SEC Info - Allied Asset Advisors Funds

SEC Info℠

Home

Help

Please Sign In

Allied Asset Advisors Funds – ‘N-1A’ on 2/23/00

On: Wednesday, 2/23/00 · Accession #: 894189-0-106 · File #: 333-30924

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/23/00  Allied Asset Advisors Funds       N-1A                   4:278K                                   US Bancorp Fund Svcs LLC

Registration Statement of an Open-End Management Investment Company — Form N-1A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-1A        Registration Statement of an Open-End Management      60±   246K 
                          Investment Company                                     
 2: EX-99.A(I)  Certificate of Trust                                   1      7K 
 3: EX-99.A(II)  Declaration of Trust                                 28±   134K 
 4: EX-99.B     By-Laws                                                7±    30K

N-1A — Registration Statement of an Open-End Management Investment Company
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Additional Information on Distributions and Taxes Administrative Services Auditors Brokerage Allocation and Other Practices Business and Other Connections of the Investment Advisor Calculating Share Price Code of Ethics Counsel Distribution and Shareholder Servicing Plan Distributions and Taxes Distributor Dow Jones Islamic Index Fund Exhibits Fees and Expenses Financial Highlights How to Purchase Shares How to Sell Shares Indemnification Investment Advisor Investment Objective and Strategies Investment Restrictions Location of Accounts and Records Management of the Fund Management Services Not Discussed in Parts A and B More About Dow Jones(Sm) More Information About the Dow Jones Islamic Market Usa Index(Sm) Performance Information Performance Summary Persons Controlled by or Under Common Control With Registrant Pricing of Shares Principal Underwriters Purchasing Shares Redemption of Shares Risk/Return Summary Shareholder Reports and Confirmations Shari'Ah Supervisory Board Table of Contents The Trust Trust, The Undertakings
1	1st Page - Filing Submission
"	Investment Advisor
"	Table of Contents
"	Risk/Return Summary
"	Performance Summary
"	Fees and Expenses
"	More Information About the Dow Jones Islamic Market Usa Index(Sm)
"	Shari'Ah Supervisory Board
"	Management of the Fund
"	Distributor
"	Calculating Share Price
"	How to Purchase Shares
"	How to Sell Shares
"	Distributions and Taxes
"	Shareholder Reports and Confirmations
"	Financial Highlights
"	Dow Jones Islamic Index Fund
"	Investment Restrictions
"	Investment Objective and Strategies
"	More About Dow Jones(Sm)
"	The Trust
"	Code of Ethics
"	Administrative Services
"	Distribution and Shareholder Servicing Plan
"	Pricing of Shares
"	Purchasing Shares
"	Redemption of Shares
"	Brokerage Allocation and Other Practices
"	Additional Information on Distributions and Taxes
"	Performance Information
"	Auditors
"	Counsel
"	Item 23. Exhibits
"	Item 24. Persons Controlled by or Under Common Control With Registrant
"	Item 25. Indemnification
"	Item 26. Business and Other Connections of the Investment Advisor
"	Item 27. Principal Underwriters
"	Item 28. Location of Accounts and Records
"	Item 29. Management Services Not Discussed in Parts A and B
"	Item 30. Undertakings

Filed with the Securities and Exchange Commission on February 23, 2000

1933 Act Registration File No. ___________
1940 Act File No. ____________

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|

Pre-Effective Amendment No. |_|

Post-Effective Amendment No. |_|

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|

Amendment No. |_|

ALLIED ASSET ADVISORS FUNDS
(Exact Name of Registrant as Specified in Charter)

745 McClintock Drive, Suite 114
Burr Ridge, IL 60521
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (630) 789-9191

Copies of all communications to:
Elaine E. Richards, Esq.
Firstar Mutual Fund Services, LLC
615 East Michigan Street
2nd Floor
Milwaukee, WI 53202

Approximate Date of Proposed Public Offering: As soon as practical after the
effective date of this Registration Statement.

It is proposed that this filing will become effective (check appropriate box):

___ immediately upon filing pursuant to paragraph (b)

___ on ___________ pursuant to paragraph (b)

___ 60 days after filing pursuant to paragraph (a)(1)

___ on ____________ pursuant to paragraph (a)(1)

___ 75 days after filing pursuant to paragraph (a)(2)

___ on ____________ pursuant to paragraph (a)(2) of Rule 485.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.

Title of securities being registered: Dow Jones Islamic Index Fund, Classes M
and K.

