AAL MUTUAL FUNDS, 497, 2000-09-18

AAL MUTUAL FUNDS
497, 2000-09-18

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THE AAL MUTUAL FUNDS

PROSPECTUS
INSTITUTIONAL SHARES
JULY 1, 2000

As Amended July 3, 2000

The AAL Technology Stock Fund

The AAL Aggressive Growth Fund

The AAL Mid Cap Stock Fund

The AAL Capital Growth Fund

The AAL Equity Income Fund

The AAL Mid Cap Index Fund

The AAL Bond Fund

As with other mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

TABLE OF CONTENTS
PAGE
RISK/RETURN INFORMATION: INVESTMENT PROGRAMS AND PERFORMANCE

PROSPECTUS SUMMARY
Reading the Prospectus
Institutional Shares
Principal Risks Common to All Funds

THE AAL TECHNOLOGY STOCK FUND
Investment Objective
Principal Investment Strategies
Principal Risks
Past Performance
Expenses

THE AAL AGGRESSIVE GROWTH FUND
Investment Objective
Principal Investment Strategies
Principal Risks
Past Performance
Expenses

THE AAL MID CAP STOCK FUND
Investment Objective
Principal Investment Strategies
Principal Risks
Past Performance
Expenses

THE AAL CAPITAL GROWTH FUND
Investment Objective
Principal Investment Strategies
Principal Risks
Past Performance
Expenses

THE AAL EQUITY INCOME FUND
Investment Objective
Principal Investment Strategies
Principal Risks
Past Performance
Expenses

THE AAL MID CAP INDEX FUND
Investment Objective
Principal Investment Strategies
Principal Risks
Past Performance
Expenses

THE AAL BOND FUND
Investment Objective
Principal Investment Strategies
Principal Risks
Past Performance
Expenses

MANAGEMENT, ORGANIZATION, AND CAPITAL STRUCTURE
Investment Adviser
Adviser Fees per Fund
Portfolio Management
The Aid Association for Lutherans Savings Plan

SHAREHOLDER INFORMATION
Pricing Funds' Shares

DIVIDENDS

TAX CONSIDERATIONS

DISTRIBUTION ARRANGEMENTS

FINANCIAL HIGHLIGHTS

ADDITIONAL INFORMATION

<PAGE>

RISK/RETURN INFORMATION: INVESTMENT PROGRAMS AND PERFORMANCE

PROSPECTUS SUMMARY

READING THE PROSPECTUS

References to "you" and "your" in the prospectus refer to prospective investors
or shareholders. References to "we," "us" or "our" refer to the trust or the
Funds and fund management; the adviser, and/or sub-adviser for The AAL
Aggressive Growth Fund, distributor, administrator, transfer agent and
custodians.

INSTITUTIONAL SHARES

In this prospectus, we provide you with information on: the investment
objectives and policies of the Funds; risks of investing in the Funds; how to
buy and sell Institutional shares; management and services provided to the
Funds; and other information.

This prospectus describes a separate class of shares for each Fund,
Institutional shares ("Class I shares"), for Lutheran organizations or
enterprises with minimum initial investment in the Funds of $500,000. We
designed Institutional shares to give Lutheran organizations and enterprises
(non-natural persons) or financial institutions acting in a fiduciary or agency
capacity for them, a convenient means of accumulating an interest in The AAL
Mutual Funds. We did not design Institutional shares for individuals, their
individual retirement accounts or trusts designed for the benefit of
individuals. Investors in Institutional shares purchase at net asset value. They
pay neither initial sales charges, redemption fees, nor 12b-1distribution and
service fees.

PRINCIPAL RISKS COMMON TO ALL FUNDS
You assume certain risks when you invest in any of the Funds. Risks specific to
each Fund are discussed on the following pages. More generally, the investment
style and strategies that we use to select stocks, bonds and other securities
for each Fund depends on our ability to select those that perform well over
time. Our selections may not always achieve our growth and/or income
expectations and securities we select could decline in value. There can be no
assurance that any of the Funds will achieve its objective and you could lose
money.

<PAGE>

THE AAL TECHNOLOGY STOCK FUND

This Fund is not available until October 16, 2000.

INVESTMENT OBJECTIVE
The AAL Technology Stock Fund seeks long-term capital appreciation by investing
primarily in a diversified portfolio of common stocks and securities convertible
into common stocks.

PRINCIPAL INVESTMENT STRATEGIES
Under normal circumstances, we invest at least 65% of the Fund's total assets in
technology stocks. We focus on equity securities of companies engaged in
offering and/or developing products, processes or services that utilize new or
improved technologies. Within this group, we look for companies that we believe
have strong potential for future growth. We may invest the remaining 35% of the
Fund's total assets in additional common stocks, preferred stocks, and
securities convertible into these stocks. We limit our investment in convertible
securities to no more than 5% of the Fund's net assets. The technology companies
in which we invest may be in any of the following industries, among others:

o computers, including products, software, hardware, electronic components,
and semiconductors;
o network applications;
o the Internet;
o telecommunications;
o media and information services;
o medical devices and medical technology;
o pharmaceutical research and development;
o defense and aerospace; and
o biotechnology.

The Fund may also invest in securities of foreign issuers. Foreign securities
are generally selected on a stock-by-stock basis without regard to any defined
allocation among countries or geographic regions. Foreign securities for the
Fund are selected, in part, based on analysis of the technology the company
provides and the company's financial strength. However, we also consider other
factors when analyzing an individual, foreign security, such as; expected levels
of inflation, government policies influencing business conditions, the outlook
for currency relationships and prospects for economic growth among countries,
regions or geographic areas. Typically, we consider an issuer as domiciled in a
particular country if it:

o is incorporated under the laws of that country;
o has at least 50% of the value of its assets located in that country; or
o derives at least 50% of its income from operations or sales in that
country.

The technology sector is composed of many companies representing different
market capitalizations. The Fund invests in companies of any size, from small
cap companies, to large cap companies. We take a "bottom up" approach to
investing for the Fund, meaning each stock in the portfolio is individually
selected, in part, based on analysis of the technology the company provides and
the company's financial strength. A company in the Fund's portfolio will usually
have a number of the following qualities: new technology, capable management and
a strong outlook for growth. We sell a stock when the company no longer offers
sustainable growth and we believe there are better, alternative investments.
This investment strategy may result in short-term gains or losses for the Fund.

PRINCIPAL RISKS

FINANCIAL RISK: Many factors affect the performance of a company in which the
Fund may invest. Some examples include strength of management, demand for a
company's products or services and general economic conditions. A company's
performance will affect the market price of its stock, and consequently, the
value of the Fund's portfolio. You could lose money investing in the Fund.

MARKET RISK: Over time, the stock market tends to move in cycles, with periods
when stock prices rise generally and periods when stock prices decline
generally. The value of the Fund's investments may move with these cycles, and
in some instances, increase or decrease more than the stock market, as measured
by the S&P 500(R) Index.

INDUSTRY SPECIFIC CONCENTRATION RISK: Sector funds may be more volatile than
funds that diversify across many industries. Fund investments are primarily
concentrated in technology-related industries. At times, stocks of companies in
the technology industries may experience periods of significant price
fluctuations. As a consequence, the Fund may be subject to more price volatility
than a fund which invests in a broader range of industries.

