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FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-07986 |
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The Alger Institutional Funds |
(Exact name of registrant as specified in charter) |
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360 Park Avenue South New York, New York | | 10010 |
(Address of principal executive offices) | | (Zip code) |
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Mr. Hal Liebes Fred Alger Management, Inc. 360 Park Avenue South New York, New York 10010 |
(Name and address of agent for service) |
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Registrant’s telephone number, including area code: | 212-806-8800 | |
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Date of fiscal year end: | October 31 | |
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Date of reporting period: | April 30, 2013 | |
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ITEM 1. REPORT(S) TO STOCKHOLDERS.
| The Alger Institutional Funds SEMI-ANNUAL REPORT April 30, 2013 (Unaudited) | |
Table of Contents
THE ALGER INSTITUTIONAL FUNDS
Shareholders’ Letter | 1 |
Fund Highlights | 11 |
Portfolio Summary | 15 |
Schedules of Investments | 16 |
Statements of Assets and Liabilities | 38 |
Statements of Operations | 42 |
Statements of Changes in Net Assets | 44 |
Financial Highlights | 46 |
Notes to Financial Statements | 56 |
Additional Information | 72 |
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Shareholders’ Letter | May 20, 2013 |
Dear Shareholders,
Investing with Markets at Record High Levels
Equity markets have strong potential for generating attractive returns
As the S&P 500 Index climbed to record levels during the six-month period ended April 30, 2013, some investors grew convinced that a painful correction or bear market was unavoidable. After all, record high index levels in 2000 and 2007 were promptly followed by substantial bear markets and in recent years markets have often suffered from spring corrections. Yet after reaching an all time high level of 1579.58 on April 23, the S&P 500 continued to advance and closed the reporting period at 1593.58, which represented a 14.44% return for the period. While markets certainly don’t go up in a constant line, we see strong reasons and fundamental support for our view that, today, economic conditions, corporate fundamentals, and investor psychology can drive market performance upward in the near term and over the next few years.
Market Overview
During the six-month reporting period, concerns over U.S. fiscal policy, sluggish economic growth, and the euro-zone debt crisis continued to weigh upon investors. In November and December, cynicism over Beltway gridlock continued to grow as Congress and the White House failed to avert the “fiscal cliff,” or the combination of sequestration, or spending cuts, and tax hikes that many investors fear could dampen already modest economic growth. In late November, however, Federal Reserve Chairman Ben Bernanke said Fed policy will remain accommodative until the U.S. economy becomes more stable, which ignited a three-week rally. Nevertheless, market volatility and euro-zone fears resurfaced after the Republic of Cyprus said it would impose a levy on bank deposits to qualify for bailout funds. Italy’s long struggle with forming a coalition government also provoked investor angst. As has often been the case in recent years, investor skepticism about the U.S. economy and its recovery remained very high and very wrong until recently moderating. Despite weaknesses in some broad economic gauges—GDP growth fell to only 0.4% for the fourth quarter—many indicators suggest to us that the U.S. economy is outperforming its global peers. The real estate market continues to strengthen, and recently consumer sentiment, and thus consumer spending, has begun to reflect the impact of improving home values on personal wealth. Similarly, in February, unemployment dropped to 7.7%—the lowest level since December of 2008—and we see further improvement in the coming months. We’ve noted in a number of prior shareholder letters that the unemployment numbers are deceptive. The unemployment rate for college graduates, for example, is below 4.5%, which illustrates that this category of workers has been experiencing a substantially better job market than non-graduates.
Addressing Market Fears
Economic factors and corporate fundamentals during the five-year periods leading to the 2000 and 2007 market peaks were substantially different than the drivers behind the current bull market. Thus, while normal corrections to this current bull market should and will occur, we believe markets are firmly in an upward trend and that corrections will be attractive buying opportunities. Near term corrections, in our view, are likely to be shallow, unlike the severe volatility of recent years and the bear markets following 2000
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and 2007. The last two market cycles, unlike the current bull market, occurred during long periods of substantial economic growth in which retail investors were highly enthusiastic about equities. In comparison, the current bull market is being driven, in our opinion, primarily by corporate fundamentals as economic growth has been weak while risk-averse retail investors have been fleeing stocks for the better part of five years.
Understanding the 2000 Market Peak
During the dot-com era, which ran from 1995 to 2000, information technology, including desktop computers, Microsoft business applications, and the Internet, pushed GDP growth up 34.0%. Within that period, the seasonally adjusted unemployment rate dropped from 5.8% to 4.0% from April 1995 to the March 2000 market peak. Optimism among consumers, corporations, and retail investors surged, thanks to strong equity market gains and home values increasing 33% during the five-year period, according to the S&P/Case-Shiller Home Price Index 10-City Composite.
From 1995 to 2000, Corporate America increased capital expenditures from 8.2% of GDP to 9.5%. By late 2000, the rate reached 9.6%, which is a level that has yet to be repeated. Spending on non-residential real estate also surged, increasing from an annualized rate of $186 billion in the first quarter of 1996 to $260 billion in the first quarter of 2000, according to J.P. Morgan. Retail investors weren’t immune from the prevalent optimism. During the five-year period, they plowed $795.1 billion into Sector Stock and U.S. Stock Morningstar fund categories. By the 2000 market peak, the two categories collectively represented 50% of retail investor assets in mutual funds. Yet, corporate fundamentals, including cash flow, weakened(1). During the dot-com era, the free cash flow yield for large cap corporations declined from 3.40% to only 1.46%, according to Empirical Research Partners. U.S. public companies’ cash and short-term investments as a share of market capitalization also deteriorated, falling from nearly 10.15% in 1995 to 6.93% in 2000 and the S&P 500 price-to-earnings ratio soared from 15.60 to 27.20. Investors’ eventual realization that corporate cash flow was weak, that many dot-com companies were burning through capital at an unsustainable rate, and that economic expansion wasn’t sustainable eventually led to the market decline in 2000.
Understanding the 2007 Market Peak
During the five years leading to October of 2007, GDP surged upward 31.0%, while unemployment dropped considerably from 6.3% in June of 2003 to 4.7% by the end of the period. Much like during the dot-com era, consumer wealth and consumer spending benefited from the raging bull market and from home values increasing approximately 45%, according to the S&P/Case-Shiller Home Price Index 20-City Composite. During four consecutive years starting in 2003, annual wealth creation ranged from $5.1 trillion to $2.5 trillion, according to J.P. Morgan estimates. In the business world, optimism was strong and corporations increased capital expenditures as a percentage of GDP from 7.5% in early 2004 to 7.9% in 2007. Spending on non-residential real estate during the
(1) Free cash flow is cash generated from a company’s operations that remains after capital expenditures and operating expenses. It allows companies to invest for future growth, pay dividends, and conduct share repurchases. Free cash flow, furthermore, indicates that corporations are disciplined with costs and are maintaining revenues. It is typically measured by free cash flow yield, which is the ratio of free cash flow to enterprise value.
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five-year period increased from $258 billion to $331 billion. At the same time, retail investors plowed $906.5 billion into Sector Stock and U.S. Stock funds, with the two categories representing 41.0% of mutual fund assets when the equity market peaked. Yet, much like during the earlier bull market, corporate fundamentals weakened. Cash and short-term investments as a share of market capitalization dropped from 10.04% to 8.72% from July 2005 to the market peak and cash flow yields fell from 5.01% in February of 2003 to 4.35% in October of 2007. Weakening corporate fundamentals, an infamous decline in real estate prices, mortgage defaults, and the maturing of the economic recovery eventually led to the post-2007 bear market.
Why 2013 is Different from Past Market Cycles
Unlike the past two bull markets, recent market gains, we maintain, have been driven primarily by strong corporate fundamentals, with cash rich businesses offering attractive free cash flow yields, engaging in stock buybacks, and implementing or increasing dividends. Yet, economic growth, in our view, has been sluggish and is far from reaching a mature phase, but it has strong potential to accelerate. During the subprime mortgage recession, unemployment soared to 10.0% by October of 2009. Even though it declined to 7.6% recently, it is still substantially higher than levels in 2000 and 2007. GDP growth of only 9.7% during the five-year period ended December 31, 2012, is also disappointing. Corporations, therefore, have been reluctant to increase spending, with capital expenditures as a percentage of GDP expanding from a low of 6.4% at the end of 2009 to only 7.5% at the end of 2012, which is well below long-term averages for economic recoveries. Also during the most recent recession, non-residential real estate spending fell to $252 billion on an annualized basis by the third quarter of 2010 and has since only increased to $316 billion, which like capital expenditures, is considerably below levels experienced during other economic recoveries. The low level of non-residential expenditures implies that businesses may be far from reaching a peak in real estate expenditures. Consumers have also been tight with their purse strings, especially with durable goods, as illustrated by the average automobile age of 10.8 years at the end of 2012, which is substantially higher than 9.8 years in 2007 and 8.9 years in 2000.
Clearly, much capacity exists for GDP expansion, job creation, and other developments that will provide attractive opportunities for leading companies to grow earnings and support equity prices. Economic growth, we believe, is likely to be supported by corporations’ growing need for capital investments, consumers’ increasing spending power, demand for durable goods, and a strong residential real estate recovery. During the recession following the 2007 market decline, many consumers felt insecure about the economy and until recently, the inconsistent nature of the aggregate wealth effect, or wealth created from home ownership and the stock market, hasn’t helped. It has bolstered consumers’ finances in only three of the last six years—2009, 2010, and 2012, according to J.P. Morgan. Last year, however, it contributed more than $4.4 trillion to individuals’ balance sheets. This was the highest level since 2004 and is helping consumers feel more confident in their finances and more willing to buy big ticket items. Like consumer spending, the creation of an estimated 2 million households has been delayed by economic uncertainty, creating pent up housing demand. With an improving economy, however, annual household creation of 1 million to 1.6 million could occur over the next four years, according to estimates from Zelman & Associates.
With annual housing starts of 780,000 units, or half the long-term average, housing inventory could trail demand. Favorable interest rates, historically high levels of home
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affordability, and increasing rental fees, meanwhile, are further enhancing the appeal of homeownership and supporting the ongoing real estate recovery, with home prices jumping 9.3% year-over-year in February, according to the S&P/Case-Shiller Home Price Index 20-City Composite. As real estate prices, sales, and demand increase, new housing starts may accelerate, creating construction jobs, as well as demand for home appliances and other durable goods. With the industry having the nation’s highest unemployment rate of 14.7%, which represents 1.2 million out-of-work individuals, job creation for construction workers could be a big boost to the economy.
With the prolonged trough in capital expenditures, cash-rich corporations, meanwhile, may be ready to increase outlays for manufacturing equipment and other tools needed to run their businesses. With corporations having record levels of cash on their balance sheets, an increase in capital expenditures could be substantial and highly supportive of the nation’s ongoing economic recovery.
Market Fundamentals and Investor Psychology
We are also encouraged by the strength of corporate America. The 5.16% free cash flow yield of large companies in April of this year, for example, was considerably higher than in 2000 and 2007 and illustrates that corporate fundamentals are extremely strong. Corporate balance sheets are also attractive, with cash in February of 2013 representing approximately 10.70% of corporate assets. At the same time, equities are attractively valued from a price-to-book perspective (the stock market’s price divided by book value). As of April of this year, large capitalization stocks had a price-to-book ratio of only 2.37, which is lower than 2.96 in October of 2007 and 5.14 in March of 2000, according to Empirical Research. Despite the strong performance of U.S. stocks since the Financial Crisis, valuations remain reasonable. The S&P 500, with a P/E ratio of 14.5 and a dividend yield of over 2%, remains attractive on two scores—a P/E ratio below the historical average and a dividend yield above 10-year Treasuries.
The current market rally has also occurred despite retail investors redeeming $358.5 billion from Sector Stock and U.S. Stock fund categories during the past five years. The two fund categories recently represented only 34.0% of retail investor assets in U.S. mutual funds, while taxable bonds represented 20.8%. In dollar figures, retail investors had nearly $2.6 trillion allocated to taxable bonds in April, compared to $1.1 trillion in 2007 and $505 billion in 2000.
Investors, however, may be ready to return to equities—recent record high market levels will cause some investors to realize that market declines are usually temporary and that investors who have held on to stock investments have recouped losses that resulted from the post-2007 market decline. Historically low interest rates, meanwhile, are making the recent returns of equities appear even more appealing relative to fixed income assets. With record levels of assets currently allocated to bonds, investors’ potential rotation into equities could provide substantial upside to the market. We are not alone in our belief that equities have potential for additional gains. Celebrated investor Warren Buffett, for example, is encouraging investors to rethink their aversion to equities, having recently said that “bonds are a terrible investment now” and that stock prices “aren’t ridiculously high.”
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Going Forward
The anticipated economic growth discussed above is likely to create increased competition among corporations at a time when technology and other global trends are requiring companies to constantly rethink and retool business strategies. With that in mind, equity investors, in our view, need to diligently seek out companies that are best prepared to benefit from the constant and swift changes being driven by technology, demographics, regulations, emerging market growth, and other large scale trends. We believe, furthermore, that our research-driven investment strategy is highly appropriate for these challenging times of constant and large scale change.
Portfolio Matters
Alger Capital Appreciation Institutional Fund
The Alger Capital Appreciation Institutional Fund returned 11.82% for the fiscal six-month period ended April 30, 2013, compared to the Russell 1000 Growth Index return of 13.70%.
During the period, the largest sector weightings were Information Technology and Consumer Discretionary. The largest sector overweight was Financials and the largest sector underweight was Consumer Staples. Relative outperformance in the Financials and Materials sectors was the most important contributor to performance, while Consumer Staples and Consumer Discretionary detracted from results.
Among the most important relative contributors were CVS Caremark Corp.; Anadarko Petroleum Corp.; CBS Corp., Cl. B; Pfizer, Inc.; and HCA Holdings, Inc. Shares of pharmacy benefits manager and retail drugstore operator CVS Caremark performed strongly early in 2013 after the company said it generated strong quarterly results that were driven, in part, by the prevalence of the flu and by capturing market share from a competitor.
Conversely, detracting from relative performance were Microsoft Corp.; Home Depot, Inc., /The; Amgen, Inc.; Coca-Cola Co./The, and Verizon Communications, Inc. Stock of telecommunications firm Verizon performed poorly after the company said earnings per share fell short of expectations. Investors may have also grown concerned over margins for the company’s wireless business.
Alger Capital Appreciation Focus Fund
The Alger Capital Appreciation Focus Fund returned 10.00% for the fiscal six-month period ended April 30, 2013, compared to the 13.70% return of the Russell 1000 Growth Index.
Prior to December 31, 2012, the Alger Capital Appreciation Focus Fund followed different investment strategies under the name “Alger Large Cap Growth Institutional Fund” and was managed by different portfolio managers. Performance prior to December 31, 2012, reflects those management styles and does not reflect the current investment personnel and strategies of the Fund.
From December 31, 2012, until April 30, 2013, the largest sector weightings were Information Technology and Consumer Discretionary. The largest sector overweight was Financials and the largest sector underweight was Consumer Staples. Relative outperformance in the Financials and Industrials sectors was the most important contributor to performance, while Consumer Staples and Health Care detracted from results.
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Among the most important relative contributors were CVS Caremark Corp.; HCA Holdings, Inc.; Chicago Bridge & Iron Company, NV; Honeywell International, Inc.; and Citigroup, Inc. HCA Holdings is the country’s largest operator of private hospitals. HCA shares performed strongly as investors anticipated that the Affordable Health Care Act, or “Obama Care,” would improve the company’s operating fundamentals. For example, an increased number of individuals covered by medical insurance may increase hospital admissions, help reduce hospital debt, and increase profits.
Conversely, detracting from relative performance were PepsiCo, Inc.; Time Warner Cable, Inc.; Comcast Corporation, Cl. A.; Terex Corp; and Valero Energy Corp. Time Warner Cable is one of the largest providers of video, high-speed data, and voice services in the U.S. Higher-than-anticipated programming costs, pension expenses, and taxes hurt the company’s free cash generation, which caused Time Warner share performance to suffer. Investors may have become concerned that the decline in cash flow may cause the company to curtail its share buyback program.
Alger Mid Cap Growth Institutional Fund
The Alger Mid Cap Growth Institutional Fund returned 17.00% for the fiscal six-month period ended April 30, 2013, compared to the Russell Midcap Growth Index, which had a return of 17.74%.
During the period, the largest sector weightings were Consumer Discretionary and Information Technology. The largest sector overweight was Information Technology and the largest sector underweight was Consumer Discretionary. Relative outperformance in the Information Technology and Materials sectors was the most important contributor to performance, while Consumer Discretionary and Consumer Staples detracted from results.
Among the most important relative contributors were Fifth & Pacific Cos., Inc.; CBS Corp., Cl. B; Tenet Healthcare Corporation; Rockwood Holdings, Inc.; and LinkedIn Corp. Fifth & Pacific is a global manufacturer and retailer of clothing and accessories and offers brands such as Juicy Couture, Lucky Brands, Kate Spade, and Jack Spade. Speculation by analysts and the news media that the company may divest Lucky Brands and Juicy Couture supported the performance of Fifth & Pacific stock during the first quarter of 2013.
Conversely, detracting from relative performance were Regeneron Pharmaceuticals, Inc; Fresh Market, Inc., /The; Liberty Global, Inc., Cl. A; Ross Stores, Inc.; and Kansas City Southern. Fresh Market is a high-end, high-growth specialty food retailer with 127 stores in 23 states primarily in Mid-Atlantic States and in the Southeast and Midwest. The company experienced a significant slowdown in traffic and sales during December’s holiday season and management wasn’t able to clearly identify the reasons for the shift.
During the six-month reporting period, the Fund used options to hedge risk and to generate incremental income within the portfolio. The net results of the various option positions had a positive impact on performance.
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Alger Small Cap Growth Institutional Fund
For the fiscal six-month period ended April 30, 2013, the Alger Small Cap Growth Institutional Fund returned 13.86%, compared to the 16.59% return of the Russell 2000 Growth Index.
During the period, the largest sector weightings were Information Technology and Health Care sectors. The largest sector overweight was Information Technology and the largest sector underweight was Industrials. Relative outperformance in the Materials and Consumer Discretionary sectors was the most important contributor to performance, while Energy and Consumer Staples detracted from results.
Among the most important relative contributors were Fifth & Pacific Cos., Inc.; Tenet Healthcare Corporation; Silicon Graphics International Corp.; WisdomTree Investments, Inc.; and Freescale Semiconductor Holdings, Ltd. During the reporting period, Fifth & Pacific stock performed strongly due to reasons identified in the Alger Mid Cap Growth Institutional Fund discussion.
Conversely, detracting from overall results on a relative basis were Allot Communications Ltd.; Energy XXI (Bermuda) Ltd.; Fresh Market, Inc., /The; Children’s Place Retail Stores, Inc., /The; and Volcano Corp. Allot Communications provides equipment that identifies and inspects data traveling across networks, which allows Internet service providers to prioritize data transmissions. Allot stock performance weakened after a major sell-side firm lowered its earnings outlook for the company based on anticipation of slowing top-line demand for the company’s products in the U.S. and Europe.
As always, we strive to deliver consistently superior investment results for you, our shareholders, and we thank you for your business and your continued confidence in Alger.
Respectfully submitted,
Daniel C Chung, CFA
Chief Investment Officer
Morningstar, Inc. conducts investment research and provides performance analysis of mutual funds and other investment products.
J.P. Morgan is a broker-dealer that provides investment research.
Zelman & Associates provides research for leading institutional investors on a variety of asset classes and sectors.
Empirical Research Partners is a broker-dealer that provides research on a wide range of topics to institutional investors.
As of April 30, 2013, the following companies represented the stated percentages of Fred Alger Management assets under management: J.P. Morgan, 0.11%; Microsoft, 0.48%; Morningstar, Inc., 0.00%; Zelman & Associates, 0.00%; and Empirical Research Partners, 0.00%.
Investors cannot invest directly in an index. Index performance does not reflect deductions for fees, expenses or taxes.
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This report and the financial statements contained herein are submitted for the general information of shareholders of the Funds. This report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus for the Funds. Fund returns represent the fiscal six-month period return of Class I shares.
The performance data quoted represents 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 a Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For performance data current to the most recent month-end, visit us at www.alger.com, or call us at (800) 992-3863.
The views and opinions of the Funds’ management in this report are as of the date of the Shareholders’ letter and are subject to change at any time subsequent to this date. There is no guarantee that any of the assumptions that formed the basis for the opinions stated herein are accurate or that they will materialize. Moreover, the information forming the basis for such assumptions is from sources believed to be reliable; however, there is no guarantee that such information is accurate. Any securities mentioned, whether owned in a Fund or otherwise, are considered in the context of the construction of an overall portfolio of securities and therefore reference to them should not be construed as a recommendation or offer to purchase or sell any such security. Inclusion of such securities in a Fund and transactions in such securities, if any, may be for a variety of reasons, including without limitation, in response to cash flows, inclusion in a benchmark, and risk control. The reference to a specific security should also be understood in such context and not viewed as a statement that the security is a significant holding in a Fund. Please refer to the Schedules of Investments for each Fund that is included in this report for a complete list of Fund holdings as of April 30, 2013. Securities mentioned in the Shareholders’ letter, if not found in the Schedule of Investments, may have been held by the Funds during the six-month fiscal period.
A Word About Risk
Investing in the stock market involves gains and losses and may not be suitable for all investors. 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. Stocks of small- and mid-sized companies are subject to greater risk than stocks of larger, more established companies owing to such factors as limited liquidity, inexperienced management, and limited financial resources. Funds that participate in leveraging, such as the Capital Appreciation Institutional Fund, are subject to the risk that borrowing money to leverage will exceed the returns for securities purchased or that the securities purchased may actually go down in value; thus, the Funds’ net asset values can decrease more quickly than if the Funds had not borrowed.
A small investment in derivatives could have a potentially large impact on a Fund’s performance. When purchasing options, the Fund bears the risk that if the market value
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of the underlying security does not move to a level that would make exercise of the option profitable, the option will expire unexercised. When a call option written by a Fund is exercised, the Fund will not participate in any increase in the underlying security’s value above the exercise price. When a put option written by a Fund is exercised, the Fund will be required to purchase the underlying security at a price in excess of its market value. Use of options on securities indexes is subject to the risk that trading in the options may be interrupted if trading in certain securities included in the index is interrupted, the risk that price movements in the Fund’s portfolio securities may not correlate precisely with movements in the level of an index, and the risk that Fred Alger Management, Inc. may not predict correctly movements in the direction of a particular market or of the stock market generally. Because certain options may require settlement in cash, a Fund may be forced to liquidate portfolio securities to meet settlement obligations. Forward currency contracts are subject to currency exchange rate risks, the risk of non-performance by the contract counterparty, and the risk that Fred Alger Management, Inc. may not predict accurately future foreign exchange rates. For a more detailed discussion of the risks associated with these Funds, please see the Funds’ prospectus.
