INVESTMENTS®

September 30, 2016

Performance Review

For the third quarter, the Madison Dividend Income Fund gained +1.8%, which compared to the +3.9% return for the S&P 500®. Sector allocation and stock selection negatively impacted results in the period. For sector allocation, an underweight position in Technology, which was the best performing sector in the S&P 500, hurt relative performance. In terms of stock selection, there were unfavorable results in Financials, Energy, and Industrials, partially offset with positive selections within Consumer Staples. Within Financials, property and casualty company Travelers (TRV) was the most detractive stock in the portfolio. Although there are concerns that insurance pricing is slowing down, we believe TRV continues to execute well and return cash to shareholders. Other notable underperforming stocks were fast food restaurant McDonald’s (MCD) in Consumer Discretionary and coffee and pet food manufacturer J.M. Smucker (SJM) within Consumer Staples. On the positive side, analog semiconductor firm Linear Technology (LLTC) was the most additive stock in the portfolio as it reached a deal to be acquired by rival Analog Devices (ADI). The fund sold LLTC after the deal was announced. Other notable outperforming stocks included jewelry manufacturer Tiffany and Co. (TIF) in Consumer Discretionary and Consumer Staple companies Nestle (NSRGY) and Procter & Gamble (PG). The fund continues to hold all stocks mentioned above except for LLTC.

On a year-to-date basis, the fund returned +8.5%, which outperformed the S&P 500 return of +7.8%. While sector allocation was modestly negative, strong stock selection accounted for all of the outperformance. There was positive stock picking in Health Care, Technology, Consumer Staples and Materials. Within Health Care, diversified medical products firm Johnson & Johnson (JNJ) and pharmaceutical company Merck (MRK) contributed nicely to results. We believe both companies have promising drug pipelines and strong balance sheets that are helping to drive earnings growth. Within Technology, LLTC was the most additive stock in the portfolio, while semiconductor peer Texas Instruments (TXN) also favorably impacted performance. Other notable outperforming stocks include chocolate manufacturer Hershey (HSY) in Consumer Staples and garbage disposal firm Waste Management (WM). The fund sold HSY after it gained more than 20% on an acquisition offer from competitor Mondelez (MDLZ). On the negative side, within Industrials, aerospace and defense firm Boeing (BA) was the most detractive stock in the portfolio. It experienced a slow-down in aircraft deliveries which temporarily hurt the stock. We believe BA remains well positioned with a huge backlog and solid orders. Other notable underperforming stocks include General Electric (GE) in Industrials and regional bank Wells Fargo (WFC) in Financials.

Our Approach to Investing – Relative Yield Strategy

The Madison Dividend Income Fund goal is to achieve long-term outperformance over a full market cycle on a risk-adjusted basis. To accomplish this objective, we employ a relative yield strategy. Relative yield is defined as a stock’s dividend yield divided by the market dividend yield. An attractive relative yield candidate is a stock with a relative yield near the high end of its historical range and a long dividend paying history with a record of dividend increases.

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Past performance does not predict future results. Please refer to the final two pages of this piecewhich contain current performance information for the fund, the risks of investing in the fund and acomplete list of the fund’s individual portfolio holdings as of quarter end. Individual portfolio holdings are identified to illustrate our approach to investing the fund’s portfolio and are not intended to represent a recommendation to buy or sell any such security.

Madison Dividend Income Fund Investment Strategy Letter

John Brown, CFAPortfolio ManagerIndustry since 1983

Jay Sekelsky, CFAChief Investment Officer

Industry since 1981

Drew Justman, CFAPortfolio ManagerIndustry since 2001

Once we identify high relative yield stocks, we then analyze a company’s business model, balance sheet and cash flow profile to make sure it will be able to continue paying dividends. We want to find stocks that have low valuations with potential for valuation multiple expansion, while avoiding stocks that may have high dividend yields but face secular challenges.

This quarter we are highlighting Union Pacific (UNP) as a relative yield example within the Industrials sector. UNP is the largest public railroad in the United States. It operates 32,000 miles of track in the western US, hauling coal, intermodal containers, industrial products, cars, chemicals and agricultural commodities on its railcars. We believe UNP has a sustainable competitive advantage due to high barriers to entry, scale and efficiency benefits, its huge network and limited rail competition in the region it operates.

