Tax-Free Virginia, Sustainable Equity and International Stock Funds
https://www.sec.gov/Archives/edgar/data/1040612/000175392624001853/g202525_497.htm
497 1 g202525_497.htm 497
Madison Funds®
Supplement dated November 12, 2024
This Supplement amends the Prospectus and the Statement of Additional Information of the Madison Funds dated February 28, 2024, as supplemented, and the Summary Prospectus, each dated February 28, 2024, for the following funds, as applicable: Madison Tax-Free Virginia Fund, Madison Sustainable Equity Fund, Madison International Stock Fund, Madison Conversative Allocation Fund, Madison Moderate Allocation Fund, Madison Aggressive Allocation Fund, Madison Diversified Income Fund and Madison Covered Call Equity & Income Fund.
Liquidation of Madison Tax-Free Virginia, Sustainable Equity and International Stock Funds
On November 6, 2024, the Board of Trustees of the Madison Funds (the “Trust,” and each series thereof, a “fund”) determined that, as it relates to the Madison Tax-Free Virginia, Sustainable Equity and International Stock Funds (the “Funds”), it is in the best interest of the Funds and their shareholders to liquidate the Funds. Accordingly, the Board authorized the Trust to enter into a plan of liquidation (the “Plan”) on behalf of each Fund to accomplish this goal. It is anticipated that all outstanding shares of the Funds will be redeemed and the Funds will discontinue operations on or about the close of business on Friday, February 21, 2025 (the “Liquidation Date”), pursuant to each Plan. Any shareholder remaining in one or more of the Funds on this date will receive a liquidation distribution equal to the shareholder’s proportionate interest in the remaining net assets of the applicable Fund(s).
To the extent possible, each Fund will be closed to new accounts, to new investments in existing accounts (other than reinvestment of income or capital gains distributions), and incoming exchanges as of the open of trading on the New York Stock Exchange on Friday, December 8, 2024. Exceptions may be made in limited circumstances when approved by the officers of the Trust where it is not operationally possible or otherwise impracticable to prohibit new purchases by an account. Shareholders may continue to redeem their Fund shares on each day a Fund is open for business between now and the date of the planned liquidation. Shareholders may exchange their Fund shares for shares of another fund in the Madison Funds mutual fund complex in accordance with the terms of each fund’s prospectus at any time prior to the Funds’ cessation of operations. Each shareholder who does not choose either of those options and remains in a Fund until the Liquidation Date will receive a liquidating cash distribution equal to the aggregate net asset value of the Fund shares that such shareholder holds at the time of the liquidation. Shareholders are encouraged to consider options that may be suitable for the reinvestment of their liquidation proceeds, including exchanging into another fund in the Madison Funds mutual fund complex.
You should note that on or before the Liquidation Date, the Funds will no longer actively pursue their stated investment objectives and Madison Asset Management, LLC (“Madison”), the Funds’ investment adviser, will begin to liquidate the Funds’ portfolios. To prepare for the closing and orderly liquidation of the Funds and meet anticipated redemption requests, each Fund’s portfolio managers will likely increase the portion of each Fund’s assets held in cash and similar instruments in order to pay for Fund expenses and meet redemption requests.
The Board of Trustees may determine to accelerate the Liquidation Date. If this were to occur, revised information will be transmitted to remaining shareholders pursuant to a further prospectus supplement.
The Funds do not give tax advice. Although the Funds believe the following information is correct, shareholders should consult with their own tax advisors. The automatic redemption on the Liquidation Date will generally be treated the same as any other redemption of Fund shares for tax purposes, so the shareholders (other than tax-qualified plans or tax-exempt accounts) will recognize a gain or loss for federal income tax purposes on the redemption of their Fund shares in the liquidation. In addition, each Fund and its shareholders will bear the transaction costs and tax consequences associated with the disposition of such Fund’s portfolio holdings prior to the Liquidation Date.
In addition, shareholders invested through an Individual Retirement Account (“IRA”) or other tax-deferred account should consult the rules regarding the reinvestment of these assets. In order to avoid a potential tax issue, shareholders may choose to authorize, prior to the planned liquidation date, a direct transfer of their retirement account assets to another tax-deferred retirement account.
To redeem or exchange your shares if they are held directly with the Funds, call Shareholder Services at 1-800-877-6089 between the hours of 8:00 a.m. and 7:00 p.m. Central time. If you invest in the Funds through a brokerage account or retirement plan record keeper, please contact them directly.
Class C Shares Closing/Converting to Class A Shares
On November 6, 2024, the Board of Trustees of the Trust also approved the termination of all outstanding Class C shares of the funds, which it has deemed to be in the best interests of the shareholders of the Class C shares of the funds. The funds with Class C shares outstanding are the Conservative Allocation Fund, Moderate Allocation Fund, Aggressive Allocation Fund, Diversified Income Fund, and Covered Call Equity & Income Fund. Class C shares will be closed to new accounts and new investments into existing accounts, other than through dividend and/or capital gain reinvestments as of December 8, 2024.
Effective after the close of business (typically 4:00 p.m. EST) on Friday, February 14, 2025, (the “Closure Time”), Class C shares of each fund will be automatically converted to Class A shares of each respective fund as noted in the chart below. The conversion of Class C to Class A shares of the same fund is not a taxable event, and no contingent deferred sales charges will be assessed, if applicable, on this one-time conversion of shares...

