Mutual Fund Summary Prospectus (497k)
March 05 2013 - 11:22AM
Edgar (US Regulatory)
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G
UIDANCE
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V
ISION
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E
XPERIENCE
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Ticker
Symbol:
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American Beacon
The London Company Income Equity Fund
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A Class:
C Class:
Y Class:
Institutional:
Investor:
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ABCAX
ABECX
ABCYX
ABCIX
ABCVX
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SUMMARY PROSPECTUS
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DECEMBER
31, 2012 (Supplemented March 5, 2013)
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Before you invest, you may want to review the Funds prospectus and statement of additional information, which
contain more information about the Fund and its risks. The current prospectus and statement of additional information dated December 31, 2012 and most recently supplemented March 5, 2013, are incorporated by reference into this summary prospectus.
You can find the Funds prospectus, statement of additional information and other information about the Fund online at www.americanbeaconfunds.com/resource_center/MutualFundForms.aspx. You can also get this information at no cost by calling
800-658-5811 or by sending an email request to americanbeaconfunds@ambeacon.com.
Investment Objective
The Funds investment objective is
current income, with a secondary objective of capital appreciation.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales discounts if you and your eligible family members invest, or agree to invest
in the future, at least $50,000 in the A Class shares of the American Beacon Funds. More information about these and other discounts is available from your financial professional and in Choosing Your Share Class on page 52 of the
Prospectus and Additional Purchase and Sale Information for A Class Shares on page 74 of the statement of additional information.
Shareholder Fees
(fees paid directly from your investment)
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Share classes
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A
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C
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Y
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Institutional
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Investor
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Maximum sales charge imposed on purchases (as a percentage of offering price)
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5.75
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%
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None
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None
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None
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None
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Maximum deferred sales charge load (as a percentage of the lower of original offering price or redemption proceeds)
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None
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1.00
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%
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None
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None
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None
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Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
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Share classes
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A
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C
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Y
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Institutional
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Investor
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Management fees
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0.45
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%
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0.45
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%
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0.45
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%
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0.45
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%
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0.45
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%
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Distribution and/or service (12b-1) fees
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0.25
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%
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1.00
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%
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0.00
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%
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0.00
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%
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0.00
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%
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Other expenses
1
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1.05
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%
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1.05
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%
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0.90
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%
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0.80
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%
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1.18
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%
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Total annual fund operating expenses
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1.75
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%
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2.50
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%
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1.35
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%
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1.25
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%
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1.63
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%
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Expense Reduction and Reimbursement
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0.46
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%
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0.46
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%
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0.46
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%
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0.46
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%
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0.46
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%
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Total annual fund operating expenses after expense reduction and reimbursement
2
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1.29
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%
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2.04
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%
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0.89
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%
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0.79
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%
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1.17
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%
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1
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Based on estimated expenses for the fiscal year ending August 31, 2013.
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2
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The Manager has contractually agreed to reduce fees and/or reimburse expenses for the A Class, C Class, Y Class, Institutional Class and Investor
Class of the Fund through December 31, 2013 to the extent that Total Annual Fund Operating Expenses exceed 1.29% for the A Class, 2.04% for the C Class, 0.89% for the Y Class, 0.79% for the Institutional Class and 1.17% for the Investor Class.
The contractual expense arrangement can be changed by approval of a majority of the Funds Board of Trustees. The Manager can be reimbursed by the Fund for any contractual or voluntary fee reductions or expense reimbursements if reimbursement
to the Manager (a) occurs within three years after the Managers own reduction or reimbursement and
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(b) does not cause the Total Annual Fund Operating Expenses of a class to exceed the percentage limit contractually agreed.
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Example
This Example is
intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of
those periods. The Example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
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Share class
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1 year
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3 years
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A
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$
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699
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$
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1,052
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C
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$
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307
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$
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735
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Y
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$
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91
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$
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382
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Institutional
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$
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81
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$
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352
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Investor
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$
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119
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$
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469
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Assuming no redemption of shares:
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Share class
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1 year
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3 years
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C
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$
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207
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$
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735
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Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs
and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. For the period May 29, 2012 through
August 31, 2012, the Funds turnover rate was 6% of the average value of the portfolio.
Principal Investment Strategies
Under normal circumstances, at least 80% of the Funds net assets (plus the amount of any borrowings for investment purposes) are invested in equity and equity-related investments. The
Funds investments in equity and equity-related investments include U.S. common stocks, preferred stocks, American Depositary Receipts (ADRs), U.S. dollar-denominated foreign stocks traded on U.S. exchanges, securities convertible
into or exchangeable for common stock, real estate investment trusts (REITs), and income trusts. The Fund may also invest up to 20% of its net assets in fixed income instruments, primarily including trust preferred securities and U.S.
