As Filed with the
Commission on July 31, 1997
Registration No. 2-63713
SEC File No. 811-2910
Securities and Exchange Commission
Washington, D.C.
Form N-1A
Registration Statement Under The Securities Act Of 1933 X
Pre-Effective Amendment No. _____
Post-Effective Amendment No. 20 X
Registration Statement Uuder The Investment Company Act
of 1940 X
Amendment No. 22
Mosaic Government Money Market Trust
(Exact Name of Registrant as Specified in Charter)
1655 Fort Myer Drive, Arlington, Virginia 22209
Registrant's Telephone Number: (703) 528-3600
W. Richard Mason, Assistant Secretary
Mosaic Government Money Market
1655 Fort Myer Drive
Arlington, Virginia 22209
(Name and Address of Agent for Service)
Copies to:
John Rashke, Esquire
DeWitt Ross & Stevens, LC
8000 Excelsior Drive
Madison, Wisconsin 53717
David Leahy, Esquire
Sullivan & Worcester, LLP
1025 Connecticut Avenue, N.W.
Washington, D.C. 20036
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective:
__X__ immediately upon filing pursuant to Rule 485(b)
_____ on ________________ pursuant to Rule 485(b)
_____ 60 days after filing pursuant to Rule 485(a)(1)
_____ on ________________ pursuant to Rule 485(a)(1)
_____ 75 days after filing pursuant to Rule 485(a)(2)
_____ on ________________ pursuant to Rule 485(a)(2)
The Registrant has registered an indefinite number of
its shares pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Registrant's Notice under Rule
24f-2 for the fiscal year ended March 31, 1997 was filed on May 28, 1997.
<PAGE>
Cross-Reference Sheet
Form N1-A
Part A, Information Required in a Prospectus
Item 1 Inside cover Page
Item 2 Expense Summary
Item 3 Financial Highlights
Item 4 Inside cover, About Mosaic Government Money Market,
Investment Objective, Investment
Policies
Item 5 Management of the Trust
Item 5A Incorporated by reference in the
Registrant's annual report
Item 6 The Trust and Its Shares, Dividends,
Performance Information, Taxes
(including Federal Tax Considerations
and State Tax Considerations), Net
Asset Value, How to Purchase Shares and
How to Redeem Shares) and rear cover page
Item 7 How to Purchase Shares
Item 8 How to Redeem Shares
(Additional Charges and Closing An Account)
Item 9 Not applicable
Part B, Items Required in a Statement of
Additional Information
Item 10 Cover page
Item 11 Table of Contents (Cover page)
Item 12 Introductory Information
Item 13 Supplemental Investment Policies,
Investment Limitations
Item 14 The Investment Advisor, Trustees and
Officers
Item 15 Organization of the Trust, Trustees and
Officers
Item 16 The Investment Advisor, Administrative
and Other Expenses, Custodians and
Special Custodians,
Item 17 Fund Transactions
Item 18 Organization of the Trust
Item 19 Share Purchases, Share Redemptions,
Declaration of Dividends, Determination
of Net Asset Value
Item 20 Additional Tax Matters
Item 21 Not applicable
Item 22 Yield and Total Return Calculations
Item 23 Annual and Semi-Annual Reports are
incorporated by reference and discussed
in Financial Statements and Independent
Auditors' Report, Legal Matters & Inde-
pendent Auditors, Additional Information
Part C, Other Information
Items 24 through 32 follow Part B
<PAGE>
Mosaic Government Money Market
Prospectus
July 31, 1997
Mosaic Funds
<PAGE>
Prospectus/July 31, 1997
1655 Fort Myer Drive, Arlington, Virginia 22209-3108
Mosaic Government Money Market Trust
Mosaic Government Money Market
Mosaic Government Money Market is a money market mutual fund whose goal
is to obtain the highest possible current income, consistent with
investment solely in short-term debt securities issued or guaranteed by
agencies and instrumentalities of the United States Government.
Investments in the Trust are neither insured nor guaranteed by the
United States Government. The Trust is managed for a stable $1.00 share
price, although there can be no assurance that this share price will be
maintained.
Features
No commissions or sales charges
$1,000 minimum initial investment
No "12b-1" expenses
Checking privileges
Dividends accrue every day and can be paid by
check, electronic funds transfer, or reinvested monthly
Invest or withdraw funds by phone
or by mail
This Prospectus is intended to be a concise statement of information
which investors should know before investing. After reading the
Prospectus, it should be retained for future reference. A paper copy of
the prospectus is available to investors who received an electronic
prospectus without charge by calling or writing the Trust.
A Statement of Additional Information concerning the Trust, bearing the
same date as this Prospectus, has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. It is
available without charge by calling or writing the Trust.
The Commission maintains a Worldwide Web site that contains reports,
proxy information statements and other information regarding the Trust
at http://www.sec.gov.
Shares of the Trust are not deposits or obligations of, or guaranteed or
endorsed by any bank. Shares are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other
agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
BANKERS FINANCE ADVISORS, LLC
Investment Advisor
TABLE OF CONTENTS
About Mosaic Government Money Market 3
Expense Summary 3
Financial Highlights 4
Investment Objective 4
Investment Policies 4
Management of the Trust 6
The Trust and Its Shares 6
Dividends 7
Performance Information 7
Taxes 7
Net Asset Value 7
Shareholder Account Transactions 8
How to Open a New Account 8
How to Purchase Additional Shares 9
How to Redeem Shares 9
Other Fees and Services 11
CUSTODIAN
Star Bank, N.A.
Cincinnati, OH 45202
INDEPENDENT AUDITORS
Ernst & Young LLP
TELEPHONE NUMBERS
Shareholder Services
Washington, DC area: 703-528-6500
Toll-free nationwide: 888-670-3600
Mosiac Tiles (24-Hour automated information)
Toll-free nationwide: 800-336-3063
About Mosaic Government Money Market
Mosaic Government Money Market (the "Trust") is a diversified open-end
management investment company, commonly known as a money market fund.
The Trust was organized as a Massachusetts business trust under a
Declaration of Trust dated February 14, 1979, then known as Government
Investors Trust. The Trust is managed by Bankers Finance Advisors, LLC,
a division of Madison Investment Advisors, Inc. (the "Advisor") of the
same address as the Trust. Only one series of the Trust's shares is
currently authorized.
Expense Summary
The purpose of this table is to assist investors in understanding the
various costs and expenses that an investor will bear directly or
indirectly (see also "Management of the Trust" below).
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases None
Redemption Fee None
Exchange Fee None
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fee 0.50%
Other Expenses* 0.55%
Total Fund Operating Expenses* 1.05%
*Reflects custodian fees paid indirectly.
Example: 1 Year 3 Years 5 Years 10 Years
You would pay the following expenses on a $1,000
investment, assuming (1) a five percent annual return
and (2) redemption at the end of each time period:
$11 $33 $58 $128
The hypothetical example shown above is based on the expense levels
listed under the caption "Annual Fund Operating Expenses" and is
intended to provide the investor with an understanding of the level of
expenses that might be incurred in the future. The five percent return
used in the example is arbitrary and is for illustrative purposes only.
It should not be considered representative of the Trust's past or future
performance, nor should the expenses in the example be considered
representative of future expenses, which may actually be greater or less
than those shown.
Additional fees and transaction charges described
elsewhere in this prospectus, if applicable, will increase the level of
expenses that can be incurred (fees for certain wire transfers, stop
payments on checks, bounced investment checks, and retirement plans are
described on pages 8-11).
Financial Highlights
The financial highlights data for a share outstanding and other
performance information for the fiscal year ended March 31, 1997
appearing below is derived from the financial statements audited by
Ernst & Young LLP, independent auditors, whose report appears in the
Annual Report to Shareholders. This report is incorporated by reference
in the Statement of Additional Information and can be obtained by
calling the Trust. The tabulation below of information for the fiscal
years ended March 31, 1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995 and
1996 has also been derived from the financial statements audited by
Ernst & Young LLP. The Trust experienced no net gains or losses on
securities and provided no distributions from capital gains or returns
of capital for the fiscal years shown below.
<TABLE>
Year ended March 31,
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997* 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net asset
value
beginning
of period $1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Net
investment
income $0.043 0.045 0.037 0.021 0.024 0.044 0.067 0.080 0.072 0.060
Total from
investment
operations $0.043 0.045 0.037 0.021 0.024 0.044 0.067 0.080 0.072 0.060
Distributions
from net
investment
income $(0.043)(0.045)(0.037)(0.021)(0.024)(0.044)(0.067)(0.080)(0.072)(0.060)
Total
Distributions$(0.043)(0.045)(0.037)(0.021)(0.024)(0.044)(0.067)(0.080)(0.072)(0.060)
Net asset
value end
of year $1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Total
Return 4.38% 4.62% 3.80% 2.08% 2.44% 4.44% 6.96% 8.28% 7.48% 6.19%
Net assets
at end of
period
(thousands) $54,687 57,197 64,541 78,090 88,911 117170 153206 173438 171144 184255
Ratio of
expenses to
average net
assets1 1.05% 1.23% 1.16% 1.11% 1.06% 1.06% 1.05% 1.04% 1.01% 1.01%
Ratio of
net
investment
income to
average
net assets 4.29% 4.52% 3.70% 2.08% 2.44% 4.41% 6.69% 7.99% 7.21% 6.01%
1 For the year ended March 31, 1996 and thereafter, ratio reflects
custodian fees paid indirectly.
* Effective July 31, 1996, the investment advisory services transferred
to Bankers Finance Advisors, LLC/Madison Investment Advisors, Inc.
from Bankers Finance Investment Management Corp.
Investment Objective
The investment objective of the Trust is to obtain the highest possible
current income, consistent with the relative safety of U.S. Government
securities and with providing liquidity and price stability to
shareholders' investments in the Trust. Considerations of relative
safety, liquidity and price stability limit the Trust's investments to
shorter-term U.S. Government securities which may not yield as high a
level of current income as is normally available from longer-term or
lower-rated securities. The Trust's investment objective may be changed
without shareholder approval; however, shareholders will receive prior
written notice of any material change. There is no assurance that the
Trust's investment objective will be achieved.
Investment Policies
The Trust's fundamental investment policies, which may not be changed
without a shareholder vote, limit its investments to securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities.
The Trust expects that a substantial portion of its assets will be
invested in repurchase agreements collateralized by U.S. Government
securities. The Trust intends normally to hold portfolio securities to
maturity; historically, securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities have involved little
risk to principal and interest if held to maturity.
The Trust will limit purchases of investments to securities having a
maximum effective maturity of 13 months or less. The Trust will not
purchase any investment which would, at the time of purchase, cause the
average effective maturity of the Trust to exceed 90 days. As used in
this Prospectus, the term "effective maturity" means either the actual
time between purchase and the stated maturity date of the investment,
the time between its scheduled interest rate adjustment dates, or the
time between its purchase settlement and its future resale arranged at
the time of purchase under fixed terms. The Trust's portfolio will be
managed in conformity with regulations of the Securities and Exchange
Commission applicable to funds seeking to maintain a constant share
price of $1.00. The Trust will not invest more than 10 percent of its
total assets in securities which cannot be liquidated in seven days. The
Trust normally expects to hold investments to maturity, except to the
extent liquidity requirements indicate otherwise.
U.S. Government Securities. U.S. Government securities include a variety
of securities which are issued or guaranteed by the U.S. Treasury,
various agencies of the federal government and various instrumentalities
which have been established or sponsored by the U.S. Government, and
certain interests in the foregoing types of securities. Treasury
securities include notes, bills and bonds. Obligations of the Government
National Mortgage Association, the Federal Home Loan Banks, the Federal
Farm Credit System, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, the Small Business Administration
and the Student Loan Marketing Association are also considered U.S.
Government securities. Except for Treasury securities, these obligations
may or may not be backed by the "full faith and credit" of the United
States.
Some federal agencies have authority to borrow from the U.S. Treasury
while others do not. In the case of securities not backed by the full
faith and credit of the United States, the investor must look
principally to the agency issuing or guaranteeing the obligation for
ultimate repayment, and may not be able to assert a claim against the
United States itself in the event the agency or instrumentality does not
meet its commitments.
Specialized Investment Techniques
To achieve its investment objective, the Trust may use certain
specialized investment techniques, including investment in specialized
kinds of government agency securities, investment in "floating rate"
government securities, use of repurchase agreement transactions,
investment in matched purchase/sale transactions and investments
purchased for forward delivery. These techniques may involve certain
risks, some of which are summarized below, and discussed further in the
Statement of Additional Information.
Certain specialized government agency securities may provide higher
yields than are available from more common types of government-backed
investments. However, such specialized investments may be available from
a few sources, in limited amounts, or only in very large denominations;
they may also require special capabilities in portfolio servicing and in
legal matters relating to government guarantees. Such securities may
have limited marketability, which might make it difficult for the Trust
to dispose of them advantageously; accordingly, the Trust intends
normally to hold such securities to maturity or pursuant to repurchase
agreements.