Buffet has been written off many times previously. He's done quite well for shareholders over a long time period. 2 year performance compare to SP500 has no meaning imo.

”Yes politics...politicians...they are very much the spoon that stirs the pot or sets out the punch bowl.”
Got me wondering. How have various Presidents / Administrations affected our investment fortunes over the time most of us have been investing? Keep in mind, please, that (political) decisions made today may have economic ramifications that last far longer (sometimes decades) beyond the tenure of the politicians that enact them (reasI oppose term limits for Congress.
What I remember about different administrations since I began watching the markets in the 1950s:
Eisenhower - Increased infrastructure spending. The interstate highway system we enjoy today was undertaken. Consider the effects on commerce. Also helped in the post WWII reconstruction of Japan and Europe. Costly of course.
JFK - Promised to land a man on the moon by the end of the decade (60’s). It was costly and so strained the budget. But we continue to enjoy the benefits of the progress made in using space for our betterment. (GPS for instance). Consider all the economic benefits. Also, JFK was leary about getting deeply entrenched in Vietnam. Imagine how history and economics might have evolved had we not.
LBJ - His legacy may well be our deepening involvement in Vietnam. Costly in lives as well as money. May have planted the seeds of the coming inflation - although demographics played a part. LBJ’s “Great Society” undertook increased Federal spending the country could ill afford at the time. This helped stoke the rising inflation.
Nixon - Wage and price controls. A placebo / bandaid approach to combating inflation which was still in the 4-5% range. Significant in that it awakened public interest in the issue. Also, under Nixon the U.S. largely withdrew from Vietnam. Also, under Nixon the fixed price of gold at $35 an ounce was ended by international agreement.
Ford - With the help of wife Betty, Ford introduced the “WIN” pin. (You can still buy one on eBay.) WIN stood for ”Whip Inflation Now” Another placebo approach. We Americans prefer easy solutions.
Carter - With inflation raging (double-digits) Carter appointed Paul Volker Federal Reserve Chair in 1979. The rest is history.
Regan - Increased defense spending sharply stoking inflation. But under Regan the steep Federal Reserve interest hikes led to a sharp recession beginning in 1981 - the worst downturn up to then since the Great Depression. Unemployment surged to 10.8% in 1982. But if you had money to invest you could pull 15% in a money market fund. Who needed stocks?
In August 1981 Regan fired striking members of the Professional Air Traffic Controllers Organization (PATCO) after they went on strike violating a federal law against strikes. My personal view is that was the leading edge of an attack on organized labor that lasted decades. Over many years pensions were gutted and wages fell as labor’s ability to negotiate benefits waned. But this probably was beneficial for stock investors. The loss of defined benefit retirement packages also helped propel the rise of the 401-K. Some think this investment vehicle has led to a “boom” for index investing - though that’s a far reach.
Also - In 1987 Regan appointed Alan Greenspan to Federal Reserve Chair. Under Greenspan equity markets surged. Greenspan’s tenure ended in 1986. Critics sight his monetary policy as too lax and stoking inflation in later years.
Bush 1 - Negotiated and signed NAFTA, expanding global trade. This has paradoxically been blamed by some for loss of jobs in the U.S. - although unemployment remains low. I think the ongoing political repercussions from NAFTA do reverberate through the economy today. But they are hard to quantify.
Clinton - We actually achieved a balanced budget under Clinton. But his personal problems partly overshadowed his accomplishments.
Bush 2 - In Bush’s term a global recession of great magnitude ensued which cost equity (index) investors around 50% before it ended 15 months later. Junk bonds were hit hard. The Fed undertook strong monetary stimulus. The effects of those Fed stimulative measures are likely still being felt today. Federal spending increased sharply. “President George W. Bush's economic policies added $6 trillion to the national debt by funding two wars and three tax cuts.” (from the balance money.com).
I’ll stop here. I think the effects of the last three Presidents are too recent to fully access, and very controversial, as all three continue to be actively involved in the politics of the day. Further - a global pandemic that began in 2020 greatly altered the stage. Any administration would have had trouble coping with the economic challenges. Fiscal and monetary emergency measures during the pandemic are seen as one cause of the recent inflation - along with the distortions created by the pandemic itself.
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Question: Would knowing in 1950 (err … pick your start date) what future politicians would do have affected the way you would have chosen to invest for the long term?

