N-CSRS 1 c47900_n-csrs.txt -------------------------- OMB APPROVAL -------------------------- OMB Number: 3235-0570 Expires: April 30, 2008 Estimated average burden hours per response: 19.4 -------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-1355 The Alger Funds (Exact name of registrant as specified in charter) 111 Fifth Avenue New York, New York 10003 (Address of principal executive offices) (Zip code) Mr. Hal Liebes Fred Alger Management, Inc. 111 Fifth Avenue New York, New York 10003 (Name and address of agent for service) Registrant's telephone number, including area code: 212-806-8800 Date of fiscal year end: October 31 Date of reporting period: April 30, 2007 ITEM 1. REPORT(S) TO STOCKHOLDERS. -------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND | ALGER SMALLCAP GROWTH FUND | ALGER BALANCED FUND | ALGER MIDCAP GROWTH FUND | ALGER CAPITAL APPRECIATION FUND | ALGER HEALTH SCIENCES FUND | ALGER SMALLCAP AND MIDCAP GROWTH FUND | ALGER CORE FIXED-INCOME FUND | ALGER MONEY MARKET FUND -------------------------------------------------------------------------------- THE ALGER FUNDS -------------------------------------------------------------------------------- [GRAPHIC] SEMI-ANNUAL REPORT April 30, 2007 [LOGO] (Unaudited) ALGER -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- TABLE OF CONTENTS -------------------------------------------------------------------------------- THE ALGER FUNDS -------------------------------------------------------------------------------- Letter to Our Shareholders 1 -------------------------------------------------------------------------------- Fund Highlights 12 -------------------------------------------------------------------------------- Portfolio Summary 20 -------------------------------------------------------------------------------- Schedules of Investments 22 -------------------------------------------------------------------------------- Statements of Assets and Liabilities 62 -------------------------------------------------------------------------------- Statements of Operations 65 -------------------------------------------------------------------------------- Statements of Changes in Net Assets 68 -------------------------------------------------------------------------------- Financial Highlights 74 -------------------------------------------------------------------------------- Notes to Financial Statements 88 -------------------------------------------------------------------------------- Additional Information 105 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- DEAR SHAREHOLDERS, JUNE 8, 2007 -------------------------------------------------------------------------------- In our October 31, 2006 report, we likened the new global economy to a "Brave New World." While we are usually loath to recycle a metaphor so quickly, in this case, it seems fitting to continue to use it. Nothing that has happened over the past six months alters our view that we are entering uncharted waters for both the global economy and for the thousands of companies that are being reshaped by it. As with any sweeping change, there are those who embrace it and try to anticipate the risks and rewards; there are those who deny that there is any change; and finally those who simply wait to see what everyone else thinks. At Alger, we fall into the first camp, and, in fact, believe that we are still in the early stages of a radical shift in how the global economy functions; one that has already produced new winners and losers, not just in terms of nations, but of companies that are seizing the opportunities and those that are unable to. While the story of China and India is familiar, it is hardly limited to them and now includes such disparate regions as Vietnam, Eastern Europe and Australia, to name three, all of which are adding additional complexity and additional fuel to the expanding global economy. Here then is our six-month postcard from this Brave New World. The themes include the greening of corporate America and the lessons gleaned from the swift fall and startling sharp recovery of the equity markets on February 27. They include the coming of age of private equity as a force that can move and shape the markets, and the importance of free cash flow as a metric for measuring the strength of corporate balance sheets. And of course, one other theme stands out above all -- the surprising (at least to most on Wall Street) strength of corporate earnings at the end of the first quarter. THE CONVERGENCE OF BUSINESS AND GREEN The beginning of 2007 saw one of the warmest Januaries on record, but instead of snow, we were treated to a flurry of articles, announcements, conferences, and high level public speeches that demanded action on the part of countries, individuals and companies to address the issue of global warming. Appearing simultaneously but independently, FORTUNE, THE ECONOMIST and BUSINESSWEEK all ran lengthy cover stories describing the shift in corporate America to embrace socially responsible business practices as a better -- and potentially more profitable -- way of doing business. These articles were the most noticeable in a few weeks' span, but they were hardly a comprehensive list of the hundreds published about the greening of corporate America, not to mention Europe, Asia, and the world. By late January, whether or not "greening" was a mere zeitgeist was debatable. But on February 2, the Intergovernmental Panel on Climate Change issued their Fourth Assessment Report indicating that global warming was "unequivocal" -- a real and growing danger. In response, many dynamic, innovative companies are stepping up and looking for ways to solve the intractable issues of energy and the environment. Case in point is private equity firms Kohlberg Kravis Roberts and Texas Pacific Group, which -1- announced plans to acquire one of the largest public utility companies in the United States, TXU. What made the TXU deal distinctive were the conditions attached to its approval. Under the proposed terms, KKR and Texas Pacific agreed to several substantial concessions to environmental groups including scaling back plans to build new coal-fired power plants while aggressively working on so-called "clean coal" technologies (i.e. coal gasification) that lower and potentially eliminate emissions. They also agreed to increase R&D spending on alternate energy by as much as half a billion dollars. Goldman Sachs, who brokered the deal, pressured both sides to agree to the pro-environment change in the initial plans. The result was a deal hailed by Wall Street and the green lobby in equal measure. The convergence of vast amounts of private equity cash and environmentalism was a sign of the cultural, global shift taking place. Clearly, a number of the major investment banks already saw the long-term value in their companies "going green," and the rest of the financial world was swiftly joining them. THE RETURN OF VOLATILITY On February 27 global stock markets saw their most dramatic sell-off in years. Wall Street pundits were, as usual, divided. Some said it was a long-awaited correction and a sign of a weakening economy, while others said it was simply the return of volatility to what has been a fairly stable market. That said, nothing actually happened to trigger the declines. No sudden change in the economic forecasts. No critically bad economic or corporate news. However, there were rumors in Shanghai and Beijing that a government squeeze on credit and stock-speculation was imminent, and that alone was enough to send investors fleeing. But even after the sell-off, the Shenzhen market -- Shanghai's smaller sibling -- was still up more than 30% year-to-date, and well over 100% for the past 12 months. Hardly comforting if you bought on Monday before the sell-off, but not bad for those who had been in those markets for more than a couple of months. What happened? In our view this was a market phenomenon, a brief reminder of volatility after months of stability, and a bout of profit-taking and stepping aside that had been long overdue. Within days, fears of a "global bear market" dissipated as continued liquidity and private equity activity bolstered markets both in the United States and around the world. PRIVATE EQUITY AND FREE CASH FLOW For the first half of the fiscal year, private equity activity was truly impressive, with the purchase of troubled companies such as Chrysler that in earlier years would have made unlikely buyout targets. While no major company today -- public or private -- seems beyond private equity interests, there is one theme that unites both private equity and mutual fund investors: free cash flow. At Alger, as bottom-up, fundamental investors, one of the key metrics we use is the ability of companies to generate free cash flow. Why? Because free cash flow can fund further growth at a company, pay dividends, and allow for the buy-back of stock in order to return value to shareholders -- all of which, properly done, can contribute to earnings growth and shareholder value. It is a sign of both a strong -2- business model and disciplined financial management to be able to grow (at impressive rates) and not require constant infusions of new capital. We think that private equity firms buying public companies of all sizes and across many industries is not irrational. It is seizing an opportunity to acquire solid franchises that are generating strong cash flows at extraordinary valuations for the long-term investor. And the amount of private equity activity is another confirmation that globalization, broadly speaking, benefits U.S. corporate profits. THE EARNINGS SURPRISE At the beginning of 2007, the overwhelming consensus was that after several years of strong, double-digit earnings growth, the first quarter would show the companies of the Standard & Poor's 500(i) slowing to an anemic 3-4% growth rate. That assumption was based on several factors including the woes of the U.S. housing market, the slowing of the U.S. industrial economy, and the basic assumption that corporate earnings would have to "revert to the mean" of their multi-decade average (about 7%) and hence dip significantly. All of these assumptions proved to be wrong. When all was said and done at the end of reporting seasons for the first quarter of 2007, the S&P companies registered earnings growth of about 9%, and nearly three-quarters of all companies have reported positive "surprises" relative to expectations. Indeed, at the tail end of May, the S&P broke its own record, reaching heights last seen seven years ago during the heady days of the technology boom -- and this despite another minor overnight sell-off in China. So what happened? It's a case of our friends back at the Old World struggling to explain New World geography in terms they're familiar with -- even if those terms don't quite fit anymore. True, most top-down analysts were correct about their predictions of the slowdown of the U.S. economy. In fact, first quarter GDP growth was even worse than had been predicted, registering a paltry 0.6% growth on weak exports and slower corporate capital expenditures. But the experts also continued to use the United States and past economic patterns as a proxy for predicting earnings for U.S.-listed companies. This made perfect sense for the last half of the 20th century, when the United States was the dominant economic power globally and U.S. corporations reflected that strength. But while the United States remains far and away the largest economy, it is simply no longer the sole engine of growth or the fastest. As such, the U.S. economy and economic data are no longer a good proxy for how companies will do. Instead, they may well mislead investors and analysts to underestimate the growth of U.S.-listed companies. We have said for the past three years -- for most of this decade, in fact -- that the U.S. markets have been good markets for "stock pickers" in that they have not been either notably frothy or notably flighty (occasional junctures notwithstanding). What is now emerging, we believe, is a global "stock picker" market, but many people are still playing markets rather than stocks. That leaves some markets and many stocks, especially U.S.-listed ones and U.S.-listed growth equities above all, undervalued and less loved than they should be. And that, of course, represents an opportunity to pick and choose quality growth companies while the rest of the investing community focuses their eyes elsewhere. -3- PORTFOLIO MATTERS ALGER LARGECAP GROWTH FUND The Alger LargeCap Growth Fund gained 10.08% for the six months ended April 30, 2007, compared with a return of 8.42% for the Russell 1000 Growth Index(ii). Information Technology represented an average weight of 27.62%. The Fund was slightly overweight compared to the benchmark, but outperformed in this sector. Strong performers included Memc Electronic Materials, Inc., a global supplier of silicon wafers to the semiconductor industry, Nintendo Co. Ltd. ADR, and Apple Computer, Inc. In the Financials sector, at an average weight of 9.46%, the Fund was overweight but outperformed the benchmark. Intercontinental Exchange, Inc., a global electronic marketplace for trading futures and OTC energy contracts, Jones Lang LaSalle Inc., a leader in real estate services and money management, and the investment banking firm of Goldman Sachs were the top performers in this sector. The Fund was overweight and outperformed the benchmark in the Energy sector, at an average weight 6.13%. Key contributors included National-Oilwell Varco Inc., a prominent oil and gas drilling company, Valero Energy Corp., the largest refiner in North America, and Schlumberger Ltd., a global oilfield and information services company. At an average weight of 13.30% the Fund was underweight in the Consumer Discretionary sector and somewhat underperformed the benchmark. XM Satellite Radio Holdings, Inc., Sony Corp., and Laureate Education, Inc., an international network of accredited campus-based and online universities, were solid performers in this sector. International Game Technology, producers of slot and video gaming machines, Netflix, Inc., and the retail chain Best Buy Co., Inc. performed poorly. ALGER SMALLCAP GROWTH FUND The Alger SmallCap Growth Fund gained 10.23% for the six months ended April 30, 2007, compared to the Russell 2000 Growth Index(iii) which returned 7.41%. In the Information Technology sector, the Fund, at an average weight of 22.86%, was slightly underweight the benchmark, but outperformed. Top performers in this sector were Synchronoss Technologies, Inc., a provider of on-demand transaction management solutions, WebEx Communications, Inc., the leader in online meeting applications, and Omniture, Inc., a provider of online business optimization services. At an average weight of 13.25%, the Fund was underweight but outperformed the benchmark in Industrials. Teletech Holdings, Inc., a global business process company that provides outsourcing solutions was the prominent performer in this sector, followed by BE Aerospace, Inc., the world's foremost manufacturer of cabin interior products for commercial aircraft, Bucyrus International, Inc., the global leader for the surface mining industry, and RBC Bearings, Inc., a manufacturer of bearing products. In the Consumer Discretionary sector, the Fund, at an average weight of 15.70% was marginally underweight the benchmark but outperformed. Top performers in this sector were the travel web site priceline.com, Inc., Aeropostale, Inc., and Focus -4- Media Holding, Ltd. ADR, the largest outdoor TV advertising network in China. Coldwater Creek, Inc., a clothing company showed a weaker performance in this sector. At an average weight of 7.48%, the Fund was overweight and outperformed the benchmark in the Energy sector. Top performers were SXR Uranium One, Inc., a premier mining company, Dril-Quip, Inc., one of the world's leading manufacturers of precision-engineered offshore drilling and production equipment, and Petrobank Energy & Resources, Ltd., a Calgary-based oil and natural gas exploration and production company. ALGER BALANCED FUND The Alger Balanced Fund gained 7.33% for the six months ended April 30, 2007, underperforming the Russell 1000 Growth Index return of 8.42%. The Fund's largest sector exposure was in Information Technology. Weighting, at an average weight of 26.87%, closely mirrored the benchmark but the Fund outperformed with contributors including Memc Electronic Materials, Inc., Nintendo Co. Ltd. ADR, and Apple Computer, Inc. Our holdings in the Financials sector, at an average weight of 9.54%, were slightly overweight but outperformed the benchmark. IntercontinentalExchange, Inc., Goldman Sachs Group, Inc., and Jones Lang LaSalle, Inc. were the top performers. In the Energy sector, at an average weight of 6.18%, the Fund was slightly overweight but outperformed the benchmark. National-Oilwell Varco, Inc., Valero Energy Corp., and Schlumberger Ltd. were the outstanding fund performers in this sector. Fund holdings in the Consumer Discretionary sector, at an average weight of 13.10%, were underweight the benchmark and underperformed. Detracting performers included International Game Technology, Netflix, Inc., and Best Buy Co., Inc. The Fixed Income portion of the balanced fund benefited from good issue selection, taking advantage of change of control language covenants to protect against Mergers and Acquisition activity and diversification across sectors. For the six months ended April 30, 2007, the Fixed Income portion of the Fund returned 2.56% versus the Lehman Brothers Government/Credit Bond Index(iv) return of 2.48%. As of April 30, 2007, 35% of the fixed income portfolio was in corporate securities, 40% in Mortgage/ABS Product, 14% in Treasuries, 11% in Agencies and 0% in cash. ALGER MIDCAP GROWTH FUND For the six months ended April 30, 2007, the Alger MidCap Growth Fund gained 15.67%, compared to the Russell MidCap Growth Index(v) with a return of 11.76%. The Fund, at an average weight of 20.61%, had a significant exposure in Information Technology. This weighting was slightly over the benchmark but outperformed. Memc Electronic Materials, Inc. was the strongest contributor in this sector, followed by Nintendo Co. Ltd. ADR, and Tessera Technologies, Inc. Isilon Systems, Inc., a modular network storage solutions developer, showed a weaker performance in this sector. -5- In Consumer Discretionary the Fund had an average weight of 22.59%, similar to the benchmark but outperforming. The auction house Sothebys Holding Inc., Focus Media Holding, Ltd. ADR, and the retail chain GameStop Corp., were the top performers in this sector. At an average weight of 12.79%, the Fund was slightly underweight the benchmark in the Industrials sector, but outperformed. Notable contributors included Armor Holdings, Inc., a manufacturer and provider of specialized security products, BE Aerospace, Inc., and Teletech Holdings, Inc. The Fund was weighted similarly to the benchmark, at an average weight of 7.34%, in the Energy sector but outperformed. Strong contributors included National-Oilwell Varco, Inc., and Cameron International Corp., a leading oil and gas products and services provider. Detractors included BJ Services Co., a provider of pressure pumping, cementing, stimulation and coiled tubing services worldwide, and Patterson-UTI Energy, Inc., the second largest onshore contract drilling company in North America. ALGER CAPITAL APPRECIATION FUND The Alger Capital Appreciation Fund gained 16.27% for the six months ended April 30, 2007, outperforming the Russell 3000 Growth Index(vi) return of 8.33%. Information Technology represented an average weight of 32.90% of the Fund's holdings, an overweight to the benchmark, but with outperformance. Strong contributions including Memc Electronic Materials, Inc., ON Semiconductor Corp., a provider of semiconductor components, and DealerTrack Holdings, Inc., a provider of on-demand software and data solutions for the automotive retail industry. In the Industrials sector, the Fund, at an average weight of 8.47%, was underweight compared to the benchmark but showed outperformance. The top performers were Armor Holdings, Inc., Terex Corp. and BE Aerospace, Inc. At an average weight of 10.17%, the Fund was overweight the benchmark in the Energy sector and outperformed. Valero Energy Corp., Petrobank Energy & Resources, Ltd., and Cameco Corp., the world's largest publicly traded uranium company, were top performers. In Consumer Discretionary, the Fund, at an average weight of 10.72%, was somewhat underweight the benchmark but outperformed. Focus Media Holding, Ltd. ADR, was a top performer as was the retailer GameStop Corp., Detractors in this sector included NutriSystem, Inc., Circuit City Stores, Inc., and Best Buy Co., Inc. ALGER HEALTH SCIENCES FUND The Alger Health Sciences Fund gained 6.71% for the six months ended April 30, 2007, underperforming the S&P 500 Index return of 8.60%. Overall, the Mergers and Acquisitions and LBO themes remained a focus for the Healthcare industry in all sub-sectors, and in some cases, keeping valuations at a floor. The Pharmaceuticals sector continued to shine as valuations proved to be low and companies' fundamental performance improved noticeably. Greater top line growth and new product introductions all contributed to earnings outperformance. Managed Care, Healthcare IT and Services remained a highlight, and Medicare continued to -6- drive profitability, sustaining relatively fair valuations compared to the overall market. Biotech delivered expected alpha generation, and Medical Equipment and Supplies improved as a subsector as valuations cycled from being egregiously expensive over the past 18-24 months to finally being reasonable after product recalls and other headline risks appeared to be less of a factor. Among the top pharmaceutical performers were Schering-Plough Corporation, a global research-based pharmaceutical company, Regeneron Pharmaceuticals, Inc., a developer of therapeutic medicines for the treatment of serious medical conditions, and Gilead Sciences, Inc., a biopharmaceutical company that develops innovative therapeutics in areas of unmet medical need. Among the poorer pharmaceutical performers were Nuvelo, Inc., a developer of commercialized therapeutics, Adolor Corp., a bio-pharmaceutical company specializing in the development of prescription pain management products, and Amgen, Inc., a leading human therapeutics company in the biotechnology industry. Strong contributors in Health Care Equipment and Services were Medco Health Solutions, Inc., a leading pharmacy benefit manager with the nation's largest mail order pharmacy operations, Wellcare Group, Inc., a leading provider of government-sponsored health plans, and Baxter International, Inc., a medical products and services company that focuses on critical therapies for life-threatening conditions. ALGER SMALLCAP AND MIDCAP GROWTH FUND The Alger SmallCap and MidCap Growth Fund gained 14.55% for the six months ended April 30, 2007, outperforming the Russell 2500 Growth Index(vii) return of 10.62%. In the Consumer Discretionary sector, the Fund, at an average weight of 17.79%, approximated the benchmark but outperformed it. Top performers were Focus Media Holding Ltd. ADR, Priceline.com, Inc., and the retailer Urban Outfitters, Inc. The Fund's holdings in the Information Technology sector, at an average weight of 19.92% was underweight the benchmark but outperformed it. Synchronoss Technologies, Inc., Omniture, Inc., a leader in online business optimization services, and WebEx Communications, Inc. were all top performers. The Fund, at an average weight of 12.96%, was underweight but outperformed the benchmark in the Industrials sector. Top performers in this sector were BE Aerospace, Inc., Bucyrus International, Inc., and FTI Consulting, Inc., which provides corporate finance, economic, and forensic and litigation consulting services to clients. In the Energy sector, the Fund, with an average weight of 7.42%, had similar weight to the benchmark but outperformed it. SXR Uranium One, Inc., Grant Prideco, Inc., the world's leading supplier of drill pipe and stem products, and Petrobank Energy & Resources Ltd. comprised the top performers in this sector. ALGER CORE FIXED INCOME FUND The Fund benefited from good issue selection, taking advantage of change of control language covenants to protect against Mergers and Acquisition activity and diversification across sectors. For the six months ending April 30, 2007, the Fund returned 2.27% compared to the Lehman Brothers Intermediate U.S. -7- Government/Credit Bond Index(viii) return of 2.59%. 40% of all holdings in the Fund were in Corporates, 31% in Mortgage/ABS Products, 14% in Treasuries, 5% in Agencies, and 10% in cash. IN SUMMARY Six months ago, we surmised that braving the waters of the new global economy would provide both challenges and opportunities. Indeed, the first half of the year bore this out and often rewarded the innovative, dynamic companies and investors that embraced those changes. Going forward, we expect more of the same as the global, economic landscape continues to expand and evolve. As the first six months of this fiscal year come to a close, we would like to thank you for continuing to journey with us and entrusting us with your investing needs. Respectfully submitted, /s/ Daniel C. Chung /s/ Zachary Karabell Daniel C. Chung Zachary Karabell CHIEF INVESTMENT OFFICER CHIEF ECONOMIST ---------- (i) Standard & Poor's 500 Index is an index of the 500 largest and most profitable companies in the United States. (ii) The Russell 1000 Growth Index is an unmanaged index designed to measure the performance of the largest 1000 companies in the Russell 3000 Index with higher price-to-book ratios and higher forecasted growth values. The Russell 3000 Index measures the performance of the 3000 largest U.S. companies based on the total market capitalization, which represents 98% of the U.S. Equity Market. (iii) The Russell 2000 Growth Index is an unmanaged index designed to measure the performance of the 2000 smallest companies in the Russell 3000 Index with higher price-to-book ratios and higher forecasted growth values. (iv) Lehman Brothers Government/Credit Bond Index is an index designed to track performance of government and corporate bonds. (v) The Russell Midcap Growth Index is an unmanaged index designed to measure the performance of the 800 smallest companies in the Russell 1000 Index with higher price-to-book ratios and higher forecasted growth values. (vi) The Russell 3000 Growth Index is an unmanaged index designed to measure the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. (vii) The Russell 2500 Growth Index is an unmanaged index designed to measure the performance of the 2500 smallest companies in the Russell 3000 Index with higher price-to-book ratios and higher forecasted growth values. (viii) Lehman Brothers Intermediate U.S. Government/Credit Bond Index is an index designed to track performance of intermediate government and corporate bonds. Investors cannot invest directly in an index. Index performance does not reflect the deduction for fees, expenses or taxes. -8- This report and the financial statements contained herein are submitted for the general information of shareholders of the Funds. This report is not authorized for distribution to prospective investors in the Funds unless proceeded or accompanied by an effective prospectus for the Fund. Funds returns represent the semi-annual period return of Class B shares prior to the deduction of any sales charges. The performance data quoted represents past performance, which is not an indication or guarantee of future results. The investment return and principal value of an investment in a fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For performance data current to the most recent month-end, visit us at WWW.ALGER.COM, or call us at (800) 992-3863. The views and opinions of the Funds' management in this report are as of the date of the Shareholders letter and are subject to change at any time subsequent to this date. There is no guarantee that any of the assumptions that formed the basis for the opinions stated herein are accurate or that they will materialize. Moreover, the information forming the basis for such assumptions is from sources believed to be reliable; however, there is no guarantee that such information is accurate. Any securities mentioned, whether owned in a fund or otherwise, are considered in the context of the construction of an overall portfolio of securities and therefore reference to them should not be construed as a recommendation or offer to purchase or sell any such security. Inclusion of such securities in a fund and transactions in such securities, if any, may be for a variety of reasons, including without limitation, in response to cash flows, inclusion in a benchmark and risk control. The reference to a specific security should also be understood in such context and not viewed as a statement that the security is a significant holding in a portfolio. Please refer to the Schedule of Investments for each fund which is included in this report for a complete list of fund holdings as of April 30, 2007. A WORD ABOUT RISK Growth stocks tend to be more volatile than other stocks as the price of growth stocks tends to be higher in relation to their companies' earnings and may be more sensitive to market, political and economic developments. Investing in the stock market involves gains and losses and may not be suitable for all investors. Stocks of small- and mid-sized companies are subject to greater risk than stocks of larger, more established companies owing to such factors as limited liquidity, inexperienced management, and limited financial resources. Funds that invest in fixed-income securities, such as the Balanced Fund, are subject to the fixed-income securities' sensitivity to interest rate movements; their market values tend to fall when interest rates rise and to rise when interest rates fall. These funds are also subject to the risk of a decline in the value of the fund's securities in the event of an issue's falling credit rating or actual default. Funds that participate in leveraging, such as the Capital Appreciation, SmallCap and MidCap and Health Sciences Funds, are subject to the risk that borrowing money to leverage will exceed the returns for securities purchased or that the securities purchased may actually go down in value; thus, the fund's net asset value -9- can decrease more quickly than if the fund had not borrowed. For a more detailed discussion of the risks associated with a Fund, please see the Funds' Prospectus. MUTUAL FUNDS ARE NOT INSURED BY THE FDIC, ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY BANKS, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. BEFORE INVESTING, CAREFULLY CONSIDER THE FUND'S INVESTMENT OBJECTIVE, RISKS AND CHARGES AND EXPENSES. THE FUNDS' PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUNDS, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT (800) 992-3863, OR VISITING OUR WEBSITE AT WWW.ALGER.COM, OR CONTACTING THE FUNDS' DISTRIBUTOR, FRED ALGER & COMPANY, INCORPORATED, 111 FIFTH AVENUE, NEW YORK 10003. MEMBER NYSE, SIPC READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. -10- -------------------------------------------------------------------------------- FUND PERFORMANCE AS OF 3/31/07 -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS --------------------------------------------------------------------------------
-------------------------------------------------------------------------------------- 1 5 10 SINCE YEAR YEARS YEARS INCEPTION -------------------------------------------------------------------------------------- ALGER LARGECAP CLASS A (Inception 1/1/97) 0.78% 2.40% 6.99% 6.75% ALGER LARGECAP CLASS B (Inception 11/11/86) 0.64% 2.37% 6.92% 11.09% ALGER LARGECAP CLASS C (Inception 8/1/97) 4.65% 2.74% n/a 4.25% -------------------------------------------------------------------------------------- ALGER SMALLCAP CLASS A (Inception 1/1/97) 3.45% 10.38% 3.86% 2.54% ALGER SMALLCAP CLASS B (Inception 11/11/86) 3.23% 10.48% 3.82% 10.15% ALGER SMALLCAP CLASS C (Inception 8/1/97) 7.41% 10.78% n/a 1.24% -------------------------------------------------------------------------------------- ALGER BALANCED CLASS A (Inception 1/1/97) 0.68% 3.51% 8.20% 7.93% ALGER BALANCED CLASS B (Inception 6/1/92) 0.47% 3.52% 8.13% 8.41% ALGER BALANCED CLASS C (Inception 8/1/97) 4.49% 3.86% n/a 6.10% -------------------------------------------------------------------------------------- ALGER MIDCAP CLASS A (Inception 1/1/97) 0.72% 7.44% 12.25% 11.28% ALGER MIDCAP CLASS B (Inception 5/24/93) 0.82% 7.52% 12.15% 14.42% ALGER MIDCAP CLASS C (Inception 8/1/97) 4.59% 7.81% n/a 9.72% -------------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION CLASS A (Inception 1/1/97) 11.68% 6.32% 8.85% 8.19% ALGER CAPITAL APPRECIATION CLASS B (Inception 11/11/86) 12.01% 6.36% 8.79% 12.92% ALGER CAPITAL APPRECIATION CLASS C (Inception 8/1/97) 16.03% 6.67% n/a 5.70% -------------------------------------------------------------------------------------- ALGER HEALTH SCIENCES CLASS A (Inception 5/1/02) 1.82% n/a n/a 14.12% ALGER HEALTH SCIENCES CLASS B (Inception 5/1/02) 1.72% n/a n/a 14.31% ALGER HEALTH SCIENCES CLASS C (Inception 5/1/02) 5.72% n/a n/a 14.55% -------------------------------------------------------------------------------------- ALGER SMALLCAP AND MIDCAP CLASS A (Inception 5/8/02) 6.00% n/a n/a 11.05% ALGER SMALLCAP AND MIDCAP CLASS B (Inception 5/8/02) 6.12% n/a n/a 11.24% ALGER SMALLCAP AND MIDCAP CLASS C (Inception 5/8/02) 10.12% n/a n/a 11.51% -------------------------------------------------------------------------------------- ALGER CORE FIXED-INCOME CLASS A (Inception 3/1/06) 0.03% n/a n/a -0.25% ALGER CORE FIXED-INCOME CLASS B (Inception 3/1/06) -0.82% n/a n/a -1.11% ALGER CORE FIXED-INCOME CLASS C (Inception 3/1/06) 3.16% n/a n/a 3.48%
