Mosaic Focus Fund
Semi-Annual Report
June 30, 1998
(unaudited)
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Mosaic Focus Fund
Portfolio of Investments - June 30, 1998 (unaudited)
Number
of
Shares Value
COMMON STOCKS: 95.6% of net assets
CONSUMER PRODUCTS - CYCLICAL: 10.1%
McDonalds Corporation 720 $49,680
Tele-communications, Inc.* 1,375 52,851
CONSUMER STAPLES - FOOD & BEVERAGE: 5.0%
PepsiCo, Inc. 1,230 50,661
CONSUMER PRODUCTS - HOUSEHOLD PRODUCTS: 4.2%
Kimberly-Clark Corporation 930 42,664
CONSUMER RETAIL: 16.5%
Federated Department Stores, Inc. 910 48,969
Safeway, Inc. 2,900 117,994
FINANCIAL - BANKS: 19.3%
Chase Manhattan Corporation 600 45,300
First Union Corporation 780 45,435
Norwest Corporation 2,795 104,463
FINANCIAL - SERVICES: 10.9%
Federal Home Loan Mortgage Corporation 2,350 110,597
HEATHCARE - PHARMACEUTICALS: 16.6%
Abbott Laboratories 1,180 48,232
Merck 890 119,037
HEATHCARE - MEDICAL
PRODUCTS/OTHER: 4.8%
Johnson & Johnson 660 48,675
TECHNOLOGY - HARDWARE: 8.2%
Compaq Computer Corporation 1,530 43,414
Hewlett-Packard Company 650 38,919
TOTAL COMMON STOCKS
(Cost $861,218) $966,891
SHORT TERM INVESTMENTS: 4.2% of net assets
REPURCHASE AGREEMENT
With Donaldson, Lufkin & Jenrette Securities
Corporation issued 6/30/98 at 5.50%, due
7/1/98, collateralized by $44,134 in
United States Treasury Notes due 7/31/98.
Proceeds at maturity are $43,007.
(Cost $43,000) $43,000
TOTAL INVESTMENTS
(Cost $904,218)+ $1,009,891
CASH AND RECEIVABLES LESS LIABILITIES: 0.2% of net
assets $1,560
NET ASSETS: 100% $1,011,451
+ Equals aggregate cost for federal income tax purposes.
* Non-income producing.
Mosaic Focus Fund
Statement of Assets and Liabilities
June 30, 1998 (unaudited)
ASSETS
Investments, at value (Notes 1 and 2)
Investment securities $966,891
Repurchase Agreement 43,000
Total Investments $1,009,891
Cash 793
Receivables
Dividends and interest 767
Total Assets $1,011,451
NET ASSETS (Note 7) $1,011,451
CAPITAL SHARES OUTSTANDING 43,296
NET ASSET VALUE PER SHARE $23.36
Mosaic Focus Fund
Statement of Operations
For the Six Months Ended June 30, 1998
Six Months Ended
June 30, 1998
INVESTMENT INCOME (Note 1)
Interest income $1,959
Dividend income 5,300
Total investment income $7,259
EXPENSES (Note 3 and 5)
Investment advisory fee $3,502
Transfer agent, administrative,
registration and professional expenses 2,308
Total expenses $5,810
NET INVESTMENT INCOME $ 1,449
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments $33,689
Change in net unrealized appreciation
of investments 105,673
NET GAIN ON INVESTMENTS $139,362
TOTAL INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $140,811
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Mosaic Focus Fund
Statements of Changes in Net Assets
For the Period Indicated
Six Months Ended Year Ended
June 30, 1998 December 31, 1997
(See Note 1)
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS
Net investment income $1,449 $3,066
Net realized gain on investments 33,689 153,547
Net unrealized appreciation (depreciation)
of investments 105,673 (42,374)
Total increase in net assets
resulting from operations $140,811 $114,239
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (4,168) (1,043)
From net capital gains (43,024) (144,212)
Total distributions $(47,192) $(145,255)
CAPITAL SHARE TRANSACTIONS (Note 8) $117,727 $195,903
TOTAL INCREASE IN NET ASSETS $211,346 $164,887
NET ASSETS
Beginning of period $800,105 $635,218
End of period $1,011,451 $800,105
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Mosaic Focus Fund
Financial Highlights
Selected Per Share Data and Ratios
Selected data for a share outstanding throughout period:
Six Months Ended Year Ended
June 30, 1998 December 31, 1997
(See Note 1)
NET ASSET VALUE:
Beginning of period $21.09 $21.77
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.10 0.08
Net realized and unrealized gains on
securities 3.31 3.86
Total from investment operations $3.41 $3.94
LESS DISTRIBUTIONS:
Dividends from net income (0.10) (0.03)
Capital gain distributions (1.04) (4.59)
$(1.14) (4.62)
NET ASSET VALUE:
End of period $23.36 $21.09
TOTAL RETURN: 16.18% 18.14%
RATIOS:
