OMB APPROVAL
OMB Number: 3235-0570
Expires: August 31, 2020
Estimated average burden
hours per response 20.6
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21308
Alger Global Growth Fund
(Exact name of registrant as specified in charter)
360 Park Avenue South New York, New York 10010
(Address of principal executive offices) (Zip code)
Mr. Hal Liebes
Fred Alger Management, Inc.
360 Park Avenue South
New York, New York 10010
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-806-8800
Date of fiscal year end: October 31
Date of reporting period: October 31, 2017
ITEM 1. REPORTS TO STOCKHOLDERS.
Table of Contents
ALGER GLOBAL GROWTH FUND
| |
| Shareholders’ Letter (Unaudited) | 1 |
| Fund Highlights (Unaudited) | 8 |
| Portfolio Summary (Unaudited) | 10 |
| Schedule of Investments | 11 |
| Statement of Assets and Liabilities | 19 |
| Statement of Operations | 21 |
| Statement of Changes in Net Assets | 22 |
| Financial Highlights | 23 |
| Notes to Financial Statements | 27 |
| Report of Independent Registered Public Accounting Firm | 42 |
| Additional Information (Unaudited) | 43 |
Go Paperless With Alger Electronic Delivery Service
Alger is pleased to provide you with the ability to access regulatory materials online.
When documents such as prospectuses and annual and semi-annual reports are
available, we’ll send you an e-mail notification with a convenient link that will take you
directly to the fund information on our website. To sign up for this free service, simply
enroll at www.icsdelivery.com/alger.
Shareholders’ Letter October 31, 2017
Dear Shareholders,
Corporate Earnings Strengthen as Growth Stocks Trounce Value Stocks
During the one-year period ended October 31, 2017, strong corporate fundamentals and
economic growth continued to support the vibrant equity rally, with the S&P 500 Index
generating a noteworthy 23.63% gain. An equally dramatic trend of growth equities
outperforming value stocks continued with the 26.50% return of the S&P 500 Growth
Index substantially beating the 19.60% return of the index’s value-oriented counterpart.
Corporate Earnings Shine
The discussion in Washington of potential tax reform and other pro-growth initiatives, we
believe, appears to favorably support corporate America, and as a result, has contributed
to positive sentiment for U.S equities. We maintain, however, that corporate fundamentals,
including strong earnings combined with economic growth, have been the primary driver
of equity gains. As of the end of the reporting period, third-quarter S&P 500 earnings were
expected to increase 5.9%. As I write this letter, it appears that this past quarter will mark
the fifth consecutive quarter of earnings growth.
At Alger, our fundamental research seeks companies with strong potential for earnings
growth. We believe that a broad theme of companies developing innovative technology,
including cloud computing services, internet-connected devices, and artificial intelligence,
that can disrupt existing business models is creating attractive growth opportunities. This
trend was clearly apparent during the one year period ended September 30, 2017 of this
year with the Information Technology sector generating nearly twice the earnings-per-share
growth of the overall S&P 500 Index (11.9% vs. 6.0%).
We note that past periods of strong corporate earnings growth have resulted in increased
business spending and we believe the recent uptick in corporate earnings is likely to again
support business spending, which in turn could improve corporate productivity and provide
an additional boost to the economy.
The Economic Recovery Continues
Investors during the reporting period also reacted favorably to encouraging economic data,
such as the following developments:
• The U.S. Consumer Confidence Index climbed from 100.8 to 125.9.
• Wage growth continued with a 3.2% year-over-year increase in September.
• The Conference Board’s Leading Economic Indicator Index continued
climbing and hit a record high of 128.8 in August. The index’s September
reading of 128.6 was still high by historical standards.
Investor sentiment has also been supported by expectations for improving economic
growth globally. Indeed, Europe, Asia, and most of the Americas are on track to produce
economic growth in 2017. Corporate earnings in both developed and emerging markets
during the reporting period continued to strengthen while Purchasing Managers’ Index
readings in Europe and China were also encouraging. A perception that certain geopolitical
- 1 -
risks were moderating combined with fiscal and monetary stimulus in many countries
also supported investor sentiment. Those developments supported investor sentiment
relating to multinational corporations and extended the equity rally beyond the U.S. For
the reporting period, the MSCI ACWI ex USA Index generated a 24.20% return while the
MSCI Emerging Markets Index advanced 26.91%.
Growth Outperforms Value
The strong outperformance for growth equities during the reporting period and for the 10-
year period ended October 31, 2017 is also noteworthy. For the 10-year period, the S&P 500
Growth Index has outperformed the S&P 500 Value Index by 40.75 percent. As detailed
in a recent Alger paper “A New Perspective on Growth Versus Value” (available on Alger.
com), the biggest contributors to this “growth advantage” are the aforementioned strength
in technology companies’ earnings per share (EPS) growth and the weak performance of
low price-to-book stocks commonly found in the value category. The underperformance of
low price-to-book value stocks can be partially explained by a combination of corporations’
increasing reliance on intangible assets, accounting standards that fail to reflect those
changing business models, and the heavy reliance on one particular metric for style
classification (price-to-book value).1
Today, many businesses use fewer tangible assets, such as plants and equipment, than in the
past and they are increasingly more reliant on intangible resources, including research and
development, advertising, marketing, and training. Accounting professors Baruch Lev and
Feng Gu have observed that over the past 40 years the investment rate in physical capital fell
by 35% while the investment rate in intangible assets grew by almost 60%.2
Internet businesses are an example. They use far fewer tangible assets relative to the income
they generate than do more traditional companies, such as auto manufacturers, that have to
build large factories. For internet companies, intangible assets can include search algorithms
that attract users who in turn drive advertising revenues. User data can also be considered
an intangible asset. Such data can support advertising revenue for digital media companies
and sales for online retailers. In these examples, intangible assets generate revenues that in
turn drive earnings growth.
The problem is that accounting practices haven’t kept up with the changing economy.
Spending on intangible assets (done organically rather than through acquisitions) is not
capitalized in current accounting standards and therefore is not included in book value,
rendering the price-to-book value metric less effective in our view. New economy companies
are therefore more likely to have high market values relative to their book values and be
classified as growth companies. By relying heavily on price-to-book valuations rather
than other methods of valuation such as price-to-earnings, style classification increasingly
separates companies based on business models. For example, digital companies with higher
returns on capital are more likely to be classified as growth even if their cash flows are large
relative to their market value. These companies, broadly speaking, have used innovation
to create products and services that have resulted in high returns on capital and strong
earnings growth. In doing so, they have outperformed companies with greater capital needs,
particularly tangible assets. Indeed, low price-to-book equities have underperformed not
just the broad market, but other value equities such as those with low price-to-earnings. Slow
economic growth during the past few years has also been a headwind for value stocks, which
- 2 -
tend to be cyclical. Low interest rates, furthermore, have hurt the performance of banks,
which have more significant representation in value indexes than in growth benchmarks.
The Accelerating Speed of Innovation
The divergence in growth and value is also being driven by technological advances that
are expanding at an exponential rate, which means the rate of change is accelerating.
This acceleration is apparent most famously in Moore’s law, which explains the rate of
improvement in transistors, but we also see it in information storage (e.g., hard drives),
information transportation (e.g., fiber-optic cables), wireless telecommunications, energy,
and even illumination. 3 Technology is thus creating a potent engine to drive the economy
forward. The increasing pace of change means that newer innovations are spreading through
society faster. Older innovations such as the dishwasher and washing machine took many
decades to reach 50% penetration of the U.S. market, but more recent innovations such as
the internet and social media have taken 14 years and 9 years, respectively. The accelerating
rate of innovation may wreak havoc on value investing, which is essentially dependent on
the improvement of cheap valuations and depressed fundamentals. With change happening
more rapidly, value stocks that appear cheap may often simply be victims of change while
growth stocks may benefit as purveyors of change.
Conclusion
While we are ardent believers in growth investing, we are not suggesting that value investing
will always underperform. Rather, we maintain that the definitions of growth vs. value and
accounting standards need to evolve with the economy. We believe that investors reflexively
using “standard” but increasingly outdated valuation measures are at risk of missing
attractive equity opportunities that arise from the positive fundamental changes occurring
across industries and economies because of innovation.
At Alger, we are valuation-sensitive and our analysts and portfolio managers think intensely
about valuation and risk. However, we believe that when seeking attractive investment
returns, the fundamentals of a company, of a sector, and, indeed, of the economy matter
much more than valuations. Classically, for Alger, that means investing in growth companies
and fundamental growth that is the hallmark of the beginning of new eras and stages in
industries and in markets. Our observations of innovation and the other secular trends
that are supporting growth equities lead us to believe that this is an exciting time to be an
investor or shareholder. Our task at Alger, which has been our focus for more than 50 years,
is to continue to identify the winners and losers emerging from change.
Portfolio Matters
Alger Global Growth Fund
The Alger Global Growth Fund returned 23.80% for the fiscal 12-month period ended
October 31, 2017, compared to the 23.86% return of the MSCI ACWI Index.
Stock selection resulted in China, the Netherlands, the United States, and the United
Arab Emirates providing the largest contributions to relative performance. An overweight
of Germany was also beneficial. Japan, Switzerland, Canada, and the United Kingdom,
however, were among countries that detracted from results.
During the reporting period, the largest sector weightings were Information Technology
and Financials. The largest sector overweight was Information Technology and the largest
- 3 -
underweight was Consumer Staples. Stock selection resulted in the Information Technology
and Health Care sectors providing the greatest contributions to relative performance, while
Consumer Discretionary and Energy were among sectors that detracted from results.
Tencent Holdings Ltd.; Alibaba Group Holding Ltd.; Apple, Inc.; Aetna, Inc.; and Bank of
America Corp. were the top contributors to performance. Apple is a well-known provider
of smartphones, laptops, and other computing devices. Its shares outperformed during
the reporting period in response to the rapid growth of users for its iOS operating system,
excitement over new product launches, and strong sales of iPhones.
Conversely, Pioneer Natural Resources Co.; Encana Corp.; Whiting Petroleum Corp.;
Parsley Energy, Inc., Cl. A; and Allergan PLC. were the top detractors from results. Encana
extracts natural gas, natural gas liquids, and oil. A new management team has doubled the
company’s production and has focused on profitable operations in Canada and the U.S. The
company has also divested non-core assets. Weak oil prices have hurt the performance of
energy company shares, including shares of Encana.
I thank you for putting your trust in Alger.
Sincerely,
Daniel C. Chung, CFA
Chief Investment Officer
Fred Alger Management, Inc.
_______________________________
1 According to Russell’s U.S. Equity Indexes Institutional Benchmark Survey, December 2014, most institutional equity products are
benchmarked to a style index and, of those, 99% use Russell indexes. In total, $5.7 trillion is benchmarked to Russell indexes. For
each base index (the Russell 1000 and Russell 2000, and Russell Microcap), a composite value score is used to weight stocks in the
style indexes. Price-to-book value makes up 50% of that score. The other 50% is comprised of the Institutional Brokers’ Estimate
System forecast medium-term growth (2 year) and sales per share historical growth (5 year) statistics.
2 Baruch Lev and Feng Gu, “The End of Accounting,” John Wiley & Sons, 2016.
3 Brad Neuman, “The Enduring Force of Innovation,” Fred Alger & Company, Incorporated.
Investors cannot invest directly in an index. Index performance does not reflect the
deduction for fees, expenses, or taxes.
This report and the financial statements contained herein are submitted for the general
information of shareholders of the Fund. This report is not authorized for distribution
to prospective investors in the Fund unless proceeded or accompanied by an effective
prospectus for the Fund. Fund performance returns represent the 12-month period return
of Class A shares prior to the deduction of any sales charges and include the reinvestment
of any dividends or distributions.
The performance data quoted represent past performance, which is not an
indication or guarantee of future results.
Standardized performance results can be found on the following pages. The investment
return and principal value of an investment in the Fund will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than their original cost. Current
- 4 -
performance may be lower or higher than the performance quoted. For performance data
current to the most recent month-end, visit us at www.alger.com or call us at (800) 992-3863.
The views and opinions of the Fund’s management in this report are as of the date of the
Shareholders’ Letter and are subject to change at any time subsequent to this date. There
is no guarantee that any of the assumptions that formed the basis for the opinions stated
herein are accurate or that they will materialize. Moreover, the information forming the
basis for such assumptions is from sources believed to be reliable; however, there is no
guarantee that such information is accurate. Any securities mentioned, whether owned in a
fund or otherwise, are considered in the context of the construction of an overall portfolio
of securities and therefore reference to them should not be construed as a recommendation
or offer to purchase or sell any such security. Inclusion of such securities in the Fund and
transactions in such securities, if any, may be for a variety of reasons, including, without
limitation, in response to cash flows, inclusion in a benchmark, and risk control. The
reference to a specific security should also be understood in such context and not viewed as
a statement that the security is a significant holding in the Fund. Please refer to the Schedule
of Investments for the Fund which is included in this report for a complete list of Fund
holdings as of October 31, 2017. Securities mentioned in the Shareholders’ Letter, if not
found in the Schedule of Investments, may have been held by the Fund during the fiscal
period.
A Word about Risk
Growth stocks tend to be more volatile than other stocks as the price of growth stocks
tends to be higher in relation to their companies’ earnings and may be more sensitive
to market, political and economic developments. Investing in the stock market involves
gains and losses and may not be suitable for all investors. Stocks of small- and mid-sized
companies are subject to greater risk than stocks of larger, more established companies
owing to such factors as limited liquidity, inexperienced management, and limited financial
resources. Investing in foreign securities involves additional risk (including currency risk,
risks related to political, social or economic conditions, and risks associated with foreign
markets, such as increased volatility, limited liquidity, less stringent regulatory and legal
system, and lack of industry and country diversification), and may not be suitable for all
investors. Special risks associated with investments in emerging country issuers include
exposure to currency fluctuations, less liquidity, less developed or less efficient trading
markets, lack of comprehensive company information, political instability and different
auditing and legal standards.
Foreign currencies are subject to risks caused by inflation, interest rates, budget deficits and
low savings rates, political factors and government controls. Some of the countries where
the Fund can invest may have restrictions that could limit access to investment opportunities.
The securities of issuers located in emerging markets can be more volatile and less liquid
than those of issuers in more mature economies. Investing in emerging markets involves
higher levels of risk, including increased information, market, and valuation risks, and may
not be suitable for all investors.
Funds that participate in leveraging are subject to the risk that the cost of borrowing money
to leverage will exceed the returns for securities purchased or that the securities purchased
may actually go down in value; thus, a fund’s net asset value can decrease more quickly than
if the fund had not borrowed.
- 5 -
For a more detailed discussion of the risks associated with the Fund, please see the
prospectus.
Before investing, carefully consider the Fund’s investment objective, risks, charges,
and expenses.
For a prospectus or a summary prospectus containing this and other information
about the Alger Global Growth Fund call us at (800) 992-3863 or visit us at www.
alger.com. Read it carefully before investing.
Fred Alger & Company, Incorporated, Distributor. Member NYSE Euronext,
SIPC.
NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE.
Definitions:
• S&P 500 Index is an index of large company stocks considered representa-
tive of the U.S. stock market.
• The S&P 500 Growth Index is an index consisting of stocks within the S&P
500 Index that exhibit strong growth characteristics.
• The S&P 500 Value Index is an index consisting of stocks within the S&P
500 Index that exhibit strong value characteristics.
• The Conference Board’s Leading Economic Indicator Index is based on a va-
riety of economic data and is part of the Conference Board’s analytic system
that seeks to signal peaks and troughs in the business cycle.
• The Purchasing Managers' Index (PMI) is an indicator of the economic
health of the manufacturing sector.
• The U.S. Consumer Confidence Index (CCI) is an indicator designed to mea-
sure consumer confidence, which is defined as the degree of optimism on
the state of the economy that consumers are expressing through their activi-
ties of savings and spending.
• Morgan Stanley Capital International (MSCI) All Country World Index
(ACWI): An unmanaged, market capitalization-weighted index designed
to provide a broad measure of equity market performance throughout the
world, including both developed and emerging markets.
