Rule 497(e)
Registration No. 2-82710
FUNDAMENTAL FUNDS, INC.
(NEW YORK MUNI FUND)
FUNDAMENTAL FIXED-INCOME FUND
(FUNDAMENTAL U.S. GOVERNMENT
STRATEGIC INCOME FUND)
(FUNDAMENTAL HIGH-YIELD MUNICIPAL BOND FUND)
(FUNDAMENTAL TAX-FREE MONEY MARKET FUND)
THE CALIFORNIA MUNI FUND
SUPPLEMENT DATED AUGUST 12, 1998 TO
EACH FUND'S PROSPECTUS DATED MAY 1, 1998
The following descriptions of actions taken by the Boards of
the Fundamental Funds supplement and supersede any contrary information
contained in each Fund's Prospectus.
o The Boards have adopted resolutions authorizing the Fundamental Funds (the
"Funds") to terminate and abandon the Agreement and Plan of Reorganization
providing for the transfer of the assets of the Funds to separate
newly-created series of The Tocqueville Trust in exchange for shares of the
Funds. The Boards are in the process of considering alternative investment
management arrangements for the Funds and intend on or prior to September
27, 1998 to seek the approval of the Funds' shareholders of new permanent
investment management arrangements. Tocqueville Asset Management, L.P. is
continuing to serve as interim investment manager for each of the Funds.
o Pursuant to Dr. Vincent Malanga's offer of settlement of administrative
proceedings instituted by the Securities and Exchange Commission (the
"SEC") and the terms of an SEC order barring him from association with any
investment company for a period of twelve months, and prohibiting him from
working in a supervisory capacity for two years, the Boards accepted Dr.
Malanga's resignations as Chairman of the Board and as a Board Member of
the Funds. Dr. Malanga neither admitted nor denied the allegations in the
SEC order in agreeing to the settlement. The Funds were not a party to the
SEC administrative proceedings against Dr. Malanga.
