July 26, 2006

Securities and Exchange Commission

100 F Street, NE

Station Place

Washington, D.C. 20549

Re: Sparrow Funds; File Nos. 333-59877 and 811-08897

Dear Sir/Madam:

On April 19, 2006, a paper copy of this Fidelity Bond was mailed to your offices. Upon reviewing the SEC's website for this Trust, it was noticed that this filing had not been posted. The Office of Filings and Information Services (OFIS) was then called and the ending result was that the aforementioned document could not be located. Due to the recent regulatory change, an electronic version is now being submitted.

You will find enclosed herewith a copy of the Fidelity Bond for Sparrow Funds secured pursuant to Regulation 270.17g-1 of the Regulations of the Commission issued under the Investment Company Act of 1940.

Also enclosed herewith is a copy of the Resolutions of the majority of the Board of Trustees who are not "interested persons" of the above-captioned Registrant approving the amount, type, form, and coverage of the Fidelity Bond now in effect for the Registrant.

The premiums for the Bond have been paid for the period from September 24, 2005 toSeptember 24, 2006.

If you have any questions, please contact the undersigned.

Sincerely,

/s/ Tara Pierson

Tara Pierson

Legal Administration

Attachments

"RESOLVED, the Trustees of the Trust, including the majority of the disinterested Trustees, have reviewed the form and coverage of the Fidelity and Deposit Company of Maryland, Bond No. FIB 000353206 the "Fidelity Bond"); and

FURTHER RESOLVED, that the amount of coverage under the Fidelity Bond be $200,000, which is at least the amount required by Rule 17g-1 promulgated under the Investment Company Act of 1940; and

FURTHER RESOLVED, that the custody and safekeeping of the Trust's securities are exclusively the obligation of the Custodian for the Trust; and

FURTHER RESOLVED, that no employee of the Trust or the Adviser has access to the Trust's portfolio securities; and

FURTHER RESOLVED, that the amount, type, form and coverage of the Fidelity Bond are reasonable and the Fidelity Bond be, and it hereby is, approved; and

FURTHER RESOLVED, that the Secretary of the Trust be, and he hereby is, designated as the person who shall make the filings and give the notices required by paragraph (g) of Rule 17g-1"