• The Morgan Stanley Capital International (MSCI) All Country World Index
(ACWI) ex USA is an unmanaged, market capitalization-weighted index de-
signed to provide a broad measure of equity market performance throughout
the world, including both developing and emerging markets, but excluding
the United States.
• MSCI Emerging Markets Index: A free float-adjusted market capitalization
index designed to measure equity market performance in the global emerging
markets.
- 6 -
| | | | | | | | | |
| FUND PERFORMANCE AS OF 9/30/17 (Unaudited) |
| AVERAGE ANNUAL TOTAL RETURNS |
| | 1 | | 5 | | 10 | | SINCE | |
| | YEAR | | YEARS | | YEARS | | INCEPTION | |
| Alger Global Growth Class A (Inception 11/3/03) | 11.32 | % | 8.27 | % | 1.23 | % | 8.83 | % |
| Alger Global Growth Class C (Inception 3/3/08)* | 15.57 | % | 8.61 | % | 1.06 | % | 8.47 | % |
| Alger Global Growth Class I (Inception 5/31/13) | 17.64 | % | n/a | | n/a | | 9.22 | % |
| Alger Global Growth Class Z (Inception 5/31/13) | 17.95 | % | n/a | | n/a | | 9.49 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future
results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and
capital gains. Class A returns reflect the maximum initial sales charge and Class C returns reflect the applicable
contingent deferred sales charge. Beginning May 31, 2013 Alger Global Growth Fund changed its investment
strategy to investing foreign (including emerging markets) and U.S. securities; its previous investment strategy
invested in securities economically tied to China (including Hong Kong and Taiwan) and the United States.
* Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to March 3,
2008, inception of the class, is that of the Fund's Class A shares, reduced to reflect the current maximum sales charge and the
higher operating expenses of Class C shares.
- 7 -
ALGER GLOBAL GROWTH FUND
Fund Highlights Through October 31, 2017 (Unaudited)
The chart above illustrates the growth in value of a hypothetical $10,000 investment made in the Alger Global Growth
Fund Class A shares, with an initial maximum sales charge of 5.25%, and the MSCI ACWI Index (unmanaged index
of common stocks) for the ten years ended October 31, 2017. Beginning May 31, 2013 Alger Global Growth Fund
changed its investment strategy to investing foreign (including emerging markets) and U.S. securities. Its previous
investment strategy invested in securities economically tied to China (including Hong Kong and Taiwan) and the
United States. Figures for the Alger Global Growth Fund Class A shares, and the MSCI ACWI Index include
reinvestment of dividends. Performance for the Alger Global Growth Fund Class C, Class I and Class Z shares will
vary from the results shown above due to differences in expenses and sales charges that each class bears. Investors
cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.
- 8 -
ALGER GLOBAL GROWTH FUND
Fund Highlights Through October 31, 2017 (Unaudited) (Continued)
| | | | | | | | | |
| PERFORMANCE COMPARISON AS OF 10/31/17 |
| AVERAGE ANNUAL TOTAL RETURNS |
| | | | | | | | Since | |
| | 1 YEAR | | 5 YEARS | | 10 YEARS | | 11/3/2003 | |
| Class A (Inception 11/3/03) | 17.30 | % | 9.07 | % | 0.46 | % | 8.96 | % |
| Class C (Inception 3/3/08)* | 21.88 | % | 9.42 | % | 0.29 | % | 8.60 | % |
| MSCI ACWI Index | 23.86 | % | 11.40 | % | 4.26 | % | 8.25 | % |
| | | | | | | |
| | | | | | Since | |
| | 1 YEAR | | 5 YEARS | 10 YEARS | 5/31/2013 | |
| Class I (Inception 5/31/13) | 24.15 | % | n/a | n/a | 9.65 | % |
| Class Z (Inception 5/31/13) | 24.33 | % | n/a | n/a | 9.92 | % |
| MSCI ACWI Index | 23.86 | % | n/a | n/a | 9.80 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s
average annual total returns include changes in share price and reinvestment of dividends and capital gains. Class A returns reflect
the maximum initial sales charge and Class C returns reflect the applicable contingent deferred sales charge. The chart and table above
do not reflect the deduction of taxes that a shareholder would have paid on Fund distributions or on the redemption of Fund shares.
Investment return and principal will fluctuate and the Fund’s shares, when redeemed, may be worth more or less than their original cost.
Current performance may be higher or lower than the performance quoted. For updated performance, visit us at www.alger.com or call
us at (800) 992-3863.
* Since inception performance is calculated since the inception of the Class A shares. Historical performance prior to March
3, 2008, inception of the class, is that of the Fund's Class A shares, reduced to reflect the current maximum sales charge
and the higher operating expenses of Class C shares.
- 9 -
PORTFOLIO SUMMARY†
October 31, 2017 (Unaudited)
| | | | |
| | | Alger Global Growth | |
| COUNTRY | | Fund | |
| Argentina | | 0.5 | % |
| Australia | | 1.4 | |
| Austria | | 0.9 | |
| Brazil | | 0.5 | |
| Canada | | 2.2 | |
| China | | 5.8 | |
| France | | 2.4 | |
| Germany | | 6.9 | |
| India | | 1.2 | |
| Italy | | 0.6 | |
| Japan | | 4.2 | |
| Luxembourg | | 0.2 | |
| Netherlands | | 1.9 | |
| Philippines | | 0.4 | |
| Poland | | 0.2 | |
| Russia | | 0.6 | |
| South Korea | | 1.6 | |
| Sweden | | 0.9 | |
| Switzerland | | 1.3 | |
| Taiwan | | 0.9 | |
| United Arab Emirates | | 0.7 | |
| United Kingdom | | 0.6 | |
| United States | | 60.8 | |
| Cash and Net Other Assets | | 3.3 | |
| | | 100.0 | % |
† Based on net assets for the Fund.
- 10 -
ALGER GLOBAL GROWTH FUND
Schedule of Investments October 31, 2017
| | | | | |
| COMMON STOCKS—95.8% | | SHARES | | VALUE |
| ARGENTINA—0.5% | | | | |
| INTERNET & DIRECT MARKETING RETAIL—0.5% | | | | |
| Despegar. com Corp. * | | 5,012 | $ | 154,370 |
| (Cost $140,543) | | | | |
| AUSTRALIA—1.4% | | | | |
| DIVERSIFIED METALS & MINING—1.4% | | | | |
| BHP Billiton Ltd. | | 19,000 | | 391,213 |
| (Cost $299,133) | | | | |
| AUSTRIA—0.9% | | | | |
| DIVERSIFIED BANKS—0.9% | | | | |
| Bawag Group AG*,(a) | | 5,000 | | 265,003 |
| (Cost $283,320) | | | | |
| BRAZIL—0.5% | | | | |
| FINANCIAL EXCHANGES & DATA—0.2% | | | | |
| B3 SA - Brasil Bolsa Balcao | | 8,600 | | 62,836 |
| GENERAL MERCHANDISE STORES—0.3% | | | | |
| Magazine Luiza SA | | 4,709 | | 91,774 |
| TOTAL BRAZIL | | | | |
| (Cost $165,652) | | | | 154,610 |
| CANADA—2.2% | | | | |
| DIVERSIFIED BANKS—1.1% | | | | |
| Royal Bank of Canada | | 4,000 | | 312,799 |
| LIFE & HEALTH INSURANCE—1.1% | | | | |
| Manulife Financial Corp. | | 15,500 | | 311,706 |
| TOTAL CANADA | | | | |
| (Cost $520,242) | | | | 624,505 |
| CHINA—5.8% | | | | |
| CONSTRUCTION & ENGINEERING—0.4% | | | | |
| China State Construction International Holdings Ltd. | | 87,250 | | 122,591 |
| CONSUMER FINANCE—0.2% | | | | |
| Qudian, Inc. #* | | 1,959 | | 48,779 |
| INTERNET SOFTWARE & SERVICES—5.2% | | | | |
| Alibaba Group Holding Ltd. #* | | 3,891 | | 719,407 |
| Tencent Holdings Ltd. | | 17,185 | | 772,377 |
| | | | | 1,491,784 |
| TOTAL CHINA | | | | |
| (Cost $625,576) | | | | 1,663,154 |
| FRANCE—2.4% | | | | |
| DIVERSIFIED BANKS—1.6% | | | | |
| BNP Paribas SA | | 6,000 | | 468,297 |
| PERSONAL PRODUCTS—0.8% | | | | |
| L'Oreal SA | | 1,100 | | 244,820 |
| TOTAL FRANCE | | | | |
| (Cost $682,208) | | | | 713,117 |
| GERMANY—6.9% | | | | |
| ADVERTISING—1.0% | | | | |
| Stroeer SE & Co. KGaA | | 4,600 | | 294,188 |
- 11 -
ALGER GLOBAL GROWTH FUND
Schedule of Investments (Continued) October 31, 2017
| | | | | |
| COMMON STOCKS—95.8% (CONT. ) | | SHARES | | VALUE |
| GERMANY—6.9% (CONT. ) | | | | |
| APPLICATION SOFTWARE—1.5% | | | | |
| SAP SE | | 3,700 | $ | 422,772 |
| INDUSTRIAL CONGLOMERATES—0.9% | | | | |
| Siemens AG | | 1,800 | | 258,539 |
| INTEGRATED TELECOMMUNICATION SERVICES—1.2% | | | |
| Deutsche Telekom AG | | 19,000 | | 344,039 |
| MULTI-LINE INSURANCE—1.6% | | | | |
| Allianz SE | | 2,000 | | 466,918 |
| PHARMACEUTICALS—0.7% | | | | |
| Bayer AG | | 1,600 | | 208,126 |
| TOTAL GERMANY | | | | |
| (Cost $1,874,854) | | | | 1,994,582 |
| INDIA—1.2% | | | | |
| DIVERSIFIED BANKS—1.2% | | | | |
| HDFC Bank Ltd. | | 12,708 | | 355,801 |
| (Cost $216,451) | | | | |
| ITALY—0.6% | | | | |
| DIVERSIFIED BANKS—0.6% | | | | |
| UniCredit SpA | | 9,000 | | 171,996 |
| (Cost $157,863) | | | | |
| JAPAN—4.2% | | | | |
| COMMODITY CHEMICALS—0.7% | | | | |
| Toray Industries, Inc. | | 20,000 | | 202,433 |
| DIVERSIFIED BANKS—1.4% | | | | |
| Mitsubishi UFJ Financial Group, Inc. | | 60,496 | | 410,353 |
| ELECTRONIC COMPONENTS—0.5% | | | | |
| Alps Electric Co. , Ltd. | | 5,000 | | 153,020 |
| INDUSTRIAL MACHINERY—0.5% | | | | |
| DMG Mori Co. , Ltd. | | 7,600 | | 153,258 |
| LIFE & HEALTH INSURANCE—0.6% | | | | |
| T&D Holdings, Inc. | | 12,000 | | 187,208 |
| WIRELESS TELECOMMUNICATION SERVICES—0.5% | | | | |
| SoftBank Group Corp. | | 1,600 | | 141,796 |
| TOTAL JAPAN | | | | |
| (Cost $1,153,079) | | | | 1,248,068 |
| LUXEMBOURG—0.2% | | | | |
| REAL ESTATE OPERATING COMPANIES—0.2% | | | | |
| Aroundtown SA | | 7,143 | | 50,104 |
| (Cost $50,440) | | | | |
| NETHERLANDS—1.9% | | | | |
| DIVERSIFIED BANKS—0.7% | | | | |
| ING Groep NV | | 11,000 | | 203,274 |
- 12 -
ALGER GLOBAL GROWTH FUND
Schedule of Investments (Continued) October 31, 2017
| | | | | |
| COMMON STOCKS—95.8% (CONT. ) | | SHARES | | VALUE |
| NETHERLANDS—1.9% (CONT. ) | | | | |
| SEMICONDUCTOR EQUIPMENT—1.2% | | | | |
| ASML Holding NV# | | 1,950 | $ | 352,463 |
| TOTAL NETHERLANDS | | | | |
| (Cost $503,348) | | | | 555,737 |
| PHILIPPINES—0.4% | | | | |
| DIVERSIFIED BANKS—0.4% | | | | |
| Metropolitan Bank & Trust Co. | | 70,260 | | 117,992 |
| (Cost $113,955) | | | | |
| RUSSIA—0.6% | | | | |
| FOOD RETAIL—0.6% | | | | |
| X5 Retail Group NV*,(b) | | 4,236 | | 174,100 |
| (Cost $126,258) | | | | |
| SOUTH KOREA—1.6% | | | | |
| PERSONAL PRODUCTS—0.5% | | | | |
| LG Household & Health Care Ltd. | | 136 | | 143,222 |
| TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—1.1% | | |
| Samsung Electronics Co. , Ltd. | | 123 | | 303,821 |
| TOTAL SOUTH KOREA | | | | |
| (Cost $288,660) | | | | 447,043 |
| SWEDEN—0.9% | | | | |
| DIVERSIFIED BANKS—0.9% | | | | |
| Nordea Bank AB | | 21,000 | | 253,765 |
| (Cost $217,862) | | | | |
| SWITZERLAND—1.3% | | | | |
| PACKAGED FOODS & MEATS—1.3% | | | | |
| Nestle SA | | 4,500 | | 378,661 |
| (Cost $350,684) | | | | |
| TAIWAN—0.9% | | | | |
| ELECTRONIC COMPONENTS—0.3% | | | | |
| Elite Material Co. , Ltd. | | 21,000 | | 83,691 |
| INTERNET SOFTWARE & SERVICES—0.1% | | | | |
| Sea Ltd. #* | | 1,416 | | 21,353 |
| RESTAURANTS—0.5% | | | | |
| Gourmet Master Co. , Ltd. | | 13,200 | | 151,631 |
| TOTAL TAIWAN | | | | |
| (Cost $237,867) | | | | 256,675 |
| UNITED ARAB EMIRATES—0.7% | | | | |
| HEALTH CARE FACILITIES—0.7% | | | | |
| NMC Health PLC. | | 4,919 | | 189,055 |
| (Cost $139,037) | | | | |
| UNITED KINGDOM—0.6% | | | | |
| TRADING COMPANIES & DISTRIBUTORS—0.6% | | | | |
| Ashtead Group PLC. | | 7,000 | | 180,357 |
| (Cost $152,321) | | | | |
- 13 -
ALGER GLOBAL GROWTH FUND
Schedule of Investments (Continued) October 31, 2017
| | | | | |
| COMMON STOCKS—95.8% (CONT. ) | | SHARES | | VALUE |
| UNITED STATES—60.1% | | | | |
| AEROSPACE & DEFENSE—0.6% | | | | |
| General Dynamics Corp. | | 800 | $ | 162,384 |
| APPAREL ACCESSORIES & LUXURY GOODS—0.6% | | | | |
| PVH Corp. | | 1,350 | | 171,194 |
| APPLICATION SOFTWARE—2.0% | | | | |
| Adobe Systems, Inc. * | | 600 | | 105,096 |
| Autodesk, Inc. * | | 1,400 | | 174,944 |
| salesforce. com, Inc. * | | 1,800 | | 184,212 |
| Workday, Inc. , Cl. A* | | 1,000 | | 110,990 |
| | | | | 575,242 |
| ASSET MANAGEMENT & CUSTODY BANKS—0.5% | | | | |
| WisdomTree Investments, Inc. | | 12,000 | | 133,080 |
| BIOTECHNOLOGY—2.9% | | | | |
| ACADIA Pharmaceuticals, Inc. * | | 2,500 | | 87,075 |
| Celgene Corp. * | | 2,100 | | 212,037 |
