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PROSPECTUS W I L S H I R E MARCH 1, 1998
AMERICAN AADVANTAGE MONEY MARKET FUND-PLANAHEAD CLASS
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THIS PROSPECTUS contains important information about the PLANAHEAD CLASS OF
THE AMERICAN AADVANTAGE MONEY MARKET FUND(SM) ("Fund"), an investment portfolio
of the American AAdvantage Funds ("Trust") an open-end management investment
company. THE FUND SEEKS INCOME, LIQUIDITY AND THE MAINTENANCE OF A STABLE $1.00
PRICE PER SHARE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE MONEY MARKET
PORTFOLIO ("PORTFOLIO") OF THE AMR INVESTMENT SERVICES TRUST ("AMR TRUST") WHICH
IN TURN INVESTS IN HIGH QUALITY, SHORT-TERM OBLIGATIONS. The investment
experience of the Fund will correspond directly with the investment experience
of the Portfolio. Under a master-feeder operating structure, the Fund seeks its
investment objective by investing all of its investable assets in the Portfolio
as described above. The Portfolio's investment objective is identical to that of
the Fund. Whenever the phrase "all of the Fund's investable assets" is used, it
means that the only investment securities that will be held by the Fund will be
the Fund's interest in the Portfolio. AMR Investment Services, Inc. ("Manager")
provides investment management and administrative services to the Portfolio and
administrative services to the Fund. This master-feeder operating structure is
different from that of many other investment companies which directly acquire
and manage their own portfolios of securities. Accordingly, investors should
carefully consider this investment approach. See "Investment Objectives,
Policies and Risks -- Additional Information About the Portfolio." The Fund may
withdraw its investment in the Portfolio at any time if the Trust's Board of
Trustees ("Board") determines that it would be in the best interest of the Fund
and its shareholders to do so. Upon any such withdrawal, the Fund's assets would
be invested in accordance with the investment policies and restrictions
described in this Prospectus and the SAI.
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The Fund consists of multiple classes of shares designed to meet the needs
of different groups of investors. PlanAhead Class shares are available to all
investors, including smaller institutional investors, investors using
intermediary organizations such as discount brokers or plan sponsors, individual
retirement accounts, and self-employed individual retirement plans. Prospective
PlanAhead Class investors should read this Prospectus carefully before making an
investment decision and retain it for future reference.
IN ADDITION TO THIS PROSPECTUS, a Statement of Additional Information
("SAI") dated March 1, 1998 has been filed with the Securities and Exchange
Commission and is incorporated herein by reference. The SAI contains more
detailed information about the Funds. For a free copy of the SAI, call (800)
388-3344.
The Securities and Exchange Commission maintains a Web Site
(http://www.sec.gov) that contains the SAI, material incorporated by reference
and other information regarding the Funds and the Portfolios.
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An investment in the Money Market Fund is neither insured nor guaranteed by
the U.S. Government and there can be no assurance that it will be able to
maintain a stable price of $1.00 per share.
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TABLE OF CONTENTS PAGE
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Table of Fees and Expenses............ 2
Financial Highlights.................. 3
Introduction.......................... 4
Investment Objective, Policies and
Risks............................... 4
Investment Restrictions............... 8
Yields and Total Returns.............. 9
Management and Administration of the
Trusts.............................. 9
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<TABLE>
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TABLE OF CONTENTS PAGE
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How to Purchase Shares................ 11
How to Redeem Shares.................. 12
Retirement Accounts................... 13
Exchange Privilege.................... 14
Valuation of Shares................... 14
Dividends and Tax Matters............. 14
General Information................... 15
Shareholder Communications............ 16
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY SUCH STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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TABLE OF FEES AND EXPENSES
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MONEY
MARKET
FUND
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ANNUAL OPERATING EXPENSES
(as a percentage of average net assets):
Management Fees........................................ 0.15%
12b-1 Fees............................................. 0.00
Other Expenses......................................... 0.43
====
Total Operating Expenses............................... 0.58%
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The above expenses reflect the expenses of the Fund and the Portfolio. The
Board believes that the aggregate per share expenses of the Fund and the
Portfolio will be approximately equal to the expenses that the Fund would incur
if its assets were invested directly in the type of securities held by the
Portfolio.
EXAMPLES
A PlanAhead Class investor in the Fund would directly or indirectly pay on
a cumulative basis the following expenses on a $1,000 investment assuming a 5%
annual return:
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1 Year...................................................... $ 6
3 Years..................................................... $19
5 Years..................................................... $32
10 Years.................................................... $73
</TABLE>
The purpose of the table above is to assist a potential investor in
understanding the various costs and expenses to be incurred directly or
indirectly as a shareholder in the PlanAhead Class of the Fund. Additional
information may be found under "Management and Administration of the Trusts."
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THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN AND PERFORMANCE MAY BE BETTER OR WORSE THAN THE 5% ANNUAL RETURN
ASSUMED IN THE EXAMPLE.
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FINANCIAL HIGHLIGHTS
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The financial highlights in the following table have been derived from
financial statements of the Trust. The information has been audited by Ernst &
Young LLP, independent auditors. Such information should be read in conjunction
with the financial statements and the report of the independent auditors
appearing in the Annual Report incorporated by reference in the SAI, which
contains further information about performance of the Fund and can be obtained
by investors without charge.
