As filed with the Securities and
Exchange Commission on September 23, 2021
Securities Act File No. 33-4959
Investment Company Act File No.
811-1355
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |
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Pre-Effective Amendment No. |
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Post-Effective Amendment No. 135 |
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |
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(Check
appropriate box or boxes) |
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THE ALGER FUNDS
(a Massachusetts business trust)
(Exact Name of Registrant as Specified in Charter)
360 Park Avenue South, New York, New York |
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(Address
of Principal Executive Offices) |
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Registrant’s Telephone Number, including Area
Code: 212-806-8800
Tina Payne, Esq. Fred Alger Management, LLC 360 Park Avenue South New York, NY 10010 (Name and Address of Agent for Service) |
Copy to: Nicole M. Runyan, Esq. Proskauer Rose LLP 11 Times Square New York, NY 10036 |
It is proposed that this filing will become effective (check appropriate
box):
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immediately upon filing pursuant to paragraph (b), or |
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on (date) pursuant to paragraph (b), or |
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60 days after filing pursuant to paragraph (a)(1), or |
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on (date) pursuant to paragraph (a)(1), or |
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75 days after filing pursuant to paragraph (a)(2), or |
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on December 10, 2021 pursuant to paragraph (a)(2) of Rule 485 |
If appropriate, check the following box:
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This post-effective amendment designates a new effective date for a previously filed post-effective amendment. |
Title of Securities Being Registered: Shares of beneficial interest, par value
$0.001 per share.
The information in this prospectus is not
complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED SEPTEMBER 23,
2021
Prospectus
[●]
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Alger Weatherbie Enduring Growth Fund |
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The Securities and Exchange Commission has not determined if the information in this Prospectus is accurate or complete, nor has it approved or disapproved these securities. It is a criminal offense to represent otherwise.
Summary
Section
Alger Weatherbie Enduring
Growth Fund
Investment Objective
Alger Weatherbie Enduring Growth Fund seeks long-term capital appreciation.
Fund Fees and Expenses
This table describes the fees and expenses that you may pay if you buy, hold and sell shares
of the Fund. You may pay other fees, such as brokerage commissions and other
fees to financial intermediaries, which are not reflected in the table and examples below.
You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $25,000 in Class A Shares of the Alger Family of Funds, including the Fund. More information about these and other discounts is available from your financial professional and in “Purchasing and
Redeeming Fund Shares” on page 13 and in Appendix A – Waivers and Discounts Available from Intermediaries on page A-1 in the Fund’s Prospectus, and in the sections “Right of Accumulation (Class A Shares)” and “Letter of Intent (Class A Shares)” on page 24 of the Fund’s Statement of Additional Information.
Shareholder Fees
(fees paid directly from your investment)
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Maximum sales charge (load) imposed on purchases as a % of offering price
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Maximum deferred sales charge (load) as a % of purchase price or redemption proceeds,
whichever is lower |
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Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
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Distribution and/or Service (12b-1) Fees |
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Total Annual Fund Operating Expenses |
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Fee
Waiver and/or Expense Reimbursement**** |
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Total Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
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*
Purchases of $1 million or
more of Class A Shares at net asset value may be subject to a contingent deferred sales charge of 1.00% on redemptions made within 12 months of purchase.
**
The Fund and Fred Alger Management, LLC (the “Manager”) have adopted fee breakpoints
for the Fund. The advisory fee for assets up to $250 million is .70%, and for assets in excess of $250 million is .50%.
***
“Other Expenses” are based on estimated amounts for the current fiscal year. Actual
expenses may differ from estimates.
****The Manager has contractually agreed to waive fees or to reimburse Fund expenses (excluding acquired fund fees and
expenses, dividend expense on short sales, borrowing costs, interest, taxes, brokerage and extraordinary expenses) through February 29, 2024 to the extent necessary to limit the
total annual fund operating expenses of the Class A Shares of the Fund to 1.15% of the class’s average daily net assets and the Class C Shares of the Fund to 1.85% of the class’s average daily net assets. This expense reimbursement may only be amended or terminated prior to its expiration date by agreement between the Manager and the Fund’s Board of Trustees, and will terminate automatically in the event of termination of the Investment Advisory Agreement. The Manager may, during the term of the contract, recoup any fees waived or expenses reimbursed pursuant to the contract to the extent that such recoupment would not cause the expense ratio to exceed the stated limitation in effect at the time of (i) the waiver or reimbursement and (ii) the recoupment by the Manager, after repayment of the recoupment is taken into account.
Example
The following examples are intended to help you compare the cost of investing in the Fund
with the cost of investing in other funds. The examples assume that you invest $10,000 in the Fund for the time periods indicated, that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The one-year example and the period of the three-year
example through February 29, 2024 are based on net operating expenses, which reflect the contractual expense limitation agreed to by the Manager. Although your actual costs may be higher or lower, based on these assumptions you would pay the following
expenses if you redeemed your shares at the end of each period:
You would pay
the following expenses if you did not redeem your shares:
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or
"turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. No portfolio turnover rate is included for the Fund because the Fund has not yet commenced operations.
Principal Investment Strategy
The Fund is sub-advised by Weatherbie Capital, LLC (“Weatherbie” or the
“Sub-Adviser”), an affiliate of the Manager. The Manager oversees Weatherbie’s investment process. Weatherbie invests in small- and mid-cap growth companies that
Weatherbie believes have enduring earnings, reasonable valuations and a distinct competitive advantage. Weatherbie invests in Foundation growth stocks and Opportunity growth stocks. Foundation growth stocks are companies led by experienced management teams, with
innovative business models and the potential for high sales and earnings growth. Opportunity growth stocks are companies whose earnings may be temporarily depressed, but Weatherbie believes change is underway that can reaccelerate earnings.
The Fund invests primarily in equity securities of mid-cap companies with an
environmental, social and governance (“ESG”) rating of average or above by a third-party ESG rating agency (an “ESG Rating Agency”) that also demonstrate, in
the view of Weatherbie, promising growth potential.
Weatherbie employs fundamental analysis to identify innovative and dynamic companies and uses
an ESG Rating Agency’s ratings (as discussed below) to consider how such stocks rank within an industry or sector based on a company’s conduct in offering products or services that promote positive environmental, social and/or governance policies, or have a positive impact in these
areas, addressing concerns such as climate change, resource depletion, health and safety, employee relations and diversity, bribery and corruption, and fostering board diversity and structure. Under normal circumstances, the weighted average of the
Fund's holdings must be rated at or better than a medium or average rating provided by the ESG Rating Agency. The Fund will not invest in securities with a rating at or worse than severe or poor, as provided by the ESG Rating Agency. If a security’s rating is downgraded to severe or poor, Weatherbie will sell out of the security within a reasonable period of time. Unrated securities will be excluded from determining the weighted average rating. If a security is not rated by the ESG Rating Agency, the security will be
given a 12-month grace period from the date it is added to the Fund in order for the security to obtain a rating from the ESG Rating Agency. The number of portfolio holdings without a rating by the ESG Rating Agency will be limited to three securities and 20% of the Fund’s assets.
For purposes of the Fund’s principal investment strategies, “mid-cap
companies” are those companies that, at the time of purchase of the securities, generally have total market capitalization within the range of $1 billion to $25 billion.
Because of the Fund’s long-term approach to investing, it could have a significant portion of its assets invested in securities of issuers that have appreciated beyond the market capitalization thresholds noted.
Equity securities include common or preferred stocks that are listed on U.S. or foreign
exchanges.
The Fund intends to invest a substantial portion of its assets in a
smaller number of issuers. Generally, the Fund will own no more than 30 holdings. As a result, the Fund is a non-diversified investment company, which means the performance results
of any one position may have a greater impact on the Fund’s performance. Fund holdings may differ from this number for any reason. Such reasons may be, among others, because of extreme market volatility, such as when the Fund has entered a temporary defensive
position. Additionally, the Fund may temporarily exceed the stated number of holdings when it acquires a new holding and determines that it is in the best interests of shareholders to sell an existing holding over a period of time, instead of immediately selling the entire holding.
The Fund may invest a significant portion of its assets in securities of companies conducting
business within a single sector.
The Fund may sell a stock when it reaches a
target price, it fails to perform as expected, or other opportunities appear more attractive. As a result, the Fund may engage in active trading of portfolio
securities.
The Fund invests in cash (and cash equivalents) when the Fund is
unable to find enough attractive long-term investments to meet its investment objective, in times of adverse or unstable market, economic or political conditions, to meet
redemptions and/or when the Sub-Adviser believes it is advisable to do so. Except during temporary defensive periods, such investments will not exceed 15% of the Fund’s assets.
Principal Risks
An investment in the Fund involves risks. The Fund’s share price may go down, which means you could lose money. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. The following is a summary description of principal risks involved in
investing in the Fund.
Investment Risk – An investment in the Fund is subject to investment risk, including the possible loss of the entire principal amount that you
invest.
Market Risk – Your investment in Fund shares represents an indirect investment in the securities owned by the Fund. 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, if applicable. Local, regional or global events such as war, acts of terrorism, the spread of
infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments.
An outbreak of respiratory disease caused by a novel coronavirus designated as COVID-19 was
first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in, among other things, border closings and other significant travel restrictions and disruptions; significant disruptions to business operations, supply chains and customer activity; lower consumer demand for goods and services; significant job losses and
increasing unemployment; event cancellations and restrictions; service cancellations, reductions and other changes; significant challenges in healthcare service preparation and delivery; prolonged quarantines; as well as general concern and uncertainty that has negatively affected the economic environment. The impact of this outbreak and any other epidemic or pandemic that may
arise in the future could adversely affect the economies of many nations or the entire global economy and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. Although the Federal Reserve has taken a number of actions to mitigate the impact of COVID-19 on U.S. markets and institutions, including
decreasing interest rates and implementing a variety of emergency stimulus measures, these actions may not succeed or have the intended effect. This crisis or other public health crises may also exacerbate other pre-existing political, social, economic, market and financial risks. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty. The foregoing could result in significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher
default rates and a substantial economic downturn or recession. Such impacts could impair the Fund’s ability to maintain operational standards (such as with respect to satisfying redemption requests), disrupt the operations of the Fund’s service providers, adversely affect the value and liquidity of the Fund’s investments and negatively impact the Fund’s performance and your investment in the Fund.
Equity Securities Risk – As with any fund that invests in stocks, your investment will
fluctuate in value, and the loss of your investment is a risk of investing. The Fund’s price per share will fluctuate due to changes in the market prices of its investments.
Also, the Fund’s investments may not grow as fast as the rate of inflation and stocks tend to be more volatile than some other investments you could make, such as bonds.
Environmental, Social and/or Governance Sustainability-Related Securities
Risk – The Fund’s ESG investment criteria may result in the selection or exclusion of securities of
certain issuers for reasons other than financial performance, and carries the risk that the Fund’s investment returns may underperform funds that do not utilize an ESG
investment strategy. The application of this strategy may affect the Fund’s investment exposure to certain companies, sectors, regions, countries or types of investments,
which could negatively impact the Fund’s performance depending on whether such investments are in or out of favor. Applying ESG criteria to investment decisions is qualitative and subjective by nature, and there is no guarantee that the criteria utilized by the Sub-Adviser or any judgment exercised by the Sub-Adviser will reflect the beliefs or values of any particular investor. ESG
standards differ by region and industry, and a company’s ESG practices or the Sub-Adviser’s assessment of a company’s ESG practices may change over time.
Small Number of Holdings Risk – Under normal circumstances, the Fund invests in a
portfolio of no more than 30 stocks. Therefore, the Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a higher number of holdings.
Mid Cap Securities Risk – There may be greater risk in investing in medium-capitalization companies rather than larger, more established companies due
to such factors as inexperienced management and limited product lines or financial resources. It may also be difficult or impossible to liquidate a security position at a time and
price acceptable to the Fund because of the potentially less frequent trading of stocks of smaller market capitalization.
Growth Stocks Risk – Prices of growth stocks tend to be higher in relation to their companies’ earnings and may be more sensitive to market,
political and economic developments than other stocks, making their prices more volatile. An investment in the Fund may be better suited to investors who seek long-term capital
growth and can tolerate fluctuations in their investment’s value.
Sector Risk – The
Fund may have a significant portion of its assets invested in securities of companies conducting business within a single sector. Companies in the same sector may be similarly
affected by economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that sector than a fund that has a
more diversified portfolio. Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
Non-Diversification Risk – The Fund is a non-diversified investment company. Therefore,
the Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a diversified portfolio.
Portfolio Turnover (Active Trading) Risk – Because the Fund may engage in active trading
of portfolio securities, it may incur increased transaction costs and brokerage commissions, both of which can lower the actual return on an investment. Active trading may also increase short-term gains and losses, which may affect the taxes a shareholder has to pay.
Cash Position Risk – The Fund’s large cash position may underperform relative to both equity and fixed-income securities.
Performance
No performance information will be presented until the Fund has been in operation for a full
calendar year. Annual performance information gives some indication of the risks of an investment in the Fund by
comparing the Fund’s performance with a broad measure of market performance. The Fund’s past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future.
Updated performance will be available at www.alger.com within a reasonable amount of time after the Fund commences operations.
Management
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Portfolio Managers Jointly and Primarily Responsible for Day-to-Day Management of
the Fund |
Fred Alger Management, LLC |
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H. George Dai, Ph.D. Chief Investment Officer and Senior Portfolio Manager of Weatherbie Capital, LLC
Since Inception |
Joshua D. Bennett, CFA Chief Operating Officer and Senior Portfolio Manager of Weatherbie Capital, LLC
Since Inception |
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Weatherbie Capital, LLC, an affiliate of the Manager, sub-advises the Fund subject to the
Manager’s supervision and approval.
When a Fund is co-managed, the responsibilities of such portfolio managers may be shared, divided or otherwise assigned based on various factors including, but not limited to, level of Fund assets to be managed, their overall experience, their sector expertise, and such other factors as the Manager believes is most efficient and effective. In all cases, each portfolio manager collaborates with the other portfolio manager(s) and analysts to develop overall strategy, outlook, and themes, which impact industry, sector
and security allocations in the Fund. Responsibilities amongst portfolio managers may be fully or partially allocated to one of the portfolio managers for the purposes of day-to-day portfolio management and stock selection, implementation of trades, strategic
and performance oversight, risk management, or oversight of guidelines; whether externally driven or internally developed by the Manager.
Shareholder Information
Purchasing and Redeeming Fund Shares
Class C Shares of the Fund are only offered to investors through certain financial
intermediaries and group retirement plan recordkeeping platforms.
Minimum Investments:
the following minimums apply to an account in the Fund, whether invested in Class A or Class C Shares.
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Retirement Accounts (including IRAs) |
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Asset-based Fee Program Accounts |
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Minimums may be waived in certain circumstances. See “Additional Information about Minimum Initial Investments” in the Prospectus.
In general, investors may purchase or redeem Fund shares on any business day by mail (Alger
Family of Funds, c/o UMB Fund Services, Inc., P.O. Box 2175, Milwaukee, WI 53201-2175), online at www.alger.com, by telephone at 1 (800) 992-3863 or through a financial intermediary.
Investors who wish to purchase, exchange or redeem Fund shares through a financial intermediary should contact their financial intermediary directly.
Tax Information
The Fund’s distributions may be taxable as ordinary income or capital gains. The Fund is actively managed, and as a result, investors may receive capital gains distributions annually.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and/or the Manager or the Fund’s distributor may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial professional to recommend the Fund over another investment. Ask your financial professional or visit your financial intermediary’s website for more information.
Investment
Objective, Investment Strategies and Related Risks
The investment objective,
principal strategy and primary risks of the Fund are discussed individually above. The Fund’s investment objective is a non-fundamental investment policy and may be changed by
the Board of Trustees (the “Board”) without shareholder approval. The Fund will provide its shareholders with at least 60 days’ prior notice of any change to its
investment objective. The Fund may, from time to time, take temporary defensive positions that are inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, or other conditions. The Fund may not achieve its
investment objective while in a temporary defensive position.
All of the Fund’s share classes invest in the same portfolio of securities. Performance of each share class will vary from the performance of the Fund’s other share classes due to the differences in charges or expenses. The Fund’s past performance (before and after taxes) is not necessarily an indication of how it will perform in the future.
Investment Objective
Alger Weatherbie Enduring Growth Fund seeks long-term capital appreciation.
Principal Investment Strategies
The following are the Fund’s investment process and principal investment strategies. The Fund may invest in other securities that are not its principal strategy, and such strategies and related risks are described in more detail in the Fund’s Statement of Additional Information (“SAI”).
The Fund invests primarily in equity securities. The Fund’s investments in equity securities are primarily in common or preferred stocks, but its equity investments may also include securities convertible into or exchangeable for equity securities (including
warrants and rights) and depositary receipts. The Fund invests primarily in companies whose securities are traded on U.S. or foreign exchanges.
The
Fund’s investment manager is Fred Alger Management, LLC (“Alger Management” or the “Manager”), and the Fund is sub-advised by Weatherbie Capital, LLC
(“Weatherbie” or the “Sub-Adviser”), an affiliate of the Manager. The Manager oversees Weatherbie’s investment process. Weatherbie invests in small-
and mid-cap growth companies that Weatherbie believes have enduring earnings, reasonable valuations and a distinct competitive advantage. Weatherbie believes that these companies
tend to fall into categories:
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Foundation growth stocks
Companies led by experienced management teams, with innovative business models and the potential for high sales and earnings
growth.
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Opportunity growth stocks
Companies whose earnings may be temporarily depressed, but Weatherbie believes
change is underway that can reaccelerate earnings.
The Fund must take into account a company’s market capitalization when considering it
for investment. The market capitalization of a company is its price per share multiplied by its number of outstanding shares.
Alger Weatherbie Enduring Growth Fund
The Fund invests primarily in equity securities of mid-cap companies with an environmental,
social and governance (“ESG”) rating of average or above by a third-party ESG rating agency (an “ESG Rating Agency”) that also demonstrate, in the view of
Weatherbie, promising growth potential.
Weatherbie employs fundamental analysis to identify innovative and dynamic companies and uses
an ESG Rating Agency’s ratings (as discussed below) to consider how such stocks rank within an industry or sector based on a company’s conduct in offering products or services that promote positive environmental, social and/or governance policies, or have a positive impact in these
areas, addressing concerns such as climate change, resource depletion, health and safety, employee relations and diversity, bribery and corruption, and fostering board diversity and structure. Under normal circumstances, the weighted average of the
Fund's holdings must be rated at or better than a medium or average rating provided by the ESG Rating Agency. The Fund will not invest in securities with a rating at or worse than severe or poor, as provided by the ESG Rating Agency. If a security’s rating is downgraded to severe or poor, Weatherbie will sell out of the security within a reasonable period of time. Unrated securities will be excluded from determining the weighted average rating. If a security is not rated by the ESG Rating Agency, the security will be
given a 12-month grace period from the date it is added to the Fund in order for the security to obtain a rating from the ESG Rating Agency. The number of portfolio holdings without a rating by the ESG Rating Agency will be limited to three securities and 20% of the Fund’s assets.
For purposes of the Fund’s principal investment strategies, “mid-cap companies” are those
companies that, at the time of purchase of the securities, generally have total market capitalization within the range of $1 billion to $25 billion. Because of the Fund’s long-term approach to investing, it could have a significant portion of its assets invested in securities of issuers that have appreciated beyond the market capitalization thresholds noted.
Equity securities include common or preferred stocks that are listed on U.S. or foreign exchanges.
The Fund intends to invest a substantial portion of its assets in a smaller number of issuers.
Generally, the Fund will own no more than 30 holdings. As a result, the Fund is a non-diversified investment company, which means the performance results of any one position may have a greater impact on the Fund’s performance. Fund holdings may differ from this number for any reason. Such reasons may be, among others, because of extreme market volatility, such as when the Fund has entered a temporary defensive
position. Additionally, the Fund may temporarily exceed the stated number of holdings when it acquires a new holding and determines that it is in the best interests of shareholders to sell an existing holding over a period of time, instead of immediately selling the entire holding.
The Fund may invest a significant portion of its assets in securities of companies conducting
business within a single sector.
The Fund may sell a stock when it reaches a
target price, it fails to perform as expected, or other opportunities appear more attractive. As a result, the Fund may engage in active trading of portfolio
securities.
The Fund invests in cash (and cash equivalents) when the Fund is
unable to find enough attractive long-term investments to meet its investment objective, in times of adverse or unstable market, economic or political conditions, to meet
redemptions and/or when the Manager believes it is advisable to do so. Except during temporary defensive periods, such investments will not exceed 15% of the Fund’s assets.
Other Strategies of the Fund
In addition to the principal strategies discussed above, the Fund may also invest or engage in the following investments/strategies:
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Short
Sales: The Fund may make short sales of securities either as a hedge against potential declines in the value of a portfolio security or to realize appreciation when a security that the Fund does not own declines in value. The Fund may also make short
sales “against the box” without being subject to such limitations. In this type of short sale, at the time of the sale, the Fund owns or has the immediate and unconditional right to acquire the identical security at no additional cost. Any short sales of securities will not count towards the Fund’s 30-holdings portfolio.
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Foreign Securities: The Fund may invest in equity securities of companies located outside the United
States.
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Private Investments: The Fund may invest in private placements and make private investments in public
equities (“PIPEs”). The Fund may invest up to 10% of its assets in such strategies.
Investment Risks
This section contains a discussion of the general risks of investing in the Fund. The
“Investment Strategies and Policies” section in the SAI also includes more information about the Fund and its investments and the related risks. An investment in the
Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency. As with any fund, an investment in the Fund involves risks.
Principal Risks of Investing in the Fund:
Investment Risk
An investment in the Fund is subject to investment risk, including the possible loss of the
entire principal amount that you invest.
Market Risk
Your investment in Fund shares represents an indirect investment in the securities owned by
the Fund. 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, if applicable. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments.
An outbreak of respiratory disease caused by a novel coronavirus designated as COVID-19 was
first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in, among other things, border closings and other significant travel restrictions and disruptions; significant disruptions to business operations, supply chains and customer activity; lower consumer demand for goods and services; significant job losses and
increasing unemployment; event
cancellations and restrictions; service cancellations, reductions and other changes; significant challenges in healthcare service preparation and delivery; prolonged quarantines; as
well as general concern and uncertainty that has negatively affected the economic environment. The impact of this outbreak and any other epidemic or pandemic that may arise in the future could adversely affect the economies of many nations or the entire global economy and the financial
performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. Although the Federal Reserve has taken a number of actions to mitigate the impact of COVID-19 on U.S. markets and institutions, including
decreasing interest rates and implementing a variety of emergency stimulus measures, these actions may not succeed or have the intended effect. This crisis or other public health crises may also exacerbate other pre-existing political, social, economic, market and financial risks. The effects of this outbreak or any future outbreak in developing or emerging market countries may be greater due to less established health care systems. The duration of the COVID-19 outbreak and its effects cannot be determined with
certainty. The foregoing could result in significant market volatility, exchange trading suspensions and closures, declines in financial markets, higher default rates and a substantial economic downturn or recession. Such impacts could impair the Fund's
ability to maintain operational standards (such as with respect to satisfying redemption requests), disrupt the operations of the Fund's service providers, adversely affect the value and liquidity of the Fund's investments and negatively impact the Fund's
performance and your investment in the Fund.
Equity Securities Risk
As with any fund that invests in stocks, your investment will fluctuate in value, and the loss of your investment is a risk of investing. The Fund’s price per share will fluctuate due to changes in the market prices of its investments. Because stock markets tend to move in cycles, stock prices overall may decline. A particular stock’s market value may decline as a result of general market conditions that are not related to the issuing company (e.g., adverse economic conditions or investor sentiment) or due to factors that affect the particular company (e.g., management performance or factors affecting the industry). Also, the Fund’s investments may not grow as fast as the rate of inflation and stocks tend to be more volatile than some other investments you could make,
such as bonds.
Environmental, Social and/or Governance Sustainability-Related Securities Risk
The
Sub-Adviser incorporates ESG criteria into its investment process for the Fund, which may be viewed as providing opportunities for long-term rather than short-term returns, and may
result in the selection or exclusion of securities of certain issuers for reasons other than financial performance. As a result, the Fund may forego opportunities to buy certain
securities when it might be otherwise advantageous to do so, or sell certain securities when it might be otherwise disadvantageous to do so. ESG investing also carries the risk that the Fund’s investment returns may underperform funds that do not utilize an ESG investment strategy. The application of this strategy may affect the Fund’s investment exposure to certain companies, sectors, regions, countries or types of investments, which could negatively impact the Fund’s performance depending on whether such investments are in or out of favor. Applying ESG criteria to investment decisions is qualitative and subjective by nature, and there is no
guarantee that the criteria utilized by the Sub-Adviser or any judgment exercised by the Sub-Adviser will reflect the beliefs or values of any particular investor. In evaluating a company, the Sub-Adviser is dependent upon information and data obtained
through voluntary or third-party reporting that may be incomplete, inaccurate or unavailable, which could cause the Sub-Adviser to incorrectly assess a company’s ESG practices. ESG standards differ by region and industry, and a company’s ESG practices or the Sub-Adviser’s assessment of a company’s ESG practices may change over time.
Small Number of Holdings Risk
The
Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or
regulatory occurrence than a fund that has a higher number of holdings. At times, the performance of shares of particular companies will lag the performance of other sectors or the
market as a whole. This risk is magnified when a fund has a small number of holdings. Generally, the more broadly a fund invests, the more it spreads its risks and potentially reduces the risk of loss and volatility.
Mid Cap Securities Risk
There may be greater risk in investing in medium-capitalization companies rather than larger,
more established companies due to such factors as inexperienced management and limited product lines or financial resources. It may also be difficult or impossible to liquidate a security position at a time and price acceptable to the Fund because of the potentially less frequent trading of stocks of smaller market capitalization.
Growth Stocks Risk
Prices of growth stocks tend to be higher in relation to their companies’ earnings and
may be more sensitive to market, political and economic developments than other stocks, making their prices more volatile. An investment in the Fund may be better suited to investors who seek long-term capital growth and can tolerate fluctuations in their investment’s value. Expected growth may not be realized.
Sector Risk
The Fund may have a significant portion of its assets invested in securities of companies conducting business within a single sector. Companies in the same sector may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that sector than a fund that has a more diversified
portfolio. Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
Non-Diversification Risk
The Fund is a non-diversified investment company. As such, the Fund can invest in fewer
individual companies than a diversified investment company. As a result, the Fund’s performance may be more vulnerable to changes in the market value of a single issuer
and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a diversified portfolio. This risk is magnified compared to a fund that invests more broadly.
Portfolio Turnover (Active Trading) Risk
If the Fund engages in active trading of portfolio securities, it may incur increased
transaction costs and brokerage commissions, both of which can lower the actual return on an investment. Active trading may also increase short-term gains and losses, which may affect the taxes a shareholder has to pay.
Other Risks of Investing in the Fund:
The Fund may also be subject to certain other non-principal risks associated with its investments and investment strategies, including:
Temporary Defensive Investments
In times of adverse or unstable market, economic or political conditions, the Fund may invest up to 100% of its assets in cash, high-grade bonds, or cash equivalents (such as commercial paper or money market instruments) for temporary defensive reasons.
This is to attempt to protect the Fund’s assets from a temporary, unacceptable risk of loss, rather than directly to promote the Fund’s investment objective. The Fund
may also hold these types of securities in an amount up to 15% of net assets, pending the investment of proceeds from the sale of Fund shares or portfolio securities or to meet
anticipated redemptions of Fund shares. The Fund may not achieve its investment objective while in a temporary defensive position.
Short Sales Risk
The
market price of a security may increase after the Fund borrows the security in order to sell it short, so that the Fund suffers a loss when it replaces the borrowed security at the
higher price. The use of short sales could increase the Fund’s exposure to the market, magnifying losses and increasing volatility.
Foreign Securities Risk
Investing in foreign securities involves risks related to the political, social and economic
conditions of foreign countries, particularly emerging market countries. These risks may include political instability, exchange control regulations, expropriation, lack of comprehensive information, national policies restricting foreign investment, currency fluctuations, lack of liquidity,
potential for market manipulation, less developed or less efficient trading markets, limited access to reliable capital, lack of comprehensive company information, political instability, differing auditing, regulatory and legal standards and lack of accounting and financial reporting standards, inflation and rapid fluctuations in inflation, withholding or other taxes, and operational risks. There may be less stringent government supervision and oversight of foreign markets than in the United States. There may be less
corporate financial information publicly available, less stringent investor protection and disclosure standards, and differing auditing and legal standards.
Investment in foreign currencies is subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time. A decline in the value of foreign currencies relative to the U.S. dollar will
reduce the value of securities held
by the Fund and denominated in those currencies. Foreign currencies also are subject to risks caused by inflation, interest rates, budget deficits and low savings rates, political
factors and government controls.
Privately
Placed Securities Risk
Private equity investments, which include PIPE and other
private equity transactions, and which are distinct from investments in private equity funds, involve an extraordinarily high degree of business and financial risk and can result in
substantial or complete losses. Some companies in which the Fund may invest may be operating at a loss or with substantial variations in operating results from period to period and may need substantial additional capital to support expansion or to achieve or maintain competitive
positions. Such companies may face intense competition, including competition from companies with much greater financial resources, much more extensive development, production, marketing and service capabilities and a much larger number of
qualified managerial and technical personnel. The Fund can offer no assurance that the marketing efforts of any particular company will be successful or that its business will succeed.
With respect to PIPE transactions, PIPE investors purchase securities directly from a publicly traded company in a private placement transaction, typically at a discount to the market price of the company’s common stock. Because the sale of the
securities is not registered under the Securities Act of 1933, the securities are “restricted” and cannot be immediately resold by the investors into the public markets. Accordingly, the company typically agrees as part of the PIPE deal to register the restricted securities with the Securities and Exchange Commission. PIPE securities may be deemed illiquid.
Management and
Organization
Manager
Fred Alger Management, LLC
360 Park Avenue South
New York, NY 10010
The Manager has been an investment adviser since 1964, and manages investments totaling (at
October 31, 2021) approximately $[__] billion. The Manager is responsible for providing a continuous investment program for the Fund, making decisions with respect to all purchases and sales of assets, and placing orders for the investment and reinvestment of Fund assets. The Manager
also arranges for transfer agency, custody and all other services necessary for the Fund to operate. These advisory responsibilities are subject to the supervision of the Board. A discussion of the Trustees’ basis for approving the advisory contract with respect to the Fund will be available in the Fund’s first available annual or semi-annual report to shareholders for its most recent October 31 fiscal year end or April 30 semi-annual fiscal year end. The Fund pays the Manager a fee at the annual rate of .70% for assets up to $250 million and .50% for assets in excess of $250 million.
The Manager has made contractual commitments to the Fund to waive its fee and/or reimburse the Fund for expenses to the extent necessary to maintain the Fund’s total annual operating expenses at or below certain levels. Such waiver/reimbursement arrangements are as follows: Class A shares – 1.15%; Class C shares – 1.85%. The limitations do not apply to acquired fund fees and expenses, dividend expense on short sales, borrowing costs, interest, taxes, brokerage and extraordinary expenses. Each
agreement runs through February 29, 2024 and may only be amended or terminated prior to its expiration date by agreement between the Manager and the Board, and will terminate automatically in the event of termination of the Investment Advisory
Agreement. The Manager may, during the term of the contract, recoup any fees waived or expenses reimbursed pursuant to the contract to the extent that such recoupment would not cause the expense ratio to exceed the stated limitation in effect at the time of (i) the waiver or reimbursement and (ii) the recoupment by the Manager, after repayment of the recoupment is taken into
account.
Sub-Adviser
Weatherbie Capital, LLC
265 Franklin Street, Suite 1603
Boston, Massachusetts 02110
The Manager has engaged Weatherbie, an affiliate of the Manager, to serve as the Fund’s
sub-adviser under a sub-investment advisory agreement between the Manager and the Sub-Adviser. Weatherbie is a registered investment adviser formed in 1995. As of October 31, 2021, Weatherbie had approximately $[__] billion in assets under management. Weatherbie sub-advises the Fund
subject to the Manager’s supervision and approval. The Manager pays a sub-advisory fee to the Sub-Adviser out of its own resources at no additional charge to the Fund.
Portfolio Managers Jointly and Primarily Responsible for Day-to-Day Management of Portfolio Investments
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Alger Weatherbie Enduring Growth Fund |
H, George Dai, Ph.D. Joshua D. Bennett, CFA |
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Mr. Bennett is the Chief Operating Officer of Weatherbie and a Senior Portfolio Manager. He joined Weatherbie in 2007.
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Dr. Dai is the Chief Investment Officer of Weatherbie and a Senior Portfolio Manager. He joined
Weatherbie in 2001.
The SAI
provides additional information about the portfolio managers’ compensation, other accounts that they manage, and their ownership of securities of the Fund(s) that they
manage.
Administrator
Pursuant to a separate Fund Administration Agreement, the Manager also provides administrative
services to the Fund, including, but not limited to: providing office space, telephone, office equipment and supplies; paying compensation of the Fund’s officers for services rendered as such; authorizing expenditures and approving bills for payment on behalf of the Fund; preparation of the
periodic updating of the Fund’s Registration Statement, including Prospectus and Statement of Additional Information, for the purpose of filings with the Securities and Exchange Commission and monitoring and maintaining the effectiveness of such filings,
as appropriate; supervising preparation of periodic shareholder reports, notices and other shareholder communications; supervising the daily pricing of the Fund’s investment portfolios and the publication of the net asset value of the Fund’s shares, earnings reports and other financial data; monitoring relationships with organizations providing services to the Fund, including the
Fund’s custodian, transfer
agent, blue sky agent and printers; providing trading desk facilities for the Fund; supervising compliance by the Fund with recordkeeping and periodic reporting requirements under
the Investment Company Act of 1940, as amended (the “1940 Act”); preparation of materials for meetings of the Fund’s Board of Trustees and preparation of
minutes of such meetings; oversight of service providers who file claims for class action lawsuits with respect to securities in the Fund; arranging for the Fund the required fidelity bond and other insurance, if applicable; and providing executive, clerical and secretarial help needed to carry out these responsibilities. The Fund pays the Manager an administrative fee at the annual rate of 0.0275% of the Fund’s average daily net assets.
Pursuant
to a separate Shareholder Administrative Services Agreement, the Manager also supervises the Fund's transfer agent, UMB Fund Services, Inc. (the “Transfer Agent”), and
provides certain shareholder administrative services to the Fund. The Fund pays the Manager a shareholder administrative services fee at the annual rate of 0.0165% of net assets
with respect to Class A and C Shares.
For more information, please see the Shareholder Information section beginning on page 13.
Shareholder Information
Distributor
Fred Alger & Company, LLC
360 Park Avenue South
New York, NY 10010
Although Fred Alger & Company, LLC (the “Distributor”) is the broker-of-record
on certain direct shareholder accounts, the Distributor does not interact directly with such shareholders and therefore, does not believe it makes recommendations to such shareholders regarding the holdings in their accounts.
Transfer Agent
Alger Family of Funds
c/o UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, WI 53201-2175
Net Asset Value
The value of one share is its “net asset value,” or NAV. The NAV for the Fund is
calculated as of the close of business (normally 4:00 p.m. Eastern time) every day the New York Stock Exchange (“NYSE”) is open. Generally, the NYSE is closed on
weekends and national holidays.
NAV (net asset value) of a class of shares is computed by adding together the value allocable to the class of the Fund’s investments plus cash and other assets, subtracting applicable liabilities and then dividing the result by the number of outstanding shares of the class.
Foreign securities are usually valued on the basis of the most recent closing price of the
foreign markets on which such securities principally trade. Because the Fund invests in foreign securities principally listed on foreign exchanges that may trade on days the NYSE is closed, the value of the Fund’s assets may be affected on days when shareholders will not be able to purchase or redeem Fund shares.
The assets of
the Fund are generally valued on the basis of market quotations. If market quotations are not readily available or do not accurately reflect fair value for a security, or if a
security’s value has been materially affected by events occurring after the close of the market on which the security is principally traded, the security may be valued on the
basis of fair value as determined by the Manager under procedures adopted by the Board. A security’s valuation may differ depending on the method used for determining value. Short-term money market instruments held by the Fund are generally valued on the basis of amortized cost.
In determining whether market quotations are reliable and readily available, the Manager
monitors information it routinely receives for significant events it believes will affect market prices of portfolio instruments held by the Fund. Significant events may affect a particular company (for example, a trading halt in the company’s securities on an exchange during the day) or may affect securities markets (for example, a natural disaster that causes a market to close). If the Manager is aware of a significant event that has occurred after the close of the market where a portfolio instrument is primarily traded, but before the close of the NYSE, that the Manager believes has affected or is likely to affect the price of the instrument, the Manager will use its best judgment to determine a fair value for that portfolio instrument under procedures adopted by the Board.
The Manager believes that under certain circumstances foreign securities values may be affected by volatility that occurs in U.S. markets on a trading day after the close of foreign securities markets. The Manager’s fair valuation procedures therefore include a procedure whereby foreign securities prices may be “fair valued” to take those factors into account.
Purchasing and Redeeming Fund Shares
Shares of the Fund can be purchased or redeemed on any day the NYSE is open. Orders will be
processed at the NAV next calculated after the purchase or redemption request is received in good order by the Transfer Agent or other agent appointed by the Distributor. Ordinarily, the Fund will issue a redemption check within seven days after the Transfer Agent receives a redemption request in good order. “In good order” means that all necessary information and documentation related to the redemption request have been provided to the Transfer Agent or authorized intermediary, if applicable. If your request is not in good order, the Transfer Agent may require additional documentation in order to redeem your shares. However, when you buy shares with a check, via
Automatic Investment Plan, or online, the Fund will not issue payment for redemption requests against those funds until the purchase proceeds are available, which may take up to 15 days. Payment may be postponed in cases where the SEC declares an
emergency or normal trading is
halted. The Transfer Agent or the Fund may reject any purchase order. Share certificates are not issued for shares of the Fund.
Under normal circumstances, the Fund expects to meet redemption requests by using cash or cash
equivalents in its portfolio and/or by selling portfolio assets to generate cash. The Fund also may pay redemption proceeds using cash obtained through borrowing arrangements that may be available from time to time.
The Fund may pay all or a portion of your redemption proceeds in securities rather than cash
(i.e., “redeem in kind”) if, for example, the redemption request is during stressed market conditions or the Fund believes that a cash redemption may have a
substantial impact on the Fund and its remaining shareholders. Securities will generally be selected on a pro rata basis pursuant to the Fund’s procedures. A shareholder who receives a redemption in kind bears the market risk of the securities until they are converted into cash, in transactions conducted at the shareholder’s expense.
Legislation passed by Congress in 2008 requires mutual funds to report both to the shareholder and to the Internal Revenue Service the “cost basis” of shares acquired on or after January 1, 2012 that are subsequently redeemed or exchanged. This reporting is not required for Fund shares held in retirement or other tax-advantaged accounts or for certain other types of entities (such as C corporations).
If you are a direct shareholder, you may request your cost basis reported on Form 1099-B to be
calculated using any one of the alternative methods offered by the Fund. Please contact the Fund to make, revoke, or change your election. If you do not affirmatively elect a cost basis method then the Fund will use the average cost basis method. If you hold Fund shares through a
broker, please contact that broker with respect to the reporting of cost basis and available elections for your account.
Please note that you will continue to be responsible for calculating and reporting gains and
losses on redemptions of shares purchased prior to January 1, 2012. You are encouraged to consult your tax advisor regarding the application of the cost basis reporting rules and, in particular, which cost basis calculation method is best for you.
Dividends and Distributions and Tax Consequences
The Fund declares and pays dividends and distributions annually, and expect these payments to shareholders will consist primarily of capital gains, which may be taxable to you at different rates depending upon how long the Fund held the securities that it sold to create the gains (rather than the length of time you have held shares of the Fund), and that they will also include net investment income, which is taxable as ordinary income. Certain dividend income received by the Fund and paid to you may be subject to a
maximum tax rate of 20% (qualified dividends); other income paid to you, such as non-qualifying dividend income or interest earned on debt securities held by the Fund, will continue to be taxed at the higher ordinary income rates. Shareholders who hold
Fund shares in tax-deferred accounts ordinarily will not be subject to taxation on dividends from net investment income and net realized capital gains until they receive a distribution of the dividends from their individual plan accounts. Dividends and
distributions may differ among classes of shares of a Fund. Unless your investment is in a tax-deferred account, you may want to avoid buying shares shortly before the Fund pays a dividend. If you buy shares when the Fund has declared, but not yet distributed ordinary income or capital gains, you will pay full price for the shares and then receive a portion of the price back in the form of a taxable dividend. In addition, it may be the case that a significant amount of the securities held by the Fund are held at values above their purchase price. In such cases, the sale of such securities in the Fund, which may be from a portfolio management
decision or to meet Fund shareholder redemptions, will generate either long-term or short-term capital gains, which will be distributed and taxable to you as described above if your investment is not in a tax-deferred account. Therefore, a substantial tax liability may arise for a shareholder who invests in the Fund when such conditions exist. The amount of long-term and short-term
capital gains are disclosed in the Fund’s most recent annual or semi-annual report. Before investing you may want to consult your tax advisor.
Unless you
choose to receive cash payments by checking the box on your account application, any dividends and distributions will be reinvested automatically at the NAV on their payment dates.
No additional sales charge will apply to automatically reinvested dividends and distributions. If you have chosen cash payments and a payment is returned to the Fund as
undeliverable, that payment will be reinvested upon receipt by the Transfer Agent in Fund shares at the next NAV. All subsequent payments will be reinvested until you reinstate your cash election and provide a valid mailing address.
Regardless of whether you choose to take distributions in cash or reinvest them in the Fund, they may be subject to federal and state taxes. An exchange of Fund shares for shares of another fund will be treated as a sale of the Fund shares, and any gain on the transaction may be subject to federal and state taxes. Because everyone’s tax situation is unique, see a tax advisor about federal, state and local tax consequences of investing in the Fund.
Classes of Fund Shares
Alger Weatherbie Enduring Growth Fund offers five classes of shares (A, C, I, Y, and Z Shares). Class A and C Shares are offered by this Prospectus. Class I, Y and Z Shares are offered in a separate prospectus.
The table below summarizes key
features of each of the share classes of the Fund. The sections below the table cover additional details of each share class, including sales charges, waivers of sales charges,
sales charge discounts, and waivers of investment minimums.
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Generally available for purchase directly from the Fund via: - Mail: Alger Family of Funds,
c/o UMB Fund Services, Inc.,
P.O. Box 2175, Milwaukee, WI
53201-2175
- Online: www.alger.com
- Telephone: 1 (800) 992-3863 Generally available through financial intermediaries. |
Generally available through financial intermediaries and group retirement plan recordkeeping platforms |
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Initial Investments Regular Account: $1,000 Retirement Accounts (including IRAs): $500 Automatic Investment: $500 Asset-based Fee Program Accounts: $250 Subsequent Investments $50 for all accounts |
Initial Investments Regular Account: $1,000 Retirement Accounts (including IRAs): $500 Automatic Investment: $500 Asset-based Fee Program Accounts: $250 Subsequent Investments $50 for all accounts |
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Yes. Payable at time of purchase. Lower sales charges are available for larger investments. |
No. Entire purchase price is invested in shares of the Fund. |
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No. (May be charged for purchases of $1 million or more that are redeemed within 12 months). |
Yes. Payable if you redeem within one year of purchase. |
Distribution and/or Service (12b-1) Fees? |
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Conversion to Class A Shares? |
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Yes, automatically on the fifth business day of the month following the eighth anniversary of the purchase date. It is a financial intermediary’s responsibility to ensure that the shareholder is credited with the proper holding period. Certain financial intermediaries who hold Class C shares in an omnibus account for shareholders of group retirement plans may not track participant level aging of shares and therefore these shares may not be eligible for an automatic conversion. Shareholders who purchased Class C shares through certain financial intermediaries or group retirement plan recordkeeping platforms or whose shares are held in an omnibus account may not be eligible to participate in such Class C share conversions. |
Investors with non-U.S. addresses and intermediary controlled accounts designated as foreign accounts (“Restricted Accounts”) are restricted from investing in the Fund. Existing Restricted Accounts may remain in the Fund, but are prohibited from making
further investments. U.S. Armed Forces and Diplomatic post office addresses abroad are treated as U.S. addresses and can invest in the Fund. Addresses in U.S. territories, such as Guam and Puerto Rico, are also treated as U.S. addresses and can invest in the Fund.
Sales Charges
The availability of certain sales charge waivers and reductions will depend on whether you
purchase your shares directly from the Fund or through a financial intermediary. Financial intermediaries may have different policies and procedures regarding the availability of front-end sales charge waivers or deferred sales charge waivers, which are discussed below. In all instances, it is your responsibility to notify the Fund or your financial intermediary at the time of purchase of any relationship or other facts qualifying
you for sales charge waivers or
reductions. For waivers and discounts not available through a particular financial intermediary, shareholders will have to purchase Fund shares directly from the Fund or through another financial intermediary to receive these waivers or reductions. Please see “Appendix A – Waivers and Discounts Available from Intermediaries” at the end of this Prospectus.
Class A Shares
When you buy Class A Shares you may pay the following sales charge:
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Sales Charge
as a % of
Offering Price |
Sales Charge
as a % of Net
Asset Value |
Dealer Allowance as a % of Offering Price |
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Purchases of Class A Shares
which, when combined with current holdings of Class A Shares of the Alger Family of Funds offered with a sales charge, equal or exceed $1,000,000 in the aggregate may be made at net
asset value without any initial sales charge, but may be subject to a contingent deferred sales charge (“CDSC”) of 1.00% on redemptions made within 12 months of
purchase. The CDSC is waived if the shareholder’s financial intermediary notified the Distributor before the shareholder purchased the Class A Shares that the financial intermediary would waive the 1.00% Dealer Allowance noted in the chart above.
In calculating a CDSC, the Fund assumes first, that the redemption is of shares, if any, that
are not subject to any CDSC.
Distribution and/or Service (12b-1)
Fees
Each Fund offering Class A Shares has adopted a plan pursuant to Rule 12b-1
under the 1940 Act that allows Class A Shares to pay a 0.25% fee out of its assets on an ongoing basis for distribution and shareholder services provided to Class A shareholders.
The Distributor may pay some or all of this fee to a broker-dealer, investment adviser or other financial institution (“Financial Intermediary”) that also provides distribution, servicing and/or maintenance of shareholder accounts. These fees will increase the cost of your investment in Class A Shares and may cost you more than paying other types of sales charges.
Maximum Investment Amount
No maximum investment limit for Class A shares.
Minimum Investment Amount
For the minimum investment amount for Class A shares, see table below.
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Retirement Accounts (including IRAs) |
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Asset-based Fee Program Accounts |
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Minimums may be waived in certain circumstances. See “Additional Information about Minimum Initial Investments” in the Prospectus.
Class C Shares
Class C Shares are only offered to investors through certain Financial Intermediaries and group retirement plan recordkeeping platforms. See “Investment Instructions – Special Instructions for Class C Shares.”
There is no sales charge when you buy
Class C Shares. When you redeem Class C Shares, you may pay the following CDSC:
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Contingent Deferred Sales Charge (CDSC) |
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In calculating a CDSC, the Fund assumes, first, that the redemption is of shares, if any, that are not subject to any CDSC. The Fund’s Distributor collects and retains any applicable CDSC paid. Under certain circumstances, the CDSC may be waived. These circumstances are discussed below and in the Statement of Additional Information.
Class C Share Conversion Feature
On the fifth business day of the month following the eighth anniversary of the purchase date of a shareholder’s Class C Shares, such Class C Shares will automatically convert to Class A Shares without the imposition of any sales load, fee or other charge. At conversion, a proportionate amount of shares representing reinvested dividends and distributions will also be converted into Class A Shares.
Shareholders who
purchase Class C Shares through certain Financial Intermediaries or group retirement plan recordkeeping platforms or whose shares are held in an omnibus account may not be eligible
to participate in such Class C Share conversion. Certain financial intermediaries who hold Class C Shares in an omnibus account for shareholders of group retirement plans may
not track participant level aging of shares and therefore those shares also may not be eligible for an automatic conversion. Contact your Financial Intermediary or plan recordkeeper for eligibility information. See Appendix A – Waivers and Discounts Available from Intermediaries in this prospectus for further details regarding Class C Share conversion schedules available from certain
intermediaries.
Distribution and/or Service (12b-1) Fees
Each Fund offering Class C Shares has adopted a plan pursuant to Rule 12b-1 under the 1940 Act that allows Class C Shares to pay a 1.00% fee (0.75% distribution and/or shareholder services and 0.25% shareholder services) out of its assets on an ongoing
basis for distribution and shareholder services provided to Class C shareholders. The Distributor may pay some or all of this fee to a Financial Intermediary that also provides servicing and/or maintenance of shareholder accounts. These fees will increase the
cost of your investment in Class C Shares and may cost you more than paying other types of sales charges. At the time of the initial sale of Class C Shares, the Distributor generally pays a Financial Intermediary from its own resources an upfront
commission of 1% of the amount invested. This amount represents a prepayment of the first year’s distribution and shareholder servicing fees. In the first year following the initial sale, the Fund pays the distribution and shareholder service fees to the
Distributor as reimbursement for the Distributor’s upfront commission. If you redeem your Class C Shares on or before the first anniversary date of their purchase, you will pay a 1% CDSC. In the first year, the payment of a CDSC may result in the Distributor receiving amounts greater than the upfront commission paid to the Financial Intermediary. For Class C Shares held over a year, the Fund pays the distribution and shareholder service fees to the Distributor, who is responsible for paying Financial Intermediaries.
Maximum Investment Amount
The maximum investment limit for Class C Shares is $999,999.
Minimum Investment Amount
For the minimum investment amount for Class C Shares, see table below.
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Retirement Accounts (including IRAs) |
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Asset-based Fee Program Accounts |
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Minimums may be waived in certain circumstances. See “Additional Information about Minimum Initial Investments” in the Prospectus.
Waivers of Sales Charges
Different financial intermediaries may impose different sales charges or
offer different sales charge discounts. These variations are described at the end of this Prospectus in Appendix A – Waivers and Discounts Available from
Intermediaries.
No initial sales charge is imposed on purchases of Class A Shares, and no CDSC is imposed on redemptions of Class A and C Shares by:
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employees, officers
and/or Trustees of the Distributor and its affiliates,
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Individual Retirement Accounts (“IRAs”), Keogh Plans and employee benefit plans for
those persons and
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spouses, children,
siblings and parents of those employees and trusts of which those individuals are beneficiaries, as long as orders for the shares on behalf of those individuals and trusts were
placed by those persons;
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accounts managed by
the Manager,
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employees,
participants and beneficiaries of those accounts,
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IRAs, Keogh Plans
and employee benefit plans for those employees, participants and beneficiaries and
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spouses and minor children of those employees, participants and beneficiaries as long as orders
for the shares were placed by the employees, participants and beneficiaries;
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employee benefit or retirement plans or charitable accounts, including, but not limited to,
IRAs, Keogh Plans, 401(k) plans, profit-sharing pension plans, defined benefit plans, Taft-Hartley multiemployer pension plans, 457 plans, 403(b) plans, non-qualified deferred compensation plans, and other defined contribution plans subject to the Employee Retirement Income Security
Act of 1974, as amended, other than employee benefit or retirement plans or charitable accounts that purchase Class A Shares through brokerage relationships in which sales charges
are customarily imposed;
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an investment
company registered under the 1940 Act, as amended, in connection with the combination of the investment company with the Fund by merger, acquisition of assets or by any other
transaction;
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registered
investment advisers for their own accounts;
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certain registered
investment advisers, banks, trust companies and other financial institutions (including broker-dealers) that have an agreement in place with the Distributor (see Appendix A –
Waivers and Discounts Available from Intermediaries of this Prospectus for a list of such entities), as long as the orders for the shares were placed on behalf of their
clients;
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certain financial intermediaries offering self-directed investment brokerage accounts that have an agreement in place with the
Distributor (see Appendix A – Waivers and Discounts Available from Intermediaries of this Prospectus for a list of such entities);
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a financial institution as shareholder of record on behalf of:
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investment advisers or financial planners trading for their own accounts or the accounts of
their clients, and who charge a separate fee for their services, and
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clients of such investment advisers or financial planners trading for their own accounts if the
accounts are linked to the master account of such investment adviser or financial planner on the books and records of the financial institution;
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a financial institution as shareholder of record on behalf of retirement and deferred
compensation plans and trusts used to fund those plans;
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registered representatives of broker-dealers that have an agreement in place with the Distributor, for their own accounts and
their spouses, children, siblings and parents;
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children or spouses of individuals who died in the terrorist attacks of September 11, 2001 made directly through the Fund;
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shareholders of Alger Global Focus Fund as of January 21, 2005 purchasing Class A Shares
directly from the Fund for their existing accounts;
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investors purchasing Class A Shares of the Alger Family of Funds when those purchases are made
directly from the Fund (including shareholders of Class N Shares as of September 23, 2008); and
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investors purchasing Class A Shares directly from the Fund which, when combined with current
holdings of Class A Shares of the Alger Family of Funds offered with a sales charge, equal or exceeds $1,000,000 in the aggregate, when such Class A Shares are redeemed within 12 months of purchase.