FOREIGN INVESTMENT RISKS: The Fund faces particular risks associated with
foreign investing. Foreign investment risks include currency, liquidity,
political, economic and market risks, as well as risks associated with
governmental regulation and non-uniform corporate disclosure standards.

SMALL CAP COMPANY RISKS: When compared with large companies, small,
less-established companies may have relatively lower revenues, limited product
lines, less management depth and a lower share of the market for their products
or services. Because of these and other factors, stocks of small companies
present a greater risk of losing value than stocks of larger, more established
companies.

PAST PERFORMANCE
The Fund commenced operations on July 1, 2000. Because the Fund has been in
operation for less than a full calendar year, we have not included any
performance information.

EXPENSES
Like any investor, you directly pay certain expenses related to your
investments. We refer to these direct expenses as shareholder fees. Other
expenses, called annual fund operating expenses, are paid from Fund assets, so
they reduce your share price. Institutional shares have no shareholder fees.
Annual fund operating expenses are outlined below.

Fee Table
This table describes the fees and expenses you may pay if you buy and hold the
Fund's shares:

SHAREHOLDER FEES
(fees paid directly from your investment) INSTITUTIONAL SHARES

Maximum sales charge (load) imposed on None
purchases

Maximum deferred sales charge (load) imposed on None
redemptions

ANNUAL FUND OPERATING EXPENSES
(expenses deducted from Fund assets) INSTITUTIONAL SHARES

Management fees 0.75%

Distribution and service (12b-1) fees None

Other expenses 0.59%

Total fund operating expenses* 1.34%

* Operating expenses are expressed as a percentage of average daily net assets
based on management's estimate of expenses for the fiscal year ending April 30,
2001.

Expense Example
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. The example assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all
your shares at the end of those periods. It also assumes that your investment
has a 5% return each year, and that the Fund's operating expenses remain the
same. Although your actual costs may be higher or lower, based on the foregoing
assumptions your costs would be:

Time Period Institutional Shares

1 Year $139

3 Year $432

YOU SHOULD USE THE EXPENSE EXAMPLE FOR COMPARISON PURPOSES ONLY. IT DOES NOT
REPRESENT THE FUND'S ACTUAL EXPENSES AND RETURNS, EITHER PAST OR FUTURE. ACTUAL
EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

THE AAL AGGRESSIVE GROWTH FUND

This Fund is not available until October 16, 2000.

INVESTMENT OBJECTIVE
The AAL Aggressive Growth Fund seeks long-term capital appreciation by investing
primarily in a diversified portfolio of common stocks and securities convertible
into common stocks.

PRINCIPAL INVESTMENT STRATEGIES
We invest in companies that offer the potential for accelerated earnings or
revenue growth. Stocks of these companies are generally referred to as "growth"
stocks. Under normal circumstance we invest at least 65% of the Fund's total
assets in common stocks, not including convertible securities. The Fund invests
in companies of any size, from small cap companies, to large cap companies. The
Fund may invest in any industry and sector.

We take a "bottom up" approach to investing for the Fund. In other words we seek
to identify individual companies with earnings growth potential that may not be
recognized by the market at large. We make this assessment by looking at
companies one at a time, regardless of size, country of organization, place of
principal business activity, industry or other similar selection criteria. We
sell a stock when the company no longer offers sustainable growth and we believe
there are better, alternative investments. This investment strategy may result
in short-term gains or losses for the Fund.

The Fund may invest in securities of foreign issuers. Foreign securities are
generally selected on a stock-by-stock basis without regard to any defined
allocation among countries or geographic regions. However, certain factors such
as expected levels of inflation, government policies influencing business
conditions, the outlook for currency relationships and prospects for economic
growth among countries, regions or geographic areas may warrant greater
consideration in selecting foreign securities. There are no limitations on the
countries in which the Fund may invest and at times the Fund may have
significant foreign exposure.

We may invest up to 35% of the Fund's total assets in additional common stocks,
preferred stocks, illiquid securities and high yield bonds or "junk bonds."
While high yield bonds have the potential for a higher yield than
investment-grade bonds, they also have speculative characteristics including a
higher risk of default on principal and interest payments.

The Fund may also invest in investment-grade bonds, however, the Fund does not
invest in bonds for capital growth or for long time periods, but may invest in
bonds for temporary defensive measures. We limit our investment in convertible
securities to no more than 5% of the Fund's net assets.

PRINCIPAL RISKS

AGGRESSIVE GROWTH INVESTMENT RISK: "Growth" stocks tend to have greater price
volatility than stocks of larger, well-established companies. Generally, the
value of the Fund's investments tends to increase more than the stock market, as
measured by the S&P 500(R) Index, during periods of rising stock prices.
Conversely, the value of the Fund's investments tends to decrease more than the
stock market during periods of declining stock prices. However, these price
trends may not always occur.

DERIVATIVE RISK: The Fund may use futures, options, swaps, and other derivative
instruments to hedge or protect the Fund from adverse movements in securities
prices and interest rates. The Fund may also use a variety of currency hedging
techniques, including foreign currency contracts, to manage exchange rate risk.
The use of these instruments may benefit the Fund. However, if the Fund
Manager's judgment proves incorrect, the Fund's performance could be worse than
if the Fund had not used such instruments.

HIGH YIELD BOND RISK: High-yield bonds have a higher yield to compensate for
greater risk that the issuer might not make its interest and principal payments.
High-yield bonds are speculative and, therefore, typically considered to be
below investment-grade bonds by national ratings agencies.

PAST PERFORMANCE
The Fund commenced operations on July 1, 2000. Because the Fund has been in
operation for less than a full calendar year, we have not included any
performance information.

Fee Table
This table describes the fees and expenses you may pay if you buy and hold the
Fund's shares:

SHAREHOLDER FEES
(fees paid directly from your investment) INSTITUTIONAL SHARES

Maximum sales charge (load) imposed on None
purchases

Maximum deferred sales charge (load) imposed on None
redemptions

ANNUAL FUND OPERATING EXPENSES
(expenses deducted from Fund assets) INSTITUTIONAL SHARES

Management fees 0.80%

Distribution and service (12b-1) fees None

Other expenses 0.59%

Total fund operating expenses* 1.39%

* Operating expenses are expressed as a percentage of average daily net assets
based on management's estimate of expenses for the fiscal year ending April 30,
2001.

Time Period Institutional Shares

1 Year $144

3 Year $448

THE AAL MID CAP STOCK FUND

INVESTMENT OBJECTIVE
The AAL Mid Cap Stock Fund seeks long-term capital growth by investing primarily
in common stocks and securities convertible into common stocks, of mid-sized
companies.

PRINCIPAL INVESTMENT STRATEGIES
Under normal circumstances, we invest at least 65% of the Fund's total assets in
mid-sized company stocks. By mid-sized companies, we mean those with market
capitalizations ranging from $100 million to $7.5 billion. Within this category,
we generally focus on companies with market capitalizations ranging from $500
million to $3.5 billion. Mid-cap companies tend to be smaller and less-seasoned
than large-cap companies listed in the S&P 500 Index. Mid-cap companies may
trade in the over-the-counter market as well as on national securities
exchanges.

