N-CSR 1 ef20017111_ncsr.htm N-CSR
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   811-01743
 
The Alger Funds II
(Exact name of registrant as specified in charter)
 
100 Pearl Street, New York, New York 10004
(Address of principal executive offices)          (Zip code)
 
Mr. Hal Liebes

Fred Alger Management, LLC
 
100 Pearl Street

New York, New York 10004
(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: October 31, 2023
 
Form N-CSR is to be used by management investment companies to file reports with the Commission, not later than 10 days after the transmission to Stockholders of any report to be transmitted to Stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e1).  The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public.  A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number.  Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090.  The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

ITEM 1.
REPORTS TO STOCKHOLDERS.
 

Table of Contents

 

 

The Alger Funds II

 

 

Shareholders’ Letter (Unaudited) 1
Fund Highlights (Unaudited) 13
Portfolio Summary (Unaudited) 21
Schedules of Investments 22
Statements of Assets and Liabilities 44
Statements of Operations 48
Statements of Changes in Net Assets 51
Financial Highlights 55
Notes to Financial Statements 71
Report of Independent Registered Public Accounting Firm 99
Additional Information (Unaudited) 101
Shareholders’ Letter (Unaudited) October 31, 2023
 

 

Dear Shareholders,

 

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” – Albert Einstein

 

This principle resonates deeply with us at Alger, where we embrace the power of compound growth in corporate fundamentals, such as sales, earnings, and cash flow, as a cornerstone of long-term wealth creation. Our investment approach focuses on identifying companies with strong potential for sustained earnings growth over the long-term, avoiding those that we believe are “short duration” companies, or businesses with high current earnings and low potential for future long-term growth. In most instances, short duration companies, in our view, return most of their profits to shareholders because of a lack of compelling reinvestment opportunities. By investing in companies that we believe will gain market share and compound their earnings growth, we aim to position our portfolios to be resilient across varying economic conditions, thereby maximizing long-term value for our shareholders.

 

Reflecting on the fiscal year ended October 31, 2023, the narrative of the market was one of resilience and recovery. Following a turbulent 2022, where higher interest rates in response to elevated inflation reduced equity valuations, investor sentiment turned positive in 2023, driven by easing inflation, stabilizing corporate earnings, and the increasing likelihood of a soft-landing (i.e., an economic slowdown without a recession). Further, a surge of enthusiasm around Artificial Intelligence (AI) contributed to outsized returns for certain of the largest companies within the Information Technology and Communication Services sectors. Not all sectors shared in this rally, as the Energy and Health Care sectors underperformed the S&P 500 Index. While there were bumps along the way, from a regional banking crisis in March 2023 to a steady rise in interest rates, the S&P 500 Index finished up 10.14% during the fiscal twelve-month period ended October 31, 2023.

 

In the final two months of 2022, optimism grew as core Consumer Price Index (“CPI”) readings for November and December came in below expectations, suggesting the peak of the Federal Reserve’s (the “Fed”) tightening cycle. However, persistent wage inflation and an inverted yield curve raised concerns about potential policy errors and an impending economic downturn. In December, Fed Chairman Jerome Powell affirmed a “higher-for-longer” stance for interest rates and forecasted a terminal rate above 5.0%, casting doubts on the stock market’s recovery.

 

As we moved into 2023, however, the first quarter saw a reversal in the bearish sentiment that had marked much of the previous year. In February, the Fed slowed down its rate hikes to 25 basis points, a reduction from December’s 50 basis point hike. In March, concerns around bank funding and liquidity emerged following the collapse of two regional banks, leading to significant deposit outflows at the regional level. The Fed, U.S. Treasury, and Federal Deposit Insurance Corporation (FDIC) took steps to alleviate these market concerns, including announcing an emergency liquidity program, guaranteeing uninsured deposits, and allowing some bank mergers and acquisitions.

 

Transitioning into the second quarter, U.S. economic data released in June reinforced the soft-landing-narrative with signs of (1) disinflation, as evidenced by the May CPI report coming in softer than expected with headline CPI posting the lowest annual increase in more than two years, (2) resilient labor markets, as May payrolls beat estimates for a 14th straight month, and (3) a stronger housing market, with builder confidence at the highest in nearly a year, housing starts at the highest in over a year, and multi-unit starts at the highest in nearly four decades.

- 1 -

Despite the strong first half rally in 2023, U.S. equities fell during the third quarter. While investors initially embraced a continuation of prevailing narratives around AI and expectations of a soft-landing lifting equity markets in July, mounting concerns surrounding aggressive Fed policy and a sharp rise in interest rates led to declining equity prices in August and September. Moreover, the resumption of student loan payments, diminished savings from the pandemic, and higher energy prices reignited worries that a decline in U.S. consumer spending could lead to the possibility of an upcoming recession. Rising interest rates were seen as one of the largest headwinds to risk assets during the third quarter, where the yield of the U.S. 10-year note increased by 76 basis points to 4.57% and the yield on the two-year note increased nearly 20 basis points to 5.04%. While the rate of inflation decelerated meaningfully over the past year, the monthly CPI readings for July and August rose 0.2% and 0.6%, respectively. That said, the rise in interest rates was driven more by the term premium (i.e., the additional yield that investors demand for lending money for longer periods of time) and less so on rising inflation expectations during the third quarter.

 

On the monetary policy front, after a 25 basis point rate hike in July that met expectations, the Fed held rates steady at its September meeting, bringing the Federal Funds rate to 5.25-5.50%. In October, U.S. equities fell in large part due to rising interest rates, with the yield of the U.S. 10-year note increasing by approximately 30 basis points to 4.88%. Higher bond yields were driven by several factors, such as an increase in U.S. Treasury issuance and a reinforced stance on a higher-for-longer Fed policy, bolstered by a robust September retail sales report and better-than-expected U.S. GDP data for the third quarter. Further, the average 30-year fixed mortgage rate reached new multi decade highs of 8.06%, as of October 31, 2023, helping drive mortgage demand from homebuyers to the lowest level since 1995.

 

Among non-U.S. equities, developed markets saw strong performance during the fiscal twelve-month period ended October 31, 2023. Notable strength was driven by Europe avoiding an energy crisis due to a mild winter, and Japan’s economy being bolstered by well-received corporate reforms to improve governance. As such, the MSCI ACWI ex-USA Index rose 12.66% during the fiscal twelve-month period ended October 31, 2023, with the Financials and Consumer Discretionary sectors showing strong results, while the Real Estate and Utilities sectors saw weaker performance. Within Emerging Markets, encouraging market sentiment stemmed from Chinese officials abandoning their ‘Zero-Covid’ policy in late 2022, indicating an earlier-than-expected re-opening of the economy. While renewed concerns about China’s property sector and weaker-than-expected economic recovery data curtailed investor enthusiasm in the first half of 2023, better-than-feared third quarter GDP data emerged in October. As such, the MSCI Emerging Markets Index was up 11.26% during the fiscal twelve-month period ended October 31, 2023. Strong performance within the Consumer Discretionary and Information Technology sectors was partially offset by relative weakness in the Materials and Utilities sectors.

- 2 -

Going Forward 

We continue to believe that an unprecedented level of innovation is creating compelling investment opportunities – corporations are digitizing their operations, cloud computing growth continues to support future innovation, and artificial intelligence, which is at an inflection point in our view, potentially enabling significant increases in productivity. In the Health Care sector, we believe that advances in surgical technologies and innovations within biotechnology offer attractive opportunities ahead. As such, we intend to continue to focus on conducting in-depth fundamental research as we seek leaders of innovation rather than taking short-term bets on market sentiment. We believe this strategy embodies Albert Einstein’s wisdom, harnessing the powerful force of compound interest to help our shareholders achieve their long-term investment goals.

 

Portfolio Matters 

Alger Spectra Fund 

The Alger Spectra Fund returned 14.56% for the fiscal twelve-month period ended October 31, 2023, compared to the 17.32% return of the Russell 3000 Growth Index. During the reporting period, the largest sector weightings were Information Technology and Consumer Discretionary. The largest sector overweight was Energy and the largest sector underweight was Consumer Staples.

 

Contributors to Performance 

The Industrials and Consumer Discretionary sectors provided the largest contributions to relative performance. Regarding individual positions, NVIDIA Corp.; Microsoft Corp.; Amazon.com, Inc.; TransDigm Group Inc.; and Prometheus Biosciences, Inc. were among the top contributors to absolute performance.

 

Microsoft is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of GDP to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). While the company reported operating results that met consensus estimates, its investment in OpenAI’s ChatGPT captured the attention of investors, contributing to positive performance. Throughout the period, Microsoft surprised investors with continual rollouts of new AI capabilities across the company’s portfolio (e.g., Bing, GitHub, Teams, Office 365). Moreover, the company witnessed significant growth in its Intelligent Cloud segment, as Azure continues to expand its market share. Despite the encouraging results throughout the period, demand challenges stemming from companies looking to optimize their cloud spending led to a deceleration in cloud growth during their fiscal fourth quarter, compared to the previous quarter. Acknowledging that cloud optimization may curb the company’s growth in the short term, we remain confident about the company’s prospects going forward, particularly in the realm of AI adoption. Further, CEO Satya Nadella has recently indicated that substantial revenue contributions from AI could begin to materialize around the first half of 2024.

- 3 -

Short exposure to a Central and Eastern European software service delivery platform contributed to performance. While we believe this is a well-run company, we established the short exposure based on our belief that the company’s top 10 customers will face challenges in their core businesses, leading to a reduction in technology spending. During the period, the company reported decent operating results, where revenues were in-line with analyst estimates but recorded better-than-expected profits. However, shares fell after management gave weaker-than-expected revenue and earnings guidance for fiscal 2023. The company noted that revenue growth will be negatively impacted due to pockets of moderation around its retail and consumer segment, as businesses remain cautious of slowing demand given the challenging macroeconomic backdrop. As the company’s share price declined, the short exposure contributed to performance.

 

Detractors from Performance 

The Health Care and Materials sectors were the largest detractors from relative performance. Regarding individual positions, Tesla, Inc; Albemarle Corp.; TransMedics Group, Inc.; Live Nation Entertainment, Inc.; and Pioneer Natural Resources Co. were among the top detractors from absolute performance.

 

Tesla is an electric vehicle manufacturer with a significant technological lead in its large and rapidly growing addressable market. Shares detracted from results during the period as the company confronted transportation capacity issues that caused deliveries to fall short of estimates, as well as developing demand softness. However, Tesla addressed the weakened domestic consumer demand by cutting prices throughout the period by discounting the Models 3 and Y as well as introducing supercharging credits.

 

Short exposure to a supplier of wafer fabrication equipment and services for semiconductor manufacturing detracted from performance. We established a short position based on our belief that the company’s top customers may cut capital expenditures in 2023, as demand for most end-markets could continue to weaken. However, the company reported better-than-expected results, driven by strong company execution in the context of an improving supply-chain environment.

 

Alger Dynamic Opportunities Fund 

The Alger Dynamic Opportunities Fund returned -5.44% for the fiscal twelve-month period ended October 31, 2023, compared to the 10.14% return of the S&P 500 Index and the 4.87% return of the HFRI Equity Hedge (Total) Index. During the reporting period, the average allocation to long positions was 84.03% and the average allocation to short positions was -36.25%. The fund’s average cash allocation, which includes short sale proceeds, was 52.22%.

 

Based on the net exposure of long and short positions, the Information Technology and Health Care sectors were the largest sector weightings for the reporting period. Industrials was the largest sector overweight and the Information Technology sector was the largest underweight. Long positions, in aggregate, detracted from absolute and relative performance while short positions contributed to absolute performance but detracted from relative performance.

 

Contributors to Performance 

Based on the net exposure of long and short positions, the Consumer Staples and Utilities sectors provided the largest contributions to relative performance. Regarding individual positions, TransDigm Group Inc.; NVIDIA Corp.; Reata Pharmaceuticals, Inc.; Microsoft Corp.; and Amazon.com were among the top contributors to absolute performance. TransDigm specializes in the production of engineered aerospace components, systems and subsystems. Its core Power and Control segment includes operations that primarily develop, produce and market systems and components that provide power to or control power of aircrafts utilizing electronic, fluid, power and mechanical motion control technologies. Shares contributed to performance during the period, as the company has reported solid operating results, driven by strength in all three of their major market channels – commercial original equipment manufacturing, commercial aftermarket, and defense. Moreover, strong order bookings have been aided by China’s easing COVID-19 mobility restrictions, which has increased air travel. Given the robust order bookings and favorable trends in the commercial aerospace market recovery, management raised their fiscal full year earnings guidance.

- 4 -

Short exposure to a consumer genetics and research company contributed to performance. The company engages in assisting people to access, understand, and benefit from the human genome. While the company appears to be shifting its core direct-to-consumer genetic testing business away from growth and toward profitability, the company still has a long way to reaching net profitability, in our view. During the period, the company reported operating results that were slightly above analyst estimates. However, management lowered their full fiscal year revenue guidance and reported a greater-than-expected net loss in profitability. As a result, our short position contributed to performance given the decline in share price.

 

Detractors from Performance 

Based on the net exposure of short and long positions, the Information Technology and Health Care sectors were the largest detractors from relative performance. Regarding long positions, Signature Bank; Montrose Environmental Group Inc; Chegg, Inc.; Nevro Corp.; and Morphic Holding, Inc. were among the top detractors from absolute performance.

 

Montrose Environmental Group offers various environmental services to a diverse client base, primarily in the United States. The company has expertise in a wide variety of areas, including environmental assessment and permitting, measurement and analysis, and remediation and reuse. During the period, shares detracted from performance as the company reported slightly weaker than expected results, where revenues came in below consensus estimates. Moreover, management lowered their full-year margin expansion trajectory due to additional investments needed in the near-term in order to strengthen organic growth. Disappointed investors contributed to the share selloff, despite analysts’ expectations of strong margin expansion in 2023. Despite the near-term setback, we believe the company fundamentals remain intact as they remain a key beneficiary of remediation work on polyfluoroalkyl substances (PFAS) compounds, environmental regulations and U.S. infrastructure spending.

 

Short exposure to a transportation company developing electric, vertical take-off and landing (eVTOL) aircraft detracted from performance. While the company intends to operate as a commercial air taxi service beginning in 2025, we established the short exposure on the belief that Federal Aviation Administration certification and subsequent commercial adoption would encounter multiple obstacles, delaying the early 2025 rollout. During the period, the company’s share price rose due to a combination of several new developments, including a contract extension by the U.S. Department of Defense, an additional investment by a large existing shareholder, and a positive disclosure announcement on the company’s production prototype aircraft. Specifically, the company disclosed that its prototype aircraft had a payload capacity of 1,000 lbs., which is widely considered the minimum level needed to make an air taxi service economically viable. Given the news, our short position detracted from performance as the company’s share price rose.

- 5 -

Alger Emerging Markets Fund 

The Alger Emerging Markets Fund returned 6.30% for the fiscal twelve-month period ended October 31, 2023, compared to the 11.26% return of the MSCI Emerging Markets Index. During the reporting period, the largest sector weightings were Consumer Discretionary and Information Technology. The largest sector overweight was Consumer Discretionary and the largest sector underweight was Financials.

 

Contributors to Performance 

The Consumer Discretionary and Real Estate sectors provided the largest contributions to relative performance. Regarding individual positions, Jumbo S.A.; New Oriental Education & Technology Group, Inc.; Nu Holdings Ltd.; BYD Company Ltd.; and Kalyan Jewellers India Ltd. were among the top contributors to absolute performance.

 

Nu Holdings Ltd. (NU) is a rapidly growing Brazilian neobank (i.e., a financial technology bank) founded in 2013 initially focusing on customer-friendly credit cards. The company has grown to over 48 million customers and offers a wide variety of financial products like personal loans, checking accounts, and brokerage accounts. We believe NU offers a strong value proposition compared to neobank peers and incumbent players and has ample runway to grow across Latin America (LatAm) due to its exceptionally low customer acquisition costs. During the period, shares contributed to performance after the company reported strong operating results, where revenues and earnings beat analyst estimates. Better-than-expected revenues were driven by higher rates and improved returns on credit cards following fast expansion of their interest earning portfolio. Moreover, client growth remained strong despite high penetration in Brazil, while non-performing-loan (NPL) trends appear to be stabilizing, giving management comfort to accelerate loan origination.

 

Detractors from Performance 

The Communication Services and Health Care sectors were the largest detractors from relative performance. Regarding individual positions, Arezzo Industria e Comercio S.A.; Tencent Holdings Ltd.; Banco BTG Pactual; Angel One Limited; and Hangzhou Tigermed Consulting Co., Ltd. were among the top detractors from absolute performance.

 

Arezzo is Brazil’s largest women’s footwear retailer, specializing in the design, manufacture, development, molding and sale of women’s footwear, bags and accessories. The company’s brand portfolio includes Arezzo, Schutz, Alexandre Birman, Anacapri and Fiever. It distributes footwear through various channels, such as owned and franchised stores, multi-brand stores and e-commerce platforms. During the period, shares detracted from performance where the company reported lower-than-expected earnings. While quarterly revenues were strong, driven by Arezzo’s apparel segment, higher investments and variable compensation expenses led to weaker-than-expected profitability. Despite the near-term cost pressures, we believe company fundamentals remain strong given its resilient local market expansion, boosted by e-commerce and multichannel growth, along with growing demand among more affluent consumers as the market normalizes from the COVID-19 pandemic.

 

Alger Responsible Investing Fund 

The Alger Responsible Investing Fund returned 17.80% for the fiscal twelve-month period ended October 31, 2023, compared to the 18.95% return of the Russell 1000 Growth Index. During the reporting period, the largest sector weightings were Information Technology and Consumer Discretionary. The largest sector overweight was Financials and the largest sector underweight was Communication Services.

- 6 -

Contributors to Performance 

The Information Technology and Real Estate sectors provided the largest contributions to relative performance. Regarding individual positions, Microsoft Corp.; NVIDIA Corp.; Adobe Inc.; Amazon.com, Inc.; and Apple Inc. were among the top contributors to absolute performance.

 

NVIDIA is a leading supplier of graphics processing units for a variety of end markets, such as gaming, PCs, data centers, virtual reality and high-performance computing. The company is leading in most secular growth categories in computing, especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. Simply put, NVIDIA’s computational power is a critical enabler of AI and therefore, in our view, critical to AI adoption. As such, we believe NVIDIA is a long-term high unit volume growth opportunity. During the period, shares contributed to performance as NVIDIA reported solid second quarter results well above analyst expectations, driven by strong demand from data centers. Growing AI data center workloads are driving demand for the increased interconnections and fully accelerated software stacks, thereby enabling leading application performance and fast result times.

 

Detractors from Performance 

The Communication Services and Health Care sectors were the largest detractors from relative performance. Regarding individual positions, Tesla, Inc.; Bristol-Myers Squibb Co.; Agilent Technologies, Inc.; PayPal Holdings, Inc.; and Danaher Corp. were among the top detractors from absolute performance. Shares of Tesla detracted from performance in response to developments identified in the Alger Spectra Fund discussion.

 

I thank you for putting your trust in Alger.

 

Sincerely,

 

 

Daniel C. Chung, CFA 

Chief Executive Officer, Chief Investment Officer 

Fred Alger Management, LLC

 

Investors cannot invest directly in an index. Index performance does not reflect the deduction for fees, expenses, or taxes.

 

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 a fund unless preceded or accompanied by an effective prospectus for the fund. Performance of funds discussed above represents the twelve-month period return of Class A shares prior to the deduction of any sales charges and includes the reinvestment of any dividends or distributions.

 

The performance data quoted in this material represents past performance, which is not an indication or a guarantee of future results.

- 7 -

Standard performance results can be found on the following pages. 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 fund. 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 October 31, 2023. Securities mentioned in the Shareholders’ Letter, if not found in the Schedules of Investments, may have been held by the funds during the fiscal twelve-month period ended October 31, 2023.

 

Risk Disclosures 

Alger Spectra Fund 

Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Local, regional or global events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases and similar public health threats, recessions, or other events could have a significant impact on investments. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. Foreign securities involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. Short sales could increase market exposure, magnifying losses and increasing volatility. Leverage increases volatility in both up and down markets and its costs may exceed the returns of borrowed securities. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

 

Alger Dynamic Opportunities Fund 

Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Local, regional or global events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases and similar public health threats, recessions, or other events could have a significant impact on investments. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. Options and short sales could increase market exposure, magnifying losses and increasing volatility. Assets may be invested in Financial Derivatives Instruments (FDIs) such as Total Return Swaps (TRS) or options, which involve risks including possible counterparty default, illiquidity, and the risk of losses greater than if they had not been used. Issuers of convertible securities may be more sensitive to economic changes. Investing in companies of small capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Leverage increases volatility in both up and down markets and its costs may exceed the returns of borrowed securities. Foreign securities involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

- 8 -

Alger Emerging Markets Fund 

Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Local, regional or global events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases and similar public health threats, recessions, or other events could have a significant impact on investments. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. Foreign securities, frontier markets, and emerging markets involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio. Investing in companies of small capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

 

Alger Responsible Investing Fund 

Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Local, regional or global events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases and similar public health threats, recessions, or other events could have a significant impact on investments. The environmental, social and governance investment criteria may limit the number of investment opportunities available, and as a result, returns may be lower than vehicles not subject to such considerations. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

- 9 -

For a more detailed discussion of the risks associated with a fund, please see the prospectus.

 

Before investing, carefully consider a fund’s investment objective, risks, charges, and expenses. For a prospectus and summary prospectus containing this and other information or for The Alger Funds II’s most recent month-end performance data, visit www.alger.com, call (800) 992-3863 or consult your financial advisor. Read the prospectus and summary prospectus carefully before investing.

 

Distributor: Fred Alger & Company, LLC

 

NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE.

- 10 -

Definitions:

 


 ● Earnings per share (EPS) is calculated as a company’s profit divided by the outstanding shares of its common stock.

 


 ● The Consumer Price Index (CPI) measures the monthly change in prices paid by U.S. consumers. The Bureau of Labor Statistics (BLS) calculates the CPI as a weighted average of prices for a basket of goods and services representative of aggregate U.S. consumer spending.

 


 ● The HFRI Equity Hedge (Total) Index (“HFRI”) publishes equally weighted monthly performance based on a number of hedge funds reporting to create a composite, net of fees.

 


 ● The MSCI ACWI ex USA Index captures large and mid cap representation across Developed Markets (DM) countries (excluding the U.S.) and Emerging Markets (EM) countries. The index covers approximately 85% of the global equity opportunity set outside the U.S.

 


 ● The MSCI Emerging Markets Index captures large-and mid-cap representation across Emerging Markets countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

 


 ● The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher growth earning potential as defined by Russell’s leading style methodology. The Russell 1000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment.

 


 ● The Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000 Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership.

 


 ● The Russell 2000 Growth Index measures the performance of the small cap growth segment of the U.S. equity universe. It includes those Russell 2000 companies with higher growth earning potential as defined by Russell’s leading style methodology. The Russell 2000 Growth Index is constructed to provide a comprehensive and unbiased barometer of the small to mid-cap growth market.

 


 ● The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is constructed to provide a comprehensive and unbiased barometer of the small-cap segment.

 


 ● The Russell 3000 Growth Index combines the large-cap Russell 1000 Growth, the small-cap Russell 2000 Growth and the Russell Microcap Growth Index. It includes companies that are considered more growth oriented relative to the overall market as defined by Russell’s leading style methodology. The Russell 3000 Growth Index is constructed to provide a comprehensive, unbiased, and stable barometer of the growth opportunities within the broad market.
- 11 -

 ● The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies of the investable U.S. equity market. The Russell 3000 Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad market

 


 ● The Russell Microcap Growth Index measures the performance of the microcap growth segment of the U.S. equity market. It includes Russell Microcap companies with relatively higher price-to-book ratios, higher Institutional Brokers Estimate System forecast medium term (2 year) growth and higher sales per share historical growth (5 years).

 


 ● The Russell Microcap Index measures the performance of the microcap segment of the U.S. equity market. The Russell Microcap Index is constructed to provide a comprehensive and unbiased barometer for the microcap segment trading on national exchanges.

 


 ● The S&P 500 Index is an unmanaged index considered representative of large-cap growth stocks.
- 12 -

ALGER SPECTRA FUND 

Fund Highlights Through October 31, 2023 (Unaudited)

 

 

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

 

— 10 years ended 10/31/23

 

 

 

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Spectra Fund Class A shares, with an initial 5.25% maximum sales charge, and the Russell 3000 Growth Index (an unmanaged index of common stocks) for the ten years ended October 31, 2023. Figures for the Alger Spectra Fund Class A shares and the Russell 3000 Growth Index include reinvestment of dividends. Figures for the Alger Spectra Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Spectra Fund Class C, Class I, Class Y and Class Z shares will vary from the results shown above due to the operating expenses and the current maximum sales charge of each share class. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

- 13 -

ALGER SPECTRA FUND 

Fund Highlights Through October 31, 2023 (Unaudited) (Continued)

 

 

PERFORMANCE COMPARISON AS OF 10/31/23
AVERAGE ANNUAL TOTAL RETURNS 

  1 YEAR 5 YEARS 10 YEARS
Class A 8.53% 6.66% 9.47%
Class C 12.61% 7.00% 9.22%
Class I 14.55% 7.83% 10.07%
Class Z 14.94% 8.17% 10.41%
Russell 3000 Growth Index 17.32% 13.49% 13.27%
       
       
      Since
  1 YEAR 5 YEARS Inception
Class Y (Inception 12/3/18) 15.02% n/a 7.64%
Russell 3000 Growth Index 17.32% n/a 13.17%
       

 

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. Class A returns reflect the maximum initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart 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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

- 14 -

ALGER DYNAMIC OPPORTUNITIES FUND 

Fund Highlights Through October 31, 2023 (Unaudited)

 

 

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

 

— 10 years ended 10/31/23

 

 

 

The chart above illustrates the change in value of a hypothetical $10,000 investment made in Alger Dynamic Opportunities Fund Class A shares, with an initial 5.25% maximum sales charge, the S&P 500 Index (an unmanaged Index of Common Stocks) and the HFRI Equity Hedge (Total) Index (an unmanaged index of hedge funds) for the ten years ended October 31, 2023. Effective March 1, 2017, Weatherbie Capital, LLC, an indirect, wholly-owned subsidiary of Alger Group Holdings, LLC, the parent company of Fred Alger Management, LLC, began providing investment sub-advisory services for a portion of the assets of the Alger Dynamic Opportunities Fund. Figures for the Alger Dynamic Opportunities Fund Class A shares, the S&P 500 Index and the HFRI Equity Hedge (Total) Index include reinvestment of dividends. Figures for the Alger Dynamic Opportunities Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Dynamic Opportunities Fund Class C and Class Z shares will vary from the results shown above due to the operating expenses and the current maximum sales charge of each share class. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

- 15 -

ALGER DYNAMIC OPPORTUNITIES FUND 

Fund Highlights Through October 31, 2023 (Unaudited) (Continued)

 

 

PERFORMANCE COMPARISON AS OF 10/31/23

AVERAGE ANNUAL TOTAL RETURNS

  1 YEAR 5 YEARS 10 YEARS
Class A (10.42)% 4.43% 5.09%
Class C (7.10)% 4.77% 4.86%
Class Z (5.16)% 5.84% 5.95%
S&P 500 Index 10.14% 11.01% 11.18%
HFRI Equity Hedge (Total) Index 4.87% 5.79% 5.03%
       

 

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. Class A returns reflect the maximum initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart 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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

- 16 -

ALGER EMERGING MARKETS FUND 

Fund Highlights Through October 31, 2023 (Unaudited)

 

 

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

 

— 10 years ended 10/31/23

 

 

 

The chart above illustrates the change in value of a hypothetical $10,000 investment made in Alger Emerging Markets Fund Class A shares, with an initial 5.25% maximum sales charge, and the MSCI Emerging Markets Index (an unmanaged index of common stocks) for the ten years ended October 31, 2023. Prior to September 24, 2019, Alger Emerging Markets Fund followed different investment strategies and was managed by different portfolio managers. Performance prior to this date reflects these prior management styles and does not reflect the Alger Emerging Markets Fund’s current investment strategies and investment personnel. Figures for the Alger Emerging Markets Fund Class A shares and the MSCI Emerging Markets Index include reinvestment of dividends. Figures for the Alger Emerging Markets Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Emerging Markets Fund Class C, Class I and Class Z shares will vary from the results shown above due to the operating expenses and current maximum sales charge of each share class. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

- 17 -

ALGER EMERGING MARKETS FUND 

Fund Highlights Through October 31, 2023 (Unaudited) (Continued)

 

 

PERFORMANCE COMPARISON AS OF 10/31/23

AVERAGE ANNUAL TOTAL RETURNS

  1 YEAR 5 YEARS 10 YEARS
Class A 0.68% 1.05% 0.03%
Class C 4.45% 1.40% (0.18)%
Class I 6.48% 2.25% 0.62%
MSCI Emerging Markets Index 11.26% 1.98% 1.56%
       
       
      Since
  1 YEAR 5 YEARS Inception
Class Z (Inception 2/28/14) 6.92% 2.72% 1.37%
MSCI Emerging Markets Index 11.26% 1.98% 2.28%
       

 

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. Prior to September 24, 2019, Alger Emerging Markets Fund followed different investment strategies and was managed by different portfolio managers. Performance prior to this date reflects these prior management styles and does not reflect the Alger Emerging Markets Fund’s current investment strategies and investment personnel. Class A returns reflect the maximum initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart 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 updated performance, visit us at www.alger.com or call us at (800) 992-3863.

