase in net assets resulting from operations	$	803,663,396		$	86,474,492
† Foreign taxes	$	9,193,131		$	2,055,505
A Includes significant dividends from one issuer of $7,780,139.
B Includes significant dividends from one issuer of $6,570,531.
C The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
D The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.

See accompanying notes

24

American Beacon Funds^SM

Statements of Changes in Net Assets

	International Equity Fund						Tocqueville International Value Fund
	Year Ended October 31, 2021			Year Ended October 31, 2020			Year Ended October 31, 2021			Year Ended October 31, 2020
Increase (decrease) in net assets:
Operations:
Net investment income	$	55,622,269		$	44,031,672		$	11,431,934		$	3,137,388
Net realized gain (loss) from investments in unaffiliated securities, commission recapture, foreign currency transactions and futures contracts		301,438,095			(109,117,617	)		33,234,296			(41,543,654	)
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions and futures contracts		446,603,032			(334,130,907	)		41,808,262			27,876,142
Net increase (decrease) in net assets resulting from operations		803,663,396			(399,216,852	)		86,474,492			(10,530,124	)
Distributions to shareholders:
Total retained earnings:
R5 Class		(19,243,533	)		(43,205,283	)		(153,791	)		(913,408	)
Y Class		(12,813,335	)		(24,303,477	)		(658,999	)		(5,529,636	)
Investor Class		(1,252,478	)		(5,738,579	)		(746,996	)		(5,612,764	)
Advisor Class		(149,763	)		(1,077,549	)		-			-
A Class		(146,453	)		(369,593	)		-			-
C Class		(25,086	)		(117,950	)		-			-
R6 Class		(6,209,328	)		(6,125,156	)		-			-
Net distributions to shareholders		(39,839,976	)		(80,937,587	)		(1,559,786	)		(12,055,808	)
Capital share transactions (Note 11):
Proceeds from sales of shares		672,415,177			961,004,171			73,601,571			65,256,388
Reinvestment of dividends and distributions		38,609,524			76,255,966			1,341,676			9,872,145
Cost of shares redeemed		(1,398,901,051	)		(1,375,328,666	)		(153,630,756	)		(318,581,846	)
Net (decrease) in net assets from capital share transactions		(687,876,350	)		(338,068,529	)		(78,687,509	)		(243,453,313	)
Net increase (decrease) in net assets		75,947,070			(818,222,968	)		6,227,197			(266,039,245	)
Net assets:
Beginning of year		2,044,877,580			2,863,100,548			355,797,387			621,836,632
End of year	$	2,120,824,650		$	2,044,877,580		$	362,024,584		$	355,797,387

See accompanying notes

25

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Funds, each a series within the Trust, are registered under the Investment Company Act of 1940, as amended (the “Act”), as diversified, open-end management investment companies. As of October 31, 2021, the Trust consists of twenty-eight active series, two of which are presented in this filing: American Beacon International Equity Fund and American Beacon Tocqueville International Value Fund (collectively, the “Funds” and each individually a “Fund”). The remaining twenty-six 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.

In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives a fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how a fund will use derivatives, may adversely affect a fund’s performance and may increase costs related to a fund’s use of derivatives.

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
R5 Class	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 Class	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500

26

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

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

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

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. Tax reclaim accruals are automatically generated on accounting and custody systems at the time of the income event based on the tax databases maintained by the Funds’ custodian. Reconciliations are performed between custody and accounting systems to help ensure reclaim accruals are in line. Estimated tax liabilities on certain foreign securities are recorded on an accrual basis and are reflected as components of interest income or net change in unrealized appreciation (depreciation) on investments on the Statements of Operations, as appropriate. Tax liabilities realized as a result of such security sales are reflected as a component of net realized gain (loss) on investments on the Statements of Operations. Interest income, net of foreign taxes, is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. Realized gains (losses) from securities sold are determined based on specific lot identification.

Currency Translation

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

27

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

Distributions to Shareholders

The Funds distribute most or all of their 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 they will pay any distributions in any particular period. Dividends to shareholders are determined in accordance with federal income tax regulations, which may differ in amount and character from net investment income and realized gains recognized for purposes of U.S. GAAP. To the extent necessary to fully distribute capital gains, the Funds may designate earnings and profits distributed to shareholders on the redemption of shares.

Commission Recapture

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

Allocation of Income, Trust Expenses, Gains, and Losses

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

Use of Estimates

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

Other

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

2.  Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

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

International Equity Fund

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

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Tocqueville International Value Fund

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

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

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

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

The Management and Sub-Advisory Fees paid by the Funds for the year ended October 31, 2021 were as follows:

International Equity Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	8,961,334
Sub-Advisor Fees		0.26	%		6,533,628
Total		0.61	%	$	15,494,962

Tocqueville International Value Fund

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	1,382,514
Sub-Advisor Fees		0.40	%		1,496,658
Total		0.75	%	$	2,879,172

As compensation for services provided by the Manager in connection with securities lending activities conducted by the Funds, the lending Fund pays to the Manager, with respect to cash collateral posted by borrowers, a fee of 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee of 10% of such loan fees. 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. These fees are included in “Income derived from securities lending” and “Management and investment advisory fees” on the Statements of Operations. During the year ended October 31, 2021, the Manager received securities lending fees of $113,627 and $72,989 for the securities lending activities of International Equity Fund and Tocqueville International Value Fund, respectively.

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October 31, 2021

Distribution Plans

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

Service Plans

The Investor, Advisor, 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 Advisor 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 R5 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, R5 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 R5 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 R5 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 R5 and Y Classes on an annual basis. During the year ended October 31, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statements of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
International Equity	$	1,053,642
Tocqueville International Value		147,671

As of October 31, 2021, the Funds owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statements of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
International Equity	$	67,032
Tocqueville International Value		14,043

Investments in Affiliated Funds

The Funds may invest in the American Beacon U.S. Government Money Market Select Fund (the “USG Select Fund”). Cash collateral received by the Funds in connection with securities lending may also be invested in the USG

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Select Fund. The Funds listed below held the following shares with an October 31, 2021 fair value and dividend income earned from the investment in the USG Select Fund.

Affiliated Security	Type of Transaction	Fund	October 31, 2021 Shares/Principal		Change in Unrealized Gain (Loss)		Realized Gain (Loss)		Dividend Income		October 31, 2021 Fair Value
U.S. Government Money Market Select Fund	Direct	International Equity	$	59,062,485	$	-	$	-	$	6,626	$	59,062,485
U.S. Government Money Market Select Fund	Securities Lending	International Equity		7,655,136		-		-		N/A		7,655,136
U.S. Government Money Market Select Fund	Direct	Tocqueville International Value		2,625,986		-		-		406		2,625,986
U.S. Government Money Market Select Fund	Securities Lending	Tocqueville International Value		6,038,135		-		-		N/A		6,038,135

The Funds and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended October 31, 2021, the Manager earned fees on the Funds’ direct investments and securities lending collateral investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral Investments in USG Select Fund		Total
International Equity	$	79,650	$	21,048	$	100,698
Tocqueville International Value		4,591		5,936		10,527

Interfund Credit Facility

Pursuant to an exemptive order issued by SEC, the Funds, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2021, the International Equity Fund participated as a lender by loaning an amount of $10,651,379 for 1 day at an interest rate of 0.82% with interest charges of $239. This amount is included in “Interest income” on the Statements of Operations. The Tocqueville International Value Fund borrowed on average $1,341,485 for 27 days at an average interest rate of 0.82% with interest charges of $815. This amount is recorded as “Other expenses” in the Statements of Operations.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the R6 Class of the International Equity Fund and the R5 and Y Classes of the Tocqueville International Value Fund, through February 28, 2022, to the extent that total operating expenses (excluding taxes, interest, brokerage

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commissions, acquired fund fees and expenses, securities lending fees, expenses associated with securities sold short, litigation, and other extraordinary expenses) exceed the expense cap. During the year ended October 31, 2021, the Manager waived and/or reimbursed expenses as follows:

		Expense Cap
Fund	Class	11/1/2020 - 2/28/2021			3/1/2021 - 10/31/2021			Reimbursed Expenses		(Recouped) Expenses			Expiration of Reimbursed Expenses
International Equity	R6		0.69	%		0.69	%	$	54,858	$	(27,656	)*		2023-2024
Tocqueville International Value	R5		0.89	%		0.89	%		2,785		(1,418	)*		2023-2024
Tocqueville International Value	Y		0.99	%		0.99	%		-		-			2023-2024
Tocqueville International Value	Investor		1.25	%		N/A			-		-			2023-2024

* This amount represents Recouped Expenses from prior fiscal years and is reflected in Other Expenses on the Statements of Operations.

Of the above amounts, $44,240 was disclosed as a Receivable for expense reimbursement and $54,732 was disclosed as a Payable for expense recoupment on the Statements of Assets and Liabilities at October 31, 2021 for the International Equity Fund and Tocqueville International Value 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 from 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 2023 and 2024. The Funds 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
International Equity	$	3,462	$	-	$	-		2021-2022
International Equity		24,194		67,213		-		2022-2023
Tocqueville International Value		1,418		3,057		-		2022-2023

Sales Commissions

The Funds’ 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 October 31, 2021, RID collected $202 for International Equity Fund from the sale of Class A Shares. The Tocqueville International Value Fund does not offer Class A Shares.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Funds’ Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2021, there were no CDSC fees collected for the Class A Shares of the International Equity Fund.

A CDSC of 1.00% will be deducted with respect to Class C of the International Equity Fund 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.

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October 31, 2021

During the year ended October 31, 2021, CDSC fees of $7 were collected for the Class C Shares of International Equity Fund. The Tocqueville International Value Fund does not offer Class C Shares.

Trustee Fees and Expenses

Effective January 1, 2021, 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 and Compliance Committee and the Investment Committee, (c) $1,000 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. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. 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 and Compliance 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 $10,000.

3.  Security Valuation and Fair Value Measurements

The price of a Fund’s shares is based on its net asset value (“NAV”) per share. Each 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 a Fund’s shares is determined based on a pro rata allocation of a Fund’s investment income, expenses and total capital gains and losses. A 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, a Fund’s NAV per share typically would still be determined as of the regular close of trading on the NYSE. The Funds do not price their shares on days that the NYSE is closed. Foreign exchanges may permit trading in foreign securities on days when a Fund is not open for business, which may result in the value of a 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 a Fund holds securities or other assets that are denominated in a foreign currency, a 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

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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 a Fund occurs after the close of a related exchange but before the determination of a 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 Funds may fair value securities as a result of significant events occurring after the close of the foreign markets in which a Fund invests as described below. In addition, the Funds may invest in illiquid securities requiring these procedures.

A Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before a 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 a Fund is open. A 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 a Fund’s fair valuation procedures. If any significant discrepancies are found, the Manager may adjust a 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 a Fund’s own assumptions about the factors market participants would use in pricing an investment.

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October 31, 2021

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

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

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

OTC financial derivative instruments, such as forward foreign currency contracts derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors. These contracts are normally valued on the basis of broker dealer quotations or pricing service providers. Depending on the product and the terms of the transaction, the fair value of the financial derivative contracts can be estimated by a pricing service provider using a series of techniques, including simulation pricing models. The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest rates, curves, dividends, and exchange rates. Financial derivatives that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Level 3 trading assets and trading liabilities, at fair value

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

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

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

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

4.  Securities and Other Investments

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.

Depositary Receipts and U.S. Dollar-Denominated Foreign Stocks Traded on U.S. Exchanges

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

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.

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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, 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 a 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, a Fund may get only limited information about an issuer, so it may be less able to predict a loss. A 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 a Fund qualify under Rule 144A and an institutional market develops for those securities, a 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 a 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 a 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 a 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. The Manager and the sub-advisor will carefully monitor a Fund’s investments in Section 4(a)(2) securities offered and sold under Rule 144A, focusing on such important factors, among others, as valuation, liquidity, and availability of information. Investments in Section 4(a)(2) securities could have the effect of reducing a Fund’s liquidity to the extent that qualified institutional buyers no longer wish to purchase these restricted securities.

Restricted securities outstanding during the year ended October 31, 2021 are disclosed in the Notes to the Schedules of Investments.

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October 31, 2021

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 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 invest 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.

Preferred Stock

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 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 typically set at a fixed annual rate, in some circumstances it can be variable, changed or omitted by the issuer. Preferred stocks are subject to the risks associated with other types of equity securities, as well as additional risks, such as credit risk, interest rate risk, potentially greater volatility and risks related to deferral, non-cumulative dividends, subordination, liquidity, limited voting rights, and special redemption rights.

5.  Financial Derivative Instruments

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

Futures Contracts

A futures contract is a contract to purchase or sell a particular security, or the cash value of an asset, such as securities, indices, or currencies, at a specified future date at a price agreed upon when the contract is made. Under many such contracts, no delivery of the actual underlying asset is required. Rather, upon the expiration of the contract, settlement is made by exchanging cash in an amount equal to the difference between the contract price and the closing price of the asset (e.g., a security or an index) at expiration, net of the initial and variation margin that was previously paid. A Treasury futures contract is a contract for the future delivery of a U.S. Treasury security. An equity index futures contract is based on the value of an underlying index. A Fund may, from time to time, use futures positions to equitize cash and expose its portfolio to changes in securities prices or index prices. This can magnify gains and losses in a Fund. A Fund also may have to sell assets at inopportune times to satisfy its settlement or collateral obligations. The risks associated with the use of futures contracts also include that there may be an imperfect correlation between the changes in market value of the prices of futures contracts and the assets underlying such contracts and that there may not be a liquid secondary market for a futures contract.

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Notes to Financial Statements

October 31, 2021

During the year ended October 31, 2021, the International Equity Fund entered into futures contracts primarily for exposing cash to markets.

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

Average Futures Contracts Outstanding
Fund	Year Ended October 31, 2021
International Equity		643

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

International Equity Fund

Fair values of financial instruments on the Statements of Assets and Liabilities as of October 31, 2021:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Receivable for variation margin from open futures contracts(2)		$	-		$	-		$	-		$	-		$	1,211,478		$	1,211,478
The effect of financial derivative instruments on the Statements of Operations as of October 31, 2021:
	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		$	-		$	-		$	-		$	-		$	20,510,579		$	20,510,579
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		$	-		$	-		$	-		$	-		$	3,210,757		$	3,210,757

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

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

Master Agreements

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

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, if applicable. The net amount

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October 31, 2021

represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, October 31, 2021.

International Equity Fund

Offsetting of Financial and Derivative Assets as of October 31, 2021:
	Assets			Liabilities
Futures Contracts(1)	$	1,211,478		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	1,211,478		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(1,211,478	)	$	-

	Remaining Contractual Maturity of the Agreements As of October 31, 2021
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	7,655,136	$	-	$	-	$	-	$	7,655,136
Total Borrowings	$	7,655,136	$	-	$	-	$	-	$	7,655,136
Gross amount of recognized liabilities for securities lending transactions									$	7,655,136

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

Tocqueville International Value Fund

	Remaining Contractual Maturity of the Agreements As of October 31, 2021
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	6,038,135	$	-	$	-	$	-	$	6,038,135
Total Borrowings	$	6,038,135	$	-	$	-	$	-	$	6,038,135
Gross amount of recognized liabilities for securities lending transactions									$	6,038,135

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.

Some of the markets in which the Funds may effect derivative transactions are OTC or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight to the same extent as are members of “exchange-based” markets. This exposes the Funds to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a credit or

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American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

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

Credit Risk

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

Currency Risk

The Funds may have exposure to foreign currencies by 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.

Equity Investments Risk

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

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Notes to Financial Statements

October 31, 2021

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

Foreign Investing and Emerging Markets Risk

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

Forward Foreign Currency Contracts Risk

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

Futures Contracts Risk

Futures contracts are derivative instruments where one party pays a fixed price for an agreed amount of securities or other underlying assets at an agreed date. The use of such derivative instruments may expose the Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. There may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes. There can be no assurance that any strategy used will succeed. There also can be no assurance that, at all times, a liquid market will exist for offsetting a futures contract that a Fund has previously bought or sold and this may result in the inability to close a futures contract when desired. Futures contracts may experience potentially dramatic price changes, which will increase the volatility of a Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).

Market Risk

The Funds are subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Funds’

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October 31, 2021

performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. 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. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future, particularly if markets enter a period of uncertainty or economic weakness. The value of a security may decline due to adverse issuer-specific conditions, general market conditions unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole.

Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Adverse market events may also lead to increased shareholder redemptions, which could cause a Fund to experience a loss or difficulty in selling investments to meet redemption requests by shareholders and may increase a Fund’s portfolio turnover, which will increase the costs that a Fund incurs and lower a Fund’s performance. Even when securities markets perform well, there is no assurance that the investments held by a Fund will increase in value along with the broader market.

Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, including the U.S. presidential election, 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 severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers.

Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in a Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in securities prices could be a sustained trend or a drastic movement. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.

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

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October 31, 2021

securities are high-yield and foreign securities. The limited trading activity of some high-yield securities may result in market prices that do not reflect the true market value of these securities. The Funds generally prices foreign securities using their closing prices from the foreign markets in which they trade, typically prior to the Funds’ calculation of its NAV. These prices may be affected by events that occur after the close of a foreign market but before the Funds price its shares. In such instances, the Funds may fair value high yield and foreign securities. However, some investors may engage in frequent short-term trading in the Funds to take advantage of any price differentials that may be reflected in the NAV of the Funds’ shares. While the Manager monitors trading in the Funds, there is no guarantee that it can detect all market timing activities.

Multiple Sub-Advisor Risk

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

Recent Market Events Risk

An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. Transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions, closed international, national and local borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event cancellations, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession. The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time.

The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets. Amid the Federal Reserve’s ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. 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. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on December 31, 2020, commonly referred to as “Brexit,” and a trade agreement between the United Kingdom and the European Union, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or

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October 31, 2021

political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.

Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.

Other Investment Companies Risk

To the extent that the Funds invest in shares of other registered investment companies, the Funds will indirectly bear the fees and expenses, including, for example, advisory and administrative fees, charged by those investment companies in addition to the Funds, direct fees and expenses. If the Funds invest in other investment companies, the Funds may receive distributions of taxable gains from portfolio transactions by that investment company and may recognize taxable gains from transactions in shares of that investment company, which could be taxable to the Funds’ shareholders when distributed to them. The Funds must rely on the investment company in which it invests to achieve its investment objective. If the investment company fails to achieve its investment objective, the value of the Funds’ investment may decline, adversely affecting the Funds’ performance. To the extent the Funds invest in other investment companies that invest in equity securities, fixed income securities and/or foreign securities, or 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. The Funds will be subject to the risks associated with investments in those companies, including but not limited to interest rate risk, credit risk, and market risk.

Securities Lending Risk

A Fund may lend its portfolio securities to brokers, dealers and financial institutions in order to obtain additional income. Borrowers of a Fund’s securities provide collateral either in the form of cash, which a Fund reinvests in securities or in the form of non-cash collateral consisting of securities issued or guaranteed by the U.S. government or one of its agencies or instrumentalities. 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 cover its payment to the borrower of a pre-negotiated fee or “rebate” for the use of that cash collateral in connection with the loan. A Fund could also lose money due to a decline in the value of non-cash collateral. 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 or could result in increased costs. Moreover, if the borrower becomes subject to insolvency or similar proceedings, a Fund could incur delays in its ability to enforce its rights in its collateral. There also is a risk that a borrower may default on its obligation to return loaned securities at a time when the value of a Fund’s collateral is inadequate. Although a Fund’s securities lending agent may indemnify a Fund against that risk, it is also possible that the securities lending agent will be unable to satisfy its indemnification obligations. In any case in which the loaned securities are not returned to a Fund before an ex-dividend date, whether or not due to a default by the borrower, the payment in lieu of the dividend that a Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income”.

Valuation Risk

This is the risk that a Fund has valued a security at a price different from the price at which it can be sold. This risk may be especially pronounced for investments, such as derivatives, which may be illiquid or which may become illiquid and for securities that trade in relatively thin markets and/or markets that experience extreme volatility. If market conditions make it difficult to value certain investments, a Fund may value these investments

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Notes to Financial Statements

October 31, 2021

using more subjective methods, such as fair-value methodologies. Investors who purchase or redeem Fund shares on days when a Fund is holding fair-valued securities may receive fewer or more shares, or lower or higher redemption proceeds, than they would have received if the Fund had not fair-valued the securities or had used a different valuation methodology. The value of foreign securities, certain fixed-income securities and currencies, as applicable, may be materially affected by events after the close of the markets on which they are traded, but before a Fund determines its NAV. 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.

7.   Federal Income and Excise Taxes

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

The Funds do not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2021 remain subject to examination by the Internal Revenue Service. If applicable, the Funds recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other expenses” on the Statements of Operations.

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

Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

The tax character of distributions paid were as follows:

	International Equity Fund				Tocqueville International Value Fund
	Year Ended October 31, 2021		Year Ended October 31, 2020		Year Ended October 31, 2021		Year Ended October 31, 2020
Distributions paid from:
Ordinary income*
R5 Class	$	19,243,533	$	43,205,283	$	153,791	$	913,408
Y Class		12,813,335		24,303,477		658,999		5,529,636
Investor Class		1,252,478		5,738,579		746,996		5,612,764
Advisor Class		149,763		1,077,549		-		-
A Class		146,453		369,593		-		-
C Class		25,086		117,950		-		-
R6 Class		6,209,328		6,125,156		-		-
Long-term capital gains
R5 Class		-		-		-		-
Y Class		-		-		-		-
Investor Class		-		-		-		-
Advisor Class		-		-		-		-
A Class		-		-		-		-
C Class		-		-		-		-
R6 Class		-		-		-		-
Total distributions paid	$	39,839,976	$	80,937,587	$	1,559,786	$	12,055,808

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

46

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

As of October 31, 2021, the tax cost for each Fund and their respective gross unrealized appreciation (depreciation) were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
International Equity	$	1,908,824,898	$	295,383,104	$	(104,992,049	)	$	190,391,055
Tocqueville International Value		289,209,411		86,879,939		(9,151,233	)		77,728,706

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)			Other Temporary Differences			Distributable Earnings
International Equity	$	190,391,055	$	60,202,676	$	137,584,079	$	-		$	(1	)	$	388,177,809
Tocqueville International Value		77,728,706		13,300,764		-		(12,379,528	)		-			78,649,942

Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Financial records are not adjusted for temporary differences. The temporary differences between financial reporting and tax-basis reporting of unrealized appreciation (depreciation) are attributable primarily to the tax deferral of losses from wash sales, the realization for tax purposes of unrealized gains (losses) on certain derivative instruments, unused capital loss carryforwards, and the realization for tax purposes of unrealized gains from passive foreign investment companies.

Due to inherent differences in the recognition of income, expenses, and realized gains (losses) under U.S. GAAP and federal income tax regulations, permanent differences between book and tax reporting have been identified and appropriately reclassified on the Statements of Assets and Liabilities. The Funds had no permanent differences as of October 31, 2021.

For federal income tax purposes, the Fund measures its capital loss carryforwards annually at October 31, its fiscal year end. Capital loss carryforwards retain their character as short-term and/or long-term and may be carried forward and applied against future realized capital gains with no expiration date.

As of October 31, 2021, the Funds had the following capital loss carryforwards:

Fund	Short-Term Capital Loss Carryforwards		Long-Term Capital Loss Carryforwards
International Equity	$	-	$	-
Tocqueville International Value		-		12,379,528

The International Equity Fund utilized $62,592,823 short-term and $89,404,879 long-term capital loss carryforwards. The Tocqueville International Value Fund utilized $6,777,051 short-term and $25,731,508 long-term capital loss carryforwards.

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2021 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
International Equity	$	973,144,670	$	1,635,622,390
Tocqueville International Value		122,030,139		173,132,313

47

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

A summary of the Funds’ transactions in the USG Select Fund for the year ended October 31, 2021 were as follows:

Fund	Type of Transaction	October  31, 2020 Shares/Fair Value		Purchases		Sales		October  31, 2021 Shares/Fair Value
International Equity	Direct	$	55,081,499	$	1,667,379,937	$	1,663,398,951	$	59,062,485
International Equity	Securities Lending		5,030,543		378,191,575		375,566,982		7,655,136
Tocqueville International Value	Direct		11,592,030		121,853,724		130,819,768		2,625,986
Tocqueville International Value	Securities Lending		3,339,142		76,946,169		74,247,176		6,038,135

Affiliated Trades:

Cross trades for the year ended October 31, 2021, if any, were executed by the Funds pursuant to procedures adopted by the Board to ensure compliance with Rule 17a-7 under the Act. Cross trading is the buying or selling of portfolio securities between funds of investment companies, or between a fund of an investment company and another entity, that are or could be considered affiliates by virtue of a common investment advisor (or affiliated investment advisors), common Trustees and/or common Officers. At its regularly scheduled meetings, the Chief Compliance Officer (“CCO”) certifies to the Board that the 17a-7 transactions entered into by the funds complied with the Rule 17a-7 Procedures adopted by the Board.

For the year ended October 31, 2021, cross trades by the Funds under Rule 17a-7 were as follows:

Portfolio	Purchases		Sales		Net Realized Gain (Loss)
International Equity	$	48,619	$	1,239,758	$	(5,050	)

9.  Securities Lending

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

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

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

While securities are on loan, the Funds continue to receive certain income associated with that security and any gain or loss in the market price that may occur during the term of the loan. In the case of domestic equities, the value of any dividend is received in the form of a substitute payment approximately equal to the dividend. In

48

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

the case of foreign securities, a negotiated amount is received that is less than the actual dividend, but higher than the dividend amount minus the foreign tax that the Funds would be subject to on the dividend.

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

As of October 31, 2021, the value of outstanding securities on loan and the value of collateral were as follows:

Fund	Market Value of Securities on Loan		Cash Collateral Received		Non-Cash Collateral Received		Total Collateral Received
International Equity	$	33,717,931	$	7,655,136	$	28,322,230	$	35,977,366
Tocqueville International Value		16,345,020		6,038,135		10,757,980		16,796,115

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

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

10.  Borrowing Arrangements

Effective November 12, 2020 (the “Effective Date”), the Funds, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Funds’ Committed Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

On the Effective Date, the Funds, along with certain other Participating Funds managed by the Manager, also renewed 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) Overnight Bank Funding Rate (”OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Funds’ Uncommitted Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

49

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

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

During the year ended October 31, 2021, the Funds did not utilize this facility.

11.   Capital Share Transactions

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

	R5 Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		15,909,693		$	311,036,157			28,411,612		$	413,054,584
Reinvestment of dividends		1,023,705			18,293,611			2,205,748			40,475,468
Shares redeemed		(17,231,226	)		(332,477,857	)		(47,892,354	)		(714,194,178	)
Net (decrease) in shares outstanding		(297,828	)	$	(3,148,089	)		(17,274,994	)	$	(260,664,126	)
	Y Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		7,224,999		$	139,099,126			15,009,570		$	226,696,600
Reinvestment of dividends		680,368			12,695,662			1,184,510			22,683,362
Shares redeemed		(39,792,200	)		(820,191,598	)		(20,937,732	)		(342,134,108	)
Net (decrease) in shares outstanding		(31,886,833	)	$	(668,396,810	)		(4,743,652	)	$	(92,754,146	)
	Investor Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		3,622,542		$	70,802,228			1,943,992		$	28,602,293
Reinvestment of dividends		68,848			1,222,060			311,501			5,672,429
Shares redeemed		(3,760,379	)		(71,763,443	)		(8,253,006	)		(123,295,754	)
Net increase (decrease) in shares outstanding		(68,989	)	$	260,845			(5,997,513	)	$	(89,021,032	)
	Advisor Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		124,326		$	2,477,618			662,934		$	9,904,449
Reinvestment of dividends		8,194			149,699			57,643			1,077,351
Shares redeemed		(322,694	)		(6,341,507	)		(2,124,838	)		(34,005,957	)
Net (decrease) in shares outstanding		(190,174	)	$	(3,714,190	)		(1,404,261	)	$	(23,024,157	)
	A Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		166,073		$	3,203,132			248,254		$	3,772,133
Reinvestment of dividends		8,158			144,484			20,020			364,173
Shares redeemed		(328,406	)		(6,319,853	)		(397,233	)		(6,125,328	)
Net (decrease) in shares outstanding		(154,175	)	$	(2,972,237	)		(128,959	)	$	(1,989,022	)

50

American Beacon Funds^SM

Notes to Financial Statements

October 31, 2021

	C Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		46,799		$	859,477			45,274		$	697,918
Reinvestment of dividends		1,411			24,166			6,493			114,278
Shares redeemed		(69,515	)		(1,302,164	)		(165,810	)		(2,343,389	)
Net (decrease) in shares outstanding		(21,305	)	$	(418,521	)		(114,043	)	$	(1,531,193	)
	R6 Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
International Equity Fund	Shares			Amount			Shares			Amount
Shares sold		7,429,933		$	144,937,439			19,524,226		$	278,276,194
Reinvestment of dividends		339,656			6,079,842			319,483			5,868,905
Shares redeemed		(8,191,850	)		(160,504,629	)		(9,816,515	)		(153,229,952	)
Net increase (decrease) in shares outstanding		(422,261	)	$	(9,487,348	)		10,027,194		$	130,915,147
	R5 Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Tocqueville International Value Fund	Shares			Amount			Shares			Amount
Shares sold		165,473		$	3,170,509			254,151		$	3,799,313
Reinvestment of dividends		8,607			153,726			56,556			910,567
Shares redeemed		(409,748	)		(7,842,762	)		(1,379,136	)		(17,985,926	)
Net (decrease) in shares outstanding		(235,668	)	$	(4,518,527	)		(1,068,429	)	$	(13,276,046	)
	Y Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Tocqueville International Value Fund	Shares			Amount			Shares			Amount
Shares sold		2,865,875		$	56,537,915			2,542,137		$	38,027,861
Reinvestment of dividends		26,969			481,673			223,999			3,604,138
Shares redeemed		(3,442,561	)		(62,946,165	)		(8,650,732	)		(124,089,686	)
Net (decrease) in shares outstanding		(549,717	)	$	(5,926,577	)		(5,884,596	)	$	(82,457,687	)
	Investor Class
	Year Ended October 31, 2021						Year Ended October 31, 2020
Tocqueville International Value Fund	Shares			Amount			Shares			Amount
Shares sold		714,528		$	13,893,147			1,585,655		$	23,429,214
Reinvestment of dividends		39,369			706,277			331,320			5,357,440
Shares redeemed		(4,296,803	)		(82,841,829	)		(11,936,282	)		(176,506,234	)
Net (decrease) in shares outstanding		(3,542,906	)	$	(68,242,405	)		(10,019,307	)	$	(147,719,580	)

12.  Subsequent Events

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

51

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R5 ClassA
	Year Ended October 31,
	2021			2020B			2019			2018			2017
Net asset value, beginning of period	$	14.73		$	18.06		$	18.71		$	20.88		$	17.41
Income (loss) from investment operations:
Net investment income		0.45	C		0.36			0.55			0.44			0.39
Net gains (losses) on investments (both realized and unrealized)		5.43			(3.15	)		0.34			(1.95	)		3.51
Total income (loss) from investment operations		5.88			(2.79	)		0.89			(1.51	)		3.90
Less distributions:
Dividends from net investment income		(0.30	)		(0.54	)		(0.40	)		(0.35	)		(0.43	)
Distributions from net realized gains		-			-			(1.14	)		(0.31	)		-
Total distributions		(0.30	)		(0.54	)		(1.54	)		(0.66	)		(0.43	)
Net asset value, end of period	$	20.31		$	14.73		$	18.06		$	18.71		$	20.88
Total returnD		40.18	%		(16.04	)%		5.94	%		(7.55	)%		22.94	%
Ratios and supplemental data:
Net assets, end of period	$	1,329,626,349		$	968,859,543		$	1,499,867,401		$	1,613,462,237		$	1,644,165,106
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.73	%		0.72	%		0.73	%		0.73	%		0.73	%
Expenses, net of reimbursements and/or recoupments		0.73	%		0.72	%		0.73	%		0.73	%		0.73	%
Net investment income, before expense reimbursements and/or recoupments		2.31	%C		1.83	%		2.93	%		2.17	%		2.01	%
Net investment income, net of reimbursements and/or recoupments		2.31	%C		1.83	%		2.93	%		2.17	%		2.01	%
Portfolio turnover rate		41	%		77	%		36	%		29	%		32	%

^A  Prior to February 28, 2020, the R5 Class was known as Institutional Class.

^B  On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund.

^C  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.0746.