Government securities. The Fund may invest in issuers of any market capitalization and will typically hold 30 to 40 issuers in the Fund.
The
Funds investment sub-advisor, The London Company of Virginia, LLC (The London Company), emphasizes investments in profitable, financially stable, core companies that focus on generating high dividend income, are run by
shareholder-oriented management, and trade at reasonable
Sum-TLC
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Summary Prospectus
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December 31, 2012
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1
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American Beacon The London Company Income Equity Fund
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valuations. The London Company also seeks companies with high return on capital, consistent free cash flow generation, predictability and stability. The London Company employs an investment
process with bottom up, fundamental analysis and follows a strict sell discipline.
On a short-term basis, the Fund may invest cash balances in
other investment companies including money market funds, and may purchase and sell futures contracts to gain market exposure on cash balances or reduce market exposure in anticipation of liquidity needs.
Principal Risks
There is no assurance that the Fund will
achieve its investment objective and you could lose part or all of your investment in the Fund. The Fund is not designed for investors who need an assured level of current income and is intended to be a long-term investment. The Fund is not a
complete investment program and may not be appropriate for all investors. Investors should carefully consider their own investment goals and risk tolerance before investing in the Fund. The principal risks of investing in the Fund are:
Credit Risk
For
preferred equities and fixed income investments, there is a risk that issuers and counterparties will not make payments on the securities they issue. A decline in an issuers credit rating can cause the price of its securities to go down. In
addition, the credit quality of securities may be lowered if an issuers financial condition changes. Lower credit quality may lead to greater volatility in the price of a security, which may affect liquidity and the Funds ability to
sell the security.
Dividend Risk
An issuer of stock held by the Fund may choose not to declare a dividend or the dividend rate might not remain at current levels. Dividend paying stocks might not experience the same level of earnings
growth or capital appreciation as non-dividend paying stocks.
Equity Investments Risk
Equity securities are subject to market risk. The Funds investments in equity securities may include U.S. common stocks, preferred stocks,
securities convertible into U.S. common stocks, real estate investment trusts (REITs), ADRs, U.S. dollar-denominated foreign stocks traded on U.S. exchanges and income trusts. Such investments may expose the Fund to additional risks.
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. In addition, 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 ADRs and U.S. dollar-denominated foreign stocks traded on U.S. exchange are subject to certain of the risks associated with investing directly in foreign securities. 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. Income trusts are subject to credit risk, interest rate risk and dividend risk.
Fixed Income Investments Risk
Fixed income investments are subject to market risk and credit risk. The Funds investments in fixed income securities may include trust preferred securities and U.S. Government securities. Holders
of the trust preferred securities have limited voting rights to control the activities of the trust and no voting rights with respect to the parent
company. U.S. Government securities are subject to interest rate risk.
Focused Holdings Risk
Because the Fund may have a focused portfolio of fewer companies, the increase or decrease of the value of a single investment may have a greater impact
on the Funds net asset value (NAV) and total return when compared to other diversified funds.
Foreign Exposure Risk
The Fund may invest in securities issued by foreign companies through ADRs and U.S. dollar-denominated foreign stocks trading 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.
Futures Contract Risk
Futures contracts are a type of derivative investment. A derivative refers to any financial instrument whose value is derived, at least in part, from the price of another security or a specified index,
asset or rate. The use of derivatives presents risks different from, and possibly greater than, the risks associated with investing directly in traditional securities. Gains or losses in a derivative may be magnified and may be much greater than the
derivatives original cost.
There may be an imperfect correlation between the changes in market value of the securities held by the Fund and
the prices of futures contracts. There may not be a liquid secondary market for the futures contract. When the Fund purchases or sells a futures contract, it is subject to daily variation margin calls that could be substantial in the event of
adverse price movements. If the Fund has insufficient cash to meet daily variation margin requirements, it might need to sell securities at a time when such sales are disadvantageous.
Interest Rate Risk
The Fund is subject to the risk that the market value
of the preferred equities and fixed income investments it holds will decline due to rising interest rates. When interest rates rise, the prices of most fixed-rate dividend preferred stocks and fixed income investments go down.
Investment Risk
An
investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for
them. Therefore, you may lose money by investing in the Fund.
Issuer Risk
The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, financial leverage and
reduced demand for the issuers goods or services, as well as the historical and prospective earnings of the issuer and the value of its assets.
Large Capitalization Companies Risk
The securities of large market
capitalization companies may underperform other segments of the market because such companies may be less responsive to competitive challenges and opportunities and may be unable to attain high growth rates during periods of economic expansion.
Market Events
Turbulence in financial markets and reduced liquidity in equity, credit and fixed-income markets may negatively affect many issuers worldwide which may
have an adverse effect on the Fund.