"Floating rate" government agency securities pay an interest rate which
is adjusted (i.e., "floats") at regular intervals in a fixed
relationship to a published interest rate such as the "prime" rate of a
given bank. Such securities may offer higher yields than are available
from short-term securities and may be less susceptible to market value
fluctuations than securities of longer stated maturities which do not
float. The stated maturities of floating rate securities, which could be
as long as 30 years, may limit their investment flexibility. Such
securities may be available only in large denominations, may require
specialized servicing and accounting capabilities, and may have limited
marketability, which might make it difficult for the Trust to dispose of
them advantageously.
Repurchase agreements involve the sale of securities to the Trust by a
financial institution or securities dealer, simultaneous with an
agreement by that institution to repurchase the same securities at the
same price, plus interest, at a later date. The Trust will limit
repurchase agreement transactions to those financial institutions and
securities dealers who are deemed creditworthy pursuant to guidelines
adopted by the Trust's Board of Trustees. The Advisor will follow a
procedure designed to ensure that all repurchase agreements acquired by
the Trust are always at least 100 percent collateralized as to principal
and interest. When investing in repurchase agreements, the Trust relies
on the other party to complete the transaction on the scheduled date by
repurchasing the securities. Should the other party fail to do so, the
Trust would end up holding securities it did not intend to own. Were it
to sell such securities, the Trust might incur a loss. In the event of
insolvency or bankruptcy of the other party to a repurchase agreement,
the Trust could encounter difficulties and might incur losses upon the
exercise of its rights under the repurchase agreement.
Investment Considerations
The Trust's investment policies may involve certain risks. For example,
the market value of the fixed income securities in which the Trust
invests will tend to decline as prevailing interest rates rise and
increase as prevailing interest rates fall. The magnitude of this change
increases with the maturity of portfolio securities. The Trust may
invest in "floating rate" government agency securities, in repurchase
agreements, in matched purchase/sale transactions and in investments
purchased for forward delivery, all of which may involve certain risks;
see "Specialized Investment Techniques" above and in the Statement of
Additional Information.
Management of the Trust
The Trustees. Under the terms of the Declaration of Trust, which is
governed by the laws of the Commonwealth of Massachusetts, the Trustees
are ultimately responsible for the conduct of the Trust's affairs. They
serve indefinite terms of unlimited duration and they appoint their own
successors, provided that always at least two-thirds of the Trustees
have been elected by shareholders. The Declaration of Trust provides
that a Trustee may be removed at any special meeting of shareholders by
a vote of two-thirds of the Trust's outstanding shares.
The Advisor. Bankers Finance Advisors, LLC is a division of Madison
Investment Advisors, Inc., 6411 Mineral Point Road, Madison, Wisconsin
("Madison"). Bankers Finance Advisors, LLC administers approximately
$200 million in assets and manages the Mosaic family of mutual funds,
which includes stock, bond and money market portfolios. Madison, a
registered investment advisory firm for over 23 years, provides
professional portfolio management services to a number of clients,
including stock and bond mutual funds, and has approximately $3 billion
under management. The Advisor is responsible for the day-to-day
administration of the Trust's activities.
The Advisor is controlled by Madison. The Advisor purchased the
investment management assets of Bankers Finance Investment Management
Corp., the previous adviser to the Trust, effective July 31, 1996. The
Advisor has the same address as the Trust.
Compensation. For its services under its Investment Advisory Agreement
with the Trust, the Advisor receives a fee, payable monthly, calculated
as 1/2 percent per annum of the average daily net assets of the Trust.
The Advisor may, in turn, compensate certain financial organizations for
services resulting in shareholder purchases of Trust shares.
Distributor. GIT Investment Services, Inc. of the same address as the Trust acts as the Trust's distributor.
Services Agreement. Under a separate Services Agreement with the Trust,
the Advisor provides certain operational and other support services for
which it receives a fee intended to be at or below the cost of providing
such services. Such fee is subject to review and approval at least
annually by the Trustees.
Transfer and Dividend Paying Agent. The Trust acts as its own transfer
agent and dividend paying agent.
Expenses. The Trust is responsible for all of its expenses not assumed
by the Advisor, including the costs of the following: shareholder
services; legal, custodian and audit fees; trade association
memberships; accounting; certain Trustees' fees and expenses; fees for
registering the Trust's shares; the preparation of prospectuses, proxy
materials and reports to shareholders; and the expense of holding
shareholder meetings. For the fiscal year ending March 31, 1997, the
expenses paid by the Trust, including advisory fees and reimbursable
expenses paid to the Advisor, were $570,198.
The Trust and Its Shares
Under the terms of the Declaration of Trust, the Trustees may issue an
unlimited number of whole and fractional shares of beneficial interest
without par value for each series of shares they have authorized. All
shares issued will be fully paid and nonassessable and will have no
preemptive or conversion rights. Under Massachusetts law, the
shareholders, under certain circumstances, may be held personally liable
for the Trust's obligations. The Declaration of Trust, however, provides
indemnification out of Trust property of any shareholder held personally
liable for obligations of the Trust.
Only one series of the Trust's shares is currently authorized. Each
share has one vote and fractional shares have fractional votes. Except
as otherwise required by applicable regulations, any matter submitted to
a shareholder vote will be voted upon by all shareholders without regard
to series or class. For matters where the interests of separate series
or classes are not identical, the question will be voted on separately
by each affected series or class. Voting is not cumulative.
The Trust does not intend to have regular shareholder meetings.
Shareholder inquiries can be made to the offices of the Trust at the
address on the cover of this Prospectus.
Dividends
The Trust's net income is declared as dividends each business day.
Dividends are paid in the form of additional shares credited to investor
accounts at the end of each calendar month, unless a shareholder elects
in writing to receive a monthly dividend payment by check or direct
deposit. Any net realized capital gains will be distributed at least
annually.
Performance Information
From time to time, the Trust advertises its yield and effective yield.
Both figures are based on historical data and are not intended to
indicate future performance.
For advertising purposes, the yield is calculated according to a
standard formula prescribed by the Securities and Exchange Commission.
This formula divides the net income earned on one share during a given
seven-day period by the initial value of that share (normally $1.00),
and expresses the result as an annualized percentage.
The Trust's "effective yield" is calculated in a similar manner, except
that the net income earned during a seven-day period is assumed to be
reinvested at the same rate over a full year. This calculation results
in a slightly higher yield figure which shows the effect of compounding.
The Trust may also cite the ranking or performance of its Portfolio as
reported in the public media or by independent performance measurement
firms. Further information on the methods used to calculate the Trust's
yield may be found in the Trust's Statement of Additional Information.
Taxes
Federal
For federal income tax purposes, the Trust intends to maintain its
status under Subchapter M of the Internal Revenue Code (the "Code") as a
regulated investment company by distributing to shareholders 100% of its
net income and net capital gains, if any, by the end of its fiscal year.
The Code also requires the Trust to distribute at least 98% of its net
income and capital gains realized from the sale of investments by
calendar year-end in order to avoid a 4% excise tax. The capital gain
distribution is determined as of October 31 each year. Capital gain
distributions, if any, are taxable to the shareholder. The Trust will
send shareholders an annual notice of dividends and other distributions
paid during the year.
State and Local
At the state and local level, dividend income and capital gains are
generally considered taxable income. Interest on certain U.S.
Government securities held by the Trust would be exempt from state and
local income taxes if held directly by the shareholder. Because tax laws
vary from state to state, shareholders should consult their tax advisers
concerning the impact of mutual fund ownership in their own tax
jurisdictions.
Certification of Tax Identification Number
Shareholders who fail to provide a valid social security or tax
identification number may be subject to federal withholding at a rate of
31% of dividends and capital gain distributions. Investors are advised
to retain all statements received from the Trust and to maintain
accurate records of their investments.
Net Asset Value
The net asset value per share of the Trust is calculated at the close of
the New York Stock Exchange each day it is open for trading.
Net asset value per share is determined by adding the value of all
securities and other assets, subtracting liabilities and dividing the
result by the total number of the Trust's outstanding shares. The
Trust's securities are valued according to the "amortized cost" method,
which is intended to stabilize the share price at $1.00.
Shareholder Account Transactions
Please call a Mosaic Account Executive if you have any questions. Our
local number in the Washington, DC area is (703) 528-6500 and our toll-
free nationwide number is (888) 670-3600.
Confirmations and Statements
Daily Transaction Confirmation. All purchases and redemptions are
confirmed in writing with a transaction confirmation. Transaction
confirmations are usually mailed within a day or two after the
transaction is posted to the account.
Quarterly Statement. Quarterly statements are mailed at the end of each
calendar quarter. The statements reflect account activity for the most
recent quarter. At the end of the calendar year, the statement will
reflect account activity for the entire year.
It is strongly recommended that shareholders retain all daily
transaction confirmations until they receive their quarterly statements.
Likewise, shareholders should retain all of the quarterly statements
until they receive the year-end statement showing the activity for the
entire year.
Changes to an Account
To make any changes to an account, it is recommended that shareholders
call an Account Executive to discuss the changes to be made and inquire
about any necessary documentation. Though some changes may be made by
phone, generally, in order to make any changes to an account, Mosaic may
require a written request signed by all of the shareholders with their
signatures guaranteed.
Telephone Transactions. The options to initiate exchanges and certain
redemptions and to obtain account balance information by telephone are
available automatically to all shareholders. Mosaic will employ
reasonable security procedures to confirm that instructions communicated
by telephone are genuine; and if it does not, it may be liable for
losses due to unauthorized or fraudulent transactions. These procedures
can include, among other things, requiring one or more forms of personal
identification prior to acting upon telephone instructions, providing
written confirmations and recording all telephone transactions. Certain
transactions, including account registration changes, must be authorized
in writing.
Certificates. Certificates will not be issued to represent shares in
the Trust.
How to Open a New Account
Minimum Initial Investment
$1,000 for a regular account
$500 for an IRA account
By Check
New accounts may be opened by completing an application and forwarding
it along with a check payable to Mosaic Funds to:
Mosaic Funds
1655 Fort Myer Drive, Suite 1000
Arlington, VA 22209-3108
By Wire
Please call Mosaic before money is wired to ensure proper and timely
credit.
When a new account is opened by wire, the shareholder is required to
submit a signed application promptly thereafter. Payment of redemption
proceeds is not permitted until a signed application is received in
proper form by Mosaic. Please wire money to:
Star Bank, NA
Cinti/Trust
ABA # 0420-0001-3
Credit Mosaic Acct # 48038-8883
(Shareholder name and account number)
Wire Fee. There may be a charge of $6.00 for processing incoming wires
of less than $1,000.
By Exchange
Shareholders may open a new account by exchange from an existing account
when the account registration and tax identification number will remain
the same. A new account application is required only when the account
registration or tax identification number will differ from that on the
application for the original account. Exchanges may only be made into
funds that are sold in the shareholder's state of residence.
How to Purchase Additional Shares
Purchase Price. Share prices (net asset values) are determined every
day that the NY Stock Exchange is open. Purchases are priced at the
next share price determined after the purchase request is received in
proper form by Mosaic.
Purchases and Uncollected Funds. To protect shareholders from loss or
dilution resulting from deposit items that are returned unpaid, the
proceeds of any redemption may be delayed 10 days or more until it can
be determined that the check or other deposit item (including purchases
by Electronic Funds Transfer "EFT") used for purchase of the shares has
cleared. Such deposit items are considered "uncollected," until Mosaic
has determined that they have actually been paid by the bank on which
they were drawn. Purchases made by federal funds wire or U.S. Treasury
check are considered collected when received and not subject to the 10
day hold. All purchases earn dividends from the day after the day of
credit to a shareholder's account, even while not collected.
By Check
Subsequent investments may be made for $50 or more. Please make check
payable to Mosaic Funds and mail it along with an investment slip or an
indication as to which fund and account it should be credited.
Mosaic Funds
PO Box 640393
Cincinnati, OH 45264-0393
By Wire
Shareholders should call Mosaic before the money is wired to ensure
proper and timely credit.
Please wire money to:
Star Bank, NA
Cinti/Trust
ABA # 0420-0001-3
Credit Mosaic Acct # 48038-8883
(Shareholder name and account number)
Wire Fee. There may be a charge of $6.00 for processing incoming wires
of less than $1,000.
By Automatic Investment Plan
Shareholders may elect to have an automatic investment plan whereby
Mosaic will automatically initiate a credit to their Mosaic account and
debit the bank account they designate each month. The automatic
investment is processed as an electronic funds transfer (EFT). To
establish an automatic investment plan, complete the appropriate section
of the application or call an Account Executive for information. The
minimum monthly amount for an EFT is $100. Shareholders may change the
amount or discontinue the automatic investment plan any time.
How to Redeem Shares
Redemption Price. Share prices (net asset values) are determined every
day that the NY Stock Exchange is open. Redemptions are priced at the
next share price determined after the redemption request is received in
proper form by Mosaic.
Signature Guarantees. To protect shareholder investments, Mosaic
requires signature guarantees for certain redemptions.
A signature guarantee helps Mosaic ensure the identity of the
authorized shareholder(s). Shareholders who anticipate the need to
transact large amounts of money are encouraged to establish pre-
authorized bank wire instructions on their account. Redemptions by wire
to a pre-authorized bank and account may be in any amount and do not
require a signature guarantee. Pre-authorized bank wire instructions
can be established by completing the appropriate section of a new
application or by calling an Account Executive to inquire about any
necessary documents. A signature guarantee may be required to add or
change bank wire instruction on an account. A signature guarantee is
required for any redemption when (1) the proceeds are to be greater
than $50,000 (unless proceeds are being wired to a pre-authorized bank
and account), (2) the proceeds are to be delivered to someone other than
the shareholder of record, (3) the proceeds are to be delivered to an
address other than the address of record, or (4) there has been any
change to the registration or account privilege within the last 15 days.
