The AAL Mutual Funds
Supplement Dated September 9, 1997, to the Prospectuses dated July 1, 1998, for
The AAL Mutual Funds (The AAL Capital Growth, Mid Cap Stock, Small Cap Stock,
International, Equity Income, Bond, Municipal Bond, High Yield Bond and Money
Market Funds all classes) and the Prospectus dated September 1, 1998, for The
AAL U.S. Government Zero Coupon Target Funds Series 2001 and Series 2006.
On August 26, 1998, The Board of Trustees of The AAL Mutual Funds recommended
the following changes, and scheduled a shareholders' meeting on October 30,
1998, for shareholders of record on August 31, 1998:
Election of Trustees; Selection of Accountants
The Board of Trustees is asking the Shareholders of all of the Funds to vote on
the election of seven nominees for the Board of Trustees. Six of the nominees
are currently serving as Trustees. The seventh, Mr. Edward W. Smeds, has been
nominated to fill the vacancy that will be created with the retirement of Mr. D.
W. Russler on December 31, 1998. Mr. Russler will not stand for election.
Shareholders of all of the Funds also are being asked to ratify the selection of
PriceWaterhouseCoopers LLP as independent public accountants for the fiscal year
ending April 30, 1999. All shareholders of The AAL Mutual Funds will vote
together on the election of Trustees and the selection of accountants.
New Sub-Advisory Agreement for The AAL International Fund
The Board of Trustees is recommending that Societe Generale Asset Management
Corporation ("SoGen") be replaced as The AAL International Fund's Sub-Adviser by
Oechsle International Advisers ("Oechsle"). Therefore, it is necessary for the
Shareholders of The AAL International Fund to vote on the approval of a new
Sub-Advisory Agreement with Oechsle.
Amend Investment Objectives of The AAL Small Cap Stock and Mid Cap Stock Funds
The Board of Trustees is recommending a change to the fundamental investment
objectives of The AAL Small Cap Stock Fund and The AAL Mid Cap Stock Fund. The
proposed changes would eliminate from the fundamental investment objective of
each of these Funds the market capitalization thresholds used to define small
companies and mid-sized companies, respectively. These thresholds would instead
be introduced as nonfundamental investment policies, meaning they could be
changed in the future by the Board of Trustees without shareholder approval.
Only shareholders of these two Funds will vote, and they will vote separately on
this matter.
On August 26, 1998, the Board of Trustees lowered the maximum advisory fees as
follows: (Effective September 1, 1998)
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The AAL Small Cap Stock Fund
Prior Fees: 0.75% on the first $200 million
0.65% on average daily net assets over $200 million
New Fees: 0.70% on the first $200 million
0.65% on average daily net assets over $200 million
The AAL Mid Cap Stock Fund
Prior Fees: 0.75% on the first $200 million
0.65% on average daily net assets over $200 million
New Fees: 0.70% on the first $200 million
0.65% on average daily net assets over $200 million
The AAL Capital Growth Fund
Prior Fees: 0.70% on the first $250 million
0.65% on the next $250 million
0.575% on the next $500 million
0.50% on average daily net assets over $1 billion
New Fees: 0.65% on the first $500 million
0.575% on the next $500 million
0.50% on average daily net assets over $1 billion
The AAL Equity Income Fund
Prior Fees: 0.50% on the first $250 million
0.45% on average daily net assets over $250 million
New Fees: 0.45% on average daily net assets
The AAL Balanced Fund
Prior Fees: 0.60% on average daily net assets
New Fees: 0.55% on average daily net assets
The AAL High Yield Bond Fund
Prior Fees: 0.60% on average daily net assets
New Fees: 0.55% on average daily net assets
The AAL Municipal Bond Fund
Prior Fees: 0.50% on the first $250 million
0.45% on average daily net assets over $250 million
New Fees: 0.45% on average daily net assets
The AAL Bond Fund
Prior Fees: 0.50% on the first $250 million
0.45% on average daily net assets over $250 million
New Fees: 0.45% on average daily net assets
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Effective September 1, 1998, Citibank, N.A., 111 Wall Street, New York, New York
10043 is the custodian for all of The AAL Mutual Funds except The AAL
International Fund.