| Clovis Oncology, Inc. * | | 1,500 | | 113,055 |
| Exact Sciences Corp. * | | 3,700 | | 203,463 |
| Vertex Pharmaceuticals, Inc. * | | 1,500 | | 219,345 |
| | | | | 834,975 |
| BROADCASTING—0.5% | | | | |
| CBS Corp. , Cl. B | | 2,350 | | 131,882 |
| BUILDING PRODUCTS—0.6% | | | | |
| Fortune Brands Home & Security, Inc. | | 2,700 | | 178,362 |
| CABLE & SATELLITE—0.8% | | | | |
| Comcast Corp. , Cl. A | | 6,000 | | 216,180 |
| COMMUNICATIONS EQUIPMENT—0.4% | | | | |
| Lumentum Holdings, Inc. * | | 2,000 | | 126,300 |
| CONSTRUCTION MACHINERY & HEAVY TRUCKS—1.0% | | | |
| WABCO Holdings, Inc. * | | 2,000 | | 295,140 |
| CONSTRUCTION MATERIALS—1.0% | | | | |
| Vulcan Materials Co. | | 2,300 | | 280,025 |
| DATA PROCESSING & OUTSOURCED SERVICES—1.1% | | | |
| Visa, Inc. , Cl. A | | 2,800 | | 307,944 |
| DIVERSIFIED BANKS—4.1% | | | | |
| Bank of America Corp. | | 22,500 | | 616,275 |
| JPMorgan Chase & Co. | | 5,500 | | 553,355 |
| | | | | 1,169,630 |
| ELECTRICAL COMPONENTS & EQUIPMENT—1.0% | | | | |
| AMETEK, Inc. | | 2,500 | | 168,725 |
| Rockwell Automation, Inc. | | 600 | | 120,492 |
| | | | | 289,217 |
| ELECTRONIC EQUIPMENT & INSTRUMENTS—0.4% | | | | |
| Cognex Corp. | | 1,000 | | 123,150 |
| FINANCIAL EXCHANGES & DATA—0.8% | | | | |
| Intercontinental Exchange, Inc. | | 3,500 | | 231,350 |
- 14 -
ALGER GLOBAL GROWTH FUND
Schedule of Investments (Continued) October 31, 2017
| | | | | |
| COMMON STOCKS—95.8% (CONT. ) | | SHARES | | VALUE |
| UNITED STATES—60.1% (CONT. ) | | | | |
| HEALTH CARE EQUIPMENT—0.8% | | | | |
| Medtronic PLC. | | 3,000 | $ | 241,560 |
| HEALTH CARE TECHNOLOGY—0.5% | | | | |
| Medidata Solutions, Inc. * | | 2,000 | | 150,460 |
| HOME FURNISHINGS—0.5% | | | | |
| Mohawk Industries, Inc. * | | 600 | | 157,056 |
| INDUSTRIAL CONGLOMERATES—1.2% | | | | |
| Honeywell International, Inc. | | 2,300 | | 331,568 |
| INDUSTRIAL GASES—0.6% | | | | |
| Air Products & Chemicals, Inc. | | 1,000 | | 159,430 |
| INDUSTRIAL MACHINERY—1.0% | | | | |
| Dover Corp. | | 1,300 | | 124,137 |
| Stanley Black & Decker, Inc. | | 1,000 | | 161,550 |
| | | | | 285,687 |
| INTEGRATED OIL & GAS—1.4% | | | | |
| Chevron Corp. | | 3,550 | | 411,410 |
| INTERNET & DIRECT MARKETING RETAIL—3.8% | | | | |
| Amazon. com, Inc. * | | 1,000 | | 1,105,280 |
| INTERNET SOFTWARE & SERVICES—5.2% | | | | |
| Alphabet, Inc. , Cl. C* | | 800 | | 813,312 |
| Facebook, Inc. , Cl. A* | | 3,700 | | 666,222 |
| Palantir Technologies, Inc. , Cl. A*,@,(c) | | 3,176 | | 18,262 |
| | | | | 1,497,796 |
| INVESTMENT BANKING & BROKERAGE—1.4% | | | | |
| Morgan Stanley | | 8,200 | | 410,000 |
| LIFE SCIENCES TOOLS & SERVICES—0.6% | | | | |
| Illumina, Inc. * | | 850 | | 174,412 |
| MANAGED HEALTH CARE—4.2% | | | | |
| Aetna, Inc. | | 4,000 | | 680,120 |
| UnitedHealth Group, Inc. | | 2,500 | | 525,550 |
| | | | | 1,205,670 |
| OIL & GAS EXPLORATION & PRODUCTION—4.1% | | | | |
| Diamondback Energy, Inc. * | | 2,000 | | 214,320 |
| EOG Resources, Inc. | | 3,900 | | 389,493 |
| Pioneer Natural Resources Co. | | 3,800 | | 568,746 |
| | | | | 1,172,559 |
| PAPER PACKAGING—0.5% | | | | |
| International Paper Co. | | 2,500 | | 143,175 |
| PHARMACEUTICALS—1.2% | | | | |
| Allergan PLC. | | 900 | | 159,507 |
| Bristol-Myers Squibb Co. | | 3,000 | | 184,980 |
| | | | | 344,487 |
| SEMICONDUCTOR EQUIPMENT—0.7% | | | | |
| Applied Materials, Inc. | | 3,500 | | 197,505 |
- 15 -
ALGER GLOBAL GROWTH FUND
Schedule of Investments (Continued) October 31, 2017
| | | | | |
| COMMON STOCKS—95.8% (CONT. ) | | SHARES | | VALUE |
| UNITED STATES—60.1% (CONT. ) | | | | |
| SEMICONDUCTORS—5.4% | | | | |
| Ambarella, Inc. * | | 2,500 | $ | 141,100 |
| Broadcom Ltd. | | 2,450 | | 646,580 |
| Microchip Technology, Inc. | | 2,500 | | 237,000 |
| Micron Technology, Inc. * | | 2,300 | | 101,913 |
| NVIDIA Corp. | | 2,150 | | 444,641 |
| | | | | 1,571,234 |
| SPECIALTY CHEMICALS—0.7% | | | | |
| The Sherwin-Williams Co. | | 500 | | 197,575 |
| SYSTEMS SOFTWARE—3.2% | | | | |
| Choicestream, Inc. *,@,(c),(d) | | 1,969 | | – |
| Microsoft Corp. | | 7,500 | | 623,850 |
| Proofpoint, Inc. * | | 1,700 | | 157,097 |
| ServiceNow, Inc. * | | 1,100 | | 139,007 |
| | | | | 919,954 |
| TECHNOLOGY HARDWARE STORAGE & PERIPHERALS—3.6% | | |
| Apple, Inc. | | 5,000 | | 845,200 |
| Western Digital Corp. | | 2,200 | | 196,394 |
| | | | | 1,041,594 |
| TOBACCO—0.4% | | | | |
| Philip Morris International, Inc. | | 1,200 | | 125,568 |
| TRUCKING—0.8% | | | | |
| Old Dominion Freight Line, Inc. | | 2,000 | | 242,260 |
| TOTAL UNITED STATES | | | | |
| (Cost $15,393,200) | | | | 17,312,295 |
| TOTAL COMMON STOCKS | | | | |
| (Cost $23,692,553) | | | | 27,652,203 |
| PREFERRED STOCKS—0.7% | | SHARES | | VALUE |
| UNITED STATES—0.7% | | | | |
| BIOTECHNOLOGY—0.4% | | | | |
| Prosetta Biosciences, Inc. , Series D*,@,(c),(d) | | 33,858 | | 105,637 |
| INTERNET SOFTWARE & SERVICES—0.3% | | | | |
| Palantir Technologies, Inc. , Cl. B*,@,(c) | | 12,951 | | 74,469 |
| Palantir Technologies, Inc. , Cl. D*,@,(c) | | 1,687 | | 9,700 |
| | | | | 84,169 |
| SYSTEMS SOFTWARE—0.0% | | | | |
| Choicestream, Inc. , Series A*,@,(c),(d) | | 16,980 | | – |
| Choicestream, Inc. , Series B*,@,(c),(d) | | 36,618 | | – |
| | | | | – |
| TOTAL UNITED STATES | | | | |
| (Cost $284,571) | | | | 189,806 |
| TOTAL PREFERRED STOCKS | | | | |
| (Cost $284,571) | | | | 189,806 |
- 16 -
ALGER GLOBAL GROWTH FUND
Schedule of Investments (Continued) October 31, 2017
| | | | | | |
| WARRANTS—0.0% | | SHARES | | | VALUE |
| UNITED STATES—0.0% | | | | | |
| SYSTEMS SOFTWARE —0.0% | | | | | |
| Choicestream, Inc. , 6/22/26*,@,(c),(d) | | 4,637 | | $ | – |
| (Cost $4,633) | | | | | |
| RIGHTS—0.0% | | SHARES | | | VALUE |
| CHINA—0.0% | | | | | |
| INTERNET SOFTWARE & SERVICES—0.0% | | | | | |
| China Literature Ltd. , 11/8/17* | | 14 | | | 92 |
| (Cost $–) | | | | | |
| | | PRINCIPAL | | | |
| CORPORATE BONDS—0.0% | | AMOUNT | | | VALUE |
| UNITED STATES—0.0% | | | | | |
| SYSTEMS SOFTWARE —0.0% | | | | | |
| Choicestream, Inc. , 11.00%, 8/05/18@,(c),(d) | | 4,637 | | | – |
| (Cost $5) | | | | | |
| SPECIAL PURPOSE VEHICLE—0.2% | | SHARES | | | VALUE |
| POLAND—0.2% | | | | | |
| CONSUMER FINANCE—0.2% | | | | | |
| JS Kred SPV I, LLC. @,(c) | | 55,986 | | | 67,586 |
| (Cost $55,986) | | | | | |
| Total Investments | | | | | |
| (Cost $24,037,748) | | 96.7 | % | | 27,909,687 |
| Unaffiliated Securities (Cost $23,844,628) | | | | | 27,804,050 |
| Affiliated Securities (Cost $193,120) | | | | | 105,637 |
| Other Assets in Excess of Liabilities | | 3.3 | % | | 956,837 |
| NET ASSETS | | 100.0 | % | $ | 28,866,524 |
# American Depositary Receipts.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified
institutional buyers. These securities are however deemed to be liquid and represent 0.9% of the net assets of the Portfolio.
(b) Global Depositary Receipts.
(c) Security is valued in good faith at fair value determined using significant unobservable inputs pursuant to procedures established by the
Board.
(d) Deemed an affiliate of the Alger fund complex during the year for purposes of Section 2(a)(3) of the Investment Company Act of
1940. See Affiliated Securities Note 11.
* Non-income producing security.
- 17 -
ALGER GLOBAL GROWTH FUND
Schedule of Investments (Continued) October 31, 2017
@ Restricted security - Investment in security not registered under the Securities Act of 1933. The investment is deemed to not be liquid
and may be sold only to qualified buyers.
| | | | | | | | | | |
| | | | | % of net assets | | | | % of net assets | |
| | Acquisition | | Acquisition | (Acquisition | | | Market | as of | |
| Security | Date(s) | | Cost | Date) | | | Value | 10/31/2017 | |
| Choicestream, Inc. | 03/14/14 | | 571 | 0.00 | % | | 0 | 0.00 | % |
| Choicestream, Inc. , 11.00%, | | | | | | | | | |
| 8/05/18 | 08/04/16 | | 5 | 0.00 | % | | 0 | 0.00 | % |
| Choicestream, Inc. , 6/22/26 | 08/04/16 | | 4,633 | 0.02 | % | | 0 | 0.00 | % |
| Choicestream, Inc. , Series A | 12/17/13 | | 13,579 | 0.03 | % | | 0 | 0.00 | % |
| Choicestream, Inc. , Series B | 07/10/14 | | 21,971 | 0.05 | % | | 0 | 0.00 | % |
| JS Kred SPV I, LLC. | 06/26/15 | | 55,986 | 0.15 | % | | 67,586 | 0.23 | % |
| Palantir Technologies, Inc. , Cl. A | 10/07/14 | | 20,666 | 0.05 | % | | 18,262 | 0.06 | % |
| Palantir Technologies, Inc. , Cl. B | 10/07/14 | | 85,521 | 0.22 | % | | 74,469 | 0.26 | % |
| Palantir Technologies, Inc. , Cl. D | 10/14/14 | | 11,139 | 0.03 | % | | 9,700 | 0.03 | % |
| Prosetta Biosciences, Inc. , Series D | 02/06/15 | | 152,361 | 0.40 | % | | 105,637 | 0.37 | % |
| Total | | | | | | $ | 275,654 | 0.95 | % |
| | | | | | | | | | |
Industry classifications are unaudited.
See Notes to Financial Statements.
- 18 -
ALGER GLOBAL GROWTH FUND
Statement of Assets and Liabilities October 31, 2017
| | | | | |
| | | | Alger Global | |
| | | Growth Fund | |
| ASSETS: | | | | |
| Investments in unaffiliated securities, at value (Identified cost | | | |
| below)* see accompanying schedule of investments | | $ | 27,804,050 | |
| Investments in affiliated securities, at value (Identified cost below)** see accompanying | | | |
| schedule of investments | | | 105,637 | |
| Cash and cash equivalents | | | 936,068 | |
| Foreign cash † | | | 518 | |
| Receivable for investment securities sold | | | 763,428 | |
| Receivable for shares of beneficial interest sold | | | 18,008 | |
| Dividends and interest receivable | | | 36,185 | |
| Receivable from Investment Manager | | | 28,368 | |
| Prepaid expenses | | | 49,915 | |
| Total Assets | | | 29,742,177 | |
| |
| LIABILITIES: | | | | |
| Payable for investment securities purchased | | | 710,327 | |
| Payable for shares of beneficial interest redeemed | | | 9,258 | |
| Accrued investment advisory fees | | | 20,135 | |
| Accrued transfer agent fees | | | 15,138 | |
| Accrued distribution fees | | | 7,644 | |
| Accrued administrative fees | | | 692 | |
| Accrued shareholder administrative fees | | | 386 | |
| Accrued other expenses | | | 112,073 | |
| Total Liabilities | | | 875,653 | |
| NET ASSETS | | $ | 28,866,524 | |
| |
| NET ASSETS CONSIST OF: | | | | |
| Paid in capital (par value of $. 001 per share) | | | 24,752,256 | |
| Undistributed net investment income (accumulated loss) | | | 280,909 | |
| Undistributed net realized gain (accumulated realized loss) | | (37,333 | ) |
| Net unrealized appreciation on investments and foreign currency | | 3,870,692 | |
| NET ASSETS | | $ | 28,866,524 | |
| * Identified cost | | $ | 23,844,628 | (a) |
| ** Identified cost | | $ | 193,120 | (a) |
| † Cost of foreign cash | | $ | 514 | |
| See Notes to Financial Statements. | | | | |
- 19 -
ALGER GLOBAL GROWTH FUND
Statement of Assets and Liabilities October 31, 2017 (Continued)
| | | |
| | | Alger Global |
| | | Growth Fund |
| NET ASSETS BY CLASS: | | |
| Class A | $ | 19,961,857 |
| Class C | $ | 3,673,041 |
| Class I | $ | 285,769 |
| Class Z | $ | 4,945,857 |
| |
| SHARES OF BENEFICIAL INTEREST OUTSTANDING — NOTE 6: | | |
| Class A | | 806,128 |
| Class C | | 156,901 |
| Class I | | 11,883 |
| Class Z | | 195,823 |
| |
| NET ASSET VALUE PER SHARE: | | |
| Class A — Net Asset Value Per Share Class A | $ | 24.76 |
| Class A — Offering Price Per Share | | |
| (includes a 5.25% sales charge) | $ | 26.13 |
| Class C — Net Asset Value Per Share Class C | $ | 23.41 |
| Class I — Net Asset Value Per Share Class I | $ | 24.05 |
| Class Z — Net Asset Value Per Share Class Z | $ | 25.26 |
| See Notes to Financial Statements. | | |
(a) At October 31, 2017, the net unrealized appreciation on investments, based on cost for federal income tax purposes of
$24,857,143, amounted to $3,052,544 which consisted of aggregate gross unrealized appreciation of $4,122,855
and aggregate gross unrealized depreciation of $1,070,311.