CLASS M

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

DOW JONES(SM) ISLAMIC INDEX FUND

PROSPECTUS

__________, 2000

INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.

DOW JONES(SM) ISLAMIC INDEX FUND

PROSPECTUS

__________, 2000

The Dow Jones(SM) Islamic Index Fund (the "Fund") is the first series offered by
Allied Asset Advisors Funds. This prospectus pertains to the Class M share class
and contains pertinent information about investing in the Fund. Please read this
prospectus carefully before investing.

INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.

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

RISK/RETURN SUMMARY............................................................2

PERFORMANCE SUMMARY............................................................3

FEES AND EXPENSES..............................................................3

MORE INFORMATION ABOUT THE DOW JONES ISLAMIC MARKET USA INDEX(SM)..............4

SHARI'AH SUPERVISORY BOARD.....................................................6

MANAGEMENT OF THE FUND.........................................................7

CALCULATING SHARE PRICE........................................................7

HOW TO PURCHASE SHARES.........................................................8

HOW TO SELL SHARES.............................................................9

DISTRIBUTIONS AND TAXES.......................................................11

SHAREHOLDER REPORTS AND CONFIRMATIONS.........................................11

FINANCIAL HIGHLIGHTS..........................................................11

RISK/RETURN SUMMARY
--------------------------------------------------------------------------------

WHAT IS THE INVESTMENT OBJECTIVE OF THE DOW JONES(SM) ISLAMIC INDEX FUND?

The Dow Jones Islamic Index Fund ("Fund") seeks to match the total return of the
DOW JONES ISLAMIC MARKET USA INDEX(SM) (the "INDEX").

WHAT ARE THE MAIN INVESTMENT STRATEGIES OF THE FUND?

To achieve its investment objective, the Fund invests in securities included in
the INDEX. The INDEX consists of U.S. common stocks that meet Islamic investment
principles. Islamic principles generally preclude investments in certain
industries (e.g., alcohol, pornography and casinos) and investments in interest
bearing debt obligations or businesses that derive a substantial amount of
impure interest income. Any uninvested cash will be held in non-interest bearing
deposits or invested in a manner following Islamic principles. Under normal
circumstances, the Fund plans to fully invest its assets in securities that are
included in the INDEX. There is no guarantee that the Fund will achieve the same
return as the INDEX.

Due to the large number of stocks in the INDEX, the Fund may, in its initial
stages, purchase a sub-group of equities from those contained in the INDEX that
the investment advisor believes will best track the Index. As the assets of the
Fund grow, the investment advisor anticipates the holdings of the Fund will
increase to include more of the components of the INDEX.

In order to track the INDEX as closely as possible, the Fund will invest
substantially all of its assets in roughly the same proportions as the stocks
are represented in the INDEX. As the Fund receives cash from new investors, or
processes redemption requests from shareholders, the Fund will purchase or sell
securities in an effort to attempt to approximate the return of the INDEX. Also,
the Fund's investments are reviewed and adjusted periodically to reflect any
adjustments in the INDEX, in an effort to tract the INDEX as closely as
possible.

The Fund normally sells portfolio securities in response to redemption requests
or to adjust the number of its shares to track the weighting or composition of
the INDEX. As a result, the Fund's portfolio turnover rate is expected to be
low. A low portfolio turnover rate usually results in low transaction costs and
provides tax efficiencies for shareholders.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

The main risks of investing in the Fund are listed below. Like any mutual fund,
you may lose money by investing in the Fund.

MARKET RISKS The return on and value of your investment in the Fund will
fluctuate in response to stock market movements. Stocks and other equity
securities are subject to market risks and fluctuations in value due to
earnings, economic conditions and other factors beyond the control of the Fund.

INDEX INVESTING RISKS Unlike other non-index mutual funds, the Fund will not buy
and sell securities based upon economic, financial and market analysis and
investment judgment. Instead, the Fund will invest using an indexed-based
investment approach, which seeks to approximate the investment performance of
the INDEX. You should not expect to achieve the potential greater results of
some actively managed funds that aggressively seek growth or attempt to limit
losses in a market decline. The Fund's initial strategy of investing in a
representative sample of the INDEX may result in some deviation between the
Fund's performance and the INDEX. The Fund's return is likely to be lower than
that of the INDEX because the Fund incurs brokerage commissions, transaction
fees and other expenses that the INDEX does not. Although the INDEX consists of
stocks from many different economic sectors, it is comprised primarily of
companies with larger market capitalizations. There is a risk that returns from
larger capitalization stocks will trail those of other asset classes or the
overall stock market.