Before investing, carefully consider a Fund’s investment objective, risks, charges, and expenses. For a prospectus or a summary prospectus containing this and other information about The Alger Institutional Funds 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.
Index Definitions:
· | The S&P/Case-Shiller Home Price Index is an index of housing prices in the U.S. |
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· | The Russell 1000 Growth Index is an unmanaged index designed to measure the performance of the largest 1,000 companies in the Russell 3000 Index with higher price-to-book ratios and higher forecasted growth values. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on the total market capitalization, which represents 98% of the U.S. equity market. |
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· | The Russell Midcap Growth Index measures the performance of the mid-cap growth segment of the U.S. equity universe. It includes those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. |
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· | The Russell 2000 Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. |
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· | The S&P 500 Index is an unmanaged index generally representative of the U.S. stock market without regard to company size. |
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FUND PERFORMANCE AS OF 3/31/13 (Unaudited)
AVERAGE ANNUAL TOTAL RETURNS
| | 1 YEAR | | 5 YEARS | | 10 YEARS | |
Alger Capital Appreciation Class I (Inception 11/8/93) | | 10.54 | % | 7.38 | % | 11.76 | % |
Alger Capital Appreciation Class R* (Inception 1/27/03) | | 9.98 | % | 6.83 | % | 11.20 | % |
Alger Capital Appreciation Focus Class A (Inception 12/31/12)** | | n/a | | n/a | | n/a | |
Alger Capital Appreciation Focus Class C (Inception 12/31/12)** | | n/a | | n/a | | n/a | |
Alger Capital Appreciation Focus Class I (Inception 11/8/93) | | 3.63 | % | 2.78 | % | 6.89 | % |
Alger Capital Appreciation Focus Class R* (Inception 1/27/03) | | 2.62 | % | 2.08 | % | 6.26 | % |
Alger Capital Appreciation Focus Class Z (Inception 12/31/12)** | | n/a | | n/a | | n/a | |
Alger Mid Cap Growth Class I (Inception 11/8/93) | | 13.90 | % | 1.81 | % | 8.77 | % |
Alger Mid Cap Growth Class R* (Inception 1/27/03) | | 13.38 | % | 1.30 | % | 8.24 | % |
Alger Small Cap Growth Class I (Inception 11/8/93) | | 11.54 | % | 7.46 | % | 12.15 | % |
Alger Small Cap Growth Class R* (Inception 1/27/03) | | 11.01 | % | 6.95 | % | 11.62 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains.
* | Performance figures prior to 1/27/03, inception of Class R shares, are those of the Fund’s Class I Shares. The performance figures prior to 1/27/03 have been adjusted to reflect the higher operating expenses of Class R shares. |
** | Class A, Class C and Class Z performance since 12/31/12, inception date of the classes, was 3.03%, 7.50% and 8.84%, respectively. Returns reflect maximum sales charge on Class A shares and applicable contingent deferred sales charge on Class C shares. |
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ALGER CAPITAL APPRECIATION INSTITUTIONAL FUND
Fund Highlights Through April 30, 2013 (Unaudited)
The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Capital Appreciation Institutional Fund Class I shares, the Russell 1000 Growth Index (an unmanaged index of common stocks) and the Russell 3000 Growth Index (an unmanaged index of common stocks) for the ten years ended April 30, 2013. Figures for the Alger Capital Appreciation Institutional Fund Class I shares, the Russell 1000 Growth Index and the Russell 3000 Growth Index include reinvestment of dividends. Performance for the Alger Capital Appreciation Institutional Fund Class R shares may vary from the results shown above due to differences in expenses the class bears. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.
PERFORMANCE COMPARISON AS OF 4/30/13
AVERAGE ANNUAL TOTAL RETURNS
| | 1 YEAR | | 5 YEARS | | 10 YEARS | | Since
11/8/1993 | |
Class I (Inception 11/8/93) | | 11.87 | % | 6.16 | % | 10.97 | % | 11.41 | % |
Class R* (Inception 1/27/03) | | 11.33 | % | 5.62 | % | 10.42 | % | 10.85 | % |
Russell 1000 Growth Index | | 12.60 | % | 6.66 | % | 8.08 | % | 7.91 | % |
Russell 3000 Growth Index | | 12.83 | % | 6.75 | % | 8.26 | % | 7.65 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. The 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.
* | Performance figures prior to 1/27/03, inception of Class R shares, are those of the Fund’s Class I Shares. The performance figures prior to 1/27/03 have been adjusted to reflect the higher operating expenses of Class R shares. |
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ALGER CAPITAL APPRECIATION FOCUS FUND
Fund Highlights Through April 30, 2013 (Unaudited)
The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Capital Appreciation Focus Fund Class I shares and the Russell 1000 Growth Index (an unmanaged index of common stocks) for the ten years ended April 30, 2013. The figures for the Alger Capital Appreciation Focus Fund Class I shares and the Russell 1000 Growth Index include reinvestment of dividends. Performance for the Alger Capital Appreciation Focus Fund Class A, C, R and Z shares may vary from the results shown above due to differences in expenses the class bears. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.
PERFORMANCE COMPARISON AS OF 4/30/13
AVERAGE ANNUAL TOTAL RETURNS
| | 1 YEAR | | 5 YEARS | | 10 YEARS | | Since
11/8/1993 | |
Class A (Inception 12/31/12)† | | n/a | | n/a | | n/a | | n/a | ** |
Class C (Inception 12/31/12)†† | | n/a | | n/a | | n/a | | n/a | ** |
Class I (Inception 11/8/93) | | 5.13 | % | 1.65 | % | 6.03 | % | 7.29 | % |
Class R* (Inception 1/27/03) | | 3.96 | % | 0.94 | % | 5.39 | % | 6.70 | % |
Class Z (Inception 12/31/12) | | n/a | | n/a | | n/a | | n/a | ** |
Russell 1000 Growth Index | | 12.60 | % | 6.66 | % | 8.08 | % | 7.91 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. The 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 performance current to the most recent month end, visit us at www.alger.com or call us at (800) 992-3863.
* | Performance figures prior to 1/27/03, inception of Class R shares, are those of the Fund’s Class I Shares. The performance figures prior to 1/27/03 have been adjusted to reflect the higher operating expenses of Class R shares. |
** | Class A, Class C and Class Z performance since 12/31/2012, inception date of the classes, was 3.03%†, 7.44%††, and 8.84%, respectively. Russell 1000 Growth Index for the same period was 11.87%. |
† | Returns reflect the maximum initial sales charges. |
†† | Returns reflect the applicable contingent deferred sales charge. |
12
ALGER MID CAP GROWTH INSTITUTIONAL FUND
Fund Highlights Through April 30, 2013 (Unaudited)
The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Mid Cap Growth Institutional Fund Class I shares and the Russell Midcap Growth Index (an unmanaged index of common stocks) for the ten years ended April 30, 2013. Figures for the Alger Mid Cap Growth Institutional Fund Class I shares and the Russell Midcap Growth Index include reinvestment of dividends. Performance for the Alger Mid Cap Growth Institutional Fund Class R shares may vary from the results shown above due to differences in expenses the class bears. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.
PERFORMANCE COMPARISON AS OF 4/30/13
AVERAGE ANNUAL TOTAL RETURNS
| | 1 YEAR | | 5 YEARS | | 10 YEARS | | Since
11/8/1993 | |
Class I (Inception 11/8/93) | | 13.50 | % | 0.72 | % | 8.12 | % | 11.79 | % |
Class R* (Inception 1/27/03) | | 12.92 | % | 0.19 | % | 7.59 | % | 11.23 | % |
Russell Midcap Growth Index | | 14.42 | % | 6.79 | % | 10.96 | % | 8.91 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. The 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 performance current to the most recent month end, visit us at www.alger.com or call us at (800) 992-3863.
* | Performance figures prior to 1/27/03, inception of Class R shares, are those of the Fund’s Class I Shares. The performance figures prior to 1/27/03 have been adjusted to reflect the higher operating expenses of Class R shares. |
13
ALGER SMALL CAP GROWTH INSTITUTIONAL FUND
Fund Highlights Through April 30, 2013 (Unaudited)
The chart above illustrates the change in value of a hypothetical $10,000 investment made in the Alger Small Cap Growth Institutional Fund Class I shares and the Russell 2000 Growth Index (an unmanaged index of common stocks) for the ten years ended April 30, 2013. The figures for the Alger Small Cap Growth Institutional Fund Class I shares and the Russell 2000 Growth Index include reinvestment of dividends. Performance for the Alger Small Cap Growth Institutional Fund Class R shares may vary from the results shown above due to differences in expenses the class bears. Investors cannot invest directly in any index. Index performance does not reflect deduction for fees, expenses, or taxes.
PERFORMANCE COMPARISON AS OF 4/30/13
AVERAGE ANNUAL TOTAL RETURNS
| | 1 YEAR | | 5 YEARS | | 10 YEARS | | Since
11/8/1993 | |
Class I (Inception 11/8/93) | | 10.60 | % | 6.15 | % | 11.26 | % | 9.08 | % |
Class R* (Inception 1/27/03) | | 10.02 | % | 5.64 | % | 10.73 | % | 8.55 | % |
Russell 2000 Growth Index | | 15.67 | % | 7.81 | % | 10.53 | % | 6.34 | % |
The performance data quoted represents past performance, which is not an indication or a guarantee of future results. The Fund’s average annual total returns include changes in share price and reinvestment of dividends and capital gains. The 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 performance current to the most recent month end, visit us at www.alger.com or call us at (800) 992-3863.
* | Performance figures prior to 1/27/03, inception of Class R shares, are those of the Fund’s Class I Shares. The performance figures prior to 1/27/03 have been adjusted to reflect the higher operating expenses of Class R shares. |
14
PORTFOLIO SUMMARY*
April 30, 2013 (Unaudited)
SECTORS | | Alger Capital
Appreciation
Institutional Fund | | Alger Capital
Appreciation
Focus Fund | | Alger Mid Cap
Growth
Institutional Fund | | Alger Small Cap
Growth
Institutional Fund | |
Consumer Discretionary | | 19.9 | % | 25.5 | % | 25.8 | % | 18.2 | % |
Consumer Staples | | 8.9 | | 5.7 | | 4.8 | | 3.5 | |
Energy | | 4.5 | | 5.3 | | 7.4 | | 5.5 | |
Financials | | 8.2 | | 10.3 | | 6.7 | | 7.7 | |
Health Care | | 13.2 | | 10.5 | | 13.2 | | 20.3 | |
Industrials | | 10.4 | | 8.9 | | 13.6 | | 16.5 | |
Information Technology | | 29.0 | | 22.2 | | 16.7 | | 20.4 | |
Materials | | 3.4 | | 3.0 | | 7.3 | | 5.2 | |
Telecommunication Services | | 1.6 | | 1.3 | | 1.8 | | 0.9 | |
Short-Term Investments and Net Other Assets | | 0.9 | | 7.3 | | 2.7 | | 1.8 | |
| | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
* Based on net assets for each Fund.
15
THE ALGER INSTITUTIONAL FUNDS |
ALGER CAPITAL APPRECIATION INSTITUTIONAL FUND
Schedule of Investments‡ (Unaudited) April 30, 2013
| | SHARES | | VALUE | |
COMMON STOCKS—96.4% | | | | | |
ADVERTISING—1.0% | | | | | |
Focus Media Holding Ltd. # | | 238,400 | | $ | 6,501,168 | |
Lamar Advertising Co., Cl. A * | | 301,000 | | 14,092,820 | |
| | | | 20,593,988 | |
AEROSPACE & DEFENSE—2.2% | | | | | |
Boeing Co., /The | | 179,900 | | 16,444,659 | |
Honeywell International, Inc. | | 356,400 | | 26,209,656 | |
Precision Castparts Corp. | | 10,900 | | 2,085,061 | |
| | | | 44,739,376 | |
AIR FREIGHT & LOGISTICS—1.5% | | | | | |
FedEx Corp. | | 164,600 | | 15,474,046 | |
United Parcel Service, Inc., Cl. B | | 184,600 | | 15,846,064 | |
| | | | 31,320,110 | |
AIRLINES—0.6% | | | | | |
Copa Holdings SA | | 53,900 | | 6,768,762 | |
Delta Air Lines, Inc. * | | 316,400 | | 5,423,096 | |
| | | | 12,191,858 | |
APPAREL ACCESSORIES & LUXURY GOODS—1.9% | | | | | |
Fossil, Inc. * | | 78,700 | | 7,722,044 | |
Michael Kors Holdings Ltd. * | | 288,100 | | 16,404,414 | |
PVH Corp. | | 128,420 | | 14,820,952 | |
| | | | 38,947,410 | |
APPAREL RETAIL—0.7% | | | | | |
L Brands, Inc. | | 226,100 | | 11,397,701 | |
VF Corp. | | 21,600 | | 3,849,552 | |
| | | | 15,247,253 | |
APPLICATION SOFTWARE—2.0% | | | | | |
Cadence Design Systems, Inc. * | | 1,550,500 | | 21,396,900 | |
Citrix Systems, Inc. * | | 33,502 | | 2,082,819 | |
Salesforce.com, Inc. * | | 462,000 | | 18,992,820 | |
| | | | 42,472,539 | |
AUTO PARTS & EQUIPMENT—1.4% | | | | | |
Delphi Automotive PLC | | 318,002 | | 14,694,872 | |
WABCO Holdings, Inc. * | | 201,600 | | 14,561,568 | |
| | | | 29,256,440 | |
BIOTECHNOLOGY—2.9% | | | | | |
Amgen, Inc. | | 204,700 | | 21,331,787 | |
Gilead Sciences, Inc. * | | 429,800 | | 21,765,072 | |
Infinity Pharmaceuticals, Inc. * | | 76,700 | | 3,305,003 | |
Vertex Pharmaceuticals, Inc. * | | 176,800 | | 13,581,776 | |
| | | | 59,983,638 | |
BROADCASTING—1.8% | | | | | |
CBS Corp., Cl. B | | 621,840 | | 28,467,835 | |
Scripps Networks Interactive, Inc., Cl. A | | 138,585 | | 9,226,990 | |
| | | | 37,694,825 | |
| | | | | | |
16
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
CABLE & SATELLITE—1.9% | | | | | |
Comcast Corporation, Cl. A | | 669,100 | | $ | 27,633,830 | |
DISH Network Corp. | | 307,900 | | 12,066,601 | |
| | | | 39,700,431 | |
CASINOS & GAMING—1.1% | | | | | |
Las Vegas Sands Corp. | | 407,800 | | 22,938,750 | |
| | | | | |
COMMUNICATIONS EQUIPMENT—2.0% | | | | | |
Cisco Systems, Inc. | | 197,300 | | 4,127,516 | |
F5 Networks, Inc. * | | 194,600 | | 14,873,278 | |
QUALCOMM, Inc. | | 363,300 | | 22,386,546 | |
| | | | 41,387,340 | |
COMPUTER HARDWARE—5.5% | | | | | |
Apple, Inc. | | 256,500 | | 113,565,378 | |
| | | | | |
COMPUTER STORAGE & PERIPHERALS—0.8% | | | | | |
SanDisk Corp.* | | 328,500 | | 17,226,540 | |
| | | | | |
CONSTRUCTION & ENGINEERING—1.3% | | | | | |
Chicago Bridge & Iron Co., NV # | | 214,200 | | 11,521,818 | |
Quanta Services, Inc. * | | 569,900 | | 15,660,852 | |
| | | | 27,182,670 | |
CONSTRUCTION & FARM MACHINERY & HEAVY TRUCKS—0.9% | | | | | |
Caterpillar, Inc. | | 137,196 | | 11,616,385 | |
Joy Global, Inc. | | 30,500 | | 1,723,860 | |
Terex Corp. * | | 220,200 | | 6,297,720 | |
| | | | 19,637,965 | |
CONSUMER FINANCE—1.5% | | | | | |
American Express Co. | | 202,800 | | 13,873,548 | |
Capital One Financial Corp. | | 289,500 | | 16,727,310 | |
| | | | 30,600,858 | |
DATA PROCESSING & OUTSOURCED SERVICES—1.5% | | | | | |
Alliance Data Systems Corp. * | | 62,100 | | 10,666,917 | |
Blackhawk Network Holdings, Inc. * | | 54,500 | | 1,304,730 | |
EVERTEC, Inc. * | | 63,600 | | 1,275,180 | |
Mastercard, Inc., Cl. A | | 32,797 | | 18,134,445 | |
| | | | 31,381,272 | |
DISTILLERS & VINTNERS—0.7% | | | | | |
Beam, Inc. | | 210,800 | | 13,640,868 | |
| | | | | |
DIVERSIFIED CHEMICALS—0.9% | | | | | |
Eastman Chemical Co. | | 148,800 | | 9,917,520 | |
PPG Industries, Inc. | | 55,600 | | 8,180,984 | |
| | | | 18,098,504 | |
DRUG RETAIL—2.1% | | | | | |
CVS Caremark Corp. | | 747,185 | | 43,471,223 | |
| | | | | |
ELECTRICAL COMPONENTS & EQUIPMENT—0.8% | | | | | |
Eaton Corp., PLC | | 262,088 | | 16,094,824 | |
| | | | | | |
17
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
FERTILIZERS & AGRICULTURAL CHEMICALS—0.7% | | | | | |
Mosaic Co., /The | | 231,800 | | $ | 14,276,562 | |
| | | | | |
FOOTWEAR—0.2% | | | | | |
NIKE, Inc., Cl. B | | 74,500 | | 4,738,200 | |
| | | | | |
GENERAL MERCHANDISE STORES—0.5% | | | | | |
Dollar General Corp.* | | 212,945 | | 11,092,305 | |
| | | | | |
HEALTH CARE EQUIPMENT—1.0% | | | | | |
Covidien PLC | | 288,540 | | 18,420,394 | |
Insulet Corp. * | | 133,500 | | 3,369,540 | |
| | | | 21,789,934 | |
HEALTH CARE FACILITIES—1.5% | | | | | |
HCA Holdings, Inc. | | 644,100 | | 25,693,149 | |
Universal Health Services, Inc., Cl. B | | 92,810 | | 6,180,218 | |
| | | | 31,873,367 | |
HEALTH CARE SERVICES—1.7% | | | | | |
Express Scripts, Inc.* | | 590,100 | | 35,034,237 | |
| | | | | |
HOME IMPROVEMENT RETAIL—1.7% | | | | | |
Home Depot, Inc., /The | | 162,200 | | 11,897,370 | |
Lowe’s Companies, Inc. | | 604,700 | | 23,232,574 | |
| | | | 35,129,944 | |
HOTELS RESORTS & CRUISE LINES—0.6% | | | | | |
Wyndham Worldwide Corporation | | 210,900 | | 12,670,872 | |
| | | | | |
HOUSEHOLD PRODUCTS—1.2% | | | | | |
Procter & Gamble Co., /The | | 320,600 | | 24,612,462 | |
| | | | | |
HUMAN RESOURCE & EMPLOYMENT SERVICES—0.6% | | | | | |
Robert Half International, Inc. | | 380,900 | | 12,501,138 | |
| | | | | |
HYPERMARKETS & SUPER CENTERS—0.7% | | | | | |
Costco Wholesale Corp. | | 132,500 | | 14,366,975 | |
| | | | | |
INDUSTRIAL MACHINERY—0.2% | | | | | |
Ingersoll-Rand PLC | | 95,400 | | 5,132,520 | |
| | | | | |
INTEGRATED TELECOMMUNICATION SERVICES—1.1% | | | | | |
Verizon Communications, Inc. | | 432,200 | | 23,299,902 | |
| | | | | |
INTERNET RETAIL—2.1% | | | | | |
Amazon.com, Inc.* | | 175,100 | | 44,442,131 | |
| | | | | |
INTERNET SOFTWARE & SERVICES—9.6% | | | | | |
eBay, Inc. * | | 703,600 | | 36,861,604 | |
Equinix, Inc. * | | 47,800 | | 10,233,980 | |
Facebook, Inc. * | | 1,239,200 | | 34,400,192 | |
Google, Inc., Cl. A * | | 86,310 | | 71,168,637 | |
LinkedIn Corp. * | | 52,600 | | 10,103,934 | |
Sina Corp. * | | 326,900 | | 18,411,008 | |
VistaPrint NV * | | 256,663 | | 10,471,850 | |
Yahoo! Inc. * | | 338,300 | | 8,366,159 | |
| | | | 200,017,364 | |
| | | | | | |
18
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
INVESTMENT BANKING & BROKERAGE—1.5% | | | | | |
Morgan Stanley | | 1,425,900 | | $ | 31,583,685 | |
| | | | | |
IT CONSULTING & OTHER SERVICES—2.7% | | | | | |
International Business Machines Corp. | | 274,800 | | 55,657,992 | |
| | | | | |
LEISURE FACILITIES—0.2% | | | | | |
SeaWorld Entertainment, Inc.* | | 105,300 | | 3,538,080 | |
| | | | | |
LIFE SCIENCES TOOLS & SERVICES—0.5% | | | | | |
Thermo Fisher Scientific, Inc. | | 138,500 | | 11,174,180 | |
| | | | | |
MANAGED HEALTH CARE—1.2% | | | | | |
UnitedHealth Group, Inc. | | 414,600 | | 24,846,978 | |
| | | | | |
MOVIES & ENTERTAINMENT—2.7% | | | | | |
News Corp., Cl. A | | 329,100 | | 10,192,227 | |
Viacom, Inc., Cl. B | | 472,500 | | 30,235,275 | |
Walt Disney Co., /The | | 237,100 | | 14,899,364 | |
| | | | 55,326,866 | |
MULTI-LINE INSURANCE—0.4% | | | | | |
American International Group, Inc.* | | 187,300 | | 7,757,966 | |
| | | | | |
OIL & GAS EQUIPMENT & SERVICES—2.0% | | | | | |
Cameron International Corp. * | | 277,400 | | 17,073,970 | |
Halliburton Company | | 359,100 | | 15,358,707 | |
National Oilwell Varco, Inc. | | 154,300 | | 10,063,446 | |
| | | | 42,496,123 | |
OIL & GAS EXPLORATION & PRODUCTION—1.8% | | | | | |
Anadarko Petroleum Corp. | | 292,300 | | 24,775,348 | |
Pioneer Natural Resources Co. | | 108,855 | | 13,305,347 | |
| | | | 38,080,695 | |
OIL & GAS REFINING & MARKETING—0.6% | | | | | |
Valero Energy Corp. | | 302,600 | | 12,200,832 | |
| | | | | |
OTHER DIVERSIFIED FINANCIAL SERVICES—2.0% | | | | | |
Bank of America Corp. | | 769,980 | | 9,478,454 | |
Citigroup, Inc. | | 670,800 | | 31,299,528 | |
| | | | 40,777,982 | |
PAPER PRODUCTS—0.3% | | | | | |
International Paper Co. | | 123,200 | | 5,787,936 | |
| | | | | |
PHARMACEUTICALS—4.4% | | | | | |
Actavis, Inc. * | | 184,700 | | 19,528,331 | |
Bristol-Myers Squibb Co. | | 378,300 | | 15,026,076 | |
Eli Lilly & Co. | | 306,800 | | 16,990,584 | |
Pfizer, Inc. | | 1,124,400 | | 32,686,308 | |
Sanofi # | | 114,500 | | 6,108,575 | |
| | | | 90,339,874 | |
REGIONAL BANKS—0.2% | | | | | |
Zions Bancorporation | | 154,600 | | 3,806,252 | |
| | | | | |
RESTAURANTS—1.8% | | | | | |
McDonald’s Corp. | | 210,700 | | 21,520,898 | |
| | | | | | |
19
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
RESTAURANTS—(CONT.) | | | | | |
Starbucks Corp. | | 249,500 | | $ | 15,179,580 | |
| | | | 36,700,478 | |
SECURITY & ALARM SERVICES—1.2% | | | | | |
ADT Corp., /The | | 185,027 | | 8,074,578 | |
Tyco International Ltd. | | 497,655 | | 15,984,679 | |
| | | | 24,059,257 | |
SEMICONDUCTOR EQUIPMENT—1.4% | | | | | |
ASML Holding NV # | | 165,177 | | 12,284,214 | |
Lam Research Corp. * | | 344,500 | | 15,922,790 | |
| | | | 28,207,004 | |
SEMICONDUCTORS—2.2% | | | | | |
Broadcom Corp., Cl. A | | 282,800 | | 10,180,800 | |
Intel Corp. | | 841,900 | | 20,163,505 | |
Microsemi Corp. * | | 47,800 | | 994,240 | |
NXP Semiconductor NV * | | 504,000 | | 13,885,200 | |
| | | | 45,223,745 | |
SOFT DRINKS—2.4% | | | | | |
Coca-Cola Co., /The | | 532,700 | | 22,549,191 | |
PepsiCo, Inc. | | 338,200 | | 27,891,354 | |
| | | | 50,440,545 | |
SPECIALTY CHEMICALS—1.6% | | | | | |
Celanese Corp. | | 235,489 | | 11,635,511 | |
Rockwood Holdings, Inc. | | 323,355 | | 20,982,506 | |
| | | | 32,618,017 | |
SPECIALTY STORES—0.3% | | | | | |
Dick’s Sporting Goods, Inc. | | 127,000 | | 6,108,700 | |
| | | | | |
SYSTEMS SOFTWARE—1.2% | | | | | |
Microsoft Corp. | | 349,400 | | 11,565,140 | |
Red Hat, Inc. * | | 292,400 | | 14,014,732 | |
| | | | 25,579,872 | |
TOBACCO—1.8% | | | | | |
Philip Morris International, Inc. | | 394,505 | | 37,710,733 | |
| | | | | |
TRADING COMPANIES & DISTRIBUTORS—1.1% | | | | | |
MRC Global, Inc. * | | 350,800 | | 10,506,460 | |
United Rentals, Inc. * | | 78,200 | | 4,114,102 | |
WESCO International, Inc. * | | 122,400 | | 8,774,856 | |
| | | | 23,395,418 | |
WIRELESS TELECOMMUNICATION SERVICES—0.5% | | | | | |
SBA Communications Corp., Cl. A * | | 68,852 | | 5,438,620 | |
Vodafone Group PLC # | | 174,500 | | 5,337,955 | |
| | | | 10,776,575 | |
TOTAL COMMON STOCKS
(Cost $1,746,889,170) | | | | 2,002,547,758 | |
| | | | | | |
20
| | SHARES | | VALUE | |
MASTER LIMITED PARTNERSHIP—0.8% | | | | | |
ASSET MANAGEMENT & CUSTODY BANKS—0.8% | | | | | |
Blackstone Group LP | | 799,300 | | $ | 16,425,615 | |
| | | | | |
TOTAL MASTER LIMITED PARTNERSHIP
(Cost $13,070,125) | | | | 16,425,615 | |
| | | | | |
REAL ESTATE INVESTMENT TRUST—1.9% | | | | | |
MORTGAGE—0.7% | | | | | |
Two Harbors Investment Corp. | | 1,276,100 | | 15,287,678 | |
| | | | | |
RESIDENTIAL—0.6% | | | | | |
American Homes 4 Rent *(L2)(a) | | 601,635 | | 10,739,185 | |
Silver Bay Realty Trust Corp. | | 62,306 | | 1,188,798 | |
| | | | 11,927,983 | |
SPECIALIZED—0.6% | | | | | |
Ryman Hospitality Properties | | 279,369 | | 12,420,746 | |
| | | | | |
TOTAL REAL ESTATE INVESTMENT TRUST
(Cost $34,464,198) | | | | 39,636,407 | |
| | | | | |
Total Investments
(Cost $1,794,423,493)(b) | | 99.1 | % | 2,058,609,780 | |
Other Assets in Excess of Liabilities | | 0.9 | | 17,772,063 | |
NET ASSETS | | 100.0 | % | $ | 2,076,381,843 | |
‡ | Securities classified as Level 1 for ASC 820 disclosure purposes based on valuation inputs unless otherwise noted. |
| |
* | Non-income producing security. |
# | American Depositary Receipts. |
(a) | Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified institutional buyers. These securities are deemed to be liquid and represent 0.5% of the net assets of the Fund. |
(b) | At April 30, 2013, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $1,794,423,493, amounted to $264,186,288 which consisted of aggregate gross unrealized appreciation of $273,080,462 and aggregate gross unrealized depreciation of $8,894,174. |
(L2) | Security classified as Level 2 for ASC 820 disclosure purposes based on valuation inputs. |
See Notes to Financial Statements.