Since 2000, I invest based on what has worked lately, never predictions.
Buffet "only" missed 56+% in the last 2 years for his favorite advice, the SP500.
https://schrts.co/SNtMNdYU

Somehow I am on Cambria mailing list. I got an email pitch for its upcoming ETF TAX. Its tax-free conversion of separate accounts into this ETF is touted.
https://www.cambriainvestments.com/tax/
"(Separate Account) Qualifications:
· No single holding can be greater than 25% of the total portfolio being contributed
· Positions greater than 5% can't collectively be more than 50% of the portfolio's net asset value
· $1M minimum (this will go down for fund 2 and fund 3)
· US stocks and ETFs only"

I also uncovered the fact that PIAMX is CLOSED---- though wonderful M* asserts it is open.
M* also asserts that DFA OEF funds are open. And they are. Though you need to go through a DFA-approved financial advisor. At a cost, of course.
Similarly, you can buy the PIA MACS funds through wrap accounts that are subadvised by PIA. "PIA currently participates in approximately 30 Retail Wrap-Fee Programs as a sub-adviser or under a dual contract arrangement."
https://www.morganstanley.com/content/dam/msdotcom/en/wealth/investmentsolutions/pdfs/adv/pacificincomeadv.pdf
M* doesn't say that buying shares is easy or cheap. Just that new positions can be opened.

@Crash If you were intrigued by PIAMX, you might want to investigate PHYSX. According to MFO Premium, the two funds have the same managers and very similar portfolios, although PIAMX has an expense ratio of .20% versus .86% for PHYSX.

Glad for all the inputs. I'll check out PHYSX. :)
...Surprised Institutional shares cab be had with $1k minimum.
...But Schwab lists minimum entry at $2.5k.
And there is the transaction fee. The yield is about a half percent higher than my largest junk holding. Not worth it. But "keep those cards and letters coming." ---Dean Martin.

Portfolio Visualizer shows the two funds very much in sync, though there is a distinct drop in correlation (still at the 99%+ level) in the first half of 2023. It's as if one fund dropped a particular holding or swapped one out for another.
PV also shows that the two funds' returns over the lifetime of PIAMX (the shorter-lived fund) differ by 0.66%, exactly the difference in the funds' ERs. Though PHYSX is slightly more volatile and has a worse max drawdown.
PHYSX is available NTF with a $100 min at Firstrade. At least that's what it says on my trade entry page (I've a closed account so I can't enter a test trade).

@Crash If you were intrigued by PIAMX, you might want to investigate PHYSX. According to MFO Premium, the two funds have the same managers and very similar portfolios, although PIAMX has an expense ratio of .20% versus .86% for PHYSX.

Glad for all the inputs. I'll check out PHYSX. :)
...Surprised Institutional shares cab be had with $1k minimum.
...But Schwab lists minimum entry at $2.5k.
And there is the transaction fee. The yield is about a half percent higher than my largest junk holding. Not worth it. But "keep those cards and letters coming." ---Dean Martin.

High SKEW of 150 means that puts are more expensive now relative to calls. And that's because lots of people & institutions are buying puts for hedging.

