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[INTRUST LOGO]
PROSPECTUS
dated March 1, 1999
AMERICAN AADVANTAGE U.S. GOVERNMENT MONEY MARKET FUND (SM)
-PLANAHEAD CLASS(R)-
TABLE OF CONTENTS
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PAGE
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ABOUT THE FUND
OVERVIEW.............................................Front Cover
U.S. GOVERNMENT MONEY MARKET FUND......................... 2
THE MANAGER............................................... 4
VALUATION OF SHARES....................................... 4
ABOUT YOUR INVESTMENT
PURCHASE AND REDEMPTION OF SHARES......................... 5
DISTRIBUTIONS AND TAXES................................... 9
ADDITIONAL INFORMATION
DISTRIBUTION OF FUND SHARES............................... 9
MASTER-FEEDER STRUCTURE................................... 10
YEAR 2000................................................. 10
FINANCIAL HIGHLIGHTS...................................... 11
ADDITIONAL INFORMATION................................Back Cover
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ABOUT THE FUND
OVERVIEW
The American AAdvantage U.S. Government Money Market Fund (the "Fund") is
managed by AMR Investment Services, Inc. (the "Manager"), a wholly owned
subsidiary of AMR Corporation.
The Fund operates under a master-feeder structure. This means that the Fund
seeks its investment objective by investing all of its investable assets in a
corresponding Portfolio of the AMR Investment Services Trust ("AMR Trust") that
has a similar name and identical investment objective. Throughout this
Prospectus, statements regarding investments by the Fund refer to investments
made by its corresponding Portfolio. For easier reading, the term "Fund" is used
throughout the Prospectus to refer to either the Fund or its Portfolio, unless
stated otherwise. See "Master-Feeder Structure."
THE SECURITIES AND EXCHANGE COMMISSION DOES NOT GUARANTEE THAT THE INFORMATION
IN THIS PROSPECTUS OR ANY OTHER MUTUAL FUND'S PROSPECTUS IS ACCURATE OR
COMPLETE, NOR DOES IT JUDGE THE INVESTMENT MERIT OF THIS FUND. TO STATE
OTHERWISE IS A CRIMINAL OFFENSE.
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AMERICAN AADVANTAGE U.S. GOVERNMENT MONEY MARKET FUND
INVESTMENT OBJECTIVE
Current income, liquidity and the maintenance of a stable price of $1.00
per share.
PRINCIPAL STRATEGIES
The Fund invests exclusively in obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities and repurchase agreements
that are collateralized by such obligations. Some of these securities are not
backed by the full faith and credit of the U.S. Government. U.S. Government
securities include direct obligations of the U.S. Treasury (such as Treasury
bills, Treasury notes and Treasury bonds).
Securities purchased by the Fund generally have remaining maturities of 397
days or less, although instruments subject to repurchase agreements and certain
variable and floating rate obligations may bear longer final maturities. The
average dollar-weighted maturity of the Fund will not exceed 90 days.
RISK FACTORS
- The yield paid by the Fund is subject to changes in interest rates. As a
result, there is risk that a decline in short-term interest rates would
lower its yield and the overall return on your investment.
- Although the Fund seeks to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in the Fund.
Your investment in the Fund is not insured or guaranteed by the U.S. Government
or any financial or government institution.
INVESTOR PROFILE
This Fund may be suitable for investors who:
- seek the preservation of capital and to avoid fluctuations in principal
- desire regular, monthly income from a highly liquid investment
- require a short-term vehicle for cash when making long-term investment
decisions
- seek a rate of return that is potentially higher than certificates of
deposit or savings accounts
HISTORICAL PERFORMANCE
The bar chart below provides an indication of risk by showing how the
Fund's performance has varied from year to year. The PlanAhead Class of the Fund
began offering its shares on August 1, 1994. However, another class of shares of
the Fund not offered in this prospectus began offering its shares on March 2,
1992. In the chart and table below, performance results before August 1, 1994
are for the older class. Because the other class had lower expenses, its
performance was slightly
PROSPECTUS 2
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better than the PlanAhead Class of the Fund would have realized in the same
period. Past performance is not necessarily indicative of how the Fund will
perform in the future. Investors may call 1-800-388-3344 to obtain the Fund's
current seven-day yield.