We may invest the remaining 35% of the Fund's total assets in any combination of
additional mid-cap stocks, large-cap stocks and securities convertible into such
stocks. We look for mid-sized companies (including companies initially offering
their stock to the public) that, in our opinion:

(1) have prospects for growth in their sales and earnings;
(2) are in an industry with a good economic outlook;
(3) have high-quality management; and
(4) have a strong financial position.

We usually pick companies in the middle stages of their development. These
companies tend to have established a record of profitability and possess a new
technology, unique product, or market niche. We tend to sell stocks of companies
when we think other investments offer better opportunities. Due to this policy,
the Fund may, from time to time, have short-term gains or losses.

PRINCIPAL RISKS

FINANCIAL RISK: Stocks of mid-sized companies may present a greater risk of
losing value than stocks of larger, more established companies, but may present
less risk than stocks of smaller companies. Mid-sized companies tend to have
relatively smaller revenues, narrower product lines, less management depth and
smaller shares of the market for their products or services than large
companies.

MARKET RISK: Over time, the stock market tends to move in cycles, with periods
when stock prices rise generally and periods when stock prices decline
generally. Due to the tendency for mid-cap stocks to have less liquidity in the
market than large company stocks, the value of the Fund's investments might
increase and decrease more than the stock market in general, as measured by the
S&P 500 Index. You could lose money investing in the Fund.

PAST PERFORMANCE
The following table and chart reflect the Fund's annual return and long-term
performance. The bar chart and table show the risks of investing in the Fund by
demonstrating the variability in the Fund's annual total return. As with all
investments, past performance is not a guarantee of future results.

Annual Total Returns
The following chart shows calendar year total returns for Class I shares since
the Fund started operations. Total returns assume reinvestment of all dividends
and distributions. There is no front-end sales charge or contingent deferred
sales charge on the Fund's Class I shares.

Annual Return
Institutional Shares
Year Ended December 31st

[Bar chart with following data:]

12/31/98 2.62%
12/31/99 19.01%

The Fund's year-to-date return as of March 31, 2000 was 10.22%.

Best and Worst Quarterly Returns
Best Quarter 4th Quarter of 1998 22.99%
Worst Quarter 3rd Quarter of 1998 (21.14)%

Average Annual Total Returns
The table below compares the Fund's average annual total return for Class I
shares with the S&P MidCap 400 Index.* The average annual return is calculated
as of the close of the Fund's fiscal year, which ends April 30, 2000. Returns
are shown for a one-year period and since inception.

Mid Cap Fund 1 Year Since Inception
Institutional Shares 28.00% 13.66% (1)
S&P MidCap 400 Index 23.52% 18.54% (2)

(1) Inception of Fund December 29, 1997.
(2) Performance number reflects returns of the S&P MidCap 400 Index since
December 29, 1997.

* The S&P MidCap 400 Index is an unmanaged index that represents the average
performance of a group of 400 medium capitalization stocks.

Please note, investment returns and principal value will fluctuate. When shares
are redeemed, they may be worth more or less than the price you paid.

Fee Table
This table describes the fees and expenses you may pay if you buy and hold the
Fund's shares:

SHAREHOLDER FEES INSTITUTIONAL SHARES
(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases None

Maximum deferred sales charge (load) imposed on None
redemptions

ANNUAL FUND OPERATING EXPENSES INSTITUTIONAL SHARES
(expenses deducted from Fund assets)

Management fees 0.66%

Distribution and service (12b-1) fees None

Other expenses 0.05%

Total fund operating expenses 0.71%

Time Period Institutional Shares
1 Year $74
3 Year $232
5 Year $403
10 Year $901

THE AAL CAPITAL GROWTH FUND

INVESTMENT OBJECTIVE
The AAL Capital Growth Fund seeks long-term capital growth by investing
primarily in a diversified portfolio of common stocks and securities convertible
into common stocks.

PRINCIPAL INVESTMENT STRATEGIES
Under normal circumstances, we invest at least 65% of the Fund's total assets in
common stocks, not including convertible securities. Generally, we focus on
dividend-paying stocks issued by companies with earnings growth per share that
is higher than stocks included in the S&P 500. In selecting stocks, we look for
quality, operating growth predictability and financial strength.

We may invest the remaining 35% of the Fund's total assets in additional common
stocks, preferred stocks and bonds. The Fund does not invest in bonds for
capital growth or for long time periods. We limit our investments in convertible
securities to no more than 5% of the Fund's net assets.

PRINCIPAL RISKS

MARKET RISK: Over time, the stock market tends to move in cycles, with periods
when stock prices rise generally and periods when stock prices decline
generally. The value of the Fund's investments may increase and decrease more
than the stock market in general, as measured by the S&P 500 Index.

Annual Return
Institutional Shares
Year Ended December 31st

[Bar chart with following data:]

12/31/98 28.61%
12/31/99 23.02%

The Fund's year-to-date return as of March 31, 2000 was0.56%.

Best and Worst Quarterly Returns
Best Quarter 4th Quarter of 1998 20.07%
Worst Quarter 3rd Quarter of 1998 (10.55)%

Average Annual Total Returns
The table below compares the Fund's average annual total return for Class I
shares with the S&P 500 Index.* The average annual return is calculated as of
the close of the Fund's fiscal year, which ends April 30, 2000. Returns are
shown for a one-year period and since inception.

Capital Growth Fund 1 Year Since Inception
Institutional Shares 9.70% 21.60% (1)
S&P 500 Index 10.13% 20.53% (2)

(1) Inception of Fund December 29, 1997.
(2) Performance number reflects returns of the S&P 500 Index since
December 29, 1997.

* The S&P 500 Index is a broad-based composite unmanaged index that represents
the average performance of a group of 500 widely-held, publicly-traded stocks.

Please note, investment returns and principal value will fluctuate. When shares
are redeemed, they may be worth more or less than the price you paid.

Fee Table
This table describes the fees and expenses you may pay if you buy and hold the
Fund's shares:

SHAREHOLDER FEES INSTITUTIONAL SHARES
(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases None

Maximum deferred sales charge (load) imposed on None
redemptions

ANNUAL FUND OPERATING EXPENSES INSTITUTIONAL SHARES
(expenses deducted from Fund assets)

Management fees 0.53%

Distribution and service (12b-1) fees None

Other expenses 0.01%

Total fund operating expenses 0.54%

Time Period Institutional Shares
1 Year $56
3 Year $177
5 Year $308
10 Year $692

THE AAL EQUITY INCOME FUND

INVESTMENT OBJECTIVE
The AAL Equity Income Fund seeks current income, long-term income growth and
capital growth by investing primarily in a diversified portfolio of
income-producing equity securities.

PRINCIPAL INVESTMENT STRATEGIES
Under normal circumstances, we invest at least 65% of the Fund's total assets in
income-producing equity securities. By "income-producing equity securities," we
mean equity securities, including securities exchangeable or convertible into
equity securities, that offer dividend yields that exceed the average dividend
yields on stocks comprising the S&P 500. We may invest the remainder of the
Fund's total assets, in whole or in part, in additional income-producing equity
securities, bonds and commercial paper.

In selecting equity securities for the Fund, we look for companies that:

(1) have a good growth rate and return on capital;
(2) have favorable aspects for future growth and dividends;
(3) are financially sound;
(4) have high-quality management; and
(5) are in a favorable competitive environment.