Operating expenses to average net
assets 1.25%1 1.09%
Net income to average net assets 0.32% 0.43%
Portfolio turnover rate 0.56% 1.13%
1 Annualized.
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Mosaic Focus Fund
Notes to Financial Statements
June 30, 1998
1. Significant Accounting Principles. Mosaic Focus Fund adopted its current
investment objectives and policies after December 31, 1997. Effective January
1, 1998, the Fund became a nondiversified equity fund organized as a
Massachusetts Business trust. Prior to 1998, the Fund was known as Madison
Opportunity Fund, Inc. Madison Opportunity Fund, Inc. was a diversified, small-
to-mid-cap growth portfolio that was never publicly offered to investors. Its
portfolio was liquidated prior to 1998. As such, the financial information
presented in this report for periods prior to January 1, 1998, may not be
indicative of the operations or performance of the Fund under its current
investment objectives, policies and operations. The Fund is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company. Its effective registration under Securities Act of 1933 was
on July 9, 1998.
The following is a summary of significant accounting principles followed by the
Fund in the preparation of its financial statements. Their policies are in
conformity with generally accepted accounting principles.
(a) The market quotation for each security is the last reported sale price on a
national securities exchange, or, in the case of Over-The-Counter securities,
the mean between bid and ask. Other securities for which quotations are not
readily available are valued at fair value as determined by the Board of
Directors. Short-term securities (maturing within 60 days) are valued on the
basis of amortized cost. Securities with maturities in excess of 60 days are
valued at market value. The cost of investments sold is determined on the
identified cost basis for financial statements and federal income tax purposes.
(b) No provision is made for Federal income taxes since it is the intention of
the Fund to comply with the provisions of the Internal Revenue Code available to
investment companies, and to make the requisite distribution to shareholders of
taxable income which will be sufficient to relieve it from all or substantially
all Federal income taxes.
(c) The Fund follows industry practice and records security transactions within
one day of the trade date. Dividend income is recognized on the ex-dividend
date and interest income is accrued on a daily basis.
Use of Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
reported amounts of increases and decreases in net assets from operations during
the reporting period. Actual results could differ from those estimates.
2. Investments in Repurchase Agreements. When the Fund purchases securities
under agreements to resell, the securities are held for safekeeping by the
custodian bank as collateral. Should the market value of the securities
purchased under such an agreement decrease below the principal amount to be
received at the termination of the agreement plus accrued interest, the
counterparty is required to place an equivalent amount of additional securities
in safekeeping with the Fund's custodian bank. Repurchase agreements may be
terminated within seven days. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having Advisory and Services Agreements with the same
advisor, transfers uninvested cash balances into a joint trading account. The
aggregate balance in this joint trading account is invested in one or more
consolidated repurchase agreements whose underlying securities are U.S. Treasury
or federal agency obligations.
3. Investment Advisory Agreement. The investment advisory agreement with
Madison Mosaic, LLC, provides for an annual management fee of .75 of 1% on the
average net assets of the Fund. The Fund paid Madison Mosaic, LLC $3,502 in
advisory fees for the six months ended June 30, 1998. Certain officers and
directors of the Fund are also officers and directors of Madison Mosaic, LLC and
Madison Investment Advisors, Inc. The Investment Advisory Agreement was
approved by the stockholders of the Fund on July 9, 1998.
4. Investment Transactions. For the six months ended June 30, 1998, the
purchases and sales of investment securities (excluding short-term securities)
were $1,269,120 and $441,590, respectively.
5. Other Expenses. All expenses and support services are provided by the
Advisor under a Services Agreement for fees based on a percentage of average net
assets. For the six month period ended June 30, 1998, such expenses paid by
the Focus Fund were $2,308. This amount was equal to an annualized rate of
.50% of the average net assets during the period.
6. Aggregate Cost of Securities. The aggregate cost of securities for Federal
income tax purposes is $904,218. The aggregate gross unrealized appreciation
for all securities in which there is an excess of value over tax cost is
$105,673. The aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounts to $0. The net
unrealized appreciation at June 30, 1998, for all securities is $105,673.
8. Net Assets. At June 30, 1998, net assets include the following:
Net paid in capital on shares of beneficial interest $905,778
Net unrealized appreciation of investment 105,673
Total net assets $1,011,451
9. Capital Shares Transactions. 500,000 shares of capital shares, with a $.01
par value, are authorized. Transactions in capital shares for the following
period were:
Six Months Ended Year Ended
June 30, 1998 December 31, 1997
In Dollars
Shares sold $259,942 $95,914
Shares issued in reinvestment
of dividends 47,191 137,857
Total shares issued 307,133 233,771
Shares redeemed (189,406) (37,868)
Net increase $117,727 $195,903
In Shares
Shares sold 12,088 3,654
Shares issued in reinvestment
of dividends 2,020 6,527
Total shares issued 14,108 10,181
Shares redeemed (8,744) (1,426)
Net increase $5,364 $8,755
