INVESTMENTS®

September 30, 2016

Madison Large Cap Value FundInvestment Strategy Letter

John Brown, CFAPortfolio ManagerIndustry since 1983

Drew Justman, CFAPortfolio ManagerIndustry since 2001

Our Approach to Investing

The Madison Large Cap Value Fund goal is to achieve long-term outperformance over a full market cycle on a risk-adjusted basis. To achieve this goal, we employ a process to find stocks with rising return on invested capital (ROIC), which is the most important metric for evaluating stocks, in our view. We believe that owning companies with increasing ROIC and an attractive valuation is the right strategy to generate outperformance. Common characteristics of stocks with rising ROIC include expanding margins, accelerating earnings growth and/or working capital improvement on the balance sheet. Stocks with improving ROIC also tend to benefit from valuation multiple expansion, which helps drive superior performance results. Additionally, our process attempts to manage risks by avoiding value traps and dead money stocks, both of which can damage long-term performance.

This quarter we are highlighting airfreight and logistics company FedEx (FDX) as an example of an Industrial stock with good prospects for rising ROIC. FDX owns and operates the world’s premiere express delivery network and largest air cargo fleet. Its capital intensive fleet of 660 aircraft, 52,000 vehicles, and operations in over 220 countries creates an express network with very high barriers to entry. FDX has global brand recognition, density and scale advantages, and is #1 in express delivery in the U.S., Latin America and Canada, and #2 in Asia-Pacific and EMEA, behind DHL. In the U.S., it operates in an attractive duopoly with UPS that allows for good pricing power. We believe these factors provide its competitive advantage.

Our thesis on FDX is that its May 2016 acquisition of competitor TNT Express (TNT) will provide meaningful cost reduction synergies and improve ROIC over the next 12-18 months. FDX paid $4.8 billion for TNT, a purchase price we believe was reasonable and which was $2 billion less than UPS offered to pay for the company a few years earlier. Importantly, TNT gives FDX significant size in Europe, an area the company had only a small presence in previously. As a stand-alone company, TNT was barely profitable, despite having high single-digit market share in Europe. We expect FDX will be able to improve margins and reach its goal of $750 million in annual cost savings. To accomplish this goal, FDX has four main sources of savings, including implementing new technology used in pick-up and delivery operations, having one global express and air network, reducing labor costs, and consolidating sales teams. If the integration goes well, the acquisition of TNT should increase FDX’s global delivery cost advantages.

Outside of the TNT acquisition, we believe the FDX Ground segment is likely to continue to take market share from UPS. FDX Ground is a high margin, high ROIC business that has taken share from UPS consistently over the last decade. It generates 50% of the firm’s total operating profit despite representing only 27% of total sales. FDX Ground benefits from

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Past performance does not predict future results. Please refer to the final two pages of this piece which contain current performance information for the fund, the risks of investing in the fund and a complete list of the fund’s individual portfolio holdings as of quarter end. Individual portfolio hold-ings 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.

an independent contractor model and a separate Ground network, which results in lower labor costs and faster delivery times. UPS is the market leader with an estimated 65% share, while FDX is #2 with approximately 33% share, up from 22% in 2010. We believe there is further growth in Ground from e-commerce, a significant network expansion and continued share gains.

The fund purchased FDX in the quarter after it reached an attractive valuation compared to the overall market. Specifically, FDX traded for less than 0.8x the S&P 500® forward P/E multiple, which is the lowest level it has been valued at in over a decade according to data from research provider FactSet. We believe the combination of cost synergies from its TNT acquisition, continued growth and market share gains in the Ground segment, and a cheap valuation make FDX an attractive investment.

Risks to our thesis include a slowdown in global economic growth, a negative impact from rising energy prices, integration risk that results in lower than expected costs savings, and inefficiencies in the Ground segment due to staffing and delivery challenges associated with e-commerce volumes over the holidays.

Performance Review

For the third quarter, the Madison Large Cap Value Fund (Class Y) returned +1.1% compared to the Russell 1000® Value Index, which gained +3.5%. Sector allocation was positive while stock selection detracted from performance. In terms of sector allocation, underweight positions in Utilities and Consumer Discretionary favorably impacted results. For stock selection, there were positive contributions from Telecom and Energy that were more than offset with negative results in Financials, Industrials and Technology. Within Telecom, mobile phone carrier T-Mobile US (TMUS) was the most additive stock in the portfolio. It continues to take subscriber market share with innovative marketing programs and an improved cellular network. Within Energy, exploration and production firm Apache (APA) and oilfield service company Baker Hughes (BHI) contributed nicely to results. APA made a significant discovery of oil and gas that we believe will drive production growth for the next several years. Within Financials, insurance firm American International Group (AIG) was another notable outperforming stock.

On the negative side, three stocks that performed well earlier in the year trailed the market in the quarter. Within Real Estate, data center real estate investment trust (REIT) Digital Realty (DLR) was the most detractive stock in the portfolio, while specialty insurance company Markel (MKL) negatively impacted performance in Financials. Within Industrials, garbage disposal firm Republic Services (RSG) lagged the index. Another notable underperforming stock was software provider Oracle (ORCL) in Technology. The fund continues to hold all stocks mentioned above.

On a year-to-date basis, the fund returned +6.8% compared to the Russell 1000 Value Index, which gained +10.0%. Sector allocation and stock selection detracted from performance. For sector allocation, underweight positions in the Energy, Utilities and Materials negatively impacted results. In terms of stock selection, there were positive results in Consumer Staples, Consumer Discretionary, Real Estate and Health Care, while there were negative results in Technology, Financials and Industrials. Within Consumer Staples, global meat processor Tyson Foods (TSN) and cereal maker General Mills (GIS) performed well. TSN was the most additive stock in the portfolio. Both TSN and GIS were sold after reaching what we believe were full valuations.