ISLAMIC SHARI'AH INVESTMENT RISKS It is possible that the restrictions placed on
investments may result in the Fund not performing as well as mutual funds with
similar investment objectives but not subject to the Islamic Shari'ah
restrictions.

PERFORMANCE SUMMARY
--------------------------------------------------------------------------------

There is no performance information available for the Fund at this time because
the Fund has no operating history.

FEES AND EXPENSES
--------------------------------------------------------------------------------

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

SHAREHOLDER FEES

(FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS M Maximum sales charge (load)
imposed on purchases(1) None Maximum deferred sales charge (load) None Maximum
sales charge (load) imposed on reinvested dividends None Exchange fee None
Redemption fee None Maximum account fee(2) None

ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) CLASS M
Management Fees 0.75%
Distribution (12b-1) Fees 0.75%
Other Expenses(3) 0.87%
Shareholder Servicing Fee 0.25%
Other Operating Expenses 0.62%
Total Annual Fund Operating Expenses 2.37%
------------
Less Expense Reimbursement -0.72%
Net Annual Fund Operating Expenses(4) 1.65%
============

(1) Although no sales loads or transaction fees are charged, you will be
assessed fees for outgoing wire transfers and returned checks.

(2) IRA accounts are assessed a $12.50 annual fee.

(3) The percentage for "Other Expenses" totaling 0.87% is comprised of two parts
(1) an annual shareholder servicing fee of 0.25% of average daily net assets,
and (2) administration fees, transfer agency fees and all other ordinary
operating expenses of the fund estimated for the initial fiscal year at 0.62% of
average daily net assets.

(4) The Fund has an Investment Advisory and Management Agreement with the Allied
Asset Advisors, Inc., the investment advisor for the Fund, dated __________,
2000. The Agreement provides that the annual management fee shall be 0.75% of
the first $500 million in assets, 0.65% of the next $5 billion in assets and
0.50% on the amount of assets over $5.5 billion. The investment advisor has also
entered into an Expense Waiver and Reimbursement Contract dated _________, 2000
with the Fund under which the investment advisor has agreed to waive its fees
and absorb expenses to the extent that total annual fund operating expenses
exceed 1.65% for Class M shares. The Contract is in effect for one year and
expires ________, 2000.

EXAMPLE

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

1 YEAR 3 YEARS
$168 $651

MORE INFORMATION ABOUT THE DOW JONES ISLAMIC MARKET USA INDEX(SM)
--------------------------------------------------------------------------------

WHAT IS THE DOW JONES ISLAMIC MARKET USA INDEX(SM)?

The INDEX is a diverse compilation of U.S. equity securities considered by the
Shari'ah Supervisory Board of Dow Jones to be in compliance with Islamic
principles. The INDEX is constructed from the 2,700 stocks in the Dow Jones
Global Indexes (DJGI) family. Dow Jones believes that these stocks are
accessible to investors and are well traded. The DJGI methodology removes issues
that are not suitable for global investing. The INDEX includes the most liquid
U.S. securities meeting the Shari'ah investment criteria in the market, and
reflects the industry breakdown of the U.S. market.

Certain businesses are incompatible with Shari'ah Laws. Thus, stocks of
companies whose primary business is in areas not suitable for Islamic investment
purposes are excluded from the INDEX. Excluded businesses include: alcohol, pork
related products, conventional financial services (banking, insurance, etc.),
entertainment (casinos/gambling, cinema, pornography, music, hotels, etc.),
tobacco and defense.

The filters exclude companies if:

1. Total debt divided by total assets is equal to or greater than 33%. (Note:
total debt = short term debt + current portion of long-term debt + long-term
debt).

2. Accounts receivables divided by total assets is equal to or greater than 47%.
(Note: accounts receivables = current receivables + long-term receivables).

3. Non-operating interest income divided by operating income is equal to or
greater than 9%.

Companies that pass these screens are included in the INDEX'S investable
universe from which INDEX components are selected. The steps taken to select the
components of the INDEX are as follows:

1. Rank companies both by market cap and by the daily average dollar turnover
for the preceding quarter.

2. Sort stocks into their industry groups by country.

3. Select companies making up 95% of the market capitalization of each industry
group in each country and aggregate them into a Selection List.

4. Sort the selection list based on the combination score (from step 1) in
descending order.

5. Select the top 600 companies with highest market cap. (An additional 50
companies are chosen as potential replacements of components lost to
non-compliance.)