-11- -------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND FUND HIGHLIGHTS THROUGH APRIL 30, 2007 (UNAUDITED) -------------------------------------------------------------------------------- HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES -- 10 YEARS ENDED 4/30/07 [LINE GRAPH] Ending Value Alger LargeCap Growth Class B: $19,523 Ending Value Russell 1000 Growth Index: $16,797 Alger LargeCap Russell 1000 Growth Class B Growth Index 5/1/1997 $10,000 $10,000 $11,905 $11,545 10/31/1998 $14,346 $14,389 $19,986 $19,317 10/31/2000 $21,433 $21,119 $15,437 $12,686 10/31/2002 $11,562 $10,197 $14,459 $12,421 10/31/2004 $14,615 $12,842 $16,826 $13,975 10/31/2006 $17,724 $15,493 4/30/2007 $19,523 $16,797 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in the Alger LargeCap Growth Class B shares and the Russell 1000 Growth Index (an unmanaged index of common stocks) for the ten years ended April 30, 2007. Figures for the Alger LargeCap Growth Class B shares and the Russell 1000 Growth Index include reinvestment of dividends. Performance for the Alger LargeCap 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 4/30/07+ -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS -------------------------------------------------------------------------------- 1 5 10 SINCE YEAR YEARS YEARS INCEPTION -------------------------------------------------------------------------------- CLASS A (INCEPTION 1/1/97) 3.23% 4.50% 6.99% 7.07% Russell 1000 Growth Index 12.26% 6.23% 5.32% 5.86% -------------------------------------------------------------------------------- CLASS B (INCEPTION 11/11/86) 3.17% 4.51% 6.92% 11.24% Russell 1000 Growth Index 12.26% 6.23% 5.32% 10.32% -------------------------------------------------------------------------------- CLASS C (INCEPTION 8/1/97) 7.08% 4.83% -- 4.60% Russell 1000 Growth Index 12.26% 6.23% -- 3.39% -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NOT AN INDICATION OR A GUARANTEE OF FUTURE RESULTS. THE FUND'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE FUND'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.ALGER.COM OR CALL US AT (800) 992-3863. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. -12- -------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND FUND HIGHLIGHTS THROUGH APRIL 30, 2007 (UNAUDITED) -------------------------------------------------------------------------------- HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES -- 10 YEARS ENDED 4/30/07 [LINE GRAPH] Ending Value Russell 2000 Growth Index: $19,136 Ending Value Alger SmallCap Growth Class B: $15,094 Alger SmallCap Russell 2000 Growth Class B Growth Index 5/1/1997 $10,000 $10,000 $12,735 $13,070 10/31/1998 $11,253 $10,999 $14,865 $14,219 10/31/2000 $14,805 $16,517 $ 7,851 $11,312 10/31/2002 $ 6,266 $ 8,873 $ 8,760 $13,002 10/31/2004 $ 9,191 $13,722 $11,380 $15,218 10/31/2006 $13,695 $17,817 4/30/2007 $15,094 $19,136 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in the Alger SmallCap Growth Class B shares and the Russell 2000 Growth Index (an unmanaged index of common stocks) for the ten years ended April 30, 2007. Figures for both the Alger SmallCap Growth Class B shares and the Russell 2000 Growth Index, include reinvestment of dividends. Performance for the Alger SmallCap 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 4/30/07+ -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS -------------------------------------------------------------------------------- 1 5 10 SINCE YEAR YEARS YEARS INCEPTION -------------------------------------------------------------------------------- CLASS A (INCEPTION 1/1/97) 5.14% 11.84% 4.24% 2.81% Russell 2000 Growth Index 4.52% 8.91% 6.71% 5.23% -------------------------------------------------------------------------------- CLASS B (INCEPTION 11/11/86) 5.23% 11.93% 4.20% 10.26% Russell 2000 Growth Index 4.52% 8.91% 6.71% 7.72% -------------------------------------------------------------------------------- CLASS C (INCEPTION 8/1/97) 9.21% 12.22% -- 1.53% Russell 2000 Growth Index 4.52% 8.91% -- 4.46% -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NOT AN INDICATION OR A GUARANTEE OF FUTURE RESULTS. THE FUND'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE FUND'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.ALGER.COM OR CALL US AT (800) 992-3863. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. -13- -------------------------------------------------------------------------------- ALGER BALANCED FUND FUND HIGHLIGHTS THROUGH APRIL 30, 2007 (UNAUDITED) -------------------------------------------------------------------------------- HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES -- 10 YEARS ENDED 4/30/07 [LINE GRAPH] Ending Value Alger Balanced Class B: $21,711 Ending Value Lehman Brothers Gov't/Credit Bond Index: $18,624 Ending Value Russell 1000 Growth Index: $16,797 Alger Balanced Russell 1000 Lehman Brothers Class B Growth Index Gov't/Credit Bond Index 5/1/1997 $10,000 $10,000 $10,000 $11,492 $11,545 $10,741 10/31/1998 $13,429 $14,389 $11,845 $17,662 $19,317 $11,767 10/31/2000 $19,314 $21,119 $12,604 $17,003 $12,686 $14,536 10/31/2002 $14,818 $10,197 $15,331 $17,361 $12,421 $16,278 10/31/2004 $17,913 $12,842 $17,188 $19,774 $13,975 $17,328 10/31/2006 $20,645 $15,493 $18,172 4/30/2007 $21,711 $16,797 $18,624 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in Alger Balanced Class B shares, the Russell 1000 Growth Index (an unmanaged index of common stocks) and the Lehman Brothers Government/Credit Bond Index (an unmanaged index of government and corporate bonds) for the ten years ended April 30, 2007. Figures for the Alger Balanced Class B shares, the Russell 1000 Growth Index and the Lehman Brothers Government/Credit Bond Index 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 4/30/07+ -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS -------------------------------------------------------------------------------- 1 5 10 SINCE YEAR YEARS YEARS INCEPTION -------------------------------------------------------------------------------- CLASS A (INCEPTION 1/1/97) 2.66% 4.71% 8.13% 8.14% Russell 1000 Growth Index 12.26% 6.23% 5.32% 5.86% Lehman Brothers Gov't/Credit Bond Index 7.34% 5.29% 6.42% 6.26% -------------------------------------------------------------------------------- CLASS B (INCEPTION 6/1/92) 2.54% 4.72% 8.06% 8.56% Russell 1000 Growth Index 12.26% 6.23% 5.32% 8.75% Lehman Brothers Gov't/Credit Bond Index 7.34% 5.29% 6.42% 6.68% -------------------------------------------------------------------------------- CLASS C (INCEPTION 8/1/97) 6.55% 5.05% -- 6.32% Russell 1000 Growth Index 12.26% 6.23% -- 3.39% Lehman Brothers Gov't/Credit Bond Index 7.34% 5.29% -- 6.03% -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NOT AN INDICATION OR A GUARANTEE OF FUTURE RESULTS. THE FUND'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE FUND'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.ALGER.COM OR CALL US AT (800) 992-3863. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. -14- -------------------------------------------------------------------------------- ALGER MIDCAP GROWTH FUND FUND HIGHLIGHTS THROUGH APRIL 30, 2007 (UNAUDITED) -------------------------------------------------------------------------------- HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES -- 10 YEARS ENDED 4/30/07 [LINE GRAPH] Ending Value Alger Midcap Growth Class B: $32,217 Ending Value Russell Midcap Growth Index: $25,114 Alger MidCap Russell Midcap Growth Class B Growth Index 5/1/1997 $10,000 $10,000 $12,378 $12,124 10/31/1998 $13,151 $12,418 $17,403 $17,097 10/31/2000 $25,481 $23,708 $19,747 $13,565 10/31/2002 $15,543 $11,176 $21,602 $15,569 10/31/2004 $22,337 $16,935 $25,704 $19,626 10/31/2006 $24,910 $22,473 4/30/2007 $32,217 $25,114 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in Alger MidCap Growth Class B shares and Russell Midcap Growth Index (an unmanaged index of common stocks) for the ten years ended April 30, 2007. Figures for the Alger MidCap Growth Class B shares and Russell Midcap Growth Index 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 4/30/07+ -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS -------------------------------------------------------------------------------- 1 5 10 SINCE YEAR YEARS YEARS INCEPTION -------------------------------------------------------------------------------- CLASS A (INCEPTION 1/1/97) 4.53% 8.81% 12.49% 11.57% Russell Midcap Growth Index 11.11% 11.60% 9.65% 9.18% -------------------------------------------------------------------------------- CLASS B (INCEPTION 5/24/93) 4.59% 8.90% 12.41% 14.62% Russell Midcap Growth Index 11.11% 11.60% 9.65% 10.92% -------------------------------------------------------------------------------- CLASS C (INCEPTION 8/1/97) 8.50% 9.18% -- 10.04% Russell Midcap Growth Index 11.11% 11.60% -- 7.62% -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NOT AN INDICATION OR A GUARANTEE OF FUTURE RESULTS. THE FUND'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE FUND'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.ALGER.COM OR CALL US AT (800) 992-3863. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. -15- -------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION FUND FUND HIGHLIGHTS THROUGH APRIL 30, 2007 (UNAUDITED) -------------------------------------------------------------------------------- HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES -- 10 YEARS ENDED 4/30/07 [LINE GRAPH] Ending Value Alger Capital Appreciation Class B: $23,039 Ending Value Russell 3000 Growth Index: $16,896 Alger Capital Russell 3000 Appreciation Class B Growth Index 5/1/1997 $10,000 $10,000 $12,020 $11,676 10/31/1998 $13,205 $14,057 $21,523 $18,923 10/31/2000 $24,019 $20,668 $15,097 $12,537 10/31/2002 $11,361 $10,061 $14,005 $12,410 10/31/2004 $14,068 $12,847 $16,777 $14,002 10/31/2006 $19,825 $15,596 4/30/2007 $23,039 $16,896 The chart above illustrates the growth in value of a hypothetical $10,000 investment made in Alger Capital Appreciation Class B shares and the Russell 3000 Growth Index (an unmanaged index of common stocks) for the ten years ended April 30, 2007. Figures for the Alger Capital Appreciation Class B shares and the Russell 3000 Growth Index 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 4/30/07+ -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS -------------------------------------------------------------------------------- 1 5 10 SINCE YEAR YEARS YEARS INCEPTION -------------------------------------------------------------------------------- CLASS A (INCEPTION 1/1/97) 15.77% 8.40% 8.77% 8.53% Russell 3000 Growth Index 11.52% 6.43% 5.38% 5.74% -------------------------------------------------------------------------------- CLASS B (INCEPTION 11/1/93) 16.27% 8.45% 8.70% 13.16% Russell 3000 Growth Index 11.52% 6.43% 5.38% 8.63% -------------------------------------------------------------------------------- CLASS C (INCEPTION 8/1/97) 20.17% 8.72% -- 6.06% Russell 3000 Growth Index 11.52% 6.43% -- 3.43% -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NOT AN INDICATION OR A GUARANTEE OF FUTURE RESULTS. THE FUND'S AVERAGE ANNUAL TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE FUND'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.ALGER.COM OR CALL US AT (800) 992-3863. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. -16- -------------------------------------------------------------------------------- ALGER HEALTH SCIENCES FUND FUND HIGHLIGHTS THROUGH APRIL 30, 2007 (UNAUDITED) -------------------------------------------------------------------------------- HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES FROM 5/01/02 TO 4/30/07 [LINE GRAPH] Ending Value Alger Health Sciences Class B: $20,301 Ending Value S&P 500 Index: $15,064 Alger Health Sciences Class B S&P 500 Index 5/1/2002 $10,000 $10,000 10/31/2002 $ 9,260 $ 8,298 10/31/2003 $11,780 $10,025 10/31/2004 $13,300 $10,968 10/31/2005 $16,952 $11,923 10/31/2006 $19,213 $13,873 4/30/2007 $20,501 $15,064 The chart above illustrates the change in value of a hypothetical $10,000 investment made in Alger Health Sciences Class B shares, with a contingent deferred sales charge of 2%, and the Standard & Poor's 500 Index (an unmanaged index of common stocks) on May 1, 2002, the inception date of the Alger Health Sciences Fund, through April 30, 2007. Figures for both the Alger Health Sciences Class B shares and the Standard & Poor's 500 Index include reinvestment of dividends. Performance for the Alger Health Sciences 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 4/30/07+ -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS -------------------------------------------------------------------------------- 1 SINCE YEAR INCEPTION -------------------------------------------------------------------------------- CLASS A (INCEPTION 5/1/02) 11.61% 15.04% S&P 500 Index 15.25% 8.54% -------------------------------------------------------------------------------- CLASS B (INCEPTION 5/1/02) 11.89% 15.22% S&P 500 Index 15.25% 8.54% -------------------------------------------------------------------------------- CLASS C (INCEPTION 5/1/02) 15.96% 15.45% S&P 500 Index 15.25% 8.54% -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NOT AN INDICATION OR A GUARANTEE OF FUTURE RESULTS. THE FUND'S TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE FUND'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.ALGER.COM OR CALL US AT (800) 992-3863. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. -17- -------------------------------------------------------------------------------- ALGER SMALLCAP AND MIDCAP GROWTH FUND FUND HIGHLIGHTS THROUGH APRIL 30, 2007 (UNAUDITED) -------------------------------------------------------------------------------- HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES FROM 5/8/02 TO 4/30/07 [LINE GRAPH] Ending Value Alger SmallCap and MidCap Growth Class B: $17,415 Ending Value Russell 2500 Growth Index: $16,621 Alger SmallCap and MidCap Growth Russell 2500 Class B Growth Index 5/8/2002 $10,000 $10,000 10/31/2002 $ 7,630 $ 7,434 10/31/2003 $ 9,870 $10,761 10/31/2004 $10,270 $11,422 10/31/2005 $12,832 $13,001 10/31/2006 $15,377 $15,025 4/30/2007 $17,615 $16,621 The chart above illustrates the change in value of a hypothetical $10,000 investment made in Alger SmallCap and MidCap Growth Class B shares, with a contingent deferred sales charge of 2%, and the Russell 2500 Growth Index (an unmanaged index of common stocks) on May 8, 2002, the inception date of the Alger SmallCap and MidCap Growth Fund, through April 30, 2007. Figures for both the Alger SmallCap and MidCap Growth Class B shares and the Russell 2500 Growth Index include reinvestment of dividends. Performance for the Alger SmallCap and 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 4/30/07+ -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS -------------------------------------------------------------------------------- 1 SINCE YEAR INCEPTION -------------------------------------------------------------------------------- CLASS A (INCEPTION 5/8/02) 7.89% 11.61% Russell 2500 Growth Index 7.32% 10.74% -------------------------------------------------------------------------------- CLASS B (INCEPTION 5/8/02) 8.12% 11.79% Russell 2500 Growth Index 7.32% 10.74% -------------------------------------------------------------------------------- CLASS C (INCEPTION 5/8/02) 12.03% 12.04% Russell 2500 Growth Index 7.32% 10.74% -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NOT AN INDICATION OR A GUARANTEE OF FUTURE RESULTS. THE FUND'S TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE FUND'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.ALGER.COM OR CALL US AT (800) 992-3863. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. -18- -------------------------------------------------------------------------------- ALGER CORE FIXED-INCOME FUND FUND HIGHLIGHTS THROUGH APRIL 30, 2007 (UNAUDITED) -------------------------------------------------------------------------------- HYPOTHETICAL $10,000 INVESTMENT IN CLASS B SHARES FROM 3/01/06 TO 4/30/07 [LINE GRAPH] Ending Value Alger Core Fixed-Income Class B: $9,940 Ending Value Lehman Brothers Intermediate Gov't/Credit Bond Index: $10,618 Lehman Brothers Alger Core Intermediate Gov't/ Fixed-Income Class B Credit Bond Index 3/1/2006 $10,000 $10,000 10/31/2006 $10,208 $10,350 4/30/2007 $ 9,940 $10,618 The chart above illustrates the change in value of a hypothetical $10,000 investment made in Alger Core Fixed-Income Class B shares, with a contingent deferred sales charge of 5%, and the Lehman Brothers Intermediate Gov't/Credit Bond Index (an unmanaged index of government and corporate bonds) on March 1, 2006, the inception date of the Alger Core Fixed-Income Fund, through April 30, 2007. Figures for both the Alger Core Fixed-Income Class B shares and the Lehman Brothers Intermediate Gov't/Credit Bond Index include reinvestment of dividends. Performance for the Alger Core Fixed-Income 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 4/30/07+ -------------------------------------------------------------------------------- TOTAL RETURNS -------------------------------------------------------------------------------- 1 SINCE YEAR INCEPTION -------------------------------------------------------------------------------- CLASS A (INCEPTION 3/1/06) 0.66% 0.22% Lehman Brothers Int. Gov't/Credit Bond Index 6.59% 5.28% -------------------------------------------------------------------------------- CLASS B (INCEPTION 3/1/06) (0.22)% (0.52)% Lehman Brothers Int. Gov't/Credit Bond Index 6.59% 5.28% -------------------------------------------------------------------------------- CLASS C (INCEPTION 3/1/06) 3.92% 3.74% Lehman Brothers Int. Gov't/Credit Bond Index 6.59% 5.28% -------------------------------------------------------------------------------- THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NOT AN INDICATION OR A GUARANTEE OF FUTURE RESULTS. THE FUND'S TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. THE GRAPH AND TABLE ABOVE DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD HAVE PAID ON FUND DISTRIBUTIONS OR ON THE REDEMPTION OF FUND SHARES. INVESTMENT RETURN AND PRINCIPAL WILL FLUCTUATE AND THE FUND'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.ALGER.COM OR CALL US AT (800) 992-3863. + RETURNS REFLECT MAXIMUM INITIAL SALES CHARGES ON CLASS A SHARES AND APPLICABLE CONTINGENT DEFERRED SALES CHARGES ON CLASS B AND CLASS C SHARES. -19- -------------------------------------------------------------------------------- PORTFOLIO SUMMARY+ April 30, 2007 (UNAUDITED) --------------------------------------------------------------------------------
SMALLCAP AND LARGECAP SMALLCAP MIDCAP CAPITAL HEALTH MIDCAP SECTORS GROWTH GROWTH GROWTH APPRECIATION SCIENCES GROWTH --------------------------------------------------------------------------------------------- Consumer Discretionary 11.9% 15.1% 20.5% 11.7% 0.4% 18.3% Consumer Staples 11.3 1.0 0.7 7.6 1.0 2.1 Energy 7.0 9.2 9.9 10.7 0.0 8.0 Financials 9.3 8.2 10.3 8.6 0.3 7.7 Health Care 11.5 19.0 13.3 14.0 90.6 18.6 Industrials 11.9 9.8 11.8 2.5 0.0 13.0 Information Technology 30.7 21.4 25.2 31.7 0.0 19.7 Materials 1.3 4.9 4.8 4.1 0.5 2.7 Telecommunication Services 1.0 3.2 2.7 4.3 0.0 3.2 Utilities 1.2 0.9 1.1 0.0 0.0 1.2 Cash and Net Other Assets 2.9 7.3 -0.3 4.8 7.2 5.5 --------------------------------------------------------------------------------------------- 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% =============================================================================================
CORE FIXED- SECTORS/SECURITY TYPES BALANCED FUND INCOME FUND -------------------------------------------------------------------------------- Consumer Discretionary 9.3% Consumer Staples 7.9 Energy 6.8 Financials 5.9 Health Care 7.2 Industrials 6.1 Information Technology 18.3 Materials 0.7 Telecommunication Services 0.6 Utilities 0.5 -------------------------------------------------------------------------------- Total Common Stocks 63.3% -------------------------------------------------------------------------------- Corporate Bonds 18.4% 59.6% Agency Bonds 12.0 15.2 U.S. Treasury Bonds 4.9 13.4 -------------------------------------------------------------------------------- Total Bonds 35.3% 88.2% -------------------------------------------------------------------------------- Cash and Net Other Assets 1.4% 11.8% -------------------------------------------------------------------------------- 100.0% 100.0% ================================================================================ MONEY MARKET DAYS TO MATURITY FUND -------------------------------------------------------------------------------- 0 to 30 53.7% 31 to 60 31.7 61 to 90 14.6 -------------------------------------------------------------------------------- 100.0% ================================================================================ + BASED ON NET ASSETS FOR EACH FUND, EXCEPT FOR MONEY MARKET FUND WHICH IS BASED ON TOTAL INVESTMENTS. -20- [This page intentionally left blank] -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER LARGECAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--97.1% SHARES VALUE -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--3.2% Boeing Company 53,950 $ 5,017,350 General Dynamics Corporation 104,600 8,211,100 -------------------------------------------------------------------------------- 13,228,450 -------------------------------------------------------------------------------- BEVERAGES--1.8% PepsiCo, Inc. 112,000 7,402,080 -------------------------------------------------------------------------------- BIOTECHNOLOGY--3.1% Amgen Inc.+ 126,185 8,093,506 Genentech, Inc.* 58,700 4,695,413 -------------------------------------------------------------------------------- 12,788,919 -------------------------------------------------------------------------------- CABLE--1.0% Time Warner Cable, Inc.* 109,200 4,020,744 -------------------------------------------------------------------------------- CAPITAL MARKETS--2.5% Bear Stearns Companies Inc. 34,300 5,340,510 Goldman Sachs Group, Inc. 23,170 5,065,194 -------------------------------------------------------------------------------- 10,405,704 -------------------------------------------------------------------------------- COMMUNICATION EQUIPMENT--6.4% Cisco Systems, Inc.* 455,185 12,171,647 Corning Incorporated* 140,500 3,332,660 QUALCOMM Inc.+ 103,850 4,548,630 Research In Motion Limited* 49,770 6,548,737 -------------------------------------------------------------------------------- 26,601,674 -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--6.2% Apple Computer, Inc.* 87,185 8,701,063 Autodesk, Inc. 45,200 1,865,404 Dell Inc.* 125,200 3,156,292 Hewlett-Packard Company 80,800 3,404,912 Memc Electronic Materials, Inc.* 109,785 6,025,001 SanDisk Corporation* 53,600 2,328,920 -------------------------------------------------------------------------------- 25,481,592 -------------------------------------------------------------------------------- CONGLOMERATE--1.9% ITT Industries, Inc. 121,900 7,778,439 -------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--1.0% Emerson Electric Co. 87,850 4,128,071 -------------------------------------------------------------------------------- ELECTRONICS--1.7% Nintendo Co., Ltd. ADR# 174,700 6,879,896 -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--4.4% Cameron International Corp.* 63,600 4,106,652 National-Oilwell Varco Inc.* 56,735 4,813,965 Schlumberger Limited 59,555 4,396,946 Transocean Inc.* 55,200 4,758,240 -------------------------------------------------------------------------------- 18,075,803 -------------------------------------------------------------------------------- -22- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER LARGECAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- FINANCE--1.0% Intercontinental Exchange Inc.* 32,250 $ 4,095,750 -------------------------------------------------------------------------------- FINANCIAL SERVICES--2.9% Chicago Mercantile Exchange Holdings Inc. 8,015 4,141,751 Hong Kong Exchanges & Clearing Limited 233,000 2,244,552 UBS AG 83,400 5,412,660 -------------------------------------------------------------------------------- 11,798,963 -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--4.6% CVS Caremark Corporation 115,600 4,189,344 Wal-Mart Stores, Inc. 64,500 3,090,840 Walgreen Co. 185,200 8,130,280 Whole Foods Market, Inc. 81,000 3,789,990 -------------------------------------------------------------------------------- 19,200,454 -------------------------------------------------------------------------------- FOOD PRODUCTS--.8% Kraft Foods Inc. Cl. A 100,642 3,368,488 -------------------------------------------------------------------------------- FREIGHT & LOGISTICS--1.3% FedEx Corp. 49,100 5,177,104 -------------------------------------------------------------------------------- HEALTH & PERSONAL CARE--.8% Brookdale Senior Living Inc. 76,865 3,490,440 -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--1.6% Intuitive Surgical, Inc.* 23,300 3,021,078 Medtronic, Inc. 66,500 3,519,845 -------------------------------------------------------------------------------- 6,540,923 -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--3.0% Health Net Inc.* 137,970 7,458,658 UnitedHealth Group Incorporated 96,300 5,109,678 -------------------------------------------------------------------------------- 12,568,336 -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--5.9% Hilton Hotels Corporation 149,100 5,069,400 International Game Technology 194,300 7,410,602 Penn National Gaming, Inc.* 58,800 2,842,392 Royal Caribbean Cruises Ltd. 71,105 2,955,835 Starbucks Corporation* 200,900 6,231,918 -------------------------------------------------------------------------------- 24,510,147 -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--2.2% Procter & Gamble Company 144,715 9,306,622 -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--3.2% 3M Co. 54,700 4,527,519 General Electric Company 237,700 8,761,622 -------------------------------------------------------------------------------- 13,289,141 -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY SERVICES--.7% Cognizant Technology Solutions Corporation Cl. A* 33,900 3,030,660 -------------------------------------------------------------------------------- -23- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER LARGECAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- INSURANCE--1.7% American International Group, Inc. 102,300 $ 7,151,793 -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--2.2% eBay Inc.* 267,875 9,091,677 -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--4.9% Google Inc. Cl. A* 29,925 14,106,046 Yahoo! Inc. * 224,800 6,303,392 -------------------------------------------------------------------------------- 20,409,438 -------------------------------------------------------------------------------- MACHINERY--.6% Joy Global Inc. 48,125 2,436,569 -------------------------------------------------------------------------------- MEDIA--3.2% Comcast Corporation Special Cl. A* 267,300 7,056,720 News Corporation Cl. A 145,800 3,264,462 XM Satellite Radio Holdings Inc. Cl. A* 267,340 3,127,878 -------------------------------------------------------------------------------- 13,449,060 -------------------------------------------------------------------------------- METALS & MINING--1.9% Freeport-McMoRan Copper & Gold, Inc. Cl. B 82,265 5,524,917 Peabody Energy Corporation 51,300 2,461,374 -------------------------------------------------------------------------------- 7,986,291 -------------------------------------------------------------------------------- OIL & GAS--2.1% EOG Resources, Inc. 57,200 4,200,768 Valero Energy Corporation 62,800 4,410,444 -------------------------------------------------------------------------------- 8,611,212 -------------------------------------------------------------------------------- PHARMACEUTICALS--2.9% Bristol-Myers Squibb, Company 35,400 1,021,644 Merck & Co. Inc. 89,100 4,583,304 Sepracor Inc.* 55,300 2,968,504 Wyeth 64,400 3,574,200 -------------------------------------------------------------------------------- 12,147,652 -------------------------------------------------------------------------------- REAL ESTATE--1.2% Jones Lang LaSalle Incorporated 47,755 5,133,185 -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--2.9% Broadcom Corporation Cl. A* 128,200 4,172,910 Intel Corporation 196,100 4,216,150 NVIDIA Corporation* 104,200 3,427,138 -------------------------------------------------------------------------------- 11,816,198 -------------------------------------------------------------------------------- SOFTWARE--5.6% Adobe Systems Incorporated 74,400 3,092,064 Microsoft Corporation 413,430 12,378,094 Symantec Corporation* 203,305 3,578,168 TomTom NV* 92,500 3,937,487 -------------------------------------------------------------------------------- 22,985,813 -------------------------------------------------------------------------------- -24- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER LARGECAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- SPECIALTY RETAIL--1.8% Best Buy Co., Inc. 71,465 $ 3,333,842 Urban Outfitters, Inc.* 160,700 4,139,632 -------------------------------------------------------------------------------- 7,473,474 -------------------------------------------------------------------------------- TOBACCO--1.9% Altria Group, Inc. 111,135 7,659,424 -------------------------------------------------------------------------------- TRANSPORTATION BY AIR--.8% UAL Corporation* 95,600 3,193,040 -------------------------------------------------------------------------------- UTILITIES--1.2% Veolia Environnement 58,395 4,817,003 -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--1.0% NII Holdings Inc. Cl. B* 55,555 4,263,846 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $371,955,252) 401,794,075 -------------------------------------------------------------------------------- PURCHASED OPTIONS--.2% CONTRACTS -------------------------------------------------------------------------------- PUT OPTIONS Amgen/July/60+ 350 33,250 Google Inc. Cl. A/June/470+ 150 184,500 Qualcomm Inc./October/42.5+ 973 233,520 Yahoo! Inc.*/July/30+ 900 225,000 -------------------------------------------------------------------------------- TOTAL PURCHASED PUT OPTIONS (Cost $1,112,200) 676,270 -------------------------------------------------------------------------------- PRINCIPAL SHORT-TERM INVESTMENTS--4.5% AMOUNT -------------------------------------------------------------------------------- U.S. AGENCY OBLIGATIONS Federal Home Loan Banks, 4.93%, 5/1/07 (Cost $18,710,000) $ 18,710,000 18,710,000 -------------------------------------------------------------------------------- ================================================================================ Total Investments (Cost $391,777,452)(a) 101.8% 421,180,345 Liabilities in Excess of Other Assets (1.8) (7,255,792) -------------------------------------------------------------------------------- NET ASSETS 100.0% $ 413,924,553 ================================================================================ * NON-INCOME PRODUCING SECURITY. + ALL OR PORTION OF THE SECURITIES ARE PLEDGED AS COLLATERAL FOR OPTIONS WRITTEN. # AMERICAN DEPOSITARY RECEIPTS. (a) AT APRIL 30, 2007, THE NET UNREALIZED APPRECIATION OF INVESTMENTS, BASED ON COST FOR FEDERAL INCOME TAX PURPOSES OF $400,432,028 AMOUNTED TO $20,748,317 WHICH CONSISTED OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $36,198,506 AND AGGREGATE GROSS UNREALIZED DEPRECIATION OF $15,450,189. SEE NOTES TO FINANCIAL STATEMENTS. -25- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER LARGECAP GROWTH FUND SCHEDULE OF OPTIONS WRITTEN (UNAUDITED) APRIL 30, 2007 -------------------------------------------------------------------------------- SHARES SUBJECT CONTRACTS TO CALL/PUT VALUE -------------------------------------------------------------------------------- CALL OPTIONS WRITTEN Amgen/July/65 350 35,000 $ 96,250 QUALCOMM Inc./October/50 973 97,300 126,490 -------------------------------------------------------------------------------- TOTAL (Premiums Received $209,666) 222,740 -------------------------------------------------------------------------------- PUT OPTIONS WRITTEN Amgen/July/55 350 35,000 12,250 Google Inc. Cl. A/June/420 150 15,000 24,000 QUALCOMM Inc./October/37.5 973 97,300 97,300 Yahoo! Inc./July/27.5 900 90,000 108,000 -------------------------------------------------------------------------------- TOTAL (Premiums Received $433,999) 241,550 -------------------------------------------------------------------------------- TOTAL OPTIONS WRITTEN (Premiums Received $643,665) $ 464,290 -------------------------------------------------------------------------------- SEE NOTES TO FINANCIAL STATEMENTS. -26- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--92.7% SHARES VALUE -------------------------------------------------------------------------------- ADVERTISING--.5% 24/7 Real Media, Inc.* 245,300 $ 2,440,735 -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--3.2% BE Aerospace, Inc.* 176,100 6,454,065 Esterline Technologies Corporation* 121,850 5,084,800 SI International Inc.* 144,750 3,830,085 -------------------------------------------------------------------------------- 15,368,950 -------------------------------------------------------------------------------- AIRLINES--.8% AirTran Holdings, Inc.* 371,050 4,085,260 -------------------------------------------------------------------------------- AUTO COMPONENTS--.8% LKQ Corporation* 164,500 3,714,410 -------------------------------------------------------------------------------- AUTOMOTIVE EQUIPMENT & SERVICES--.8% Tenneco Inc.* 125,500 3,758,725 -------------------------------------------------------------------------------- BIOTECHNOLOGY--3.1% InterMune Inc.* 137,400 3,972,234 Neurocrine Biosciences, Inc.* 178,000 2,265,940 Onyx Pharmaceuticals, Inc.* 176,300 4,717,788 Regeneron Pharmaceuticals, Inc.* 145,600 3,960,320 -------------------------------------------------------------------------------- 14,916,282 -------------------------------------------------------------------------------- BUSINESS SERVICES--.9% TeleTech Holdings Inc.* 120,600 4,550,238 -------------------------------------------------------------------------------- CAPITAL MARKETS--1.0% Greenhill & Co., Inc. 80,750 5,107,437 -------------------------------------------------------------------------------- CHEMICALS--.7% Zoltek Companies, Inc.* 119,900 3,649,756 -------------------------------------------------------------------------------- COMMERCIAL BANKS--3.6% Boston Private Financial Holdings, Inc. 170,850 4,751,338 First Midwest Bancorp, Inc. 130,000 4,672,200 Signature Bank* 150,800 4,744,168 Wintrust Financial Corporation 82,500 3,545,850 -------------------------------------------------------------------------------- 17,713,556 -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--2.3% American Reprographics Co.* 156,600 5,199,120 FTI Consulting, Inc.* 157,700 5,798,629 -------------------------------------------------------------------------------- 10,997,749 -------------------------------------------------------------------------------- COMMUNICATION EQUIPMENT--2.0% Polycom, Inc.* 144,900 4,825,170 Sonus Networks, Inc.* 661,900 5,116,487 -------------------------------------------------------------------------------- 9,941,657 -------------------------------------------------------------------------------- COMMUNICATION TECHNOLOGY--1.0% Dobson Communications Corp. 561,700 5,117,087 -------------------------------------------------------------------------------- -27- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- COMPUTER SERVICES--2.4% ANSYS, Inc.* 56,100 $ 2,872,320 Digital River, Inc.* 93,000 5,443,290 Internap Network Services Corporation* 236,810 3,637,402 -------------------------------------------------------------------------------- 11,953,012 -------------------------------------------------------------------------------- COMPUTER TECHNOLOGY--1.1% Atheros Communications* 192,200 5,149,038 -------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--1.1% URS Corporation* 127,700 5,580,490 -------------------------------------------------------------------------------- CORRECTIONAL FACILITIES--1.1% The Geo Group Inc.* 107,900 5,524,480 -------------------------------------------------------------------------------- DRUG DISTRIBUTION--.7% Hecla Mining Co. 371,900 3,276,439 -------------------------------------------------------------------------------- DRUGS & PHARMACEUTICALS--1.0% United Therapeutics Corporation* 86,900 4,858,579 -------------------------------------------------------------------------------- ELECTRIC SERVICES--1.2% ITC Holdings Corp.* 135,300 5,693,424 -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--3.1% Dril-Quip Inc. 108,400 5,474,200 Horizon Offshore, Inc.* 159,360 2,549,760 North American Energy Partner* 243,500 5,210,900 T-3 Energy Services, Inc.* 82,500 2,103,750 -------------------------------------------------------------------------------- 15,338,610 -------------------------------------------------------------------------------- FINANCE--.8% WNS Holdings Limited* 143,600 3,816,888 -------------------------------------------------------------------------------- FINANCIAL INFORMATION SERVICES--1.2% GFI Group Inc.* 84,500 5,851,625 -------------------------------------------------------------------------------- FINANCIAL SERVICES--1.1% Cohen & Steers, Inc. 108,800 5,582,528 -------------------------------------------------------------------------------- FOOD & BEVERAGES--1.1% Hain Celestial Group Inc. (The)* 179,700 5,396,391 -------------------------------------------------------------------------------- HEALTH CARE--.5% Gentiva Health Services Inc.* 119,600 2,238,912 -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--3.7% Hologic, Inc.* 96,050 5,527,677 Illumina, Inc. 116,750 3,809,553 Thoratec Corporation* 158,500 3,109,770 Ventana Medical Systems, Inc.* 110,750 5,381,343 -------------------------------------------------------------------------------- 17,828,343 -------------------------------------------------------------------------------- -28- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--3.4% Parexel International Corporation* 153,082 $ 6,013,061 Psychiatric Solutions, Inc.* 162,500 5,698,875 Sierra Health Services, Inc.* 117,800 4,879,276 -------------------------------------------------------------------------------- 16,591,212 -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--.8% Orient-Express Hotels Ltd. Cl. A. 77,750 4,093,538 -------------------------------------------------------------------------------- INSURANCE--1.0% First Mercury Financial Corporation* 229,000 4,740,300 -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--2.2% Coldwater Creek Inc.* 237,600 4,918,320 Priceline.com Incorporated* 101,300 5,636,332 -------------------------------------------------------------------------------- 10,554,652 -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--4.5% Acme Packet, Inc.* 179,500 2,425,045 Allscripts Healthcare Solutions, Inc.* 189,650 5,016,242 DealerTrack Holdings Inc.* 171,100 5,646,300 Omniture Inc.* 198,565 3,740,965 WebEx Communications, Inc.* 94,050 5,336,397 -------------------------------------------------------------------------------- 22,164,949 -------------------------------------------------------------------------------- IT SERVICES--.8% Wright Express Corp.* 121,600 3,831,616 -------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT--1.0% WMS Industries Inc.* 124,250 4,952,605 -------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS--1.1% LIFE TIME FITNESS, Inc.* 103,700 5,330,180 -------------------------------------------------------------------------------- MACHINERY--2.2% Actuant Corporation Cl. A 93,650 4,963,450 Bucyrus International, Inc. Cl. A 89,525 5,616,798 -------------------------------------------------------------------------------- 10,580,248 -------------------------------------------------------------------------------- MANUFACTURING--1.2% Silgan Holdings Inc. 102,500 5,881,450 -------------------------------------------------------------------------------- MEDIA--1.9% NeuStar, Inc. Cl. A* 146,550 4,214,778 World Wrestling Entertainment, Inc. Cl. A 300,550 5,112,356 -------------------------------------------------------------------------------- 9,327,134 -------------------------------------------------------------------------------- MEDICAL DEVICES--.5% Dexcom Inc.* 293,700 2,340,789 -------------------------------------------------------------------------------- -29- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- MEDICAL PRODUCTS--1.6% Indevus Pharmaceuticals, Inc.* 398,300 $ 2,871,743 Inverness Medical Innovations, Inc.* 58,100 2,326,905 Omrix Biopharmaceuticals, Inc.* 79,500 2,822,250 -------------------------------------------------------------------------------- 8,020,898 -------------------------------------------------------------------------------- MEDICAL TECHNOLOGY--.4% Hansen Medical, Inc.* 110,700 2,102,193 -------------------------------------------------------------------------------- METALS--2.8% Blue Pearl Mining Ltd.* 245,600 3,929,600 RBC Bearings, Inc.* 154,000 5,853,540 SXR Uranium One, Inc.* 251,500 3,767,470 -------------------------------------------------------------------------------- 13,550,610 -------------------------------------------------------------------------------- METALS & MINING--.8% Breakwater Resources, Ltd.* 1,953,600 3,711,840 -------------------------------------------------------------------------------- OIL & GAS--2.7% Carrizo Oil & Gas, Inc.* 107,750 3,970,587 Mariner Energy Inc.* 219,300 4,945,215 Warren Resources Inc.* 303,500 4,009,235 -------------------------------------------------------------------------------- 12,925,037 -------------------------------------------------------------------------------- OIL AND GAS EXPLORATION SERVICES--.8% Petrobank Energy and Resources Ltd.* 192,350 3,898,935 -------------------------------------------------------------------------------- PHARMACEUTICAL PREPARATIONS--.8% Adams Respiratory Therapeutics, Inc.* 104,800 3,931,048 -------------------------------------------------------------------------------- PHARMACEUTICALS--.5% Pharmion Corp.* 80,600 2,441,374 -------------------------------------------------------------------------------- REAL ESTATE--.5% HFF Inc.* 164,600 2,630,308 -------------------------------------------------------------------------------- RESTAURANTS--1.0% McCormick & Schmick's Seafood Restaurants, Inc.