<PAGE> 1
[AMERICAN SELECT FUNDS LOGO]
PROSPECTUS
JANUARY 1, 2000
AMERICAN SELECT FUNDS(R)
- --------------------------------------------------------------------------------
Managed by AMR Investment Services, Inc.
[PICTURE}
- --------------------------------------------------------------------------------
AMERICAN SELECT CASH RESERVE FUND
The Securities and Exchange Commission does not guarantee that the information
in this Prospectus or any other mutual fund's prospectus is accurate or
complete, nor does it judge the investment merit of these Funds. To state
otherwise is a criminal offense.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
About the Fund
Overview.................................................... 2
Cash Reserve Fund........................................... 3
The Manager................................................. 7
Valuation of Shares......................................... 8
About Your Investment
Purchase and Redemption of Shares........................... 9
Distributions and Taxes..................................... 12
Additional Information
Distribution of Trust Shares................................ 13
Master-Feeder Structure..................................... 13
Year 2000................................................... 14
Additional Information................................ Back Cover
</TABLE>
ABOUT THE FUND
- --------------------------------------------------------------------------------
Overview
- ---------------
The American Select Cash Reserve Fund (the "Fund") is managed by AMR Investment
Services, Inc. (the "Manager"), a wholly owned subsidiary of AMR Corporation.
The Fund operates under a master-feeder structure. This means that the Fund
seeks its investment objective by investing all of its investable assets in the
Money Market Portfolio (the "Portfolio") of the AMR Investment Services Trust
(the "Trust"), which has an identical investment objective. Throughout this
Prospectus, statements regarding investments by the Fund refer to investments
made by the Portfolio. For easier reading, the term "Fund" is used throughout
the Prospectus to refer to either the Fund or the Portfolio, unless stated
otherwise. See "Master-Feeder Structure".
- --------------------------------------------------------------------------------
About the Fund 2 Prospectus
<PAGE> 3
AMERICAN SELECT
CASH RESERVE FUND(SM)
- --------------------------------------------------------------------------------
Investment Objective
- -------------------------------
Current income, liquidity and the maintenance of a stable price of $1.00 per
share.
Principal Strategies
- ------------------------------
The Fund invests exclusively in high quality variable or fixed rate, U.S. dollar
denominated short-term money market instruments. These securities may include
obligations of the U.S. Government, its agencies and instrumentalities;
corporate debt securities, such as commercial paper, master demand notes, loan
participation interests, medium-term notes and funding agreements; Yankeedollar
and Eurodollar bank certificates of deposit, time deposits, and bankers'
acceptances; asset-backed securities; and repurchase agreements involving the
foregoing obligations.
The Fund will only buy securities with the following credit qualities:
- - rated in the highest short-term categories by two rating organizations, such
as "A-1" by Standard & Poor's Corporation and "P-1" by Moody's Investors
Service, Inc., at the time of purchase,
- - rated in the highest short-term category by one rating organization if the
securities are rated only by one rating organization, or
- - unrated securities that are determined to be of equivalent quality by the
Manager pursuant to guidelines approved by the Board of Trustees.
The Fund invests more than 25% of its total assets in obligations issued by the
banking industry. However, for temporary defensive purposes when the Manager
believes that maintaining this concentration may be inconsistent with the best
interests of shareholders, the Fund may not maintain this concentration.
Securities purchased by the Fund generally have remaining maturities of 397 days
or less, although instruments subject to repurchase agreements and certain
variable and floating rate obligations may bear longer final maturities. The
average dollar-weighted maturity of the Fund will not exceed 90 days.
- --------------------------------------------------------------------------------
Prospectus 3 About the Fund
<PAGE> 4
AMERICAN SELECT
CASH RESERVE FUND(SM) -- (CONTINUED)
- --------------------------------------------------------------------------------
Risk Factors
- -------------------
- - The yield paid by the Fund is subject to changes in interest rates. As a
result, there is risk that a decline in short-term interest rates would lower
its yield and the overall return on your investment.
- - Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
- - As with any money market fund, there is the risk that the issuers or
guarantors of securities owned by the Fund will default on the payment of
principal or interest or the obligation to repurchase securities from the
Fund.
Your investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency.
