American Beacon Funds

09/03/2021 | Press release | Distributed by Public on 09/03/2021 11:04

Annual/Semi-Annual Report by Investment Company (SEC Filing - N-CSR)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-4984

AMERICAN BEACON FUNDS

(Exact name of registrant as specified in charter)

220 East Las Colinas Boulevard, Suite 1200

Irving, Texas 75039

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

GENE L. NEEDLES, JR., PRESIDENT

220 East Las Colinas Boulevard, Suite 1200

Irving, Texas 75039

(Name and address of agent for service)

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

Date of fiscal year end: June 30, 2021

Date of reporting period: June 30, 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.

ARK TRANSFORMATIONAL INNOVATION FUND

Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. Companies that the sub-advisor believes are capitalizing on disruptive innovation and developing technologies to displace older technologies or create new markets may not in fact do so. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. To the extent the Fund invests more heavily in particular sectors, its performance will be sensitive to factors affecting those sectors. Information Technology sector companies may face intense competition and rapid product obsolescence, have limited product lines, markets, financial resources or personnel, and lose patent, copyright and trademark protections. Investing in Health Care sector companies involves risk due to government regulations, product litigation, competitive forces, and loss of patent protection. 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

June 30, 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 ARK Transformational Innovation Fund

9

Financial Statements

12

Notes to Financial Statements

15

Financial Highlights:

American Beacon ARK Transformational Innovation Fund

35

Federal Tax Information

41

Disclosure Regarding Approvals of the Management and Investment Advisory Agreements

42

Disclosure Regarding Liquidity Risk Management Program

46

Trustees and Officers of the American Beacon Funds

47

Privacy Policy

54

Additional Fund Information

Back Cover

President's Message

Dear Shareholders,

Throughout this reporting period, the 24-hour news cycle has continued to closely follow the COVID-19 pandemic, ongoing global vaccination efforts and the rise of the delta variant, U.S. stimulus and infrastructure spending, and the reopening of our nation's businesses and schools. After months of seclusion and uncertainty, we can finally see the proverbial light at the end of a tunnel - and a path forward to potentially brighter days - even as we learn to navigate a world facing additional virus variants.

However, during challenging times such as we've all experienced since March 2020, the fear of loss can be a powerful emotion. And it can cause many individuals to make short-term investment decisions that have the potential to sink their long-term financial objectives. We encourage you to remain

focused on achieving your long-term investment goals by working with financial professionals to develop a 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 crises. By staying the course, 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 continuing your financial journey 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

Global Equity Market Overview

June 30, 2021 (Unaudited)

For the 12-month period ended June 30, 2021, equity markets were up significantly as investors looked beyond the COVID-19 pandemic and a tumultuous U.S. presidential election cycle. A long-anticipated vaccine to combat the novel coronavirus was released in the U.S. at the end of 2020, setting up strong performance for the domestic stock market. From a fiscal standpoint, Congress passed two additional coronavirus relief bills, one in December 2020 and another in March 2021, to help support the economy. In addition, the Federal Reserve remained accommodative throughout the period under review, which helped propel markets higher. While markets were generally positive, lingering uncertainties - including an uneven vaccine rollout, virus variants with higher transmissibility, supply chain constraints and, later in the period, inflation worries - led to some global volatility. Despite all the concerns, the MSCI® All Country World Index produced a 39.26% return for the period, as developed and emerging markets saw significant market appreciation.

In the U.S., the S&P 500 Index was up 40.79% and all of its 11 sectors produced positive returns for the period. The cyclical sectors - including Financials (up 61.77%), Industrials (up 51.45%), Energy (up 49.38%) and Materials (up 48.51%) - were the strongest performers. Defensive sectors, including Utilities (up 15.77%) and Consumer Staples (up 23.29%), did not rally as much in the risk-on period. From a style perspective, Value narrowly outpaced Growth as the Russell 3000® Value Index returned 45.40% versus the Russell 3000 Growth Index return of 42.99%. In terms of market capitalization, small-cap stocks significantly outperformed their larger-capitalization peers, evidenced by the Russell 2000® Index returning 62.03% compared to the Russell 1000® Index return of 43.07%.

International developed markets also ended the period higher as the MSCI EAFE Index was up 32.35%. In Europe, the top-performing countries were Austria and Sweden, represented by the MSCI Austria Index (up 70.89%) and the MSCI Sweden Index (up 53.85%), and the lagging countries were Portugal and Switzerland, represented by the MSCI Portugal Index (up 11.43%) and the MSCI Switzerland Index (up 24.33%). In Japan, equities produced moderate returns in comparison to other regions as the MSCI Japan Index returned 24.84%.

In the developing world, emerging markets performed well overall and the MSCI Emerging Market Index returned 40.90%. However, country dispersion was high. China, the largest country constituent, was up 27.39%, represented by the MSCI China Index, while Turkish equities struggled and the MSCI Turkey Index returned -13.01%. In contrast, Taiwan and South Korea were two of the best-performing markets as the MSCI Taiwan Index returned 70.46% and the MSCI Korea Index returned 66.20%.

2

American Beacon ARK Transformational Innovation FundSM

Performance Overview

June 30, 2021 (Unaudited)

The Investor Class of the American Beacon ARK Transformational Innovation Fund (the 'Fund') returned 78.03% for the twelve months ended June 30, 2021. The Fund outperformed the S&P 500® Index (the 'Index') return of 40.79% for the same period.

Comparison of Changes in Value of a $10,000 Investment for the period 1/27/2017 through 6/30/2021

Total Returns for the Period ended June 30, 2021

Ticker

1 Year

3 Year

Since Inception
01/27/2017

Value of $10,000
01/27/2017-
06/30/2021

R5 Class (1,4,6)

ADNIX 78.67 % 42.57 % 47.55 % $ 55,852

Y Class (1,6)

ADNYX 78.48 % 42.43 % 47.40 % $ 55,602

Investor Class (1,6)

ADNPX 78.03 % 42.04 % 47.02 % $ 54,969

A Class without Sales Charge (1,2,3,6)

ADNAX 78.03 % 42.14 % 47.25 % $ 55,349

A Class with Sales Charge (1,2,3,6)

ADNAX 67.79 % 39.37 % 45.29 % $ 52,167

C Class without Sales Charge (1,2,3,6)

ADNCX 76.68 % 41.25 % 46.62 % $ 54,316

C Class with Sales Charge (1,2,3,6)

ADNCX 75.68 % 41.25 % 46.62 % $ 54,316

R6 Class (1,4,6)

ADNRX 78.36 % 42.49 % 47.49 % $ 55,754

S&P 500® Index (5)

40.79 % 18.67 % 17.46 % $ 20,371
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. 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. A portion of the fees charged to the R5, Investor and R6 Classes of the Fund has been waived since Fund inception. Performance prior to waiving fees was lower than the actual returns shown since inception. A portion of the fees charged to the Y Class of the Fund was waived from Fund inception to 2020. Performance prior to waiving fees was lower than the actual returns shown from inception to 2020. The strategy employed by the Fund's sub-advisor has the potential for more volatility than broad market averages, which may result in significant fluctuations in the Fund's short-term returns, both positive and negative.

2.

A Class shares have a maximum sales charge of 5.75%. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase. A portion of the fees charged to the A and C Classes of the Fund was waived from Fund inception to 2020. Performance prior to waiving fees was lower than the actual returns shown from inception to 2020.

3

American Beacon ARK Transformational Innovation FundSM

Performance Overview

June 30, 2021 (Unaudited)

3.

Fund performance for the three-year and since inception periods represents the total returns achieved by the Investor Class from 1/27/17 up to 1/2/19, the inception date of the A and C Classes. Expenses of the Investor Class are lower than those of the A and C Classes. As a result, total returns shown may be higher than they would have been had the A and C Classes been in existence since 1/27/17. A portion of fees charged to the Investor Class of the Fund has been waived since Investor Class inception (1/27/17). Performance prior to waiving fees was lower than actual returns shown.

4.

Fund performance for the one-year, three-year and since inception periods represents the total returns achieved by the R5 Class from 1/27/17 up to 10/28/20, the inception date of the R6 Class. Expenses of the R5 Class are higher than those of the R6 Class. As a result, total returns shown may be lower than they would have been had the R6 Class been in existence since 1/27/17. A portion of fees charged to the R5 Class of the Fund has been waived since R5 Class inception (1/27/17). Performance prior to waiving fees was lower than actual returns shown.

5.

The S&P 500® Index is an unmanaged index of common stocks publicly traded in the United States. The S&P 500 Index is a product of S&P Dow Jones Indices LLC, a division of S&P Global or its affiliates ('SPDJI') and has been licensed for use by American Beacon Advisors. Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC, a division of S&P Global ('S&P'). Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ('Dow Jones'). The American Beacon ARK Transformational Innovation Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions or interruptions of the S&P 500 Index. 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, A, C and R6 Class shares were 1.25%, 1.27%, 1.53%, 1.67%, 2.32%, and 1.24%, 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 due to security selection, while sector allocation slightly detracted from relative performance over the period. The Fund's outperformance relative to the Index was principally attributable to holdings in the Consumer Discretionary and Communication Services sectors. Within the Consumer Discretionary sector, Tesla, Inc. (up 217.2%) was the largest contributor, due in part to commencing sales of the Model Ys made in China, releasing a beta version of its 'Full Self Driving' software update, and being added as a constituent to the S&P 500 Index in December 2020.

In the Communication Services sector, the primary position adding relative value was Roku, Inc. (up 290.9%), which benefited from news that the company reached an agreement with AT&T's WarnerMedia to add HBO Max to the Roku platform, as well as purchasing all Quibi's content. On the negative side, a position in the Financials sector detracting value relative to the Index was out-of-Index LendingTree, Inc. (down 39.4%).

Sector allocation slightly detracted over the period. An overweight allocation to the Health Care sector (up 28.0%) and an underweight allocation to the Financials sector (up 61.7%) - the best performing sector within the Index - detracted from relative performance. Conversely, a null allocation to the Consumer Staples sector (up 23.3%), contributed to relative performance.

The sub-advisor will continue to focus on identifying companies best positioned for long-term exponential growth and capital appreciation created by disruptive innovation.

Top Ten Holdings (% Net Assets)
Tesla, Inc. 10.3
Roku, Inc. 6.1
Teladoc Health, Inc. 5.8
Shopify, Inc., Class A 4.2
Square, Inc., Class A 4.2
Coinbase Global, Inc., Class A 3.7
Spotify Technology SA 3.6
Twilio, Inc., Class A 3.6
Zoom Video Communications, Inc., Class A 3.6
Unity Software, Inc. 3.5
Total Fund Holdings 49

4

American Beacon ARK Transformational Innovation FundSM

Performance Overview

June 30, 2021 (Unaudited)

Industry Weightings (% of Investments)
Biotechnology 16.1
Software 15.3
Entertainment 14.4
IT Services 12.7
Automobiles 11.0
Health Care Technology 6.1
Interactive Media & Services 6.0
Capital Markets 4.0
Life Sciences Tools & Services 3.7
Hotels, Restaurants & Leisure 1.8
Road & Rail 1.5
Diversified Telecommunication Services 1.3
Technology Hardware, Storage & Peripherals 1.2
Diversified Consumer Services 1.1
Semiconductors & Semiconductor Equipment 0.9
Machinery 0.8
Electronic Equipment, Instruments & Components 0.6
Real Estate Management & Development 0.5
Pharmaceuticals 0.4
Consumer Finance 0.3
Health Care Equipment & Supplies 0.3

5

American Beacon ARK Transformational Innovation FundSM

Expense Examples

June 30, 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 January 1, 2021 through June 30, 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 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 ARK Transformational Innovation FundSM

Expense Examples

June 30, 2021 (Unaudited)

American Beacon ARK Transformational Innovation Fund
Beginning Account Value
1/1/2021
Ending Account Value
6/30/2021
Expenses Paid During
Period

1/1/2021 - 6/30/2021*
R5 Class
Actual $1,000.00 $1,041.70 $5.06
Hypothetical** $1,000.00 $1,019.84 $5.01
Y Class
Actual $1,000.00 $1,041.00 $5.52
Hypothetical** $1,000.00 $1,019.39 $5.46
Investor Class
Actual $1,000.00 $1,039.70 $6.73
Hypothetical** $1,000.00 $1,018.20 $6.66
A Class
Actual $1,000.00 $1,039.90 $6.88
Hypothetical** $1,000.00 $1,018.05 $6.81
C Class
Actual $1,000.00 $1,035.80 $10.65
Hypothetical** $1,000.00 $1,014.33 $10.54
R6 Class
Actual $1,000.00 $1,042.00 $4.81
Hypothetical** $1,000.00 $1,020.08 $4.76
*

Expenses are equal to the Fund's annualized expense ratios for the six-month period of 1.00%, 1.09%, 1.33%, 1.36%, 2.11%, and 0.95% for the R5, Y, Investor, 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 (181) by days in the year (365) to reflect the half-year period.

**

5% return before expenses.

7

American Beacon ARK Transformational Innovation FundSM

Report of Independent Registered Public Accounting Firm

TotheBoard of Trustees of American BeaconFunds and Shareholders of American Beacon ARK Transformational Innovation Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of American Beacon ARK Transformational Innovation Fund (one of the series constituting American Beacon Funds, referred to hereafter as the 'Fund') as of June 30, 2021, the related statement of operationsfor the year ended June 30, 2021, the statement of changes in net assets for each of the two years in the period ended June 30, 2021, including the related notes,and the financial highlights for each periods indicated therein (collectively referred to as the 'financial statements'). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of June 30, 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 ended June 30, 2021 and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

We conducted our audit of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit 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 audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of June 30, 2021 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audit provides a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP

Boston, MA

August 26, 2021

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

8

American Beacon ARK Transformational Innovation FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
COMMON STOCKS - 93.85%
Communication Services - 20.38%
Diversified Telecommunication Services - 1.21%
Iridium Communications, Inc.A 366,285 $ 14,647,737
Entertainment - 13.52%
Nintendo Co. Ltd., ADR 181,521 13,165,718
Roku, Inc.A 162,279 74,526,631
Sea Ltd., ADRA 66,317 18,210,648
Skillz, Inc.A 683,174 14,838,539
Spotify Technology SAA 157,633 43,442,079
164,183,615
Interactive Media & Services - 5.65%
Tencent Holdings Ltd., ADRB 136,621 10,287,561
Twitter, Inc.A 313,503 21,572,142
Zillow Group, Inc., Class CA 301,247 36,818,408
68,678,111

Total Communication Services

247,509,463
Consumer Discretionary - 13.01%
Automobiles - 10.34%
Tesla, Inc.A 184,673 125,522,238
Diversified Consumer Services - 0.99%
2U, Inc.A B 289,172 12,049,797
Hotels, Restaurants & Leisure - 1.68%
DraftKings, Inc., Class AA B 392,270 20,464,726

Total Consumer Discretionary

158,036,761
Financials - 4.05%
Capital Markets - 3.78%
Coinbase Global, Inc., Class AA 177,683 45,007,104
Intercontinental Exchange, Inc. 7,249 860,456
45,867,560
Consumer Finance - 0.27%
LendingClub Corp.A 183,369 3,324,480

Total Financials

49,192,040
Health Care - 24.97%
Biotechnology - 15.08%
CRISPR Therapeutics AGA 229,798 37,201,998
Editas Medicine, Inc.A B 229,979 13,026,010
Exact Sciences Corp.A 264,277 32,852,274
Intellia Therapeutics, Inc.A 158,149 25,605,905
Invitae Corp.A B 954,549 32,196,938
Iovance Biotherapeutics, Inc.A 521,169 13,560,817
Organovo Holdings, Inc.A B 3,528 33,163
Seres Therapeutics, Inc.A 288,596 6,883,015
Twist Bioscience Corp.A 110,896 14,776,892
Veracyte, Inc.A 175,855 7,030,683
183,167,695

See accompanying notes

9

American Beacon ARK Transformational Innovation FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
COMMON STOCKS - 93.85% (continued)
Health Care - 24.97% (continued)
Health Care Equipment & Supplies - 0.30%
Cerus Corp.A 616,222 $ 3,641,872
Health Care Technology - 5.77%
Teladoc Health, Inc.A B 421,186 70,039,020
Life Sciences Tools & Services - 3.48%
10X Genomics, Inc., Class AA 121,255 23,744,154
Compugen Ltd.A B 219,844 1,820,309
NanoString Technologies, Inc.A 92,771 6,010,633
Pacific Biosciences of California, Inc.A 304,665 10,654,135
42,229,231
Pharmaceuticals - 0.34%
Novartis AG, ADR 45,229 4,126,694

Total Health Care

303,204,512
Industrials - 2.12%
Machinery - 0.76%
Proto Labs, Inc.A 100,465 9,222,687
Road & Rail - 1.36%
TuSimple Holdings, Inc., Class AA 231,897 16,520,343

Total Industrials

25,743,030
Information Technology - 28.81%
Electronic Equipment, Instruments & Components - 0.56%
Trimble, Inc.A 83,419 6,826,177
IT Services - 11.94%
Shopify, Inc., Class AA 34,798 50,839,182
Square, Inc., Class AA 207,020 50,471,476
Twilio, Inc., Class AA 110,732 43,646,125
144,956,783
Semiconductors & Semiconductor Equipment - 0.87%
Teradyne, Inc. 78,742 10,548,278
Software - 14.34%
DocuSign, Inc.A 95,637 26,737,236
Materialise NV, ADRA 75,126 1,809,785
PagerDuty, Inc.A 270,104 11,501,028
Palantir Technologies, Inc., Class AA 1,067,170 28,130,601
UiPath, Inc., Class AA 295,034 20,041,660
Unity Software, Inc.A 384,599 42,240,508
Zoom Video Communications, Inc., Class AA 112,751 43,638,020
174,098,838
Technology Hardware, Storage & Peripherals - 1.10%
Pure Storage, Inc., Class AA 412,839 8,062,746
Stratasys Ltd.A 205,628 5,317,540
13,380,286

Total Information Technology

349,810,362

See accompanying notes

10

American Beacon ARK Transformational Innovation FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
COMMON STOCKS - 93.85% (continued)
Real Estate - 0.51%
Real Estate Management & Development - 0.51%
KE Holdings, Inc., ADRA 130,578 $ 6,225,959

Total Common Stocks (Cost $824,350,560)

1,139,722,127
SHORT-TERM INVESTMENTS - 5.49% (Cost $66,715,694)
Investment Companies - 5.49%
American Beacon U.S. Government Money Market Select Fund, 0.01%C D 66,715,694 66,715,694
SECURITIES LENDING COLLATERAL - 0.06% (Cost $700,964)
Investment Companies - 0.06%
American Beacon U.S. Government Money Market Select Fund, 0.01%C D 700,964 700,964

TOTAL INVESTMENTS - 99.40% (Cost $891,767,218)

1,207,138,785

OTHER ASSETS, NET OF LIABILITIES - 0.60%

7,234,878

TOTAL NET ASSETS - 100.00%

$ 1,214,373,663
Percentages are stated as a percent of net assets.

ANon-income producing security.

B All or a portion of this security is on loan, collateralized by either cash and/or U.S. Treasuries, at June 30, 2021 (Note 8).

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

D7-day yield.

ADR - American Depositary Receipt.

The Fund's investments are summarized by level based on the inputs used to determine their values. As of June 30, 2021, the investments were classified as described below:

ARK Transformational Innovation Fund

Level 1 Level 2 Level 3 Total

Assets

Common Stocks

$ 1,139,722,127 $ - $ - $ 1,139,722,127

Short-Term Investments

66,715,694 - - 66,715,694

Securities Lending Collateral

700,964 - - 700,964

Total Investments in Securities - Assets

$ 1,207,138,785 $ - $ - $ 1,207,138,785

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended June 30, 2021, there were no transfers into or out of Level 3.

See accompanying notes

11

American Beacon ARK Transformational Innovation FundSM

Statement of Assets and Liabilities

June 30, 2021

Assets:

Investments in unaffiliated securities, at fair value §

$ 1,139,722,127

Investments in affiliated securities, at fair value

67,416,658

Dividends and interest receivable

123

Receivable for fund shares sold

12,272,416

Receivable for tax reclaims

100,054

Receivable for expense reimbursement (Note 2)

92,173

Prepaid expenses

104,142

Total assets

1,219,707,693

Liabilities:

Payable for investments purchased

2,429,182

Payable for fund shares redeemed

1,012,237

Management and sub-advisory fees payable (Note 2)

784,038

Service fees payable (Note 2)

149,523

Transfer agent fees payable (Note 2)

62,106

Payable upon return of securities loaned (Note 8)§

700,964

Custody and fund accounting fees payable

53,352

Professional fees payable

74,216

Trustee fees payable (Note 2)

867

Payable for prospectus and shareholder reports

39,695

Other liabilities

27,850

Total liabilities

5,334,030

Net assets

$ 1,214,373,663

Analysis of net assets:

Paid-in-capital

$ 793,402,293

Total distributable earnings (deficits)A

420,971,370

Net assets

$ 1,214,373,663

Shares outstanding at no par value (unlimited shares authorized):

R5 Class

347,581

Y Class

15,158,196

Investor Class

6,898,221

A Class

1,741,611

C Class

952,033

R6 ClassB

46,610

Net assets:

R5 Class

$ 16,943,552

Y Class

$ 735,669,845

Investor Class

$ 331,002,394

A Class

$ 83,589,357

C Class

$ 44,900,174

R6 ClassB

$ 2,268,341

Net asset value, offering and redemption price per share:

R5 Class

$ 48.75

Y Class

$ 48.53

Investor Class

$ 47.98

A Class

$ 48.00

A Class (offering price)

$ 50.93

C Class

$ 47.16

R6 ClassB

$ 48.67

Cost of investments in unaffiliated securities

$ 824,350,560

Cost of investments in affiliated securities

$ 67,416,658

§ Fair value of securities on loan

$ 37,098,963
A The Fund's investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.
B The R6 Class became effective on October 28, 2020 and commenced operations on October 29, 2020 (Note 1).

See accompanying notes

12

American Beacon ARK Transformational Innovation FundSM

Statement of Operations

For the year ended June 30, 2021

Investment income:

Dividend income from unaffiliated securities (net of foreign taxes)

$ 863,127 A

Dividend income from affiliated securities (Note 2)

3,713

Income derived from securities lending (Note 8)

668,924

Total investment income

1,535,764

Expenses:

Management and sub-advisory fees (Note 2)

8,495,443

Transfer agent fees:

R5 Class (Note 2)

5,364

Y Class (Note 2)

542,034

Investor Class

12,887

A Class

2,071

C Class

1,192

R6 ClassB

2,302

Custody and fund accounting fees

108,351

Professional fees

119,012

Registration fees and expenses

213,020

Service fees (Note 2):

Investor Class

995,109

A Class

49,073

C Class

30,316

Distribution fees (Note 2):

A Class

150,768

C Class

330,237

Prospectus and shareholder report expenses

133,285

Trustee fees (Note 2)

66,748

Loan expense (Note 9)

5,751

Other expenses

263,908

Total expenses

11,526,871

Net fees waived and expenses (reimbursed) (Note 2)

(213,923 )

Net expenses

11,312,948

Net investment (loss)

(9,777,184 )

Realized and unrealized gain from investments:

Net realized gain from:

Investments in unaffiliated securitiesC

118,406,396

Change in net unrealized appreciation of:

Investments in unaffiliated securitiesD

231,272,171

Foreign currency transactions

31

Net gain from investments

349,678,598

Net increase in net assets resulting from operations

$ 339,901,414

Foreign taxes

$ 101,326

A Includes significant dividends of $323,278.

B The R6 Class became effective on October 28, 2020 and commenced operations on October 29, 2020 (Note 1).

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

13

American Beacon ARK Transformational Innovation FundSM

Statement of Changes in Net Assets

Year Ended
June 30, 2021
Year Ended
June 30, 2020

Increase (decrease) in net assets:

Operations:

Net investment (loss)

$ (9,777,184 ) $ (1,024,575 )

Net realized gain from investments in unaffiliated securities

118,406,396 3,476,892

Change in net unrealized appreciation of investments in unaffiliated securities and foreign currency transactions

231,272,202 79,013,995

Net increase in net assets resulting from operations

339,901,414 81,466,312

Distributions to shareholders:

Total retained earnings:

R5 Class

(93,934 ) (134,305 )

Y Class

(2,937,105 ) (1,391,035 )

Investor Class

(1,190,082 ) (319,336 )

A Class

(224,521 ) (205,755 )

C Class

(127,606 ) (94,357 )

R6 ClassA

(7,017 ) -

Net distributions to shareholders

(4,580,265 ) (2,144,788 )

Capital share transactions (Note 10):

Proceeds from sales of shares

1,302,358,978 262,403,322

Reinvestment of dividends and distributions

4,551,536 2,143,123

Cost of shares redeemed

(764,674,529 ) (57,256,735 )

Net increase in net assets from capital share transactions

542,235,985 207,289,710

Net increase in net assets

877,557,134 286,611,234

Net assets:

Beginning of period

336,816,529 50,205,295

End of period

$ 1,214,373,663 $ 336,816,529
A The R6 Class became effective on October 28, 2020 and commenced operations on October 29, 2020 (Note 1).

See accompanying notes

14

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 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 non-diversified,open-end management investment company. As of June 30, 2021, the Trust consists of twenty-eight active series, one of which is presented in this filing: American Beacon ARK Transformational Innovation 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 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 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

On October 28, 2020, The Fund created the R6 Class, a new class made available for sale to provide third party intermediaries an investment option for large 401(K) plans that does not charge Rule 12b-1 or sub-transfer agency fees pursuant to the Fund's registration statement filed with the SEC.

15

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

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
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. 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 Fund's Statement of Operations.

16

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

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.

Allocation of Income, Trust Expenses, Gains, and Losses

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

Use of Estimates

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

Other

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

2. Transactions with Affiliates

Management and Investment Sub-Advisory Agreements

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

First $5 billion

0.35 %

Next $5 billion

0.325 %

Next $10 billion

0.30 %

Over $20 billion

0.275 %

17

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

The Trust, on behalf of the Fund, and the Manager have entered into an Investment Advisory Agreement with ARK Investment Management LLC (the 'Sub-Advisor') pursuant to which the Fund has agreed to pay an annualized sub-advisory fee that is calculated and accrued daily based on the Fund's average daily net assets according to the following schedule:

First $5 billion

0.55 %

Next $5 billion

0.525 %

Next $10 billion

0.50 %

Over $20 billion

0.475 %

The Management and Sub-Advisory Fees paid by the Fund for the year ended June 30, 2021 were as follows:

Effective Fee Rate Amount of Fees Paid

Management Fees

0.35 % $ 3,338,712

Sub-Advisor Fees

0.55 % 5,156,731

Total

0.90 % $ 8,495,443

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 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 Statement of Operations. During the year ended June 30, 2021, the Manager received securities lending fees of $120,723 for the securities lending activities of the Fund.

Distribution Plans

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

Separate Distribution Plans (the 'Distribution Plans') have been adopted pursuant to Rule 12b-1 under the Act for the 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 A Class and 1.00% of the average daily net assets of the C Class. The fee will be payable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular month by the 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, 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, and up to 0.375% of the average daily net assets of the Investor Class of the Fund.

18

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 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 June 30, 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

ARK Transformational Innovation

$ 504,815

As of June 30, 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

ARK Transformational Innovation

$ 45,728

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 a June 30, 2021 fair value and dividend income earned from the investment in the USG Select Fund.

Affiliated Security

Type of
Transaction
Fund June 30,
2021
Shares/

Principal
Change in
Unrealized
Gain (Loss)
Realized
Gain
(Loss)
Dividend
Income
June 30,
2021
Fair Value
U.S. Government Money Market Select Direct ARK
Transformational
Innovation
$ 66,715,694 $ - $ - $ 3,713 $ 66,715,694
U.S. Government Money Market Select Securities Lending ARK
Transformational
Innovation
700,964 - - N/A 700,964

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 June 30, 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

ARK Transformational Innovation

$ 39,846 $ 22,569 $ 62,415

19

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

Interfund Credit Facility

Pursuant to an exemptive order issued by the SEC, the Fund, along with other registered investment companies having management contracts with the Manager, may participate in a credit facility whereby each fund, under certain conditions, is permitted to lend money directly to and borrow directly from other participating funds for temporary purposes. The interfund credit facility is advantageous to the funds because it provides added liquidity and eliminates the need to maintain higher cash balances to meet redemptions. This situation could arise when shareholder redemptions exceed anticipated volumes and certain funds have insufficient cash on hand to satisfy such redemptions or when sales of securities do not settle as expected, resulting in a cash shortfall for a fund. When a fund liquidates portfolio securities to meet redemption requests, they often do not receive payment in settlement for up to two days (or longer for certain foreign transactions). Redemption requests normally are satisfied on the next business day. The credit facility provides a source of immediate, short-term liquidity pending settlement of the sale of portfolio securities. The credit facility is administered by a credit facility team consisting of professionals from the Manager's asset management, compliance, and accounting areas who report the activities of the credit facility to the Board. During the year ended June 30, 2021, the Fund borrowed on average $45,061,378 for 2 days at an average interest rate of 0.82% with interest charges of $2,025. These amounts are recorded as 'Other expenses' in the Statement of Operations.

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Fund to the extent that total operating expenses exceed the Fund's expense cap. During the year ended June 30, 2021, the Manager waived and/or reimbursed expenses as follows:

Expense Cap Expiration of
Reimbursed
Expenses

Fund

Class 7/1/2020 -
10/31/2020
11/1/2020 -
6/30/2021
Reimbursed
Expenses
(Recouped)
Expenses

ARK Transformational Innovation

R5 0.99 % 0.99 % $ 4,685 $ (1,052 )** 2023-2024

ARK Transformational Innovation

Y 1.09 % 1.08 % 94,084 (124,789 )** 2023-2024

ARK Transformational Innovation

Investor 1.37 % 1.32 % 112,433 (28,700 )** 2023-2024

ARK Transformational Innovation

A 1.39 % 1.39 % - (41,758 )** 2023-2024

ARK Transformational Innovation

C 2.14 % 2.12 % - (12,229 )** 2023-2024

ARK Transformational Innovation

R6* N/A 0.94 % 2,721 (834 ) 2023-2024

* Class launched on October 28, 2020 and commenced operations on October 29, 2020 (Note 1).

** Of these amounts, $197,274 represents Recouped Expenses from prior fiscal years and is reflected in Total Expenses on the Statements of Operations.

Of these amounts, $92,173 was disclosed as a Receivable for Expense Reimbursement on the Statement of Assets and Liabilities at June 30, 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

ARK Transformational Innovation

$ 154,542 $ - $ 308,365 2020-2021

ARK Transformational Innovation

13,280 239,360 - 2021-2022

ARK Transformational Innovation

29,452 139,297 - 2022-2023

20

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

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 June 30, 2021, RID collected $220,374 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 June 30, 2021, fees of $36 were collected for Class A Shares of the Fund.

A CDSC of 1.00% will be deducted with respect to Class C Shares redeemed within 12 months of purchase, unless waived as discussed in the Fund's Prospectus. Any applicable CDSC will be 1.00% of the lesser of the original purchase price or the value of the redemption of the Class C Shares redeemed. During the year ended June 30, 2021, CDSC fees of $21,349 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 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 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.

21

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

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

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

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

The Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund's pricing time of 4:00 p.m. ET. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. If the Manager determines that the last quoted prices of non-U.S. securities will, in its judgment, materially affect the value of some or all its portfolio securities, the Manager can adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of the close of the Exchange. In deciding whether it is necessary to adjust closing prices to reflect fair value, the Manager reviews a variety of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. These securities are fair valued using a pricing service, using methods approved by the Board, that considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant American Depositary Receipts ('ADRs') and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. The Fund uses outside pricing services to provide closing prices and information to evaluate and/or adjust those prices. As a means of evaluating its security valuation process, the Valuation Committee routinely compares closing prices, the next day's opening prices in the same markets and adjusted prices.

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

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American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

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, and financial derivative instruments, such as futures contracts or options that are traded on a national securities exchange, are stated at the last reported sale or settlement price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. 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.

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

The Fund may invest in securities issued by foreign companies through ADR and U.S. dollar-denominated foreign stocks traded on U.S. exchanges. These securities are subject to many of the risks inherent in investing in foreign securities, including, but not limited to, currency fluctuations and political and financial instability in the home country of a particular ADR or foreign stock. 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

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Notes to Financial Statements

June 30, 2021

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 securities.

Foreign Securities

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

Real Estate Investment Trusts ('REITs')

Real Estate Investment Trusts (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.

Other Investment Company Securities and Other Exchange-Traded Products

The Fund at times may invest in shares of other investment companies, including money market funds and ETFs. The Fund may invest in securities of an investment company advised by the Manager or 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 this Prospectus. Investment in other investment companies may involve the payment of substantial premiums above the value of such issuer's portfolio securities.

The Fund 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 Fund could invest in money market funds rather than purchasing individual short-term investments. If the Fund invests in money market funds, shareholders will bear their proportionate share of the expenses, including for example, advisory and administrative fees, of the money market funds in which the Fund invests, including advisory fees charged by the Manager to any applicable money market funds advised by the Manager.

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Notes to Financial Statements

June 30, 2021

5. Principal Risks

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

Asset Selection Risk

Assets selected by the sub-advisor or the Manager for the Fund may not perform to expectations. The portfolio manager's judgments about the attractiveness, value and potential performance of a particular asset class or individual security may be incorrect, and there is no guarantee that individual securities will perform as anticipated. Additionally, asset classes tend to go through cycles of outperformance and underperformance in comparison to each other and to the general securities markets. The investment models used to manage the Fund may rely in part on data derived from third parties and may not perform as intended. This could result in the Fund's underperformance compared to other funds with similar investment objectives.

