AMERICAN AADVANTAGE MILEAGE FUNDS
Supplement dated July 16, 1996
to the Prospectus dated May 1, 1996
1) The AMR Trust Board has approved the addition of South Korea as an
eligible country in which the International Equity Portfolio may invest.
2) The last paragraph on page 15 under "American AAdvantage Limited-Term
Income Mileage Fund" is replaced by the following:
Although investments will not be restricted by either maturity or
duration of the securities purchased, under normal circumstances, the
Portfolio will seek to maintain a dollar weighted average duration of
one to three years. Because the timing on return of principal for both
asset-backed and mortgage-backed securities is uncertain, in calculating
the average weighted duration of the Portfolio, the duration of these
securities may be based on certain industry conventions. The Manager
serves as the sole active investment adviser to the Limited-Term Income
Fund and its corresponding Portfolio.
3) The first paragraph under "Fund Advisory Agreements" on page 26 is
supplemented as follows:
At meetings held on March 26, and April 16, 1996, the shareholders of
the Balanced, Growth and Income and International Equity Funds and the
interest holders of their respective Portfolios approved the adoption of
a new policy. This policy permits the Manager to enter into new or
modified advisory agreements with existing or new investment advisers
without approval of Mileage Trust shareholders or AMR Trust interest
holders, but subject to approval of the Mileage Trust Board and the AMR
Trust Board. On June 25, 1996, the Securities and Exchange Commission
issued an exemptive order which permits the adoption of this policy,
subject to compliance with certain conditions. Accordingly, the Manager
intends to rely upon this policy in connection with future decisions to
enter into new or modified advisory agreements with existing or new
investment advisers.