We buy bonds, including convertible securities, if, at the time of purchase at
least two nationally recognized statistical rating organizations (NRSRO's) have
rated them investment grade; or, if unrated, we have determined them to be of a
credit quality comparable to investment grade. We may invest up to 5% of the
Fund's total assets in such securities rated below investment grade, otherwise
known as "high yield bonds" or "junk bonds." High-yield bonds generally offer a
higher yield than investment grade bonds, but also expose the Fund to greater
risk that the issuer might not make its interest and principal payments. We may
invest up to 5% of the Fund's total assets in such securities rated below
investment grade. We buy commercial paper rated in the top two categories by a
NRSRO. We may buy unrated commercial paper, if we determine the commercial paper
is of a credit quality comparable to investment grade.

We expect to receive income from dividends paid on equity investments and
interest earned on debt securities. We seek capital growth by attempting to
select income-producing equity securities that we believe are under-priced
relative to the securities of companies with comparable fundamentals.

PRINCIPAL RISKS

INDUSTRY CONCENTRATION: Income-producing equity securities in which the Fund
invests tend to be more prevalent in some market sectors than others, for
example; communications, retail, energy, utilities, financial services and
consumer non-cyclical and cyclical market sectors. Prices of stocks of companies
in these industries may not always move in tandem with the market, generally,
causing the Fund's performance to lag or outperform the overall market.

FINANCIAL RISK: The market sectors in which companies tend to issue
income-producing equity securities usually have high operating, interest and
other regulatory expenses, such as the public utilities industry. Also, some of
these sectors are maturing, meaning that growth is peaking. Companies in these
market sectors frequently use their profits for paying higher dividends rather
than reinvesting for company growth. As a result, income-producing equity
securities typically have lower capital growth potential than equity securities
in other sectors. Capital growth for many income-producing equity securities
corresponds to the company's competitive position, in particular its capability
to capture market share from its competitors.

INTEREST RATE RISK: Like bonds, changes in the level of interest rates affect
the value of income-producing equity securities and the value of the Fund as a
whole. Their values tend to move in the opposite direction of interest rates.

MARKET RISK: Market cycles affect all equity securities over time, with periods
when stock prices rise generally and periods when stock prices decline
generally. However, income-producing equity securities may rise less and fall
less than the market as a whole, because of the higher income component of these
securities.

Annual Return
Institutional Shares
Year Ended December 31st

[Bar chart with following data:]

12/31/98 13.80%
12/31/99 4.63%

The Fund's year-to-date return as of March 31, 2000 was 2.97%.

Best and Worst Quarterly Returns
Best Quarter 4th Quarter of 1998 15.15%
Worst Quarter 3rd Quarter of 1998 (10.17)%

Equity Income Fund 1 Year Since Inception
Institutional Shares (0.29)% 8.66% (1)
S&P 500 Index 10.13% 20.53% (2)

(1) Inception of Fund December 29, 1997.
(2) Performance number reflects returns of the S&P 500 Index since
December 29, 1997.

* The S&P 500 Index is a broad-based composite unmanaged index that represents
the average performance of a group of 500 widely-held, publicly-traded stocks.

Please note, investment returns and principal value will fluctuate. When shares
are redeemed, they may be worth more or less than the price you paid.

Fee Table
This table describes the fees and expenses you may pay if you buy and hold the
Fund's shares:

SHAREHOLDER FEES INSTITUTIONAL SHARES
(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases None

Maximum deferred sales charge (load) imposed on None
redemptions

ANNUAL FUND OPERATING EXPENSES INSTITUTIONAL SHARES
(expenses deducted from Fund assets)

Management fees 0.45%

Distribution and service (12b-1) fees None

Other expenses 0.07%

Total fund operating expenses 0.52%

Time Period Institutional Shares
1 Year $54
3 Year $170
5 Year $297
10 Year $667

THE AAL MID CAP INDEX FUND

INVESTMENT OBJECTIVE
The AAL Mid Cap Index Fund seeks total returns that track the performance of the
S&P MidCap 400 Index, by investing primarily in common stocks comprising the
Index.

PRINCIPAL INVESTMENT STRATEGIES

We select stocks through the use of computer models, instead of using
traditional analysis, to duplicate the S&P MidCap 400 Index in proportion to
their weightings in the index. We try to hold all the stocks that comprise the
Index, however, there may be variations and delays from time to time due to
periodic changes to the Index. We expect portfolio turnover of no more than 50%
per year.

To the extent possible, the Fund will be fully invested in the Index. Our
ability to match the performance of the S&P MidCap 400 Index will be affected by
the size and timing of cash flows into and out of the Fund. We will try to
manage the Fund to minimize such effects. The Fund has expenses that an index
does not have, so the Fund will not be able to exactly match the performance of
its comparable index.

We may also invest to some degree in money market instruments. We do not expect
to have more than 5% of the Fund's assets in money market instruments.

Stocks have historically performed better as an asset class than bonds. Although
there is a greater potential for reward, there are also greater risks. Although
we attempt to follow the performance of the S&P MidCap 400 Index, we cannot
guarantee these results. You could lose money investing in this Fund

PRINCIPAL RISKS

Many factors affect an individual company's performance, such as management or
the demand for a company's products or services. A company's performance will
affect the market price of its stocks, and consequently, it will impact the
value of the Fund's portfolio.

MARKET RISK: Over time, the stock market tends to move in cycles, with periods
when stock prices rise generally and periods when stock prices decline
generally. Due to the tendency for mid-cap stocks to have less liquidity in the
market than large company stocks, the value of the Fund's investments might
increase or decrease more than the stock market in general, as measured by the
S&P MidCap 400 Index. You could lose money investing in the Fund.

PAST PERFORMANCE
The Fund commenced operations on December 31, 1999. Because the Fund has been in
operation for less than a full calendar year, we have not included any
performance information.

FEE TABLE
This table describes the fees and expenses you may pay if you buy and hold the
Fund's shares:

Shareholder Fees
(fees paid directly from your investment) Institutional Shares

Maximum sales charge (load) imposed on None
purchases

Maximum deferred sales charge (load) imposed on None
redemptions

Annual Fund Operating Expenses
(expenses deducted from Fund assets) Institutional Shares

Management fees 0.25%

Distribution and service (12b-1) fees None

Other expenses 0.35%

Total fund operating expenses 0.60%*

* Operating expenses are expressed as a percentage of average daily net assets
based on management's estimate of expenses for the fiscal year ending April 30,
2001, and do not include the adviser's voluntary reimbursement of expenses. AAL
CMC, the Fund's adviser, has agreed to reimburse expenses so as to limit "Total
Fund Operating Expenses," to 0.20% for the fiscal year.

EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in the Fund
with the costs of investing in other mutual funds. The example assumes that you
invest $10,000 in the Fund for the time periods indicated and then redeem all
your shares at the end of those periods. It also assumes that your investment
has a 5% return each year, and that the Fund's operating expenses remain the
same. Although your actual costs may be higher or lower, based on the foregoing
assumptions your costs would be:

Time Period Institutional Shares

1 Year $62

3 Year $195

THE AAL BOND FUND

INVESTMENT OBJECTIVE

The AAL Bond Fund seeks a high level of current income, consistent with capital
preservation, by investing primarily in a diversified portfolio of
investment-grade bonds.