Currency Risk

The Fund may have exposure, directly or indirectly, to foreign currencies by using various instruments. Foreign currencies may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, may be affected unpredictably by intervention, or the failure to intervene, of the U.S. or foreign governments, central banks, or supranational entities such as the International Monetary Fund, and may be affected by the imposition of currency controls or political developments in the U.S. or abroad. As a result, the Fund's exposure to foreign currencies either directly or through portfolio investments, may reduce the returns of the Fund. Foreign currencies may decline in value relative to the U.S. dollar and other currencies and thereby affect the Fund's investments in securities that trade in and receive revenues in non-U.S. currencies, or in derivatives that provide exposure to non-U.S.currencies. In addition, changes in currency exchange rates could adversely impact investment gains or add to investment losses.

Equity Investments Risk

Equity securities are subject to investment and market risk. The Fund's investments in equity securities may include common stocks. Investing in such securities 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.

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) greater volatility, (6) different government regulation and supervision of foreign stock exchanges, brokers and listed companies, and (7) delays in transaction settlement in some foreign markets. To the extent the Fund invests a significant portion of its assets in securities of a single country or region, it is more likely to be affected by events or conditions of that country or region. The Fund's investment in a foreign issuer may subject the Fund to regulatory, political, currency, security, economic and other risks associated with that country. Global economic and financial markets are becoming increasingly interconnected and conditions (including recent volatility and instability) and events (including natural disasters) in one country, region or financial market may adversely impact issuers in a different country, region or financial market. 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

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Notes to Financial Statements

June 30, 2021

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.

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 a Fund to experience a loss or difficulty in selling investments to meet redemption requests by shareholders and may increase a Funds' portfolio turnover, which will increase the costs that a Fund incurs and lower a Funds' 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

26

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

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.

Non-Diversification Risk

When a Fund is non-diversified, it may invest a high percentage of its assets in a limited number of issuers. When a Fund invests in a relatively small number of issuers, it may be more susceptible to risks associated with a single economic, political or regulatory occurrence than a more diversified portfolio might be. Some of those issuers also may present substantial credit or other risks. When a Fund is non-diversified, its NAV and total return may also fluctuate more or be subject to declines in weaker markets than a diversified mutual fund. Investments in securities of a limited number of issuers exposes a Fund to greater market risk, price volatility and potential losses than if assets were diversified among the securities of a greater number of issuers.

Other Investment Companies Risk

To the extent that a Fund invests in shares of other registered investment companies, a Fund will indirectly bear the fees and expenses, including, for example, advisory and administrative fees, charged by those investment companies in addition to a Fund's direct fees and expenses. If a Fund invests in other investment companies, a Fund 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 a Fund's shareholders when distributed to them. A 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 a Fund's investment may decline, adversely affecting a Fund's performance. To the extent a Fund invests in other investment companies that invest in equity securities, fixed-income securities and/or foreign securities, or that track an index, a 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. The impact of the outbreak has been rapidly evolving, and the transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, supply chains and customer activity, widespread business closures and layoffs, travel restrictions, closed international, national and local borders, enhanced health screenings at ports of entry and elsewhere, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event cancellations, reductions and other changes, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. Markets generally have also been adversely impacted by reduced demand for oil and other energy commodities as a result of the slowdown in economic activity resulting from the spread of COVID-19 and by price competition among key oil producing companies. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty and further developments could result in additional disruptions and uncertainty. These impacts have caused significant volatility in global financial markets, which have caused and may continue to cause losses for investors. 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 has taken numerous measures to address the economic impact of the COVID-19 pandemic, such as the reduction of the federal funds target rate and the introduction of several credit and liquidity facilities, and the U.S. federal government has taken steps to stimulate the U.S. economy, including adopting stimulus packages targeted at large parts of the economy. The ultimate effects of these and other efforts that may be taken may not be known for some time, and it is not known whether and to what extent they will be successful.

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Notes to Financial Statements

June 30, 2021

In addition, COVID-19 has caused and may continue to cause employees and vendors at various businesses, including the Manager and other service providers, to work at external locations, and could cause extensive medical absences. Not all events that could affect the business of the Manager, or other service providers can be determined and addressed in advance. The impact of COVID-19 and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. Deteriorating economic fundamentals may in turn increase the risk of default or insolvency of particular issuers, negatively impact market value, increase market volatility, cause credit spreads to widen, and reduce liquidity. The impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets. The Federal Reserve has signaled that it plans to maintain its interventions at an elevated level. Amid the Federal Reserve's ongoing efforts, concerns about the markets' dependence on the Federal Reserve's provision of liquidity have grown. The U.S. government has reduced the federal corporate income tax rate, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the market's expectations for changes in government policies are not borne out. 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 January 31, 2020, commonly referred to as 'Brexit,' and trade agreement negotiations during the transition period, 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 global economic powers or 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. Interest rates have been unusually low in recent years in the U.S. and abroad and are currently at historic lows. The impact of Brexit is not yet known. The effect on the United Kingdom's economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are currently being negotiated. The outcome of Brexit may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time, which could significantly adversely affect the value of a Fund's investments in the United Kingdom and Europe.

Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Impacts from climate change may include significant risks to global financial assets and economic growth. A rise in sea levels, an increase in powerful windstorms and/or a climate-driven increase in sea levels or flooding could cause coastal properties to lose value or become unmarketable altogether. 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. Regulatory changes and divestment movements tied to concerns about climate change could adversely affect the value of certain land and the viability of industries whose activities or products are seen as accelerating climate change. These losses could adversely affect, among others, corporate issuers and mortgage lenders, the value of mortgage-backed securities, the bonds of municipalities that depend on tax or other revenues and tourist dollars generated by affected properties, and insurers of the property and/or of corporate, municipal or mortgage-backed securities.

Sector Risk

The Fund's investing approach may dictate an emphasis on certain sectors or sub-sectors of the market at any given time. To the extent the Fund invests more heavily in one particular sector, industry, or sub-sector of the

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American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

market, it thereby presents a more concentrated risk and its performance will be especially sensitive to developments that significantly affect those sectors or sub-sectors. In addition, the value of the Fund's shares may change at different rates than to the value of shares of another fund that invests in a more diversified mix of sectors and industries. An individual sector, industry, or sub-sector of the market may have above-average performance during particular periods, but may also move up and down more than the broader market. The industries that constitute a sector may all react in the same way to economic, political or regulatory events. The Fund's performance could also be affected if the sectors, industries, or sub-sectors do not perform as expected. Because the Fund may hold a limited number of securities, it may at times be substantially over-weighted in certain economic sectors and underweighted in others. Accordingly, the Fund's performance is likely to be disproportionately affected by the factors influencing the sectors in which it is substantially over-weighted. Alternatively, the lack of exposure to one or more sectors or industries 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.

Securities Lending Risk

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

Offsetting Assets and Liabilities

The Fund is a party to enforceable master netting agreements between brokers and counterparties which provide for the right to offset under certain circumstances. The Fund employs multiple money managers and

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American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

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, June 30, 2021.

Remaining Contractual Maturity of the Agreements
As of June 30, 2021
Overnight and
Continuous
<30 days Between
30 & 90 days
>90 days Total

Securities Lending Transactions

Common Stocks

$ 700,964 $ - $ - $ - $ 700,964

Total Borrowings

$ 700,964 $ - $ - $ - $ 700,964

Gross amount of recognized liabilities for securities lending transactions

$ 700,964

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 June 30, 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.

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American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

The tax character of distributions paid were as follows:

Year Ended
June 30, 2021
Year Ended
June 30, 2020

Distributions paid from:

Ordinary income*

R5 Class

$ 60,537 $ 41,867

Y Class

1,833,465 433,634

Investor Class

653,913 99,548

A Class

110,132 64,141

C Class

62,262 26,402

R6 Class**

4,449 -

Long-term capital gains

R5 Class

33,397 92,438

Y Class

1,103,640 957,401

Investor Class

536,169 219,788

A Class

114,389 141,614

C Class

65,344 67,955

R6 Class**

2,568 -

Total distributions paid

4,580,265 $ 2,144,788

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

** Class launched on October 28, 2020 and commenced operations on October 29, 2020 (Note 1).

As of June 30, 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)

ARK Transformational Innovation

$ 921,048,629 $ 313,539,275 $ (27,449,084 ) $ 286,090,191

Fund

Net Unrealized
Appreciation
(Depreciation)
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital Gains
Accumulated
Capital and
Other (Losses)
Other Temporary
Differences
Distributable
Earnings

ARK Transformational Innovation

$ 286,090,191 $ 54,698,363 $ 80,182,816 $ - $ - $ 420,971,370

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 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 Statement of Assets and Liabilities.

As of June 30, 2021, the Fund did not have any permanent differences.

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

As of June 30, 2021, the Fund did not have any capital loss carryforwards.

31

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

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 June 30, 2021 were as follows:

Fund

Purchases (non-U.S.
Government Securities)
Sales (non-U.S.
Government Securities)
ARK Transformational Innovation $ 1,012,069,198 $ 539,184,325

A summary of the Fund's transactions in the USG Select Fund for the year ended June 30, 2021 were as follows:

Fund

Type of
Transaction
June 30,
2020
Shares/Fair
Value
Purchases Sales June 30,
2021
Shares/Fair
Value
ARK Transformational Innovation Direct $ 16,973,816 $ 628,026,634 $ 578,284,756 $ 66,715,694
ARK Transformational Innovation Securities Lending 12,077,937 400,120,545 411,497,518 700,964

8. Securities Lending

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

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

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

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

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

32

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

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 June 30, 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
ARK Transformational Innovation $37,098,963 $ 700,964 $ 36,079,654 $ 36,780,618

Cash collateral is listed on the Fund's Schedule of Investments and is shown on the Statement of Assets and Liabilities. Income earned on these investments is included in 'Income derived from securities lending' on the Statement of Operations.

Non-cash collateral received by the Fund may not be sold or re-pledged except to satisfy a borrower default. Therefore, non-cash collateral is not included on the Fund's Schedule of Investments or Statement of Assets and Liabilities.

9. Borrowing Arrangements

Effective November 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.

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.

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 June 30, 2021, the Fund did not utilize this facility.

33

American Beacon ARK Transformational Innovation FundSM

Notes to Financial Statements

June 30, 2021

10. Capital Share Transactions

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

R5 Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

ARK Transformational Innovation Fund

Shares

Amount

Shares

Amount

Shares sold 229,607 $ 9,277,755 211,399 $ 4,119,685
Reinvestment of dividends 1,904 93,934 7,013 134,305
Shares redeemed (191,815 ) (9,142,558 ) (54,426 ) (1,119,434 )
Net increase in shares outstanding 39,696 $ 229,131 163,986 $ 3,134,556
Y Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

ARK Transformational Innovation Fund

Shares

Amount

Shares

Amount

Shares sold 16,983,545 $ 724,710,182 7,882,726 $ 165,768,592
Reinvestment of dividends 59,257 2,912,490 72,789 1,389,552
Shares redeemed (9,959,892 ) (424,799,825 ) (1,650,988 ) (33,215,198 )
Net increase in shares outstanding 7,082,910 $ 302,822,847 6,304,527 $ 133,942,946
Investor Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

ARK Transformational Innovation Fund

Shares

Amount

Shares

Amount

Shares sold 11,229,000 $ 481,470,792 2,976,316 $ 65,972,944
Reinvestment of dividends 24,411 1,187,583 16,860 319,154
Shares redeemed (6,921,933 ) (298,851,937 ) (932,039 ) (19,565,829 )
Net increase in shares outstanding 4,331,478 $ 183,806,438 2,061,137 $ 46,726,269
A Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

ARK Transformational Innovation Fund

Shares

Amount

Shares

Amount

Shares sold 1,387,839 $ 59,088,673 779,816 $ 16,042,273
Reinvestment of dividends 4,604 224,082 10,864 205,755
Shares redeemed (515,576 ) (21,852,317 ) (121,725 ) (2,378,018 )
Net increase in shares outstanding 876,867 $ 37,460,438 668,955 $ 13,870,010
C Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

ARK Transformational Innovation Fund

Shares

Amount

Shares

Amount

Shares sold 607,818 $ 25,198,565 507,395 $ 10,499,828
Reinvestment of dividends 2,633 126,430 5,014 94,357
Shares redeemed (220,811 ) (9,488,816 ) (47,542 ) (978,256 )
Net increase in shares outstanding 389,640 $ 15,836,179 464,867 $ 9,615,929
R6 ClassA
October 28, 2020 to
June 30, 2021

ARK Transformational Innovation Fund

Shares

Amount

Shares sold 57,992 $ 2,613,011
Reinvestment of dividends 142 7,017
Shares redeemed (11,524 ) (539,076 )
Net increase in shares outstanding 46,610 $ 2,080,952

A Class launched on October 28, 2020 and commenced operations on October 29, 2020 (Note 1).

11. Subsequent Events

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

34

American Beacon ARK Transformational Innovation FundSM

Financial Highlights

(For a share outstanding throughout the period)

R5 ClassA
Year Ended June 30,

January 27,

2017B to

June 30,

2021 2020 2019 2018 2017

Net asset value, beginning of period

$ 27.41 $ 18.59 $ 18.60 $ 12.87 $ 10.00

Income (loss) from investment operations:

Net investment income (loss)

(0.34 )E (0.16 )C D (0.29 ) 0.06 (0.03 )

Net gains on investments (both realized and unrealized)

21.91 9.60 1.24 6.25 2.90

Total income (loss) from investment operations

21.57 9.44 0.95 6.31 2.87

Less distributions:

Dividends from net investment income

(0.07 ) (0.03 ) - (0.09 ) -

Distributions from net realized gains

(0.16 ) (0.59 ) (0.96 ) (0.49 ) -

Total distributions

(0.23 ) (0.62 ) (0.96 ) (0.58 ) -

Net asset value, end of period

$ 48.75 $ 27.41 $ 18.59 $ 18.60 $ 12.87

Total returnF

78.67 % 52.22 % 6.55 % 49.76 % 28.70 %G

Ratios and supplemental data:

Net assets, end of period

$ 16,943,552 $ 8,438,698 $ 2,674,638 $ 7,650,448 $ 3,603,636

Ratios to average net assets:

Expenses, before reimbursements

1.03 % 1.24 % 1.74 % 4.74 % 10.29 %H

Expenses, net of reimbursementsI

1.00 % 1.00 % 1.00 % 1.02 % 0.99 %H

Net investment (loss), before expense reimbursements

(0.87 )% (1.04 )% (1.42 )% (3.59 )% (10.01 )%H

Net investment income (loss), net of reimbursements

(0.84 )% (0.80 )% (0.68 )% 0.14 % (0.70 )%H

Portfolio turnover rate

61 % 28 % 63 % 59 % 28 %J
A

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

B

Commencement of operations.

C

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

D

Net investment income includes significant dividend payment from Xilinx, Inc. amounting to $0.0021.

E

Net investment income includes significant dividend payment from Novartis AG, ADR amounting to $0.0114.

F

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.

G

Not annualized.

H

Annualized.

I

Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses.

J

Portfolio turnover rate is for the period from January 27, 2017 through June 30, 2017 and is not annualized.

See accompanying notes

35

American Beacon ARK Transformational Innovation FundSM

Financial Highlights

(For a share outstanding throughout the period)

Y Class
Year Ended June 30,

January 27,

2017A to

June 30,

2021 2020 2019 2018 2017

Net asset value, beginning of period

$ 27.31 $ 18.54 $ 18.57 $ 12.87 $ 10.00

Income (loss) from investment operations:

Net investment (loss)

(0.29 )D (0.19 )B C (0.06 ) (0.02 ) (0.03 )

Net gains on investments (both realized and unrealized)

21.73 9.58 0.99 6.30 2.90

Total income (loss) from investment operations

21.44 9.39 0.93 6.28 2.87

Less distributions:

Dividends from net investment income

(0.06 ) (0.03 ) - (0.09 ) -

Distributions from net realized gains

(0.16 ) (0.59 ) (0.96 ) (0.49 ) -

Total distributions

(0.22 ) (0.62 ) (0.96 ) (0.58 ) -

Net asset value, end of period

$ 48.53 $ 27.31 $ 18.54 $ 18.57 $ 12.87

Total returnE

78.48 % 52.09 % 6.45 % 49.52 % 28.70 %F

Ratios and supplemental data:

Net assets, end of period

$ 735,669,845 $ 220,504,263 $ 32,822,832 $ 9,887,450 $ 153,410

Ratios to average net assets:

Expenses, before reimbursements

1.11 % 1.26 % 1.94 % 4.84 % 14.30 %G

Expenses, net of reimbursementsH

1.09 % 1.10 % 1.10 % 1.12 % 1.09 %G

Net investment (loss), before expense reimbursements

(0.95 )% (1.08 )% (1.62 )% (3.85 )% (14.01 )%G

Net investment (loss), net of reimbursements

(0.93 )% (0.92 )% (0.78 )% (0.13 )% (0.81 )%G

Portfolio turnover rate

61 % 28 % 63 % 59 % 28 %I
A

Commencement of operations.

B

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

C

Net investment income includes significant dividend payment from Xilinx, Inc. amounting to $0.0042.

D

Net investment income includes significant dividend payment from Novartis AG, ADR amounting to $0.0150.

E

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

F

Not annualized.

G

Annualized.

H

Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses.

I

Portfolio turnover rate is for the period from January 27, 2017 through June 30, 2017 and is not annualized.

See accompanying notes

36

American Beacon ARK Transformational Innovation FundSM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class
Year Ended June 30,

January 27,

2017A to

June 30,

2021 2020 2019 2018 2017

Net asset value, beginning of period

$ 27.05 $ 18.42 $ 18.51 $ 12.85 $ 10.00

Income (loss) from investment operations:

Net investment (loss)

(0.37 )D (0.25 )B C (0.17 ) (0.06 )B (0.02 )

Net gains on investments (both realized and unrealized)

21.48 9.50 1.04 6.30 2.87

Total income (loss) from investment operations

21.11 9.25 0.87 6.24 2.85

Less distributions:

Dividends from net investment income

(0.02 ) (0.03 ) - (0.09 ) -

Distributions from net realized gains

(0.16 ) (0.59 ) (0.96 ) (0.49 ) -

Total distributions

(0.18 ) (0.62 ) (0.96 ) (0.58 ) -

Net asset value, end of period

$ 47.98 $ 27.05 $ 18.42 $ 18.51 $ 12.85

Total returnE

78.03 % 51.66 % 6.13 % 49.28 % 28.50 %F

Ratios and supplemental data:

Net assets, end of period

$ 331,002,394 $ 69,421,549 $ 9,310,932 $ 6,910,383 $ 1,083,835

Ratios to average net assets:

Expenses, before reimbursements

1.38 % 1.52 % 2.03 % 4.96 % 12.53 %G

Expenses, net of reimbursementsH

1.34 % 1.38 % 1.38 % 1.40 % 1.37 %G

Net investment (loss), before expense reimbursements

(1.21 )% (1.34 )% (1.71 )% (3.92 )% (12.37 )%G

Net investment (loss), net of reimbursements

(1.17 )% (1.19 )% (1.06 )% (0.36 )% (1.21 )%G

Portfolio turnover rate

61 % 28 % 63 % 59 % 28 %I
A

Commencement of operations.

B

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

C

Net investment income includes significant dividend payment from Xilinx, Inc. amounting to $0.0063.

D

Net investment income includes significant dividend payment from Novartis AG, ADR amounting to $0.0143.

E

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

F

Not annualized.

G

Annualized.

H

Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses.

I

Portfolio turnover rate is for the period from January 27, 2017 through June 30, 2017 and is not annualized.

See accompanying notes

37

American Beacon ARK Transformational Innovation FundSM

Financial Highlights

(For a share outstanding throughout the period)

A Class
Year Ended June 30,

January 2,

2019A to

June 30,

2021 2020 2019

Net asset value, beginning of period

$ 27.05 $ 18.42 $ 14.72

Income (loss) from investment operations:

Net investment (loss)

(0.35 )C (0.06 )B (0.05 )

Net gains on investments (both realized and unrealized)

21.46 9.31 3.75

Total income (loss) from investment operations

21.11 9.25 3.70

Less distributions:

Dividends from net investment income

(0.00 )D (0.03 ) -

Distributions from net realized gains

(0.16 ) (0.59 ) -

Total distributions

(0.16 ) (0.62 ) -

Net asset value, end of period

$ 48.00 $ 27.05 $ 18.42

Total returnE

78.03 % 51.66 % 25.14 %F

Ratios and supplemental data:

Net assets, end of period

$ 83,589,357 $ 23,391,480 $ 3,606,814

Ratios to average net assets:

Expenses, before reimbursements

1.37 % 1.66 % 2.31 %G

Expenses, net of reimbursementsH

1.37 % 1.40 % 1.40 %G

Net investment (loss), before expense reimbursements

(1.21 )% (1.47 )% (2.00 )%G

Net investment (loss), net of reimbursements

(1.21 )% (1.21 )% (1.09 )%G

Portfolio turnover rate

61 % 28 % 63 %
A

Commencement of operations.

B

Net investment income includes significant dividend payment from Xilinx, Inc. amounting to $(0.0608).

C

Net investment income includes significant dividend payment from Novartis AG, ADR amounting to $0.0160.

D

Amount represents less than $0.01 per share.

E

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

F

Not annualized.

G

Annualized.

H

Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses.

See accompanying notes

38

American Beacon ARK Transformational Innovation FundSM

Financial Highlights

(For a share outstanding throughout the period)

C Class
Year Ended June 30,

January 2,

2019A to

June 30,

2021 2020 2019

Net asset value, beginning of period

$ 26.78 $ 18.35 $ 14.72

Income (loss) from investment operations:

Net investment (loss)

(0.61 )C (0.09 )B (0.10 )

Net gains on investments (both realized and unrealized)

21.15 9.11 3.73

Total income (loss) from investment operations

20.54 9.02 3.63

Less distributions:

Distributions from net realized gains

(0.16 ) (0.59 ) -

Total distributions

(0.16 ) (0.59 ) -

Net asset value, end of period

$ 47.16 $ 26.78 $ 18.35

Total returnD

76.68 % 50.54 % 24.66 %E

Ratios and supplemental data:

Net assets, end of period

$ 44,900,174 $ 15,060,539 $ 1,790,079

Ratios to average net assets:

Expenses, before reimbursements

2.12 % 2.31 % 3.25 %F

Expenses, net of reimbursementsG

2.12 % 2.15 % 2.15 %F

Net investment (loss), before expense reimbursements

(1.96 )% (2.13 )% (2.94 )%F

Net investment (loss), net of reimbursements

(1.96 )% (1.97 )% (1.83 )%F

Portfolio turnover rate

61 % 28 % 63 %
A

Commencement of operations.

B

Net investment income includes significant dividend payment from Xilinx, Inc. amounting to $(0.0873).

C

Net investment income includes significant dividend payment from Novartis AG, ADR amounting to $0.0154.

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.

See accompanying notes

39

American Beacon ARK Transformational Innovation FundSM

Financial Highlights

(For a share outstanding throughout the period)

R6 Class
October 28,
2020A to
June 30,
2021

Net asset value, beginning of period

$ 36.25

Income from investment operations:

Net investment income (loss)

(0.14 )B

Net gains on investments (both realized and unrealized)

12.78

Total income from investment operations

12.64

Less distributions:

Dividends from net investment income

(0.06 )

Distributions from net realized gains

(0.16 )

Total distributions

(0.22 )

Net asset value, end of period

$ 48.67

Total returnC

34.86 %D

Ratios and supplemental data:

Net assets, end of period

$ 2,268,341

Ratios to average net assets:

Expenses, before reimbursements

1.22 %E

Expenses, net of reimbursementsF

0.95 %E

Net investment income (loss), before expense reimbursements

(1.05 )%E

Net investment income (loss), net of reimbursements

(0.78 )%E

Portfolio turnover rate

61 %D
A

Commencement of Operations.

B

Net investment income includes significant dividend payment from Novartis AG, ADR amounting to $0.0197.

C

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

D

Not annualized.

E

Annualized.

F

Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses.

See accompanying notes

40

American Beacon ARK Transformational Innovation FundSM

Federal Tax Information

June 30, 2021 (Unaudited)

Certain tax information regarding the Funds are required to be provided to shareholders based upon the Fund's income and distributions for the taxable year ended June 30, 2021. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2020.

The Fund designated the following items with regard to distributions paid during the fiscal year ended June 30, 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:

ARK Transformational Innovation

7.06 %

Qualified Dividend Income:

ARK Transformational Innovation

10.63 %

Long-Term Capital Gain Distributions:

ARK Transformational Innovation

$ 1,855,507

Short-Term Capital Gain Distributions:

ARK Transformational Innovation

$ 1,768,025

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

41

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 ARK Transformational Innovation Fund ('Fund'); and (2) the Investment Advisory Agreement among the Manager, ARK Investment Management LLC (the 'subadvisor'), and the Trust, on behalf of the Fund. The Management Agreement and the Investment Advisory Agreement are referred to herein individually as an 'Agreement' and collectively as the 'Agreements.'

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

In advance of the Meetings, the Board's Investment Committee and/or the Manager coordinated the production of information from Broadridge and Morningstar regarding the performance, fees and expenses of the Fund as well as information from the Manager and the subadvisor. At the Meetings, the Board considered the information provided in connection with the renewal process, as well as information furnished to the Board throughout the year at regular meetings of the Board and its committees. In connection with the Board's consideration of the Agreements, the 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 and the subadvisor

42

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

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

Nature, Extent and Quality of Services. With respect to the renewal of the Management Agreement, the Board considered, among other factors: the Fund's performance since its inception on January 27, 2017; 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. The Board also considered that the Performance Universe selected by Broadridge may not provide an appropriate comparison for the Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by the subadvisor regarding the performance of the Fund relative to the performance of a composite of other 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 and the Subadvisor from their Relationships 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 Fund earning a profit for the Manager before the payment of distribution-related expenses and the Manager 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. In addition,

43

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 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 also considered the cost of services and profitability of the subadvisor.

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 and the profitability levels of the subadvisor were reasonable in light of the services performed by the subadvisor. 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 for the Fund.

In addition, the Board noted the Manager's representation that the Management Agreement contain 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. The Board also noted the Manager's representation that its relationship with the Trust provides cross-selling opportunities for products sponsored by the subadvisor for which the Fund's distributor provides distribution services. In addition, the Board noted that the 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 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 1st Quintile represents the top 20 percent of the universe based on performance, and the 5th 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 applicable, 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 Board noted that the Fund had a shorter term performance record, and evaluated the information provided.

44

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 1st Quintile represents the lowest 20 percent of the universe or group based on lowest total expense, and the 5th 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 the 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 1st Quintile representing the lowest 20 percent of the category constituents and the 5th 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. In addition, information regarding subadvisor use of soft dollars was requested from the Manager and was considered by the Board. 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 Agreements 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

3 rd Quintile

Compared to Broadridge Expense Universe

4 th Quintile

Morningstar Fee Level Ranking

5 th Quintile

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

Compared to Broadridge Performance Universe

1 st Quintile

Compared to Morningstar Category

1 st Quintile

The Board also considered: (1) information provided by the subadvisor regarding the fee rate charged for managing an account in the same or a similar strategy as the subadvisor manages the Fund; (2) that the subadvisor is indirectly affiliated with the Manager; (3) information provided by the subadvisor regarding its profitability with respect to the services that it provides to the Fund; 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 the 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.

45

Disclosure Regarding Liquidity Risk Management Program (Unaudited)

Rule 22e-4 under the Investment Company Act of 1940, as amended ('Rule 22e-4'), requires open-end registered investment companies (other than money market funds) to adopt and implement a written liquidity risk management program that is reasonably designed to assess and manage liquidity risk. The Fund has adopted a Liquidity Risk Management Program (the 'Program') that is designed to assess and manage liquidity risk, which is the risk that the Fund could not meet requests to redeem its shares without significant dilution of the remaining shareholders' interests in the Fund. Pursuant to Rule 22e-4, the Program includes the following elements:

Assessment, management, and periodic review of liquidity risk;

Classification of each of the Fund's portfolio investments into one of four liquidity categories: highly liquid, moderately liquid, less liquid, and illiquid;

Determination and review of a highly liquid investment minimum for any Fund that does not primarily hold assets that are highly liquid investments;

Policies and procedures to respond to a shortfall in the highly liquid investment minimum, including associated reports to the Fund's Board of Trustees (the 'Board') and the Securities and Exchange Commission ('SEC');

A prohibition against a Fund acquiring an illiquid investment if immediately after the acquisition the Fund would have more than 15% of its net assets invested in illiquid investments that are assets;

Reporting of breaches of the illiquid investment prohibition to the Board and the SEC; and

Policies and procedures regarding how and when a Fund will satisfy redemption requests by distributing portfolio securities or other assets.

The Manager's Liquidity Committee administers the Program and has provided quarterly reports to the Board regarding the Fund's liquidity risk. In addition, at the Board's March 3-4, 2021 meetings, the Board reviewed the Liquidity Committee's written report ('Report') that addressed the operation of the Program and assessed the adequacy and effectiveness of its implementation from January 1, 2020 through December 31, 2020 (the 'review period').

Key conclusions that the Liquidity Committee included in the Report are listed below:

The Program is reasonably designed to assess and manage the Fund's liquidity risk.

The operation of the Program was adequate during the review period.

There were no material changes to the Program during the review period.

The Fund included in this shareholder report was deemed to primarily hold assets that are highly liquid, and no highly liquid investment minimum was recommended.

The Program was effectively implemented by the Liquidity Committee during the review period.

Administration of the Program by the Liquidity Committee continues to be appropriate.

46

Trustees and Officers of the American Beacon FundsSM(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-one funds in the fund complex that includes the Trust, the American Beacon Select Funds, the American Beacon Institutional Funds Trust, the American Beacon Sound Point Enhanced Income Fund, and the American Beacon Apollo Total Return Fund*. The Trust's Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age

Position, Term of

Office and Length

of Time Served

with the Trust

Principal Occupation(s) During Past 5 Years

and Current Directorships

INTERESTED TRUSTEES

Term

Lifetime of Trust until removal, resignation or retirement**
Eugene J. Duffy (66)*** 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-Present); 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-Present); 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); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-2018); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-2021).
Gerard J. Arpey (62) Trustee since 2012 Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-2021).

47

Trustees and Officers of the American Beacon FundsSM(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-Present); Trustee, American Beacon Apollo Total Return Fund (2018-2021).
Claudia A. Holz (63) 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-Present); 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-Present); 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-Present); Trustee, American Beacon Apollo Total Return Fund (2018-2021).

48

Trustees and Officers of the American Beacon FundsSM(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-Present); Director, Shapiro Capital Management LLC (2017-Present); Director, Chairman and CEO, Continuous Capital, LLC (2018-Present); Director, Green Harvest Asset Management (2019-Present); Director, National Investment Services of America, LLC (2019 - Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director and President, American Beacon Cayman Transformational Innovation Company, LTD., (2017-2018); President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); President American Beacon Cayman TargetRisk Company, Ltd. (2018-Present);Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-2020); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-Present); President, American Beacon Apollo Total Return Fund (2018-2021); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present).
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-Present); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-2021).

49

Trustees and Officers of the American Beacon FundsSM(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), Vice President, Director of Sales (2004-2012), American Beacon Advisors, Inc.; Senior Vice President, Resolute Investment Managers, Inc. (2017-Present); Senior Vice President, Resolute Investment Distributors, Inc. (2018-Present); Senior Vice President, Resolute Investment Services, Inc. (2018-Present); Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-2021).
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-Present);Vice President American Beacon Apollo Total Return Fund (2018-2021).
Erica Duncan (50) 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 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); Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017-2017); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, 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, American Beacon Select Funds (2010-2021); Vice President (2021-Present), Principal Accounting Officer and Treasurer (2017-2021), American Beacon Institutional Funds Trust; Vice President (2021-Present), 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).

50

Trustees and Officers of the American Beacon FundsSM(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), Managing Director (2003-2009), 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-Present); 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), Vice President (2010-2013), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice Present (2015-2018), Resolute Investment Holdings, LLC; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Topco, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Acquisition, Inc.; Director (2015-Present), President & COO (2018-Present), Senior Vice President (2015-2018), Resolute Investment Managers, Inc.; Director and Executive Vice President (2017-Present), Resolute Investment Distributors, Inc.; Director (2017-Present), President & COO (2018-Present), Executive Vice President (2017-2018), Resolute Investment Services, Inc.; Senior Vice President (2017-Present), Vice President (2012-2017), Manager (2015-Present), American Private Equity Management, LLC; 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-Present); 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-Present); Vice President, American Beacon Apollo Total Return Fund (2018-2021).

51

Trustees and Officers of the American Beacon FundsSM(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 (49)

Chief Compliance

Officer since 2004

and Asst. Secretary since 1999

Vice President, American Beacon Advisors, Inc. (2019-Present); Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Distributors (2017-Present); Vice President, Resolute Investment Services, Inc. (2019-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-2020); 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-Present); 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, 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); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Treasurer, American Beacon Apollo Total Return Fund (2018-2021).
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-Present); 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-Present); 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-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).

52

Trustees and Officers of the American Beacon FundsSM(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 (62) 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-Present); 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-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2021-2021).

* There are currently no series in the American Beacon Apollo Total Return Fund trust.

** 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.

53

American Beacon ARK Transformational Innovation FundSM

Privacy Policy

June 30, 2021 (Unaudited)

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

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

information we receive from you on applications or other forms;

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

information we receive from third parties.

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

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

54

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55

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56

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:
[email protected] 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

PricewaterhouseCoopers LLP

Boston, Massachusetts

DISTRIBUTOR

Resolute Investment Distributors, Inc.

Irving, Texas

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

American Beacon Funds and American Beacon ARK Transformational Innovation Fund are service marks of American Beacon Advisors, Inc.

AR 6/21

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.

SHAPIRO EQUITY OPPORTUNITIES FUND

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 small- or mid-capitalizationstocks may involve greater volatility and lower liquidity than larger company stocks. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. 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.

