<PAGE> 1
SEMI-ANNUAL
REPORT
APRIL 30, 1996
[AMERICAN AADVANTAGE FUNDS(R) LOGO]
BALANCED FUND
GROWTH AND INCOME FUND
INTERNATIONAL EQUITY FUND
LIMITED-TERM INCOME FUND
<PAGE> 2
Dear Fellow Shareholder:
We are pleased to report to you on the performance of the American
AAdvantage Funds and to provide you with a copy of the Semi-Annual Report for
the six months ended April 30, 1996.
Balanced Fund
The Balanced Fund's total return for the six months ending April 30, 1996
was 9.77% for the AMR Class, 9.62% for the Institutional Class and 9.45% for the
PlanAhead Class. These returns exceeded the Lipper Balanced Index total return
average of 7.78%.
The economy appeared sluggish going into 1996 due to the federal government
shutdown, snow storms in the Northeast and weak consumer spending. However,
after the Federal Reserve lowered interest rates by .25% in January, the market
began to show signs of strong growth. As a result, longer term interest rates
began to rise, lowering the value of the bonds held in the Balanced Fund.
Returns on the bond portion of the Fund were barely positive for the six month
period.
The Balanced Fund benefited from its mix of assets since approximately 60%
of the Fund was invested in stocks during the six month period. The equity
portion of the Fund performed well, posting returns of 16.81% during the period.
Investors continued to pour money into mutual funds, setting a new cash flow
record during the first quarter of 1996. As a result, stock prices continued to
advance. In addition, the Fund continued to follow its discipline of investing
in undervalued companies with above average growth and dividend yields. This led
the Fund to overweight the finance, consumer durables and energy sectors, which
outperformed the S&P 500, and to underweight consumer non-durable and utilities,
which were underperforming sectors.
Growth and Income Fund
The Growth and Income Fund also performed well for the six months ending
April 30, 1996. The Fund's total return was 15.53% for the AMR Class, 15.37% for
the Institutional Class and 15.19% for the PlanAhead Class. These returns all
exceed the Lipper Growth and Income Index total return average of 13.82%.
The Growth and Income Fund maintained an average equity weighting of
approximately 94% throughout the period. Since this Fund utilizes the same
investment managers and the same approach to stock selection as the Balanced
Fund, it also benefited from overweighted positions in financials, consumer
durables and energy and the underweightings in consumer non-durables and
utilities. The consistent application of the Fund's value style continues to
benefit its shareholders.
International Equity Fund
For the six months ended April 30, 1996, the International Equity Fund's
total return was 13.51% for the AMR Class, 13.30% for the Institutional Class
and 13.11% for the PlanAhead Class. These returns exceeded the Lipper
International Index total return average of 12.09%.
Superior stock selection over the past six months, particularly in Canada,
Finland and Sweden, contributed to most of the Fund's excess return. The Fund
continues to overweight these markets along with Australia, France, the
Netherlands, Norway, Spain and Switzerland. Stocks in these countries,
particularly continental Europe, appear attractive due to the combination of
lower interest rates and continued low inflation. The Fund continues to
significantly underweight Japan (relative to the Morgan Stanley Capital
International Europe, Australia and Far East ("EAFE") Index) due to perceived
<PAGE> 3
overvaluation of that market and limited long-term growth prospects. The Fund
has also continued to underweight the UK market due to political uncertainties.
Limited-Term Income Fund
The Limited-Term Income Fund's prior benchmark, the Lipper Short-Term (1-5
Year) Investment Grade Debt Average, was split as of January 1, 1996 into two
separate categories, the Short Investment Grade Debt Average, with 1 to 3 Year
Maturity/Durations, and the Short-Intermediate Investment Grade Debt Average,
with 1 to 5 Year Maturity/Durations.
The Limited-Term Income Fund's total return for the six months ending April
30, 1996 was 1.40% for the AMR Class, 1.17% for the Institutional Class and
1.04% for the PlanAhead Class. These returns can be compared to a benchmark
created by linking the Lipper Short-Term (1-5 Year) Investment Grade Debt
Average through 12/31/95 with the Lipper Short-Intermediate Investment Grade
Debt Average through 4/30/96. The six month total return through 4/30/96 of this
benchmark was 1.08%. In general, performance was affected by the rise in market
rates after mid February as unforeseen strength in the economy renewed
inflationary concerns and a steepening yield curve suggested that the Federal
Reserve may have to raise interest rates. The Fund has reduced its duration,
with intermediate treasuries and corporate bonds sold to raise cash. On April
30th, the Fund's weighted average maturity was 3.4 years with a weighted average
duration of 2.6 years.
As always, we appreciate your confidence and support and we will continue
to strive to provide you with above average long-term returns.
Sincerely,
/s/ WILLIAM F. QUINN
William F. Quinn
President
American AAdvantage Funds
2
<PAGE> 4
RESULTS OF SHAREHOLDER MEETING:
A special meeting of shareholders of the American AAdvantage Balanced Fund
("Balanced Fund"), American AAdvantage Growth and Income Fund ("Growth and
Income Fund"), and the American AAdvantage International Equity Fund
("International Fund") (the "Funds") was held on March 26, 1996. The following
matters were voted on at the meeting.
(1) The shareholders of the Funds authorized the American AAdvantage Funds,
to vote at a meeting of the Balanced, the Growth and Income and the
International Equity Portfolios ("Portfolios") of the AMR Investment
Services Trust ("AMR Trust") and approved the following:
(a) A new Investment Subadvisory Agreement between AMR Investment
Services, Inc. ("Manager") and Brandywine Asset Management, Inc. for
the Balanced and the Growth and Income Portfolios of the AMR Trust
(Balanced Fund and Growth and Income Fund only);
<TABLE>
<CAPTION>
VOTED FOR AGAINST ABSTAIN NON-VOTING
- ---------------------------------------------------- -------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Balanced Fund....................................... 43,326,021.019 0.000 846.503 18,699,472.177
Growth and Income Fund.............................. 50,190,698.193 0.000 468.350 5,112,039.929
</TABLE>
(b) A new Investment Subadvisory Agreement between the Manager and
Boatmen's Trust Company for the Balanced and the Growth and Income
Portfolios of the AMR Trust (Balanced Fund and Growth and Income
Fund only);
<TABLE>
<CAPTION>
VOTED FOR AGAINST ABSTAIN NON-VOTING
- ---------------------------------------------------- -------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Balanced Fund....................................... 43,326,021.019 0.000 846.503 18,699,472.177
Growth and Income Fund.............................. 50,190,698.193 0.000 468.350 5,112,039.929
</TABLE>
(c) A new Investment Subadvisory Agreement between the Manager and Rowe
Price-Fleming International, Inc. for the International Equity
Portfolio of the AMR Trust (International Fund only); and
<TABLE>
<CAPTION>
VOTED FOR AGAINST ABSTAIN NON-VOTING
- ---------------------------------------------------- -------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
International Fund.................................. 18,777,699.790 1,763.814 884.766 2,252,254.988
</TABLE>
(d) A proposal to permit the Manager to hire new subadvisers or modify
the subadvisory agreements of the Portfolios without interest holder
approval (Each Fund);
<TABLE>
<CAPTION>
VOTED FOR AGAINST ABSTAIN NON-VOTING
- ---------------------------------------------------- -------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Balanced Fund....................................... 43,109,561.874 216,459.145 846.503 18,699,472.177
Growth and Income Fund.............................. 50,186,037.002 3,207.339 1,922.202 5,112,039.929
International Fund.................................. 18,772,339.538 7,124.066 884.766 2,252,254.988
</TABLE>
(2) The shareholders of the Balanced Fund and the Growth and Income Fund
approved a new Investment Subadvisory Agreement between the Manager and
Brandywine Asset Management, Inc. (Balanced Fund and Growth and Income
Fund only).
<TABLE>
<CAPTION>
VOTED FOR AGAINST ABSTAIN NON-VOTING
- ---------------------------------------------------- -------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Balanced Fund....................................... 43,326,021.019 0.000 846.503 18,699,472.177
Growth and Income Fund.............................. 50,190,698.193 0.000 468.350 5,112,039.929
</TABLE>
3
<PAGE> 5
(3) The shareholders of the Balanced Fund and the Growth and Income Fund
approved a new Investment Subadvisory Agreement between the Manager and
Boatmen's Trust Company (Balanced Fund and Growth and Income Fund
only).
<TABLE>
<CAPTION>
VOTED FOR AGAINST ABSTAIN NON-VOTING
- ---------------------------------------------------- -------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Balanced Fund....................................... 43,326,021.019 0.000 846.503 18,699,472.177
Growth and Income Fund.............................. 50,190,698.193 0.000 468.350 5,112,039.929
</TABLE>
(4) The shareholders of the International Fund approved a new Investment
Subadvisory Agreement between the Manager and Rowe Price-Fleming
International, Inc. (International Fund only).
<TABLE>
<CAPTION>
VOTED FOR AGAINST ABSTAIN NON-VOTING
- ------------------------------------------------------ -------------- --------- ----------- --------------
<S> <C> <C> <C> <C>
International Fund.................................... 18,777,699.790 1,763.814 884.766 2,252,254.988
</TABLE>
(5) The shareholders of the Balanced Fund, Growth and Income Fund and the
International Fund approved a proposal to permit the Manager to hire
new subadvisers or modify the subadvisory agreements of the Funds
without shareholder approval (Each Fund).
<TABLE>
<CAPTION>
VOTED FOR AGAINST ABSTAIN NON-VOTING
- ------------------------------------------------------ -------------- --------- ----------- --------------
<S> <C> <C> <C> <C>
Balanced Fund......................................... 43,111,278.302 2,807.911 212,781.309 18,699,472.177
Growth and Income Fund................................ 50,186,028.002 4,670.191 468.350 5,112,039.929
International Fund.................................... 18,772,339.538 7,124.066 884.766 2,252,254.988
</TABLE>
4
<PAGE> 6
AMERICAN AADVANTAGE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Limited-Term
Growth and Equity Income
Balanced Fund Income Fund Fund Fund
------------- ----------- ----------- ------------
(in thousands, except share and
per share amounts)
<S> <C> <C> <C> <C>
ASSETS:
Investment in Portfolio, at value.................... $ 864,402 $ 992,985 $ 322,649 $ 184,327
----------- ---------- ----------- -----------
TOTAL ASSETS..................................... 864,402 992,985 322,649 184,327
----------- ---------- ----------- -----------
LIABILITIES:
Dividends payable.................................... - - - 956
Management fees payable (Note 2)..................... 231 74 31 96
Other liabilities.................................... 35 37 18 30
----------- ---------- ----------- -----------
TOTAL LIABILITIES................................ 266 111 49 1,082
----------- ---------- ----------- -----------
NET ASSETS:...................................... $ 864,136 $ 992,874 $ 322,600 $ 183,245
=========== ========== =========== ===========
ANALYSIS OF NET ASSETS:
Paid-in-capital...................................... 684,325 733,290 264,732 191,840
Accumulated undistributed income:
Net investment income.............................. 10,115 6,908 2,694 53
Net realized gain (loss) on investments............ 33,275 44,230 4,484 (5,088)
Unrealized appreciation (depreciation) of
investments...................................... 136,421 208,446 50,690 (3,560)
----------- ---------- ----------- -----------
NET ASSETS....................................... $ 864,136 $ 992,874 $ 322,600 $ 183,245
=========== ========== =========== ===========
Shares outstanding (no par value):
Institutional Class.................................. 19,315,380 4,803,528 2,781,842 11,937,264
=========== ========== =========== ===========
PlanAhead Class...................................... 678,878 660,969 204,377 249,860
=========== ========== =========== ===========
AMR Class............................................ 40,585,356 51,825,795 19,242,332 6,865,897
=========== ========== =========== ===========
Net asset value per share:
Institutional Class.................................. $ 14.25 $ 17.30 $ 14.50 $ 9.62
=========== ========== =========== ===========
PlanAhead Class...................................... $ 14.18 $ 17.17 $ 14.41 $ 9.62
=========== ========== =========== ===========
AMR Class............................................ $ 14.27 $ 17.34 $ 14.52 $ 9.62
=========== ========== =========== ===========
</TABLE>
See accompanying notes
5
<PAGE> 7
AMERICAN AADVANTAGE FUNDS
STATEMENTS OF OPERATIONS
Six Months Ended April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Limited-Term
Growth and Equity Income
Balanced Fund Income Fund Fund Fund
------------- ----------- ------------- ------------
(in thousands)
<S> <C> <C> <C> <C>
INVESTMENT INCOME ALLOCATED FROM PORTFOLIO:
Allocated interest income............................ $11,375 $ 1,533 $ 554 $ 6,444
Allocated dividend income (net of foreign taxes of
$412,474 in International Equity Fund)............. 7,859 12,649 3,326 -
Allocated income from securities lending, net........ 20 8 15 1
Allocated Portfolio expenses....................... (1,487) (1,497) (808) (279)
------ --------- ------- --------
TOTAL INVESTMENT INCOME.......................... 17,767 12,693 3,087 6,166
------ --------- ------- --------
FUND EXPENSES:
Administrative service fees (Note 2):
Institutional Class................................ 333 99 41 147
PlanAhead Class.................................... 9 10 3 2
Transfer agent fees:
Institutional Class................................ 6 8 6 10
PlanAhead Class.................................... 3 3 1 1
AMR Class.......................................... 2 - 1 -
Professional fees.................................... 12 12 5 5
Registration fees and expenses....................... 8 9 9 17
Service Fees -- PlanAhead Class...................... 9 10 3 2
Other................................................ 4 4 1 1
------ --------- ------- --------
TOTAL FUND EXPENSES.............................. 386 155 70 185
------ --------- ------- --------
NET INVESTMENT INCOME............................ 17,381 12,538 3,017 5,981
------ --------- ------- --------
REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO:
Net realized gain (loss) on investments and foreign
currency transactions.............................. 32,831 44,311 5,295 (86)
Net unrealized appreciation (depreciation) of
investments and foreign currency translations...... 27,871 69,379 27,658 (3,623)
------ --------- ------- --------
NET GAIN (LOSS) ON INVESTMENTS................... 60,702 113,690 32,953 (3,709)
------ --------- ------- --------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS..................................... $78,083 $ 126,228 $35,970 $ 2,272
======= ========= ======= ========
</TABLE>
See accompanying notes
6
<PAGE> 8
AMERICAN AADVANTAGE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Limited-Term
Balanced Fund Growth and Income Fund Equity Fund Income Fund
----------------------- ----------------------- ----------------------- -----------------------
Six Months Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended Ended Year Ended
April 30, October April 30, October April 30, October April 30, October
1996 31, 1995 1996 31, 1995 1996 31, 1995 1996 31, 1995
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(in thousands)
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment
income.............. $ 17,381 $ 31,522 $ 12,538 $ 20,377 $ 3,017 $ 5,970 $ 5,981 $ 10,359
Net realized gain
(loss) on
investments and
foreign currency
transactions
allocated from
Portfolio........... 32,831 25,895 44,311 28,115 5,295 4,311 (86) (1,552)
Net unrealized
appreciation
(depreciation) of
investments and
foreign currency
translations
allocated from
Portfolio........... 27,871 71,067 69,379 75,331 27,658 10,022 (3,623) 3,688
---------- ---------- --------- --------- --------- --------- --------- ---------
NET INCREASE IN NET
ASSETS RESULTING
FROM OPERATIONS..... 78,083 128,484 126,228 123,823 35,970 20,303 2,272 12,495
---------- ---------- --------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income:
Institutional
Class............. (10,135) (9,177) (1,936) (702) (607) (376) (3,795) (6,340)
Mileage Class....... - (5) - (14) - (14) - (33)
PlanAhead Class..... (238) (23) (143) (4) (31) (10) (59) (42)
AMR Class........... (22,970) (17,086) (20,011) (16,041) (5,125) (3,145) (2,127) (3,944)
Net realized gain on
investments:
Institutional
Class............. (7,867) (2,507) (2,653) (881) (546) (563) - -
Mileage Class....... - (1) - (18) - (20) - -
PlanAhead Class..... (187) (6) (202) (5) (31) (15) - -
AMR Class........... (16,814) (4,561) (25,694) (19,500) (4,170) (4,435) - -
---------- ---------- --------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........ (58,211) (33,366) (50,639) (37,165) (10,510) (8,578) (5,981) (10,359)
---------- ---------- --------- --------- --------- --------- --------- ---------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from sales of
shares.............. 90,746 170,104 116,793 188,748 48,267 89,320 29,423 137,613
Reinvestment of
dividends and
distributions....... 57,693 33,152 50,139 36,862 10,164 8,233 5,284 9,154
Cost of shares
redeemed............ (103,188) (116,305) (35,161) (55,588) (17,698) (42,092) (51,799) (110,995)
---------- ---------- --------- --------- --------- --------- --------- ---------
NET INCREASE
(DECREASE) IN NET
ASSETS FROM CAPITAL
SHARE
TRANSACTIONS........ 45,251 86,951 131,771 170,022 40,733 55,461 (17,092) 35,772
---------- ---------- --------- --------- --------- --------- --------- ---------
TOTAL INCREASE
(DECREASE) IN NET
ASSETS.............. 65,123 182,069 207,360 256,680 66,193 67,186 (20,801) 37,908
NET ASSETS:
Beginning of period... 799,013 616,944 785,514 528,834 256,407 189,221 204,046 166,138
---------- ---------- --------- --------- --------- --------- --------- ---------
END OF PERIOD*........ $ 864,136 $ 799,013 $ 992,874 $ 785,514 $ 322,600 $ 256,407 $ 183,245 $ 204,046
========== ========== ========= ========= ========= ========= ========= =========
*Includes
undistributed net
investment income
of.................. $ 10,115 $ 26,077 $ 6,908 $ 16,460 $ 2,694 $ 5,440 $ 53 $ 53
========== ========== ========= ========= ========= ========= ========= =========
</TABLE>
See accompanying notes
7
<PAGE> 9
AMERICAN AADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
American AAdvantage Funds (the "Trust") is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as a no-load, open-end, management investment company with seven
separate funds: the American AAdvantage Balanced Fund, the American AAdvantage
Growth and Income Fund, the American AAdvantage International Equity Fund, the
American AAdvantage Limited-Term Income Fund, the American AAdvantage Money
Market Fund, the American AAdvantage Municipal Money Market Fund and the
American AAdvantage U.S. Treasury Money Market Fund. These financial statements
and notes to the financial statements relate to the Balanced, Growth and Income,
International Equity and Limited-Term Income Funds (each a "Fund" and
collectively, the "Funds"). The Trust commenced sales of additional classes of
shares of the Funds, on August 1, 1994, designated as "Mileage Class",
"PlanAhead Class", and "AMR Class" shares. At the same time, the existing shares
of each Fund were redesignated as "Institutional Class" shares. The Mileage
Class of each Fund was terminated on November 1, 1995.