Mosaic accepts signature guarantees from banks with FDIC insurance,
certain credit unions, trust companies, and members of a domestic stock
exchange. A guarantee from a notary public is not an acceptable
signature guarantee.
Redemptions and Uncollected Funds. To protect shareholders from loss or
dilution resulting from deposit items that are returned unpaid, the
proceeds of any redemption may be delayed 10 days or more until it can
be determined that the check or other deposit item (including EFT) used
for purchase of the shares has cleared. Such deposited items are
considered "uncollected," until Mosaic has determined that they have
actually been paid by the bank on which they were drawn. Purchases made
with cash, federal funds wire or U.S. Treasury check are considered
collected when received and not subject to the 10 day hold.
By Telephone or By Mail
Upon request by telephone or in writing, a redemption check up to
$50,000 may be sent to the shareholder and address of record only. A
redemption request for more than $50,000 or for proceeds to be sent to
anyone or anywhere other than the shareholder and address of record,
must be made in writing, signed by all shareholders with their
signatures guaranteed. See section Signature Guarantees above.
Redemption requests in proper form received by mail and telephone are
normally processed within one business day.
Stop Payment Fee. To stop payment on a check issued by Mosaic, call our
Shareholder Service department. Normally, the Fund charges a fee of
$28.00, or the cost of stop payment, if greater, for stop payment
requests on a check issued by Mosaic on behalf of a shareholder.
Certain documents may be required before such a request can be
processed.
By Wire
With one business day's notice, funds can be sent by wire transfer to
the bank and account designated on the account application or by
subsequent written authorization. Shareholders who anticipate the need
to transact large amounts of money are encouraged to establish pre-
authorized bank wire instructions on their account. Redemptions by wire
to a pre-authorized bank and account may be in any amount and do not
require a signature guarantee. Pre-authorized bank wire instructions
can be established by completing the appropriate section of a new
application or by calling an Account Executive to inquire about any
necessary documents. A signature guarantee may be required to add or
change bank wire instruction on an account. Redemption by wires can be
arranged by calling the telephone numbers on the cover of this
prospectus. Requests for wire transfer must be made by 4:00 p.m.
Eastern time the day before the wire will be sent.
Wire Fee. There will be a $10 fee for redemptions by wire to domestic
banks. Wire transfers sent to a foreign bank for any amount will be
processed for a fee of $30 or the cost of the wire if greater.
By Exchange
Shareholders may redeem shares from one Mosaic account and concurrently
invest the proceeds in another Mosaic account by telephone when the
account registration and tax identification number remain the same.
There is no charge for this service.
By Customer Check
A shareholder who has requested check writing privileges and submitted a
signature card may write checks in any amount payable to anyone.
A confirmation statement showing the amount and number of each check
written is sent to the shareholder. Mosaic does not return canceled
checks, but will provide copies of specifically requested checks. A fee
of $1.00 per copy is charged for frequent requests or a request for
numerous copies.
Stop Payment Fee. To stop payment on a customer check that you have
written, call an Account Executive. Mosaic will honor stop payment
requests on unpaid customer checks written by shareholders for a fee of
$5.00. Oral stop payment requests are effective for 14 calendar days,
at which time they will be canceled unless confirmed in writing.
Written stop payment orders are effective for six months and may be
extended by written request for another six months.
Ordering Customer Checks. When you complete a signature card for check
writing privileges an initial supply of preprinted checks will be sent
free of charge. The cost of check reorders and of printing special
checks will be charged to the shareholder's account.
By Systematic Withdrawal Plan
Shareholders may elect to have a systematic withdrawal plan whereby
Mosaic will automatically redeem share in their Mosaic account and send
proceeds to a designated recipient. To establish a systematic
withdrawal plan, complete the appropriate section of the application or
call an Account Executive for information. The minimum amount for a
systematic withdrawal is $100. Shareholders may change the amount or
discontinue the systematic withdrawal plan anytime.
Electronic Funds Transfer Systematic Withdrawal. A systematic
withdrawal can be processed as an electronic funds transfer, commonly
known as EFT, to credit a bank account or financial institution.
Check Systematic Withdrawal. Or it can be processed as a check which is
mailed to anyone designated by the shareholder.
How to Close an Account
To close an account, shareholders should call an Account Executive and
request that the account be closed. Shareholders cannot close their
account by writing a check. When an account is closed, shares will be
redeemed at the next determined net asset value. An account may be
closed by telephone, wire transfer or by mail as explained above in the
section "How To Redeem Shares."
Other Fees and Services
Returned Investment Check Fee. Shareholders will be charged (by
redemption of shares) $10.00 for items deposited for investment that are
returned unpaid for any reason.
Minimum Balance. Mosaic reserves the right to involuntarily redeem
accounts with balances of less than $700. Prior to closing any such
account, the shareholder will be given 30 days written notice, during
which time the shareholder may increase the balance to avoid having the
account closed.
Other Fees. Mosaic reserves the right to impose additional charges,
upon 30 days written notice, to cover the costs of unusual transactions.
Services for which charges could be imposed include, but are not limited
to, processing items sent for special collection, international wire
transfers, research and processes for retrieval of documents or copies
of documents.
Retirement Plans
IRAs
Individual Retirement Accounts ("IRAs") may be opened with a reduced
minimum investment of $500. Even though they may be nondeductible or
partially deductible, IRA contributions up to the allowable annual
limits may be made, and the earnings on such contributions will
accumulate tax-free until distribution.
Annual IRA Fee. Mosaic currently charges an annual fee of $12 per
shareholder (not per IRA account) invested in an IRA at Mosaic. This
fee may be prepaid by the shareholder. A separate application is
required for IRA accounts.
Keogh Plans
Mosaic also offers Keogh (or H.R. 10) plans for self-employed
individuals and their employees, which enable them to obtain tax-
sheltered retirement benefits similar to those available to employees
covered by other qualified retirement plans.
Annual Keogh Fee. Currently Mosaic charges an annual fee of $15 per
shareholder (not per Keogh account) invested in a Keogh at Mosaic.
Mosaic also offers SEP IRAs, SIMPLEs, 401(k) and 403(b) retirement
plans. Further information on the retirement plans available through
Mosaic, including minimum investments, may be obtained by calling
Mosaic's shareholder service department.
<PAGE>
Telephone Numbers
Shareholder Service
Washington, DC area: 703/528-6500
Toll-free nationwide: 888/670-3600
The Mosaic Family of Mutual Funds
Mosaic Equity Trust
Investors Fund
Balanced Fund
Mid-Cap Growth Fund
Worldwide Growth Fund
Mosaic Income Trust
High Yield Fund
Government Fund
Mosaic Bond Fund
Mosaic Tax-Free Trust
Arizona Fund
Maryland Fund
Missouri Fund
Virginia Fund
National Fund
Money Market
Mosaic Government Money Market
For more complete information on any Mosaic Fund,
including charges and expenses, request a prospectus by
calling the numbers above. Read it carefully before you
invest or send money. This prospectus does not constitute an
offering by the distributor in any jurisdiction in which such
offering may not be lawfully made.
Mosaic Funds
1655 Fort Myer Drive
Arlington Virginia 22209
http://www.mosaicfunds.com
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
Dated July 31, 1997
For use with Prospectus dated July 31, 1997
MOSAIC GOVERNMENT MONEY MARKET
1655 Fort Myer Drive
Arlington, VA 22209-3108
(800) 336-3063
(703) 528-6500
This Statement of Additional Information is not a Prospectus.
This Statement of Additional Information should be read in
conjunction with the Prospectus of Mosaic Government Money Market
bearing the date indicated above (the "Prospectus"). A copy of
the Prospectus may be obtained from the Trust at the address and
telephone numbers shown.
Table of Contents
Introductory Information
("About Mosaic Government Money Market") 2
Supplemental Investment Policies
("Investment Objective" and "Investment Policies") 2
Investment Limitations
("Investment Policies") 3
The Investment Advisor
("Management of the Trust") 4
Organization of the Trust
("The Trust and Its Shares") 5
Trustees and Officers
("Management of the Trust") 6
Administrative and Other Expenses
("Management of the Trust") 7
Portfolio Transactions
("Management of the Trust") 7
Share Purchases
("How to Purchase Shares") 8
Share Redemptions
("How to Redeem Shares") 9
Retirement Plans
("Other Fees and Services") 10
Declaration of Dividends
("Dividends") 10
Determination of Net Asset Value
("Net Asset Value") 10
Additional Tax Matters
("Taxes") 11
Yield Calculations
("Performance Information") 11
Custodians and Special Custodians 12
Legal Matters and Independent Auditors
("Financial Highlights") 12
Additional Information 12
Financial Statements and Report of Independent Auditors
("Financial Highlights") 13
Note: The items appearing in parentheses above are cross
references to sections in the Prospectus which correspond to
the sections of this Statement of Additional Information.
Introductory Information
Mosaic Government Money Market (the "Trust") is an open-end
diversified management investment company which invests solely in
U.S. Government securities. It may use a variety of investment
techniques with the objective of providing as high a yield as is
available from U.S. Government securities and the investment
quality associated with these securities (see "Supplemental
Investment Policies").
Prior to May 12, 1997, the Trust was known as Government
Investors Trust.
Supplemental Investment Policies
The Trust seeks to achieve its investment objective through
investment in securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and in
participation interests in and repurchase agreements based on
such securities. The investment objective of the Trust is
described in the Prospectus (see "Investment Objective").
Reference should also be made to the Prospectus for general
information concerning the Trust's investment policies (see
"Investment Policies"). Unless described herein or in the
Prospectus, the Trust will not invest in "derivative" securities.
Any deviation in this policy must be approved by the Trustees
in advance.
Specialized Investment Techniques. In order to achieve its
investment objective, the Trust may use, when the Advisor deems
appropriate, certain specialized investment techniques. Such
specialized investment techniques principally include those
identified in the Prospectus (see "Investment Policies"), which
are described more fully below:
1. Investments in Specialized Kinds of Government Agency
Securities. These agency securities often provide higher yields
than are available from more common types of Government-backed
investments. However, such specialized investments may only be
available from a few sources, in limited amounts, or only in very
large denominations; they may also require specialized capability
in portfolio servicing and in legal matters related to Government
guarantees. While frequently offering attractive yields, the
limited-activity markets of many of these securities means that
if the Trust were forced to liquidate any of them it might not be
able to do so advantageously; accordingly, the Trust intends to
normally hold such securities to maturity or pursuant to
repurchase agreements.
2. Investment in "Floating Rate" Government Agency Securities.
These Government agency securities may offer particular
advantages towards the achievement of the objectives of the Trust
by providing for an interest rate which is adjusted (i.e.,
"floats") at regular intervals according to some published
interest rate. Such securities frequently offer higher yields
than are available on short-term securities but less risk of
market value fluctuations than securities of longer maturities
which do not float. Interest rates, and thus income to the Trust,
on these securities will normally float downward when interest
rates are falling and float upward when their reference rates of
interest rise. Generally, such investments float in relation to
the "prime" interest rate of New York or other money center banks
and often are adjusted upward or downward quarterly, although
some such securities float in relationship to other published
interest rates or at more or less frequent intervals. These
floating rate securities may have stated maturities of up to 30
years, although 10-year stated maturities are more typical.
Floating rate securities may be comparable in some respects to
short-term securities, but their longer stated maturities reduce
investment flexibility, making them less attractive than short-
term securities to some investors.
3. Repurchase Agreement Transactions. A repurchase agreement
involves the acquisition of securities from a financial
institution, such as a bank or securities dealer, with the right
to resell the same securities to the financial institution on a
future date at a fixed price. Repurchase agreements are a highly
flexible medium of investment in that they may be for very short
periods, including, frequently, maturities of only one day. Under
the Investment Company Act of 1940 repurchase agreements are
considered loans and the securities involved may be viewed as
collateral. It is the Trust's policy to limit the financial
institutions with which it engages in repurchase agreements to
banks, savings and loan associations and securities dealers
meeting financial responsibility standards prescribed in
guidelines adopted by the Trustees.
When investing in repurchase agreements, the Trust could be
subject to the risk that the other party may not complete the
scheduled repurchase and the Trust would then be left holding
securities it did not expect to retain. If those securities
decline in price to a value less than the amount due at the
scheduled time of repurchase, then the Trust could suffer a loss
of principal or interest. The Advisor will follow procedures
designed to assure that repurchase agreements acquired by the
Trust are always at least 100% collateralized as to principal and
interest. It is the Trust's policy to require delivery of
repurchase agreement collateral to its Custodian or (in the case
of book-entry securities held by the Federal Reserve System) that
such collateral is registered in the Custodian's name or in
negotiable form. In the event of insolvency or bankruptcy of the
other party to a repurchase agreement, the Trust could encounter
restrictions on the exercise of its rights under the repurchase
agreement.