21
THE ALGER INSTITUTIONAL FUNDS | ALGER CAPITAL APPRECIATION FOCUS FUND
Schedule of Investments‡ (Unaudited) April 30, 2013
| | SHARES | | VALUE | |
COMMON STOCKS—89.0% | | | | | |
AEROSPACE & DEFENSE—2.1% | | | | | |
Honeywell International, Inc. | | 4,250 | | $ | 312,545 | |
| | | | | |
AIR FREIGHT & LOGISTICS—2.2% | | | | | |
FedEx Corp. | | 3,500 | | 329,035 | |
| | | | | |
APPAREL ACCESSORIES & LUXURY GOODS—2.1% | | | | | |
PVH Corp. | | 2,650 | | 305,837 | |
| | | | | |
APPLICATION SOFTWARE—2.4% | | | | | |
Cadence Design Systems, Inc.* | | 25,800 | | 356,040 | |
| | | | | |
AUTO PARTS & EQUIPMENT—4.0% | | | | | |
Delphi Automotive PLC | | 5,750 | | 265,707 | |
WABCO Holdings, Inc. * | | 4,450 | | 321,424 | |
| | | | 587,131 | |
BIOTECHNOLOGY—0.5% | | | | | |
Vertex Pharmaceuticals, Inc.* | | 900 | | 69,138 | |
| | | | | |
BROADCASTING—2.0% | | | | | |
CBS Corp., Cl. B | | 6,350 | | 290,703 | |
| | | | | |
CABLE & SATELLITE—3.2% | | | | | |
Comcast Corporation, Cl. A | | 11,500 | | 474,950 | |
| | | | | |
CASINOS & GAMING—1.9% | | | | | |
Las Vegas Sands Corp. | | 5,000 | | 281,250 | |
| | | | | |
COMMUNICATIONS EQUIPMENT—1.3% | | | | | |
QUALCOMM, Inc. | | 3,000 | | 184,860 | |
| | | | | |
COMPUTER HARDWARE—5.4% | | | | | |
Apple, Inc. | | 1,783 | | 789,423 | |
| | | | | |
COMPUTER STORAGE & PERIPHERALS—0.8% | | | | | |
SanDisk Corp.* | | 2,300 | | 120,612 | |
| | | | | |
CONSTRUCTION & ENGINEERING—1.9% | | | | | |
Chicago Bridge & Iron Co., NV # | | 2,200 | | 118,338 | |
Quanta Services, Inc. * | | 5,800 | | 159,384 | |
| | | | 277,722 | |
CONSUMER FINANCE—1.5% | | | | | |
Capital One Financial Corp. | | 3,700 | | 213,786 | |
| | | | | |
DRUG RETAIL—2.3% | | | | | |
CVS Caremark Corp. | | 5,750 | | 334,535 | |
| | | | | |
HEALTH CARE FACILITIES—2.6% | | | | | |
HCA Holdings, Inc. | | 9,750 | | 388,928 | |
| | | | | |
HEALTH CARE SERVICES—1.9% | | | | | |
Express Scripts, Inc.* | | 4,750 | | 282,007 | |
| | | | | |
HOME IMPROVEMENT RETAIL—3.7% | | | | | |
Home Depot, Inc., /The | | 4,000 | | 293,400 | |
Lowe’s Companies, Inc. | | 6,650 | | 255,493 | |
| | | | 548,893 | |
HOUSEHOLD PRODUCTS—1.9% | | | | | |
Procter & Gamble Co., /The | | 3,650 | | 280,211 | |
| | | | | | |
22
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
HUMAN RESOURCE & EMPLOYMENT SERVICES—1.4% | | | | | |
Robert Half International, Inc. | | 6,400 | | $ | 210,048 | |
| | | | | |
INTEGRATED TELECOMMUNICATION SERVICES—1.3% | | | | | |
Verizon Communications, Inc. | | 3,500 | | 188,685 | |
| | | | | |
INTERNET RETAIL—2.8% | | | | | |
Amazon.com, Inc.* | | 1,620 | | 411,172 | |
| | | | | |
INTERNET SOFTWARE & SERVICES—9.6% | | | | | |
eBay, Inc. * | | 5,100 | | 267,189 | |
Facebook, Inc. * | | 14,400 | | 399,744 | |
Google, Inc., Cl. A * | | 702 | | 578,848 | |
Sina Corp. * | | 3,150 | | 177,408 | |
| | | | 1,423,189 | |
INVESTMENT BANKING & BROKERAGE—2.5% | | | | | |
Morgan Stanley | | 16,700 | | 369,905 | |
| | | | | |
IT CONSULTING & OTHER SERVICES—2.7% | | | | | |
International Business Machines Corp. | | 1,950 | | 394,953 | |
| | | | | |
MANAGED HEALTH CARE—1.7% | | | | | |
UnitedHealth Group, Inc. | | 4,150 | | 248,710 | |
| | | | | |
MOVIES & ENTERTAINMENT—3.6% | | | | | |
Viacom, Inc., Cl. B | | 8,250 | | 527,918 | |
| | | | | |
OIL & GAS EQUIPMENT & SERVICES—1.8% | | | | | |
Schlumberger Ltd. | | 3,650 | | 271,669 | |
| | | | | |
OIL & GAS EXPLORATION & PRODUCTION—2.6% | | | | | |
Anadarko Petroleum Corp. | | 2,400 | | 203,424 | |
Pioneer Natural Resources Co. | | 1,450 | | 177,233 | |
| | | | 380,657 | |
OIL & GAS REFINING & MARKETING—0.9% | | | | | |
Valero Energy Corp. | | 3,250 | | 131,040 | |
| | | | | |
OTHER DIVERSIFIED FINANCIAL SERVICES—2.6% | | | | | |
Citigroup, Inc. | | 8,350 | | 389,611 | |
| | | | | |
PHARMACEUTICALS—3.8% | | | | | |
Actavis, Inc. * | | 1,550 | | 163,881 | |
Eli Lilly & Co. | | 2,500 | | 138,450 | |
Pfizer, Inc. | | 9,100 | | 264,537 | |
| | | | 566,868 | |
RESTAURANTS—2.2% | | | | | |
McDonald’s Corp. | | 3,150 | | 321,741 | |
| | | | | |
SOFT DRINKS—1.5% | | | | | |
PepsiCo, Inc. | | 2,700 | | 222,669 | |
| | | | | |
SPECIALTY CHEMICALS—3.0% | | | | | |
Celanese Corp. | | 5,050 | | 249,520 | |
Rockwood Holdings, Inc. | | 3,050 | | 197,915 | |
| | | | 447,435 | |
TRADING COMPANIES & DISTRIBUTORS—1.3% | | | | | |
MRC Global, Inc. * | | 2,950 | | 88,353 | |
| | | | | | |
23
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
TRADING COMPANIES & DISTRIBUTORS—(CONT.) | | | | | |
WESCO International, Inc. * | | 1,400 | | $ | 100,366 | |
| | | | 188,719 | |
TOTAL COMMON STOCKS
(Cost $12,196,214) | | | | 13,122,595 | |
| | | | | |
MASTER LIMITED PARTNERSHIP —2.7% | | | | | |
ASSET MANAGEMENT & CUSTODY BANKS—2.7% | | | | | |
Blackstone Group LP | | 19,350 | | 397,642 | |
| | | | | |
TOTAL MASTER LIMITED PARTNERSHIP
(Cost $396,020) | | | | 397,642 | |
| | | | | |
REAL ESTATE INVESTMENT TRUST—1.0% | | | | | |
SPECIALIZED—1.0% | | | | | |
Ryman Hospitality Properties | | 3,400 | | 151,164 | |
| | | | | |
TOTAL REAL ESTATE INVESTMENT TRUST
(Cost $127,767) | | | | 151,164 | |
| | | | | |
Total Investments
(Cost $12,720,001)(a) | | 92.7 | % | 13,671,401 | |
Other Assets in Excess of Liabilities | | 7.3 | | 1,078,564 | |
NET ASSETS | | 100.0 | % | $ | 14,749,965 | |
‡ Securities classified as Level 1 for ASC 820 disclosure purposes based on valuation inputs unless otherwise noted.
* Non-income producing security.
# American Depositary Receipts.
(a) At April 30, 2013, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $12,720,000, amounted to $951,401 which consisted of aggregate gross unrealized appreciation of $1,070,093 and aggregate gross unrealized depreciation of $118,692.
See Notes to Financial Statements.
24
THE ALGER INSTITUTIONAL FUNDS | ALGER MID CAP GROWTH INSTITUTIONAL FUND
Schedule of Investments‡ (Unaudited) April 30, 2013
| | SHARES | | VALUE | |
COMMON STOCKS—95.4% | | | | | |
ADVERTISING—1.1% | | | | | |
Lamar Advertising Co., Cl. A* | | 43,400 | | $ | 2,031,988 | |
| | | | | |
AEROSPACE & DEFENSE—1.4% | | | | | |
B/E Aerospace, Inc. * | | 25,100 | | 1,574,774 | |
TransDigm Group, Inc. | | 7,100 | | 1,042,280 | |
| | | | 2,617,054 | |
AIRLINES—1.6% | | | | | |
Alaska Air Group, Inc. * | | 24,800 | | 1,528,672 | |
Copa Holdings SA | | 11,400 | | 1,431,612 | |
| | | | 2,960,284 | |
ALTERNATIVE CARRIERS—0.7% | | | | | |
Intelsat SA* | | 68,600 | | 1,382,290 | |
| | | | | |
APPAREL ACCESSORIES & LUXURY GOODS—4.8% | | | | | |
Fifth & Pacific Cos, Inc. * | | 84,700 | | 1,746,514 | |
Fossil, Inc. * | | 20,400 | | 2,001,648 | |
Michael Kors Holdings Ltd. * | | 31,600 | | 1,799,304 | |
PVH Corp. | | 16,500 | | 1,904,265 | |
Ralph Lauren Corp. | | 8,300 | | 1,507,114 | |
| | | | 8,958,845 | |
APPAREL RETAIL—2.6% | | | | | |
Gap Inc., /The | | 36,700 | | 1,394,233 | |
L Brands, Inc. | | 44,100 | | 2,223,081 | |
Ross Stores, Inc. | | 20,600 | | 1,361,042 | |
| | | | 4,978,356 | |
APPLICATION SOFTWARE—3.1% | | | | | |
Cadence Design Systems, Inc. * | | 123,900 | | 1,709,820 | |
Citrix Systems, Inc. * | | 30,200 | | 1,877,534 | |
Nuance Communications, Inc. * | | 56,500 | | 1,075,760 | |
Splunk, Inc. * | | 28,785 | | 1,174,428 | |
| | | | 5,837,542 | |
ASSET MANAGEMENT & CUSTODY BANKS—1.9% | | | | | |
Affiliated Managers Group, Inc. * | | 6,800 | | 1,058,624 | |
T. Rowe Price Group, Inc. | | 21,400 | | 1,551,500 | |
WisdomTree Investments, Inc. * | | 83,300 | | 966,280 | |
| | | | 3,576,404 | |
AUTO PARTS & EQUIPMENT—1.8% | | | | | |
Delphi Automotive PLC | | 42,250 | | 1,952,372 | |
WABCO Holdings, Inc. * | | 18,900 | | 1,365,147 | |
| | | | 3,317,519 | |
BIOTECHNOLOGY—5.3% | | | | | |
Alexion Pharmaceuticals, Inc. * | | 18,500 | | 1,813,000 | |
BioMarin Pharmaceutical, Inc. * | | 25,400 | | 1,666,240 | |
Idenix Pharmaceuticals, Inc. * | | 183,759 | | 679,908 | |
Medivation, Inc. * | | 15,700 | | 827,547 | |
Merrimack Pharmaceuticals, Inc. * | | 213,133 | | 1,048,615 | |
Onyx Pharmaceuticals, Inc. * | | 11,150 | | 1,057,020 | |
Regeneron Pharmaceuticals, Inc. * | | 6,500 | | 1,398,410 | |
| | | | | | |
25
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
BIOTECHNOLOGY—(CONT.) | | | | | |
Vertex Pharmaceuticals, Inc. * | | 19,900 | | $ | 1,528,718 | |
| | | | 10,019,458 | |
BROADCASTING—3.7% | | | | | |
CBS Corp., Cl. B | | 45,800 | | 2,096,724 | |
Discovery Communications, Inc., Series C * | | 24,200 | | 1,715,538 | |
Scripps Networks Interactive, Inc., Cl. A | | 27,300 | | 1,817,634 | |
Sinclair Broadcast Group, Inc., CL. A | | 25,000 | | 670,000 | |
Tribune Co. * | | 13,000 | | 737,750 | |
| | | | 7,037,646 | |
CABLE & SATELLITE—1.7% | | | | | |
AMC Networks, Inc. * | | 5,800 | | 365,458 | |
Liberty Global, Inc., Cl. A * | | 19,000 | | 1,375,030 | |
Sirius XM Radio, Inc. | | 423,100 | | 1,375,075 | |
| | | | 3,115,563 | |
CASINOS & GAMING—1.0% | | | | | |
Wynn Resorts Ltd. | | 14,100 | | 1,935,930 | |
| | | | | |
COMMUNICATIONS EQUIPMENT—0.9% | | | | | |
F5 Networks, Inc.* | | 21,500 | | 1,643,245 | |
| | | | | |
COMPUTER STORAGE & PERIPHERALS—0.5% | | | | | |
SanDisk Corp.* | | 16,500 | | 865,260 | |
| | | | | |
CONSTRUCTION & ENGINEERING—0.9% | | | | | |
Quanta Services, Inc. * | | 40,800 | | 1,121,184 | |
TPI - Triunfo Participacoes e Investimentos SA | | 90,300 | | 514,066 | |
| | | | 1,635,250 | |
CONSTRUCTION MATERIALS—0.6% | | | | | |
Eagle Materials Inc. | | 16,200 | | 1,097,550 | |
| | | | | |
DATA PROCESSING & OUTSOURCED SERVICES—2.2% | | | | | |
Alliance Data Systems Corp. * | | 12,000 | | 2,061,240 | |
Fiserv, Inc. * | | 11,500 | | 1,047,765 | |
Paychex, Inc. | | 30,000 | | 1,092,300 | |
| | | | 4,201,305 | |
DISTILLERS & VINTNERS—1.3% | | | | | |
Beam, Inc. | | 39,000 | | 2,523,690 | |
| | | | �� | |
DISTRIBUTORS—0.5% | | | | | |
LKQ Corp.* | | 40,700 | | 980,056 | |
| | | | | |
DIVERSIFIED CHEMICALS—2.3% | | | | | |
Eastman Chemical Co. | | 27,000 | | 1,799,550 | |
PPG Industries, Inc. | | 17,100 | | 2,516,094 | |
| | | | 4,315,644 | |
ELECTRICAL COMPONENTS & EQUIPMENT—1.6% | | | | | |
Eaton Corp., PLC | | 28,300 | | 1,737,903 | |
Hubbell Inc., Cl. B | | 13,000 | | 1,247,480 | |
| | | | 2,985,383 | |
ELECTRONIC EQUIPMENT MANUFACTURERS—0.4% | | | | | |
OSI Systems, Inc.* | | 14,500 | | 830,850 | |
| | | | | | |
26
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
ENVIRONMENTAL & FACILITIES SERVICES—1.4% | | | | | |
Stericycle, Inc. * | | 14,300 | | $ | 1,548,976 | |
Tetra Tech, Inc. * | | 40,300 | | 1,059,487 | |
| | | | 2,608,463 | |
FOOD RETAIL—0.5% | | | | | |
Whole Foods Market, Inc. | | 10,200 | | 900,864 | |
| | | | | |
GENERAL MERCHANDISE STORES—0.7% | | | | | |
Dollar General Corp.* | | 25,350 | | 1,320,482 | |
| | | | | |
HEALTH CARE EQUIPMENT—1.2% | | | | | |
CR Bard, Inc. | | 14,700 | | 1,460,592 | |
Thoratec Corp. * | | 20,400 | | 738,480 | |
| | | | 2,199,072 | |
HEALTH CARE FACILITIES—1.6% | | | | | |
HCA Holdings, Inc. | | 30,700 | | 1,224,623 | |
Tenet Healthcare Corporation * | | 40,450 | | 1,834,812 | |
| | | | 3,059,435 | |
HEALTH CARE SERVICES—0.6% | | | | | |
Catamaran Corp.* | | 18,010 | | 1,039,717 | |
| | | | | |
HEALTH CARE TECHNOLOGY—1.0% | | | | | |
Agilent Technologies, Inc. | | 24,700 | | 1,023,568 | |
HMS Holdings Corp. * | | 37,300 | | 940,333 | |
| | | | 1,963,901 | |
HOMEBUILDING—0.4% | | | | | |
Taylor Morrison Home Corp., Cl. A* | | 31,700 | | 817,226 | |
| | | | | |
HOTELS RESORTS & CRUISE LINES—2.3% | | | | | |
Marriott Vacations Worldwide Corp. * | | 42,200 | | 1,919,256 | |
Wyndham Worldwide Corporation | | 41,200 | | 2,475,296 | |
| | | | 4,394,552 | |
HUMAN RESOURCE & EMPLOYMENT SERVICES—0.9% | | | | | |
Robert Half International, Inc. | | 50,200 | | 1,647,564 | |
| | | | | |
INDUSTRIAL MACHINERY—1.4% | | | | | |
Ingersoll-Rand PLC | | 19,800 | | 1,065,240 | |
Pall Corp. | | 13,800 | | 920,598 | |
SPX Corp. | | 9,000 | | 670,590 | |
| | | | 2,656,428 | |
INTERNET SOFTWARE & SERVICES—2.4% | | | | | |
Equinix, Inc. * | | 8,800 | | 1,884,080 | |
LinkedIn Corp. * | | 10,200 | | 1,959,318 | |
VistaPrint NV * | | 16,600 | | 677,280 | |
| | | | 4,520,678 | |
LEISURE FACILITIES—0.6% | | | | | |
SeaWorld Entertainment, Inc.* | | 33,300 | | 1,118,880 | |
| | | | | |
LIFE & HEALTH INSURANCE—0.7% | | | | | |
Lincoln National Corp. | | 37,900 | | 1,288,979 | |
| | | | | |
LIFE SCIENCES TOOLS & SERVICES—1.3% | | | | | |
Charles River Laboratories International Inc. * | | 33,800 | | 1,469,962 | |
| | | | | | |
27
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
LIFE SCIENCES TOOLS & SERVICES—(CONT.) | | | | | |
Illumina, Inc. * | | 9,600 | | $ | 621,024 | |
PerkinElmer, Inc. | | 11,600 | | 355,540 | |
| | | | 2,446,526 | |
METAL & GLASS CONTAINERS—1.0% | | | | | |
Berry Plastics Group, Inc.* | | 94,900 | | 1,803,100 | |
| | | | | |
MOTORCYCLE MANUFACTURERS—1.0% | | | | | |
Harley-Davidson, Inc. | | 32,800 | | 1,792,520 | |
| | | | | |
OFFICE SERVICES & SUPPLIES—0.6% | | | | | |
West Corp. | | 58,300 | | 1,224,300 | |
| | | | | |
OIL & GAS DRILLING—0.2% | | | | | |
Ensco PLC^ | | 6,600 | | 380,688 | |
| | | | | |
OIL & GAS EQUIPMENT & SERVICES—2.0% | | | | | |
Cameron International Corp. *,^ | | 37,450 | | 2,305,047 | |
Superior Energy Services, Inc. *,^ | | 50,600 | | 1,396,054 | |
| | | | 3,701,101 | |
OIL & GAS EXPLORATION & PRODUCTION—4.4% | | | | | |
Cabot Oil & Gas Corp. | | 25,800 | | 1,755,690 | |
Denbury Resources, Inc. *,^ | | 59,700 | | 1,068,033 | |
Pioneer Natural Resources Co. ^ | | 20,400 | | 2,493,492 | |
Rosetta Resources, Inc. *,^ | | 26,200 | | 1,124,242 | |
Whitinig Petroleum Corp. *,^ | | 42,500 | | 1,891,250 | |
| | | | 8,332,707 | |
OIL & GAS REFINING & MARKETING—0.8% | | | | | |
Tesoro Corp.^ | | 27,900 | | 1,489,860 | |
| | | | | |
PACKAGED FOODS & MEATS—2.5% | | | | | |
ConAgra Foods, Inc. | | 68,000 | | 2,405,160 | |
Hershey Co., /The | | 26,000 | | 2,318,160 | |
| | | | 4,723,320 | |
PAPER PRODUCTS—0.7% | | | | | |
International Paper Co. | | 27,100 | | 1,273,158 | |
| | | | | |
PERSONAL PRODUCTS—0.4% | | | | | |
Avon Products, Inc. | | 33,800 | | 782,808 | |
| | | | | |
PHARMACEUTICALS—2.2% | | | | | |
Actavis, Inc. * | | 30,200 | | 3,193,046 | |
Zoetis, Inc. | | 26,900 | | 888,238 | |
| | | | 4,081,284 | |
REAL ESTATE SERVICES—0.8% | | | | | |
Jones Lang LaSalle, Inc. | | 14,400 | | 1,425,888 | |
| | | | | |
REGIONAL BANKS—0.4% | | | | | |
Zions Bancorporation | | 33,200 | | 817,384 | |
| | | | | |
RESEARCH & CONSULTING SERVICES—1.1% | | | | | |
CoStar Group, Inc. * | | 6,700 | | 726,347 | |
Verisk Analytics, Inc., Cl. A * | | 21,200 | | 1,299,348 | |
| | | | 2,025,695 | |
| | | | | | |
28
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
RESTAURANTS—1.5% | | | | | |
Buffalo Wild Wings, Inc. * | | 16,600 | | $ | 1,494,000 | |
Chipotle Mexican Grill, Inc. * | | 3,500 | | 1,271,165 | |
| | | | 2,765,165 | |
SECURITY & ALARM SERVICES—1.1% | | | | | |
ADT Corp., /The | | 16,600 | | 724,424 | |
Tyco International Ltd. | | 40,900 | | 1,313,708 | |
| | | | 2,038,132 | |
SEMICONDUCTOR EQUIPMENT—0.8% | | | | | |
Lam Research Corp.* | | 33,200 | | 1,534,504 | |
| | | | | |