- 18 -

ALGER RESPONSIBLE INVESTING FUND 

Fund Highlights Through October 31, 2023 (Unaudited)

 

 

HYPOTHETICAL $10,000 INVESTMENT IN CLASS A SHARES

 

— 10 years ended 10/31/23

 

 

 

The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Responsible Investing Fund Class A shares, with an initial 5.25% maximum sales charge, and the Russell 1000 Growth Index (an unmanaged index of common stocks) for the ten years ended October 31, 2023. Prior to December 29, 2016, the Alger Responsible Investing Fund followed different investment strategies under the name “Alger Green Fund” and was managed by different portfolio management teams. Performance during that period does not reflect the Fund’s current investment strategies. Figures for the Alger Responsible Investing Fund Class A shares and the Russell 1000 Growth Index include reinvestment of dividends. Figures for the Alger Responsible Investing Fund Class A shares also include reinvestment of capital gains. Performance for the Alger Responsible Investing Fund Class C, Class I and Class Z shares will vary from the results shown above due to the operating expenses and the current maximum sales charge of each share class. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.

- 19 -

ALGER RESPONSIBLE INVESTING FUND 

Fund Highlights Through October 31, 2023 (Unaudited) (Continued)

 

 

PERFORMANCE COMPARISON AS OF 10/31/23 

AVERAGE ANNUAL TOTAL RETURNS

  1 YEAR 5 YEARS 10 YEARS
Class A 11.62% 10.26% 9.83%
Class C 15.96% 10.61% 9.58%
Class I 17.76% 11.45% 10.42%
Russell 1000 Growth Index 18.95% 14.22% 13.82%
       
       
      Since
  1 YEAR 5 YEARS Inception
Class Z (Inception 10/14/16) 18.28% 11.90% 13.56%
Russell 1000 Growth Index 18.95% 14.22% 15.60%
       

 

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. Class A returns reflect the maximum initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. Prior to December 29, 2016, the Alger Responsible Investing Fund followed different investment strategies under the name “Alger Green Fund” and was managed by different portfolio management teams. Performance during that period does not reflect the Fund’s current investment strategies. The chart 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 updated performance, visit us at www.alger. com or call us at (800) 992-3863.

- 20 -

PORTFOLIO SUMMARY† 

October 31, 2023 (Unaudited)

 

 

          Alger Dynamic     Alger Responsible  
SECTORS   Alger Spectra Fund*     Opportunities Fund*     Investing Fund  
Communication Services     15.0 %     7.0 %     5.8 %
Consumer Discretionary     12.6       3.3       15.7  
Consumer Staples     (0.3 )     0.0       2.4  
Energy     5.9       6.1       0.0  
Financials     4.9       3.0       7.5  
Healthcare     12.5       16.9       11.8  
Industrials     8.0       9.3       6.6  
Information Technology     39.9       12.0       42.6  
Market Indices     (3.2 )     (7.2 )     0.0  
Materials     1.1       (0.5 )     1.9  
Real Estate     2.2       1.3       2.3  
Utilities     0.0       0.6       0.6  
Short-Term Investments and Net Other Assets     1.4       48.2       2.8  
      100.0 %     100.0 %     100.0 %
                         
    Alger Emerging                  
COUNTRY   Markets Fund                  
Argentina     3.2 %                
Brazil     14.4                  
Canada     1.5                  
China     22.8                  
Greece     7.7                  
Hong Kong     1.6                  
India     15.0                  
Mexico     1.6                  
Poland     1.7                  
Saudi Arabia     5.5                  
South Korea     10.0                  
Taiwan     7.4                  
Turkey     2.1                  
United Arab Emirates     3.5                  
Cash and Net Other Assets     2.0                  
      100.0 %                

 


 * Includes short sales as a reduction of sector exposure.

 


 † Based on net assets for each Fund.
- 21 -

 

THE ALGER FUNDS II | ALGER SPECTRA FUND 

Schedule of Investments October 31, 2023 

 

 

COMMON STOCKS—105.9%   SHARES     VALUE  
ADVERTISING—1.0%                
The Trade Desk, Inc., Cl. A*     381,611     $ 27,079,117  
AEROSPACE & DEFENSE—4.5%                
HEICO Corp., Cl. A+     547,963       69,662,536  
TransDigm Group, Inc.*,+     61,328       50,785,104  
              120,447,640  
APPLICATION SOFTWARE—2.8%                
Adobe, Inc.*     85,186       45,324,063  
Cadence Design Systems, Inc.*     130,925       31,402,361  
              76,726,424  
AUTOMOBILE MANUFACTURERS—2.3%                
Ferrari NV     42,802       12,910,795  
Rivian Automotive, Inc., Cl. A*     114,345       1,854,676  
Tesla, Inc.*,+     233,934       46,983,305  
              61,748,776  
AUTOMOTIVE PARTS & EQUIPMENT—0.8%                
Mobileye Global, Inc., Cl. A*     635,140       22,655,444  
BIOTECHNOLOGY—4.3%                
Amgen, Inc.     112,513       28,769,574  
Natera, Inc.*,+     1,217,736       48,064,040  
Nuvalent, Inc., Cl. A*     22,208       1,156,815  
Sarepta Therapeutics, Inc.*     51,513       3,467,340  
Vaxcyte, Inc.*     377,290       18,147,649  
Vertex Pharmaceuticals, Inc.*     43,338       15,693,123  
              115,298,541  
BROADLINE RETAIL—9.1%                
Amazon.com, Inc.*,+     1,543,891       205,476,453  
MercadoLibre, Inc.*,+     31,459       39,032,440  
              244,508,893  
CARGO GROUND TRANSPORTATION—0.6%                
Old Dominion Freight Line, Inc.     43,345       16,326,328  
CASINOS & GAMING—1.3%                
DraftKings, Inc., Cl. A*     575,202       15,887,079  
Flutter Entertainment PLC*     119,284       18,736,189  
              34,623,268  
COAL & CONSUMABLE FUELS—0.5%                
Cameco Corp.     317,732       12,998,416  
COMMUNICATIONS EQUIPMENT—0.4%                
Arista Networks, Inc.*     60,532       12,128,797  
CONSTRUCTION & ENGINEERING—0.5%                
Quanta Services, Inc.     86,422       14,442,845  
CONSTRUCTION MACHINERY & HEAVY TRANSPORTATION EQUIPMENT—0.6%                
Wabtec Corp.     157,734       16,722,959  
CONSTRUCTION MATERIALS—1.3%                
Martin Marietta Materials, Inc.     86,143       35,227,318  

 

- 22 -

 

THE ALGER FUNDS II | ALGER SPECTRA FUND 

Schedule of Investments October 31, 2023 (Continued) 

 

 

COMMON STOCKS—105.9% (CONT.)   SHARES     VALUE  
ELECTRICAL COMPONENTS & EQUIPMENT—0.8%                
Vertiv Holdings Co., Cl. A     560,591     $ 22,014,409  
ENVIRONMENTAL & FACILITIES SERVICES—1.7%                
GFL Environmental, Inc.     1,576,032       45,421,242  
FINANCIAL EXCHANGES & DATA—2.4%                
CME Group, Inc., Cl. A     118,103       25,210,266  
S&P Global, Inc.+     116,578       40,721,861  
              65,932,127  
HEALTHCARE DISTRIBUTORS—1.0%                
McKesson Corp.     60,307       27,461,395  
HEALTHCARE EQUIPMENT—2.5%                
Dexcom, Inc.*     221,805       19,702,938  
Intuitive Surgical, Inc.*,+     123,328       32,339,068  
TransMedics Group, Inc.*     383,613       14,377,815  
              66,419,821  
HEALTHCARE FACILITIES—0.9%                
Acadia Healthcare Co., Inc.*     346,916       25,501,795  
INTERACTIVE MEDIA & SERVICES—10.6%                
Alphabet, Inc., Cl. C*,+     849,176       106,401,753  
Meta Platforms, Inc., Cl. A*     498,591       150,210,511  
Pinterest, Inc., Cl. A*     997,688       29,810,917  
              286,423,181  
INTERNET SERVICES & INFRASTRUCTURE—0.8%                
MongoDB, Inc., Cl. A*     34,743       11,972,090  
Snowflake, Inc., Cl. A*     66,604       9,666,239  
              21,638,329  
LIFE SCIENCES TOOLS & SERVICES—0.5%                
West Pharmaceutical Services, Inc.     39,130       12,454,688  
MANAGED HEALTHCARE—3.1%                
Humana, Inc.     43,366       22,710,341  
UnitedHealth Group, Inc.     114,956       61,565,835  
              84,276,176  
MOVIES & ENTERTAINMENT—3.4%                
Liberty Media Corp. Series C Liberty Formula One*     586,926       37,968,243  
Netflix, Inc.*     128,912       53,071,781  
              91,040,024  
OIL & GAS EQUIPMENT & SERVICES—1.1%                
Schlumberger NV+     531,460       29,581,064  
OIL & GAS EXPLORATION & PRODUCTION—3.3%                
Diamondback Energy, Inc.     178,685       28,646,779  
EOG Resources, Inc.     268,293       33,871,991  
Pioneer Natural Resources Co.+     106,674       25,495,086  
              88,013,856  
OIL & GAS STORAGE & TRANSPORTATION—1.0%                
Cheniere Energy, Inc.     155,890       25,943,214  

 

- 23 -

 

THE ALGER FUNDS II | ALGER SPECTRA FUND 

Schedule of Investments October 31, 2023 (Continued) 

 

 

COMMON STOCKS—105.9% (CONT.)   SHARES     VALUE  
PASSENGER GROUND TRANSPORTATION—0.1%                
Uber Technologies, Inc.*     94,054     $ 4,070,657  
PHARMACEUTICALS—1.3%                
Eli Lilly & Co.     61,851       34,261,124  
PROPERTY & CASUALTY INSURANCE—0.7%                
The Progressive Corp.     117,201       18,528,306  
REAL ESTATE SERVICES—2.2%                
CoStar Group, Inc.*     221,058       16,227,868  
FirstService Corp.     301,489       42,651,649  
              58,879,517  
SEMICONDUCTORS—12.5%                
Advanced Micro Devices, Inc.*,+     214,903       21,167,945  
Broadcom, Inc.     31,612       26,597,388  
Marvell Technology, Inc.     933,148       44,063,249  
NVIDIA Corp.+     512,910       209,164,698  
Taiwan Semiconductor Manufacturing Co., Ltd.#     414,256       35,754,435  
              336,747,715  
SYSTEMS SOFTWARE—15.8%                
Microsoft Corp.+     1,160,877       392,504,122  
ServiceNow, Inc.*     59,043       34,354,170  
              426,858,292  
TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—7.7%                
Apple, Inc.+     1,208,136       206,313,385  
TRANSACTION & PAYMENT PROCESSING SERVICES—2.5%                
Visa, Inc., Cl. A+     281,763       66,242,481  
TOTAL COMMON STOCKS                
(Cost $1,963,718,467)             2,854,957,564  
PREFERRED STOCKS—0.3%     SHARES       VALUE  
BIOTECHNOLOGY—0.0%                
Prosetta Biosciences, Inc., Series D*,@,(a),(b)     2,912,012       —  
DATA PROCESSING & OUTSOURCED SERVICES—0.3%                
Chime Financial, Inc., Series G*,@,(a)     188,583       7,111,465  
TOTAL PREFERRED STOCKS                
(Cost $26,129,444)             7,111,465  
SPECIAL PURPOSE VEHICLE—0.4%             VALUE  
DATA PROCESSING & OUTSOURCED SERVICES—0.4%                
Crosslink Ventures C, LLC, Cl. A*,@,(a),(b)             6,767,586  
Crosslink Ventures C, LLC, Cl. B*,@,(a),(b)             4,212,477  
              10,980,063  
TOTAL SPECIAL PURPOSE VEHICLE                
(Cost $11,925,000)             10,980,063  

 

- 24 -

 

THE ALGER FUNDS II | ALGER SPECTRA FUND 

Schedule of Investments October 31, 2023 (Continued)

 

 

          VALUE  
Total Investments                
(Cost $2,001,772,911)     106.6 %   $ 2,873,049,092  
Affiliated Securities (Cost $25,029,054)             10,980,063  
Unaffiliated Securities (Cost $1,976,743,857)             2,862,069,029  
Securities Sold Short (Proceeds $234,084,010)     (8.0 )%     (215,310,298 )
Other Assets in Excess of Liabilities     1.4 %     36,499,994  
NET ASSETS     100.0 %   $ 2,694,238,788  

 


 + All or a portion of this security is held as collateral for securities sold short.

# American Depositary Receipts.

(a) Security is valued in good faith at fair value determined using significant unobservable inputs pursuant to procedures established by the Valuation Designee (as defined in Note 2).

(b) Deemed an affiliate of the Fund in accordance with Section 2(a)(3) of the Investment Company Act of 1940. See Note 11 -


Affiliated Securities.

* Non-income producing security.

@ Restricted security - Investment in security not registered under the Securities Act of 1933. Sales or transfers of the investment may be restricted only to qualified buyers.

 

Security   Acquisition Date(s)   Acquisition Cost     % of net assets (Acquisition Date)     Market Value     % of net assets as of 10/31/2023  
Chime Financial, Inc., Series G   8/24/21   $ 13,025,390       0.15 %   $ 7,111,465       0.26 %
Crosslink Ventures C, LLC, Cl. A   10/2/20     7,350,000       0.10 %     6,767,586       0.25 %
Crosslink Ventures C, LLC, Cl. B   12/16/20     4,575,000       0.06 %     4,212,477       0.16 %
Prosetta Biosciences, Inc., Series D   2/6/15     13,104,054       0.28 %     0       0.00 %
Total  
                  $ 18,091,528       0.67 %

 

See Notes to Financial Statements.

- 25 -

 

THE ALGER FUNDS II | ALGER SPECTRA FUND 

Schedule of Investments - Securities Sold Short October 31, 2023 

 

 

COMMON STOCKS—(8.0)%   SHARES     VALUE  
AIR FREIGHT & LOGISTICS—(0.1)%                
United Parcel Service, Inc., Cl. B     (27,528 )   $ (3,888,330 )
APPLICATION SOFTWARE—(0.2)%                
Five9, Inc.     (91,288 )     (5,282,837 )
ASSET MANAGEMENT & CUSTODY BANKS—(0.1)%                
T Rowe Price Group, Inc.     (42,563 )     (3,851,952 )
AUTOMOBILE MANUFACTURERS—(0.1)%                
Thor Industries, Inc.     (44,136 )     (3,880,878 )
AUTOMOTIVE PARTS & EQUIPMENT—(0.2)%     ‌          
Aptiv PLC     (23,558 )     (2,054,258 )
QuantumScape Corp., Cl. A     (380,753 )     (1,987,531 )
              (4,041,789 )
BUILDING PRODUCTS—(0.1)%                
Carrier Global Corp.     (50,684 )     (2,415,599 )
CONSUMER FINANCE—0.0%                
Synchrony Financial     (47,108 )     (1,321,379 )
DIVERSIFIED BANKS—(0.3)%     ‌          
JPMorgan Chase & Co.     (13,847 )     (1,925,564 )
SPDR S&P Regional Banking ETF     (113,835 )     (4,515,834 )
              (6,441,398 )
ELECTRICAL COMPONENTS & EQUIPMENT—(0.1)%                
Rockwell Automation, Inc.     (14,950 )     (3,929,010 )
FOOTWEAR—(0.1)%                
NIKE, Inc., Cl. B     (35,600 )     (3,658,612 )
HEALTHCARE EQUIPMENT—(0.7)%     ‌          
Abbott Laboratories     (73,151 )     (6,916,427 )
Envista Holdings Corp.     (175,333 )     (4,079,999 )
Omnicell, Inc.     (93,472 )     (3,321,995 )
Stryker Corp.     (21,950 )     (5,931,329 )
              (20,249,750 )
HOME IMPROVEMENT RETAIL—(0.3)%     ‌          
Floor & Decor Holdings, Inc., Cl. A     (63,280 )     (5,214,272 )
Lowe's Cos., Inc.     (14,281 )     (2,721,530 )
              (7,935,802 )
HOTELS RESORTS & CRUISE LINES—(0.2)%                
Airbnb, Inc., Cl. A     (57,170 )     (6,762,639 )
HOUSEHOLD PRODUCTS—(0.2)%                
The Clorox Co.     (36,919 )     (4,345,366 )
HUMAN RESOURCE & EMPLOYMENT SERVICES—(0.2)%                
Robert Half, Inc.     ‌(60,623)       (4,532,782 )
INDUSTRIAL MACHINERY & SUPPLIES & COMPONENTS—(0.2)%                
Lincoln Electric Holdings, Inc.     (24,102 )     (4,213,030 )
MARKET INDICES—(3.2)%     ‌          
Direxion NASDAQ-100 Equal Weighted Index Shares     (148,521 )     (10,585,092 )
iShares China Large-Capital ETF     (164,285 )     (4,192,553 )

 

 

- 26 -

 

THE ALGER FUNDS II | ALGER SPECTRA FUND 

Schedule of Investments - Securities Sold Short October 31, 2023 (Continued) 

 

 

COMMON STOCKS—(8.0)% (CONT.)   SHARES     VALUE  
MARKET INDICES—(3.2)% (CONT.)                
iShares Europe ETF     (76,346 )   $ (3,532,529 )
iShares MSCI United Kingdom ETF     (187,293 )     (5,712,437 )
iShares Russell Mid-Cap Growth ETF     (155,916 )     (13,516,358 )
Renaissance IPO ETF     (71,563 )     (2,129,715 )
SPDR S&P 500 ETF Trust     (108,162 )     (45,233,348 )
              (84,902,032 )
PACKAGED FOODS & MEATS—(0.1)%                
Campbell Soup Co.     (67,671 )     (2,734,585 )
PASSENGER AIRLINES—(0.1)%                
Joby Aviation, Inc.     (327,194 )     (1,724,312 )
PHARMACEUTICALS—(0.4)%                
Consumer Discretionary Select Sector SPDR Fund     (71,803 )     (10,921,236 )
PROPERTY & CASUALTY INSURANCE—(0.1)%                
Trupanion, Inc.     (102,805 )     (2,117,783 )
SEMICONDUCTORS—(0.3)%     ‌          
NXP Semiconductors NV     (15,000 )     (2,586,450 )
Texas Instruments, Inc.     (47,595 )     (6,758,966 )
              (9,345,416 )
STEEL—(0.2)%                
Steel Dynamics, Inc.     (45,040 )     (4,797,210 )
SYSTEMS SOFTWARE—(0.3)%     ‌          
Crowdstrike Holdings, Inc., Cl. A     (12,554 )     (2,219,171 )
Technology Select Sector SPDR Fund     (29,227 )     (4,793,520 )
              (7,012,691 )
TRANSACTION & PAYMENT PROCESSING SERVICES—(0.2)%                
PayPal Holdings, Inc.     (96,600 )     (5,003,880 )
TOTAL COMMON STOCKS                
(Proceeds $234,084,010)           $ (215,310,298 )
Total Securities Sold Short                
(Proceeds $234,084,010)           $ (215,310,298 )

 

See Notes to Financial Statements.

 

- 27 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND 

Schedule of Investments October 31, 2023 

 

 

COMMON STOCKS—85.9%   SHARES     VALUE  
ADVERTISING—1.2%     ‌       ‌  
The Trade Desk, Inc., Cl. A*     43,446     $ 3,082,928  
AEROSPACE & DEFENSE—5.6%     ‌       ‌  
AAR Corp.*     4,151       246,403  
HEICO Corp.     24,796       3,927,934  
HEICO Corp., Cl. A+     9,467       1,203,540  
Kratos Defense & Security Solutions, Inc.*     33,696       574,517  
TransDigm Group, Inc.*     10,140       8,396,833  
              14,349,227  
APPAREL RETAIL—0.1%     ‌       ‌  
MYT Netherlands Parent BV#,*     42,041       122,339  
APPLICATION SOFTWARE—6.4%     ‌       ‌  
AppFolio, Inc., Cl. A*,+     18,431       3,457,103  
Cadence Design Systems, Inc.*     5,677       1,361,628  
Everbridge, Inc.*     2,061       42,477  
HubSpot, Inc.*     4,711       1,996,381  
Manhattan Associates, Inc.*     2,788       543,604  
nCino, Inc.*     30,480       856,488  
Sprout Social, Inc., Cl. A*     22,764       985,226  
SPS Commerce, Inc.*     13,579       2,177,257  
Vertex, Inc., Cl. A*     202,471       4,901,823  
              16,321,987  
ASSET MANAGEMENT & CUSTODY BANKS—2.2%     ‌       ‌  
Ares Management Corp., Cl. A     13,797       1,360,246  
Hamilton Lane, Inc., Cl. A     16,465       1,385,036  
StepStone Group, Inc., Cl. A     102,928       2,912,862  
              5,658,144  
BIOTECHNOLOGY—8.1%     ‌       ‌  
ACADIA Pharmaceuticals, Inc.*     186,080       4,199,826  
Amgen, Inc.+     10,229       2,615,555  
Ascendis Pharma AS#,*     15,214       1,358,762  
BioMarin Pharmaceutical, Inc.*     24,872       2,025,824  
Cabaletta Bio, Inc.*,+     84,198       1,200,664  
ImmunoGen, Inc.*     51,578       766,449  
Morphic Holding, Inc.*,+     92,581       1,846,991  
Natera, Inc.*,+     67,759       2,674,448  
Nuvalent, Inc., Cl. A*     6,583       342,909  
Regeneron Pharmaceuticals, Inc.*     712       555,282  
Roivant Sciences Ltd.*     79,996       691,165  
Ultragenyx Pharmaceutical, Inc.*     25,398       899,089  
Vaxcyte, Inc.*     11,491       552,717  
Vertex Pharmaceuticals, Inc.*     2,707       980,232  
              20,709,913  
BROADLINE RETAIL—5.3%     ‌       ‌  
Amazon.com, Inc.*,+     69,436       9,241,237  
MercadoLibre, Inc.*,+     1,794       2,225,888  
Ollie’s Bargain Outlet Holdings, Inc.*     26,372       2,036,973  
              13,504,098  

 

- 28 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND 

Schedule of Investments October 31, 2023 (Continued) 

 

 

COMMON STOCKS—85.9% (CONT.)   SHARES     VALUE  
CARGO GROUND TRANSPORTATION—1.0%     ‌       ‌  
RXO, Inc.*     89,670     $ 1,570,122  
XPO, Inc.*     11,168       846,646  
              2,416,768  
CASINOS & GAMING—1.9%     ‌       ‌  
DraftKings, Inc., Cl. A*     147,453       4,072,652  
Penn Entertainment, Inc.*     39,815       785,550  
              4,858,202  
COAL & CONSUMABLE FUELS—0.6%     ‌       ‌  
Cameco Corp.     39,141       1,601,258  
COMMUNICATIONS EQUIPMENT—0.6%     ‌       ‌  
Arista Networks, Inc.*,+     7,856       1,574,107  
CONSUMER FINANCE—0.2%     ‌       ‌  
Upstart Holdings, Inc.*     25,704       617,667  
ELECTRIC UTILITIES—0.6%     ‌       ‌  
NextEra Energy, Inc.     27,649       1,611,937  
ELECTRONIC EQUIPMENT & INSTRUMENTS—0.6%     ‌       ‌  
908 Devices, Inc.*,+     142,494       844,989  
Novanta, Inc.*     4,295       567,198  
              1,412,187  
ENVIRONMENTAL & FACILITIES SERVICES—3.2%     ‌       ‌  
Casella Waste Systems, Inc., Cl. A*     61,759       4,659,717  
Montrose Environmental Group, Inc.*     42,668       986,484  
Waste Connections, Inc.     18,239       2,361,951  
              8,008,152  
FINANCIAL EXCHANGES & DATA—1.8%     ‌       ‌  
CBOE Global Markets, Inc.     8,861       1,452,229  
MarketAxess Holdings, Inc.+     14,952       3,195,990  
              4,648,219  
HEALTHCARE DISTRIBUTORS—0.7%     ‌       ‌  
McKesson Corp.     3,909       1,780,002  
HEALTHCARE EQUIPMENT—6.9%     ‌       ‌  
Dexcom, Inc.*     37,129       3,298,169  
Glaukos Corp.*     82,548       5,629,774  
Impulse Dynamics PLC, Class E*,@,(a)     1,273,271       3,628,822  
Inogen, Inc.*     61,769       276,107  
Inspire Medical Systems, Inc.*     12,003       1,766,361  
Insulet Corp.*     8,093       1,072,889  
Nevro Corp.*     66,943       965,988  
Tandem Diabetes Care, Inc.*     14,093       243,809  
TransMedics Group, Inc.*,+     16,018       600,355  
              17,482,274  
HEALTHCARE SERVICES—0.7%     ‌       ‌  
Agiliti, Inc.*     120,757       679,862  
NeoGenomics, Inc.*     74,983       1,051,262  
              1,731,124  
HEALTHCARE TECHNOLOGY—0.2%     ‌       ‌  
Definitive Healthcare Corp., Cl. A*     89,283       514,270  

 

- 29 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND 

Schedule of Investments October 31, 2023 (Continued) 

 

 

COMMON STOCKS—85.9% (CONT.)   SHARES     VALUE  
HOTELS RESORTS & CRUISE LINES—1.2%     ‌       ‌  
Lindblad Expeditions Holdings, Inc.*     165,005     $ 1,026,331  
MakeMyTrip Ltd.*     53,949       2,089,445  
              3,115,776  
HUMAN RESOURCE & EMPLOYMENT SERVICES—1.4%     ‌       ‌  
Paycom Software, Inc.     5,359       1,312,794  
Paylocity Holding Corp.*     12,385       2,221,869  
              3,534,663  
INTERACTIVE MEDIA & SERVICES—4.8%     ‌       ‌  
Alphabet, Inc., Cl. A*     19,357       2,401,816  
Meta Platforms, Inc., Cl. A*,+     22,191       6,685,483  
Pinterest, Inc., Cl. A*,+     102,434       3,060,728  
              12,148,027  
INTERNET SERVICES & INFRASTRUCTURE—0.1%     ‌       ‌  
MongoDB, Inc., Cl. A*     980       337,698  
IT CONSULTING & OTHER SERVICES—0.9%     ‌       ‌  
Globant SA*     14,077       2,397,172  
LEISURE FACILITIES—0.2%     ‌       ‌  
Planet Fitness, Inc., Cl. A*     8,561       473,166  
LEISURE PRODUCTS—0.0%     ‌       ‌  
Latham Group, Inc.*     4,938       11,308  
LIFE SCIENCES TOOLS & SERVICES—0.8%     ‌       ‌  
Bio-Techne Corp.     37,739       2,061,682  
MANAGED HEALTHCARE—2.4%     ‌       ‌  
Humana, Inc.     2,031       1,063,615  
Progyny, Inc.*     165,734       5,114,551  
              6,178,166  
MOVIES & ENTERTAINMENT—1.4%     ‌       ‌  
Netflix, Inc.*,+     1,515       623,711  
Spotify Technology SA*     18,312       3,017,085  
              3,640,796  
OIL & GAS EQUIPMENT & SERVICES—3.8%     ‌       ‌  
Core Laboratories, Inc.     62,957       1,348,539  
Dril-Quip, Inc.*     59,952       1,298,560  
Schlumberger NV+     127,900       7,118,914  
              9,766,013  
OIL & GAS EXPLORATION & PRODUCTION—1.7%     ‌       ‌  
Diamondback Energy, Inc.+     9,226       1,479,112  
Pioneer Natural Resources Co.+     11,791       2,818,049  
              4,297,161  
PASSENGER GROUND TRANSPORTATION—1.4%     ‌       ‌  
Uber Technologies, Inc.*     80,946       3,503,343  
PERSONAL CARE PRODUCTS—0.0%     ‌       ‌  
Oddity Tech Ltd., Cl. A*     22       562  
PHARMACEUTICALS—1.6%     ‌       ‌  
Eli Lilly & Co.     7,205       3,991,066  
REAL ESTATE SERVICES—2.2%     ‌       ‌  
FirstService Corp.     40,155       5,680,728  

 

- 30 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND

Schedule of Investments October 31, 2023 (Continued) 

 

 

COMMON STOCKS—85.9% (CONT.)   SHARES     VALUE  
REGIONAL BANKS—0.2%     ‌       ‌  
Axos Financial, Inc.*     2,061     $ 74,258  
Seacoast Banking Corp. of Florida     15,726       317,822  
              392,080  
RESTAURANTS—0.7%     ‌       ‌  
McDonald's Corp.     5,723       1,500,399  
Wingstop, Inc.     1,605       293,346  
              1,793,745  
SEMICONDUCTOR MATERIALS & EQUIPMENT—0.8%     ‌       ‌  
ASML Holding NV#     3,526       2,111,404  
SEMICONDUCTORS—4.9%     ‌       ‌  
Broadcom, Inc.+     1,209       1,017,216  
Impinj, Inc.*     38,542       2,490,198  
NVIDIA Corp.+     20,881       8,515,272  
Rambus, Inc.*     8,314       451,700  
              12,474,386  
SOFT DRINKS & NON-ALCOHOLIC BEVERAGES—0.6%     ‌       ‌  
Celsius Holdings, Inc.*,+     9,129       1,388,430  
SYSTEMS SOFTWARE—4.4%     ‌       ‌  
Crowdstrike Holdings, Inc., Cl. A*     10,604       1,874,469  
Microsoft Corp.+     23,868       8,070,010  
Zscaler, Inc.*     8,541       1,355,371  
              11,299,850  
TRADING COMPANIES & DISTRIBUTORS—0.7%     ‌       ‌  
SiteOne Landscape Supply, Inc.*     11,013       1,517,261  
Xometry, Inc., Cl. A*     23,733       345,315  
              1,862,576  
TRANSACTION & PAYMENT PROCESSING SERVICES—1.8%     ‌       ‌  
Flywire Corp.*     146,170       3,930,511  
Global Payments, Inc.     4,980       528,976  
              4,459,487  
TOTAL COMMON STOCKS                
(Cost $214,498,020)             218,924,088  
PREFERRED STOCKS—0.0%     SHARES       VALUE  
BIOTECHNOLOGY—0.0%     ‌       ‌  
Prosetta Biosciences, Inc., Series D*,@,(a),(b)     41,418       —  
(Cost $186,381)             —  
RIGHTS—0.0%     SHARES       VALUE  
BIOTECHNOLOGY—0.0%     ‌       ‌  
Tolero CDR*,@,(a),(c)     126,108       85,753  
(Cost $67,638)             85,753  
REAL ESTATE INVESTMENT TRUST—0.3%     SHARES       VALUE  
TELECOM TOWER—0.3%     ‌       ‌  
Crown Castle, Inc.     8,185       761,041  
(Cost $737,117)     ‌       761,041  

 

- 31 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND 

Schedule of Investments October 31, 2023 (Continued) 

 

 

SPECIAL PURPOSE VEHICLE—0.5%                   VALUE  
DATA PROCESSING & OUTSOURCED SERVICES—0.5%                      
Crosslink Ventures C, LLC, Cl. A*,@,(a),(b)                       $ 851,703  
Crosslink Ventures C, LLC, Cl. B*,@,(a),(b)                         506,418  
                          1,358,121  
TOTAL SPECIAL PURPOSE VEHICLE                            
(Cost $1,475,000)                         1,358,121  
SHORT—TERM INVESTMENTS—12.4%                 SHARES       VALUE  
U.S. GOVERNMENT—12.4%                            
U.S. Treasury Bill, 0.00%, 11/2/23                 16,000,000       15,997,691  
U.S. Treasury Bill, 0.00%, 11/14/23                 15,500,000       15,470,783  
                          31,468,474  
TOTAL SHORT—TERM INVESTMENTS                            
(Cost $31,468,474)                         31,468,474  
PURCHASED OPTIONS—0.3% SECURITY NAME/ EXPIRATION DATE/ STRIKE PRICE     NOTIONAL AMOUNTS     COUNTERPARTY     NUMBER OF CONTRACTS       VALUE  
PUT OPTIONS—0.3%                            
Carvana Co., 1/19/2024, 5.00   $ 1,377,000     BNP Paribas     510       4,590  
CBOE S&P 500, 11/17/2023, 4250.00   $ 33,131,020     BNP Paribas     79       660,440  
                          665,030  
TOTAL PURCHASED OPTIONS                            
(Cost $582,587)                         665,030  
Total Investments                            
(Cost $249,015,217)                 99.4 %   $ 253,262,507  
Affiliated Securities (Cost $1,661,381)                         1,358,121  
Unaffiliated Securities (Cost $247,353,836)                         251,904,386  
Securities Sold Short (Proceeds $105,902,840)                 (34.9 )%     (88,884,878 )
Written Options (Premiums received $143,599)                 (0.0 )%     (81,765 )
Over-the-counter ("OTC") contracts for difference                 (0.2 )%     (439,597 )
Other Assets in Excess of Liabilities                 35.7 %     90,909,972  
NET ASSETS                 100.0 %   $ 254,766,239  

 

- 32 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND 

Schedule of Investments October 31, 2023 (Continued) 

 

 


 + All or a portion of this security is held as collateral for securities sold short.