PRINCIPAL INVESTMENT STRATEGIES
Under normal circumstances, we invest at least 65% of the Fund's total assets
in:

(1) bonds of U.S. and foreign issuers payable in U.S. dollars rated within the
four highest rating categories by at least two NRSROs at the time of
purchase; and
(2) bonds or other securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities, primarily those securities supported by the
full faith and credit of the U.S. Treasury.

We may invest the remaining 35% of the Fund's total assets in:

(1) privately issued or guaranteed mortgage-related securities (such as home
equity asset-backed securities) rated within the four highest categories by
at least two NRSROs or unrated mortgage-related securities, if we determine
at the time of purchase that these unrated securities have credit quality
characteristics comparable to these ratings. Securities rated in the fourth
highest category have speculative investment characteristics;
(2) commercial paper rated in the highest rating category by a NRSRO, or
commercial paper issued or guaranteed by a corporation who has outstanding
debt rated in the two highest categories by a NRSRO at the time of
purchase;
(3) bank obligations, including repurchase agreements, of banks having total
assets in excess of $1 billion; and
(4) corporate obligations, including variable rate master notes, rated in the
two highest categories by a NRSRO, or issued by a corporation whose
outstanding debt has an equal or better rating at the time of purchase.

Although there are no restrictions on the maturity of the debt securities we may
purchase for the Fund, generally we maintain a weighted average effective
maturity of between 5 and 10 years. Effective maturity of a debt security takes
into account projected prepayments, call dates, put dates and sinking funds, if
any, that reduce the stated maturity date of the bond.

We anticipate that during normal market conditions the average portfolio
maturity of the Fund will not exceed 20 years. We use the stated final maturity
date (rather than effective maturity) of a security to calculate average
maturity, notwithstanding earlier call dates and possible prepayments.

PRINCIPAL RISKS

INTEREST RATE RISK: Changes in interest rate levels affect the value of the
bonds in the portfolio and the value of the Fund as a whole. Generally, the
value of a bond moves in the opposite direction of interest rates. Longer term
bond prices tend to move more in response to interest changes than shorter term
bonds.

CREDIT RISK: The creditworthiness of bond issuers will affect the value of their
bonds, which may decline during the Fund's holding periods and affect the value
of the Fund as a whole. The risk, generally, is less pronounced for U.S.
government and U.S. agency bonds than is the case for municipal and privately
issued bonds.

Annual Return
Institutional Shares
Year Ended December 31st

[Bar chart with following data:]

12/31/98 7.15%
12/31/99 (1.35)%

The Fund's year-to-date return as of March 31, 2000 was 1.91%.

Best and Worst Quarterly Returns

Best Quarter 3rd Quarter of 1998 4.13%
Worst Quarter 2ndt Quarter of 1999 (1.11)%

Average Annual Total Returns
The table below compares the Fund's average annual total return for Class I
shares with the Lehman Brothers Aggregate Bond Index.* The average annual return
is calculated as of the close of the Fund's fiscal year, which ends April 30,
2000. Returns are shown for a one-year period and since inception.

Bond Fund 1 Year Since Inception
Institutional Shares 0.30% 2.96% (1)
Lehman Brothers Aggregate Bond Index 1.26% 4.14% (2)

(1) Inception of Fund December 29, 1997.
(2) Performance number reflects returns of the Lehman Brothers Aggregate Bond
Index since December 29, 1997.

* The Lehman Brothers Aggregate Bond Index is an unmanaged index that
encompasses four classes of fixed-income securities in the United States: U.S.
Treasury and U.S. government agency securities, corporate debt obligations,
mortgage-backed securities and asset-backed securities.

Please note, investment returns and principal value will fluctuate. When shares
are redeemed, they may be worth more or less than the price you paid.

Fee Table
This table describes the fees and expenses you may pay if you buy and hold the
Fund's shares:

SHAREHOLDER FEES INSTITUTIONAL SHARES
(fees paid directly from your investment)

Maximum sales charge (load) imposed on purchases None

Maximum deferred sales charge (load) imposed on None
redemptions

ANNUAL FUND OPERATING EXPENSES INSTITUTIONAL SHARES
(expenses deducted from Fund assets)

Management fees 0.45%

Distribution and service (12b-1) fees None

Other expenses 0.05%

Total fund operating expenses 0.50%

Time Period Institutional Shares
1 Year $52
3 Year $164
5 Year $286
10 Year $642

MANAGEMENT, ORGANIZATION, AND CAPITAL STRUCTURE

INVESTMENT ADVISER

AAL Capital Management Corporation ("AAL CMC") serves as investment adviser and
distributor to the Funds. AAL CMC was organized in 1986 as a Delaware
corporation. AAL Holdings Inc., a wholly owned subsidiary of Aid Association for
Lutherans ("AAL") owns all of AAL CMC's shares. AAL is a non-profit, non-stock,
membership organization licensed to do business as a fraternal benefit society
in all states. AAL has approximately 1.7 million members and is one of the
world's largest fraternal benefit societies in terms of assets and life
insurance in force. AAL ranks in the top two percent of all life insurers in the
United States in terms of ordinary life insurance (nearly $88 billion in force).
Membership is open to Lutherans and their families who serve or are associated
with Lutherans or Lutheran organizations, but who are not Lutheran. AAL offers
life, health, and disability income insurance and fixed annuities to its
members, and all members are part of one of approximately 10,000 local AAL
branches throughout the United States. Through AAL CMC, AAL offers The AAL
Mutual Funds to persons who are eligible for membership in AAL. AAL CMC has
served as adviser to The AAL Mutual Funds since the commencement of operations.
As of June 1, 2000, AAL CMC managed over $7.7 billion for The AAL Mutual Funds.

[Sidebar: The adviser's principal address is:]

AAL Capital Management Corporation
222 West College Avenue
Appleton, WI 54919-0007

AAL's principal address is:

Aid Association for Lutherans
4321 North Ballard Road
Appleton, Wisconsin 54919-0001

Pursuant to an investment advisory agreement with the Funds, AAL CMC manages the
investment and reinvestment of the Funds' assets. AAL CMC also provides the
Funds with personnel, facilities and administrative services, and supervises the
Funds' daily business affairs. Services provided by AAL CMC to the Funds are
subject to the supervision of the Funds' Board of Trustees. AAL CMC formulates
and implements a continuous investment program for the Funds consistent with
each Fund's investment objectives, policies and restrictions.

ADVISER FEES PER FUND
The table reflects advisory fees paid by each Fund as a percentage of average
daily net assets, for the fiscal year ended April 30, 2000.

