<PAGE>
AMERICAN AADVANTAGE MILEAGE FUNDS
Supplement dated April 8, 1996
to the Prospectus dated October 1, 1995
1) Effective April 1, 1996, Capital Guardian Trust Company ("Capital
Guardian") ceased active management of assets to the Balanced Fund and the
Growth and Income Fund and their corresponding portfolios.
2) The paragraph on page 18 starting with "AMERICAN AADVANTAGE U.S.
TREASURY MONEY MARKET MILEAGE FUND" should be replaced by:
AMERICAN AADVANTAGE U.S. TREASURY MONEY MARKET MILEAGE FUND -- The Fund's
corresponding Portfolio will invest exclusively in obligations backed by
the full faith and credit of the U.S. Government and repurchase agreements
which are collateralized by U.S. Government full faith and credit
obligations. For this purpose, U.S. Government agency mortgage-backed
securities collateralized exclusively by full faith and credit GNMA
mortgages are considered eligible. Counterparties for repurchase
agreements must be approved by the AMR Trust Board. Ordinarily at least
65% of the Portfolio's assets will be invested in direct U.S. Treasury
obligations. Such obligations may include STRIPS issued by the U.S.
Treasury which represent either future interest or principal payments.
STRIPS are issued at a discount to their "face value", and may exhibit
greater price volatility than ordinary debt securities because of the
manner in which their principal and interest are returned to investors.
The Portfolio may also invest in other full faith and credit obligations
of the U.S. Government, including securities issued by the Agency for
International Development, General Services Administration, GNMA, Rural
Electrification Administration, Small Business Administration, Federal
Financing Bank and others. The Portfolio may purchase or sell securities
on a "when-issued" or a "forward commitment" basis. See the SAI for a
further discussion of the foregoing obligations.
3) The following should be inserted in place of the information
regarding Capital Guardian under "Investment Advisers".
BRANDYWINE ASSET MANAGEMENT, INC. ("Brandywine"), 201 North
Walnut Street, Wilmington, Delaware 19801, is a privately held
professional investment counseling firm founded in 1986. As of December
31, 1995, Brandywine had assets under management totaling approximately
$4.7 billion, including approximately $124 million of assets of AMR and
its subsidiaries and affiliated entities. Brandywine serves as an
investment adviser to the Balanced Portfolio and the Growth and Income
Portfolio. AMR Investment Services, Inc. (the "Manager") pays Brandywine
for the first $500 million of assets under its discretionary management,
an annualized fee equal to .25% of assets in the Growth and Income
Portfolio and .225% of assets in the Balanced Portfolio; .225% of the next
$100 million on all assets and .20% on all excess assets.
BOATMEN'S TRUST COMPANY ("Boatmen's"), 100 N. Broadway, St.
Louis, Missouri 63178, is a professional trust and investment advisory
firm founded in 1889 and has been providing investment services since the
1930s. Boatmen's is a wholly owned subsidiary of Boatmen's Bancshares,
Inc. As of December 31, 1995, Boatmen's had assets under management
<PAGE>
totaling approximately $45 billion, including approximately $140 million
of assets of AMR and its subsidiaries and affiliated entities. Boatmen's
serves as an investment adviser to the Balanced and the Growth and Income
Portfolios, although the Manager does not presently intend to allocate
assets to Boatmen's. The Manager will pay Boatmen's an annualized fee
equal to .25% of the average daily net assets of each Portfolio allocated
to Boatmen's for management.
ROWE PRICE-FLEMING INTERNATIONAL, INC. ("Fleming"), 100 East
Pratt Street, Baltimore Maryland 21202, is a professional investment
counseling firm founded in 1979. Fleming is a joint venture owned
entirely by its three parent companies, T. Rowe Price, Robert Fleming and
Jardine Fleming. As of December 31, 1995, Fleming had assets under
management totaling approximately $22.2 billion, including approximately
$197 million of assets of AMR and its subsidiaries and affiliated
entities. Fleming serves as an investment adviser to the International
Equity Portfolio, although the Manager does not presently intend to
allocate assets to Fleming. For its services to the International Equity
Portfolio when total assets under Fleming's management are less than $200
million, the Manager will pay Fleming an annualized fee equal to 0.75% of
the first $20 million, 0.60% of the next $30 million and .50% on amounts
over $50 million. When assets under Fleming's management exceed $200
million but are less than $500 million, the Manager will pay Fleming an
annualized fee equal to 0.50% on all assets. When assets under Fleming's
management exceed $500 million but are less than $750 million, the Manager
will pay an annualized fee equal to 0.45% on all assets, and when assets
exceed $750 million, the Manager will pay Fleming a flat fee of 0.40% on
all assets. When asset levels are between $184 million and $200 million,
Fleming will credit the Manager with an adjustment for the difference
between the two fee schedules. The credit is determined by pro-rating the
difference between the original tiered fee and the flat fee ($80,000 per
annum at all asset levels) over the difference between $200 million and
the current asset size for billing purposes.
<PAGE>
