April 7, 2006

Dear Unitholder:

The net asset value of the Formula Growth Fund as of March 31, 2006 was $4,185.84 per unit. In Canadian dollars, this represents a 10.6% increase for the quarter and a 10.4% increase in U.S. dollars.

We are very pleased with our performance in the first quarter. Our 10.4% U.S. dollar increase was well ahead of the major U.S. market indexes as well as the 6.6% return of the average U.S. diversified equity fund tracked by Lipper. After outperforming the average U.S. small cap manager and Russell 2000 substantially last year, our results slightly lagged these benchmarks during the first quarter this year. The average U.S. small cap manager returned 12.2% and the small cap Russell Index returned 13.7%. Our performance was strong across the portfolio with all sectors contributing nicely to the first quarter's results. Unfortunately our lack of representation in the still strong cyclical stocks hurt the Fund's performance marginally.

We were also pleased in the quarter to get a break from the relentlessly strong Canadian dollar. Since the beginning of 2003, the U.S. dollar has declined almost 30% against the Canadian dollar. We feel that the majority of U.S. dollar weakness is probably behind us but, as always, your guess is as good as ours with respect to where or when the exchange rate will finally settle in. We would remind you that since the beginning of 2003, the unit price of the Fund when expressed in U.S. dollars, has soared 106% or 25% compounded.

So far in 2006, the strongest stock market performers were again the small and medium sized stocks. The large cap stocks continue to weigh down the popular S&P 500 Index. While Formula Growth Fund, in U.S. dollars, and the smaller cap indexes like the Russell 2000 and S&P 600 make or flirt with new all time highs, the large cap S&P 500 remains 18% below its high. The market cap weighted NASDAQ would need to more than double from here to make a new high.

We see little reason for the relative strength in small cap stocks to reverse itself as we feel earnings growth will be the strongest for small stocks as we move through the balance of 2006 and into 2007. Given that valuations are the same for both large and small cap stocks, we are delighted to own the more rapidly growing smaller companies.

As of March 31st there are no realized capital gains. This year's unitholders' meeting will be held on Tuesday the 16th of May at the Atwater Club (see below). We hope to see you there!

Yours truly,