Supplement dated September 30, 1997 to Mosaic Equity Trust Prospectus
dated June 13, 1997, Mosaic Tax-Free Trust Prospectus dated February 1,
1997 and Mosaic Income Trust Prospectus dated June 13, 1997.
Guide to Doing Business
Mosaic Funds
<PAGE>
An Introduction to Mosaic Services
This brochure is your guide to taking advantage of the many transaction
choices available to Mosaic shareholders.
Mosaic mutual funds have been serving investors since 1978, with the
launch of our flagship fund, Mosaic Investors. Today Mosaic provides a
wide range of investment options, from a portfolio of larger,
established companies that composes Mosaic Investors, to the security of
Mosaic Government Money Market, to national and state tax-free funds.
If any of the enclosed information prompts questions, please call a
Mosaic Account Executive. Our toll-free nationwide number is (888) 670-
3600 and our local number in the Washington, DC area is (703) 528-6500.
Account Executives are available Monday - Friday, from 9:00 a.m. to 6:00
p.m. Eastern time. Mosaic Tiles, our 24-hour automated information line
can be reached at (800) 336-3063. Visit our web site for additional
information, including daily share prices: http://www.mosaicfunds.com.
Shareholder Account Transactions
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.
GIT Investment Services, Inc., distributor
<PAGE>
Telephone Numbers
Shareholder Service
Washington, DC area: 703 528-6500
Toll-free nationwide: 1 888 670-3600
Mosaic Tiles (24 hour automated information)
Toll-free nationwide: 1 800 336-3063
The Mosaic Family of Mutual Funds
Mosaic Equity Trust
Mosaic Investors Fund
Mosaic Balanced Fund
Mosaic Mid-Cap Growth Fund
Mosaic Income Trust
Mosaic High Yield Fund
Mosaic Government Fund
Mosaic Bond Fund
Mosaic Tax-Free Trust
Mosaic Tax-Free Arizona Fund
Mosaic Tax-Free Maryland Fund
Mosaic Tax-Free Missouri Fund
Mosaic Tax-Free Virginia Fund
Mosaic Tax-Free National Fund
Mosaic Tax-Fre Money Market
Mosaic Government Money Market
<I>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.
This piece does not apply to shareholders who are purchasing
Mosaic funds through a broker other than GIT Investment
Services, Inc.</I>
Mosaic Funds
1655 Fort Myer Drive, 10th floor
Arlington Virginia 22209-3108
http://www.mosaicfunds.com
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