Fees and Expenses
- ----------------------------
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.(1)
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
<TABLE>
<S> <C>
Management Fees............................................. 0.10%
Distribution (12b-1) Fees................................... 0.00
Other Expenses.............................................. 0.06(2)
----
TOTAL ANNUAL FUND OPERATING EXPENSES........................ 0.16%
====
Fee Waiver.................................................. 0.04(3)
Net Expenses................................................ 0.12%
</TABLE>
(1) The expense table and the Example below reflect the expenses of both the
Fund and its corresponding Portfolio.
(2) Other Expenses are based on estimates for the current fiscal year.
(3) The Manager has contractually agreed to waive a portion of Management Fees
through December 31, 2000 to the extent that Total Annual Fund Operating
Expenses exceed 0.12%.
- --------------------------------------------------------------------------------
About the Fund 4 Prospectus
<PAGE> 5
AMERICAN SELECT
CASH RESERVE FUND(SM) -- (CONTINUED)
- --------------------------------------------------------------------------------
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, that all dividends and distributions are
reinvested, and that the Fund's operating expenses remain the same. Net Expenses
were used to calculate the cost for year one, and Total Annual Fund Operating
Expenses were used to calculate costs for years two and three. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
1 YEAR ......................................................$12
3 YEARS......................................................$47
Investment Adviser
- -----------------------------
AMR Investment Services, Inc.
Performance of Similar AAdvantage Fund
- ------------------------------------------------------------------
Shares of the American Select Cash Reserve Fund were not offered prior to
January 1, 2000. The performance in the chart and table below is that of the
American AAdvantage Money Market Fund -- Institutional Class ("AAdvantage
Fund"), a substantially similar Fund managed by the Manager that began offering
its shares on September 1, 1987 and that invests in the Portfolio. Because the
AAdvantage Fund had moderately higher expenses, its performance was slightly
worse than the Fund would have realized during this period. The AAdvantage Fund
is not offered in this Prospectus. The bar chart below provides an indication of
risk by showing how the AAdvantage Fund's performance has varied from year to
year. The data shown below reflects the total return for the periods shown,
reduced by the actual expenses of the AAdvantage Fund. The Performance of the
AAdvantage Fund is not the performance of the Fund.
- --------------------------------------------------------------------------------
Prospectus 5 About the Fund
<PAGE> 6
AMERICAN SELECT
CASH RESERVE FUND(SM) -- (CONTINUED)
- --------------------------------------------------------------------------------
Past performance is not necessarily indicative of how the Fund will perform in
the future. Investors may call 1-800-231-4252 to obtain the Fund's current
seven-day yield.
PERFORMANCE GRAPH
<TABLE>
<S> <C>
89 9.47
90 8.40
91 6.77
92 4.02
93 3.28
94 4.22
95 6.04
96 5.50
97 5.64
98 5.56
</TABLE>
<TABLE>
<S> <C>
Highest Quarterly Return: 2.45%
(1/1/89 through 12/31/98) (2nd Quarter 1989)
Lowest Quarterly Return: 0.80%
(1/1/89 through 12/31/98) (2nd & 4th Quarter 1993)
(1st Quarter 1994)
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL
RETURN
---------------------------
AS OF 12/31/98
---------------------------
1 YEAR 5 YEARS 10 YEARS
------ ------- --------
<S> <C> <C> <C>
AAdvantage Fund............................................. 5.56% 5.39% 5.87%
</TABLE>
- --------------------------------------------------------------------------------
About the Fund 6 Prospectus
<PAGE> 7
The Manager
- ---------------------
The Trust has retained AMR Investment Services, Inc. to serve as its Manager.
The Manager, located at 4333 Amon Carter Boulevard, Fort Worth, Texas 76155, is
a wholly owned subsidiary of AMR Corporation, the parent company of American
Airlines, Inc. The Manager was organized in 1986 to provide investment
management, advisory, administrative and asset management consulting services.
As of September 30, 1999, the Manager had approximately $20.1 billion of assets
under management, including approximately $7.1 billion under active management
and $13.0 billion as named fiduciary or financial adviser. Of the total,
approximately $14.2 billion of assets are related to AMR Corporation.
The Manager provides or oversees all administrative, investment advisory and
portfolio management services to the Fund. The Manager develops the investment
program for the Fund and serves as the sole investment adviser to the Fund. As
compensation for providing management services, the Fund pays the Manager an
annualized advisory fee that is calculated and accrued daily, equal to 0.10% of
the net assets of the Fund.