- 20 -
ALGER GLOBAL GROWTH FUND
Statement of Operations For the year ended October 31, 2017
| | | | |
| | | Alger Global | |
| | | Growth Fund | |
| INCOME: | | | |
| Dividends (net of foreign withholding taxes*) | $ | 462,190 | |
| Interest from unaffiliated securities | | 3,682 | |
| Interest from affiliated securities — Note 11 | | 91 | |
| Total Income | | 465,963 | |
| |
| EXPENSES: | | | |
| Advisory fees — Note 3(a) | | 226,639 | |
| Distribution fees — Note 3(c) | | | |
| Class A | | 49,539 | |
| Class C | | 41,599 | |
| Class I | | 609 | |
| Shareholder administrative fees — Note 3(f) | | 4,392 | |
| Administration fees — Note 3(b) | | 7,791 | |
| Custodian fees | | 59,472 | |
| Transfer agent fees and expenses — Note 3(f) | | 34,482 | |
| Printing fees | | 64,884 | |
| Professional fees | | 126,500 | |
| Registration fees | | 63,227 | |
| Trustee fees — Note 3(g) | | 1,187 | |
| Fund accounting fees | | 7,950 | |
| Miscellaneous | | 40,350 | |
| Total Expenses | | 728,621 | |
| Less, expense reimbursements/waivers — Note 3(a) | | (289,781 | ) |
| Net Expenses | | 438,840 | |
| NET INVESTMENT INCOME | | 27,123 | |
| |
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN | |
| CURRENCY: | | | |
| Net realized gain on unaffiliated investments | | 3,066,246 | |
| Net realized (loss) on foreign currency transactions | | (5,583 | ) |
| Net change in unrealized appreciation on unaffiliated investments | | 3,006,676 | |
| Net change in unrealized (depreciation) on affiliated investments | | (61,935 | ) |
| Net change in unrealized appreciation foreign currency | | 10,911 | |
| Net realized and unrealized gain on investments and foreign currency | | 6,016,315 | |
| NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 6,043,438 | |
| * Foreign withholding taxes | $ | 32,002 | |
| See Notes to Financial Statements. | | | |
- 21 -
ALGER GLOBAL GROWTH FUND
Statements of Changes in Net Assets
| | | | | | | | |
| | | | Alger Global Growth Fund | |
| | | | For the | | | For the | |
| | | | Year Ended | | | Year Ended | |
| | | | October 31, 2017 | | | October 31, 2016 | |
| Net investment income | $ | 27,123 | | $ | 136,869 | |
| Net realized gain on investments and foreign currency | | | 3,060,663 | | | 275,386 | |
| Net change in unrealized appreciation (depreciation) on | | | | | | | |
| investments and foreign currency | | | 2,955,652 | | | (1,191,444 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 6,043,438 | | | (779,189 | ) |
| |
| Dividends and distributions to shareholders from: | | | | | | | |
| Net investment income: | | | | | | | |
| Class A | | | (197,660 | ) | | — | |
| Class C | | | (14,615 | ) | | — | |
| Class I | | | (10,440 | ) | | — | |
| Class Z | | | (42,673 | ) | | — | |
| Total dividends and distributions to shareholders | | | (265,388 | ) | | — | |
| |
| Increase (decrease) from shares of beneficial interest transactions: | | | | | | |
| Class A | | | (3,876,572 | ) | | (3,892,139 | ) |
| Class C | | | (1,891,470 | ) | | 131,502 | |
| Class I | | | (140,661 | ) | | (1,522,028 | ) |
| Class Z | | | 524,863 | | | 1,377,702 | |
| Net decrease from shares of beneficial interest transactions | | | | | | | |
| — Note 6(a) | | | (5,383,840 | ) | | (3,904,963 | ) |
| Total increase (decrease) | | | 394,210 | | | (4,684,152 | ) |
| |
| Net Assets: | | | | | | | |
| Beginning of period | | | 28,472,314 | | | 33,156,466 | |
| END OF PERIOD | $ | 28,866,524 | | $ | 28,472,314 | |
| Undistributed net investment income (accumulated loss) | $ | 280,909 | | $ | 176,700 | |
| See Notes to Financial Statements. | | | | | | | |
- 22 -
ALGER GLOBAL GROWTH FUND
Financial Highlights for a share outstanding throughout the period
| | | | | | | | | | | | | | | | |
| Alger Global Growth Fund | | | | | | | | Class A | | | | | | | |
| | Year ended | | Year ended | | Year ended | | Year ended | | Year ended | |
| | 10/31/2017 | | 10/31/2016 | | 10/31/2015 | | 10/31/2014 | | 10/31/2013 | |
| Net asset value, beginning of period | $ | 20.20 | | $ | 20.65 | | $ | 20.79 | | $ | 18.76 | | $ | 15.42 | |
| INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | | | |
| Net investment income (loss)(i) | | 0.03 | | | 0.10 | | | (0.01 | ) | | (0.02 | ) | | (0.01 | ) |
| Net realized and unrealized gain (loss) on | | | | | | | | | | | | | | | |
| investments | | 4.74 | | | (0.55 | ) | | (0.13 | ) | | 2.05 | | | 3.41 | |
| Total from investment operations | | 4.77 | | | (0.45 | ) | | (0.14 | ) | | 2.03 | | | 3.40 | |
| Dividends from net investment income | | (0.21 | ) | | – | | | – | | | – | | | (0.06 | ) |
| Net asset value, end of period | $ | 24.76 | | $ | 20.20 | | $ | 20.65 | | $ | 20.79 | | $ | 18.76 | |
| Total return(ii) | | 23.80 | % | | (2.18 | )% | | (0.67 | )% | | 10.82 | % | | 22.20 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | |
| Net assets, end of period (000's omitted) | $ | 19,962 | | $ | 19,805 | | $ | 24,269 | | $ | 30,542 | | $ | 33,657 | |
| Ratio of gross expenses to average net assets | | 2.48 | % | | 2.37 | % | | 2.03 | % | | 1.98 | % | | 2.35 | % |
| Ratio of expense reimbursements to average | | | | | | | | | | | | | | | |
| net assets | | (0.98 | )% | | (0.87 | )% | | (0.53 | )% | | (0.48 | )% | | (0.33 | )% |
| Ratio of net expenses to average net assets | | 1.50 | % | | 1.50 | % | | 1.50 | % | | 1.50 | % | | 2.02 | % |
| Ratio of net investment income (loss) to average | | | | | | | | | | | | | | | |
| net assets | | 0.14 | % | | 0.52 | % | | (0.07 | )% | | (0.08 | )% | | (0.07 | )% |
| Portfolio turnover rate | | 134.76 | % | | 138.05 | % | | 143.87 | % | | 81.13 | % | | 96.45 | % |
| See Notes to Financial Statements. | | | | | | | | | | | | | | | |
(i) Amount was computed based on average shares outstanding during the period.
(ii) Does not reflect the effect of sales charges, if applicable.
- 23 -
ALGER GLOBAL GROWTH FUND
Financial Highlights for a share outstanding throughout the period
| | | | | | | | | | | | | | | | |
| Alger Global Growth Fund | | | | | | | | Class C | | | | | | | |
| | Year ended | | Year ended | | Year ended | | Year ended | | Year ended | |
| | 10/31/2017 | | 10/31/2016 | | 10/31/2015 | | 10/31/2014 | | 10/31/2013 | |
| Net asset value, beginning of period | $ | 19.11 | | $ | 19.69 | | $ | 19.97 | | $ | 18.15 | | $ | 14.97 | |
| INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | | | |
| Net investment loss(i) | | (0.12 | ) | | (0.04 | ) | | (0.17 | ) | | (0.16 | ) | | (0.13 | ) |
| Net realized and unrealized gain (loss) on | | | | | | | | | | | | | | | |
| investments | | 4.48 | | | (0.54 | ) | | (0.11 | ) | | 1.98 | | | 3.31 | |
| Total from investment operations | | 4.36 | | | (0.58 | ) | | (0.28 | ) | | 1.82 | | | 3.18 | |
| Dividends from net investment income | | (0.06 | ) | | – | | | – | | | – | | | – | |
| Net asset value, end of period | $ | 23.41 | | $ | 19.11 | | $ | 19.69 | | $ | 19.97 | | $ | 18.15 | |
| Total return(ii) | | 22.88 | % | | (2.95 | )% | | (1.40 | )% | | 10.03 | % | | 21.24 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | |
| Net assets, end of period (000's omitted) | $ | 3,673 | | $ | 4,720 | | $ | 4,730 | | $ | 5,392 | | $ | 4,888 | |
| Ratio of gross expenses to average net assets | | 3.24 | % | | 3.13 | % | | 2.80 | % | | 2.75 | % | | 3.13 | % |
| Ratio of expense reimbursements to average | | | | | | | | | | | | | | | |
| net assets | | (0.99 | )% | | (0.88 | )% | | (0.55 | )% | | (0.50 | )% | | (0.40 | )% |
| Ratio of net expenses to average net assets | | 2.25 | % | | 2.25 | % | | 2.25 | % | | 2.25 | % | | 2.73 | % |
| Ratio of net investment income (loss) to average | | | | | | | | | | | | | | | |
| net assets | | (0.59 | )% | | (0.23 | )% | | (0.82 | )% | | (0.83 | )% | | (0.81 | )% |
| Portfolio turnover rate | | 134.76 | % | | 138.05 | % | | 143.87 | % | | 81.13 | % | | 96.45 | % |
| See Notes to Financial Statements. | | | | | | | | | | | | | | | |
(i) Amount was computed based on average shares outstanding during the period.
(ii) Does not reflect the effect of sales charges, if applicable.
- 24 -
ALGER GLOBAL GROWTH FUND
Financial Highlights for a share outstanding throughout the period
| Alger Global Growth Fund | | | | | | | | Class I | | | | | | | |
| | | | | | | | | | | | | | | From 5/31/2013 | |
| | | | | | | | | | | | | | (commencement | |
| | Year ended | | | Year ended | | | Year ended | | | Year ended | | of operations) to | |
| | | 10/31/2017 | | | 10/31/2016 | | | 10/31/2015 | | | 10/31/2014 | | | 10/31/2013 (i) | |
| Net asset value, beginning of period | $ | 20.36 | | $ | 20.78 | | $ | 20.87 | | $ | 18.78 | | $ | 16.83 | |
| INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | | | |
| Net investment income(ii) | | 0.08 | | | 0.17 | | | 0.04 | | | 0.03 | | | 0.03 | |
| Net realized and unrealized gain (loss) on | | | | | | | | | | | | | | | |
| investments | | 4.64 | | | (0.59 | ) | | (0.13 | ) | | 2.06 | | | 1.92 | |
| Total from investment operations | | 4.72 | | | (0.42 | ) | | (0.09 | ) | | 2.09 | | | 1.95 | |
| Dividends from net investment income | | (1.03 | ) | | – | | | – | | | – | | | – | |
| Net asset value, end of period | $ | 24.05 | | $ | 20.36 | | $ | 20.78 | | $ | 20.87 | | $ | 18.78 | |
| Total return(iii) | | 24.15 | % | | (2.02 | )% | | (0.43 | )% | | 11.13 | % | | 11.59 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | |
| Net assets, end of period (000's omitted) | $ | 286 | | $ | 384 | | $ | 1,914 | | $ | 1,646 | | $ | 1,296 | |
| Ratio of gross expenses to average net assets | | 2.63 | % | | 2.33 | % | | 2.02 | % | | 1.94 | % | | 2.97 | % |
| Ratio of expense reimbursements to average | | | | | | | | | | | | | | | |
| net assets | | (1.38 | )% | | (1.08 | )% | | (0.77 | )% | | (0.69 | )% | | (1.72 | )% |
| Ratio of net expenses to average net assets | | 1.25 | % | | 1.25 | % | | 1.25 | % | | 1.25 | % | | 1.25 | % |
| Ratio of net investment income (loss) to average | | | | | | | | | | | | | | | |
| net assets | | 0.37 | % | | 0.86 | % | | 0.17 | % | | 0.17 | % | | 0.47 | % |
| Portfolio turnover rate | | 134.76 | % | | 138.05 | % | | 143.87 | % | | 81.13 | % | | 96.45 | % |
| See Notes to Financial Statements. | | | | | | | | | | | | | | | |
(i) Ratios have been annualized; total return has not been annualized; portfolio turnover is for the twelve months then ended.
(ii) Amount was computed based on average shares outstanding during the period.
(iii) Does not reflect the effect of sales charges, if applicable.
- 25 -
ALGER GLOBAL GROWTH FUND
Financial Highlights for a share outstanding throughout the period
| Alger Global Growth Fund | | | | | | | | Class Z | | | | | | | |
| | | | | | | | | | | | | | | From 5/31/2013 | |
| | | | | | | | | | | | | | (commencement | |
| | Year ended | | | Year ended | | | Year ended | | | Year ended | | | of operations) to | |
| | 0/31/2017 | | | 10/31/2016 | | | 10/31/2015 | | | 10/31/2014 | | | 10/31/2013 (i) | |
| Net asset value, beginning of period | $ | 20.55 | | $ | 20.92 | | $ | 20.95 | | $ | 18.80 | | $ | 16.83 | |
| INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | | | |
| Net investment income(ii) | | 0.12 | | | 0.19 | | | 0.09 | | | 0.06 | | | 0.04 | |
| Net realized and unrealized gain (loss) on | | | | | | | | | | | | | | | |
| investments | | 4.83 | | | (0.56 | ) | | (0.12 | ) | | 2.09 | | | 1.93 | |
| Total from investment operations | | 4.95 | | | (0.37 | ) | | (0.03 | ) | | 2.15 | | | 1.97 | |
| Dividends from net investment income | | (0.24 | ) | | – | | | – | | | – | | | – | |
| Net asset value, end of period | $ | 25.26 | | $ | 20.55 | | $ | 20.92 | | $ | 20.95 | | $ | 18.80 | |
| Total return(iii) | | 24.33 | % | | 1.77 | % | | (0.14 | )% | | 11.44 | % | | 11.71 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | |
| Net assets, end of period (000's omitted) | $ | 4,946 | | $ | 3,563 | | $ | 2,243 | | $ | 1,308 | | $ | 112 | |
| Ratio of gross expenses to average net assets | | 2.35 | % | | 2.36 | % | | 2.20 | % | | 3.72 | % | | 12.42 | % |
| Ratio of expense reimbursements to average | | | | | | | | | | | | | | | |
| net assets | | (1.26 | )% | | (1.31 | )% | | (1.21 | )% | | (2.73 | )% | | (11.43 | )% |
| Ratio of net expenses to average net assets | | 1.09 | % | | 1.05 | % | | 0.99 | % | | 0.99 | % | | 0.99 | % |
| Ratio of net investment income (loss) to average | | | | | | | | | | | | | | | |
| net assets | | 0.53 | % | | 0.92 | % | | 0.44 | % | | 0.30 | % | | 0.62 | % |
| Portfolio turnover rate | | 134.76 | % | | 138.05 | % | | 143.87 | % | | 81.13 | % | | 96.45 | % |
| See Notes to Financial Statements. | | | | | | | | | | | | | | | |
(i) Ratios have been annualized; total return has not been annualized; portfolio turnover is for the twelve months then ended.
(ii) Amount was computed based on average shares outstanding during the period.
(iii) Does not reflect the effect of sales charges, if applicable.
- 26 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — General:
Alger Global Growth Fund (the “Fund”) is a diversified, open-end registered investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts. The Fund qualifies as an investment company as defined in Financial
Accounting Standards Board Accounting Standards Codification 946-Financial Services –
Investment Companies. The Fund’s investment objective is long-term capital appreciation.
It seeks to achieve its objective by investing in equity securities in the United States and
foreign countries. The Fund’s foreign investments will include securities of companies
in both developed and emerging market countries. The Fund offers Class A, C, I and Z
shares. Class A shares are generally subject to an initial sales charge while Class C shares
are generally subject to a deferred sales charge. Class I and Z shares are sold to institutional
investors without an initial or deferred sales charge. Each class has identical rights to assets
and earnings except that each share class bears the pro rata allocation of the Fund’s expense
other than a class expense (not including advisory or custodial fees or other expenses related
to the management of the Fund’s assets) to a share class.