SEMICONDUCTORS—3.2% | | | | | |
Avago Technologies Ltd. | | 45,500 | | 1,454,180 | |
Microsemi Corp. * | | 84,900 | | 1,765,920 | |
NXP Semiconductor NV * | | 56,500 | | 1,556,575 | |
Skyworks Solutions, Inc. * | | 54,100 | | 1,193,987 | |
| | | | 5,970,662 | |
SPECIALIZED FINANCE—1.1% | | | | | |
IntercontinentalExchange, Inc. * | | 6,300 | | 1,026,459 | |
Moody’s Corp. | | 17,400 | | 1,058,790 | |
| | | | 2,085,249 | |
SPECIALTY CHEMICALS—2.7% | | | | | |
Celanese Corp. | | 30,100 | | 1,487,241 | |
Rockwood Holdings, Inc. | | 34,700 | | 2,251,683 | |
Valspar Corp., /The | | 22,200 | | 1,416,804 | |
| | | | 5,155,728 | |
SPECIALTY STORES—2.0% | | | | | |
Dick’s Sporting Goods, Inc. | | 37,300 | | 1,794,130 | |
Tractor Supply Co. | | 18,100 | | 1,939,777 | |
| | | | 3,733,907 | |
SYSTEMS SOFTWARE—3.2% | | | | | |
CommVault Systems, Inc. * | | 16,700 | | 1,228,118 | |
Fortinet, Inc. * | | 66,600 | | 1,196,136 | |
NetSuite, Inc. * | | 7,000 | | 615,720 | |
Red Hat, Inc. * | | 61,700 | | 2,957,281 | |
| | | | 5,997,255 | |
TRADING COMPANIES & DISTRIBUTORS—1.7% | | | | | |
WESCO International, Inc. * | | 13,200 | | 946,308 | |
WW Grainger, Inc. | | 9,100 | | 2,242,877 | |
| | | | 3,189,185 | |
WIRELESS TELECOMMUNICATION SERVICES—1.1% | | | | | |
Crown Castle International Corp.* | | 26,200 | | 2,017,400 | |
| | | | | |
TOTAL COMMON STOCKS
(Cost $165,588,982) | | | | 179,170,879 | |
| | | | | | |
29
| | SHARES | | VALUE | |
MASTER LIMITED PARTNERSHIP —0.6% | | | | | |
ASSET MANAGEMENT & CUSTODY BANKS—0.6% | | | | | |
KKR & Co., LP | | 50,100 | | $ | 1,052,100 | |
| | | | | |
TOTAL MASTER LIMITED PARTNERSHIP
(Cost $896,201) | | | | 1,052,100 | |
| | | | | |
REAL ESTATE INVESTMENT TRUST—1.3% | | | | | |
RESIDENTIAL—1.3% | | | | | |
American Homes 4 Rent*(L2)(a) | | 131,900 | | 2,354,415 | |
| | | | | |
TOTAL REAL ESTATE INVESTMENT TRUST
(Cost $1,978,500) | | | | 2,354,415 | |
| | | | | |
| | CONTRACTS | | | |
PURCHASED OPTIONS—0.0% | | | | | |
PUT OPTIONS—0.0% | | | | | |
Cobalt International Energy, Inc./ May/ 22.5*(L2) | | 182 | | — | |
SPDR S&P 500 ETF Trust/ May/ 154*,~ | | 131 | | 4,716 | |
SPDR S&P 500 ETF Trust/ May/ 156*,~ | | 66 | | 4,092 | |
| | | | | |
TOTAL PUT OPTIONS
(Cost $25,806) | | | | 8,808 | |
| | | | | |
CALL OPTIONS—0.0% | | | | | |
Ensco PLC/ May/ 57.5*,^ | | 33 | | 4,620 | |
SM Energy Co./ May/ 65*,^ | | 66 | | 5,610 | |
| | | | | |
TOTAL CALL OPTIONS
(Cost $8,179) | | | | 10,230 | |
| | | | | |
TOTAL PURCHASED OPTIONS
(Cost $33,985) | | | | 19,038 | |
| | | | | |
Total Investments
(Cost $168,497,668)(b) | | 97.3 | % | 182,596,432 | |
Other Assets in Excess of Liabilities | | 2.7 | | 5,044,083 | |
NET ASSETS | | 100.0 | % | $ | 187,640,515 | |
‡ Securities classified as Level 1 for ASC 820 disclosure purposes based on valuation inputs unless otherwise noted.
^ All or a portion of this security has been pledged as collateral for written call options.
~ All or a portion of this security has been pledged as collateral for written put options.
* Non-income producing security.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified institutional buyers. These securities are deemed to be liquid and represent 1.3% of the net assets of the Fund.
(b) At April 30, 2013, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $168,497,668, amounted to $14,098,764 which consisted of aggregate gross unrealized appreciation of $19,167,211 and aggregate gross unrealized depreciation of $5,068,447.
(L2) Security classified as Level 2 for ASC 820 disclosure purposes based on valuation inputs.
See Notes to Financial Statements.
30
| | CONTRACTS | | SHARES
SUBJECT
TO PUT/
CALL | | VALUE | |
PUT OPTIONS WRITTEN | | | | | | | |
Cameron International Corp./ May/ 62.5 | | 66 | | 6,600 | | $ | 14,190 | |
Cobalt International Energy, Inc./ May/ 27.5 | | 99 | | 9,900 | | 8,415 | |
Denbury Resources, Inc./ May/ 18(L2) | | 33 | | 3,300 | | 1,650 | |
Gulfport Energy Corp./ May/ 42.5(L2) | | 49 | | 4,900 | | 1,225 | |
Gulfport Energy Corp./ May/ 45(L2) | | 49 | | 4,900 | | 2,205 | |
Peabody Energy Corp./ May/ 21 | | 65 | | 6,500 | | 8,450 | |
SM Energy Co./ May/ 60 | | 62 | | 6,200 | | 13,888 | |
SM Energy Co./ May/ 65(L2) | | 63 | | 6,300 | | 29,610 | |
SPDR S&P 500 ETF Trust/ May/ 153 | | 131 | | 13,100 | | 3,799 | |
SPDR S&P 500 ETF Trust/ May/ 155 | | 66 | | 6,600 | | 3,168 | |
Tesoro Corp./ May/ 55 | | 33 | | 3,300 | | 11,220 | |
Tesoro Corp./ May/ 60 | | 33 | | 3,300 | | 23,100 | |
TOTAL PUT OPTIONS WRITTEN
(Premiums Received $154,284) | | | | | | 120,920 | |
CALL OPTIONS WRITTEN | | | | | | | |
Cameron International Corp./ May/ 57.5(L2) | | 33 | | 3,300 | | 14,190 | |
Cameron International Corp./ May/ 60 | | 66 | | 6,600 | | 15,510 | |
Denbury Resources, Inc./ May/ 17(L2) | | 65 | | 6,500 | | 6,500 | |
Ensco PLC/ May/ 55 | | 66 | | 6,600 | | 20,460 | |
Ensco PLC/ May/ 60 | | 66 | | 6,600 | | 2,640 | |
Pioneer Natural Resources Co./ May/ 115 | | 16 | | 1,600 | | 13,760 | |
Pioneer Natural Resources Co./ May/ 120 | | 16 | | 1,600 | | 7,152 | |
Rosetta Resources, Inc./ June/ 40(L2) | | 33 | | 3,300 | | 13,200 | |
Rosetta Resources, Inc./ June/ 45(L2) | | 33 | | 3,300 | | 4,455 | |
Rosetta Resources, Inc./ May/ 40 | | 33 | | 3,300 | | 11,550 | |
SM Energy Co./ May/ 55 | | 33 | | 3,300 | | 20,361 | |
SM Energy Co./ May/ 60 | | 33 | | 3,300 | | 7,755 | |
Superior Energy Services, Inc./ May/ 25 | | 99 | | 9,900 | | 26,235 | |
Tesoro Corp./ May/ 50 | | 198 | | 19,800 | | 78,210 | |
Tesoro Corp./ May/ 55 | | 66 | | 6,600 | | 9,240 | |
Whiting Petroleum Corp./ June/ 47 | | 33 | | 3,300 | | 3,828 | |
Whiting Petroleum Corp./ May/ 44 | | 33 | | 3,300 | | 5,610 | |
Whiting Petroleum Corp./ May/ 47 | | 33 | | 3,300 | | 1,155 | |
Whiting Petroleum Corp./ May/ 48 | | 33 | | 3,300 | | 660 | |
TOTAL CALL OPTIONS WRITTEN
(Premiums Received $251,257) | | | | | | 262,471 | |
TOTAL OPTIONS WRITTEN
(Premiums Received $405,541) | | | | | | $ | 383,391 | |
‡ Securities classified as Level 1 for ASC 820 disclosure purposes based on valuation inputs unless otherwise noted.
(L2) Security classified as Level 2 for ASC 820 disclosure purposes based on valuation inputs.
See Notes to Financial Statements.
31
THE ALGER INSTITUTIONAL FUNDS | ALGER SMALL CAP GROWTH INSTITUTIONAL FUND
Schedule of Investments‡ (Unaudited) April 30, 2013
| | SHARES | | VALUE | |
COMMON STOCKS—94.0% | | | | | |
AEROSPACE & DEFENSE—1.5% | | | | | |
Esterline Technologies Corp. * | | 83,775 | | $ | 6,286,476 | |
Hexcel Corp. * | | 273,850 | | 8,352,425 | |
| | | | 14,638,901 | |
AIR FREIGHT & LOGISTICS—1.0% | | | | | |
HUB Group, Inc., Cl. A* | | 257,550 | | 9,439,208 | |
| | | | | |
AIRLINES—1.8% | | | | | |
Alaska Air Group, Inc. * | | 169,100 | | 10,423,324 | |
US Airways Group, Inc. * | | 387,700 | | 6,552,130 | |
| | | | 16,975,454 | |
ALTERNATIVE CARRIERS—0.9% | | | | | |
Cogent Communications Group, Inc. | | 306,050 | | 8,765,272 | |
| | | | | |
APPAREL ACCESSORIES & LUXURY GOODS—1.2% | | | | | |
Fifth & Pacific Cos, Inc.* | | 543,050 | | 11,197,691 | |
| | | | | |
APPAREL RETAIL—2.9% | | | | | |
ANN, Inc. * | | 260,350 | | 7,690,739 | |
Children’s Place Retail Stores, Inc., /The * | | 106,450 | | 5,207,534 | |
DSW, Inc., Cl. A | | 134,000 | | 8,860,080 | |
Stage Stores, Inc. | | 234,500 | | 6,493,305 | |
| | | | 28,251,658 | |
APPLICATION SOFTWARE—4.4% | | | | | |
Aspen Technology, Inc. * | | 325,000 | | 9,906,000 | |
BroadSoft, Inc. * | | 256,619 | | 6,559,182 | |
Cadence Design Systems, Inc. * | | 813,550 | | 11,226,990 | |
Synchronoss Technologies, Inc. * | | 160,150 | | 4,538,651 | |
Ultimate Software Group, Inc. * | | 101,600 | | 9,813,544 | |
| | | | 42,044,367 | |
ASSET MANAGEMENT & CUSTODY BANKS—1.1% | | | | | |
WisdomTree Investments, Inc.* | | 885,000 | | 10,266,000 | |
| | | | | |
AUTO PARTS & EQUIPMENT—1.6% | | | | | |
American Axle & Manufacturing Holdings, Inc. * | | 459,650 | | 6,145,520 | |
Dana Holding Corp. | | 533,950 | | 9,210,638 | |
| | | | 15,356,158 | |
BIOTECHNOLOGY—6.8% | | | | | |
ACADIA Pharmaceuticals, Inc. * | | 144,950 | | 1,868,405 | |
Acorda Therapeutics, Inc. * | | 163,150 | | 6,455,846 | |
Alkermes PLC * | | 339,150 | | 10,381,381 | |
Cepheid, Inc. * | | 228,200 | | 8,701,266 | |
Cubist Pharmaceuticals, Inc. * | | 122,950 | | 5,645,864 | |
Idenix Pharmaceuticals, Inc. * | | 617,100 | | 2,283,270 | |
Infinity Pharmaceuticals, Inc. * | | 89,500 | | 3,856,555 | |
Orexigen Therapeutics, Inc. * | | 604,550 | | 3,675,664 | |
Pharmacyclics, Inc. * | | 92,350 | | 7,526,525 | |
Seattle Genetics, Inc. * | | 117,850 | | 4,354,558 | |
Synageva BioPharma Corp. * | | 103,200 | | 5,334,408 | |
Theravance, Inc. * | | 140,300 | | 4,735,125 | |
| | | | 64,818,867 | |
| | | | | | |
32
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
BUILDING PRODUCTS—0.8% | | | | | |
AO Smith Corp. | | 97,100 | | $ | 7,324,253 | |
| | | | | |
COMMUNICATIONS EQUIPMENT—2.2% | | | | | |
Aruba Networks, Inc. * | | 194,950 | | 4,384,425 | |
Finisar Corp. * | | 342,800 | | 4,401,552 | |
RADWARE Ltd. * | | 411,900 | | 6,174,381 | |
Ruckus Wireless, Inc. * | | 336,600 | | 6,496,380 | |
| | | | 21,456,738 | |
COMPUTER HARDWARE—0.7% | | | | | |
Silicon Graphics International Corp.* | | 499,650 | | 6,495,450 | |
| | | | | |
COMPUTER STORAGE & PERIPHERALS—0.4% | | | | | |
Fusion-io, Inc.* | | 190,200 | | 3,571,956 | |
| | | | | |
CONSTRUCTION & ENGINEERING—0.7% | | | | | |
Primoris Services Corp. | | 299,300 | | 6,596,572 | |
| | | | | |
CONSTRUCTION MATERIALS—0.8% | | | | | |
Eagle Materials Inc. | | 119,450 | | 8,092,738 | |
| | | | | |
DATA PROCESSING & OUTSOURCED SERVICES—2.0% | | | | | |
EVERTEC, Inc. * | | 29,800 | | 597,490 | |
MAXIMUS, Inc. | | 128,050 | | 10,204,305 | |
WEX, Inc. * | | 108,085 | | 8,190,681 | |
| | | | 18,992,476 | |
ELECTRICAL COMPONENTS & EQUIPMENT—0.5% | | | | | |
Acuity Brands Inc. | | 69,400 | | 5,063,424 | |
| | | | | |
ELECTRONIC EQUIPMENT MANUFACTURERS—1.8% | | | | | |
Cognex Corp. | | 272,650 | | 10,824,205 | |
OSI Systems, Inc. * | | 109,800 | | 6,291,540 | |
| | | | 17,115,745 | |
ENVIRONMENTAL & FACILITIES SERVICES—1.0% | | | | | |
Tetra Tech, Inc.* | | 379,800 | | 9,984,942 | |
| | | | | |
FOOD DISTRIBUTORS—1.0% | | | | | |
United Natural Foods, Inc.* | | 187,204 | | 9,348,968 | |
| | | | | |
FOOD RETAIL—0.4% | | | | | |
Fresh Market, Inc., /The* | | 93,800 | | 3,839,234 | |
| | | | | |
FOOTWEAR—0.6% | | | | | |
Wolverine World Wide, Inc. | | 116,700 | | 5,574,759 | |
| | | | | |
FOREST PRODUCTS—0.5% | | | | | |
Boise Cascade Co.* | | 144,350 | | 4,623,530 | |
| | | | | |
HEALTH CARE EQUIPMENT—3.9% | | | | | |
HeartWare International, Inc. * | | 72,200 | | 7,017,840 | |
Insulet Corp. * | | 371,850 | | 9,385,494 | |
NxStage Medical, Inc. * | | 418,700 | | 4,676,879 | |
Thoratec Corp. * | | 129,250 | | 4,678,850 | |
Volcano Corp. * | | 289,200 | | 5,867,868 | |
Wright Medical Group, Inc. * | | 257,571 | | 6,037,464 | |
| | | | 37,664,395 | |
| | | | | | |
33
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
HEALTH CARE FACILITIES—1.8% | | | | | |
Healthsouth Corp. * | | 293,300 | | $ | 8,065,750 | |
Tenet Healthcare Corporation * | | 204,100 | | 9,257,976 | |
| | | | 17,323,726 | |
HEALTH CARE SERVICES—1.2% | | | | | |
Team Health Holdings, Inc.* | | 314,700 | | 11,732,016 | |
| | | | | |
HEALTH CARE SUPPLIES—1.6% | | | | | |
Align Technology, Inc. * | | 242,300 | | 8,024,976 | |
Endologix, Inc. * | | 493,800 | | 7,416,876 | |
| | | | 15,441,852 | |
HEALTH CARE TECHNOLOGY—1.9% | | | | | |
athenahealth, Inc. * | | 71,850 | | 6,916,281 | |
Greenway Medical Technologies * | | 342,500 | | 4,613,475 | |
HMS Holdings Corp. * | | 257,550 | | 6,492,835 | |
| | | | 18,022,591 | |
HOME FURNISHINGS—0.5% | | | | | |
Ethan Allen Interiors, Inc. | | 157,850 | | 4,621,848 | |
| | | | | |
HOMEBUILDING—0.6% | | | | | |
Taylor Morrison Home Corp., Cl. A* | | 220,300 | | 5,679,334 | |
| | | | | |
HOMEFURNISHING RETAIL—1.2% | | | | | |
Pier 1 Imports, Inc. | | 480,600 | | 11,154,726 | |
| | | | | |
HOTELS RESORTS & CRUISE LINES—1.8% | | | | | |
Interval Leisure Group | | 299,639 | | 5,711,119 | |
Marriott Vacations Worldwide Corp. * | | 247,650 | | 11,263,122 | |
| | | | 16,974,241 | |
HUMAN RESOURCE & EMPLOYMENT SERVICES—1.0% | | | | | |
On Assignment, Inc.* | | 383,750 | | 9,313,613 | |
| | | | | |
INDUSTRIAL MACHINERY—4.2% | | | | | |
Actuant Corp., Cl. A | | 375,560 | | 11,755,028 | |
Chart Industries, Inc. * | | 90,200 | | 7,649,862 | |
ExOne Co., /The * | | 200,750 | | 7,708,800 | |
Middleby Corp. * | | 58,300 | | 8,720,514 | |
RBC Bearings, Inc. * | | 95,000 | | 4,569,500 | |
| | | | 40,403,704 | |
INTERNET SOFTWARE & SERVICES—3.8% | | | | | |
Cornerstone OnDemand, Inc. * | | 305,200 | | 11,072,656 | |
DealerTrack Holdings, Inc. * | | 299,950 | | 8,353,607 | |
E2open, Inc. * | | 200,950 | | 2,855,500 | |
ExactTarget, Inc. * | | 428,200 | | 8,384,156 | |
Trulia, Inc. * | | 208,000 | | 6,044,480 | |
| | | | 36,710,399 | |
IT CONSULTING & OTHER SERVICES—0.7% | | | | | |
InterXion Holding NV* | | 256,000 | | 6,407,680 | |
| | | | | |
LEISURE FACILITIES—1.8% | | | | | |
Life Time Fitness, Inc. * | | 170,145 | | 7,857,296 | |
Six Flags Entertainment Corp. | | 132,400 | | 9,647,988 | |
| | | | 17,505,284 | |
| | | | | | |
34
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
LEISURE PRODUCTS—0.8% | | | | | |
Brunswick Corp. | | 249,300 | | $ | 7,892,838 | |
| | | | | |
LIFE SCIENCES TOOLS & SERVICES—1.1% | | | | | |
Charles River Laboratories International Inc. * | | 112,450 | | 4,890,451 | |
PAREXEL International Corp. * | | 142,492 | | 5,835,047 | |
| | | | 10,725,498 | |
MANAGED HEALTH CARE—1.1% | | | | | |
Centene Corp. * | | 112,300 | | 5,188,260 | |
Molina Healthcare, Inc. * | | 162,300 | | 5,388,360 | |
| | | | 10,576,620 | |
METAL & GLASS CONTAINERS—1.0% | | | | | |
Berry Plastics Group, Inc.* | | 505,800 | | 9,610,200 | |
| | | | | |
MOVIES & ENTERTAINMENT—1.0% | | | | | |
Lions Gate Entertainment Corp.* | | 384,550 | | 9,540,685 | |
| | | | | |
OIL & GAS EQUIPMENT & SERVICES—1.3% | | | | | |
Bristow Group, Inc. | | 96,250 | | 6,083,000 | |
Dril-Quip, Inc. * | | 73,970 | | 6,192,029 | |
| | | | 12,275,029 | |
OIL & GAS EXPLORATION & PRODUCTION—4.2% | | | | | |
Approach Resources, Inc. * | | 309,850 | | 7,349,642 | |
Berry Petroleum Co., Cl. A | | 84,140 | | 4,031,147 | |
Energy XXI Bermuda Ltd. | | 304,400 | | 6,922,056 | |
Kodiak Oil & Gas Corp. * | | 756,400 | | 5,922,612 | |
Nothern Oil and Gas, Inc. * | | 560,150 | | 7,220,334 | |
Rosetta Resources, Inc. * | | 210,300 | | 9,023,973 | |
| | | | 40,469,764 | |
PACKAGED FOODS & MEATS—2.1% | | | | | |
B&G Foods, Inc. | | 324,800 | | 10,023,328 | |
Hain Celestial Group, Inc. * | | 156,817 | | 10,232,309 | |
| | | | 20,255,637 | |
PHARMACEUTICALS—0.9% | | | | | |
Questcor Pharmaceuticals, Inc. | | 81,400 | | 2,502,236 | |
ViroPharma, Inc. * | | 213,500 | | 5,817,875 | |
| | | | 8,320,111 | |
RAILROADS—1.2% | | | | | |
Genesee & Wyoming, Inc., Cl. A* | | 133,350 | | 11,361,420 | |
| | | | | |
REAL ESTATE SERVICES—0.8% | | | | | |
Jones Lang LaSalle, Inc. | | 75,000 | | 7,426,500 | |