<TABLE>
<CAPTION>
<S> <C>
THE AAL TECHNOLOGY STOCK FUND 0.75% on the average daily net assets(1)
THE AAL AGGRESSIVE GROWTH FUND 0.25% on the average daily net assets above the
Sub-Adviser Fees Sub-Adviser's fee(1)
Janus 0.55% on the first $100 million
0.50% on the next $400 million
0.45% on the average daily net assets over $500 million
THE AAL MID CAP STOCK FUND 0.66% on the average daily net assets
THE AAL CAPITAL GROWTH FUND 0.53% on the average daily net assets
THE AAL EQUITY INCOME FUND 0.45% on the average daily net assets
THE AAL MID CAP INDEX FUND 0.25% on the average daily net assets(2)
THE AAL BOND FUND 0.45% on the average daily net assets
</TABLE>

(1) Projected advisory fee per Fund pursuant to the Investment Advisory and
Sub-Advisory Agreement for The AAL Technology Stock Fund and The AAL
Aggressive Growth Fund, respectively.
(2) Advisory fees for the Index Funds do not include the adviser's
reimbursement of Fund expenses. Actual expenses with reimbursements, "Total
Fund Operating Expenses," will be 0.20%.

PORTFOLIO MANAGEMENT

THE AAL TECHNOLOGY STOCK FUND
Brian J. Flanagan, CFA has been the co-portfolio manager of The AAL Technology
Stock Fund since it commenced operations on July 1, 2000. Mr. Flanagan is also
portfolio manager of The AAL Small Cap Index Fund II, which commenced operations
on July 1, 2000. He is also the portfolio manager of the AAL Variable Product
Series Fund Small Company Portfolio, a series of an affiliated mutual fund group
with an investment objective similar to the Funds. From 1996 to 1998, he served
first as analyst and later as portfolio manager for the small cap portfolio of
the AAL Savings Plan. From 1994 to 1995, Mr. Flanagan was the analyst for the
fixed-income portfolio for the plan.

James A. Grossman has been co-portfolio manager for The AAL Technology Stock
Fund since it commenced operations on July 1, 2000. From 1996 through 2000, Mr.
Grossman served as a securities analyst, following selected technology
investments for The AAL Mutual Funds. Prior to joining AAL CMC, Mr. Grossman
served as a securities analyst for Monetta Financial Services.

This Fund is not available until October 16, 2000.

THE AAL AGGRESSIVE GROWTH FUND

Janus Capital Corporation ["Janus"] makes the day-to-day investment decisions
for The AAL Aggressive Growth Fund under AAL CMC's direction and control. Janus
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 Fund's portfolio.

Michael Dugas has been the portfolio manager of The AAL Aggressive Growth Fund
since it commenced operations on July 1, 2000. Mr. Dugas is Assistant Portfolio
Manager of Janus Mercury Fund and also manages separate accounts in the
diversified growth discipline. Previously, he performed equity security
analysis, focusing his research efforts on large-capitalization domestic
healthcare and technology companies. Prior to joining Janus in 1993, Mr Dugas
was an audit senior at Price Waterhouse, analyzing financials of large
investment firms. He was also controller of the U.S. branch of a European
manufacturing firm. Mr. Dugas holds a bachelors degree in Spanish from Louisiana
State University, where he graduated magna cum laude, and an MBA in professional
accounting from the University of Texas. He is a Level II candidate in the CFA
Program and has nine years of professional investment experience.

This Fund is not available until October 16, 2000.

THE AAL MID CAP STOCK FUND

Michael R. Hochholzer, CFA, has managed the day-to-day Fund investments since
March 1997. Prior to managing the Fund, Mr. Hochholzer served as a securities
analyst and portfolio manager for Aid Association for Lutherans, the parent
company of AAL Capital Management Corporation.

THE AAL CAPITAL GROWTH FUND
Frederick L. Plautz has managed the day-to-day Fund investments since November
1, 1995. Prior to managing the Fund, Mr. Plautz served as vice president and
portfolio manager for Federated Investors from 1990 through October 1995.

THE AAL EQUITY INCOME FUND
Lewis A. Bohannon, CFA, has managed the day-to-day Fund investments since
November 1, 1995. From 1980 through 1994, Mr. Bohannon was at Cigna Corporation,
serving as managing director and portfolio manager from 1990 to 1994.

THE AAL MID CAP INDEX FUND
Michael R. Hochholzer, CFA, has managed the day-to-day Fund investments for The
AAL Mid Cap Index Fund since it commenced operations on December 31, 1999. Mr.
Hochholzer also serves as portfolio manager for The AAL Mid Cap Stock Fund and
The AAL Mid Cap Index Fund II, two additional series of The AAL Mutual Funds.
Mr. Hochholzer previously served as a securities analyst and portfolio manager
for AAL from 1989 through 1997.

This Fund is not available until October 16, 2000.

THE AAL BOND FUND

Alan D. Onstad has managed the day-to-day Fund investments since July 19, 1999.
Mr. Onstad currently manages The AAL Government Zero Coupon Target Fund Series
2001 and 2006, the AAL Variable Product Money Market Portfolio, the money market
portfolio of the AAL Savings Plan, and the utility portfolio of AAL's general
account. Mr. Onstad is also co-manager of The AAL Balanced Fund. Mr. Onstad has
been employed by AAL since 1973, most recently as Assistant Vice-President of
Securities.

THE AID ASSOCIATION FOR LUTHERANS SAVINGS PLAN
The Aid Association for Lutherans Savings Plan is a 401(k) plan for our
employees (plan participants). Through the savings plan, plan participants can
allocate part of their income into certain Funds. Refer to your plan document
for more information on your investment choices and how to invest in the Funds.
We may also offer shares of the Funds to other retirement plans.

INDEX INFORMATION
On a monthly basis we compare the performance of each Fund with that of its
benchmark index. At that time we may re-balance the Funds' securities
portfolios. The AAL Mid Cap Index Fund is considered to be an indexed Fund.
That means we passively manage it; we maintain the securities held by the Fund
so they are the same as the securities in the Fund's benchmark index. Fund
performance may not exactly correspond with the performance of its index
due to market timing, shifts in the composition of the index, and Fund expenses.

S&P 500 AND THE S&P MIDCAP 400 INDICES
Standard & Poor's ("S&P") compiles several broad-based indices used as
benchmarks for tracking certain types of markets. The most widely known is the
S&P 500 Composite Stock Price Index ("S&P 500 Index"). The S&P 500 Index
consists of 500 stocks chosen for market size, liquidity and industry group
representation. It is a market-value weighted index (stock price times the
number of shares outstanding), with each stock's weight in the Index
proportionate to its market value. Most of the largest 500 companies listed on
the U.S. stock exchanges are included in the Index. The companies whose stocks
are included in the Index tend to be the leading companies in leading industries
within the U.S. economy.

The weightings make each company's influence on the Index performance directly
proportional to that company's market value. This characteristic has made the
S&P 500 Index the investment industry standard for measuring the performance of
Funds comprised of large-capitalization stocks.

Another index from Standard & Poor's we use as a benchmark is the S&P MidCap 400
Index. The S&P MidCap 400 Index is a benchmark for tracking performance of
medium-capitalization stocks. As of December 6, 1999, the median market
capitalization for stocks in the S&P MidCap 400 was $1.56 billion. While this
Index is relatively new, the industry recognizes it as a good benchmark for
tracking mid-cap stocks. The 400 stocks that make up the Index are listed on the
New York Stock Exchange, The American Stock Exchange or the NASDAQ quotation
system. In addition, the stocks that make up the Index are liquid, meaning they
are easily traded. These characteristics of the S&P MidCap 400 Index make it
relatively easy to emulate. The easier it is to track an index, the more likely
it is for a Fund to track that index's performance.