# American Depositary Receipts.

(a) Security is valued in good faith at fair value determined using significant unobservable inputs pursuant to procedures established by the Valuation Designee (as defined in Note 2).

(b) Deemed an affiliate of the Fund in accordance with Section 2(a)(3) of the Investment Company Act of 1940. See Note 11 - Affiliated Securities.

(c) Contingent Deferred Rights.

* Non-income producing security.

@ Restricted security - Investment in security not registered under the Securities Act of 1933. Sales or transfers of the investment may be restricted only to qualified buyers.

 

Security   Acquisition Date(s)   Acquisition Cost     % of net assets (Acquisition Date)     Market Value     % of net assets as of 10/31/2023  
Crosslink Ventures C, LLC, Cl. A   10/2/20   $ 925,000       0.24 %   $ 851,703       0.33 %
Crosslink Ventures C, LLC, Cl. B   12/2/20     550,000       0.11 %     506,418       0.20 %
Impulse Dynamics PLC, Class E   2/11/22     3,485,265       0.47 %     3,010,001       1.18 %
Impulse Dynamics PLC, Class E   6/02/23     716,529       0.19 %     618,821       0.24 %
Prosetta Biosciences, Inc., Series D   2/6/15     186,381       0.25 %     0       0.00 %
Tolero CDR   2/6/17     67,638       0.09 %     85,753       0.04 %
Total  
                  $ 5,072,696       1.99 %

 

Over the counter - Contracts for difference outstanding as of October 31, 2023: 

 

Contract Amount     Counterparty   Reference Company     Market Value       Unrealized Appreciation       Unrealized (Depreciation)      

Net Unrealized Appreciation/

 (Depreciation)

  
(17,801 )   BNP Paribas   Carvana Co.   $ (352,122 )   $ —     $ (352,122 )   $ (352,122 )
(474,191 )   BNP Paribas   Ses Ai Corp.     (87,475 )     —       (87,475 )     (87,475 )
Total             $ (439,597 )   $ —     $ (439,597 )   $ (439,597 )

 

OPTIONS WRITTEN—0.0% SECURITY NAME/ EXPIRATION DATE/ STRIKE PRICE   NOTIONAL AMOUNTS     COUNTERPARTY   NUMBER OF CONTRACTS     VALUE  
PUT OPTIONS—0.0%                            

                           
CBOE S&P 500, 11/17/2023, 3975.00   $ (33,131,020 )   BNP Paribas     79     $ (81,765 )
(Premiums received $143,599)                       $ (81,765 )

 

See Notes to Financial Statements.

 

- 33 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND 

Schedule of Investments - Securities Sold Short October 31, 2023

 

 

COMMON STOCKS—(33.8)%   SHARES     VALUE  
ADVERTISING—(0.1)%                
Cardlytics, Inc.     (18,661 )   $ (231,210 )
AEROSPACE & DEFENSE—(0.1)%                
Archer Aviation, Inc., Cl. A     (62,108 )     (295,013 )
AIR FREIGHT & LOGISTICS—(0.5)%                
United Parcel Service, Inc., Cl. B     (8,698 )     (1,228,592 )
APPLICATION SOFTWARE—(2.1)%                
Aurora Innovation, Inc., Cl. A     (435,157 )     (761,525 )
C3.ai, Inc., Cl. A     (29,398 )     (717,311 )
DocuSign, Inc., Cl. A     (18,737 )     (728,494 )
Dynatrace, Inc.     (12,559 )     (561,513 )
HashiCorp, Inc., Cl. A     (21,793 )     (429,104 )
Klaviyo, Inc., Cl. A     (21,250 )     (605,412 )
Palantir Technologies, Inc., Cl. A     (27,212 )     (402,738 )
Porch Group, Inc.     (830 )     (467 )
Salesforce, Inc.     (4,515 )     (906,747 )
              (5,113,311 )
AUTOMOBILE MANUFACTURERS—(1.4)%                
Fisker, Inc.     (193,840 )     (872,280 )
Ford Motor Co.     (45,360 )     (442,260 )
Lucid Group, Inc.     (485,078 )     (1,998,521 )
Thor Industries, Inc.     (2,919 )     (256,668 )
              (3,569,729 )
AUTOMOTIVE PARTS & EQUIPMENT—(1.1)%                
LCI Industries     (9,439 )     (1,024,037 )
Patrick Industries, Inc.     (13,498 )     (1,014,375 )
QuantumScape Corp., Cl. A     (163,192 )     (851,862 )
              (2,890,274 )
BIOTECHNOLOGY—(0.5)%                
Recursion Pharmaceuticals, Inc., Cl. A     (110,003 )     (580,816 )
Twist Bioscience Corp.     (44,267 )     (697,648 )
              (1,278,464 )
BROADLINE RETAIL—(0.3)%                
Savers Value Village, Inc.     (48,024 )     (718,919 )
BUILDING PRODUCTS—(0.2)%                
Carrier Global Corp.     (13,164 )     (627,396 )
COMMODITY CHEMICALS—(0.2)%                
PureCycle Technologies, Inc.     (137,647 )     (612,529 )
CONSTRUCTION & ENGINEERING—(0.5)%                
Ameresco, Inc., Cl. A     (43,987 )     (1,150,260 )
CONSTRUCTION MACHINERY & HEAVY TRANSPORTATION EQUIPMENT—(0.2)%                
Nikola Corp.     (414,821 )     (448,007 )
CONSUMER FINANCE—(0.2)%                
Synchrony Financial     (14,192 )     (398,086 )
DIVERSIFIED SUPPORT SERVICES—(0.1)%                
Healthcare Services Group, Inc.     (25,410 )     (241,395 )

 

- 34 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND 

Schedule of Investments - Securities Sold Short October 31, 2023 (Continued)

 

 

COMMON STOCKS—(33.8)% (CONT.)   SHARES     VALUE  
EDUCATION SERVICES—(0.9)%                
Bright Horizons Family Solutions, Inc.     (24,350 )   $ (1,803,361 )
Duolingo, Inc., Cl. A     (3,389 )     (494,963 )
              (2,298,324 )
ELECTRICAL COMPONENTS & EQUIPMENT—(0.5)%                
FREYR Battery SA     (114,156 )     (366,441 )
Rockwell Automation, Inc.     (3,995 )     (1,049,926 )
              (1,416,367 )
ELECTRONIC EQUIPMENT & INSTRUMENTS—(0.3)%                
Cognex Corp.     (6,302 )     (226,809 )
SmartRent, Inc., Cl. A     (179,594 )     (432,821 )
              (659,630 )
ELECTRONIC MANUFACTURING SERVICES—(0.9)%                
IPG Photonics Corp.     (26,363 )     (2,264,582 )
HEALTHCARE EQUIPMENT—(1.0)%                
Envista Holdings Corp.     (42,703 )     (993,699 )
ResMed, Inc.     (5,039 )     (711,608 )
Stryker Corp.     (2,785 )     (752,563 )
              (2,457,870 )
HEALTHCARE FACILITIES—(0.5)%                
Surgery Partners, Inc.     (34,348 )     (794,469 )
US Physical Therapy, Inc.     (6,898 )     (580,191 )
              (1,374,660 )
HEALTHCARE SERVICES—(0.4)%                
23andMe Holding Co., Cl. A     (713,096 )     (604,064 )
Cross Country Healthcare, Inc.     (8,828 )     (204,456 )
DocGo, Inc.     (42,586 )     (252,961 )
              (1,061,481 )
HEALTHCARE SUPPLIES—(1.0)%                
RxSight, Inc.     (28,122 )     (622,621 )
STAAR Surgical Co.     (50,644 )     (2,117,932 )
              (2,740,553 )
HEALTHCARE TECHNOLOGY—(0.8)%                
Simulations Plus, Inc.     (56,172 )     (1,981,186 )
HOME IMPROVEMENT RETAIL—(0.7)%                
Floor & Decor Holdings, Inc., Cl. A     (11,823 )     (974,215 )
Lowe's Cos., Inc.     (3,470 )     (661,278 )
              (1,635,493 )
HOTELS RESORTS & CRUISE LINES—(0.6)%                
Expedia Group, Inc.     (6,383 )     (608,236 )
Soho House & Co., Inc., Cl. A     (154,895 )     (1,115,244 )
              (1,723,480 )
HUMAN RESOURCE & EMPLOYMENT SERVICES—(0.5)%  
Automatic Data Processing, Inc.     (5,820 )     (1,270,040 )
INDUSTRIAL MACHINERY & SUPPLIES & COMPONENTS—(0.4)%  
Desktop Metal, Inc. Cl. A     (96,952 )     (83,999 )

 

- 35 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND 

Schedule of Investments - Securities Sold Short October 31, 2023 (Continued)

 

 

 

COMMON STOCKS—(33.8)% (CONT.)   SHARES     VALUE  
INDUSTRIAL MACHINERY & SUPPLIES & COMPONENTS—(0.4)% (CONT.)  
Lincoln Electric Holdings, Inc.     (3,257 )   $ (569,324 )
Velo3D, Inc.     (435,709 )     (575,136 )
              (1,228,459 )
INTERNET SERVICES & INFRASTRUCTURE—(0.4)%                
Okta, Inc., Cl. A     (8,002 )     (539,415 )
Snowflake, Inc., Cl. A     (3,435 )     (498,521 )
              (1,037,936 )
INVESTMENT BANKING & BROKERAGE—(0.3)%                
Evercore, Inc., Cl. A     (6,416 )     (835,235 )
IT CONSULTING & OTHER SERVICES—(0.7)%                
Accenture PLC, Cl. A     (2,271 )     (674,691 )
International Business Machines Corp.     (6,573 )     (950,719 )
              (1,625,410 )
LEISURE FACILITIES—(0.6)%                
Six Flags Entertainment Corp.     (73,534 )     (1,463,327 )
LIFE SCIENCES TOOLS & SERVICES—(0.3)%                
Waters Corp.     (3,258 )     (777,131 )
MARKET INDICES—(7.2)%                
Direxion NASDAQ-100 Equal Weighted Index Shares     (50,162 )     (3,575,046 )
iShares China Large-Capital ETF     (240,345 )     (6,133,604 )
iShares Russell 2000 Growth ETF     (41,802 )     (8,652,596 )
              (18,361,246 )
MOVIES & ENTERTAINMENT—(0.3)%                
The Walt Disney Co.     (8,419 )     (686,906 )
Vivid Seats, Inc., Cl. A     (13,669 )     (80,374 )
              (767,280 )
PACKAGED FOODS & MEATS—(0.6)%                
The Hershey Co.     (3,594 )     (673,336 )
Utz Brands, Inc.     (56,265 )     (685,870 )
              (1,359,206 )
PAPER & PLASTIC PACKAGING PRODUCTS & MATERIALS—(0.1)%  
Ranpak Holdings Corp., Cl. A     (106,431 )     (336,322 )
PASSENGER AIRLINES—(0.1)%                
Joby Aviation, Inc.     (51,166 )     (269,645 )
PROPERTY & CASUALTY INSURANCE—(0.3)%                
Lemonade, Inc.     (70,473 )     (770,975 )
REAL ESTATE SERVICES—(0.1)%                
Opendoor Technologies, Inc.     (87,366 )     (165,995 )
REGIONAL BANKS—(1.8)%                
Amalgamated Financial Corp.     (91,577 )     (1,670,364 )
Bank OZK     (53,459 )     (1,914,367 )
Stellar Bancorp, Inc.     (36,311 )     (789,401 )
              (4,374,132 )
RESEARCH & CONSULTING SERVICES—(0.4)%                
Franklin Covey Co.     (25,861 )     (1,019,182 )

  

- 36 -

 

THE ALGER FUNDS II | ALGER DYNAMIC OPPORTUNITIES FUND 

Schedule of Investments - Securities Sold Short October 31, 2023 (Continued)

 

 

COMMON STOCKS—(33.8)% (CONT.)   SHARES     VALUE  
RESTAURANTS—(0.4)%                
Sweetgreen, Inc., Cl. A     (100,279 )   $ (1,035,882 )
SEMICONDUCTOR MATERIALS & EQUIPMENT—(0.3)%                
SolarEdge Technologies, Inc.     (9,273 )     (704,284 )
SEMICONDUCTORS—(1.8)%                
Ambarella, Inc.     (4,927 )     (221,666 )
Diodes, Inc.     (12,473 )     (811,743 )
ON Semiconductor Corp.     (10,303 )     (645,380 )
Texas Instruments, Inc.     (14,963 )     (2,124,896 )
Wolfspeed, Inc.     (24,446 )     (827,253 )
              (4,630,938 )
SPECIALIZED CONSUMER SERVICES—(0.1)%                
Service Corp. International     (5,608 )     (305,187 )
STEEL—(0.2)%                
Steel Dynamics, Inc.     (4,646 )     (494,845 )
SYSTEMS SOFTWARE—(0.7)%                
Fortinet, Inc.     (13,458 )     (769,394 )
Oracle Corp.     (9,349 )     (966,687 )
              (1,736,081 )
TRADING COMPANIES & DISTRIBUTORS—(0.5)%                
United Rentals, Inc.     (3,188 )     (1,295,189 )
TRANSACTION & PAYMENT PROCESSING SERVICES—(0.6)%  
Adyen NV     (2,070 )     (1,396,318 )
Affirm Holdings, Inc., Cl. A     (17,896 )     (315,149 )
              (1,711,467 )
TOTAL COMMON STOCKS                
(Proceeds $102,451,245)           $ (85,992,205 )
REAL ESTATE INVESTMENT TRUST—(1.1)%   SHARES     VALUE  
DIVERSIFIED—(0.4)%                
Empire State Realty Trust, Inc., Cl. A     (112,718 )     (911,889 )
OFFICE—0.0%                
Paramount Group, Inc.     (18,319 )     (78,405 )
REAL ESTATE OPERATING COMPANIES—(0.4)%                
Seritage Growth Properties, Cl. A     (155,757 )     (1,127,681 )
RETAIL—0.0%                
CBL & Associates Properties, Inc.     (75 )     (1,555 )
Pennsylvania Real Estate Investment Trust     (402 )     (169 )
              (1,724 )
TELECOM TOWER—(0.3)%                
SBA Communications Corp., Cl. A     (3,705 )     (772,974 )
TOTAL REAL ESTATE INVESTMENT TRUST                
(Proceeds $3,451,595)           $ (2,892,673 )
Total Securities Sold Short                
(Proceeds $105,902,840)           $ (88,884,878 )

 

See Notes to Financial Statements.

 

- 37 -

 

THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND 

Schedule of Investments October 31, 2023

 

 

COMMON STOCKS—98.0%   SHARES     VALUE  
ARGENTINA—3.2%                
BROADLINE RETAIL—3.2%                
MercadoLibre, Inc.*     500     $ 620,370  
(Cost $442,974)                
BRAZIL—14.4%                
DIVERSIFIED BANKS—4.9%                
NU Holdings Ltd., Cl. A*     115,500       947,100  
DIVERSIFIED CAPITAL MARKETS—1.5%                
Banco BTG Pactual SA     50,000       293,601  
FOOTWEAR—2.9%                
Arezzo Industria e Comercio SA     48,300       559,476  
HEALTHCARE FACILITIES—1.7%                
Rede D'Or Sao Luiz SA     77,000       330,250  
OIL & GAS EXPLORATION & PRODUCTION—1.9%                
PRIO SA*     40,000       378,508  
PASSENGER GROUND TRANSPORTATION—1.5%                
Localiza Rent a Car SA     29,000       292,655  
TOTAL BRAZIL                
(Cost $2,708,886)             2,801,590  
CANADA—1.5%                
APPLICATION SOFTWARE—1.5%                
Globant SA*     1,675       285,236  
(Cost $325,416)                
CHINA—22.8%                
APPAREL ACCESSORIES & LUXURY GOODS—2.4%                
ANTA Sports Products Ltd.     42,000       475,011  
AUTOMOBILE MANUFACTURERS—3.2%                
BYD Co., Ltd., Cl. H     20,522       624,092  
BROADLINE RETAIL—6.8%                
Alibaba Group Holding Ltd.#,*     7,200       594,288  
PDD Holdings, Inc.#,*     7,100       720,082  
              1,314,370  
DISTILLERS & VINTNERS—1.8%                
Kweichow Moutai Co., Ltd., Cl. A     1,500       344,308  
EDUCATION SERVICES—2.4%                
New Oriental Education & Technology Group, Inc.#,*     7,100       464,979  
HOTELS RESORTS & CRUISE LINES—3.4%                
Trip.com Group Ltd.#,*     19,700       669,800  
RESTAURANTS—2.8%                
Meituan, Cl. B*     38,300       542,917  
TOTAL CHINA                
(Cost $4,405,365)             4,435,477  
GREECE—7.7%                
INDUSTRIAL CONGLOMERATES—3.4%                
Mytilineos SA     17,700       655,748  

 

- 38 -

 

THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND 

Schedule of Investments October 31, 2023 (Continued)

 

 

COMMON STOCKS—98.0% (CONT.)   SHARES     VALUE  
GREECE—7.7% (CONT.)                
OTHER SPECIALTY RETAIL—4.3%                
JUMBO SA     32,200     $ 847,080  
TOTAL GREECE                
(Cost $1,012,781)             1,502,828  
HONG KONG—1.6%                
FINANCIAL EXCHANGES & DATA—1.6%                
Hong Kong Exchanges & Clearing Ltd.     9,176       321,009  
(Cost $454,546)                
INDIA—15.0%                
DIVERSIFIED BANKS—3.1%                
HDFC Bank Ltd.     34,000       603,135  
ELECTRICAL COMPONENTS & EQUIPMENT—1.7%                
CG Power & Industrial Solutions Ltd.     69,000       323,038  
HOTELS RESORTS & CRUISE LINES—4.3%                
Lemon Tree Hotels Ltd.*     182,000       239,928  
MakeMyTrip Ltd.*     15,100       584,823  
              824,751  
LIFE SCIENCES TOOLS & SERVICES—2.1%                
Syngene International Ltd.     50,000       408,514  
PACKAGED FOODS & MEATS—3.8%                
Patanjali Foods Ltd.     45,478       746,959  
TOTAL INDIA                
(Cost $2,768,125)             2,906,397  
MEXICO—1.6%                
CARGO GROUND TRANSPORTATION—1.6%                
Grupo Traxion SAB de CV, Cl. A*     210,000       310,990  
(Cost $370,752)                
POLAND—1.7%                
FOOD RETAIL—1.7%                
Dino Polska SA*     3,400       322,222  
(Cost $294,641)                
SAUDI ARABIA—5.5%                
ADVERTISING—2.2%                
Arabian Contracting Services Co.     7,800       419,565  
IT CONSULTING & OTHER SERVICES—1.6%                
Elm Co.     1,700       317,852  
LEISURE FACILITIES—1.7%                
Leejam Sports Co. JSC     8,000       327,540  
TOTAL SAUDI ARABIA                
(Cost $927,860)             1,064,957  
SOUTH KOREA—10.0%                
AEROSPACE & DEFENSE—2.4%                
LIG Nex1 Co., Ltd.     7,100       458,564  
ELECTRONIC EQUIPMENT & INSTRUMENTS—2.1%                
Park Systems Corp.     3,900       404,985  

 

- 39 -

 

THE ALGER FUNDS II | ALGER EMERGING MARKETS FUND 

Schedule of Investments October 31, 2023 (Continued)

 

 

COMMON STOCKS—98.0% (CONT.)   SHARES     VALUE  
SOUTH KOREA—10.0% (CONT.)                
HEALTHCARE EQUIPMENT—1.6%                
Ray Co., Ltd.*     21,100     $ 303,956  
SEMICONDUCTOR MATERIALS & EQUIPMENT—2.1%                
Eo Technics Co., Ltd.     4,000       414,216  
SEMICONDUCTORS—1.8%                
LEENO Industrial, Inc.     3,489       356,529  
TOTAL SOUTH KOREA                
(Cost $2,026,123)             1,938,250  
TAIWAN—7.4%     ‌       ‌  
SEMICONDUCTORS—7.4%                
Taiwan Semiconductor Manufacturing Co., Ltd.     57,500       938,368  
Taiwan Semiconductor Manufacturing Co., Ltd.#     5,800       500,598  
TOTAL TAIWAN                
(Cost $1,587,778)             1,438,966  
TURKEY—2.1%     ‌       ‌  
APPAREL ACCESSORIES & LUXURY GOODS—0.8%                
Mavi Giyim Sanayi Ve Ticaret AS, Cl. B(a)     47,000       158,460  
FOOD RETAIL—1.3%                
BIM Birlesik Magazalar AS     25,000       240,377  
TOTAL TURKEY                
(Cost $315,162)             398,837  
UNITED ARAB EMIRATES—3.5%     ‌       ‌  
OIL & GAS DRILLING—1.9%                
ADNOC Drilling Co. PJSC     382,000       378,568  
RESTAURANTS—1.6%                
Americana Restaurants International PLC     300,000       302,205  
TOTAL UNITED ARAB EMIRATES                
(Cost $639,677)             680,773  
TOTAL COMMON STOCKS                
(Cost $18,280,086)             19,027,902  
RIGHTS—0.0%   SHARES     VALUE  
BRAZIL—0.0%     ‌       ‌  
PASSENGER GROUND TRANSPORTATION—0.0%                
Localiza Rent a Car SA*     212       294  
(Cost $0)                
Total Investments                
(Cost $18,280,086)     98.0 %   $ 19,028,196  
Unaffiliated Securities (Cost $18,280,086)             19,028,196  
Other Assets in Excess of Liabilities     2.0 %     391,279  
NET ASSETS     100.0 %   $ 19,419,475  

 


 # American Depositary Receipts.

* Non-income producing security.

(a) Pursuant to Securities and Exchange Commission Rule 144A, this security may be sold prior to its maturity only to qualified institutional buyers. This security represents 0.8% of the net assets of the Fund.

 

See Notes to Financial Statements.

 

- 40 -

 

 

THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND

Schedule of Investments October 31, 2023

 

 

COMMON STOCKS—94.9%   SHARES     VALUE  
AGRICULTURAL & FARM MACHINERY—0.7%     ‌       ‌  
Deere & Co.     1,358     $ 496,159  
APPAREL ACCESSORIES & LUXURY GOODS—0.6%     ‌       ‌  
Lululemon Athletica, Inc.*     1,091       429,287  
APPLICATION SOFTWARE—7.1%     ‌       ‌  
Adobe, Inc.*     5,429       2,888,554  
Autodesk, Inc.*     3,176       627,673  
Intuit, Inc.     1,742       862,203  
Salesforce, Inc.*     4,764       956,754  
              5,335,184  
AUTOMOBILE MANUFACTURERS—1.4%     ‌       ‌  
Tesla, Inc.*     5,019       1,008,016  
AUTOMOTIVE PARTS & EQUIPMENT—1.0%     ‌       ‌  
Aptiv PLC*     5,666       494,075  
Mobileye Global, Inc., Cl. A*     6,622       236,207  
              730,282  
BIOTECHNOLOGY—2.9%     ‌       ‌  
AbbVie, Inc.     3,323       469,141  
Amgen, Inc.     1,415       361,815  
Vaxcyte, Inc.*     4,005       192,641  
Vertex Pharmaceuticals, Inc.*     3,183       1,152,596  
              2,176,193  
BROADLINE RETAIL—7.8%     ‌       ‌  
Amazon.com, Inc.*     35,468       4,720,436  
Etsy, Inc.*     3,344       208,331  
MercadoLibre, Inc.*     736       913,185  
              5,841,952  
BUILDING PRODUCTS—0.4%     ‌       ‌  
Allegion PLC     3,268       321,441  
CARGO GROUND TRANSPORTATION—0.4%     ‌       ‌  
Old Dominion Freight Line, Inc.     761       286,638  
ELECTRIC UTILITIES—0.6%     ‌       ‌  
NextEra Energy, Inc.     7,782       453,691  
ELECTRICAL COMPONENTS & EQUIPMENT—1.7%     ‌       ‌  
Eaton Corp. PLC     2,199       457,194  
Rockwell Automation, Inc.     1,599       420,233  
Vertiv Holdings Co., Cl. A     9,544       374,793  
              1,252,220  
ELECTRONIC EQUIPMENT & INSTRUMENTS—0.4%     ‌       ‌  
Trimble, Inc.*     5,902       278,161  
ELECTRONIC MANUFACTURING SERVICES—1.8%     ‌       ‌  
Flex Ltd.*     52,614       1,353,232  
ENVIRONMENTAL & FACILITIES SERVICES—0.6%     ‌       ‌  
Tetra Tech, Inc.     2,866       432,508  
FINANCIAL EXCHANGES & DATA—1.7%     ‌       ‌  
S&P Global, Inc.     3,601       1,257,865  
- 41 - 

 

THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND

Schedule of Investments October 31, 2023 (Continued)

 

 

COMMON STOCKS—94.9% (CONT.)   SHARES     VALUE  
FOOTWEAR—1.2%     ‌       ‌  
NIKE, Inc., Cl. B     6,361     $ 653,720  
On Holding AG, Cl. A*     8,450       216,911  
              870,631  
HEALTHCARE DISTRIBUTORS—1.3%     ‌       ‌  
McKesson Corp.     2,176       990,863  
HEALTHCARE EQUIPMENT—0.3%     ‌       ‌  
Dexcom, Inc.*     2,700       239,841  
HOME IMPROVEMENT RETAIL—2.2%     ‌       ‌  
The Home Depot, Inc.     5,647       1,607,644  
HOUSEHOLD PRODUCTS—1.2%     ‌       ‌  
The Procter & Gamble Co.     6,221       933,337  
HUMAN RESOURCE & EMPLOYMENT SERVICES—0.4%     ‌       ‌  
Paycom Software, Inc.     1,172       287,105  
INDUSTRIAL CONGLOMERATES—1.0%     ‌       ‌  
Honeywell International, Inc.     4,177       765,477  
INDUSTRIAL GASES—1.3%     ‌       ‌  
Air Products & Chemicals, Inc.     3,376       953,517  
INDUSTRIAL MACHINERY & SUPPLIES & COMPONENTS—0.6%     ‌       ‌  
Xylem, Inc.     4,408       412,324  
INTERACTIVE MEDIA & SERVICES—5.8%     ‌       ‌  
Alphabet, Inc., Cl. A*     16,160       2,005,133  
Alphabet, Inc., Cl. C*     13,940       1,746,682  
Pinterest, Inc., Cl. A*     19,175       572,949  
              4,324,764  
INVESTMENT BANKING & BROKERAGE—1.1%     ‌       ‌  
Morgan Stanley     11,732       830,860  
IT CONSULTING & OTHER SERVICES—0.8%     ‌       ‌  
Accenture PLC, Cl. A     1,947       578,434  
LEISURE FACILITIES—0.5%     ‌       ‌  
Vail Resorts, Inc.     1,843       391,177  
LIFE SCIENCES TOOLS & SERVICES—1.9%     ‌       ‌  
Agilent Technologies, Inc.     4,610       476,536  
Danaher Corp.     4,742       910,559  
              1,387,095  
MANAGED HEALTHCARE—2.7%     ‌       ‌  
Humana, Inc.     1,759       921,171  
UnitedHealth Group, Inc.     2,043       1,094,149  
              2,015,320  
METAL, GLASS & PLASTIC CONTAINERS—0.6%     ‌       ‌  
Ball Corp.     9,873       475,385  
PHARMACEUTICALS—2.7%     ‌       ‌  
Bristol-Myers Squibb Co.     8,904       458,823  
Merck & Co., Inc.     8,311       853,540  
Zoetis, Inc., Cl. A     4,472       702,104  
              2,014,467  
RAIL TRANSPORTATION—0.8%     ‌       ‌  
Union Pacific Corp.     2,735       567,813  
- 42 - 

 

THE ALGER FUNDS II | ALGER RESPONSIBLE INVESTING FUND

Schedule of Investments October 31, 2023 (Continued)

 

 

COMMON STOCKS—94.9% (CONT.)   SHARES     VALUE  
RESTAURANTS—1.0%     ‌       ‌  
Starbucks Corp.     7,708     $ 710,986  
SEMICONDUCTOR MATERIALS & EQUIPMENT—3.5%     ‌       ‌  
ASML Holding NV     1,874       1,122,170  
Lam Research Corp.     2,569       1,511,137  
              2,633,307  
SEMICONDUCTORS—7.6%     ‌       ‌  
First Solar, Inc.*     2,848       405,698  
Marvell Technology, Inc.     10,751       507,662  
NVIDIA Corp.     10,375       4,230,925  
Taiwan Semiconductor Manufacturing Co., Ltd.#     6,081       524,851  
              5,669,136  
SOFT DRINKS & NON-ALCOHOLIC BEVERAGES—1.2%     ‌       ‌  
PepsiCo, Inc.     5,552       906,531  
SYSTEMS SOFTWARE—14.0%     ‌       ‌  
Microsoft Corp.     29,986       10,138,567  
Oracle Corp.     3,338       345,149  
              10,483,716  
TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—7.4%     ‌       ‌  
Apple, Inc.     32,436       5,539,096  
TRANSACTION & PAYMENT PROCESSING SERVICES—4.7%     ‌       ‌  
Visa, Inc., Cl. A     15,054       3,539,195  
TOTAL COMMON STOCKS            
 
(Cost $28,446,684)             70,780,850  
REAL ESTATE INVESTMENT TRUST—2.3%   SHARES     VALUE  
DATA CENTER—1.3%     ‌       ‌  
Equinix, Inc.     1,382       1,008,362  
INDUSTRIAL—1.0%     ‌       ‌  
Prologis, Inc.     7,288       734,266  
TOTAL REAL ESTATE INVESTMENT TRUST            
 
(Cost $1,204,702)             1,742,628  
Total Investments                
(Cost $29,651,386)     97.2 %   $ 72,523,478  
Unaffiliated Securities (Cost $29,651,386)             72,523,478  
Other Assets in Excess of Liabilities     2.8 %     2,110,613  
NET ASSETS     100.0 %   $ 74,634,091  

 


 # American Depositary Receipts.

* Non-income producing security.

