SUPPLEMENT TO PROSPECTUS
DATED February 1, 1999
AARP GNMA and U.S. Treasury Fund and
AARP Capital Growth Fund:
The data below replaces the average annual total return data provided in the
performance comparison chart in the "Past Performance" section for the indicated
funds:
AVERAGE ANNUAL RETURNS (%) as of 12/31/98
1 Year 5 Years 10 Years
- ------------------------------------------------------------------------------
AARP GNMA and U.S. Treasury Fund 6.79 5.97 7.78
AARP Capital Growth Fund 23.73 18.81 16.34
AARP GNMA and U.S. Treasury Fund, AARP Insured Tax Free General Bond Fund, AARP
Balanced Stock and Bond Fund, AARP Growth and Income Fund, AARP U.S. Stock Index
Fund, AARP Capital Growth Fund, AARP International Growth and Income Fund, AARP
Diversified Income with Growth Portfolio, and AARP Diversified Growth Portfolio:
The data below replaces the average annual total return data provided for the
indicated index in the performance comparison chart in the "Past Performance"
section for the above-listed funds or portfolios:
AVERAGE ANNUAL RETURNS (%) as of 12/31/98
Since
Inception
1 Year 5 Years 10 Years (2/1/97)
- ------------------------------------------------------------------------------
Lehman Brothers Mortgage 6.93 7.34 9.25 n/a
GNMA Index
Lehman Brothers Municipal 6.48 6.22 8.22 n/a
Bond Index
S&P 500 Composite Stock 25.58 24.06 19.21 28.37*
Price Index
The MSCI EAFE Index 20.00 n/a n/a 13.08**
* Applies to the AARP U.S. Stock Index Fund, AARP Diversified Income with
Growth Portfolio, and AARP Diversified Growth Portfolio only.
** Applies to the AARP International Growth and Income Fund only.
<PAGE>
AARP Diversified Growth Portfolio:
The text below replaces the second paragraph found in the "Investment Strategy"
section on page 74:
Under normal market conditions, the portfolio will generally allocate its assets
in underlying AARP Mutual Funds within the following ranges:
o stock funds
including Growth, Growth and Income, and Global Funds 60-80%
o bond funds
including Income Funds 20-40%
o Money Funds/cash 0-20%
February 11, 1999