NOTE 2 — Significant Accounting Policies:
(a) Investment Valuation: The Fund values its financial instruments at fair value using
independent dealers or pricing services under policies approved by the Fund’s Board of
Trustees (“Board”). Investments are valued on each day the New York Stock Exchange (the
“NYSE”) is open, as of the close of the NYSE (normally 4:00 p.m. Eastern Standard Time).
Equity securities, including traded rights, warrants and option contracts for which valuation
information is readily available are valued at the last quoted sales price or official closing
price as reported by an independent pricing service on the primary market or exchange on
which they are traded. In the absence of quoted sales, such securities are valued at the bid
price or, in the absence of a recent bid price, the equivalent as obtained from one or more
of the major market makers for the securities to be valued.
Debt securities generally trade in the over-the-counter market. Debt securities with
remaining maturities of more than sixty days at the time of acquisition are valued on
the basis of last available bid prices or current market quotations provided by dealers
or pricing services. In determining the value of a particular investment, pricing services
may use certain information with respect to transactions in such investments, quotations
from dealers, pricing matrixes, market transactions in comparable investments, various
relationships observed in the market between investments and calculated yield measures
based on valuation technology commonly employed in the market for such investments.
Asset-backed and mortgage-backed securities are valued by independent pricing services
using models that consider estimated cash flows of each tranche of the security, establish a
benchmark yield and develop an estimated tranche-specific spread to the benchmark yield
based on the unique attributes of the tranche. Debt securities with a remaining maturity of
sixty days or less are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available are valued at fair value, as
determined in good faith pursuant to procedures established by the Board.
- 27 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
Securities in which the Fund invests may be traded in foreign markets that close before the
close of the NYSE. Developments that occur between the close of the foreign markets
and the close of the NYSE may result in adjustments to the foreign closing prices to reflect
what the investment adviser, pursuant to policies established by the Board, believes to be
the fair value 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.
Financial Accounting Standards Board Accounting Standards Codification 820 – Fair Value
Measurements and Disclosures (“ASC 820”) defines fair value as the price that the Fund
would receive upon selling an investment in a timely transaction to an independent buyer
in the principal or most advantageous market of the investment. ASC 820 established a
three-tier hierarchy to maximize the use of observable market data and minimize the use of
unobservable inputs and to establish classification of fair value measurements for disclosure
purposes. Inputs refer broadly to the assumptions that market participants would use in
pricing the asset or liability and may be observable or unobservable. Observable inputs
are based on market data obtained from sources independent of the Fund. Unobservable
inputs are inputs that reflect the Fund’s own assumptions based on the best information
available in the circumstances. The three-tier hierarchy of inputs is summarized in the three
broad Levels listed below.
• Level 1 – quoted prices in active markets for identical investments
• Level 2 – significant other observable inputs (including quoted prices for similar
investments, interest rates, prepayment speeds, credit risk, etc.)
• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in
determining the fair value of investments)
The Fund’s valuation techniques are generally consistent with either the market or the
income approach to fair value. The market approach considers prices and other relevant
information generated by market transactions involving identical or comparable assets
to measure fair value. The income approach converts future amounts to a current, or
discounted, single amount. These fair value measurements are determined on the basis
of the value indicated by current market expectations about such future events. Inputs
for Level 1 include exchange-listed prices and broker quotes in an active market. Inputs
for Level 2 include the last trade price in the case of a halted security, an exchange-listed
price which has been adjusted for fair value factors, and prices of closely related securities.
Additional Level 2 inputs include an evaluated price which is based upon a compilation of
observable market information such as spreads for fixed income and preferred securities.
Inputs for Level 3 include revenue multiples, earnings before interest, taxes, depreciation
and amortization (“EBITDA”) multiples, discount rates, and the probabilities of success of
certain outcomes. Such unobservable market information may be obtained from a company’s
financial statements and from industry studies, market data, and market indicators such as
benchmarks and indexes. Because of the inherent uncertainty and often limited markets for
restricted securities, the values may significantly differ from values if there was an active
market.
- 28 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
Valuation processes are determined by a Valuation Committee (“Committee”) established
by the Board and comprised of representatives of the Fund’s investment adviser. The
Committee reports its fair valuation determinations to the Board which is responsible for
approving valuation policy and procedures.
While the Committee meets on an as-needed basis, the Committee generally meets
quarterly to review and evaluate the effectiveness of the procedures for making fair value
determinations. The Committee considers, among other things, the results of quarterly back
testing of the fair value model for foreign securities, pricing comparisons between primary
and secondary price sources, the outcome of price challenges put to the Fund’s pricing
vendor, and variances between transactional prices and previous mark-to-markets.
The Fund will record a change to a security’s fair value level if new inputs are available
or it becomes evident that inputs previously considered for leveling have changed or are
no longer relevant. Transfers between Levels 1, 2 and 3 are recognized at the end of the
reporting period.
(b) Cash and Cash Equivalents: Cash and cash equivalents include U.S. dollars, foreign cash
and overnight time deposits.
(c) Securities Transactions and Investment Income: Securities transactions are recorded on a
trade date basis. Realized gains and losses from securities transactions are recorded on the
identified cost basis. Dividend income is recognized on the ex-dividend date and interest
income is recognized on the accrual basis.
Premiums and discounts on debt securities purchased are amortized or accreted over the
lives of the respective securities.
(d) Foreign Currency Translations: The books and records of the Fund are maintained in U.S.
dollars. Foreign currencies, investments and other assets and liabilities are translated into
U.S. dollars at the prevailing rates of exchange on the valuation date. Purchases and sales
of investment securities and income and expenses are translated into U.S. dollars at the
prevailing exchange rates on the respective dates of such transactions.
Net realized gains and losses on foreign currency transactions represent net gains and losses
from the disposition of foreign currencies, currency gains and losses realized between the
trade dates and settlement dates of security transactions, and the difference between the
amount of net investment income accrued and the U.S. dollar amount actually received.
The effects of changes in foreign currency exchange rates on investments in securities
are included in realized and unrealized gain or loss on investments in the accompanying
Statement of Operations.
(e) Dividends to Shareholders: Dividends and distributions payable to shareholders are recorded
on the ex-dividend date. The Fund declares and pays dividends from net investment income,
if available, annually. Dividends from net realized gains, offset by any loss carryforward, are
declared and paid annually after the end of the fiscal year in which earned.
Each class is treated separately in determining the amounts of dividends from net investment
income payable to holders of its shares.
- 29 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
The characterization of distributions to shareholders for financial reporting purposes is
determined in accordance with federal income tax rules. Therefore, the source of the Fund’s
distributions may be shown in the accompanying financial statements as either from, or in
excess of, net investment income, net realized gain on investment transactions or return of
capital, depending on the type of book/tax differences that may exist. Capital accounts within
the financial statements are adjusted for permanent book/tax differences. Reclassifications
result primarily from the difference in tax treatment of net operating losses, passive foreign
investment companies, and foreign currency transactions. The reclassifications are done
annually at fiscal year end and have no impact on the net asset value of the Fund and are
designed to present the Fund’s capital accounts on a tax basis.
(f) Lending of Fund Securities: The Fund may lend its securities to financial institutions,
provided that the market value of the securities loaned will not at any time exceed one
third of the Fund’s total assets, as defined in its prospectus. The Fund earns fees on the
securities loaned, which are included in interest income in the accompanying Statement
of Operations. In order to protect against the risk of failure by the borrower to return the
securities loaned or any delay in the delivery of such securities, the loan is collateralized by
cash or securities that are maintained with the Custodian in an amount equal to at least 102
percent of the current market value of U.S. loaned securities or 105 percent for non-U.S.
loaned securities. The market value of the loaned securities is determined at the close of
business of the Fund. Any required additional collateral is delivered to the Custodian and
any excess collateral is returned to the borrower on the next business day. In the event the
borrower fails to return the loaned securities when due, the Fund may take the collateral
to replace the securities. If the value of the collateral is less than the purchase cost of
replacement securities, the Custodian shall be responsible for any shortfall, but only to the
extent that the shortfall is not due to any diminution in collateral value, as defined in the
securities lending agreement. The Fund is required to maintain the collateral in a segregated
account and determine its value each day until the loaned securities are returned. Cash
collateral may be invested as determined by the Fund. Collateral is returned to the borrower
upon settlement of the loan. There were no securities loaned as of October 31, 2017.
(g) Federal Income Taxes: It is the Fund’s policy to comply with the requirements of the
Internal Revenue Code Subchapter M applicable to regulated investment companies and
to distribute all of its taxable income to its shareholders. Provided that the Fund maintains
such compliance, no federal income tax provision is required.
Financial Accounting Standards Board Accounting Standards Codification 740 – Income
Taxes (“ASC 740”) requires the Fund to measure and recognize in its financial statements
the benefit of a tax position taken (or expected to be taken) on an income tax return
if such position will more likely than not be sustained upon examination based on the
technical merits of the position. No tax years are currently under investigation. The Fund
files income tax returns in the U.S., as well as New York State and New York City. The
statute of limitations on the Fund’s tax returns remains open for the tax years 2014-2017.
Management does not believe there are any uncertain tax positions that require recognition
of a tax liability.
- 30 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
(h) Allocation Methods: Income, realized and unrealized gains and losses, and expenses of the
Fund are allocated among the Fund’s classes based on relative net assets, with the exception
of distribution fees, transfer agency fees, and shareholder servicing and related fees.
(i) Estimates: These financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America, which require using estimates
and assumptions that affect the reported amounts therein. Actual results may differ from
those estimates. All such estimates are of normal recurring nature.
NOTE 3 — Investment Advisory Fees and Other Transactions with Affiliates:
(a) Investment Advisory Fees: Fees incurred by the Fund, pursuant to the provisions of the Fund’s
Investment Advisory Agreement with Fred Alger Management, Inc. (“Alger Management”
or the “Manager”), are payable monthly and computed based on the following rates. The
actual rate paid as a percentage of average daily net assets, for the year ended October 31,
2017, is set forth below under the heading “Actual Rate.”
| | | | | | | | | | |
| | | Tier 1 | | | Tier 2 | | | Actual Rate | |
| Alger Global | | | | | | | | | |
| Growth Fund(a) | | 0.800 | % | | 0.700 | % | | 0.800 | % |
(a) Tier 1 rate is paid on assets up to $500 million, Tier 2 rate is paid on assets in excess of $500 million.
Alger Management has established expense caps for the share classes, through August 29,
2018, whereby it reimburses the share classes if annualized operating expenses (excluding
interest, taxes, brokerage and extraordinary expenses) exceed the rates, based on average
daily net assets, listed below:
| | | | | | | |
| | | | | | | FEES WAIVED |
| | | | | | | / REIMBURSED |
| | | | | | | FOR THE YEAR |
| | | CLASS | | | ENDED |
| | | | | | | OCTOBER 31, |
| | A | C | I | Z | | 2017 |
| Alger Global Growth Fund | 1.50% | 2.25% | 1.25% | 1.09% | $ | 289,781 |
Fred Alger Management Inc., may, during the one-year term of the expense reimbursement
contract, recoup any expenses waived or reimbursed pursuant to the expense reimbursement
contract to the extent that such recoupment would not cause the expense ratio to exceed
the lesser of the stated limitation in affect at the time of (i) the waiver or reimbursement
and (ii) the recoupment. For the year ended October 31, 2017, there were no recoupments
made by the Fund to the Investment Manager. As of October 31, 2017, the total repayments
that may potentially be made by the Fund to the Investment Manager is $215,533 which will
expire by August 29, 2018.
(b) Administration Fees: Fees incurred by the Fund, pursuant to the provisions of the Fund’s
Administration Agreement with Fred Alger Management, Inc., are payable monthly and
computed based on the average daily net assets of the Fund at the annual rate of 0.0275%.
(c) Distribution/Shareholder Servicing Fees: The Fund has adopted a distribution plan pursuant
to which the Fund pays Alger Inc. a fee at the annual rate of 0.25% of the average daily
- 31 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
net assets of the Class A and Class I shares and 1.00% of the average daily net assets
of the Class C shares to compensate Alger Inc. for its activities and expenses incurred in
distributing the Fund’s shares and shareholder servicing. Fees paid may be more or less than
the expenses incurred by Alger Inc.
(d) Sales Charges: Purchases and sales of shares of the Fund may be subject to initial sales
charges or contingent deferred sales charges. For the year ended October 31, 2017, the
initial sales charges and contingent deferred sales charges imposed, all of which were
retained by Fred Alger & Company, Incorporated, the Fund’s distributor (the “Distributor”
or “Alger Inc.”), were approximately $1,693 and $125, respectively. The initial sales charges
and contingent deferred sales charges are used by Alger Inc. to offset distribution expenses
previously incurred. Sales charges do not represent expenses of the Fund.
(e) Brokerage Commissions: During the year ended October 31, 2017, the Fund paid Alger Inc.
$10,678 in connection with securities transactions.
(f) Shareholder Administrative Fees: The Fund has entered into a shareholder administrative
services agreement with Alger Management to compensate Alger Management for its
liaison and administrative oversight of Boston Financial Data Services, Inc., the Fund’s
transfer agent, and other related services. The Fund compensates Alger Management at the
annual rate of 0.0165% of the respective average daily net assets of Class A and Class C
shares and 0.01% of the respective average daily net assets of the Class I and Class Z shares
for these services.
Alger Management makes payments to intermediaries that provide sub-accounting services
to omnibus accounts invested in the Fund. A portion of the fees paid by Alger Management
to intermediaries that provide sub-accounting services are charged back to the Fund, subject
to certain limitations, as approved by the Board. For the year ended October 31, 2017, Alger
Management charged back $13,846 to the Fund for these services, which are included in
transfer agent fees and expenses in the accompanying Statement of Operations.
(g) Trustees’ Fees: Effective March 1, 2016, each Independent Trustee receives a fee of
$27,250 for each board meeting attended, to a maximum of $109,000 per annum, paid pro
rata by each fund in the Alger Fund Complex, plus travel expenses incurred for attending
the meeting. The term “Alger Fund Complex” refers to the Fund, The Alger Institutional
Funds, The Alger Funds II, The Alger Portfolios and The Alger Funds, each of which is a
registered investment company managed by Fred Alger Management, Inc. The Independent
Trustee appointed as Chairman of the Board of Trustees receives additional compensation
of $26,000 per annum paid pro rata by each fund in the Alger Fund Complex. Additionally,
each member of the Audit Committee receives a fee of $2,500 for each Audit Committee
meeting attended to a maximum of $10,000 per annum, paid pro rata by each fund in the
Alger Fund Complex.
(h) Interfund Loans: The Fund, along with other funds advised by Alger Management, may
borrow money from and lend money to each other for temporary or emergency purposes.
To the extent permitted under its investment restrictions, each fund may lend uninvested
cash in an amount up to 15% of its net assets to other funds. If a fund has borrowed from
other funds and has aggregate borrowings from all sources that exceed 10% of the fund’s
- 32 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
total assets, such fund will secure all of its loans from other funds. The interest rate charged
on interfund loans is equal to the average of the overnight time deposit rate and bank loan
rate available to the funds. There were no interfund loans throughout the period or as of
October 31, 2017.
(i) Other Transactions with Affiliates: Certain officers of the Fund are directors and officers of
Alger Management and Alger Inc. At October 31, 2017, Alger Management and its affiliated
entities owned the following shares of the Fund:
| | | | | | | | |
| | | | SHARE CLASS | | |
| | | | A | C | I | | Z |
| Alger Global Growth Fund | | | — | — | 6,245 | | 20,176 |
NOTE 4 — Securities Transactions:
The following summarizes the securities transactions by the Fund for the year ended
October 31, 2017:
| | | | | | |
| | | PURCHASES | | | SALES |
| Alger Global Growth Fund | $ | 37,299,627 | | $ | 42,631,991 |
Transactions in foreign securities may involve certain considerations and risks not typically
associated with those of U.S. companies because of, among other factors, the level of
governmental supervision and regulation of foreign security markets, and the possibility of
political or economic instability. Additional risks associated with investing in the emerging
markets include increased volatility, limited liquidity, and less stringent regulatory and legal
system.
