AMERICAN AADVANTAGE FUNDS
AMR Class
Institutional Class
PlanAhead Class
Supplement to the Statement of Additional Information dated March 1, 1999
The restrictions on pages 6 and 7 are changed to read as follows:
In order to comply with certain statutes and policies the Equity 500 Index
Portfolio will not as a matter of operating policy:
1. Borrow money (including through dollar roll transactions) for any purpose in
excess of 10% of the Portfolio's total assets (taken at cost) except that the
Portfolio may borrow for temporary or emergency purposes up to 1/3 of its total
assets.
2. Pledge, mortgage or hypothecate for any purpose in excess of 10% of the
Portfolio's total assets (taken at market value), provided that collateral
arrangements with respect to options and futures, including deposits of initial
deposit and variation margin, and repurchase agreements are not considered a
pledge of assets for purposes of this restriction.
3. Purchase any security or evidence of interest therein on margin, except that
such short-term credit as may be necessary for the clearance of purchases and
sales of securities may be obtained and except that deposits of initial deposit
and variation margin may be made in connection with the purchase, ownership,
holding or sale of futures.
4. Sell any security that it does not own unless by virtue of its ownership of
other securities it has at the time of sale a right to obtain securities,
without payment of further consideration, equivalent in kind and amount to the
securities sold and provided that if such right is conditional the sale is made
upon the same conditions.
5. Invest for the purpose of exercising control or management.
6. Purchase securities issued by any investment company except by purchase in
the open market where no commission or profit to a sponsor or dealer results
from such purchase other than the customary broker's commission, or except when
such purchase, though not made in the open market, is part of a plan of merger
or consolidation; provided, however, that securities of any investment company
will not be purchased for the Portfolio if such purchase at the time thereof
would cause: (a) more than 10% of the Portfolio's total assets (taken at the
greater of cost or market value) to be invested in the securities of such
issuers; (b) more than 5% of the Portfolio's total assets (taken at the greater
of cost or market value) to be invested in any one investment company; or (c)
more than 3% of the outstanding voting securities of any such issuer to be held
for the Portfolio, unless permitted to exceed these limitations by an exemptive
order of the SEC; and, provided further that, except in the case of merger or
consolidation, the Portfolio shall not purchase securities of any open-end
investment company unless the Portfolio (1) waives the investment advisory fee
with respect to assets invested in other open-end investment companies and (2)
incurs no sales charge in connection with the investment.
7. Invest more than 15% of the Portfolio's net assets (taken at the greater of
cost or market value) in securities that are illiquid or not readily marketable
not including (a) Rule 144A securities that have been determined to be liquid by
the Equity 500 Index Portfolio Board; and (b) commercial paper that is sold
under section 4(2) of the 1933 Act which: (i) is not traded flat or in default
as to interest or principal; and (ii) is rated in one of the two highest
categories by at least two nationally recognized statistical rating
organizations and the Equity 500 Index Portfolio Board has determined the
commercial paper to be liquid; or (iii) is rated in one of the two highest
categories by one nationally recognized statistical rating agency and the Equity
500 Index Portfolio Board has determined that the commercial paper is equivalent
quality and is liquid.
8. Make short sales of securities or maintain a short position, unless at all
times when a short position is open it owns an equal amount of such securities
or securities convertible into or exchangeable, without payment of any further
consideration, for securities of the same issue and equal in amount to, the
securities sold short, and unless not more than 10% of the Portfolio's net
assets (taken at market value) is represented by such securities, or securities
convertible into or exchangeable for such securities, at any one time (the
Portfolio has no current intention to engage in short selling).
9. Write puts and calls on securities unless each of the following conditions
are met: (a) the security underlying the put or call is within the investment
policies of the Portfolio and the option is issued by the Options Clearing
Corporation, except for put and call options issued by non-U.S. entities or
listed on non-U.S. securities or commodities exchanges; (b) the aggregate value
of the obligations underlying the puts determined as of the date the options are
sold shall not exceed 5% of the Portfolio's net assets; (c) the securities
subject to the exercise of the call written by the Portfolio must be owned by
the Portfolio at the time the call is sold and must continue to be owned by the
Portfolio until the call has been exercised, has lapsed, or the Portfolio has
purchased a closing call, and such purchase has been confirmed, thereby
extinguishing the Portfolio's obligation to deliver securities pursuant to the
call it has sold; and (d) at the time a put is written, the Portfolio
establishes a segregated account with its custodian consisting of cash or short-
term U.S. Government securities equal in value to the amount the Portfolio will
be obligated to pay upon exercise of the put (this account must be maintained
until the put is exercised, has expired, or the Portfolio has purchased a
closing put, which is a put of the same series as the one previously written).
10. Buy and sell puts and calls on securities, stock index futures or options
on stock index futures, or, financial futures or options on financial futures
unless such options are written by other persons and: (a) the options or futures
are offered through the facilities of a national securities association or are
listed on a national securities or commodities exchange, except for put and call
options issued by non-U.S. entities or listed on non-U.S. securities or
commodities exchanges; (b) the aggregate premiums paid on all such options which
are held at any time do not exceed 20% of the Portfolio's total net assets; and
(c) the aggregate margin deposits required on all such futures or options
thereon held at any time do not exceed 5% of the Portfolio's total assets.