TOTAL RETURN FOR THE CALENDAR YEAR ENDED 12/31 OF EACH YEAR
[GRAPH]
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1993 ....................................... 3.05%
1994 ....................................... 3.89%
1995 ....................................... 5.27%
1996 ....................................... 4.88%
1997 ....................................... 5.13%
1998 ....................................... 5.04%
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Highest Quarterly Return: 1.32%
(1/1/93 through 12/31/98) (2nd Quarter 1995)
Lowest Quarterly Return: 0.74%
(1/1/93 through 12/31/98) (4th Quarter 1993)
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U.S. GOVERNMENT
MONEY MARKET
AVERAGE ANNUAL TOTAL RETURN FUND
(as of 12/31/98) ---------------
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1 Year................................................ 5.04%
5 Years............................................... 4.84%
Since Inception (3/2/92).............................. 4.42%
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FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the U.S. Government Money Market Fund.(1)
Annual Fund Operating Expenses (expenses that are deducted from Fund
assets)
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Management Fees............................................. 0.10%
Distribution (12b-1) Fees................................... 0.00
Other Expenses.............................................. 0.47
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Total Annual Fund Operating Expenses........................ 0.57%
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(1) The expense table and the Example below reflect the expenses of both the
Fund and its corresponding Portfolio.
3 PROSPECTUS
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EXAMPLE
This Example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The Example assumes that
you invest $10,000 in the Fund for the time periods indicated and then redeem
all of your shares at the end of those periods. The Example also assumes that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
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1 Year....................................... $ 58
3 Years...................................... $183
5 Years...................................... $318
10 Years..................................... $714
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THE MANAGER
The Trust has retained AMR Investment Services, Inc. to serve as its
Manager. The Manager, located at 4333 Amon Carter Boulevard, Fort Worth, Texas
76155, is a wholly owned subsidiary of AMR Corporation, the parent company of
American Airlines, Inc. The Manager was organized in 1986 to provide investment
management, advisory, administrative and asset management consulting services.
As of December 31, 1998, the Manager had approximately $20.4 billion of assets
under management, including approximately $7.2 billion under active management
and $13.2 billion as named fiduciary or financial adviser. Of the total,
approximately $14.5 of assets are related to AMR Corporation.
The Manager provides or oversees the provision of all administrative,
investment advisory and portfolio management services to the Fund. The Manager
develops the investment programs for the Fund and serves as the sole investment
adviser to the Fund. As compensation for providing management services, the Fund
pays the Manager an annualized advisory fee that is calculated and accrued
daily, equal to 0.10% of the net assets of the Fund.
VALUATION OF SHARES
The price of the Fund's shares is based on its net asset value ("NAV") per
share. The Fund's NAV is computed by adding total assets, subtracting all of the
Fund's liabilities, and dividing the result by the total number of shares
outstanding. Securities held by the Fund are valued in accordance with the
amortized cost method, which is designed to enable the Fund to maintain a stable
NAV of $1.00 per share. Debt securities (other than short-term securities)
usually are valued on the basis of prices provided by a pricing service. In some
cases, the price of debt securities is determined using quotes obtained from
brokers.
The NAV of PlanAhead Class shares will be determined based on a pro rata
allocation of the Portfolio's investment income, expenses and total capital
gains and losses. The Fund's NAV per share is determined as of the close of the
New York Stock Exchange ("Exchange"), generally 4:00 p.m. Eastern Time, on each
day on which it is open for business. The Fund is not open and no NAV is
calculated on Columbus Day and Veteran's Day.
PROSPECTUS 4
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ABOUT YOUR INVESTMENT
PURCHASE AND REDEMPTION OF SHARES
ELIGIBILITY -- PlanAhead Class shares are offered 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.
PURCHASE POLICIES -- No sales charges are assessed on the purchase or sale
of Fund shares. Shares of the Fund are offered and purchase orders accepted
until 4:00 p.m. Eastern Time (or if earlier, the close of the Exchange) on each
day on which the Exchange is open for trading. In addition, shares of the Fund
are not offered and orders are not accepted on Columbus Day and Veteran's Day.
If a purchase order is received in good order prior to the Fund's deadline, the
purchase price will be the NAV per share next determined on that day. If a
purchase order is received in good order after the applicable deadline, the
purchase price will be the NAV of the following day that the Fund is open for
business. Checks to purchase shares 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. The
Fund will not accept "starter" checks or third party checks.
OPENING AN ACCOUNT -- A completed, signed application is required to open
an account. You may request an application form by:
- calling (800) 388-3344, or
- visiting the Fund's web site at www.aafunds.com and downloading an
account application.
A special retirement account application is required to open individual
retirement accounts, including SEPs and Keoghs. Each shareholder is charged an
administrative fee of $12.00 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 NFDS at (800) 388-3344.