NOTE 5 — Borrowings:
The Fund may borrow from its custodian on an uncommitted basis. The Fund pays the
custodian a market rate of interest, generally based upon the London Interbank Offered Rate.
The Fund may also borrow from other funds advised by Alger Management, as discussed in
Note 3(h). For the year ended October 31, 2017, the Fund had no such borrowings.
- 33 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE 6 — Share Capital:
(a) The Fund has an unlimited number of authorized shares of beneficial interest of $.001
par value. Transactions of shares of beneficial interest were as follows:
| | | | | | | | | | | | | | | |
| | | FOR THE YEAR ENDED | | | | FOR THE YEAR ENDED | |
| | | OCTOBER 31, 2017 | | | | OCTOBER 31, 2016 | |
| | | SHARES | | | | AMOUNT | | | | SHARES | | | AMOUNT | |
| Alger Global Growth Fund | | | | | | | | | | | | | | |
| Class A: | | | | | | | | | | | | | | |
| Shares sold | | 20,858 | | $ | | 457,310 | | | | 26,306 | | $ | 527,477 | |
| Dividends reinvested | | 8,728 | | | | 181,187 | | | | — | | | — | |
| Shares redeemed | | (204,004 | ) | | | (4,515,069 | ) | | | (220,777 | ) | | (4,419,616 | ) |
| Net (decrease) | | (174,418) | | $ | | (3,876,572) | | | | (194,471) | | $ | | (3,892,139) | |
| Class C: | | | | | | | | | | | | | | |
| Shares sold | | 11,783 | | $ | | 248,858 | | | | 36,112 | | $ | 700,092 | |
| Dividends reinvested | | 684 | | | | 13,517 | | | | — | | | — | |
| Shares redeemed | | (102,587 | ) | | | (2,153,845 | ) | | | (29,364 | ) | | (568,590 | ) |
| Net increase (decrease) | | (90,120) | | $ | | (1,891,470) | | | | 6,748 | | $ | 131,502 | |
| Class I: | | | | | | | | | | | | | | |
| Shares sold | | 2,988 | | $ | | 66,074 | | | | 10,971 | | $ | 219,633 | |
| Dividends reinvested | | 505 | | | | 10,157 | | | | — | | | — | |
| Shares redeemed | | (10,453 | ) | | | (216,892 | ) | | | (84,234 | ) | | (1,741,661 | ) |
| Net (decrease) | | (6,960 | ) | $ | | (140,661 | ) | | | (73,263) | | $ | | (1,522,028) | |
| Class Z: | | | | | | | | | | | | | | |
| Shares sold | | 69,230 | | $ | | 1,579,384 | | | | 95,159 | | $ | 1,973,446 | |
| Dividends reinvested | | 1,159 | | | | 24,451 | | | | — | | | — | |
| Shares redeemed | | (47,995 | ) | | | (1,078,972 | ) | | | (28,953 | ) | | (595,744 | ) |
| Net increase | | 22,394 | | $ | | 524,863 | | | | 66,206 | | $ | 1,377,002 | |
NOTE 7 — Income Tax Information:
The tax character of distributions paid during the year ended October 31, 2017 and the year
ended October 31, 2016 were as follows:
| | | | | | |
| | FOR THE YEAR ENDED | FOR THE YEAR ENDED |
| | OCTOBER 31, 2017 | | OCTOBER 31, 2016 |
| Alger Global Growth Fund | | | | | |
| Distributions paid from: | | | | | |
| Ordinary Income | $ | 265,388 | | | — |
| Long-term capital gain | | — | | | — |
| Total distributions paid | $ | 265,388 | | — |
- 34 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
As of October 31, 2017 the components of accumulated gains (losses) on a tax basis were
as follows:
| | | |
| Alger Global Growth Fund | | |
| Undistributed ordinary income | $ | 1,062,971 |
| Undistributed long-term gains | | — |
| Net accumulated earnings | $ | 1,062,971 |
| Capital loss carryforwards | | — |
| Net unrealized appreciation | | 3,051,297 |
| Total accumulated earnings | $ | 4,114,268 |
At October 31, 2017, the Fund, for federal income tax purposes, had no capital loss
carryforward.
During the year ended October 31, 2017, Alger Global Growth Fund utilized $2,605,132 of
its capital loss carryforwards.
Under the Regulated Investment Company Modernization Act of 2010, capital losses
incurred by the Fund on or after January 1, 2011 (Post Act) will not be subject to expiration.
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is
determined annually and is attributable primarily to the tax deferral of losses on wash sales,
U.S. Internal Revenue Code Section 988 currency transactions, the realization of unrealized
appreciation of passive foreign investment companies, and partnership basis adjustments.
Permanent differences, primarily from net operating losses and real estate investment trusts
and partnership investments sold by the Fund, resulted in the following reclassifications
among the Fund’s components of net assets at October 31, 2017:
| | | | |
| Alger Global Growth Fund | | | |
| Accumulated undistributed net investment income (accumulated loss) | $ | 342,474 | |
| Accumulated net realized gain (accumulated realized loss) | $ | 26,358 | |
| Paid-in Capital | $ | (368,832 | ) |
NOTE 8 — Fair Value Measurements
The following is a summary of the inputs used as of October 31, 2017 in valuing the Fund’s
investments carried at fair value on a recurring basis. Based upon the nature, characteristics,
and risks associated with its investments, the Fund has determined that presenting them by
security type and sector is appropriate.
- 35 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
| | | | | | | | | | | |
| Alger Global Growth Fund | TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 | |
| COMMON STOCKS | | | | | | | | | | |
| Consumer Discretionary | $ | 2,473,555 | $ | 2,027,736 | $ | 445,819 | $ | — | |
| Consumer Staples | | | 1,066,371 | | 299,668 | | 766,703 | | — | |
| Energy | | | 1,583,969 | | 1,583,969 | | — | | — | |
| Financials | | | 5,580,787 | | 2,945,183 | | 2,635,604 | | — | |
| Health Care | | | 3,348,745 | | 2,951,564 | | 397,181 | | — | |
| Industrials | | | 2,499,363 | | 1,784,618 | | 714,745 | | — | |
| Information Technology | | | 9,189,623 | | 7,435,680 | | 1,735,681 | | 18,262 | * |
| Materials | | | 1,373,851 | | 780,205 | | 593,646 | | — | |
| Real Estate | | | 50,104 | | — | | 50,104 | | — | |
| Telecommunication Services | | | 485,835 | | — | | 485,835 | | — | |
| TOTAL COMMON STOCKS | $ | 27,652,203 | $ | 19,808,623 | $ | 7,825,318 | $ | 18,262 | |
| CORPORATE BONDS | | | | | | | | | | |
| Information Technology | | | — | | — | | — | | —* | |
| PREFERRED STOCKS | | | | | | | | | | |
| Health Care | | | 105,637 | | — | | — | | 105,637 | |
| Information Technology | | | 84,169 | | — | | — | | 84,169 | * |
| TOTAL PREFERRED | | | | | | | | | | |
| STOCKS | $ | 189,806 | | — | | — | $ | 189,806 | |
| RIGHTS | | | | | | | | | | |
| Information Technology | | | 92 | | 92 | | — | | — | |
| SPECIAL PURPOSE VEHICLE | | | | | | | | | |
| Financials | | | 67,586 | | — | | — | | 67,586 | |
| WARRANTS | | | | | | | | | | |
| Information Technology | | | — | | — | | — | | —* | |
| TOTAL INVESTMENTS IN | | | | | | | | | | |
| SECURITIES | $ | 27,909,687 | $ | 19,808,715 | $ | 7,825,318 | $ | 275,654 | |
*Alger Global Growth Fund’s shares of Choicestream Inc. common stock, preferred stock,
warrants and corporate bonds are classified as a Level 3 investment and are fair valued at
zero as of October 31, 2017.
- 36 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
| | | | | |
| | FAIR VALUE | |
| | MEASUREMENTS | |
| | | | USING | |
| | SIGNIFICANT | |
| | UNOBSERVABLE | |
| | INPUTS (LEVEL 3) | |
| Alger Global Growth Fund | Common Stocks | |
| Opening balance at November 1, 2016 | $ | 24,296 | |
| Transfers into Level 3 | | | — | |
| Transfers out of Level 3 | | | — | |
| Total gains or losses | | | | |
| Included in net realized gain (loss) on investments | | — | |
| Included in net unrealized gain (loss) on investments | | (6,034 | ) |
| Purchases and sales | | | | |
| Purchases | | — | |
| Sales | | — | |
| Closing balance at October 31, 2017 | | | 18,262 | * |
| Net change in unrealized appreciation (depreciation) attributable to | | | | |
| investments still held at October 31, 2017 | $ | (6,034 | ) |
| |
| Alger Global Growth Fund | Corporate Bonds | |
| Opening balance at November 1, 2016 | $ | 4,637 | |
| Transfers into Level 3 | | | — | |
| Transfers out of Level 3 | | | — | |
| Total gains or losses | | | | |
| Included in net realized gain (loss) on investments | | — | |
| Included in net unrealized gain (loss) on investments | | (4,637 | ) |
| Purchases and sales | | | | |
| Purchases | | — | |
| Sales | | — | |
| Closing balance at October 31, 2017 | | | 0 | * |
| Net change in unrealized appreciation (depreciation) attributable to | | | | |
| investments still held at October 31, 2017 | $ | (4,637 | ) |
| |
| Alger Global Growth Fund | Preferred Stocks | |
| Opening balance at November 1, 2016 | $ | 368,937 | |
| Transfers into Level 3 | | | — | |
| Transfers out of Level 3 | | | — | |
| Total gains or losses | | | | |
| Included in net realized gain (loss) on investments | | 39,070 | |
| Included in net unrealized gain (loss) on investments | | (123,161 | ) |
| Purchases and sales | | | |
| Purchases | | | — | |
| Sales | | (95,040 | ) |
| Closing balance at October 31, 2017 | | | 189,806 | |
| Net change in unrealized appreciation (depreciation) attributable to | | | | |
| investments still held at October 31, 2017 | $ | (84,091 | )* |
- 37 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
| | | | | |
| | Special Purpose | |
| Alger Global Growth Fund | | | Vehicle | |
| Opening balance at November 1, 2016 | $ | 58,175 | |
| Transfers into Level 3 | | | — | |
| Transfers out of Level 3 | | | — | |
| Total gains or losses | | | | |
| Included in net realized gain (loss) on investments | | — | |
| Included in net unrealized gain (loss) on investments | | 9,411 | |
| Purchases and sales | | | | |
| Purchases | | — | |
| Sales | | | — | |
| Closing balance at October 31, 2017 | | | 67,586 | |
| Net change in unrealized appreciation (depreciation) attributable to | | | | |
| investments still held at October 31, 2017 | $ | 9,411 | |
| |
| Alger Global Growth Fund | | | Warrants | |
| Opening balance at November 1, 2016 | $ | 4,544 | |
| Transfers into Level 3 | | | — | |
| Transfers out of Level 3 | | | — | |
| Total gains or losses | | | | |
| Included in net realized gain (loss) on investments | | — | |
| Included in net unrealized gain (loss) on investments | | (4,544 | ) |
| Purchases and sales | | | | |
| Purchases | | | — | |
| Sales | | | — | |
| Closing balance at October 31, 2017 | | | 0 | * |
| Net change in unrealized appreciation (depreciation) attributable to | | | | |
| investments still held at October 31, 2017 | $ | (4,544 | ) |
*Includes securities that are fair valued at zero.
The following table provides quantitative information about our Level 3 fair value
measurements of our investments as of October 31, 2017. In addition to the techniques
and inputs noted in the table below, according to our valuation policy we may also use other
valuation techniques and methodologies when determining our fair value measurements.
The table below is not intended to be all-inclusive, but rather provides information on the
Level 3 inputs as they relate to our fair value measurements.
- 38 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
| | | | | | | | |
| | | Fair Value | Valuation | Unobservable | | | Weighted |
| | | October 31, 2017 | Methodology | Input | Range/Input | | Average Inputs |
| Alger Global Growth Fund | | | | | |
| Common Stock | $ | 18,262 | Market | Market Quotation | N/A* | | N/A |
| | | | Approach | | | | |
| Preferred Stocks | | 105,637 | Income | Discount Rate | 38-42% | | N/A |
| | | | Approach | | | | |
| Preferred Stocks | | 84,169 | Market | Market Quotation | N/A* | | N/A |
| | | | Approach | | | | |
| Special Purpose Vehicle | | 67,586 | Market | Revenue Multiple | 2.9x-4.2x | | N/A |
| | | | Approach | | | | |
*The Fund utilized a market approach to fair value this security. The significant unobservable input used in the
valuation model was a market quotation available to the Fund at October 31, 2017.
The significant unobservable inputs used in the fair value measurement of the Fund’s
securities are revenue and EBITDA multiples, discount rates, and the probabilities of
success of certain outcomes. Significant increases and decreases in these inputs in isolation
and interrelationships between those inputs could result in significantly higher or lower fair
value measurements than those noted in the table above. Generally, increases in revenue and
EBITDA multiples, decreases in discount rates, and increases in the probabilities of success
results in higher fair value measurements, whereas decreases in revenues and EBITDA
multiples, increases in discount rates, and decreases in the probabilities of success results in
lower fair value measurements.
On October 31, 2017, there were no transfers of securities between Level 1 and Level 2.
Certain of the Fund’s assets and liabilities are held at carrying amount or face value, which
approximates fair value for financial statement purposes. As of October 31, 2017, such
assets are categorized within the ASC 820 disclosure hierarchy as follows:
| | | | | | | |
| | TOTAL FUND | LEVEL 1 | LEVEL 2 | LEVEL 3 |
| Cash, Foreign cash and Cash equivalents: | | | | | |
| Alger Global Growth Fund | | $ | 936,586 | $ | 518 | $ | 936,068 | | — |
NOTE 9 — Derivatives:
Financial Accounting Standards Board Accounting Standards Codification 815 – Derivatives
and Hedging (“ASC 815”) requires qualitative disclosures about objectives and strategies for
using derivatives, quantitative disclosures about fair value amounts of and gains and losses
on derivative instruments, and disclosures about credit-risk-related contingent features in
derivative agreements.
There were no open derivative instruments throughout the period or as of October 31,
2017.
NOTE 10 — Principal Risks:
In the normal course of business, the Fund invests in securities and enters into transactions
where risks exist due to fluctuations in the market (market risk) or failure of the issuer
- 39 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
of a security to meet all its obligations (issuer credit risk). The value of securities held by
the Fund may decline in response to certain events, including those directly involving the
issuers whose securities are owned by the Fund; conditions affecting the general economy;
overall market changes; local, regional or global political, social or economic instability; and
currency and interest rate and price fluctuations. Similar to issuer credit risk, the Fund may
be exposed to counterparty credit risk, or the risk that an entity with which the Fund has
unsettled or open transactions may fail to or be unable to perform on its commitments. The
Fund manages counterparty credit risk by entering into transactions only with counterparties
that it believes have the financial resources to honor their obligations and by monitoring
the financial stability of those counterparties. Financial assets, which potentially expose
the Fund to market, issuer and counterparty credit risks, consist principally of financial
instruments and receivables due from counterparties. The extent of the Fund’s exposure to
market, issuer and counterparty credit risks with respect to these financial assets is generally
approximated by its value recorded in the Statement of Assets and Liabilities, less any
collateral held by the Fund.