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(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
MONEY MARKET FUND
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PLANAHEAD CLASS INSTITUTIONAL CLASS
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YEAR ENDED OCTOBER 31, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------------- OCTOBER 31, -----------------------
1997 1996 1995 1994(1) 1994 1993
------- ------- ------- ------------ ---------- ----------
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Net asset value, beginning
of period.................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------ ---------- ----------
Net investment income....... 0.05(2) 0.05(2) 0.05 0.01 0.04 0.03
Less dividends from net
investment income.......... (0.05) (0.05) (0.05) (0.01) (0.04) (0.03)
------- ------- ------- ------ ---------- ----------
Net asset value, end of
period..................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ====== ========== ==========
Total return (annualized)... 5.28% 5.21% 5.60% 3.73%(3) 3.85% 3.31%
======= ======= ======= ====== ========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands)........... $189,189 $106,890 $41,989 $25 $1,893,144 $2,882,974
Ratios to average net
assets(4)(5)(6):
Expenses................. 0.54%(2) 0.58%(2) 0.55% 0.70% 0.21% 0.23%
Net investment income.... 5.17%(2) 5.06%(2) 5.56% 4.42% 3.63% 3.23%
<CAPTION>
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
MONEY MARKET FUND
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INSTITUTIONAL CLASS
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YEAR ENDED OCTOBER 31,
------------------------------------------------------
1992 1991(1) 1990 1989 1988
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Net asset value, beginning
of period.................. $1.00 $1.00 $1.00 $1.00 $1.00
---------- -------- -------- -------- --------
Net investment income....... 0.04 0.07 0.08 0.09 0.08
Less dividends from net
investment income.......... (0.04) (0.07) (0.08) (0.09) (0.08)
---------- -------- -------- -------- --------
Net asset value, end of
period..................... $1.00 $1.00 $1.00 $1.00 $1.00
========== ======== ======== ======== ========
Total return (annualized)... 4.41% 7.18% 8.50% 9.45% 7.54%
========== ======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands)........... $2,223,829 $715,280 $745,405 $385,916 $330,230
Ratios to average net
assets(4)(5)(6):
Expenses................. 0.26% 0.24% 0.20% 0.22% 0.28%
Net investment income.... 4.06% 6.93% 8.19% 9.11% 7.54%
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(1) The Money Market Fund commenced active operations on September 1, 1987 and
on November 1, 1991, the existing shares of the Fund were designated as
Institutional Class shares. The PlanAhead Class commenced active operations
on August 1, 1994.
(2) The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the Money Market Portfolio.
(3) Total return for the period ended October 31, 1994 reflects Institutional
Class returns from November 1, 1993 through July 31, 1994 and returns of the
PlanAhead Class for the period August 1, 1994 (commencement of operations)
through October 31, 1994. Due to the different expense structures between
the classes, total return for the PlanAhead Class would vary from the
results shown had it been in operation for the entire year.
(4) The method of determining average net assets was changed from a monthly
average to a daily average starting with the year ended October 31, 1992.
(5) Effective October 1, 1990, 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.
(6) Annualized.
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INTRODUCTION
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The Trust is an open-end, diversified management investment company
organized as a Massachusetts business trust on January 16, 1987. The Fund is a
separate investment portfolio of the Trust. The Fund invests all of its
investable assets in the Portfolio, which has an identical investment objective.
The Manager provides the Portfolio with business and asset management services
and it provides the Fund with administrative services. The Fund consists of
multiple classes of shares, including the "PlanAhead Class" which is available
to all investors, including smaller institutional investors, investors using
intermediary organizations such as discount brokers or plan sponsors, individual
retirement accounts ("IRAs"), and self-employed individual retirement plans
("HR-10 Plans" or "Keogh Plans"). For further information about the Funds' other
classes, including eligibility requirements, call (800) 967-9009.
Although each class of shares is designed to meet the needs of different
categories of investors, all classes of the Fund share the same portfolio of
investments and a common investment objective. See "Investment Objective,
Policies and Risks." There is no guarantee that the Fund will achieve its
investment objective. Based on its value, a share of the Fund, regardless of
class, will receive a proportionate share of the investment income and the gains
(losses) earned (or incurred) by the Fund. It also will bear its proportionate
share of expenses that are allocated to the Fund as a whole. However, certain
expenses are allocated separately to each class of shares, thereby affecting the
relative performance of each class.
PlanAhead Class shares are offered without a sales charge at the net asset
value next determined after an investment is received and accepted. Shares will
be redeemed at the next share price calculated after receipt of a redemption
order. See "How to Purchase Shares" and "How to Redeem Shares."
INVESTMENT OBJECTIVE, POLICIES AND RISKS
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The investment objective and policies of the Fund and the Portfolio are
described below. Except as otherwise indicated, the investment policies of the
Fund may be changed at any time by the Board to the extent that such changes are
consistent with its investment objective. However, the Fund's investment
objective may not be changed without a majority vote of the Fund's outstanding
shares, which is defined as the lesser of (a) 67% of the shares of the Fund
present or represented if the holders of more than 50% of the shares are present
or represented at the shareholders' meeting, or (b) more than 50% of the shares
of the Fund (hereinafter, "majority vote"). The Portfolio's investment objective
may not be changed without a majority vote of the Portfolio's interest holders.
The Fund has a fundamental investment policy which allows it to invest all
of its investable assets in the Portfolio. All other fundamental investment
policies and the non-fundamental investment policies of the Fund and the
Portfolio are identical. Therefore, although the following discusses the
investment policies of the Portfolio and the AMR Trust's Board of Trustees ("AMR
Trust Board"), it applies equally to the Fund and the Board.
The Fund's investment objective is to seek current income, liquidity and
the maintenance of a stable $1.00 price per share. The Fund seeks to achieve
these objectives by investing all of its investable assets in the Portfolio,
which invests in high quality, U.S. dollar-denominated short-term obligations
that have been determined by the Manager or the AMR Trust Board to present
minimal credit risks.
The Portfolio may invest in obligations permitted to be purchased under
Rule 2a-7 under the Investment Company Act of 1940 ("1940 Act") including, but
not limited to, (1) obligations of the
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U.S. Government or its agencies or instrumentalities; (2) loan participation
interests, medium-term notes, funding agreements and asset-backed securities;
(3) domestic, Yankeedollar and Eurodollar certificates of deposit, time
deposits, bankers' acceptances, commercial paper, bank deposit notes and other
promissory notes, including floating or variable rate obligations issued by U.S.
or foreign bank holding companies and their bank subsidiaries, branches and
agencies; and (4) repurchase agreements involving the obligations listed above.
The Portfolio will invest only in issuers or instruments that at the time of
purchase (1) have received the highest short-term rating by two nationally
recognized statistical rating organizations ("Rating Organizations") such as
"A-1" by Standard & Poor's and "P-1" by Moody's; (2) are single rated and have
received the highest short-term rating by a Rating Organization; or (3) are
unrated, but are determined to be of comparable quality by the Manager pursuant
to guidelines approved by the AMR Trust Board and subject to ratification by the
AMR Trust Board. See the SAI for definitions of the foregoing instruments and
rating systems. The Portfolio may invest in other investment companies.