* 188,200 5,038,114 -------------------------------------------------------------------------------- RETAIL--2.1% bebe Stores, Inc. 299,000 5,232,500 Phillips-Van Heusen Corporation 92,650 5,179,135 -------------------------------------------------------------------------------- 10,411,635 -------------------------------------------------------------------------------- SEMICONDUCTOR CAPITAL EQUIPMENT--1.5% FormFactor Inc.* 85,100 3,513,779 SiRF Technology Holdings, Inc.* 160,600 3,896,156 -------------------------------------------------------------------------------- 7,409,935 -------------------------------------------------------------------------------- SEMICONDUCTORS--.8% Cirrus Logic, Inc.* 443,400 3,671,352 -------------------------------------------------------------------------------- -30- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.1% Applied Micro Circuits Corporation* 919,600 $ 2,584,076 ATMI, Inc.* 105,250 3,255,383 Cymer, Inc.* 78,700 3,188,137 ON Semiconductor Corporation* 470,800 5,042,268 Tessera Technologies Inc.* 133,600 5,716,744 -------------------------------------------------------------------------------- 19,786,608 -------------------------------------------------------------------------------- SOFTWARE--3.0% Synchronoss Technologies Inc.* 264,500 5,935,380 Tibco Software Inc.* 372,500 3,397,200 VeriFone Holdings Inc.* 151,400 5,342,906 -------------------------------------------------------------------------------- 14,675,486 -------------------------------------------------------------------------------- SPECIALTY RETAIL--2.4% Aeropostale, Inc.* 109,700 4,514,155 Carter's, Inc.* 121,700 3,188,540 DSW Inc. Cl. A* 98,100 3,802,356 -------------------------------------------------------------------------------- 11,505,051 -------------------------------------------------------------------------------- TELEPHONE COMMUNICATION--1.2% NICE Systems Ltd.* 154,000 5,644,100 -------------------------------------------------------------------------------- TEXTILES & APPAREL--1.1% Iconix Brand Group, Inc.* 267,400 5,382,762 -------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--1.0% Deckers Outdoor Corporation* 67,000 5,073,910 -------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS--1.1% Williams Scotsman International Inc.* 240,907 5,307,181 -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--1.1% SBA Communications Corporation Cl. A* 184,100 5,416,222 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $381,784,885) 452,373,873 -------------------------------------------------------------------------------- PRINCIPAL SHORT-TERM INVESTMENTS--6.5% AMOUNT -------------------------------------------------------------------------------- U.S. AGENCY OBLIGATIONS Federal Home Loan Banks, 4.93%, 5/1/07 (Cost $31,525,000) $ 31,525,000 31,525,000 -------------------------------------------------------------------------------- ================================================================================ Total Investments (Cost $413,309,885)(a) 99.2% 483,898,873 Other Assets in Excess of Liabilities 0.8 3,767,033 -------------------------------------------------------------------------------- NET ASSETS 100.0% $ 487,665,906 ================================================================================ * NON-INCOME PRODUCING SECURITY. (a) AT APRIL 30, 2007, THE NET UNREALIZED APPRECIATION OF INVESTMENTS, BASED ON COST FOR FEDERAL INCOME TAX PURPOSES OF $413,352,858 AMOUNTED TO $70,546,015 WHICH CONSISTED OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $76,004,020 AND AGGREGATE GROSS UNREALIZED DEPRECIATION OF $5,458,005. SEE NOTES TO FINANCIAL STATEMENTS. -31- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER BALANCED FUND SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--63.3% SHARES VALUE --------------------------------------------------------------------------------------------------- AEROSPACE & DEFENSE--2.1% Boeing Company 9,420 $ 876,060 General Dynamics Corporation 17,900 1,405,150 --------------------------------------------------------------------------------------------------- 2,281,210 --------------------------------------------------------------------------------------------------- BEVERAGES--1.2% PepsiCo, Inc. 19,200 1,268,928 --------------------------------------------------------------------------------------------------- BIOTECHNOLOGY--1.7% Amgen Inc. 15,620 1,001,867 Genentech, Inc.* 10,000 799,900 --------------------------------------------------------------------------------------------------- 1,801,767 --------------------------------------------------------------------------------------------------- CABLE--.6% Time Warner Cable, Inc.* 18,800 692,216 --------------------------------------------------------------------------------------------------- CAPITAL MARKETS--1.5% Bear Stearns Companies Inc. 5,110 795,627 Goldman Sachs Group, Inc. 3,910 854,765 --------------------------------------------------------------------------------------------------- 1,650,392 --------------------------------------------------------------------------------------------------- COMMUNICATION EQUIPMENT--3.9% Cisco Systems, Inc.* 78,055 2,087,191 Corning Incorporated* 24,000 569,280 QUALCOMM Inc. 8,000 350,400 Research In Motion Limited* 8,715 1,146,720 --------------------------------------------------------------------------------------------------- 4,153,591 --------------------------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--4.1% Apple Computer, Inc.* 14,865 1,483,527 Autodesk, Inc. 7,800 321,906 Dell Inc.* 21,300 536,973 Hewlett-Packard Company 13,900 585,746 Memc Electronic Materials, Inc.* 19,930 1,093,758 SanDisk Corporation* 9,100 395,395 --------------------------------------------------------------------------------------------------- 4,417,305 --------------------------------------------------------------------------------------------------- CONGLOMERATE--1.2% ITT Industries, Inc. 20,910 1,334,267 --------------------------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--.7% Emerson Electric Co. 15,030 706,260 --------------------------------------------------------------------------------------------------- ELECTRONICS--1.1% Nintendo Co., Ltd ADR# 29,845 1,175,332 --------------------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--2.9% Cameron International Corp.* 10,900 703,813 National-Oilwell Varco Inc.* 9,780 829,833 Schlumberger Limited 10,425 769,678 Transocean Inc.* 9,400 810,280 --------------------------------------------------------------------------------------------------- 3,113,604 ---------------------------------------------------------------------------------------------------
-32- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER BALANCED FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- FINANCE--.7% Intercontinental Exchange Inc.* 5,600 $ 711,200 --------------------------------------------------------------------------------------------------- FINANCIAL SERVICES--1.9% Chicago Mercantile Exchange Holdings Inc. 1,300 671,775 Hong Kong Exchanges & Clearing Limited 48,370 465,961 UBS AG 14,215 922,553 --------------------------------------------------------------------------------------------------- 2,060,289 --------------------------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--3.1% CVS Caremark Corporation 19,900 721,176 Walgreen Co. 32,600 1,431,140 Wal-Mart Stores, Inc. 13,300 637,336 Whole Foods Market, Inc. 11,300 528,727 --------------------------------------------------------------------------------------------------- 3,318,379 --------------------------------------------------------------------------------------------------- FOOD PRODUCTS--.5% Kraft Foods Inc. Cl. A 17,304 579,165 --------------------------------------------------------------------------------------------------- FREIGHT & LOGISTICS--.8% FedEx Corp. 8,400 885,696 --------------------------------------------------------------------------------------------------- HEALTH & PERSONAL CARE--.6% Brookdale Senior Living Inc. 13,205 599,639 --------------------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--.6% Medtronic, Inc. 11,500 608,695 --------------------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--2.1% Health Net Inc.* 25,910 1,400,695 UnitedHealth Group Incorporated 16,500 875,490 --------------------------------------------------------------------------------------------------- 2,276,185 --------------------------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--3.9% Hilton Hotels Corporation 25,400 863,600 International Game Technology 33,200 1,266,248 Penn National Gaming, Inc.* 10,200 493,068 Royal Caribbean Cruises Ltd. 12,125 504,036 Starbucks Corporation* 34,400 1,067,088 --------------------------------------------------------------------------------------------------- 4,194,040 --------------------------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--1.6% Procter & Gamble Company 26,025 1,673,668 --------------------------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--2.1% 3M Co. 9,300 769,761 General Electric Company 40,700 1,500,202 --------------------------------------------------------------------------------------------------- 2,269,963 --------------------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY SERVICES--.5% Cognizant Technology Solutions Corporation Cl. A* 5,800 518,520 ---------------------------------------------------------------------------------------------------
-33- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER BALANCED FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- INSURANCE--1.1% American International Group, Inc. 17,500 $ 1,223,425 --------------------------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--1.5% eBay Inc.* 45,790 1,554,113 --------------------------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--2.5% Google Inc. Cl. A* 4,005 1,887,877 Yahoo! Inc.* 29,400 824,376 --------------------------------------------------------------------------------------------------- 2,712,253 --------------------------------------------------------------------------------------------------- MACHINERY--.4% Joy Global Inc. 8,350 422,760 --------------------------------------------------------------------------------------------------- MEDIA--2.1% Comcast Corporation Special Cl. A* 45,600 1,203,840 News Corporation Cl. A 25,300 566,467 XM Satellite Radio Holdings Inc. Cl. A* 45,575 533,227 --------------------------------------------------------------------------------------------------- 2,303,534 --------------------------------------------------------------------------------------------------- METALS & MINING--1.3% Freeport-McMoRan Copper & Gold, Inc. Cl. B 14,060 944,270 Peabody Energy Corporation 8,800 422,224 --------------------------------------------------------------------------------------------------- 1,366,494 --------------------------------------------------------------------------------------------------- OIL & GAS--1.5% EOG Resources, Inc. 9,800 719,712 Valero Energy Corporation 11,900 835,737 --------------------------------------------------------------------------------------------------- 1,555,449 --------------------------------------------------------------------------------------------------- PHARMACEUTICALS--2.0% Bristol-Myers Squibb, Company 6,000 173,160 Merck & Co. Inc. 15,400 792,176 Sepracor Inc.* 9,400 504,592 Wyeth 12,700 704,850 --------------------------------------------------------------------------------------------------- 2,174,778 --------------------------------------------------------------------------------------------------- REAL ESTATE--.9% Jones Lang LaSalle Incorporated 8,915 958,273 --------------------------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.9% Broadcom Corporation Cl. A* 22,000 716,100 Intel Corporation 34,500 741,750 NVIDIA Corporation* 18,100 595,309 --------------------------------------------------------------------------------------------------- 2,053,159 --------------------------------------------------------------------------------------------------- SOFTWARE--4.1% Adobe Systems Incorporated 12,800 531,968 Microsoft Corporation 70,800 2,119,752 Symantec Corporation* 48,865 860,024 TomTom NV* 19,500 830,065 --------------------------------------------------------------------------------------------------- 4,341,809 ---------------------------------------------------------------------------------------------------
-34- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER BALANCED FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- SPECIALTY RETAIL--1.2% Best Buy Co., Inc. 12,315 $ 574,495 Urban Outfitters, Inc.* 27,500 708,400 --------------------------------------------------------------------------------------------------- 1,282,895 --------------------------------------------------------------------------------------------------- TOBACCO--1.3% Altria Group, Inc. 19,615 1,351,866 --------------------------------------------------------------------------------------------------- TRANSPORTATION BY AIR--.6% UAL Corporation* 19,100 637,940 --------------------------------------------------------------------------------------------------- UTILITIES--.8% Veolia Environnement 10,130 835,624 --------------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--.7% NII Holdings Inc. Cl. B* 9,630 739,102 --------------------------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $62,990,301) 67,803,785 --------------------------------------------------------------------------------------------------
PRINCIPAL CORPORATE BONDS--18.4% AMOUNT --------------------------------------------------------------------------------------------------- AEROSPACE & DEFENSE--.7% L-3 Communications Holdings, 3.00%, 8/1/35 $ 300,000 325,875 Systems 2001 Asset Trust Cl. G, 6.664%, 9/15/13(a) 381,348 402,288 --------------------------------------------------------------------------------------------------- 728,163 --------------------------------------------------------------------------------------------------- AUTOMOTIVE--.9% Capital Auto Receivables Asset Trust, 5.32%, 3/20/10(a) 900,000 902,006 --------------------------------------------------------------------------------------------------- BUILDING & CONSTRUCTION--.1% Martin Marietta Materials Inc., 6.25%, 5/1/37 110,000 111,119 --------------------------------------------------------------------------------------------------- CABLE--.5% Cox Communications, Inc., 4.625%, 6/1/13 550,000 526,508 --------------------------------------------------------------------------------------------------- CAPITAL MARKETS--.3% Morgan Stanley, 5.55%, 4/27/17 300,000 299,669 --------------------------------------------------------------------------------------------------- COMMERCIAL BANKS--1.4% Banc of America Commercial Mortgage Inc., 5.634%, 7/10/46 1,000,000 1,017,540 Wachovia Bank Commercial Mortgage Trust, 5.342%, 12/15/43 525,000 522,827 --------------------------------------------------------------------------------------------------- 1,540,367 --------------------------------------------------------------------------------------------------- COMMUNICATION EQUIPMENT--.3% CenturyTel, Inc., 6.00%, 4/1/17 260,000 260,079 --------------------------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--.6% Xerox Corp., 6.75%, 2/1/17 650,000 688,601 --------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE--.2% Seagate Technology HDD H, 6.80%, 10/1/16 250,000 249,063 ---------------------------------------------------------------------------------------------------
-35- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER BALANCED FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
PRINCIPAL CORPORATE BONDS--(CONT.) AMOUNT VALUE --------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--1.3% Exelon Corporation, 4.90%, 6/15/15 $ 450,000 $ 428,101 General Electric Capital Corp., 5.50%, 11/15/11 600,000 600,322 WPS Resources Co., 6.11%, 12/1/66 325,000 323,934 --------------------------------------------------------------------------------------------------- 1,352,357 --------------------------------------------------------------------------------------------------- ELECTRONICS--.3% Centerpoint Energy Transition Bond Company, 4.97%, 8/1/14 345,000 344,912 --------------------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--.3% Cameron International Corp., 2.50%, 6/15/26 300,000 347,250 --------------------------------------------------------------------------------------------------- FINANCE--1.2% Merrill Lynch Mortgage Trust, 5.84%, 5/12/39 750,000 769,531 SLM Corp., 5.375%, 5/15/14 525,000 479,773 --------------------------------------------------------------------------------------------------- 1,249,304 --------------------------------------------------------------------------------------------------- FINANCIAL SERVICES--4.0% American Tower Trust, 5.9568%, 4/15/37 500,000 502,930 Jefferies Group, Inc., 6.25%, 1/15/36 645,000 627,747 JP Morgan Chase Commercial Mortgage SEC CO., 5.875%, 4/15/45 890,000 925,606 Morgan Stanley Aces SPC, 6.17%, 9/20/13(a) 800,000 790,000 Morgan Stanley Capital I, 5.44%, 2/20/44 625,000 629,439 Morgan Stanley Capital I, 5.51%, 11/12/49 500,000 504,718 Regions Financing Trust II, 6.625%, 5/15/47 300,000 300,530 --------------------------------------------------------------------------------------------------- 4,280,970 --------------------------------------------------------------------------------------------------- FOOD PRODUCTS--.3% General Mills Inc., 5.70%, 2/15/17 260,000 262,387 --------------------------------------------------------------------------------------------------- INSURANCE--1.6% Everest Reinsurance Holdings, 6.60%, 5/15/37 300,000 301,628 Liberty Mutual Group, 7.80%, 3/15/37 600,000 604,844 Radian Group Inc., 7.75%, 6/1/11 500,000 543,391 XL Capital Ltd., 6.50%, 12/31/49 300,000 296,641 --------------------------------------------------------------------------------------------------- 1,746,504 --------------------------------------------------------------------------------------------------- MANUFACTURING--.5% Reliance Steel & Alum, 6.85%, 11/15/36 550,000 555,924 --------------------------------------------------------------------------------------------------- MEDIA--.2% Time Warner Inc., 5.50%, 11/15/11 250,000 252,276 --------------------------------------------------------------------------------------------------- MISCELLANEOUS--.7% Jefferson Valley Floating Rate, 6.765%, 3/20/16(a) 800,000 788,000 --------------------------------------------------------------------------------------------------- OIL & GAS--.5% Inergy LP / Inergy Fin Corp., 8.25%, 3/1/16 347,000 369,555 Tesoro Corp., 6.25%, 11/1/12 200,000 205,000 --------------------------------------------------------------------------------------------------- 574,555 ---------------------------------------------------------------------------------------------------
-36- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER BALANCED FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
PRINCIPAL CORPORATE BONDS--(CONT.) AMOUNT VALUE --------------------------------------------------------------------------------------------------- OIL AND GAS EXTRACTION--.6% Enterprise Products Partners, 8.375%, 8/1/66 $ 610,000 $ 676,584 --------------------------------------------------------------------------------------------------- PHARMACEUTICALS--.5% Wyeth, 5.95%, 4/1/37 500,000 501,702 --------------------------------------------------------------------------------------------------- REAL ESTATE--.6% Prologis, 5.75%, 4/1/16(a) 595,000 607,195 --------------------------------------------------------------------------------------------------- SOFTWARE--.5% Computer Associates International Inc. 6.50%, 100,000 101,245 4/15/08 Oracle Corporation, 5.25%, 1/15/16 455,000 449,497 --------------------------------------------------------------------------------------------------- 550,742 --------------------------------------------------------------------------------------------------- UTILITIES--.3% Southern Co., 5.30%, 1/15/12 300,000 302,443 --------------------------------------------------------------------------------------------------- TOTAL CORPORATE BONDS (Cost $19,489,727) 19,698,680 --------------------------------------------------------------------------------------------------- U.S. GOVERNMENT & AGENCY OBLIGATIONS--16.9% --------------------------------------------------------------------------------------------------- Federal Home Loan Banks, 3.75%, 8/15/08 650,000 640,273 Federal Farm Credit Bank, 5.20%, 9/26/17 1,000,000 1,016,905 4.95%, 10/18/18 455,000 452,301 Federal Home Loan Mortgage Corporation, 5.60%, 10/17/13 600,000 601,816 5.50%, 10/15/16 486,678 490,614 5.75%, 12/15/18 645,490 649,060 6.00%, 8/15/29 900,000 921,324 5.50%, 10/15/31 1,000,000 1,003,922 6.00%, 5/15/32 1,000,000 1,019,038 6.00%, 3/15/36 966,765 973,849 5.50%, 9/15/36 439,830 440,261 Federal National Mortgage Association, 3.85%, 4/14/09 1,000,000 982,226 5.00%, 4/1/18 787,820 778,872 5.75%, 9/25/20 787,948 791,694 6.625%, 11/15/30 350,000 415,677 6.00%, 4/25/35 950,000 967,998 Government National Mortgage Association, 5.00%, 5/16/29 702,821 699,466 U.S. Treasury Bonds, 7.50%, 11/15/16 483,000 587,883
-37- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER BALANCED FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
PRINCIPAL U.S. GOVERNMENT & AGENCY OBLIGATIONS--(CONT.) AMOUNT VALUE --------------------------------------------------------------------------------------------------- U.S. Treasury Notes, 4.875%, 8/15/09 $ 2,100,000 $ 2,114,192 5.00%, 8/15/11 900,000 918,141 4.75%, 5/15/14 552,000 558,102 4.25%, 11/15/14 800,000 783,250 4.50%, 2/15/16 300,000 297,738 --------------------------------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (Cost $18,003,234) 18,104,602 --------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS--3.1% --------------------------------------------------------------------------------------------------- U.S. AGENCY OBLIGATIONS Federal Home Loan Banks, 4.93%, 5/1/07 (Cost $3,400,000) 3,400,000 3,400,000 --------------------------------------------------------------------------------------------------- =================================================================================================== Total Investments (Cost $103,883,262)(b) 101.7% 109,007,067 Liabilities in Excess of Other Assets (1.7) (1,845,747) --------------------------------------------------------------------------------------------------- NET ASSETS 100.0% $ 107,161,320 ===================================================================================================
* NON-INCOME PRODUCING SECURITY. # AMERICAN DEPOSITARY RECEIPTS. (a) PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 144A, THESE SECURITIES MAY BE SOLD PRIOR TO THEIR MATURITY ONLY TO QUALIFIED INSTITUTIONAL BUYERS. THESE SECURITIES ARE DEEMED TO BE LIQUID AND REPRESENT 3.1% OF THE NET ASSETS OF THE FUND. (b) AT APRIL 30, 2007, THE NET UNREALIZED APPRECIATION OF INVESTMENTS, BASED ON COST FOR FEDERAL INCOME TAX PURPOSES OF $106,314,672 AMOUNTED TO $2,692,395 WHICH CONSISTED OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $6,401,267 AND AGGREGATE GROSS UNREALIZED DEPRECIATION OF $3,708,872. SEE NOTES TO FINANCIAL STATEMENTS. -38- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--100.3% SHARES VALUE --------------------------------------------------------------------------------------------------- AEROSPACE & DEFENSE--3.8% Armor Holdings, Inc.* 147,947 $ 10,578,211 BE Aerospace, Inc.* 337,250 12,360,213 --------------------------------------------------------------------------------------------------- 22,938,424 --------------------------------------------------------------------------------------------------- AGRICULTURE--.5% Mosaic Co.* 101,900 3,006,050 --------------------------------------------------------------------------------------------------- AUTO EQUIPMENT & SERVICE--.7% Tenneco Inc.*+ 139,500 4,178,025 --------------------------------------------------------------------------------------------------- BIOTECHNOLOGY--4.0% Affymetrix Inc.* 244,700 6,428,269 Celgene Corporation* 83,900 5,131,324 Cephalon, Inc.* 38,230 3,043,490 InterMune Inc.* 57,600 1,665,216 Onyx Pharmaceuticals, Inc.* 170,600 4,565,256 Regeneron Pharmaceuticals, Inc.* 132,400 3,601,280 --------------------------------------------------------------------------------------------------- 24,434,835 --------------------------------------------------------------------------------------------------- CAPITAL MARKETS--2.1% Affiliated Managers Group, Inc.* 45,902 5,399,452 National Financial Partners Corporation 158,600 7,306,702 --------------------------------------------------------------------------------------------------- 12,706,154 --------------------------------------------------------------------------------------------------- CHEMICALS--1.3% Nalco Holding Co.* 287,500 7,641,750 --------------------------------------------------------------------------------------------------- COMMERCIAL BANKS--.4% Boston Private Financial Holdings, Inc. 81,800 2,274,858 --------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--2.9% Allied Waste Industries Inc. 582,300 7,785,351 Apollo Group, Inc. Cl. A* 93,000 4,398,900 Net 1 UEPS Technologies, Inc.* 219,840 5,535,571 --------------------------------------------------------------------------------------------------- 17,719,822 --------------------------------------------------------------------------------------------------- COMMUNICATION EQUIPMENT--1.1% Research In Motion Limited* 53,100 6,986,898 --------------------------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--4.5% Apple Computer, Inc.* 161,500 16,117,700 Isilon Systems, Inc.* 137,100 1,673,991 Memc Electronic Materials, Inc.* 115,125 6,318,060 SanDisk Corporation* 69,400 3,015,430 --------------------------------------------------------------------------------------------------- 27,125,181 --------------------------------------------------------------------------------------------------- COMPUTER SERVICES--.9% Digital River, Inc.* 91,800 5,373,054 ---------------------------------------------------------------------------------------------------
-39- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- COMPUTER TECHNOLOGY--2.3% Atheros Communications* 288,965 $ 7,741,372 NAVTEQ* 168,735 5,966,470 --------------------------------------------------------------------------------------------------- 13,707,842 --------------------------------------------------------------------------------------------------- CONGLOMERATE--1.8% ITT Industries, Inc. 169,300 10,803,033 --------------------------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--2.6% Chicago Bridge & Iron Company N.V. 212,700 7,365,801 McDermott International, Inc.* 157,475 8,450,108 --------------------------------------------------------------------------------------------------- 15,815,909 --------------------------------------------------------------------------------------------------- DRUGS & PHARMACEUTICALS--1.0% United Therapeutics Corporation* 106,950 5,979,574 --------------------------------------------------------------------------------------------------- ELECTRONICS--2.1% Nintendo Co., Ltd. ADR# 321,640 12,666,569 --------------------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--6.9% Baker Hughes Inc. 107,300 8,625,847 Cameron International Corp.* 54,975 3,549,736 National-Oilwell Varco Inc.*+ 155,000 13,151,750 Suntech Power Holdings Co., Ltd. ADR*#+ 210,000 7,618,800 Transocean Inc.* 100,300 8,645,860 --------------------------------------------------------------------------------------------------- 41,591,993 --------------------------------------------------------------------------------------------------- FINANCE--1.3% Intercontinental Exchange Inc.* 61,400 7,797,800 --------------------------------------------------------------------------------------------------- FINANCIAL INFORMATION SERVICES--2.0% GFI Group Inc.* 171,800 11,897,150 --------------------------------------------------------------------------------------------------- FINANCIAL SERVICES--3.3% AllianceBernstein Holding LP 49,000 4,457,040 Chicago Mercantile Exchange Holdings Inc. 8,200 4,237,350 Hong Kong Exchanges & Clearing Limited 273,475 2,634,459 Lazard Ltd. 161,500 8,745,225 --------------------------------------------------------------------------------------------------- 20,074,074 --------------------------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--.7% Whole Foods Market, Inc. 92,100 4,309,359 --------------------------------------------------------------------------------------------------- HEALTH & PERSONAL CARE--.5% Brookdale Senior Living Inc. 63,500 2,883,535 --------------------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--1.2% Intuitive Surgical, Inc.* 45,500 5,899,530 Mentor Corporation 34,293 1,334,341 --------------------------------------------------------------------------------------------------- 7,233,871 ---------------------------------------------------------------------------------------------------
-40- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--3.9% Centene Corporation* 268,900 $ 5,595,809 Health Net Inc.* 135,950 7,349,457 McKesson Corporation 86,800 5,106,444 Psychiatric Solutions, Inc.* 169,510 5,944,716 --------------------------------------------------------------------------------------------------- 23,996,426 --------------------------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--8.4% Cheesecake Factory Incorporated (The)* 116,000 3,201,600 International Game Technology 115,300 4,397,542 Orient-Express Hotels Ltd. Cl. A. 290,600 15,300,090 Penn National Gaming, Inc.* 172,000 8,314,480 Royal Caribbean Cruises Ltd. 149,690 6,222,613 Scientific Games Corporation* 227,590 7,576,471 Starbucks Corporation* 183,700 5,698,374 --------------------------------------------------------------------------------------------------- 50,711,170 --------------------------------------------------------------------------------------------------- INFORMATION TECHNOLOGY SERVICES--.5% Cognizant Technology Solutions Corporation Cl. A* 34,000 3,039,600 --------------------------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--5.2% Allscripts Healthcare Solutions, Inc.* 391,085 10,344,198 DealerTrack Holdings Inc.* 147,150 4,855,950 Expedia, Inc.* 239,800 5,664,076 SINA Corp.* 316,300 10,906,024 --------------------------------------------------------------------------------------------------- 31,770,248 --------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT--.9% Vail Resorts Inc. 95,800 5,462,516 --------------------------------------------------------------------------------------------------- MEDIA--2.2% DreamWorks Animation SKG, Inc. Cl. A* 296,700 8,687,376 Regal Entertainment Group 217,000 4,719,750 --------------------------------------------------------------------------------------------------- 13,407,126 --------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS--.8% Metabolix, Inc.* 208,700 5,219,587 --------------------------------------------------------------------------------------------------- METALS--3.0% Blue Pearl Mining Ltd.* 402,000 6,432,000 China Molybdenum Co.* 9,400 14,998 SXR Uranium One, Inc.* 518,300 7,764,134 Yamana Gold, Inc. 303,900 4,245,483 --------------------------------------------------------------------------------------------------- 18,456,615 --------------------------------------------------------------------------------------------------- METALS & MINING--2.3% Paladin Resources Limited* 581,560 4,565,246 Peabody Energy Corporation 126,500 6,069,470 Southern Copper Corp. 38,300 3,075,490 --------------------------------------------------------------------------------------------------- 13,710,206 ---------------------------------------------------------------------------------------------------
-41- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- OIL & GAS--1.5% Valero Energy Corporation 130,300 $ 9,150,969 --------------------------------------------------------------------------------------------------- OIL AND GAS EXPLORATION SERVICES--.5% Petrobank Energy and Resources Ltd.* 149,000 3,020,230 --------------------------------------------------------------------------------------------------- PHARMACEUTICALS Endo Pharmaceuticals Holdings Inc.* 7,300 225,862 --------------------------------------------------------------------------------------------------- PHOTOGRAPHY--.5% Shutterfly, Inc.* 184,500 2,996,280 --------------------------------------------------------------------------------------------------- REAL ESTATE--1.2% Jones Lang LaSalle Incorporated 69,970 7,521,075 --------------------------------------------------------------------------------------------------- RETAIL--1.5% Sothebys Holdings Inc., Cl. A 177,500 9,162,550 --------------------------------------------------------------------------------------------------- SEMICONDUCTOR CAPITAL EQUIPMENT--.8% SiRF Technology Holdings, Inc.* 205,855 4,994,042 --------------------------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--5.7% Lam Research Corporation* 89,000 4,786,420 ON Semiconductor Corporation* 1,132,700 12,131,217 Tessera Technologies Inc.* 291,500 12,473,285 Trident Microsystems, Inc.* 240,400 5,103,692 --------------------------------------------------------------------------------------------------- 34,494,614 --------------------------------------------------------------------------------------------------- SOFTWARE--3.9% Activision, Inc.*+ 580,000 11,600,000 Adobe Systems Incorporated 145,600 6,051,136 Synchronoss Technologies Inc.* 55,000 1,234,200 TomTom NV* 115,900 4,933,565 --------------------------------------------------------------------------------------------------- 23,818,901 --------------------------------------------------------------------------------------------------- SPECIALTY RETAIL--3.9% Abercrombie & Fitch Co. Cl. A 19,300 1,576,038 Gamestop Corp. Cl. A* 292,800 9,712,176 PETSMART, Inc. 176,800 5,867,992 Urban Outfitters, Inc.* 244,500 6,298,320 --------------------------------------------------------------------------------------------------- 23,454,526 --------------------------------------------------------------------------------------------------- TEXTILES & APPAREL--.8% Iconix Brand Group, Inc.* 246,000 4,951,980 --------------------------------------------------------------------------------------------------- TRANSPORTATION--1.1% Textron Inc. 63,600 6,466,212 --------------------------------------------------------------------------------------------------- UTILITIES--1.1% Veolia Environnement 81,770 6,745,207 ---------------------------------------------------------------------------------------------------
-42- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--2.7% NII Holdings Inc. Cl. B* 99,290 $ 7,620,508 SBA Communications Corporation Cl. A* 290,230 8,538,567 --------------------------------------------------------------------------------------------------- 16,159,075 --------------------------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $552,271,180) 608,080,777 ---------------------------------------------------------------------------------------------------
PURCHASED OPTIONS--.2% CONTRACTS --------------------------------------------------------------------------------------------------- PUT OPTIONS Activision, Inc*/August/15 5,800 58,000 National-Oilwell Varco Inc.*/August/65 1,550 77,500 Suntech Power Holdings Co./September/35+ 2,100 693,000 Tenneco Inc.*/October/30+ 1,395 292,950 --------------------------------------------------------------------------------------------------- TOTAL PURCHASED PUT OPTIONS (Cost $2,040,700) 1,121,450 ---------------------------------------------------------------------------------------------------
PRINCIPAL SHORT-TERM INVESTMENTS--3.6% AMOUNT --------------------------------------------------------------------------------------------------- U.S. AGENCY OBLIGATIONS Federal Home Loan Banks, 4.93%, 5/1/07 (Cost $21,560,000) $ 21,560,000 21,560,000 --------------------------------------------------------------------------------------------------- =================================================================================================== Total Investments (Cost $575,871,880)(a) 104.1% 630,762,227 Liabilities in Excess of Other Assets (4.1) (24,610,030) --------------------------------------------------------------------------------------------------- NET ASSETS 100.0% $ 606,152,197 ===================================================================================================
* NON-INCOME PRODUCING SECURITY. + ALL OR PORTION OF THE SECURITIES ARE PLEDGED AS COLLATERAL FOR OPTIONS WRITTEN. # AMERICAN DEPOSITARY RECEIPTS. (a) AT APRIL 30, 2007, THE NET UNREALIZED APPRECIATION OF INVESTMENTS, BASED ON COST FOR FEDERAL INCOME TAX PURPOSES OF $593,456,963 AMOUNTED TO $37,305,264 WHICH CONSISTED OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $61,087,210 AND AGGREGATE GROSS UNREALIZED DEPRECIATION OF $23,781,946. SEE NOTES TO FINANCIAL STATEMENTS. -43- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER MIDCAP GROWTH FUND SCHEDULE OF OPTIONS WRITTEN (UNAUDITED) APRIL 30, 2007 --------------------------------------------------------------------------------