SHAPIRO SMID CAP EQUITY FUND

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 small- or mid-capitalizationstocks may involve greater volatility and lower liquidity than larger company stocks. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. 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

June 30, 2021

Contents

President's Message

1

Market and Performance Overviews

2

Expense Examples

7

Report of Independent Registered Public Accounting Firm

9

Schedules of Investments:

American Beacon Shapiro Equity Opportunities Fund

10

American Beacon Shapiro SMID Cap Equity Fund

12

Financial Statements

15

Notes to Financial Statements

18

Financial Highlights:

American Beacon Shapiro Equity Opportunities Fund

36

American Beacon Shapiro SMID Cap Equity Fund

39

Federal Tax Information

42

Disclosure Regarding Approval of the Management and Investment Advisory Agreements

43

Disclosure Regarding Liquidity Risk Management Program

48

Trustees and Officers of the American Beacon Funds

49

Privacy Policy

56

Additional Fund Information

Back Cover

President's Message

Dear Shareholders,

Throughout this reporting period, the 24-hour news cycle has continued to closely follow the COVID-19 pandemic, ongoing global vaccination efforts and the rise of the delta variant, U.S. stimulus and infrastructure spending, and the reopening of our nation's businesses and schools. After months of seclusion and uncertainty, we can finally see the proverbial light at the end of a tunnel - and a path forward to potentially brighter days - even as we learn to navigate a world facing additional virus variants.

However, during challenging times such as we've all experienced since March 2020, the fear of loss can be a powerful emotion. And it can cause many individuals to make short-term investment decisions that have the potential to sink their long-term financial objectives. We encourage you to remain

focused on achieving your long-term investment goals by working with financial professionals to develop a 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 crises. By staying the course, 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 continuing your financial journey 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

Global Equity Market Overview

June 30, 2021 (Unaudited)

For the 12-month period ended June 30, 2021, equity markets were up significantly as investors looked beyond the COVID-19 pandemic and a tumultuous U.S. presidential election cycle. A long-anticipated vaccine to combat the novel coronavirus was released in the U.S. at the end of 2020, setting up strong performance for the domestic stock market. From a fiscal standpoint, Congress passed two additional coronavirus relief bills, one in December 2020 and another in March 2021, to help support the economy. In addition, the Federal Reserve remained accommodative throughout the period under review, which helped propel markets higher. While markets were generally positive, lingering uncertainties - including an uneven vaccine rollout, virus variants with higher transmissibility, supply chain constraints and, later in the period, inflation worries - led to some global volatility. Despite all the concerns, the MSCI® All Country World Index produced a 39.26% return for the period, as developed and emerging markets saw significant market appreciation.

In the U.S., the S&P 500 Index was up 40.79% and all of its 11 sectors produced positive returns for the period. The cyclical sectors - including Financials (up 61.77%), Industrials (up 51.45%), Energy (up 49.38%) and Materials (up 48.51%) - were the strongest performers. Defensive sectors, including Utilities (up 15.77%) and Consumer Staples (up 23.29%), did not rally as much in the risk-on period. From a style perspective, Value narrowly outpaced Growth as the Russell 3000® Value Index returned 45.40% versus the Russell 3000 Growth Index return of 42.99%. In terms of market capitalization, small-cap stocks significantly outperformed their larger-capitalization peers, evidenced by the Russell 2000® Index returning 62.03% compared to the Russell 1000® Index return of 43.07%.

International developed markets also ended the period higher as the MSCI EAFE Index was up 32.35%. In Europe, the top-performing countries were Austria and Sweden, represented by the MSCI Austria Index (up 70.89%) and the MSCI Sweden Index (up 53.85%), and the lagging countries were Portugal and Switzerland, represented by the MSCI Portugal Index (up 11.43%) and the MSCI Switzerland Index (up 24.33%). In Japan, equities produced moderate returns in comparison to other regions as the MSCI Japan Index returned 24.84%.

In the developing world, emerging markets performed well overall and the MSCI Emerging Market Index returned 40.90%. However, country dispersion was high. China, the largest country constituent, was up 27.39%, represented by the MSCI China Index, while Turkish equities struggled and the MSCI Turkey Index returned -13.01%. In contrast, Taiwan and South Korea were two of the best-performing markets as the MSCI Taiwan Index returned 70.46% and the MSCI Korea Index returned 66.20%.

2

American Beacon Shapiro Equity Opportunities FundSM

Performance Overview

June 30, 2021 (Unaudited)

The Investor Class of the American Beacon Shapiro Equity Opportunities Fund (the 'Fund') returned 80.85% for the twelve months ended June 30, 2021. The Fund outperformed the Russell 3000® Value Index (the 'Index') return of 45.40% for the period.

Comparison of Changes in Value of a $10,000 Investment for the period 9/12/2017 through 6/30/2021

Total Returns for the Period ended June 30, 2021

Ticker

1 Year

3 Year

Since Inception
09/12/2017

Value of $10,000

09/12/2017-

06/30/2021

R5 Class (1,3)

SHXIX 81.43 % 18.10 % 17.78 % $ 18,625

Y Class (1,3)

SHXYX 81.09 % 17.95 % 17.69 % $ 18,571

Investor Class (1,3)

SHXPX 80.85 % 17.64 % 17.34 % $ 18,359

Russell 3000® Index (2)

44.16 % 18.73 % 17.79 % $ 18,622

Russell 3000® Value Index (2)

45.40 % 12.23 % 11.22 % $ 14,976
1.

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

2.

Prior to October 28, 2020, the Fund's primary benchmark was the Russell 3000® Index. The Fund changed its primary benchmark to the Russell 3000 Value Index, because it more accurately reflects the Fund's investment strategy. The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the U.S. equity market. The Russell 3000® Value Index measures the performance of the broad value segment of the US equity market. It includes those Russell 3000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000® Value Index and the Russell 3000® Value Index (each an 'Index') are trademarks of Frank Russell

3

American Beacon Shapiro Equity Opportunities FundSM

Performance Overview

June 30, 2021 (Unaudited)

Company ('Russell') and have been licensed for use by American Beacon Funds. The American Beacon Shapiro Equity Opportunities Fund is not in any way sponsored, endorsed, sold or promoted by Russell or the London Stock Exchange Group companies ('LSEG') (together the 'Licensor Parties') and none of the Licensor Parties make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to (i) the results to be obtained from the use of the Index (upon which a fund is based), (ii) the figure at which the Index is said to stand at any particular time on any particular day or otherwise, or (iii) the suitability of the Index for the purpose to which it is being put in connection with a Fund. None of the Licensor Parties have provided or will provide any financial or investment advice or recommendation in relation to the Index to any fund or to its clients. The Index is calculated by Russell or its agent. None of the Licensor Parties shall be (a) liable (whether in negligence or otherwise) to any person for any error in the Index or (b) under any obligation to advise any person of any error therein. One cannot directly invest in an index.
3.

The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y and Investor Class shares were 0.98%, 1.10% and 2.21%, 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 primarily due to stock selection. Most of the Fund's outperformance related to security selection was attributed to holdings in the Communication Services, Consumer Discretionary, and Information Technology sectors. In the Communication Services sector, Lions Gate Entertainment Corp., Class B (up 160.1%) and ViacomCBS, Inc., Class B (up 273.9%) were the top contributors. In the Consumer Discretionary sector, Urban Outfitters, Inc. (up 186.8%) and General Motors Company (up 135.5%) added the most value. In the Information Technology sector, positions in FireEye, Inc. (up 84.6%) and Micron Technology, Inc. (up 69.4%) contributed to relative performance. The outperformance was slightly offset by security selection in the Health Care sector where Merck & Co., Inc. (up 3.2%) and Pfizer, Inc. (up 31.3%) were the largest detractors.

From a sector allocation perspective, a null weight to the Utilities sector (up 16.2%), the worst performing sector in the Index, added to the Fund's relative performance. Overweighting the Consumer Discretionary sector (up 66.1%), the best performing sector in the Index, also contributed to the Fund's performance. On the other hand, the Fund's underweight allocation to the Financials sector (up 64.7%), which was the second-best performing sector within the Index, detracted from performance.

Looking forward, the Fund's sub-advisor will continue to employ a team-based investment process that is driven by deep fundamental research in a concentrated, value-oriented approach.

Top Ten Holdings (% Net Assets)
Micron Technology, Inc. 5.3
Lions Gate Entertainment Corp., Class B 5.2
Westinghouse Air Brake Technologies Corp. 5.1
Walgreens Boots Alliance, Inc. 4.9
Bank of America Corp. 4.8
Berkshire Hathaway, Inc., Class B 4.8
AT&T, Inc. 4.7
FireEye, Inc. 4.7
FedEx Corp. 4.6
Regions Financial Corp. 4.5
Total Fund Holdings 26
Sector Allocation (% Equities)
Consumer Discretionary 14.9
Financials 14.9
Materials 14.3
Communication Services 13.9
Information Technology 12.4
Industrials 10.1
Consumer Staples 9.1
Health Care 7.1
Energy 3.3

4

American Beacon Shapiro SMID Cap Equity FundSM

Performance Overview

June 30, 2021 (Unaudited)

The Investor Class of the American Beacon Shapiro SMID Cap Equity Fund (the 'Fund') returned 81.29% for the twelve months ended June 30, 2021. The Fund outperformed the Russell 2500® Value Index (the 'Index') return of 63.23% for the same period.

Comparison of Changes in Value of a $10,000 Investment for the period 9/12/2017 through 6/30/2021

Total Returns for the Period ended June 30, 2021

Ticker

1 Year

3 Years

Since Inception
09/12/2017

Value of $10,000
09/12/2017-
06/30/2020

R5 Class (1,3)

SHDIX 81.91 % 12.52 % 13.58 % $ 16,226

Y Class (1,3)

SHDYX 81.60 % 12.37 % 13.46 % $ 16,160

Investor Class (1,3)

SHDPX 81.29 % 12.09 % 13.16 % $ 15,997

Russell 2500® Index (2)

57.79 % 15.24 % 15.94 % $ 17,535

Russell 2500® Value Index (2)

63.23 % 10.60 % 11.31 % $ 15,023
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. 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 actual returns shown since inception.

2.

Prior to October 28, 2020, the Fund's primary benchmark was the Russell 2500® Index. The Fund changed its primary benchmark to the Russell 2500 Value Index, because it more accurately reflects the Fund's investment strategy. The Russell 2500® Index is an unmanaged index that measures the performance of the small to mid-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and includes approximately 2,500 of the smallest securities based on a combination of their market capitalization and current index membership. The Russell 2500® Value Index measures the performance of the small to mid-cap value segment of the U.S. equity universe. It includes those Russell 2500 companies that are considered more value

5

American Beacon Shapiro SMID Cap Equity FundSM

Performance Overview

June 30, 2021 (Unaudited)

oriented relative to the overall market as defined by Russell's style methodology. The Russell 2500® Value Index and the Russell 2500® Value Index (each an 'Index') are trademarks of Frank Russell Company ('Russell') and have been licensed for use by American Beacon Funds. The American Beacon Shapiro SMID Cap Equity Fund is not in any way sponsored, endorsed, sold or promoted by Russell or the London Stock Exchange Group companies ('LSEG') (together the 'Licensor Parties') and none of the Licensor Parties make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to (i) the results to be obtained from the use of the Index (upon which a fund is based), (ii) the figure at which the Index is said to stand at any particular time on any particular day or otherwise, or (iii) the suitability of the Index for the purpose to which it is being put in connection with a Fund. None of the Licensor Parties have provided or will provide any financial or investment advice or recommendation in relation to the Index to any fund or to its clients. The Index is calculated by Russell or its agent. None of the Licensor Parties shall be (a) liable (whether in negligence or otherwise) to any person for any error in the Index or (b) under any obligation to advise any person of any error therein. One cannot directly invest in an index.
3.

The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y and Investor Class shares were 3.22%, 3.33% and 3.86%, respectively. The expense ratios above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

The Fund outperformed the Index primarily due to stock selection. Most of the Fund's outperformance related to security selection was attributed to holdings in the Health Care, Financials, and Communication Services sectors. In the Health Care sector, Allscripts Healthcare Solutions, Inc. (up 165.2%) was the top contributor. In the Financials sector, positions in Cadence Bancorp (up 131.6%) and Regions Financial Corp. (up 82.2%) added the most value. In the Communication Services sector, positions in Lions Gate Entertainment Corp., Class B (up 161.6%) and AMC Networks, Inc., Class A. (up 149.8%) were the largest contributors during the period. The outperformance was partially offset by security selection in the Materials sector. Positions in Graphic Packaging Holding Co. (up 24.3%) and PQ Group Holdings, Inc. (up 19.4%) were the largest detractors to performance.

From a sector allocation perspective, overweighting the Communication Services sector (up 93.0%), the second-best performing sector in the Index, and the Materials sector (up 81.7%) added to performance. Additionally, a null weight to the Real Estate sector (up 42.2%) contributed to relative returns. Partially offsetting gains was an overweight allocation to the second-worst performer within the Index, Health Care (up 38.4%).

Looking forward, the Fund's sub-advisor will continue to employ a team-oriented investment process that is driven by deep fundamental research in a concentrated, value-oriented approach.

Top Ten Holdings (% Net Assets)
Lions Gate Entertainment Corp., Class B 6.3
Graphic Packaging Holding Co. 5.7
Ingredion, Inc. 5.3
Hanesbrands, Inc. 5.1
Cadence BanCorp 5.0
Carter's, Inc. 5.0
Liberty Media Corp-Liberty Braves, Class C 5.0
PQ Group Holdings, Inc. 5.0
Westinghouse Air Brake Technologies Corp. 5.0
FireEye, Inc. 4.9
Total Fund Holdings 24
Sector Allocation (% Equities)
Materials 17.9
Communication Services 17.3
Consumer Discretionary 15.4
Health Care 13.7
Financials 10.0
Information Technology 8.9
Industrials 7.1
Consumer Staples 5.5
Energy 4.2

6

American Beacon FundsSM

Expense Examples

June 30, 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 January 1, 2021 through June 30, 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 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.

7

American Beacon FundsSM

Expense Examples

June 30, 2021 (Unaudited)

American Beacon Shapiro Equity Opportunities Fund
Beginning Account Value
1/1/2021
Ending Account Value
6/30/2021
Expenses Paid During
Period
1/1/2021-6/30/2021*
R5 Class
Actual $1,000.00 $1,231.30 $4.37
Hypothetical** $1,000.00 $1,020.88 $3.96
Y Class
Actual $1,000.00 $1,230.30 $4.92
Hypothetical** $1,000.00 $1,020.38 $4.46
Investor Class
Actual $1,000.00 $1,229.40 $5.86
Hypothetical** $1,000.00 $1,019.54 $5.31
*

Expenses are equal to the Fund's annualized expense ratios for the six-month period of 0.79%, 0.89%, and 1.06% 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 (181) by days in the year (365) to reflect the half-year period.

**

5% return before expenses.

American Beacon Shapiro SMID Cap Equity Fund
Beginning Account Value
1/1/2021
Ending Account Value
6/30/2021
Expenses Paid During
Period
1/1/2021-6/30/2021*
R5 Class
Actual $1,000.00 $1,259.40 $4.99
Hypothetical** $1,000.00 $1,020.38 $4.46
Y Class
Actual $1,000.00 $1,258.50 $5.54
Hypothetical** $1,000.00 $1,019.89 $4.96
Investor Class
Actual $1,000.00 $1,256.30 $6.60
Hypothetical** $1,000.00 $1,018.94 $5.91
*

Expenses are equal to the Fund's annualized expense ratios for the six-month period of 0.89%, 0.99%, and 1.18% 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 (181) by days in the year (365) to reflect the half-year period.

**

5% return before expenses.

8

American Beacon FundsSM

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of American Beacon Funds and the Shareholders of American Beacon Shapiro Equity Opportunities Fund and American Beacon Shapiro SMID Cap Equity Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of American Beacon Shapiro Equity Opportunities Fund and American Beacon Shapiro SMID Cap Equity Fund (two of the series constituting American Beacon Funds, hereafter collectively referred to as the 'Funds') as of June 30, 2021, the related statements of operationsfor the year ended June 30, 2021, the statements of changes in net assets for each of the two years in the period ended June 30, 2021, including the related notes,and the financial highlights for the years ended June 30, 2021, 2020 and 2019, and the period from September 12, 2017 (commencement of operations) through June 30, 2018 (collectively referred to as the 'financial statements'). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of June 30, 2021, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended June 30, 2021 and each of the financial highlights for the years ended June 30, 2021, 2020 and 2019, and the period from September 12, 2017 (commencement of operations) through June 30, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinions

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

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of June 30, 2021 by correspondence with the custodian, transfer agent and brokers; when replies were no received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.

/s/PricewaterhouseCoopers LLP

Boston, MA

August 26, 2021

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

9

American Beacon Shapiro Equity Opportunities FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
COMMON STOCKS - 95.62%
Communication Services - 13.27%
Diversified Telecommunication Services - 4.66%
AT&T, Inc. 428,900 $ 12,343,742
Entertainment - 8.61%
Lions Gate Entertainment Corp., Class AA 24,200 500,940
Lions Gate Entertainment Corp., Class BA 749,800 13,721,340
Walt Disney Co.A 48,950 8,603,941
22,826,221

Total Communication Services

35,169,963
Consumer Discretionary - 14.26%
Automobiles - 4.51%
General Motors Co.A 202,000 11,952,340
Hotels, Restaurants & Leisure - 1.48%
Starbucks Corp. 35,200 3,935,712
Specialty Retail - 4.30%
Urban Outfitters, Inc.A 276,500 11,397,330
Textiles, Apparel & Luxury Goods - 3.97%
Hanesbrands, Inc. 563,300 10,516,811

Total Consumer Discretionary

37,802,193
Consumer Staples - 8.73%
Beverages - 3.85%
Coca-Cola Co. 188,900 10,221,379
Food & Staples Retailing - 4.88%
Walgreens Boots Alliance, Inc. 245,800 12,931,538

Total Consumer Staples

23,152,917
Energy - 3.15%
Oil, Gas & Consumable Fuels - 3.15%
Devon Energy Corp. 286,130 8,352,135
Financials - 14.19%
Banks - 9.34%
Bank of America Corp. 308,500 12,719,455
Regions Financial Corp. 597,300 12,053,514
24,772,969
Diversified Financial Services - 4.85%
Berkshire Hathaway, Inc., Class BA 46,220 12,845,462

Total Financials

37,618,431
Health Care - 6.82%
Pharmaceuticals - 6.82%
Merck & Co., Inc. 121,300 9,433,501
Organon & Co.A 10,720 324,387
Pfizer, Inc. 212,300 8,313,668
18,071,556

Total Health Care

18,071,556

See accompanying notes

10

American Beacon Shapiro Equity Opportunities FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
COMMON STOCKS - 95.62% (continued)
Industrials - 9.70%
Air Freight & Logistics - 4.58%
FedEx Corp. 40,720 $ 12,147,998
Machinery - 5.12%
Westinghouse Air Brake Technologies Corp. 164,700 13,554,810

Total Industrials

25,702,808
Information Technology - 11.87%
Electronic Equipment, Instruments & Components - 1.87%
Corning, Inc. 121,500 4,969,350
Semiconductors & Semiconductor Equipment - 5.27%
Micron Technology, Inc.A 164,300 13,962,214
Software - 4.73%
FireEye, Inc.A 619,800 12,532,356

Total Information Technology

31,463,920
Materials - 13.63%
Chemicals - 9.17%
Axalta Coating Systems Ltd.A 380,000 11,586,200
DuPont de Nemours, Inc. 77,867 6,027,685
International Flavors & Fragrances, Inc. 44,841 6,699,245
24,313,130
Containers & Packaging - 4.46%
Graphic Packaging Holding Co. 651,600 11,820,024

Total Materials

36,133,154

Total Common Stocks (Cost $207,778,588)

253,467,077
SHORT-TERM INVESTMENTS - 3.71% (Cost $9,827,019)
Investment Companies - 3.71%
American Beacon U.S. Government Money Market Select Fund, 0.01%B C 9,827,019 9,827,019

TOTAL INVESTMENTS - 99.33% (Cost $217,605,607)

263,294,096

OTHER ASSETS, NET OF LIABILITIES - 0.67%

1,765,113

TOTAL NET ASSETS - 100.00%

$ 265,059,209
Percentages are stated as a percent of net assets.

ANon-income producing security.

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

C7-day yield.

The Fund's investments are summarized by level based on the inputs used to determine their values. As of June 30, 2021, the investments were classified as described below:

Shapiro Equity Opportunities Fund

Level 1 Level 2 Level 3 Total

Assets

Common Stocks

$ 253,467,077 $ - $ - $ 253,467,077

Short-Term Investments

9,827,019 - - 9,827,019

Total Investments in Securities - Assets

$ 263,294,096 $ - $ - $ 263,294,096

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended June 30, 2021, there were no transfers into or out of Level 3.

See accompanying notes

11

American Beacon Shapiro SMID Cap Equity FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
COMMON STOCKS - 96.55%
Communication Services - 16.68%
Entertainment - 16.68%
IMAX Corp.A 10,300 $ 221,450
Liberty Media Corp-Liberty Braves, Class CA B 36,100 1,002,497
Lions Gate Entertainment Corp., Class BA 68,700 1,257,210
Madison Square Garden Sports Corp.A 5,000 862,850
3,344,007

Total Communication Services

3,344,007
Consumer Discretionary - 14.89%
Specialty Retail - 4.79%
Urban Outfitters, Inc.A 23,300 960,426
Textiles, Apparel & Luxury Goods - 10.10%
Carter's, Inc. 9,700 1,000,749
Hanesbrands, Inc. 54,900 1,024,983
2,025,732

Total Consumer Discretionary

2,986,158
Consumer Staples - 5.33%
Food Products - 5.33%
Ingredion, Inc. 11,800 1,067,900
Energy - 4.09%
Oil, Gas & Consumable Fuels - 4.09%
Devon Energy Corp. 28,084 819,772
Financials - 9.67%
Banks - 9.67%
Cadence BanCorp 48,400 1,010,592
Regions Financial Corp. 46,000 928,280
1,938,872

Total Financials

1,938,872
Health Care - 13.18%
Health Care Equipment & Supplies - 9.20%
Ortho Clinical Diagnostics Holdings PLCA 44,100 944,181
Varex Imaging Corp.A 33,600 901,152
1,845,333
Health Care Technology - 3.98%
Allscripts Healthcare Solutions, Inc.A 43,100 797,781

Total Health Care

2,643,114
Industrials - 6.80%
Aerospace & Defense - 1.79%
BWX Technologies, Inc. 6,200 360,344
Machinery - 5.01%
Westinghouse Air Brake Technologies Corp. 12,200 1,004,060

Total Industrials

1,364,404

See accompanying notes

12

American Beacon Shapiro SMID Cap Equity FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
COMMON STOCKS - 96.55% (continued)
Information Technology - 8.63%
Communications Equipment - 1.82%
Ciena Corp.A 6,400 $ 364,096
IT Services - 1.66%
GreenSky, Inc., Class AA 59,900 332,445
Semiconductors & Semiconductor Equipment - 0.24%
Entegris, Inc. 400 49,188
Software - 4.91%
FireEye, Inc.A 48,730 985,321

Total Information Technology

1,731,050
Materials - 17.28%
Chemicals - 9.43%
Axalta Coating Systems Ltd.A 29,000 884,210
PQ Group Holdings, Inc. 65,537 1,006,648
1,890,858
Containers & Packaging - 5.71%
Graphic Packaging Holding Co. 63,100 1,144,634
Metals & Mining - 2.14%
Compass Minerals International, Inc. 7,230 428,450

Total Materials

3,463,942

Total Common Stocks (Cost $17,017,637)

19,359,219
SHORT-TERM INVESTMENTS - 0.86% (Cost $172,284)
Investment Companies - 0.86%
American Beacon U.S. Government Money Market Select Fund, 0.01%C D 172,284 172,284

TOTAL INVESTMENTS - 97.41% (Cost $17,189,921)

19,531,503

OTHER ASSETS, NET OF LIABILITIES - 2.59%

520,193

TOTAL NET ASSETS - 100.00%

$ 20,051,696
Percentages are stated as a percent of net assets.

ANon-income producing security.

B Tracking Stock - A form of common stock that is issued by a parent company and tracks the performance of a specific division of that parent company. It allows investors the chance to invest in an individual sector of a company while the parent company maintains overall control.

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

D7-day yield.

PLC - Public Limited Company.

See accompanying notes

13

American Beacon Shapiro SMID Cap Equity FundSM

Schedule of Investments

June 30, 2021

The Fund's investments are summarized by level based on the inputs used to determine their values. As of June 30, 2021, the investments were classified as described below:

Shapiro SMID Cap Equity Fund

Level 1 Level 2 Level 3 Total

Assets

Common Stocks

$ 19,359,219 $ - $ - $ 19,359,219

Short-Term Investments

172,284 - - 172,284

Total Investments in Securities - Assets

$ 19,531,503 $ - $ - $ 19,531,503

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended June 30, 2021, there were no transfers into or out of Level 3.

See accompanying notes

14

American Beacon FundsSM

Statements of Assets and Liabilities

June 30, 2021

Shapiro Equity
Opportunities Fund
Shapiro SMID Cap
Equity Fund

Assets:

Investments in unaffiliated securities, at fair value §

$ 253,467,077 $ 19,359,219

Investments in affiliated securities, at fair value

9,827,019 172,284

Dividends and interest receivable

336,285 21,851

Receivable for investments sold

2,607,644 542,582

Receivable for fund shares sold

562,009 -

Receivable for expense reimbursement (Note 2)

9,542 25,367

Prepaid expenses

33,929 14,764

Total assets

266,843,505 20,136,067

Liabilities:

Payable for investments purchased

1,479,442 -

Payable for fund shares redeemed

57,307 2,058

Management and sub-advisory fees payable (Note 2)

144,104 13,878

Service fees payable (Note 2)

5,772 1,144

Transfer agent fees payable (Note 2)

14,628 955

Custody and fund accounting fees payable

18,618 13,904

Professional fees payable

51,800 50,447

Trustee fees payable (Note 2)

95 9

Payable for prospectus and shareholder reports

7,129 1,235

Other liabilities

5,401 741

Total liabilities

1,784,296 84,371

Net assets

$ 265,059,209 $ 20,051,696

Analysis of net assets:

Paid-in-capital

$ 214,823,155 $ 16,475,422

Total distributable earnings (deficits)A

50,236,054 3,576,274

Net assets

$ 265,059,209 $ 20,051,696

Shares outstanding at no par value (unlimited shares authorized):

R5 Class

4,259,758 563,298

Y Class

10,442,542 642,185

Investor Class

1,149,193 266,014

Net assets:

R5 Class

$ 71,421,117 $ 7,711,085

Y Class

$ 174,605,529 $ 8,753,769

Investor Class

$ 19,032,563 $ 3,586,842

Net asset value, offering and redemption price per share:

R5 Class

$ 16.77 $ 13.69

Y Class

$ 16.72 $ 13.63

Investor Class

$ 16.56 $ 13.48

Cost of investments in unaffiliated securities

$ 207,778,588 $ 17,017,637

Cost of investments in affiliated securities

$ 9,827,019 $ 172,284
A The Fund's investments in affiliated securities did not have unrealized appreciation (depreciation) at year end.

See accompanying notes

15

American Beacon FundsSM

Statements of Operations

For the year ended June 30, 2021

Shapiro Equity
Opportunities Fund
Shapiro SMID Cap
Equity Fund

Investment income:

Dividend income from unaffiliated securities

$ 2,373,097 $ 175,189 A

Dividend income from affiliated securities (Note 2)

392 36

Income derived from securities lending (Note 8)

3,202 2,855

Total investment income

2,376,691 178,080

Expenses:

Management and sub-advisory fees (Note 2)

973,534 94,068

Transfer agent fees:

R5 Class (Note 2)

2,817 1,816

Y Class (Note 2)

76,366 2,968

Investor Class

1,368 1,294

Custody and fund accounting fees

45,068 36,285

Professional fees

71,967 72,258

Registration fees and expenses

53,355 47,549

Service fees (Note 2):

Investor Class

18,065 7,164

Prospectus and shareholder report expenses

8,042 4,782

Trustee fees (Note 2)

9,602 855

Loan expense (Note 8)

2,003 4,399

Other expenses

19,606 11,728

Total expenses

1,281,793 285,166

Net fees waived and expenses (reimbursed) (Note 2)

(93,703 ) (163,331 )

Net expenses

1,188,090 121,835

Net investment income

1,188,601 56,245

Realized and unrealized gain from investments:

Net realized gain from:

Investments in unaffiliated securitiesB

4,808,781 1,191,890

Commission recapture (Note 1)

43,249 8,563

Change in net unrealized appreciation of:

Investments in unaffiliated securitiesC

63,757,540 4,181,492

Net gain from investments

68,609,570 5,381,945

Net increase in net assets resulting from operations

$ 69,798,171 $ 5,438,190

A Includes significant dividends of $32,467.

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

16

American Beacon FundsSM

Statements of Changes in Net Assets

Shapiro Equity Opportunities Fund Shapiro SMID Cap Equity Fund
Year Ended
June 30, 2021
Year Ended
June 30, 2020
Year Ended
June 30, 2021
Year Ended
June 30, 2020

Increase (decrease) in net assets:

Operations:

Net investment income

$ 1,188,601 $ 1,028,353 $ 56,245 $ 25,435

Net realized gain from investments in unaffiliated securities, and commission recapture

4,852,030 2,523,791 1,200,453 203,251

Change in net unrealized appreciation (depreciation) of investments in unaffiliated securities

63,757,540 (16,277,785 ) 4,181,492 (1,282,195 )

Net increase (decrease) in net assets resulting from operations

69,798,171 (12,725,641 ) 5,438,190 (1,053,509 )

Distributions to shareholders:

Total retained earnings:

R5 Class

(1,189,978 ) (2,950,289 ) (73,122 ) (370,701 )

Y Class

(1,203,956 ) (1,902,194 ) (1,790 ) (24,212 )

Investor Class

(34,178 ) (35,837 ) (14,982 ) (82,175 )

Net distributions to shareholders

(2,428,112 ) (4,888,320 ) (89,894 ) (477,088 )

Capital share transactions (Note 10):

Proceeds from sales of shares

138,636,360 5,448,119 14,050,621 92,937

Reinvestment of dividends and distributions

2,409,421 4,873,847 47,142 237,804

Cost of shares redeemed

(14,124,638 ) (11,099,690 ) (4,689,014 ) (316,417 )

Net increase (decrease) in net assets from capital share transactions

126,921,143 (777,724 ) 9,408,749 14,324

Net increase (decrease) in net assets

194,291,202 (18,391,685 ) 14,757,045 (1,516,273 )

Net assets:

Beginning of period

70,768,007 89,159,692 5,294,651 6,810,924

End of period

$ 265,059,209 $ 70,768,007 $ 20,051,696 $ 5,294,651

See accompanying notes

17

American Beacon FundsSM

Notes to Financial Statements

June 30, 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 non-diversified,open-end management investment companies. As of June 30, 2021, the Trust consists of twenty-eight active series, two of which are presented in this filing: American Beacon Shapiro Equity Opportunities Fund and American Beacon Shapiro SMID Cap Equity 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 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

18

American Beacon FundsSM

Notes to Financial Statements

June 30, 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 Funds in preparation of the financial statements. The Funds are considered investment companies and accordingly, follow the investment company accounting and reporting guidance of the FASB Accounting Standards Codification Topic 946, Financial Services - Investment Companies, a part of Generally Accepted Accounting Principles ('U.S. GAAP').

Security Transactions and Investment Income

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

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

Currency Translation

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

Distributions to Shareholders

The Funds distribute most or all of 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.

19

American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

Allocation of Income, Trust Expenses, Gains, and Losses

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

Use of Estimates

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

Other

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

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 $5 billion

0.35 %

Next $5 billion

0.325 %

Next $10 billion

0.30 %

Over $20 billion

0.275 %

The Trust, on behalf of the Funds, and the Manager have entered into Investment Advisory Agreement with Shapiro Capital Management LLC ('Shapiro'), an affiliate of the Manager pursuant to which each Fund has agreed to pay Shapiro an annualized sub-advisory fee that is calculated and accrued daily based on the Funds' average daily net assets according to the following schedule:

Shapiro Equity Opportunities Fund

First $250 million

0.35 %

Next $250 million

0.30 %

Over $500 million

0.25 %

Shapiro SMID Cap Equity Fund

First $250 million

0.40 %

Next $250 million

0.35 %

Over $500 million

0.30 %

20

American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

The Management and Sub-Advisory Fees paid by the Funds for the year ended June 30, 2021 were as follows:

Shapiro Equity Opportunities Fund

Effective Fee Rate Amount of Fees Paid

Management Fees

0.35 % $ 487,121

Sub-Advisor Fees

0.35 % 486,413

Total

0.70 % $ 973,534

Shapiro SMID Cap Equity Fund

Effective Fee Rate Amount of Fees Paid

Management Fees

0.35 % $ 44,067

Sub-Advisor Fees

0.40 % 50,001

Total

0.75 % $ 94,068

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 June 30, 2021, the Manager received securities lending fees of $347 and $330 for the securities lending activities of the Shapiro Equity Opportunities Fund and Shapiro SMID Cap Equity Fund, respectively.

Service Plans

The Manager and the Trust entered into Service Plans that obligate the Manager to oversee additional shareholder servicing of the Investor Class of the Funds. As compensation for performing the duties required under the Service Plans, the Manager receives an annualized fee up to 0.375% of the average daily net assets attributable to 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 June 30, 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

Shapiro Equity Opportunities

$ 75,226

Shapiro SMID Cap Equity

4,401

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June 30, 2021

As of June 30, 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

Shapiro Equity Opportunities

$ 13,600

Shapiro SMID Cap Equity

652

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 a June 30, 2021 fair value and dividend income earned from the investment in the USG Select Fund.