OOPS!
Thanks @Derf! What was I thinking? Yes, TRTY has over $100 Mil AUM - still relatively small. And the publicity from the Barron’s interview should help. Some of Cambrea’s etfs are nearer $50 Mil. From what I’ve read, they have never closed one, but did merge 2 smaller etfs together.

An unconventional use of the term "completion".
In indexing, completion index is that complete the total beyond something selective. So, there is SP500 (VFIAX / VOO) and completion index (VEXAX / VXF) that add up to the total stock market (VTSAX / VTI).
One can say that VEXAX = VTSAX - VFIAX, or VXF = VTI - VOO.
For other examples, see https://ybbpersonalfinance.proboards.com/post/345/thread
But from the description of PIA-MACS, it look like they are evaluating the "complete" universe of something and then selecting a subset. IMO, they should have found a better terminology or description.
https://www.pacificincome.com/wp-content/uploads/2024/03/MACS-White-Paper-12-23.pdf

Price-weighted DJIA (5/26/1896- ) has a long continuous history. It has been promoted heavily by Dow Jones, WSJ, Barron's, and for years the general media reported only DJIA (those old enough may remember Cronkite years at CBS). DJIA now formally belongs to SP Global/SPGI (3/4/2012- ) through S&P Dow Jones Indices (a joint venture by SPGI, CME, NWS).
Some of us are older than the market-cap weighted SP500 that started on 3/4/1957 (some variants existed 1923- ); any older data are just produced by backward simulation.
DJIA and SP500 have an average correlation of 95%.
And then there are copycats like Japan's price-weighted Nikkei 225 (9/7/1950- ). If the US is doing it, it must be good kind of thinking.
How many watch or know about TOPIX? TOPIX (7/1/1969- ) is market-cap weighted total market index; there are also TOPIX 30 (interesting number), TOPIX 70, TOPIX 100, TOPIX 500 (another interesting number), TOPIX 1000, and just TOPIX.
With the ETFs, customized indexes can be created at will, so there are now more ETFs (and indexes) than stocks.
But we can safely assume that DJIA would be around in our lifetimes.

Reportedly, Vanguard has about 20,000 employees; although not a concern, for quality of service, at this house, as we don't travel to Vanguard for our own investments.
I will take credit for about $8.5 million of Fidelity's asset base from many individual recommendations over 40 years. :)

And yet Fido rules:
https://riabiz.com/a/2024/11/9/fidelity-investments-surges-past-15-trillion-on-its-way-to-16-trillion-after-its-ceo-made-one-big-contrarian-bet-and-two-smaller-plays-that-have-the-giant-hopping

I read it years ago, great book!
I see kids all over the internet getting started in investing, and having all kinds of questions.
I usually just post a list of about 5-6 books they should read, and this is one of them. But I don't think young people read many books, it's easier to just spam the internet up with basic fundamental questions. If they'd read a few of the classic books they'd be better off than going online and asking questions with zero knowledge.

Nice to see Meb Faber get some attention (Barron’s Interview). I’ve been binging on his podcasts dating back several years - mostly interviews with market players / fund managers. Accessing these through my Amazon Audible accounts- though they are available elsewhere. Quite entertaining and sometimes insightful - particularly if interested in mitigating portfolio risk. I was in the global allocation fund (GAA) for a month or so and then moved the $$ into his Trinity (TNTY) TRTY. It’s 15% of my diversified portfolio. I wouldn't overdo it, but I think the trend following approach has a small role to play in a broadly diversified portfolio. For TRTY the trend following approach comprises around 30% of the fund as I recall.
More broadly, Cambria has as many losers as it does winners. Certainly not the best shop in town. M* rates the firm “below average” in its stewardship section. (Reasons are a bit complex. Read it before investing with them.) And both funds I reference above receive only “neutral” medalist ratings - part of the reason being over-reliance on a single person (Faber).
One positive re the funds I mentioned is that they invest in a fairly large number of other etfs - some from other fund families. And fees are low.