The Portfolio also may purchase or sell securities on a when-issued or
forward commitment basis. The purchase or sale of when-issued securities enables
an investor to hedge against anticipated changes in interest rates and prices by
locking in an attractive price or yield. The price of when-issued securities is
fixed at the time the commitment to purchase or sell is made, but delivery and
payment for the when-issued securities take place at a later date, normally one
to two months after the date of purchase. During the period between purchase and
settlement, no payment is made by the purchaser to the issuer and no interest
accrues to the purchaser. Such transactions therefore involve a risk of loss if
the value of the security to be purchased declines prior to the settlement date
or if the value of the security to be sold increases prior to the settlement
date. A sale of a when-issued security also involves the risk that the other
party will be unable to settle the transaction. Purchases and sales of
securities on a forward commitment basis involve a commitment to purchase or
sell securities with payment and delivery to take place at some future date,
normally one to two months after the date of the transaction. As with when-
issued securities, these transactions involve certain risks, but they also
enable an investor to hedge against anticipated changes in interest rates and
prices. Forward commitment transactions are executed for existing obligations,
whereas in a when-issued transaction, the obligations have not yet been issued.
When purchasing securities on a when-issued or forward commitment basis, a
segregated account of liquid assets at least equal to the value of purchase
commitments for such securities will be maintained until the settlement date.
The Portfolio will invest more than 25% of its assets in obligations issued
by the banking industry. However, for temporary defensive purposes during
periods when the Manager believes that maintaining this concentration may be
inconsistent with the best interest of shareholders, the Portfolio may not
maintain this concentration.
Investments in Eurodollar (U.S. dollar obligations issued outside the
United States by domestic or foreign entities) and Yankeedollar (U.S. dollar
obligations issued inside the United States by foreign entities) obligations
involve additional risks. Most notably, there generally is less publicly
available information about foreign issuers; there may be less governmental
regulation and supervision; foreign issuers may use different accounting and
financial standards; and the adoption of foreign governmental restrictions may
affect adversely the payment of principal and interest on foreign investments.
In addition, not all foreign branches of United States banks are supervised or
examined by regulatory authorities as are United States banks, and such branches
may not be subject to reserve requirements.
Variable amount master demand notes in which the Portfolio may invest are
unsecured demand notes that permit the indebtedness thereunder to vary, and
provide for periodic adjustments in the interest rate. Because master demand
notes are direct lending arrangements between the Portfolio and the issuer, they
are not normally publicly traded. There is no secondary market for the notes;
however, the period of time remaining until pay-
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ment of principal and accrued interest can be recovered under a variable amount
master demand note generally will not exceed seven days. To the extent this
period is exceeded, the note in question would be considered illiquid. Issuers
of variable amount master demand notes must satisfy the same criteria as set
forth for other promissory notes (e.g. commercial paper). The Portfolio will
invest in variable amount master demand notes only when such notes are
determined by the Manager, pursuant to guidelines established by the AMR Trust
Board, to be of comparable quality to rated issuers or instruments eligible for
investment by the Portfolio. In determining average dollar weighted portfolio
maturity, a variable amount master demand note will be deemed to have a maturity
equal to the longer of the period of time remaining until the next readjustment
of the interest rate or the period of time remaining until the principal amount
can be recovered from the issuer on demand.
Portfolio investments are valued based on the amortized cost valuation
technique pursuant to Rule 2a-7 under the 1940 Act. See the SAI for an
explanation of the amortized cost valuation method. Obligations in which the
Portfolio invests generally have remaining maturities of 397 days or less,
although instruments subject to repurchase agreements and certain variable and
floating rate obligations may bear longer final maturities. The average
dollar-weighted portfolio maturity of the Portfolio will not exceed 90 days. See
"Management and Administration of the Trusts."
OTHER INVESTMENT POLICIES -- In addition to the investment policies described
previously, the Portfolio also may lend its securities, enter into fully
collateralized repurchase agreements and invest in private placement offerings.
SECURITIES LENDING. The Portfolio may lend securities to broker-dealers or
other institutional investors pursuant to agreements requiring that the loans be
continuously secured by any combination of cash, securities of the U.S.
Government and its agencies and instrumentalities and approved bank letters of
credit that at all times equal at least 100% of the market value of the loaned
securities. Such loans will not be made if, as a result, the aggregate amount of
all outstanding securities loans by the Portfolio would exceed 33 1/3% of its
total assets (including the market value of collateral received). The Portfolio
continues to receive interest on the securities loaned and simultaneously earns
either interest on the investment of the cash collateral or fee income if the
loan is otherwise collateralized. Should the borrower of the securities fail
financially, there is a risk of delay in recovery of the securities loaned or
loss of rights in the collateral. However, the Portfolio seeks to minimize this
risk by making loans only to borrowers which are deemed by the Manager to be of
good financial standing and which have been approved by the AMR Trust Board. For
purposes of complying with the Portfolio's investment policies and restrictions,
collateral received in connection with securities loans will be deemed an asset
of the Portfolio to the extent required by law. The Manager will receive
compensation for administrative and oversight functions with respect to
securities lending. The amount of such compensation will depend on the income
generated by the loan of the Portfolio's securities. The SEC has granted
exemptive relief that permits the Portfolio to invest cash collateral received
from securities lending transactions in shares of one or more private investment
companies managed by the Manager. Subject to receipt of exemptive relief from
the SEC, the Portfolio also may invest cash collateral received from securities
lending transactions in shares of one or more registered investment companies
managed by the Manager. See the SAI for further information regarding loan
transactions.
REPURCHASE AGREEMENTS. A repurchase agreement is an agreement under which
securities are acquired by the Portfolio from a securities dealer or bank
subject to resale at an agreed upon price on a later date. The Portfolio bears a
risk of loss in the event that the other party to a repurchase agreement
defaults on its obligations and the Portfolio is delayed or prevented from
exercising its rights to dispose of the collateral securities. However, the
Manager attempts to minimize this risk by entering into repurchase agreements
only with financial institutions which are deemed to be of good financial
standing and which have been approved by the AMR Trust Board. See the SAI
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for more information regarding repurchase agreements.
