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)

<TABLE>
<CAPTION>
<S>                           <C>                        <C>                                                     
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
</TABLE>


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.