Investors purchasing Class A Shares
who may be entitled to one of the foregoing waivers should consult with their financial adviser as to their eligibility, and are required to claim and substantiate their eligibility
for the waiver at the time of purchase. It is also the responsibility of shareholders redeeming shares otherwise subject to a CDSC but qualifying for a waiver of the charge to
assert this status at the time of redemption. As the Distributor has no information regarding the nature of the underlying shareholders in an omnibus account (in which shares are held in the name of an intermediary on behalf of multiple beneficial owners, a common
form of holding shares among retirement plans and financial intermediaries such as brokers, advisers and third-party administrators) it cannot aid in the substantiation of any such claims for waivers. Information regarding these procedures is
available by contacting the Fund at (800) 992-3863.
Any CDSC which otherwise would be imposed on redemptions of shares of the Fund will be waived with respect to (a) redemptions of shares held at the time a shareholder becomes disabled or dies, including the shares of a shareholder who owns the shares with his or her spouse as joint tenants with right of survivorship, provided that the redemption is requested within one year after the death or initial determination of disability, (b) redemptions in connection with the following retirement plan distributions: (i) lump-sum or other distributions from a qualified corporate or Keogh retirement plan following retirement, termination of employment,
death or disability (or in the case of a five percent owner of the employer maintaining the plan, following attainment of age 70-1/2); (ii) required distributions from an IRA following the attainment of age 70-1/2 or from a custodial account under Section 403(b)(7) of the Internal Revenue Code of 1986, as amended, following the later of retirement or attainment of age 70-1/2; and (iii) a tax-free return of an excess contribution to an IRA, (c) systematic withdrawal payments, and (d) redemptions by the Fund of Fund shares
whose value has fallen below the minimum initial investment amount. For purposes of the waiver described in (a) above, a person will be deemed “disabled” if the person is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or to be of long-continued and indefinite
duration.
Class N shareholders of certain funds in the Alger Family of Funds whose shares were
redesignated as Class A Shares on September 23, 2008 will not be subject to initial sales charges in connection with additional purchases of Class A Shares of the Alger Family of Funds. Due to operational limitations at certain financial intermediaries, a sales charge may be assessed unless you inform the financial intermediary at the time you make any additional purchase that you are eligible for this waiver.
Notwithstanding the foregoing, shareholders investing through certain financial intermediaries may not be eligible to purchase shares without imposition of an initial sales charge through such financial intermediaries if the nature of their relationship with, and/or service received from, the financial intermediary changes. Please consult your financial representative for further details.
Reinvestment Privilege Under the Reinvestment Privilege, a shareholder who has redeemed Shares in a Fund account may reinvest all or part of the
redemption proceeds in Shares of the same Fund in the same account without an initial sales charge and receive a credit for any CDSC paid on the redemption, provided the
reinvestment is made within 30 days after the redemption. Reinvestment will be at the net asset value of the Fund next determined upon receipt of the proceeds and a letter
requesting that this privilege be exercised, subject to confirmation of the shareholder’s status or holdings, as the case may be. You will also receive a pro rata credit for any CDSC imposed. This reinvestment privilege may be exercised only once by a shareholder. Reinvestment
will not alter any capital gains tax payable on the redemption and a loss may not be allowed for tax purposes.
Sales Charge Discounts
In addition to waivers of sales charges for eligible investors, there are several ways in
which any investor in Class A Shares may be eligible for a sales charge discount. Information on sales charge discounts is posted on the Fund’s website,
www.alger.com.
When purchasing Class A Shares, when the dollar amount of your
purchase reaches a specified level, known as a breakpoint, you are entitled to pay a discounted initial sales charge. For example, a purchase of up to $24,999 of Class A Shares of
the Fund would be charged an initial charge of 5.25%, while a purchase of $25,000 would be charged an initial charge of 4.50%. There are several breakpoints, as shown in the above sales charge table for Class A Shares. The greater the investment, the greater the sales charge discount.
Letter of Intent A sales charge discount is also available to Class A Share investors who indicate an intent to purchase shares in an amount
aggregating $25,000 or more over a 13-month period. A Letter of Intent (“LOI”) allows the Class A Share investor to qualify for a breakpoint discount now without
immediately investing the aggregate dollar amount at which the breakpoint discount is offered. The investor must refer to the LOI when placing purchase orders. For purposes of an
LOI, the purchase amount includes purchases by “any person” (which includes an individual, his or her spouse or domestic partner and children under the age of 21,
or a trustee or other fiduciary of a single trust, estate or single fiduciary account) of shares of all classes of the Funds in the Alger Family of Funds offered with a sales charge over the following 13 months. At the investor’s request, the 13-month period may begin up to 90 days before the date the LOI is signed. The minimum initial investment under the LOI is 5% of the total LOI amount.
Further details are in the Statement of Additional Information.
Rights of Accumulation An investor in Class A Shares may be eligible for a sales charge
discount by reason of Rights of Accumulation (“ROA”). With ROA, Class A Shares of the Fund may be purchased by “any person” (as defined in the immediately
preceding paragraph) at a discounted sales charge as determined by aggregating the dollar amount of the new purchase and the
current value (at offering price) of
all shares of all classes of the Funds in the Alger Family of Funds offered with a sales charge then held by such person and applying the sales charge applicable to such aggregate,
as noted in the Class A sales charge chart above. In order to obtain such discount, the purchaser must provide sufficient information at the time of purchase to permit verification
that the purchase qualifies for the sales charge discount. The right of accumulation is subject to modification or discontinuance at any time with respect to all shares purchased thereafter.
Additional Information about Minimum Initial Investments
The Distributor, in its sole discretion, may waive minimum initial investment requirements. Minimum initial investment and related requirements may be modified at any time, without prior notice.
There is no minimum initial investment for the following categories of eligible investors:
•
Any current employee of Fred Alger Management, LLC or Fred Alger & Company, LLC or their affiliates, and any of their
immediate family members who share the same address.
•
Trustees of the Fund and Directors of Alger Associates, Inc., or its affiliates, and any of their immediate family members who
share the same address.
Investment Instructions
Special Instructions for Class C Shares
Class C Shares are only offered to investors through certain financial intermediaries and group retirement plan recordkeeping platforms. Class C Shares may not be purchased directly from the Fund.
To Open a New Account:
New account applications must be received in good order. Any application received not in good
order may be rejected. Please see the “Purchasing and Redeeming Fund Shares” section for more information.
By Mail:
Visit the Fund’s website to download a prospectus and New Account Application at www.alger.com, or call (800) 992-3863 to receive an application and prospectus via U.S. mail. Make checks payable to “The Alger Funds.” The Fund does not accept cash or cash alternatives for Fund purchases. Purchases made through ACH (Automated clearing house) are subject to a maximum
limit of $50,000. Mail your completed application and check to the Fund’s transfer agent:
Alger Family of Funds
c/o UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, WI 53201-2175
Overnight mail is to be sent to the Fund’s transfer agent at the following
address:
Alger Family of Funds
c/o UMB Fund Services, Inc.
235 Galena Street
Milwaukee, WI 53212
By FED Wire: To open a new account and fund it using FED Wire, complete a new account
application and mail it to the Fund’s transfer agent at the address provided above. Upon confirmation from UMB that your account has been setup, have your bank wire funds to UMB following the instructions below.
UMB Bank, N.A.
1010 Grand Blvd.
Kansas City, MO 64106
ABA: 101000695
DDA: 9872325141
Please contact UMB at (800) 992-3863 to advise of any purchases by wire.
Online:
You can open a new account online. Go to www.alger.com and follow the online instructions. Please be sure to
first read the Fund prospectus before investing.
By Financial Intermediary: Call or visit your broker-dealer, investment adviser, bank or other
financial institution.
To Make Additional Investments in an Existing Account:
By Mail: Complete and return the Invest by Mail slip attached to your Alger Funds Statement or
include your account number, along with investment instructions noting the Alger Fund and share class in which you wish to invest, and a check to the addresses provided above in the “To Open A New Account” section. Purchases made through ACH are subject to a maximum limit of
$50,000.
By Telephone: You may purchase shares by telephone (minimum $500, maximum $50,000). Your
purchase will be processed at the NAV next calculated after your request is received and the funds will be transferred from your previously designated bank account to your Fund account normally within one business day. Call (800) 992-3863 to initiate a purchase by telephone.
By FED
Wire: Have your bank wire funds to UMB Fund Services, Inc. in accordance with the instructions noted above in the “To Open A New Account” section.
Online: You can purchase additional shares in an existing Fund account. Go to www.alger.com and follow the online instructions.
By Financial Intermediary: Call or visit your broker-dealer, investment adviser, bank or other financial institution.
Automatic Investment Plan
The Alger Family of Funds’ Automatic Investment Plan allows you to make automatic purchases on the day of the month that you select. The minimum automatic investment is $50 with a minimum initial investment of $500.
You can sign up for the Automatic Investment Plan when you first establish your account by selecting the option on the new account form or, to add this service to your existing account, complete and return the Additional Services Form available at
www.alger.com or call (800) 992-3863 to receive the form by mail.
To Exchange Shares:
By Telephone or Online: To complete an exchange, go to www.alger.com, login to access your account, and follow the online instructions, or call (800)
992-3863 to exchange shares (unless you have refused the telephone exchange privilege on your New Account Application). You can exchange Class A, B or C Shares of a Fund for the
same class of shares of another fund in the Alger Family of Funds, subject to certain restrictions. Shares of one class may not be exchanged for shares of another class, except that
in limited circumstances certain accounts will be permitted an exchange from one class to another, provided that you meet applicable eligibility and investment minimum requirements. An exchange between different Trusts in the Alger Family of Funds
may be a taxable event.
To Redeem Shares:
By Mail:
Send a letter of instruction to Alger Family of Funds, c/o UMB Fund Services, Inc. that includes:
•
Fund name and Share class
•
number of shares or dollar amount of redemption
•
where to send the proceeds
•
signature(s) of registered owner(s)
•
a Medallion signature guarantee is required if
•
your redemption is for more than $50,000; or
•
you want the check sent to a different address than the one we have on file; or
•
you want the check to be made payable to someone other than the registered owners we have on
file; or
•
you have changed
your address on file within the past 30 days.
By Telephone: Call (800) 992-3863 to sell shares (unless you refuse this service on your New
Account Application). The Fund will send you a check for any amount. You cannot request a check if you have changed your address on file within the past 30 days. For amounts over $5,000, you can choose to receive a wire to a bank account you previously designated on the records of the Fund.
If you request that your redemption proceeds be wired to your bank account, there is generally
a $10 fee per wire sent to a bank account that you had previously designated on the Fund’s records, and generally a $15 fee per wire sent to a bank account not
previously designated on the
Fund’s records. Fed wire requests to a bank account not previously designated on the Fund’s records must be made in writing, and require a Medallion signature
guarantee.
Online: You can redeem shares from an existing Fund account. Go to www.alger.com and follow the online instructions.
By Financial Intermediary: Call or visit your broker-dealer, investment adviser, bank or other financial institution.
Automatic Withdrawal Plan
The Systematic Withdrawal Plan allows you to receive regular monthly, quarterly or annual payments. Your account value must be at least $10,000 at the time you begin participation in the Plan, and the payments must be for $50 or more.
The maximum monthly withdrawal is 1% of the account value in the Fund at the time you begin
participation in the Plan.
Medallion Signature Guarantee is a
guarantee by a financial institution that your signature is authentic. The financial institution accepts liability for any forgery or fraud if the signature it
guarantees proves to be counterfeit. It is an ideal means to protect investors and their assets. A notarization by a Notary Public is not an acceptable
substitute.
Limitations on Excessive Trading
The Fund invests predominantly in U.S.-traded, highly liquid securities for which current New
York Stock Exchange closing prices are readily available on a daily basis. The Fund will determine a fair value for portfolio securities for which current market closing prices are not readily available or otherwise require fair valuation in the circumstances discussed under “Net Asset Value.” As a result, the Manager believes that there is little incentive for investors to engage in frequent and/or short-term trading (often
referred to as market-timing) to benefit from “stale” pricing. Nonetheless, the presence of small capitalization and medium capitalization securities and/or foreign securities in the Fund and other circumstances may invite frequent and/or short-term
trading by Fund shareholders, for whatever reason implemented. Active trading may be attempted and may, if carried out on a large scale, impose burdens on the Fund’s portfolio managers, interfere with the efficient management of the Fund, increase the Fund’s transaction costs, administrative costs or tax liability or otherwise be detrimental to the interests of the Fund and its other shareholders. The Fund therefore discourage market timing, and to the extent possible monitor for market timing patterns.
The Board has adopted policies and procedures to discourage frequent and/or short-term trading
of Fund shares and will generally not accommodate such practices. These policies and procedures allow the Fund to reject purchase or exchange orders, on a temporary or permanent basis, or redeem all Fund shares from investors that the Manager believes, in its reasonable
business judgment, are engaging in frequent and/or short-term trading in Fund shares or shares of other funds sponsored by the Manager that is detrimental to the Fund involved. If the Fund rejects your purchase or exchange order, you will not be able to
execute that transaction, and neither the Fund nor the Manager will be responsible for any losses you may suffer as a result.
In order to detect significant market timing, the Manager, in accordance with policies and
procedures approved by the Board, will, among other things, seek to monitor overall subscription, redemption and exchange activity, and isolate significant daily activity to determine if there appears to be market timing activity in an individual portfolio.
Under these policies and procedures, the Fund generally prohibits more than two purchases and
sales or exchanges of its shares within a 90-day calendar period. The following transactions are excluded when determining whether trading activity is excessive: (i) transactions associated with systematic investment and withdrawal plans; (ii) transactions through firm-sponsored,
discretionary asset allocation or wrap programs; and (iii) transactions subject to the trading policy of an intermediary that the Fund deems materially similar to the Fund’s policy.
If, based on the Fund’s policies and procedures, the Manager determines that a
shareholder is engaged in, or has engaged in, market timing or excessive trading, the Manager, on behalf of the Fund, may place a temporary or permanent block on all further purchases or exchanges of Fund shares. Multiple accounts under common ownership or control may be considered one account
for the purpose of determining a pattern of excessive trading, short-term market timing or other abusive trading practices. The Fund will also utilize fair value pricing in an effort to reduce arbitrage opportunities available to short-term traders.
Due to the complexity involved in identifying excessive trading and market timing activity,
there can be no guarantee that the Fund will be able to identify and restrict such activity in all cases. Additionally, it is more difficult for the Fund to monitor the
trading activity of beneficial owners of Fund shares who hold those shares through third-party 401(k) and other group retirement plans and other omnibus arrangements maintained by broker/dealers and other intermediaries. Omnibus account arrangements permit
multiple investors to aggregate their respective share ownership positions and purchase, redeem and exchange Fund shares in a single account.
In certain circumstances the Fund may accept frequent trading restrictions of intermediaries that differ from the Fund’s policies and procedures. Since such intermediaries execute or administer transactions with many fund families, it may be impractical for
them to enforce a particular
fund’s frequent trading or exchange policy. These alternate trading restrictions would be authorized only if the Fund believes that the alternate restrictions would provide
reasonable protection to the Fund and its shareholders. The Fund reserves the right to prohibit any purchase, sale or exchange of its shares that the Fund believes may be
disruptive to the Fund or its long-term investors.
Disclosure of Portfolio Holdings
For a discussion of the Fund’s policies and procedures regarding the selective disclosure of its portfolio holdings, please see the SAI. The Fund makes publicly available its month-end top 10 holdings with a 10 day lag and its month-end full portfolio with a 60 day lag on its website www.alger.com.
Other Information
In Kind Redemptions. The Fund may redeem some of your shares “in kind,” which
means that some of the proceeds will be paid with securities the Fund owns instead of cash. The Fund has elected to be governed by rule 18f-1 under the 1940 Act, pursuant to which the Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period for any one shareholder. If you receive securities, you should expect to incur brokerage or other charges in
converting the securities to cash. If the Fund pays large redemptions in cash, these transactions may increase the Fund’s transaction costs and detract from the Fund’s performance. Large purchases pose similar risks.
Shares may be worth more or less when you redeem them than they were at the time you bought them. For tax purposes, this means that when you redeem them you may realize a short- or long-term capital gain or loss, depending upon how long you have
held the shares.
The Fund and the Transfer Agent have reasonable procedures in place to determine that instructions submitted by telephone are genuine. They include requesting personal identification and recording calls. If the Fund and Transfer Agent follow these
procedures, they are not liable for acting in good faith on telephone instructions.
If you are a participant in a retirement plan, such as a 401(k) plan, and you purchase shares in a Fund through an administrator or trustee (“Plan Administrator”) that maintains a master or “omnibus” account with one or more Funds for trading on behalf of retirement plans and their participants, the Plan Administrator may apply purchase and exchange limitations which are different
than the limitations discussed herein. These limitations may be more or less restrictive than the limitations imposed by the Fund. Consult with your Plan Administrator to determine what purchase and exchange limitations may be applicable to your
transactions in the Funds through your retirement plan.
Other Payments by the Fund. In addition to fees that the Fund may pay to a Financial
Intermediary for distribution (12b-1) and shareholder servicing, and fees the Fund pays to their transfer agent, UMB Fund Services, Inc., the Distributor, on behalf of the Fund, may enter into agreements with Financial Intermediaries pursuant to which the Fund will pay a Financial Intermediary for
networking, sub-transfer agency and/or sub-accounting services. These payments are generally based on either (1) a percentage of the average daily net assets of Fund shareholders serviced by a Financial Intermediary or (2) a fixed dollar amount for each
account serviced by a Financial Intermediary. The aggregate amount of these payments may be substantial.
Additional Compensation. From time to time the Distributor, at its expense from its own resources, may compensate Financial Intermediaries who are
instrumental in effecting investments by their clients or customers in the Fund, in an amount up to 1% of the value of those investments. The Distributor may also from time to time,
at its expense from its own resources, make payments to Financial Intermediaries that provide shareholder servicing, or transaction processing, with such payments structured as a
percentage of gross sales, a percentage of net assets, and/or as a fixed dollar amount (the latter as a per account fee or as reimbursement for transactions processing and transmission charges). The Distributor determines whether to make any additional
cash payments and the amount of any such payments in response to requests from Financial Intermediaries, based on factors the Distributor deems relevant. Factors considered by the
Distributor generally include the Financial Intermediary’s reputation, ability to attract and retain assets for the Fund, expertise in distributing a particular class of
shares of the Fund, entry into target markets, and/or quality of service. In addition, the Distributor may make payments to dealer firms in the form of payments for marketing support, seminar support, training meetings, or comparable expenses in the discretion of the Distributor.
Please contact your Financial Intermediary for details about revenue sharing payments it may receive. Any payments described above will not change the price paid by investors for the purchase of shares of the Fund or the amount of proceeds received by the Fund on the sale of shares.
Redemptions by the Fund. If your account, excluding asset-based fee program accounts and
accounts held with certain intermediaries, falls below the minimum initial investment amount of the share class in which you are invested, the Fund may redeem all the Fund shares within your account after giving you 60 days’ prior written notice. You may avoid having your account redeemed during the notice period by bringing the account value up to the minimum initial investment amount.
The Fund and its agents reserve the right at any time to reject or cancel all or any part of
any purchase or exchange order and to redeem all Fund shares if it suspects the shareholder is engaged in, or has engaged in, abusive trading practices and/or violations
of any applicable securities laws. When an exchange request in respect of Fund shares is rejected, such
shares may be redeemed from the Fund on request of the shareholder. In addition, the Fund reserves the right to modify any terms or conditions of purchase of shares of the Fund or suspend, change or withdraw all or any part of the offering made by this prospectus. If the Fund rejects your purchase or exchange order, you may not be able to execute that transaction, and the Fund and its agents will not be
responsible for any losses you may suffer as a result.
Lost Shareholders, Inactive Accounts and Unclaimed Property. It is important that the Fund
maintain a correct address for each shareholder. An incorrect address may cause a shareholder’s account statements and other mailings to be returned to the Fund. Based upon statutory requirements for returned mail, the Fund will attempt to locate the shareholder or rightful owner of
the account. If the Fund is unable to locate the shareholder, then it will determine whether the shareholder’s account would legally be considered abandoned. Your mutual fund account may be transferred to the state government of your state of residence if no
shareholder initiated activity occurs within your account during the “inactivity period” specified in your state’s abandoned property laws. The Fund is legally obligated to escheat (or transfer) abandoned property to the appropriate state’s unclaimed property administrator in accordance with statutory requirements. The shareholder’s last known address of record determines which state has jurisdiction. If you hold your account directly at the Transfer Agent, please proactively contact the Transfer Agent toll-free at (800) 992-3863 at least annually to ensure your account remains in active status. You may also update your contact information through your Alger access account online at www.alger.com.
If you
are a resident of the state of Texas, you may designate a representative to receive notifications that, due to inactivity, your mutual fund account assets may be
delivered to the Texas Comptroller. Please contact the Transfer Agent if you wish to complete a Texas Designation of Representative form.
Householding. To reduce expenses, only one copy of most financial reports and prospectuses may be mailed to households, even if more than
one person in a household holds shares of the Fund. Call an Alger Funds Representative at (800) 992-3863 if you need additional copies of financial reports or prospectuses, or
download them at www.alger.com. If you do not want the mailing of these documents to be combined with those for other members of your household, contact The Alger Funds in writing
at Alger Family of Funds, c/o UMB Fund Services, Inc., P.O. Box 2175, Milwaukee, WI 53212-2175.
Hypothetical
Investment and Expense Information
Hypothetical investment and expense
information, which is not required to be included in this Prospectus by the SEC, is presented in the chart below. This information is intended to reflect the annual and cumulative
effect of the Fund’s expenses, including advisory fees and other Fund costs, on the Fund’s total return based on NAV over a 10-year period. The example assumes the
following:
•
You invest $10,000
in the Fund and hold it for the entire 10-year period; and
•
Your investment has
a 5% return before expenses each year.
There is no assurance that the annual expense ratio will be the expense ratio for the Fund classes for any of the years shown. To the extent that the Manager and any of its affiliates alter any fee waivers and/or expense reimbursements pursuant to a voluntary or contractual arrangement, your actual expenses may be higher or lower. This is only a hypothetical presentation made to
illustrate what expenses and returns would be under the above scenarios. Your actual expenses and returns are likely to differ (higher or lower) from those shown below.
Alger Weatherbie Enduring Growth Fund
Financial Highlights
The financial highlights are not available at this time for the Fund because the Fund has not
commenced operations prior to the date of this Prospectus. Financial information, when available, will be included in the Fund’s next annual or semiannual report.
Appendix A
Waivers and Discounts Available from Intermediaries
The availability of certain sales charge waivers and discounts will depend on whether you purchase your shares directly from the Fund or through a financial intermediary. Intermediaries may have different policies and procedures regarding the availability of front-end sales load waivers or contingent deferred (back-end) sales load (“CDSC”) waivers, which are discussed below. In all instances, it is the purchaser’s responsibility to notify the Fund or the purchaser’s financial intermediary at the time of purchase of any relationship or other facts qualifying the purchaser for sales charge waivers or discounts. For waivers
and discounts not available through a particular intermediary, shareholders will have to purchase Fund shares directly from the Fund or through another intermediary to receive these waivers or discounts.
Ameriprise Financial
The following information applies to Class A shares purchases if you have an account with or otherwise purchase Fund shares through Ameriprise Financial:
Shareholders purchasing Fund shares through an Ameriprise Financial brokerage account are eligible for the following front-end sales charge waivers, which may differ from those disclosed elsewhere in this Fund’s prospectus or
SAI:
Class A Shares Front-End Sales Charge Waivers Available at
Ameriprise Financial |
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans,
employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs. |
Shares purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same Fund (but not any other
fund within the same fund family). |
Shares exchanged from Class C shares of the same fund in the month of or following
the 7-year anniversary of the purchase date. To the extent that this
prospectus elsewhere provides for a waiver with respect to exchanges of Class C
shares or conversion of Class C shares following a shorter holding period, that waiver will apply. |
Employees and registered representatives of Ameriprise Financial or its affiliates
and their immediate family members. |
Shares purchased by or through qualified accounts (including IRAs, Coverdell
Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and
defined benefit plans) that are held by a covered family member, defined as an
Ameriprise financial advisor and/or the advisor’s spouse, advisor’s lineal ascendant (mother, father, grandmother, grandfather, great grandmother, great grandfather), advisor’s lineal descendant (son, step-son, daughter, step-
daughter, grandson, granddaughter, great grandson, great granddaughter) or any
spouse of a covered family member who is a lineal descendant. |
Shares purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (i.e.
Rights of Reinstatement). |
Raymond James & Associates, Inc., Raymond James Financial Services,
Inc. and each entity’s affiliates (“Raymond James”)
Shareholders purchasing fund shares through a Raymond James platform or account, or through an introducing broker-dealer or independent registered investment adviser for which Raymond James provides trade execution, clearance, and/or custody
services, will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund’s prospectus or SAI. To receive a waiver, such waiver must be requested when an eligible trade is made.
Front-end Sales Load Waivers on Class A Shares available at Raymond
James |
Shares purchased in an investment advisory program. |
Shares purchased within the same fund family through a systematic reinvestment of
capital gains distributions and dividend reinvestment when purchasing
shares of the same fund (but not any other fund within the fund
family). |
Employees and registered representatives of Raymond James or its affiliates and
their family members as designated by Raymond James. |
Shares purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement). |
A shareholder in the Fund’s Class C shares will have their shares converted at
net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the conversion is in line with the policies and procedures of Raymond James. |
CDSC Waivers on Classes A, B and C shares available at Raymond
James |
Death or disability of the shareholder. |
Shares sold as part of a systematic withdrawal plan as described in the fund’s
prospectus. |
CDSC Waivers on Classes A, B and C shares available at Raymond
James |
Return of excess contributions from an IRA Account. |
Shares sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on applicable IRS regulations as described in the fund’s prospectus. |
Shares sold to pay Raymond James fees but only if the transaction is initiated by
Raymond James. |
Shares acquired through a right of reinstatement. |
Front-end load discounts available at Raymond James: breakpoints,
and/or rights of accumulation, and/or letters of intent |
Breakpoints as described in this prospectus. |
Rights of accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser’s household at Raymond James.
Eligible fund family assets not held at Raymond James may be included in the calculation of rights of accumulation only if the shareholder notifies his or her financial advisor about such assets. |
Letters of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Raymond James may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such
assets. |
Morgan Stanley Wealth Management
Shareholders purchasing Fund shares through a Morgan Stanley Wealth Management transactional
brokerage account will be eligible only for the following front-end sales charge waivers with respect to Class A shares, which may differ from and may be more limited than those disclosed elsewhere in this Fund’s Prospectus or SAI.
Front-end Sales Load Waivers on Class A Shares available at Morgan
Stanley |
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans,
employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh
plans. |
Morgan Stanley employee and employee-related accounts according to Morgan
Stanley’s account linking rules. |
Shares purchased through reinvestment of dividends and capital gains distributions
when purchasing shares of the same fund. |
Shares purchased through a Morgan Stanley self-directed brokerage
account. |
Class C (i.e., level-load) shares that are no longer subject to a contingent
deferred sales charge and are converted to Class A shares of the same fund pursuant to Morgan Stanley Wealth Management’s share class conversion program. |
Shares purchased from the proceeds of redemptions within the same fund family,
provided (i) the repurchase occurs within 90 days following the redemption, (ii) the redemption and purchase occur in the same account, and (iii) redeemed shares were subject to a front-end or deferred sales charge. |
Merrill Lynch
Shareholders purchasing Fund shares through a Merrill Lynch platform or account will be
eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund’s prospectus or SAI.
Front-end Sales Load Waivers on Class A Shares available at Merrill
Lynch |
Employer-sponsored retirement, deferred compensation and employee benefit plans
(including health savings accounts) and trusts used to fund those plans,
provided that the shares are not held in a commission-based brokerage account and
shares are held for the benefit of the plan |
Shares purchased by a 529 Plan (does not include 529 Plan units or 529-specific
share classes or equivalents) |
Shares purchased through a Merrill Lynch affiliated investment advisory
program |
Shares exchanged due to the holdings moving from a Merrill Lynch affiliated
investment advisory program to a Merrill Lynch brokerage (non-advisory)
account pursuant to Merrill Lynch’s policies relating to sales load discounts
and waivers |
Shares purchased by third party investment advisors on behalf of their advisory
clients through Merrill Lynch’s platform |
Shares of funds purchased through the Merrill Edge Self-Directed
platform |
Shares purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family) |
Shares exchanged from Class C (i.e. level-load) shares of the same fund pursuant to Merrill
Lynch’s policies relating to sales load discounts and waivers |
Employees and registered representatives of Merrill Lynch or its affiliates and
their family members |
Directors or Trustees of the Fund, and employees of the Fund’s investment
adviser or any of its affiliates, as described in this prospectus |
Front-end Sales Load Waivers on Class A Shares available at Merrill
Lynch |
Eligible shares purchased from the proceeds of redemptions within the same fund
family, provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement). Automated transactions (i.e. systematic purchases and withdrawals) and purchases made after shares are automatically sold to
pay Merrill Lynch’s account maintenance fees are not eligible for
reinstatement |
CDSC Waivers on A, B and C Shares available at Merrill
Lynch |
Death or disability of the shareholder |
Shares sold as part of a systematic withdrawal plan as described in the Fund’s
prospectus |
Return of excess contributions from an IRA Account |
Shares sold as part of a required minimum distribution for IRA and retirement
accounts pursuant to the Internal Revenue Code |
Shares sold to pay Merrill Lynch fees but only if the transaction is initiated by
Merrill Lynch |
Shares acquired through a right of reinstatement |
Shares held in retirement brokerage accounts, that are exchanged for a lower cost
share class due to transfer to certain fee based accounts or platforms
(applicable to A and C shares only) |
Shares received through an exchange due to the holdings moving from a Merrill Lynch
affiliated investment advisory program to a Merrill Lynch brokerage
(non-advisory) account pursuant to Merrill Lynch’s policies relating to sales
load discounts and waivers |
Front-end load Discounts Available at Merrill Lynch: Breakpoints,
Rights of Accumulation & Letters of Intent |
Breakpoints as described in this prospectus. |
Rights of Accumulation (ROA) which entitle shareholders to breakpoint discounts as
described in the Fund’s prospectus will be automatically calculated based on the aggregated holding of fund family assets held by accounts (including 529 program holdings, where applicable) within the purchaser’s household at
Merrill Lynch. Eligible fund family assets not held at Merrill Lynch may be included
in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets |
Letters of Intent (LOI) which allow for breakpoint discounts based on anticipated
purchases within a fund family, through Merrill Lynch, over a 13-month period of time |
Janney Montgomery Scott LLC
Effective May 1, 2020, if you purchase fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (“CDSC”), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in this fund’s Prospectus or SAI.
Front-end sales charge* waivers on Class A shares available at
Janney |
Shares purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family). |
Shares purchased by employees and registered representatives of Janney or its
affiliates and their family members as designated by Janney. |
Shares purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within ninety (90) days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement). |
Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans,
employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh
plans. |
Shares acquired through a right of reinstatement. |
Class C shares that are no longer subject to a contingent deferred sales charge and
are converted to Class A shares of the same fund pursuant to Janney’s policies and procedures. |
CDSC waivers on Class A and C shares available at
Janney |
Shares sold upon the death or disability of the shareholder.
|
Shares sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus. |
Shares purchased in connection with a return of excess contributions from an IRA
account. |
Shares sold as part of a required minimum distribution for IRA and other retirement
accounts due to the shareholder reaching age 70½ as described in the fund’s Prospectus. |
Shares sold to pay Janney fees but only if the transaction is initiated by
Janney. |
Shares acquired through a right of reinstatement. |
Shares exchanged into the same share class of a different fund.
|
Front-end sales charge* discounts available at Janney: breakpoints,
rights of accumulation, and/or letters of intent |
Breakpoints as described in the fund’s Prospectus. |
Rights of accumulation (“ROA”), which entitle shareholders to breakpoint
discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA
calculation only if the shareholder notifies his or her financial advisor about such
assets. |
Letters of intent which allow for breakpoint discounts based on anticipated
purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney Montgomery Scott may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor
about such assets. |
*Also referred to as an “initial sales charge.”
Edward D. Jones & Co. (“Edward Jones”)
Policies Regarding Transactions Through Edward Jones
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes prior information
with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms are eligible only for the following sales charge
discounts (also referred to as “breakpoints”) and waivers, which can differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information ("SAI") or through another broker-dealer. In all instances, it is the shareholder’s responsibility to inform Edward Jones at the time of purchase of any relationship, holdings of the Alger Funds, or other facts qualifying the purchaser for discounts or waivers. Edward Jones can ask for documentation of such circumstance.
Shareholders should contact Edward Jones if they have questions regarding their eligibility for these discounts and waivers.
Breakpoints
Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in
the prospectus.
Rights of Accumulation (“ROA”)
|
The applicable sales charge on a purchase of Class A shares is determined by taking
into account all share classes (except certain money market funds and
any assets held in group retirement plans) of the Alger Family of Funds held by the
shareholder or in an account grouped by Edward Jones with other
accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the
shareholder notifying Edward Jones of such assets at the time of calculation. Money
market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a
sales charge. |
The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to
establish or change ROA for the IRA accounts associated with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level. |
ROA is determined by calculating the higher of cost minus redemptions or market
value (current shares x NAV). |
|
Through a LOI, shareholders can receive the sales charge and breakpoint discounts
for purchases shareholders intend to make over a 13-month period from
the date Edward Jones receives the LOI. The LOI is determined by calculating the
higher of cost or market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a 13-month period to calculate the front-end sales charge and any breakpoint discounts.
Each purchase the shareholder makes during that 13-month period will receive the
sales charge and breakpoint discount that applies to the total amount. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder notifying Edward Jones of such assets at the time of calculation.
Purchases made before the LOI is received by Edward Jones are not adjusted under the
LOI and will not reduce the sales charge previously paid. Sales
charges will be adjusted if LOI is not met. |
If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to
establish or change ROA for the IRA accounts associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer. |
|
Sales charges are waived for the following shareholders and in the following
situations: |
Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by Edward Jones under its
policies and procedures) as the associate. This waiver will continue for the
remainder of the associate’s life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies and procedures. |
Shares purchased in an Edward Jones fee-based program. |
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment. |
Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met: 1) the proceeds are from
the sale of shares within 60 days of the purchase, and 2) the sale and purchase are
made in the same share class and the same account or the purchase is
made in an individual retirement account with proceeds from liquidations in a
non-retirement account. |
|
Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated at the discretion of
Edward Jones. Edward Jones is responsible for any remaining CDSC due to the fund
company, if applicable. Any future purchases are subject to the
applicable sales charge as disclosed in the prospectus. |
Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of the purchase date or earlier
at the discretion of Edward Jones. |
Contingent Deferred Sales Charge (“CDSC”)
Waivers |
If the shareholder purchases shares that are subject to a CDSC and those shares are
redeemed before the CDSC is expired, the shareholder is responsible to
pay the CDSC except in the following conditions: |
The death or disability of the shareholder |
Systematic withdrawals with up to 10% per year of the account value |
Return of excess contributions from an Individual Retirement Account (IRA) |
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder
reaches qualified age based on applicable IRS regulations |
Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones |
Shares exchanged in an Edward Jones fee-based program |
Shares acquired through NAV reinstatement |
Shares redeemed at the discretion of Edward Jones for Minimum Balances, as described below |
Other Important Information Regarding Transactions Through Edward
Jones
|
Initial purchase minimum: $250 |
Subsequent purchase minimum: none |
|
Edward Jones has the right to redeem at its discretion fund holdings with a balance
of $250 or less. The following are examples of accounts that are not
included in this policy: |
A fee-based account held on an Edward Jones platform |
A 529 account held on an Edward Jones platform |
An account with an active systematic investment plan or LOI |
|
At any time it deems necessary, Edward Jones has the authority to exchange at NAV a
shareholder’s holdings in a fund to Class A shares of the same fund. |
Oppenheimer & Co. Inc.
Shareholders purchasing Fund shares through an Oppenheimer & Co. Inc. (“OPCO”) platform or account are eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund’s prospectus or SAI. To receive a waiver, such waiver must be
requested when an eligible trade is made.
Front-end Sales Load Waivers on Class A Shares available at
OPCO |
Employer-sponsored retirement, deferred compensation and employee benefit plans
(including health savings accounts) and trusts used to fund those plans,
provided that the shares are not held in a commission-based brokerage account and
shares are held for the benefit of the plan |
Shares purchased by or through a 529 Plan |
Shares purchased through a OPCO affiliated investment advisory program
|
Shares purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the fund family) |
Shares purchased from the proceeds of redemptions within the same fund family,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and (3)
redeemed shares were subject to a front-end or deferred sales load (known as Rights of Restatement) |
Shareholders in the Fund’s Class C shares will have their shares converted at
net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the conversion is in line with the policies and procedures of OPCO |
Employees and registered representatives of OPCO or its affiliates and their family
members |
Trustees of the Fund, and employees of the Fund’s investment adviser or any of
its affiliates, as described in this prospectus |
CDSC Waivers on A, B and C Shares available at OPCO
|
Death or disability of the shareholder |
Shares sold as part of a systematic withdrawal plan as described in the Fund’s
prospectus |
Return of excess contributions from an IRA Account |
Shares sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based upon
applicable IRS regulations as described in the prospectus |
Shares sold to pay OPCO fees but only if the transaction is initiated by
OPCO |
Shares acquired through a right of reinstatement |
Front-end load Discounts Available at OPCO: Breakpoints, Rights of
Accumulation & Letters of Intent |
Breakpoints as described in this prospectus |
Rights of Accumulation (ROA) which entitle shareholders to breakpoint discounts will
be automatically calculated based on the aggregated holding of fund
family assets held by accounts within the purchaser’s household at OPCO.
Eligible fund family assets not held at OPCO may be included in the ROA
calculation only if the shareholder notifies his or her financial advisor about such
assets |
Robert W. Baird
& Co.
Shareholders purchasing Fund shares through a Robert W. Baird & Co.
(“Baird”) platform or account will only be eligible for the following sales charge waivers (front-end sales charge waivers and CDSC waivers) and discounts, which may
differ from those disclosed elsewhere in this prospectus or the SAI. To receive a waiver, such waiver must be requested when an eligible trade is made.
Front-End Sales Charge Waivers on Investor A Shares Available at
Baird |
Shares purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing share of the same Fund |
Share purchase by employees and registers representatives of Baird or its affiliate
and their family members as designated by Baird |
Shares purchased using the proceeds of redemptions within the Alger Family of Funds,
provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same accounts, and (3)
redeemed shares were subject to a front-end or deferred sales charge
(known as rights of reinstatement) |
A shareholder in the Fund’s Investor C shares will have their shares converted
at net asset value to Investor A shares of the same Fund if the shares are no longer subject to CDSC and the conversion is in line with the policies and procedures of Baird |
Employer-sponsored retirement plans or charitable accounts in a transactional
brokerage account at Baird, including 401(k) plans, 457 plans, employer-
sponsored 403(b) plans, profit sharing and money purchase pension plans and defined
benefit plans. For purposes of this provision, employer-sponsored
retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs
|
CDSC Waivers on Investor A and C Shares Available at
Baird |
Shares sold due to death or disability of the shareholder |
Shares sold as part of a systematic withdrawal plan as described in the Fund’s
prospectus |
Shares bought due to returns of excess contributions from an IRA
account |
Shares sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching the qualified age based on applicable Internal Revenue Service regulations as described in the Fund’s prospectus |
Shares sold to pay Baird fees but only if the transaction is initiated by
Baird |
Shares acquired through a right of reinstatement |
Front-End Sales Charge Discounts Available at Baird: Breakpoints
and/or Rights of Accumulations |
Breakpoints as described in the Fund’s prospectus |
Rights of accumulations which entitles shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of assets
within the Alger Family of Funds held by accounts within the purchaser’s
household at Baird. Eligible assets within the Alger Family of Funds not held at Baird may be included in the rights of accumulations calculation only if the shareholder notifies his or her financial advisor about such assets |
Letters of Intent (LOI) allow for breakpoint discounts based on anticipated
purchases within the Alger Family of Funds through Baird, over a 13-month period of time |
Stifel, Nicolaus
& Company, Incorporated (“Stifel”)
Shareholders purchasing Fund
shares through a Stifel platform or account or who own shares for which Stifel or an affiliate is the broker-dealer of record are eligible for the following additional sales charge
waiver, which may differ from the waivers disclosed elsewhere in this Fund’s prospectus or SAI. To receive a waiver, such waiver must be requested when an eligible trade is
made.
Front-end Sales Load Waiver on Class A Shares Available at
Stifel |
Class C shares that have been held for more than seven (7) years will be converted
to Class A shares of the same Fund pursuant to Stifel’s policies and procedures |
All other sales charge waivers and reductions described elsewhere in the Fund’
Prospectus or SAI still apply. |
No initial
sales charge is imposed on purchases of Class A Shares, and no CDSC is imposed on redemptions of Class shares, by the following financial institutions, on behalf of their clients,
and financial intermediaries offering self-directed investment brokerage accounts, that have an agreement in place with the Distributor:
(1)
Alcatel-lucent Investment Management Corporation
(2)
Alight Financial Solutions, LLC
(3)
Allstate Financial Services LLC
(4)
Alpine Financial Advisers, LLC
(5)
American Enterprise Investment Services
(6)
American Portfolios Financial Services
(7)
Ameritas Investment Corp
(9)
Apex Clearing Corporation
(11)
Ascensus Trust Company
(12)
Ausdal Financial Partners, Inc.
(13)
Avantax Investment Services, Inc.
(14)
Bankers Life Securities, Inc.
(16)
Benjamin F Edwards & Company, Inc.
(17)
Brown Brothers Harriman & Co.
(18)
Cadaret, Grant & Co. Inc.
(19)
Cambridge Investment Research Inc.
(21)
Capitol Securities Management Inc.
(22)
Cascade Financial Management Inc.
(23)
Centaurus Financial Inc.
(24)
Cetera Advisor Networks LLC
(26)
Cetera Financial Specialists LLC
(27)
Cetera Investment Services LLC
(29)
Client One Securities LLC
(32)
Cuso Financial Services, LP
(33)
DCC&S Default Dealer
(35)
Deutsche Bank Securities Inc.
(36)
E*Trade Clearing LLC
(40)
Equitable Advisors LLC
(41)
First Allied Securities, Inc.
(42)
Folio Investments, Inc.
(43)
Fred Alger & Company, LLC
(44)
FSC Securities Corporation
(45)
Fulcrum Securities LLC
(46)
Geneos Wealth Management, Inc.
(47)
Global Investor Services LC
(51)
Harbour Investments, Inc.
(52)
Hightower Advisors, LLC
(53)
Hornor Townsend & Kent Inc.
(56)
Independent Financial Group, LLC
(57)
Infinex Investments, Inc.
(58)
ING America Insurance Holdings Inc.
(59)
Janney Montgomery Scott LLC
(60)
JP Morgan Clearing Corp
(61)
Kestra Investment Services
(62)
Kovack Securities Inc.
(63)
Lamberson Knight Wealth Management LLC
(64)
Lincoln Financial Advisors
(65)
Lincoln Financial Securities
(66)
Lincoln Investment Planning, LLC
(68)
M Holdings Securities
(69)
Merrill Lynch, Pierce, Fenner & Smith Incorporated
(70)
Mid Atlantic Capital Corp
(71)
Mid Atlantic Clearing & Settlement Corp
(72)
MML Distributors LLC
(73)
MML Distributors SMF-PL
(74)
MML Investors Services, LLC
(75)
Money Concepts Capital Corp
(76)
Morgan Stanley Smith Barney LLC
(77)
MSCS Financial Services LLC
(78)
Mwa Financial Services Inc.
(79)
National Financial Services LLC
(80)
Nationwide Investment Services Corp
(81)
Network 1 Financial Securities Inc.
(82)
Northland Securities, Inc.
(83)
Northwestern Mutual Investment Services, LLC
(84)
NYlife Securities LLC
(85)
Oppenheimer & Co Inc.
(86)
Park Avenue Securities LLC
(87)
Pensionmark Securities LLC
(89)
Planmember Securities Corporation
(90)
Principal Securities, Inc.
(91)
Princor Financial Services
(92)
Prudential Investment Management Service
(93)
Raisonne & Hammer Price Corporation
(94)
Raymond James & Associates, Inc.
(95)
Raymond James Financial Services, Inc.
(96)
RBC Capital Markets LLC
(97)
Reliance Trust
Company
(98)
Robert W Baird & Co Inc.
(99)
Royal Alliance
Associates Inc.
(100)
Sagepoint Financial, Inc.
(101)
Securian Financial
Services Inc.
(102)
Securities America Inc.
(103)
Securities Service
Network, Inc.
(104)
Snowden Account Services, Inc.
(105)
State Street Bank & Trust Co.
(107)
Stifel, Nicolaus &
Company Inc.
(109)
TD Ameritrade
Clearing, Inc.
(110)
TD Ameritrade Trust Company
(111)
TFS Securities, Inc.
(112)
The Investment Center, Inc.
(113)
The O.n. Equity Sales Company
(114)
Tiaa-cref Individual & Institutional Services, LLC
(115)
Trilogy Financial Solutions
(116)
UBS Financial Services Inc.
(117)
United Planners Financial
(118)
US Bancorp Investments Inc.
(119)
Valmark Securities Inc.
(120)
Vanguard Fiduciary Trust Co
(121)
Vanguard Marketing Corporation
(122)
Voya Financial Advisors, Inc.
(124)
Waddell & Reed, Inc.
(126)
Wells Fargo Clearing Services LLC
(127)
Western International
(128)
Woodbury Financial Services
For Fund
Information:
|
|
|
Alger
Family of Funds c/o UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, WI 53212-2175 |
|
Text
versions of Fund documents can be downloaded from the following sources: |
|
• The Fund: http://www.alger.com |
|
• SEC (EDGAR data base): www.sec.gov |
Statement of Additional Information
For more detailed information about the Fund and its policies, please read the Fund’s Statement of Additional Information, which is incorporated by reference into (is legally made a part of) this Prospectus. You can get a free copy of the Statement of Additional Information by calling the Fund's toll-free number, at the Fund's website at www.alger.com or by writing to the address above. The Statement of Additional Information is on file with the SEC.
Annual and Semi-Annual Reports
Additional information about the Fund’s investments is available in the Fund’s annual and semi-annual reports to shareholders. In the Fund’s annual report you will find a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during the period covered by the report. You can receive free copies of these reports by calling the Fund's toll-free number, at the Fund's website at www.alger.com or by writing to the address above. Copies can also be obtained for a
duplicating fee by E-mail request to [email protected]. Fund documents are also available on the EDGAR database on the SEC’s Internet site at www.sec.gov. Quarterly Fund Holdings
The Fund’s most recent month end portfolio holdings are available approximately sixty days after month-end on the Fund’s website at www.alger.com. The Fund also files its complete schedule of portfolio holdings with the SEC for the first and third
quarter of each fiscal year as an exhibit to Form N-PORT and semi-annually on Form N-CSR. Forms N-PORT and N-CSR are available online on the SEC’s website at www.sec.gov. A copy of the most recent quarterly holdings may also be obtained from the Fund by calling (800) 992-3863.
Alger Electronic Delivery Service
The Fund provides you with an enhancement of your ability to access Fund documents online. When Fund documents such as prospectuses and annual and semi-annual reports are available, you will be sent an e-mail notification with a link that will take you directly to the Fund information on the Funds’ website. To sign up for this free service, enroll at www.icsdelivery.com/alger.
Distributor: Fred Alger & Company, LLC
The Alger Funds SEC File #811-1355
The information in this prospectus is not
complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED SEPTEMBER 23,
2021
Prospectus
[●]
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Alger Weatherbie Enduring Growth Fund |
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The Securities and Exchange Commission has not determined if the information in this Prospectus is accurate or complete, nor has it approved or disapproved these securities. It is a criminal offense to represent otherwise.
Summary
Section
Alger Weatherbie Enduring
Growth Fund
Investment Objective
Alger Weatherbie Enduring Growth Fund seeks long-term capital appreciation.
Fund Fees and Expenses
This table describes the fees and expenses that you may pay if you buy, hold and sell shares
of the Fund. You may pay other fees, such as brokerage commissions and other
fees to financial intermediaries, which are not reflected in the table and examples below.
Shareholder Fees
(fees paid directly from your investment)
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
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Distribution and/or Service (12b-1) Fees |
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Total Annual Fund Operating Expenses |
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Fee
Waiver and/or Expense Reimbursement*** |
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Total Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
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*
The Fund and Fred Alger
Management, LLC (the “Manager”) have adopted fee breakpoints for the Fund. The advisory fee for assets up to $250 million is .70%, and for assets in excess of $250
million is .50%.
**
“Other
Expenses” are based on estimated amounts for the current fiscal year. Actual expenses may differ from estimates.
***
The Manager has contractually agreed to waive fees or to reimburse Fund expenses (excluding acquired fund fees and expenses, dividend expense on short sales, borrowing costs, interest, taxes, brokerage and extraordinary expenses) through February 29, 2024 to the extent necessary to limit the total annual fund operating expenses of the Class I Shares of the Fund to 1.10% of the class’s average daily net assets. This expense reimbursement may only be amended or terminated prior to its expiration date by agreement between the Manager and the Fund’s Board of Trustees, and will terminate automatically in the event of termination of the Investment Advisory Agreement. The Manager may, during the term of the contract, recoup any fees waived or expenses reimbursed pursuant to the contract to the extent that such recoupment would not cause the expense ratio to exceed the stated limitation in effect at the time of (i) the waiver or reimbursement and (ii) the recoupment by the Manager, after repayment of the recoupment is taken into account.
Example
The following example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated, that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The one-year example and the period of the three-year
example through February 29, 2024 are based on net operating expenses, which reflect the contractual expense limitation agreed to by the Manager. Although your actual costs may be higher or lower, based on these assumptions you would pay the following
expenses if you redeemed your shares at the end of each period:
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or
"turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. No portfolio turnover rate is included for the Fund because the Fund has not yet commenced operations.
Principal Investment Strategy
The Fund is sub-advised by Weatherbie Capital, LLC (“Weatherbie” or the
“Sub-Adviser”), an affiliate of the Manager. The Manager oversees Weatherbie’s investment process. Weatherbie invests in small- and mid-cap growth companies that
Weatherbie believes have enduring earnings, reasonable valuations and a distinct competitive advantage. Weatherbie invests in Foundation growth stocks and Opportunity growth stocks. Foundation growth stocks are companies led by experienced management teams, with
innovative business models and the potential for high sales and earnings growth. Opportunity growth stocks are companies whose earnings may be temporarily depressed, but Weatherbie believes change is underway that can reaccelerate earnings.
The Fund invests primarily in equity securities of mid-cap companies with an
environmental, social and governance (“ESG”) rating of average or above by a third-party ESG rating agency (an “ESG Rating Agency”) that also demonstrate, in
the view of Weatherbie, promising growth potential.
Weatherbie employs fundamental analysis to identify innovative and dynamic companies and uses
an ESG Rating Agency’s ratings (as discussed below) to consider how such stocks rank within an industry or sector based on a company’s conduct in offering products or services that promote positive environmental, social and/or governance policies, or have a positive impact in these
areas, addressing concerns such as climate change, resource depletion, health and safety, employee relations and diversity, bribery and corruption, and fostering board diversity and structure. Under normal circumstances, the weighted average of the
Fund's holdings must be rated at or better than a medium or average rating provided by the ESG Rating Agency. The Fund will not invest in securities with a rating at or worse than severe or poor, as provided by the ESG Rating Agency. If a security’s rating is downgraded to severe or poor, Weatherbie will sell out of the security within a reasonable period of time. Unrated securities will be excluded from determining the weighted average rating. If a security is not rated by the ESG Rating Agency, the security will be
given a 12-month grace period from the date it is added to the Fund in order for the security to obtain a rating from the ESG Rating Agency. The number of portfolio holdings without a rating by the ESG Rating Agency will be limited to three securities and 20% of the Fund’s assets.
For purposes of the Fund’s principal investment strategies, “mid-cap
companies” are those companies that, at the time of purchase of the securities, generally have total market capitalization within the range of $1 billion to $25 billion.
Because of the Fund’s long-term approach to investing, it could have a significant portion of its assets invested in securities of issuers that have appreciated beyond the market capitalization thresholds noted.
Equity securities include common or preferred stocks that are listed on U.S. or foreign
exchanges.
The Fund intends to invest a substantial portion of its assets in a
smaller number of issuers. Generally, the Fund will own no more than 30 holdings. As a result, the Fund is a non-diversified investment company, which means the performance results
of any one position may have a greater impact on the Fund’s performance. Fund holdings may differ from this number for any reason. Such reasons may be, among others, because of extreme market volatility, such as when the Fund has entered a temporary defensive
position. Additionally, the Fund may temporarily exceed the stated number of holdings when it acquires a new holding and determines that it is in the best interests of shareholders to sell an existing holding over a period of time, instead of immediately selling the entire holding.
The Fund may invest a significant portion of its assets in securities of companies conducting
business within a single sector.
The Fund may sell a stock when it reaches a
target price, it fails to perform as expected, or other opportunities appear more attractive. As a result, the Fund may engage in active trading of portfolio
securities.