The Manager also may receive up to 25% of the net annual interest income or up
to 25% of loan fees in regards to securities lending activities. However, the
Manager does not anticipate that the Fund will engage in securities lending at
this time. The Securities and Exchange Commission ("SEC") has granted exemptive
relief that permits the Fund to invest cash collateral received from securities
lending transactions in shares of one or more private investment companies
managed by the Manager. Pursuant to exemptive relief from the SEC, the Fund may
also invest cash collateral received from securities lending transactions in
shares of one or more registered investment companies managed by the Manager.
The Manager has discretion to purchase and sell securities for the Fund in
accordance with the Fund's objectives, policies, and restrictions. Pursuant to
an exemptive order issued by the SEC, the Manager is permitted to enter into new
or modified investment advisory agreements with existing or new investment
advisers without approval of the Fund's shareholders, but subject to approval of
the Trust's Board of Trustees ("Board"). The Prospectus will be supplemented if
additional investment advisers are retained or the contract with any existing
investment adviser is terminated.
- --------------------------------------------------------------------------------
Prospectus 7 About the Fund
<PAGE> 8
Valuation of Shares
- -------------------------------
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 of the
Fund's liabilities, and dividing the result by the total number of shares
outstanding. Securities held by the Fund are valued in accordance with the
amortized cost method, which is designed to enable the Fund to maintain a stable
NAV of $1.00 per share. In some cases, the price of debt securities is
determined using quotes obtained from brokers. Securities for which market
quotations are not readily available are valued at fair value, as determined in
good faith and pursuant to procedures approved by the Fund's Board of Trustees.
The Fund's NAV per share is determined as of the close of the New York Stock
Exchange ("Exchange"), generally 4:00 p.m. Eastern Time, on each day on which it
is open for business. The Fund is not open and no NAV is calculated on Columbus
Day and Veterans Day.
- --------------------------------------------------------------------------------
About the Fund 8 Prospectus
<PAGE> 9
ABOUT YOUR INVESTMENT
- --------------------------------------------------------------------------------
Purchase and Redemption of Shares
- ----------------------------------------------------------
Eligibility
- ---------------
Fund shares are offered without a sales charge to the tax-exempt retirement and
benefit plans of AMR Corporation and its affiliates and other institutional
investors who make an initial investment of at least $100 million, including:
- - agents or fiduciaries acting on behalf of their clients (such as employee
benefit plans, trusts and other accounts for which a trust company or
financial advisor acts as agent or fiduciary);
- - endowment funds and charitable foundations;
- - employee welfare plans which are tax-exempt under Section 501(c)(9) of the
Internal Revenue Code of 1986, as amended (Code);
- - qualified pension and profit sharing plans; and
- - corporations.
The Manager may allow a reasonable period of time after opening an account for
an investor to meet the initial investment requirement. In addition, for
investors such as trust companies and financial advisors who make investments
for a group of clients, the minimum initial investment can be met through an
aggregated purchase order for more than one client.
Purchase Policies
- --------------------------
No sales charges are assessed on the purchase or sale of Fund shares. Shares of
the Fund are offered and purchase orders accepted until 4:00 p.m. Eastern Time
(or the close of the Exchange, if earlier) on each day on which the Exchange is
open for trading. In addition, shares of the Fund are not offered and orders are
not accepted on Columbus Day and Veterans Day. If a purchase order is received
in good order prior to the Fund's deadline, the purchase price will be the NAV
per share next determined on that day. Wire transfers to purchase shares must be
drawn in U.S. dollars on a U.S. bank.
- --------------------------------------------------------------------------------
Prospectus 9 About Your Investment
<PAGE> 10
Opening an Account
- -------------------------------
A completed, signed application is required to open an account. You may request
an application form by calling (800) 231-4252.
Complete the application, sign it and:
Mail to:
American Select Funds
P.O. Box 619003, MD 5645
DFW Airport, TX 75261-9003
or Fax to:
(817) 967-0768 or (817) 931-4331
Redemption Policies
- ------------------------------
Shares of the Fund may be redeemed by telephone or mail on any day that the Fund
is open for business. For assistance with completing a redemption request,
please call (800) 231-4252. Proceeds from redemptions requested by 2:00 p.m.
