-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fi+llQ7lmWJfV9arzVyiWUJX46gcsBgDr0LyVEo1km2lGF7fEfb0ufVfFA1StWuw ccEjg4mFM4VPo/U+VrWhsw== 0000930413-00-000020.txt : 20000107 0000930413-00-000020.hdr.sgml : 20000107 ACCESSION NUMBER: 0000930413-00-000020 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991031 FILED AS OF DATE: 20000106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALGER FUND CENTRAL INDEX KEY: 0000003521 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-01355 FILM NUMBER: 502461 BUSINESS ADDRESS: STREET 1: 75 MAIDEN LN CITY: NEW YORK STATE: NY ZIP: 10038 BUSINESS PHONE: 2128068800 N-30D 1 ANNUAL REPORT FELLOW SHAREHOLDERS: November 24, 1999 THE YEAR IN REVIEW As 1999 draws to a close, investors may look back on this decade as one of remarkable opportunity. From January 1, 1990 through October 31, 1999, the value of the U.S. stock market rose nearly 393%, as measured by the S&P 500. The current economic boom has lasted 101 months, one month short of the record for this century. And the lengthy economic expansion, combined with relatively low interest rates and low inflation, has contributed to an unprecedented four consecutive years of 20%-plus returns for stock investors, with few significant corrections along the way. The last two years have seen an increase in day-to-day volatility, more in line with longer term norms. This trend continued in 1999, driven by concerns over the stability of global financial systems and the shorter term outlook for U.S. interest rates. Year to date, 1999 has again generated double-digit returns for stock investors, with the S&P 500 up 12.03% from January through the end of October. Strong economic growth -- a 3.7% rise in GDP in the first quarter -- contributed to the Dow Jones Industrial Average's push above all records to close above 10,000 in March. From May to July, the Dow traded in the 11,000 range before falling back on fears of higher interest rates and concerns that stocks had become overvalued. During the second quarter, concerns about potential inflation increased as unemployment remained at its lowest levels since 1970. While core inflation remained in the 2% range, oil prices began rising early in the year and had nearly doubled by July. This was largely a political rather than a true supply/demand effect and has not had a broad effect on market prices, yet it bears watching in coming months. Concerns about potential increases in core inflation led the Federal Reserve to adopt a tightening bias during the second quarter. In the following months, the Federal Open-Market Committee twice raised short-term interest rates to forestall potential increases in inflation. In the bond markets higher interest rates pushed prices lower, particularly at the short and long ends of the maturity spectrum. In this environment, market gains in the first quarter of 1999 were led by the large-cap, blue-chip growth companies, as investors sought a sense of security in the wake of 1998's Asian currency crisis and Russian debt default. As recovery in Asia became more certain, the second quarter saw a resurgence of interest in smaller-cap issues. Small-cap value stocks turned in the best results and large-cap growth stocks turned in the worst. The third quarter of 1999 saw an overall decline in domestic stocks. The S&P 500 fell 6.25%, while the S&P MidCap 400 Index dropped 8.40%. Small-capitalization stocks, as measured by the Russell 2000 Growth Index, fared slightly better, falling 4.91% during the same quarter. Overall, growth stocks again outperformed value stocks. Factors affecting the market's performance in the third quarter included the potential impact on earnings of technology companies from the earthquake in Taiwan and continued uncertainty about interest rates. Entering the fourth quarter, there were gains in October with the S&P 500 returning 6.33%, led by a recovery in technology stocks. The technology-laden Nasdaq 100 rose 9.54% for the month. PORTFOLIO MATTERS By maintaining a focus on bottom-up stock selection in a market environment that evidenced clear biases toward certain segments of the market, all of The Alger Fund's Portfolios outperformed their benchmarks for the 12 months ended October 31, 1999. ALGER SMALL CAPITALIZATION PORTFOLIO For the fiscal year ended October 31, 1999, the Alger Small Capitalization Portfolio returned 32.09%, outperforming the Russell 2000 Growth Index, which rose 29.29% during the same period. Small-cap stocks were harder hit by last year's global financial crisis and trailed larger issues through the first quarter, moving into positive terrority at the end of March and through the second quarter before falling back somewhat during the third quarter. Some of the Fund's positions in communications and technology stocks contributed substantially to the Portfolio's strong performance. ALGER GROWTH PORTFOLIO For the fiscal year ended October 31, 1999, the Alger Growth Portfolio gained 39.32% compared to a 25.67% rise in the benchmark S&P 500. The Portfolio benefited from the market's preference for large, blue-chip stocks through the first quarter, with the technology and health care sectors -- well-represented among the Portfolio's holdings -- leading the large-cap growth stock surge. In the second half of the fiscal year higher energy prices adversely affected the results of the energy-dependent transportation sector while rising interest rates had a negative impact on the financial sector, but the Portfolio was not heavily invested in these areas. ALGER MIDCAP GROWTH PORTFOLIO The Alger MidCap Growth Portfolio returned 32.33% for the fiscal year ended October 31, 1999 compared to 21.07% for the benchmark S&P MidCap 400. Midcap stocks as a group benefited during the second quarter from the market's rotation away from larger issues, with technology stocks leading the resurgence. High employment and strong economic growth favored the Portfolio's holdings in retail and consumer stocks. ALGER BALANCED PORTFOLIO The Alger Balanced Portfolio posted a 31.49% gain for the 12 months ended October 31, 1999, comparing very favorably to the S&P 500 Index return of 25.67% and the Lehman Brothers Government/Corporate Bond Index of -0.65%. As is often the case, stock and bond markets moved in opposite directions through much of 1999, providing diversification benefits to portfolios invested in both asset classes. Careful security selection and judicious weighting of the Balanced Portfolio's allocation between stock and fixed-income investments contributed to the Portfolio's outperforming its benchmarks. ALGER CAPITAL APPRECIATION PORTFOLIO During the 12 months ended October 31, 1999, the Alger Capital Appreciation Portfolio gained 62.99% compared to the S&P 500's rise of 25.67%. The Portfolio's weightings in high-performing technology, Internet and communications, and retail stocks helped it to outperform its benchmark index by a wide margin. LOOKING AHEAD The Alger Fund's Portfolios are managed to pursue their investment objectives by applying an investment philosophy which we at Fred Alger Management believe will serve investors well as we enter the next millennium. Changing demographics, new technologies, and ever-increasing sophistication in the financial markets will create new opportunities in the decades to come. Through rigorous fundamental research, coupled with advanced analytic capabilities, we will continue to seek out companies that offer investors the potential for superior returns. Respectfully submitted, /s/ DAVID D. ALGER - ------------------- David D. Alger President TABLE OF CONTENTS Alger Growth Portfolio: Portfolio Highlights.............................................. 4 Schedule of Investments........................................... 5 Financial Highlights.............................................. 7 Alger Small Capitalization Portfolio: Portfolio Highlights.............................................. 9 Schedule of Investments...........................................10 Financial Highlights..............................................12 Alger Balanced Portfolio: Portfolio Highlights..............................................14 Schedule of Investments...........................................15 Financial Highlights..............................................18 Alger MidCap Growth Portfolio: Portfolio Highlights..............................................20 Schedule of Investments...........................................21 Financial Highlights..............................................23 Alger Capital Appreciation Portfolio: Portfolio Highlights..............................................25 Schedule of Investments...........................................26 Financial Highlights..............................................28 Alger Money Market Portfolio: Schedule of Investments...........................................30 Financial Highlights..............................................32 Statements of Assets and Liabilities.........................................33 Statements of Operations.....................................................34 Statement of Cash Flows (Alger Capital Appreciation Portfolio)...............35 Statements of Changes in Net Assets..........................................36 Notes to Financial Statements................................................38 Report of Independent Public Accountants ....................................44 ALGER GROWTH PORTFOLIO PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 1999 (UNAUDITED) HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES - 10 YEARS ENDED 10/31/99 [The following table represents a chart in the printed piece] ALGER GROWTH S&P 500 11/1/89 10000 10000 9600 9252 10/31/91 13997 12351 15350 13583 10/31/93 19827 15612 20636 16215 10/31/95 28431 20504 30729 25444 10/31/97 38459 33617 46694 41007 10/31/99 65541 51533 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in the Alger Growth Class B shares and the S&P 500 Index for the ten years ended October 31, 1999. Figures for both the Alger Growth Class B shares and the S&P 500 Index, an unmanaged index of common stocks, include reinvestment of dividends. Performance for the Alger Growth Class A and Class C shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. Performance Comparison as of 10/31/99+
Average Annual Total Returns 1 5 10 Since Year Years Years Inception ------------------------------------------------------------------------- Class A (Inception 1/1/97) 33.69% * * 27.71% S&P 500 Index 25.67% * * 25.92% - ------------------------------------------------------------------------------------------------- Class B (Inception 11/11/86) 34.32% 25.42% 20.68% 18.14% S&P 500 Index 25.67% 26.02% 17.82% 17.24% - ------------------------------------------------------------------------------------------------- Class C (Inception 8/1/97) 38.23% * * 23.57% S&P 500 Index 25.67% * * 18.88%
The Portfolio's average annual total returns include changes in share price and reinvestment of dividends and capital gains. Past performance does not guarantee future results. Investment return and principal will fluctuate and the Portfolio's shares, when redeemed, may be worth more or less than their original cost. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. The Alger Fund ALGER GROWTH PORTFOLIO SCHEDULE OF INVESTMENTS October 31, 1999 4 THE ALGER FUND ALGER GROWTH PORTFOLIO SCHEDULE OF INVESTMENTS October 31, 1999 COMMON STOCKS--87.6% Shares Value ------- --------- ADVERTISING--9% Omnicom Group Inc.............. 105,100 $ 9,248,800 ------------ AEROSPACE--3.8% AlliedSignal Inc.............. 304,700 17,348,856 United Technologies Corp....... 363,500 21,991,750 ------------ 39,340,606 ------------ AUTOMOTIVE--.9% Harley Davidson, Inc........... 63,000 9,667,938 ------------ BIO-TECHNOLOGY--2.1% Amgen Inc.*.................... 213,600 17,034,600 Biogen Inc.*................... 54,100 4,010,163 ------------ 21,044,763 ------------ BROADCASTING--.5% Clear Channel Communications Inc.* ........ 63,300 5,087,738 ------------ BUILDING & CONSTRUCTION--.4% Masco Corp..................... 144,800 4,416,400 ------------ BUSINESS SERVICES--1.2% IMS Health Inc................. 439,000 12,731,000 ------------ COMMUNICATION EQUIPMENT--7.1% Cisco Systems, Inc.*........... 428,150 31,683,100 Corning Inc.................... 273,400 21,496,075 Motorola, Inc.................. 197,500 19,243,906 ------------ 72,423,081 ------------ COMMUNICATIONS--12.0% America Online Inc.*........... 288,900 37,466,719 At Home Corp. Series A.*....... 202,066 7,552,217 Comcast Corp. Cl. A. Special... 284,200 11,971,925 COX Communications Inc., Cl. A.* 174,500 7,928,844 MCI Worldcom Inc.*............. 181,500 15,574,968 MediaOne Group Inc.*........... 239,900 17,047,894 Qualcomm Inc.*................. 23,400 5,212,350 SBC Communications Inc......... 130,716 6,658,346 Sprint Corp.................... 194,550 14,457,496 ------------ 123,870,759 ------------ COMPUTER RELATED & BUSINESS EQUIPMENT--.9% Sun Microsystems Inc.*......... 89,100 9,427,894 ------------ COMPUTER SERVICES--4.4% eBay Inc.*..................... 177,900 24,038,738 Yahoo Inc.*.................... 121,635 21,780,267 ------------ 45,819,005 ------------ COMPUTER SOFTWARE--5.0% Intuit Inc.*................... 213,000 $ 6,203,625 Microsoft Corporation*......... 490,700 45,420,418 ------------ 51,624,043 ------------ CONGLOMERATE--2.3% Tyco International Ltd......... 589,588 23,546,670 ------------ ENERGY & ENERGY SERVICES--2.2% Halliburton Co................. 600,600 22,635,113 ------------ FINANCIAL SERVICES--12.3% American Express Co............ 51,000 7,854,000 Bank of America Corp........... 369,987 23,817,913 Citigroup Inc.................. 594,000 32,150,250 Firstar Corp................... 136,751 4,017,060 Household International Inc.... 326,500 14,570,062 Kansas City Southern Industries, Inc. ... 183,400 8,700,038 Merrill Lynch & Co., Inc....... 64,800 5,086,800 Morgan Stanley Dean Witter & Co. ........... 281,000 30,997,813 ------------ 127,193,936 ------------ FOOD CHAINS--.7% Kroger Co.*.................... 328,000 6,826,500 ------------ INSURANCE--2.9% American International Group, Inc. ................. 283,951 29,229,206 ------------ LEISURE & ENTERTAINMENT--.9% Carnival Corp.................. 202,100 8,993,450 ------------ MANUFACTURING--.5% Solectron Corp.*............... 70,500 5,305,125 ------------ OIL & GAS--.8% Baker Hughes Inc............... 306,300 8,557,256 ------------ PHARMACEUTICALS--6.5% Bristol Myers Squibb Co........ 61,000 4,685,563 Pfizer Inc..................... 755,000 29,822,500 Warner-Lambert Co.............. 407,300 32,507,631 ------------ 67,015,694 ------------ RETAILING--7.5% Abercrombie & Fitch Co., Cl. A.* ..................... 95,800 2,610,550 Amazon.com Inc.*............... 163,200 11,526,000 Best Buy Company Inc.*......... 190,200 10,567,988 Costco Wholesale Corp.*........ 110,200 8,850,438 Home Depot, Inc................ 388,800 29,354,400 Wal-Mart Stores Inc............ 254,400 14,421,300 ------------ 77,330,676 ------------ 5 THE ALGER FUND ALGER GROWTH PORTFOLIO SCHEDULE OF INVESTMENTS (Continued) October 31, 1999 Common Stocks--(cont.) Shares Value ------ ------ SEMICONDUCTOR CAPITAL EQUIPMENT--3.6% Applied Materials Inc.*........ 306,400 $ 27,518,550 Teradyne, Inc.*................ 252,000 9,702,000 ------------ 37,220,550 ------------ SEMICONDUCTORS--8.2% Altera Corporation*............ 228,700 11,120,538 Intel Corp..................... 178,600 13,830,338 Linear Technology Corporation.. 216,000 15,106,500 Micron Technology Inc.*........ 316,200 22,549,012 Texas Instruments, Incorporated 53,900 4,837,525 Xilinx, Inc.*.................. 221,500 17,415,437 ------------ 84,859,350 ------------ Total Common Stocks (Cost $772,174,612).......... 903,415,553 ------------ Principal Amount Value ---------- -------- Short-Term Corporate Notes--9.6% Atlantis One Funding Corp., 5.33%, 11/08/99.............$10,850,000 $10,838,755 Enterprise Funding Corp., 5.33%, 11/19/99 (a)......... 31,000,000 30,917,385 Ford Motor Credit Company, 5.23%, 11/16/99............. 1,200,000 1,197,385 General Motors Acceptance Corporation, 5.25%, 11/03/99............. 2,700,000 2,699,213 GTE Funding Inc., 5.31%, 11/22/99............. 13,650,000 13,607,719 Merrill Lynch & Co., Inc., 5.30%, 11/22/99............. 31,000,000 30,904,158 Nestle Capital Corporation, 5.22%, 11/16/99............. 8,700,000 8,681,078 ------------- Total Short-Term Corporate Notes (Cost $98,845,693).......... 98,845,693 ------------- Total Investments (Cost $871,020,305)(b)...... 97.2% 1,002,261,246 Other Assets In Excess of Liabilities 2.8 28,445,303 ====== ============== Net Assets.....................100.0% $1,030,706,549 ------ -------------- * Non-income producing security. (a)Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified institutional buyers. (b)At October 31, 1999, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $871,020,305, amounted to $131,240,941 which consisted of aggregate gross unrealized appreciation of $149,530,013 and aggregate gross unrealized depreciation of $18,289,072. See Notes to Financial Statements. 6 THE ALGER FUND ALGER GROWTH PORTFOLIO Financial Highlights For a share outstanding throughout the year
Class B(i) -------------------------------------------------------------- Year Ended October 31, -------------------------------------------------------------- 1999 1998 1997 1996 1995 Net asset value, beginning of year.................. $ 12.00 $ 11.50 $ 9.49 $ 9.38 $ 6.97 ------- ------- ------- ------- ------- Net investment income (loss)........................ (.18)(ii) (.11)(ii) (.13) (.08)(ii) (.02) Net realized and unrealized gain (loss) on investments................................... 4.56 2.10 2.44 .78 2.59 ------- ------- ------- ------- ------- Total from investment operations.................... 4.38 1.99 2.31 .70 2.57 Distributions from net realized gains............... (1.29) (1.49) (.30) (.59) (.16) ------- ------- ------- ------- ------- Net asset value, end of year........................ $ 15.09 $ 12.00 $ 11.50 $ 9.49 $ 9.38 ======= ======= ======= ======= ======= Total Return (iii).................................. 39.3% 20.5% 24.9% 8.1% 37.8% ======= ======= ======= ======= ======= Ratios and Supplemental Data: Net assets, end of year (000's omitted)................................ $770,311 $390,885 $304,984 $266,207 $154,284 ======= ======= ======= ======= ======= Ratio of expenses to average net assets..................................... 1.96% 2.00% 2.08% 2.08% 2.09% ======= ======= ======= ======= ======= Ratio of net investment income (loss) to average net assets.......................... (1.26%) (.98%) (1.13%) (.84%) (1.03%) ======= ======= ======= ======= ======= Portfolio Turnover Rate........................... 205.94% 146.64% 128.26% 94.91% 118.16% ======= ======= ======= ======= =======
- --------------- See footnotes on page 8. 7 THE ALGER FUND ALGER GROWTH PORTFOLIO Financial Highlights For a share outstanding throughout the period
Class A (v) Class C (iv) ------------------------------------- ------------------------------------ Year Year Ten Months Year Year Three Months Ended Ended Ended Ended Ended Ended October 31, October 31, October 31, October 31, October 31, October 31, 1999 1998 1997(vi) 1999 1998 1997(vi) ---------- ----------- ---------- ---------- ---------- ---------- Net asset value, beginning of period... $ 12.19 $ 11.58 $ 9.40 $ 12.00 $ 11.50 $ 11.98 ------- ------- ------- ------- ------- ------ Net investment income (loss)........... (.07)(ii) (.03)(ii) (.02) (.18)(ii) (.11)(ii) (.02) Net realized and unrealized gain (loss) on investments...................... 4.64 2.13 2.20 4.55 2.10 (.46) ------- ------- ------- ------- ------- ------ Total from investment operations....... 4.57 2.10 2.18 4.37 1.99 (.48) Distributions from net realized gains.. (1.29) (1.49) -- (1.29) (1.49) -- ------- ------- ------- ------- ------- ------ Net asset value, end of period......... $ 15.47 $ 12.19 $ 11.58 $ 15.08 $ 12.00 $ 11.50 ======= ======= ======= ======= ======= ======= Total Return (iii)..................... 40.4% 21.4% 23.2% 39.2% 20.5% (4.0%) ======= ======= ======= ======= ======= ======= Ratios and Supplemental Data: Net assets, end of period (000's omitted)................... $228,896 $121,930 $ 52,307 $ 31,500 $ 3,312 $ 199 ======== ======== ========= ======== ======= ======= Ratio of expenses to average net assets........................ 1.21% 1.25% 1.30% 1.97% 2.00% 2.02% ======== ======== ========= ======== ======= ======= Ratio of net investment income (loss) to average net assets............. (.50%) (.23%) (.39%) (1.30%) (.97%) (1.43%) ======== ======== ========= ======== ======= ======= Portfolio Turnover Rate.............. 205.94% 146.64% 128.26% 205.94% 146.64% 128.26% ======== ======== ========= ======== ======= =======
(i) Per share data has been adjusted to reflect the effect of a 3 for 1 stock split which occurred September 27, 1995. (ii) Amount was computed based on average shares outstanding during the year. (iii) Does not reflect the effect of any sales charges. (iv) Initially offered August 1, 1997. (v) Initially offered January 1, 1997. (vi) Ratios have been annualized; total return has not been annualized. See Notes to Financial Statements. 8 ALGER SMALL CAPITALIZATION PORTFOLIO PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 1999 (UNAUDITED) HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES - 10 YEARS ENDED 10/31/99 [The following table represents a chart in the printed piece] ALGER SMALL CAP RUSSELL 2000 GROWTH 11/1/89 10000 10000 9292 7366 10/31/91 15214 12267 15736 12223 10/31/93 19793 15605 19586 15462 10/31/95 28626 18642 29534 21126 10/31/97 33328 25599 29709 21542 10/31/99 39418 27850 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in the Alger Small Capitalization Class B shares and the Russell 2000 Growth Index for the ten years ended October 31, 1999. Figures for both the Alger Small Capitalization Class B shares and the Russell 2000 Growth Index, an unmanaged index of common stocks, include reinvestment of dividends. Performance for the Alger Small Capitalization Class A and Class C shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. PERFORMANCE COMPARISON AS OF 10/31/99+
AVERAGE ANNUAL TOTAL RETURNS 1 5 10 SINCE YEAR YEARS YEARS INCEPTION ----------------------------------------------------------------- Class A (Inception 1/1/97) 26.38% * * 8.68% Russell 2000 Growth Index 29.29% * * 8.44% - --------------------------------------------------------------------------------------------------------- Class B (Inception 11/11/86) 27.09% 14.48% 14.70% 16.17% Russell 2000 Growth Index 29.29% 12.49% 10.79% 9.90% - --------------------------------------------------------------------------------------------------------- Class C (Inception 8/1/97) 31.42% * * 6.70% Russell 2000 Growth Index 29.29% * * 5.89%
THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. 9 THE ALGER FUND ALGER SMALL CAPITALIZATION PORTFOLIO SCHEDULE OF INVESTMENTS October 31, 1999 COMMON STOCKS--94.4% SHARES VALUE --------- ---------- ADVERTISING--5.0% Outdoor Systems, Inc.*...........237,075 $ 10,046,052 Young & Rubicam Inc..............323,000 14,777,250 ------------ 24,823,302 ------------ AUTOMOTIVE--.4% Sonic Automotive Inc., Cl. A*....212,900 2,222,143 ------------ AUTOMOTIVE EQUIPMENT & SERVICES--.8% Speedway Motorsports Inc.*....... 92,000 4,013,500 ------------ BIO-TECHNOLOGY--2.8% IDEC Pharmaceuticals Corporation* 35,700 4,147,893 Medimmune Inc.*.................. 42,700 4,782,400 Sepracor Inc.*................... 58,300 4,849,831 ------------ 13,780,124 ------------ BROADCASTING--.7% Salem Communications Corp., Cl. A* ................ 123,000 3,059,625 Spanish Broadcasting System Inc. Cl. A.............. 25,000 665,625 ------------ 3,725,250 ------------ BUSINESS SERVICES--5.6% BISYS Group Inc.*................249,300 12,714,300 FactSet Research Systems Inc.....148,100 9,839,392 Fiserv Inc.*..................... 58,400 1,868,800 Rent-Way Inc.*...................210,500 3,499,562 ------------ 27,922,054 COMMUNICATION EQUIPMENT--3.4% Aware Inc.*...................... 89,000 2,831,312 Flextronics International Ltd*... 85,000 6,035,000 SDL Inc.*........................ 65,000 8,015,313 ------------ 16,881,625 ------------ COMMUNICATIONS--.9% McLeodUSA Inc., Cl. A*........... 86,000 3,837,750 Triton PCS Holdings Inc., Cl. A*. 20,000 705,000 ------------ 4,542,750 ------------ COMPUTER RELATED & BUSINESS EQUIPMENT--6.4% Antec Corp.*.....................267,200 12,959,200 Dupont Photomasks Inc.*.......... 91,400 4,524,300 Sanmina Corporation*.............160,000 14,410,000 ------------ 31,893,500 ------------ COMPUTER SERVICES--10.0% CNET Inc.*.......................184,900 $ 8,724,968 eBay Inc.*.......................109,200 14,755,650 Exodus Communications, Inc.*.....122,800 10,560,800 QRS Corp.*.......................162,450 9,036,280 Yahoo Inc.*...................... 40,000 7,162,520 ------------ 50,240,218 ------------ COMPUTER SOFTWARE--3.6% BSquare Corp.*................... 75,000 2,967,187 Dendrite International Inc.*..... 77,900 2,444,112 Intuit Inc.*.....................435,900 12,695,586 ------------ 18,106,885 ------------ CONSUMER PRODUCTS--2.4% Furniture Brands International Inc.* ...........114,500 2,218,437 Mettler-Toledo International Inc.* ...........220,000 6,558,750 Pittway Corp., Cl. A............. 89,000 2,937,000 ------------ 11,714,187 ------------ ENERGY & ENERGY SERVICES--1.2% Calpine Corp.*................... 30,000 1,728,750 EOG Resources Inc................110,000 2,289,375 Forest Oil Corporation*..........134,000 1,792,250 ------------ 5,810,375 ------------ FINANCIAL SERVICES--1.4% National Commerce Bancorp........285,000 7,125,000 ------------ HEALTH CARE--.8% Cytyc Corporation*............... 95,000 3,776,250 ------------ MEDICAL SERVICES--3.6% Hooper Holmes Inc................239,400 6,433,874 MedQuist Inc.*...................356,400 11,404,800 ------------ 17,838,674 ------------ OIL & GAS--1.9% B.J. Services Company*...........174,700 5,994,393 Varco International Inc.*........350,000 3,696,875 ------------ 9,691,268 ------------ PHARMACEUTICALS--2.0% Forest Laboratories, Inc.*.......215,000 9,863,124 ------------ RESTAURANTS & LODGING--2.0% Outback Steakhouse, Inc.*........421,800 9,701,400 ------------ 10 The Alger Fund ALGER SMALL CAPITALIZATION PORTFOLIO SCHEDULE OF INVESTMENTS (Continued) October 31, 1999 COMMON STOCKS--(cont.) SHARES VALUE -------- ----------- RETAILING--20.9% Abercrombie & Fitch Co., Cl. A*..110,800 $ 3,019,300 Amazon.com Inc.*.................109,500 7,733,437 Bed Bath & Beyond Inc.*..........292,700 9,750,569 BJ's Wholesale Club Inc.*........491,400 15,141,262 Ethan Allen Interiors Inc........371,700 13,218,580 Family Dollar Stores Inc.........513,000 10,580,625 Lands End Inc.*.................. 65,000 5,000,937 Linens'n Things Inc.*............401,200 15,947,700 Tiffany & Co.....................165,600 9,853,200 Too Inc.*........................150,000 2,400,000 Tuesday Morning Corp.*...........150,000 3,450,000 Williams Sonoma Inc.*............149,400 8,030,250 ------------ 104,125,860 ------------ SEMICONDUCTOR CAPITAL EQUIPMENT--4.0% ASM Lithography Holding NV*......177,000 12,854,625 Atmi Inc.*.......................100,000 2,693,750 PRI Automation, Inc.*............103,600 4,156,950 ------------ 19,705,325 ------------ SEMICONDUCTORS--14.3% Altera Corporation*..............205,000 9,968,125 Applied Micro Circuits Corp.*.... 25,000 1,945,311 Conexant Systems Inc.*........... 86,800 8,104,950 Dallas Semiconductor Corp........100,000 5,887,500 Lattice Semiconductor Corp.*..... 50,000 1,768,750 Linear Technology Corporation.... 93,600 6,546,150 Maxim Integrated Products, Inc.*. 95,000 7,499,062 Microchip Technology Incorporated*..................182,300 12,145,737 Vitesse Semiconductor Corp.*.....139,000 6,376,624 Xilinx, Inc.*....................136,300 10,716,587 ------------ 70,958,796 ------------ MISCELLANEOUS--.3% Coinstar Inc.* ..................201,300 1,534,912 ------------ Total Common Stocks (Cost $361,451,505) ........... 469,996,522 ------------ PRINCIPAL AMOUNT VALUE ----------- --------- Short-Term Corporate Notes--5.3% Enterprise Funding Corp., 5.33%, 11/19/99(a)........ $ 8,000,000 $ 7,978,680 France Telecom, 5.32%, 11/23/99(a)......... 18,250,000 18,190,667 ------------ Total Short-Term Corporate Notes (Cost $26,169,347)............. 26,169,347 ------------ Total Investments (Cost $387,620,852)(b)......... 99.7% 496,165,869 Other Assets In Excess of Liabilities................. .3 1,321,247 ----- ----------- Net Assets....................... 100.0% $497,487,116 ===== ============= * Non-income producing security. (a)Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified institutional buyers. (b)At October 31, 1999, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $387,620,852, amounted to $108,545,017 which consisted of aggregate gross unrealized appreciation of $123,646,246 and aggregate gross unrealized depreciation of $15,101,229. See Notes to Financial Statements. 11 THE ALGER FUND ALGER SMALL CAPITALIZATION PORTFOLIO Financial Highlights For a share outstanding throughout the year
CLASS B(I) --------------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------------- 1999 1998 1997 1996 1995 --------- --------- --------- --------- --------- Net asset value, beginning of year.................. $ 8.61 $ 10.29 $ 10.86 $ 11.13 $ 7.62 --------- --------- --------- --------- --------- Net investment income (loss)........................ (.15)(vi) (.14)(vi) (.11) (.09) (.13) Net realized and unrealized gain (loss) on investments................................... 2.69 (1.03) 1.28 .42 3.64 --------- --------- --------- --------- --------- Total from investment operations.................... 2.54 (1.17) 1.17 .33 3.51 Distributions from net realized gains............... (1.02) (.51) (1.74) (.60) -- --------- --------- --------- --------- --------- Net asset value, end of year........................ $ 10.13 $ 8.61 $ 10.29 $ 10.86 $ 11.13 ========= ========= ========= ========= ========= Total Return (ii)................................... 32.1% (11.6%) 12.9% 3.2% 46.2% ========= ========= ========= ========= ========= Ratios and Supplemental Data: Net assets, end of year (000's omitted)................................ $419,842 $460,788 $580,651 $553,872 $463,718 ========= ========= ========= ========= ========= Ratio of expenses to average net assets..................................... 2.14% 2.12% 2.14% 2.13% 2.11% ========= ========= ========= ========= ========= Ratio of net investment income (loss) to average net assets................... (1.58%) (1.51%) (1.67%) (1.59%) (1.75%) ========= ========= ========= ========= ========= Portfolio Turnover Rate........................... 110.92% 157.26% 120.27% 153.35% 97.37% ========= ========= ========= ========= =========
- ---------------- See footnotes on page 13. 12 THE ALGER FUND ALGER SMALL CAPITALIZATION PORTFOLIO Financial Highlights For a share outstanding throughout the period
CLASS A (IV) CLASS C (III) ---------------------------------------------------------------------------------- YEAR YEAR TEN MONTHS YEAR YEAR THREE MONTHS ENDED ENDED ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 1999 1998 1997(V) 1999 1998 1997(V) ----------- ----------- ----------- ----------- ----------- ------------ Net asset value, beginning of period... $ 8.74 $ 10.35 $ 9.21 $ 8.59 $ 10.29 $ 10.38 -------- -------- -------- -------- -------- -------- Net investment income (loss)........... (.08)(vi) (.06)(vi) (.04) (.16)(vi) (.10)(vi) (.03) Net realized and unrealized gain (loss) on investments...................... 2.71 (1.04) 1.18 2.72 (1.09) (.06) -------- -------- -------- -------- -------- -------- Total from investment operations....... 2.63 (1.10) 1.14 2.56 (1.19) (.09) Distributions from net realized gains.. (1.02) (.51) -- (1.02) (.51) -- -------- -------- -------- -------- -------- -------- Net asset value, end of period......... $ 10.35 $ 8.74 $ 10.35 $ 10.13 $ 8.59 $ 10.29 ======== ======== ======== ======== ======== ======== Total Return (ii)...................... 32.7% (10.9%) 12.4% 32.4% (11.8%) (.9%) ======== ======== ======== ======== ======== ======== Ratios and Supplemental Data: Net assets, end of period (000's omitted)................... $ 69,986 $ 59,516 $ 25,996 $ 7,659 $ 4,838 $ 338 ======== ======== ======== ======== ======== ======== Ratio of expenses to average net assets........................ 1.38% 1.37% 1.38% 2.13% 2.11% 2.09% ======== ======== ======== ======== ======== ======== Ratio of net investment income (loss) to average net assets............. (.79%) (.71%) (.93%) (1.55%) (1.36%) (1.71%) ======== ======== ======== ======== ======== ======== Portfolio Turnover Rate.............. 110.92% 157.26% 120.27% 110.92% 157.26% 120.27% ======== ======== ======== ======== ======== ========
(i) Per share data has been adjusted to reflect the effect of a 3 for 1 stock split which occurred September 27, 1995. (ii) Does not reflect the effect of any sales charges. (iii) Initially offered August 1, 1997. (iv) Initially offered January 1, 1997. (v) Ratios have been annualized; total return has not been annualized. (vi) Amount was computed based on average shares outstanding during the period. See Notes to Financial Statements. 13 ALGER BALANCED PORTFOLIO PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 1999 (UNAUDITED) HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES FROM 6/1/92 TO 10/31/99 LEHMAN GOV'T/CORP. ALGER BALANCED B S&P 500 INDEX BOND INDEX 6/1/92 ........... 10000 10000 10000 10/31/92 ......... 9950 10198 10479 10/31/93 ......... 11180 11723 11911 10/31/94 ......... 10736 12177 11358 10/31/95 ......... 13700 15396 13193 10/31/96 ......... 14558 19104 13905 10/31/97 ......... 17360 25241 15130 10/31/98 ......... 20287 30794 16684 10/31/99 ......... 26675 38697 16575 ENDING VALUE S&P 500 INDEX $38,697 ENDING VALUE ALGER BALANCED B: $26,675 ENDING VALUE LEHEMAN BROTHERS GOV'T/CORP. BOND INDEX: $16,575 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in Alger Balanced Class B shares, the S&P 500 Index, and the Lehman Brothers Government/Corporate Bond Index on June 1, 1992, the inception date of the Alger Balanced Portfolio, through October 31, 1999. Figures for the Alger Balanced Portfolio, the S&P 500 Index, an unmanaged index of common stocks, and the Lehman Brothers Government/Corporate Bond Index, an unmanaged index of government and corporate bonds, include reinvestment of dividends and/or interest. Performance for the Alger Balanced Class A and Class C shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. PERFORMANCE COMPARISON AS OF 10/31/99+ AVERAGE ANNUAL TOTAL RETURNS 1 5 SINCE YEAR YEARS INCEPTION ----------------------------------------------- CLASS A (INCEPTION 1/1/97) 26.25% * 22.12% S&P 500 Index 25.67% * 25.92% Lehman Gov't/Corp. Bond Index (0.65%) * 6.13% - -------------------------------------------------------------------------------- CLASS B (INCEPTION 6/1/92) 26.49% 19.77% 14.14% S&P 500 Index 25.67% 26.02% 20.01% Lehman Gov't/Corp. Bond Index (0.65%) 7.85% 7.05% - -------------------------------------------------------------------------------- CLASS C (INCEPTION 8/1/97) 30.55% * 19.78% S&P 500 Index 25.67% * 18.88% Lehman Gov't/Corp. Bond Index (0.65%) * 5.08% - -------------------------------------------------------------------------------- THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. 14 THE ALGER FUND ALGER BALANCED PORTFOLIO SCHEDULE OF INVESTMENTS October 31, 1999 COMMON STOCKS--58.8% SHARES VALUE --------- -------- ADVERTISING--.6% Omnicom Group Inc................ 5,500 $ 484,000 ---------- AEROSPACE--2.6% AlliedSignal Inc................. 15,800 899,613 United Technologies Corp......... 19,000 1,149,500 ---------- 2,049,113 ---------- AUTOMOTIVE--.6% Harley Davidson, Inc............. 7,600 450,774 ---------- BIO-TECHNOLOGY--1.4% Amgen Inc.*...................... 11,000 877,250 Biogen Inc.*..................... 3,000 222,375 ---------- 1,099,625 ---------- BROADCASTING--.3% Clear Channel Communications Inc.* . ........ 2,900 233,088 ---------- BUILDING & CONSTRUCTION--.3% Masco Corp....................... 7,500 228,750 ---------- BUSINESS SERVICES--.6% IMS Health Inc................... 16,500 478,500 ---------- COMMUNICATION EQUIPMENT--4.9% Cisco Systems, Inc.*............. 22,650 1,676,100 Corning Inc...................... 14,400 1,132,200 Motorola, Inc.................... 11,500 1,120,532 ---------- 3,928,832 ---------- COMMUNICATIONS--7.3% America Online Inc.*............. 15,100 1,958,281 At Home Corp. Series A*.......... 7,958 297,430 COX Communications Inc., Cl. A.*. 8,300 377,131 MCI Worldcom Inc.*............... 9,200 789,475 MediaOne Group Inc.*............. 14,200 1,009,088 Qualcomm Inc.*................... 1,200 267,300 SBC Communications Inc........... 6,632 337,818 Sprint Corp...................... 10,850 806,290 ---------- 5,842,813 ---------- COMPUTER RELATED & BUSINESS EQUIPMENT--.8% Sun Microsystems Inc.*........... 6,000 634,874 ---------- COMPUTER SERVICES--3.0% eBay Inc.*....................... 9,300 1,256,663 Yahoo Inc.*...................... 6,176 1,105,890 ---------- 2,362,553 ---------- COMPUTER SOFTWARE--3.1% Intuit Inc.*..................... 7,800 227,175 Microsoft Corporation*........... 24,000 2,221,500 ---------- 2,448,675 ---------- CONGLOMERATE--1.5% Tyco International Ltd........... 29,692 1,185,823 ---------- ENERGY & ENERGY SERVICES--1.5% Halliburton Co................... 33,700 1,270,068 ---------- FINANCIAL SERVICES--8.4% American Express Co.............. 2,500 385,000 Bank of America Corp............. 20,200 1,300,375 Citigroup Inc.................... 35,950 1,945,794 Firstar Corp..................... 10,455 307,116 Household International Inc...... 10,200 455,175 Kansas City Southern Industries Inc. ............... 8,800 417,450 Merrill Lynch & Co., Inc......... 3,400 266,900 Morgan Stanley Dean Witter & Co.. 14,700 1,621,593 ---------- 6,699,403 ---------- FOOD CHAINS--.4% Kroger Co.*...................... 16,600 345,487 ---------- INSURANCE--1.7% American International Group, Inc. ................... 12,856 1,323,365 ---------- LEISURE & ENTERTAINMENT--.6% Carnival Corp.................... 10,500 467,250 ---------- MANUFACTURING--.3% Solectron Corp.*................. 3,300 248,325 ---------- OIL & GAS--.7% Baker Hughes Inc................. 20,000 558,750 ---------- PHARMACEUTICALS--4.2% Bristol Myers Squibb Co.......... 3,400 261,163 Pfizer Inc....................... 38,300 1,512,850 Warner-Lambert Co................ 20,300 1,620,194 ---------- 3,394,207 ---------- 15 THE ALGER FUND ALGER BALANCED PORTFOLIO SCHEDULE OF INVESTMENTS (Continued) October 31, 1999 COMMON STOCKS--(CONT.) SHARES VALUE --------- -------- RETAILING--5.9% Abercrombie & Fitch Co., Cl. A.*. 5,800 $ 158,050 Amazon.com Inc.*................. 8,400 593,250 Best Buy Company Inc.*........... 10,200 566,738 Costco Wholesale Corp.*.......... 9,400 754,938 Home Depot, Inc.................. 24,000 1,812,000 Wal-Mart Stores Inc.............. 13,750 779,453 ---------- 4,664,429 ---------- SEMICONDUCTOR CAPITAL EQUIPMENT--2.5% Applied Materials Inc.*.......... 16,500 1,481,906 Teradyne, Inc.*.................. 12,400 477,400 ---------- 1,959,306 ---------- SEMICONDUCTORS--5.6% Altera Corporation*.............. 12,100 588,363 Intel Corp....................... 9,200 712,425 Linear Technology Corporation.... 11,500 804,281 Micron Technology Inc.*.......... 16,700 1,190,919 Texas Instruments, Incorporated.. 2,700 242,325 Xilinx, Inc.*.................... 11,600 912,050 ---------- 4,450,363 ---------- Total Common Stocks (Cost $40,855,075)............. 46,808,373 ---------- PRINCIPAL Corporate Bonds--6.1% AMOUNT --------- AUTOMOTIVE--.4% Ford Capital B.V., 9.50%, 6/01/10.................$300,000 345,513 ---------- COMMUNICATIONS--1.0% MCI Worldcom Inc., 8.25%, 1/20/23................. 300,000 312,081 Tele-Communications Inc., 7.25%, 8/01/05................. 500,000 501,670 ---------- 813,751 ---------- CONSUMER PRODUCTS & SERVICES--.4% Eastman Kodak Co., 9.20%, 6/01/21................. 300,000 326,394 ---------- PRINCIPAL AMOUNT VALUE --------- ---------- ELECTRIC & GAS COMPANIES--1.2% Cincinnati Gas & Electric Co., 7.20%, 10/01/23................$100,000 $ 91,446 Pacific Gas & Electric Co., 7.25%, 3/01/26................. 182,000 172,288 Potomac Electric Power Co., 7.00%, 1/15/24................. 200,000 183,250 Washington Gas Light Co., 6.51%, 8/18/08................. 500,000 480,640 ---------- 927,624 ---------- FINANCIAL SERVICES--1.6% BankAmerica Corp., 6.625%, 10/15/07............... 200,000 192,712 Bankers Trust Corp., 7.00%, 3/13/18................. 300,000 274,602 Chase Manhattan Corp., 8.50%, 2/15/02................. 200,000 207,730 Citicorp, 7.125%, 6/01/03................ 200,000 201,010 Merrill Lynch & Co., Inc., 6.75%, 4/30/01................. 150,000 150,852 Morgan Stanley Dean Witter & Co., 7.50%, 2/01/24................. 300,000 286,176 ---------- 1,313,082 ---------- INSURANCE--1.2% Beneficial Corp., 6.575%, 12/16/02............... 500,000 494,920 Loews Corp., 7.625%, 6/01/23................ 500,000 466,345 ---------- 961,265 ---------- POLLUTION CONTROL--.3% Waste Management Inc., 8.25%, 11/15/99................ 200,000 200,186 ---------- Total Corporate Bonds (Cost $5,190,704).............. 4,887,815 ---------- 16 THE ALGER FUND ALGER BALANCED PORTFOLIO SCHEDULE OF INVESTMENTS (Continued) October 31, 1999 PRINCIPAL AMOUNT VALUE --------- --------- U.S. Government & Agency Obligations--4.8% Federal Home Loan Bank Corp., 5.87%, 4/22/03.................$300,000 $ 295,218 5.935%, 4/22/05................ 400,000 387,624 6.505%, 6/17/08................ 300,000 284,814 Federal Home Loan Mortgage Corp., 7.08%, 3/17/14................. 400,000 374,252 Federal National Mortgage Assoc., 8.50%, 2/01/05................. 100,000 100,516 6.96%, 4/02/07................. 500,000 503,750 7.49%, 5/22/07................. 250,000 246,835 6.75%, 2/04/28................. 400,000 352,252 7.00%, 3/04/13................. 600,000 564,000 6.42%, 7/14/08................. 300,000 283,593 U.S. Treasury Notes, 7.50%, 5/15/02................. 100,000 103,703 6.375%, 1/15/00................ 100,000 100,188 6.25%, 2/15/03................. 250,000 252,070 ---------- Total U.S. Government & Agency Obligations (Cost $4,080,648).............. 3,848,815 ---------- Short-Term Corporate Notes--27.7% Atlantis One Funding Corp., 5.32%, 11/15/99................$1,700,000 $ 1,696,476 AT&T Capital Corp., 5.18%, 11/09/99................ 300,000 299,654 Coca-Cola Co. (The), 5.27%, 11/24/99................ 3,000,000 2,989,893 Crown Point Capital Co. LLC, 5.38%, 11/09/99 (a)............ 750,000 749,102 Ford Motor Credit Company, 5.23%, 11/16/99................ 3,100,000 3,093,240 France Telecom, 5.32%, 11/23/99 (a)............ 400,000 398,699 General Motors Acceptance Corporation, 5.25%, 11/03/99................ 1,200,000 1,199,649 Hasbro, Inc., 5.27%, 11/15/99................ 1,100,000 1,097,744 Kansas City Power & Light Co., 5.32%, 11/04/99................ 3,100,000 3,098,623 Merrill Lynch & Co., Inc., 5.22%, 11/09/99................ 2,500,000 2,497,096 Nestle Capital Corporation, 5.22%, 11/16/99................ 2,500,000 2,494,555 Toyota Credit de Puerto Rico, 5.28%, 11/15/99................ 2,500,000 2,494,859 ---------- Total Short-Term Corporate Notes (Cost $22,109,590)............. 22,109,590 ---------- Total Investments (Cost $72,236,017)(b).......... 97.4% 77,654,593 Other Assets In Excess of Liabilities................. 2.6 2,067,129 ------ ----------- Net Assets....................... 100.0% $79,721,722 ====== =========== * Non-income producing security. (a)Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified institutional buyers. (b)At October 31, 1999, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $72,236,017, amounted to $5,418,576 which consisted of aggregate gross unrealized appreciation of $7,219,232 and aggregate gross unrealized depreciation of $1,800,656. See Notes to Financial Statements. 17 THE ALGER FUND ALGER BALANCED PORTFOLIO Financial Highlights For a share outstanding throughout the year
CLASS B --------------------------------------------------------- YEAR ENDED OCTOBER 31, -------------------------------------------------------- 1999 1998 1997 1996 1995 ---- ---- ---- ----- ----- Net asset value, beginning of year ................. $ 16.64 $ 16.48 $ 14.21 $ 13.59 $ 10.65 ------- ------- ------- ------- ------- Net investment income (loss)........................ .07(i) .03(i) -- .12 (.02)(i) Net realized and unrealized gain (loss) on investments................................... 4.93 2.34 2.67 .72 2.96 ------- ------- ------- ------- ------- Total from investment operations.................... 5.00 2.37 2.67 .84 2.94 ------- ------- ------- ------- ------- Dividends from net investment income................ (.03) (.01) (.06) (.01) -- Distributions from net realized gains............... (1.02) (2.20) (.34) (.21) -- ------- ------- ------- ------- ------- Total distributions................................. (1.05) (2.21) (.40) (.22) -- ------- ------- ------- ------- ------- Net asset value, end of year........................ $ 20.59 $ 16.64 $ 16.48 $ 14.21 $ 13.59 ======= ======= ======= ======= ======= Total Return (ii)................................... 31.5% 16.9% 19.3% 6.3% 27.6% ======= ======= ======= ======= ======= Ratios and Supplemental Data: Net assets, end of year (000's omitted)................................ $ 52,607 $ 19,282 $ 12,653 $ 13,492 $ 6,214 ======= ======= ======= ======= ======= Ratio of expenses to average net assets..................................... 2.18% 2.58% 2.89% 2.70% 3.34% ======= ======= ======= ======= ======= Decrease reflected in above expense ratios due to expense reimbursements (iv).................... -- -- -- -- .24% ======= ======= ======= ======= ======= Ratio of net investment income (loss) to average net assets................... .36% .19% .04% .47% (.13%) ======= ======= ======= ======= ======= Portfolio Turnover Rate........................... 126.01% 93.23% 109.26% 85.51% 84.06% ======= ======= ======= ======= =======
- --------------------- See footnotes on page 19. 18 THE ALGER FUND ALGER BALANCED PORTFOLIO Financial Highlights For a share outstanding throughout the period
CLASS A (VI) CLASS C (V) ------------------------------------------------------------------------------ YEAR YEAR TEN MONTHS YEAR YEAR THREE MONTHS ENDED ENDED ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 1999 1998 1997(III) 1999 1998 1997(III) ----------- ----------- ---------- ---------- --------- --------- Net asset value, beginning of period... $ 16.83 $ 16.58 $ 13.99 $ 16.66 $ 16.49 $ 16.88 ------- ------- ------- ------- ------- ------- Net investment income (loss)........... .25(i) .16(i) .05 .07(i) .04(i) (.01) Net realized and unrealized gain (loss) on investments...................... 4.97 2.35 2.54 4.95 2.33 (.38) ------- ------- ------- ------- ------- ------- Total from investment operations....... 5.22 2.51 2.59 5.02 2.37 (.39) ------- ------- ------- ------- ------- ------- Dividends from net investment income... (.08) (.06) -- (0.01) -- -- Distributions from net realized gains.. (1.02) (2.20) -- (1.02) (2.20) -- ------- ------- ------- ------- ------- ------- Total distributions.................... (1.10) (2.26) -- (1.03) (2.20) -- ------- ------- ------- ------- ------- ------- Net asset value, end of period......... $ 20.95 $ 16.83 $ 16.58 $ 20.65 $ 16.66 $ 16.49 ======= ======= ======= ======= ======= ======= Total Return (ii)...................... 32.5% 17.7% 18.5% 31.6% 16.8% (2.31%) ======= ======= ======= ======= ======= ======= Ratios and Supplemental Data: Net assets, end of period (000's omitted)................... $ 12,488 $ 1,354 $ 459 $14,626 $ 334 $ 48 ======= ======= ======= ======= ======= ======= Ratio of expenses to average net assets........................ 1.40% 1.79% 2.10% 2.16% 2.53% 2.77% ======= ======= ======= ======= ======= ======= Ratio of net investment income (loss) to average net assets............. 1.15% .98% .72% .38% .23% (.84%) ======= ======= ======= ======= ======= ======= Portfolio Turnover Rate.............. 126.01% 93.23% 109.26% 126.01% 93.23% 109.26% ======= ======= ======= ======= ======= =======
(i) Amount was computed based on average shares outstanding during the period. (ii) Does not reflect the effect of any sales charges. (iii)Ratios have been annualized; total return has not been annualized. (iv) Represents expense reimbursements made pursuant to applicable state expense limits. (v) Initially offered August 1, 1997. (vi) Initially offered January 1, 1997. See Notes to Financial Statements. 19 ALGER MIDCAP GROWTH PORTFOLIO PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 1999 (UNAUDITED) HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES FROM 5/24/93 TO 10/31/99 [Line chart omitted] ALGER MIDCAP GROWTH B S&P MIDCAP 400 INDEX 5/24/93 10000 10000 10/31/93 12480 10714 10/31/94 13062 10969 10/31/95 19373 13295 10/31/96 20618 15600 10/31/97 25024 20694 10/31/98 26586 22084 10/31/99 35182 26736 ENDING VALUE ALGER MIDCAP GROWTH B: $35,182 ENDING VALUE S&P MIDCAP 400 INDEX: $26,736 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in Alger MidCap Growth Class B shares and the S&P MidCap 400 Index on May 24, 1993, the inception date of the Alger MidCap Growth Portfolio, through October 31, 1999. Figures for both the Alger MidCap Growth Class B shares and the S&P MidCap 400 Index, an unmanaged index of common stocks, include reinvestment of dividends. Performance for the Alger MidCap Growth Class A and Class C shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. PERFORMANCE COMPARISON AS OF 10/31/99+ AVERAGE ANNUAL TOTAL RETURNS 1 5 SINCE YEAR YEARS INCEPTION -------------------------------------------------- CLASS A (INCEPTION 1/1/97) 26.94% * 18.43% S&P MidCap 400 Index 21.07% * 18.59% - -------------------------------------------------------------------------------- CLASS B (INCEPTION 5/24/93) 27.33% 21.73% 21.57% S&P MidCap 400 Index 21.07% 19.50% 16.50% - -------------------------------------------------------------------------------- CLASS C (INCEPTION 8/1/97) 31.38% * 15.91% S&P MidCap 400 Index 21.07% * 12.58% - -------------------------------------------------------------------------------- THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. 20 THE ALGER FUND ALGER MIDCAP GROWTH PORTFOLIO SCHEDULE OF INVESTMENTS October 31, 1999 COMMON STOCKS--88.9% SHARES VALUE ------- ------- ADVERTISING--1.6% Lamar Advertising Co., Cl. A.*... 35,100 $ 1,895,400 Young & Rubicam Inc.............. 68,500 3,133,875 ----------- 5,029,275 ----------- AUTOMOTIVE--2.7% Harley Davidson, Inc.............142,500 8,452,030 ----------- BIO-TECHNOLOGY--5.3% Biogen Inc.*.....................106,400 7,886,900 Medimmune Inc.*.................. 60,000 6,720,000 Sepracor Inc.*................... 19,000 1,580,562 ----------- 16,187,462 ----------- BUSINESS SERVICES--6.0% Cintas Corp...................... 74,800 4,506,700 Fiserv Inc.*.....................207,700 6,646,400 IMS Health Inc...................258,148 7,486,291 ----------- 18,639,391 ----------- COMMUNICATION EQUIPMENT--3.0% Corning Inc...................... 50,500 3,970,562 Flextronics International Ltd*... 67,300 4,778,300 Sycamore Networks Inc.*.......... 3,000 645,000 ----------- 9,393,862 ----------- COMMUNICATIONS--1.0% At Home Corp. Series A.*......... 83,260 3,111,842 ----------- COMPUTER RELATED & BUSINESS EQUIPMENT--1.7% Sanmina Corporation*............. 59,400 5,349,712 ----------- COMPUTER SERVICES--7.2% Amdocs Limited*.................. 64,000 1,780,000 CNET Inc.*.......................221,200 10,437,875 eBay Inc.*....................... 44,500 6,013,063 Exodus Communications, Inc.*..... 24,600 2,115,600 Yahoo Inc.*...................... 10,132 1,814,262 ----------- 22,160,800 ----------- COMPUTER SOFTWARE--3.7% CSG Systems International Inc.*.. 28,000 960,750 Intuit Inc.*.....................308,700 8,990,888 Legato Systems Inc.*............. 27,400 1,472,750 ----------- 11,424,388 ----------- ENERGY & ENERGY SERVICES--5.2% Calpine Corp.*................... 78,500 4,523,563 Devon Energy Corporation......... 70,300 2,732,913 EOG Resources Inc................ 74,500 1,550,531 Nabors Industries Inc.*..........258,100 5,855,643 Union Pacific Resources Group Inc. .......... 88,000 1,276,000 ----------- 15,938,650 ----------- FINANCIAL SERVICES--4.9% Charter One Financial Inc........ 86,310 2,119,989 Kansas City Southern Industries Inc. . .............162,600 7,713,338 Paine Webber Group Inc...........130,000 5,297,500 ----------- 15,130,827 ----------- FOODS & BEVERAGES--1.7% Dean Foods Co.................... 32,000 1,480,000 U.S. Foodservice*................194,000 3,722,375 ----------- 5,202,375 ----------- INDUSTRIAL EQUIPMENT--2.2% SPX Corp.*....................... 31,500 2,669,625 Waters Corp.*.................... 76,600 4,069,375 ----------- 6,739,000 ----------- LEISURE & ENTERTAINMENT--2.0% Mandalay Resort Group*...........325,517 6,062,754 ----------- MEDICAL SERVICES--1.7% Express Scripts Inc., Cl. A.*.... 76,200 3,743,325 MedQuist Inc.*................... 43,000 1,376,000 ----------- 5,119,325 ----------- OIL & GAS--2.0% B.J. Services Company*...........178,800 6,135,075 ----------- PHARMACEUTICALS--2.9% Forest Laboratories, Inc.*.......193,000 8,853,875 ----------- RESTAURANTS & LODGING--1.8% Outback Steakhouse, Inc.*........240,250 5,525,750 ----------- RETAILING--11.9% Abercrombie & Fitch Co., Cl. A.*.145,000 3,951,250 Amazon.com Inc.*................. 48,800 3,446,500 Bed Bath & Beyond Inc.*..........194,000 6,462,625 Best Buy Company Inc.*...........110,200 6,122,988 BJ's Wholesale Club Inc.*........ 53,000 1,633,063 Family Dollar Stores Inc......... 50,000 1,031,250 Gucci Group N.V..................116,000 9,367,000 Williams Sonoma Inc.*............ 85,900 4,617,125 ----------- 36,631,801 ----------- 21 THE ALGER FUND ALGER MIDCAP GROWTH PORTFOLIO SCHEDULE OF INVESTMENTS (Continued) October 31, 1999 COMMON STOCKS--(cont.) SHARES VALUE ---------- ------------ SEMICONDUCTOR CAPITAL EQUIPMENT--4.5% ASM Lithography Holding NV*...... 57,900 $ 4,204,988 Atmi Inc.*....................... 41,400 1,115,213 Teradyne, Inc.*..................221,900 8,543,150 ----------- 13,863,351 ----------- SEMICONDUCTORS--15.9% Altera Corporation*..............196,400 9,549,950 Conexant Systems Inc.*........... 34,000 3,174,750 Linear Technology Corporation....150,100 10,497,619 Maxim Integrated Products, Inc.*. 72,000 5,683,500 Microchip Technology Incorporated* .................123,500 8,228,188 Vitesse Semiconductor Corp.*..... 34,200 1,568,925 Xilinx, Inc.*....................130,400 10,252,700 ----------- 48,955,632 ----------- Total Common Stocks (Cost $248,779,558)............ 273,907,177 ----------- Short-Term Corporate PRINCIPAL Notes--12.7% AMOUNT VALUE ---------- ----------- Atlantis One Funding Corp., 5.33%, 11/08/99 ....................... $ 3,200,000 $ 3,196,684 Consolidated Natural Gas Company, 5.35%, 11/03/99 ....................... 7,000,000 6,997,919 Crown Point Capital Corp., 5.38%, 11/09/99 (a) ................... 850,000 848,984 Enterprise Funding Corp., 5.33%, 11/19/99 (a) ................... 5,200,000 5,186,141 Ford Motor Credit Company, 5.22%, 11/16/99 ....................... 8,500,000 8,481,513 General Motors Acceptance Corporation, 5.25%, 11/03/99 ....................... 3,950,000 3,948,848 Merrill Lynch & Co., Inc., 5.30%, 11/19/99 ....................... 10,700,000 10,671,645 ------------- Total Short-Term Corporate Notes (Cost $39,331,734) .................... 39,331,734 ------------- Total Investments (Cost $288,111,292)(b) ................ 101.6% 313,238,911 Liabilities In Excess of Other Assets ....................... (1.6) (5,026,506) ----- ------------- Net Assets .............................. 100.0% $ 308,212,405 ===== ============= * Non-income producing security (a)Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified institutional buyers. (b)At October 31, 1999, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $288,111,292, amounted to $25,127,619 which consisted of aggregate gross unrealized appreciation of $33,200,307 and aggregate gross unrealized depreciation of $8,072,688. See Notes to Financial Statements. 22 THE ALGER FUND ALGER MIDCAP GROWTH PORTFOLIO Financial Highlights For a share outstanding throughout the year
CLASS B ---------------------------------------------------------------------- YEAR ENDED OCTOBER 31, --------------------------------------------------------------------- 1999 1998 1997 1996 1995 ---- ---- ----- ---- ---- Net asset value, beginning of year..... $ 20.89 $ 22.33 $ 18.87 $ 18.94 $ 12.77 -------- -------- -------- -------- -------- Net investment income (loss)........... (.32)(ii) (.29)(ii) (.29) (.25)(ii) (.08) Net realized and unrealized gain (loss) on investments...................... 6.35 1.31 4.23 1.35 6.25 -------- -------- -------- -------- -------- Total from investment operations....... 6.03 1.02 3.94 1.10 6.17 Distributions from net realized gains.. (2.93) (2.46) (.48) (1.17) -- -------- -------- -------- -------- -------- Net asset value, end of year........... $ 23.99 $ 20.89 $ 22.33 $ 18.87 $ 18.94 ======== ======== ======== ======== ======== Total Return (iii)..................... 32.3% 6.2% 21.4% 6.4% 48.3% ======== ======== ======== ======== ======== Ratios and Supplemental Data: Net assets, end of year (000's omitted)................... $248,139 $191,934 $166,475 $125,686 $ 54,016 ======== ======== ======== ======== ======== Ratio of expenses to average net assets........................ 2.07% 2.10% 2.19% 2.27% 2.39% ======== ======== ======== ======== ======== Ratio of net investment income (loss) to average net assets...... (1.39%) (1.38%) (1.58%) (1.33%) (1.71%) ======== ======== ======== ======== ======== Portfolio Turnover Rate.............. 203.86% 180.98% 160.09% 113.95% 121.60% ======== ======== ======== ======== ========
- ------------------- See footnotes on page 24. 23 THE ALGER FUND ALGER MIDCAP GROWTH PORTFOLIO Financial Highlights For a share outstanding throughout the period
CLASS A (V) CLASS C (IV) ---------------------------------------- ------------------------------------- YEAR YEAR TEN MONTHS YEAR YEAR THREE MONTHS ENDED ENDED ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 1999 1998 1997 (I) 1999 1998 1997 (I) ------- ------- ------- ------- ------- ------- Net asset value, beginning of period... $ 21.21 $ 22.46 $ 18.92 $ 20.86 $ 22.33 $ 22.49 ------- ------- ------- ------- ------- ------- Net investment income (loss)........... (.14)(ii) (.10)(ii) (.10) (.32)(ii) (.28)(ii) (.03) Net realized and unrealized gain (loss) on investments...................... 6.45 1.31 3.64 6.35 1.27 (.13) ------- ------- ------- ------- ------- ------- Total from investment operations....... 6.31 1.21 3.54 6.03 .99 (.16) Distributions from net realized gains.. (2.93) (2.46) -- (2.93) (2.46) -- ------- ------- ------- ------- ------- ------- Net asset value, end of period......... $ 24.59 $ 21.21 $ 22.46 $ 23.96 $ 20.86 $ 22.33 ======= ======= ======= ======= ======= ======= Total Return (iii)..................... 33.3% 7.2% 18.7% 32.4% 6.1% (.7%) ======= ======= ======= ======= ======= ======= Ratios and Supplemental Data: Net assets, end of period (000's omitted)................... $49,246 $32,447 $5,436 $10,827 $1,759 $ 84 ======= ======= ======= ======= ======= ======= Ratio of expenses to average net assets........................ 1.31% 1.34% 1.40% 2.08% 2.08% 1.97% ======= ======= ======= ======= ======= ======= Ratio of net investment income (loss) to average net assets............. (.58%) (.53%) (.83%) (1.40%) (1.26%) (1.55%) ======= ======= ======= ======= ======= ======= Portfolio Turnover Rate.............. 203.86% 180.98% 160.09% 203.86% 180.98% 160.09% ======= ======= ======= ======= ======= =======
- ------------------ (i) Ratios have been annualized; total return has not been annualized. (ii) Amount was computed based on average shares outstanding during the period. (iii)Does not reflect the effect of any sales charges. (iv) Initially offered August 1, 1997. (v) Initially offered January 1, 1997. 24 ALGER CAPITAL APPRECIATION PORTFOLIO PORTFOLIO HIGHLIGHTS THROUGH OCTOBER 31, 1999 (UNAUDITED) HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES FROM 11/1/93 TO 10/31/99 ALGER CAPITAL APPRECIATION B S&P 500 INDEX 11/1/93 10000 10000 10/31/94 11110 10387 10/31/95 18620 13133 10/31/96 22246 16297 10/31/97 26918 21531 10/31/98 29572 26267 10/31/99 48098 33009 ENDING VALUE ALGER CAPITAL APPRECIATION B: $48,098 ENDING VALUE S&P 500 INDEX; $33,009 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in Alger Capital Appreciation Class B shares and the S&P 500 Index on November 1, 1993, the inception date of the Alger Capital Appreciation Portfolio, through October 31, 1999. Figures for the Alger Capital Appreciation Class B shares and the S&P 500 Index, an unmanaged index of common stocks, include reinvestment of dividends. Performance for Alger Capital Appreciation Class A and Class C shares will vary from the results shown above due to differences in expenses and sales charges those classes bear. PERFORMANCE COMPARISON AS OF 10/31/99+ AVERAGE ANNUAL TOTAL RETURNS 1 5 SINCE YEAR YEARS INCEPTION ---------------------------------------------------- CLASS A (INCEPTION 1/1/97) 56.13% * 29.82% S&P 500 Index 25.67% * 25.92% - -------------------------------------------------------------------------------- CLASS B (INCEPTION 11/1/93) 57.99% 33.99% 29.92% S&P 500 Index 25.67% 26.02% 22.02% - -------------------------------------------------------------------------------- CLASS C (INCEPTION 8/1/97) 61.87% * 25.95% S&P 500 Index 25.67% * 18.88% THE PORTFOLIO'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE PORTFOLIO'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. 25 THE ALGER FUND ALGER CAPITAL APPRECIATION PORTFOLIO SCHEDULE OF INVESTMENTS October 31, 1999 COMMON STOCKS--92.1% SHARES VALUE -------- -------- ADVERTISING--1.5% Omnicom Group Inc............. 132,000 $ 11,616,000 ------------- AEROSPACE--1.6% AlliedSignal Inc.............. 225,000 12,810,937 ------------- BIO-TECHNOLOGY--1.9% Amgen Inc.*................... 182,800 14,578,300 ------------- BROADCASTING--4.3% Cablevision Systems Corp., Cl. A. 202,000 13,647,625 Clear Channel Communications Inc.*........ 251,000 20,174,125 ------------- 33,821,750 ------------- BUSINESS SERVICES--1.0% IMS Health Inc................ 283,900 8,233,100 ------------- COMMUNICATION EQUIPMENT--5.6% Cisco Systems, Inc.*.......... 329,500 24,383,000 Motorola, Inc................. 203,000 19,779,813 ------------- 44,162,813 ------------- COMMUNICATIONS--14.1% America Online Inc.*.......... 308,000 39,943,750 At Home Corp. Series A.*...... 166,300 6,215,463 Comcast Corp., Cl. A. Special. 412,000 17,355,500 COX Communications Inc., Cl. A.* 339,000 15,403,312 McLeodUSA Inc., Cl. A.*....... 80,000 3,570,000 Qualcomm Inc.*................ 70,500 15,703,875 Sprint Corp................... 170,000 12,633,125 ------------- 110,825,025 ------------- COMPUTER RELATED & BUSINESS EQUIPMENT--4.5% Sun Microsystems Inc.*........ 335,000 35,447,187 ------------- COMPUTER SERVICES--12.8% CNET Inc.*.................... 264,200 12,466,938 eBay Inc.*.................... 262,000 35,402,750 Exodus Communications, Inc.*.. 245,000 21,070,000 Yahoo Inc.*................... 177,247 31,738,290 ------------- 100,677,978 ------------- COMPUTER SOFTWARE--5.5% Intuit Inc.*.................. 445,500 12,975,188 Microsoft Corporation*........ 330,400 30,582,650 ------------- 43,557,838 ------------- ENERGY & ENERGY SERVICES--3.0% Halliburton Co................ 632,000 $ 23,818,500 ------------- FINANCIAL SERVICES--5.1% American Express Co........... 55,000 8,470,000 Citigroup Inc................. 464,750 25,154,594 Morgan Stanley Dean Witter & Co. 56,500 6,232,656 ------------- 39,857,250 ------------- INSURANCE--.8% American International Group, Inc. 61,250 6,304,921 ------------- OIL & GAS--1.0% Baker Hughes Inc.............. 177,000 4,944,938 B.J. Services Company*........ 85,000 2,916,563 ------------- 7,861,501 ------------- PHARMACEUTICALS--2.9% Bristol Myers Squibb Co....... 173,729 13,344,559 Pfizer Inc.................... 247,200 9,764,400 ------------- 23,108,959 ------------- RETAILING--5.6% Amazon.com Inc.*.............. 122,800 8,672,750 Costco Wholesale Corp.*....... 86,600 6,955,063 Home Depot, Inc............... 225,000 16,987,500 Wal-Mart Stores Inc........... 201,200 11,405,525 ------------- 44,020,838 ------------- SEMICONDUCTOR CAPITAL EQUIPMENT--4.6% Applied Materials Inc.*....... 188,000 16,884,750 ASM Lithography Holding NV*... 117,000 8,497,125 Teradyne, Inc.*............... 281,000 10,818,500 ------------- 36,200,375 ------------- SEMICONDUCTORS--16.3% Altera Corporation*........... 204,000 9,919,500 Broadcom Corp., Cl. A.*....... 143,800 18,379,437 Conexant Systems Inc.*........ 246,000 22,970,250 Linear Technology Corporation. 127,000 8,882,063 Micron Technology Inc.*....... 200,000 14,262,500 SDL Inc.*..................... 54,000 6,658,875 Texas Instruments, Incorporated ............... 180,000 16,155,000 Vitesse Semiconductor Corp.*.. 194,000 8,899,750 Xilinx, Inc.*................. 278,000 21,857,750 ------------- 127,985,125 ------------- Total Common Stocks (Cost $607,817,466)......... 724,888,397 ------------- 26 THE ALGER FUND ALGER CAPITAL APPRECIATION PORTFOLIO SCHEDULE OF INVESTMENTS (Continued) October 31, 1999 Short-Term Corporate PRINCIPAL Notes--6.1% AMOUNT VALUE --------- ------------ Atlantis One Funding Corp., 5.32%, 11/15/99 ........................... $ 550,000 $ 548,866 Enterprise Funding Corp., 5.33%, 11/19/99(a) ...................... 3,400,000 3,390,939 Holland Limited Securitization Inc., 5.38%, 11/19/99(a) ...................... 35,700,000 35,603,967 Merrill Lynch & Co., Inc., 5.25%, 11/10/99 ......................... 8,100,000 8,089,369 ------------ Total Short-Term Corporate Notes (Cost $47,633,141) ...................... 47,633,141 ------------ Total Investments (Cost $655,450,607)(b) .................. 98.2% 772,521,538 Other Assets In Excess of Liabilities .......................... 1.8 14,167,601 ----- ------------ Net Assets ................................ 100.0% $786,689,139 ===== ============ *Non-income producing security. (a)Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified institutional buyers. (b)At October 31, 1999, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $655,450,607, amounted to $117,070,931 which consisted of aggregate gross unrealized appreciation of $128,553,534 and aggregate gross unrealized depreciation of $11,482,603. See Notes to Financial Statements. 27 THE ALGER FUND ALGER CAPITAL APPRECIATION PORTFOLIO (I)(II) Financial Highlights For a share outstanding throughout the year
CLASS B ---------------------------------------------------------------------------- YEAR ENDED OCTOBER 31, ---------------------------------------------------------------------------- 1999 1998 1997 1996 1995 -------- --------- --------- --------- -------- Net asset value, beginning of year. $ 8.90 $ 8.67 $ 7.21 $ 6.21 $ 3.70 ------------ ---------- ---------- ---------- ---------- Net investment income (loss)....... (.21)(iii) (.13)(iii) (.11) (.11)(iii) (0.16)(iii) Net realized and unrealized gain (loss) on investments.................. 5.43 .90 1.62 1.29 2.67 ------------ ---------- ---------- ---------- ---------- Total from investment operations... 5.22 .77 1.51 1.18 2.51 Distributions from net realized gains (.84) (.54) (.05) (.18) -- ------------ ---------- ---------- ---------- ---------- Net asset value, end of year....... $ 13.28 $ 8.90 $ 8.67 $ 7.21 $ 6.21 ============ ========== ========== ========== ========== Total Return (iv).................. 63.0% 9.9% 21.0% 19.5% 67.6% ============ ========== ========== ========== ========== Ratios and Supplemental Data: Net assets, end of year (000's omitted)............... $594,971 $242,941 $212,895 $150,258 $33,640 ============ ========== ========== ========== ========== Ratio of expenses excluding interest to average net assets 2.12% 2.19% 2.27% 2.44% 3.26% ============ ========== ========== ========== ========== Ratio of expenses including interest to average net assets......... 2.21% 2.26% 2.38% 2.46% 3.54% ============ ========== ========== ========== ========== Ratio of net investment income (loss) to average net assets.. (1.77%) (1.48%) (1.72%) (1.61%) (3.02%) ============ ========== ========== ========== ========== Portfolio Turnover Rate.......... 186.93% 184.07% 157.63% 162.37% 197.65% ======== ======== ======== ========= ======== Amount of debt outstanding at end of year....................... -- -- -- $7,700,000 -- ============ ========== ========== ========== ========== Average amount of debt outstanding during the year...............$ 7,758,649 $2,814,493 $2,940,097 $ 239,966 $ 293,153 ============ ========== ========== ========== ========== Average daily number of portfolio shares outstanding during the year.......................... 42,330,298 29,012,853 23,217,597 14,556,858 1,629,810 ============ ========== ========== ========== ========== Average amount of debt per portfolio share during the year. $ 0.18 $ 0.10 $ 0.13 $ 0.02 $ 0.18 ============ ========== ========== ========== ==========
- ------------------- See footnotes on page 29. See Notes to Financial Statements. 28 THE ALGER FUND ALGER CAPITAL APPRECIATION PORTFOLIO (i)(ii) Financial Highlights For a share outstanding throughout the period
CLASS A (VI) CLASS C (V) ------------------------------------------------------------------------------------ YEAR YEAR TEN MONTHS YEAR YEAR THREE MONTHS ENDED ENDED ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 1999 1998 1997 (VII) 1999 1998 1997 (VII) ----------- ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of period .$ 9.03 $ 8.72 $ 7.20 $ 8.90 $ 8.67 $ 9.22 ---------- ---------- ---------- ----------- ---------- ---------- Net investment income (loss) ......... (.12)(iii) (.05)(iii) (.03) (.22)(iii) (.12)(iii) (.02) Net realized and unrealized gain (loss) on investments ............. 5.50 .90 1.55 5.43 .89 (.53) ---------- ---------- ---------- ----------- ---------- ---------- Total from investment operations ..... 5.38 .85 1.52 5.21 .77 (.55) Distributions from net realized gains (.84) (.54) -- (.84) (.54) -- ---------- ---------- ---------- ----------- ---------- ---------- Net asset value, end of period .......$ 13.57 $ 9.03 $ 8.72 $ 13.27 $ 8.90 $ 8.67 ========== ========== ========== =========== ========== ========== Total Return (iv) .................... 63.9% 10.7% 21.2% 62.9% 9.9% (6.0%) ========== ========== ========== =========== ========== ========== Ratios and Supplemental Data: Net assets, end of period (000's omitted) ..................$ 147,929 $ 54,415 $ 15,572 $ 43,789 $ 2,967 $ 631 ========== ========== ========== =========== ========== ========== Ratio of expenses excluding interest to average net assets ............ 1.38% 1.42% 1.45% 2.12% 2.18% 2.18% ========== ========== ========== =========== ========== ========== Ratio of expenses including interest to average net assets ............ 1.44% 1.49% 1.53% 2.21% 2.25% 2.25% ========== ========== ========== =========== ========== ========== Ratio of net investment income (loss) to average net assets ............ (.98%) (.67%) (.85%) (1.80%) (1.46%) (1.80%) ========== ========== ========== =========== ========== ========== Portfolio Turnover Rate ............ 186.93% 184.07% 157.63% 186.93% 184.07% 157.63% ========== ========== ========== =========== ========== ========== Amount of debt outstanding at end of period ................. -- -- -- -- -- -- ========== ========== ========== =========== ========== ========== Average amount of debt outstanding during the period . $7,758,649 $2,814,493 $2,940,097 $ 7,758,649 $2,814,493 $2,940,097 ========== ========== ========== =========== ========== ========== Average daily number of portfolio shares outstanding during the period ............ 42,330,298 29,012,853 23,217,597 42,330,298 29,012,853 23,217,597 ========== ========== ========== =========== ========== ========== Average amount of debt per portfolio share during the period ....... $ 0.18 $ 0.10 $ 0.13 $ 0.18 $ 0.10 $ 0.13 ========== ========== ========== =========== ========== ==========
(i) Prior to March 27, 1995, the Alger Capital Appreciation Portfolio was the Alger Leveraged AllCap Portfolio. (ii) Per share data has been adjusted to reflect the effect of a 3 for 1 stock split which occurred on January 8, 1999. (iii)Amount was computed based on average shares outstanding during the period. (iv) Does not reflect the effect of any sales charges. (v) Initially offered August 1, 1997. (vi) Initially offered January 1, 1997. (vii)Ratios have been annualized; total return has not been annualized. See Notes to Financial Statements. 29 THE ALGER FUND ALGER MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS October 31, 1999 SHORT-TERM CORPORATE PRINCIPAL NOTES--62.3% AMOUNT VALUE --------- ----- AGRICULTURE--3.3% Cargill Inc., 5.68%, 1/13/00........................... $8,000,000 $ 7,907,857 ------------- AUTOMOTIVE EQUIPMENT & SERVICES--6.3% Ford Motor Credit Company, 5.91%, 1/13/00 .......................... 7,900,000 7,805,325 General Motors Acceptance Corporation, 5.25%, 11/17/99 ......................... 7,400,000 7,382,733 ------------- 15,188,058 ------------- BANKS--3.3% Merita North America Inc., 6.07%, 1/18/00 .......................... 8,000,000 7,894,787 ------------- COMMUNICATIONS--3.3% France Telecom, 5.23%, 11/03/99(a) ...................... 8,000,000 7,997,676 ------------- DRUGS & HEALTH CARE--3.3% Bay State Health Corporation, 5.37%, 12/08/99 ......................... 8,000,000 7,955,847 ------------- FINANCIAL SERVICES--26.4% Accor S.A., 5.40%, 12/01/99 ......................... 8,000,000 7,964,000 American Express Credit Corporation, 5.19%, 11/15/99 ......................... 8,000,000 7,983,853 Atlantis One Funding Corp., 6.02%, 1/18/00 .......................... 8,000,000 7,895,653 CBA Delaware Finance Inc., 5.37%, 12/03/99 ......................... 8,000,000 7,961,813 General Electric Capital Corporation, 5.20%, 11/15/99 ......................... 8,000,000 7,983,822 FINANCIAL SERVICES--(CONT.) Grand Funding Corporation, 5.85%, 1/06/00(a)........................ $8,000,000 7,914,200 Natexis Banque S.A., 5.37%, 12/22/99 ......................... 8,000,000 7,939,140 San Paolo U.S. Financial Company, 5.27%, 11/02/99 ......................... 8,000,000 7,998,829 ------------- 63,641,310 ------------- FOODS & BEVERAGES--6.5% Coca-Cola Co. (The), 5.26%, 11/23/99 ......................... 7,900,000 7,874,606 General Mills, Inc., 5.63%, 1/25/00 .......................... 8,000,000 7,893,656 ------------- 15,768,262 ------------- LEISURE & ENTERTAINMENT--3.3% Walt Disney Company (The), 4.75%, 11/04/99 ......................... 8,000,000 7,996,834 ------------- MACHINERY & EQUIPMENT--3.3% Cooperative Association of Tractor Dealers Inc., Cl. A, 5.40%, 11/16/99 ......................... 8,000,000 7,982,000 ------------- REAL ESTATE--3.3% Yorkshire Building Society, 5.30%, 12/09/99 ......................... 8,000,000 7,955,245 ------------- Total Short-Term Corporate Notes (Cost $150,287,876) ..................... 150,287,876 ------------- Certificate of Deposit--3.3% Banco Espirito Santo e Commercial, de Lisboa, 5.23%, 11/09/99 (Cost $7,990,702) ....................... 8,000,000 7,990,702 ------------- 30 THE ALGER FUND ALGER MONEY MARKET PORTFOLIO SCHEDULE OF INVESTMENTS (Continued) October 31, 1999 PRINCIPAL AMOUNT VALUE --------- ----- U.S. GOVERNMENT & AGENCY OBLIGATIONS--43.0% Federal Home Loan Bank, 5.16%, 11/01/99....................... $53,800,000 $ 53,800,000 World Bank Corporation Discount Notes, 5.16%, 11/01/99....................... 50,000,000 50,000,000 ------------- Total U.S. Government & Agency Obligations (Cost $103,800,000) ..................... 103,800,000 ------------- Total Investments (Cost $262,078,578)(b) .................. 108.6% 262,078,578 Liabilities In Excess of Other Assets ......................... (8.6) (20,768,742) ------------- ------------- Net Assets ................................ 100.0% $241,309,836 ============= ============= (a) Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified institutional buyers. (b) At October 31, 1999, the cost of investments for federal income taxes purposes was the same as the cost for financial reporting purposes. See Notes to Financial Statements. 31 THE ALGER FUND Alger MONEY MARKET PORTFOLIO Financial Highlights For a share outstanding throughout the year
YEAR ENDED OCTOBER 31, ------------------------------------------------------------------ 1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- Net asset value, beginning of year ...... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 --------- -------- -------- -------- -------- Net investment income ................... .0423 .0476 .0479 .0521 .0573 Dividends from net investment income .... (.0423) (.0476) (.0479) (.0521) (.0573) --------- -------- -------- -------- -------- Net asset value, end of year ............ $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 ========= ======== ======== ======== ======== Total Return ............................ 4.3% 4.9% 4.9% 5.3% 5.9% ========= ======== ======== ======== ======== Ratios and Supplemental Data: Net assets, end of year (000's omitted) ....................... $ 241,310 $ 172,862 $ 179,407 $ 285,702 $ 185,822 ========= ======== ======== ======== ======== Ratio of expenses to average net assets . .72% .76% .81% .41% .29% ========= ======== ======== ======== ======== Decrease reflected in above expense ratios due to management fee waivers ................ -- -- -- .38% .50% ========= ======== ======== ======== ======== Ratio of net investment income to average net assets ................. 4.37% 4.84% 4.76% 5.18% 5.73% ========= ======== ======== ======== ========
See Notes to Financial Statements. 32 THE ALGER FUND STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except per share amounts) October 31, 1999
SMALL CAPITAL CAPITAL- MIDCAP APPRE- MONEY GROWTH IZATION BALANCED GROWTH CIATION MARKET ASSETS: PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- --------- --------- --------- --------- Investments in securities, at value (identified cost*)-see accompany- ing schedules of investments ............ $ 1,002,261 $ 496,166 $ 77,655 $ 313,239 $ 772,522 $ 262,079 Cash ....................................... 67 110 45 42 167 910 Receivable for investment securities sold .. 28,465 2,885 1,902 3,297 24,757 -- Receivable for shares of beneficial interest sold .......................... 31,648 1,795 1,766 1,678 12,158 15,601 Dividends and interest receivable .............................. 199 4 175 11 114 -- Prepaid expenses ........................... 93 53 14 45 60 90 ----------- ----------- ----------- ----------- ----------- ----------- Total Assets ........................... 1,062,733 501,013 81,557 318,312 809,778 278,680 ----------- ----------- ----------- ----------- ----------- ----------- LIABILITIES: Payable for investment securities purchased .................... 28,860 2,249 1,402 6,743 8,142 -- Payable for shares of beneficial interest redeemed ....................... 1,495 291 273 2,786 13,550 36,979 Interest payable ........................... -- 1 -- -- 32 -- Accrued investment management fees ......... 586 349 47 195 514 143 Accrued distribution fees .................. 456 272 39 159 372 -- Accrued shareholder servicing fees ......... 195 103 16 61 151 -- Dividends payable-Note 2(c) ................ -- -- -- -- -- 94 Accrued expenses ........................... 434 261 59 156 328 154 ----------- ----------- ----------- ----------- ----------- ----------- Total Liabilities ...................... 32,026 3,526 1,836 10,100 23,089 37,370 ----------- ----------- ----------- ----------- ----------- ----------- NET ASSETS ................................. $ 1,030,707 $ 497,487 $ 79,721 $ 308,212 $ 786,689 $ 241,310 =========== =========== =========== =========== =========== =========== Net Assets Consist of: Paid-in capital ......................... $ 734,085 $ 331,853 $ 67,630 $ 230,171 $ 552,645 $ 241,386 Undistributed net investment income (accumulated loss) ............. (19,428) (51,039) 160 (10,312) (16,864) -- Undistributed net realized gain (accumulated loss) ............... 184,809 108,128 6,512 63,225 133,837 (76) Net unrealized appreciation .............. 131,241 108,545 5,419 25,128 117,071 -- ----------- ----------- ----------- ----------- ----------- ----------- NET ASSETS ................................. $ 1,030,707 $ 497,487 $ 79,721 $ 308,212 $ 786,689 $ 241,310 =========== =========== =========== =========== =========== =========== Class A Net Asset Value Per Share ................ $ 15.47 $ 10.35 $ 20.95 $ 24.59 $ 13.57 -- =========== =========== =========== =========== =========== =========== Offering Price Per Share ................. $ 16.24 $ 10.87 $ 21.99 $ 25.82 $ 14.25 -- =========== =========== =========== =========== =========== =========== Class B Net Asset Value and Offering Price Per Share ............... $ 15.09 $ 10.13 $ 20.59 $ 23.99 $ 13.28 $ 1.00 =========== =========== =========== =========== =========== =========== Class C Net Asset Value and Offering Price Per Share ............... $ 15.08 $ 10.13 $ 20.65 $ 23.96 $ 13.27 -- =========== =========== =========== =========== =========== =========== Shares of beneficial interest outstanding-Note 6 Class A .................................. 14,798 6,762 596 2,003 10,898 -- =========== =========== =========== =========== =========== =========== Class B .................................. 51,047 41,432 2,555 10,342 44,814 241,386 =========== =========== =========== =========== =========== =========== Class C .................................. 2,089 756 708 452 3,299 -- =========== =========== =========== =========== =========== =========== *Identified cost ........................... $ 871,020 $ 387,621 $ 72,236 $ 288,111 $ 655,451 $ 262,079 =========== =========== =========== =========== =========== ===========
See Notes to Financial Statements 33 THE ALGER FUND STATEMENTS OF OPERATIONS (in thousands) For the year ended October 31, 1999
SMALL CAPITAL CAPITAL- MIDCAP APPRE- MONEY GROWTH IZATION BALANCED GROWTH CIATION MARKET INVESTMENT INCOME: PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- --------- --------- --------- --------- Income: Dividends ................................. $ 2,883 $ 976 $ 107 $ 475 $ 1,002 $ -- Interest .................................. 2,536 2,076 1,069 1,315 1,189 14,432 -------- -------- ------ ------- -------- ------- Total Income .............................. 5,419 3,052 1,176 1,790 2,191 14,432 Expenses: Management fees-Note 3(a) ................. 5,775 4,578 347 2,093 4,213 1,417 Distribution fees-Note 3(b): Class B ................................. 4,336 3,539 246 1,666 2,939 -- Class C .............................. 104 46 46 41 136 -- Shareholder servicing fees-Note 3(f) ..... 1,925 1,347 116 654 1,239 -- Interest on line of credit utilized-Note 5 69 304 1 32 429 7 Custodian fees ........................... 94 67 20 39 62 52 Transfer agent fees and expenses-Note 3(e) ...................... 1,121 1,010 107 456 1,054 451 Professional fees ......................... 27 23 19 26 19 21 Trustees' fees ............................ 5 5 5 5 5 5 Registration fees ......................... 165 34 36 50 133 73 Miscellaneous ............................. 155 128 8 94 55 24 -------- -------- ------ ------- -------- ------- Total Expenses ............................ 13,776 11,081 951 5,156 10,284 2,050 -------- -------- ------ ------- -------- ------- NET INVESTMENT INCOME (LOSS) ............................ (8,357) (8,029) 225 (3,366) (8,093) 12,382 -------- -------- ------ ------- -------- ------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain (loss) on investments ..... 182,147 90,139 6,539 58,127 125,466 (2) Net change in unrealized appreciation (depreciation) on investments ............. 38,830 64,884 2,433 11,776 80,515 -- -------- -------- ------ ------- -------- ------- Net realized and unrealized gain (loss) on investments ................ 220,977 155,023 8,972 69,903 205,981 (2) -------- -------- ------ ------- -------- ------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................... $212,620 $146,994 $9,197 $66,537 $197,888 $12,380 -------- -------- ------ ------- -------- -------
See Notes to Financial Statements 34 THE ALGER FUND ALGER CAPITAL APPRECIATION PORTFOLIO STATEMENT OF CASH FLOWS (in thousands) For the year ended October 31, 1999
Increase (decrease) in cash: Cash flows from operating activities: Dividends received ......................................................... $ 969 Interest received .......................................................... 1,189 Interest paid .............................................................. (402) Operating expenses paid .................................................... (9,051) Purchase of investment securities .......................................... (1,174,343) Purchase of short-term securities, net ..................................... (4,926) Proceeds from disposition of investment securities ......................... 895,980 Other ...................................................................... (34) ----------- Net cash used in operating activities .................................. (290,618) ----------- Cash flows from financing activities: Dividends paid ........................................................... (24,752) Proceeds from shares sold and dividends reinvested ......................... 3,572,398 Payments on shares redeemed ................................................ (3,256,993) ----------- Net cash provided by financing activities ............................ 290,653 ----------- Net increase in cash ........................................................... 35 Cash--beginning of year ........................................................ 132 ----------- Cash--end of year .............................................................. $ 167 =========== Reconciliation of net increase in net assets to net cash used in operating activities: Net increase in net assets resulting from operations ..................... $ 197,888 Increase in investments .................................................. (267,408) Increase in interest and dividends receivable ............................ (33) Increase in receivable for investment securities sold .................... (13,432) Decrease in payable for investment securities purchased .................. (2,450) Net realized gain ........................................................ (125,466) Net increase in unrealized appreciation .................................. (80,515) Increase in accrued expenses and other liabilities ....................... 831 Net increase in other assets ............................................. (33) ----------- Net cash used in operating activities ................................ $ (290,618) ===========
See Notes to Financial Statements 35 THE ALGER FUND STATEMENTS OF CHANGES IN NET ASSETS (in thousands) For the year ended October 31, 1999
SMALL CAPITAL CAPITAL- MIDCAP APPRE- MONEY GROWTH IZATION BALANCED GROWTH CIATION MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- --------- --------- --------- --------- Net investment income (loss) ............ $ (8,357) $ (8,029) $ 225 $ (3,366) $ (8,093) $ 12,382 Net realized gain (loss) on investments . 182,147 90,139 6,539 58,127 125,466 (2) Net change in unrealized appreciation (depreciation) on investments ........ 38,830 64,884 2,433 11,776 80,515 -- ----------- ----------- ----------- ----------- ----------- ----------- Net increase in net assets resulting from operations ........ 212,620 146,994 9,197 66,537 197,888 12,380 ----------- ----------- ----------- ----------- ----------- ----------- Dividends and distributions to shareholders from: Net investment income Class A ............................. -- -- (7) -- -- -- Class B ............................. -- -- (31) -- -- (12,382) Net realized gains Class A ............................. (12,572) (5,621) (101) (2,780) (3,154) -- Class B ............................. (40,774) (49,513) (1,123) (24,072) (21,244) -- Class C ............................. (432) (236) (34) (331) (354) -- ----------- ----------- ----------- ----------- ----------- ----------- Total dividends and distributions to shareholders ......... (53,778) (55,370) (1,296) (27,183) (24,752) (12,382) ----------- ----------- ----------- ----------- ----------- ----------- Increase (decrease) from shares of beneficial interest transactions: Class A ............................. 70,710 (2,005) 10,077 11,740 64,516 -- Class B ............................. 258,777 (119,313) 27,338 22,482 213,052 68,450 Class C ............................. 26,251 2,039 13,435 8,496 35,662 -- ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) from shares of beneficial interest transactions-Note 6 .......... 355,738 (119,279) 50,850 42,718 313,230 68,450 ----------- ----------- ----------- ----------- ----------- ----------- Total increase (decrease) ......... 514,580 (27,655) 58,751 82,072 486,366 68,448 Net Assets: Beginning of year .................... 516,127 525,142 20,970 226,140 300,323 172,862 ----------- ----------- ----------- ----------- ----------- ----------- End of year .......................... $ 1,030,707 $ 497,487 $ 79,721 $ 308,212 $ 786,689 $ 241,310 =========== =========== =========== =========== =========== =========== Undistributed net investment income (accumulated loss) ............ $ (19,428) $ (51,039) $ 160 $ (10,312) $(16,864) $ -- =========== =========== =========== =========== =========== ===========
See Notes to Financial Statements 36 THE ALGER FUND STATEMENTS OF CHANGES IN NET ASSETS (in thousands) For the year ended October 31, 1998
SMALL CAPITAL CAPITAL- MIDCAP APPRE- MONEY GROWTH IZATION BALANCED GROWTH CIATION MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- --------- --------- --------- --------- Net investment income (loss) ................. $ (3,409) $ (7,991) $ 39 $ (2,520) $ (3,613) $ 10,813 Net realized gain on investments ............. 52,782 60,965 1,229 29,077 28,168 6 Net change in unrealized appreciation (depreciation) on investments ............. 31,157 (86,096) 1,416 (10,808) 6,353 -- --------- --------- --------- --------- --------- --------- Net increase (decrease) in net assets resulting from operations ............. 80,530 (33,122) 2,684 15,749 30,908 10,819 --------- --------- --------- --------- --------- --------- Dividends and distributions to shareholders from: Net investment income Class A .................................. -- -- (2) -- -- -- Class B .................................. -- -- (9) -- -- (10,813) Net realized gains Class A .................................. (10,089) (1,188) (64) (574) (880) -- Class B .................................. (36,412) (27,136) (1,780) (18,402) (13,178) -- Class C .................................. (54) (25) (7) (19) (62) -- --------- --------- --------- --------- --------- --------- Total dividends and distributions to shareholders ............................ (46,555) (28,349) (1,862) (18,995) (14,120) (10,813) --------- --------- --------- --------- --------- --------- Increase (decrease) from shares of beneficial interest transactions: Class A .................................. 60,108 35,329 825 22,940 33,947 -- Class B .................................. 61,703 (59,944) 5,891 32,756 18,172 (6,551) Class C .................................. 2,851 4,243 272 1,695 2,318 -- --------- --------- --------- --------- --------- --------- Net increase (decrease) from shares of beneficial interest transactions-Note 6 ............... 124,662 (20,372) 6,988 57,391 54,437 (6,551) --------- --------- --------- --------- --------- --------- Total increase (decrease) .............. 158,637 (81,843) 7,810 54,145 71,225 (6,545) Net Assets: Beginning of year ......................... 357,490 606,985 13,160 171,995 229,098 179,407 --------- --------- --------- --------- --------- --------- End of year ............................... $ 516,127 $ 525,142 $ 20,970 $ 226,140 $ 300,323 $ 172,862 ========= ========= ========= ========= ========= ========= Undistributed net investment income (accumulated loss) ................. $ (11,071) $ (43,010) $ (27) $ (6,946) $ (8,771) -- ========= ========= ========= ========= ========= =========
See Notes to Financial Statements 37 THE ALGER FUND NOTES TO FINANCIAL STATEMENTS NOTE 1- General: The Alger Fund (the "Fund") is a diversified, open-end registered investment company organized as a business trust under the laws of the Commonwealth of Massachusetts. The Fund operates as a series company currently issuing an unlimited number of shares of beneficial interest in six portfolios--Growth Portfolio, Small Capitalization Portfolio, Balanced Portfolio, MidCap Growth Portfolio, Capital Appreciation Portfolio and Money Market Portfolio (the "Portfolios"). The Growth Portfolio, Small Capitalization Portfolio, MidCap Growth Portfolio and Capital Appreciation Portfolio normally invest primarily in equity securities and each has an investment objective of long-term capital appreciation. The Balanced Portfolio's investment objectives are current income and long-term capital appreciation which it seeks to achieve through investing in equity and fixed income securities. The Money Market Portfolio's investment objective is high current income which it seeks to achieve by investing in short-term instruments. Each Portfolio, other than the Money Market Portfolio, offers Class A, Class B and Class C shares. Class A and Class C shares were first offered on January 1, 1997 and August 1, 1997, respectively. Class A shares are generally subject to an initial sales charge while Class B and Class C shares are generally subject to a deferred sales charge. Class B and Class C shares will automatically convert to Class A shares eight and twelve years, respectively, after the end of the calendar month in which the order to purchase was accepted. The conversion is completed without the imposition of any sales charges or other fees. Each class has identical rights to assets and earnings except that only Class B and Class C shares have plans of distribution and bear the related expenses. NOTE 2- Significant Accounting Policies: (a) INVESTMENT VALUATION: Investments of the Portfolios, other than the Money Market Portfolio, are valued on each day the New York Stock Exchange (the "NYSE") is open as of the close of the NYSE (normally 4:00 p.m. Eastern time). Listed and unlisted securities for which such information is regularly reported are valued at the last reported sales price or, in the absence of reported sales, at the mean between the bid and asked price or, in the absence of a recent bid or asked price, the equivalent as obtained from one or more of the major market makers for the securities to be valued. Securities for which market quotations are not readily available are valued at fair value, as determined in good faith pursuant to procedures established by the Board of Trustees. The investments of the Money Market Portfolio, and short-term securities held by the other Portfolios having a remaining maturity of sixty days or less, are valued at amortized cost which approximates market value. (b) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income is recognized on the accrual basis. (c) DIVIDENDS TO SHAREHOLDERS: Dividends payable to shareholders are recorded on the ex-dividend date. The Money Market Portfolio declares dividends daily from net investment income; such dividends are paid monthly. The dividends from net investment income of the other Portfolios are declared and paid annually. With respect to all Portfolios, dividends from net realized gains, offset by any loss carryforward, are declared and paid annually after the end of the fiscal year in which earned. Each class is treated separately in determining the amounts of dividends of net investment income and dis-tributions of capital gains payable to holders of its shares. (d) FEDERAL INCOME TAXES: It is each Portfolio's policy to comply with the requirements of the Internal Rev- 38 THE ALGER FUND NOTES TO FINANCIAL STATEMENTS (Continued) enue Code applicable to regulated investment companies and to distribute all of its investment company taxable income to its shareholders. Provided a Portfolio maintains such compliance, no federal income tax provision is required. Each Portfolio is treated as a separate entity for the purpose of determining such compliance. At October 31, 1999, the net capital loss carryforwards of the Money Market Portfolio which may be used to offset future net realized gains were approximately $72,000, and expire between 2000 and 2006. (e) ALLOCATION METHODS: The Fund accounts separately for the assets, liabilities and operations of each Portfolio. Expenses directly attributable to each Portfolio are charged to that Portfolio's operations; expenses which are applicable to all Portfolios are allocated among them. Income, realized and unrealized gains and losses, and expenses of each Portfolio, other than the Money Market Portfolio, are allocated among the Portfolio's classes based on relative net assets, with the exception of distribution fees, which are only applicable to Class B and Class C shares. (f) OTHER: These financial statements have been prepared using estimates and assumptions that affect the reported amounts therein. Actual results may differ from those estimates. NOTE 3- Investment Management Fees and Other Transactions with Affiliates: (a) INVESTMENT MANAGEMENT FEES: Fees incurred by each Portfolio, pursuant to the provisions of its Investment Management Agreement with Fred Alger Management, Inc. ("Alger Management"), are payable monthly and are computed based on the value of the average daily net assets of each Portfolio at the following annual rates: Growth Portfolio............................ .75% Small Capitalization Portfolio.............. .85 Balanced Portfolio.......................... .75 MidCap Growth Portfolio..................... .80 Capital Appreciation Portfolio.............. .85 Money Market Portfolio...................... .50 (b) DISTRIBUTION FEES: Class B Shares--The Fund has adopted an Amended and Restated Plan of Distribution pursuant to which Class B shares of each Portfolio, other than the Money Market Portfolio, reimburse Fred Alger & Company, Incorporated, the Fund's distributor (the "Distributor"), for costs and expenses incurred by the Distributor in connection with advertising, marketing and selling the Class B shares. The distribution fee is not to exceed an annual rate of .75% of the respective average daily net assets of the Class B shares of the designated Portfolios. If in any month, the costs incurred by the Distributor relating to the Class B shares are in excess of the distribution fees charged to the Class B shares of the Portfolios, the excess may be carried forward, with interest, and sought to be reimbursed in future periods. As of October 31, 1999, such excess carried forward was approximately $15,036,000, $15,666,000, $906,000, $4,023,000 and $9,013,000 for Class B shares of the Growth Portfolio, the Small Capitalization Portfolio, the Balanced Portfolio, the MidCap Growth Portfolio, and the Capital Appreciation Portfolio, respectively. Contingent deferred sales charges imposed on redemptions of Class B shares will reduce the amount of distribution expenses for which reimbursement may be sought. See Note 3(c) below. Class C Shares--The Fund has adopted a Distribution Plan pursuant to which Class C shares of each Portfolio, other than the Money Market Portfolio, pay the Distributor a fee at the annual rate of .75% of the respective average daily net assets of the Class C shares of the designated Portfolios to compensate the Distributor for its activities and expenses incurred in distributing the Class C shares. The fees charged may be more or less than the expenses incurred by the Distributor. (c) SALES CHARGES: The purchases and sales of shares of the Portfolios, other than the Money Market Portfolio, may be subject to initial sales charges or contingent deferred sales charges. For the year ended October 31, 1999, the initial sales charges and contingent deferred 39 THE ALGER FUND NOTES TO FINANCIAL STATEMENTS (Continued) sales