The Fund invests in companies that are not yet available in the public markets and that are
accessible only through private equity investments. The Fund may also invest in venture
capital or private equity funds, direct private equity investments and other investments that
may have limited liquidity. There may be no trading market for these securities, and their
sale or transfer may be limited or prohibited by contract or legal requirements, or may be
dependent on an exit strategy, such as an initial public offering 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. The securities may
be able to be liquidated, if at all, at disadvantageous prices. As a result, the Fund may be
required to hold these positions for several years, if not longer, regardless of adverse price
movements. Such positions may cause the Fund to be less liquid than would otherwise be
the case.
NOTE 11 — Affiliated Securities:
The issuers of the securities listed below are deemed to be affiliates of the Fund because the
Fund or its affiliates owned 5% or more of the issuer’s voting securities during all or part of
the year ended October 31, 2017. Purchase and sale transactions and interest income earned
during the period were as follows:
- 40 -
Alger Global Growth Fund
NOTES TO FINANCIAL STATEMENTS (Continued)
| | | | | | | | | | | | | |
| | | | | | | | | | Net Increase | | | |
| | Shares/ | | | Shares/ | | | | | (Decrease) | | | |
| | Par at | | | Par at | | | | | in | | | Value at |
| | October 31, | Purchases/ | Sales/ | October 31, | | Interest | Realized | | Unrealized | | | October 31, |
| Security | 2016 | Conversion | Conversion | 2017 | | Income | Gain (Loss) | | App(Dep) | | | 2017 |
| Alger Global Growth Fund | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | |
| Choicestream, Inc. | 1,969 | – | – | 1,969 | $ | – | $ | – | $ | | – | | $ | 0 |
| Preferred Stocks | | | | | | | | | | | | |
| Choicestream, Inc. , | | | | | | | | | | | | |
| Series A and B | 53,598 | – | – | 53,598 | | – | – | | (21,605 | ) | | 0 |
| Prosetta Biosciences, | | | | | | | | | | | | |
| Inc. , Series D | 33,858 | – | – | 33,858 | | – | – | | (31,149 | ) | | 105,637 |
| Corporate Bonds | | | | | | | | | | | | |
| Choicestream, Inc., | | | | | | | | | | | | |
| 11.0%, 8/05/18 | 4,637 | – | – | 4,637 | | 91 | – | | (5,195 | ) | | 0 |
| Warrants | | | | | | | | | | | | |
| Choicestream, Inc. | | | | | | | | | | | | |
| 6/22/26 | 4,637 | – | – | 4,637 | | – | – | | (4,544 | ) | | 0 |
| Total | | | | | $ | 91 | $ | – | $ | (62,493 | ) | $ | 105,637 |
NOTE 12 — Subsequent Events:
Management of the Fund has evaluated events that have occurred subsequent to October
31, 2017 through the issuance date of the Financial Statements. No such events have been
identified which require recognition and/or disclosure.
- 41 -
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of the Alger Global Growth Fund:
We have audited the accompanying statement of assets and liabilities of Alger Global
Growth Fund (the “Fund”), including the schedule of investments as of October 31, 2017,
and the related statement of operations for the year then ended, the statements of changes
in net assets for each of the two years in the period then ended, and the financial highlights
for each of the periods presented. These financial statements and financial highlights are
the responsibility of the Fund’s management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. The Fund is not required to have, nor
were we engaged to perform, an audit of its internal control over financial reporting. Our
audits included consideration of its internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Fund’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. Our procedures included
confirmation of securities owned as of October 31, 2017, by correspondence with the
custodian and brokers; when replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present
fairly, in all material respects, the financial position of Alger Global Growth Fund as of
October 31, 2017, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the financial highlights for
each of the periods presented, in conformity with accounting principles generally accepted
in the United States of America.
Deloitte & Touche LLP
New York, New York
December 22, 2017
- 42 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited)
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: transaction costs, if applicable,
including sales charges (loads) and redemption fees; and ongoing costs, including
management fees, distribution (12b-1) fees, if applicable, and other fund expenses. This
example is intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other mutual
funds.
The example below is based on an investment of $1,000 invested at the beginning of the
six-month period starting May 1, 2017 and ending October 31, 2017.
Actual Expenses
The first line for each class of shares in the table below provides information about actual
account values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you would have paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first line under the
heading entitled “Expenses Paid during the Period” to estimate the expenses you paid on
your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each class of shares in the table below provides information about
hypothetical account values and hypothetical expenses based on the Fund’s actual expense
ratios for each class of shares and an assumed rate of return of 5% per year before expenses,
which is not the Fund’s actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs
only and do not reflect any transaction costs, such as sales charges (loads) and redemption
fees. Therefore, the second line under each class of shares in the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your costs would
have been higher.
- 43 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
| | | | | | | | | | | | |
| | | | | | | | Expenses | | Annualized | |
| | | | | | | | Paid During | | Expense Ratio | |
| | | | | | Ending | | the Six | | | For the | |
| | | Beginning | | Account | | Months | | Six Months | |
| | | Account | | Value | | Ended | | | Ended | |
| | | | Value | | October 31, | | October 31, | | October 31, | |
| | | May 1, 2017 | | 2017 | | 2017 | (a) | | 2017 | (b) |
| Alger Global Growth Fund | | | | | | | | | | |
| Class A | Actual | $ | 1,000.00 | $ | 1,062.70 | $ | 7.80 | | | 1.50 | % |
| | Hypothetical(c) | | 1,000.00 | | 1,017.64 | | 7.63 | | | 1.50 | |
| Class C | Actual | | 1,000.00 | | 1,107,40 | | 11.95 | | | 2.25 | |
| | Hypothetical(c) | | 1,000.00 | | 1,013.86 | | 11.42 | | | 2.25 | |
| Class I | Actual | | 1,000.00 | | 1,123.30 | | 6.69 | | | 1.25 | |
| | Hypothetical(c) | | 1,000.00 | | 1,018.90 | | 6.36 | | | 1.25 | |
| Class Z | Actual | | 1,000.00 | | 1,124.20 | | 5.84 | | | 1.09 | |
| | Hypothetical(c) | | 1,000.00 | | 1,019.71 | | 5.55 | | | 1.09 | |
| | | | | | | | | | | | |
(a) Expenses are equal to the annualized expense ratio of the respective share class, multiplied by the average account
value over the period, multiplied by 184/365 (to reflect the one-half year period).
(b) Annualized.
(c) 5% annual return before expenses.
- 44 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
Tax Information
For the year ended October 31, 2017, certain dividends paid by the Funds may be subject to
a maximum rate of 15%, as provided by the Jobs and Growth Tax Relief Reconciliation Act
of 2003. Of the distributions paid during the fiscal year, 100% of the Fund’s dividend may
be considered qualified dividend income.
Shareholders should not use the above information to prepare their tax returns. Since the
Fund’s fiscal year is not calendar year, another notification will be sent with respect to
calendar year 2017. Such notification, which will reflect the amount to be used by tax payers
on their federal income returns, will be made in conjunction with Form 1099 DIV and will
be mailed in January 2018. Shareholders are advised to consult their own tax advisers with
respect to the consequences of their investment in the Fund.
- 45 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
Trustees and Officers of the Trust
Information about the trustees and officers of the Trust is set forth below. In the table
the term "Alger Fund Complex" refers to the Fund, The Alger Portfolios, The Alger
Institutional Funds, The Alger Funds and The Alger Funds II, each of which is a registered
investment company managed by Fred Alger Management, Inc. ("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 officer's term of office is one year. Unless otherwise
noted, the address of each person named below is 360 Park Avenue South, New York, NY
10010.
- 46 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
| | | | |
| | | | Number |
| | | | of Funds |
| | | | in the |
| | | | Alger |
| | | | Fund |
| | | | Complex |
| | | Trustee | which are |
| | | and/or | Overseen |
| Name, Age, Position with | | Officer | by |
| the Fund | Principal Occupations | Since | Trustee |
| INTERESTED TRUSTEE | | | |
| Hilary M. Alger (56) | Director of Development, Pennsylvania Ballet 2004- | 2003 | 24 |
| | 2013; Associate Director of Development, College | | |
| | of Arts and Science and Graduate School, University | | |
| | of Virginia 1999-2003. | | |
| NON-INTERESTED | | | |
| TRUSTEE | | | |
| |
| Charles F. Baird, Jr. (64) | Managing Director of North Castle Partners, | 2000 | 24 |
| | a private equity securities group; Chairman of | | |
| | Elizabeth Arden Red Door Spas and Barry’s | | |
| | Bootcamp, former Chairman of Cascade Helmets, | | |
| | gloProfessional (makeup and skincare business), | | |
| | Contigo (manufacturer of mugs and water bottles), | | |
| | and International Fitness. | | |
| Roger P. Cheever (72) | Associate Vice President for Principal Gifts and | 2000 | 24 |
| | Senior Associate Dean for Development in the | | |
| | Faculty of Arts and Sciences at Harvard University; | | |
| | Formerly Deputy Director of the Harvard College | | |
| | Fund. | | |
| Stephen E. O'Neil (84) | Attorney. Private Investor since 1981. Formerly of | 1986 | 24 |
| | Counsel to the law firm of Kohler & Barnes. | | |
| David Rosenberg (55) | Associate Professor of Law since January 2006 | 2007 | 24 |
| | (Assistant Professor 2000-2005), Zicklin School of | | |
| | Business, Baruch College, City University of New | | |
| | York. | | |
| Nathan E. Saint-Amand | Medical doctor in private practice; Member of the | 1986 | 24 |
| M. D. (79) | Board of the Manhattan Institute (non-profit policy | | |
| | research) since 1988; Formerly Co-Chairman, Special | | |
| | Projects Committee, Memorial Sloan Kettering. | | |
Ms. Alger is an “interested person” (as defined in the Investment Company Act) of the
Trust because of her affiliations with Alger Management. No Trustee is a director of any
public company except as indicated under “Principal Occupations”.
- 47 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
| | | | | |
| | | | | Number |
| | | | | of Funds |
| | | | | in the |
| | | | | Alger |
| | | | | Fund |
| | | | | Complex |
| | | | Trustee | which are |
| Name, Age, Position with | | | and/or | Overseen |
| the | | | Officer | by |
| Fund | Principal Occupations | | Since | Trustee |
| OFFICERS | | | | |
| Hal Liebes (53) | Executive Vice President, Chief Operating Officer | | 2005 | N/A |
| President | and Secretary of Alger Management and Alger Inc. ; | | | |
| | Director since 2006 of Alger Management, Alger | | | |
| | Inc. and Analyst Resources, Inc. | | | |
| Tina Payne (43) | Senior Vice President, General Counsel and | | 2017 | N/A |
| Secretary, Chief Compliance | Chief Compliance Officer of Alger Management | | | |
| Officer | since 2017. Formerly, Senior Vice President and | | | |
| | Associate General Counsel, Cohen & Steers Capital | | | |
| | Management, from 2007 to 2017 | | | |
| Lisa A. Moss (52) | Senior Vice President and Assistant General Counsel | | 2006 | N/A |
| Assistant Secretary | of Alger Management. | | | |
| Christopher E. Ullman (32) | Associate Counsel of Alger Management since | | 2016 | N/A |
| Assistant Secretary | 2016. Formerly, Associate, Legal and Compliance, | | | |
| | BlackRock from 2015 to 2016; Compliance | | | |
| | Associate, Bridgewater Associates, from 2013 to | | | |
| | 2014; and full-time student fro m 2010 to 2013. | | |
| Michael D. Martins (52) | Senior Vice President of Alger Management. | | 2005 | N/A |
| Treasurer | | | | |
| Anthony S. Caputo (62) | Vice President of Alger Management. | | 2007 | N/A |
| Assistant Treasurer | | | | |
| Sergio M. Pavone (56) | Vice President of Alger Management. | | 2007 | N/A |
| Assistant Treasurer | | | | |
- 48 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
Investment Management Agreement Renewal
At an in-person meeting held on September 12, 2017, the Trustees, including the Independent
Trustees, unanimously approved renewal of the Investment Advisory Agreement (the
“Agreement”) between the Fund and Fred Alger Management, Inc. (“Alger Management”).
The Independent Trustees were assisted in their review by independent legal counsel and met
with such counsel in executive session separate from representatives of Alger Management.
In evaluating the Agreement, the Trustees drew on materials that they had requested and
which were provided to them in advance of the meeting by Alger Management and by
counsel. The materials covered, among other matters, (i) the nature, extent and quality
of the services provided by Alger Management under the Agreement, (ii) the investment
performance of the Fund, (iii) the costs to Alger Management of its services and the profits
realized by Alger Management and Fred Alger & Company, Incorporated (“Alger Inc.”),
from their relationship with the Fund, and (iv) the extent to which economies of scale
would be realized if and as the Fund grows and whether the fee levels in the Agreement
reflected such economies of scale. These materials included a presentation and analysis of
the Fund and Alger Management’s services by FUSE Research Network LLC (“FUSE”), an
independent consulting firm selected by the Fund’s Chief Compliance Officer and having
no other material relationship with Alger Management.
In deciding whether to approve renewal of the Agreement, the Trustees considered various
factors, including those enumerated above. They also considered other direct and indirect
benefits to Alger Management and its affiliates from their relationship with the Fund.
Nature, Extent and Quality of Services. In considering the nature, extent and quality of
the services provided by Alger Management pursuant to the Agreement, the Trustees relied
on their prior experience as Trustees of the Fund, their familiarity with the personnel and
resources of Alger Management and its affiliates (derived in part from periodic meetings
with and presentations by investment management and Fund distribution personnel), and the
materials provided at the meeting. They noted that under the Agreement Alger Management
is responsible for managing the investment operations of the Fund. The Trustees reviewed
the background and experience of Alger Management's senior investment management
personnel, including the individuals responsible for the investment operations of the Fund.
They also considered the resources and practices of Alger Management in managing the
Fund's portfolio, as well as Alger Management's overall investment management business.
They noted especially Alger Management's established expertise in managing portfolios of
"growth" stocks. They further noted that Alger Management’s investment management team
includes several individuals with deep and successful backgrounds in international investing,
a sector in which the Fund is active. The Trustees concluded that Alger Management's
experience, resources and strength in the areas of importance to the Fund are considerable.
They also noted that certain administrative, compliance, reporting and accounting services
necessary for the conduct of the Trust’s affairs are provided separately under a Fund
Administration Agreement and a Shareholder Administrative Services Agreement with Alger
Management. The Trustees also considered the strengthened legal, control and compliance
environment at Alger Management and within the Fund and Alger Management’s ongoing
- 49 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
implementation of a firm-wide cybersecurity facility, including software and hardware
installations, extensive security procedures and intensive personnel training.
Investment Performance of the Fund. Drawing upon information provided at the
meeting by Alger Management as well as FUSE and upon reports provided to the Trustees
by Alger Management throughout the preceding year, the Trustees reviewed the Fund’s
returns for the year-to-date (at 6/30/17), second-quarter of 2017, and 1- and 3-year periods,
and compared them with benchmark and peer-group data for the same periods. Because
the Fund had adopted a significantly different investment strategy on May 31, 2013, so that
performance data from periods prior to that date would not be reliably informative, the
Trustees considered only the investment performance of the Fund for 3-years and shorter,
more recent periods. They noted that the Fund’s performance for the one-year period ended
6/30/17 was distinctly subpar, ranking against the Fund’s peers in the bottom (fourth)
quartile (or, in the case of one share class, just barely into the next higher quartile) and well
below the benchmark. However, they also noted that the performance for the year-to-date
period, reflecting more recent results, ranked in the next higher (third) quartile and more
closely approached, while still underperforming, the Fund’s benchmark, and that for the
period covering only the recent quarter ended 6/30/17, three of the Fund’s share classes
performed virtually at the peer median, with the fourth class ranking not far below, while
every class exceeded its benchmark. The Trustees were encouraged by these indications that
the Fund’s performance had improved during the year ended 6/30/17.
Consistent with the practice followed at every quarterly meeting of Trustees throughout the
year, representatives of Alger Management discussed with the Trustees the performance of
the Fund. Throughout, the Trustees were mindful of conditions and trends in the current
market in equity securities, including growth stocks, and their impact on the performance
and assets of the Fund. On the basis of these discussions and their review, the Trustees
determined that the performance of the Fund was acceptable.