6. Select all U.S. companies from the above 600 global companies (currently 226
companies).

As of [DATE] the U.S. companies whose issues comprised the INDEX had an average
market capitalization of $___ billion dollars (U.S.) and a median market
capitalization of $__ billion (U.S.). Securities are selected for the INDEX so
as to represent the most liquid securities meeting the Shari'ah investment
criteria in the market, and to reflect the industry breakdown of the U.S.
market. Additional factors considered when applying the process described above
include relative size and turnover, economic weightings, and the relative health
of the companies.

Dow Jones' Shari'ah Supervisory Board has approved the above criteria and any
changes in the Shari'ah Supervisory Board or the selection criteria are at the
sole discretion of Dow Jones. Changes by Dow Jones in the selection criteria or
the composition of the INDEX will be reflected in the composition of the Fund in
a reasonable period of time.

HOW HAS THE INDEX PERFORMED?

The following table shows the performance of the INDEX for the past four years
ended December 31, 1999 compared to other indexes. PLEASE NOTE THAT THE
PERFORMANCE SHOWN IS NOT THE PERFORMANCE OF THE FUND AND IS NOT INTENDED TO
PREDICT OR SUGGEST THE RETURN THAT MIGHT BE EXPERIENCED IF YOU INVEST IN THE
FUND. The Fund will seek to track the INDEX as closely as possible, but the
performance of the Fund will be less than the performance of the INDEX because
the Fund is subject to operational and transaction costs, while the INDEX is
not.

[Enlarge/Download Table]

Average Annual
Benchmark Return for the Calendar Years Total Return *
-------------------------- ------------ ------------ ------------ ----------------- ---------------------------
1999 1998 1997 1996
-------------------------- ------------ ------------ ------------ ----------------- ---------------------------

DJIM US 21.68% 34.14% 30.16% 23.03% 27.25%
S&P 500 19.53% 26.67% 31.01% 20.26% 24.22%
Russell 2000 19.62% -3.45% 20.52% 14.76% 12.40%
-------------------------- ------------ ------------ ------------ ----------------- ---------------------------

* RETURN FROM 12/31/95 TO 12/31/99.

The base date for the INDEX is December 31, 1995 and the base value is set at
1000. The INDEX is reviewed quarterly, with component changes implemented on the
third Friday of March, June, September and December. This frequency assures that
the INDEX reflects the latest trends and developments in the stock market and
the companies' adherence to Islamic principles.

The INDEX is capitalization-weighted. It is calculated in real time, posted and
disseminated every 5 seconds to major market-data vendors. Calculation of the
index is based on Laspeyres' formula. It does not include reinvested dividends.

"Dow Jones" and "Dow Jones Islamic Market Index(SM)" are service marks of Dow
Jones & Company, Inc. and have been licensed for use by Allied Asset Advisors,
Inc. in connection with the Fund. The Fund is not sponsored, endorsed, sold or
promoted by Dow Jones, and Dow Jones makes no representation regarding the
advisability of investing in the Fund. Dow Jones does not consider the needs of
the Fund or its shareholders in determining, composing or calculating the index
or have any obligation to do so. See the Statement of Additional Information for
more information about Dow Jones.

SHARI'AH SUPERVISORY BOARD
--------------------------------------------------------------------------------

The INDEX is reviewed quarterly and annually by the Shari'ah Supervisory Board
and by Dow Jones for consideration of exclusion or inclusion of components. In
addition, the INDEX is reviewed on an on-going basis to contemplate changes as a
result of extraordinary events (e.g., de-listing, bankruptcy, merger,
takeover,). The Shari'ah Board is not affiliated with the Fund or the investment
advisor and does not serve as a consultant to or otherwise have any relationship
with the Fund or the investment advisor. The Shari'ah Board does not consider
the objectives or needs of the Fund or its shareholders in determining,
composing or calculating the INDEX. At the Fund's inception, the Shari'ah
Supervisory Board consisted of the following individuals:

[Enlarge/Download Table]

-------------------------------------------------- -------------------------------------------------------------------
SHARI'AH SUPERVISORY BOARD MEMBER BIOGRAPHY
- COUNTRY
-------------------------------------------------- -------------------------------------------------------------------