^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

52

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	15.36		$	18.81		$	19.42		$	21.64		$	18.03
Income (loss) from investment operations:
Net investment income		1.83	B		0.36			0.54			0.46			0.38
Net gains (losses) on investments (both realized and unrealized)		4.27			(3.28	)		0.37			(2.04	)		3.65
Total income (loss) from investment operations		6.10			(2.92	)		0.91			(1.58	)		4.03
Less distributions:
Dividends from net investment income		(0.28	)		(0.53	)		(0.38	)		(0.33	)		(0.42	)
Distributions from net realized gains		-			-			(1.14	)		(0.31	)		-
Total distributions		(0.28	)		(0.53	)		(1.52	)		(0.64	)		(0.42	)
Net asset value, end of period	$	21.18		$	15.36		$	18.81		$	19.42		$	21.64
Total returnC		39.99	%		(16.09	)%		5.83	%		(7.58	)%		22.84	%
Ratios and supplemental data:
Net assets, end of period	$	233,692,916		$	659,159,857		$	896,442,437		$	904,847,058		$	1,029,629,647
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.79	%		0.80	%		0.80	%		0.80	%		0.80	%
Expenses, net of reimbursements and/or recoupments		0.79	%		0.80	%		0.80	%		0.80	%		0.80	%
Net investment income, before expense reimbursements and/or recoupments		2.01	%B		1.77	%		2.87	%		2.10	%		1.95	%
Net investment income, net of reimbursements and/or recoupments		2.01	%B		1.77	%		2.87	%		2.10	%		1.95	%
Portfolio turnover rate		41	%		77	%		36	%		29	%		32	%

^A  On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund.

^B  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.0243.

^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

53

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	14.57		$	17.87		$	18.52		$	20.67		$	17.24
Income (loss) from investment operations:
Net investment income		0.38	B		0.40			0.49			0.41			0.35
Net gains (losses) on investments (both realized and unrealized)		5.38			(3.22	)		0.33			(1.97	)		3.45
Total income (loss) from investment operations		5.76			(2.82	)		0.82			(1.56	)		3.80
Less distributions:
Dividends from net investment income		(0.22	)		(0.48	)		(0.33	)		(0.28	)		(0.37	)
Distributions from net realized gains		-			-			(1.14	)		(0.31	)		-
Total distributions		(0.22	)		(0.48	)		(1.47	)		(0.59	)		(0.37	)
Net asset value, end of period	$	20.11		$	14.57		$	17.87		$	18.52		$	20.67
Total returnC		39.72	%		(16.33	)%		5.55	%		(7.86	)%		22.50	%
Ratios and supplemental data:
Net assets, end of period	$	126,691,864		$	92,817,287		$	221,043,036		$	250,804,403		$	316,589,769
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.06	%		1.07	%		1.05	%		1.06	%		1.07	%
Expenses, net of reimbursements and/or recoupments		1.06	%		1.07	%		1.05	%		1.06	%		1.07	%
Net investment income, before expense reimbursements and/or recoupments		1.98	%B		1.35	%		2.59	%		1.83	%		1.69	%
Net investment income, net of reimbursements and/or recoupments		1.98	%B		1.35	%		2.59	%		1.83	%		1.69	%
Portfolio turnover rate		41	%		77	%		36	%		29	%		32	%

^A  On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund.

^B  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.0785.

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

See accompanying notes

54

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	14.94		$	18.31		$	18.93		$	21.15		$	17.62
Income (loss) from investment operations:
Net investment income		0.41	B		0.37			0.43			0.36			0.23
Net gains (losses) on investments (both realized and unrealized)		5.48			(3.29	)		0.39			(1.99	)		3.64
Total income (loss) from investment operations		5.89			(2.92	)		0.82			(1.63	)		3.87
Less distributions:
Dividends from net investment income		(0.15	)		(0.45	)		(0.30	)		(0.28	)		(0.34	)
Distributions from net realized gains		-			-			(1.14	)		(0.31	)		-
Total distributions		(0.15	)		(0.45	)		(1.44	)		(0.59	)		(0.34	)
Net asset value, end of period	$	20.68		$	14.94		$	18.31		$	18.93		$	21.15
Total returnC		39.53	%		(16.43	)%		5.38	%		(7.99	)%		22.38	%
Ratios and supplemental data:
Net assets, end of period	$	18,745,607		$	16,387,094		$	45,797,068		$	48,571,916		$	55,715,606
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.20	%		1.20	%		1.20	%		1.20	%		1.20	%
Expenses, net of reimbursements and/or recoupments		1.20	%		1.20	%		1.20	%		1.20	%		1.20	%
Net investment income, before expense reimbursements and/or recoupments		1.79	%B		1.34	%		2.40	%		1.70	%		1.51	%
Net investment income, net of reimbursements and/or recoupments		1.79	%B		1.34	%		2.40	%		1.70	%		1.51	%
Portfolio turnover rate		41	%		77	%		36	%		29	%		32	%

^A  On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund.

^B  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.0709.

^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

55

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	14.55		$	17.85		$	18.50		$	20.63		$	17.23
Income (loss) from investment operations:
Net investment income		0.36	B		0.21			0.45			0.38			0.30
Net gains (losses) on investments (both realized and unrealized)		5.38			(3.04	)		0.36			(1.95	)		3.48
Total income (loss) from investment operations		5.74			(2.83	)		0.81			(1.57	)		3.78
Less distributions:
Dividends from net investment income		(0.23	)		(0.47	)		(0.32	)		(0.25	)		(0.38	)
Distributions from net realized gains		-			-			(1.14	)		(0.31	)		-
Total distributions		(0.23	)		(0.47	)		(1.46	)		(0.56	)		(0.38	)
Net asset value, end of period	$	20.06		$	14.55		$	17.85		$	18.50		$	20.63
Total returnC		39.65	%		(16.37	)%		5.46	%		(7.89	)%		22.43	%
Ratios and supplemental data:
Net assets, end of period	$	10,017,801		$	9,512,972		$	13,973,709		$	14,141,551		$	17,829,657
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.13	%		1.13	%		1.15	%		1.08	%		1.12	%
Expenses, net of reimbursements and/or recoupments		1.13	%		1.13	%		1.15	%		1.08	%		1.12	%
Net investment income, before expense reimbursements and/or recoupments		1.83	%B		1.35	%		2.50	%		1.80	%		1.65	%
Net investment income, net of reimbursements and/or recoupments		1.83	%B		1.35	%		2.50	%		1.80	%		1.65	%
Portfolio turnover rate		41	%		77	%		36	%		29	%		32	%

^A  On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund.

^B  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.0643.

^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

56

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	13.99		$	17.18		$	17.84		$	19.93		$	16.73
Income (loss) from investment operations:
Net investment income		0.19	B		0.01			0.29			0.22			0.17
Net gains (losses) on investments (both realized and unrealized)		5.19			(2.86	)		0.37			(1.87	)		3.36
Total income (loss) from investment operations		5.38			(2.85	)		0.66			(1.65	)		3.53
Less distributions:
Dividends from net investment income		(0.10	)		(0.34	)		(0.18	)		(0.13	)		(0.33	)
Distributions from net realized gains		-			-			(1.14	)		(0.31	)		-
Total distributions		(0.10	)		(0.34	)		(1.32	)		(0.44	)		(0.33	)
Net asset value, end of period	$	19.27		$	13.99		$	17.18		$	17.84		$	19.93
Total returnC		38.56	%		(16.98	)%		4.69	%		(8.52	)%		21.50	%
Ratios and supplemental data:
Net assets, end of period	$	4,317,179		$	3,431,934		$	6,174,460		$	6,625,329		$	7,622,425
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.86	%		1.86	%		1.87	%		1.81	%		1.88	%
Expenses, net of reimbursements and/or recoupments		1.86	%		1.86	%		1.87	%		1.81	%		1.88	%
Net investment income, before expense reimbursements and/or recoupments		1.14	%B		0.61	%		1.73	%		1.08	%		0.96	%
Net investment income, net of reimbursements and/or recoupments		1.14	%B		0.61	%		1.73	%		1.08	%		0.96	%
Portfolio turnover rate		41	%		77	%		36	%		29	%		32	%

^A  On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund.

^B  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.0667.

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

See accompanying notes

57

American Beacon International Equity Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

		R6 Class
		Year Ended October 31,												February 28, 2017B to October 31, 2017
	2021			2020A			2019			2018
Net asset value, beginning of period	$	14.76		$	18.08		$	18.73		$	20.89		$	17.80
Income from investment operations:
Net investment income		0.45	C		0.39			0.51			0.39			0.08
Net gains (losses) on investments (both realized and unrealized)		5.44			(3.16	)		0.39			(1.88	)		3.01
Total income (loss) from investment operations		5.89			(2.77	)		0.90			(1.49	)		3.09
Less distributions:
Dividends from net investment income		(0.30	)		(0.55	)		(0.41	)		(0.36	)		-
Distributions from net realized gains		-			-			(1.14	)		(0.31	)		-
Total distributions		(0.30	)		(0.55	)		(1.55	)		(0.67	)		-
Net asset value, end of period	$	20.35		$	14.76		$	18.08		$	18.73		$	20.89
Total returnD		40.20	%		(15.93	)%		5.98	%		(7.47	)%		17.36	%E
Ratios and supplemental data:
Net assets, end of period	$	397,732,934		$	294,708,893		$	179,802,437		$	48,725,523		$	6,367,999
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.71	%		0.72	%		0.70	%		0.70	%		0.89	%F
Expenses, net of reimbursements and/or recoupments		0.70	%G		0.69	%		0.66	%		0.66	%		0.66	%F
Net investment income, before expense reimbursements and/or recoupments		2.30	%C		1.88	%		3.09	%		2.11	%		1.63	%F
Net investment income, net of reimbursements and/or recoupments		2.31	%C		1.91	%		3.13	%		2.15	%		1.85	%F
Portfolio turnover rate		41	%		77	%		36	%		29	%		32	%H

^A  On January 29, 2020, Templeton Investment Counsel, LLC, was terminated and ceased managing assets of the Fund. On January 30, 2020, American Century Investment Management, Inc. began managing assets of the Fund.

^B  Commencement of operations.

^C  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.0738.

^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  Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses.

^H  Portfolio turnover rate is for the period from February 28, 2017 through October 31, 2017 and is not annualized.

See accompanying notes

58

American Beacon Tocqueville International Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R5 ClassA
	Year Ended October 31,						January 22, 2019B to October 31, 2019
	2021			2020
Net asset value, beginning of period	$	15.58		$	15.65		$	14.78
Income from investment operations:
Net investment income		0.60	C		0.03			0.21
Net gains on investments (both realized and unrealized)		3.50			0.29			0.66
Total income from investment operations		4.10			0.32			0.87
Less distributions:
Dividends from net investment income		(0.12	)		(0.39	)		-
Total distributions		(0.12	)		(0.39	)		-
Net asset value, end of period	$	19.56		$	15.58		$	15.65
Total returnD		26.38	%		1.94	%		5.89	%E
Ratios and supplemental data:
Net assets, end of period	$	20,907,091		$	20,327,704		$	37,138,368
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.92	%		0.91	%		0.93	%F
Expenses, net of reimbursements and/or recoupments		0.91	%H		0.89	%		0.89	%F
Net investment income, before expense reimbursements and/or recoupments		3.14	%C		0.84	%		2.18	%F
Net investment income, net of reimbursements and/or recoupments		3.15	%C		0.86	%		2.22	%F
Portfolio turnover rate		34	%		28	%		35	%G

^A  Prior to February 28, 2020, the R5 Class was known as Institutional Class.

^B  Commencement of operations.

^C  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.3366.

^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 is for the period from January 22, 2019 through October 31, 2019 and is not annualized.

^H  Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses.

See accompanying notes

59

American Beacon Tocqueville International Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,						January 22, 2019A to October 31, 2019
	2021			2020
Net asset value, beginning of period	$	15.56		$	15.64		$	14.78
Income from investment operations:
Net investment income		0.59	B		0.05			0.23
Net gains on investments (both realized and unrealized)		3.49			0.25			0.63
Total income from investment operations		4.08			0.30			0.86
Less distributions:
Dividends from net investment income		(0.10	)		(0.38	)		-
Total distributions		(0.10	)		(0.38	)		-
Net asset value, end of period	$	19.54		$	15.56		$	15.64
Total returnC		26.25	%		1.84	%		5.82	%D
Ratios and supplemental data:
Net assets, end of period	$	160,793,226		$	136,563,697		$	229,275,205
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.98	%		0.99	%		0.98	%E
Expenses, net of reimbursements and/or recoupments		0.98	%		0.99	%		0.98	%E
Net investment income, before expense reimbursements and/or recoupments		3.40	%B		0.78	%		2.10	%E
Net investment income, net of reimbursements and/or recoupments		3.40	%B		0.78	%		2.10	%E
Portfolio turnover rate		34	%		28	%		35	%F

^A  Commencement of operations.

^B  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.3834.

^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 is for the period from January 22, 2019 through October 31, 2019 and is not annualized.

See accompanying notes

60

American Beacon Tocqueville International Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	15.60		$	15.61		$	15.06		$	17.58		$	14.44
Income (loss) from investment operations:
Net investment income		0.76	B		0.25			0.40			0.24	A		0.14	A
Net gains (losses) on investments (both realized and unrealized)		3.29			0.01			0.34			(2.53	)		3.23
Total income (loss) from investment operations		4.05			0.26			0.74			(2.29	)		3.37
Less distributions:
Dividends from net investment income		(0.06	)		(0.27	)		(0.19	)		(0.17	)		(0.15	)
Distributions from net realized gains		-			-			-			(0.06	)		(0.08	)
Total distributions		(0.06	)		(0.27	)		(0.19	)		(0.23	)		(0.23	)
Net asset value, end of period	$	19.59		$	15.60		$	15.61		$	15.06		$	17.58
Total returnC		26.01	%		1.63	%		5.03	%		(13.20	)%		23.70	%
Ratios and supplemental data:
Net assets, end of period	$	180,324,267		$	198,905,986		$	355,423,059		$	1,060,000,108		$	1,120,993,795
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.20	%		1.18	%		1.29	%		1.48	%		1.53	%
Expenses, net of reimbursements and/or recoupments		1.20	%		1.18	%		1.18	%		1.25	%		1.25	%
Net investment income, before expense reimbursements and/or recoupments		2.81	%B		0.63	%		1.42	%		1.09	%		0.73	%
Net investment income, net of reimbursements and/or recoupments		2.81	%B		0.63	%		1.53	%		1.32	%		1.01	%
Portfolio turnover rate		34	%		28	%		35	%		25	%		22	%

^A  Net investment income per share is calculated using the ending balance prior to consideration or adjustment for permanent book-to-tax differences.

^B  Net investment income includes significant dividend payment from Vivendi SE amounting to $0.3074.

^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

61

American Beacon Funds^SM

Federal Tax Information

October 31, 2021 (Unaudited)

Certain tax information regarding the Funds is required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2021. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2021.

The Funds designated the following items with regard to distributions paid during the fiscal year ended October 31, 2021. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends-Received Deduction:

International Equity	0.14	%
Tocqueville International Value	4.90	%

Qualified Dividend Income:

International Equity	100.00	%
Tocqueville International Value	100.00	%

Long-Term Capital Gain Distributions:

International Equity	$	0
Tocqueville International Value	$	0

Short-Term Capital Gain Distributions:

International Equity	$	0
Tocqueville International Value	$	0

Foreign tax credit:

International Equity	$	8,352,207
Tocqueville International Value	$	1,896,701

The foreign tax credits for International Equity and Tocqueville International Value are based on foreign source income of $83,083,804 and $16,940,075, respectively for the year ended October 31, 2021.

Shareholders will receive notification in January 2022 of the applicable tax information necessary to prepare their 2021 income tax returns.

62

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

Renewal and Approval of Management Agreement and Investment Advisory Agreements

At meetings held on May 17, 2021 and June 8-9, 2021 (collectively, the “Meetings”), the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 9, 2021 meeting, approved the renewal of:

(1) the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon International Equity Fund (“International Equity Fund”) and the American Beacon Tocqueville International Value Fund (“Tocqueville Fund”) (each, a “Fund” and collectively, the “Funds”);

(2) the Investment Advisory Agreements among the Manager, the Trust, on behalf of the International Equity Fund, and each of Causeway Capital Management LLC (“Causeway”), Lazard Asset Management LLC (“Lazard”) and American Century Investments, Inc. (“ACI”); and

(3) the Investment Advisory Agreement among the Manager, the Trust, on behalf of the Tocqueville Fund and Tocqueville Asset Management LP (“Tocqueville”).

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

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Funds as well as information from the Manager and the subadvisors. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Trustees received and evaluated such information, as they deemed necessary, including the impact of the COVID-19 pandemic on the operations of the Manager and the subadvisor. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to each Fund.

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

A firm may not have been able to, or opted not to, provide information in response to certain information requests, in which case the Board conducted its evaluation of the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations.

Provided below is an overview of certain factors the Board considered in connection with its decision to approve the renewal of the Agreements. The Board did not identify any particular information that was most relevant to its consideration of whether to approve the renewal of each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal of investment advisory contracts, such as the Agreements, and related regulatory guidelines. Based on its evaluation, the Board unanimously concluded

63

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

that the terms of each Agreement were reasonable and fair and that the approval of the renewal of each Agreement was in the best interests of the Funds and their shareholders.

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

In determining whether to approve the renewal of the Agreements, the Board considered each Fund’s investment management and subadvisory relationships separately. In each instance, the Board considered, among other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of the Funds and the subadvisors for the Funds; (3) the costs incurred by the Manager in rendering services to the Funds and its resulting profits or losses; (4) comparisons of services and fee rates with contracts entered into by the Manager or a subadvisor or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisors from their relationship with the Funds.

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: the International Equity Fund’s long-term performance and Tocqueville Fund’s performance since its inception on January 18, 2019; the length of service of key investment personnel at the Manager; the cost structure of the Funds; the Manager’s culture of compliance and support that reduce risks to the Funds; the Manager’s quality of services; the Manager’s active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; and the Manager’s efforts to retain key employees and maintain staffing levels.

With respect to the renewal of each Investment Advisory Agreement, the Board considered, among other factors: the level of staffing and the size of each subadvisor; the adequacy of the resources committed to the Funds by each subadvisor; the financial stability of each subadvisor; and representations made by each subadvisor regarding its compliance program. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and each subadvisor were appropriate for each Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of each Fund relative to its Broadridge Performance Universe, Morningstar Category, and benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding its independent methodology for selecting each Fund’s Broadridge Performance Universe. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by: (1) each of Causeway and Lazard regarding the performance of its portion of the International Equity Fund, and Tocqueville regarding the performance of the Tocqueville Fund, relative to the performance of a composite of comparable investment accounts managed by the subadvisor; (2) each subadvisor regarding the performance of its portion of the Funds relative to the relevant Fund benchmark index; and (3) ACI regarding the performance of its portion of the International Equity Fund relative to an additional benchmark index. In addition, the Board considered the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to each Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to Each Fund.”

Costs of the Services Provided to the Funds and the Profits Realized by the Manager from its Relationship with the Funds. In analyzing the costs of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager

64

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

earning a profit with respect to each Fund before and after the payment of distribution-related expenses by the Manager. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Funds, the Manager represented that, among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility and regulatory requirements associated with managing the Funds. The Board also noted that, for the share classes of each Fund, the Manager is waiving fees and/or reimbursing expenses.

The Board further considered that, with respect to each Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager. In addition, the Board considered that the Manager receives fees for administering and overseeing the securities lending program on behalf of each Fund. The Board also noted that certain share classes of the Funds maintain higher expense ratios in order to compensate third-party financial intermediaries.

In analyzing the fee rates charged by each subadvisor in connection with its investment advisory services to a Fund, the Board considered representations made by Causeway and Lazard that the International Equity Fund’s fee rate schedule generally was favorable compared to other comparable client accounts. The Board considered ACI’s representation that it does not manage a comparable investment account in the strategy of the International Equity Fund and Tocqueville do not manage any directly comparable client accounts. The Board did not request profitability data from the subadvisors because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board noted that subadvisors may not account for their profits on an account-by-account basis and that different firms likely employ different methodologies in connection with these calculations.

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

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as each Fund grows and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that, with respect to each subadvisor, the Manager has negotiated breakpoints for the subadvisory fee rate for each Fund. The Board considered that the Tocqueville Fund’s current assets did not exceed the threshold necessary to reach the first subadvisory fee breakpoint and the current assets of the International Equity Fund allocated to ACI did not exceed the threshold necessary to reach the first subadvisory fee breakpoint.

In addition, the Board noted the Manager’s representation that the Management Agreement contains fee schedule breakpoints at higher asset levels with respect to each Fund. In this regard, the Board considered that the Funds’ current assets did not exceed the threshold necessary to reach the first management fee breakpoint. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for each Fund provide for a reasonable sharing of benefits from any economies of scale with each Fund.

Benefits Derived from the Relationship with the Funds. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisors as a result of the advisory relationships with the Funds, including greater exposure in the marketplace with respect to the Manager’s or the subadvisors’ investment process and expanding the level of assets under management by the Manager and the subadvisors. The Board also considered that the Manager may invest the Funds’ cash balances and cash collateral provided by the borrowers of the Funds’ securities in the American Beacon U.S. Government Money Market Select Fund, which the Manager

65

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

manages directly, and for which the Manager receives a fee. In addition, the Board noted that each subadvisor benefits from soft dollar arrangements for proprietary and/or third-party research. Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisors by virtue of their relationships with the Funds appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to Each Fund

The performance comparisons below were made for each Fund’s R5 Class shares relative to the Fund’s Broadridge Performance Universe and Morningstar Category. With respect to the Broadridge Performance Universe, the 1^st Quintile represents the top 20 percent of the universe based on performance, and the 5^th Quintile represents the bottom 20 percent of the universe based on performance. References to each Fund’s Broadridge Performance Universe are to the respective universe of mutual funds with comparable investment classifications and objectives as determined by Broadridge. The performance of individual firms was calculated by the Manager based on information provided by the Funds’ custodian.

In reviewing the performance, the Board viewed longer-term performance over a full market cycle, typically five years or longer, as the most important consideration because relative performance over shorter periods may be significantly impacted by market or economic events and not necessarily reflective of subadvisor skill.

The expense comparisons below were made for each Fund’s R5 Class shares relative to the Fund’s Broadridge Expense Universe and Broadridge Expense Group, and Y Class shares relative to the Fund’s Morningstar Fee Level universe. The 1^st Quintile represents the lowest 20 percent of the universe or group based on lowest total expense, and the 5^th Quintile represents the highest 20 percent of the universe or group based on highest total expense. References to each Fund’s Expense Group and Expense Universe are to the respective group or universe of comparable mutual funds as determined by Broadridge. A Broadridge Expense Group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge Expense Universe includes all funds with comparable investment classifications/objectives and similar operating structures to that of the share class under review for each Fund, including funds in the Broadridge Expense Group. The Broadridge expense comparisons are based on the most recent audited financial information publicly available for a Fund as of December 31, 2020. References to each Fund’s Morningstar Fee Level ranking are to the institutional share class of comparable mutual funds as determined by Morningstar.

The Board considered each Fund’s Morningstar fee level category with the 1^st Quintile representing the lowest 20 percent of the category constituents and the 5^th Quintile representing the highest 20 percent of the category in terms of total expense.

In reviewing expenses, the Board considered the positive impact of fee waivers and the Manager’s agreement to continue the fee waivers. The Board also considered that, in connection with the change in the name of the Funds’ Institutional Class shares, the share class used for the Funds’ Morningstar Fee Level comparisons had changed from the R5 Class shares to the Y Class shares, which may have resulted in a less favorable Morningstar Fee Level Ranking for the Funds than in prior years.

Additional Considerations and Conclusions with Respect to the International Equity Fund

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

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

Compared to Broadridge Expense Group	1st Quintile
Compared to Broadridge Expense Universe	1st Quintile
Morningstar Fee Level Ranking	2nd Quintile

66

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

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2020)

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

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

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2020)

Causeway	5 Years	1	st Quintile
Lazard	5 Years	1	st Quintile
ACI	<1 Year

The Board also considered: (1) the International Equity Fund’s more limited exposure to emerging market countries than the funds in its Broadridge Performance Universe and Morningstar category, and that, accordingly, the Manager expects the International Equity Fund to underperform those peer groups when emerging markets outperform developed markets; (2) information provided by each subadvisor regarding fee rates charged for managing assets in the same or a similar strategy as the subadvisor manages its allocation of the International Equity Fund; (3) the recent termination of a prior subadvisor and the addition of ACI; and (4) the Manager’s recommendation to continue to retain each subadvisor.

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

Additional Considerations and Conclusions with Respect to the Tocqueville Fund

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

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

Compared to Broadridge Expense Group	2nd Quintile
Compared to Broadridge Expense Universe	3rd Quintile
Morningstar Fee Level Ranking	4th Quintile

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2020)

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

The Board also considered: (1) Tocqueville’s representation that it does not directly manage comparable investment accounts to the Tocqueville Fund; (2) the Tocqueville Fund acquired all of the assets of The Tocqueville International Value Fund (“Acquired Fund”), on January 18, 2019, and that the Tocqueville Fund’s performance prior to that date is that of the Acquired Fund; and (3) the Manager’s recommendation to continue to retain the subadvisor based upon, among other factors, the relatively brief period since the Tocqueville Fund was acquired.

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

67

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 funds in the fund complex that includes the Trust, the American Beacon Select Funds, and the American Beacon Institutional Funds Trust. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Eugene J. Duffy (67)**	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial Administrative Corporation (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-2016); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (51)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Joseph B. Armes (59)	Trustee since 2015	Director, Switchback Energy Acquisition (2019-2021); 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); 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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Gerard J. Arpey (63)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Director, The Home Depot, Inc. (2015-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

68

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (60)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Claudia A. Holz (64)	Trustee since 2018	Partner, KPMG LLP (1990-2017); Independent Director, Blue Owl Capital Inc. (2021-Present); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Douglas A. Lindgren (59)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Barbara J. McKenna, CFA (58)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

69

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. (66)	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); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-2020); Director, ARK Investment Management LLC (2016-2020); 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); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, 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 (2015-2020); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-2021); President, American Beacon Apollo Total Return Fund (2018-2021).
Rosemary K. Behan (62)	VP, Secretary and Chief Legal Officer since 2006	Senior Vice President (2021-Present), Vice President(2006-2021), Secretary and General Counsel (2006-Present), American Beacon Advisors, Inc.; Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015–Present); Senior Vice President (2021-Present), Vice President(2015-2021), Secretary and General Counsel (2015-Present), Resolute Investment Managers, Inc.; Secretary, Resolute Investment Distributors, Inc. (2017-Present); Senior Vice President (2021-Present), Vice President(2017-2021), Secretary and General Counsel (2017-Present), Resolute Investment Services, Inc.; Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-2020); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, Green Harvest Asset Management (2019-2021); 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 (2018-2021); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-2021).

70

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Brian E. Brett (61)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), 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); 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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Paul B. Cavazos (52)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Erica Duncan (51)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Melinda G. Heika (60)	VP since 2021 Principal Accounting Officer and Treasurer (2010-2021)	Senior Vice President (2021-Present), 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); Senior Vice President (2021-Present), Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017); Senior Vice President (2021-Present); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-2020); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Vice President (2021-Present), Principal Accounting Officer (2017-2021) and Treasurer (2010-2021), American Beacon Select Funds; Vice President (2021–Present), Principal Accounting Officer and Treasurer (2017-2021), American Beacon Institutional Funds Trust; Vice President (2021), Principal Accounting Officer and Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Vice President (2021), Principal Accounting Officer and Treasurer, American Beacon Apollo Total Return Fund (2018-2021).

71

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Terri L. McKinney (57)	VP since 2010	Senior Vice President (2021-Present), Vice President (2009-2021), American Beacon Advisors, Inc.; Senior Vice President (2021–Present); Vice President (2017-2021), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2018-Present), Resolute Investment Services, Inc; Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Jeffrey K. Ringdahl (46)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (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; Trustee, American Beacon NextShares Trust (2015-2020); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Samuel J. Silver (58)	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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).

72

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Christina E. Sears (50)	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, Green Harvest Asset Management, LLC (2019-Present); Chief Compliance Officer, RSW Investments Holdings, LLC (2019-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Sonia L. Bates (64)	Principal Accounting Officer and Treasurer since 2021 Assistant Treasurer (2011-2021)	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); 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); Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2011-2021), American Beacon Select Funds; Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2017-2021), American Beacon Institutional Funds Trust; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Apollo Total Return Fund.
Shelley L. Dyson (51)	Assistant Treasurer since 2021	Assistant Treasurer, American Beacon Select Funds (2021-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2021-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Treasurer, American Beacon Apollo Total Return Fund (2021).
Shelley D. Abrahams (46)	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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Rebecca L. Harris (54)	Assistant Secretary since 2010	Senior Vice President (2021-Present), Vice President (2011-Present), American Beacon Advisors, Inc.; Senior Vice President (2021-Present), Vice President (2017-Present), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2015-Present), Resolute Investment Services; Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).

73

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Teresa A. Oxford (63)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-2021); Assistant Secretary, Resolute Investment Managers, Inc. (2017-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-2020); Assistant Secretary, Continuous Capital, LLC (2020-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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Michael D. Jiang (36)	Assistant Secretary since 2021	Assistant Secretary (2021-Present), Resolute Investment Distributors, Inc.; Associate General Counsel (2021-Present), Resolute Investment Services, Inc.; Vice President (2018-2021), The Northern Trust Company; Second Vice President (2015-2018), The Northern Trust Company. Assistant Secretary, American Beacon Select Funds (2021-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2021-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2021).

* 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. Duffy is being deemed to be an “interested person” of the Trust, as defined by the Investment Company Act of 1940, as amended, by virtue of his position with Mesirow Financial, Inc., a broker-dealer.

74

American Beacon Funds^SM

Privacy Policy

October 31, 2021 (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.

75

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76

Delivery of Documents

Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.

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 quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-2736. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

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

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

American Beacon Funds, American Beacon International Equity Fund and American Beacon Tocqueville International Value Fund are service marks of American Beacon Advisors, Inc.

AR 10/21

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.

LARGE CAP VALUE FUND RISKS

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

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

American Beacon Funds October 31, 2021

Contents

President’s Message	1
Market and Performance Overviews	2
Expense Examples	6
Report of Independent Registered Public Accounting Firm	8
Schedule of Investments:
American Beacon Large Cap Value Fund	9
Financial Statements	16
Notes to Financial Statements	19
Financial Highlights:
American Beacon Large Cap Value Fund	39
Federal Tax Information	46
Disclosure Regarding Approval of the Management and Investment Advisory Agreements	47
Trustees and Officers of the American Beacon Funds	52
Privacy Policy	59

Additional Fund Information Back Cover

President’s Message

Dear Shareholders, As Warren E. Buffett, the “Oracle of Omaha” and billionaire chairman and CEO of Berkshire Hathaway, once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.” That is to say, before we can enjoy the fruits of our labor, we must first devote our attention to the careful planning and cultivation of our estates. To achieve a strong yield requires time, diligence and patience – and there are no guarantees the seeds we plant today will thrive or result in a plentiful harvest. This can be said not only about the actions we undertake in our gardening or landscaping, but also those we initiate in our investment portfolios – especially as we take into account the potential for harm caused by natural disasters and other catastrophes, such as the COVID-19 pandemic.

Because none of us – not even the Oracle of Omaha – has a crystal ball, to help give your investment portfolio the greatest chance for success over the long term, we encourage you to work with financial professionals to develop your personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand short-term crises. With continuous nurturing, you will be better positioned to achieve enduring financial success.

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. 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 financial rewards.

Thank you for entrusting your financial success with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Domestic Equity Market Overview

October 31, 2021 (Unaudited)

U.S. equities posted strong returns for the 12-month period ended October 31, 2021. The broader market, as measured by the Russell 3000 Index, posted a 43.89% gain. Smaller companies led the way with the Russell 2000 Index rising 50.80%. Mid- and large-cap companies also participated in the rally, with 45.40% and 43.51% returns for the Russell Midcap and Russell 1000 Indexes, respectively. The rally was consistent for most of the period, reflecting an improving economy, accommodative monetary policy and fiscal stimulus.

The prospect of full-scale COVID-19 vaccinations prompted a major shift in investor preference to under-owned Value stocks in the fourth quarter of 2020. Value’s outperformance continued into 2021 as the vaccine rollout accelerated, while massive fiscal and monetary stimulus set the stage for a powerful rebound in consumer spending. In June 2021 investor preference moved in favor of Growth-style stocks as the Federal Reserve spoke about potential tapering, while the spread of the COVID-19 delta variant in both Asia and the U.S. raised concerns about the economic impact. Stocks then rebounded strongly in October 2021 as macro concerns abated; both the Value and Growth cohorts benefited, with Growth outpacing Value. For the full 12-month period, Value stocks outpaced Growth as measured by the Russell 3000 Value Index return of 44.97% and the Russell 3000 Growth Index return of 42.81%.

Inflation picked up steam during 2021, reflecting supply chain disruptions and pent-up demand due to the pandemic. In its latest comments, the Federal Reserve acknowledged higher-than-expected inflation but continued to point to overall deceleration in the rate with the expectation that core inflation (measured by the personal consumption expenditures deflator) could rise between 2% and 2.5% in 2022 and 2023 compared to a roughly 4% increase in 2021. Rising inflation has persisted longer than the Federal Reserve initially expected, but supply chain disruptions from the pandemic have contributed meaningfully to inflation in certain segments of the economy.

With regard to monetary policy, the Federal Reserve maintained the federal funds rate at 0% to 0.25% over the year and announced plans to begin tapering quantitative easing. The Federal Reserve will reduce asset purchases by $10 billion for U.S. Treasuries and $5 billion for agency mortgage-backed securities. The dot plots from Federal Open Market Committee members suggest rate increases could begin in late 2022.

