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SIGNATURE ALFRED J. RATCLIFFE
TITLE FIRST VICE PRESIDENT
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees
of Euclid Mutual Funds
In planning and performing our audit of the financial statements and financial
highlights of Euclid Market Neutral Fund, the Series of Euclid Mutual Funds,
for the period May 1, 1998 (commencement of operations) through October 31,
1998, we considered its internal control, including control over safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and financial highlights
and to comply with the requirements of Form N-SAR, not to provide assurance
on internal control.
The management of Euclid Market Neutral Fund is responsible for establishing
and maintaining internal control. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial statements and
financial highlights for external purposes that are fairly presented in
conformity with generally accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized acquisition, use or
disposition.
Because of inherent limitations in internal controls, errors or fraud may occur
and may not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not necessarily disclose all
matters in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or operation of any
specific internal control component does not reduce to a relatively low level
the risk that errors or fraud in amounts that would be material in relation
to the financial statements and financial highlights being audited may occur
and not be detected within a timely period by employees in the normal course
of performing their assigned functions. However, we noted no matters
involving internal control, including controls over safeguarding securities,
that we consider to be material weaknesses as defined above as of October 31,
1998.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
/s/PricewaterhousrCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
November 24, 1998