The fund initiated a position in UNP during the second quarter after it qualified as an attractive relative yield stock with good prospects for earnings and dividend growth. UNP generates strong free cash flow and returns most of it to shareholders in the form of dividends. In 2015, free cash flow was $2.7 billion, and $2.3 billion was returned via common stock dividends. Looking back further, UNP has more than tripled its dividends per share since the start of 2010. As a result, its dividend yield has been increasing for the past decade and reached an absolute level above 3% early in the year along with a yield that was 1.25x the S&P 500.

Exhibit 1: Dividend Yield and Relative Dividend Yield history for Union Pacific

Our thesis on UNP is that it will return to growth and expand margins after a challenging prior year. In 2015, railcar volumes, revenues and earnings all declined as several segments experienced depressed conditions, most notably in Coal, which experienced a 22% decline in revenues. We believe secular growth in the Intermodal segment, which is the largest segment at 20% of revenues, will offset a declining Coal business. UNP has a history of good pricing power and productivity gains, and we expect these factors will drive long-term margin expansion. We believe base price increases will continue to outpace rail cost inflation of 2-3%. Productivity gains will also help to reduce operating costs. Specifically, new technologies like battery powered locomotives, top-of-rail lubricators and electronically controlled pneumatic braking systems will lower fuel, material and labor costs. We believe UNP has an opportunity to lower its operating ratio (operating costs divided by revenues) to the low 60% area compared to 65% today, which would improve margins and drive earnings growth.

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Source: FactSet

This quarter we are highlighting Union Pacific (UNP) as a relative yield example within the Industrials sector. UNP is the largest public railroad in the United States. It operates 32,000 miles of track in the western US, hauling coal, intermodal containers, industrial products, cars, chemicals and agricultural commodities on its railcars. We believe UNP has a sustainable competitive advantage due to high barriers to entry, scale and efficiency benefits, its huge network and limited rail competition in the region it operates.

The fund initiated a position in UNP during the second quarter after it qualified as an attractive relative yield stock with good prospects for earnings and dividend growth. UNP generates strong free cash flow and returns most of it to shareholders in the form of dividends. In 2015, free cash flow was $2.7 billion, and $2.3 billion was returned via common stock dividends. Looking back further, UNP has more than tripled its dividends per share since the start of 2010. As a result, its dividend yield has been increasing for the past decade and reached an absolute level above 3% early in the year along with a yield that was 1.25x the S&P 500.

Exhibit 1: Dividend Yield and Relative Dividend Yield history for Union Pacific

Source: FactSet

Our thesis on UNP is that it will return to growth and expand margins after a challenging prior year. In 2015, railcar volumes, revenues and earnings all declined as several segments experienced depressed conditions, most notably in Coal, which experienced a 22% decline in revenues. We believe secular growth in the Intermodal segment, which is the largest segment at 20% of revenues, will offset a declining Coal business. UNP has a history of good pricing power and productivity gains, and we expect these factors will drive long-term margin expansion. We believe base price increases will continue to outpace rail cost inflation of 2-3%. Productivity gains will also help to reduce operating costs. Specifically, new technologies like battery

Risks to the UNP thesis include a weak economy that results in continued declining volumes and lower than expected margins, lower than expected pricing power, higher than expected network maintenance costs associated with natural disasters or terrorism, and changes in industry regulation.

Outlook

The fund is heavily positioned in high quality, large cap, above-average dividend yield stocks. Compared to the broader market, the fund is overweight Industrials. The fund is underweight Technology, which is a function of the sector offering few above-average dividend yield stocks meeting our investment criteria. The fund is also underweight Consumer Discretionary due to our assessment of the valuations of the stocks in that sector being more expensive than those in other sectors. In our view, high quality, large cap, “blue chip” stocks sold at very high valuations in the year 2000, and have generally been out of favor and underperformed since then. Over the last decade, we believe they have reached attractive valuations and are poised to outperform going forward. We see this as the main area of opportunity for the fund.