 

See Notes to Financial Statements.

- 43 - 

 

THE ALGER FUNDS II

Statements of Assets and Liabilities October 31, 2023

 

 

          Alger Dynamic  
    Alger Spectra Fund     Opportunities Fund  
                 
ASSETS:                
Investments in unaffiliated securities, at value (Identified cost below)* see accompanying schedules of investments   $ 2,862,069,029     $ 251,904,386  
Investments in affiliated securities, at value (Identified cost below)** see accompanying schedules of investments     10,980,063       1,358,121  
Cash and cash equivalents     43,660       14,827,087  
Collateral held for short sales     119,767,641       70,301,198  
Collateral pledged for OTC contracts for difference     —       3,880,432  
Receivable for investment securities sold     22,763,212       20,436,353  
Receivable for shares of beneficial interest sold     575,773       59,827  
Receivable for interfund loans     —       1,918,006  
Dividends and interest receivable     585,888       35,974  
Receivable from Investment Manager     85,138       —  
Prepaid expenses     292,441       65,326  
Total Assets     3,017,162,845       364,786,710  
                 
LIABILITIES:                
Securities sold short, at value ‡     215,310,298       88,884,878  
OTC contracts for difference, at value     —       439,597  
Interest payable     767,354       60,105  
Written options outstanding §     —       81,765  
Payable for investment securities purchased     15,854,492       11,031,310  
Payable for shares of beneficial interest redeemed     4,104,466       9,044,651  
Due to broker     83,041,136       —  
Accrued investment advisory fees     2,082,023       303,141  
Accrued distribution fees     389,692       17,804  
Accrued shareholder administrative fees     30,654       2,828  
Accrued administrative fees     66,697       6,947  
Accrued transfer agent fees     622,210       26,349  
Dividends payable     248,921       40,975  
Accrued printing fees     144,483       25,243  
Accrued fund accounting fees     99,069       4,926  
Accrued professional fees     71,706       39,913  
Accrued registration fees     53,000       —  
Accrued trustee fees     16,898       3,118  
Accrued custodian fees     16,456       4,654  
Accrued other expenses     4,502       2,267  
Total Liabilities     322,924,057       110,020,471  
NET ASSETS   $ 2,694,238,788     $ 254,766,239  
See Notes to Financial Statements.                
- 44 - 

 

THE ALGER FUNDS II

Statements of Assets and Liabilities October 31, 2023 (Continued)

 

 

          Alger Dynamic  
    Alger Spectra Fund     Opportunities Fund  
                 
NET ASSETS CONSIST OF:                
Paid in capital (par value of $.001 per share)     1,970,406,101       324,023,480  
Distributable earnings (Distributions in excess of earnings)     723,832,687       (69,257,241 )
NET ASSETS   $ 2,694,238,788     $ 254,766,239  
* Identified cost   $ 1,976,743,857 (a)   $ 247,353,836 (b)
** Identified cost   $ 25,029,054 (a)   $ 1,661,381 (b)
‡ Proceeds received on short sales   $ 234,084,010     $ 105,902,840  
§ Written options premiums received   $ —     $ 143,599  
                 
NET ASSETS BY CLASS:                
Class A   $ 923,331,742     $ 37,892,828  
Class C   $ 175,043,192     $ 9,029,877  
Class I   $ 107,307,923     $ —  
Class Y   $ 46,213,788     $ —  
Class Z   $ 1,442,342,143     $ 207,843,534  
                 
SHARES OF BENEFICIAL INTEREST OUTSTANDING — NOTE 6:                
Class A     52,268,830       2,475,171  
Class C     12,367,229       666,440  
Class I     5,963,673       —  
Class Y     2,438,705       —  
Class Z     76,362,769       13,001,576  
                 
NET ASSET VALUE PER SHARE:                
Class A — Net Asset Value Per Share Class A   $ 17.67     $ 15.31  
Class A — Offering Price Per Share                
(includes a 5.25% sales charge)   $ 18.64     $ 16.16  
Class C — Net Asset Value Per Share Class C   $ 14.15     $ 13.55  
Class I — Net Asset Value Per Share Class I   $ 17.99     $ —  
Class Y — Net Asset Value Per Share Class Y   $ 18.95     $ —  
Class Z — Net Asset Value Per Share Class Z   $ 18.89     $ 15.99  

See Notes to Financial Statements.

 


 (a) At October 31, 2023, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $2,085,136,250, amounted to $787,912,842 which consisted of aggregate gross unrealized appreciation of $952,646,491 and aggregate gross unrealized depreciation of $164,733,649.

(b) At October 31, 2023, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $161,400,024, amounted to $2,977,605 which consisted of aggregate gross unrealized appreciation of $42,505,297 and aggregate gross unrealized depreciation of $39,527,692.
- 45 - 

 

THE ALGER FUNDS II

Statements of Assets and Liabilities October 31, 2023 (Continued)

 

 

    Alger Emerging     Alger Responsible  
    Markets Fund     Investing Fund  
                 
ASSETS:                
Investments in unaffiliated securities, at value (Identified cost below)* see accompanying schedules of investments   $ 19,028,196     $ 72,523,478  
Cash and cash equivalents     664,337       1,899,945  
Foreign cash †     4,222       —  
Receivable for investment securities sold     —       365,598  
Receivable for shares of beneficial interest sold     —       75,031  
Dividends and interest receivable     1,988       42,146  
Foreign capital gain tax receivable     23,146       —  
Receivable from Investment Manager     13,661       —  
Prepaid expenses     87,279       48,530  
Total Assets     19,822,829       74,954,728  
                 
LIABILITIES:                
Payable for investment securities purchased     294,198       185,129  
Payable for shares of beneficial interest redeemed     21,688       11,271  
Foreign capital gain tax payable     1,950       —  
Due to investment adviser     —       54  
Accrued investment advisory fees     13,421       47,134  
Accrued distribution fees     1,997       11,620  
Accrued shareholder administrative fees     204       906  
Accrued administrative fees     492       1,826  
Accrued professional fees     38,902       27,031  
Accrued printing fees     6,207       3,340  
Accrued fund accounting fees     6,152       10,580  
Accrued transfer agent fees     4,768       15,878  
Accrued custodian fees     4,430       1,375  
Accrued trustee fees     154       285  
Accrued other expenses     8,791       4,208  
Total Liabilities     403,354       320,637  
NET ASSETS   $ 19,419,475     $ 74,634,091  
                 
NET ASSETS CONSIST OF:                
Paid in capital (par value of $.001 per share)     33,388,651       29,660,505  
Distributable earnings (Distributions in excess of earnings)     (13,969,176 )     44,973,586  
NET ASSETS   $ 19,419,475     $ 74,634,091  
* Identified cost   $ 18,280,086 (a)   $ 29,651,386 (b)
† Cost of foreign cash   $ 4,257     $ —  

See Notes to Financial Statements.

- 46 - 

 

THE ALGER FUNDS II

Statements of Assets and Liabilities October 31, 2023 (Continued)

 

 

    Alger Emerging     Alger Responsible  
    Markets Fund     Investing Fund  
                 
NET ASSETS BY CLASS:                
Class A   $ 3,154,220     $ 39,957,299  
Class C   $ 1,145,321     $ 1,867,806  
Class I   $ 1,047,947     $ 4,464,217  
Class Z   $ 14,071,987     $ 28,344,769  
                 
SHARES OF BENEFICIAL INTEREST OUTSTANDING — NOTE 6:                
Class A     352,770       2,960,226  
Class C     137,686       165,168  
Class I     118,211       331,601  
Class Z     1,545,249       2,028,065  
                 
NET ASSET VALUE PER SHARE:                
Class A — Net Asset Value Per Share Class A   $ 8.94     $ 13.50  
Class A — Offering Price Per Share                
(includes a 5.25% sales charge)   $ 9.44     $ 14.25  
Class C — Net Asset Value Per Share Class C   $ 8.32     $ 11.31  
Class I — Net Asset Value Per Share Class I   $ 8.87     $ 13.46  
Class Z — Net Asset Value Per Share Class Z   $ 9.11     $ 13.98  

See Notes to Financial Statements.

 


 (a) At October 31, 2023, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $18,487,918, amounted to $540,278 which consisted of aggregate gross unrealized appreciation of $2,307,420 and aggregate gross unrealized depreciation of $1,767,142.

(b) At October 31, 2023, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $29,716,047, amounted to $42,807,431 which consisted of aggregate gross unrealized appreciation of $43,936,092 and aggregate gross unrealized depreciation of $1,128,661.
- 47 - 

 

THE ALGER FUNDS II

Statements of Operations for the year ended October 31, 2023

 

 

          Alger Dynamic  
    Alger Spectra Fund     Opportunities Fund  
                 
INCOME:                
Dividends (net of foreign withholding taxes*)   $ 20,485,968     $ 1,249,640  
Interest     203,854       2,401,239  
Borrowing income on short sales - Note 2(f)     —​       1,668,424​  
Total Income     20,689,822​       5,319,303  
                 
EXPENSES:                
Investment advisory fees — Note 3(a)     25,446,510​       4,764,674​  
Distribution fees — Note 3(c)                
Class A     2,341,123​       ​134,173  
Class C     2,058,464​       ​113,795  
Class I     327,172​       —  
Shareholder administrative fees — Note 3(f)     373,536​       ​43,934  
Administration fees — Note 3(b)     823,039​       ​109,191  
Borrowing fees on short sales - Note 2(f)     3,674,281       —  
Dividends on securities sold short - Note 2(f)     2,746,995       1,427,208  
Transfer agent fees — Note 3(f)     1,377,769​       ​99,175  
Fund accounting fees     430,830​       ​97,318  
Printing fees     255,209​       ​50,954  
Registration fees     189,870​       ​81,957  
Professional fees     186,180​       ​69,132  
Trustee fees — Note 3(g)     155,444​       ​22,908  
Custodian fees     112,573​       ​43,511  
Interest expenses     11,383​       ​1,038  
Other expenses     464,132​       ​76,918  
Total Expenses     40,974,510​       7,135,886  
Less, expense reimbursements/waivers — Note 3(a)     (​258,643)       —​  
Net Expenses     40,715,867​       7,135,886​  
NET INVESTMENT LOSS     (​20,026,045)       (​1,816,583)  

See Notes to Financial Statements.

- 48 - 

 

THE ALGER FUNDS II

Statements of Operations for the year ended October 31, 2023 (Continued)

 

 

    Alger Spectra Fund     Alger Dynamic
 Opportunities Fund		  
             
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS, CONTRACTS FOR DIFFERENCE AND FOREIGN CURRENCY:  
Net realized (loss) on unaffiliated investments and purchased options   (​28,047,082)     (​23,455,187)  
Net realized (loss) on foreign currency transactions   (​35,895)     (​32,523)  
Net realized gain on short sales   ​15,323,069     ​40,720,561  
Net realized (loss) on OTC contracts for difference   ​—     (​3,850,414)  
Net realized gain on written options   ​—     ​350,570  
Net change in unrealized appreciation on unaffiliated investments and purchased options   ​460,905,128     ​13,705,673  
Net change in unrealized (depreciation) on affiliated investments   (​1,670,979)     (​206,547)  
Net change in unrealized appreciation on foreign currency   ​20,856     ​2,316  
Net change in unrealized (depreciation) on short sales   (​25,333,057)     (​41,184,037)  
Net change in unrealized appreciation on OTC contracts for difference   ​—     ​984,129  
Net change in unrealized appreciation on written options   ​—     ​61,834  
Net realized and unrealized gain (loss) on investments, options, contracts for difference and foreign currency   421,162,040​     (​12,903,625)  
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS   $ 401,135,995     $ (14,720,208 )
* Foreign withholding taxes   $ 268,994     $ 29,346  

See Notes to Financial Statements.

- 49 - 

 

THE ALGER FUNDS II

Statements of Operations for the year ended October 31, 2023 (Continued)

 

 

    Alger Emerging     Alger Responsible  
    Markets Fund     Investing Fund  
                 
INCOME:                
Dividends (net of foreign withholding taxes*)   $ 335,518     $ 668,315  
Interest     20,909​       47,405​  
Total Income     356,427​       715,720​  
                 
EXPENSES:                
Investment advisory fees — Note 3(a)     182,199​       509,912​  
Distribution fees — Note 3(c)                
Class A     ​8,678       ​95,730  
Class C     ​13,818       ​24,342  
Class I     ​3,265       ​12,041  
Shareholder administrative fees — Note 3(f)     ​2,745       ​9,829  
Administration fees — Note 3(b)     ​6,681       ​19,750  
Fund accounting fees     ​58,219       ​62,723  
Registration fees     ​52,620       ​49,445  
Professional fees     ​48,609       ​41,067  
Custodian fees     ​33,355       ​7,611  
Transfer agent fees — Note 3(f)     ​11,764       ​41,183  
Printing fees     ​9,347       ​4,310  
Interest expenses     ​3,403       ​741  
Trustee fees — Note 3(g)     ​1,322       ​3,594  
Other expenses     ​16,332       ​12,011  
Total Expenses     452,357​       894,289​  
Less, expense reimbursements/waivers — Note 3(a)     (​163,745)       (​14,461)  
Net Expenses     288,612​       879,828​  
NET INVESTMENT INCOME (LOSS)     67,815​       (​164,108)  
                 
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FORWARD FOREIGN CURRENCY CONTRACTS AND FOREIGN CURRENCY:                
Net realized gain (loss) on unaffiliated investments     (​3,787,771)       2,609,816​  
Net realized (loss) on forward foreign currency contracts     (​1,862)       —​  
Net realized (loss) on foreign currency transactions     (​46,863)       —  
Net change in unrealized appreciation on unaffiliated investments     5,726,761**​       ​8,705,822  
Net change in unrealized (depreciation) on foreign currency     (​287)       ​—  
Net realized and unrealized gain on investments, forward foreign currency contracts and foreign currency     1,889,978​       11,315,638​  
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS   $ 1,957,793     $ 11,151,530  
* Foreign withholding taxes   $ 33,087     $ 4,062  

See Notes to Financial Statements.

 

** Includes net change in unrealized depreciation of foreign capital gains taxes of $25,534.

- 50 - 

 

THE ALGER FUNDS II

Statements of Changes in Net Assets

 

 

    Alger Spectra Fund  
    For the
Year Ended
October 31, 2023		     For the
Year Ended
October 31, 2022		  
             
Net investment loss   $ (20,026,045 )   $ (37,446,130 )
Net realized gain (loss) on investments and foreign currency     (​12,759,908)       47,385,420​  
Net change in unrealized appreciation (depreciation) on investments and foreign currency     433,921,948​       (​3,177,317,325)  
Net increase (decrease) in net assets resulting from operations     401,135,995​       (​3,167,378,035)  
                 
Dividends and distributions to shareholders:                
Class A     (​22,708,610)       (​471,605,982)  
Class C     (​6,836,181)       (​166,546,263)  
Class I     (​3,528,271)       (​135,403,187)  
Class Y     (​3,105,455)       (​57,225,985)  
Class Z     (​40,261,675)       (​1,290,263,098)  
Total dividends and distributions to shareholders     (​76,440,192)       (​2,121,044,515)  
                 
Increase (decrease) from shares of beneficial interest transactions:                
Class A     (​134,937,359)       ​175,096,409  
Class C     (​88,331,735)       (​24,940,706)  
Class I     (​63,504,225)       ​55,874,506  
Class Y     (​114,698,897)       ​47,305,965  
Class Z     (​716,897,345)       (​472,518,698)  
Net decrease from shares of beneficial interest transactions — Note 6     (​1,118,369,561)       (​219,182,524)  
Total decrease     (​793,673,758)       (​5,507,605,074)  
                 
Net Assets:                
Beginning of period     3,487,912,546​       8,995,517,620​  
END OF PERIOD   $ 2,694,238,788     $ 3,487,912,546  
See Notes to Financial Statements.                
- 51 - 

 

THE ALGER FUNDS II

Statements of Changes in Net Assets (Continued)

 

 

    Alger Dynamic Opportunities Fund  
    For the
Year Ended
October 31, 2023		     For the
Year Ended
October 31, 2022		  
             
Net investment loss   $ (1,816,583 )   $ (8,273,537 )
Net realized gain (loss) on investments, options, OTC contracts for difference and foreign currency     13,733,007​       (87,023,391 )
Net change in unrealized depreciation on investments, options, contracts for difference and foreign currency     (​26,636,632)       (119,596,493 )
Net decrease in net assets resulting from operations     (​14,720,208)       (​214,893,421)  
                 
Dividends and distributions to shareholders:                
Class A     —​       (​5,086,108)  
Class C     —​       (​1,020,513)  
Class Z     —​       (​40,837,532)  
Total dividends and distributions to shareholders     —​       (​46,944,153)  
                 
Increase (decrease) from shares of beneficial interest transactions:                
Class A     (​19,746,965)       (​15,205,189)  
Class C     (​2,813,306)       (​168,980)  
Class Z     (​183,868,711)       (​220,941,812)  
Net decrease from shares of beneficial interest transactions — Note 6     (​206,428,982)       (​236,315,981)  
Total decrease     (​221,149,190)       (​498,153,555)  
                 
Net Assets:                
Beginning of period     475,915,429​       974,068,984​  
END OF PERIOD   $ 254,766,239     $ 475,915,429  

See Notes to Financial Statements.

- 52 - 

 

THE ALGER FUNDS II

Statements of Changes in Net Assets (Continued)

 

 

    Alger Emerging Markets Fund  
    For the
Year Ended
October 31, 2023		     For the
Year Ended
October 31, 2022		  
                 
Net investment income   $ 67,815     $ 36,230  
Net realized loss on investments, forward foreign currency contracts and foreign currency     (​3,836,496)       (​10,481,588)  
Net change in unrealized appreciation (depreciation) on investments and foreign currency     5,726,474​       (​9,773,753)  
Net increase (decrease) in net assets resulting from operations     1,957,793​       (​20,219,111)  
                 
Dividends and distributions to shareholders:                
Class A     —​       (​134,010)  
Class C     —​       (​60,086)  
Class I     —​       (​42,908)  
Class Z     —​       (​900,578)  
Total dividends and distributions to shareholders     —​       (​1,137,582)  
                 
Increase (decrease) from shares of beneficial interest transactions:                
Class A     (​430,964)       (​260,238)  
Class C     (​310,806)       (​488,852)  
Class I     (​597,843)       ​759,640  
Class Z     (​7,679,364)       ​1,155,063  
Net increase (decrease) from shares of beneficial interest transactions — Note 6     (​9,018,977)       1,165,613​  
Total decrease     (​7,061,184)       (​20,191,080)  
                 
Net Assets:                
Beginning of period     26,480,659​       ​46,671,739  
END OF PERIOD   $ 19,419,475     $ 26,480,659  

See Notes to Financial Statements.

- 53 - 

 

THE ALGER FUNDS II

Statements of Changes in Net Assets (Continued)

 

 

    Alger Responsible Investing Fund  
    For the
Year Ended
October 31, 2023		     For the
Year Ended
October 31, 2022		  
                 
Net investment loss   $ (164,108 )   $ (340,790 )
Net realized gain on investments     2,609,816​       510,406​  
Net change in unrealized appreciation (depreciation) on investments     8,705,822​       (​28,786,806)  
Net increase (decrease) in net assets resulting from operations     11,151,530​       (​28,617,190)  
                 
Dividends and distributions to shareholders:                
Class A     (​273,275)       (​3,978,674)  
Class C     (​23,274)       (​448,156)  
Class I     (​35,409)       (​533,434)  
Class Z     (​177,792)       (​2,792,226)  
Total dividends and distributions to shareholders     (​509,750)       (​7,752,490)  
                 
Increase (decrease) from shares of beneficial interest transactions:                
Class A     (​961,562)       ​2,524,957  
Class C     (​1,225,664)       (​654,482)  
Class I     (​836,204)       ​141,499  
Class Z     1,530,936​       ​120,910  
Net increase (decrease) from shares of beneficial interest transactions — Note 6     (​1,492,494)       2,132,884​  
Total increase (decrease)     9,149,286​       (​34,236,796)  
                 
Net Assets:                
Beginning of period     65,484,805​       ​99,721,601  
END OF PERIOD   $ 74,634,091     $ 65,484,805  

See Notes to Financial Statements.

- 54 - 

 

THE ALGER FUNDS II

Financial Highlights for a share outstanding throughout the period

 

 

Alger Spectra Fund               Class A              
    Year ended
10/31/2023		     Year ended
10/31/2022		     Year ended
10/31/2021		     Year ended
10/31/2020		     Year ended
10/31/2019		  
Net asset value, beginning of period   $ 15.83     $ 35.36     $ 28.24     $ 22.51     $ 21.94  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.14 )     (0.17 )     (0.31 )     (0.16 )     (0.07 )
Net realized and unrealized gain (loss) on investments     2.37       (10.93 )     10.14       7.51       2.84  
Total from investment operations     2.23       (11.10 )     9.83       7.35       2.77  
Distributions from net realized gains     (0.39 )     (8.43 )     (2.71 )     (1.62 )     (2.20 )
Net asset value, end of period   $ 17.67     $ 15.83     $ 35.36     $ 28.24     $ 22.51  
Total return(ii)     14.56 %     (39.87 )%     36.80 %     34.65 %     14.82 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000's omitted)   $ 923,332     $ 957,092     $ 1,985,099     $ 1,568,743     $ 1,222,285  
Ratio of gross expenses to average net assets     1.50 %(iii)   1.51 %(iv)   1.39 %(v)   1.40 %(vi)   1.31 %(vii)
Ratio of net expenses to average net assets     1.50 %     1.51 %     1.39 %     1.40 %     1.31 %
Ratio of net investment loss to average net assets     (0.83 )%     (0.82 )%     (0.98 )%     (0.66 )%     (0.35 )%
Portfolio turnover rate     59.63 %     216.84 %     108.48 %     71.81 %     86.54 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.

(iii) Includes 0.22% related to dividend expense on short positions and interest expense for the period ended 10/31/23.

(iv) Includes 0.34% related to dividend expense on short positions and interest expense for the period ended 10/31/22.

(v) Includes 0.30% related to dividend expense on short positions and interest expense for the period ended 10/31/21.

(vi) Includes 0.25% related to dividend expense on short positions and interest expense for the period ended 10/31/20.

(vii) Includes 0.12% related to dividend expense on short positions and interest expense for the period ended 10/31/19.
- 55 - 

 

THE ALGER FUNDS II

Financial Highlights for a share outstanding throughout the period

 

 

Alger Spectra Fund   Class C
    Year ended
10/31/2023		   Year ended
10/31/2022		   Year ended
10/31/2021		   Year ended
10/31/2020		   Year ended
10/31/2019
Net asset value, beginning of period   $ 12.86     $ 30.60     $ 24.94     $ 20.20     $ 20.06  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.22 )     (0.27 )     (0.47 )     (0.30 )     (0.21 )
Net realized and unrealized gain (loss) on investments     1.90       (9.04 )     8.84       6.66       2.55  
Total from investment operations     1.68       (9.31 )     8.37       6.36       2.34  
Distributions from net realized gains     (0.39 )     (8.43 )     (2.71 )     (1.62 )     (2.20 )
Net asset value, end of period   $ 14.15     $ 12.86     $ 30.60     $ 24.94     $ 20.20  
Total return(ii)     13.61 %     (40.30 )%     35.79 %     33.60 %     13.97 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 175,043     $ 243,462     $ 656,004     $ 651,194     $ 681,792  
Ratio of gross expenses to average net assets     2.29 %(iii)     2.27 %(iv)     2.16 %(v)     2.15 %(vi)     2.07 %(vii)
Ratio of net expenses to average net assets     2.29 %     2.27 %     2.16 %     2.15 %     2.07 %
Ratio of net investment loss to average net assets     (1.60 )%     (1.59 )%     (1.73 )%     (1.39 )%     (1.10 )%
Portfolio turnover rate     59.63 %     216.84 %     108.48 %     71.81 %     86.54 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.

(iii) Includes 0.21% related to dividend expense on short positions and interest expense for the period ended 10/31/23.

(iv) Includes 0.34% related to dividend expense on short positions and interest expense for the period ended 10/31/22.

(v) Includes 0.30% related to dividend expense on short positions and interest expense for the period ended 10/31/21.

(vi) Includes 0.25% related to dividend expense on short positions and interest expense for the period ended 10/31/20.

(vii) Includes 0.12% related to dividend expense on short positions and interest expense for the period ended 10/31/19.
- 56 -

THE ALGER FUNDS II

Financial Highlights for a share outstanding throughout the period

 

 

Alger Spectra Fund   Class I
    Year ended
10/31/2023		   Year ended
10/31/2022		   Year ended
10/31/2021		   Year ended
10/31/2020		   Year ended
10/31/2019
Net asset value, beginning of period   $ 16.11     $ 35.83     $ 28.59     $ 22.77     $ 22.16  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.14 )     (0.17 )     (0.30 )     (0.15 )     (0.07 )
Net realized and unrealized gain (loss) on investments     2.41       (11.12 )     10.25       7.59       2.88  
Total from investment operations     2.27       (11.29 )     9.95       7.44       2.81  
Distributions from net realized gains     (0.39 )     (8.43 )     (2.71 )     (1.62 )     (2.20 )
Net asset value, end of period   $ 17.99     $ 16.11     $ 35.83     $ 28.59     $ 22.77  
Total return(ii)     14.55 %     (39.84 )%     36.82 %     34.61 %     14.85 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 107,308     $ 156,048     $ 378,367     $ 422,807     $ 656,990  
Ratio of gross expenses to average net assets     1.50 %(iii)     1.49 %(iv)     1.40 %(v)     1.39 %(vi)     1.30 %(vii)
Ratio of net expenses to average net assets     1.50 %     1.49 %     1.40 %     1.39 %     1.30 %
Ratio of net investment loss to average net assets     (0.80 )%     (0.83 )%     (0.96 )%     (0.61 )%     (0.33 )%
Portfolio turnover rate     59.63 %     216.84 %     108.48 %     71.81 %     86.54 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.

(iii) Includes 0.21% related to dividend expense on short positions and interest expense for the period ended 10/31/23.

(iv) Includes 0.33% related to dividend expense on short positions and interest expense for the period ended 10/31/22.

(v) Includes 0.30% related to dividend expense on short positions and interest expense for the period ended 10/31/21.