Affiliated Security

Type of
Transaction
Fund June 30, 2021
Shares/Principal
Change in
Unrealized
Gain (Loss)
Realized
Gain
(Loss)
Dividend
Income
June 30, 2021
Fair Value
U.S. Government Money Market Select Direct Shapiro Equity
Opportunities
$ 9,827,019 $ - $ - $ 392 $ 9,827,019
U.S. Government Money Market Select Direct Shapiro SMID
Cap Equity
172,284 - - 36 172,284

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 June 30, 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

Shapiro Equity Opportunities

$ 5,297 $ 262 $ 5,559

Shapiro SMID Cap Equity

523 346 869

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 June 30, 2021, the Shapiro Equity Opportunities Fund borrowed on average $33,323 for 2 days at an average interest rate of 0.87% with interest charges of $2 and the Shapiro SMID Cap Equity Fund borrowed on average $1,103,869 for 2 days at an average interest rate of 0.83% with interest charges of $50. These amounts are recorded as 'Other expenses' in the Statements of Operations.

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June 30, 2021

Expense Reimbursement Plan

The Manager contractually agreed to reduce fees and/or reimburse expenses for the classes of the Funds to the extent that total operating expenses exceed the Funds' expense cap. During the year ended June 30, 2021, the Manager waived and/or reimbursed expenses as follows:

Expense Cap Expiration of
Reimbursed
Expenses

Fund

Class 7/1/2020 -
10/31/2020
11/1/2020 -
6/30/2021
Reimbursed
Expenses
(Recouped)
Expenses

Shapiro Equity Opportunities

R5 0.79 % 0.79 % $ 38,423 $ (1,463 )* 2023 - 2024

Shapiro Equity Opportunities

Y 0.89 % 0.89 % 45,919 - 2023 - 2024

Shapiro Equity Opportunities

Investor 1.17 % 1.06 % 9,361 - 2023 - 2024

Shapiro SMID Cap Equity

R5 0.89 % 0.89 % 82,207 (4,306 )* 2023 - 2024

Shapiro SMID Cap Equity

Y 0.99 % 0.99 % 54,877 - 2023 - 2024

Shapiro SMID Cap Equity

Investor 1.27 % 1.18 % 26,247 - 2023 - 2024

* These amounts represents Recouped Expenses from prior fiscal years and is reflected in Total Expenses on the Statements of Operations.

Of these amounts, $9,542 and $25,367 were disclosed as a Receivable for Expense Reimbursement on the Statements of Assets and Liabilities at June 30, 2021 for the Shapiro Equity Opportunities Fund and Shapiro SMID Cap Equity 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

Shapiro Equity Opportunities

$ - $ - $ 119,182 2020 - 2021

Shapiro Equity Opportunities

1,463 144,925 - 2021 - 2022

Shapiro Equity Opportunities

- 158,760 - 2022 - 2023

Shapiro SMID Cap Equity

3,184 - 115,858 2020 - 2021

Shapiro SMID Cap Equity

1,122 126,252 - 2021 - 2022

Shapiro SMID Cap Equity

- 145,928 - 2022 - 2023

Concentration of Ownership

From time to time, the Funds may have a concentration of one or more accounts constituting a significant percentage of shares outstanding. Investment activities by holders of accounts that represent a significant ownership of more than 5% of the Funds' outstanding shares could have a material impact on the Funds. As of June 30, 2021, based on management's evaluation of the shareholder account base, three accounts have been identified as representing an unaffiliated significant ownership of approximately 29% for the Shapiro Equity Opportunities Fund and one account has been identified as representing an affiliated significant ownership of approximately 21% for the Shapiro SMID Cap Equity Fund.

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American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

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 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 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

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American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

security has been de-listed from a national exchange. A security with limited market liquidity may require fair value pricing if the Manager determines that the available price does not reflect the security's true market value. In addition, if a significant event that the Manager determines to affect the value of one or more securities held by the Fund occurs after the close of a related exchange but before the determination of the Fund's NAV, fair value pricing may be used on the affected security or securities. Securities of small-capitalization companies are also more likely to require a fair value determination using these procedures because they are more thinly traded and less liquid than the securities of larger-capitalization companies. The Fund may fair value securities as a result of significant events occurring after the close of the foreign markets in which the Fund invests as described below. In addition, the Fund may invest in illiquid securities requiring these procedures.

The Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund's pricing time of 4:00 p.m. ET. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. If the Manager determines that the last quoted prices of non-U.S. securities will, in its judgment, materially affect the value of some or all its portfolio securities, the Manager can adjust the previous closing prices to reflect what it believes to be the fair value of the securities as of the close of the Exchange. In deciding whether it is necessary to adjust closing prices to reflect fair value, the Manager reviews a variety of factors, including developments in foreign markets, the performance of U.S. securities markets, and the performance of instruments trading in U.S. markets that represent foreign securities and baskets of foreign securities. These securities are fair valued using a pricing service, using methods approved by the Board, that considers the correlation of the trading patterns of the foreign security to intraday trading in the U.S. markets, based on indices of domestic securities and other appropriate indicators such as prices of relevant American Depositary Receipts ('ADRs') and futures contracts. The Valuation Committee, established by the Board, may also fair value securities in other situations, such as when a particular foreign market is closed but the Fund is open. The Fund uses outside pricing services to provide closing prices and information to evaluate and/or adjust those prices. As a means of evaluating its security valuation process, the Valuation Committee routinely compares closing prices, the next day's opening prices in the same markets and adjusted prices.

Attempts to determine the fair value of securities introduce an element of subjectivity to the pricing of securities. As a result, the price of a security determined through fair valuation techniques may differ from the price quoted or published by other sources and may not accurately reflect the market value of the security when trading resumes. If a reliable market quotation becomes available for a security formerly valued through fair valuation techniques, the Manager compares the new market quotation to the fair value price to evaluate the effectiveness of the Fund's fair valuation procedures. If any significant discrepancies are found, the Manager may adjust the Fund's fair valuation procedures.

Valuation Inputs

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

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

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

Common stocks 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

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American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

these securities are actively traded and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred securities and other equities traded on inactive markets or valued by reference to similar instruments are generally categorized as Level 2 of the fair value hierarchy.

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

4. Securities and Other Investments

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 Funds at times may invest in shares of other investment companies, including money market funds and ETFs. The Funds 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 companies, the Funds become a shareholder of that investment company. As a result, 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 Funds' shareholders directly bear in connection with the Funds' 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 Funds in their Prospectus. Investment 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.

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.

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American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

5. Principal Risks

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

Dividend Risk

The Funds focus on dividend-paying stocks could cause the Funds to underperform funds that invest without consideration of a company's track record of paying dividends. An issuer of stock held by the Funds may choose not to declare a dividend or the dividend rate might not remain at current levels or increase over time. Dividend paying stocks might not experience the same level of earnings growth or capital appreciation as non-dividend paying stocks. In addition, stocks of companies with a history of paying dividends may not participate in a broad market advance to the same degree as most other stocks, and a sharp rise in interest rates or an economic downturn could cause a company to unexpectedly reduce or eliminate its dividend. Securities that pay dividends may be sensitive to changes in interest rates, and as interest rates rise, the prices of such securities may fall. At times, the Funds may not be able to identify dividend-paying stocks that are attractive investments. The income received by the Funds will also fluctuate due to the amount of dividends that companies elect to pay.

Equity Investments Risk

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

Focused Holdings Risk

Because the Funds may have a focused portfolio of fewer companies, the increase or decrease of the value of a single stock may have a greater impact on the Funds' NAV and total return when compared to other funds. Although a focused portfolio has the potential to generate attractive returns over time, it also may increase the Funds' volatility.

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 a 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

27

American Beacon FundsSM

Notes to Financial Statements

June 30, 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 Funds to experience a loss or difficulty in selling investments to meet redemption requests by shareholders and may increase a Funds' portfolio turnover, which will increase the costs that the Funds incurs and lower a Funds' performance. Even when securities markets perform well, there is no assurance that the investments held by the Funds 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 Funds 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.

Non-Diversification Risk

When the Funds is non-diversified, it may invest a high percentage of its assets in a limited number of issuers. When the Funds invest in a relatively small number of issuers, it may be more susceptible to risks associated with a single economic, political or regulatory occurrence than a more diversified portfolio might be. Some of those issuers also may present substantial credit or other risks. When the Funds are non-diversified, its NAV and total return may also fluctuate more or be subject to declines in weaker markets than a diversified mutual fund. Investments in securities of a limited number of issuers exposes the Fund to greater market risk, price volatility and potential losses than if assets were diversified among the securities of a greater number of issuers.

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American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

Other Investment Companies Risk

To the extent that the Funds invests 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 invests 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 invests in other investment companies that invest in equity securities, fixed-income securities and/or foreign securities, or that track an index, the Funds 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. The impact of the outbreak has been rapidly evolving, and the transmission of COVID-19 and efforts to contain its spread have resulted, and may continue to result, in significant disruptions to business operations, supply chains and customer activity, widespread business closures and layoffs, travel restrictions, closed international, national and local borders, enhanced health screenings at ports of entry and elsewhere, prolonged quarantines and stay-at-home orders, disruption of and delays in healthcare service preparation and delivery, service and event cancellations, reductions and other changes, and lower consumer demand, as well as general concern and uncertainty that has negatively affected the global economy. Markets generally have also been adversely impacted by reduced demand for oil and other energy commodities as a result of the slowdown in economic activity resulting from the spread of COVID-19 and by price competition among key oil producing companies. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty and further developments could result in additional disruptions and uncertainty. These impacts have caused significant volatility in global financial markets, which have caused and may continue to cause losses for investors. 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 has taken numerous measures to address the economic impact of the COVID-19 pandemic, such as the reduction of the federal funds target rate and the introduction of several credit and liquidity facilities, and the U.S. federal government has taken steps to stimulate the U.S. economy, including adopting stimulus packages targeted at large parts of the economy. The ultimate effects of these and other efforts that may be taken may not be known for some time, and it is not known whether and to what extent they will be successful. In addition, COVID-19 has caused and may continue to cause employees and vendors at various businesses, including the Manager and other service providers, to work at external locations, and could cause extensive medical absences. Not all events that could affect the business of the Manager, or other service providers can be determined and addressed in advance. The impact of COVID-19 and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. Deteriorating economic fundamentals may in turn increase the risk of default or insolvency of particular issuers, negatively impact market value, increase market volatility, cause credit spreads to widen, and reduce liquidity. The impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. The Federal Reserve has spent hundreds of billions of dollars to keep credit flowing through short-term money markets. The Federal Reserve has signaled that it plans to maintain its interventions at an elevated level. Amid the Federal Reserve's ongoing efforts, concerns about the markets' dependence on the Federal Reserve's provision of liquidity have grown. The U.S. government has reduced the federal corporate income tax rate, and future legislative, regulatory and policy changes may result in more

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American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the market's expectations for changes in government policies are not borne out. 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 January 31, 2020, commonly referred to as 'Brexit,' and trade agreement negotiations during the transition period, 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 global economic powers or 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. Interest rates have been unusually low in recent years in the U.S. and abroad and are currently at historic lows. The impact of Brexit is not yet known. The effect on the United Kingdom's economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are currently being negotiated. The outcome of Brexit may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time, which could significantly adversely affect the value of a Fund's investments in the United Kingdom and Europe.

Economists and others have expressed increasing concern about the potential effects of global climate change on property and security values. Impacts from climate change may include significant risks to global financial assets and economic growth. A rise in sea levels, an increase in powerful windstorms and/or a climate-driven increase in sea levels or flooding could cause coastal properties to lose value or become unmarketable altogether. 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. Regulatory changes and divestment movements tied to concerns about climate change could adversely affect the value of certain land and the viability of industries whose activities or products are seen as accelerating climate change. These losses could adversely affect, among others, corporate issuers and mortgage lenders, the value of mortgage-backed securities, the bonds of municipalities that depend on tax or other revenues and tourist dollars generated by affected properties, and insurers of the property and/or of corporate, municipal or mortgage-backed securities.

Securities Lending Risk

A Fund may lend its portfolio securities to brokers, dealers and financial institutions to seek income. Borrowers of the Funds' securities provide collateral either in the form of cash, which the Funds 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 Funds will be responsible for the risks associated with the investment of cash collateral, including any collateral invested in an affiliated money market fund. The Funds 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 Funds 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 Funds' 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 Funds 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 Funds' collateral is inadequate. Although the Funds' securities lending agent may indemnify the Funds 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 Funds before an ex-dividend date, whether or not due to a default by the borrower, the payment in lieu of the dividend that the Funds receives from

30

American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

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.'

Securities Selection Risk

Securities selected by the sub-advisor or the Manager for the Funds may not perform to expectations. The portfolio managers' judgments about the attractiveness, value and anticipated price movements of a particular asset class or individual security may be incorrect, and there is no guarantee that individual securities will perform as anticipated. The value of an individual security can be more or less volatile than the market as a whole or a relative value approach may fail to produce the intended results. The portfolio managers' assessment of relative value may be wrong or even if the assessment of relative value is correct, it may take a long period of time before the price and intrinsic value converge. It may not be possible to predict, or to hedge against, a widening in the yield spread of the securities selected by a sub-advisor. This could result in the Funds' underperformance compared to other funds with similar investment objectives.

6. 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 June 30, 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:

Shapiro Equity Opportunities Fund Shapiro SMID Cap Equity Fund
Year Ended
June 30, 2021
Year Ended
June 30, 2020
Year Ended
June 30, 2021
Year Ended
June 30, 2020

Distributions paid from:

Ordinary income*

R5 Class

$ 562,713 $ 2,227,652 $ 73,122 $ 165,368

Y Class

569,322 1,436,275 1,790 10,801

Investor Class

15,801 26,686 14,982 36,657

Long-term capital gains

R5 Class

627,265 722,637 - 205,333

Y Class

634,634 465,919 - 13,411

Investor Class

18,377 9,151 - 45,518

Total distributions paid

$ 2,428,112 $ 4,888,320 $ 89,894 $ 477,088

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

31

American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

As of June 30, 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)

Shapiro Equity Opportunities

$ 222,418,365 $ 41,168,279 $ (292,548 ) $ 40,875,731

Shapiro SMID Cap Equity

17,206,636 2,526,317 (201,450 ) 2,324,867

Fund

Net Unrealized
Appreciation
(Depreciation)
Undistributed
Ordinary
Income
Undistributed
Long-Term
Capital Gains
Accumulated
Capital and
Other (Losses)
Other Temporary
Differences
Distributable
Earnings

Shapiro Equity Opportunities

$ 40,875,731 $ 5,638,983 $ 3,723,556 $ - $ (2,216 ) $ 50,236,054

Shapiro SMID Cap Equity

2,324,867 700,971 553,003 - (2,567 ) 3,576,274

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 and organizational expenses.

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 June 30, 2021.

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

As of June 30, 2021, the Funds did not have any 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 June 30, 2021 were as follows:

Fund

Purchases (non-U.S.
Government Securities)
Sales (non-U.S.
Government Securities)

Shapiro Equity Opportunities

$ 157,093,129 $ 42,637,220

Shapiro SMID Cap Equity

16,394,631 7,486,094

A summary of the Funds' transactions in the USG Select Fund for the year ended June 30, 2021 were as follows:

Fund

Type of
Transaction
June 30,
2020
Shares/Fair
Value
Purchases Sales June 30,
2021
Shares/Fair
Value
Shapiro Equity Opportunities Direct $ 284,009 $ 130,345,439 $ 120,802,429 $ 9,827,019
Shapiro Equity Opportunities Securities Lending - 26,173,859 26,173,859 -
Shapiro SMID Cap Equity Direct 69,818 16,495,739 16,393,273 172,284
Shapiro SMID Cap Equity Securities Lending 75,500 15,883,928 15,959,428 -

32

American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

8. 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 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.

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.

The Funds did not have any securities on loan or hold any securities lending collateral as of the year ended June 30, 2021.

9. 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')

33

American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

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.

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.

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 June 30, 2021, the Funds did not utilize this facility.

10. Capital Share Transactions

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

R5 Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

Shapiro Equity Opportunities Fund

Shares

Amount

Shares

Amount

Shares sold 256,960 $ 3,957,915 237,120 $ 2,564,845
Reinvestment of dividends 90,424 1,189,978 254,403 2,935,816
Shares redeemed (344,969 ) (5,474,114 ) (923,683 ) (6,848,462 )
Net increase (decrease) in shares outstanding 2,415 $ (326,221 ) (432,160 ) $ (1,347,801 )
Y Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

Shapiro Equity Opportunities Fund

Shares

Amount

Shares

Amount

Shares sold 7,617,805 $ 115,368,852 271,716 $ 2,702,820
Reinvestment of dividends 90,271 1,185,265 164,978 1,902,194
Shares redeemed (472,852 ) (6,693,705 ) (377,492 ) (3,757,703 )
Net increase in shares outstanding 7,235,224 $ 109,860,412 59,202 $ 847,311
Investor Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

Shapiro Equity Opportunities Fund

Shares

Amount

Shares

Amount

Shares sold 1,235,787 $ 19,309,593 18,019 $ 180,454
Reinvestment of dividends 2,627 34,178 3,127 35,837
Shares redeemed (123,519 ) (1,956,819 ) (52,559 ) (493,525 )
Net increase (decrease) in shares outstanding 1,114,895 $ 17,386,952 (31,413 ) $ (277,234 )

34

American Beacon FundsSM

Notes to Financial Statements

June 30, 2021

R5 Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

Shapiro SMID Cap Equity Fund

Shares

Amount

Shares

Amount

Shares sold 100 $ 1,250 1,641 $ 15,879
Reinvestment of dividends 3,195 33,221 15,115 146,313
Shares redeemed (1,180 ) (15,709 ) - -
Net increase in shares outstanding 2,115 $ 18,762 16,756 $ 162,192
Y Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

Shapiro SMID Cap Equity Fund

Shares

Amount

Shares

Amount

Shares sold 944,402 $ 11,828,025 548 $ 5,300
Reinvestment of dividends 35 364 1,736 16,765
Shares redeemed (316,017 ) (4,281,798 ) (29,530 ) (220,721 )
Net increase (decrease) in shares outstanding 628,420 $ 7,546,591 (27,246 ) $ (198,656 )
Investor Class
Year Ended
June 30, 2021
Year Ended
June 30, 2020

Shapiro SMID Cap Equity Fund

Shares

Amount

Shares

Amount

Shares sold 176,586 $ 2,221,346 8,136 $ 71,758
Reinvestment of dividends 1,321 13,557 7,792 74,726
Shares redeemed (33,225 ) (391,507 ) (10,591 ) (95,696 )
Net increase in shares outstanding 144,682 $ 1,843,396 5,337 $ 50,788

11. Subsequent Events

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

35

American Beacon Shapiro Equity Opportunities FundSM

Financial Highlights

(For a share outstanding throughout the period)

R5 ClassA
Year Ended June 30, September 12,
2017B to
June 30,
2021 2020 2019 2018

Net asset value, beginning of period

$ 9.44 $ 11.28 $ 11.29 $ 10.00

Income (loss) from investment operations:

Net investment income

0.12 0.14 0.11 0.02

Net gains (losses) on investments (both realized and unrealized)

7.49 (1.36 ) 0.16 1.29

Total income (loss) from investment operations

7.61 (1.22 ) 0.27 1.31

Less distributions:

Dividends from net investment income

(0.05 ) (0.11 ) (0.07 ) (0.02 )

Distributions from net realized gains

(0.23 ) (0.51 ) (0.21 ) (0.00 )C

Total distributions

(0.28 ) (0.62 ) (0.28 ) (0.02 )

Net asset value, end of period

$ 16.77 $ 9.44 $ 11.28 $ 11.29

Total returnD

81.43 % (11.84 )% 2.97 % 13.07 %E

Ratios and supplemental data:

Net assets, end of period

$ 71,421,117 $ 40,207,550 $ 52,917,588 $ 43,796,676

Ratios to average net assets:

Expenses, before reimbursements

0.86 % 0.97 % 0.98 % 2.81 %F

Expenses, net of reimbursements

0.79 % 0.79 % 0.79 % 0.79 %F

Net investment income (loss), before expense reimbursements

0.82 % 1.11 % 0.80 % (1.53 )%F

Net investment income, net of reimbursements

0.89 % 1.29 % 0.99 % 0.49 %F

Portfolio turnover rate

31 % 59 % 54 % 9 %G
A

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

B

Commencement of operations.

C

Amount represents less than $0.01 per share.

D

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

E

Not annualized.

F

Annualized.

G

Portfolio turnover rate is for the period from September 12, 2017 through June 30, 2018 and is not annualized.

See accompanying notes

36

American Beacon Shapiro Equity Opportunities FundSM

Financial Highlights

(For a share outstanding throughout the period)

Y Class
Year Ended June 30, September 12,
2017A to
June 30,
2021 2020 2019 2018

Net asset value, beginning of period

$ 9.43 $ 11.28 $ 11.30 $ 10.00

Income (loss) from investment operations:

Net investment income

0.06 0.12 0.10 0.03

Net gains (losses) on investments (both realized and unrealized)

7.51 (1.35 ) 0.16 1.29

Total income (loss) from investment operations

7.57 (1.23 ) 0.26 1.32

Less distributions:

Dividends from net investment income

(0.05 ) (0.11 ) (0.07 ) (0.02 )

Distributions from net realized gains

(0.23 ) (0.51 ) (0.21 ) (0.00 )B

Total distributions

(0.28 ) (0.62 ) (0.28 ) (0.02 )

Net asset value, end of period

$ 16.72 $ 9.43 $ 11.28 $ 11.30

Total returnC

81.09 % (11.92 )% 2.88 % 13.17 %D

Ratios and supplemental data:

Net assets, end of period

$ 174,605,529 $ 30,239,629 $ 35,505,884 $ 26,419,367

Ratios to average net assets:

Expenses, before reimbursements

0.95 % 1.09 % 1.06 % 2.77 %E

Expenses, net of reimbursements

0.89 % 0.89 % 0.89 % 0.89 %E

Net investment income (loss), before expense reimbursements

0.77 % 0.99 % 0.77 % (0.79 )%E

Net investment income, net of reimbursements

0.83 % 1.19 % 0.94 % 1.09 %E

Portfolio turnover rate

31 % 59 % 54 % 9 %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 September 12, 2017 through June 30, 2018 and is not annualized.

See accompanying notes

37

American Beacon Shapiro Equity Opportunities FundSM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class
Year Ended June 30, September 12,
2017A to
June 30,
2021 2020 2019 2018

Net asset value, beginning of period

$ 9.35 $ 11.20 $ 11.25 $ 10.00

Income (loss) from investment operations:

Net investment income

0.08 0.08 0.07 0.02

Net gains (losses) on investments (both realized and unrealized)

7.41 (1.34 ) 0.16 1.25

Total income (loss) from investment operations

7.49 (1.26 ) 0.23 1.27

Less distributions:

Dividends from net investment income

(0.05 ) (0.08 ) (0.07 ) (0.02 )

Distributions from net realized gains

(0.23 ) (0.51 ) (0.21 ) (0.00 )B

Total distributions

(0.28 ) (0.59 ) (0.28 ) (0.02 )

Net asset value, end of period

$ 16.56 $ 9.35 $ 11.20 $ 11.25

Total returnC

80.85 % (12.20 )% 2.62 % 12.67 %D

Ratios and supplemental data:

Net assets, end of period

$ 19,032,563 $ 320,828 $ 736,220 $ 180,767

Ratios to average net assets:

Expenses, before reimbursements

1.26 % 2.20 % 2.57 % 4.88 %E

Expenses, net of reimbursements

1.06 % 1.17 % 1.17 % 1.17 %E

Net investment income (loss), before expense reimbursements

0.57 % (0.11 )% (0.74 )% (3.54 )%E

Net investment income, net of reimbursements

0.77 % 0.92 % 0.66 % 0.17 %E

Portfolio turnover rate

31 % 59 % 54 % 9 %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 September 12, 2017 through June 30, 2018 and is not annualized.

See accompanying notes

38

American Beacon Shapiro SMID Cap Equity FundSM

Financial Highlights

(For a share outstanding throughout the period)

R5 ClassA
Year Ended June 30, September 12,
2017B to
June 30,
2021 2020 2019 2018

Net asset value, beginning of period

$ 7.62 $ 9.72 $ 11.39 $ 10.00

Income (loss) from investment operations:

Net investment income

0.07 C 0.04 0.05 0.01

Net gains (losses) on investments (both realized and unrealized)

6.13 (1.46 ) (0.97 ) 1.38

Total income (loss) from investment operations

6.20 (1.42 ) (0.92 ) 1.39

Less distributions:

Dividends from net investment income

(0.00 )D (0.05 ) (0.04 ) -

Distributions from net realized gains

(0.13 ) (0.63 ) (0.71 ) -

Total distributions

(0.13 ) (0.68 ) (0.75 ) -

Net asset value, end of period

$ 13.69 $ 7.62 $ 9.72 $ 11.39

Total returnE

81.91 % (16.09 )% (6.67 )% 13.90 %F

Ratios and supplemental data:

Net assets, end of period

$ 7,711,085 $ 4,276,389 $ 5,293,291 $ 5,124,948

Ratios to average net assets:

Expenses, before reimbursements

2.24 % 3.22 % 2.84 % 4.32 %G

Expenses, net of reimbursementsH

0.89 % 0.90 % 0.89 % 0.89 %G

Net investment (loss), before expense reimbursements

(0.71 )% (1.84 )% (1.47 )% (3.34 )%G

Net investment income, net of reimbursements

0.64 % 0.48 % 0.48 % 0.08 %G

Portfolio turnover rate

64 % 48 % 56 % 22 %I
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 PQ Group Holdings, Inc. amounting to $0.0223.

D

Amount represents less than $0.01 per share.

E

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

F

Not annualized.

G

Annualized.

H

Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses.

I

Portfolio turnover rate is for the period from September 12, 2017 through June 30, 2018 and is not annualized.

See accompanying notes

39

American Beacon Shapiro SMID Cap Equity FundSM

Financial Highlights

(For a share outstanding throughout the period)

Y Class
Year Ended June 30, September 12,
2017A to
June 30,
2021 2020 2019 2018

Net asset value, beginning of period

$ 7.60 $ 9.71 $ 11.39 $ 10.00

Income (loss) from investment operations:

Net investment income

0.04 B C 0.05 0.04 0.01

Net gains (losses) on investments (both realized and unrealized)

6.12 (1.48 ) (0.97 ) 1.38

Total income (loss) from investment operations

6.16 (1.43 ) (0.93 ) 1.39

Less distributions:

Dividends from net investment income

(0.00 )D (0.05 ) (0.04 ) -

Distributions from net realized gains

(0.13 ) (0.63 ) (0.71 ) -

Total distributions

(0.13 ) (0.68 ) (0.75 ) -

Net asset value, end of period

$ 13.63 $ 7.60 $ 9.71 $ 11.39

Total returnE

81.60 % (16.21 )% (6.76 )% 13.90 %F

Ratios and supplemental data:

Net assets, end of period

$ 8,753,769 $ 104,553 $ 398,161 $ 215,795

Ratios to average net assets:

Expenses, before reimbursements

2.21 % 3.33 % 2.87 % 5.69 %G

Expenses, net of reimbursementsH

0.99 % 1.00 % 0.99 % 0.99 %G

Net investment (loss), before expense reimbursements

(0.94 )% (1.91 )% (1.47 )% (4.47 )%G

Net investment income, net of reimbursements

0.28 % 0.42 % 0.41 % 0.22 %G

Portfolio turnover rate

64 % 48 % 56 % 22 %I
A

Commencement of operations.

B

Net investment income includes significant dividend payment from PQ Group Holdings, Inc. amounting to $0.0412.

C

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

D

Amount is less than $0.01 per share.

E

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

F

Not annualized.

G

Annualized.

H

Expense ratios may exceed stated expense caps in Note 2 due to security lending expenses.

I

Portfolio turnover rate is for the period from September 12, 2017 through June 30, 2018 and is not annualized.

See accompanying notes

40

American Beacon Shapiro SMID Cap Equity FundSM

Financial Highlights

(For a share outstanding throughout the period)

Investor Class
Year Ended June 30, September 12,
2017A to
June 30,
2021 2020 2019 2018

Net asset value, beginning of period

$ 7.53 $ 9.65 $ 11.36 $ 10.00

Income (loss) from investment operations:

Net investment income (loss)

0.05 B 0.01 0.04 (0.01 )

Net gains (losses) on investments (both realized and unrealized)

6.03 (1.45 ) (1.00 ) 1.37

Total income (loss) from investment operations

6.08 (1.44 ) (0.96 ) 1.36

Less distributions:

Dividends from net investment income

(0.00 )C (0.05 ) (0.04 ) -

Distributions from net realized gains

(0.13 ) (0.63 ) (0.71 ) -

Total distributions

(0.13 ) (0.68 ) (0.75 ) -

Net asset value, end of period

$ 13.48 $ 7.53 $ 9.65 $ 11.36

Total returnD

81.29 % (16.43 )% (7.06 )% 13.60 %E

Ratios and supplemental data:

Net assets, end of period

$ 3,586,842 $ 913,709 $ 1,119,472 $ 352,882

Ratios to average net assets:

Expenses, before reimbursements

2.59 % 3.86 % 3.87 % 6.12 %F

Expenses, net of reimbursementsG

1.20 % 1.28 % 1.27 % 1.27 %F

Net investment (loss), before expense reimbursements

(1.14 )% (2.49 )% (2.44 )% (5.09 )%F

Net investment income (loss), net of reimbursements

0.25 % 0.09 % 0.16 % (0.24 )%F

Portfolio turnover rate

64 % 48 % 56 % 22 %H
A

Commencement of operations.

B

Net investment income includes significant dividend payment from PQ Group Holdings, Inc. amounting to $0.0339.

C

Amount represents less than $0.01 per share.

D

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

E

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 September 12, 2017 through June 30, 2018 and is not annualized.

See accompanying notes

41

American Beacon FundsSM

Federal Tax Information

June 30, 2021 (Unaudited)

Certain tax information regarding the Funds are required to be provided to shareholders based upon the Fund's income and distributions for the taxable year ended June 30, 2021. The information and distributions reported herein may differ from information and distributions taxable to the shareholders for the calendar year ended December 31, 2020.

The Fund designated the following items with regard to distributions paid during the fiscal year ended June 30, 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:

Shapiro Equity Opportunities

100.00 %

Shapiro SMID Cap Equity

62.23 %

Qualified Dividend Income:

Shapiro Equity Opportunities

100.00 %

Shapiro SMID Cap Equity

62.23 %

Long-Term Capital Gain Distributions:

Shapiro Equity Opportunities

$ 1,280,276

Shapiro SMID Cap Equity

-

Short-Term Capital Gain Distributions:

Shapiro Equity Opportunities

$ 692,579

Shapiro SMID Cap Equity

88,376

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

42

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 Shapiro Equity Opportunities Fund ('Equity Opportunities Fund') and the American Beacon Shapiro SMID Cap Equity Fund ('SMID Cap Fund') (each, a 'Fund' and collectively, the 'Funds'); and (2) the Investment Advisory Agreement among the Manager, Shapiro Capital Management, LLC (the 'subadvisor'), and the Trust, on behalf of the Funds. 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 Agreement, 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 Funds 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 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.

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 each Fund's investment management and subadvisory relationships separately. In each instance, the Board considered, among

43

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 Funds and the subadvisor for the Funds; (3) the costs incurred by the Manager and the subadvisor in rendering services to the Funds and their resulting profits or losses; (4) comparisons of services and fee rates with contracts entered into by the Manager or the subadvisor or their affiliates with other clients (such as pension funds and other institutional clients); (5) the extent to which economies of scale, if any, have been taken into account in setting each fee rate schedule; (6) whether fee rate levels reflect economies of scale, if any, for the benefit of Fund investors; and (7) any other benefits derived or anticipated to be derived by the Manager or the subadvisor from their relationships with the 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 performance since its inception on September 12, 2017; the length of service of key investment personnel at the Manager; the cost structure of the Funds; the Manager's culture of compliance and support that reduce risks to the Funds; the Manager's quality of services; the Manager's active role in monitoring and, as appropriate, recommending additional or replacement subadvisors; and the Manager's efforts to retain key employees and maintain staffing levels.

With respect to the renewal of the Investment Advisory 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 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 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/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 each Fund's Broadridge Performance Universe. The Board also considered that the Performance Universes selected by Broadridge may not provide appropriate comparisons for a Fund. In addition, the Board considered the performance reports and discussions with management at Board and Committee meetings throughout the year. The Board also evaluated the comparative information provided by the subadvisor regarding the performance of each Fund relative to the performance of each Fund's current and previous benchmark index and, with respect to the Equity Opportunities Fund, a composite of comparable investment accounts managed by the subadvisor. 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 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 and the Subadvisor from their Relationships 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 sustaining a loss before and after the payment of distribution-related expenses by the Manager with respect to each 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 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 each Fund and its share classes, the Manager is waiving fees and/or reimbursing expenses.

44

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

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 the Funds. 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 the subadvisor in connection with its investment advisory services to the Funds, the Board considered representations made by the subadvisor that the fee rate schedule for the Equity Opportunities Fund generally was favorable compared to other comparable accounts, and that the subadvisor does not manage any comparable client accounts with respect to the SMID Cap Fund. The Board also considered the cost of services and profitability of the subadvisor.

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 and the profitability levels of the subadvisor were reasonable in light of the services performed by the subadvisor. 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 the Manager has negotiated breakpoints for the subadvisory fee rates.

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 each 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 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 subadvisor as a result of the advisory relationships with the Funds, 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 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. 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 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 1st Quintile represents the top 20 percent of the universe based on performance, and the 5th 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.

In reviewing the performance, the Board viewed longer-term performance over a full market cycle, typically five years or longer, if applicable, 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 Board noted that the Funds had a shorter-term performance record and considered the information provided.

45

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

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 1st Quintile represents the lowest 20 percent of the universe or group based on lowest total expense, and the 5th 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.