Each Fund invests all of its investable assets in the corresponding
portfolio of the AMR Investment Services Trust, an open-end diversified
management investment company, as follows:
<TABLE>
<CAPTION>
AMR INVESTMENT SERVICES
AMERICAN AADVANTAGE: --INVESTS ASSETS IN-- TRUST:
--------------------------- ---------------------------
<S> <C> <C>
Balanced Fund Balanced Portfolio
Growth and Income Fund Growth and Income Portfolio
International Equity
International Equity Fund Portfolio
Limited-Term Income
Limited-Term Income Fund Portfolio
</TABLE>
Each AMR Investment Services Portfolio has the same investment objectives
as its corresponding Fund. The value of such investment reflects each Fund's
proportionate interest in the net assets of the corresponding portfolio (99.76%,
99.51%, 99.26% and 99.34% at April 30, 1996 of the AMR Investment Services Trust
Balanced, Growth and Income, International Equity and Limited-Term Income
Portfolios) (each a "Portfolio" and collectively the "Portfolios",
respectively). The financial statements of the Portfolios are included elsewhere
in this report and should be read in conjunction with the Funds' financial
statements.
AMR Investment Services, Inc. (the "Manager") is a wholly-owned subsidiary
of AMR Corporation, the parent company of American Airlines, Inc. ("American"),
and was organized in 1986 to provide business management, advisory,
administrative and asset management consulting services to the Trust and other
investors.
The following is a summary of the significant accounting policies followed
by the Funds.
Valuation of Investments
Valuation of securities by the Portfolios is discussed in Note 1 of the
Portfolios' Notes to Financial Statements which are included elsewhere in this
report.
8
<PAGE> 10
AMERICAN AADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
(Unaudited) (Continued)
- --------------------------------------------------------------------------------
Investment Income and Dividends to Shareholders
Each Fund records its share of net investment income, and realized and
unrealized gain and loss in the Portfolio each day. All net investment income
and realized and unrealized gain and loss of each Portfolio are allocated pro
rata among the corresponding Fund and other investors in each Portfolio at the
time of such determination. Dividends from net investment income of the
Balanced, Growth and Income, and International Equity Funds normally will be
declared and paid annually. The Limited-Term Income Fund generally declares
dividends from net investment income daily, payable monthly. Distributions, if
any, of net realized capital gains normally will be paid annually after the
close of the fiscal year in which realized.
Dividends are determined in accordance with income tax principles which may
treat certain transactions differently than generally accepted accounting
principles.
Federal Income and Excise Taxes
It is the policy of each of the Funds to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all net investment income as well as any net realized
capital gains on the sale of investments. Therefore, no federal income or excise
tax provision is required.
Expenses
Expenses directly attributable to a Fund are charged to that Fund's
operations. Expenses directly attributable to a Class of shares are charged to
that Class. Expenses incurred by the Trust with respect to any two or more of
the Funds are allocated in proportion to the net assets of each Fund, except
where allocations of direct expenses to each Fund can otherwise be made fairly.
Each share of each Fund, regardless of class, bears equally those expenses that
are allocated to the Fund as a whole.
Valuation of Shares
The price per share is calculated separately for each class of each Fund on
each day on which shares are offered for sale and orders accepted or upon
receipt of a redemption request. With respect to a class of a Fund, price per
share is computed by dividing the value of the Class's pro rata allocation of
the Fund's investments and other assets, less liabilities, by the number of
Class shares outstanding.
2. TRANSACTIONS WITH AFFILIATES
Administrative Services Agreement
The Manager and the Trust entered into an Administrative Service Agreement
which obligates the Manager to provide or oversee administrative and management
services to the Funds. As compensation for performing the duties required under
the Administrative Services Agreement, the Manager receives an annualized fee of
.25% of the average daily net assets of the Institutional and PlanAhead Classes
of each of the Funds.
9
<PAGE> 11
AMERICAN AADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
(Unaudited) (Continued)
- --------------------------------------------------------------------------------
Distribution Plan
The Trust has adopted a "defensive" Distribution Plan in accordance with
Rule 12b-1 under the Investment Company Act of 1940, pursuant to which no fees
may be charged to the Funds for distribution purposes. However, the plan
authorizes the fees received by the Manager and the investment advisers hired by
the Manager to be used for distribution purposes. Under this plan, the Trust
does not intend to compensate the Manager or any other party, either directly or
indirectly, for the distribution of Trust shares.
Other
Certain officers or trustees of the Trust are also officers of the Manager
or American. The Trust makes no direct payments to its officers. Unaffiliated
trustees and their spouses are provided free unlimited air transportation on
American. However, the Trust compensates each Trustee with payments in an amount
equal to the Trustee's income tax on the value of this free airline travel. For
the period ended April 30, 1996, the cost of air transportation was not material
to any of the Funds. At April 30, 1996, AMR Corporation and subsidiary companies
and Employee Benefit Trusts thereof owned 100% of AMR Class shares of the Funds.
Trustees and officers of the trust as a group owned 1% of the Institutional
Class of the Growth and Income Fund and 2% of the PlanAhead Class of the
International Equity Fund at April 30, 1996.
3. CAPITAL SHARE TRANSACTIONS
The tables below summarize the activity in capital shares for each Class of
the Funds (in thousands):
<TABLE>
<CAPTION>
Institutional
Period ended April 30, 1996 Class Mileage Class PlanAhead Class AMR Class
- ------------------------------------------ ----------------- ---------------- ----------------- -----------------
Balanced Fund Shares Amount Shares Amount Shares Amount Shares Amount
- ------------------------------------------ ------ -------- ------ ------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold............................... 1,680 $ 23,889 -- $ -- 322 $ 4,487 4,417 $ 62,370
Reinvestment of dividends................. 1,286 17,671 -- -- 17 238 2,889 39,784
Shares redeemed........................... (1,568) (22,295) (74) (1,030) (53 ) (746) (5,540) (79,117)
------ -------- ---- ------- ----- -------- ------ --------
Net increase (decrease) in shares
outstanding............................. 1,398 $ 19,265 (74) $(1,030) 286 $ 3,979 1,766 $ 23,037
====== ======== ==== ======= ===== ======== ====== ========
Growth and Income Fund
- ------------------------------------------
Shares sold............................... 837 $ 14,017 -- $ -- 417 $ 6,848 5,750 $ 95,928
Reinvestment of dividends................. 266 4,293 -- -- 9 142 2,834 45,704
Shares redeemed........................... (800) (13,539) (139) (2,222) (70 ) (1,174) (1,082) (18,226)
------ -------- ---- ------- ----- -------- ------ --------
Net increase (decrease) in shares
outstanding............................. 303 $ 4,771 (139) $(2,222) 356 $ 5,816 7,502 $123,406
====== ======== ==== ======= ===== ======== ====== ========
</TABLE>
10
<PAGE> 12
AMERICAN AADVANTAGE FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
(Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Institutional
Class Mileage Class PlanAhead Class AMR Class
----------------- ---------------- ----------------- -----------------
Period ended April 30, 1996 Shares Amount Shares Amount Shares Amount Shares Amount
- ------------------------------------------ ------ -------- ------ ------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
International Equity Fund
- ------------------------------------------
Shares sold............................... 915 $ 12,587 -- $ -- 221 $ 3,026 2,363 $ 32,654
Reinvestment of dividends................. 63 839 -- -- 2 30 693 9,295
Shares redeemed........................... (134) (1,848) (95) (1,251) (129 ) (1,779) (936) (12,820)
------ -------- ---- ------- ----- -------- ------ --------
Net increase (decrease) in shares
outstanding............................. 844 $ 11,578 (95) $(1,251) 94 $ 1,277 2,120 $ 29,129
====== ======== ==== ======= ===== ======== ====== ========
Limited-Term Income Fund
- ------------------------------------------
Shares sold............................... 2,138 $ 21,072 -- $ -- 101 $ 990 751 $ 7,358
Reinvestment of dividends................. 314 3,101 -- 3 6 56 216 2,127
Shares redeemed........................... (4,498) (44,322) (60) (586) (17 ) (168) (682) (6,723)
------ -------- ---- ------- ----- -------- ------ --------
Net increase (decrease) in shares
outstanding............................. (2,046) $(20,149) (60) $ (583) 90 $ 878 285 $ 2,762
====== ======== ==== ======= ===== ======== ====== ========
Year ended October 31, 1995
- ------------------------------------------
Balanced Fund
- ------------------------------------------
Shares sold............................... 3,917 $ 50,397 88 $ 1,108 383 $ 5,102 8,920 $113,497
Reinvestment of dividends................. 999 11,470 1 6 3 29 1,886 21,647
Shares redeemed........................... (5,037) (64,582) (18) (239) (36 ) (487) (3,812) (50,997)
------ -------- ---- ------- ----- -------- ------ --------
Net increase (decrease) in shares
outstanding............................. (121) $ (2,715) 71 $ 875 350 $ 4,644 6,994 $ 84,147
====== ======== ==== ======= ===== ======== ====== ========
Growth and Income Fund
- ------------------------------------------
Shares sold............................... 3,606 $ 53,296 160 $ 2,274 1,175 $ 17,502 7,953 $115,676
Reinvestment of dividends................. 101 1,282 2 31 1 8 2,788 35,541
Shares redeemed........................... (810) (12,073) (33) (506) (875 ) (12,839) (2,052) (30,170)
------ -------- ---- ------- ----- -------- ------ --------
Net increase in shares outstanding........ 2,897 $ 42,505 129 $ 1,799 301 $ 4,671 8,689 $121,047
====== ======== ==== ======= ===== ======== ====== ========
International Equity Fund
- ------------------------------------------
Shares sold............................... 941 $ 11,924 135 $ 1,678 339 $ 4,275 5,802 $ 71,443
Reinvestment of dividends................. 51 599 3 33 2 21 644 7,580
Shares redeemed........................... (850) (10,686) (59) (759) (260 ) (3,288) (2,181) (27,359)
------ -------- ---- ------- ----- -------- ------ --------
Net increase in shares outstanding........ 142 $ 1,837 79 $ 952 81 $ 1,008 4,265 $ 51,664
====== ======== ==== ======= ===== ======== ====== ========
Limited-Term Income Fund
- ------------------------------------------
Shares sold............................... 11,246 $109,868 103 $ 999 155 $ 1,517 2,596 $ 25,229
Reinvestment of dividends................. 542 5,265 3 29 3 27 395 3,833
Shares redeemed........................... (9,396) (91,138) (62) (605) (39 ) (381) (1,934) (18,871)
------ -------- ---- ------- ----- -------- ------ --------
Net increase in shares outstanding........ 2,392 $ 23,995 44 $ 423 119 $ 1,163 1,057 $ 10,191
====== ======== ==== ======= ===== ======== ====== ========
</TABLE>
11
<PAGE> 13
AMERICAN AADVANTAGE BALANCED FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Institutional Class
-----------------------------------------------------------------------
Period Ended Year Ended October 31,
April 30, -------------------------------------------------------
1996(1)(2) 1995(1)(3) 1994(4) 1993 1992 1991
------------- ---------- -------- -------- -------- ---------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $ 13.95 $ 12.36 $ 13.23 $ 11.99 $ 11.60 $ 9.87
--------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income..................... 0.29 0.54 0.57 0.49 0.55 0.58
Net gains (losses) on securities (both
realized and unrealized)................ 1.02 1.71 (0.54) 1.57 0.41 1.79
--------- -------- -------- -------- -------- --------
Total from investment operations............ 1.31 2.25 0.03 2.06 0.96 2.37
--------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income...... (0.57) (0.52) (0.56) (0.52) (0.56) (0.64)
Distributions from net realized gains on
securities.............................. (0.44) (0.14) (0.34) (0.30) (0.01) --
--------- -------- -------- -------- -------- --------
Total distributions......................... (1.01) (0.66) (0.90) (0.82) (0.57) (0.64)
--------- -------- -------- -------- -------- --------
Net asset value, end of period.............. $ 14.25 $ 13.95 $ 12.36 $ 13.23 $ 11.99 $ 11.60
========= ======== ======== ======== ======== ========
Total return (annualized)(6)(7)(8).......... 17.59% 19.39% (0.08)% 19.19% 8.75% 25.35%
========= ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (in
thousands).............................. $ 275,315 $249,913 $222,873 $532,543 $370,087 $311,906
Ratios to average net assets
(annualized)(9)(10)(11):
Expenses................................ 0.61% 0.63% 0.36% 0.34% 0.35% 0.37%
Net investment income................... 3.91% 4.30% 4.77% 4.91% 5.31% 6.06%
Portfolio turnover rate(12)............... -- 73% 48% 83% 80% 55%
</TABLE>
- ---------------
(1) Class expenses per share were subtracted from net investment income per
share for the Fund before class expenses to determine net investment income
per share.
(2) Capital Guardian Trust Company was replaced by Brandywine Asset Management,
Inc. as an investment adviser to the Balanced Fund on April 1, 1996.
(3) GSB Investment Management, Inc. was added as an investment adviser to the
Balanced Fund as of January 1, 1995.
(4) Average shares outstanding for the period rather than end of period shares
were used to compute net investment income per share.
(5) The PlanAhead and AMR Classes commenced active operations on August 1,
1994.
(6) Total return is calculated assuming an initial investment is made at the
net asset value last calculated on the business day before the first day of
each period reported, reinvestment of all dividends and capital gains
distributions on the payable date, accrual for the maximum shareholder
services fee of .30% (for periods prior to August 1, 1994) and a sale at
net asset value on the last day of each period reported.
(7) Total returns for the PlanAhead and AMR Classes for the periods ended
October 31, 1994 reflect Institutional Class returns from November 1, 1993
through July 31, 1994 and returns of the applicable class for the period
August 1, 1994 (commencement of operations of the new classes) through
October 31, 1994. Due to the different expense structures between the
classes, total returns would vary from the results shown had the classes
been in operation for the entire year.
(8) Total returns for the PlanAhead Class for the periods ended October 31,
1994 and October 31, 1995 exclude fees waived by the Manager. The effect on
total returns was immaterial in each period.
(9) Effective August 1, 1994, expenses include administrative services fees
paid by the Fund to the Manager. Prior to that date, expenses exclude
shareholder services fees paid directly by shareholders to the Manager,
which amounted to approximately $.01 per share in each period on an
annualized basis.
(10) The method of determining average net assets was changed from a monthly
average to a daily average starting with the periods ended October 31,
1994.
(11) Operating results of the PlanAhead Class exclude fees waived by the
Manager. Had the PlanAhead Class paid such fees, the ratio of expenses and
net investment income to average net assets would have been .99% and 3.96%,
respectively, for the period ended October 31, 1994, and 1.09% and 3.60%,
respectively, for the year ended October 31, 1995.
(12) On November 1,1995, the American AAdvantage Balanced Fund invested all of
its investable assets in the AMR Investment Services Balanced Portfolio.
The portfolio turnover rate for the period ended April 30, 1996 is included
elsewhere in this report.
12
<PAGE> 14
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PlanAhead Class AMR Class
------------------------------------------- -------------------------------------------
Period Ended Year Ended Period Ended Period Ended Year Ended Period Ended
April 30, October 31, October 31, April 30, October 31, October 31,
1996(1)(2) 1995(1)(3) 1994(4)(5) 1996(1)(2) 1995 (1)(3) 1994(4)(5)
------------ ------------- ------------- ------------ ------------ -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
$13.90 $12.35 $ 12.35 $ 13.98 $ 12.36 $ 12.35
------ ------ ------- --------- --------- ---------
0.27 0.54 0.12 0.30 0.58 0.14
1.01 1.67 (0.12) 1.03 1.71 (0.13)
------ ------ ------- --------- --------- ---------
1.28 2.21 0.00 1.33 2.29 0.01
------ ------ ------- --------- --------- ---------
(0.56) (0.52) -- (0.60) (0.53) --
(0.44) (0.14) -- (0.44) (0.14) --
------- ------ ------- --------- --------- ---------
(1.00) (0.66) -- (1.04) (0.67) --
------ ------ ------- --------- --------- ---------
$14.18 $13.90 $ 12.35 $ 14.27 $ 13.98 $ 12.36
====== ====== ======= ========= ========= =========
17.32% 19.06% (0.16)% 17.85% 19.77% (0.08)%
====== ====== ======= ========= ========= =========
$9,626 $5,450 $ 528 $ 579,195 $ 597,743 $ 393,504
0.93% 0.99% 0.92% 0.36% 0.38% 0.36%
3.54% 3.70% 4.04% 4.17% 4.54% 4.65%
-- 73% 48% -- 73% 48%
</TABLE>
13
<PAGE> 15
AMERICAN AADVANTAGE GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Institutional Class
------------------------------------------------------------------------------
Period Ended Year Ended October 31,
April 30, -----------------------------------------------------------
1996(1)(2) 1995(1) 1994(3) 1993 1992(4) 1991
------------- -------- -------- -------- --------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period.............................. $ 15.91 $ 14.19 $ 14.63 $ 12.79 $ 12.10 $ 9.47
------- ------- ------- -------- -------- --------
Income from investment operations:
Net investment income............... 0.21 0.41 0.43 0.36 0.39 0.42
Net gains on securities (both
realized and unrealized).......... 2.16 2.28 0.08 2.21 0.77 2.70
------- ------- ------- -------- -------- --------
Total from investment operations...... 2.37 2.69 0.51 2.57 1.16 3.12
------- ------- ------- -------- -------- --------
Less distributions:
Dividends from net investment
income............................ (0.41) (0.43) (0.41) (0.37) (0.39) (0.49)
Distributions from net realized
gains on securities............... (0.57) (0.54) (0.54) (0.36) (0.08) -
------- ------- ------- -------- -------- --------
Total distributions................... (0.98) (0.97) (0.95) (0.73) (0.47) (0.49)
------- ------- ------- -------- -------- --------
Net asset value, end of period........ $ 17.30 $ 15.91 $ 14.19 $ 14.63 $ 12.79 $ 12.10
======= ======= ======= ======== ======== ========
Total return (annualized)(6)(7)(8).... 26.72% 20.69% 3.36% 21.49% 10.00% 33.83%
======= ======= ======= ======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(in thousands).................... $83,100 $71,608 $22,737 $477,088 $339,739 $264,628
Ratios to average net assets
(annualized)(9)(10)(11):
Expenses.......................... 0.61% 0.62% 0.33% 0.34% 0.36% 0.37%
Net investment income............. 2.56% 2.84% 3.28% 3.12% 3.57% 4.19%
Portfolio turnover rate(12)......... -- 26% 23% 30% 35% 52%
</TABLE>
- ---------------
(1) Class expenses per share were subtracted from net investment income per
share for the Fund before class expenses to determine net investment income
per share.