SHAYKH DR. ABDUL SATTAR ABU GHUDDAH Dr. Abu Ghuddah is a senior Shari`ah Advisor to Albaraka
- SYRIA Investment Co. of Saudi Arabia. He holds a PhD in Islamic Law.
Dr. Abu Ghuddah has published many books on Islamic Financial
transactions. He was an advisor for Islamic Law Encyclopaedia
(Kuwait Awqaf Ministry). Dr. Abu Ghuddah is a member and
chairman of several reputed Islamic Shari`ah Boards.
-------------------------------------------------- -------------------------------------------------------------------
SHAYKH JUSTICE MUHAMMAD TAQI USMANI Mr. Usmani has been a member of the Supreme Court of Pakistan
- PAKISTAN since 1982. He is also the vice president of Darul Uloom Karachi
and the vice chair and deputy chairman of the Islamic Fiqh
Academy (OIC), Jeddah. Mr. Usmani edits the monthly magazines
Albalagh and Albalagh International. He is a chairman or member
of the Shari`ah supervisory boards of a dozen Islamic banks and
financial institutions worldwide.
-------------------------------------------------- -------------------------------------------------------------------
SHAYKH NIZAM YAQUBY Mr. Yaquby is a member of the Islamic supervisory boards for
- BAHRAIN several Islamic institutions, including the Arab Islamic Bank and
the Abu Dhabi Islamic Bank. His work has appeared in the
following publications: Risalah Fi al-Tawbah, Qurrat al-'Ainayn
fi Fada il Birr al-Walidayn, Irshad al-'Uqala'ila Hukun al-Qira'h
min al-Mushaf fi al-Salah, Tahqia al-Amal fi Ikhraj Zakat al-Fitr
bi al-Mal.
-------------------------------------------------- -------------------------------------------------------------------
SHAYKH DR. MOHAMED A. ELGARI Dr. Elgari is an associate professor of Islamic Economics and the
- SAUDI ARABIA director of the Center for Research in Islamic Economics at King
Abdulaziz University in Saudi Arabia. He is an expert at the
Islamic Jurisprudence Academy (OIC), Jeddah. Dr. Elgari is the
editor of the Review of Islamic Economics. He is also an advisor
to several Islamic financial institutions worldwide and the
author of many books on Islamic banking.
-------------------------------------------------- -------------------------------------------------------------------
SHAYKH YUSUF TALAL DELORENZO Mr. DeLorenzo is considered a leading Islamic scholar in the
- UNITED STATES United States. He has translated over twenty books from Arabic,
Persian, and Urdu for publication in English and has been commissioned to
prepare a new translation of the Qur`an. Mr. DeLorenzo compiled the first
English translation of legal rulings issued by Shari`ah
supervisory boards on the operations of Islamic banks. He is also a Shari`ah
consultant to several Islamic financial institutions and was an advisor on
Islamic education to the government of Pakistan.
-------------------------------------------------- -------------------------------------------------------------------

MANAGEMENT OF THE FUND
--------------------------------------------------------------------------------

INVESTMENT ADVISOR

The Fund's investment advisor is Allied Asset Advisors, Inc. (AAA) located at
745 McClintock Drive, Suite 114, Burr Ridge, Illinois 60521. Subject to the
general supervision of the Fund's Board of Trustees, AAA is responsible for the
day-to-day investment decisions of the Fund in accordance with the Fund's
investment objective and policies. In exchange for these services, AAA receives
an annual management fee, which is calculated daily and paid monthly, according
to the average daily net assets of the Fund.

The Investment Advisory and Management Agreement between the Fund and AAA
provides that the annual management fee for the investment advisor will be 0.75%
on the first $500 million in assets, 0.65% on the next $5 billion in assets and
0.50% on the amount of assets over $5.5 billion. However, AAA has entered into
an Expense Waiver and Reimbursement Contract with the Fund whereby it has agreed
to waive its fees and absorb expenses to the extent that the Fund's total annual
operating expenses for Class M shares exceed 1.65% of net assets. The Expense
Waiver and Reimbursement Contract expires on ________, 2000. AAA has no other
assets under management besides the Fund.

CUSTODIAN, TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND FUND ACCOUNTANT

Firstar Bank, N.A. serves as custodian for the Fund's cash and securities.
Firstar Mutual Fund Services, LLC provides administrative, transfer agent,
dividend disbursing, and fund accounting services to the Fund.

DISTRIBUTOR

___________, Inc., serves as principal underwriter for the Fund and as such, is
the exclusive agent for the distribution of shares of the Fund. Class M shares
have a 12b-1 plan, under which a distribution fee of 0.75% is deducted from Fund
assets each year. Over time these fees will increase the cost of your investment
and may cost more than paying other types of sales charges.