For each Fund, the Board considered a Fund's Morningstar fee level category with the 1st Quintile representing the lowest 20 percent of the category constituents and the 5th 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 Shapiro Equity Opportunities Fund

In considering the renewal of the Agreements for the Equity Opportunities 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

2 nd Quintile

Compared to Broadridge Expense Universe

4 th Quintile

Morningstar Fee Level Ranking

4 th Quintile

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

Compared to Broadridge Performance Universe

1 st Quintile

Compared to Morningstar Category

1 st Quintile

The Board also considered: (1) the subadvisor's representation that the fee rate charged to the Equity Opportunities Fund is lower than the fee rate schedule for the subadvisor's separate account clients in the same strategy as the Equity Opportunities Fund; (2) that the subadvisor is an affiliate of the Manager; (3) information provided by the subadvisor regarding its profitability with respect to the services that it provides to the Equity Opportunities Fund; 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 the subadvisor under the Management and Investment Advisory Agreements are fair and reasonable; and (2) determined that the Equity Opportunities Fund and its shareholders would benefit from the Manager's and subadvisor's continued management of the Equity Opportunities Fund.

46

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

Additional Considerations and Conclusions with Respect to the American Beacon Shapiro SMID Cap Equity Fund

In considering the renewal of the Agreements for the SMID 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

1 st Quintile

Compared to Broadridge Expense Universe

3 rd Quintile

Morningstar Fee Level Ranking

4 th Quintile

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

Compared to Broadridge Performance Universe

3 rd Quintile

Compared to Morningstar Category

2 nd Quintile

The Board also considered: (1) that the subadvisor is an affiliate of the Manager; (2) information provided by the subadvisor indicating that it had incurred a loss with respect to the services that it provides to the SMID Cap Fund; (3) the subadvisor's representation that it has no other comparable accounts in the same strategy with similar market cap constraints as the subadvisor manages the SMID Cap Fund; 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 the subadvisor under the Management and Investment Advisory Agreements are fair and reasonable; and (2) determined that the SMID Cap Fund and its shareholders would benefit from the Manager's and subadvisor's continued management of the SMID Cap Fund.

47

Disclosure Regarding Liquidity Risk Management Program (Unaudited)

Rule 22e-4 under the Investment Company Act of 1940, as amended ('Rule 22e-4'), requires open-end registered investment companies (other than money market funds) to adopt and implement a written liquidity risk management program that is reasonably designed to assess and manage liquidity risk. The Fund has adopted a Liquidity Risk Management Program (the 'Program') that is designed to assess and manage liquidity risk, which is the risk that the Fund could not meet requests to redeem its shares without significant dilution of the remaining shareholders' interests in the Fund. Pursuant to Rule 22e-4, the Program includes the following elements:

Assessment, management, and periodic review of liquidity risk;

Classification of each of the Fund's portfolio investments into one of four liquidity categories: highly liquid, moderately liquid, less liquid, and illiquid;

Determination and review of a highly liquid investment minimum for any Fund that does not primarily hold assets that are highly liquid investments;

Policies and procedures to respond to a shortfall in the highly liquid investment minimum, including associated reports to the Fund's Board of Trustees (the 'Board') and the Securities and Exchange Commission ('SEC');

A prohibition against a Fund acquiring an illiquid investment if immediately after the acquisition the Fund would have more than 15% of its net assets invested in illiquid investments that are assets;

Reporting of breaches of the illiquid investment prohibition to the Board and the SEC; and

Policies and procedures regarding how and when a Fund will satisfy redemption requests by distributing portfolio securities or other assets.

The Manager's Liquidity Committee administers the Program and has provided quarterly reports to the Board regarding the Fund's liquidity risk. In addition, at the Board's March 3-4, 2021 meetings, the Board reviewed the Liquidity Committee's written report ('Report') that addressed the operation of the Program and assessed the adequacy and effectiveness of its implementation from January 1, 2020 through December 31, 2020 (the 'review period').

Key conclusions that the Liquidity Committee included in the Report are listed below:

The Program is reasonably designed to assess and manage the Fund's liquidity risk.

The operation of the Program was adequate during the review period.

There were no material changes to the Program during the review period.

The Fund included in this shareholder report was deemed to primarily hold assets that are highly liquid, and no highly liquid investment minimum was recommended.

The Program was effectively implemented by the Liquidity Committee during the review period.

Administration of the Program by the Liquidity Committee continues to be appropriate.

48

Trustees and Officers of the American Beacon FundsSM(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-one funds in the fund complex that includes the Trust, the American Beacon Select Funds, the American Beacon Institutional Funds Trust, the American Beacon Sound Point Enhanced Income Fund, and the American Beacon Apollo Total Return Fund*. The Trust's Statement of Additional Information contains additional information about the Trustees and is available without charge by calling 1-800-658-5811.

Name, Age

Position, Term of

Office and Length

of Time Served

with the Trust

Principal Occupation(s) During Past 5 Years

and Current Directorships

INTERESTED TRUSTEES

Term

Lifetime of Trust until removal, resignation or retirement**
Eugene J. Duffy (66)*** 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-Present); 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-Present); 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); CEO, Capital Southwest Corporation (2013-2015); President & CEO, JBA Investment Partners (family investment vehicle) (2010-Present); Director and Chair of Audit Committee, RSP Permian (oil and gas producer) (2013-2018); Trustee, American Beacon Select Funds (2015-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-2021).
Gerard J. Arpey (62) Trustee since 2012 Director, The Home Depot, Inc. (2015-Present); Partner, Emerald Creek Group (private equity firm) (2011-Present); Director, S.C. Johnson & Son, Inc. (privately held company) (2008-present); Trustee, American Beacon Select Funds (2012-Present); Trustee, American Beacon Institutional Funds Trust (2017-Present); Trustee, American Beacon Sound Point Enhanced Income Fund (2018-Present); Trustee, American Beacon Apollo Total Return Fund (2018-2021).

49

Trustees and Officers of the American Beacon FundsSM(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-Present); Trustee, American Beacon Apollo Total Return Fund (2018-2021).
Claudia A. Holz (63) 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-Present); 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-Present); 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-Present); Trustee, American Beacon Apollo Total Return Fund (2018-2021).

50

Trustees and Officers of the American Beacon FundsSM(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-Present); Director, Shapiro Capital Management LLC (2017-Present); Director, Chairman and CEO, Continuous Capital, LLC (2018-Present); Director, Green Harvest Asset Management (2019-Present); Director, National Investment Services of America, LLC (2019 - Present); President, American Beacon Cayman Managed Futures Strategy Fund, Ltd. (2014-Present); Director and President, American Beacon Cayman Transformational Innovation Company, LTD., (2017-2018); President, American Beacon Delaware Transformational Innovation Corporation (2017-2018); President American Beacon Cayman TargetRisk Company, Ltd. (2018-Present);Member, Investment Advisory Committee, Employees Retirement System of Texas (2017-Present); Trustee, American Beacon NextShares Trust (2015-2020); President, American Beacon Select Funds (2009-Present); President, American Beacon Institutional Funds Trust (2017-Present); President, American Beacon Sound Point Enhanced Income Fund (2018-Present); President, American Beacon Apollo Total Return Fund (2018-2021); Director, RSW Investments Holdings LLC, (2019-Present); Manager, SSI Investment Management, LLC (2019-Present).
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-Present); Chief Legal Officer, Vice President and Secretary American Beacon Apollo Total Return Fund (2018-2021).

51

Trustees and Officers of the American Beacon FundsSM(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

OFFICER (CONT.)

Term

One Year
Brian E. Brett (61) VP since 2004 Senior Vice President, Head of Distribution (2012-Present), Vice President, Director of Sales (2004-2012), American Beacon Advisors, Inc.; Senior Vice President, Resolute Investment Managers, Inc. (2017-Present); Senior Vice President, Resolute Investment Distributors, Inc. (2018-Present); Senior Vice President, Resolute Investment Services, Inc. (2018-Present); Vice President, American Beacon Select Funds (2004-Present); Vice President, American Beacon Institutional Funds Trust (2017-Present); Vice President American Beacon Sound Point Enhanced Income Fund (2018-Present); Vice President American Beacon Apollo Total Return Fund (2018-2021).
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-Present);Vice President American Beacon Apollo Total Return Fund (2018-2021).
Erica Duncan (50) 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 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); Treasurer and CFO, Resolute Investment Managers, Inc. (2017-Present); Treasurer, Resolute Investment Distributors, Inc. (2017-2017); Treasurer and CFO, Resolute Investment Services, Inc. (2015-Present); Treasurer, 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, American Beacon Select Funds (2010-2021); Vice President (2021 - Present), Principal Accounting Officer and Treasurer (2017-2021), American Beacon Institutional Funds Trust; Vice President (2021-Present), 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).

52

Trustees and Officers of the American Beacon FundsSM(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

OFFICER (CONT.)

Term

One Year
Terri L. McKinney (57) VP since 2010 Senior Vice President (2021-Present), Vice President (2009-2021), Managing Director (2003-2009), 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-Present); 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), Vice President (2010-2013), American Beacon Advisors, Inc.; Director (2015-Present), President (2018-Present), Senior Vice Present (2015-2018), Resolute Investment Holdings, LLC; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Topco, Inc.; Director (2015-Present), President (2018-Present), Senior Vice President (2015-2018), Resolute Acquisition, Inc.; Director (2015-Present), President & COO (2018-Present), Senior Vice President (2015-2018), Resolute Investment Managers, Inc.; Director and Executive Vice President (2017-Present), Resolute Investment Distributors, Inc.; Director (2017-Present), President & COO (2018-Present), Executive Vice President (2017-2018), Resolute Investment Services, Inc.; Senior Vice President (2017-Present), Vice President (2012-2017), Manager (2015-Present), American Private Equity Management, LLC; 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-Present); 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-Present); Vice President, American Beacon Apollo Total Return Fund (2018-2021).

53

Trustees and Officers of the American Beacon FundsSM(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

OFFICER (CONT.)

Term

One Year
Christina E. Sears (49)

Chief Compliance

Officer since 2004

and Asst. Secretary since 1999

Vice President, American Beacon Advisors, Inc. (2019-Present); Chief Compliance Officer, American Beacon Advisors, Inc. (2004-Present); Vice President, Resolute Investment Managers, Inc. (2017-Present); Vice President, Resolute Investment Distributors (2017-Present); Vice President, Resolute Investment Services, Inc. (2019-Present); Chief Compliance Officer, American Private Equity Management, LLC (2012-Present); Chief Compliance Officer (2016-2019) and Vice President, Alpha Quant Advisors, LLC (2016-2020); 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-Present); 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, 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); Assistant Treasurer, American Beacon Select Funds (2011-Present); Assistant Treasurer, American Beacon Institutional Funds Trust (2017-Present); Assistant Treasurer, American Beacon Sound Point Enhanced Income Fund (2018-Present); Assistant Treasurer, American Beacon Apollo Total Return Fund (2018-2021).
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-Present); 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-Present); 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-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2018-2021).

54

Trustees and Officers of the American Beacon FundsSM(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

OFFICER (CONT.)

Term

One Year
Teresa A. Oxford (62) 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-Present); 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-Present); Assistant Secretary, American Beacon Apollo Total Return Fund (2021-2021).

* There are currently no series in the American Beacon Apollo Total Return Fund trust.

** 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.

55

American Beacon FundsSM

Privacy Policy

June 30, 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.

56

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:
[email protected] 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 sixty days after the end of each calendar quarter. A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available in the Fund's Statement of Additional Information, is available free of charge on the Fund's website www.americanbeaconfunds.com and by calling 1-800-967-9009 or by accessing the SEC's website at www.sec.gov. The Fund's proxy voting record for the most recent year ended June 30 is filed annually with the SEC on Form N-PX. The Fund's Forms N-PX are available on the SEC's website at www.sec.gov. The Fund's proxy voting record may also be obtained by calling 1-800-967-9009.

Fund Service Providers:

CUSTODIAN

State Street Bank and Trust Company

Boston, Massachusetts

TRANSFER AGENT

DST Asset Manager Solutions, Inc.

Quincy, Massachusetts

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP

Boston, Massachusetts

DISTRIBUTOR

Resolute Investment Distributors, Inc.

Irving, Texas

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

American Beacon Funds, American Beacon Shapiro Equity Opportunities Fund and American Beacon Shapiro SMID Cap Equity Fund are service marks of American Beacon Advisors, Inc.

AR 6/21

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.

SSI ALTERNATIVE INCOME FUND

The use of fixed-income securities, including convertible securities, entails interest rate and credit risks. In addition, the value of a convertible security could fluctuate based on the value of the underlying stock. Investing in derivative instruments involves liquidity, credit, interest rate and market risks. The Fund's investments in high-yield securities, including restricted securities and floating rate securities, are subject to greater levels of credit, interest rate, market and liquidity risks than investment-grade securities. Short sales involve special risks, including greater reliance on the sub-advisor's ability to accurately anticipate the future value of a security or instrument; the Fund's losses are potentially unlimited in a short sale. Investing in foreign and emerging market securities may involve heightened risk due to currency fluctuations and economic and political risks. Investing in small- or mid-capitalization stocks may involve greater volatility and lower liquidity than larger company stocks. 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.

TWENTYFOUR SHORT TERM BOND FUND

The Fund's investments in debt securities entail interest rate risk which is the risk that debt securities will decrease in value with increases in market interest rates. Investing in high-yield securities (commonly referred to as 'junk bonds') is subject to greater levels of credit, interest rate, market and liquidity risks than investment-grade securities. Investing in derivative instruments, including forwards, futures, options, swaps and other instruments, involves liquidity, credit, interest rate and market risks and in some cases the addition of financial leverage, which can magnify these risks. Investing in foreign securities may involve heightened risk due to currency fluctuations and economic and political risks. The Fund may have high portfolio turnover risk, which could increase the Fund's transaction costs and possibly have a negative impact on performance. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. To the extent the Fund invests more heavily in particular sectors, its performance will be sensitive to factors affecting those sectors. Financial sector companies are heavily regulated and particularly sensitive to interest rate fluctuations. To the extent the Fund invests more heavily in a particular country or geographic region, its performance will be sensitive to factors affecting that country or region. United Kingdom securities are subject to continued uncertainty and instability arising from the United Kingdom's departure from the European Union. Geopolitical and other events have led to market disruptions causing adverse changes in the value of investments broadly. Changes in value may be temporary or may last for extended periods. 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.

TWENTYFOUR STRATEGIC INCOME FUND

Investing in derivative instruments involves liquidity, credit, interest rate and market risks. The Fund's investments in debt securities entail interest rate risk which is the risk that debt securities will decrease in value with increases in market interest rates. Investments in high- yield securities, including loans, restricted securities and floating rate securities are subject to greater levels of credit, interest rate, market and liquidity risks than investment-grade securities. The Fund may have high portfolio turnover risk, which could increase the Fund's transaction costs and possibly have a negative impact on performance. To the extent the Fund invests more heavily in particular sectors, its performance will be sensitive to factors affecting those sectors. Financial sector companies are heavily regulated and particularly sensitive to interest rate fluctuations. To the extent the Fund invests more heavily in a particular country or geographic region, its performance will be sensitive to factors affecting that country or region. United Kingdom securities are subject to continued uncertainty and instability arising from the United Kingdom's departure from the European Union. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater effect on the value of the Fund. Investing in foreign and emerging market securities may involve heightened risk due to currency fluctuations and economic and political risks. Please see the prospectus for a complete discussion of the Fund's risks. There can be no assurances that the investment objectives of this Fund will be met.

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

American Beacon Funds

June 30, 2021

Contents

President's Message

1

Market and Performance Overviews

2

Expense Examples

13

Report of Independent Registered Public Accounting Firm

15

Schedules of Investments:

American Beacon SSI Alternative Income Fund

17

American Beacon TwentyFour Short Term Bond Fund

29

American Beacon TwentyFour Strategic Income Fund

33

Financial Statements

43

Notes to Financial Statements

48

Financial Highlights:

American Beacon SSI Alternative Income Fund

86

American Beacon TwentyFour Short Term Bond Fund

89

American Beacon TwentyFour Strategic Income Fund

93

Federal Tax Information

98

Disclosure Regarding Approvals of the Management and Investment Advisory Agreements

99

Disclosures Regarding Liquidity Risk Management Program

105

Trustees and Officers of the American Beacon Funds

106

Privacy Policy

112

Additional Fund Information

Back Cover

President's Message

Dear Shareholders,

Throughout this reporting period, the 24-hour news cycle has continued to closely follow the COVID-19 pandemic, ongoing global vaccination efforts and the rise of the delta variant, U.S. stimulus and infrastructure spending, and the reopening of our nation's businesses and schools. After months of seclusion and uncertainty, we can finally see the proverbial light at the end of a tunnel - and a path forward to potentially brighter days - even as we learn to navigate a world facing additional virus variants.

However, during challenging times such as we've all experienced since March 2020, the fear of loss can be a powerful emotion. And it can cause many individuals to make short-term investment decisions that have the potential to sink their long-term financial objectives. We encourage you to remain

focused on achieving your long-term investment goals by working with financial professionals to develop a 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 crises. By staying the course, 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 continuing your financial journey 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

Global Bond Market Overview

June 30, 2021 (Unaudited)

The COVID-19 pandemic led investment trends over the past 12 months and, despite tremendous progress with treatment and vaccines, a potential resurgence caused by virus variants began dominating headlines at period end as economies experimented with reopening.

The 12-month period began on the heels of the novel coronavirus' proliferation across the U.S. and as countries around the world shut down to slow its spread. The resulting economic contraction was the largest and fastest in modern economic history - more like a natural disaster than a conventional recession - with the 10-year U.S. Treasury yield declining below 0.50% and German bunds dropping below -0.60% (negative 0.60%). Surprisingly, it also proved to be the shortest-lasting contraction in modern history.

Propelled by unprecedented global monetary and fiscal reflation, the equity market recovery was already well underway when this reporting period began, and bond yields started turning up in late 2020. China's real gross domestic product ('GDP') was the first to return to pre-pandemic levels in October 2020. The U.S. was next in the second quarter of 2021, and Europe was close behind at period end.

During the recovery, government bond yields rose while corporate yields declined, causing credit spreads to narrow. The 10-year U.S. Treasury yield began the period at 0.65% and ended at 1.44%, for a total return of -5.9% (a loss of 5.9%). Globally, developed economies recovered more gradually than the U.S., resulting in a 1.2% total return for the Bloomberg Barclays Global Treasury Index in U.S. dollars.

Credit markets were the beneficiaries of low government bond yields and strong investor demand for income. Investment-grade corporate bonds in the Bloomberg Barclays U.S. Corporate Index returned 3.3% despite its yield only declining from 2.2% to 2.1% during the period. High-yield corporates outperformed with the Bloomberg Barclays U.S. High Yield Index producing a 15.4% total return as its yield declined from 7.0% to 4.6%. By comparison, the floating-rate Credit Suisse Leveraged Loan Index returned 11.7%, reflecting its lower duration. In general, issuers with lower credit ratings posted higher returns during the period. The investment-grade Bloomberg Barclays Global Corporate Index also performed well, returning 7.1%, with similar outperformance among lower-quality issuers.

Total returns from securitized issuers, including asset-backed, non-agency mortgages and commercial mortgages, were generally consistent with those in the corporate bond market on a duration-adjusted basis.

As the period drew to a close, markets were priced for global GDP to converge toward its pre-pandemic trend. Growth was expected to be stable and long-lasting, inflation was to be transitory, and the retreat from unprecedented policy stimulus was not expected to be turbulent. If there was any tilt to the bias in the outlook, it was that the world may run too hot, rather than too cold.

In addition, headlines were growing louder regarding the spread of the COVID-19 delta variant. Developed countries were generally better prepared given their higher vaccination rates, but developing and emerging economies were experiencing severe problems. As economies looked hopefully toward returning to normalcy during the summer months, many supporting countries in the supply chain were fighting the deadly virus anew. Above all else, the outcome of the delta variant, and potentially other deadly variants, will determine the course of markets and economies in the months ahead.

2

American Beacon SSI Alternative Income FundSM

Performance Overview

June 30, 2021 (Unaudited)

The Investor Class of the American Beacon SSI Alternative Income Fund (the 'Fund') returned 12.80% for the twelve-month period ending June 30, 2021, outperforming the ICE BofA 3-Month Treasury Bill Index (the 'Index') return of 0.09%.

Comparison of Changes in Value of a $10,000 Investment for the period 5/25/2012 through 6/30/2021

Total Returns for the Period ended June 30, 2021

Ticker

1 Year

3 Year

5 Year

Since Inception

5/25/2012

Value of $10,000

05/25/2012-

06/30/2021

R5 Class (1,2,4)

SSIJX 13.22% 6.42% 5.44% 3.45 % $ 13,618

Y Class (1,4)

PSCIX 13.11% 6.37% 5.41% 3.44 % $ 13,599

Investor Class (1,4)

PSCAX 12.80% 6.11% 5.13% 3.19 % $ 13,302

ICE BofA 3-Month U.S. Treasury Bill Index (3)

0.09 % 1.34 % 1.17 % 0.69 % $ 10,643
1.

Performance shown is historical and is not indicative of future returns. Investment returns and principal value will vary, and shares may be worth more or less at redemption than at original purchase. Performance shown is calculated based on the published end-of-day net asset values as of date indicated, and current performance may be lower or higher than the performance data quoted. To obtain performance as of the most recent month end, please call 1-800-967-9009 or visit www.americanbeaconfunds.com. Fund performance in the table above does not reflect the deduction of taxes a shareholder would pay on distributions or the redemption of shares. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes only; and as such, the total return based on the unadjusted net asset value per share may differ from the total return reported in the financial highlights. A portion of fees charged to the Investor Class of the Fund was waived from Fund inception to 2014, recovered in 2015, and waived in 2016, 2019 and 2020. Performance prior to waiving fees was lower than actual returns shown for Fund inception to 2014 and for 2016 and 2019 through 2020. A portion of fees charged to the Y Class of the Fund was waived from Fund inception to 2014, recovered in 2015, and waived in 2016, 2019 and 2020. Performance prior to waiving fees was lower than actual returns shown for Fund inception to 2014 and for 2016 and 2019 through 2020.

2.

Fund performance for the three year, five-year and since inception periods represents the total returns achieved by the Y Class from 5/25/12 up to 5/17/19, the inception date of the R5 Class. Expenses of the R5 Class are lower than those of the Y Class. As a result, total returns shown may be lower than they would have been had the R5 Class been in existence since 5/25/12. A portion of fees charged to the R5 Class of the Fund has been waived since R5 Class inception (May 17, 2019). Performance prior to waiving fees was lower than actual returns shown.

3

American Beacon SSI Alternative Income FundSM

Performance Overview

June 30, 2021 (Unaudited)

3.

ICE BofA 3-Month U.S. Treasury Bill Index is an index of U.S. Treasury securities maturing in less than 3 months that assumes reinvestment of all income and is intended to track the daily performance of 3-month U.S. Treasury bills. One cannot directly invest in an index.

4.

The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y and Investor Class shares were 4.92%, 2.34% and 2.99%, 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 period began amid uncertainty surrounding the COVID-19 pandemic. Unprecedented monetary and fiscal stimulus was implemented to help support the economy and financial markets. Equity markets posted strong returns as progress was made against the pandemic and business conditions improved. As economic data improved, interest rates bounced off the record lows seen in the middle of 2020. The move higher in rates led to losses in U.S. Treasuries and other high-quality fixed-income markets. The convertible market was one of the best performing asset classes during the period, as convertibles issued by disruptive growth companies generated very large gains. As the recovery strengthened, convertibles from more cyclical areas, like travel and energy, contributed to gains as well.

The Fund demonstrated attractive risk-adjusted returns over the past 12 months as the Fund's convertible bond strategy participated in the spread tightening in the credit markets. Income was also a source of return for the Fund during the period, derived from coupons, including holdings in the real estate investment trust industry, and trading gains from equity hedges were notable as well given underlying equity price volatility. Overall, the Fund's returns were diversified across its holdings with no individual position having an extraordinary impact on performance. The period ended on a solid note with convertibles supported by favorable sentiment and strong new issuance. The convertible universe includes fundamentally attractive companies with strong credit profiles and favorable valuations.

The unique structure of convertibles is designed to offer significant participation if equity markets continue higher while potentially providing downside protection if a more adverse environment develops. Furthermore, the Fund's strategy of actively hedging the equity exposure from its convertible bonds seeks to insulate the Fund from volatility while also providing opportunity for trading gains.

Top Ten Holdings (% Net Assets)
ProShares Short 20+ Year Treasury 2.7
MFA Financial, Inc., 6.250%, Due 6/15/2024 2.4
PennyMac Corp., 5.500%, Due 11/1/2024 2.1
Apollo Commercial Real Estate Finance, Inc., 5.375%, Due 10/15/2023 1.7
Enphase Energy, Inc., Due 3/1/2028 1.6
Granite Point Mortgage Trust, Inc., 5.625%, Due 12/1/2022 1.4
AMG Capital Trust, 5.150%, Due 10/15/2037 1.3
MGIC Investment Corp., 9.000%, Due 4/1/2063 1.3
Radius Health, Inc., 3.000%, Due 9/1/2024 1.2
Centennial Resource Production LLC, 3.250%, Due 4/1/2028 1.1
Total Fund Holdings 128
Industry Allocation (% Equities)
Mortgage Real Estate Investment Trusts (REITs) 22.9
Exchange-Traded Instruments 19.1
Diversified Financial Services 13.3
Equity Real Estate Investment Trusts (REITs) 7.5
Construction & Engineering 7.1
Technology Hardware, Storage & Peripherals 7.1
Capital Markets 5.9
Chemicals 5.9
Electric Utilities 3.9
Food Products 3.9
Professional Services 3.4

4

American Beacon SSI Alternative Income FundSM

Performance Overview

June 30, 2021 (Unaudited)

Industry Allocation (% Fixed Income)
REITS 15.1
Biotechnology 12.3
Software 11.8
Internet 11.2
Diversified Financial Services 4.7
Energy - Alternate Sources 4.0
Pharmaceuticals 3.9
Commercial Services 3.8
Computers 2.7
Oil & Gas 2.4
Leisure Time 2.3
Electronics 2.2
Lodging 2.1
Pipelines 2.0
Retail 1.8
Media 1.7
Food 1.6
Insurance 1.6
Telecommunications 1.3
Real Estate 1.3
Transportation 1.2
Electric 1.2
Auto Manufacturers 0.9
Home Builders 0.9
Health Care - Products 0.9
Trucking & Leasing 0.8
Auto Parts & Equipment 0.7
Semiconductors 0.7
Machinery - Construction & Mining 0.7
Aerospace/Defense 0.7
Airlines 0.6
Machinery - Diversified 0.6
Miscellaneous Manufacturing 0.3

5

American Beacon TwentyFour Short Term Bond FundSM

Performance Overview

June 30, 2021 (Unaudited)

The Y Class of the American Beacon TwentyFour Short Term Bond Fund (the 'Fund') returned 4.21% for the twelve-month period ended June 30, 2021, outperforming the ICE BofA 1-3 Year U.S. Corporate Index (the 'Index') return of 1.85% for the same period.

Comparison of Changes in Value of a $100,000 Investment for the period 2/18/2020 through 6/30/2021

Total Returns for the Period ended June 30, 2021

Ticker

1 year

Since Inception

02/18/2020

Value of $10,000

02/18/2020-

06/30/2021

Y Class (1)

TFBYX 4.21% 2.85 % $ 103,913

A without Sales Charge (1,2)

TFBAX 3.91% 2.56 % $ 103,506

A with Sales Charge (1,2)

TFBAX 1.35% 0.65 % $ 100,883

C without Sales Charge (1,3)

TFBCX 3.20% 1.75 % $ 102,390

C with Sales Charge (1,3)

TFBCX 2.20% 1.75 % $ 102,390

R6 Class (1)

TFBRX 4.31% 3.00 % $ 104,116

ICE BofA 1-3 Yr US Corporate Index (4)

1.85% 2.81 % $ 103,867
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 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.

A Class shares have a maximum sales charge of 2.50%.

3.

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

4.

The ICE BofA 1-3 Year U.S. Corporate Index is an unmanaged index that tracks the performance of the U.S. dollar-denominated investment-grade public debt issued in the U.S. domestic bond market. Qualifying bonds must have at least one year but less than three years remaining term to maturity, a fixed coupon schedule and a minimum amount outstanding of $150 million. One cannot directly invest in an index.

6

American Beacon TwentyFour Short Term Bond FundSM

Performance Overview

June 30, 2021 (Unaudited)

5.

The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the Y, A, C and R6 Class shares were 1.46%, 1.76%, 2.51% and 1.36%, 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

Following extreme market moves near the beginning of the period when the pandemic first hit, markets were much more orderly in the subsequent months as governments across the globe enacted aggressive stimulus measures to stabilize markets and economies. The corporate sector benefitted as credit markets re-opened and default estimates declined. The Financial sector, where the Fund held its largest overweight, benefitted from an improvement in credit profiles as loss estimates were manageable and reserves did not need to rise significantly. Many Financial issuers were already posting solid earnings results by period end as reserves were released.

Nearly all credit sectors contributed positively to the Fund's performance. Asset-backed securities performed well as the residential mortgage market improved following rising home prices and historic-low mortgage refinancing rates. Industrial issuers improved as economies were beginning to re-open by period end. All positions denominated in local currencies, such as the euro and British pound sterling, were hedged back to the U.S. dollar.

The Fund's weighted-average credit quality was investment grade throughout the period. The Fund's holdings in below-investment-grade issuers outperformed as high-yield credit produced one of the highest returns among fixed-income sectors during the period. Conversely, rising government bond yields in early 2021 hurt the Fund's performance as improving economies and rising inflation caused yields to increase. The Fund, however, held relatively little exposure to government issuers and the highest-quality investment grade bonds that were most adversely affected by rising yields. By period end, the Fund's duration was slightly long of the Index as Treasury yields began to roll over.

Given the improvement in credit markets during the period, the Fund ended with a lower risk profile than it held earlier in the period. The Fund still favored hybrid issues in the Financial sector that would benefit from further improvement in the credit environment, however, it held positions with greater protection within the issuer's capital structure. The Fund also sought to maintain relatively short maturities to protect the Fund from spread widening while generating a higher yield than that of the Index.

In such a low-yielding environment, the Fund's challenge was to maximize income while protecting its investments from potential market volatility. At period end, the rapidly spreading COVID variant Delta may prove to be that source of uncertainty.

The sub-advisor's investment process incorporates top-down asset allocation with rigorous bottom-up credit analysis in a highly flexible approach that seeks to take advantage of prevailing market conditions. This team-based process has remained consistent since the strategy's inception.

Top Ten Holdings (% Net Assets)
Ripon Mortgages PLC, 1.581%, Due 8/20/2056, 1X C1, (3-mo. GBP LIBOR + 1.500%) 4.7
U.S. Treasury Notes/Bonds, 1.750%, Due 7/31/2021 3.9
Rothesay Life PLC, 8.000%, Due 10/30/2025 3.2
Harben Finance PLC, 1.881%, Due 8/20/2056, 2017-1X D, (3-mo. GBP LIBOR + 1.800%) 3.1
Tower Bridge Funding PLC, 2.681%, Due 12/20/2061, 3 D, (3-mo. GBP LIBOR + 2.600%) 3.0
Nationwide Building Society, 5.875%, Due 12/20/2024, (5-Yr. UK Government Bond + 5.390%) 2.9
Phoenix Group Holdings PLC, 6.625%, Due 12/18/2025 2.4
Credit Agricole SA, 7.375%, Due 12/18/2023 2.3
HSBC Holdings PLC, 6.375%, Due 9/17/2024, (5-Yr. USD ICE Swap + 3.705%) 2.1
Pension Insurance Corp. PLC, 6.500%, Due 7/3/2024 2.1
Total Fund Holdings 56

7

American Beacon TwentyFour Short Term Bond FundSM

Performance Overview

June 30, 2021 (Unaudited)

Sector Allocation (% Fixed Income)
Financial 51.1
Collateralized Mortgage Obligations 11.1
Communications 8.0
Utilities 7.4
Consumer, Non-Cyclical 5.6
Industrial 5.0
Consumer, Cyclical 4.5
U.S. Treasury Obligations 4.1
Technology 3.2
Industry Allocation (% Fixed Income)
Insurance 24.6
Banks 19.5
Collateralized Mortgage Obligations 11.1
Telecommunications 8.0
Electric 5.9
Savings & Loans 4.4
U.S. Treasury Obligations 4.1
Transportation 2.9
Health Care - Services 2.5
Hand/Machine Tools 2.1
Software 2.1
Food 1.7
Entertainment 1.6
Distribution/Wholesale 1.5
Gas 1.5
Auto Parts & Equipment 1.4
Commercial Services 1.4
Diversified Financial Services 1.4
Real Estate 1.2
Computers 1.1
Country Allocation (% Investments)
United Kingdom 66.2
United States 11.9
Netherlands 4.0
France 3.9
Germany 3.4
Mexico 1.6
Australia 1.4
South Africa 1.4
Italy 1.3
Norway 1.3
Austria 1.2
Spain 1.2
Sweden 1.2

8

American Beacon TwentyFour Strategic Income FundSM

Performance Overview

June 30, 2021 (Unaudited)

The Investor Class of the American Beacon TwentyFour Strategic Income Fund (the 'Fund') returned 10.67% for the twelve-month period ended June 30, 2021, outperforming the Bloomberg Barclays Global Aggregate Index (Hedged to USD) (the 'Index') return of 0.08%.

