Management Discussion and Analysis

FOR THE SIX MONTHS ENDED JUNE 30, 2011

This MD&A is dated August 29, 2011.

The following Management's Discussion and Analysis ("MD&A") of the financial condition and results of operations of Mosaic Capital Corporation ("Mosaic Capital") should be read in conjunction with the audited consolidated financial statements of Mosaic Diversified Income Fund ("the Fund") for the year ended December 31, 2010 and the unaudited condensed interim consolidated financial statements of Mosaic Capital for the six months ended June 30, 2011.

Corporate Office:
400, 2424 - 4th Street SW,
Calgary, Alberta T2S 2T4
Phone: 403-218-6500