(2) Capital Guardian Trust Company was replaced by Brandywine Asset Management,
Inc. as an investment adviser to the Growth and Income Fund on April 1,
1996.
(3) Average shares outstanding for the period rather than end of period shares
were used to compute net investment income per share.
(4) The assets of the Growth and Income Fund previously managed by Atlanta
Capital Management were transferred to GSB Investment Management, Inc. as
of the close of business on December 5, 1991.
(5) The PlanAhead and AMR Classes commenced active operations on August 1,
1994.
(6) Total return is calculated assuming an initial investment is made at the
net asset value last calculated on the business day before the first day of
each period reported, reinvestment of all dividends and capital gains
distributions on the payable date, accrual for the maximum shareholder
services fee of .30% (for periods prior to August 1, 1994) and a sale at
net asset value on the last day of each period reported.
(7) Total returns for the PlanAhead and AMR Classes for the periods ended
October 31, 1994 reflect Institutional Class returns from November 1, 1993
through July 31, 1994 and returns of the applicable class for the period
August 1, 1994 (commencement of operations of the new classes) through
October 31, 1994. Due to the different expense structures between the
classes, total returns would vary from the results shown had the classes
been in operation for the entire year.
(8) Total returns for PlanAhead Class exclude fees waived by the Manager. The
effect on total returns was immaterial for the PlanAhead Class for the
period ended October 31, 1994 and for the year ended October 31, 1995.
(9) Effective August 1, 1994, expenses include administrative services fees
paid by the fund to the Manager. Prior to that date, expenses exclude
shareholder services fees paid directly by shareholders to the Manager,
which amounted to less than $.01 per share in each period on an annualized
basis.
(10) The method of determining average net assets was changed from a monthly
average to a daily average starting with the periods ended October 31,
1994.
(11) Operating results of the PlanAhead Class exclude fees waived by the
Manager. Had the PlanAhead Class paid such fees, the ratio of expenses and
net investment income to average net assets would have been 1.05% and
1.40%, respectively, for the period ended October 31, 1994, and 1.08% and
2.14%, respectively, for the year ended October 31, 1995.
(12) On November 1, 1995, the American AAdvantage Growth and Income Fund
invested all of its investable assets in the AMR Investment Services Growth
and Income Portfolio. The portfolio turnover rate for the period ended
April 30, 1996 is included elsewhere in this report.
14
<PAGE> 16
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PlanAhead Class AMR Class
- --------------------------------------------- ---------------------------------------------
Period Ended Year Ended Period Ended Period Ended Year Ended Period Ended
April 30, October 31, October 31, April 30, October 31, October 31,
1996(1)(2) 1995(1) 1994(3)(5) 1996(1)(2) 1995(1) 1994(3)(5)
- ------------- ----------- ------------ ------------- ------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
$ 15.81 $ 14.17 $ 13.99 $ 15.95 $ 14.20 $ 13.99
------- ------- -------- --------- --------- ---------
0.19 0.40 0.05 0.23 0.44 0.11
2.14 2.22 0.13 2.17 2.30 0.10
------- ------- -------- --------- --------- ---------
2.33 2.62 0.18 2.40 2.74 0.21
------- ------- ------- --------- --------- ---------
(0.40) (0.44) - (0.44) (0.45) -
(0.57) (0.54) - (0.57) (0.57) -
------- ------- -------- --------- --------- ---------
(0.97) (0.98) - (1.01) (0.99) -
------- ------- ------- --------- --------- ---------
$ 17.17 $ 15.81 $ 14.17 $ 17.34 $ 15.95 $ 14.20
======= ======= ======= ========= ========= =========
26.45% 20.14% 3.21% 26.96% 21.03% 3.43%
======= ======= ======= ========= ========= =========
$11,351 $ 4,821 $ 56 $ 898,423 $ 706,884 $ 505,892
0.90% 0.99% 0.95% 0.34% 0.38% 0.37%
2.18% 2.23% 1.50% 2.82% 3.20% 3.18%
-- 26% 23% -- 26% 23%
</TABLE>
15
<PAGE> 17
AMERICAN AADVANTAGE INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Institutional Class
-----------------------------------------------------------------------
Period Ended Year Ended October 31,
April 30, --------------------------------------------------------
1996(1) 1995(1) 1994(2)(3) 1993(4) 1992 1991(5)
------------ --------- ---------- -------- ------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 13.29 $ 12.87 $ 12.07 $ 8.93 $ 10.13 $ 10.00
------- ------- -------- ------- ------- -------
Income from investment operations:
Net investment income...................... 0.13 0.27 0.32 0.17 0.12 -
Net gains (losses) on securities (both
realized and unrealized)................. 1.59 0.68 1.10 3.09 (1.31) 0.13
------- ------- -------- ------- ------- -------
Total from investment operations............. 1.72 0.95 1.42 3.26 (1.19) 0.13
------- ------- -------- ------- ------- -------
Less distributions:
Dividends from net investment income....... (0.27) (0.21) (0.17) (0.12) (0.01) -
Distributions from net realized gains on
securities............................... (0.24) (0.32) (0.45) - - -
------- ------- -------- ------- ------- -------
Total distributions.......................... (0.51) (0.53) (0.62) (0.12) (0.01) -
------- ------- -------- ------- ------- -------
Net asset value, end of period............... $ 14.50 $ 13.29 $ 12.87 $ 12.07 $ 8.93 $ 10.13
======= ======= ======== ======= ======= =======
Total return (annualized)(7)(8).............. 23.53% 7.90% 11.77% 36.56% (12.07)% 5.69%
======= ======= ======== ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (in thousands)... $40,323 $25,757 $ 23,115 $66,652 $38,837 $10,536
Ratios to average net assets
(annualized)(9)(10):
Expenses................................. 0.87% 0.85% 0.61% 0.78% 1.17% 1.90%(11)
Net investment income.................... 1.92% 2.37% 2.74% 2.00% 2.04% 0.38%(11)
Portfolio turnover rate(12)................ - 21% 37% 61% 21% 2%
</TABLE>
- ---------------
(1) Class expenses per share were subtracted from net investment income per
share for the Fund before class expenses to determine net investment income
per share.
(2) Morgan Stanley Asset Management Inc. was added as an investment adviser to
the International Equity Fund as of August 1, 1994.
(3) Average shares outstanding for the period rather than end of period shares
were used to compute net investment income per share.
(4) HD International Limited was replaced by Hotchkis and Wiley as an
investment adviser to the International Equity Fund as of the close of
business on May 21, 1993.
(5) The Institutional Class of the International Equity Fund commenced active
operations on August 7, 1991.
(6) The PlanAhead and AMR Classes commenced active operations on August 1,
1994.
(7) Total return is calculated assuming an initial investment is made at the
net asset value last calculated on the business day before the first day of
each period reported, reinvestment of all dividends and capital gains
distributions on the payable date, accrual for the maximum shareholder
services fee of .30% (for periods prior to August 1, 1994) and a sale at
net asset value on the last day of each period reported.
(8) Total returns for the PlanAhead and AMR Classes for the periods ended
October 31, 1994 reflect Institutional Class returns from November 1, 1993
through July 31, 1994 and returns of the applicable class for the period
August 1, 1994 (commencement of operations of the new classes) through
October 31, 1994. Due to the different expense structures between the
classes, total returns would vary from the results shown had the classes
been in operation for the entire year.
(9) Effective August 1, 1994, expenses include administrative services fees
paid by the Fund to the Manager. Prior to that date, expenses exclude
shareholder services fees paid directly by shareholders to the Manager.
Such fees amounted to less than $.04 per share in each period on an
annualized basis and were waived by the Manager for the period ended
October 31, 1991.
(10) The method of determining average net assets was changed from a monthly
average to a daily average starting with the periods ended October 31,
1994.
(11) Estimated based on expected annual expenses and actual average net assets.
(12) On November 1,1995, the American AAdvantage International Equity Fund
invested all of its investable assets in the AMR Investment Services
International Equity Portfolio. The portfolio turnover rate for the period
ended April 30, 1996 is included elsewhere in this report.
16
<PAGE> 18
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PlanAhead Class AMR Class
- -------------------------------------------- ----------------------------------------------
Period Ended Year Ended Period Ended Period Ended Year Ended Period Ended
April 30, October 31, October 31, April 30, October 31, October 31,
1996(1) 1995(1) 1994(2)(3)(6) 1996(1) 1995(1) 1994(2)(3)(6)
- ------------ ------------ ------------- ---------- ------------ -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
$13.20 $ 12.85 $ 12.61 $ 13.31 $ 12.87 $ 12.61
------ ------- ------- -------- --------- ---------
0.11 0.24 0.06 0.14 0.30 0.05
1.58 0.64 0.18 1.61 0.68 0.21
------ ------- ------- -------- --------- ---------
1.69 0.88 0.24 1.75 0.98 0.26
------ ------- ------- -------- --------- ---------
(0.24) (0.21) - (0.30) (0.22) -
(0.24) (0.32) - (0.24) (0.32) -
------ ------- ------- -------- --------- ---------
(0.48) (0.53) - (0.54) (0.54) -
------ ------- ------- -------- --------- ---------
$14.41 $ 13.20 $ 12.85 $ 14.52 $ 13.31 $ 12.87
====== ======= ======= ======== ========= =========
23.23% 7.37% 11.60% 23.86% 8.18% 11.77%
====== ======= ======= ======== ========= =========
$2,945 $ 1,456 $ 375 $279,332 $ 227,939 $ 165,524
1.15% 1.33% 1.25% 0.58% 0.60% 0.63%
1.73% 2.08% 1.86% 2.15% 2.65% 1.41%
- 21% 37% - 21% 37%
</TABLE>
17
<PAGE> 19
AMERICAN AADVANTAGE LIMITED-TERM INCOME FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Institutional Class
-----------------------------------------------------------
Period
Ended Year Ended October 31,
April 30, --------------------------------------------
1996 1995 1994(1) 1993 1992
----------- -------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................. $ 9.82 $ 9.67 $ 10.23 $ 10.13 $ 10.07
--------- -------- -------- -------- --------
Income from investment operations:
Net investment income............................... 0.32 0.62 0.52 0.58 0.75
Net gains (losses) on securities (both realized and
unrealized)....................................... (0.20) 0.15 (0.46) 0.15 0.06
--------- -------- -------- -------- --------
Total from investment operations...................... 0.12 0.77 0.06 0.73 0.81
--------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income................ (0.32) (0.62) (0.52) (0.58) (0.75)
Distributions from net realized gains on
securities........................................ -- -- (0.10) (0.05) --
-------- -------- -------- -------- --------
Total distributions................................... (0.32) (0.62) (0.62) (0.63) (0.75)
-------- -------- -------- -------- --------
Net asset value, end of period........................ $ 9.62 $ 9.82 $ 9.67 $ 10.23 $ 10.13
========= ======== ======== ======== ========
Total return (annualized)(4)(5)(6).................... 2.31% 8.18% 0.42% 7.20% 7.94%
========= ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (in thousands)............ $ 114,824 $137,293 $112,141 $238,874 $209,928
Ratios to average net assets (annualized)(7)(8)(9):
Expenses.......................................... 0.60% 0.60% 0.31% 0.26% 0.27%
Net investment income............................. 6.49% 6.36% 5.26% 5.76% 7.40%
Portfolio turnover rate(10)......................... -- 183% 94% 176% 133%
</TABLE>
- ---------------
(1) Average shares outstanding for the period rather than end of period shares
were used to compute net investment income per share.
(2) AMR Investment Services, Inc. began portfolio management of the
Limited-Term Income Fund on March 1, 1991 replacing Brown Brothers,
Harriman & Co. and Barrow, Hanley, Mewhinney & Strauss, Inc.
(3) The PlanAhead and AMR Classes commenced active operations on August 1,
1994.
(4) Total return is calculated assuming an initial investment is made at the
net asset value last calculated on the business day before the first day of
each period reported, reinvestment of all dividends and capital gains
distributions on the payable date, accrual for the maximum shareholder
services fee of .30% (for periods prior to August 1, 1994) and a sale at
net asset value on the last day of each period reported.
(5) Total returns for the PlanAhead and AMR Classes for the periods ended
October 31, 1994 reflect Institutional Class returns from November 1, 1993
through July 31, 1994 and returns of the applicable class for the period
August 1, 1994 (commencement of operations of the new classes) through
October 31, 1994. Due to the different expense structures between the
classes, total returns would vary from the results shown had the classes
been in operation for the entire year.
(6) Total returns for the PlanAhead Class exclude fees waived by the Manager.
Had the Fund paid such fees, total return for the class would have been
.41% for the period ended October 31, 1994, and 7.56% for the year ended
October 31, 1995.
(7) Effective August 1, 1994, expenses include administrative services fees
paid by the Fund to the Manager. Prior to that date, expenses exclude
shareholder services fees paid directly by shareholders to the Manager.
Such fees amounted to less than $.03 per share in each period on an
annualized basis.
(8) The method of determining average net assets was changed from a monthly
average to a daily average starting with the periods ended October 31,
1994.
(9) Operating results of the PlanAhead Class exclude fees waived by the
Manager. Had the PlanAhead Class paid such fees, the ratio of expenses and
net investment income to average net assets would have been 1.00% and
4.89%, respectively, for the period ended October 31, 1994, and 1.06% and
5.93%, respectively, for the year ended October 31, 1995.
(10) On November 1, 1995, the American AAdvantage Limited-Term Income Fund
invested all of its investable assets in the AMR Investment Services
Limited-Term Income Portfolio. The portfolio turnover rate for the period
ended April 30, 1996 is included elsewhere in this report.