| | | | | |
REGIONAL BANKS—1.0% | | | | | |
Texas Capital Bancshares, Inc.* | | 222,250 | | 9,258,935 | |
| | | | | |
RESEARCH & CONSULTING SERVICES—0.8% | | | | | |
CoStar Group, Inc.* | | 74,705 | | 8,098,769 | |
| | | | | |
RESTAURANTS—2.0% | | | | | |
Buffalo Wild Wings, Inc. * | | 91,700 | | 8,253,000 | |
Domino’s Pizza, Inc. | | 205,150 | | 11,324,280 | |
| | | | 19,577,280 | |
| | | | | | |
35
| | SHARES | | VALUE | |
COMMON STOCKS—(CONT.) | | | | | |
SEMICONDUCTORS—2.4% | | | | | |
Applied Micro Circuits Corporation * | | 486,550 | | $ | 3,629,663 | |
Cypress Semiconductor Corp. | | 550,350 | | 5,553,031 | |
Freescale Semiconductor Holdings Ltd. * | | 10,500 | | 162,540 | |
Microsemi Corp. * | | 430,400 | | 8,952,320 | |
Semtech Corp. * | | 149,300 | | 4,788,051 | |
| | | | 23,085,605 | |
SPECIALIZED CONSUMER SERVICES—0.3% | | | | | |
Sotheby’s | | 78,900 | | 2,799,372 | |
| | | | | |
SPECIALTY CHEMICALS—2.9% | | | | | |
Chemtura Corp. * | | 460,750 | | 9,795,545 | |
Cytec Industries, Inc. | | 146,900 | | 10,703,134 | |
PolyOne Corp. | | 323,850 | | 7,296,340 | |
| | | | 27,795,019 | |
SPECIALTY STORES—1.9% | | | | | |
Five Below, Inc. | | 268,940 | | 9,679,151 | |
Vitamin Shoppe, Inc. * | | 169,950 | | 8,353,042 | |
| | | | 18,032,193 | |
SYSTEMS SOFTWARE—2.1% | | | | | |
CommVault Systems, Inc. * | | 128,750 | | 9,468,275 | |
Infoblox, Inc. * | | 256,150 | | 5,663,477 | |
Sourcefire, Inc. * | | 108,150 | | 5,165,244 | |
| | | | 20,296,996 | |
THRIFTS & MORTGAGE FINANCE—0.6% | | | | | |
Northwest Bancshares, Inc. | | 449,650 | | 5,508,213 | |
| | | | | |
TRADING COMPANIES & DISTRIBUTORS—0.9% | | | | | |
Beacon Roofing Supply, Inc.* | | 237,700 | | 9,063,501 | |
| | | | | |
TRUCKING—1.0% | | | | | |
Avis Budget Group, Inc.* | | 329,000 | | 9,488,360 | |
| | | | | |
TOTAL COMMON STOCKS
(Cost $724,845,590) | | | | 900,248,315 | |
| | | | | |
MASTER LIMITED PARTNERSHIP —0.7% | | | | | |
ASSET MANAGEMENT & CUSTODY BANKS—0.7% | | | | | |
Fortress Investment Group LLC, Cl. A | | 1,115,162 | | 7,181,643 | |
| | | | | |
TOTAL MASTER LIMITED PARTNERSHIP
(Cost $5,810,138) | | | | 7,181,643 | |
| | | | | |
REAL ESTATE INVESTMENT TRUST—3.5% | | | | | |
MORTGAGE—1.4% | | | | | |
American Capital Mortgage Investment Corp. | | 217,100 | | 5,766,176 | |
Two Harbors Investment Corp. | | 658,000 | | 7,882,840 | |
| | | | 13,649,016 | |
RESIDENTIAL—1.3% | | | | | |
American Homes 4 Rent *(L2)(a) | | 312,150 | | 5,571,878 | |
Silver Bay Realty Trust Corp. | | 360,727 | | 6,882,671 | |
| | | | 12,454,549 | |
| | | | | | |
36
| | SHARES | | VALUE | |
REAL ESTATE INVESTMENT TRUST—(CONT.) | | | | | |
SPECIALIZED—0.8% | | | | | |
Ryman Hospitality Properties | | 172,265 | | $ | 7,658,902 | |
| | | | | |
TOTAL REAL ESTATE INVESTMENT TRUST
(Cost $30,261,071) | | | | 33,762,467 | |
| | | | | |
Total Investments
(Cost $760,916,799)(b) | | 98.2 | % | 941,192,425 | |
Other Assets in Excess of Liabilities | | 1.8 | | 17,370,912 | |
NET ASSETS | | 100.0 | % | $ | 958,563,337 | |
‡ Securities classified as Level 1 for ASC 820 disclosure purposes based on valuation inputs unless otherwise noted.
* Non-income producing security.
(a) Pursuant to Securities and Exchange Commission Rule 144A, these securities may be sold prior to their maturity only to qualified institutional buyers. These securities are deemed to be liquid and represent 0.6% of the net assets of the Fund.
(b) At April 30, 2013, the net unrealized appreciation on investments, based on cost for federal income tax purposes of $760,916,799, amounted to $180,275,626 which consisted of aggregate gross unrealized appreciation of $203,459,011 and aggregate gross unrealized depreciation of $23,183,385.
(L2) Security classified as Level 2 for ASC 820 disclosure purposes based on valuation inputs.
See Notes to Financial Statements.
37
THE ALGER INSTITUTIONAL FUNDS
Statements of Assets and Liabilities (Unaudited) April 30, 2013
| | Alger Capital
Appreciation
Institutional Fund | | Alger Capital
Appreciation
Focus Fund | |
ASSETS: | | | | | |
Investments in securities, at value (identified cost below*) see accompanying schedules of investments | | $ | 2,058,609,780 | | $ | 13,671,401 | |
Cash and cash equivalents# | | 16,731,373 | | 980,681 | |
Receivable for investment securities sold | | 25,857,919 | | 193,249 | |
Receivable for shares of beneficial interest sold | | 3,418,048 | | 20,623 | |
Dividends and interest receivable | | 1,589,184 | | 11,122 | |
Receivable from Investment Manager | | — | | 11,013 | |
Prepaid expenses | | 114,273 | | 71,327 | |
Total Assets | | 2,106,320,577 | | 14,959,416 | |
LIABILITIES: | | | | | |
Payable for investment securities purchased | | 25,393,601 | | 143,450 | |
Payable for shares of beneficial interest redeemed | | 1,744,626 | | 3,934 | |
Accrued investment advisory fees | | 1,491,924 | | 9,297 | |
Accrued transfer agent fees | | 440,232 | | 11,684 | |
Accrued distribution fees | | 172,869 | | 2,947 | |
Accrued administrative fees | | 50,881 | | 360 | |
Accrued shareholder servicing fees | | 481,053 | | 2,961 | |
Accrued other expenses | | 163,548 | | 34,818 | |
Total Liabilities | | 29,938,734 | | 209,451 | |
NET ASSETS | | $ | 2,076,381,843 | | $ | 14,749,965 | |
Net Assets Consist of: | | | | | |
Paid in capital (par value of $.001 per share) | | 1,720,211,134 | | 21,132,133 | |
Undistributed net investment income (accumulated loss) | | 792,198 | | (4,053 | ) |
Undistributed net realized gain (accumulated realized loss) | | 91,192,225 | | (7,329,515 | ) |
Net unrealized appreciation on investments | | 264,186,286 | | 951,400 | |
NET ASSETS | | $ | 2,076,381,843 | | $ | 14,749,965 | |
*Identified cost | | $ | 1,794,423,493 | | $ | 12,720,001 | |
**Written options premiums received | | $ | — | | $ | — | |
See Notes to Financial Statements.
38
| | Alger Mid Cap
Growth
Institutional Fund | | Alger Small Cap
Growth
Institutional Fund | |
ASSETS: | | | | | |
Investments in securities, at value (identified cost below*) see accompanying schedules of investments | | $ | 182,596,432 | | $ | 941,192,425 | |
Cash and cash equivalents# | | 6,629,495 | | 11,843,768 | |
Receivable for investment securities sold | | 5,109,126 | | 12,521,762 | |
Receivable for shares of beneficial interest sold | | 357,229 | | 1,328,054 | |
Dividends and interest receivable | | 35,592 | | 190,221 | |
Prepaid expenses | | 24,316 | | 102,645 | |
Total Assets | | 194,752,190 | | 967,178,875 | |
LIABILITIES: | | | | | |
Payable for investment securities purchased | | 5,964,169 | | 4,876,869 | |
Written options outstanding** | | 383,391 | | — | |
Payable for shares of beneficial interest redeemed | | 358,503 | | 2,206,547 | |
Accrued investment advisory fees | | 126,911 | | 699,414 | |
Accrued transfer agent fees | | 135,423 | | 346,166 | |
Accrued distribution fees | | 11,428 | | 18,388 | |
Accrued administrative fees | | 4,592 | | 23,746 | |
Accrued shareholder servicing fees | | 43,417 | | 224,503 | |
Accrued other expenses | | 83,841 | | 219,905 | |
Total Liabilities | | 7,111,675 | | 8,615,538 | |
NET ASSETS | | $ | 187,640,515 | | $ | 958,563,337 | |
Net Assets Consist of: | | | | | |
Paid in capital (par value of $.001 per share) | | 514,828,652 | | 729,315,651 | |
Undistributed net investment income (accumulated loss) | | (412,114 | ) | (7,171,234 | ) |
Undistributed net realized gain (accumulated realized loss) | | (340,896,937 | ) | 56,143,294 | |
Net unrealized appreciation on investments | | 14,120,914 | | 180,275,626 | |
NET ASSETS | | $ | 187,640,515 | | $ | 958,563,337 | |
*Identified cost | | $ | 168,497,668 | | $ | 760,916,799 | |
**Written options premiums received | | $ | 405,541 | | $ | — | |
# Alger Mid Cap Growth Institutional Fund includes cash of $994,330 held as collateral for written options.
See Notes to Financial Statements.
39
| | Alger Capital
Appreciation
Institutional Fund | | Alger Capital
Appreciation
Focus Fund | |
NET ASSETS BY CLASS | | | | | |
Class A | | $ | — | | $ | 1,244,908 | |
Class C | | $ | — | | $ | 1,430,209 | |
Class I | | $ | 1,689,800,471 | | $ | 8,446,084 | |
Class R | | $ | 386,581,372 | | $ | 3,519,933 | |
Class Z | | $ | — | | $ | 108,831 | |
SHARES OF BENEFICIAL INTEREST OUTSTANDING— NOTE 6 | | | | | |
Class A | | — | | 77,902 | |
Class C | | — | | 89,722 | |
Class I | | 69,106,349 | | 528,253 | |
Class R | | 16,706,397 | | 231,255 | |
Class Z | | — | | 6,803 | |
| | | | | |
NET ASSET VALUE AND OFFERING PRICE PER SHARE | | | | | |
Class A — Net Asset Value Per Share | | — | | $ | 15.98 | |
Class A — Offering Price Per Share (includes 5.25% sales charge) | | — | | $ | 16.87 | |
Class C — Net Asset Value Per Share | | — | | $ | 15.94 | |
Class I — Net Asset Value Per Share | | $ | 24.45 | | $ | 15.99 | |
Class R — Net Asset Value Per Share | | $ | 23.14 | | $ | 15.22 | |
Class Z — Net Asset Value Per Share | | — | | $ | 16.00 | |
See Notes to Financial Statements.
40
| | Alger Mid Cap
Growth
Institutional Fund | | Alger Small Cap
Growth
Institutional Fund | |
NET ASSETS BY CLASS | | | | | |
Class I | | $ | 162,458,679 | | $ | 918,108,688 | |
Class R | | $ | 25,181,836 | | $ | 40,454,649 | |
SHARES OF BENEFICIAL INTEREST OUTSTANDING— NOTE 6 | | | | | |
Class I | | 9,536,013 | | 32,196,574 | |
Class R | | 1,568,977 | | 1,500,951 | |
| | | | | |
NET ASSET VALUE AND OFFERING PRICE PER SHARE | | | | | |
Class I — Net Asset Value Per Share | | $ | 17.04 | | $ | 28.52 | |
Class R — Net Asset Value Per Share | | $ | 16.05 | | $ | 26.95 | |
See Notes to Financial Statements.
41
THE ALGER INSTITUTIONAL FUNDS
Statements of Operations (Unaudited)
For the six months ended April 30, 2013
| | Alger Capital
Appreciation
Institutional Fund | | Alger Capital
Appreciation
Focus Fund | |
INCOME | | | | | |
Dividends (net of foreign withholding taxes below*) | | $ | 23,141,372 | | $ | 219,445 | |
Interest | | 27,713 | | 1,950 | |
Total Income | | 23,169,085 | | 221,395 | |
EXPENSES | | | | | |
Advisory fees—Note 3(a) | | 7,817,920 | | 52,085 | |
Distribution fees—Note3(c): | | | | | |
Class A | | — | | 544 | |
Class C | | — | | 2,934 | |
Class R | | 912,550 | | 9,386 | |
Shareholder servicing fees—Note 3(f) | | 2,513,896 | | 17,745 | |
Administrative fees—Note 3(b) | | 265,893 | | 2,017 | |
Custodian fees | | 61,736 | | 12,795 | |
Interest expenses | | — | | 2,507 | |
Transfer agent fees and expenses—Note 3(e) | | 588,448 | | 16,445 | |
Printing fees | | 53,617 | | 3,025 | |
Professional fees | | 55,229 | | 17,487 | |
Registration fees | | 41,650 | | 33,294 | |
Trustee fees—Note 3(g) | | 11,296 | | 9,815 | |
Miscellaneous | | 199,828 | | 14,402 | |
Total Expenses | | 12,522,063 | | 194,481 | |
Less, expense reimbursements Note 3(a) | | — | | (52,278 | ) |
Net Expenses | | 12,522,063 | | 142,203 | |
NET INVESTMENT INCOME | | 10,647,022 | | 79,192 | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS AND FOREIGN CURRENCY | | | | | |
Net realized gain on investments and purchased options | | 120,805,087 | | 1,578,933 | |
Net realized loss on foreign currency transactions | | — | | (72 | ) |
Net change in unrealized appreciation (depreciation) on investments, options and foreign currency | | 85,545,568 | | (303,510 | ) |
Net realized and unrealized gain on investments, options and foreign currency | | 206,350,655 | | 1,275,351 | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 216,997,677 | | $ | 1,354,543 | |
*Foreign withholding taxes | | $ | 112,996 | | $ | 233 | |
See Notes to Financial Statements.
42
| | Alger Mid Cap
Growth
Institutional Fund | | Alger Small Cap
Growth
Institutional Fund | |
INCOME | | | | | |
Dividends (net of foreign withholding taxes below*) | | $ | 1,055,691 | | $ | 5,373,893 | |
Interest | | 180 | | 2,163 | |
Total Income | | 1,055,871 | | 5,376,056 | |
EXPENSES | | | | | |
Advisory fees—Note 3(a) | | 728,831 | | 3,867,351 | |
Distribution fees—Note3(c): | | | | | |
Class R | | 64,008 | | 109,048 | |
Shareholder servicing fees—Note 3(f) | | 249,337 | | 1,241,386 | |
Administrative fees—Note 3(b) | | 26,372 | | 131,300 | |
Custodian fees | | 49,691 | | 37,820 | |
Interest expenses | | 12,853 | | 236 | |
Transfer agent fees and expenses—Note 3(e) | | 107,893 | | 409,979 | |
Printing fees | | 13,315 | | 104,300 | |
Professional fees | | 25,786 | | 38,365 | |
Registration fees | | 6,696 | | 43,592 | |
Trustee fees—Note 3(g) | | 10,030 | | 10,735 | |
Miscellaneous | | 34,802 | | 121,238 | |
Total Expenses | | 1,329,614 | | 6,115,350 | |
NET INVESTMENT LOSS | | (273,743 | ) | (739,294 | ) |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, OPTIONS AND FOREIGN CURRENCY | | | | | |
Net realized gain on investments and purchased options | | 9,678,126 | | 60,371,470 | |
Net realized gain on foreign currency transactions | | 761 | | — | |
Net realized gain on options written | | 1,407,472 | | — | |
Net change in unrealized appreciation (depreciation) on investments, options and foreign currency | | 19,715,168 | | 63,872,884 | |
Net change in unrealized appreciation (depreciation) on written options | | (16,327 | ) | — | |
Net realized and unrealized gain on investments, options and foreign currency | | 30,785,200 | | 124,244,354 | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 30,511,457 | | $ | 123,505,060 | |
*Foreign withholding taxes | | $ | 399 | | $ | — | |
See Notes to Financial Statements.
43
THE ALGER INSTITUTIONAL FUNDS
Statements of Changes in Net Assets
| | Alger Capital Appreciation Institutional
Fund | |
| | For the
Six Months Ended
April 30, 2013
(Unaudited) | | For the
Year Ended
October 31, 2012 | |
Net investment income (loss) | | $ | 10,647,022 | | $ | 4,960,839 | |
Net realized gain (loss) on investments, options and foreign currency | | 120,805,087 | | 64,705,558 | |
Net change in unrealized appreciation (depreciation) on investments, options and foreign currency | | 85,545,568 | | 117,513,584 | |
Net increase in net assets resulting from operations | | 216,997,677 | | 187,179,981 | |
Dividends and distributions to shareholders from: | | | | | |
Net investment income | | | | | |
Class I | | (10,993,807 | ) | — | |
Class R | | (3,172,074 | ) | — | |
Net realized gains | | | | | |
Class I | | (54,567,375 | ) | (38,935,171 | ) |
Class R | | (13,535,145 | ) | (8,986,963 | ) |
Total dividends and distributions to shareholders | | (82,268,401 | ) | (47,922,134 | ) |
Increase (decrease) from shares of beneficial interest transactions: | | | | | |
Class A | | — | | — | |
Class C | | — | | — | |
Class I | | 108,433,980 | | 314,532,855 | |
Class R | | 15,506,635 | | 95,051,832 | |
Class Z | | — | | — | |
Net increase (decrease) from shares of beneficial interest transactions—Note 6 | | 123,940,615 | | 409,584,687 | |
Total increase (decrease) | | 258,669,891 | | 548,842,534 | |
Net Assets: | | | | | |
Beginning of period | | 1,817,711,952 | | 1,268,869,418 | |
END OF PERIOD | | $ | 2,076,381,843 | | $ | 1,817,711,952 | |
Undistributed net investment income (accumulated loss) | | $ | 792,198 | | $ | 4,311,055 | |
See Notes to Financial Statements.
