The AAL Mutual Funds
Supplement dated November 2, 1998, to the prospectuses dated July 1, 1998, for
The AAL Small Cap Stock, Mid Cap Stock, International, Capital Growth, Equity
Income, Balanced, High Yield Bond, Municipal Bond, Bond and Money Market Funds,
and to the prospectus dated September 1, 1998, for The AAL U.S. Government Zero
Coupon Target Funds, Series 2001 and Series 2006.
BOARD OF TRUSTEES
On October 30, 1998, The AAL Mutual Funds' shareholders re-elected the six
Trustees serving on the Board and elected Edward W. Smeds to fill a vacant seat
on the Board of Trustees effective January 1, 1998.
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Edward W. Smeds Retired; President, Customer Service and Operations, Kraft
10 Regent Wood Road Foods from 1991 to 1994; President, Kraft Foods Canada
Northfield, IL 60093 from 1989 to 1990; Chairman, Board of Trustees, Carthage
College.
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INDEPENDENT ACCOUNTANTS
On October 30, 1998, The AAL Mutual Funds' shareholders ratified
PriceWaterhouseCoopers LLP as independent accountants for the Funds.
SUB-ADVISORY AGREEMENT FOR THE AAL INTERNATIONAL FUND
On October 30, 1998, The AAL International Fund's shareholders approved a
sub-advisory agreement with Oechsle International Advisers LLC. On November 1,
1998, Oechsle LLC replaced Societe Generale Asset Management Corp. [SoGen] as
the sub-adviser for The AAL International Fund. All references to SoGen as the
current sub-adviser are hereby eliminated.
Oechsle Group, LLC, a Delaware limited liability company, with principal offices
at One International Place, Boston, Massachusetts 02110, is the member manager
of Oechsle LLC and owns an interest of approximately 44% in Oechsle LLC. The
management policies and control of Oechsle LLC, subject to certain limitations,
are vested exclusively in Oechsle Group LLC. The day-to-day management of
Oechsle LLC is exercised by the management committee of Oechsle Group LLC, which
consists of: S. Dewey Keesler, Jr., L. Sean Roche, Stephen P. Langer, Warren
Walker and Andrew S. Parlin.
Oechsle LLC makes the day-to-day investment decisions for the Fund portfolio
under AAL CMC's direction and control. Oechsle LLC determines which securities
to purchase and sell, arranges the purchases and sales and gives other help in
formulating and implementing the investment program for The AAL International
Fund portfolio.
The portfolio managers for The AAL International Fund are Kathleen Harris and
Sean Roche. Ms. Harris has been a portfolio manager at Oechsle since January
1995. Prior to this, she was portfolio manager and investment director for the
State of Wisconsin Investment Board and a fund manager and equity analyst for
Northern Trust Company. Mr. Roche has been a general partner and portfolio
manager with Oechsle since 1986.
Pursuant to the sub-advisory agreement, the sub-advisory fees paid by the
Adviser, AAL CMC, to Oechsle LLC, will be 0.40 of 1% of average daily net assets
of $50 million or less and 0.35 of 1% of average daily net assets over $50
million.
INVESTMENT OBJECTIVE OF THE AAL SMALL CAP STOCK FUND
On October 30, 1998, The AAL Small Cap Stock Fund's shareholders approved the
elimination of the market capitalization threshold from the fundamental
investment objective of the Fund. The Board of Trustees will now establish the
market capitalization threshold as a nonfundamental investment policy for The
AAL Small Cap Stock Fund. The market capitalization threshold for The AAL Small
Cap Stock Fund is now $1.5 billion.
INVESTMENT OBJECTIVE OF THE AAL MID CAP STOCK FUND
On October 30, 1998, The AAL Mid Cap Stock Fund's shareholders approved the
elimination of the market capitalization threshold from the fundamental
investment objective of the Fund. The Board of Trustees will now establish the
market capitalization threshold as a nonfundamental investment policy for The
AAL Mid Cap Stock Fund. The market capitalization threshold for The AAL Mid Cap
Stock Fund is now $6.0 billion.
C-50042I16 10/98