2

American Beacon Large Cap Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

The Investor Class of the American Beacon Large Cap Value Fund (the “Fund”) returned 52.04% for the twelve months ended October 31, 2021, outperforming the Russell 1000^® Value Index (the “Index”) return of 43.76% for the same period.

Comparison of Changes in Value of a $10,000 Investment for the period 10/31/2011 through 10/31/2021

Total Returns for the Period ended October 31, 2021
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of  $10,000 10/31/2011- 10/31/2021
R5 Class (1,6)	AADEX		52.60	%		15.09	%		13.85	%		12.94	%		$	33,766
Y Class (1,6)	ABLYX		52.47	%		15.00	%		13.76	%		12.86	%		$	33,517
Investor Class (1,6)	AAGPX		52.04	%		14.70	%		13.47	%		12.56	%		$	32,635
Advisor Class (1,6)	AVASX		51.89	%		14.54	%		13.31	%		12.41	%		$	32,201
A Class without sales charge (1,2,6)	ALVAX		52.15	%		14.67	%		13.44	%		12.49	%		$	32,435
A Class with sales Charge (1,2,6)	ALVAX		43.39	%		12.42	%		12.10	%		11.82	%		$	30,568
C Class without sales charge (1,3,6)	ALVCX		51.05	%		13.88	%		12.67	%		11.67	%		$	30,154
C Class with sales charge (1,3,6)	ALVCX		50.05	%		13.88	%		12.67	%		11.67	%		$	30,154
R6 Class (1,4,6)	AALRX		52.65	%		15.14	%		13.88	%		12.96	%		$	33,816
Russell 1000® Value Index (5)			43.76	%		13.90	%		12.39	%		12.85	%		$	33,491

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future.

2. A Class shares have a maximum sales charge of 5.75%.

3

American Beacon Large Cap Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

3. A portion of the fees charged to the C Class was waived from 2010 through 2012, partially recovered in 2013 and 2014, and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown for 2010 through 2012 and for 2018. C Class shares have a maximum contingent deferred sales charge of 1.00% for shares redeemed within one year of the date of purchase.

4. Fund performance for the five-year and ten-year periods represents the returns achieved by the R5 Class from 10/31/11 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 10/31/11. A portion of the fees charged to the R6 Class of the Fund were waived from Class inception to 2020. Performance prior to waiving fees was lower than the actual returns shown for 2017 to 2020.

5. The Russell 1000^® Value Index is an unmanaged index of those stocks in the Russell 1000 Index with lower price-to-book ratios and lower forecasted growth values. Russell 1000 Value Index and Russell 1000 Index are registered trademarks of Frank Russell Company. American Beacon Funds is not promoted, sponsored or endorsed by, nor in any way affiliated with the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. LSE Group is not responsible for and has not reviewed the American Beacon Large Cap Value Fund nor any associated literature or publications and LSE Group makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. All rights in the Russell 1000 Value Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell 1000^® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by the Manager. One cannot directly invest in an index.

6. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, Advisor, A, C, and R6 Class shares were 0.63%, 0.70%, 0.96%, 1.10%, 1.00%, 1.68%, and 0.62%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund outperformed the Index during the period due to both positive security selection and sector allocation.

The Fund’s security selection in the Financials, Health Care and Energy sectors contributed positively to returns relative to the Index. In the Financials sector, contributors included Wells Fargo & Co. (up 143.9%), Goldman Sachs Group, Inc. (up 125.8%) and American International Group, Inc. (up 98.4%). Contributors in the Health Care sector included Anthem, Inc. (up 62.3%) and Johnson & Johnson (up 22.4%). Within the Energy sector, Marathon Oil Corp. (up 346.7%) and Hess Corp. (up 125.0%) contributed positively to relative returns. Conversely, security selection in the Materials sector detracted slightly from relative performance; detractors included International Flavors & Fragrances, Inc. (up 5.8%).

From a sector allocation perspective, overweight allocations to the Financials sector (up 74.2%) and the Energy sector (up 112.4%) and an underweight allocation to the Consumer Staples sector (up 18.6%) contributed positively to relative performance. Conversely, and underweight allocation to the Real Estate sector (up 52.3%) detracted slightly from relative returns during the period.

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

Top Ten Holdings (% Net Assets)
Wells Fargo & Co.		2.8
Citigroup, Inc.		2.5
American International Group, Inc.		2.2
Anthem, Inc.		2.2
JPMorgan Chase & Co.		2.2
Comcast Corp., Class A		2.0
Goldman Sachs Group, Inc.		1.7
Hess Corp.		1.7
General Electric Co.		1.5
Merck & Co., Inc.		1.4
Total Fund Holdings	162

4

American Beacon Large Cap Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

Sector Allocation (% Equities)
Financials	26.7
Health Care	15.5
Industrials	14.9
Information Technology	9.6
Energy	7.9
Consumer Discretionary	7.4
Communication Services	5.4
Consumer Staples	4.1
Materials	3.9
Utilities	3.5
Real Estate	1.1

5

American Beacon Large Cap Value Fund^SM

Expense Examples

October 31, 2021 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees, if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2021 through October 31, 2021.

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 R5 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.

Hypothetical Example for Comparison Purposes

The “Hypothetical” lines of the tables provide information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio and an assumed 5% per year rate of return before expenses (not the Funds’ actual return). You may compare the ongoing costs of investing in the Funds with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Shareholders of the Investor and R5 Classes that invest in the Funds through an IRA or Roth IRA may be subject to a custodial IRA fee of $15 that is typically deducted each December. If your account was subject to a custodial IRA fee during the period, your costs would have been $15 higher.

You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs charged by the Funds, such as sales charges (loads) or redemption fees, as applicable. Similarly, the expense examples for other funds do not reflect any transaction costs charged by those funds, such as sales charges (loads), redemption fees or exchange fees. Therefore, the “Hypothetical” lines of the tables are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If you were subject to any transaction costs during the period, your costs would have been higher.

6

American Beacon Large Cap Value Fund^SM

Expense Examples

October 31, 2021 (Unaudited)

American Beacon Large Cap Value Fund
	Beginning Account Value 5/1/2021		Ending Account Value 10/31/2021		Expenses Paid During Period 5/1/2021-10/31/2021*
R5 Class
Actual		$1,000.00		$1,061.30		$3.27
Hypothetical**		$1,000.00		$1,022.03		$3.21
Y Class
Actual		$1,000.00		$1,060.90		$3.58
Hypothetical**		$1,000.00		$1,021.73		$3.52
Investor Class
Actual		$1,000.00		$1,059.30		$5.24
Hypothetical**		$1,000.00		$1,020.11		$5.14
Advisor Class
Actual		$1,000.00		$1,058.80		$5.66
Hypothetical**		$1,000.00		$1,019.71		$5.55
A Class
Actual		$1,000.00		$1,060.00		$4.67
Hypothetical**		$1,000.00		$1,020.67		$4.58
C Class
Actual		$1,000.00		$1,055.80		$8.65
Hypothetical**		$1,000.00		$1,016.79		$8.49
R6 Class
Actual		$1,000.00		$1,061.30		$3.12
Hypothetical**		$1,000.00		$1,022.18		$3.06

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.63%, 0.69%, 1.01%, 1.09%, 0.90%, 1.67%, and 0.60% for the R5, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

7

American Beacon Large Cap Value Fund^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of American Beacon Large Cap Value Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of American Beacon Large Cap Value Fund (the “Fund”) (one of the funds constituting American Beacon Funds (the “Trust”)), including the schedule of investments, as of October 31, 2021, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting American Beacon Funds) at October 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

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

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

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

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

Dallas, Texas

December 30, 2021

8

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 96.63%
Communication Services - 5.25%
Interactive Media & Services - 0.94%
Alphabet, Inc., Class AA		13,000		$	38,491,960
Media - 3.53%
Altice USA, Inc., Class AA		953,975			15,549,793
Comcast Corp., Class A		1,582,444			81,385,095
Discovery, Inc., Class CA		1,057,700			23,861,712
News Corp., Class A		773,200			17,706,280
Omnicom Group, Inc.		84,878			5,778,494
					144,281,374
Wireless Telecommunication Services - 0.78%
T-Mobile US, Inc.A		137,603			15,828,473
Vodafone Group PLC, ADR		1,082,050			16,176,647
					32,005,120
Total Communication Services					214,778,454
Consumer Discretionary - 7.13%
Auto Components - 0.92%
Adient PLCA		114,098			4,748,759
Goodyear Tire & Rubber Co.A		276,600			5,288,592
Magna International, Inc.B		336,700			27,373,710
					37,411,061
Automobiles - 1.01%
General Motors Co.A		662,732			36,072,503
Harley-Davidson, Inc.		147,912			5,397,309
					41,469,812
Hotels, Restaurants & Leisure - 1.56%
Aramark		415,053			15,141,133
Booking Holdings, Inc.A		3,900			9,441,042
Las Vegas Sands Corp.A		786,440			30,521,736
Marriott International, Inc., Class AA		54,435			8,710,689
					63,814,600
Household Durables - 0.34%
Lennar Corp., Class A		137,557			13,746,071
Multiline Retail - 0.97%
Dollar General Corp.		179,108			39,676,004
Specialty Retail - 1.66%
Advance Auto Parts, Inc.		145,540			32,822,181
Lowe’s Cos., Inc.		149,626			34,985,551
					67,807,732
Textiles, Apparel & Luxury Goods - 0.67%
Ralph Lauren Corp.		216,337			27,511,576
Total Consumer Discretionary					291,436,856
Consumer Staples - 3.92%
Beverages - 1.64%
Coca-Cola Europacific Partners PLC		653,372			34,400,036
Diageo PLC, ADR		102,989			20,563,813
PepsiCo, Inc.		74,303			12,007,365
					66,971,214

See accompanying notes

9

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 96.63% (continued)
Consumer Staples - 3.92% (continued)
Food Products - 1.00%
Archer-Daniels-Midland Co.		74,430		$	4,781,383
JM Smucker Co.		21,240			2,609,547
Mondelez International, Inc., Class A		199,200			12,099,408
Nestle SA, ADR		161,978			21,351,940
					40,842,278
Household Products - 0.66%
Colgate-Palmolive Co.		123,127			9,381,046
Kimberly-Clark Corp.		80,880			10,473,151
Reckitt Benckiser Group PLC, ADR		438,582			7,118,186
					26,972,383
Personal Products - 0.51%
Unilever PLC, ADR		388,400			20,810,472
Tobacco - 0.11%
Philip Morris International, Inc.		51,042			4,825,511
Total Consumer Staples					160,421,858
Energy - 7.66%
Energy Equipment & Services - 1.06%
Baker Hughes Co.		293,400			7,358,472
Halliburton Co.		574,000			14,344,260
NOV, Inc.A		949,900			13,317,598
Schlumberger NV		253,900			8,190,814
					43,211,144
Oil, Gas & Consumable Fuels - 6.60%
APA Corp.		1,000,800			26,230,968
Chevron Corp.		62,609			7,168,104
ConocoPhillips		179,147			13,344,660
EOG Resources, Inc.		90,021			8,323,342
Hess Corp.		831,244			68,635,817
Marathon Oil Corp.		2,503,486			40,856,892
Marathon Petroleum Corp.		148,580			9,795,879
Murphy Oil Corp.		125,670			3,497,396
Phillips 66		501,447			37,498,207
Pioneer Natural Resources Co.		176,710			33,041,236
Royal Dutch Shell PLC, Class A, ADR		463,622			21,289,522
					269,682,023
Total Energy					312,893,167
Financials - 25.77%
Banks - 10.30%
Bank of America Corp.		212,462			10,151,434
CIT Group, Inc.		187,200			9,272,016
Citigroup, Inc.		1,496,877			103,524,013
Citizens Financial Group, Inc.		344,353			16,315,445
JPMorgan Chase & Co.		525,048			89,200,405
PNC Financial Services Group, Inc.		86,516			18,257,472
Truist Financial Corp.		176,743			11,217,878
US Bancorp		826,962			49,923,696
Wells Fargo & Co.		2,209,103			113,017,710
					420,880,069

See accompanying notes

10

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 96.63% (continued)
Financials - 25.77% (continued)
Capital Markets - 5.72%
Bank of New York Mellon Corp.		395,700		$	23,425,440
BlackRock, Inc.		21,181			19,983,426
Credit Suisse Group AG, ADRB		1,260,300			12,993,693
Goldman Sachs Group, Inc.		170,895			70,639,448
KKR & Co., Inc., Class A		79,266			6,315,122
Moody’s Corp.		17,360			7,016,044
Morgan Stanley		249,793			25,673,725
Nasdaq, Inc.		122,970			25,807,714
Northern Trust Corp.		215,705			26,540,343
State Street Corp.		157,280			15,499,944
					233,894,899
Consumer Finance - 1.67%
American Express Co.		287,123			49,896,235
SLM Corp.		992,746			18,216,889
					68,113,124
Diversified Financial Services - 0.66%
Berkshire Hathaway, Inc., Class BA		70,500			20,234,205
Equitable Holdings, Inc.		205,000			6,867,500
					27,101,705
Insurance - 7.42%
American International Group, Inc.		1,526,930			90,226,294
Aon PLC, Class A		123,556			39,528,035
Chubb Ltd.		206,133			40,274,266
Hartford Financial Services Group, Inc.		230,900			16,839,537
Marsh & McLennan Cos., Inc.		179,859			30,000,481
Progressive Corp.		231,479			21,962,728
Travelers Cos., Inc.		228,343			36,735,822
Willis Towers Watson PLC		114,637			27,774,252
					303,341,415
Total Financials					1,053,331,212
Health Care - 14.98%
Health Care Equipment & Supplies - 3.18%
Abbott Laboratories		172,588			22,244,867
Boston Scientific Corp.A		441,646			19,048,192
Danaher Corp.		72,124			22,486,099
Medtronic PLC		489,317			58,649,536
Zimmer Biomet Holdings, Inc.		52,867			7,566,325
					129,995,019
Health Care Providers & Services - 6.20%
Anthem, Inc.		202,638			88,173,873
Centene Corp.A		248,500			17,703,140
Cigna Corp.		122,719			26,214,006
CVS Health Corp.		408,528			36,473,380
HCA Healthcare, Inc.		34,000			8,515,640
Humana, Inc.		22,700			10,513,732
McKesson Corp.		59,533			12,375,720
UnitedHealth Group, Inc.		115,556			53,210,071
					253,179,562

See accompanying notes

11

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 96.63% (continued)
Health Care - 14.98% (continued)
Life Sciences Tools & Services - 0.71%
Thermo Fisher Scientific, Inc.		46,044		$	29,149,075
Pharmaceuticals - 4.89%
Bristol-Myers Squibb Co.		135,700			7,924,880
GlaxoSmithKline PLC, ADRB		444,034			18,795,959
Johnson & Johnson		267,303			43,538,313
Merck & Co., Inc.		667,838			58,803,136
Perrigo Co. PLC		750,893			33,902,819
Pfizer, Inc.		486,543			21,281,391
Roche Holding AG, ADR		91,834			4,438,337
Sanofi, ADR		223,364			11,264,246
					199,949,081
Total Health Care					612,272,737
Industrials - 14.45%
Aerospace & Defense - 2.92%
General Dynamics Corp.		148,551			30,118,715
Lockheed Martin Corp.		29,057			9,656,222
Northrop Grumman Corp.		74,974			26,782,212
Raytheon Technologies Corp.		593,382			52,727,925
					119,285,074
Air Freight & Logistics - 0.63%
FedEx Corp.		110,200			25,955,406
Building Products - 1.13%
Johnson Controls International PLC		277,259			20,342,493
Masco Corp.		167,999			11,012,335
Trane Technologies PLC		82,196			14,871,722
					46,226,550
Construction & Engineering - 0.85%
AECOMA		456,873			31,236,407
Fluor Corp.A		182,300			3,543,912
					34,780,319
Electrical Equipment - 1.20%
Eaton Corp. PLC		133,332			21,967,780
Emerson Electric Co.		127,557			12,374,305
Vertiv Holdings Co.		568,326			14,594,612
					48,936,697
Industrial Conglomerates - 2.26%
General Electric Co.		572,262			60,013,116
Honeywell International, Inc.		147,273			32,196,823
					92,209,939
Machinery - 3.64%
CNH Industrial NVB		1,333,139			22,810,008
Cummins, Inc.		72,297			17,339,713
Deere & Co.		62,653			21,446,748
Illinois Tool Works, Inc.		95,184			21,689,578
Otis Worldwide Corp.		52,004			4,176,441
PACCAR, Inc.		202,485			18,146,706
Stanley Black & Decker, Inc.		240,015			43,137,896
					148,747,090

See accompanying notes

12

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 96.63% (continued)
Industrials - 14.45% (continued)
Professional Services - 0.40%
Equifax, Inc.		58,749		$	16,298,735
Road & Rail - 1.42%
Canadian National Railway Co.		63,884			8,490,823
JB Hunt Transport Services, Inc.		138,352			27,281,631
Union Pacific Corp.		93,061			22,464,925
					58,237,379
Total Industrials					590,677,189
Information Technology - 9.29%
Communications Equipment - 0.95%
F5 Networks, Inc.A		127,900			27,006,085
Telefonaktiebolaget LM Ericsson, ADRB		1,089,920			11,847,430
					38,853,515
Electronic Equipment, Instruments & Components - 0.80%
Corning, Inc.		455,340			16,196,444
TE Connectivity Ltd.		113,000			16,498,000
					32,694,444
IT Services - 2.25%
Accenture PLC, Class A		111,295			39,931,533
Cognizant Technology Solutions Corp., Class A		435,659			34,020,611
Fidelity National Information Services, Inc.		98,356			10,891,943
Fiserv, Inc.A		72,040			7,095,220
					91,939,307
Semiconductors & Semiconductor Equipment - 3.01%
Analog Devices, Inc.		56,867			9,865,856
Broadcom, Inc.		69,822			37,122,263
Intel Corp.		198,510			9,726,990
NXP Semiconductors NV		54,062			10,858,893
QUALCOMM, Inc.		131,731			17,525,492
Texas Instruments, Inc.		203,360			38,125,933
					123,225,427
Software - 1.92%
Microsoft Corp.		102,508			33,993,703
Oracle Corp.		461,506			44,276,886
					78,270,589
Technology Hardware, Storage & Peripherals - 0.36%
Hewlett Packard Enterprise Co.		1,005,044			14,723,895
Total Information Technology					379,707,177
Materials - 3.73%
Chemicals - 3.59%
Air Products and Chemicals, Inc.		51,909			15,562,837
Axalta Coating Systems Ltd.A		430,448			13,425,673
Corteva, Inc.		556,489			24,012,500
DuPont de Nemours, Inc.		137,248			9,552,461
International Flavors & Fragrances, Inc.		306,324			45,167,474
PPG Industries, Inc.		135,046			21,684,336
Sherwin-Williams Co.		54,762			17,338,197
					146,743,478

See accompanying notes

13

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 96.63% (continued)
Materials - 3.73% (continued)
Containers & Packaging - 0.14%
International Paper Co.		112,286		$	5,577,246
Total Materials					152,320,724
Real Estate - 1.08%
Equity Real Estate Investment Trusts (REITs) - 1.08%
MGM Growth Properties LLC, Class A		979,729			38,581,728
Public Storage		16,329			5,424,167
					44,005,895
Total Real Estate					44,005,895
Utilities - 3.37%
Electric Utilities - 2.93%
American Electric Power Co., Inc.		105,630			8,947,917
Duke Energy Corp.		259,464			26,467,923
Exelon Corp.		345,577			18,381,241
PPL Corp.		1,155,054			33,265,555
Southern Co.		428,635			26,712,533
Xcel Energy, Inc.		90,156			5,823,176
					119,598,345
Multi-Utilities - 0.44%
Dominion Energy, Inc.		239,460			18,182,198
Total Utilities					137,780,543
Total Common Stocks (Cost $2,496,751,959)					3,949,625,812
SHORT-TERM INVESTMENTS - 3.15% (Cost $128,676,414)
Investment Companies - 3.15%
American Beacon U.S. Government Money Market Select Fund, 0.01%C D		128,676,414			128,676,414
TOTAL INVESTMENTS - 99.78% (Cost $2,625,428,373)					4,078,302,226
OTHER ASSETS, NET OF LIABILITIES - 0.22%					9,190,606
TOTAL NET ASSETS - 100.00%				$	4,087,492,832
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2021 (Note 9).

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

^D 7-day yield.

ADR - American Depositary Receipt.

LLC - Limited Liability Company.

PLC - Public Limited Company.

See accompanying notes

14

American Beacon Large Cap Value Fund^SM

Schedule of Investments

October 31, 2021

Long Futures Contracts Open on October 31, 2021:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
S&P 500 E-Mini Index	543	December 2021	$	120,592,182	$	124,808,550	$	4,216,368
			$	120,592,182	$	124,808,550	$	4,216,368

Index Abbreviations:
S&P 500	S&P 500 Index - U.S. Equity Large-Cap Index.

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2021, the investments were classified as described below:

Large Cap Value Fund	Level 1		Level 2		Level 3		Total
Assets
Common Stocks	$	3,949,625,812	$	-	$	-	$	3,949,625,812
Short-Term Investments		128,676,414		-		-		128,676,414
Total Investments in Securities - Assets	$	4,078,302,226	$	-	$	-	$	4,078,302,226
Financial Derivative Instruments - Assets
Futures Contracts	$	4,216,368	$	-	$	-	$	4,216,368
Total Financial Derivative Instruments - Assets	$	4,216,368	$	-	$	-	$	4,216,368

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2021, there were no transfers into or out of Level 3.

See accompanying notes

15

American Beacon Large Cap Value Fund^SM

Statement of Assets and Liabilities

October 31, 2021

Assets:
Investments in unaffiliated securities, at fair value†§	$	3,949,625,812
Investments in affiliated securities, at fair value‡		128,676,414
Cash collateral held at broker for futures contracts		7,239,000
Dividends and interest receivable		3,475,127
Receivable for investments sold		19,116,922
Receivable for fund shares sold		2,121,324
Receivable for tax reclaims		502,200
Receivable for expense reimbursement (Note 2)		135,066
Receivable for variation margin on open futures contracts (Note 5)		4,217,513
Prepaid expenses		47,953
Total assets		4,115,157,331
Liabilities:
Payable for investments purchased		16,597,196
Payable for fund shares redeemed		2,166,425
Cash due to broker for futures contracts		3,958,862
Management and sub-advisory fees payable (Note 2)		4,024,448
Service fees payable (Note 2)		330,755
Transfer agent fees payable (Note 2)		85,847
Custody and fund accounting fees payable		256,442
Professional fees payable		66,781
Trustee fees payable (Note 2)		21,636
Payable for prospectus and shareholder reports		73,164
Other liabilities		82,943
Total liabilities		27,664,499
Net assets	$	4,087,492,832
Analysis of net assets:
Paid-in-capital	$	2,321,820,755
Total distributable earnings (deficits)A		1,765,672,077
Net assets	$	4,087,492,832
Shares outstanding at no par value (unlimited shares authorized):
R5 Class		54,293,158
Y Class		8,414,665
Investor Class		29,449,112
Advisor Class		2,321,837
A Class		462,672
C Class		254,844
R6 Class		40,097,656
Net assets:
R5 Class	$	1,682,465,233
Y Class	$	258,183,363
Investor Class	$	821,099,597
Advisor Class	$	63,521,926
A Class	$	12,661,833
C Class	$	6,898,120
R6 Class	$	1,242,662,760
Net asset value, offering and redemption price per share:
R5 Class	$	30.99
Y Class	$	30.68
Investor Class	$	27.88
Advisor Class	$	27.36
A Class	$	27.37
A Class (offering price)	$	29.04
C Class	$	27.07
R6 Class	$	30.99
† Cost of investments in unaffiliated securities	$	2,496,751,959
‡ Cost of investments in affiliated securities	$	128,676,414
§ Fair value of securities on loan	$	19,126,587
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

16

American Beacon Large Cap Value Fund^SM

Statement of Operations

For the year ended October 31, 2021

Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	80,757,896
Dividend income from affiliated securities (Note 2)		9,628
Interest income		2,904
Income derived from securities lending (Note 9)		540,017
Total investment income		81,310,445
Expenses:
Management and sub-advisory fees (Note 2)		23,317,879
Transfer agent fees:
R5 Class (Note 2)		681,358
Y Class (Note 2)		241,639
Investor Class		33,110
Advisor Class		2,871
A Class		1,062
R6 Class		35,484
Custody and fund accounting fees		492,617
Professional fees		226,171
Registration fees and expenses		138,417
Service fees (Note 2):
Investor Class		3,146,405
Advisor Class		147,343
A Class		21,723
C Class		5,423
Distribution fees (Note 2):
Advisor Class		147,277
A Class		48,708
C Class		62,307
Prospectus and shareholder report expenses		202,072
Trustee fees (Note 2)		285,645
Loan expense (Note 10)		20,960
Other expenses		428,661
Total expenses		29,687,132
Net fees waived and expenses (reimbursed) (Note 2)		(18,227	)
Net expenses		29,668,905
Net investment income		51,641,540
Realized and unrealized gain (loss) from investments:
Net realized gain (loss) from:
Investments in unaffiliated securitiesA		421,706,626
Foreign currency transactions		(966	)
Futures contracts		25,960,342
Change in net unrealized appreciation of:
Investments in unaffiliated securitiesB		1,252,920,290
Futures contracts		8,262,696
Net gain from investments		1,708,848,988
Net increase in net assets resulting from operations	$	1,760,490,528
† Foreign taxes	$	516,726
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

17

American Beacon Large Cap Value Fund^SM

Statement of Changes in Net Assets

	Year Ended October 31, 2021			Year Ended October 31, 2020
Increase (decrease) in net assets:
Operations:
Net investment income	$	51,641,540		$	81,178,908
Net realized gain from investments in unaffiliated securities, foreign currency transactions and futures contracts		447,666,002			467,774,870
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities and futures contracts		1,261,182,986			(1,000,341,114	)
Net increase (decrease) in net assets resulting from operations		1,760,490,528			(451,387,336	)
Distributions to shareholders:
Total retained earnings:
R5 Class		(254,078,202	)		(273,627,748	)
Y Class		(26,891,195	)		(29,187,098	)
Investor Class		(112,558,225	)		(110,555,842	)
Advisor Class		(7,618,655	)		(6,464,926	)
A Class		(3,990,605	)		(4,077,104	)
C Class		(690,733	)		(658,758	)
R6 Class		(155,468,634	)		(76,992,021	)
Net distributions to shareholders		(561,296,249	)		(501,563,497	)
Capital share transactions (Note 11):
Proceeds from sales of shares		932,407,979			1,238,519,195
Reinvestment of dividends and distributions		510,804,380			461,617,755
Cost of shares redeemed		(2,333,154,895	)		(2,384,380,519	)
Net (decrease) in net assets from capital share transactions		(889,942,536	)		(684,243,569	)
Net increase (decrease) in net assets		309,251,743			(1,637,194,402	)
Net assets:
Beginning of year		3,778,241,089			5,415,435,491
End of year	$	4,087,492,832		$	3,778,241,089

See accompanying notes

18

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of October 31, 2021, the Trust consists of twenty-eight active series, one of which is presented in this filing: American Beacon Large Cap Value Fund (the “Fund”). The remaining twenty-seven 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.

In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives the fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how the fund will use derivatives, may adversely affect the fund’s performance and may increase costs related to the fund’s use of derivatives.

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
R5 Class	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 Class	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500
Advisor Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrators.	$	2,500

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October 31, 2021

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

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

Significant Accounting Policies

The following is a summary of significant accounting policies, consistently followed by the 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. Tax reclaim accruals are automatically generated on accounting and custody systems at the time of the income event based on the tax databases maintained by the Fund’s custodian. 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. Estimated tax liabilities on certain foreign securities are recorded on an accrual basis and are reflected as components of interest income or net change in unrealized appreciation (depreciation) on investments on the Statement of Operations, as appropriate. Tax liabilities realized as a result of such security sales are reflected as a component of net realized gain (loss) on investments on the 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.

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

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Notes to Financial Statements

October 31, 2021

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.

Allocation of Income, Trust Expenses, Gains, and Losses

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

Use of Estimates

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

Other

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

2.  Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

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

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

The Trust, on behalf of the Fund, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Hotchkis and Wiley Capital Management, LLC; and Massachusetts Financial Services Company (“Sub-Advisors”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets.

The Management and Sub-Advisory Fees paid by the Fund for the year ended October 31, 2021 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	14,897,334
Sub-Advisor Fees		0.20	%		8,420,545
Total		0.55	%	$	23,317,879

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,

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October 31, 2021

a fee of 10% of the net monthly interest income (the gross interest income earned by the investment of cash collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee of 10% of such loan fees. 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. These fees are included in “Income derived from securities lending” and “Management and sub-advisory fees” on the Statement of Operations. During the year ended October 31, 2021, the Manager received securities lending fees of $59,470 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 Advisor, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

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

Sub-Transfer Agent Fees

The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the R5 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 R5 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 R5 and Y Classes on an annual basis. During the year ended October 31, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Large Cap Value	$	854,517

As of October 31, 2021, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
Large Cap Value	$	62,520

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Notes to Financial Statements

October 31, 2021

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 listed below held the following shares with an October 31, 2021 fair value and dividend income earned from the investment in the USG Select Fund.

Affiliated Security	Type of Transaction	Fund		October 31, 2021 Shares/Principal		Change in Unrealized Gain (Loss)		Realized Gain (Loss)		Dividend Income		October 31, 2021 Fair Value
U.S. Government Money Market Select	Direct		Large Cap Value	$	128,676,414	$	-	$	-	$	9,628	$	128,676,414

The Fund and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended October 31, 2021, the Manager earned fees on the Fund’s direct investments and securities lending collateral investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral Investments in USG Select Fund		Total
Large Cap Value	$	114,325	$	3,396	$	117,721

Interfund Credit Facility

Pursuant to an exemptive order issued by the SEC, the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for the fund. When the fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2021, the Fund participated as a lender by loaning an average amount of $1,116,456 for 69 days at an average interest rate of 0.82% with interest charges earned of $1,735. This amount is included in “Interest income” on the Statement of Operations.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Fund, through February 28, 2022, to the extent that total operating expenses (excluding taxes, interest, brokerage commissions, acquired fund fees and expenses, securities lending fees, expenses associated with securities sold

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October 31, 2021

short, litigation, and other extraordinary expenses) exceed the Fund’s expense cap. During the year ended October 31, 2021, the Manager waived and/or reimbursed expenses as follows:

Fund	Class		Expense Cap						Reimbursed Expenses		(Recouped) Expenses			Expiration of Reimbursed Expenses
			11/1/2020 – 2/28/2021			3/1/2021 – 10/31/2021
Large Cap Value		R6		0.59	%		0.60	%	$	18,227	$	(58,238	)*		2023-2024

^* This amount represents Recouped Expenses from prior fiscal years and is reflected in Other Expenses on the Statement of Operations.

Of the above amounts, $135,066 was disclosed as a Receivable for Expense Reimbursement on the Statement of Assets and Liabilities at October 31, 2021.

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 from 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 2023 and 2024. 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
Large Cap Value	$	58,238	$	199,853	$	-		2022-2023

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 October 31, 2021, RID collected $6,094 from the sale of Class A Shares of the Fund.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Fund’s Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2021, there were no CDSC fees collected for the Class A Shares of the Fund.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Fund’s Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2021, CDSC fees of $1,063 were collected for Class C Shares of the Fund.

Trustee Fees and Expenses

Effective January 1, 2021, 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 and Compliance Committee and the Investment Committee, (c) $1,000 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

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October 31, 2021

meetings, Committee meetings, and relevant educational seminars. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. 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 and Compliance 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 $10,000.

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.

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October 31, 2021

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.

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

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

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

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October 31, 2021

4.  Securities and Other Investments

American Depositary Receipts and Non-Voting Depositary Receipts

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

Common Stock

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

Other Investment Company Securities and Other Exchange-Traded Products

The Fund at times 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 the 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, Fund 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 Fund shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses, if applicable, are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus. Investment in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

Publicly Traded Partnerships/Master Limited Partnerships (“MLPs”)

The Fund may invest in publicly traded partnerships such as MLPs. MLPs issue units that are registered with the SEC and are freely tradable on a securities exchange or in the OTC market. An MLP may have one or more general partners, who conduct the business, and one or more limited partners, who contribute capital. The general partner or partners are jointly and severally responsible for the liabilities of the MLP. (An MLP also may be an

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Notes to Financial Statements

October 31, 2021

entity similar to a limited partnership, such as an LLC, which has one or more managers or managing members and non-managing members (who are like limited partners)). The Fund invests in an MLP as a limited partner and normally would not be liable for the debts of an MLP beyond the amount the Fund has invested therein, but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain instances, creditors of an MLP would have the right to seek a return of capital that had been distributed to a limited partner. The right of an MLP’s creditors would continue even after the Fund had sold its investment in the partnership. MLPs typically invest in real estate and oil and gas equipment leasing assets, but they also finance entertainment, research and development, and other projects.

