April 7, 2004

Dear Unitholders:

The net asset value of the Fund as of March 31, 2004 was $3,730.27 per unit. In Canadian dollars, this represents a 4.1% increase for the quarter or a 2.7% increase in U.S. dollars.

In the first quarter of 2004, the major U.S. indexes were almost unchanged reflecting a much more subdued stock market. After the soaring recovery in equities last year, a brief period of digestion in the market is healthy and necessary as it allows business fundamentals to catch up to the higher stock prices. We are reasonably pleased with our own 2.7% U.S. dollar gain in the quarter especially when we consider it in the context of the Fund's 72.5% twelve-month return in U.S. dollars.

The portfolio holdings continued to perform well during the quarter. The majority of our companies have been achieving their earnings targets and, importantly, the management teams appear confident about the future. Where there have been disappointments in the portfolio, they have been minor in nature and have been related to stocks most exposed to terrorist threats or new regulations. These stocks included reasonably small holdings in regional airlines and niche telecom service providers.

As we begin the second quarter, the market is clearly concerned on two fronts: interest rates and earnings. Ultra-low interest rates have long created a dilemma for investors as, ultimately, they have no direction to go but up. On the earnings front, the challenge centers around the difficult upcoming comparisons as we begin to anniversary last year's strong results in reported corporate profits. As the economic recovery matures, overall corporate earnings growth rates obviously begin to slow. Some investors feel that an inevitable rise in interest rates from their 46 year lows, coupled with this less robust earnings growth, will keep a lid on stock prices.

We continue to find many opportunities in stocks with good earnings potential and reasonable valuations. As usual, we are finding these stocks off the beaten path in the small cap growth arena where Formula Growth Fund has an added advantage. This advantage arises from the fact that there are fewer institutional players and less research sponsorship in small caps.

Over the long term, we remain convinced that selecting individual growth stocks and staying invested through thick and thin yield far better returns than the so-called safer investments. This is clearly evident in the chart below from the Investor's Business Daily Friday, March 26, 2004. An individual who invested $10,000 in growth funds since 1990 and who remained invested even as the market crumbled would have more money in his account than if he had invested in cash or long term government bonds or even the average balanced fund. The Formula Growth Fund's return over this same time period would amount to $74,400 US, which is superior to all of the asset classes in the table below as well as the total return for the S&P 500 ($44,921) or the Russell 2000 ($54,003). Our message remains consistent. If you stay the course and avoid worrying too much about the inevitable cycles of the market, you will do very well over the long term.

As of March 31st there are no realized capital gains. This year's unitholders' meeting (see attached) will be held on Tuesday the 18th of May at the Atwater Club. We hope to see you there!

Yours truly,