To the extent the Trust requires cash to meet redemption requests
and determines that it would not be advantageous to sell
portfolio securities to meet those requests, then it may sell its
portfolio securities to another investor with a simultaneous
agreement to repurchase them. Such a transaction is commonly
called a "reverse repurchase agreement." It would have the
practical effect of constituting a loan to the Trust, the
proceeds of which would be used to meet cash requirements from
redemption requests. During the period of any reverse repurchase
agreement, the Trust would recognize fluctuations in value of the
underlying securities to the same extent as if those securities
were held by the Trust outright. If the Trust engages in reverse
repurchase agreement transactions, it will maintain in a
segregated account designated Government securities which are
liquid or mature prior to the scheduled repurchase and cash
sufficient in aggregate value to provide adequate funds for
completion of the repurchase. It is the Trust's current operating
policy not to engage in reverse repurchase agreements except for
purposes of meeting redemption requests. The Trust will not enter
into any reverse repurchase agreement, if as a result, reverse
repurchase agreements in the aggregate would exceed 10% of the
Trust's total assets.
4. Investment in Matched Purchase/Sale Transactions. The Trust
may invest by means of matched purchase/sale transactions
containing two elements: the purchase of U.S. Government
securities and a simultaneous sale of those securities by means
of a future delivery contract at a fixed price for later delivery
to a different institution (securities dealer, bank, etc.).
During the interval between the actual dates they are bought and
sold, the securities will be held by a custodian of the Trust.
The transactions are thus self-liquidating and produce a known
yield, similar to a repurchase agreement; this yield is comprised
of the interest earned on the securities while they are held plus
the price differential between the purchase and sale. The sale
price may be more or less than the price at which the securities
could otherwise be sold on the day delivery is due. These
arbitrage transactions may be attractive if market conditions
create opportunities for higher yields than on repurchase
agreements. It is contrary to the Trust's policies for it to hold
a future delivery contract for the sale of securities which it
does not own. Established markets are available for future
delivery contracts, including financial futures exchanges and the
over-the-counter market.
5. Investments Purchased for Forward Delivery. Institutional
investors such as the Trust often enter into commitments to take
delivery of securities at a future time under specified terms of
purchase. Such transactions sometimes appear advantageous because
they may provide an opportunity to acquire an investment
otherwise unavailable, or with more attractive terms than are
currently available or anticipated for the future. Such
transactions, however, can involve a risk that the yields
available in the market when the delivery takes place may
actually be higher than those obtained in the transaction itself,
and a risk that the investor's available cash may be less than
projected, possibly necessitating a disadvantageous resale of the
securities purchased or of other portfolio securities at a loss
to the Trust. Securities purchased for forward delivery do not
accrue interest until they are delivered. The Trust intends to
enter into forward delivery transactions when it deems them
advisable, but to reduce its exposure to price instability
through changes in interest rates before the transactions are
completed, it has a policy that these commitments will only be
undertaken in connection with securities having maturities of one
year or less.
U.S. Government Securities. As used in the Prospectus and in this
Statement of Additional Information, the term "U.S. Government
securities" refers to a variety of securities which are issued or
guaranteed by the United States Treasury, by various agencies of
the United States Government, and by various instrumentalities
which have been established or sponsored by the United States
Government, and to certain interests in the foregoing types of
U.S. Government securities. Except for U.S. Treasury securities,
these obligations, even those which are guaranteed by federal
agencies or instrumentalities, may or may not be backed by the
"full faith and credit" of the United States. In the case of
securities not backed by the full faith and credit of the United
States, the investor must look principally to the agency issuing
or guaranteeing the obligation for ultimate repayment, and may
not be able to assert a claim against the United States itself in
the event the agency or instrumentality does not meet its
commitments.
Treasury securities include Treasury bills, Treasury notes and
Treasury bonds. Some of the Government agencies which issue or
guarantee securities are the Department of Housing and Urban
Development, the Department of Health and Human Services, the
Government National Mortgage Association, the Farmers Home
Administration, the Department of Transportation, the Department
of Energy, the Department of the Interior, the Department of
Commerce, the Department of Defense and the Small Business
Administration. Other Government agencies and instrumentalities
which issue or guarantee securities include the Export-Import
Bank, the Federal Farm Credit System, the Federal Home Loan
Banks, the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation and the Student Loan Marketing
Association. International development organizations which
operate under sponsorship of the U.S. Government and which issue
or guarantee securities (although the Trust does not presently
intend to hold such securities in its portfolio) include the
Inter-American Development Bank, the Asian Development Bank and
the International Bank for Reconstruction and Development.
When used herein, the term "U.S. Government securities" includes
securities issued or guaranteed by any of the foregoing entities
or by any other agency or instrumentality established or
sponsored by the United States Government, and participation
interests (with unaffiliated persons) in and instruments
evidencing deposit or safekeeping for any of the foregoing.
Participation interests are pro-rata interests in U.S. Government
securities held by others; instruments evidencing deposit or
safekeeping are documentary receipts for such original securities
held in custody by others.
Maturities. As used in this Statement of Additional Information
and in the Prospectus, the term "effective maturity" means either
the actual stated maturity of the investment, the time between
its scheduled interest rate adjustment dates (for variable rate
securities), or the time between its purchase settlement and
scheduled future resale settlement pursuant to a resale or
optional resale under fixed terms arranged in connection with the
purchase, whichever period is shorter. A "stated maturity" means
the time scheduled for final repayment of the entire principal
amount of the investment under its terms. "Short-term" means a
maturity of one year or less, while "long-term" means a longer
maturity.
Investment Limitations
The Trust has adopted as fundamental policies the following
limitations on its investment activities, which may not be
changed without a majority vote of the Trust's shareholders as
defined in the Investment Company Act of 1940 (see "Organization
of the Trust").
1. Permissible Investments. Subject to the investment policies
from time to time adopted by the Trustees, The Trust may purchase
U.S. Treasury bills, notes, bonds, or other debt obligations
issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities (including international membership
development banks and negotiable certificates of deposit the
principal amount of which is insured by the Federal Deposit
Insurance Corporation or participation interests (with
unaffiliated persons) therein, or instruments evidencing deposit
or safekeeping of U.S. Government securities (see "Supplemental
Investment Policies"); but any of these securities may be subject
to repurchase agreements with financial institutions or
securities dealers or may be purchased from any person, under
terms and arrangements determined by the Trust, for future
delivery. Any of these securities may have limited markets and
may be purchased with restrictions on transfer imposed by the
Government agency or instrumentality involved or for other
reasons, to the extent the Trustees permit; however, the Trust
may not invest in securities for which there is no readily
available market, if at the time of acquisition more than 15% of
the Trust's net assets would be invested in such securities.
2. Borrowing and Lending. The Trust may not obtain bank loans,
except for extraordinary or emergency purposes. The Trust may
enter into reverse repurchase agreements in amounts not exceeding
25% of its total assets (including the proceeds of the reverse
repurchase transactions) for purposes of purchasing other
securities. The Trust may not obtain loans or enter into reverse
repurchase agreements in total amounts exceeding one-third of
such total assets for any purpose, including the meeting of cash
withdrawal requests or for extraordinary purposes. The Trust may
not mortgage, pledge or hypothecate any assets to secure bank
loans, except in amounts not exceeding 15% of its net assets
taken at cost, and only for extraordinary or emergency purposes.
The Trust may loan its portfolio securities in an amount not in
excess of one-third of the value of the Trust's gross assets,
provided collateral satisfactory to the Trustees is continuously
maintained in amounts not less than the value of the securities
loaned.
3. Other Activities. The Trust may not act as an underwriter,
make short sales (or maintain a short position), or write put or
call options or combinations thereof. Nor may the Trust purchase
securities on margin (except for customary credit used in
transaction clearance), invest in commodities or in real estate,
or acquire shares of other investment companies, except that the
foregoing prohibition against investment in "commodities" by the
Trust does not preclude the use of financial futures contracts to
make purchases or sales of U.S. Government securities, provided
the transactions would otherwise be permitted under the Trust's
investment policies.
The Trust may not knowingly take any investment action which has
the effect of eliminating its tax exemption under Sub-Chapter M
of the Internal Revenue Code (see "Additional Tax Matters").
Notwithstanding the fundamental policies described above, as a
matter of operating policy, in order to comply with certain applicable
State restrictions, the Trust will not pledge,
mortgage or hypothecate in excess of 10% of its net assets at
market value. The Trust has adopted the additional restriction,
notwithstanding Paragraph 1 above, that it will not invest more
than 10% of its net assets at the time of purchase in illiquid
assets and securities for which there is no readily available
market (which include fully insured certificates of deposit,
unless the Trustees determine they are readily marketable) and in
repurchase agreements and matched purchase/sale transactions that
cannot be terminated within seven days. Matched purchase/sales
generally involve the purchase of liquid securities coupled with
a sale for future delivery. Future delivery contracts traded on
an organized exchange (such as the Chicago Board of Trade or the
International Monetary Market) are considered liquid, while such
contracts executed in the over-the-counter market may be
illiquid, if a readily available futures market has not
developed. Liquidity of a matched purchase/sale transaction
requires liquidity of both of its parts; the securities purchased
and the future delivery sale contract. The sale contract may be
liquid by the existence of a readily available market for it or
by a contractual provision permitting delivery at any time within
seven days.
The Investment Advisor
Bankers Finance Advisors, LLC, 1655 Fort Myer
Drive, Arlington, Virginia 22209-3108, is the investment adviser
to the Trust and is called the "Advisor" throughout this
Statement of Additional Information and the Prospectus. The
Advisor is responsible for the investment management of the Trust
and is authorized to execute the Trust's portfolio
transactions, to select the methods and firms with which such
transactions are executed, to oversee the Trust's operations, and
otherwise to administer the affairs of the Trust as it deems
advisable. In the execution of these responsibilities, the
Advisor is subject to the investment policies and limitations of
the Trust described in the Prospectus and this Statement of
Additional Information, to the terms of the Declaration of Trust
and the Trust's By-Laws, and to written directions given from
time to time by the Trustees.
The Advisor is a division of Madison Investment Advisors, Inc.
("Madison"), 6411 Mineral Point Road, Madison, Wisconsin.
Madison is a registered investment adviser and has numerous
advisory clients. Madison was founded in 1973 and
has no other business affiliates other than those described
in the Prospectus and this Statement of Additional Information.
The Investment Advisory Agreement is subject to annual review
and approval by the Trustees, including a majority of those who
are not "interested persons," as defined in the Investment
Company Act of 1940. The investment advisory agreement was
approved by shareholders for an initial two year term at a special
meeting of shareholders held in July 1996.
The Investment Advisory Agreement may be terminated at any time,
without penalty, by the Trustees or by the vote of a majority of
the outstanding voting securities, or by the Advisor, upon sixty
days' written notice to the other party. The Investment Advisory
Agreement may not be assigned by the Advisor, and will
automatically terminate upon any assignment.
Background of the Advisor. The Advisor was formed in 1996 by
Madison for the purpose of providing investment management
services to the Mosaic family of mutual funds (then known as the
GIT family of mutual funds), including the Trust.
The Advisor purchased the investment management assets of the
former adviser to the Trust, Bankers Finance Investment
Management Corp., on July 31, 1996. For periods prior to July 31,
1996, references in this Statement of Additional Information and in
the Prospectus to the "Advisor" refer to Bankers Finance Investment
Management Corp. The Advisor also serves as the investment adviser to
Mosaic Equity Trust, Mosaic Income Trust and Mosaic Tax-Free Trust.
Management. Frank E. Burgess is President, Treasurer and
Director of Madison and Vice President of the Advisor.
Mr. Burgess owns a majority of the controlling interest of Madison,
which, in turn, controls the Advisor. Mr. Burgess is also a Trustee and
Vice President of the Trust. Mr. Burgess holds the same positions
with Mosaic Equity Trust, Mosaic Income Trust and
Mosaic Tax-Free Trust. Katherine L. Frank is President and Treasurer
of the Advisor and Vice President of Madison. Ms. Frank holds the
same positions with Mosaic Equity Trust, Mosaic Income Trust and
Mosaic Tax-Free Trust.
Advisory Fee and Expense Limitations. For its services under the
Investment Advisory Agreement, the Advisor receives a fee,
payable monthly, calculated as 1/2 percent per annum of the
average daily net assets of the Trust's portfolio during the
month. Such fees do not decrease as net assets increase. The
Advisor may waive or reduce such fee during any period. The
Advisor may also reduce such fee on a permanent basis, without
any requirement for consent by the Trust or its shareholders,
under such terms as it may determine, by written notice thereof
to the Trust.
The Advisor has agreed to reimburse the Trust for all of its
expenses, excluding securities transaction commissions and
expenses, taxes, interest and extra-ordinary and non-recurring
expenses, which exceed during any fiscal year one and one-half
percent of the Trust's daily average net assets up to $40 million
and one percent of the amount, if any, by which such assets
exceed $40 million. . In addition, the Advisor has agreed, in any
event, to be responsible for the fees and expenses of the Trustees and
officers of the Trust who are affiliated with the Advisor,
and its various promotional expenses (including the distribution
of Prospectuses to potential shareholders). Other than investment
management and the related expenses, and the foregoing items, the
Advisor is not obligated to provide or pay for any other services
to the Trust, although it may elect to do so.