SHARES SUBJECT CONTRACTS TO CALL/PUT VALUE --------------------------------------------------------------------------------------------------- CALL OPTIONS WRITTEN Activision, Inc/August/22.5 5,800 580,000 $ 319,000 National-Oilwell Varco Inc./August/90 1,550 155,000 651,000 Suntech Power Holdings Co./September/45 2,100 210,000 294,000 Tenneco Inc./October/35 1,395 139,500 111,600 --------------------------------------------------------------------------------------------------- TOTAL (Premiums Received $884,160) 1,375,600 --------------------------------------------------------------------------------------------------- PUT OPTIONS WRITTEN Suntech Power Holdings Co./September/30 2,100 210,000 336,000 Tenneco Inc./October/25 1,395 139,500 76,725 --------------------------------------------------------------------------------------------------- TOTAL (Premiums Received $652,052) 412,725 --------------------------------------------------------------------------------------------------- TOTAL OPTIONS WRITTEN (Premiums Received $1,536,212) $ 1,788,325 ---------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS. -44- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER CAPITAL APPRECIATION FUND SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--95.2% SHARES VALUE -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--2.0% Armor Holdings, Inc.* 51,500 $ 3,682,250 BE Aerospace, Inc.* 87,800 3,217,870 Boeing Company 20,700 1,925,100 -------------------------------------------------------------------------------- 8,825,220 -------------------------------------------------------------------------------- BIOTECHNOLOGY--3.6% Amgen Inc. 52,900 3,393,006 Cephalon, Inc.* 29,900 2,380,339 InterMune Inc.* 74,500 2,153,795 Neurocrine Biosciences, Inc.* 79,200 1,008,216 Onyx Pharmaceuticals, Inc.* 160,000 4,281,600 Regeneron Pharmaceuticals, Inc.* 84,400 2,295,680 -------------------------------------------------------------------------------- 15,512,636 -------------------------------------------------------------------------------- BUSINESS SERVICES--.5% Endeavor Acquisition Corp.* 195,300 2,048,697 -------------------------------------------------------------------------------- CAPITAL MARKETS--1.8% Bear Stearns Companies Inc. 30,200 4,702,140 National Financial Partners Corporation 71,900 3,312,433 -------------------------------------------------------------------------------- 8,014,573 -------------------------------------------------------------------------------- CASINOS & RESORTS--.5% Bally Technologies Inc.* 91,100 2,131,740 -------------------------------------------------------------------------------- COMMERCIAL BANKS--.7% Bank of America Corporation 55,900 2,845,310 -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--1.4% Net 1 UEPS Technologies, Inc.* 244,475 6,155,881 -------------------------------------------------------------------------------- COMMUNICATION EQUIPMENT--4.0% Cisco Systems, Inc.* 385,600 10,310,944 Corning Incorporated* 72,000 1,707,840 Sonus Networks, Inc.* 691,600 5,346,068 -------------------------------------------------------------------------------- 17,364,852 -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--4.7% Apple Computer, Inc.* 46,100 4,600,780 Autodesk, Inc. 90,300 3,726,681 Hewlett-Packard Company 93,900 3,956,946 Memc Electronic Materials, Inc.* 69,000 3,786,720 Network Appliance, Inc.* 60,400 2,247,484 Seagate Technology 95,400 2,113,110 -------------------------------------------------------------------------------- 20,431,721 -------------------------------------------------------------------------------- COMPUTER SERVICES--1.7% Digital River, Inc.* 125,100 7,322,103 -------------------------------------------------------------------------------- COMPUTER TECHNOLOGY--.5% Atheros Communications* 82,400 2,207,496 -------------------------------------------------------------------------------- -45- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER CAPITAL APPRECIATION FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--.5% McDermott International, Inc.* 40,700 $ 2,183,962 -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--.7% Level 3 Communication Inc.* 569,925 3,168,783 -------------------------------------------------------------------------------- DRUGS & PHARMACEUTICALS--1.0% United Therapeutics Corporation* 73,900 4,131,749 -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--2.1% Cameron International Corp.* 14,800 955,636 Diamond Offshore Drilling Inc. 66,200 5,666,720 National-Oilwell Varco Inc.* 30,600 2,596,410 -------------------------------------------------------------------------------- 9,218,766 -------------------------------------------------------------------------------- FINANCIAL INFORMATION SERVICES--1.4% GFI Group Inc.* 84,600 5,858,550 -------------------------------------------------------------------------------- FINANCIAL SERVICES--3.1% AllianceBernstein Holding LP 23,000 2,092,080 Chicago Mercantile Exchange Holdings Inc. 8,000 4,134,000 Dollar Financial Corporation* 126,200 3,677,468 Lazard Ltd. 68,200 3,693,030 -------------------------------------------------------------------------------- 13,596,578 -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--3.9% CVS Caremark Corporation 470,700 17,058,168 -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--2.4% Hologic, Inc.* 38,000 2,186,900 Intuitive Surgical, Inc.* 29,100 3,773,106 Thoratec Corporation* 60,900 1,194,858 Ventana Medical Systems, Inc.* 69,000 3,352,710 -------------------------------------------------------------------------------- 10,507,574 -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--3.7% Cardinal Health, Inc. 174,300 12,192,285 Express Scripts, Inc.* 19,500 1,863,225 Health Net Inc.* 37,620 2,033,737 -------------------------------------------------------------------------------- 16,089,247 -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--3.0% Hilton Hotels Corporation 118,100 4,015,400 International Game Technology 92,000 3,508,880 Penn National Gaming, Inc.* 47,800 2,310,652 Scientific Games Corporation* 101,400 3,375,606 -------------------------------------------------------------------------------- 13,210,538 -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--1.1% Procter & Gamble Company 73,340 4,716,495 -------------------------------------------------------------------------------- -46- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER CAPITAL APPRECIATION FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- INSURANCE--1.2% American International Group, Inc. 72,500 $ 5,068,475 -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--3.0% Coldwater Creek Inc.* 51,100 1,057,770 eBay Inc.* 282,300 9,581,262 Nutri/System, Inc. 38,105 2,362,510 -------------------------------------------------------------------------------- 13,001,542 -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--6.3% DealerTrack Holdings Inc.* 179,100 5,910,300 Google Inc. Cl. A* 33,300 15,696,954 SINA Corp.* 119,700 4,127,256 Yahoo! Inc.* 60,215 1,688,429 -------------------------------------------------------------------------------- 27,422,939 -------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT--.5% Cinemark Holdings, Inc.* 113,000 2,135,700 -------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS--.2% Smith & Wesson Holding Corporation* 64,700 887,684 -------------------------------------------------------------------------------- MEDIA--3.4% DreamWorks Animation SKG, Inc. Cl. A* 134,500 3,938,160 Focus Media Holding Limited ADR*# 61,472 2,274,464 McGraw-Hill Companies, Inc. (The) 61,100 4,003,883 Regal Entertainment Group 211,200 4,593,600 -------------------------------------------------------------------------------- 14,810,107 -------------------------------------------------------------------------------- METAL FABRICATING--.3% OM Group, Inc. 20,600 1,082,118 -------------------------------------------------------------------------------- METALS--1.9% Blue Pearl Mining Ltd.* 340,000 5,440,000 SXR Uranium One, Inc.* 176,550 2,644,719 -------------------------------------------------------------------------------- 8,084,719 -------------------------------------------------------------------------------- METALS & MINING--3.9% Breakwater Resources, Ltd.* 669,630 1,272,297 Cameco Corporation 120,700 5,627,034 Freeport-McMoRan Copper & Gold, Inc. Cl. B 70,700 4,748,212 Inmet Mining Corporation 16,600 1,009,114 Paladin Resources Limited* 527,800 4,143,230 -------------------------------------------------------------------------------- 16,799,887 -------------------------------------------------------------------------------- OIL & GAS--5.0% Marathon Oil Corporation 36,100 3,665,955 Range Resources Corporation 9,800 358,190 Valero Energy Corporation 199,500 14,010,885 Warren Resources Inc.* 264,500 3,494,045 -------------------------------------------------------------------------------- 21,529,075 -------------------------------------------------------------------------------- -47- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER CAPITAL APPRECIATION FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- OIL & GAS EXPLORARTION SERVICES--1.7% Petrobank Energy and Resources Ltd.* 372,100 $ 7,542,467 -------------------------------------------------------------------------------- PHARMACEUTICAL PREPARATIONS--1.0% Adams Respiratory Therapeutics, Inc.* 115,875 4,346,471 -------------------------------------------------------------------------------- PHARMACEUTICALS--2.4% Abbott Laboratories 65,200 3,691,624 Salix Pharmaceuticals, Ltd.* 160,700 2,092,314 Sepracor Inc.* 86,100 4,621,848 -------------------------------------------------------------------------------- 10,405,786 -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--7.6% Lam Research Corporation* 118,200 6,356,796 ON Semiconductor Corporation* 1,043,300 11,173,743 Rambus Inc.* 181,200 3,589,572 Tessera Technologies Inc.* 152,735 6,535,531 Trident Microsystems, Inc.* 252,700 5,364,821 -------------------------------------------------------------------------------- 33,020,463 -------------------------------------------------------------------------------- SOFTWARE--3.2% Adobe Systems Incorporated 83,800 3,482,728 Microsoft Corporation 174,950 5,238,003 Symantec Corporation* 72,100 1,268,960 TomTom NV* 95,700 4,073,703 -------------------------------------------------------------------------------- 14,063,394 -------------------------------------------------------------------------------- SPECIALTY RETAIL--2.0% Abercrombie & Fitch Co. Cl. A 30,400 2,482,464 Gamestop Corp. Cl. A* 72,300 2,398,191 Urban Outfitters, Inc.* 154,000 3,967,040 -------------------------------------------------------------------------------- 8,847,695 -------------------------------------------------------------------------------- TEXTILES & APPAREL--1.3% Iconix Brand Group, Inc.* 269,300 5,421,009 -------------------------------------------------------------------------------- TOBACCO--2.5% Altria Group, Inc. 160,500 11,061,660 -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--3.5% America Movil S.A. de C.V. Series L ADR# 96,200 5,053,386 American Tower Corporation Cl. A* 88,397 3,359,086 NII Holdings Inc. Cl. B* 90,130 6,917,477 -------------------------------------------------------------------------------- 15,329,949 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $383,158,370) 413,461,779 -------------------------------------------------------------------------------- -48- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER CAPITAL APPRECIATION FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- PRINCIPAL PURCHASED OPTIONS--.1% AMOUNT VALUE -------------------------------------------------------------------------------- CALL OPTIONS Tessera Technologies/June/35 (Cost $200,742) $ 316 $ 252,800 -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS--3.7% -------------------------------------------------------------------------------- U.S. AGENCY OBLIGATIONS Federal Home Loan Banks, 4.93%, 5/1/07 (Cost $16,285,000) 16,285,000 16,285,000 -------------------------------------------------------------------------------- ================================================================================ Total Investments (Cost $399,644,112)(a) 99.0% 429,999,579 Other Assets in Excess of Liabilities 1.0 4,333,377 -------------------------------------------------------------------------------- NET ASSETS 100.0% $ 434,332,956 ================================================================================ * NON-INCOME PRODUCING SECURITY. # AMERICAN DEPOSITARY RECEIPTS. (a) AT APRIL 30, 2007, THE NET UNREALIZED APPRECIATION OF INVESTMENTS, BASED ON COST FOR FEDERAL INCOME TAX PURPOSES OF $400,739,483 AMOUNTED TO $29,260,096 WHICH CONSISTED OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $34,558,610 AND AGGREGATE GROSS UNREALIZED DEPRECIATION OF $5,298,514. SEE NOTES TO FINANCIAL STATEMENTS. -49- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER HEALTH SCIENCES FUND SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--92.8% SHARES VALUE -------------------------------------------------------------------------------- BIOTECHNOLOGY--17.4% Amgen Inc. 100,650 $ 6,455,691 Arena Pharmaceuticals, Inc.* 45,800 596,774 Celgene Corporation* 54,500 3,333,220 Cephalon, Inc.* 40,300 3,208,283 CV Therapeutics, Inc.* 128,300 1,081,569 Gen-Probe Incorporated* 52,900 2,703,719 Genentech, Inc.* 38,000 3,039,620 Gilead Sciences, Inc. 25,806 2,108,866 InterMune Inc.* 115,200 3,330,432 Neurocrine Biosciences, Inc.* 198,850 2,531,360 Onyx Pharmaceuticals, Inc.* 176,150 4,713,774 Regeneron Pharmaceuticals, Inc.* 134,100 3,647,520 -------------------------------------------------------------------------------- 36,750,828 -------------------------------------------------------------------------------- CHEMICALS--.5% Bayer AG 15,500 1,059,890 -------------------------------------------------------------------------------- DRUGS & PHARMACEUTICALS--2.8% United Therapeutics Corporation* 107,000 5,982,370 -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--1.0% CVS Caremark Corporation 60,000 2,174,400 -------------------------------------------------------------------------------- HEALTH & PERSONAL CARE--.9% Brookdale Senior Living Inc. 44,350 2,013,934 -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--15.8% Baxter International Inc. 70,800 4,009,404 Biomet, Inc. 67,650 2,922,480 Cooper Companies, Inc. (The) 40,000 2,044,000 Cyberonics, Inc.* 43,155 943,368 Cytyc Corporation* 30,000 1,056,900 Dade Behring Holdings Inc. 29,000 1,424,190 Hologic, Inc.* 37,520 2,159,276 Illumina, Inc. 100,990 3,295,304 Intuitive Surgical, Inc.* 15,900 2,061,594 Kyphon Inc.* 43,400 2,022,874 Medtronic, Inc. 99,900 5,287,707 St. Jude Medical, Inc.* 50,000 2,139,500 Thoratec Corporation* 52,500 1,030,050 Ventana Medical Systems, Inc.* 36,900 1,792,971 Zimmer Holdings, Inc.* 13,650 1,235,052 -------------------------------------------------------------------------------- 33,424,670 -------------------------------------------------------------------------------- -50- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER HEALTH SCIENCES FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--13.9% Cardinal Health, Inc. 40,050 $ 2,801,498 Centene Corporation* 69,550 1,447,336 Health Net Inc.* 36,850 1,992,111 HealthExtras, Inc.* 55,250 1,709,988 LifePoint Hospitals, Inc.* 78,750 2,875,162 Manor Care, Inc. 43,500 2,822,715 McKesson Corporation 68,900 4,053,387 Parexel International Corporation* 52,250 2,052,380 Psychiatric Solutions, Inc.* 92,950 3,259,756 Quest Diagnostics Incorporated 38,700 1,892,043 Sierra Health Services, Inc.* 63,250 2,619,815 UnitedHealth Group Incorporated 36,995 1,962,955 -------------------------------------------------------------------------------- 29,489,146 -------------------------------------------------------------------------------- INSURANCE--.3% eHealth, Inc.* 27,300 602,784 -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--1.4% Allscripts Healthcare Solutions, Inc.* 113,750 3,008,688 -------------------------------------------------------------------------------- MANUFACTURING--.5% Millipore Corporation 15,000 1,107,450 -------------------------------------------------------------------------------- MEDICAL DEVICES--.6% Dexcom Inc.* 159,800 1,273,606 -------------------------------------------------------------------------------- MEDICAL PRODUCTS--6.5% Accuray Inc.* 38,500 908,600 AngioDynamics, Inc.* 63,900 1,063,296 Cadence Pharmaceuticals Inc.* 51,100 828,842 Indevus Pharmaceuticals, Inc.* 290,250 2,092,702 Inverness Medical Innovations, Inc.* 15,000 600,750 Northstar Neuroscience, Inc.* 100,250 1,365,405 Omrix Biopharmaceuticals, Inc.* 89,974 3,194,077 Orexigen Therapeutics Inc.* 122,000 1,714,100 Poniard Pharmaceuticals, Inc.* 153,000 1,063,350 Vital Images, Inc.* 28,650 884,139 -------------------------------------------------------------------------------- 13,715,261 -------------------------------------------------------------------------------- MEDICAL TECHNOLOGY--2.3% Acorda Therapeutics Inc.* 102,900 2,549,862 Hansen Medical, Inc.* 74,000 1,405,260 WebMD Health Corp.* 19,550 1,016,600 -------------------------------------------------------------------------------- 4,971,722 -------------------------------------------------------------------------------- PHARMACEUTICAL PREPARATIONS--1.0% Adams Respiratory Therapeutics, Inc.* 55,700 2,089,307 -------------------------------------------------------------------------------- -51- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER HEALTH SCIENCES FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 -------------------------------------------------------------------------------- COMMON STOCKS--(CONT.) SHARES VALUE -------------------------------------------------------------------------------- PHARMACEUTICALS--26.6% Abbott Laboratories 87,750 $ 4,968,405 Adolor Corporation* 137,100 490,818 Allergan, Inc. 20,650 2,502,780 Auxilium Pharmaceuticals Inc.* 75,450 1,121,187 Barr Pharmaceuticals, Inc.* 66,900 3,235,284 Bristol-Myers Squibb, Company 75,000 2,164,500 CollaGenex Pharmaceuticals, Inc.* 114,250 1,566,368 Eli Lilly and Company 40,550 2,397,721 Hospira Inc.* 25,000 1,013,750 Johnson & Johnson 35,000 2,247,700 King Pharmaceuticals, Inc.* 25,000 511,250 Merck & Co. Inc. 116,050 5,969,612 Novartis AG ADR# 35,050 2,036,054 Pfizer Inc. 193,650 5,123,979 Pharmion Corp.* 69,400 2,102,126 Repros Therapeutics Inc.* 88,541 1,068,690 Schering-Plough Corporation 148,750 4,719,837 Sepracor Inc.* 98,200 5,271,376 Syntha Pharmaceuticals Corp.* 134,000 1,092,100 Teva Pharmaceutical Industries Ltd. ADR# 55,000 2,107,050 Wyeth 81,600 4,528,800 -------------------------------------------------------------------------------- 56,239,387 -------------------------------------------------------------------------------- SOFTWARE--.9% Cerner Corporation* 34,150 1,818,146 -------------------------------------------------------------------------------- SPECIALTY RETAIL--.4% PETSMART, Inc. 23,800 789,922 -------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $179,273,566) 196,511,511 -------------------------------------------------------------------------------- PRINCIPAL SHORT-TERM INVESTMENTS--7.9% AMOUNT -------------------------------------------------------------------------------- U.S. AGENCY OBLIGATIONS Federal Home Loan Banks, 4.93%, 5/1/07 (Cost $16,728,000) $ 16,728,000 16,728,000 -------------------------------------------------------------------------------- ================================================================================ Total Investments (Cost $196,001,566)(a) 100.7% 213,239,511 Liabilities in Excess of Other Assets (0.7) (1,529,842) -------------------------------------------------------------------------------- NET ASSETS 100.0% $ 211,709,669 ================================================================================ * NON-INCOME PRODUCING SECURITY. # AMERICAN DEPOSITARY RECEIPTS. (a) AT APRIL 30, 2007, THE NET UNREALIZED APPRECIATION OF INVESTMENTS, BASED ON COST FOR FEDERAL INCOME TAX PURPOSES OF $197,176,424 AMOUNTED TO $16,063,087 WHICH CONSISTED OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $19,691,027 AND AGGREGATE GROSS UNREALIZED DEPRECIATION OF $3,627,940. SEE NOTES TO FINANCIAL STATEMENTS. -52- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP AND MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--94.5% SHARES VALUE --------------------------------------------------------------------------------------------------- AEROSPACE & DEFENSE--2.0% BE Aerospace, Inc.* 33,200 $ 1,216,780 SI International Inc.* 25,300 669,438 --------------------------------------------------------------------------------------------------- 1,886,218 --------------------------------------------------------------------------------------------------- AIRLINES--.8% AirTran Holdings, Inc.* 68,550 754,735 --------------------------------------------------------------------------------------------------- AUTO COMPONENTS--.8% LKQ Corporation* 33,400 754,172 --------------------------------------------------------------------------------------------------- AUTO EQUIPMENT & SERVICE--1.1% Tenneco Inc.* 33,650 1,007,817 --------------------------------------------------------------------------------------------------- BIOTECHNOLOGY--4.5% Cephalon, Inc.* 12,550 999,105 Gen-Probe Incorporated* 18,300 935,313 Onyx Pharmaceuticals, Inc.* 34,000 909,840 Regeneron Pharmaceuticals, Inc.* 28,950 787,440 Theravance, Inc.* 15,450 511,858 --------------------------------------------------------------------------------------------------- 4,143,556 --------------------------------------------------------------------------------------------------- BUSINESS SERVICES--.5% TeleTech Holdings Inc.* 11,950 450,873 --------------------------------------------------------------------------------------------------- CAPITAL MARKETS--2.0% Affiliated Managers Group, Inc.* 9,062 1,065,963 Greenhill & Co., Inc. 12,150 768,487 --------------------------------------------------------------------------------------------------- 1,834,450 --------------------------------------------------------------------------------------------------- CHEMICALS--.7% Zoltek Companies, Inc.* 22,450 683,378 --------------------------------------------------------------------------------------------------- COMMERCIAL BANKS--2.0% First Midwest Bancorp, Inc. 25,850 929,049 Signature Bank* 28,750 904,475 --------------------------------------------------------------------------------------------------- 1,833,524 --------------------------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--2.2% American Reprographics Co.* 28,700 952,840 FTI Consulting, Inc.* 29,100 1,070,007 --------------------------------------------------------------------------------------------------- 2,022,847 --------------------------------------------------------------------------------------------------- COMMUNICATION EQUIPMENT--1.9% Polycom, Inc.* 25,700 855,810 Sonus Networks, Inc.* 117,700 909,821 --------------------------------------------------------------------------------------------------- 1,765,631 --------------------------------------------------------------------------------------------------- COMMUNICATION TECHNOLOGY--1.1% Dobson Communications Corp. 108,150 985,246 ---------------------------------------------------------------------------------------------------
-53- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP AND MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- COMPUTER SERVICES--2.9% ANSYS, Inc.* 12,600 $ 645,120 Digital River, Inc.* 18,000 1,053,540 IHS Inc. Cl. A* 24,950 1,031,433 --------------------------------------------------------------------------------------------------- 2,730,093 --------------------------------------------------------------------------------------------------- COMPUTER TECHNOLOGY--1.1% Atheros Communications* 36,300 972,477 --------------------------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--1.2% URS Corporation* 25,700 1,123,090 --------------------------------------------------------------------------------------------------- CONSUMER PRODUCTS--1.0% Physicians Formula Holdings, Inc.* 44,700 939,594 --------------------------------------------------------------------------------------------------- CORRECTIONAL FACILITIES--1.2% The Geo Group Inc.* 21,000 1,075,200 --------------------------------------------------------------------------------------------------- DRUGS & PHARMACEUTICALS--.9% United Therapeutics Corporation* 14,550 813,490 --------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--1.0% AMETEK, Inc. 25,000 907,000 --------------------------------------------------------------------------------------------------- ELECTRIC AND ELECTRONIC EQUIPMENT--.9% Roper Industries, Inc. 15,600 874,536 --------------------------------------------------------------------------------------------------- ELECTRIC SERVICES--1.2% ITC Holdings Corp.* 26,950 1,134,056 --------------------------------------------------------------------------------------------------- ENERGY--1.6% Arch Coal, Inc. 14,650 528,425 SunPower Corporation Cl. A* 15,800 958,744 --------------------------------------------------------------------------------------------------- 1,487,169 --------------------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--2.9% Cameron International Corp.* 13,700 884,609 Grant Prideco, Inc.* 17,950 925,143 North American Energy Partner* 42,350 906,290 --------------------------------------------------------------------------------------------------- 2,716,042 --------------------------------------------------------------------------------------------------- FINANCE--1.5% Intercontinental Exchange Inc.* 5,750 730,250 WNS Holdings Limited* 25,200 669,816 --------------------------------------------------------------------------------------------------- 1,400,066 --------------------------------------------------------------------------------------------------- FINANCIAL INFORMATION SERVICES--1.0% GFI Group Inc.* 13,900 962,575 --------------------------------------------------------------------------------------------------- FOOD & BEVERAGES--1.1% Hain Celestial Group Inc. (The)* 35,050 1,052,551 --------------------------------------------------------------------------------------------------- HEALTH & PERSONAL CARE--1.2% Brookdale Senior Living Inc. 24,350 1,105,733 ---------------------------------------------------------------------------------------------------
-54- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP AND MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- HEALTH CARE--.7% Gentiva Health Services Inc.* 33,400 $ 625,248 --------------------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--4.6% Hologic, Inc.* 17,850 1,027,267 Illumina, Inc. 21,600 704,808 Intuitive Surgical, Inc.* 6,250 810,375 Thoratec Corporation* 32,400 635,688 Ventana Medical Systems, Inc.* 21,450 1,042,256 --------------------------------------------------------------------------------------------------- 4,220,394 --------------------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--2.5% Parexel International Corporation* 29,100 1,143,048 Psychiatric Solutions, Inc.* 32,450 1,138,022 --------------------------------------------------------------------------------------------------- 2,281,070 --------------------------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--2.8% Cheesecake Factory Incorporated (The)* 31,050 856,980 Orient-Express Hotels Ltd. Cl. A. 16,200 852,930 Scientific Games Corporation* 27,650 920,469 --------------------------------------------------------------------------------------------------- 2,630,379 --------------------------------------------------------------------------------------------------- INSURANCE--.8% First Mercury Financial Corporation* 37,400 774,180 --------------------------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--1.2% Priceline.com Incorporated* 19,250 1,071,070 --------------------------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--3.7% Acme Packet, Inc.* 40,500 547,155 Allscripts Healthcare Solutions, Inc.* 37,700 997,165 DealerTrack Holdings Inc.* 33,789 1,115,037 Omniture Inc.* 39,150 737,586 --------------------------------------------------------------------------------------------------- 3,396,943 --------------------------------------------------------------------------------------------------- IT SERVICES--.6% Wright Express Corp.* 18,950 597,115 --------------------------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS--1.0% LIFE TIME FITNESS, Inc.* 18,450 948,330 --------------------------------------------------------------------------------------------------- MACHINERY--1.8% Bucyrus International, Inc. Cl. A 15,750 988,155 Manitowoc Company, Inc. 10,450 713,004 --------------------------------------------------------------------------------------------------- 1,701,159 --------------------------------------------------------------------------------------------------- MEDIA--3.2% Focus Media Holding Limited ADR*# 28,150 1,041,550 NeuStar, Inc. Cl. A* 30,300 871,428 Regal Entertainment Group 48,900 1,063,575 --------------------------------------------------------------------------------------------------- 2,976,553 ---------------------------------------------------------------------------------------------------
-55- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP AND MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- MEDICAL DEVICES--.5% Dexcom Inc.* 53,000 $ 422,410 --------------------------------------------------------------------------------------------------- MEDICAL PRODUCTS--1.5% Indevus Pharmaceuticals, Inc.* 62,500 450,625 Inverness Medical Innovations, Inc.* 11,700 468,585 Northstar Neuroscience, Inc.* 35,300 480,786 --------------------------------------------------------------------------------------------------- 1,399,996 --------------------------------------------------------------------------------------------------- METALS--2.2% Blue Pearl Mining Ltd.* 29,700 475,200 SXR Uranium One, Inc.* 62,100 930,258 Yamana Gold, Inc. 43,250 604,203 --------------------------------------------------------------------------------------------------- 2,009,661 --------------------------------------------------------------------------------------------------- METALS & MINING--.8% Breakwater Resources, Ltd.* 377,450 717,155 --------------------------------------------------------------------------------------------------- OIL & GAS--2.6% Carrizo Oil & Gas, Inc.* 21,900 807,015 Range Resources Corporation 22,250 813,238 Warren Resources Inc.* 62,750 828,928 --------------------------------------------------------------------------------------------------- 2,449,181 --------------------------------------------------------------------------------------------------- OIL AND GAS EXPLORATION SERVICES--.8% Petrobank Energy and Resources Ltd.* 37,700 764,179 --------------------------------------------------------------------------------------------------- PHARMACEUTICAL PREPARATIONS--.8% Adams Respiratory Therapeutics, Inc.* 19,850 744,574 --------------------------------------------------------------------------------------------------- PHARMACEUTICALS--.5% Pharmion Corp.* 16,600 502,814 --------------------------------------------------------------------------------------------------- REAL ESTATE--1.1% Jones Lang LaSalle Incorporated 9,200 988,908 --------------------------------------------------------------------------------------------------- RESTAURANTS--.9% McCormick & Schmick's Seafood Restaurants, Inc.* 32,500 870,025 --------------------------------------------------------------------------------------------------- RETAIL--2.1% bebe Stores, Inc. 53,150 930,125 Phillips-Van Heusen Corporation 17,700 989,430 --------------------------------------------------------------------------------------------------- 1,919,555 --------------------------------------------------------------------------------------------------- SEMICONDUCTOR CAPITAL EQUIPMENT--1.0% FormFactor Inc.* 12,550 518,190 SiRF Technology Holdings, Inc.* 17,900 434,254 --------------------------------------------------------------------------------------------------- 952,444 --------------------------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.7% Applied Micro Circuits Corporation* 158,700 445,947 ATMI, Inc.* 20,300 627,879 Cypress Semiconductor Corporation* 40,450 923,069 ON Semiconductor Corporation* 70,450 754,520 Ultra Clean Holdings, Inc.* 43,450 636,108 --------------------------------------------------------------------------------------------------- 3,387,523 ---------------------------------------------------------------------------------------------------
-56- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER SMALLCAP AND MIDCAP GROWTH FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
COMMON STOCKS--(CONT.) SHARES VALUE --------------------------------------------------------------------------------------------------- SOFTWARE--3.3% Synchronoss Technologies Inc.* 56,800 $ 1,274,592 Tibco Software Inc.* 95,450 870,504 VeriFone Holdings Inc.* 26,900 949,301 --------------------------------------------------------------------------------------------------- 3,094,397 --------------------------------------------------------------------------------------------------- SPECIALTY RETAIL--5.0% Aeropostale, Inc.* 22,000 905,300 Carter's, Inc.* 23,750 622,250 Gamestop Corp. Cl. A* 29,700 985,149 Tiffany & Co. 23,100 1,101,639 Urban Outfitters, Inc.* 41,200 1,061,312 --------------------------------------------------------------------------------------------------- 4,675,650 --------------------------------------------------------------------------------------------------- TELEPHONE COMMUNICATION--1.2% NICE Systems Ltd.* 29,800 1,092,170 --------------------------------------------------------------------------------------------------- TEXTILES & APPAREL--1.1% Iconix Brand Group, Inc.* 48,950 985,364 --------------------------------------------------------------------------------------------------- TRADING COMPANIES & DISTRIBUTORS--1.0% Williams Scotsman International Inc.* 41,900 923,057 --------------------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--1.2% SBA Communications Corporation Cl. A* 37,450 1,101,779 --------------------------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost $75,082,138) 87,639,402 ---------------------------------------------------------------------------------------------------
PRINCIPAL SHORT-TERM INVESTMENTS--5.4% AMOUNT --------------------------------------------------------------------------------------------------- U.S. GOVERNMENT & AGENCY OBLIGATIONS Federal Home Loan Bank, 4.93%, 5/1/07 (Cost $5,040,000) $ 5,040,000 5,040,000 --------------------------------------------------------------------------------------------------- =================================================================================================== Total Investments (Cost $80,122,138)(a) 99.9% 92,679,402 Other Assets in Excess of Liabilities 0.1 27,880 --------------------------------------------------------------------------------------------------- NET ASSETS 100.0% $ 92,707,282 ===================================================================================================
* NON-INCOME PRODUCING SECURITY. # AMERICAN DEPOSITARY RECEIPTS. (a) AT APRIL 30, 2007, THE NET UNREALIZED APPRECIATION OF INVESTMENTS, BASED ON COST FOR FEDERAL INCOME TAX PURPOSES OF $80,122,138 AMOUNTED TO $12,557,264 WHICH CONSISTED OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $13,257,944 AND AGGREGATE GROSS UNREALIZED DEPRECIATION OF $700,680. SEE NOTES TO FINANCIAL STATEMENTS. -57- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER CORE FIXED-INCOME FUND SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2007 --------------------------------------------------------------------------------
PRINCIPAL CORPORATE BONDS--59.6% AMOUNT VALUE --------------------------------------------------------------------------------------------------- AEROSPACE & DEFENSE--1.7% L-3 Communications Holdings, 3.00%, 8/1/35 $ 50,000 $ 54,313 --------------------------------------------------------------------------------------------------- AUTOMOTIVE--3.1% Capital Auto Receivables Asset Trust, 5.32%, 3/20/10(a) 100,000 100,223 --------------------------------------------------------------------------------------------------- BUILDING & CONSTRUCTION--.9% Martin Marietta Materials Inc., 6.25%, 5/1/37 30,000 30,305 --------------------------------------------------------------------------------------------------- CAPITAL MARKETS--.9% Morgan Stanley, 5.55%, 4/27/17 30,000 29,967 --------------------------------------------------------------------------------------------------- COMMERCIAL BANKS--4.7% Banc of America Commercial Mortgage Inc., 5.634%, 7/10/46 75,000 76,315 Wachovia Bank Commercial Mortgage Trust, 5.34%, 12/15/43 75,000 74,690 --------------------------------------------------------------------------------------------------- 151,005 --------------------------------------------------------------------------------------------------- COMMUNICATION EQUIPMENT--1.2% CenturyTel, Inc., 6.00%, 4/1/17 40,000 40,012 --------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE--1.6% Seagate Technology HDD H, 6.80%, 10/1/16 50,000 49,812 --------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--7.4% Appalachian Power Co., 5.55%, 4/1/11 65,000 65,722 Exelon Corporation, 4.90%, 6/15/15 50,000 47,567 General Electric Capital Corp., 5.50%, 11/15/11 50,000 50,027 WPS Resources Co., 6.11%, 12/1/66 75,000 74,754 --------------------------------------------------------------------------------------------------- 238,070 --------------------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--2.2% Cameron International Corp., 2.50%, 6/15/26 60,000 69,450 --------------------------------------------------------------------------------------------------- FINANCE--4.5% Merrill Lynch Mortgage Trust, 5.84%, 5/12/39 75,000 76,953 SLM Corp., 5.375%, 5/15/14 75,000 68,539 --------------------------------------------------------------------------------------------------- 145,492 --------------------------------------------------------------------------------------------------- FINANCIAL SERVICES--10.9% American Tower Trust, 5.96%, 4/15/37 50,000 50,293 JP Morgan Chase Commercial Mortgage SEC CO., 5.875%, 4/15/45 100,000 104,001 Morgan Stanley Capital I, 5.44%, 2/20/44 75,000 75,533 Morgan Stanley Capital I, 5.51%, 11/12/49 100,000 100,944 Regions Financing Trust II, 6.625%, 5/15/47 20,000 20,035 --------------------------------------------------------------------------------------------------- 350,806 --------------------------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--1.2% Coventry Health Care, Inc., 5.95%, 3/15/17 40,000 39,932 ---------------------------------------------------------------------------------------------------
-58- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER CORE FIXED-INCOME FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
