AMERICAN AADVANTAGE MILEAGE FUNDS
Supplement dated October 1, 1996
to the Prospectus dated May 1, 1996
1) The Mileage Trust Board has approved a change to the dividend
policy of the Limited-Term Income Fund. Effective October 1, 1996,
dividends from the Limited-Term Income Fund will be payable to
shareholders of record as of the close of business on the day on which
they are declared.
2) The AMR Trust Board has approved the addition of South Korea as an
eligible country in which the International Equity Portfolio may invest.
3) 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.
4) 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.