The Investment Advisory Agreement permits sharing of the
Advisor's fee with other persons, subject to the prior approval
of such arrangements by the Trustees, including a majority of
those who are not interested persons of the Trust. Under
regulations of the Securities and Exchange Commission such
arrangements are permissible in connection with the distribution
of investment company shares, if the payments of the shared fee
amounts are made out of the investment adviser's own resources.
Prior to its implementation the Trustees will approve any
arrangement to share the Advisor's fees and will satisfy
themselves that such payments are made from the Advisor's own
resources. During the fiscal years ending March 31, 1995, 1996
and 1997, the Advisor received advisory fees of $506,333, $410,098
and $273,026, respectively from the Trust.
Organization of the Trust
The Declaration of Trust, dated February 14, 1979, has been filed
with the Secretary of State of the Commonwealth of Massachusetts
and the Clerk of the City of Boston, Massachusetts. The
Prospectus contains general information concerning the Trust's
form of organization and its shares (see "The Trust and Its
Shares"), including the series of shares currently authorized.
Shares and Classes of Shares. The Trustees may authorize at any
time the creation of additional series of shares (the proceeds of
which would be invested in separate, independently managed
portfolios) and additional classes of shares within any series
(which would be used to distinguish among the rights of different
categories of shareholders, as might be required by future
regulations or other unforeseen circumstances) with such
preferences, privileges, limitations, and voting and dividend
rights as the Trustees may determine. All consideration received
by the Trust for shares of any additional series or class, and
all assets in which such consideration is invested, would belong
to that series or class (but classes may represent proportionate
undivided interests in a series), and would be subject to the
liabilities related thereto. The Investment Company Act of 1940
would require the Trust to submit for the approval of the
shareholders of any such additional series or class any adoption
of an investment advisory contract or any changes in the Trust's
fundamental investment policies related to the series or class.
The Trustees may divide or combine the shares into a greater or
lesser number of shares without thereby changing the
proportionate interests in the Trust. Upon any liquidation of the
Trust, the shareholders are entitled to share pro-rata in the
liquidation proceeds available for distribution.
Voting Rights. The voting rights of shareholders are not
cumulative, so that holders of more than 50 percent of the shares
voting can, if they choose, elect all Trustees being selected,
while the holders of the remaining shares would be unable to
elect any Trustees. As of June 27, 1997, no person was known to
the Trust to own beneficially or of record 5% or more of its
shares.
Because there is not a requirement for annual elections of
Trustees, the Trust does not anticipate having regular annual
shareholder meetings. Shareholder meetings will be called as
necessary to consider questions requiring a shareholder vote. The
selection of the Trust's independent auditors will be submitted
to a vote of ratification by the shareholders at any annual
meetings held by the Trust. Any change in the Declaration of
Trust, in the Investment Advisory Agreement (except for
reductions of the Advisor's fee) or in the fundamental
investment limitations of the Trust must be approved by a
majority of the shareholders before it can become effective.
A "majority" is constituted by either 50 percent of all shares
of the Trust or 67 percent of the shares voted at an annual
meeting or special meeting of shareholders at which at least 50 percent
of the shares are present or represented by proxy.
The Declaration of Trust provides that two-thirds of the holders
of record of the Trust's shares may remove a Trustee from
office by votes cast in person or by proxy at a meeting called
for the purpose. A Trustee may also be removed from office
provided two-thirds of the holders of record of the Trust's
shares file declarations in writing with the Trust's Custodian.
Shareholder Liability. Under Massachusetts law, the shareholders
of an entity such as the Trust may, under certain circumstances,
be held personally liable for its obligations. The Declaration of
Trust contains an express disclaimer of shareholder liability for
acts or obligations of the Trust and requires that notice of such
disclaimer be given in each agreement, obligation or instrument,
entered into or executed by the Trust or the Trustees. The
Declaration of Trust provides for indemnification out of the
Trust property of any shareholder held personally liable for the
obligations of the Trust. The Declaration of Trust also provides
that the Trust shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of
the Trust and satisfy any judgment thereof. The risk of a
shareholder incurring financial loss on account of status as a
shareholder is limited to circumstances in which the Trust itself
would be unable to meet its obligations.
Liability of Trustees and Others. The Declaration of Trust
provides that the officers and Trustees of the Trust will not be
liable for any neglect, wrongdoing, errors of judgment, or
mistakes of fact or law, except that they shall not be protected
from liability arising out of willful misfeasance, bad faith,
gross negligence, or reckless disregard of their duties to the
Trust. Similar protection is provided to the Advisor under the
terms of the Investment Advisory Agreement and the Services
Agreement. In addition, protection from personal liability for
the obligations of the Trust itself, similar to that provided to
shareholders, is provided to all Trustees, officers, employees
and agents of the Trust.
Trustees and Officers
Trustees and executive officers of the
Trust and their principal occupations during the past five years
are shown below:
Frank E. Burgess*
6411 Mineral Point Road, Madison, WI 53705
Trustee and Vice President
Founder, President and Director of Madison Investment Advisors, Inc.,
He is a member of the State Bar of Wisconsin. b. 8/4/42.
James R. Imhoff, Jr.***
429 Gammon Place, Madison, WI 53719
Trustee
Chairman and CEO of First Weber Group, Inc. of Madison, WI,
a residential real estate company; Chairman of the Wisconsin
Real Estate Board of the Department of Regulation and
Licensing; Director to the University of Wisconsin School of
Business, Center for Urban Land Economics Research; Director
of the Park Bank, Wisconsin; formerly President of the
Wisconsin Realtors Association and the Greater Madison Board
of Realtors and Director of the National Association of
Realtors. An alumnus of the Marquette University School of
Business. b. 5/20/44.
Lorence D. Wheeler***
P.O. Box 431, Madison, WI 53701
Trustee
President of Credit Union Benefits Services, Inc., a
provider of retirement plans and related services for credit
union employees nationwide. Previously a shareholder of the
law firm of Bell, Metzner & Gierart, SC. Mr. Wheeler
received his law degree from the University of Wisconsin.
b. 1/31/38.
Katherine L. Frank
6411 Mineral Point Road, Madison, WI 53705
President
President of Mosaic Funds, Vice President
of Madison Investment Advisors, Inc. A graduate
of Macalester College, St. Paul, Minnesota.
Julia M. Nelson
1655 Fort Myer Drive, Arlington, VA 22209-3108
Vice President
Vice President of Mosaic Funds.
Jay R. Sekelsky
6411 Mineral Point Road, Madison, WI 53705
Vice President
Vice President of Mosaic Funds and of
Madison Investment Advisors, Inc. Formerly Vice President
of Wellington Management Group of Boston, MA.
Mr. Sekelsky holds a BBA in Accounting and an MBA in
Finance from the University of Wisconsin.
Christopher C. Berberet
6411 Mineral Point Road, Madison, WI 53705
Vice President
Vice President of Mosaic Funds and of
Madison Investment Advisors, Inc. Formerly the
Director of Fixed Income Management for the
ELCA Board of Pensions, Minneapolis, MN. A
graduate of the University of Wisconsin.
W. Richard Mason
1655 Ft. Myer Drive, Arlington, VA 22209
Secretary
Secretary of Mosaic Funds, GIT Investment
Services, Inc., Presidential Savings Bank, FSB and
Presidential Service Corporation. Formerly Assistant
General Counsel for the Investment Company
Institute. Mr. Mason holds a BS in Foreign Service
from Georgetown University and received his law
degree from The George Washington University. He is
a member of the District of Columbia and Texas bars.
*Trustee deemed to be an "interested person" of the Trust as the
term is defined in the Investment Company Act of 1940. Only those
persons named in the table of Trustees and officers who are not
interested persons of the Trust are eligible to be compensated by
the Trust. The compensation of each non-interested
Trustee who may be compensated by the
Trust has been fixed at $6,000 per year, to be pro-rated
according to the number of regularly scheduled meetings each
year. Four Trustees' meetings are currently scheduled to take
place each year. In addition to such compensation, those Trustees
who may be compensated by the Trust shall be reimbursed for any
out-of-pocket expenses incurred by them in connection with the
affairs of the Trust. Mr. Kleppe will receive annual compensation
from the Trust and from the other investment companies managed
by the Advisor or Madison (see "the Investment Advisor") totalling
$15,000. Mr. Imhoff and Mr. Wheeler will receive annual
compensation from the Trust and from other investment companies
managed by the Advisor or Madison totalling $18,000 though June 13,
1997, and thereafter will be compensated in the same amount as Mr.
Kleppe.
During the last fiscal year of the Trust, the Trustees were compensated
as follows:
Total
Pension or Compensation
Retirement from
Aggregate Benefits Estimated Portfolios
Compensa- Accrued as Annual and Fund
tion part of Benefits Complex
from Portfolios Upon Paid to
Portfolios Expense Retirement Trustees(a)
Frank E. Burgess 0 0 0 0
Thomas S. Kleppe 6,000 0 0 15,000
James R. Imhoff, Jr.(b) 6,000 0 0 18,000
Lorence D. Wheeler(b) 6,000 0 0 18,000
(a) Complex is comprised of 4 trusts with a total of 14 funds and/or
series. Prior to June 13, 1997, the complex was comprised of 4 trusts
and 3 corporations with a total of 16 funds and/or series.
(b) Messrs. Imhoff and Wheeler's expected annual compensation is
decribed above.
*** Member of the Audit Committee of the Trust. The Audit Committee
is responsible for reviewing the results of each audit of the
Trust by its independent auditors and for recommending the
selection of independent auditors for the coming year.
Under the Declaration of Trust, the Trustees are entitled to be
indemnified by the Trust to the fullest extent permitted by law
against all liabilities and expenses reasonably incurred by them
in connection with any claim, suit or judgment or other liability
or obligation of any kind in which they become involved by virtue
of their service as Trustees of the Trust, except liabilities
incurred by reason of their willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of their office. As of June 30, 1997, the then acting Trustees
and officers of the Trust directly or indirectly owned as a group
5% of the outstanding shares of the Trust.
Administrative and Other Expenses
Except for certain expenses assumed by the Advisor (see "The
Investment Advisor"), the Trust is responsible for payment from
its assets of all of its expenses. These expenses can include any
of the business or other expenses of organizing, maintaining and
operating the Trust. Certain expense items which may represent
significant costs to the Trust include the payment of the
Advisor's fee; the expense of shareholder accounting, customer
services, and calculation of net asset value; the fees of the
Custodian, of the Trust's independent accountants, and of legal
counsel to the Trust; the expense of registering the Trust and
its shares, of printing and distributing prospectuses and
periodic financial reports to current shareholders, and of trade
association membership; the expense of preparing shareholder
reports, proxy materials and of holding shareholder meetings of
the Trust. The Trust is also responsible for any extraordinary or
non-recurring expenses it may incur.
Services Agreement. The Trust does not have any officers or
employees who are paid directly by the Trust. The Trust has
entered into a Services Agreement with the Advisor for the
provision of operational and other services required by the
Trust. Such services may include the functions of shareholder
servicing agent and transfer agent, bookkeeping and portfolio
accounting services, the handling of telephone inquiries, cash
withdrawals and other customer service functions including
monitoring wire transfers, and providing to the Trust appropriate
supplies, equipment and ancillary services necessary to the
conduct of its affairs. The Trust is registered with the
Securities and Exchange Commission as the transfer agent for its
shares and acts as its own dividend-paying agent; while transfer
agent personnel and facilities are included among those provided
to the Trust under the Services Agreement, the Trust itself is
solely responsible for its transfer agent and dividend payment
functions and for the supervision of those functions by its
officers.
All such services provided to the Trust by the Advisor are
rendered for a flat percentage fee reviewed and approved at least
annually by the Trustees. Such fee is expected to approximate
the cost of providing such services. The
term "cost" includes both direct expenditures and the related overhead
costs, such as depreciation, employee supervision, rent and the like;
reimbursements to the Advisor pursuant to the Services Agreement
are in addition to and independent of payments made pursuant to
the Investment Advisory Agreement. The Advisor provides such
services to Mosaic Equity Trust, Mosaic Income Trust, and
Mosaic Tax-Free Trust. The Trust will also pay certain direct
expenses (including custody, brokerage, bluesky, legal and audit.) To
the extent that costs must be allocated between the Trust and other
activities of the Advisor, such allocations may be made on the basis of
reasonable approximations calculated by the Advisor and periodically
reviewed by the Trustees.
Distribution Agreement. GIT Investment Services, Inc. acts as the
Trust's Distributor pursuant to a Distribution Agreement, dated
February 11, 1983, without compensation under such Agreement.
This Agreement has an initial term of two years and may
thereafter continue in effect only if approved annually by the
Trustees, including a majority of those who are not "interested
persons," as defined in the Investment Company Act of 1940. The
Agreement provides for distribution of the Trust's shares without
a sales charge to the investor. The Distributor may act as the
Trust's agent for any sales of its shares, but the Trust may also
sell its shares directly to any person. The Distributor makes the
Trust's shares continuously available to the general public in
those States where it has qualified to do so, but has assumed no
obligation to purchase any of the Trust's shares. The Distributor
is wholly owned by A. Bruce Cleveland, its President.