PRINCIPAL CORPORATE BONDS--(CONT.) AMOUNT VALUE --------------------------------------------------------------------------------------------------- INSURANCE--6.6% Everest Reinsurance Holdings, 6.60%, 5/15/37 $ 10,000 $ 10,054 Liberty Mutual Group, 7.80%, 3/15/37 50,000 50,404 Radian Group Inc., 7.75%, 6/1/11 50,000 54,339 Willis Group North America, 6.20%, 3/28/17 50,000 50,272 XL Capital Ltd., 6.50%, 12/31/49 50,000 49,440 --------------------------------------------------------------------------------------------------- 214,509 --------------------------------------------------------------------------------------------------- MANUFACTURING--1.9% Reliance Steel & Alum, 6.85%, 11/15/36 60,000 60,646 --------------------------------------------------------------------------------------------------- OIL AND GAS EXTRACTION--1.4% Enterprise Products Partners, 8.375%, 8/1/66 40,000 44,366 --------------------------------------------------------------------------------------------------- PHARMACEUTICALS--2.3% Wyeth, 5.95%, 4/1/37 75,000 75,255 --------------------------------------------------------------------------------------------------- SOFTWARE--2.8% Computer Associates International Inc., 6.50%, 4/15/08 90,000 91,120 --------------------------------------------------------------------------------------------------- SPECIALTY RETAIL--2.0% AutoZone, Inc., 6.95%, 6/15/16 60,000 64,761 --------------------------------------------------------------------------------------------------- UTILITIES--2.3% Southern Co., 5.30%, 1/15/12 75,000 75,611 --------------------------------------------------------------------------------------------------- TOTAL CORPORATE BONDS (Cost $1,902,227) 1,925,655 --------------------------------------------------------------------------------------------------- U.S. GOVERNMENT & AGENCY OBLIGATIONS--28.6% --------------------------------------------------------------------------------------------------- Federal National Mortgage Association, 4.50%, 2/15/11 50,000 49,560 Federal Home Loan Bank, 5.10%, 3/6/08 100,000 99,988 Federal Home Loan Mortgage Corporation, 5.50%, 10/15/16 54,075 54,513 6.00%, 3/15/36 48,338 48,692 5.50%, 9/15/36 97,740 97,836 Government National Mortgage Association, 5.00%, 5/16/29 140,564 139,893 U.S. Treasury Notes, 4.375%, 1/31/08 75,000 74,672 4.75%, 11/15/08 80,000 80,037 4.50%, 2/28/11 50,000 50,006 4.625%, 8/31/11 80,000 80,397 4.875%, 2/15/12 50,000 50,830 4.25%, 11/15/13 100,000 98,371 --------------------------------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (Cost $921,906) 924,795 ---------------------------------------------------------------------------------------------------
-59- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER CORE FIXED-INCOME FUND SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) APRIL 30, 2007 --------------------------------------------------------------------------------
PRINCIPAL SHORT-TERM INVESTMENTS--12.4% AMOUNT VALUE --------------------------------------------------------------------------------------------------- U.S. AGENCY OBLIGATIONS Federal Home Loan Bank, 4.93%, 5/1/07 (Cost $399,000) $ 399,000 $ 399,000 --------------------------------------------------------------------------------------------------- =================================================================================================== Total Investments (Cost $3,223,133)(b) 100.6% 3,249,450 Liabilities in Excess of Other Assets (0.6) (20,056) --------------------------------------------------------------------------------------------------- NET ASSETS 100.0% $ 3,229,394 ===================================================================================================
(a) PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 144A, THESE SECURITIES MAY BE SOLD PRIOR TO THEIR MATURITY ONLY TO QUALIFIED INSTITUTIONAL BUYERS. THESE SECURITIES ARE DEEMED TO BE LIQUID AND REPRESENT 3.1% OF THE NET ASSETS OF THE FUND. (b) AT APRIL 30, 2007, THE NET UNREALIZED APPRECIATION ON INVESTMENTS, BASED ON COST FOR FEDERAL INCOME TAX PURPOSES OF $3,223,387 AMOUNTED TO $26,063 WHICH CONSISTED OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $29,070 AND AGGREGATE GROSS UNREALIZED DEPRECIATION OF $3,007. SEE NOTES TO FINANCIAL STATEMENTS. -60- -------------------------------------------------------------------------------- THE ALGER FUNDS | ALGER MONEY MARKET FUND SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 2007 --------------------------------------------------------------------------------
PRINCIPAL U.S. AGENCY OBLIGATIONS--98.2% AMOUNT VALUE --------------------------------------------------------------------------------------------------- Federal Home Loan Bank, 5.08%, 7/6/07 $ 7,800,000 $ 7,727,356 5.09%, 6/15/07 8,450,000 8,396,237 4.93%, 5/1/07 28,370,000 28,370,000 Federal National Mortgage Association, 5.10%, 6/20/07 8,450,000 8,390,146 --------------------------------------------------------------------------------------------------- TOTAL U.S. AGENCY OBLIGATIONS (Cost $52,883,739) 52,883,739 --------------------------------------------------------------------------------------------------- =================================================================================================== Total Investments (Cost $52,883,739)(a) 98.2% 52,883,739 Other Assets in Excess of Liabilities 1.8 976,646 --------------------------------------------------------------------------------------------------- NET ASSETS 100.0% $ 53,860,385 ===================================================================================================
(a) AT APRIL 30, 2007, THE NET UNREALIZED APPRECIATION ON INVESTMENTS, BASED ON COST OF FEDERAL INCOME TAX PURPOSES WAS THE SAME AS THE COST FOR FINANCIAL REPORTING PURPOSES. SEE NOTES TO FINANCIAL STATEMENTS. -61- -------------------------------------------------------------------------------- THE ALGER FUNDS STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2007 (in thousands, except per share amounts) -------------------------------------------------------------------------------- LARGECAP GROWTH FUND -------------------------------------------------------------------------------- ASSETS: Investments in securities, at value (identified cost*)-- see accompanying schedules of investments $ 421,180 Cash 26 Receivable for investment securities sold 6,296 Receivable for shares of beneficial interest sold 237 Dividends and interest receivable 162 Receivable from Investment Advisor -- Prepaid expenses 211 -------------------------------------------------------------------------------- Total Assets 428,112 ================================================================================ LIABILITES: Payable for investment securities purchased 11,763 Written options outstanding 464 Payable for shares of beneficial interest redeemed 1,246 Interest payable -- Accrued investment advisory fees 250 Accrued transfer agent fees 107 Accrued distribution fees 159 Accrued shareholder servicing fees 88 Accrued administrative fees 14 Accrued expenses 96 -------------------------------------------------------------------------------- Total Liabilites 14,187 -------------------------------------------------------------------------------- NET ASSETS $ 413,925 ================================================================================ NET ASSETS CONSIST OF: Paid in capital $ 547,027 Undistributed net investment income (accumulated loss) (692) Undistributed net realized gain (accumulated loss) (161,992) Net unrealized appreciation (depreciation) of investments 29,582 -------------------------------------------------------------------------------- NET ASSETS $ 413,925 -------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING--NOTE 6 CLASS A 13,441 -------------------------------------------------------------------------------- CLASS B 18,539 -------------------------------------------------------------------------------- CLASS C 3,565 -------------------------------------------------------------------------------- CLASS A -- NET ASSET VALUE PER SHARE $ 12.30 -------------------------------------------------------------------------------- CLASS A -- OFFERING PRICE PER SHARE $ 12.98 -------------------------------------------------------------------------------- CLASS B -- NET ASSET VALUE AND OFFERING PRICE PER SHARE $ 11.25 -------------------------------------------------------------------------------- CLASS C -- NET ASSET VALUE AND OFFERING PRICE PER SHARE $ 11.24 -------------------------------------------------------------------------------- *Identified cost $ 391,777 ================================================================================ SEE NOTES TO FINANCIAL STATEMENTS. -62- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
SMALLCAP MIDCAP CAPITAL HEALTH SMALLCAP GROWTH BALANCED GROWTH APPRECIATION SCIENCES AND MIDCAP FUND FUND FUND FUND FUND GROWTH FUND ----------------------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in securities, at value (identified cost*)-- see accompanying schedules of investments $ 483,899 $ 109,007 $ 630,762 $ 430,000 $ 213,240 $ 92,679 Cash 1,489 206 731 2,787 868 54 Receivable for investment securities sold 8,710 1,531 24,285 18,281 5,330 3,204 Receivable for shares of beneficial interest sold 6,625 76 644 2,800 1,991 2,157 Dividends and interest receivable 17 396 60 98 49 -- Receivable from Investment Advisor -- -- -- -- -- -- Prepaid expenses 63 11 76 58 38 29 ----------------------------------------------------------------------------------------------------------------------------------- Total Assets 500,803 111,227 656,558 454,024 221,516 98,123 =================================================================================================================================== LIABILITES: Payable for investment securities purchased 12,012 3,392 45,416 17,974 9,233 5,188 Written options outstanding -- -- 1,788 -- -- -- Payable for shares of beneficial interest redeemed 472 457 2,118 927 226 87 Interest payable 5 -- 5 6 -- -- Accrued investment advisory fees 308 57 390 302 147 60 Accrued transfer agent fees 69 36 174 132 34 12 Accrued distribution fees 60 48 177 150 46 19 Accrued shareholder servicing fees 95 23 128 93 45 19 Accrued administrative fees 15 4 21 15 7 3 Accrued expenses 101 49 189 92 68 28 ----------------------------------------------------------------------------------------------------------------------------------- Total Liabilites 13,137 4,066 50,406 19,691 9,806 5,416 ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 487,666 $ 107,161 $ 606,152 $ 434,333 $ 211,710 $ 92,707 =================================================================================================================================== NET ASSETS CONSIST OF: Paid in capital $ 491,547 $ 118,372 $ 496,609 $ 805,663 $ 180,561 $ 75,635 Undistributed net investment income (accumulated loss) (1,963) 222 (2,916) (1,939) (663) (364) Undistributed net realized gain (accumulated loss) (72,507) (16,557) 57,821 (399,747) 14,574 4,879 Net unrealized appreciation (depreciation) of investments 70,589 5,124 54,638 30,356 17,238 12,557 ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 487,666 $ 107,161 $ 606,152 $ 434,333 $ 211,710 $ 92,707 ----------------------------------------------------------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING--NOTE 6 CLASS A 56,386 1,424 35,376 15,874 7,603 4,011 ----------------------------------------------------------------------------------------------------------------------------------- CLASS B 9,064 2,654 24,844 15,496 1,185 696 ----------------------------------------------------------------------------------------------------------------------------------- CLASS C 5,680 753 8,434 3,871 2,798 1,464 ----------------------------------------------------------------------------------------------------------------------------------- CLASS A -- NET ASSET VALUE PER SHARE $ 6.98 $ 22.47 $ 9.32 $ 12.89 $ 18.52 $ 15.23 ----------------------------------------------------------------------------------------------------------------------------------- CLASS A -- OFFERING PRICE PER SHARE $ 7.37 $ 23.72 $ 9.84 $ 13.60 $ 19.55 $ 16.07 ----------------------------------------------------------------------------------------------------------------------------------- CLASS B -- NET ASSET VALUE AND OFFERING PRICE PER SHARE $ 6.36 $ 22.05 $ 8.31 $ 11.86 $ 17.81 $ 14.63 ----------------------------------------------------------------------------------------------------------------------------------- CLASS C -- NET ASSET VALUE AND OFFERING PRICE PER SHARE $ 6.37 $ 22.14 $ 8.29 $ 11.85 $ 17.80 $ 14.64 ----------------------------------------------------------------------------------------------------------------------------------- *Identified cost $ 413,310 $ 103,883 $ 575,872 $ 399,644 $ 196,002 $ 80,122 ===================================================================================================================================
-63- -------------------------------------------------------------------------------- THE ALGER FUNDS STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 2007 (in thousands, except per share amounts) --------------------------------------------------------------------------------
CORE MONEY FIXED-INCOME MARKET FUND FUND --------------------------------------------------------------------------------------------- ASSETS: Investments in securities, at value (identified cost*)-- see accompanying schedules of investments $ 3,249 $ 52,884 Cash -- 4 Receivable for investment securities sold 40 -- Receivable for shares of beneficial interest sold 1 1,079 Dividends and interest receivable 28 -- Receivable from Investment Advisor 4 -- Prepaid expenses 22 16 --------------------------------------------------------------------------------------------- Total Assets 3,344 53,983 ============================================================================================= LIABILITES: Payable for investment securities purchased 100 -- Payable for shares of beneficial interest redeemed -- 55 Accrued investment advisory fees 1 19 Accrued transfer agent fees -- 11 Accrued distribution fees 1 -- Accrued administrative fees -- 2 Accrued shareholder servicing fees 1 -- Dividend payable 1 3 Accrued expenses 10 33 --------------------------------------------------------------------------------------------- Total Liabilites 114 123 --------------------------------------------------------------------------------------------- NET ASSETS $ 3,230 $ 53,860 ============================================================================================= NET ASSETS CONSIST OF: Paid in capital $ 3,218 $ 54,078 Undistributed net investment income 3 -- Undistributed net realized gain (accumulated loss) (17) (218) Net unrealized appreciation (depreciation) of investments 26 -- --------------------------------------------------------------------------------------------- NET ASSETS $ 3,230 $ 53,860 --------------------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING--NOTE 6 CLASS A 219 -- --------------------------------------------------------------------------------------------- CLASS B 60 53,957 --------------------------------------------------------------------------------------------- CLASS C 44 -- --------------------------------------------------------------------------------------------- CLASS A -- NET ASSET VALUE PER SHARE $ 10.00 -- --------------------------------------------------------------------------------------------- CLASS A -- OFFERING PRICE PER SHARE $ 10.50 -- --------------------------------------------------------------------------------------------- CLASS B -- NET ASSET VALUE AND OFFERING PRICE PER SHARE $ 9.99 $ 1.00 --------------------------------------------------------------------------------------------- CLASS C -- NET ASSET VALUE AND OFFERING PRICE PER SHARE $ 9.99 -- --------------------------------------------------------------------------------------------- *Identified cost $ 3,223 $ 52,884 =============================================================================================
SEE NOTES TO FINANCIAL STATEMENTS. -64- -------------------------------------------------------------------------------- THE ALGER FUNDS STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands) FOR THE SIX MONTHS ENDED APRIL 30, 2007 --------------------------------------------------------------------------------
LARGECAP SMALLCAP GROWTH GROWTH FUND FUND --------------------------------------------------------------------------------------------- INCOME: Dividends (net of foreign withholding taxes*) $ 2,072 $ 345 Interest 1,055 569 --------------------------------------------------------------------------------------------- Total Income 3,127 914 ============================================================================================= EXPENSES: Investment advisory fees--Note 3(a) 1,478 1,447 Distribution fees--Note 3(b) Class B 803 215 Class C 149 94 Shareholder servicing fees--Note 3(f) 519 446 Administrative fees--Note 3(a) 80 69 Interest on line of credit utilized--Note 5 9 -- Custodian fees 25 22 Transfer agent fees and expenses 468 337 Professional fees 69 59 Registration fees 20 21 Miscellaneous 199 167 --------------------------------------------------------------------------------------------- Total Expenses 3,819 2,877 --------------------------------------------------------------------------------------------- NET INVESTMENT LOSS (692) (1,963) ============================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS AND CURRENCY TRANSACTIONS: Net realized gain on investments 36,709 18,283 Net realized loss on foreign currency transactions (13) -- Net realized gain on options written 409 -- Net change in unrealized appreciation (depreciation) on investments and foreign currency translations 4,371 19,387 Net change in unrealized appreciation (depreciation) on options (20) -- --------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments, options and foreign currency 41,456 37,670 --------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 40,764 $ 35,707 ============================================================================================= * Foreign withholding taxes $ 69 $ -- ---------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS. -65- -------------------------------------------------------------------------------- THE ALGER FUNDS STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands) FOR THE SIX MONTHS ENDED APRIL 30, 2007 --------------------------------------------------------------------------------
MIDCAP BALANCED GROWTH FUND FUND --------------------------------------------------------------------------------------------- INCOME: Dividends (net of foreign withholding taxes*) $ 398 $ 1,726 Interest 1,146 583 --------------------------------------------------------------------------------------------- Total Income 1,544 2,309 ============================================================================================= EXPENSES: Investment advisory fees--Note 3 (a) 414 2,270 Distribution fees--Note 3 (b) Class B 234 779 Class C 70 258 Shareholder servicing fees--Note 3 (f) 146 745 Administrative fees--Note 3(a) 22 115 Interest on line of credit utilized--Note 5 17 22 Custodian fees 16 49 Transfer agent fees and expenses 133 577 Professional fees 13 94 Registration fees 16 13 Miscellaneous 50 303 --------------------------------------------------------------------------------------------- Total Expenses 1,131 5,225 Less, expense reimbursements--Note 3 (a) (42) -- --------------------------------------------------------------------------------------------- Net Expenses 1,089 5,225 --------------------------------------------------------------------------------------------- NET INVESTMENT INCOME (LOSS) 455 (2,916) ============================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS AND CURRENCY TRANSACTIONS: Net realized gain on investments 8,595 74,207 Net realized loss on foreign currency transactions (3) (46) Net realized gain on options written -- 1,433 Net change in unrealized appreciation (depreciation) on investments and foreign currency translations (515) 16,689 Net change in unrealized appreciation (depreciation) on options -- (247) --------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments, options and foreign currency 8,077 92,036 --------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,532 $ 89,120 ============================================================================================= * Foreign withholding taxes $ 12 $ 3 =============================================================================================
SEE NOTES TO FINANCIAL STATEMENTS. -66- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
CAPITAL HEALTH SMALLCAP CORE MONEY APPRECIATION SCIENCES AND MIDCAP FIXED-INCOME MARKET FUND FUND GROWTH FUND FUND FUND -------------------------------------------------------------------------------------------------------------------------------- INCOME: Dividends (net of foreign withholding taxes*) $ 1,801 $ 559 $ 138 $ -- $ -- Interest 111 346 93 91 1,381 -------------------------------------------------------------------------------------------------------------------------------- Total Income 1,912 905 231 91 1,381 ================================================================================================================================ EXPENSES: Investment advisory fees--Note 3 (a) 1,595 771 283 6 123 Distribution fees--Note 3 (b) Class B 681 82 32 2 -- Class C 147 175 58 2 -- Shareholder servicing fees--Note 3 (f) 492 238 87 4 -- Administrative fees--Note 3(a) 76 37 14 1 10 Interest on line of credit utilized--Note 5 76 -- 3 -- -- Custodian fees 31 12 13 3 6 Transfer agent fees and expenses 548 129 48 2 55 Professional fees 43 29 10 3 2 Registration fees 16 28 16 27 10 Miscellaneous 146 67 31 6 22 -------------------------------------------------------------------------------------------------------------------------------- Total Expenses 3,851 1,568 595 56 228 Less, expense reimbursements--Note 3 (a) -- -- -- (36) -- -------------------------------------------------------------------------------------------------------------------------------- Net Expenses 3,851 1,568 595 20 228 -------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME (LOSS) (1,939) (663) (364) 71 1,153 ================================================================================================================================ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS AND CURRENCY TRANSACTIONS: Net realized gain on investments 58,170 15,750 4,877 17 -- Net realized loss on foreign currency transactions (11) -- -- -- -- Net realized gain on options written -- -- -- -- -- Net change in unrealized appreciation (depreciation) on investments and foreign currency translations 3,752 (1,937) 5,055 (13) -- Net change in unrealized appreciation (depreciation) on options 52 55 -- -- -- -------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain on investments, options and foreign currency 61,963 13,868 9,932 4 -- -------------------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 60,024 $ 13,205 $ 9,568 $ 75 $1,153 ================================================================================================================================ * Foreign withholding taxes $ 2 $ -- $ -- $ -- $ -- ================================================================================================================================
-67- -------------------------------------------------------------------------------- THE ALGER FUNDS STATEMENTS OF CHANGES IN NET ASSETS (in thousands) --------------------------------------------------------------------------------
LARGECAP GROWTH FUND ------------------------------------------------------------------------------------------------ For the Six Months Ended For the April 30, Year Ended 2007 October 31, (Unaudited) 2006 ------------------------------------------------------------------------------------------------ Net investment income (loss) $ (692) $ (2,830) Net realized gain on investments, options and foreign currency transactions 37,105 31,550 Net change in unrealized appreciation (depreciation) on investments, options and foreign currency translations 4,351 (4,513) ------------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations 40,764 24,207 ------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders from: Net investment income Class A -- -- Class B -- -- Class C -- -- Net realized gains Class A -- -- Class B -- -- Class C -- -- ------------------------------------------------------------------------------------------------ Total dividends and distributions to shareholders -- -- ------------------------------------------------------------------------------------------------ Increase (decrease) from shares of beneficial interest transactions: Class A (8,186) (8,917) Class B (33,379) (52,808) Class C (3,908) (1,459) ------------------------------------------------------------------------------------------------ Net increase (decrease) from shares of beneficial interest transactions--Note 6 (45,473) (63,184) ------------------------------------------------------------------------------------------------ Total increase (decrease) (4,709) (38,977) ------------------------------------------------------------------------------------------------ Net Assets: Beginning of period 418,634 457,611 ------------------------------------------------------------------------------------------------ END OF PERIOD $ 413,925 $ 418,634 ================================================================================================ Undistributed net investment income (accumulated loss) $ (692) $ -- ================================================================================================
SEE NOTES TO FINANCIAL STATEMENTS. -68- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
SMALLCAP GROWTH FUND BALANCED FUND ---------------------------------------------------------------------------------------------------------------------------------- For the For the Six Months Ended For the Six Months Ended For the April 30, Year Ended April 30, Year Ended 2007 October 31, 2007 October 31, (Unaudited) 2006 (Unaudited) 2006 ---------------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) $ (1,963) $ (2,716) $ 455 $ 957 Net realized gain on investments, options and foreign currency transactions 18,283 18,474 8,592 7,121 Net change in unrealized appreciation (depreciation) on investments, options and foreign currency translations 19,387 27,188 (515) (1,092) ---------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 35,707 42,946 8,532 6,986 ---------------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders from: Net investment income Class A -- -- (601) (538) Class B -- -- (369) (205) Class C -- -- (131) (65) Net realized gains Class A -- -- -- -- Class B -- -- -- -- Class C -- -- -- -- ---------------------------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders -- -- (1,101) (808) ---------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from shares of beneficial interest transactions: Class A 145,148 80,645 (13,380) (12,201) Class B (5,839) (14,826) (12,743) (22,674) Class C 16,123 10,828 (6,898) (4,035) ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from shares of beneficial interest transactions--Note 6 155,432 76,647 (33,021) (38,910) ---------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) 191,139 119,593 (25,590) (32,732) ---------------------------------------------------------------------------------------------------------------------------------- Net Assets: Beginning of period 296,527 176,934 132,751 165,483 ---------------------------------------------------------------------------------------------------------------------------------- END OF PERIOD $ 487,666 $ 296,527 $ 107,161 $ 132,751 ================================================================================================================================== Undistributed net investment income (accumulated loss) $ (1,963) $ -- $ 222 $ 868 ================================================================================================================================== MIDCAP GROWTH FUND ------------------------------------------------------------------------------------------------ For the Six Months Ended For the April 30, Year Ended 2007 October 31, (Unaudited) 2006 ------------------------------------------------------------------------------------------------ Net investment income (loss) $ (2,916) $ (7,435) Net realized gain on investments, options and foreign currency transactions 75,594 60,103 Net change in unrealized appreciation (depreciation) on investments, options and foreign currency translations 16,442 (405) ------------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations 89,120 52,263 ------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders from: Net investment income Class A -- -- Class B -- -- Class C -- -- Net realized gains Class A (33,472) (34,821) Class B (24,034) (30,115) Class C (7,865) (8,656) ------------------------------------------------------------------------------------------------ Total dividends and distributions to shareholders (65,371) (73,592) ------------------------------------------------------------------------------------------------ Increase (decrease) from shares of beneficial interest transactions: Class A (4,020) 8,347 Class B (12,428) (38,443) Class C (1,432) (686) ------------------------------------------------------------------------------------------------ Net increase (decrease) from shares of beneficial interest transactions--Note 6 (17,880) (30,782) ------------------------------------------------------------------------------------------------ Total increase (decrease) 5,869 (52,111) ------------------------------------------------------------------------------------------------ Net Assets: Beginning of period 600,283 652,394 ------------------------------------------------------------------------------------------------ END OF PERIOD $ 606,152 $ 600,283 ================================================================================================ Undistributed net investment income (accumulated loss) $ (2,916) $ -- ================================================================================================
-69- -------------------------------------------------------------------------------- THE ALGER FUNDS STATEMENTS OF CHANGES IN NET ASSETS (in thousands) --------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND ------------------------------------------------------------------------------------------------ For the Six Months Ended For the April 30, Year Ended 2007 October 31, (Unaudited) 2006 ------------------------------------------------------------------------------------------------ Net investment income (loss) $ (1,939) $ (3,712) Net realized gain (loss) on investments, options and foreign currency transactions 58,159 81,450 Net change in unrealized appreciation (depreciation) on investments, options and foreign currency translations 3,804 (15,588) ------------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations 60,024 62,150 ------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders from: Net investment income Class A -- -- Class B -- -- Class C -- -- Net realized gains Class A -- -- Class B -- -- Class C -- -- ------------------------------------------------------------------------------------------------ Total dividends and distributions to shareholders -- -- ------------------------------------------------------------------------------------------------ Increase (decrease) from shares of beneficial interest transactions: Class A 25,241 (768) Class B (23,433) (44,868) Class C 5,054 (4,502) ------------------------------------------------------------------------------------------------ Net increase (decrease) from shares of beneficial interest transactions--Note 6 6,862 (50,138) ------------------------------------------------------------------------------------------------ Total increase (decrease) 66,886 12,012 ------------------------------------------------------------------------------------------------ Net Assets: Beginning of period 367,447 355,435 ------------------------------------------------------------------------------------------------ END OF PERIOD $ 434,333 $ 367,447 ================================================================================================ Undistributed net investment income (accumulated loss) $ (1,939) $ -- ================================================================================================
*Commenced operations March 1, 2006. SEE NOTES TO FINANCIAL STATEMENTS. -70- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
HEALTH SCIENCES FUND SMALLCAP AND MIDCAP GROWTH FUND ---------------------------------------------------------------------------------------------------------------------------------- For the For the Six Months Ended For the Six Months Ended For the April 30, Year Ended April 30, Year Ended 2007 October 31, 2007 October 31, (Unaudited) 2006 (Unaudited) 2006 ---------------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) $ (663) $ (1,092) $ (364) $ (454) Net realized gain (loss) on investments, options and foreign currency transactions 15,750 8,875 4,877 2,734 Net change in unrealized appreciation (depreciation) on investments, options and foreign currency translations (1,882) 11,223 5,055 3,228 ---------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 13,205 19,006 9,568 5,508 ---------------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders from: Net investment income Class A -- -- -- -- Class B -- -- -- -- Class C -- -- -- -- Net realized gains Class A (5,404) (1,897) (1,703) (960) Class B (1,129) (395) (388) (219) Class C (2,269) (646) (642) (172) ---------------------------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (8,802) (2,938) (2,733) (1,351) ---------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from shares of beneficial interest transactions: Class A 21,337 55,381 22,982 16,175 Class B (2,167) 4,670 2,193 3,405 Class C 3,030 16,912 8,087 9,262 ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) from shares of beneficial interest transactions--Note 6 22,200 76,963 33,262 28,842 ---------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) 26,603 93,031 40,097 32,999 ---------------------------------------------------------------------------------------------------------------------------------- Net Assets: Beginning of period 185,107 92,076 52,610 19,611 ---------------------------------------------------------------------------------------------------------------------------------- END OF PERIOD $ 211,710 $ 185,107 $ 92,707 $ 52,610 ================================================================================================================================== Undistributed net investment income (accumulated loss) $ (663) $ -- $ (364) $ -- ---------------------------------------------------------------------------------------------------------------------------------- CORE FIXED-INCOME FUND* ------------------------------------------------------------------------------------------------ For the Six Months Ended For the April 30, Year Ended 2007 October 31, (Unaudited) 2006 ------------------------------------------------------------------------------------------------ Net investment income (loss) $ 71 $ 140 Net realized gain (loss) on investments, options and foreign currency transactions 17 (34) Net change in unrealized appreciation (depreciation) on investments, options and foreign currency translations (13) 39 ------------------------------------------------------------------------------------------------ Net increase in net assets resulting from operations 75 145 ------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders from: Net investment income Class A (52) (130) Class B (9) (5) Class C (8) (4) Net realized gains Class A -- -- Class B -- -- Class C -- -- ------------------------------------------------------------------------------------------------ Total dividends and distributions to shareholders (69) (139) ------------------------------------------------------------------------------------------------ Increase (decrease) from shares of beneficial interest transactions: Class A (726) 2,911 Class B 285 315 Class C 10 423 ------------------------------------------------------------------------------------------------ Net increase (decrease) from shares of beneficial interest transactions--Note 6 (431) 3,649 ------------------------------------------------------------------------------------------------ Total increase (decrease) (425) 3,655 ------------------------------------------------------------------------------------------------ Net Assets: Beginning of period 3,655 -- ------------------------------------------------------------------------------------------------ END OF PERIOD $ 3,230 $ 3,655 ================================================================================================ Undistributed net investment income (accumulated loss) $ 3 $ -- ------------------------------------------------------------------------------------------------
-71- -------------------------------------------------------------------------------- THE ALGER FUNDS STATEMENTS OF CHANGES IN NET ASSETS (in thousands) --------------------------------------------------------------------------------
MONEY MARKET FUND ------------------------------------------------------------------------------------------------ For the Six Months Ended For the April 30, Year Ended 2007 October 31, (Unaudited) 2006 ------------------------------------------------------------------------------------------------ Net investment income $ 1,153 $ 2,141 ------------------------------------------------------------------------------------------------ Dividends to shareholders from: Net investment income (1,153) (2,141) Net decrease from shares of beneficial interest transactions--Note 6 (1,208) (6,502) ------------------------------------------------------------------------------------------------ Total decrease (1,208) (6,502) ------------------------------------------------------------------------------------------------ Net Assets: Beginning of period 55,068 61,570 ------------------------------------------------------------------------------------------------ END OF PERIOD $ 53,860 $ 55,068 ================================================================================================