Comparison of Changes in Value of a $10,000 Investment for the period 4/03/2017 through 6/30/2021

Total Returns for the Period ended June 30, 2021

Ticker

1 Year

3 Year

Since Inception

04/03/2017

Value of $10,000

04/03/2017-

06/30/2021

R5 Class (1,5)

TFGIX 11.06 % 7.34 % 6.63 % $ 13,130

Y Class (1,5)

TFGYX 11.00 % 7.29 % 6.57 % $ 13,099

Investor Class (1,5)

TFGPX 10.67 % 6.99 % 6.26 % $ 12,939

A without Sales Charge (1,2)

TFSAX 10.73 % 7.03 % 6.41 % $ 13,017

A with Sales Charge (1,2)

TFSAX 6.53 % 5.69 % 5.46 % $ 12,528

C without Sales Charge (1,3)

TFGCX 9.87 % 6.32 % 5.92 % $ 12,760

C with Sales Charge (1,3)

TFGCX 8.87 % 6.32 % 5.92 % $ 12,760

Bloomberg Barclays Global Aggregate Index (Hedged to USD) (4)

0.08 % 4.59 % 3.86 % $ 11,758

ICE BofA U.S. Dollar 3-Month LIBOR Constant Maturity Index (4)

0.25 % 1.65 % 1.59 % $ 10,691

Bloomberg Barclays Global Aggregate Index

2.63 % 4.23 % 3.89 % $ 11,758
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 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.

Fund performance for the three-year and since inception periods represents the total returns achieved by the R5 Class from 4/3/17 up to 10/29/18, the inception date of the A Class. Expenses of the A Class are higher than those of the R5 Class. As a result, total returns shown may be higher than they would have been had the A Class been in existence since 4/3/17. A Class shares have a maximum sales charge of 3.75%.

9

American Beacon TwentyFour Strategic Income FundSM

Performance Overview

June 30, 2021 (Unaudited)

3.

Fund performance for the three-year and since inception periods represents the total returns achieved by the R5 Class from 4/03/17 up to 10/29/18, the inception date of the C Class. Expenses of the C Class are higher than those of the R5 Class. As a result, total returns shown may be higher than they would have been had the C Class been in existence since 4/03/17. The maximum contingent deferred sales charge for the C Class is 1.00% for shares redeemed within one year of the date of purchase.

4.

The ICE BofA U.S. Dollar 3-Month LIBOR Constant Maturity Index tracks the performance of a synthetic asset paying LIBOR to a stated maturity. The index is based on the assumed purchase at par of a synthetic instrument having exactly its stated maturity and with a coupon equal to that day's fixing rate. That issue is assumed to be sold the following business day (at a yield equal to the current day fixing rate) and rolled into a new instrument. The Bloomberg Barclays Global Aggregate Index tracks the performance of global investment-grade debt, including treasury, government-related, corporate and securitized fixed-rate bonds, denominated in local currencies from developed and emerging markets issuers and hedged back to U.S. Dollars (USD). Securities must have at least one year until final maturity, or average life as applicable, and must meet minimum issue size criteria. Prior to October 28, 2020, the Fund's secondary benchmark was the Bloomberg Barclays Global Aggregate Index unhedged to USD. One cannot directly invest in an index.

5.

The Total Annual Fund Operating Expense ratios set forth in the most recent Fund prospectus for the R5, Y, Investor, A, and C Class shares were 1.02%, 1.10%, 1.43%, 1.35%, and 2.15%, 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.

Following extreme market moves early in the period when the pandemic first hit, markets recovered in the subsequent months as governments across the globe enacted aggressive stimulus measures to stabilize economies. Credit markets re-opened and default estimates declined as liquidity began to flow again. The Financial sector, the Fund's largest overweight position, benefitted from an improvement in credit profiles as losses proved to be manageable. Many Financial issuers were already posting solid earnings results by period end.

The Fund's overweight positions in the Financial sector, including banks and insurance companies, produced some of the highest returns during the period. In general, nearly all credit sectors contributed positively to performance as spreads narrowed to historic lows. The Fund ended the period with over 70% in corporate issues and nearly 12% in various asset-backed and securitized sectors. Positions denominated in local currencies, such as the euro and British pound sterling, continued to be hedged back to the U.S. dollar.

The Fund continued to favor hybrid issues in the Financial sector, including contingent convertibles, that benefitted from improving economic growth; however, the Fund rotated to positions with slightly more protection within the capital structure and maintained relatively short maturities to protect from spread widening.

The Fund's holding in below-investment-grade issuers outperformed as high-yield credit produced one of the highest returns among fixed-income sectors during the period. Asset-backed securities and collateralized loan obligations also performed well as the residential mortgage market improved following rising home prices and historic-low mortgage rates. Industrials improved as economies re-opened and business activity gradually increased. Overall, the Fund maintained its focus on low volatility and high flexibility by concentrating risk exposures in the short end of the credit curves.

The most notable global development of the period was the vaccine rollout, which provided hope for an end to the pandemic and return to economic normalization. Following the improved outlook, government bond yields began to rise in early 2021 as higher inflation and employment confirmed the positive trends. The Fund's government exposures were in very short maturity U.S. Treasuries that were not materially affected by higher rates. However, close attention will be paid to rhetoric from central bankers in the coming months as they contemplate the pace and timing of tapering and interest rate increases.

Offsetting the effects of rising rates, the Fund held a short duration of slightly over 3 years throughout the period as compared to over 7 years for the Index. Despite its lower duration, the Fund maintained a higher yield with overweight positions in the various credit sectors. The Fund's higher yield and lower duration reflect a cautious outlook for interest rates and economic growth given the narrow credit spread environment, and they provide the Fund with flexibility to take advantage of markets should volatility return.

The sub-advisor's investment process incorporates top-down asset allocation and duration management with rigorous bottom-up credit analysis in a highly flexible approach that seeks to take advantage of prevailing market conditions. This team-based process has remained consistent since the Fund's inception.

10

American Beacon TwentyFour Strategic Income FundSM

Performance Overview

June 30, 2021 (Unaudited)

Top Ten Holdings (% Net Assets)
U.S. Treasury Notes/Bonds, 0.125%, Due 5/31/2023 6.2
U.S. Treasury Notes/Bonds, 0.125%, Due 11/30/2022 5.1
U.S. Treasury Notes/Bonds, 0.125%, Due 4/30/2023 3.6
Pension Insurance Corp. PLC, 7.375%, Due 7/25/2029, (5-Yr. UK Government Bond + 6.658%) 1.4
Coventry Building Society, 6.875%, Due 9/18/2024, (5-Yr. UK Government Bond + 6.111%) 1.3
Nationwide Building Society, 10.250%, Due 12/31/2049, Series CCDS 1.3
Phoenix Group Holdings PLC, 5.750%, Due 4/26/2028, (5-Yr. UK Government Bond + 4.169%) 1.1
Bracken MidCo1 PLC, 8.875%, Due 10/15/2023, Cash (8.875%) or PIK (in-kind rate 9.648%) 1.0
HSBC Holdings PLC, 5.875%, Due 9/28/2026, (5-Yr. GBP Swap + 4.276%) 0.9
Nationwide Building Society, 5.875%, Due 12/20/2024, (5-Yr. UK Government Bond + 5.390%) 0.9
Total Fund Holdings 239
Industry Allocation (% Fixed Income)
Banks 21.6
U.S. Treasury Obligations 16.0
Asset-Backed Obligations 11.3
Insurance 9.9
Diversified Financial Services 4.6
Telecommunications 4.4
Real Estate 4.1
Savings & Loans 4.1
Oil & Gas 2.5
Chemicals 1.9
Commercial Services 1.6
Retail 1.3
Building Materials 1.2
Auto Parts & Equipment 1.1
Media 1.1
Home Builders 1.0
Food 0.9
Lodging 0.9
Transportation 0.9
Packaging & Containers 0.8
Pharmaceuticals 0.7
Aerospace/Defense 0.6
Agriculture 0.6
Foreign Sovereign Obligations 0.6
Pipelines 0.6
Airlines 0.5
Auto Manufacturers 0.5
Entertainment 0.5
Internet 0.5
Machinery - Diversified 0.5
Water 0.5
Electric 0.4
Coal 0.3
Collateralized Mortgage Obligations 0.3
Cosmetics/Personal Care 0.3
Energy - Alternate Sources 0.3
Leisure Time 0.3
Software 0.3
Miscellaneous Manufacturing 0.2
REITS 0.2
Advertising 0.1

11

American Beacon TwentyFour Strategic Income FundSM

Performance Overview

June 30, 2021 (Unaudited)

Country Allocation (% Investments)
United States 25.6
United Kingdom 22.5
Ireland 8.6
Netherlands 5.9
France 4.4
China/Hong Kong 4.2
Spain 4.2
Italy 4.0
Mexico 2.9
Germany 2.3
Switzerland 1.8
Canada 1.6
Cayman Islands 1.6
Sweden 1.5
United Arab Emirates 1.3
Austria 1.1
Chile 1.1
Japan 0.9
Kuwait 0.7
India 0.6
Republic of Mauritius 0.6
Ukraine 0.6
Australia 0.5
Singapore 0.4
Brazil 0.3
Romania 0.3
Saudi Arabia 0.2
Belgium 0.1
British Virgin Islands 0.1
Morocco 0.1

12

American Beacon FundsSM

Expense Examples

June 30, 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 January 1, 2021 through June 30, 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 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.

13

American Beacon FundsSM

Expense Examples

June 30, 2021 (Unaudited)

American Beacon SSI Alternative Income Fund
Beginning Account Value
1/1/2021
Ending Account Value
6/30/2021
Expenses Paid During
Period
1/1/2021-6/30/2021*
R5 Class
Actual $1,000.00 $1,028.60 $9.51
Hypothetical** $1,000.00 $1,015.42 $9.44
Y Class
Actual $1,000.00 $1,028.60 $9.86
Hypothetical** $1,000.00 $1,015.08 $9.79
Investor Class
Actual $1,000.00 $1,026.80 $11.06
Hypothetical** $1,000.00 $1,013.88 $10.99
*

Expenses are equal to the Fund's annualized expense ratios for the six-month period of 1.89%, 1.96%, and 2.20% 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 (181) by days in the year (365) to reflect the half-year period.

**

5% return before expenses.

American Beacon TwentyFour Short Term Bond Fund
Beginning Account Value
1/1/2021
Ending Account Value
6/30/2021
Expenses Paid During
Period
1/1/2021-6/30/2021*
Y Class
Actual $1,000.00 $1,011.40 $2.79
Hypothetical** $1,000.00 $1,022.02 $2.81
A Class
Actual $1,000.00 $1,009.40 $4.33
Hypothetical** $1,000.00 $1,020.48 $4.36
C Class
Actual $1,000.00 $1,005.40 $8.06
Hypothetical** $1,000.00 $1,016.76 $8.10
R6 Class
Actual $1,000.00 $1,011.30 $2.34
Hypothetical $1,000.00 $1,022.46 $2.36
*

Expenses are equal to the Fund's annualized expense ratios for the six-month period of 0.56%, 0.87%, 1.62%, and 0.47% for the Y, 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 (181) by days in the year (365) to reflect the half-year period.

**

5% return before expenses.

American Beacon TwentyFour Strategic Income Fund
Beginning Account Value
1/1/2021
Ending Account Value
6/30/2021
Expenses Paid During
Period
1/1/2021-6/30/2021*
R5 Class
Actual $1,000.00 $1,026.00 $3.62
Hypothetical** $1,000.00 $1,021.22 $3.61
Y Class
Actual $1,000.00 $1,027.00 $4.02
Hypothetical** $1,000.00 $1,020.83 $4.01
Investor Class
Actual $1,000.00 $1,024.40 $5.47
Hypothetical** $1,000.00 $1,019.39 $5.46
A Class
Actual $1,000.00 $1,024.80 $5.02
Hypothetical** $1,000.00 $1,019.84 $5.01
C Class
Actual $1,000.00 $1,021.30 $9.22
Hypothetical** $1,000.00 $1,015.67 $9.20
*

Expenses are equal to the Fund's annualized expense ratios for the six-month period of 0.72%, 0.80%, 1.09%, 1.00%, and 1.84% for the R5, Y, Investor, A, and C Classes, respectively, multiplied by the average account value over the period, multiplied by the number derived by dividing the number of days in the most recent fiscal half-year (181) by days in the year (365) to reflect the half-year period.

**

5% return before expenses.

14

American Beacon FundsSM

Report of Independent Registered Public Accounting Firm

Tothe Board of Trustees of American Beacon FundsandShareholders of American Beacon SSI Alternative Income Fund, American Beacon TwentyFour Short Term Bond Fund and American Beacon TwentyFour Strategic Income Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, ofAmerican Beacon SSI Alternative Income Fund, American Beacon TwentyFour Short Term Bond Fund and American Beacon TwentyFour Strategic Income Fund (three of the series constituting American Beacon Funds, hereafter collectively referred to as the 'Funds') as of June 30, 2021, the related statements of operations, the statements of changes in net assets, including the related notes,and the financial highlights for each of the periods indicated in the table below (collectively referred to as the 'financial statements'). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of June 30, 2021, the results of each of their operations, the changes in each of their net assets and each of the financial highlightsfor each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.

Fund Name

Statements of Operations

Statements of Changes in
Net Assets

Financial Highlights

American Beacon SSI Alternative Income Fund For the year ended June 30, 2021 For each of the two years in the period ended June 30, 2021

For the period May 20, 2019 (commencement of operations) through June 30, 2019 and for the each of the two years in the period ended June 30, 2021 for R5 Class

For the period April 1, 2019 through June 30, 2019 and for each of the two years in the period ended June 30, 2021 for Y Class and Investor Class

American Beacon TwentyFour Short Term Bond Fund For the year ended June 30, 2021 For the period February 18, 2020 (commencement of operations) through June 30, 2020 and for the year ended June 30, 2021. For the period February 18, 2020 (commencement of operations) through June 30, 2020 and for the year ended June 30, 2021.
American Beacon TwentyFour Strategic Income Fund For the year ended June 30, 2021 For each of the two years in the period ended June 30, 2021 For each of the periods indicated therein

The financial statements of American Beacon SSI Alternative Income Fund as of March 31, 2019 and for the year ended March 31, 2019 and the financial highlights for each of the periods ended on or prior to March 31, 2019 (not presented herein, other than the financial highlights) were audited by other auditors whose report dated May 24, 2019 expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinions

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

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included

15

American Beacon FundsSM

Report of Independent Registered Public Accounting Firm

examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of June 30, 2021 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.

/s/PricewaterhouseCoopers LLP

Boston, MA

August 26, 2021

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

16

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
SECURITIES HELD LONG - 99.44%
CONVERTIBLE PREFERRED STOCKS - 8.06%
Consumer Staples - 0.54%
Food Products - 0.54%
Bunge Ltd.A 6,113 $ 709,475
Financials - 1.33%
Capital Markets - 0.82%
Cowen, Inc., Series AA 680 1,070,607
Diversified Financial Services - 0.51%
Ready Capital Corp., 7.000%, Due 08/15/2023 24,242 667,624

Total Financials

1,738,231
Industrials - 1.46%
Construction & Engineering - 0.98%
Fluor Corp.A B 1,210 1,283,689
Professional Services - 0.48%
Clarivate PLC, Series A, 5.250%, Due 06/1/2024 5,950 619,990

Total Industrials

1,903,679
Information Technology - 0.99%
Technology Hardware, Storage & Peripherals - 0.99%
NCR Corp., Series A, 5.500%, PIK (In-kind rate 5.500%)A 767 1,291,436
Materials - 0.81%
Chemicals - 0.81%
Lyondellbasell Advanced Polymers, Inc.A 1,026 1,065,809
Real Estate - 2.39%
Diversified Financial Services - 1.34%
AMG Capital Trust, 5.150%, Due 10/15/2037C 30,669 1,752,120
Equity Real Estate Investment Trusts (REITs) - 1.05%
New York Community Capital Trust, 6.000%, Due 11/1/2051 26,325 1,368,604

Total Real Estate

3,120,724
Utilities - 0.54%
Electric Utilities - 0.54%
Algonquin Power & Utilities Corp., 7.750%, Due 06/15/2024 14,183 704,298

Total Convertible Preferred Stocks (Cost $9,524,430)

10,533,652
PREFERRED STOCKS - 3.19%
Financials - 3.19%
Mortgage Real Estate Investment Trusts (REITs) - 3.19%
AGNC Investment Corp., Series F, 6.125%, (3-mo. USD LIBOR + 4.697%)A D 27,357 685,293
Chimera Investment Corp., Series B, 8.000%, (3-mo. USD LIBOR + 5.791%)A D 31,683 823,441
MFA Financial, Inc., Series C, 6.500%, (3-mo. USD LIBOR + 5.345%)A D 44,065 1,042,578
New Residential Investment Corp., Series C, 6.375%, (3-mo. USD LIBOR + 4.969%)A D 42,711 1,025,064
New York Community Mortgage Trust, 6.000%, Due 11/1/2051 23,304 588,659
4,165,035

Total Financials

4,165,035

Total Preferred Stocks (Cost $4,034,175)

4,165,035

See accompanying notes

17

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount Fair Value
SECURITIES HELD LONG - 99.44% (continued)
CORPORATE OBLIGATIONS - 0.51% (Cost $703,550)
Consumer, Cyclical - 0.51%
Airlines - 0.51%
Spirit Airlines, Inc., 1.000%, Due 5/15/2026C $ 698,000 $ 665,264
665,264
CONVERTIBLE OBLIGATIONS - 76.10%
Communications - 8.68%
Internet - 6.14%
fuboTV, Inc., 3.250%, Due 2/15/2026B C 1,090,000 1,070,244
Groupon, Inc., 1.125%, Due 3/15/2026B C 695,000 649,391
Liberty TripAdvisor Holdings, Inc., 0.500%, Due 6/30/2051B E 836,000 727,541
Magnite, Inc., 0.250%, Due 3/15/2026B C 1,472,000 1,312,877
Perficient, Inc., 1.250%, Due 8/1/2025B C 495,000 810,265
Q2 Holdings, Inc., 0.750%, Due 6/1/2026C 432,000 564,624
RealReal, Inc., 1.000%, Due 3/1/2028B C 694,000 636,745
Spotify USA, Inc., Due 3/15/2026B C F 1,099,000 1,028,664
Zillow Group, Inc., 2.750%, Due 5/15/2025C 625,000 1,232,422
8,032,773
Media - 1.43%
Cable One, Inc., 1.125%, Due 3/15/2028B C 533,000 542,070
DISH Network Corp., 3.375%, Due 8/15/2026C 1,297,000 1,323,588
1,865,658
Telecommunications - 1.11%
Infinera Corp., 2.125%, Due 9/1/2024C 522,000 638,375
Vonage Holdings Corp., 1.750%, Due 6/1/2024C 733,000 817,031
1,455,406

Total Communications

11,353,837
Consumer, Cyclical - 5.75%
Auto Parts & Equipment - 0.61%
Meritor, Inc., 3.250%, Due 10/15/2037C E 754,000 800,220
Home Builders - 0.77%
Winnebago Industries, Inc., 1.500%, Due 4/1/2025C 785,000 1,006,272
Leisure Time - 1.93%
Callaway Golf Co., 2.750%, Due 5/1/2026C 572,000 1,165,807
Royal Caribbean Cruises Ltd., 4.250%, Due 6/15/2023B C 993,000 1,353,036
2,518,843
Lodging - 0.92%
Marcus Corp., 5.000%, Due 9/15/2025B C 575,000 1,206,781
Retail - 1.52%
Burlington Stores, Inc., 2.250%, Due 4/15/2025C 610,000 969,138
Cheesecake Factory, Inc., 0.375%, Due 6/15/2026C 603,000 593,578
Vroom, Inc., 0.750%, Due 7/1/2026B C 404,000 417,332
1,980,048

Total Consumer, Cyclical

7,512,164

See accompanying notes

18

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount Fair Value
SECURITIES HELD LONG - 99.44% (continued)
CONVERTIBLE OBLIGATIONS - 76.10% (continued)
Consumer, Non-Cyclical - 18.68%
Biotechnology - 10.20%
Apellis Pharmaceuticals, Inc., 3.500%, Due 9/15/2026C $ 373,000 $ 687,719
Avid SPV LLC, 1.250%, Due 3/15/2026B C 459,000 629,609
Bridgebio Pharma, Inc., 2.250%, Due 2/1/2029B C 1,494,000 1,442,716
Dynavax Technologies Corp., 2.500%, Due 5/15/2026B C 660,000 759,825
Exact Sciences Corp., 0.375%, Due 3/15/2027C 971,000 1,284,754
Gossamer Bio, Inc., 5.000%, Due 6/1/2027C 1,200,000 963,750
Halozyme Therapeutics, Inc., 0.250%, Due 3/1/2027B C 1,035,000 960,609
Innoviva, Inc., 2.125%, Due 1/15/2023C 993,000 1,009,136
Insmed, Inc., 0.750%, Due 6/1/2028C 969,000 1,065,294
Ionis Pharmaceuticals, Inc., 0.125%, Due 12/15/2024C 488,000 453,530
Ligand Pharmaceuticals, Inc., 0.750%, Due 5/15/2023C 945,000 933,957
Radius Health, Inc., 3.000%, Due 9/1/2024C 1,686,000 1,556,753
Theravance Biopharma, Inc., 3.250%, Due 11/1/2023C 679,000 643,353
Travere Therapeutics, Inc., 2.500%, Due 9/15/2025C 1,114,000 944,860
13,335,865
Commercial Services - 3.13%
2U, Inc., 2.250%, Due 5/1/2025C 499,000 820,606
FTI Consulting, Inc., 2.000%, Due 8/15/2023C 545,000 777,715
Sabre GLBL, Inc., 4.000%, Due 4/15/2025C 697,000 1,268,540
Stride, Inc., 1.125%, Due 9/1/2027B C 1,322,000 1,224,436
4,091,297
Food - 1.36%
Beyond Meat, Inc., Due 3/15/2027B C F 736,000 750,260
Chefs' Warehouse, Inc., 1.875%, Due 12/1/2024C 997,000 1,034,387
1,784,647
Health Care - Products - 0.75%
SmileDirectClub, Inc., Due 2/1/2026B C F 1,198,000 980,863
Pharmaceuticals - 3.24%
Coherus Biosciences, Inc., 1.500%, Due 4/15/2026C 720,000 735,901
Flexion Therapeutics, Inc., 3.375%, Due 5/1/2024C 1,505,000 1,351,120
Jazz Investments Ltd.,

1.500%, Due 8/15/2024C

703,000 771,658

2.000%, Due 6/15/2026

535,000 711,550
Zogenix, Inc., 2.750%, Due 10/1/2027B C 650,000 661,375
4,231,604

Total Consumer, Non-Cyclical

24,424,276
Energy - 6.46%
Energy - Alternate Sources - 3.34%
Enphase Energy, Inc., Due 3/1/2028B C F 2,092,000 2,027,404
Sunnova Energy International, Inc., 0.250%, Due 12/1/2026B C 880,000 1,094,280
Sunrun, Inc., Due 2/1/2026B C F 1,395,000 1,247,688
4,369,372
Oil & Gas - 2.01%
Centennial Resource Production LLC, 3.250%, Due 4/1/2028C 1,136,000 1,494,522
Helix Energy Solutions Group, Inc.,

4.125%, Due 9/15/2023C

412,000 409,167

6.750%, Due 2/15/2026C

588,000 716,537
2,620,226

See accompanying notes

19

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount Fair Value
SECURITIES HELD LONG - 99.44% (continued)
CONVERTIBLE OBLIGATIONS - 76.10% (continued)
Energy - 6.46% (continued)
Pipelines - 1.11%
Cheniere Energy, Inc., 4.250%, Due 3/15/2045C E $ 1,725,000 $ 1,452,809

Total Energy

8,442,407
Financial - 18.05%
Diversified Financial Services - 3.08%
Coinbase Global, Inc., 0.500%, Due 6/1/2026B C 660,000 668,580
i3 Verticals LLC, 1.000%, Due 2/15/2025C 1,002,000 1,013,272
PRA Group, Inc., 3.500%, Due 6/1/2023C 973,000 1,044,759
WisdomTree Investments, Inc.,

4.250%, Due 6/15/2023B C

898,000 1,089,364

3.250%, Due 6/15/2026B

219,000 209,145
4,025,120
Insurance - 1.34%
MGIC Investment Corp., 9.000%, Due 4/1/2063B 1,331,000 1,746,938
Real Estate - 1.04%
Realogy Group, 0.250%, Due 6/15/2026B C 596,000 600,301
Redfin Corp., 0.500%, Due 4/1/2027B C 772,000 761,578
1,361,879
REITS - 12.59%
Apollo Commercial Real Estate Finance, Inc., 5.375%, Due 10/15/2023C 2,213,000 2,226,831
Granite Point Mortgage Trust, Inc.,

5.625%, Due 12/1/2022B C

1,928,000 1,878,595

6.375%, Due 10/1/2023C

1,320,000 1,283,700
iStar, Inc., 3.125%, Due 9/15/2022C 399,000 603,009
MFA Financial, Inc., 6.250%, Due 6/15/2024C 3,053,000 3,091,163
Pebblebrook Hotel Trust, 1.750%, Due 12/15/2026C 1,235,000 1,400,490
PennyMac Corp., 5.500%, Due 11/1/2024C 2,681,000 2,734,620
Redwood Trust, Inc., 5.625%, Due 7/15/2024C 958,000 984,345
RWT Holdings, Inc., 5.750%, Due 10/1/2025 719,000 725,327
Summit Hotel Properties, Inc., 1.500%, Due 2/15/2026C 614,000 632,727
Western Asset Mortgage Capital Corp., 6.750%, Due 10/1/2022C E 933,000 900,928
16,461,735

Total Financial

23,595,672
Industrial - 4.87%
Aerospace/Defense - 0.58%
Kaman Corp., 3.250%, Due 5/1/2024C 719,000 758,572
Electronics - 1.82%
GoPro, Inc., 1.250%, Due 11/15/2025B C 474,000 663,348
II-VI, Inc., 0.250%, Due 9/1/2022C 536,000 845,272
OSI Systems, Inc., 1.250%, Due 9/1/2022C 825,000 875,572
2,384,192
Machinery - Construction & Mining - 0.59%
Bloom Energy Corp., 2.500%, Due 8/15/2025B C 433,000 771,779
Machinery - Diversified - 0.48%
Middleby Corp., 1.000%, Due 9/1/2025B C 438,000 630,501

See accompanying notes

20

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount Fair Value
SECURITIES HELD LONG - 99.44% (continued)
CONVERTIBLE OBLIGATIONS - 76.10% (continued)
Industrial - 4.87% (continued)
Miscellaneous Manufacturing - 0.22%
John Bean Technologies Corp., 0.250%, Due 5/15/2026B C $ 265,000 $ 281,165
Transportation - 0.53%
Air Transport Services Group, Inc., 1.125%, Due 10/15/2024C 677,000 686,343
Trucking & Leasing - 0.65%
Greenbrier Cos., Inc., 2.875%, Due 4/15/2028B C 820,000 855,670

Total Industrial

6,368,222
Technology - 12.60%
Computers - 2.23%
Lumentum Holdings, Inc., 0.500%, Due 12/15/2026C 756,000 815,573
Mitek Systems, Inc., 0.750%, Due 2/1/2026B C 621,000 709,120
Vocera Communications, Inc., 0.500%, Due 9/15/2026B C 1,469,000 1,388,205
2,912,898
Semiconductors - 0.59%
MACOM Technology Solutions Holdings, Inc., 0.250%, Due 3/15/2026B C 735,000 772,209
Software - 9.78%
8x8, Inc., 0.500%, Due 2/1/2024C 626,000 775,110
Avaya Holdings Corp., 2.250%, Due 6/15/2023C 570,000 665,475
Bentley Systems, Inc., 0.375%, Due 7/1/2027B 655,000 671,375
Ceridian HCM Holding, Inc., 0.250%, Due 3/15/2026B C 601,000 600,624
Envestnet, Inc., 1.750%, Due 6/1/2023C 551,000 674,631
Everbridge, Inc., 0.125%, Due 12/15/2024C 424,000 578,495
Fastly, Inc., Due 3/15/2026B C F 1,484,000 1,382,346
J2 Global, Inc., 1.750%, Due 11/1/2026B C 561,000 714,938
MicroStrategy, Inc., Due 2/15/2027B C F 1,489,000 1,110,794
New Relic, Inc., 0.500%, Due 5/1/2023C 1,263,000 1,246,455
Progress Software Corp., 1.000%, Due 4/15/2026B C 732,000 739,739
Splunk, Inc., 1.125%, Due 6/15/2027C 1,104,000 1,075,710
Tabula Rasa HealthCare, Inc., 1.750%, Due 2/15/2026C 638,000 653,184
Verint Systems, Inc., 0.250%, Due 4/15/2026B C 828,000 811,892
Workiva, Inc., 1.125%, Due 8/15/2026C 711,000 1,082,237
12,783,005

Total Technology

16,468,112
Utilities - 1.01%
Electric - 1.01%
NRG Energy, Inc., 2.750%, Due 6/1/2048C E 1,139,000 1,323,518

Total Convertible Obligations (Cost $93,304,079)

99,488,208
FOREIGN CONVERTIBLE OBLIGATIONS - 6.66%
Communications - 3.19%
Internet - 3.19%
21Vianet Group, Inc., Due 2/1/2026B C F 1,213,000 1,042,574
iQIYI, Inc., 2.000%, Due 4/1/2025C 1,227,000 1,143,204
JOYY, Inc., 1.375%, Due 6/15/2026C 619,000 613,584
Momo, Inc., 1.250%, Due 7/1/2025C 1,548,000 1,376,752
4,176,114

See accompanying notes

21

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount Fair Value
SECURITIES HELD LONG - 99.44% (continued)
FOREIGN CONVERTIBLE OBLIGATIONS - 6.66% (continued)
Consumer, Cyclical - 1.59%
Auto Manufacturers - 0.77%
NIO, Inc., Due 2/1/2026B C F $ 1,076,000 $ 1,010,364
Lodging - 0.82%
Huazhu Group Ltd., 3.000%, Due 5/1/2026B C 742,000 1,069,871
Energy - 0.53%
Pipelines - 0.53%
Golar LNG Ltd., 2.750%, Due 2/15/2022 700,000 693,875
Financial - 0.84%
Financial Services - 0.84%
Encore Capital Europe Finance Ltd., 4.500%, Due 9/1/2023C 874,000 1,095,468
Industrial - 0.51%
Transportation - 0.51%
SFL Corp. Ltd., 4.875%, Due 5/1/2023C 693,000 661,815

Total Foreign Convertible Obligations (Cost $8,420,846)

8,707,507
Shares
EXCHANGE-TRADED INSTRUMENTS - 2.65% (Cost $3,589,519)
Exchange-Traded Funds - 2.65%
ProShares Short 20+ Year Treasury 205,613 3,470,748
SHORT-TERM INVESTMENTS - 2.27% (Cost $2,971,598)
Investment Companies - 2.27%
American Beacon U.S. Government Money Market Select Fund, 0.01%G H 2,971,598 2,971,598

TOTAL SECURITIES HELD LONG (Cost $122,548,197)

130,002,012
SECURITIES SOLD SHORT - (31.45%)
COMMON STOCKS - (31.45%)
Communication Services - (2.78%)
Entertainment - (0.95%)
iQIYI, Inc., ADRI (10,287 ) (160,271 )
Marcus Corp.I (38,531 ) (817,243 )
Spotify Technology SAI (952 ) (262,362 )
(1,239,876 )
Interactive Media & Services - (1.09%)
fuboTV, Inc.I (6,202 ) (199,146 )
JOYY, Inc., ADR (3,608 ) (238,020 )
TripAdvisor, Inc.I (4,807 ) (193,722 )
Zillow Group, Inc., Class CI (6,529 ) (797,974 )
(1,428,862 )
Media - (0.74%)
Cable One, Inc. (133 ) (254,404 )
DISH Network Corp., Class AI (10,584 ) (442,411 )
Magnite, Inc.I (8,079 ) (273,393 )
(970,208 )

Total Communication Services

(3,638,946 )

See accompanying notes

22

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
SECURITIES SOLD SHORT - (31.45%) (continued)
COMMON STOCKS - (31.45%) (continued)
Consumer Discretionary - (4.51%)
Automobiles - (0.61%)
NIO, Inc., ADRI (4,692 ) $ (249,615 )
Winnebago Industries, Inc. (8,125 ) (552,175 )
(801,790 )
Diversified Consumer Services - (0.68%)
2U, Inc.I (11,576 ) (482,372 )
Stride, Inc.I (12,465 ) (400,500 )
(882,872 )
Hotels, Restaurants & Leisure - (1.29%)
Cheesecake Factory, Inc.I (3,457 ) (187,300 )
Huazhu Group Ltd., ADRI (14,162 ) (747,895 )
Royal Caribbean Cruises Ltd.I (8,802 ) (750,635 )
(1,685,830 )
Household Durables - (0.35%)
GoPro, Inc., Class AI (39,105 ) (455,573 )
Internet & Direct Marketing Retail - (0.32%)
Groupon, Inc.I (4,534 ) (195,687 )
RealReal, Inc.I (11,330 ) (223,881 )
(419,568 )
Leisure Products - (0.62%)
Callaway Golf Co. (24,065 ) (811,713 )
Specialty Retail - (0.64%)
Burlington Stores, Inc.I (2,079 ) (669,417 )
Vroom, Inc.I (3,974 ) (166,352 )
(835,769 )

Total Consumer Discretionary

(5,893,115 )
Consumer Staples - (0.71%)
Food & Staples Retailing - (0.29%)
Chefs' Warehouse, Inc.I (12,163 ) (387,149 )
Food Products - (0.42%)
Beyond Meat, Inc.I (1,756 ) (276,552 )
Bunge Ltd. (3,439 ) (268,758 )
(545,310 )

Total Consumer Staples

(932,459 )
Energy - (1.08%)
Energy Equipment & Services - (0.30%)
Helix Energy Solutions Group, Inc.I (67,962 ) (388,063 )
Oil, Gas & Consumable Fuels - (0.78%)
Centennial Resource Development, Inc., Class AI (126,034 ) (854,511 )
Cheniere Energy, Inc.I (599 ) (51,957 )
SFL Corp. Ltd. (14,653 ) (112,095 )
(1,018,563 )