18
<PAGE> 20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Institutional
Class PlanAhead Class AMR Class
----------- ----------------------------------------- ---------------------------------------
Year Period Period Period Period
Ended Ended Year Ended Ended Ended Year Ended Ended
October 31, April 30, October 31, October 31, April 30, October 31, October 31,
1991(2) 1996 1995 1994(1)(3) 1996 1995 1994(1)(3)
----------- ----------- ----------- ----------- --------- ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
$ 9.76 $ 9.82 $ 9.68 $ 9.78 $ 9.81 $ 9.68 $ 9.78
--------- ------- ------- ------- ------- ------- -------
0.83 0.31 0.59 0.13 0.33 0.64 0.14
0.31 (0.20) 0.14 (0.10) (0.19) 0.13 (0.10)
--------- ------- ------- ------- ------- ------- -------
1.14 0.11 0.73 0.03 0.14 0.77 0.04
--------- ------- ------- ------- ------- ------- -------
(0.83) (0.31) (0.59) (0.13) (0.33) (0.64) (0.14)
-- -- -- -- -- -- --
--------- ------- ------- ------- ------- ------- -------
(0.83) (0.31) (0.59) (0.13) (0.33) (0.64) (0.14)
--------- ------- ------- ------- ------- ------- -------
$ 10.07 $ 9.62 $ 9.82 $ 9.68 $ 9.62 $ 9.81 $ 9.68
========= ======= ======= ======= ======= ======= =======
11.87% 2.06% 7.83% 0.45% 2.77% 8.22% 0.59%
========= ======= ======= ======= ======= ======= =======
$ 141,629 $ 2,404 $ 1,576 $ 403 $66,017 $64,595 $53,445
0.35% 0.85% 0.83% 0.79% 0.33% 0.36% 0.33%
8.42% 6.16% 6.16% 5.10% 6.74% 6.60% 5.77%
165% -- 183% 94% -- 183% 94%
</TABLE>
19
<PAGE> 21
AMR INVESTMENT SERVICES TRUST BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
U.S. GOVERNMENT & AGENCY
OBLIGATIONS - 20.64%
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - .24%
MTN, 6.36%, Due 8/16/2000....... $ 2,090 $ 2,073
--------
TOTAL FEDERAL NATIONAL
MORTGAGE ASSOCIATION...... 2,073
--------
U.S. TREASURY BILL - .51%
4.98%, Due 8/8/1996............. 4,500 4,438
--------
TOTAL U.S. TREASURY BILL.... 4,438
--------
U.S. TREASURY BONDS - 5.47%
11.625%, Due 11/15/2004......... 8,370 11,022
13.875%, Due 5/15/2011.......... 1,230 1,852
10.375%, Due 11/15/2012......... 1,500 1,905
8.75%, Due 5/15/2017............ 4,905 5,794
8.125%, Due 8/15/2019........... 8,550 9,539
8.75%, Due 8/15/2020............ 4,300 5,114
8.125%, Due 8/15/2021........... 2,675 2,994
7.25%, Due 8/15/2022............ 9,000 9,180
--------
TOTAL U.S. TREASURY BONDS... 47,400
--------
U.S. TREASURY COUPON STRIPS - .96%
Due 11/15/2008.................. 796 334
Due 5/15/2011................... 4,000 1,383
Due 5/15/2018................... 4,000 800
Due 11/15/2018.................. 13,000 2,555
Due 8/15/2019................... 11,500 2,141
Due 11/15/2019.................. 6,000 1,097
--------
TOTAL U.S. TREASURY COUPON
STRIPS.................... 8,310
--------
U.S. TREASURY NOTES - 13.46%
5.50%, Due 7/31/1997............ 2,500 2,491
7.375%, Due 11/15/1997.......... 1,000 1,021
7.25%, Due 2/15/1998............ 400 4,080
6.125%, Due 5/15/1998........... 5,330 5,335
5.125%, Due 6/30/1998........... 1,000 981
5.875%, Due 3/31/1999........... 2,750 2,725
7.00%, Due 4/15/1999............ 1,800 1,837
6.75%, Due 6/30/1999............ 5,000 5,069
6.375%, Due 7/15/1999........... 3,000 3,008
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
6.875%, Due 8/31/1999........... $ 3,800 $ 3,864
7.125%, Due 9/30/1999........... 4,680 4,796
7.75%, Due 1/31/2000............ 2,000 2,092
5.50%, Due 4/15/2000............ 3,000 2,913
6.125%, Due 7/31/2000........... 2,000 1,981
6.25%, Due 8/31/2000............ 1,500 1,492
6.125%, Due 9/30/2000........... 5,770 5,712
5.625%, Due 11/30/2000.......... 3,000 2,907
8.50%, Due 11/15/2000........... 5,500 5,949
6.375%, Due 3/31/2001........... 2,000 1,997
7.50%, Due 11/15/2001........... 3,000 3,141
7.50%, Due 5/15/2002............ 1,000 1,049
6.375%, Due 8/15/2002........... 8,250 8,183
6.25%, Due 2/15/2003............ 5,690 5,589
5.75%, Due 8/15/2003............ 3,000 2,852
5.875%, Due 2/15/2004........... 2,000 1,908
7.25%, Due 5/15/2004............ 1,500 1,553
7.25%, Due 8/15/2004............ 1,800 1,864
7.875%, Due 11/15/2004.......... 1,500 1,614
7.50%, Due 2/15/2005............ 4,615 4,857
6.50%, Due 5/15/2005............ 6,000 5,919
6.50%, Due 8/15/2005............ 2,000 1,974
5.875%, Due 11/15/2005.......... 3,000 2,831
5.625%, Due 2/15/2006........... 3,000 2,781
8.875%, Due 2/15/2019........... 5,020 6,024
7.875%, Due 2/15/2021........... 1,000 1,090
6.25%, Due 8/15/2023............ 3,450 3,114
--------
TOTAL U.S. TREASURY NOTES... 116,593
--------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS........ 178,814
--------
U.S. AGENCY MORTGAGE-BACKED
OBLIGATIONS - 4.91%
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 1.54%
Series 1194, 6.50%,
Due 10/15/2006................ 1,500 1,446
Series 1349, 6.50%,
Due 5/15/2014................. 400 396
Series 1250, 7.00%,
Due 4/15/2019................. 1,000 1,002
Pool C00436, 7.50%, Due
12/1/2025..................... 5,076 5,022
</TABLE>
See accompanying notes
20
<PAGE> 22
AMR INVESTMENT SERVICES TRUST BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
Pool C80372, 7.00%, Due
1/1/2026...................... $ 5,630 $ 5,431
--------
TOTAL FEDERAL HOME LOAN
MORTGAGE CORPORATION
OBLIGATIONS............... 13,297
--------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - 1.86%
TBA, 6.50%, Due 3/28/2008....... 4,050 3,924
ARM, Pool 66185, 6.366%,
Due 7/1/2018.................. 1,754 1,754
Series 1992-143, 6.75%,
Due 10/25/2018................ 500 498
Series 1989-21, 10.45%,
Due 4/25/2019................. 246 265
TBA, 7.00%, Due 1/1/2023........ 770 743
ARM, Pool 218949, 7.50%,
Due 2/1/2023.................. 1,238 1,258
ARM, Pool 266196, 7.345%,
Due 1/1/2024.................. 1,707 1,719
TBA, 7.50%, Due 9/23/2024....... 1,670 1,647
Pool 306505, 8.00%,
Due 3/1/2025.................. 1,551 1,566
ARM, Pool 308798, 7.277%,
Due 4/1/2025.................. 394 404
Pool 250414, 7.00%,
Due 12/1/2025................. 2,471 2,381
--------
TOTAL FEDERAL NATIONAL
MORTGAGE ASSOCIATION
OBLIGATIONS............... 16,159
--------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 1.51%
Pool 102932, 10.50%,
Due 9/15/1998................. 14 15
Pool 180220, 9.00%,
Due 10/15/2016................ 1,007 1,058
TBA, 8.00%, Due 2/1/2020........ 2,860 2,898
Pool 349306, 8.00%,
Due 2/1/2023.................. 2,799 2,834
Pool 336950, 7.50%,
Due 4/15/2023................. 835 825
Pool 355479, 8.00%,
Due 5/15/2023................. 1,617 1,637
Pool 1849, 8.50%,
Due 8/20/2024................. 636 651
TBA, 7.50%, Due 6/1/2025........ 2,290 2,264
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
TBA, 7.00%, Due 3/28/2026....... $ 940 $ 905
--------
TOTAL GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION
OBLIGATIONS............... 13,087
--------
TOTAL U.S. AGENCY
MORTGAGE-BACKED
SECURITIES................ 42,543
--------
NON-AGENCY MORTGAGE-BACKED
OBLIGATIONS - 1.24%
Citicorp Mortgage Securities,
Incorporated, 9.50%,
Due 8/1/2002.................. 695 710
Citicorp Mortgage Securities,
Incorporated, 9.50%,
Due 8/25/2005................. 14 14
Citicorp Mortgage Securities,
Incorporated, 8.50%,
Due 4/25/2017................. 695 699
Citicorp Mortgage Securities,
Incorporated, 9.00%,
Due 4/1/2018.................. 785 805
Citicorp Mortgage Securities,
Incorporated, 9.50%,
Due 3/25/2005................. 1,107 1,105
DLJ Mortgage Acceptance
Corporation, 4.56029%,
Due 3/25/2024................. 638 614
General Electric Capital
Mortgage Services,
Incorporated, 1992-4 A A4,
8.00%, Due 4/25/2022.......... 677 684
Green Tree Financial
Corporation, 1993-3 A5, 5.75%,
Due 10/15/2018................ 990 946
Green Tree Financial
Corporation, 1994-5 A2, 7.30%,
Due 11/15/2019................ 690 701
Green Tree Financial
Corporation, 1995-8 A4, 6.60%,
Due 12/15/2002................ 1,400 1,350
INMC 1995-W A2, 7.25%,
Due 2/25/2026................. 1,500 1,388
Residential Funding Corporation,
1993-S28 A4, 6.35%,
Due 8/25/2023................. 300 291
The Money Store, 7.66%,
Due 8/15/2026................. 1,500 1,436
--------
TOTAL NON-AGENCY
MORTGAGE-BACKED
OBLIGATIONS............... 10,743
--------
</TABLE>
See accompanying notes
21
<PAGE> 23
AMR INVESTMENT SERVICES TRUST BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
ASSET-BACKED SECURITIES - 2.61%
American Express Master Trust
1992-1 A, 6.05%,
Due 6/15/1998................. $ 2,250 $ 2,252
AT&T Universal Card Master
Trust, 5.95%, Due
10/17/2002.................... 990 965
Banc One Auto Trust, 1995-A A5,
7.05%, Due 8/15/1998.......... 390 395
Chemical Master Credit Card
Trust, 5.55% Due 9/15/2003.... 810 774
Chemical Master Credit
Card Trust, 6.23%,
Due 10/15/2005................ 990 960
Citibank Credit Card Master
Trust I, 0% Coupon,
Due 2/7/2001.................. 1,410 1,025
ContiMortgage Home Equity Loan
Trust, 7.96%, Due 9/15/2009... 2,500 2,551
Discover Card Master Trust I,
6.05%, Due 2/15/2006.......... 1,010 930
First Chicago Master II, 1992-E
A, 6.25%, Due 8/15/1999....... 750 751
General Electric Railcar Trust,
7.75%, Due 6/1/2004........... 629 648
NationsBank Credit Card Master
Trust, 6.00%, Due 12/15/2005.. 1,060 1,001
Olympic Automobile Receivables
Trust, 1993-C A, 4.50%,
Due 2/15/2000................. 256 253
PaineWebber Mortgage Acceptance
Corporation, 7.00%, Due
10/25/2023.................... 757 715
Premier Auto Trust, 6.00%,
Due 10/6/1999................. 2,000 1,983
Premier Auto Trust, 6.00%,
Due 5/2/2000.................. 960 959
Prime Credit Card Master Trust,
1992-1 A1, 7.05%,
Due 2/15/2001................. 1,010 1,025
Signet Credit Card Master Trust,
1994-4 A, 6.80%,
Due 12/15/2000................ 1,800 1,819
Sears Credit Account Master
Trust, 6.05%, Due 1/15/2008... 720 688
Standard Credit Card Master
Trust, 5.90%, Due 2/7/2001.... 1,000 986
UCFC Home Equity, 1994-C1 A2,
7.275%, Due 6/10/2007......... 502 507
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
Western Financial Grantor Trust,
1993-2 A2, 4.70%,
Due 10/1/1998................. $ 812 $ 804
Western Financial Grantor
Trust,1994-3 A2, 6.65%,
Due 12/1/1999................. 643 647
--------
TOTAL ASSET-BACKED
SECURITIES................ 22,638
--------
CORPORATE BONDS - 9.26%
FINANCIAL - 4.13%
American General Financial,
7.25%, Due 5/15/2005.......... 410 408
Associates Corporation of North
America 7.50%,
Due 5/15/1999................. 80 82
BankAmerica Corporation, 7.50%,
Due 3/15/1997................. 960 972
BankAmerica Corporation, 9.75%,
Due 7/1/2000.................. 600 661
BanPonce, 7.30%, Due 6/5/2002... 640 643
Chase Manhattan, Corporation,
7.625%, Due 1/15/2003......... 200 205
Chase Manhattan, Corporation,
8.625%, Due 5/1/2002.......... 700 754
Chemical Banking Corporation,
FRN, 6.2125%, Due 6/15/2000... 2,300 2,307
Chemical New York Corporation,
9.75%, Due 6/15/1999.......... 900 977
Countrywide Funding Corporation,
6.05%, Due 3/1/2001........... 1,200 1,152
Fleet Mortgage Group,
Incorporated, 6.125%,
Due 8/15/1997................. 930 929
Ford Motor Credit Company,
9.25%, Due 6/15/1998.......... 1,000 1,055
Ford Motor Credit Company,
7.95%, Due 5/17/1999.......... 2,700 2,795
Ford Motor Credit Company,
8.20%, Due 2/15/2002.......... 1,510 1,590
General Motors Acceptance
Corporation, 7.375%,
Due 4/25/2000................. 2,000 2,034
General Motors Acceptance
Corporation, 6.75%,
Due 6/17/2002................. 1,140 1,120
Health & Rehab, FRN, 6.9875%,
Due 7/13/1999................. 1,000 997
</TABLE>
See accompanying notes
22
<PAGE> 24
AMR INVESTMENT SERVICES TRUST BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
International Business Machines,
Incorporated, 7.00%,
Due 10/30/2025................ $ 1,290 $ 1,184
Lehman Brothers Holding,
Incorporated, 6.625%,
Due 2/15/2000................. 570 559
Lehman Brothers Holding,
Incorporated, 7.41%,
Due 5/25/1999................. 500 507
Lehman Brothers, Incorporated,
5.04%,
Due 12/15/2003................ 1,000 996
National Bank of Detroit,
7.125%, Due 5/15/2007......... 700 686
NationsBank Corporation, 7.625%,
Due 4/27/2005................. 1,000 1,018
PNC Funding Corporation, 6.125%,
Due 9/1/2003.................. 1,000 937
Salomon Incorporated, 7.05%,
Due 1/15/1998................. 800 803
Salomon Incorporated, 7.00%,
Due 1/20/1998................. 390 391
Salomon Incorporated, 5.53%,
Due 1/30/1998................. 1,500 1,468
Salomon Incorporated, 6.04%,
Due 7/9/1998.................. 625 613
Salomon Incorporated, 6.70%,
Due 12/1/1998................. 390 387
Salomon Incorporated, 5.395%,
Due 4/5/1999.................. 500 493
Society National Bank, 7.25%,
Due 6/1/2005.................. 800 795
St. Paul Companies, 9.375%,
Due 6/15/1997................. 600 621
Taubman Realty Group, 8.00%, Due
6/15/1999..................... 2,000 2,017
Taubman Realty, 5.75%,
Due 11/3/1997................. 1,500 1,496
Travelers/Aetna P & C, 6.75%,
Due 4/15/2001................. 1,300 1,298
Westpac Banking Corporation,
7.875%, Due 10/15/2002........ 800 833
--------
TOTAL FINANCIAL............. 35,783
--------
INDUSTRIAL - 2.58%
Atlantic Richfield Corporation,
8.50%, Due 4/1/2012........... 870 941
Atlantic Richfield Corporation,
8.75%, Due 3/1/2032........... 610 681
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
The Boeing Company, 8.625%, Due
11/15/2031.................... $ 620 $ 695
BP America Incorporated, 9.875%,
Due 3/15/2004................. 650 758
Columbia/HCA Health, 7.69%, Due
6/15/2025..................... 730 713
Dresser Industries, 6.25%,
Due 6/1/2000.................. 800 785
E.I. Du Pont De Nemours &
Company, 8.45%,
Due 10/15/1996................ 200 202
Heinz (H.J.) Company, 5.50%, Due
9/15/1997..................... 520 516
International Business Machines,
Incorporated, 6.375%,
Due 11/1/1997................. 750 753
Legrand, 8.50%, Due 2/15/2025... 820 880
News America Holdings, 9.25%,
Due 2/1/2013.................. 370 404
News America Holdings, 9.25%,
Due 2/1/2013.................. 340 370
Occidential Petroleum
Corporation, 8.50%, Due
9/15/2004..................... 2,000 2,098
Pepsico Incorporated, 7.00%,
Due 11/15/1996................ 550 553
Philip Morris Companies,
Incorporated, 8.875%,
Due 7/1/1996.................. 520 522
Philip Morris Companies,
Incorporated, 9.25%,
Due 12/1/1997................. 1,500 1,563
Philip Morris Companies,
Incorporated, 8.25%,
Due 10/15/2003................ 640 672
Philip Morris Companies,
Incorporated, 8.375%,
Due 1/15/2017................. 625 655
Pohang Iron & Steel, 7.375%,
Due 5/15/2005................. 750 738
RJR Nabisco, 8.75%,
Due 8/15/2005................. 2,750 2,723
Sears Roebuck Acceptance, 6.41%,
Due 3/28/2001................. 1,275 1,251
Sears Roebuck, 9.375%,
Due 11/1/2011................. 635 741
Telecommunications,
Incorporated, 9.80%, Due
2/1/2012...................... 320 341
Texaco Cap MTN, 6.19%,
Due 7/9/2003.................. 750 709
</TABLE>
See accompanying notes
23
<PAGE> 25
AMR INVESTMENT SERVICES TRUST BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
The May Department Store
Company, 9.75%,
Due 2/15/2021................. $ 400 $ 477
WMX Technologies, 6.22%,
Due 4/30/2004................. 590 610
Xerox Corporation, 7.15%,
Due 8/1/2004.................. 1,000 1,001
--------
TOTAL INDUSTRIAL............ 22,352
--------
UTILITY - 0.62%
Baltimore Gas & Electric, FRN,
5.775%, Due 4/15/1999......... 2,500 2,499
General Telephone Southwest,
Incorporated, 8.50%,
Due 11/15/2031................ 600 637
Pacific Bell Telephone, 8.70%,
Due 6/15/2001................. 670 723
Southern California Edison
Company, 8.25%,
Due 2/1/2000.................. 1,425 1,486
--------
TOTAL UTILITY............... 5,345
--------
FOREIGN BONDS - 1.93%
ABN-AMRO, 7.27%,
Due 5/31/2005................. 690 688
ANZ Banking, 6.25%,
Due 2/1/2004.................. 770 722
Hanson Overseas, 7.375%,
Due 1/15/2003................. 380 382
Hanson Overseas, 7.375%,
Due 1/15/2003................. 220 221
Hydro-Quebec, 7.375%,
Due 2/1/2003.................. 400 406
Hydro-Quebec, 9.40%,
Due 2/1/2021.................. 1,800 2,078
Hydro-Quebec, 8.875%,
Due 3/1/2026.................. 1,200 1,320
Korea Development Bank, 5.875%,
Due 12/1/1998................. 100 98
Korea Development Bank, 6.25%,
Due 5/1/2000.................. 770 751
Province of Newfoundland,
9.875%, Due 6/1/2020.......... 250 302
Province of Quebec, 8.80%,
Due 4/15/2003................. 335 366
Province of Quebec, 5.735%,
Due 3/2/2026.................. 890 850
Republic of Italy, 6.875%,
Due 9/27/2023................. 1,850 1,619
<CAPTION>
Par
Amount Value
-------- --------
(dollars in thousands)
<S> <C> <C>
Svenska Handelsbanken, 8.35%,
Due 7/15/2004................. $ 740 $ 786
SwedBank FRN, Due 10/29/2049.... 2,500 2,564
Swedish Export Credit, 9.875%,
Due 3/15/2038................. 2,410 2,621
Swiss Bank Corporation, 7.50%,
Due 7/15/2025................. 950 918
--------
TOTAL FOREIGN BONDS......... 16,692
--------
TOTAL CORPORATE BONDS....... 80,172
--------
Shares
--------
PREFERRED STOCK - 0.01%
RJR Nabisco, Convertible PERC... 14,800 89
Teledyne, Incorporated Class
E............................. 600 9
--------
TOTAL PREFERRED STOCK....... 98
--------
COMMON STOCK - 59.85%
FOREIGN STOCKS - 1.30%
Arthur Guinness & Sons, ADR..... 24,700 887
British Petroleum PLC, ADR...... 9,000 983
British Telecom PLC, ADR........ 11,300 622
Ciba-Geigy AG................... 30,000 1,737
Elf Aquitane SA................. 21,100 794
Hanson PLC, ADR................. 125,900 1,904
Royal Dutch Petroleum Company,
New York Registry............. 30,000 4,298
--------
TOTAL FOREIGN STOCKS........ 11,225
--------
CONSUMER STAPLES - 10.82%
DEPARTMENT AND MAIL ORDER - 2.00%
Dayton-Hudson Corporation....... 13,600 1,299
J.C. Penney Company,
Incorporated.................. 87,075 4,310
K Mart Corporation.............. 251,100 2,542
Sears Roebuck & Company......... 45,000 2,244
The May Department Store
Company....................... 108,800 5,549
Woolworth Corporation........... 70,000 1,339
--------
TOTAL DEPARTMENT AND MAIL
ORDER..................... 17,283
--------
DISTILLERS AND BREWERS - 0.71%
Anheuser-Busch Companies,
Incorporated.................. 76,300 5,122
</TABLE>
See accompanying notes
24
<PAGE> 26
AMR INVESTMENT SERVICES TRUST BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
Brown-Foreman, Incorporated..... 26,700 $ 1,055
--------
TOTAL DISTILLERS AND
BREWERS................... 6,177
--------
DRUGS AND HOSPITAL SUPPLY - 3.23%
American Home Products
Corporation................... 62,800 6,625
Baxter International,
Incorporated.................. 171,400 7,584
Bristol-Myers Squibb Company.... 61,200 5,034
Horizon/CMS Healthcare
Corporation................... 70,675 936
Merck & Company, Incorporated... 45,000 2,723
Pharmacia & Upjohn,
Incorporated.................. 28,300 1,082
Warner Lambert, Incorporated.... 36,200 4,045
--------
TOTAL DRUGS AND HOSPITAL
SUPPLY.................... 28,029
--------
FOOD PROCESSING - 0.20%
Archer Daniels Midland Company.. 90,000 1,699
--------
TOTAL FOOD
PROCESSING................ 1,699
--------
FOODS - 0.09%
Nabisco Holdings Corporation,
Class A....................... 26,500 812
--------
TOTAL FOODS................. 812
--------
LEISURE - 0.41%
Hasbro, Incorporated............ 35,200 1,294
King World Productions,
Incorporated (non-income
producing).................... 25,700 1,118
Toys R Us, Incorporated......... 41,500 1,157
--------
TOTAL LEISURE............... 3,569
--------
PHOTOGRAPHY - 1.23%
Eastman Kodak Company........... 138,900 10,626
--------
TOTAL PHOTOGRAPHY........... 10,626
--------
PUBLISHING - 0.15%
A.H. Belo, Incorporated, Class
A............................. 35,800 1,334
--------
TOTAL PUBLISHING............ 1,334
--------
RETAIL - OTHER - 0.17%
Melville Corporation............ 37,000 1,438
--------
TOTAL RETAIL - OTHER........ 1,438
--------
TOBACCO - 2.63%
American Brands, Incorporated... 86,400 3,596
Philip Morris Companies,
Incorporated.................. 164,389 14,816
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
RJR Nabisco Holdings............ 147,340 $ 4,402
--------
TOTAL TOBACCO............... 22,814
--------
TOTAL CONSUMER STAPLES...... 93,781
--------
INTEREST SENSITIVE - 21.71%
BANKS - 7.26%
Bank America Corporation........ 168,200 12,741
Bank of Boston Corporation...... 37,000 1,790
Bankers Trust Company New York.. 19,400 1,346
Chase Manhatten Corporation..... 259,996 17,907
First Chicago NBD............... 127,681 5,267
First of America Bank
Corporation................... 50,000 2,263
First Security Corporation...... 60,000 1,515
First Union Corporation......... 20,000 1,230
Fleet Financial Group,
Incorporated.................. 40,000 1,720
J.P. Morgan & Company,
Incorporated.................. 33,000 2,776
NationsBank Corporation......... 52,700 4,203
Norwest Corporation............. 214,800 7,760
US Bancorp...................... 35,100 1,136
Wells Fargo and Company......... 5,000 1,213
--------
TOTAL BANKS................. 62,867
--------
BUILDING AND MATERIALS - 0.41%
PPG Industries, Incorporated.... 69,500 3,518
--------
TOTAL BUILDING AND
MATERIALS................. 3,518
--------
FINANCE - 0.62%
Beneficial Corporation.......... 40,000 2,210
Household International,
Incorporated.................. 35,000 2,419
Paine Webber Group,
Incorporated.................. 33,900 708
--------
TOTAL FINANCE............... 5,337
--------
INSURANCE - LIFE AND MULTI-
LINE - 2.79%
Aetna Life & Casualty Company... 75,600 5,387
American General Corporation.... 130,000 4,566
Aon, Incorporated............... 124,300 6,666
Lincoln National Corporation.... 45,000 2,171
Old Republic International
Corporation................... 52,300 1,726
Travelers Corporation........... 59,669 3,670
--------
TOTAL INSURANCE - LIFE AND
MULTI-LINE................ 24,186
--------
</TABLE>
See accompanying notes
25
<PAGE> 27
AMR INVESTMENT SERVICES TRUST BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
INSURANCE - PROPERTY AND
CASUALTY - 2.17%
Allstate Corporation............ 282,257 $ 10,973
St. Paul Companies.............. 135,600 7,204
TIG Holdings, Incorporated...... 21,000 638
--------
TOTAL INSURANCE - PROPERTY
AND CASUALTY.............. 18,815
--------
SAVINGS AND LOAN - 0.92%
Great Western Financial
Corporation................... 260,400 5,989
H.F. Ahmanson & Company......... 85,000 2,019
--------
TOTAL SAVINGS AND LOAN...... 8,008
--------
UTILITIES - ELECTRIC - 2.90%
Central and Southwest
Corporation................... 48,500 1,322
CMS Energy Corporation.......... 60,000 1,748
DTE Energy Company.............. 75,700 2,347
Edison International............ 80,000 1,280
Entergy Corporation............. 261,700 6,935
Illinova Corporation............ 60,000 1,530
Potomac Electric Power.......... 18,900 470
PP&L Resources, Incorporated.... 20,000 453
Public Service Enterprise Group,
Incorporated.................. 93,400 2,440
Rochester Gas and Electric,
Incorporated.................. 15,000 308
Unicom Corporation.............. 229,100 6,300
--------
TOTAL UTILITIES -
ELECTRIC.................. 25,133
--------
UTILITIES - NATURAL GAS - 1.20%
Panenergy Corporation........... 263,100 8,584
Peoples Energy Corporation...... 58,000 1,827
--------
TOTAL UTILITIES - NATURAL
GAS....................... 10,411
--------
UTILITIES - TELEPHONE - 1.35%
NYNEX Corporation............... 13,000 639
Pacific Telesis Group,
Incorporated.................. 137,500 4,709
SBC Communications.............. 9,400 470
US West, Incorporated........... 180,200 5,902
--------
TOTAL UTILITIES -
TELEPHONE................. 11,720
--------
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
MISCELLANEOUS - INTEREST
SENSITIVE - 2.08%
American Express Company........ 234,600 $ 11,378
Dean Witter Discover
& Company..................... 22,600 1,232
Federal Home Loan Mortgage
Corporation................... 14,800 1,234
Federal National Mortgage
Association................... 118,000 3,614
Fund American Enterprises,
Incorporated.................. 8,800 673
--------
TOTAL MISCELLANEOUS -
INTEREST SENSITIVE........ 18,131
--------
TOTAL INTEREST SENSITIVE.... 188,126
--------
CONSUMER CYCLICALS - 4.55%
AUTOMOBILE AND TRUCK - 4.30%
Dana Corporation................ 215,900 7,179
Eaton Corporation............... 133,500 8,077
Ford Motor Company.............. 317,700 11,397
General Motors Corporation...... 195,600 10,611
--------
TOTAL AUTOMOBILE AND
TRUCK..................... 37,264
--------
ELECTRICAL HOUSEHOLD
EQUIPMENT - 0.14%
Whirlpool Corporation........... 20,000 1,203
--------
TOTAL ELECTRICAL HOUSEHOLD
EQUIPMENT................. 1,203
--------
TIRE AND RUBBER - 0.11%
Goodyear Tire & Rubber Company.. 18,800 980
--------
TOTAL TIRE AND RUBBER....... 980
--------
TOTAL CONSUMER CYCLICALS.... 39,447
--------
INTERMEDIATE GOODS & SERVICES - 12.63%
CHEMICALS - 1.33%
Dow Chemical.................... 30,000 2,666
E.I. Du Pont De Nemours &
Company....................... 30,000 2,411
Eastman Chemical Company........ 37,100 2,495
FMC Corporation (non-income
producing).................... 24,500 1,700
Olin Corporation................ 25,000 2,213
--------
TOTAL CHEMICALS............. 11,485
--------
FOREST PRODUCTS - 1.30%
Boise Cascade Corporation....... 37,700 1,753
</TABLE>
See accompanying notes
26
<PAGE> 28
AMR INVESTMENT SERVICES TRUST BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
Georgia-Pacific Corporation..... 15,000 $ 1,166
International Paper Company..... 60,000 2,393
Louisiana Pacific Corporation... 45,200 1,136
Mead Corporation................ 8,000 445
Union Camp Corporation.......... 40,000 2,175
Weyerhaeuser Company............ 45,000 2,228
--------
TOTAL FOREST PRODUCTS....... 11,296
--------
METALS - ALUMINUM - 0.55%
Aluminum Company of America..... 64,000 3,992
Reynolds Metals Company......... 15,000 806
--------
TOTAL METALS - ALUMINUM..... 4,798
--------
NATURAL GAS TRANSMISSION - 0.06%
Coastal Corporation............. 14,000 555
--------
TOTAL NATURAL GAS
TRANSMISSION.............. 555
--------
OIL - 5.38%
Amoco Corporation............... 56,400 4,117
Ashland, Incorporated........... 24,000 987
Atlantic Richfield
Corporation................... 13,000 1,531
Chevron Corporation............. 35,000 2,030
Exxon Corporation............... 62,600 5,321
Louisiana Land and Exploration
Company....................... 25,400 1,375
Mobil Corporation............... 20,000 2,300
Phillips Petroleum Company...... 260,800 10,823
Tenneco, Incorporated........... 183,000 10,042
Texaco, Incorporated............ 33,600 2,873
USX-Marathon Group.............. 50,000 1,100
Ultramar Corporation............ 70,000 2,196
Union Texas Petroleum Holdings,
Incorporated.................. 98,500 1,908
--------
TOTAL OIL................... 46,603
--------
OIL SERVICE - 0.49%
Baker Hughes, Incorporated...... 131,100 4,162
Ensco International (non-income
producing).................... 4,100 123
--------
TOTAL OIL SERVICE........... 4,285
--------
TRANSPORTATION - 1.47%
CSX Corporation................. 133,000 6,816
Conrail, Incorporated........... 30,000 2,093
Norfolk Southern Corporation.... 25,000 2,100
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
Ryder Systems, Incorporated..... 60,000 $ 1,748
--------
TOTAL TRANSPORTATION........ 12,757
--------
MISCELLANEOUS - INTERMEDIATE
GOODS & SERVICES - 2.05%
Browning-Ferris Industries...... 20,400 658
Dresser Industries.............. 146,700 4,676
Federal-Mogul Corporation....... 30,200 574
GATX Corporation................ 40,000 1,800
Mapco, Incorporated............. 16,900 984
Phelps Dodge Corporation........ 105,900 7,784
USX-US Steel Group.............. 35,400 1,168
--------
TOTAL MISCELLANEOUS -
INTERMEDIATE GOODS &
SERVICES.................. 17,644
--------
TOTAL INTERMEDIATE GOODS &
SERVICES.................. 109,423
--------
CAPITAL GOODS - 8.84%
AEROSPACE - 3.81%
The Boeing Company.............. 34,900 2,866
Coltec Industries, Incorporated
(non-income producing)........ 98,700 1,283
Lockheed Martin Corporation..... 108,499 8,748
Northrop Corporation............ 30,000 1,856
Raytheon Company................ 228,600 11,573
Rockwell International
Corporation................... 45,000 2,633
Thiokol Corporation............. 18,100 774
United Technologies
Corporation................... 30,000 3,315
--------
TOTAL AEROSPACE............. 33,048
--------
CONGLOMERATES - 1.12%
Harsco Corporation.............. 39,000 2,686
Teledyne, Incorporated.......... 12,000 446
Textron, Incorporated........... 76,900 6,594
--------
TOTAL CONGLOMERATES......... 9,726
--------
ELECTRICAL EQUIPMENT - 1.16%
General Electric Corporation.... 25,000 1,938
Honeywell, Incorporated......... 40,300 2,121
ITT Industries, Incorporated.... 80,300 2,208
Sunbeam-Oster Company........... 58,000 805
Westinghouse Electric
Corporation................... 157,400 2,971
--------
TOTAL ELECTRICAL
EQUIPMENT................. 10,043
--------
ELECTRONICS - INDUSTRIAL - 0.17%
Advanced Micro Devices.......... 42,700 801
</TABLE>
See accompanying notes
27
<PAGE> 29
AMR INVESTMENT SERVICES TRUST BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
Teradyne, Incorporated.......... 34,400 $ 705
--------
TOTAL ELECTRONICS -
INDUSTRIAL................ 1,506
--------
MACHINERY - 0.43%
Caterpillar Tractor Company..... 16,600 1,062
Deere & Company................. 42,000 1,633
Tecumseh Products Company....... 17,900 1,011
--------
TOTAL MACHINERY............. 3,706
--------
METAL MINING - 0.21%
Alumax, Incorporated............ 35,000 1,173
LTV Corporation................. 45,200 622
--------
TOTAL METAL MINING.......... 1,795
--------
NEWSPAPERS-PUBLISHING/PRINTING - 0.14%
Gannett Company................. 17,800 1,217
--------
TOTAL NEWSPAPERS-
PUBLISHING/PRINTING....... 1,217
--------
OFFICE EQUIPMENT - 1.80%
Apple Computer, Incorporated.... 23,400 570
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
International Business Machines
Corporation................... 26,400 $ 2,838
Storage Tech Group.............. 45,200 1,390
Xerox Corporation............... 73,500 10,768
--------
TOTAL OFFICE EQUIPMENT...... 15,566
--------
TOTAL CAPITAL GOODS......... 76,607
--------
TOTAL COMMON STOCK.......... 518,609
--------
Par
Amount
--------
SHORT-TERM INVESTMENTS (NOTE A) - 3.88%
Bank of Tokyo, New York BA,
5.25%, Due 7/15/1996.......... $ 8,000 7,915
CIBC Euro TD, 5.25%, Due
5/1/1996...................... 25,693 25,693
--------
TOTAL SHORT-TERM
INVESTMENTS............... 33,608
--------
TOTAL INVESTMENTS - 102.39%
(COST $750,976)............... 887,225
--------
LIABILITIES, NET OF OTHER
ASSETS - (2.39%).............. (20,744)
--------
TOTAL NET ASSETS - 100%......... $866,481
========
</TABLE>
- ---------------
Based on the cost of investments of $751,330 for federal income tax purposes at
April 30, 1996 the aggregate gross unrealized appreciation was $146,399, the
aggregate gross unrealized depreciation was $10,504, and the net unrealized
appreciation of investments was $135,895.
(A) Rates associated with short-term investments represent yield to maturity.
ABBREVIATIONS:
ADR - American Depositary Receipt
AG - Company
ARM - Adjustable Rate Mortgage
BA - Bankers Acceptance
FRN - Floating Rate Note
MTN - Medium Term Note
PERC - Preferred Equity Redemption Certificate
PLC - Public Limited Corporation
SA - Company
TBA - To Be Announced
TD - Time Deposit
See accompanying notes
28
<PAGE> 30
AMR INVESTMENT SERVICES TRUST GROWTH AND INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
PREFERRED STOCK - 0.03%
RJR Nabisco, Convertible PERC... 35,500 $ 212
Teledyne, Incorporated Series
E............................. 7,040 101
--------
TOTAL PREFERRED STOCK....... 313
--------
COMMON STOCK - 95.14%
FOREIGN STOCKS - 3.06%
Arthur Guinness & Sons, ADR..... 141,100 5,065
British Petroleum PLC, ADR...... 18,000 1,966
British Telecom PLC, ADR........ 23,100 1,270
Ciba-Geigy AG................... 35,000 2,025
Elf Aquitane SA................. 43,100 1,621
Exel Limited.................... 75,000 5,399
Hanson PLC, ADR................. 520,000 7,864
Royal Dutch Petroleum Company,
New York Registry............. 37,000 5,300
--------
TOTAL FOREIGN STOCKS........ 30,510
--------
CONSUMER STAPLES - 18.80%
DEPARTMENT AND MAIL ORDER - 3.06%
Dayton-Hudson Corporation....... 27,700 2,645
J.C. Penney Company,
Incorporated.................. 243,600 12,058
K Mart Corporation.............. 352,900 3,573
Sears Roebuck & Company......... 60,000 2,993
The May Department Store
Company....................... 149,000 7,599
Woolworth Corporation........... 90,000 1,721
--------
TOTAL DEPARTMENT AND MAIL
ORDER..................... 30,589
--------
DISTILLERS AND BREWERS - 1.40%
Anheuser-Busch Companies,
Incorporated.................. 115,000 7,719
Brown-Foreman, Incorporated..... 157,400 6,217
--------
TOTAL DISTILLERS AND
BREWERS................... 13,936
--------
DRUGS AND HOSPITAL SUPPLY - 4.93%
American Home Products
Corporation................... 83,100 8,767
Baxter International,
Incorporated.................. 256,700 11,359
Bristol-Myers Squibb Company.... 153,500 12,625
Horizon/CMS Healthcare
Corporation................... 303,400 4,020
Merck & Company, Incorporated... 60,000 3,630
Pharmacia & Upjohn,
Incorporated.................. 57,800 2,211
Warner Lambert, Incorporated.... 59,100 6,604
--------
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
TOTAL DRUGS AND HOSPITAL
SUPPLY.................... $ 49,216
--------
FOOD PROCESSING - 0.15%
Archer Daniels Midland Company.. 78,000 1,472
--------
TOTAL FOOD PROCESSING....... 1,472
--------
FOODS - 0.56%
Nabisco Holdings Corporation,
Class A....................... 182,400 5,586
--------
TOTAL FOODS................. 5,586
--------
LEISURE - 1.50%
Hasbro, Incorporated............ 188,400 6,924
King World Productions,
Incorporated (non-income
producing..................... 130,300 5,668
Toys R Us, Incorporated......... 84,700 2,361
--------
TOTAL LEISURE................... 14,953
--------
PHOTOGRAPHY - 1.73%
Eastman Kodak Company........... 226,100 17,297
--------
TOTAL PHOTOGRAPHY........... 17,297
--------
PUBLISHING - 0.63%
A.H. Belo, Incorporated, Class
A............................. 168,600 6,280
--------
TOTAL PUBLISHING............ 6,280
--------
RETAIL - OTHER - 0.28%
Melville Corporation............ 73,100 2,842
--------
TOTAL RETAIL - OTHER........ 2,842
--------
TOBACCO - 4.43%
American Brands, Incorporated... 118,900 4,949
Philip Morris Companies,
Incorporated.................. 317,900 28,651
RJR Nabisco Holdings............ 354,520 10,591
--------
TOTAL TOBACCO............... 44,191
--------
MISCELLANEOUS - CONSUMER STAPLES - 0.13%
Gibson Greetings,
Incorporated.................. 90,550 1,279
--------
TOTAL MISCELLANEOUS -
CONSUMER STAPLES.......... 1,279
--------
TOTAL CONSUMER STAPLES.......... 187,641
--------
INTEREST SENSITIVE - 30.96%
BANKS - 9.80%
Bank America Corporation........ 272,700 20,657
Bank of Boston Corporation...... 63,600 3,077
Bankers Trust Company New York.. 92,000 6,383
Chase Manhattan Corporation..... 389,014 26,793
</TABLE>
See accompanying notes
29
<PAGE> 31
AMR INVESTMENT SERVICES TRUST GROWTH AND INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
First Chicago NBD............... 206,965 $ 8,537
First of America Bank
Corporation................... 60,000 2,715
First Security Corporation...... 97,500 2,462
First Union Corporation......... 17,000 1,046
Fleet Financial Group,
Incorporated.................. 60,000 2,580
J.P. Morgan & Company,
Incorporated.................. 72,900 6,133
NationsBank Corporation......... 90,000 7,178
PNC Bank Corporation............ 219,600 6,643
US Bancorp...................... 71,600 2,318
Wells Fargo and Company......... 5,000 1,213
--------
TOTAL BANKS................. 97,735
--------
BUILDING AND MATERIALS - 0.48%
PPG Industries, Incorporated.... 95,100 4,814
--------
TOTAL BUILDING AND
MATERIALS................. 4,814
--------
FINANCE - 0.79%
Beneficial Corporation.......... 60,000 3,315
Household International,
Incorporated.................. 45,000 3,111
PaineWebber Group,
Incorporated.................. 69,300 1,447
--------
TOTAL FINANCE............... 7,873
--------
INSURANCE - LIFE AND MULTI-LINE - 4.07%
Aetna Life & Casualty Company... 151,000 10,759
American General Corporation.... 190,000 6,674
Aon, Incorporated............... 171,400 9,191
Lincoln National Corporation.... 60,000 2,895
Old Republic International
Corporation................... 188,700 6,227
Travelers Corporation........... 78,896 4,852
--------
TOTAL INSURANCE - LIFE AND
MULTI-LINE................ 40,598
--------
INSURANCE - PROPERTY AND CASUALTY - 2.82%
Allstate Corporation............ 436,080 16,953
St. Paul Companies.............. 187,300 9,950
TIG Holdings, Incorporated...... 41,000 1,245
--------
TOTAL INSURANCE - PROPERTY
AND CASUALTY.............. 28,148
--------
SAVINGS AND LOAN - 1.05%
Great Western Financial
Corporation................... 357,200 8,216
H.F. Ahmanson & Company......... 95,000 2,256
--------
TOTAL SAVINGS AND LOAN...... 10,472
--------
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
UTILITIES - ELECTRIC - 4.83%
Central and Southwest
Corporation................... 75,000 $ 2,044
CMS Energy Corporation.......... 100,000 2,913
DTE Energy Company.............. 143,800 4,458
Edison International............ 160,000 2,560
Entergy Corporation............. 472,600 12,524
Illinova Corporation............ 90,000 2,295
New York State Electric & Gas
Corporation................... 70,000 1,601
Peco Energy Company............. 100,000 2,488
Potomac Electric Power.......... 43,500 1,082
PP&L Resources, Incorporated.... 50,000 1,131
Public Service Enterprise Group,
Incorporated.................. 172,800 4,514
Rochester Gas and Electric,
Incorporated.................. 45,000 923
Unicom Corporation.............. 351,300 9,661
--------
TOTAL UTILITIES -
ELECTRIC.................. 48,194
--------
UTILITIES - NATURAL GAS - 1.62%
Panenergy Corporation........... 434,000 14,159
Peoples Energy Corporation...... 65,000 2,048
--------
TOTAL UTILITIES - NATURAL
GAS....................... 16,207
--------
UTILITIES - TELEPHONE - 1.86%
NYNEX Corporation............... 27,500 1,351
Pacific Telesis Group,
Incorporated.................. 213,200 7,302
SBC Communications.............. 9,400 470
US West, Incorporated........... 287,900 9,429
--------
TOTAL UTILITIES -
TELEPHONE................. 18,552
--------
MISCELLANEOUS - INTEREST SENSITIVE - 3.64%
American Express Company........ 340,200 16,500
Dean Witter Discover & Company.. 46,200 2,518
Federal Home Loan Mortgage
Corporation................... 65,000 5,419
Federal National Mortgage
Association................... 284,800 8,722
Fund American Enterprises,
Incorporated.................. 41,375 3,165
--------
TOTAL MISCELLANEOUS -
INTEREST SENSITIVE........ 36,324
--------
TOTAL INTEREST SENSITIVE.... 308,917
--------
</TABLE>
See accompanying notes
30
<PAGE> 32
AMR INVESTMENT SERVICES TRUST GROWTH AND INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
CONSUMER CYCLICALS - 6.06%
AUTOMOBILE AND TRUCK - 5.52%
Dana Corporation................ 370,600 $ 12,322
Eaton Corporation............... 189,400 11,459
Ford Motor Company.............. 429,200 15,398
General Motors Corporation...... 293,500 15,922
--------
TOTAL AUTOMOBILE AND
TRUCK..................... 55,101
--------
ELECTRICAL HOUSEHOLD EQUIPMENT - 0.30%
Whirlpool Corporation........... 50,000 3,006
--------
TOTAL ELECTRICAL HOUSEHOLD
EQUIPMENT................. 3,006
--------
TIRE AND RUBBER - 0.24%
Goodyear Tire & Rubber Company.. 45,000 2,346
--------
TOTAL TIRE AND RUBBER....... 2,346
--------
TOTAL CONSUMER CYCLICALS.... 60,453
--------
INTERMEDIATE GOODS & SERVICES - 21.75%
CHEMICALS - 2.16%
Dow Chemical.................... 40,000 3,555
E.I. Du Pont De Nemours &
Company....................... 47,000 3,778
Eastman Chemical Company........ 51,775 3,482
FMC Corporation (non-income
producing).................... 116,900 8,110
Olin Corporation................ 30,000 2,655
--------
TOTAL CHEMICALS............. 21,580
--------
FOREST PRODUCTS - 2.07%
Boise Cascade Corporation....... 77,000 3,581
Georgia-Pacific Corporation..... 50,000 3,888
International Paper Company..... 70,000 2,791
Louisiana Pacific Corporation... 92,400 2,322
Mead Corporation................ 15,000 834
Union Camp Corporation.......... 70,000 3,806
Weyerhaeuser Company............ 70,000 3,465
--------
TOTAL FOREST
PRODUCTS.................. 20,687
--------
METALS - ALUMINUM - 0.74%
Aluminum Company of America..... 97,000 6,050
Reynolds Metals Company......... 25,000 1,344
--------
TOTAL METALS - ALUMINUM..... 7,394
--------
NATURAL GAS TRANSMISSION - 0.44%
Coastal Corporation............. 111,200 4,406
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
TOTAL NATURAL GAS
TRANSMISSION.............. $ 4,406
--------
OIL - 10.45%
Amoco Corporation............... 87,200 6,366
Ashland, Incorporated........... 80,000 3,290
Atlantic Richfield
Corporation................... 132,900 15,649
Chevron Corporation............. 55,000 3,190
Exxon Corporation............... 117,100 9,954
Louisiana Land and Exploration
Company....................... 131,325 7,108
Mobil Corporation............... 31,500 3,623
Phillips Petroleum Company...... 399,300 16,571
Tenneco, Incorporated........... 302,100 16,578
Texaco, Incorporated............ 110,000 9,405
USX-Marathon Group.............. 150,000 3,300
Ultramar Corporation............ 100,000 3,138
Union Texas Petroleum Holdings,
Incorporated.................. 312,000 6,045
--------
TOTAL OIL................... 104,217
--------
OIL SERVICE - 0.67%
Baker Hughes, Incorporated...... 185,200 5,880
Ensco International (non-income
producing).................... 26,900 807
--------
TOTAL OIL SERVICE........... 6,687
--------
TRANSPORTATION - 2.05%
CSX Corporation................. 209,100 10,716
Conrail, Incorporated........... 50,000 3,488
Norfolk Southern Corporation.... 40,000 3,360
Ryder Systems, Incorporated..... 100,000 2,913
--------
TOTAL TRANSPORTATION........ 20,477
--------
MISCELLANEOUS - INTERMEDIATE GOODS &
SERVICES - 3.17%
Browning-Ferris Industries...... 32,800 1,058
Dresser Industries,
Incorporated.................. 189,800 6,050
Federal-Mogul Corporation....... 61,600 1,170
GATX Corporation................ 60,000 2,700
Mapco, Incorporated............. 105,800 6,163
Phelps Dodge Corporation........ 162,400 11,936
USX-US Steel Group.............. 76,200 2,515
--------
TOTAL MISCELLANEOUS -
INTERMEDIATE GOODS &
SERVICES.................. 31,592
--------
TOTAL INTERMEDIATE GOODS &
SERVICES.................. 217,040
--------
</TABLE>
See accompanying notes
31
<PAGE> 33
AMR INVESTMENT SERVICES TRUST GROWTH AND INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
CAPITAL GOODS - 14.51%
AEROSPACE - 6.11%
The Boeing Company.............. 43,900 $ 3,605
Coltec Industries, Incorporated
(non-income producing......... 388,700 5,053
Lockheed Martin Corporation..... 225,994 18,221
Northrop Corporation............ 45,000 2,784
Raytheon Company................ 395,200 20,007
Rockwell International
Corporation................... 60,000 3,510
Thiokol Corporation............. 103,700 4,433
United Technologies
Corporation................... 30,000 3,315
--------
TOTAL AEROSPACE............. 60,928
--------
CONGLOMERATES - 2.36%
Harsco Corporation.............. 55,000 3,788
Teledyne, Incorporated.......... 138,350 5,136
Textron, Incorporated........... 170,900 14,655
--------
TOTAL CONGLOMERATES......... 23,579
--------
ELECTRICAL EQUIPMENT - 1.41%
General Electric Corporation.... 7,700 597
Honeywell, Incorporated......... 46,000 2,421
ITT Industries, Incorporated.... 164,200 4,516
Sunbeam-Oster Company........... 220,800 3,064
Westinghouse Electric
Corporation................... 180,700 3,411
--------
TOTAL ELECTRICAL
EQUIPMENT................. 14,009
--------
ELECTRONICS - INDUSTRIAL - 0.30%
Advanced Micro Devices.......... 84,000 1,575
Teradyne, Incorporated.......... 70,200 1,439
--------
TOTAL ELECTRONICS -
INDUSTRIAL................ 3,014
--------
MACHINERY - 1.10%
Caterpillar Tractor Company..... 33,900 2,170
Deere & Company................. 90,000 3,499
Tecumseh Products Company....... 94,400 5,334
--------
TOTAL MACHINERY............. 11,003
<CAPTION>
Shares Value
-------- --------
(dollars in thousands)
<S> <C> <C>
---------
METAL MINING - 0.36%
Alumax, Incorporated............ 70,800 $ 2,372
LTV Corporation................. 92,400 1,271
----------
TOTAL METAL MINING.......... 3,643
----------
OFFICE EQUIPMENT - 2.87%
Apple Computer, Incorporated.... 47,700 1,163
International Business Machines
Corporation................... 42,400 4,558
Storage Tech Group.............. 92,400 2,841
Xerox Corporation............... 137,000 20,071
----------
TOTAL OFFICE EQUIPMENT...... 28,633
----------
TOTAL CAPITAL GOODS......... 144,809
----------
TOTAL COMMON STOCK.......... 949,370
----------
Par
Amount
--------
SHORT-TERM INVESTMENTS (NOTE A) - 6.24%
Bank of Tokyo, New York BA,
5.69%, Due 5/6/1996........... $ 10,000 9,992
Bank of Tokyo, New York BA,
5.25%, Due 7/15/1996.......... 7,000 6,925
CIBC Eurodollar TD, 5.25%,
Due 5/1/1996.................. 43,349 43,349
Dai-Ichi Kangyo Bank, New York
BA, 5.51%, Due 7/9/1996....... 2,000 1,979
----------
TOTAL SHORT-TERM
INVESTMENTS............... 62,245
----------
TOTAL INVESTMENTS - 101.41%
(COST $803,268)............... 1,011,928
----------
LIABILITIES, NET OF OTHER
ASSETS - (1.41%).............. (14,029)
----------
TOTAL NET ASSETS - 100%......... $ 997,899
==========
</TABLE>
- ---------------
Based on the cost of investments of $803,794 for federal income tax purposes at
April 30, 1996, the aggregate gross unrealized appreciation was $219,084, the
aggregate gross unrealized depreciation was $10,950, and the net unrealized
appreciation of investments was $208,134.
(A) Rates associated with short-term investments represent yield to maturity.
ABBREVIATIONS:
ADR - American Depository Receipt
AG - Company
BA - Bankers Acceptance
PERC - Preferred Equity Redemption Certificate
PLC - Public Limited Corporation
SA - Company
TD - Time Deposit
See accompanying notes
32
<PAGE> 34
AMR INVESTMENT SERVICES TRUST INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
---------- --------
(dollars in thousands)
<S> <C> <C>
AUSTRALIA COMMON STOCK - 6.72%
Australia & New Zealand Banking
Group........................ 926,577 $ 4,429
Brambles Industries, Limited... 349,500 4,795
Burns, Philip & Co., Limited... 400,000 821
CSR, Limited................... 310,000 1,119
Coles Myer, Limited............ 190,400 689
GIO Australia Holdings,
Limited...................... 470,271 1,091
Goodman Fielder, Limited....... 800,000 792
News Corporation, Limited...... 210,000 1,232
News Corporation Preferred
Rights....................... 105,000 541
Pacific Dunlop, Limited........ 401,000 977
Pioneer International,
Limited...................... 860,000 2,617
QBE Insurance Group, Limited... 443,358 2,329
Westpac Banking Corporation.... 86,000 418
--------
TOTAL AUSTRALIA COMMON
STOCK.................... 21,850
--------
AUSTRIA COMMON STOCK - 1.07%
Boehler-Uddeholm............... 8,689 708
EVN Energie-Versorgung
Niederoesterreich AG......... 3,960 578
Mayr-Melnhof Karton AG......... 16,000 733
VA Technologie AG.............. 11,000 1,459
--------
TOTAL AUSTRIA COMMON
STOCK.................... 3,478
--------
BELGIUM COMMON STOCK - 1.02%
Arbed, SA (non-income
producing)................... 3,000 329
G.I.B. Holdings, Limited,
NPV.......................... 14,200 628
Groupe Bruxelles Lambert, SA... 11,550 1,517
Groupe Bruxelles Lambert,
NPV.......................... 209 27
Solvay Et Cie.................. 1,400 822
--------
TOTAL BELGIUM COMMON
STOCK.................... 3,323
--------
CANADA COMMON STOCK - 2.30%
Anderson Exploration Limited... 75,000 796
Bank of Nova Scotia............ 62,439 1,415
Canadian Imperial Bank of
Commerce..................... 60,000 1,867
IMASCO, Limited................ 75,000 1,432
Noranda, Incorporated.......... 62,500 1,398
Wascana Energy, Incorporated
(non-income producing)....... 60,000 571
--------
TOTAL CANADA COMMON
STOCK.................... 7,479
--------
<CAPTION>
Shares Value
---------- --------
(dollars in thousands)
<S> <C> <C>
DENMARK COMMON STOCK - 0.72%
Den Danske Bank................ 3,200 $ 208
Novo Nordisk AS, "B"........... 8,000 1,038
Unidanmark AS, "A"............. 24,000 1,068
--------
TOTAL DENMARK COMMON
STOCK.................... 2,314
--------
FINLAND COMMON STOCK - 2.30%
Enso-Gutzeit OY................ 170,000 1,342
Huhtamaki Group I Free......... 36,000 1,187
Merita Limited................. 412,200 884
Metsa-Serla OY................. 100,000 728
Nokia OY, "A".................. 45,100 1,607
Repola OY...................... 90,000 1,736
--------
TOTAL FINLAND COMMON
STOCK.................... 7,484
--------
FRANCE COMMON STOCK - 8.16%
Alcatel Alsthom CG............. 17,000 1,596
Assurances Generales De
France....................... 8,650 236
Axa SA......................... 12,542 746
Banque Nationale De Paris...... 29,000 1,209
Bongrain SA.................... 1,700 942
Credit Foncier De France....... 36,000 438
Credit Lyonnais-CDI (non-income
producing)................... 9,100 303
ECCO SA........................ 3,750 841
Groupe Danone.................. 5,400 815
La France SA................... 9,000 2,399
Lafarge Coppee................. 38,850 2,484
Pechiney SA.................... 12,800 602
PSA Peugeot.................... 7,000 976
Rhone-Poulenc "A".............. 50,000 1,198
Saint Gobain................... 11,000 1,315
Sa Des Galeries Lafayette...... 162 51
Societe Elf Aquitaine SA....... 62,676 4,653
Thomson CSF.................... 19,500 518
Total Petroleum Company "B".... 43,954 2,977
Usinor Sacilor................. 72,000 1,112
Valeo SA....................... 20,000 1,108
--------
TOTAL FRANCE COMMON
STOCK.................... 26,519
--------
GERMANY - 5.84%
PREFERRED STOCK - 1.20%
Herlitz AG..................... 5,947 642
RWE AG......................... 42,000 1,216
Spar Handels AG................ 1,700 341
Volkswagen AG.................. 6,800 1,705
--------
TOTAL GERMANY PREFERRED
STOCK.................... 3,904
--------
</TABLE>
See accompanying notes
33
<PAGE> 35
AMR INVESTMENT SERVICES TRUST INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
---------- --------
(dollars in thousands)
<S> <C> <C>
COMMON STOCK - 4.64%
BASF AG........................ 3,900 $ 1,060
BAYER AG....................... 12,350 3,967
Commerzbank AG................. 4,000 867
Deutsche Bank AG............... 30,000 1,434
Hoechst AG..................... 1,600 537
Karstadt AG.................... 5,500 2,052
Mannesmann AG.................. 2,550 871
Muenchener Rueckversicherung
AG........................... 300 491
Muenchener Rueckversicherung
AG -- Reg.................... 137 246
Muenchener Rueckversicherung
AG -- Warrants............... 37 4
Varta AG (non-income
producing)................... 1,520 289
Veba AG........................ 63,200 3,118
Volkswagen AG.................. 460 157
--------
TOTAL GERMANY COMMON
STOCK.................... 15,093
--------
TOTAL GERMANY.............. 18,997
--------
HONG KONG COMMON STOCK - 4.78%
Cheung Kong Holdings,
Limited...................... 235,000 1,678
Dickson Concepts
(International), Limited..... 900 1,041
Hang Lung Development Company,
Limited...................... 710,000 1,345
Hong Kong Telecommunications,
Limited...................... 831,600 1,586
HSBC Holdings, Limited......... 93,700 1,399
Hutchison Whampoa, Limited..... 200,000 1,241
National Mutual of Asia,
Limited...................... 1,700,000 1,439
New World Development Company,
Limited...................... 320,000 1,435
Oriental Press Group,
Limited...................... 3,005,000 1,399
Peregrine Investments Holdings,
Limited...................... 550,000 850
South China Morning Post
(Holdings), Limited.......... 1,100,000 747
Sun Hung Kai Properties,
Limited...................... 110,100 1,050
Swire Pacific, Limited "A"..... 40,000 341
--------
TOTAL HONG KONG COMMON
STOCK.................... 15,551
--------
IRELAND COMMON STOCK - .61%
Jefferson Smurfit.............. 740,000 1,964
--------
TOTAL IRELAND COMMON
STOCK.................... 1,964
--------
<CAPTION>
Shares Value
---------- --------
(dollars in thousands)
<S> <C> <C>
ITALY - 2.99%
PREFERRED STOCK - .21%
Concessioni E Costruzioni
Autostrade................... 525,000 $ 673
--------
TOTAL ITALY PREFERRED
STOCK.................... 673
--------
ITALY COMMON STOCK - 2.78%
Danieli Group Risp............. 473,960 1,702
Fiat, SPA...................... 290,000 987
Olivetti Ing C, & Co........... 534,000 341
Sasib, SPA..................... 400,000 777
STET Risp (non convertible).... 550,000 1,856
STET Societa Finanziaria
Telefonica................... 840,000 2,199
Telecom Italia, SPA............ 500,000 1,018
Telecom Italia, SPA Non
Convertible Risp............. 100,000 166
--------
TOTAL ITALY COMMON STOCK... 9,046
--------
TOTAL ITALY................ 9,719
--------
JAPAN COMMON STOCK - 12.96%
Aisin Seiki Company, Limited... 56,000 882
Bridgestone Corporation........ 54,000 1,000
Canon, Incorporated............ 70,000 1,390
Chudenko Corporation........... 9,000 317
Daibiru Corporation............ 90,000 1,211
Daicel Chemical................ 110,000 733
Daikin Industries.............. 34,000 377
Dainippon Ink & Chemical....... 57,000 310
Daiwa House Industry Company,
Limited...................... 103,000 1,642
East Japan Railway Company..... 250 1,334
Fuji Photo Film................ 112,000 3,486
Hitachi Koki Co., Limited...... 70,000 742
Hitachi, Limited............... 120,000 1,295
KAO Corporation................ 110,000 1,470
Kirin Brewery Company,
Limited...................... 37,000 480
Matsushita Electric Industrial
Company...................... 93,000 1,642
Nichicon Corporation........... 114,000 1,894
Nichido Fire & Marine
Insurance.................... 231,000 1,941
Nintendo Company, Limited...... 32,000 2,468
Nippon Fire & Marine
Insurance.................... 118,000 862
Nippon Telegraph & Telephone
Corporation.................. 143 1,107
Promise Co., Limited........... 21,000 892
Ryosan Company................. 12,000 341
Sekisui Chemical Company,
Limited...................... 127,000 1,600
Sony Corporation............... 41,800 2,714
</TABLE>
See accompanying notes
34
<PAGE> 36
AMR INVESTMENT SERVICES TRUST INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
---------- --------
(dollars in thousands)
<S> <C> <C>
Stanley Electric Company,
Limited...................... 35,000 $ 258
Sumitomo Marine & Fire......... 115,000 1,093
Sumitomo Rubber Industries..... 190,000 1,725
Suzuki Motor Company,
Limited...................... 167,000 2,120
TDK Corporation................ 16,000 915
Toyo Seikan Kaisha............. 65,000 2,302
Yodogawa Steel Works........... 192,000 1,571
--------
TOTAL JAPAN COMMON STOCK... 42,114
--------
MALAYSIA COMMON STOCK - .59%
Arab Malaysian Finance......... 109,000 503
Kedah Cement Holdings BHD...... 350,000 696
Malaysian International
Shipping Corporation BHD..... 226,666 727
--------
TOTAL MALAYSIA COMMON
STOCK.................... 1,926
--------
NETHERLANDS COMMON STOCK - 8.68%
ABN/AMRO Holdings NV........... 80,000 4,136
Aegon NV....................... 45,000 1,902
Akzo Nobel NV.................. 43,975 5,100
Fortis Amev NV................. 29,460 2,102
Hollandsche Beton Groep NV..... 11,428 1,958
Internationale Nederlanden
Groep NV..................... 91,766 7,075
Koninklijke Bijenkorf Beheer
NV........................... 14,000 934
Nedlloyd Groep NV.............. 12,000 263
Philips Electronics............ 55,000 1,939
Royal PTT Nederland NV......... 38,468 1,442
Unilever NV.................... 10,000 1,363
--------
TOTAL NETHERLANDS COMMON
STOCK.................... 28,214
--------
</TABLE>
<TABLE>
<CAPTION>
Par
Amount
----------
<S> <C> <C>
NEW ZEALAND - 1.12%
BONDS - 0.02%
Brierley Investments, Limited
Subordinated Convertible,
9.00%, Due 6-30-1998........ $ 63 55
--------
TOTAL NEW ZEALAND BONDS... 55
--------
</TABLE>
<TABLE>
<CAPTION>
Shares
----------
<S> <C> <C>
COMMON STOCK - 1.10%
Brierley Investments,
Limited..................... 1,400,000 1,317
Fisher & Paykel, Limited...... 140,000 460
Fletcher Challenge, Limited... 826,200 1,796
--------
TOTAL NEW ZEALAND COMMON
STOCK................... 3,573
--------
<CAPTION>
Shares Value
---------- --------
(dollars in thousands)
<S> <C> <C>
TOTAL NEW ZEALAND......... $ 3,628
--------
NORWAY COMMON STOCK - 2.95%
Den Norske Bank, Series A
Free........................ 506,000 1,453
Hafslund Nycomed, Series B
Free........................ 99,500 2,774
Kvaener Industries AS......... 20,789 853
Norsk Hydro AS................ 40,000 1,820
Saga Petroleum, Series B
Free........................ 100,000 1,352
Unitor AS..................... 80,000 1,349
--------
TOTAL NORWAY COMMON
STOCK................... 9,601
--------
SINGAPORE COMMON STOCK - 0.79%
Hong Kong Land (SGD).......... 420,000 899
Neptune Orient Lines.......... 300,000 333
Sembawang Corporation......... 258,000 1,340
--------
TOTAL SINGAPORE COMMON
STOCK................... 2,572
--------
SPAIN COMMON STOCK - 4.29%
Banco Espana Credito SA....... 7,000 45
Banco Popular Espanol......... 5,500 910
Banco Santander SA............ 35,300 1,638
Iberdrola SA.................. 300,357 2,936
Repsol SA..................... 50,500 1,850
Telefonica de Espana SA....... 336,500 5,984
Uralita (non-income
producing).................. 59,250 582
--------
TOTAL SPAIN COMMON
STOCK................... 13,945
--------
SWEDEN COMMON STOCK - 4.96%
Assidomaen AB................. 48,000 1,102
Astra AB, "B" Free............ 48,000 2,115
Celsius Industrier AB, "B".... 72,000 1,949
Electrolux AB................. 41,000 2,063
Esselte AB, "A" Free.......... 2,000 40
Esselte AB, "B" Free.......... 17,000 340
Fastighets AB Tornet.......... 91,700 95
Marieberg Tidnings............ 46,000 1,076
Nordbanken AS................. 28,500 486
Skandia Forsakrings AB........ 33,800 771
Skandinaviska Enskilda
Banken "A".................. 95,200 714
SKF AB, "B" Free.............. 50,000 1,162
Sparbanken Sverige AB......... 91,700 1,032
Stora Kopparsbergs "A"........ 21,100 284
Stora Kopparsbergs "B"........ 25,800 345
Svedala Industries "A" Free... 40,000 1,430
Svenska Cellulosa "B" Free.... 59,000 1,111
--------
TOTAL SWEDEN COMMON
STOCK................... 16,115
--------
</TABLE>
See accompanying notes
35
<PAGE> 37
AMR INVESTMENT SERVICES TRUST INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
---------- --------
(dollars in thousands)
<S> <C> <C>
SWITZERLAND COMMON STOCK - 6.96%
ABB AG-R Series "A"........... 1,100 $ 1,322
Ciba-Geigy AG-R............... 5,000 5,789
Forbo Holding AG-R............ 2,000 834
Interdiscount Holding
Limited-BR.................. 8,400 202
Nestle SA-R................... 3,700 4,105
Schindler Holdings AG-PC...... 350 382
Schindler Holdings AG-PC
Warrants.................... 300 1
SGS Holding SA-BR............. 240 540
SGS Holding SA-R.............. 4,200 1,670
SIG AG-BR..................... 1,140 2,693
Sulzer AG-PC.................. 3,450 2,218
Sulzer AG-R................... 1,500 1,010
Swiss Reinsurance
Company-R................... 1,765 1,844
--------
TOTAL SWITZERLAND COMMON
STOCK................... 22,610
--------
UNITED KINGDOM COMMON STOCK - 8.61%
Albert Fisher Group, PLC...... 262,500 201
Argyll Group, PLC............. 309,677 1,543
Associated British Foods
Group, PLC.................. 72,000 430
Barclays, PLC................. 27,900 308
Barratt Developments, PLC..... 280,000 1,132
Barratt Developments Nil Paid
Rights...................... 70,000 71
BAT Industries, PLC........... 270,700 2,041
Burton Group, PLC............. 335,000 787
Commercial Union, PLC......... 110,000 952
English China Clays, PLC...... 77,000 337
GKN, PLC...................... 60,000 885
Grand Metropolitan, PLC....... 179,255 1,175
Hanson, PLC................... 346,000 1,023
Hillsdown Holdings, PLC....... 526,961 1,415
<CAPTION>
Shares Value
---------- --------
(dollars in thousands)
<S> <C> <C>
Hyder, PLC.................... 131,250 $ 1,444
Kwik Save Group, PLC.......... 138,500 983
London Pacific Group, PLC..... 130,000 496
National Power, PLC........... 50,000 421
National Westminster Bank,
PLC......................... 175,000 1,608
PowerGen, PLC................. 127,000 1,063
Reckitt & Colman, PLC......... 125,210 1,368
Redland, PLC.................. 220,000 1,420
Rolls Royce, PLC.............. 107,600 383
Royal Insurance Holdings,
PLC......................... 96,136 525
Salvesen, (Christian), PLC.... 290,000 1,158
Shell Transportation and
Trading, PLC................ 45,000 592
Tesco, PLC.................... 340,173 1,432
Thames Water Group, PLC....... 64,800 558
Unilever, PLC................. 95,000 1,734
WPP Group, PLC................ 169,500 519
--------
TOTAL UNITED KINGDOM
COMMON STOCK............ 28,004
--------
FOREIGN SECURITIES DENOMINATED IN U.S. DOLLARS - 2.19%
Dairy Farm International...... 908,000 844
GP Batteries International
Limited..................... 137,000 338
GP Batteries Warrants Expires
11/15/2000.................. 34,250 25
Jardine Matheson Holdings..... 451,400 3,611
Jardine Strategic............. 700,000 2,296
--------
TOTAL FOREIGN SECURITIES
DENOMINATED IN U.S.
DOLLARS................. 7,114
--------
</TABLE>
See accompanying notes
36
<PAGE> 38
AMR INVESTMENT SERVICES TRUST INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Amount Value
---------- --------
(dollars in thousands)
<S> <C> <C>
UNITED STATES GOVERNMENT OBLIGATIONS (NOTE B) - 5.51%
U. S. Treasury Bill, 4.86%,
Due 5/2/1996................ $ 1,571 $ 1,571
U. S. Treasury Bill, 4.89%,
Due 5/9/1996................ 1,357 1,355
U. S. Treasury Bill, 4.86%,
Due 5/30/1996............... 319 318
U. S. Treasury Bill, 4.89%,
Due 6/6/1996................ 5,130 5,104
U. S. Treasury Bill, 4.95%,
Due 6/13/1996............... 3,452 3,432
U. S. Treasury Bill, 4.99%,
Due 6/27/1996............... 492 488
<CAPTION>
Par Amount Value
---------- --------
(dollars in thousands)
<S> <C> <C>
U. S. Treasury Bill, 5.07%,
Due 7/5/1996................ $ 763 $ 756
U. S. Treasury Bill, 5.03%,
Due 7/11/1996............... 4,949 4,900
--------
TOTAL UNITED STATES
GOVERNMENT
OBLIGATIONS............. 17,924
--------
TOTAL INVESTMENTS -
96.12% (COST - $262,478).... 312,445
--------
OTHER ASSETS, NET OF
LIABILITIES - 3.88%......... 12,620
--------
TOTAL NET ASSETS - 100%....... $325,065
========
</TABLE>
- ------------
(A) Based on the cost of investments of $262,617 for federal income tax
purposes at April 30, 1996, the aggregate gross unrealized appreciation
was $54,958, the aggregate gross unrealized depreciation was $5,130, and
the net unrealized appreciation of investments was $49,828.
(B) Rates associated with United States Government Obligations represent yield
to maturity from time of purchase.