SEE NOTES TO FINANCIAL STATEMENTS. -72- [This page intentionally left blank] -------------------------------------------------------------------------------- THE ALGER FUNDS FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS ---------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL VALUE, INVESTMENT GAIN FROM BEGINNING INCOME (LOSS) ON INVESTMENT OF PERIOD (LOSS) (i) INVESTMENTS OPERATIONS ---------------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND ---------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) $ 11.13 $ 0.01 $ 1.16 $ 1.17 Year ended10/31/06 10.48 (0.02) 0.67 0.65 Year ended 10/31/05 9.05 0.01 1.42 1.43 Year ended 10/31/04 8.87 (0.07) 0.25 0.18 Year ended 10/31/03 7.16 (0.05) 1.76 1.71 Year ended 10/31/02 9.47 (0.04) (2.27) (2.31) ---------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) $ 10.22 $ (0.03) $ 1.06 $ 1.03 Year ended 10/31/06 9.70 (0.09) 0.61 0.52 Year ended 10/31/05 8.44 (0.07) 1.33 1.26 Year ended 10/31/04 8.33 (0.13) 0.24 0.11 Year ended 10/31/03 6.76 (0.10) 1.67 1.57 Year ended 10/31/02 9.02 (0.10) (2.16) (2.26) ---------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) $ 10.21 $ (0.03) $ 1.06 $ 1.03 Year ended 10/31/06 9.69 (0.09) 0.61 0.52 Year ended 10/31/05 8.43 (0.07) 1.33 1.26 Year ended 10/31/04 8.33 (0.13) 0.23 0.10 Year ended 10/31/03 6.76 (0.10) 1.67 1.57 Year ended 10/31/02 9.02 (0.10) (2.16) (2.26) ---------------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND ---------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) $ 6.31 $ (0.01) $ 0.68 $ 0.67 Year ended 10/31/06 5.21 (0.05) 1.15 1.10 Year ended 10/31/05 4.18 (0.06) 1.09 1.03 Year ended 10/31/04 3.95 (0.06) 0.29 0.23 Year ended 10/31/03 2.85 (0.05) 1.15 1.10 Year ended 10/31/02 3.54 (0.05) (0.64) (0.69)
(i) AMOUNT WAS COMPUTED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. (ii) DOES NOT REFLECT THE EFFECT OF ANY SALES CHARGES. (iii) UNAUDITED. RATIOS HAVE BEEN ANNUALIZED; TOTAL RETURN HAS NOT BEEN ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. -74- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ------------------------------------------------------------------------------------------------------------- RATIO OF NET RATIO OF NET NET ASSETS, EXPENSES INVESTMENT ASSET END OF TO INCOME VALUE, PERIOD AVERAGE (LOSS) TO PORTFOLIO END OF TOTAL (000'S NET AVERAGE TURNOVER PERIOD RETURN (ii) OMITTED) ASSETS NET ASSETS RATE ------------------------------------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND ------------------------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) $ 12.30 10.5% $ 165,286 1.38% 0.13% 110.33% Year ended10/31/06 11.13 6.2 157,185 1.21 (0.14) 322.94 Year ended 10/31/05 10.48 15.8 157,205 1.37 0.05 249.17 Year ended 10/31/04 9.05 2.0 166,720 1.34 (0.72) 191.13 Year ended 10/31/03 8.87 23.9 168,720 1.44 (0.62) 215.81 Year ended 10/31/02 7.16 (24.4) 130,464 1.36 (0.47) 213.97 ------------------------------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) $ 11.25 10.1% $ 208,559 2.12% (0.63)% 110.33% Year ended 10/31/06 10.22 5.4 221,298 1.96 (0.91) 322.94 Year ended 10/31/05 9.70 14.9 260,786 2.12 (0.72) 249.17 Year ended 10/31/04 8.44 1.3 279,963 2.09 (1.46) 191.13 Year ended 10/31/03 8.33 23.2 350,972 2.20 (1.37) 215.81 Year ended 10/31/02 6.76 (25.1) 323,809 2.11 (1.21) 213.97 ------------------------------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) $ 11.24 10.1% $ 40,080 2.13% (0.62)% 110.33% Year ended 10/31/06 10.21 5.4 40,151 1.96 (0.90) 322.94 Year ended 10/31/05 9.69 15.0 39,620 2.12 (0.72) 249.17 Year ended 10/31/04 8.43 1.2 42,196 2.09 (1.47) 191.13 Year ended 10/31/03 8.33 23.2 41,906 2.19 (1.37) 215.81 Year ended 10/31/02 6.76 (25.1) 34,813 2.11 (1.22) 213.97 ------------------------------------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND ------------------------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) $ 6.98 10.6% $ 393,808 1.44% (0.93)% 38.15% Year ended 10/31/06 6.31 21.1 221,019 1.37 (0.91) 83.72 Year ended 10/31/05 5.21 24.6 110,329 1.62 (1.19) 104.30 Year ended 10/31/04 4.18 5.8 82,891 1.69 (1.47) 128.79 Year ended 10/31/03 3.95 38.6 73,616 1.79 (1.55) 139.28 Year ended 10/31/02 2.85 (19.5) 46,143 1.75 (1.52) 132.35
-75- -------------------------------------------------------------------------------- THE ALGER FUNDS FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS --------------------------------------------------------------------------------------------------------------- NET REALIZED AND NET NET ASSET NET UNREALIZED TOTAL DIVIDENDS ASSET VALUE, INVESTMENT GAIN FROM FROM NET VALUE, BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT END OF OF PERIOD (LOSS) (i) INVESTMENTS OPERATIONS INCOME PERIOD ---------------------------------------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND (CONTINUED) ---------------------------------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) $ 5.77 $ (0.05) $ 0.64 $ 0.59 $ -- $ 6.36 Year ended 10/31/06 4.80 (0.09) 1.06 0.97 -- 5.77 Year ended 10/31/05 3.88 (0.08) 1.00 0.92 -- 4.80 Year ended 10/31/04 3.70 (0.09) 0.27 0.18 -- 3.88 Year ended 10/31/03 2.68 (0.07) 1.09 1.02 -- 3.70 Year ended 10/31/02 3.36 (0.07) (0.61) (0.68) -- 2.68 ---------------------------------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) $ 5.78 $ (0.05) $ 0.64 $ 0.59 $ -- $ 6.37 Year ended 10/31/06 4.81 (0.09) 1.06 0.97 -- 5.78 Year ended 10/31/05 3.88 (0.09) 1.02 0.93 -- 4.81 Year ended 10/31/04 3.70 (0.09) 0.27 0.18 -- 3.88 Year ended 10/31/03 2.68 (0.07) 1.09 1.02 -- 3.70 Year ended 10/31/02 3.36 (0.07) (0.61) (0.68) -- 2.68 ALGER BALANCED FUND ---------------------------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) $ 21.15 $ 0.14 $ 1.48 $ 1.62 $ (0.30) $ 22.47 Year ended 10/31/06 20.29 0.23 0.84 1.07 (0.21) 21.15 Year ended 10/31/05 18.58 0.22 1.70 1.92 (0.21) 20.29 Year ended 10/31/04 18.29 0.10 0.36 0.46 (0.17) 18.58 Year ended 10/31/03 16.02 0.13 2.43 2.56 (0.29) 18.29 Year ended 10/31/02 18.67 0.27 (2.48) (2.21) (0.44) 16.02 ---------------------------------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) $ 20.66 $ 0.06 $ 1.45 $ 1.51 $ (0.12) $ 22.05 Year ended 10/31/06 19.81 0.08 0.82 0.90 (0.05) 20.66 Year ended 10/31/05 18.13 0.08 1.65 1.73 (0.05) 19.81 Year ended 10/31/04 17.86 (0.04) 0.34 0.30 (0.03) 18.13 Year ended 10/31/03 15.62 0.01 2.39 2.40 (0.16) 17.86 Year ended 10/31/02 18.17 0.14 (2.44) (2.30) (0.25) 15.62
(i) AMOUNT WAS COMPUTED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. (ii) DOES NOT REFLECT THE EFFECT OF ANY SALES CHARGES. (iii) UNAUDITED. RATIOS HAVE BEEN ANNUALIZED; TOTAL RETURN HAS NOT BEEN ANNUALIZED. (iv) AMOUNT HAS BEEN REDUCED BY 0.07% DUE TO EXPENSE REIMBURSEMENT. SEE NOTES TO FINANCIAL STATEMENTS. -76- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ---------------------------------------------------------------------------------------------------- RATIO OF NET RATIO OF NET ASSETS, EXPENSES INVESTMENT END OF TO INCOME PERIOD AVERAGE (LOSS) TO PORTFOLIO TOTAL (000'S NET AVERAGE TURNOVER RETURN (ii) OMITTED) ASSETS NET ASSETS RATE ---------------------------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND (CONTINUED) ---------------------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) 10.2% $ 57,676 2.18% (1.67)% 38.15% Year ended 10/31/06 20.2 57,928 2.14 (1.66) 83.72 Year ended 10/31/05 23.7 61,499 2.36 (1.94) 104.30 Year ended 10/31/04 4.9 70,304 2.43 (2.21) 128.79 Year ended 10/31/03 38.1 94,241 2.57 (2.32) 139.28 Year ended 10/31/02 (20.2) 81,758 2.49 (2.27) 132.35 ---------------------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) 10.2% $ 36,182 2.20% (1.68)% 38.15% Year ended 10/31/06 20.2 17,580 2.12 (1.66) 83.72 Year ended 10/31/05 24.0 5,106 2.37 (1.95) 104.30 Year ended 10/31/04 4.9 4,669 2.44 (2.21) 128.79 Year ended 10/31/03 38.1 4,999 2.56 (2.32) 139.28 Year ended 10/31/02 (20.2) 3,209 2.49 (2.27) 132.35 ALGER BALANCED FUND ---------------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) 7.7% $ 31,980 1.34%(iv) 1.31% 90.13% Year ended 10/31/06 5.3 43,224 1.32 1.15 271.30 Year ended 10/31/05 10.4 53,415 1.31 1.15 218.75 Year ended 10/31/04 2.5 68,646 1.26 0.52 167.72 Year ended 10/31/03 16.3 79,387 1.31 0.80 174.97 Year ended 10/31/02 (12.2) 78,167 1.28 1.53 203.96 ---------------------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) 7.3% $ 58,509 2.10%(iv) 0.55% 90.13% Year ended 10/31/06 4.5 67,170 2.07 0.40 271.30 Year ended 10/31/05 9.6 86,647 2.06 0.41 218.75 Year ended 10/31/04 1.7 114,387 2.01 (0.23) 167.72 Year ended 10/31/03 15.5 143,765 2.06 0.05 174.97 Year ended 10/31/02 (12.9) 137,070 2.03 0.78 203.96
-77- -------------------------------------------------------------------------------- THE ALGER FUNDS FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS ---------------------------------------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS DISTRIBUTIONS VALUE, INVESTMENT GAIN FROM FROM NET FROM BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT NET REALIZED OF PERIOD (LOSS) (i) INVESTMENTS OPERATIONS INCOME GAINS ---------------------------------------------------------------------------------------------------------------------- ALGER BALANCED FUND (CONTINUED) ---------------------------------------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) $ 20.75 $ 0.06 $ 1.46 $ 1.52 $ (0.13) $ -- Year ended 10/31/06 19.90 0.08 0.82 0.90 (0.05) -- Year ended 10/31/05 18.21 0.08 1.66 1.74 (0.05) -- Year ended 10/31/04 17.93 (0.04) 0.35 0.31 (0.03) -- Year ended 10/31/03 15.68 0.01 2.39 2.40 (0.15) -- Year ended 10/31/02 18.24 0.14 (2.45) (2.31) (0.25) -- ---------------------------------------------------------------------------------------------------------------------- ALGER MIDCAP GROWTH FUND ---------------------------------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) $ 8.93 $ (0.03) $ 1.38 $ 1.35 $ -- $ (0.96) Year ended 10/31/06 9.15 (0.07) 0.85 0.78 -- (1.00) Year ended 10/31/05 7.89 (0.08) 1.34 1.26 -- -- Year ended 10/31/04 7.57 (0.08) 0.40 0.32 -- -- Year ended 10/31/03 5.48 (0.07) 2.16 2.09 -- -- Year ended 10/31/02 6.92 (0.07) (1.37) (1.44) -- -- ---------------------------------------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) $ 8.09 $ (0.06) $ 1.24 $ 1.18 $ -- $ (0.96) Year ended 10/31/06 8.43 (0.12) 0.78 0.66 -- (1.00) Year ended 10/31/05 7.33 (0.14) 1.24 1.10 -- -- Year ended 10/31/04 7.08 (0.13) 0.38 0.25 -- -- Year ended 10/31/03 5.17 (0.11) 2.02 1.91 -- -- Year ended 10/31/02 6.58 (0.11) (1.30) (1.41) -- -- ---------------------------------------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) $ 8.07 $ (0.06) $ 1.24 $ 1.18 $ -- $ (0.96) Year ended 10/31/06 8.41 (0.12) 0.78 0.66 -- (1.00) Year ended 10/31/05 7.31 (0.14) 1.24 1.10 -- -- Year ended 10/31/04 7.06 (0.13) 0.38 0.25 -- -- Year ended 10/31/03 5.16 (0.11) 2.01 1.90 -- -- Year ended 10/31/02 6.56 (0.11) (1.29) (1.40) -- --
(i) AMOUNT WAS COMPUTED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. (ii) DOES NOT REFLECT THE EFFECT OF ANY SALES CHARGES. (iii) UNAUDITED. RATIOS HAVE BEEN ANNUALIZED; TOTAL RETURN HAS NOT BEEN ANNUALIZED. (iv) AMOUNT HAS BEEN REDUCED BY 0.07% DUE TO EXPENSE REIMBURSEMENT. SEE NOTES TO FINANCIAL STATEMENTS. -78- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA -------------------------------------------------------------------------------------------------------------------------------- RATIO OF NET RATIO OF NET NET ASSETS, EXPENSES INVESTMENT ASSET END OF TO INCOME VALUE, PERIOD AVERAGE (LOSS) TO PORTFOLIO TOTAL END OF TOTAL (000'S NET AVERAGE TURNOVER DISTRIBUTIONS PERIOD RETURN (ii) OMITTED) ASSETS NET ASSETS RATE -------------------------------------------------------------------------------------------------------------------------------- ALGER BALANCED FUND (CONTINUED) -------------------------------------------------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) $ (0.13) $ 22.14 7.3% $ 16,672 2.10%(iv) 0.55% 90.13% Year ended 10/31/06 (0.05) 20.75 4.5 22,357 2.07 0.41 271.30 Year ended 10/31/05 (0.05) 19.90 9.5 25,421 2.06 0.42 218.75 Year ended 10/31/04 (0.03) 18.21 1.7 34,840 2.01 (0.23) 167.72 Year ended 10/31/03 (0.15) 17.93 15.4 44,801 2.06 0.05 174.97 Year ended 10/31/02 (0.25) 15.68 (12.9) 45,516 2.03 0.78 203.96 -------------------------------------------------------------------------------------------------------------------------------- ALGER MIDCAP GROWTH FUND -------------------------------------------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) $ (0.96) $ 9.32 16.1% $ 329,783 1.40% (0.63)% 173.37% Year ended 10/31/06 (1.00) 8.93 8.9 318,934 1.23 (0.77) 272.41 Year ended 10/31/05 -- 9.15 16.0 318,423 1.36 (0.96) 239.32 Year ended 10/31/04 -- 7.89 4.2 276,076 1.34 (1.08) 210.18 Year ended 10/31/03 -- 7.57 38.1 231,711 1.45 (1.16) 238.17 Year ended 10/31/02 -- 5.48 (20.8) 133,113 1.41 (1.05) 324.69 -------------------------------------------------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) $ (0.96) $ 8.31 15.7% $ 206,455 2.15% (1.38)% 173.37% Year ended 10/31/06 (1.00) 8.09 8.2 212,286 1.98 (1.52) 272.41 Year ended 10/31/05 -- 8.43 15.0 260,986 2.11 (1.71) 239.32 Year ended 10/31/04 -- 7.33 3.5 276,982 2.09 (1.83) 210.18 Year ended 10/31/03 -- 7.08 36.9 326,015 2.20 (1.92) 238.17 Year ended 10/31/02 -- 5.17 (21.4) 247,201 2.15 (1.80) 324.69 -------------------------------------------------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) $ (0.96) $ 8.29 15.7% $ 69,914 2.15% (1.38)% 173.37% Year ended 10/31/06 (1.00) 8.07 8.2 69,063 1.98 (1.52) 272.41 Year ended 10/31/05 -- 8.41 15.1 72,985 2.11 (1.71) 239.32 Year ended 10/31/04 -- 7.31 3.5 70,677 2.09 (1.83) 210.18 Year ended 10/31/03 -- 7.06 36.8 62,627 2.20 (1.92) 238.17 Year ended 10/31/02 -- 5.16 (21.3) 46,238 2.16 (1.80) 324.69
-79- -------------------------------------------------------------------------------- THE ALGER FUNDS FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS --------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL VALUE, INVESTMENT GAIN FROM BEGINNING INCOME (LOSS) ON INVESTMENT OF PERIOD (LOSS) (i) INVESTMENTS OPERATIONS --------------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION FUND --------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) $ 11.05 $ (0.03) $ 1.87 $ 1.84 Year ended 10/31/06 9.27 (0.06) 1.84 1.78 Year ended 10/31/05 7.71 (0.04) 1.60 1.56 Year ended 10/31/04 7.74 (0.10) 0.07 (0.03) Year ended 10/31/03 6.23 (0.07) 1.58 1.51 Year ended 10/31/02 8.21 (0.08) (1.90) (1.98) --------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) $ 10.20 $ (0.07) $ 1.73 $ 1.66 Year ended 10/31/06 8.62 (0.12) 1.70 1.58 Year ended 10/31/05 7.23 (0.09) 1.48 1.39 Year ended 10/31/04 7.31 (0.15) 0.07 (0.08) Year ended 10/31/03 5.93 (0.11) 1.49 1.38 Year ended 10/31/02 7.88 (0.14) (1.81) (1.95) --------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) $ 10.19 $ (0.07) $ 1.73 $ 1.66 Year ended 10/31/06 8.61 (0.12) 1.70 1.58 Year ended 10/31/05 7.22 (0.09) 1.48 1.39 Year ended 10/31/04 7.31 (0.10) 0.01 (0.09) Year ended 10/31/03 5.93 (0.11) 1.49 1.38 Year ended 10/31/02 7.87 (0.14) (1.80) (1.94) ---------------------------------------------------------------------------------------
(i) AMOUNT WAS COMPUTED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. (ii) DOES NOT REFLECT THE EFFECT OF ANY SALES CHARGES. (iii) UNAUDITED. RATIOS HAVE BEEN ANNUALIZED; TOTAL RETURN HAS NOT BEEN ANNUALIZED. SEE NOTES TO FINANCIAL STATEMENTS. -80- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ------------------------------------------------------------------------------------------------------------- RATIO OF NET RATIO OF NET NET ASSETS, EXPENSES INVESTMENT ASSET END OF TO INCOME VALUE, PERIOD AVERAGE (LOSS) TO PORTFOLIO END OF TOTAL (000'S NET AVERAGE TURNOVER PERIOD RETURN (ii) OMITTED) ASSETS NET ASSETS RATE ------------------------------------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION FUND ------------------------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii) $ 12.89 16.7% $ 204,646 1.54% (0.56)% 138.74% Year ended 10/31/06 11.05 19.2 152,808 1.39 (0.57) 223.23 Year ended 10/31/05 9.27 20.2 128,816 1.63 (0.44) 144.61 Year ended 10/31/04 7.71 (0.4) 121,341 1.58 (1.23) 157.23 Year ended 10/31/03 7.74 24.2 112,031 1.70 (1.06) 202.81 Year ended 10/31/02 6.23 (24.1) 97,962 1.53 (1.06) 174.83 ------------------------------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii) $ 11.86 16.3% $ 183,800 2.28% (1.32)% 138.74% Year ended 10/31/06 10.20 18.3 179,706 2.14 (1.31) 223.23 Year ended 10/31/05 8.62 19.2 192,976 2.37 (1.15) 144.61 Year ended 10/31/04 7.23 (1.1) 228,646 2.33 (1.97) 157.23 Year ended 10/31/03 7.31 23.3 324,292 2.45 (1.82) 202.81 Year ended 10/31/02 5.93 (24.8) 342,592 2.28 (1.82) 174.83 ------------------------------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii) $ 11.85 16.3% $ 45,887 2.28% (1.30)% 138.74% Year ended 10/31/06 10.19 18.4 34,933 2.14 (1.31) 223.23 Year ended 10/31/05 8.61 19.3 33,643 2.37 (1.13) 144.61 Year ended 10/31/04 7.22 (1.2) 41,595 2.33 (1.98) 157.23 Year ended 10/31/03 7.31 23.3 54,273 2.45 (1.81) 202.81 Year ended 10/31/02 5.93 (24.7) 53,936 2.28 (1.82) 174.83 -------------------------------------------------------------------------------------------------------------
-81- -------------------------------------------------------------------------------- THE ALGER FUNDS FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS --------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL VALUE, INVESTMENT GAIN FROM BEGINNING INCOME (LOSS) ON INVESTMENT OF PERIOD (LOSS) (i) INVESTMENTS OPERATIONS --------------------------------------------------------------------------------------- ALGER HEALTH SCIENCES FUND --------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii)(ix) $ 18.17 $ (0.04) $ 1.26 $ 1.22 Year ended 10/31/06 16.24 (0.07) 2.35 2.28 Year ended 10/31/05 13.29 (0.11) 3.76 3.65 Year ended 10/31/04 11.91 (0.14) 1.75 1.61 Year ended 10/31/03 9.29 (0.20) 2.82 2.62 From 5/1/02 (commencement of operations) to 10/31/2002 (iii) 10.00 (0.06) (0.65) (0.71) --------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii)(ix) $ 17.56 $ (0.10) $ 1.22 $ 1.12 Year ended 10/31/06 15.83 (0.19) 2.27 2.08 Year ended 10/31/05 13.05 (0.22) 3.70 3.48 Year ended 10/31/04 11.78 (0.24) 1.74 1.50 Year ended 10/31/03 9.26 (0.28) 2.80 2.52 From 5/1/02 (commencement of operations) to 10/31/2002 (iii) 10.00 (0.10) (0.64) (0.74) --------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii)(ix) $ 17.56 $ (0.10) $ 1.21 $ 1.11 Year ended 10/31/06 15.82 (0.19) 2.28 2.09 Year ended 10/31/05 13.05 (0.22) 3.69 3.47 Year ended 10/31/04 11.78 (0.24) 1.74 1.50 Year ended 10/31/03 9.26 (0.29) 2.81 2.52 From 5/1/02 (commencement of operations) to 10/31/2002 (iii) 10.00 (0.10) (0.64) (0.74) ---------------------------------------------------------------------------------------
(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) AMOUNT HAS BEEN REDUCED BY 0.14% DUE TO EXPENSE REIMBURSEMENTS. (v) AMOUNT HAS BEEN REDUCED BY 0.03% DUE TO EXPENSE REIMBURSEMENTS. (vi) AMOUNT HAS BEEN REDUCED BY 0.15% DUE TO EXPENSE REIMBURSEMENTS. (vii) AMOUNT HAS BEEN REDUCED BY 0.02% DUE TO EXPENSE REIMBURSEMENTS. (viii) AMOUNT HAS BEEN REDUCED BY 0.04% DUE TO EXPENSE REIMBURSEMENTS. (ix) UNAUDITED. SEE NOTES TO FINANCIAL STATEMENTS. -82- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ------------------------------------------------------------------------------------------------------------------------------ RATIO OF NET RATIO OF NET NET ASSETS, EXPENSES INVESTMENT DISTRIBUTIONS ASSET END OF TO INCOME FROM VALUE, PERIOD AVERAGE (LOSS) TO PORTFOLIO NET REALIZED END OF TOTAL (000'S NET AVERAGE TURNOVER GAINS PERIOD RETURN (ii) OMITTED) ASSETS NET ASSETS RATE ------------------------------------------------------------------------------------------------------------------------------ ALGER HEALTH SCIENCES FUND ------------------------------------------------------------------------------------------------------------------------------ CLASS A Six Months ended 4/30/07 (iii)(ix) $ (0.87) $ 18.52 7.1% $ 140,815 1.38% (0.43)% 86.59% Year ended 10/31/06 (0.35) 18.17 14.3 116,165 1.35 (0.40) 168.87 Year ended 10/31/05 (0.70) 16.24 28.3 50,581 1.50(v) (0.77) 127.78 Year ended 10/31/04 (0.23) 13.29 13.7 15,106 1.55(iv) (1.04) 202.79 Year ended 10/31/03 -- 11.91 28.2 8,594 2.36 (1.80) 246.96 From 5/1/02 (commencement of operations) to 10/31/2002 (iii) -- 9.29 (7.1) 712 2.15 (1.43) 135.82 ------------------------------------------------------------------------------------------------------------------------------ CLASS B Six Months ended 4/30/07 (iii)(ix) $ (0.87) $ 17.81 6.7% $ 21,094 2.12% (1.17)% 86.59% Year ended 10/31/06 (0.35) 17.56 13.3 22,995 2.10 (1.15) 168.87 Year ended 10/31/05 (0.70) 15.83 27.5 16,244 2.25(vii) (1.52) 127.78 Year ended 10/31/04 (0.23) 13.05 12.9 7,939 2.29(iv) (1.78) 202.79 Year ended 10/31/03 -- 11.78 27.2 3,620 3.22 (2.63) 246.96 From 5/1/02 (commencement of operations) to 10/31/2002 (iii) -- 9.26 (7.4) 325 2.91 (2.18) 135.82 ------------------------------------------------------------------------------------------------------------------------------ CLASS C Six Months ended 4/30/07 (iii)(ix) $ (0.87) $ 17.80 6.7% $ 49,801 2.12% (1.17)% 86.59% Year ended 10/31/06 (0.35) 17.56 13.4 45,947 2.11(ix) (1.15) 168.87 Year ended 10/31/05 (0.70) 15.82 27.4 25,251 2.25(viii) (1.52) 127.78 Year ended 10/31/04 (0.23) 13.05 12.9 3,740 2.29(vi) (1.78) 202.79 Year ended 10/31/03 -- 11.78 27.2 1,357 3.30 (2.69) 246.96 From 5/1/02 (commencement of operations) to 10/31/2002 (iii) -- 9.26 (7.4) 309 2.90 (2.17) 135.82 ------------------------------------------------------------------------------------------------------------------------------
-83- -------------------------------------------------------------------------------- THE ALGER FUNDS FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS ------------------------------------------------------------------------------------------ NET REALIZED AND NET ASSET NET UNREALIZED TOTAL VALUE, INVESTMENT GAIN FROM BEGINNING INCOME (LOSS) ON INVESTMENT OF PERIOD (LOSS) (i) INVESTMENTS OPERATIONS ------------------------------------------------------------------------------------------ ALGER SMALLCAP AND MIDCAP GROWTH FUND ------------------------------------------------------------------------------------------ CLASS A Six Months ended 4/30/07 (iii)(xi) $ 13.92 $ (0.05) $ 2.05 $ 2.00 Year ended 10/31/06 12.23 (0.14) 2.58 2.44 Year ended 10/31/05 10.46 (0.13) 2.71 2.58 Year ended 10/31/04 9.97 (0.13) 0.62 0.49 Year ended 10/31/03 7.65 (0.09) 2.41 2.32 From 5/8/02 (commencement of operations) to 10/31/2002 (iii) 10.00 (0.01) (2.34) (2.35) ------------------------------------------------------------------------------------------ CLASS B Six Months ended 4/30/07 (iii)(xi) $ 13.44 $ (0.10) $ 1.98 $ 1.88 Year ended 10/31/06 11.92 (0.23) 2.50 2.27 Year ended 10/31/05 10.27 (0.20) 2.66 2.46 Year ended 10/31/04 9.87 (0.20) 0.60 0.40 Year ended 10/31/03 7.63 (0.16) 2.40 2.24 From 5/8/02 (commencement of operations) to 10/31/2002 (iii) 10.00 (0.09) (2.28) (2.37) ------------------------------------------------------------------------------------------ CLASS C Six Months ended 4/30/07 (iii)(xi) $ 13.45 $ (0.10) $ 1.98 $ 1.88 Year ended 10/31/06 11.92 (0.23) 2.51 2.28 Year ended 10/31/05 10.27 (0.20) 2.66 2.46 Year ended 10/31/04 9.86 (0.20) 0.61 0.41 Year ended 10/31/03 7.63 (0.16) 2.39 2.23 From 5/8/02 (commencement of operations) to 10/31/2002 (iii) 10.00 (0.09) (2.28) (2.37) ------------------------------------------------------------------------------------------
(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) AMOUNT HAS BEEN REDUCED BY 0.18% DUE TO EXPENSE REIMBURSEMENTS. (v) AMOUNT HAS BEEN REDUCED BY 0.17% DUE TO EXPENSE REIMBURSEMENTS. (vi) AMOUNT HAS BEEN REDUCED BY 0.14% DUE TO EXPENSE REIMBURSEMENTS. (vii) AMOUNT HAS BEEN REDUCED BY 0.18% DUE TO EXPENSE REIMBURSEMENTS. (viii) AMOUNT HAS BEEN REDUCED BY 0.15% DUE TO EXPENSE REIMBURSEMENTS. (ix) AMOUNT HAS BEEN REDUCED BY 0.17% DUE TO EXPENSE REIMBURSEMENTS. (x) AMOUNT HAS BEEN REDUCED BY 0.16% DUE TO EXPENSE REIMBURSEMENTS. (xi) UNAUDITED. SEE NOTES TO FINANCIAL STATEMENTS. -84- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ------------------------------------------------------------------------------------------------------------------------------- RATIO OF NET RATIO OF NET NET ASSETS, EXPENSES INVESTMENT DISTRIBUTIONS ASSET END OF TO INCOME FROM VALUE, PERIOD AVERAGE (LOSS) TO PORTFOLIO NET REALIZED END OF TOTAL (000'S NET AVERAGE TURNOVER GAINS PERIOD RETURN (ii) OMITTED) ASSETS NET ASSETS RATE ------------------------------------------------------------------------------------------------------------------------------- ALGER SMALLCAP AND MIDCAP GROWTH FUND ------------------------------------------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii)(xi) $ (0.69) $ 15.23 14.9% $ 61,091 1.44% (0.78)% 40.73% Year ended 10/31/06 (0.75) 13.92 20.8 33,419 1.50(iv) (1.02) 80.64 Year ended 10/31/05 (0.81) 12.23 25.7 14,389 1.50(v) (1.13) 80.54 Year ended 10/31/04 -- 10.46 4.9 10,827 1.53(vi) (1.21) 101.16 Year ended 10/31/03 -- 9.97 30.3 9,932 1.58 (1.06) 83.67 From 5/8/02 (commencement of operations) to 10/31/2002 (iii) -- 7.65 (23.5) 7,775 1.89 (1.57) 34.09 ------------------------------------------------------------------------------------------------------------------------------- CLASS B Six Months ended 4/30/07 (iii)(xi) $ (0.69) $ 14.63 14.6% $ 10,188 2.19% (1.55)% 40.73% Year ended 10/31/06 (0.75) 13.44 19.8 7,251 2.25(vii) (1.77) 80.64 Year ended 10/31/05 (0.81) 11.92 25.0 3,262 2.25(v) (1.88) 80.54 Year ended 10/31/04 -- 10.27 4.1 2,291 2.27(vii) (1.95) 101.16 Year ended 10/31/03 -- 9.87 29.4 1,205 2.37 (1.87) 83.67 From 5/8/02 (commencement of operations) to 10/31/2002 (iii) -- 7.63 (23.7) 269 2.64 (2.32) 34.09 ------------------------------------------------------------------------------------------------------------------------------- CLASS C Six Months ended 4/30/07 (iii)(xi) $ (0.69) $ 14.64 14.5% $ 21,428 2.20% 1.53% 40.73% Year ended 10/31/06 (0.75) 13.45 19.9 11,940 2.25(ix) (1.79) 80.64 Year ended 10/31/05 (0.81) 11.92 25.0 1,960 2.25(x) (1.88) 80.54 Year ended 10/31/04 -- 10.27 4.2 1,345 2.28(viii) (1.95) 101.16 Year ended 10/31/03 -- 9.86 29.2 969 2.38 (1.86) 83.67 From 5/8/02 (commencement of operations) to 10/31/2002 (iii) -- 7.63 (23.7) 254 2.64 (2.32) 34.09 -------------------------------------------------------------------------------------------------------------------------------
-85- -------------------------------------------------------------------------------- THE ALGER FUNDS FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS ---------------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET UNREALIZED TOTAL VALUE, NET GAIN FROM BEGINNING INVESTMENT (LOSS) ON INVESTMENT OF PERIOD INCOME (LOSS)(i) INVESTMENTS OPERATIONS ---------------------------------------------------------------------------------------------- ALGER CORE FIXED-INCOME FUND ---------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii)(vii) $ 9.96 $ 0.22 $ 0.04 $ 0.26 From 3/1/06 (commencement of operations) to 10/31/06 (iii) 10.00 0.29 (0.03) 0.26 CLASS B Six Months ended 4/30/07 (iii)(vii) $ 9.95 $ 0.18 $ 0.04 $ 0.22 From 3/1/06 (commencement of operations) to 10/31/06 (iii) 10.00 0.23 (0.02) 0.21 CLASS C Six Months ended 4/30/07 (iii)(vii) $ 9.96 $ 0.18 $ 0.03 $ 0.21 From 3/1/06 (commencement of operations) to 10/31/06 (iii) 10.00 0.21 0.01 0.22 ---------------------------------------------------------------------------------------------- ALGER MONEY MARKET FUND ---------------------------------------------------------------------------------------------- Six months ended 4/30/07(iii)(vii) $ 1.00 $ 0.0213 $ -- $ 0.0213 Year ended 10/31/06 1.00 0.0374 -- 0.0374 Year ended 10/31/05 1.00 0.0188 -- 0.0188 Year ended 10/31/04 1.00 0.0039 -- 0.0039 Year ended 10/31/03 1.00 0.0033 -- 0.0033 Year ended 10/31/02 1.00 0.0097 -- 0.0097
(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) AMOUNT HAS BEEN REDUCED BY 2.76% DUE TO EXPENSE REIMBURSEMENTS. (v) AMOUNT HAS BEEN REDUCED BY 3.03% DUE TO EXPENSE REIMBURSEMENT. (vi) AMOUNT HAS BEEN REDUCED BY 3.09% DUE TO EXPENSE REIMBURSEMENT. (vii) UNAUDITED. (viii) AMOUNT HAS BEEN REDUCED BY 2.13% DUE TO EXPENSE REIMBURSEMENTS. (ix) AMOUNT HAS BEEN REDUCED BY 1.88% DUE TO EXPENSE REIMBURSEMENTS. (x) AMOUNT HAS BEEN REDUCED BY 2.14% DUE TO EXPENSE REIMBURSEMENTS. SEE NOTES TO FINANCIAL STATEMENTS. -86- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ---------------------------------------------------------------------------------------------------------------------------- RATIO OF NET RATIO OF NET NET ASSETS, EXPENSES INVESTMENT DIVIDENDS ASSET END OF TO INCOME FROM NET VALUE, PERIOD AVERAGE TO PORTFOLIO INVESTMENT END OF TOTAL (000'S NET AVERAGE TURNOVER INCOME PERIOD RETURN (ii) OMITTED) ASSETS NET ASSETS RATE ---------------------------------------------------------------------------------------------------------------------------- ALGER CORE FIXED-INCOME FUND ---------------------------------------------------------------------------------------------------------------------------- CLASS A Six Months ended 4/30/07 (iii)(vii) $ (0.22) $ 10.00 2.6% $ 2,192 1.00%(viii) 4.34% 99.61% From 3/1/06 (commencement of operations) to 10/31/06 (iii) (0.30) 9.96 2.6 2,916 1.00(iv) 4.22 171.22 CLASS B Six Months ended 4/30/07 (iii)(vii) $ (0.18) $ 9.99 2.3% $ 602 1.75%(ix) 3.54% 99.61% From 3/1/06 (commencement of operations) to 10/31/06 (iii) (0.26) 9.95 2.1 315 1.75(v) 3.68 171.22 CLASS C Six Months ended 4/30/07 (iii)(vii) $ (0.18) $ 9.99 2.3% $ 436 1.75%(x) 3.57% 99.61% From 3/1/06 (commencement of operations) to 10/31/06 (iii) (0.26) 9.96 2.1 424 1.75(vi) 3.71 171.22 ---------------------------------------------------------------------------------------------------------------------------- ALGER MONEY MARKET FUND ---------------------------------------------------------------------------------------------------------------------------- Six months ended 4/30/07(iii)(vii) $ (0.0213) $ 1.00 2.1% $ 53,860 0.86% 4.32% --% Year ended 10/31/06 (0.0374) 1.00 3.8 55,068 0.90 3.78 -- Year ended 10/31/05 (0.0188) 1.00 1.9 61,570 0.90 1.84 -- Year ended 10/31/04 (0.0039) 1.00 0.4 80,528 0.77 0.37 -- Year ended 10/31/03 (0.0033) 1.00 0.3 115,935 0.82 0.34 -- Year ended 10/31/02 (0.0097) 1.00 1.0 330,213 0.79 0.99 --
-87- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -------------------------------------------------------------------------------- NOTE 1 -- GENERAL: -------------------------------------------------------------------------------- The Alger Funds (the "Trust") is a diversified, open-end registered investment company organized as a business trust under the laws of the Commonwealth of Massachusetts. The Trust operates as a series company currently issuing an unlimited number of shares of beneficial interest in nine funds--LargeCap Growth Fund, SmallCap Growth Fund, Balanced Fund, MidCap Growth Fund, Capital Appreciation Fund, Health Sciences Fund, SmallCap and MidCap Growth Fund, Core Fixed-Income Fund and Money Market Fund (collectively, the "Funds" or individually, each a "Fund"). The LargeCap Growth Fund, SmallCap Growth Fund, MidCap Growth Fund, Capital Appreciation Fund, Health Sciences Fund and SmallCap and MidCap Growth Fund normally invest primarily in equity securities and each has an investment objective of long-term capital appreciation. The Balanced Fund'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 Core Fixed-Income Fund's investment objective is current income consistent with the preservation of capital value, which it seeks by investing in fixed-income securities. The Money Market Fund's investment objective is high current income which it seeks to achieve by investing in short-term instruments. Each Fund, other than the Money Market Fund, offers Class A, Class B and Class C shares. Class A shares are generally subject to an initial sales charge while Class B and C shares are generally subject to a deferred sales charge. Class B shares will automatically convert to Class A shares eight years 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 Funds, other than the Money Market Fund, 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). Securities for which such information is readily available are valued at the last reported sales price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the absence of reported sales, securities are valued at a price within 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. Securities in which the Funds invest may be traded in markets that close before the close of the NYSE. Developments that occur between the close of the foreign markets and the close of the NYSE (normally 4:00 p.m. Eastern time) may result in adjustments to -88- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- the closing prices to reflect what the investment manager, pursuant to policies established by the Board of Trustees, believes to be the fair value of these securities as of the close of the NYSE. The Funds may also fair value securities in other situations, for example, when a particular foreign market is closed but the Funds are open. The investments of the Money Market Fund, and short-term securities held by the other Funds having a remaining maturity of sixty days or less, are valued at amortized cost which approximates market value. Shares of mutual funds are valued at the net asset value of the underlying mutual fund. In September 2006, the Financial Accounting Standards Board (FASB) issued STATEMENT ON FINANCIAL ACCOUNTING STANDARDS NO. 157, "FAIR VALUE MEASUREMENTS" (FAS 157). This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. As of April 30, 2007 the Funds do not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the statement of operations for a fiscal period. (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. Premiums and discounts on debt securities purchased are amortized or accreted over the lives of the respective securities. (c) Foreign Currency Translations: The books and records of the Funds are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the prevailing rates of exchange on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of such transactions. Net realized gains and losses on foreign currency transactions represent net gains and losses from the disposition of foreign currencies, currency gains and losses realized between the trade dates and settlement dates of security transactions, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The effects of changes in foreign currency exchange rates on investments in securities are included in realized and unrealized gain or loss on investments in the Statements of Operations. (c) Repurchase Agreements: The Funds may enter into repurchase agreements with institutions approved by the Board of Trustees. The repurchase agreements are collateralized by U.S. Government and agency securities, which are either received and held in physical possession by the custodian or received by such custodian in book-entry form through the Federal Reserve book-entry system. The collateral is valued on a daily basis during the term of the agreement to ensure that its value equals or -89- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- exceeds the agreed-upon repurchase price to be repaid to the Fund. Additional collateral is obtained when necessary. (d) Option Contracts: When a Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a written call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. The Funds may also purchase put and call options. Purchasing call and put options tends to decrease the Fund's exposure to the underlying instrument. The Fund pays a premium which is included in the Fund's Statement of Assets and Liabilities as an investment and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options which expire are treated as realized losses. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying security to determine the realized gain or loss. (e) Lending of Fund Securities: The Funds may lend their securities to financial institutions, provided that the market value of the securities loaned will not at any time exceed one third of the Fund's total assets, as defined. The Funds earn fees on the securities loaned. In order to protect against the risk of failure by the borrower to return the securities loaned or any delay in the delivery of such securities, the loan is collateralized by cash, letters of credit or U.S. Government securities that are maintained in an amount equal to at least 100 percent of the current market value of the loaned securities. The market value of the loaned securities is determined at the close of business of the Funds and any required additional collateral is delivered to the Funds on the next business day. There were no securities on loan during the six months ended April 30, 2007. (f) Dividends to Shareholders: Dividends payable to shareholders are recorded on the ex-dividend date. The Money Market Fund declares dividends daily from net investment income; the Core Fixed-Income Fund declares dividends monthly from net investment income; such dividends are paid monthly. The dividends from net investment income of the other Funds are declared and paid annually. With respect to all Funds, 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. -90- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- Each class is treated separately in determining the amounts of dividends of net investment income payable to holders of its shares. The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with federal income tax rules. Therefore, the source of the Funds' distributions may be shown in the accompanying financial statements as either from, or in excess of, net investment income, net realized gain on investment transactions, or return of capital, depending on the type of book/tax differences that may exist. Capital accounts within the financial statements are adjusted for permanent book/tax differences. Reclassifications result primarily from the differences in tax treatment of net operating losses and premium/discount of debt securities. The reclassifications had no impact on the net asset values of the Funds and are designed to present the Funds' capital accounts on a tax basis. (g) Federal Income Taxes: It is each Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income to its shareholders. Provided a Fund maintains such compliance, no federal income tax provision is required. Each Fund is treated as a separate entity for the purpose of determining such compliance. On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact in the financial statements has not yet been determined. (h) Allocation Methods: The Trust accounts separately for the assets, liabilities and operations of each Fund. Expenses directly attributable to each Fund are charged to that Fund's operations; expenses which are applicable to all Funds are allocated among them based on net assets. Income, realized and unrealized gains and losses, and expenses of each Fund, other than the Money Market Fund, are allocated among the Fund's classes based on relative net assets, with the exception of distribution fees, which are only applicable to Class B and Class C shares. (i) Indemnification: The Trust enters into contracts that contain a variety of indemnification provisions. The Trust's maximum exposure under these arrangements is unknown. The Trust does not anticipate recognizing any loss related to these arrangements. (j) Other: These financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which require using estimates and assumptions that affect the reported amounts therein. Actual results may differ from those estimates. -91- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- NOTE 3 -- INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES: -------------------------------------------------------------------------------- (a) Investment Advisory and Administration Fees: Fees incurred by each Fund, pursuant to the provisions of its Investment Advisory Agreement and Administration Agreement with Fred Alger Management, Inc. (Alger Management), are payable monthly and computed based on the value of the average daily net assets of each Fund, at the following rates: ADVISORY FEE ADMINISTRATION FEE -------------------------------------------------------------------------------- LargeCap Growth Fund .710% .04% -------------------------------------------------------------------------------- SmallCap Growth Fund .810 .04 -------------------------------------------------------------------------------- Balanced Fund .710 .04 -------------------------------------------------------------------------------- MidCap Growth Fund .760 .04 -------------------------------------------------------------------------------- Capital Appreciation Fund .810 .04 -------------------------------------------------------------------------------- Health Sciences Fund .810 .04 -------------------------------------------------------------------------------- SmallCap and MidCap Growth Fund .810 .04 -------------------------------------------------------------------------------- Core Fixed-Income Fund .335 .04 -------------------------------------------------------------------------------- Money Market Fund .460 .04 -------------------------------------------------------------------------------- Prior to September 12, 2006, Alger Management provided both advisory services and administrative services to each Fund pursuant to a separate investment management agreement with each Fund. Alger Management has established an expense cap for the SmallCap and MidCap Growth Fund effective March 1, 2004 and the Core Fixed-Income Fund effective March 1, 2006. Alger Management will reimburse these Funds if annualized operating expenses exceed 1.50% of average daily net assets for Class A shares and 2.25% of average daily net assets for Class B and Class C shares, for the SmallCap and MidCap Growth Fund; and 1.00% of average daily net assets for Class A and 1.75% of average daily net assets for Class B and Class C for the Core Fixed-Income Fund. Alger Management has contractually agreed to extend each expense cap through February 28, 2008. As part of the settlement with the New York Attorney General (see Note 8--Litigation) Alger Management has agreed to reduce its advisory fee through November 30, 2011, to 0.62% for the Alger Balanced Fund. For the period ended April 30, 2007, Alger Management reimbursed the Balanced Fund, SmallCap and MidCap Growth Fund and the Core Fixed-Income Fund, $42,005, $0 and $35,864, respectively. (b) Distribution Fees: Class A Shares: Effective March 1, 2007, the Class A shares of each Fund adopted a distribution plan pursuant to which each Fund pays Fred Alger & Company, Incorporated, the Fund's distributor (the "Distributor" or "Alger Inc.") and an affiliate of Alger Management, a fee at the annual rate of .25% of the respective average daily net assets of the Class A shares of the designated Funds to compensate the Distributor for its activities and expenses incurred in distributing the Class A shares. Fees charged may be more or less than the expenses incurred by the Distributor. Class B Shares: The Trust has adopted an Amended and Restated Plan of Distribution pursuant to which Class B shares of each Fund, other than the Money Market Fund, -92- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- reimburse the Distributor for costs and expenses incurred by the Distributor in connection with advertising, marketing and selling the Class B shares. Through February 28, 2007, the distribution fee was not to exceed an annual rate of .75% of the respective average daily net assets of the Class B shares of the designated Funds. Effective March 1, 2007, the maximum distribution fee was increased to 1%. 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 Funds, the excess may be carried forward, with interest, and sought to be reimbursed in future periods. As of April 30, 2007, such excess carried forward was approximately $16,353,000, $14,154,000, $4,048,000, $10,982,000, $19,842,000, $1,442,000, $614,000 and $10,000 for Class B shares of the LargeCap Growth Fund, the SmallCap Growth Fund, the Balanced Fund, the MidCap Growth Fund, the Capital Appreciation Fund, the Health Sciences Fund, the SmallCap and MidCap Growth Fund, and the Core Fixed-Income Fund, 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 Trust has adopted a Distribution Plan pursuant to which Class C shares of each Fund, other than the Money Market Fund, paid 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 Funds to compensate the Distributor for its activities and expenses incurred in distributing the Class C shares. Effective March 1, 2007, the Distribution fee was increased to 1% for all Funds except the Balanced Fund and Health Sciences Fund. The fees charged may be more or less than the expenses incurred by the Distributor. (c) Sales Charges: Purchases and sales of shares of the Funds, other than the Money Market Fund, may be subject to initial sales charges or contingent deferred sales charges. For the six months ended April 30, 2007, the initial sales charges and contingent deferred sales charges retained by the Distributor were approximately $23,279 and $647,748, 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 Trust. (d) Brokerage Commissions: During the six months ended April 30, 2007, the LargeCap Growth Fund, the SmallCap Growth Fund, the Balanced Fund, the MidCap Growth Fund, the Capital Appreciation Fund, the Health Sciences Fund, and the SmallCap and MidCap Growth Fund paid the Distributor commissions of $597,341, $151,233, $128,640, $1,125,184, $544,504, $148,697 and $45,023, respectively, in connection with securities transactions. (e) Shareholder Administrative Fees and Expenses: The Trust has entered into a shareholder administrative services agreement with Alger Shareholder Services, Inc. ("Alger Services") to compensate Alger Services on a per account basis for its liaison and administrative oversight of Boston Financial Data Services, Inc., the transfer agent for the Funds ("BFDS") and other related services. During the period ended April 30, 2007, the LargeCap Growth Fund, the SmallCap Growth Fund, the Balanced Fund, the MidCap Growth Fund, the Capital Appreciation Fund, the Health Sciences Fund, the SmallCap and MidCap Growth Fund, the Core Fixed-Income Fund and the Money Market Fund -93- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- incurred fees of $68,020, $55,124, $18,591, $66,896, $91,213, $17,315, $6,528, $129 and $11,320, respectively, for these services provided by Alger Services. In addition, during the period ended April 30, 2007, the LargeCap Growth Fund, the SmallCap Growth Fund, the Balanced Fund, the MidCap Growth Fund, the Capital Appreciation Fund, the Health Sciences Fund, the SmallCap and MidCap Growth Fund, the Core Fixed-Income Fund and the Money Market Fund reimbursed Alger Services $20,773, $18,544, $5,597, $29,604, $19,947, $9,883, $3,716, $149 and $2,653, respectively, for shareholder administrative related expenses paid by Alger Services on behalf of the Funds. (f) Shareholder Servicing Fees: The Trust has entered into a shareholder servicing agreement with the Distributor whereby the Distributor provides each Fund, other than the Money Market Fund, with ongoing servicing of shareholder accounts. As compensation for such services, each designated Fund pays the Distributor a monthly fee at an annual rate equal to .25% of each Fund's average daily net assets. The shareholder servicing agreement was terminated on February 28, 2007 for all Funds except Class C shares of the Balanced Fund and Health Sciences Fund. (g) Other Transactions With Affiliates: Certain trustees and officers of the Trust are directors and officers of Alger Management, the Distributor and Alger Services. The Trust pays each Trustee who is not affiliated with the Advisor or its affiliates an annual fee of $2,000. The Chairman of the Board of Trustees receives an additional annual fee of $10,000 which is paid, pro rata, by all funds managed by Alger Management. Additionally, each member of the audit committee receives an additional annual fee of $500 per fund. At April 30, 2007, Alger Management and its affiliates owned 639,165 shares and 167,753 shares of the SmallCap and MidCap Growth Fund and the Core Fixed-Income Fund, respectively. NOTE 4 -- SECURITIES TRANSACTIONS: -------------------------------------------------------------------------------- The following summarizes the securities transactions by the Trust, other than short-term securities, for the year ended April 30, 2007: PURCHASES SALES -------------------------------------------------------------------------------- LargeCap Growth Fund $ 455,909,223 $ 511,572,154 -------------------------------------------------------------------------------- SmallCap Growth Fund 266,178,583 130,680,137 -------------------------------------------------------------------------------- Balanced Fund 105,358,778 139,717,210 -------------------------------------------------------------------------------- MidCap Growth Fund 1,037,335,006 1,116,470,814 -------------------------------------------------------------------------------- Capital Appreciation Fund 547,952,581 562,871,199 -------------------------------------------------------------------------------- Health Sciences Fund 154,258,299 195,150,298 -------------------------------------------------------------------------------- SmallCap and MidCap Growth Fund 54,754,988 27,078,451 -------------------------------------------------------------------------------- Core Fixed-Income Fund 3,113,076 3,274,500 -------------------------------------------------------------------------------- As of April 30, 2007, the Alger LargeCap Growth Fund and the Alger MidCap Growth Fund had portfolio securities valued at $7,182,910 and $37,534,525, respectively, segregated as collateral for written options. -94- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- Written call and put option activity for the six months ended April 30, 2007, was as follows: -------------------------------------------------------------------------------- NUMBER OF PREMIUMS CONTRACTS RECEIVED ------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND ------------------------------------------------------------------------------- Options outstanding at October 31, 2006 1,555 $ 372,691 Options written 6,641 1,539,283 Options closed or expired (3,910) (1,159,989) Options exercised (590) (108,320) ------------------------------------------------------------------------------- OPTIONS OUTSTANDING AT APRIL 30, 2007 3,696 $ 643,665 ------------------------------------------------------------------------------- ALGER MIDCAP GROWTH FUND ------------------------------------------------------------------------------- Options outstanding at October 31, 2006 10,430 $ 1,788,254 Options written 16,350 2,136,848 Options closed or expired (10,382) (1,781,918) Options exercised (2,058) (606,972) ------------------------------------------------------------------------------- OPTIONS OUTSTANDING AT APRIL 30, 2007 14,340 $ 1,536,212 ------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION FUND ------------------------------------------------------------------------------- Options outstanding at October 31, 2006 -- $ -- Options written 2,453 848,748 Options exercised (2,453) (848,748) ------------------------------------------------------------------------------- OPTIONS OUTSTANDING AT APRIL 30, 2007 -- $ -- ------------------------------------------------------------------------------- NOTE 5 -- LINES OF CREDIT: ------------------------------------------------------------------------------- The Trust participates in committed lines of credit with other mutual funds managed by Alger Management. All borrowings have variable interest rates and are payable on demand. With the exception of the Capital Appreciation Fund, the Health Sciences Fund and the SmallCap and MidCap Growth Fund, the Trust borrows under such lines of credit exclusively for temporary or emergency purposes. The Capital Appreciation Fund, the Health Sciences Fund and the SmallCap and MidCap Growth Fund, may each borrow under these lines up to 1/3 of the value of their assets, to purchase additional securities. To the extent the Capital Appreciation Fund, the Health Sciences Fund and the SmallCap and MidCap Growth Fund borrow under these lines, they must pledge securities with a total value of at least twice the amount borrowed. For the six months ended April 30, 2007, the Trust had the following borrowings: -95- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- AVERAGE WEIGHTED AVERAGE BORROWING INTEREST RATE -------------------------------------------------------------------------------- LargeCap Growth Fund $ 316,906 5.77% -------------------------------------------------------------------------------- Balanced Fund 576,033 5.79 -------------------------------------------------------------------------------- MidCap Growth Fund 744,039 5.78 -------------------------------------------------------------------------------- Capital Appreciation Fund 2,387,746 5.79 -------------------------------------------------------------------------------- SmallCap and MidCap Growth Fund 91,359 5.76 -------------------------------------------------------------------------------- Core Fixed-Income Fund 12,245 5.77 -------------------------------------------------------------------------------- NOTE 6 -- SHARE CAPITAL: -------------------------------------------------------------------------------- The Trust has an unlimited number of authorized shares of beneficial interest of $.001 par value which are presently divided into ten series. Each series, other than the Money Market Fund, is divided into three separate classes. The transactions of shares of beneficial interest were as follows:
----------------------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED APRIL 30, 2007 OCTOBER 31, 2006 ----------------------------------------------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND ----------------------------------------------------------------------------------------------------- CLASS A: Shares sold 1,031,315 $ 12,075,319 3,092,139 $ 33,919,549 Shares converted from Class B 1,010,965 11,784,358 1,346,439 14,689,650 Shares redeemed (2,720,188) (32,045,914) (5,317,968) (57,525,866) ----------------------------------------------------------------------------------------------------- NET DECREASE (677,908) $ (8,186,237) (879,390) $ (8,916,667) ===================================================================================================== CLASS B: Shares sold 607,077 $ 6,460,673 1,772,746 $ 17,840,462 Shares converted to Class A (1,102,782) (11,784,358) (1,460,319) (14,689,650) Shares redeemed (2,614,040) (28,055,475) (5,557,777) (55,958,370) ----------------------------------------------------------------------------------------------------- NET DECREASE (3,109,745) $ (33,379,160) (5,245,350) $ (52,807,558) ===================================================================================================== CLASS C: Shares sold 206,844 $ 2,234,093 764,005 $ 7,736,946 Shares redeemed (572,266) (6,142,025) (921,858) (9,195,757) ----------------------------------------------------------------------------------------------------- NET DECREASE (365,422) $ (3,907,932) (157,853) $ (1,458,811) =====================================================================================================
-96- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) --------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED APRIL 30, 2007 OCTOBER 31, 2006 ----------------------------------------------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND ----------------------------------------------------------------------------------------------------- CLASS A: Shares sold 27,605,578 $ 186,441,922 18,475,023 $ 107,981,351 Shares converted from Class B 576,906 3,782,607 1,768,818 10,293,683 Shares redeemed (6,798,999) (45,076,804) (6,412,502) (37,629,835) ----------------------------------------------------------------------------------------------------- NET INCREASE 21,383,485 $ 145,147,725 13,831,339 $ 80,645,199 ===================================================================================================== CLASS B: Shares sold 616,110 $ 3,718,958 1,217,948 $ 6,605,766 Shares converted to Class A (631,731) (3,782,607) (1,925,146) (10,293,683) Shares redeemed (953,463) (5,775,020) (2,069,756) (11,137,750) ----------------------------------------------------------------------------------------------------- NET DECREASE (969,084) $ (5,838,669) (2,776,954) $ (14,825,667) ===================================================================================================== CLASS C: Shares sold 2,831,689 $ 17,298,874 2,368,142 $ 12,908,036 Shares redeemed (193,148) (1,175,995) (389,410) (2,080,467) ----------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) 2,638,541 $ 16,122,879 1,978,732 $ 10,827,569 ===================================================================================================== ALGER BALANCED FUND ----------------------------------------------------------------------------------------------------- CLASS A: Shares sold 101,908 $ 2,217,111 271,329 $ 5,651,898 Shares converted from Class B 56,346 1,224,994 63,414 1,308,574 Dividends reinvested 18,395 395,969 24,300 506,652 Shares redeemed (796,791) (17,218,224) (948,272) (19,667,910) ----------------------------------------------------------------------------------------------------- NET DECREASE (620,142) $ (13,380,150) (589,229) $ (12,200,786) ===================================================================================================== CLASS B: Shares sold 64,955 $ 1,391,513 216,962 $ 4,389,452 Dividends reinvested 13,438 284,295 8,911 182,673 Shares converted to Class A (57,402) (1,224,994) (64,746) (1,308,574) Shares redeemed (618,233) (13,193,711) (1,283,208) (25,937,982) ----------------------------------------------------------------------------------------------------- NET DECREASE (597,242) $ (12,742,897) (1,122,081) $ (22,674,431) ===================================================================================================== CLASS C: Shares sold 15,357 $ 328,727 85,134 $ 1,739,100 Dividends reinvested 4,927 105,047 2,969 61,125 Shares redeemed (344,368) (7,331,379) (287,933) (5,835,655) ----------------------------------------------------------------------------------------------------- NET DECREASE (324,084) $ (6,897,605) (199,830) $ (4,035,430) =====================================================================================================
-97- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) --------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED APRIL 30, 2007 OCTOBER 31, 2006 ----------------------------------------------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------------------------------------------------- ALGER MIDCAP GROWTH FUND ----------------------------------------------------------------------------------------------------- CLASS A: Shares sold 3,863,035 $ 34,355,522 9,608,514 $ 85,490,186 Shares converted from Class B 837,910 7,448,008 1,836,884 16,391,424 Dividends Reinvested 3,097,727 26,455,593 3,627,043 31,156,299 Shares redeemed (8,139,234) (72,278,784) (14,173,215) (124,690,515) ----------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) (340,562) $ (4,019,661) 899,226 $ 8,347,394 ===================================================================================================== CLASS B: Shares sold 1,513,406 $ 11,905,342 2,569,164 $ 20,982,694 Dividends Reinvested 2,367,397 18,063,241 3,521,745 27,575,261 Shares converted to Class A (935,028) (7,448,008) (2,017,114) (16,391,424) Shares redeemed (4,357,971) (34,948,344) (8,789,176) (70,609,143) ----------------------------------------------------------------------------------------------------- NET DECREASE (1,412,196) $ (12,427,769) (4,715,381) $ (38,442,612) ===================================================================================================== CLASS C: Shares sold 804,131 $ 6,272,798 1,520,524 $ 12,420,232 Dividends Reinvested 561,661 4,274,237 1,042,599 8,142,699 Shares redeemed (1,491,803) (11,978,562) (2,679,733) (21,249,320) ----------------------------------------------------------------------------------------------------- NET DECREASE (126,011) $ (1,431,527) (116,610) $ (686,389) ===================================================================================================== ALGER CAPITAL APPRECIATION FUND ----------------------------------------------------------------------------------------------------- CLASS A: Shares sold 3,150,740 $ 38,659,099 2,155,695 $ 21,936,699 Shares converted from Class B 612,001 7,365,953 1,004,637 10,168,929 Shares redeemed (1,721,325) (20,784,528) (3,230,103) (32,874,057) ----------------------------------------------------------------------------------------------------- NET DECREASE 2,041,416 $ 25,240,524 (69,771) $ (768,429) ===================================================================================================== CLASS B: Shares sold 642,765 $ 7,223,430 917,930 $ 8,749,249 Shares converted to Class A (664,100) (7,365,953) (1,083,067) (10,168,929) Shares redeemed (2,103,308) (23,290,201) (4,605,216) (43,448,810) ----------------------------------------------------------------------------------------------------- NET DECREASE (2,124,643) $ (23,432,724) (4,770,353) $ (44,868,490) ===================================================================================================== CLASS C: Shares sold 785,103 $ 8,851,594 329,990 $ 3,138,801 Shares redeemed (340,993) (3,798,049) (808,470) (7,641,141) ----------------------------------------------------------------------------------------------------- NET DECREASE 444,110 $ 5,053,545 (478,480) $ (4,502,340) =====================================================================================================
-98- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED APRIL 30, 2007 OCTOBER 31, 2006 ------------------------------------------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------------------------------------- ALGER HEALTH SCIENCES FUND ------------------------------------------------------------------------------------------------- CLASS A: Shares sold 2,363,870 $ 42,107,425 5,614,511 $ 94,667,019 Shares converted from Class B 23,518 414,892 17,973 302,133 Dividends reinvested 263,528 4,522,135 93,237 1,539,352 Shares redeemed (1,440,444) (25,707,317) (2,446,242) (41,127,418) ------------------------------------------------------------------------------------------------- NET INCREASE 1,210,472 $ 21,337,135 3,279,479 $ 55,381,086 ================================================================================================= CLASS B: Shares sold 90,796 $ 1,557,571 507,772 $ 8,323,858 Dividends reinvested 42,682 705,960 14,641 235,133 Shares converted to Class A (24,419) (414,892) (18,508) (302,133) Shares redeemed (233,464) (4,015,333) (220,806) (3,586,378) ------------------------------------------------------------------------------------------------- NET INCREASE (124,405) $ (2,166,694) 283,099 $ 4,670,480 ================================================================================================= CLASS C: Shares sold 424,486 $ 7,291,332 1,344,943 $ 22,127,155 Dividends reinvested 84,574 1,399,848 25,825 414,753 Shares redeemed (328,379) (5,661,096) (349,542) (5,630,271) ------------------------------------------------------------------------------------------------- NET INCREASE 180,681 $ 3,030,084 1,021,226 $ 16,911,637 ================================================================================================= ALGER SMALLCAP AND MIDCAP GROWTH FUND ------------------------------------------------------------------------------------------------- CLASS A: Shares sold 2,599,930 $ 37,448,564 1,575,322 $ 20,793,926 Shares converted from Class B 6,222 87,265 5,646 74,716 Dividends reinvested 107,112 1,480,293 48,077 587,989 Shares redeemed (1,102,943) (16,034,248) (404,587) (5,281,632) ------------------------------------------------------------------------------------------------- NET INCREASE 1,610,321 $ 22,981,874 1,224,458 $ 16,174,999 ================================================================================================= CLASS B: Shares sold 185,745 $ 2,616,337 312,370 $ 4,005,376 Dividends reinvested 23,843 317,349 17,794 211,565 Shares converted to Class A (6,449) (87,265) (5,813) (74,716) Shares redeemed (46,411) (653,188) (58,613) (737,362) ------------------------------------------------------------------------------------------------- NET INCREASE 156,728 $ 2,193,233 265,738 $ 3,404,863 ================================================================================================= CLASS C: Shares sold 572,972 $ 8,064,018 807,657 $ 10,312,508 Dividends reinvested 36,900 491,137 12,118 144,205 Shares redeemed (33,871) (468,426) (96,266) (1,194,473) ------------------------------------------------------------------------------------------------- NET INCREASE 576,001 $ 8,086,729 723,509 $ 9,262,240 =================================================================================================
-99- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------- FOR THE SIX MONTHS ENDED FOR THE PERIOD ENDED APRIL 30, 2007 OCTOBER 31, 2006 ------------------------------------------------------------------------------------------------- SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------------------------------------- ALGER CORE FIXED-INCOME FUND** ------------------------------------------------------------------------------------------------- CLASS A: Shares sold 24,696 $ 247,556 527,887 $ 5,277,059 Shares converted from Class B 253 2,521 399 3,949 Dividends reinvested 5,139 51,208 13,083 129,665 Shares redeemed (103,658) (1,027,434) (248,509) (2,500,000) ------------------------------------------------------------------------------------------------- NET INCREASE (73,570) $ (726,149) 292,860 $ 2,910,673 ================================================================================================= CLASS B: Shares sold 32,616 $ 325,157 32,232 $ 320,615 Dividends reinvested 641 6,384 480 4,769 Shares converted to Class A (253) (2,521) (399) (3,949) Shares redeemed (4,521) (43,996) (678) (6,740) ------------------------------------------------------------------------------------------------- NET INCREASE 28,483 $ 285,024 31,635 $ 314,695 ================================================================================================= CLASS C: Shares sold 3,456 $ 34,609 42,234 $ 420,018 Dividends reinvested 739 7,366 376 3,737 Shares redeemed (3,084) (31,936) (56) (561) ------------------------------------------------------------------------------------------------- NET INCREASE 1,111 $ 10,039 42,554 $ 423,194 ================================================================================================= ALGER MONEY MARKET FUND ------------------------------------------------------------------------------------------------- Shares sold 18,747,092 $ 18,747,092 31,241,531 $ 31,268,531+ Dividends reinvested 1,111,849 1,111,849 2,071,206 2,071,206 Shares redeemed (21,066,420) (21,066,420) (39,842,295) (39,842,295) ------------------------------------------------------------------------------------------------- NET DECREASE (1,207,479) $ (1,207,479) (6,529,558) $ (6,502,558) =================================================================================================
+ DOLLAR AMOUNT OF SHARES SOLD INCLUDES A REIMBURSEMENT BY ALGER MANAGEMENT OF $27,000 FOR LOSSES ON PORTFOLIO INVESTMENTS INCURRED IN PREVIOUS FISCAL YEARS. ** INITIALLY OFFERED MARCH 1, 2006. -100- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- NOTE 7 -- TAX CHARACTER OF DISTRIBUTIONS TO SHAREHOLDERS: -------------------------------------------------------------------------------- The tax character of distributions paid during the six months ended April 30, 2007 and the year ended October 31, 2006 were as follows: SIX MONTHS ENDED YEAR ENDED APRIL 30, 2007 OCTOBER 31, 2006 ------------------------------------------------------------------------------- LARGECAP GROWTH FUND ------------------------------------------------------------------------------- Distributions paid from: Ordinary Income -- -- Long-term capital gain -- -- ------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID -- -- =============================================================================== SMALLCAP GROWTH FUND ------------------------------------------------------------------------------- Distributions paid from: Ordinary Income -- -- Long-term capital gain -- -- ------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID -- -- =============================================================================== BALANCED FUND ------------------------------------------------------------------------------- Distributions paid from: Ordinary Income $ 1,101,222 $ 808,232 Long-term capital gain -- -- ------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID $ 1,101,222 $ 808,232 =============================================================================== MIDCAP GROWTH FUND ------------------------------------------------------------------------------- Distributions paid from: Ordinary Income $32,099,178 $49,398,077 Long-term capital gain 33,274,449 24,194,224 ------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID $65,373,627 $73,592,301 =============================================================================== CAPITAL APPRECIATION FUND ------------------------------------------------------------------------------- Distributions paid from: Ordinary Income -- -- Long-term capital gain -- -- ------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID -- -- =============================================================================== HEALTH SCIENCES FUND ------------------------------------------------------------------------------- Distributions paid from: Ordinary Income $ 1,400,122 $ 1,970,103 Long-term capital gain 7,401,655 967,799 ------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID $ 8,801,777 $ 2,937,902 =============================================================================== SMALLCAP AND MIDCAP GROWTH FUND ------------------------------------------------------------------------------- Distributions paid from: Ordinary Income -- $ 391,183 Long-term capital gain $ 2,733,323 959,667 ------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID $ 2,733,323 $ 1,350,850 =============================================================================== -101- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- SIX MONTHS ENDED YEAR ENDED APRIL 30, 2007 OCTOBER 31, 2006 ------------------------------------------------------------------------------- CORE FIXED-INCOME FUND* ------------------------------------------------------------------------------- Distributions paid from: Ordinary Income $ 69,354 $ 138,772 Long-term capital gain -- -- ------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID $ 69,354 $ 138,772 =============================================================================== MONEY MARKET FUND ------------------------------------------------------------------------------- Distributions paid from: Ordinary Income $ 1,152,567 $ 2,140,713 Long-term capital gain -- -- ------------------------------------------------------------------------------- TOTAL DISTRIBUTIONS PAID $ 1,152,567 $ 2,140,713 =============================================================================== * COMMENCED OPERATIONS MARCH 1, 2006. As of October 31, 2006, the components of distributable earnings on a tax basis were as follows: LARGECAP GROWTH FUND ------------------------------------------------------------------------------- Undistributed ordinary income -- ------------------------------------------------------------------------------- Undistributed long-term gain -- ------------------------------------------------------------------------------- Unrealized appreciation $16,576,494 ------------------------------------------------------------------------------- SMALLCAP GROWTH FUND ------------------------------------------------------------------------------- Undistributed ordinary income -- ------------------------------------------------------------------------------- Undistributed long-term gain -- ------------------------------------------------------------------------------- Unrealized appreciation $51,159,340 ------------------------------------------------------------------------------- BALANCED FUND ------------------------------------------------------------------------------- Undistributed ordinary income $ 902,780 ------------------------------------------------------------------------------- Undistributed long-term gain -- ------------------------------------------------------------------------------- Unrealized appreciation $ 3,207,612 ------------------------------------------------------------------------------- MIDCAP GROWTH FUND ------------------------------------------------------------------------------- Undistributed ordinary income $31,912,710 ------------------------------------------------------------------------------- Undistributed long-term gain $33,269,004 ------------------------------------------------------------------------------- Unrealized appreciation $20,611,126 ------------------------------------------------------------------------------- CAPITAL APPRECIATION FUND ------------------------------------------------------------------------------- Undistributed ordinary income -- ------------------------------------------------------------------------------- Undistributed long-term gain -- ------------------------------------------------------------------------------- Unrealized appreciation $25,456,187 ------------------------------------------------------------------------------- HEALTH SCIENCES FUND ------------------------------------------------------------------------------- Undistributed ordinary income $ 1,399,894 ------------------------------------------------------------------------------- Undistributed long-term gain $ 7,401,379 ------------------------------------------------------------------------------- Unrealized appreciation $17,945,588 ------------------------------------------------------------------------------- SMALLCAP AND MIDCAP GROWTH FUND ------------------------------------------------------------------------------- Undistributed ordinary income -- ------------------------------------------------------------------------------- Undistributed long-term gain $ 2,733,241 ------------------------------------------------------------------------------- Unrealized appreciation $ 7,501,951 ------------------------------------------------------------------------------- TECHNOLOGY FUND ------------------------------------------------------------------------------- Undistributed ordinary income -- ------------------------------------------------------------------------------- Undistributed long-term gain -- ------------------------------------------------------------------------------- Unrealized appreciation $ 173,253 ------------------------------------------------------------------------------- -102- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- CORE FIXED-INCOME FUND ------------------------------------------------------------------------------- Undistributed ordinary income $ -- ------------------------------------------------------------------------------- Undistributed long-term gain -- ------------------------------------------------------------------------------- Unrealized appreciation $ 38,666 ------------------------------------------------------------------------------- MONEY MARKET FUND ------------------------------------------------------------------------------- Undistributed ordinary income 4,872 ------------------------------------------------------------------------------- Undistributed long-term gain -- ------------------------------------------------------------------------------- Unrealized appreciation -- ------------------------------------------------------------------------------- The difference between book basis and tax basis unrealized appreciation is determined annually and is attributable primarily to the tax deferral of losses on wash sales. At October 31, 2006, the Funds, for federal income tax purposes, had capital loss carryforwards which expire as set forth in the table below. These amounts may be applied against future net realized gains until the earlier of their utilization or expiration.