44
| | Alger Capital Appreciation Focus Fund | | Alger Mid Cap Growth Institutional
Fund | | Alger Small Cap Growth Institutional
Fund | |
| | For the
Six Months Ended
April 30, 2013
(Unaudited) | | For the
Year Ended
October 31, 2012 | | For the
Six Months Ended
April 30, 2013
(Unaudited) | | For the
Year Ended
October 31, 2012 | | For the
Six Months Ended
April 30, 2013
(Unaudited) | | For the
Year Ended
October 31, 2012 | |
Net investment income (loss) | | $ | 79,192 | | $ | (79,403 | ) | $ | (273,743 | ) | $ | (112,225 | ) | $ | (739,294 | ) | $ | (6,363,954 | ) |
Net realized gain (loss) on investments, options and foreign currency | | 1,578,861 | | 831,835 | | 11,086,359 | | (5,738,593 | ) | 60,371,470 | | 101,643,899 | |
Net change in unrealized appreciation (depreciation) on investments, options and foreign currency | | (303,510 | ) | 318,357 | | 19,698,841 | | 29,930,168 | | 63,872,884 | | 6,084,704 | |
Net increase in net assets resulting from operations | | 1,354,543 | | 1,070,789 | | 30,511,457 | | 24,079,350 | | 123,505,060 | | 101,364,649 | |
Dividends and distributions to shareholders from: | | | | | | | | | | | | | |
Net investment income | | | | | | | | | | | | | |
Class I | | — | | — | | (435,722 | ) | — | | — | | — | |
Class R | | — | | — | | (121,588 | ) | — | | — | | — | |
Net realized gains | | | | | | | | | | | | | |
Class I | | — | | — | | — | | — | | (101,340,447 | ) | (45,919,886 | ) |
Class R | | — | | — | | — | | — | | (5,308,914 | ) | (2,661,491 | ) |
Total dividends and distributions to shareholders | | — | | — | | (557,310 | ) | — | | (106,649,361 | ) | (48,581,377 | ) |
Increase (decrease) from shares of beneficial interest transactions: | | | | | | | | | | | | | |
Class A | | 1,212,426 | | — | | — | | — | | — | | — | |
Class C | | 1,379,274 | | — | | — | | — | | — | | — | |
Class I | | (7,594,380 | ) | (1,983,255 | ) | (45,702,079 | ) | (157,521,243 | ) | (27,677,964 | ) | (241,363,028 | ) |
Class R | | (909,540 | ) | (1,678,476 | ) | (5,359,289 | ) | (10,498,008 | ) | (7,358,548 | ) | (16,853,179 | ) |
Class Z | | 100,000 | | — | | — | | — | | — | | — | |
Net increase (decrease) from shares of beneficial interest transactions—Note 6 | | (5,812,220 | ) | (3,661,731 | ) | (51,061,368 | ) | (168,019,251 | ) | (35,036,512 | ) | (258,216,207 | ) |
Total increase (decrease) | | (4,457,677 | ) | (2,590,942 | ) | (21,107,221 | ) | (143,939,901 | ) | (18,180,813 | ) | (205,432,935 | ) |
Net Assets: | | | | | | | | | | | | | |
Beginning of period | | 19,207,642 | | 21,798,584 | | 208,747,736 | | 352,687,637 | | 976,744,150 | | 1,182,177,085 | |
END OF PERIOD | | $ | 14,749,965 | | $ | 19,207,642 | | $ | 187,640,515 | | $ | 208,747,736 | | $ | 958,563,337 | | $ | 976,744,150 | |
Undistributed net investment income (accumulated loss) | | $ | (4,053 | ) | $ | (83,245 | ) | $ | (412,114 | ) | $ | 418,939 | | $ | (7,171,234 | ) | $ | (4,854,341 | ) |
45
THE ALGER INSTITUTIONAL FUNDS
Financial Highlights for a share outstanding throughout the period
Alger Capital Appreciation Institutional Fund
| | Class I | |
| | Six months
ended
4/30/2013(i) | | Year ended
10/31/2012 | | Year ended
10/31/2011 | | Year ended
10/31/2010 | | Year ended
10/31/2009 | | Year ended
10/31/2008 | |
Net asset value, beginning of period | | $ | 22.85 | | $ | 20.88 | | $ | 19.28 | | $ | 16.41 | | $ | 13.23 | | $ | 22.27 | |
INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | |
Net investment income (loss)(ii) | | 0.14 | | 0.09 | | (0.01 | ) | 0.00 | | 0.04 | | (0.04 | ) |
Net realized and unrealized gain (loss) on investments | | 2.47 | | 2.64 | | 1.61 | | 2.90 | | 3.14 | | (9.00 | ) |
Total from investment operations | | 2.61 | | 2.73 | | 1.60 | | 2.90 | | 3.18 | | (9.04 | ) |
Dividends from net investment income | | (0.17 | ) | — | | — | | (0.03 | ) | — | | — | |
Distributions from net realized gains | | (0.84 | ) | (0.76 | ) | — | | — | | — | | — | |
Net asset value, end of period | | $ | 24.45 | | $ | 22.85 | | $ | 20.88 | | $ | 19.28 | | $ | 16.41 | | $ | 13.23 | |
Total return | | 11.8 | % | 13.7 | % | 8.3 | % | 17.7 | % | 23.9 | % | (40.6 | )% |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | |
Net assets, end of period (000’s omitted) | | $ | 1,689,801 | | $ | 1,470,078 | | $ | 1,041,609 | | $ | 809,468 | | $ | 632,250 | | $ | 411,056 | |
Ratio of gross expenses to average net assets | | 1.20 | % | 1.19 | % | 1.17 | % | 1.17 | % | 1.21 | % | 1.18 | % |
Ratio of expense reimbursements to average net assets | | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
Ratio of net expenses to average net assets | | 1.20 | % | 1.19 | % | 1.17 | % | 1.17 | % | 1.21 | % | 1.18 | % |
Ratio of net investment income (loss) to average net assets | | 1.19 | % | 0.41 | % | (0.04 | )% | (0.02 | )% | 0.32 | % | (0.21 | )% |
Portfolio turnover rate | | 64.25 | % | 137.16 | % | 153.30 | % | 209.52 | % | 306.87 | % | 291.85 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
46
| | Class R | |
| | Six months
ended
4/30/2013(i) | | Year ended
10/31/2012 | | Year ended
10/31/2011 | | Year ended
10/31/2010 | | Year ended
10/31/2009 | | Year ended
10/31/2008 | |
Net asset value, beginning of period | | $ | 21.76 | | $ | 20.01 | | $ | 18.57 | | $ | 15.86 | | $ | 12.85 | | $ | 21.75 | |
INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | |
Net investment income (loss)(ii) | | 0.08 | | (0.02 | ) | (0.11 | ) | (0.10 | ) | (0.02 | ) | (0.13 | ) |
Net realized and unrealized gain (loss) on investments | | 2.34 | | 2.53 | | 1.55 | | 2.81 | | 3.03 | | (8.77 | ) |
Total from investment operations | | 2.42 | | 2.51 | | 1.44 | | 2.71 | | 3.01 | | (8.90 | ) |
Dividends from net investment income | | (0.20 | ) | — | | — | | — | | — | | — | |
Distributions from net realized gains | | (0.84 | ) | (0.76 | ) | — | | — | | — | | — | |
Net asset value, end of period | | $ | 23.14 | | $ | 21.76 | | $ | 20.01 | | $ | 18.57 | | $ | 15.86 | | $ | 12.85 | |
Total return | | 11.5 | % | 13.2 | % | 7.8 | % | 17.1 | % | 23.3 | % | (40.9 | )% |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | |
Net assets, end of period (000’s omitted) | | $ | 386,581 | | $ | 347,634 | | $ | 227,260 | | $ | 171,344 | | $ | 89,676 | | $ | 53,557 | |
Ratio of gross expenses to average net assets | | 1.70 | % | 1.69 | % | 1.68 | % | 1.67 | % | 1.71 | % | 1.68 | % |
Ratio of expense reimbursements to average net assets | | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
Ratio of net expenses to average net assets | | 1.70 | % | 1.69 | % | 1.68 | % | 1.67 | % | 1.71 | % | 1.68 | % |
Ratio of net investment income (loss) to average net assets | | 0.71 | % | (0.09 | )% | (0.56 | )% | (0.55 | )% | (0.18 | )% | (0.70 | )% |
Portfolio turnover rate | | 64.25 | % | 137.16 | % | 153.30 | % | 209.52 | % | 306.87 | % | 291.85 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
47
Alger Capital Appreciation Focus Fund
| | Class A | | Class C | |
| | From
12/31/2012
(commencement
of
operations) to
4/30/2013(i) | | From
12/31/2012
(commencement
of
operations) to
4/30/2013(i) | |
Net asset value, beginning of period | | $ | 14.70 | | $ | 14.70 | |
INCOME FROM INVESTMENT OPERATIONS: | | | | | |
Net investment loss(ii) | | 0.00 | | (0.04 | ) |
Net realized and unrealized gain (loss) on investments | | 1.28 | | 1.28 | |
Total from investment operations | | 1.28 | | 1.24 | |
Net asset value, end of period | | $ | 15.98 | | $ | 15.94 | |
Total return | | 8.7 | % | 8.4 | % |
RATIOS/SUPPLEMENTAL DATA: | | | | | |
Net assets, end of period (000’s omitted) | | $ | 1,245 | | $ | 1,430 | |
Ratio of gross expenses to average net assets | | 3.25 | % | 3.85 | % |
Ratio of expense reimbursements to average net assets | | (1.93 | )% | (1.77 | )% |
Ratio of net expenses to average net assets | | 1.32 | % | 2.08 | % |
Ratio of net investment income (loss) to average net assets | | (0.08 | )% | (0.79 | )% |
Portfolio turnover rate | | 100.24 | % | 100.24 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized. Portfolio turnover is calculated for the six months ended April 30, 2013.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
48
| | Class I | |
| | Six months
ended
4/30/2013(i) | | Year ended
10/31/2012 | | Year ended
10/31/2011 | | Year ended
10/31/2010 | | Year ended
10/31/2009 | | Year ended
10/31/2008 | |
Net asset value, beginning of period | | $ | 14.53 | | $ | 13.75 | | $ | 13.03 | | $ | 11.17 | | $ | 9.48 | | $ | 16.87 | |
INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | |
Net investment income (loss)(ii) | | 0.13 | | (0.03 | ) | (0.04 | ) | 0.07 | | 0.04 | | (0.01 | ) |
Net realized and unrealized gain (loss) on investments | | 1.33 | | 0.81 | | 0.86 | | 1.83 | | 1.65 | | (7.38 | ) |
Total from investment operations | | 1.46 | | 0.78 | | 0.82 | | 1.90 | | 1.69 | | (7.39 | ) |
Dividends from net investment income | | — | | — | | (0.10 | ) | (0.04 | ) | — | | — | |
Net asset value, end of period | | $ | 15.99 | | $ | 14.53 | | $ | 13.75 | | $ | 13.03 | | $ | 11.17 | | $ | 9.48 | |
Total return | | 10.0 | % | 5.7 | % | 6.3 | % | 17.1 | % | 17.7 | % | (43.8 | )% |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | |
Net assets, end of period (000’s omitted) | | $ | 8,446 | | $ | 15,101 | | $ | 16,294 | | $ | 22,961 | | $ | 39,412 | | $ | 20,415 | |
Ratio of gross expenses to average net assets | | 2.34 | % | 1.83 | % | 1.69 | % | 1.36 | % | 1.37 | % | 1.23 | % |
Ratio of expense reimbursements to average net assets | | (0.78 | )% | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
Ratio of net expenses to average net assets | | 1.56 | % | 1.83 | % | 1.69 | % | 1.36 | % | 1.37 | % | 1.23 | % |
Ratio of net investment income (loss) to average net assets | | 1.70 | % | (0.22 | )% | (0.27 | )% | 0.56 | % | 0.46 | % | 0.04 | % |
Portfolio turnover rate | | 100.24 | % | 153.72 | % | 57.74 | % | 58.73 | % | 87.57 | % | 187.80 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
49
| | Class R | |
| | Six months
ended
4/30/2013(i) | | Year ended
10/31/2012 | | Year ended
10/31/2011 | | Year ended
10/31/2010 | | Year ended
10/31/2009 | | Year ended
10/31/2008 | |
Net asset value, beginning of period | | $ | 13.94 | | $ | 13.28 | | $ | 12.59 | | $ | 10.83 | | $ | 9.24 | | $ | 16.52 | |
INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | |
Net investment loss(ii) | | (0.01 | ) | (0.13 | ) | (0.13 | ) | (0.02 | ) | 0.00 | | (0.08 | ) |
Net realized and unrealized gain (loss) on investments | | 1.29 | | 0.79 | | 0.84 | | 1.78 | | 1.59 | | (7.20 | ) |
Total from investment operations | | 1.28 | | 0.66 | | 0.71 | | 1.76 | | 1.59 | | (7.28 | ) |
Dividends from net investment income | | — | | — | | (0.02 | ) | — | | — | | — | |
Net asset value, end of period | | $ | 15.22 | | $ | 13.94 | | $ | 13.28 | | $ | 12.59 | | $ | 10.83 | | $ | 9.24 | |
Total return | | 9.2 | % | 5.0 | % | 5.7 | % | 16.3 | % | 17.2 | % | (44.1 | )% |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | |
Net assets, end of period (000’s omitted) | | $ | 3,520 | | $ | 4,107 | | $ | 5,505 | | $ | 6,110 | | $ | 5,933 | | $ | 5,112 | |
Ratio of gross expenses to average net assets | | 3.00 | % | 2.53 | % | 2.40 | % | 2.05 | % | 1.89 | % | 1.73 | % |
Ratio of expense reimbursements to average net assets | | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
Ratio of net expenses to average net assets | | 3.00 | % | 2.53 | % | 2.40 | % | 2.05 | % | 1.89 | % | 1.73 | % |
Ratio of net investment income (loss) to average net assets | | (0.10 | )% | (0.91 | )% | (0.99 | )% | (0.16 | )% | (0.03 | )% | (0.55 | )% |
Portfolio turnover rate | | 100.24 | % | 153.72 | % | 57.74 | % | 58.73 | % | 87.57 | % | 187.80 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
50
| | Class Z | |
| | From
12/31/2012
(commencement
of
operations) to
4/30/2013(i) | |
Net asset value, beginning of period | | $ | 14.70 | |
INCOME FROM INVESTMENT OPERATIONS: | | | |
Net investment income(ii) | | 0.02 | |
Net realized and unrealized gain (loss) on investments | | 1.28 | |
Total from investment operations | | 1.30 | |
Net asset value, end of period | | $ | 16.00 | |
Total return | | 8.8 | % |
RATIOS/SUPPLEMENTAL DATA: | | | |
Net assets, end of period (000’s omitted) | | $ | 109 | |
Ratio of gross expenses to average net assets | | 13.69 | % |
Ratio of expense reimbursements to average net assets | | (12.80 | )% |
Ratio of net expenses to average net assets | | 0.89 | % |
Ratio of net investment income (loss) to average net assets | | 0.33 | % |
Portfolio turnover rate | | 100.24 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized. Portfolio turnover is calculated for the six months ended April 30, 2013.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
51
Alger Mid Cap Growth Institutional Fund
| | Class I | |
| | Six months
ended
4/30/2013(i) | | Year ended
10/31/2012 | | Year ended
10/31/2011 | | Year ended
10/31/2010 | | Year ended
10/31/2009 | | Year ended
10/31/2008 | |
Net asset value, beginning of period | | $ | 14.59 | | $ | 13.50 | | $ | 13.11 | | $ | 10.68 | | $ | 8.76 | | $ | 23.24 | |
INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | |
Net investment income (loss)(ii) | | (0.02 | ) | 0.00 | | (0.10 | ) | 0.01 | | (0.04 | ) | (0.09 | ) |
Net realized and unrealized gain (loss) on investments | | 2.51 | | 1.09 | | 0.52 | | 2.42 | | 1.96 | | (10.85 | ) |
Total from investment operations | | 2.49 | | 1.09 | | 0.42 | | 2.43 | | 1.92 | | (10.94 | ) |
Dividends from net investment income | | (0.04 | ) | — | | (0.03 | ) | — | | — | | — | |
Distributions from net realized gains | | — | | — | | — | | — | | — | | (3.54 | ) |
Net asset value, end of period | | $ | 17.04 | | $ | 14.59 | | $ | 13.50 | | $ | 13.11 | | $ | 10.68 | | $ | 8.76 | |
Total return | | 17.0 | % | 8.1 | % | 3.3 | % | 22.8 | % | 21.8 | % | (55.0 | )% |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | |
Net assets, end of period (000’s omitted) | | $ | 162,459 | | $ | 182,087 | | $ | 317,893 | | $ | 737,099 | | $ | 872,936 | | $ | 882,046 | |
Ratio of gross expenses to average net assets | | 1.32 | % | 1.23 | % | 1.18 | % | 1.12 | % | 1.17 | % | 1.11 | % |
Ratio of expense reimbursements to average net assets | | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
Ratio of net expenses to average net assets | | 1.32 | % | 1.23 | % | 1.18 | % | 1.12 | % | 1.17 | % | 1.11 | % |
Ratio of net investment income (loss) to average net assets | | (0.22 | )% | 0.02 | % | (0.69 | )% | 0.07 | % | (0.44 | )% | (0.56 | )% |
Portfolio turnover rate | | 82.62 | % | 232.99 | % | 233.50 | % | 193.69 | % | 297.99 | % | 324.49 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
52
| | Class R | |
| | Six months
ended
4/30/2013(i) | | Year ended
10/31/2012 | | Year ended
10/31/2011 | | Year ended
10/31/2010 | | Year ended
10/31/2009 | | Year ended
10/31/2008 | |
Net asset value, beginning of period | | $ | 13.81 | | $ | 12.85 | | $ | 12.51 | | $ | 10.24 | | $ | 8.45 | | $ | 22.64 | |
INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | |
Net investment loss(ii) | | (0.05 | ) | (0.07 | ) | (0.17 | ) | (0.05 | ) | (0.08 | ) | (0.16 | ) |
Net realized and unrealized gain (loss) on investments | | 2.36 | | 1.03 | | 0.51 | | 2.32 | | 1.87 | | (10.49 | ) |
Total from investment operations | | 2.31 | | 0.96 | | 0.34 | | 2.27 | | 1.79 | | (10.65 | ) |
Dividends from net investment income | | (0.07 | ) | — | | — | | — | | — | | — | |
Distributions from net realized gains | | — | | — | | — | | — | | — | | (3.54 | ) |
Net asset value, end of period | | $ | 16.05 | | $ | 13.81 | | $ | 12.85 | | $ | 12.51 | | $ | 10.24 | | $ | 8.45 | |
Total return | | 16.8 | % | 7.5 | % | 2.7 | % | 22.2 | % | 21.0 | % | (55.3 | )% |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | |
Net assets, end of period (000’s omitted) | | $ | 25,182 | | $ | 26,661 | | $ | 34,795 | | $ | 50,016 | | $ | 50,919 | | $ | 40,374 | |
Ratio of gross expenses to average net assets | | 1.79 | % | 1.76 | % | 1.74 | % | 1.65 | % | 1.68 | % | 1.61 | % |
Ratio of expense reimbursements to average net assets | | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
Ratio of net expenses to average net assets | | 1.79 | % | 1.76 | % | 1.74 | % | 1.65 | % | 1.68 | % | 1.61 | % |
Ratio of net investment income (loss) to average net assets | | (0.70 | )% | (0.50 | )% | (1.24 | )% | (0.46 | )% | (0.96 | )% | (1.05 | )% |
Portfolio turnover rate | | 82.62 | % | 232.99 | % | 233.50 | % | 193.69 | % | 297.99 | % | 324.49 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
53
Alger Small Cap Growth Institutional Fund
| | Class I | |
| | Six months
ended
4/30/2013(i) | | Year ended
10/31/2012 | | Year ended
10/31/2011 | | Year ended
10/31/2010 | | Year ended
10/31/2009 | | Year ended
10/31/2008 | |
Net asset value, beginning of period | | $ | 28.16 | | $ | 26.99 | | $ | 25.28 | | $ | 19.90 | | $ | 16.52 | | $ | 30.30 | |
INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | |
Net investment loss(ii) | | (0.02 | ) | (0.15 | ) | (0.26 | ) | (0.22 | ) | (0.16 | ) | (0.23 | ) |
Net realized and unrealized gain (loss) on investments | | 3.61 | | 2.45 | | 1.97 | | 5.60 | | 3.54 | | (13.55 | ) |
Total from investment operations | | 3.59 | | 2.30 | | 1.71 | | 5.38 | | 3.38 | | (13.78 | ) |
Distributions from net realized gains | | (3.23 | ) | (1.13 | ) | — | | — | | — | | — | |
Net asset value, end of period | | $ | 28.52 | | $ | 28.16 | | $ | 26.99 | | $ | 25.28 | | $ | 19.90 | | $ | 16.52 | |
Total return | | 13.9 | % | 8.9 | % | 6.8 | % | 27.0 | % | 20.5 | % | (45.5 | )% |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | |
Net assets, end of period (000’s omitted) | | $ | 918,109 | | $ | 929,237 | | $ | 1,119,966 | | $ | 1,104,866 | | $ | 968,776 | | $ | 634,542 | |
Ratio of gross expenses to average net assets | | 1.26 | % | 1.23 | % | 1.18 | % | 1.23 | % | 1.32 | % | 1.27 | % |
Ratio of expense reimbursements to average net assets | | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
Ratio of net expenses to average net assets | | 1.26 | % | 1.23 | % | 1.18 | % | 1.23 | % | 1.32 | % | 1.27 | % |
Ratio of net investment income (loss) to average net assets | | (0.13 | )% | (0.54 | )% | (0.94 | )% | (0.94 | )% | (0.94 | )% | (0.97 | )% |
Portfolio turnover rate | | 40.53 | % | 72.43 | % | 70.57 | % | 61.40 | % | 90.49 | % | 62.68 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
54
| | Class R | |
| | Six months
ended
4/30/2013(i) | | Year ended
10/31/2012 | | Year ended
10/31/2011 | | Year ended
10/31/2010 | | Year ended
10/31/2009 | | Year ended
10/31/2008 | |
Net asset value, beginning of period | | $ | 26.85 | | $ | 25.91 | | $ | 24.39 | | $ | 19.30 | | $ | 16.08 | | $ | 29.64 | |
INCOME FROM INVESTMENT OPERATIONS: | | | | | | | | | | | | | |
Net investment loss(ii) | | (0.08 | ) | (0.28 | ) | (0.40 | ) | (0.31 | ) | (0.22 | ) | (0.35 | ) |
Net realized and unrealized gain (loss) on investments | | 3.41 | | 2.35 | | 1.92 | | 5.40 | | 3.44 | | (13.21 | ) |
Total from investment operations | | 3.33 | | 2.07 | | 1.52 | | 5.09 | | 3.22 | | (13.56 | ) |
Distributions from net realized gains | | (3.23 | ) | (1.13 | ) | — | | — | | — | | — | |
Net asset value, end of period | | $ | 26.95 | | $ | 26.85 | | $ | 25.91 | | $ | 24.39 | | $ | 19.30 | | $ | 16.08 | |
Total return | | 13.5 | % | 8.4 | % | 6.2 | % | 26.4 | % | 20.1 | % | (45.8 | )% |
RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | |
Net assets, end of period (000’s omitted) | | $ | 40,454 | | $ | 47,507 | | $ | 62,211 | | $ | 68,071 | | $ | 51,707 | | $ | 39,033 | |
Ratio of gross expenses to average net assets | | 1.75 | % | 1.73 | % | 1.71 | % | 1.69 | % | 1.73 | % | 1.77 | % |
Ratio of expense reimbursements to average net assets | | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % |
Ratio of net expenses to average net assets | | 1.75 | % | 1.73 | % | 1.71 | % | 1.69 | % | 1.73 | % | 1.77 | % |
Ratio of net investment income (loss) to average net assets | | (0.60 | )% | (1.05 | )% | (1.47 | )% | (1.40 | )% | (1.35 | )% | (1.47 | )% |
Portfolio turnover rate | | 40.53 | % | 72.43 | % | 70.57 | % | 61.40 | % | 90.49 | % | 62.68 | % |
(i) Unaudited. Ratios have been annualized; total return and portfolio turnover rate have not been annualized.
(ii) Amount was computed based on average shares outstanding during the period.
See Notes to Financial Statements.
55
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 — General:
The Alger Institutional Funds (the “Trust”), is a diversified, open-end registered investment company organized as a business trust under the laws of the Commonwealth of Massachusetts. The Trust operates as a series company and currently issues an unlimited number of shares of beneficial interest in four funds — Alger Capital Appreciation Institutional Fund, Alger Capital Appreciation Focus Fund (formerly the Alger Large Cap Growth Institutional Fund), Alger Mid Cap Growth Institutional Fund and Alger Small Cap Growth Institutional Fund (collectively, the “Funds” or individually, each a “Fund”). The Funds normally invest primarily in equity securities and each has an investment objective of long-term capital appreciation.
Each Fund offers one or more of the following share classes: Class A, C, I, R and Z. Class A shares are generally subject to an initial sales charge while Class C shares are generally subject to a deferred sales charge. Class I, R 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 cost of its transfer agency and sub-transfer agency services and each of Classes A, C and R bears the cost of its plan of distribution.
The Alger Large Cap Growth Institutional Fund changed its name to Alger Capital Appreciation Focus Fund effective December 31, 2012. Its investment objective to seek long-term capital appreciation did not change. The Fund also started offering Class A, C and Z shares on December 31, 2012.
NOTE 2 — Significant Accounting Policies:
(a) Investment Valuation: The Funds value their financial instruments at fair value using independent dealers or pricing services under policies approved by the Board of Trustees. 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 time).
Equity securities and option contracts for which valuation information is readily available are valued at the last reported sales price or official closing price as reported by an independent pricing service on the primary market or exchange on which they are traded. In the absence of reported sales, such securities are valued at a price within the bid and ask price or, in the absence of a recent bid or ask 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.
56
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
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 of Trustees.
Securities in which the Funds invest may be traded in foreign markets that close before the close of the NYSE. Developments that occur between the close of the foreign markets and the close of the NYSE may result in adjustments to the foreign closing prices to reflect what the investment adviser, pursuant to policies established by the Board of Trustees, believes to be the fair value of these securities as of the close of the NYSE. The Funds may also fair value securities in other situations, for example, when a particular foreign market is closed but the 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 Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. ASC 820 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability and may be observable or unobservable. Observable inputs are based on market data obtained from sources independent of the Funds. Unobservable inputs are inputs that reflect the Funds’ own assumptions based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.
· Level 1 — quoted prices in active markets for identical investments
· Level 2 — significant other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
· Level 3 — significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)
The Funds’ valuation techniques are generally consistent with the market approach whereby prices and other relevant information generated by market transactions involving identical or comparable assets are used to measure fair value. 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. Valuation techniques for Level 3 securities include using the income approach whereby future amounts are converted, or discounted, to a current single amount. These fair value
57
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
measurements are determined on the basis of the value indicated by current market expectations about such future events. Inputs for Level 3 include unobservable market information which can include cash flows, income and expenses, and other information obtained from a company’s financial statements, or from market indicators such as benchmarks and indices.
Valuation processes are determined by a Valuation Committee (“Committee”) established by the Trust’s Board of Trustees (“Board”) and comprised of representatives of the Trust’s investment advisor. The Committee reports its valuation determinations to the Board which is responsible for approving valuation policy and procedures.
The Committee 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 Funds’ pricing vendor, and variances between transactional prices and previous mark-to-markets.
The Funds 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 and 2 are recognized at the end of the reporting period, and transfers into and out of Level 3 are recognized during the reporting period.
(b) Cash and Cash Equivalents: Cash and cash equivalents include U.S. dollars 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.
(d) Foreign Currency Translations: The books and records of the Funds are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the prevailing rates of exchange on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of such transactions.
Net realized gains and losses on foreign currency transactions represent net gains and losses from the disposition of foreign currencies, currency gains and losses realized between the trade dates and settlement dates of security transactions, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The effects of changes in foreign currency exchange rates on investments in securities are included in realized and unrealized gain or loss on investments in the Statement of Operations.
(e) Option Contracts: When a Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire
58
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option.
The Funds may also purchase put and call options. Each Fund pays a premium which is included in the Fund’s Statement of Assets and Liabilities as an investment and subsequently marked to market to reflect the current value of the option. Premiums paid for purchasing options which expire are treated as realized losses. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying security to determine the realized gain or loss.
(f) Dividends to Shareholders: Dividends and distributions payable to shareholders are recorded by the Funds on the ex-dividend date. Dividends from net investment income and distributions from net realized gains 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.
The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with federal income tax rules. Therefore, the source of a Fund’s distributions may be shown in the accompanying financial statements as either from, or in excess of, net investment income, net realized gain on investment transactions or return of capital, depending on the type of book/tax differences that may exist. Capital accounts within the financial statements are adjusted for permanent book/tax differences. Reclassifications result primarily from the 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 values of the Funds and are designed to present each Fund’s capital accounts on a tax basis.
(g) Federal Income Taxes: It is each Fund’s policy to comply with the requirements of the Internal Revenue Code Subchapter M applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Provided that the Funds maintain such compliance, no federal income tax provision is required. Each Fund is treated as a separate entity for the purpose of determining such compliance.
Financial Accounting Standards Board Accounting Standards Codification 740 — Income Taxes (“ASC 740”) requires the Funds to measure and recognize in their financial statements the benefit of a tax position taken (or expected to be taken) on an income tax return if such position will more likely than not be sustained upon examination based on the technical merits of the position. No tax years are currently under investigation. The
59
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Funds file income tax returns in the U.S. Federal jurisdiction, as well as the New York State and New York City jurisdictions. The statute of limitations on the Funds’ tax returns remains open for the tax years 2009-2012. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.
(h) Allocation Methods: The Trust accounts separately for the assets, liabilities and operations of each Fund. Expenses directly attributable to each Fund are charged to that Fund’s operations; expenses which are applicable to all Funds are allocated among them based on net assets. Income, realized and unrealized gains and losses, and expenses of each Fund are allocated among the Fund’s classes based on relative net assets, with the exception of distribution fees and transfer agency 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. These unaudited interim financial statements reflect all adjustments which are, in the opinion of management, necessary to a present a fair statement of results for the interim period. All such adjustments are of normal recurring nature.
NOTE 3 — Investment Advisory Fees and Other Transactions with Affiliates:
(a) Investment Advisory Fees: Effective November 1, 2012, the investment advisory fee was changed to a tiered fee rate based on net assets of each Fund. The fees incurred by each Fund, pursuant to the provisions of the Trust’s Investment Advisory Agreement with Fred Alger Management, Inc., are payable monthly and computed based on the following rates. The actual rate paid as a percentage of average daily net assets, for the six months ended April 30, 2013, is set forth below under the heading “Actual Rate.”
| | Tier 1 | | Tier 2 | | Tier 3 | | Actual Rate | |
Alger Capital Appreciation Institutional Fund (a) | | .81 | % | .65 | % | .60 | % | .81 | % |
Alger Capital Appreciation Focus Fund (b) | | .71 | | .60 | | N/A | | .71 | |
Alger Mid Cap Growth Institutional Fund (b) | | .76 | | .70 | | N/A | | .76 | |
Alger Small Cap Growth Institutional Fund (b) | | .81 | | .75 | | N/A | | .81 | |
(a) Tier 1 rate is paid on assets up to $2 billion, Tier 2 rate is paid on assets between $2 and $4 billion, and Tier 3 rate is paid on assets in excess of $4 billion.
(b) Tier 1 rate is paid on assets up to $1 billion and Tier 2 rate is paid on assets in excess of $1 billion.
(b) Administration Fees: Fees incurred by each Fund, pursuant to the provisions of the Trust’s Administration Agreement with Fred Alger Management, Inc., are payable monthly and computed based on the average daily net assets of each Fund at the annual rate of 0.0275%.
60
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
(c) Distribution Fees:
Class A Shares: The Trust has adopted a Distribution Plan pursuant to which Class A shares of Alger Capital Appreciation Focus Fund pay Fred Alger & Company, Incorporated, the Fund’s distributor (the “Distributor” or “Alger Inc.”) and an affiliate of Alger Management, a fee at the annual rate of 0.25% of the respective average daily net assets of the Class A shares of the Fund to compensate Alger Inc. for its activities and expenses incurred in distributing the Class A shares. The fees charged may be more or less than the expenses incurred by Alger Inc.
Class C Shares: The Trust has adopted a Distribution Plan pursuant to which Class C shares of Alger Capital Appreciation Focus Fund pay Alger Inc. a fee at the annual rate of 1% of the respective average daily net assets of the Class C shares of the Fund to compensate Alger Inc. for its activities and expenses incurred in distributing the Class C shares. The fees charged may be more or less than the expenses incurred by Alger Inc.
Class R Shares: The Trust has adopted a Distribution Plan pursuant to which Class R shares of each Fund pay Alger Inc. a fee at the annual rate of 0.50% of the respective average daily net assets of the Class R shares of the designated Fund to compensate Alger Inc. for its activities and expenses incurred in distributing the Class R shares. The fees charged may be more or less than the expenses incurred by the Distributor.
(d) Brokerage Commissions: During the six months ended April 30, 2013, the Alger Capital Appreciation Institutional Fund, Alger Capital Appreciation Focus Fund, Alger Mid Cap Growth Institutional Fund and Alger Small Cap Growth Institutional Fund paid Alger Inc. commissions of $983,903, $4,784, $80,048 and $361,342, respectively, in connection with securities transactions.
(e) Shareholder Administrative Fees: The Trust 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 transfer agent, and other related services. The Funds compensate Alger Management at the annual rate of 0.0165% of their respective average daily net assets for the Class A and Class C shares and 0.01% of the daily net assets of the Class I, Class R and Class Z shares for these services. For the six months ended April 30, 2013, the Alger Capital Appreciation Institutional Fund, Alger Capital Appreciation Focus Fund, Alger Mid Cap Growth Institutional Fund and Alger Small Cap Growth Institutional Fund incurred fees of $96,688, $767, $9,590 and $47,746, respectively, for these services provided by Alger Management, which are included in the transfer agent fees and expenses in the Statement of Operations.
Alger Management makes payments to intermediaries that provide sub-accounting services to omnibus accounts held by the Funds. A portion of the fees paid by Alger Management to intermediaries that provide sub-accounting services are charged back to the appropriate Fund, subject to certain limitations, as approved by the Trust’s Board of Trustees. For the six months ended April 30, 2013, Alger Management charged back to the Alger Capital Appreciation Institutional Fund, Alger Capital Appreciation Focus Fund, Alger Mid Cap Growth Institutional Fund, and Alger Small Cap Growth Institutional Fund $361,344, $7,390, $113,257 and $244,014, respectively, for these
61
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
services, which are included in the transfer agent fees and expenses in the Statements of Operations.
(f) Shareholder Servicing Fees: The Trust has entered into a shareholder servicing agreement with Alger Inc. whereby Alger Inc. provides the Trust with ongoing servicing of shareholder accounts. As compensation for such services, the Class I shares and Class R shares of each Fund pay Alger Inc. a monthly fee at an annual rate of 0.25% of the value of the average daily net assets of those classes. The fees charged may be more or less than the expenses incurred by the Distributor.
(g) Trustee Fees: From November 1, 2012, through February 28, 2013, each Fund paid each trustee who is not affiliated with Alger Management or its affiliates $750 for each meeting attended, to a maximum of $3,000 per annum, plus travel expenses incurred for attending the meeting. The Chairman of the Board received an additional annual fee of $15,000 which was paid, pro rata, by all U.S.-registered funds managed by Alger Management. Additionally, each member of a Fund’s audit committee received $75 from the Fund for each audit committee meeting attended, to a maximum of $300 per annum.
Effective March 1, 2013, each Fund pays each trustee who is not affiliated with Alger Management or its affiliates $880 for each meeting attended, to a maximum of $3,520 per annum, plus travel expenses incurred for attending the meeting. The Chairman of the Board receives an additional annual fee of $22,500 which is paid, pro rata, by all U.S.-registered funds managed by Alger Management. Additionally, each member of a Fund’s audit committee receives $75 from the Fund for each audit committee meeting attended, to a maximum of $300 per annum.
(h) Interfund Loans: The Funds, 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 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.
During the six months ended April 30, 2013, Alger Capital Appreciation Focus Fund, Alger Mid Cap Growth Institutional Fund and Alger Small Cap Growth Institutional Fund incurred interest expenses of $2,390, 7,264 and $236, respectively, in connection with interfund loans.
(i) Other Transactions With Affiliates: Certain officers of the Trust are directors and officers of Alger Management and the Distributor. At April 30, 2013, Alger Management and its affiliates owned shares in the following Fund:
| | SHARE CLASS | |
| | A | | C | | I | | R | | Z | |
Alger Capital Appreciation Focus Fund | | 6,803 | | — | | 6,803 | | — | | 6,803 | |
62
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
NOTE 4 — Securities Transactions:
The following summarizes the securities transactions by the Funds, other than U.S. Government and short-term securities, for the six months ended April 30, 2013:
| | PURCHASES | | SALES | |
Alger Capital Appreciation Institutional Fund | | $ | 1,349,811,494 | | $ | 1,223,833,991 | |
Alger Capital Appreciation Focus Fund | | 14,776,957 | | 21,080,632 | |
Alger Mid Cap Growth Institutional Fund | | 157,609,260 | | 210,122,397 | |
Alger Small Cap Growth Institutional Fund | | 383,981,032 | | 531,620,436 | |
| | | | | | | |
Written call and put options activity for the six months ended April 30, 2013, was as follows:
| | NUMBER OF
CONTRACTS | | PREMIUMS
RECEIVED | |
Alger Mid Cap Growth Institutional Fund | | | | | |
Call Options outstanding at October 31, 2012 | | 1,203 | | $ | 242,293 | |
Call Options written | | 4,967 | | 1,149,809 | |
Call Options closed | | (2,444 | ) | (605,304 | ) |
Call Options expired | | (963 | ) | (137,951 | ) |
Call Options exercised | | (1,775 | ) | (397,590 | ) |
Call Options outstanding at April 30, 2013 | | 988 | | $ | 251,257 | |
| | NUMBER OF
CONTRACTS | | PREMIUMS
RECEIVED | |
Alger Mid Cap Growth Institutional Fund | | | | | |
Put Options outstanding at October 31, 2012 | | 1,239 | | $ | 214,975 | |
Put Options written | | 7,264 | | 1,336,195 | |
Put Options closed | | (2,481 | ) | (432,117 | ) |
Put Options expired | | (3,036 | ) | (480,118 | ) |
Put Options exercised | | (2,237 | ) | 484,651 | ) |
Put Options outstanding at April 30, 2013 | | 749 | | $ | 154,284 | |
As of April 30, 2013, Alger Mid Cap Growth Institutional Fund had portfolio securities and cash valued at $5,187,043, segregated as collateral for written options.
NOTE 5 — Borrowings:
The Funds may borrow from their custodian on an uncommitted basis. Each Fund pays the custodian a market rate of interest, generally based upon the London Interbank Offered Rate. The Funds may also borrow from other funds advised by Alger Management, as discussed in Note 3(h). For the six months ended April 30, 2013, the Funds had the following borrowings:
63
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
| | AVERAGE DAILY
BORROWING | | WEIGHTED AVERAGE
INTEREST RATE | |
Alger Capital Appreciation Focus Fund | | $ | 440,816 | | 1.14 | % |
Alger Mid Cap Growth Institutional Fund | | 1,766,653 | | 1.39 | |
Alger Small Cap Growth Institutional Fund | | 42,514 | | 1.12 | |
| | | | | | |
The highest amount borrowed during the six months ended April 30, 2013 for each Fund was as follows:
| | HIGHEST BORROWING | |
Alger Capital Appreciation Focus Fund | | $ | 5,150,000 | |
Alger Mid Cap Growth Institutional Fund | | 7,636,000 | |
Alger Small Cap Growth Institutional Fund | | 5,465,000 | |
| | | | |
NOTE 6 — Share Capital:
The Trust has an unlimited number of authorized shares of beneficial interest of $.001 par value which are presently divided into four series. Each series is divided into two separate classes, except that the shares of Alger Capital Appreciation Focus Fun are dividend into five separate classes. The transactions of shares of beneficial interest were as follows:
| | FOR THE SIX MONTHS ENDED
APRIL 30, 2013 | | FOR THE YEAR ENDED
OCTOBER 31, 2012 | |
| | SHARES | | AMOUNT | | SHARES | | AMOUNT | |
Alger Capital Appreciation Institutional Fund | | | | | | | | | |
Class I: | | | | | | | | | |
Shares sold | | 11,747,678 | | $ | 273,755,657 | | 27,268,813 | | $ | 599,933,680 | |
Dividends reinvested | | 2,816,247 | | 63,309,222 | | 1,899,304 | | 37,169,382 | |
Shares redeemed | | (9,789,518 | ) | (228,630,899 | ) | (14,726,747 | ) | (322,570,207 | ) |
Net increase | | 4,774,407 | | $ | 108,433,980 | | 14,441,370 | | $ | 314,532,855 | |
Class R: | | | | | | | | | |
Shares sold | | 2,871,123 | | $ | 63,405,268 | | 7,643,232 | | $ | 159,404,194 | |
Dividends reinvested | | 723,239 | | 15,412,221 | | 434,479 | | 8,133,448 | |
Shares redeemed | | (2,866,365 | ) | (63,310,854 | ) | (3,456,723 | ) | (72,485,810 | ) |
Net increase | | 727,997 | | $ | 15,506,635 | | 4,620,988 | | $ | 95,051,832 | |
64
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
| | FOR THE SIX MONTHS ENDED
APRIL 30, 2013 | | FOR THE YEAR ENDED
OCTOBER 31, 2012 | |
| | SHARES | | AMOUNT | | SHARES | | AMOUNT | |
Alger Capital Appreciation Focus Fund | | | | | | | | | |
Class A: | | | | | | | | | |
Shares sold | | 78,860 | | $ | 1,227,560 | | — | | $ | — | |
Shares redeemed | | (958 | ) | (15,134 | ) | — | | — | |
Net increase | | 77,902 | | $ | 1,212,426 | | — | | $ | — | |
Class C: | | | | | | | | | |
Shares sold | | 89,722 | | $ | 1,379,274 | | — | | $ | — | |
Net increase | | 89,722 | | $ | 1,379,274 | | — | | $ | — | |
Class I: | | | | | | | | | |
Shares sold | | 94,045 | | $ | 1,439,990 | | 638,850 | | $ | 9,262,473 | |
Shares redeemed | | (604,815 | ) | (9,034,370 | ) | (784,518 | ) | (11,245,728 | ) |
Net decrease | | (510,770 | ) | $ | (7,594,380 | ) | (145,668 | ) | $ | (1,983,255 | ) |
Class R: | | | | | | | | | |
Shares sold | | 33,677 | | $ | 485,107 | | 107,333 | | $ | 1,487,495 | |
Shares redeemed | | (97,124 | ) | (1,394,647 | ) | (227,020 | ) | (3,165,971 | ) |
Net decrease | | (63,447 | ) | $ | (909,540 | ) | (119,687 | ) | $ | (1,678,476 | ) |
Class Z: | | | | | | | | | |
Shares sold | | 6,803 | | $ | 100,000 | | — | | $ | — | |
Net increase | | 6,803 | | $ | 100,000 | | — | | $ | — | |
| | | | | | | | | |
Alger Mid Cap Growth Institutional Fund | | | | | | | | | |
Class I: | | | | | | | | | |
Shares sold | | 882,510 | | $ | 14,138,466 | | 3,127,646 | | $ | 43,915,976 | |
Dividends reinvested | | 23,607 | | 360,006 | | — | | — | |
Shares redeemed | | (3,850,653 | ) | (60,200,551 | ) | (14,186,588 | ) | (201,437,220 | ) |
Net decrease | | (2,944,536 | ) | $ | (45,702,079 | ) | (11,058,942 | ) | $ | (157,521,244 | ) |
Class R: | | | | | | | | | |
Shares sold | | 189,028 | | $ | 2,821,302 | | 551,108 | | $ | 7,360,055 | |
Dividends reinvested | | 5,780 | | 83,178 | | — | | — | |
Shares redeemed | | (556,887 | ) | (8,263,769 | ) | (1,328,452 | ) | (17,858,063 | ) |
Net decrease | | (362,079 | ) | $ | (5,359,289 | ) | (777,344 | ) | $ | (10,498,008 | ) |
| | | | | | | | | |
Alger Small Cap Growth Institutional Fund | �� | | | | | | | | |
Class I: | | | | | | | | | |
Shares sold | | 3,937,725 | | $ | 109,761,370 | | 7,589,293 | | $ | 210,556,809 | |
Dividends reinvested | | 3,718,319 | | 96,639,116 | | 1,691,801 | | 43,496,198 | |
Shares redeemed | | (8,459,719 | ) | (234,078,450 | ) | (17,778,509 | ) | (495,416,035 | ) |
Net decrease | | (803,675 | ) | $ | (27,677,964 | ) | (8,497,415 | ) | $ | (241,363,028 | ) |
Class R: | | | | | | | | | |
Shares sold | | 160,249 | | $ | 4,197,127 | | 367,848 | | $ | 9,839,818 | |
Dividends reinvested | | 195,542 | | 4,812,279 | | 97,573 | | 2,402,238 | |
Shares redeemed | | (624,396 | ) | (16,367,954 | ) | (1,096,876 | ) | (29,095,235 | ) |
Net decrease | | (268,605 | ) | $ | (7,358,548 | ) | (631,455 | ) | $ | (16,853,179 | ) |
65
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
NOTE 7 — Income Tax Information:
At October 31, 2012, the Funds, for federal income tax purposes, had capital loss carryforwards which expire as set forth in the table below. These amounts may be applied against future net realized gains until the earlier of their utilization or expiration.
Expiration Dates | | Alger Capital
Appreciation
Institutional Fund | | Alger Capital
Appreciation
Focus Fund | | Alger Mid Cap
Growth
Institutional Fund | | Alger Small Cap
Growth
Institutional Fund | |
POST ACT | | — | | — | | $ | 9,950,305 | | — | |
2016 | | — | | $ | 4,652,997 | | 18,359,838 | | — | |
2017 | | — | | 4,214,883 | | 322,038,630 | | — | |
Total | | — | | $ | 8,867,880 | | $ | 350,348,773 | | — | |
Under the Regulated Investment Company Modernization Act of 2010, capital losses incurred by the Funds after October 31, 2011, are not subject to expiration (“POST ACT”). In addition, losses incurred after October 31, 2011 must be utilized prior to the utilization of capital loss carryforwards above.
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, 988 currency transactions, nondeductible expenses on dividends sold short, the tax treatment of partnerships investments, the realization of unrealized appreciation of passive foreign investment companies, and return of capital from real estate investment trust investments.
NOTE 8 — Fair Value Measurements:
The major categories of securities and their respective fair value inputs are detailed in each Fund’s Schedule of Investments. The following is a summary of the inputs used as of April 30, 2013, in valuing the Funds’ investments carried at fair value on a recurring basis. Based upon the nature, characteristics, and risks associated with their investments, the Funds have determined that presenting them by security type and sector is appropriate.
Alger Capital Appreciation Institutional
Fund | | TOTAL FUND | | LEVEL 1 | | LEVEL 2 | | LEVEL 3 | |
COMMON STOCKS | | | | | | | | | |
Consumer Discretionary | | $ | 414,126,673 | | $ | 414,126,673 | | — | | — | |
Consumer Staples | | 184,242,806 | | 184,242,806 | | — | | — | |
Energy | | 92,777,650 | | 92,777,650 | | — | | — | |
Financials | | 114,526,743 | | 114,526,743 | | — | | — | |
Health Care | | 275,042,208 | | 275,042,208 | | — | | — | |
Industrials | | 216,255,136 | | 216,255,136 | | — | | — | |
Information Technology | | 600,719,047 | | 600,719,047 | | — | | — | |
Materials | | 70,781,019 | | 70,781,019 | | — | | — | |
Telecommunication Services | | 34,076,476 | | 34,076,476 | | — | | — | |
TOTAL COMMON STOCKS | | $ | 2,002,547,758 | | $ | 2,002,547,758 | | — | | — | |
66
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Alger Capital Appreciation Institutional
Fund | | TOTAL FUND | | LEVEL 1 | | LEVEL 2 | | LEVEL 3 | |
MASTER LIMITED PARTNERSHIP | | | | | | | | | |
Financials | | $ | 16,425,615 | | $ | 16,425,615 | | — | | — | |
REAL ESTATE INVESTMENT TRUST | | | | | | | | | |
Financials | | $ | 39,636,407 | | $ | 28,897,222 | | $ | 10,739,185 | | — | |
TOTAL INVESTMENTS IN SECURITIES | | $ | 2,058,609,780 | | $ | 2,047,870,595 | | $ | 10,739,185 | | — | |
Alger Capital Appreciation Focus Fund | | TOTAL FUND | | LEVEL 1 | | LEVEL 2 | | LEVEL 3 | |
COMMON STOCKS | | | | | | | | | |
Consumer Discretionary | | $ | 3,749,593 | | $ | 3,749,593 | | — | | — | |
Consumer Staples | | 837,415 | | 837,415 | | — | | — | |
Energy | | 783,367 | | 783,367 | | — | | — | |
Financials | | 973,302 | | 973,302 | | — | | — | |
Health Care | | 1,555,651 | | 1,555,651 | | — | | — | |
Industrials | | 1,318,069 | | 1,318,069 | | — | | — | |
Information Technology | | 3,269,077 | | 3,269,077 | | — | | — | |
Materials | | 447,435 | | 447,435 | | — | | — | |
Telecommunication Services | | 188,686 | | 188,686 | | — | | — | |
TOTAL COMMON STOCKS | | $ | 13,122,595 | | $ | 13,122,595 | | — | | — | |
MASTER LIMITED PARTNERSHIP | | | | | | | | | |
Financials | | $ | 397,642 | | $ | 397,642 | | — | | — | |
REAL ESTATE INVESTMENT TRUST | | | | | | | | | |
Financials | | $ | 151,164 | | $ | 151,164 | | — | | — | |
TOTAL INVESTMENTS IN SECURITIES | | $ | 13,671,401 | | $ | 13,671,401 | | — | | — | |
Alger Mid Cap Growth Institutional
Fund | | TOTAL FUND | | LEVEL 1 | | LEVEL 2 | | LEVEL 3 | |
COMMON STOCKS | | | | | | | | | |
Consumer Discretionary | | $ | 48,298,634 | | $ | 48,298,634 | | — | | — | |
Consumer Staples | | 8,930,682 | | 8,930,682 | | — | | — | |
Energy | | 13,904,357 | | 13,904,357 | | — | | — | |
Financials | | 9,193,904 | | 9,193,904 | | — | | — | |
Health Care | | 24,809,393 | | 24,809,393 | | — | | — | |
Industrials | | 25,587,738 | | 25,587,738 | | — | | — | |
Information Technology | | 31,401,301 | | 31,401,301 | | — | | — | |
Materials | | 13,645,180 | | 13,645,180 | | — | | — | |
Telecommunication Services | | 3,399,690 | | 3,399,690 | | — | | — | |
TOTAL COMMON STOCKS | | $ | 179,170,879 | | $ | 179,170,879 | | — | | — | |
67
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Alger Mid Cap Growth Institutional
Fund | | TOTAL FUND | | LEVEL 1 | | LEVEL 2 | | LEVEL 3 | |
MASTER LIMITED PARTNERSHIP | | | | | | | | | |
Financials | | $ | 1,052,100 | | $ | 1,052,100 | | — | | — | |
REAL ESTATE INVESTMENT TRUST | | | | | | | | | |
Financials | | $ | 2,354,415 | | — | | $ | 2,354,415 | | — | |
PURCHASED OPTIONS | | | | | | | | | |
Energy | | $ | 10,230 | | $ | 10,230 | | — | | — | |
Financials | | $ | 8,808 | | $ | 8,808 | | — | | — | |
TOTAL PURCHASED OPTIONS | | $ | 19,038 | | $ | 19,038 | | — | | — | |
TOTAL INVESTMENTS IN SECURITIES | | $ | 182,596,432 | | $ | 180,242,017 | | $ | 2,354,415 | | — | |
SECURITIES SOLD SHORT | | | | | | | | | |
OPTIONS WRITTEN | | | | | | | | | |
Energy | | $ | 376,424 | | $ | 303,389 | | $ | 73,035 | | — | |
Financials | | $ | 6,967 | | $ | 6,967 | | — | | — | |
TOTAL OPTIONS WRITTEN | | $ | 383,391 | | $ | 310,356 | | $ | 73,035 | | — | |
Alger Small Cap Growth Institutional
Fund | | TOTAL FUND | | LEVEL 1 | | LEVEL 2 | | LEVEL 3 | |
COMMON STOCKS | | | | | | | | | |
Consumer Discretionary | | $ | 174,158,068 | | $ | 174,158,068 | | — | | — | |
Consumer Staples | | 33,443,839 | | 33,443,839 | | — | | — | |
Energy | | 52,744,793 | | 52,744,793 | | — | | — | |
Financials | | 32,459,648 | | 32,459,648 | | — | | — | |
Health Care | | 194,625,676 | | 194,625,676 | | — | | — | |
Industrials | | 157,752,120 | | 157,752,120 | | — | | — | |
Information Technology | | 196,177,411 | | 196,177,411 | | — | | — | |
Materials | | 50,121,488 | | 50,121,488 | | — | | — | |
Telecommunication Services | | 8,765,272 | | 8,765,272 | | — | | — | |
TOTAL COMMON STOCKS | | $ | 900,248,315 | | $ | 900,248,315 | | — | | — | |
MASTER LIMITED PARTNERSHIP | | | | | | | | | |
Financials | | $ | 7,181,643 | | $ | 7,181,643 | | — | | — | |
REAL ESTATE INVESTMENT TRUST | | | | | | | | | |
Financials | | $ | 33,762,467 | | $ | 28,190,589 | | $ | 5,571,878 | | — | |
TOTAL INVESTMENTS IN SECURITIES | | $ | 941,192,425 | | $ | 935,620,547 | | $ | 5,571,878 | | — | |
On April 30, 2013, 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 April 30, 2013, such assets are categorized within the disclosure hierarchy as follows:
68
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
| | TOTAL FUND | | LEVEL 1 | | LEVEL 2 | | LEVEL 3 | |
Cash and Cash equivalents: | | | | | | | | | |
Alger Capital Appreciation Institutional Fund | | 980,681 | | 980,681 | | — | | — | |
Alger Capital Appreciation Focus Fund | | $ | 16,731,373 | | $ | 16,731,373 | | — | | — | |
Alger Mid Cap Growth Institutional Fund | | 6,629,495 | | 6,629,495 | | — | | — | |
Alger Small Cap Growth Institutional Fund | | 11,843,768 | | 11,843,768 | | — | | — | |
Total | | $ | 30,185,317 | | $ | 30,185,317 | | — | | — | |
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.
Forward currency contracts—In connection with portfolio purchases and sales of securities denominated in foreign currencies, the Funds may enter into forward currency contracts. Additionally, each Fund may enter into such contracts to economically hedge certain other foreign currency denominated investments. These contracts are valued at the current cost of covering or offsetting such contracts, and the related realized and unrealized foreign exchange gains and losses are included in the Statement of Operations. In the event that counterparties fail to settle these currency contracts or the related foreign security trades, a Fund could be exposed to foreign currency fluctuations.
Options—The Funds seek to capture the majority of the returns associated with equity market investments. To meet this investment goal, the Funds invest in a broadly diversified portfolio of common stocks, while also buying and selling call and put options on equities and equity indices. The Funds purchase call options to increase their exposure to stock market risk and also provide diversification of risk. The Funds purchase put options in order to protect from significant market declines that may occur over a short period of time. The Funds will write covered call and cash secured put options to generate cash flows while reducing the volatility of the Funds’ portfolios. The cash flows may be an important source of the Funds’ returns, although written call options may reduce the Funds’ ability to profit from increases in the value of the underlying security or equity portfolio. The value of a call option generally increases as the price of the underlying stock increases and decreases as the stock decreases in price. Conversely, the value of a put option generally increases as the price of the underlying stock decreases and decreases as the stock increases in price. The combination of the diversified stock portfolio and the purchase and sale of options is intended to provide the Funds with the majority of the returns associated with equity market investments but with reduced volatility and returns that are augmented with the cash flows from the sale of options. During the six months ended April 30, 2013, options were used in accordance with these objectives.
69
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
The fair values of derivative instruments as of April 30, 2013, are as follows:
Alger Mid Cap Growth Institutional Fund
| | ASSET DERIVATIVES 2013 | | LIABILITY DERIVATIVES 2013 | |
Derivatives not accounted
for as hedging instruments | | Balance Sheet
Location | | Fair Value | | Balance Sheet
Location | | Fair Value | |
Purchased Put Options | | Investments in Securities, at value | | $ | 8,808 | | | | | |
Purchased Call Options | | Investments in Securities, at value | | 10,230 | | | | | |
Written Put Options | | | | | | Written options outstanding, at value | | $ | 120,920 | |
Written Call Options | | | | | | Written options outstanding, at value | | 262,471 | |
Total | | | | $ | 19,038 | | | | $ | 383,391 | |
For the six months ended April 30, 2013, Alger Mid Cap Growth Institutional Fund’s cost of option purchased was $1,377,792 and option sold was $3,229,028. The effect of derivative instruments on the Statement of Operations for the six months ended April 30, 2013, is as follows:
NET REALIZED GAIN (LOSS) ON INVESTMENTS AND OPTIONS
Alger Mid Cap Growth Institutional Fund
Derivatives not accounted for as hedging instruments | | Options | |
Purchased Options | | $ | 204,937 | |
Written Options | | 1,407,472 | |
Total | | $ | 1,612,409 | |
NET CHANGE IN UNREALIZED DEPPRECIATION ON INVESTMENTS, OPTIONS
Alger Mid Cap Growth Institutional Fund
Derivatives not accounted for as hedging instruments | | Options | |
Purchased Options | | $ | (9,963 | ) |
Written Options | | (16,327 | ) |
Total | | $ | (26,290 | ) |
NOTE 10 — Litigation:
On August 31, 2005, the West Virginia Securities Commissioner (the “WVSC”), in an ex parte Summary Order to Cease and Desist and Notice of Right to Hearing, concluded that the Manager and the Distributor had violated the West Virginia Uniform Securities Act (the “WVUSA”), and ordered the Manager and the Distributor to cease and desist from further violations of the WVUSA by engaging in the market-timing-related conduct described in the order. The ex parte order provided notice of their right to a hearing with respect to the violations of law asserted by the WVSC. Other firms unaffiliated with the
70
THE ALGER INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
Manager were served with similar orders. The Manager and the Distributor intend to request a hearing for the purpose of seeking to vacate or modify the order.
NOTE 11 — Recent Accounting Pronouncements:
In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”), which provides guidance regarding balance sheet offsetting disclosures. The amendments in ASU 2011-11 require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effects of those arrangements on its financial position. Entities are required to disclose gross information and net information about both instruments and transactions eligible for offset in the statement of assets and liabilities and transactions subject to an agreement similar to a master netting arrangement. The objective of ASU 2011-11 is to facilitate comparison between those entities that prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of IFRS. The new guidance is effective for annual reporting periods beginning on or after January 1, 2013. The Funds do not believe that this will have a material impact on the financial statements.
NOTE 12 — Subsequent Events:
Management of each Fund has evaluated events that have occurred subsequent to April 30, 2013 through the issuance date of the Financial Statements. No such events have been identified which require recognition and disclosure.
71
THE ALGER INSTITUTIONAL FUNDS
ADDITIONAL INFORMATION (Unaudited)
Expense Example
As a shareholder of a Fund, you incur two types of costs: transaction costs, if applicable, including sales charges (loads) and redemption fees; and ongoing costs, including management fees, distribution (12b-1) fees, if applicable, and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example below is based on an investment of $1,000 invested at the beginning of the six-month period starting November 1, 2012 and ending April 30, 2013.
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.
72
| | | | Beginning
Account
Value
November 1, 2012 | | Ending
Account
Value
April 30, 2013 | | Expenses
Paid During
the Six Months
Ended
April 30, 2013(a) | | Ratio of
Expenses to
Average
Net Assets
For the
Six Months
Ended
April 30, 2013(b) | |
Alger Capital Appreciation Institutional Fund | | | | | | | | | |
Class I | | Actual | | $ | 1,000.00 | | $ | 1,118.19 | | $ | 6.31 | | 1.20 | % |
| | Hypothetical(c) | | 1,000.00 | | 1,018.84 | | 6.02 | | 1.20 | |
Class R | | Actual | | 1,000.00 | | 1,115.30 | | 8.91 | | 1.70 | |
| | Hypothetical(c) | | 1,000.00 | | 1,016.37 | | 8.50 | | 1.70 | |
| | | | | | | | | | | |
Alger Capital Appreciation Focus Fund | | | | | | | | | |
Class A | | Actual | | $ | 1,000.00 | | $ | 1,087.07 | | $ | 6.81 | | 1.30 | % |
| | Hypothetical(c) | | 1,000.00 | | 1,018.27 | | 6.59 | | 1.30 | |
Class C | | Actual | | 1,000.00 | | 1,084.35 | | 10.76 | | 2.05 | |
| | Hypothetical(c) | | 1,000.00 | | 1,014.47 | | 10.40 | | 2.05 | |
Class I | | Actual | | 1,000.00 | | 1,100.48 | | 8.12 | | 1.56 | |
| | Hypothetical(c) | | 1,000.00 | | 1,017.07 | | 7.79 | | 1.56 | |
Class R | | Actual | | 1,000.00 | | 1,091.82 | | 15.57 | | 3.00 | |
| | Hypothetical(c) | | 1,000.00 | | 1,009.91 | | 14.96 | | 3.00 | |
Class Z | | Actual | | 1,000.00 | | 1,088.44 | | 4.62 | | 0.89 | |
| | Hypothetical(c) | | 1,000.00 | | 1,020.37 | | 4.47 | | 0.89 | |
| | | | | | | | | | | |
Alger Mid Cap Growth Institutional Fund | | | | | | | | | |
Class I | | Actual | | $ | 1,000.00 | | $ | 1,170.03 | | $ | 7.12 | | 1.32 | % |
| | Hypothetical(c) | | 1,000.00 | | 1,018.23 | | 6.62 | | 1.32 | |
Class R | | Actual | | 1,000.00 | | 1,167.58 | | 9.64 | | 1.79 | |
| | Hypothetical(c) | | 1,000.00 | | 1,015.90 | | 8.96 | | 1.79 | |
| | | | | | | | | | | |
Alger Small Cap Growth Institutional Fund | | | | | | | | | |
Class I | | Actual | | $ | 1,000.00 | | $ | 1,138.64 | | $ | 6.67 | | 1.26 | % |
| | Hypothetical(c) | | 1,000.00 | | 1,018.55 | | 6.30 | | 1.26 | |
Class R | | Actual | | 1,000.00 | | 1,135.45 | | 9.28 | | 1.75 | |
| | Hypothetical(c) | | 1,000.00 | | 1,016.10 | | 8.77 | | 1.75 | |
(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 181/365 (to reflect the one-half year period). |
(b) | Annualized. |
(c) | 5% annual return before expenses. |
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Privacy Policy
U.S. Consumer Privacy Notice Rev. 01/2011 | 3/31/11 |
FACTS | | WHAT DOES ALGER DO WITH YOUR PERSONAL INFORMATION? |
Why? | | Financial companies choose how they share your personal information, which, under Federal law, means personally identifiable 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 · account balances, transaction history and credit information |
| | |
How? | | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Alger chooses to share; and whether you can limit this sharing. |
Reasons we can share your personal
information | | Does
Alger share? | | Can you limit
this sharing? |
| | | | |
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | | Yes | | No |
| | | | |
For our marketing purposes — with service providers we use to offer our products and services to you | | Yes | | No |
| | | | |
For joint marketing with other financial companies | | No | | We don’t share |
| | | | |
For our affiliates’ everyday business purposes—information about your transactions and experiences | | Yes | | No |
| | | | |
For our affiliates’ everyday business purposes—information about your creditworthiness | | No | | We don’t share |
| | | | |
For nonaffiliates to market to you — for all credit card accounts | | No | | We don’t share |
| | | | |
For nonaffiliates to market to you — for accounts and services endorsed by another organization | | No | | We don’t share |
| | | | |
For nonaffiliates to market to you — for accounts other than credit card accounts and Sponsored Accounts, such as insurance, investments, deposit and lending | | No | | We don’t share |
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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 China-U.S. Growth Fund. |
| | |
What we do | | |
| | |
How does Alger protect my personal information? | | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. For more information visit alger.com. |
| | |
How does Alger collect my personal information? | | We collect your personal information, for example, when you: · open an account or perform transactions · seek advice about your investments We also collect your personal information from others, such as credit bureaus, affiliates, or other companies. |
| | |
Why can’t I limit all sharing? | | Federal law gives you the right to limit some but not all sharing related to: · sharing for affiliates’ everyday business purposes — information about your creditworthiness · 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 China-U.S. 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. |
75
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 Funds 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 Funds’ portfolio securities. These policies and procedures recognize that there may be legitimate business reasons for holdings to be disclosed and seek to balance those interests to protect the proprietary nature of the trading strategies and implementation thereof by the Funds.
Generally, the policies prohibit the release of information concerning portfolio holdings which have not previously been made public to individual investors, institutional investors, intermediaries that distribute the Funds’ shares and other parties which are not employed by the Manager or its affiliates except when the legitimate business purposes for selective disclosure and other conditions (designed to protect the Funds) are acceptable.
The Funds make their 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 Funds’ fiscal quarter. The Funds’ 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 Funds make publicly available their respective month-end top 10 holdings with a 15 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 Funds provide 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 Funds will communicate with these service providers to confirm that they understand the Funds’ policies and procedures regarding such disclosure. This agreement must be approved by the Funds’ Chief Compliance Officer.
76
The Board of Trustees periodically reviews a report disclosing the third parties to whom each Fund’s holdings information has been disclosed and the purpose for such disclosure, and it considers whether or not the release of information to such third parties is in the best interest of the Fund and its shareholders.
In addition to material the Funds routinely provide to shareholders, the Manager may, upon request, make additional statistical information available regarding the Funds. Such information will include, but not be limited to, relative weightings and characteristics of Fund portfolios versus their respective index and security specific impact on overall portfolio performance. Please contact the Funds at (800) 992-3863 to obtain such information.
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THE ALGER INSTITUTIONAL FUNDS
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
This report is submitted for the general information of the shareholders of The Alger Institutional Funds. It is not authorized for distribution to prospective investors unless accompanied by an effective Prospectus for the Trust, which contains information concerning the Trust’s investment policies, fees and expenses as well as other pertinent information.
AIFSAR
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this document.
(b) No changes in the Registrant’s internal control over financial reporting occurred during the Registrant’s second fiscal quarter of the period covered by this report that materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
ITEM 12. EXHIBITS.
(a) (1) Not applicable
(a) (2) Certifications of principal executive officer and principal financial officer as required by rule 30a-2(a) under the Investment Company Act of 1940 are attached as Exhibit 99.CERT
(a) (3) Not applicable
(b) Certifications of principal executive officer and principal financial officer as required by rule 30a-2(b) under the Investment Company Act of 1940 are attached as Exhibit 99.906CERT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
The Alger Institutional Funds | |
| |
By: | /s/Hal Liebes | |
| | |
| Hal Liebes | |
| | |
| President | |
| |
Date: June 17, 2013 | |
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: June 17, 2013 | |
| |
By: | /s/Michael D. Martins | |
| | |
| Michael D. Martins | |
| | |
| Treasurer | |
| |
Date: June 17, 2013 | |