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Summary Prospectus
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December 31, 2012
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2
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American Beacon The London Company Income Equity Fund
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Market Risk
Market risks, including political, regulatory, market and economic developments, and developments that impact specific economic sectors, industries or segments of the market, can affect the value of the
Funds shares. The Funds equity investments are subject to stock market risk, which involves the possibility that the value of the Funds investments in stocks will decline due to drops in the stock market. The Funds
fixed-income investments are subject to the risk that the lack of liquidity or other adverse credit market conditions may hamper the Funds ability to purchase and sell the securities. From time to time, certain investments held by the Fund may
have limited marketability and may be difficult to sell at favorable times or prices. If the Fund is forced to sell such holdings to meet redemption requests or other cash needs, the Fund may have to sell them at a loss.
Other Investment Companies Risk
The Fund may invest in shares of other registered investment companies, including money market funds. To the extent that the Fund invests in shares of other registered investment companies, you will
indirectly bear fees and expenses charged by the underlying funds in addition to the Funds direct fees and expenses and will be subject to the risks associated with investments in those funds.
Securities Selection Risk
Securities selected by the Manager or the sub-advisor for the Fund may not perform to expectations. The portfolio managers judgments about the
attractiveness, value and potential appreciation 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
volatile than the market as a whole or our intrinsic value approach may fail to produce the intended results. The portfolio managers estimate of intrinsic value may be wrong or even if its estimate of intrinsic value is correct, it may take a
long period of time before the price and intrinsic value converge. This could result in the Funds underperformance compared to other funds with similar investment objectives.
Small and Medium Capitalization Companies Risk
Investments in the
securities of small and medium capitalization companies may be riskier than investments in larger, more established companies. The securities of these companies may trade less frequently and in smaller volumes than securities of larger companies. In
addition, small and medium capitalization companies may be more vulnerable to economic, market and industry changes. Because smaller companies may have limited product lines, markets or financial resources, or may depend on a few key employees, they
may be more susceptible to particular economic events or competitive factors than larger capitalization companies.
Fund Performance
Performance information for the Fund is not provided because the Fund has not been in operation for a full calendar year.
Management
The Manager
The Fund has retained American Beacon Advisors, Inc. to serve as its Manager.
Sub-Advisor
The Funds investment sub-advisor is The London Company
of Virginia, LLC.
Portfolio Managers
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American Beacon Advisors, Inc.
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Gene L. Needles, Jr.
President & Chief Executive Officer
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Since Fund Inception (2012)
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Wyatt L. Crumpler
Chief Investment Officer
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Since Fund Inception (2012)
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Cynthia M. Thatcher
Portfolio Manager
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Since 2013
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The London Company of Virginia, LLC
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Stephen M. Goddard
Chief Investment Officer & Lead Portfolio Manager
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Since Fund Inception (2012)
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Jonathan T. Moody
Principal & Portfolio Manager
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Since Fund Inception (2012)
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J. Brian Campbell
Portfolio Manager
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Since Fund Inception (2012)
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Mark E. DeVaul
Portfolio Manager
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Since Fund Inception (2012)
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Purchase and Sale of Fund Shares
You may
purchase, redeem or exchange shares of the Fund on any business day, which is any day the New York Stock Exchange is open for business. You may purchase, redeem or exchange Institutional Class, Investor Class, and Y Class shares directly from the
Fund by calling 1-800-658-5811, writing to the Fund at P.O. Box 219643, Kansas City, MO 64121, or visiting
www.americanbeaconfunds.com
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For overnight delivery, please mail your request to American Beacon Funds, c/o BFDS, 330 West 9
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Street, Kansas City, MO 64105. You also may purchase, redeem or exchange all classes of shares offered in this
prospectus through a broker-dealer or other financial intermediary. The minimum initial purchase into the Fund is $1,000 for C Class shares, $2,500 for A Class and Investor Class shares, $100,000 for Y Class shares, and $250,000 for
Institutional Class shares. The minimum subsequent investment by wire is $500 for A Class, C Class and Investor Class shares. No minimums apply to subsequent investments by wire for other classes of shares. For all classes, the minimum subsequent
investment is $50 if the investment is made by ACH, check or exchange.
Tax Information
Dividends and capital gain distributions, if any, which you receive from the Fund are subject to federal income tax and may also be subject to state and local taxes, unless your account is tax exempt or
tax deferred (in which case you may be taxed later, upon the withdrawal of your investment from such account).
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Summary Prospectus
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December 31, 2012
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3
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American Beacon The London Company Income Equity Fund
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Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and the Funds distributor or
the Manager may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your individual financial adviser to recommend the
Fund over another investment. Ask your individual financial adviser or visit your financial intermediarys website for more information.
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Summary Prospectus
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December 31, 2012
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4
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American Beacon The London Company Income Equity Fund
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