Real Estate Investment Trusts (“REITs”)

REITs are pooled investment vehicles that own, and often operate, income producing real estate (known as “equity REITs”) or invest in mortgages secured by loans on such real estate (known as “mortgage REITs”) or both (known as “hybrid REITs”). REITs are susceptible to the risks associated with direct ownership of real estate, such as declines in property values, increase in property taxes, operating expenses, rising interest rates or overbuilding, zoning changes, and losses from casualty or condemnation. REITs typically are subject to management fees and other expenses that are separate from those of the Fund.

5.  Financial Derivative Instruments

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

Futures Contracts

A futures contract is a contract to purchase or sell a particular security, or the cash value of an asset, such as securities, indices, or currencies, at a specified future date at a price agreed upon when the contract is made. Under many such contracts, no delivery of the actual underlying asset is required. Rather, upon the expiration of the contract, settlement is made by exchanging cash in an amount equal to the difference between the contract price and the closing price of the asset (e.g., a security or an index) at expiration, net of the initial and variation margin that was previously paid. A Treasury futures contract is a contract for the future delivery of a U.S. Treasury security. An equity index futures contract is based on the value of an underlying index. The Fund may, from time to time, use futures positions to equitize cash and expose its portfolio to changes in securities prices or index prices. This can magnify gains and losses in the Fund. The Fund also may have to sell assets at inopportune times to satisfy its settlement or collateral obligations. The risks associated with the use of futures contracts also include that there may be an imperfect correlation between the changes in market value of the prices of futures contracts and the assets underlying such contracts and that there may not be a liquid secondary market for a futures contract.

During the year ended October 31, 2021, the Fund entered into futures contracts primarily for exposing cash to markets.

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

Average Futures Contracts Outstanding
Fund	Year Ended October 31, 2021
Large Cap Value		457

28

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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

Fair values of financial instruments on the Statement of Assets and Liabilities as of October 31, 2021:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts			Foreign exchange contracts			Commodity contracts			Interest rate contracts			Equity contracts			Total
Receivable for variation margin from open futures contracts(2)		$	-		$	-		$	-		$	-		$	4,216,368		$	4,216,368
The effect of financial derivative instruments on the Statement of Operations as of October 31, 2021:
	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		$	-		$	-		$	-		$	-		$	25,960,342		$	25,960,342
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		$	-		$	-		$	-		$	-		$	8,262,696		$	8,262,696

⁽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 counterparties and has elected not to offset qualifying financial and derivative instruments on the Statement of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below, if applicable. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, October 31, 2021.

Offsetting of Financial and Derivative Assets as of October 31, 2021:
	Assets			Liabilities
Futures Contracts(1)	$	4,216,368		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	4,216,368		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(4,216,368	)	$	-

⁽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.

29

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Equity Investments Risk

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

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

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. There may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes. There can be no assurance that any strategy used will succeed. There also can be no assurance that, at all times, a liquid market will exist for offsetting a futures contract that the Fund has previously bought or sold and this may result in the inability to close a futures contract when desired. Futures contracts may experience potentially dramatic price changes, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).

Market Risk

The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund’s performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. 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

30

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future, particularly if markets enter a period of uncertainty or economic weakness. The value of a security may decline due to adverse issuer-specific conditions, general market conditions unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole.

Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Adverse market events may also lead to increased shareholder redemptions, which could cause the Fund to experience a loss or difficulty in selling investments to meet redemption requests by shareholders and may increase the Fund’s portfolio turnover, which will increase the costs that the Fund incurs and lower the Fund’s performance. Even when securities markets perform well, there is no assurance that the investments held by the Fund will increase in value along with the broader market.

Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, including the U.S. presidential election, 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 severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers.

Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in securities prices could be a sustained trend or a drastic movement. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.

Multiple Sub-Advisor Risk

The Manager may allocate the Fund’s assets among multiple sub-advisors, each of which is responsible for investing its allocated portion of the Fund’s assets. To a significant extent, the Fund’s performance will depend on the success of the Manager in allocating the Fund’s assets to sub-advisors and its selection and oversight of the sub-advisors. Because each sub-advisor manages its allocated portion of the Fund independently from another sub-advisor, the same security may be held in different portions of the Fund, or may be acquired for one portion of the Fund at a time when a sub-advisor to another portion deems it appropriate to dispose of the security from that other portion, resulting in higher expenses without accomplishing any net result in the Fund’s holdings. Similarly, under some market conditions, one sub-advisor may believe that temporary, defensive investments in short-term instruments or cash are appropriate when another sub-advisor believes continued exposure to the equity or debt markets is appropriate for its allocated portion of the Fund. Because each sub-advisor directs the trading for its

31

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

own portion of the Fund, and does not aggregate its transactions with those of the other sub-advisors, the Fund may incur higher brokerage costs than would be the case if a single sub-adviser were managing the entire Fund. In addition, while the Manager seeks to allocate the Fund’s assets among the Fund’s sub-advisors in a manner that it believes is consistent with achieving the Fund’s investment objective(s), the Manager may be subject to potential conflicts of interest in allocating the Fund’s assets among sub-advisors, due to factors that could impact the Manager’s revenues and profits.

Other Investment Companies Risk

The Fund may invest in shares of other registered investment companies, including money market funds that are advised by the Manager. To the extent that the 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 that track an index, the Fund is subject to the risks associated with the underlying investments held by the investment company or the index fluctuations to which the investment company is subject.

Recent Market Events Risk

An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. Transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions, closed international, national and local borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event cancellations, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession. The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time.

The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets. Amid the Federal Reserve’s ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. 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. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty.

A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on December 31, 2020, commonly referred to as “Brexit,” and a trade agreement between the United Kingdom and the European Union, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.

32

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.

Sector Risk

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

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

Securities Lending Risk

The Fund may lend its portfolio securities to brokers, dealers and financial institutions in order to obtain additional income. Borrowers of the Fund’s securities provide collateral either in the form of cash, which the Fund reinvests in securities or in the form of non-cash collateral consisting of securities issued or guaranteed by the U.S. government or one of its agencies or instrumentalities. The Fund will be responsible for the risks associated with the investment of cash collateral, including any collateral invested in an affiliated money market fund. The Fund may lose money on its investment of cash collateral or may fail to earn sufficient income on its investment to cover its payment to the borrower of a pre-negotiated fee or “rebate” for the use of that cash collateral in connection with the loan. The Fund could also lose money due to a decline in the value of non-cash collateral. In addition, delays may occur in the recovery of securities from borrowers, which could interfere with the Fund’s ability to vote proxies or to settle transactions or could result in increased costs. Moreover, if the borrower becomes subject to insolvency or similar proceedings, the Fund could incur delays in its ability to enforce its rights in its collateral. There also is a risk that a borrower may default on its obligation to return loaned securities at a time when the value of the Fund’s collateral is inadequate. Although the Fund’s securities lending agent may indemnify the Fund against that risk, it is also possible that the securities lending agent will be unable to satisfy its indemnification obligations. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, whether or not due to a default by the borrower, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income.”

7.  Federal Income and Excise Taxes

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

The Fund does not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2021 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.

33

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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

Dividends are categorized in accordance with income tax regulations which may treat certain transactions differently than U.S. GAAP. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

The tax character of distributions paid were as follows:

	Year Ended October 31, 2021		Year Ended October 31, 2020
Distributions paid from:
Ordinary income*
R5 Class	$	34,682,616	$	65,160,967
Y Class		3,563,893		6,822,201
Investor Class		13,029,824		23,290,880
Advisor Class		825,551		1,302,556
A Class		450,180		837,320
C Class		44,328		102,714
R6 Class		21,578,876		18,513,208
Long-term capital gains
R5 Class		219,395,586		208,466,781
Y Class		23,327,302		22,364,897
Investor Class		99,528,401		87,264,962
Advisor Class		6,793,104		5,162,370
A Class		3,540,425		3,239,784
C Class		646,405		556,044
R6 Class		133,889,758		58,478,813
Total distributions paid	$	561,296,249	$	501,563,497

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

As of October 31, 2021, $67,273,604 long-term capital gains designated for federal income tax purposes are due to the use of accumulated earnings and profits distributed to shareholders upon redemption of shares.

As of October 31, 2021, the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Large Cap Value	$	2,731,407,963	$	1,395,006,438	$	(48,112,175	)	$	1,346,894,263

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)		Other Temporary Differences		Distributable Earnings
Large Cap Value	$	1,346,894,263	$	118,648,306	$	300,129,508	$	–	$	–	$	1,765,672,077

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

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

34

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Accordingly, the following amounts represent current year permanent differences derived from equalization as of October 31, 2021:

Fund	Paid-In-Capital		Distributable Earnings/(Deficits)
Large Cap Value	$	67,273,604	$	(67,273,604	)

For federal income tax purposes, the Fund measures its capital loss carryforwards annually at October 31, its fiscal year end. Capital loss carryforwards retain their character as short-term and/or long-term and may be carried forward and applied against future realized capital gains with no expiration date.

As of October 31, 2021, the Fund did not have any capital loss carryforwards.

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2021 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
Large Cap Value	$	932,052,504	$	2,351,051,649

A summary of the Fund’s transactions in the USG Select Fund for the year ended October 31, 2021 were as follows:

Fund	Type of Transaction	October 31, 2020 Shares/Fair Value		Purchases		Sales		October 31, 2021 Shares/Fair Value
Large Cap Value	Direct	$	84,250,125	$	2,322,013,441	$	2,277,587,152	$	128,676,414
Large Cap Value	Securities Lending		-		118,377,938		118,377,938		-

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.

35

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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

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

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

As of October 31, 2021, the value of outstanding securities on loan and the value of collateral were as follows:

Fund	Market Value of Securities on Loan		Cash Collateral Received		Non-Cash Collateral Received		Total Collateral Received
Large Cap Value	$	19,126,587	$	-	$	19,925,475	$	19,925,475

Cash collateral is listed on the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statement of Operations.

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

10.  Borrowing Arrangements

Effective November 12, 2020 (the “Effective Date”), the Fund, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Fund’s Committed Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

On the Effective Date, the Fund, along with certain other Participating Funds managed by the Manager, also renewed 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

36

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

is $50 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Fund’s Uncommitted Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

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

During the year ended October 31, 2021, 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:

	R5 Class
	Year Ended October 31,
	2021						2020
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		9,514,528		$	261,378,308			14,583,865		$	345,640,279
Reinvestment of dividends		9,027,196			216,381,886			8,842,185			241,214,794
Shares redeemed		(41,632,480	)		(1,173,557,287	)		(56,846,970	)		(1,416,115,045	)
Net (decrease) in shares outstanding		(23,090,756	)	$	(695,797,093	)		(33,420,920	)	$	(829,259,972	)
	Y Class
	Year Ended October 31,
	2021						2020
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		2,676,780		$	75,015,392			4,619,593		$	106,515,177
Reinvestment of dividends		1,085,985			25,792,134			1,043,006			28,234,181
Shares redeemed		(3,037,622	)		(82,439,293	)		(8,700,548	)		(223,599,140	)
Net increase (decrease) in shares outstanding		725,143		$	18,368,233			(3,037,949	)	$	(88,849,782	)
	Investor Class
	Year Ended October 31,
	2021						2020
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		3,651,934		$	92,653,002			4,873,178		$	102,511,782
Reinvestment of dividends		5,150,897			111,413,906			4,323,502			107,957,844
Shares redeemed		(12,564,935	)		(310,817,392	)		(19,147,457	)		(414,908,921	)
Net (decrease) in shares outstanding		(3,762,104	)	$	(106,750,484	)		(9,950,777	)	$	(204,439,295	)
	Advisor Class
	Year Ended October 31,
	2021						2020
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		348,459		$	8,359,633			549,199		$	11,028,542
Reinvestment of dividends		331,974			7,054,439			209,035			5,140,176
Shares redeemed		(554,676	)		(13,386,335	)		(1,135,706	)		(25,190,406	)
Net increase (decrease) in shares outstanding		125,757		$	2,027,737			(377,472	)	$	(9,021,688	)
	A Class
	Year Ended October 31,
	2021						2020
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		98,924		$	2,464,857			224,146		$	5,007,909
Reinvestment of dividends		184,657			3,920,273			164,301			4,035,240
Shares redeemed		(1,051,348	)		(24,700,324	)		(684,117	)		(13,767,798	)
Net (decrease) in shares outstanding		(767,767	)	$	(18,315,194	)		(295,670	)	$	(4,724,649	)

37

American Beacon Large Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

	C Class
	Year Ended October 31,
	2021						2020
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		76,910		$	1,897,938			24,726		$	531,337
Reinvestment of dividends		31,897			673,993			25,018			611,677
Shares redeemed		(79,903	)		(1,963,612	)		(91,652	)		(1,912,256	)
Net increase (decrease) in shares outstanding		28,904		$	608,319			(41,908	)	$	(769,242	)
	R6 Class
	Year Ended October 31,
	2021						2020
Large Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		17,246,084		$	490,638,849			26,236,020		$	667,284,169
Reinvestment of dividends		6,072,914			145,567,749			2,730,148			74,423,843
Shares redeemed		(26,373,754	)		(726,290,652	)		(11,934,191	)		(288,886,953	)
Net increase (decrease) in shares outstanding		(3,054,756	)	$	(90,084,054	)		17,031,977		$	452,821,059

12.  Subsequent Events

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

38

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R5 ClassA
	Year Ended October 31,
	2021			2020B			2019			2018			2017
Net asset value, beginning of period	$	23.36		$	28.32		$	28.41		$	30.98		$	25.80
Income (loss) from investment operations:
Net investment income		0.59			0.65			0.63			0.63			0.59
Net gains (losses) on investments (both realized and unrealized)		10.64			(2.89	)		1.69			(0.07	)		5.41
Total income (loss) from investment operations		11.23			(2.24	)		2.32			0.56			6.00
Less distributions:
Dividends from net investment income		(0.49	)		(0.62	)		(0.55	)		(0.55	)		(0.60	)
Distributions from net realized gains		(3.11	)		(2.10	)		(1.86	)		(2.58	)		(0.22	)
Total distributions		(3.60	)		(2.72	)		(2.41	)		(3.13	)		(0.82	)
Net asset value, end of period	$	30.99		$	23.36		$	28.32		$	28.41		$	30.98
Total returnC		52.60	%		(9.29	)%		10.14	%		1.51	%		23.60	%
Ratios and supplemental data:
Net assets, end of period	$	1,682,465,233		$	1,807,587,315		$	3,137,789,485		$	3,700,700,522		$	4,765,771,483
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.63	%		0.63	%		0.63	%		0.62	%		0.60	%
Expenses, net of reimbursements and/or recoupments		0.63	%		0.63	%		0.63	%		0.62	%		0.60	%
Net investment income, before expense reimbursements and/or recoupments		1.30	%		1.90	%		2.07	%		1.83	%		1.78	%
Net investment income, net of reimbursements and/or recoupments		1.30	%		1.90	%		2.07	%		1.83	%		1.78	%
Portfolio turnover rate		23	%		67	%		23	%		23	%		25	%

^A  Prior to February 28, 2020, the R5 Class was known as Institutional Class.

^B  On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

^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

39

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	23.16		$	28.10		$	28.20		$	30.78		$	25.64
Income (loss) from investment operations:
Net investment income		0.38			0.39			0.56			0.57			0.48
Net gains (losses) on investments (both realized and unrealized)		10.73			(2.63	)		1.72			(0.04	)		5.46
Total income (loss) from investment operations		11.11			(2.24	)		2.28			0.53			5.94
Less distributions:
Dividends from net investment income		(0.48	)		(0.60	)		(0.52	)		(0.53	)		(0.58	)
Distributions from net realized gains		(3.11	)		(2.10	)		(1.86	)		(2.58	)		(0.22	)
Total distributions		(3.59	)		(2.70	)		(2.38	)		(3.11	)		(0.80	)
Net asset value, end of period	$	30.68		$	23.16		$	28.10		$	28.20		$	30.78
Total returnB		52.47	%		(9.35	)%		10.05	%		1.42	%		23.51	%
Ratios and supplemental data:
Net assets, end of period	$	258,183,363		$	178,065,442		$	301,457,382		$	298,017,629		$	384,155,569
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.69	%		0.70	%		0.70	%		0.68	%		0.67	%
Expenses, net of reimbursements and/or recoupments		0.69	%		0.70	%		0.70	%		0.68	%		0.67	%
Net investment income, before expense reimbursements and/or recoupments		1.21	%		1.84	%		1.98	%		1.77	%		1.69	%
Net investment income, net of reimbursements and/or recoupments		1.21	%		1.84	%		1.98	%		1.77	%		1.69	%
Portfolio turnover rate		23	%		67	%		23	%		23	%		25	%

^A  On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

See accompanying notes

40

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	21.32		$	26.06		$	26.33		$	28.92		$	24.13
Income (loss) from investment operations:
Net investment income		0.20			0.29			0.41			0.41			0.40
Net gains (losses) on investments (both realized and unrealized)		9.88			(2.41	)		1.63			0.02			5.12
Total income (loss) from investment operations		10.08			(2.12	)		2.04			0.43			5.52
Less distributions:
Dividends from net investment income		(0.41	)		(0.52	)		(0.45	)		(0.44	)		(0.51	)
Distributions from net realized gains		(3.11	)		(2.10	)		(1.86	)		(2.58	)		(0.22	)
Total distributions		(3.52	)		(2.62	)		(2.31	)		(3.02	)		(0.73	)
Net asset value, end of period	$	27.88		$	21.32		$	26.06		$	26.33		$	28.92
Total returnB		52.04	%		(9.59	)%		9.77	%		1.18	%		23.20	%
Ratios and supplemental data:
Net assets, end of period	$	821,099,597		$	707,970,431		$	1,124,625,846		$	1,505,354,807		$	1,990,199,621
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.98	%		0.96	%		0.96	%		0.95	%		0.92	%
Expenses, net of reimbursements and/or recoupments		0.98	%		0.96	%		0.96	%		0.95	%		0.92	%
Net investment income, before expense reimbursements and/or recoupments		0.93	%		1.57	%		1.74	%		1.50	%		1.46	%
Net investment income, net of reimbursements and/or recoupments		0.93	%		1.57	%		1.74	%		1.50	%		1.46	%
Portfolio turnover rate		23	%		67	%		23	%		23	%		25	%

^A  On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

See accompanying notes

41

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	20.97		$	25.68		$	25.95		$	28.54		$	23.82
Income (loss) from investment operations:
Net investment income		0.26			0.24			0.47			0.28			0.21
Net gains (losses) on investments (both realized and unrealized)		9.62			(2.36	)		1.52			0.10			5.20
Total income (loss) from investment operations		9.88			(2.12	)		1.99			0.38			5.41
Less distributions:
Dividends from net investment income		(0.38	)		(0.49	)		(0.40	)		(0.39	)		(0.47	)
Distributions from net realized gains		(3.11	)		(2.10	)		(1.86	)		(2.58	)		(0.22	)
Total distributions		(3.49	)		(2.59	)		(2.26	)		(2.97	)		(0.69	)
Net asset value, end of period	$	27.36		$	20.97		$	25.68		$	25.95		$	28.54
Total returnB		51.89	%		(9.73	)%		9.64	%		1.00	%		23.00	%
Ratios and supplemental data:
Net assets, end of period	$	63,521,926		$	46,049,690		$	66,077,449		$	62,811,940		$	88,196,090
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.10	%		1.10	%		1.10	%		1.09	%		1.07	%
Expenses, net of reimbursements and/or recoupments		1.10	%		1.10	%		1.10	%		1.09	%		1.07	%
Net investment income, before expense reimbursements and/or recoupments		0.81	%		1.42	%		1.58	%		1.36	%		1.31	%
Net investment income, net of reimbursements and/or recoupments		0.81	%		1.42	%		1.58	%		1.36	%		1.31	%
Portfolio turnover rate		23	%		67	%		23	%		23	%		25	%

^A  On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

See accompanying notes

42

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	20.96		$	25.66		$	26.00		$	28.61		$	23.90
Income (loss) from investment operations:
Net investment income		0.24	B		0.20			0.40			0.48			0.28
Net gains (losses) on investments (both realized and unrealized)		9.68			(2.29	)		1.59			(0.06	)		5.17
Total income (loss) from investment operations		9.92			(2.09	)		1.99			0.42			5.45
Less distributions:
Dividends from net investment income		(0.40	)		(0.51	)		(0.47	)		(0.45	)		(0.52	)
Distributions from net realized gains		(3.11	)		(2.10	)		(1.86	)		(2.58	)		(0.22	)
Total distributions		(3.51	)		(2.61	)		(2.33	)		(3.03	)		(0.74	)
Net asset value, end of period	$	27.37		$	20.96		$	25.66		$	26.00		$	28.61
Total returnC		52.15	%		(9.65	)%		9.72	%		1.15	%		23.13	%
Ratios and supplemental data:
Net assets, end of period	$	12,661,833		$	25,792,400		$	39,157,098		$	42,722,617		$	40,073,435
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.96	%		1.00	%		1.01	%		0.93	%		0.98	%
Expenses, net of reimbursements and/or recoupments		0.96	%		1.00	%		1.01	%		0.93	%		0.98	%
Net investment income, before expense reimbursements and/or recoupments		0.98	%		1.52	%		1.68	%		1.49	%		1.38	%
Net investment income, net of reimbursements and/or recoupments		0.98	%		1.52	%		1.68	%		1.49	%		1.38	%
Portfolio turnover rate		23	%		67	%		23	%		23	%		25	%

^A  On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

^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

43

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2021			2020A			2019			2018			2017
Net asset value, beginning of period	$	20.74		$	25.43		$	25.71		$	28.27		$	23.57
Income (loss) from investment operations:
Net investment income		0.16			0.08			0.26			0.21			0.09
Net gains (losses) on investments (both realized and unrealized)		9.49			(2.32	)		1.57			0.05			5.11
Total income (loss) from investment operations		9.65			(2.24	)		1.83			0.26			5.20
Less distributions:
Dividends from net investment income		(0.21	)		(0.35	)		(0.25	)		(0.24	)		(0.28	)
Distributions from net realized gains		(3.11	)		(2.10	)		(1.86	)		(2.58	)		(0.22	)
Total distributions		(3.32	)		(2.45	)		(2.11	)		(2.82	)		(0.50	)
Net asset value, end of period	$	27.07		$	20.74		$	25.43		$	25.71		$	28.27
Total returnB		51.05	%		(10.26	)%		8.94	%		0.57	%		22.27	%
Ratios and supplemental data:
Net assets, end of period	$	6,898,120		$	4,687,004		$	6,811,169		$	6,851,003		$	8,351,349
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.68	%		1.68	%		1.70	%		1.64	%		1.72	%
Expenses, net of reimbursements and/or recoupments		1.68	%		1.68	%		1.70	%C		1.54	%		1.72	%
Net investment income, before expense reimbursements and/or recoupments		0.22	%		0.84	%		0.99	%		0.79	%		0.66	%
Net investment income, net of reimbursements and/or recoupments		0.22	%		0.84	%		0.99	%		0.90	%		0.66	%
Portfolio turnover rate		23	%		67	%		23	%		23	%		25	%

^A On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

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

See accompanying notes

44

American Beacon Large Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R6 Class
	Year Ended October 31,												February 28, 2017A to October 31, 2017
	2021			2020B			2019			2018
Net asset value, beginning of period	$	23.36		$	28.31		$	28.41		$	30.98		$	28.64
Income (loss) from investment operations:
Net investment income		0.36			0.56			0.61			0.59			0.12
Net gains (losses) on investments (both realized and unrealized)		10.88			(2.78	)		1.71			(0.02	)		2.22
Total income (loss) from investment operations		11.24			(2.22	)		2.32			0.57			2.34
Less distributions:
Dividends from net investment income		(0.50	)		(0.63	)		(0.56	)		(0.56	)		–
Distributions from net realized gains		(3.11	)		(2.10	)		(1.86	)		(2.58	)		–
Total distributions		(3.61	)		(2.73	)		(2.42	)		(3.14	)		–
Net asset value, end of period	$	30.99		$	23.36		$	28.31		$	28.41		$	30.98
Total returnC		52.65	%		(9.23	)%		10.15	%		1.54	%		8.17	%D
Ratios and supplemental data:
Net assets, end of period	$	1,242,662,760		$	1,008,088,807		$	739,517,062		$	571,236,567		$	40,982,401
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.60	%		0.62	%		0.60	%		0.59	%		0.60	%E
Expenses, net of reimbursements and/or recoupments		0.60	%		0.59	%		0.58	%		0.58	%		0.58	%E
Net investment income, before expense reimbursements and/or recoupments		1.31	%		1.90	%		2.07	%		1.75	%		1.38	%E
Net investment income, net of reimbursements and/or recoupments		1.31	%		1.93	%		2.09	%		1.76	%		1.40	%E
Portfolio turnover rate		23	%		67	%		23	%		23	%		25	%F

^A Commencement of operations.

^B On January 17, 2020, Brandywine Global Investment Management, LLC was terminated and ceased managing assets of the Fund.

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

^D Not annualized.

^E Annualized.

^F Portfolio turnover rate is for the period from February 28, 2017 through October 31, 2017 and is not annualized.

See accompanying notes

45

American Beacon Funds^SM

Federal Tax Information

October 31, 2021 (Unaudited)

Certain tax information regarding the Funds are required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2021. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2021.

The Fund designated the following items with regard to distributions paid during the fiscal year ended October 31, 2021. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends-Received Deduction:

Large Cap Value 100.00 % 

Qualified Dividend Income:

Large Cap Value 100.00 % 

Long-Term Capital Gain Distributions:

Large Cap Value $554,394,585

Short-Term Capital Gain Distributions:

Large Cap Value $ 0

Shareholders will receive notification in January 2022 of the applicable tax information necessary to prepare their 2021 income tax returns.

46

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

Renewal and Approval of Management Agreement and Investment Advisory Agreements

At meetings held on May 17, 2021 and June 8-9, 2021 (collectively, the “Meetings”) via videoconference, the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 9, 2021 meeting, approved the renewal of: (1) the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon Large Cap Value Fund (“Fund”); and (2) the Investment Advisory Agreements among the Manager, the Trust, on behalf of the Fund, and each of Barrow, Hanley, Mewhinney & Strauss, LLC (“Barrow”), Hotchkis and Wiley Capital Management, LLC (“Hotchkis”) and Massachusetts Financial Services Company (“MFS”) (each, a “subadvisor” and collectively, the “subadvisors”).

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

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Fund as well as information from the Manager and the subadvisors. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Trustees received and evaluated such information as they deemed necessary, including the impact of the COVID-19 pandemic on the operations of the Manager and the subadvisor. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to the Fund.

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

A firm may not have been able to, or opted not to, provide information in response to certain information requests, in which case the Board conducted its evaluation of the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations.

Provided below is an overview of certain factors the Board considered in connection with its decision to approve the renewal of the Agreements. The Board did not identify any particular information that was most relevant to its consideration of whether to approve the renewal of each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal of investment advisory contracts, such as the Agreements, and related regulatory guidelines. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the approval of the renewal of each Agreement was in the best interests of the Fund and its shareholders.

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

In determining whether to approve the renewal of the Agreements, the Board considered the Fund’s investment management and subadvisory relationships separately. In each instance, the Board considered, among

47

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

other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of the Fund and the subadvisors for the Fund; (3) the costs incurred by the Manager in rendering services to the Fund and its resulting profits or losses; (4) comparisons of services and fee rates with contracts entered into by the Manager or the subadvisors or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisors from their relationships with the Fund.

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

With respect to the renewal of each Investment Advisory Agreement, the Board considered, among other factors: the level of staffing and the size of each subadvisor; the adequacy of the resources committed to the Fund by each subadvisor; the financial stability of each subadvisor; and representations made by each subadvisor regarding its compliance program. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and each subadvisor were appropriate for the Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of the Fund, relative to its Broadridge Performance Universe, Morningstar Category, and benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding its independent methodology for selecting the Fund’s Broadridge Performance Universe. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by each subadvisor regarding the performance of its portion of the Fund relative to the performance of comparable investment accounts or a composite of comparable investment accounts managed by the subadvisor and the Fund’s benchmark index. In addition, the Board considered the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to the Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to the Fund.”

Costs of the Services Provided to the Fund and the Profits Realized by the Manager from its Relationship with the Fund. In analyzing the costs of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager earning a profit before and after the payment of distribution-related expenses by the Manager for the Fund. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Fund, the Manager represented that, among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility and regulatory requirements associated with managing the Fund. The Board also noted that, for the R6 Class shares of the Fund, the Manager is waiving fees and/or reimbursing expenses.

The Board further considered that, with respect to the Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager. In addition,

48

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

the Board considered that the Manager receives fees for administering and overseeing the securities lending program on behalf of the Fund. The Board also noted that certain share classes of the Fund maintain higher expense ratios in order to compensate third-party financial intermediaries.

In analyzing the fee rates charged by each subadvisor in connection with its investment advisory services to the Fund, the Board considered representations made by each subadvisor that the Fund’s subadvisory fee rate schedule generally was favorable compared to other comparable client accounts. The Board did not request profitability data from the subadvisors, because the Board did not view this data as imperative to its deliberations given the arm’s-length nature of the relationship between the Manager and the subadvisors with respect to the negotiation of subadvisory fee rates. In addition, the Board noted that subadvisors may not account for their profits on an account-by-account basis and that different firms likely employ different methodologies in connection with these calculations.

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

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as the Fund grows and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that, with respect to each subadvisor, the Manager has negotiated breakpoints for the subadvisory fee rate schedule.

In addition, the Board noted the Manager’s representation that the Management Agreement contains fee schedule breakpoints at higher asset levels with respect to the Fund. In this regard, the Board considered that the Fund’s current assets did not exceed the threshold necessary to reach the first management fee breakpoint. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for the Fund provide for a reasonable sharing of benefits from any economies of scale with the Fund.

Benefits Derived from the Relationship with the Fund. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisors as a result of the advisory relationships with the Fund, including greater exposure in the marketplace with respect to the Manager’s or the subadvisors’ investment process and expanding the level of assets under management by the Manager and the subadvisors. The Board also considered that the Manager may invest the Fund’s cash balances and cash collateral provided by the borrowers of the Fund’s securities in the American Beacon U.S. Government Money Market Select Fund, which the Manager manages directly, and for which the Manager receives a fee. In addition, the Board noted that each subadvisor benefits from soft dollar arrangements for proprietary and/or third-party research. Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisors by virtue of their relationships with the Fund appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to the Fund

The performance comparisons below were made for the Fund’s R5 Class shares relative to the Fund’s Broadridge Performance Universe and Morningstar Category. With respect to the Broadridge Performance Universe, the 1^st Quintile represents the top 20 percent of the universe based on performance and the 5^th Quintile represents the bottom 20 percent of the universe based on performance. References to the Fund’s Broadridge Performance Universe are to the respective universe of mutual funds with comparable investment classifications and objectives as determined by Broadridge. The performance of individual firms was calculated by the Manager based on information provided by the Funds’ custodian.

49

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

In reviewing the performance, the Board viewed longer-term performance over a full market cycle, typically five years or longer, as the most important consideration because relative performance over shorter periods may be significantly impacted by market or economic events and not necessarily reflective of subadvisor skill.

The expense comparisons below were made for the Fund’s R5 Class shares relative to the Fund’s Broadridge Expense Universe and Broadridge Expense Group, and Y Class shares relative to the Fund’s Morningstar Fee Level universe. The 1^st Quintile represents the lowest 20 percent of the universe or group based on lowest total expense, and the 5^th Quintile represents the highest 20 percent of the universe or group based on highest total expense. References to the Fund’s Expense Group and Expense Universe are to the respective group or universe of comparable mutual funds as determined by Broadridge. A Broadridge Expense Group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge Expense Universe includes all funds with comparable investment classifications/objectives and similar operating structures to that of the share class under review for the Fund, including funds in the Broadridge Expense Group. The Broadridge expense comparisons are based on the most recent audited financial information publicly available for a Fund as of December 31, 2020. References to the Fund’s Morningstar Fee Level ranking are to the institutional share class of comparable mutual funds as determined by Morningstar.

The Board considered the Fund’s Morningstar fee level category with the 1^st Quintile representing the lowest 20 percent of the category constituents and the 5^th Quintile representing the highest 20 percent of the category in terms of total expense.

In reviewing expenses, the Board considered the positive impact of the fee waiver and the Manager’s agreement to continue the fee waiver. The Board also considered that, in connection with the change in the name of the Fund’s Institutional Class shares, the share class used for the Fund’s Morningstar Fee Level comparisons had changed from the R5 Class shares to the Y Class shares, which may have resulted in a less favorable Morningstar Fee Level Ranking for the Fund than in prior years.

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

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

Compared to Broadridge Expense Group	2nd Quintile
Compared to Broadridge Expense Universe	2nd Quintile
Morningstar Fee Level Ranking	3rd Quintile

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2020)

Compared to Broadridge Performance Universe	3rd Quintile
Compared to Morningstar Category	2nd Quintile

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

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2020)

Barrow	5 Years	2	nd Quintile
Hotchkis	5 Years	2	nd Quintile
MFS	5 Years	1	st Quintile

50

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

The Board also considered: (1) information provided by each subadvisor regarding fee rates charged for managing assets in the same or a similar strategy as the subadvisor manages its allocation of the Fund; (2) the recent termination of a prior subadvisor, and the reallocation of assets among the Fund’s remaining subadvisors; and (3) the Manager’s recommendation to continue to retain each subadvisor.