Complete the application, sign it and mail to:
American AAdvantage Funds
P.O. Box 419643
Kansas City, MO 64141-6643
REDEMPTION POLICIES
Shares of the Fund may be redeemed by telephone, by writing a check, by
pre-authorized automatic redemption or by mail on any day the Fund is open for
business. The redemption price will be the NAV next determined after a
redemption order is received in good order. For assistance with completing a
redemption request, please call (800) 338-3344.
Proceeds from a redemption order for the Fund will be transmitted to a
shareholder by no later than seven days after the receipt of a redemption
request in good order. Delivery of proceeds from shares purchased by check or
pre-authorized automatic investment may be delayed until the funds have cleared,
which may take up to 15 days.
5 PROSPECTUS
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The Fund reserves the right to suspend redemptions or postpone the date of
payment (i) when the Exchange is closed (other than for customary weekend and
holiday closings); (ii) when trading on the Exchange is restricted; (iii) when
the SEC determines that an emergency exists so that disposal of the Fund's
investments or determination of its NAV is not reasonably practicable; or (iv)
by order of the SEC for protection of the Fund's shareholders.
Although the Fund intends to redeem shares in cash, the Fund reserves the
right to pay the redemption price in whole or in part by a distribution of
readily marketable securities held by the Fund's corresponding Portfolio. Unpaid
dividends credited to an account up to the date of redemption of all shares of
the Fund generally will be paid at the time of redemption.
PROSPECTUS 6
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HOW TO PURCHASE SHARES
TO MAKE AN INITIAL PURCHASE TO ADD TO AN EXISTING ACCOUNT
By Check
- - Make check payable to the American - Make check payable to the American
AAdvantage Funds. AAdvantage Funds.
- - Mail check ($2,500 minimum or $2,000 for - Include your account number on the check
IRAs) and completed application to: and either the detachable form from your
American AAdvantage Funds-PlanAhead account statement, a deposit slip from
Class your checkbook or a letter with the
P.O. Box 419643 account name and number.
Kansas City, MO 64141-6643 - Mail check ($50 minimum) to the address to
the left.
By Wire
Call (800) 388-3344 to purchase shares by Call (800) 388-3344 to purchase shares by
wire. Send a bank wire ($2,500 minimum or wire. Send a bank wire ($500 minimum) to
$2,000 for IRAs) to State Street Bank & State Street Bank & Trust Co. with these
Trust Co. with these instructions: instructions:
- - ABA# 0110-0002-8; AC-9905-342-3 - ABA# 0110-0002-8; AC-9905-342-3
- - Attn: American AAdvantage Funds-U.S. - Attn: American AAdvantage Funds- U.S.
Government Money Market Fund-PlanAhead Government Money Market Fund- PlanAhead
Class Class
- - specify that the wire is for a new account - your account number
By Pre-Authorized Automatic Investment
- - Fill in required information on the - Funds will be transferred automatically
account application, including amount ($50 from your bank account via Automated
minimum). Clearing House ("ACH") on the 5th day of
- - Provide the appropriate information on the each month or quarter, depending upon
account application and attach a voided which frequency you specify.
check.
By Exchange
- - Send a written request to the address - You may purchase shares of the Fund by
above or call (800) 388-3344. exchanging shares from the PlanAhead Class
- - A $2,500 minimum is required to establish of another American AAdvantage Fund if you
a new account in the PlanAhead Class of have owned shares of the other American
another Fund by making an exchange. AAdvantage American AAdvantage Fund for at
least 15 days.
- The minimum amount for each exchange is
$50.
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7 PROSPECTUS
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HOW TO REDEEM SHARES
METHOD ADDITIONAL INSTRUCTIONS
By Telephone
Shares may be redeemed by telephone if your - Telephone redemption orders are limited to
account application reflects that option. $25,000 within any 30 day period.
Call (800) 388-3344 to request a redemption. - Proceeds will generally be mailed only to
the account address of record or transmitted
by wire to a commercial bank designated on
the account application form.
By Mail
Write a letter of instruction including A signature guarantee may be required for
- - the Fund name redemption orders:
- - shareholder name and account number - in amounts of $25,000 or more
- - shares or dollar amount to be redeemed - with a request to send the proceeds to an
- - authorized signature(s) of all persons address or commercial bank account other
required to sign for the account than the address or commercial bank
- - how and where to send the proceeds account designated on the account
application, or
Mail to: - for an account whose address has changed
within the last 30 days
American AAdvantage Funds-PlanAhead Call (800) 388-3344 for instructions and
Class further assistance
P.O. Box 419643
Kansas City, MO 64141-6643
By Check
Choose the check writing feature on the - Minimum check amount is $100.
account application. - A $2 service fee per check is charged for
check copies.