In Consumer Discretionary, toy manufacturer Mattel (MAT) performed well after its Barbie® toy line showed a return to growth. Within Real Estate, DLR contributed nicely to results as it benefits from strong demand for its data centers. Another notable outperforming stock was engineering and construction firm Jacobs Engineering (JEC) in Industrials. On the negative side, within Technology, three names detracted from

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results including ORCL, software peer Microsoft (MSFT) and defense technology firm FLIR Systems (FLIR). FLIR reported a disappointing earnings report that showed lack of margin expansion. The fund sold the stock as this impaired our thesis. In Industrials, conglomerate General Electric (GE) and engineering and construction firm Fluor (FLR) lagged the index. Both stocks have significant exposure to depressed energy end markets. As those end markets recover, we believe GE and FLR will stand to benefit. Another notable underperforming stock was snack food manufacturer Mondelez (MDLZ), which was sold.

John Brown Drew Justman

Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group.

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. Madison Asset Management, LLC. ©October 6, 2016

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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 (see Note 2 below) 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. Class A share returns with sales charge reflect the deduction of the maximum applicable sales charge of 5.75%. Class B shares have no up-front sales charge. If redeemed within six years, however, B shares are subject to a maximum contingent deferred sales charge of 4.5%. 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. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group.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

Drew Justman, CFA, Portfolio Manager Industry since 2001

2016201520142013201220112010200920082007

$15,319

$10,000

Experienced ManagementThe Value of Long-Term Investing

Sep 30, 2016

Madison Large CapValue Fund

Gro

wth

of $

10,0

001

Clas

s A

Sha

res

Class Ticker Inception Date Exp. Ratio3

A MGWAX 12/29/97 1.16%

B MGWBX 12/29/97 1.91%

Y MYLVX 6/30/06 0.91%

Distribution Frequency

Annual

Risk Measure (10-year) Class A

Standard Deviation 14.7%

Downside Capture 90.9%

Upside Capture 86.8%

Total Net Assets

$106.1 Million

Portfolio Turnover

97%

Wtd. Average Market Cap

$112.6 Billion

Total Number of Holdings

34

Fund Features

• Fund seeks long-term capital growth with an opportunity for income

• High conviction of approx. 50 holdings

• Seek companies with rising return on invested captial (ROIC)

• Focus on risk management

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

Class Y 1.11 6.83 13.19 8.12 13.72 4.62 5.16

Class A without sales charge 1.05 6.62 12.97 7.84 13.44 4.36 4.93

with sales charge -4.74 0.45 6.45 5.74 12.10 3.74 4.60

Class B without sales charge 0.87 6.04 12.13 7.04 12.59 3.75 4.60

with sales charge -3.63 1.54 7.66 6.07 12.34 3.75 4.60

Russell 1000® Value Index 3.48 10.00 16.20 9.70 16.15 5.85 -

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

Class A -35.98 15.94 7.98 6.80 11.21 29.37 11.72 -3.27

Russell 1000® Value Index -36.85 19.69 15.51 0.39 17.51 32.53 13.45 -3.83

CharacteristicsTTM P/E 16.8x

P/B 2.0x

3yr EPS Growth -4.1%

ROE 10.0%

Active Share 74.7%

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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 liabil-ities). 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. 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 purchased 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-MNVAX-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

Russell 1000® Value Index

2.84.9

3.3

8.9

15.113.4

24.7 24.2

9.211.5

13.7

9.4

12.210.0

3.5 2.94.5 4.0 4.2 3.6

Large Cap Value Fund

Cash/OtherTelecom UtilitiesMaterialsInformation Technology

IndustrialsHealth CareFinancialsEnergyConsumer Staples

Consumer Discretionary

Real Estate

3.3 4.2

6.6

BAXTER INTERNATIONAL INC 4.8

JPMORGAN CHASE + CO 4.7

CISCO SYSTEMS INC 4.6

T MOBILE US INC 4.5

BAKER HUGHES INC 4.4

JACOBS ENGINEERING GROUP INC 4.3

APACHE CORP 4.0

MARKEL CORP 3.6

AMERICAN INTERNATIONAL GROUP 3.6

ORACLE CORP 3.5

DIGITAL REALTY TRUST INC 3.4

PROCTER + GAMBLE CO WHEN DIS 3.3

NASDAQ INC 3.3

MICROSOFT CORP 3.0

MATTEL INC 2.8

AFLAC INC 2.8

JOHNSON + JOHNSON 2.7

US BANCORP 2.7

Sector Allocation (%)

Complete Stock Holdings

P G + E CORP 2.7

OCCIDENTAL PETROLEUM CORP 2.5

REPUBLIC SERVICES INC 2.3

CHEVRON CORP 2.2

BANK OF NEW YORK MELLON CORP 2.1

BERKSHIRE HATHAWAY INC CL B 2.1

EXXON MOBIL CORP 2.1

GENERAL ELECTRIC CO 2.0

FEDEX CORP 2.0

DOW CHEMICAL CO/THE 1.9

CATERPILLAR INC 1.9

PFIZER INC 1.7

BALL CORP 1.6

NEXTERA ENERGY INC 1.6

FLUOR CORP 1.2

TE CONNECTIVITY LTD 1.2