Portfolio Transactions
Decisions as to the purchase and sale of securities, and
decisions as to the execution of these transactions, including
selection of market, broker or dealer and the negotiation of
commissions are to be made by the Advisor, subject to review by
the officers and Trustees.
In general, in the purchase and sale of portfolio securities the
Trust seeks to obtain prompt and reliable execution of orders at
the most favorable prices or yields. In determining the best
price and execution, the Advisor may take into account a dealer's
operational and financial capabilities, the type of transaction
involved, the dealer's general relationship with the Advisor, and
any statistical, research or other services provided by the
dealer to the Advisor. To the extent such non-price factors are
taken into account the execution price paid may be increased, but
only in reasonable relation to the benefit of such non-price
factors to the Trust as determined in good faith by the Advisor.
Brokers or dealers who execute portfolio transactions for the
Trust may also sell its shares; however, any such sales will not
be either a qualifying or disqualifying factor in the selection
of brokers or dealers. During its three most recent fiscal years,
the Trust did not pay any brokerage commissions.
The Trust expects that most portfolio transactions will be made
directly with a dealer acting as a principal thus, not involving
the payment of commissions; however, any purchases from an
underwriter or selling group could involve payments of fees and
concessions to the underwriting or selling group. The Trust also
reserves the right to purchase portfolio securities through an
affiliated broker, when deemed in the Trust's best interests by
the Advisor, provided that: (1) the transaction is in the
ordinary course of the broker's business; (2) the transaction
does not involve a purchase from another broker or dealer; (3)
compensation to the broker in connection with the transaction is
not in excess of one percent of the cost of the securities
purchased; and (4) the terms to the Trust for purchasing the
securities, including the cost of any commissions, are not less
favorable to the Trust than terms concurrently available from
other sources. Any compensation paid in connection with such a
purchase will be in addition to fees payable to the Advisor under
the Investment Advisory Agreement. The Trust does not anticipate
that any such purchases through affiliates will represent a
significant portion of its total activity; no such transactions
took place during the Trust's three most recent fiscal years.
Although the Trust intends normally to hold its investments to
maturity, the short maturities of these investments are expected
to result in a relatively high rate of portfolio turnover. The
actual turnover rate will not be a limiting factor in the Trust's
decisions as to purchases and sales of portfolio securities.
Reference should be made to the Prospectus for actual rates of
portfolio turnover (see "Financial Highlights").
Shareholder Transactions
The Prospectus describes the basic procedures for investing in
the Trust (see "How to Purchase Shares and How to Redeem Shares"). The
following information concerning other investment procedures is
presented to supplement the information contained in the
Prospectus.
Shareholder Service Policies. The Trust's policies concerning
shareholder services are subject to change from time to time.
Minimum Initial Investment and Minimum Balanced. The
Trust reserves the right to change the minimum account size below
which an account is subject to a monthly service charge or to
involuntary closing by the Trust. The Trust may also institute a
minimum amount for subsequent investments, by 30 days' written
notice to its shareholders.
Special Service Charges. The Trust further reserves the right,
after 30 days' written notice to shareholders, to impose special
service charges for services that are not regularly afforded to
shareholders; such service charges may include fees for stop
payment orders and returned checks. The Trust's standard service
charges are also subject to adjustment from time to time.
Share certificates will not be issued.
Subaccounting Services. The Trust offers subaccounting services
to institutions. The Trustees reserve the right to determine from
time to time guidelines to govern the level of subaccounting
service that can be provided institutions in differing
circumstances. Normally, the Trust's minimum initial investment
to open an account will not apply to subaccounts; however, the
Trust reserves the right to impose the same minimum initial
investment requirement that would apply to regular accounts, if
it deems that the cost of carrying a particular subaccount or
group of subaccounts is otherwise likely to be excessive. The
Trust may provide and charge for subaccounting services which it
determines exceed those services which can be provided without
charge; the availability and cost of such additional services
will be determined in each case by negotiation between the Trust
and the parties requesting the additional services. The Trust is
not currently aware of any such services for which a charge will
be imposed.
Crediting of Investments. The Trust reserves the right to reject any
investment for any reason and may at any time suspend all new investment
in the Trust. The Trust may also, at its discretion or at the instance
of the Advisor, decline funds wired for credit until such funds
are actually received by the Trust. Under present federal
regulatory guidelines, the Advisor may be responsible for any
losses resulting from changes in the Trust's net asset values
which are a result of failure to receive funds from an investor
to whom recognition for investment was given in advance of
receipt of payment.
If shares are purchased to be paid for by wire and the wire is
not received or if shares are purchased by check which, after
deposit, is returned unpaid or proves uncollectible, the share
purchase may be canceled immediately or the purchased shares may
be immediately redeemed. The investor who gave notice of the
intended wire or submitted the check will be held fully
responsible for any losses so incurred by the Trust, the Advisor
or the Distributor.
As a condition of the Trust's public offering
(which the investor will be deemed to have agreed by submitting
an order for the purchase of the Trust's shares) the Distributor
shall have the investor's power of attorney coupled with an
interest, authorizing the Distributor to redeem sufficient shares
from any fund of the investor for which it acts as a principal
underwriter or distributor, or to liquidate sufficient other
assets held in any brokerage account of the investor with the
Distributor, and to apply the proceeds thereof to the payment of
any amounts due to the Trust from the investor arising from any
such losses. Any such redemptions or liquidations will be limited
to the amount of the actual loss incurred by the Trust at the
time the share purchase is canceled and will be preceded by
notice to the investor and an opportunity for the investor to
make restitution of the amount of the loss. The Trust will retain
any profits resulting from such cancellations or redemptions and,
if the purchase payment was by a check actually received, will
absorb any such losses unless they prove recoverable.
Checks. Checks drawn on foreign banks will not be considered received in
federal funds until the Trust has actual receipt of
payment in immediately available U.S. dollars after submission of
the check for collection; collection of such checks through the
international banking system may require 30 days or more.
Wire. Funds received by wire are normally converted into shares
in the Trust at the net asset value next determined.
Purchase Orders from Brokers. An order to purchase shares which is
received by the Trust from a securities broker will be considered
received in proper form for the net asset value per share determined as
of the close of business of the New York Stock Exchange on the day of
the order, provided the broker received the order from its customer
prior to that time and transmitted it to the Trust prior to 4 p.m. EST.
Those who invest through a securities broker may be charged a
commission for the handling of the transaction, if the broker so
elects; however, any investor is free to deal directly with the
Trust in any transaction.
Redemptions
The value of shares redeemed to meet withdrawal requests will be
determined according to the share net asset value next calculated
after the request has been received in proper form. (See
"Determination of Net Asset Value.") Thus, any such request
received in proper form prior to 4 p.m. Washington, DC time on a
business day will reflect the net asset value calculated at that
time; later withdrawal requests will be processed to reflect the
share net asset value figure calculated on the next day the
calculation is made. Net asset value is calculated each day the
New York Stock Exchange is open for trading.
Net asset value determinations will apply as of the day the
redemption order is submitted in proper form. A withdrawal
request may not be deemed to be in proper form unless a signed
account application has been properly submitted to the Trust by
the investor or such an application is submitted with the
withdrawal request.
A shareholder draft check drawn against an
account will not be considered in proper form unless sufficient
collected funds (as described above) are available in the account
on the day the check is presented for payment.
The "day of withdrawal" for share redemptions refers to the day on which
corresponding funds are paid out by the Trust, whether by wire
transfer, exchange between accounts, official check prepared, or
debit of the investor's account to cover shareholder checks
presented for payment.
Shareholders should be aware that it is possible, should the share
net asset value of the Trust fall, that amounts
available for withdrawal could be less than the amount originally
invested. All withdrawals will be effected by the redemption of
the appropriate number of whole and fractional shares having a
net asset value equal to the amount withdrawn.
The Trust will use its best efforts to handle withdrawals within
the times previously given. It may, however, for any reason postpone
payment for shares in the Trust for any period up to seven days. The
Trust's sole responsibility with regard to withdrawals shall be to
process, within the aforementioned time period, redemption requests in
proper form. Neither the Trust, its affiliates, nor the Custodian can
accept responsibility for any act or event which has the
effect of delaying or preventing timely transfers of payment to
or from shareholders. By law, payment for shares in the Trust may
be suspended or delayed for more than seven days only during a
period when the New York Stock Exchange is closed, other than
customary weekend and holiday closings; when trading on such
Exchange is restricted, as determined by the Securities and
Exchange Commission; or during any period when the Securities and
Exchange Commission has by order permitted such suspension.
Unless the shareholder's current address is on file with the
Trust on the original account application or by subsequent
written notice signed by the authorized signers on the account,
the Trust may require signed written instructions to process
withdrawals and account closings. In response to verbal requests,
however, withdrawal proceeds will normally be mailed to the
investor at the address shown on the Trust's records, provided an
original signed Application has been received.
When an account is closed, the Trust reserves the right to make payment
by check of any final dividends declared to the date of redemption to
close the account, but not yet paid, on the same day such dividends are
paid to other shareholders, rather than at the time the account
is closed.
Inter-Fund Exchange. Funds exchanged between investor accounts will
earn its final days dividend on the day of exchange.
Same-day exchanges can only be made in
circumstances that would permit same-day wire withdrawals from
the account being debited. All exchanges will be effected at the
net asset values per share of the respective accounts next
determined after the exchange request is received in proper form.
If an exchange is to be made between investor accounts that are
not held in the same name and tax identification number or do not
have the same mailing address or signatories, the Trust may
require any transfer between them to be made by making a
withdrawal from one account and a corresponding investment in the
other, using the same procedures that would apply to any other
withdrawal or investment.
The Trust reserves the right, when it deems such action necessary
to protect the interests of its shareholders, to refuse to honor
withdrawal requests made by anyone or anyone purporting to act
with the authority of another person or on behalf of a
corporation or other legal entity whose identity has not been
established to the Trust's satisfaction. Each such individual
must provide a corporate resolution or other appropriate evidence
of his authority or identity satisfactory to the Trust. The Trust
reserves the right to refuse any third party redemption requests.
If, in the opinion of the Trustees, extraordinary conditions
exist which make cash payments undesirable, payments for any
shares redeemed may be made in whole or in part in securities and
other property of the Trust. The Trust has elected, however,
pursuant to rules of the Securities and Exchange Commission, to
permit any shareholder of record to make redemptions wholly in
cash to the extent the shareholder's redemptions in any 90-day
period do not exceed the lesser of 1% of the aggregate net assets
of the Trust or $250,000. Any property of the Trust distributed
to shareholders will be valued at its net asset value. In
disposing of any such property received from the Trust, an
investor might incur commission costs or other transaction costs;
there is no assurance that an investor attempting to dispose of
any such property would actually receive the full net asset value
for it. Except as described herein, however, the Trust intends to
pay for all share redemptions in cash.
Retirement Plans
General information on retirement plans offered by the Trust is
provided in the Prospectus (see "How to Redeem Shares"). Additional information concerning these retirement plans is provided below.
IRAs. The minimum initial contribution for an IRA plan with the
Trust is $500. Spousal IRAs are accepted by creating two
accounts, one for each spouse. For IRAs opened in connection with
a payroll deduction or SEP plan, the Trust may waive the initial
investment minimum on a case-by-case basis.
The Trust's annual account maintenance fee is deducted from the
account at the end of each year or at the time of the account's
closing unless prepaid by the shareholder.
Other Retirement Plans or Retirement Plan Accounts. The Trust
does not intend to impose any monthly minimum balance charge with
respect to retirement plan accounts. The Trust offers prototype
Keogh, SIMPLE, 401(k) and 403(b) retirement plans. The
Trust may waive the initial investment minimum for prototype or
other retirement plan accounts on a case by case basis.
Declaration of Dividends
Substantially all of the Trust's accumulated net income is
declared as dividends each business day. Calculation of
accumulated net income for the Trust's portfolio is made just
prior to calculation of the portfolio's net asset value (see
"Determination of Net Asset Value"). The amount of such net
income reflects the interest income (plus any discount earned
less premium amortized), less expenses accrued through the day of
calculation, to the extent not previously reflected in declared
dividends.
In order to facilitate its objective of stabilizing the price of
its shares at $1.00, the Trust intends normally to reflect any
portfolio realized gains and losses and unrealized appreciation
and depreciation, to the extent the Trust deems the amounts
material, in daily dividends, rather than in share prices.
Dividends are payable to shareholders of record at the time they
are determined. Dividends are paid in the form of additional
shares credited to the respective investor account at the end of
each calendar month (or normally when the account is closed, if
sooner), unless the shareholder makes a written election to
receive dividends in cash.
Notice of payment of dividends will be mailed to each shareholder
quarterly; for tax purposes each shareholder will also receive an
annual summary of dividends paid by the Trust and the extent, if
any, to which they constitute capital gains dividends (see
"Additional Tax Matters"). Any investor purchasing shares in an
account of the Trust as of a particular net asset value
determination on a given day will be considered a shareholder of record
for the corresponding dividend declaration made the next day; and an
investor withdrawing as of such determination will be considered a
shareholder of record with respect to the shares withdrawn. A "business
day" is any day the New York Stock Exchange is open for trading.