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

51

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

The Trustees and officers of the American Beacon Funds (the “Trust”) are listed below, together with their principal occupations during the past five years. The address of each person listed below is 220 Las Colinas Boulevard East, Suite 1200, Irving, Texas 75039. Each Trustee oversees thirty funds in the fund complex that includes the Trust, the American Beacon Select Funds, and the American Beacon Institutional Funds Trust. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Eugene J. Duffy (67)**	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial Administrative Corporation (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-2016); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (51)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Joseph B. Armes (59)	Trustee since 2015	Director, Switchback Energy Acquisition (2019-2021); 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); 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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Gerard J. Arpey (63)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Director, The Home Depot, Inc. (2015-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

52

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (60)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Claudia A. Holz (64)	Trustee since 2018	Partner, KPMG LLP (1990–2017); Independent Director, Blue Owl Capital Inc. (2021-Present); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Douglas A. Lindgren (59)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Barbara J. McKenna, CFA (58)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

53

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (66)	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); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-2020); Director, ARK Investment Management LLC (2016-2020); 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); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, 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 (2015-2020); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-2021); President, American Beacon Apollo Total Return Fund (2018-2021).
Rosemary K. Behan (62)	VP, Secretary and Chief Legal Officer since 2006	Senior Vice President (2021-Present), Vice President(2006-2021), Secretary and General Counsel (2006-Present), American Beacon Advisors, Inc.; Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015–Present); Senior Vice President (2021-Present), Vice President(2015-2021), Secretary and General Counsel (2015-Present), Resolute Investment Managers, Inc.; Secretary, Resolute Investment Distributors, Inc. (2017-Present); Senior Vice President (2021-Present), Vice President(2017-2021), Secretary and General Counsel (2017-Present), Resolute Investment Services, Inc.; Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-2020); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, Green Harvest Asset Management (2019-2021); 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 (2018-2021); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-2021).

54

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Brian E. Brett (61)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), 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); 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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Paul B. Cavazos (52)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Erica Duncan (51)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Melinda G. Heika (60)	VP since 2021 Principal Accounting Officer and Treasurer (2010-2021)	Senior Vice President (2021-Present), 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); Senior Vice President (2021-Present), Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017); Senior Vice President (2021-Present); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-2020); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Vice President (2021-Present), Principal Accounting Officer (2017-2021) and Treasurer (2010-2021), American Beacon Select Funds; Vice President (2021–Present), Principal Accounting Officer and Treasurer (2017-2021), American Beacon Institutional Funds Trust; Vice President (2021), Principal Accounting Officer and Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Vice President (2021), Principal Accounting Officer and Treasurer, American Beacon Apollo Total Return Fund (2018-2021).

55

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Terri L. McKinney (57)	VP since 2010	Senior Vice President (2021-Present), Vice President (2009-2021), American Beacon Advisors, Inc.; Senior Vice President (2021–Present); Vice President (2017-2021), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2018-Present), Resolute Investment Services, Inc; Vice President, Alpha Quant Advisors, LLC (2016- 2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Jeffrey K. Ringdahl (46)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (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; Trustee, American Beacon NextShares Trust (2015-2020); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Samuel J. Silver (58)	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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).

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
Christina E. Sears (50)	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, Green Harvest Asset Management, LLC (2019-Present); Chief Compliance Officer, RSW Investments Holdings, LLC (2019-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Sonia L. Bates (64)	Principal Accounting Officer and Treasurer since 2021 Assistant Treasurer (2011-2021)	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); 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); Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2011-2021), American Beacon Select Funds; Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2017-2021), American Beacon Institutional Funds Trust; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Apollo Total Return Fund.
Shelley L. Dyson (51)	Assistant Treasurer since 2021	Assistant Treasurer, American Beacon Select Funds (2021-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2021-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Treasurer, American Beacon Apollo Total Return Fund (2021).
Shelley D. Abrahams (46)	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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Rebecca L. Harris (54)	Assistant Secretary since 2010	Senior Vice President (2021-Present), Vice President (2011-Present), American Beacon Advisors, Inc.; Senior Vice President (2021-Present), Vice President (2017-Present), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2015-Present), Resolute Investment Services; Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).

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
Teresa A. Oxford (63)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-2021); Assistant Secretary, Resolute Investment Managers, Inc. (2017-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-2020); Assistant Secretary, Continuous Capital, LLC (2020-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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Michael D. Jiang (36)	Assistant Secretary since 2021	Assistant Secretary (2021-Present), Resolute Investment Distributors, Inc.; Associate General Counsel (2021-Present), Resolute Investment Services, Inc.; Vice President (2018-2021), The Northern Trust Company; Second Vice President (2015-2018), The Northern Trust Company. Assistant
		Secretary, American Beacon Select Funds (2021-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2021-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2021).

* 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. Duffy is being deemed to be an “interested person” of the Trust, as defined by the Investment Company Act of 1940, as amended, by virtue of his position with Mesirow Financial, Inc., a broker-dealer.

58

American Beacon Funds^SM

Privacy Policy

October 31, 2021 (Unaudited)

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

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

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

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

• information we receive from third parties.

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

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

59

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60

Delivery of Documents

Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.

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 quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

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

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

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

AR 10/21

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.

SMALL CAP VALUE FUND RISKS

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

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

American Beacon Funds October 31, 2021

Contents

President’s Message	1
Market and Performance Overviews	3
Expense Examples	6
Report of Independent Registered Public Accounting Firm	8
Schedule of Investments:
American Beacon Small Cap Value Fund	9
Financial Statements	27
Notes to Financial Statements	30
Financial Highlights:
American Beacon Small Cap Value Fund	51
Federal Tax Information	58
Disclosure Regarding Approval of the Management and Investment Advisory Agreements	59
Trustees and Officers of the American Beacon Funds	64
Privacy Policy	71

Additional Fund Information Back Cover

President’s Message

Dear Shareholders,   As Warren E. Buffett, the “Oracle of Omaha” and billionaire chairman and CEO of Berkshire Hathaway, once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”   That is to say, before we can enjoy the fruits of our labor, we must first devote our attention to the careful planning and cultivation of our estates. To achieve a strong yield requires time, diligence and patience – and there are no guarantees the seeds we plant today will thrive or result in a plentiful harvest. This can be said not only about the actions we undertake in our gardening or landscaping, but also those we initiate in our investment portfolios – especially as we take into account the potential for harm caused by natural disasters and other catastrophes, such as the COVID-19 pandemic.

Because none of us – not even the Oracle of Omaha – has a crystal ball, to help give your investment portfolio the greatest chance for success over the long term, we encourage you to work with financial professionals to develop your personal savings plan, conduct annual plan reviews, and make thoughtful, purposeful plan adjustments to help manage your evolving financial needs and goals. By investing in different investment styles and asset classes, you may be able to help mitigate financial risks across your portfolio. By allocating your portfolio according to your risk-tolerance level, you may be better positioned to withstand short-term crises. With continuous nurturing, you will be better positioned to achieve enduring financial success.

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. 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 financial rewards.

Thank you for entrusting your financial success with American Beacon. For additional information about our investment products or to access your account information, please visit our website at www.americanbeaconfunds.com.

Best Regards,

Gene L. Needles, Jr.

President

American Beacon Funds

1

Domestic Equity Market Overview

October 31, 2021 (Unaudited)

U.S. equities posted strong returns for the 12-month period ended October 31, 2021. The broader market, as measured by the Russell 3000 Index, posted a 43.89% gain. Smaller companies led the way with the Russell 2000 Index rising 50.80%. Mid- and large-cap companies also participated in the rally, with 45.40% and 43.51% returns for the Russell Midcap and Russell 1000 Indexes, respectively. The rally was consistent for most of the period, reflecting an improving economy, accommodative monetary policy and fiscal stimulus.

The prospect of full-scale COVID-19 vaccinations prompted a major shift in investor preference to under-owned Value stocks in the fourth quarter of 2020. Value’s outperformance continued into 2021 as the vaccine rollout accelerated, while massive fiscal and monetary stimulus set the stage for a powerful rebound in consumer spending. In June 2021 investor preference moved in favor of Growth-style stocks as the Federal Reserve spoke about potential tapering, while the spread of the COVID-19 delta variant in both Asia and the U.S. raised concerns about the economic impact. Stocks then rebounded strongly in October 2021 as macro concerns abated; both the Value and Growth cohorts benefited, with Growth outpacing Value. For the full 12-month period, Value stocks outpaced Growth as measured by the Russell 3000 Value Index return of 44.97% and the Russell 3000 Growth Index return of 42.81%.

Inflation picked up steam during 2021, reflecting supply chain disruptions and pent-up demand due to the pandemic. In its latest comments, the Federal Reserve acknowledged higher-than-expected inflation but continued to point to overall deceleration in the rate with the expectation that core inflation (measured by the personal consumption expenditures deflator) could rise between 2% and 2.5% in 2022 and 2023 compared to a roughly 4% increase in 2021. Rising inflation has persisted longer than the Federal Reserve initially expected, but supply chain disruptions from the pandemic have contributed meaningfully to inflation in certain segments of the economy.

With regard to monetary policy, the Federal Reserve maintained the federal funds rate at 0% to 0.25% over the year and announced plans to begin tapering quantitative easing. The Federal Reserve will reduce asset purchases by $10 billion for U.S. Treasuries and $5 billion for agency mortgage-backed securities. The dot plots from Federal Open Market Committee members suggest rate increases could begin in late 2022.

2

American Beacon Small Cap Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

The Investor Class of the American Beacon Small Cap Value Fund (the “Fund”) returned 58.74% for the twelve months ended October 31, 2021, underperforming the Russell 2000^® Value Index (the “Index”) return of 64.30% for the same period.

Comparison of Changes in Value of a $10,000 Investment for the period 10/31/2011 through 10/31/2021

Total Returns for the Period ended October 31, 2021
	Ticker	1 Year			3 Years			5 Years			10 Years			Value of $10,000 10/31/2011- 10/31/2021
R5 Class (1,6)	AVFIX		59.26	%		12.22	%		11.36	%		11.86	%		$	30,683
Y Class (1,6)	ABSYX		59.15	%		12.14	%		11.26	%		11.77	%		$	30,421
Investor Class (1,6)	AVPAX		58.74	%		11.85	%		10.99	%		11.48	%		$	29,658
Advisor Class (1,6)	AASSX		58.56	%		11.69	%		10.83	%		11.32	%		$	29,223
A Class without sales charge (1,2,6)	ABSAX		58.57	%		11.74	%		10.89	%		11.37	%		$	29,355
A Class with sales Charge (1,2,6)	ABSAX		49.42	%		9.56	%		9.58	%		10.71	%		$	27,667
C Class without sales charge (1,3,6)	ASVCX		57.47	%		10.95	%		10.13	%		10.57	%		$	27,324
C Class with sales charge (1,3,6)	ASVCX		56.47	%		10.95	%		10.13	%		10.57	%		$	27,324
R6 Class (1,4,6)	AASRX		59.38	%		12.26	%		11.39	%		11.88	%		$	30,723
Russell 2000® Value Index (5)			64.30	%		13.44	%		12.61	%		12.12	%		$	31,401

1. Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end of day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please visit www.americanbeaconfunds.com or call 1-800-967-9009. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. Please note that the recent performance of the securities market has helped produce short-term returns that are not typical and may not continue in the future.

2. A portion of the fees charged to the A Class of the Fund was waived in, 2012, 2013 and 2014 and fully recovered in 2015. Performance prior to waiving fees was lower than the actual returns shown for 2012, 2013 and 2014. The maximum sales charge for A Class is 5.75%.

3

American Beacon Small Cap Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

3. A portion of the fees charged to the C Class of the Fund was waived in 2012 and 2013, fully recovered in 2015, and waived in 2018. Performance prior to waiving fees was lower than the actual returns shown in 2012, 2013 and 2018. The maximum contingent deferred sales charge for C Class is 1.00% for shares redeemed within one year of the date of purchase.

4. Fund performance for the five-year and ten-year periods represents the returns achieved by the R5 Class from 10/31/11 through 2/28/17, the inception date of the R6 Class, and the returns of the R6 Class since its inception. Expenses of the R6 Class are lower than those of the R5 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 10/31/11.

5. The Russell 2000^® Value Index is an unmanaged index of those stocks in the Russell 2000 Index with lower price-to-book ratios and lower forecasted growth values. The Russell 2000^® Index is an unmanaged index comprised of approximately 2,000 smaller-capitalization stocks. Russell 2000 Value Index and Russell 2000 Index are registered trademarks of Frank Russell Company. American Beacon Funds is not promoted, sponsored or endorsed by, nor in any way affiliated with the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. LSE Group is not responsible for and has not reviewed the American Beacon Small Cap Value Fund nor any associated literature or publications and LSE Group makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. All rights in the Russell 2000 Index and the Russell 2000 Value Index (the “Indexes”) vest in the relevant LSE Group company which owns the Indexes. Russell 2000^® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Indexes are calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Indexes or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Indexes for the purpose to which it is being put by the Manager. One cannot directly invest in an index.

6. The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, Advisor, A, C and R6 Class shares were 0.83%, 0.90%, 1.16%, 1.26%, 1.27%, 1.97%, and 0.80%, 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.

The Fund underperformed the Index during the period due mainly to security selection, while sector allocation contributed positively to relative performance.

Most of the Fund’s underperformance was attributable to security selection in the Consumer Discretionary, Energy and Industrials sectors. In the Consumer Discretionary sector, an absence from index-position GameStop Corp. (up 1,848.9%), which was removed from the Index in the June reconstitution, and not holding Macy’s, Inc. for the whole period (up 329.3%) detracted from returns relative to the Index. Detractors in the Energy sector included an absence from index-position SM Energy Co. (up 2,033.7%). Within the Industrials sector, Allison Transmission Holdings, Inc. (down 7.8%) and an absence from index-position Avis Budget Group, Inc. (up 121.6%), added to the Index in the June reconstitution, detracted from relative returns during the period. Conversely, security selection in the Financials sector contributed positively to relative returns; contributors included Evercore Inc., Class A (up 101.2%) and Popular, Inc. (up 98.8%).

From a sector allocation selection perspective, underweight allocations to the Health Care sector and Utilities sector and an overweight allocation to the Energy sector contributed positively to relative performance. This performance was marginally offset by an overweight allocation to the Consumer Discretionary sector.

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

Top Ten Holdings (% Net Assets)
Diodes, Inc.		1.4
KBR, Inc.		1.2
Range Resources Corp.		1.2
MGIC Investment Corp.		1.1
Fluor Corp.		0.9
Adient PLC		0.8
Darling Ingredients, Inc.		0.8
Evercore, Inc., Class A		0.8
Greenbrier Cos., Inc.		0.8
Popular, Inc.		0.8
Total Fund Holdings	719

4

American Beacon Small Cap Value Fund^SM

Performance Overview

October 31, 2021 (Unaudited)

Sector Allocation (% Equities)
Financials	25.3
Industrials	22.9
Consumer Discretionary	11.8
Information Technology	11.6
Energy	8.0
Real Estate	4.8
Materials	4.2
Health Care	4.1
Consumer Staples	2.7
Utilities	2.4
Communication Services	2.2

5

American Beacon Small Cap Value Fund^SM

Expense Examples

October 31, 2021 (Unaudited)

Fund Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees, if applicable, and (2) ongoing costs, including management fees, distribution (12b-1) fees, sub-transfer agent fees, and other Fund expenses. The Examples are intended to help you understand the ongoing cost (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Examples are based on an investment of $1,000 invested at the beginning of the period in each Class and held for the entire period from May 1, 2021 through October 31, 2021.

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 R5 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 R5 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 Small Cap Value Fund^SM

Expense Examples

October 31, 2021 (Unaudited)

American Beacon Small Cap Value Fund
	Beginning Account Value 5/1/2021		Ending Account Value 10/31/2021		Expenses Paid During Period 5/1/2021-10/31/2021*
R5 Class
Actual		$1,000.00		$1,015.30		$4.17
Hypothetical**		$1,000.00		$1,021.07		$4.18
Y Class
Actual		$1,000.00		$1,014.90		$4.52
Hypothetical**		$1,000.00		$1,020.72		$4.53
Investor Class
Actual		$1,000.00		$1,013.30		$5.84
Hypothetical**		$1,000.00		$1,019.41		$5.85
Advisor Class
Actual		$1,000.00		$1,012.80		$6.60
Hypothetical**		$1,000.00		$1,018.65		$6.61
A Class
Actual		$1,000.00		$1,012.90		$6.29
Hypothetical**		$1,000.00		$1,018.96		$6.31
C Class
Actual		$1,000.00		$1,009.20		$9.88
Hypothetical**		$1,000.00		$1,015.38		$9.91
R6 Class
Actual		$1,000.00		$1,015.60		$4.01
Hypothetical**		$1,000.00		$1,021.22		$4.02

* Expenses are equal to the Fund’s annualized expense ratios for the six-month period of 0.82%, 0.89%, 1.15%, 1.30%, 1.24%, 1.95%, and 0.79% for the R5, Y, Investor, Advisor, A, C, and R6 Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (184) by days in the year (365) to reflect the half-year period.

** 5% return before expenses.

7

American Beacon Small Cap Value Fund^SM

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of American Beacon Small Cap Value Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of American Beacon Small Cap Value Fund (the “Fund”) (one of the funds constituting American Beacon Funds (the “Trust”)), including the schedule of investments, as of October 31, 2021, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting American Beacon Funds) at October 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

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

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

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

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

Dallas, Texas

December 30, 2021

8

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34%
Communication Services - 2.13%
Diversified Consumer Services - 0.02%
EchoStar Corp., Class AA		46,100		$	1,081,506
Diversified Telecommunication Services - 0.00%
Liberty Latin America Ltd., Class AA		1,865			22,417
Liberty Latin America Ltd., Class CA		1,448			17,420
					39,837
Entertainment - 0.33%
IMAX Corp.A		533,314			10,052,969
Lions Gate Entertainment Corp., Class AA		415,628			5,382,383
Lions Gate Entertainment Corp., Class BA		371,364			4,203,840
					19,639,192
Interactive Media & Services - 0.09%
Cars.com, Inc.A		9,254			120,487
Genius Sports Ltd.A B		282,549			5,238,459
					5,358,946
Media - 1.63%
AMC Networks, Inc., Class AA		92,768			3,691,239
Emerald Holding, Inc.A		36,516			147,890
Entravision Communications Corp., Class A		8,348			66,533
Gray Television, Inc.		996,213			23,351,233
John Wiley & Sons, Inc., Class A		84,977			4,603,204
Scholastic Corp.		155,882			5,641,369
Stagwell, Inc.A B		4,308,420			37,397,086
TEGNA, Inc.		1,096,379			21,554,811
					96,453,365
Wireless Telecommunication Services - 0.06%
Telephone & Data Systems, Inc.		192,592			3,609,174
Total Communication Services					126,182,020
Consumer Discretionary - 11.50%
Auto Components - 2.59%
Adient PLCA		1,119,943			46,612,028
American Axle & Manufacturing Holdings, Inc.A		2,834,450			25,736,806
Dana, Inc.		851,307			18,890,502
Gentherm, Inc.A		465,228			34,254,738
Goodyear Tire & Rubber Co.A		720,525			13,776,438
LCI Industries		911			127,212
Motorcar Parts of America, Inc.A		10,655			201,593
Patrick Industries, Inc.		26,400			2,056,824
Standard Motor Products, Inc.		143,495			6,873,410
Visteon Corp.A		45,340			5,131,581
					153,661,132
Automobiles - 0.38%
Harley-Davidson, Inc.		90,974			3,319,641
Winnebago Industries, Inc.		285,313			19,312,837
					22,632,478
Distributors - 0.08%
Funko, Inc., Class AA		288,551			4,729,351

See accompanying notes

9

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Consumer Discretionary - 11.50% (continued)
Diversified Consumer Services - 0.74%
Adtalem Global Education, Inc.A		3,230		$	119,284
Graham Holdings Co., Class B		12,113			7,096,401
H&R Block, Inc.		1,147,154			26,464,843
Houghton Mifflin Harcourt Co.A		708,929			10,059,702
Perdoceo Education Corp.A		7,587			80,574
					43,820,804
Hotels, Restaurants & Leisure - 0.67%
Bally’s Corp.A		131,417			6,020,213
Boyd Gaming Corp.A		87,836			5,602,180
Brinker International, Inc.A		3,105			130,286
Cheesecake Factory, Inc.A		486			19,751
Del Taco Restaurants, Inc.		6,803			56,737
Hilton Grand Vacations, Inc.A		3,111			156,421
International Game Technology PLCA B		546,889			16,127,757
Jack in the Box, Inc.		117,781			11,654,430
Potbelly Corp.A		6,900			41,538
Travel & Leisure Co.		2,828			153,673
					39,962,986
Household Durables - 2.78%
Beazer Homes USA, Inc.A		1,177			21,315
Cavco Industries, Inc.A		34,558			8,307,052
Century Communities, Inc.		100,111			6,713,444
Ethan Allen Interiors, Inc.		9,507			220,657
GoPro, Inc., Class AA		509,521			4,386,976
Green Brick Partners, Inc.A		567,772			14,790,461
Hamilton Beach Brands Holding Co., Class A		750			11,250
Helen of Troy Ltd.A		24,029			5,405,323
Hooker Furniture Corp.		5,852			147,529
KB Home		451,838			18,141,296
La-Z-Boy, Inc.		223,339			7,423,788
LGI Homes, Inc.A		76,506			11,422,346
M/I Homes, Inc.A		245,728			14,070,385
MDC Holdings, Inc.		212,223			10,394,682
Meritage Homes Corp.A		127,415			13,851,285
Taylor Morrison Home Corp.A		81,439			2,486,333
Tempur Sealy International, Inc.		277,856			12,356,256
TRI Pointe Homes, Inc.A		454,636			10,997,645
Tupperware Brands Corp.A		4,100			91,184
Whirlpool Corp.		113,772			23,986,551
					165,225,758
Internet & Direct Marketing Retail - 0.08%
PetMed Express, Inc.B		3,578			101,723
Points International Ltd.A		264,135			4,566,894
					4,668,617
Leisure Products - 0.47%
Johnson Outdoors, Inc., Class A		1,368			145,254
Malibu Boats, Inc., Class AA		188,138			13,284,424
Sturm Ruger & Co., Inc.B		12,246			965,965
Vista Outdoor, Inc.A		319,484			13,367,211
					27,762,854

See accompanying notes

10

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Consumer Discretionary - 11.50% (continued)
Multiline Retail - 0.20%
Big Lots, Inc.		134,884		$	5,968,617
Franchise Group, Inc.		3,735			137,448
Nordstrom, Inc.A B		195,695			5,622,317
					11,728,382
Specialty Retail - 2.63%
Aaron’s Co., Inc.		7,200			168,408
Abercrombie & Fitch Co., Class AA		66,000			2,609,640
Academy Sports & Outdoors, Inc.A		1,762			75,378
American Eagle Outfitters, Inc.B		5,796			137,597
Asbury Automotive Group, Inc.A		59,262			11,598,166
Bed Bath & Beyond, Inc.A B		217,929			3,059,723
Big 5 Sporting Goods Corp.		6,100			147,498
Buckle, Inc.		86,498			3,600,047
Caleres, Inc.		309,991			7,148,392
Camping World Holdings, Inc., Class A		389,155			14,496,024
Cato Corp., Class A		10,557			186,120
Foot Locker, Inc.		118,150			5,632,211
Genesco, Inc.A		3,431			207,884
Group 1 Automotive, Inc.		140,064			25,183,507
Guess?, Inc.		258,813			5,360,017
Hibbett, Inc.		29,697			2,299,736
MarineMax, Inc.A		28,449			1,473,374
ODP Corp.A		776,590			33,626,347
OneWater Marine, Inc., Class A		4,197			186,095
Penske Automotive Group, Inc.		961			101,914
Rent-A-Center, Inc.		134,718			7,175,081
Sally Beauty Holdings, Inc.A		594,476			9,071,704
Signet Jewelers Ltd.		29,781			2,655,870
Sonic Automotive, Inc., Class A		247,366			12,227,301
Tilly’s, Inc., Class A		5,555			77,103
Urban Outfitters, Inc.A		246,923			7,884,251
Zumiez, Inc.A		2,361			96,093
					156,485,481
Textiles, Apparel & Luxury Goods - 0.88%
Capri Holdings Ltd.A		216,622			11,532,955
G-III Apparel Group Ltd.A		379,096			10,864,891
Kontoor Brands, Inc.		258,537			13,702,461
Oxford Industries, Inc.		54,635			5,065,757
Rocky Brands, Inc.		1,278			69,715
Skechers USA, Inc., Class AA		239,542			11,069,236
Vera Bradley, Inc.A		15,042			147,562
Wolverine World Wide, Inc.		661			21,926
					52,474,503
Total Consumer Discretionary					683,152,346
Consumer Staples - 2.58%
Food & Staples Retailing - 0.55%
Andersons, Inc.		112,902			3,845,442
Chefs’ Warehouse, Inc.A		248,048			8,649,434
Ingles Markets, Inc., Class A		48,614			3,363,603
Natural Grocers by Vitamin Cottage, Inc.		12,404			151,081
PriceSmart, Inc.		232			16,692
SpartanNash Co.		193,344			4,473,980

See accompanying notes

11

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Consumer Staples - 2.58% (continued)
Food & Staples Retailing - 0.55% (continued)
Sprouts Farmers Market, Inc.A		127,634		$	2,825,817
United Natural Foods, Inc.A		187,770			8,147,340
Village Super Market, Inc., Class A		5,672			126,315
Weis Markets, Inc.		16,593			934,352
					32,534,056
Food Products - 1.46%
B&G Foods, Inc.		5,191			152,823
Darling Ingredients, Inc.A		585,359			49,474,543
Fresh Del Monte Produce, Inc.		251,754			8,431,241
Hain Celestial Group, Inc.A B		180,056			8,079,113
J&J Snack Foods Corp.		37,625			5,551,569
Seneca Foods Corp., Class AA		509			26,279
SunOpta, Inc.A		1,969,754			15,285,291
					87,000,859
Household Products - 0.35%
Central Garden & Pet Co.A		4,248			219,112
Energizer Holdings, Inc.		5,454			198,908
Spectrum Brands Holdings, Inc.		216,003			20,250,281
					20,668,301
Personal Products - 0.14%
Edgewell Personal Care Co.		189,566			6,632,914
Inter Parfums, Inc.		13,609			1,257,199
Nu Skin Enterprises, Inc., Class A		3,812			153,052
USANA Health Sciences, Inc.A		1,561			151,511
					8,194,676
Tobacco - 0.08%
Universal Corp.		76,321			3,587,087
Vector Group Ltd.		94,784			1,256,836
					4,843,923
Total Consumer Staples					153,241,815
Energy - 7.80%
Energy Equipment & Services - 1.49%
Cactus, Inc., Class A		277,766			12,082,821
ChampionX Corp.A		6,814			178,731
Core Laboratories NV		2,626			68,302
Dril-Quip, Inc.A		5,987			141,054
Expro Group Holdings NVA		1,267,613			21,739,563
Helix Energy Solutions Group, Inc.A		2,087,969			7,892,523
Helmerich & Payne, Inc.		325,717			10,110,256
Liberty Oilfield Services, Inc., Class AA		8,063			104,174
National Energy Services Reunited Corp.A B		11,800			138,060
Newpark Resources, Inc.A		40,500			137,700
NexTier Oilfield Solutions, Inc.A		599,258			2,672,691
NOV, Inc.A		1,049,748			14,717,467
Oceaneering International, Inc.A		1,541			20,958
Oil States International, Inc.A		1,162,639			7,045,592
Patterson-UTI Energy, Inc.		569,258			4,872,848
ProPetro Holding Corp.A		14,548			139,515
RPC, Inc.A		5,343			28,799
Select Energy Services, Inc., Class AA		22,406			134,660

See accompanying notes

12

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Energy - 7.80% (continued)
Energy Equipment & Services - 1.49% (continued)
Solaris Oilfield Infrastructure, Inc., Class A		19,196		$	145,698
TechnipFMC PLCA		8,036			59,225
Transocean Ltd.A		1,687,216			5,955,872
					88,386,509
Oil, Gas & Consumable Fuels - 6.31%
Altus Midstream Co., Class AB		31,674			1,958,087
Amplify Energy Corp.A B		10,800			36,828
Antero Midstream Corp.		1,620,554			17,242,695
Antero Resources Corp.A		2,223			44,171
APA Corp.		285,904			7,493,544
Berry Corp.		1,002,955			9,638,398
California Resources Corp.A		4,800			221,424
Chesapeake Energy Corp.		123,054			7,843,462
Civitas Resources, Inc.		203,079			11,400,855
CNX Resources Corp.A		2,597,615			37,951,155
Comstock Resources, Inc.A		812,642			8,020,776
CVR Energy, Inc.		3,594			68,897
DHT Holdings, Inc.		894,284			5,821,789
Earthstone Energy, Inc., Class AA		5,697			57,825
Enerplus Corp.		1,212,507			11,482,441
EQT Corp.A		468,293			9,323,714
Equitrans Midstream Corp.		2,620,291			27,015,200
Green Plains, Inc.A B		2,291			86,943
HollyFrontier Corp.		284,224			9,606,771
Kosmos Energy Ltd.A		4,836,347			17,410,849
Magnolia Oil & Gas Corp., Class A		2,355			49,172
Murphy Oil Corp.		1,101,529			30,655,552
Northern Oil & Gas, Inc.		8,262			191,348
Oasis Petroleum, Inc.		93,026			11,218,936
Par Pacific Holdings, Inc.A		9,200			142,232
PBF Energy, Inc., Class AA		363,059			5,304,292
PDC Energy, Inc.		498,997			26,102,533
Penn Virginia Corp.A		141,527			4,676,052
Range Resources Corp.A		2,984,085			69,588,862
REX American Resources Corp.A		1,437			126,384
SFL Corp. Ltd.		7,301			57,751
Southwestern Energy Co.A		2,047,663			9,992,595
Viper Energy Partners LP		397,912			8,773,960
Whiting Petroleum Corp.A		180,112			11,730,695
World Fuel Services Corp.		454,984			13,890,661
					375,226,849
Total Energy					463,613,358
Financials - 24.66%
Banks - 13.56%
1st Source Corp.		3,176			153,337
Amalgamated Financial Corp.		8,638			158,594
Ameris Bancorp		304,235			15,938,872
Associated Banc-Corp.		1,282,706			28,578,690
Atlantic Union Bankshares Corp.		87,157			3,126,322
Bank of Marin Bancorp		3,600			137,196
Bank of NT Butterfield & Son Ltd.		971,689			34,883,635
Bank OZK		218,581			9,764,013
BankUnited, Inc.		108,548			4,402,707

See accompanying notes

13

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Financials - 24.66% (continued)
Banks - 13.56% (continued)
Bankwell Financial Group, Inc.		2,100		$	62,370
Banner Corp.		170,222			9,832,023
Bar Harbor Bankshares		2,198			65,281
BCB Bancorp, Inc.		4,900			74,088
Berkshire Hills Bancorp, Inc.		54,111			1,469,114
BOK Financial Corp.		1,318			133,342
Brookline Bancorp, Inc.		86,738			1,392,145
Bryn Mawr Bank Corp.		847			39,250
Cadence Bank		202,353			5,872,290
Camden National Corp.		901			42,888
Capital Bancorp, Inc.		3,300			83,985
Carter Bankshares, Inc.A		4,200			62,916
Cathay General Bancorp		394,440			16,641,424
Central Pacific Financial Corp.		329,467			9,057,048
Central Valley Community Bancorp		4,600			98,118
CIT Group, Inc.		3,851			190,740
Civista Bancshares, Inc.		2,441			58,730
CNB Financial Corp.		3,004			77,113
Columbia Banking System, Inc.		316,624			10,806,377
Community Financial Corp.		1,600			60,992
Community Trust Bancorp, Inc.		2,906			126,934
ConnectOne Bancorp, Inc.		4,610			155,495
CrossFirst Bankshares, Inc.A		4,580			65,173
Customers Bancorp, Inc.A		2,035			108,445
CVB Financial Corp.		222,975			4,463,960
Dime Community Bancshares, Inc.		4,405			157,170
Eagle Bancorp, Inc.		3,543			200,498
Enterprise Financial Services Corp.		44,755			2,104,380
Equity Bancshares, Inc., Class A		2,321			77,661
FB Financial Corp.		57,408			2,602,305
Financial Institutions, Inc.		3,088			98,569
First BanCorp		1,464,967			26,506,961
First Busey Corp.		59,819			1,524,786
First Business Financial Services, Inc.		1,525			44,530
First Commonwealth Financial Corp.		95,862			1,466,689
First Financial Bancorp		114,419			2,720,884
First Financial Corp.		3,619			155,074
First Hawaiian, Inc.		1,400,024			38,626,662
First Internet Bancorp		3,047			103,720
First Interstate BancSystem, Inc., Class A		304,194			12,645,345
First Merchants Corp.		60,536			2,517,087
First Mid Bancshares, Inc.		3,300			142,164
First Midwest Bancorp, Inc.		117,777			2,267,207
First of Long Island Corp.		4,693			94,470
Flushing Financial Corp.		8,881			213,322
FNB Corp.		1,290,154			15,030,294
Fulton Financial Corp.		879,332			14,157,245
Great Southern Bancorp, Inc.		2,637			148,806
Great Western Bancorp, Inc.		38,562			1,313,036
Hancock Whitney Corp.		434,360			21,492,133
Hanmi Financial Corp.		9,838			218,305
Harborone Bancorp, Inc.		400,220			5,751,161
Heartland Financial USA, Inc.		48,808			2,446,257
Heritage Commerce Corp.		566,353			6,790,572
Heritage Financial Corp.		155,953			3,873,873
Hilltop Holdings, Inc.		620,383			21,986,374
Home BancShares, Inc.		342,873			8,146,662

See accompanying notes

14

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Financials - 24.66% (continued)
Banks - 13.56% (continued)
HomeStreet, Inc.		3,545		$	167,182
HomeTrust Bancshares, Inc.		3,091			93,966
Hope Bancorp, Inc.		154,558			2,255,001
Horizon Bancorp, Inc.		7,520			143,406
Independent Bank Corp.		6,400			144,192
Independent Bank Group, Inc.		89,401			6,462,798
International Bancshares Corp.		111,186			4,714,286
Investar Holding Corp.		3,300			61,710
Investors Bancorp, Inc.		1,236,861			18,923,973
Lakeland Bancorp, Inc.		8,507			152,956
Mercantile Bank Corp.		4,182			143,735
Meta Financial Group, Inc.		53,114			2,944,640
Metropolitan Bank Holding Corp.A		1,754			159,368
Midland States Bancorp, Inc.		6,774			173,821
MidWestOne Financial Group, Inc.		3,226			101,135
National Bank Holdings Corp., Class A		328,404			14,242,882
National Bankshares, Inc.		1,200			44,700
NBT Bancorp, Inc.		48,477			1,778,621
Northeast Bank		1,200			39,720
Northrim BanCorp, Inc.		1,392			61,833
OceanFirst Financial Corp.		65,678			1,456,081
OFG Bancorp		1,434,423			37,151,556
Old National Bancorp		1,321,374			22,569,068
Orrstown Financial Services, Inc.		1,869			44,314
Pacific Premier Bancorp, Inc.		105,816			4,443,214
PacWest Bancorp		134,237			6,372,230
PCB Bancorp		7,000			149,100
Peapack-Gladstone Financial Corp.		4,476			150,170
Peoples Bancorp, Inc.		4,264			136,277
Popular, Inc.		607,148			49,446,133
Preferred Bank		1,828			125,346
Primis Financial Corp.		6,503			98,520
Prosperity Bancshares, Inc.		376,775			28,374,925
RBB Bancorp		5,351			137,360
Renasant Corp.		79,819			2,986,029
Republic Bancorp, Inc., Class A		2,709			146,340
S&T Bancorp, Inc.		46,051			1,407,319
Sandy Spring Bancorp, Inc.		53,656			2,546,514
Seacoast Banking Corp. of Florida		574,232			20,919,272
Sierra Bancorp		3,935			98,218
Silvergate Capital Corp., Class AA		40,295			6,311,003
Simmons First National Corp., Class A		135,876			4,061,334
Southside Bancshares, Inc.		32,444			1,340,586
SouthState Corp.		114,426			8,935,526
Synovus Financial Corp.		3,282			152,908
Texas Capital Bancshares, Inc.A		690,165			41,823,999
Towne Bank		5,553			175,031
TriCo Bancshares		30,615			1,341,855
TriState Capital Holdings, Inc.A		4,382			131,679
Trustmark Corp.		113,707			3,617,020
UMB Financial Corp.		374,052			36,963,819
Umpqua Holdings Corp.		2,187,701			44,738,485
United Bankshares, Inc.		147,086			5,440,711
United Community Banks, Inc.		377,294			13,144,923
Univest Financial Corp.		5,032			144,418
Valley National Bancorp		541,635			7,182,080
Veritex Holdings, Inc.		242,128			9,915,142

See accompanying notes

15

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Financials - 24.66% (continued)
Banks - 13.56% (continued)
Washington Trust Bancorp, Inc.		1,581		$	86,417
Webster Financial Corp.		214,033			11,977,287
WesBanco, Inc.		274,820			9,555,491
Wintrust Financial Corp.		146,583			12,972,596
					805,388,030
Capital Markets - 3.66%
Affiliated Managers Group, Inc.		76,238			12,798,836
AllianceBernstein Holding LP, MLP		174,551			9,842,931
Artisan Partners Asset Management, Inc., Class A		396			19,618
B Riley Financial, Inc.		47,276			3,387,798
BGC Partners, Inc., Class A		3,346			17,968
BrightSphere Investment Group, Inc.		5,729			171,755
Cohen & Steers, Inc.		88,527			8,400,327
Cowen, Inc., Class A		5,612			211,741
Diamond Hill Investment Group, Inc.		537			116,454
Evercore, Inc., Class A		322,804			49,014,559
Federated Hermes, Inc.		616,045			20,520,459
Greenhill & Co., Inc.		9,292			146,070
Lazard Ltd., Class A		539,716			26,440,687
LPL Financial Holdings, Inc.		76,799			12,596,572
Piper Sandler Cos.		30,281			4,986,978
Stifel Financial Corp.		540,519			39,387,620
StoneX Group, Inc.A		40,209			2,778,844
Victory Capital Holdings, Inc., Class A		38,316			1,452,176
Virtu Financial, Inc., Class A		64,700			1,609,736
Virtus Investment Partners, Inc.		54,446			17,422,720
WisdomTree Investments, Inc.		943,942			6,031,789
					217,355,638
Consumer Finance - 0.92%
Encore Capital Group, Inc.A		33,860			1,829,117
Enova International, Inc.A		60,958			1,977,477
EZCORP, Inc., Class AA		12,933			96,480
Navient Corp.		380,183			7,489,605
Nelnet, Inc., Class A		47,606			3,933,684
PRA Group, Inc.A		51,200			2,195,456
PROG Holdings, Inc.		186,282			7,535,107
SLM Corp.		1,611,473			29,570,530
					54,627,456
Insurance - 3.70%
Ambac Financial Group, Inc.A		9,828			166,191
American Equity Investment Life Holding Co.		167,565			5,340,296
American National Group, Inc.		800			151,768
Argo Group International Holdings Ltd.		263,558			14,522,046
Assured Guaranty Ltd.		160,414			8,915,810
Axis Capital Holdings Ltd.		181,051			9,427,325
Brighthouse Financial, Inc.A		181,909			9,137,289
CNO Financial Group, Inc.		1,396,286			33,706,344
Employers Holdings, Inc.		5,167			199,446
Enstar Group Ltd.A		192,277			44,373,686
Genworth Financial, Inc., Class AA		284,742			1,170,290
Global Indemnity Group LLC, Class A		358,208			8,808,335
Hanover Insurance Group, Inc.		1,557			196,182
Horace Mann Educators Corp.		508,488			19,922,560

See accompanying notes

16

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Financials - 24.66% (continued)
Insurance - 3.70% (continued)
Mercury General Corp.		314,660		$	17,145,823
National Western Life Group, Inc., Class A		6,788			1,459,488
ProAssurance Corp.		112,344			2,573,801
Safety Insurance Group, Inc.		2,600			203,866
Selective Insurance Group, Inc.		119,032			9,328,538
Selectquote, Inc.A		420,056			5,582,544
SiriusPoint Ltd.A		21,994			206,744
Stewart Information Services Corp.		54,739			3,895,775
United Fire Group, Inc.		548			11,196
Universal Insurance Holdings, Inc.		9,796			144,687
Unum Group		688,093			17,525,729
White Mountains Insurance Group Ltd.		5,241			5,529,203
					219,644,962
Mortgage Real Estate Investment Trusts (REITs) - 0.13%
Arlington Asset Investment Corp., Class AA B		18,991			72,925
BrightSpire Capital, Inc.		15,280			149,897
Chimera Investment Corp.		8,433			131,639
Granite Point Mortgage Trust, Inc.		3,208			42,987
Great Ajax Corp.		6,901			97,718
MFA Financial, Inc.		15,313			69,062
New Residential Investment Corp.		646,658			7,346,035
TPG RE Finance Trust, Inc.		5,664			74,029
					7,984,292
Thrifts & Mortgage Finance - 2.69%
Axos Financial, Inc.A		180,990			9,592,470
Bridgewater Bancshares, Inc.A		4,487			81,170
Essent Group Ltd.		394,195			18,921,360
Federal Agricultural Mortgage Corp., Class C		1,309			165,052
FS Bancorp, Inc.		1,240			42,730
Luther Burbank Corp.		254,670			3,695,262
Meridian Bancorp, Inc.		1,977			45,866
MGIC Investment Corp.		4,158,767			67,205,675
Mr Cooper Group, Inc.A		183,258			8,034,031
NMI Holdings, Inc., Class AA		395,659			9,606,601
Northfield Bancorp, Inc.		7,982			140,084
Northwest Bancshares, Inc.		260,323			3,592,457
PennyMac Financial Services, Inc.		34,200			2,122,452
Premier Financial Corp.		4,759			151,717
Provident Financial Services, Inc.		164,563			4,074,580
Radian Group, Inc.		668,274			15,951,700
Southern Missouri Bancorp, Inc.		892			48,525
Territorial Bancorp, Inc.		3,664			91,930
TrustCo Bank Corp.		4,683			157,161
Washington Federal, Inc.		347,379			12,283,321
Waterstone Financial, Inc.		6,700			138,489
William Penn Bancorp, Inc.		5,800			70,818
WSFS Financial Corp.		69,531			3,602,401
					159,815,852
Total Financials					1,464,816,230
Health Care - 4.00%
Biotechnology - 0.60%
Alkermes PLCA		348,785			10,564,698
Emergent BioSolutions, Inc.A		199,929			9,530,615

See accompanying notes

17

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Health Care - 4.00% (continued)
Biotechnology - 0.60% (continued)
Ironwood Pharmaceuticals, Inc.A		785,777		$	10,034,372
Vanda Pharmaceuticals, Inc.A		312,939			5,357,516
					35,487,201
Health Care Equipment & Supplies - 0.44%
Integer Holdings Corp.A		119,854			10,789,257
Invacare Corp.A B		584,613			2,887,988
NuVasive, Inc.A		148,812			7,940,608
Varex Imaging Corp.A		169,671			4,555,667
					26,173,520
Health Care Providers & Services - 2.35%
Acadia Healthcare Co., Inc.A		163,551			10,140,162
AMN Healthcare Services, Inc.A		276,764			27,316,607
Apria, Inc.A		315,109			11,794,530
Community Health Systems, Inc.A		147,700			1,934,870
Encompass Health Corp.		267,845			17,024,228
Hanger, Inc.A		780,123			14,572,698
MEDNAX, Inc.A		350,957			9,556,559
ModivCare, Inc.A		38,418			6,253,298
Patterson Cos., Inc.		3,874			121,101
R1 RCM, Inc.A		604,198			13,111,097
Select Medical Holdings Corp.		763,882			25,376,160
Triple-S Management Corp., Class BA		74,026			2,612,377
					139,813,687
Health Care Technology - 0.38%
Evolent Health, Inc., Class AA		548,695			16,060,303
Omnicell, Inc.A		36,849			6,564,649
					22,624,952
Pharmaceuticals - 0.23%
Amneal Pharmaceuticals, Inc.A		179,933			987,832
Prestige Consumer Healthcare, Inc.A		114,928			6,894,531
Supernus Pharmaceuticals, Inc.A		180,279			5,381,328
Taro Pharmaceutical Industries Ltd.A		3,292			182,936
					13,446,627
Total Health Care					237,545,987
Industrials - 22.33%
Aerospace & Defense - 0.58%
AAR Corp.A		112,872			3,992,283
Aerojet Rocketdyne Holdings, Inc.		69,618			3,063,888
AeroVironment, Inc.A		91,948			8,193,486
Curtiss-Wright Corp.		67,241			8,585,331
Mercury Systems, Inc.A		63,815			3,289,025
Moog, Inc., Class A		1,929			145,697
National Presto Industries, Inc.		1,828			151,998
Spirit AeroSystems Holdings, Inc., Class A		171,912			7,098,247
Vectrus, Inc.A		3,680			178,222
					34,698,177
Air Freight & Logistics - 0.68%
Air Transport Services Group, Inc.A		1,330,912			33,126,400
Atlas Air Worldwide Holdings, Inc.A		87,539			7,101,164

See accompanying notes

18

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Industrials - 22.33% (continued)
Air Freight & Logistics - 0.68% (continued)
Echo Global Logistics, Inc.A		3,100		$	149,513
Forward Air Corp.		1,154			116,046
					40,493,123
Airlines - 0.51%
JetBlue Airways Corp.A		550,364			7,721,607
SkyWest, Inc.A		424,973			18,286,588
Spirit Airlines, Inc.A		192,537			4,206,934
					30,215,129
Building Products - 2.71%
Apogee Enterprises, Inc.		759,046			31,826,799
Armstrong Flooring, Inc.A		439,748			1,248,884
Armstrong World Industries, Inc.		79,297			8,377,728
Builders FirstSource, Inc.A		247,674			14,431,964
Caesarstone Ltd.		1,631			20,355
Cornerstone Building Brands, Inc.A		1,276,594			18,268,060
Gibraltar Industries, Inc.A		390,983			25,476,452
Griffon Corp.		611,244			16,191,854
Insteel Industries, Inc.		1,362			55,393
JELD-WEN Holding, Inc.A		10,589			290,244
Masonite International Corp.A		2,047			245,660
Resideo Technologies, Inc.A		356,692			8,796,025
UFP Industries, Inc.		433,325			35,458,985
					160,688,403
Commercial Services & Supplies - 1.09%
ABM Industries, Inc.		4,896			215,473
ACCO Brands Corp.		30,406			251,458
Brink’s Co.		253,956			17,492,489
Deluxe Corp.		115,424			4,117,174
Ennis, Inc.		7,991			151,350
Harsco Corp.A		1,225,389			20,954,152
Herman Miller, Inc.		3,945			153,539
HNI Corp.		550			20,570
Interface, Inc.		1,332,534			19,135,188
KAR Auction Services, Inc.A		1,306			19,159
Kimball International, Inc., Class B		8,864			96,352
Matthews International Corp., Class A		3,643			125,210
Quad/Graphics, Inc.A		513,758			2,024,206
Steelcase, Inc., Class A		14,296			170,122
US Ecology, Inc.A		2,626			84,531
					65,010,973
Construction & Engineering - 3.25%
Comfort Systems USA, Inc.		1,819			166,384
Construction Partners, Inc., Class AA		85,948			3,060,608
Dycom Industries, Inc.A		127,131			10,096,744
EMCOR Group, Inc.		353,645			42,964,331
Fluor Corp.A		2,786,350			54,166,644
Granite Construction, Inc.		230,961			8,573,272
Great Lakes Dredge & Dock Corp.A		14,118			214,876
MasTec, Inc.A B		53,270			4,747,955
Matrix Service Co.A		459,147			4,697,074
MYR Group, Inc.A		1,240			126,666
Primoris Services Corp.		821,134			22,129,561

See accompanying notes

19

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Industrials - 22.33% (continued)
Construction & Engineering - 3.25% (continued)
Sterling Construction Co., Inc.A		4,299		$	103,348
Tutor Perini Corp.A		16,727			227,822
Valmont Industries, Inc.		642			153,412
WillScot Mobile Mini Holdings Corp.A		1,196,202			41,568,020
					192,996,717
Construction Materials - 0.06%
Zurn Water Solutions Corp.		105,353			3,822,207
Electrical Equipment - 1.77%
Acuity Brands, Inc.		463			95,114
Array Technologies, Inc.A		493,162			10,529,009
Atkore, Inc.A		82,352			7,784,735
AZZ, Inc.		4,319			229,469
Encore Wire Corp.		268,570			36,004,494
EnerSys		170,080			13,613,203
GrafTech International Ltd.		2,294,109			24,546,966
nVent Electric PLC		240,472			8,524,733
Powell Industries, Inc.		5,476			141,609
Preformed Line Products Co.		1,423			98,756
Regal Beloit Corp.		23,488			3,577,927
Thermon Group Holdings, Inc.A		10,440			180,403
					105,326,418
Machinery - 6.35%
Allison Transmission Holdings, Inc.		891,989			29,756,753
Altra Industrial Motion Corp.		842			43,910
Astec Industries, Inc.		117,626			6,278,876
Barnes Group, Inc.		302			12,666
CIRCOR International, Inc.A		656			18,722
Crane Co.		242,900			25,086,712
Energy Recovery, Inc.A		311,055			6,320,638
Enerpac Tool Group Corp.		884,241			18,471,795
EnPro Industries, Inc.		303,033			27,169,939
Federal Signal Corp.		888,072			38,018,362
Flowserve Corp.		335,590			11,282,536
Gorman-Rupp Co.		76,116			3,236,452
Graham Corp.		3,361			42,718
Greenbrier Cos., Inc.		1,215,919			49,876,997
Hillenbrand, Inc.		391,344			17,790,498
Hyster-Yale Materials Handling, Inc.		74,849			3,595,746
Kennametal, Inc.		887,831			35,291,282
L B Foster Co., Class AA		3,900			62,127
Lindsay Corp.		41,367			6,025,931
Meritor, Inc.A		866,211			21,083,576
Miller Industries, Inc.		225,687			8,156,328
Mueller Industries, Inc.		68,942			3,629,107
Mueller Water Products, Inc., Class A		5,926			97,246
Oshkosh Corp.		48,960			5,238,720
Shyft Group, Inc.		240,382			9,906,142
Standex International Corp.		175,724			19,552,809
Timken Co.		239,402			16,985,572
Trinity Industries, Inc.		229,690			6,442,805
Wabash National Corp.		479,811			7,451,465
					376,926,430

See accompanying notes

20

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Industrials - 22.33% (continued)
Marine - 0.73%
Costamare, Inc.		8,021		$	107,562
Kirby Corp.A		609,552			31,946,620
Matson, Inc.		132,992			11,075,574
					43,129,756
Professional Services - 2.58%
BGSF, Inc.		7,006			84,282
CBIZ, Inc.A		2,725			100,035
FTI Consulting, Inc.A		664			95,563
Heidrick & Struggles International, Inc.		4,509			211,382
Hudson Global, Inc.A		60,974			1,018,266
Huron Consulting Group, Inc.A		151,838			7,616,194
KBR, Inc.		1,690,227			71,733,234
Kelly Services, Inc., Class A		11,120			200,493
Korn Ferry		511,603			39,500,868
Resources Connection, Inc.		10,088			175,632
Science Applications International Corp.		138,994			12,478,881
TrueBlue, Inc.A		712,675			19,847,999
					153,062,829
Road & Rail - 0.36%
ArcBest Corp.		68,163			6,124,445
Heartland Express, Inc.		9,100			148,603
Schneider National, Inc., Class B		1,804			44,992
Universal Logistics Holdings, Inc.		5,688			119,903
US Xpress Enterprises, Inc., Class AA		2,376			17,986
Werner Enterprises, Inc.		329,515			14,933,620
					21,389,549
Trading Companies & Distributors - 1.66%
Air Lease Corp.		251,468			10,071,293
Applied Industrial Technologies, Inc.		1,305			127,211
Beacon Roofing Supply, Inc.A		214,732			11,352,881
BlueLinx Holdings, Inc.A		3,900			185,757
Boise Cascade Co.		178,512			10,107,349
DXP Enterprises, Inc.A		2,899			95,551
GATX Corp.B		30,682			2,910,188
H&E Equipment Services, Inc.		2,091			94,262
Herc Holdings, Inc.		241			43,872
McGrath RentCorp		103,797			7,487,916
MSC Industrial Direct Co., Inc., Class A		95,149			7,999,176
NOW, Inc.A		1,063,276			7,676,853
Rush Enterprises, Inc., Class A		211,997			11,040,804
Titan Machinery, Inc.A		87,215			2,478,650
Triton International Ltd.		233,245			14,505,507
Univar Solutions, Inc.A		472,013			12,074,093
WESCO International, Inc.A		1,665			215,717
					98,467,080
Total Industrials					1,326,226,791
Information Technology - 11.24%
Communications Equipment - 1.46%
ADTRAN, Inc.		484,729			8,957,792
CalAmp Corp.A		1,664			16,008
Calix, Inc.A		116,105			7,267,012

See accompanying notes

21

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Information Technology - 11.24% (continued)
Communications Equipment - 1.46% (continued)
Casa Systems, Inc.A		94,060		$	595,400
Ciena Corp.A		400,159			21,724,632
CommScope Holding Co., Inc.A		348,702			3,734,598
Comtech Telecommunications Corp.		8,960			193,267
Extreme Networks, Inc.A		757,869			7,449,852
Infinera Corp.A B		3,137,149			23,810,961
NETGEAR, Inc.A		183,211			5,281,973
NetScout Systems, Inc.A		4,209			113,896
Plantronics, Inc.A		3,724			99,654
Viasat, Inc.A		126,109			7,527,446
					86,772,491
Electronic Equipment, Instruments & Components - 3.68%
Advanced Energy Industries, Inc.		107,368			9,858,530
Arrow Electronics, Inc.A		46,136			5,340,242
Avnet, Inc.		814,047			31,023,331
Belden, Inc.		241,101			14,516,691
Benchmark Electronics, Inc.		632			14,732
Daktronics, Inc.A		2,848			15,806
ePlus, Inc.A		1,371			151,591
FabrinetA		137,011			13,153,056
FARO Technologies, Inc.A		332,802			24,484,243
II-VI, Inc.A B		519,354			31,426,111
Insight Enterprises, Inc.A		2,377			225,102
Kimball Electronics, Inc.A		6,049			173,909
Methode Electronics, Inc.		114,951			4,835,989
nLight, Inc.A		162,554			4,571,019
PC Connection, Inc.		3,465			159,563
Plexus Corp.A		463			40,429
Rogers Corp.A		151,702			30,510,306
Sanmina Corp.A		393,009			14,836,090
ScanSource, Inc.A		8,916			319,015
TTM Technologies, Inc.A		872,666			11,554,098
Vishay Intertechnology, Inc.		617,997			11,877,902
Vishay Precision Group, Inc.A		277,278			9,452,407
					218,540,162
IT Services - 1.21%
Alliance Data Systems Corp.		87,578			7,466,025
BM Technologies, Inc.A		7,586			67,819
Cass Information Systems, Inc.		4,272			175,109
Conduent, Inc.A		5,376			36,288
CSG Systems International, Inc.		159,670			7,991,483
Euronet Worldwide, Inc.A		242,365			27,190,929
ExlService Holdings, Inc.A		118,706			14,556,917
MAXIMUS, Inc.		110,740			9,365,282
Sabre Corp.A B		17,000			176,460
Verra Mobility Corp.A		349,400			5,199,072
					72,225,384
Semiconductors & Semiconductor Equipment - 3.46%
Brooks Automation, Inc.		340,533			39,655,068
Cohu, Inc.A		823,197			26,375,232
Diodes, Inc.A		848,177			81,501,328
Ichor Holdings Ltd.A		3,165			138,374
Kulicke & Soffa Industries, Inc.		158,399			9,028,743

See accompanying notes

22

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Information Technology - 11.24% (continued)
Semiconductors & Semiconductor Equipment - 3.46% (continued)
MaxLinear, Inc.A		161,745		$	10,189,935
Photronics, Inc.A		1,219,559			15,842,071
Tower Semiconductor Ltd.A		317,887			10,131,059
Ultra Clean Holdings, Inc.A		254,436			12,612,392
					205,474,202
Software - 1.22%
A10 Networks, Inc.A		384,762			7,191,202
Ebix, Inc.B		3,224			105,779
InterDigital, Inc.		256			17,139
Progress Software Corp.		391,204			20,111,798
Telos Corp.A		445,000			11,529,950
Verint Systems, Inc.A		117,040			5,454,064
WM Technology, Inc.A B		405,561			4,964,067
Xperi Holding Corp.		415,762			7,450,455
Zuora, Inc., Class AA		720,854			15,757,868
					72,582,322
Technology Hardware, Storage & Peripherals - 0.21%
Diebold Nixdorf, Inc.A		9,442			84,978
Super Micro Computer, Inc.A		53,093			1,878,961
Xerox Holdings Corp.		579,688			10,318,447
					12,282,386
Total Information Technology					667,876,947
Materials - 4.12%
Chemicals - 0.92%
AdvanSix, Inc.A		6,072			295,099
American Vanguard Corp.		9,604			149,630
Avient Corp.		1,517			81,736
Cabot Corp.		148,741			7,935,332
Chemours Co.		362,854			10,167,169
ECOVYST, Inc.		17,706			206,806
FutureFuel Corp.		8,394			59,262
GCP Applied Technologies, Inc.A		9,100			205,751
Hawkins, Inc.		2,347			86,064
HB Fuller Co.		2,486			175,288
Ingevity Corp.A		1,116			86,948
Livent Corp.A B		210,621			5,943,725
Minerals Technologies, Inc.		171,679			12,178,908
Orion Engineered Carbons SAA		596,771			11,219,295
Tredegar Corp.		7,458			89,943
Trinseo PLC		3,197			179,224
Tronox Holdings PLC, Class A		243,233			5,672,194
					54,732,374
Construction Materials - 0.26%
Eagle Materials, Inc.		106,450			15,792,922
Containers & Packaging - 0.30%
Graphic Packaging Holding Co.		595,150			11,861,340
O-I Glass, Inc.A		435,619			5,684,828
TriMas Corp.A		1,298			43,288
					17,589,456

See accompanying notes

23

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Materials - 4.12% (continued)
Metals & Mining - 2.51%
Alamos Gold, Inc., Class A		1,788,753		$	13,308,322
Allegheny Technologies, Inc.A		1,765,134			28,418,657
Carpenter Technology Corp.		343,404			10,604,316
Coeur Mining, Inc.A		687,918			4,354,521
Commercial Metals Co.		645,499			20,772,158
Compass Minerals International, Inc.		2,100			137,760
Elah Holdings, Inc.A		3,530			345,940
Ferroglobe PLCA		1,823,721			12,091,270
Ferroglobe Representation & Warranty InsuranceC D		2,123,070			-
Hecla Mining Co.		1,108,718			6,408,390
Kaiser Aluminum Corp.		1,761			171,064
Materion Corp.		293,471			21,182,737
MP Materials Corp.A		267,998			9,071,732
Ryerson Holding Corp.		4,100			108,076
Schnitzer Steel Industries, Inc., Class A		189,526			10,196,499
Warrior Met Coal, Inc.		5,088			121,959
Worthington Industries, Inc.		221,298			12,020,907
					149,314,308
Paper & Forest Products - 0.13%
Clearwater Paper Corp.A		632			26,437
Glatfelter Corp.		9,327			153,243
Louisiana-Pacific Corp.		58,700			3,459,191
Mercer International, Inc.		15,855			170,758
Schweitzer-Mauduit International, Inc.		107,316			3,738,889
					7,548,518
Total Materials					244,977,578
Real Estate - 4.67%
Equity Real Estate Investment Trusts (REITs) - 3.94%
Agree Realty Corp.		143,377			10,188,370
Alexander’s, Inc.		744			207,412
Apple Hospitality REIT, Inc.		416,061			6,536,318
Brandywine Realty Trust		778,879			10,320,147
CareTrust REIT, Inc.		865,356			17,956,137
Corporate Office Properties Trust		440,665			11,950,835
Equity CommonwealthA		190,728			4,945,577
GEO Group, Inc.B		9,789			80,074
Highwoods Properties, Inc.		269,346			12,077,475
Industrial Logistics Properties Trust		159,826			4,489,512
Kite Realty Group Trust		296,410			6,017,123
Lexington Realty Trust		2,012,559			29,322,985
Pebblebrook Hotel Trust		235,357			5,286,118
Physicians Realty Trust		509,437			9,684,398
Piedmont Office Realty Trust, Inc., Class A		1,100,203			19,539,605
PotlatchDeltic Corp.		374,117			19,555,096
Rayonier, Inc.		204,016			7,615,917
Retail Opportunity Investments Corp.		542,256			9,635,889
Seritage Growth Properties, Class AA B		1,128,018			17,371,477
STAG Industrial, Inc.		127,249			5,539,149
Sunstone Hotel Investors, Inc.A		788,333			9,728,029
Terreno Realty Corp.		95,916			7,014,337
Urban Edge Properties		528,115			9,257,856
					234,319,836
Real Estate Management & Development - 0.73%
Forestar Group, Inc.A		6,613			129,416

See accompanying notes

24

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

	Shares		Fair Value
COMMON STOCKS - 97.34% (continued)
Real Estate - 4.67% (continued)
Real Estate Management & Development - 0.73% (continued)
Howard Hughes Corp.A		95,797		$	8,346,793
Newmark Group, Inc., Class A		900,807			13,404,008
RE/MAX Holdings, Inc., Class A		5,146			163,694
Realogy Holdings Corp.A		358,124			6,202,708
RMR Group, Inc., Class A		429,753			14,951,107
					43,197,726
Total Real Estate					277,517,562
Utilities - 2.31%
Electric Utilities - 0.58%
ALLETE, Inc.		3,260			200,620
Hawaiian Electric Industries, Inc.		75,709			3,070,757
Otter Tail Corp.		3,495			216,725
PNM Resources, Inc.		4,117			204,821
Portland General Electric Co.		627,675			30,950,654
					34,643,577
Gas Utilities - 0.80%
Chesapeake Utilities Corp.		56,674			7,428,261
National Fuel Gas Co.		231,171			13,276,150
South Jersey Industries, Inc.B		71,335			1,623,585
Southwest Gas Holdings, Inc.		334,136			23,138,918
Spire, Inc.		31,775			1,994,199
					47,461,113
Multi-Utilities - 0.93%
Avista Corp.		991,720			39,480,373
NorthWestern Corp.		278,827			15,854,104
					55,334,477
Total Utilities					137,439,167
Total Common Stocks (Cost $4,206,773,366)					5,782,589,801
SHORT-TERM INVESTMENTS - 2.51% (Cost $149,026,206)
Investment Companies - 2.51%
American Beacon U.S. Government Money Market Select Fund, 0.01%E F		149,026,206			149,026,206
SECURITIES LENDING COLLATERAL - 0.18% (Cost $10,739,130)
Investment Companies - 0.18%
American Beacon U.S. Government Money Market Select Fund, 0.01%E F		10,739,130			10,739,130
TOTAL INVESTMENTS - 100.03% (Cost $4,366,538,702)					5,942,355,137
LIABILITIES, NET OF OTHER ASSETS - (0.03%)					(1,506,164	)
TOTAL NET ASSETS - 100.00%				$	5,940,848,973
Percentages are stated as a percent of net assets.

^A Non-income producing security.

^B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at October 31, 2021 (Note 9).

^C Value was determined using significant unobservable inputs.

^D Fair valued pursuant to procedures approved by the Board of Trustees. At period end, the value of these securities amounted to $0 or 0.00% of net assets.

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

^F 7-day yield.

LLC - Limited Liability Company.

LP - Limited Partnership.

MLP - Master Limited Partnership.

PLC - Public Limited Company.

REIT - Real Estate Investment Trust.

See accompanying notes

25

American Beacon Small Cap Value Fund^SM

Schedule of Investments

October 31, 2021

Long Futures Contracts Open on October 31, 2021:
Equity Futures Contracts
Description	Number of Contracts	Expiration Date	Notional Amount		Contract Value		Unrealized Appreciation (Depreciation)
Russell 2000 E-Mini Index	1,253	December 2021	$	140,370,951	$	143,800,545	$	3,429,594
			$	140,370,951	$	143,800,545	$	3,429,594

The Fund’s investments are summarized by level based on the inputs used to determine their values. As of October 31, 2021, the investments were classified as described below:

Small Cap Value Fund	Level 1		Level 2		Level 3			Total
Assets
Common Stocks	$	5,782,589,801	$	-	$	0	(1)	$	5,782,589,801
Short-Term Investments		149,026,206		-		-			149,026,206
Securities Lending Collateral		10,739,130		-		-			10,739,130
Total Investments in Securities - Assets	$	5,942,355,137	$	-	$	-		$	5,942,355,137
Financial Derivative Instruments - Assets
Futures Contracts	$	3,429,594	$	-	$	-		$	3,429,594
Total Financial Derivative Instruments - Assets	$	3,429,594	$	-	$	-		$	3,429,594

⁽¹⁾  Investment held in the Fund’s Portfolio with $0 fair value.

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended October 31, 2021, there were no transfers into or out of Level 3.

See accompanying notes

26

American Beacon Small Cap Value Fund^SM

Statement of Assets and Liabilities

October 31, 2021

Assets:
Investments in unaffiliated securities, at fair value†§	$	5,782,589,801
Investments in affiliated securities, at fair value‡		159,765,336
Cash		2,436
Cash collateral held at custodian for the benefit of the broker		9,460,000
Dividends and interest receivable		1,600,493
Receivable for investments sold		22,295,123
Receivable for fund shares sold		3,803,906
Receivable for variation margin on open futures contracts (Note 5)		3,431,963
Prepaid expenses		39,547
Total assets		5,982,988,605
Liabilities:
Payable for investments purchased		20,123,402
Payable for fund shares redeemed		3,162,748
Cash due to broker for futures contracts		3,419,900
Management and sub-advisory fees payable (Note 2)		3,740,230
Service fees payable (Note 2)		126,015
Transfer agent fees payable (Note 2)		95,559
Payable upon return of securities loaned (Note 9)§		10,739,130
Custody and fund accounting fees payable		340,561
Professional fees payable		72,393
Trustee fees payable (Note 2)		31,143
Payable for prospectus and shareholder reports		157,741
Other liabilities		130,810
Total liabilities		42,139,632
Net assets	$	5,940,848,973
Analysis of net assets:
Paid-in-capital	$	3,836,486,024
Total distributable earnings (deficits)A		2,104,362,949
Net assets	$	5,940,848,973
Shares outstanding at no par value (unlimited shares authorized):
R5 Class		108,358,990
Y Class		8,339,121
Investor Class		12,346,517
Advisor Class		1,118,110
A Class		2,164,011
C Class		409,294
R6 Class		58,685,178
Net assets:
R5 Class	$	3,380,005,813
Y Class	$	255,837,301
Investor Class	$	367,726,622
Advisor Class	$	32,801,309
A Class	$	63,024,594
C Class	$	11,261,210
R6 Class	$	1,830,192,124
Net asset value, offering and redemption price per share:
R5 Class	$	31.19
Y Class	$	30.68
Investor Class	$	29.78
Advisor Class	$	29.34
A Class	$	29.12
A Class (offering price)	$	30.90
C Class	$	27.51
R6 Class	$	31.19
† Cost of investments in unaffiliated securities	$	4,206,773,366
‡ Cost of investments in affiliated securities	$	159,765,336
§ Fair value of securities on loan	$	69,502,259
A The Fund’s investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

27

American Beacon Small Cap Value Fund^SM

Statement of Operations

For the year ended October 31, 2021

Investment income:
Dividend income from unaffiliated securities (net of foreign taxes)†	$	86,169,706
Dividend income from affiliated securities (Note 2)		11,919
Interest income		7,407
Income derived from securities lending (Note 9)		1,324,616
Total investment income		87,513,648
Expenses:
Management and sub-advisory fees (Note 2)		44,500,060
Transfer agent fees:
R5 Class (Note 2)		1,120,781
Y Class (Note 2)		262,083
Investor Class		20,852
Advisor Class		5,753
A Class		8,734
C Class		3,844
R6 Class		56,193
Custody and fund accounting fees		599,225
Professional fees		288,306
Registration fees and expenses		157,826
Service fees (Note 2):
Investor Class		1,423,149
Advisor Class		130,077
A Class		124,070
C Class		15,153
Distribution fees (Note 2):
Advisor Class		130,092
A Class		156,772
C Class		110,746
Prospectus and shareholder report expenses		476,483
Trustee fees (Note 2)		400,500
Loan expense (Note 10)		29,175
Other expenses		514,561
Total expenses		50,534,435
Net investment income		36,979,213
Realized and unrealized gain (loss) from investments:
Net realized gain from:
Investments in unaffiliated securitiesA		992,666,576
Redemption in kind (Note 7)		9,196,460
Commission recapture (Note 1)		6,574
Foreign currency transactions		540
Futures contracts		42,199,986
Change in net unrealized appreciation (depreciation) of:
Investments in unaffiliated securitiesB		1,477,923,882
Foreign currency transactions		(14	)
Futures contracts		4,188,616
Net gain from investments		2,526,182,620
Net increase in net assets resulting from operations	$	2,563,161,833
† Foreign taxes	$	236,813
A The Fund did not recognize net realized gains (losses) from the sale of investments in affiliated securities.
B The Fund’s investments in affiliated securities did not have a change in unrealized appreciation (depreciation) at year end.

See accompanying notes

28

American Beacon Small Cap Value Fund^SM

Statement of Changes in Net Assets

	Year Ended October 31, 2021			Year Ended October 31, 2020
Increase (decrease) in net assets:
Operations:
Net investment income	$	36,979,213		$	51,286,061
Net realized gain (loss) from investments in unaffiliated securities, redemption in kind, commission recapture, foreign currency transactions and futures contracts		1,044,070,136			(349,000,273	)
Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities, foreign currency transactions and futures contracts		1,482,112,484			(450,826,828	)
Net increase (decrease) in net assets resulting from operations		2,563,161,833			(748,541,040	)
Distributions to shareholders:
Total retained earnings:
R5 Class		(30,252,473	)		(77,630,333	)
Y Class		(1,814,421	)		(4,669,476	)
Investor Class		(2,372,133	)		(7,055,350	)
Advisor Class		(272,130	)		(889,167	)
A Class		(318,938	)		(920,254	)
C Class		–			(127,221	)
R6 Class		(13,695,714	)		(25,997,687	)
Net distributions to shareholders		(48,725,809	)		(117,289,488	)
Capital share transactions (Note 11):
Proceeds from sales of shares		1,621,094,193			1,304,585,937
Reinvestment of dividends and distributions		46,257,815			112,103,096
Cost of shares redeemed		(2,798,705,958	)		(2,191,361,762	)
Net (decrease) in net assets from capital share transactions		(1,131,353,950	)		(774,672,729	)
Net increase (decrease) in net assets		1,383,082,074			(1,640,503,257	)
Net assets:
Beginning of year		4,557,766,899			6,198,270,156
End of year	$	5,940,848,973		$	4,557,766,899

See accompanying notes

29

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

1.  Organization and Significant Accounting Policies

American Beacon Funds (the “Trust”) is organized as a Massachusetts business trust. The Fund, a series within the Trust, is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. As of October 31, 2021, the Trust consists of twenty-eight active series, one of which is presented in this filing: American Beacon Small Cap Value Fund (the “Fund”). The remaining twenty-seven 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for contracts, hedging relationships and other transactions affected by the transitioning away from the London Interbank Offered Rate (“LIBOR”) and other reference rates that are expected to be discontinued. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. At this time, management is evaluating the implications of these changes on the financial statements.

In October 2020, the U.S. Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives the fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how the fund will use derivatives, may adversely affect the fund’s performance and may increase costs related to the fund’s use of derivatives.

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
R5 Class	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 Class	All investors using intermediary organizations, such as broker-dealers or retirement plan sponsors.	$	2,500
Advisor Class	All investors who invest through intermediary organizations, such as broker-dealers or third party administrators.	$	2,500

30

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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

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

Significant Accounting Policies

The following is a summary of significant accounting policies, consistently followed by the 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. Tax reclaim accruals are automatically generated on accounting and custody systems at the time of the income event based on the tax databases maintained by the Fund’s custodian. Reconciliations are performed between custody and accounting systems to help ensure reclaim accruals are in line. Interest income, net of foreign taxes, is earned from settlement date, recorded on the accrual basis, and adjusted, if necessary, for accretion of discounts and amortization of premiums. Realized gains (losses) from securities sold are determined based on specific lot identification.

Distributions to Shareholders

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

Commission Recapture

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

31

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Allocation of Income, Trust Expenses, Gains, and Losses

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

Use of Estimates

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

Other

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

2.  Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

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

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

The Trust, on behalf of the Fund, and the Manager have entered into Investment Advisory Agreements with Barrow, Hanley, Mewhinney & Strauss, LLC; Brandywine Global Investment Management, LLC; Foundry Partners, LLC; Hillcrest Asset Management, LLC; Hotchkis and Wiley Capital Management, LLC; and Mellon Investments Corporation (“Sub-Advisors”) pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund’s average daily net assets.

The Management and Sub-Advisory Fees paid by the Fund for the year ended October 31, 2021 were as follows:

	Effective Fee Rate			Amount of Fees Paid
Management Fees		0.35	%	$	21,141,368
Sub-Advisor Fees		0.38	%		23,358,692
Total		0.73	%	$	44,500,060

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 of 10% of the net monthly interest income (the gross interest income earned by the investment of cash

32

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

collateral, less the amount paid to borrowers and related expenses) from such activities and, with respect to loan fees paid by borrowers, a fee of 10% of such loan fees. 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. These fees are included in “Income derived from securities lending” and “Management and sub-advisory fees” on the Statement of Operations. During the year ended October 31, 2021, the Manager received securities lending fees of $121,008 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 Advisor, A, and C Classes of the Fund. Under the Distribution Plans, as compensation for distribution and shareholder servicing assistance, the Manager receives an annual fee of 0.25% of the average daily net assets of the Advisor and A Classes and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the Manager for distribution assistance.

Service Plans

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

Sub-Transfer Agent Fees

The Manager has entered into agreements, which include servicing agreements, with financial intermediaries that provide recordkeeping, processing, shareholder communications and other services to customers of the intermediaries that hold positions in the R5 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 R5 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 R5 and Y Classes on an annual basis. During the year ended October 31, 2021, the sub-transfer agent fees, as reflected in “Transfer agent fees” on the Statement of Operations, were as follows:

Fund	Sub-Transfer Agent Fees
Small Cap Value	$	1,245,020

As of October 31, 2021, the Fund owed the Manager the following reimbursement of sub-transfer agent fees, as reflected in “Transfer agent fees payable” on the Statement of Assets and Liabilities:

Fund	Reimbursement Sub-Transfer Agent Fees
Small Cap Value	$	56,943

33

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Brokerage Commissions

Affiliated entities of a sub-advisor to the Fund received commissions on purchases and sales of the Fund’s portfolio securities totaling $266,393 for the year ended October 31, 2021.

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 listed below held the following shares with an October 31, 2021 fair value and dividend income earned from the investment in the USG Select Fund.

Affiliated Security	Type of Transaction	Fund	October 31, 2021 Shares/ Principal		Change in Unrealized Gain (Loss)		Realized Gain (Loss)		Dividend Income		October 31, 2021 Fair Value
U.S. Government Money Market Select	Direct	Small Cap Value	$	149,026,206	$	-	$	-	$	11,919	$	149,026,206
U.S. Government Money Market Select	Securities Lending	Small Cap Value		10,739,130		-		-		N/A		10,739,130

The Fund and the USG Select Fund have the same investment advisor and therefore, are considered to be affiliated. The Manager serves as investment advisor to the USG Select Fund and receives management fees and administrative fees totaling 0.10% of the average daily net assets of the USG Select Fund. During the year ended October 31, 2021, the Manager earned fees on the Fund’s direct investments and securities lending collateral investments in the USG Select Fund as shown below:

Fund	Direct Investments in USG Select Fund		Securities Lending Collateral Investments in USG Select Fund		Total
Small Cap Value	$	145,476	$	18,604	$	164,080

Interfund Credit Facility

Pursuant to an exemptive order issued by the SEC, the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for the fund. When the fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager’s asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended October 31, 2021, the Fund participated as a lender and loaned $14,361,692 for 20 days at an average interest rate of 0.82% with interest charges earned of $6,410. During the period ended October 31, 2021, the Fund borrowed $2,891,743 for 1 day at an interest rate of 0.84% with interest charges of $67. These amounts are included in “Interest income” on the Statement of Operations.

34

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Expense Reimbursement Plan

The Fund has adopted an Expense Reimbursement Plan whereby the Manager may seek repayment of such fee or voluntary reductions and expense reimbursements. Under the policy, the Manager can be reimbursed by the Fund for any contractual or voluntary fee reductions or expense reimbursements if reimbursement to the Manager (a) occurs within three years from the date of the Manager’s waiver/reimbursement and (b) does not cause the Fund’s annual operating expenses to exceed the lesser of the contractual percentage limit in effect at the time of the waiver/reimbursement or time of recoupment. During the year ended October 31, 2021 there were no waived fees, expenses reimbursed, or recouped expenses.

Sales Commissions

The Fund’s Distributor, Resolute Investment Distributors, Inc. (“RID” or “Distributor”), may receive a portion of Class A sales charges from broker dealers which may be used to offset distribution related expenses. During the year ended October 31, 2021, RID collected $723 from the sale of Class A Shares of the Fund.

A CDSC of 0.50% will be deducted with respect to Class A Shares on certain purchases of $1,000,000 or more that are redeemed in whole or part within 18 months of purchase, unless waived as discussed in the Fund’s Prospectus. Any applicable CDSC will be 0.50% of the lesser of the original purchase price or the value of the redemption of the Class A Shares redeemed. During the year ended October 31, 2021, there were no CDSC fees collected for the Class A Shares of the Fund.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Fund’s Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended October 31, 2021, CDSC fees of $132 were collected for Class C Shares of the Fund.

Trustee Fees and Expenses

Effective January 1, 2021, 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 and Compliance Committee and the Investment Committee, (c) $1,000 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. For this purpose, the Board considers attendance at regular meetings held by video conference to constitute in-person attendance at a Board meeting. 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 and Compliance 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 $10,000.

35

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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

36

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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

Investments in registered open-end investment management companies will be valued based upon the NAVs of such investments and are categorized as Level 1 of the fair value hierarchy.

Level 3 trading assets and trading liabilities, at fair value

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

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

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

37

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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 the 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 the 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 the 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 the Fund may differ from the value that would be realized if the securities were sold.

4.  Securities and Other Investments

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.

Depositary Receipts and U.S. Dollar-Denominated Foreign Stocks Traded on U.S. Exchanges

ADRs are U.S. dollar-denominated receipts issued generally by domestic banks and represent the deposit with the bank of a security of a foreign issuer. 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.

38

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Other Investment Company Securities and Other Exchange-Traded Products

The Fund at times 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 the 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, Fund 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 Fund shareholders directly bear in connection with the Fund’s own operations. These other fees and expenses, if applicable, are reflected as Acquired Fund Fees and Expenses and are included in the Fees and Expenses Table for the Fund in its Prospectus. Investment in other investment companies may involve the payment of substantial premiums above the value of such issuer’s portfolio securities.

Publicly Traded Partnerships/Master Limited Partnerships (“MLPs”)

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

Real Estate Investment Trusts (“REITs”)

REITs are pooled investment vehicles that own, and often operate, income producing real estate (known as “equity REITs”) or invest in mortgages secured by loans on such real estate (known as “mortgage REITs”) or both (known as “hybrid REITs”). REITs are susceptible to the risks associated with direct ownership of real estate, such as declines in property values, increase in property taxes, operating expenses, rising interest rates or overbuilding, zoning changes, and losses from casualty or condemnation. REITs typically are subject to management fees and other expenses that are separate from those of the Fund.

5.  Financial Derivative Instruments

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

Futures Contracts

A futures contract is a contract to purchase or sell a particular security, or the cash value of an asset, such as securities, indices, or currencies, at a specified future date at a price agreed upon when the contract is made. Under many such contracts, no delivery of the actual underlying asset is required. Rather, upon the expiration of the contract, settlement is made by exchanging cash in an amount equal to the difference between the contract price and the closing price of the asset (e.g., a security or an index) at expiration, net of the initial and variation margin that was previously paid. A Treasury futures contract is a contract for the future delivery of a U.S. Treasury

39

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

security. An equity index futures contract is based on the value of an underlying index. The Fund may, from time to time, use futures positions to equitize cash and expose its portfolio to changes in securities prices or index prices. This can magnify gains and losses in the Fund. The Fund also may have to sell assets at inopportune times to satisfy its settlement or collateral obligations. The risks associated with the use of futures contracts also include that there may be an imperfect correlation between the changes in market value of the prices of futures contracts and the assets underlying such contracts and that there may not be a liquid secondary market for a futures contract.

During the year ended October 31, 2021, the Fund entered into futures contracts primarily for exposing cash to markets.

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

Average Futures Contracts Outstanding
Fund	Year Ended October 31, 2021
Small Cap Value		1,235

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

Fair values of financial instruments on the Statement of Assets and Liabilities as of October 31, 2021:
	Derivatives not accounted for as hedging instruments
Assets:	Credit contracts		Foreign exchange contracts		Commodity contracts		Interest rate contracts		Equity contracts		Total
Receivable for variation margin from open futures contracts(2)	$	-	$	-	$	-	$	-	$	3,429,594	$	3,429,594

The effect of financial derivative instruments on the Statement of Operations as of October 31, 2021:
	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		$	-		$	-		$	-		$	-		$	42,199,986		$	42,199,986
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		$	-		$	-		$	-		$	-		$	4,188,616		$	4,188,616

⁽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 counterparties and has elected not to offset qualifying financial and derivative instruments on the Statement of Assets and Liabilities, as such all financial and derivative instruments are presented on a gross basis. The impacts of netting arrangements that provide the right to offset are detailed below, if applicable. The net amount represents the net receivable or payable that would be due from or to the counterparty in the event of default. Exposure from borrowings and other financing agreements such as repurchase agreements can only be netted across transactions governed by the

40

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

same Master Agreement with the same legal entity. All amounts reported below represent the balance as of the report date, October 31, 2021.

Offsetting of Financial and Derivative Assets as of October 31, 2021:
	Assets			Liabilities
Futures Contracts(1)	$	3,429,594		$	-
Total derivative assets and liabilities in the Statement of Assets and Liabilities	$	3,429,594		$	-
Derivatives not subject to a Master Netting Agreement or similar agreement (“MNA”)	$	(3,429,594	)	$	-

	Remaining Contractual Maturity of the Agreements As of October 31, 2021
	Overnight and Continuous		<30 days		Between 30 & 90 days		>90 days		Total
Securities Lending Transactions
Common Stocks	$	10,739,130	$	-	$	-	$	-	$	10,739,130
Total Borrowings	$	10,739,130	$	-	$	-	$	-	$	10,739,130
Gross amount of recognized liabilities for securities lending transactions									$	10,739,130

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

6.  Principal Risks

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

Equity Investments Risk

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

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

41

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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. There may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes. There can be no assurance that any strategy used will succeed. There also can be no assurance that, at all times, a liquid market will exist for offsetting a futures contract that the Fund has previously bought or sold and this may result in the inability to close a futures contract when desired. Futures contracts may experience potentially dramatic price changes, which will increase the volatility of the Fund and may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract).

Market Risk

The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund’s performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. During a general downturn in the securities markets, multiple assets may decline in value simultaneously. 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. Prices in many financial markets have increased significantly over the last decade, but there have also been periods of adverse market and financial developments and cyclical change during that timeframe, which have resulted in unusually high levels of volatility in domestic and foreign financial markets that has caused losses for investors and may occur again in the future, particularly if markets enter a period of uncertainty or economic weakness. The value of a security may decline due to adverse issuer-specific conditions, general market conditions unrelated to a particular issuer, or factors that affect a particular industry or industries. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole.

Geopolitical and other events, including war, terrorism, economic uncertainty, trade disputes, pandemics, public health crises, natural disasters and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed-income markets, which may disrupt economies and markets and adversely affect the value of your investment. Adverse market events may also lead to increased shareholder redemptions, which could cause the Fund to experience a loss or difficulty in selling investments to meet redemption requests by shareholders and may increase the Fund’s portfolio turnover, which will increase the costs that the Fund incurs and lower the Fund’s performance. Even when securities markets perform well, there is no assurance that the investments held by the Fund will increase in value along with the broader market.

Policy changes by the U.S. government and/or Federal Reserve and political events within the U.S. and abroad, including the U.S. presidential election, 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 severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers.

42

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in securities prices could be a sustained trend or a drastic movement. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.

Multiple Sub-Advisor Risk

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

Other Investment Companies Risk

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

43

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Recent Market Events Risk

An outbreak of infectious respiratory illness caused by a novel coronavirus, known as COVID-19, was first detected in China in December 2019 and has subsequently spread globally. Transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, widespread business closures and layoffs, travel restrictions, closed international, national and local borders, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event cancellations, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. The impact of the COVID-19 pandemic may last for an extended period of time and may result in a sustained economic downturn or recession. The U.S. Federal Reserve and the U.S. federal government have taken numerous measures to address the economic impact of the COVID-19 pandemic and stimulate the U.S. economy. The ultimate effects of these and other efforts that may be taken may not be known for some time.

The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets. Amid the Federal Reserve’s ongoing efforts, concerns about the markets’ dependence on the Federal Reserve’s provision of liquidity have grown. 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. High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty.

A rise in protectionist trade policies, slowing global economic growth, risks associated with the United Kingdom’s departure from the European Union on December 31, 2020, commonly referred to as “Brexit,” and a trade agreement between the United Kingdom and the European Union, the risks associated with ongoing trade negotiations with China, the possibility of changes to some international trade agreements, tensions or open conflict between nations, or political or economic dysfunction within some nations that are major producers of oil could affect the economies of many nations, including the United States, in ways that cannot necessarily be foreseen at the present time.

Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Certain issuers, industries and regions may be adversely affected by the impacts of climate change, including on the demand for and the development of goods and services and related production costs, and the impacts of legislation, regulation and international accords related to climate change, as well as any indirect consequences of regulation or business trends driven by climate change.

Sector Risk

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

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

44

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Securities Lending Risk

The Fund may lend its portfolio securities to brokers, dealers and financial institutions in order to obtain additional income. Borrowers of the Fund’s securities provide collateral either in the form of cash, which the Fund reinvests in securities or in the form of non-cash collateral consisting of securities issued or guaranteed by the U.S. government or one of its agencies or instrumentalities. The Fund will be responsible for the risks associated with the investment of cash collateral, including any collateral invested in an affiliated money market fund. The Fund may lose money on its investment of cash collateral or may fail to earn sufficient income on its investment to cover its payment to the borrower of a pre-negotiated fee or “rebate” for the use of that cash collateral in connection with the loan. The Fund could also lose money due to a decline in the value of non-cash collateral. In addition, delays may occur in the recovery of securities from borrowers, which could interfere with the Fund’s ability to vote proxies or to settle transactions or could result in increased costs. Moreover, if the borrower becomes subject to insolvency or similar proceedings, the Fund could incur delays in its ability to enforce its rights in its collateral. There also is a risk that a borrower may default on its obligation to return loaned securities at a time when the value of the Fund’s collateral is inadequate. Although the Fund’s securities lending agent may indemnify the Fund against that risk, it is also possible that the securities lending agent will be unable to satisfy its indemnification obligations. In any case in which the loaned securities are not returned to the Fund before an ex-dividend date, whether or not due to a default by the borrower, the payment in lieu of the dividend that the Fund receives from the securities’ borrower would not be treated as a dividend for federal income tax purposes and thus would not qualify for treatment as “qualified dividend income.”

7.  Federal Income and Excise Taxes

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

The Fund does not have any unrecorded tax liabilities in the accompanying financial statements. Each of the tax years in the four year period ended October 31, 2021 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.

45

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

The tax character of distributions paid were as follows:

	Year Ended October 31, 2021		Year Ended October 31, 2020
Distributions paid from:
Ordinary income*
R5 Class	$	30,252,473	$	49,800,258
Y Class		1,814,421		2,919,990
Investor Class		2,372,133		3,994,989
Advisor Class		272,130		461,474
A Class		318,938		487,603
C Class		-		30,237
R6 Class		13,695,714		16,815,221
Long-term capital gains
R5 Class		-		27,830,075
Y Class		-		1,749,486
Investor Class		-		3,060,361
Advisor Class		-		427,693
A Class		-		432,651
C Class		-		96,984
R6 Class		-		9,182,466
Total distributions paid	$	48,725,809	$	117,289,488

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

As of October 31, 2021, $83,410,224 long-term capital gains distributions designated for federal income tax purposes are due to the use of accumulated earnings and profits distributed to shareholders upon redemption of shares.

As of October 31, 2021, the components of distributable earnings (deficits) on a tax basis were as follows:

Fund	Tax Cost		Unrealized Appreciation		Unrealized (Depreciation)			Net Unrealized Appreciation (Depreciation)
Small Cap Value	$	4,463,318,441	$	1,666,212,514	$	(187,175,818	)	$	1,479,036,696

Fund	Net Unrealized Appreciation (Depreciation)		Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Capital and Other (Losses)		Other Temporary Differences		Distributable Earnings
Small Cap Value	$	1,479,036,696	$	280,207,572	$	345,118,681	$	-	$	-	$	2,104,362,949

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

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

Shareholders of the Fund elected to receive securities rather than cash for their redemption proceeds. The Fund realized gains of $9,196,460 as a result of the in kind distribution, as disclosed on the Statement of Operations for the year ended October 31, 2021. These gains were not recognized for federal income tax purposes.

46

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

Accordingly, the following amounts represent current year permanent differences derived from equalization, redemptions in kind, and nondeductible expenses from investments in publicly traded partnerships as of October 31, 2021:

Fund	Paid-In-Capital		Distributable Earnings/(Deficits)
Small Cap Value	$	92,523,746	$	(92,523,746	)

For federal income tax purposes, the Fund measures its capital loss carryforwards annually at October 31, its fiscal year end. Capital loss carryforwards retain their character as short-term and/or long-term and may be carried forward and applied against future realized capital gains with no expiration date.

The Fund utilized $118,678,194 short-term and $198,805,194 long-term capital loss carryforwards and did not have any remaining capital loss carryforwards as of October 31, 2021.

8.  Investment Transactions

The aggregate cost of purchases and proceeds from sales and maturities of investments, other than short-term obligations, for the year ended October 31, 2021 were as follows:

Fund	Purchases (non-U.S. Government Securities)		Sales (non-U.S. Government Securities)
Small Cap Value	$	2,754,359,571	$	3,792,434,947

A summary of the Fund’s transactions in the USG Select Fund for the year ended October 31, 2021 were as follows:

Fund	Type of Transaction	October 31, 2020 Shares/Fair Value		Purchases		Sales		October 31, 2021 Shares/Fair Value
Small Cap Value	Direct	$	110,411,904	$	2,248,630,175	$	2,210,015,873	$	149,026,206
Small Cap Value	Securities Lending		25,629,116		227,115,824		242,005,810		10,739,130

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.

47

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

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

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

As of October 31, 2021, the value of outstanding securities on loan and the value of collateral were as follows:

Fund	Market Value of Securities on Loan		Cash Collateral Received		Non-Cash Collateral Received		Total Collateral Received
Small Cap Value	$	69,502,259	$	10,739,130	$	60,396,177	$	71,135,307

Cash collateral is listed on the Fund’s Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in “Income derived from securities lending” on the Statement of Operations.

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

10.  Borrowing Arrangements

Effective November 12, 2020 (the “Effective Date”), the Fund, along with certain other funds managed by the Manager (“Participating Funds”), renewed 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 $150 million with interest at a rate equal to the higher of (a) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed. Each of the Participating Funds paid a proportional amount of 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 11, 2021, unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Fund’s Committed Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

On the Effective Date, the Fund, along with certain other Participating Funds managed by the Manager, also renewed 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) Overnight Bank Funding Rate (“OBFR”) daily fluctuating rate per annum equal to 1.25% plus the sum of 0.10% or (b) the Federal Funds daily fluctuating rate per annum on amounts borrowed on each outstanding loan. Each of the Participating Funds paid a proportional amount of a closing fee of $35,000 on the Effective Date. The Uncommitted Line expires November 11, 2021 unless extended by the Bank or terminated by the Participating Funds in accordance with the agreement. Effective November 11, 2021, the Fund’s Uncommitted Line was changed to a maximum of $100 million with an expiration of November 10, 2022.

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

48

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

During the year ended October 31, 2021, 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:

	R5 Class
	Year Ended October 31,
	2021						2020
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		25,272,526		$	734,344,099			39,439,761		$	716,366,582
Reinvestment of dividends		1,148,888			28,354,544			3,024,304			73,672,049
Shares redeemed		(59,776,509	)		(1,698,015,121	)		(76,877,109	)		(1,510,018,985	)
Net (decrease) in shares outstanding		(33,355,095	)	$	(935,316,478	)		(34,413,044	)	$	(719,980,354	)
	Y Class
	Year Ended October 31,
	2021						2020
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		2,973,615		$	82,535,591			3,989,719		$	73,667,583
Reinvestment of dividends		70,195			1,705,030			183,614			4,403,056
Shares redeemed		(3,488,003	)		(97,995,999	)		(6,576,100	)		(127,119,945	)
Net (decrease) in shares outstanding		(444,193	)	$	(13,755,378	)		(2,402,767	)	$	(49,049,306	)
	Investor Class
	Year Ended October 31,
	2021						2020
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		3,635,707		$	99,431,745			3,792,630		$	69,752,665
Reinvestment of dividends		95,069			2,246,481			289,400			6,757,492
Shares redeemed		(7,414,960	)		(201,618,767	)		(7,246,353	)		(133,927,076	)
Net (decrease) in shares outstanding		(3,684,184	)	$	(99,940,541	)		(3,164,323	)	$	(57,416,919	)
	Advisor Class
	Year Ended October 31,
	2021						2020
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		699,128		$	18,823,410			657,797		$	11,111,813
Reinvestment of dividends		11,670			272,037			38,598			888,909
Shares redeemed		(1,903,700	)		(50,959,777	)		(1,213,292	)		(23,166,720	)
Net (decrease) in shares outstanding		(1,192,902	)	$	(31,864,330	)		(516,897	)	$	(11,165,998	)
	A Class
	Year Ended October 31,
	2021						2020
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		684,478		$	18,647,795			848,676		$	15,605,209
Reinvestment of dividends		13,698			316,837			40,097			916,617
Shares redeemed		(1,028,767	)		(27,369,382	)		(1,316,735	)		(24,718,335	)
Net (decrease) in shares outstanding		(330,591	)	$	(8,404,750	)		(427,962	)	$	(8,196,509	)
	C Class
	Year Ended October 31,
	2021						2020
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		86,798		$	2,256,647			95,220		$	1,611,629
Reinvestment of dividends		–			–			5,705			124,090
Shares redeemed		(138,769	)		(3,584,911	)		(254,971	)		(4,363,916	)
Net (decrease) in shares outstanding		(51,971	)	$	(1,328,264	)		(154,046	)	$	(2,628,197	)

49

American Beacon Small Cap Value Fund^SM

Notes to Financial Statements

October 31, 2021

	R6 Class
	Year Ended October 31,
	2021						2020
Small Cap Value Fund	Shares			Amount			Shares			Amount
Shares sold		22,939,812		$	665,054,906			21,325,959		$	416,470,456
Reinvestment of dividends		541,665			13,362,886			1,040,693			25,340,883
Shares redeemed		(24,922,627	)		(719,162,001	)		(18,819,838	)		(368,046,785	)
Net increase (decrease) in shares outstanding		(1,441,150	)	$	(40,744,209	)		3,546,814		$	73,764,554

12.  Subsequent Events

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

50

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R5 ClassA
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	19.76		$	23.13		$	26.14		$	29.51		$	24.36
Income (loss) from investment operations:
Net investment income		0.25			0.26			0.26			0.21			0.17
Net gains (losses) on investments (both realized and unrealized)		11.40			(3.18	)		(0.25	)		(0.94	)		5.83
Total income (loss) from investment operations		11.65			(2.92	)		0.01			(0.73	)		6.00
Less distributions:
Dividends from net investment income		(0.22	)		(0.29	)		(0.18	)		(0.15	)		(0.23	)
Distributions from net realized gains		-			(0.16	)		(2.84	)		(2.49	)		(0.62	)
Total distributions		(0.22	)		(0.45	)		(3.02	)		(2.64	)		(0.85	)
Net asset value, end of period	$	31.19		$	19.76		$	23.13		$	26.14		$	29.51
Total returnB		59.26	%		(13.00	)%		2.01	%		(2.96	)%		24.80	%
Ratios and supplemental data:
Net assets, end of period	$	3,380,005,813		$	2,799,722,660		$	4,073,332,655		$	4,604,864,422		$	5,527,380,111
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.81	%		0.82	%		0.83	%		0.80	%		0.82	%
Expenses, net of reimbursements and/or recoupments		0.81	%		0.82	%		0.83	%		0.80	%		0.82	%
Net investment income, before expense reimbursements and/or recoupments		0.65	%		1.04	%		1.07	%		0.66	%		0.58	%
Net investment income, net of reimbursements and/or recoupments		0.65	%		1.04	%		1.07	%		0.66	%		0.58	%
Portfolio turnover rate		48	%		61	%		48	%		69	%		48	%

^A  Prior to February 28, 2020, the R5 Class was known as Institutional Class.