Eastern Time generally will be wired to shareholders on the same day. In any
event, proceeds from a redemption order will be transmitted to a shareholder by
no later than seven days after the receipt of a redemption request in good
order. The redemption price will be the NAV next determined after a redemption
order is received in good order.
The Fund reserves the right to suspend redemptions or postpone the date of
payment (i) when the Exchange is closed (other than for customary weekend and
holiday closings); (ii) when trading on the Exchange is restricted; (iii) when
the SEC determines that an emergency exists so that disposal of the Fund's
investments or determination of its NAV is not reasonably practicable; or (iv)
by order of the SEC for protection of the Fund's shareholders.
Although the Fund intends to redeem shares in cash, the Fund reserves the right
to pay the redemption price in whole or in part by a distribution of readily
marketable securities held by the Portfolio. Unpaid dividends credited to an
account up to the date of redemption of all shares of the Fund generally will be
paid at the time of redemption.
- --------------------------------------------------------------------------------
About Your Investment 10 Prospectus
<PAGE> 11
HOW TO PURCHASE SHARES
<TABLE>
<CAPTION>
To Make an Initial Purchase To Add to an Existing Account
- ------------------------------------------------------------------------------------------
<S> <C>
By Wire
If your account has been established, you Call (800) 231-4252 to purchase shares by
may call (800) 231-4252 to purchase shares wire. Send a bank wire to State Street Bank
by wire. Send a bank wire to State Street & Trust Co. with these instructions:
Bank & Trust Co. with these instructions: - ABA# 0110-0002-8; AC-9905-342-3
- - ABA# 0110-0002-8; AC-9905-342-3 - Attn: American Select Cash Reserve Fund
- - Attn: American Select Cash Reserve Fund - shareholder's account number and
- - account number and registration. registration.
</TABLE>
HOW TO REDEEM SHARES
<TABLE>
<CAPTION>
Method Additional Instructions
- ------------------------------------------------------------------------------------------
<S> <C>
By Telephone
Call (800) 231-4252 to request a redemption. Proceeds from redemptions placed by
telephone will generally be transmitted by
wire only, as instructed on the application
form.
By Mail
Write a letter of instruction including - Other supporting documents may be required
- - the Fund name, Fund number for estates, trusts, guardianships,
- - the shareholder account number custodians, corporations, and welfare,
- - the number of shares or dollar amount to pension and profit sharing plans. Call
be redeemed (800) 231-4252 for instructions.
- - and the authorized signature(s) of all - Proceeds will only be mailed to the
persons required to sign for the account. account address of record or transmitted by
- - A signature guarantee is required. wire to a commercial bank account
designated on the account application form.
Mail the letter to:
American Select Funds
P.O. Box 219643
Kansas City, MO 64121-9643
</TABLE>
- --------------------------------------------------------------------------------
Prospectus 11 About Your Investment
<PAGE> 12
General Policies
- ------------------------
If a shareholder's account balance in the Fund falls below $2 million, the
shareholder may be asked to increase the balance. If the account balance remains
below $2 million after 45 days, the Fund reserves the right to close the account
and send the proceeds to the shareholder. The Fund also reserves the right to
reject any order for the purchase of shares and to limit or suspend, without
prior notice, the offering of shares.
The following policies apply to instructions you may provide to the Fund by
telephone:
- - The Fund, its officers, trustees, directors, employees, or agents are not
responsible for the authenticity of instructions provided by telephone, nor
for any loss, liability, cost or expense incurred for acting on them.
- - The Fund employs procedures reasonably designed to confirm that instructions
communicated by telephone are genuine.
- - Due to the volume of calls or other unusual circumstances, telephone
redemptions may be difficult to implement during certain time periods.
Distribution and Taxes
- -------------------------------------
The Fund intends to distribute most or all of its net earnings in the form of
monthly dividends from net investment income and distributions of realized net
capital gains. Usually, any dividends and distributions of realized net short-
term capital gains are taxable as ordinary income. Distributions by the Fund of
any realized net long-term capital gains are taxable to their shareholders as
long-term capital gains regardless of how long an investor has been a
shareholder. Unless the account application instructs otherwise, distributions
will be reinvested in additional Fund shares. Distributions are paid to
shareholders on the first business day after the month ends.