CALCULATING SHARE PRICE
--------------------------------------------------------------------------------

Shares of the Fund are sold at their net asset value (NAV). The NAV for all
shares of the Fund is determined as of the close of regular trading on the New
York Stock Exchange (NYSE) (normally 4:00 p.m., Eastern time) on every business
day. The NAV for Class M shares of the Fund is calculated by dividing the sum of
the value of the securities held plus cash or other assets minus all liabilities
by the total number of Class M shares outstanding of the Fund.

The Fund's investments are valued according to market value. When a market quote
is not readily available, the security's value is based on "fair value" as
determined by the investment advisor under supervision of the Fund's Board of
Trustees.

If you place a good order (see "How to Purchase Shares") that is delivered to
the Fund before the close of the regular trading session of the NYSE on any
business day, your order will receive the share price determined for the Fund as
of that day. If your order is received after the close of the regular trading
session of the NYSE, it will receive the price determined on the next business
day.

HOW TO PURCHASE SHARES
--------------------------------------------------------------------------------

To open an account, you must invest at least the minimum amount.

MINIMUM INVESTMENTS TO OPEN TO ADD TO
YOUR ACCOUNT YOUR ACCOUNT
Regular accounts $500 $50
IRA accounts $250 $50

GOOD ORDER PURCHASE REQUESTS

When making a purchase request, make sure your request is in good order.
"Good order" means your purchase request includes:

o the NAME of the Fund
o the DOLLAR amount of shares to be purchased
o account application form or investment stub
o check payable to the "Dow Jones Islamic Index Fund"

[Enlarge/Download Table]

METHODS OF BUYING

THROUGH A You can purchase shares of the Fund through any broker-dealer organization that has a sales
BROKER/DEALER agreement with the Fund's distributor. The broker-dealer organization is responsible for
ORGANIZATION sending your purchase order to the Fund. Please keep in mind that your broker-dealer may
charge additional fees for its services.

BY MAIL To open an account, complete an account application form and send it together with your
check to the address below. To make additional investments once you have opened your
account, send your check together with the detachable form that's included with your Fund
account statement or confirmation. You may also send a letter stating the amount of your
investment with your name, the name of the Fund and your account number together with a
check to the address below. Checks should be made payable to "Dow Jones Islamic Index
Fund." No third party checks will be accepted. If your check is returned for any reason,
a $25 fee will be assessed against your account.

REGULAR MAIL OVERNIGHT DELIVERY
Dow Jones Islamic Index Fund Dow Jones Islamic Index Fund
c/o Firstar Mutual Fund Services, LLC c/o Firstar Mutual Fund Services, LLC
P.O. Box 701 615 E. Michigan Street, Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202

NOTE: The Fund does not consider the U.S. Postal Service or other independent delivery
services to be its agents. Therefore, when you deposit your account application form,
additional purchase request, or redemption request in the mail or use other delivery
services, or if your documents are simply in the transfer agent's post office box, that
does not mean that the transfer agent or the Fund actually RECEIVED those documents.

BY TELEPHONE To make additional investments by telephone, you must check the appropriate box on your account
application form authorizing telephone purchases. If you have given authorization for telephone
transactions and your account has been open for at least 15 days, call the Fund toll free at
1-800-__________ and you will be allowed to move money from your bank account to your Fund account upon
request. Only bank accounts held at U.S. institutions that are Automated Clearing House (ACH) members
may be used for telephone transactions. For security reasons, requests by telephone will be recorded.

BY WIRE To open an account or to make additional investments by wire, call 1-800-______ to notify the
Fund of the incoming wire using the wiring instructions below:

Firstar Bank, N.A.
Milwaukee, WI 53202
ABA #: 075000022
Credit: Firstar Mutual Fund Services, LLC
Account #: 112-952-137
Further Credit: Dow Jones Islamic Index Fund, Class M
(your name or the title on the account)
(your account #)

THROUGH AN Once your account has been opened, you may purchase shares of the Fund through an Automatic
AUTOMATIC Investment Plan ("AIP"). You can have money automatically transferred from your checking
INVESTMENT or savings account on a weekly, bi-weekly, monthly, bi-monthly or quarterly basis. To be
PLAN eligible for this plan, your bank must be a U.S. institution that is an ACH member. The
Fund may modify or terminate the AIP at any time. The first AIP purchase will take place no earlier
than 15 days after the Transfer Agent has received your request.