I view prospectuses as notorious for obfuscation, aiming at ambiguity and saying as little as possible. Are there really five co-managers here? If so, then how many co-managers are there on PRWCX? Its prospectus has nearly identical wording aside from the names of the putative co-managers:

T. Rowe Price has established an Investment Advisory Committee with respect to the fund. The committee chair is ultimately responsible for the day-to-day management of the fund’s portfolio and works with the committee in developing and executing the fund’s investment program. The members of the committee are as follows: David R. Giroux, chair, Paul Cho, Donald J. Easley, Matthew Frustaci, Steven D. Krichbaum, Kevin Patrick Loome, Simon Paterson, Sal Rais, Vivek Rajeswaran, Farris G. Shuggi, Mike Signore, Brian Solomon, Matthew Stevenson, Chen Tian, Jon Davis Wood, and Ashley R. Woodruff.

https://prospectus-express.broadridge.com/summary.asp?doctype=pros&clientid=trowepll&fundid=77954M105
In contrast, Giroux and Shuggi are listed as equal co-managers of PRCFX in the Management section of the prospectus. Later, in the "More About the Fund" section, one finds the committee verbiage:

T. Rowe Price has established an Investment Advisory Committee with respect to the fund. The committee cochairs are ultimately responsible for the day-to-day management of the fund’s portfolio and work with the committee in developing and executing the fund’s investment program. The members of the committee are as follows: David R. Giroux and Farris G. Shuggi, cochairs, Paul Cho, Gregg Gola, Kevin Klassen, Steven D. Krichbaum, Chase Lancaster, Amanda Ludwitzke, Jordan M. McKinnie, Justin Eric Olsen, Vivek Rajeswaran, Nikhil Shah, Mike Signore, Latika Signorelli, Brian Solomon, Matthew Stevenson, Chen Tian, Tamara P. Wiggs, and Jon Davis Wood.

https://prospectus-express.broadridge.com/summary.asp?doctype=pros&clientid=trowepll&fundid=77954M402
If PRCFX has but two day-to-day managers, and if Giroux is the manager of PRWCX, then Giroux is also the sole manager of this new ETF. Conversely, if this ETF has five managers, then PRWCX has 16 and PRCFX has 19 (if I've counted correctly).
As to AUM, M* reports Giroux manages ten funds, including variable annuity portfolios. PRCFX is the only one where there is a co-chair listed. He is sole manager (depending on how one defines "manager") of the other nine funds. Total AUM is just under $100B, per M* and Financial Times current data.
Capital Appreciation Premium Income ETF is different from the existing funds, at least if one can glean anything from prospectus tea leaves. Its objective is "to provide regular distributions while aiming for capital preservation with potential for capital appreciation." Most of Giroux' funds' objectives are capital appreciation (or capital growth) only.
Arguably Penn Mutual's Flexibly Managed Fund comes closer to this ETF with its objective "to seek to maximize total return (capital appreciation and income)." But investing for total return is not the same as investing for income.
Further, only Capital Appreciation Premium Income explicitly calls out stock dividends as a component of its investment strategy. "Specifically, the fund seeks to provide regular distributions that may consist of dividends and cash from the covered call option premiums." This sounds more like an equity-income fund with a covered call overlay than a typical Giroux fund.
Still, Flexibly Managed Fund is permitted "to a limited extent" to write covered calls "primarily in an effort to protect against downside risk or to generate additional income"
Then again, it's all tea leaves and slideware at this point.

M* shows $5k minimum to get into NRDCX. Schwab shows $2.5k. And $1k for IRA. But there's a $49.95 fee.

75 years old. https://finance.yahoo.com/news/warren-buffetts-favorite-book-the-intelligent-investor-is-still-the-best-book-about-investing-75-years-later-141755562.html

I hold Aegis Value Fund, symbol AVALX, in a retirement account but have been considering it for my taxable account since I have more room. The December income and capital gain distibution estimates are:
Ordinary Income $0.37 - $0.41
Short-Term Capital Gains $0.49 - $0.54
Long-Term Capital Gains $2.66 - $2.92
The NAV closed at 41.15 yesterday. I am in a fairly high tax bracket and it seems to me that the ordinary income and STCG distributions are fairly high. Using an NAV of 41.15, the LTCG distribution is 6.4%. That too seems high. I am concluding that AVALX is best suited for my retirement account. Is this a correct conclusion?

@BaluBalu
FINI........MBB is on the list, just below LQD
NOW, back to arranging leaf drop onto the lawn; from natures positioning and to get the big mulch job while temps and no rain remain in my part of the state, and before the 5:20pm sunset..........that really sucks.