This is only a summary of some of the important income tax considerations that
may affect Fund shareholders. Shareholders should consult their tax adviser
regarding specific questions as to the effect of federal, state or local income
taxes on an investment in the Fund.
- --------------------------------------------------------------------------------
About Your Investment 12 Prospectus
<PAGE> 13
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Distribution of Trust Shares
- ----------------------------------------------
The Trust does not incur any direct distribution expenses related to the Fund.
However, the Trust has adopted a Distribution Plan in accordance with Rule 12b-1
under the Investment Company Act of 1940, which authorizes the use of any fees
received by the Manager in accordance with the Management and Administrative
Services Agreement to be used for the sale and distribution of Fund shares. In
the event the Trust begins to incur distribution expenses for the Fund,
distribution fees may be paid out of Fund assets, possibly causing the cost of
your investment to increase over time.
Master-Feeder Structure
- --------------------------------------
The Fund operates under a master-feeder structure. This means that the Fund is a
"feeder" fund that invests all of its investable assets in a "master" fund with
the same investment objective. The "master" fund purchases securities for
investment. The master-feeder structure works as follows:
Master-Feeder Structure graph
The Fund can withdraw its investment in the Portfolio at any time if the Board
determines that it is in the best interest of the Fund and its shareholders to
do so. If this happens, the Fund's assets will be invested according to the
investment policies and restrictions described in this Prospectus.
- --------------------------------------------------------------------------------
Prospectus 13 Additional Information
<PAGE> 14
Year 2000
- -----------------
The Fund could be affected adversely if the computer systems used by the
Manager, the Fund's other service providers, or companies in which the Fund
invests do not properly process and calculate information that relates to dates
beginning on January 1, 2000 and beyond. Due to the Fund's reliance on various
service providers to perform essential functions, the Fund could have difficulty
calculating its NAV, processing orders for share redemptions and delivering
account statements and other information to shareholders. The Manager has taken
steps that it believes are reasonably designed to address the potential failure
of computer systems used by the Manager and the Fund's service providers to
address the Year 2000 issue. There can be no assurance that the steps taken by
the Manager will be sufficient to avoid any adverse impact.
In evaluating current and potential portfolio positions, Year 2000 is one of the
factors that the Manager takes into consideration. The Manager will rely upon
public filings and other statements made by companies regarding their Year 2000
readiness. Issuers in countries outside of the U.S. may not be required to make
the level of disclosure regarding Year 2000 readiness that is required in the
U.S. If the value of the Fund's investment is adversely affected by a Year 2000
problem, the NAV of the Fund may be affected as well.
Financial Highlights
- ---------------------------------
Financial highlights are not available for the Fund, because as of the date of
this Prospectus, it had not commenced active operations.
- --------------------------------------------------------------------------------
Additional Information 14 Prospectus
<PAGE> 15
-- Notes --
<PAGE> 16
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Additional information about the fund is found in the documents listed below.
Request a free copy of these documents by calling (800) 231-4252.
- --------------------------------------------------------------------------------
ANNUAL REPORT/SEMI-ANNUAL REPORT
The Fund's Annual and Semi-Annual Reports list the Fund's actual investments as
of the report's date. They also include a discussion by the Manager of market
conditions and investment strategies that significantly affected the Fund's
performance. The fund's first semi-annual report will be available in August
2000, and the Annual report will be available in February 2001.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
The SAI contains more details about the Fund and its investment policies. The
SAI is incorporated in this Prospectus by reference (it is legally part of this
Prospectus). A current SAI is on file with the Securities and Exchange
Commission (SEC).
To obtain more information about the Fund:
[TELEPHONE PICTURE] BY TELEPHONE:
Call (800) 231-4252
[MAIL PICTURE] BY MAIL:
American Select Funds
P.O. Box 619003, MD5645
DFW Airport, TX 75261-9003
Copies of these documents may also be obtained from the SEC Public Reference
Room by mailing a request, including a duplicating fee to:
SEC's Public Reference Section, 450 5th Street NW, Washington, D.C. 20549-6009.
The Public Reference Room can be reached at (202) 942-8090.
--------------------------------------------------
AMERICAN SELECT FUNDS(R)
SEC File Number 811-9603
American Airlines is not responsible for investments made in the American Select
Funds. American Select Funds is a service mark of AMR Corporation. American
Select Cash Reserve Fund is a service mark of AMR Investment Services, Inc.