Both the S&P 500 Index and the S&P MidCap 400 Index are comprised of U.S. equity
stocks. S&P periodically makes additions and deletions of stocks to its
respective indices. Selection of a stock for inclusion in either S&P Index in no
way implies an opinion by S&P as to its attractiveness as an investment.
Standard & Poor's only relationship to the Fund is the licensing of the Standard
& Poor's Marks, the S&P 500 Index and the S&P MidCap 400 Index. These indices
are determined, composed and calculated by Standard & Poor's without regard to
any particular Fund.

"Standard & Poor's(R)," "S&P(R)," "Standard & Poor's 500," "S&P 500(R)," "500,"
"Standard & Poor's MidCap 400 Index" and "S&P MidCap 400 Index" are trademarks
of The McGraw-Hill Companies, Inc. and have been licensed for use by AAL. The
Fund is not sponsored, endorsed, or sold or promoted by Standard & Poor's.
Standard & Poor's makes no representation regarding the advisability of
investing in the Fund. See the Statement of Additional Information for
additional disclaimers and limitations of liabilities on behalf of S&P.

SHAREHOLDER INFORMATION

PRICING FUNDS' SHARES
The price of a Fund's shares is based on the Fund's net asset value. The Funds
determine the net asset value (NAV) per share once daily at the close of trading
(normally 3:00 p.m. Central Time) on the New York Stock Exchange (NYSE). The
Funds do not determine NAV on holidays observed by the NYSE or AAL. To determine
the NAV, the Funds value their securities at current market value using readily
available market quotations. The Funds value securities that do not have readily
available market quotations at fair value as determined in good faith by or
under the direction of The AAL Mutual Funds' Board of Trustees. The Funds may
use pricing services as approved by the Board of Trustees to determine the net
asset value of their securities.

Some of the Funds hold securities that trade primarily on foreign exchanges.
These exchanges may trade on weekends or other days when the Funds do not price
their shares. Accordingly, it is possible that the value of a Fund's shares may
change at times when those shares may not be purchased or redeemed.

The price at which you purchase or redeem shares of the Funds is the per share
NAV as next determined after the Funds have received your payment or your
redemption request.

DIVIDENDS

We endeavor to qualify annually as, and elect tax treatment applicable to, a
regulated investment company under Subchapter M of the Internal Revenue Code
("Code"). Pursuant to the requirements of the Code, we intend to distribute
substantially all of the Funds' net investment income and net realized capital
gains, if any, less any available capital loss carryover, to its shareholders
annually. We do this to avoid paying income tax on the Funds' net investment
income and net realized capital gains, and to avoid a federal excise tax on
undistributed net investment income and net realized gains. Annually, we intend
to comply with all of the requirements to qualify as a regulated investment
company for each Fund.

Below, we provide you with a general description of the distribution policies
for the Funds' shareholders.

The AAL Technology Stock, Aggressive Growth, Mid Cap Stock, Capital Growth and
Equity Income Funds.

We distribute substantially all net investment income and any net realized
capital gains, if any, for the Funds as shown in the table below.

The AAL Bond Fund accrues income dividends daily.

FUND DIVIDENDS (IF ANY) CAPITAL GAINS (IF ANY)
THE AAL TECHNOLOGY STOCK FUND Annually Annually
The AAL AGGRESSIVE GROWTH FUND Annually Annually
THE AAL MID CAP STOCK FUND Annually Annually
THE AAL CAPITAL GROWTH FUND Semiannually Annually
THE AAL EQUITY INCOME FUND Quarterly Annually
THE AAL MID CAP INDEX FUND Annually Annually
THE AAL BOND FUND Monthly Annually

TAX CONSIDERATIONS

Each Fund intends to distribute in December and, if necessary, at such other
times as the Fund may determine, its net investment income and any net realized
capital gains resulting from investment activity. Any dividend (including a
capital gains dividend) declared in October, November or December, with a record
date in such a month and paid during the following January, must be treated by
shareholders for federal income tax purposes as if received on December 31 of
the calendar year declared.

All income and capital gains distributions are reinvested in full and fractional
shares of a Fund at net asset value, without sales charges, on a payment date.

The Funds are required by federal law to withhold 31% of reportable payments
(which include dividends, capital gain distributions and redemption proceeds)
paid to certain shareholders who have not properly certified that the Social
Security or other taxpayer identification number provided by the shareholder is
correct and that he or she is not otherwise subject to backup withholding. The
Funds' shareholder application includes the required certification.

No attempt is made herein to provide information as to state and local tax
consequences of ownership of shares of the Funds. Investors should consult their
personal tax adviser to determine the consequences of state and local taxes.

DISTRIBUTION ARRANGEMENTS

Investors in Institutional shares purchase at net asset value. They do not pay
any sales charges, redemption fees, or 12b-1 distribution or service fees.

SHAREHOLDER MAINTENANCE AGREEMENT

The Board of Trustees authorizes us to contract with AAL CMC for certain
shareholder maintenance services. AAL CMC receives an annual fee for providing
these services. This fee is based upon, and limited by, the difference between
the current account fees charged and the normal full-service fee schedule
established by our transfer agent. It also includes reimbursement for
out-of-pocket costs including postage and telephone charges. This account
differential, including reimbursement for expenses, is currently $3.75 per
account per year.

FINANCIAL HIGHLIGHTS INFORMATION

The AAL Technology Stock Fund and The AAL Aggressive Growth Fund commenced
operations on July 1, 2000, and consequently do not have financial highlights
information.

The financial highlights table is intended to help you understand the Fund's
financial performance for the period of the Fund's operations. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned or
lost on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by the accounting firm of
PricewaterhouseCoopers LLP., whose report, along with the Fund's financial
statements are included in the annual report, which is available upon request.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
THE AAL MID CAP STOCK FUND

CLASS I SHARES YEAR ENDED YEAR ENDED PERIOD:
4/30/00 4/30/99 12/29/97 TO
4/30/98
PER SHARE DATA [IN $ DOLLARS]

Net Asset Value - Beginning of Period $13.94 $15.96 $14.40
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.05 0.02 -
Net Realized and Unrealized Gain (Loss) on Investments 3.73 (1.25) 1.56
Total From Investment Operations 3.78 (1.23) 1.56
DISTRIBUTIONS FROM:
Net Investment Income - - -
Net Realized Capital Gains (0.83) (0.79) -
Total Distributions (0.83) (0.79) -
Net Asset Value - End of Period $16.89 $13.94 $15.96
Total Return (1) 28.00% (7.17)% 10.83%
SUPPLEMENTAL DATA AND RATIOS
Net Assets at End of Period (in millions) $16.5 $6.4 $1.2
Ratio of Expenses to Average Net Assets (2)* 0.62% 0.85% 0.86%
Ratio of Investment Income (Loss) to Average Net Assets (2)* 0.51% 0.33% 0.18%
Portfolio Turnover Rate 142.26% 125.94% 104.73%
* If the Fund had paid all of its expenses for Institutional
shares, the ratios would be as follows:
Ratio of Expenses to Average Net Assets 0.71% 0.85% 0.86%
Ratio of Net Investment Income (Loss) to Average Net Assets 0.41% 0.33% 0.18%

(1) Total return assumes reinvestment of all dividends and distributions. The
aggregate, not annualized total return is shown for periods less than one
year.
(2) For periods less than one year, both the ratio of net operating expenses to
average net assets and the ratio of net investment income (loss) to average
net assets are calculated on an annualized basis.

