LEHMAN BROTHERS FUNDS, INC.
LEHMAN BROTHERS DAILY INCOME FUND
LEHMAN BROTHERS MUNICIPAL INCOME FUND
LEHMAN BROTHERS NEW YORK MUNICIPAL INCOME FUND
Supplement Dated September 11, 1996
to Prospectuses Dated November 1, 1995 and
November 29, 1995
Please be advised that the Board of Directors of Lehman Brothers
Funds, Inc. (the "Company") has endorsed a proposal by Lehman Brothers Inc.
pursuant to which the shares of each of the Company's funds held by
Lehman's brokerage clients through Lehman's automated sweep program will be
converted to shares in a corresponding fund sponsored by Federated
Investors having a substantially identical investment objective, unless
otherwise instructed by the client. A letter explaining the conversions
will be mailed to shareholders by Lehman Brothers, which will explain the
proposal and enclose a prospectus of the corresponding Federated fund. It
is anticipated that following the conversions, the Company will be
dissolved, subject to any required approvals.
Federated Investors, founded in 1955, is a Pittsburgh-based investment
manager with approximately $70 billion in assets under management.
Federated has been a pioneer in cash management, having created the first
institutional money market fund in 1976. Federated currently offers over
40 money market funds managed specifically to meet the varying needs of
investors.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THEIR PROSPECTUSES FOR FUTURE REFERENCE