HOW TO SELL SHARES
--------------------------------------------------------------------------------

[Enlarge/Download Table]

METHODS OF SELLING

THROUGH A If you purchased your shares through a broker-dealer or other financial organization, your
BROKER/DEALER redemption order may be placed through the same organization. The organization is responsible
ORGANIZATION for sending your redemption order to the Fund on a timely basis. Please keep in mind
that your broker-dealer may charge additional fees for its services.

BY MAIL Send your written redemption request to the address below. Your request should contain the
Fund's name, your account number and the dollar amount or the number of shares to be redeemed.
Be sure to have all shareholders sign the letter. Additional documents are required for certain
types of shareholders, such as corporations, partnerships, executors, trustees, administrators,
or guardians (i.e., corporate resolutions, or trust documents indicating proper authorization).
Please see the Statement of Additional Information for more information.

The Fund's transfer agent may require a SIGNATURE GUARANTEE for certain redemption requests such
as redemption requests from IRA accounts, or redemption requests made payable to a person or an
address not on record with the Fund. A signature guarantee assures that your signature is
genuine and protects you from unauthorized account redemptions. You may obtain signature
guarantees from most trust companies, commercial banks or other eligible guarantor
institutions. A NOTARY PUBLIC CANNOT GUARANTEE SIGNATURES.

BY TELEPHONE If you are authorized to perform telephone transactions (either through your account application form
or by subsequent arrangement in writing with the Fund) you may redeem shares in any amount, but not less
than $100, by calling 1-800_________. A signature guarantee is required of all shareholders to change or
add telephone redemption privileges. For security reasons, requests by telephone will be recorded.

BY WIRE To redeem shares by wire, call the Fund at 1-800-________ and specify the amount of money you wish to
be wired. Your bank may charge a fee to receive wired funds. The transfer agent charges a $12 outgoing wire fee.

BY WRITING A CHECK On your account application form, you may select the option to receive a checkbook so that you can
redeem shares by writing checks against your Fund account. Checks may be made payable in the amount of $250
or more. Any checks drawn on a joint account will only require one signature. There is a $25 charge for
stopping payment of a check upon your request, or if the transfer agent cannot honor a check due to
insufficient funds or other valid reason. There will be a charge of $5 for issuing each checkbook.

THROUGH A If you own shares with a value of $10,000 or more, you may participate in the systematic
SYSTEMATIC withdrawal plan. The systematic withdrawal plan allows you to make automatic withdrawals from
WITHDRAWAL PLAN your Fund account at regular intervals. Money will be transferred from your Fund account to the
checking or savings account you choose on your account application form. If you expect to purchase additional
shares of the Fund, it may not be to your advantage to participate in the systematic withdrawal plan because
of the possible adverse tax consequences of making contemporaneous purchases and redemptions.

WHEN REDEMPTION PROCEEDS ARE SENT TO YOU

Your shares will be redeemed at the NAV next determined after the Fund receives
your redemption request in good order. Your redemption request cannot be
processed on days the NYSE is closed.

When making a redemption request, make sure your request is in good order. "Good
order" means your letter of instruction includes:

o the NAME of the Fund
o the DOLLAR AMOUNT or the NUMBER of shares to be redeemed
o SIGNATURES of all registered shareholders exactly as the shares are registered
o the ACCOUNT number

All requests received in good order by the Fund before the close of the regular
trading session of the NYSE (normally 4:00 p.m. Eastern time) will usually be
wired to the bank you indicate or mailed on the following day to the address of
record. In no event will proceeds be wired or a check mailed more than 7
calendar days after the Fund receives your redemption request. If you purchase
shares using a check and soon after request a redemption, the Fund will honor
the redemption request, but will not mail or wire the proceeds until your
purchase check has cleared (usually within 12 days).

REDEMPTION IN-KIND

If the amount you are redeeming is over the lesser of $250,000 or 1% of the
Fund's net asset value, the Fund has the right to redeem your shares by giving
you the amount that exceeds $250,000 or 1% of the Fund's net asset value in
securities instead of cash.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, the Fund may
mail you a notice if your account falls below $500 ($250 for IRA accounts)
requesting that you bring the account back up to $500 or close it out. If you do
not respond to the request within 30 days, the Fund may close the account on
your behalf and send you the proceeds.

DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------

The Fund will distribute substantially all of the net investment income and net
capital gains that it has realized in the sale of securities. These income and
gains distributions will generally be paid once each year, on or before December
31. Distributions will automatically be reinvested in additional shares of the
Fund, unless you elect to have the distributions paid to you in cash. If you
choose to have distribution checks mailed to you and either the U.S. Postal
service is unable to deliver the check to you or the check remains outstanding
for at least 6 months, the Fund reserves the right to reinvest the check at the
then current net asset value until you notify us with different instructions.