The Fund invests in cash (and cash equivalents) when the Fund is
unable to find enough attractive long-term investments to meet its investment objective, in times of adverse or unstable market, economic or political conditions, to meet
redemptions and/or when the Sub-Adviser believes it is advisable to do so. Except during temporary defensive periods, such investments will not exceed 15% of the Fund’s assets.
Principal Risks
An investment in the Fund involves risks. The Fund’s share price may go down, which means you could lose
money. An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The following is a summary description of principal risks involved in investing in the Fund.
Investment Risk – An investment in the Fund is subject to investment risk, including the
possible loss of the entire principal amount that you invest.
Market Risk – Your investment in Fund shares represents an indirect investment in the
securities owned by the Fund. 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, if applicable. Local,
regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact
on the Fund and its investments.
An outbreak of respiratory disease caused by a
novel coronavirus designated as COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain
its spread have resulted in, among other things, border closings and other significant travel restrictions and disruptions; significant disruptions to business operations, supply chains and customer activity; lower consumer demand for goods and services; significant job losses and
increasing unemployment; event cancellations and restrictions; service cancellations, reductions and other changes; significant challenges in healthcare service preparation and delivery; prolonged quarantines; as well as general concern and uncertainty that has negatively affected the economic environment. The impact of this outbreak and any other epidemic or pandemic that may
arise in the future could adversely affect the economies of many nations or the entire global economy and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. Although the Federal Reserve has taken a number of actions to mitigate the impact of COVID-19 on U.S. markets and institutions, including
decreasing interest rates and implementing a variety of emergency stimulus measures, these actions may not succeed or have the intended effect. This crisis or other public health crises may also exacerbate other pre-existing political, social, economic, market and financial risks. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty. The foregoing could result in significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher
default rates and a substantial economic downturn or recession. Such impacts could impair the Fund’s ability to maintain operational standards (such as with respect to satisfying redemption requests), disrupt the operations of the Fund’s service providers, adversely affect the value and liquidity of the Fund’s investments and negatively impact the Fund’s performance and your investment in the Fund.
Equity Securities Risk – As with any fund that invests in stocks, your investment will
fluctuate in value, and the loss of your investment is a risk of investing. The Fund’s price per share will fluctuate due to changes in the market prices of its investments.
Also, the Fund’s investments may not grow as fast as the rate of inflation and stocks tend to be more volatile than some other investments you could make, such as bonds.
Environmental, Social and/or Governance Sustainability-Related Securities
Risk – The Fund’s ESG investment criteria may result in the selection or exclusion of securities of
certain issuers for reasons other than financial performance, and carries the risk that the Fund’s investment returns may underperform funds that do not utilize an ESG
investment strategy. The application of this strategy may affect the Fund’s investment exposure to certain companies, sectors, regions, countries or types of investments,
which could negatively impact the Fund’s performance depending on whether such investments are in or out of favor. Applying ESG criteria to investment decisions is qualitative and subjective by nature, and there is no guarantee that the criteria utilized by the Sub-Adviser or any judgment exercised by the Sub-Adviser will reflect the beliefs or values of any particular investor. ESG
standards differ by region and industry, and a company’s ESG practices or the Sub-Adviser’s assessment of a company’s ESG practices may change over time.
Small Number of Holdings Risk – Under normal circumstances, the Fund invests in a
portfolio of no more than 30 stocks. Therefore, the Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a higher number of holdings.
Mid Cap Securities Risk – There may be greater risk in investing in medium-capitalization companies rather than larger, more established companies due
to such factors as inexperienced management and limited product lines or financial resources. It may also be difficult or impossible to liquidate a security position at a time and
price acceptable to the Fund because of the potentially less frequent trading of stocks of smaller market capitalization.
Growth Stocks Risk – Prices of growth stocks tend to be higher in relation to their companies’ earnings and may be more sensitive to market,
political and economic developments than other stocks, making their prices more volatile. An investment in the Fund may be better suited to investors who seek long-term capital
growth and can tolerate fluctuations in their investment’s value.
Sector Risk – The Fund may have a significant portion of its assets invested in
securities of companies conducting business within a single sector. Companies in the same sector may be similarly affected by economic, regulatory, political or market events
or conditions, which may make the Fund more vulnerable to unfavorable developments in that sector than a fund that has a more diversified portfolio. Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
Non-Diversification Risk – The Fund is a non-diversified investment company. Therefore,
the Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a diversified portfolio.
Portfolio Turnover (Active Trading) Risk – Because the Fund may engage in active trading
of portfolio securities, it may incur increased transaction costs and brokerage commissions, both of which can lower the actual return on an investment. Active trading may also increase short-term gains and losses, which may affect the taxes a shareholder has to pay.
Cash Position Risk
– The Fund’s large cash position may underperform relative to both equity and fixed-income securities.
Performance
No performance information will be presented until the Fund has been in operation for a full
calendar year. Annual performance information gives some indication of the risks of an investment in the Fund by
comparing the Fund’s performance with a broad measure of market performance. The Fund’s past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future.
Updated performance will be available at www.alger.com within a reasonable amount of time after the Fund commences operations.
Management
|
Portfolio Managers Jointly and Primarily Responsible for Day-to-Day Management of
the Fund |
Fred Alger Management, LLC |
|
|
|
|
H. George Dai, Ph.D. Chief Investment Officer and Senior Portfolio Manager of Weatherbie Capital, LLC
Since Inception |
Joshua D. Bennett, CFA Chief Operating Officer and Senior Portfolio Manager of Weatherbie Capital, LLC
Since Inception |
*
Weatherbie Capital, LLC, an affiliate of the Manager, sub-advises the Fund subject to the
Manager’s supervision and approval.
When a Fund is co-managed, the responsibilities of such portfolio managers may be shared, divided or otherwise assigned based on various factors including, but not limited to, level of Fund assets to be managed, their overall experience, their sector expertise, and such other factors as the Manager believes is most efficient and effective. In all cases, each portfolio manager collaborates with the other portfolio manager(s) and analysts to develop overall strategy, outlook, and themes, which impact industry, sector
and security allocations in the Fund. Responsibilities amongst portfolio managers may be fully or partially allocated to one of the portfolio managers for the purposes of day-to-day portfolio management and stock selection, implementation of trades, strategic
and performance oversight, risk management, or oversight of guidelines; whether externally driven or internally developed by the Manager.
Shareholder Information
Purchasing and Redeeming Fund Shares
The Fund’s Class I Shares are not subject to a minimum initial investment. Class I
Shares are an investment vehicle principally for institutional investors such as registered investment advisers, banks, trust companies, and other financial institutions, for
investments in employee benefit plans, or for advisory platform investors who pay a separate fee to such institution for the right to invest.
Investors may purchase or redeem Fund shares on any business day through a financial intermediary.
Tax Information
The Fund’s distributions may be taxable as ordinary income or capital gains. The Fund is
actively managed, and as a result, investors may receive capital gains distributions annually.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a
bank), the Fund and/or the Manager or the Fund’s distributor may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial professional to recommend the Fund over another investment. Ask your financial professional or visit your financial intermediary’s website for more information.
Alger Weatherbie Enduring Growth Fund
Investment Objective
Alger Weatherbie Enduring Growth Fund seeks long-term capital appreciation.
Fund Fees and Expenses
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
|
Distribution and/or Service (12b-1) Fees |
|
|
|
Total Annual Fund Operating Expenses |
|
Fee
Waiver and/or Expense Reimbursement*** |
|
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
|
*
The Fund and Fred Alger
Management, LLC (the “Manager”) have adopted fee breakpoints for the Fund. The advisory fee for assets up to $250 million is .70%, and for assets in excess of $250
million is .50%.
**
“Other
Expenses” are based on estimated amounts for the current fiscal year. Actual expenses may differ from estimates.
***
The Manager has contractually agreed to waive fees or to reimburse Fund expenses (excluding acquired fund fees and expenses, dividend expense on short sales, borrowing costs, interest, taxes, brokerage and extraordinary expenses) through February 29, 2024 to the extent necessary to limit the total annual fund operating expenses of the Class Y Shares of the Fund to 0.70% of the class’s average daily net assets. This expense reimbursement may only be amended or terminated prior to its expiration date by agreement between the Manager and the Fund’s Board of Trustees, and will terminate automatically in the event of termination of the Investment Advisory Agreement. The Manager may, during the term of the contract, recoup any fees waived or expenses reimbursed pursuant to the contract to the extent that such recoupment would not cause the expense ratio to exceed the stated limitation in effect at the time of (i) the waiver or reimbursement and (ii) the recoupment by the Manager, after repayment of the recoupment is taken into account.
Example
The following example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated, that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The one-year example and the period of the three-year
example through February 29, 2024 are based on net operating expenses, which reflect the contractual expense limitation agreed to by the Manager. Although your actual costs may be higher or lower, based on these assumptions you would pay the following
expenses if you redeemed your shares at the end of each period:
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or
"turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. No portfolio turnover rate is included for the Fund because the Fund has not yet commenced operations.
Principal Investment Strategy
The Fund is sub-advised by Weatherbie Capital, LLC (“Weatherbie” or the
“Sub-Adviser”), an affiliate of the Manager. The Manager oversees Weatherbie’s investment process. Weatherbie invests in small- and mid-cap growth companies that
Weatherbie believes have enduring earnings, reasonable valuations and a distinct competitive advantage. Weatherbie invests in Foundation growth stocks and Opportunity growth stocks. Foundation growth stocks are companies led by experienced management teams, with
innovative business models and the
potential for high sales and earnings growth. Opportunity growth stocks are companies whose earnings may be temporarily depressed, but Weatherbie believes change is underway that
can reaccelerate earnings.
The Fund invests primarily in equity securities of mid-cap companies with an environmental, social and governance (“ESG”) rating of average or above by a third-party ESG rating agency (an “ESG Rating Agency”) that also demonstrate, in the view of Weatherbie, promising growth potential.
Weatherbie employs fundamental analysis to identify innovative and dynamic companies and uses an ESG Rating Agency’s ratings (as discussed below) to consider how such stocks rank within an industry or sector based on a company’s conduct in offering products or services that promote positive environmental, social and/or governance policies, or have a positive impact in these
areas, addressing concerns such as climate change, resource depletion, health and safety, employee relations and diversity, bribery and corruption, and fostering board diversity and structure. Under normal circumstances, the weighted average of the
Fund's holdings must be rated at or better than a medium or average rating provided by the ESG Rating Agency. The Fund will not invest in securities with a rating at or worse than severe or poor, as provided by the ESG Rating Agency. If a security’s rating is downgraded to severe or poor, Weatherbie will sell out of the security within a reasonable period of time. Unrated securities will be excluded from determining the weighted average rating. If a security is not rated by the ESG Rating Agency, the security will be
given a 12-month grace period from the date it is added to the Fund in order for the security to obtain a rating from the ESG Rating Agency. The number of portfolio holdings without a rating by the ESG Rating Agency will be limited to three securities and 20% of the Fund’s assets.
For purposes of the Fund’s principal investment strategies, “mid-cap
companies” are those companies that, at the time of purchase of the securities, generally have total market capitalization within the range of $1 billion to $25 billion.
Because of the Fund’s long-term approach to investing, it could have a significant portion of its assets invested in securities of issuers that have appreciated beyond the market capitalization thresholds noted.
Equity securities include common or preferred stocks that are listed on U.S. or foreign
exchanges.
The Fund intends to invest a substantial portion of its assets in a
smaller number of issuers. Generally, the Fund will own no more than 30 holdings. As a result, the Fund is a non-diversified investment company, which means the performance results
of any one position may have a greater impact on the Fund’s performance. Fund holdings may differ from this number for any reason. Such reasons may be, among others, because of extreme market volatility, such as when the Fund has entered a temporary defensive
position. Additionally, the Fund may temporarily exceed the stated number of holdings when it acquires a new holding and determines that it is in the best interests of shareholders to sell an existing holding over a period of time, instead of immediately selling the entire holding.
The Fund may invest a significant portion of its assets in securities of companies conducting
business within a single sector.
The Fund may sell a stock when it reaches a
target price, it fails to perform as expected, or other opportunities appear more attractive. As a result, the Fund may engage in active trading of portfolio
securities.
The Fund invests in cash (and cash equivalents) when the Fund is
unable to find enough attractive long-term investments to meet its investment objective, in times of adverse or unstable market, economic or political conditions, to meet
redemptions and/or when the Sub-Adviser believes it is advisable to do so. Except during temporary defensive periods, such investments will not exceed 15% of the Fund’s assets.
Principal Risks
An investment in the Fund involves risks. The Fund’s share price may go down, which means you could lose
money. An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The following is a summary description of principal risks involved in investing in the Fund.
Investment Risk – An investment in the Fund is subject to investment risk, including the
possible loss of the entire principal amount that you invest.
Market Risk – Your investment in Fund shares represents an indirect investment in the
securities owned by the Fund. 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, if applicable. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments.
An outbreak of respiratory disease caused by a novel coronavirus designated as COVID-19 was
first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in, among other things, border closings and other significant travel restrictions and disruptions; significant disruptions to business operations, supply chains and customer activity; lower consumer demand for goods and services; significant job losses and
increasing unemployment; event cancellations and restrictions; service cancellations, reductions and other changes; significant
challenges in healthcare service
preparation and delivery; prolonged quarantines; as well as general concern and uncertainty that has negatively affected the economic environment. The impact of this outbreak and
any other epidemic or pandemic that may arise in the future could adversely affect the economies of many nations or the entire global economy and the financial performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. Although the Federal Reserve has taken a number of actions to mitigate the impact of COVID-19 on U.S. markets and institutions, including
decreasing interest rates and implementing a variety of emergency stimulus measures, these actions may not succeed or have the intended effect. This crisis or other public health crises may also exacerbate other pre-existing political, social, economic, market and financial risks. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty. The foregoing could result in significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher
default rates and a substantial economic downturn or recession. Such impacts could impair the Fund’s ability to maintain operational standards (such as with respect to satisfying redemption requests), disrupt the operations of the Fund’s service providers, adversely affect the value and liquidity of the Fund’s investments and negatively impact the Fund’s performance and your investment in the Fund.
Equity Securities Risk – As with any fund that invests in stocks, your investment will
fluctuate in value, and the loss of your investment is a risk of investing. The Fund’s price per share will fluctuate due to changes in the market prices of its investments.
Also, the Fund’s investments may not grow as fast as the rate of inflation and stocks tend to be more volatile than some other investments you could make, such as bonds.
Environmental, Social and/or Governance Sustainability-Related Securities
Risk – The Fund’s ESG investment criteria may result in the selection or exclusion of securities of
certain issuers for reasons other than financial performance, and carries the risk that the Fund’s investment returns may underperform funds that do not utilize an ESG
investment strategy. The application of this strategy may affect the Fund’s investment exposure to certain companies, sectors, regions, countries or types of investments,
which could negatively impact the Fund’s performance depending on whether such investments are in or out of favor. Applying ESG criteria to investment decisions is qualitative and subjective by nature, and there is no guarantee that the criteria utilized by the Sub-Adviser or any judgment exercised by the Sub-Adviser will reflect the beliefs or values of any particular investor. ESG
standards differ by region and industry, and a company’s ESG practices or the Sub-Adviser’s assessment of a company’s ESG practices may change over time.
Small Number of Holdings Risk – Under normal circumstances, the Fund invests in a
portfolio of no more than 30 stocks. Therefore, the Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a higher number of holdings.
Mid Cap Securities Risk – There may be greater risk in investing in medium-capitalization companies rather than larger, more established companies due
to such factors as inexperienced management and limited product lines or financial resources. It may also be difficult or impossible to liquidate a security position at a time and
price acceptable to the Fund because of the potentially less frequent trading of stocks of smaller market capitalization.
Growth Stocks Risk – Prices of growth stocks tend to be higher in relation to their companies’ earnings and may be more sensitive to market,
political and economic developments than other stocks, making their prices more volatile. An investment in the Fund may be better suited to investors who seek long-term capital
growth and can tolerate fluctuations in their investment’s value.
Sector Risk – The Fund may have a significant portion of its assets invested in
securities of companies conducting business within a single sector. Companies in the same sector may be similarly affected by economic, regulatory, political or market events
or conditions, which may make the Fund more vulnerable to unfavorable developments in that sector than a fund that has a more diversified portfolio. Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
Non-Diversification Risk – The Fund is a non-diversified investment company. Therefore,
the Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a diversified portfolio.
Portfolio Turnover (Active Trading) Risk – Because the Fund may engage in active trading
of portfolio securities, it may incur increased transaction costs and brokerage commissions, both of which can lower the actual return on an investment. Active trading may also increase short-term gains and losses, which may affect the taxes a shareholder has to pay.
Cash Position Risk – The Fund’s large cash position may underperform relative to both equity and fixed-income securities.
Performance
No performance information will be presented until the Fund has been in operation for a full
calendar year. Annual performance information gives some indication of the risks of an investment in the Fund by
comparing the Fund’s performance with a broad measure of market performance. The Fund’s past
performance (before and after taxes) is not necessarily an indication of how the
Fund will perform in the future. Updated
performance will be available at www.alger.com within a reasonable amount of time after the Fund commences operations.
Management
|
Portfolio Managers Jointly and Primarily Responsible for Day-to-Day Management of
the Fund |
Fred Alger Management, LLC |
|
|
|
|
H. George Dai, Ph.D. Chief Investment Officer and Senior Portfolio Manager of Weatherbie Capital, LLC
Since Inception |
Joshua D. Bennett, CFA Chief Operating Officer and Senior Portfolio Manager of Weatherbie Capital, LLC
Since Inception |
*
Weatherbie Capital, LLC, an affiliate of the Manager, sub-advises the Fund subject to the
Manager’s supervision and approval.
When a Fund is co-managed, the responsibilities of such portfolio managers may be shared, divided or otherwise assigned based on various factors including, but not limited to, level of Fund assets to be managed, their overall experience, their sector expertise, and such other factors as the Manager believes is most efficient and effective. In all cases, each portfolio manager collaborates with the other portfolio manager(s) and analysts to develop overall strategy, outlook, and themes, which impact industry, sector
and security allocations in the Fund. Responsibilities amongst portfolio managers may be fully or partially allocated to one of the portfolio managers for the purposes of day-to-day portfolio management and stock selection, implementation of trades, strategic
and performance oversight, risk management, or oversight of guidelines; whether externally driven or internally developed by the Manager.
Shareholder Information
Purchasing and Redeeming Fund Shares
The Fund’s Class Y Shares are generally subject to a minimum initial investment of
$500,000. Class Y Shares are available for purchase by institutional investors such as qualified and non-qualified retirement, deferred compensation, and benefit plans, bank and trust companies, insurance companies, corporations, charitable organizations, endowments and foundations, government
entities, and fund-of-funds.
Investors may purchase or redeem Fund shares on any business day through a financial intermediary.
Tax Information
The Fund’s distributions may be taxable as ordinary income or capital gains. The Fund is
actively managed, and as a result, investors may receive capital gains distributions annually.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a
bank), the Fund and/or the Manager or the Fund’s distributor may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial professional to recommend the Fund over another investment. Ask your financial professional or visit your financial intermediary’s website for more information.
Alger Weatherbie Enduring Growth Fund
Investment Objective
Alger Weatherbie Enduring Growth Fund seeks long-term capital appreciation.
Fund Fees and Expenses
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and examples below.
Shareholder Fees
(fees paid directly from your investment)
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
|
Distribution and/or Service (12b-1) Fees |
|
|
|
Total Annual Fund Operating Expenses |
|
Fee
Waiver and/or Expense Reimbursement*** |
|
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
|
*
The Fund and Fred Alger
Management, LLC (the “Manager”) have adopted fee breakpoints for the Fund. The advisory fee for assets up to $250 million is .70%, and for assets in excess of $250
million is .50%.
**
“Other
Expenses” are based on estimated amounts for the current fiscal year. Actual expenses may differ from estimates.
***
The Manager has contractually agreed to waive fees or to reimburse Fund expenses (excluding acquired fund fees and expenses, dividend expense on short sales, borrowing costs, interest, taxes, brokerage and extraordinary expenses) through February 29, 2024 to the extent necessary to limit the total annual fund operating expenses of the Class Z Shares of the Fund to 0.75% of the class’s average daily net assets. This expense reimbursement may only be amended or terminated prior to its expiration date by agreement between the Manager and the Fund’s Board of Trustees, and will terminate automatically in the event of termination of the Investment Advisory Agreement. The Manager may, during the term of the contract, recoup any fees waived or expenses reimbursed pursuant to the contract to the extent that such recoupment would not cause the expense ratio to exceed the stated limitation in effect at the time of (i) the waiver or reimbursement and (ii) the recoupment by the Manager, after repayment of the recoupment is taken into account.
Example
The following example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated, that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. The one-year example and the period of the three-year
example through February 29, 2024 are based on net operating expenses, which reflect the contractual expense limitation agreed to by the Manager. Although your actual costs may be higher or lower, based on these assumptions you would pay the following
expenses if you redeemed your shares at the end of each period:
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or
"turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. No portfolio turnover rate is included for the Fund because the Fund has not yet commenced operations.
Principal Investment Strategy
The Fund is sub-advised by Weatherbie Capital, LLC (“Weatherbie” or the
“Sub-Adviser”), an affiliate of the Manager. The Manager oversees Weatherbie’s investment process. Weatherbie invests in small- and mid-cap growth companies that
Weatherbie believes have enduring earnings, reasonable valuations and a distinct competitive advantage. Weatherbie invests in Foundation growth
stocks and Opportunity growth stocks.
Foundation growth stocks are companies led by experienced management teams, with innovative business models and the potential for high sales and earnings growth. Opportunity growth
stocks are companies whose earnings may be temporarily depressed, but Weatherbie believes change is underway that can reaccelerate earnings.
The Fund invests
primarily in equity securities of mid-cap companies with an environmental, social and governance (“ESG”) rating of average or above by a third-party ESG rating agency
(an “ESG Rating Agency”) that also demonstrate, in the view of Weatherbie, promising growth
potential.
Weatherbie employs fundamental analysis to identify innovative and dynamic companies and uses
an ESG Rating Agency’s ratings (as discussed below) to consider how such stocks rank within an industry or sector based on a company’s conduct in offering products or services that promote positive environmental, social and/or governance policies, or have a positive impact in these
areas, addressing concerns such as climate change, resource depletion, health and safety, employee relations and diversity, bribery and corruption, and fostering board diversity and structure. Under normal circumstances, the weighted average of the
Fund's holdings must be rated at or better than a medium or average rating provided by the ESG Rating Agency. The Fund will not invest in securities with a rating at or worse than severe or poor, as provided by the ESG Rating Agency. If a security’s rating is downgraded to severe or poor, Weatherbie will sell out of the security within a reasonable period of time. Unrated securities will be excluded from determining the weighted average rating. If a security is not rated by the ESG Rating Agency, the security will be
given a 12-month grace period from the date it is added to the Fund in order for the security to obtain a rating from the ESG Rating Agency. The number of portfolio holdings without a rating by the ESG Rating Agency will be limited to three securities and 20% of the Fund’s assets.
For purposes of the Fund’s principal investment strategies, “mid-cap
companies” are those companies that, at the time of purchase of the securities, generally have total market capitalization within the range of $1 billion to $25 billion.
Because of the Fund’s long-term approach to investing, it could have a significant portion of its assets invested in securities of issuers that have appreciated beyond the market capitalization thresholds noted.
Equity securities include common or preferred stocks that are listed on U.S. or foreign
exchanges.
The Fund intends to invest a substantial portion of its assets in a
smaller number of issuers. Generally, the Fund will own no more than 30 holdings. As a result, the Fund is a non-diversified investment company, which means the performance results
of any one position may have a greater impact on the Fund’s performance. Fund holdings may differ from this number for any reason. Such reasons may be, among others, because of extreme market volatility, such as when the Fund has entered a temporary defensive
position. Additionally, the Fund may temporarily exceed the stated number of holdings when it acquires a new holding and determines that it is in the best interests of shareholders to sell an existing holding over a period of time, instead of immediately selling the entire holding.
The Fund may invest a significant portion of its assets in securities of companies conducting
business within a single sector.
The Fund may sell a stock when it reaches a
target price, it fails to perform as expected, or other opportunities appear more attractive. As a result, the Fund may engage in active trading of portfolio
securities.
The Fund invests in cash (and cash equivalents) when the Fund is
unable to find enough attractive long-term investments to meet its investment objective, in times of adverse or unstable market, economic or political conditions, to meet
redemptions and/or when the Sub-Adviser believes it is advisable to do so. Except during temporary defensive periods, such investments will not exceed 15% of the Fund’s assets.
Principal Risks
An investment in the Fund involves risks. The Fund’s share price may go down, which means you could lose
money. An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The following is a summary description of principal risks involved in investing in the Fund.
Investment Risk – An investment in the Fund is subject to investment risk, including the
possible loss of the entire principal amount that you invest.
Market Risk – Your investment in Fund shares represents an indirect investment in the
securities owned by the Fund. 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, if applicable. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments.
An outbreak of respiratory disease caused by a novel coronavirus designated as COVID-19 was
first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in, among other things, border closings and other significant travel restrictions and disruptions; significant disruptions to business operations, supply chains and customer activity; lower consumer demand for goods and services; significant job losses and
increasing unemployment; event
cancellations and restrictions; service cancellations, reductions and other changes; significant challenges in healthcare service preparation and delivery; prolonged quarantines; as
well as general concern and uncertainty that has negatively affected the economic environment. The impact of this outbreak and any other epidemic or pandemic that may arise in the future could adversely affect the economies of many nations or the entire global economy and the financial
performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. Although the Federal Reserve has taken a number of actions to mitigate the impact of COVID-19 on U.S. markets and institutions, including
decreasing interest rates and implementing a variety of emergency stimulus measures, these actions may not succeed or have the intended effect. This crisis or other public health crises may also exacerbate other pre-existing political, social, economic, market and financial risks. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty. The foregoing could result in significant market volatility, exchange trading suspensions and closures, declines in global financial markets, higher
default rates and a substantial economic downturn or recession. Such impacts could impair the Fund’s ability to maintain operational standards (such as with respect to satisfying redemption requests), disrupt the operations of the Fund’s service providers, adversely affect the value and liquidity of the Fund’s investments and negatively impact the Fund’s performance and your investment in the Fund.
Equity Securities Risk – As with any fund that invests in stocks, your investment will
fluctuate in value, and the loss of your investment is a risk of investing. The Fund’s price per share will fluctuate due to changes in the market prices of its investments.
Also, the Fund’s investments may not grow as fast as the rate of inflation and stocks tend to be more volatile than some other investments you could make, such as bonds.
Environmental, Social and/or Governance Sustainability-Related Securities
Risk – The Fund’s ESG investment criteria may result in the selection or exclusion of securities of
certain issuers for reasons other than financial performance, and carries the risk that the Fund’s investment returns may underperform funds that do not utilize an ESG
investment strategy. The application of this strategy may affect the Fund’s investment exposure to certain companies, sectors, regions, countries or types of investments,
which could negatively impact the Fund’s performance depending on whether such investments are in or out of favor. Applying ESG criteria to investment decisions is qualitative and subjective by nature, and there is no guarantee that the criteria utilized by the Sub-Adviser or any judgment exercised by the Sub-Adviser will reflect the beliefs or values of any particular investor. ESG
standards differ by region and industry, and a company’s ESG practices or the Sub-Adviser’s assessment of a company’s ESG practices may change over time.
Small Number of Holdings Risk – Under normal circumstances, the Fund invests in a
portfolio of no more than 30 stocks. Therefore, the Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a higher number of holdings.
Mid Cap Securities Risk – There may be greater risk in investing in medium-capitalization companies rather than larger, more established companies due
to such factors as inexperienced management and limited product lines or financial resources. It may also be difficult or impossible to liquidate a security position at a time and
price acceptable to the Fund because of the potentially less frequent trading of stocks of smaller market capitalization.
Growth Stocks Risk – Prices of growth stocks tend to be higher in relation to their companies’ earnings and may be more sensitive to market,
political and economic developments than other stocks, making their prices more volatile. An investment in the Fund may be better suited to investors who seek long-term capital
growth and can tolerate fluctuations in their investment’s value.
Sector Risk – The Fund may have a significant portion of its assets invested in
securities of companies conducting business within a single sector. Companies in the same sector may be similarly affected by economic, regulatory, political or market events
or conditions, which may make the Fund more vulnerable to unfavorable developments in that sector than a fund that has a more diversified portfolio. Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
Non-Diversification Risk – The Fund is a non-diversified investment company. Therefore,
the Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a diversified portfolio.
Portfolio Turnover (Active Trading) Risk – Because the Fund may engage in active trading
of portfolio securities, it may incur increased transaction costs and brokerage commissions, both of which can lower the actual return on an investment. Active trading may also increase short-term gains and losses, which may affect the taxes a shareholder has to pay.
Cash Position Risk – The Fund’s large cash position may underperform relative to both equity and fixed-income securities.
Performance
No performance information will be presented until the Fund has been in operation for a full
calendar year. Annual performance information gives some indication of the risks of an investment in the Fund by
comparing the Fund’s performance with a broad measure of market performance. The Fund’s past
performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future.
Updated performance will be available at www.alger.com within a reasonable amount of time after the Fund commences operations.
Management
|
Portfolio Managers Jointly and Primarily Responsible for Day-to-Day Management of
the Fund |
Fred Alger Management, LLC |
|
|
|
|
H. George Dai, Ph.D. Chief Investment Officer and Senior Portfolio Manager of Weatherbie Capital, LLC
Since Inception |
Joshua D. Bennett, CFA Chief Operating Officer and Senior Portfolio Manager of Weatherbie Capital, LLC
Since Inception |
*
Weatherbie Capital, LLC, an affiliate of the Manager, sub-advises the Fund subject to the
Manager’s supervision and approval.
When a Fund is co-managed, the responsibilities of such portfolio managers may be shared, divided or otherwise assigned based on various factors including, but not limited to, level of Fund assets to be managed, their overall experience, their sector expertise, and such other factors as the Manager believes is most efficient and effective. In all cases, each portfolio manager collaborates with the other portfolio manager(s) and analysts to develop overall strategy, outlook, and themes, which impact industry, sector
and security allocations in the Fund. Responsibilities amongst portfolio managers may be fully or partially allocated to one of the portfolio managers for the purposes of day-to-day portfolio management and stock selection, implementation of trades, strategic
and performance oversight, risk management, or oversight of guidelines; whether externally driven or internally developed by the Manager.
Shareholder Information
Purchasing and Redeeming Fund Shares
The Fund’s Class Z Shares are generally subject to a minimum initial investment of
$500,000, which may be waived for group employer-sponsored 401(k) plans, 457 plans, employer sponsored 403(b) plans, profit-sharing and money purchase pension plans, defined benefit plans, retiree health benefit plans and non-qualified deferred compensation plans. The waiver is available only for retirement plans that hold omnibus positions, or for aggregate plan participant positions, for each Fund made available for the plan. The waiver is generally not available to non-retirement accounts, traditional and Roth Individual Retirement Accounts,
Coverdell Education Savings Accounts, SEPs, SARSEPs, SIMPLE IRAs, individual 401(k) plans or individual 403(b) plans. The minimum initial investment may also be waived for direct shareholders investing through an intermediary with aggregate assets of
$125 million or more invested in the family of funds advised by the Manager.
Investors may purchase or redeem Fund shares on any business day through a financial intermediary or directly with the Fund’s transfer agent.
Tax Information
The Fund’s distributions may be taxable as ordinary income or capital gains. The Fund is actively managed, and as a result, investors may receive capital gains distributions annually.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and/or the Manager or the Fund’s distributor may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial professional to recommend the Fund over another investment. Ask your financial professional or visit your financial intermediary’s website for more information.
Investment
Objective, Investment Strategies and Related Risks
The investment objective,
principal strategy and primary risks of the Fund are discussed individually above. The Fund’s investment objective is a non-fundamental investment policy and may be changed by
the Board of Trustees (the “Board”) without shareholder approval. The Fund will provide its shareholders with at least 60 days’ prior notice of any change to its
investment objective. The Fund may, from time to time, take temporary defensive positions that are inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, or other conditions. The Fund may not achieve its
investment objective while in a temporary defensive position.
All of the Fund’s share classes invest in the same portfolio of securities. Performance of each share class will vary from the performance of the Fund’s other share classes due to the differences in charges or expenses. The Fund’s past performance (before and after taxes) is not necessarily an indication of how it will perform in the future.
Investment Objective
Alger Weatherbie Enduring Growth Fund seeks long-term capital appreciation.
Principal Investment Strategies
The following are the Fund’s investment process and principal investment strategies. The Fund may invest in other securities that are not its principal strategy, and such strategies and related risks are described in more detail in the Fund’s Statement of Additional Information (“SAI”).
The Fund invests primarily in equity securities. The Fund’s investments in equity securities are primarily in common or preferred stocks, but its equity investments may also include securities convertible into or exchangeable for equity securities (including
warrants and rights) and depositary receipts. The Fund invests primarily in companies whose securities are traded on U.S. or foreign exchanges.
The
Fund’s investment manager, Fred Alger Management, LLC (“Alger Management” or the “Manager”), and the Fund is sub-advised by Weatherbie Capital, LLC
(“Weatherbie” or the “Sub-Adviser”), an affiliate of the Manager. The Manager oversees Weatherbie’s investment process. Weatherbie invests in small-
and mid-cap growth companies that Weatherbie believes have enduring earnings, reasonable valuations and a distinct competitive advantage. Weatherbie believes that these companies
tend to fall into categories:
•
Foundation growth stocks
Companies led by experienced management teams, with innovative business models and the potential for high sales and earnings
growth.
•
Opportunity growth stocks
Companies whose earnings may be temporarily depressed, but Weatherbie believes
change is underway that can reaccelerate earnings.
The Fund must take into account a company’s market capitalization when considering it
for investment. The market capitalization of a company is its price per share multiplied by its number of outstanding shares.
Alger Weatherbie Enduring Growth Fund
The Fund invests primarily in equity securities of mid-cap companies with an environmental,
social and governance (“ESG”) rating of average or above by a third-party ESG rating agency (an “ESG Rating Agency”) that also demonstrate, in the view of
Weatherbie, promising growth potential.
Weatherbie employs fundamental analysis to identify innovative and dynamic companies and uses
an ESG Rating Agency’s ratings (as discussed below) to consider how such stocks rank within an industry or sector based on a company’s conduct in offering products or services that promote positive environmental, social and/or governance policies, or have a positive impact in these
areas, addressing concerns such as climate change, resource depletion, health and safety, employee relations and diversity, bribery and corruption, and fostering board diversity and structure. Under normal circumstances, the weighted average of the
Fund's holdings must be rated at or better than a medium or average rating provided by the ESG Rating Agency. The Fund will not invest in securities with a rating at or worse than severe or poor, as provided by the ESG Rating Agency. If a security’s rating is downgraded to severe or poor, Weatherbie will sell out of the security within a reasonable period of time. Unrated securities will be excluded from determining the weighted average rating. If a security is not rated by the ESG Rating Agency, the security will be
given a 12-month grace period from the date it is added to the Fund in order for the security to obtain a rating from the ESG Rating Agency. The number of portfolio holdings without a rating by the ESG Rating Agency will be limited to three securities and 20% of the Fund’s assets.
For purposes of the Fund’s principal investment strategies, “mid-cap companies” are those
companies that, at the time of purchase of the securities, generally have total market capitalization within the range of $1 billion to $25 billion. Because of the Fund’s long-term approach to investing, it could have a significant portion of its assets invested in securities of issuers that have appreciated beyond the market capitalization thresholds noted.
Equity securities include common or preferred stocks that are listed on U.S. or foreign exchanges.
The Fund intends to invest a substantial portion of its assets in a smaller number of issuers.
Generally, the Fund will own no more than 30 holdings. As a result, the Fund is a non-diversified investment company, which means the performance results of any one position may have a greater impact on the Fund’s performance. Fund holdings may differ from this number for any reason. Such reasons may be, among others, because of extreme market volatility, such as when the Fund has entered a temporary defensive
position. Additionally, the Fund may temporarily exceed the stated number of holdings when it acquires a new holding and determines that it is in the best interests of shareholders to sell an existing holding over a period of time, instead of immediately selling the entire holding.
The Fund may invest a significant portion of its assets in securities of companies conducting
business within a single sector.
The Fund may sell a stock when it reaches a
target price, it fails to perform as expected, or other opportunities appear more attractive. As a result, the Fund may engage in active trading of portfolio
securities.
The Fund invests in cash (and cash equivalents) when the Fund is
unable to find enough attractive long-term investments to meet its investment objective, in times of adverse or unstable market, economic or political conditions, to meet
redemptions and/or when the Manager believes it is advisable to do so. Except during temporary defensive periods, such investments will not exceed 15% of the Fund’s assets.
Other Strategies of the Fund
In addition to the principal strategies discussed above, the Fund may also invest or engage in the following investments/strategies:
•
Short
Sales: The Fund may make short sales of securities either as a hedge against potential declines in the value of a portfolio security or to realize appreciation when a security that the Fund does not own declines in value. The Fund may also make short
sales “against the box” without being subject to such limitations. In this type of short sale, at the time of the sale, the Fund owns or has the immediate and unconditional right to acquire the identical security at no additional cost. Any short sales of securities will not count towards the Fund’s 30-holdings portfolio.
•
Foreign Securities: The Fund may invest in equity securities of companies located outside the United
States.
•
Private Investments: The Fund may invest in private placements and make private investments in public
equities (“PIPEs”). The Fund may invest up to 10% of its assets in such strategies.
Investment Risks
This section contains a discussion of the general risks of investing in the Fund. The
“Investment Strategies and Policies” section in the SAI also includes more information about the Fund and its investments and the related risks. An investment in the
Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or by any bank or governmental agency. As with any fund, an investment in the Fund involves risks.
Principal Risks of Investing in the Fund:
Investment Risk
An investment in the Fund is subject to investment risk, including the possible loss of the
entire principal amount that you invest.
Market Risk
Your investment in Fund shares represents an indirect investment in the securities owned by
the Fund. 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, if applicable. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments.
An outbreak of respiratory disease caused by a novel coronavirus designated as COVID-19 was
first detected in China in December 2019 and subsequently spread internationally. The transmission of COVID-19 and efforts to contain its spread have resulted in, among other things, border closings and other significant travel restrictions and disruptions; significant disruptions to business operations, supply chains and customer activity; lower consumer demand for goods and services; significant job losses and
increasing unemployment; event
cancellations and restrictions; service cancellations, reductions and other changes; significant challenges in healthcare service preparation and delivery; prolonged quarantines; as
well as general concern and uncertainty that has negatively affected the economic environment. The impact of this outbreak and any other epidemic or pandemic that may arise in the future could adversely affect the economies of many nations or the entire global economy and the financial
performance of individual issuers, sectors, industries, asset classes, and markets in significant and unforeseen ways. Although the Federal Reserve has taken a number of actions to mitigate the impact of COVID-19 on U.S. markets and institutions, including
decreasing interest rates and implementing a variety of emergency stimulus measures, these actions may not succeed or have the intended effect. This crisis or other public health crises may also exacerbate other pre-existing political, social, economic, market and financial risks. The effects of this outbreak or any future outbreak in developing or emerging market countries may be greater due to less established health care systems. The duration of the COVID-19 outbreak and its effects cannot be determined with
certainty. The foregoing could result in significant market volatility, exchange trading suspensions and closures, declines in financial markets, higher default rates and a substantial economic downturn or recession. Such impacts could impair the Fund's
ability to maintain operational standards (such as with respect to satisfying redemption requests), disrupt the operations of the Fund's service providers, adversely affect the value and liquidity of the Fund's investments and negatively impact the Fund's
performance and your investment in the Fund.
Equity Securities Risk
As with any fund that invests in stocks, your investment will fluctuate in value, and the loss of your investment is a risk of investing. The Fund’s price per share will fluctuate due to changes in the market prices of its investments. Because stock markets tend to move in cycles, stock prices overall may decline. A particular stock’s market value may decline as a result of general market conditions that are not related to the issuing company (e.g., adverse economic conditions or investor sentiment) or due to factors that affect the particular company (e.g., management performance or factors affecting the industry). Also, the Fund’s investments may not grow as fast as the rate of inflation and stocks tend to be more volatile than some other investments you could make,
such as bonds.
Environmental, Social and/or Governance Sustainability-Related Securities Risk
The
Sub-Adviser incorporates ESG criteria into its investment process for the Fund, which may be viewed as providing opportunities for long-term rather than short-term returns, and may
result in the selection or exclusion of securities of certain issuers for reasons other than financial performance. As a result, the Fund may forego opportunities to buy certain
securities when it might be otherwise advantageous to do so, or sell certain securities when it might be otherwise disadvantageous to do so. ESG investing also carries the risk that the Fund’s investment returns may underperform funds that do not utilize an ESG investment strategy. The application of this strategy may affect the Fund’s investment exposure to certain companies, sectors, regions, countries or types of investments, which could negatively impact the Fund’s performance depending on whether such investments are in or out of favor. Applying ESG criteria to investment decisions is qualitative and subjective by nature, and there is no
guarantee that the criteria utilized by the Sub-Adviser or any judgment exercised by the Sub-Adviser will reflect the beliefs or values of any particular investor. In evaluating a company, the Sub-Adviser is dependent upon information and data obtained
through voluntary or third-party reporting that may be incomplete, inaccurate or unavailable, which could cause the Sub-Adviser to incorrectly assess a company’s ESG practices. ESG standards differ by region and industry, and a company’s ESG practices or the Sub-Adviser’s assessment of a company’s ESG practices may change over time.
Small Number of Holdings Risk
The
Fund’s performance may be more vulnerable to changes in the market value of a single issuer and more susceptible to risks associated with a single economic, political, or
regulatory occurrence than a fund that has a higher number of holdings. At times, the performance of shares of particular companies will lag the performance of other sectors or the
market as a whole. This risk is magnified when a fund has a small number of holdings. Generally, the more broadly a fund invests, the more it spreads its risks and potentially reduces the risk of loss and volatility.
Mid Cap Securities Risk
There may be greater risk in investing in medium-capitalization companies rather than larger,
more established companies due to such factors as inexperienced management and limited product lines or financial resources. It may also be difficult or impossible to liquidate a security position at a time and price acceptable to the Fund because of the potentially less frequent trading of stocks of smaller market capitalization.
Growth Stocks Risk
Prices of growth stocks tend to be higher in relation to their companies’ earnings and
may be more sensitive to market, political and economic developments than other stocks, making their prices more volatile. An investment in the Fund may be better suited to investors who seek long-term capital growth and can tolerate fluctuations in their investment’s value. Expected growth may not be realized.
Sector Risk
The Fund may have a significant portion of its assets invested in securities of companies conducting business within a single sector. Companies in the same sector may be similarly affected by economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that sector than a fund that has a more diversified
portfolio. Generally, the more broadly the Fund invests, the more it spreads risk and potentially reduces the risks of loss and volatility.
Non-Diversification Risk
The Fund is a non-diversified investment company. As such, the Fund can invest in fewer
individual companies than a diversified investment company. As a result, the Fund’s performance may be more vulnerable to changes in the market value of a single issuer
and more susceptible to risks associated with a single economic, political, or regulatory occurrence than a fund that has a diversified portfolio. This risk is magnified compared to a fund that invests more broadly.
Portfolio Turnover (Active Trading) Risk
If the Fund engages in active trading of portfolio securities, it may incur increased
transaction costs and brokerage commissions, both of which can lower the actual return on an investment. Active trading may also increase short-term gains and losses, which may affect the taxes a shareholder has to pay.
Other Risks of Investing in the Fund:
The Fund may also be subject to certain other non-principal risks associated with its investments and investment strategies, including:
Temporary Defensive Investments
In times of adverse or unstable market, economic or political conditions, the Fund may invest up to 100% of its assets in cash, high-grade bonds, or cash equivalents (such as commercial paper or money market instruments) for temporary defensive reasons.
This is to attempt to protect the Fund’s assets from a temporary, unacceptable risk of loss, rather than directly to promote the Fund’s investment objective. The Fund
may also hold these types of securities in an amount up to 15% of net assets, pending the investment of proceeds from the sale of Fund shares or portfolio securities or to meet
anticipated redemptions of Fund shares. The Fund may not achieve its investment objective while in a temporary defensive position.
Short Sales Risk
The
market price of a security may increase after the Fund borrows the security in order to sell it short, so that the Fund suffers a loss when it replaces the borrowed security at the
higher price. The use of short sales could increase the Fund’s exposure to the market, magnifying losses and increasing volatility.
Foreign Securities Risk
Investing in foreign securities involves risks related to the political, social and economic
conditions of foreign countries, particularly emerging market countries. These risks may include political instability, exchange control regulations, expropriation, lack of comprehensive information, national policies restricting foreign investment, currency fluctuations, lack of liquidity,
potential for market manipulation, less developed or less efficient trading markets, limited access to reliable capital, lack of comprehensive company information, political instability, differing auditing, regulatory and legal standards and lack of accounting and financial reporting standards, inflation and rapid fluctuations in inflation, withholding or other taxes, and operational risks. There may be less stringent government supervision and oversight of foreign markets than in the United States. There may be less
corporate financial information publicly available, less stringent investor protection and disclosure standards, and differing auditing and legal standards.
Investment in foreign currencies is subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedged positions, that the U.S. dollar will decline relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time. A decline in the value of foreign currencies relative to the U.S. dollar will
reduce the value of securities held
by the Fund and denominated in those currencies. Foreign currencies also are subject to risks caused by inflation, interest rates, budget deficits and low savings rates, political
factors and government controls.
Privately
Placed Securities Risk
Private equity investments, which include PIPE and other
private equity transactions, and which are distinct from investments in private equity funds, involve an extraordinarily high degree of business and financial risk and can result in
substantial or complete losses. Some companies in which the Fund may invest may be operating at a loss or with substantial variations in operating results from period to period and may need substantial additional capital to support expansion or to achieve or maintain competitive
positions. Such companies may face intense competition, including competition from companies with much greater financial resources, much more extensive development, production, marketing and service capabilities and a much larger number of
qualified managerial and technical personnel. The Fund can offer no assurance that the marketing efforts of any particular company will be successful or that its business will succeed.
With respect to PIPE transactions, PIPE investors purchase securities directly from a publicly traded company in a private placement transaction, typically at a discount to the market price of the company’s common stock. Because the sale of the
securities is not registered under the Securities Act of 1933, the securities are “restricted” and cannot be immediately resold by the investors into the public markets. Accordingly, the company typically agrees as part of the PIPE deal to register the restricted securities with the Securities and Exchange Commission. PIPE securities may be deemed illiquid.
Management and Organization
Manager
Fred Alger Management, LLC
360 Park Avenue South
New York, NY 10010
The Manager has been an investment adviser since 1964, and manages investments totaling (at
October 31, 2021) approximately $[__] billion. The Manager is responsible for providing a continuous investment program for the Fund, making decisions with respect to all purchases and sales of assets, and placing orders for the investment and reinvestment of Fund assets. The Manager
also arranges for transfer agency, custody and all other services necessary for the Fund to operate. These advisory responsibilities are subject to the supervision of the Board. A discussion of the Trustees’ basis for approving the advisory contract with respect to the Fund will be available in the Fund’s first available annual or semi-annual report to shareholders for its most recent October 31 fiscal year end or April 30 semi-annual fiscal year end. The Fund pays the Manager a fee at the annual rate of .70% for assets up to $250 million and .50% for assets in excess of $250 million.
The Manager has made contractual commitments to the Fund to waive its fee and/or reimburse the Fund for expenses to the extent necessary to maintain the Fund’s total annual operating expenses at or below certain levels. Such waiver/reimbursement arrangements are as follows: Class I shares – 1.10%; Class Y shares – 0.70%; Class Z shares – 0.75%. The limitations do not apply to acquired fund fees and expenses, dividend expense on short sales, borrowing costs, interest, taxes, brokerage and extraordinary expenses. Each agreement runs through February 29, 2024 and may only be amended or terminated prior to its expiration date by
agreement between the Manager and the Board, and will terminate automatically in the event of termination of the Investment Advisory Agreement. The Manager may, during the term of the contract, recoup any fees waived or expenses reimbursed pursuant
to the contract to the extent that such recoupment would not cause the expense ratio to exceed the stated limitation in effect at the time of (i) the waiver or reimbursement and (ii) the recoupment by the Manager, after repayment of the recoupment is taken
into account.
Sub-Adviser
Weatherbie Capital, LLC
265 Franklin Street, Suite 1603
Boston, Massachusetts 02110
The Manager has engaged Weatherbie, an affiliate of the Manager, to serve as the Fund’s
sub-adviser under a sub-investment advisory agreement between the Manager and the Sub-Adviser. Weatherbie is a registered investment adviser formed in 1995. As of October 31, 2021, Weatherbie had approximately $[__] billion in assets under management. Weatherbie sub-advises the Fund
subject to the Manager’s supervision and approval. The Manager pays a sub-advisory fee to the Sub-Adviser out of its own resources at no additional charge to the Fund.
Portfolio Managers Jointly and Primarily Responsible for Day-to-Day Management of Portfolio Investments
|
|
|
Alger Weatherbie Enduring Growth Fund |
H, George Dai, Ph.D. Joshua D. Bennett, CFA |
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Mr. Bennett is the Chief Operating Officer of Weatherbie and a Senior Portfolio Manager. He joined Weatherbie in 2007.
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Dr. Dai is the Chief Investment Officer of Weatherbie and a Senior Portfolio Manager. He joined
Weatherbie in 2001.
The SAI
provides additional information about the portfolio managers’ compensation, other accounts that they manage, and their ownership of securities of the Fund(s) that they
manage.
Administrator
Pursuant to a separate Fund Administration Agreement, the Manager also provides administrative
services to the Fund, including, but not limited to: providing office space, telephone, office equipment and supplies; paying compensation of the Fund’s officers for services rendered as such; authorizing expenditures and approving bills for payment on behalf of the Fund; preparation of the
periodic updating of the Fund’s Registration Statement, including Prospectus and Statement of Additional Information, for the purpose of filings with the Securities and Exchange Commission and monitoring and maintaining the effectiveness of such filings,
as appropriate; supervising preparation of periodic shareholder reports, notices and other shareholder communications; supervising the daily pricing of the Fund’s investment portfolios and the publication of the net asset value of the Fund’s shares, earnings reports and other financial data; monitoring relationships with organizations providing services to the Fund, including the
Fund’s custodian, transfer
agent, blue sky agent and printers; providing trading desk facilities for the Fund; supervising compliance by the Fund with recordkeeping and periodic reporting requirements under
the Investment Company Act of 1940, as amended (the “1940 Act”); preparation of materials for meetings of the Fund’s Board of Trustees and preparation of
minutes of such meetings; oversight of service providers who file claims for class action lawsuits with respect to securities in the Fund; arranging for the Fund the required fidelity bond and other insurance, if applicable; and providing executive, clerical and secretarial help needed to carry out these responsibilities. The Fund pays the Manager an administrative fee at the annual rate of 0.0275% of the Fund’s average daily net assets.
Pursuant
to a separate Shareholder Administrative Services Agreement, the Manager also supervises the Fund's transfer agent, UMB Fund Services, Inc. (the “Transfer Agent”), and
provides certain shareholder administrative services to the Fund. The Fund pays the Manager a shareholder administrative services fee at the annual rate of 0.0165% of net assets
with respect to Class A and C Shares.
For more information, please see the Shareholder Information section beginning on page 20.
Shareholder Information
Distributor
Fred Alger & Company, LLC
360 Park Avenue South
New York, NY 10010
Although Fred Alger & Company, LLC (the “Distributor”) is the broker-of-record
on certain direct shareholder accounts, the Distributor does not interact directly with such shareholders and therefore, does not believe it makes recommendations to such shareholders regarding the holdings in their accounts.
Transfer Agent
Alger Family of Funds
c/o UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, WI 53201-2175
Net Asset Value
The value of one share is its “net asset value,” or NAV. The NAV for the Fund is
calculated as of the close of business (normally 4:00 p.m. Eastern time) every day the New York Stock Exchange (“NYSE”) is open. Generally, the NYSE is closed on
weekends and national holidays.
NAV (net asset value) of a class of shares is computed by adding together the value allocable to the class of the Fund’s investments plus cash and other assets, subtracting applicable liabilities and then dividing the result by the number of outstanding shares of the class.
Foreign securities are usually valued on the basis of the most recent closing price of the
foreign markets on which such securities principally trade. Because the Fund invests in foreign securities principally listed on foreign exchanges that may trade on days the NYSE is closed, the value of the Fund’s assets may be affected on days when shareholders will not be able to purchase or redeem Fund shares.
The assets of
the Fund are generally valued on the basis of market quotations. If market quotations are not readily available or do not accurately reflect fair value for a security, or if a
security’s value has been materially affected by events occurring after the close of the market on which the security is principally traded, the security may be valued on the
basis of fair value as determined by the Manager under procedures adopted by the Board. A security’s valuation may differ depending on the method used for determining value. Short-term money market instruments held by the Fund are generally valued on the basis of amortized cost.
