April 4, 2001

Dear Unitholders:

The net asset value of the Fund as of March 31, 2001 was $3,830.90 per unit. In Canadian dollars, this represents a 4.6% decrease for the quarter. Significant weakness in the Canadian dollar helped our performance measurably. The Fund declined 9.2% in U.S. dollars which was in line with most of the Indexes listed below. According to Lipper, the mutual fund ranking service, Formula Growth Fund performed considerably better than the 23% decline for the average U.S. growth fund. We take some solace in this fact.

The tape continues to be very ugly. At the beginning of the year 2000 we wrote that speculative bubbles seldom end gracefully and, unfortunately, we were correct. Most representative of the bubble has been the technology laden NASDAQ Index. Since its peak at 5049 in March 2000, the NASDAQ has declined by more than 67% and shows little sign of relenting. This year-long decline in stocks has vapourized almost U.S. $5.3 trillion in wealth as measured by the broadly based Wilshire 5000 Index. This has had a sobering effect on the public's fascination with stocks. Even professional investors are finding their enthusiasm is waning.

Generally, when pessimism is as high as stock prices are low, the market is close to a bottom. The imponderable is always the exact timing of the recovery. Remember, these recoveries usually happen when you least expect them. For example, December 1990 marked the beginning of a terrific 10 year run for stocks. That rally emanated out of the rubble of the last recession and the fears associated with the Gulf War.

In bearish periods it is important to have patience and to not lose sight of the longer term. The April 3, 2001 Investor's Business Daily had an article listing the best mutual funds of the last ten years. Out of the thousands of funds in the U.S., only 600 have even managed to survive ten years while we are about to complete our forty-first year. Of these 600 funds, just 184 beat the S&P 500. We are delighted to report Formula Growth Fund's 18.7% U.S. dollar return would rank twenty-third on their list!

We continue to believe bear markets are part of an unhappy yet healthy process which purge the market of excess. More importantly, these corrections help clear the deck for the new stock market leaders represented by new or re-remerging, exciting businesses. We are confident we will find our fair share of these investment opportunities in the coming years.

For our taxable Canadian residents, the realized capital gains for the first quarter is $35 per unit, of which 50% is taxable.