In general, Fund distributions are taxable to you as either ordinary income or
capital gains. This is true whether you reinvest your distributions in
additional Fund shares or receive them in cash. Any long-term capital gains the
Fund distributes are taxable to you as long-term capital gains no matter how
long you have owned your shares. If the Fund distributes realized gains soon
after you purchase shares, a portion of your investment may be treated as a
taxable distribution.

If you do not provide your social security or taxpayer identification number, or
if the IRS instructs the Fund to do so, the Fund must withhold 31% of your
taxable distributions and proceeds by law.

When you sell your shares of the Fund, you may have a capital gain or loss. The
individual tax rate on any gain from the sale of your shares depends on your
marginal tax rate and on how long you have held your shares.

Fund distributions and gains from the sale of your shares generally will be
subject to state and local income tax. Non-U.S. investors may be subject to
U.S. withholding and estate tax. You should consult your tax advisor about the
federal, state, local or foreign tax consequences of your investment in the
Fund.

SHAREHOLDER REPORTS AND CONFIRMATIONS
--------------------------------------------------------------------------------

As a shareholder, you will be provided annual and semi-annual reports showing
the Fund's portfolio investments and financial information. You will also
receive confirmations of your purchases into, and redemptions out of, the Fund.
Account statements will be mailed to you on an annual basis.

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The Fund has not commenced operations to date, therefore no financial highlights
are available for the Fund.

INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.
BURR RIDGE, ILLINOIS

DISTRIBUTOR
________________, INC.
__________ , _________

INDEPENDENT AUDITORS
_____________ LLP
___________ , _____________

LEGAL COUNSEL
VEDDER, PRICE, KAUFMAN, & KAMMHOLZ
CHICAGO, ILLINOIS

ADMINISTRATOR, TRANSFER AGENT,
AND FUND ACCOUNTANT
FIRSTAR MUTUAL FUND SERVICES, LLC
MILWAUKEE, WISCONSIN

CUSTODIAN
FIRSTAR BANK, N.A.
CINCINNATI, OHIO

WHERE TO FIND MORE INFORMATION:

You can find more information about the Fund in the following documents:

STATEMENT OF ADDITIONAL INFORMATION (SAI) DATED __________, 2000

The SAI for Class M of the Fund provides more details about the Fund's policies
and management. The Fund's SAI is incorporated by reference into this
Prospectus.

ANNUAL AND SEMI-ANNUAL REPORTS

After the Fund has been operating for the appropriate time, annual and
semi-annual reports will be made available. The Fund's annual and semi-annual
reports provide the most recent financial reports and portfolio listings. The
annual report contains a discussion of the market conditions and investment
climate that affected the Fund's performance during the last fiscal year.

You can obtain a free copy of these documents or request other information about
the Fund by calling the Fund at 1-__________ or by writing to:

DOW JONES ISLAMIC INDEX FUND
C/O FIRSTAR MUTUAL FUND SERVICES, LLC
P.O. BOX 701
MILWAUKEE, WI 53201-0701

You may write to the Securities and Exchange Commission (SEC) Public Reference
Room at the regular mailing address or the e-mail address below and ask them to
mail you information about the Fund, including the SAI. They will charge you a
fee for this duplicating service. You can also visit the SEC Public Reference
Room and copy documents while you are there. For more information about the
operation of the Public Reference Room, call the SEC at the telephone number
below.

PUBLIC REFERENCE SECTION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0102
PUBLICINFO@SEC.GOV
1-202-942-8090

Reports and other information about the Fund are available on the EDGAR Database
on the SEC's Internet site at HTTP://WWW.SEC.GOV.

1940 Act File No. 811-________

CLASS K

DOW JONES(SM) ISLAMIC INDEX FUND
PROSPECTUS

__________, 2000

INVESTMENT ADVISOR
AAA
ALLIED ASSET ADVISORS, INC.

DOW JONES(SM) ISLAMIC INDEX FUND

PROSPECTUS

__________, 2000

The Dow Jones(SM) Islamic Index Fund (the "Fund") is the first series offered by
Allied Asset Advisors Funds. This prospectus pertains to the Class K share class
and contains pertinent information about investing in the Fund. Class K shares
are not subject to any sales charges or 12b-1 fees. Please read this prospectus
carefully before investing.