PRIVATE PLACEMENT OFFERINGS. Investments in private placement offerings are
made in reliance on the "private placement" exemption from registration afforded
by Section 4(2) of the Securities Act of 1933 (the "1933 Act"), and resold to
qualified institutional buyers under Rule 144A under the 1933 Act ("Section 4(2)
securities"). Section 4(2) securities are restricted as to disposition under the
federal securities laws, and generally are sold to institutional investors, such
as the Portfolio, that agree they are purchasing the securities for investment
and not with an intention to distribute to the public. Any resale by the
purchaser must be pursuant to an exempt transaction and may be accomplished in
accordance with Rule 144A. Section 4(2) securities normally are resold to other
institutional investors such as the Portfolio through or with the assistance of
the issuer or dealers that make a market in the Section 4(2) securities, thus
providing liquidity. The Portfolio will not invest more than 10% of its net
assets in Section 4(2) securities and illiquid securities unless the investment
adviser determines, by continuous reference to the appropriate trading markets
and pursuant to guidelines approved by the AMR Trust Board, that any Section
4(2) securities held by the Portfolio in excess of this level are at all times
liquid.
The AMR Trust Board and the Manager, pursuant to the guidelines approved by
the AMR Trust Board, will carefully monitor the Portfolio's investments in
Section 4(2) securities offered and sold under Rule 144A, focusing on such
important factors, among others, as: valuation, liquidity, and availability of
information. Investments in Section 4(2) securities could have the effect of
reducing the Portfolio's liquidity to the extent that qualified institutional
buyers no longer wish to purchase these restricted securities.
BROKERAGE PRACTICES -- The Portfolio normally will not incur any brokerage
commissions on its transactions because money market and debt instruments are
generally traded on a "net" basis with dealers acting as principal for their own
accounts and without a stated commission. The price of the obligation, however,
usually includes a profit to the dealer. Obligations purchased in underwritten
offerings include a fixed amount of compensation to the underwriter, generally
referred to as the underwriter's concession or discount. No commissions or
discounts are paid when securities are purchased directly from an issuer.
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO -- As previously described, investors
should be aware that the Fund, unlike mutual funds that directly acquire and
manage their own portfolios of securities, seeks to achieve its investment
objective by investing all of its investable assets in the Portfolio, which is a
separate investment company. Since the Fund will invest only in the Portfolio,
the Fund's shareholders will acquire only an indirect interest in the
investments of the Portfolio.
The Manager expects, although it cannot guarantee, that the Trust will
achieve economies of scale by investing in the AMR Trust. In addition to selling
its interests to the Fund, the Portfolio sells its interests to other
non-affiliated investment companies and/or other institutional investors. All
institutional investors in the Portfolio pay a proportionate share of the
Portfolio's expenses and invest in the Portfolio on the same terms and
conditions. However, other investment companies investing all of their assets in
the Portfolio are not required to sell their shares at the same public offering
price as the Fund and are allowed to charge different sales commissions.
Therefore, investors in the Fund may experience different returns from investors
in another investment company that invests exclusively in the Portfolio.
The Fund's investment in the Portfolio may be affected materially by the
actions of large investors in the Portfolio, if any. For example, as with all
open-end investment companies, if a large investor were to redeem its interest
in the Portfolio, the Portfolio's remaining investors could experience higher
pro rata operating expenses, thereby producing lower returns. As a result, the
Portfolio's security holdings may become less diverse, resulting in increased
risk. Institutional investors in the Portfolio that have a greater pro rata
ownership
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interest in the Portfolio than the Fund could have effective voting control over
the operation of the Portfolio. A change in the Portfolio's fundamental
objective, policies and restrictions, that is not approved by the shareholders
of the Fund could require the Fund to redeem its interest in the Portfolio. Any
such redemption could result in a distribution in kind of portfolio securities
(as opposed to a cash distribution) by the Portfolio. Should such a distribution
occur, the Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments for the Fund and could
affect its liquidity adversely.
The Portfolio's and Fund's investment objectives and policies are described
above. See "Investment Restrictions" for a description of their investment
restrictions. The investment objective of the Fund can be changed only with
shareholder approval. The approval of the Fund and of other investors in the
Portfolio, if any, is not required to change the investment objective, policies
or limitations of the Portfolio, unless otherwise specified. Written notice will
be provided to shareholders of the Fund within thirty days prior to any changes
in the Portfolio's investment objective. If the investment objective of the
Portfolio changes and the shareholders of the Fund do not approve a parallel
change in the Fund's investment objective, the Fund would seek an alternative
investment vehicle or the Manager would actively manage the Fund.
See "Management and Administration of the Trusts" for a complete
description of the investment management fee and other expenses associated with
the Fund's investment in the Portfolio. This Prospectus and the SAI contain more
detailed information about the Fund and the Portfolio, including information
related to (1) the investment objective, policies and restrictions of the Fund
and the Portfolio, (2) the Board of Trustees and officers of the Trust and the
AMR Trust, (3) brokerage practices, (4) the Fund's shares, including the rights
and liabilities of its shareholders, (5) additional performance information,
including the method used to calculate yield and total return, and (6) the
determination of the value of the Fund's shares.
INVESTMENT RESTRICTIONS
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The following fundamental investment restrictions and the non-fundamental
investment restriction are identical for the Fund and the Portfolio. Therefore,
although the following discusses the investment restrictions of the Portfolio,
it applies equally to the Fund. The following fundamental investment
restrictions may be changed with respect to the Fund by the majority vote of the
Fund's outstanding shares or with respect to the Portfolio by the majority vote
of the Portfolio's interest holders. The Portfolio may not:
- Invest more than 5% of its total assets (taken at market value) in
securities of any one issuer, other than obligations issued by the U.S.
Government, its agencies and instrumentalities, or purchase more than 10%
of the voting securities of any one issuer, with respect to 75% of the
Portfolio's total assets. In addition, although not a fundamental
investment restriction and therefore subject to change without
shareholder vote, the Portfolio applies this restriction with respect to
100% of its assets.