By Pre-Authorized Automatic Redemption
Fill in required information on the account Proceeds will be transferred automatically
application, including amount ($100 from your Fund account to your bank account
minimum). via ACH on the 15th day of each month.
By Wire
Shares may be redeemed by wire if your Proceeds will be transmitted directly to
account application reflects that option. your predesignated account at a domestic
Call (800) 388-3344 to redeem shares by bank, for amounts of at least $500. Your
wire. account will be charged $10 for wire
redemptions to cover transaction costs.
By Exchange
Send a written request to the address above - You may sell shares of the Fund in
or call (800) 388-3344 to exchange shares. exchange for shares of the PlanAhead Class
of another American AAdvantage Fund if you
have owned shares of the Fund for at least
15 days.
- The minimum amount for each exchange is
$50.
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PROSPECTUS 8
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GENERAL POLICIES -- If a shareholder's account balance in the Fund falls
below $2,500, the shareholder may be asked to increase the balance. If the
account balance remains below $2,500 after 45 days, the Fund reserves the right
to close the account and send the proceeds to the shareholder. The Manager
reserves the right to charge an annual account fee of $12 (to offset the costs
of servicing accounts with low balances) if an account balance falls below
certain asset levels.
The following policies apply to instructions you may provide to the Fund by
telephone:
- The Fund, its officers, trustees, directors, employees, or agents are not
responsible for the authenticity of instructions provided by telephone,
nor for any loss, liability, cost or expense incurred for acting on them.
- The Fund employs procedures reasonably designed to confirm that
instructions communicated by telephone are genuine.
- Due to the volume of calls or other unusual circumstances, telephone
redemptions may be difficult to implement during certain time periods.
The Fund reserves the right to:
- reject any order for the purchase of shares and to limit or suspend,
without prior notice, the offering of shares,
- modify or terminate the exchange privilege at any time,
- limit the number of exchanges between Funds an investor may exercise, and
- seek reimbursement from you for any related loss incurred if your payment
for the purchase of Fund shares by check does not clear your bank.
DISTRIBUTIONS AND TAXES
The Fund distributes most or all of its net earnings in the form of
dividends from net investment income and distributions of realized net capital
gains that are paid to shareholders monthly on the first business day of the
following month. Unless the account application instructs otherwise,
distributions will be reinvested in additional Fund shares. Usually, dividends
and distributions of net realized gains are taxable events.
This is only a summary of some of the important income tax considerations
that may affect Fund shareholders. Shareholders should consult their tax adviser
regarding specific questions as to the effect of federal, state or local income
taxes on an investment in the Fund.
ADDITIONAL INFORMATION
DISTRIBUTION OF FUND SHARES
The Trust does not incur any direct distribution expenses related to
PlanAhead Class shares. However, the Trust has adopted a Distribution Plan in
accordance with Rule 12b-1 under the Investment Company Act of 1940 ("1940 Act")
which authorizes the use of any fees received by
9 PROSPECTUS
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the Manager in accordance with the Administrative Services and Management
Agreements and any fees received by the investment advisers pursuant to their
Advisory Agreements with the Manager, to be used for the sale and distribution
of Fund shares.
[MASTER-FEEDER STRUCTURE GRAPH]
(graphic follows)
The Fund operates under a master-feeder structure. This means that the Fund
is a "feeder" fund that invests all of its investable assets in a "master" fund
with the same investment objective. The "master" fund purchases securities for
investment. The master-feeder structure works as follows:
[MASTER-FEEDER STRUCTURE GRAPH]
The Fund can withdraw its investment in its corresponding Portfolio at any
time if the Board determines that it is in the best interest of the Fund and its
shareholders to do so. If this happens, the Fund's assets will be invested
according to the investment policies and restrictions described in this
Prospectus.
YEAR 2000
The Fund could be affected adversely if the computer systems used by the
Manager, the Fund's other service providers, or companies in which the Fund
invests do not properly process and calculate information that relates to dates
beginning on January 1, 2000 and beyond. Due to the Fund's reliance on various
service providers to perform essential functions, the Fund could have difficulty
calculating its NAV, processing orders for share redemptions and delivering
account statements and other information to shareholders. The Manager has taken
steps that it believes are reasonably designed to address the potential failure
of computer systems used by the Manager and the Fund's service providers to
address the Year 2000 issue. There can be no assurance that the steps taken by
the Manager will be sufficient to avoid any adverse impact.