(vi) Includes 0.25% related to dividend expense on short positions and interest expense for the period ended 10/31/20.

(vii) Includes 0.12% related to dividend expense on short positions and interest expense for the period ended 10/31/19.
- 57 -

THE ALGER FUNDS II

Financial Highlights for a share outstanding throughout the period

 

 

Alger Spectra Fund   Class Y
    Year ended
10/31/2023		   Year ended
10/31/2022		   Year ended
10/31/2021		   Year ended
10/31/2020		   From 12/3/2018
(commencement
of operations) to
10/31/2019(i)
Net asset value, beginning of period   $ 16.88     $ 36.99     $ 29.36     $ 23.26     $ 23.29  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(ii)     (0.05 )     (0.09 )     (0.23 )     (0.11 )     (0.03 )
Net realized and unrealized gain (loss) on investments     2.51       (11.59 )     10.57       7.83       2.20  
Total from investment operations     2.46       (11.68 )     10.34       7.72       2.17  
Distributions from net realized gains     (0.39 )     (8.43 )     (2.71 )     (1.62 )     (2.20 )
Net asset value, end of period   $ 18.95     $ 16.88     $ 36.99     $ 29.36     $ 23.26  
Total return(iii)     15.02 %     (39.60 )%     37.21 %     35.11 %     11.43 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 46,214     $ 144,286     $ 252,167     $ 121,397     $ 43,750  
Ratio of gross expenses to average net assets     1.18 %(iv)     1.20 %(v)     1.09 %(vi)     1.09 %(vii)     1.03 %(viii)
Ratio of expense reimbursements to average net assets     (0.12 )%     (0.07 )%     —       (0.04 )%     (0.09 )%
Ratio of net expenses to average net assets     1.06 %     1.13 %     1.09 %     1.05 %     0.94 %
Ratio of net investment loss to average net assets     (0.31 )%     (0.43 )%     (0.70 )%     (0.40 )%     (0.14 )%
Portfolio turnover rate     59.63 %     216.84 %     108.48 %     71.81 %     86.54 %

See Notes to Financial Statements.

 


 (i) Ratios have been annualized; total return has not been annualized; portfolio turnover is for the twelve months then ended.

(ii) Amount was computed based on average shares outstanding during the period.

(iii) Does not reflect the effect of sales charges, if applicable.

(iv) Includes 0.21% related to dividend expense on short positions and interest expense for the period ended 10/31/23.

(v) Includes 0.34% related to dividend expense on short positions and interest expense for the period ended 10/31/22.

(vi) Includes 0.31% related to dividend expense on short positions and interest expense for the period ended 10/31/21.

(vii) Includes 0.26% related to dividend expense on short positions and interest expense for the period ended 10/31/20.

(viii) Includes 0.17% related to dividend expense on short positions and interest expense for the period ended 10/31/19.
- 58 -

THE ALGER FUNDS II

Financial Highlights for a share outstanding throughout the period

 

 

Alger Spectra Fund   Class Z
    Year ended
10/31/2023		   Year ended
10/31/2022		   Year ended
10/31/2021		   Year ended
10/31/2020		   Year ended
10/31/2019
Net asset value, beginning of period   $ 16.84     $ 36.95     $ 29.32     $ 23.24     $ 22.51  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.08 )     (0.12 )     (0.22 )     (0.09 )     (0.01 )
Net realized and unrealized gain (loss) on investments     2.52       (11.56 )     10.56       7.79       2.94  
Total from investment operations     2.44       (11.68 )     10.34       7.70       2.93  
Distributions from net realized gains     (0.39 )     (8.43 )     (2.71 )     (1.62 )     (2.20 )
Net asset value, end of period   $ 18.89     $ 16.84     $ 36.95     $ 29.32     $ 23.24  
Total return(ii)     14.94 %     (39.65 )%     37.22 %     35.10 %     15.18 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 1,442,342     $ 1,987,024     $ 5,723,880     $ 4,376,561     $ 3,482,596  
Ratio of gross expenses to average net assets     1.17 %(iii)     1.19 %(iv)     1.09 %(v)     1.09 %(vi)     0.99 %(vii)
Ratio of expense reimbursements to average net assets     (0.01 )%     —       —       —       —  
Ratio of net expenses to average net assets     1.16 %     1.19 %     1.09 %     1.09 %     0.99 %
Ratio of net investment loss to average net assets     (0.47 )%     (0.53 )%     (0.67 )%     (0.35 )%     (0.03 )%
Portfolio turnover rate     59.63 %     216.84 %     108.48 %     71.81 %     86.54 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.

(iii) Includes 0.21% related to dividend expense on short positions and interest expense for the period ended 10/31/23.

(iv) Includes 0.34% related to dividend expense on short positions and interest expense for the period ended 10/31/22.

(v) Includes 0.31% related to dividend expense on short positions and interest expense for the period ended 10/31/21.

(vi) Includes 0.25% related to dividend expense on short positions and interest expense for the period ended 10/31/20.

(vii) Includes 0.12% related to dividend expense on short positions and interest expense for the period ended 10/31/19.
- 59 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Dynamic Opportunities Fund   Class A
    Year ended
10/31/2023		   Year ended
10/31/2022		   Year ended
10/31/2021		   Year ended
10/31/2020		   Year ended
10/31/2019
Net asset value, beginning of period   $ 16.19     $ 22.29     $ 18.32     $ 13.91     $ 13.73  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.11 )     (0.25 )     (0.36 )     (0.22 )     (0.16 )
Net realized and unrealized gain (loss) on investments     (0.77 )     (4.77 )     5.28       5.15       0.58  
Total from investment operations     (0.88 )     (5.02 )     4.92       4.93       0.42  
Distributions from net realized gains     —       (1.08 )     (0.95 )     (0.52 )     (0.24 )
Net asset value, end of period   $ 15.31     $ 16.19     $ 22.29     $ 18.32     $ 13.91  
Total return(ii)     (5.44 )%     (23.17 )%     27.82 %     36.67 %     3.26 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 37,893     $ 60,116     $ 103,684     $ 60,793     $ 32,011  
Ratio of gross expenses to average net assets     2.05 %(iii)     2.77 %(iv)     2.52 %(v)     2.81 %(vi)     2.49 %(vii)
Ratio of expense reimbursements to average net assets     —       (0.77 )%     (0.52 )%     (0.80 )%     (0.32 )%
Ratio of net expenses to average net assets     2.05 %     2.00 %     2.00 %     2.01 %     2.17 %
Ratio of net investment loss to average net assets     (0.69 )%     (1.45 )%     (1.77 )%     (1.41 )%     (1.12 )%
Portfolio turnover rate     350.56 %     334.12 %     161.76 %     249.71 %     264.04 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.

(iii) Includes 0.36% related to dividend expense on short positions and excludes (0.44%) related to interest income on short positions.

(iv) Includes 1.09% related to dividend expense on short positions and interest expense for the period ended 10/31/22.

(v) Includes 0.89% related to dividend expense on short positions and interest expense for the period ended 10/31/21.

(vi) Includes 1.09% related to dividend expense on short positions and interest expense for the period ended 10/31/20.

(vii) Includes 0.59% related to dividend expense on short positions and interest expense for the period ended 10/31/19.
- 60 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Dynamic Opportunities Fund   Class C
    Year ended
10/31/2023		   Year ended
10/31/2022		   Year ended
10/31/2021		   Year ended
10/31/2020		   Year ended
10/31/2019
Net asset value, beginning of period   $ 14.44     $ 20.15     $ 16.77     $ 12.87     $ 12.81  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.21 )     (0.34 )     (0.47 )     (0.30 )     (0.25 )
Net realized and unrealized gain (loss) on investments     (0.68 )     (4.29 )     4.80       4.72       0.55  
Total from investment operations     (0.89 )     (4.63 )     4.33       4.42       0.30  
Distributions from net realized gains     —       (1.08 )     (0.95 )     (0.52 )     (0.24 )
Net asset value, end of period   $ 13.55     $ 14.44     $ 20.15     $ 16.77     $ 12.87  
Total return(ii)     (6.16 )%     (23.73 )%     26.83 %     35.64 %     2.55 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 9,030     $ 12,462     $ 17,998     $ 10,472     $ 7,071  
Ratio of gross expenses to average net assets     2.82 %(iii)     3.53 %(iv)     3.27 %(v)     3.55 %(vi)     3.25 %(vii)
Ratio of expense reimbursements to average net assets     —       (0.78 )%     (0.52 )%     (0.80 )%     (0.32 )%
Ratio of net expenses to average net assets     2.82 %     2.75 %     2.75 %     2.75 %     2.93 %
Ratio of net investment loss to average net assets     (1.45 )%     (2.20 )%     (2.52 )%     (2.07 )%     (1.88 )%
Portfolio turnover rate     350.56 %     334.12 %     161.76 %     249.71 %     264.04 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.

(iii) Includes 0.36% related to dividend expense on short positions and excludes (0.44%) related to interest income on short positions.

(iv) Includes 1.09% related to dividend expense on short positions and interest expense for the period ended 10/31/22.

(v) Includes 0.89% related to dividend expense on short positions and interest expense for the period ended 10/31/21.

(vi) Includes 1.07% related to dividend expense on short positions and interest expense for the period ended 10/31/20.

(vii) Includes 0.60% related to dividend expense on short positions and interest expense for the period ended 10/31/19.
- 61 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Dynamic Opportunities Fund   Class Z
    Year ended
10/31/2023		   Year ended
10/31/2022		   Year ended
10/31/2021		   Year ended
10/31/2020		   Year ended
10/31/2019
Net asset value, beginning of period   $ 16.85     $ 23.09     $ 18.91     $ 14.30     $ 14.07  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.07 )     (0.22 )     (0.33 )     (0.22 )     (0.12 )
Net realized and unrealized gain (loss) on investments     (0.79 )     (4.94 )     5.46       5.35       0.59  
Total from investment operations     (0.86 )     (5.16 )     5.13       5.13       0.47  
Distributions from net realized gains     —       (1.08 )     (0.95 )     (0.52 )     (0.24 )
Net asset value, end of period   $ 15.99     $ 16.85     $ 23.09     $ 18.91     $ 14.30  
Total return(ii)     (5.16 )%     (22.97 )%     28.07 %     37.08 %     3.54 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 207,844     $ 403,338     $ 852,387     $ 352,396     $ 85,184  
Ratio of gross expenses to average net assets     1.73 %(iii)     2.45 %(iv)     2.20 %(v)     2.47 %(vi)     2.15 %(vii)
Ratio of expense reimbursements to average net assets     —       (0.70 )%     (0.45 )%     (0.70 )%     (0.29 )%
Ratio of net expenses to average net assets     1.73 %     1.75 %     1.75 %     1.77 %     1.86 %
Ratio of net investment loss to average net assets     (0.39 )%     (1.22 )%     (1.52 )%     (1.30 )%     (0.82 )%
Portfolio turnover rate     350.56 %     334.12 %     161.76 %     249.71 %     264.04 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.

(iii) Includes 0.36% related to dividend expense on short positions and excludes (0.42%) related to interest income on short positions.

(iv) Includes 1.11% related to dividend expense on short positions and interest expense for the period ended 10/31/22.

(v) Includes 0.88% related to dividend expense on short positions and interest expense for the period ended 10/31/21.

(vi) Includes 1.09% related to dividend expense on short positions and interest expense for the period ended 10/31/20.

(vii) Includes 0.58% related to dividend expense on short positions and interest expense for the period ended 10/31/19.
- 62 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Emerging Markets Fund   Class A
      Year ended
10/31/2023		       Year ended
10/31/2022		       Year ended
10/31/2021		       Year ended
10/31/2020		       Year ended
10/31/2019		  
Net asset value, beginning of period   $ 8.41     $ 14.13     $ 11.71     $ 9.80     $ 8.77  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment income (loss)(i)     (0.01 )     (0.03 )     (0.09 )     (0.06 )     0.03  
Net realized and unrealized gain (loss) on investments     0.54       (5.42 )     2.51       2.45       1.18  
Total from investment operations     0.53       (5.45 )     2.42       2.39       1.21  
Dividends from net investment income     —       — (ii)     —       (0.48 )     (0.18 )
Distributions from net realized gains     —       (0.27 )     —       —       —  
Net asset value, end of period   $ 8.94     $ 8.41     $ 14.13     $ 11.71     $ 9.80  
Total return(iii)     6.30 %     (39.27 )%     20.67 %     25.15 %     14.13 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 3,154     $ 3,375     $ 6,331     $ 3,320     $ 3,942  
Ratio of gross expenses to average net assets     2.11 %     1.80 %     1.65 %     2.25 %     2.22 %
Ratio of expense reimbursements to average net assets     (0.54 )%     (0.25 )%     (0.10 )%     (0.72 )%     (0.69 )%
Ratio of net expenses to average net assets     1.57 %     1.55 %     1.55 %     1.53 %     1.53 %
Ratio of net investment income (loss) to average net assets     (0.11 )%     (0.30 )%     (0.60 )%     (0.61 )%     0.35 %
Portfolio turnover rate     109.60 %     112.35 %     83.30 %     184.74 %     80.33 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Amount was less than $0.005 per share.

(iii) Does not reflect the effect of sales charges, if applicable.
- 63 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Emerging Markets Fund   Class C
    Year ended
10/31/2023		   Year ended
10/31/2022		   Year ended
10/31/2021		   Year ended
10/31/2020		   Year ended
10/31/2019
Net asset value, beginning of period   $ 7.89     $ 13.36     $ 11.16     $ 9.35     $ 8.36  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.07 )     (0.11 )     (0.18 )     (0.13 )     (0.03 )
Net realized and unrealized gain (loss) on investments     0.50       (5.09 )     2.38       2.33       1.13  
Total from investment operations     0.43       (5.20 )     2.20       2.20       1.10  
Dividends from net investment income     —       —       —       (0.39 )     (0.11 )
Distributions from net realized gains     —       (0.27 )     —       —       —  
Net asset value, end of period   $ 8.32     $ 7.89     $ 13.36     $ 11.16     $ 9.35  
Total return(ii)     5.45 %     (39.68 )%     19.71 %     24.19 %     13.34 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 1,145     $ 1,369     $ 3,016     $ 2,658     $ 2,782  
Ratio of gross expenses to average net assets     2.90 %     2.57 %     2.45 %     3.02 %     2.98 %
Ratio of expense reimbursements to average net assets     (0.58 )%     (0.27 )%     (0.15 )%     (0.72 )%     (0.70 )%
Ratio of net expenses to average net assets     2.32 %     2.30 %     2.30 %     2.30 %     2.28 %
Ratio of net investment loss to average net assets     (0.86 )%     (1.05 )%     (1.35 )%     (1.36 )%     (0.35 )%
Portfolio turnover rate     109.60 %     112.35 %     83.30 %     184.74 %     80.33 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.
- 64 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Emerging Markets Fund   Class I
      Year ended
10/31/2023		   Year ended
10/31/2022		       Year ended
10/31/2021		       Year ended
10/31/2020		       Year ended
10/31/2019		  
Net asset value, beginning of period   $ 8.33     $ 14.00     $ 11.59     $ 9.73     $ 8.72  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment income (loss)(i)     — (ii)     (0.02 )     (0.07 )     (0.05 )     0.02  
Net realized and unrealized gain (loss) on investments     0.54       (5.37 )     2.48       2.42       1.19  
Total from investment operations     0.54       (5.39 )     2.41       2.37       1.21  
Dividends from net investment income     —       (0.01 )     —       (0.51 )     (0.20 )
Distributions from net realized gains     —       (0.27 )     —       —       —  
Net asset value, end of period   $ 8.87     $ 8.33     $ 14.00     $ 11.59     $ 9.73  
Total return(iii)     6.48 %     (39.22 )%     20.79 %     25.19 %     14.22 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 1,048     $ 1,538     $ 1,968     $ 2,617     $ 2,636  
Ratio of gross expenses to average net assets     2.05 %     1.77 %     1.66 %     2.14 %     2.07 %
Ratio of expense reimbursements to average net assets     (0.58 )%     (0.32 )%     (0.22 )%     (0.69 )%     (0.65 )%
Ratio of net expenses to average net assets     1.47 %     1.45 %     1.44 %     1.45 %     1.42 %
Ratio of net investment income (loss) to average net assets     (0.01 )%     (0.14 )%     (0.53 )%     (0.52 )%     0.17 %
Portfolio turnover rate     109.60 %     112.35 %     83.30 %     184.74 %     80.33 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Amount was less than $0.005 per share.

(iii) Does not reflect the effect of sales charges, if applicable.
- 65 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Emerging Markets Fund   Class Z
    Year ended
10/31/2023		     Year ended
10/31/2022		     Year ended
10/31/2021		     Year ended
10/31/2020		     Year ended
10/31/2019		  
Net asset value, beginning of period   $ 8.52     $ 14.29     $ 11.78     $ 9.87     $ 8.85  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment income (loss)(i)     0.04       0.03       (0.01 )     (0.01 )     0.09  
Net realized and unrealized gain (loss) on investments     0.55       (5.47 )     2.52       2.46       1.18  
Total from investment operations     0.59       (5.44 )     2.51       2.45       1.27  
Dividends from net investment income     —       (0.06 )     —       (0.54 )     (0.25 )
Distributions from net realized gains     —       (0.27 )     —       —       —  
Net asset value, end of period   $ 9.11     $ 8.52     $ 14.29     $ 11.78     $ 9.87  
Total return(ii)     6.92 %     (38.93 )%     21.31 %     25.76 %     14.83 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 14,072     $ 20,200     $ 35,357     $ 13,028     $ 14,090  
Ratio of gross expenses to average net assets     1.72 %     1.44 %     1.34 %     1.89 %     1.85 %
Ratio of expense reimbursements to average net assets     (0.71 )%     (0.45 )%     (0.35 )%     (0.90 )%     (0.90 )%
Ratio of net expenses to average net assets     1.01 %     0.99 %     0.99 %     0.99 %     0.95 %
Ratio of net investment income (loss) to average net assets     0.46 %     0.26 %     (0.05 )%     (0.06 )%     0.95 %
Portfolio turnover rate     109.60 %     112.35 %     83.30 %     184.74 %     80.33 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.
- 66 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Responsible Investing Fund   Class A
    Year ended
10/31/2023		     Year ended
10/31/2022		     Year ended
10/31/2021		     Year ended
10/31/2020		     Year ended
10/31/2019		  
Net asset value, beginning of period   $ 11.55     $ 17.71     $ 13.60     $ 11.38     $ 10.60  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.04 )     (0.07 )     (0.08 )     (0.05 )     (0.01 )
Net realized and unrealized gain (loss) on investments     2.08       (4.71 )     5.23       3.13       1.43  
Total from investment operations     2.04       (4.78 )     5.15       3.08       1.42  
Distributions from net realized gains     (0.09 )     (1.38 )     (1.04 )     (0.86 )     (0.64 )
Net asset value, end of period   $ 13.50     $ 11.55     $ 17.71     $ 13.60     $ 11.38  
Total return(ii)     17.80 %     (29.27 )%     39.80 %     28.64 %     14.81 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 39,957     $ 35,237     $ 51,634     $ 38,192     $ 29,932  
Ratio of gross expenses to average net assets     1.34 %     1.36 %     1.27 %     1.36 %     1.40 %
Ratio of expense reimbursements to average net assets     —       —       —       (0.02 )%     (0.05 )%
Ratio of net expenses to average net assets     1.34 %     1.36 %     1.27 %     1.34 %     1.35 %
Ratio of net investment loss to average net assets     (0.34 )%     (0.53 )%     (0.52 )%     (0.43 )%     (0.12 )%
Portfolio turnover rate     7.98 %     14.55 %     11.07 %     11.73 %     14.64 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.
- 67 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Responsible Investing Fund   Class C
    Year ended
10/31/2023		     Year ended
10/31/2022		     Year ended
10/31/2021		     Year ended
10/31/2020		     Year ended
10/31/2019		  
Net asset value, beginning of period   $ 9.76     $ 15.30     $ 11.95     $ 10.18     $ 9.62  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.12 )     (0.15 )     (0.17 )     (0.13 )     (0.09 )
Net realized and unrealized gain (loss) on investments     1.76       (4.01 )     4.56       2.76       1.29  
Total from investment operations     1.64       (4.16 )     4.39       2.63       1.20  
Distributions from net realized gains     (0.09 )     (1.38 )     (1.04 )     (0.86 )     (0.64 )
Net asset value, end of period   $ 11.31     $ 9.76     $ 15.30     $ 11.95     $ 10.18  
Total return(ii)     16.96 %     (29.87 )%     38.87 %     27.53 %     13.97 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 1,868     $ 2,709     $ 5,150     $ 5,368     $ 5,369  
Ratio of gross expenses to average net assets     2.12 %     2.09 %     2.03 %     2.11 %     2.16 %
Ratio of net expenses to average net assets     2.12 %     2.09 %     2.03 %     2.11 %     2.16 %
Ratio of net investment loss to average net assets     (1.11 )%     (1.27 )%     (1.27 )%     (1.19 )%     (0.92 )%
Portfolio turnover rate     7.98 %     14.55 %     11.07 %     11.73 %     14.64 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.
- 68 -

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Responsible Investing Fund   Class I
    Year ended
10/31/2023		     Year ended
10/31/2022		     Year ended
10/31/2021		     Year ended
10/31/2020		     Year ended
10/31/2019		  
Net asset value, beginning of period   $ 11.52     $ 17.67     $ 13.57     $ 11.36     $ 10.58  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment loss(i)     (0.04 )     (0.07 )     (0.08 )     (0.05 )     (0.01 )
Net realized and unrealized gain (loss) on                                        
investments     2.07       (4.70 )     5.22       3.12       1.43  
Total from investment operations     2.03       (4.77 )     5.14       3.07       1.42  
Distributions from net realized gains     (0.09 )     (1.38 )     (1.04 )     (0.86 )     (0.64 )
Net asset value, end of period   $ 13.46     $ 11.52     $ 17.67     $ 13.57     $ 11.36  
Total return(ii)     17.76 %     (29.28 )%     39.82 %     28.60 %     14.83 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 4,464     $ 4,538     $ 6,884     $ 8,131     $ 10,213  
Ratio of gross expenses to average net assets     1.35 %     1.35 %     1.28 %     1.35 %     1.39 %
Ratio of expense reimbursements to average net assets     —       —       —       —       (0.02 )%
Ratio of net expenses to average net assets     1.35 %     1.35 %     1.28 %     1.35 %     1.37 %
Ratio of net investment loss to average net assets     (0.35 )%     (0.53 )%     (0.52 )%     (0.42 )%     (0.12 )%
Portfolio turnover rate     7.98 %     14.55 %     11.07 %     11.73 %     14.64 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.
- 69 -

 

THE ALGER FUNDS II
Financial Highlights for a share outstanding throughout the period

 

 

Alger Responsible Investing Fund   Class Z
    Year ended
10/31/2023		     Year ended
10/31/2022		     Year ended
10/31/2021		     Year ended
10/31/2020		     Year ended
10/31/2019		  
Net asset value, beginning of period   $ 11.91     $ 18.16     $ 13.87     $ 11.55     $ 10.70  
INCOME FROM INVESTMENT OPERATIONS:                                        
Net investment income (loss)(i)     0.01       (0.02 )     (0.03 )     (0.01 )     0.03  
Net realized and unrealized gain (loss) on investments     2.15       (4.85 )     5.36       3.19       1.46  
Total from investment operations     2.16       (4.87 )     5.33       3.18       1.49  
Distributions from net realized gains     (0.09 )     (1.38 )     (1.04 )     (0.86 )     (0.64 )
Net asset value, end of period   $ 13.98     $ 11.91     $ 18.16     $ 13.87     $ 11.55  
Total return(ii)     18.28 %     (29.02 )%     40.35 %     29.11 %     15.34 %
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000’s omitted)   $ 28,345     $ 23,001     $ 36,053     $ 22,646     $ 15,755  
Ratio of gross expenses to average net assets     1.01 %     1.02 %     0.96 %     1.04 %     1.12 %
Ratio of expense reimbursements to average net assets     (0.06 )%     (0.07 )%     (0.02 )%     (0.09 )%     (0.18 )%
Ratio of net expenses to average net assets     0.95 %     0.95 %     0.94 %     0.95 %     0.94 %
Ratio of net investment income (loss) to average net assets     0.04 %     (0.13 )%     (0.20 )%     (0.05 )%     0.29 %
Portfolio turnover rate     7.98 %     14.55 %     11.07 %     11.73 %     14.64 %

See Notes to Financial Statements.

 


 (i) Amount was computed based on average shares outstanding during the period.

(ii) Does not reflect the effect of sales charges, if applicable.
- 70 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS

 

 

NOTE 1 — General:

 

 

The Alger Funds II (the “Trust”) is an open-end registered investment company organized as a business trust under the laws of the Commonwealth of Massachusetts. The Trust qualifies as an investment company as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 946 – Financial Services – Investment Companies. The Trust operates as a series company currently offering an unlimited number of shares of beneficial interest in four series – Alger Spectra Fund, Alger Dynamic Opportunities Fund, Alger Emerging Markets Fund and Alger Responsible Investing Fund (collectively, the “Funds” or individually, each a “Fund”). The Funds normally invest primarily in equity securities and each has an investment objective of long-term capital appreciation.

 

Each Fund offers one or more of the following share classes: Class A, C, I, Y and Z. Class A shares are generally subject to an initial sales charge while Class C shares are generally subject to a deferred sales charge. Class C shares will automatically convert to Class A shares on the fifth business day of the month following the eighth anniversary of the purchase date of a shareholder’s Class C shares, without the imposition of any sales load, fee or other charge. Class C shares held at certain dealers may not convert to Class A shares or may be converted on a different schedule. At conversion, a proportionate amount of shares representing reinvested dividends and distributions will also be converted into Class A shares. Effective August 27, 2019, Class C shares were closed to direct shareholders and are only available for purchase through certain financial intermediaries and group retirement plan recordkeeping platforms. Class I shares, Class Z shares and Class Y shares are generally sold to institutional investors and are sold without an initial or deferred sales charge and Class Z shares and Class Y shares are generally subject to a minimum initial investment of $500,000. Each class has identical rights to assets and earnings, except that each share class bears the pro rata allocation of the Fund’s expenses other than a class expense (not including advisory or custodial fees or other expenses related to the management of the Fund’s assets).

 

On May 23, 2023, the Board of Trustees of the Trust (the “Board”) approved the transition of the Funds’ custodian and administrator from Brown Brothers Harriman & Company (the “Custodian”) to The Bank of New York Mellon. This change is anticipated to become effective in early 2024.

 

NOTE 2 — Significant Accounting Policies:

 

 

(a) Investment Valuation: The Funds value their financial instruments at fair value using independent dealers or pricing services under policies approved by the Board. Investments held by the Funds 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).

 

The Board has designated, pursuant to Rule 2a-5 under the Investment Company Act of 1940, as amended (the “1940 Act”), the Funds’ investment adviser, Fred Alger Management, LLC (“Alger Management” or the “Investment Manager”) as its valuation designee (the “Valuation Designee”) to make fair value determinations subject to the Board’s review and oversight. The Valuation Designee has established a Valuation Committee (“Committee”) comprised of representatives of the Investment Manager and officers of the Funds to assist in performing the duties and responsibilities of the Valuation Designee.

 

- 71 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

The Valuation Designee has established valuation processes including but not limited to: (i) making fair value determinations when market quotations for financial instruments are not readily available in accordance with valuation policies and procedures adopted by the Board; (ii) assessing and managing material risks associated with fair valuation determinations; (iii) selecting, applying and testing fair valuation methodologies; and (iv) overseeing and evaluating pricing services used by the Funds. The Valuation Designee regularly reports its fair valuation determinations and related valuation information to the Board. The Committee generally meets quarterly and on an as-needed basis to review and evaluate the effectiveness of the valuation policies and procedures in accordance with the requirements of Rule 2a-5.

 

Investments in money market funds and short-term securities held by the Funds having a remaining maturity of sixty days or less are valued at amortized cost which approximates market value.

 

Equity securities, including traded rights, warrants and option contracts for which valuation information is readily available, are valued at the last quoted sales price or official closing price on the primary market or exchange on which they are traded as reported by an independent pricing service. In the absence of quoted sales, such securities are generally valued at the bid price or, in the absence of a recent bid price, the equivalent as obtained from one or more of the major market makers for the securities to be valued.

 

Debt securities generally trade in the over-the-counter market. Debt securities with remaining maturities of more than sixty days at the time of acquisition are valued on the basis of the last available bid prices or current market quotations provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between investments and calculated yield measures based on valuation technology commonly employed in the market for such investments. Asset-backed and mortgage-backed securities are valued by independent pricing services using models that consider estimated cash flows of each tranche of the security, establish a benchmark yield and develop an estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche. Debt securities with a remaining maturity of sixty days or less are valued at amortized cost which approximates market value.

 

Contracts for difference (“CFDs”) are privately negotiated in the over-the-counter market (“OTC CFDs”). OTC CFDs are valued at the last reported sale or official closing price on the primary market or exchange of the underlying asset or liability. In the absence of quoted sales, such securities are generally valued at the bid price, or, in the absence of a recent bid price, the equivalent as obtained from one or more of the major market makers for the securities to be valued.

 

- 72 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

Securities in which the Funds invest may be traded in foreign 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 may result in adjustments to the closing foreign prices to reflect what the Valuation Designee, through its Committee, 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 NYSE is open.

 

FASB Accounting Standards Codification 820 – Fair Value Measurements and Disclosures (“ASC 820”) defines fair value as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. ASC 820 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability and may be observable or unobservable. Observable inputs are based on market data obtained from sources independent of the Funds. Unobservable inputs are inputs that reflect the Funds’ own assumptions based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

 


 ● Level 1 – quoted prices in active markets for identical investments

 


 ● Level 2 – significant other observable inputs (including quoted prices for similar investments, amortized cost, interest rates, prepayment speeds, credit risk, etc.)