Net realized capital gains, if any, will be distributed to
shareholders at least annually as capital gains dividends.
Determination of Net Asset Value
The net asset value of the Trust is calculated each day the New
York Stock Exchange is open for trading. The net asset value is
not calculated on New Year's Day, the observance of Washington's
Birthday (President's Day), Good Friday, the observance of Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and other
days the New York Stock Exchange is closed for trading. The net asset
value calculation is made as of a specific time of day, as described in
the Prospectus.
The net asset value per share is determined by adding the value
of all its securities and other assets, subtracting its
liabilities and dividing the result by the total number of
outstanding shares. These calculations are performed by the Trust
and for its account, pursuant to the Services Agreement (see
"Administrative and Other Expenses"). The Trust does not charge a
"sales load", and accordingly its shares are both offered and
redeemed at net asset value.
The Trust's securities are valued at their amortized cost,
pursuant to regulations of the Securities and Exchange Commission
("SEC") intended to permit the price of the Trust's shares to be
stabilized at $1.00. These regulations require the Trust to limit
its investments to securities that the Trustees determine
represent minimal credit risks, to limit its maturities to those
appropriate to its objective of maintaining a stable share price,
and in any event to the maturity restrictions provided in the Trust's
investment policies described in the Prospectus.
These regulations also require the Trust to periodically compute
the market values of its portfolio securities. If for any reason,
including a change in market interest rates, the market value
computation differs by more than 1/2 of 1 percent from the $1.00
per share price, the Trustees are required to meet and consider
steps to restore the market price to $1.00 per share. Such steps
could include adjusting dividends, selling portfolio securities
before maturity to realize capital gains or losses, shortening
the portfolio's maturity, or redeeming shares in kind. Such steps
could result in dilution of shareholders' interests.
In determining market values for this purpose, the Trustees may
authorize reliance upon an independent pricing service or other
valuation technique, which may price securities with reference to
market transactions in comparable securities and to historical
relationships among the prices of comparable securities; such
prices may also reflect an allowance for the impact upon prices
of the larger transactions typical of trading by institutions.
Should the SEC change its rules governing the "amortized cost"
valuation method, the Trust reserves the right to use the "penny
rounding" method of valuation pursuant to the terms of the
Trust's exemptive order issued by the SEC.
Additional Tax Matters
Federal Income Tax. To qualify as a "regulated investment
company" and avoid Trust-level federal income tax under the
Internal Revenue Code (the "Code"), the Trust must, among other
things, distribute 100% of its net income
and net capital gains in the fiscal year in which it is earned.
The Code also requires the distribution of at least 98% of
undistributed net income for the calendar year and capital gains
determined as of October 31 each year before the calendar year-
end in order to avoid a 4% excise tax. The Trust intends to distribute
all taxable income to the extent it is realized to avoid imposition of
federal excise taxes.
To qualify as a regulated investment company under the Code,
the Trust must also derive at least 90% of its gross income from
dividends, interest, gains from the sale or disposition of
securities, and certain other types of income, and derive less
than 30% of its gross income from the sale or disposition of
securities held for less than three months. Should it fail to
qualify as a "regulated investment company" under the Code, the
Trust would be taxed as a corporation with no allowable deduction
for the distribution of dividends.
Shareholders of the Trust, however, will be subject to
federal income tax on any ordinary net income and net capital
gains realized by the Trust and distributed to shareholders as
regular or capital gains dividends, whether distributed in cash
or in the form of additional shares. Generally, dividends
declared by the Trust during October, November or December of any
calendar year and paid to shareholders before February 1 of the
following year will be treated for tax purposes as received in
the year the dividend was declared. No portion of the dividends
paid by the Trust to its shareholders is expected to be subject
to the dividends received deduction for corporations (70% of
dividends received).
Shareholders who fail to comply with the interest and dividends
"back-up" withholding provisions of the Code (by filing Form
W-9 or its equivalent, when required) or who have been
determined by the Internal Revenue Service to have failed to
properly report dividend or interest income may be subject to a
31% withholding requirement on transactions with the Trust.
For tax purposes, the Trust will send shareholders an annual
notice of dividends paid during the prior year. Investors are
advised to retain all statements received from the Trust to
maintain accurate records of their investment. Shareholders of
the Trust will be subject to federal income tax on the net
capital gains, if any, realized by each portfolio and distributed
to shareholders as capital gains dividends.
The Trust reserves the right to involuntarily redeem any of its
shares if, in its judgment, ownership of the Trust's shares has
or may become concentrated as to make the Trust a personal holding
company under the Code.
Yield Calculations
For advertising and certain other purposes, the Trust's yield is
calculated according to a standard formula prescribed by the
Securities and Exchange Commission. The yield is calculated by
dividing the net income (including the benefit of any expenses
waived or reimbursed by the Advisor) earned on one share during a
given seven-day period, exclusive of any capital changes, by the
initial value of that share (normally $1.00), and expressing the
result (called the "base period return") as an annualized
percentage. The base period return is annualized by multiplying
it by 365 and dividing the product by seven.
The Trust's "effective yield" is calculated in a similar manner,
except that the net income earned during a seven-day period is
assumed to be reinvested at the same rate over a full year,
thereby generating additional earnings from compounding. The
effective yield is computed by adding one to the base period
return, raising the result to the power equal to 365 divided by
seven, and subtracting one from the result, which is then
expressed as a percentage.
The Trust's standardized yield for the seven-day period ending
June 26, 1997 was 4.66% and its annual effective yield for the
same period was 4.76%.
Performance Comparisons. From time to time, in advertisements or
in reports to shareholders and others, the Trust may compare the
performance of its portfolio to that of recognized market indices
or may cite the ranking or performance of its portfolio as
reported in recognized national periodicals, financial
newsletters, reference publications, radio and television news broadcasts, or by independent performance measurement firms.
The Trust may also compare the performance of its portfolios to
that of other funds managed by the same Advisor. It may compare
its performance to that of other types of investments,
substantiated by representative indices and statistics for those
investments.
Market indices which may be used include those compiled by major
securities firms, such as Solomon Brothers, Shearson Lehman
Hutton, the First Boston Corporation, and Merrill Lynch; other
indices compiled by securities rating or valuation services, such
as Ryan Financial Corporation and Standard and Poor's
Corporation, may also be used. Periodicals which report market
averages and indices, performance information, and/or rankings
may include: The Wall Street Journal, Investors Daily, The New
York Times, The Washington Post, Barron's, Financial World
Magazine, Forbes Magazine, Money Magazine, Kiplinger's Personal
Finance, and the Bank Rate Monitor. Independent performance
measurement firms include Lipper Analytical Services, Inc., Frank
Russel Company, SCI and CDA Investment Technologies.
In addition, a variety of newsletters and reference publications
provide information on the performance of mutual funds, such as
the Donoghue's Money Fund Report, No-Load Fund Investor,
Wiesenberger Investment Companies Service, the Mutual Fund Source
Book, the Mutual Fund Directory, the Switch Fund Advisory, Mutual
Fund Investing, the Mutual Fund Observer, Morningstar, and the
Bond Fund Survey. Financial news is broadcast by the Financial
News Network, Cable News Network, Public Broadcasting System, and
the three major television networks, NBC, CBS and ABC, as well as
by numerous independent radio and television stations.
When the Trust uses Lipper Analytical Services, Inc. in making
performance comparisons in advertisements or in reports to
shareholders or others, the performance of the Trust will be
compared to mutual funds categorized as "U.S. Government Money
Market Funds". If this category should be changed by Lipper
Analytical Services, Inc., comparisons will be made thereafter
based on the revised category.
Average Maturities. The Trust also calculates average maturity
information for its portfolio. The "average maturity" of the
portfolio on any day is determined by multiplying the number of
days then remaining to the effective maturity (see "Supplemental
Investment Policies") of each investment in the portfolio by the
value of that investment, summing the results of these
calculations, and dividing the total by the aggregate value of
the portfolio that day. Thus, the average maturity represents a dollar-
weighted average of the effective maturities of the portfolio
investments. The "mean average maturity" of the portfolio over some
period, such as seven days, a month or a year, represents the arithmatic
mean (i.e., simple average) of the daily average maturity figures for
the portfolio during the respective period.
It should be noted that the Trust's yield is not fixed. In fact
the yield tends to fluctuate daily and so annualized rates of
return should not be considered representations of what an
investment may earn in any future period. Actual dividends will
tend to reflect changes in money market interest rates, and will
also depend upon the level of the Trust's expenses, any realized
or unrealized investment gains and losses, and the relative
results of the Trust's investment policies. Thus, at any point in
time future yields may be either higher or lower than past yields
and there is no assurance that any historical yield level will
continue.
Custodians and Special Custodians
Star Bank, N.A., 425 Walnut Steet, Cincinnati, OH 45202, is
Custodian for the cash and securities of the Trust. The Custodian
maintains custody of the Trust's cash and securities, handles its
securities settlements and performs transaction processing for
cash receipts and disbursements in connection with the purchase
and sale of the Trust's shares.
From time to time, the Trust may appoint as Special Custodians,
certain banks, trust companies, and firms which are members of
the New York Stock Exchange and trade for their own account in
the types of securities purchased by the Trust. Such Special
Custodians will be used by the Trust only for the purpose of
providing custody and safekeeping services of relatively short
duration for designated types of securities which, in the opinion
of the Trustees or of the Advisor, would most suitably be held by
such Special Custodians rather than by the Custodian. In the
event any such Special Custodian is used, it shall serve the
Trust only in accordance with a written agreement with the Trust
meeting the requirements of the Securities and Exchange
Commission for custodians and approved and reviewed at least
annually by the Trustees, and, if a securities dealer, only if it
delivers to the Custodian its receipt for the safekeeping of each
lot of securities involved prior to payment by the Trust for such
securities.
The Trust may also maintain deposit accounts for the handling of
cash balances of relatively short duration with various banks, as
the Trustees or officers of the Trust deem appropriate, to the
extent permitted by the Investment Company Act of 1940.
Legal Matters and Independent Auditors
DeWitt Ross & Stevens, LC, 8000 Excelsior Drive, Madison, WI 53717-1914,
serves as legal counsel to the Trust and Sullivan & Worcester, LLP, 1025
Connecticut Avenue, NW, Washington, DC, 20036, serves as review counsel
to the Trust's independent Trustees.
Ernst & Young LLP, 1225 Connecticut Avenue, NW, Washington, DC
20036, serves as independent auditors to the Trust.
From time to time the Trust may be or become involved in
litigation in the ordinary conduct of its business. Material
items of litigation having consequences of possible or
unspecified damages, if any, are disclosed in the notes to the
Trust's financial statements (see "Financial Statements and
Report of Independent Auditors").
Additional Information
The Trust issues semi-annual and annual reports to its
shareholders and may issue other reports, such as quarterly
reports, as it deems appropriate; the annual reports are audited
by the Trust's independent auditors. Statements contained in this
Statement of Additional Information and in the Prospectus as to the
contents of contracts and other documents are not necessarily complete.
Investors should refer to the documents themselves for definitive
information as to their detailed provisions. The Trust will supply
copies of its Declaration of Trust and By-Laws to interested persons
upon request.
The Trust and shares in the Trust have been registered with the
Securities and Exchange Commission in Washington, DC, by the
filing of a Registration Statement. The Registration Statement
contains certain information not included in the Prospectus or
not included in this Statement of Additional Information and is
available for public inspection and copying at the offices of
such Commission.
Financial Statements and Report of Independent Auditors
Audited Financial Statements for the Trust, together with the
Report of Ernst & Young LLP, Independent Auditors for the fiscal
year ended March 31, 1997, appear in the Trust's Annual Report to
shareholders for the fiscal year ended March 31, 1997, which is
incorporated herein by reference. Excluded from such
incorporation by reference is the Trust's letter to shareholders
appearing in such Report. Such Report has been filed with the
Securities and Exchange Commission. Copies of such Report are
available upon request at no charge by writing or calling the
Trust at the address and telephone number shown on the cover page
above.
<PAGE>
Part C
July 31, 1997
Mosaic Government Money Market
Cross Reference Sheet Page 1
Pursuant to Rule 495(a)
24(a) Financial Statements
Included in Part A: Financial Highlights
Included in Part B: Filed with the Securities and Exchange
Commission pursuant to Section 30 of the Investment Company
Act of 1940 on June 3, 1997, and incorporated herein by
reference is the Trust's Annual Report to Shareholders for the
fiscal year ended March 31, 1997.
Included in such Annual Report to Shareholders are: Statement
of Assets and Liabilities, Statement of Operations, Statement
of Changes in Net Assets, Financial Highlights, Portfolio of
Investments, Notes to Financial Statements and Report of Ernst
& Young LLP, Independent Auditors.
Included in Part C: Consent of Independent Auditors
24(b) Exhibits
Exhibit No. Description of Exhibit
1 Declaration of Trust*
2 By-Laws*
3 Not Applicable
4 Not Applicable
5 Investment Advisory Agreement*
6 Distribution Agreement*
7 Not Applicable
8 Custodian Agreement with Fee Schedule*
9 Services Agreement*
10 Consent of Counsel*
11 Consent of Independent Auditors (Filed Herewith)
12 Not Applicable
13 Not Applicable
14 Prototype Retirement Plan*
15 Not Applicable
16 Computation of Performance Data (Filed Herewith)
17 Financial Data Schedules (Filed Herewith)
18 Not Applicable
* Previously filed by the Trust.
