FREMONT MUTUAL FUNDS
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SUPPLEMENT DATED AUGUST 31, 1998 TO PROSPECTUS DATED MARCH 1, 1998
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As of August 1, 1998, the following changes have been made to the
management structure within Fremont Investment Advisors, Inc. (the "Advisor"):
FREMONT GLOBAL FUND
Peter F. Landini has passed the Chairmanship of the Fremont Asset
Allocation Committee, which oversees the management of the Fremont Global Fund,
onto Albert W. Kirschbaum. Mr. Landini will remain on the committee as a member.
FREMONT GROWTH FUND
The Fremont Growth Fund's objective has not changed. The Advisor has
developed a new strategy to achieve the Fund's objective, which is to provide
growth of capital over the long term. The securities in the Fund's portfolio are
selected mainly from a universe of the 2,000 largest publicly traded U.S.
corporations. Central to the strategy is the use of a computer model that
emphasizes stocks with characteristics which are believed to enhance total
return. These characteristics include above average expectations for future
earnings and reasonable pricing.
The portfolio management team for the Fremont Growth Fund will be led by W.
Kent Copa and will include Debra L. McNeill and Peter F. Landini. Mr. Kosecoff
will concentrate his efforts in other areas of the organization.
FREMONT SELECT FUND
The portfolio management team for the Fremont Select Fund will be led by
John B. Kosecoff and will include Debra L. McNeill and Jeffrey J. Embersits.
Jeffrey J. Embersits is the Associate Portfolio Manager/Senior Fundamental
Analyst to the Fremont Select Fund. Mr. Embersits earned his B.A. from Wesleyan
University and his M.B.A. from International Management Development Institute in
Switzerland. He was previously employed as the Business Development Manager at
Oracle Corporation from May 1998 until July 1998. From May 1994 to April 1998,
he was Principal and Portfolio Manager with Shareholder Value Management LLC in
Foster City, California. Mr. Embersits also was a Consultant with Siemens
Corporation in New York from March 1991 to April 1994, responsible for Strategy
and Business Development.
For a discussion of the business experience of John B. Kosecoff, please
refer to the Growth Fund section of the prospectus.
For a discussion of the business experience of Debra L. McNeill, Associate
Portfolio Manager/Senior Quantitative Analyst, please refer to the Select Fund
section of the prospectus.
Mr. Landini will concentrate his efforts in other areas of the
organization.
(over)
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FREMONT CALIFORNIA INTERMEDIATE TAX-FREE FUND
The Board of Directors of Fremont Mutual Funds, Inc. has approved a new
sub-advisor for the Fremont California Intermediate Tax-Free Fund. The new
sub-advisor is Rayner Associates, Inc. ("Rayner"), located at 655 Redwood Hwy.,
Suite 370, Mill Valley, California.
Rayner is an independent, California-registered investment advisor founded
in 1977. Its principal business is providing investment management services,
managing over $200 million in investment securities and administering over 130
institutional and individual accounts. The firm's principal executive officers
are Arno A. Rayner, president, and William C. Williams, vice president. Mr.
Rayner and Mr. Williams have been with Rayner since inception, and September
1989, respectively.
Rayner concentrates on acquiring investment grade municipal bonds that are
attractively priced. To enhance returns, they analyze changes in the yield
curve, identify bonds that may be upgraded by the rating agencies and watch for
undervalued sectors in the market.
As compensation for its services, the Advisor (not the Fund) pays the
Sub-Advisor an annual fee equal to 0.20% of the Fund's average daily net assets
managed by the Sub-Advisor. The Advisor reserves day-to-day authority to
increase or decrease the amount of Fund's assets managed by Rayner.
Fremont Mutual Funds, Inc. and the Advisor have received from the
Securities and Exchange Commission an order (the "SEC Order") exempting the Fund
in the future from the provisions of the 1940 Act that require the shareholders
of the Fund to approve the Fund's sub-advisory agreement(s) and any amendments
thereto. The SEC Order permits the Advisor to hire new sub-advisors, terminate
sub-advisors, rehire existing sub-advisors whose agreements have been assigned
(and, thus, automatically terminated), and modify sub-advisory agreements
without the prior approval of shareholders. By eliminating shareholder approval
in these matters, the Advisor will have greater flexibility in managing
sub-advisors, and shareholders will save the considerable expense involved in
holding shareholder meetings and soliciting proxies. The Advisor may in its
discretion manage all or a portion of the Fund's portfolio with or without the
use of a sub-advisor.
OTHER CHANGES
As of June 22, 1998, Investors Fiduciary Trust Company ("IFTC"), 801
Pennsylvania, Kansas City, Missouri, 64105, is the new custodian for Fremont
Mutual Funds, Inc.
National Financial Data Services ("NFDS") has moved to a new location.
Their street address is now 330 W. 9th Street, Kansas City, Missouri, 64105. The
P.O. Box address listed on the "Telephone Numbers and Addresses" page of the
Prospectus is still in effect for transactions by mail.
NFDS currently serves as the Funds' Transfer Agent through a sub-delegation
from Fremont Investment Advisors, Inc. by way of State Street Bank and Trust
Company. Effective October 5, 1998, NFDS will serve as the Funds' Transfer Agent
directly. This change in status will not affect any of the procedures currently
in place relating to purchases, redemptions, exchanges, shareholder
communications or other shareholder services.