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Although the information in this report has been obtained from sources that the firm believes to be reliable, we do not guarantee its accuracy, and any such information may be incomplete or condensed. All opinions included in the report constitute the authors’ judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Madison Funds are distributed by MFD Distributor, LLC. ©October 5, 2016

John Brown Drew Justman Jay Sekelsky

1 Growth of $10,000 is calculated at NAV and assumes all dividends and capital gain distributions were reinvested. It does not take into account sales charges (if applicable) or the effect of taxes. 2 Average annual total returns and calendar year returns assume all distributions are reinvested and reflect applicable fees and expenses. Class A share returns without sales charge would be lower if sales charge were included. Index returns reflect broad measures of market performance compared the fund and reflect no deduction for sales charges, account fees, expenses or taxes. You cannot invest directly in an index.3 Expense ratios are based on the fund’s most recent prospectus. The investment adviser has contractually agreed to waive a portion of its management fees and/or other expenses for the fund. The investment adviser is waiving 0.10% of its management fee and 0.05% of its service fee until at least February 28, 2016. Investment returns reflect the waivers, without which the results would have been lower. These fee waiver agreements may by modified or terminated at any time or for any reason, but only with fund Board approval. Prior to March 1, 2012 it was known as Madison Mosaic Equity Trust Balanced Fund. At that time, the fund changed investment policies. As a result, the manner in which the fund is currently being managed is not similar to the way in which it was previously managed. Therefore, the fund’s historical performance data prior to March 1, 2012 may not be relevant to current (and future) investors. Performance data shown represents past performance. Investment returns and principal value will fluctuate, so that fund shares, when redeemed, may be worth more or less than the original cost. Past performance does not guarantee future results and current performance may be lower or higher than the performance data shown. Visit madisonfunds.com or call 800.877.6089 to obtain performance data current to the most recent month-end.

John Brown, CFA, Portfolio Manager Industry since 1983

Jay Sekelsky, CFA, Chief Investment Officer Industry since 1981

Drew Justman, CFA, Portfolio Manager Industry since 2001

2016201520142013201220112010200920082007

$19,949

$10,000

Experienced ManagementThe Value of Long-Term Investing

Sep 30, 2016

Madison Dividend Income

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Fund Features

• Fund seeks current income with an opportunity for capital appretiation

• High conviction of approx. 50 holdings

• Relative yield strategy; buy stocks trading at high end of historic dividend yield range

• Focus on risk management

Class Ticker Inception Date Exp. Ratio3

Y BHBFX 12/18/86 0.95%

Distribution Frequency

Quarterly

Risk Measure (10-year) Class Y

Standard Deviation 10.8%

Downside Capture 62.7%

Upside Capture 72.6%

Total Net Assets

$104.3 Million

Portfolio Turnover

24%

Wtd. Average Market Cap

$143.5 Billion

Total Number of Holdings

44

Distribution History Per Share

Year Total Yr-End Nav

2015 $1.29 $21.31

2014 $1.71 $22.59

2013 $1.00 $22.33

2012 $1.13 $17.90

Average Annual Total Returns2 (%)Three Months YTD 1 Yr 3 Yr 5 Yr 10 yr Since Inception