Fund Fee and Expense Ratio; Profitability to Alger Management and its Affiliates.
The Trustees reviewed the Fund's management fee and expense ratios at June 30, 2017
and compared them with a group of comparable funds. In order to assist the Trustees
in this comparison, FUSE had provided the Trustees with comparative information with
respect to the advisory fees and expense ratios of relevantly similar funds. That information
indicated that the advisory fee for the Fund was below the median for the fees in the FUSE
reference group. Of the expense ratios for the Fund’s four classes of shares, three were
above the medians for the FUSE reference group. One of the three was in the quartile just
above the median, while the other two were in the highest quartile, but the asset levels of all
three above-median share classes were quite low, so that the classes suffered in comparison
with their peers. The Trustees noted that Alger Management had committed to expense-
reimbursement provisions that capped Fund expense ratios at specified levels. The Trustees
determined that the expense-ratio information should be taken into account in weighing the
size of the fee against the nature, extent and quality of the services provided.
- 50 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
The Trustees also considered fees paid to Alger Management by five other types of clients,
specifically mutual funds for which Alger Management was sub-adviser, other pooled
investment vehicles (including UCITS and hedge funds), separately managed institutional
accounts, “wrap programs,” and collective investment trusts. The Trustees determined that
in all five cases the fees were of doubtful relevance for purposes of comparison with that
of the Fund because of the differences in services provided by Alger Management to those
types of clients as opposed to the Fund, but that to the extent that meaningful comparison
was practicable, the differences in services adequately explained the differences in the fees.
The Trustees then considered the profitability of the Investment Advisory Agreement to
Alger Management and its affiliates, and the methodology used by Alger Management in
determining such profitability. The Trustees reviewed previously-provided data on the
Fund’s profitability to Alger Management and its affiliates for the year ended June 30, 2017.
After discussing with representatives of FUSE the expense-allocation practices, which
FUSE reported to be consistent with accepted industry practice, used in computing the
costs that formed the bases of the profitability calculations, the Trustees turned to the
profitability data provided. After analysis and discussion, they concluded that, to the extent
that Alger Management’s and its affiliates’ relationships with the Fund had been profitable
to those entities, the profit margins were not unacceptable.
Economies of Scale. On the basis of their discussions with management and their
analysis of information provided at the meeting, the Trustees determined that the nature
of the Fund and its operations is such that Alger Management is likely to realize economies
of scale in the management of the Fund at some point as (and if) it grows in size. In
that connection, they noted that the advisory fee schedule in the Agreement includes a
fee reduction at a specified asset level (a “breakpoint”); this has the effect of lowering the
Fund’s overall management fee as the Fund grows past the breakpoint, thus sharing with
the Fund’s shareholders economies of scale achieved by Alger Management in managing
the growing Fund.
Other Benefits to Alger Management. The Trustees considered whether Alger
Management benefits in other ways from its relationship with the Fund. They noted that
Alger Management maintains soft-dollar arrangements in connection with the Fund’s
brokerage transactions, reports on which are regularly supplied to the Trustees at their
quarterly meetings and summaries of which, listing soft-dollar commissions for the twelve
months through June 30, 2017, had been included in the materials supplied prior to the
meeting. The Trustees also noted that Alger Management receives fees from the Fund
under the Fund Administration Agreement and the Shareholder Administrative Services
Agreement, and that Alger Inc. provides a considerable portion of the Fund’s equity
brokerage and receives shareholder servicing fees from the Fund as well. The Trustees
had been provided with information regarding, and had considered, the administration fee,
shareholder administrative services fee, brokerage and shareholder servicing fee benefits in
connection with their review of the profitability to Alger Management and its affiliates of
their relationships with the Fund. As to other benefits received, the Trustees decided that
none were so significant as to render Alger Management's fees excessive.
- 51 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
Conclusions and Determinations. At the conclusion of these discussions, each of the
Independent Trustees expressed the opinion that he had been furnished with sufficient
information to make an informed business decision with respect to renewal of the Fund's
Investment Advisory Agreement. Based on its discussions and considerations as described
above, the Board made the following conclusions and determinations:
• The Board concluded that the nature, extent and quality of the services provided
by Alger Management are adequate and appropriate.
• The Board determined that the Fund’s performance was acceptable.
• The Board concluded that the Fund’s advisory fee paid to Alger Management was
reasonable in light of comparative expense and advisory fee information, costs
of the services provided and profits to be realized and benefits derived or to be
derived by Alger Management and its affiliates from the relationship with the
Fund. The Trustees noted that Alger Management had undertaken to cap Fund
expenses through expense reimbursements, thus in effect lowering the fees it
actually received from the Fund.
• The Board accepted Alger Management’s acknowledgement that economies of
scale were likely to be achieved in the management of the Fund as (and if) it
grew in size and determined that the fee breakpoint in the Agreement provided a
means by which Alger Management would share the benefits of such economies
with Fund shareholders.
The Board considered these conclusions and determinations and, without any one factor
being dispositive, determined that renewal of the Investment Advisory Agreement was in
the best interests of the Fund and its shareholders.
- 52 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
Privacy Policy
| | | |
| U. S. Consumer Privacy Notice | Rev. 12/20/16 |
| FACTS | WHAT DOES ALGER DO WITH YOUR PERSONAL INFORMATION? |
| Why? | Financial companies choose how they share your personal information. Federal law |
| | gives consumers the right to limit some but not all sharing. Federal law also requires us |
| | to tell you how we collect, share, and protect your personal information. Please read this |
| | notice carefully to understand what we do. | |
| What? | The types of personal information we collect and share depend on the product or service |
| | you have with us. This information can include: | |
| | • Social Security number and | |
| | • Account balances and | |
| | • Transaction history and | |
| | • Purchase history and | |
| | • Assets | |
| | When you are no longer our customer, we continue to share your information as |
| | described in this notice. | |
| How? | All financial companies need to share personal information to run their everyday business. |
| | In the section below, we list the reasons financial companies can share personal |
| | information; the reasons Alger chooses to share; and whether you can limit this sharing. |
| | | |
| Reasons we can share your | Does | Can you limit |
| personal information | Alger share? | this sharing? |
| For our everyday business | Yes | No |
| purposes — such as to process your | | |
| transactions, maintain your account(s), | | |
| respond to court orders and legal | | |
| investigations, or report to credit bureaus | | |
| For our marketing purposes — | Yes | No |
| to offer our products and services to you | | |
| For joint marketing with other | No | We don’t share |
| financial companies | | |
| For our affiliates’ everyday | Yes | No |
| business purposes — information about | | |
| your transactions and experiences | | |
| For our affiliates’ everyday | No | We don’t share |
| business purposes — information about | | |
| your creditworthiness | | |
| For nonaffiliates to market to you | No | We don’t share |
| Questions ? Call 1-800-342-2186 | | |
- 53 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
| | |
| Who we are | |
| Who is providing this notice? | Alger includes Fred Alger Management, Inc. and Fred |
| | Alger & Company, Incorporated as well as the following |
| | funds: The Alger Funds, The Alger Funds II, The Alger |
| | Institutional Funds, The Alger Portfolios, and Alger |
| | Global Growth Fund. |
| |
| What we do | |
| How does Alger | To protect your personal information from unauthorized |
| protect my personal | access and use, we use security measures that comply |
| information? | with federal law. These measures include computer |
| | safeguards and secured files and buildings. |
| How does Alger | We collect your personal information, for example, |
| collect my personal | when you: |
| information? | • Open an account or |
| | • Make deposits or withdrawals from your account or |
| | • Give us your contact information or |
| | • Provide account information or |
| | • Pay us by check. |
| Why can’t I limit all sharing? | Federal law gives you the right to limit only |
| | • sharing for affiliates’ everyday business purposes |
| | information about your credit worthiness |
| | • affiliates from using your information to market to you |
| | • sharing for nonaffiliates to market to you |
| | State laws and individual companies may give you |
| | additional rights to limit sharing. |
| | |
| Definitions | |
| Affiliates | Companies related by common ownership or control. |
| | They can be financial and nonfinancial companies. |
| | • Our affiliates include Fred Alger Management, Inc. |
| | and Fred Alger & Company, Incorporated as well as the |
| | following funds: The Alger Funds, The Alger Funds II, |
| | The Alger Institutional Funds, The Alger Portfolios, and |
| | Alger Global Growth Fund. |
| Nonaffiliates | Companies not related by common ownership or |
| | control. They can be financial and nonfinancial |
| | companies |
| Joint marketing | A formal agreement between nonaffiliated financial |
| | companies that together market financial products or |
| | services to you. |
| Other important information | |
- 54 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
Proxy Voting Policies
A description of the policies and procedures the Trust uses to determine how to vote
proxies relating to portfolio securities and information regarding how the Fund voted
proxies relating to portfolio securities during the most recent 12-month period ended June
30 are available, without charge, by calling (800) 992-3863 or online on the Funds’ website
at www.alger.com or on the SEC’s website at www.sec.gov.
Fund Holdings
The Board of Trustees 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 in regulatory filings on Form N-Q.
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. The Fund’s Forms N-Q are available online on the SEC’s website at www.
sec.gov or may be reviewed and copied at the SEC’s Public Reference Room in Washington,
D.C. Information regarding the operation of the SEC’s Public Reference Room may be
obtained by calling 1-800-SEC-0330.
In addition, the Fund makes publicly available its respective month-end top 10 holdings
with a 10 day lag and their month-end full portfolios with a 60 day lag on their website www.
alger.com and through other marketing communications (including printed advertising/
sales literature and/or shareholder telephone customer service centers). No compensation
or other consideration is received for the non-public disclosure of portfolio holdings
information.
In accordance with the foregoing, the Fund provides portfolio holdings information to
service providers who provide necessary or beneficial services when such service providers
need access to this information in the performance of their services and are subject to
duties of confidentiality (1) imposed by law, including a duty not to trade on non-public
information, and/or (2) pursuant to an agreement that confidential information is not to
be disclosed or used (including trading on such information) other than as required by law.
From time to time, the Fund will communicate with these service providers to confirm
that they understand the Fund’s policies and procedures regarding such disclosure. This
- 55 -
ALGER GLOBAL GROWTH FUND
ADDITIONAL INFORMATION (Unaudited) (Continued)
agreement must be approved by the Fund’s Chief Compliance Officer, President, Secretary
or Assistant Secretary.
The Board of Trustees 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 provides to shareholders, the Manager may,
upon request, make additional statistical information available regarding the Fund. Such
information will include, but not be limited to, relative weightings and characteristics of
the Fund’s portfolio versus its peers or an index (such as P/E ratio, alpha, beta, capture
ratio, maximum drawdown, standard deviation, EPS forecasts, Sharpe ratio, information
ratio, R-squared, and market cap analysis), security specific impact on overall portfolio
performance month-end top ten contributors to and detractors from performance,
breakdown of High Unit Volume Growth holdings vs. Positive Lifecycle Change holdings,
portfolio turnover, and requests of a similar nature. Please contact the Fund at (800) 992-
3863 to obtain such information.
- 56 -
ALGER GLOBAL GROWTH FUND
360 Park Avenue South
New York, NY 10010
(800) 992-3863
www.alger.com
Investment Manager
Fred Alger Management, Inc.
360 Park Avenue South
New York, NY 10010
Distributor
Fred Alger & Company, Incorporated
360 Park Avenue South
New York, NY 10010
Transfer Agent and Dividend Disbursing Agent
Boston Financial Data Services, Inc.
P.O. Box 8480
Boston, MA 02266
Custodian
Brown Brothers Harriman & Company
50 Post Office Square
Boston, MA 02110
This report is submitted for the general information of the shareholders of Alger
Global Growth Fund. It is not authorized for distribution to prospective investors
unless accompanied by an effective prospectus for the Fund, which contains information
concerning the Fund’s investment policies, fees and expenses as well as other pertinent
information.
- 57 -
(This page has been intentionally left blank.)
(This page has been intentionally left blank.)
(This page has been intentionally left blank.)
(This page has been intentionally left blank.)
ITEM 2. CODE OF ETHICS.
(a) The Registrant has adopted a code of ethics (the "Code of Ethics") that applies to its
principal executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions.
(b) Not applicable.
(c) The Registrant has not amended its Code of Ethics during the period covered by the
shareholder report presented in Item 1 hereto.
(d) The Registrant has not granted a waiver or an implicit waiver from a provision of its
Code of Ethics during the period covered by the shareholder report presented in Item 1
hereto.
(e) Not applicable.
(f) The Registrant's Code of Ethics is attached as an Exhibit hereto.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the Registrant determined that Stephen E. O’Neil is an audit committee
financial expert (within the meaning of that phrase specified in the instructions to Form N-CSR)
on the Registrant’s audit committee. Mr. O’Neil is an “independent” trustee – i.e., he is not an
interested person of the Registrant as defined in the Investment Company Act of 1940, nor has
he accepted directly or indirectly any consulting, advisory or other compensatory fee from the
Registrant, other than in his capacity as Trustee.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
| | | |
| a) Audit Fees: | | |
| October 31, 2017 | $ | 37,200 |
| October 31, 2016 | $ | 36,500 |
b) Audit-Related Fees: NONE
c) Tax Fees for tax advice, tax compliance and tax planning:
| | | |
| October 31, 2017 | $ | 9,900 |
| October 31, 2016 | $ | 5,100 |
| |
| d) All Other Fees: | | |
| October 31, 2017 | $ | 11,852 |
| October 31, 2016 | $ | 7,020 |
Other fees include a review and consent for Registrants registration statement filing and
a review of the semi-annual financial statements.
e) 1) Audit Committee Pre-Approval Policies And Procedures:
Audit and non-audit services provided by the Registrant’s independent registered public
accounting firm (the “Auditors”) on behalf the Registrant must be pre-approved by the
Audit Committee. Non-audit services provided by the Auditors on behalf of the
Registrant’s Investment Adviser or any entity controlling, controlled by, or under
common control with the Investment Adviser must be pre-approved by the Audit
Committee if such non-audit services directly relate to the operations or financial
reporting of the Registrant.
2) All fees in item 4(b) through 4(d) above were approved by the Registrants’ Audit
Committee.
f) Not Applicable
g) Non-Audit Fees:
| | | | |
| October 31, 2017 | $ | 224,414 , €94,197 |
| October 31, 2016 | $ | 219,975 , €93,631 |
h) The audit committee of the board of trustees has considered whether the provision of the
non-audit services that were rendered to the registrant's investment adviser and any entity
controlling, controlled by, or under common control, with the adviser that provides ongoing
services to the registrant that were not approved pursuant to (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principle accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. INVESTMENTS.
Not applicable
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT
INVESTMENT COMPANIES.
Not applicable
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY
AND AFFILIATED PURCHASERS.
Not applicable
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Registrant’s principal executive officer and principal financial officer have concluded
that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under
the Investment Company Act of 1940, as amended) are effective based on their evaluation
of the disclosure controls and procedures as of a date within 90 days of the filing date of
this document.
(b) No changes in the Registrant’s internal control over financial reporting occurred during
the Registrant’s second fiscal half-year that materially affected, or are reasonably likely to
materially affect, the Registrant’s internal control over financial reporting.
ITEM 12. EXHIBITS.
(a) (1) Code of Ethics as Exhibit 99.CODE ETH
(a) (2) Certifications of principal executive officer and principal financial officer as required by
rule 30a-2(a) under the Investment Company Act of 1940 are attached as Exhibit 99.CERT
(b) Certifications of principal executive officer and principal financial officer as required by rule
30a-2(b) under the Investment Company Act of 1940 are attached as Exhibit 99.906CERT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Alger Global Growth Fund
By: /s/Hal Liebes
Hal Liebes
President
Date: December 11, 2017
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
By: /s/Hal Liebes
Hal Liebes
President
Date: December 11, 2017
By: /s/Michael D. Martins
Michael D. Martins
Treasurer
Date: December 11, 2017