25. Persons Controlled by or Under Common Control with Registrant.
None
26. Number of Holders of Securities.
The number of holders of record of securities of the
Registrant as of July 24, 1997 is as follows:
Title of Class Number of Holders of Record
Shares of Beneficial Interest 3,006
27. Indemnification
Previously Filed
28. Business and Other Connections of Investment Advisor effective
July 31, 1997.
Name Position with Other Business
Advisor
Frank E. Burgess Director President and Director of
Madison Investment Advisors,
Inc., 6411 Mineral Point
Road, Madison, WI 53705
Katherine L. Frank President Vice President of Madison
Investment Advisors, Inc.
6411 Mineral Point
Road, Madison, WI 53705
Julia M. Nelson Vice President None
Jay R. Sekelsky Vice President Vice President of Madison
Investment Advisors, Inc.
6411 Mineral Point
Road, Madison, WI 53705
Chris Berberet Vice President Vice President of Madison
Investment Advisors, Inc.
6411 Mineral Point
Road, Madison, WI 53705
W. Richard Mason Secretary Secretary of Presidential
Savings Bank, FSB and
Presidential Service
Corporation, 4600 East-West
Highway, Bethesda, MD
20814; Secretary of GIT
Investment Services, Inc.
of the same
address as the Trust.
29. Principal Underwriters
(a) GIT Investment Services, Inc., the principal underwriter
of the Trust, also acts as principal underwriter to Mosaic Equity
Trust, Mosaic Tax-Free Trust and Mosaic Income Trust.
(b)
Name and Principal Position and Offices Position and Offices
Business Address with Underwriters with Registrant
A. Bruce Cleveland Chairman, President None
1700 N. Moore Street
Arlington, VA 22209
W. Richard Mason Secretary Secretary
1655 Ft. Myer Dr.
Arlington, VA 22209
(c) Not Applicable
30. Location of Accounts and Records
The books, records and accounts of the Registrant will be
maintained at 1655 Ft. Myer Drive, Arlington, VA 22209, at
which address are located the offices of the Registrant and
of Bankers Finance Advisors, LLC. Additional
records and documents relating to the affairs of the
Registrant are maintained by the Star Bank, N.A. of
Cincinnati, OH, the Registrant's Custodian, at the
Custodian's offices located at 425 Walnut Street,
Cincinnati, OH 45202. Pursuant to the Custodian Agreement
(see Article IX, Section 12), such materials will remain the
property of the Registrant and will be available for
inspection by the Registrant's officers and other duly
authorized persons. Certain records may be maintained at
the offices of the Advisor's parent, Madison Investment
Advisors, Inc., 6411 Mineral Point Road, Madison, WI 53705.
31. Management Services
Previously filed and discussed in Parts A and B and in the
Trust's financial statements incorporated herein.
32. Undertakings
(a) Not Applicable
(b) Not Applicable
(c) The Registrant shall furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest
Annual Report to shareholders upon such person's request and
without charge.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant has
duly caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the County of
Arlington, Commonwealth of Virginia, on the 30 day of July,
1997.
Mosaic Government Money Market
By: (signature)
W. Richard Mason
Secretary
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to the Registration Statement
has been signed below by the following persons in the
capacities and on the date indicated.
(Signature), Trustee 7/30/97
Frank E. Burgess
Trustee
James Imhoff* 7/30/97
Trustee
Thomas S. Kleppe* 7/30/97
Trustee
Lorence Wheeler* 7/30/97
*(Signature), Attorney-In-Fact, 7/30/97
John Rashke, Esquire
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
registrant's current form NSAR, Annual Report and prospectus and is
qualified in its entirety by reference to such source documents.
</LEGEND>
<CIK> 0000310407
<NAME> MOSAIC GOVERNMENT MONEY MARKET
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 54,711
<INVESTMENTS-AT-VALUE> 54,711
<RECEIVABLES> 276
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 54,987
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 300
<TOTAL-LIABILITIES> 300
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 54,687
<SHARES-COMMON-STOCK> 54,687
<SHARES-COMMON-PRIOR> 57,197
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 54,687
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,928
<OTHER-INCOME> 0
<EXPENSES-NET> 570
<NET-INVESTMENT-INCOME> 2,357
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,357
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 60,347
<NUMBER-OF-SHARES-REDEEMED> 65,125
<SHARES-REINVESTED> 2,268
<NET-CHANGE-IN-ASSETS> (2,510)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 273
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 575
<AVERAGE-NET-ASSETS> 54,945
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.043
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.043
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.047
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Consent of Ernst & Young LLP, Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectus and "Legal Matters
and Independent Auditors" and "Financial Statements and
Report of Independent Auditors" in the Statement of
Additional Information and to the incorporation by reference
in this Post-Effective Amendment Number 20 to
Registration Statement Number 2-63713 (Form N-1A) of our
report dated May 2, 1997, on the financial statements and
financial highlights of Mosaic Government Money Market Trust
(formerly Government Investors Trust) for the year
ended March 31, 1997, included in the 1997 Annual Report to
Shareholders.
(signature)
Ernst and Young, LLP
Washington, DC
July 28, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of
Mosaic Government Money Market, a Massachusetts business trust, does
hereby constitute and appoint JOHN RASHKE and CHRISTOPHER DANIELS, and
each of them, his true and lawful attorney and agent to do any and all
acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or advisable: (1) to enable the
said Trust to comply with the Securities Act of 1933, as amended, and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under
said Securities Act of the shares of beneficial interest of said Trust
(the "Securities"), including, specifically, but without limiting the
generality of the foregoing, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as Trustee of said
Trust to a Registration Statement or to any amendment thereto filed with
the Securities and Exchange Commission in respect of said Securities and
to any instrument or document filed as part of, an exhibit to or in
connection with said Registration Statement or amendment; (2) to enable
said Trust to comply with the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Investment Company Act of the Trust, including
specifically, but without limiting the generality of the foregoing, the
power an authority to sign for and on behalf of the undersigned the name
of the undersigned as Trustee of said Trust to a Registration Statement
or of any amendment thereto filed with the Securities and Exchange
Commission in respect of said Trust and to any instrument or document
filed as part of, as an exhibit to or in connection with said
Registration Statement or amendment; and (3) to register or qualify said
Securities for sale and to register or license said Trust as a broker or
dealer in said Securities under the securities or Blue Sky laws of all
such states as may be necessary or appropriate to permit therein the
offering and sale of said Securities as contemplated by said
Registration Statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as Trustee of said
Trust to any application, statement, petition, prospectus, notice or
other instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said securities or Blue Sky laws
for the purpose of so registering or qualifying said Securities or
registering or licensing said Trust, and the undersigned does hereby
ratify and confirm as his own act and deed all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
22 day of July, 1997.
(signature)
Thomas S. Kleppe
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of
Mosaic Government Money Market, a Massachusetts business trust, does
hereby constitute and appoint JOHN RASHKE and CHRISTOPHER DANIELS, and
each of them, his true and lawful attorney and agent to do any and all
acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or advisable: (1) to enable the
said Trust to comply with the Securities Act of 1933, as amended, and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under
said Securities Act of the shares of beneficial interest of said Trust
(the "Securities"), including, specifically, but without limiting the
generality of the foregoing, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as Trustee of said
Trust to a Registration Statement or to any amendment thereto filed with
the Securities and Exchange Commission in respect of said Securities and
to any instrument or document filed as part of, an exhibit to or in
connection with said Registration Statement or amendment; (2) to enable
said Trust to comply with the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Investment Company Act of the Trust, including
specifically, but without limiting the generality of the foregoing, the
power an authority to sign for and on behalf of the undersigned the name
of the undersigned as Trustee of said Trust to a Registration Statement
or of any amendment thereto filed with the Securities and Exchange
Commission in respect of said Trust and to any instrument or document
filed as part of, as an exhibit to or in connection with said
Registration Statement or amendment; and (3) to register or qualify said
Securities for sale and to register or license said Trust as a broker or
dealer in said Securities under the securities or Blue Sky laws of all
such states as may be necessary or appropriate to permit therein the
offering and sale of said Securities as contemplated by said
Registration Statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as Trustee of said
Trust to any application, statement, petition, prospectus, notice or
other instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said securities or Blue Sky laws
for the purpose of so registering or qualifying said Securities or
registering or licensing said Trust, and the undersigned does hereby
ratify and confirm as his own act and deed all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
22 day of July, 1997.
(signature)
Frank E. Burgess
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of
Mosaic Government Money Market, a Massachusetts business trust, does
hereby constitute and appoint JOHN RASHKE and CHRISTOPHER DANIELS, and
each of them, his true and lawful attorney and agent to do any and all
acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or advisable: (1) to enable the
said Trust to comply with the Securities Act of 1933, as amended, and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under
said Securities Act of the shares of beneficial interest of said Trust
(the "Securities"), including, specifically, but without limiting the
generality of the foregoing, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as Trustee of said
Trust to a Registration Statement or to any amendment thereto filed with
the Securities and Exchange Commission in respect of said Securities and
to any instrument or document filed as part of, an exhibit to or in
connection with said Registration Statement or amendment; (2) to enable
said Trust to comply with the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Investment Company Act of the Trust, including
specifically, but without limiting the generality of the foregoing, the
power an authority to sign for and on behalf of the undersigned the name
of the undersigned as Trustee of said Trust to a Registration Statement
or of any amendment thereto filed with the Securities and Exchange
Commission in respect of said Trust and to any instrument or document
filed as part of, as an exhibit to or in connection with said
Registration Statement or amendment; and (3) to register or qualify said
Securities for sale and to register or license said Trust as a broker or
dealer in said Securities under the securities or Blue Sky laws of all
such states as may be necessary or appropriate to permit therein the
offering and sale of said Securities as contemplated by said
Registration Statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as Trustee of said
Trust to any application, statement, petition, prospectus, notice or
other instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said securities or Blue Sky laws
for the purpose of so registering or qualifying said Securities or
registering or licensing said Trust, and the undersigned does hereby
ratify and confirm as his own act and deed all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
22 day of July, 1997.
(signature)
James R. Imhoff, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of
Mosaic Government Money Market, a Massachusetts business trust, does
hereby constitute and appoint JOHN RASHKE and CHRISTOPHER DANIELS, and
each of them, his true and lawful attorney and agent to do any and all
acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or advisable: (1) to enable the
said Trust to comply with the Securities Act of 1933, as amended, and
any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under
said Securities Act of the shares of beneficial interest of said Trust
(the "Securities"), including, specifically, but without limiting the
generality of the foregoing, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as Trustee of said
Trust to a Registration Statement or to any amendment thereto filed with
the Securities and Exchange Commission in respect of said Securities and
to any instrument or document filed as part of, an exhibit to or in
connection with said Registration Statement or amendment; (2) to enable
said Trust to comply with the Investment Company Act of 1940, as
amended, and any rules, regulations and requirements of the Securities
and Exchange Commission in respect thereof, in connection with the
registration under said Investment Company Act of the Trust, including
specifically, but without limiting the generality of the foregoing, the
power an authority to sign for and on behalf of the undersigned the name
of the undersigned as Trustee of said Trust to a Registration Statement
or of any amendment thereto filed with the Securities and Exchange
Commission in respect of said Trust and to any instrument or document
filed as part of, as an exhibit to or in connection with said
Registration Statement or amendment; and (3) to register or qualify said
Securities for sale and to register or license said Trust as a broker or
dealer in said Securities under the securities or Blue Sky laws of all
such states as may be necessary or appropriate to permit therein the
offering and sale of said Securities as contemplated by said
Registration Statement, including specifically, but without limiting the
generality of the foregoing, the power and authority to sign for and on
behalf of the undersigned the name of the undersigned as Trustee of said
Trust to any application, statement, petition, prospectus, notice or
other instrument or document, or to any amendment thereto, or to any
exhibit filed as a part thereof or in connection therewith, which is
required to be signed by the undersigned and to be filed with the public
authority or authorities administering said securities or Blue Sky laws
for the purpose of so registering or qualifying said Securities or
registering or licensing said Trust, and the undersigned does hereby
ratify and confirm as his own act and deed all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
22 day of July, 1997.
(signature)
Lorence D. Wheeler
Calculation of Performance Data
<TABLE>
<S> <C> <C> <C> <C> <C>
Income Shares File Rate Multiplier Daily Yield
7/25/97 factor 6,401.29 50,363,612.230 0.000127101 365.000 4.64%
7/24/97 factor 6,402.81 50,316,030.660 0.000127252 365.000 4.64%
7/23/97 factor 6,368.77 50,348,885.740 0.000126493 365.000 4.62%
7/22/97 factor 6,559.59 51,593,449.830 0.000127140 365.000 4.64%
7/21/97 factor 6,571.67 51,459,633.570 0.000127705 365.000 4.66%
7/20/97 factor 6,443.63 50,572,921.040 0.000127413 365.000 4.65%
7/19/97 factor 6,443.63 50,572,921.040 0.000127413 365.000 4.65%
</TABLE>
7 day yield 4.65%
Effective annual yield 4.76%