 


 ● Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

 

The Funds’ valuation techniques are generally consistent with either the market or the income approach to fair value. The market approach considers prices and other relevant information generated by market transactions involving identical or comparable assets to measure fair value. The income approach converts future amounts to a current, or discounted, single amount. These fair value measurements are determined on the basis of the value indicated by current market expectations about such future events. Inputs for Level 1 include exchange-listed prices and broker quotes in an active market. Inputs for Level 2 include the last trade price in the case of a halted security, an exchange-listed price which has been adjusted for fair value factors, and prices of closely related securities. Additional Level 2 inputs include an evaluated price which is based upon a compilation of observable market information such as spreads for fixed income and preferred securities. Inputs for Level 3 include, but are not limited to, revenue multiples, earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, discount rates, time to exit and the probabilities of success of certain outcomes. Such unobservable market information may be obtained from a company’s financial statements and from industry studies, market data, and market indicators such as benchmarks and indexes. Because of the inherent uncertainty and often limited markets for restricted securities, the valuations assigned to such securities by the Funds may significantly differ from the valuations that would have been assigned by the Funds had there been an active market for such securities.

 

- 73 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

(b) Cash and Cash Equivalents: Cash and cash equivalents include U.S. dollars, foreign cash and overnight time deposits.

 

(c) 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.

 

(d) Foreign Currency Transactions: 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 accompanying Statements of Operations.

 

(e) Forward Foreign Exchange Contracts: Certain Funds may enter into forward foreign currency contracts to hedge against foreign currency exchange rate risk on their non-U.S. dollar denominated securities or to facilitate settlement of foreign currency denominated portfolio transactions. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The contract is marked-to-market daily and the change in value is recorded by a Fund as an unrealized gain or loss. Realized gains or losses equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed are recorded upon delivery or receipt of the currency.

 

These contracts may involve market risk in excess of the unrealized gain or loss reflected on the Statements of Assets and Liabilities. In addition, the Funds could be exposed to risk if the counterparties are unable to meet the terms of the contracts or if the value of the currency changes unfavorably to the base currency.

 

(f) Short Sales: Securities sold short represent an obligation to deliver the securities at a future date. A Fund may sell a security it does not own in anticipation of a decline in the value of that security before the delivery date. When a Fund sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which a Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of a short sale.

 

A Fund pledges securities and/or other assets, which may include cash collateral from borrowing a security, to the broker-dealer as collateral. Proceeds received from short sales may be maintained by the broker-dealer as collateral or may be released to a Fund to purchase additional securities or for any other purpose. Proceeds maintained by the lender are included in Collateral held for short sales on the Statements of Assets and Liabilities. The net cost or income of selling securities short includes dividends paid on securities sold short, interest expense associated with borrowing securities, and interest income earned on collateral held by the broker-dealer. The net cost or income of selling securities short is disclosed on the Statements of Operations.

 

- 74 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

(g) Contracts for difference: Each Fund may engage in OTC CFDs. OTC CFDs are derivative instruments that allow a Fund to take a position on the change in the market price of an underlying asset, such as an equity security, or the value of an index. With a short OTC CFD, a Fund is seeking to profit from falls in the market price of an asset. Changes in the fair value of OTC CFDs are recorded as unrealized gains and losses on the Statements of Assets and Liabilities. A Fund generally records a realized gain or loss on the expiration, termination or settlement of an OTC CFD.

 

(h) 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 reflect 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 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.

 

Certain Funds may also purchase put and call options. Such Funds pay a premium which is included in each Fund’s accompanying 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 unexercised 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.

 

(i) Dividends to Shareholders: Dividends and distributions payable to shareholders are recorded by the Funds on the ex-dividend date. Dividends from net investment income, if available, and distributions from net realized gains, offset by any loss carryforward, are declared and paid annually after the end of the fiscal year in which earned.

 

Each share class is treated separately in determining the amount of dividends from 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 a Fund’s 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, passive foreign investment companies, and foreign currency transactions. The reclassifications are done annually at year-end and have no impact on the net asset values of the Funds and are designed to present each Fund’s capital accounts on a tax basis.

 

- 75 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

(j) Federal Income Taxes: It is each Fund’s policy to comply with the requirements of the Internal Revenue Code Subchapter M applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Provided that the Funds maintain such compliance, no federal income tax provision is required. Each Fund is treated as a separate entity for the purpose of determining such compliance.

 

FASB Accounting Standards Codification 740 – Income Taxes (“ASC 740”) requires the Funds to measure and recognize in their financial statements the benefit of a tax position taken (or expected to be taken) on an income tax return if such position will more likely than not be sustained upon examination based on the technical merits of the position. No tax years are currently under investigation. The Funds file income tax returns in the U.S. Federal jurisdiction, as well as the New York State and New York City jurisdictions. The statute of limitations on the Funds’ tax returns remains open for the tax years 2019-2022. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.

 

(k) 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 are allocated among the Fund’s classes based on relative net assets, with the exception of distribution fees, transfer agency fees, and shareholder servicing and related fees.

 

(l) Estimates: These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require using estimates and assumptions that affect the reported amounts therein. Actual results may differ from those estimates. All such estimates are of a normal recurring nature.

 

NOTE 3 — Investment Advisory Fees and Other Transactions with Affiliates:

 

 

(a) Investment Advisory Fees: Fees incurred by each Fund, pursuant to the provisions of the Trust’s Investment Advisory Agreement with the Investment Manager, are payable monthly and computed based on the following rates. The actual rate paid as a percentage of average daily net assets, for the year ended October 31, 2023, is set forth below under the heading “Actual Rate”:

 

    Tier 1     Tier 2     Tier 3     Tier 4     Tier 5     Actual Rate  
Alger Spectra Fund(a)     0.90 %     0.75 %     0.65 %     0.55 %     0.45 %     0.85 %
Alger Dynamic Opportunities Fund(b)     1.20       1.00       —       —       —       1.20  
Alger Emerging Markets Fund(c)     0.75       —       —       —       —       0.75  
Alger Responsible Investing Fund(b)     0.71       0.65       —       —       —       0.71  

 


 (a) Tier 1 rate is paid on assets up to $2 billion, Tier 2 rate is paid on assets between $2 billion and $4 billion, Tier 3 rate is paid on assets between $4 billion and $6 billion, Tier 4 rate is paid on assets between $6 billion and $8 billion, and Tier 5 rate is paid on assets in excess of $8 billion.

(b) Tier 1 rate is paid on assets up to $1 billion and Tier 2 rate is paid on assets in excess of $1 billion.

(c) Tier 1 rate is paid on all assets.

 

- 76 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

The sub-adviser to the Alger Dynamic Opportunities Fund, Weatherbie Capital, LLC (“Weatherbie”), an affiliate of Alger Management, is paid a fee from the advisory fee that Alger Management receives at no additional cost to the Alger Dynamic Opportunities Fund. The sub-advisory fee is equal to 70% of the net management fee paid by the Alger Dynamic Opportunities Fund to Alger Management with respect to the sub-advised assets. For the year ended October 31, 2023, Alger Management paid a sub-advisory fee of $1,797,520 to Weatherbie.

 

Alger Management has contractually agreed to waive and/or reimburse Fund expenses (excluding advisory fees, custody fees, for all Funds other than Alger Emerging Markets Fund, acquired fund fees and expenses, interest, taxes, brokerage and extraordinary expenses, and dividend expense and net borrowing cost or income on short sales, for all Funds other than Alger Spectra Fund and Alger Dynamic Opportunities Fund, to the extent applicable) through February 28, 2025 to the extent necessary to limit other expenses and any other applicable share class-specific expenses to the rates, based on average daily net assets, as listed in the table below.

 

Prior to April 1, 2023, Alger Management had contractually agreed to waive and/or reimburse Fund expenses (excluding acquired fund fees and expenses, interest, taxes, brokerage and extraordinary expenses, and for all Funds other than Alger Dynamic Opportunities Fund, dividend expense and net borrowing costs or income, on short sales, if applicable) for certain Funds in order for the total annual fund operating expenses to not exceed certain rates, based on average net assets.

 

    CLASS     FEES WAIVED /
REIMBURSED FOR
THE YEAR ENDED		  
                                  OCTOBER 31,  
    A     C     I     Y     Z     2023  
Alger Spectra Fund     —       —       —       0.28 %(a)     0.34 %(a)   $ 258,643  
Alger Dynamic Opportunities Fund     0.80 %(b)     1.55 %(b)     —       —       0.55 (b)     —  
Alger Emerging Markets Fund     0.80 (c)     1.55 (c)     0.70 %(c)     —       0.24 (c)     163,745  
Alger Responsible Investing Fund     —       —       —       —       0.24 (d)     14,461  

 

- 77 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 


 (a) Prior to April 1, 2023, total annual fund operating expenses for Alger Spectra Fund, Class Y and Z shares, could not exceed 0.79% and 0.99%, respectively.

(b) Prior to April 1, 2023, total annual fund operating expenses for Alger Dynamic Opportunities Fund, Class A, C and Z shares, could not exceed 2.00%, 2.75% and 1.75%, respectively.

(c) Prior to April 1, 2023, total annual fund operating expenses for Alger Emerging Markets Fund, Class A, C, I and Z shares, could not exceed 1.55%, 2.30%, 1.45% and 0.99%, respectively.

(d) Prior to April 1, 2023, total annual fund operating expenses for Alger Responsible Investing Fund, Class Z shares, could not exceed 0.95%.

 

Alger Management may recoup any fees waived or expenses reimbursed pursuant to the contract; however, a Fund will only make repayments to the Investment Manager if such repayment does not cause a Fund’s expense ratio after the repayment is taken into account, to exceed both (i) the expense cap in place at the time such amounts were waived or reimbursed, and (ii) a Fund’s current expense cap. Such recoupment is limited to two years from the date the amount is initially waived or reimbursed. For the year ended October 31, 2023, there were no recoupments made to the Investment Manager.

 

(b) Administration Fees: Fees incurred by each Fund, pursuant to the provisions of the Trust’s Fund Administration Agreement with Alger Management, are payable monthly and computed based on the average daily net assets of each Fund at the annual rate of 0.0275%.

 

(c) Distribution Fees: The Trust has adopted distribution plans for Class A, Class C and Class I shares of the Funds pursuant to which Class A, Class C and Class I shares of each Fund pay Fred Alger & Company, LLC, the Funds’ distributor and an affiliate of the Investment Manager (the “Distributor” or “Alger LLC”), a fee at the annual rate listed below, as a percentage of the respective average daily net assets of the share class of the designated Fund, to compensate Alger LLC for its activities and expenses incurred in distributing and/ or administering the share class and/or shareholder servicing. The fees paid may be more or less than the expenses incurred by Alger LLC.

 

SHARE CLASS     FEE RATE  
  A       0.25%
  C       1.00  
  I       0.25  

 

(d) Sales Charges: Sales of shares of the Funds may be subject to contingent deferred sales charges. The contingent deferred sales charges are used by Alger LLC to offset distribution expenses previously incurred. Sales charges do not represent expenses of the Trust. For the year ended October 31, 2023, contingent deferred sales charges imposed, all of which were retained by Alger LLC, were as follows:

 


     CONTINGENT
DEFERRED SALES
CHARGES		  
Alger Spectra Fund   $ 14,526  
Alger Dynamic Opportunities Fund     687  
Alger Emerging Markets Fund     107  
Alger Responsible Investing Fund     92  

 

(e) Brokerage Commissions: During the year ended October 31, 2023, Alger Spectra Fund, Alger Dynamic Opportunities Fund, Alger Emerging Markets Fund and Alger Responsible Investing Fund paid Alger LLC, $330,280, $416,679, $1,203 and $3,287, respectively, in connection with securities transactions.

 

- 78 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

(f) Shareholder Administrative Fees: The Trust has entered into a Shareholder Administrative Services Agreement with Alger Management to compensate Alger Management for liaising with, and providing administrative oversight of, the Trust’s transfer agent, and for other related services. The Funds compensate Alger Management at the annual rate of 0.0165% of their respective average daily net assets for the Class A and Class C shares and 0.01% of their respective average daily net assets for the Class I, Class Y and Class Z shares for these services.

 

Alger Management makes payments to intermediaries that provide sub-accounting services to omnibus accounts invested in the Funds. A portion of the fees paid by Alger Management to intermediaries that provide sub-accounting services are charged back to the appropriate Fund, subject to certain limitations, as approved by the Board. For the year ended October 31, 2023, Alger Management charged back to Alger Spectra Fund, Alger Dynamic Opportunities Fund, Alger Emerging Markets Fund and Alger Responsible Investing Fund, $696,286, $34,121, $4,554 and $26,870, respectively, for these services, which are included in transfer agent fees in the accompanying Statements of Operations.

 

(g) Trustee Fees: Each trustee who is not an “interested person” of the Trust, as defined in the 1940 Act (“Independent Trustee”), receives a fee of $156,000 per annum, paid pro rata based on net assets by each fund in the Alger Fund Complex, plus travel expenses incurred for attending board meetings. The term “Alger Fund Complex” refers to the Trust, The Alger Institutional Funds, The Alger Funds, The Alger Portfolios, Alger Global Focus Fund and The Alger ETF Trust, each of which is a registered investment company managed by Alger Management. The Independent Trustee appointed as Chairman of the Board receives additional compensation of $22,000 per annum paid pro rata based on net assets by each fund in the Alger Fund Complex. Additionally, each member of the Audit Committee receives a fee of $13,000 per annum, paid pro rata based on net assets by each fund in the Alger Fund Complex.

 

The Board has adopted a policy requiring Trustees to receive a minimum of 10% of their annual compensation in shares of one or more of the funds in the Alger Fund Complex.

 

(h) Interfund Trades: The Funds may engage in purchase and sale transactions with other funds advised by Alger Management or sub-advised by Weatherbie. For the year ended October 31, 2023, these purchases and sales were as follows:

 

    PURCHASES     SALES     REALIZED GAIN  
Alger Dynamic Opportunities Fund   $ 669,786     $ —     $ —  

 

(i) Interfund Loans: The Funds, along with other funds in the Alger Fund Complex, may borrow money from and lend money to each other for temporary or emergency purposes. To the extent permitted under its investment restrictions, each Fund may lend uninvested cash in an amount up to 15% of its net assets to other funds in the Alger Fund Complex. If a Fund has borrowed from other funds in the Alger Fund Complex and has aggregate borrowings from all sources that exceed 10% of the Fund’s total assets, such Fund will secure all of its loans from other funds in the Alger Fund Complex. The interest rate charged on interfund loans is equal to the average of the overnight time deposit rate and bank loan rate available to the Funds. As of October 31, 2023, Alger Mid Cap Focus Fund borrowed $1,918,006, including interest, from Alger Dynamic Opportunities Fund at a rate of 6.01%, which was payable November 1, 2023 and categorized as Level 2 within the fair value hierarchy.

 

- 79 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

During the year ended October 31, 2023, Alger Emerging Markets Fund and Alger Responsible Investing Fund incurred interfund loan interest expenses of $3,305 and $404, respectively, and Alger Spectra Fund and Alger Dynamic Opportunities Fund earned interfund loan interest income of $20,859 and $131,885 which is included as interest expenses and interest income in the accompanying Statements of Operations.

 

(j) Other Transactions with Affiliates: Certain officers and one Trustee of the Trust are directors and/or officers of Alger Management, the Distributor, or their affiliates. At October 31, 2023, Alger Management and its affiliated entities owned the following shares:

 

    SHARE CLASS  
    A     C     I     Y     Z  
Alger Spectra Fund     1,856,287       —       19,334       —       19,129  
Alger Dynamic Opportunities Fund     108       —       —       —       2,141,081  
Alger Responsible Investing Fund     —       —       —       —       231,211  

 

NOTE 4 — Securities Transactions:

 

 

The following summarizes the securities transactions by each Fund, other than U.S. Government securities, short-term securities, purchased options, OTC CFDs, forward foreign currency contracts and short sales, for the year ended October 31, 2023:

 

    PURCHASES     SALES  
Alger Spectra Fund   $ 1,909,900,907     $ 3,064,667,477  
Alger Dynamic Opportunities Fund     1,229,343,024       1,383,167,444  
Alger Emerging Markets Fund     25,824,376       34,165,311  
Alger Responsible Investing Fund     5,658,228       8,341,734  

 

- 80 -

 

THE ALGER FUNDS II
NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

NOTE 5 — Borrowing:

 

 

The Funds may borrow from the Custodian, on an uncommitted basis. Each Fund pays the Custodian a market rate of interest, generally based upon a rate of return with respect to each respective currency borrowed, taking into consideration relevant overnight and short-term reference rates and the range of distribution between and among the interest rates paid on deposits to other institutions, less applicable commissions, if any. The Funds may also borrow from other funds in the Alger Fund Complex, as discussed in Note 3(i). For the year ended October 31, 2023, the Funds had the following borrowings from the Custodian and other funds in the Alger Fund Complex:

 

    AVERAGE DAILY
BORROWING		     WEIGHTED AVERAGE
INTEREST RATE		  
Alger Spectra Fund   $ 166,966       6.82 %
Alger Dynamic Opportunities Fund     14,990       6.93  
Alger Emerging Markets Fund     61,617       5.52  
Alger Responsible Investing Fund     12,931       5.73  

 

The highest amount borrowed from the Custodian and other funds in the Alger Fund Complex during the year ended October 31, 2023 by each Fund was as follows:

 


     HIGHEST BORROWING  
Alger Spectra Fund   $ 8,812,969  
Alger Dynamic Opportunities Fund     5,283,723  
Alger Emerging Markets Fund     3,260,389  
Alger Responsible Investing Fund     435,312  

 

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 four series. Each series is divided into separate classes. During the year ended October 31, 2023, and the year ended October 31, 2022, transactions of shares of beneficial interest were as follows:

 

- 81 -

 

 

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

    FOR THE YEAR ENDED     FOR THE YEAR ENDED  
    OCTOBER 31, 2023     OCTOBER 31, 2022  
    SHARES     AMOUNT     SHARES     AMOUNT  
Alger Spectra Fund                        
Class A:                                
Shares sold     5,207,968     $ 86,984,325       8,935,481     $ 207,294,795  
Shares converted from Class C     236,583       3,978,574       329,685       7,095,904  
Dividends reinvested     1,331,629       19,867,911       16,030,882       393,077,226  
Shares redeemed     (14,983,651 )     (245,768,169 )     (20,964,386 )     (432,371,516 )
Net increase (decrease)     (8,207,471 )   $ (134,937,359 )     4,331,662     $ 175,096,409  
Class C:                                
Shares sold     727,176     $ 9,731,074       1,239,496     $ 21,700,858  
Shares converted to Class A     (293,713 )     (3,978,574 )     (399,997 )     (7,095,904 )
Dividends reinvested     546,229       6,576,600       7,877,758       158,027,827  
Shares redeemed     (7,545,044 )     (100,660,835 )     (11,224,607 )     (197,573,487 )
Net decrease     (6,565,352 )   $ (88,331,735 )     (2,507,350 )   $ (24,940,706 )
Class I:                                
Shares sold     614,695     $ 10,591,233       6,913,785     $ 220,734,553  
Dividends reinvested     222,869       3,387,604       5,281,257       131,820,186  
Shares redeemed     (4,558,793 )     (77,483,062 )     (13,070,346 )     (296,680,233 )
Net increase (decrease)     (3,721,229 )   $ (63,504,225 )     (875,304 )   $ 55,874,506  
Class Y:                                
Shares sold     1,044,272     $ 18,599,444       1,307,548     $ 27,292,813  
Dividends reinvested     188,818       3,011,649       2,187,308       57,001,233  
Shares redeemed     (7,343,350 )     (136,309,990 )     (1,762,674 )     (36,988,081 )
Net increase (decrease)     (6,110,260 )   $ (114,698,897 )     1,732,182     $ 47,305,965  
Class Z:                                
Shares sold     11,243,571     $ 199,648,620       25,350,752     $ 571,397,204  
Dividends reinvested     2,278,316       36,248,015       44,283,179       1,152,248,325  
Shares redeemed     (55,164,105 )     (952,793,980 )     (106,545,965 )     (2,196,164,227 )
Net decrease     (41,642,218 )   $ (716,897,345 )     (36,912,034 )   $ (472,518,698 )

 

- 82 -

 

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

    FOR THE YEAR ENDED     FOR THE YEAR ENDED  
    OCTOBER 31, 2023     OCTOBER 31, 2022  
    SHARES     AMOUNT     SHARES     AMOUNT  
Alger Dynamic Opportunities Fund                                
Class A:                                
Shares sold     303,864     $ 4,949,391       951,808     $ 17,503,809  
Shares converted from Class C     2,112       34,236       1,411       23,371  
Dividends reinvested     —       —       268,301       5,003,812  
Shares redeemed     (1,544,548 )     (24,730,592 )     (2,159,765 )     (37,736,181 )
Net decrease     (1,238,572 )   $ (19,746,965 )     (938,245 )   $ (15,205,189 )
Class C:                                
Shares sold     41,924     $ 608,209       225,580     $ 3,707,548  
Shares converted to Class A     (2,376 )     (34,236 )     (1,578 )     (23,371 )
Dividends reinvested     —       —       60,830       1,018,896  
Shares redeemed     (236,227 )     (3,387,279 )     (314,797 )     (4,872,053 )
Net decrease     (196,679 )   $ (2,813,306 )     (29,965 )   $ (168,980 )
Class Z:                                
Shares sold     4,640,220     $ 78,762,529       10,212,905     $ 195,576,443  
Dividends reinvested     —       —       2,060,832       39,918,317  
Shares redeemed     (15,577,991 )     (262,631,240 )     (25,245,663 )     (456,436,572 )
Net decrease     (10,937,771 )   $ (183,868,711 )     (12,971,926 )   $ (220,941,812 )
                                 
Alger Emerging Markets Fund                                
Class A:                                
Shares sold     58,923     $ 545,736       137,961     $ 1,746,184  
Shares converted from Class C     794       7,143       —       —  
Dividends reinvested     —       —       9,895       130,721  
Shares redeemed     (108,089 )     (983,843 )     (194,674 )     (2,137,143 )
Net decrease     (48,372 )   $ (430,964 )     (46,818 )   $ (260,238 )
Class C:                                
Shares sold     11,518     $ 99,533       8,522     $ 101,552  
Shares converted to Class A     (851 )     (7,143 )     —       —  
Dividends reinvested     —       —       4,772       59,457  
Shares redeemed     (46,577 )     (403,196 )     (65,407 )     (649,861 )
Net decrease     (35,910 )   $ (310,806 )     (52,113 )   $ (488,852 )
Class I:                                
Shares sold     4,289     $ 39,782       246,058     $ 2,914,984  
Dividends reinvested     —       —       2,961       38,696  
Shares redeemed     (70,599 )     (637,625 )     (205,092 )     (2,194,040 )
Net increase (decrease)     (66,310 )   $ (597,843 )     43,927     $ 759,640  
Class Z:                                
Shares sold     755,971     $ 7,032,316       1,419,212     $ 17,528,765  
Dividends reinvested     —       —       66,936       891,582  
Shares redeemed     (1,581,325 )     (14,711,680 )     (1,589,750 )     (17,265,284 )
Net increase (decrease)     (825,354 )   $ (7,679,364 )     (103,602 )   $ 1,155,063  

 

- 83 -

 

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

    FOR THE YEAR ENDED     FOR THE YEAR ENDED  
    OCTOBER 31, 2023     OCTOBER 31, 2022  
    SHARES     AMOUNT     SHARES     AMOUNT  
Alger Responsible Investing Fund                                
Class A:                                
Shares sold     275,965     $ 3,674,974       274,277     $ 3,991,046  
Shares converted from Class C     15,474       212,591       14,789       221,025  
Dividends reinvested     21,954       254,889       226,759       3,712,040  
Shares redeemed     (404,632 )     (5,104,016 )     (379,091 )     (5,399,154 )
Net increase (decrease)     (91,239 )   $ (961,562 )     136,734     $ 2,524,957  
Class C:                                
Shares sold     10,656     $ 116,190       19,331     $ 212,111  
Shares converted to Class A     (18,455 )     (212,591 )     (17,360 )     (221,025 )
Dividends reinvested     2,333       22,857       31,719       441,843  
Shares redeemed     (106,753 )     (1,152,120 )     (93,031 )     (1,087,411 )
Net decrease     (112,219 )   $ (1,225,664 )     (59,341 )   $ (654,482 )
Class I:                                
Shares sold     7,945     $ 102,214       8,656     $ 118,404  
Dividends reinvested     2,963       34,310       32,174       525,409  
Shares redeemed     (73,294 )     (972,728 )     (36,399 )     (502,314 )
Net increase (decrease)     (62,386 )   $ (836,204 )     4,431     $ 141,499  
Class Z:                                
Shares sold     427,721     $ 5,928,561       455,242     $ 6,874,750  
Dividends reinvested     12,859       154,046       144,806       2,435,629  
Shares redeemed     (344,037 )     (4,551,671 )     (654,352 )     (9,189,469 )
Net increase (decrease)     96,543     $ 1,530,936       (54,304 )   $ 120,910  

 

NOTE 7 — Income Tax Information:

 

The tax character of distributions paid during the year ended October 31, 2023 and the year ended October 31, 2022 was as follows:

 

    FOR THE YEAR ENDED     FOR THE YEAR ENDED  
    OCTOBER 31, 2023     OCTOBER 31, 2022  
Alger Spectra Fund                
Distributions paid from:                
Ordinary Income   $ —     $ —  
Long-term capital gain     76,440,192       2,121,044,515  
Total distributions paid   $ 76,440,192     $ 2,121,044,515  
                 
Alger Dynamic Opportunities Fund                
Distributions paid from:                
Ordinary Income   $ —     $ 283,452  
Long-term capital gain     —       46,660,701  
Total distributions paid   $ —     $ 46,944,153  

 

- 84 -

 

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

    FOR THE YEAR ENDED     FOR THE YEAR ENDED  
    OCTOBER 31, 2023     OCTOBER 31, 2022  
Alger Emerging Markets Fund                
Distributions paid from:                
Ordinary Income   $ —     $ 157,447  
Long-term capital gain     —       980,135  
Total distributions paid   $ —     $ 1,137,582  
                 
Alger Responsible Investing Fund                
Distributions paid from:                
Ordinary Income   $ —     $ —  
Long-term capital gain     509,750       7,752,490  
Total distributions paid   $ 509,750     $ 7,752,490  

 

As of October 31, 2023, the components of accumulated earnings on a tax basis were as follows:

 

Alger Spectra Fund      
Undistributed ordinary income   $ —  
Undistributed long-term gains   —  
Net accumulated earnings   —  
Capital loss carryforwards     (64,237,882 )
Late year ordinary income losses     (18,515,854 )
Net unrealized appreciation     806,586,423  
Total accumulated earnings   $ 723,832,687  
         
Alger Dynamic Opportunities Fund        
Undistributed ordinary income   $ —  
Undistributed long-term gains     —  
Net accumulated earnings     —  
Capital loss carryforwards     (70,616,572 )
Late year ordinary income losses     (1,087,229 )
Net unrealized appreciation     2,446,560  
Total accumulated earnings   $ (69,257,241 )
         
Alger Emerging Markets Fund        
Undistributed ordinary income   $ —  
Undistributed long-term gains     —  
Net accumulated earnings     —  
Capital loss carryforwards     (14,500,011 )
Late year ordinary income losses     —  
Net unrealized appreciation     530,835  
Total accumulated earnings   $ (13,969,176 )

 

- 85 -

 

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

Alger Responsible Investing Fund        
Undistributed ordinary income   $ —  
Undistributed long-term gains     2,206,428  
Net accumulated earnings     2,206,428  
Capital loss carryforwards     —  
Late year ordinary income losses     (39,006 )
Net unrealized appreciation     42,806,164  
Total accumulated earnings   $ 44,973,586  

 

During the year ended October 31, 2023, the Alger Spectra Fund, the Alger Dynamic Opportunities Fund, and the Alger Emerging Markets Fund, for federal income tax purposes, had capital loss carryforwards of $64,237,882, $70,616,572 and $14,500,011, respectively. These amounts will not be subject to expiration under the Regulated Investment Company Modernization Act of 2010, and these amounts may be applied against future net realized gains until their utilization.

 

The difference between book-basis and tax-basis unrealized appreciation (depreciation) is determined annually and is attributable primarily to the tax deferral of losses on wash sales, U.S. Internal Revenue Code Section 988 currency transactions, nondeductible expenses on dividends sold short, tax treatment of partnership investments, the realization of unrealized appreciation of passive foreign investment companies, and the return of capital from real estate investment trust investments.

 

The Funds accrue tax on unrealized gains in foreign jurisdictions that impose a foreign capital tax. For the year ended October 31, 2023, this tax on unrealized gains was not material.

 

Permanent differences, primarily from net operating losses and real estate investment trusts and partnership investments sold by the Funds, resulted in the following reclassifications among the Funds’ components of net assets at October 31, 2023:

 

Alger Spectra Fund      
Distributable earnings   $ 25,698,513  
Paid-in Capital   $ (25,698,513 )
         
Alger Dynamic Opportunities Fund        
Distributable earnings   $ 3,941,044  
Paid-in Capital   $ (3,941,044 )
         
Alger Emerging Markets Fund        
Distributable earnings   $ 345,465  
Paid-in Capital   $ (345,465 )
         
Alger Responsible Investing Fund        
Distributable earnings   $ —  
Paid-in Capital   $ —  

 

- 86 -

 

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

NOTE 8 — Fair Value Measurements:

 

 

The following is a summary of the inputs used as of October 31, 2023 in valuing the Funds’ investments carried at fair value on a recurring basis. Based upon the nature, characteristics, and risks associated with their investments, the Funds have determined that presenting them by security type and sector is appropriate.

 

Alger Spectra Fund   TOTAL     LEVEL 1     LEVEL 2     LEVEL 3  
COMMON STOCKS                                
Communication Services   $ 404,542,322     $ 404,542,322     $ —     $ —  
Consumer Discretionary     363,536,381       344,800,192       18,736,189       —  
Energy     156,536,550       156,536,550       —       —  
Financials     150,702,914       150,702,914       —       —  
Healthcare     365,673,540       365,673,540       —       —  
Industrials     239,446,080       239,446,080       —       —  
Information Technology     1,080,412,942       1,080,412,942       —       —  
Materials     35,227,318       35,227,318       —       —  
Real Estate     58,879,517       58,879,517       —       —  
TOTAL COMMON STOCKS   $ 2,854,957,564     $ 2,836,221,375     $ 18,736,189     $ —  
PREFERRED STOCKS                                
Healthcare     — *     —       —       — *
Information Technology     7,111,465       —       —       7,111,465  
TOTAL PREFERRED STOCKS   $ 7,111,465     $ —     $ —     $ 7,111,465  
SPECIAL PURPOSE VEHICLE                                
Information Technology     10,980,063       —       —       10,980,063  
TOTAL INVESTMENTS IN SECURITIES   $ 2,873,049,092     $ 2,836,221,375     $ 18,736,189     $ 18,091,528  
SECURITIES SOLD SHORT                                
COMMON STOCKS                                
Consumer Discretionary     26,279,720       26,279,720       —       —  
Consumer Staples     7,079,951       7,079,951       —       —  
Financials     18,736,392       18,736,392       —       —  
Healthcare     31,170,986       31,170,986       —       —  
Industrials     20,703,063       20,703,063       —       —  
Information Technology     21,640,944       21,640,944       —       —  
Market Indices     84,902,032       84,902,032       —       —  
Materials     4,797,210       4,797,210       —       —  
TOTAL COMMON STOCKS   $ 215,310,298     $ 215,310,298     $ —     $ —  

 

Alger Dynamic Opportunities Fund   TOTAL     LEVEL 1     LEVEL 2     LEVEL 3  
COMMON STOCKS                                
Communication Services     18,871,751       18,871,751       —       —  
Consumer Discretionary     23,878,634       23,878,634       —       —  
Consumer Staples     1,388,992       1,388,992       —       —  
Energy     15,664,432       15,664,432       —       —  
Financials     15,775,597       15,775,597       —       —  
Healthcare     54,448,497       50,819,675       —       3,628,822  
Industrials     33,674,729       33,674,729       —       —  
Information Technology     47,928,791       47,928,791       —       —  
Real Estate     5,680,728       5,680,728       —       —  
Utilities     1,611,937       1,611,937       —       —  
TOTAL COMMON STOCKS   $ 218,924,088     $ 215,295,266     $ —     $ 3,628,822  

 

- 87 -

 

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

Alger Dynamic Opportunities Fund   TOTAL     LEVEL 1     LEVEL 2     LEVEL 3  
PREFERRED STOCKS                                
Healthcare   $ — *   $ —     $ —     $ — *
RIGHTS                                
Healthcare     85,753       —       —       85,753  
REAL ESTATE INVESTMENT TRUST                                
Real Estate     761,041       761,041       —       —  
SPECIAL PURPOSE VEHICLE                                
Information Technology     1,358,121       —       —       1,358,121  
SHORT TERM INVESTMENTS                                
U.S. Government     31,468,474       —       31,468,474       —  
PURCHASED OPTIONS                                
Consumer Discretionary     4,590       4,590       —       —  
Market Indices     660,440       660,440       —       —  
TOTAL PURCHASED OPTIONS   $ 665,030     $ 665,030     $ —     $ —  
TOTAL INVESTMENTS IN SECURITIES   $ 253,262,507     $ 216,721,337     $ 31,468,474     $ 5,072,696  
SECURITIES SOLD SHORT                                
COMMON STOCKS                                
Communication Services     998,490       998,490       —       —  
Consumer Discretionary     15,640,615       15,640,615       —       —  
Consumer Staples     1,359,206       1,359,206       —       —  
Financials     8,089,895       6,693,577       1,396,318       —  
Healthcare     11,671,345       11,671,345       —       —  
Industrials     10,489,545       10,489,545       —       —  
Information Technology     17,772,172       17,772,172       —       —  
Market Indices     18,361,246       18,361,246       —       —  
Materials     1,443,696       1,443,696       —       —  
Real Estate     165,995       165,995       —       —  
TOTAL COMMON STOCKS   $ 85,992,205     $ 84,595,887     $ 1,396,318     $ —  
REAL ESTATE INVESTMENT TRUST                                
Real Estate     2,892,673       2,892,673       —       —  
TOTAL SECURITIES SOLD SHORT   $ 88,884,878     $ 87,488,560     $ 1,396,318     $ —  
FINANCIAL DERIVATIVE INSTRUMENTS - LIABILITIES                                
OTC Contracts for difference   $ (439,597 )   $ —     $ (439,597 )   $ —  
Written Options     (81,765 )     (81,765 )     —       —  
TOTAL FINANCIAL DERIVATIVE INSTRUMENTS - LIABILITIES   $ (419,842 )   $ (81,765 )   $ (338,077 )   $ —  

 

Alger Emerging Markets Fund   TOTAL     LEVEL 1     LEVEL 2     LEVEL 3  
COMMON STOCKS                                
Communication Services     419,565       419,565       —       —  
Consumer Discretionary     7,731,051       5,849,103       1,881,948       —  
Consumer Staples     1,653,866       746,959       906,907       —  
Energy     757,076       757,076       —       —  
Financials     2,164,845       1,240,701       924,144       —  
Healthcare     1,042,720       330,250       712,470       —  
Industrials     2,040,995       603,645       1,437,350       —  
Information Technology     3,217,784       785,834       2,431,950       —  
TOTAL COMMON STOCKS   $ 19,027,902     $ 10,733,133     $ 8,294,769     $ —  

 

- 88 -

 

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

Alger Emerging Markets Fund   TOTAL     LEVEL 1     LEVEL 2     LEVEL 3  
RIGHTS                                
Industrials   $ 294     $ 294     $ —     $ —  
TOTAL INVESTMENTS IN SECURITIES   $ 19,028,196     $ 10,733,427     $ 8,294,769     $ —  

 

Alger Responsible Investing Fund   TOTAL     LEVEL 1     LEVEL 2     LEVEL 3  
COMMON STOCKS                                
Communication Services   $ 4,324,764     $ 4,324,764     $ —     $ —  
Consumer Discretionary     11,589,975       11,589,975       —       —  
Consumer Staples     1,839,868       1,839,868       —       —  
Financials     5,627,920       5,627,920       —       —  
Healthcare     8,823,779       8,823,779       —       —  
Industrials     4,821,685       4,821,685       —       —  
Information Technology     31,870,266       31,870,266       —       —  
Materials     1,428,902       1,428,902       —       —  
Utilities     453,691       453,691       —       —  
TOTAL COMMON STOCKS   $ 70,780,850     $ 70,780,850     $ —     $ —  
REAL ESTATE INVESTMENT TRUST                                
Real Estate     1,742,628       1,742,628       —       —  
TOTAL INVESTMENTS IN SECURITIES   $ 72,523,478     $ 72,523,478     $ —     $ —  

 

* Alger Spectra Fund’s and Alger Dynamic Opportunities Fund’s holdings of Prosetta Biosciences, Inc., Series D shares are classified as a Level 3 investment and are fair valued at zero as of October 31, 2023.

 

    FAIR VALUE
MEASUREMENTS
USING SIGNIFICANT
UNOBSERVABLE
INPUTS (LEVEL 3)		  
Alger Dynamic Opportunities Fund   Common Stocks  
Opening balance at November 1, 2022   $ 3,485,265  
Transfers into Level 3     —  
Transfers out of Level 3     —  
Total gains or losses        
Included in net realized gain (loss) on investments     —  
Included in net change in unrealized appreciation (depreciation) on investments     (572,972 )
Purchases and sales        
Purchases     716,529  
Sales     —  
Closing balance at October 31, 2023     3,628,822  
Net change in unrealized appreciation (depreciation) attributable to investments still held at October 31, 2023*   $ (572,972 )

 

* Net change in unrealized appreciation (depreciation) is included in net change in unrealized appreciation (depreciation) on investments in the accompanying statement of operations.

 

- 89 -

 

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

The following table provides quantitative information about each Fund’s Level 3 fair value measurements of its investments as of October 31, 2023. The table below is not intended to be all-inclusive, but rather provides information on the Level 3 inputs as they relate to each Fund’s fair value measurements.

 

    Fair Value
October 31,
2023		     Valuation
Methodology		   Unobservable
Input		   Input/Range     Weighted
Average Inputs
Alger Spectra Fund                        
Preferred Stocks   $ — *   Income Approach   Discount Rate     100.00%     N/A
Preferred Stocks     7,111,465     Market Approach   Revenue Multiple     11.0x-13.0x     N/A
Special Purpose Vehicle     10,980,063     Market Approach   Revenue Multiple     11.0x-13.0x     N/A
                             
Alger Dynamic Opportunities Fund
Common Stocks   $ 3,628,822     Market Approach   Transaction Price Revenue Multiple     N/A     N/A
                      5.0x-6.0x     N/A
Preferred Stocks     — *   Income Approach   Discount Rate     100.00%     N/A
Rights     85,753     Income Approach   Discount Rate Probability of Success     9.26%-9.75%
0.00%-60.00%		     N/A
N/A
Special Purpose Vehicle     1,358,121     Market Approach   Revenue Multiple     11.0x-13.0x     N/A

 

* Prosetta Biosciences, Inc., Series D shares are classified as a Level 3 investment and are fair valued at zero as of October 31, 2023.

 

The significant unobservable inputs used in the fair value measurement of each Fund’s securities are revenue and EBITDA multiples, discount rates, and the probability of success of certain outcomes. Significant increases and decreases in these inputs in isolation and interrelationships between these inputs would have resulted in significantly higher or lower fair value measurements than those noted in the table above. Generally, all other things being equal, increases in revenue and EBITDA multiples, decreases in discount rates, and increases in the probability of success result in higher fair value measurements, whereas decreases in revenues and EBITDA multiples, increases in discount rates, and decreases in the probability of success result in lower fair value measurements. For the year ended October 31, 2023, there were no changes in valuation methodology on Level 3 investments.

- 90 -

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

Certain of the Funds’ assets and liabilities are held at carrying amount or face value, which approximates fair value for financial reporting purposes. As of October 31, 2023, such assets were categorized within the ASC 820 disclosure hierarchy as follows:

 

    TOTAL     LEVEL 1     LEVEL 2     LEVEL 3  
Assets                                
Cash, foreign cash and cash equivalents:                                
Alger Spectra Fund   $ 43,660     $ —     $ 43,660     $ —  
Collateral held for short sales(a)     119,767,641       119,767,641       —       —  
Alger Dynamic Opportunities Fund     14,827,087       —       14,827,087       —  
Collateral held for short sales(a)     70,301,198       70,301,198       —       —  
Collateral pledged for OTC CFDs(c)     3,880,432       3,880,432       —       —  
Alger Emerging Markets Fund     668,559       4,222       664,337       —  
Alger Responsible Investing Fund     1,899,945       —       1,899,945       —  
                                 
Liabilities                                
Cash, foreign cash and cash equivalents:                                
Alger Spectra Fund                                
Due to broker(b)   $ (83,041,136 )   $ (83,041,136 )   $ —     $ —  

 

(a)  The collateral held for short sales balance represents restricted cash held at prime brokers as of October 31, 2023.

(b)  The due to broker balance represents a margin payable related to short sales due to prime brokers as of October 31, 2023.

(c)  The collateral held for the OTC CFDs balance represents restricted cash held at prime brokers as of October 31, 2023.

 

NOTE 9 — Derivatives:

 

 

FASB Accounting Standards Codification 815 – Derivatives and Hedging (“ASC 815”) requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements.

 

Options — The Funds seek to capture the majority of the returns associated with equity market investments. To meet this investment goal, the Funds invest in a broadly diversified portfolio of common stocks, the Funds may also buy and sell call and put options on equities and equity indexes. The Funds may also purchase call options to increase their exposure to the stock market and also provide diversification of risk. The Funds may also purchase put options in order to protect from significant market declines that may occur over a short period of time. The Funds may also write covered call and cash secured put options to generate cash flows while reducing the volatility of the Funds’ portfolios. The cash flows may be an important source of the Funds’ returns, although written call options may reduce the Funds’ ability to profit from increases in the value of the underlying security or equity portfolio. The value of a call option generally increases as the price of the underlying stock increases and decreases as the stock decreases in price. Conversely, the value of a put option generally increases as the price of the underlying stock decreases and decreases as the stock increases in price. The combination of the diversified stock portfolio and the purchase and sale of options is intended to provide the Funds with the majority of the returns associated with equity market investments but with reduced volatility and returns that are augmented with the cash flows from the sale of options. During the year ended October 31, 2023, options were used in accordance with these objectives.

- 91 -

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

The Funds’ option contracts were not subject to any rights of offset with any counterparty. All of the Funds’ options were exchange traded which utilize a clearinghouse that acts as an intermediary between buyer and seller, receiving initial and maintenance margin from both, and guaranteeing performance of the option contract. The purchased options included on the Statements of Assets and Liabilities are exchange traded and not subject to offsetting.

 

For the year ended October 31, 2023, Alger Dynamic Opportunities Fund had option purchases of $1,804,833 and option sales of $1,204,055. The average notional volume of contracts for purchased options and written options for the year ended October 31, 2023 was $18,398,639 and $17,164,903, respectively, based on notional amount. Options were held during 10 months of the period.

 

Forward foreign currency contracts — In connection with portfolio purchases and sales of securities denominated in foreign currencies, the Funds may enter into forward foreign currency contracts. Additionally, the Funds may enter into such contracts to economically hedge certain other foreign currency denominated investments. These contracts are valued at the current cost of covering or offsetting such contracts and the related realized and unrealized foreign exchange gains and losses are included in the Statements of Operations. In the event that counterparties fail to settle these currency contracts or the related foreign security trades, a Fund could be exposed to foreign currency fluctuations.

 

For the year ended October 31, 2023, the average notional amount of forward foreign currency contracts outstanding for Alger Emerging Markets Fund was $4,175. Forward foreign currency contracts were held during one month of the period.

 

The effect of derivative instruments on the accompanying Statements of Operations for the year ended October 31, 2023, is as follows:

 

NET REALIZED GAIN/(LOSS) ON DERIVATIVES
Alger Emerging Markets Fund        
Derivatives not accounted for as hedging instruments        
Forward Foreign Currency Contracts   $ (1,862 )
Total   $ (1,862 )
         
Alger Dynamic Opportunities Fund        
Purchased Options   $ (567,987 )
Written Options     350,570  
Total   $ (217,417 )

 

NET CHANGE IN UNREALIZED APPRECIATION ON OPTIONS
Alger Dynamic Opportunities Fund        
Derivatives not accounted for as hedging instruments     Options  
Purchased Options   $ 82,443  
Written Options     61,834  
Total   $ 144,277  
- 92 -

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

Contracts for Difference — The Funds may enter into CFDs. CFDs are leveraged derivative instruments that allow a Fund to take a position on the change in the market price of an underlying asset, such as a stock, or the value of an index or currency exchange rate. With a short CFD, a Fund is seeking to profit from a decrease in the market price of the asset. CFDs are subject to liquidity risk because the liquidity of CFDs is based on the liquidity of the underlying instrument, and are subject to counterparty risk, i.e., the risk that the counterparty to the CFD transaction may be unable or unwilling to make payments or to otherwise honor its financial obligations under the terms of the contract. It is also possible that the market price of the CFD will move between the time the order is placed by a Fund and when it is executed by the issuer, which can result in the trade being executed at a less favorable price. CFDs, like many other derivative instruments, involve the risk that, if the derivative security declines in value, additional margin would be required to maintain the margin level. The seller may require a Fund to deposit additional sums to cover this decline in value, and the margin call may be made at short notice. If additional margin is not provided in time, the seller may liquidate the positions at a loss which a Fund is liable. The potential for margin calls and large losses are much greater in CFDs than in other leveraged products. Most CFDs are traded OTC. CFDs are not registered with the SEC or any U.S. regulator, and are not subject to U.S. regulation. In a short position, a Fund will receive or pay an amount based upon the amount, if any, by which the notional amount of the CFD would have decreased or increased in value had it sold the particular stocks short, less the dividends that would have been paid on those stocks, plus a floating rate of interest on the notional amount of the CFD. All of these components are reflected in the market value of the CFD.

 

    ASSET DERIVATIVES 2023   LIABILITY DERIVATIVES 2023
Alger Dynamic Opportunities Fund        
         
OTC CFDs+   Assets Fair Value   $ —     Liabilities Fair Value   $ (439,597 )
Total       $ —         $ (439,597 )

+ Equity contracts.

 

For the year ended October 31, 2023, the average monthly notional amount of OTC CFDs for Alger Dynamic Opportunities Fund was $5,907,825. OTC CFDs were held during 12 months of the period. The effect of OTC CFDs on the accompanying Statement of Operations for the year ended October 31, 2023 was as follows:

 

NET REALIZED LOSS ON CFDS
Alger Dynamic Opportunities Fund        
OTC CFDs+   $ (3,850,414 )
Total   $ (3,850,414 )
- 93 -

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

NET CHANGE IN UNREALIZED APPRECIATION ON CFDS
Alger Dynamic Opportunities Fund      
OTC CFDs+   $ 984,129  
Total   $ 984,129  

 

+ Equity contracts.

 

Disclosure about Offsetting Assets and Liabilities — In order to better define contractual rights under derivative contracts and to secure rights that will help the Funds mitigate their counterparty risk, the Investment Manager may, on behalf of the Funds, enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs OTC derivatives contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The ISDA Master Agreement may give a Fund the right, upon an event of default by the applicable counterparty or a termination of the agreement, to close out all transactions traded under such agreement and to net amounts owed under each transaction to one net amount payable by one party to the other. Absent an event of default by the counterparty or a termination of the agreement, the ISDA Master Agreement does not result in an offset of reported amounts of assets and liabilities in the Statements of Assets and Liabilities across the transactions between a Fund and the applicable counterparty. The right to offset and net payments across all transactions traded under the ISDA Master Agreement could result in a reduction of a Fund’s credit risk to such counterparty equal to any amounts payable by a Fund under the applicable transactions, if any. The enforceability of the right to offset may vary by jurisdiction.

 

Cash collateral that has been received or pledged to cover obligations under derivative contracts, if any, will be reported separately in the Statements of Assets and Liabilities. Generally, the amount of collateral due from or to a counterparty is subject to a minimum transfer threshold amount before a transfer is required, which may vary by counterparty. Collateral pledged for the benefit of a Fund and/or counterparty is held in segregated accounts by the Fund’s custodian and cannot be sold, re-pledged, assigned or otherwise used while pledged. The portion of such collateral representing cash, if any, is reflected as deposits with counterparties and, in the case of cash pledged by a counterparty for the benefit of a Fund, as a corresponding liability in the Statements of Assets and Liabilities. Securities pledged by a Fund as collateral, if any, are identified as such in the Schedule of Investments. The carrying amount of such deposits due to brokers at October 31, 2023 approximated their fair value. If measured at fair value, such deposits would have been considered as Level 2 in the fair value hierarchy.

 

- 94 -

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

The following table presents the Funds’ gross and net amounts of assets and liabilities, by derivative type, available for offset under a master netting agreement, or similar agreement as of October 31, 2023:

 

Alger Dynamic Opportunities Fund

 

 

    Assets     Liabilities  
    Gross Amounts of
Recognized Assets
Presented in the
Statements of Assets
and Liabilities		     Gross Amounts of
Recognized Liabilities
Presented in the
Statements of Assets
and Liabilities		  
OTC CFDs+   $ —     $ (439,597 )
Total   $ —     $ (439,597 )

 

+ Equity contracts.

 

The following table presents the Funds’ derivative assets and liabilities by counterparty net of amounts available for offset under master netting or similar agreements, and net of related collateral received or pledged as of October 31, 2023:

 

Alger Dynamic Opportunities Fund

 

 

Counterparty     Gross Amounts of
Recognized Assets
Presented in the
Statements of Assets
and Liabilities(a)		     Financial
Instruments
Available
for Offset		     Collateral
Pledged(b)		     Net Amount(c)
(Not Less than $0)		  
BNP     $ 439,597     $ —     $ (439,597 )   $ —  

 

(a)  Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar agreements that are not offset on the Statements of Assets and Liabilities.

(b)  In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization.

(c)  Net amount represents the net amount payable to the counterparty in the event of default.

 

NOTE 10 — Principal Risks:

 

 

Alger Spectra Fund - Investing in the stock market involves risks, including the potential loss of principal. The value of these securities, like other investments, may move up or down, sometimes rapidly and unpredictably. Your Fund shares at any point in time may be worth less than what you invested, even after taking into account the reinvestment of Fund dividends and distributions. Local, regional or global events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases and similar public health threats, recessions, or other events could have a significant impact on investments. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Your investment in Fund shares represents an indirect investment in the securities owned by the Fund. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. Foreign securities involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. Short sales could increase market exposure, magnifying losses and increasing volatility. Leverage increases volatility in both up and down markets and its costs may exceed the returns of borrowed securities. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

- 95 -

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

Alger Dynamic Opportunities Fund - Investing in the stock market involves risks, including the potential loss of principal. The value of these securities, like other investments, may move up or down, sometimes rapidly and unpredictably. Your Fund shares at any point in time may be worth less than what you invested, even after taking into account the reinvestment of Fund dividends and distributions. Local, regional or global events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases and similar public health threats, recessions, or other events could have a significant impact on investments. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. Options and short sales could increase market exposure, magnifying losses and increasing volatility. Assets may be invested in Financial Derivatives Instruments (FDIs) such as Total Return Swaps (TRS) or options, which involve risks including possible counterparty default, illiquidity, and the risk of losses greater than if they had not been used. Issuers of convertible securities may be more sensitive to economic changes. Investing in companies of small capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Leverage increases volatility in both up and down markets and its costs may exceed the returns of borrowed securities. Foreign securities involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

 

Alger Emerging Markets Fund - Investing in the stock market involves risks, including the potential loss of principal. The value of these securities, like other investments, may move up or down, sometimes rapidly and unpredictably. Your Fund shares at any point in time may be worth less than what you invested, even after taking into account the reinvestment of Fund dividends and distributions. Local, regional or global events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases and similar public health threats, recessions, or other events could have a significant impact on investments. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. Foreign securities, Frontier Markets, and Emerging Markets involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio. Investing in companies of small capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

- 96 -

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

Alger Responsible Investing Fund - Investing in the stock market involves risks, including the potential loss of principal. The value of these securities, like other investments, may move up or down, sometimes rapidly and unpredictably. Your Fund shares at any point in time may be worth less than what you invested, even after taking into account the reinvestment of Fund dividends and distributions. Local, regional or global events such as environmental or natural disasters, war, terrorism, pandemics, outbreaks of infectious diseases and similar public health threats, recessions, or other events could have a significant impact on investments. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. The environmental, social and governance investment criteria may limit the number of investment opportunities available, and as a result, returns may be lower than vehicles not subject to such considerations. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.

 

NOTE 11 — Affiliated Securities:

 

 

During the year ended October 31, 2023, as disclosed in the following table, certain Funds held 5% or more of the outstanding voting securities of the issuers listed below. As such, these issuers were “affiliated persons” of the applicable Fund(s) for purposes of the 1940 Act. Transactions during the year ended October 31, 2023 with such affiliated persons are summarized below. During this period, other Funds in the Trust may also have held voting shares of the issuers at levels below 5%.

 

Security   Shares
Held at
October 31,
2022		     Shares
Purchased		     Shares
Sold		     Shares
Held at
October 31,
2023		     Dividend
Income		     Realized
Gain (Loss)		     Net Change
in
Unrealized
App(Dep)		     Value at
October 31,
2023		  
Alger Spectra Fund                            
Preferred Stocks                                    
Prosetta Biosciences, Inc., Series D**     2,912,012       —       —       2,912,012     $ —     $ —     $ —     $ — *
Special Purpose Vehicle                                    
Crosslink Ventures C, LLC, Cl. A***     —       —       —       —       —       —       (1,005,774 )     6,767,586  
Crosslink Ventures C, LLC, Cl. B***     —       —       —       —       —       —       (665,205 )     4,212,477  
Total                                   $ —     $ —     $ (1,670,979 )   $ 10,980,063  
- 97 -

THE ALGER FUNDS II

NOTES TO FINANCIAL STATEMENTS (Continued)

 

 

Security   Shares
Held at
October 31,
2022		     Shares
Purchased		     Shares
Sold		     Shares
Held at
October 31,
2023		     Dividend
Income		     Realized
Gain (Loss)		     Net Change
in
Unrealized
App(Dep)		     Value at
October 31,
2023		  
Alger Dynamic Opportunities Fund                      
Preferred Stocks                                    
Prosetta Biosciences, Inc., Series D**     41,418       —       —       41,418     $ —     $ —     $ —     $ —  
Special Purpose Vehicle                                    
Crosslink Ventures C, LLC, Cl. A***     —       —       —       —     $ —     $ —     $ (126,577 )   $ 851,703  
Crosslink Ventures C, LLC, Cl. B***     —       —       —       —       —       —       (79,970 )     506,418  
Total                           $ —     $ —     $ —     $ (206,547 )   $ 1,358,121  

 

*  Prosetta Biosciences, Inc., Series D shares are classified as a Level 3 investment and are fair valued at zero as of October 31, 2023.

**  Prosetta Biosciences, Inc., Series D is deemed to be an affiliate of the Funds because the Funds and Prosetta Biosciences, Inc., Series D are under common control.

*** The Alger Fund Complex and other entities managed by Alger Management fully own Crosslink Ventures C, LLC, Class A and Crosslink Ventures C, LLC, Class B. There were no capital increases or decreases for the year ended October 31, 2023.

 

NOTE 12 — Subsequent Events:

 

 

Management of each Fund has evaluated events that have occurred subsequent to October 31, 2023, through the issuance date of the Financial Statements. No such events have been identified which require recognition and/or disclosure.

 

- 98 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Shareholders and the Board of Trustees of The Alger Funds II:

 

Opinion on the Financial Statements and Financial Highlights

 

We have audited the accompanying statements of assets and liabilities of The Alger Funds II comprised of Alger Spectra Fund, Alger Dynamic Opportunities Fund, Alger Emerging Markets Fund, and Alger Responsible Investing Fund (collectively, the “Funds”), including the schedules of investments, as of October 31, 2023, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the funds constituting The Alger Funds II as of October 31, 2023, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.

- 99 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2023, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

 

Deloitte & Touche LLP

New York, New York

December 22, 2023

 

We have served as the auditor of one or more investment companies within the Alger group of investment companies since 2009.

- 100 -

THE ALGER FUNDS II

ADDITIONAL INFORMATION (Unaudited)

 

 

Shareholder Expense Example

 

 

As a shareholder of a 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 a 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 May 1, 2023 and ending October 31, 2023 and held for the entire period.

 

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 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 Six Months Ended October 31, 2023” 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 actual expense ratio for each class of the Fund’s 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.

- 101 -

THE ALGER FUNDS II

ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

          Beginning
Account
Value
May 1, 2023		     Ending
Account
Value
October 31, 2023		     Expenses
Paid During
the Six Months
Ended
October 31,
2023(a)		     Annualized
Expense Ratio
For the
Six Months
Ended
October 31,
2023(b)		  
Alger Spectra Fund                        
Class A   Actual     $ 1,000.00     $ 998.90     $ 7.56       1.50 %
    Hypothetical(c)       1,000.00       1,017.64       7.63       1.50  
Class C   Actual       1,000.00       1,040.50       11.78       2.29  
    Hypothetical(c)       1,000.00       1,013.66       11.62       2.29  
Class I   Actual       1,000.00       1,054.50       7.77       1.50  
    Hypothetical(c)       1,000.00       1,017.64       7.63       1.50  
Class Y   Actual       1,000.00       1,056.90       5.50       1.06  
    Hypothetical(c)       1,000.00       1,019.86       5.40       1.06  
Class Z   Actual       1,000.00       1,056.50       6.01       1.16  
    Hypothetical(c)       1,000.00       1,019.36       5.90       1.16  
                                       
Alger Dynamic Opportunities Fund
Class A   Actual     $ 1,000.00     $ 874.40     $ 9.69       2.05 %
    Hypothetical(c)       1,000.00       1,014.87       10.41       2.05  
Class C   Actual       1,000.00       910.10       13.58       2.82  
    Hypothetical(c)       1,000.00       1,010.99       14.29       2.82  
Class Z   Actual       1,000.00       924.20       8.39       1.73  
    Hypothetical(c)       1,000.00       1,016.48       8.79       1.73  
                                       
Alger Emerging Markets Fund
Class A   Actual     $ 1,000.00     $ 955.10      $ 7.74       1.57 %
    Hypothetical(c)       1,000.00       1,017.29       7.98       1.57  
Class C   Actual       1,000.00       994.80       11.66       2.32  
    Hypothetical(c)       1,000.00       1,013.51       11.77       2.32  
Class I   Actual       1,000.00       1,009.10       7.44       1.47  
    Hypothetical(c)       1,000.00       1,017.80       7.48       1.47  
Class Z   Actual       1,000.00       1,012.20       5.12       1.01  
    Hypothetical(c)       1,000.00       1,020.11       5.14       1.01  
- 102 -

THE ALGER FUNDS II

ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

          Beginning
Account
Value
May 1, 2023		     Ending
Account
Value
October 31, 2023		     Expenses
Paid During
the Six Months
Ended
October 31,
2023(a)		     Annualized
Expense Ratio
For the
Six Months
Ended
October 31,
2023(b)		  
Alger Responsible Investing Fund
Class A   Actual     $ 1,000.00     $ 992.60     $ 6.73       1.34 %
    Hypothetical(c)       1,000.00       1,018.45       6.82       1.34  
Class C   Actual       1,000.00       1,033.40       10.87       2.12  
    Hypothetical(c)       1,000.00       1,014.52       10.76       2.12  
Class I   Actual       1,000.00       1,046.70       6.96       1.35  
    Hypothetical(c)       1,000.00       1,018.40       6.87       1.35  
Class Z   Actual       1,000.00       1,049.50       4.91       0.95  
    Hypothetical(c)       1,000.00       1,020.42       4.84       0.95  

 


 (a) Expenses are equal to the annualized expense ratio of the respective share class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

(b) Annualized.

(c) 5% annual return before expenses.
- 103 -

THE ALGER FUNDS II

ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

Tax Information

 

Alger Spectra Fund and Alger Responsible Investing Fund designate $76,440,192 and $509,750, respectively, as approximate amounts of capital gain dividend for the purpose of the dividends paid deduction.

 

Shareholders should not use the above information to prepare their tax returns. Since the Funds’ fiscal year is not the calendar year, another notification will be sent with respect to calendar year 2023. Such notification, which will reflect the amount to be used by tax payers on their federal income tax returns, will be made in conjunction with Form 1099 DIV and will be mailed in January 2024. Shareholders are advised to consult their own tax advisers with respect to the tax consequences of their investment in a Fund.

- 104 -

THE ALGER FUNDS II

ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

Trustees and Officers of the Trust

 

Information about the trustees and officers of the Trust is set forth below. Each Trustee serves until an event of termination, such as death or resignation, or until his or her successor is duly elected; each officer’s term of office is one year.

 

Additional information regarding the Trustees and Officers of the Trust is available in the Trust’s Statement of Additional Information.

 

Name (Year of Birth)
and Address(1)		 Position(s)
Held with
the Trust and
Length of
Time Served		 Principal Occupation(s)
During Past Five Years		 Number
of Funds
in the
Alger Fund
Complex(3)
which are
Overseen
by Trustee		 Other
Directorships
Held by
Trustee
During
Past Five
Years
Interested Trustee(2):        
         
Hilary M. Alger (1961) Trustee since 2003 Non-Profit Fundraising Consultant since 2015, Schultz & Williams, Non-profit Fundraising Consultant since 2014, Hilary Alger Consulting Emeritus Trustee since 2020 and Trustee from 2013 to 2020, Philadelphia Ballet; School Committee Member  since 2017, Germantown Friends School. 28 Board of Directors, Alger Associates, Inc.; Director of Target Margin Theater
Non-Interested Trustees:      
       
Charles F. Baird, Jr. (1953) Trustee since 2000 Managing Partner since 1997, North Castle Partners (private equity securities group). 28 None
Roger P. Cheever (1945) Trustee since 2000 Retired; Associate Vice President for Development Strategy from 2020 to 2021 and Associate Vice President Principal Gifts from 2008 to 2020, Harvard University. 28 Board of Directors, Alger SICAV Fund
David Rosenberg (1962) Trustee since 2007 Associate Professor of Law since August 2000, Zicklin School of Business, Baruch College, City University of New York. 28 None
Nathan E. Saint-Amand M.D. (1938) Trustee since 1986 Medical doctor in private practice since 1970; Member of the Board of  the Manhattan Institute (non-profit policy research) since 1988. 28 None

 

(1) The address of each Trustee is c/o Fred Alger Management, LLC, 100 Pearl Street, 27th Floor, New York, NY 10004.

(2) Ms. Alger is an “interested person” (as defined in the Investment Company Act of 1940, as amended) of the Trust by virtue of her ownership control of Alger Associates, Inc., which indirectly controls Alger Management and its affiliates.

(3) “Alger Fund Complex” refers to the Trust and the five other registered investment companies managed by Alger Management and the series therof. Each Trustee serves until an event of termination, such as death or resignation, or until his or her successor is duly elected. Each of the Trustees serves on the board of trustees of the other five registered investment companies in the Alger Fund Complex.

- 105 -

THE ALGER FUNDS II

ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

Name (Year of Birth), Position
with Trust and Address(1)		 Principal Occupations Officer
Since
Officers(2):    
     
Hal Liebes (1964)
President,
Principal Executive Officer		 Executive Vice President, Chief Operating Officer (“COO”) and Secretary, Alger Management; COO and Secretary, Alger Associates, Inc.; Director, Alger SICAV; Vice President, COO, Manager and Secretary, Alger Capital, LLC and Alger Group Holdings,  LLC;  Executive  Director  and  Chairman,  Alger Management, Ltd.; COO and Secretary, Weatherbie Capital, LLC Secretary and Manager Alger Apple Real Estate LLC; Manager, Alger Partners Investors I LLC, Alger Partners Investors II LLC, Alger Partners Investors-Crossbay LLC, and Alger Partners Investors KEIGF; Secretary, Alger Boulder LLC. 2005
Tina Payne (1974)
Secretary,
Chief Compliance Officer,
Chief Legal Officer		 Senior Vice President, General Counsel, Chief  Compliance Officer (“CCO”) and Assistant Secretary, Alger Management; Senior Vice President, General Counsel, and Secretary, Alger LLC; CCO and Authorized Signer, Alger Management, Ltd.; Vice President and Assistant Secretary, Alger Group Holdings, LLC; Assistant Secretary, Weatherbie Capital, LLC. 2017
Michael D. Martins (1965)
Treasurer,
Principal Financial Officer		 Senior Vice President of Alger Management. 2005
Sergio M. Pavone (1961)
Assistant Treasurer		 Vice President of Alger Management. 2007
Mia G. Pillinger (1989)
Assistant Secretary		 Vice President and Associate Counsel of Alger Management. Formerly, Associate at Willkie Farr & Gallagher, LLP, from 2016 to 2020. 2020
Sushmita Sahu (1981)
AML Compliance Officer		 Vice President of Alger Management. 2021

 


 (1) The address of each officer is c/o Fred Alger Management, LLC, 100 Pearl Street, 27th Floor, New York, NY 10004.

(2) Each officer’s term of office is one year. Each officer serves in the same capacity for the other funds in the Alger Fund Complex.

 

The Statement of Additional Information contains additional information about the Trust’s Trustees and officers and is available without charge upon request by calling (800) 992-3863.

- 106 -

 

THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

Board Approval of Investment Advisory Agreements

 

 

At a meeting held on September 19, 2023 (the “Meeting”), the Board of Trustees (the “Board”) of The Alger Funds II (the “Trust”), including a majority of the trustees who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the Trust (the “Independent Trustees”), reviewed and approved the continuation of the investment advisory agreement between Fred Alger Management, LLC (“Fred Alger Management”) and the Trust, on behalf of each Fund, and the investment sub-advisory agreement between Fred Alger Management and Weatherbie Capital, LLC (the “Sub-Adviser”), an affiliate of Fred Alger Management, on behalf of Alger Dynamic Opportunities Fund (each, a “Management Agreement”), for an additional one-year period. Fred Alger Management and the Sub-Adviser are collectively referred to herein as the “Manager.”

 

In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager and its representatives at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information the Manager provided in response to a request for information Independent Trustee counsel submitted to the Manager on behalf of the Independent Trustees in connection with the Board’s annual contract consideration, as well as information provided in response to a supplemental request from Independent Trustee counsel on behalf of the Independent Trustees. The materials for the Meeting included a presentation and analysis of the Funds and the Manager by FUSE Research Network LLC (“FUSE”), an independent consulting firm. The Board also received a presentation from FUSE representatives at the Meeting and, among other things, received a description of the methodology FUSE used to select the mutual funds included in each Fund’s Peer Universe and Peer Group (as described below). The Board considered the information provided to it about the Funds together, and with respect to each Fund separately, as the Board deemed appropriate.

 

The Independent Trustees also received advice from, and met separately with, their Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. The Independent Trustees also received a memorandum from Independent Trustee counsel discussing the legal standards and their duties in considering the continuation of the Management Agreements, and counsel reviewed those standards with the Independent Trustees during their separate meeting. The Independent Trustees also met separately with senior management of the Manager, during which time the Independent Trustees discussed various matters related to proposed continuation of the Management Agreements.

 

The Board reviewed the materials provided and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the short- and long-term investment performance of each Fund; (iii) the costs of the services the Manager provided and profits it realized; (iv) the extent to which economies of scale are realized as a Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund shareholders. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.

 

- 107 -

 

THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

In the discussions that follow, reference is made to the “median” in the Peer Group and Peer Universe categories. With respect to performance, below median performance represents performance that is worse relative to the median, and above median performance represents performance that is better relative to the median of the funds in the relevant Performance Universe. With respect to expenses, below median fees or expenses represent fees or expenses that are lower relative to the median, and above median fees or expenses represent fees or expenses that are higher relative to the median of the funds in the relevant Expense Group (as described below). FUSE information is calculated on a share class basis. References appearing below with regard to a Fund’s performance results and comparative fees and expenses generally relate to Class A shares of the Fund (each Fund’s oldest share class).

 

In particular, in approving the continuance of each Management Agreement, the Board considered the following factors:

 

Nature, Extent and Quality of Services

The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager to the Funds. This information included, among other things, the qualifications, background and experience of the professional personnel who perform services for the Funds; the structure of investment professional compensation; oversight of third-party service providers; short- and long-term investment performance, fee and expense information; fees and payments to intermediaries for fund administration, transfer agency and shareholder services; legal and compliance matters; risk controls; pricing and other services provided by the Manager; and the range of advisory fees the Manager charged to other funds and accounts under its management, including the Manager’s explanation of differences among such funds and accounts and the Funds where relevant. The Board noted that it received information at regular meetings throughout the year regarding the services rendered by the Manager concerning the management of each Fund’s affairs, including certain portfolio manager presentations, and Fred Alger Management’s role in coordinating and overseeing providers of other services to the Funds. The Board also noted the work undertaken by the Manager with respect to implementing new regulatory requirements applicable to the Funds.

 

The Board noted Fred Alger Management’s history and expertise in the “growth” style of investment management, as well as Fred Alger Management’s consistency in applying its “growth” style investment philosophy and process. With respect to the Alger Dynamic Opportunities Fund, the Board also considered the investment approach of the Sub- Adviser, which takes a fundamental, bottom-up research approach to investing in growth equities, similar to that of Fred Alger Management. The Board noted the length of time the Manager had provided services as an investment adviser to each Fund and also noted FUSE’s analysis that certain Funds’ long-term performance record supports Fred Alger Management’s view on its overall investment capabilities.

 

- 108 -

 

THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a Fund that is part of the Alger Family of Funds. The Board noted the continuing strong financial position of the Manager and its commitment to the fund business.

 

Following consideration of such information, the Trustees determined that they remain satisfied with the nature, extent and quality of services provided by the Manager to the Funds under the Management Agreements.

 

Fund Performance

The Board reviewed and considered the performance results of each Fund over various time periods. The Board considered the performance returns for each Fund in comparison to the performance returns of a universe of mutual funds deemed comparable to the Fund based on various investment, operational, and pricing characteristics (“Peer Universe”), and a group of mutual funds from within such Peer Universe deemed comparable to the Fund based primarily on investment strategy similarity (“Peer Group”), each as selected by FUSE, as well as to the Fund’s benchmark index. The Board noted that long-term performance could be impacted by one period of significant outperformance or underperformance.

 

The Board also reviewed and considered Fund performance reports provided by management and discussions that occurred with investment personnel and senior management at Board meetings throughout the year. The Board further noted that representatives of the Manager review with the Trustees the recent and longer-term performance of each Fund, including contributors to and detractors from Fund performance at every quarterly meeting of the Board throughout the year. In considering the Funds’ performance generally, the Board observed the Manager’s consistency in implementing its growth style investment process and philosophy for the Funds and considered how a strategy’s “growthiness” as compared to peers can impact relative performance results, even among comparisons that either FUSE or the Manager already have identified as having growth characteristics. In this regard, the Board considered FUSE’s commentary regarding the Funds’ growth investment style as compared to a universe of peers comprised of actively managed funds within each Fund’s Morningstar category and as compared to each Fund’s benchmark index, as measured by Morningstar’s Raw Value-Growth score.

 

The Trustees concluded that each Fund’s performance was acceptable, including particularly in the context of management’s plans to address underperformance where applicable. Further discussion of the Board’s considerations with respect to each Fund’s performance is set forth below.

 

Alger Spectra Fund. The Board noted that the Fund’s annualized total return for the one-year period outperformed the median of its Peer Group, and for the three-, five-and 10-year periods underperformed the median of its Peer Group. The Board also noted that the Fund’s annualized total return for the one- and 10-year periods was in the third quartile of its Peer Universe, and for the three- and five-year periods was in the fourth quartile of its Peer Universe. The Board considered FUSE’s commentary that the Fund has produced improved near-term performance and that all cap growth strategies with the lowest “growth” bent significantly outperformed their growthier peers during the previous three years, which contributed to the Fund’s lagging relative underperformance.

 

- 109 -

 

THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

Alger Dynamic Opportunities Fund. The Board noted that the Fund’s annualized total return for the one- and three-year periods underperformed the median of its Peer Group, and for the five-, and 10-year periods outperformed the median of its Peer Group. The Board also noted that the Fund’s annualized total return for the one- and three-year periods was in the third quartile of its Peer Universe, and for the five- and 10-year periods was in the first quartile of its Peer Universe. The Board considered FUSE’s commentary that the Fund’s growth bias relative to its peers and comparable universe represents a large source of recent relative underperformance.

 

Alger Emerging Markets Fund. The Board noted that the Fund’s annualized total return for the one-, three-, five- and 10-year periods underperformed the median of its Peer Group. The Board also noted that the Fund’s annualized total return for the one- and three-year periods was in the fourth quartile of its Peer Universe, and for the five- and 10-year periods was in the third quartile of its Peer Universe. The Board considered FUSE’s commentary about the impact of growth bias on relative performance results.

 

Alger Responsible Investing Fund. The Board noted that the Fund’s annualized total return for the one- and five-year periods outperformed or was equal to the median of its Peer Group, and for the three- and 10-year periods underperformed the median of its Peer Group. The Board also noted that the Fund’s annualized total return for the one- and five-year periods was in the second quartile of its Peer Universe, and for the three- and 10-year period was in the third quartile of its Peer Universe.

 

Comparative Fees and Expenses

For each Fund, the Board reviewed and considered the contractual management fee (the “Contractual Management Fee”) payable by the Fund to Fred Alger Management in light of the nature, extent and quality of the services provided by the Manager pursuant to the Management Agreements. The Board also reviewed and considered any fee waiver and/ or expense reimbursement arrangements for each Fund, including specific share classes thereof as well as any changes to specific class expense reimbursement arrangements that the Board had made during the prior year, and considered the actual fee rate (after taking any waivers and reimbursements into account) payable by the Fund (the “Actual Management Fee”). Additionally, the Board received and considered information comparing each Fund’s Contractual Management Fee, Actual Management Fee and overall expenses, including administrative fees payable to Fred Alger Management, with those of the funds in the Peer Group provided by FUSE. The Board reviewed the methodology used by FUSE in calculating expense information, including that for purposes of the comparisons below, the Contractual Management Fee used by FUSE for the Fund and peers includes the advisor fee and administrative fee, if a fund reports both.

 

- 110 -

 

THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

The Board discussed the factors that could contribute to each Fund’s Contractual Management Fee, Actual Management Fee or total expenses being above or below the median of the Fund’s Peer Group. The Board concluded that the Contractual Management Fee charged to each Fund is reasonable in relation to the services rendered by Fred Alger Management and is the product of arm’s length negotiations. Further discussion of the Board’s considerations with respect to each Fund’s comparative fees and expenses is set forth below.

 

Alger Spectra Fund. The Board noted that the Contractual Management Fee was above the median and in the third quartile of its Peer Group and that the Fund’s total expenses were above the median and in the fourth (most expensive) quartile of its Peer Group. The Board noted FUSE’s remarks about the specialized nature of the strategy, and that the Fund is only 0.05% higher than the median of its Peer Group for total net expenses.

 

Alger Dynamic Opportunities Fund. The Board noted that the Contractual Management Fee for the Fund was below the median and in the first (least expensive) quartile of its Peer Group, and that total expenses for the Fund were above the median and in the fourth (most expensive) quartile of its Peer Group. The Board also noted that, with respect to the portion of the Fund’s portfolio managed by the Sub-Adviser, the Sub-Adviser is paid by Fred Alger Management out of the management fee Fred Alger Management receives from the Fund.

 

Alger Emerging Markets Fund. The Board noted that the Contractual Management Fee for the Fund was below the median and in the first (least expensive) quartile of its Peer Group, and that total expenses for the Fund were above the median and in the fourth (most expensive) quartile of its Peer Group.

 

Alger Responsible Investing Fund. The Board noted that the Contractual Management Fee and total expenses for the Fund were above the median and in the third quartile and fourth (most expensive) quartile of its Peer Group, respectively. The Board considered FUSE’s commentary that the Fund’s strategy is highly unique in providing an ESG investment option to investors to investors also seeking Fred Alger Management’s growth style. The Board also considered, and subsequently approved, Fred Alger Management’s proposal to decrease the expense cap for Class A shares of the Fund effective February 29, 2024.

 

In connection with its consideration of each Fund’s fees payable under the Management Agreement, the Board also received information on the range of fees charged by the Manager for funds and accounts of a similar investment strategy to each Fund that are under its management. The Board noted management’s explanation that comparisons with such accounts may be of limited relevance given the different structures and regulatory requirements of mutual funds, such as the Funds, versus those accounts and the differences in the levels of services required by the Funds as compared to those accounts.

 

Profitability

The Board reviewed and considered information regarding the profits realized by Fred Alger Management in connection with the operation of each Fund. In this respect, the Board considered overall profitability, including in comparison to certain investment advisory peers, as well as the profits of Fred Alger Management in providing investment management and other services to each Fund during the year ended June 30, 2023. The Board also reviewed the profitability methodology and any changes thereto, noting that management maintains a consistent methodology year to year. The Board considered FUSE’s view that Fred Alger Management’s expense allocation policies align with accepted industry practices.

 

- 111 -

 

THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

The Board noted that costs incurred in establishing and maintaining the infrastructure necessary for the mutual fund operations conducted by Fred Alger Management may not be fully reflected in the expenses allocated to each Fund in determining Fred Alger Management’s profitability.

 

The Board also considered the extent to which the Manager might derive ancillary benefits from Fund operations, including, for example, through soft dollar arrangements. Based upon its consideration of all these factors, the Trustees concluded that the level of profits realized by Fred Alger Management and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.

 

Economies of Scale

For each Fund, the Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as the Fund grows larger and whether the Fund’s management fee structure reflects any economies of scale for the benefit of Fund shareholders. The Board noted the existence of management fee breakpoints for Alger Spectra Fund, Alger Responsible Investing Fund, and Alger Dynamic Opportunities Fund, which operate to share economies of scale with a Fund’s shareholders by reducing the Fund’s effective management fees as the Fund grows in size. The Board considered the Manager’s view that the overall size of Fred Alger Management allows it to realize other economies of scale, such as with office space, purchases of technology, and other general business expenses, including with respect to Funds that did not have management fee breakpoints.

 

The Trustees concluded that for each Fund, to the extent economies of scale may be realized by Fred Alger Management, the benefits of such economies of scale would be shared with the Fund and its shareholders as the Fund grows, including through the management fee breakpoints in place for applicable Funds.

 

Conclusion

The Board’s consideration of the Contractual Management Fee for each Fund also had the benefit of a number of years of reviews of the Management Agreement, during which lengthy discussions took place between the Board and representatives of the Manager. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on its consideration of the Fund’s arrangements in prior years.

 

Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board, including the Independent Trustees voting separately, unanimously approved the continuation of each Management Agreement for an additional one-year period.

 

- 112 -

 

THE ALGER FUNDS II
ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

Privacy Policy

 

 

U.S. Consumer Privacy Notice Rev. 6/22/21
FACTS WHAT DOES ALGER DO WITH YOUR PERSONAL INFORMATION?
Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
What?

The types of personal information we collect and share depend on the product or service you have with us.

This information can include:

●  Social Security number and

●  Account balances and

●  Transaction history and

●  Purchase history and

●  Assets

When you are no longer our customer, we continue to share your information as described in this notice.
How? All financial companies need to share personal information to run their everyday business. In the section below, we list the reasons financial companies can share personal information; the reasons Alger chooses to share; and whether you can limit this sharing.

  

Reasons we can share your personal information Does Alger share? Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus Yes No
For our marketing purposes —to offer our products and services to you Yes No
For joint marketing with other financial companies No We don’t share
For our affiliates’ everyday business purposes — information about your transactions and experiences Yes No
For our affiliates’ everyday business purposes — information about your creditworthiness No We don’t share
For nonaffiliates to market to you No We don’t share
Questions? Call 1-800-223-3810    

 

- 113 -

 

THE ALGER FUNDS II

ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

Who we are  
Who is providing this notice? Alger includes Fred Alger Management, LLC and Fred Alger & Company, LLC as well as the following funds: The Alger Funds, The Alger Funds II, The Alger Institutional Funds, The Alger Portfolios, Alger Global Focus Fund, and The Alger ETF Trust.

 

What we do  
How does Alger
protect my personal
information?		 To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
How does Alger
collect my personal
information?

We collect your personal information, for example, when you:

●  Open an account or

●  Make deposits or withdrawals from your account or

●  Give us your contact information or

●  Provide account information or

●  Pay us by check.
Why can’t I limit all sharing?

Federal law gives you the right to limit some but not all sharing related to:

●  sharing for affiliates’ everyday business purposes ─ information about your credit worthiness

●  affiliates from using your information to market to you

●  sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing.

 

Definitions  
Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

● Our affiliates include Fred Alger Management, LLC, Weatherbie Capital, LLC and Fred Alger & Company, LLC as well as the following funds: The Alger Funds, The Alger Funds II, The Alger Institutional Funds, The Alger Portfolios, Alger Global Focus Fund, and The Alger ETF Trust.
Nonaffiliates Companies not related by common ownership or control. They can be financial and nonfinancial companies.
Joint marketing A formal agreement between nonaffiliated financial companies that together market financial products or services to you.

 

- 114 -

 

THE ALGER FUNDS II 

ADDITIONAL INFORMATION (Unaudited) (Continued)

 

 

Proxy Voting Policies

 

 

A description of the policies and procedures the Funds use 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.

 

Fund Holdings 

 

 

The Board has adopted policies and procedures relating to disclosure of the Funds’ portfolio securities. These policies and procedures recognize that there may be legitimate business reasons for holdings to be disclosed and seek to balance those interests to protect the proprietary nature of the trading strategies and implementation thereof by the Funds.

 

Generally, the policies prohibit the release of information concerning portfolio holdings, which have not previously been made public, to individual investors, institutional investors, intermediaries that distribute the Funds’ shares and other parties which are not employed by the Investment Manager or its affiliates except when the legitimate business purposes for selective disclosure and other conditions (designed to protect the Funds) are acceptable.

 

The Funds file their complete schedules of portfolio holdings with the SEC semi-annually in shareholder reports on Form N-CSR and after the first and third fiscal quarters as an exhibit to their reports on Form N-PORT. The Funds’ Forms N-CSR and N-PORT are available online on the SEC’s website at www.sec.gov.

 

In addition, the Funds make publicly available their month-end top 10 holdings with a 10 day lag and their month-end full portfolios with a 60 day lag on their website www.alger. com and through other marketing communications (including printed advertising/sales literature and/or shareholder telephone customer service centers). No compensation or other consideration is directly received for the non-public disclosure of portfolio holdings information.

 

In accordance with the foregoing, the Funds provide portfolio holdings information to third parties including financial intermediaries and service providers who need access to this information in the performance of their services and are subject to duties of confidentiality (1) imposed by law, including a duty not to trade on non-public information, and/or (2) pursuant to an agreement that confidential information is not to be disclosed or used (including trading on such information) other than as required by law. From time to time, the Funds will communicate with these third parties to confirm that they understand the Funds’ policies and procedures regarding such disclosure. These agreements must be approved by the Trust’s Chief Compliance Officer.

 

The Board periodically reviews a report disclosing the third parties to whom each Fund’s holdings information has been disclosed and the purpose for such disclosure, and it considers whether or not the release of information to such third parties is in the best interest of the Fund and its shareholders.

 

 

- 115 -

 

THE ALGER FUNDS II 

ADDITIONAL INFORMATION (Unaudited) (Continued) 

 

 

In addition to material the Funds routinely provide to shareholders, the Investment Manager may make additional statistical information available regarding the Alger Family of Funds. Such information may include, but not be limited to, relative weightings and characteristics of a Fund versus an index (such as P/E ratio, alpha, beta, capture ratio, maximum drawdown, standard deviation, EPS forecasts, Sharpe ratio, information ratio, R-squared, and market cap analysis), security specific impact on overall portfolio performance, month-end top ten contributors to and detractors from performance, portfolio turnover, and other similar information. Shareholders should visit www.alger.com or may also contact the Funds at (800) 992-3863 to obtain such information.

 

- 116 -

THE ALGER FUNDS II

 

 

100 Pearl Street, 27th Floor
New York, NY 10004
(800) 992-3863
www.alger.com

 

Investment Manager

 

 

Fred Alger Management, LLC
100 Pearl Street, 27th Floor
New York, NY 10004

 

Sub-Adviser

 

 

Weatherbie Capital, LLC
265 Franklin Street, Suite 1603
Boston, MA 02110

 

Distributor

 

 

Fred Alger & Company, LLC
100 Pearl Street, 27th Floor
New York, NY 10004

 

Transfer Agent and Dividend Disbursing Agent

 

 

UMB Fund Services, Inc.
235 W. Galena Street
Milwaukee, WI 53212

 

Custodian

 

 

Brown Brothers Harriman & Company
50 Post Office Square
Boston, MA 02110

 

Independent Registered Public Accounting Firm

 

 

Deloitte & Touche LLP
30 Rockefeller Plaza
New York, NY 10112

 

This report is submitted for the general information of the shareholders of the series of The Alger Funds II. It is not authorized for distribution to prospective investors unless accompanied by an effective Prospectus for the Fund, which contains information concerning the Fund’s investment policies, fees and expenses as well as other pertinent information.

- 117 -

ITEM 2.
CODE OF ETHICS.

  (a)
The Registrant has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

  (b)
Not applicable.

  (c)
The Registrant has not amended its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.

  (d)
The Registrant has not granted a waiver or an implicit waiver from a provision of its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.

  (e)
Not applicable.

  (f)
The Registrant's Code of Ethics is attached as an Exhibit hereto.

ITEM 3.
AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees of the Registrant determined that Charles F. Baird Jr. is an audit committee financial expert (within the meaning of that phrase specified in the instructions to Form N-CSR) on the Registrant’s audit committee.  Mr. Baird is an “independent” trustee – i.e., he is not an interested person of the Registrant as defined in the Investment Company Act of 1940, nor has he accepted directly or indirectly any consulting, advisory or other compensatory fee from the Registrant, other than in his capacity as Trustee.

ITEM 4.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.

a) Audit Fees:

October 31, 2023
  
$
99,800
  
October 31, 2022
  
$
143,500
  

b) Audit-Related Fees: NONE

c) Tax Fees for tax advice, tax compliance and tax planning:

October 31, 2023
  
$
22,480
  
October 31, 2022
  
$
31,040
  

d) All Other Fees:

October 31, 2023
  
$
18,749
  
October 31, 2022
  
$
14,392
  

Other fees include a review and consent for Registrants registration statement filing and a review of the semi-annual financial statements.

e) 1) Audit Committee Pre-Approval Policies And Procedures:

Audit and non-audit services provided by the Registrant’s independent registered public accounting firm (the “Auditors”) on behalf the Registrant must be pre-approved by the Audit Committee.  Non-audit services provided by the Auditors on behalf of the Registrant’s Investment Adviser or any entity controlling, controlled by, or under common control with the Investment Adviser must be pre-approved by the Audit Committee if such non-audit services directly relate to the operations or financial reporting of the Registrant.

 2) All fees in item 4(b) through 4(d) above were approved by the Registrants’ Audit Committee.

f) Not Applicable

g) Non-Audit Fees:

October 31, 2023
  
$
260,680,
  
€
105,649
October 31, 2022
   $ 300,142,  
€
99,042

h) The audit committee of the board of trustees has considered whether the provision of the non-audit services that were rendered to the registrant's investment adviser and any entity controlling, controlled by, or under common control, with the adviser that provides ongoing services to the registrant that were not approved pursuant to (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence.

ITEM 5.
AUDIT COMMITTEE OF LISTED REGISTRANTS.
 
Not applicable

ITEM 6.
INVESTMENTS.
 
 a) A Schedule of Investments in securities of unaffiliated issuers is included as part of the report to shareholders filed under Item 1 of this Form N-CSR.
 
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.

None

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 half-year that materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12
Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

          Not applicable.

ITEM 13.
EXHIBITS.

(a) (1) Code of Ethics as Exhibit 99.CODE ETH

(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

(a) (4) 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 II



By:
/s/ Hal Liebes
Name:
Hal Liebes
Title:
Principal Executive Officer
Date:
December 20, 2023
 
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/ Hal Liebes
Name:
Hal Liebes
Title:
Principal Executive Officer
Date:
December 20, 2023
 
By:
/s/ Michael D. Martins
Name:
Michael D. Martins
Title:
Principal Financial Officer
Date:
December 20, 2023