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

See accompanying notes

51

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Y Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	19.44		$	22.76		$	25.77		$	29.13		$	24.06
Income (loss) from investment operations:
Net investment income		0.16			0.22			0.26			0.17			0.12
Net gains (losses) on investments (both realized and unrealized)		11.28			(3.11	)		(0.27	)		(0.90	)		5.78
Total income (loss) from investment operations		11.44			(2.89	)		(0.01	)		(0.73	)		5.90
Less distributions:
Dividends from net investment income		(0.20	)		(0.27	)		(0.16	)		(0.14	)		(0.21	)
Distributions from net realized gains		-			(0.16	)		(2.84	)		(2.49	)		(0.62	)
Total distributions		(0.20	)		(0.43	)		(3.00	)		(2.63	)		(0.83	)
Net asset value, end of period	$	30.68		$	19.44		$	22.76		$	25.77		$	29.13
Total returnA		59.15	%		(13.06	)%		1.93	%		(3.03	)%		24.70	%
Ratios and supplemental data:
Net assets, end of period	$	255,837,301		$	170,726,299		$	254,599,477		$	342,125,601		$	379,409,116
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.89	%		0.89	%		0.90	%		0.87	%		0.90	%
Expenses, net of reimbursements and/or recoupments		0.89	%		0.89	%		0.90	%		0.87	%		0.90	%
Net investment income, before expense reimbursements and/or recoupments		0.56	%		0.96	%		1.00	%		0.59	%		0.50	%
Net investment income, net of reimbursements and/or recoupments		0.56	%		0.96	%		1.00	%		0.59	%		0.50	%
Portfolio turnover rate		48	%		61	%		48	%		69	%		48	%

^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 Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Investor Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	18.88		$	22.12		$	25.12		$	28.46		$	23.52
Income (loss) from investment operations:
Net investment income		0.20			0.21			0.22			0.11			0.11
Net gains (losses) on investments (both realized and unrealized)		10.85			(3.08	)		(0.29	)		(0.89	)		5.60
Total income (loss) from investment operations		11.05			(2.87	)		(0.07	)		(0.78	)		5.71
Less distributions:
Dividends from net investment income		(0.15	)		(0.21	)		(0.09	)		(0.07	)		(0.15	)
Distributions from net realized gains		-			(0.16	)		(2.84	)		(2.49	)		(0.62	)
Total distributions		(0.15	)		(0.37	)		(2.93	)		(2.56	)		(0.77	)
Net asset value, end of period	$	29.78		$	18.88		$	22.12		$	25.12		$	28.46
Total returnA		58.74	%		(13.30	)%		1.67	%		(3.28	)%		24.43	%
Ratios and supplemental data:
Net assets, end of period	$	367,726,622		$	302,626,954		$	424,569,237		$	538,602,473		$	660,241,571
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.15	%		1.15	%		1.14	%		1.13	%		1.12	%
Expenses, net of reimbursements and/or recoupments		1.15	%		1.15	%		1.14	%		1.13	%		1.12	%
Net investment income, before expense reimbursements and/or recoupments		0.32	%		0.70	%		0.76	%		0.33	%		0.27	%
Net investment income, net of reimbursements and/or recoupments		0.32	%		0.70	%		0.76	%		0.33	%		0.27	%
Portfolio turnover rate		48	%		61	%		48	%		69	%		48	%

^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

53

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	Advisor Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	18.60		$	21.79		$	24.77		$	28.09		$	23.22
Income (loss) from investment operations:
Net investment income		0.17			0.15			0.14			0.06			0.03
Net gains (losses) on investments (both realized and unrealized)		10.69			(3.01	)		(0.25	)		(0.88	)		5.57
Total income (loss) from investment operations		10.86			(2.86	)		(0.11	)		(0.82	)		5.60
Less distributions:
Dividends from net investment income		(0.12	)		(0.17	)		(0.03	)		(0.01	)		(0.11	)
Distributions from net realized gains		-			(0.16	)		(2.84	)		(2.49	)		(0.62	)
Total distributions		(0.12	)		(0.33	)		(2.87	)		(2.50	)		(0.73	)
Net asset value, end of period	$	29.34		$	18.60		$	21.79		$	24.77		$	28.09
Total returnA		58.56	%		(13.40	)%		1.48	%		(3.44	)%		24.26	%
Ratios and supplemental data:
Net assets, end of period	$	32,801,309		$	42,987,242		$	61,618,406		$	77,578,775		$	98,718,359
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.29	%		1.25	%		1.34	%		1.28	%		1.30	%
Expenses, net of reimbursements and/or recoupments		1.29	%		1.25	%		1.34	%		1.28	%		1.30	%
Net investment income, before expense reimbursements and/or recoupments		0.20	%		0.60	%		0.56	%		0.18	%		0.11	%
Net investment income, net of reimbursements and/or recoupments		0.20	%		0.60	%		0.56	%		0.18	%		0.11	%
Portfolio turnover rate		48	%		61	%		48	%		69	%		48	%

^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

54

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	A Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	18.47		$	21.64		$	24.65		$	27.99		$	23.14
Income (loss) from investment operations:
Net investment income		0.06			0.12			0.14			0.07			0.07
Net gains (losses) on investments (both realized and unrealized)		10.72			(2.95	)		(0.24	)		(0.86	)		5.53
Total income (loss) from investment operations		10.78			(2.83	)		(0.10	)		(0.79	)		5.60
Less distributions:
Dividends from net investment income		(0.13	)		(0.18	)		(0.07	)		(0.06	)		(0.13	)
Distributions from net realized gains		-			(0.16	)		(2.84	)		(2.49	)		(0.62	)
Total distributions		(0.13	)		(0.34	)		(2.91	)		(2.55	)		(0.75	)
Net asset value, end of period	$	29.12		$	18.47		$	21.64		$	24.65		$	27.99
Total returnA		58.57	%		(13.38	)%		1.56	%		(3.37	)%		24.36	%
Ratios and supplemental data:
Net assets, end of period	$	63,024,594		$	46,067,043		$	63,246,155		$	66,380,615		$	63,481,305
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.24	%		1.26	%		1.26	%		1.20	%		1.20	%
Expenses, net of reimbursements and/or recoupments		1.24	%		1.26	%		1.26	%		1.20	%		1.20	%
Net investment income, before expense reimbursements and/or recoupments		0.21	%		0.59	%		0.64	%		0.25	%		0.20	%
Net investment income, net of reimbursements and/or recoupments		0.21	%		0.59	%		0.64	%		0.25	%		0.20	%
Portfolio turnover rate		48	%		61	%		48	%		69	%		48	%

^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

55

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	C Class
	Year Ended October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	17.47		$	20.51		$	23.60		$	26.98		$	22.39
Income (loss) from investment operations:
Net investment (loss)		(0.22	)		(0.17	)		(0.01	)A		(0.08	)		(0.14	)
Net gains (losses) on investments (both realized and unrealized)		10.26			(2.66	)		(0.24	)		(0.81	)		5.35
Total income (loss) from investment operations		10.04			(2.83	)		(0.25	)		(0.89	)		5.21
Less distributions:
Dividends from net investment income		-			(0.05	)		-			-			-
Distributions from net realized gains		-			(0.16	)		(2.84	)		(2.49	)		(0.62	)
Total distributions		-			(0.21	)		(2.84	)		(2.49	)		(0.62	)
Net asset value, end of period	$	27.51		$	17.47		$	20.51		$	23.60		$	26.98
Total returnB		57.47	%		(14.00	)%		0.85	%		(3.89	)%		23.39	%
Ratios and supplemental data:
Net assets, end of period	$	11,261,210		$	8,057,935		$	12,619,613		$	13,480,297		$	15,335,554
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		1.95	%		1.96	%		1.95	%		1.86	%		1.96	%
Expenses, net of reimbursements and/or recoupments		1.95	%		1.96	%		1.95	%C		1.76	%		1.96	%
Net investment (loss), before expense reimbursements		(0.50	)%		(0.10	)%		(0.06	)%		(0.41	)%		(0.58	)%
Net investment (loss), net of reimbursements		(0.50	)%		(0.10	)%		(0.06	)%		(0.31	)%		(0.58	)%
Portfolio turnover rate		48	%		61	%		48	%		69	%		48	%

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

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

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

See accompanying notes

56

American Beacon Small Cap Value Fund^SM

Financial Highlights

(For a share outstanding throughout the period)

	R6 Class
	Year Ended October 31,												February 28, 2017A to October 31,
	2021			2020			2019			2018			2017
Net asset value, beginning of period	$	19.75		$	23.12		$	26.14		$	29.51		$	28.03
Income (loss) from investment operations:
Net investment income (loss)		0.19			0.22			0.26			0.22			(0.00	)B
Net gains (losses) on investments (both realized and unrealized)		11.48			(3.14	)		(0.25	)		(0.94	)		1.48
Total income (loss) from investment operations		11.67			(2.92	)		0.01			(0.72	)		1.48
Less distributions:
Dividends from net investment income		(0.23	)		(0.29	)		(0.19	)		(0.16	)		-
Distributions from net realized gains		-			(0.16	)		(2.84	)		(2.49	)		-
Total distributions		(0.23	)		(0.45	)		(3.03	)		(2.65	)		-
Net asset value, end of period	$	31.19		$	19.75		$	23.12		$	26.14		$	29.51
Total returnC		59.38	%		(12.98	)%		2.01	%		(2.93	)%		5.28	%D
Ratios and supplemental data:
Net assets, end of period	$	1,830,192,124		$	1,187,578,766		$	1,308,284,613		$	902,241,051		$	295,802,679
Ratios to average net assets:
Expenses, before reimbursements and/or recoupments		0.79	%		0.79	%		0.80	%		0.77	%		0.80	%E
Expenses, net of reimbursements and/or recoupments		0.79	%		0.79	%		0.80	%		0.77	%		0.80	%E
Net investment income (loss), before expense reimbursements		0.66	%		1.06	%		1.08	%		0.66	%		(0.04	)%E
Net investment income (loss), net of reimbursements		0.66	%		1.06	%		1.08	%		0.66	%		(0.04	)%E
Portfolio turnover rate		48	%		61	%		48	%		69	%		48	%F

^A  Commencement of operations.

^B  Amount represents less than $0.01 per share.

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

^D  Not annualized.

^E  Annualized.

^F  Portfolio turnover rate is for the period from February 28, 2017 through October 31, 2017 and is not annualized.

See accompanying notes

57

American Beacon Funds^SM

Federal Tax Information

October 31, 2021 (Unaudited)

Certain tax information regarding the Funds are required to be provided to shareholders based upon the Funds’ income and distributions for the taxable year ended October 31, 2021. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2021.

The Fund designated the following items with regard to distributions paid during the fiscal year ended October 31, 2021. All designations are based on financial information available as of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Funds to designate the maximum amount permitted under the Internal Revenue Code of 1986, as amended, and the regulations there under.

Corporate Dividends-Received Deduction:

Small Cap Value 100.00 % 

Qualified Dividend Income:

Small Cap Value 100.00 % 

Long-Term Capital Gain Distributions:

Small Cap Value $ 83,410,224

Short-Term Capital Gain Distributions:

Small Cap Value $ 0

Shareholders will receive notification in January 2022 of the applicable tax information necessary to prepare their 2021 income tax returns.

58

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

Renewal and Approval of Management Agreement and Investment Advisory Agreements

At meetings held on May 17, 2021 and June 8-9, 2021 (collectively, the “Meetings”) via videoconference, the Board of Trustees (“Board” or “Trustees”) considered and then, at its June 9, 2021 meeting, approved the renewal of: (1) the Management Agreement between American Beacon Advisors, Inc. (“Manager”) and the American Beacon Funds (“Trust”), on behalf of the American Beacon Small Cap Value Fund (“Fund”); and (2) the Investment Advisory Agreements among the Manager, the Trust, on behalf of the Fund, and each of Barrow, Hanley, Mewhinney & Strauss, LLC (“Barrow”), Brandywine Global Investment Management, LLC (“Brandywine”), Foundry Partners, LLC (“Foundry”), Hillcrest Asset Management, LLC (“Hillcrest”), Hotchkis and Wiley Capital Management, LLC (“Hotchkis”) and Mellon Investments Corp. (“Mellon”) (each, a “subadvisor” and collectively, the “subadvisors”).

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

In advance of the Meetings, the Board’s Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Fund as well as information from the Manager and the subadvisors. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board’s consideration of the Agreements, the Trustees received and evaluated such information as they deemed necessary, including the impact of the COVID-19 pandemic on the operations of the Manager and the subadvisor. This information is described below in the section summarizing the factors the Board considered in connection with its renewal and approval of the Agreements, as well as the section describing additional Board considerations with respect to the Fund.

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

A firm may not have been able to, or opted not to, provide information in response to certain information requests, in which case the Board conducted its evaluation of the firm based on information that was provided. In such cases, the Board determined that the omission of any such information was not material to its considerations.

Provided below is an overview of certain factors the Board considered in connection with its decision to approve the renewal of the Agreements. The Board did not identify any particular information that was most relevant to its consideration of whether to approve the renewal of each Agreement, and each Trustee may have afforded different weight to the various factors. Legal counsel to the independent Trustees provided the Board with a memorandum regarding its responsibilities pertaining to the renewal of investment advisory contracts, such as the Agreements, and related regulatory guidelines. Based on its evaluation, the Board unanimously concluded that the terms of each Agreement were reasonable and fair and that the approval of the renewal of each Agreement was in the best interests of the Fund and its shareholders.

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

In determining whether to approve the renewal of the Agreements, the Board considered the Fund’s investment management and subadvisory relationships separately. In each instance, the Board considered, among

59

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

other things, the following factors: (1) the nature, extent and quality of the services provided; (2) the investment performance of the Fund and the subadvisors for the Fund; (3) the costs incurred by the Manager in rendering services to the Fund and its resulting profits or losses; (4) comparisons of services and fee rates with contracts entered into by the Manager or the subadvisors or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisors from their relationships with the Fund.

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

With respect to the renewal of each Investment Advisory Agreement, the Board considered, among other factors: the level of staffing and the size of each subadvisor; the adequacy of the resources committed to the Fund by each subadvisor; the financial stability of each subadvisor; and representations made by each subadvisor regarding its compliance program. Based on the foregoing information, the Board concluded that the nature, extent and quality of the management and advisory services provided by the Manager and each subadvisor were appropriate for the Fund.

Investment Performance. The Board evaluated the comparative information provided by Broadridge and the Manager regarding the performance of the Fund, relative to its Broadridge Performance Universe, Morningstar Category, and benchmark index, as well as the Fund’s Morningstar rating. The Board considered the information provided by Broadridge regarding its independent methodology for selecting the Fund’s Broadridge Performance Universe. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by each subadvisor regarding the performance of its portion of the Fund relative to the performance of comparable investment accounts and/or a composite of comparable investment accounts managed by the subadvisor and the Fund’s benchmark index. In addition, the Board considered the Manager’s recommendation to continue to retain each subadvisor. A discussion regarding the Board’s considerations with respect to the Fund’s performance appears below under “Additional Considerations and Conclusions with Respect to the Fund.”

Costs of the Services Provided to the Fund and the Profits Realized by the Manager from its Relationship with the Fund. In analyzing the costs of services and profitability of the Manager, the Board considered the revenues earned and the expenses incurred by the Manager, before and after the payment of distribution-related expenses by the Manager. The profits or losses were noted at both an aggregate level for all funds within the group of mutual funds sponsored by the Manager (the “Fund Complex”) and at an individual Fund level, with the Manager earning a profit before and after the payment of distribution-related expenses by the Manager for the Fund. The Board also considered comparative information provided by the Manager regarding the Manager’s overall profitability with respect to the Fund Complex relative to the overall profitability of other firms in the mutual fund industry, as disclosed in publicly available sources. Although the Board noted that, in certain cases, the fee rates paid by other clients of the Manager are lower than the fee rates paid by the Fund, the Manager represented that, among other matters, the difference is attributable to the fact that the Manager does not perform administrative services for non-investment company clients and reflects the greater level of responsibility and regulatory requirements associated with managing the Fund.

The Board further considered that, with respect to the Fund, the Management Agreement provides for the Manager to receive a management fee comprised of an annualized fee that is retained by the Manager. In addition, the Board considered that the Manager receives fees for administering and overseeing the securities lending

60

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

program on behalf of the Fund. The Board also noted that certain share classes of the Fund maintain higher expense ratios in order to compensate third-party financial intermediaries.

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

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

Economies of Scale. In considering the reasonableness of the management and investment advisory fees rates, the Board considered whether economies of scale will be realized as the Fund grows and whether fee rate levels reflect these economies of scale for the benefit of Fund shareholders. In this regard, the Board considered that, with respect to each subadvisor, the Manager has negotiated breakpoints for the subadvisory fee rate schedule.

In addition, the Board noted the Manager’s representation that the Management Agreement contains fee schedule breakpoints at higher asset levels with respect to the Fund. Based on the foregoing information, the Board concluded that the Manager and subadvisor fee rate schedules for the Fund provide for a reasonable sharing of benefits from any economies of scale with the Fund.

Benefits Derived from the Relationship with the Fund. The Board considered the “fall-out” or ancillary benefits that accrue to the Manager and/or the subadvisors as a result of the advisory relationships with the Fund, including greater exposure in the marketplace with respect to the Manager’s or the subadvisors’ investment process and expanding the level of assets under management by the Manager and the subadvisors. The Board also considered that the Manager may invest the Fund’s cash balances and cash collateral provided by the borrowers of the Fund’s securities in the American Beacon U.S. Government Money Market Select Fund, which the Manager manages directly, and for which the Manger receives a fee. In addition, the Board noted that each subadvisor, except for Hillcrest, benefits from soft dollar arrangements for proprietary and/or third-party research. Based on the foregoing information, the Board concluded that the potential benefits accruing to the Manager and the subadvisors by virtue of their relationships with the Fund appear to be fair and reasonable.

Additional Considerations and Conclusions with Respect to the Fund

The performance comparisons below were made for the Fund’s R5 Class shares relative to the Fund’s Broadridge Performance Universe and Morningstar Category. With respect to the Broadridge Performance Universe, the 1^st Quintile represents the top 20 percent of the universe based on performance and the 5^th Quintile represents the bottom 20 percent of the universe based on performance. References to the Fund’s Broadridge Performance Universe are to the respective universe of mutual funds with comparable investment classifications and objectives as determined by Broadridge. The performance of individual firms was calculated by the Manager based on information provided by the Funds’ custodian.

In reviewing the performance, the Board viewed longer-term performance over a full market cycle, typically five years or longer, as the most important consideration because relative performance over shorter periods may be significantly impacted by market or economic events and not necessarily reflective of subadvisor skill.

61

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

The expense comparisons below were made for the Fund’s R5 Class shares relative to the Fund’s Broadridge Expense Universe and Broadridge Expense Group and Y Class shares relative to the Fund’s Morningstar Fee Level universe. The 1^st Quintile represents the lowest 20 percent of the universe or group based on lowest total expense, and the 5^th Quintile represents the highest 20 percent of the universe or group based on highest total expense. References to the Fund’s Expense Group and Expense Universe are to the respective group or universe of comparable mutual funds as determined by Broadridge. A Broadridge Expense Group consists of the Fund and a representative sample of funds with similar operating structures and asset sizes, as selected by Broadridge. A Broadridge Expense Universe includes all funds with a comparable investment classifications/objectives and similar operating structures to that of the share class under review for the Fund, including funds in the Broadridge Expense Group. The Broadridge expense comparisons are based on the most recent audited financial information publicly available for a Fund as of December 31, 2020. References to the Fund’s Morningstar Fee Level ranking are to the institutional share class of comparable mutual funds as determined by Morningstar.

The Board considered the Fund’s Morningstar fee level category with the 1^st Quintile representing the lowest 20 percent of the category constituents and the 5^th Quintile representing the highest 20 percent of the category in terms of total expense.

The Board also considered that, in connection with the change in the name of the Fund’s Institutional Class shares, the share class used for the Fund’s Morningstar Fee Level comparisons had changed from the R5 Class shares to the Y Class shares, which may have resulted in a less favorable Morningstar Fee Level Ranking for the Fund than in prior years.

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

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

Compared to Broadridge Expense Group	2nd Quintile
Compared to Broadridge Expense Universe	2nd Quintile
Morningstar Fee Level Ranking	2nd Quintile

Broadridge and Morningstar Performance Analysis (five-year period ended December 31, 2020)

Compared to Broadridge Performance Universe	2nd Quintile
Compared to Morningstar Category	2nd Quintile

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

Subadvisor Performance (compared to Broadridge Performance Universe for period indicated ended December 31, 2020)

Barrow (Fundamental Strategy)	5 Years	1st Quintile
Barrow (Diversified Strategy)*	5 Years	4th Quintile
Brandywine	5 Years	5th Quintile
Foundry	5 Years	3rd Quintile
Hillcrest	5 Years	4th Quintile
Hotchkis (Fundamental Strategy)	5 Years	4th Quintile
Hotchkis (Diversified Strategy)	3 Years	3rd Quintile
Mellon	5 Years	1st Quintile

* The strategy was temporarily defunded in December 2020. The performance used for December 2020 is that of a composite of accounts managed by Barrow in the same strategy, net of Barrow’s blended fee rate for the Fund.

62

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

The Board also considered: (1) information provided by each subadvisor regarding fee rates charged for managing assets in the same or a similar strategy as the subadvisor manages its allocation of the Fund; (2) the Manager’s representation that Brandywine’s process, which focuses primarily on selecting stocks with low price to earnings multiples, has been out of favor, adversely affecting both shorter-term and longer-term performance; and (3) the Manager’s recommendation to continue to retain each subadvisor.

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

Approvals Related to the American Beacon Small Cap Value Fund

At its June 8-9, 2021 meetings, the Boards of Trustees of American Beacon Funds (the “Trust”) considered the approval of a new investment advisory agreement (“New Agreement”) among American Beacon Advisors, Inc. (“Manager”), Newton Investment Management North America, LLC (“Newton”), and the Trust, on behalf of the American Beacon Small Cap Value Fund (“SCV Fund”). The Board was advised that Mellon Investments Corporation (“Mellon”), an indirect wholly-owned subsidiary of Bank of New York Mellon Corporation (“BNY Mellon”), and a sub-advisor to the SCV Fund, would be involved in a corporate reorganization (“Reorganization”), pursuant to which Newton, a newly-formed entity and also an indirect wholly-owned subsidiary of BNY Mellon, would replace Mellon as the sub-advisor to the SCV Fund.

The Board considered that Mellon had received an opinion of counsel that the Reorganization would not be deemed a change in control under the Investment Company Act of 1940, as amended (“1940 Act”), which would have resulted in the assignment and termination of the existing investment advisory agreement (“Existing Agreement”) with respect to the SCV Fund. The Board also considered that the majority of the Mellon personnel who provide services to the SCV Fund were expected to be transferred to Newton and to perform substantially the same functions after the Reorganization. Additionally, the Board considered that the Existing Agreement and New Agreement are identical except for the identity of the sub-advisor and the date. Therefore, the Board considered the information provided in connection with its review of the renewal of the Existing Agreement in determining whether to approve the New Agreement.

Based on the foregoing considerations, the Board, including a majority of Trustees who are not “interested persons” of the SCV Fund, the Manager or Newton, as that term is defined in the 1940 Act, concluded that the approval of the New Agreement was in the best interests of the SCV Fund and approved the New Agreement.

63

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 funds in the fund complex that includes the Trust, the American Beacon Select Funds, and the American Beacon Institutional Funds Trust. The Trust’s Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Eugene J. Duffy (67)**	Trustee since 2008	Managing Director, Global Investment Management Distribution, Mesirow Financial Administrative Corporation (2016-Present); Managing Director, Institutional Services, Intercontinental Real Estate Corporation (2014-2016); Trustee, American Beacon Select Funds (2008-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
NON-INTERESTED TRUSTEES	Term
	Lifetime of Trust until removal, resignation or retirement*
Gilbert G. Alvarado (51)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Joseph B. Armes (59)	Trustee since 2015	Director, Switchback Energy Acquisition (2019-2021); 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); 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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Gerard J. Arpey (63)	Trustee since 2012	Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Director, The Home Depot, Inc. (2015-Present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

64

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
NON-INTERESTED TRUSTEES (CONT.)	Term
	Lifetime of Trust until removal, resignation or retirement*
Brenda A. Cline (60)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Claudia A. Holz (64)	Trustee since 2018	Partner, KPMG LLP (1990-2017); Independent Director, Blue Owl Capital Inc. (2021-Present); Trustee, American Beacon Select Funds (2018-Present); Trustee, American Beacon Institutional Funds Trust (2018-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Douglas A. Lindgren (59)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).
Barbara J. McKenna, CFA (58)	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 (2018–2021); Trustee, American Beacon Apollo Total Return Fund (2018–2021).

65

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS	Term
	One Year
Gene L. Needles, Jr. (66)	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); Manager, President and CEO, American Private Equity Management, LLC (2012-Present); Director, Chairman, President and CEO, Alpha Quant Advisors, LLC (2016-2020); Director, ARK Investment Management LLC (2016-2020); 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); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, 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 (2015-2020); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-2021); President, American Beacon Apollo Total Return Fund (2018-2021).
Rosemary K. Behan (62)	VP, Secretary and Chief Legal Officer since 2006	Senior Vice President (2021-Present), Vice President(2006-2021), Secretary and General Counsel (2006-Present), American Beacon Advisors, Inc.; Secretary, Resolute Investment Holdings, LLC (2015-Present); Secretary, Resolute Topco, Inc. (2015-Present); Secretary, Resolute Acquisition, Inc. (2015–Present); Senior Vice President (2021-Present), Vice President(2015-2021), Secretary and General Counsel (2015-Present), Resolute Investment Managers, Inc.; Secretary, Resolute Investment Distributors, Inc. (2017-Present); Senior Vice President (2021-Present), Vice President(2017-2021), Secretary and General Counsel (2017-Present), Resolute Investment Services, Inc.; Secretary, American Private Equity Management, LLC (2008-Present); Secretary and General Counsel, Alpha Quant Advisors, LLC (2016-2020); Vice President and Secretary, Continuous Capital, LLC (2018-Present); Secretary, Green Harvest Asset Management (2019-2021); 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 (2018-2021); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-2021).

66

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Brian E. Brett (61)	VP since 2004	Senior Vice President, Head of Distribution (2012-Present), 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); 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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Paul B. Cavazos (52)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Erica Duncan (51)	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 (2018-2021); Vice President American Beacon Apollo Total Return Fund (2018-2021).
Melinda G. Heika (60)	VP since 2021 Principal Accounting Officer and Treasurer (2010-2021)	Senior Vice President (2021-Present), 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); Senior Vice President (2021-Present), Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017); Senior Vice President (2021-Present); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, American Private Equity Management, LLC (2012-Present); Treasurer and CFO, Alpha Quant Advisors, LLC (2016-2020); Treasurer and CFO, Continuous Capital, LLC (2018-Present); Treasurer, American Beacon Cayman Transformational Innovation, Ltd. (2017-2018); Treasurer, American Beacon Delaware Transformational Innovation Corporation (2017-2018); Director and Treasurer, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Treasurer, American Beacon Cayman TargetRisk Company, Ltd. (2018-Present); Vice President (2021-Present), Principal Accounting Officer (2017-2021) and Treasurer (2010-2021), American Beacon Select Funds; Vice President (2021–Present), Principal Accounting Officer and Treasurer (2017-2021), American Beacon Institutional Funds Trust; Vice President (2021), Principal Accounting Officer and Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Vice President (2021), Principal Accounting Officer and Treasurer, American Beacon Apollo Total Return Fund (2018-2021).

67

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

Name, Age	Position, Term of Office and Length of Time Served with the Trust	Principal Occupation(s) During Past 5 Years and Current Directorships
OFFICERS (CONT.)	Term
	One Year
Terri L. McKinney (57)	VP since 2010	Senior Vice President (2021-Present), Vice President (2009-2021), American Beacon Advisors, Inc.; Senior Vice President (2021–Present); Vice President (2017-2021), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2018-Present), Resolute Investment Services, Inc; Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Jeffrey K. Ringdahl (46)	VP since 2010	Director (2015-Present), President (2018-Present), Chief Operating Officer (2010-Present), Senior Vice President (2013-2018), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (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; Trustee, American Beacon NextShares Trust (2015-2020); Director, Executive Vice President & COO, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).
Samuel J. Silver (58)	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 (2018-2021); Vice President, American Beacon Apollo Total Return Fund (2018-2021).

68

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
Christina E. Sears (50)	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, Green Harvest Asset Management, LLC (2019-Present); Chief Compliance Officer, RSW Investments Holdings, LLC (2019-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Chief Compliance Officer and Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Sonia L. Bates (64)	Principal Accounting Officer and Treasurer since 2021 Assistant Treasurer (2011-2021)	Assistant Treasurer, American Beacon Advisors, Inc. (2011-2018); 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); Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2011-2021), American Beacon Select Funds; Principal Accounting Officer and Treasurer (2021-Present), Assistant Treasurer (2017-2021), American Beacon Institutional Funds Trust; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Sound Point Enhanced Income Fund; Principal Accounting Officer and Treasurer (2021), Assistant Treasurer (2018-2021), American Beacon Apollo Total Return Fund.
Shelley L. Dyson (51)	Assistant Treasurer since 2021	Assistant Treasurer, American Beacon Select Funds (2021-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2021-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Treasurer, American Beacon Apollo Total Return Fund (2021).
Shelley D. Abrahams (46)	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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Rebecca L. Harris (54)	Assistant Secretary since 2010	Senior Vice President (2021-Present), Vice President (2011-Present), American Beacon Advisors, Inc.; Senior Vice President (2021-Present), Vice President (2017-Present), Resolute Investment Managers, Inc.; Senior Vice President (2021-Present), Vice President (2015-Present), Resolute Investment Services; Vice President, Alpha Quant Advisors, LLC (2016-2020); 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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).

69

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
Teresa A. Oxford (63)	Assistant Secretary since 2015	Assistant Secretary, American Beacon Advisors, Inc. (2015-Present); Assistant Secretary, Resolute Investment Distributors (2018-2021); Assistant Secretary, Resolute Investment Managers, Inc. (2017-Present); Assistant Secretary, Resolute Investment Services (2018-Present); Assistant Secretary, Alpha Quant Advisors, LLC (2016-2020); Assistant Secretary, Continuous Capital, LLC (2020-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 (2018-2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).
Michael D. Jiang (36)	Assistant Secretary since 2021	Assistant Secretary (2021-Present), Resolute Investment Distributors, Inc.; Associate General Counsel (2021-Present), Resolute Investment Services, Inc.; Vice President (2018-2021), The Northern Trust Company; Second Vice President (2015-2018), The Northern Trust Company. Assistant Secretary, American Beacon Select Funds (2021-Present); Assistant Secretary, American Beacon Institutional Funds Trust (2021-Present); Assistant Secretary, American Beacon Sound Point Enhanced Income Fund (2021); Assistant Secretary, American Beacon Apollo Total Return Fund (2021).

* 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. Duffy is being deemed to be an “interested person” of the Trust, as defined by the Investment Company Act of 1940, as amended, by virtue of his position with Mesirow Financial, Inc., a broker-dealer.

70

American Beacon Funds^SM

Privacy Policy

October 31, 2021 (Unaudited)

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

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

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

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

• information we receive from third parties.

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

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

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72

Delivery of Documents

Shareholder reports are available online at www.americanbeaconfunds.com/reports. Please be advised that reports are no longer sent by mail. Instead, the reports are made available online, and you will be notified by mail each time a report is posted online. You will be provided with a website link to access the report. You may elect to receive all future reports in paper free of charge. You can request to continue receiving paper copies by calling 1-866-345-5954, or you may directly inform your financial intermediary. Detailed instructions are also included in your report notifications.

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 quarter. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. The Forms N-PORT may also be reviewed and copied at the SEC’s Public Reference Section, 100 F Street, NE, Washington, D.C. 20549-1520. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling (800)-SEC-0330. A complete schedule of the Fund’s portfolio holdings is also available at www.americanbeaconfunds.com approximately twenty days after the end of each month.	A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund’s Statement of Additional Information, is available free of charge on the Fund’s website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC’s website at www.sec.gov. The Fund’s proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund’s Forms N-PX are available on the SEC’s website at www.sec.gov. The Fund’s proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

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

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

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

AR 10/21

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 July 6, 2021 to remove two terminated investment companies and update the Principal Financial Officer. 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
$286,669		10/31/2020
$297,311		10/31/2021

(b) Audit Related Fees	Fiscal Year Ended
$0		10/31/2020
$0		10/31/2021

(c) Tax Fees(1)	Fiscal Year Ended
$48,125		10/31/2020
$174,247		10/31/2021

(d) All Other Fees	Fiscal Year Ended
$0		10/31/2020
$0		10/31/2021

⁽¹⁾ “Tax Fees” are the aggregate fees billed for professional services for tax advice, tax compliance, tax planning, filing assistance for EU reclaims and PFIC tax services. These fees include international, federal, state, and excise tax reviews.

(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
$ 48,125	$221,475	N/A		10/31/2020
$ 174,247	$142,936	N/A		10/31/2021

(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 DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGMENT INVESTMENT COMPANIES.

Not Applicable.

ITEM 13. EXHIBITS.

(a)(1) Filed herewith as EX-99.CODE ETH.

(a)(2) A separate certification for each principal executive officer and principal financial officer of the Trust as required by Rule 30a-2(a) under the Investment Company Act of 1940 is attached hereto as EX-99.CERT.

(a)(3) Not applicable.

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940 are attached hereto as EX-99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant): American Beacon Funds

By /s/ Gene L. Needles, Jr.

Gene L. Needles, Jr.

President

American Beacon Funds

Date: January 6, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By /s/ Gene L. Needles, Jr.

Gene L. Needles, Jr.

President

American Beacon Funds

Date: January 6, 2022

By /s/ Sonia L. Bates

Sonia L. Bates

Treasurer

American Beacon Funds

Date: January 6, 2022