ABBREVIATIONS:
AB - Company (Sweden)
AG - Company (Austria, Germany, Switzerland)
AS - Company (Denmark, Norway, Switzerland)
BHD - Berhard (Malaysia)
BR - Bearer (Switzerland)
CDI - Certificate of Investment (France)
CG - Company General (France)
NPV - No Par Value (Belgium)
NV - Company (Netherlands)
OY - Company (Finland)
PC - Participating Certificates (Switzerland)
PLC - Public Limited Corporation (United Kingdom)
R - Registered (Switzerland)
SA - Company (Belgium, France, Spain, Switzerland)
SGD - Singapore Registered (Singapore)
SPA - Company (Italy)
See accompanying notes
37
<PAGE> 39
AMR INVESTMENT SERVICES TRUST INTERNATIONAL EQUITY PORTFOLIO
INDUSTRY DIVERSIFICATION
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent of
Net Assets
----------
<S> <C>
Basic Industry................................................................... 30.07%
Capital Goods.................................................................... 9.18
Consumer Goods & Services........................................................ 20.50
Energy........................................................................... 4.38
Financing, Insurance & Real Estate............................................... 20.83
Transportation................................................................... 0.92
Utilities........................................................................ 4.71
Short Term Investments........................................................... 5.51
Other Assets/Liabilities......................................................... 3.90
--------
NET ASSETS............................................................. 100.00%
========
</TABLE>
38
<PAGE> 40
AMR INVESTMENT SERVICES TRUST LIMITED-TERM INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount Value
------- --------
(dollars in thousands)
<S> <C> <C>
U.S. GOVERNMENT & AGENCY
OBLIGATIONS - 46.46%
Federal Home Loan Mortgage
Corporation, MH-1 A REMIC,
10.15%, Due 4/15/2006.......... $ 218 $ 220
Federal National Mortgage
Association, 1993-135 Z, 5.85%,
Due 7/25/2005.................. 18,785 18,109
Federal National Mortgage
Association, 1992-203 EB,
6.25%, Due 6/25/2005........... 5,000 4,929
Federal National Mortgage
Association, G1992-13 PH,
7.00%, Due 11/25/2020.......... 7,400 7,262
Federal National Mortgage
Association, 1992-131 H, 7.50%,
Due 6/25/2021.................. 15,000 14,931
Federal National Mortgage
Association, 1995-W1 A1, 8.40%,
Due 4/25/2025.................. 2,589 2,557
U.S. Treasury Notes, 6.875%,
Due 10/31/1999................. 30,000 31,078
U.S. Treasury Notes, 6.875%,
Due 3/31/2000.................. 7,000 7,123
--------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS......... 86,209
--------
CORPORATE OBLIGATIONS - 35.78%
BANK FUNDING - 21.50%
Advanta National Bank, CD, 6.43%,
Due 4/30/1998, Dated
4/30/1996...................... 9,000 8,999
Capital One Bank Note, 8.125%,
Due 2/27/1998.................. 5,000 5,130
Capital One Bank Note, 8.125%,
Due 3/1/2000................... 5,000 5,177
First USA Bank Note, 5.75%,
Due 1/15/1999.................. 9,000 8,765
Midland Bank PLC, 7.65%,
Due 5/1/2025, Puttable 2007,
Dated 5/10/1995................ 5,000 5,142
Southtrust Bank of Alabama,
5.58%, Due 2/6/2006, Puttable
2001, Dated 2/6/1996........... 7,000 6,676
--------
TOTAL BANK FUNDING........... 39,889
--------
PERSONAL CREDIT - 8.75%
Chrysler Financial Corporation,
12.75%, Due 11/1/1999.......... 8,000 9,415
Ford Motor Credit, Global Bond,
6.25%, Due 11/8/2000........... 7,000 6,821
--------
TOTAL PERSONAL CREDIT........ 16,236
--------
<CAPTION>
Par
Amount Value
------- --------
(dollars in thousands)
<S> <C> <C>
SECURITIES FIRMS - 2.69%
Lehman Brothers, MTN, 6.90%,
Due 7/15/1999.................. $ 5,000 $ 4,995
--------
TOTAL SECURITIES FIRMS....... 4,995
--------
UTILITIES - 2.84%
Great Lakes Power Incorporated,
8.90%, Due 12/1/1999........... 5,000 5,264
--------
TOTAL UTILITIES.............. 5,264
--------
TOTAL CORPORATE
OBLIGATIONS................ 66,384
--------
NON-AGENCY MORTGAGE BACKED OBLIGATIONS - 14.78%
Collateralized Mortgage
Obligation Trust, 56 A, 9.00%,
Due 5/1/2014................... 249 257
Residential Funding Securities
Corporation, 6.7125%,
Due 6/25/2025.................. 5,602 5,614
Resolution Trust Corporation,
1992-MH3 B1, 7.25%,
Due 12/15/2011................. 8,397 8,447
Resolution Trust Corporation,
1992-7 A3, 7.5181%,
Due 3/25/2022.................. 3,178 3,129
Resolution Trust Corporation,
1992-6 A3, 7.7889%,
Due 3/25/2022.................. 3,095 3,111
Resolution Trust Corporation,
1992-1 A1, 7.6948%,
Due 5/25/2028.................. 3,429 3,439
Resolution Trust Corporation,
1992-4 A2, 7.7229%,
Due 7/25/2028.................. 3,415 3,440
--------
TOTAL NON-AGENCY MORTGAGE
BACKED OBLIGATIONS......... 27,437
--------
SHORT-TERM INVESTMENTS (NOTE A) - 1.29%
Bank Brussels Lambert, Eurodollar
TD, 5.375%, Due 5/1/1996....... 2,395 2,395
--------
TOTAL SHORT-TERM
INVESTMENTS................ 2,395
--------
TOTAL INVESTMENTS - 98.31%
(COST $186,023)................ 182,425
--------
OTHER ASSETS, NET OF
LIABILITIES - 1.69%............ 3,133
--------
TOTAL NET ASSETS - 100%.......... $185,558
========
</TABLE>
See accompanying notes
39
<PAGE> 41
AMR INVESTMENT SERVICES TRUST LIMITED-TERM INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Based on the cost of investments of $186,023 for federal income tax purposes at
April 30, 1996, the aggregate gross unrealized appreciation was $22, the
aggregate gross unrealized depreciation was $3,620, and the net unrealized
depreciation of investments was $3,598.
(A) Rates associated with short-term investments represent yield to maturity.
ABBREVIATIONS:
CD -- Certificate of Deposit
MTN -- Medium Term Note
PLC -- Public Limited Corporation
REMIC -- Real Estate Mortgage Investment Conduit
TD -- Time Deposit
See accompanying notes
40
<PAGE> 42
AMR INVESTMENT SERVICES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth and International Limited-Term
Balanced Income Equity Income
Portfolio Portfolio Portfolio Portfolio
--------- ---------- ------------- ------------
(in thousands)
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities at value (cost -- $750,976;
$803,268; $262,478; $186,023, respectively)................ $ 887,225 $1,011,928 $ 312,445 $182,425
Cash, including foreign currency............................. -- -- 11,274 1,954
Unrealized appreciation on foreign currency contracts........ -- -- 1,082 --
Dividends and interest receivable............................ 6,055 1,276 1,305 1,876
Reclaims receivable.......................................... -- -- 251 --
Receivable for investments sold.............................. 14,292 1,251 2,010 8,324
Deferred organization costs.................................. 39 39 39 39
Other........................................................ 304 64 -- 156
--------- ---------- --------- --------
TOTAL ASSETS............................................. 907,915 1,014,558 328,406 194,774
--------- ---------- --------- --------
LIABILITIES:
Payable for investments purchased............................ 18,692 15,511 2,168 8,804
Payable for portfolio redemptions............................ 21,401 279 130 51
Management and investment advisory fees payable (Note 2)..... 937 810 603 150
Accrued organization costs................................... 43 43 39 43
Other liabilities............................................ 361 16 401 168
--------- ---------- --------- --------
TOTAL LIABILITIES........................................ 41,434 16,659 3,341 9,216
--------- ---------- --------- --------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL INTERESTS......... $ 866,481 $ 997,899 $ 325,065 $185,558
========= ========== ========= ========
</TABLE>
See Accompanying Notes
41
<PAGE> 43
AMR INVESTMENT SERVICES TRUST
STATEMENTS OF OPERATIONS
Six Months Ended April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth and International Limited-Term
Balanced Income Equity Income
Portfolio Portfolio Portfolio Portfolio
-------- ---------- ------------- ------------
(in thousands)
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income......................................... $11,396 $ 1,539 $ 558 $ 6,489
Dividend income (net of foreign taxes of
$415 in International Equity Portfolio)............... 7,873 12,700 3,348 -
Income derived from securities lending, net............. 20 8 15 1
------- -------- ------- --------
TOTAL INVESTMENT INCOME............................. 19,289 14,247 3,921 6,490
------- -------- ------- --------
EXPENSES:
Management and investment advisory fees (Note 2)........ 1,383 1,414 641 230
Custodian fees.......................................... 60 46 145 23
Professional fees....................................... 12 10 9 8
Other................................................... 34 33 18 20
------- -------- ------- --------
TOTAL EXPENSES...................................... 1,489 1,503 813 281
------- -------- ------- --------
NET INVESTMENT INCOME............................... 17,800 12,744 3,108 6,209
------- -------- ------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments................. 32,893 44,500 4,997 (87)
Net realized gain on foreign currency transactions...... - - 332 -
Unrealized appreciation (depreciation) of investments... 27,895 69,593 37,110 (3,662)
Unrealized depreciation of foreign currency contracts
and translations...................................... - - (9,278) -
------- -------- ------- --------
NET GAIN (LOSS) ON INVESTMENTS...................... 60,788 114,093 33,161 (3,749)
------- -------- ------- --------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ $78,588 $126,837 $36,269 $ 2,460
======= ======== ======= ========
</TABLE>
See accompanying notes
42
<PAGE> 44
AMR INVESTMENT SERVICES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth and International Limited-Term
Balanced Income Equity Income
Portfolio Portfolio Portfolio Portfolio
--------- ---------- ------------- ------------
(in thousands)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.............................. $ 17,800 $ 12,744 $ 3,108 $ 6,209
Net realized gain (loss) on investments and foreign
currency transactions............................ 32,893 44,500 5,329 (87)
Net unrealized appreciation (depreciation) of
investments and foreign currency translations.... 27,895 69,593 27,832 (3,662)
--------- -------- --------- --------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS....................................... 78,588 126,837 36,269 2,460
--------- -------- --------- --------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS:
Additions.......................................... 949,639 957,398 317,562 240,462
Reductions......................................... (161,746) (86,336) (28,766) (57,364)
--------- -------- --------- --------
NET INCREASE IN NET ASSETS RESULTING FROM
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS........................................ 787,893 871,062 288,796 183,098
--------- -------- --------- --------
NET INCREASE IN NET ASSETS............................. 866,481 997,899 325,065 185,558
--------- -------- --------- --------
NET ASSETS:
Beginning of period................................ - - - -
--------- -------- --------- --------
END OF PERIOD...................................... $ 866,481 $997,899 $ 325,065 $185,558
========= ======== ========= ========
- ------------------------------------------------------------------------------------------------------------------
SUPPLEMENTARY DATA:
- ------------------------------------------------------------------------------------------------------------------
RATIOS:
Net investment income to average net assets
(annualized)..................................... 4.18% 2.83% 2.23% 6.76%
Expenses to average net assets (annualized)........ 0.35% 0.33% 0.58% 0.31%
Portfolio turnover rate............................ 47% 33% 14% 121%
Average commission rate paid....................... $ 0.0400 $ 0.0398 $ 0.0187 -
</TABLE>
See accompanying notes
43
<PAGE> 45
AMR INVESTMENT SERVICES TRUST
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
AMR Investment Services Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended, as a no-load, open-end, management
investment company which was organized as a trust under the laws of the State of
New York pursuant to a Declaration of Trust dated as of June 27, 1995 and
amended on August 11, 1995. Beneficial interests in the Trust are divided into
seven separate series, each having distinct investment objectives and policies,
as follows: AMR Investment Services Balanced Portfolio, AMR Investment Services
Growth and Income Portfolio, AMR Investment Services International Equity
Portfolio, AMR Investment Services Limited-Term Income Portfolio, AMR Investment
Services Money Market Portfolio, AMR Investment Services Municipal Money Market
Portfolio, and AMR Investment Services U.S. Treasury Money Market Portfolio.
These financial statements and notes to the financial statements relate to the
Balanced, Growth and Income, International Equity and Limited-Term Income
Portfolios (each a "Portfolio" and collectively the "Portfolios"). The assets of
each Portfolio belong only to that Portfolio, and the liabilities of each
Portfolio are borne solely by that Portfolio and no other. The Trust commenced
active operations on November 1, 1995.
AMR Investment Services, Inc. (the "Manager") is a wholly-owned subsidiary
of AMR Corporation, the parent company of American Airlines, Inc. ("American"),
and was organized in 1986 to provide business management, advisory,
administrative and asset management consulting services.
The following is a summary of the significant accounting policies followed
by the Portfolios.
Security Valuation
Equity securities that are primarily traded on domestic securities
exchanges are valued at the last quoted sales price on a designated exchange
prior to the close of trading on the New York Stock Exchange (the "Exchange")
or, lacking any current sales, on the basis of the last current bid price prior
to the close of trading on the Exchange. Portfolio securities that are primarily
traded on foreign securities exchanges are generally valued at the preceding
closing values of such securities on their respective exchanges where primarily
traded. However, events may occur which affect the values of such securities and
the exchange rates between the time of valuation and the close of the Exchange.
Should events materially affect the value of such securities during this period,
the securities are priced at fair value, as determined in good faith and
pursuant to procedures approved by the Board of Trustees (the "Board").
Over-the-counter equity securities are valued on the basis of the last bid price
on that date prior to the close of trading. Debt securities (other than
short-term securities) normally will be valued on the basis of prices provided
by a pricing service and may take into account appropriate factors such as
institution-size trading in similar groups of securities, yield, quality, coupon
rate, maturity, type of issue, trading characteristics and other market data. In
some cases, the prices of debt securities may be 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 Board. Investment grade short-term obligations with
60 days or less to maturity are valued using the amortized cost method.
44
<PAGE> 46
AMR INVESTMENT SERVICES TRUST
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
(Unaudited) (Continued)
- --------------------------------------------------------------------------------
Security Transactions and Investment Income
Security transactions are recorded on the trade date of the security
purchase or sale. Dividend income 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 Portfolios. Interest income is earned from
settlement date, recorded on the accrual basis, and adjusted, if necessary, for
amortization of premiums or accretion of discounts on investment grade
short-term securities and zero coupon instruments. For financial and tax
reporting purposes, realized gains and losses are determined on the basis of
specific lot identification.
Currency Translation
All assets and liabilities initially expressed in foreign currency values
are converted into U.S. dollar values at the bid price of such currencies
against U.S. dollars as last quoted by a recognized dealer. Income and expenses
and purchases and sales of investments are translated into U.S. dollars at the
rate of exchange prevailing on the respective dates of such transactions. The
Portfolios include that portion of the results of operations resulting from
changes in foreign exchange rates with net realized and unrealized gain on
investments, as appropriate.
Forward Foreign Currency Contracts
The International Equity Portfolio may enter into forward foreign currency
contracts to hedge the exchange rate risk on investment transactions or to hedge
the value of portfolio securities denominated in foreign currencies. Forward
foreign currency contracts are valued at the forward exchange rate prevailing on
the day of valuation.
Federal Income and Excise Taxes
The Portfolios will be treated as partnerships for federal income tax
purposes. As such, each investor in a Portfolio will be taxed on its share of
the Portfolio's ordinary income and capital gains. It is intended that each
Portfolio's assets will be managed in such a way that an investor in the
Portfolio will be able to satisfy the requirements of sub-chapter M of the
Internal Revenue Code. Accordingly, no provision for United States federal
income or excise tax is necessary.
Deferred Organization Expenses
Expenses incurred by a Portfolio in connection with its organization are
being amortized on a straight-line basis over a five-year period.
2. TRANSACTIONS WITH AFFILIATES
Management Agreement
The Trust and the Manager are parties to a Management Agreement which
obligates the Manager to provide or oversee the provision of all administrative,
investment advisory and portfolio management services. Investment assets of the
Balanced, Growth and Income, and International Equity Portfolios are
45
<PAGE> 47
AMR INVESTMENT SERVICES TRUST
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
(Unaudited) (Continued)
- --------------------------------------------------------------------------------
managed by multiple investment advisers which have entered into separate
investment advisory agreements with the Manager. The Manager serves as the sole
investment adviser to the Limited-Term Income Portfolio. As compensation for
performing the duties required under the Management Agreement, the Manager
receives from the Portfolios an annualized fee equal to .25% of the average
daily net assets of the Limited-Term Income Portfolio and .10% of the average
daily net assets of the Balanced, Growth and Income, and International Equity
Portfolios. In addition, the Manager is reimbursed by the Portfolios for fees
paid to investment advisers hired by the Manager to direct investment activities
of the Balanced, Growth and Income and International Equity Portfolios.
Other
Certain officers or trustees of the Trust are also officers of the Manager
or American. The Trust makes no direct payments to its officers. Unaffiliated
trustees and their spouses are provided unlimited air transportation on
American. However, the Trust compensates each Trustee with payments in an amount
equal to the Trustee's income tax on the value of this free airline travel. For
the period ended April 30, 1996, the cost of air transportation was not material
to any of the Portfolios.
3. INVESTMENT TRANSACTIONS
Investment transactions for the period ended April 30, 1996 (excluding
short-term investments) are as follows (in thousands):
<TABLE>
<CAPTION>
Growth and International Limited-Term
Balanced Income Equity Income
Portfolio Portfolio Portfolio Portfolio
-------- ---------- ------------- ------------
<S> <C> <C> <C> <C>
Purchases....................................................... $414,722 $376,577 $57,524 $219,080
Proceeds from sales............................................. $390,234 $278,427 $36,049 $231,039
</TABLE>
4. COMMITMENTS
In order to protect itself against a decline in the value of particular
foreign currencies against the U.S. dollar, the International Equity Portfolio
has entered into forward contracts to deliver foreign currency in exchange for
U.S. dollars as described below. The Portfolio bears the market risk that arises
from changes in foreign exchange rates, and accordingly, the unrealized gain
(loss) on these contracts is reflected in the accompanying financial statements.
The Portfolio also bears the credit risk if the
46
<PAGE> 48
AMR INVESTMENT SERVICES TRUST
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
(Unaudited) (Continued)
- --------------------------------------------------------------------------------
counterparty fails to perform under the contract. At April 30, 1996, the
Portfolio had outstanding forward foreign currency contracts as follows:
<TABLE>
<CAPTION> Settlement Unrealized
Contracts to Sell Date Value Gain (Loss)
- ----------------------------------------------------------------------- ----------- --------- -------------
(amounts in thousands)
<S> <C> <C> <C> <C>
1,800 DEM.................................................... 8/9/96 $ 1,183 $ 110
7,000 DEM.................................................... 8/9/96 4,601 239
13,000 SEK.................................................... 9/16/96 1,910 (13)
8,000 FRF.................................................... 10/11/96 1,560 35
303,456 JPY.................................................... 10/11/96 2,962 238
2,750 NLG.................................................... 11/14/96 1,630 139
3,900 NLG.................................................... 11/14/96 2,312 209
300,000 ESP.................................................... 12/2/96 2,332 32
195,000 JPY.................................................... 12/20/96 1,917 93
------- ------
Total contracts to sell
(Receivable amount $21,489)............................................ $20,407 $ 1,082
======= ======
</TABLE>
5. SECURITIES LENDING
The Portfolios participate in a securities lending program under which
securities are loaned to selected institutional investors for a fee. All such
loans require collateralization with cash, securities of the U.S. Government and
its agencies or letters of credit that at all times equal at least 100% of the
market value of the loaned securities plus accrued interest. At April 30, 1996,
securities with a market value of approximately $73,747,000 $132,361,000,
$6,209,000 and $9,860,000 were loaned by the Balanced, Growth and Income,
International Equity and Limited-Term Income Portfolios, respectively. The
non-cash collateral for these loans totaled $24,462,000, $15,329,000,
$6,896,000, and $3,876,000, respectively and the cash collateral for these loans
totaled $51,888,000, $121,353,000, and $6,220,000, for the Balanced, Growth and
Income and Limited-Term Income Portfolios, respectively.
47
<PAGE> 49
[AMERICAN AADVANTAGE FUNDS(R) LOGO]
- Institutional Class -
P.O. Box 619003
Dallas/Fort Worth Airport, Texas
75261-9003
(817) 967-3509
- PlanAhead Class -(sm)
P.O. Box 4580
Chicago, Illinois 60680-4580
(800) 231-4252
- AMR Class -(sm)
P.O. Box 619003
Dallas/Fort Worth Airport, Texas
75261-9003
(817) 967-3509