Class Y 1.81 8.47 17.72 8.70 13.07 7.15 7.80

S&P 500® Index 3.85 7.84 15.43 11.16 16.37 7.24 10.00

Lipper Equity Income Funds Index 2.50 8.86 14.57 8.41 13.93 5.86 8.79

Calendar Year Returns2 (%)2008 2009 2010 2011 2012 2013 2014 2015

Class Y -19.92 24.82 8.02 1.73 10.86 30.59 8.81 0.07

S&P 500® Index -37.00 26.46 15.06 2.11 16.00 32.39 13.69 1.38

Lipper Equity Income Funds Index -35.33 28.85 14.04 2.66 13.66 28.70 10.69 -2.96

madisonfunds.com

CharacteristicsTTM P/E 19.8x

P/B 3.0x

3yr EPS Growth 5.5%

ROE 22.1%

Active Share 73.3%

Dividend Yield 2.7%

Standard Deviation: the dispersion from an average, which, for a mutual fund, depicts how widely the returns varied over a certain period of time. Higher deviation represents higher volatility. Downside Capture Ratio: a fund’s performance in down markets relative to its benchmark. The security’s downside capture return is divided it by the benchmark’s downside capture return over the time period. Upside Capture Ratio: a fund’s performance in up markets relative to its benchmark. The security’s upside capture return is divided by the benchmark’s upside capture return over the time period. TTM P/E (Price-to-Earnings Ratio): measures how expensive a stock is. It is calculated by the weighted average of a stock’s current price divided by the company’s trailing 12-month (TTM) earnings per share of the stocks in a fund’s portfolio. P/B (Price-to-Book Ratio): measures a company’s stock price in relation to its book value (the total amount raised if its assets were liquidated and paid back all its liabilities). EPS Growth: the annual rate at which a company’s earnings are expected to grow. ROE (Return on Equity): a profitability ratio that measures the amount of net income returned as a percentage of shareholders equity. Active Share: the percentage of a portfolio that differs from its benchmark index. Active Share can range from 0% for an index fund that perfectly mirrors its benchmark to 100% for a portfolio with no overlap with an index. Dividend Yield: the portfolio’s weighted average of the underlying fund holdings (as of 12/31/2014) and not the yield of the fund. Portfolio Turnover: a measure of the trading activity in an investment portfolio—how often securities are bought and sold by a portfolio. It is calculated at the fund level and represents the entire fiscal year ending 10/31/2015. Avg. Market Cap: the size of the companies in which the fund invests. Market capitalization is calculated by number of a company’s shares outstanding times its price per share.An investment in the fund is subject to risk and there can be no assurance the fund will achieve its investment objective. The risks associated with an investment in the fund can increase during times of significant market volatility. The principal risks of investing in the fund include: equity risk, growth and value investing risk, special risks associated with dividend paying stocks, option risk, interest rate risk, capital gain realization risks to taxpaying shareholders, and foreign security and emerging market risk. More detailed information regarding these risks can be found in the fund’s prospectus.For more complete information about Madison Funds®, including charges and expenses, obtain a prospectus from your financial adviser, by calling 800.877.6089 or by visiting madisonfunds.com and clicking on prospectus and reports to view or download a copy. Before investing in the funds, consider the investment objectives, risks, charges and expenses. The prospectus contains this and other information about funds and should be read carefully before investing.

Madison Funds are distributed by MFD Distributor, LLC and may be purchasedd directly from the fund or through your investment professional. Portfolio data is as of the date of this piece unless otherwise noted and holdings are subject to change. Not FDIC Insured | No Financial Institution Guarantee | May Lose Value

MF-BHBFX-093016madisonfunds.com

Shareholder Services Madison Funds Post Office Box 8390 Boston, MA 02266-8390 800.877.6089

Consultant and Advisor Services550 Science DriveMadison, WI 53711 888.971.7135

Sector allocation is rounded to the nearest 0.1%.

0

5

10

15

20

25

S&P 500® Index

12.59.9

7.3

12.814.7

16.5

9.7

21.2

2.9 2.6 3.3

Dividend Income Fund

6.78.3

6.3

3.0 2.9 3.2

15.714.814.8

7.7

Cash/OtherTelecom UtilitiesMaterialsInformation Technology

IndustrialsHealth CareFinancialsEnergyConsumer Staples

Consumer Discretionary

Real Estate

3.1

JOHNSON + JOHNSON 4.0TRAVELERS COS INC/THE 3.8CISCO SYSTEMS INC 3.7EXXON MOBIL CORP 3.3PFIZER INC 3.2MICROSOFT CORP 3.1VERIZON COMMUNICATIONS INC 2.9GENERAL ELECTRIC CO 2.8UNITED TECHNOLOGIES CORP 2.7CME GROUP INC 2.5PROCTER + GAMBLE CO WHEN DIS 2.5UNITED PARCEL SERVICE CL B 2.5SCHLUMBERGER LTD 2.5TEXAS INSTRUMENTS INC 2.4MERCK + CO. INC. 2.3US BANCORP 2.3NESTLE SA SPONS ADR 2.2TE CONNECTIVITY LTD 2.2HOME DEPOT INC 2.2WELLS FARGO + CO 2.1MEDTRONIC PLC 2.13M CO 2.1

Sector Allocation (%)

Complete Stock Holdings

ACCENTURE PLC CL A 2.1CATERPILLAR INC 2.0AMGEN INC 2.0CHEVRON CORP 2.0BOEING CO/THE 1.9PRAXAIR INC 1.9NEXTERA ENERGY INC 1.8PEPSICO INC 1.8MCDONALD S CORP 1.8JM SMUCKER CO/THE 1.8OMNICOM GROUP 1.7PNC FINANCIAL SERVICES GROUP 1.7UNION PACIFIC CORP 1.4DUKE ENERGY CORP 1.4BB+T CORP 1.3APPLE INC 1.3CARDINAL HEALTH INC 1.2EMERSON ELECTRIC CO 1.2MONSANTO CO 1.1

NORTHERN TRUST CORP 1.1

TIFFANY + CO 1.1

AUTOMATIC DATA PROCESSING 1.0