Total Energy

(1,406,626 )

See accompanying notes

23

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
SECURITIES SOLD SHORT - (31.45%) (continued)
COMMON STOCKS - (31.45%) (continued)
Financials - (2.31%)
Capital Markets - (1.63%)
Affiliated Managers Group, Inc. (2,392 ) $ (368,870 )
Coinbase Global, Inc., Class AI (605 ) (153,247 )
Cowen, Inc., Class A (26,218 ) (1,076,249 )
WisdomTree Investments, Inc. (85,901 ) (532,586 )
(2,130,952 )
Consumer Finance - (0.68%)
Encore Capital Group, Inc.I (12,717 ) (602,659 )
PRA Group, Inc.I (7,552 ) (290,525 )
(893,184 )

Total Financials

(3,024,136 )
Health Care - (5.31%)
Biotechnology - (3.55%)
Apellis Pharmaceuticals, Inc.I (7,351 ) (464,583 )
Avid Bioservices, Inc.I (14,405 ) (369,488 )
Bridgebio Pharma, Inc.I (8,865 ) (540,410 )
Coherus Biosciences, Inc.I (22,709 ) (314,066 )
Dynavax Technologies Corp.I (42,240 ) (416,064 )
Exact Sciences Corp.I (5,219 ) (648,774 )
Flexion Therapeutics, Inc.I (8,428 ) (69,362 )
Gossamer Bio, Inc.I (53,640 ) (435,557 )
Halozyme Therapeutics, Inc.I (6,707 ) (304,565 )
Insmed, Inc.I (19,380 ) (551,555 )
Ionis Pharmaceuticals, Inc.I (1,952 ) (77,865 )
Ligand Pharmaceuticals, Inc.I (992 ) (130,141 )
Radius Health, Inc.I (9,694 ) (176,819 )
Travere Therapeutics, Inc.I (10,126 ) (147,738 )
(4,646,987 )
Health Care Equipment & Supplies - (0.21%)
SmileDirectClub, Inc.I (31,507 ) (273,481 )
Health Care Technology - (0.58%)
Tabula Rasa HealthCare, Inc.I (5,077 ) (253,850 )
Vocera Communications, Inc.I (12,656 ) (504,341 )
(758,191 )
Pharmaceuticals - (0.97%)
Innoviva, Inc.I (13,580 ) (182,108 )
Jazz Pharmaceuticals PLCI (3,760 ) (667,926 )
Theravance Biopharma, Inc.I (5,937 ) (86,205 )
Zogenix, Inc.I (18,980 ) (327,975 )
(1,264,214 )

Total Health Care

(6,942,873 )
Industrials - (3.32%)
Aerospace & Defense - (0.21%)
Kaman Corp. (5,513 ) (277,855 )
Air Freight & Logistics - (0.21%)
Air Transport Services Group, Inc.I (11,712 ) (272,070 )

See accompanying notes

24

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
SECURITIES SOLD SHORT - (31.45%) (continued)
COMMON STOCKS - (31.45%) (continued)
Industrials - (3.32%) (continued)
Airlines - (0.19%)
Spirit Airlines, Inc.I (7,978 ) $ (242,850 )
Construction & Engineering - (0.41%)
Fluor Corp.I (29,920 ) (529,584 )
Electrical Equipment - (0.63%)
Bloom Energy Corp., Class AI (19,494 ) (523,804 )
Sunrun, Inc.I (5,347 ) (298,256 )
(822,060 )
Machinery - (0.89%)
Greenbrier Cos., Inc. (9,389 ) (409,173 )
John Bean Technologies Corp. (839 ) (119,658 )
Meritor, Inc.I (7,755 ) (181,622 )
Middleby Corp.I (2,628 ) (455,327 )
(1,165,780 )
Professional Services - (0.78%)
Clarivate PLCI (15,866 ) (436,791 )
FTI Consulting, Inc.I (4,293 ) (586,467 )
(1,023,258 )

Total Industrials

(4,333,457 )
Information Technology - (8.76%)
Communications Equipment - (0.50%)
Infinera Corp.I (27,537 ) (280,877 )
Lumentum Holdings, Inc.I (4,569 ) (374,795 )
(655,672 )
Electronic Equipment, Instruments & Components - (0.72%)
II-VI, Inc.I (8,578 ) (622,677 )
OSI Systems, Inc.I (3,114 ) (316,507 )
(939,184 )
IT Services - (1.86%)
21Vianet Group, Inc., ADRI (7,807 ) (179,171 )
Fastly, Inc., Class AI (7,123 ) (424,531 )
I3 Verticals, Inc., Class AI (14,309 ) (432,418 )
Perficient, Inc.I (7,286 ) (585,940 )
Sabre Corp.I (65,295 ) (814,881 )
(2,436,941 )
Semiconductors & Semiconductor Equipment - (0.78%)
Enphase Energy, Inc.I (3,853 ) (707,527 )
MACOM Technology Solutions Holdings, Inc.I (4,792 ) (307,071 )
(1,014,598 )
Software - (4.32%)
8x8, Inc.I (16,025 ) (444,854 )
Avaya Holdings Corp.I (12,521 ) (336,815 )
Bentley Systems, Inc., Class B (4,366 ) (282,829 )
Ceridian HCM Holding, Inc.I (2,444 ) (234,428 )
Envestnet, Inc.I (4,175 ) (316,715 )

See accompanying notes

25

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Shares Fair Value
SECURITIES SOLD SHORT - (31.45%) (continued)
COMMON STOCKS - (31.45%) (continued)
Information Technology - (8.76%) (continued)
Software - (4.32%) (continued)
Everbridge, Inc.I (2,282 ) $ (310,535 )
J2 Global, Inc.I (3,086 ) (424,479 )
MicroStrategy, Inc., Class AI (515 ) (342,218 )
Mitek Systems, Inc.I (16,945 ) (326,361 )
New Relic, Inc.I (2,408 ) (161,264 )
Progress Software Corp. (6,344 ) (293,410 )
Q2 Holdings, Inc.I (3,703 ) (379,854 )
Splunk, Inc.I (1,811 ) (261,834 )
Verint Systems, Inc.I (7,742 ) (348,932 )
Vonage Holdings Corp.I (20,564 ) (296,327 )
Workiva, Inc.I (7,969 ) (887,189 )
(5,648,044 )
Technology Hardware, Storage & Peripherals - (0.58%)
NCR Corp.I (16,634 ) (758,677 )

Total Information Technology

(11,453,116 )
Real Estate - (1.54%)
Equity Real Estate Investment Trusts (REITs) - (1.14%)
iStar, Inc. (22,761 ) (471,835 )
Pebblebrook Hotel Trust (32,521 ) (765,870 )
Summit Hotel Properties, Inc.I (27,254 ) (254,280 )
(1,491,985 )
Real Estate Management & Development - (0.40%)
Realogy Holdings Corp.I (12,198 ) (222,247 )
Redfin Corp.I (4,809 ) (304,939 )
(527,186 )

Total Real Estate

(2,019,171 )
Utilities - (1.13%)
Electric Utilities - (0.38%)
NRG Energy, Inc. (12,395 ) (499,519 )
Independent Power & Renewable Electricity Producers - (0.44%)
Sunnova Energy International, Inc.I (15,065 ) (567,348 )
Multi-Utilities - (0.31%)
Algonquin Power & Utilities Corp. (27,555 ) (410,018 )

Total Utilities

(1,476,885 )

TOTAL COMMON STOCKS (Proceeds $(35,073,257))

(41,120,784 )

TOTAL SECURITIES SOLD SHORT (Proceeds $(35,073,257))

(41,120,784 )

TOTAL INVESTMENTS IN SECURITIES (EXCLUDES SECURITIES SOLD SHORT) - 99.44% (Cost $122,548,197)

130,002,012

TOTAL WRITTEN OPTIONS CONTRACTS - (0.21%) (Premiums Received $(324,222))

(271,270 )

TOTAL SECURITIES SOLD SHORT - (31.45%) (Proceeds $(35,073,257))

(41,120,784 )

OTHER ASSETS, NET OF LIABILITIES - 32.22%

42,123,449

NET ASSETS - 100.00%

$ 130,733,407
Percentages are stated as a percent of net assets.

See accompanying notes

26

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

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

B Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $44,998,715 or 34.42% of net assets. The Fund has no right to demand registration of these securities.

C This security or a piece thereof is held as segregated collateral. At period end, the value of these securities amounted to $105,127,348 or 80.41% of net assets.

D Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that

are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, LIBOR or PRIME plus a fixed spread. The

interest rate disclosed reflects the rate in effect on June 30, 2021.

E Callable security.

F Zero coupon bond.

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

H7-day yield.

INon-income producing security.

ADR - American Depositary Receipt.

LIBOR - London Interbank Offered Rate.

LLC - Limited Liability Company.

PIK - Payment in Kind.

PLC - Public Limited Company.

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

Written Options Contracts Open on June 30, 2021:
Equity Options
Description Counter-
party
Exercise
Price
Expiration
Date
Currency Number of
Contracts
Notional
Amount
Premiums
Received
Fair Value Unrealized
Appreciation
(Depreciation)
Call - 2U, Inc. CCP 37.50 7/16/2021 USD 35 3,500 $ (13,929 ) $ (15,575 ) $ (1,646 )
Call - Avid Bioservices, Inc. CCP 25.00 7/16/2021 USD 43 4,300 (5,672 ) (6,020 ) (348 )
Call - Beyond Meat, Inc. CCP 150.00 7/16/2021 USD 7 700 (8,526 ) (8,050 ) 476
Call - Exact Sciences Corp. CCP 115.00 7/16/2021 USD 18 1,800 (16,523 ) (18,900 ) (2,377 )
Call - II-VI, Inc. CCP 75.00 7/16/2021 USD 23 2,300 (17,547 ) (2,530 ) 15,017
Call - Infinera Corp. CCP 10.00 7/16/2021 USD 106 10,600 (9,006 ) (4,770 ) 4,236
Call - Magnite, Inc. CCP 35.00 7/16/2021 USD 46 4,600 (12,341 ) (6,900 ) 5,441
Call - Mitek Systems, Inc. CCP 17.50 7/16/2021 USD 60 6,000 (5,638 ) (12,900 ) (7,262 )
Call - New Relic, Inc. CCP 70.00 7/16/2021 USD 23 2,300 (4,093 ) (2,645 ) 1,448
Call - Royal Caribbean Cruises Ltd. CCP 95.00 7/16/2021 USD 28 2,800 (15,903 ) (1,400 ) 14,503
Call - Sabre Corp. CCP 15.00 7/16/2021 USD 177 17,700 (29,199 ) (885 ) 28,314
Call - Zillow Group, Inc. CCP 110.00 7/16/2021 USD 19 1,900 (11,171 ) (23,750 ) (12,579 )
Call - Bloom Energy Corp. CCP 28.00 8/20/2021 USD 54 5,400 (14,079 ) (10,800 ) 3,279
Call - Callaway Golf Co. CCP 32.00 8/20/2021 USD 65 6,500 (15,143 ) (20,995 ) (5,852 )
Call - Coinbase Global, Inc. CCP 230.00 8/20/2021 USD 4 400 (7,552 ) (13,116 ) (5,564 )
Call - Enphase Energy, Inc. CCP 185.00 8/20/2021 USD 15 1,500 (28,919 ) (27,000 ) 1,919
Call - Everbridge, Inc. CCP 145.00 8/20/2021 USD 8 800 (13,344 ) (5,240 ) 8,104
Call - fuboTV, Inc. CCP 30.00 8/20/2021 USD 38 3,800 (22,723 ) (21,964 ) 759
Call - Groupon, Inc. CCP 45.00 8/20/2021 USD 21 2,100 (8,987 ) (7,297 ) 1,690
Call - Marcus Corp. CCP 20.00 8/20/2021 USD 105 10,500 (33,386 ) (22,838 ) 10,548
Call - RealReal, Inc. CCP 20.00 8/20/2021 USD 44 4,400 (11,450 ) (9,900 ) 1,550
Call - Sunnova Energy International, Inc. CCP 35.00 8/20/2021 USD 51 5,100 (19,091 ) (27,795 ) (8,704 )
$ (324,222 ) $ (271,270 ) $ 52,952

See accompanying notes

27

American Beacon SSI Alternative Income FundSM

Schedule of Investments

June 30, 2021

Currency Abbreviations:
USD United States Dollar.
Other Abbreviations:
CCP Central Counterparty Clearing House.

The Fund's investments are summarized by level based on the inputs used to determine their values. As of June 30, 2021, the investments were classified as described below:

SSI Alternative Income Fund

Level 1 Level 2 Level 3 Total

Assets

Convertible Preferred Stocks

$ 704,298 $ 9,829,354 $ - $ 10,533,652

Preferred Stocks

3,576,376 588,659 - 4,165,035

Corporate Obligations

- 665,264 - 665,264

Convertible Obligations

- 99,488,208 - 99,488,208

Foreign Convertible Obligations

- 8,707,507 - 8,707,507

Exchange-Traded Instruments

3,470,748 - - 3,470,748

Short-Term Investments

2,971,598 - - 2,971,598

Total Investments in Securities - Assets

$ 10,723,020 $ 119,278,992 $ - $ 130,002,012

Liabilities

Common Stocks (Sold Short)

$ (41,120,784 ) $ - $ - $ (41,120,784 )

Total Investments in Securities - Liabilities

(41,120,784 ) - - (41,120,784 )

Total Investments in Securities

$ (30,397,764 ) $ 119,278,992 $ - $ 88,881,228

Financial Derivative Instruments - Liabilities

Written Options

$ (271,270 ) $ - $ - $ (271,270 )

Total Financial Derivative Instruments - Liabilities

$ (271,270 ) $ - $ - $ (271,270 )

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended June 30, 2021, there were no transfers into or out of Level 3.

See accompanying notes

28

American Beacon TwentyFour Short Term Bond FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
CORPORATE OBLIGATIONS - 7.50%
Consumer, Non-Cyclical - 0.98%
Health Care - Services - 0.98%
HCA, Inc., 5.250%, Due 6/15/2026 $ 88,000 $ 101,905
Financial - 1.44%
Banks - 1.44%
Wells Fargo Bank, N.A., 5.250%, Due 8/1/2023A GBP 100,000 150,640
Industrial - 2.04%
Hand/Machine Tools - 2.04%
Stanley Black & Decker, Inc., 4.000%, Due 3/15/2060, (5-Yr. CMT + 2.657%)B 200,000 212,800
Technology - 3.04%
Computers - 1.03%
Fortinet, Inc., 1.000%, Due 3/15/2026 109,000 108,028
Software - 2.01%
Fidelity National Information Services, Inc., 1.700%, Due 6/30/2022 GBP 150,000 209,774

Total Technology

317,802

Total Corporate Obligations (Cost $694,453)

783,147
FOREIGN CORPORATE OBLIGATIONS - 74.03%
Communications - 7.68%
Telecommunications - 7.68%
America Movil SAB de CV, 5.000%, Due 10/27/2026 GBP 100,000 164,268
Deutsche Telekom International Finance BV, 6.500%, Due 4/8/2022A GBP 90,000 130,278
Global Switch Holdings Ltd., 4.375%, Due 12/13/2022A GBP 143,000 207,845
Orange SA, 5.750%, Due 4/1/2023, (5-Yr. GBP Swap + 3.353%)A B GBP 100,000 149,728
Vodafone Group PLC, 4.875%, Due 10/3/2078, (5-Yr. GBP Swap + 3.267%)A B GBP 100,000 150,340
802,459

Total Communications

802,459
Consumer, Cyclical - 4.32%
Auto Parts & Equipment - 1.39%
GKN Holdings Ltd., 5.375%, Due 9/19/2022A GBP 100,000 145,209
Distribution/Wholesale - 1.40%
Travis Perkins PLC, 3.750%, Due 2/17/2026A GBP 100,000 146,617
Entertainment - 1.53%
CPUK Finance Ltd., 7.239%, Due 2/28/2024A GBP 100,000 159,424

Total Consumer, Cyclical

451,250
Consumer, Non-Cyclical - 4.39%
Commercial Services - 1.33%
Experian Finance PLC, 3.500%, Due 10/15/2021A GBP 100,000 138,644
Food - 1.64%
Tesco PLC, 6.125%, Due 2/24/2022 GBP 120,000 172,074
Health Care - Services - 1.42%
BUPA Finance PLC, 5.000%, Due 4/25/2023A GBP 100,000 148,362

Total Consumer, Non-Cyclical

459,080

See accompanying notes

29

American Beacon TwentyFour Short Term Bond FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
FOREIGN CORPORATE OBLIGATIONS - 74.03% (continued)
Financial - 47.72%
Banks - 17.31%
Barclays PLC, 3.750%, Due 11/22/2030, (5-Yr. UK Government Bond + 3.750%)A B GBP 100,000 $ 149,406
Credit Agricole SA, 7.375%, Due 12/18/2023 GBP 150,000 239,809
HSBC Holdings PLC, 6.375%, Due 9/17/2024, (5-Yr. USD ICE Swap + 3.705%)B C $ 200,000 221,220
ING Groep NV, 2.125%, Due 5/26/2031, (5-Yr. Annual EUR Swap + 2.400%)A B EUR 100,000 126,045
Investec Bank PLC, 9.625%, Due 2/17/2022A GBP 100,000 145,703
Investec PLC, 4.500%, Due 5/5/2022A GBP 100,000 142,448
Lloyds Bank PLC, 7.625%, Due 4/22/2025A GBP 100,000 171,502
Natwest Group PLC, 3.622%, Due 8/14/2030, (5-Yr. UK Government Bond + 3.550%)A B GBP 100,000 147,530
Paragon Banking Group PLC, 4.375%, Due 9/25/2031, (5-Yr. GBP Swap + 3.956%)A B GBP 100,000 145,249
Virgin Money UK PLC, 7.875%, Due 12/14/2028, (5-Yr. UK Government Bond + 7.128%)A B GBP 125,000 198,062
Volksbank Wien AG, 2.750%, Due 10/6/2027, (5-Yr. Annual EUR Swap + 2.550%)A B EUR 100,000 121,447
1,808,421
Financial Services - 1.35%
Close Brothers Group PLC, 4.250%, Due 1/24/2027, (3-mo. GBP LIBOR + 3.650%)A B GBP 100,000 141,094
Insurance - 23.62%
Admiral Group PLC, 5.500%, Due 7/25/2024A GBP 100,000 156,022
Allianz SE, 3.500%, Due 12/31/2099A D 200,000 206,750
ASR Nederland NV, 5.125%, Due 9/29/2045, (5-Yr. Annual EUR Swap + 5.200%)A B EUR 100,000 139,926
Legal & General Group PLC, 5.375%, Due 10/27/2045, (5-Yr. UK Government Bond + 4.580%)A B GBP 100,000 159,323
Liverpool Victoria Friendly Society Ltd., 6.500%, Due 5/22/2043, (5-Yr. UK Government Bond + 5.630%)A B GBP 100,000 150,070
Nationale-Nederlanden Levensverzekering Maatschappij NV, 9.000%, Due 8/29/2042, (3-mo. EUR EURIBOR + 8.120%)A B EUR 100,000 130,831
Pension Insurance Corp. PLC, 6.500%, Due 7/3/2024A GBP 140,000 221,974
Phoenix Group Holdings PLC,

4.125%, Due 7/20/2022A

GBP 100,000 143,027

6.625%, Due 12/18/2025A

GBP 150,000 250,531
QBE Insurance Group Ltd., 6.115%, Due 5/24/2042, (5-Yr. GBP Swap + 5.000%)A B GBP 100,000 144,282
RL Finance Bonds PLC, 6.125%, Due 11/30/2043, (5-Yr. UK Government Bond + 4.321%)A B GBP 100,000 153,625
Rothesay Life PLC, 8.000%, Due 10/30/2025A GBP 190,000 330,190
Scottish Widows Ltd., 5.500%, Due 6/16/2023A GBP 100,000 150,174
Storebrand Livsforsikring A/S, 6.875%, Due 4/4/2043, (6-mo. EUR EURIBOR + 6.194%)A B EUR 100,000 131,673
2,468,398
Real Estate - 1.18%
Heimstaden Bostad AB, 3.248%, Due 11/19/2024, (5-Yr. Annual EUR Swap + 3.667%)A B C EUR 100,000 122,725
Savings & Loans - 4.26%
Nationwide Building Society, 5.875%, Due 12/20/2024, (5-Yr. UK Government Bond + 5.390%)A B C GBP 200,000 304,326
Skipton Building Society, 2.000%, Due 10/2/2026, (1-Yr. UK Government Bond + 2.150%)A B GBP 100,000 141,220
445,546

Total Financial

4,986,184
Industrial - 2.78%
Transportation - 2.78%
Firstgroup PLC, 5.250%, Due 11/29/2022A GBP 100,000 147,181
National Express Group PLC, 4.250%, Due 11/26/2025, (5-Yr. UK Government Bond + 4.135%)A B C GBP 100,000 143,690
290,871

Total Industrial

290,871
Utilities - 7.14%
Electric - 5.71%
Cadent Finance PLC, 1.125%, Due 9/22/2021A GBP 100,000 138,500
Enel SpA, 3.500%, Due 5/24/2080, (5-Yr. Annual EUR Swap + 3.564%)A B EUR 100,000 129,543

See accompanying notes

30

American Beacon TwentyFour Short Term Bond FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
FOREIGN CORPORATE OBLIGATIONS - 74.03% (continued)
Utilities - 7.14% (continued)
Electric - 5.71% (continued)
Iberdrola International BV, 1.874%, Due 1/28/2026, Series NC5, (5-Yr. Annual EUR Swap + 2.321%)A B C EUR 100,000 $ 122,192
SSE PLC, 4.750%, Due 9/16/2077, (5-Yr. Semi-Annual USD Swap + 2.574%)A B 200,000 206,846
597,081
Gas - 1.43%
Centrica PLC, 5.250%, Due 4/10/2075, (5-Yr. GBP Swap + 3.611%)A B GBP 100,000 148,915

Total Utilities

745,996

Total Foreign Corporate Obligations (Cost $7,307,186)

7,735,840
COLLATERALIZED MORTGAGE OBLIGATIONS - 10.72%
Harben Finance PLC, 1.881%, Due 8/20/2056, 2017-1X D, (3-mo. GBP LIBOR + 1.800%)A B GBP 232,000 321,798
Ripon Mortgages PLC, 1.581%, Due 8/20/2056, 1X C1, (3-mo. GBP LIBOR + 1.500%)A B GBP 350,000 486,076
Tower Bridge Funding PLC, 2.681%, Due 12/20/2061, 3 D, (3-mo. GBP LIBOR + 2.600%)A B GBP 225,000 312,653

Total Collateralized Mortgage Obligations (Cost $1,039,553)

1,120,527
U.S. TREASURY OBLIGATIONS - 3.93% (Cost $410,591)
U.S. Treasury Notes/Bonds, 1.750%, Due 7/31/2021 $ 410,000 410,579

TOTAL INVESTMENTS - 96.18% (Cost $9,451,783)

10,050,093

OTHER ASSETS, NET OF LIABILITIES - 3.82%

399,166

TOTAL NET ASSETS - 100.00%

$ 10,449,259

Percentages are stated as a percent of net assets.

*In U.S. Dollars unless otherwise noted.

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

B Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on June 30, 2021.

C Perpetual maturity. The date shown, if any, is the next call date.

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

CMT - Constant Maturity Treasury.

EURIBOR - Euro Interbank Offered Rate.

ICE - Intercontinental Exchange.

LIBOR - London Interbank Offered Rate.

PLC - Public Limited Company.

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

Forward Foreign Currency Contracts Open on June 30, 2021:
Currency Purchased* Currency Sold* Settlement
Date
Counterparty Unrealized
Appreciation
Unrealized
(Depreciation)
Net Unrealized
Appreciation
(Depreciation)
USD 7,574,338 GBP 7,405,140 7/13/2021 SSB $ 169,198 $ - $ 169,198
USD 1,098,973 EUR 1,070,871 7/13/2021 SSB 28,102 - 28,102
USD 148,645 GBP 148,856 7/13/2021 SSB - (211 ) (211 )
USD 112,751 EUR 112,537 7/13/2021 SSB 214 - 214
$ 197,514 $ (211 ) $ 197,303
*

All values denominated in USD.

See accompanying notes

31

American Beacon TwentyFour Short Term Bond FundSM

Schedule of Investments

June 30, 2021

Glossary:
Counterparty Abbreviations:
SSB State Street Bank & Trust Co.
Currency Abbreviations:
EUR Euro
GBP Pound Sterling
USD United States Dollar

The Fund's investments are summarized by level based on the inputs used to determine their values. As of June 30, 2021, the investments were classified as described below:

TwentyFour Short Term Bond Fund

Level 1 Level 2 Level 3 Total

Assets

Corporate Obligations

$ - $ 783,147 $ - $ 783,147

Foreign Corporate Obligations

- 7,735,840 - 7,735,840

Collateralized Mortgage Obligations

- 1,120,527 - 1,120,527

U.S. Treasury Obligations

- 410,579 - 410,579

Total Investments in Securities - Assets

$ - $ 10,050,093 $ - $ 10,050,093

Financial Derivative Instruments - Assets

Forward Foreign Currency Contracts

$ - $ 197,514 $ - $ 197,514

Total Financial Derivative Instruments - Assets

$ - $ 197,514 $ - $ 197,514

Financial Derivative Instruments - Liabilities

Forward Foreign Currency Contracts

$ - $ (211 ) $ - $ (211 )

Total Financial Derivative Instruments - Liabilities

$ - $ (211 ) $ - $ (211 )

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended June 30, 2021, there were no transfers into or out of Level 3.

See accompanying notes

32

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
CORPORATE OBLIGATIONS - 9.29%
Basic Materials - 0.42%
Chemicals - 0.42%
Kraton Polymers LLC / Kraton Polymers Capital Corp., 4.250%, Due 12/15/2025A $ 965,000 $ 984,300
Communications - 1.22%
Media - 0.23%
Nexstar Broadcasting, Inc.,

5.625%, Due 7/15/2027A

262,000 277,720

4.750%, Due 11/1/2028A

250,000 256,875
534,595
Telecommunications - 0.99%
AT&T, Inc., 2.875%, Due 3/2/2025, Series B, (5-Yr. EUR Swap +3.140%)B C EUR 1,000,000 1,206,655
Consolidated Communications, Inc., 5.000%, Due 10/1/2028A 105,000 106,444
Lumen Technologies, Inc., 5.375%, Due 6/15/2029A 1,000,000 1,016,350
2,329,449

Total Communications

2,864,044
Consumer, Cyclical - 2.21%
Airlines - 0.48%
American Airlines Inc/AAdvantage Loyalty IP Ltd., 5.500%, Due 4/20/2026A 1,080,000 1,143,450
Auto Parts & Equipment - 1.03%
American Axle & Manufacturing, Inc., 6.875%, Due 7/1/2028 961,000 1,048,538
Clarios Global LP / Clarios US Finance Co., 8.500%, Due 5/15/2027A 370,000 403,374
Titan International, Inc., 7.000%, Due 4/30/2028A 920,000 962,550
2,414,462
Home Builders - 0.32%
Shea Homes LP / Shea Homes Funding Corp., 4.750%, Due 2/15/2028A 738,000 758,295
Lodging - 0.38%
Marriott Ownership Resorts, Inc., 4.500%, Due 6/15/2029A 875,000 887,031

Total Consumer, Cyclical

5,203,238
Consumer, Non-Cyclical - 0.86%
Commercial Services - 0.49%
NESCO Holdings, Inc., 5.500%, Due 4/15/2029A 1,090,000 1,137,687
Cosemetics/Personal Care - 0.30%
Coty, Inc., 3.875%, Due 4/15/2026A EUR 600,000 714,111
Food - 0.07%
Simmons Foods Inc/Simmons Prepared Foods Inc/Simmons Pet Food Inc/Simmons Feed, 4.625%, Due 3/1/2029A 167,000 168,451

Total Consumer, Non-Cyclical

2,020,249
Energy - 0.85%
Coal - 0.27%
SunCoke Energy, Inc., 4.875%, Due 6/30/2029A 630,000 629,212
Pipelines - 0.58%
EnLink Midstream LLC,

5.625%, Due 1/15/2028A

424,000 447,909

5.375%, Due 6/1/2029

880,000 918,386
1,366,295

Total Energy

1,995,507

See accompanying notes

33

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
CORPORATE OBLIGATIONS - 9.29% (continued)
Financial - 1.64%
Diversified Financial Services - 1.26%
Burford Capital Global Finance LLC, 6.250%, Due 4/15/2028A $ 580,000 $ 609,157
Encore Capital Group, Inc.,

4.875%, Due 10/15/2025A

EUR 600,000 751,469

5.375%, Due 2/15/2026A

GBP 300,000 437,296

4.250%, Due 1/15/2028, (3-mo. EUR EURIBOR + 4.250%)A B

EUR 400,000 486,940

4.250%, Due 6/1/2028A

GBP 500,000 691,650
2,976,512
Insurance - 0.23%
Liberty Mutual Group, Inc., 3.625%, Due 5/23/2059, (5-Yr. Annual EUR Swap + 3.700%)B D EUR 430,000 530,925
REITS - 0.15%
Brookfield Property REIT, Inc. / BPR Cumulus LLC / BPR Nimbus LLC / GGSI Sellco LLC, 5.750%, Due 5/15/2026A 340,000 357,425

Total Financial

3,864,862
Industrial - 1.60%
Aerospace/Defense - 0.56%
TransDigm, Inc.,

5.500%, Due 11/15/2027

200,000 208,500

4.625%, Due 1/15/2029A

1,090,000 1,090,381
1,298,881
Building Materials - 0.87%
Builders FirstSource, Inc.,

6.750%, Due 6/1/2027A

297,000 318,161

5.000%, Due 3/1/2030A

157,000 165,078
Standard Industries, Inc., 4.375%, Due 7/15/2030A 503,000 518,719
Victors Merger Corp., 6.375%, Due 5/15/2029A 1,040,000 1,047,800
2,049,758
Miscellaneous Manufacturing - 0.17%
Amsted Industries, Inc., 4.625%, Due 5/15/2030A 393,000 402,825

Total Industrial

3,751,464
Utilities - 0.49%
Water - 0.49%
Solaris Midstream Holdings LLC, 7.625%, Due 4/1/2026A 1,090,000 1,155,400

Total Corporate Obligations (Cost $21,418,932)

21,839,064
FOREIGN CONVERTIBLE OBLIGATIONS - 0.11% (Cost $234,750)
Financial - 0.11%
Insurance - 0.11%
BNP Paribas Fortis SA, Series CASH, 1.457%, Due 12/31/2049B C D 250,000 269,758
FOREIGN CORPORATE OBLIGATIONS - 59.73%
Basic Materials - 1.41%
Chemicals - 1.41%
INEOS Quattro Finance PLC, 3.750%, Due 7/15/2026A EUR 800,000 975,616
Lenzing AG, 5.750%, Due 9/7/2025, (5-Yr. Annual EUR Swap + 11.208%)B C D EUR 600,000 756,256
UPL Corp. Ltd.,

5.250%, Due 2/27/2025, (5-Yr. CMT + 3.865%)B C D

1,330,000 1,356,600

4.625%, Due 6/16/2030D

200,000 215,290
3,303,762

Total Basic Materials

3,303,762

See accompanying notes

34

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
FOREIGN CORPORATE OBLIGATIONS - 59.73% (continued)
Communications - 4.67%
Advertising - 0.11%
Summer BC Holdco SARL, 9.250%, Due 10/31/2027D EUR 198,232 $ 254,739
Internet - 0.47%
Rakuten Group, Inc., 4.250%, Due 4/22/2027, (5-Yr. Annual EUR Swap + 4.740%)A B C EUR 900,000 1,099,190
Media - 0.87%
RCS & RDS SA, 3.250%, Due 2/5/2028A EUR 600,000 711,706
Virgin Media Secured Finance PLC,

5.250%, Due 5/15/2029D

GBP 475,000 692,885

4.250%, Due 1/15/2030D

GBP 460,000 633,518
2,038,109
Telecommunications - 3.22%
Altice France Holding SA, 8.000%, Due 5/15/2027D EUR 810,000 1,036,142
Altice France SA, 5.500%, Due 1/15/2028A $ 200,000 207,540
Kenbourne Invest SA,

6.875%, Due 11/26/2024A

900,000 953,739

4.700%, Due 1/22/2028A

500,000 502,500
Network i2i Ltd., 3.975%, Due 3/3/2026, (5-Yr. CMT + 3.390%)A B C 1,000,000 1,000,500
Sable International Finance Ltd., 5.750%, Due 9/7/2027A 291,000 306,190
SoftBank Group Corp., 6.000%, Due 7/19/2023, (5-Yr. USD ICE Swap + 4.226%)B C D 1,010,000 1,020,201
TalkTalk Telecom Group PLC, 3.875%, Due 2/20/2025D GBP 676,000 921,178
Telesat Canada / Telesat LLC, 6.500%, Due 10/15/2027A 716,000 681,990
Vodafone Group PLC,

4.875%, Due 10/3/2078, (5-Yr. GBP Swap + 3.267%)B D

GBP 225,000 338,264

7.000%, Due 4/4/2079, (5-Yr. Semi-Annual USD Swap + 4.873%)B

510,000 618,427
7,586,671

Total Communications

10,978,709
Consumer, Cyclical - 3.56%
Auto Manufacturers - 0.43%
Volkswagen International Finance NV,