------------------------------------------------------------------------------------------------------------- EXPIRATION DATE ------------------------------------------------------------------------------------------------------------- 2009 2010 2011 2012 2013 2014 TOTAL ------------------------------------------------------------------------------------------------------------- LargeCap Growth Fund $ 2,953,593 $165,962,647 $21,526,122 -- -- -- $190,442,362 ------------------------------------------------------------------------------------------------------------- SmallCap Growth Fund $ 60,594,230 $ 30,152,501 -- -- -- -- $ 90,746,731 ------------------------------------------------------------------------------------------------------------- Balanced Fund -- $ 19,860,519 $ 2,892,067 -- -- -- $ 22,752,586 ------------------------------------------------------------------------------------------------------------- Capital Appreciation Fund $251,990,236 $204,820,909 -- -- -- -- $465,811,145 ------------------------------------------------------------------------------------------------------------- Core Fixed-Income Fund -- -- -- -- -- $32,189 $ 32,189 ------------------------------------------------------------------------------------------------------------- Money Market Fund $ 216,474 -- -- $640 -- -- $ 217,114 -------------------------------------------------------------------------------------------------------------
NOTE 8 -- LITIGATION: -------------------------------------------------------------------------------- Alger Management has responded to inquiries, document requests and/or subpoenas from various regulatory authorities, in connection with their investigations of practices in the mutual fund industry identified as "market timing" and "late trading." On October 11, 2006, Alger Management, Alger Inc. and Alger Shareholder Services, Inc. executed an Assurance of Discontinuance with the Office of the New York State Attorney General ("NYAG"). On January 18, 2007 the Securities and Exchange Commission issued an order implementing settlements reached with Alger Management and Alger Inc. As part of the settlements with the Commission and the NYAG, without admitting or denying liability, the firms paid $30 million to reimburse fund shareholders and a fine of $10 million; and agreed to certain other remedial measures including a reduction in management fees of $1 million per year for five years. The entire $40 million and fee reduction will be available for the benefit of investors. Alger Management has advised the Funds that the settlement has not adversely affected the operations of Alger Management, Alger Inc. or their affiliates, or adversely affect their ability to continue to provide services to the Funds. On August 31, 2005, the West Virginia Securities Commissioner (the "WVSC") in an ex parte Summary Order to Cease and Desist and Notice of Right to Hearing concluded that Alger Management and Alger Inc. had violated the West Virginia Uniform Securities Act (the "WVUSA"), and ordered Alger Management and Alger Inc. to cease and desist from further violations of the WVUSA by engaging in the market-timing -103- -------------------------------------------------------------------------------- THE ALGER FUNDS | NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- related conduct described in the order. The ex parte order provided notice of their right to a hearing with respect to the violations of law asserted by the WVSC. Other firms unaffiliated with Alger Management were served with similar orders. Alger Management and Alger Inc. intend to request a hearing for the purpose of seeking to vacate or modify the order. In addition, in 2003 and 2004 several purported class actions and shareholder derivative suits were filed against various parties in the mutual fund industry, including Alger Management, certain mutual funds managed by Alger Management (the "Alger Mutual Funds"), and certain current and former Alger Mutual Fund trustees and officers, alleging wrongful conduct related to market-timing and late-trading by mutual fund shareholders. These cases were transferred to the U.S. District Court of Maryland by the Judicial Panel on Multidistrict Litigation for consolidated pre-trial proceedings. In September 2004, consolidated amended complaints involving these cases -- a Consolidated Amended Fund Derivative Complaint (the "Derivative Complaint") and two substantially identical Consolidated Amended Class Action Complaints (together, the "Class Action Complaint") -- were filed in the Maryland federal district court under the caption number 1:04-MD-15863 (JFM). In April 2005, a civil lawsuit involving similar allegations was filed by the West Virginia Attorney General and also transferred to the Maryland District Court, but such lawsuit has since been withdrawn. The Derivative Complaint alleged (i) violations, by Alger Management and, depending on the specific offense alleged, by Alger Inc. and/or the fund trustee defendants, of Sections 36(a), 36(b), 47, and 48 of the Investment Company Act of 1940, as amended, (the "Investment Company Act") and of Sections 206 and 215 of the Investment Advisers Act of 1940, as amended, breach of fiduciary duty, and breach of contract, (ii) various offenses by other third-party defendants, and (iii) unjust enrichment by all the named defendants. The Class Action Complaint alleged, in addition to the offenses listed above, (i) violations, by Alger Management, Alger Inc., their affiliates, the funds named as defendants, including the Funds, and the current and former fund trustees and officers, of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended, Sections 10(b) (and Rule 10b-5 thereunder) and 20(a) of the Securities Exchange Act of 1934, as amended, (the "1934 Act"), and Section 34(b) of the Investment Company Act, (ii) breach of contract by the funds named as defendants, and (iii) unjust enrichment of the defendants. Motions to dismiss the Class Action Complaint and the Derivative Complaint were subsequently filed. As a result of a series of court orders, all claims in the Class Action Complaint and the Derivative Complaint have been dismissed, other than claims under the 1934 Act against Alger Management, Alger Inc., Alger Associates, Inc. and Alger Shareholder Services, Inc., and certain present and former members of the senior management of Alger Management and/or Alger Inc., and claims under Section 36(b) of the Investment Company Act against Alger Management, Alger Inc., Alger Associates, Inc. and Alger Shareholder Services, Inc. -104- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION -------------------------------------------------------------------------------- SHAREHOLDER EXPENSE EXAMPLE -------------------------------------------------------------------------------- As a shareholder of the Fund, you incur two types of costs: transaction costs, if applicable, including sales charges (loads) and redemption fees; and ongoing costs, including management fees, distribution (12b-1) fees, if applicable, and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example below is based on an investment of $1,000 invested at the beginning of the six-month period starting November 1, 2006 and ending April 30, 2007. ACTUAL EXPENSES -------------------------------------------------------------------------------- The first line for each class of shares in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you would have paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES -------------------------------------------------------------------------------- The second line for each class of shares in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratios for each class of shares and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) and redemption fees. Therefore, the second line under each class of shares in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. -105- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- SHAREHOLDER EXPENSE EXAMPLE --------------------------------------------------------------------------------
RATIO OF EXPENSES TO AVERAGE EXPENSES NET ASSETS BEGINNING ENDING PAID DURING FOR THE ACCOUNT ACCOUNT THE SIX MONTHS SIX MONTHS VALUE VALUE ENDED ENDED NOVEMBER 1, APRIL 30, APRIL 30, APRIL 30, 2006 2007 2007(b) 2007(c) ----------------------------------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND ----------------------------------------------------------------------------------------------------------- CLASS A Actual $ 1,000.00 $ 1,105.10 $ 7.20 1.38% Hypothetical(a) 1,000.00 1,017.95 6.90 1.38 ----------------------------------------------------------------------------------------------------------- CLASS B Actual 1,000.00 1,100.80 11.04 2.12 Hypothetical(a) 1,000.00 1,014.28 10.59 2.12 ----------------------------------------------------------------------------------------------------------- CLASS C Actual 1,000.00 1,100.90 11.10 2.13 Hypothetical(a) 1,000.00 1,014.23 10.64 2.13 ----------------------------------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND ----------------------------------------------------------------------------------------------------------- CLASS A Actual $ 1,000.00 $ 1,106.20 $ 7.52 1.44% Hypothetical(a) 1,000.00 1,017.65 7.20 1.44 ----------------------------------------------------------------------------------------------------------- CLASS B Actual 1,000.00 1,102.30 11.36 2.18 Hypothetical(a) 1,000.00 1,013.98 10.89 2.18 ----------------------------------------------------------------------------------------------------------- CLASS C Actual 1,000.00 1,102.10 11.47 2.20 Hypothetical(a) 1,000.00 1,013.88 10.99 2.20 ----------------------------------------------------------------------------------------------------------- ALGER BALANCED FUND ----------------------------------------------------------------------------------------------------------- CLASS A Actual $ 1,000.00 $ 1,077.30 $ 6.90 1.34% Hypothetical(a) 1,000.00 1,018.15 6.71 1.34 ----------------------------------------------------------------------------------------------------------- CLASS B Actual 1,000.00 1,073.30 10.80 2.10 Hypothetical(a) 1,000.00 1,014.38 10.49 2.10 ----------------------------------------------------------------------------------------------------------- CLASS C Actual 1,000.00 1,073.40 10.80 2.10 Hypothetical(a) 1,000.00 1,014.38 10.49 2.10 ----------------------------------------------------------------------------------------------------------- ALGER MIDCAP GROWTH FUND ----------------------------------------------------------------------------------------------------------- CLASS A Actual $ 1,000.00 $ 1,161.30 $ 7.50 1.40% Hypothetical(a) 1,000.00 1,017.85 7.00 1.40 ----------------------------------------------------------------------------------------------------------- CLASS B Actual 1,000.00 1,156.70 11.50 2.15 Hypothetical(a) 1,000.00 1,014.13 10.74 2.15 ----------------------------------------------------------------------------------------------------------- CLASS C Actual 1,000.00 1,157.20 11.50 2.15 Hypothetical(a) 1,000.00 1,014.13 10.74 2.15 ----------------------------------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION FUND ----------------------------------------------------------------------------------------------------------- CLASS A Actual $ 1,000.00 $ 1,166.50 $ 8.27 1.54% Hypothetical(a) 1,000.00 1,017.16 7.70 1.54 ----------------------------------------------------------------------------------------------------------- CLASS B Actual 1,000.00 1,162.70 12.23 2.28 Hypothetical(a) 1,000.00 1,013.49 11.38 2.28 ----------------------------------------------------------------------------------------------------------- CLASS C Actual 1,000.00 1,162.90 12.23 2.28 Hypothetical(a) 1,000.00 1,013.49 11.38 2.28 -----------------------------------------------------------------------------------------------------------
-106- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- SHAREHOLDER EXPENSE EXAMPLE (CONTINUED) --------------------------------------------------------------------------------
RATIO OF EXPENSES TO AVERAGE EXPENSES NET ASSETS BEGINNING ENDING PAID DURING FOR THE ACCOUNT ACCOUNT THE SIX MONTHS SIX MONTHS VALUE VALUE ENDED ENDED NOVEMBER 1, APRIL 30, APRIL 30, APRIL 30, 2006 2007 2007(b) 2007(c) ----------------------------------------------------------------------------------------------------------- ALGER HEALTH SCIENCES FUND ----------------------------------------------------------------------------------------------------------- CLASS A Actual $ 1,000.00 $ 1,071.00 $ 7.09 1.38% Hypothetical(a) 1,000.00 1,017.95 6.90 1.38 ----------------------------------------------------------------------------------------------------------- CLASS B Actual 1,000.00 1,067.10 10.87 2.12 Hypothetical(a) 1,000.00 1,014.28 10.59 2.12 ----------------------------------------------------------------------------------------------------------- CLASS C Actual 1,000.00 1,067.10 10.87 2.12 Hypothetical(a) 1,000.00 1,014.28 10.59 2.12 ----------------------------------------------------------------------------------------------------------- ALGER SMALLCAP AND MIDCAP GROWTH FUND ----------------------------------------------------------------------------------------------------------- CLASS A Actual $ 1,000.00 $ 1,148.50 $ 7.67 1.44% Hypothetical(a) 1,000.00 1,017.65 7.20 1.44 ----------------------------------------------------------------------------------------------------------- CLASS B Actual 1,000.00 1,145.50 11.65 2.19 Hypothetical(a) 1,000.00 1,013.93 10.94 2.19 ----------------------------------------------------------------------------------------------------------- CLASS C Actual 1,000.00 1,144.60 11.70 2.20 Hypothetical(a) 1,000.00 1,013.88 10.99 2.20 ----------------------------------------------------------------------------------------------------------- ALGER CORE FIXED-INCOME FUND ----------------------------------------------------------------------------------------------------------- CLASS A Actual $ 1,000.00 $ 1,026.30 $ 5.02 1.00% Hypothetical(a) 1,000.00 1,019.84 5.01 1.00 ----------------------------------------------------------------------------------------------------------- CLASS B Actual 1,000.00 1,022.70 8.78 1.75 Hypothetical(a) 1,000.00 1,016.12 8.75 1.75 ----------------------------------------------------------------------------------------------------------- CLASS C Actual 1,000.00 1,022.50 8.78 1.75 Hypothetical(a) 1,000.00 1,016.12 8.75 1.75 ----------------------------------------------------------------------------------------------------------- ALGER MONEY MARKET FUND ----------------------------------------------------------------------------------------------------------- Actual $ 1,000.00 $ 1,021.30 $ 4.31 0.86% Hypothetical(a) 1,000.00 1,020.53 4.31 0.86 -----------------------------------------------------------------------------------------------------------
(a) 5% ANNUAL RETURN BEFORE EXPENSES. (b) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF THE RESPECTIVE SHARE CLASS, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 181/365 (TO REFLECT THE ONE-HALF YEAR PERIOD). (c) ANNUALIZED. -107- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- PROXY VOTING RESULTS -------------------------------------------------------------------------------- Special meetings of the funds' shareholders were held on January 17, 2007 and February 14, 2007. The results of votes taken among shareholders on the proposal before them are reported below. Each vote reported represents one share held on the record date for the meeting. PROPOSAL 1 - TO ELECT SIX TRUSTEES OF THE FUND. HILARY M. ALGER # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 162,177,113 97.8% -------------------------------------------------------------------------------- Withheld 3,604,852 2.2% -------------------------------------------------------------------------------- Total 165,781,965 100.0% ================================================================================ CHARLES F. BAIRD, JR. # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 162,448,459 98.0% -------------------------------------------------------------------------------- Withheld 3,333,506 2.0% -------------------------------------------------------------------------------- Total 165,781,965 100.0% ================================================================================ ROGER P. CHEEVER # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 162,465,162 98.0% -------------------------------------------------------------------------------- Withheld 3,316,803 2.0% -------------------------------------------------------------------------------- Total 165,781,965 100.0% ================================================================================ LESTER L. COLBERT, JR. # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 162,394,912 98.0% -------------------------------------------------------------------------------- Withheld 3,387,053 2.0% -------------------------------------------------------------------------------- Total 165,781,965 100.0% ================================================================================ STEPHEN E. O'NEIL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 162,316,601 98.0% -------------------------------------------------------------------------------- Withheld 3,465,364 2.0% -------------------------------------------------------------------------------- Total 165,781,965 100.0% ================================================================================ NATHAN E. SAINT-AMAND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 162,383,692 98.0% -------------------------------------------------------------------------------- Withheld 3,398,273 2.0% -------------------------------------------------------------------------------- Total 165,781,965 100.0% ================================================================================ -108- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- PROPOSAL 2 - TO APPROVE AN INVESTMENT ADVISORY AGREEMENT WITH FRED ALGER MANAGEMENT, INC. ALGER BALANCED FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,878,235 70.5% -------------------------------------------------------------------------------- Against 54,411 1.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,150,278 28.2% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,680,399 73.2% -------------------------------------------------------------------------------- Against 528,922 2.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,197,847 24.3% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 297,018 83.0% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 60,956 17.0% -------------------------------------------------------------------------------- Total 357,974 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,411,437 71.3% -------------------------------------------------------------------------------- Against 89,214 1.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,088,038 27.5% -------------------------------------------------------------------------------- Total 7,588,689 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,349,283 81.8% -------------------------------------------------------------------------------- Against 474,588 1.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 4,493,183 16.5% -------------------------------------------------------------------------------- Total 27,317,054 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 32,685,136 75.8% -------------------------------------------------------------------------------- Against 713,573 1.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 9,726,358 22.5% -------------------------------------------------------------------------------- Total 43,125,067 100.0% ================================================================================ -109- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER MONEY MARKET FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 31,039,086 82.9% -------------------------------------------------------------------------------- Against 792,513 2.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,619,823 15.0% -------------------------------------------------------------------------------- Total 37,451,422 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,038,479 71.7% -------------------------------------------------------------------------------- Against 50,699 1.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 754,944 26.5% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 23,768,680 79.5% -------------------------------------------------------------------------------- Against 570,387 1.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,541,851 18.6% -------------------------------------------------------------------------------- Total 29,880,918 100.0% ================================================================================ PROPOSAL 3 - TO APPROVE REVISIONS TO THE FUNDAMENTAL INVESTMENT POLICIES OF THE FUND. ALGER BALANCED FUND - CONVERT THE FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,846,414 69.7% -------------------------------------------------------------------------------- Against 69,878 1.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,166,632 28.6% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO BORROWING MONEY # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,843,467 69.6% -------------------------------------------------------------------------------- Against 78,487 2.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,160,970 28.4% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO UNDERWRITING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,854,023 70.0% -------------------------------------------------------------------------------- Against 63,402 1.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,165,499 28.5% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ -110- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER BALANCED FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO LENDING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,845,259 69.7% -------------------------------------------------------------------------------- Against 76,121 1.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,161,544 28.4% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO ISSUING SENIOR SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,850,234 69.8% -------------------------------------------------------------------------------- Against 69,725 1.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,162,965 28.5% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO REAL ESTATE # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,856,710 70.0% -------------------------------------------------------------------------------- Against 65,072 1.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,161,142 28.4% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO COMMODITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,849,471 69.8% -------------------------------------------------------------------------------- Against 71,697 1.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,161,756 28.5% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO CONCENTRATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,851,146 69.8% -------------------------------------------------------------------------------- Against 71,694 1.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,160,084 28.4% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REVISE THE FUNDAMENTAL POLICIES RELATING TO DIVERSIFICATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,868,507 70.3% -------------------------------------------------------------------------------- Against 58,868 1.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,155,549 28.3% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ -111- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER BALANCED FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO THE PURCHASE OF ILLIQUID SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,845,026 69.7% -------------------------------------------------------------------------------- Against 74,132 1.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,163,766 28.5% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO BOTH PURCHASING SECURITIES ON MARGIN AND ENGAGING IN SHORT SALES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,841,163 69.6% -------------------------------------------------------------------------------- Against 78,160 1.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,163,601 28.5% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO INVESTMENT IN OTHER INVESTMENT COMPANIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,845,453 69.7% -------------------------------------------------------------------------------- Against 78,292 1.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,159,179 28.4% -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER BALANCED FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO PLEDGING ASSETS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,840,140 69.6% -------------------------------------------------------------------------------- Against 71,777 1.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,171,007 28.7 -------------------------------------------------------------------------------- Total 4,082,924 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - CONVERT THE FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,408,094 72.0% -------------------------------------------------------------------------------- Against 727,360 3.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,271,714 24.6% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ -112- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO BORROWING MONEY # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,405,422 72.0% -------------------------------------------------------------------------------- Against 712,348 3.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,289,398 24.7% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO UNDERWRITING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,433,038 72.1% -------------------------------------------------------------------------------- Against 679,898 3.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,294,232 24.7% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO LENDING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,411,927 72.0% -------------------------------------------------------------------------------- Against 694,471 3.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,300,770 24.8% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO ISSUING SENIOR SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,414,888 72.0% -------------------------------------------------------------------------------- Against 684,904 3.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,307,376 24.8% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO REAL ESTATE # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,484,580 72.3% -------------------------------------------------------------------------------- Against 644,213 3.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,278,375 24.7% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO COMMODITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,467,650 72.2% -------------------------------------------------------------------------------- Against 658,689 3.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,280,829 24.7% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ -113- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO CONCENTRATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,508,627 72.4% -------------------------------------------------------------------------------- Against 615,475 2.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,283,066 24.7% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - REVISE THE FUNDAMENTAL POLICIES RELATING TO DIVERSIFICATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,461,043 72.2% -------------------------------------------------------------------------------- Against 667,063 3.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,279,062 24.7% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO THE PURCHASE OF ILLIQUID SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,359,239 71.7% -------------------------------------------------------------------------------- Against 762,735 3.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,285,194 24.7% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO BOTH PURCHASING SECURITIES ON MARGIN AND ENGAGING IN SHORT SALES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,405,876 72.0% -------------------------------------------------------------------------------- Against 698,152 3.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,303,140 24.7% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CAPITAL APPRECIATION FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO INVESTMENT IN OTHER INVESTMENT COMPANIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,415,055 72.0% -------------------------------------------------------------------------------- Against 700,877 3.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,291,236 24.7% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ -114- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO PLEDGING ASSETS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 15,419,043 72.0% -------------------------------------------------------------------------------- Against 661,231 3.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,326,894 24.9% -------------------------------------------------------------------------------- Total 21,407,168 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - CONVERT THE FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO BORROWING MONEY # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO UNDERWRITING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO LENDING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO ISSUING SENIOR SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ -115- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER CORE FIXED-INCOME FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO REAL ESTATE # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO COMMODITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO CONCENTRATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REVISE THE FUNDAMENTAL POLICIES RELATING TO DIVERSIFICATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO THE PURCHASE OF ILLIQUID SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO BOTH PURCHASING SECURITIES ON MARGIN AND ENGAGING IN SHORT SALES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ -116- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER CORE FIXED-INCOME FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO INVESTMENT IN OTHER INVESTMENT COMPANIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER CORE FIXED-INCOME FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO PLEDGING ASSETS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 296,145 83.5% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 58,666 16.5% -------------------------------------------------------------------------------- Total 354,811 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - CONVERT THE FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,371,079 70.8% -------------------------------------------------------------------------------- Against 121,191 1.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,096,418 27.6% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO BORROWING MONEY # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,374,986 70.8% -------------------------------------------------------------------------------- Against 118,978 1.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,094,724 27.6% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO UNDERWRITING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,386,077 71.0% -------------------------------------------------------------------------------- Against 104,736 1.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,097,875 27.6% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO LENDING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,376,123 70.8% -------------------------------------------------------------------------------- Against 113,515 1.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,099,050 27.7% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ -117- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER HEALTH SCIENCES FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO ISSUING SENIOR SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,381,797 70.9% -------------------------------------------------------------------------------- Against 113,826 1.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,093,065 27.6% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO REAL ESTATE # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,382,066 70.9% -------------------------------------------------------------------------------- Against 107,614 1.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,099,008 27.7% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO COMMODITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,375,954 70.8% -------------------------------------------------------------------------------- Against 114,012 1.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,098,722 27.7% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO CONCENTRATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,377,901 70.9% -------------------------------------------------------------------------------- Against 112,891 1.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,097,896 27.6% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REVISE THE FUNDAMENTAL POLICIES RELATING TO DIVERSIFICATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,385,483 71.0% -------------------------------------------------------------------------------- Against 111,438 1.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,091,767 27.5% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO THE PURCHASE OF ILLIQUID SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,367,377 70.7% -------------------------------------------------------------------------------- Against 119,629 1.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,101,682 27.7% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ -118- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER HEALTH SCIENCES FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO BOTH PURCHASING SECURITIES ON MARGIN AND ENGAGING IN SHORT SALES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,360,234 70.6% -------------------------------------------------------------------------------- Against 128,126 1.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,100,328 27.7% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO INVESTMENT IN OTHER INVESTMENT COMPANIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,367,593 70.7% -------------------------------------------------------------------------------- Against 119,976 1.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,101,119 27.7% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER HEALTH SCIENCES FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO PLEDGING ASSETS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,360,386 70.6% -------------------------------------------------------------------------------- Against 125,189 1.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,103,113 27.7% -------------------------------------------------------------------------------- Total 7,588,688 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - CONVERT THE FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 17,943,400 61.3% -------------------------------------------------------------------------------- Against 7,370,936 25.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,966,017 13.5% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO BORROWING MONEY # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 17,919,051 61.2% -------------------------------------------------------------------------------- Against 7,381,227 25.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,980,075 13.6% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO UNDERWRITING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 18,049,223 61.6% -------------------------------------------------------------------------------- Against 7,252,021 24.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,979,109 13.6% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ -119- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO LENDING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 17,926,478 61.2% -------------------------------------------------------------------------------- Against 7,375,418 25.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,978,457 13.6% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO ISSUING SENIOR SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 17,987,010 61.4% -------------------------------------------------------------------------------- Against 7,336,309 25.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,957,034 13.5% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO REAL ESTATE # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 18,037,160 61.6% -------------------------------------------------------------------------------- Against 7,287,956 24.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,955,237 13.5% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO COMMODITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 18,064,382 61.7% -------------------------------------------------------------------------------- Against 7,275,632 24.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,940,339 13.5% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO CONCENTRATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 18,041,205 61.6% -------------------------------------------------------------------------------- Against 7,233,850 24.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 4,005,298 13.7% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICIES RELATING TO DIVERSIFICATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 18,145,054 62.0% -------------------------------------------------------------------------------- Against 7,193,350 24.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,941,949 13.4% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ -120- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO THE PURCHASE OF ILLIQUID SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 17,861,761 61.0% -------------------------------------------------------------------------------- Against 7,397,677 25.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 4,020,915 13.7% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO BOTH PURCHASING SECURITIES ON MARGIN AND ENGAGING IN SHORT SALES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 17,825,114 60.9% -------------------------------------------------------------------------------- Against 7,440,441 25.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 4,014,798 13.7% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO INVESTMENT IN OTHER INVESTMENT COMPANIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 17,949,698 61.3% -------------------------------------------------------------------------------- Against 7,336,313 25.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,994,342 13.7% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO PLEDGING ASSETS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 17,823,014 60.9% -------------------------------------------------------------------------------- Against 7,429,689 25.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 4,027,650 13.7% -------------------------------------------------------------------------------- Total 29,280,353 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - CONVERT THE FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 29,171,868 67.6% -------------------------------------------------------------------------------- Against 4,144,020 9.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 9,809,179 22.8% -------------------------------------------------------------------------------- Total 43,125,067 100.0% ================================================================================ -121- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO BORROWING MONEY # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 28,916,675 67.1% -------------------------------------------------------------------------------- Against 4,332,199 10.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 9,876,193 22.9% -------------------------------------------------------------------------------- Total 43,125,067 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO UNDERWRITING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 29,308,143 68.0% -------------------------------------------------------------------------------- Against 3,964,298 9.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 9,852,626 22.8% -------------------------------------------------------------------------------- Total 43,125,067 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO LENDING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 29,040,505 67.3% -------------------------------------------------------------------------------- Against 4,219,816 9.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 9,864,746 22.9% -------------------------------------------------------------------------------- Total 43,125,067 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO ISSUING SENIOR SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 29,168,311 67.6% -------------------------------------------------------------------------------- Against 4,127,951 9.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 9,828,805 22.8% -------------------------------------------------------------------------------- Total 43,125,067 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO REAL ESTATE # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 31,004,959 71.4% -------------------------------------------------------------------------------- Against 4,270,882 9.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 8,129,015 18.7% -------------------------------------------------------------------------------- Total 43,404,856 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO COMMODITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 30,946,640 71.3% -------------------------------------------------------------------------------- Against 4,300,788 9.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 8,157,428 18.8% -------------------------------------------------------------------------------- Total 43,404,856 100.0% ================================================================================ -122- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO CONCENTRATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 31,041,328 71.5% -------------------------------------------------------------------------------- Against 4,072,299 9.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 8,291,229 19.1% -------------------------------------------------------------------------------- Total 43,404,856 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICIES RELATING TO DIVERSIFICATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 31,290,555 72.0% -------------------------------------------------------------------------------- Against 3,972,120 9.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 8,142,181 18.8% -------------------------------------------------------------------------------- Total 43,404,856 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO THE PURCHASE OF ILLIQUID SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 30,653,322 70.6% -------------------------------------------------------------------------------- Against 4,467,208 10.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 8,284,326 19.1% -------------------------------------------------------------------------------- Total 43,404,856 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO BOTH PURCHASING SECURITIES ON MARGIN AND ENGAGING IN SHORT SALES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 30,568,379 70.4% -------------------------------------------------------------------------------- Against 4,582,269 10.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 8,254,208 19.0% -------------------------------------------------------------------------------- Total 43,404,856 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO INVESTMENT IN OTHER INVESTMENT COMPANIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 30,943,667 71.3% -------------------------------------------------------------------------------- Against 4,259,501 9.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 8,201,688 18.9% -------------------------------------------------------------------------------- Total 43,404,856 100.0% ================================================================================ -123- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER MIDCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO PLEDGING ASSETS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 30,524,275 70.3% -------------------------------------------------------------------------------- Against 4,563,305 10.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 8,317,276 19.2% -------------------------------------------------------------------------------- Total 43,404,856 100.0% ================================================================================ ALGER MONEY MARKET FUND - CONVERT THE FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,918,289 75.3% -------------------------------------------------------------------------------- Against 998,727 3.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,497,786 21.4% -------------------------------------------------------------------------------- Total 30.414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO BORROWING MONEY # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 23,016,795 75.7% -------------------------------------------------------------------------------- Against 886,216 2.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,511,791 21.4% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO UNDERWRITING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 23,100,668 76.0% -------------------------------------------------------------------------------- Against 769,258 2.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,544,876 21.5% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO LENDING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 23,093,185 76.0% -------------------------------------------------------------------------------- Against 774,884 2.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,546,733 21.5% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO ISSUING SENIOR SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,997,731 75.6% -------------------------------------------------------------------------------- Against 869,678 2.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,547,393 21.5% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ -124- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER MONEY MARKET FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO REAL ESTATE # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,991,595 75.6% -------------------------------------------------------------------------------- Against 855,749 2.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,567,458 21.6% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO COMMODITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,886,019 75.3% -------------------------------------------------------------------------------- Against 984,892 3.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,543,891 21.5% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO CONCENTRATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 23,116,726 76.0% -------------------------------------------------------------------------------- Against 774,885 2.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,523,191 21.4% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REVISE THE FUNDAMENTAL POLICIES RELATING TO DIVERSIFICATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 23,145,580 76.1% -------------------------------------------------------------------------------- Against 671,243 2.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,597.979 21.7% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO THE PURCHASE OF ILLIQUID SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,920,045 75.4% -------------------------------------------------------------------------------- Against 960,802 3.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,533,955 21.5% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO BOTH PURCHASING SECURITIES ON MARGIN AND ENGAGING IN SHORT SALES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,868,423 75.2% -------------------------------------------------------------------------------- Against 992,882 3.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,553,497 21.5% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ -125- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER MONEY MARKET FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO INVESTMENT IN OTHER INVESTMENT COMPANIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 23,062,430 75.8% -------------------------------------------------------------------------------- Against 852,594 2.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,499,778 21.4% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER MONEY MARKET FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO PLEDGING ASSETS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,968,424 75.5% -------------------------------------------------------------------------------- Against 907,065 3.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 6,539,313 21.5% -------------------------------------------------------------------------------- Total 30,414,802 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - CONVERT THE FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,002,125 70.4% -------------------------------------------------------------------------------- Against 81,767 2.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 760,230 26.7% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO BORROWING MONEY # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,024,852 71.2% -------------------------------------------------------------------------------- Against 58,311 2.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 760,959 26.8% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO UNDERWRITING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,026,456 71.2% -------------------------------------------------------------------------------- Against 58,901 2.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 758,765 26.7% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ -126- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER SMALLCAP AND MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO LENDING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,023,952 71.2% -------------------------------------------------------------------------------- Against 59,655 2.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 760,515 26.7% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO ISSUING SENIOR SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,029,054 71.3% -------------------------------------------------------------------------------- Against 58,473 2.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 756,595 26.6% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO REAL ESTATE # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,031,033 71.4% -------------------------------------------------------------------------------- Against 57,728 2.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 755,361 26.6% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO COMMODITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,053,467 72.2% -------------------------------------------------------------------------------- Against 34,048 1.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 756,607 26.6% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO CONCENTRATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,028,041 71.3% -------------------------------------------------------------------------------- Against 58,071 2.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 758,010 26.7% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ -127- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER SMALLCAP AND MIDCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICIES RELATING TO DIVERSIFICATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,056,546 72.3% -------------------------------------------------------------------------------- Against 29,967 1.1% -------------------------------------------------------------------------------- Abstain/Broker No Votes 757,609 26.6% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO THE PURCHASE OF ILLIQUID SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,017,697 71.0% -------------------------------------------------------------------------------- Against 38,248 1.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 788,177 27.7% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO BOTH PURCHASING SECURITIES ON MARGIN AND ENGAGING IN SHORT SALES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,010,591 70.7% -------------------------------------------------------------------------------- Against 68,616 2.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 764,915 26.9% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO INVESTMENT IN OTHER INVESTMENT COMPANIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,019,557 71.0% -------------------------------------------------------------------------------- Against 38,408 1.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 786,157 27.6% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO PLEDGING ASSETS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 2,014,713 70.9% -------------------------------------------------------------------------------- Against 66,442 2.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 762,967 26.8% -------------------------------------------------------------------------------- Total 2,844,122 100.0% ================================================================================ -128- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND - CONVERT THE FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,032,575 73.7% -------------------------------------------------------------------------------- Against 2,263,612 7.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,584,732 18.7% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO BORROWING MONEY # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 21,956,408 73.5% -------------------------------------------------------------------------------- Against 2,265,643 7.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,658,868 18.9% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO UNDERWRITING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,068,465 73.9% -------------------------------------------------------------------------------- Against 2,168,636 7.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,643,818 18.9% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO LENDING # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 21,876,843 73.2% -------------------------------------------------------------------------------- Against 2,239,266 7.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,764,810 19.3% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO ISSUING SENIOR SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 21,974,640 73.6% -------------------------------------------------------------------------------- Against 2,250,572 7.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,655,707 18.9% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO REAL ESTATE # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 21,930,949 73.4% -------------------------------------------------------------------------------- Against 2,275,707 7.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,674,263 19.0% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ -129- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO COMMODITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,056,121 73.8% -------------------------------------------------------------------------------- Against 2,249,876 7.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,574,922 18.7% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICY RELATING TO CONCENTRATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,004,961 73.6% -------------------------------------------------------------------------------- Against 2,214,940 7.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,661,018 19.0% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REVISE THE FUNDAMENTAL POLICIES RELATING TO DIVERSIFICATION # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 22,242,238 74.5% -------------------------------------------------------------------------------- Against 2,075,649 6.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,563,032 18.6% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO THE PURCHASE OF ILLIQUID SECURITIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 21,712,363 72.7% -------------------------------------------------------------------------------- Against 2,435,925 8.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,732,631 19.1% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO BOTH PURCHASING SECURITIES ON MARGIN AND ENGAGING IN SHORT SALES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 21,694,612 72.6% -------------------------------------------------------------------------------- Against 2,476,141 8.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,710,166 19.1% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO INVESTMENT IN OTHER INVESTMENT COMPANIES # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 21,863,371 73.2% -------------------------------------------------------------------------------- Against 2,368,906 7.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,648,642 18.9% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ -130- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER SMALLCAP GROWTH FUND - REMOVE THE FUNDAMENTAL POLICY RELATING TO PLEDGING ASSETS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 21,653,768 72.5% -------------------------------------------------------------------------------- Against 2,462,088 8.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 5,765,063 19.3% -------------------------------------------------------------------------------- Total 29,880,919 100.0% ================================================================================ PROPOSAL 4 - TO APPROVE DISTRIBUTION PLANS UNDER RULE 12b-1. ALGER BALANCED FUND, CLASS A # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 1,002,576 84.8% -------------------------------------------------------------------------------- Against 7,832 0.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 171,994 14.5% -------------------------------------------------------------------------------- Total 1,182,402 100.0% ================================================================================ ALGER BALANCED FUND, CLASS B # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 1,518,283 68.8% -------------------------------------------------------------------------------- Against 43,614 2.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 645,455 29.2% -------------------------------------------------------------------------------- Total 2,207,352 100.0% ================================================================================ ALGER BALANCED FUND, CLASS C # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 484,228 61.8% -------------------------------------------------------------------------------- Against 21,604 2.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 277,531 35.4% -------------------------------------------------------------------------------- Total 783,363 100.0% ================================================================================ ALGER CAPITAL APPRECIATION, CLASS A # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 5,740,645 68.8% -------------------------------------------------------------------------------- Against 266,121 3.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,343,753 28.0% -------------------------------------------------------------------------------- Total 8,350,519 100.0% ================================================================================ ALGER CAPITAL APPRECIATION, CLASS B # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 7,279,791 67.9% -------------------------------------------------------------------------------- Against 401,380 3.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,044,341 28.4% -------------------------------------------------------------------------------- Total 10,725,512 100.0% ================================================================================ -131- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER CAPITAL APPRECIATION, CLASS C # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 1,435,492 69.6% -------------------------------------------------------------------------------- Against 53,864 2.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 574,541 27.8% -------------------------------------------------------------------------------- Total 2,063,897 100.0% ================================================================================ ALGER CORE FIXED-INCOME, CLASS A # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 247,726 85.9% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 40,787 14.1% -------------------------------------------------------------------------------- Total 288,513 100.0% ================================================================================ ALGER CORE FIXED-INCOME, CLASS B # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 24,146 89.6% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 2,798 10.4% -------------------------------------------------------------------------------- Total 26,944 100.0% ================================================================================ ALGER CORE FIXED-INCOME, CLASS C # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 24,273 61.7% -------------------------------------------------------------------------------- Against 0 0.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 15,081 38.3% -------------------------------------------------------------------------------- Total 39,354 100.0% ================================================================================ ALGER HEALTH SCIENCES, CLASS A # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 3,489,215 66.1% -------------------------------------------------------------------------------- Against 55,011 1.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,737,126 32.9% -------------------------------------------------------------------------------- Total 5,281,352 100.0% ================================================================================ ALGER HEALTH SCIENCES, CLASS B # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 678,098 70.0% -------------------------------------------------------------------------------- Against 16,555 1.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 273,467 28.3% -------------------------------------------------------------------------------- Total 968,120 100.0% ================================================================================ ALGER HEALTH SCIENCES, CLASS C # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 1,171,730 63.6% -------------------------------------------------------------------------------- Against 55,837 3.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 616,886 33.4% -------------------------------------------------------------------------------- Total 1,844,453 100.0% ================================================================================ -132- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER LARGECAP GROWTH FUND, CLASS A # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 7,329,235 78.7% -------------------------------------------------------------------------------- Against 214,251 2.3% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,773,555 19.0% -------------------------------------------------------------------------------- Total 9,317,041 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND, CLASS B # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 11,545,567 76.4% -------------------------------------------------------------------------------- Against 176,202 1.2% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,387,448 22.4% -------------------------------------------------------------------------------- Total 15,109,217 100.0% ================================================================================ ALGER LARGECAP GROWTH FUND, CLASS C # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 1,614,213 68.7% -------------------------------------------------------------------------------- Against 42,964 1.9% -------------------------------------------------------------------------------- Abstain/Broker No Votes 690,805 29.4% -------------------------------------------------------------------------------- Total 2,347,982 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND, CLASS A # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 16,191,742 76.0% -------------------------------------------------------------------------------- Against 378,794 1.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 4,722,474 22.2% -------------------------------------------------------------------------------- Total 21,293,010 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND, CLASS B # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 12,899,107 74.8% -------------------------------------------------------------------------------- Against 512,543 3.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 3,826,708 22.2% -------------------------------------------------------------------------------- Total 17,238,358 100.0% ================================================================================ ALGER MIDCAP GROWTH FUND, CLASS C # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 3,286,750 68.6% -------------------------------------------------------------------------------- Against 134,515 2.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,367,585 28.6% -------------------------------------------------------------------------------- Total 4,788,850 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND, CLASS A # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 1,363,454 68.8% -------------------------------------------------------------------------------- Against 9,854 0.5% -------------------------------------------------------------------------------- Abstain/Broker No Votes 607,261 30.7% -------------------------------------------------------------------------------- Total 1,980,569 100.0% ================================================================================ -133- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ALGER SMALLCAP AND MIDCAP GROWTH FUND, CLASS B # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 275,580 63.0% -------------------------------------------------------------------------------- Against 16,397 3.7% -------------------------------------------------------------------------------- Abstain/Broker No Votes 145,806 33.3% -------------------------------------------------------------------------------- Total 437,783 100.0% ================================================================================ ALGER SMALLCAP AND MIDCAP GROWTH FUND, CLASS C # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 376,562 67.8% -------------------------------------------------------------------------------- Against 14,310 2.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 164,217 29.6% -------------------------------------------------------------------------------- Total 555,089 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND, CLASS A # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 16,549,694 77.9% -------------------------------------------------------------------------------- Against 598,914 2.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 4,101,922 19.3% -------------------------------------------------------------------------------- Total 21,250,530 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND, CLASS B # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 4,604,831 78.4% -------------------------------------------------------------------------------- Against 107,693 1.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 1,164,226 19.8% -------------------------------------------------------------------------------- Total 5,876,750 100.0% ================================================================================ ALGER SMALLCAP GROWTH FUND, CLASS C # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 1,137,511 67.8% -------------------------------------------------------------------------------- Against 22,908 1.4% -------------------------------------------------------------------------------- Abstain/Broker No Votes 518,246 30.8% -------------------------------------------------------------------------------- Total 1,678,665 100.0% ================================================================================ PROPOSAL 5 - TO APPROVE AMENDMENTS TO THE TRUST'S AGREEMENT AND DECLARATION OF TRUST ELIMINATE THE REQUIREMENT THAT SHAREHOLDERS APPROVE THE LIQUIDATION OF A FUND OR A CLASS OF SHARES OF A FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 136,733,691 72.7% -------------------------------------------------------------------------------- Against 19,930,868 10.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 31,466,803 16.7% -------------------------------------------------------------------------------- Total 188,131,362 100.0% ================================================================================ -134- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- ELIMINATE THE REQUIREMENT THAT SHAREHOLDERS APPROVE THE TERMINATION OF THE TRUST # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 136,062,148 72.3% -------------------------------------------------------------------------------- Against 20,675,308 11.0% -------------------------------------------------------------------------------- Abstain/Broker No Votes 31,393,906 16.7% -------------------------------------------------------------------------------- Total 188,131,362 100.0% ================================================================================ ELIMINATE (SUBJECT TO A QUALIFICATION) THE REQUIREMENT THAT SHAREHOLDERS APPROVE THE REORGANIZATION OF THE TRUST OR A FUND # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 136,358,667 72.5% -------------------------------------------------------------------------------- Against 20,298,277 10.8% -------------------------------------------------------------------------------- Abstain/Broker No Votes 31,474,418 16.7% -------------------------------------------------------------------------------- Total 188,131,362 100.0% ================================================================================ ADD A DEMAND REQUIREMENT FOR SHAREHOLDER DERIVATIVE SUITS # OF VOTES % OF VOTES -------------------------------------------------------------------------------- For 137,609,289 73.1% -------------------------------------------------------------------------------- Against 18,106,168 9.6% -------------------------------------------------------------------------------- Abstain/Broker No Votes 32,415,904 17.3% -------------------------------------------------------------------------------- Total 188,131,361 100.0% ================================================================================ -135- -------------------------------------------------------------------------------- THE ALGER FUNDS ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- PROXY VOTING POLICIES -------------------------------------------------------------------------------- A description of the policies and procedures the Trust uses to determine how to vote proxies relating to portfolio securities and the proxy voting record is available, without charge, by calling (800) 992-3863 or online on the Funds' website at http://www.alger.com or on the SEC's website at http://www.sec.gov. QUARTERLY FUND HOLDINGS -------------------------------------------------------------------------------- The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarter of each fiscal year on Form N-Q. Forms N-Q are available online on the Funds' website at http://www.alger.com or on the SEC's website at http://www.sec.gov. The Funds' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. A copy of the most recent quarterly holdings may also be obtained from the Funds by calling (800) 992-3863. -136- THE ALGER FUNDS -------------------------------------------------------------------------------- 111 Fifth Avenue New York, NY 10003 (800) 992-3863 www.alger.com INVESTMENT MANAGER -------------------------------------------------------------------------------- Fred Alger Management, Inc. 111 Fifth Avenue New York, NY 10003 DISTRIBUTOR -------------------------------------------------------------------------------- Fred Alger & Company, Incorporated 111 Fifth Avenue New York, NY 10003 TRANSFER AGENT AND DIVIDEND DISBURSING AGENT -------------------------------------------------------------------------------- Boston Financial Data Services, Inc. P.O. Box 8480 Boston, MA 02266 This report is submitted for the general information of the shareholders of The Alger Funds. It is not authorized for distribution to prospective investors unless accompanied by an effective Prospectus for the Funds, which contains information concerning the Trust's investment policies, fees and expenses as well as other pertinent information. GO PAPERLESS WITH ALGER ELECTRONIC DELIVERY SERVICE Alger is pleased to provide you with the ability to access regulatory materials online. When documents such as prospectuses and annual and semi-annual reports are available, we'll send you an e-mail notification with a convenient link that will take you directly to the fund information on our website. To sign up for this free service, simply enroll at WWW.ICSDELIVERY.COM/ALGER. [LOGO] ALGER ASAR 043007 [LOGO] Printed on recycled paper [SOY INK(TM) LOGO] [LOGO] ALGER ASAR 043007 [LOGO] Printed on recycled paper [SOY INK(TM) LOGO] ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this document. (b) No changes in the registrant's internal control over financial reporting occurred during the registrant's second fiscal quarter of the period covered by this report that materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Not applicable (a) (2) Certifications of principal executive officer and principal financial officer as required by rule 30a-2(a) under the Investment Company Act of 1940 are attached as Exhibit 99.CERT (a) (3) Not applicable (b) Certifications of principal executive officer and principal financial officer as required by rule 30a-2(b) under the Investment Company Act of 1940 are attached as Exhibit 99.906CERT SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. The Alger Funds By: /s/Dan C. Chung Dan C. Chung President Date: June 18, 2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/Dan C. Chung Dan C. Chung President Date: June 18, 2007 By: /s/Michael D. Martins Michael D. Martins Treasurer Date: June 18, 2007