In determining whether market quotations are reliable and readily available, the Manager
monitors information it routinely receives for significant events it believes will affect market prices of portfolio instruments held by the Fund. Significant events may affect a particular company (for example, a trading halt in the company’s securities on an exchange during the day) or may affect securities markets (for example, a natural disaster that causes a market to close). If the Manager is aware of a significant event that has occurred after the close of the market where a portfolio instrument is primarily traded, but before the close of the NYSE, that the Manager believes has affected or is likely to affect the price of the instrument, the Manager will use its best judgment to determine a fair value for that portfolio instrument under procedures adopted by the Board.
The Manager believes that under certain circumstances foreign securities values may be affected by volatility that occurs in U.S. markets on a trading day after the close of foreign securities markets. The Manager’s fair valuation procedures therefore include a procedure whereby foreign securities prices may be “fair valued” to take those factors into account.
Dividends and Distributions and Tax Consequences
The Fund declares and pays dividends and distributions annually, and expect these payments to
shareholders will consist primarily of capital gains, which may be taxable to you at different rates depending upon how long the Fund held the securities that it sold to create the gains (rather than the length of time you have held shares of the Fund), and that they will also include net investment income, which is taxable as ordinary income. Certain dividend income received by the Fund and paid to you may be subject to a
maximum tax rate of 20% (qualified dividends); other income paid to you, such as non-qualifying dividend income or interest earned on debt securities held by the Fund, will continue to be taxed at the higher ordinary income rates. Shareholders who hold
Fund shares in tax-deferred accounts ordinarily will not be subject to taxation on dividends from net investment income and net realized capital gains until they receive a distribution of the dividends from their individual plan accounts. Dividends and
distributions may differ among
classes of shares of a Fund. Unless your investment is in a tax-deferred account, you may want to avoid buying shares shortly before the Fund pays a dividend. If you buy shares when
the Fund has declared, but not yet distributed ordinary income or capital gains, you will pay full price for the shares and then receive a portion of the price back in the form of a
taxable dividend. In addition, it may be the case that a significant amount of the securities held by the Fund are held at values above their purchase price. In such cases, the sale of such securities in the Fund, which may be from a portfolio management
decision or to meet Fund shareholder redemptions, will generate either long-term or short-term capital gains, which will be distributed and taxable to you as described above if your investment is not in a tax-deferred account. Therefore, a substantial tax liability may arise for a shareholder who invests in the Fund when such conditions exist. The amount of long-term and short-term
capital gains are disclosed in the Fund’s most recent annual or semi-annual report. Before investing you may want to consult your tax advisor.
Unless you
choose to receive cash payments by checking the box on your account application, any dividends and distributions will be reinvested automatically at the NAV on their payment dates.
No sales charge will apply to automatically reinvested dividends and distributions. If you have chosen cash payments and a payment is returned to the Fund as undeliverable, that
payment will be reinvested upon receipt by the Transfer Agent in Fund shares at the next NAV. All subsequent payments will be reinvested until you reinstate your cash election and provide a valid mailing address.
Regardless of whether you choose to take distributions in cash or reinvest them in the Fund, they may be subject to federal and state taxes. An exchange of Fund shares for shares of another fund will be treated as a sale of the Fund shares, and any gain on the transaction may be subject to federal and state taxes. Because everyone’s tax situation is unique, see a tax advisor about federal, state and local tax consequences of investing in the Fund.
Classes of Fund Shares
Alger Weatherbie Enduring Growth Fund offers five classes of shares (A, C, I, Y, and Z Shares). Class I, Y and Z Shares are offered by this Prospectus. Class A and C Shares are offered in a separate prospectus.
The table below summarizes key features of each of the share classes of the Fund. The sections below the table cover additional details of each share class, including distribution and/or servicing fees, if any, and waivers of investment
minimums.
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Generally available only to institutional investors, including, but not limited to, qualified pension and retirement plans.
Also available on brokerage
platforms of firms that have
agreements with the Distributor to
offer such shares solely when
acting as an agent for the
investor. |
Generally available only to institutional investors. Available for purchase through financial intermediaries. |
Generally available only to institutional investors. Available for purchase through financial intermediaries or directly from the Fund via: - Mail: Alger Family of Funds,
c/o UMB Fund Services, Inc.,
P.O. Box 2175, Milwaukee, WI
53201-2175
- Online: www.alger.com
- Telephone: 1 (800) 992-3863 |
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No. Entire purchase price is invested in shares of the Fund. |
No. Entire purchase price is invested in shares of the Fund. |
No. Entire purchase price is invested in shares of the Fund. |
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Distribution and/or Service (12b-1) Fees? |
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Shareholder Servicing Fee? |
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Conversion to Class A Shares? |
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Investors with non-U.S. addresses and intermediary controlled accounts designated as foreign accounts (“Restricted Accounts”) are restricted from investing in the Fund. Existing Restricted Accounts may remain in the Fund, but are prohibited from making
further investments. U.S. Armed Forces and Diplomatic post office addresses abroad are treated as U.S. addresses and can invest in the Fund. Addresses in U.S. territories, such as Guam and Puerto Rico, are also treated as U.S. addresses and can invest in the Fund.
Purchasing and Redeeming Fund Shares
The Distributor, in its sole discretion, may waive minimum initial investment
requirements. Minimum initial investment and related requirements may be modified at any time, without prior notice.
The Distributor may pay all or a portion of the distribution (12b-1) and/or shareholder
servicing fees paid by the Fund to a broker-dealer, investment adviser or other financial institution (“Financial Intermediary”) that has entered into an agreement with
the Fund. The Distributor may retain for itself a portion of the distribution and/or shareholder servicing (12b-1) fees to the extent that it provides such services to shareholder accounts. Additionally, an investor purchasing shares on a brokerage platform of firms
that have agreements with the Distributor to offer such shares solely when acting as an agent for the investor may be required to pay a commission and/or other forms of compensation to the broker.
Class I Shares
Class I Shares are generally available to institutional investors, such as corporations, foundations, and trusts managing various types of employee benefit plans, as well as charitable, religious and educational institutions. Class I shares are not subject to a minimum initial investment. Typical institutional investors include banks, insurance companies, broker-dealers, investment
advisers, investment companies, qualified pension and profit-sharing plans, non-qualified deferred compensation plans, trusts funding charitable, religious and educational institutions and investors who invest through such institutions (or through an
organization that processes investor orders on behalf of such institutions) and do so by paying a management, consulting or other fee to such institutions for the right to invest.
Class I Shares are subject to distribution and/or shareholder servicing (12b-1) fees.
Class Y Shares
Class Y Shares are generally available for purchase by institutional investors such as qualified and non-qualified retirement, deferred compensation, and benefit plans, bank and trust companies, insurance companies, corporations, charitable
organizations, endowments and foundations, government entities, and fund-of-funds. Class Y Shares are generally subject to a minimum initial investment and a minimum account size requirement of $500,000. Class Y Shares have no distribution and/or
shareholder servicing (12b-1) fees. No remuneration is paid by Class Y Shares to financial intermediaries.
The Distributor may waive the minimum initial investment for Class Y Shares of the Funds for
group employer-sponsored 401(k) plans, 457 plans, employer sponsored 403(b) plans, profit-sharing and money purchase pension plans, defined benefit plans, retiree health benefit plans and non-qualified deferred compensation plans. The waiver is available only in the following instances:
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Retirement plans that hold omnibus or aggregate plan participant positions, for each Fund made available for the plan;
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Investors in retirement and deferred compensation plans investing through certain financial
intermediaries and third-party recordkeepers and/or administrators who have agreements with the Distributor; and
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Certain financial intermediaries who have entered into an agreement with the Distributor to
offer shares through a wrap and/or asset allocation program.
Class Z Shares
The Fund’s Class Z Shares, which are generally subject to a minimum initial investment
of $500,000, provide an investment vehicle for qualified or non-qualified retirement or employment benefit plans; banks, bank trust departments and trust companies; Section 529 college savings plans; asset-based fee programs; fee-paying clients of a registered investment advisor; corporations; insurance companies; registered investment companies; foundations and endowments; charitable, religious and educational
institutions; and individual investors.
The Distributor may waive the minimum initial investment of $500,000 for Class Z Shares of the Fund for group employer sponsored 401(k) plans, 457 plans, employer sponsored 403(b) plans, profit-sharing and money purchase pension plans, defined
benefit plans, retiree health benefit plans, non-qualified deferred compensation plans and asset-based fee programs and fee-paying clients of a registered investment adviser that hold omnibus positions. The waiver is generally not available to
non-retirement accounts, traditional and Roth Individual Retirement Accounts, Coverdell Education Savings Accounts, SEPs, SARSEPs, SIMPLE IRAs, individual 401(k) plans or individual 403(b) plans. The Distributor may also waive the minimum initial investment for Class Z Shares of the Fund for direct shareholders investing through an intermediary with aggregate assets of $125 million or more invested in the Alger Family of Funds.
In addition, there is no minimum initial investment for the following categories of eligible investors:
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Any current employee of Fred Alger Management, LLC or Fred Alger & Company, LLC, or their affiliates, and any of their
immediate family members who share the same address.
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Trustees of the Fund and Directors of Alger Associates, Inc., or its affiliates, and any of their immediate family members who
share the same address.
Class Z Shares have no distribution and/or shareholder servicing (12b-1) fees.
Additional Information
Shares of the Fund can be purchased or redeemed on any day the NYSE is open. Orders will be
processed at the NAV next calculated after the purchase or redemption request is received in good order by the Transfer Agent or other agent appointed by the Distributor. Ordinarily, the Fund will issue a redemption check within seven days after the Transfer Agent receives a redemption request in good order. “In good order” means that all necessary information and documentation related to the redemption request have been provided to the Fund’s transfer agent or authorized intermediary, if applicable. If your request is not in good order, the Fund’s transfer agent may require additional documentation in order to redeem your shares. Payment may be postponed in cases where the SEC declares an emergency or normal trading is halted. The Transfer Agent or the Fund may reject any purchase order.
Share certificates are not issued for shares of the Fund.
Under normal circumstances, the Fund expects to meet redemption requests by using cash or cash equivalents in its portfolio and/or by selling portfolio assets to generate cash. The Fund also may pay redemption proceeds using cash obtained through
borrowing arrangements that may be available from time to time.
The Fund may pay all or a portion of your redemption proceeds in securities rather than cash
(i.e., “redeem in kind”) if, for example, the redemption request is during stressed market conditions or the Fund believes that a cash redemption may have a
substantial impact on the Fund and its remaining shareholders. Securities will generally be selected on a pro rata basis pursuant to the Fund’s procedures. A shareholder who receives a redemption in kind bears the market risk of the securities until they are converted into cash, in transactions conducted at the shareholder’s expense.
Legislation passed by Congress in 2008 requires mutual funds to report both to the shareholder and to the Internal Revenue Service the “cost basis” of shares acquired on or after January 1, 2012 that are subsequently redeemed or exchanged. This reporting is not required for Fund shares held in retirement or other tax-advantaged accounts or for certain other types of entities (such as C corporations).
If you are a direct shareholder, you may request your cost basis reported on Form 1099-B to be
calculated using any one of the alternative methods offered by the Fund. Please contact the Fund to make, revoke, or change your election. If you do not affirmatively elect a cost basis method then the Fund will use the average cost basis method. If you hold Fund shares through a
broker, please contact that broker with respect to the reporting of cost basis and available elections for your account.
Please note that you will continue to be responsible for calculating and reporting gains and
losses on redemptions of shares purchased prior to January 1, 2012. You are encouraged to consult your tax advisor regarding the application of the cost basis reporting rules and, in particular, which cost basis calculation method is best for you.
Exchanges
You can exchange shares of the Fund for shares of another Fund in the Alger Family of Funds, subject to certain restrictions. Shares of the Funds in the Alger Family of Funds can be exchanged or redeemed via telephone under certain circumstances. The Fund and
Transfer Agent have reasonable procedures in place to determine that telephone instructions are genuine. They include requesting personal identification and recording calls. If the Fund and Transfer Agent follow these procedures, they are not liable for acting in good faith on telephone instructions. For more information on telephone exchanges and redemptions, contact the Transfer Agent.
Other Purchase and Exchange Limitations
If you are a participant in a retirement plan, such as a 401(k) plan, and you purchase shares
in the Fund through an administrator or trustee that maintains a master or “omnibus” account with one or more Funds for trading on behalf of retirement plans and their participants, the Administrator may apply purchase and exchange limitations which are different than the limitations
discussed herein. These limitations may be more or less restrictive than the limitations imposed by the Fund. Consult with your Administrator to determine what purchase and exchange limitations may be applicable to your transactions in the Fund through
your retirement plan.
Limitations on Excessive Trading
The Fund invests predominantly in U.S.-traded, highly liquid securities for which current New York Stock Exchange closing prices are readily available on a daily basis. The Fund will determine a fair value for portfolio securities for which current market closing prices are not readily available or otherwise require fair valuation in the circumstances discussed under “Net Asset Value.” As a result, the Manager believes that there is little incentive for investors to engage in frequent and/or short-term trading (often
referred to as market-timing) to benefit from “stale” pricing. Nonetheless, the presence of small capitalization and medium
capitalization securities and/or
foreign securities in the Fund and other circumstances may invite frequent and/or short-term trading by Fund shareholders, for whatever reason implemented. Active trading may be
attempted and may, if carried out on a large scale, impose burdens on the Fund’s portfolio managers, interfere with the efficient management of the Fund, increase the Fund’s transaction costs, administrative costs or tax liability or otherwise be detrimental to the interests of the Fund and its other shareholders. The Fund therefore discourage market timing, and to the extent possible monitor for market timing patterns.
The Board has adopted policies and procedures to discourage frequent and/or short-term trading
of Fund shares and will generally not accommodate such practices. These policies and procedures allow the Fund to reject purchase or exchange orders, on a temporary or permanent basis, or redeem all Fund shares from investors that the Manager believes, in its reasonable
business judgment, are engaging in frequent and/or short-term trading in Fund shares or shares of other funds sponsored by the Manager that is detrimental to the Fund involved. If the Fund rejects your purchase or exchange order, you will not be able to
execute that transaction, and neither the Fund nor the Manager will be responsible for any losses you may suffer as a result.
In order to detect significant market timing, the Manager, in accordance with policies and
procedures approved by the Board, will, among other things, seek to monitor overall subscription, redemption and exchange activity, and isolate significant daily activity to determine if there appears to be market timing activity in an individual portfolio.
Under these policies and procedures, the Fund generally prohibits more than two purchases and
sales or exchanges of its shares within a 90-day calendar period. The following transactions are excluded when determining whether trading activity is excessive: (i) transactions associated with systematic investment and withdrawal plans; (ii) transactions through firm-sponsored,
discretionary asset allocation or wrap programs; and (iii) transactions subject to the trading policy of an intermediary that the Fund deems materially similar to the Fund’s policy.
If, based on the Fund’s policies and procedures, the Manager determines that a
shareholder is engaged in, or has engaged in, market timing or excessive trading, the Manager, on behalf of the Fund, may place a temporary or permanent block on all further purchases or exchanges of Fund shares. Multiple accounts under common ownership or control may be considered one account
for the purpose of determining a pattern of excessive trading, short-term market timing or other abusive trading practices. The Fund will also utilize fair value pricing in an effort to reduce arbitrage opportunities available to short-term traders.
Due to the complexity involved in identifying excessive trading and market timing activity,
there can be no guarantee that the Fund will be able to identify and restrict such activity in all cases. Additionally, it is more difficult for the Fund to monitor the
trading activity of beneficial owners of Fund shares who hold those shares through third-party 401(k) and other group retirement plans and other omnibus arrangements maintained by broker/dealers and other intermediaries. Omnibus account arrangements permit
multiple investors to aggregate their respective share ownership positions and purchase, redeem and exchange Fund shares in a single account.
In certain circumstances the Fund may accept frequent trading restrictions of intermediaries that differ from the Fund’s policies and procedures. Since such intermediaries execute or administer transactions with many fund families, it may be impractical for
them to enforce a particular fund’s frequent trading or exchange policy. These alternate trading restrictions would be authorized only if the Fund believes that the alternate restrictions would provide reasonable protection to the Fund and its shareholders. The Fund reserves the right to prohibit any purchase, sale or exchange of its shares that the Fund believes may be disruptive to the
Fund or its long-term investors.
Disclosure of Portfolio Holdings
For a discussion of the Fund’s policies and procedures regarding the selective disclosure of its portfolio holdings, please see the SAI. The Fund makes publicly available its month-end top 10 holdings with a 10 day lag and its month-end full portfolio with a 60 day lag on its website www.alger.com.
Other Information
In Kind Redemptions. The Fund may redeem some of your shares “in kind,” which
means that some of the proceeds will be paid with securities the Fund owns instead of cash. The Fund has elected to be governed by rule 18f-1 under the 1940 Act, pursuant to which the Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period for any one shareholder. If you receive securities, you should expect to incur brokerage or other charges in
converting the securities to cash. If the Fund pays large redemptions in cash, these transactions may increase the Fund’s transaction costs and detract from the Fund’s performance. Large purchases pose similar risks.
Shares may be worth more or less when you redeem them than they were at the time you bought them. For tax purposes, this means that when you redeem them you may realize a short- or long-term capital gain or loss, depending upon how long you have
held the shares.
The Fund may pay the Distributor, Fred Alger & Company, LLC, or other entities, a fee of up to 0.25% of the value of the Fund’s average daily net assets for ongoing service and/or maintenance of shareholder accounts with respect to Class I Shares. This fee
is included in the Fund’s
shareholder servicing fee. The Distributor may pay some or all of this fee to a broker-dealer, investment adviser or other financial institution (“Financial
Intermediary”) that also provides servicing and/or maintenance of shareholder accounts.
Other Payments by the Fund. In addition to fees that the Fund may pay to a Financial Intermediary for distribution (12b-1) and shareholder servicing, and
fees the Fund pays to their transfer agent, UMB Fund Services, Inc., the Distributor, on behalf of the Fund, may enter into agreements with Financial Intermediaries pursuant to
which the Fund will pay a Financial Intermediary for networking, sub-transfer agency and/or sub-accounting services. These payments are generally based on either (1) a percentage
of the average daily net assets of Fund shareholders serviced by a Financial Intermediary or (2) a fixed dollar amount for each account serviced by a Financial Intermediary. The aggregate amount of these payments may be substantial.
Additional Compensation. From time to time the Distributor, at its expense from its own resources, may compensate Financial Intermediaries who are
instrumental in effecting investments by their clients or customers in the Fund, in an amount up to 1% of the value of those investments. The Distributor may also from time to time,
at its expense from its own resources, make payments to Financial Intermediaries that provide shareholder servicing, or transaction processing, with such payments structured as a
percentage of gross sales, a percentage of net assets, and/or as a fixed dollar amount (the latter as a per account fee or as reimbursement for transactions processing and transmission charges). The Distributor determines whether to make any additional
cash payments and the amount of any such payments in response to requests from Financial Intermediaries, based on factors the Distributor deems relevant. Factors considered by the
Distributor generally include the Financial Intermediary’s reputation, ability to attract and retain assets for the Fund, expertise in distributing a particular class of
shares of the Fund, entry into target markets, and/or quality of service. In addition, the Distributor may make payments to dealer firms in the form of payments for marketing support, seminar support, training meetings, or comparable expenses in the discretion of the Distributor.
Please contact your Financial Intermediary for details about revenue sharing payments it may receive. Any payments described above will not change the price paid by investors for the purchase of shares of the Fund or the amount of proceeds received by the Fund on the sale of shares.
Redemptions by the Fund. If your account, excluding asset-based fee program accounts and
accounts held with certain intermediaries, falls below the minimum initial investment amount of the share class in which you are invested, the Fund may redeem all the Fund shares within your account after giving you 60 days’ prior written notice. You may avoid having your account redeemed during the notice period by bringing the account value up to the minimum initial investment amount.
The Fund and its agents reserve the right at any time to reject or cancel all or any part of
any purchase or exchange order and to redeem all Fund shares if it suspects the shareholder is engaged in, or has engaged in, abusive trading practices and/or violations of any applicable securities laws. When an exchange request in respect of Fund shares is rejected, such shares may be redeemed
from the Fund on request of the shareholder. In addition, the Fund reserves the right to modify any terms or conditions of purchase of shares of the Fund or suspend, change or withdraw all or any part of the offering made by this prospectus. If the Fund rejects your purchase or exchange order, you may not be able to execute that transaction, and the Fund and its agents will not be
responsible for any losses you may suffer as a result.
Lost Shareholders, Inactive Accounts and Unclaimed Property. It is important that the Fund
maintain a correct address for each shareholder. An incorrect address may cause a shareholder’s account statements and other mailings to be returned to the Fund. Based upon statutory requirements for returned mail, the Fund will attempt to locate the shareholder or rightful owner of
the account. If the Fund is unable to locate the shareholder, then it will determine whether the shareholder’s account would legally be considered abandoned. Your mutual fund account may be transferred to the state government of your state of residence if no
shareholder initiated activity occurs within your account during the “inactivity period” specified in your state’s abandoned property laws. The Fund is legally obligated to escheat (or transfer) abandoned property to the appropriate state’s unclaimed property administrator in accordance with statutory requirements. The shareholder’s last known address of record determines which state has jurisdiction. If you hold your account directly at the Transfer Agent, please proactively contact the Transfer Agent toll-free at (800) 992-3863 at least annually to ensure your account remains in active status. You may also update your contact information through your Alger access account online at www.alger.com.
If you
are a resident of the state of Texas, you may designate a representative to receive notifications that, due to inactivity, your mutual fund account assets may be
delivered to the Texas Comptroller. Please contact the Transfer Agent if you wish to complete a Texas Designation of Representative form.
Householding. To reduce expenses, only one copy of most financial reports and prospectuses may be mailed to households, even if more than
one person in a household holds shares of the Fund. Call an Alger Funds Representative at (800) 992-3863 if you need additional copies of financial reports or prospectuses, or
download them at www.alger.com. If you do not want the mailing of these documents to be combined with those for other members of your household, contact The Alger Funds in writing
at Alger Family of Funds, c/o UMB Fund Services, Inc., P.O. Box 2175, Milwaukee, WI 53212-2175.
Hypothetical
Investment and Expense Information
Hypothetical investment and expense
information, which is not required to be included in this Prospectus by the SEC, is presented in the chart below. This information is intended to reflect the annual and cumulative
effect of the Fund’s expenses, including advisory fees and other Fund costs, on the Fund’s total return based on NAV over a 10-year period. The example assumes the
following:
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You invest $10,000
in the Fund and hold it for the entire 10-year period; and
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Your investment has
a 5% return before expenses each year.
There is no assurance that the annual expense ratio will be the expense ratio for the Fund classes for any of the years shown. To the extent that the Manager and any of its affiliates alter any fee waivers and/or expense reimbursements pursuant to a voluntary or contractual arrangement, your actual expenses may be higher or lower. This is only a hypothetical presentation made to
illustrate what expenses and returns would be under the above scenarios. Your actual expenses and returns are likely to differ (higher or lower) from those shown below.
Alger Weatherbie Enduring Growth Fund
Financial Highlights
The financial highlights are not available at this time for the Fund because the Fund has not
commenced operations prior to the date of this Prospectus. Financial information, when available, will be included in the Fund’s next annual or semiannual report.
For Fund
Information:
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Alger
Family of Funds c/o UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, WI 53212-2175 |
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Text
versions of Fund documents can be downloaded from the following sources: |
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• The Fund: http://www.alger.com |
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• SEC (EDGAR data base): www.sec.gov |
Statement of Additional Information
For more detailed information about the Fund and its policies, please read the Fund’s Statement of Additional Information, which is incorporated by reference into (is legally made a part of) this Prospectus. You can get a free copy of the Statement of Additional Information by calling the Fund's toll-free number, at the Fund's website at www.alger.com or by writing to the address above. The Statement of Additional Information is on file with the SEC.
Annual and Semi-Annual Reports
Additional information about the Fund’s investments is available in the Fund’s annual and semi-annual reports to shareholders. In the Fund’s annual report you will find a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during the period covered by the report. You can receive free copies of these reports by calling the Fund's toll-free number, at the Fund's website at www.alger.com or by writing to the address above. Copies can also be obtained for a
duplicating fee by E-mail request to [email protected]. Fund documents are also available on the EDGAR database on the SEC’s Internet site at www.sec.gov. Quarterly Fund Holdings
The Fund’s most recent month end portfolio holdings are available approximately sixty days after month-end on the Fund’s website at www.alger.com. The Fund also files its complete schedule of portfolio holdings with the SEC for the first and third
quarter of each fiscal year as an exhibit to Form N-PORT and semi-annually on Form N-CSR. Forms N-PORT and N-CSR are available online on the SEC’s website at www.sec.gov. A copy of the most recent quarterly holdings may also be obtained from the Fund by calling (800) 992-3863.
Alger Electronic Delivery Service
The Fund provides you with an enhancement of your ability to access Fund documents online. When Fund documents such as prospectuses and annual and semi-annual reports are available, you will be sent an e-mail notification with a link that will take you directly to the Fund information on the Funds’ website. To sign up for this free service, enroll at www.icsdelivery.com/alger.
Distributor: Fred Alger & Company, LLC
The Alger Funds SEC File #811-1355
The information in this document is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This document is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
SUBJECT TO COMPLETION, PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 23,
2021
STATEMENT OF ADDITIONAL
INFORMATION
[__], 2021
The Alger Funds
The Alger Funds (the “Trust”) is a Massachusetts business
trust, registered with the Securities and Exchange Commission (the “SEC”) as an investment company, that offers interests in the following Fund and classes of shares:
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Alger Weatherbie Enduring Growth Fund (“Enduring Growth Fund”) |
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This Statement of Additional Information is not a prospectus. It contains additional information about the Fund and supplements information in the Trust’s Prospectuses dated [__], 2021. It should be read together with the Fund’s Prospectuses, which may be obtained free of charge by writing Alger Family of Funds, c/o UMB Fund Services, Inc., P.O. Box 2175, Milwaukee, WI 53201-2175, by calling (800)
992-3863, or by visiting http://www.alger.com.
Investment Strategies and Policies
Certain Securities and Investment Techniques
The Prospectuses discuss the investment objectives of Alger Weatherbie Enduring Growth Fund (the “Fund”), a series of The Alger Funds (the “Trust”), and the principal investment strategies to be employed to achieve those objectives. The principal risks related to the Fund’s principal investment strategies are also noted in the Prospectuses. This section of the SAI contains supplemental information concerning all
types of securities and other instruments in which the Fund may invest, the investment policies and portfolio strategies that the Fund may utilize (i.e., both principal and non-principal investment strategies) and certain risks attendant to those
investments, policies and strategies (i.e., both principal and
non-principal risks of investing in the Fund).
The Fund seeks to achieve its objective by investing in equity securities, such as common or preferred stocks, or securities convertible into or exchangeable for equity securities, including warrants and rights. The Fund will invest primarily in companies whose securities are traded on domestic exchanges or in
foreign securities, as defined below, or in the over-the-counter market. These companies may be in the developmental stage, may be older companies that appear to be entering a new stage of growth progress
owing to factors such as management changes or development of new technology, products or markets, or may be companies providing products or services with a high unit-volume growth rate. The Fund may
purchase put and call options and sell (write) covered call and put options on securities and securities indexes to increase gain and to hedge against the risk of unfavorable price movements.
In order to afford the Fund the flexibility to take advantage of new
opportunities for investments in accordance with its investment objectives and to meet redemptions, it may hold up to 15% of its net assets in money market instruments and repurchase agreements and in excess of that amount (up to 100% of
their assets) during temporary defensive periods, explained further below. This amount may be higher than that maintained by other funds with similar investment
objectives.
The investment strategies of Fred Alger
Management, LLC (“Alger Management” or the “Manager”) and Weatherbie Capital, LLC (“Weatherbie” or the
“Sub-Adviser”) utilize the proprietary research of its analyst and portfolio management team to continually assess the markets and sectors it follows for
attractive investment opportunities. With respect to stocks in the Fund’s portfolio, one principle of the portfolio strategy at Alger Management and Weatherbie is for analysts and portfolio managers to evaluate
the return potential vs. risk (downside) in each stock held in the portfolio and compare that to those, and other variables, offered by other stocks under coverage within Alger Management’s and Weatherbie’s research teams. Portfolio managers, together with investment analysts, continually seek to optimize
performance of the Fund’s portfolio by replacing individual stocks, or reducing or increasing their relative weighting in other portfolios, with stocks evaluated as having better appreciation potential,
having improved reward to risk opportunity, or offering the portfolio diversification or other characteristics determined to be beneficial to achieving the portfolio’s overall objectives. The Fund’s portfolio turnover rate may vary significantly from year to year as a result of the Fund’s investment process.
There is no guarantee that the Fund’s investment objective will be achieved.
The Fund will adjust its holdings as considered advisable in view of
prevailing or anticipated market conditions, and turnover will not be a limiting factor should Alger Management or Weatherbie deem it advisable to purchase or sell securities.
The Fund’s turnover rate is calculated by dividing the lesser of purchases or sales of securities for the fiscal year by the monthly average of the value of the Fund’s securities, with obligations with less than one year to maturity excluded.
Common and Preferred Stocks
Stocks represent shares of ownership in a company. Generally, preferred stock has a specified dividend and ranks after bonds and before common stocks in its claim on income for dividend payments and
on assets should the company be liquidated. After other claims are satisfied, common stockholders participate in company profits on a pro-rata basis; profits may be paid
out in dividends or reinvested in the company to help it grow. Increases and decreases in earnings are usually reflected in a company’s stock price, so common stocks generally have the greatest appreciation and depreciation potential of all
corporate securities. While most preferred stocks pay a dividend, the Fund may purchase preferred stock where the issuer has omitted, or is in danger of omitting, payment of its dividend. Such investments would
be made primarily for
their capital appreciation potential. The Fund may purchase trust preferred securities which are preferred stocks issued by a special purpose trust subsidiary backed by
subordinated debt of the corporate parent. These securities typically bear a market rate coupon comparable to interest rates available on debt of a similarly rated company. Holders of the trust preferred securities have limited voting rights to control the activities of the trust and no voting rights with respect to the parent company.
Temporary Defensive Investments
When market conditions are unstable, or the Manager believes it is
otherwise appropriate to reduce holdings in stocks, the Fund can invest in a variety of debt securities for defensive purposes. The Fund can also purchase these securities for liquidity purposes to meet cash needs due to the redemption of Fund
shares, or to hold while waiting to reinvest cash received from the sale of other portfolio securities. The Fund can buy:
•
high-quality, short-term money market instruments, including those issued by the
U.S. Treasury or other government agencies;
•
commercial paper (short-term, unsecured, promissory notes of domestic or foreign
companies);
•
short-term debt obligations of corporate issuers, certificates of deposit and
bankers’ acceptances of domestic and foreign banks and savings and loan associations; and
Short-term debt securities would normally be selected for defensive or cash
management purposes because they can normally be disposed of quickly and are not generally subject to significant fluctuations in principal value, and their value will be less subject to interest rate fluctuation than longer-term debt securities.
Small Capitalization Investments
Certain companies in which the Fund will invest may still be in the developmental stage. Investing in smaller issuers generally involves greater risk than investing in larger, more established issuers. Such
companies may have limited product lines, markets or financial resources and may lack management depth. Their securities may have limited marketability and may be subject to more abrupt or erratic
market movements than securities of larger, more established companies or the market averages in general.
Convertible Securities
The Fund may invest in convertible securities, which are debt instruments or preferred stocks that make fixed dividend or interest payments and are convertible into common stock. Generally, the market prices of convertible securities tend to reflect price changes in their underlying common stocks, but also
tend to respond inversely to changes in interest rates. Convertible securities typically entail less market risk than investments in the common stock of the same issuers. Declines in their market prices are
typically not as pronounced as those of their underlying common stocks. Like all fixed-income securities, convertible securities are subject to the risk of default on their issuers’ payment obligations.
U.S. Government Obligations
The Fund may invest in U.S. Government securities, which include Treasury
Bills, Treasury Notes and Treasury Bonds that differ in their interest rates, maturities and times of issuance. Treasury Bills have initial maturities of one year or less; Treasury Notes have initial maturities of one to ten years; and
Treasury Bonds generally have initial maturities of greater than ten years. In addition to U.S. Treasury securities, the Fund may invest in securities issued or guaranteed by the U.S. Government or its agencies
or instrumentalities. Some obligations issued or guaranteed by U.S. Government agencies and
instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the Treasury; others by discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. These securities bear fixed, floating or variable rates of interest. While the U.S.
Government currently provides financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so, since it is not so obligated by law.
U.S.
Government Agency Securities
U.S. government agency securities
are issued or guaranteed by U.S. Government-sponsored enterprises and federal agencies. These include securities issued by the Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”), Federal Home Loan Bank, Federal Land Bank, Farmers Home Administration, Bank for Cooperatives, Federal Intermediate Credit
Bank, Federal Financing Bank, Federal Farm Credit System, the Small Business Administration, Federal Housing Administration, and Maritime Administration. Some of these
securities are supported by the full faith and credit of the U.S. Treasury, and the remainder are supported only by the credit of the instrumentality, which may or may not include the right of the issuer to borrow from the Treasury.
Bank Obligations
Bank obligations are certificates of deposit, bankers’ acceptances,
and other short-term debt obligations. Certificates of deposit are short-term obligations of commercial banks. A bankers’ acceptance is a time draft drawn on a commercial bank by a borrower, usually in connection with international
commercial transactions. Certificates of deposit may have fixed or variable rates.
The Fund will not invest in any debt security issued by a commercial bank
unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, or, in the case of domestic banks which do not have total assets of at least $1 billion, the aggregate investment made in any one such bank
is limited to $250,000 and the principal amount of such investment is insured in full by the Federal Deposit Insurance Corporation; and (ii) in the case of foreign banks, the security is, in the opinion of
Alger Management, of an investment quality comparable to other debt securities which may be purchased by the Fund. These limitations do not prohibit investments in securities issued by foreign branches of U.S. banks, provided such U.S. banks meet the foregoing requirements.
Foreign Bank Obligations
Investments by the Fund in foreign bank obligations and obligations of foreign branches of domestic banks present certain risks, including the impact of future political and economic developments, the
possible imposition of withholding taxes on interest income, the possible seizure or nationalization of foreign deposits, the possible establishment of exchange controls and/or the addition of other foreign
governmental restrictions that might affect adversely the payment of principal and interest on these obligations. In addition, there may be less publicly available and reliable information about a foreign
bank than about domestic banks owing to different accounting, auditing, reporting and record-keeping standards.
Short-Term Corporate Debt Securities
These are outstanding nonconvertible corporate debt securities
(e.g., bonds and debentures) which have one year or less remaining to maturity. Corporate notes may have fixed, variable, or floating rates.
Commercial Paper
These are short-term promissory notes issued by corporations primarily to
finance short-term credit needs.
Variable Rate Master Demand Notes
These are unsecured instruments that permit the indebtedness thereunder to vary and provide for periodic adjustments in the interest rate. Because these notes are direct lending arrangements between the
Fund and the issuer, they are not normally traded. Although no active secondary market may exist for these notes, the Fund may demand payment of principal and accrued interest at any time or may resell the
note to a third party. While the notes are not typically rated by credit rating agencies, issuers of variable rate master demand notes must satisfy Alger Management that the same criteria for issuers of commercial
paper are met. In addition, when purchasing variable rate master demand notes, Alger Management will consider the earning power, cash flows and other liquidity ratios of the issuers of the notes and will
continuously monitor their financial status and ability to meet payment on demand. In the event an issuer of a variable rate master demand note were to default on its payment obligations, the Fund might be
unable to dispose of the note because of the absence of a secondary market and could, for this or other reasons, suffer a loss to the extent of the default.
Repurchase Agreements
Under the terms of a repurchase agreement, the Fund would acquire a high quality money market instrument for a relatively short period (usually not more than one week) subject to an obligation of the
seller to repurchase, and the Fund to resell, the instrument at an agreed price (including accrued interest)
and time, thereby
determining the yield during the Fund’s holding period. Repurchase agreements may be seen to be loans by the Fund collateralized by the underlying instrument. This
arrangement results in a fixed rate of return that is not subject to market fluctuations during the Fund’s holding period and not necessarily related to the rate of return on the underlying instrument. The value of the underlying
securities, including accrued interest, will be at least equal at all times to the total amount of the repurchase obligation, including interest. The Fund bears a risk of loss in the event that the other party to a repurchase agreement defaults on its obligations and the Fund is delayed in or prevented from exercising
its rights to dispose of the collateral securities, including the risk of a possible decline in the value of the collateral securities during the period in which the Fund seeks to assert these rights, the risk of incurring expenses associated with asserting these rights and the risk of losing all or part of the income from the
agreement. Alger Management reviews the creditworthiness of those banks, dealers and clearing
corporations with which the Fund enters into repurchase agreements to evaluate these risks and monitors on an ongoing basis the value of the securities subject to repurchase agreements to ensure that the value is maintained at the required level.
Firm Commitment Agreements and When-Issued Purchases
Firm commitment agreements and “when-issued” purchases call for the purchase of securities at an agreed price on a specified future date and would be used, for example, when a decline in the yield of
securities of a given issuer is anticipated and a more advantageous yield may be obtained by committing currently to purchase securities to be issued later. When the Fund purchases a security under a firm
commitment agreement or on a when-issued basis it assumes the risk of any decline in value of the security occurring between the date of the agreement or purchase and the settlement date of the
transaction. The Fund will not use these transactions for leveraging purposes and, accordingly, will segregate cash or liquid securities in an amount sufficient at all times to meet its purchase obligations
under these agreements.
Warrants and Rights
The Fund may invest in warrants and rights. A warrant is a type of security that entitles the holder to buy a specified amount of common stock at a specified price, usually higher than the market price at the
time of issuance, for a period of years or to perpetuity. In contrast, rights, which also represent the right to buy common shares, normally have a subscription price lower than the current market value of the common
stock and a life of two to four weeks. Warrants are freely transferable and are traded on the major securities exchanges.
Restricted and Illiquid Securities
The Fund will not invest more than 15% of its net assets in
“illiquid” investments, which are defined as securities that the Manager reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
The Fund may invest in restricted securities; i.e., securities that are subject to legal or contractual restrictions on their resale. These restrictions
might prevent the sale of the securities at a time when a sale would otherwise be desirable.
The Fund may invest in restricted securities governed by Rule 144A under
the Securities Act of 1933, as amended (the “Securities Act”). Rule 144A is designed to facilitate efficient trading of unregistered securities among institutional investors. Rule 144A permits the resale to qualified institutions of restricted securities that, when issued, were not of the same class as securities listed on a U.S. securities exchange or quoted on NASDAQ.
Restricted securities may be illiquid or less liquid. In determining the
liquidity of a restricted security, the Manager will, using information obtained after reasonable inquiry, take into account relevant market, trading, and investment-specific considerations. If institutional trading in restricted securities were to
decline to limited levels, the liquidity of the Fund could be adversely affected.
Short Sales
The Fund may sell securities “short against the box.” While a
short sale is the sale of a security the Fund does not own, it is “against the box” if at all times when the short position is open the Fund owns an equal amount of the securities or securities convertible into, or exchangeable without further
consideration for, securities of the same issue as the securities sold short. Additionally, the Fund may enter into short sales that are not “against the box”. Short sales that are not “against the box” are also known
as naked short sales,
meaning the Fund does not own the securities against which the short sale was entered, exposing the Fund to unlimited risk. In order to engage in a short sale, the Fund
arranges with a broker to borrow the security being sold short. The Fund must deposit collateral, consisting of cash or marketable securities, with the broker to secure the Fund’s obligation to replace the security, and segregate liquid assets so that the total of the amounts deposited with the broker and segregated is equal to the
current value of the securities sold short. In addition, the Fund must pay the broker any dividends or interest paid on the borrowed security during the time the short position is open. In order to close out its short position, the Fund will replace the security by purchasing the security at the price prevailing at the time of replacement. If the price of the security sold short has increased since the time of the short sale, the Fund will incur a loss in addition to the costs associated with establishing, maintaining and closing out
the short position. If the price of the security sold short has decreased since the time of the short sale, the Fund will experience a gain to the extent the difference in price is greater than these costs.
Short sale transactions have been subject to increased regulatory scrutiny
in response to recent market events, including the imposition of restrictions on short-selling certain securities and reporting requirements. Regulatory authorities may from time to time impose restrictions that adversely affect the
ability to borrow certain securities in connection with short sale transactions. Regulations imposed by the SEC, and the potential for further interventions by the SEC or other regulators, may discourage or impede
short selling practices due to the increased economic, regulatory, compliance and disclosure obligations or risks that they present.
Lending of Fund Securities
The Fund may lend securities to brokers, dealers and other financial organizations. The Fund will not lend securities to Alger Management or its affiliates. By lending its securities, the Fund can increase its income by continuing to receive interest or dividends on the loaned securities as well as by either investing the cash collateral in short-term securities or by earning income in the form of interest paid by the
borrower when U.S. Government securities or letters of credit are used as collateral. The Fund will adhere to the following conditions whenever its securities are loaned: (a) the Fund must receive at least 100%
cash collateral or equivalent securities from the borrower; (b) the borrower must increase this collateral whenever the market value of the loaned securities including accrued interest exceeds the value of the
collateral; (c) the Fund must be able to terminate the loan at any time; (d) the Fund must receive reasonable interest on the loan, as well as any dividends, interest or other distributions on the loaned
securities and any increase in market value; (e) the Fund may pay only reasonable custodian fees in connection with the loan; and (f) voting rights on the loaned securities may pass to the borrower;
provided, however, that if a material event adversely affecting the investment occurs, the Board of Trustees of the Trust (the “Board”) must terminate the loan and regain the right to vote the securities.
The Fund bears a risk of loss in the event that the other party to a
securities loan transaction defaults on its obligations and the Fund is delayed in or prevented from exercising its rights to dispose of the collateral, including the risk of a possible decline in the value of the collateral securities during the period in which the Fund seeks to assert these rights, the risk of incurring expenses associated with asserting
these rights and the risk of losing all or a part of the income from the transaction.
Foreign Securities
Foreign securities are securities issued by companies generally defined by
a third party, or in certain circumstances by a Portfolio Manager, (i) that are organized under the laws of a foreign country; (ii) whose securities are primarily listed in a foreign country; or (iii) that have a majority of their assets, or derive more than 50% of their revenue or profits from business, investments, or sales, outside the United
States. Foreign securities investments may be affected by changes in currency rates or exchange control regulations, changes in governmental administration or economic or monetary policy (in the United States
and abroad) or changed circumstances in dealings between nations. Dividends paid by foreign issuers may be subject to withholding and other foreign taxes that may decrease the net return on these investments as
compared to dividends paid to the Fund by domestic corporations. It should be noted that there may be less publicly available information about foreign issuers than about domestic issuers, and foreign issuers
are not subject to uniform accounting, auditing and financial reporting standards and requirements comparable to those of domestic issuers. Securities of some foreign issuers are more volatile than
securities of comparable domestic issuers and foreign brokerage commissions are generally higher than in the United States. Foreign securities markets may also be more volatile and less subject to government
supervision than
those in the United States. Investments in foreign countries could be affected by other factors not present in the United States, including expropriation, confiscatory
taxation and potential difficulties in enforcing contractual obligations. Securities purchased on foreign exchanges may be held in custody by a foreign branch of a domestic bank.
The risks associated with investing in foreign securities are often heightened for investments in emerging markets countries. These heightened risks include: (i) greater risks of expropriation,
confiscatory taxation, nationalization, and less social, political and economic stability; (ii) the small size of the markets for securities of emerging markets issuers and the currently low or nonexistent volume of
trading, resulting in lack of liquidity, price volatility, and the potential for market manipulation; (iii) certain national policies which may restrict the Fund’s investment opportunities including restrictions on investing in issuers or industries deemed sensitive to relevant national interests; and (iv) the absence of developed legal structures and accounting and financial reporting standards governing private or foreign
investment and private property. The Fund’s purchase and sale of portfolio securities in certain emerging markets countries may be constrained by limitations as to daily changes in the prices of listed securities, periodic trading or settlement volume and/or limitations on aggregate holdings of foreign investors. In
certain cases, such limitations may be computed based upon the aggregate trading by or holdings of the Fund, Alger Management and its affiliates and its clients and other service providers. The Fund may not
be able to sell securities in circumstances where price, trading or settlement volume limitations have been reached. These limitations may have a negative impact on the Fund’s performance and may adversely
affect the liquidity of the Fund’s investment to the extent that it invests in certain emerging market countries. In addition, some emerging markets countries may have fixed or managed currencies which are
not free-floating against the U.S. dollar. Further, certain emerging markets countries’ currencies may not be internationally traded. Certain of these currencies have experienced volatility relative to the U.S. dollar. If the Fund does not hedge the U.S. dollar value of securities it owns denominated in currencies that are
devalued, the Fund’s net asset value will be adversely affected. If the Fund hedges the U.S. dollar value of securities it owns denominated in currencies that increase in value, the Fund will not benefit from the
hedge it purchased, and will lose the amount it paid for the hedge. Many emerging markets countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation
and rapid fluctuations in inflation rates have had and may continue to have adverse effects on the economies and securities markets of certain of these countries.
The Fund may invest in the securities of foreign issuers in the form of American Depositary Receipts and American Depositary Shares (collectively, “ADRs”) and Global Depositary Receipts and Global Depositary Shares (collectively, “GDRs”) and other forms of depositary receipts. These securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs
are receipts typically issued by a United States bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. GDRs are
receipts issued outside the United States typically by non-United States banks and trust companies that evidence ownership of either foreign or domestic securities. Generally, ADRs in registered form are designed for use in the United States securities markets and GDRs in bearer form are designed for use outside the United States.
These securities will generally be purchased through “sponsored” facilities. A sponsored facility is established jointly by the issuer of the underlying security and a depositary. A depositary may establish an unsponsored facility without participation by the issuer of the deposited security. Holders of unsponsored
depositary receipts generally bear all the costs of such facilities, and the depositary of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the
issuer of the deposited security or to pass through voting rights to the holders of such receipts in respect of the deposited securities.
Executive Order on Securities Investments that Finance Communist Chinese Military Companies
As a result of an Executive Order issued by the former President of the
United States (the “Order”), effective January 11, 2021, U.S. persons (including the Fund) are prohibited from transacting in certain securities and derivatives of publicly traded securities of any companies designated as a “Communist
Chinese military company” (“CCMCs” and collectively with securities of certain subsidiaries of such companies and related depositary receipts that may be covered by the Order, “CCMC Securities”) by the U.S. Department of Defense (the “DOD”) or the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) unless such transactions are for purposes of divestment. The DOD designated an initial list of CCMCs prior to January 11, 2021 and, along with OFAC, may designate additional CCMCs
from time to time. U.S. persons may divest their holdings in the initially-designated CCMCs at
any time through November 11, 2021. With respect to additional CCMCs, U.S. persons will be
prohibited from transacting in CCMC Securities 60 days after such CCMC is designated by the DOD or OFAC, and will have 365 days from such designation date to divest their holdings in those CCMC
Securities.
OFAC subsequently published, on several occasions, guidance regarding
compliance with the Order, including several “Frequently Asked Questions” (FAQs)-style publications addressing the scope of, and interpretive matters regarding, compliance with the Order, as well as the Order’s application to U.S. funds that hold CCMC Securities (i.e., including mutual funds that hold CCMC Securities regardless of the size
of the position relative to a fund’s total assets). Certain interpretive issues related to compliance with the Order remain open, including to what extent a U.S. person could be held liable for failing to identify an
unlisted entity whose name “close matches the name” of an entity designated as a Communist Chinese military company.
The Fund’s performance may be adversely impacted by restrictions on
its ability to hold CCMC Securities. The extent of any impact will depend on future developments, including the Fund’s ability to buy and sell the CCMC Securities, valuation of the CCMC Securities, modifications to the Order, the
issuance of additional or different interpretive guidance regarding compliance with the Order, and the duration of the Order, all of which are highly uncertain.
Investing in Europe
Ongoing concerns regarding the economies of certain European countries and/or their sovereign debt, as well as the possibility that one or more countries might leave the European Union (the “EU”), create risks for investing in the EU. A number of countries in Europe have experienced severe economic and
financial difficulties. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts. Many other issuers have faced difficulties obtaining credit or
refinancing existing obligations. Financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit, and financial markets in Europe and elsewhere have experienced significant volatility and declines in asset
values and liquidity. These difficulties may continue, worsen or spread within and outside of Europe. Responses to the financial problems by European governments, central banks and others, including
austerity measures and reforms, may not be effective, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings
by governments and others of outstanding debt could have additional adverse effects on economies, financial markets and asset valuations around the world.
In June 2016, the United Kingdom (the “UK”) held a referendum resulting in a vote in favor of the exit of the UK from the EU (known as “Brexit”). On March 29, 2017, the UK triggered the withdrawal procedures in Article 50 of the Treaty of Lisbon which provides for a two-year negotiation period
between the EU and the withdrawing member state. Pursuant to an agreement between the UK and the EU, the UK left the EU on January 31, 2020, subject to a transitional period ending December 31, 2020.
The UK and the EU reached a trade and cooperation agreement on December 31, 2020, which went into effect on January 1, 2021.
Brexit is widely expected to have consequences that are both profound and uncertain for the economic and political future of the UK and the EU. The range and potential implications of possible
political, regulatory, economic and market outcomes cannot be fully known at this time, but could be significant, potentially resulting in increased volatility and illiquidity and lower economic growth for
companies that rely significantly on Europe for their business activities and revenues. The UK has one of the largest economies in Europe and is a major trading partner with the other EU countries and the United
States. Brexit may create additional and substantial economic stresses for the UK, including a contraction of the UK’s economy, decreased trade, capital outflows, devaluation of the British pound, as well as a decrease in business and consumer spending and investment. The negative impact on not only the UK and
other European economies but also the broader global economy could be significant. Due to the very recent occurrence of these events, the full scope and nature of the consequences are not at this time known and are unlikely to be known for a significant period of time.
It is not possible
to ascertain the precise impact these events may have on the Fund or its investments from an economic, financial, tax or regulatory perspective but any such impact could
have material consequences for the Fund and its investments. Whether or not the Fund invests in securities of issuers located in Europe or has significant exposure to European issuers or countries, these events could
negatively affect the value and liquidity of the Fund’s investment.
Foreign Debt Securities
The returns on foreign debt securities reflect interest rates and other market conditions prevailing in those countries. The relative performance of various countries’ fixed-income markets historically has reflected wide variations relating to the unique characteristics of the country’s economy. Year-to-year fluctuations in certain markets have been significant, and negative returns have been experienced in
various markets from time to time.
The foreign government securities in which the Fund may invest generally consist of obligations issued or backed by national, state or provincial governments or similar political subdivisions or central
banks in foreign countries. Foreign government securities also include debt obligations of supranational entities, which include international organizations designated or backed by governmental entities to
promote economic reconstruction or development, international banking institutions and related government agencies. Examples include the International Bank for Reconstruction and Development (the
“World Bank”), the Asian Development Bank and the Inter-American Development Bank.
Foreign government securities also include debt securities of
“quasi-governmental agencies” and debt securities denominated in multinational currency units of an issuer (including supranational issuers). Debt securities of quasi-governmental agencies are issued by entities owned by either a national, state or
equivalent government or are obligations of a political unit that is not backed by the national government’s full faith and credit and general taxing powers.
Derivative Transactions
The Fund may invest in, or enter into, derivatives for a variety of reasons, including to hedge certain market or interest rate risks, to provide a substitute for purchasing or selling particular securities or to increase potential returns. Generally, derivatives are financial contracts whose value depends upon, or is
derived from, the value of an underlying asset, reference rate or index, and may relate to stocks, bonds, interest rates, currencies or currency exchange rates, and related indexes. Examples of derivative
instruments the Fund may use include, but are not limited to options contracts, futures contracts, and options on futures contracts. Derivatives may provide a cheaper, quicker or more specifically focused way
for the Fund to invest than “traditional” securities would. Alger Management, however, may decide not to employ some or all of these strategies for the Fund and there is no assurance that any derivatives
strategy used by the Fund will succeed. The SEC recently adopted Rule 18f-4 under the Investment Company Act of 1940, as amended (the “1940 Act”), which will regulate the use of derivatives for certain funds registered under the 1940 Act. Unless the Fund qualifies as a “limited derivatives user” as defined in Rule 18f-4, the rule would, among other things, require the Fund to establish a comprehensive derivatives
risk management program, to comply with certain value-at-risk based leverage limits, to appoint a derivatives risk manager and to provide additional disclosure both publicly and to the SEC regarding its
derivatives positions. If the Fund qualifies as limited derivatives user, Rule 18f-4 would require the Fund to have policies and procedures to manage its aggregate derivatives risk. These requirements could have
an impact on the Fund, including a potential increase in cost to enter into derivatives transactions and may require the Fund to alter, perhaps materially, its use of derivatives. Compliance with Rule 18f-4 to
invest in derivatives and certain related instruments will not be required until approximately the middle of 2022. In connection with the adoption of Rule 18f-4, the SEC also eliminated the asset segregation
framework for covering derivatives and certain financial instruments arising from the SEC’s Release 10666 and ensuing staff guidance. As the Fund transitions into reliance on Rule 18f-4, its approach to
asset segregation and coverage requirements described in this SAI with respect to derivatives may be impacted.