- Except for the banking industry, invest more than 25% of its total assets
in the securities of companies primarily engaged in any one industry,
provided that: (i) this limitation does not apply to obligations issued
or guaranteed by the U.S. Government, its agencies and instrumentalities;
(ii) municipalities and their agencies and authorities are not deemed to
be industries; and (iii) financial service companies are classified
according to the end users of their services (for example, automobile
finance, bank finance, and diversified finance will be considered
separate industries).
The following non-fundamental investment restriction may be changed with
respect to the Fund
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by a vote of a majority of the Board or with respect
to the Portfolio by a vote of a majority of the AMR Trust Board: the Portfolio
may not invest more than 10% of its net assets in illiquid securities, including
time deposits and repurchase agreements that mature in more than seven days.
The above percentage limits are based upon asset values at the time of the
applicable transaction; accordingly, a subsequent change in asset values will
not affect a transaction that was in compliance with the investment restrictions
at the time such transaction was effected. See the SAI for other investment
limitations.
YIELDS AND TOTAL RETURNS
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From time to time each class of the Fund may advertise its "current yield"
and "effective yield." Both yield figures are based on historical earnings and
are not intended to indicate future performance. The current yield refers to the
investment income generated over a seven calendar-day period (which period will
be stated in the advertisement). This yield is then annualized by assuming the
amount of investment income generated during that week is earned each week over
a one-year period and is shown as a percentage of the investment. The effective
yield is calculated similarly but, when annualized, the investment income earned
is assumed to be reinvested. The effective yield will be slightly higher than
the current yield because of the compounding effect of this assumed
reinvestment. Each class of the Fund has different expenses which will impact
its performance.
Total return quotations advertised by the Fund may reflect the average
annual compounded (or aggregate compounded) rate of return during the designated
time period based on a hypothetical initial investment and the redeemable value
of that investment at the end of the period. The Fund will at times compare its
performance to applicable published indices, and also may disclose its
performance as ranked by certain ranking entities. See the SAI for more
information about the calculation of yields and total returns.
MANAGEMENT AND ADMINISTRATION
OF THE TRUSTS
- --------------------------------------------------------------------------------
FUND MANAGEMENT AGREEMENT -- The Board has general supervisory responsibility
over the Trust's affairs, while the business affairs of the AMR Trust are
subject to the supervision of the AMR Trust Board. The Manager provides or
oversees all administrative, investment advisory and portfolio management
services for the Trust pursuant to a Management Agreement dated April 3, 1987,
as amended July 25, 1997, together with the Administrative Services Agreement
described below. The AMR Trust and the Manager also entered into a Management
Agreement dated October 1, 1995, as amended July 25, 1997, that obligates the
Manager to provide or oversee all administrative, investment advisory and
portfolio management services for the AMR Trust. The Manager, located at 4333
Amon Carter Boulevard, MD 5645, Fort Worth, Texas 76155, is a wholly owned
subsidiary of AMR Corporation ("AMR"), the parent company of American Airlines,
Inc., and was organized in 1986 to provide investment management, advisory,
administrative and asset management consulting services. The Manager serves as
the sole active investment adviser to the Portfolio. As of December 31, 1997,
the Manager had assets under management totaling approximately $18.4 billion
including approximately $6.1 billion under active management and $12.3 billion
as named fiduciary or fiduciary adviser. Of the total, approximately $14.2
billion of assets are related to AMR. American Airlines, Inc. is not responsible
for investments made in the American AAdvantage Funds.
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<PAGE> 10
The Manager provides the Trusts with office space, office equipment and
personnel necessary to manage and administer the Trusts' operations. This
includes complying with reporting requirements; corresponding with shareholders;
maintaining internal bookkeeping, accounting and auditing services and records;
and supervising the provision of services to the Trusts by third parties. The
Manager oversees the Portfolio's participation in securities lending activities
and any actions taken by the securities lending agent in connection with those
activities to ensure compliance with all applicable regulatory and investment
guidelines.
Except as otherwise provided below, the Manager bears the expense of
providing the above services. As compensation for providing the Portfolio with
advisory and asset allocation services, the Manager receives from the AMR Trust
an annualized advisory fee that is calculated and accrued daily, equal to 0.15%
of the net assets of the Portfolio. The advisory fee is payable quarterly in
arrears. To the extent that the Fund invests all of its investable assets in the
Portfolio, the Manager will not receive an advisory fee under its Management
Agreement with the Trust. The Manager receives compensation in connection with
securities lending activities. If the Portfolio lends its portfolio securities
and receives cash collateral from the borrower, the Manager may receive up to
25% of the net annual interest income (the gross interest earned by the
investment less the amount paid to the borrower as well as related expenses)
received from the investment of such cash. If a borrower posts collateral other
than cash, the borrower will pay to the lender a loan fee. The Manager may
receive up to 25% of the loan fees posted by borrowers. In addition, the Manager
is compensated through the Administrative Services Agreement as described below
for other services provided.
Each Management Agreement will continue in effect provided that annually
such continuance is specifically approved by a vote of the Board and the AMR
Trust Board, including the affirmative votes of a majority of the Trustees of
each Board who are not parties to the Management Agreement or "interested
persons" as defined in the 1940 Act of any such party ("Independent Trustees"),
cast in person at a meeting called for the purpose of considering such approval,
or by the vote of the Fund's shareholders or the Portfolio's interest holders. A
Management Agreement may be terminated with respect to the Fund or the Portfolio
at any time, without penalty, by a majority vote of outstanding Fund shares or
Portfolio interests on sixty (60) days' written notice to the Manager, or by the
Manager, on sixty (60) days' written notice to the Trust or the AMR Trust. A
Management Agreement will automatically terminate in the event of its
"assignment" as defined in the 1940 Act.
The Trust is responsible for expenses not otherwise assumed by the Manager,
including the following: audits by independent auditors; transfer agency,
custodian, dividend disbursing agent and shareholder recordkeeping services;
taxes, if any, and the preparation of each Fund's tax returns; interest; costs
of Trustee and shareholder meetings; printing and mailing prospectuses and
reports to existing shareholders; fees for filing reports with regulatory bodies
and the maintenance of the Funds' existence; legal fees; fees to federal and
state authorities for the registration of shares; fees and expenses of
Independent Trustees; insurance and fidelity bond premiums; and any
extraordinary expenses of a nonrecurring nature.