<PAGE>

THE AAL CAPITAL GROWTH FUND

CLASS I SHARES YEAR ENDED YEAR ENDED PERIOD:
4/30/00 4/30/99 12/29/97 TO
4/30/98
PER SHARE DATA [IN $ DOLLARS]

Net Asset Value - Beginning of Period $35.89 $26.97 $26.05
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.27 0.21 0.02
Net Realized and Unrealized Gain (Loss) on Investments 3.20 6.67 3.60
Total From Investment Operations 3.47 6.88 3.62
DISTRIBUTIONS FROM:
Net Investment Income (0.21) (0.20) -
Net Realized Capital Gains (0.43) (0.46) -
Total Distributions (0.64) (0.66) -
Net Asset Value - End of Period $38.72 $35.89 $29.67
Total Return (1) 9.70% 23.55% 13.90%
SUPPLEMENTAL DATA AND RATIOS
Net Assets at End of Period (in millions) $82.8 $46.9 $3.0
Ratio of Expenses to Average Net Assets (2)* 0.52% 0.60% 0.58%
Ratio of Investment Income (Loss) to Average Net Assets (2)* 0.73% 0.62% 0.52%
Portfolio Turnover Rate 7.50% 8.74% 17.96%
* If the Fund had paid all of its expenses for Institutional
shares, the ratios would be as follows:
Ratio of Expenses to Average Net Assets 0.54% 0.60% 0.58%
Ratio of Net Investment Income (Loss) to Average Net Assets 0.72% 0.62% 0.52%

<PAGE>

THE AAL EQUITY INCOME FUND

CLASS I SHARES YEAR ENDED YEAR ENDED PERIOD:
4/30/00 4/30/99 12/29/97 TO
4/30/98
PER SHARE DATA [IN $ DOLLARS]

Net Asset Value - Beginning of Period $14.70 $14.32 $13.14
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.31 0.21 0.08
Net Realized and Unrealized Gain (Loss) on Investments (0.35) 1.19 1.16
Total From Investment Operations (0.04) 1.40 1.24
DISTRIBUTIONS FROM:
Net Investment Income (0.23) (0.23) (0.06)
Net Realized Capital Gains - (0.79) -
Total Distributions (0.23) (1.02) (0.06)
Net Asset Value - End of Period $14.43 $14.70 $14.32
Total Return (1) (0.29)% 10.62% 9.34%
SUPPLEMENTAL DATA AND RATIOS
Net Assets at End of Period (in millions) $6.2 $13.2 $7.1
Ratio of Expenses to Average Net Assets (2)* 0.46% 0.60% 0.68%
Ratio of Investment Income (Loss) to Average Net Assets (2)* 1.71% 1.65% 2.10%
Portfolio Turnover Rate 26.93% 13.35% 64.00%
* If the Fund had paid all of its expenses for Institutional
shares, the ratios would be as follows:
Ratio of Expenses to Average Net Assets 0.52% 0.60% 0.68%
Ratio of Net Investment Income (Loss) to Average Net Assets 1.65% 1.65% 2.10%

<PAGE>

THE AAL MID CAP INDEX FUND

CLASS I SHARES PERIOD:
12/31/99 TO
4/30/00
PER SHARE DATA [IN $ DOLLARS]

Net Asset Value - Beginning of Period $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.03
Net Realized and Unrealized Gain (Loss) on Investments 0.87
Total From Investment Operations 0.90
DISTRIBUTIONS FROM:
Net Investment Income -
Net Realized Capital Gains -
Total Distributions -
Net Asset Value - End of Period $10.90
Total Return (1) 9.00%
SUPPLEMENTAL DATA AND RATIOS
Net Assets at End of Period (in millions) $8.9
Ratio of Expenses to Average Net Assets (2)* 0.20%
Ratio of Investment Income (Loss) to Average Net Assets (2)* 1.02%
Portfolio Turnover Rate 24.59%
* If the Fund had paid all of its expenses for Institutional
shares, the ratios would be as follows:
Ratio of Expenses to Average Net Assets 1.27%
Ratio of Net Investment Income (Loss) to Average Net Assets (0.05)%

<PAGE>

THE AAL BOND FUND

CLASS I SHARES YEAR ENDED YEAR ENDED PERIOD:
4/30/00 4/30/99 12/29/97 TO
4/30/98
PER SHARE DATA [IN $ DOLLARS]

Net Asset Value - Beginning of Period $9.92 $9.99 $10.06
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.62 0.57 0.20
Net Realized and Unrealized Gain (Loss) on Investments (0.60) (0.07) (0.07)
Total From Investment Operations 0.02 0.50 0.13
DISTRIBUTIONS FROM:
Net Investment Income (0.62) (0.57) (0.20)
Net Realized Capital Gains - - -
Total Distributions (0.62) (0.57) (0.20)
Net Asset Value - End of Period $9.32 $9.92 $9.99
Total Return (1) 0.30% 5.02% 1.24%
SUPPLEMENTAL DATA AND RATIOS
Net Assets at End of Period (in millions) $47.9 $44.7 $29.3
Ratio of Expenses to Average Net Assets (2)* 0.43% 0.54% 0.56%
Ratio of Investment Income (Loss) to Average Net Assets (2)* 6.55% 5.63% 6.29%
Portfolio Turnover Rate 163.31% 572.56% 483.76%
* If the Fund had paid all of its expenses for Institutional
shares, the ratios would be as follows:
Ratio of Expenses to Average Net Assets 0.50% 0.54% 0.56%
Ratio of Net Investment Income (Loss) to Average Net Assets 6.47% 5.63% 6.29%

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ADDITIONAL INFORMATION

You will find additional information in the Statement of Additional Information
and the annual and semi-annual reports to shareholders. The Funds' Statement of
Additional Information and annual and semi-annual reports are available, without
charge, upon request. To request this or other information about the Funds,
please call 800-553-6319 (TTY- (800) 227-8601).

Annual and Semi-Annual Reports
In the Funds' annual report, you will find a discussion of the market conditions
and investment strategies that significantly affected the Funds' performances
during their last fiscal year.

Statement of Additional Information
The Funds' Statement of Additional Information provides more detailed
information about the Funds.

You also may review and copy information about the Funds (including the
Statement of Additional Information) at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C. For information on the operation of
the Public Reference Room call 1-800-SEC-0330. You also may obtain reports and
other information about the Funds on the Securities and Exchange Commission's
Internet site at http://www.sec.gov. You may obtain copies of this information,
upon payment of a duplication fee, by electronic request to e-mail address:
[email protected], or by writing the Public Reference Section of the Securities
and Exchange Commission at 405 5th Street, N.W., Washington, D.C. 20549-6009.

The Funds' Investment Company Act File No. is 811-5075

[Logo]
THE AAL MUTUAL FUNDS
222 West College Ave.
Appleton, WI 54919-0007
Telephone: (800) 553-6319
TDD: 800-684-3416
www.aal.org e-mail: [email protected]