Derivatives can be volatile and involve various types and degrees of risk, depending upon the characteristics of the particular derivative and the portfolio as a whole. Derivatives permit the Fund to
increase or decrease the level of risk, or change the character of the risk, to which its portfolio is exposed in much the same way as the Fund can increase or decrease the level of risk, or change the character of the risk, of its portfolio by making investments in specific securities. However, derivatives may entail
investment exposures that are greater than their cost would suggest, meaning that a small investment in derivatives could have a large potential impact on the Fund’s performance.
If the Fund invests in derivatives at inopportune times or judges market conditions
incorrectly, such investments may lower the Fund’s return or result in a loss. The Fund also could experience losses if its derivatives were poorly correlated with the underlying instruments or the Fund’s other investments, or if the Fund were unable to liquidate its position because of an illiquid secondary market. The market for
many derivatives is, or suddenly can become, illiquid. Changes in liquidity may result in significant, rapid and unpredictable changes in the prices for derivatives.
The Fund, as permitted, may take advantage of opportunities in options and futures contracts and options on futures contracts and any other derivatives which are not presently contemplated for use by
the Fund or which are not currently available but which may be developed, to the extent such
opportunities are both consistent with the Fund’s investment objective and legally permissible for the Fund. Before the Fund enters into such transactions or makes any such investment, the Fund will provide
appropriate disclosure in its Prospectus or this SAI.
The Commodity Futures Trading Commission (“CFTC”) subjects advisers to registered investment companies to regulation by the CFTC if a fund that is advised by the investment adviser either (i) invests, directly or indirectly, more than a prescribed level of its liquidation value in CFTC-regulated futures,
options and swaps (“CFTC Derivatives”) or (ii) markets itself as providing investment exposure to such instruments. To the extent the Fund uses CFTC Derivatives, it intends to do so below such prescribed
levels and will not market itself as a “commodity pool” or a vehicle for trading such instruments. Accordingly, the Manager has claimed exclusion from the definition of the term “commodity pool
operator” under the Commodity Exchange Act (“CEA”) pursuant to Rule 4.5 under the CEA. The Manager is not, therefore, subject to registration or regulation as a “commodity pool operator” under the CEA in respect of the Fund.
Options
The Fund may purchase put and call options and sell (write) covered put and call options on securities and securities indexes to increase gain or to hedge against the risk of unfavorable price
movements. The Fund may only buy or sell options that are listed on a national securities exchange.
A call option on a security is a contract that gives the holder of the
option the right, in return for a premium paid, to buy from the writer (seller) of the call option the security underlying the option at a specified exercise price during the term of the option. The writer of the call option has the obligation
upon exercise of the option to deliver the underlying security upon payment of the exercise price during the option period. A put option on a security is a contract that, in return for the premium, gives the holder of the option the right to sell to the writer (seller) the underlying security at a specified price during the term of the option. The writer of the put, who receives the premium, has the obligation to buy the
underlying security upon exercise at the exercise price during the option period.
The Fund will not sell options that are not covered. A call option written
by the Fund on a security is “covered” if the Fund owns the underlying security covered by the call or has an absolute and immediate right to acquire that security without additional cash consideration (or for additional cash consideration
held in a segregated account) upon conversion or exchange of other securities held in its portfolio. A call option is also covered if the Fund holds a call on the same security as the call written where the exercise price of the call held is (1) equal to or less than the exercise price of the call written or (2) greater than the exercise price of the call written if the difference is maintained by the Fund in cash or liquid securities in a segregated account. A put option is “covered” if the Fund maintains cash or liquid securities with a value equal to the exercise price in a segregated account, or else holds a put on the same security as the put
written where the exercise price of the put held is equal to or greater than the exercise price of the put written.
If the Fund has written an option, it may terminate its obligation by effecting a closing purchase transaction. This is accomplished by purchasing an option of the same series as the option previously
written. However, once the Fund has been assigned an exercise notice, the Fund will be unable to effect a closing purchase transaction. Similarly, if the Fund is the holder of an option it may liquidate its position by effecting a closing sale transaction. This is accomplished by selling an option of the same series as the option previously purchased. There can be no assurance that either a closing purchase or sale transaction
can be effected when the Fund so desires.
The Fund would realize a profit from a closing transaction if the price of the transaction were less than the premium received from writing the option or is more than the premium paid to purchase the
option; the Fund would realize a loss from a closing transaction if the price of the transaction were more
than the premium
received from writing the option or less than the premium paid to purchase the option. Since call option prices generally reflect increases in the price of the underlying
security, any loss resulting from the repurchase of a call option may also be wholly or partially offset by unrealized appreciation of the underlying security. Other principal factors affecting the market value of a put or a call option include supply and demand, interest rates, the current market price and price volatility of the underlying security and the time remaining until the expiration date.
An option position may be closed out only on an exchange which provides a secondary market for an option of the same series. There is no assurance that a liquid secondary market on an exchange will exist
for any particular option. In such event it might not be possible to effect closing transactions in particular options, so that the Fund would have to exercise its option in order to realize any profit and would incur
brokerage commissions upon the exercise of the options. If the Fund, as a covered call option writer, were unable to effect a closing purchase transaction in a secondary market, it would not be able to sell the
underlying security until the option expired or it delivered the underlying security upon exercise or otherwise covered the position.
In addition to options on securities, the Fund may also purchase and sell call and put options on securities indexes. A stock index reflects in a single number the market value of many different stocks.
Relative values are assigned to the stocks included in an index and the index fluctuates with changes in the market values of the stocks. The options give the holder the right to receive a cash settlement during
the term of the option based on the difference between the exercise price and the value of the index. By writing a put or call option on a securities index, the Fund is obligated, in return for the premium
received, to make delivery of this amount. The Fund may offset its position in stock index options prior to expiration by entering into a closing transaction on an exchange or it may let the option expire
unexercised.
Use of options on securities indexes entails the risk that trading in the options may be interrupted if trading in certain securities included in the index is interrupted. The Fund will not purchase these options unless Alger Management is satisfied with the development, depth and liquidity of the market and Alger
Management believes the options can be closed out.
Price movements in the Fund’s securities may not correlate precisely with movements in the level of an index and, therefore, the use of options on indexes cannot serve as a complete hedge and would depend,
in part, on the ability of Alger Management to predict correctly movements in the direction of the stock market generally or of a particular industry. Because options on securities indexes require settlement in
cash, Alger Management might be forced to liquidate Fund securities to meet settlement obligations.
Although Alger Management will attempt to take appropriate measures to
minimize the risks relating to any trading by the Fund in put and call options, there can be no assurance that the Fund will succeed in any option trading program it undertakes.
Stock Index Futures and Options on Stock Index Futures
Futures are generally bought and sold on the commodities exchanges where they are listed with payment of initial and variation margin as described below. The sale of a futures contract creates a firm
obligation by the Fund, as seller, to deliver to the buyer the net cash amount called for in the contract at a specific future time. Put options on futures might be purchased to protect against declines in the market
values of securities occasioned by a decline in stock prices and securities index futures might be sold to protect against a general decline in the value of securities of the type that comprise the index. Options on futures contracts are similar to options on securities except that an option on a futures contract gives the purchaser the right, in return for the premium paid, to assume a position in a futures contract and
obligates the seller to deliver such position.
A stock index future obligates the seller to deliver (and the purchaser to take) an amount of cash equal to a specific dollar amount times the difference between the value of a specific stock index at the
close of the last trading day of the contract and the price at which the agreement is made. No physical delivery of the underlying stocks in the index is made. While incidental to its securities activities, the Fund may use index futures as a substitute for a comparable market position in the underlying securities.
If the Fund uses futures, or options thereon, for hedging,
the risk of imperfect correlation will increase as the composition of the Fund varies from the composition of the stock index. In an effort to compensate for the imperfect correlation of movements in the price of the securities being hedged and movements in
the price of the stock index futures, the Fund may, if it uses a hedging strategy, buy or sell stock index
futures contracts in
a greater or lesser dollar amount than the dollar amount of the securities being hedged if the historical volatility of the stock index futures has been less or greater
than that of the securities. Such “over hedging” or “under hedging” may adversely affect the Fund’s net investment results if market movements are not as anticipated when the hedge is established.
An option on a stock index futures contract, as contrasted with the direct investment in such a contract, gives the purchaser the right, in return for the premium paid, to assume a position in a stock
index futures contract at a specified exercise price during the term of the option. The Fund would sell options on stock index futures contracts only as part of closing purchase transactions to terminate its
options positions. No assurance can be given that such closing transactions could be effected or that there would be correlation between price movements in the options on stock index futures and price movements
in the Fund’s securities which were the subject of the hedge. In addition, any purchase by the Fund of such options would be based upon predictions as to
anticipated market trends, which could prove to be inaccurate.
The Fund’s use, if any, of stock index futures and options thereon will in all cases be consistent with applicable regulatory requirements and in particular the rules and regulations of the CFTC and will be
entered into only, if at all, for bona fide hedging, risk management or other portfolio management purposes. Typically, maintaining a futures contract or selling an option thereon will require the Fund to
deposit with a financial intermediary as security for its obligations an amount of cash or other specified assets (initial margin) which initially is typically 1% to 10% of the face amount of the contract (but may
be higher in some circumstances). Additional cash or assets (variation margin) may be required to be deposited thereafter on a daily basis as the mark to market value of the contract fluctuates. The purchase
of an option on stock index futures involves payment of a premium for the option without any further obligation on the part of the Fund. If the Fund exercises an option on a futures contract it will be
obligated to post initial margin (and potential subsequent variation margin) for the resulting futures position just as it would for any position. Futures contracts and options thereon are generally settled by
entering into an offsetting transaction but there can be no assurance that the position can be offset prior to settlement at an advantageous price, or that delivery will occur.
The Fund will not enter into a futures contract or related option (except for closing transactions) if, immediately thereafter, the sum of the amount of its initial margin and premiums on open futures
contracts and options thereon would exceed 5% of the Fund’s total assets (taken at current value); however, in the case of an option that is in-the-money at the time of the purchase, the in-the-money
amount may be excluded in calculating the 5% limitation.
Synthetic Convertible Instruments
A “synthetic” convertible instrument combines separate securities that possess the economic characteristics similar to a convertible security, i.e., fixed-income securities (“fixed-income component,” which may be a convertible or non-convertible security) and the right to acquire equity securities
(“convertible component”). The fixed-income component is achieved by investing in fixed-income securities, including bonds, preferred stocks and money market instruments. The convertible component is
achieved by investing in warrants or options to buy common stock at a certain exercise price, or options on a stock index. In establishing a synthetic convertible
instrument, the Fund may also pool a basket of fixed-income securities and a basket of warrants or options that produce the economic characteristics similar to a convertible security. Within each basket of fixed-income securities and warrants or options,
different companies may issue the fixed-income and convertible components, which may be purchased separately and at different times. The Fund may also purchase synthetic convertible instruments created
by other parties, typically investment banks, including convertible structured notes. Convertible structured notes are fixed-income debentures linked to equity. Convertible structured notes have the
attributes of a convertible security; however, the investment bank that issued the convertible note assumes the credit risk associated with the investment, rather than the issuer of the underlying common stock into
which the note is convertible. Purchasing synthetic convertible instruments may offer more flexibility than purchasing a convertible security. Different companies may issue the fixed-income and convertible
components, which may be purchased separately and at different times. The value of a synthetic convertible instrument will respond differently to market fluctuations than a convertible security because
a synthetic convertible instrument is composed of two or more separate securities, each with its own market value. In addition, if the value of the underlying common stock or the level of the index involved
in the convertible component falls below the exercise price of the warrant or option, the warrant or option may lose all value.
Borrowing
The Fund may borrow from banks for temporary or emergency purposes. In addition, the Fund may borrow money from banks and use it to purchase additional securities. This borrowing is known as
leveraging. Leverage increases both investment opportunity and investment risk. If the investment gains on securities purchased with borrowed money exceed the interest paid on the borrowing, the net asset
value of the Fund’s shares will rise faster than would otherwise be the case. On the other hand, if the investment gains fail to cover the cost (including interest) of borrowings, or if there are losses, the net asset value of the Fund’s shares will decrease faster than would otherwise be the case. The Fund is
required to maintain continuous asset coverage of 300% of its borrowings. Maintaining asset coverage of 300% means that the Fund’s liabilities may comprise up to a third of its assets. For example, if the Fund had $100 in total assets, and the Fund borrowed $50, the Fund’s total assets would be $150, and its
liabilities would be $50. The Fund would have 300% asset coverage. If such asset coverage should decline below 300% as a result of market fluctuations or other reasons, the Fund may be required to sell some of
its portfolio holdings within three days to reduce the debt and restore the 300% asset coverage, even though it may be disadvantageous from an investment standpoint to sell securities at that time.
Leveraging may exaggerate the effect on net asset value of any increase or decrease in the market value of the Fund’s securities. Money borrowed for leveraging will be subject to interest costs which may or may not be recovered by appreciation of the securities purchased; in certain cases, interest costs may exceed
the return received on the securities purchased. The Fund also may be required to maintain minimum average balances in connection with such borrowing or to pay a commitment or other fee to maintain a
line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.
Interfund Loans
The SEC has granted an exemption permitting the funds advised by Alger Management to participate in an interfund lending program. This program allows the funds to borrow money from and lend money to
each other for temporary or emergency purposes. To the extent permitted under its investment restrictions, the Fund may lend uninvested cash in an amount up to 15% of its
net assets to other funds, and the Fund may borrow in an amount up to 10% of its net assets from other funds. If the Fund has borrowed from other funds 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. The ability of the Fund to lend cash to or borrow cash from other funds is subject to certain other terms and conditions. The Board is responsible
for overseeing the Trust’s participation in the interfund lending program.
Exchange-Traded Funds
To the extent otherwise consistent with its investment policies and
applicable law, the Fund may invest in “exchange-traded funds” (“ETFs”), registered investment companies whose shares are listed on a national stock exchange. ETFs, which may be unit investment trusts or open-end management investment
companies, typically hold portfolios of securities designed to track the performance of various broad securities indexes or sectors of such indexes. ETFs thus provide
another means, in addition to futures and options on indexes, of creating or hedging securities index exposure in the Fund’s investment strategies. ETFs are listed on exchanges and trade in the secondary market on a per-share basis.
The values of ETFs are subject to change as the values of their respective
component securities or commodities fluctuate according to market volatility. Investments in ETFs that are designed to correspond to an equity index involve certain inherent risks generally associated with investments in a portfolio of
common stocks, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of ETFs held by the Fund. Similarly, investments in ETFs that are designed to
correspond to commodity returns involve certain inherent risks generally associated with investment in commodities. Moreover, investments in ETFs may not exactly match the performance of a direct investment
in the respective indexes to which they are intended to correspond due to the temporary unavailability of certain index securities in the secondary market or other
extraordinary circumstances, such as discrepancies with respect to the weighting of securities. When the Fund invests in an ETF, in addition to the investment advisory fee the investor pays to the Fund, the Fund pays a management fee
with respect to the assets invested in the ETF.
Master Limited Partnerships
The Fund may invest in master limited partnerships (“MLPs”).
An MLP is a publicly traded company organized as a limited partnership or limited liability company and treated as a partnership for federal income tax purposes. MLPs generally have two classes of owners, the general partner and limited
partners. The general partner typically controls the partnership’s operations and management. The Fund may purchase publicly traded common units issued to limited partners of MLPs. MLPs combine the tax
advantages of a partnership with the liquidity of a publicly traded stock. MLP income is generally not subject to entity-level tax; rather, its income, gain or losses pass through to common unitholders. The
value of an MLP generally fluctuates predominantly based on prevailing market conditions and the success of the MLP. Investments held by MLPs may be relatively illiquid, and MLPs themselves may trade
infrequently and in limited volume. MLPs involve the risks related to their underlying assets, and risks associated with pooled investment vehicles.
Venture Capital and Private Equity Investments
The Fund may identify investment opportunities that are not yet available in the public markets and that are accessible only through private equity investments. To capitalize on such opportunities, the Fund
may invest in venture capital or private equity funds, direct private equity investments and other investments that Alger Management determines to have limited liquidity (“Special Investment
Opportunities”). There may be no trading market for Special Investment Opportunities, and the sale or transfer of such securities may be limited or prohibited by contract or legal requirements, or may be
dependent on an exit strategy, such as an IPO or the sale of a business, which may not occur, or may be dependent on managerial assistance provided by other investors and their willingness to provide
additional financial support. Positions in Special Investment Opportunities may be able to be liquidated, if at all, only at disadvantageous prices. As a result, if the Fund holds such positions it may be required to do so for several years, if not longer, regardless of adverse price movements. Investment in Special
Investment Opportunities may cause the Fund to be less liquid than would otherwise be the case.
Real Estate Investment Trusts (“REITs”)
The Fund may invest in shares of REITs. REITs possess certain risks which
differ from an investment in common stocks. REITs are financial vehicles that pool investor’s capital to purchase or finance real estate. REITs may concentrate their investments in specific geographic areas or in specific property types, i.e., hotels, shopping malls, residential complexes and office buildings.
REITs are subject to management fees and other expenses, and the Fund will
bear its proportionate share of the costs of the REITs’ operations. There are three general categories of REITs: equity REITs, mortgage REITs and hybrid REITs. Equity REITs invest primarily in direct fee ownership or leasehold
ownership of real property; they derive most of their income from rents. Mortgage REITs invest mostly in mortgages on real estate, which may secure construction, development or long-term loans; the main source
of their income is mortgage interest payments. Hybrid REITs hold both ownership and mortgage interests in real estate.
Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. The market value of REIT shares and the ability of the REITs to distribute income may be adversely affected by several factors, including rising interest rates, changes in the national, state and local economic climate and real estate conditions, perceptions of prospective
tenants of the safety, convenience and attractiveness of the properties, the ability of the owners to provide adequate management, maintenance and insurance, the cost of complying with the Americans with
Disabilities Act, increased competition from new properties, the impact of present or future
environmental legislation and compliance with environmental laws, failing to maintain their exemptions from registration under the 1940 Act, changes in real estate taxes and other operating expenses, adverse
changes in governmental rules and fiscal policies, adverse changes in zoning laws and other factors beyond the control of the issuers of the REITs. In addition, distributions received by the Fund from REITs
may consist of dividends, capital gains and/or return of capital. As REITs generally pay a higher rate of dividends (on a pre-tax basis) than operating companies, to the extent application of the Fund’s
investment strategy results in the Fund investing in REIT shares, the percentage of the Fund’s dividend income received from REIT shares will likely exceed the percentage of the Fund’s portfolio which is
comprised of REIT shares. Ordinary REIT dividends received by the Fund and distributed to the Fund’s shareholders will generally be taxable as ordinary income and will not constitute “qualified dividend income.” However, for tax years beginning after December 31, 2017 and before January 1, 2026, a non-corporate taxpayer who is a direct REIT shareholder may claim a 20% “qualified business income”
deduction for
ordinary REIT dividends, and a regulated investment company may report dividends as eligible for this deduction to the extent the regulated investment company’s
income is derived from ordinary REIT dividends (reduced by allocable regulated investment company expenses). A shareholder may treat the dividends as such provided the regulated investment company and the shareholder satisfy
applicable holding period requirements.
REITs (especially mortgage REITs) are also subject to interest rate risk. Rising interest rates may cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the market
price of the equity securities issued by a REIT. Rising interest rates also generally increase the costs of obtaining financing, which could cause the value of the Fund’s REIT investments to decline. During
periods when interest rates are declining, mortgages are often refinanced. Refinancing may reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment under their mortgage
loans and leases to generate cash to make distributions to their shareholders, investments in REITs may be adversely affected by defaults on such mortgage loans or
leases.
Investing in certain REITs, which often have small
market capitalizations, may also involve the same risks as investing in other small capitalization companies. REITs may have limited financial resources and their securities may trade less frequently and in limited volume and may be subject to more abrupt or
erratic price movements than larger company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than the larger capitalization stocks such as those included in the S&P 500 Index. The management of a REIT may be subject to conflicts of interest with respect to the
operation of the business of the REIT and may be involved in real estate activities competitive with the REIT. REITs may own properties through joint ventures or in other circumstances in which the REIT may
not have control over its investments. REITs may incur significant amounts of leverage.
Cyber Security Risk
With the increasing use of the internet and technology in connection with
Fund operations, the Fund and its service providers are susceptible to greater operational and information security risks through breaches of cyber security. Cyber security breaches include stealing or corrupting data maintained online
or digitally, “denial of service” attacks on websites, the unauthorized monitoring, misuse, loss, destruction or corruption of confidential information, unauthorized access to systems, compromises to
networks or devices that the Fund and its service providers use to service Fund operations, and operational disruption or failures in the physical infrastructure or operating systems that support the
Fund and its service providers. Cyber security breaches affecting the Fund or any of the Fund’s intermediaries or service providers may adversely impact the Fund and its shareholders, potentially
resulting in financial losses or the inability of Fund shareholders to transact business. For instance, cyber security breaches may interfere with the processing of shareholder transactions, impact the Fund’s ability to calculate NAVs, cause the release of private shareholder information or confidential business
information, impede trading, subject the Fund to regulatory fines or financial losses and/or cause reputational damage. The Fund may also incur additional costs for cyber security risk management
programs designed to mitigate or prevent the risk of cyber security breaches. Such costs may be ongoing because threats of cyber attacks are constantly evolving. Issuers of securities in which the Fund invests are also subject to similar cyber security risks, which could result in material adverse consequences for such
issuers, and may cause the Fund’s investment in such companies to lose value. There can be no assurance that the Fund or its service providers, or the issuers of the securities in which the Fund invests, will not suffer losses relating to cyber security breaches in the future.
London Interbank Offered Rate (“LIBOR”) Replacement and Other Reference Rates Risk
Many debt securities, derivatives and other financial instruments,
including some of the Fund's investments, utilize benchmark or reference rates such as LIBOR, European Interbank Offer Rate (“EURIBOR”), Sterling Overnight Interbank Average Rate (“SONIA”) and other similar types of reference rates for variable interest rate calculations. Instruments in which the Fund invests may pay
interest at floating rates based on LIBOR or other similar types of reference rates or may be subject to interest caps or floors based on such reference rates. The Fund and issuers of instruments in which the
Fund invests may also obtain financing at floating rates based on such reference rates. The elimination of a reference rate or any other changes or reforms to the determination or supervision of reference rates
could have an adverse impact on the market for—or value of—any securities or payments linked to those reference rates.
The use of LIBOR came under pressure following manipulation allegations in 2012. Despite increased regulation and other corrective actions since that time, concerns have arisen regarding its viability as a
benchmark due largely to reduced activity in the financial markets that it measures. In 2017, the UK Financial Conduct Authority announced that it will no longer encourage nor require banks to submit rates
for the calculation of LIBOR after 2021. The administrator of LIBOR recently announced a possible delay in the phase out of a majority of the U.S. dollar LIBOR
publications until mid-2023, with the remainder of the LIBOR publications to end at the end of 2021. It is unclear whether LIBOR will continue to exist in its current or a modified form. Actions by regulators have resulted in the
establishment of alternative reference rates to LIBOR in most major currencies. Based on the
recommendations of the New York Federal Reserve’s Alternative Reference Rate Committee (comprised of major derivative market participants and their regulators), the U.S. Federal Reserve began publishing a
Secured Overnight Funding Rate (“SOFR”) that is intended to replace U.S. Dollar LIBOR. Proposals for alternative reference rates for other currencies have also been announced or have already begun
publication, such as SONIA in the UK.
Markets are slowly developing in response to these new rates, and transition planning is at a relatively early stage. Neither the effect of the transition process nor its ultimate success is known. The transition process may lead to increased volatility and illiquidity in markets that currently rely on LIBOR to
determine interest rates. The effect of any changes to—or discontinuation of—LIBOR on the Fund will vary depending on, among other things, provisions in individual contracts and whether, how, and when
industry participants develop and adopt new reference rates and alternative reference rates for both legacy and new products and instruments. Because the usefulness of LIBOR as a benchmark may deteriorate during
the transition period, these effects could materialize prior to the end of 2021.
Investment Restrictions
The investment restrictions numbered 1 through 8 below have been adopted by the Trust with respect to the Fund as fundamental policies. Under the 1940 Act, a “fundamental” policy may not be changed without the vote of a “majority of the outstanding voting securities” of the Fund, which is defined in the 1940 Act as the lesser of (a) 67% or more of the shares present at a Fund meeting if the holders of more
than 50% of the outstanding shares of the Fund are present or represented by proxy or (b) more than 50% of the outstanding shares. The Fund’s investment objective is a non-fundamental policy, which may be changed by the Board of Trustees at any time. For the Fund:
1. Except as otherwise permitted by the 1940 Act (which currently limits borrowing to no more than 33 1∕3% of the value of
the Fund’s total assets), or interpretations or modifications by, or exemptive or other relief from, the SEC or other authority with appropriate jurisdiction, and
disclosed to investors, the Fund may not borrow money.
2. Except as otherwise permitted by the 1940 Act, or interpretations or modifications by, or exemptive or other relief from, the SEC or other authority with appropriate jurisdiction, and disclosed to
investors, the Fund may not act as an underwriter of securities of other issuers, except to the extent the Fund may be deemed an underwriter under the Securities Act by virtue of disposing of portfolio securities.
3. Except as otherwise permitted by the 1940 Act, or interpretations
or modifications by, or exemptive or other relief from, the SEC or other authority with appropriate jurisdiction, and disclosed to investors, the Fund may not lend any securities or make loans to others. For purposes of this investment
restriction, the purchase of debt obligations (including acquisitions of loans, loan participations or other forms of debt instruments) and the entry into repurchase agreements shall not constitute loans by the
Fund.
4. Except as otherwise permitted by the 1940 Act, or interpretations or modifications by, or exemptive or other relief from, the SEC or other authority with appropriate jurisdiction, and disclosed to
investors, the Fund may not issue any senior security (as such term is defined in Section 18(f) of the 1940 Act), except insofar as the Fund may be deemed to have issued a senior security by reason of borrowing
money in accordance with the Fund’s borrowing policies. For purposes of this investment restriction, collateral, escrow, or margin or other deposits with respect to the making of short sales, the purchase or
sale of futures contracts or options, purchase or sale of forward foreign currency contracts, and the writing of options on securities are not deemed to be an issuance of a senior security.
5. Except as otherwise permitted by the 1940 Act, or interpretations or modifications
by, or exemptive or other relief from, the SEC or other authority with appropriate jurisdiction, and disclosed to investors, the Fund may not purchase, hold or deal in real estate, but the Fund may purchase and sell
securities that are secured by real estate or issued by companies that invest or deal in real estate or REITs and may acquire and hold real estate or interests therein through exercising rights or remedies with regard to such securities.
6. Except as otherwise permitted by the 1940 Act, or interpretations or modifications by, or exemptive or other relief from, the SEC or other authority with appropriate jurisdiction, and disclosed to
investors, the Fund may not invest in physical commodities or physical commodities contracts, except that the Fund may purchase and sell options, forward contracts, futures contracts, including those related to
indices, and options on futures contracts or indices and enter into swap agreements and other derivative instruments.
7. Except as otherwise permitted by the 1940 Act, or interpretations or modifications by, or exemptive or other relief from, the SEC or other authority with appropriate jurisdiction, and disclosed to
investors, the Fund may not invest more than 25% of the value of its total assets in the securities of issuers in any single industry, except that this limitation will not be applicable to the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities or as otherwise permitted by the SEC.
Except in the case of the percentage limitation set forth in Investment Restriction No. 1 and as may be stated otherwise, the percentage limitations contained in the foregoing restrictions and in the Fund’s other investment policies apply at the time of the purchase of the securities and a later increase or decrease in percentage resulting from a change in the values of the securities or in the amount of the Fund’s assets will not constitute a violation of the restriction. With respect to the percentage limitation set forth in
Investment Restriction No. 1, however, if borrowings exceed
33 1∕3% of the value of the Fund’s total assets as a result of a change in values or assets, the Fund shall take steps to reduce such borrowings within
three days (not including Sundays and holidays) thereafter at least to the extent of such excess.
Portfolio Transactions
Decisions to buy and sell securities and other financial instruments for the Fund are made by Alger Management, which also is responsible for placing these transactions, subject to the overall review of the
Board. Although investment requirements for the Fund are reviewed independently from those of the other accounts or funds managed by Alger Management, investments of the type the Fund may make may also
be made by these other accounts or funds. When the Fund and one or more other funds or other accounts managed by Alger Management are prepared to invest in, or desire to
dispose of, the same security or other financial instrument, available investments or opportunities for sales will be allocated in a manner believed by Alger Management to be equitable to each. In some cases, this procedure may affect
adversely the price paid or received by the Fund or the size of the position obtained or disposed of by the Fund.
Transactions in equity securities are in most cases effected on U.S. and foreign stock exchanges or in over-the-counter markets and involve the payment of negotiated brokerage commissions. Where there is no
stated commission, as in the case of certain securities traded in the over-the-counter markets, the prices of those securities include undisclosed commissions or
mark-ups. Purchases and sales of money market instruments and debt securities usually are principal transactions. These securities are normally purchased directly from the issuer or from an underwriter or market maker for the securities. The cost of securities
purchased from underwriters includes an underwriting commission or concession and the prices at which securities are purchased from and sold to dealers include a dealer’s mark-up or mark-down. U.S.
Government securities are generally purchased from underwriters or dealers, although certain newly-issued U.S. Government securities may be purchased directly from the U.S. Treasury or from the issuing agency
or instrumentality.
In Alger Management’s view,
companies are organic entities that continuously undergo changes in response to, among other things, economic, market, environmental, technological, political and managerial factors. Generally, securities will be purchased for capital appreciation. As a result, the Fund may dispose of securities without regard to the time they have been held when such action, for defensive
or other purposes,
appears advisable. Moreover, it is Alger Management’s philosophy to pursue the Fund’s investment objective by managing the Fund actively, which may result in
high portfolio turnover. Increased portfolio turnover will have the effect of increasing the Fund’s brokerage and custodial expenses.
To the extent consistent with applicable provisions of the 1940 Act and the rules and exemptions adopted by the SEC thereunder, as well as other regulatory requirements, the Board has determined that
Fund portfolio transactions will generally be executed through Fred Alger & Company, LLC (“Alger LLC” or the “Distributor”), a registered broker-dealer, if, in the judgment of Alger Management, the use of Alger LLC is likely to result in price and execution at least as favorable as those of other qualified
broker-dealers and if, in particular transactions, Alger LLC charges the Fund involved a rate consistent with that which other broker-dealers charge to comparable unaffiliated customers in similar transactions.
Over-the-counter purchases and sales are transacted directly with principal market makers except in cases in which better prices and executions may be obtained elsewhere. Principal transactions are not entered
into with affiliates of the Fund except pursuant to exemptive rules or orders adopted by the SEC.
In selecting brokers or dealers to execute portfolio transactions on behalf
of the Fund, Alger Management seeks the best overall terms available. In assessing the best overall terms available for any transaction, Alger Management will consider the factors it deems relevant, including the breadth of the
market in the investment, the price of the investment, the financial condition and execution capability of the broker or dealer and the reasonableness of the commission, if any, for the specific transaction and on a continuing basis. In addition, Alger Management is authorized, in selecting parties to execute a particular transaction and in evaluating the best overall terms available, to consider the brokerage and research
services, as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934, as amended, provided to the Fund involved and/or other accounts over which Alger Management or its affiliates
exercise investment discretion to the extent permitted by law. Alger Management’s fees under its agreements with the Fund are not reduced by reason of its receiving brokerage and research services. The
Board will periodically review the commissions paid by the Fund to determine if the commissions paid over representative periods of time are reasonable in relation to the benefits inuring to the Fund. Neither Alger LLC nor its affiliates engage in principal transactions with the Fund and, accordingly, receive no
compensation in connection with securities purchased or sold in that manner, which include securities traded in the over-the-counter markets, money market investments and most debt securities.
As a newly formed fund, the Fund does not have any holdings in securities
of its regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act).
Disclosure of Portfolio Holdings
The Board has adopted policies and procedures relating to disclosure of the
Fund's 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 Fund.
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 Fund's shares and other parties which are not employed by the Manager or its affiliates except when the legitimate business purposes for selective disclosure and other conditions (designed to
protect the Fund) are acceptable.
The Fund makes its full holdings available semi-annually in shareholder reports filed on Form N-CSR and after the first and third fiscal quarters as an exhibit to their regulatory filings on Form N-PORT.
These shareholder reports and regulatory filings are filed with the SEC, as required by federal securities laws, and are generally available within sixty (60) days of the end of the Fund's fiscal quarter.
In addition, the Fund make publicly available its respective month-end top
10 holdings with a 10 day lag and its month-end full portfolios with a 60 day lag on its 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 received for the non-public disclosure of portfolio holdings information.
In accordance with the foregoing, the Fund provides 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. This agreement must be approved by the Fund's Chief Compliance Officer.
The Board periodically reviews a report disclosing the third parties to
whom the 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.
In addition to material the Fund routinely provide to shareholders, the
Manager may, upon request, 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 the Fund portfolio versus an index (such as P/E (or price to book) ratio), EPS forecasts, alpha, beta, capture ratio, standard deviation, Sharpe ratio, information ratio, and market cap analysis), security specific impact on overall portfolio
performance, return on equity statistics, geographic analysis, number of holdings, 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 Fund at (800) 992-3863 to obtain such information.
The Fund provides its portfolio holdings on a daily basis, with no lag, to each of Abel Noser, Bloomberg, Factset, Security Class Action Services, LLC, and William O’Neil + Co. Inc. The Fund has
ongoing arrangements to provide its portfolio holdings to Callan Associates, Epiq eDiscovery Solutions, Inc., Equest, eVestment Alliance, LLC, Fascet LLC, ICE Data Services, InsiderScore, Mercer Investment
Consulting, Morningstar, Oppenheimer, PSN, S&P Global Inc., RBC Capital Markets, Refinitiv US LLC, Renaissance Macro, Seismic, Synergy Capital Management, Vantagepoint Investment Management, Inc., and
Wilshire. Neither the Fund nor any other person is directly compensated for such disclosure, although certain persons receiving such disclosure may be investors in the
Fund and may therefore be subject to fees applicable to all shareholders. Alger Management also manages accounts for individuals and institutions. Holders of these accounts may own many of the same securities as the Fund, and therefore may be
generally aware of the portfolio holdings of the Fund.
Net Asset Value
The price of one share of a class is based on its “net asset value.” The net asset value is computed by adding the value of the Fund’s investments plus cash and other assets allocable to the class, deducting applicable liabilities and then dividing the result by the number of shares of the class outstanding. The net asset value of a share of a given class may differ from that of one or more other classes of the Fund. Net
asset value is calculated as of the close of business (normally 4:00 p.m. Eastern time) on each day the New York Stock Exchange (“NYSE”) is open.
Purchases of shares will be based upon the next net asset value calculated for each class after your order is received and accepted by the Transfer Agent or other designated intermediary. If your purchase is
made by check, wire or exchange and is received by the close of business of the NYSE (normally 4:00 p.m. Eastern time), your account will be credited on the day of receipt. If your purchase is received after such time, it will be credited the next business day.
The NYSE is generally open on each Monday through Friday, except New Year’s Day, Martin Luther King, Jr. Day (the third Monday in January), Presidents’ Day (the third Monday in February), Good
Friday, Memorial Day (the last Monday in May), Independence Day, Labor Day (the first Monday in September), Thanksgiving Day (the fourth Thursday in November) and Christmas Day.
The assets of the Fund are generally valued on the basis of market quotations. Securities for which such information is readily available are valued at the last reported sales price or, in the absence of
reported sales, at a price within the bid and asked price or the official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the absence
of a recent bid or asked price, the equivalent as obtained from one or more of the major market makers for the securities to be valued may be used. Other investments and other assets, including restricted
securities and securities for which market quotations are not readily available, are valued at fair value under procedures approved by the Board. Short-term securities with maturities of 60 days or less are
valued at amortized cost, as described below, which constitutes fair value as determined by the Board.
Securities in
which the Fund invests may be traded in markets that close before the close of the NYSE. Developments that occur between the close of these markets (generally foreign
markets) and the close of the NYSE (normally 4:00 p.m. Eastern time) may result in adjustments to the closing prices to reflect what the investment manager, pursuant to policies established by the Board, believes to be fair values of
these securities as of the close of the NYSE. The Fund may also fair value securities in other situations, for example, when a particular foreign market is closed but the Fund is open.
The valuation of money market instruments with maturities of 60 days or less held by the Fund is based on their amortized cost which does not take into account unrealized capital gains or losses.
Amortized cost valuation involves initially valuing an instrument at its cost and thereafter assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. Although this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the
price the Fund would receive if it sold the instrument.
Classes of Shares
The classes of shares offered by the Fund are listed on the cover page of this Statement of Additional Information. Class I, Class Y and Class Z Shares are generally offered only to institutional investors.
Class Z Shares may also be available on brokerage platforms of firms that have agreements with Alger LLC to offer such shares solely when acting as an agent for the investor. An investor transacting in Class
Z Shares in these programs may be required to pay a commission and/or other forms of compensation to the broker. Class A Shares are generally subject to a front-end load, and Class C Shares are generally
subject to a contingent deferred sales charge (“CDSC”). Class I, Class Y and Class Z Shares are not subject to a sales charge of any kind. Each of these classes of shares, other than Class Y and Class Z
shares, is subject to distribution and/or service fees.
From time to time, Alger LLC may reallow to brokers or financial
intermediaries all or substantially all of the initial sales charge on Class A shares. To the extent that it does so, such persons may be deemed to be underwriters of the Fund as defined in the Securities Act.
Current total return figures may be obtained by calling Alger Funds at (800) 992-3863 or on the Fund’s website at www.alger.com.
Conversion of Class C Shares
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 and will thereafter be subject to the lower Class A
distribution and/or service fees. The conversion will be calculated based on the NAV per share without the imposition of any sales charge, fee or other charge. At conversion, a proportionate amount of Class C
Shares representing reinvested dividends distributions will also be converted into Class A Shares.
Shareholders who purchase Class C Shares through certain Financial
Intermediaries, group retirement plan recordkeeping platforms or whose shares are held in an omnibus account may not be eligible to participate in such Class C Share conversions. Contact your Financial Intermediary or plan recordkeeper
for eligibility information. See Appendix A to the Fund’s Class C Shares prospectus for further details.
Purchases
Shares of the Fund are offered continuously by the Trust and are distributed on a best efforts basis by Alger LLC as principal underwriter for the Fund pursuant to a distribution agreement (the “Distribution Agreement”). Under the Distribution Agreement, Alger LLC bears all selling expenses, including the costs of advertising and of printing prospectuses and distributing them to prospective shareholders.
The Fund does not accept cash or cash equivalents for share purchases.
Third-party checks will not be honored except in the case of employer-sponsored retirement plans. You will be charged a fee for any check returned by your bank. Purchases made through ACH (Automated clearing house) are subject to a
maximum limit of $50,000.
Orders received by the Trust’s transfer agent or other designated intermediary are effected on days on which the NYSE is open for trading. For orders received before the close of regular trading on the NYSE,
purchases and redemptions of the shares of the Fund are effected at the respective net asset values per share determined as of the close of regular trading on the NYSE on that same day. Orders received after
the close of regular
trading on the NYSE are effected at the next calculated net asset value. See “Net Asset Value.” All orders for the purchase of shares are subject to
acceptance or rejection by the Trust. Payment for redemptions will be made by the Trust’s transfer agent on behalf of the Trust and the Fund within seven days after the request is received.
Investors may exchange stock of companies acceptable to Alger Management for shares of the Fund with a minimum of 100 shares of each company generally being required. The Trust believes such exchange
provides a means by which holders of certain securities may invest in the Fund without the expense of selling the securities in the open market. The investor should
furnish, either in writing or by telephone, to Alger Management a list with a full and exact description of all securities proposed for exchange. Alger Management will then notify the investor as to whether the securities are acceptable and,
if so, will send a letter of transmittal to be completed and signed by the investor. Alger Management has the right to reject all or any part of the securities offered for exchange. The securities must then be sent in proper form for transfer with the letter of transmittal to the Custodian of the Fund’s assets. The investor must certify that there are no legal or contractual restrictions on the free transfer and sale of the securities. Upon receipt by the Custodian, the securities will be valued as of the close of business on the day of
receipt in the same manner as the Fund’s securities are valued each day. Shares of the Fund having an equal net asset value as of the close of the same day will be registered in the investor’s name. Applicable sales charges, if any, will apply, but there is no charge for making the exchange and no brokerage
commission on the securities accepted, although applicable stock transfer taxes, if any, may be deducted. The exchange of securities by the investor pursuant to this offer may constitute a taxable transaction and
may result in a gain or loss for federal income tax purposes. The tax treatment experienced by investors may vary depending upon individual circumstances. Each investor should consult a tax adviser to
determine federal, state and local tax consequences.
Confirmations and Account Statements
All of your transactions through the Transfer Agent, UMB Fund Services, Inc., will be confirmed on separate written transaction confirmations (other than Automatic Investment Plan transactions) and on
periodic account statements. You should promptly and carefully review the transaction confirmations and periodic statements provided to you and notify the Transfer Agent in writing of any discrepancy or
unauthorized account activity. Any information contained on transaction confirmations and account statements will be conclusive unless you notify the Transfer Agent of an apparent discrepancy or
unauthorized account activity within ten (10) business days after the information is transmitted to you.
Distribution Plans
As stated in the Prospectuses, in connection with the distribution and
shareholder servicing activities of Alger LLC in respect of the Fund’s Class A, C and I Shares, respectively, the Trust has adopted plans (each a “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Class C Plan, a portion of the distribution fee paid to Alger LLC by the Trust under the Plan, sometimes described as an “asset-based sales charge,” allows investors to buy shares with little or no initial sales charge while allowing Alger LLC to compensate dealers that sell Class C shares of the Fund. Typically, Alger LLC, in its discretion or
pursuant to dealer agreements, pays sales commissions of up to 1% of the amount invested in Class C Shares, and pays the asset-based sales charge as an ongoing commission to dealers on Class C Shares that
have been outstanding for more than a year. For Class C Shares, the asset-based sales charge is retained by Alger LLC in the first year after purchase; in subsequent years, all or a portion of it typically is paid to the dealers who sold the Class C Shares. In some cases, the selling dealer is Alger LLC.
Each Plan authorizes the Trust to pay Alger LLC, on behalf of the Fund, a
shareholder servicing fee computed at an annual rate of up to 0.25% of the average daily net assets allocable to the Class A, Class C and Class I Shares, as the case may be, of the Fund, and such fee shall be charged only to that class. The shareholder servicing fee is used by Alger LLC to provide compensation for ongoing servicing and/or
maintenance of shareholder accounts and to cover an allocable portion of overhead and other Alger LLC and selected dealer office expenses related to the servicing and/or maintenance of shareholder accounts.
Compensation will be paid by Alger LLC to persons, including Alger LLC employees, who respond to inquiries of shareholders of the Fund regarding their ownership of shares or their accounts with the Fund
or who provide other similar services not otherwise required to be provided by the Fund’s Manager, Transfer Agent or other agent of the Fund.
Pursuant to the Plan for Class C Shares, the Fund pays an annual fee of 1.00% of its Class C Shares’ average daily net assets to Alger LLC. In addition to the 0.25% shareholder servicing fee, Alger LLC is
paid a 0.75% fee for providing distribution services including, but not limited to, organizing and
conducting sales
seminars, advertising programs, payment of finders’ fees, printing of prospectuses and SAIs and reports for potential investors, preparation and distribution of
advertising material and sales literature, overhead, supplemental payments to dealers and other institutions as asset-based charges or as payments of commissions, and the costs of administering the Plan.
The Fund has not paid Alger LLC for distribution services and/or shareholder servicing under the provisions of the respective Class Plans because the Fund is not yet in operation.
Alger LLC has acknowledged that payments under the Plans are subject to the approval of the Board and that no Fund is contractually obligated to make payments in any amount or at any time, including
payments in reimbursement of Alger LLC for expenses and interest thereon incurred in a prior year.
Under their terms, the Plans remain in effect from year to year, provided
such continuation is approved in each case annually by vote of the Board, including a majority of the Independent Trustees and a majority of the Trustees who have no direct or indirect financial interest in the operation of the
Plan. A Plan may not be amended to increase materially the amount to be spent for the services provided by Alger LLC without the approval of shareholders of the applicable class, and all material amendments
of a Plan must be approved by the Trustees in the manner described above. A Plan may be terminated at any time, without penalty, by vote of a majority of the Independent Trustees or, with respect to the class
of shares of the Fund to which a Plan relates, by a vote of a majority of the outstanding voting securities of the class, on not more than 30 days’ written notice to any other party to the Plan. Alger LLC provides to the Board quarterly reports of amounts expended under each Plan and the purpose for which such
expenditures were made.
Alger LLC does not have any selling expenses with respect to the Fund because the Fund is not yet in operation.
Expenses of the Fund
Subject to any expense limitations described in the Fund’s Prospectuses, the Fund will bear its own expenses. Operating expenses for the Fund generally consist of all costs not specifically borne by Alger
Management, including investment management fees, fees for necessary professional and brokerage services, costs of regulatory compliance and costs associated with maintaining legal existence and
shareholder relations. In addition, Class A, Class C, and Class I Shares of the Fund may pay Alger LLC for expenses incurred in distributing shares of that class and Class A, Class C, and Class I Shares of the
Fund may compensate Alger LLC for servicing shareholder accounts. Trustwide expenses not identifiable to any particular fund or class will be allocated in a manner deemed fair and equitable by the Board.
From time to time, Alger Management, in its sole discretion and as it deems appropriate, may assume certain expenses of the Fund while retaining the ability to be paid by the Fund for such amounts prior to
the end of the fiscal year. This will have the effect of lowering the Fund’s overall expense ratio and of increasing yield to investors, or the converse, at the time such amounts are assumed or reimbursed, as the
case may be.
Purchases Through Processing Organizations
You can purchase and redeem shares through a “Processing Organization,” which is a broker-dealer, bank or other financial institution that purchases shares of the Fund for its clients or customers. The Trust may authorize a Processing Organization to receive, or to designate other financial organizations to
receive, purchase and redemption orders on the Fund’s behalf. In that case, the Fund will be deemed to have received an order when the Processing Organization or its intermediary receives it in good order, and
the order will be processed based on the net asset value of the Fund next calculated after the order is received in proper form by the Processing Organization or its designee.
When shares are purchased this way, the Processing Organization, rather than its customer, may be the shareholder of record of the shares. The minimum initial and subsequent investments in classes of the
Fund for shareholders who invest through a Processing Organization will generally be set by the Processing Organization. Processing Organizations may impose charges and restrictions in addition to or
different from those applicable if you invest in the Fund directly. Therefore, you should read the materials provided by the Processing Organization in conjunction with the Prospectus. Certain Processing
Organizations may receive compensation from the Fund, Alger LLC, or any of its affiliates.
Automatic
Investment Plan (Class A and C)
While there is no charge to
shareholders for this service, a fee will be deducted from a shareholder’s Fund account in the case of insufficient funds. A shareholder’s Automatic
Investment Plan may be terminated at any time without charge or penalty by the shareholder, the Trust, the Transfer Agent or Alger LLC. Transfers from your bank account to a Trust-sponsored retirement account are considered
current-year contributions. If the day of the month you select falls on a weekend or a NYSE holiday, the purchase will be made on the next business day. Class A Share purchases will remain subject to the initial
sales charge.
Right of Accumulation (Class A)
Class A Shares of the Fund may be purchased by “any person” (which includes an individual, his or her spouse or domestic partner and children under the age of 21, or a trustee or other fiduciary of a single trust, estate or single fiduciary account) at a reduced sales charge as determined by aggregating the dollar amount of the new purchase and the current value (at offering price) of all Class A, Class B, and/or Class
C Shares of The Alger Family of Funds then held by such person and applying the sales charge applicable to such aggregate. In order to obtain such discount, the purchaser must provide sufficient information at
the time of purchase to permit verification that the purchase qualifies for the reduced sales charge. The right of accumulation is subject to modification or discontinuance at any time with respect to all shares
purchased thereafter.
Letter of Intent (Class A)
A Letter of Intent (“LOI”) contemplating aggregate purchases of $25,000 or more provides an opportunity for an investor to obtain a reduced Class A sales charge by aggregating investments over a
13-month period, provided that the investor refers to such LOI when placing orders. For purposes of a LOI, the “Purchase Amount” as referred to in the sales charge table in the Prospectus includes purchases by “any person” (as defined above) of all Class A, Class B, and/or Class C Shares of The Alger Family of Funds over the following 13 months. An alternative is to compute the 13-month period starting up to 90
days before the date of execution of the LOI.
Purchases made by reinvestment of dividends or distributions of capital gains do not count towards satisfying the amount of the LOI. It is the responsibility of the dealer of record and/or the investor to
advise the Distributor about the LOI when placing any purchase orders for the investor during the LOI period. Death or disability of the shareholder will not terminate the LOI.
The minimum initial investment under the LOI is 5% of the total LOI amount. Each investment in Class A Shares made during the period receives the reduced sales charge applicable to the total amount of
the investment goal. Shares purchased with the first 5% of the total LOI amount will be held in escrow by the Transfer Agent to assure any necessary payment of a higher applicable sales charge if the investment
goal is not met. If the goal is not achieved within the period, the investor must pay the difference between the sales charges applicable to the purchases made and the charges previously paid, or an appropriate
number of escrowed shares will be redeemed.
Redemptions
The right of redemption of shares of the Fund may be suspended or the date of payment postponed for more than seven days (a) for any periods during which the NYSE is closed (other than for customary
weekend and holiday closings), (b) when trading in the markets the Fund normally utilizes is restricted, or an emergency, as defined by the rules and regulations of the SEC, exists, making disposal of the Fund’s investments or determination of its net asset values not reasonably practicable or (c) for such other
periods as the SEC by order may permit for protection of the Fund’s shareholders.
No interest will accrue on amounts represented by uncashed distribution or
redemption checks.
Telephone Redemptions
You automatically have the ability to make redemptions by telephone unless
you refuse the telephone redemption privilege. To sell shares by telephone, please call (800) 992-3863. Redemption requests received prior to the close of business of the NYSE (normally 4:00 p.m. Eastern time) will generally be
mailed on the next business day. Shares issued in certificate form are not eligible for this service.
Redemption
proceeds are mailed to the address of record. Any request for redemption proceeds to be sent to the address of record must be in writing with the signature(s) guaranteed
if made within 30 days of changing your address.
The Trust, the Transfer Agent and their affiliates are not liable for acting in good faith on telephone instructions relating to your account, so long as they follow reasonable procedures to determine that the
telephone instructions are genuine. Such procedures may include recording the telephone calls and requiring some form of personal identification. You should verify the accuracy of telephone transactions
immediately upon receipt of your confirmation statement.
Redemptions in Kind
Payment for shares tendered for redemption is ordinarily made in cash. However, the Board has adopted procedures which provide that if the Board determines that it would be detrimental to the best
interest of the remaining shareholders of the Fund to make payment of a redemption order wholly in cash, the Fund may pay the redemption proceeds in whole or in part by a distribution “in kind” of securities from the Fund, in lieu of cash, in conformity with applicable rules of the SEC. The Trust has elected to be governed by Rule 18f-1 under the 1940 Act, pursuant to which the Fund is obligated to redeem shares
solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period for any one shareholder. If shares are redeemed in kind, the redeeming shareholder might incur brokerage
or other costs in selling the securities for cash. The method of valuing securities for the purposes of making in-kind redemptions will be the same as the method the Fund generally uses to value its portfolio
securities and such valuation will be made as of the time the redemption price is determined. If the Fund pays large redemptions in cash, these transactions may increase the Fund’s transaction costs and detract from the Fund’s performance. Large purchases pose similar risks.
Contingent Deferred Sales Charge (Class A and C)
Certain Class A Shares are subject to a CDSC. Class A Shares (as well as when combined with all other Class A Shares of The Alger Family of Funds) purchased in an amount of $1 million or more which
have not been subject to the class’s initial sales charge and which have not been held for a full year may be subject to a CDSC of 1% at the time of redemption.
Class C Shares are subject to a CDSC of 1% if redeemed within one year of purchase.
For purposes of the CDSC, it is assumed that the shares of the Fund from
which the redemption is made are the shares of that Fund which result in the lowest charge, if any.
Redemptions of shares of the Fund are deemed to be made first from amounts,
if any, to which a CDSC does not apply. There is no CDSC on redemptions of (i) amounts that represent appreciation on your original investment, or (ii) shares purchased through reinvestment of dividends and capital gains.
Waivers of Sales Charges (Class A and C)
No initial sales charge is imposed on purchases of Class A Shares, and no
CDSC is imposed on redemptions of Class A and C Shares by:
•
employees of the Distributor and its affiliates,
•
Individual Retirement Accounts (“IRAs”), Keogh Plans and employee
benefit plans for those employees and
•
spouses, children, siblings and parents of those employees and trusts of which those
individuals are beneficiaries, as long as orders for the shares on behalf of those individuals and trusts were placed by the employees;
•
accounts managed by the Manager,
•
employees, participants and beneficiaries of those accounts,
•
IRAs, Keogh Plans and employee benefit plans for those employees, participants and
beneficiaries and
•
spouses and minor children of those employees, participants and beneficiaries as
long as orders for the shares were placed by the employees, participants and beneficiaries;
•
directors or trustees of any investment company for which the Distributor or any of
its affiliates serves as investment adviser or distributor;
•
employee benefit or retirement plans or charitable accounts, including, but not
limited to, Individual Retirement Accounts, Keogh Plans, 401(k) plans, profit-sharing pension plans, defined benefit plans, Taft-Hartley multiemployer pension plans, 457 plans, 403(b) plans, non-qualified deferred
compensation plans, and other defined contribution plans subject to the Employee Retirement Income Security Act of 1974, as amended, other than employee benefit or
retirement plans or charitable accounts that purchase Class A Shares through brokerage relationships in which sales charges are customarily imposed;
•
an investment company registered under the Investment Company Act of 1940, as
amended, in connection with the combination of the investment company with the Fund by merger, acquisition of assets or by any other transaction;
•
registered investment advisers for their own accounts;
•
certain registered investment advisers, banks, trust companies and other financial
institutions (including broker-dealers) that have an agreement in place with the Distributor (see Appendix A — Waivers and Discounts Available from Intermediaries in the Prospectus for a list of such
entities), as long as the orders for the shares were placed on behalf of their clients;
•
certain financial intermediaries offering self-directed investment brokerage
accounts that have an agreement in place with the Distributor (see Appendix A — Waivers and Discounts Available from Intermediaries in the Prospectus for a list of such entities);
•
a financial institution as shareholder of record on behalf of:
•
investment advisers or financial planners trading for their own accounts or the
accounts of their clients, and who charge a separate fee for their services, and
•
clients of such investment advisers or financial planners trading for their own
accounts if the accounts are linked to the master account of such investment adviser or financial planner on the books and records of the financial institution;
•
a financial institution as shareholder of record on behalf of retirement and
deferred compensation plans and trusts used to fund those plans;
•
registered representatives of broker-dealers that have an agreement in place with
the Distributor, for their own accounts and their spouses, children, siblings and parents;
•
children or spouses of individuals who died in the terrorist attacks of September
11, 2001 made directly at the Fund;
•
shareholders of Alger Global Focus Fund as of January 21, 2005 purchasing Class A
Shares directly from the Fund for their existing accounts;
•
investors purchasing Class A Shares of the Alger Family of Funds when
those purchases are made directly from the Fund (including shareholders of Class N Shares as of September 23, 2008); and
•
investors purchasing Class A Shares directly from the Fund which, when combined with
current holdings of Class A Shares of the Alger Family of Funds offered with a sales charge, equal or exceed $1,000,000 in the aggregate, when such Class A Shares are redeemed within 12 months of
purchase.
Investors purchasing Class A Shares who may be entitled to one of the foregoing waivers should consult with their financial advisers as to their eligibility, and are required to claim and substantiate their eligibility for the waiver at the time of purchase. It is also the responsibility of shareholders redeeming shares otherwise subject to a CDSC but qualifying for a waiver of the charge to assert this status at the
time of redemption. The Distributor has no information regarding the nature of the underlying
shareholders in an omnibus account (in which shares are held in the name of an intermediary on behalf of multiple beneficial owners, a common form of holding shares among retirement plans and financial
intermediaries such as brokers, advisers and third-party administrators) it cannot aid in the substantiation of any such claims for waivers. Information regarding these procedures is available by contacting the
Fund at (800) 992-3863.
Certain Waivers of the Contingent Deferred Sales Charge (Class A and C)
Any CDSC which otherwise would be imposed on redemptions of Fund shares
will be waived with respect to (a) redemptions of shares held at the time a shareholder becomes disabled or dies, including the shares of a shareholder who owns the shares with his or her spouse as joint tenants with right of
survivorship, provided that the redemption is requested within one year after the death or initial determination of disability, (b) redemptions in connection with the following retirement plan
distributions: (i) lump-sum or other distributions from a qualified corporate or Keogh retirement plan following retirement, termination of employment, death or disability (or in the case of a five percent
owner of the employer maintaining the plan, following attainment of age 70½); (ii) required distributions from an Individual Retirement Account (“IRA”) following the attainment of age 70½ or from a custodial account under Section 403(b)(7) of the Internal Revenue Code of 1986, as amended, following the later of
retirement or attainment of age 70½; and (iii) a tax-free return of an excess contribution to an IRA, (c) systematic withdrawal payments, and (d) redemptions by the Trust of Fund shares whose value has fallen
below the minimum initial investment amount. For purposes of the waiver described in (a) above, a person will be deemed “disabled” if the person is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in
death or to be of long-continued and indefinite duration.
Shareholders claiming a waiver must assert their status at the time of redemption.
Systematic Withdrawal Plan (Class A and C)
A systematic withdrawal plan (the “Withdrawal Plan”) is
available to shareholders who own shares of the Fund with a value exceeding $10,000 and who wish to receive specific amounts of cash periodically. Withdrawals of at least $50 monthly (but no more than one percent of the value of a
shareholder’s shares in the Fund) may be made under the Withdrawal Plan by redeeming as many shares of the Fund as may be necessary to cover the stipulated withdrawal payment. To the extent that
withdrawals exceed dividends, distributions and appreciation of a shareholder’s investment in the Fund, there will be a reduction in the value of the shareholder’s investment and continued withdrawal payments may reduce the shareholder’s investment and ultimately exhaust it. Withdrawal payments should not be
considered as income from investment in the Fund.
Shareholders who wish to participate in the Withdrawal Plan and who hold their shares in certificated form must deposit their share certificates of the Fund from which withdrawals will be made with the
Transfer Agent, as agent for Withdrawal Plan members. All dividends and distributions on shares in the Withdrawal Plan are automatically reinvested at net asset value in additional shares of the Fund involved.
For additional information regarding the Withdrawal Plan, contact the Fund.
Signature Guarantees
The Transfer Agent has adopted standards and procedures pursuant to which
Medallion Signature Guarantees in proper form generally will be accepted from domestic banks, brokers, dealers, credit unions, and national securities exchanges, that are participants in the New York Stock Exchange
Medallion Signature Program (MSP), the Securities Transfer Agents Medallion Program (STAMP), and the Stock Exchanges Medallion Program (SEMP).
Exchanges and Conversions
Except as noted below, shareholders may exchange some or all of their Fund shares for shares of the same class of another fund in The Alger Family of Funds. One class of shares may not be exchanged for
another class of shares, except that in limited circumstances certain accounts will be permitted an exchange from one class to another, including, but not limited to, from Class A Shares to Class I or Class
Z Shares, or from Class C Shares to Class A, Class I, or Class Z Shares. Once an initial sales charge has been imposed on a purchase of Class A Shares, no additional charge is imposed in connection with their
exchange. For example, a purchase of Class A Shares of the Fund and subsequent exchange to Class A Shares of any other fund in the Alger Fund Complex would not result in the imposition of an initial sales
charge at the time of exchange. No CDSC is assessed in connection with exchanges of the same class; however, the original CDSC holding period will carry over to the acquired shares.
An exchange from one Fund to another Fund is generally a taxable event, and may generate
capital gains or losses for federal income tax purposes. The exchange of shares of one class of the Fund into shares of another class of the same Fund, however, is generally not taxable for federal income tax
purposes and no gain or loss will be reported on the transaction. Shareholders are advised to consult with their own tax advisers with respect to the particular tax consequences of an exchange.
For purposes of calculating the eight-year holding periods for automatic
conversion of Class B Shares to Class A Shares, shares acquired in an exchange are deemed to have been purchased on the date on which the shares given in exchange were purchased.
You automatically have the ability to make exchanges by telephone unless you refuse the telephone exchange privilege. Exchanges can be made among Funds of the same class of shares for identically
registered accounts. For tax purposes, an exchange of shares is treated as a sale of the shares exchanged and, therefore, you may realize a taxable gain or loss when you exchange shares.
The Trust reserves the right to terminate or modify the exchange privilege upon notice to shareholders.
Management
Trustees and Officers of the Trust
The Trust is governed by the Board which is responsible for protecting the interests of shareholders under Massachusetts law.
The Board has two standing committees: an Audit Committee and a Nominating Committee. The Audit Committee oversees (a) the Fund’s accounting and financial reporting policies and practices and its internal controls and (b) the quality and objectivity of the Fund’s financial statements and the independent audit thereof. The members of the Audit Committee are Stephen E. O’Neil, Nathan E. Saint-Amand and
Charles F. Baird, Jr. The Audit Committee met [_] times during the Trust’s last fiscal year. The function of the Nominating Committee is, among other things, to select and nominate all candidates for election as
Independent Trustees to the Board. The Nominating Committee, which met [_] times during the Trust’s last fiscal year, is composed of all the Independent Trustees.
While the Nominating Committee expects to be able to identify a sufficient number of qualified candidates on its own, it will consider nominations from shareholders that are submitted in writing to the
Secretary of the Trust, c/o Fred Alger Management, LLC, 360 Park Avenue South, New York, New York 10010. Any submission should include the following information as to each individual proposed for
election or re-election as Trustee: the name, age, business address, residence address and principal occupation or employment of such individual, the class, series and number of shares of stock of the Fund
that are beneficially owned by such individual, the date such shares were acquired and the investment intent of such acquisition, whether such shareholder believes such individual is, or is not, an “interested person” (as defined in the 1940 Act) of the Trust, and information regarding such individual that is
sufficient, in the discretion of the Nominating Committee, to make such determination, and all other information relating to such individual that is required to be disclosed in a solicitation of proxies for
election of Trustees of a registered investment company in an election contest pursuant to Regulation 14A under the Securities Exchange Act (including such individual’s written consent to being named in a proxy statement as a nominee and to serving as a Trustee (if elected)). Any such submission must also be
submitted by such date and contain such information as may be specified in the Trust’s By-laws.
Board’s Risk Oversight Role
Risk oversight is part of the Board’s general oversight of the Trust.
As is the case with virtually all investment companies (as distinguished from operating companies), service providers to the Trust, primarily the Manager, have responsibility for the day-to-day management of the Fund, which includes
responsibility for risk management (including management of investment performance and investment risk, valuation risk, liquidity risk, issuer and counterparty credit risk, compliance risk and operational
risk). As part of its oversight, the Board, acting at its scheduled meetings, regularly interacts with and receives reports from senior personnel of service providers, including the Manager’s Chief Investment Officer (or a senior representative of his office) and portfolio management personnel, which include
reports on the investment performance of the Fund. In accordance with Rule 22e-4 under the 1940 Act, the Board approved a liquidity risk management program (the “LRMP”), which provides the framework for evaluating the liquidity of the Fund’s investments. The Board, including a majority of the Independent
Trustees, appointed
the Manager as the administrator of the LRMP, and reviews, no less frequently than annually, a written report prepared by the Manager as the administrator of the
LRMP that addresses the operation of the program and assesses its adequacy and effectiveness of implementation. The Board also receives regular liquidity reports. The Board receives regular compliance reports prepared by the Trust’s and the Manager’s Chief Compliance Officer and meets regularly with the Chief Compliance Officer to
discuss various compliance matters, including compliance risks. In accordance with SEC rules, the Independent Trustees meet regularly in executive session with the Trust’s and the Manager’s Chief Compliance Officer, and the Chief Compliance Officer prepares and presents an annual written compliance
report to the Board. The Board’s Audit Committee (which consists of three Independent Trustees) meets during its scheduled meetings, and between meetings the Audit
Committee chair maintains contact with the Trust’s independent registered public accounting firm and the Trust’s Chief Financial Officer.
The Board also receives periodic presentations from senior personnel of the Manager regarding risk management generally, as well as periodic presentations regarding specific operational, compliance or
investment areas such as business continuity, anti-money laundering, personal trading, valuation (including information with respect to any fair valued securities), credit, investment research and
securities lending. The Board also may receive special reports or presentations on a variety of risk matters, either upon the Board’s request or upon the initiative of the Manager. The Board receives reports from counsel to the Trust or counsel to the Manager and the Board’s own independent legal counsel regarding regulatory compliance and governance matters. The Board’s oversight role does not make the Board a
guarantor of the Fund's investment activities.
Board Composition and Leadership Structure
The 1940 Act requires that at least 40% of the Trust’s trustees be Independent Trustees and as such not be affiliated with the Manager. To rely on certain exemptive rules under the 1940 Act, a majority of
the Trust’s trustees must be Independent Trustees, and for certain important matters, such as the approval of investment advisory agreements or transactions with affiliates, the 1940 Act or the rules thereunder
require the approval of a majority of the Independent Trustees. Currently, 83% of the Trust’s Trustees, including the Chairman of the Board, are Independent Trustees. The Chairman of the Board chairs Board
meetings and executive sessions of the Independent Trustees, reviews and comments on Board meeting agendas, represents the views of the Independent Trustees to management and facilitates communication
among the Independent Trustees and their counsel. The Board has determined that its leadership structure, in which the Chairman of the Board is not affiliated with the Manager, is appropriate in light of the services that the Manager provides to the Trust and potential conflicts of interest that could arise from this relationship.
Trustees of the Trust, together with information as to their positions with the Trust, and principal occupations, are shown below.
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
Portfolios in the Alger
Fund Complex(3)
which are Overseen by
Trustee |
Other
Directorships Held by Trustee During Past
Five Years |
|
|
|
|
|
|
|
Non-profit Fundraising Consultant since 2015, Schultz & Williams; Emeritus Trustee since 2020 and Trustee from 2013 to 2020, Pennsylvania Ballet; School Committee Member since 2017, Germantown Friends School. |
|
Board of Directors, Alger
Associates, Inc.; Director
of Target Margin Theater |
|
|
|
|
|
Charles F. Baird, Jr. (1953) |
|
Managing Director of North Castle Partners (private equity securities group). |
|
|
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
Portfolios in the Alger
Fund Complex(3)
which are Overseen by
Trustee |
Other
Directorships Held by Trustee During Past
Five Years |
|
|
Retired; Associate Vice President for Development Strategy from 2020 to 2021 and Associate Vice President for Principal Gifts from 2008 to 2020, Harvard University. |
|
Board of Directors, Alger
SICAV Fund |
|
|
|
|
|
|
|
Associate Professor of Law since August 2000, Zicklin School of Business, Baruch College, City University of New York. |
|
|
Nathan E. Saint-Amand M.D.
(1938) |
|
Medical doctor in private practice since 1970; Member of the Board of the Manhattan Institute (non-profit policy research) since 1988. |
|
|
(1)
The address of each Trustee is c/o Fred Alger Management, LLC, 360 Park Avenue South, New
York, NY 10010.
(2)
Ms. Alger is an “interested person” (as defined in the 1940 Act) of the Fund by virtue of her ownership control of Alger Associates, Inc. (“Alger Associates”), which 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. 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.
Information About Each Trustee’s Experience, Qualifications,
Attributes or Skills
The Board believes that the significance
of each Trustee’s experience, qualifications, attributes or skills is an individual matter (meaning that experience that is important for one Trustee may not have
the same value for another) and that these factors are best evaluated at the board level, with no single Trustee, or particular factor, being indicative of board effectiveness. However, the Board believes that Trustees need
to have the skills, experience and judgment necessary to address the issues directors of investment companies confront in fulfilling their duties to fund shareholders. These skills include the ability to
critically review, evaluate, question and discuss information provided to them, and to interact effectively with Trust management, service providers and counsel, in order to exercise effective business judgment in
the performance of their duties; the Board believes that its members satisfy this standard. Experience relevant to having this ability may be achieved through a Trustee’s educational background; business, professional training or practice (e.g., medicine or law), public service or academic positions; experience from service as a board member
(including the Board of the Trust) or as an executive of investment funds, public companies or significant private or not-for-profit entities or other organizations;
and/or other life experiences. To assist them in evaluating matters under federal and state law, the Trustees are counseled by their own independent legal counsel, who participates in Board meetings and interacts with the
Manager, and also may benefit from information provided by the Trust’s or the Manager’s counsel; both Board and Trust counsel have significant experience advising funds and fund board members. The Board and
its committees have the ability to engage other experts as appropriate. The Board evaluates its performance on an annual basis.
Each Trustee has been a Board member of the Alger Fund Complex mutual funds
since at least 2007. In addition, the following are among some of the specific experiences, qualifications, attributes or skills that each Trustee possesses (this supplements information provided in the table above), which the Board
believes help the Trustees to exercise effective business judgment.
•
Hilary M. Alger — In addition to her tenure as a Board member of all of the
Alger Fund Complex mutual funds (some since 2003), Ms. Alger has over 25 years experience in development for non- profit entities, and prior to that, worked as a securities analyst at Alger Management. Ms. Alger owns
securities issued by, and serves on the Board of Directors of, Alger Associates.
•
Charles F. Baird, Jr. — In addition to his tenure as a Board member of all of
the Alger Fund
Complex mutual funds (some since 2000), and his service on the Audit Committee of the Trust, Mr. Baird has over 35 years experience as a business entrepreneur, primarily focusing on private equity
securities. His extensive experience in the investment business provides in-depth knowledge of industry practices and standards.
•
Roger P. Cheever — Mr. Cheever has been the Chairman of the Board of all of
the Alger Fund Complex mutual funds since 2007, and has been a Board member of some since 2000. Mr. Cheever has over 35 years of experience in the development and management of non-profit
entities.
•
Stephen E. O’Neil — In addition to his tenure as a Board member of all
of the Alger Fund Complex mutual funds (some since 1973), and his service as Chairman of the Audit Committee of the Trust, Mr. O’Neil has over 45 years experience as a lawyer and private investor.
•
David Rosenberg — In addition to his tenure as a Board member of all of the
Alger Fund Complex mutual funds since 2007, Mr. Rosenberg has 20 years of experience as a professor of business law.
•
Nathan E. Saint-Amand, M.D. — In addition to his tenure as a Board member of
all of the Alger Fund Complex mutual funds (some since 1986), Dr. Saint-Amand has been a medical doctor for over 45 years and has served on the boards of several non-profit entities.
Officers of the Trust, with information regarding their positions with the
Trust and principal occupations, are shown below.
Name, (Year of Birth), Position with Trust and
Address(1) |
|
|
|
|
|
Hal Liebes (1964)
President,
Principal Executive Officer |
Executive Vice President, Chief Operating Officer (“COO”) and Secretary, Alger
Management; COO and Secretary, Alger Associates, Inc. and Alger
Alternative Holdings, LLC; Director, Alger SICAV, Alger
International Holdings, and Alger Dynamic Return Offshore
Fund; Vice President, COO, Member, and Secretary, Alger Capital, LLC and Alger Group Holdings, LLC; Executive Director and Chairman, Alger Management, Ltd.;
Manager and Secretary, Weatherbie Capital, LLC and Alger Apple Real Estate
LLC; Manager, Alger Partners Investors I, LLC and Alger
Partners Investors KEIGF; Secretary, Alger-Weatherbie
Holdings, LLC and Alger Boulder I LLC; and Director and Secretary, The Foundation for Alger Families. |
|
Tina Payne (1974)
Secretary,
Chief Compliance Officer, Chief Legal Officer |
Since 2017, Senior Vice President, General Counsel, and Chief Compliance Officer
(“CCO”), Alger Management; Senior Vice President, General
Counsel, and Secretary, Alger LLC; CCO, Alger Management,
Ltd.; Assistant Secretary, Weatherbie Capital, LLC and Alger
Alternative Holdings, LLC; and since 2019, Assistant Secretary, Alger-Weatherbie Holdings, LLC. Formerly, Senior Vice President and Associate General Counsel, Cohen &
Steers Capital Management, from 2007 to 2017. |
|
Michael D. Martins (1965)
Treasurer,
Principal Financial Officer |
Senior Vice President, Alger Management. |
|
Anthony S. Caputo (1955)
Assistant Treasurer |
Vice President, Alger Management. |
|
Sergio M. Pavone (1961)
Assistant Treasurer |
Vice President, Alger Management. |
|
Mia G. Pillinger (1989)
Assistant Secretary |
Associate Counsel of Alger Management since 2020. Formerly, Associate at Willkie Farr &
Gallagher, LLP, from 2016 to 2020. |
|
Sushmita Sahu (1981)
AML Compliance Officer |
Vice President, Alger Management. |
|
(1)
The address of each officer is c/o Fred Alger Management, LLC, 360 Park Avenue South, New
York, NY 10010.
(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.
No director, officer or employee of Alger Management or its
affiliates receives any compensation from the Trust for serving as an officer or Trustee of the Trust. Effective January 1, 2021, each Independent Trustee receives a fee of $142,000 per annum, paid pro rata by each fund in the Alger Fund
Complex, plus travel
expenses incurred for attending meetings. The Independent Trustee appointed as Chairman of the Board receives an additional compensation of $20,000 per annum paid pro
rata 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 by each fund in the Alger Fund Complex.
The Trustees and officers of the Trust are permitted to purchase shares of
the Fund without the payment of any sales charge. Applicable sales charges are waived for these individuals because no selling effort by the Distributor is involved and in order to promote the alignment of such individuals’ economic interests with the Trust.
The Trust did not offer its Trustees any pension or retirement benefits during or prior to the fiscal year ended October 31, 2021. The following table provides compensation amounts paid to the current
Independent Trustees of the Trust for the fiscal year ended October 31, 2021.
Compensation Table
|
Aggregate Compensation from
the Trust |
Total Compensation Paid to
Trustee from The Alger Fund Complex* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* During the year ended October 31, 2021, each Trustee served on the board of six investment companies that comprised the Alger Fund Complex. The following table shows each current Trustee’s beneficial ownership as of December 31, 2020, by dollar range, of equity securities of the Fund and of all of the funds in the Alger Fund Complex overseen
by that Trustee. The ranges are as follows: A = none; B = $1 — $10,000; C = $10,001 — $50,000; D = $50,001 — $100,000; E = over $100,000.
None of the Independent Trustees and none of their immediate family members owns any securities issued by Alger Management, Alger LLC, or any company (other than a registered investment company)
controlling, controlled by or under common control with Alger Management or Alger LLC. The table reflects Ms. Alger’s beneficial ownership of shares of the Fund, and of all funds in the Alger Fund
Complex overseen by Ms. Alger as a Trustee, that are owned by various entities that may be deemed to be controlled by Ms. Alger.
Equity Securities of Each
Fund
|
|
Aggregate Equity Securities of Funds in Alger Fund Complex Overseen by Trustee |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Investment Manager
Alger Management has been in the business of providing investment advisory
services since 1964 and, as of October 31, 2021, had approximately $[_] billion in assets under management. Alger Management is directly owned by Alger Group Holdings, LLC, a financial services holding company. Alger Group
Holdings and Alger Management are indirectly controlled by Hilary M. Alger, Nicole D. Alger and Alexandra D. Alger, who own approximately 99% of the voting rights of Alger Associates, the parent
company of Alger Group Holdings.
Alger Management serves as investment adviser to the Fund pursuant to a written agreement between the Trust, on behalf of the Fund, and Alger Management (the “Advisory Agreement”), and under the supervision of the Board. The services provided by Alger Management under the Advisory Agreement
include: making investment decisions for the Fund, placing orders to purchase and sell securities on behalf of the Fund, and selecting broker-dealers that, in its judgment, provide prompt and reliable execution at
favorable prices and reasonable commission rates. Alger LLC may serve as the Fund’s broker in effecting most portfolio transactions on securities exchanges and can retain commissions in accordance with
certain regulations of the SEC. Alger Management employs professional securities analysts who provide research services exclusively to the Fund and other accounts for which Alger Management or its affiliates
serve as investment adviser or subadviser. Alger Management pays the salaries of all officers of the Trust who are employed by the Trust and Alger Management. Alger Management bears all expenses in connection
with the performance of its services under the Advisory Agreement.
As compensation for its services, the Trust has agreed to pay the Manager an investment advisory fee, accrued daily and payable monthly, at the annual rates set forth below as a percentage of the average daily net asset value of the Fund: Alger Weatherbie Enduring Growth Fund — .70% for assets up to $250
million and .50% for assets in excess of $250 million.
The Manager has made contractual commitments to the Fund to waive its fee and/or reimburse the Fund for expenses to the extent necessary to maintain the Fund’s total annual operating expenses at or below certain levels. The limitation does not include acquired fund fees and expenses, dividend expense
on short sales, borrowing costs, interest, taxes, brokerage and extraordinary expenses. The agreement runs through February 29, 2024 and may only be amended or terminated prior to its expiration date by
agreement between the Manager and the Board, and will terminate automatically in the event of
termination of the Advisory Agreement. Such waiver/reimbursement arrangement is as follows: Class A shares – 1.15%; Class C shares – 1.85%; Class I shares – 1.10%; Class Y shares – 0.70%; Class Z shares – 0.75%. The Manager may, during the term of the contract, recoup any fees waived or expenses
reimbursed pursuant to the contract to the extent that such recoupment would not cause the expense ratio to exceed the stated limitation in effect at the time of (i) the waiver or reimbursement and (ii) the
recoupment by the Manager, after repayment of the recoupment is taken into account.
Alger Management
pays a sub-advisory fee to Weatherbie Capital, LLC (“Weatherbie” or the “Sub-Adviser”), an affiliate of the Manager, out of its own resources at
no additional charge to the Fund. Alger Management pays Weatherbie 70% of the advisory fee received by Alger Management from the Fund, net of any waivers.
Sub-Adviser
Alger Management has entered into a Sub-Advisory Agreement with Weatherbie,
a wholly-owned subsidiary of Alger Associates and an affiliate of Alger Management. Weatherbie, subject to Alger Management’s supervision and approval, provides investment management of Alger Weatherbie Enduring
Growth Fund’s assets.
Administrative Services
Pursuant to a separate administration agreement between the Trust, on behalf of the Fund, and Alger Management (the “Fund Administration Agreement”), Alger Management also provides administrative services to the Fund, including, but not limited to: providing office space, telephone, office equipment and supplies; authorizing expenditures and approving bills for payment on behalf of the Fund; supervising
preparation of periodic shareholder reports, notices and other shareholder communications; supervising the daily pricing of the Fund’s investment portfolio and the publication of the net asset value of the Fund’s shares, earnings reports and other financial data; monitoring relationships with organizations providing
services to the Fund, including the Fund's Custodian, Transfer Agent and printers; providing trading desk facilities for the Fund; and supervising compliance by the Fund with recordkeeping and periodic reporting
requirements under the 1940 Act.
Alger Management’s administrative fee is .0275% of average daily net assets, and pursuant to an Accounting Agency Agreement between Brown Brothers Harriman & Co. (“BBH”) and the Fund, for a fee of 0.014% of the Fund's average daily net assets for the first $5 billion in assets and 0.0125% for
assets over $5 billion, BBH provides accounting and bookkeeping services and calculation of the net asset value of the Fund's shares.
Alger Management has also entered into a Shareholder Administrative Services Agreement with the Trust. The services provided and the fees paid pursuant to that agreement are discussed in the “Transfer Agent” section below.
Description of Portfolio Manager Compensation Structure
An Alger portfolio manager’s compensation generally consists of salary and an annual bonus. In addition, portfolio managers are eligible for health and retirement benefits available to all Alger
employees, including a 401(k) plan sponsored by Alger Management. A portfolio manager’s base salary is typically a function of the portfolio manager’s experience (with consideration given to type, investment style and size of investment portfolios previously managed), education, industry knowledge and the
individual’s performance in his or her role. Base salaries will grow over time for Alger’s superior employees, rewarding their performance and contributions to the firm.
Bonus may be a significant portion of an individual’s compensation and can vary from year to year. The annual bonus considers various factors, including:
•
the firm’s overall financial results and profitability;
•
the firm’s overall investment management performance;
•
current year’s and prior years’ pre-tax investment performance (both
relative and absolute) of the portfolios for which the individual is responsible, based on the benchmark of each such portfolio;
•
qualitative assessment of an individual’s performance with respect to the
firm’s investment process and standards; and
•
the individual’s leadership contribution within the firm.
While the benchmarks and peer groups
used in determining a portfolio manager’s compensation may change from time to time, Alger Management may refer to benchmarks, such as those provided by Russell
Investments and S&P Global Ratings, and peer groups, such as those provided by Lipper Inc. and Morningstar Inc., that are widely-recognized by the investment industry.
Alger Management has implemented a profit participation plan (“PPP”) that gives key personnel the opportunity to have equity-like participation in the long-term growth and profitability of the firm. Senior
members of the firm
are eligible to receive awards annually in the PPP. The PPP reinforces the portfolio managers’ commitment to generating superior investment performance for the
firm’s clients. The awards are invested in Alger mutual funds and have a four-year vesting schedule. The total award earned can increase or decrease with the firm’s investment and earnings results over the four-year period.
Additionally, the Alger Partners Plan provides key investment executives
with phantom equity that allows participants pro-rata rights to growth in the firm’s book value, dividend payments and participation in any significant corporate transactions (e.g. partial sale, initial public offering, merger, etc.). The firm does not have a limit on the overall
percentage of the firm’s value it will convey through this program. Participation in this program is determined annually.
Other Accounts Managed by Portfolio Managers
The numbers and assets of other accounts managed by the portfolio managers
of the Fund as of October 31, 2021 are as follows. Except as noted below, no account’s advisory fee is based on the performance of the account.
|
Registered Investment Companies |
Other Pooled Investment Vehicles |
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x
The portfolio manager also manages a separate account, included in “Other Accounts,” which may charge additional fees based on the performance of the account. The account had assets of approximately $[__] million as of October 31, 2021.
†
The portfolio manager also manages a private hedge fund, included in “Other Pooled
Investment Vehicles,” which may charge additional fees based on the performance of the account. The account had assets of approximately $[__] million as of October 31,
2021.
Securities Owned by the Portfolio Managers
The following table shows each current portfolio manager’s beneficial
interest as of [__], 2021, by dollar range, in the shares of the Fund(s) that he or she manages. The ranges are as follows: A = none; B = $1 — $10,000; C = $10,001 — $50,000; D = $50,001 — $100,000; E = $100,001 — $500,000; F = $500,001 — $1,000,000; G = over $1,000,000.
Distributor
Alger LLC, an affiliate of Alger Management, serves as the Fund’s
principal underwriter, or distributor, and receives payments from the Fund under the Plans (see “Purchases — Distribution Plans”). Alger LLC makes a continuous offering of Fund shares on a best efforts basis. It also receives brokerage
commissions from the Trust (see “Investment Strategies and Policies — Portfolio Transactions”). Alger LLC does not receive any other compensation from the Fund.
From time to time Alger LLC, at its expense from its own resources, may
compensate brokers, dealers, investment advisers or others (“financial intermediaries”) who are instrumental in effecting investments by their clients or customers in the Trust, in an amount up to 1% of the value of those
investments. Alger LLC may also from time to time, at its expense from its own resources, make payments to other financial intermediaries that provide shareholder servicing, or transaction processing, with such
payments structured as a percentage of gross sales, a percentage of net assets, and/or as a fixed dollar amount (the latter as a per account fee or as reimbursement for transactions processing and transmission
charges). Payments under these other arrangements may vary but generally will not exceed 0.50% annually of the value of Trust assets or 0.50% annually of the value of Trust sales attributable to that
financial intermediary. Alger LLC determines whether to make any additional cash payments and the amount of any such payments in response to requests from financial intermediaries, based on factors
Alger LLC deems relevant. Factors considered by Alger LLC generally include the financial intermediary’s reputation, ability to attract and retain assets for the Trust, expertise in distributing a particular class of shares of the Trust, entry into target markets, and/or quality of service.
Financial intermediaries with whom Alger LLC has its most significant arrangements to make additional cash compensation payments are Ameriprise Financial Services, Inc., Ameritas Investment
Corporation, Charles Schwab & Co, Chase Life Insurance Company, GWFS Equities Inc, ING America
Insurance Holdings
INC, Jefferson National Life, Lincoln Benefit Life, LPL Financial Corporation, Merrill Lynch, Pierce, Fenner & Smith, Midland National Life Ins Co, MML Distributors
LLC, Morgan Stanley Smith Barney LLC, National Financial Services Co, Nationwide Investment Services Corp, Noramco, Oneamerica Securities, Inc., Pershing LLC, Prudential Investment Management Service, Raymond
James & Associates, Inc., RBC Capital Markets LLC, Talcott Resolution Life Insurance Co, TD Ameritrade Clearing, Inc., UBS Financial Services Inc., Wells Fargo
Clearing Services LLC. In addition, Alger LLC may make payments to dealer firms in the form of payments for marketing support, seminar support, training meetings, or comparable expenses in the discretion of Alger LLC. Please contact your
financial intermediary for details about revenue sharing payments it may receive. Any payments described above will not change the price paid by investors for the purchase of shares of the Fund or the amount of
proceeds received by the Fund on the sale of shares.
Independent Registered Public Accounting Firm
[__] serves as the Trust’s independent registered public accounting firm.
Code of Ethics
Alger Management personnel (“Access Persons”) are permitted to engage in personal securities transactions, including transactions in securities that may be purchased or held by the Fund, subject to the restrictions and procedures of the Trust’s Code of Ethics. Pursuant to the Code of Ethics, Access Persons generally must pre-clear all personal securities transactions prior to trading and are subject to certain
prohibitions on personal trading. You can obtain a copy of the Trust’s Code of Ethics by calling the Trust toll-free at (800) 992-3863.
Certain U.S. Federal Income Tax Considerations
The following is a summary of selected federal income tax considerations that may affect the Fund and its shareholders. The summary is not intended to substitute for individual tax advice and investors are urged to consult their own tax advisers as to the federal, state and local tax consequences of investing in the Fund.
The Fund will be treated as a separate taxpayer with the result that, for federal income tax purposes, the amounts of net investment income and capital gains earned will be determined on a Fund-by-Fund
(rather than on a Trust-wide) basis.
The Fund intends to qualify as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). If qualified as a regulated investment
company, the Fund will pay no federal income taxes on its taxable net investment income (that is, taxable income other than net realized capital gains) and its net realized capital gains that are distributed to
shareholders. To qualify under Subchapter M, the Fund must, among other things: (1) distribute to its shareholders at least 90% of its taxable net investment income and net realized short-term capital gains;
(2) derive at least 90% of its gross income from dividends, interest, payments with respect to loans of securities, gains from the sale or other disposition of securities, or other income (including, but not limited to, gains from options, futures and forward contracts) derived with respect to the Fund’s business of investing in securities; and (3) diversify its holdings so that, at the end of each fiscal quarter of the Fund (a) at least 50% of the market value of the Fund’s assets is represented by cash, U.S. Government
securities and other securities, with those other securities limited, with respect to any one issuer, to an amount no greater in value than 5% of the Fund’s total assets and to not more than 10% of the
outstanding voting securities of the issuer, and (b) not more than 25% of the market value of the Fund’s assets is invested in the securities of any one issuer (other than U.S. Government securities or securities of other regulated investment companies) or of two or more issuers that the Fund controls and that are
determined to be in the same or similar trades or businesses or related trades or businesses. In meeting these requirements, the Fund may be restricted in the utilization of certain of the investment techniques
described above and in the Fund’s prospectus. As a regulated investment company, the Fund is subject to a non-deductible excise tax of 4% with respect to certain undistributed amounts of income and capital
gains during the calendar year. The Trust expects the Fund to make additional distributions or change the
timing of its
distributions so as to avoid the application of this tax. Although the Trust expects the Fund to make such distributions as are necessary to avoid the application of this
tax, certain of such distributions, if made in January, might be included in the taxable income of shareholders in the year ended in the previous December.
Payments reflecting the dividend income of the Fund will not qualify for the dividends-received deduction for corporations if the Fund sells the underlying stock before satisfying a 46-day holding period requirement (91 days for certain preferred stock). Dividends-received deductions will be allowed to a
corporate shareholder only if similar holding period requirements with respect to shares of the Fund have been met.
In general, any gain or loss on the redemption or exchange of Fund shares will be long-term capital gain or loss if held by the shareholder for more than one year, and will be short-term capital gain or loss if held for one year or less. However, if a shareholder receives a distribution taxable as long-term capital
gain with respect to Fund shares, and redeems or exchanges the shares before holding them for more than six months, any loss on the redemption or exchange up to the amount of the distribution will be treated
as a long-term capital loss.
Dividends of the Fund’s net investment income and distributions of its short-term capital gains will generally be taxable as ordinary income. Distributions of long-term capital gains will be taxable as such at the appropriate rate, regardless of the length of time you have held shares of the Fund.
If the Fund is the holder of record of any stock on the record date for any
dividends payable with respect to such stock, such dividends are included in the Fund’s gross income as of the later of (a) the date such stock became ex-dividend with respect to such dividends (i.e., the date on which a buyer of the stock
would not be entitled to receive the declared, but unpaid, dividends) or (b) the date the Fund acquired such stock. Accordingly, in order to satisfy its income distribution requirements, the Fund may be
required to pay dividends based on anticipated earnings and shareholders may receive dividends in an earlier year than would otherwise be the case.
Investors considering buying shares of the Fund just prior to a record date for a taxable dividend or capital gain distribution should be aware that, regardless of whether the price of the Fund shares to be
purchased reflects the amount of the forthcoming dividend or distribution payment, any such payment will be a taxable dividend or distribution payment.
If a shareholder fails to furnish a correct taxpayer identification number, fails to fully report dividend or interest income, or fails to certify that he or she has provided a correct taxpayer identification number and that he or she is not subject to such withholding, then the shareholder may be subject to a 28%
“backup withholding tax” with respect to (i) any taxable dividends and distributions and (ii) any proceeds of any redemption of Fund shares. An individual’s taxpayer identification number is his or her social security number. The 28% backup withholding tax is not an additional tax and may be credited
against a shareholder’s regular federal income tax liability.
Shortly after the close of each calendar year, you will receive a statement setting forth the dollar amounts of dividends and any distributions for the prior calendar year and the tax status of the dividends
and distributions for federal income tax purposes. You should consult your tax adviser to assess the federal, state and local tax consequences of investing in the Fund. This discussion is not intended to
address the tax consequences of an investment by a nonresident alien.
Dividends
Each share class will be treated separately in determining the amounts of dividends or investment income and distributions of capital gains payable to holders of its shares. Dividends and distributions will be automatically reinvested at net asset value on the payment date in additional shares of the class that
paid the dividend or distribution at net asset value, unless you elected to have all dividends and distributions paid in cash or reinvested at net asset value into the same class of shares of another
identically registered Alger Family of Funds account you have established. In addition, accounts whose dividend/distribution checks have been returned as undeliverable shall reinvest that dividend/distribution
at the net asset value next determined after the Transfer Agent receives the undelivered check. Furthermore, all future dividend/distribution checks shall be reinvested automatically at net asset value on the payment date until a written request for reinstatement of cash distribution and a valid mailing address are provided by the share-holder(s). Shares purchased through reinvestment of dividends and distributions
are not subject to a
CDSC or front-end sales charge except as described above. Dividends of the Fund are declared and paid annually. Distributions of any net realized short-term and long-term
capital gains earned by the Fund usually will be made annually after the close of the fiscal year in which the gains are earned.
The classes of the Fund may have different dividend and distribution rates. Class A and Class I dividends generally will be greater than those of Class C due to the higher Rule 12b-1 fees associated with Class C Shares. Class Y and Class Z dividends will generally be greater than those of the other classes due to the absence of Rule 12b-1 fees. However, dividends paid to each class of shares in the Fund will be
declared and paid at the same time and will be determined in the same manner as those paid to each other class.
Custodian and Transfer Agent
Brown Brothers Harriman & Co., 50 Post Office Square, Boston, Massachusetts 02110 serves as custodian for the Trust pursuant to a custodian agreement under which it holds the Fund’s assets. UMB Fund Services, Inc. (“UMB”), 235 W. Galena Street, Milwaukee, WI 53212 serves as transfer agent for the Fund. Under the transfer agency agreement, UMB processes purchases and redemptions of shares of the
Fund, maintains the shareholder account records for the Fund, handles certain communications between shareholders and the Trust, and distributes any dividends and distributions payable by the Fund. The
Trust, Alger LLC (or its affiliates) and non-affiliated third-party service providers may enter into agreements for recordkeeping services.
Pursuant to the transfer agency agreement, UMB is compensated on a per-account basis, subject to a minimum total fee amount across the fund complex. These fees will be allocated across the Fund on a
pro-rata basis by assets. The Trust has entered into a Shareholder Administrative Services Agreement with Alger Management to act as a liaison and to provide administrative oversight of UMB and related
services. Alger Management is paid on an asset-based basis for these services.
Principal Holders
Because the Fund has not commenced operations as of the date of this SAI, there are no beneficial owners of the Fund.
Organization
The Trust has been organized as an unincorporated business trust under the laws of the
Commonwealth of Massachusetts pursuant to an Agreement and Declaration of Trust dated March
20, 1986 (the “Trust Agreement”). The word “Alger” in the Trust’s name has been adopted pursuant to a provision contained in the Trust
Agreement. Under that provision, Alger Management may terminate the Trust’s license to use the word “Alger” in its name when Alger Management ceases to
act as the Trust’s investment manager. The Fund commenced operations on [__], 2021.
The Class A, C, I, Y and Z Shares differ in that: (a) each class has a
different class designation; (b) the Class A Shares are subject to initial sales charges; (c) the Class C Shares are subject to CDSCs, and certain Class A Shares may also be subject to a CDSC; (d) each of Class A, C and I Shares are subject to different
distribution and/or service fees under the Plans; (e) Class Y and Z Shares are not subject to distribution and/or service fees; (f) to the extent that one class alone is affected by a matter submitted to a vote of the shareholders, then only that class has voting power on the matter; and (g) the exchange privileges and
conversion rights of each class differ from those of the others..
Although, as a Massachusetts business trust, the Trust is not required by law to hold annual shareholder meetings, it may hold meetings from time to time on important matters, and shareholders have
the right to call a meeting to remove a Trustee or to take other action described in the Trust’s Declaration of Trust.
Meetings of shareholders normally will not be held for the purpose of
electing Trustees unless and until such time as less than a majority of the Trustees holding office have been elected by shareholders, at which time the Trustees then in office will call a shareholders’ meeting for the election of Trustees. Under the 1940 Act, shareholders of record of no less than two-thirds of the outstanding shares of the Trust may
remove a Trustee through a declaration in writing or by vote cast in person or by proxy at a meeting
called for that
purpose. Under the Trust Agreement, the Trustees are required to call a meeting of shareholders for the purpose of voting on the question of removal of any such Trustee
when requested in writing to do so by the shareholders of record of not less than 10% of the Trust’s outstanding shares.
Shares do not have cumulative voting rights, which means that holders of
more than 50 percent of the shares voting for the election of Trustees can elect all Trustees. Shares have equal voting rights, which cannot be adversely modified other than by majority vote. Shares are transferable but have no preemptive,
conversion or subscription rights. Shareholders generally vote by Fund, except with respect to the election of Trustees and the ratification of the selection of independent accountants, and by class within the Fund
on matters in which the interests of one class differ from those of another; see also item (f) in the third preceding paragraph. Physical share certificates are not issued for shares of the Fund.
Massachusetts law provides that shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust. However, the Trust Agreement disclaims shareholder liability for acts or obligations of the Trust and requires the Trustees to use their best efforts to ensure that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Trust
or a Trustee. The Trust Agreement provides for indemnification from the Trust’s property for all losses and expenses of any shareholder held personally liable for the obligations of the Trust. Thus, the risk of a shareholder’s incurring financial loss on account of shareholder liability is limited to circumstances in which the Trust itself would be unable to meet its obligations, a possibility that the Trust believes is
remote.
Upon payment of any liability incurred by the Trust, the shareholder paying the liability will be entitled to reimbursement from the general assets of the Trust. The Trustees intend to conduct the
operations of the Trust in a manner so as to avoid, as far as possible, ultimate liability of the shareholders for liabilities of the Trust.
The Trust is an open-end management investment company. The Fund is
classified as a “non-diversified” investment company under the 1940 Act. While a “diversified” investment company is required, with respect to 75% of its assets, to limit its investment in any one issuer (other than the U.S. government and other investment companies) to no more than 5% of the investment company’s total
assets, a “non-diversified” investment company does not have a similar requirement. The Fund intends to continue to qualify as a “regulated investment company” under Subchapter M of the Internal Revenue Code; one of the requirements for such qualification is a quarterly diversification test, applicable to 50% (rather than 75%) of the Fund’s assets, similar to the requirement stated above.
Proxy Voting Policies and Procedures
The Board has delegated authority to vote all proxies related to the Fund's portfolio securities to Alger Management, the Fund's investment manager. Alger Management, an investment adviser registered
under the Investment Advisers Act of 1940, as amended, maintains discretionary authority over client accounts, including the Fund, and is responsible for voting proxies of all foreign and domestic securities
held in the Fund. Alger Management views the responsibility its clients have entrusted to it seriously and has adopted and implemented written policies and procedures designed to ensure that proxies are voted in
the best interests of its clients.
Alger Management receives and considers the recommendations of Institutional Shareholder Services Inc. (“ISS”), a leading proxy voting service provider and registered investment adviser. ISS issues voting recommendations and casts votes on the proxies based on pre-determined proxy voting guidelines intended
to vote proxies in the clients’ best interests, which are summarized below. To the extent ISS has a material conflict of interest with the company whose proxies are
at issue, ISS may recuse itself from voting proxies. Alger Management monitors ISS’s proxy voting policies and procedures on a quarterly basis to ensure that the proxies are voted in the best interests of the applicable Fund. Further, Alger Management
has a process in place for making voting determinations in the event of a conflict of interest.
Alger Management maintains records of its proxy voting policies and
procedures. Alger Management or ISS, on Alger Management’s behalf, maintains proxy statements received regarding securities held by the Fund; records of votes cast on behalf of the Fund; records of requests for proxy voting information;
and any documents prepared that were material to making a voting decision.
No later than August 31st each year, the Fund proxy voting record for the most recent 12
months ended June 30th will be available upon request by calling (800) 992-3863 and on the Fund website and on the SEC’s website at http://www.sec.gov.
The following is a summary of the two sets of voting guidelines used (as applicable) by Alger Management, or ISS on Alger Management’s behalf, to vote proxies of securities held by the Fund.
Overview of ISS’s Specialty SRI U.S. Proxy Voting
Guidelines
ISS’s SRI proxy voting guidelines, like the
other Specialty Policy proxy voting guidelines, have been formulated to help institutional investors align their corporate governance philosophies and investment objectives with their proxy voting activities. They have been developed specifically to reflect the
perspectives of the SRI investor constituency and are designed to represent the views of related organizations and applicable global initiatives. The ISS SRI guidelines are generally supportive of
proposals that promote:
•
Greater disclosure of corporate environmental policies including climate change and
greenhouse gas or toxic emissions;
•
Greater transparency of social policies such as those concerning workplace
discrimination and corporate board diversification efforts, human rights, and compliance with human/labor rights norms/codes of conduct; and
•
Reporting on sustainable business practices including recycling, wood procurement,
water use, operations in sensitive or protected areas, energy efficiency/renewable energy, and incorporation of sustainability-related performance metrics into executive compensation.
In addition, the SRI guidelines are also supportive of the following
topics:
•
Board diversity — recommend votes against nominating committee members when
the board lacks diversity (the ISS Benchmark guidelines do not consider
diversity when providing recommendations on board members);
•
ESG risk management — recommend votes against directors individually, on a
committee, or potentially the entire board due to material failures of governance, stewardship, risk oversight, or fiduciary responsibilities at the company, including failure to adequately manage or mitigate
environmental and social risks (the ISS Benchmark guidelines do not
recommend votes against directors for ESG risks);
•
Auditor independence — recommend votes against auditor ratification when
non-audit fees exceed a quarter of total fees paid to auditor (the ISS
Benchmark guidelines recommend votes against the auditor ratification when non audit fees exceed half of total fees); and
•
Environmental stewardship and socially responsible/sustainable business
practices.
The
SRI guidelines will generally support proxy voting proposals that call for actions beyond disclosure reporting of corporate environmental policies or resolutions seeking
greater transparency around social policies and practices — including support for proposals seeking adoption of policies on topics such as human/labor rights, workplace safety or discrimination, access to pharmaceutical drugs,
incorporation of sustainability-related performance metrics into executive compensation, hydraulic fracturing and climate change and greenhouse gas or toxic emissions, among others.
The SRI guidelines also have a higher bar when evaluating Management Say-On-Pay proposals (MSOPs) that outline executive compensation programs compared to the ISS Benchmark Policy, with greater
emphasis on the strength of alignment between pay and performance when executive pay has outpaced returns to shareholders over short- and long-term periods. The
guidelines also place greater scrutiny on pay quantum relative to the firm’s peers as well as with respect to other executive officers within the firm in question, in the context of company performance and the proportion of executive pay
that is performance-contingent. A separate document providing more details on the SRI policy’s approach to MSOPs is available.
Further, the SRI guidelines also assess whether any relevant social or environmental metrics are a component of performance-based pay elements in executive pay programs, particularly in instances where
significant ESG controversies have been identified that pose potential material risks to the company and its shareholders.
Overview ISS’s Specialty SRI International Proxy Voting Guidelines
ISS’s SRI International proxy voting guidelines, like the other
Specialty Policy proxy voting guidelines, have been formulated to help institutional investors align their corporate governance philosophies and investment objectives with their proxy voting activities for international holdings. They have been
developed specifically to reflect the perspectives of the SRI investor constituency and are designed to represent the views of related organizations and applicable global initiatives. The ISS SRI International
guidelines are generally supportive of proposals that promote:
•
Greater disclosure of corporate environmental policies including climate change and
greenhouse gas or toxic emissions;
•
Greater transparency of social policies such as those concerning workplace
discrimination and corporate board diversification efforts, human rights, and compliance with human/labor rights norms/codes of conduct; and
•
Reporting on sustainable business practices including recycling, wood procurement,
water use, operations in sensitive or protected areas, energy efficiency/renewable energy, and incorporation of sustainability-related performance metrics into executive compensation.
•
In addition, the SRI International guidelines are also supportive of the following
topics:
•
Board diversity — evaluate gender diversity on boards in international markets
when reviewing director elections, to the extent that disclosure and market practices permit (the ISS Benchmark guidelines do not consider diversity when providing recommendations on board members);
•
ESG risk management — recommend votes against directors individually, the
relevant committee, or potentially the entire board due to material failures of governance, stewardship, risk oversight, or fiduciary responsibilities at the company, including failure to adequately manage or mitigate
environmental and social risks (the ISS Benchmark guidelines do not recommend votes against
directors for ESG risks); and
•
Environmental stewardship and socially responsible/sustainable business
practices.
ISS’s Social Advisory Services division recognizes that socially
responsible investors have dual objectives: financial and social. Socially responsible investors invest for economic gain, as do all investors, but they also require that the companies in which they invest conduct their business in a socially and
environmentally responsible manner. Social Advisory Services has, therefore, developed proxy voting guidelines that are consistent with the dual objectives of socially responsible shareholders. On matters of social and environmental import, the guidelines seek to reflect a broad consensus of the socially
responsible investing community. We incorporate the active ownership and investment philosophies of leading globally recognized initiatives such as the United Nations Environment Programme Finance
Initiative (UNEP FI), the United Nations Principles for Responsible Investment (UNPRI), the United Nations Global Compact, and environmental and social European Union Directives.
ISS SRI International Proxy Voting Guidelines Background
ISS’s SRI international voting guidelines reflect a broad consensus of the socially responsible investor community in promoting the dual objectives of SRI investors — financial returns and responsible social/environmental conduct by corporations.
The SRI guidelines, which have been in place for more than sixteen years, have been developed in collaboration with our SRI clients and SRI market participants, and are also informed by the active
ownership and investment philosophies of globally recognized initiatives such as the UNEP FI, the UN PRI, the UN Global Compact, CERES/Sullivan Principles, and environmental and social European Union
Directives, among others.
Financial Statements
Because it is a new fund, the Fund has no audited financial statements.
The Fund’s audited financial statements will be contained in its
annual report to shareholders. Copies of the Fund’s reports to shareholders will be available by telephoning (800) 992-3863.
Potential Conflicts of Interest
Information in the following discussion relating to the business, practices, policies and rights of Alger Management and its affiliates has been provided by Alger Management.
Summary
Alger Management and Alger LLC, an affiliated registered broker-dealer and a member of the New York Stock Exchange, are owned by Alger Group Holdings, LLC, which is wholly-owned by Alger Associates.
Additionally, Alger Management is under common ownership with Weatherbie Capital, LLC, a registered investment adviser based in Boston, Massachusetts. Alger LLC serves as
the principal underwriter for the Fund and as a broker-dealer for securities trades placed on behalf of Alger Management clients and accounts. Alger LLC does not conduct public brokerage business and substantially
all of its transactions are for clients of Alger Management if their investment guidelines and relevant regulations that govern their accounts allow it. Neither Alger
Management nor any of its management personnel is registered or plans to register as a futures commission merchant, commodity pool operator, commodity trading advisor, or an associated person of these entities. From time to time,
Alger LLC, Alger Management, Alger Group Holdings, LLC, or Alger Associates, or other affiliated persons (“Alger Affiliates”) may hold controlling positions in certain pooled investment vehicles, such that they are considered affiliates.
In addition to serving as investment adviser of the ETFs and mutual funds in the Alger Family of Funds, Alger Management is the investment adviser to Alger Dynamic Return Fund LLC, a Delaware limited
liability company, as well as to Alger SICAV, a publicly offered pooled investment vehicle registered in Luxembourg. Alger Management also serves as a sub-adviser to
third-party registered investment companies, as well as bank collective investment trusts. From time to time, Alger Affiliates may own significant stakes in one or more of the above entities.
Alger Management may recommend to clients that they purchase interests in investment partnerships or funds for which Alger Management serves as investment adviser or sub-adviser and in which Alger
Management and related persons have a financial interest. Alger Management and such related persons will fully disclose such financial interests to all clients to which such recommendations are given.
Alger Affiliates also have other direct and indirect interests in the
equity markets, directly or through investments in pooled products, in which the Fund directly and indirectly invest. Investors should be aware that this may cause Alger Affiliates to have conflicts that could disadvantage the Fund.
As a registered investment adviser under the Investment Advisers Act of
1940, as amended, Alger Management is required to file and maintain a registration statement on Form ADV with the SEC. Form ADV contains information about assets under management, types of fee arrangements, types of investments,
conflicts and potential conflicts of interest, and other relevant information regarding Alger Management. Alger Management’s Form ADV is available on the
SEC’s website (www.adviserinfo.sec.gov).
Conflicts as a Result of the Manager’s Other Affiliates
Selection of Administrative and Other
Service Providers. Alger Management may choose to (and currently does) have Alger
Affiliates provide administrative services, shareholder services, brokerage and other account services to the Fund. While any such engagement would be on market terms, it
will nevertheless result in greater benefit to Alger Management than hiring a similarly qualified unaffiliated service provider.
In connection with these services and subject to applicable law, Alger Affiliates, including the Manager, may from time to time, and without notice to investors or clients, in-source or outsource certain
processes or functions that it provides in its administrative or other capacities. Such in-sourcing or outsourcing may give rise to additional conflicts of interest, including which processes or functions to
in-source or outsource, which entity to outsource to, and the fees charged by the Alger Affiliates or the third party. Alger Management maintains policies designed to mitigate the conflicts described herein;
however, such policies may not fully address situations described above.
Information the Investment Adviser May
Receive. Alger Management and its affiliates may have or be deemed to have access to
the current status of certain markets, investments and funds because of Alger Affiliates’ brokerage and other activities. Alger Affiliates may therefore possess
information which, if known to Alger Management, might cause Alger Management to seek to dispose of, retain or increase
interests in
investments held by the Fund, or acquire certain positions on behalf of the Fund. Moreover, Alger Management and its affiliates may come into possession of material,
non-public information that would prohibit or otherwise limit its ability to trade on behalf of the Fund. A fund not advised by Alger Management would not be subject to these restrictions. Alger Management maintains policies designed to
prevent the disclosure of such information; however, such policies may not fully address situations described above.
Allocation Issues
As Alger Management manages multiple accounts or funds managed or advised by Alger Affiliates (including Alger Management) or in which Alger Affiliates (including Alger Management) or its personnel
have interests (collectively, the “client/Alger Affiliates accounts”), issues can and do arise as a result of how Alger Management allocates investment opportunities. In an effort to treat all clients/Alger Affiliates reasonably in light of all factors relevant to managing an account, aggregated trades will generally be
allocated pro rata among the Fund and client/Alger Affiliates accounts whenever possible. There are exceptions to this practice, however, as described below:
Unusual Market Conditions. During periods of
unusual market conditions, Alger Management may deviate from its normal trade allocation practices. During such periods, Alger Management will seek to exercise a disciplined process for determining its actions to appropriately balance the interests of all
accounts, including the Fund, as it determines in its sole discretion.
Availability of Investments. The availability
of certain investments such as initial public offerings or private placements may be limited. In such cases, all client/Alger Affiliates accounts (including the Fund)
may not receive an allocation. As a result, the amount, timing, structuring or terms of an investment by the Fund may differ from, and performance may be lower than, investments and performance of other
client/Alger Affiliates accounts.
Alger Management, as a general practice, allocates initial public offering shares and other limited availability investments pro rata among the eligible client/Alger Affiliates accounts (including the Fund)
where the portfolio manager seeks an allocation. An account or accounts may not receive an allocation because it lacks available cash, is restricted from making certain investments, the account pays a
performance fee, the account is so large that the allocation is determined to not be meaningful to the account’s overall performance, or due to co-investment by Alger Affiliates. When a pro rata allocation of limited availability investments is not possible or is not appropriate, Alger Management considers
numerous other factors to determine an appropriate allocation. These factors include (i) Alger Management’s good faith assessment of the best use of such limited opportunities relative to the account’s investment objectives, investment limitations and requirements of the accounts; (ii) suitability
requirements and the nature of the investment opportunity, including relative attractiveness of a security to different accounts; (iii) relative size of applicable accounts; (iv) impact on overall performance and
allocation of such securities may have on accounts; (v) cash and liquidity considerations, including without limitation, availability of cash for investment; (vi) minimum denomination, minimum increments, de minimus threshold and round lot consideration; (vii) account investment horizons,
investment objectives and guidelines; (viii) an account’s risk tolerance and/or risk parameters; (ix) tax sensitivity of accounts; (x) concentration of positions in an account; (xi) appropriateness of a security for the account
given the benchmark and benchmark sensitivity of an account; (xii) use of the opportunity as a replacement for another security Alger Management believes to be attractive for an account or the
availability of other appropriate investment opportunities; (xiii) considerations related to giving a subset of accounts exposure to an industry; and/or (xiv) account turnover guidelines.
In some circumstances, it is possible that the application of these factors may result in certain client/Alger Affiliates accounts receiving an allocation when other accounts do not. Moreover, Alger Affiliates, or
accounts in which Alger Affiliates and/or employees have interests, may receive an allocation or an opportunity not allocated to other accounts or the Fund.
Portfolio managers who manage multiple strategies exercise investment discretion over each strategy on an individualized basis and therefore may allocate investments (including IPOs and secondary
offerings) in a different manner for each strategy. Considerations for such different allocations, include, but are not limited to, when an allocation to a particular strategy results in a de minimis investment,
different investment policies and objectives of one strategy versus another; as well as the implementation of strategy objectives such as sector or industry weightings. As a result of such allocations, there will be instances when funds within a strategy managed by the same portfolio manager do not participate in an
investment that is
allocated among funds invested in another strategy managed by the same portfolio manager. For example, it is generally the case that investment strategies with larger AUM
do not participate in allocations of IPOs and secondary offerings as the allocation of limited shares will result in the strategy receiving de minimis amounts of shares to allocate across strategies. Such investment
decisions may result in a loss of investment opportunity for funds that may otherwise have been suited to invest in such offerings.
Please visit www.alger.com for a current list of portfolio managers by strategy as well as strategy AUM.
Differing Guidelines, Objectives and Time
Horizons. Because client/Alger Affiliates accounts (including the Fund) are managed
according to different strategies and individual client guidelines, certain accounts may not be able to participate in a transaction or strategy employed by Alger
Management.
Actions taken by one account could affect others.
For example, in the event that withdrawals of capital result in one account selling securities, this could result in securities of the same issuer falling in value, which could have a material adverse effect on the performance of other accounts (including the
Fund) that do not sell such positions.
Alger Affiliates may also develop and implement new strategies, which may not be employed in all accounts or pro rata among the accounts where they are employed, even if the strategy is consistent with
the objectives of all accounts. Alger Affiliates may make decisions based on such factors as strategic fit and other portfolio management considerations, including an account’s capacity for such strategy, the liquidity of the strategy and its underlying instruments, the account’s liquidity, the business risk of the strategy relative to the account’s overall portfolio make-up, the lack of efficacy of, or return expectations from, the strategy for the account, and any such other factors as Alger Affiliates deem relevant in their
sole discretion. For example, such a determination may, but will not necessarily, include consideration of the fact that a particular strategy will not have a meaningful impact on an account given the overall size
of the account, the limited availability of opportunities in the strategy and the availability of other strategies for the account.
Investing in Different Classes of the Same
Issuer. Conflicts also arise when one or more client/Alger Affiliates accounts
(including the Fund) invests in different classes of securities of the same issuer. As a result, one or more client/Alger Affiliates accounts may pursue or enforce rights
with respect to a particular issuer in which the Fund has invested, and those activities may have an adverse effect on the Fund. For example, if a client/Alger Affiliates account holds debt securities of an issuer and the Fund
holds equity securities of the same issuer, if the issuer experiences financial or operational challenges, the client/Alger Affiliates account which holds the debt securities may seek a liquidation of the issuer, whereas the Fund which holds the equity securities may prefer a reorganization of the issuer. In addition, Alger
Management may also, in certain circumstances, pursue or enforce rights with respect to a particular issuer jointly on behalf of one or more client/Alger Affiliates accounts, the Fund, or Alger Affiliates. The Fund may be negatively impacted by Alger Affiliates’ and other client/Alger Affiliates accounts’ activities, and transactions for the Fund may be impaired or effected at prices or terms that may be less favorable
than would otherwise have been the case had Alger Affiliates and other client/Alger Affiliates accounts not pursued a particular course of action with respect to the issuer of the securities.
Conflicts Related to Timing of
Transactions. When Alger or a client/Alger Affiliates account implements a portfolio
decision or strategy ahead of, or contemporaneously with, similar portfolio decisions or strategies for the Fund (whether or not the portfolio decisions emanate from the
same research analysis or other information), market impact, liquidity constraints, or other factors could result in the Fund receiving less favorable trading results. In addition, the costs of implementing such portfolio decisions or strategies could be increased or the Fund could otherwise be disadvantaged. Alger Affiliates
may, in certain cases, implement internal policies and procedures designed to limit such consequences to client/Alger Affiliates accounts, which may cause the Fund to be unable to engage in certain activities,
including purchasing or disposing of securities, when it might otherwise be desirable for it to do so.
Moreover, each client/Alger Affiliates account is managed independently of
other accounts. Given the independence in the implementation of advice to these accounts, there can be no warranty that such investment advice will be implemented simultaneously. Neither Alger Management nor its affiliates will
always know when advice issued has been executed and, if so, to what extent. Alger Management and its
affiliates will use
reasonable efforts to procure timely execution. It is possible that prior execution for or on behalf of an account could adversely affect the prices and availability of
the securities and instruments in which the Fund invest. In other words, an account, by trading first, may increase the price or decrease the availability of a security to the Fund.
In some instances, Alger Management is retained through programs sponsored
by unaffiliated financial intermediaries, advisers or planners in which Alger Management serves as an investment adviser (“wrap programs”). Alger Management offers advisory services through single contract programs, dual contract programs and model portfolio programs. Given the structure of the wrap programs and the fact
that payments to Alger Management are paid directly by the wrap sponsor, Alger Management does not believe it receives any direct compensation from clients who participate in the wrap programs. Because
wrap clients generally pay the wrap sponsor to effect transactions for their accounts, Alger Management does not aggregate transactions on behalf of wrap program accounts with other accounts or funds it
advises. Because of the distinct trading process Alger Management follows for wrap accounts and the portfolio limitations of the wrap programs, the timing of trades for wrap accounts may differ from other
accounts and will generally be made later in time than for other accounts managed by Alger Management.
The fact that personnel of certain Alger Affiliates are dedicated to one or
more Fund, accounts or clients may be a factor in determining the timing of implementation and allocation of opportunities sourced by such personnel. Alger Affiliates may delay trades for the Fund or account in order to aggregate
such trades. Alger Affiliates may also consider reputational matters and other considerations. Differences in allocations will affect the performance of the Fund.
Cross Transactions. From time to time and for
a variety of reasons, certain client/Alger Affiliates accounts may buy or sell positions in a particular security while the Fund is undertaking the opposite strategy. Trading in the opposite manner could disadvantage the Fund. Moreover, Alger Affiliates may
have a potentially conflicting division of loyalties and responsibilities to both parties in such a case. For example, Alger Management will represent both the Fund on one side of a transaction and another account
on the other side of the trade (including an account in which Alger Affiliates may have a proprietary interest) in connection with the purchase of a security by such
Fund. In an effort to reduce this negative impact, and when permitted by applicable law, the accounts may enter into “cross transactions.” A cross transaction, or cross trade, occurs when the Manager causes the Fund to buy securities from, or
sell a security to, another client of Alger Management or Alger Affiliates. Alger Management will ensure that any such cross transactions are effected on commercially reasonable market terms and in accordance
with applicable law, including but not limited to Alger Management’s fiduciary duties to all accounts.
Valuation of Assets. Alger Affiliates may have a conflict of interest in valuing the securities and other assets in
which the Fund may invest. Alger Management is generally paid an advisory fee based on the value of the assets under management, so more valuable securities will result
in a higher advisory fee. Alger Management may also benefit from showing better performance or higher account values on periodic statements.
Certain securities and other assets in which the Fund may invest may not have a readily ascertainable market value and will be valued by Alger Management in accordance with the valuation guidelines
described in the valuation procedures adopted by the Fund. Such securities and other assets may constitute a substantial portion of the Fund’s investments. Alger Management’s risk of misstating the value of securities is greater with respect to illiquid securities like those just described.
Alger Affiliates may hold proprietary positions in the Fund. One
consequence of such proprietary positions is that Alger Management may be incented to misstate the value of illiquid securities.
Regulatory Conflicts. From time to time, the activities of the Fund may be restricted because of regulatory or other
requirements applicable to Alger Affiliates and/or their internal policies designed to comply with, limit the applicability of, or otherwise relate to such requirements.
As a result, Alger Affiliates may implement internal restrictions that delay or prevent trades for the Fund, which could result in less favorable execution of trades and may impact the performance of the Fund.
Certain activities and actions may be considered to result in reputational risk or disadvantage for the management of the Fund and Alger Management as well as for other Alger Affiliates. Such situations could
arise if Alger Affiliates serve as directors of companies the securities of which the Fund wishes to
purchase or sell or is representing or providing financing to another potential purchaser. The larger Alger Management’s investment advisory business and Alger Affiliates’ businesses, the larger the potential that these restricted list policies will impact the performance of the Fund.
Other Potential Conflicts Relating to the Management of the Fund by the Manager
Potential Conflicts Relating to Alger
Affiliates’ Proprietary Activities and Activities On Behalf of Other Accounts. Alger Management may purchase or sell, for itself or Alger Affiliates, mutual funds, ETFs or
other pooled investment vehicles, commercial paper or fixed-income securities that it recommends to its clients. The results achieved by Alger Affiliates proprietary
accounts may differ from those achieved for other accounts. Alger Management will manage the Fund and its other client/Alger Affiliates accounts in accordance with their respective investment objectives and guidelines. However,
Alger Management may give advice, and take action, with respect to any current or future client/Alger Affiliates accounts that may compete or conflict with the advice Alger Management may give to the Fund
including with respect to the return of the investment, the timing or nature of action relating to the investment or method of exiting the investment.
The directors, officers and employees of Alger Affiliates, including Alger Management, may buy and sell securities or other investments for their own accounts (including through investment funds managed
by Alger Affiliates, including Alger Management). As a result of differing trading and investment strategies or constraints, positions may be taken by directors, officers and employees that are the same,
different from or made at different times than positions taken for the Fund. To reduce the possibility that the Fund will be materially adversely affected by the personal trading described above, Alger Management
has established policies and procedures that restrict securities trading in the personal accounts of investment professionals and others who normally come into possession of information regarding the
Fund’ portfolio transactions. Alger Management has adopted a code of ethics (the “Code of Ethics”) and monitoring procedures relating to certain personal securities transactions by personnel of Alger
Management which Alger Management deems to involve potential conflicts involving such personnel, client/Alger Affiliates accounts managed by Alger Management and the Fund. The Code of Ethics requires
that personnel of Alger Management comply with all applicable federal securities laws and with the fiduciary duties and anti-fraud rules to which Alger Management is subject. The Code of Ethics is
available on the EDGAR Database on the SEC’s Internet site at http://www.sec.gov.
Potential Conflicts in Connection With Proxy
Voting
Alger Management has adopted policies and procedures
designed to prevent conflicts of interest from influencing proxy voting decisions that it makes on behalf of clients, including the Fund, and to help ensure that such decisions are made in accordance with Alger Management’s fiduciary obligations to its clients. Notwithstanding such proxy voting policies and procedures, actual proxy voting decisions of
Alger Management may have the effect of favoring the interests of other clients or Alger Affiliates provided that Alger Management believes such voting decisions to be in accordance with its fiduciary
obligations. In other words, regardless of what Alger Management’s conflict of interest is, the importance placed on exercising a client’s right to vote dictates that Alger Management will cast the vote in
accordance with its voting guidelines even if Alger Management, its affiliate, or its client, somehow, indirectly, benefits from that vote. For a more detailed discussion of these policies and procedures, see the section of this SAI entitled “Proxy Voting Policies and Procedures.”
Conflicts in Connection with Sales-Related Incentives.
Alger Affiliates and its sales personnel may directly or indirectly receive
a portion of the fees and commissions charged to the Fund or its shareholders. Alger Affiliates and its advisory or other personnel may also benefit from increased amounts of assets under management. Fees and commissions may also be
higher for some products or services than for others, and the remuneration and profitability to Alger Affiliates and such personnel resulting from transactions on behalf of or management of the Fund may be
greater or lesser than the remuneration and profitability resulting from other funds or products.
Conflicts may arise in relation to sales-related incentives. Alger
Affiliates and its personnel may receive greater compensation or greater profit in connection with certain funds in the Alger Family of Funds than with other funds, including the Fund. Differentials in compensation may be related to the fact
that Alger Affiliates may pay a portion of their advisory fee to an unaffiliated investment adviser, or to other compensation arrangements, including for portfolio management, brokerage transactions or account
servicing. Any differential in compensation may create a financial incentive on the part of Alger Affiliates and their personnel to recommend certain funds in the Alger
Family of Funds over other funds, including the Fund.
Alger Affiliates may also have relationships with, and purchase, or distribute or sell,
services or products from or to, distributors, consultants and others who recommend the Fund, or who engage in transactions with or for the Fund. For example, Alger Affiliates regularly participate in industry and
consultant sponsored conferences and may purchase educational, data related or other services from consultants or other third parties that it deems to be of value to its personnel and its business. The
products and services purchased from consultants may include, but are not limited to, those that help Alger Affiliates understand the consultant’s points of view on the investment management process.
Consultants and other parties that provide consulting or other services or provide service platforms for employee benefit plans to potential investors in the Fund may receive fees from Alger Affiliates or the
Fund in connection with the distribution of shares in the Fund or other Alger Affiliates products. For example, Alger Affiliates may enter into revenue or fee sharing arrangements with consultants, service
providers, and other intermediaries relating to investments in mutual funds, ETFs or other products or services offered or managed by Alger Management. Alger Affiliates may also pay a fee for membership in
industry-wide or state and municipal organizations or otherwise help sponsor conferences and
educational forums for investment industry participants including, but not limited to, trustees, fiduciaries, consultants, administrators, state and municipal personnel and other clients. Alger Affiliates’ membership in such organizations allows Alger Affiliates to participate in these conferences and educational forums
and helps Alger Affiliates interact with conference participants and to develop an understanding of the points of view and challenges of the conference participants. In addition, Alger Affiliates’ personnel, including employees of Alger Affiliates, may have board, advisory, brokerage or other relationships with
issuers, distributors, consultants and others that may have investments in the Fund or that may recommend investments in the Fund or distribute the Fund. In addition, Alger Affiliates, including Alger
Management, may make charitable contributions to institutions, including those that have relationships with clients or personnel of clients. Personnel of Alger Affiliates may also make political contributions. As a result of the relationships and arrangements described in this paragraph, consultants, distributors and
other parties may have conflicts associated with their promotion of the Fund or other dealings with the Fund that create incentives for them to promote the Fund or certain portfolio transactions.
To the extent permitted by applicable law, Alger Affiliates or the Fund may
make payments to authorized dealers and other financial intermediaries (“Intermediaries”) from time to time to promote client/Alger Affiliates accounts, the Fund and other products. In addition to placement fees, sales loads or similar distribution charges, payments may be made out of Alger Affiliates’ assets, or amounts payable to Alger Affiliates rather than a separately identified charge to the Fund, client/Alger Affiliates accounts or other products. Such payments may compensate Intermediaries for, among other things: marketing the Fund,
client/Alger Affiliates accounts and other products (which may consist of payments resulting in or relating to the inclusion of the Fund, client/Alger Affiliates accounts
and other products on preferred or recommended fund lists or in certain sales programs from time to time sponsored by the Intermediaries); access to the Intermediaries’ registered representatives or salespersons, including at conferences and other meetings; assistance in training and education of personnel; fees for directing investors to the Fund, client/Alger Affiliates accounts and other products; “finders fees” or “referral fees” or other fees for providing assistance in promoting the Fund, client/Alger Affiliates accounts and other products (which may include
promotions in communications with the Intermediaries’ customers, registered representatives and salespersons); and/or other specified services intended to assist in the distribution and marketing of the
Fund, client/Alger Affiliates accounts and other products. Such payments may be a fixed dollar amount; may be based on the number of customer accounts maintained by an Intermediary; may be based on a
percentage of the value of interests sold to, or held by, customers of the Intermediary involved; or may be calculated on another basis. The payments may also, to the extent permitted by applicable regulations,
contribute to various non-cash and cash incentive arrangements to promote certain products, as well as sponsor various educational programs, sales contests and/or promotions. Furthermore, subject to
applicable law, such payments may also pay for the travel expenses, meals, lodging and entertainment of Intermediaries and their salespersons and guests in connection with educational, sales and promotional
programs. The additional payments by Alger Affiliates may also compensate Intermediaries for
subaccounting, administrative and/or shareholder processing or other investor services that are in addition to the fees paid for these services by such products.
The payments made by Alger Affiliates or the Fund may be different for different Intermediaries. The payments may be negotiated based on a range of factors, including but not limited to, ability to attract
and retain assets, target markets, customer relationships, quality of service and industry reputation. Payment arrangements may include breakpoints in compensation which provide that the percentage rate of
compensation varies as the dollar value of the amount sold or invested through an Intermediary
increases. The presence of these payments and the basis on which an Intermediary compensates its registered representatives or salespersons may create an incentive for a particular Intermediary, registered representative or salesperson to highlight, feature or recommend certain products based, at least in part,
on the level of compensation paid.
Potential Conflicts in Connection with Brokerage Transactions
Trade Aggregation. If Alger Management believes that the purchase or sale of a security is in the best interest of
more than one client/Alger Affiliates account (including the Fund), it may (but is not obligated to) aggregate the orders to be sold or purchased to seek favorable
execution or lower brokerage commissions, to the extent permitted by applicable laws and regulations. Aggregation of trades under this circumstance may, on average, decrease the costs of execution. In the event Alger Management aggregates
a trade for participating accounts, the method of allocation will generally be determined prior to the trade execution. Although no specific method of allocation of trades is expected to be used, allocations are
generally pro rata and if not, will be designed so as not to systematically and consciously favor or disfavor any account in the allocation of investment opportunities. The accounts aggregated may include
registered and unregistered investment companies, Alger Affiliates Accounts (including the Fund), and separate accounts. Transaction costs will be shared by participants on a pro-rata basis according to their
allocations. Alger Management may delay the execution of a trade for a client account so it may be included as part of an aggregated trade.
When orders are aggregated for execution, it is possible that Alger Affiliates will benefit from such trades, even in limited capacity situations. Alger Management maintains policies and procedures that it
believes are reasonably designed to deal equitably with conflicts of interest that may arise when purchase or sale orders for an account are aggregated for execution with orders for Alger Affiliates Accounts. Alger Management may aggregate trades for its clients and affiliates in private placements pursuant to internally developed procedures. In such cases, Alger Management will only negotiate the price of such investments,
and no other material terms of the offering, and will prepare a written allocation statement reflecting the allocation of the securities.
Orders to purchase or sell the same security need not be aggregated if there is a reasonable distinction between or among the orders. For example, orders that are not price specific need not be aggregated with
orders that are to be executed at a specific price. Also, certain short sale trades may not be aggregated due to settlement issues and may not trade sequentially in order to maintain the average trade price.
Alger Management is not required to bunch or aggregate trades if portfolio
management decisions for different accounts are made separately, or if it determines that bunching or aggregating is not practicable, or with respect to client directed accounts.
Even when trades are aggregated, prevailing trading activity frequently may make impossible the receipt of the same price or execution on the entire volume of securities purchased or sold. When this
occurs, the various prices may be averaged, and the Fund will be charged or credited with the average price. Thus, the effect of the aggregation may operate on some occasions to the disadvantage of the Fund.
In addition, under certain circumstances, the Fund will not be charged the same commission or
commission equivalent rates in connection with a bunched or aggregated order.
Soft Dollars. Alger Management relies primarily on its own internal research to provide primary research in
connection with buy and sell recommendations. However, Alger Management does acquire research services provided by a third party vendor, which it pays for with brokerage
fees and commissions, sometimes referred to as “soft dollars.” The services that Alger Management may receive include: management meetings; conferences; research on specific industries; research on specific
companies; macroeconomic analyses; analyses of national and international events and trends;
evaluations of thinly traded securities; computerized trading screening techniques and securities ranking services; general research services (i.e. Bloomberg, FactSet).
Alger Management may pay higher commissions for receipt of brokerage and research services in connection with securities trades that are consistent with the “safe harbor” provisions of Section 28(e) of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”). This benefits Alger Management because it does not have to pay for the research, products, or services. Such benefit gives
Alger Management an incentive to select a broker-dealer based on its interest in receiving the research, products, or services rather than on its clients’ interest in receiving the most favorable execution.
Research or other
services obtained in this manner may be used in servicing any or all of the Fund and other client/Alger Affiliates accounts. This includes accounts other than those that
pay commissions to the broker providing soft dollar benefits. Therefore, such products and services may disproportionately benefit certain client/Alger Affiliates accounts, including the Fund, to the extent that the commissions
from such accounts are not used to purchase such services.
Neither the research services nor the amount of brokerage given to a
particular broker-dealer are made through an arrangement or commitment that obligates Alger Management to pay selected broker-dealers for the services provided.
Alger Management has entered into certain commission sharing arrangements. A commission sharing arrangement allows Alger Management to aggregate commissions at a particular broker-dealer, and to
direct that particular broker-dealer to pay various other broker-dealers from this pool of aggregate commissions for research and research services the broker-dealers have provided to Alger Management.
These arrangements allow Alger Management to limit the broker-dealers it trades with, while maintaining valuable research relationships.
Additionally, Alger Management receives a credit for routing orders through a fixed connection with a national securities exchange, which is applied to the costs of research services.
In certain cases, a research service may serve additional functions that are not related to the making of investment decisions (such as accounting, record keeping or other administrative matters). Where a
product obtained with commissions has such a mixed use, Alger Management will make a good faith allocation of the cost of the product according to its use. Alger Management will not use soft dollars to
pay for services that provide only administrative or other non-research assistance.
Appendix
Description of certain rating categories assigned by S&P Global
Ratings, a division of S&P Global Inc. (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”), Fitch, Inc.
(“Fitch”), Dominion Bond Rating Service Limited (“DBRS”) and A. M. Best Company, Inc. (“Best”).
Commercial Paper and Short-Term Ratings
The designation A-l by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those issues determined to possess overwhelming safety characteristics are denoted with a plus sign (+) designation. Capacity for timely payment on issues with an A-2 designation is
strong. However, the relative degree of safety is not as high as for issues designated A-l.
The rating Prime-l (P-l) is the highest commercial paper rating assigned by
Moody’s. Issuers of P-l paper must have a superior capacity for repayment of short-term promissory obligations and ordinarily will be evidenced by leading market positions in well-established industries, high rates of return of funds employed, conservative capitalization structures with moderate reliance on debt and ample asset
protection, broad margins in earnings coverage of fixed financial charges and high internal cash generation, and well-established access to a range of financial markets and assured sources of alternate
liquidity. Issues rated Prime-2 (P-2) have a strong capacity for repayment of short-term promissory obligations. This ordinarily will be evidenced by many of the characteristics cited above, but to a lesser
degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
The rating Fitch-l (Highest Grade) is the highest commercial paper rating assigned by Fitch. Paper rated Fitch-l is regarded as having the strongest degree of assurance for timely payment. The rating
Fitch-2 (Very Good Grade) is the second highest commercial paper rating assigned by Fitch which reflects an assurance of timely payment only slightly less in degree than the strongest issues.
Bond and Long-Term Ratings S&P
Bonds rated AA by S&P are judged by S&P to be high-grade obligations and in the majority of instances differ only in small degree from issues rated AAA (S&P’s highest rating). Bonds rated AAA are considered by S&P to be the highest grade obligations and possess the ultimate degree of protection as to principal and interest. With AA bonds, as with AAA bonds, prices move with the long-term money market.
Bonds rated A by S&P have a strong capacity to pay principal and interest, although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
S&P’s
BBB-rated bonds, or medium-grade category bonds, are borderline between definitely sound obligations and those where the speculative elements begin to predominate. These
bonds have adequate asset coverage and normally are protected by satisfactory earnings. Their susceptibility to changing conditions, particularly to depressions, necessitates constant watching. These bonds generally are more
responsive to business and trade conditions than to interest rates. This group is the lowest that qualifies for commercial bank investment.
Debt rated BB and B by S&P is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.
Debt rated BB has less near-term vulnerability to default than other speculative grade debt. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions
that could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB rating.
Debt rated B by S&P has greater vulnerability to default but presently
has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions would likely impair capacity or willingness to pay interest and repay principal. The B rating category also is used for debt subordinated to senior debt that is assigned an actual or implied BB or B rating.
MOODY’S
Bonds rated Aa by Moody’s are judged to be of high quality by all
standards. Together with bonds rated Aaa (Moody’s highest rating) they comprise what are generally known as high-grade bonds. Aa bonds are rated lower than Aaa bonds because margins of protection may not be as large as those of Aaa
bonds, or fluctuation of protective elements may be of greater amplitude, or there may be other elements present that make the long-term risks appear somewhat larger than those applicable to Aaa securities.
Bonds that are rated A by Moody’s possess many favorable investment attributes and are to be considered as upper medium-grade obligations. Factors giving security to principal and interest are considered
adequate, but elements may be present that suggest a susceptibility to impairment in the future.
Moody’s Baa-rated bonds are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present, but certain protective elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in fact, have speculative characteristics as well.
Bonds rated Ba by Moody’s are judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.
Bonds rated B by Moody’s generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of
time may be small.
Moody’s applies the numerical modifiers 1, 2 and 3 to each generic rating classification from Aa through B. The modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.
FITCH
Bonds rated AAA by Fitch are judged by Fitch to be strictly high-grade, broadly marketable, suitable for investment by trustees and fiduciary institutions and liable to but slight market fluctuation other than through changes in the money rate. The prime feature of an AAA bond is a showing of earnings several
times or many times interest requirements, with such stability of applicable earnings that safety is beyond reasonable question whatever changes occur in conditions. Bonds rated AA by Fitch are judged by Fitch to
be of safety virtually beyond question and are readily salable, whose merits are not unlike those of the AAA class, but whose margin of safety is less strikingly broad.
The issue may be the obligation of a small company, strongly secured but influenced as to rating by the lesser financial power of the enterprise and more local type of market.
Bonds rated A by Fitch are considered to be investment grade and of high credit quality. The obligor’s ability to pay interest and repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than bonds with higher ratings.
BBB-rated bonds are considered to be investment grade and of satisfactory
credit quality. The obligor’s ability to pay interest and repay principal is considered to be adequate. Adverse changes in economic conditions and circumstances, however, are more likely to have adverse impact on these bonds,
and therefore impair timely payment. The likelihood that the ratings of these bonds will fall below investment grade is higher than for bonds with higher ratings.
Fitch’s BB-rated bonds are considered speculative. The obligor’s ability to pay interest and repay principal may be affected over time by adverse economic changes. However, business and financial
alternatives can be identified which could assist the obligor in satisfying its debt service requirements.
Fitch’s B-rated bonds are considered highly speculative. While bonds
in this class are currently meeting debt service requirements, the probability of continued timely payment of principal and interest reflects the obligor’s limited margin of safety and the need for reasonable business and economic activity throughout the life of the issue.
DBRS
Bonds rated AAA by DBRS are considered to be of the highest credit quality, with exceptionally strong protection for the timely repayment of principal and interest. Earnings are considered stable, the
structure of the industry in which the entity operates is strong, and the outlook for future profitability is favorable. There are few qualifying factors present which would detract from the performance of the
entity, the strength of liquidity and coverage ratios is unquestioned and the entity has established a creditable track record of superior performance. Given the extremely tough definition which DBRS has
established for this category, few entities are able to achieve a AAA rating.
Bonds rated AA are of superior credit quality, and protection of interest
and principal is considered high. In many cases, they differ from bonds rated AAA only to a small degree. Given the extremely tough definition which DBRS has for the AAA category (which few companies are able to achieve), entities rated
AA are also considered to be strong credits which typically exemplify above-average strength in key areas of consideration and are unlikely to be significantly affected by reasonably foreseeable events.
Bonds rated A are of satisfactory credit quality. Protection of interest
and principal is still substantial, but the degree of strength is less than with AA rated entities. While a respectable rating, entities in the A category are considered to be more susceptible to adverse economic conditions and have greater cyclical
tendencies than higher rated companies.
Bonds rated BBB are considered to be of adequate credit quality. Protection of interest and principal is considered adequate, but the entity is more susceptible to adverse changes in financial and economic
conditions, or there may be other adversities present which reduce the strength of the entity and its rated securities.
Bonds rated BB are defined to be speculative, where the degree of protection afforded interest and principal is uncertain, particularly during periods of economic recession. Entities in the BB area typically have limited access to capital markets and additional liquidity support and, in many cases, small size or
lack of competitive strength may be additional negative considerations.
Bonds rated “B” are regarded as highly speculative and there is a reasonably high level of uncertainty as to the ability of the entity to pay interest and principal on a continuing basis in the future, especially in periods of economic recession or industry adversity.
A.M. Best
The issuer of long-term debt rated aaa has, in A.M. Best’s opinion, an exceptional ability to meet the terms of its obligation. The rating aa is assigned to issues where the issuer has, in A.M. Best’s opinion, a very strong ability to meet the terms of its obligation., and issues are rated a where the ability to meet the terms of the obligation is regarded as strong. The issuer of debt rated bbb is considered to have an
adequate ability to meet the terms of its obligation but to be more susceptible to changes in economic or other conditions.
The issuer of bb-rated long-term debt has, in A.M. Best’s opinion, speculative credit characteristics, generally due to a moderate margin of principal and interest payment protection and vulnerability to
economic changes. The issuer of long-term debt rated b is considered to have extremely speculative credit characteristics, generally due to a modest margin of principal and interest payment protection and
extreme vulnerability to economic changes.
Investment Manager:
Fred Alger Management, LLC
360 Park Avenue South
New York, New York 10010
Distributor:
Fred Alger & Company, LLC
360 Park Avenue South
New York, New York 10010
Transfer Agent:
Alger Family of Funds
c/o UMB Fund Services, Inc.
P.O. Box 2175
Milwaukee, WI 53201-2175
Custodian Bank:
Brown Brothers Harriman & Co.
50 Post Office Square
Boston, Massachusetts 02110
Independent Registered Public
Accounting Firm:
[__]
Counsel:
Proskauer Rose LLP
11 Times Square
New York, New York 10036
The Alger Funds
STATEMENT OF
ADDITIONAL
INFORMATION
[__], 2021
PART C
OTHER INFORMATION
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Articles of Incorporation: |
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Amended and Restated Declaration of Trust for The Alger Funds (“Registrant”), dated September 13, 2012
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Amendment to Declaration of Trust, dated May 21, 2013 (Alger International Growth Fund) (
Incorporated
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Amendment to Declaration of Trust, dated August 7, 2015 (Alger Small Cap Focus Fund) (
Incorporated by
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Amendment to Declaration of Trust, dated August 7, 2017 (Alger SMid Cap Focus Fund) (
Incorporated by
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Amendment to Declaration of Trust, dated August 9, 2018 (Alger International Focus Fund) (
Incorporated
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Amendment to Declaration of Trust, dated November 15, 2018 (Alger Mid Cap Focus Fund) (
Incorporated
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Amendment to Declaration of Trust, dated September 24, 2019 (Alger Weatherbie Specialized Growth
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Amendment to Declaration of Trust, dated December 18, 2020 (Alger Mid Cap Focus Fund) (
Incorporated
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Certificate of Termination of the Amended and Restated Certificate of Designation for Alger 25 Fund,
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Amendment to Declaration of Trust, dated May 12, 2021 (Alger Mid Cap Focus Fund) (
Incorporated by
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Amendment to Declaration of Trust, dated September 22, 2021 (Alger Weatherbie Enduring Growth Fund)
(to be filed by amendment) |
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Amendment to Declaration of Trust, dated September 22, 2021 (Alger Small Cap Growth Fund) (to be filed
by amendment) |
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Amendment to Declaration of Trust, dated September 22, 2021 (Alger 35 Fund) (to be filed by amendment) |
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Instruments Defining Rights of Security Holders: See Exhibits (a-1) and (b) |
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Investment Advisory Contracts: |
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Investment Advisory Agreement between Registrant and Fred Alger Management, LLC (“FAM”), dated
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Amendment to Investment Advisory Agreement (Alger 25 Fund), dated December 19, 2017 (
Incorporated
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Amendment to Investment Advisory Agreement (Alger 35 Fund), dated March 22, 2018 (
Incorporated by
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Amendment to Investment Advisory Agreement (Alger 25 Fund), dated September 17, 2018 (
Incorporated
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Amendment to Investment Advisory Agreement (Alger 35 Fund), dated September 17, 2018 (
Incorporated
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Amendment to Investment Advisory Agreement including Revised Fee Schedule, dated January 4, 2021
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Amendment to Investment Advisory Agreement including Revised Fee Schedule, dated September 22, 2021
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Contract to Support Fee Waiver/Expense Reimbursement (Alger 35 Fund) (filed herewith) |
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Amendment to Sub-Advisory Agreement, dated September 22, 2021 (filed herewith) |
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Amended and Restated Distribution Agreement between Registrant and Fred Alger & Company, LLC,
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Bonus or Profit Sharing Contracts: Not applicable. |
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Custodian Agreement between Registrant and Brown Brothers Harriman & Co. (“BBH”), dated February
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Amendment to Custodian Agreement, dated [__], 2021 (to be filed by amendment) |
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Other Material Contracts: |
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Shareholder Administrative Services Agreement among FAM, Registrant, et. al. effective February 28, 2005
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Amendment No. 1 to Shareholder Administrative Services Agreement, effective June 30, 2007
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Amendment No. 2 to Shareholder Administrative Services Agreement, effective June 30, 2010
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Amendment No. 3 to Shareholder Administrative Services Agreement, effective Dec. 29, 2010
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Amendment No. 4 to Shareholder Administrative Services Agreement, effective August 1, 2016
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Amendment No. 5 to Shareholder Administrative Services Agreement, effective December 28, 2017
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Amendment No. 6 to Shareholder Administrative Services Agreement, effective September 29, 2020
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Amendment No. 7 to Shareholder Administrative Services Agreement, effective September 22, 2021 (filed |
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Transfer Agency Agreement Between Certain Investment Companies Managed by FAM (including
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Amendment to Transfer Agency Agreement, dated [__], 2021 (to be filed by amendment) |
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Fund Administration Agreement between FAM and Registrant, dated September 22, 2021 (filed herewith) |
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Accounting Agency Agreement between Registrant and BBH, dated February 29, 2008 (
Incorporated by
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Amendment to the Accounting Agency Agreement between Registrant and BBH, dated June 1, 2009
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Amendment to the Accounting Agency Agreement between Registrant and BBH, dated October 24, 2011
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Amendment to the Accounting Agency Agreement between Registrant and BBH, dated January 6, 2017
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Amendment to the Accounting Agency Agreement between Registrant and BBH, dated August 17, 2017
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Amendment to the Accounting Agency Agreement between Registrant and BBH, dated June 1, 2018
|
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Amendment to the Accounting Agency Agreement between Registrant and BBH, dated October 15, 2018
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Amendment to the Accounting Agency Agreement between Registrant and BBH, dated [__], 2021 (to be
filed by amendment) |
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Opinion of Sullivan & Worcester (Alger Mid Cap Focus Fund, Class A and Class C) (
Incorporated by
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Opinion of Sullivan & Worcester (Alger Weatherbie Enduring Growth Fund) (to be filed by amendment) |
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Opinion of Sullivan & Worcester (Alger Small Cap Growth Fund, Class Y) (to be filed by amendment) |
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Other Opinions: Consent of Independent Registered Public Accounting Firm (to be filed by amendment) |
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Omitted Financial Statements: Not applicable. |
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Initial Capital Agreements: |
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Purchase Agreement for Alger Balanced Portfolio EDGAR 6/2/97 (Incorporated by reference to Post-
Effective Amendment No. 8 to the Statement, filed with the SEC on April 3,
1992) |
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Purchase Agreement for Alger MidCap Growth Portfolio EDGAR 6/2/97 (Incorporated by reference to
Post-Effective Amendment No. 10 to the Registration Statement, filed with
the SEC on March 24, 1993) |
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Purchase Agreement for Alger Leveraged AllCap Portfolio EDGAR 6/2/97 (Incorporated by reference to
Post-Effective Amendment No. 12 to the Registration Statement, filed with
the SEC on October 29, 1993) |
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Purchase Agreement for Alger Small Capitalization Portfolio (Form of) EDGAR 6/2/97 (Incorporated by
reference to Post-Effective Amendment No. 26 to the Registration Statement,
filed with the SEC on February 25, 1998)
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Purchase Agreement for Alger Growth Portfolio (Form of) EDGAR 6/2/97 (Incorporated by reference to
Post-Effective Amendment No. 26 to the Registration Statement, filed with
the SEC on February 25, 1998) |
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Rule 18f-3 Plan: Rule 18f-3 Multiple Class Plan, dated September 22, 2021 (filed herewith) |
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Powers of Attorney: Powers of Attorney executed by Hal Liebes, Michael D. Martins, Hilary M. Alger,
Charles F. Baird, Jr., Roger P. Cheever, Stephen E. O’Neil, David
Rosenberg and Nathan E. Saint-Amand,
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XBRL Instance Document – the instance document does not appear on the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document.
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XBRL Taxonomy Extension Schema |
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XBRL Taxomony Extension Calculation Linkbase |
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XBRL Taxomony Extension Definition Linkbase |
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XBRL Taxomony Extension Label Linkbase |
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XBRL Taxonomy Extension Presentation Linkbase |
Item 29.
PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Under Section 8.4 of Registrant’s Agreement and Declaration of Trust,
any past or present Trustee or officer of Registrant (including persons who serve at Registrant’s request as directors, officers or Trustees of another organization
in which Registrant has any interest as a shareholder, creditor or otherwise (hereinafter referred to as a “Covered Person”)) is indemnified to the fullest extent permitted by law against liability and all expenses reasonably incurred by him in connection with any action, suit or proceeding to which he may be a party or otherwise involved by reason of his being or having been a Covered Person. This provision does not authorize indemnification when it is determined, in the manner specified in the Agreement and Declaration of Trust, that such Covered Person has not acted in good faith in the reasonable belief that his actions were in or not opposed to the best interests of Registrant. Moreover, this provision does not authorize indemnification when it is determined, in the manner specified in the Agreement and Declaration of Trust, that such Covered Person would otherwise be liable to Registrant or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of his duties. Expenses may be paid by Registrant in advance of the final disposition of any action, suit or proceeding upon receipt of an undertaking by such Covered Person to repay such expenses to Registrant in the event that it is ultimately determined that indemnification of such expenses is not authorized under the Agreement and Declaration of Trust and either (i) the Covered Person provides security for such undertaking, (ii) Registrant is insured against losses from such advances, or (iii) the disinterested Trustees or independent legal counsel determines, in the manner specified in the Agreement and Declaration of Trust, that there is reason to believe the Covered Person will be found to be entitled to indemnification.
Insofar as indemnification for liability arising under the Securities Act of 1933 (the “Securities Act”) may be permitted to Trustees, officers and controlling persons of Registrant pursuant to the foregoing provisions, or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission (the “SEC”) such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a Trustee, officer or controlling person of Registrant in the successful defense of any action, suit or proceeding) is asserted by such Trustee, officer or controlling person in connection with the securities being registered, Registrant will, unless in the
opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Item 31.
BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Fred Alger Management, LLC (“Alger
Management”), which serves as investment manager to the Fund, is generally engaged in rendering investment advisory services to institutions and, to a lesser
extent, individuals. Alger Management presently serves as investment adviser to five open-end investment companies and one ETF, including the Registrant.
Set forth below is the name and principal business address of each company, excluding Alger Management advised funds, for which a director or officer of Alger Management serves as a director, officer or employee:
Alger Alternative Holdings, LLC
Alger Apple Real Estate, LLC
Alger Associates, Inc.
Alger Boulder I LLC
Alger Capital, LLC
Alger Group Holdings, LLC
Alger International Holdings
Fred Alger & Company, LLC
The Foundation for Alger Families
360 Park Avenue South
New York, New York 10010
Alger Management, Ltd.
78 Brook Street
London
W1K 5EF
United Kingdom
Alger-Weatherbie Holdings, LLC
Weatherbie Capital, LLC
265 Franklin Street
Boston, Massachusetts 02110
Listed below are the
officers of Alger Management.
NAME AND POSITION WITH ALGER MANAGEMENT |
OTHER SUBSTANTIAL BUSINESS, PROFESSION OR VOCATION |
Daniel C. Chung
Chairman, President and Chief Executive Officer |
President and Chief Executive Officer, Alger Associates,
Inc., Alger Capital, LLC, Alger Group Holdings, LLC,
Alger Apple Real Estate, LLC and Alger Boulder I LLC;
Manager, Weatherbie Capital, LLC; Director, Alger
Management, Ltd. and Alger SICAV; Director and
Chairman, Alger International Holdings; President, Chief
Executive Officer and Manager, Alger Alternative
Holdings, LLC; Chairman, President and Manager, Alger-
Weatherbie Holdings, LLC; President and Director, The
Foundation for Alger Families |
Robert Kincel
Chief Financial Officer, Senior Vice President and
Treasurer |
Chief Financial Officer and Treasurer, Alger Associates,
Inc.; Chief Financial Officer, Treasurer and Senior Vice
President, Fred Alger & Company, LLC; Treasurer and
Manager, Weatherbie Capital, LLC and Alger-Weatherbie
Holdings, LLC; Director, Alger International Holdings;
Chief Financial Officer, Treasurer and Manager, Alger
Alternative Holdings, LLC; Chief Financial Officer,
Treasurer and Vice President, Alger Capital, LLC and Alger
Group Holdings, LLC; Treasurer, Alger Apple Real Estate,
LLC and Alger Boulder I LLC; Treasurer and Director, The
Foundation for Alger Families; Authorized Signer, Alger
Management, Ltd. |
Hal Liebes
Executive Vice President, Chief Operating Officer and
Secretary |
Chief Operating Officer and Secretary, Alger Associates,
Inc.; Chief Operating Officer, Secretary and Manager,
Alger Alternative Holdings, LLC; Director, Alger SICAV,
Alger International Holdings, and Alger Dynamic Return
Offshore Fund; Vice President, Chief Operating Officer,
Managing Member, and Secretary, Alger Capital, LLC and
Alger Group Holdings, LLC; Executive Director and
Chairman, Alger Management, Ltd.; Manager and
Secretary, Weatherbie Capital, LLC and Alger Apple Real
Estate LLC; Manager, Alger Partners Investors I, LLC,
Alger-Weatherbie Holdings, LLC and Alger Partners
Investors KEIGF; Secretary, Alger Boulder I LLC; Director
and Secretary, The Foundation for Alger Families;
Managing Member, Fred Alger & Company, LLC |
Tina Payne
Senior Vice President, General Counsel, Chief Compliance
Officer |
Senior Vice President, General Counsel, and Secretary, Fred
Alger & Company, LLC; Chief Compliance Officer, Alger
Management, Ltd.; Assistant Secretary, Weatherbie Capital,
LLC, Alger Alternative Holdings, LLC and Alger-
Weatherbie Holdings, LLC; Vice President and Assistant
Secretary, Alger Group Holdings, LLC |
For more information as to the business, profession, vocation
or employment of a substantial nature of additional officers of Alger Management, reference is made to Alger Management’s current Form ADV (SEC File No. 801-06709)
filed under the Investment Advisers Act of 1940, incorporated herein by reference.
Item 32.
PRINCIPAL UNDERWRITER
|
Fred Alger & Company, LLC (“Alger LLC”) acts as principal underwriter for Registrant, The Alger
Institutional Funds, The Alger Portfolios, The Alger Funds II, Alger Global
Focus Fund, and The Alger ETF Trust. |
|
Alger LLC is a Delaware limited liability company located at 360 Park Avenue South, New York, New York
10010. The following is a list of the directors and officers of Alger
LLC: |
|
POSITION(s) AND OFFICE(S) WITH ALGER LLC |
POSITION(s) AND OFFICE(S) WITH REGISTRANT |
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POSITION(s) AND OFFICE(S) WITH ALGER LLC |
POSITION(s) AND OFFICE(S) WITH REGISTRANT |
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President, Principal Executive Officer |
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Treasurer, Principal Financial Officer |
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Secretary, Chief Compliance Officer, Chief Legal Officer |
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Item 33.
LOCATION OF ACCOUNTS AND RECORDS
All accounts and records of Registrant are maintained by Mr. Robert
Kincel, Alger LLC, Harborside Plaza 5, 185 Hudson Street, Suite 2310, Jersey City, NJ 07311.
Item 34.
MANAGEMENT SERVICES
Not applicable.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant has duly caused this Post-Effective Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of New York and State of New York on the 23rd day of September, 2021.
Pursuant to the requirements of the Securities Act of 1933, this Amendment has
been signed below by the following persons in the capacities and on the dates
indicated.
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President (Principal Executive Officer) |
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Treasurer (Principal Financial Officer) |
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Hal Liebes Attorney-In-Fact |
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Exhibit Index
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Amendment to Investment Advisory Agreement including Revised Fee Schedule, dated September 22, 2021 |
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Contract to Support Fee Waiver/Expense Reimbursement |
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Contract to Support Fee Waiver/Expense Reimbursement (Alger 35 Fund) |
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Amendment to Sub-Advisory Agreement, dated September 22, 2021 |
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Amendment No. 7 to Shareholder Administrative Services Agreement, effective September 22, 2021 |
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Fund Administration Agreement between FAM and Registrant, dated September 22, 2021 |
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Class A Distribution Plan, dated September 22, 2021 |
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Class C Distribution Plan, dated September 22, 2021 |
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Class I Distribution Plan, dated September 22, 2021 |
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Rule 18f-3 Multiple Class Plan, dated September 22, 2021 |
Exhibit (d-9)
AMENDMENT TO
INVESTMENT
ADVISORY AGREEMENT
WHEREAS, Fred Alger Management, LLC (Alger Management) and The Alger Funds (the Trust)
entered into an investment advisory agreement dated February 14, 2007 (as amended, supplemented and/or restated to date, the Agreement) to provide certain investment advisory services to the Trust and each of its series (the
Funds); and
WHEREAS, shareholders of Alger 35 Fund (the 35 Fund), a series of the Trust, voted to change the
investment advisory fee of the 35 Fund on December 18, 2020; and
WHEREAS, effective May 7, 2021, all of the assets of Alger 25
Fund were transferred to Alger 35 Fund in a tax free exchange of shares and Alger 25 Fund was subsequently terminated; and
WHEREAS, the
Trust and Alger Management desire to update the fee schedules to the Agreement to reflect these changes and the launch of an additional Fund;
NOW THEREFORE, in consideration of the promises and mutual covenants contained herein, the parties hereby amend the Agreement, effective as of
November 1, 2021, as follows:
1. Schedule I of the Agreement is hereby deleted in its entirety and replaced with Schedule I as
attached and incorporated by reference to this amendment.
2. Schedule III of the Agreement is hereby deleted in its entirety.
3. Except as otherwise provided herein, the terms and conditions contained in the Agreement shall remain in full force and effect. Capitalized
terms herein that are not defined shall have the meanings ascribed to them in the Agreement.
IN WITNESS WHEREOF, the parties by their
duly authorized officers, have caused this Amendment to be executed as of September 22, 2021.
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THE ALGER FUNDS |
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FRED ALGER MANAGEMENT, LLC |
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By: |
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/s/ Tina Payne |
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By: |
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/s/ Tina Payne |
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Name: |
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Tina Payne |
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Name: |
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Tina Payne |
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Title: |
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Secretary, CCO |
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Title: |
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SVP, General Counsel, CCO |
SCHEDULE I
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Name of Fund |
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Annual Fee as Percentage of Average Daily Net Assets |
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Reapproval Date |
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Alger Capital Appreciation Fund |
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.81% for assets up to $2 billion;
.65% for assets between $2 billion and $3 billion; .60%
for assets between $3 billion and $4 billion; .55% for assets between $4 billion and $5 billion;
.45% for assets in excess of $5 billion |
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October 31 |
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Alger International Focus Fund |
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.71% for assets up to $1 billion;
.60% for assets in excess of $1 billion |
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October 31 |
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Alger Mid Cap Growth Fund |
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.76% for assets up to $1 billion;
.70% for assets in excess of $1 billion |
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October 31 |
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Alger Weatherbie Specialized Growth Fund |
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.81% for assets up to $1 billion;
.75% for assets in excess of $1 billion |
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October 31 |
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Alger Small Cap Growth Fund |
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.81% for assets up to $1 billion;
.75% for assets in excess of $1 billion |
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October 31 |
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Alger Small Cap Focus Fund |
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.75% |
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October 31 |
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Alger Health Sciences Fund |
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.55% |
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October 31 |
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Alger Growth & Income Fund |
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.50% |
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October 31 |
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Alger Mid Cap Focus Fund |
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.70% for assets up to $250 million;
.50% for assets in excess of $250 million |
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October 31 |
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Alger 35 Fund |
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0.45% |
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October 31 |
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Alger Weatherbie Enduring Growth Fund |
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.70% for assets up to $250 million;
.50% for assets in excess of $250 million |
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October 31 |
Exhibit (d-10)
September 22, 2021
The Alger Funds
360 Park Avenue South
New York, NY 10010
Dear Sirs:
Fred Alger Management, LLC
(FAM) hereby agrees to waive fees owed to it by, or to reimburse expenses of, the share classes of each series (each, a Fund) of The Alger Funds (the Trust) listed on Schedule A for the expense cap period
indicated. FAM will waive its fees and/or reimburse expenses to the extent total operating expenses exceed the rate of average daily net assets indicated on Schedule A. This expense limitation does not include acquired fund fees and expenses,
dividend expense on short sales, borrowing costs, interest, taxes, brokerage and extraordinary expenses.
FAM understands and intends that
the Trust will rely on this agreement in preparing and filing its registration statements on Form N-1A and in accruing each Funds expenses for purposes of calculating net asset value and for other
purposes.
This Agreement may only be amended or terminated prior to its expiration date by agreement between FAM and the Trusts
Board of Trustees, and will terminate automatically in the event of termination of the Investment Advisory Agreement between FAM and the Trust, on behalf of each Fund. FAM may, during the two-year period of
this Agreement, recoup any fees waived or expenses reimbursed pursuant to this Agreement to the extent that such recoupment would not cause the expense ratio to exceed the stated limitation in effect at the time of (i) the waiver or
reimbursement and (ii) the recoupment by FAM, after repayment of the recoupment is taken into account.
Please acknowledge acceptance
on the enclosed copy of this letter.
Very truly yours,
|
Fred Alger Management, LLC |
|
/s/ Tina Payne |
By: Tina Payne, SVP, CCO, General Counsel |
Accepted by:
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The Alger Funds |
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/s/ Hal Liebes |
By: Hal Liebes, President |
SCHEDULE A
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Fund Name |
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Share Class |
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Fiscal Year End |
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Expense Cap |
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Expense Cap Period |
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Alger Capital Appreciation Fund |
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Z |
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October 31 |
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0.85% |
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February 28, 2022 February 29, 2024 |
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Alger International Focus Fund |
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I |
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October 31 |
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1.25% |
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February 28, 2022 February 29, 2024 |
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Alger International Focus Fund |
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Z |
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October 31 |
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0.84% |
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February 28, 2022 February 29, 2024 |
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Alger Mid Cap Growth Fund |
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Z |
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October 31 |
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0.99% |
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February 28, 2022 February 29, 2024 |
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Alger Mid Cap Focus Fund |
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A |
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October 31 |
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1.15% |
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February 28, 2022 February 29, 2024 |
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Alger Mid Cap Focus Fund |
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C |
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October 31 |
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1.90% |
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February 28, 2022 February 29, 2024 |
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Alger Mid Cap Focus Fund |
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I |
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October 31 |
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1.20% |
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February 28, 2022 February 29, 2024 |
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Alger Mid Cap Focus Fund |
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Y |
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October 31 |
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0.69% |
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February 28, 2022 February 29, 2024 |
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Alger Mid Cap Focus Fund |
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Z |
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October 31 |
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0.99% |
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February 28, 2022 February 29, 2024 |
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Alger Weatherbie Specialized Growth Fund |
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Y |
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October 31 |
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0.87% |
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February 28, 2022 February 29, 2024 |
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Alger Small Cap Growth Fund |
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Y |
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October 31 |
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0.84% |
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Inception February 29, 2024 |
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Alger Small Cap Growth Fund |
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Z |
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October 31 |
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0.99% |
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February 28, 2022 February 29, 2024 |
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Alger Small Cap Focus Fund |
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Y |
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October 31 |
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0.85% |
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February 28, 2022 February 29, 2024 |
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Alger Health Sciences Fund |
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Z |
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October 31 |
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0.75% |
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February 28, 2022 February 29, 2024 |
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Alger Weatherbie Enduring Growth Fund |
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A |
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October 31 |
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1.15% |
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Inception February 29, 2024 |
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Alger Weatherbie Enduring Growth Fund |
|
C |
|
October 31 |
|
1.85% |
|
Inception February 29, 2024 |
|
|
|
|
|
Alger Weatherbie Enduring Growth Fund |
|
I |
|
October 31 |
|
1.10% |
|
Inception February 29, 2024 |
|
|
|
|
|
Alger Weatherbie Enduring Growth Fund |
|
Y |
|
October 31 |
|
0.70% |
|
Inception February 29, 2024 |
|
|
|
|
|
Alger Weatherbie Enduring Growth Fund |
|
Z |
|
October 31 |
|
0.75% |
|
Inception February 29, 2024 |
2
Exhibit (d-11)
September 22, 2021
The Alger Funds
360 Park Avenue South
New York, NY 10010
Dear Sirs:
Fred Alger Management, LLC
(FAM) hereby agrees to reimburse other expenses of the series (the Fund) of The Alger Funds (the Trust) listed on Schedule A. This expense reimbursement arrangement will remain in place for the life of the Fund.
FAM will reimburse expenses to the extent other Fund operating expenses, excluding the investment advisory fee paid by the Trust to FAM, on behalf of the Fund, exceed the rate of average daily net assets indicated on Schedule A. This expense
reimbursement arrangement does not include dividend expense on short sales, borrowing costs, interest, taxes, brokerage and extraordinary expenses.
FAM understands and intends that the Trust will rely on this agreement in preparing and filing its registration statements on Form N-1A and in accruing the Funds expenses for purposes of calculating net asset value and for other purposes.
This agreement may not be terminated during the life of the Fund, may only be amended prior to the termination of the Fund by agreement
between FAM and the Trusts board of trustees, and will terminate automatically in the event of termination of the Investment Advisory Agreement between FAM and the Trust, on behalf of the Fund.
Please acknowledge acceptance on the enclosed copy of this letter.
Very truly yours,
|
Fred Alger Management, LLC |
|
/s/ Tina Payne |
By: Tina Payne, SVP |
Accepted by:
|
The Alger Funds |
|
/s/ Hal Liebes |
By: Hal Liebes, President |
SCHEDULE A
|
|
|
|
|
Portfolio Name |
|
Share Class |
|
Expense Cap |
Alger 35 Fund |
|
Z |
|
0.10% |
2
Exhibit (d-14)
AMENDMENT TO
SUB-INVESTMENT ADVISORY AGREEMENT
WHEREAS, Fred Alger Management, LLC (the Adviser) and
Weatherbie Capital, LLC (Weatherbie) entered into a sub-investment advisory agreement dated March 1, 2017 (as amended, supplemented and/or restated to date, the Agreement) for
Weatherbie to provide certain sub-investment advisory services to certain series (collectively, the Series) of each of The Alger Funds, The Alger Funds II and The Alger Portfolios; and
WHEREAS, Weatherbie and the Adviser desire to update Schedule I of the Agreement to a new series of The Alger Funds;
NOW THEREFORE, in consideration of the promises and mutual covenants contained herein, the parties hereby amend the Agreement as follows:
1. Schedule I of the Agreement is hereby deleted in its entirety and replaced with Schedule I as attached and incorporated by reference to
this amendment.
2. Except as otherwise provided herein, the terms and conditions contained in the Agreement shall remain in full force
and effect. Capitalized terms herein that are not defined shall have the meanings ascribed to them in the Agreement.
IN WITNESS WHEREOF,
the parties by their duly authorized officers, have caused this Amendment to be executed as of September 22, 2021.
|
|
|
|
|
|
|
|
|
WEATHERBIE CAPITAL, LLC |
|
|
|
FRED ALGER MANAGEMENT, LLC |
|
|
|
|
|
By: |
|
/s/ Tina Payne |
|
|
|
By: |
|
/s/ Tina Payne |
Name: |
|
Tina Payne |
|
|
|
Name: |
|
Tina Payne |
Title: |
|
Assistant Secretary |
|
|
|
Title: |
|
SVP, General Counsel, CCO |
SCHEDULE I
|
|
|
|
|
|
|
Name of Series |
|
Annual Fee |
|
Reapproval Date |
|
Reapproval Day |
Alger Weatherbie Specialized Growth Fund, a series of The Alger Funds |
|
Amount equal to 70% of management fee paid by Series to Adviser with respect to the sub-advised assets |
|
September 12, 2017 |
|
October 31 |
Alger Weatherbie Enduring Growth Fund, a series of The Alger Funds |
|
Amount equal to 70% of management fee paid by Series to Adviser with respect to the sub-advised assets |
|
September 30, 2022 |
|
October 31 |
Alger Weatherbie Specialized Growth Portfolio, a series of The Alger Portfolios |
|
Amount equal to 70% of management fee paid by Series to Adviser with respect to the sub-advised assets |
|
September 12, 2017 |
|
October 31 |
Alger Dynamic Opportunities Fund, a series of The Alger Funds II |
|
Amount equal to 70% of management fee paid by Series to Adviser with respect to the sub-advised assets |
|
September 12, 2017 |
|
October 31 |
Exhibit (h-8)
AMENDMENT NO. 7 TO
SHAREHOLDER ADMINISTRATIVE SERVICES AGREEMENT
WHEREAS, Each of the investment companies listed in Schedule A hereto (each, a Fund and collectively, the Funds) and
Fred Alger Management, LLC (Alger Management) entered into a Shareholder Administrative Services Agreement dated February 28, 2005, as amended June 30, 2007, May 18, 2010, December 29, 2010, August 1, 2016,
December 28, 2017 and September 29, 2020 (the Agreement); and
WHERAS, effective October 5, 2019, UMB Fund
Services, Inc. (UMB) became the transfer agent for each Fund pursuant to a Transfer Agency Agreement between UMB and each Fund (the Transfer Agency Agreement); and
WHEREAS, each Fund desires for Alger Management to supervise certain aspects of the transfer agent operations for the series of each Fund
(each, a Portfolio and collectively, the Portfolios) under the Transfer Agency Agreement and provide certain shareholder administrative services to the Portfolios, other than as provided by Alger Management under its
investment advisory agreement and fund administrative services agreement with each Fund; and
WHEREAS, the Funds and Alger Management
desire to amend the Agreement to reflect the current share classes of each Portfolio;
NOW, THEREFORE, in consideration of the foregoing
and the terms and conditions set forth in the Agreement, the parties agree as follows:
1. Paragraph 2 of the Agreement is deleted in its
entirety and replaced with the following:
2. Alger Management hereby undertakes to provide the following shareholder
administrative services for the Portfolios:
|
a. |
Monitor service level standards and participate in continuous improvement sessions; |
|
|
b. |
Perform annual review of UMBs independent control review reports (SOC1 Report) to ensure adequate
controls in place and are operating as designed; |
|
c. |
Provide on-going information to UMB regarding Alger Managements
new products, modifications, and initiatives as they relate to the Portfolios; |
|
d. |
Periodically monitor UMBs phone representatives to ensure high quality service standards and product
knowledge; |
|
e. |
Review and implement jointly with UMB new system functionality; |
|
f. |
Recommend, review and approve any procedural changes necessary to meet regulatory changes, to improve
shareholder servicing, or to maintain competitive edge within the shareholder servicing industry; |
|
|
g. |
Monitor UMBs Blue Sky process to ensure that the Funds are appropriately registered in each state and
territory; |
|
|
h. |
Review UMBs lost shareholder escheatment process and approve accounts to be escheated to states in
compliance with each states and territorys unclaimed property laws; |
|
|
i. |
Facilitate responses to information requests from regulatory bodies, trustees, or other internal departments;
|
|
|
j. |
Provide problem resolution and approval for exception processing; |
|
|
k. |
Investigate, resolve and record shareholder complaints; |
|
|
l. |
Review and approve shareholder communication relating to quarterly and annual shareholder statements and tax
reporting; |
|
|
m. |
Confirm transfer agent regulatory compliance, including compliance with the USA Patriot Act of 2001, per
oversight of UMBs performance under the Transfer Agency Agreement; |
|
|
n. |
Review and approve payment of UMB invoices; and |
|
|
o. |
Ensure all reporting requirements are met under the Transfer Agency Agreement, including standard reports and ad-hoc report requests. |
|
2. Paragraph 3 of the Agreement is deleted in its entirety and replaced with the following:
3. For the services provided by Alger Management under the Agreement, each Fund will pay Alger Management an asset based fee
of 0.0165% (1.65 basis points) with respect to Class A, B, and C shares of its Portfolios, and 0.01% (1 basis point) with respect to Class I, R, I-2, S, Y, Z and
Z-2 shares of its Portfolios, plus out-of-pocket expenses incurred by Alger Management in performing its responsibilities under
the Agreement, within 10 days of the first day of each month.
3. Except as otherwise provided herein, the terms and conditions contained
in the Agreement shall remain in full force and effect. Capitalized terms herein that are not defined shall have the meanings ascribed to them in the Agreement.
2
IN WITNESS WHEREOF, the parties by their duly authorized officers, have caused this Amendment to
be executed as of September 22, 2021.
|
|
|
FRED ALGER MANAGEMENT, LLC |
|
|
By: |
|
/s/ Tina Payne |
Name: Tina Payne Title: SVP, CCO,
General Counsel |
|
ALGER GLOBAL FOCUS FUND |
|
|
By: |
|
/s/ Tina Payne |
Name: Tina Payne Title:
Secretary |
|
THE ALGER FUNDS |
|
|
By: |
|
/s/ Tina Payne |
Name: Tina Payne Title:
Secretary |
|
THE ALGER FUNDS II |
|
|
By: |
|
/s/ Tina Payne |
Name: Tina Payne Title:
Secretary |
|
THE ALGER INSTITUTIONAL FUNDS |
|
|
By: |
|
/s/ Tina Payne |
Name: Tina Payne Title:
Secretary |
|
THE ALGER PORTFOLIOS |
|
|
By: |
|
/s/ Tina Payne |
Name: Tina Payne Title:
Secretary |
3
EXHIBIT A
Alger Global Focus Fund
The Alger Funds
The Alger Funds II
The Alger Institutional Funds
The Alger Portfolios
4
Exhibit (h-11)
THE ALGER FUNDS
FUND
ADMINISTRATION AGREEMENT
September 22, 2021
Fred
Alger Management, LLC
360 Park Avenue South
New York, New
York 10010
Dear Sirs:
The Alger Funds (the
Fund), an unincorporated business trust organized under the laws of the Commonwealth of Massachusetts, on behalf of its series named on Schedule I hereto, as such Schedule may be revised from time to time (each, a Portfolio),
herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing and reinvesting the same in
investments of the type and in accordance with the limitations specified in its charter documents and in its Prospectuses and Statement of Additional Information as from time to time in effect, copies of which have been or will be submitted to you,
and in such manner and to such extent as from time to time may be approved by the Funds Board of Trustees (the Board). The Fund desires to employ you to act as its fund administrator pursuant to this Agreement.
In this connection it is understood that from time to time you will employ or associate with yourself such person or persons as you may
believe to be particularly fitted to assist in the performance of this Agreement. Such person or persons may be officers or employees who are employed by both you and the Fund. Additionally, in rendering services hereunder, you may, subject to the
approval of the Board, cause such services or any portion thereof to be provided by another person pursuant to a sub-administration agreement; provided that in such event you shall remain responsible
for monitoring and overseeing the performance by such person of its obligation to the Fund under such sub-administration agreement. Subject to the approval of the Board, the fees and out-of-pocket expenses charged by such person in performing these services will be paid or reimbursed by the Fund and will not reduce the fees paid to you.
Subject to the supervision and control of the Board, and except as provided in the Investment Advisory Agreement or the Shareholder
Administrative Services Agreement, you will be responsible under this Agreement for overseeing all aspects of the Funds operations. You will oversee: accounting and bookkeeping services, preparation of financial statements, tax returns, state
registration and Blue Sky filings, and calculation of the net asset value of each Portfolios shares. You will supply legal services, and internal executive and administrative services; and prepare reports to each Portfolios stockholders,
and reports to and filings with the Securities and Exchange Commission. Without limiting the foregoing, you agree, during the term of this Agreement, to be responsible for:
|
(a) |
providing office space, telephone, office equipment and supplies for the Fund; |
|
(b) |
paying compensation of the Funds officers for services rendered as such; |
|
(c) |
authorizing expenditures and approving bills for payment on behalf of the Fund; |
|
(d) |
preparation of the periodic updating of the Funds Registration Statement, including the Prospectuses and
Statement of Additional Information, for the purpose of filings with the Securities and Exchange Commission and monitoring and maintaining the effectiveness of such filings, as appropriate; |
|
(e) |
supervising preparation of periodic reports to each Portfolios shareholders and filing of these reports
with the Securities and Exchange Commission, notices of dividends, capital gains distributions and tax credits, and attending to routine correspondence and other communications with individual shareholders; |
|
(f) |
overseeing the daily pricing of each Portfolios investment portfolio and the publication of the net asset
value of each Portfolios shares, earnings reports and other financial data by the Funds accounting agent; |
|
(g) |
monitoring relationships with organizations providing services to the Fund, including the Funds
accounting agent, custodian, Blue Sky filing agent and printers; |
|
(h) |
supervising compliance by the Fund with recordkeeping and periodic reporting requirements under the Investment
Company Act of 1940, as amended (the 1940 Act) and regulations thereunder, maintaining books and records for the Fund (other than those maintained by the Funds custodian and transfer agent) and supervising the preparation of tax
reports other than the Funds income tax returns; |
|
(i) |
preparation of materials for meetings of the Board and preparation of minutes of such meetings;
|
|
(j) |
oversight of service providers who file claims for class action lawsuits with respect to securities in the
Fund; |
|
(k) |
arranging for the Fund the required fidelity bond and other insurance, if applicable; |
|
(l) |
providing executive, clerical and secretarial help needed to carry out these responsibilities;
|
|
(m) |
compliance monitoring of each Portfolios investment guidelines and 1940 Act restrictions; and
|
|
(n) |
supervising the proxy voting process, maintaining appropriate proxy voting policies and procedures, and
maintaining appropriate proxy voting records for the Portfolios. |
You shall exercise your best judgment in rendering the
services to be provided hereunder and the Fund agrees as an inducement to your undertaking the same that you shall not be liable hereunder for any error of judgment or mistake of law or for any loss suffered by the Fund, provided that nothing herein
shall be deemed to protect or purport to protect you against any liability to the Fund or to its security holders to which you would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of your
duties hereunder, or by reason of your reckless disregard of your obligations and duties hereunder.
In consideration of the services
rendered pursuant to this Agreement, the Fund will pay you on the first business day of each calendar month a fee at the annual rate set forth opposite each Portfolios name on Schedule I hereto. Net asset value shall be computed on such days
and at such time or times as described in the Funds then-current Prospectus and Statement of Additional Information. The fee for the period from the effective date of this Agreement to the end of the month in which such date occurs shall be pro-rated according to the proportion which such period bears to the full monthly period, and upon any termination of this Agreement before the end of any month, the fee for such part of a month shall be pro-rated according to the proportion which such period bears to the full monthly period and shall be payable upon the date of termination of this Agreement.
-2-
For the purpose of determining fees payable to you, the value of each Portfolios net assets
shall be computed in the manner specified in the Funds charter documents for the computation of the value of each Portfolios net assets.
You will bear all expenses in connection with the performance of your services under this Agreement, except, subject to Board approval, the
fees and out-of-pocket expenses charged for a third party system, unaffiliated vendor, software licensing and such other related fees will be paid or reimbursed by the
Fund and will not reduce the fees paid to you. All other expenses to be incurred in the operation of the Fund will be borne by the Fund, except to the extent specifically assumed by you pursuant to your Investment Management Agreement with the Fund.
The Fund understands that you now act and will continue to act as administrator of various investment companies and fiduciary or other
managed accounts, and the Fund has no objection to your so acting. In addition, it is understood that the persons employed by you to assist in the performance of duties hereunder will not devote their full time to such service and nothing contained
herein shall be deemed to limit or restrict the right of you or the right of any of your affiliates to engage in and devote time and attention to other businesses or to render services of whatever kind or nature.
Any person, even though also your officer, director, partner, employee or agent, who may be or become an officer, Board member, employee or
agent of the Fund, shall be deemed, when rendering services to the Fund or acting on any business of the Fund, to be rendering such services to or acting solely for the Fund and not as an officer, director, partner, employee, or agent or one under
your control or direction even though paid by you.
As to each Portfolio, this Agreement shall continue automatically for successive
annual periods ending on September 30th of each year, provided such continuance is specifically approved at least annually by (i) the Board or (ii) vote of a majority (as defined in the
1940 Act) of such Portfolios outstanding voting securities, provided that in either event its continuance also is approved by a majority of the Board members who are not interested persons (as defined in the 1940 Act) of any party
to this Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval. As to each Portfolio, this Agreement is terminable without penalty, on 60 days notice, by the Board or by vote of holders of a
majority of such Portfolios shares or, upon not less than 60 days notice, by you. This Agreement also will terminate automatically in the event of its assignment (as defined in the 1940 Act).
This Agreement has been executed on behalf of the Fund by the undersigned officer of the Fund in his or her capacity as an officer of the
Fund. The obligations of this Agreement shall only be binding upon the assets and property of the Fund and shall not be binding upon any Board member, officer or shareholder of the Fund individually.
If the foregoing is in accordance with your understanding, kindly so indicate by signing and returning to us the enclosed copy hereof.
-3-
|
|
|
Very truly yours, |
|
THE ALGER FUNDS |
|
|
By: |
|
/s/ Hal Liebes |
|
|
Hal Liebes, President |
|
|
|
Accepted: |
|
FRED ALGER MANAGEMENT, LLC |
|
|
By: |
|
/s/ Tina Payne |
|
|
Tina Payne, SVP, CCO and General Counsel |
-4-
SCHEDULE I
|
|
|
Name of Portfolio |
|
Annual Fee as a Percentage of Average Daily Net Assets |
Alger Capital Appreciation Fund |
|
0.0275% |
Alger Growth & Income Fund |
|
0.0275% |
Alger Health Sciences Fund |
|
0.0275% |
Alger International Focus Fund |
|
0.0275% |
Alger Mid Cap Focus Fund |
|
0.0275% |
Alger Mid Cap Growth Fund |
|
0.0275% |
Alger Small Cap Focus Fund |
|
0.0275% |
Alger Small Cap Growth Fund |
|
0.0275% |
Alger Weatherbie Specialized Growth Fund |
|
0.0275% |
Alger Weatherbie Enduring Growth Fund |
|
0.0275% |
Alger 35 Fund |
|
0.0275% |
-5-
Exhibit (m-1)
CLASS A DISTRIBUTION PLAN OF
THE ALGER FUNDS
Pursuant
to the provisions of Rule 12b-1 under the Investment Company Act of 1940, as amended (the Act), this Rule 12b-1 Plan (the Plan) has been adopted
for The Alger Funds (the Fund) with respect to the Class A Shares of each of its series listed on Schedule A hereto, as such Schedule may be amended in writing from time to time (each, a Portfolio), by a majority of the
members of the Funds Board of Trustees (the Board), and separately by a majority of the members who are not interested persons of the Fund, as such term is defined in the Act, and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related to the Plan (the Independent Trustees), at a meeting called for the purpose of voting on this Plan.
|
1. |
Shareholder Services and Distribution Expenses. Under the Plan, Fred Alger & Company, LLC
(Alger LLC), the Funds distributor, will be paid by the Fund, on behalf of each Portfolio, a distribution and/or service (12b-1) fee computed at an annual rate of up to 0.25% of the average
daily net assets allocable to the Class A Shares of the Portfolio, and such fee will be charged only to the Class A shareholders. Subject to the limitations described below, the distribution and/or service
(12b-1) fee will be used by Alger LLC for expenses incurred in the promotion and distribution of the Class A Shares, as well as to provide compensation for ongoing servicing and/or maintenance of
shareholder accounts. Compensation for expenses incurred in the promotion and distribution of the Class A Shares may be used to finance any activity which is primarily intended to result in the sale of Class A Shares including, but not
limited to, expenses of organizing and conducting sales seminars, advertising programs, printing prospectuses, statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and
distribution of advertising material and sales literature, overhead, supplemental payments to dealers and other institutions as asset-based sales charges or as payments of commissions or service fees by Alger LLC, and the costs of administering the
Plan. Compensation for expenses incurred in providing ongoing servicing and/or maintenance of shareholder accounts may be used to cover an allocable portion of overhead and other Alger LLC and selected dealer office expenses related to the servicing
and/or maintenance of shareholder accounts, and payments by Alger LLC to persons, including Alger LLC employees, who respond to inquiries of shareholders of the Fund regarding their ownership of shares or their accounts with the Fund or who provide
other similar services not otherwise required to be provided by the Funds investment manager, transfer agent, administrator or other agent of the Fund. To the extent that amounts paid hereunder to and retained by Alger LLC are not used
specifically to reimburse Alger LLC for any such expense, such amounts may be treated as compensation for Alger LLCs shareholder services and distribution-related services. All amounts expended pursuant to the Plan shall be paid to Alger LLC
and are the legal obligation of the Fund and not Alger LLC. |
|
2. |
Periodic Reporting. Alger LLC shall prepare reports for the Board on a quarterly basis showing amounts
paid pursuant to this Plan and any other related agreement, the purpose for such expenditure, and such other information as from time to time shall be reasonably requested by the Board. |
|
3. |
Continuance. This Plan shall continue in effect with respect to each Portfolio indefinitely, provided
that such continuance is approved at least annually by a vote of a majority of the Board, and separately by a majority of the Independent Trustees, cast in person at a meeting called for such purpose. |
|
4. |
Additional Portfolios. The Plan shall become effective with respect to Portfolios not currently listed
on Schedule A hereto upon obtaining the requisite approvals with respect to such Portfolios in accordance with Sections 3 and 6 hereto. |
|
5. |
Termination. This Plan may be terminated with respect to a Portfolio at any time without penalty by vote
of a majority of the Independent Trustees or by vote of the majority of the outstanding Class A Shares of the Portfolio. |
|
6. |
Amendment. This Plan may not be amended to materially increase the amount payable for distribution to
Alger LLC by the Fund without the vote of a majority of the outstanding Class A Shares of each Portfolio. All material amendments to this Plan must in any event be approved by a vote of a majority of the Board, and separately by a majority of
the Independent Trustees, cast in person at a meeting called for such purpose. |
|
7. |
Related Agreements. Any agreement related to this Plan shall be in writing and shall provide:
|
|
a. |
That such agreement may be terminated with respect to a Portfolio at any time, without payment of any penalty,
by vote of a majority of the Independent Trustees or by vote of a majority of the outstanding Class A Shares of the Portfolio, on not more than sixty (60) days written notice to any other party to the agreement; and
|
|
b. |
that such agreement shall terminate automatically in the event of its assignment. |
|
8. |
Governance Standards. So long as this Plan is in effect, the Fund will comply with the provisions of
Rule 12b-1(c). |
|
9. |
Recordkeeping. The Fund will preserve copies of this Plan, all related agreements, and all reports made
pursuant to Paragraph 2 above for a period of not less than six (6) years from the date of this Plan or any such agreement or report, as the case may be, the first two (2) years in an easily accessible place. |
|
10. |
Limitation of Liability. Any obligation of the Fund hereunder shall be binding only upon the assets of
the Fund and shall not be binding on any trustee, officer, employee, agent, or shareholder of the Fund. Neither the authorization of any action by the trustees or shareholders of the Fund nor the adoption of the Plan on behalf of the Fund shall
impose any liability upon any trustees or upon any shareholder. |
|
11. |
Definitions. The terms interested person, vote of a majority of the outstanding voting
securities and assignment shall have the meanings set forth in the Act and the rules and regulations thereunder. |
Dated September 22, 2021
Schedule A
Alger Capital Appreciation Fund
Alger International Focus Fund
Alger Mid Cap Focus Fund
Alger Mid
Cap Growth Fund
Alger Weatherbie Specialized Growth Fund
Alger Small Cap Growth Fund
Alger
Small Cap Focus Fund
Alger Health Sciences Fund
Alger Growth & Income Fund
Alger Weatherbie Enduring Growth Fund
Exhibit (m-3)
CLASS C DISTRIBUTION PLAN OF
THE ALGER FUNDS
Pursuant
to the provisions of Rule 12b-1 under the Investment Company Act of 1940, as amended (the Act), this Rule 12b-1 Plan (the Plan) has been adopted
for The Alger Funds (the Fund) with respect to the Class C Shares of each of its series listed on Schedule A hereto, as such Schedule may be amended in writing from time to time (each, a Portfolio), by a majority of the
members of the Funds Board of Trustees (the Board), and separately by a majority of the members who are not interested persons of the Fund, as such term is defined in the Act, and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related to the Plan (the Independent Trustees), at a meeting called for the purpose of voting on this Plan, and it has been approved by a majority of the outstanding
Class C Shares of each Portfolio with respect to which Rule 12b-1 requires such approval.
|
1. |
Distribution Expenses. The Fund may incur, as a distributor of its Class C Shares, expenses at the
annual rate of 0.75% of the average daily net assets of the Fund allocable to the Class C Shares, subject to any limitation imposed from time to time by law or regulation. Such expenses shall be charged only to the Class C Shares.
|
|
2. |
Expenses Covered by the Plan. Amounts expended as set forth in Section 1 may be used to
finance any activity which is primarily intended to result in the sale of Class C Shares including, but not limited to expenses of organizing and conducting sales seminars, advertising programs, finders fees, printing prospectuses,
statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and distribution of advertising material and sales literature, overhead, supplemental payments to dealers and other
institutions as asset-based sales charges or as payments of commissions or service fees by Fred Alger & Company, LLC, the Funds distributor (Alger LLC), and the costs of administering the Plan. To the extent that amounts
paid hereunder to and retained by Alger LLC are not used specifically to reimburse Alger LLC for any such expense, such amounts may be treated as compensation for Alger LLCs distribution-related services. All amounts expended pursuant to the
Plan shall be paid to Alger LLC and are the legal obligation of the Fund and not Alger LLC. |
|
3. |
Shareholder Services. Under the Plan, Alger LLC will be paid by the Fund, on behalf of each Portfolio, a
distribution and/or service (12b-1) fee computed at an annual rate of up to 0.25% of the average daily net assets allocable to the Class C Shares of the Portfolio, and such fee will be charged only to the
Class C shareholders. The distribution and/or service (12b-1) fee will be used by Alger LLC to provide compensation for ongoing servicing and/or maintenance of shareholder accounts and to cover an
allocable portion of overhead and other Alger LLC and selected dealer office expenses related to the servicing and/or maintenance of shareholder accounts. Compensation will be paid by Alger LLC to persons, including Alger LLC employees, who respond
to inquiries of shareholders of the Fund regarding their ownership of shares or their accounts with the Fund or who provide other similar services not otherwise required to be provided by the Funds investment manager, transfer agent,
administrator or other agent of the Fund. |
|
4. |
Periodic Reporting. Alger LLC shall prepare reports for the Board on a quarterly basis showing amounts
paid pursuant to this Plan and any other related agreement, the purpose for such expenditure, and such other information as from time to time shall be reasonably requested by the Board. |
|
5. |
Continuance. This Plan shall continue in effect with respect to each Portfolio indefinitely, provided
that such continuance is approved at least annually by a vote of a majority of the Board, and separately by a majority of the Independent Trustees, cast in person at a meeting called for such purpose. |
|
6. |
Additional Portfolios. The Plan shall become effective with respect to Portfolios not currently listed
on Schedule A hereto upon obtaining the requisite approvals with respect to such Portfolios in accordance with Sections 5 and 8 hereto. |
|
7. |
Termination. This Plan may be terminated with respect to a Portfolio at any time without penalty by vote
of a majority of the Independent Trustees or by vote of the majority of the outstanding Class C Shares of the Portfolio. |
|
8. |
Amendment. This Plan may not be amended to materially increase the amount payable for distribution to
Alger LLC by the Fund without the vote of a majority of the outstanding Class C Shares of each Portfolio. All material amendments to this Plan must in any event be approved by a vote of a majority of the Board, and separately by a majority of
the Independent Trustees, cast in person at a meeting called for such purpose. |
|
9. |
Related Agreements. Any agreement related to this Plan shall be in writing and shall provide:
|
|
a. |
That such agreement may be terminated with respect to a Portfolio at any time, without payment of any penalty,
by vote of a majority of the Independent Trustees or by vote of a majority of the outstanding Class C Shares of the Portfolio, on not more than sixty (60) days written notice to any other party to the agreement; and
|
|
b. |
that such agreement shall terminate automatically in the event of its assignment. |
|
10. |
Governance Standards. So long as this Plan is in effect, the Fund will comply with the provisions of
Rule 12b-1(c). |
|
11. |
Recordkeeping. The Fund will preserve copies of this Plan, and all related agreements, and all reports
made pursuant to Paragraph 2 above for a period of not less than six (6) years from the date of this Plan or any such agreement or report, as the case may be, the first two (2) years in an easily accessible place. |
|
12. |
Limitation of Liability. Any obligation of the Fund hereunder shall be binding only upon the assets of
the Fund and shall not be binding on any trustee, officer, employee, agent, or shareholder of the Fund. Neither the authorization of any action by the trustees or shareholders of the Fund nor the adoption of the Plan on behalf of the Fund shall
impose any liability upon any trustees or upon any shareholder. |
|
13. |
Definitions. The terms interested person, vote of a majority of the outstanding voting
securities and assignment shall have the meanings set forth in the Act and the rules and regulations thereunder. |
Dated September 22, 2021
Schedule A
Alger Capital Appreciation Fund
Alger International Focus Fund
Alger Mid Cap Focus Fund
Alger Mid
Cap Growth Fund
Alger Weatherbie Specialized Growth Fund
Alger Small Cap Growth Fund
Alger
Small Cap Focus Fund
Alger Health Sciences Fund
Alger Growth & Income Fund
Alger Weatherbie Enduring Growth Fund
Exhibit (m-4)
CLASS I DISTRIBUTION PLAN OF
THE ALGER FUNDS
Pursuant
to the provisions of Rule 12b-1 under the Investment Company Act of 1940, as amended (the Act), this Rule 12b-1 Plan (the Plan) has been adopted
for The Alger Funds (the Fund) with respect to the Class I Shares of each of its series listed on Schedule A hereto, as such Schedule may be amended in writing from time to time (each, a Portfolio), by a majority of the
members of the Funds Board of Trustees (the Board), and separately by a majority of the members who are not interested persons of the Fund, as such term is defined in the Act, and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related to the Plan (the Independent Trustees), at a meeting called for the purpose of voting on this Plan.
|
1. |
Shareholder Services and Distribution Expenses. Under the Plan, Fred Alger & Company, LLC
(Alger LLC), the Funds distributor, will be paid by the Fund, on behalf of each Portfolio, a distribution and/or service (12b-1) fee computed at an annual rate of up to 0.25% of the average
daily net assets allocable to the Class I Shares of the Portfolio, and such fee will be charged only to the Class I shareholders. Subject to the limitations described below, the distribution and/or service
(12b-1) fee will be used by Alger LLC for expenses incurred in the promotion and distribution of the Class I Shares, as well as to provide compensation for ongoing servicing and/or maintenance of
shareholder accounts. Compensation for expenses incurred in the promotion and distribution of the Class I Shares may be used to finance any activity which is primarily intended to result in the sale of Class I Shares including, but not
limited to, expenses of organizing and conducting sales seminars, advertising programs, printing prospectuses, statements of additional information (and supplements thereto) and reports for other than existing shareholders, preparation and
distribution of advertising material and sales literature, overhead, supplemental payments to dealers and other institutions as asset-based sales charges or as payments of commissions or service fees by Alger LLC, and the costs of administering the
Plan. Compensation for expenses incurred in providing ongoing servicing and/or maintenance of shareholder accounts may be used to cover an allocable portion of overhead and other Alger LLC and selected dealer office expenses related to the servicing
and/or maintenance of shareholder accounts, and payments by Alger LLC to persons, including Alger LLC employees, who respond to inquiries of shareholders of the Fund regarding their ownership of shares or their accounts with the Fund or who provide
other similar services not otherwise required to be provided by the Funds investment manager, transfer agent, administrator or other agent of the Fund. To the extent that amounts paid hereunder to and retained by Alger LLC are not used
specifically to reimburse Alger LLC for any such expense, such amounts may be treated as compensation for Alger LLCs shareholder services and distribution-related services. All amounts expended pursuant to the Plan shall be paid to Alger LLC
and are the legal obligation of the Fund and not Alger LLC. |
|
2. |
Periodic Reporting. Alger LLC shall prepare reports for the Board on a quarterly basis showing amounts
paid pursuant to this Plan and any other related agreement, the purpose for such expenditure, and such other information as from time to time shall be reasonably requested by the Board. |
|
3. |
Continuance. This Plan shall continue in effect with respect to each Portfolio indefinitely, provided
that such continuance is approved at least annually by a vote of a majority of the Board, and separately by a majority of the Independent Trustees, cast in person at a meeting called for such purpose. |
|
4. |
Additional Portfolios. The Plan shall become effective with respect to Portfolios not currently listed
on Schedule A hereto upon obtaining the requisite approvals with respect to such Portfolios in accordance with Sections 3 and 6 hereto. |
|
5. |
Termination. This Plan may be terminated with respect to a Portfolio at any time without penalty by vote
of a majority of the Independent Trustees or by vote of the majority of the outstanding Class I Shares of the Portfolio. |
|
6. |
Amendment. This Plan may not be amended to materially increase the amount payable for distribution to
Alger LLC by the Fund without the vote of a majority of the outstanding Class I Shares of each Portfolio. All material amendments to this Plan must in any event be approved by a vote of a majority of the Board, and separately by a majority of
the Independent Trustees, cast in person at a meeting called for such purpose. |
|
7. |
Related Agreements. Any agreement related to this Plan shall be in writing and shall provide:
|
|
a. |
That such agreement may be terminated with respect to a Portfolio at any time, without payment of any penalty,
by vote of a majority of the Independent Trustees or by vote of a majority of the outstanding Class I Shares of the Portfolio, on not more than sixty (60) days written notice to any other party to the agreement; and
|
|
b. |
that such agreement shall terminate automatically in the event of its assignment. |
|
8. |
Governance Standards. So long as this Plan is in effect, the Fund will comply with the provisions of
Rule 12b-1(c). |
|
9. |
Recordkeeping. The Fund will preserve copies of this Plan, all related agreements, and all reports made
pursuant to Paragraph 2 above for a period of not less than six (6) years from the date of this Plan or any such agreement or report, as the case may be, the first two (2) years in an easily accessible place. |
|
10. |
Limitation of Liability. Any obligation of the Fund hereunder shall be binding only upon the assets of
the Fund and shall not be binding on any trustee, officer, employee, agent, or shareholder of the Fund. Neither the authorization of any action by the trustees or shareholders of the Fund nor the adoption of the Plan on behalf of the Fund shall
impose any liability upon any trustees or upon any shareholder. |
|
11. |
Definitions. The terms interested person, vote of a majority of the outstanding voting
securities and assignment shall have the meanings set forth in the Act and the rules and regulations thereunder. |
Dated September 22, 2021
Schedule A
Alger International Focus Fund
Alger Weatherbie Specialized Growth Fund
Alger Small Cap Focus Fund
Alger
Mid Cap Focus Fund
Alger Weatherbie Enduring Growth Fund
Exhibit (n)
THE ALGER FUNDS
Rule l8f-3
Multiple Class Plan, as Amended
The Alger Funds (the Trust, and each series of the Trust, a Fund) has elected to rely on Rule
18f-3 under the Investment Company Act of 1940, as amended (the 1940 Act), in offering multiple classes of shares with differing distribution arrangements, voting rights and exchange and conversion
features.
Pursuant to Rule 18f-3, the Board of Trustees of the Trust (the Board or the
Trustees) has approved and adopted this amended written plan (the Plan) specifying the differences among the classes of shares to be offered by the Funds, including those, if any, pertaining to shareholder services,
distribution arrangements, expense allocations, and conversion and exchange features. Prior to offering any new or amended classes described herein, the Plan will be filed as an exhibit to the Funds respective registration statements. Not all
Funds may offer all the classes described in this Plan and, to the extent that a Fund does not, those provisions of the Plan are not applicable to that Fund.
I. |
ATTRIBUTES OF SHARE CLASSES |
Each share of a Fund represents an equal pro rata interest in the Fund and, except as set forth below, has identical voting rights, powers,
qualifications, terms and conditions and, in proportion to each shares net asset value, liquidation rights and preferences. The classes differ in that: (a) each class has a different class designation; (b) only the Class A
Shares are subject to a front-end sales charge (FESC); (c) only the Class B and Class C Shares are subject to contingent deferred sales charges (CDSCs), except that certain
Class A Shares may also be subject to a CDSC; (d) Class A, Class B, Class C, and Class I Shares are subject to different distribution and shareholder servicing fees (Rule
12b-1 fees) under plans adopted pursuant to Rule l2b-1 under the 1940 Act (each a Rule 12b-1 Plan); (e) to the
extent that one class alone is affected by a matter submitted to a vote of the shareholders, then only that class has voting power on the matter; (f) the exchange privileges of each class may differ from those of the other classes;
(g) Class B Shares and Class C Shares may automatically convert to Class A Shares after designated holding periods; and (h) Class A, Class B, Class C, Class I, Class P, Class Y, and Class Z
Shares are subject to different fees, including transfer agency, sub-transfer agency, and shareholder administrative services fees pursuant to agreements approved by the Board.
Class A Shares are generally sold to (1) retail and institutional customers and (2) persons entitled to exchange into Class A Shares under
the exchange privileges of the Trust.
1. Sales Loads. Class A Shares are sold subject to the current maximum FESC (with scheduled variations
or eliminations of the sales charge, as permitted by the 1940 Act), except that certain Class A Shares for which the FESC has been eliminated may instead be subject to a CDSC.
2. Rule 12b-1 Fees. Class A Shares are subject to a Rule 12b-1 fee
pursuant to the Class A Shares Rule 12b-1 Plan, for distribution and shareholder servicing services, of 0.25% of the average daily net assets of Class A Shares. Each Fund may pay the
distributor, Fred Alger & Company, LLC (Alger & Co.), from the Rule 12b-1 fee, up to 0.25% of the value of the average daily net assets of its Class A Shares for ongoing
servicing and/or maintenance of shareholder accounts.
3. Class Expenses. No expenses are allocated particularly to Class A Shares other than
(i) the Rule 12b-1 fee and (ii) other expenses, not including advisory or custodial fees or other expenses related to the management of the Funds assets, provided these expenses are actually
incurred in a different amount by Class A Shares, or if Class A Shares receive services of a different kind or to a different degree than other classes.
4. Exchange Privileges and Conversion Features. Class A Shares are exchangeable for Class A Shares of the other Funds of the Trust,
Class A Shares of Alger Global Focus Fund, Class A Shares of The Alger Funds II and Class A shares of The Alger Institutional Funds. Additionally, the Board has authorized Fred Alger Management, LLC to grant permission from time to
time for omnibus accounts to exchange Class A Shares for Class I Shares or Class Z Shares of the same Fund of the Trust, and for Class I Shares of The Alger Institutional Funds, and to exchange Class C Shares for
Class A Shares of the same Fund of the Trust. Class A Shares have no conversion features.
Class B shares are generally sold to (1) retail and institutional customers and (2) persons entitled to exchange into Class B Shares under
the exchange privileges of the Trust. Shares of the Trust outstanding on the date that multiple classes of shares were first made available have been redesignated Class B Shares.
1. Sales Loads. Class B Shares are sold without the imposition of any FESC, but are subject to a CDSC (with scheduled variations or eliminations
of the sales charge, as permitted by the 1940 Act).
2. Rule 12b-1 Fees. Class B Shares are subject to
a Rule 12b-1 fee pursuant to the Class B Shares Rule 12b-1 Plan, for distribution and shareholder servicing services, not to exceed 1.00% of the average daily
net assets of Class B Shares. Each Fund may pay Alger & Co., from the Rule 12b-1 fee, up to 0.25% of the value of the average daily net assets of its Class B Shares for ongoing servicing
and/or maintenance of shareholder accounts. Each Fund may pay Alger & Co., from the Rule 12b-1 fee, up to 0.75% of the value of the average daily net assets of its Class B Shares for
distribution.
3. Class Expenses. No expenses are allocated particularly to Class B Shares other than (i) the Rule 12b-1 fee and (ii) other expenses, not including advisory or custodial fees or other expenses related to the management of the Funds assets, provided these expenses are actually incurred in a different
amount by Class B Shares, or if Class B Shares receive services of a different kind or to a different degree than other classes.
4. Exchange
Privileges and Conversion Features. Class B Shares are exchangeable for Class B Shares of the other Funds of the Trust. Class B Shares may automatically convert to Class A Shares eight years after purchase or at such other
time as set forth in the applicable prospectus of the Fund.
Class C Shares are generally sold to (1) retail and institutional customers and (2) persons entitled to exchange into Class C Shares under
the exchange privileges of the Trust.
1. Sales Loads. Class C Shares are subject to a CDSC (with scheduled variations or eliminations of the
sales charge, as permitted by the 1940 Act) and, commencing such date as the appropriate post-effective amendment to the Trusts registration statement on Form N-lA becomes effective, will be sold subject to the current maximum FESC (with
scheduled variations or eliminations of the sales charge, as permitted by the 1940 Act).
2. Rule 12b-1
Fees. Class C Shares are subject to a Rule 12b-1 fee pursuant to the Class C Shares Rule 12b-1 Plan, for distribution and shareholder servicing
services, of 1.00% of the average daily net assets of Class C Shares. Each Fund may pay Alger & Co., from the Rule 12b-1 fee, up to 0.25% of the value of the average daily net assets of its
Class C Shares for ongoing servicing and/or maintenance of shareholder accounts. Each Fund may pay Alger & Co., from the Rule 12b-1 fee, up to 0.75% of the value of the average daily net assets
of its Class C Shares for distribution.
3. Class Expenses. No expenses are allocated particularly to Class C Shares other than
(i) the Rule 12b-1 fee and (ii) other expenses, not including advisory or custodial fees or other expenses related to the management of the Funds assets, provided these expenses are actually
incurred in a different amount by Class C Shares, or if Class C Shares receive services of a different kind or to a different degree than other classes.
4. Exchange Privileges and Conversion Features. Class C Shares are exchangeable for Class C Shares of the other Funds of the Trust,
Class C Shares of Alger Global Focus Fund, Class C Shares of The Alger Funds II and Class C Shares of The Alger Institutional Funds. Additionally, the Board has authorized Fred Alger Management, LLC to grant permission from time to
time for omnibus accounts to exchange Class C Shares for Class A Shares, Class I Shares, or Class Z Shares of the same Fund of the Trust, and for Class I Shares of The Alger Institutional Funds. Class C Shares may
automatically convert to Class A shares eight years after purchase or at such other time as set forth in the applicable prospectus of the Fund.
Class I Shares are generally sold to (1) institutional customers, and (2) persons entitled to exchange into Class I Shares under the
exchange privileges of the Trust.
1. Sales Loads. Class I Shares are not subject to an FESC or CDSC.
2. Rule 12b-1 Fees. Class I Shares are subject to a Rule 12b-1 fee
pursuant to the Class I Shares Rule 12b-1 Plan, for distribution and shareholder servicing services, of 0.25% of the average daily net assets of Class I Shares. Each Fund may pay
Alger & Co., from the Rule 12b-1 fee, up to 0.25% of the value of the average daily net assets of its Class I Shares for ongoing servicing and/or maintenance of shareholder accounts.
3. Class Expenses. No expenses are allocated particularly to Class I Shares other than (i) the Rule
12b-1 fee and (ii) other expenses, not including advisory or custodial fees or other expenses related to the management of the Funds assets, provided these expenses are actually incurred in a
different amount by Class I Shares, or if Class I Shares receive services of a different kind or to a different degree than other classes.
4.
Exchange Privileges and Conversion Features. Class I Shares are exchangeable for Class I Shares of the other Funds of the Trust, Class I Shares of The Alger Institutional Funds, Class I Shares of The Alger Funds II, or
Class I Shares of Alger Global Focus Fund. Additionally, the Board has authorized Fred Alger Management, LLC to grant permission from time to time for omnibus accounts to exchange Class A Shares or Class C Shares for Class I
Shares of the same Fund of the Trust. There are no conversion features associated with Class I Shares.
Class Y Shares are generally sold to (1) institutional customers and (2) persons entitled to exchange into Class Y Shares under the
exchange privileges of the Trust.
1. Sales Loads. Class Y Shares are not subject to an FESC or CDSC.
2. Rule 12b-1 Fees. Class Y Shares are not subject to a Rule 12b-1
fee.
3. Class Expenses. No expenses are allocated particularly to Class Y Shares other than other expenses, not including advisory or
custodial fees or other expenses related to the management of the Funds assets, provided these expenses are actually incurred in a different amount by Class Y Shares, or if Class Y Shares receive services of a different kind or to a
different degree than other classes.
4. Exchange Privileges and Conversion Features. Class Y Shares are exchangeable for Class Y Shares
of the other Funds of the Trust. From time to time, omnibus accounts may be permitted to exchange Class A Shares, Class I Shares, or Class Z Shares for Class Y Shares of the same Fund of the Trust. Additionally, Class Y
Shares held in non-retirement accounts may be converted to Class I Shares of the same Fund of the Trust, and Class Y Shares held in retirement accounts may be converted to Class Z shares of the
same Fund of the Trust, if a shareholder no longer satisfies the minimum investment requirements or other conditions of eligibility to participate in Class Y Shares as are set forth in the applicable prospectus or statement of additional
information of the Fund. A shareholder must be given 60 days prior notice of any such proposed conversion. Any such conversion will be effected on the basis of the relative net asset value of the two classes, without the imposition of any
sales load, fee, or other charge.
Class Z Shares are generally sold to (1) institutional customers, and (2) persons entitled to exchange into Class Z Shares under the
exchange privileges of the Trust.
1. Sales Loads. Class Z Shares are not subject to an FESC or CDSC.
2. Rule 12b-1 Fees. Class Z Shares are not subject to a Rule 12b-1
fee.
3. Class Expenses. No expenses are allocated particularly to Class Z Shares other than other
expenses, not including advisory or custodial fees or other expenses related to the management of the Funds assets, provided these expenses are actually incurred in a different amount by Class Z Shares, or if Class Z Shares receive
services of a different kind or to a different degree than other classes.
4. Exchange Privileges and Conversion Features. Class Z Shares are
exchangeable for Class Z Shares of the Funds of the Trust, Class Z Shares of The Alger Funds II, Class Z Shares of Alger Global Focus Fund, and Class Z Shares and Class Z-2 Shares of
The Alger Institutional Funds. Additionally, the Board has authorized Fred Alger Management, LLC to grant permission from time to time for omnibus accounts to exchange Class A Shares or Class C Shares for Class Z Shares of the same
Fund of the Trust. Class Z Shares have no conversion features.
In the future, each Fund may offer additional classes of shares which differ from the classes discussed above. However, any additional classes of shares must
be approved by the Board, and the Plan must be amended to describe those classes.
II. |
APPROVAL OF MULTIPLE CLASS PLAN |
The Board, including a majority of the Trustees who are not interested persons (as defined in the 1940 Act) of the Trust, must approve the Plan
initially. In addition, the Board must approve any material changes to the classes and the Plan prior to their implementation. The Board must find that the Plan is in the best interests of each class individually and each Fund as a whole. In making
its findings, the Board should focus on, among other things, the relationships among the classes and examine potential conflicts of interest among classes regarding the allocation of fees, services, waivers and reimbursements of expenses, and voting
rights. Most significantly, the Board should evaluate the level of services provided to each class and the cost of those services to ensure that the services are appropriate and that the costs thereof are reasonable. In accordance with the foregoing
provisions of this section II, the Board has approved and adopted this Plan, as amended, as of the date written below.
III. |
DIVIDENDS AND DISTRIBUTIONS |
Because of the differences in fees described above, the dividends payable to shareholders of one class will differ from the dividends payable to shareholders
of the other classes. Dividends paid to each class of shares in each Fund will, however, be declared and paid at the same time and, except for the differences in expenses listed above, will be determined in the same manner and paid in the same
amounts per outstanding shares.
Income, realized and unrealized capital gains and losses, and Fund expenses not allocated to a particular class shall be allocated to each class on the basis
of the net asset value of that class in relation to the net asset value of the Fund.
V. |
EXPENSE WAIVER AND REIMBURSEMENT |
The Funds advisor, distributor or any other provider of services to the Fund may waive or reimburse all or a portion of:
(i) a Class Expense, as described above, or
(ii) a pro
rata allocation of the Funds expense other than a Class Expense (not including advisory or custodial fees or other expenses related to the management of the Funds assets) to a share class.
As revised: September 22, 2021