A majority of the Independent Trustees of the Board have adopted written
procedures reasonably appropriate to deal with potential conflicts of interest
between the Trust and the AMR Trust.
ADMINISTRATIVE SERVICES AGREEMENT -- The Manager and the Trust entered into an
Administrative Services Agreement which obligates the Manager to provide the
Fund those administrative and management services (other than investment
advisory services) described in the Management Agreement. As compensation for
these services, the Manager receives an annualized fee of 0.05% of the net
assets of the PlanAhead Class of the Fund. The fee is payable quarterly in
arrears.
DISTRIBUTION OF TRUST SHARES -- Shares are distributed through the Fund's
principal underwriter, Brokers Transaction Services, Inc. ("BTS"). BTS is
compensated by the Manager, and not the Trust. The Trust does not incur any
direct distribution expenses relating to the PlanAhead Class. How-
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<PAGE> 11
ever, the Trust has adopted a Distribution Plan in accordance with Rule 12b-1
under the 1940 Act which authorizes the use of any fees received by the Manager
in accordance with the Administrative Services and the Management Agreements to
be used for distribution purposes.
SERVICE PLAN -- The PlanAhead Class has adopted a service plan ("Service Plan")
which provides that it will pay 0.25% per annum of its average daily net assets
to the Manager (or another entity approved by the Board). The Manager or these
approved entities may spend such amounts on any activities or expenses primarily
intended to result in or relate to the servicing of PlanAhead Class shares
including but not limited to payment of shareholder service fees and transfer
agency or sub-transfer agency expenses. The fee, which is included as part of
the Fund's "Other Expenses" in the Table of Fees and Expenses of this
Prospectus, will be payable monthly in arrears without regard to whether the
amount of the fee is more or less than the actual expenses incurred in a
particular month by the entity for the services provided pursuant to the Service
Plan. The primary expenses expected to be incurred under the Service Plan are
transfer agency fees and servicing fees paid to financial intermediaries such as
plan sponsors and discount brokers.
The Service Plan will continue in effect so long as its continuance is
approved at least annually by a majority of the Trustees, including the
affirmative votes of a majority of the Independent Trustees of the Board who are
not parties to the Service Plan cast in person at a meeting called for the
purpose of considering such approval, or by the vote of shareholders. The
Service Plan may be terminated with respect to a particular PlanAhead Class at
any time, without the payment of any penalty, by a vote of a majority of the
Independent Trustees or by a vote of a majority of the outstanding voting
securities of the Fund's PlanAhead Class.
ALLOCATION OF FUND EXPENSES -- Expenses of each Fund generally are allocated
equally among the shares of the Fund, regardless of class. However, certain
expenses approved by the Board will be allocated solely to the class to which
they relate.
PRINCIPAL UNDERWRITER -- BROKERS TRANSACTION SERVICES, INC. ("BTS"), 7001
Preston Road, Dallas, Texas 75205, serves as the principal underwriter of the
Trust.
CUSTODIAN -- STATE STREET BANK & TRUST COMPANY ("State Street"), Boston,
Massachusetts, serves as custodian for the Portfolio and the Fund.
TRANSFER AGENT -- State Street serves as transfer agent and provides transfer
agency services for Fund shareholders through its affiliate NATIONAL FINANCIAL
DATA SERVICES, ("NFDS"), Kansas City, Missouri.
INDEPENDENT AUDITOR -- The independent auditor for the Fund and the AMR Trust is
ERNST & YOUNG LLP, Dallas, Texas.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
Shares are offered on a continuous basis. Purchase orders should be
directed to First Data Investor Services Group either by mail, by pre-
authorized investment or by wire as described below. The minimum initial
purchase for each Fund is $2,500, except for IRA accounts for which a $2,000
minimum applies. The Fund has no obligation to accept purchase requests or
maintain accounts which do not meet minimum purchase requirements. The minimum
for subsequent purchases is $50, except for wire purchases, for which a $500
minimum applies. Shares purchased through financial intermediaries may be
subject to transaction fees. The management of the Fund reserves the right to
waive or change the minimum investment requirements and to charge an annual fee
of $12 (to offset the costs of servicing accounts with low balances) if an
account balance falls below certain asset levels.
Orders to purchase shares of the Fund received by 4:00 p.m. Eastern Time
(or the close of the New York Stock Exchange ("Exchange"), whichever comes first
Monday through Friday, excluding the following business holidays: New Year's
Day, Martin Luther King's Birthday, Presi-
11
<PAGE> 12
dent's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus
Day, Veteran's Day, Thanksgiving Day, and Christmas Day ("Business Day") and
during which federal funds become available to the Fund, will be executed at the
following day's net asset value per share. The Trust reserves the right to
reject any order for the purchase of shares and to limit or suspend, without
prior notice, the offering of shares. "Federal funds" are funds deposited by a
commercial bank in an account at a federal reserve bank that can be transferred
to a similar account of another bank in one day and thus may be made immediately
available to the Fund through its custodian.
OPENING AN ACCOUNT -- A completed and signed application is required for each
new account opened, regardless of the method chosen for making an initial
investment. If assistance is required in filling out the application, or if
extra applications are required, call (888) 200-6796. See "Retirement Accounts"
for information on opening retirement accounts.
PURCHASING BY MAIL -- To open an account by mail, complete the application form,
include a check payable to First Data Investor Services Group ($2,500 minimum or
$2,000 for IRAs) and mail both to:
First Data Investor Services Group
P.O. Box 5170
Westboro, MA 01581-5170
Purchase checks are accepted subject to collection at full face value in
U.S. funds and must be drawn in U.S. dollars on a U.S. bank. For subsequent
purchases by mail make your check payable to First Data Investor Services Group
($50 minimum) and include your account number on your check. Mail to the address
printed above. Include either the detachable form from your account statement or
a letter with the account name and number.
SUBSEQUENT PURCHASES THROUGH THE ACCUMULATION PLAN -- The Accumulation Plan
permits you to purchase Fund shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Shares are purchased by
transferring funds from the bank account you designate. At your option, the bank
account designated by you will be debited in the specified amount, and shares of
the Fund will be purchased once a month on either the first or fifteenth day, or
twice a month on both days. Only an account maintained at a domestic financial
institution which is an Automated Clearing House ("ACH") member may be so
designated. To establish an Accumulation Plan account, call 1-888-200-6796 to
obtain the necessary authorization form. You may cancel your participation in
the Accumulation Plan or change the amount of purchase at any time by mailing
written notification to First Data Investor Services Group, P.O. Box 5170,
Westboro, MA 01581-5170, and the notification will be effective three business
days following receipt. The Fund may modify or terminate this privilege at any
time or charge a fee for this service.