4.625%, Due 3/24/2026, (12-Yr. Annual EUR Swap + 2.967%)B C D

EUR 250,000 337,162

4.625%, Due 6/27/2028, (10-Yr. Annual EUR Swap + 3.982%)B C D

EUR 500,000 685,512
1,022,674
Entertainment - 0.44%
ASR Media and Sponsorship SpA, 5.125%, Due 8/1/2024D EUR 401,651 461,229
Inter Media and Communication SpA, 4.875%, Due 12/31/2022D EUR 477,577 564,730
1,025,959
Home Builders - 0.67%
Brookfield Residential Properties, Inc. / Brookfield Residential US Corp., 6.250%, Due 9/15/2027A 793,000 837,606
Empire Communities Corp., 7.000%, Due 12/15/2025A 701,000 736,050
1,573,656
Leisure Time - 0.27%
Pinnacle Bidco PLC,

5.500%, Due 2/15/2025D

EUR 300,000 364,618

6.375%, Due 2/15/2025D

GBP 200,000 282,409
647,027
Lodging - 0.53%
Fortune Star BVI Ltd.,

4.350%, Due 5/6/2023D

EUR 100,000 120,075

5.950%, Due 10/19/2025D

1,070,000 1,122,463
1,242,538

See accompanying notes

35

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
FOREIGN CORPORATE OBLIGATIONS - 59.73% (continued)
Consumer, Cyclical - 3.56% (continued)
Retail - 1.22%
B.C. ULC / New Red Finance, Inc., 4.375%, Due 1/15/2028A $ 284,000 $ 287,905
Mobilux Finance SAS, 4.250%, Due 7/15/2028A EUR 1,000,000 1,185,750
Punch Finance PLC, 6.125%, Due 6/30/2026A GBP 500,000 700,371
Stonegate Pub Co. Financing PLC,

8.000%, Due 7/13/2025D

GBP 130,000 186,159

8.250%, Due 7/31/2025D

GBP 200,000 289,110
Vivo Energy Investments BV, 5.125%, Due 9/24/2027A 200,000 213,500
2,862,795

Total Consumer, Cyclical

8,374,649
Consumer, Non-Cyclical - 3.16%
Agriculture - 0.58%
Kernel Holding SA, 6.750%, Due 10/27/2027A 200,000 216,810
MHP Lux SA, 6.250%, Due 9/19/2029D 500,000 497,600
MHP SE, 7.750%, Due 5/10/2024D 600,000 650,736
1,365,146
Commercial Services - 1.10%
AA Bond Co. Ltd., 6.500%, Due 1/31/2026A GBP 800,000 1,148,139
La Financiere Atalian SASU,

4.000%, Due 5/15/2024D

EUR 400,000 470,974

5.125%, Due 5/15/2025D

EUR 200,000 238,336
Verisure Midholding AB, 5.250%, Due 2/15/2029A EUR 600,000 731,015
2,588,464
Food - 0.83%
Bellis Acquisition Co. PLC, 3.250%, Due 2/16/2026A GBP 350,000 484,760
Bellis Finco PLC, 4.000%, Due 2/16/2027A GBP 350,000 484,155
Casino Guichard Perrachon SA, 6.625%, Due 1/15/2026D EUR 790,000 987,093
1,956,008
Pharmaceuticals - 0.65%
Cheplapharm Arzneimittel GmbH, 5.500%, Due 1/15/2028A 1,025,000 1,050,625
Gruenenthal GmbH,

3.625%, Due 11/15/2026A

EUR 190,000 231,563

4.125%, Due 5/15/2028A

EUR 190,000 232,231
1,514,419

Total Consumer, Non-Cyclical

7,424,037
Energy - 2.71%
Energy - Alternate Sources - 0.29%
Inversiones Latin America Power Ltda, 5.125%, Due 6/15/2033A 700,000 693,700
Oil & Gas - 2.42%
BP Capital Markets PLC,

3.250%, Due 3/22/2026, (5-Yr. Annual EUR Swap + 3.880%)B C D

EUR 100,000 126,638

3.625%, Due 3/22/2029, (5-Yr. Annual EUR Swap + 4.120%)B C D

EUR 835,000 1,076,557
Guara Norte SARL, 5.198%, Due 6/15/2034A 589,374 614,423
Petroleos Mexicanos,

6.500%, Due 3/13/2027

200,000 210,886

6.840%, Due 1/23/2030

860,000 888,552

6.625%, Due 6/15/2035

622,000 601,163

6.625%, Due 6/15/2038

200,000 185,029
Trafigura Funding SA, 5.875%, Due 9/23/2025D 1,000,000 1,077,700

See accompanying notes

36

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
FOREIGN CORPORATE OBLIGATIONS - 59.73% (continued)
Energy - 2.71% (continued)
Oil & Gas - 2.42% (continued)
Trafigura Group Pte Ltd., 6.875%, Due 12/22/2021, (5-Yr. Semi-Annual USD Swap + 6.647%)B C D $ 890,000 $ 906,732
5,687,680

Total Energy

6,381,380
Financial - 41.06%
Banks - 20.80%
Abanca Corp. Bancaria SA, 6.000%, Due 1/20/2026, (5-Yr. Annual EUR Swap + 6.570%)B C D EUR 800,000 1,010,138
AIB Group PLC, 6.250%, Due 6/23/2025, (5-Yr. Annual EUR Swap + 6.629%)B C D EUR 1,000,000 1,348,791
Aldermore Group PLC, 8.500%, Due 10/28/2026, (5-Yr. GBP Swap + 7.784%)B D GBP 550,000 779,835
Banco Bilbao Vizcaya Argentaria SA, 5.875%, Due 9/24/2023, Series, (5-Yr. Annual EUR Swap + 5.660%)B C D EUR 1,000,000 1,280,610
Banco de Sabadell SA,

6.500%, Due 5/18/2022, (5-Yr. Annual EUR Swap + 6.414%)B C D

EUR 600,000 730,693

6.125%, Due 11/23/2022, (5-Yr. Annual EUR Swap + 6.051%)B C D

EUR 600,000 731,907

5.750%, Due 3/15/2026, (5-Yr. Annual EUR Swap + 6.198%)B C D

EUR 1,400,000 1,752,864

2.000%, Due 1/17/2030, (5-Yr. Annual EUR Swap + 2.200%)B D

EUR 400,000 468,371
Banco Mercantil del Norte SA,

6.750%, Due 9/27/2024, (5-Yr. CMT + 4.967%)B C D

200,000 215,000

7.500%, Due 6/27/2029, (10-Yr. CMT + 5.470%)B C D

500,000 565,000

7.625%, Due 12/31/2099, (10-Yr. CMT + 5.353%)B D

500,000 567,750

8.375%, Due 12/31/2099, (10-Yr. CMT + 7.760%)B D

300,000 362,520
Banco Santander SA, 6.750%, Due 4/25/2022, (5-Yr. Annual EUR Swap + 6.803%)B C D EUR 600,000 741,687
Bank of Ireland Group PLC, 7.500%, Due 5/19/2025, (5-Yr. Annual EUR Swap + 7.924%)B C D EUR 1,400,000 1,960,934
Barclays PLC,

7.125%, Due 6/15/2025, (5-Yr. UK Government Bond + 6.579%)B C

GBP 1,199,000 1,894,924

6.375%, Due 12/15/2025, (5-Yr. UK Government Bond + 6.016%)B C D

GBP 1,240,000 1,918,839
BAWAG Group AG,

5.000%, Due 5/14/2025, (5-Yr. Annual EUR Swap + 4.415%)B C D

EUR 400,000 514,616

5.125%, Due 10/1/2025, (5-Yr. Annual EUR Swap + 5.546%)B C D

EUR 1,000,000 1,286,539
BBVA Bancomer SA,

5.125%, Due 1/18/2033, (5-Yr. CMT + 2.650%)B D

200,000 208,400

5.875%, Due 9/13/2034, (5-Yr. CMT + 4.308%)B D

600,000 656,820
BNP Paribas SA, 6.625%, Due 3/25/2024, (5-Yr. USD ICE Swap + 4.149%)B C D 700,000 766,829
CaixaBank SA,

6.750%, Due 6/13/2024, (5-Yr. Annual EUR Swap + 6.498%)B C D

EUR 400,000 534,773

5.875%, Due 10/9/2027, Series ., (5-Yr. Annual EUR Swap + 6.346%)B C D

EUR 400,000 543,074
Credit Agricole SA, 7.500%, Due 6/23/2026, (5-Yr. GBP Swap + 4.812%)A B C GBP 800,000 1,314,766
Credit Suisse Group AG,

7.500%, Due 7/17/2023, (5-Yr. Semi-Annual USD Swap + 4.600%)B C D

1,200,000 1,305,000

7.500%, Due 12/11/2023, (5-Yr. Semi-Annual USD Swap + 4.598%)B C D

200,000 221,868

7.250%, Due 9/12/2025, (5-Yr. USD ICE Swap + 4.332%)B C D

220,000 248,710

6.375%, Due 8/21/2026, (5-Yr. CMT + 4.822%)A B C

820,000 912,767
Deutsche Pfandbriefbank AG,

5.750%, Due 4/28/2023, (5-Yr. EUR Swap +5.383%)B C D

EUR 600,000 740,264

4.600%, Due 2/22/2027D

EUR 400,000 511,761
Emirates NBD Bank PJSC,

6.125%, Due 3/20/2025, (6-Yr. Semi-Annual USD Swap + 3.656%)B C D

200,000 215,500

6.125%, Due 4/9/2026, Series, (6-Yr. Semi-Annual USD Swap + 5.702%)B C D

1,300,000 1,429,480
HSBC Holdings PLC,

5.250%, Due 9/16/2022, (5-Yr. Annual EUR Swap + 4.383%)B C D

EUR 500,000 620,295

5.875%, Due 9/28/2026, (5-Yr. GBP Swap + 4.276%)B C

GBP 1,319,000 2,045,682
Intesa Sanpaolo SpA,

6.250%, Due 5/16/2024, (5-Yr. Annual EUR Swap + 5.856%)B C D

EUR 730,000 948,911

7.750%, Due 1/11/2027, (5-Yr. Annual EUR Swap + 7.192%)B C D

EUR 850,000 1,233,318

5.148%, Due 6/10/2030D

GBP 970,000 1,528,016
Investec Bank PLC, 4.250%, Due 7/24/2028, (5-Yr. GBP Swap + 3.300%)B D GBP 450,000 653,998
Investec PLC, 6.750%, Due 12/5/2024, (5-Yr. GBP Swap + 5.749%)B C D GBP 500,000 716,468
Natwest Group PLC,

5.125%, Due 5/12/2027, (5-Yr. UK Government Bond + 4.985%)B C

GBP 850,000 1,265,460

2.467%, Due 9/30/2027, Series U, (3-mo. USD LIBOR + 2.320%)B C

800,000 793,000

4.500%, Due 3/31/2028, (5-Yr. UK Government Bond + 3.992%)B C

GBP 300,000 425,896
NBK Tier Financing Ltd., 4.500%, Due 8/27/2025, (6-Yr. Semi-Annual USD Swap + 2.832%)B C D 1,400,000 1,461,362
Oaknorth Bank PLC, 7.750%, Due 6/1/2028, (6-Yr. UK Government Bond + 6.851%)B D GBP 250,000 328,534
Shawbrook Group PLC,

7.875%, Due 12/8/2022, (5-Yr. GBP Swap + 6.752%)B C D

GBP 200,000 265,985

9.000%, Due 10/10/2030, (5-Yr. UK Government Bond + 9.037%)B D

GBP 500,000 708,111

See accompanying notes

37

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
FOREIGN CORPORATE OBLIGATIONS - 59.73% (continued)
Financial - 41.06% (continued)
Banks - 20.80% (continued)
Skandinaviska Enskilda Banken AB, 5.625%, Due 5/13/2022, Series, (5-Yr. Semi-Annual USD Swap + 3.493%)B C D $ 800,000 $ 824,000
Societe Generale SA, 5.375%, Due 11/18/2030, (5-Yr. CMT + 4.514%)A B C 530,000 561,137
Standard Chartered PLC, 7.750%, Due 4/2/2023, (5-Yr. Semi-Annual USD Swap + 5.723%)B C D 476,000 519,887
Stichting AK Rabobank Certificaten, 2.188%, Due 12/31/2049C D E F EUR 1,248,400 1,991,879
UBS Group AG,

7.000%, Due 1/31/2024, (5-Yr. Semi-Annual USD Swap + 4.344%)B C D

400,000 440,500

7.000%, Due 1/31/2024, (5-Yr. Semi-Annual USD Swap + 4.344%)A B C

700,000 770,875

5.125%, Due 7/29/2026, (5-Yr. CMT + 4.855%)B C D

200,000 217,500
UniCredit SpA, 8.000%, Due 6/3/2024, (5-Yr. Semi-Annual USD Swap + 5.180%)B C D 800,000 889,850
Virgin Money UK PLC,

8.750%, Due 11/10/2021, (5-Yr. GBP Swap + 7.930%)B C D

GBP 700,000 991,307

9.250%, Due 6/8/2024, (5-Yr. UK Government Bond + 8.307%)B C D

GBP 600,000 967,342
48,910,343
Diversified Financial Services - 3.15%
Arrow Global Finance PLC, 5.125%, Due 9/15/2024D GBP 350,000 487,191
Bracken MidCo1 PLC, 8.875%, Due 10/15/2023, Cash (8.875%) or PIK (in-kind rate 9.648%)A GBP 1,610,088 2,300,381
Burford Capital PLC,

6.125%, Due 10/26/2024D

GBP 310,000 448,120

5.000%, Due 12/1/2026, Series 0025

GBP 300,000 421,118
doValue SpA, 5.000%, Due 8/4/2025A EUR 280,000 347,585
Garfunkelux Holdco SA,

6.750%, Due 11/1/2025A

EUR 140,000 172,896

6.250%, Due 5/1/2026, (3-mo. EUR EURIBOR + 6.250%)A B

EUR 160,000 192,566
Jerrold Finco PLC,

4.875%, Due 1/15/2026A

GBP 250,000 355,702

5.250%, Due 1/15/2027A

GBP 520,000 742,888
OneSavings Bank PLC, 9.125%, Due 5/25/2022, (5-Yr. GBP ICE Swap + 8.359%)B C D GBP 400,000 574,069
Unifin Financiera SAB de CV,

8.375%, Due 1/27/2028A

200,000 187,000

9.875%, Due 1/28/2029A

1,200,000 1,191,348
7,420,864
Insurance - 9.14%
Achmea BV, 4.625%, Due 3/24/2029, (5-Yr. EUR Swap +4.780%)B C D EUR 800,000 1,025,674
Allianz SE, 3.500%, Due 11/17/2025, (5-Yr. CMT + 2.973%)A B C 600,000 620,250
ASR Nederland NV, 4.625%, Due 10/19/2027, (5-Yr. Annual EUR Swap + 3.789%)B C D EUR 750,000 980,120
Athora Netherlands NV, 7.000%, Due 6/19/2025, (5-Yr. Annual EUR Swap + 6.463%)B C D EUR 900,000 1,224,829
CNP Assurances, 4.750%, Due 6/27/2028, Series, (5-Yr. Annual EUR Swap + 3.914%)B C D EUR 1,000,000 1,362,102
Direct Line Insurance Group PLC, 4.750%, Due 12/7/2027, (5-Yr. GBP Swap + 3.394%)B C D GBP 1,160,000 1,645,273
Galaxy Bidco Ltd., 6.500%, Due 7/31/2026D GBP 410,000 597,637
La Mondiale SAM, 4.375%, Due 4/24/2029, (5-Yr. Annual EUR Swap + 4.411%)B C D EUR 1,500,000 1,956,488
Legal & General Group PLC, 5.625%, Due 3/24/2031, (5-Yr. UK Government Bond + 5.378%)B C D GBP 1,000,000 1,549,296
Pension Insurance Corp. PLC, 7.375%, Due 7/25/2029, (5-Yr. UK Government Bond + 6.658%)B C GBP 1,914,000 3,210,259
Phoenix Group Holdings PLC, 5.750%, Due 4/26/2028, (5-Yr. UK Government Bond + 4.169%)B C D GBP 1,700,000 2,539,739
QBE Insurance Group Ltd., 5.250%, Due 5/16/2025, (5-Yr. CMT + 3.047%)B C D 1,000,000 1,055,187
Rothesay Life PLC, 6.875%, Due 9/12/2028, (5-Yr. UK Government Bond + 5.419%)B C D GBP 1,000,000 1,590,795
UnipolSai Assicurazioni SpA,

5.750%, Due 6/18/2024, (3-mo. EUR EURIBOR + 5.180%)B C D

EUR 550,000 717,379

6.375%, Due 4/27/2030, (5-Yr. Annual EUR Swap + 6.744%)B C D

EUR 1,040,000 1,418,157
21,493,185
Real Estate - 3.99%
Aedas Homes Opco SLU, 4.000%, Due 8/15/2026A EUR 370,000 448,599
China Evergrande Group,

9.500%, Due 4/11/2022D

200,000 171,100

8.750%, Due 6/28/2025D

1,200,000 800,250
Country Garden Holdings Co. Ltd.,

5.125%, Due 1/14/2027D

300,000 320,132

5.625%, Due 1/14/2030D

400,000 433,315

4.800%, Due 8/6/2030D

200,000 208,264
Dar Al-Arkan Sukuk Co. Ltd., 6.875%, Due 3/21/2023D 400,000 415,748
Heimstaden AB, 4.250%, Due 3/9/2026D EUR 800,000 966,799
Heimstaden Bostad AB, 3.375%, Due 1/15/2026, (5-Yr. Annual EUR Swap + 3.914%)B C D EUR 750,000 919,514
Logan Group Co. Ltd.,

5.250%, Due 10/19/2025D

300,000 306,810

4.850%, Due 12/14/2026D

780,000 782,192

See accompanying notes

38

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
FOREIGN CORPORATE OBLIGATIONS - 59.73% (continued)
Financial - 41.06% (continued)
Real Estate - 3.99% (continued)
MAF Global Securities Ltd.,

5.500%, Due 9/7/2022, (5-Yr. Semi-Annual USD Swap + 3.476%)B C D

$ 400,000 $ 411,260

6.375%, Due 3/20/2026, (5-Yr. CMT + 3.539%)B C D

800,000 871,099
Neinor Homes SA, 4.500%, Due 10/15/2026A EUR 280,000 339,885
Sunac China Holdings Ltd., 6.500%, Due 1/10/2025D 1,095,000 1,074,499
Via Celere Desarrollos Inmobiliarios SA, 5.250%, Due 4/1/2026A EUR 740,000 912,553
9,382,019
Savings & Loans - 3.98%
Coventry Building Society, 6.875%, Due 9/18/2024, (5-Yr. UK Government Bond + 6.111%)B C D GBP 1,925,000 2,995,709
Nationwide Building Society,

5.875%, Due 12/20/2024, (5-Yr. UK Government Bond + 5.390%)B C D

GBP 1,350,000 2,054,201

5.750%, Due 6/20/2027, (5-Yr. UK Government Bond + 5.625%)B C D

GBP 800,000 1,242,203

10.250%, Due 12/31/2049, Series CCDSC D E

GBP 1,186,700 3,061,513
9,353,626

Total Financial

96,560,037
Industrial - 2.49%
Building Materials - 0.31%
Cemex SAB de CV, 5.125%, Due 6/8/2026, (5-Yr. CMT + 4.534%)A B C 700,000 722,540
Machinery - Diversified - 0.50%
Sofima Holding SpA, 3.750%, Due 1/15/2028A EUR 325,000 387,219
Vertical Holdco GmbH, 6.625%, Due 7/15/2028D EUR 630,000 795,616
1,182,835
Packaging & Containers - 0.77%
Intelligent Packaging Ltd. Finco, Inc. / Intelligent Packaging Ltd. Co-Issuer LLC, 6.000%, Due 9/15/2028A 1,085,000 1,128,400
Kleopatra Finco SARL, 4.250%, Due 3/1/2026A EUR 400,000 476,126
Trivium Packaging Finance BV, 8.500%, Due 8/15/2027A 200,000 217,440
1,821,966
Transportation - 0.91%
InPost SA, 2.250%, Due 7/15/2027A EUR 1,000,000 1,193,458
National Express Group PLC, 4.250%, Due 11/26/2025, (5-Yr. UK Government Bond + 4.135%)B C D GBP 655,000 941,171
2,134,629

Total Industrial

5,861,970
Technology - 0.26%
Software - 0.26%
Cedacri Mergeco SpA, 4.625%, Due 5/15/2028, (3-mo. EUR EURIBOR + 4.625%)A B EUR 500,000 600,286
Utilities - 0.41%
Electric - 0.41%
ContourGlobal Power Holdings SA,

3.125%, Due 1/1/2028A

EUR 200,000 240,055

3.125%, Due 1/1/2028D

EUR 600,000 720,165
960,220

Total Utilities

960,220

Total Foreign Corporate Obligations (Cost $133,335,351)

140,445,050

See accompanying notes

39

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

Principal Amount* Fair Value
FOREIGN SOVEREIGN OBLIGATIONS - 0.55% (Cost $1,340,260)
Halcyon Loan Advisors European Funding, 5.130%, Due 10/18/2031, (3-mo. EUR EURIBOR + 5.1300%)A EUR 1,190,000 $ 1,283,748
ASSET-BACKED OBLIGATIONS - 10.82%
Ares European CLO DAC, 5.260%, Due 10/15/2030, (3-mo. EUR EURIBOR + 5.260%)B D EUR 1,250,000 1,455,821
Armada Euro CLO DAC, 9.100%, Due 7/15/2033, 4X F, (3-mo. EUR EURIBOR + 9.100%)B D EUR 700,000 830,856
Aurium CLO DAC, 3.100%, Due 4/16/2030, 3X D, (3-mo. EUR EURIBOR + 3.100%)B D EUR 500,000 589,036
BNPP AM Euro CLO BV, 4.700%, Due 10/15/2031, 2017-1X E, (3-mo. EUR EURIBOR + 4.700%)B D EUR 500,000 572,225
Carlyle Euro CLO DAC, 5.230%, Due 8/28/2031, 2018-2A D, (3-mo. EUR EURIBOR + 5.230%)A B EUR 500,000 556,235
Carlyle Global Market Strategies Euro CLO DAC, 4.770%, Due 5/17/2031, 2016-1A DR, (3-mo. EUR EURIBOR + 4.770%)A B EUR 500,000 550,899
CVC Cordatus Loan Fund DAC, 6.050%, Due 1/27/2031, 10A F, (3-mo. EUR EURIBOR + 6.050%)A B EUR 1,000,000 1,111,289
Dryden 39 Euro CLO BV, 4.970%, Due 10/15/2031, 2015-39X ER, (3-mo. EUR EURIBOR + 4.970%)B D EUR 1,000,000 1,169,000
Dryden 46 Euro CLO BV, 6.210%, Due 4/15/2034, (3-mo. EUR EURIBOR + 6.210%) A B EUR 1,400,000 1,664,383
Dryden 62 Euro CLO BV, 4.850%, Due 7/15/2031, 2017-62X E, (3-mo. EUR EURIBOR + 4.850%)B D EUR 1,000,000 1,160,983
Dryden Leveraged Loan CDO, 6.450%, Due 1/15/2032A EUR 1,100,000 1,239,274
E-Carat SA, 1.795%, Due 12/20/2028, 10FR E, (1-mo. EUR EURIBOR + 2.350%)B D EUR 772,466 910,959
Harvest CLO, 8.310%, Due 10/20/2032A EUR 1,100,000 1,259,091
Harvest CLO DAC, 3.950%, Due 5/11/2032, 17X DR, (3-mo. EUR EURIBOR + 3.950%)B D EUR 500,000 593,176
Madison Park Euro Funding DAC,

4.860%, Due 2/15/2031A

EUR 1,000,000 1,150,092

6.110%, Due 7/15/2035, 9A ER, (3-mo. EUR EURIBOR + 6.110%)A B

EUR 1,000,000 1,173,893
Man GLG Euro CLO DAC, 8.750%, Due 1/15/2030, 2X F, (3-mo. EUR EURIBOR + 8.750%)B D EUR 200,000 233,584
Milltown Park CLO DAC, 4.820%, Due 1/15/2031, 1X D, (3-mo. EUR EURIBOR + 4.8200%)B D EUR 1,000,000 1,160,874
Penta CLO DAC,

1.000%, Due 7/25/2036, 2021-9A E, (3-mo. EUR EURIBOR + 6.040%)A B

EUR 1,000,000 1,175,553

1.000%, Due 7/25/2036, 2021-9A F, (3-mo. EUR EURIBOR + 8.740%)A B

EUR 1,000,000 1,145,867
Providus CLO DAC, 5.250%, Due 7/15/2031, 2X E, (3-mo. EUR EURIBOR + 1.200%)B D EUR 545,000 648,558
Rockfield Park, 1.000%, Due 7/16/2034A EUR 1,500,000 1,760,839
Tikehau CLO BV, 6.250%, Due 12/7/2029, 2X E, (3-mo. EUR EURIBOR + 6.250%)B D EUR 500,000 595,847
Voya Euro CLO DAC,

6.410%, Due 10/15/2030, 1X F, (3-mo. EUR EURIBOR + 6.410%)B D

EUR 1,100,000 1,229,218

7.900%, Due 4/15/2033, 3X F, (3-mo. EUR EURIBOR + 7.900%)B D

EUR 1,300,000 1,497,668

Total Asset-Backed Obligations (Cost $24,754,921)

25,435,220
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.29% (Cost $608,090)
Towd Point Mortgage Funding - Granite PLC, 1.836%, Due 10/20/2051, 2019-GR4X C, (3-mo. GBP LIBOR + 1.750%)B D GBP 500,000 692,180
U.S. TREASURY OBLIGATIONS - 15.36%
U.S. Treasury Notes/Bonds,

0.125%, Due 11/30/2022

$ 12,040,000 12,032,005

0.125%, Due 3/31/2023

1,120,000 1,118,206

0.125%, Due 4/30/2023

8,480,000 8,463,769

0.125%, Due 5/31/2023

14,540,000 14,508,194

Total U.S. Treasury Obligations (Cost $36,166,410)

36,122,174
Shares
SHORT-TERM INVESTMENTS - 4.17% (Cost $9,818,634)
Investment Companies - 4.17%
American Beacon U.S. Government Money Market Select Fund, 0.01%G H 9,818,634 9,818,634

TOTAL INVESTMENTS - 100.32% (Cost $227,677,348)

235,905,828

LIABILITIES, NET OF OTHER ASSETS - (0.32%)

(758,588 )

TOTAL NET ASSETS - 100.00%

$ 235,147,240

Percentages are stated as a percent of net assets.

*In U.S. Dollars unless otherwise noted.

A Security exempt from registration under the Securities Act of 1933. These securities may be resold to qualified institutional buyers pursuant to Rule 144A. At the period end, the value of these securities amounted to $64,621,519 or 27.48% of net assets. The Fund has no right to demand registration of these securities.

See accompanying notes

40

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

B Variable, floating, or adjustable rate securities with an interest rate that changes periodically. Rates are periodically reset with rates that are based on a predetermined benchmark such as a widely followed interest rate such as T-bills, LIBOR or PRIME plus a fixed spread. The interest rate disclosed reflects the rate in effect on June 30, 2021.

C Perpetual maturity. The date shown, if any, is the next call date.

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

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

F Step Up/Down - A zero coupon bond that converts to a fixed rate or variable interest rate at a designated future date. The rate disclosed represents the coupon rate at June 30, 2021. The maturity date disclosed represents the final maturity date.

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

H7-day yield.

CLO - Collateralized Loan Obligation.

CMT - Constant Maturity Treasury.

DAC - Designated Activity Company.

EURIBOR - Euro Interbank Offered Rate.

ICE - Intercontinental Exchange.

LIBOR - London Interbank Offered Rate.

LLC - Limited Liability Company.

LP - Limited Partnership.

PIK - Payment in Kind.

PJSC - Private Joint Stock Company.

PLC - Public Limited Company.

Pte Ltd. - Private Limited.

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

REIT - Real Estate Investment Trust.

ULC - Unlimited Liability Company.

Forward Foreign Currency Contracts Open on June 30, 2021:
Currency Purchased* Currency Sold* Settlement
Date
Counterparty Unrealized
Appreciation
Unrealized
(Depreciation)
Net Unrealized
Appreciation
(Depreciation)
EUR 1,615,787 USD 1,663,418 7/2/2021 SSB $ - $ (47,631 ) $ (47,631 )
EUR 74,206,502 USD 74,625,861 7/2/2021 SSB - (419,359 ) (419,359 )
GBP 51,799,427 USD 51,996,163 7/2/2021 SSB - (196,736 ) (196,736 )
USD 73,228,566 EUR 71,009,218 7/2/2021 SSB 2,219,348 - 2,219,348
USD 52,570,410 GBP 51,352,251 7/2/2021 SSB 1,218,159 - 1,218,159
USD 626,904 EUR 610,080 7/2/2021 SSB 16,824 - 16,824
USD 477,558 EUR 467,007 7/2/2021 SSB 10,551 - 10,551
USD 74,675,232 EUR 74,256,969 8/4/2021 SSB 418,263 - 418,263
USD 1,733,734 EUR 1,721,427 7/2/2021 SSB 12,307 - 12,307
USD 2,100,976 EUR 2,089,372 7/2/2021 SSB 11,604 - 11,604
USD 52,000,125 GBP 51,804,440 8/4/2021 SSB 195,685 - 195,685
$ 4,102,741 $ (663,726 ) $ 3,439,015
*

All values denominated in USD.

Glossary:
Counterparty Abbreviations:
SSB State Street Bank & Trust Co.
Currency Abbreviations:
EUR Euro
GBP Pound Sterling
USD United States Dollar

See accompanying notes

41

American Beacon TwentyFour Strategic Income FundSM

Schedule of Investments

June 30, 2021

The Fund's investments are summarized by level based on the inputs used to determine their values. As of June 30, 2021, the investments were classified as described below:

TwentyFour Strategic Income Fund

Level 1 Level 2 Level 3 Total

Assets

Corporate Obligations

$ - $ 21,839,064 $ - $ 21,839,064

Foreign Convertible Obligations

- 269,758 - 269,758

Foreign Corporate Obligations

- 140,445,050 - 140,445,050

Foreign Sovereign Obligations

- 1,283,748 - 1,283,748

Asset-Backed Obligations

- 25,435,220 - 25,435,220

Collateralized Mortgage Obligations

- 692,180 - 692,180

U.S. Treasury Obligations

- 36,122,174 - 36,122,174

Short-Term Investments

9,818,634 - - 9,818,634

Total Investments in Securities - Assets

$ 9,818,634 $ 226,087,194 $ - $ 235,905,828

Financial Derivative Instruments - Assets

Forward Foreign Currency Contracts

$ - $ 4,102,741 $ - $ 4,102,741

Total Financial Derivative Instruments - Assets

$ - $ 4,102,741 $ - $ 4,102,741

Financial Derivative Instruments - Liabilities

Forward Foreign Currency Contracts

$ - $ (663,726 ) $ - $ (663,726 )

Total Financial Derivative Instruments - Liabilities

$ - $ (663,726 ) $ - $ (663,726 )

U.S. GAAP requires transfers between all levels to/from level 3 be disclosed. During the year ended June 30, 2021, there were no transfers into or out of Level 3.

See accompanying notes

42

American Beacon FundsSM

Statements of Assets and Liabilities

June 30, 2021

SSI Alternative
Income Fund
TwentyFour
Short Term Bond
Fund
TwentyFour
Strategic Income
Fund

Assets:

Investments in unaffiliated securities, at fair value

$ 127,030,414 $ 10,050,093 $ 226,087,194

Investments in affiliated securities, at fair value

2,971,598 - 9,818,634

Foreign currency, at fair value^

- 146,038 1,816,281

Cash

9,679 187,352 -

Cash with brokers

41,990,721 - -

Dividends and interest receivable

625,579 164,687 2,153,102

Receivable for investments sold

606,980 - 257,567

Receivable for fund shares sold

403,589 - 322,542

Receivable for tax reclaims

- 114 7,928

Receivable for expense reimbursement (Note 2)

8,817 - 21,164

Unrealized appreciation from forward foreign currency contracts

- 197,514 4,102,741

Prepaid expenses

62,558 26,703 57,492

Total assets

173,709,935 10,772,501 244,644,645

Liabilities:

Payable for investments purchased

1,195,794 151,730 8,353,912

Payable for fund shares redeemed

70,812 - 37,306

Payable for expense recoupment (Note 2)

- 34,715 -

Securities sold short, at fair value±

41,120,784 - -

Written options contracts, at fair value (premiums received $324,222)

271,270 - -

Dividends and interest expense payable

6,129 - -

Management and sub-advisory fees payable (Note 2)

141,049 4,717 123,883

Service fees payable (Note 2)

269 165 16,645

Transfer agent fees payable (Note 2)

47,073 1,243 17,440

Custody and fund accounting fees payable

21,276 12,939 49,578

Professional fees payable

82,709 96,078 213,461

Trustee fees payable (Note 2)

102 7 118

Payable for prospectus and shareholder reports

11,607 20,995 16,598

Unrealized depreciation from forward foreign currency contracts

- 211 663,726

Other liabilities

7,654 442 4,738

Total liabilities

42,976,528 323,242 9,497,405

Net assets

$ 130,733,407 $ 10,449,259 $ 235,147,240

Analysis of net assets:

Paid-in-capital

$ 121,162,899 $ 10,327,643 $ 241,031,121

Total distributable earnings (deficits)A

9,570,508 121,616 (5,883,881 )

Net assets

$ 130,733,407 $ 10,449,259 $ 235,147,240

See accompanying notes

43

American Beacon FundsSM

Statements of Assets and Liabilities

June 30, 2021

SSI Alternative
Income Fund
TwentyFour
Short Term Bond
Fund
TwentyFour
Strategic Income
Fund

Shares outstanding at no par value (unlimited shares authorized):

R5 Class

9,833 N/A 1,070,442

Y Class

11,597,288 35,331 16,720,376

Investor Class

126,944 N/A 2,185,787

A Class

N/A 20,298 644,735

C Class

N/A 14,103 811,327

R6 Class

N/A 971,501 N/A

Net assets: