Rule 497(e)
Registration No. 2-82710
FUNDAMENTAL FUNDS, INC.
NEW YORK MUNI FUND
SUPPLEMENT DATED SEPTEMBER 11, 1997
TO
PROSPECTUS DATED APRIL 30, 1997
The following information supplements and supersedes any
contrary information contained in the Fund's Prospectus:
Fundamental Portfolio Advisors, Inc. (the "Manager") utilizes
an investment management committee to manage the assets of the Fund.
Until August 27, 1997, the committee was composed of the following
members: Christopher P. Culp, who also was affiliated with Tocqueville
Asset Management L.P., Vincent J. Malanga, a portfolio strategist
affiliated with the Manager, and Jane Tubis, a trading assistant
affiliated with the Manager. The current committee, following
Christopher P. Culp's removal, consists of Vincent J. Malanga and Jane
Tubis.
During the period April 17, 1997 to July 24, 1997, Christopher
P. Culp, the Fund's former portfolio manager, retained Tocqueville
Securities L.P. ("Tocqueville"), an affiliate of Tocqueville Asset
Management L.P., as agent to effect eight separate over-the-counter
purchase transactions. Questions were raised as to whether commissions
paid to Tocqueville as a result of such purchase transactions were
justified under the circumstances and whether or not the Fund bore
unnecessary expenses as a result of the sale of the Fund's securities
to another party and the subsequent repurchase of them through
Tocqueville. As a result of the Fund Board's directive, based upon a
report propared by the Fund's independent auditors together with the
Fund Board's analysis of the portfolio transactions, Tocqueville, on
September 9, 1997, agreed to pay $260,000 to the Fund.
It is anticipated that shareholders of the Fund will be asked
to consider and approve an Agreement and Plan of Reorganization
providing for the transfer of the Fund's assets to a separate,
newly-created Tocqueville Fund having the same investment policies and
objectives as those of the Fund at a special meeting of shareholders
scheduled to be held in the late Fall.