PURCHASES THROUGH ACH -- Subsequent pur-
chases also may be made by electronic transfer of funds from an account
maintained in a bank or other domestic financial institution that is an ACH
member. You must direct the institution to transmit federal funds through ACH to
Boston Safe Deposit and Trust Company with instructions to credit your Fund
account. The instructions must specify your Fund account registration and your
Fund account number.
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
Shares of the Fund may be redeemed by telephone, by pre-authorized
automatic redemption or by mail on any Business Day. Requests for redemption of
shares received by 4:00 p.m. Eastern Time (or the close of the New York Stock
Exchange, whichever comes first) on any Business Day will be processed at the
net asset value determined for the following Business Day. Proceeds from a
redemption of shares purchased by check or pre-authorized automatic purchase may
be withheld until the funds have cleared, which may take up to 15 days. Although
the Fund intends to redeem shares in
12
<PAGE> 13
cash, the Fund reserves the right to pay the redemption price in whole or in
part by a distribution of readily marketable securities held by the Portfolio.
See the SAI for further information concerning redemptions in kind.
Redemption proceeds generally will be sent within one Business Day.
However, if making immediate payment could affect a Fund adversely, it may take
up to seven days to send payment.
A minimum of $2,500 ($2,000 for IRAs) is required in order to maintain an
account in a Fund. Otherwise, a Fund may give a shareholder 60 days' notice to
increase the account balance to this level in order to avoid the imposition of
an account fee or account closure. If a shareholder does not increase the
account balance to $2,500 within the 60 day period, the Fund is entitled to
close the account and mail the proceeds to the address of record.
To ensure timely acceptance of a redemption request, please adhere to the
following procedures.
REDEEMING BY TELEPHONE -- Shares may be redeemed by telephone if your account
application reflects that option. In order to redeem by telephone, you should
call 1-888-200-6796. The maximum amount you may redeem by telephone per day is
$150,000.
By establishing the telephone redemption service, you authorize the Fund or
its agent to act upon verbal instructions to redeem shares for any account for
which such service has been authorized. In an effort to prevent unauthorized or
fraudulent redemption requests by telephone, First Data Investor Services Group
will employ reasonable procedures specified by the Fund to confirm that such
instructions are genuine. For instance, all telephone redemption requests will
be recorded and proceeds of telephone redemption requests will be sent only to
the address or account designated in the application. Neither the Fund, the
Trust, the Manager, NFDS, First Data Investor Services Group, or their trustees,
directors or officers will be liable for any unauthorized or fraudulent
redemption instructions received by telephone. Due to the volume of calls or
other unusual circumstances, telephone redemptions may be difficult to implement
during certain time periods. This service may be amended or terminated at any
time by the First Data Investor Services Group, NFDS or the Trust without prior
notice.
REDEEMING BY MAIL -- Except for certain intermediary accounts, a letter of
instruction may be mailed to the Fund at First Data Investor Services Group,
P.O. Box 5170, Westboro, MA, 01581-5170 to redeem shares. The letter should
specify the Fund, the number of shares or dollar amount to be redeemed, the
shareholder's name and account number. The letter of instruction must be signed
by all persons required to sign for the account, exactly as it is registered.
All redemption requests must be accompanied by a signature guarantee by a
domestic banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations,
or from participants in the New York Stock Exchange Medallion Signature Program
("STAMP") and the Stock Exchange Medallion Program.
FULL REDEMPTIONS -- Unpaid dividends credited to an account up to the date of
redemption of all shares the Fund generally will be paid at the time of
redemption.
RETIREMENT ACCOUNTS
- --------------------------------------------------------------------------------
Individual retirement accounts are eligible investors in the Fund. A
special retirement account application is required in order to open this type of
account. Each shareholder is charged an administrative fee of $20.00 per year
for each retirement account. To receive a retirement account application, or if
you have any questions about establishing this type of account, call (888)
200-6796.
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<PAGE> 14
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
Fund shares may be exchanged into shares of another Fund. Certain
eligibility and investment minimum requirements apply. Shareholders may exchange
shares by sending a written request or by calling (888) 200-6796.
VALUATION OF SHARES
- --------------------------------------------------------------------------------
The net asset value of each share of the Fund is determined as of the close
of the Exchange, generally 4:00 p.m. Eastern time, on each Business Day. The net
asset value of all outstanding shares of the Fund will be determined by
computing the Fund's total assets (which is the value of the Fund's investment
in the Portfolio), subtracting all of the Fund's liabilities, and dividing the
result by the total number of Fund shares outstanding at such time. The net
asset value of shares of the PlanAhead Class will be determined based on a pro
rata allocation of the value of the Portfolio's investment income, expenses and
total capital gains and losses. The allocation will be based on comparative net
asset value at the beginning of the day except for expenses related solely to
one class of shares ("Class Expenses") which will be borne only by the
appropriate class of shares. Because of the Class Expenses, the net income
attributable to and the dividends payable may be different for each class of
shares.
DIVIDENDS AND TAX MATTERS
- --------------------------------------------------------------------------------
Dividends paid on each class of the Fund's shares are calculated at the
same time and in the same manner.
All of the Fund's net investment income and net short-term capital gain, if
any, generally is declared as dividends on each Business Day immediately prior
to the determination of the net asset value. Dividends generally will be paid on
the first day of the following month. The Fund's net investment income
attributable to the PlanAhead Class will consist of (1) that class' pro rata
share of the Fund's share of interest accrued and discount earned on the
Portfolio's securities less amortization of premium and expenses of both the
Portfolio and (2) the Fund's expenses attributable to the PlanAhead Class. The
Portfolio does not expect to realize net capital gain, and, therefore, the Fund
does not foresee paying any capital gain distributions. If the Fund (either
directly or indirectly through the Portfolio) incurs or anticipates any unusual
expenses, loss or depreciation that would affect its net asset value or income
for a particular period adversely, the Board would at that time consider whether
to adhere to the dividend policy described above or to revise it in the light of
the then prevailing circumstances.