In evaluating current and potential portfolio positions, Year 2000 is one
of the factors that the Manager takes into consideration. The Manager will rely
upon public filings and other statements made by companies regarding their Year
2000 readiness. Issuers in countries outside of the U.S. may not be required to
make the level of disclosure regarding Year 2000 readiness that is required in
the U.S. If the value of the Fund's investment is adversely affected by a Year
2000 problem, the NAV of the Fund may be affected as well.
PROSPECTUS 10
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FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Fund's financial performance for the past five years (or, if shorter, the period
of the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). The Fund's highlights were
audited by Ernst & Young LLP, independent auditors. More financial information
about the Fund is found in its Annual Report, which you may obtain upon request.
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U.S. GOVERNMENT MONEY MARKET FUND-PLANAHEAD CLASS
----------------------------------------------------
YEAR ENDED OCTOBER 31, AUGUST 1 TO
FOR A SHARE OUTSTANDING ------------------------------------- OCTOBER 31,
THROUGHOUT THE PERIOD: 1998 1997(C) 1996 1995 1994(A)
----------------------- -------- ------- ------- ------ ------------
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Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $1.00 $ 1.00
------- ------ ------ ----- ------
Net investment income................... 0.05(B) 0.05(B) 0.05(B) 0.05 0.01
Less dividends from net investment
income................................ (0.05) (0.05) (0.05) (0.05) (0.01)
------- ------ ------ ----- ------
Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $1.00 $ 1.00
======= ====== ====== ===== ======
Total return (annualized)............... 5.13% 5.08% 4.94% 5.19% 3.58%(D)
======= ====== ====== ===== ======
Ratios and supplemental data:
Net assets, end of period (in
thousands)......................... $99,869 $4,046 $1,822 $ 530 $ --
Ratios to average net assets
(annualized)
Expenses........................... 0.57%(B) 0.52%(B) 0.67%(B) 0.76% 0.75%
Net investment income.............. 5.01%(B) 5.00%(B) 4.74%(B) 5.19% 3.94%
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A The U.S. Government Money Market Fund-PlanAhead Class commenced active
operations on August 1, 1994.
B The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of its
corresponding Portfolio.
C Prior to March 1, 1997, the American AAdvantage U.S. Government Money Market
Fund was known as the American AAdvantage U.S. Treasury Money Market Fund and
operated under different investment policies.
D The total return reflects the Institutional Class return from November 1,
1993 through July 31, 1994 and the PlanAhead Class return for the remainder
of the period. Due to the different expense structures between the classes,
the total return would vary from the result shown had the PlanAhead Class
been in operation for the entire year.
American Airlines is not responsible for investments made in the American
AAdvantage Funds. American AAdvantage Funds is a registered service mark of AMR
Corporation. PlanAhead Class is a registered service mark, and American
AAdvantage U.S. Government Money Market Fund is a service mark of AMR Investment
Services, Inc.
11 PROSPECTUS
<PAGE> 12
ADDITIONAL INFORMATION
Additional information about the Fund is found in the documents listed below.
Request a free copy of these documents by calling (800) 388-3344.
ANNUAL REPORT/SEMI-ANNUAL REPORT
The Fund's Annual and Semi-Annual Reports list the Fund's actual investments as
of the report's date. They also include a discussion by the Manager of market
conditions and investment strategies that significantly affected the Fund's
performance. The report of the Fund's independent auditors is included in the
Annual Report.
STATEMENT OF ADDITIONAL INFORMATION
The SAI contains more details about the Fund and its investment policies. The
SAI is incorporated in this Prospectus by reference (it is legally part of this
Prospectus). A current SAI is on file with the Securities and Exchange
Commission (SEC).
To obtain more information about the Fund:
BY MAIL:
American AAdvantage Funds
P.O. Box 619003, MD5645
DFW Airport, TX 75261-9003
ON THE INTERNET:
Visit our website at www.aafunds.com
Visit the SEC website at www.sec.gov
[INTRUST LOGO]
Contact your Account Executive
or
P.O. Box One
Wichita, KS 67201-5001
(316) 383-1450
Copies of these documents also may be obtained from the SEC Public Reference
Room in Washington, D.C. The Public Reference Room can be reached at (800)
732-0330 or by mailing a request, including a duplicating fee to: SEC's Public
Reference Section, 450 5th Street NW, Washington, D.C. 20549-6009.
SEC File No. 811-4984
[INTRUST LOGO]
American AAdvantage
U.S. Government
Money Market Fund(sm)
-PlanAhead Class(R)-
PROSPECTUS
dated March 1, 1999
[INTRUST LOGO]