charges retained by the Distributor were approximately $139,000 and $2,681,000, respectively. The contingent deferred sales charges are used by the Distributor to offset distribution expenses previously incurred. Sales charges do not represent expenses of the Fund. (d) BROKERAGE COMMISSIONS: During the year ended October 31, 1999, the Growth Portfolio, the Small Capitalization Portfolio, the Balanced Portfolio, the MidCap Growth Portfolio and the Capital Appreciation Portfolio paid the Distributor commissions of $2,167,331, $863,081, $76,086, $776,224 and $1,040,840, respectively, in connection with securities transactions. (e) TRANSFER AGENT FEES AND EXPENSES: Alger Shareholder Services, Inc. ("Alger Services"), an affiliate of Alger Management, serves as transfer agent for the Fund. During the year ended October 31, 1999, the Growth Portfolio, the Small Capitalization Portfolio, the Balanced Portfolio, the MidCap Growth Portfolio, the Capital Appreciation Portfolio and the Money Market Portfolio incurred fees of $951,477, $892,063, $97,317, $403,633, $956,643 and $407,807, respectively, for services provided by Alger Services. In addition, during the year ended October 31, 1999, the Growth Portfolio, the Small Capitalization Portfolio, the Balanced Portfolio, the MidCap Growth Portfolio, the Capital Appreciation Portfolio and the Money Market Portfolio reimbursed Alger Services $169,160, $117,860, $9,292, $51,890, $97,200 and $43,080, respectively, for transfer agent related expenses paid by Alger Services on behalf of the Portfolios. (f) SHAREHOLDER SERVICING FEES: The Fund has entered into a shareholder servicing agreement with the Distributor whereby the Distributor provides each Portfolio, other than the Money Market Portfolio, with ongoing servicing of shareholder accounts. As compensation for such services, each designated Portfolio pays the Distributor a monthly fee at an annual rate equal to .25% of each Portfolio's average daily net assets. (g) OTHER TRANSACTIONS WITH AFFILIATES: Certain trustees and officers of the Fund are directors and officers of Alger Management, the Distributor and Alger Services. NOTE 4- Securities Transactions: The following summarizes the securities transactions by the Fund, other than short-term securities, for the year ended October 31, 1999 (in thousands): Purchases Sales --------- ----- Growth Portfolio......... $1,718,333 $1,481,435 Small Capitalization Portfolio.............. 553,198 671,503 Balanced Portfolio....... 72,618 44,471 MidCap Growth Portfolio.............. 492,308 487,498 Capital Appreciation Portfolio.............. 1,171,893 909,475 NOTE 5- Lines of Credit: The Fund has both committed and uncommitted lines of credit with banks. All borrowings have variable interest rates and are payable on demand. With the exception of the Capital Appreciation Portfolio, the Fund borrows under such lines of credit exclusively for temporary or emergency purposes. The Capital Appreciation Portfolio may borrow under these lines up to 1/3 of the value of its assets, as defined, to purchase additional securities. To the extent the Capital Appreciation Portfolio borrows under these lines, it must pledge securities with a total value of at least twice the amount borrowed. For the year ended October 31, 1999, the Capital Appreciation Portfolio had borrowings which averaged $7,758,649 at a weighted average interest rate of 5.46%. 40 THE ALGER FUND NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 6- Share Capital: The Fund has an unlimited number of authorized shares of beneficial interest of $.001 par value which are presently divided into six series. Each series, other than the Money Market Portfolio, is divided into three separate classes. The transactions of shares of beneficial interest were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 31, 1999 OCTOBER 31, 1998 SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ Alger Growth Portfolio Class A: Shares sold..................... 93,010,120 $1,345,815,062 21,100,549 $ 251,594,946 Shares converted from Class B... 765,156 10,723,156 2,515,306 28,918,933 Dividends reinvested............ 676,360 8,211,015 1,012,458 9,861,339 Shares redeemed................. (89,655,055) (1,294,039,354) (19,143,051) (230,266,858) ------------ ---------------- ------------ ------------- Net increase.................... 4,796,581 $ 70,709,879 5,485,262 $ 60,108,360 ============ ================ ============ ============= Class B: Shares sold..................... 118,806,283 $1,673,356,937 32,510,335 $ 378,490,196 Dividends reinvested............ 3,233,151 38,571,496 3,613,386 34,869,174 Shares converted to Class A..... (779,638) (10,723,156) (2,536,424) (28,918,933) Shares redeemed................. (102,786,502) (1,442,428,434) (27,523,316) (322,737,781) ------------ ---------------- ------------ ------------- Net increase ................... 18,473,294 $ 258,776,843 6,063,981 $ 61,702,656 ============ ================ ============ ============= Class C: Shares sold..................... 2,593,259 $ 37,501,908 921,931 $ 11,159,179 Dividends reinvested............ 29,615 353,009 5,128 49,487 Shares redeemed................. (810,252) (11,603,192) (668,318) (8,358,166) ------------ ---------------- ------------ ------------- Net increase.................... 1,812,622 $ 26,251,725 258,741 $ 2,850,500 ============ ================ ============ ============= Alger Small Capitalization Portfolio Class A: Shares sold..................... 149,420,839 $1,465,519,097 61,503,618 $ 589,789,058 Shares converted from Class B... 1,236,266 12,164,811 1,666,233 16,755,718 Dividends reinvested............ 571,350 4,845,050 120,213 1,097,543 Shares redeemed................. (151,276,967) (1,484,533,596) (58,990,985) (572,313,304) ------------ ---------------- ------------ -------------- Net increase (decrease)......... (48,512) $ (2,004,638) 4,299,079 $ 35,329,015 ============ ================ ============ ============= Class B: Shares sold..................... 314,933,540 $3,028,416,304 176,830,341 $1,671,198,375 Dividends reinvested............ 5,742,442 47,777,113 2,899,072 26,265,587 Shares converted to Class A..... (1,259,686) (12,164,811) (1,684,647) (16,755,718) Shares redeemed................. (331,525,302) (3,183,341,861) (180,951,992) (1,740,652,109) ------------ ---------------- ------------ -------------- Net decrease.................... (12,109,006) $ (119,313,255) (2,907,226) $ (59,943,865) ============ ================ ============ ============= Class C: Shares sold..................... 9,797,623 $ 94,352,794 2,997,520 $ 28,283,527 Dividends reinvested............ 21,996 182,783 2,485 22,515 Shares redeemed................. (9,626,258) (92,496,428) (2,469,935) (24,063,272) ------------ ---------------- ------------ -------------- Net increase.................... 193,361 $ 2,039,149 530,070 $ 4,242,770 ============ ================ ============ =============
41 THE ALGER FUND NOTES TO FINANCIAL STATEMENTS (Continued)
FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 31, 1999 OCTOBER 31, 1998 SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ Alger Balanced Portfolio Class A: Shares sold..................... 4,284,737 $ 85,443,461 140,560 $ 2,276,674 Shares converted from Class B... 6,645 130,732 7,838 120,962 Dividends reinvested............ 5,413 91,866 4,622 65,126 Shares redeemed................. (3,781,145) (75,588,660) (100,269) (1,638,040) ------------ -------------- ------------ ------------ Net increase.................... 515,650 $ 10,077,399 52,751 $ 824,722 ============ ============== ============ ============ Class B: Shares sold..................... 5,166,089 $ 99,682,060 710,530 $ 11,206,494 Dividends reinvested............ 64,040 1,075,875 122,289 1,714,490 Shares converted to Class A..... (6,739) (130,732) (7,894) (120,962) Shares redeemed................. (3,827,743) (73,289,320) (433,903) (6,908,568) ------------ -------------- ------------ ------------ Net increase.................... 1,395,647 $ 27,337,883 391,022 $ 5,891,454 ============ ============== ============ ============ Class C: Shares sold..................... 886,244 $ 17,342,456 21,158 $ 335,495 Dividends reinvested............ 1,551 26,116 473 6,646 Shares redeemed................. (199,452) (3,933,326) (4,478) (70,500) ------------ -------------- ------------ ------------ Net increase.................... 688,343 $ 13,435,246 17,153 $ 271,641 ============ ============== ============ ============ Alger MidCap Growth Portfolio Class A: Shares sold..................... 51,120,798 $1,191,539,173 17,759,678 $373,805,169 Shares converted from Class B... 37,885 886,475 30,842 653,860 Dividends reinvested............ 131,312 2,575,026 28,826 526,934 Shares redeemed................. (50,818,422) (1,183,261,041) (16,530,334) (352,045,613) ------------ -------------- ------------ ------------ Net increase.................... 471,573 $ 11,739,633 1,289,012 $ 22,940,350 ============ ============== ============ ============ Class B: Shares sold..................... 19,227,997 $ 433,987,342 9,670,177 $202,901,737 Dividends reinvested............ 1,126,031 21,676,093 952,240 17,273,632 Shares converted to Class A..... (38,709) (886,475) (31,165) (653,860) Shares redeemed................. (19,160,883) (432,294,954) (8,858,104) (186,765,967) ------------ -------------- ------------ ------------ Net increase.................... 1,154,436 $ 22,482,006 1,733,148 $ 32,755,542 ============ ============== ============ ============ Class C: Shares sold..................... 591,573 $ 13,714,796 253,315 $ 5,217,737 Dividends reinvested............ 13,611 261,599 761 13,810 Shares redeemed................. (237,585) (5,479,710) (173,525) (3,536,369) ------------ -------------- ------------ ------------ Net increase.................... 367,599 $ 8,496,685 80,551 $ 1,695,178 ============ ============== ============ ============
42 THE ALGER FUND NOTES TO FINANCIAL STATEMENTS (Continued)
FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 31, 1999 OCTOBER 31, 1998 SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ Alger Capital Appreciation Portfolio Class A:* Shares sold..................... 168,941,613 $2,013,311,342 58,266,912 $ 523,464,891 Shares converted from Class B... 175,365 2,161,488 192,120 1,760,871 Dividends reinvested............ 316,690 2,952,608 109,140 843,296 Shares redeemed................. (164,563,152) (1,953,909,113) (54,325,476) (492,122,233) -------------- -------------- -------------- -------------- Net increase ................... 4,870,516 $ 64,516,325 4,242,696 $ 33,946,825 ============== ============== ============== ============== Class B:* Shares sold..................... 127,184,924 $1,494,488,538 64,598,964 $ 569,383,745 Dividends reinvested............ 2,154,183 19,746,682 1,625,283 12,460,510 Shares converted to Class A..... (178,924) (2,161,488) (194,292) (1,760,871) Shares redeemed................. (111,652,359) (1,299,022,116) (63,290,757) (561,910,894) -------------- -------------- -------------- -------------- Net increase.................... 17,507,824 $ 213,051,616 2,739,198 $ 18,172,490 ============== ============== ============== ============== Class C:* Shares sold..................... 4,353,255 $ 52,799,128 1,671,939 $ 14,867,062 Dividends reinvested............ 25,529 233,926 6,093 46,713 Shares redeemed................. (1,413,209) (17,370,934) (1,417,251) (12,595,276) -------------- -------------- -------------- -------------- Net increase.................... 2,965,575 $ 35,662,120 260,781 $ 2,318,499 ============== ============== ============== ============== Alger Money Market Portfolio Shares sold..................... 9,851,815,099 $9,851,815,099 3,890,533,124 $3,890,533,124 Dividends reinvested............ 9,402,809 9,402,809 8,949,498 8,949,498 Shares redeemed................. (9,792,767,208) (9,792,767,208) (3,906,034,069) (3,906,034,069) -------------- -------------- -------------- -------------- Net increase (decrease)........ 68,450,700 $ 68,450,700 (6,551,447) $ (6,551,447) ============== ============== ============== ============== - ---------------- * Adjusted to reflect the effect of a 3 for 1 stock split which occurred on January 8, 1999.
43 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Board of Trustees of The Alger Fund: We have audited the statements of assets and liabilities, including the schedules of investments, of The Alger Fund (a Massachusetts business trust comprising, respectively, the Growth, Small Capitalization, Balanced, MidCap Growth, Capital Appreciation and Money Market Portfolios) as of October 31, 1999, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 1999, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective portfolios constituting The Alger Fund, as of October 31, 1999, the results of their operations and cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP New York, New York December 7, 1999 44 [This Page Intentionally Left Blank] [This Page Intentionally Left Blank] The Alger Fund 1 World Trade Center Suite 9333 New York, N.Y. 10048 (800) 992-3863 www.algerfund.com - --------------------------------------- Board of Trustees Fred M. Alger, CHAIRMAN David D. Alger Stephen E. O'Neil Nathan E. Saint-Amand B. Joseph White - --------------------------------------- Investment Manager Fred Alger Management, Inc. 1 World Trade Center Suite 9333 New York, N.Y. 10048 - --------------------------------------- Distributor Fred Alger & Company, Incorporated 30 Montgomery Street Jersey City, N.J. 07302 - --------------------------------------- Transfer Agent Alger Shareholder Services, Inc. 30 Montgomery Street Jersey City, N.J. 07302 - --------------------------------------- This report is submitted for the general information of the shareholders of The Alger Fund. It is not authorized for distribution to prospective investors unless accompanied by an effective Prospectus for the Fund, which contains information concerning the Fund's investment policies, fees and expenses as well as other pertinent information. REP109 ================================================================================ THE ALGER FUND [Logo] Alger Growth Portfolio Alger Small Capitalization Portfolio Alger Balanced Portfolio Alger MidCap Growth Portfolio Alger Capital Appreciation Portfolio Alger Money Market Portfolio | ANNUAL | REPORT | October 31, 1999 | -----END PRIVACY-ENHANCED MESSAGE-----