Unless a shareholder elects otherwise on the account application, all
dividends and other distributions on the Fund's PlanAhead Class shares will be
automatically paid in additional PlanAhead Class shares of the Fund. However, a
shareholder may choose to have distributions of net capital gain paid in shares
and dividends paid in cash or to have all such distributions and dividends paid
in cash. An election may be changed at any time by delivering written notice
that is received by the transfer agent at least ten days prior to the payment
date for a dividend or other distribution.
The Fund is treated as a separate corporation for federal income tax
purposes and intends to qualify or to continue to qualify for treatment as a
regulated investment company under the Internal Revenue Code of 1986, as
amended. In each taxable year that the Fund so qualifies, the Fund (but not its
shareholders) will be relieved of federal income tax on that part of its
investment company taxable income (generally, net investment income
14
<PAGE> 15
plus any net short-term capital gain) and net capital gain that it distributes
to its shareholders. However, the Fund will be subject to a nondeductible 4%
excise tax to the extent that it fails to distribute by the end of any calendar
year substantially all of its ordinary income for that calendar year and its
capital gain net income for the one-year period ending on October 31 of that
year, plus certain other amounts. For these and other purposes, dividends and
other distributions declared by the Fund in October, November or December of any
year and payable to shareholders of record on a date in one of those months will
be deemed to have been paid by the Fund and received by the shareholders on
December 31 of that year if they are paid by the Fund during the following
January. The Portfolio has received a ruling from the Internal Revenue Service
that it is classified for federal income tax purposes as a partnership;
accordingly, it is not subject to federal income tax.
Dividends from the Fund's investment company taxable income are taxable to
its shareholders as ordinary income to the extent of the Fund's earnings and
profits, whether received in cash or paid in additional Fund shares.
Distributions of a Fund's net capital gain (whether received in cash or paid in
additional Fund shares), when designated as such, generally are taxable to its
shareholders as long-term capital gain, regardless of how long they have held
their Fund shares. A capital gain distribution from a Fund also may be offset by
capital losses from other sources.
The Fund notifies its shareholders following the end of each calendar year
of the amounts of dividends and capital gain distributions paid (or deemed paid)
that year.
The Fund is required to withhold 31% of all taxable dividends payable to
any individuals and certain other non-corporate shareholders who do not provide
the Fund with a correct taxpayer identification number or (except with respect
to redemption proceeds) who otherwise are subject to back-up withholding.
The foregoing is only a summary of some of the important tax considerations
generally affecting the Fund and its shareholders. Prospective investors are
urged to consult their own tax advisers regarding specific questions as to the
effect of federal, state or local income taxes on any investment in the Trust.
For further tax information, see the SAI.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust currently is comprised of ten separate investment portfolios. The
Fund is comprised of three classes of shares, which can be issued in an
unlimited number. Each share represents an equal proportionate beneficial
interest in the Fund and is entitled to one vote. Only shares of a particular
class may vote on matters affecting that class. Only shares of a particular
Portfolio or series may vote on matters affecting that Portfolio or series. All
shares of the Trust vote on matters affecting the Trust as a whole. Share voting
rights are not cumulative, and shares have no preemptive or conversion rights.
Shares of the Trust are nontransferable. Each series in the Trust will not be
involved in any vote involving a Portfolio in which it does not invest its
assets. Shareholders of all of the series of the Trust, however, will vote
together to elect Trustees of the Trust and for certain other matters. Under
certain circumstances, the shareholders of one or more series could control the
outcome of these votes.
On most issues subjected to a vote of the Portfolio's interest holders, as
required by the 1940 Act, the Fund will solicit proxies from its shareholders
and will vote its interest in the Portfolio in proportion to the votes cast by
the Fund's shareholders. Because a Portfolio interest holder's votes are
proportionate to its percentage interests in the Portfolio, one or more other
Portfolio investors could, in certain instances, approve an action against which
a majority of the outstanding voting securities of the Fund had voted. This
could result in the Fund's redeeming its investment in the Portfolio, which
could result in increased expenses for the Fund. Whenever the shareholders of
the Fund are called to vote on matters related to the Portfolio, the
15
<PAGE> 16
Board shall vote shares for which they receive no voting instructions in the
same proportion as the shares for which they do receive voting instructions. Any
information received from the Portfolio in the Portfolio's report to
shareholders will be provided to the shareholders of the Fund.
As a Massachusetts business trust, the Trust is not obligated to conduct
annual shareholder meetings. However, the Trust will hold special shareholder
meetings whenever required to do so under the federal securities laws or the
Trust's Declaration of Trust or By-Laws. Trustees can be removed by a
shareholder vote at special shareholder meetings.
The Manager has taken steps that it believes are reasonably designed to
address the potential failure of computer programs used by the Manager and the
Fund's service providers to address the Year 2000 issue. There can be no
assurance that these steps will be sufficient to avoid any adverse impact.
SHAREHOLDER COMMUNICATIONS
- --------------------------------------------------------------------------------
Shareholders will receive periodic reports, including annual and
semi-annual reports which will include financial statements showing the results
of the Fund's operations and other information. The financial statements of the
Fund will be audited by the independent auditors at least annually. Shareholder
inquiries and requests for information, including a Prospectus, regarding the
other investment companies which also invest in the AMR Trust should be made in
writing to the Funds at P.O. Box 619003, MD5645, Dallas/Fort Worth Airport,
Texas 75261-9003, or by calling (800) 388-3344.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN SALES
LITERATURE SPECIFICALLY APPROVED BY OFFICERS OF THE TRUST FOR USE IN CONNECTION
WITH THE OFFER OF ANY PLANAHEAD CLASS SHARES, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE FUNDS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION
IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
American AAdvantage Funds is a registered service mark of AMR Corporation.
PlanAhead Class is a registered service mark and American AAdvantage Money
Market Fund is a service mark of AMR Investment Services, Inc.
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[WILSHIRE LOGO]
American AAdvantage
Money Market Fund
-PlanAhead Class(R)-
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PROSPECTUS
